TIDMEZJ
RNS Number : 7171C
easyJet PLC
13 October 2022
13 October 2022
easyJet plc
('easyJet')
easyJet Trading Update for the year ended 30 September 2022
Strong performance in the quarter with EBITDAR between
GBP665m-GBP685m, in line with Q4 FY19
- Q4 headline EBIT expected to be between GBP525 million and
GBP545 million as easyJet's transformation continues to deliver
o Network optimisation driving demand as Q4 load factors recover
to 92%
o Step-changed ancillaries continuing to deliver with Q4 airline
ancillary RPS 52% above FY19
- Actions taken improved operational performance from the
beginning of July with on the day cancellations in Q4 below Q4
FY19
- Resilient full year performance despite external headwinds
o FY22 Group headline loss before tax of between GBP170 million
and GBP190 million, which includes a c.GBP64 million non-operating,
non-cash FX loss from balance sheet revaluations together with
c.GBP75 million of incremental disruption costs(1) vs FY19, mainly
from operational issues experienced across the industry in Q3.
o FY22 Group headline EBIT expected to be break even
o easyJet holidays generated FY22 profit before tax in excess of
GBP35 million
- Q1 FY23 Outlook
o Capacity up 30% year on year to around 20m seats, c.83% of
FY19
o Booked load factors ahead of same point in FY19
o Yields remain robust
Summary
During its fourth quarter easyJet flew 26.3 million seats,
operating 88% of FY19 capacity. EBITDAR in the quarter was in line
with the same period in 2019 as proactive management actions drove
improvement. Load factors have risen, ending the quarter at 92%,
with strong yields, as demand for easyJet's leading network remains
solid.
easyJet expects its FY22 Group headline loss before tax to be
between GBP170 million and GBP190 million which includes a c.GBP64
million FX loss from balance sheet revaluations and incremental
disruption costs of c.GBP75 million , mainly from operational
issues experienced across the industry in Q3 . The impact of
Omicron, war in Ukraine and the industry wide issues experienced
this summer all affected operational performance during the
financial year. Despite this, demand has been strong for easyJet's
optimised primary airport network which continues to deliver
alongside step-changed ancillary revenue and the rapid growth of
easyJet holidays.
Operations have significantly improved as a result of management
actions to mitigate the disruption that the whole airline ecosystem
experienced through Q3. Since the start of July, easyJet's
operations normalised, with Q4 on the day cancellations being below
2019 levels. Some specific areas of the wider European airline
industry continue to have some ongoing challenges outside of
easyJet's control, for example air traffic control.
easyJet expects to fly around 20 million seats in Q1 of FY23.
This is more than 30% up year on year with UK capacity during the
peak travel periods, such as October half term and Christmas week,
back to pre-pandemic levels. Bookings continue to progress well
with load factors ahead of the same point in FY19 and yields remain
robust. This flying schedule retains resilience but also provides a
platform to prepare for the Summer 23 ramp up.
easyJet is well hedged with c.69% hedged for fuel in H1 of FY23
at c.$802 per metric tonne and c.44% hedged for fuel in H2 of FY23
at c.$897 per metric tonne. The spot price on 12 October 2022 was
around $1,100. easyJet is currently c.78% hedged for USD in H1 of
FY23 at 1.29 and c.47% hedged for USD in H2 of FY23 at 1.26. The
spot price on 12 October 2022 was around 1.11. US Dollar lease
payments remain hedged for the next three years.
Johan Lundgren, CEO of easyJet, said:
"easyJet achieved a record bounce back this summer with Q4
operating profit(2) expected to be between GBP525m and GBP545m and
passenger numbers almost doubling versus last summer to 24 million
with a load factor of 92%, as demand for our leading network and
services remains strong.
"Our step change in ancillary revenue has continued to deliver,
alongside easyJet holidays making a profitable contribution in its
first full year of operations. This was alongside our operational
performance(3) being ahead of the same period in 2019 while
customer satisfaction indicators also exceeded pre-pandemic levels
over the peak summer.
"Our summer 23 season went on sale last week and we were filling
the equivalent of more than four A320 aircraft a minute in the
opening hours demonstrating the continued demand.
"easyJet is Europe's largest operator at primary airports with
one of the strongest balance sheets in the aviation industry. We
face the uncertain macro-economic environment with many strengths
through our brand, network and business model which enable us to
provide low fares to millions despite the rising cost of
living."
Revenue, Cost and Liquidity
Total group revenue and headline EBIT costs for the fourth
quarter are expected to be around GBP2,515 million and around
GBP1,980 million respectively. Revenue continued to benefit from
strong demand for easyJet's leading network, the continued
outperformance of ancillary products and easyJet holidays. Costs
were incurred during the quarter as a result of additional
resilience built into the schedule impacting crew, airports and wet
lease costs.
Financing costs were impacted by the strengthening USD which has
driven a non-operating, non-cash FX loss of GBP30 million from
balance sheet revaluations in the fourth quarter.
As at 30 September 2022 easyJet had c.GBP3.6 billion of cash and
money market deposits and net debt of c.GBP0.7 billion.
Capacity
During Q4 easyJet flew 88% of FY19 capacity(4) , a significant
increase on the same period last year where easyJet flew 58% of
FY19 capacity. Load factor was 92% (Q4 FY21: 77%), due to increased
customer demand post travel restrictions easing.
Passenger(5) numbers in the quarter increased to 24.3 million
(Q4 FY21: 13.4 million).
July August September Q4 FY
2022 2022
2022 2022 2022
Number of flights 49,286 50,343 48,585 148,214 456,124
------- -------- ----------- -------- --------
Peak operating aircraft 318 319 318 319 319
------- -------- ----------- -------- --------
Passengers (thousand)
(5) 8,137 8,310 7,824 24,271 69,707
------- -------- ----------- -------- --------
Seats flown (thousand) 8,747 8,928 8,624 26,299 81,549
------- -------- ----------- -------- --------
Load factor (6) 93% 93% 91% 92% 85%
------- -------- ----------- -------- --------
Sustainability
During the quarter, easyJet released its net zero pathway
setting out its ambitious targets to 2050. This roadmap
incorporates recent partnerships with Rolls Royce, pioneering
hydrogen combustion engine technology, and Airbus, to support the
development of carbon removal technology. Further information on
this can be found on our corporate website at
https://corporate.easyjet.com/corporate-responsibility/net-zero-pathway
.
Outlook
easyJet expects to report a Group headline loss before tax in
the range of GBP170 million to GBP190 million for the 2022
financial year.
In line with easyJet's dividend policy and considering the
expected result, the Board will not be recommending the payment of
a dividend in respect of the year to 30 September 2022.
easyJet expects to fly around 20 million seats in Q1 of FY23, up
more than 30% year on year. Load factors are currently ahead of the
same point in FY19 and yields remain robust.
Fuel & FX Hedging:
Jet Fuel H1'23 H2'23 USD H1'23 H2'23
Hedged position 69% 44% Hedged position 78% 47%
----- ----- ----- -----
Average hedged rate ($/MT) 802 897 Average hedged rate (USD/GBP) 1.29 1.26
----- ----- ----- -----
Current spot ($/MT) at 12.10.22 c. 1,100 Current spot (USD/GBP) at 12.10.22 c. 1.11
------------ ------------
Full results for the year ended 30 September 2022 will be
reported on 29 November 2022.
Summary financial data
(GBP'm) Low High
Q4 Group headline EBITDAR range GBP665 GBP685
--------- ---------
Q4 Group headline EBIT range GBP525 GBP545
--------- ---------
Q4 Group headline profit before tax range GBP470 GBP490
--------- ---------
FY22 Group headline EBITDAR range GBP560 GBP580
--------- ---------
FY22 Group headline EBIT range GBP(10) GBP10
--------- ---------
FY22 Group headline loss before tax range GBP(190) GBP(170)
--------- ---------
FY22 Company compiled consensus - Group GBP(183)
headline loss before tax
--------------------
Q4'22 Q4'21 FY22 FY21
--------- ------ --------- ---------
Group revenue (GBP'm) c.2,515 1,005 c.5,770 1,458
--------- ------ --------- ---------
Group headline EBIT
costs (GBP'm) c.1,980 1,075 c.5,770 2,494
--------- ------ --------- ---------
Non-operating FX
gain/(loss) from
balance sheet revaluations
(GBP'm) c.(30) (13) c.(64) 9
--------- ------ --------- ---------
Cash and money market
deposits (GBP'bn) - - c.3.6 3.5
--------- ------ --------- ---------
Net debt (GBP'bn) - - c.0.7 0.9
--------- ------ --------- ---------
For further details please contact easyJet plc :
Institutional investors and analysts:
Michael Barker Investor Relations +44 (0) 7985 890 939
Adrian Talbot Investor Relations +44 (0) 7971 592 373
Media:
Anna Knowles Corporate Communications +44 (0) 7985 873 313
Edward Simpkins FGS Global +44 (0) 7947 740 551 / (0) 207 251
3801
Dorothy Burwell FGS Global +44 (0) 7733 294 930 / (0) 207 251
3801
A copy of this Trading Statement is available at
http://corporate.easyjet.com/investors
Notes:
1. Disruption costs for FY22 c.GBP200 million vs FY19 of GBP126 million
2. Operating profit = EBIT.
3. Operational performance relating to cancellations on the day.
4. Capacity based on actual number of seats flown.
5. Represents the number of earned seats flown. Earned seats
include seats that are flown whether or not the passenger turns up
as easyJet is a no-refund airline, and once a flight has departed a
no-show customer is generally not entitled to change flights or
seek a refund. Earned seats also include seats provided for
promotional purposes and to staff for business travel.
6. Represents the number of passengers as a proportion of the
number of seats available for passengers. No weighting of the load
factor is carried out to recognise the effect of varying flight (or
"sector") lengths.
All numbers in this statement are provisional and subject to
audit.
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END
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October 13, 2022 02:00 ET (06:00 GMT)
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