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Share Name Share Symbol Market Type Share ISIN Share Description
Easyjet Plc LSE:EZJ London Ordinary Share GB00B7KR2P84 ORD 27 2/7P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  -1.40 -0.28% 496.20 493.40 494.00 496.20 488.30 490.60 2,764,048 16:35:10
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Travel & Leisure 1,458.0 -1,036.0 -159.0 - 3,761

easyJet PLC Trading Update for year ended 30 September 2022

13/10/2022 7:00am

UK Regulatory (RNS & others)


Easyjet (LSE:EZJ)
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From Aug 2022 to Feb 2023

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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.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

END

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October 13, 2022 02:00 ET (06:00 GMT)

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