REG - easyJet PLC - Trading Update for the quarter ended 30 June 2023

easyJetAnnouncement

20/07/2023 07:00

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RNS Number : 5748G  easyJet PLC  20 July 2023

20 July 2023

easyJet plc

('easyJet')

 

easyJet Trading Update for the quarter ended 30 June 2023

 

easyJet performs strongly delivering a record Q3 PBT

·    Q3 headline profit before tax £203 million (£317 million
improvement vs Q3'22)

o  Passenger growth +7% YoY

o  RPS +23% YoY

§ Load factor +2 ppts YoY

§ Ticket yield per passenger +22% YoY

§ Ancillary yield per passenger +20% YoY (+87% vs Q3 FY19)

o  easyJet holidays delivers £49 million PBT (Q3'22 £16 million)

o  Headline CPS ex Fuel reduced by 2% YoY

o  Fully crewed for pilots and cabin staff

·    easyJet holidays continues to outperform and is expected to deliver
£100m+ PBT in FY23

·    Q4 FY23 RPS is expected to be around +10% YoY

·    H2 Headline CPS ex fuel to be broadly flat YoY

·    $950 million of debt repaid during Q3 - c.£1.2bn debt retired during
this financial year

·    Q1 FY24

o  Capacity >15% YoY

o  Yields and load factor ahead YoY

o  Headline cost ex fuel expected to continue to reduce YoY

 

Summary

easyJet's third quarter profit improved by £317 million, year on year, as
demand for its network and services continues to be strong. A revenue per seat
increase of 23% year on year alongside headline cost per seat ex fuel reducing
by 2% and easyJet holidays PBT of £49 million is driving the Group towards a
strong outcome for FY23.

 

Based on current booking trends, easyJet expects Q4 to deliver another record
PBT performance with RPS up by around 10% year on year and cost per seat
excluding fuel for H2'23 expected to remain broadly flat year on year. This
guidance is subject to the operational environment with the whole industry
seeing challenging conditions this summer. More constrained air space and flow
rate restrictions are resulting in unprecedented ATC disruption as well as
increased ATC strike days up 40% year to date vs 2019. Management have taken
action to mitigate the impact of this on our customers.

 

Moving into this winter, easyJet is seeing good booking momentum, with sold
ticket yields and load factors ahead year on year, and planned capacity up
over 15% for the December quarter. Headline cost ex fuel is expected to reduce
year on year and easyJet holidays continues to see demand growth, with winter
bookings up >100% year on year.

 

easyJet currently has 163 aircraft on order for delivery through to 2028. We
are now running a process to secure additional firm order positions for our
longer term fleet plan. This would allow easyJet to replace older aircraft
with additional options to deliver future growth.

 

Outlook

-      Q4 RPS up around +10% YoY

-      H2 headline cost per seat ex fuel broadly flat year on year

-      Q4 capacity c.29m

-      Holidays to deliver medium term target of £100m+ PBT

-      Booking momentum continues into Q1 FY24

 

Johan Lundgren, CEO of easyJet, said:

"Our Q3 performance has been underpinned by strong passenger demand for
easyJet's network and services. We continue to provide great value to
customers with around half of easyJet's fares currently on sale still under
£50.

 

"We are absolutely focused on mitigating the impact of the challenging
external environment on our customers and flying them on their well-earned
holidays.

 

"We continue to see good momentum as we move into Q4 where we will be
operating over 160,000 flights and expect to deliver another record PBT
performance. This winter we are adding more than 15% capacity and we see
bookings ahead of the same period last year."

 

Capacity

During Q3 easyJet flew 26.2 million seats, a 5% increase on the same period
last year when easyJet flew 24.9 million seats. Load factor was 90% (Q3 FY22:
88%) with load factor increasing to 91% in June.

 

Passenger(1) numbers in the quarter increased to 23.5 million (Q3 FY22: 22.0
million).

 

                            April   May     June    Q3       Q3

                            2023    2023    2023    FY23     FY22
 Number of flights          45,740  50,519  50,557  146,816  140,045
 Peak operating aircraft    276     292     310     310      305

 Passengers (1) (thousand)  7,295   7,985   8,174   23,454   22,001

 Seats flown (thousand)     8,166   9,006   9,005   26,177   24,936

 Load factor (2)            89%     89%     91%     90%      88%

 

Revenue, Cost and Liquidity

Revenue continued to benefit from strong demand for easyJet's leading network,
the continued outperformance of ancillary products and easyJet holidays.
Airline headline cost per seat ex fuel reduced 2% in the quarter due to no wet
lease aircraft being within the fleet and a much improved operational
performance compared to the same period last year.

 

Financing costs benefitted from the strengthening of sterling versus the USD
over the quarter which has driven a non-operating, non-cash FX gain of £10
million (Q3'22: £36 million loss) from balance sheet revaluations.

 

During the quarter, easyJet continued to deleverage through paying down $950
million of debt under the UKEF. This follows the 500 million Eurobond which
was repaid in February 2023. The UKEF has been replaced by a new undrawn
five-year sustainability linked term loan facility of $1.75 billion,
extending easyJet's debt maturity profile, whilst maintaining available
liquidity and reducing the group net financing costs.

 

                                                              Q3'23    Q3'22    Variance
 Passenger revenue (£'m)                                      1,501    1,152    30%
 Airline ancillary revenue (£'m)                              622      486      28%
 Holidays revenue(3) (£'m)                                    237      117      104%
 Group revenue (£'m)                                          2,360    1,755    34%
 Fuel costs (£'m)                                             (585)    (417)    (40)%
 Airline headline EBITDAR costs (£'m)                         (1,210)  (1,135)  (7)%
 Holidays EBITDAR costs(3) (£'m)                              (193)    (100)    (93)%
 Group headline EBITDAR costs (£'m)                           (1,988)  (1,652)  (20)%
 Group headline EBITDAR (£'m)                                 372      103      261%
 Group depreciation & amortisation (£'m)                      (171)    (150)    (14)%
 Group EBIT (£'m)                                             201      (47)     528%
 Financing costs excluding balance sheet revaluations (£'m)   (8)      (31)     74%
 Balance sheet revaluations (£'m)                             10       (36)     128%
 Group headline PBT/(LBT) (£'m)                               203      (114)    278%

 Airline passenger revenue per seat (£)                       57.33    46.20    24%
 Airline ancillary revenue per seat (£)                       23.75    19.47    22%
 Total airline revenue per seat (£)                           81.08    65.67    23%

 Airline headline cost per seat ex fuel (£)                   (52.86)  (54.19)  2%
 Airline fuel cost per seat (£)                               (22.35)  (16.71)  (34)%
 Airline headline total cost per seat (£)                     (75.21)  (70.90)  (6)%

 Cash and money market deposits (£'bn)                        3.1      3.9      (21)%
 Net cash/(debt) (£'bn)                                       0.3      (0.2)    250%

 

Fuel & FX Hedging

 Jet Fuel                         H2'23  H1'24  H2'24    USD                                 H2'23  H1'24  H2'24
 Hedged position                  77%    58%    29%      Hedged position                     83%    65%    34%
 Average hedged rate ($/MT)       877    858    804      Average hedged rate (USD/GBP)       1.23   1.22   1.24
 Current spot ($/MT) at 20.07.23  c.820                  Current spot (USD/GBP) at 20.07.23  c.1.29

easyJet fuel hedging is via a mix of swaps and options

 

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

Olivia Peters                     Teneo
 
              +44 (0) 20 7353 4200

Harry Cameron               Teneo
 
              +44 (0) 20 7353 4200

 

A copy of this Trading Statement is available at
http://corporate.easyjet.com/investors
(http://corporate.easyjet.com/investors)

 

 

1) Represents the number of earned seats flown. Earned seats include seats
which 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.

2) 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.

3) Holidays numbers include elimination of intercompany airline transactions

 

This announcement may contain statements which constitute 'forward-looking
statements'. Although easyJet believes that the expectations reflected in
these forward-looking statements are reasonable, it can give no assurance that
these expectations will prove to have been correct. Because these statements
involve risks and uncertainties, actual results may differ materially from
those expressed or implied by these forward-looking statements.

 

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