Source : EuropeanMarkets
Commenting on the results, Carolyn McCall, easyJet Chief Executive said:
“Our outlook for the longer term is positive. We expect demand in our markets to be sustained and for easyJet to continue to be a winner in its markets. We will see passenger growth of 7% a year, sustaining margins through rigorous cost control and the benefit of fleet up-gauging, resulting in positive profit momentum. We remain totally focused on our network advantage, digital leadership and offering our customers great low fares and service. We continue to invest in profitable growth, ensuring our digital advantage and giving our customer good value fares.”
Overview
This has been another year of record profits and delivering our strategy for easyJet. We carried an additional 4 million passengers to reach 68.6 million passengers; we grew revenue to £4,686 million; and we increased profit before tax for the fifth successive year to a record £686 million. Return on capital employed increased to 22.2%, another record for the Company.
Our markets are strong, with favourable economic and consumer trends. Our core leisure customer is part of a market that is growing strongly every year as people take more holidays and city breaks, complemented by a business travel market that prizes both flexibility and value.
easyJet has positioned its network and product to capitalise on these trends and has delivered again during the year. Our business model and strategy are continuing to drive profitable growth and increasing annual returns to shareholders.
In particular:
. Revenue increased by 3.5% to £4,686 million, with passenger volumes increasing by 6% and revenue per seat by 1.5% on a constant currency basis to £64.28, offset by currency headwinds.
. Our passengers continue to be attracted by our model of having convenient airports and flights, available at good value. We finished the year strongly with record load factors in both July and August driving revenue per seat up by 3.2% in constant currency in the fourth quarter.
. Load factor for the full year grew by 0.9 percentage points to 91.5% demonstrating strong demand in a competitive environment.
. We increased yield and revenue throughout the year with our market-leading digital platform driving and fulfilling demand, supported by our best-in-class Revenue Management System.
. Our confidence both in the demand environment and our structural growth opportunities within our markets has led us to secure an additional 36 aircraft between 2018 and 2021, comprising 30 Next Generation A320s and 6 Current Generation A320s, all in the 186 seat configuration. This will bring flexibility and secure further cost savings of £27 million.
. Cost per seat decreased by 3.4%, with benefits from both fuel and currency. Cost per seat at constant currency excluding fuel increased by 3.6%. We have experienced cost pressures that include regulated airport price increases, increased de-icing costs and significant disruption costs. We have mitigated this through £46 million of sustainable savings and we have a pipeline of structural cost improvement to deliver future savings.
. Profit before tax grew by £105 million to a record £686 million and we increased the profit before tax margin to 14.6% from 12.8%.
. Return on capital employed1 increased by 1.7 percentage points to a record 22.2% (2014 20.5%), with some benefit from our hedge position, maintaining our strong market returns. We continue to drive capital efficiency with rigour and discipline, reallocating aircraft around the network to maximise return on capital employed.
. We generated over £895 million of operating cash flow, reducing our gearing to 14%, thus further strengthening our balance sheet.
. Reflecting the strong financial performance during 2015, the Board has recommended a dividend of 55.2 pence per share, an increase of 21.6% from the prior year, in line with its policy of paying 40% of annual profit after tax to shareholders.
Outlook
fuel bill by $3.5 million. before tax by £1.5 million. before tax by £0.7 million.
We remain confident in our ability to deliver growth and returns for shareholders as we continue to execute our strategy. For the year to 30 September 2016 we plan to increase capacity by c.7% and by c.8% in the first half of the year as we invest in profitable growth. We will continue to expand in our new bases of Hamburg, Amsterdam and Oporto as well as consolidating our strong market positions in the UK, Switzerland, France and Italy. Demand remains resilient and with forward bookings in line with last year, we view the future with confidence.
Based on current market fuel prices we expect the unit fuel bill to decline by between £140 million and £160 million during the year to 30 September 2016. As you would expect, passengers will continue to benefit from the lower fuel cost and therefore we expect a slight decline in revenue per seat at constant currency during the first half of the year.
We expect a slight decline in total cost per seat at constant currency including fuel for the full year of approximately 1%, based on jet fuel prices within a range of $450 metric tonne to $550 metric tonne. Cost per seat excluding fuel and currency is expected to increase by approximately 2% for the full year. This will be weighted towards the first six months to 31 March 2016, primarily reflecting further increases in regulated airports costs and navigation charges, disruption costs and an expected cold winter.
Exchange rate movements are likely to have an adverse impact of approximately £15 million in the first half year compared to the six months to 31 March 2015 and £40 million for the 12 months to 30 September 2016 compared to the 12 months to 30 September 2015. Consequently market expectations are in line within the Board’s expectations for the full year.
We continue to see significant longer term opportunities to grow revenue, profit and shareholder returns. We expect market demand to remain strong and easyJet’s unique model and strategy are well-positioned to capture significant value from favourable trends in both leisure and business markets.
Source : easyJet plc, Full Year Investor & Analyst Presentation, Tuesday 17 November 2015
“Our outlook for the longer term is positive. We expect demand in our markets to be sustained and for easyJet to continue to be a winner in its markets. We will see passenger growth of 7% a year, sustaining margins through rigorous cost control and the benefit of fleet up-gauging, resulting in positive profit momentum. We remain totally focused on our network advantage, digital leadership and offering our customers great low fares and service. We continue to invest in profitable growth, ensuring our digital advantage and giving our customer good value fares.”
Overview
This has been another year of record profits and delivering our strategy for easyJet. We carried an additional 4 million passengers to reach 68.6 million passengers; we grew revenue to £4,686 million; and we increased profit before tax for the fifth successive year to a record £686 million. Return on capital employed increased to 22.2%, another record for the Company.
Our markets are strong, with favourable economic and consumer trends. Our core leisure customer is part of a market that is growing strongly every year as people take more holidays and city breaks, complemented by a business travel market that prizes both flexibility and value.
easyJet has positioned its network and product to capitalise on these trends and has delivered again during the year. Our business model and strategy are continuing to drive profitable growth and increasing annual returns to shareholders.
In particular:
. Revenue increased by 3.5% to £4,686 million, with passenger volumes increasing by 6% and revenue per seat by 1.5% on a constant currency basis to £64.28, offset by currency headwinds.
. Our passengers continue to be attracted by our model of having convenient airports and flights, available at good value. We finished the year strongly with record load factors in both July and August driving revenue per seat up by 3.2% in constant currency in the fourth quarter.
. Load factor for the full year grew by 0.9 percentage points to 91.5% demonstrating strong demand in a competitive environment.
. We increased yield and revenue throughout the year with our market-leading digital platform driving and fulfilling demand, supported by our best-in-class Revenue Management System.
. Our confidence both in the demand environment and our structural growth opportunities within our markets has led us to secure an additional 36 aircraft between 2018 and 2021, comprising 30 Next Generation A320s and 6 Current Generation A320s, all in the 186 seat configuration. This will bring flexibility and secure further cost savings of £27 million.
. Cost per seat decreased by 3.4%, with benefits from both fuel and currency. Cost per seat at constant currency excluding fuel increased by 3.6%. We have experienced cost pressures that include regulated airport price increases, increased de-icing costs and significant disruption costs. We have mitigated this through £46 million of sustainable savings and we have a pipeline of structural cost improvement to deliver future savings.
. Profit before tax grew by £105 million to a record £686 million and we increased the profit before tax margin to 14.6% from 12.8%.
. Return on capital employed1 increased by 1.7 percentage points to a record 22.2% (2014 20.5%), with some benefit from our hedge position, maintaining our strong market returns. We continue to drive capital efficiency with rigour and discipline, reallocating aircraft around the network to maximise return on capital employed.
. We generated over £895 million of operating cash flow, reducing our gearing to 14%, thus further strengthening our balance sheet.
. Reflecting the strong financial performance during 2015, the Board has recommended a dividend of 55.2 pence per share, an increase of 21.6% from the prior year, in line with its policy of paying 40% of annual profit after tax to shareholders.
Outlook
fuel bill by $3.5 million. before tax by £1.5 million. before tax by £0.7 million.
We remain confident in our ability to deliver growth and returns for shareholders as we continue to execute our strategy. For the year to 30 September 2016 we plan to increase capacity by c.7% and by c.8% in the first half of the year as we invest in profitable growth. We will continue to expand in our new bases of Hamburg, Amsterdam and Oporto as well as consolidating our strong market positions in the UK, Switzerland, France and Italy. Demand remains resilient and with forward bookings in line with last year, we view the future with confidence.
Based on current market fuel prices we expect the unit fuel bill to decline by between £140 million and £160 million during the year to 30 September 2016. As you would expect, passengers will continue to benefit from the lower fuel cost and therefore we expect a slight decline in revenue per seat at constant currency during the first half of the year.
We expect a slight decline in total cost per seat at constant currency including fuel for the full year of approximately 1%, based on jet fuel prices within a range of $450 metric tonne to $550 metric tonne. Cost per seat excluding fuel and currency is expected to increase by approximately 2% for the full year. This will be weighted towards the first six months to 31 March 2016, primarily reflecting further increases in regulated airports costs and navigation charges, disruption costs and an expected cold winter.
Exchange rate movements are likely to have an adverse impact of approximately £15 million in the first half year compared to the six months to 31 March 2015 and £40 million for the 12 months to 30 September 2016 compared to the 12 months to 30 September 2015. Consequently market expectations are in line within the Board’s expectations for the full year.
We continue to see significant longer term opportunities to grow revenue, profit and shareholder returns. We expect market demand to remain strong and easyJet’s unique model and strategy are well-positioned to capture significant value from favourable trends in both leisure and business markets.
