Annual Report and Accounts 2010 Annual Report and Accounts 2010 Accounts and Report Annual Annual Report and Accounts 2010 Welcome Aboard!
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Annual report and accounts 2010 Annual report and accounts 2010 Annual report and accounts 2010 Welcome aboard! Navigating your way around this report... 01 Overview 54 Accounts 2010 Business highlights 01 Independent auditors’ report to the members easyJet at a glance 02 of easyJet plc 54 15 years of continued success 04 Consolidated income statement 55 Chairman’s statement 06 Consolidated statement of comprehensive income 56 Consolidated statement of financial position 57 Consolidated statement of changes in equity 58 Consolidated statement of cash flows 59 Notes to the accounts 60 Company statement of financial position 90 Company statement of changes in equity 91 Company statement of cash flows 92 Notes to the Company accounts 93 08 Business review 95 Other information Chief Executive’s statement 08 Five year summary 95 Strategy and KPIs 14 Glossary 96 Financial review 16 Corporate responsibility 28 34 Governance Directors’ report easyJet plc is incorporated as a public limited company and is registered in Directors’ profiles 34 England with the registered number 3959649. easyJet plc’s registered office Corporate governance 36 is Hangar 89, London Luton Airport, Bedfordshire LU2 9PF. The Directors Shareholder information 40 present the Annual report and accounts for the year ended 30 September Report on Directors’ remuneration 41 2010. References to ‘easyJet’, the ‘Group’, the ‘Company’, ‘we’, or ‘our’ are to Statement of Directors’ responsibilities 53 easyJet plc or to easyJet plc and its subsidiary companies where appropriate. Pages 01 to 53, inclusive, of this Annual report comprise the Directors’ report that has been drawn up and presented in accordance with English company law and the liabilities of the Directors in connection with that report shall be subject to the limitations and restrictions provided by such law. easyJet plc Overview Annual report and accounts 2010 01 O v e r v i e w 2010 Business highlights Business review Business Results at a glance 2010 2009 Change Total revenue (£ million) 2,973.1 2,666.8 +11.5% Profit before tax – reported (£ million) 154.0 54.7 +181.5% Profit before tax – underlying1 (£ million) 188.3 43.7 +330.9% Pre tax margin – underlying1 (%) 6.3 1.6 +4.7ppt Return on equity (%) 8.6 5.5 +3.1ppt Return on capital employed2 (%) 8.8 4.0 +4.8ppt Governance Basic EPS – (pence) 28.4p 16.9p +68.0% Financial highlights Continued growth in total revenue per seat up 5.1% (3.3% at constant currency), following strong growth in the prior year (up 4.1% at constant currency) driven by the strength of the easyJet network and good underlying consumer demand Passenger numbers up 7.9% to 48.8 million and load factor increased by 1.5ppt to 87.0% Reported profit before tax of £154.0 million delivered ahead of our original guidance, this includes £27.3 million of costs resulting from volcanic ash disruption. Total impact of the volcano, including lost contribution, estimated to be £57 million Accounts Improvement in margins as underlying profit before tax1 increased by £144.6 million to £188.3 million, primarily driven by a unit fuel cost reduction equivalent to £122.7 million Disruption costs have had a significant impacton the financial results with a £97.9 million increase versus the prior year. £27.3 million volcano related, £20.8 million snow related and £49.8 million of costs (wet leasing and other costs, mainly EU2004/261 related), as a result of Air Traffic Control (ATC) strike action and easyJet’s operational difficulties over the summer Total underlying cost per seat1 (excluding fuel and currency movement) up 5.2% mainly driven by disruption costs. Excluding the impact of additional disruption costs, underlying cost per seat1 (excluding fuel and currency movement) rose 2.2% Continued strong cash generation, net cash flow from operations improved by £228.9 million to £363.4 million. Gearing fell from 37.6% to 31.8% Other information Return on equity increased to 8.6% from 5.5% as easyJet delivered both capacity growth and margin improvement Note 1: Underlying measures exclude £27.3 million of cost relating to the volcanic ash cloud and £7.0 million loss on disposal of A321 aircraft in 2010 and £11.0 million profit on disposal of A321 aircraft in 2009. Note 2: Return on capital employed is calculated by dividing normalised operating profit after tax by average net debt plus average shareholders’ equity. easyJet plc 02 Annual report and accounts 2010 at a glance In 2010 we continued Over 56 million seats flown Consistently high load ppt Seats flown million +6.0% Load factor % +1.5 to expand our presence 2010 56.0 2010 87.0 across Europe as we 2009 52.8 2009 85.5 2008 51.9 2008 84.1 realise our vision to 2007 44.5 2007 83.7 ‘Turn Europe Orange’, 2006 38.9 2006 84.8 building on our strong positions at major airports Present on the most top 100 European routes 49 top and adding two new Presence on top 100 routes routes countries to our network Vueling 10 We carried almost 49 million Norwegian 11 passengers, of which 53% at the end of the year. SAS 13 originated from outside of the UK. Air Berlin 15 easyJet successfully Alitalia 20 We now have 509 routes serving grew its seats flown Air France-KLM 22 125 airports in 29 countries. Lufthansa-Swiss 41 by 6.0%, improving its Ryanair 42 196 aircraft situated in 19 bases. load factor and flying BA/Iberia 43 easyJet 49 48.8 million passengers. Focused on European Increasing easyJet’s short-haul aviation +14.7% geographic diversity Non-UK passengers million Passengers by country 2010 25.7 ■ UK 47% 2009 22.4 ■ Italy 8% 2008 19.7 ■ France 12% 2007 15.7 ■ Spain 13% ■ Switzerland 7% 2006 12.9 ■ Other Europe 13% easyJet plc Overview Annual report and accounts 2010 03 125 29 Airports Countries Business review Business – Aberdeen – Brussels – Grenoble – Madrid – Porto – Agadir – Bucharest – Hamburg – Mahon – Prague – Ajaccio – Budapest – Helsinki – Malaga – Pristina – Alicante – Cagliari - Heraklion – Malta – Rhodes – Almeria – Casablanca – Hurghada – Manchester – Rome Ciampino – Amsterdam – Catania – Ibiza – Marrakech – Rome Fiumicino – Antalya – Chania – Innsbruck – Marseilles – Rovaniemi – Athens – Cologne – Inverness – Mykonos – Salzburg – Barcelona – Copenhagen – Isle of Man – Milan Linate – Santorini – Bari – Corfu – Istanbul – Milan Malpensa – Sharm El Sheikh – Basel – Dalaman – Ivalo – Montpellier – Sofia – Bastia – Doncaster – Jersey – Munich – Split – Belfast City – Dortmund – Kos – Murcia – Stockholm – Belfast – Dubrovnik – Krakow – Nantes – Tallin – Berlin Schöenefeld – Dusseldorf – La Rochelle – Naples – Tangier – Biarritz – Edinburgh – Lamezia-Terme – Newcastle – Tel Aviv – Bilbao – Faro – Lanzarote – Nice – Tenerife – Birmingham – Fez – Larnaca – Olbia – Thessoloniki Governance – Bodrum – Fuerteventura – Lisbon – Oviedo/Asturias – Toulouse – Bordeaux – Funchal – Liverpool – Palermo – Valencia – Bournemouth – Geneva – Ljubljana – Palma – Venice – Bréscia – Gibraltar – London Gatwick – Paphos – Vienna – Brest – Glasgow – London Luton – Paris Charles de Gaulle – Zagreb – Br´indisi – Gothenburg – London Stansted – Paris Orly – Zakynthos – Bristol – Gran Canaria – Lyon – Pisa – Zurich Accounts Other information easyJet plc 04 Annual report and accounts 2010 15 years of continued success 1995 1996 1997 1998 easyJet founded by Sir Stelios easyJet takes delivery of its first easyJet launches easyJet.com to easyJet buys 40% of Swiss charter Haji-Ioannou. Inaugural flights go from wholly-owned aircraft and goes provide information on the airline. operation, TEA Basel AG, later Luton to Edinburgh and Glasgow. international with flights to Four years later the airline sells its renamed ‘easyJet Switzerland’. Amsterdam from Luton. 10 millionth online seat. 2003 2004 2005 2006 The first Airbus A319 goes into service The airline becomes the first to take easyJet takes delivery of its 100th Speedy Boarding is introduced, giving in Geneva, 12 months after the deal to advantage of the newly-enlarged aircraft. It’s a monumental change from passengers greater choice over their purchase up to 240 aircraft was European Union by starting flights to the two leased aircraft it started with seating arrangements. announced. Hungary and Slovenia. 10 years previously. easyJet plc Overview Annual report and accounts 2010 05 Business review Business Governance 1999 2000 2001 2002 The first series of ‘Airline’, which easyJet floats on the London Stock easyJet makes Gatwick its fifth base easyJet purchases Stansted-based follows the lives of easyJet’s staff and Exchange at an offer price of 310p, and becomes the second largest low-cost airline Go (which had passengers, is shown on ITV, regularly valuing the Company at £777m. scheduled airline at the airport. originally been set up by British attracting over 10 million viewers. Shortly after, easyJet joins the FTSE Airways) to create Europe’s number 250 list of companies. one air transport network. Accounts 2007 2008 2009 2010 easyJet moved to its new headquarters easyJet completes the acquisition of easyJet truly becomes a pan European easyJet reaffirms its strategy of in an aircraft hangar at Luton airport. GB Airways, a London Gatwick-based airline, operating over 400 routes with Turning Europe Orange. airline operating to destinations across over 175 aircraft in 27 countries. Southern Europe and North Africa. For the first time, over 50% of easyJet’s passengers originate from outside the UK. Other information easyJet plc 06 Annual report and accounts 2010 Chairman’s statement easyJet’s continued strong performance in the face of major disruption is a tribute to the professionalism and commitment of all of easyJet’s people and the Board and I would like to thank them for their efforts which are very much appreciated. Sir Michael Rake Non Executive Chairman In the past year, easyJet delivered a considerably improved financial result as pre-tax profit increased by £99.3 million to £154.0 million despite some significant challenges. External factors such as the disruption to European airspace due to the eruption of the Eyjafjalla volcano, unprecedented levels of snow disruption and high levels of ATC industrial action have combined with some operational problems to make this past year an exceptionally tough one.