Breaking News

Samsung Electronics Reports $6.03 Billion Second-Quarter Profit, Missing Estimates
Tweet TWEET

easyJet PLC EZJ Final Results

  easyJet PLC (EZJ) - Final Results

RNS Number : 5084R
easyJet PLC
20 November 2012


                                      

                                 20 November
2012
                                 easyJet plc

                 Results for the year ended 30 September 2012

                                      

  Strategy continues to deliver record profits, growth in profit margins and
                      improved returns for shareholders

                             Results at a glance

^                                                         2012  2011  Change
Total revenue (£ million)                                  3,854 3,452  +11.6%
Profit before tax (£ million)                                317   248  +27.9%
Pre-tax margin (%)                                          8.2%  7.2% +1.0ppt
Basic earnings per share (pence)                            62.5  52.5  +19.0%
Proposed dividend - ordinary (pence per share)              21.5  10.5 +104.8%
Return on Capital Employed (%) - excluding operating       14.5% 12.7% +1.8ppt
leases adjustment
Return on Capital Employed (%) - including operating       11.3%  9.8% +1.5ppt
leases adjustment
Return on equity                                           14.6% 14.0% +0.6ppt



· easyJet has delivered improved returns for shareholders and growth in a
challenging economic environment. Profit before tax was up by 27.9% to a
record £317 million and pre-tax profit margins grew by 1 percentage point to
8.2% despite a £182 million increase in unit fuel costs. Return on Capital
Employed excluding operating lease adjustment improved by 1.8 percentage
points to 14.5% (while Return on Capital Employed including operating lease
adjustment improved by 1.5 percentage points to 11.3%.) 

· Total revenue per seat grew by 5.9% (7.5% at constant currency) to
£58.51 driven by: improved load factors; the annualisation of changes to fees
and charges made in 2011; the careful targeting of capacity to markets with
the strongest returns potential; improvements to easyJet.com; the success of
the 'Europe by easyJet' campaign and from capacity constraint in the market.

· Seats flown grew by 5.5% to 65.9 million, load factors increased by 1.4
percentage points to 88.7% and passenger numbers rose 7.1% to 58.4 million.

· Cost per seat excluding fuel fell by 1% for the full year (and grew by
1.8% at constant currency). Unit cost increases were driven by increased
charges at regulated airports especially in Spain and Italy and higher load
factors. Cost pressures were partially offset by shorter average sector
lengths, the easyJet Lean programme delivering significant savings in ground
handling and non-regulated airport charges, by the increased proportion of
larger A320 aircraft in the fleet and by the exceptionally low levels of
disruption in comparison to previous years.

· easyJet generated operating cash (excluding dividend payments) of  £457 
million in the year, an increase of 7.8% compared to the prior year.

· In light of the continued  strong financial performance of easyJet  and 
the confidence in easyJet's position within European short-haul aviation,  the 
Board has decided  to amend  the dividend  policy from  this year  to pay  out 
one-third of  profit  after  tax  each year,  up  from  the  one-fifth  payout 
introduced last  year.  As a  result  the recommended  ordinary  dividend  is 
21.5pence per share or £85 million.

· Earnings per share grew 19.0% to 62.5 pence per share.



Commenting on the results, Carolyn McCall easyJet Chief Executive said:

"These results demonstrate that easyJet is a structural winner in the European
short-haul market against both legacy  and low cost competition. The  strength 
of easyJet's  business model  and  strategy coupled  with  the hard  work  and 
dedication of  the easyJet  team has  delivered record  profits as  well as  a 
significant increase in returns for shareholders during the year.

As evidence  of  its  confidence  in easyJet's  current  position  and  future 
prospects the Board proposes to increase the dividend from 10.5p to 21.5p  for 
the year ended  September 2012 which  will see our  shareholders benefit  from 
easyJet's success with £85m of dividends.

"Whilst there is  always the  potential for unexpected  events to  temporarily 
impact financial results the Board of  easyJet is confident that its  business 
model, strategy and  people will  consistently continue  to generate  superior 
returns and growth for shareholders."



               For further details please contact easyJet plc:

Institutional investors and sale side analysts:

Rachel Kentleton Investor
Relations +44 (0) 7961 754 468

Tom Oliver Investor
Relations +44 (0) 7950 996 262



Media:

Paul Moore Corporate
Communications +44 (0) 7860 794 444

Edward Simpkins RLM
Finsbury +44 (0) 207 251
3801


+44 (0) 7947 740 551



There will be an analyst presentation at 9:30 am on 20 November 2012 at
Nomura, One Angel Lane, London, EC4R 3AB.



A live webcast of the presentation will be available at www.easyJet.com

Audio Details

· UK & International Number  +44 (0) 203 140 0722

· US Number  +1 718 705 7514

Playback Details

· UK Playback Number  +44 (0) 203 140 0698

· US Playback Number  +1 877 846 3918

· Playback Pin Code 387362#

The replay service will be available up until 27 November 2012





                      A) PERFORMANCE DURING THE YEAR

                            Financial performance

easyJet delivered record profit before tax  of £317 million up by £69  million 
from 2011. The  result was  delivered despite  headwinds from  a £182  million 
increase in  unit fuel  costs  and ongoing  consumer  pressure from  the  weak 
European economy combined with  a £50 million increase  in Air Passenger  Duty 
charges in UK, France and Germany. Profit per seat (including fuel) rose by 84
pence to £4.81. This performance was driven by:

· 5.5% capacity  growth and a  1.4 percentage point  improvement in  load 
factor to 88.7%. Passenger numbers rose 7.1% to 58.4 million.

· Total revenue per seat grew by 5.9% (7.5% at constant currency) to
£58.51, driven by improved load factors; the annualisation of changes to fees
and charges made in 2011; the careful targeting of capacity to markets with
the strongest returns potential; improvements to easyJet.com; the success of
the 'Europe by easyJet' campaign and from competitor capacity constraint in
the market.

· Cost per seat excluding fuel fell by 1% for the full year (and grew by
1.8% at constant currency). Unit cost increases were driven by increased
charges at regulated airports especially in Spain and Italy and higher load
factors. Cost pressures were partially offset by shorter average sector
lengths, the easyJet Lean programme delivering significant savings in ground
handling and non-regulated airport charges, by the increased proportion of
larger A320 aircraft in the fleet and by the exceptionally low levels of
disruption in comparison to previous years.

easyJet generated operating cash of £457 million in the year. In light of  the 
continued strong financial performance and cash generation of easyJet and  the 
robustness of the easyJet balance sheet,  the Board has decided to reduce  the 
level of dividend cover  from five times to  three times and consequently  the 
Board has recommended paying an ordinary dividend of 21.5 pence a share or £85
million. 

                          Return on Capital Employed

easyJet is committed to driving improved returns and growth for shareholders
and so uses a Return on Capital Employed (ROCE) metric to enable transparent
and consistent communication of this goal for shareholders.

 easyJet's returns have improved year on year and its ROCE continues to be in
                   excess of the Company's cost of capital.



                                              2012  2011  Change
ROCE - excluding operating leases adjustment 14.5% 12.7% +1.8ppt
ROCE - including operating leases adjustment 11.3%  9.8% +1.5ppt

   When easyJet introduced ROCE as a key performance indicator in 2010, the
decision was taken not to adjust the calculation for leases in the expectation
  that the International Accounting Standards Board (IASB) would shortly be
  concluding a review of the most appropriate accounting treatment of lease
                                  financing.

Over the last year it has become clear that the process is far from complete
and the accounting position is not expected to change before 2016 at the
earliest. As a consequence of the delay and following shareholder
consultation, easyJet has decided to amend its ROCE methodology to reflect the
impact on returns of aircraft held under operating leases by capitalising them
at seven times the annual lease rental in line with market practice.

                              Robust operations

easyJet's strong operational  and cost  performance is  built around  ensuring 
aircraft depart  and  arrive  on  time. This  both  minimises  the  costs  of 
disruption, and improves customer satisfaction  and repeat purchase, which  in 
turn increases revenue. easyJet experienced considerably less disruption  from 
weather and industrial  action than in  previous years. In  total, fewer  than 
1,000 flights were cancelled in the year to 30 September 2012 compared to over
4,000 flights in the year to 30 September 2011.

Although predominantly  driven  by  external factors,  the  reduced  level  of 
cancellations and delays is  also as a result  of the investment in  easyJet's 
operations control centre  (OCC). Initiatives launched  to drive  operational 
performance and minimise  disruption included  the easyJet  turn project,  the 
ongoing twice  daily  operational  calls and  temporarily  basing  MET  Office 
forecasters in easyJet's head office during the course of the Olympics.

On-time performance (OTP) improved again in the year with a 9 percentage point
improvement across the network and an  increase of 3 percentage points in  the 
fourth  quarter^(1).  easyJet's   OTP  is  now   best  in-class  within   the 
industry^(2).



OTP % arrivals within 15 minutes  Q1  Q2  Q3  Q4 Full year
2011                             65% 81% 84% 85%       79%
2012                             88% 90% 87% 88%       88%

The focus of  the operations  team in  the coming  financial year  will be  on 
aircraft turn time during the roll-out of allocated seating whilst  continuing 
to control cost through standardisation and simplification.

Customer satisfaction

The strong operational performance was  reflected in improvements in  customer 
satisfaction, with a  3 percentage point  year-on-year improvement to  82%^(3) 
and a two percentage points improvement  in the likelihood to recommend  score 
to 84%.

easyJet closely monitors customer satisfaction and strives to maintain or grow
its customer satisfaction scores through making travel easy and affordable for
its customers. easyJet  made further improvements  to its end-to-end  customer 
experience such  as the  decision  to roll-out  allocated seating  across  the 
network following  its successful  trial this  summer. The  decision to  trial 
allocated seating was  prompted by  scores for the  boarding experience  which 
were lower than the other categories monitored.



Country review



UK



easyJet is the largest carrier in the UK with a market share of around 20%^(4)
in the total intra-European market and around 35% share in easyJet's  markets. 
easyJet has further increased its  total UK market share  by around 1% in  the 
last year, largely due to other carriers reducing capacity. easyJet saw growth
at Gatwick  and in  its new  base at  Southend, while  bases in  Stansted  and 
Liverpool were  reduced. easyJet  is the  number one  carrier in  nine out  of 
eleven UK easyJet bases with the total number of UK based aircraft at 122.



Switzerland



Switzerland continues to  be a focus  market for easyJet.  With 7.2%  capacity 
growth, easyJet has consolidated its  leadership position in both Geneva  with 
around 37% market  share and  Basel with  43% market  share^(4). The  capacity 
increase has enabled  easyJet to launch  7 new routes  and add frequencies  on 
core routes such  as Berlin,  Barcelona and  London. easyJet  now operates  19 
aircraft out of its Swiss bases.



France



easyJet grew capacity in France by 8.2% in the year and is the second  largest 
carrier in France  with over  12% market share^(4)  and bases  24 aircraft  in 
France. A key  part of  easyJet's strategy in  France is  to address  regional 
demand  for  both  domestic  and  international  flights  and  to  become  the 
alternative carrier to Air France. Capacity  growth was focused on the  French 
regions driven by 11 new routes from its new bases in Nice and Toulouse  which 
opened in March. This  brings the total number  of routes touching these  two 
bases to 41.

Brand consideration^(5) and customer satisfaction scores have increased in the
year. Since April  2012, easyJet.com is  the most visited  airline website  in 
France.



Italy



easyJet is the third largest carrier in Italy, with a market share of 11%^(4).
easyJet has 23 aircraft based in Italy  with a number 1 share^(4) in its  main 
Milan Malpensa  base and  a  strong presence  in  Rome Fiumicino,  Venice  and 
Naples.

The easyJet brand is increasing its profile in Italy with the recent launch of
easyJet's first television advertising campaign. Brand consideration ^(5)  has 
increased by 11 percentage points up to 46% thanks to more targeted  marketing 
activities in the key catchment areas.



Germany



In a  highly  regional market  easyJet's  focus  in Germany  has  remained  on 
building a strategic European point-to-point  network in Berlin (now with  50% 
market share  in Schönefeld^(4)),  easyJet  has continued  to build  both  its 
leisure  and  business  product  out   of  Berlin  whilst  rationalising   the 
non-essential network in Dortmund to improve profitability.



Spain



The outbound Spanish  market remains one  of the most  competitive in  Europe, 
with the existing overcapacity leading to  lower yields than in other  easyJet 
markets. Lower  yields and  high and  increasing airport  charges led  to  the 
decision to cease  having crew and  aircraft based in  Madrid from 1  December 
2012. The base closure is on plan and 87% of the 300+ staff currently based in
Madrid have accepted the offer to relocate to another easyJet operational base
in Europe.

easyJet remains committed to Spain, including Madrid, and will continue to fly
to and from Spain out of its  other bases. Although capacity will be  reduced 
by around 9%, easyJet expects to carry over 12 million passengers to and  from 
Spain next year.



Portugal



easyJet is the third largest carrier in Portugal with a market share of around
13%^(4) and  is also  the second  carrier in  Lisbon Portela  airport,  having 
opened a base there in April 2012.  The base launched with two aircraft and  a 
third one started there in November 2012.



                            B) MARKET OVERVIEW

                            Competitive landscape

There are 3,000 short-haul aircraft in operation in Europe and around half of
overall capacity is flown by the top five carriers: Ryanair, IAG, Lufthansa,
AF-KLM and easyJet. In recent years, the sustained high price of aviation
fuel combined with restricted European economic growth and consumer spending,
rising aviation taxes and scarcity of financing has led to a difficult
operating environment for all airlines.

In the past year, several carriers have exited and other carriers have changed
ownership or required refinancing; the charter operators are seeing their
market share and profitability diminishing further; and the losses incurred
from legacy operators' short-haul operations are well publicised.
Consequently, overall capacity in the European short-haul aviation market
remained flat, and declined slightly on easyJet's routes^(4).

Overall demand for European point-to-point leisure and business travel in the
medium term is expected to grow slightly ahead of GDP and this, combined with
the capacity restraint in the European aviation market, means that there are
structural growth opportunities for carriers such as easyJet with robust
business models and strong competitive positions.

                             Competitive position

easyJet is one of the very few pan-European low-cost carriers in the European
short-haul passenger aviation market and is focused on making travel easy and
   affordable for its customers. easyJet is the fourth largest short-haul
carrier in Europe with a market share of 8%^(4) ^and derives its competitive
                  advantages from the following attributes:

· leading short-haul network with the highest number of market pairs
within Europe's top 100 market pairs and strong market shares in valuable
markets such as London, Paris, Milan, Amsterdam and Geneva;

· low cost, efficient and flexible business model derived from scale and
cost advantage, high asset utilisation, a young efficient fleet with low cost
ownership, a leading online and digital offering and industry-leading load
factors; and

· efficient and robust capital structure.



Regulatory environment

The regulatory environment continues to have a significant impact on easyJet
and over the last year monopoly infrastructure providers have pushed through
unreasonable increases in charges.

However, there are EU proposals on slot and ground handling frameworks which
could improve competition across Europe and allow better access to congested
airports. easyJet has devoted significant effort to the European Commission's
proposals as these have the potential to improve competition at airports. In
particular, easyJet is advocating the legalisation of secondary slot trading
at airports across Europe and an increase in competition within the ground
handling market which would lead to lower costs and an improved service. This
is particularly important in Germany and Portugal, where anti-competitive
restrictions on the number of ground handlers at an airport have led to
excessive costs.

easyJet supports the work to make airspace more efficient through the Single
European Sky initiative, and the European Commission's efforts to drive lower
costs into airspace. Europe now has a real opportunity to address the
inefficiencies in airspace, and it is vital that individual Member States are
not allowed to escape their responsibilities to deliver change and control
costs.

easyJet remains concerned with the continual increase in taxes on aviation
across Europe, which is undermining European growth and ultimately jobs.
easyJet has undertaken work to demonstrate to governments that these taxes are
not in their interest or those of consumers or people working within the
sector.

Towards the end of 2012, the European Commission will set out a redraft of the
EU 261 regulations, which govern passenger rights. easyJet is focused on
ensuring that the reform brings clarity to airline obligations. easyJet
believes in the importance of providing passengers with the right level of
protection, but also the protection passengers value and want to pay for.

The airports easyJet flies to are central to its business model. easyJet's
network focuses on primary airports where people want to fly to and this
provides easyJet with access to important catchments and drives up unit
revenues. Primary airports tend to have pricing power and could engage in
monopolistic behaviour if they are not regulated.

Where airports are monopolies, regulation is the only effective answer. Only
in this way will passengers be protected from excessive airport charges and
poor service. easyJet has focused on ensuring that there is effective
regulation where it is needed, but also that regulators understand the needs
of point-to-point airlines and their passengers. There is cost pressure from
regulated airports across Europe from a combination of lower passenger
volumes, restricted access to finance and upcoming regulatory reviews. The
cost increases from the regulatory reviews in Spain and Italy were
disappointing for easyJet and there are upcoming reviews at Gatwick, Geneva
and Stansted. To address the risk of increasing airport costs, easyJet has
put in place a more sophisticated approach to regulated airport charges
building on experience of working with governments and economic regulators.
This has involved developing economic evidence on the impact of airport
charges, providing technical input into regulatory reviews and ensuring that
easyJet is properly represented in discussions with regulators and
governments.

At non-regulated airports, easyJet has worked where possible to put in place
long-term contracts that mitigate the risk of future cost increases and ensure
that easyJet can build on a long-term sustainable platform.



C) STRATEGIC PROGRESS: easyJet is uniquely positioned to be the structural
                    winner in European short haul aviation

easyJet is structurally positioned as  the strongest pan European airline  due 
to its cost  advantage, leading  market positions at  convenient airports  and 
great customer proposition of  low fares with  friendly and efficient  service 
supported by one  of the strongest  balance sheets in  European aviation.  As 
inefficient and financially weak  competitors retrench, easyJet will  continue 
its strategy to build its leading position on Europe's top 100 routes where it
has a 25%  market share to  become the leading  point-to-point airline  flying 
between primary  airports.  This  will enable  easyJet  to  deliver  passenger 
growth, in excess  of the market  overall, of around  3% to 5%  per annum  and 
tangible returns to shareholders of an annual ordinary dividend of three times
cover.



In order to  execute against  our strategy, easyJet  is focused  on four  key 
objectives:

1. Build strong number 1 and 2 network positions

2. Maintain cost advantage

3. Drive demand, conversion and yields across Europe

4. Disciplined use of capital



1. Build strong number 1 and 2 network positions

A core easyJet strength is its pan-European network which connects more of the
top 100 city to city market pairs than any other airline. easyJet's  principal 
competitors are the  legacy carriers  operating in  slot constrained,  primary 
airports over whom easyJet enjoys a significant cost advantage, allowing it to
offer competitive, affordable  fares. easyJet has  the number 1  or 2  market 
share position  in  21  valuable  slot constrained  airports  such  as  London 
Gatwick, Paris Orly, Milan Malpensa, Amsterdam and Geneva.

easyJet has built up key positions in slot constrained airports over a  number 
of years  which provide  the Company  with a  very competitive  and  resilient 
network platform  for its  operations. easyJet's  strategy is  to continue  to 
build positions of strength in its  key markets and to reallocate aircraft  to 
the routes  and bases  which  will deliver  the  highest returns.  Routes  are 
measured on  the returns  they are  delivering against  the Company's  returns 
target. Capacity  on underperforming  routes  is reallocated,  or  performance 
managed and profitability  improved, to  deliver an appropriate  return. In  a 
dynamic marketplace,  profitability of  routes  can change  over time  and  by 
ensuring that  route returns  are continually  monitored the  Company is  most 
effectively able to drive ROCE.

As a consequence of  the desire to re-orientate  the easyJet network to  drive 
sustainable long term returns, easyJet  took the difficult step of  announcing 
the proposed closure  of its  Madrid base  from Winter  2012/13. easyJet  will 
continue to serve Madrid  and the rest  of Spain but to  do so differently  by 
moving its aircraft to other easyJet bases, which will deliver higher  returns 
for the airline.

It was  clear from  the network  review that  the Madrid  base was  delivering 
returns significantly below all of easyJet's  other bases. This was due to  a 
combination of  overcapacity in  the Spanish  airline market,  leading to  low 
revenue per passenger,  combined with  high airport charges,  which have  more 
than doubled in the last  two years and will  be subject to further  increases 
above inflation in the coming years.

Aircraft have  been redeployed  in areas  which have  the potential  to  drive 
higher returns further evidenced by the strengthening of our position in  Lyon 
and the opening of  the French regional  bases in Nice  and Toulouse; the  new 
Lisbon base; London Southend opening to  improve the offering in north  London 
and additional aircraft based in Gatwick,  Basel and Milan with further  plans 
to increase aircraft based in Edinburgh and Manchester.



2. Maintain cost advantage

easyJet has a  cost advantage  over its competitors  in the  airports that  it 
operates from, allowing it to offer competitive and affordable fares. Its  key 
competitors in these  airports tend  to be  legacy carriers  with older,  less 
efficient aircraft, lower  asset utilisation,  lower seat  densities and  load 
factors and higher levels of fixed costs. This lower cost base enables easyJet
to offer the lower fares its customers value.

In addition, easyJet's asset utilisation of 10.4 block hours per day for owned
aircraft is  amongst the  highest  in the  industry.  During the  year,  asset 
utilisation decreased  by  0.6%  year-on-year following  the  introduction  of 
shorter but higher returning sectors including French domestic routes.

easyJet Lean

The easyJet Lean programme is now  firmly established and embedded within  the 
organisation with  targets every  year on  a rolling  5 year  basis under  the 
sponsorship of the Chief Financial Officer.

easyJet Lean's  goal is  to  protect easyJet's  structural cost  advantage  by 
ensuring below inflation  non-fuel cost  per seat increases.  The emphasis  is 
both on keeping cost out as well  as taking cost out. easyJet Lean  delivered 
ahead of the  planned £90 million  in 2012 and  expects to deliver  additional 
savings of around £35 million in  the 2013 financial year. Savings are  being 
achieved by  driving  cost  efficiencies through  best  in-class  procurement, 
leveraging scale, tight  control of overhead  costs, greater crew  flexibility 
and improved operational performance. Savings  to date have partially  offset 
inflationary  increases  and  the  increased  investments  in   infrastructure 
developments including allocated seating.

Ground handling was a target area  in the last financial year and  significant 
savings have  been  achieved.  Over  a third  of  ground  handling  contracts 
measured by spend were renegotiated, delivering typical savings of between  5% 
and 15%.  easyJet  continues to  work  with suppliers  to  drive  operational 
efficiencies and to simplify its product.

easyJet's strategy  is focused  around building  strong positions  at  primary 
airports where there is inherent demand and thus higher yields are  available. 
Consequently around  70%  of  easyJet's airport  costs  come  from  regulated 
airports and there have been above  inflationary cost increases in the  period 
especially in Italy  and Spain.  The easyJet procurement  team have  mitigated 
part of the  impact by  putting in  place key  deals to  support asset  growth 
elsewhere  in  the  network.  easyJet  expects  further  cost  pressure  from 
regulated airports in 2013.

easyJet continues to make  progress in optimising crew  costs to ensure it  is 
competitive in each market  in which it  operates. Successes include  agreeing 
more flexibility with  crew and  increasing crew  planning horizons.  easyJet 
continues to recognise and engage with unions during a difficult economic time
for the industry.

Fleet

easyJet has built flexibility into  its fleet planning arrangements such  that 
it can increase or  decrease capacity deployed,  subject to the  opportunities 
available and  prevailing  economic  conditions.  The  Company  also  has  the 
flexibility to move aircraft between routes and markets to improve returns.

easyJet's total fleet as  at 30 September 2012  comprised 214 aircraft,  split 
between 156 seat  Airbus A319s and  180 seat A320s.  During the year,  easyJet 
took delivery  of 19  A320 aircraft  under  the terms  of the  Airbus  easyJet 
agreement and seven A319 aircraft exited  the fleet. The two remaining  Boeing 
737-700s were returned to their lessors in November 2011.

The larger A320  aircraft have been  introduced over the  last few years  with 
minimal  reduction  in  yields,  and  deliver  a  per  seat  cost  saving   of 
approximately  7%  over  the  A319   aircraft  through  economies  of   scale, 
efficiencies in crew, ownership, fuel and maintenance. The modest increase  in 
the proportion of A320s this year delivered a 21 pence per seat cost saving in
2012. easyJet believes  that the mix  of A320s  in the fleet  can continue  to 
increase in the foreseeable future with minimal impact on yields.

easyJet targets an owned:leased split of aircraft of 70:30 but as it evaluates
the next generation of aircraft expects the mix to fluctuate.

The major airframe suppliers  have embarked upon the  development of the  next 
generation of short-haul aircraft to  take advantage of new engine  technology 
being developed by CFM International (a joint venture between General Electric
and Snecma) and Pratt & Whitney.  Airbus and Boeing are updating their  single 
aisle aircraft with new engines  and various other upgrades whilst  Bombardier 
is producing a completely new 100 to 150 seat family aircraft using the latest
systems and production techniques. The  new aircraft types, which are  planned 
to enter service over the next six years, promise double digit fuel efficiency
improvements which are clearly attractive to easyJet.

easyJet is making good progress on its technical and commercial evaluation  of 
the next  generation of  short-haul aircraft  technology. As  the  evaluation 
advances further, easyJet  will bring  a proposal to  shareholders which  will 
cover both the next generation of deliveries which are likely to be after 2017
and a plan for the bridging period from 2014 to 2017.

easyJet's intention for any new aircraft order is to maximise the economic
efficiencies of the fleet and to support further returns-focused capacity
growth.



Fleet as at 30 September 2012:

                                                                   Unexercised
              Operating Finance       Changes Future committed purchase rights
        Owned    leases  leases Total in year  deliveries^(7) and options^(8)
easyJet   105        49       6   160      -7                -               -

A319
easyJet
           43         6       5    54      19               16              73
A320
Boeing
            -         -       -     -      -2                -               -
737-700
GB
Airways
A320        -         -       -     -       -            2^(6)               -
family
          148        55      11   214      10               18              73



3. Drive demand, conversion and yields across Europe

Over the course  of the year,  easyJet introduced a  number of initiatives  to 
drive demand  and improve  unit revenue.  Unit  revenues rose  by 7.5%  on  a 
constant currency basis to £59.41.



The 'europe by easyJet' campaign has continued to drive visits to  easyJet.com 
and has been a success in all of  its major markets. The aim of the  campaign 
has been to develop a brand that people know, like and understand,  increasing 
their likelihood to fly with easyJet on a recurring basis.

During  the  course  of  the  year,  easyJet  launched  its  first  television 
advertising campaign  focusing  on connecting  people  across Europe  and  the 
experiences customers  have.  The  emphasis  has  been  placed  on  having  a 
consistent  presence  across  Europe  with  appropriate  market  testing   and 
tailoring of key messages. The TV campaign  was delivered at the same time  as 
reducing marketing cost per seat  with a reallocation of marketing  investment 
achieved through the rigorous testing of all media.

easyJet has continued to  focus on attracting  business travellers to  improve 
unit revenues.  Key to  success  in this  market  is to  establish  effective 
partnerships  with  Global   Distribution  System   (GDS)  providers,   travel 
management companies (TMCs) and large scale corporate customers. The  emphasis 
of the business traveller initiative in 2012 was to put these building  blocks 
in place  for  future growth.  Agreements  were  signed with  the  major  GDS 
providers (including Amadeus), the  leading TMCs (including American  Express) 
and by  reaching  agreements with  specific  customers (including  major  high 
street banks)  and recently  with the  UK Houses  of Parliament.  easyJet  is 
working in partnership with the GDS  providers and TMCs to improve  technology 
to make the booking  functionality for third party  agents easier and  expects 
these improvements to be completed in mid-2013.



In the cost conscious business travel market, easyJet has seen a 6% growth  in 
business passengers and increased  its share of  the European business  travel 
market^(9).

In September,  easyJet announced  that its  allocated seating  trial had  been 
successful and would  be rolled out  across its network  by 27 November  2012. 
easyJet was  keen to  ensure  that allocated  seating  did not  impact  asset 
utilisation and is confident  that the roll-out  will not materially  diminish 
on-time performance. Customer feedback has been positive with more than 70% of
customers preferring allocated seating and over 60% more likely to use easyJet
in the future^(10).

easyJet is the third most searched for airline globally^(11) with close to 400
million visits  to  easyJet.com over  the  last  12 months.  60%  of  visitors 
originate from outside the UK.

easyJet.com's  new  content  management  system  was  introduced  to   improve 
operational efficiency,  increase  agility,  and target  specific  users  with 
relevant route  pricing  and  messages.  Other  new  initiatives  include  the 
introduction of InspireMe, a map based search tool targeting those people  who 
may not know exactly where or when they want to travel, and specific Swiss and
US websites.

During the course of the year, easyJet also focused on broadening its  digital 
reach through the introduction of new  channels. As at 30 September 2012,  the 
easyJet mobile app  had over  3 million  downloads delivering  £42 million  of 
revenue since  its introduction  in  December 2011.  The  easyJet app  is  now 
available through iPhone and  Android devices and  has been complemented  with 
the  recent  launch  of  a  mobile  website.  By  focusing  on  core  booking 
functionality and "making travel easy" for  customers on the move, easyJet  is 
well positioned  to take  further advantage  of developments  in this  growing 
area.



easyJet made significant improvements  in the way it  prices its flights  over 
the last 12 months, investing in improvements to its yield management system.
Developments  include  continuous   pricing  allowing   more  specific   yield 
algorithms to  be utilised  on a  wider  range of  flights, using  the  latest 
artificial intelligence techniques to optimise pricing, and further unbundling
and yield managing ancillary charges.



Through  partnerships  with  leading  providers  (including  booking.com   and 
Europcar) and an increased focus on customer insight and segmentation, easyJet
is in the process  of overhauling its customer  contact strategy. A range  of 
relevant and personalised emails will  be deployed at appropriate points  with 
the aim of driving ancillary upsell and improving customer experience.



4. Disciplined use of capital



The aviation market is a highly capital intensive industry and it is important
for airlines to pay careful consideration to its financing and balance sheet
position to balance risk, growth, access to funding and shareholder returns.



easyJet has a strong balance sheet and derives a competitive advantage through
access to funding at a lower cost. easyJet has a range of measures and tools
to effectively allocate capital and resources across its network whilst
maintaining an optimal capital structure. This has enabled easyJet to deliver
returns in excess of its cost of capital. easyJet has the following targets
to ensure its capital structure remains both robust and efficient:



· a maximum gearing of 50% giving investors and finance providers
assurance that easyJet will not over-leverage;

· a limit of £10 million net debt per aircraft; and

· a minimum £4 million liquidity per aircraft.



These measures allow easyJet to withstand external shocks such as an extended
closure of airspace, significant fuel price increases or a sustained period of
low yields whilst being in a position to drive growth and returns for
shareholders.



Over the cycle, easyJet is committed to covering its cost of capital, and will
self-fund both growth and the dividend from the cash flows of the business.



During the year good progress has been made on reducing excess liquidity and
capital by paying a special dividend of £150 million and repaying £162 million
of relatively high-coupon mortgage debt. easyJet is currently in the process
of closing sale and leasebacks for 12 new A320s and 12 older A319 aircraft.
The tender process has been heavily oversubscribed which should allow easyJet
to close deals at very attractive lease rates; demonstrating the benefit of
easyJet's strong balance sheet.



In light of the continued strong financial performance of easyJet and the
robustness of the easyJet balance sheet, the Board has decided that it is
appropriate to reduce the level of dividend cover from 5 times to 3 times for
the foreseeable future and consequently the Board has recommended paying an
ordinary dividend of 21.5 pence per share at a total cost of £85 million, an
increase of 104.8%.



The recommended ordinary dividend will be paid on Friday 22 March 2013 to
those shareholders on the register at the close of business on Friday 1 March
2013 with an ex-dividend date of Wednesday 27 February 2013.



D) LOOKING FORWARD

                              Hedging positions

easyJet operates under a clear set  of treasury policies agreed by the  Board. 
The aim  of  easyJet's  hedging  policy is  to  reduce  short  term  earnings 
volatility. Therefore, easyJet hedges forward, on a rolling basis, between 65%
and 85% of the next 12  months anticipated fuel and currency requirements  and 
between 45%  and 65%  of  the following  12 months  anticipated  requirements. 
Details of current hedging arrangements are set out below:



Percentage of anticipated requirement hedged Fuel        US Dollar   Euro

                                             requirement requirement surplus
Six months ending 31 March 2013              86%         86%         76%
Average rate                                 $986 m/t    $1.61       €1.18
Full year ending 30 September 2013           78%         81%         68%
Average rate                                 $985 m/t    $1.60       €1.18
Full year ending 30 September 2014           55%         62%         48%
Average rate                                 $993 m/t    $1.58       €1.22



                                Sensitivities

· A $10 movement per metric tonne impacts the FY'13 fuel bill by $4
million.

· A one cent movement in £/$ impacts the FY'13 profit before tax by £1.6
million.

· A one cent movement in £/€ impacts the FY'13 profit before tax by £1.2
million.



                                   Outlook

The  European  macro-economic  environment   remains  uncertain  and   easyJet 
continues to  be disciplined  in  its approach  to asset  allocation.  Weaker 
competitors have retrenched and there  are clear opportunities for  profitable 
growth, thus easyJet will grow overall capacity in seats flown by around  3.5% 
in the first half of the year. Full year capacity growth is expected to be at
a similar level to the first half of the year.

Forward bookings for the first half of the 2013 financial year are broadly  in 
line with the prior year.  With around 45% of  winter seats now booked,  first 
half total revenue per seat at constant  currency is expected to be up by  low 
to mid-single digits; as is usual at this time of the year it is too early  to 
have any visibility on second half revenue per seat performance.

easyJet expects  cost per  seat  (excluding fuel  and currency  movements)  to 
increase by around 3% to 4% for the full  year and by around 4% to 5% for  the 
first half assuming  normal levels  of disruption and  constant load  factors. 
Cost increases  will  be  predominantly  driven by  increases  in  charges  at 
regulated airports and airport costs are likely to increase by £70 million  at 
constant currency for the 2013 financial year.

It is estimated that at current exchange rates and with fuel remaining within
its recent $1,000 m/t to $1,100 m/t trading range, easyJet's unit fuel bill
for the 2013 financial year would be up to £30 million higher ^(12). In
addition, exchange rate movements (excluding those related to fuel) are likely
to have a further £50 million^(12) negative impact in the 2013 financial year.

The challenges  faced by  easyJet  are shared  by  all European  airlines  but 
easyJet's  leading  European  network  and  cost  advantage  combined  with  a 
disciplined approach to use  of capital means that  easyJet is well placed  to 
continue to make travel easy and  affordable for customers and to continue  to 
generate returns and growth for shareholders.

Whilst there  is always  the potential  for unexpected  events to  temporarily 
impact financial results the Board of  easyJet is confident that its  business 
model, strategy and  people will  consistently continue  to generate  superior 
returns and growth for shareholders.



(1) Source: On-time performance as measured by internal easyJet system

(2) Source: On-time performance as measured by flightstats.com

(3) Source: customer satisfaction data from GfK Customer Satisfaction
Tracker. Time period: FY 2012 versus FY 2011. Data updated October 2012.

(4) Market share data from OAG. Size of European market based on internal
easyJet definition. Historic data based on the 12 month period from October
2011 to end September 2012. Forward looking data based on available OAG
information to the end of March 2013 with assumptions made on Ryanair growth.

(5) Brand consideration scores from GfK ascent

(6) To be delivered as part of a GB Airways commitment

(7) The 16 future easyJet deliveries and 2 ex-GB Airways deliveries are
anticipated to be delivered over the next three financial years;10 in FY13, 6
in FY14 and 2 in FY15.

(8) Purchase options and rights may be taken on any A320 family aircraft and
are valid until 2015.

(9) Source: Business traveller market share from PhoCusWright report October
2012.

(10) Source: Allocated seating data based on 32,000 respondents to end of
August 2012

(11) Source: Google

(12) Rates as at 16 November 2012 US$1.59/£, €1.25/£ and US$1,019 per metric
tonne:







Finance Review



Key performance indicators



easyJet has delivered a strong financial performance for the 2012 financial
year, despite continuing macroeconomic challenges across Europe and fuel
prices remaining both high and volatile. Profit before tax grew by 27.9% to
£317 million, resulting in profit before tax per seat of £4.81; close to our
ambition of £5. Profit after tax was £255 million, an increase of 13.3% from
£225 million last year.



Return on capital employed and capital structure



                                              2012  2011  Change
ROCE - including operating leases adjustment 11.3%  9.8% +1.5ppt
ROCE - excluding operating leases adjustment 14.5% 12.7% +1.8ppt
Return on equity                             14.6% 14.0% +0.6ppt
Gearing                                        29%   28%   +1ppt





When return on capital employed was introduced as a key performance indicator
in 2010, the decision was taken not to adjust the calculation for aircraft
held under operating leases. This was in the expectation that the IASB's
leasing project would complete in a relatively short time frame, resulting in
all leases being shown on the statement of financial position.



Over the last year it has become clear that this process is far from complete
and the accounting position is not expected to change before our 2016
financial year at the earliest. Consequently it has been decided to amend our
ROCE calculation to reflect appropriately the impact on return on capital of
aircraft held under operating leases by capitalising that at seven times the
annual lease rental in line with market practice. While the returns indicated
by the new measure are lower, the measures are closely correlated and both old
and new measures indicate returns in excess of cost of capital.



ROCE including operating leases adjustment for the year was 11.3%, an increase
of 1.5 percentage points from the previous year.



Return on equity improved by 0.6 percentage points to 14.6%. This increase is
lower than that seen in either ROCE measure due to the increase in effective
tax rate from 9% last year to 20% this year.



During the year good progress has been made on reducing excess liquidity and
capital by paying a special dividend of £150 million and repaying £162 million
of relatively high-coupon mortgage debt. Gearing was stable at 29% (2011: 28%)





Financial performance per seat



                                           2012                           2011
                 £ million     £ per  Pence per £ million     £ per  Pence per
                                seat        ASK                seat        ASK
Total revenue        3,854     58.51       5.34     3,452     55.27       4.98
Costs excluding
fuel                 2,388     36.25       3.31     2,287     36.62       3.30
Fuel                 1,149     17.45       1.59       917     14.68       1.32
Profit before
tax                    317      4.81       0.44       248      3.97       0.36
Tax charge             62      0.94       0.09        23      0.37       0.04
Profit after tax       255      3.87       0.35       225      3.60       0.32



Total revenue grew by 11.6% to £3,854 million resulting in growth of 5.9% in
revenue per seat to £58.51. At constant currency, revenue per seat grew by
7.5% to £59.41. Just over half of this improvement was driven by improved
ticket prices, with the balance mainly from the annualising of changes to fees
and charges introduced last year.



Excluding fuel, cost per seat fell by 1.0% to £36.25, however it grew by 1.8%
at constant currency. easyJet experienced above-inflation increases in charges
at regulated airports (particularly in Spain and Italy). Set against this
easyJet successfully re-negotiated a number of key ground handling contracts
and also continued to benefit from the increasing proportion of larger A320
aircraft in the fleet. To a lesser extent, cost per seat was also adversely
impacted by higher load factors and benefitted from slightly shorter average
sector length.



Disruption levels and the costs that resulted were exceptionally low this year
with just over 1,000 sectors cancelled on the day or delayed overnight. This
is a quarter of the level experienced last year. While it is pleasing to be
able to report this, easyJet does not consider it to be representative of what
may be seen in the future.



As previously reported, our average fuel price increased by $164 per tonne
compared with last year resulting in an increase in fuel unit costs of £182
million, equivalent to £2.77 per seat.



Overall, profit before tax increased by £69 million (£0.84 per seat) to £317
million (£4.81 per seat). While the impact of exchange rate changes on certain
components of the income statement were significant, overall profit before
taxation was improved by £10 million driven by the favourable timing of Euro
booking revenues.



The tax charge was £62 million resulting in an effective tax rate of 20%
(2011: charge of £23 million and effective tax rate of 9%).

The difference between the effective tax rate and standard UK rate is
principally driven by the reduction in the UK deferred tax rate to 23% and the
utilisation of previously unrecognised losses.





Earnings per share and dividends per share



                              2012  2011 Change
Earnings per share           62.5p 52.5p  19.0%
Ordinary dividend per share 21.5p 10.5p 104.8%
Special dividend per share   -  34.9p    N/A



easyJet paid its first ever dividends during March 2012, comprising an
ordinary dividend of 10.5 pence per share and a special dividend of 34.9 pence
per share. The total dividend paid was £196 million. Following payment of the
special dividend, share capital was consolidated on a basis of eleven for
twelve, and at year end easyJet had 396 million shares of 27 ^2/[7] pence
outstanding.



Earnings per share grew 19.0% to 62.5 pence per share. Of this increase,13.6%
is due to growth in profit after tax and 5.4% due to the impact of the share
consolidation following payment of the special dividend in March.



Ordinary dividend per share grew by 104.8 % to 21.5p pence per share. easyJet
is pleased to announce that its dividend policy is being amended from this
year to pay out one-third of profit after tax for each year, up from the
one-fifth payout introduced last year. 





Exchange rates



Capacity grew in the year by 3.4 million seats flown, of which around
two-thirds was deployed in bases outside the UK. While this resulted in
increased cash flows denominated in Euros, the weakness of the Euro against
sterling meant that the overall currency profile of the business was little
changed year on year:



                                   Revenue         Costs
                                2012     2011     2012   2011
Sterling                         47%      47%      24%    24%
Euro                             43%      44%      35%    35%
US Dollar                         1%        -      35%    35%
Other (principally Swiss Franc)   9%       9%       6%     6%
Average Exchange Rates                   2012     2011 Change
Euro - revenue                          €1.19    €1.15 (3.9%)
Euro - costs                            €1.22    €1.15   5.8%
US Dollar                               $1.60    $1.61 (0.6%)
Swiss Franc                          CHF 1.46 CHF 1.45 (0.7%)



The value of the Euro against sterling declined during the year, with the year
end exchange rate 7.8% lower at €1.25/£1. This decline was more marked during
the second half of the year. Since the business generates a Euro surplus (Euro
revenue exceeds Euro costs) a net loss from this Euro exposure might be
expected.



However a significant proportion of summer bookings were taken before the
sharpest decline in the exchange rate, which, coupled with the policy of
hedging surplus Euros, meant that easyJet was shielded from the full impact of
the falling Euro in this financial year.





The impact on profit of changes in exchange rates was as follows:



Favourable / (Adverse)      Euro Swiss franc US dollar     Other     Total
                       £ million   £ million £ million £ million £ million
Revenue                     (65)           9         1       (5)      (60)
Fuel                          11           -      (10)         -         1
Costs excluding fuel          68           4       (5)         2        69
Total                         14          13      (14)       (3)        10





Financial performance



Revenue
                                           2012                           2011
                £ million £ per seat  Pence per £ million     £ per  Pence per
                                            ASK                seat        ASK
Seat revenue        3,794      57.61       5.26     3,389     54.25       4.89
Non-seat
revenue                60       0.90       0.08        63      1.02       0.09
Total revenue       3,854      58.51       5.34     3,452     55.27       4.98



Revenue per seat improved by 5.9% compared with last year to £58.51 reflecting
strong performances across the network (with the exception of Spain),
particularly from London Gatwick, France and Switzerland.



Seats flown grew by 5.5% to 65.9 million, principally in London Gatwick,
France and Switzerland. Load factor was marginally higher at 88.7% and
passengers increased by 7.1% to 58.4 million.



Seat revenue contributed to 6.2% of this increase, held back by significant
increases in APD, VAT and similar taxes levied on passengers. Overall these
taxes, driven by a further increase in UK APD, increased by 8.0% to £6.76 per
seat.



Non-seat revenue contracted by 11.8% to £0.90 per seat as commissions earned
from sale of travel insurance and, to a lesser extent, car hire continued to
fall.



Costs
                                                2012                      2011
                           £ million £ per Pence per £ million £ per Pence per
                                      seat       ASK            seat       ASK
Operating costs excluding
fuel                           2,174 33.00      3.01     2,067 33.10      2.98
Fuel                           1,149 17.45      1.59       917 14.68      1.32
Ownership costs                  214  3.25      0.30       220  3.52      0.32
Total costs                    3,537 53.70      4.90     3,204 51.30      4.62
Total costs excluding fuel     2,388 36.25      3.31     2,287 36.62      3.30



Total cost per seat increased by 4.7% to £53.70; however excluding fuel, cost
per seat was broadly flat at £36.25, and up by 1.8% at constant currency.





Operating costs excluding
fuel
                                            2012                          2011
                  £ million     £ per  Pence per £ million     £ per Pence per
                                 seat        ASK                seat       ASK
Ground operations       955     14.49       1.32       923     14.79      1.33
Crew                    432      6.55       0.60       407      6.51      0.58
Navigation              280      4.25       0.39       285      4.56      0.41
Maintenance             203      3.08       0.28       179      2.86      0.26
Selling and
marketing               104      1.58       0.14       102      1.64      0.15
Other costs             200      3.05       0.28       171      2.74      0.25
                      2,174     33.00       3.01     2,067     33.10      2.98



Operating costs per seat excluding fuel decreased by 0.3% to £33.00. At
constant currency, operating costs per seat excluding fuel increased by 2.8%
to £34.01 per seat.



Ground operations cost per seat fell by 2.0% but increased by 1.6% excluding
the effect of changes in exchange rates. Although costs have decreased due to
the relatively benign winter weather and better controls over the use of
de-icing fluid, as well as savings on contract renegotiations with ground
handlers, this has been offset by significant increase at airports operated in
Spain by AENA and a doubling of charges for on-ground navigation services in
Italy. The further increases in AENA charges were a factor in our decision to
withdraw the six aircraft based in Madrid from December 2012.



Crew cost per seat increased by 0.6%, and by 2.8% at constant currency driven
by an average 2% increase in salaries and disciplined thinning of capacity
during the winter months.



Navigation costs fell 6.7% to £4.25 per seat and were down 1.2% at constant
currency despite regulated cost increases averaging 2%. This reduction is
driven by the increased proportion of A320 aircraft in the fleet and a
slightly shorter average sector length as capacity based on the European
mainland continues to grow at a faster rate than in the UK.



Maintenance costs have been declining for a number of years, but increased
this year by 7.7% to £3.08 per seat; similar to the level seen in 2010. This
increase is driven by one-off items that are unlikely to recur. The cost
benefits from reducing the proportion of leased aircraft in the fleet have now
come to an end, and the average age of the fleet is gradually increasing as
planned. easyJet is investing in process improvements that will maintain our
cost position in the future.



Other costs increased by 11.3% to £3.05 per seat. This is due to investment
in IT infrastructure, and higher performance-related employee costs,
reflecting the significantly improved profitability of the business. This was
partly offset by unusually low levels of operational disruption resulting in
lower compensation payments under EU Regulation EU261/2004.



Fuel
                                   2012                               2011
     £ million £ per seat Pence per ASK £ million £ per seat Pence per ASK
Fuel     1,149      17.45          1.59       917      14.68          1.32



The market price for jet fuel remained high and volatile over the year, mostly
in excess of $1,000 per tonne. Our hedging activities continued to defer the
full impact of this. Average price paid increased by $164 to $982 per tonne;
in sterling terms, an increase of £110 to £618. Of the total increase in fuel
costs of £232 million, £182 million (£2.77 per seat) is due to the roll off of
fuel purchases hedged at favourable rates.



Forward purchases of 1.8 million tonnes of fuel for 2013 and 2014 were
executed during the periodic dips below $1,000 at an average price of $992 per
tonne. As a result the hedged percentages are 78% for 2013 at $985 per tonne
and 55% for 2014 at $993 per tonne.





Ownership costs
                                               2012                       2011
                         £ million  £ per Pence per £ million  £ per Pence per
                                     seat       ASK             seat       ASK
Aircraft dry leasing            95   1.44      0.13       109   1.75      0.16
Depreciation                    97   1.47      0.14        83   1.33      0.12
Amortisation                     8   0.12      0.01         7   0.12      0.01
Interest receivable           (10) (0.14)    (0.01)       (9) (0.15)    (0.01)
Interest payable and
other financing charges         25   0.38      0.03        24   0.38      0.03
Net exchange (gains) /
losses                         (1) (0.02)         -         6   0.09      0.01
                               214   3.25      0.30       220   3.52      0.32



Ownership costs declined slightly to £3.25 per seat continuing recent strong
performance.



The final two Boeing 737 aircraft were returned to lessors during the first
quarter, and easyJet now operates a standardised fleet with two gauges of
Airbus aircraft. Depreciation cost per seat increased by £0.14 to £1.47 driven
by the increased proportion of owned aircraft in the fleet.



The leased proportion of the fleet is currently 26%, which is below the
objective of a 70% owned and 30% leased fleet mix, as completion of a number
of leases was deferred into the first quarter of the coming financial year.
The recent trend of declining ownership costs is not expected to continue at
the same rate, although the increasing proportion of A320 aircraft in the
fleet will continue to deliver some reductions to depreciation and aircraft
dry leasing costs per seat.



Exchange gains and losses arise from changes in the value of monetary assets
and liabilities denominated in currencies other than sterling. Fluctuations
of the size seen in the last two years are within the range of expectations
given the size of the related foreign currency cash flows.





Cash flows and financial position



Summary consolidated statement of cash flows
                                                      2012      2011    Change
                                                 £ million £ million £ million
Net cash generated from operating activities
(excluding dividends)                                  457       424        33
Ordinary dividend paid                                (46)        -      (46)
Special dividend paid                                (150)        -     (150)
Net capital expenditure *                            (389)     (478)        89
Net loan and lease finance (repayment) /
drawdown                                             (314)       356     (670)
Net decrease / (increase) in money market
deposits                                                55      (38)        93
Other including the effect of exchange rates          (68)      (76)         8
Net (decrease) / increase in cash and cash
equivalents                                          (455)       188     (643)
Cash and cash equivalents at beginning of year       1,100       912       188
Cash and cash equivalents at end of year               645     1,100     (455)
Money market deposits at end of year                   238       300      (62)
Cash and money market deposits at end of year          883     1,400     (517)
* stated net of disposal proceeds of £75 million
in 2011



In line with prior years, easyJet generated strong operating cash flow in the
year principally driven by growth in forward bookings and revenue per seat.
Operating cash flow exceeded capital expenditure and ordinary dividend paid in
line with the ambition to self-fund growth and fleet renewal.



Net capital expenditure principally comprises the acquisition of 19 A320
aircraft and advance payments on aircraft due to be delivered mainly over the
next two years.



No new loan or lease finance was drawn down during the year, and mortgage
loans on twelve aircraft were fully repaid. Two of these loans had reached
their contractual end, however the other ten loans were repaid early as part
of our strategy to reduce expensive borrowings and excess liquidity.



Summary consolidated statement of financial
position
                                                      2012      2011    Change
                                                 £ million £ million £ million
Goodwill                                               365       365         -
Property, plant and equipment                        2,395     2,149       246
Net working capital                                  (792)     (765)      (27)
Restricted cash                                        159       123        36
Net (debt) / cash                                     (74)       100     (174)
Current and deferred taxation                        (227)     (188)      (39)
Other non-current assets and liabilities              (32)      (79)        47
                                                     1,794     1,705        89
Opening shareholders' equity                         1,705     1,501
Profit for the year                                    255       225
Ordinary dividend paid                                (46)         -
Special dividend paid                                (150)         -
Change in hedging reserve                               28      (21)
Other movements                                          2         -
                                                     1,794     1,705



Net assets increased by £89 million driven by the profit for the year offset
by dividends paid and a small net change in the hedging reserve.



The net book value of property plant and equipment increased by £246 million
driven principally by the acquisition of 19 A320 family aircraft, and advance
payments for aircraft due to be delivered over the next two years.



Net working capital was broadly flat at a net negative £792 million.
Passengers pay for their flights in full when booking, therefore the key
component of this balance is unearned revenue, which increased by £24 million
to £496 million. This increase was rather lower than that seen last year as
flights for July and August 2013 did not go on sale until shortly after year
end.



Reconciliation of net cash flow to movement in
net (debt) / cash
                                                      2012      2011    Change
                                                 £ million £ million £ million
Cash and cash equivalents                              645     1,100     (455)
Money market deposits                                  238       300      (62)
                                                       883     1,400     (517)
Bank loans                                           (752)   (1,079)       327
Finance lease obligations                            (205)     (221)        16
                                                     (957)   (1,300)       343
Net (debt) / cash                                     (74)       100     (174)



easyJet ends the year with £883 million in cash and money market deposits; a
decrease of £517 million compared with 30 September 2011. Net borrowings
decreased by £343 million.



Net debt at 30 September 2012 was £74 million compared with net cash of £100
million at 30 September 2011. At 30 September 2012 gearing was 29%,
marginally higher than last years gearing of 28%.



Although the net position has not changed significantly, both cash and debt
balances have declined markedly during the year, due to payment of the special
dividend, accelerated repayment of £162 million of mortgage loans and a
reduction in the number of leased aircraft. These actions reduced excess
liquidity, and easyJet ended the year with a cash and money market deposits
balance in line with our policy of holding £4 million cash per aircraft in the
fleet.





Key statistics



Operational measures                                     2012     2011  Change
Seats flown (millions)                                   65.9     62.5    5.5%
Passengers (millions)                                    58.4     54.5    7.1%
Load factor                                             88.7%    87.3% +1.4ppt
Available seat kilometres (ASK) (millions)             72,182   69,318    4.1%
Revenue passenger kilometres (RPK) (millions)          65,227   61,347    6.3%
Average sector length (kilometres)                     1,096   1,110  (1.3%)
Sectors                                              411,008 393,147    4.5%
Block hours                                          786,854 761,708    3.3%
Number of aircraft owned/leased at end of year            214      204    4.9%
Average number of aircraft owned/leased during year     206.6    198.8    3.9%
Number of aircraft operated at end of year                203      197    3.0%
Average number of aircraft operated during year         195.7    185.4    5.5%
Operated aircraft utilisation (hours per day)            11.0     11.3  (2.5%)
Owned aircraft utilisation (hours per day)               10.4     10.5  (0.6%)
Number of routes operated at end of year                  605      547   10.6%
Number of airports served at end of year                  133      123    8.1%
Financial measures
Return on equity                                        14.6%    14.0% +0.6ppt
Return on capital employed - excluding operating
leases adjustment                                       14.5%    12.7% +1.8ppt
Return on capital employed - including operating
leases adjustment                                       11.3%     9.8% +1.5ppt
Gearing                                                   29%      28%   +1ppt
Profit before tax per seat (£)                           4.81     3.97   21.3%
Profit before tax per ASK (pence)                        0.44     0.36   22.8%
Revenue
Revenue per seat (£)                                    58.51    55.27    5.9%
Revenue per seat at constant currency (£)               59.41    55.27    7.5%
Revenue per ASK (pence)                                  5.34     4.98    7.2%
Revenue per ASK at constant currency (pence)             5.42     4.98    8.9%
Costs
Per seat measures
Total cost per seat (£)                                 53.70    51.30    4.7%
Total cost per seat excluding fuel (£)                  36.25    36.62  (1.0%)
Total cost per seat excluding fuel at constant
currency (£)                                            37.28    36.62    1.8%
Operational cost per seat (£)                           50.45    47.78    5.6%
Operational cost per seat excluding fuel (£)            33.00    33.10  (0.3%)
Operational cost per seat excluding fuel at constant
currency (£)                                            34.01    33.10    2.8%
Ownership cost per seat (£)                              3.25     3.52  (7.8%)
Per ASK measures
Total cost per ASK (pence)                               4.90     4.62    6.0%
Total cost per ASK excluding fuel (pence)                3.31     3.30    0.2%
Total cost per ASK excluding fuel at constant
currency (pence)                                         3.40     3.30    3.1%
Operational cost per ASK (pence)                         4.60     4.30    6.9%
Operational cost per ASK excluding fuel (pence)          3.01     2.98    0.6%
Operational cost per ASK excluding fuel at constant
currency (pence)                                         3.10     2.98    4.1%
Ownership cost per ASK (pence)                           0.30     0.32  (6.6%)





Consolidated Income Statement



                                                  Year ended        Year ended
                                           30 September 2012 30 September 2011
                                     Notes         £ million         £ million
Seat revenue                                           3,794             3,389
Non-seat revenue                                          60                63
Total revenue                                          3,854             3,452
Ground operations                                      (955)             (923)
Fuel                                                 (1,149)             (917)
Crew                                                   (432)             (407)
Navigation                                             (280)             (285)
Maintenance                                            (203)             (179)
Selling and marketing                                  (104)             (102)
Other costs                                            (200)             (171)
EBITDAR                                                  531               468
Aircraft dry leasing                                    (95)             (109)
Depreciation                           6                (97)              (83)
Amortisation of intangible assets                        (8)               (7)
Operating profit                                         331               269
Interest receivable and other
financing income                                          11                 9
Interest payable and other financing
charges                                                 (25)              (30)
Net finance charges                    3                (14)              (21)
Profit before tax                                        317               248
Tax charge                             4                (62)              (23)
Profit for the year                                      255               225
Earnings per share, pence
Basic                                  5                62.5              52.5
Diluted                                5                61.7              52.0







Consolidated Statement of Comprehensive Income



                                                  Year ended        Year ended
                                           30 September 2012 30 September 2011
                                     Notes          £million          £million
Profit for the year                                      255               225
Other comprehensive income
Cash flow hedges
 Fair value gains in the year                          109               122
 Gains transferred to income
statement                                               (74)             (152)
 Related tax                         4                 (7)                 9
                                                          28              (21)
Total comprehensive income for the
year                                                     283               204





Consolidated Statement of Financial Position



                                       30 September 2012 30 September 2011
                                 Notes         £ million         £ million
Non-current assets
Goodwill                                             365               365
Other intangible assets                               91                86
Property, plant and equipment      6               2,395             2,149
Derivative financial instruments                      21                24
Loan notes                                            10                11
Restricted cash                                       29                33
Other non-current assets                              57                63
                                                   2,968             2,731
Current assets
Trade and other receivables                          241               165
Derivative financial instruments                      73                83
Restricted cash                                      130                90
Money market deposits                                238               300
Cash and cash equivalents                            645             1,100
                                                   1,327             1,738
Current liabilities
Trade and other payables                         (1,021)             (916)
Borrowings                                         (129)             (155)
Derivative financial instruments                    (26)              (52)
Current tax liabilities                             (29)               (9)
Maintenance provisions                              (59)              (45)
                                                 (1,264)           (1,177)
Net current assets                                    63               561
Non-current liabilities
Borrowings                                         (828)           (1,145)
Derivative financial instruments                    (24)              (27)
Non-current deferred income                         (46)              (59)
Maintenance provisions                             (141)             (177)
Deferred tax liabilities                           (198)             (179)
                                                 (1,237)           (1,587)
Net assets                                         1,794             1,705
Shareholders' equity
Share capital                                        108               108
Share premium                                        656               654
Hedging reserve                                       42                14
Translation reserve                                    1                 1
Retained earnings                                    987               928
                                                   1,794             1,705







Consolidated Statement of Changes in Equity



                       Share
                                 Share   Hedging Translation  Retained
                     capital   premium   reserve     reserve  earnings   Total
                                                                             £
                   £ million £ million £ million   £ million £ million million
At 01 October 2011       108       654        14           1       928   1,705
Total
comprehensive
income                    -        -        28          -       255     283
Dividends paid            -        -        -          -     (196)   (196)
Share incentive
schemes
 Proceeds from
shares issued             -         2        -          -        -       2
 Value of
employee services         -        -        -          -        12      12
 Related tax
(note 4)                  -        -        -          -         3       3
 Purchase of own
shares                    -        -        -          -      (15)    (15)
At 30 September
2012                     108       656        42           1       987   1,794
                       Share
                                 Share   Hedging Translation  Retained
                     capital   premium   reserve     reserve  earnings   Total
                                                                             £
                   £ million £ million £ million   £ million £ million million
At 01 October 2010       107       652        35           1       706   1,501
Total
comprehensive
income                    -        -      (21)          -       225     204
Share incentive
schemes
 Proceeds from
shares issued              1         2        -          -        -       3
 Value of
employee services         -        -        -          -         6       6
 Related tax
(note 4)                  -        -        -          -       (1)     (1)
 Purchase of own
shares                    -        -        -          -       (8)     (8)
At 30 September
2011                     108       654        14           1       928   1,705



The hedging reserve comprises the effective portion of the cumulative net
change in fair value of cash flow hedging instruments relating to highly
probable transactions that are forecast to occur after the year end.





Consolidated Statement of Cash Flows



                                                  Year ended        Year ended
                                           30 September 2012 30September 2011
                                     Notes         £ million         £ million
Cash flows from operating activities
Cash generated from operations
(excluding dividends)                    7               494               449
Ordinary dividends paid                                 (46)                -
Special dividends paid                                 (150)                -
Net interest and other financing
charges paid                                             (9)              (23)
Tax paid                                                (28)               (2)
Net cash generated from operating
activities                                               261               424
Cash flows from investing activities
Purchase of property, plant and
equipment                                              (379)             (550)
Proceeds from sale of assets held
for sale                                                  -                75
Proceeds from sale of property,
plant and equipment                                        1                 -
Purchase of other intangible assets                     (13)               (6)
Redemption of loan notes                                   2                 3
Net cash used by investing
activities                                             (389)             (478)
Cash flows from financing activities
Net proceeds from issue of ordinary
share capital                                              2                 3
Purchase of own shares for employee
share schemes                                           (15)               (8)
Proceeds from drawdown of bank loans                      -               172
Repayment of bank loans                                (305)             (154)
Proceeds from drawdown of finance
leases                                                    -                71
Repayment of capital elements of
finance leases                                           (9)               (6)
Net proceeds from sale and operating
leaseback of aircraft                                     -               273
Net decrease / (increase) in money
market deposits                                           55              (38)
Increase in restricted cash                             (37)              (67)
Net cash (used by) / generated from
financing activities                                   (309)               246
Effect of exchange rate changes                         (18)               (4)
Net (decrease) / increase in cash
and cash equivalents                                   (455)               188
Cash and cash equivalents at
beginning of year                                      1,100               912
Cash and cash equivalents at end of
year                                                     645             1,100







Notes to the Accounts



1. Basis of preparation



This consolidated financial information has been prepared in accordance with
the Listing Rules of the Financial Services Authority.



The financial information set out in this document does not constitute
statutory accounts for easyJet plc for the two years ended 30 September 2012
but is extracted from the 2012 Annual report and accounts.



The Annual report and accounts for 2011 have been delivered to the Registrar
of Companies.



The Annual report and accounts for 2012 will be delivered to the Registrar of
Companies in due course. The auditors' report on those accounts was
unqualified and neither drew attention to any matters by way of emphasis nor
contained a statement under either section 498(2) of Companies Act 2006
(accounting records or returns inadequate or accounts not agreeing with
records and returns), or section 498(3) of Companies Act 2006 (failure to
obtain necessary information and explanations).



2. Significant judgements, estimates and critical accounting policies



The preparation of accounts in conformity with generally accepted accounting
principles requires the use of estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the accounts and the
reported amounts of income and expenses during the reporting period. Although
these estimates are based on management's best knowledge of the amount, events
or actions may mean that actual results ultimately differ from those
estimates, and these differences may be material. The estimates and the
underlying assumptions are reviewed regularly.



The following two accounting policies are considered critical accounting
policies as they require a significant amount of management judgment and the
results are material to easyJet's accounts.

Goodwill and landing rights

Goodwill and landing rights are tested for impairment at least annually.
easyJet has one cash-generating unit, being its route network. In making
this assessment, easyJet has considered the manner in which the business is
managed including the centralised nature of its operations and the ability to
open or close routes and redeploy aircraft and crew across the whole route
network.

The value in use of the cash-generating unit is determined by discounting
future cashflows to their present value. When applying this method, easyJet
relies on a number of estimates including its strategic plans, fuel prices,
exchange rates, long term economic growth rates for the principal countries in
which it operates and its pre-tax weighted average cost of capital.

Aircraft maintenance provisions

easyJet incurs liabilities for maintenance costs in respect of aircraft leased
under operating leases during the term of the lease. These arise from legal
and constructive contractual obligations relating to the condition of the
aircraft when it is returned to the lessor. To discharge these obligations,
easyJet will also normally need to carry out one heavy maintenance check on
each of the engines and the airframe during the lease term.

A charge is made in the income statement based on hours or cycles flown to
provide for the cost of these obligations. Estimates required include the
likely utilisation of the aircraft, the expected cost of the heavy maintenance
check at the time it is expected to occur, the condition of the aircraft and
the lifespan of life-limited parts.

The bases of all estimates are reviewed annually, and also when information
becomes available that is capable of causing a material change to an estimate,
such as renegotiation of end of lease return conditions, increased or
decreased utilisation, or changes in the cost of heavy maintenance services.



3. Net finance charges



                                                           2012           2011
                                                      £ million      £ million
Interest receivable and other financing income
Interest income                                            (10)            (9)
Net exchange gains on financing items                       (1)            -
                                                           (11)            (9)
Interest payable and other financing charges
Interest payable on bank loans                               20             20
Interest payable on finance lease obligations                 5              5
Other interest payable                                      -            (1)
Net exchange losses on financing items                      -              6
                                                             25             30
                                                             14             21
Other interest payable in 2011 includes a credit of £1 million reversing
previous interest accruals.





4. Tax charge



Tax on profit on ordinary activities
                                                                2012      2011
                                                           £ million £ million
Current tax
United Kingdom corporation tax                                    37         5
Foreign tax                                                       11         9
Prior year adjustments                                            -      (30)
Total current tax charge / (credit)                               48      (16)
Deferred tax
Temporary differences relating to property, plant and
equipment                                                         42        54
Other temporary differences                                      (8)       (5)
Prior year adjustments                                           (2)         7
Change in tax rate                                              (18)      (17)
Total deferred tax charge                                         14        39
                                                                  62        23
Effective tax rate                                               20%        9%



In the year ended 30 September 2011 the adjustments in respect of prior year
reflect the resolution and reassessment of various tax matters following
discussions with the UK and European tax authorities. This has resulted in the
net credits to the prior year current tax, and debits to prior year deferred
tax referred to above.



Current tax liabilities at 30 September 2012 amounted to £29 million (2011: £9
million), of which £12 million relates to years prior to 2012 which remain
open with the relevant tax authorities.



During the year ended 30 September 2012, net cash tax paid amounted to £28
million (2011: £2 million).







Tax on items recognised directly in other comprehensive
income or shareholders' equity
                                                                2012      2011
                                                           £ million £ million
(Charge) / credit to other comprehensive income
Deferred tax (charge) / credit on fair value movements of
cash flow hedges                                                 (7)         9
Credit / (charge) to shareholders' equity
Current tax credit on share-based payments                         1         -
Deferred tax credit / (charge) on share-based payments             2       (1)
                                                                   3       (1)





5. Earnings per share



Basic earnings per share has been calculated by dividing the profit for the
year by the weighted average number of shares in issue during the year after
adjusting for shares held in employee share trusts.

To calculate diluted earnings per share, the weighted average number of
ordinary shares in issue is adjusted to assume conversion of all dilutive
potential shares. Share options granted to employees where the exercise price
is less than the average market price of the Company's ordinary shares during
the year are considered to be dilutive potential shares. Where share options
are exercisable based on performance criteria and those performance criteria
have been met during the year, these options are included in the calculation
of dilutive potential shares.

Earnings per share is based on:

                                                                2012      2011
                                                           £ million £ million
Profit for the year                                              255       225
                                                                2012      2011
                                                             million   million
Weighted average number of ordinary shares used to
calculate basic earnings per share                               408       429
Weighted average number of dilutive share options                  5         4
Weighted average number of ordinary shares used to
calculate diluted earnings per share                             413       433
                                                                2012      2011
Earnings per share                                             pence     pence
Basic                                                           62.5      52.5
Diluted                                                         61.7      52.0



An ordinary dividend in respect of the year ended 30 September 2012 of £85
million (2011: ordinary dividend £46 million, special dividend £150 million)
21.5 pence per share (2011: 10.5 pence per share) is to be proposed at the
forthcoming Annual General Meeting. These accounts do not reflect this
dividend payable.



On 5 March 2012, the shares of easyJet plc were consolidated on an 11 for 12
basis. The impact of the share consolidation on the weighted average number
of shares used to calculate basic and diluted earnings per share is to reduce
it by 21 million.





6. Property, plant and equipment



                          Aircraft and           Leasehold
                                spares        improvements     Other     Total
                             £ million           £ million £ million £ million
Cost
At 01 October 2011               2,410                   8        19     2,437
Additions                          371                   7        14       392
Transfer to
intangible assets                   -                  -      (13)      (13)
Disposals                         (36)                  -       (6)      (42)
At 30 September 2012             2,745                  15        14     2,774
Depreciation
At 01 October 2011                 276                   4         8       288
Charge for the year                 93                   1         3        97
Disposals                          (1)                  -       (5)       (6)
At 30 September 2012               368                   5         6       379
Net book value
At 30 September 2012             2,377                  10         8     2,395
At 01 October 2011               2,134                   4        11     2,149



The net book value of aircraft includes £88 million (2011: £164 million)
relating to advance and option payments for future deliveries. This amount is
not depreciated.



Aircraft with a net book value of £990 million (2011: £1,206 million) were
mortgaged to lenders as loan security.



Aircraft with a net book value of £154 million (2011: £159 million) are held
under finance leases.



easyJet is contractually committed to the acquisition of 18 (2011: 37) Airbus
A320 family aircraft, with a total list price of US$1.0 billion (2011: US$1.9
billion) before escalations and discounts for delivery in the period to April
2015.





7. Reconciliation of operating profit to cash generated from operations



                                                                2012      2011
                                                           £ million £ million
Operating profit                                                 331       269
Adjustments for non-cash items:
Depreciation                                                      97        83
Loss on disposal of property, plant and equipment                  1         -
Amortisation of intangible assets                                  8         7
Share based payments                                              12         6
Changes in working capital and other items of an operating
nature:
(Increase) / decrease in trade and other receivables            (44)        27
Increase in trade and other payables                              74        87
Increase / (decrease) in provisions                               18       (5)
Decrease / (increase) in other non-current assets                  6       (9)
Decrease / (increase) in derivative financial instruments          4       (2)
Increase in non-current deferred income                         (13)      (14)
                                                                 494       449





8. Reconciliation of net cash flow to movement in net funds / (debt)



                                                              Net
                      01 October    Exchange Loan issue           30 September
                            2011 differences      costs cash flow         2012
                       £ million   £ million  £ million £ million    £ million
Cash and cash
equivalents                1,100        (18)          -     (437)          645
Money market deposits        300         (7)          -      (55)          238
                           1,400        (25)          -     (492)          883
Bank loans               (1,079)          25        (3)       305        (752)
Finance lease
obligations                (221)           7          -         9        (205)
                         (1,300)          32        (3)       314        (957)
Net funds / (debt)
(non-GAAP measure)           100           7        (3)     (178)         (74)





9. Related party transactions



The Company licences the easyJet brand from easyGroup IP Licensing Limited
("easyGroup"), a wholly owned subsidiary of easyGroup Holdings Limited, an
entity which easyJet's founder, Sir Stelios Haji-Ioannou, holds a beneficial
interest and holds 26.07% of the issued share capital of the Company.



Under the Amended Brand Licence signed in October 2010, an annual royalty of
0.25% of total revenue (fixed at £3.95 million for the year ended 30 September
2011 and £4.95 million for the year ending 30 September 2012) is payable for a
minimum term of ten years. The full term of the agreement is 50 years.



A new brand protection protocol was also agreed. easyJet must meet the costs
to protect the 'easy' and 'easyJet' brands alongside easyGroup on a ratio of
10:1 respectively up to a combined cost of £1.1 million per annum. Beyond the
first £1.1 million of costs, easyJet can commit up to an aggregate £5.5
million annually to meet brand protection costs, with easyGroup continuing to
meet its share of costs on a 10:1 ratio. easyJet must meet 100% of any brand
protection costs it wishes to incur above this limit.



A separate agreement has been entered into with Sir Stelios Haji-Ioannou ("the
Comfort Letter"), dated 9 October 2010, under which, in return for certain
non-compete obligations, easyJet makes payment of a fee of £300,000, adjusted
annually per the UK Retail Price Index, each year for 5 years (or until the
expiry of the longest subsisting restriction, whichever is later). Whilst
certain of those obligations have since expired, remaining in force are the
following:



· for 3 years from the date of the Comfort Letter, to not sell the
easyJet brand or the shares in easyGroup IP Holdings Limited to any airline
licensed in any EEA country, or Switzerland, or the owner or indirect owner of
such airline; and

· for 5 years from the date of the Comfort Letter, Sir Stelios
Haji-Ioannou shall not use his own name (or a derivative thereof) to brand an
airline flying to or from any EEA country, or Switzerland.



The Amended Brand Licence and Comfort Letter were approved by the shareholders
at a general meeting held on 10 December 2010. The amounts included in the
income statement for the year ended 30 September 2012 for these items were as
follows:



                                                                2012      2011

                                                           £ million £ million
Annual royalty                                                   5.0       4.0
Brand protection (legal fees paid through easyGroup to           1.2       0.7
third parties)
Agreement with Sir Stelios Haji-Ioannou                          0.3       0.3
                                                                 6.5       5.0



At 30 September 2012, £0.2 million (2011: £nil) of the above aggregate amount
was included in trade and other payables.

                     This information is provided by RNS
           The company news service from the London Stock Exchange

END


FR LFFVILVLALIF -0- Nov/20/2012 07:01 GMT