easyJet: Pre-close Statement

easyJet PLC

21 September 2011

easyJet pre-close statement for the year ended 30 September 2011

Current trading

easyJet's commercial performance continues to be robust across the network, with particular strength on city routes used by business and short break leisure travellers. As a result, the increase in total revenue per seat at constant currency for the second half of the year is expected to be towards the upper end of our expectations at around 6% and for the full year will be around 3%.

easyJet's continued focus on cost control for the year has also delivered in line with expectations with good performance in ground handling, aircraft maintenance and disruption related costs as a result of improved operational robustness. easyJet delivered an On Time Performance (OTP) on arrivals of 80% in July and 85% in August with improvements across the network.

As a result, the Board's expectation for profit before tax for the year ending 30 September 2011 is now between £240 million and £250 million compared with our previous expectation of £200 million to £230 million. This equates to a ROCE of approximately 12%. Net cash flow from operations improved and net cash at the year end is expected to be between £50 million and £100 million with gearing of approximately 30%.

Dividend and return of capital

In line with the policy announced in November 2010, the Board of easyJet expects to pay an ordinary dividend of 5 times cover of approximately £40 million (or 9 pence per share) for the year ending 30 September 2011.

The Board said at the time of easyJet's third Quarter IMS in July 2011, that it would look again at the end of the year at our balance sheet, trading outlook and cash position to determine whether or not there should be a return in excess of the targeted dividend policy of 5 times cover.

In light of the strong performance of the business over the past 12 months, management's current medium term expectations for easyJet's financial potential and a prudent approach to maintaining balance sheet strength, the Board expects to recommend a one-off return of capital likely to be structured as a special dividend of £150 million.

Taken together this provides an estimated total cash return to shareholders for the year of approximately £190 million or 44 pence per share. The annual dividend and the one-off return will, in the absence of unforeseen circumstances, be declared with our full year results in November and paid in the early part of calendar year 2012.

Forward bookings

A third of seats in the first quarter of the year ending 30 September 2012 are now booked, a similar level to the prior year, and total revenue per seat continues to show improvement versus the prior year albeit at a lower rate of growth than the strong fourth quarter of F'11.

Hedging and costs

easyJet's current hedging position is set out below:

It is estimated that at current fuel and exchange rates¹ easyJet's 2012 fuel bill will increase by approximately £220 million compared to the prior year. Additionally, the introduction of the Emissions Trading Scheme; and higher costs at regulated airports in Spain, Italy and the UK are also expected to negatively impact cost performance in F'12.

Commenting on easyJet's pre-close statement, Carolyn McCall, easyJet's Chief Executive said:

"easyJet's strong operational and record financial performance this year reflects the successful implementation of our strategy. Despite an increasingly difficult environment for airlines, the strength of easyJet's performance means that it is able to return approximately £190 million to shareholders demonstrating the resilience of the model, and that it is well-positioned to continue its success across Europe".