EasyJet 2012 Annual Report Download - page 11

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Performance during the year
This has been a strong performance and I would like to thank all the
easyJet team for their hard work in delivering this.
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:
A 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.
A 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.
A 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. 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.
Chief Executive’s introduction
Business review
easyJet plc
Annual report and accounts 2012 09
Our cause is to make travel easy
and affordable.
Carolyn McCall OBE
Chief Executive
£317m
Profit before tax
(2011: £248m) +27.9%
21.5 pence per share
Proposed ordinary dividend
(2011: 10.5 pence per share) +104.8%