EasyJet 2015 Annual Report Download - page 18

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14 easyJet plc Annual report and accounts 2015
Chief Executive’s review continued
Agreement for 36 additional aircraft
Due to our continued robust trading, high demand for easyJet
flights and the number of profitable opportunities we see in
our markets, we are pleased to have secured an agreement with
Airbus to take delivery of an additional 36 A320 aircraft between
2018 and 2021, all in the 186 seat configuration. These aircraft will
offer increased flexibility in fleet planning, including the faster
replacement of some of our A319 aircraft, lower overall unit costs
and ensure easyJet can continue to grow past 2019 to support
increasing total shareholder return.
easyJet is exercising rights to 30 next generation A320 NEOs
under the existing framework agreement signed in 2013(3). The
additional six aircraft are current generation A320 added to that
agreement. We have secured an additional 30 A320 NEO
purchase rights to replace those we are exercising. Funding is
available. easyJet’s balance sheet and cash generation is strong
with gearing at 30 September at 14%, marginally below the
Board’s target of 15% – 30%.
5CULTURE, PEOPLE AND PLATFORM
easyJet is passionate about its people and we believe that it is
what sets us apart. In particular we believe that our customer-
facing employees are the best in the industry and contribute
significantly to the positive experience that our passengers enjoy,
which in turn drives their loyalty and repeat business.
It is our people who continue to deliver the strategy for the
business and will drive future success. Internally we continue to
focus on recruiting the right people, helping them to understand
the Company’s values and their role in the business and then
giving them the tools to develop a high-performance culture.
Our people are truly exceptional. They are passionate and
driven to achieving a winning strategy. They have responded
to recent tragic events with energy, care for our customers and
unbelievable stamina. We couldn’t achieve these results without
this orange spirit.
In line with the rest of the business we recruited during the year
to help support our growth, adding over 290 pilots and 1,300
cabin crew, as well as 390 people within the management,
administration, engineering and maintenance departments.
Retention rates remain good with employee turnover of
6.6% (2014: 6.7%).
DELIVERING SHAREHOLDER RETURNS
Our high revenue growth and good cost control have driven
strong profit growth and this year we have recorded record
profit for the fifth consecutive year. Our cash generation is also
strong. We generated £895 million in operating cash, before
investing £532 million, principally in the acquisition of 20 aircraft.
easyJet ended the year with net cash of £435 million and
gearing of 14%, marginally below the bottom end of the
Board’s target range.
Return on capital employed increased to 22.2% from 20.5% last
year, as the increase in profit more than made up for the increase
in fleet. As we embark on a new phase of fleet acquisition we
expect this to reduce slightly in the next few years, whilst
remaining among the higher performers in the market.
As we look forward, we expect that our ability to grow revenue
and the renewed focus on cost will deliver strong earnings
momentum and significant returns to shareholders.
Fleet as at 30 September 2015:
Owned
Operating
leases
Finance
leases Total % of fleet
Changes
in year
Future
committed
deliveries at 16
November
2015
Unexercised
purchase
rights
A319 93 49 6 148 61% (5) – –
A320 70 18 5 93 39% 20 56 –
A320neo – – – –– 130 100
163 67 11 241 15 186 100