VOTE AGAINST Board Recommendation to
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Board Recommendation to VOTE AGAINST All the Proposed Resolutions 27 APRIL 2020
WHY ARE WE HERE?
Resolutions Requisitioned1 by Sir Stelios (‘SHI’) Forcing Board to terminate the Airbus contract
To remove four Directors: In SHI’s own words:
“…calling the vote to remove 4 directors is a proxy for voting to
1 •John Barton, Chairman cancel the Airbus contract."
SHI’S RESPONSE TO JOHN BARTON’S INTERVIEW IN SUNDAY TIMES (18
2 •Johan Lundgren, CEO APR 2020)
“I have called for this vote not for the removal of 4
3 •Andrew Findlay, CFO directors from the board of easyJet but because it is
the only method a shareholder has to require the
remaining 7 directors to serve notice of termination to
4 •Andreas Bierwirth, Independent NED Airbus…"
SHI’S STATEMENT FOR NOTICE OF GENERAL MEETING (23 APR 2020)
Cancelling the Airbus contract is not in the best interests of
the Company or shareholders as a whole
Your Board recommends shareholders VOTE AGAINST ALL resolutions
2 1. Through nominee accounts controlled by easyGroup.VOTE AGAINST all RESOLUTIONS
Vote against and allow the Company to remain focused on ensuring easyJet emerges from
Covid-19 as a sustainable and successful business
3value creation
Over 640% in Total Shareholder Returns
• Since SHI first opposed fleet expansion in 2008, until onset of Covid-19, easyJet has delivered >640% TSR:
• The Board’s strategy and Airbus contract have built sustainable value creation for shareholders
• This includes c.£1.8bn in dividends
4 Source: Thomson Reuters Datastream. Total Shareholder Returns defined as share price return plus dividends reinvested. Index includes Ryanair, IAG, Finnair, Lufthansa, Air-France KLM,
Norwegian Air, SAS and excludes easyJet and Wizz Air (2015 IPO).fleet flexibility with airbus contract
Why we work with Airbus Updated fleet plan
390 383 Prior Max
• As a customer of scale, easyJet is able to achieve
significant purchase benefits reducing cost of 370 365
ownership and providing competitive advantage 354 353
352
New Plan Max
• The strong partnership gives easyJet significant 350
Total easyJet fleet
337 342 338
flexibility over its order book 332
330
335
• The most recent amendment allowed us to defer 330
delivery of 24 aircraft in response to the Covid-19 310
309
304
crisis Prior Min
302
286
• Along with cutting other projects, this allows us to 290
281
New Plan Min
reduce capex by c£1bn over 3 years
270
• easyJet selected Airbus as a preferred supplier in Current fleet 2020 2021 2022 2023
2002 when SHI was Chairman
5 1. 335 aircraft in 2020 new plan minimum is subject to the sale of six old aircraft
2. Current fleet is as @ 16 April 2020Cost efficiency
Cost Advantage by Aircraft Type1 Driving Down Operating Costs
• Most low-cost airlines have a single fleet type – to
keep costs low, especially maintenance and
operations
• All future easyJet deliveries will have next
generation neo engines, further reducing unit
costs by c.20% vs. current fleet
• This drives a c.1% saving in costs2 per year, and is
crucial as low-cost operators move to 197-239 seat
aircraft
• Most new aircraft are replacing older aircraft
156 seats 180 seats 186 seats 235 seats (16-18 yrs), which incur high maintenance costs
and greater fuel burn – key environmental
consideration
6 1. Fuel price based on the average of the forward curve over 24 months as of 20 April 2020 ($355/tonne). 2. Cost . On a like-for-like basis; assumes FY19 profitability, adjusted to a fuel price based
on the average of the forward curve over 24 months as 20 April 2020 ($355/tonne) and a cost of capital of 5.8%.Cancelling airbus contract – costly mistake
1 NO NEED TO TERMINATE
AIRBUS CONTRACT
> Already able to flex the fleet down
> Reduced capex by c£1bn over 3 years (incl.cuts to other projects)
> To modernise the fleet
2 WE REQUIRE
REPLACEMENT AIRCRAFT
> To reduce carbon footprint
> To lower costs
3 RISK TO COST OF FLYING
EXISTING FLEET
> Significant increase in operating costs
> Access to technical support, warranties, maintenance at risk
4 TERMINATION COSTS > Cancelling the contract would be costly – highly material termination costs
7effective response to covid-19
Cost saving measures Operating cost cash burn (per week)
Significant reduction in our other operating costs has been Direct operating costs
achieved through management actions including: Other operating costs
c.£120m - £130m
• Crew and head office furlough leave, voluntary redundancy and Hedges
pay reduction, recruitment freeze Interest and tax
• Stopping discretionary spend on non-mandatory training, travel,
contractors & consultancy etc
• Stopping non-essential project opex & IT expenditure
• No selling and marketing expenditure
• Non-essential maintenance deferred
Cash flow deferrals have also been achieved through: c.£30m - £40m
• Payment term extensions negotiated with many of our major
suppliers including airports, ground handlers and fuel providers
• All government tax payment schemes have been explored
including ‘time to pay’ arrangements and reclaiming corporation Normal flying Post
tax payment on account programme management
action
8Board has secured Additional cash funding
Cash position as at 31 March
£1.4bn
£400m RCF – Drawn - Secured
Additional Cash
Funding
£600m CCFF – Issued – Unsecured
£400m Term Loan – Agreed – Secured
£1.9bn
£400m-£550m Sale & Leasebacks
Notional cash position today Options to raise further liquidity and funding:
• c.50% of easyJet’s fleet remains unencumbered
c.£3.3bn • 24 operating leases due for renewal
9GOVERNANCE • The Board is committed to the highest standards of corporate governance and continues to focus on providing effective leadership and oversight of the Group • Covid-19 has had an unprecedented impact on the airline sector. The Board has been focused on protecting the interests of its shareholders as a whole and its wider stakeholders by ensuring the Company has sufficient liquidity and access to funding to manage through the Covid-19 crisis • As a result of decisive and urgent action taken by the Board, the Company has sufficient liquidity for a prolonged grounding and to meet its existing obligations • Removing four directors from the Board, including the Chairman, CEO, and CFO, would be a damaging and destabilising action at this critical time when their knowledge and leadership are required 10
key members of the board
•John Barton, Chairman •Johan Lundgren, CEO
• >23 years chairing major UK quoted companies • >30 years’ experience in the travel industry
• Deep financial expertise • Experienced leader whose expertise is critical at this time
• Highly detailed knowledge and understanding of easyJet business • Designed and implemented easyJet’s key strategic initiatives
• Provides consistent and stable leadership to the Board • Critical to easyJet’s future holiday strategy
• Driving innovation in data initiatives and delivering future ancillary
revenue streams
•Andrew Findlay, CFO •Andreas Bierwirth, Independent NED
• Fundamental to securing easyJet’s liquidity • Experienced in crisis management, including at other European airlines
• Leading negotiations with regulators and governments • Provides highly valuable European perspective to Board deliberations
• In-depth expertise in the business’ structure and operations • Crucial to Brexit preparations
• Strong relationships with ratings agencies and other counterparties • Considerable broader airline / pilot’s experience brought to the Safety
• Delivered easyJet’s £100m per year cost reduction programme Committee
(since 2015)
Removing 4 key directors would be extremely damaging at this critical time.
Your Board needs to be focused on making sure easyJet survives
11VOTe AGAINST all RESOLUTIONS
Show your support for your Board by VOTING AGAINST ALL these resolutions Their leadership
is vital to easyJet’s survival
12TIMETABLE AND NEXT STEPS
How to Vote Timetable
ONLINE by 10am on Action Time and/or date
Wednesday, 20 May 2020 at Date of receipt of 8 April 2020 and 17 April 2020
valid requisitions
www.sharevote.co.uk
Date of notice of 27 April 2020
OR requisitioned General Meeting
Complete a Form of Proxy and Latest time and date for 10.00 a.m. on Wednesday, 20
return to Equiniti receipt of Forms of May 2020
Proxy from Shareholders
OR
Time and date of 10.00 a.m. on Friday, 22 May
Through the CREST voting requisitioned General Meeting 2020
service
Your vote is of CRITICAL IMPORTANCE and EVERY VOTE WILL COUNT
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