Wizz Air Holdings Plc

Good day and thank you for standing by. Welcome to the Wizz Air Q1 results webcast. At this time, all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Joseph Varady, please go ahead.

Good morning, everyone. Thank you for coming to this meeting. And I also welcome everyone online. But this is to report the first quarter of the current financial year. If you could just move the slide, please. So we delivered 30% more capacity in the first quarter versus pre-pandemic levels. Unit revenue was gradually building up month on month. Clearly, it was a difficult quarter overall, taking all events into account. Let's not forget that that was the time when the company had to reallocate a significant portion of its capacity, originally designated for serving the Ukrainian and Russian markets across the rest of the network. That took some time to implement it. It was genuinely a big ramp-up period for the business. That's a period when we were ramping up utilization to deliver 30% more ASKs in this period. Also, this is a period when we started experiencing significant input cost rises like the fuel spike. And also towards the end of the period, we started seeing some significant disruptions coming through the underperformance of the supply chain. So kind of a difficult period. The Q1 ticket revenue was minus 12%, while NC revenues continue to grow significantly in the magnitude of 14%. Fewer costs basically doubled down in this period relative to fiscal 20%. we put in place some insurance hedges for the current financial year and started systematic fuel hedges for the next financial year. As of fiscal 24 right now, we are hedged on 20% of our fuel requirements in the next financial year. Ex-fuel unit cost came in at 2.62 euro cents per ASK, including 0.22 euro cents for flight disruptions. As I said, we started encountering significant events on this field, resulting in a number of flight cancellations and obviously significant compensation costs to passengers. We ended up the quarter with 285 million euros of operating loss. Net loss was 453 million. The difference is majorly the idealized FX exposure that didn't affect the cash performance of the business, but affected the The company remained in a very strong liquidity position at 1.6 billion euros at the end of the period, maintaining investment-grade credit as a result. We believe that we have a continuous revenue momentum and we are expecting a significant operating profit to be delivered in the current quarter of the financial year. So moving on with the slides, so you can see the key business metrics here. Obviously passenger numbers went up very significantly four times the numbers of the same period in the previous financial year. We continue to expand our operating footprint in terms of operating more aircraft, 16 more aircraft across 26 more airports and two more countries. We consolidated some of our base operations. A number of bases we opened up during the pandemic got consolidated as a result. We have been receiving a number of awards, but clearly this period was marking a significant expansion and diversification of our network footprint. Moving on to the next slide, this is an overview of market shares in our core regions in Central and Eastern Europe. Overall, we managed to be at 5% market share gain in this period. So our overall market share in Central and Eastern Europe went up from 18% pre-pandemic levels to 23% in the quarter. And you can see the overview market by market. In most of our countries, we have been gaining market share positions. And in the balance of the countries, we have been holding market share positions. And with that note, I would like to hand it over to Jörg.

Thank you, Joseph. So good morning also from my side. I think the financials have been released a few weeks ago, so I guess no surprises here. Numbers are consistent. So from a revenue point of view, we'll see revenue quadrupled indeed versus the base period. Obviously not a great point of reference, but still a very strong revenue performance. It's 17% up versus the same quarter pre-COVID. From a profit point of view, there's really three factors coming into play. So clearly, we've mentioned the RASC. We'll reference the CASC numbers in a minute, which are 40% higher, mainly driven behind the high input cost. And clearly, from a reported point of view, we were affected by the strength of the dollar. The balance sheet rate at the end of June was 1.044, and the only reason why I mention that is because today it's somewhere below 1.02, so whereas we have seen a significant loss in the first quarter, we may continue to see in the current quarter another 100 million or so of these unrealized FX losses should the euro be at the same position versus the dollar at the end of September. Again, these are not cash losses. These are purely translational effects into the P&L. And once the market, hopefully at some point in time, moves to more of a risk-con mood, these will start reverting as well. Cash position, I think a very strong performance on cash, growing another 200 million versus the position at the end of the year. Now, moving to casks. So if you look at casks, so as mentioned, I mean, the cask for Q1 increased in total 40%. That's obviously extremely considerable. The key driver of that was the doubling almost of the fuel cask. The average fuel price for the courier was $1,240 per barrel. So just to put it in perspective for you, what's driving these numbers? If you look at the ex-fuel cask, it was at $2.62. As Joseph mentioned, 0.22 euro cents per barrel. was driven behind disruption. So if you strip those out, you basically get to a Q1, let's say, pre-abnormal disruption cost of around 2.40 euro cents. It's still 0.13 euro cents higher than where we used to be pre-COVID. But if you look at the first quarter, we operated around 10% lower utilization of our assets of our, let's say, of our crew than we did pre-COVID. And that's really the key difference between where we are or where we were pre-COVID, so the disruption and the utilization versus where we are today. So these things, as you'll see further on the presentation, they will be normalizing, they are normalizing as we speak, and obviously we should trade out of those upcharges as we move week on week. Looking at cash, cash is moving to $1.6 billion. Clearly, we keep operating with the same principles on the network, especially also in the first quarter, focusing very much on profitability. We'll talk a little bit more where we see the risk increases, etc., but it's coming broad-based across the network, so we're able to deploy our network as we have planned. laid it out and we don't need to make compromises on our strategy because the cash performance comes broadly across the network. The company is investment graded with Fish and Moody's and obviously the liquidity growth this quarter got a boost from the growth of the company at 30% helping both the payables and the unflown revenue. which is actually what you see in the next slide in page 8. So you can see here the bridge on cash. You see the outflow on the operations, which includes obviously the lease payments, which is kind of a fixed cost, which you have in any case, which included the disruption cost. You can see a very strong inflow from unflown revenue from payables and a small 20 million outflow linked to some quarterly phasing on pre-delivery payments. So all in all, strong cash performances. With this on unslown revenue, the booking window used to be around 20% lower than pre-COVID. So when we reported last at full year, today it's around 10% lower versus pre-COVID window. So we still have 10 points, 10% to go to fully close the gap with the booking window pre-COVID. So there's more upside potential here. Actually, it's quite a good performance if you think about it, given the amount of news there was on disruptions given that some countries during this period, right, end June, were probably still peaking on COVID, and we're kind of coming out of that. So the industry is normalizing on disruptions. Infection levels or cases, there's less detrimental impact from a hospitalization point of view already, but obviously people may not travel if they have been infected. So all of that, we're trading out of it. It's a very different situation to be in, going forward than where we were last quarter and surely where we were last year, where we were going into August and September in a peak of a health crisis with restrictions as a consequence. So a very different set of circumstances looking at summer. From a revenue performance, you can see that we had an excellent performance again on ancillary, growing €4 per passenger. We're on slide 9 here. That is €1 ahead of our targets. We want to grow ancillary €1 per passenger per annum, and that obviously would be €3 per passenger increase versus F20, we're at €4 per passenger increase. We continue to see that strength carry through for summer. Ticket fares were down around 12%, as we've mentioned. Again, this is where we have seen the sequential improvements with very tough numbers in April and May as we ramped up, as we were seeing the impact of the recasting of the network as a consequence of the war in Russia and Ukraine, between Russia and Ukraine. But if you look now forward, we continue to see that strength in ancillary for summer, and we see obviously the ticket fares reverting. um becoming double-digit growth on ticket fares and this is giving us the confidence to guide q1 at a rough increase of more than 10 percent just just above 10 percent with july probably going to be around 11 percent uh rusk increase and that is on a 30 percent growth that's that's a very strong number you see similar numbers reported by some other players in the industry, but of much lower growth or sometimes even of declines. So that basically means that not only on our core markets, but also on the expansion markets, we're able to see those very strong fair increases. And that just speaks to the fact that, you know, there is strong underlying demand and strong maturity where we have expanded. And with that, handing it back to Joseph.