Wizz Air Holdings Plc

Good day and thank you for standing by. Welcome to the Wizz Air Holdings PLC H1 F23 results conference call. 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 1 1 on your telephone. You will then hear an automatic message advising your hand is raised. Please be advised that today's conference is being recorded.

would now like to hand the conference over to your speaker today with their ceo joseph paradi please go ahead thank you very much uh welcome everyone um you ladies and gentlemen who are on the ground and also those who joined this conference over video first of all let me introduce uh Jan Malin to you, new CFO of the company. So this is reporting the first half of financial year 23. The financial year started on 1st of April. Let me just take you through the key highlights first. In the last quarter, the summer quarter revenue was up by 40% versus the same period with pandemic, fiscal 20. And overall, H1 was up 30% versus the comparable period prior to the pandemic. So it's not only that we recovered from the pandemic, but we delivered significant growth of the business. probably for the first time in our history, unit revenue also grew despite a very high capacity growth by 11% in Q2. And that compares to actually minus 10% in the first quarter of the financial year. You recall that in the first quarter, we were really pushing hard in terms of COVID recovery on the one hand and adding capacity to especially our new market activities. If it's that performance, in the second quarter was 374 million positive despite higher, significantly higher input costs and with that the H1 EBITDA came out as 218 million Euros. Obviously we got hit hard by rising fuel costs. Our fuel cost went up 84%. versus the same period pre-pandemic. You recall that we were quite light on hedges relative to our competitors and the market, so we got disproportionately hit by the rising fuel price. Destruction was another phenomenon flowing through this period, putting significant cost pressure on the business as a result. Ex-fuel costs went up 18% largely driven by destruction costs dealing with the underperformance of the supply chain and also that affected our ability to operate our completion rate and made significant financial damage to the business. At the same time, liquidity improved in the period and closed the period with 1.63 billion euros of cash on hand resulting from the strong summer operation Fitch reaffirmed our investment grade credit. I think that's great news given the state of the industry and the challenges that we have been encountering, especially in the recent period. So we are very pleased with that outcome. And the good news is that we continue to access very low-cost capital when it comes to aircraft financing. You recall that we take quite significant volume of aircraft We are subjected to aircraft financing and we are still seeing very high demand for our assets based on our credit that we are bringing to the party. When you look at the key business metrics, our fleet grew 17 percent through 168 aircraft. versus the previous financial year, obviously passenger number is up three times, given that we are out of the pandemic due to the very strong ramp up and growth, additional growth was what we believed. So clearly coming out of the pandemic, this became a more robust, larger business with bigger impact on the market, certainly on our markets. So demonstrating that you look at the market share positions of the airline. On a total fee basis, our market share went up from 17% to 23% compared to pre-pandemic level performance. And you can see that market share growth has been fairly consistent across our incumbent market. And we managed to add new markets to the franchise for Albania. has been a very successful market acquisition. But also if you look at Italy, we tripled our presence in Italy over the last two years, taking advantage of the COVID situation and some of the market turbulence in the country. But fairly consistently, we have been growing our impact on every one of our markets. And with that, let me hand it over to Jan and I will take it back up to him.

Thank you, Josef. Good morning and thank you for the opportunity to introduce myself. My name is Jan Malen and I joined as Chief Financial Officer on October 1st. I'd like to thank this audience for the opportunity to present and I also want to thank my predecessor, Jurek, for his service to Wizz Air. We saw strong performance across several indicators this summer, with revenue coming in at $2.2 billion for the first half of the year, two and a half times for the same period last year, and 31% higher than the same period pre-COVID. This was generated by revenue per available seat kilometer of $4.48 for the half year, 32% higher than last year, and 2% higher than pre-COVID levels. Driven by the dramatic improvement in second quarter RASC, up 11%, versus minus 10% in Q1, both measured against pre-COVID levels. EBITDA came in at $218 million for the half-year, 33% higher than last year. The half-year EBITDA results were helped by Q2 EBITDA of $373.7 million, which was more than double last year's Q2 figure of $182 million. We reported a net loss for the half-year, and again, a large part of that was due to foreign exchange losses of $269 million, of which $285 was unrealized. given by a strengthening dollar. Cost per available seat kilometer was higher than pre-COVID levels, and this is attributable to dramatically higher fuel costs, as well as continued disruptions in the second quarter, although at a reduced level versus what we reported in the June results. Ex-fuel costs decreased compared to the same period last year, and we expect that trend to continue as we have stabilized the operations and, are no longer incurring the same level of expensive disruption costs as we gradually return to historical utilization levels by the end of this fiscal year. In order to get our cost structure back in line with F20, the two focused areas we have as a company, aside from relentlessly driving our low-cost culture, are one, reducing disruptions to within target KPIs, which as you can see in the other expense line increased to 0.1 cents versus at 20. And two, returning to historical levels of utilization, which means higher ASKs while maintaining almost the same fixed cost, which will benefit a number of these line items, crew costs, airport costs, on route charges, maintenance, depreciation costs, and overhead costs. Recruiting is strong during the period. As cash grew from around 1.4 billion to 1.6 billion euro, despite the usual unflown revenue unwind that happens in the summer. The drivers for this almost 250 million euro cash increase in the first half was a strong business performance in Q2, including improvements in working capital as we scaled the business. We also had modest returns of pre-delivery payments, which generated a small inflow in the first half. When looking at our revenue composition, here you can see the breakdown of ticket revenue and ancillary revenue. With ancillary 18% higher than pre-COVID levels on a per passenger basis, at 38 euro per passenger, or around 60 euros per pack, which is well ahead of our one euro per passenger per annum growth target. Ticket revenue per passenger has also exceeded pre-COVID levels and notably has rebounded 35% when compared to last year in the same period. We continue to see opportunity in both categories for Upside. Now back to Joseph. Thank you.