Ryanair Holdings plc

Okay, good morning ladies and gentlemen. My name is Michael O'Leary, the Group CEO of Ryanair Holdings. I'm joined this morning by Neil Sorin, our Group CFO. We're here to present to you the Q3 results for the Ryanair Holdings Group PLC. As you'll see this morning's results, there's a detailed results presentation, Q&A and a press release on the website and I would encourage you all, clearly you're on the ryanair.com website. Q3 has obviously been heavily influenced by the continuing COVID travel restrictions. We expected that things would continue to recover and improve through Q3. But in the week before Christmas, the emergence of the UK and South African variants led to further severe travel restrictions, particularly on flights to and from the UK. And that had an adverse impact on the Q3 numbers. I'm going to hand you over now to Neil Sauron, who will take us through the slide presentations. Thank you, Michael.

We've seen these slides, a number of these before, so I'll run through them relatively quickly. Ryanair has the lowest fares and the lowest costs of any airline. On-time performance continues to improve significantly with 96% within the quarter. Our balance sheet remains the strongest in the sector with a BBB rating from Fitch and S&P, and we improved our ESG credentials in the quarter with a strong B- rating from CDP. Importantly, we increased our Boeing order to 210 units in December, which will deliver 200 million passengers by FY26. So our financial strength and our lowest costs will make us the long-term winner. We continue to have a large footprint across Europe and we're already rolling out new bases with Treviso and Bovey announced for the summer. More to come as we increase frequencies across the likes of Naples and elsewhere. Our cost base coming into COVID was one of the strongest, the absolute strongest in Europe by a country mile. And we're improving on this and we'll continue to do so over the coming months. So the quarter itself was a difficult quarter. We saw our traffic drop by 78% to just over 8 million guests. This led to an 80% plus reduction in revenue down to just 340 million. And while we had a strong performance in our costs, down 63%, this unfortunately wasn't enough to offset the lost revenue, and we lost in excess of €300 million in the quarter. Our balance sheet, as I've already said, remains one of the strongest in the sector. We had €3.5 billion cash at the end of the quarter, and 80% of our Boeing fleet is unencumbered with a conservative book value of just over €7 billion. We're in a strong position to repay 1.5 billion debt, which matures over the next six months. And with that, I'll hand over to Michael for current developments.

So thank you, Neil. Let's touch briefly on what we see as the key current developments. Obviously, COVID-19 dominates everything. The uncertainty continues. But I think we should look to the medium term. Vaccines are coming. The rollout has been particularly successful in the UK, and we're calling on the EU to catch up. We're using this as an opportunity to lower Europe's lowest cost base, our lowest airline cost base. We're extending and renegotiating our contracts with staff, airports, aircraft and other suppliers. We're continuing to make significant and substantial environmental progress. We're now the first airline ever, we've received our first ever CDP rating of a B-, The 737 firm order extension we announced in December, it would be critical to the future of Ryanair. It allows us to cater for significant growth, but at lower costs going forward. And we do see unlimited post-COVID-19 growth opportunities. But as Neil said, our FY21 guidance is now a loss of 850 to 950 million net pre-exceptionals. Just touch briefly on some of these. Vaccinations started to roll out in the UK in December. I think we're heartened by the fact that the UK expects now to have vaccinated 50% of its population by the end of March. Europe, sadly, is lagging behind and expects only to have 10% of its population done by the end of March. That to us is not acceptable. Europe needs to get its act together and accelerate the vaccine rollout programme. Once 50% of the population is vaccinated, however, that eliminates all the high risk groups. We see no reason for a continuation of travel lockdowns or restrictions of any kind. And we would certainly hope that that would pave the way for a reasonable recovery of traffic through the summer of 2021 and into the winter of 2021 as well. Environmental terms, excuse me. As I said, we for the first time ever participated in the CDP environmental survey in 2020. We received a very strong first-time B-minus climate protection score. That's one of the highest scores of any airline in the world. We're particularly pleased that we received an A rating for our environmental corporate governance policies, and we're committed to improving those scores over the coming years. Critical to that environmental performance in the next couple of years will be the addition or taking delivery of the new Boeing 737 Game Changer aircraft with 4% more seats, 16% lower fuel burn. and a dramatic 40% reduction in noise. We've already covered in some detail for shareholders the new Boeing 737, the game-changer aircraft, and I keep going back to the key fundamentals here. We've extended the order, it's now a firm order, it's risen from 135 to 210 aircraft. We've done so thanks to a modest additional discount provided to us by Boeing. And it means that we can securely look to a rollout of additional capacity over the next five years of lower cost aircraft with 4% more seats that burn 16% less fuel on a perceived basis going forward. These will dramatically improve our efficiency, significantly lower our costs, and make us a greener, cleaner airline, putting us well on track, not just to achieve our environmental targets by 2030, but also giving us the capacity to grow to 200 million passengers a year by March 2026. It's impossible at this point in time to know how that growth will evolve over the next 12 months. We're operating now in a range that traffic for this year will be somewhere between 26 and 30 million passengers. We do expect to see a substantial recovery into FY22. A lot of that will be dependent upon the speed and success of the rollout of the vaccine programs, particularly in the UK, which is one of our biggest markets, but also across the other larger European markets, particularly those like Spain, Italy, Portugal and Greece who depend on tourism. I think at this point in time, we're looking, depending on the timing of that recovery, carrying between 80 to 120 million passengers over the next 12 months to March 2022. It's impossible to be any more accurate. And those numbers are also subject to change. But there are very significant growth opportunities post COVID-19. Eurocontrol has already predicted more airline failures in 2021. There are very steep and significant structural capacity cuts already announced by the European Airlines. Many of our competitors will have significant impairment on their balance sheets. And we are already seeing large traffic declines at major European airports leading to much more aggressive and much more innovative recovery growth incentive schemes. And we hope to be able to participate in those. Most notably, we've negotiated a four-year extension of our 10-year low-cost agreement at London Stansted Airport. And we're also pleased to have been able to secure EasyJet's Stansted slots, our Stansted slots for their seven base aircraft when they closed last the Stansted base this winter. That again gives us lots of room for growth and expansion in London, which will be one of the key markets in Europe, but also at one of London's lowest cost airports when most of our competitors will be operating at higher cost airports in Gatwick and Heathrow. And what's key to all of this is that our low cost 737 aircraft will facilitate significant growth and we expect that growth to start from Q1 of FY2022. I have nothing else to add to that, Neil. Anything else on your side? No, I think that's a fair synopsis. Okay, so we'll then start into the Q&A session. Thank you. Thank you.