Ryanair Holdings plc

All right, so good morning, ladies and gentlemen. Welcome to the Ryanair full year results. I'm Michael O'Leary, the group CEO, and I'm joined this morning by Neil Sauron, the group CFO. Earlier this morning, we published the full year results for the last 12 months, ended 31 March 2024. In that, we recorded a full year profit after tax growth of 34% to an after tax profit of 1.92 billion euros as traffic grew 9% to 184 million passengers, which is 23% more than our pre-COVID traffic. The highlights for the last 12 months start off with the traffic growth of 9% to 184 million passengers. It would have been slightly higher, but for the Boeing delivery delays. The biggest challenge was our fuel bill rose by 32%, an increase of 1.25 billion euros to just over 5 billion. And yet we were still able to report an increase in profitability. Our ESG ratings were upgraded. We're an MSCI A-rated performance. Climate Disclosure Project was rated as an A-, and we have a very strong 85% customer satisfaction score achieved over the last 12 months. We've taken delivery of 146 new Boeing 737 Game Changer aircraft. It brings the fleet to just under 600 aircraft at the end of March. It would again have been slightly higher, but we're still so struggling with Boeing delivery delays. With these new aircraft, we've opened five new bases and over 200 new routes for summer 2024 as we continue to stimulate significant growth across Europe. The big news on costs is that for the full year, March 25, fuel is over 70% hedged at just under $80 per barrel, locking in a saving thus far on hedge fuel of €450 million for the full year. We declared and made an interim dividend of €400 million, payable in calendar 2024, and we would expect to do something similar again in 2025. And again, we point back to the key, which is our 300 Boeing 737 MAX 10 aircraft orders, the first of which we believe will deliver in the spring of 2027, underpins our growth strategy to 300 million passengers by the early 2030s. Just to touch briefly on fleet, Boeing delivery delays have been one of the bigger challenges this year. We expect to be operating about 158 game changers by the end of July. That would be about 23 aircraft short of our contracted deliveries. There remains a risk that those Boeing deliveries could slip further, but we think it's unlikely. We're in close contact with the management team led by Stephanie Pope in Seattle, who we believe is doing a good job. But these delays will mean that more of the traffic growth in FY25 will occur in the lower yielding second half of the year than we'd originally planned. In order to maximise the deliveries, we're going to continue to take deliveries of these game changer aircraft through the peak months of July, August and September. But we won't be able to put those aircraft on sale because we have no certainty on the delivery dates yet. Lauda has also recently extended three, obviously 320 leases from 2024 out to 2028, but without any increase in the lease cost, which is important. Travel demand across Europe in summer 24 is strong. Despite Boeing delivery delays, we will still operate our largest ever summer schedule, as I said, with over 200 new routes, five new bases. We still see in summer 2024 short haul EU capacity is constrained as competitor airlines ground A320 aircraft for Pratt & Whitney engine repairs. The OEMs are continuing to struggle to recover their delivery backlogs and therefore we urge all passengers to book early for summer 2024 because we think close in seats and fares will be higher than in 2023. We expect European airline consolidation to continue, with the takeover of ETA and Air Europa in Spain progressing, and the likely sale of TAP in Portugal next. This consolidation, in addition to the A320 fleet groundings, which we think will constrain capacity for the next two or three years, means that Ryanair is growing in a marketplace for the foreseeable future, where we should have reasonably benign trading conditions, and competitors' capacity constraint. That should underpin reasonable fair momentum for the next two or three summers. We'll deal with the detail of the results in the Q&A. Neil will deal with the detail of the results. I just want to push on to shareholder returns. You'll remember we set out a strategy recovering out of COVID that we would shepherd our cash resources very carefully. The board established a number of priorities, one of which was to restore our people's pay and agree pay increases with all of our union partners and people. That's now been done. We also said that we would prioritize the pay down of debt, particularly in a rising interest rate environment. We're halfway through that program to repay all of our bond debt. We have two more bond repayments, one in 2025 and one in 2026. And then the group will be entirely debt free. And we would also use internally generated cash funds to fund aircraft capex. Again, we think that's been done. Thereafter, our policy is to maintain a strong balance sheet, but where we think we have spare cash to return that to shareholders. I'm pleased this morning to announce that the board has decided, given the current surplus cash position, they've approved a €700 million share buyback now. It was formally launched later this week. And this buyback, when completed, will have increased the funds that Ryanair has returned to shareholders since 2008 to just under €8 billion. In terms of our outlook, Reiner expects to grow in the full year, March 25, by 8%. We're in a range of between 198 and 200 million passengers. Originally, that target was 205 million passengers, but with Boeing delivery delays, we've had to cut that back. Our cost advantage over all airline competitors in Europe continues to widen, even though we expect in FY25 a very modest rise in unit costs, ex-fuel unit costs, due to annualised pay increases, higher handling and ATC fees and the impact of the game-changer delivery delays on crewing ratios and unit costs, although much of that would be substantially offset by our fuel hedge savings and our rising interest rate income. With the EU shortfall capacity constrained, we see summer 2024 demand in positive territory. Forward bookings are strong. Bookings are trending ahead of last year, although the pricing has been a little softer than we had expected. Some of that in Q1 is due to the move of the first half of Easter moved into March, which was Q4 of last year. And so we only have half of April in Q1. But nevertheless, in recent weeks, we've seen other airlines and Ryanair respond to slightly weaker demand by increasing the amount of promotional fares we sell in order to hit our volume and our load factor objectives. And that will continue. We still see reasonable strength in July and August bookings, the peak summer months. But April, May and June are a little bit weaker than we had originally expected. We remain cautiously optimistic that peak summer 2024, therefore, affairs will be flat to modestly ahead of summer 2023. Q4 2025 will not benefit from an early Easter as it did in FY24. It's therefore far too early to be able to provide any sensible or accurate full year 2025 profit after tax guidance. All we can say at this stage is the final outcome will be heavily dependent upon avoiding adverse events during 2025, such as wars in Ukraine and the Middle East. extensive ATC disruptions as we suffered this time last year, or further Boeing delivery delays. And with that, I'll hand over to Neil to take us through the slide presentation. Neil?

Thank you very much, Michael. Ryanair, as we all know, has the lowest fares and lowest costs of any airline in Europe. We're targeting up to 200 million passengers this year, so an 8% increase subject to Boeing delays. We continue to be number one for on-time performance and reliability, and Sustainalytics have retained Ryanair as their number one airline for ESG in Europe. Our growth over the next 10 years will be underpinned by our 300 max 10 order, and our financial strength and our lowest cost will facilitate us to fund this and to be the long-term winner in our market. We're number one in Europe for coverage and choice this summer, operating our largest ever summer schedule, over 95 bases, 230 plus airports with a fleet of 600 aircraft. And this, coupled with our order book, sees us grow to 300 million passengers by FY34. This is a very important slide. It shows that the cost advantage that Ryanair has in place over everybody else continues to grow and to continue to widen as we supplement this further with our increasing interest income. At a time when our competitors are raising expensive bonds in the market, taking on expensive new leases due to capacity constraints, Ryanair is seeing huge cost discipline. And I think this is a key advantage that we enjoy over everybody else within our market. On the full year itself, very pleased with a 9% increase in traffic to just under 184 million passengers at a slightly higher load factor of 94%. Revenues increased strongly by 25%, 13.4 billion, driven by a 21% increase in average fare and a solid performance on ancillary revenue. We saw a 24% increase in our operating costs, just over 11.3 billion. primarily due to a 32% increase in our fuel bill. So an extra 1.25 billion on our fuel bill this year. Investment in resilience and in our people, so pay restoration, pay increases, and the impact of the delayed Boeing aircraft coming in there. So the end result is that we're reporting a 34% increase in profit after tax to 1.92 billion in the full year for FY24. Our industry-leading balance sheet with its BBB rating is one of the strongest out there. I would point to our very strong €4.1 billion gross cash at the end of the year, despite significant capex and debt repayments. And we're very pleased to see our net debt position improve from just under €600 million last year to €1.4 billion this year. This fortress balance sheet, as Michael has already said, will be further enhanced over the next couple of years as we pay down our maturing bonds. We've got a unique advantage in that all of our Boeing 737 aircraft, 556 of them at the end of March, are unencumbered and on our balance sheet. It gives us massive flexibility at a time when competitors, as I already said, are raising expensive debt in the market and taking on expensive leases. As part of our capital allocation policy, we've now restored pay for our people. We're paying down our debt. We're funding our CapEx from our internal resources. And we're returning funds to our shareholders through ordinary dividends and other forms of distributions. And with that, Michael, maybe you'll take us through current developments, please.

Yeah, thanks, Neil. So as I've already said, summer 2024 demand is positive. We're running our largest ever summer schedule and we expect to deliver 8% traffic growth through the peak summer months in a market where the EU capacity is constrained due to Pratt & Whitney engine repairs, OEM delivery delays and consolidation. That does give us, it is a bit surprising that the pricing hasn't been stronger. And we're not quite sure whether that's just consumer sentiment or recessionary feel around Europe. But we still see peak travel demand certainly through July and August being strong. And if we have to discount our cut fares to fill to 94% load factor in April, May and June, then so be it. We're continuing to work with Boeing to improve quality and accelerate our 737 deliveries. There is an outside possibility the backlog, instead of being 23, might be 20 by the end of July, but it won't significantly alter the traffic growth figures for this year. I think the key message this morning, though, is we've already hedged 70% of our FY25 fuel at $79 a barrel. We've locked in a €450 million saving. And I think one of the big developments over the last three months has been the number of approved OTA deals we've signed, converting OTA pirates from scamming consumers into protecting consumers and ensuring that consumers get the Ryanair lowest fares. As Neil has reported, there's another final dividend of £200 million. And this morning, the board has signed off on a 700 million share buyback. Just to touch briefly on some of those. Again, capacity continues to be short haul capacity in Europe is constrained. While we're operating at about in the month of April, for example, 30% more seat capacity than in pre-COVID. Others, our competitors are struggling to return to pre-COVID capacity. Ways are flat year on year because of their capacity. They've announced they've grounded about 45 A320s. IAG, Lufthansa and Air France are all meaningfully down in terms of their short haul capacity recovery in summer 24 compared to summer 2019. And into that marketplace, Ryanair is operating a record. schedule, capacity up 35% on 2019 pre-COVID, which means we will expect to take significant market share from our competitor airlines across Europe again this year. Touching briefly on Boeing, we have 146 game changers in the fleet at the end of March. We're likely to be about 20 aircraft short by the end of July on our scheduled deliveries. We do expect to get those deliveries, Boeing to catch up those deliveries by the end of October. which will give us at least 20 new aircraft growth for summer 25. Boeing are also contracted to deliver us another 29 aircraft between January and April of 2025. So we may well be looking at a summer in 2025 where we have another 50 aircraft worth of growth. The growth will have slowed in summer 24, but we expect to pick that up again in summer 25. We will keep taking deliveries during the peak months, August, September, October, just so we ensure we get those aircraft in. We welcome the management changes in Seattle. We support the work that Stephanie Pope and her team are doing. Already we're seeing improved quality on our aircraft deliveries, but sadly not yet enough progress in terms of accelerating those deliveries. We continue to work with Stephanie Pope, with Brian West, with Dave Calhoun to improve quality and accelerate deliveries. As I said earlier, we've extended three of Laudis A320 leases by four years out to 2028 without any increase in the lease rates, which I think is critical at the moment where lease rates are rising significantly. We still expect Max 7 certification late 2024, early 2025. We would then be hopeful that that will roll out Max 10 certification mid to late 2025. The first deliveries for Ryanair of the MAX 10s are due in the spring of 2027. So as long as it gets certified in mid-25, we see no reason for those aircraft being delayed. Just to touch briefly on the OTA issue, we're now working with a wide number of OTAs. Critical to the row with the OTAs has been that the OTAs agree that they won't overcharge our customers. They're free to charge our passengers a separate fee for their travel agency services, but then at least the customer knows what they're paying. But there's no overcharging on Ryanair airfares, no markups on Ryanair ancillary products. There's no screen scraping or digital piracy of Ryanair's Ryanair.com website. And Ryanair benefits because we get the real customer email and payment details, which means we can communicate with customers Preflight information, safety information, disruption information, all of that is critical. But by working together with some of these, the largest online travel agencies on the beach, eSky, 2E, Love Holidays, El Cortez, Inglis and Kiwi, we believe that together we can offer a wider range of products and services to consumers, but ensuring that those consumers get access. Ryanair's fares, not inflated airfares. Sadly, there's a couple of OTAs who want to keep scamming consumers and keep overcharging them. E-Dreams in Spain is the most egregious example of it. Not alone are they still overcharging passengers for Ryanair airfares. They're inflating Ryanair's ancillary fees and they've also started a scamming their customers. subscribers for this prime subscriber base where they charge passengers 65 euros a year for prime services they promise them 100% discount on 100% of flights but in the case of Ryanair they're still inflating the underlying price of Ryanair flights and they're inflating the cost of the ancillary services eDreams is a scam eDreams prime is a scam and we believe that the CEO of eDreams, Dana, Dan or whatever his name is, should come out and explain how they justify scamming consumers, overcharging consumers and why they won't sign up to Ryanair's OTA when all they have to do is agree not to overcharge consumers. He won't because eDreams is a scam. There's an example of the kind of overcharges that eDreams are engaged in for both overcharge on ancillary products. They've even invented a cancellation fee of 60 euros when Ryanair flights are non-cancellable. So they're charging their consumers for a fee for a service they know they can't deliver. It should be ended. We call on the consumer authorities, particularly in Spain and across the EU, to outlaw this kind of egregious overcharging and scamming of consumers. In terms of the shareholder returns, good news today is the board have approved our first or our latest 700 million euro share buyback. They approved the policy in November and we expect to roll that out now. The plan would be to balance that about 50-50 among the EU shareholders and non-EU shareholders. We will, if we can secure... blocks of non-EU shareholders or blocks of non-EU held shares. Obviously, that's more attractive to us, although there's a significant premium in the ADRs. But we try to balance those share buybacks so that we continue to migrate towards an EU majority owned company. We've made significant progress in that over the last 12 months, rising from 46% to 48% EU owed at the year end. And I would point out that if you remember the board's policy, which is we will dividend about 25% of profit after tax each year. This morning we reported a profit after tax of €1.92 billion. That should lead to a dividend of about €480 million being paid in 2025 to shareholders. And maybe, Neil, I'll hand you back. You can take us through the outlook of the summary. Sure. Thank you very much, Michael.