Ryanair Holdings plc

Good morning, ladies and gentlemen, and welcome to the Ryanair Q3 results press conference call. I'm Michael O'Leary, Group CEO, and as always, I'm joined by Neil Soren, the Group CFO. This morning, as you'll see, Ryanair reported a Q3 profit after tax of €115 million, pre-exceptional, as traffic rose 6% and fares in Q3 rose 4%. An £85 million exceptional charge has been made in the accounts. It's a provision of approximately 33% for the utterly baseless Italian AGCM fine, which was announced on Christmas Eve and which both we and our Italian lawyers are confident will be overturned on appeal. The highlights of the third quarter include traffic growth of 6% to 47.5 million, revenue per passenger up 3%, very strong cost control as a result of which unit costs are flat in the quarter. We have 206 game changers in our 643 aircraft fleet on the 31st of December. The last four aircraft will be delivered in February. We have announced three new bases and 106 new routes for summer 26 and these are already on sale. Fuel is 80% hedged for FY27 at $67 a barrel, resulting in a very significant 10% saving in our fuel costs next year. And we'll touch briefly on the Italian AGCM baseless fine, which was levied and which we're confident will be overturned on appeal. I touched briefly on a couple of highlights. With almost all of our game changers now delivered, other income in Q3 dipped due to the absence of delivery delay compensation in the prior year Q3. For Q4 of FY26, our fuel is 84% hedged at about $77 a barrel, but we've now locked in hedging for FY27 with 80% of our jet fuel requirements hedged at $67 a barrel. This will deliver significant cost savings next year. Over the last three years, Reiner has generated a total shareholder return in excess of 150%, which puts Reiner comfortably in the top quartile of the stocks Europe 600 index TSR performers. I believe the group will continue to deliver disciplined and consistent capital allocation, and this is underpinned by our strong balance sheet as traffic grows to 300 million passengers by FY34, with the benefit of our 300 max 10 order. Touching briefly on fleet, we expect to receive the final four game changers, bringing the total number of game changers to 210 in the fleet before the end of February. Because we're getting these aircraft deliveries early, this facility is facilitating slightly higher traffic growth this year, and we're now raising this year's traffic to 208 million, what was previously 207 million. But it also means that we have all of the fleet in place in time for the summer schedule, and that will allow us, we think, to deliver 4% traffic growth to 260 million passengers next year, FY27. Boeing expect that the MAX 10 certification will take place this summer and they're increasingly confident. In fact, I would say very confident they'll meet their contract delivery dates to Ryanair for the first 15 MAXs in the spring of 2027. And that will be the first 15 of 300 of these very fuel-efficient aircraft which have 20% more seats but burn 20% less fuel and will enable us to grow profitably out to March 2034. This winter we've allocated Ryanair's scarce capacity to those regions, countries and airports who are cutting aviation taxes and incentivising traffic routes such as Albania, regional Italy, Morocco, Slovakia and Sweden. And we're switching flights and routes away from high-cost, uncompetitive markets where they have unjustified aviation taxes like Austria, Belgium, Germany and in regional Spain. This trend or this churn will continue into summer 2026 as we operate over 160 new routes on sale and we're opening three new bases in Rabat in Morocco, Tirana in Albania and Trapani in Italy. Touching briefly on Italy, in late December the Italian AGCM competition authority levied a baseless €256 million fine against Ryder for our direct distribution to consumers policy in Italy, a policy that we've adopted all over Europe. This fine, we believe, will be overturned on its appeal as it ignores and indeed contradicts the precedent Milan Court of Appeal ruling in January 2024, which ruled that Reiner's direct distribution model in Italy undoubtedly benefits consumers by leading to lower fares, is economically justified in terms of containing operating costs and eliminating costs associated with distribution and ticket sales, and the court ruled it contributes to a direct channel of communication for any possible need for information and updates on flights to consumers. And yet, the AGCM, 18 months later, comes up with this mythical fine alleging that Ryanair is abusing a dominant position when we're not dominant in Italy. Both we and our Italian lawyers are very confident that the Italian courts will overturn this manifestly wrong and baseless AGCM ruling on appeal and that's why unusually we normally provide 50% provision in our accounts for legal appeals. In this case, we have lowered that to 33% which we think is reasonable. In fact, we could just as easily provide nothing for this given our confidence that this ruling will be overturned. In terms of outlook, we now expect FY26 traffic to grow 4% to almost 208 million passengers due to strong demand and these earlier than expected Boeing deliveries. We continue to expect only modest full-year unit cost inflation as our Boeing game-changer deliveries, fuel hedging and effective cost control helps to offset the increases in ATC charges, higher enviro costs in Europe and the roll-off of last year's modest delivery delay compensation. While Q4 won't benefit from Easter, fares are trending modestly ahead of prior year, and we now believe that the full-year fares will exceed our previous plus 7% growth guidance by maybe another 1% or 2%, 8% or 9%. At this stage, we're cautiously guiding full-year profit after tax pre-exceptionals in a range of £2.13 billion to £2.23 billion. However, the final FY26 outcome will remain exposed to adverse internal developments in Q4, including conflict escalation in Ukraine or the Middle East, macroeconomic shocks and any further impact of repeated European ATC strikes and mismanagement. And with that, I'm going to ask Neil to take us through the side presentation. Neil, over to you.

Thank you, Michael, and good morning, everybody. Ryanair is the lowest fares and the lowest cost of any airline in Europe, and our cost gap advantage continues to widen. We're number one for traffic and are now increasing traffic targets to 208 million passengers this year, which is a 4% increase on last year. Thanks to our strong on-time performance and reliability, we've seen our customer satisfaction scores rise to 89% in the year to date, and we continue to be highly rated by all of the ESG rating agencies. With our 300 MAX 10 order book starting to come in from next year, this will underpin a decade of growth to 300 million passengers by FY34, and that, of course, as always, is underpinned by our financial strength, our lowest costs, and this makes us the long-term winner in our sector. This is a snapshot of where we stand at the moment, including three new bases for summer of 2026. So 208 million passengers in the current year, 300 million passengers by FY34. Our costs, as I already said, continue to improve, continue to get better with a strong performance in Q3. And over the next number of years, with 300 MAX 10s coming in with 20% more seats, 20% more fuel efficiency, this advantage is only going to get better. On the quarter itself, we saw traffic increase by 6% to 47.5 million passengers at flat 92% load factors. Average fare rose 4% thanks to a strong mid-term break in October, but more importantly, close-in bookings for Christmas and the New Year also were strong. Revenue as a result up 9% to €3.21 billion in the quarter to the end of December. On costs, excluding the AGCM provision, which Michael has gone into in some detail, we saw unit costs remain flat or total costs increased by 6% to €3.11 billion. And profit after tax, pretty exceptional, down 22%. primarily due to the absence of Boeing delivery compensation thanks to them catching up on their order book. So coming in at £115 million profit in the quarter and £30 million after that AGCM fine provision for the 33% that Michael referred to earlier on. Balance sheet remains rock solid, a fortress balance sheet, BBB plus a strong investment grade rating from Fitch and S&P. Uniquely, almost 620 Boeing 737s fully unencumbered on the balance sheet. Liquidity remains very strong with 2.4 billion gross cash and a billion net cash at the end of the quarter. And that puts us in a very, very strong position now as we move into the next financial year in April to pay down our final bonds the 1.2 billion maturing bond in May 2026 from our own cash resources, effectively making the Ryanair Group debt-free. I'd just like to briefly focus on our total shareholder return. Over the past three years, we've delivered a TSR of 153%, which puts us firmly in the upper quartile of the Euro stocks 600. In fact, we're in a small club of three companies in Europe, which can boast a net profit in excess of 15%, investment grade ratings, net cash, and TSR over 150% while at the same time investing in growth delivering consistent and disciplined returns to our shareholders and we expect this model to continue for the years to come. With that maybe Michael you'll take us through current developments please.

Thanks yeah so as we've said how we expect FY we're raising slightly FY26 traffic up four percent to 208 million thanks to the earlier Boeing deliveries and strong demand We are using our constrained capacity to engage in more churn, so we're switching scarce capacity to those airports and regions who cut taxes and fees to grow. Our full FY26 schedule is on sale from the end of March with three new bases and 106 new routes. Most exciting is the fact that we've hedged 80% of our fuel for FY27 at just $67 per barrel, a 10% saving. There's an interim given of just over 19 cents per share payable in late February. And as Neil has said, we've completed 46% of the 750 million buyback by the end of the third quarter. We are ready and have the resources to repay the final 1.2 billion bond in May. Thereafter, we're essentially debt free. And we are actively planning for the MAX 10 entry into service in the spring of 2027. And we now believe that Boeing will hit those delivery dates. And the critical thing about those aircraft is that they allow us to engage in a decade of low fare profitable growth of over 50% to 300 million passengers by FY34. In terms of the Boeing numbers, as I said, we've already covered this off with 206 game changers in the fleet, four more coming in February. Boeing expect the MAX 10 certification to take place in late summer of 2026. We expect now to get the first 15 MAX 10s in the spring of 2027. And that, as I said, gives us a decade of growth out of 2034. In terms of outlook, Neil, you want to finish on that?