Ryanair Holdings plc

Hello and welcome everyone to the Ryanair Holdings PLC FY26 earnings release. My name is Becky and I will be coordinating your call today. If you would like to ask a question, you may do so by pressing start followed by one on your telephone keypad. I will now hand you over to Michael O'Leary, Group CEO of Ryanair Holdings, to begin. Michael, please go ahead when you're ready.

Okay, good morning, ladies and gentlemen. Welcome to the Full Year Results Analyst Conference. I'm joined by all the team on that. I'm speaking to you from New York. I'm joined by all the team from London, Dublin, and various other sites around Europe. As you've seen earlier this morning, we reported a record full year profit of $2.26 billion, which is a rise of 40% over our prior year profit after tax of $1.6 billion. The highlights were traffic growth of 4% to a new record figure of 208.4 million. That was achieved despite delivery delays on 29 Boeing game changer aircraft. During the year, incredible cost difference and unit cost rose only 1%. Looking forward for the next 12 months, we've covered 80% of our jet fuel at about $67 per barrel, $668 per metric tonne. We took delivery of the last 29 of our 210 game-changer orders, so we have 647 aircraft in the fleet at the 31st of March, and we've declared a final dividend of 19.5 cents per share. It's payable in September, subject to AGM approval. Obviously, we've had a record year, and we're delighted with these results, but they've been overtaken, obviously, by the conflict in the Middle East. Like everybody else, we don't know when the Strait of Hormuz will reopen, but But Europe remains very well supplied with jet fuel, and significant, almost all of Europe's jet fuel is now sourced from West Africa, the Americas, and Norway. Our very conservative jet fuel hedging strategy, as we said, under which 80% for the next 12 months is hedged at $67 per barrel out to April 2027, would insulate the Reiner Group, from the current very volatile oil market and will significantly widen the cost advance to behold overall EU competitors for the remainder of FY2027. As you'll see, the balance sheet remains strong with a BBB plus credit rating, both Fitch and S&P, with an unencumbered Boeing 737 fleet of 628 aircraft. At the 31st of March, gross cash was £3.6 billion. and this was after spending $1.9 billion on CapEx, $1.2 billion on debt repayments, and over $900 million in shareholder distributions over the last 12 months. Net cash was $2.1 billion at year-end, which enables the group to repay our very last $1.2 billion bond next week, before the end of May, which leaves our group effectively debt-free, which is a stunning achievement for any non-government-owned airline. During FY26, we purchased and transferred another 2% of our issued share capital. We've retired 38% of Ryanair's issued share capital since 2008. The final dividend of 19.5 cents is paid within September and is subject to AGM approval. Our priorities with our cash over the next 12 months are obviously, firstly, to fund the final bond repayment in May. then to fund our Max 10 aircraft topics over the next 12 months, to pay down dividends and continue to fund the balance of our €750 million buyback programme at favourable lower prices recently, while rebuilding internal cash flows, the group's cash back to €4 billion. I'm going to touch briefly on the fees growth. As we said, at the year end we have 647 aircraft, which includes 210 game changers, all of which are debt-free and unencumbered. Boeing are making very positive noises about the MAX 10 certification, which they now expect to take place at the end of Q3, early Q4 2026. They've also confirmed in writing that they expect to deliver Reiner's first 15 MAX 10 in the spring of 2027, in line with the original contract dates. Once we take 300 of these fuel-efficient aircrafts, all of which are due to deliver by March 2034. They will transform the economics, the operating costs of Ryanair, but they enable us to offer 20% more seats to the market, but they burn 20% of the seat-less fuel per flight. This summer, Ryanair has 130 new routes on sale. They include three new bases in Rabat, Morocco, Tirana in Albania, and Trampany in southern Italy. Our scarce FY27 capacity growth, or summer FY26 capacity growth, is allocated to those regions and airports who are actively cutting aviation taxes, like Sweden, Slovakia, Albania, and regional Italy, and are also where airports are incentivizing traffic growth. And we're switching our scarce capacity away from uncompetitive high-tax markets like Austria, Belgium, Germany, and regional Spain. The Board and myself commenced discussions on an extension of my employment contract, which currently runs to 2028. That runs out until April 2032. We've recently concluded an outline agreement, and the Board will commence engagement with our largest institutional shareholders in the coming days. The key feature of the contract extension is I will have purchase options over 10 million shares But these will only invest if we achieve very ambitious profit after tax and share price growth targets over the next six years, i.e. before 2030. If we do, we will create very substantial capital value for all shareholders. I want to turn then briefly to the outlook. We expect fully FY27 traffic to grow about 4% to 216 million passengers. The key feature of the next 12 months is that 80% of our jet fuel has been hedged at $67 per barrel, which is lower than last year's $76 per barrel price. However, the price of our unhedged 20% has spiked due to the Middle East conflict. Our EU enviro taxes are also expected to rise by a further $300 million this year to $1.4 billion, which makes EU air travel even less competitive than it was before. Ryanair, like all of the European airlines, are calling for either the abolition of ETS or bringing ETS taxes in line with Corsair rates, which is what the non-EU airlines pay. It makes no sense that we tax ourselves, that European airlines and passengers are taxed so indiscriminately compared to our non-EU competitors. Our maintenance costs will rise modestly due to an aging energy fleet and midlife hospital visits on the LEAP engines. There will also be some significant crew pay increases agreed this year. We've recently completed five-year pay deals with our Italian pilots and cabin crew and we're in active negotiations with a wide number of other national pilot and cabin crew unions and we expect to agree follow-on deals with those over the coming weeks and months. If the unhedged fuel prices remain at current elevated levels throughout the remainder of FY27, then unit costs could rise in Ryanair by a mid-single-digit percentage. That would still demonstrate incredible unit cost discipline. To date, our summer 26 travel demand remains robust, although bookings since the war in the Middle East... are closer in than they were last year, which reduced invisibility. Pricing in recent weeks has been somewhat, in response to economic uncertainty, caused by higher oil prices, far too much media attention about the fear of fuel shortages, which we believe does not exist, and the risk of inflation and adversity impacting consumer spending. In fact, the trend we've been seeing is that further out into June, July and August, we're having to marginally discount pricing, you know, maybe 1% or 2% to keep the forward curve rising, but the close-in bookings in early, mid-May are strong and pricing is strong. With the first week of Easter falling into March, which benefited last year's Q4, we now expect Q1 fares to be behind Q1 FY26 by a mid-digit percentage. With constrained EU capacity and short-haul capacity due to OEM delivery delays and the engine repairs, we'd originally expected S26 fares to rise modestly. We thought we'd be in the low single digits after a 10% fare increase in the prior year. However, Q2 pricing, with limited visibility, is now trending broadly flat, and the final outcome will be totally dependent on close-in peak summer 26 bookings and fares. With zero H2 visibility and significant fuel price potential supply volatility, it's far too early to provide any meaningful FY27 profit guidance at this time. And with that, I'm going to ask Neil Thornton, the Group CFO, to take us through the MD&A. Neil?

Thanks, Michael. I'm just going to maybe reiterate a couple of points that you already made. So, first and foremost, looking at last year, very strong performance on unit costs, up 1%. So, in line with the modesty unit cost inflation that we previously guided. Balance sheet, as Michael has already said, finished the year, rock solid balance sheet, triple B plus rated, 3.6 billion gross cash. And as a CFO, very excited that we'll be debt free this day next week, having paid off our final 1.2 billion bonds and a very strong unencumbered lease available to us. Looking beyond Then into next year again, very well hedged, as Michael has already said, $668 a metric ton. We hedge jet fuel. We don't hedge Brent or gas oil. We hedge exactly what goes into the tanks. That has always been the case. But equally, very well hedged on the euro dollar as well. We don't generate any dollars in the business. So we've hedged 80% of our dollar requirements on fuel this year at $1.15. And indeed, we've put down... a floor into the first half of next year with nearly 30% euro-dollar hedged at 120. So locking in dollar savings, but haven't moved on with our jet fuel yet, just waiting to see where the market steadies in the next number of weeks. The next big mover on the cost base, as Michael has alluded to, is going to be the MAX-10 aircraft coming in. in the spring of next year, 20% more fuel efficient, 20% more seats. We'll be spreading the costs across 20% more traffic from then onwards. So business is in good shape. The balance sheets rock solid, and we're managing things that are within our control well. Michael, a hand back over to you, please.