Ryanair Holdings plc

Hello and welcome everyone to Ryanair Holdings plc Q1 FY27 earnings release. My name is Drew and I'll be the coordinator for the call today. If you would like to ask a question, you may do so by pressing start followed by one on your telephone keypad. Please limit yourself to two questions. I will now hand you over to Michael O'Leary, Group CEO of Ryanair Holdings to begin. Michael, please go ahead when you are ready.

Okay, good morning everybody. Welcome to the Q1 results call. You'll have seen the results issued this morning. Q1 profit after tax of 538 million euros. That's a 34% decline on last year's Q1 of 820 million, primarily due to the impact of the large spike on oil prices. Thank you very much. Thank you. Unit cost rose 5%, which is an impressive number as the unhedged Q1 jet fuel prices doubled to $151 per barrel. FY27 jet fuel remains 80% hedged at $67 a barrel, a development in recent weeks as we took advantage of some price weakness on the forward rate and we're now 15% hedged for the entirety of FY28 at about $85 a barrel. The underlying growth into the summer continues. We're operating three new bases this summer, Rabat in Morocco, Tarana in Albania, Trapani in southern Italy, and in total over 130 new routes. And we're pleased that the final 1.2 billion bond was repaid in full out of internally generated cash flow, leaving the group essentially debt-free. Touching briefly on a couple of points and then before I hand over to Neil, schedule revenue dipped 1% in Q1 to 2.91 billion as traffic grew 6% but at 6% lower fares. Q1 fares which benefited from a full Easter during April 2025 required stimulation as the Middle East conflict led to consumer hesitancy, concerns about EU jet fuel shortages, economic uncertainty and later bookings. However, our conservative hedging policy means with 80% of our fuel hedges $67 a barrel, the group's earnings are largely insulated from periods of extreme volatile oil prices as currently, and this will materially widen our cost advantage over all of our other EU competitors. As I said, we recently extended those fuel hedges for the first time into FY28, now 15% hedged at $85 a barrel. Having repaid the 1.2 billion bonds in May, at the quarter end, gross cash was just over 2.8 billion. Again, an impressive figure after 1.3 billion of debt repayments and half a billion in capex. Liquidity is further boosted by the group's 1.1 billion revolving credit facility, which is mostly undrawn a sensible strategy at this time of the year when cash flows are strong. We're now 90% through the 750 million share buyback program. The average price is €26.35 per share. However, over the coming year, following the May repayment of our last bond, our funding priorities are one, the max 10 aircraft capex and the first 50 of those aircraft are coming in the spring of 2027. Shareholder dividends, the completion of the current buyback program, which we think will run out until around the AGM in September. while rebuilding gross cash back to 4 billion which is where we were when we entered the COVID and we believe that's a sensible number to help us cope with unforeseen eventualities such as COVID or the current war in the Middle East. In terms of touching on fleas, Boeing continues to expect the MAX 10 certification in late summer 2026. I spoke to them about two weeks ago and they expect the MAX 7 to be certified in the coming weeks and they're reasonably confident that the MAX 10 will be certified either in late September or mid-October. They have protected our first 15 delivery slots in the spring of 2027 so we are growing increasingly confident that we will have the first of those aircraft in advance of summer 27. and with 300 of these super fuel efficient aircraft remember 20% less fuel but offering 20% more seats per flight due to deliver by March 30-34 it leaves us in very good shape long term for cost efficiency or cost efficient growth and we believe profitable growth as I said this summer we're growing a head top line growth is strong three new base in Rabat, Tehran and Trapani But with only 4% of FY27 traffic growth, our scarce capacity is being switched away to those states, regions and airports, cutting aviation taxes, lowering fees to incentivise growth. The examples we've given are Albania, Morocco, regional Italy, Slovakia and Sweden and we are withdrawing material capacity flights and traffic away from high-tax, high-cost markets like Vienna in Austria, Dublin here in Ireland where costs have gone up 10% this year, Germany, we're closing the Berlin base at the end of the summer and regional Spain. Over the medium term, we expect European short-haul capacity to remain constrained until at least 2030, principally as the two main manufacturers remain well behind on aircraft delivery. Those industry capacity constraints combined with our widening cost advantage, our strong balance sheet, low-cost fuel-efficient aircraft order book, and industry-leading office resilience will, we believe, facilitate Ryanair's sustainable, profitable growth to over 300 million passengers by 2034. In terms of outlook, FY27 traffic remains on track to grow 4% to 216 million passengers. Much of that growth is front-ended, so in H1 we expect to grow by 6%. We will cut back our schedules into the winter, and we expect to deliver only 2% traffic growth in the second half of the year. Our unit cost leadership continues to widen. We've seen the results reported by many competitors in recent weeks who have seen unit cost increases of high single digit, low double digit. We're this morning reporting low single digit cost inflation. Jetfuel remains 80% hedged to March 27 at $67 a barrel, and that helps us to offset a $300 million increase this year in EU and Euro taxes, significant crew pay increases under new multi-year CLAs and higher maintenance costs. While summer 26 volumes are strong, the booking window remains closer in than last year, which further reduces visibility. Despite a recent slight uptick in volumes and less price stimulation, Q2 pricing is trending modestly down year on year. That is a decline from where we were on the full year results and we were hoping that Q2 pricing would be flat-ish year on year. They're now trending modestly down low to mid single digits. and the final H1 fair outcome remains heavily dependent on the strength of close in bookings in August and September but they will not be sufficient to make up for what will now be a fair decline in the second quarter. As is normal this year we have zero H2 visibility and so there is no point in trying to provide any meaningful guidance for full year profit tax guidance at this time. And with that I am going to hand over to Neil Sorahan, CFO. Neil take us through the key points of the MD&A please.

Thanks Michael, not a huge amount to add to what you've already said there other than to guide people back to the Fortress balance sheet that we have quite uniquely 620 fully unencumbered Boeing 737s on the balance sheet, very pleased at going debt free back in May so a rock solid balance sheet which puts us in a very strong position over the next number of years to capitalise on every opportunity that comes to us Hedging again well insulated for the current financial year, 80% hedging at $67 a barrel. The key swing factor as was the case in Q1 for the rest of the year is going to be where the 20% unhedged fuel goes. Otherwise unit costs strong and I would guide people to slide 4 in our presentation. You can see the gap between ourselves with EasyJet and everybody else is only getting wider. and I'd expect that to continue to be the case particularly as we start to take in the max 10 aircraft 20% more seats, 20% more fuel efficient from next year so good cost control in the business, some of that was down to having the extra aircraft you recall we were left short last summer so we had better productivity as a result of having all those aircraft in there equally grew by 6% so we were spreading Thank you Michael.