Ryanair(RYAAY) - 2024 Q4 - Annual Report

Financial & Operational Highlights (FY2024) Key Performance Summary Ryanair reported a 34% increase in full-year profit after tax (PAT) to €1.92 billion for FY2024, driven by a 9% rise in traffic to 183.7 million passengers and a 25% increase in revenue to €13.44 billion, with load factor improving by 1 percentage point to 94%, and a €700 million share buyback announced Key Financial and Operational Metrics | | Mar. 2023 | Mar. 2024 | Change | | :--- | :--- | :--- | :--- | | Customers (million) | 168.6m | 183.7m | +9% | | Load Factor | 93% | 94% | +1pt | | Revenue (€billion) | €10.78bn | €13.44bn | +25% | | Op. Costs (€billion) | €9.20bn* | €11.38bn | +24% | | PAT (€billion) | €1.43bn* | €1.92bn | +34% | - Full-year Profit After Tax (PAT) grew by 34% to €1.92 billion, attributed to a 9% increase in traffic and higher revenues, which offset a significant rise in fuel costs[4][5] - Traffic grew by 9% to 183.7 million passengers, which is 23% more than pre-COVID levels[5][6] - The company announced a €700 million share buyback, which will be formally launched shortly[4][21] CEO's Review & Business Outlook The CEO highlighted strong ESG ratings, ongoing fleet modernization despite Boeing delivery delays, and positive summer 2024 demand, anticipating continued market consolidation and capacity constraints in Europe, positioning Ryanair for long-term growth towards 300 million passengers by FY34 Environmental, Social, and Governance (ESG) The company achieved upgraded ESG ratings and made progress on sustainable aviation fuel targets and board diversity - ESG ratings were upgraded, including a CDP 'A-' climate rating (up from 'B') and an MSCI 'A' rating (up from 'BBB')[8] - The company is on track to achieve its goal of powering 12.5% of flights with Sustainable Aviation Fuel (SAF) by 2030, with 10% of the required supply already secured[8] - Board diversity was enhanced with the appointment of two new female non-executive directors, resulting in a 50:50 gender split on the Board[10] - The company continues to call on the EU Commission to reform Europe's inefficient ATC system to protect overflights during national strikes, citing 67 days of ATC strikes in 2023[9] Fleet, Growth & Market Dynamics Fleet modernization faces Boeing delivery delays, while market consolidation and capacity constraints are expected to support Ryanair's long-term growth target of 300 million passengers by FY34 - The fleet included 146 B737 "Gamechangers" at year-end, which is 23 aircraft short of contracted deliveries from Boeing, with a risk of further delays[12] - Ryanair anticipates that ongoing European airline consolidation and OEM delivery backlogs will constrain capacity growth in Europe for some years[14] - The company has a long-term growth target to carry 300 million passengers annually by FY34, supported by its order for 300 B737-MAX-10 aircraft[14][16] FY2025 Outlook Ryanair projects 8% traffic growth for FY25, but cautions on softer Q1 pricing and uncertainties, making FY25 PAT guidance premature - Ryanair expects to grow FY25 traffic by 8% to a range of 198 million to 200 million passengers, contingent on Boeing deliveries returning to contracted levels[22] - While S.24 demand is positive, recent pricing has been softer than expected, with Q1 requiring more price stimulation; the company is cautiously optimistic that peak S.24 fares will be flat to modestly ahead of last summer[22] - The company stated it is too early to provide sensible or accurate FY25 PAT guidance due to uncertainties around peak summer pricing, geopolitical events, and Boeing delivery delays[22] Financial Performance Analysis (MD&A) Revenue Analysis Total revenue for FY24 increased by 25% to €13.44 billion, driven by a 32% rise in scheduled revenues to €9.15 billion from 9% traffic growth and a 21% increase in average fares to €49.80, while ancillary revenues grew 12% to €4.30 billion, averaging €23.40 per passenger Revenue Breakdown by Stream | Revenue Stream | FY2024 (€bn) | FY2023 (€bn) | Change | | :--- | :--- | :--- | :--- | | Scheduled Revenues | 9.15 | 6.93 | +32% | | Ancillary Revenues | 4.30 | 3.84 | +12% | | Total Revenues | 13.44 | 10.78 | +25% | - The average fare increased by 21% to approximately €49.80, driven by a record first half and strong Easter traffic[17][39] - Ancillary revenue per passenger was approximately €23.40, reflecting increased spending on discretionary services like priority boarding and reserved seating[17][40] Operating Costs Analysis Total operating costs rose 24% to €11.38 billion, mainly due to a 32% increase in the fuel bill to €5.14 billion, with staff costs up 26% to €1.50 billion and airport & handling charges up 20% to €1.48 billion, yet the company maintains a significant cost advantage, anticipating a €450 million fuel hedge saving for FY25 Operating Expense Breakdown | Expense Category | Amount (€bn) | Change vs FY23 | Key Driver(s) | | :--- | :--- | :--- | :--- | | Fuel and oil | 5.14 | +32% | Higher jet fuel prices & 8% more sectors flown | | Staff costs | 1.50 | +26% | Pay restoration, higher crewing ratios, productivity pay | | Airport & handling | 1.48 | +20% | Traffic growth, higher rates, end of COVID reliefs | | Depreciation | 1.06 | +15% | 48 new aircraft deliveries & higher utilization | - The fuel bill rose by €1.25 billion to €5.14 billion as hedged oil prices increased from $65/bbl in FY23 to $89/bbl in FY24[5][16] - For FY25, over 70% of fuel requirements are hedged at just under $80/bbl, which is expected to lock in approximately €450 million in savings[18][22] Balance Sheet and Liquidity The company maintained a strong balance sheet with a BBB+ credit rating, gross cash of €4.12 billion, and net cash increasing to €1.37 billion from €0.56 billion, despite €2.4 billion in capital expenditures, with its owned fleet of 556 B737 aircraft fully unencumbered Key Balance Sheet Metrics | Metric | Mar 31, 2024 (€bn) | Mar 31, 2023 (€bn) | | :--- | :--- | :--- | | Gross Cash | €4.12bn | - | | Net Cash | €1.37bn | €0.56bn | | Gross Debt | €2.75bn | - | | Total Assets | €17.18bn | €16.41bn | | Total Equity | €7.61bn | €5.64bn | - The company holds a BBB+ credit rating from both S&P and Fitch[19] - The owned B737 fleet of 556 aircraft is fully unencumbered, which significantly widens the cost advantage over competitors exposed to rising lease costs[19] Shareholder Returns In line with its capital allocation policy, Ryanair paid a maiden interim dividend of €0.175 per share in February 2024 and announced a final dividend of €0.178 per share for September 2024, additionally approving a €700 million share buyback, bringing total returns to shareholders since 2008 to over €7.8 billion - An interim dividend of €0.175 per share was paid in February, with a final dividend of €0.178 per share due in September[16][21] - The Board approved a €700 million share buyback given the current surplus cash position[21] - Upon completion of the new buyback, total funds returned to shareholders since 2008 will exceed €7.8 billion[21] Condensed Consolidated Financial Statements (Unaudited) Consolidated Income Statement For the year ended March 31, 2024, Ryanair reported total operating revenues of €13.44 billion, an increase of 25% from the previous year, with operating profit rising 31% to €2.06 billion, profit for the year increasing by 34% to €1.92 billion, and diluted earnings per share (EPS) growing by 45% to €1.6743 Consolidated Income Statement Highlights | Metric | Year Ended Mar 31, 2024 (€M) | Year Ended Mar 31, 2023 (€M) | Change | | :--- | :--- | :--- | :--- | | Total Operating Revenues | 13,443.8 | 10,775.2 | +25% | | Operating Profit | 2,060.7 | 1,573.1 | +31% | | Profit for the year | 1,917.1 | 1,428.0 | +34% | | Diluted EPS (€) | 1.6743 | 1.1529 | +45% | Consolidated Balance Sheet As of March 31, 2024, total assets stood at €17.18 billion, up from €16.41 billion in the prior year, primarily due to an increase in property, plant, and equipment, while total shareholders' equity significantly increased to €7.61 billion from €5.64 billion, reflecting the year's strong profitability Consolidated Balance Sheet Highlights | Metric | At Mar 31, 2024 (€M) | At Mar 31, 2023 (€M) | | :--- | :--- | :--- | | Total Assets | 17,175.6 | 16,405.9 | | Total Liabilities | 9,561.4 | 10,762.9 | | Total Shareholders' Equity | 7,614.2 | 5,643.0 | Consolidated Cash Flow Statement Net cash inflow from operating activities was €3.16 billion for FY2024, with €1.56 billion used in investing activities, mainly for aircraft purchases, and €1.33 billion in financing activities, including debt repayments and dividend payments, resulting in a net increase in cash and cash equivalents of €271.2 million Consolidated Cash Flow Highlights | Metric | Year Ended Mar 31, 2024 (€M) | Year Ended Mar 31, 2023 (€M) | | :--- | :--- | :--- | | Net cash from operating activities | 3,157.9 | 3,891.0 | | Net cash used in investing activities | (1,560.4) | (1,901.2) | | Net cash used in financing activities | (1,326.3) | (1,054.0) | | Increase in cash and cash equivalents | 271.2 | 935.8 | Notes to the Financial Statements Segmental and Geographical Analysis The Group's operations are segmented into 'Ryanair DAC' and 'Other Airlines', with Ryanair DAC being the dominant segment generating €1.86 billion of the total €1.92 billion profit after tax, and Italy remaining the largest geographical market with €2.85 billion in revenue - The Ryanair DAC segment generated a profit after tax of €1,860.0 million, while the 'Other Airlines' segment (comprising Buzz, Lauda, and Malta Air) generated a combined profit of €57.1 million[76][77] Geographical Revenue Breakdown | Country | FY2024 Revenue (€M) | FY2023 Revenue (€M) | | :--- | :--- | :--- | | Italy | 2,853.3 | 2,364.5 | | Spain | 2,416.2 | 1,883.4 | | United Kingdom | 2,031.0 | 1,589.7 | | Ireland | 791.0 | 640.4 | | Other | 5,352.3 | 4,297.2 | Capital Commitments and Fleet As of March 31, 2024, the Group had taken delivery of 146 of its 210 firm orders for the Boeing 737-8200 "Gamechanger" aircraft, and in May 2023, placed a new order for up to 300 Boeing 737-MAX-10 aircraft for delivery between 2027 and 2033 - The Group has taken delivery of 146 of its 210 firm orders for Boeing 737-8200 aircraft, with the remainder due before the end of FY25[74] - A new order for 300 Boeing 737-MAX-10 aircraft (150 firm and 150 options) was placed for delivery between 2027 and 2033[74] Financial Instruments and Risk Management The Group actively uses financial instruments to manage commodity price (jet fuel), foreign exchange, and interest rate risks, with derivative financial assets at €352.8 million and liabilities at €182.1 million as of March 31, 2024, all valued using Level 2 inputs - The Group's primary financial risk exposures are related to commodity price, foreign exchange, and interest rates, which are managed using financial instruments[84] - All derivative financial instruments are measured at fair value using Level 2 inputs, meaning their value is derived from observable market data (such as forward rates) rather than direct quotes[86][88][89] Going Concern and Post-Balance Sheet Events The directors adopted the going concern basis for financial statements, supported by the Group's profitability, strong liquidity (€4.12 billion gross cash), BBB+ credit rating, and robust hedging positions, with a €700 million share buyback approved post-year-end - The going concern assessment is supported by strong liquidity (€4.12 billion gross cash), a BBB+ credit rating, an unencumbered owned fleet, and a strong fuel hedging position for FY25[98][103] - A significant post-balance sheet event was the Board's approval of a €700 million share buyback, which was scheduled to commence in late May 2024[99]