FY2019 Earnings Friday, 28 th February 2020
FY2019 Earnings Friday, 28 th February 2020 Introduction Antonio Vázquez Romero Chairman, Company Hi. Good morning everybody and very welcome to the IAG result presentation. I am glad to be here with the top management in IAG and the Senior Independent Director Alberto Terol. So thank you for coming all of you. As far as the 2019 result is concerned, the board is extremely happy with a strong set of results for both the full year and the last quarter. Even though the second half of the year has not been easy in terms of we had the industrial action and some other disruptions around. In fairness, the Q4 result has been a record in terms of absolute operating margin and operating profit. As far as the shareholder return is concerned, we have announced an interim dividend of – with the occasion of the third quarter result of 14.5 euro cents per share and I am pleased to announce that the Board is recommending a final dividend of 17 euro cents per share. So that makes a total dividend for 2019 of 31.5 euro cents, which is slightly higher than the 31 cents in respect to 2018. This demonstrates t he Board’s confidence in the IAG’s financial result, financial strength, strategy and outlook, especially in the face of the uncertainty that, you know, this – on travel demand that this coronavirus is causing right now and representing right now. In view of the management plan to acquire Air Europa later in 2020, the Board has decided not to recommend additional return to shareholders at this stage. Including the final dividend, we will have returned a total of 4.4 billion to shareholders since 2015. I understand that these kind of meetings are to talk about the numbers and not to talk about the feelings but I have to share with you a kind of feeling today because formally it is a last presentation of result of IAG by Willie. Willie will retire almost in one month and I want to share with you my point of view – my feelings right now. And since we last started working together – and the point in tim e, I’m talking about nine/ten years ago, you know, we were trying to merge two companies in a not very easy situation, so we were putting together two big restructuring plans. And so it seems this point in time, until now, that we have in front of us one of the top leaders in the airline industry and one of the most solid groups in the airline industry, it has been a long journey. And Willie and I, we have been working together for many, many years right now and of course we did not agree always but – which is very healthy by the way, and but I can tell you that we have been having all the time a full consensus on putting always on top of everything the interest of the company and the shareholder. And that I [inaudible] the glue which has been making us work together very efficiently, very well. I am really grateful for this year. Integrity, leadership, the determination, ambition, commitment, that ’ s kind – Willie’s attributes, we are – will be forever in the foundation of IAG. So I – really, thank you very much Willie for having working with you such a long time and I think we will never forget you. Thank you. I want to welcome formally Luis as our – as CEO, which will be formally in one month from now and Luis will take over from Willie. With a whole life in aviation, I think the 2
FY2019 Earnings Friday, 28 th February 2020 transformation of Iberia has been a business case which a lot of our competitors have been trying to copy but never anybody has been able to match. And I think it’s with the skills of – personal and professional skills of Luis and exceptional leadership of Luis and the wonderful experience that has been Luis working together with Willie for these may years, we have a wonderful ingredient to be successful in the future and for you to be successful in the future. So Luis has full support of the Board and I hope you all will be extremely happy with the performance of the company and the leadership of Luis. So I’ll just hand over to the management team led by Willie Walsh with a presentation to go back to the numbers. Thank you. 2019 Highlights Willie Walsh Chief Executive Officer Thank you, Antonio. It’s good that we’ve fina lly agreed on something. So ladies and gentlemen, I’m not going to spend too much time by way of introduction because the Chairman has actually covered a number of the points I was going to make but I do just want to highlight a couple of issues because clearly there’ll be a lot of distraction given what’s going in the current en vironment but I think reflecting back on 2009 it’s important to reali se that we did actually make a lot of progress on the key strategic objectives for the group and we have continued to invest in the right areas of the business. We’ve looked for opportunities to consolidate and Air Europa I believe will be a fantastic acquisition by IAG. We’re working on that and hopefully we’ll be able to close that deal off in the seco nd half of this year. We’ve invested in the product as we said we would and the response from customers has been really positive to that and we will continue to do that through the coming years. And it’s not just in BA. I know there’s been a real focus on what BA has been doing but it’s right across the group. And I think what’s particularly pleasing for us is we’re seeing these investments are being rewarded in terms of the improvement in our net promoter score, which as you know is one of the key metrics that we use. We balance all of our investments decisions again st the impact that they will have on NPS and we’re seeing real positive momentum particularly at British Airways and at Vueling who did an exceptional job in 2019 responding to the challenges of air traffic control in Europe. And it’s important to point out 2018 was the worst year on record for ATC. 2019 was the second worst year on record. So you know, we went into 2019 hoping that it wouldn’t be any worse than it was in 2018, we saw a slight improvement but it was still the second worst year on record for air traffic control. Our leadership position in our key markets continues to be strengthened. We added 4% capacity but we saw traffic increase by 5.6% and you can see North America by 3.6%, Latin America 15.6%, intra-Europe combination of domestic and our EU flying of 3.8% and Asia 5.5%. Number of new routes by all of the airlines, and again these are designed to strengthen the network to ensure that we have leadership particularly on the North Atlantic and on the South Atlantic and we continue to invest in our common platform. This year and last year but this year in particular, strong emphasis on what we’re doing to ensure that not only are we financially sustainable but environmentally sustainable and we launched, as you 3
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