International Consolidated Airlines Group Sa · LSE:IAG
International Consolidated Airlines Group Sa — FY2024 Earnings Presentation
37 slides from International Consolidated Airlines Group Sa's earnings presentation, Feb 28, 2025
Slide 1: Connecting people, businesses and countries: 2024 Full Year results
Connecting people, businesses and countries 2024 Full Year results
Slide 2: Disclaimer
Disclaimer LEI: 959800TZHQRUSH1ESL13 Forward-looking statements: Certain statements included in this announcement are forward-looking. These statements can be identified by the fact that they do not relate only to historical or current facts. By their nature, they involve risk and uncertainties beca
Slide 3: Highlights
Highlights Luis Gallego Chief Executive Officer
Slide 4: A world-class investment case
A world-class investment case Strong Strong Strong Value Position Execution Creation Unique strength in our Delivering world-class Sustainable earnings + = network, hubs and margins growth brands Delivered by our Strong free cash flow Premium customers transformation generation Growing IAG Loyalty p
Slide 5: Our strategy to deliver world-class margins and returns
Our strategy to deliver world-class margins and returns Strategic imperatives Medium-term ambition A strong core 12-15% operating margin Sustainable profitability Capital-light earnings 13-16% RoIC growth A robust financial and Accretive <1.8x net leverage through cycle sustainability framework grow
Slide 6: Delivering world-class results
Delivering world-class results Compelling Growing Best in-class Disciplined capital proposition profits execution allocation +9% +27% 13.8% 17.3% Revenue growth Operating profit Operating margin RoIC growth Generating Strong Sustainable Returning excess significant cash balance sheet dividends capit
Slide 7: Financial results
Financial results Nicholas Cadbury Chief Financial and Sustainability Officer
Slide 8: A world-class financial performance
A world-class financial performance Revenue Operating Operating Net Free cash Adjusted (€m) profit (€m) margin leverage flow (€m) EPS (€c) 56.8 32,100 13.8% 50.6 29,453 4,443 3.1x 3,556 11.9% 23,066 3,507 1.7x 5.4% 1.1x 1,320 1,247 979 5.6 2022 2023 2024 2022 2023 2024 2022 2023 2024 2022 2023 2024
Slide 9: Very strong operating profit growth in 2024
Very strong operating profit growth in 2024 IAG operating profit bridge by driver: IAG operating profit bridge by business: Strong markets, hubs and customer propositions Transformation programme driving profits across the Group €m +936 €m +936 2,464 78 105 872 87 4 74 4,443 4,443 (20) (81) 3,507 (1
Slide 10: Excellent performances across the Group
Excellent performances across the Group Aer Lingus British Airways Iberia Vueling FY 2024 FY 2024 FY 2024 FY 2024 FY 2024 (€m) vLY (£m) vLY (€m) vLY (€m) vLY (£m) vLY Total revenue 2,376 +4.5% 14,408 +6.2% 7,542 +8.4% 3,261 +2.0% 2,430 +18.4% Passenger revenue 2,304 +4.3% 13,466 +6.3% 5,862 +11.4% 3
Slide 11: Strong demand and yields in our core markets
Strong demand and yields in our core markets Expect to grow capacity (ASK) by 3% in 2025; 2% to 4% in the medium term North Atlantic Domestic Europe % v23 ASKs PRASK % v23 ASKs PRASK % v23 ASKs PRASK Q4 0.1% 14.1% Q4 7.3% (2.9)% Q4 3.6% 4.6% FY 2.8% 6.2% FY 5.8% (0.3)% FY 5.8% 2.6% 30.7% of Group FY
Slide 12: Transformation supporting margin improvement
Transformation supporting margin improvement FY 2024 Cost category FY 2024 FY 2025 guidance unit cost (% vly) Driven by underlying pay deals, adverse FX, and • Overall non-fuel unit cost trend similar to Employee 7.5% employee payments linked to strong financial FY 2024, with additional FX headwind
Slide 13: Profit after tax and exceptional items of €2,732m in FY 2024
Profit after tax and exceptional items of €2,732m in FY 2024 Year to 31 December Before Before exceptional Exceptional Statutory exceptional Exceptional Statutory €m items 2024 items 2024 items 2023 items 2023 Revenue 32,100 – 32,100 29,453 – 29,453 Operating costs 27,657 * 160 27,817 25,946 – 25,94
Slide 14: Significant free cash flow generated in 2024
Significant free cash flow generated in 2024 FY 2024 FY 2023 (€m) (€m) FY 2024 1 Operating profit 4,443 3,507 • Increase in Depreciation reflecting fleet deliveries Depreciation 2,364 2,063 • Working capital inflows from increased bookings offset by engineering supplier prepayments, higher VAT-relat
Slide 15: Maintain balance sheet strength: net debt reduced by €1.7bn
Maintain balance sheet strength: net debt reduced by €1.7bn 31 December 31 December 31 December Targeting a reduction in gross €m 2022 2023 2024 leverage: Gross debt 19,984 16,082 17,345 • Bond buyback €577m across both 2027 of which bank and other loans 6,546 2,688 2,911 and 2029 unsecured bonds in
Slide 16: Maintain balance sheet strength: reducing our financial liabilities in 2025
Maintain balance sheet strength: reducing our financial liabilities in 2025 €m €500m €277m €300m bond to be bond early bond early repaid in repaid in Q1 repaid in Q1 March 2025 2025 826 2025 400 296 55 36 2025 2026 2027 2028 2029 Bonds issued by ICAG Other secured loans Other unsecured bonds and loa
Slide 17: Investing in our fleet, improving customer experience and resilience
Investing in our fleet, improving customer experience and resilience Gross capital expenditure c.€3.7bn* c.€3.7bn* Property maintenance and airport equipment replacement/upgrades and Lower expenditure than planned in lounges 2024: €2.8bn Lower expenditure than planned in Improving our front-end cust
Slide 18: Disciplined capital allocation to support profitable growth and shareholder returns
Disciplined capital allocation to support profitable growth, best-in-class margins and sustainable shareholder returns Maintain balance Invest in rebuilding Improve customer Commitment to Excess cash returned sheet strength our fleet experience, sustainable to shareholders if resilience, digital div
Slide 19: Business update and outlook
Business update and outlook Luis Gallego Chief Executive Officer
Slide 20: Sustaining our focus on margins and return on capital
Sustaining our focus on margins and return on capital Transforming Developing Spanish Accelerating capital-light British Airways platforms earnings: Loyalty & Holidays Driving high customer satisfaction, profits Deliver €1.5bn of operating profit from the Leverage Loyalty for higher growth, and marg
Slide 21: Diversified portfolio of leading positions in our core markets
Diversified portfolio of leading positions in our core markets North Atlantic Latin America Intra-Europe • #1 long-haul market from Europe by size • #1 revenue growing market from Spain • Spain is #1 domestic market in Europe (€43bn market) (+60% vs 2019) • UK is the #3 market, with UK-ES the • Lond
Slide 22: Strong improvement at BA and Aer Lingus; Iberia and Vueling world-class
Strong improvement at BA and Aer Lingus; Iberia and Vueling world-class OTP (D´15) OTP (D´15) 78.9% 82.3% 76.7% 76.7% 72.6% 74.4% 68.4% 67.5% 63.7% 55.6% 79.1% 77.3% 72.1% 72.7% 2023 63.1% 67.7% 61.3% 59.3% 60.4% 53.6% 2024 2023 2024 Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY OTP (D´15) 88.1% 89.8% 88.7% 87.0% 8
Slide 23: Investing in our customers' experience in 2025
Investing in our customers’ experience in 2025 Journey Dreaming, planning Check in Lounge On-board Disruption, Our service & booking connections & arrivals Communicate and retail across the Flagship lounge at JFK T6 in A321XLR to being long-haul Wayfinding feature on app to guide AI technology for R
Slide 24: Transformation will continue delivering value in 2025
Transformation will continue delivering value in 2025 Customer & Innovation Efficiency • New app functionality: real-time updates, • Digitisation of engineering, developing a boarding gates, 'manage bags' performance management system for • Expand US partnerships via New Distribution contracted main
Slide 25: Expanding the power of IAG Loyalty
Expanding the power of IAG Loyalty FY Operating Profit • +18.4% revenue growth • +14.4% profit growth • Operating profit margin of 17.3% • Asset-light, cash-generative model £m 420 367 218 * 2019 2023 2024 * Launching later this year 2024 Full Year results 25
Slide 26: Our people are critical to our success
Our people are critical to our success We recruited 12,000 employees and total We remain committed to achieving our Exciting career opportunities. In 2024, our headcount has grown by 4% year-on-year to pilot cadet programmes offered over 230 Diversity and Inclusion ambitions. 36% of 74,000 attractin
Slide 27: Good progress on sustainability in 2024
Good progress on sustainability in 2024 Sustainable Aviation Fuel Tonnes of SAF of total of global tonnes of CO2 used in 2024 IAG fuel SAF supply avoided Policy and EU SAF Allowances, UK SAF Revenue Certainty Mechanism, UK Jet Zero Taskforce, Advocacy SAF Feedstock Expansion Carbon 78.1g CO2/pkm 202
Slide 28: Maximising shareholder value creation
Maximising shareholder value creation Creating value How What we did in 2024 What we are doing Driven by our strategy and 27% growth in operating Targeting further earnings Delivering earnings growth transformation programme profit* growth Generating sustainable Turning sustainable high €3.56bn free
Slide 29: Appendices
Appendices 2024 Full Year results 29
Slide 30: Our key metrics for FY 2024
Our key metrics for FY 2024 ASKs 343,253m Activity +6.2% vLY Total revenue Total pax revenue Pax RASK Load factor €32,100m €28,274m €8.24c 86.5% Commercial +3.1% vLY +1.2pts vLY +9.0% vLY +9.5% vLY performance Total expenditure Total CASK Fuel CASK Non-fuel CASK €27,657m €8.06c €2.22c €5.84c Cost +6
Slide 31: Our key metrics for Q4 2024
Our key metrics for Q4 2024 ASKs 84,320m Activity +4.3% vLY Total revenue Total pax revenue Pax RASK Load factor €8,047m €6,961m €8.26c 85.6% Commercial +6.0% vLY +11.4% vLY +10.6% vLY +1.9pts vLY performance Total expenditure Total CASK Fuel CASK Non-fuel CASK €6,926m €8.21c €2.06c €6.15c Cost +4.8
Slide 32: Cash bridge Dec-23 to Dec-24
Cash bridge Dec-23 to Dec-24 €m +€2,991m Free cash flow of €3,556 million Repayment of lease liabilities 6,807 336 (129) 1,474 (642) 584 (410) 9,828 (923) (2,816) (814) (202) (149) (125) 6,837 1 2 Actual EBITDA Deferred Other WC Net Gross Proceeds Proceeds Repayment Repayment Repayment Treasury Divi
Slide 33: IAG Loyalty VAT
IAG Loyalty VAT • HMRC issued a decision letter in October 2024 relating to its view that IAG Loyalty has not been applying the correct treatment of VAT when issuing Avios • IAG and its advisors strongly disagree with HMRC's view • As at 31 December 2024 HMRC has issued assessments totalling £557m (
Slide 34: Expect another good year with strong shareholder returns in FY 2025
Expect another good year with strong shareholder returns in FY 2025 Modelling assumptions • Revenue – Strong customer demand continues – Capacity increase of c.3% - continuing focus on our core markets • Non-fuel unit costs – Similar trend overall as 2024 and an additional adverse FX impact of c.2%
Slide 35: Fuel hedging
Fuel hedging Q1 2025 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 Jet fuel price scenario $750/mt $760/mt $760/mt $750/mt $730/mt $730/mt $/€ scenario 1.044 1.044 1.044 1.044 1.044 1.044 Hedge ratio 72 % 67 % 60 % 49 % 39 % 32 % Effective blended price post fuel and FX $745/mt $765/mt $760/mt $755/mt $73
Slide 36: FY 2025 capacity planned to be c.3% higher than 2024
FY 2025 capacity planned to be c.3% higher than 2024 Q1 2025 FY 2025 Airline contribution to IAG ASK growth Airline contribution to total IAG ASKs by quarter vLY ASK growth for FY 2024 vLY vLY vLY +3% +3% +3% +4% +3% 5% 6% 1% 2% 5% 3% 15% 13% 3% 4% 3% 3% Q1-25 Q2-25 Q3-25 Q4-25 FY-25 Note: British A
Slide 37: Alternative Performance Measures (APMs) and terminology definitions
Alternative Performance Measures (APMs) and terminology definitions Measure IFRS/APM Definition Source of calculation Airline non-fuel CASK APM Total operating expenditure before exceptional items, less fuel costs and FY 2024 Results Release (Reconciliation of alternative performance measures emissi
International Consolidated Airlines Group, S.A. (IAG) — FY2024 Earnings Presentation on 6ix