International Consolidated Airlines S A : Quarterly Report (iag results presentation q1 2026)

About this update from International Consolidated Airlines Group Sa

We connect what matters 2026 Quarter One Results Highlights Luis Gallego Chief Executive Officer A strong first quarter; confident in the long-term prospects Revenue in the first quarter increased by 1.9% to €7,181m reflecting continued strong demand for our network and airline brands Operating profit increased by 77.3% in the first quarter, driven by revenue growth and limited impact on cost from the Middle East conflict. Operating margin improved by 2.1pts to 4.9% Our capital-light Loyalty business grew its revenue by 10.0% and profit increased by 32.6% at a 20.1% margin Strong balance sheet: net debt of €4,183m; net leverage at 0.5x. Liquidity of €12,731m On track to complete the remaining €1bn excess cash return by end Feb 2027 Strong business model and strategy, transformation programme and track record on execution means we are uniquely positioned to navigate current headwinds 2026 Quarter One Results 4 Financial results Nicholas Cadbury Chief Financial and Sustainability Officer Delivering a strong first quarter €m IAG operating profit bridge by driver: Strong operating profit growth €m IAG operating profit bridge by business: Profit improvement in most of our brands +77.3% 198 510 (30) 10 (198) (187) 48 351 198 +153 27 27 98 (48) 28 21 351 Q1-25 Passenger revenue Cargo revenue Other revenue* Non-fuel costs Fuel costs FX Q1-26 Q1-25 BA IB (excl. LEVEL) VY EI IAG Loyalty Other* Q1-26 2.8% Operating margin 4.9% 2.8% 5.5% 9.1% (4.6)% (24.5)% 20.1% 4.9% *Other revenue includes MRO and Handling businesses, IAG Loyalty (including British Airways Holidays) All metrics are shown before exceptional items *Other includes LEVEL, IAG Cargo, IAG GBS, ICAG and consolidation adjustments 2026 Quarter One Results 6 Improving margins across most of our businesses Q1 2026 (€m) vLY 420 (4.1)% 406 (3.4)% (103) (48) (24.5)% (12.0)pts 6,795 +4.6% 5.97 (7.6)% 5.82 +2.4% Total revenue Passenger revenue Operating result before exceptional items Operating margin before exceptional items ASK (m) PRASK (cts/p) Non-fuel CASK (cts/p) 579 Q1 2026 (£m) 290 116 20.1% +3.4pts vLY +10.0% +1.8% +28 Q1 2026 (£m) vLY 3,389 +7.1% 3,167 +8.2% 186 +90 5.5% +2.5pts 41,045 (0.3)% 7.72 +8.5% 5.66 +4.1% Q1 2026 (€m) vLY 1,808 (1.1)% 1,352 +4.5% 164 +27 9.1% +1.6pts 20,577 (1.1)% 6.57 +5.6% 6.20 (1.5)% Q1 2026 (€m) vLY 616 +8.6% 609 +8.0% (28) +27 (4.6)% +5.1pts 8,961 (1.9)% 6.80 +10.1% 5.05 +5.5% +35 132 IAG Loyalty operating profit on pre-HMRC VAT dispute basis: Iberia figures exclude LEVEL 2026 Quarter One Results 7 Demand driving strong yields in all our markets PRASK 1 Total PRASK ccy 2 ASKs Q1 3.5% 8.2% +0.2% CRASK Europe CRASK ccy ASKs Q1 3.5% 6.0% -1.6% CRASK Domestic CRASK ccy ASKs Q1 16.8% 18.2% -2.5% 22.9% of Group Q1 ASKs 8.2% of Group Q1 ASKs North Atlantic CRASK CRASK ccy ASKs Q1 -0.2% 6.8% -0.4% CRASK Asia Pacfic CRASK ccy ASKs Q1 3.4% 8.6% +19.3% 27.7% of Group Q1 ASKs 5.0% of Group Q1 ASKs Latin America & Caribbean CRASK CRASK ccy ASKs Q1 4.5% 9.2% +1.9% 22.8% of Group Q1 ASKs Africa, Middle East & South Asia CRASK CRASK ccy ASKs Q1 2.1% 8.2% -2.2% 13.4% of Group Q1 ASKs 1 PRASK represents total passenger revenue divided by ASKs. Regional CRASK represents passenger revenue excluding certain items that are not directly assigned at a route level (e.g. joint business payments/receipts, FX hedging gains/losses, EC261 & UK261 compensation, and adjustments to assumptions for unused tickets). 'ccy' represents data at constant currency. 2026 Quarter One Results 8 2 Regional constant currency data presented is not an IFRS metric, and is based on internal IAG analysis to provide a directional view of foreign exchange impacts, particularly given the significant impact of the US dollar and Sterling in IAG accounts. Q1 non-fuel unit costs in line with our expectations, with FX benefit Cost category Q1-26 unit cost (% vLY) Q1 2026 Employee 0.5% Reflects capacity-driven headcount growth and the impact of wage deals Supplier* (4.0)% Transformation initiatives partially mitigated inflationary pressures Ownership 10.0% Increase driven by new aircraft, alongside customer-focused and digital investments Total non-fuel (0.9)% Fuel 0.9% Fuel prices increased from late February, reflecting the conflict in the Middle East; the impact on the quarter was largely mitigated by jet fuel contract pricing mechanisms and the Group's hedging strategy Total unit cost (0.5)% *Supplier costs include costs related to growth of the Group´s non-airline businesses, including Iberia´s MRO and Handling businesses and British Airways Holidays Numbers in brackets indicate favourable movements All metrics shown are before exceptional items 2026 Quarter One Results 9 Adjusted EPS increased by 56.5% in Q1 2026 Three months to 31 March €m Before exceptional items 2026 Exceptional items Reported 2026 Before exceptional items 2025 Exceptional items Reported 2025 Revenue 7,181 - 7,181 7,044 - 7,044 Operating costs 6,830 - 6,830 6,846 - 6,846 Operating profit 351 - 351 198 - 198 Finance costs (180) - (180) (219) - (219) Finance income 62 - 62 85 - 85 Net change in fair value of financial instruments 162 - 162 75 - 75 Net financing credit relating to pensions 27 - 27 21 - 21 Net currency retranslation (charges)/credits (23) - (23) 134 - 134 Other non-operating credits/(charges) 23 - 23 (55) - (55) Profit before tax 422 - 422 239 - 239 Tax (121) - (121) (63) - (63) Profit after tax 301 - 301 176 - 176 Adjusted EPS before exceptional items (€c) 3.6 2.3 2026 Quarter One Results 10 €m 31 March 2025 31 December 2025 31 March 2026 Gross debt 15,486 14,267 14,244 of which bank and other loans 1,706 1,978 1,802 of which asset financed and lease liabilities 13,780 12,289 12,442 Gross debt / EBITDA before exceptional items 2.2x 1.9x 1.8x Cash, cash equivalents and interest- bearing deposits 9,357 8,319 10,061 Net debt 6,129 5,948 4,183 Net debt / EBITDA before exceptional items 0.9x 0.8x 0.5x Total liquidity (cash and facilities) 12,355 10,948 12,731 Continued balance sheet strengthening *Rolling last four quarters EBITDA before exceptional items Net leverage of 0.5x, reflecting strong profitability and cash generation Gross leverage of 1.8x, driven by higher EBITDA* Total liquidity (cash and facilities) of €12.7bn Investing in our fleet: one A321XLR delivered in Q1 17 deliveries expected in 2026, majority of which unencumbered Full Year capex expected to be €3.5bn 2026 Quarter One Results 11 Middle East Conflict Capacity c.3% of total Group pre-conflict ASKs flew to the Middle East region some redeployment to markets benefitting from diverted demand further fleet resilience added to better manage engine supply chain issues Jet fuel hedging and availability well-hedged for the rest of the year at 70% as at 5 May confident of jet fuel supply in our main markets through the summer regular assessment of longer term schedules 2026 Quarter One Results 12 Outlook Well-positioned to manage current headwinds due to the unique strengths of the Group Demand continues to be robust; booked revenue at 80% for Q2 Expect to be able to recover c.60% of higher fuel cost through revenue and cost initiatives, with a strong track record of execution Expect impact of higher fuel cost to result in lower profits and free cash flow than originally anticipated Continued strong free cash flow generation - on track to continue with the remaining €1bn of excess cash return programme Confident in our business model and strategy to prove our resilience 2026 Quarter One Results 13 Appendices Modelling assumptions FY2026 Capacity will be lower than the 3% increase guided at full year results in February as a result of our actions taken already. At present we expect it to increase by c.1% in Q2 and c.2% in Q3. We continue to review our longer term capacity plans. Based on the fuel curve as at 5 May 2026, including our hedging positions and sustainability costs, our fuel cost would be c. €9bn. We continue to execute our hedging policy and are currently 70% hedged for the remainder of the year with a mix of instruments. We expect to recover around 60% of the higher fuel cost during this year through revenue and cost management, reflecting the mix of markets in which we operate. We continue to expect to generate significant free cash flow in the year but given the impact of the Middle East conflict for it to be less than the €3bn guided at full year results in February. Capex is now expected to be around €3.5bn (from €3.6bn previously). 2026 Quarter One Results 15 Fuel hedging - 70% hedged for 2026 Effective blended price post fuel and FX hedging* $1,065/mt $1,035/mt $1,005/mt $975/mt $945/mt $950/mt As per Q1 2026 results Jet fuel price scenario $/€ scenario Hedge ratio Q2 2026 $1,460/mt 1.155 75 % Q3 2026 $1,310/mt 1.155 68 % Q4 2026 $1,160/mt 1.155 62 % Q1 2027 $1,060/mt 1.155 49 % Q2 2027 $960/mt 1.155 40 % Q3 2027 $960/mt 1.155 35 % As per Q1 2026 results Jet fuel price scenario FY 2026 Fuel cost c€9.5bn c€9.8bn $1,460/mt $1,660/mt c€8.0bn c€8.5bn $760/mt $960/mt $1,260/mt c€9.0bn Sensitivity Full year 2026 fuel cost expected to be c.€9.0bn based on jet fuel forward curve and foreign exchange rates at 5 May 2026 * Effective blended price excluding into plane cost 2026 Quarter One Results 16 Q2 and Q3 capacity plans Airline contribution to IAG ASK growth by quarter vLY 0% +1% +2% Q1-26 Q2-26 Q3-26 BA Iberia LEVEL Aer Lingus Vueling Note: British Airways includes BA Cityflyer and BA Euroflyer; Iberia includes Iberia Express 2026 Quarter One Results 17 Measure IFRS/APM Definition Source of calculation Adjusted earnings per share APM Based on results before exceptional items after tax and adjusted for Q1 2026 Interim Management Statement (alternative performance measures section, earnings attributable to equity holders and interest on convertible bonds, note b: Adjusted earnings per share) divided by the weighted average number of ordinary shares, adjusted for the dilutive impact, when applicable, of the assumed conversion of the 2028 Bonds and employee share schemes outstanding. Capex (or gross capital expenditure) IFRS Acquisition of property, plant and equipment and intangible assets per Direct from Cash flow statement (Net cash flows from investing activities) cash flow statement Cash IFRS Cash and cash equivalents and Current interest-bearing deposits Direct from Balance sheet (Current assets) EBITDA before exceptional items APM Operating result before exceptional items, interest, taxation, depreciation, Q1 2026 Interim Management Statement (alternative performance measures section, amortisation and impairment. note d: Gross and Net debt to EBITDA before exceptional items) Free cash flow APM Net cash flows from operating activities, less the cash flows associated FY 2025 Results Release (Reconciliation of alternative performance measures with the acquisition of property, plant and equipment and intangible section, note d: Free cash flow) assets reported in net cash flows from investing activities from the Cash flow statement. Gross debt IFRS Total borrowings (current and non-current) Direct from Balance sheet (Current liabilities, Non-current liabilities) Gross debt to EBITDA before exceptional APM Based on Gross debt (per above) and the rolling 12 month EBITDA before Based on Gross debt (per above) and Q1 2026 Interim Management Statement items (or Gross leverage) exceptional items (alternative performance measure section, note d: Gross and Net debt to EBITDA before exceptional items) Liquidity (or Total liquidity) APM Cash (per above) plus committed and undrawn general and overdraft Q1 2026 Interim Management Statement (Reconciliation of alternative performance facilities, and aircraft-specific financing facilities measures section, note f: Liquidity) Movements in working capital IFRS Net movements in working capital per cash flow statement Direct from Cash flow statement (Net cash flows from operating activities) Net debt IFRS Gross debt (per above) less Cash (per above) Q1 2026 Interim Management Statement (Reconciliation of alternative performance measures section, note d: Gross and Net debt to EBITDA before exceptional items) Net debt to EBITDA before exceptional APM Based on Net debt (per above) and the rolling 12 month EBITDA before Q1 2026 Interim Management Statement (Reconciliation of alternative performance items (or Leverage) exceptional items measures section, note d: Gross and Net debt to EBITDA before exceptional items) Operating profit (and other Income APM See Q1 2026 Interim Management Statement (alternative performance Q1 2026 Interim Management Statement (alternative performance measures section, statement items) before exceptional items measures section, note a: Profit after tax before exceptional items) note a: Profit after tax before exceptional items) Unit measures (PRASK, Fuel CASK, Non Fuel APM Passenger revenue, fuel costs, non-fuel costs (before exceptional items) Glossary in the 2025 ARA CASK) divided by capacity (ASKs) Alternative Performance Measures (APMs) and terminology definitions Where the term ARA is used this refers to both the Annual report and accounts and the Annual Financial Report. 2026 Quarter One Results 18 Attention : This is an excerpt of the original content. 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