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International Consolidated Airlines Group SA (BABWF) (FY 2024) Earnings Call Highlights: Strong ...

In This Article:

  • Revenue: Increased to EUR32 billion, a 9% growth.

  • Operating Profit: EUR4.4 billion, up almost EUR1 billion.

  • Operating Margin: Achieved 13.8%.

  • Return on Invested Capital: 17.3%.

  • Free Cash Flow: Generated almost EUR3.6 billion after investing EUR2.8 billion.

  • Net Debt Reduction: Reduced by over EUR1.7 billion compared to last year.

  • British Airways Profit: Increased 50% to over GBP2 billion.

  • Iberia Operating Profit: Over EUR1 billion, with a 13.6% margin.

  • Vueling Profit: EUR400 million with margins over 12%.

  • IAG Loyalty Profit: GBP420 million, with high double-digit margins.

  • Net Cash from Operating Activities: Just over EUR6.4 billion.

  • CapEx Guidance for 2025: Expected to be around EUR3.7 billion.

  • Share Buyback Program: EUR350 million announced, with up to EUR1 billion excess capital return planned.

Release Date: February 28, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • International Consolidated Airlines Group SA (BABWF) reported a 27% increase in operating profits, reaching EUR4.4 billion.

  • The company achieved a 13.8% operating margin, which is considered industry-leading.

  • Free cash flow generation was strong at EUR3.6 billion after investing EUR2.8 billion in the business.

  • The company announced a share buyback program of EUR350 million and plans to return up to EUR1 billion of excess capital to shareholders.

  • IAG Loyalty continues to deliver high double-digit margins and asset-light earnings growth, becoming the third-largest operating company by profit within the group.

Negative Points

  • Aer Lingus faced significant industrial action and strong competition at its Dublin hub, impacting its financial performance.

  • The company experienced a larger-than-expected negative FX impact in Q4, affecting non-fuel unit costs.

  • There is a requirement to pay EUR557 million of VAT to HMRC, pending the outcome of a legal appeal.

  • CapEx is expected to increase to around EUR3.7 billion in 2025, which may impact free cash flow generation.

  • The Trent 1000 engine issues required capacity adjustments at British Airways, affecting operational efficiency.

Q & A Highlights

Q: On the Loyalty scheme changes, has there been any customer reaction, and can you provide an update on the BA rollout of the new app and website? A: Sean Doyle, Chairman and CEO of British Airways, stated that there hasn't been any significant change in travel patterns or behavior from the executive club since the rollout. The new app and website are performing well, with 65% of routes now booking through the new platform. A beta version of the app is being tested, with a full rollout expected in Q2.