Ryanair Holdings PLC (RYAAY) 2020 Q3 法說會逐字稿

Hello and welcome to the Ryanair Q3 results conference call.

(Operator Instructions) And just to remind you, this conference call is being recorded.

Today, I'm pleased to present Michael O'Leary, CEO.

Please go ahead with your meeting.

Okay.

Good morning, ladies and gentlemen.

You're all welcome to the Ryanair Q3 results conference call.

You'll have seen this morning, we -- on the website, we listed the Q3 results press release.

The slide presentation is there.

There's a video MD&A and also the written MD&A.

So I'll take all that as read and we'll shoot straight through to questions -- Q&A.

A couple of quick themes.

Obviously, the headline numbers, the Q3 has performed strongly.

That mirrors the earnings upgrade that we issued in the first -- or second week of January.

The Q3 profit went from a loss of EUR 66 million last year to a profit of EUR 88 million this year.

Really, most of the impact there was the stronger Christmas and New Year holiday booking period.

Forward bookings remained about 1% stronger book than they were this time last year.

Strong ancillary sales continued, thanks to great work at Labs that they're doing on increased personalization and more and more customers continuing to take up optional reserved seat, priority boarding services.

Unit costs remained particularly strong, up only 1% in the quarter.

Despite the fact that we expected to be operating some 20 or 30 MAX aircraft during this quarter, without those aircraft, which will keep that cost reduction, we still delivered unit cost of just 1%, excluding fuel, which I think is the stellar performance in the quarter, particularly against our -- the peer airlines in Europe.

Key as well, and that has been a much stronger performance, and on-time performance has significantly improved.

We're typically now averaging 90% and that is translating into much lower EU261 claims and complaints.

There's a couple of key issues that I know will come up in the Q&A so I thought I might try and head them off first.

On the MAX aircraft, we've now accepted -- we had a meeting with Boeing in Chicago 2 weeks ago.

We now accept it's highly unlikely we would get any of the MAX aircraft in advance of the peak summer months of July and August, and therefore, we've deferred the first of our MAX deliveries until September, October at the earliest.

Boeing's best guess now is that the MAX will be back -- the grounded MAX in North America will be back flying, hopefully, by the end of June, early July.

But it would take at least another 2 months for our aircraft, the MAX 200, to be approved and delivered.

Even when it is delivered, I think the delivery rate is going to be slower than historically.

Boeing are going to slow down the production rate.

They're not going to carry forward defects down the production line, which I think is the right thing to do.

We've seen a lot of delivery issues with some of our more recent aircraft, and I think Boeing is focused on quality of the aircraft is the right one once they've got the MAX back in service.

What that means for us is obviously, much slower growth in FY '21.

We now expect very modest growth through the summer of 2020.

In fact, Lauda will probably account for most of our growth this summer.

It also means we're going to have to slow down our original kind of growth expectations, which were we would grow to 200 million passengers by FY '24.

That now will run 1 or 2 years later than that depending on the timing of deliveries.

But for the kind of the back-of-the-envelope assumption at the moment is that our deliveries will all move back by at least 12 months.

We're originally supposed to take 5 aircraft in advance of summer '19, then 50 aircraft before summer '20, '21, '22, '23.

It's now likely we will only get, say, we think, 50 aircraft in advance of summer '21, '22, '23, '24, which would mean our 200-million passenger target will now move out 12 to 24 months into FY '25 or FY '26.

There's no point in wasting any part of the time on that issue, we won't give any further color on it until we get the final -- Boeing are able to get the MAX aircraft back in the air, returned to service, and we have a firm date for the delivery of the first MAX 200.

Then we'll sit down with Boeing, redo the schedule, delivery schedule, based on what they can achieve and then we will update the market with our traffic growth at that time.

But what it means certainly for next -- this year and next year is slower traffic growth.

That's probably good for underlying yields since we are the one who deliver -- we're the airline that grows most and fastest in Europe and if we're growing slower, there's probably upward momentum on our fares and yields and less kind of capacity pressure in Europe, particularly as you have the other failures, the Thomas Cooks, the Adrias and those and we think there will be more to come.

And I want to touch briefly on the Flybe rescue in the U.K., which is a patent breach of state aid rules and competition rules.

There are no circumstances under which the U.K. government should be bailing out what has been a chronically loss-making airline for the last 20 years.

It is now owned by a bunch of billionaires, including Branson, Delta and a venture capital company in the U.S. They bought it for only GBP 2 million last year.

And if they don't want to put their hands in their pockets and give it GBP 100 million, which is chump change to these guys, there's no way the U.K. government should be intervening and lending money to an airline that can't make money because it can't compete at the regional U.K. airports with the Ryanairs, easyJets, with Jet2s and others.

This is reminiscent of bailing out British Leyland in the '70s.

It was a stupid idea in the 1970s and it's an equally stupid idea now in the 2020s.

The fact that Virgin and their shareholders appear to be switching the Heathrow slots, the valuable Heathrow slots, presumably at no cost into Virgin, Delta and others, while Flybe's valuable Heathrow routes are transferred to Gatwick where they have no connectivity, shows that the British government is just being gamed by these billionaires.

And if they had brains or balls, they'd tell Branson to go and write the check himself instead of bailing it out themselves.

So we will continue to viciously oppose the Flybe state aid anticompetition bailout.

It's a disgrace and shouldn't take place.

On Brexit.

Obviously, the Brexit has now happened.

Nothing will change for -- until the end of December of this year.

Although the new music in the background is negative, the British are talking tough about nonalignment and all the rest of it, in which case, that will be negative certainly for the airline industry and for an agreement of the continuation of the Open Skies regime.

I assume sometime by middle of the year, the British will have to talk -- somewhat less talk since they don't have much of a negotiating position, but it's an area that I think investors should continue to keep a wary eye on.

We'll have much more clarity on it by the time we get to the end of June, which would be the kind of deadline for the British successfully concluding these genius negotiations they're proposing.

Lastly, coronavirus.

We -- again, I think it's useful at the moment in that it will help to temper some of the irrational exuberance that is beginning to build in the low -- in the airline sector on fares and yields into the summer.

We should be cautious.

Yes, we've had a very good run through Q3.

Q4 looks reasonably okay, although there's no Easter at the end of Q4.

Into the summer, I think all the trends are generally positive, but I would say mildly positive and I know there'll be a lot of analysts out there going, "It'll be strongly positive."

There is a risk at the moment that the coronavirus could spread to Europe.

We've seen even this morning some people on short-haul flights between Ireland and the U.K. wearing bloody facemasks as if it made any difference to them.

And I would just be cautious.

Longer term, we don't think the coronavirus will have any impact whatsoever.

Our experience of the SARS and the avian bird flu 5, 6 years ago, was that actually it was mildly good for the short-haul business here in Europe.

More people were likely to holiday in Europe rather than traveling long haul to Asia, et cetera, and we would think that will play out again.

But we should be wary on the short-term impact.

Other than that, fuel continues to be slightly weaker than normal.

We're very pleased to have hedged out our 90% for the next 12 months at just over $60 per barrel.

That would be a very significant fuel saving even allowing for volume growth of ETS next year of something of the order of about EUR 150 million.

We are beginning to hedge out into FY '22 at the moment at prices that are around $56, $57 per barrel.

I would be generally of the view that fuel is likely to kind of fall further rather than rise, but that can always be overtaken by political considerations.

So our focus on the moment and certainly, by the time we get to the full year results in May, will be to have a modest portion, 30%, 40% of each of the 4 quarters of FY '22 hedged away, but I wouldn't be in any rush to hedge away 90% because we just need to guard against falling fuel prices.

Other than that, I know everybody will be on the call.

Please don't ask us the same 2 stupid questions is what's the Q4 yields going to be, we don't know; and what's the summer 2020 yields, we don't know.

We think there is probably modest upside in the yield outlook at the moment given the capacity constraints.

But if there were to be any severe outbreak of coronavirus here around Europe, again, we should be cautious at the moment.

If the reality turns out to be better than we expected, then it would translate directly to an improved bottom line.

But I don't think it's too early in the year for us to be forecasting a better bottom line.

Other than that, we will continue to manage costs closely.

I note, based on the published results now, our unit costs were 24% lower on a per-passenger basis than Wizz who claimed to have lower cost than most, but then they're clearly mathematically challenged.

And we are 44% on a per-passenger basis lower than easyJet and we will continue to use that cost advantage to roll out the successful low-fare formula across Europe where nobody else is able to compete with us.

Neil, anything you want to add to that before we open up for Q&A?

So the only area we didn't cover was the balance sheet, which is in very good shape.

We've distributed EUR 440 million to shareholders through the buyback, the EUR 700 million buyback.

We're extending that out now to the end of July.

And our key focus over the next kind of 12, 18 months will be the repayment of maturing debt.

We've got about EUR 1.3 billion of debt with coupons around 2% maturing.

So we strengthened up the balance sheet more, take some of the costs off the P&L.

And as Michael said, the cost leadership remains supreme.

Okay.

Right.

Let's go Q&A.

And we're going to restrict everybody to 2 questions, please.

(Operator Instructions) Our first question comes from the line of Daniel Roeska from Bernstein Research.

Firstly, on the delay of the 200 million passenger target, how does that impact your thinking around the EUR 2 billion profit goal?

Is that still achievable by '24?

And what would make up the shortfall?

And then, secondly, maybe more broadly, not specifically on your capacity.

But as we mentioned earlier, slower growth translates into better fares.

Once the MAX is back and we're back to normal in the sector, would you want to go back to your old high-growth, load-active approach?

Or given the slower macro environment, are you actually kind of thinking a little bit differently about growth into the next 3 to 5 years possibly this time?

Okay.

Yes.

Can I take the second one first?

As soon as the MAX is delivered, we'll take as many of them -- or we'll take 50 in the year.

We have no intention of moving away from our load factor-active, price-passive.

We are the dominant -- or we're not the dominant, but we are certainly head and shoulders above every other airline in Europe.

What they -- some of the analysis of this growth omits the relevant fact that actually the MAX 200s will significantly lower our unit cost going forward for the next 4 or 5 years and will widen the cost gap between us and our competition.

And there's no point in having cost leadership over the competition unless you use it to take more market share and push others out of the way.

I'll give you an example of that.

Even today, with the announcement that easyJet are withdrawing more capacity from Vienna where the competition, led by Lauda, is getting a bit too intense for them, that is being replicated all over Europe.

I draw attention to Wizz' more recent comments where they don't like competing in Central Europe, they want to go off to further east, down into the Middle East because Europe is just a market share play.

Well if it's the market share play, we'll be the ones taking the market share because we have lower costs.

The kind of lazy analysis that we should all just -- Ryanair should just stop growing and we just start making out on higher fares and bigger margins is ultimately doomed to fail because you're inviting somebody else to come in with additional lower capacity and ultimately damage our margins.

We will always expand capacity where that capacity will lower our unit cost because if we can lower our unit cost, it goes further in enabling the advantage over all competition.

I'm not overly wedded to the EUR 2 billion profit forecast.

It will happen sometime before or after we get 200 million passengers a year, but only in a couple of years where we have reasonably steady-state fuel.

The challenge we have, I mean, I think our -- the steady-state of this business should be about EUR 10 per passenger net profit.

It tends to migrate or move around a bit when oil is volatile as it has been for the last 2 years and there was excess capacity in Europe, mainly from numbnuts like Norwegian expanding heroically and losing money hand over fist.

That seems to have been reversed.

In recent quarters, we see Norwegian now reducing capacity by about 25%, which is entirely an intelligent approach to their failed business model.

But much more fundamentally, even Eurowings, Lufthansa are taking out a lot of short-haul, loss-making capacity in the German-Austrian market and that's something we haven't seen before.

The fact that they're closing the 7 aircraft base in Vienna this summer, I think is a very significant structural shift by Lufthansa who in the past would have -- they've been willing to lose money forever and a day to eliminate competition.

I think they're beginning to learn you won't eliminate Lauda or Ryanair.

We have no great designs on the German market, I hasten to add, but we'll expand there slowly.

But we will hit the EUR 2 billion profit target.

On what year, not that fussed.

It'll be on whatever year we have a reasonable stability on oil.

And it may come sooner rather than later if capacity in Europe continues to be constrained for the next year or 2.

But the downside of capacity constraint and a more benign yield environment, it would mean that loss-making failures like Flybe and Norwegian and others may survive another year or 2, where, frankly, I would prefer to have more capacity growth and see them all jump over the cliff, which would be structurally better for the industry as it migrates inexorably towards 4 or 5 major players across Europe.

Next question comes from the line of Jarrod Castle from UBS.

Two.

Staff relationships, can you just talk a little bit about base closures and any outstanding settlements, how the relationships are progressing?

And then just, secondly, obviously -- and the video alluded to, obviously, all these carbon taxes.

How does Ryanair think about the increasing carbon taxes versus the amount of capacity going into those markets versus trying to pass some of it on to your customers?

So I guess should we see you move capacity around related to that?

Okay.

Staff relations are generally very good.

Eddie, Darrell and the team, I think have done an outstanding job over the last 18 months.

We now have CLAs in place in countries like Germany.

Ireland, the union withdrew their court claim last Friday.

We're in very close -- we're in close dialogue with the unions in the U.K., with Spain and Portugal where we're nearly -- I think we're getting close to agreement there.

The deals are now done in Italy, in Germany, in France.

Anywhere else I'm...

Belgium.

And Belgium.

Yes, there are base closures, but this is a reality for us.

It's not because -- we have base closures because we have been -- we're short 55 aircraft from our original plans for December 2020.

There is no pilot shortage at the moment nor will there be a foreseeable pilot shortage for the next number of years.

We are working closely with both the unions and our people at the bases that are being closed: in Spain, in Germany, in Scandinavia.

We're offering pilots and cabin crew transfers to other bases where we -- if those bases are being closed.

So it's very much a voluntary situation.

If people don't want to accept the base transfer and want redundancy, then that's fine, they can have redundancy.

But we're meeting our legal obligations in all those countries.

And I think the lack of -- I wouldn't want to overplay it.

Is everything fantastically warm -- everything fantastically warm and friendly?

No, but it's very professional.

We're dealing with the unions in a very professional manner.

And to be fair, in most countries, I think we have moved from being what would have been a very adversarial relationship over the last 30 years into a reasonably professional regular meeting, don't necessarily agree on everything, but we find a way through solution with all those issues.

And I think you've seen that by the absence of any further labor issues.

That's not to say there may not be some outbreak of labor issue somewhere next summer or during peak periods, but as we demonstrated last year when threatened with strikes in the U.K. and Ireland, we will face those down.

We will not change our position.

But given that we are now back into -- I mean, I think the strongest sign and signal I could give you there is we're back now recruiting to death.

We had a temporary -- and we've had to kind of slow down the recruitment and training of pilots simply because of the MAX delays.

But we'll be one of the few airlines here that has growth coming in the next number of years with 210 MAX aircraft on order.

We have promotions, recruitments, promotions to captaincy coming through.

And I would have thought the employment environment as an airline for -- among pilots and cabin crew has never been more favorable towards the airline, whereas in 2017, when you had the likes of Norwegian running around offering everybody stupid contracts, promises of long haul, 787s and all the rest of it, it got very -- the market very tight there for a period of time.

On the carbon taxes, I think it's something we should be wary about.

Over the medium term, carbon taxes won't alter the price advantage or the cost advantage that passengers flying Ryanair have over every other airline competitor.

And therefore, not unlike APD in the past or the German taxes, there's a short-term impact where the airlines have to absorb some or all of the tax increase.

But over the medium term, the business rights itself.

And I think we've had significant success, but I'd be more optimistic in heading off a lot of carbon taxes.

The new EU Commission was very strong on impacting aviation.

I think governments around Europe now, particularly those who are heavily reliant on tourism, the Spanish, the Portuguese, the Maltese, the Irish, for example, are now much more nuanced in -- we're not having kind of a Dutch or Belgian tax alleviation when their aviation is a tiny proportion of their GNP, whereas the more peripheral countries certainly in Eastern Europe, the Spanish, the Portuguese, the Italians are now much more wary, well, hang on, we want to see improvements in emissions and carbon reduction.

But simply taxing air travel will do untold damage to their tourism industry.

And Ryanair has been very much at the fore of that by we put the environmental policies front and center.

People switching to flying Ryanair are cutting their emissions by up to 50% if they're switching off legacy carriers in Europe, particularly on short haul.

And I think even consumers are becoming more educated that actually flying on low-cost carriers with high load factors and high seat density is the more environmental way to travel.

Business is bad and first is worst in terms of travel when it comes to emissions, I think that message is getting through.

So we certainly should be wary in the short term of carbon taxes, but maybe over the medium term, I think it will have no impact since it won't impact the cost or price advantage we have against every other airline in Europe.

And that is a structural advantage that many analysts keep forgetting about.

I don't think ultimately it will affect our growth or our profitability.

Next question comes from the line of Mark Simpson from Goodbody.

Couple of things.

I wonder if we could have an update on CapEx guidance given the stopping of the PDPs.

Ancillary, obviously, we're analyzing some of the policy changes coming into -- through the last quarter.

Can you give us an idea of yield management success before the ancillary?

What's a kind of run rate we can think about going forward once those changes have happened?

And if I could sneak the last one in.

I mean, you talk about 50 MAX as the maximum in the year.

You did change your schedule on the last financial reporting accounts where you were suggesting maybe 60 in FY '21 or 57 in '22.

I'm just wondering if that 50 cap you're talking about now is a reflection more of Boeing issues rather than your capacity.

Yes.

Thanks.

I'll take the last 2 first and then, Neil, ask you to just update on CapEx.

The 50 MAX is more a reflection, I think, now of the Boeing capacity to deliver.

It's also -- I mean, we -- Boeing, at one stage, wanted to deliver 90 aircraft next winter.

So we said, forget it.

We're not taking that kind of growth in an airline that has 550 aircraft.

It's too much and we don't think it would be a safe thing to do.

I think 50 is a reasonable estimate.

It also kind of has a kind of a practicality in that we just roll back our order by 12 months.

If you take the combination of the backlog of aircraft that Boeing have to deliver, which is about 450, 500 planes, 20 of those are ours.

But then their policy -- the policy of the new management team that instead of carrying defects down along the production line, they will stop the production line and fix all defects where they identify them, which I think is much more -- a better or a higher quality way of producing the aircraft.

We don't see them returning to producing 55, 52 or 56 aircraft a month for 12 or 24 months as they start production.

So once they get the airplane back in the air, their next challenge is going to be getting all the grounded aircraft up in the air, then getting nearly 500 of their backlog delivered, then we start in the production line, which will be lumpy and bumpy.

So I think we will do well to get 50 aircraft in the -- in, in time for summer of '21 and for summer of '22.

Now thereafter, I probably do want to stagger the growth ourselves.

So it's a mix of both.

It's generally in the early year or 2, it's Boeing related and in the later year or 2, it's we don't want to be growing at kind of breakneck speed ourselves because as Europe is consolidating, there aren't that many more opportunities for like Vienna came up last year where there's a large airport with a significant gap in slots.

And I think that's kind of more controlled growth going forward.

And I would remember that of the 50 aircraft we will take in '23, '24, '25, probably only half of those will be for organic growth.

At that stage, we'll start taking out some of our 20-year-old older NGs and selling them into cargo conversion programs.

So we are coming to the stage, I think, over the next number of years where instead of growing at 8% or 9% per year because there's a land grab and we want to make sure we grab all the land, I think you will see us grow at a slower, more controlled, maybe 4%, maybe 5% a year.

On the ancillary and yield management success, yes, that continues.

I think we'll give you more of an update on that on the full year when we're on the results road show in front of each one of you.

Clearly, we expect the rate of ancillary revenue growth to slow down now as we begin to lap some of these changes this time last year.

But there is more there in terms of the yield management and some pricing variations as we identify how -- what customer behavior is like.

And that's why the ancillary revenue line in Q3 has been a bit stronger than we -- than the market expected because the yield management is working well where we've begun to lap the introduction of some of these changes.

But I wouldn't want to give any more detail on that today.

We'll do it on the full year results call.

Neil, do you want to update on CapEx, please?

Yes.

There's not an awful lot to update.

Mark, I'm a little bit reluctant to put numbers out there at the moment given that we haven't got a firm delivery schedule from Boeing.

We will be getting into peak CapEx over the next kind of 12, 18 months where we'd see somewhere between EUR 1.8 billion and EUR 2 billion.

But really, I'm not going to break it out at this stage until we've got firmer numbers in from Boeing.

We'll be ramping up the pre-delivery program.

We haven't paid any PDPs in well over a year at this point in time today.

It also starts to get moving once the aircraft starts to deliver.

So a bit like the ancillaries.

I'd hope to be able to give you a lot more detail when we see you in May.

The next question comes from the line of Stephen Furlong from Davy.

So can you just talk about the group airlines?

Maybe just talk about Buzz.

I know it referenced that you're expanding outside of Poland to Prague and Budapest.

And secondly, just go back and talk about Lauda.

Expanding in Vienna, are you happy with progress there?

I know it's a lot of overcapacity in the market or had been and weak fares.

I think so.

I mean, I think Buzz has grown faster than we had originally anticipated.

There's a very good management team there in Buzz.

[AB] supported Juliusz Komorek who's our Head of Regulatory is also the Chairman of Buzz.

A, they have a clean sheet of paper.

They've hit the ground running.

The charter operation in Poland is doing well.

It has several -- in fact, it's a bit constrained this year.

It operates 7 aircraft this year.

We'll probably expand that up to about 10 aircraft next year.

This is a very nice piece of business that makes nice profits.

And Buzz is expanding though.

What we did last year is it took overall the Ryanair bases in Poland.

It's now expanding to take over the Ryanair bases in the other Central European economies mainly because we can move those pilots then off, remember, our 127B, this problem we've always had with the Irish tax on pilots flying Irish-registered aircraft.

By moving these aircraft off Irish AOC and into the Polish AOC and the Maltese AOC, they move now to paying local taxes in the countries in which they live and that's part of our commitment in the union negotiations in countries like Italy, Germany and Spain with Malta.

But it's going well.

They are -- also, they're doing a very good job in Buzz as they are in Malta Air.

Lauda, to be fair to them, they're doing a good job on the airline side.

By any commercial measure, Lauda is doing very well.

Load factor is running at 94%, high on-time performance.

We've restructured the aircraft leasing costs this year.

We were very fortunate, I think, in the last year to be able to expand the fleet with leased A320s.

And there is a sweet spot in the market at the moment for secondhand leased [COs], which are a bit -- are available at a terrific value like $170,000, $180,000 a month on a lease basis.

The only challenge we face with Lauda is twofold: one, we're competing in the German-Austrian market where Lufthansa, certainly last year, were using the Eurowings subsidiary to low-cost sell, dump-pricing in the German and the Austrian marketplace.

We will live with that.

If that's -- the only reason that Laudamotion is losing money is because the fares are significantly lower than they had previously been or than we had budgeted.

But Vienna is filling up.

I mean, Vienna now, this summer -- the other issue with Lauda is we took a strategic decision last year, let's double up, accelerate the growth even if it means losing money.

And by doing that, Lauda, this year, will grow from -- it's gone from 8 aircraft in Vienna last summer to 12 this winter, but it will have 18 -- 19 aircraft in Vienna this summer.

It will be the clear #2 airline in Vienna behind Austrian and about twice the size of Wizz.

Level have essentially withdrawn from Vienna.

easyJet are well on their way to withdrawing and said they've reduced 2 more -- closed 2 more routes this morning, Vienna and one of the Italian destinations, I think Rome or Milan.

But as a result, this summer, Vienna will effectively be full.

It's now slot-blocked mornings and evenings.

And I think Lauda will, over the next year or 2, settle down.

Pricing will kind of -- will come back up, particularly as Eurowings has withdrawn their 7 aircraft from the Vienna market.

So we look at Lauda as being a structural investment in a very significant presence in the Vienna market.

It'll be the #2 airline in Vienna.

Within about 5 years, I think it will overtake Austrian Airlines.

It will carry more than Austrian Airlines, 14 million passengers.

They won't all be in the Austrian market.

And it is successfully opening a new base in Palma.

This summer, it will be up to 8 aircraft.

And in Zadar, which was a Ryanair base, that it would open up and operate, we're looking for new base opportunities at Lauda in the next year or 2 to spread our dependence slightly away from Vienna and Stuttgart and Düsseldorf.

But it's been disappointing from a financial point of view, but it's an investment in a structurally, I think, important market, in a structurally important country.

And by growing aggressively, we have kind of closed out that opportunity to Wizz, to Level, to easyJet who were all talking of Vienna 12 to 24 months ago and now no longer do.

Malta is growing strongly.

It'll be up to about 120 aircraft this summer.

And again, primarily because we've moved aircraft off the Irish register onto the Maltese register, which allows all the German pilots and cabin crew, the Italian pilots and cabin crew, to now pay their taxes in Germany and in Italy instead of in Ireland, which is very much one of the key demands that the unions were making in our negotiations with those.

It means there would be less taxes paid here in Ireland, but that was an inevitable by-product of the government's refusal to alter Section 127B, which only affected Ryanair because we're the only airline with bases all over Europe on an Irish AOC.

It's regrettable, but that's -- nevertheless, it was the choice of the Irish government.

So they're going well, and we would expect them to continue to grow over the next year or 2.

And the next question comes from the line of Jaime Rowbotham from Deutsche Bank.

Two for me.

First would be to just challenge you a little bit on the guidance for this year, which does seem conservative.

I know you don't want to commit to what 4Q fares will be and I know it won't be easy to progress ancillaries as much post the anniversary of the bag policy change.

But with fares tracking up 9% in Q3 and I saw a very soft comparative on fares in Q4, that something north of 4% on full year revs per seat might seem rather likely.

If you could also comment on ex fuel unit costs, it would be good to know if there's anything in terms of phasing that might make a repeat of the plus 1% in Q3 hard to replicate somehow.

The second one was just on the balance sheet.

Neil, in terms of the focus on reducing debt with expenses, historic interest rates after the current share buyback program, presumably, we should think about you refinancing that debt at better rates and continuing to use surplus gross cash for buybacks or special divis?

Given that even with the eventual 737 MAX CapEx to assume no releveraging would, I would have thought, see the group quite quickly moving into net cash, which is surely not that efficient.

Okay.

Thanks for the question.

Look, the guidance on Q4, we were surprised ourselves by the strength of the close-in bookings and it was particularly a phenomenon over the Christmas and the New Year holiday period.

We don't see that translating or being as strong again through the back end of February -- the back end of January, mid-February into March.

March doesn't have any Easter in it.

This year, Easter is in the middle of April.

So I think we should continue to be cautious.

I don't see -- we've already upgraded earnings from a range of EUR 800 million to EUR 900 million to EUR 950 million EUR 1.050 billion.

At the moment, we're tracking bang in the middle of that figure.

Now very little might move it up towards the upper end of the range, but very little in terms of coronavirus, a security event somewhere in Europe would move it towards the lower end of that range.

So this year's the year for caution.

And I know -- I think our focus today should not be on what the Q4 fares and yields are going to be, it's what's the Q1 and Q2 fares and yields going to be next summer.

And honestly, we haven't a clue.

But I think it's reasonable to assume that the reasonably benign capacity environment will continue to translate into moderately rising air fares into the first 2 quarters of next year.

Could they rise by more than that?

Yes, they could.

We could have a bumper year next year, but that's certainly not been into any of our forecast.

This is the airline industry.

Just when you think it's going well, there's always some s** show depends or we get visited by some kind of unforeseen event.

So no, we're not going to give you any kind of more optimistic guidance on Q4.

Everything we see at the moment shows us coming in at the midpoint of that range, which is a significant growth in profitability from last year, even allowing for the fact that Lauda is -- the losses in Lauda are higher and we've had to step up the Lauda -- the losses in Lauda as well.

Ex fuel unit costs, again, we think we're still going to be at up 2% on the full year.

We don't have any -- I mean it's a terrific performance.

I mean, a large proportion of that cost performance was going to be -- was predicated on taking 20, 30 MAX aircraft.

We have none of them and yet we're still able to deliver that kind of unit cost performance.

And I would contrast that with, for example, easyJet last week, unit costs up 4%.

Because the usual thing with easyJet, but don't mind the cost increase.

Just look to fares or the big data capture or some other distraction from the fact that they can't control costs.

In Ryanair, we control costs.

This is the year where we've had a flow through of all very significant labor cost increases, big provision on -- for additional handling to improve resilience.

We've lost the -- the MAX aircraft haven't come through.

We've had higher maintenance on the extending out the older aircraft or postpone the aircraft delays.

And you take -- we take all that and we're still able to deliver a 2% unit cost increase.

I think it's a very creditable performance in a difficult year for all airlines.

And next year, we know that fuel is going to kick in a significant saving already because we've hedged it away.

On the balance sheet, Neil can speak for himself, but look, on the balance sheet, there won't be another share buyback after this one for the next 12 months.

We have EUR 1.3 billion in debt to repay.

The debt is priced at around 2%.

It will have significant impact on our earnings if we repay that debt.

If we don't repay that debt, we're sitting there with substantial surplus cash and we start -- where I have no use for that substantial surplus cash.

And I would rather we were paying down debt.

I don't want to be sucked into the situation of all companies once they start raising bond money or they just start replacing one bond with the other bonds and the debt never gets paid back.

Ultimately, I would like us to be conservative, pay back the debt.

We own all of our fleet of aircraft.

And we will still be generating very significant cash through our annual cash flows.

And who's to say that we won't be -- shouldn't try to be debt-free in the next 4 or 5 years, which will make us not alone, we have the one airline in Europe with a huge cost advantage over everybody else, we'll also be the one debt-free airline in Europe, which will make us an even stronger competitor to everybody else.

Neil, do you want the balance sheet and pay down our debt?

Yes.

I think you covered it well there, Michael.

We already raised some money this year at very cheap levels, 0.65% unsecured for EUR 750 million.

We don't have the need to raise more or refinance the bonds into the next year.

Our working assumption with peak CapEx is that we will also pay down the first maturing bond in June '21.

If we decide to go back at some stage to refinance, it will be at a time of our choosing when it's just too attractive to say no.

But at the moment, taking that 2% interest rate off the P&L makes a lot of sense and strengthening of the balance sheet gives us more flexibility in what we do.

The next question comes from the line of Neil Glynn from Crédit Suisse.

Two for me then, please.

First, Michael, just in terms of the Q&A, on one of the videos this morning, you talked about your 4 key areas of focus over the medium time -- medium term and I wanted to just touch on you mentioned management development.

And obviously, with the individual operating companies developing under your ultimate stewardship, just interested in terms of how that evolves over the medium term.

What would represent success for you in terms of how you develop the management teams of each of those businesses?

Then the second question with respect to the MAX situation and the potential for compensation.

Just interested in your preferences.

I know things are evolving.

But would you prefer cash as a compensation or a discount adjustment to the current order?

Or would you prefer that to be taken care of whenever the MAX order comes?

Okay.

The management development, what we're trying to do -- I mean, I think to be fair, I admire what Willie Walsh did over a number of years in IAG.

We set up the same type of weekly management and media group's meeting structure now where the CEOs of the individual airlines meet with me, the head of regulatory and the group finance function.

That is, I think, resulting in much more an integrated approach among each of the airlines drawing on who could deliver best.

For example, Ryanair is currently doing -- providing the ops and crew control services for Lauda, but that will move to Buzz and Warsaw in about March of this year because they have lower-cost labor and a better supply of it in Warsaw, and it's easier for them where they're currently managing 50 of their own aircraft to take on another 50 from Lauda and reduce some of the dependence we have here on ops here.

So what would I think would be a success?

I think we'd be -- so what I would gauge to be a success in that is that replicating the Ryanair formula in the other airlines over the next year or 2, but beginning then to have seen more management development.

I mean, I'd like to see Polish people coming and taking up middle management positions here in Dublin.

The same thing, Irish people going to middle management positions in Austria.

The Austrians moving across to Warsaw and to Malta.

So much more kind of cross-fertilization within the middle management because it gives us scope for more promotion of kind of our graduate development program coming through.

One of the challenges we've always faced here in Ryanair is a very settled senior management team, so we don't have much kind of promotional opportunities where I think it's much easier to give someone cut their teeth.

If we think there's somebody good in operations, send him over to -- there's a vacancy at the moment for Director of Operations slot in Lauda, send somebody down there for a year or 2, let them be the Director of Operations there and then he becomes a much more -- he or she becomes a much more polished potential replacement candidate for a Director of Operations slot here at Dublin.

So I'd like to see that management development and more mobility between the middle management positions.

On the MAX situation, I mean, again, we're not -- I wouldn't be wedded to one thing or the other.

I mean, the issue -- and I don't want to kind of -- I've got to be careful what I say here.

The discussions with Boeing do not just surround compensation -- well, there's compensation for our lost traffic, lost passengers, lost ancillary revenues.

And there's also, clearly, the MAX has suffered a significant reputational hit as well.

There's no doubt we would have passengers who will be nervous to fly on the MAX when we do take delivery of the aircraft despite the fact that we, our pilots, myself, anybody else, we all believe it's a great aircraft and it would transform Ryanair for the next 5 or 10 years.

And once it's delivered, it will be as successful, for example, as the 787 was once it was back and delivered and after the grounding with the lithium-ion batteries.

So I think we're -- the general disruptions and we can't finalize numbers until, again, we have a confirmed delivery date for our MAX 200s and a revised delivery plan over a 4- or 5-year period.

But the general tenor of it will be we would expect Boeing to reimburse us the direct costs into the FY '20 and FY '21 of lost traffic, lost revenues, some of the cost savings we would have made if we had delivered the MAX on time.

But much more of our focus will be on repricing the deliveries, so that I think there would have to be a repriced deliveries of the new order to reflect the reputational damage going forward.

That is where I see the compensation discussions moving.

And then we are already in discussions with Boeing about we have an offer on the table with them of an order of new MAX 10s, which is the 230-seat aircraft.

To be fair to them, I don't think the new management team is not yet in a position to be able to talk to us about a new order.

We understand that.

But we have the offering, and we expect to be at the head of the queue once they get their kind of heads around looking at the delivery profile.

There is, I think, a concern about the Boeing short-haul aircraft at the moment.

And I think the kind of key critical issues for the new management team in Boeing is: one, get the return to service done; two, get the backlog of aircraft deliveries out of the way; three, get the production back up and running and running well and delivering a reasonable quantum of aircraft on a monthly basis; and four, let's start signing up orders for new aircraft.

And responding back to Airbus have had now a 12- and 18-month kind of lead over Boeing in terms of aircraft orders, and I think the new management team in Boeing needs to be capturing back that lead and the starting point should be their bigger existing customers like Southwest and Ryanair, which would be 1 and 2 in the world.

So really, we're not that focused about compensation.

But certainly, we would be -- we expect to reprice the 200 order we already have, and we would expect to put in place or agree a deal with Boeing on new aircraft pretty soon after the return to service kind of has been resolved.

The next question comes from the line of Savanthi Syth from Raymond James.

Just on the MAX, just on the training side, first question was just you've had 1 SIM.

I'm guessing you're going to plan on training pilots in the basis of the MAXs are going, so maybe 500, 600 pilots for next summer.

Just kind of curious as to just your thought process on if that SIM training is going to be maybe incremental cost pressures early on next year?

And just how you're thinking about what that new SIM training means to you to kind of thinking about increasing the MAX?

And then just a second question, a follow-up on Lauda.

Just how do you see Lauda kind of growth in passengers over the next few years?

Okay.

Thanks for that.

On the SIM training, we have 2 MAX simulators already in situ in Stansted.

A third one is due for delivery in June.

The fact that the first of our deliveries has now been postponed back to September, October means we're in a pretty luxurious position in that we have plenty of time to train MAX pilots going forward.

There's still kind of a debate, though.

I mean it's not clarified yet.

I mean I think if they -- on the return to service, at the moment, it looks like the pilots flying the MAX will need, if you like, an initial simulator session on the MAX simulators.

But thereafter, the recurrent training can be done either on MAX or on NG simulators and that's critical.

We do not want to have a 2-aircraft fleet here.

What is -- but to refer to Boeing, they're very much in the same view.

Once the initial training has been done on the MAX simulator, recurrent training can be done on either MAX or NGs.

And that's critical because we don't mind training everybody initially on the MAX simulator, but on an ongoing basis, we need them to be able to fly NGs and MAX aircraft.

So -- but with the delivery starting point of September, October, for 200 deliveries, we have no issues with MAX training.

We have 2, right, 3 simulators in June.

On the Lauda, I mean, our general profile at the moment is it will do 6.5 million passengers this year.

It will go close to 10 million passengers next year to FY -- probably more likely 9 million, 9.5 million passengers into FY 2021.

And thereafter, again, because of aircraft uncertainty, I think we're looking at maybe kind of 10% growth a year over a 4- or 5-year period.

So maybe add 1 million passengers a year at new bases outside of -- Vienna will be full next year, so there won't be any more growth in Vienna.

We like this that there'd be -- that we don't plan additional growth in Düsseldorf or Stuttgart, again, until the German market kind of settles down.

But we would like to see more developments.

The Palma base will grow.

Zadar, hopefully, will grow with the summer base.

We're looking at the possibility of a Lauda base somewhere in -- maybe in Spain or in Italy and alternatively, something in Central and Eastern Europe.

We would like to see the Lauda footprint of bases kind of expand slightly outside of Austria and Germany.

But that, again, depends on the availability of cheap, secondhand Airbus aircraft.

And that market has tightened significantly in the last 12 months with the MAX deliveries.

We would expect further opportunities to open up, particularly on good secondhand [COs] once the MAX deliveries backlog has been addressed and there is reasonable kind of capacity growth across, certainly, Europe and the world, but that is probably 6, 9 months away.

So very strong growth in Lauda this year.

That's partly why there are more losses in Lauda than we had originally forecast because we're being very aggressive with the growth in that marketplace.

But as a result of that, we will have closed off all the slots in Vienna to -- Wizz, I think, were complaining last week they can't get slots in Vienna and that's essentially because we have them all now.

And we will have a position of significant strength in Vienna, where Wizz, which is unable to compete with us on cost, will continue to be unable to compete with us on cost.

And that would leave us, I think, competing on very favorable terms against Austrian Airways in Vienna whose cost base is probably 2 or 3x higher than that of Lauda.

And I think over the medium term would make Lauda a reasonable prospect for modest growth but significant profitability going forward.

The next question comes from the line of Alex Paterson from Peel Hunt.

You've talked a lot about -- or a bit about taxes.

Do you have a view on whether the fuel duty exemption will be removed in the EU?

And if it was, would you look to pass it on to passengers in its entirety?

I think it's unlikely that it's going to be removed in its entirety because it's almost impossible to ensure a level playing field across Europe.

That's why the fuel duty exemption there already exists.

I think it's much more likely that Europe will tackle it from an environmental tax, which again -- but in -- we've raised it, probably we already have the ETS, Emissions Trading Scheme (sic) [Emissions Trading System], which is, if you like, the fuel tax.

We have APD in the U.K. We have the equivalent in Germany.

This year, we paid EUR 640 million in fuel environmental taxes, more than 10% of the average air fare paid across all traffic.

I think it will be very difficult for Europe to come up with an exemption -- or to remove the exemption on fuel duties, but that's not to say they won't try.

Certainly, countries at the periphery, Spain and Portugal, the tourist-based countries have no desire to see that kind of taxation.

And the Irish tried it 10 years ago, with that EUR 10 environmental tax or travel tax here during the teeth of the recession and it saw air traffic collapse by 50% within 2 years.

So I -- but I think the risk is, in the short term, more environmental taxes, but probably more likely around the center, economies like Germany, the Dutch, the Belgians, to a lesser extent, the French and it's not having any impact on the environment or anything else, but they are economies that have very small air travel segments.

The Deutsche are already talking about a travel tax.

But of course, exempting all of KLM's connecting traffic across Schiphol, which accounts for probably 80% of KLM's traffic, there isn't a big domestic flight schedule in Holland anyway.

So it's an air travel tax in name rather than anything else.

It's also a massive hidden state subsidy to the likes of KLM where easyJet and Ryanair are all either doing short-haul or point-to-point, it's likely Schiphol would have to pay this environmental tax, but of course, KLM would have an exemption not -- because most of their traffic is connecting.

So I think the answer to the question is, I don't think there's going to be a change in the fuel taxes, but the risk is on the environmental taxes.

Juliusz, anything you want to add on that or in terms of an EU policy?

Just to summarize, I think where risk is, is a further tightening of the EU ETS for aviation over the next few years and new or increased national taxes.

An example of it is in Austria where I think the new government intends to increase the tax subject to going through the legislative process.

I do not, at the moment, see a significant risk of an EU-wide tax on air travel or the removal of the exemption on tax and fuel.

The next question comes from the line of Johannes Braun from MainFirst.

Two questions from my side as well.

Back to Lauda, just a more general question and really, this has now been an underperformer for quite some time and you explained why that is.

But still, it has, I think, the highest cost now in the group and the lowest yields at the same time.

So shouldn't you rather shrink that business into elsewhere where profits are higher?

That's the first question.

And secondly, just an accounting question, I guess, for Neil.

In your cash flow statement, the item trade payables, this really exploded by EUR 1 billion compared to this time last year and this obviously boosted free cash flow and thus lead to your solid net debt performance.

Can you just explain why that is?

Sure.

Michael, shall I maybe take that one first?

Okay.

Yes, go on, the PDPs.

Yes, the Boeing PDPs.

So effectively, while you can see the CapEx of EUR 1.4 billion, there's an offset there on the trade payables because we're not paying pre-delivery payments out the door.

That will change as soon as the delivery starts come into the fleet.

Okay.

On the first part of the question, you're correct in your analysis.

Lauda does have the highest unit costs and the lowest yields in the group.

I believe though, the yields are a temporary phenomenon as a result of low-cost selling mainly by the Lufthansa subsidiaries in Austria and in Germany.

The yields out of Palma are quite strong.

I think the yields, once the capacity growth has tapered off, which it will do in summer 2020, you are then into a much more steady-state capacity environment in both Düsseldorf, Stuttgart and in Vienna.

And I think you will see a very significant rise in average yields, certainly out of Vienna once the heroic kind of growth has tapered off.

And I think the very fact that you have somebody like Eurowings withdrawing, closing its 7-aircraft base in Vienna is a significant indicator of what's coming.

You also have Austrian Airlines losing money.

I think -- and the Lauda group generally under significant pressure to explain why they're blowing their brains out losing money in Eurowings without any kind of a structure or without any great strategy.

I think it's inevitable the next year or 2 Carsten and the team in Lauda -- or in Lufthansa will have to see some kind of further capacity cuts in Eurowings, which generally competes only with Lufthansa mainline; fares in the German and Austrian markets, which have been very low for the last 2 years, steady themselves; and then Lauda will be reasonably profitable.

I think the unit cost in Lauda will always be slightly higher than the group average, but I expect that the yields in Lauda will also be higher than the group average going forward.

And it should be a consistent deliverer of similar margins to what we deliver in Ryanair, but with a higher average fare and a higher average cost.

The next question comes from the line of Malte Schulz from Commerzbank.

First of all, maybe also a little bit on the subsidiaries or between the airlines.

I mean you do not disclose -- I mean you say a little bit on Lauda, but you do not disclose maybe margins and cost levels above.

And also, is it something you might take up in the future also that you see, I mean, similar to an IAG, maybe on an annual basis, the performance of the single brands that you see -- or that investors can see where you earn the most and where you have the highest return on invested capital?

And the second question was, your tax rate in the first 9 months were quite low.

Is it also something that we can now look going forward that you will be significantly below 10% for the group?

Okay.

Neil, I'll give you the tax question.

On subsidiaries, going forward, let's say, we are in discussion with KPMG.

There will be some segmental information in the full year results.

There won't be anything remarkable or differentiated between Malta, Buzz and Ryanair.

It's the same aircraft.

They're taking over, for example, Ryanair bases in Central, Eastern Europe.

So they will be consistently, I would have thought, similar or at least the differences won't be material.

It's a question of where we allocate some of the overhead from Ryanair DAC here, which is kind of the group overhead.

Lauda will be slightly differentiated.

I'm not sure whether it's big enough in this year to have segmental information.

But it's likely I think Neil, in discussion with KPMG, will come out with some kind of guidance on traffic and revenues.

We won't be breaking it down to unit costs and yields because that would be kind of commercially sensitive.

But really, there will be no great difference between the 737 subsidiaries between them.

There will be some difference in 737 subsidiaries and the A320 subsidiary.

But how much of that we'll break down, we'll break down as little as we have to.

But there will be some kind of segmental information not dissimilar to what IAG do.

Yes.

So just adding on to that, it's really a factor, obviously, there's strict thresholds in place in which you have to report segments and the level that you don't.

None of our subsidiaries will probably qualify this year.

But as Michael said, we may do some more detail like Lauda.

The rest, as they get bigger, will probably get to a stage where we have to break them out, and when we get there, we will do so.

But in the meantime, Ryanair DAC still remains the main airline in the group.

On the tax rate, for the first 9 months of the year, we had a tax rate of about 7.5%.

I wouldn't expect it to be much different to that, somewhere between 7.5% and 8% for the full year.

The next question comes from the line of Gerald Khoo from Liberum.

A couple from me, if I can.

Firstly, with the sort of growth of multiple brands and AOCs, how are you going to be handling that when you've got multiple brands and multiple AOCs operating in the same country with regards to sort of marketing and perhaps some exceptional on the commercial side and in terms of talks with the unions on the operating side?

And secondly, on ancillary revenues.

You talked about the sort of maturity in priority boarding and seating.

Just wondering where the next opportunity is there?

You hinted at personalization.

Where are the opportunities there?

What's the next big thing on ancillaries really?

Well, I think you identified it yourself then.

Ancillaries is more personalization, which does kind of increase the propensity of people to take up those services.

We kind of pack -- more packaging of those services, which is helping the conversion.

If there was some other line of ancillaries or stream of ancillaries that we were planning, we'd already be doing it.

But we continue to look for opportunities there.

But that's why we've been kind of reasonably cautious on ancillary revenues for the next year or 2. We think the big step-up in growth coming from priority boarding and the reserve seating is done.

There will be a little bit of yield management going forward for the next year or 2, but nothing more than that.

On the brands and AOCs, again, don't get too caught up in brands.

We're not like IAG where you bought established airlines, Aer Lingus, Iberia.

They're all different brands.

They do their own different things.

We're a much more operationally efficient operation.

Most of the sales for Lauda, Buzz and everything, they're still done across the ryanair.com website.

So the sales come across the same website.

The Lauda routes are sold on the ryanair.com website.

They're also sold on a lauda.com website.

So lauda.com also shows the Ryanair sales.

So it's really just the front end for what is a big -- the Ryanair big central sales engine.

Thereafter, we do see the AOCs, it does give us the opportunity for further operating cost efficiencies.

The fact that we can move to local taxation and why the unions wanted local taxation in most of those countries is because personal tax rates are lower there than they are in Ireland.

Ireland has this reputation as being a corporate tax haven.

But it's a very penal country from a personal tax point of view.

You hit the marginal rate at kind of EUR 40,000 a year and you couldn't buy much in Dublin on EUR 40,000 a year.

And it does give us other efficiencies.

So it's helpful in some cases where we may be closing a base because we don't have enough 737s, but if we have some more or spare A320s coming at us, we could reopen that base as Lauda.

Lauda, we do want to export the Lauda brand and the Lauda operation into other countries, so it's not very narrowly focused on just Vienna, Stuttgart and Düsseldorf.

That will also bring further efficiencies to Lauda as well.

And for example, 3 of the 19 aircraft that are based in Vienna this year would be Ryanair 737s operated by Ryanair on behalf of Lauda.

So I regard the separate brands at AOCs as much more, A, separate AOCs, that give us operating efficiency and cost reductions, for example, lower taxation rather than separate brands.

We've never been big players of brands out here.

The key brand here is we have lower costs than anybody else.

We have better operational efficiency than anybody else.

And we now have lower emissions than anybody else as well.

There are no further questions on the phone.

Excellent.

Okay.

No further questions.

Thank you very much for dialing in today.

Again, I will just leave you with a -- caution everybody against kind of irrational exuberance into Q4.

There is a prospect, I think, of a more benign pricing environment out into the Q1, Q2 or to the summer of 2020.

I think all the indications we've seen from easyJet, Wizz and others is that there is a more benign pricing environment in the next summer.

As long as that maintains itself, we could be set fair for a reasonably positive FY '21.

But we should be -- again, guard, cautiously guard against things that could go wrong like the coronavirus epidemic.

We had the security incident in London last night.

But I would be -- we should be reasonably optimistic into the next 12 months.

There are still some cost challenges out there.

ATC will still be a challenge into the summer of 2020.

But certainly, I think the fact that we don't have any MAX aircraft for this year means that we will have less capacity ourselves.

That means we'll be putting less pressure on everybody else's capacity in Europe.

I think capacity in Europe is going fundamentally flat to slightly down of Norwegian, Eurowings and others' capacity.

And that should be a reasonably benign pricing environment going forward where already, we've locked away fuel into next year.

We've hedged away the fuel and secured significant savings.

The MAX will continue to be a slightly movable feast.

We won't have any clarity until Boeing get the aircraft back in the air and then are able to deliver us MAX 200s, but I think that would be more an opportunity into FY '20 -- summer of '21.

For those of you who would wish us to stop growing and just start screwing passengers with higher fares, it won't happen.

As soon as we can take those aircraft, we will take them because they will reduce our unit costs and they will widen the cost gap between us and all the other airlines who can't compete with us on cost here in Europe.

Okay.

Shane is here manning the phones in the Investor Relations desk today.

Neil is in London doing all the PR.

We're not doing a road show.

Obviously, I am -- I will be doing a day in -- or doing a morning in Paris or a day tomorrow in Paris.

I'm doing a day in Frankfurt next week just to keep boosting the European message as we encourage our -- the ADR president to sell down some more stock.

But other than that, look forward to seeing you all on the full year results road show in May.

Thanks very much, everybody.

Appreciate your time and participating in the call.

God bless.

Bye-bye.

This now concludes the conference call.

Thank you all for attending.

You may now disconnect the lines.