Ryanair Holdings plc — Form 20-F Summary
Reporting period: Fiscal year ended March 31, 2021, filed July 27, 2021. The source is an annual Form 20-F, not a standalone 2020 fourth-quarter filing; quarterly results are not separately presented in the provided text. Financial statements are prepared under IFRS in euros.
Business context
Ryanair operates a low-fare, short-haul airline group serving Europe and North Africa through Ryanair DAC, Buzz, Malta Air, Lauda and Ryanair U.K. Covid-19 travel restrictions and lockdowns caused extensive fleet groundings and an unprecedented collapse in passenger traffic. The Group operated approximately 26% of its normal annual schedule, with more than 99% of the fleet grounded for nearly four months.
Key financial and operating metrics
| Metric | FY2021 | FY2020 |
|---|---|---|
| Total operating revenue | €1,635.8m | €8,494.8m |
| Operating expenses | €2,475.2m | €7,367.4m |
| Operating profit/(loss) | (€839.4m) | €1,127.4m |
| Profit/(loss) before tax | (€1,108.7m) | €670.3m |
| Profit/(loss) after tax | (€1,015.1m) | €648.7m |
| Basic EPS | (€0.9142) | €0.5824 |
| Operating margin | (51%) | 13% |
| Booked passengers | 27.5m | 149m |
| Load factor | 71% | 95% |
| Break-even load factor | 108% | 83% |
| Net cash from/(used in) operating activities | (€2,448.0m) | €1,327.1m |
| Capital expenditure | €294.7m | €578.8m |
| Cash and cash equivalents | €2,650.7m | €2,566.4m |
| Cash and liquid resources | €3,150.3m | €3,808.0m |
| Total borrowings, including leases | €5,426.8m | €4,211.2m |
| Shareholders’ equity | €4,646.6m | €4,914.5m |
- Scheduled revenue declined 81% to €1,036.0m; ancillary revenue declined 80% to €599.8m. Ancillary revenue represented approximately 37% of total revenue.
- Total operating expenses fell 66% in absolute terms, but increased to 151% of revenue from 87%, reflecting the high fixed-cost structure and low aircraft utilization.
- Fuel and oil expense declined to €542.6m from €2,762.2m; fuel represented approximately 22% of operating expenses versus 37% in FY2020.
- Staff costs declined to €472.2m from €1,106.9m, assisted by pay reductions and approximately €84m of payroll support.
- Net debt increased to €2,276.5m from €403.2m, based on cash and liquid resources less total borrowings.
- The Group issued approximately 35.2m shares in September 2020, raising approximately €400m gross. No share buybacks were conducted in FY2021.
Material changes versus the prior comparable period
- Passenger traffic fell approximately 81%, from 149m to 27.5m, and sectors flown fell from 823,897 to 204,828.
- The Group shifted from a €1.1bn operating profit and €648.7m net profit to an €839.4m operating loss and €1.015bn net loss.
- Operating cash flow moved from a €1.327bn inflow to a €2.448bn outflow, driven by the Covid-19 operating deterioration, reduced forward bookings and customer refunds.
- Borrowings increased by approximately €1.216bn, principally due to an €850m Eurobond and £600m of unsecured U.K. government and Bank of England CCFF financing, partly offset by repayments.
- Derivative hedge ineffectiveness and discontinuation generated approximately €200m of net expense, including a €192m charge related to jet-fuel hedges.
- The Boeing 737-8200 order was increased to 210 firm aircraft. Deliveries began in June 2021, after the reporting date.
- Employee numbers declined to 15,016 from 17,268, while the Group negotiated temporary pay reductions and job-protection arrangements.
- The Group revised its Boeing agreement, reversing approximately €497m of pre-delivery payables and recording approximately €378m of supplier reimbursement related to delayed aircraft deliveries as a reduction of property, plant and equipment.
Liquidity, debt and commitments
At March 31, 2021, the Group had €3,150.3m of cash, short-term investments and restricted cash against €5,426.8m of borrowings and lease liabilities. Contractual obligations totaled approximately €13.422bn, including €5.244bn of debt, €7.752bn of Boeing aircraft purchase obligations, €189m of operating lease obligations and €237m of future interest payments. Ryanair had approximately €5.432bn of letters of guarantee securing subsidiary obligations.
Management concluded that available liquidity, financing access and projected cash generation were sufficient to meet requirements for at least 12 months from approval of the financial statements. The Group retained BBB ratings from S&P and Fitch and had 378 unencumbered owned aircraft as of July 23, 2021.
Guidance, outlook and management commentary
- Management forecast 90m to 100m passengers for the year ending March 31, 2022.
- The Group expected to operate approximately 83% of pre-Covid schedules in the second quarter of FY2022, with further growth into winter.
- Management forecast a return to profitability and positive cash flow in FY2022 and subsequent years, but emphasized substantial uncertainty from further Covid-19 waves, travel restrictions, yields, fuel prices and foreign exchange rates.
- At June 30, 2021, cash and cash equivalents, restricted cash and short-term financial assets totaled €4,056m; net debt was €1,662m, approximately €615m lower than at March 31, 2021.
- In May 2021, after year-end, Ryanair raised approximately €1.2bn through five-year unsecured Eurobonds carrying a fixed 0.875% coupon.
Principal risks, contingencies and unusual items
- Covid-19 remains the dominant risk, affecting demand, schedules, liquidity, refunds, costs, aircraft utilization and strategic growth plans.
- Ryanair faces fuel-price, carbon-credit, U.S. dollar and sterling exposure. Hedging may be less extensive than historically and may create accounting volatility if forecast flying or aircraft deliveries change.
- The Group is committed to 210 Boeing 737-8200 aircraft, creating substantial future capital and financing requirements and dependence on Boeing delivery and support.
- Legal and regulatory matters include EU state-aid investigations and repayment orders, screenscraper litigation, passenger-refund claims and a U.S. securities class action concerning historical labor and employment disclosures.
- Competition, government support for rival airlines, airport charges, slot availability, labor relations, Brexit, environmental taxes and potential short-haul flight restrictions may pressure margins and growth.
- Aircraft impairment was not recognized despite the year’s losses, because management forecast a return to profitability and positive cash flows. Aircraft valuation, useful life and residual value assumptions remain significant estimates.
- Ryanair’s auditors issued unqualified opinions, but identified hedge effectiveness and aircraft depreciation and impairment estimates as critical audit matters.
Investor verification checklist
- Verify the filing period: this Form 20-F covers the year ended March 31, 2021 rather than a discrete 2020 Q4 period.
- Reconcile reported cash, liquid resources, borrowings, lease liabilities and net debt, including the treatment of restricted cash and deposits exceeding three months.
- Assess the pace and profitability of the FY2022 traffic recovery against the 90m–100m passenger forecast and planned schedule restoration.
- Review the €7.752bn Boeing purchase obligations, delivery schedule, aircraft financing assumptions and applicable supplier credits.
- Evaluate hedge ineffectiveness, fuel and carbon exposure, and the sensitivity of earnings and equity to fuel and currency movements.
- Monitor the outcome and potential financial impact of state-aid, refund, screenscraper and securities litigation.
- Assess whether aircraft carrying values and indefinite-lived landing rights remain recoverable under post-pandemic demand and margin assumptions.
- Consider the impact of Brexit-related ownership restrictions, including restricted voting rights for non-EU and U.K. holders.