TIDMWIZZ
RNS Number : 0873O
Wizz Air Holdings PLC
08 June 2022
WIZZ AIR HOLDINGS PLC - RESULTS FOR THE 12 MONTHS TO 31 MARCH
2022
ON TRACK FOR RECORD TRAFFIC SUMMER
LSE: WIZZ
Geneva, 8 June 2022: Wizz Air Holdings Plc ("Wizz Air" or "the
Company"), the fastest growing and one of the most sustainable
European airlines, today announces its audited results for the full
year ended 31 March 2022 ("F22").
Full year to 31 March 2022 2021 Change
----------------------------------- ---------- ---------- --------
Passengers carried 27,128,160 10,186,077 166.3%
Revenue (EUR million) 1,663.4 739.0 125.1%
EBITDA (EUR million) (19.0) (182.8) 89.6%
EBITDA margin (%) (1.1) (24.7) +23.6ppt
Operating loss for the period (EUR
million) (465.3) (528.1) (11.9%)
Reported loss for the period (EUR
million) (642.5) (576.0) 11.5%
RASK (EUR cent) 2.98 2.89 3.1%
Ex-Fuel CASK (EUR cent) 2.81 3.86 (27.3%)
Total cash (EUR million)* 1,378.8 1,616.6 (14.7%)
Load factor (%) 78.1 64.0 +14.1ppt
Period-end fleet size 153 137 11.7%
Period-end seat count 32,399 28,044 15.5%
----------------------------------- ---------- ---------- --------
* Total cash comprises cash and cash equivalents (EUR 766.6
million), short-term cash deposits (EUR 450.0 million), and current
and non-current restricted cash (EUR 162.2 million).
József Váradi, Wizz Air Group Chief Executive Officer commented
on the results:
"Our investments in staffing, our fleet and diversifying the
network enabled us to recover capacity faster and we operated more
than twice as many ASKs compared to F21, while carrying 27.1
million passengers, compared to 10.2m in F21. The load factor
improved to 78 per cent, significantly ahead of the 64 per cent
seen in F21.
Whereas F22 passenger numbers and asset utilization remained
well below pre-Covid levels resulting in a reported net loss of
EUR642.5m for F22, the reported loss in the fourth quarter was
ahead of our guidance driven by an improving trading
environment.
At the end of F22, our cash and cash equivalents position
continued to be very strong and we finished the year with a cash
position of EUR1,379 million. Equally, as we close F22, we are able
to confirm our investment grade balance sheet (Baa3 by Moody's and
BBB- by Fitch).
We believe we have now entered into an endemic phase of COVID-19
and have managed the trading impact from the war in Ukraine.
On 24 February 2022, the war in Ukraine began and I am
incredibly proud of our response in supporting our colleagues and
customers and we'll continue to do so by all means at our disposal
in the face of this human tragedy. Without Wizz Air employees these
efforts would not be possible and we thank them again for a full
year of relentless support and resilience.
The industry is witnessing supply-chain issues across airports ,
including in our network. Shortages of staff in air traffic
control, security and other parts of the supply-chain are impacting
airlines , our employees and our customers directly. We are
deploying extra resources to minimize disruptions and urge all
other stakeholders to do the same, having customers' best interests
always in mind . "
Commenting on the outlook for the Company, József Váradi added
:
"At the start of F23, we stand ready to deliver our largest ever
summer flying programme and the fastest growth in the industry,
enabled by more than 6,000 colleagues across the business.
Our planned capacity growth for the first two quarters of F23 is
over 30 and 40 per cent, respectively, and for the year we expect
even stronger growth versus F20 . This will be enabled by a fleet
of 182 aircraft by the end of the fiscal year, with one of the
highest renewal rates in the industry at more than 50 per cent neo
aircraft, an average fleet age of 4.1 years and an average seat
count of 221, driving a strong and widening competitive advantage
on cost and environmental sustainability .
Our financial focus is on maximising revenue and optimi s ing
cost. We are confident we can return to pre-COVID productivity and
ex-Fuel CASK levels during F23 by returning to full utilization of
our aircraft and delivering full flying programmes for our people
.
Rising energy costs and inflation across Europe will continue to
favour ultra low-cost carriers as consumers reconsider spending
choices. We are partially hedged over the summer providing partial
protection against fuel price surges and we continue to look at
opportunities to extend these insurance coverages for the full
fiscal year at the right conditions.
Our bookings are showing strong performance in the first fiscal
quarter, with average fares trending higher at low single digits
versus same period in F20 and with loads around 85% for the
quarter. For fiscal quarter two, we expect fares in the upper
single digits ahead of the equivalent period F20 and passenger load
factors to deliver above 90 per cent.
We see strong consumer demand for summer, but expect an
operating loss for the first quarter of F23. The airline industry
remains exposed to externalities such as air traffic control
disruption and continuing operational issues within the airports
sector, adding to a volatile macro environment. As a result, at
this point, we are not providing further financial guidance for the
year."
F22 FINANCIAL RESULTS
EBITDA was near break-even at EUR19.0 million loss, compared to
EUR182.8 million loss in F21.
Operating loss was EUR465.3 million, a reduction of EUR62.8
million compared to F21 operating loss.
Net loss for F22 was EUR 642.5 million , an increase of EUR66.4
million compared to F21 net loss.
Net financial expenses increased to EUR86.7 million, compared to
EUR66.8 million recorded in F21.
Net foreign exchange loss for F22 was EUR89.5 million, comparing
to a gain reported in F21 of EUR28.4 million.
Total cash at the end of March 202 2 was EUR1, 378.8 million (of
which EUR16 2 . 2 million was restricted cash and EUR 450.0 million
were short-term cash deposits) .
REVENUE AND COST HIGHLIGHTS
Revenues: Total revenue increased by 125 per cent to EUR1,663.4
million.
ASKs and passenger numbers increased 118.3 per cent and 166.3
per cent, respectively year on year.
Passenger ticket revenue increased by 124.8 per cent to EUR732.1
million to make up 44 per cent of total revenue.
Ancillary revenue increased by 125.4 per cent to EUR931.4
million representing 56 per cent of total revenue (compared to 45
per cent of revenue in F20).
Throughout the year we concentrated on recovering capacity amid
changing travel restriction regimes. A broader and more diversified
network allowed us to respond quickly and efficiently to changing
market dynamics. During the year we focused on stabilising flight
schedules and crew rosters, even as we ramped up to operate more
flights in winter 2021/2022 than in any prior winter season in the
company's history. Ancillary revenue continued to perform well,
supported by dynamic pricing across key product streams, including
bags, seats and priority boarding.
Costs: Total operating expenses increased by 68 per cent to
EUR2,128.7 million in F22 from EUR1,267.1 million in F21, while
total CASK decreased by 18.0 per cent to 3.98 Euro cents in F22
from 4.85 Euro cents in F21. CASK excluding fuel expenses decreased
by 27.3 per cent to 2.81 Euro cents in F22 from 3.86 Euro cents in
F21. The decrease in CASK in large part was driven by greater
operational capacity, higher load factors and better fleet
utilization during the year compared to F21.
Nevertheless, in the back half of F22 we invested to lay the
foundation for the company's future growth. We have placed a new
order for up to 192 A321 neo aircraft and now hold the order book
that enables us to become a 500 aircraft ultra-low cost airline. As
we continued to recruit colleagues we have restored employees'
salaries to pre-pandemic levels and are anchored to market
benchmarks in order to continue to offer a competitive career
proposition to our employees.
DIVERSIFIED NETWORK DRIVING THE PACE OF RECOVERY
A broader, more diversified network enabled faster capacity
recovery during the year as we continued to see a reduction in
travel restrictions.
As a result of the war in Ukraine, flights cancelled or
suspended were circa two and seven per cent of total network
flights in February and March 2022, respectively. Wizz Air
successfully reallocated 100 per cent of Ukraine originally planned
capacity and the new flights came on sale from the end of March
2022. Already as of June, load factors and yields have fully
recovered in countries bordering Ukraine. Wizz Air continues to
have four aircraft in Ukraine (one in Lviv, three in Kiev), they
are in good condition, and we are looking to repatriate these
aircraft at the earliest possible opportunity. These four aircraft
combined have a book value of around EUR25m.
We have further strengthened our position in our core CEE region
markets with the start of new bases in Albania and Bosnia and
Herzegovina.
We have added new aircraft to existing bases in Romania,
Albania, Bulgaria, Hungary and Poland and have announced new routes
and flights, focusing on Italy, United Kingdom, United Arab
Emirates, Poland, Romania, Baltics and Western Balkans markets.
We have expanded our presence at London, Gatwick airport with an
acquisition of 15 daily slot pairs from Norwegian and two
additional daily slots pairs from Vueling at Luton airport.
In Italy we opened new bases in Rome, Naples and Venice,
bringing the total number of bases to seven. Italy is the market
where we have been operating for more than 15 years and where
COVID-19 has redrawn the competitive landscape allowing for a
disproportionate level of growth. At the end of March 2022 our
market share in Italy was 10 per cent.
Wizz Air Abu Dhabi has now been operating for 18 months. As we
emerge from the pandemic, we believe it can become a 50 aircraft
operation towards the end of the decade, serving a potential market
of five billion people within five-hours' flying from Abu
Dhabi.
On 10 May 2022 Wizz Air signed a memorandum of understanding
with the Kingdom of Saudi Arabia to explore the country's airline
market development opportunities.
On 30 May 2022 Wizz Air operated a record 777 flights in a
single day.
On 3 June 2022 Wizz Air announced it will cancel all Wizz UK
flying from its Doncaster Sheffield Airport base from 10 June 2022.
Pilots and cabin crew have been offered the opportunity to fly out
of another base in the UK.
AIRBUS NEO AND FLEET UPDATE
Wizz Air continued its fleet renewal and expansion program
bringing forward the benefits of new technology in ownership and
operating cost, fuel consumption and lower carbon and noise
emissions. In the twelve months ended 31 March 2022 Wizz Air has
taken delivery of 25 new A321neo aircraft, while returning nine
A320ceo aircraft, ending the year with a total fleet of 153
aircraft: 59x A320ceo, 41x A321ceo, 6x A320neo, 47x A321neo.
Fleet average age stands at 5.0 years, one of the youngest
fleets of any European airline with over 100 aircraft, while the
average number of seats per aircraft has climbed to 212 as of March
2022.
In November 2021 Wizz Air signed an agreement with Airbus for
the purchase of a further 102 Airbus A321 aircraft, comprising 75x
A321neo and 27x Airbus A321XLR aircraft. The order has received
overwhelming approval by shareholders in an extraordinary
shareholder meeting held on 22 February, 2022. With the new order,
Wizz Air's delivery backlog comprises of a firm order for 34x
A320neo, 244x A321neo and 47x A321XLR aircraft, plus the additional
order for 15 A321neo and purchase rights for 75x A321neo, a total
of 415 aircraft.
During May 2022 Wizz Air has exercised its conversion rights for
a total of 21 A320neo aircraft. The aircraft will be converted into
higher capacity A321neos with deliveries spanning calendar years
2024 to 2026.
The table below shows the fleet plan including the firm order
linked to the new Airbus order , but excluding the end of May
agreed conversions .
Total Fleet (end of
period) 2022 2023 2024 2025 2026 2027
A320ceo........... 49 40 23 13 8 0
A321ceo........... 41 41 39 30 17 7
A320neo........... 6 6 22 27 40 40
A321neo........... 81 121 140 177 223 289
A321XLR.......... 0 4 10 26 37 47
Total number of units
... .. 177 212 234 273 325 383
Net growth(1) (unit)
......... 27 3 5 22 39 52 58
Note: (1) Net growth represents total deliveries of aircraft
less returns , (2) A321XLR contracted deliveries in Q4 CY2023, but
delays into 2024 are expected.
SUSTAINABILITY PERFORMANCE
Wizz Air exceeded its F22 target for carbon emission intensity
by -0.4 grams per passenger km, setting itself on the right path of
reaching its F30 target (43 grams per pax km), unrivalled by any of
its European competitors.
CO2/RPK was 60.7 grams in F22 compared to 77.3 grams in F21
thanks to improving load factors and fleet renewal.
Following the Annual General Shareholder meeting held last
summer, five per cent of the leadership team's award is linked to
the reduction of carbon emission intensity by F26 (to 45.1g per
RPK) and another five percent linked to reaching gender diversity
targets in the management team by F26
Our Sustainability and Culture Board Committee was carved out of
the Audit and Risk Committee (previously Audit and Sustainability
Committee). This level of dedication to sustainability governance
underlines the commitment of the Company to deliver against its ESG
objectives.
In October 2021 Wizz Air's Commitment Letter to the Science
Based Target Initiative (SBTi) was accepted. The Company is
currently in the process of collecting and assembling all data and
making calculations for its decarbonization roadmap, as required
for the SBTi target setting process.
Our work with Risilience, a company applying the risk analysis
framework pioneered by the Cambridge Centre for Risk Studies
(CCRS), improved our assessment of the physical and transitional
risks to our operations and further strengthened our disclosures in
line with the recommendations of TCFD (Task Force on
Climate-Related Financial Disclosures).
Wizz Air is disclosing the data on its Scope 3 greenhouse gas
emissions for the first time in the F22 annual report. Wizz Air was
supported by Avieco UK Ltd for the data collection and emissions
measurement process, covering Scope 1, 2 and 3.
We have identified the key building blocks necessary to achieve
net zero emissions by 2050, which include, in the short term,
continued investment in fleet renewal, fuel and operational
efficiency; in the medium term, sustainable aviation fuels and
valuable offsetting alternatives; and in the long term, zero
emission technology and air traffic management modernization.
Wizz Air signed a Memorandum of Understanding with Airbus for
their ZEROe project. The cooperation allows the Company to be part
of the early design of the ZEROe aircraft which ensures it will be
fit for highly efficient, ultra-low cost operations. It will
provide a much closer understanding of how operating this
zero-emission hydrogen aircraft will impact the airline's future
business model.
We have made a commitment to reach the Board diversity target
set by the Hampton-Alexander Review. This year Board gender
diversity improved by three per cent to 30 per cent, while
management team gender diversity improved by seven per cent
reaching overall 34 per cent.
The Wizz Air team includes over 75 different nationalities at
all levels in the organization. We value diversity and inclusion
and are focused on doing more to increase diversity levels across
the organization further.
Despite the implications of COVID-19 on operational priorities
and working environment, Wizz Air has remained strongly focused on
the development of its employees. Several new initiatives were
introduced to provide further learning and development
opportunities, including an online LinkedIn Learning platform that
offers access to 10,000+ expert-led courses.
FINANCIAL DEVELOPMENTS
Wizz Air has strengthened its liquidity with a bond offering of
EUR 500 million at a 1.00 per cent interest rate. The note matures
in 2026 and was executed within the framework of the Euro Medium
Term Note Programme. Proceeds were partially used to repay the GBP
300 million CCFF facility in February 2022.
We entered into zero-cost collar hedges on jet-fuel to stabilize
the fuel cost for a portion of our consumption needs until August
of this year. The average ceiling price of the zero-cost collar
hedges is at 1,109 USD/mT.
We continue to build on our ancillary revenue stream and we have
introduced advanced data science and machine learning pricing on
key product streams (Bags, Seats and Priority boarding).
To scale the business further we continued to automate internal
processes, activating a number of improved solutions ranging from
cabin crew payroll and onboarding processes, data feeds for fuel
optimisation, an expense reporting app solution, direct costing
system and others.
EMPLOYEE RELATIONS
We have recruited in excess of 2,200 staff since the start of
the last fiscal year and are projecting to be a team of 6,700
people by the end of Summer 2022, up from around 4,000 people
pre-COVID-19.
We conduct bi-annual employee engagement surveys. The results of
employee engagement surveys are reviewed by the Board which offers
an opportunity to assess any changes in the Company's culture.
Since the start of this year management and crews have had
in-person, face-to-face meetings 39 times. This is unique in the
industry and is a key measure Wizz Air uses to create a forum where
business is discussed and opportunities are offered to all staff to
raise concerns.
In February and March of this year, in response to the war in
Ukraine, we provided immediate assistance to our Ukrainian
employees and offered 110,000 free tickets to all Ukrainian
nationals for flights from Ukraine's bordering countries and
discounted rescue fares on all other routes.
OTHER DEVELOPMENTS
We have further automated and digitalised customer support
services, providing faster resolutions and improved customer
convenience. These solutions have included the automatic payment of
EU261 compensation claims, optimised claim forms with flight
validation and data pre-collection, enhanced Interactive Voice
Response, which has been especially useful during peak-traffic
periods.
In January 2022 our "Fly the Greenest" campaign was launched to
raise awareness among our passengers about Wizz Air's environmental
credentials and to enable them to make a responsible decision when
flying. Wizz Air is proud to be not only Europe's fastest-growing
airline, but also its greenest choice of air travel.
To protect the EU airline operating licence of Wizz Air Hungary
Ltd (a subsidiary of the Company), the Board has resolved to
continue to apply a disenfranchisement of Ordinary shares held by
non-EEA shareholders in the capital of the Company. This will
continue to be done on the basis of a 'Permitted Maximum' of 45 per
cent pursuant to the Company's articles of association (the
"Permitted Maximum"). The decision by the Board is considered
appropriate to ensure Wizz Air Hungary Ltd's continued compliance
with applicable ownership and control requirements. We will provide
further details on or before 1 July 2022, simultaneously with the
notice of annual general meeting that is scheduled to take place on
26 July 2022.
We intend to file an application to form a new subsidiary in
Malta that would be granted an Air Operator's Certificate ("AOC").
Subject to confirmation of its AOC and operating license from EASA
and Malta Civil Aviation Directorate, Wizz Air Malta may begin
operations in October 2022 with Malta-registered aircraft.
Effective 8 June 2022, Heiko Holm, Wizz Air Hungary Ltd.
Operations Officer, will be appointed Officer Wizz Air Central,
taking responsibility for Central Operations across AOCs. Roland
Tischner, currently Head of Ground Operations, will be promoted to
Officer Wizz Air Hungary Operations.
FULL YEAR OUTLOOK
As we enter F23 we see improving consumer demand coinciding with
high travel season. At the same time we are conscious that the
trading environment can quickly change prompted by the impact of
inflation and quantitative tightening on consumer demand .
Nevertheless, summer demand indicators remain excellent at this
point, supported by strong consumer dynamics: an urge to travel,
improved household savings ratios in key markets, near-full
employment and wage inflation. Our ultra-low cost model will thrive
as consumers will choose the best value in the market.
We will return to full productivity in F23 and put our more
diverse, expanded network to full use. We expect to fly resp. 30
per cent and 40 per cent more capacity (versus F20) in the first
and second quarter of F23. At this point in time we will not
provide further financial guidance for the year ahead.
Directors' confirmations
The statements below have been prepared in connection with the
group's full Annual Report and Accounts for the year ended 31 March
2022. Certain parts are not included in this release.
The Directors consider that the Annual Report and Accounts,
taken as a whole, is fair, balanced and understandable and provides
the information necessary for shareholders to assess the Group's
financial position and performance, business model and strategy.
Each of the Directors, whose names and functions are listed in the
Directors' Report, confirm that to the best of his or her
knowledge:
the Consolidated financial statements, which have been prepared
in accordance with IFRSs, as adopted by the European Union, give a
true and fair view of the assets, liabilities, financial position
and loss of the Group;
the Strategic Report includes a fair review of the development
and performance of the business and the position of the Group,
together with a description of the principal risks and
uncertainties that it faces; and
there is no relevant audit information of which the Company's
auditor is unaware. Each Director has taken all steps that he or
she ought to have taken as a director in order to make himself or
herself aware of any relevant audit information and to establish
that the Company's auditor is aware of that information.
By order of the Board
Jozsef Varadi
ABOUT WIZZ AIR
Wizz Air, Europe's fastest growing and most sustainable
ultra-low-cost airline, operates a fleet of 154 Airbus A320 and
A321 aircraft. A team of dedicated aviation professionals delivers
superior service and very low fares, making Wizz Air the preferred
choice of 40.0 million passengers in the financial year F20 ending
31 March, 2020 and 27.1 million passengers in the financial year
F22 ending 31 March 2022. Wizz Air is listed on the London Stock
Exchange under the ticker WIZZ. The company was recently named one
of the world's top ten safest airlines by airlineratings.com, the
world's only safety and product rating agency, and 2020 Airline of
the Year by ATW, the most coveted honour an airline or individual
can receive, recognizing individuals and organizations that have
distinguished themselves through outstanding performance,
innovation, and superior service. Wizz Air was also rated the most
sustainable airline in Europe by Sustainalytics in January
2022.
For more information:
Investors: Zlatko Custovic, Wizz Air +36 1 777 9407
Zsuzsanna Trubek, Wizz Air
+36 70 652 4115
Edward Bridges / Jonathan Neilan, FTI
Media: Consulting LLP: +44 20 3727 1017
- Ends -
Dear Shareholders,
Although the past two years have been the most challenging in
our 18-year history, they have demonstrated the resilience of the
Wizz Air business model and the passion of our people as we work
together to deliver for our customers every day, even in these
times of extreme adversity.
The aviation industry globally has faced severe restrictions due
to COVID-19, with airlines around the world being limited in their
ability to operate and many required to seek significant financial
support from governments or shareholders or both.
Wizz Air has faced these same restrictions but has managed to
navigate the pandemic from a position of strength, with an
investment grade balance sheet, a strong liquidity position and an
unwavering focus on continuing to widen our competitive cost
advantage. The Company continued to deal with the crisis at hand
and, at the same time, laid the foundation that would allow us to
emerge from this cycle as a more diversified, stronger business;
with a younger, more efficient and more sustainable fleet; and with
a workforce eager to deliver against our ambitious "Wizz 500"
strategy - a vision that will more than triple our fleet and size
by the end of the decade.
As a result of the pandemic, Wizz Air is closing F22 with
revenue down 40 per cent versus F20 (our pre-COVID-19 financial
year), but with revenue up 125 per cent compared to last year. Our
net loss for the year was EUR642.5 million as the uncertain and
ever-changing nature of COVID-19 impacted the core principles of
our low-cost model - maximising the utilisation of our fleet, the
optimal utilisation of our workforce, and sufficient time to
commercialise our routes driving the maximum revenue per aircraft.
Several times during the year we had to adjust our plans downwards
to deal with the next wave of COVID-19 or upwards to ramp up the
operation when infections seemed to decrease, supported by
increasing vaccination levels.
Following the severe challenges of the pandemic, on the second
anniversary of the COVID-19 outbreak in Europe, a war started in
Ukraine, impacting our customers, colleagues and operations in
Ukraine, Moldova and Russia. Our people showed great resilience and
generosity beyond anything I could have imagined, working together
to help those customers and colleagues affected by the war. The
WIZZ team worked tirelessly to help them to start to rebuild their
lives in a new country by providing support, meals, transport and,
in some cases, accommodation in their own homes.
From an operational perspective, the impact on the business was
quickly mitigated, helped by the diversification of the network,
which we have been focused on expanding over the last number of
years. We continue to work to repatriate four stranded aircraft in
Ukraine.
As we move on from the COVID-19 pandemic we are focused on the
business model and strategy that have made Wizz Air so successful.
Operational efficiency, cost and price leadership, innovation, and
service excellence remain the core principles of how we operate.
These are the cornerstones of our success and are the basis of how
we will achieve Wizz 500. In doing so we believe we will provide
opportunities that can enhance lives and make the world around us
better, bringing people and businesses together. We're committed to
making sure that everyone, everywhere can benefit from air travel
at the lowest possible prices, all while setting high benchmarks
for safety, customer experience and sustainability.
A focused ultra-low-cost business model
In the post-pandemic environment, and in light of the low levels
of operation due to travel restrictions, our total cash balance has
been the single most important performance indicator of the health
of the Wizz Air business. With a total cash (including short-term
deposits and restricted cash balances) balance at EUR1,378.8
million at the end of March 2022 and an investment grade balance
sheet, we remain one of the strongest airlines in the industry.
Maintaining this strong cash position was only possible through
our ultra-low-operating cost base, which has allowed us to
persevere through periods of severe business interruption and
allowed us to operate cash-positive flights, serving our customers
and supporting our cash position even during periods of restricted
demand.
Nonetheless, we were not immune to all challenges, especially as
the crisis entered its second year without interruption. During
F22, we raised EUR500 million from a 1.00 per cent Eurobond
maturing in January 2026, used in large part to repay a GBP300
million Commercial Paper Facility from the Bank of England under
the UK Government's COVID Corporate Financing Facility (CCFF).
We also focused on widening our competitive cost advantage by
continuing to invest in the network (securing new attractive
long-term airport contracts as we opened new bases and routes),
continuing to invest in our fleet (securing an even lower cost base
by further up-gauging our fleet, now at an average of 212 seats per
aircraft), and working with our partners to get better cost and
payment terms going forward.
Our geographic footprint as sustainable competitive
advantage
Our growth model is centred around making mobility affordable
for more people. In Central and Eastern Europe flight penetration
is still well below Western European markets. As GDP in the region
has grown, so has demand for air travel and, historically, 75 per
cent of our growth has come from market growth. In Western Europe,
we make flying more affordable as we disrupt legacy carriers who
operate in fragmented markets.
Our focus has been - and remains - to continue to grow and
diversify our footprint. While doing so we have enhanced our
ability to recover faster once restrictions lifted and have also
improved our structural cost as we locked in a cost structure at a
time when there was depressed demand for airport capacity. This
allowed us to reinvest these lower costs in lower fares for our
passengers.
We have further strengthened our business in our core CEE
region, including new bases in Albania and Bosnia and Herzegovina,
in order to consolidate our market leadership, with an overall
market share close to 21 per cent and a low-cost segment share of
over 38 per cent in CEE.
We have also strengthened historic positions in select markets
in the West, notably in the UK and Italy. We have expanded our
presence in London through our continued market leadership in Luton
and expansion in Gatwick and, additionally, we have started
operations at a new base in Cardiff, bringing the UK base network
to four airports, including Doncaster. In Italy we opened new bases
in Rome, Naples and Venice, bringing our Italian bases to seven.
The UK and Italy are markets where we have been operating with a
strong brand and product for more than 15 years and where COVID-19
has redrawn the competitive landscape allowing for a
disproportionate level of growth.
As part of our "Go East" strategy, Wizz Air Abu Dhabi has now
been operating for 18 months. As we emerge from the pandemic, we
believe it can become a 50 aircraft operation towards the end of
the decade, serving a potential market of 5 billion people within
five-hours' flying from Abu Dhabi. On 10 May 2022 Wizz Air signed a
memorandum of understanding with the Kingdom of Saudi Arabia to
explore the country's airline market development opportunities.
Market Market share Low-cost segment share Low-Cost Market position
======================== ============= ======================= =========================
Romania 37.8% 52.6% 1
======================== ============= ======================= =========================
Bulgaria 29.0% 52.6% 1
======================== ============= ======================= =========================
Albania 41.0% 53.6% 1
======================== ============= ======================= =========================
North Macedonia 61.5% 82.3% 1
======================== ============= ======================= =========================
Bosnia and Herzegovina 40.6% 58.8% 1
======================== ============= ======================= =========================
Hungary 29.1% 40.4% 2
======================== ============= ======================= =========================
Ukraine 12.6% 27.5% 2
======================== ============= ======================= =========================
Lithuania 16.6% 26.6% 2
======================== ============= ======================= =========================
Slovakia 17.4% 21.6% 2
======================== ============= ======================= =========================
Serbia 14.6% 58.9% 2
======================== ============= ======================= =========================
Moldova 28.5% 58.3% 2
======================== ============= ======================= =========================
Poland 20.2% 33.6% 3
======================== ============= ======================= =========================
Latvia 4.8% 16.4% 3
======================== ============= ======================= =========================
United Kingdom 4.2% 6.8% 5
------------------------ ------------- ----------------------- -------------------------
Italy 8.7% 12.6% 3
------------------------ ------------- ----------------------- -------------------------
Austria 7.2% 19.7% 2
------------------------ ------------- ----------------------- -------------------------
United Arab Emirates 0.6% 2.4% 4
------------------------ ------------- ----------------------- -------------------------
CEE 20.7% 38.1% 1
======================== ============= ======================= =========================
Our fleet as a driver of competitiveness and sustainability
Operating the most competitive aircraft technology is critical
for a low-cost carrier, particularly one which plans to operate its
aircraft for around 13 hours per day. State-of-the-art aircraft
with the latest engine technology consume less fuel, have lower
noise emissions, are more efficient not only to fly but also to
maintain and to handle at the airport and accommodating more
passengers in still very comfortable seating. Our strong balance
sheet enabled us to maintain our fleet delivery programme in F22.
25 A321neos joined the fleet, taking the total number of aircraft
to 153 at the end of March 2022. Today, 38 per cent of the
Company's total seat capacity is with the A321neo family of
aircraft, probably the highest renewal rate of any fleet in
Europe.
March 2022 March 2023 March 2024
Actual Planned Planned
======================================= =========== =========== ===========
A320ceo without winglets (180 seats) 22 7 4
A320ceo with winglets (180 seats) 28 28 21
A320ceo with winglets (186 seats) 9 9 9
A320neo with winglets (186 seats) 6 6 7
A321ceo with winglets (230 seats) 41 41 41
A321neo with winglets (239 seats) 47 91 125
======================================= =========== =========== ===========
A321neo XLR with winglets (239 seats) - - 6
======================================= =========== =========== ===========
Fleet size 153 182 213
======================================= =========== =========== ===========
Proportion of seats on A321 64% 78% 85%
======================================= =========== =========== ===========
Average number of seats per aircraft 211.7 221.9 226.1
======================================= =========== =========== ===========
The new neo aircraft are powered by Pratt & Whitney GTF
engines, which reduce fuel burn by 16 per cent, nitrogen oxide
emissions by 50 per cent and deliver close to a 50 per cent
reduction in noise footprint compared to previous generation
aircraft.
Our emission intensity, measured by CO(2) per revenue passenger
kilometre (CO(2) /RPK), was already the lowest in the industry in
F20 and our continued investment in fleet innovation ensures we
maintain a strong edge versus any competitor.
During F21 and F22 our emission intensity was affected by
COVID-19 travel restrictions given the impact on passenger load on
our flights. Nevertheless, we have delivered on the plan disclosed
in the F21 Annual Report as we remain highly committed to lowering
our emission intensity and achieving the transition to a net-zero
future.
Creating the leading digital platform
A digital customer experience and operation is core to the
business model of an ultra-low-cost-carrier. It drives costs out of
the system, it allows the airline to scale the Company, and it
drives immediacy instead of dependency on lead times. Our digital
programme is centred around four pillars:
-- An exceptional digital customer journey: our customers'
journey remains a key focus area for us, with digital experience as
key to making travel as frictionless, safe, and easy as possible in
a cost-effective manner. We target all key touchpoints with our
customers. Our distribution is nearly fully digital today. We
digitalise communications by further streamlining communication
channels with customers. We digitalise customer service via the
introduction of our Chatbot platform, increasing traffic quarter on
quarter, and are nearing an automation rate of 95 per cent.
-- Digital powered operations: Wizz Air is deploying new
technology to drive efficiencies into its operations and improve
decision making. Not only are we automating existing processes but
we are re-imagining our operations with digital being the catalyst
for improving key performance metrics like on-time performance,
utilisation of fleet and crew, and ultimately to drive a lower
CASK. One of the key enabling platforms for this is the roll-out of
our Electronic Flight Book (EFB) and the launch of an Electronic
Technical Log Book (ETLB) to replace the paper-based communication
and records managed by pilots and third parties. New equipment
allows for a much greater connectivity, faster decisions and
adjustments to how we operate, which, in the end, will lead to a
better service at a lower cost.
-- Scaling without boundaries: to support our growth, Wizz Air
is working on standardising and automating the core process across
support functions like Finance and Accounting and Human Resources,
with the focus on automation of transactions, reduction of lead
times and higher pixelation of data to allow for more data-driven
decision making.
-- Strong digital foundations are a prerequisite for scaling
efficiently and operating with the highest levels of reliability.
The Company continues to invest in hardware and network
connectivity to ensure it can maintain a productive workforce and
stable and secure operations.
Focus on our people
Our people are at the core of our business. More than 90 per
cent of our employees engage with our customers face-to-face on a
daily basis.
During F22 our employee engagement score was 7.0, broadly
aligned with the industry average, with a participation rate of 67
per cent. Our Employee Feedback Survey, together with the surveys
in the industry, showed a small reduction in overall satisfaction
rate, which is understandable given the duration of the pandemic
and the impact it had on our operations. Nevertheless, our
employees have shown tremendous resilience during unprecedented
times of adversity and personal hardship, changing schedules
because of COVID-19 and loss of income, as the number of hours they
could fly was reduced. Their continued strong engagement even
during the toughest of times is a true testimony to the Wizz
spirit, and it is their dedication and passion that is at the root
of our success. That success allowed us to ramp-up operations as
restrictions eased and, as the business recovered, we were proud to
be the first major airline in Europe to restore salaries to their
pre-COVID-19 levels. We aspire for our workforce at Wizz Air to
reflect our broad customer base. As such, we are proud to have a
diverse team of passionate aviation professionals. Our team
includes more than 50 different nationalities at all levels in the
organisation. We are also focused on driving a better gender
balance within the organisation. We improved Board gender diversity
further from 27 per cent to 30 per cent, just shy of our 33 per
cent target. Our Management Team diversity increased from 27 per
cent to 34 per cent. Our commitment is reflected in our long-term
incentive targets for our Executives, to reach 40 per cent female
representation at managerial level by 2026.
We are also determined to make a step-change in the
under-representation of women in the flight deck - a long-standing
issue within the aviation industry - with the help of our Cabin
Crew to Captain programme.
To preserve the Wizz Air culture and offer more meaningful
career opportunities, we have set ourselves a goal to fill
vacancies with internal talent in at least 50 per cent of these
positions and, this year, we exceeded this goal by filling 54 per
cent of open positions. We believe that Wizz Air offers the best
career progression opportunity in the industry, irrespective of
whether you are a pilot, cabin crew or an office employee. Wizz Air
opens up opportunities for diverse talents to learn, develop and
succeed.
Outlook
During F22 we improved our trading performance and now look
forward to what we hope will be a world without COVID-19
disruptions and where peace is quickly restored in Ukraine. While
new challenges will emerge, we know that our strategic priorities
and progress will help us to thrive in the industry as long as we
are focused on executional excellence - excellence in product and
service at the lowest cost - allowing us to deliver low fares and
superior shareholder returns.
F23 will be a year marked by high inflation across cost lines.
This is where our investments in network, in fleet and in people
will bear fruit and will help us not only to return to F20 ex-fuel
CASK cost levels, but equally to widen the gap versus the rest of
the industry on cost competitiveness.
In our industry, lowest cost prevails. Being able to combine the
lowest cost with excellence in service and the lowest emission
intensity will allow us to reach our value creation targets for all
our stakeholders - shareholders, employees, and the passengers and
communities we serve.
Financial Review
Over the past year Wizz Air's results continued to be impacted
by the COVID-19 pandemic even as we witnessed traffic recovery in
most of our markets. Wizz Air's more diversified network has been
key in recovering capacity and dealing with macro events such as
conflict in Ukraine. Amid a gradually recovering demand Wizz Air
continued to make investments in people, fleet, its network and
systems, all of which lay the foundation for the Company's future
growth. Our focus continued to be on cost and managing cash and
throughout the year we have maintained our investment grade balance
sheet.
Wizz Air carried 27.1 million passengers during F22, an increase
of 166 per cent compared to the previous fiscal year. Revenues
increased by 125 per cent to EUR1,663.4 million. Passenger and
revenue figures reflect the increase in capacity throughout the
year, as more people returned to flying encouraged by COVID-19
vaccines and immunity travel certificates.
Throughout the year the underlying focus for the Company has
been investment for growth, enabled by market shifts created due to
the COVID-19 pandemic and capacity retrenchment by a number of our
industry peers.
Wizz Air reported a net loss of EUR642.5 million (compared to
EUR576.0 million net loss in F21).
The unit revenue measured in terms of ASKs increased by 3.1 per
cent to 2.98 Euro cents, while unit costs decreased by 18.0 per
cent to 3.98 Euro cents in F22 from 4.85 Euro cents in F21. CASK
excluding fuel expenses decreased by 27.3 per cent to 2.81 Euro
cents in F22 from 3.86 Euro cents in F21. A decrease in CASK is
driven behind greater capacity operated during the year, which
resulted in a higher number of ASKs.
Supporting the recovery and sustaining the growth of the
business, key management actions included:
From an investment and financing point of view:
-- placing a new aircraft order for a further 102 Airbus A321
aircraft, including purchase rights and optional units, at very
attractive commercial terms, securing a continued supply of best
market technology aircraft;
-- enhancing liquidity position with a EUR500 million four-year
bond issued in January 2022 on more favourable terms compared to
January 2021 issuance, which was used to pay off a GBP300 million
facility from the Bank of England under the UK Government's CCFF in
February 2022; and
-- taking delivery of 25 new A321neo aircraft, while returning
nine A320ceo aircraft, bringing forward the benefits of new
technology in ownership and operating cost, fuel consumption and
lower carbon and noise emissions.
From a cost point of view:
-- adjusting capacity in markets and reallocating aircraft to
better performing locations in line with the Company's historic
network optimisation churn rate;
-- renegotiating key long-term supply agreements covering
aircraft component services, engine refurbishment and base and line
maintenance;
-- deploying new systems and hardware as part of its digital
powered operations, including departure control systems across its
stations and launching Electronic Technical Log Book to replace the
paper-based maintenance record managed by pilots and MRO agents ;
and
-- applying hot and cold parking of parts of our fleet, to further reduce costs.
From a revenue point of view:
-- sustaining a clear principle of cash-positive flying; and
-- continuing to leverage our strong capabilities in ancillary
revenue - posting record growth month on month and rolling out
advanced data science tools supporting dynamic pricing of key
product streams (e.g. bags, seats and priority boarding).
From a cash point of view:
-- continuing to apply our ambitious "payment days" extension
programme with suppliers, leveraging the strength of our balance
sheet and credit rating which allowed suppliers to better
differentiate Wizz Air from other airlines, supported by our
ability to offer true long-term partnerships;
-- optimising key elements of our investment cash flow by
focusing on optimised fleet deliveries and early lease returns
(where contractually feasible); and
-- converting advance aircraft payments (pre-delivery payments)
to EUR currency significantly reducing the USD currency exposure in
the years ahead.
The macro variables with significant influence on the financial
performance of the Group developed during the year as follows:
F22 F21 Change
========================================== ===== ===== =======
Average jet fuel price ($/metric tonne,
including into-plane premium and impact
of effective hedges) 789 674 16.9%
Average USD/EUR rate (including impact
of effective hedges) 1.16 1.17 (0.8%)
Year-end USD/EUR rate 1.11 1.21 (8.3%)
========================================== ===== ===== =======
===================================================================
Financial overview
Summary statement of comprehensive income
EUR million F22 F21 Change
================================================================== ========= ========= ========
Total revenue 1,663.4 739.0 125.1%
================================================================== ========= ========= ========
Fuel costs (including exceptional income/(expense)) (649.0) (347.4) 86.8%
Operating expenses excluding fuel (1,479.7) (919.7) 60.9%
================================================================== ========= ========= ========
Total operating expenses (2,128.7) (1,267.1) 68.0%
================================================================== ========= ========= ========
Operating loss (465.3) (528.1) (11.9)%
Comprising:
- Operating loss excluding exceptional income/(expense) (469.6) (434.5) 8.1%
- Exceptional income/(expense) 4.3 (93.6) n.m.*
================================================================== ========= ========= ========
Operating profit margin (excluding exceptional income/(expense)) (28.2%) (58.8%) 30.6 ppt
================================================================== ========= ========= ========
Net financing expense (176.2) (38.4) 358.8%
================================================================== ========= ========= ========
Loss before income tax (641.5) (566.5) 13.2%
Income tax expense (0.9) (9.5) (90.0%)
================================================================== ========= ========= ========
Loss for the year (642.5) (576.0) 11.5%
================================================================== ========= ========= ========
Exceptional income/(expense) net of income tax 4.3 (93.6) n.m.*
================================================================== ========= ========= ========
Underlying loss after tax (646.7) (482.4) 34.1%
================================================================== ========= ========= ========
* n.m.: not meaningful as a variance is more than (-)100 per cent.
Loss per share
Loss per share, EUR (Note 9) F22 F21 Change
============================= ==== ==== =======
Basic and diluted loss per share (6.33) (6.73) (6.0%)
---------------------------------- ------- ------- -------
Return on capital employed and capital structure
Return on capital employed (ROCE) is a non-statutory performance
measure commonly used to measure the financial returns that a
business achieves on the capital it uses. ROCE for F22 was (16.8)
per cent, compared to (19.4) per cent for the previous year.
The Company maintained its investment grade credit rating by
Moody's (Baa3) and Fitch (BBB-).
The Company's leverage ratio is (117.7) at the end of the 2022
financial year, while liquidity decreased to 73.1 per cent from
195.9 per cent at the end of the 2021 financial year.
F22 F21 Change
----------------- -------- -------- ---------
ROCE* (16.8%) (19.4%) 2.6 ppt
----------------- -------- -------- ---------
Leverage ratio* (117.7) (18.9) 98.8 ppt
----------------- -------- -------- ---------
(122.8
Liquidity* 73.1% 195.9% ppt)
----------------- -------- -------- ---------
* See the definition of these non-statutory measures and their
calculation under key statistics on annual report page 17.
Financial performance
Revenue
The following table sets out an overview of Wizz Air's revenue
items for F22 and F21 and the percentage change in those items:
F22 F21
===================== =========================
Total Percentage Percentage
(EUR of total Total of total Percentage
million) revenue (EUR million) revenue change
========================== ============ =========== ================= =========== ===========
Passenger ticket revenue 732.1 44.0% 325.7 44.1% 124.8%
========================== ============ =========== ================= =========== ===========
Ancillary revenue 931.4 56.0% 413.3 55.9% 125.4%
========================== ============ =========== ================= =========== ===========
Total revenue 1,663.4 100% 739.0 100% 125.1%
========================== ============ =========== ================= =========== ===========
The increase in passenger ticket revenue was driven by a 166.3
per cent increase in passengers. Similarly, ancillary (or
"non-ticket") revenue increased in line with the ticket revenue
development. The share of ancillary products in the total revenue
increased to 56.0 per cent.
Average revenue per passenger decreased by 15.5 per cent from
EUR72.5 in F21 to EUR61.3 in F22. Average ticket revenue per
passenger declined from EUR32.0 in F21 to EUR27.0 in F22 (by 15.6
per cent), while average ancillary revenue per passenger decreased
to EUR34.3 from EUR40.6 (by 15.4 per cent).
Total operating expenses excluding exceptional income/expense
increased by 79.0 per cent to EUR2,133.0 million in F22 from
EUR1,173.4 million in F21.
The following table sets out for F22 and F21 the expenses
relevant for the CASK measure (thus excluding exceptional expense),
and the percentage changes in those expenses:
F22 F21
Percentage Percentage
of total of total Percentage
Total operating Unit cost Total operating Unit cost change of
(EUR million) expenses (EURcts/ASK) (EUR million) expenses (EURcts/ASK) total cost
======================== ============== =========== ============= ============== =========== ============= ===========
Staff costs 220.5 10.3% 0. 39 132.9 11.3% 0.52 65.9%
Fuel costs (excluding
exceptional
income/(expense)) 653.3 30.6% 1.17 253.8 21.6% 0.99 157.4%
Distribution and
marketing 43.4 2.0% 0.08 19.6 1.7% 0.08 120.8%
Maintenance, materials,
repairs 170.4 8.0% 0. 30 165.7 14.1% 0.65 2.9%
Airport, handling,
en-route charges 545.9 25.6% 0.98 254.9 21.7% 1.00 114.2%
Depreciation and
amortisation 446.3 20.9% 0.80 345.3 29.4% 1.35 29.2%
Net other expenses 53.2 2.5% 0.10 1.2 0.1% 0.00 4,328.8%
======================== ============== =========== ============= ============== =========== ============= ===========
Total operating
expenses (excluding
exceptional
income/(expense)) 2,133.0 100% 3.82 1,173.4 100% 4.59 81.8%
======================== ============== =========== ============= ============== =========== ============= ===========
Net cost from financial
income and expense 86.7 0.16 66.8 0.26 29.8%
======================== ============== =========== ============= ============== =========== ============= ===========
Total 2,219.7 3.98 1,240.2 4.85 79.0%
======================== ============== =========== ============= ============== =========== ============= ===========
Staff costs were EUR220.5 million in F22, up by 65.9 per cent
from EUR132.9 million in F21, driven primarily by the crew
headcount increase, restoration of salaries to pre-COVID-19 levels
for crew and office employees and increased variable compensation
for crew in line with the increased flying programme.
Fuel expenses (excluding exceptional expense) increased by 157.4
per cent to EUR653.3 million in F22, up from EUR253.8 million in
F21. The main driver for this increase was an ASK increase of 118.3
per cent as well as higher fuel prices. The average fuel price,
including hedging impact and into-plane premium, paid by Wizz Air
in F22 was $789 per tonne, an increase of 16.9 per cent from the
previous year's figure of $674 per tonne. The average Euro/US
Dollar exchange rate, including the impact of hedging, was 1.16 in
F22 compared to a rate of 1.17 in F21. The impact of effective fuel
hedges was a EUR13.7 million gain in F22 (compared to a EUR68.4
million loss in F21).
The increase in distribution and marketing costs of 120.8 per
cent to EUR43.4 million in F22 from EUR19.6 million in F21 is
driven by the ASK increase of 118.3 per cent in F21.
Maintenance, materials and repair costs increased by 2.9 per
cent to EUR170.4 million in F22 from EUR165.7 million in F21.
Maintenance costs are largely driven by size of the fleet,
pre-determined maintenance schedules and aircraft utilisation.
Airport, handling and en-route charges increased by 114.2 per
cent to EUR545.9 million in F22 from EUR254.9 million in F21. This
increase is primarily driven by the increase in both seat capacity
and passenger numbers, which increased by 118.2 per cent and 166.3
per cent respectively.
Depreciation and amortisation charges increased by 29.2 per cent
to EUR446.3 million in F22, up from EUR345.3 million in F21 due to
the increase in the variable element of the depreciation that is
based on number of hours flown.
Net other expenses include primarily: (i) office overhead and
crew-related costs other than direct staff costs; (ii) passenger
welfare and compensation costs; (iii) aviation and other insurance
costs; and (iv) credits that do not classify as revenue from
customers. The increase in net other expenses to EUR53.2 million
was primarily driven by: (i) significantly higher flight disruption
costs (2022: EUR29.5 million; 2021: EUR6.7 million); (ii) increase
in crew-related costs due to ramping up operations (2022: EUR32.5
million; 2021: EUR14.6 million); and (iii) increase in overhead
costs due to higher level of operations compared to F21 (2022:
EUR41.4 million; 2021: EUR31.8 million).
Net financing income and expense
The Group's net financing expense was EUR176.2 million in F22
after an expense of EUR38.4 million in F21. This aggregate change
was driven by foreign exchange impacts beside the increase in net
financial expense mainly due to increase of the leased fleet, as
shown in the table below:
EUR million F22 F21 Change
Net financial expense (86.7) (66.8) 29.8%
Net foreign exchange (losses)/gains (89.5) 28.4 n.m.*
===================================== ======== ======= =======
Net financing expense (176.2) (38.4) 358.8%
===================================== ======== ======= =======
* n.m.: not meaningful as a variance is more than (-)100 per cent.
See also (Note 6) to the financial statements.
Taxation
The Group recorded an income tax expense of EUR0.9 million in
F22 compared to the EUR9.5 million in F21.
The effective rate for the Group in F22 was (0.1 per cent)
compared to (1.7 per cent) in F21. The main components of the tax
charge in F21 were local business tax and innovation tax paid in
Hungary and change in deferred tax balances.
Loss for the year
The Group generated an underlying net loss of EUR646.7 million
in F22, compared to the underlying net loss of EUR482.4 million in
F21.
Other comprehensive income and expenses
In F22 the Group had other comprehensive expense of EUR1.8
million compared to an income of EUR240.3 million in F21. This
significant decrease was due to the limited number of hedges in F22
as a result of the "no hedge" policy in June 2021.
Cash flows and financial position
Summary statement of cash flows
The following table sets out selected cash flow data and the
Group's cash and cash equivalents for F22 and F21:
EUR million F22 F21 Change
=========================================== ======== ======== ========
Net cash generated by/(used in) operating
activities 370.6 (224.6) 595.2
Net cash used in investing activities (407.2) (146.4) (260.8)
Net cash generated by/(used in) financing
activities (325.5) (624.6) 299.1
Effect of exchange rate fluctuations
on cash and cash equivalents 28.0 (30.9) 58.9
=========================================== ======== ======== ========
Cash and cash equivalents at the end
of the year 766.6 1,100.7 (334.1)
------------------------------------------- -------- -------- --------
Cash flows from operating activities
The majority of Wizz Air's cash inflows from operating
activities are derived from the sale of passenger tickets and
ancillary services. Net cash flows from operating activities are
also affected by movements in working capital items.
Operating cash flows increased from EUR(224.6) million in F21 to
EUR370.6 million in F22 primarily due to the following factors:
-- Operating cash flows before adjusting for changes in working
capital improved by EUR 204.7 million year on year driven by the
market recovery from COVID-19 restrictions.
-- The positive contribution of working capital changes to
operating cash flows was EUR441.6 million in F22, compared to
EUR49.9 million in F21, being an improvement of EUR391.7 million
year on year. The main driver behind this improvement was the
significant increase in deferred income and in trade and other
payables, partially offset by the decrease in trade and other
receivables at the end of F22 compared to the end of F21.
Cash flows from investing activities
Net cash used in investing activities increased to EUR(407.2)
million in F22 from EUR(146.4) million in F21. The significantly
higher investment in F22 is due to the following factors:
-- Advances paid for aircraft (pre-delivery payments, PDPs): The
net PDP payments to Airbus net of refunds received were an outflow
of EUR217.6 million in F22 compared to a net outflow of EUR33.8
million in F21. This increase was primarily driven by the Company's
delivery schedule and associated PDP commitments with Airbus .
-- The short-term cash deposits increased by EUR99.2 million in
F22 compared to the decrease of EUR65.6 million in F21.
Cash flows from financing activities
The net cash used in financing activities was a EUR325.5 million
outflow in F22 and a EUR624.6 million inflow in F21. The cash
inflow in F22 was the net of the following two factors:
-- Proceeds from new loan: This was an inflow of EUR16.4 million
in F22 and a EUR195.6 million inflow in F21, relating to the JOLCO
financing raised on new aircraft. Additionally, we also received
proceeds of EUR497.5 million from the bond issue in F22.
-- Repayment of loans plus interest paid on loans: The cash
outflow from these items was EUR839.3 million in F22 compared to
EUR410.2 million in F21, which is EUR429.1 million higher than in
F21 mainly as a result of the repayment of the commercial paper
issuance under the CCFF.
Summary statement of financial position
The following table sets out summary statements of financial
position of the Group for F22 and F21:
EUR million F22 F21 Change
====================================== ======== ======== ========
ASSETS
Property, plant and equipment 3,631.4 2,878.2 753.2
Restricted cash* 162.2 169.1 (6.9)
Derivative financial instruments* 0.7 5.1 (4.4)
Trade and other receivables* 207.6 135.3 72.3
Short-term cash deposits 450.0 346.8 103.2
Cash and cash equivalents 766.6 1,100.7 (334.1)
Other assets* 137.6 87.3 50.3
====================================== ======== ======== ========
Total assets 5,356.1 4,722.6 633.5
====================================== ======== ======== ========
EQUITY AND LIABILITIES
Equity
Equity 263.9 903.7 (639.8)
Liabilities
Trade and other payables* 615.4 465.7 148.2
Borrowings (incl. convertible debt)* 3,964.9 3,137.3 827.6
Deferred income* 396.8 111.5 285.3
Derivative financial instruments* 4.6 9.0 (4.4)
Provisions* 107.0 88.9 18.1
Other liabilities* 3.5 6.5 (1.5)
Total liabilities 5,092.1 3,818.9 1,273.2
====================================== ======== ======== ========
Total equity and liabilities 5,356.1 4,722.6 633.5
====================================== ======== ======== ========
* Including both current and non-current asset and liability balances, respectively.
Property, plant and equipment increased by EUR753.2 million as
at 31 March 2022 compared to 31 March 2021, primarily driven by the
investment made in JOLCO-financed aircraft and sale and leaseback
financed right-of-use assets (see also Notes 10 to the financial
statements).
Restricted cash (current and non-current) decreased by EUR6.9
million as at 31 March 2022 compared to the year before. The great
majority of this balance is linked to Wizz Air's aircraft lease
contracts, being cash deposits behind letters of credit issued by
Wizz Air's banks related primarily to lease security deposits and
maintenance reserves.
Derivative financial assets (current and non-current) decreased
by EUR4.4 million as at 31 March 2022 compared to 31 March 2021
(see also Notes 2 and 11 to the financial statements). In 2022
these hedge receivable balances are related to fuel hedge
instruments.
Trade and other receivables increased by EUR72.3 million as at
31 March 2022 compared to 31 March 2021. This was primarily driven
by increase in trade receivables as a result of increased sales and
operation level, and decrease in maintenance reserve receivables
due to maintenance events performed during the financial year.
Cash and cash equivalents amounted to EUR766.6 million at 31
March 2022 (2021: EUR1,100.7 million), and short-term cash deposits
to EUR450.0 million at 31 March 2022 (2021: EUR346.8 million).
Borrowings (including convertible debt) increased by EUR827.6
million as at 31 March 2022 compared to 31 March 2021. The increase
was primarily driven besides the bond issue by lease liabilities
recognised during the fiscal year (see Note 12 to the financial
statements).
Deferred income increased by EUR285.3 million as at 31 March
2022 compared to 31 March 2021 ( see Note 13 to the financial
statements). This was primarily driven by the higher business
activity compared to the previous year-end which was affected more
severely by the coronavirus pandemic.
Derivative financial liabilities (current and non-current)
decreased by EUR4.4 million as at 31 March 2022 compared to 31
March 2021 (see Notes 2 and 11 to the financial statements). The
EUR4.6 million liability at 31 March 2022 was related to fuel
hedges.
Provisions increased by EUR18.1 million as at 31 March 2022
compared to 31 March 2021 (see Note 14 to the financial
statements). The increase is in line with the planned maintenance
schedule.
Hedging strategy
Following the COVID-19 outbreak, the activity level and
consequently the fuel consumption was significantly lower in F21
than that on which the Group hedging programme was originally
based. As a consequence, hedge accounting for certain derivatives
has been discontinued and the associated losses and gains on these
instruments were charged to the statement of comprehensive income
as exceptional expense in F21 and F22.
In light of pertaining travel restrictions as a result of the
COVID-19 pandemic and the subsequent uncertainty in demand for
travel, a decision was taken in September 2020 to cease US Dollar
and jet fuel hedging in order to reduce the risk of
over-hedging.
Since June 2021 the Company has a "no hedge" policy in place
with respect to US Dollar and jet fuel price risk after carefully
evaluating the economic costs and benefits of the Company's hedging
programme; as a result the Company is no longer engaging in
systematic cash flow hedging of US Dollar denominated expenses and
jet fuel price risk. US Dollar hedges expired before F22, while the
last jet fuel hedges expired in September 2021.
The treasury department, under the supervision of the Audit and
Risk Committee, continuously monitors the Company's risk
environment, market and business opportunities to reduce or
transfer its exposure to market risks.
Given the high and volatile commodity environment, the Company
has, in agreement with its Board, capped part of its fuel cost
exposure for the five months ended August 2022 with zero cost
collars. Details of the current hedging positions (as at 31 March
2022) are set out below:
Fuel hedge coverage
F23
Period covered 12 months
Exposure in metric tonnes ('000) 1,620.0
Coverage in metric tonnes ('000) 240.0
Hedge coverage for the period 15%
================================== ===========
Blended capped rate $1,130.0
Blended floor rate $982.0
================================== ===========
Strategic Report
KEY STATISTICS
F22 F21 Change*
========================================== =========== =========== =========
CAPACITY
Number of aircraft at end of period 153 137 11.7%
Equivalent aircraft 143.5 129.7 10.7%
Utilisation (block hours per aircraft
per day) 7.73 4.13 87.2%
Total block hours 405,556 195,601 107.3%
Total flight hours 354,461 172,469 105.5%
Revenue departures 167,709 80,820 107.5%
Average departures per day per aircraft 3.20 1.71 87.5%
Seat capacity 34,754,709 15,927,709 118.2%
Average aircraft stage length (km) 1,605 1,604 0.1%
Total ASKs ('000 km) 55,787,659 25,551,625 118.3%
========================================== =========== =========== =========
OPERATING DATA
RPKs (revenue passenger kilometres)
('000 km) 43,679,179 16,691,569 161.7%
Load factor (%) 78.1% 64.0% 14.1 ppt
Number of passenger segments 27,128,160 10,186,077 166.3%
Fuel price (US$ per tonne, including
hedging impact and into-plane premium) 789 674 16.9%
Foreign exchange rate (US$/EUR including
hedging impact) 1.16 1.17 (0.8%)
========================================== =========== =========== =========
FINANCIAL MEASURES (for the airline
only)
Yield (revenue per RPK, EUR cents) 3.81 4.43 (14.0%)
Average revenue per seat (EUR) 47.9 46.4 3.2%
Average revenue per passenger (EUR) 61.3 72.5 (15.5%)
RASK (EUR cents) 2.98 2.89 3.1%
CASK (EUR cents)** 3.98 4.85 (18.0%)
Ex-fuel CASK (EUR cents)** 2.81 3.86 (27.3%)
------------------------------------------ ----------- ----------- ---------
* Percentage changes in this table are calculated by division of
the two years' KPIs also when the KPIs are expressed as
percentages.
** Excluding the impact of exceptional items, as explained in
Note 7 to the financial statements.
Glossary of technical terms
Available seat kilometres (ASKs): the number of seats available
for scheduled passengers multiplied by the number of kilometres
those seats were flown.
Block hours: each hour from the moment an aircraft's brakes are
released at the departure airport's parking place for the purpose
of starting a flight until the moment the aircraft's brakes are
applied at the arrival airport's parking place.
CASK: cost per ASK , where cost is defined as operating expenses
and financial expenses net of financial income, excluding
exceptional items.
Ex-fuel CASK: cost per ASK, where cost is defined as operating
expenses and financial expenses net of fuel expenses and financial
income, excluding exceptional items.
Equivalent aircraft: the number of aircraft available to Wizz
Air in a particular period, reduced on a per aircraft basis to
reflect any proportion of the relevant period that an aircraft has
been unavailable.
Flight hours: each hour from the moment the aircraft takes off
from the runway for the purposes of flight until the moment the
aircraft lands at the runway of the arrival airport.
JOLCO (Japanese Tax Lease) and French Tax Lease : special forms
of structured asset financing, involving local tax benefit for
Japanese and French investors, respectively.
Load factor: the number of seats sold divided by the number of
seats available.
PDP: the pre-delivery payments under the Group's aircraft
purchase arrangements.
Revenue passenger kilometres (RPKs): the number of seat
kilometres flown by passengers who paid for their tickets.
RASK: total revenue divided by ASK.
Underlying net loss: profit after tax for the year as per IFRS
excluding the impact of exceptional items.
Utilisation: the total block hours for a period divided by the
total number of aircraft in the fleet during the period and the
number of days in the relevant period.
Yield: the total revenue per RPK.
Cash and cash equivalents comprise bank balances on current
accounts and on deposit accounts that are readily convertible into
cash without there being significant risk of a change in value to
the Group. Cash and cash equivalents do not include restricted
cash.
Short-term cash deposits comprise deposits maturing within three
to twelve months of inception.
Total cash comprises cash and cash equivalents, short-term cash
deposits and restricted cash.
Definition and reconciliation of non-statutory financial
performance measures
Return on capital employed (ROCE) is operating profit (or loss)
after tax (excluding exceptional items) divided by average capital
employed, expressed as a percentage.
Average capital employed is the sum of annual average equity and
interest-bearing borrowings (including convertible debt), less
annual average cash and cash equivalents.
EUR million F22 F21
Operating loss (excluding exceptional income/(expense)) (469.6) (434.5)
Effective tax rate for the year (0.1%) (1.7%)
=================================================================== ======== ========
Operating loss after tax (excluding exceptional income/(expense)) (470.1) (441.8)
------------------------------------------------------------------- -------- --------
Average shareholders' equity 583.8 1,069.3
Average borrowings 3,551.1 2,588.4
Average cash and cash equivalents (933.7) (989.3)
Average short-term cash deposits (398.4) (389.7)
------------------------------------------------------------------- -------- --------
Average capital employed 2,802.8 2,278.6
------------------------------------------------------------------- -------- --------
ROCE (%) (16.8%) (19.4%)
=================================================================== ======== ========
Leverage ratio: net debt divided by EBITDA (excluding
exceptional items).
Net debt is interest-bearing borrowings (including convertible
debt) less cash and cash equivalents.
Earnings before interest, tax, depreciation and amortisation
(EBITDA) is profit (or loss) before net financing costs (or gain),
income tax expense (or credit), depreciation, amortisation and
exceptional items.
EUR million F22 F21
Operating loss (excluding exceptional income/(expense)) (469.6) (434.5)
Depreciation and amortisation 446.3 345.3
EBITDA (excluding exceptional expense) (23.3) (89.2)
--------------------------------------------------------- ---------- ----------
Borrowings 3,964.8 3,137.3
Cash and cash equivalents (766.6) (1,100.7)
Short-term cash deposits (450.0) (346.8)
--------------------------------------------------------- ---------- ----------
Net debt 2,748.2 1,689.8
--------------------------------------------------------- ---------- ----------
Leverage (117. 9 ) (18.9)
========================================================= ========== ==========
Liquidity is cash and cash equivalents and short-term cash
deposits divided by the last twelve months' revenue, expressed as a
percentage.
EUR million F22 F21
------------ ---- -----
Cash and cash equivalents 766.6 1,100.7
Short-term cash deposits 450.0 346.8
--------------------------- -------- --------
Revenue 1,663.4 739.0
--------------------------- -------- --------
Liquidity 73.1% 195.9%
--------------------------- -------- --------
Consolidated statement of comprehensive income
FOR THE YEARED 31 MARCH 2022
2022 2021
Note EUR million EUR million
=================================================================== ==== =========== ===========
Passenger ticket revenue 4 732.1 325.7
Ancillary revenue 4 931.4 413.3
=================================================================== ==== =========== ===========
Total revenue 4 1,663.4 739.0
=================================================================== ==== =========== ===========
Staff costs (220.5) (132.9)
Fuel costs (including exceptional expense/income) (649.0) (347.5)
Distribution and marketing (43.4) (19.6)
Maintenance materials and repairs (170.4) (165.7)
Airport, handling and en-route charges (545.9) (254.9)
Depreciation and amortisation (446.3) (345.3)
Net other expenses 5 (53.2) (1.2)
=================================================================== ==== =========== ===========
Total operating expenses (2,128.7) (1,267.1)
------------------------------------------------------------------- ---- ----------- -----------
Operating loss 5 (465.3) (528.1)
Comprising:
* Operating loss excluding exceptional income/(expense) (469.6) (434.5)
* Exceptional income/(expense) (included in fuel costs) 7 4.3 (93.6)
------------------------------------------------------------------- ---- ----------- -----------
Financial income 6 2.8 11.6
Financial expenses 6 (89.5) (78.4)
Net foreign exchange (loss)/gain 6 (89.5) 28.4
Net financing expense 6 (176.2) (38.4)
Loss before income tax (641.5) (566.5)
Income tax expense 8 (0.9) (9.5)
=================================================================== ==== =========== ===========
Net loss for the year (642.5) (576.0)
=================================================================== ==== =========== ===========
Net loss for the year attributable to:
Non-controlling interest (10.7) (3.9)
Owners of Wizz Air Holdings Plc (631.8) (572.1)
------------------------------------------------------------------- ---- ----------- -----------
Other comprehensive income/(expense) - items
that may be subsequently reclassified to
profit or loss:
Movements in cash flow hedging reserve, net
of tax
Net change in fair value 10.9 39.2
Recycled to profit or loss (12.5) 200.3
Currency translation differences (2.5) 0.8
=================================================================== ==== =========== ===========
Other comprehensive (expense)/income for
the year, net of tax (4.1) 240.3
Total comprehensive expense for the year (646.6) (335.7)
=================================================================== ==== =========== ===========
Total comprehensive expense for the year
attributable to:
Non-controlling interest (11.4) (4.0)
Owners of Wizz Air Holdings Plc (635.2) (331.7)
------------------------------------------------------------------- ---- ----------- -----------
Basic and diluted loss per share ( EUR /share) 9 (6.33) (6.73)
------------------------------------------------------------------- ---- ----------- -----------
Consolidated statement of financial positioN
AT 31 MARCH 2022
2021
(restated
2022 * )
Note EUR million EUR million
============================================= ==== ============= ============
ASSETS
Non-current assets
Property, plant and equipment 10 3,631.4 2,878.2
Intangible assets 62.4 30.4
Restricted cash 67.3 134.1
Deferred tax assets 1.7 1.1
Trade and other receivables 20.7 21.6
============================================= ==== ============= ============
Total non-current assets 3,783.5 3,065.4
============================================= ==== ============= ============
Current assets
Inventories 70.9 53.7
Trade and other receivables 186.9 113.7
Current tax assets 2.5 2.1
Derivative financial instruments 11 0.7 5.1
Restricted cash 94.9 35.0
Short term cash deposits 450.0 346.8
Cash and cash equivalents 766.6 1,100.7
============================================= ==== ============= ============
Total current assets 1,572.5 1,657.2
============================================= ==== ============= ============
Total assets 5,356.1 4,722.6
============================================= ==== ============= ============
EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Share capital - -
Share premium 381.2 381.2
Reorganisation reserve (193.0) (193.0)
Equity part of convertible debt 8.3 8.3
Cash flow hedging reserve (3.8) (2.2)
Cumulative translation adjustments (0.7) 1.2
Retained earnings 87.3 712.3
--------------------------------------------- ---- ------------- ------------
Capital and reserves attributable to the
owners of Wizz Air Holdings Plc 279.3 907.7
Non-controlling interests (15.4) (4.0)
--------------------------------------------- ---- ------------- ------------
Total equity 263.9 903.7
============================================= ==== ============= ============
Non-current liabilities
Borrowings 12 3,525.3 2,388.7
Convertible debt 26.1 26.2
Deferred income 13 63.0 43.5
Deferred tax liabilities 3.4 6.3
Trade and other payables 56.8 79.0
Provisions for other liabilities and charges 14 43.9 51.1
============================================= ==== ============= ============
Total non-current liabilities 3,718.4 2,594.8
============================================= ==== ============= ============
Current liabilities
Trade and other payables 558.6 386.7
Current tax liabilities 0.2 0.2
Borrowings 12 413.1 722.1
Convertible debt 0.3 0.3
Derivative financial instruments 11 4.6 9.0
Deferred income 13 333.8 68.0
Provisions for other liabilities and charges 14 63.2 37.8
============================================= ==== ============= ============
Total current liabilities 1,373.7 1,224.1
============================================= ==== ============= ============
Total liabilities 5,092.1 3,818.9
============================================= ==== ============= ============
Total equity and liabilities 5,356.1 4,722.6
============================================= ==== ============= ============
* See Notes 2 ,and 18 on correction of comparative amount
classification between current and non-current.
Consolidated statement of changes in equity
FOR THE YEARED 31 MARCH 2022
Equity part Cash
of flow Cumulative
Share Share Reorganisation convertible hedging translation Retained Non-controlling Total
capital premium reserve debt reserve adjustment earnings Total interests equity
EUR EUR EUR EUR EUR EUR
million million EUR million EUR million million EUR million million million EUR million million
Balance at
1 April 2021 - 381.2 (193.0) 8.3 (2.2) 1.1 712.3 907.7 (4.0) 903.7
================== ======== ======= ============== =========== ======= =========== ======== ======= =============== =======
Comprehensive
income/(expense):
Loss for the year - - - - - - (631.8) (631.8) (10.7) (642.5)
Fair value gains
in the year - - - - 10.9 - - 10.9 - 10.9
Gains transferred
to income
statement - - - - (11.9) - - (11.9) - (11.9)
Hedge
discontinuation
gains transferred
to income
statement - - - - (0.6) - - (0.6) - (0.6)
Currency
translation
differences - - - - - (1.8) - (1.8) (0.7) (2.5)
================== ======== ======= ============== =========== ======= =========== ======== ======= =============== =======
Total other
comprehensive
income/(expense) - - - - (1.6) (1.8) - (3.4) (0.7) (4.1)
================== ======== ======= ============== =========== ======= =========== ======== ======= =============== =======
Total
comprehensive
income/(expense)
for the year - - - - (1.6) (1.8) (631.8) (635.2) (11.4) (646.6)
================== ======== ======= ============== =========== ======= =========== ======== ======= =============== =======
Transactions with
owners:
Share-based
payment charge - - - - - - 6.8 6.8 - 6.8
================== ======== ======= ============== =========== ======= =========== ======== ======= =============== =======
Total transactions
with owners - - - - - - 6.8 6.8 - 6.8
================== ======== ======= ============== =========== ======= =========== ======== ======= =============== =======
Balance at
31 March 2022 - 381.2 (193.0) 8.3 (3.8) (0.7) 87.3 279.3 (15.4) 263.9
================== ======== ======= ============== =========== ======= =========== ======== ======= =============== =======
FOR THE YEARED 31 MARCH 2021
Equity
part Cash
of flow Cumulative
Share Share Reorganisation convertible hedging translation Retained Non-controlling Total
capital premium reserve debt reserve adjustment earnings Total interests equity
EUR EUR EUR EUR EUR EUR EUR EUR EUR
million million EUR million million million million million million million million
Balance at
1 April 2020 - 380.6 (193.0) 8.3 (241.7) 0.2 1,280.3 1,234.8 - 1,234.8
================== ======= ======= ============== =========== ======= =========== ======== ======= =============== =======
Comprehensive
income/(expense):
Loss for the
year - - - - - - (572.1) (572.1) (3.9) (576.0)
Fair value gains
in the year - - - - 39.2 - - 39.2 - 39.2
Losses transferred
to income
statement - - - - 68.4 - - 68.4 - 68.4
Hedge
discontinuation
losses
transferred
to income
statement - - - - 131.9 - - 131.9 - 131.9
Currency
translation
differences - - - - - 0.9 - 0.9 (0.1) 0.8
------------------ ------- ------- -------------- ----------- ------- ----------- -------- ------- --------------- -------
Total other
comprehensive
income/(expense) - - - - 239.5 0.9 - 240.4 (0.1) 240.2
------------------ ------- ------- -------------- ----------- ------- ----------- -------- ------- --------------- -------
Total
comprehensive
income/(expense)
for the year - - - - 239.5 0.9 (572.1) (331.7) (4.0) (335.7)
================== ======= ======= ============== =========== ======= =========== ======== ======= =============== =======
Transactions
with owners:
Proceeds from
shares issued - 0.6 - - - - - 0.6 - 0.6
Share-based
payment charg
e - - - - - - 4.1 4.1 - 4.1
Total transactions
with owners - 0.6 - - - - 4.1 4.7 - 4.7
================== ======= ======= ============== =========== ======= =========== ======== ======= =============== =======
Balance at
31 March 2021 - 381.2 (193.0) 8.3 (2.2) 1.1 712.3 907.7 (4.0) 903.7
================== ======= ======= ============== =========== ======= =========== ======== ======= =============== =======
Consolidated statement of cash flows
FOR THE YEARED 31 MARCH 2022
2022 2 021*
Note EUR million EUR million
Cash flows from operating activities
Loss before income tax (641.5) (566.5)
Adjustments for:
Depreciation 10 436.3 336.1
Amortisation 10.0 8.8
Financial income (2.8) (11.6)
Financial expenses 89.5 78.4
Unrealised fair value gain on derivative financial instruments (3.4) (65.5)
Unrealised foreign currency gains 81.6 (69.1)
Realised non-operating foreign currency losses 5.6 55.1
Gain on sale of property, plant and equipment (49.7) (40.7)
Share-based payment charges 6.7 4.1
Other non-cash operating expense 1.6 -
================================================================== === ======== ========
(66.1) (270.8)
================================================================== === ======== ========
Changes in working capital
(Increase)/decrease in trade and other receivables (74.0) 48.3
Decrease in restricted cash 15.4 4.6
(Increase)/decrease in inventory (17.2) 16.9
Increase/(decrease) in provisions 9.2 (4.3)
Increase in trade and other payables 138.7 6.4
Increase/(decrease) in deferred income 369.5 (22.0)
================================================================== === ======== ========
Cash generated by/(used in) operating activities before tax 375.5 (221.0)
================================================================== === ======== ========
Income tax paid (4.9) (3.6)
================================================================== === ======== ========
Net cash generated by/ (used in) operating activities 370.6 (224.6)
================================================================== === ======== ========
Cash flows from investing activities
Purchase of aircraft maintenance assets (59.1) (80.6)
Purchase of tangible and intangible assets (77.7) (169.5)
Proceeds from the sale of tangible assets 43.5 58.7
Advances paid for aircraft 10 (407.6) (165.1)
Refund of advances paid for aircraft 10 190.0 131.3
Interest received 2.9 13.2
Increase /(decrease) in short term cash deposits (99.2) 65.6
================================================================== === ======== ========
Net cash used in investing activities (407.2) (146.4)
================================================================== === ======== ========
Cash flows from financing activities
Proceeds from the issue of share capital - 0.6
Proceeds from new loan** 16.4 195.6
Repayment of loans** (397.5) (336.5)
Interest paid - loans - IFRS 16 lease liability (71.3) (67.9)
Interest paid loans - JOLCO (1.9) (1.4)
Proceeds from unsecured debt 497.5 1,177.0
R epayment of unsecured debt (357.5) (338.2)
Interest paid - unsecured debt* (8.9) (1.9)
Interest paid - other* (2.2) (2.5)
Net cash generated by/(used) in financing activities (325.5) 624.6
================================================================== === ======== ========
Net increase/ ( decrease ) in cash and cash equivalents (362.1) 253.6
Cash and cash equivalents at the beginning of the year*** 1,100.7 878.0
Effect of exchange rate fluctuations on cash and cash equivalents 28.0 (30.9)
================================================================== === ======== ========
Cash and cash equivalents at the end of the year* ** 766.6 1,100.7
================================================================== === ======== ========
* Interest paid - other of EUR4.4 million as disclosed in the
F21 financial statements has been further analysed above to
separately show the interest paid on unsecured debt of EUR1.9
million in F21 to aide comparison.
** Mostly JOLCO and IFRS16 leases.
*** Cash and cash equivalents at 31 March 2022 include EUR235.6
million (EUR461.8 million at 31 March 2021; EUR288.2 million at 31
March 2020) of cash at bank and EUR531.0 million (EUR638.9 million
at 31 March 2021; EUR589.8 million at 31 March 2020) of cash
deposits maturing within three months of inception.
1 . Accounting policies
The principal accounting policies applied in the presentation of
these consolidated financial statements are set out below. These
policies have been consistently applied to all the years presented,
unless otherwise stated.
Basis of preparation
These consolidated financial statements consolidate those of the
Company and its subsidiaries. The audited consolidated financial
statements have been prepared and approved by the Directors in
accordance with International Financial Reporting Standards as
adopted by the EU ("Adopted IFRSs") and IFRS IC
interpretations.
Based on the exemption provided in Article 105 (11) of the
Companies (Jersey) Law 1991 the Company does not present its
individual financial statements and related notes.
The financial statements are presented in Euros (EUR), which is
the functional currency of all companies in the Group other than
Wizz Air UK Ltd., Wizz Air Abu Dhabi Ltd., Wizz Air Abu Dhabi LLC,
Wizz Air Innovation Ltd. and two dormant entities, Dnieper Aviation
LLC and Wizz Air Ukraine Airlines LLC.
The Company has a policy of rounding each amount and percentage
individually from the fully accurate number to the figure disclosed
in the financial statements. As a result, some amounts and
percentages do not total - though such differences are all
trivial.
The consolidated financial statements have been prepared under
the historical cost convention, as modified by the revaluation of
financial assets and financial liabilities (including derivative
instruments) at fair value through profit or loss.
The preparation of the consolidated financial statements in
conformity with IFRS legislates the use of certain critical
accounting estimates and requires management to exercise judgements
in the process of applying the Group's accounting policies. The
areas involving a high degree of judgement or complexity or areas
where assumptions and estimates are significant to the consolidated
financial statements are disclosed in Note 3 .
Going concern
Wizz Air's business activities, financial performance and
financial position, together with factors likely to affect its
future development and performance, are described in the Strategic
Report on our Annual Report pages 62 to 77. Emerging and principal
risks and uncertainties facing the Group are described on our
Annual Report pages 70 to 77. Note 2 to the financial statements
sets out the Group's objectives, policies and procedures for
managing its capital and liquidity and provides details of the
risks related to financial instruments held by the Group.
At 31 March 2022, the Group held cash and cash equivalents of
EUR766.6 million (total cash of EUR1,378.8 million including
EUR450.0 million of short term cash deposits, which can be accessed
within less than 12 months after the financial year end, and
EUR162.2 million of restricted cash), while net current assets were
EUR145.5 million. In legal terms, the external borrowings of the
Group consist of: EUR500 million bonds maturing in January 2024,
EUR500 million bonds maturing in January 2026 and convertible debt
with a balance of EUR26.4 million. In accounting terms a further
EUR2,926.9 million are presented as borrowings in relation to
future commitments from lease contracts. These borrowings do not
contain any financial covenants.
The Group operates using a three year planning cycle. The
Directors have reviewed their latest financial forecasts for the
next twelve months from the date of signing these financial
statements, plans to finance committed future aircraft deliveries
due within this period that are currently unfinanced and available
committed financing for aircraft. After making enquiries and
testing the assumptions against different forecast scenarios
including a severe but plausible downside scenario, the Directors
have satisfied themselves that the Group is expected to be able to
meet its commitments and obligations as they fall due for a period
of at least the next twelve months from the date of signing this
report.
These enquiries and testing included a base case model of how
the operations of the business would develop over the next twelve
months from the date of signing this report . Wizz Air expects to
very quickly return to full utilization of its fleet with higher
load factors and RASK levels improving compared to F20. Progressive
pass-through of pricing combined with anticipated retirement of
cost-prohibitive capacity in the industry would allow pricing to
stabilize around a new-found equilibrium, compensating for
continuing high fuel and other inflation costs. In addition, the
Directors have also modelled a downside scenario that assumes an
even higher price for jet fuel and a stronger USD, whilst at the
same time modelling a weaker trading environment (simulated by a
lower RASK for the entire planning period). In this scenario the
Group is still forecasting significant liquidity throughout this
period.
The Directors also considered the impact of climate change over
the time period and concluded that it was unlikely that material
physical or transition risks that are described in our
Sustainability Report , Annual Report page 17 would arise over this
period. In preparing its base and downside forecasts the Directors
also took into account the impact of the war in Ukraine and the
four aircraft stranded in Ukraine (see note 10 ) and no material
impact is forecast. The Directors have assumed that there will be
no further significant disruption caused by the COVID-19 pandemic
of the magnitude previously experienced.
Accordingly, the Directors concluded it was correct to retain
the going concern basis of accounting in preparing the financial
statements.
2. Financial risk management
Financial risk factors
The Group is exposed to market risks relating to fluctuations in
commodity prices, interest rates and currency exchange rates. The
objective of financial risk management at Wizz Air is to minimise
the impact of commodity price, interest rate and foreign exchange
rate fluctuations on the Group's earnings, cash flows and equity.
To manage commodity and foreign exchange risks, Wizz Air uses
various derivative financial instruments, including foreign
currency and jet fuel zero-cost collar contracts.
Risk management is carried out by the treasury department under
policies approved by the Board of Directors. The Board provides
written principles for overall risk management, as well as written
policies covering specific areas, such as foreign exchange risk,
fuel price risk, credit risk, use of derivative financial
instruments, adherence to hedge accounting, and hedge coverage
levels. The Board has mandated the Audit and Risk Committee of the
Board to supervise the hedging activity of the Group and the
compliance with the policies approved by the Board.
Risk analysis
Market risks
Pre-COVID, Wizz Air hedged a minimum of 50 per cent of the
projected USD and jet fuel requirements for the next twelve months
or 40 per cent on an 18-month hedge horizon. Exceeding the 18-month
time horizon was subject to Board approval.
Following the COVID-19 outbreak, the activity level and
consequently the fuel consumption was significantly lower in F21
than that on which the Group hedging programme was originally
based. As a consequence, hedge accounting for certain derivatives
has been discontinued and the associated losses and gains on these
instruments were charged to the statement of comprehensive income
as exceptional expense in F21 and F22.
In light of pertaining travel restrictions as a result of the
COVID-19 pandemic and the subsequent uncertainty in demand for
travel, a decision was taken in September 2020 to cease USD and jet
fuel hedging in order to reduce the risk of over-hedging.
Since June 2021 the Company has a 'no hedge' policy in place
with respect to USD and jet fuel price risk after carefully
evaluating the economic costs and benefits of the company's hedging
programme, as a result the Company is no longer engaging in
systematic cash-flow hedging of USD denominated expenses and jet
fuel price risk. USD hedges expired before F22, while the last jet
fuel hedges expired in September 2021.
The treasury department, under the supervision of the Audit and
Risk Committee, continuously monitors the Company's risk
environment, market and business opportunities to reduce or
transfer its exposure to market risks.
Given the high and volatile commodity environment, the Company
has, in agreement with its Board, capped part of its fuel cost
exposure for the five months ended August 2022 with zero cost
collars, as a temporary exception to the Company's "no hedge"
policy approved by to the Board of Directors.
Foreign currency risk
The Group is exposed to foreign currency risk on sales,
purchases and commitments that are denominated in a currency other
than the functional currency of its operating entities. The foreign
currency exposure of the Group is predominantly attributable to:
(i) only a small portion of the Group's revenues are denominated in
or linked to the USD while a significant portion of the Group's
expenses are USD denominated, including fuel, aircraft leases,
maintenance reserves; and (ii) there are various currencies in
which the Group has significantly more revenues than expenses,
primarily the British Pound (GBP) and - to a smaller extent - the
Polish Zloty (PLN).
EUR/USD foreign currency rate is the most significant underlying
foreign currency exposure to the Group.
The table below analyses the financial instruments by the
currencies of future receipts and payments as follows:
EUR USD Other Total
At 31 March 2022 EUR million EUR million EUR million EUR million
============================================ =========== =========== =========== ===========
Financial assets
Trade and other receivables 68.9 68.2 4.5 141.6
Derivative financial assets - 0.7 - 0.7
Cash and cash equivalents 597.5 97.4 71.7 766.6
Short term cash deposits 450.0 - - 450.0
Restricted cash 0.6 161.2 0.4 162.2
============================================ =========== =========== =========== ===========
Total financial assets 1,117.0 327.5 76.6 1,521.1
============================================ =========== =========== =========== ===========
Financial liabilities
Unsecured debt* 997.9 - - 997.9
IFRS 16 aircraft and engine lease liability 328.5 2,008.8 - 2,337.3
IFRS 16 other lease liability 6.8 - 3.1 9.9
JOLCO and FTL liability 398.1 154.8 27.0 579.9
Loans from non-controlling interests - 13.5 - 13.5
Convertible debt 26.4 - - 26.4
Trade and other payables 381.4 99.5 48.2 529.1
Derivative financial liabilities - 4.6 - 4.6
============================================ =========== =========== =========== ===========
Total financial liabilities 2,139.1 2,281.2 78.3 4,498.6
============================================ =========== =========== =========== ===========
N et (liabilities)/assets (1,022.1) (1,953.7) (1.7) (2,977.5)
============================================ =========== =========== =========== ===========
*Unsecured debt represent the European Mid Term Note
EUR USD Other Total
At 31 March 2021 (restated) EUR million EUR million EUR million EUR million
============================================ =========== =========== =========== ===========
Financial assets
Trade and other receivables** 25.9 51.5 6.3 83.7
Derivative financial assets - 5.1 - 5.1
Cash and cash equivalents 214.1 495.2 391.4 1,100.7
Short term cash deposits 300.0 46.8 - 346.8
Restricted cash - 168.9 0.2 169.1
============================================ =========== =========== =========== ===========
Total financial assets 540.0 767.5 397.9 1,705.4
============================================ =========== =========== =========== ===========
Financial liabilities
Unsecured debt* 499.2 - 350.3 849.5
IFRS 16 aircraft and engine lease liability 304.7 1,478.1 - 1,782.8
IFRS 16 other lease liability 8.6 - 2.5 11.1
JOLCO and FTL liability 319.6 107.6 27.5 454.7
Loans from non-controlling interests - 12.8 - 12.8
Convertible debt 26.5 - - 26.5
Trade and other payables** 245.4 156.8 21.3 423.5
Derivative financial liabilities - 9.0 - 9.0
============================================ =========== =========== =========== ===========
Total financial liabilities 1,404.0 1,764.3 401.6 3,569.9
============================================ =========== =========== =========== ===========
N et liabilities (864.0) (996.8) (3.7) (1,864.5)
============================================ =========== =========== =========== ===========
*Unsecured debt represents the European Mid Term Note and the
Covid Corporate Financing Facility
**During the year the composition of financial assets and
liabilities (in the table above) and their maturities (in the table
disclosed below in this note) was analysed in greater detail. As a
result the comparative amounts as at 31 March 2021 in the table
above have been changed to correct the classification of these
assets and liabilities. This impacted the amounts shown for trade
and other receivables and trade and other payables. Trade and other
receivables now total EUR83.7m (previously EUR109.3 million) of
which EUR25.9 million (previously EUR34.8 million) is denominated
in EUR, EUR51.5 million (previously EUR64.3 million) denominated in
USD and EUR6.3 million (previously EUR10.2 million) denominated in
other currencies. Similarly trade and other payables in the table
above now total EUR423.5 million (previously EUR231.7 million), of
which EUR245.4 million (previously EUR172.9 million) is denominated
in EUR, EUR156.8 million (previously EUR40.4 million) is
denominated in USD, and EUR21.3 million (previously EUR18.4
million) is denominated in other currencies.
Trade and other receivables in this table, and also in the other
disclosures in this Note, exclude balances that are not financial
instruments, being prepayments, deferred expenses and part of other
receivables. Similarly, trade and other payables in this table, and
also in the other disclosures in this Note, exclude balances that
are not financial instruments, being part of accruals and other
payables.
Commodity risks
One of the most significant costs for the Group is jet fuel. The
price of jet fuel can be volatile and can directly impact the
Group's financial performance. See further details regarding jet
fuel at market risks and hedge transactions within this note.
The Group is also exposed to price risk related to Carbon
Emission Trading System schemes (ETS). In order to comply with
regulations ETS allowances must be purchased and surrendered on a
yearly basis. To reduce the exposure to price volatility and
inflation the Group enters into spot and forward purchase
transactions. As at 31 March 2022, all requirements for calendar
year 2021 and 75% of total forecast requirements for calendar year
2022 were covered. This coverage includes forward purchase
agreements in the value of EUR112.7 million. As at the approval of
this document, the coverage for calendar year 2022 is at 92%,
including additional forward purchase agreements in the value of
EUR15.2 million. These forward purchase agreements qualify for own
use exemption and therefore are not accounted for as a financial
instrument under IFRS 9.
Interest rate risk
The Group's objective is to reduce cash flow risk arising from
the fluctuation of interest rates on financing.
The Group has future commitments under certain lease contracts
that are based on floating interest rates. The floating nature of
the interest charges on the leases exposes the Group to interest
rate risk. Interest rates charged on Eurobond, convertible debt
liabilities and on short and long-term loans to finance the
aircraft are not sensitive to interest rate movements as they are
fixed until maturity.
The Group has not used financial derivatives to hedge its
interest rate risk during the year.
The Group has floating rate instruments within restricted cash,
but given their short term (within three months) maturity, the
interest rates are not expected to move significantly during this
short period.
Hedge transactions during the year
The Group used zero-cost collar instruments and outright forward
contracts to hedge its foreign exchange exposures and used
zero-cost collar instruments to hedge its jet fuel exposures.
The gains and losses arising from hedge transactions during the
year were as follows:
a) Foreign exchange hedge:
2 022 2021
EUR million EUR million
============================================================================================ =========== ===========
( Loss)/gain recognised within fuel costs
Effective cash flow hedge (1.8) -
Discontinued cash flow hedge expiring in the financial year* - 7.7
Fair value change of discontinued cash flow hedge expiring in the financial year* (0.4) (8.0)
Discontinued cash flow hedge expiring in following financial year(s)* - 0.3
Fair value change of discontinued cash flow hedge expiring in following financial year(s)* - (0.6)
-------------------------------------------------------------------------------------------- ----------- -----------
Total loss recognised within fuel costs (2.2) (0.6)
-------------------------------------------------------------------------------------------- ----------- -----------
*Fair value change and result of discontinued hedges were charged to exceptional expense.
Gain recognised within financial income
Effective fair value hedge - 0.4
Total gain recognised within financial income - 0.4
============================================================================================ =========== ===========
Gain recognised within net foreign exchange gains
Effective fair value hedges - 5.1
-------------------------------------------------------------------------------------------- ----------- -----------
- 5.1
-------------------------------------------------------------------------------------------- ----------- -----------
Fuel hedges:
2 022 2021
EUR million EUR million
============================================================================================ =========== ===========
Gain/(loss) recognised within fuel costs
Effective hedge 13.7 (68.4)
Discontinued c ash flow hedge expiring in the financial year* 0.6 (125.2)
Fair value change of discontinued c ash flow hedge expiring in the financial year* 4.0 33.5
Discontinued c ash flow hedge expiring in following financial year(s)* - (14.7)
Fair value change of discontinued c ash flow hedge expiring in following financial year(s)* - 13.5
-------------------------------------------------------------------------------------------- ----------- -----------
Total g ain/(loss) recognised within fuel costs 18.3 (161.3)
============================================================================================ =========== ===========
*Fair value change and result of discontinued hedges were
charged to exceptional expense.
Hedge year-end open positions
The fair value of derivatives is estimated by the contracting
financial institutions as per their industry practice. As required,
the fair values ascribed to those instruments are verified also by
management using high-level models. These estimations are performed
based on market prices observed at year end and therefore,
according to paragraph 128 of IAS 1, do not require further
disclosure. Such fair values might change materially within the
next financial year but these changes would not arise from
assumptions made by management or other sources of estimation
uncertainty at the end of the year but from the movement of market
prices. The fair value calculation is most sensitive to movements
in the jet fuel and foreign currency spot prices, their implied
volatility and respective yields. A sensitivity analysis for the
jet fuel price and for the FX rate on most relevant currency pairs
is included below in this note.
At the end of the year and the prior year the Group had the
following open hedge positions:
a) Foreign exchange hedges with derivatives:
Derivative financial instruments
------------------------------------------------------
Notional Non-current Current Non-current Current Net
amount assets assets liabilities liabilities asset/(liability)
At 31 March 2021 US$ million EUR million EUR million EUR million EUR million EUR million
---------------------------- ------------ ------------ ------------ ------------ ------------ ------------------
Effective fair value hedge
positions - - - - - -
Effective cash flow hedge
positions 104.7 - 0.2 - (2.2) (2.0)
Discontinued cash flow hedge
positions 25.0 - - - (0.4) (0.4)
---------------------------- ------------ ------------ ------------ ------------ ------------ ------------------
Total foreign exchange
hedges 129.7 - 0.2 - (2.6) (2.4)
============================ ============ ============ ============ ============ ============ ==================
No such hedges as at 31 March 2022.
For the movements in other comprehensive income refer to the
consolidated statement of changes in equity.
The open foreign currency cash flow hedge positions at year end
can be analysed according to the maturity periods and price ranges
of the underlying hedge instruments as follows:
EUR/USD foreign exchange hedge:
F22 F23
At 31 March 2021 12 months 6 months
================= ========== =========
Maturity profile of notional amount (million) $129.7 -
Weighted average ceiling $1.1621 -
Weighted average floor $1.1164 -
============================================== ========
No such hedges as at 31 March 2022.
b) Foreign exchange hedge with non-derivatives:
Non-derivatives, such as cash, are existing financial assets or
liabilities that hedge highly probable foreign currency cash flows
in the future and therefore act as a natural hedge.
Fuel hedge:
Derivative financial instruments
------------------------------------------------------
Non-current Current Non-current Current Net
'000 assets assets liabilities liabilities liability
At 31 March 2022 metric tonnes EUR million EUR million EUR million EUR million EUR million
-------------------------------- -------------- ------------ ------------ ------------ ------------ ------------
Effective cash flow hedge
positions 240.0 - 3.0 - (4.6) (1.6)
Discontinued cash flow hedge
positions - - - - - -
-------------------------------- -------------- ------------ ------------ ------------ ------------ ------------
Total fuel hedge 240.0 - 3.0 - (4.6) (1.6)
================================ ============== ============ ============ ============ ============ ============
Derivative financial instruments
------------------------------------------------------
Non-current Current Non-current Current Net
'000 assets assets liabilities liabilities liability
At 31 March 2021 metric tonnes EUR million EUR million EUR million EUR million EUR million
------------------------------ -------------- ------------ ------------ ------------ ------------ ------------
Effective cash flow hedge
positions 253.0 - 3.6 - (3.8) (0.2)
Discontinued cash flow hedge
positions 117.0 - 1.3 - (2.6) (1.3)
------------------------------ -------------- ------------ ------------ ------------ ------------ ------------
Total fuel hedge 370.0 - 4.9 - (6.4) (1.5)
============================== ============== ============ ============ ============ ============ ============
For the movements in other comprehensive income refer to the
consolidated statement of changes in equity.
The fuel hedge positions at year end can be analysed according
to the maturity periods and price ranges of the underlying hedge
instruments as follows:
F23 F24
At 31 March 2022 12 months 6 months
-------------------------------------- ---------- ---------
Maturity profile ('000 metric tonnes) 240.0 -
Blended capped rate $1,130.0 -
Blended floor rate $982.0 -
====================================== ========== =========
F22 F23
At 31 March 2021 12 months 6 months
-------------------------------------- ---------- ---------
Maturity profile ('000 metric tonnes) 370.0 -
Blended capped rate $554.0 -
Blended floor rate $503.0 -
====================================== ========== =========
Hedge effectiveness
The effectiveness of hedges is tested both prospectively and
retrospectively to determine the appropriate accounting treatment
of hedge gains and losses. Prospective testing of open hedges
requires making certain estimates, the most significant one being
for the future expected level of the business activity (primarily
the utilisation of fleet capacity) of the Group. Estimating the
expected level of future business activity is particularly critical
in periods of high uncertainty like the current COVID-19 pandemic
and outbreak of the war in Ukraine.
Building on these estimations of the future, management makes
judgement on the accounting treatment of open hedge instruments.
Hedge accounting for jet fuel and foreign currency cash flow hedges
was discontinued where the "highly probable" forecast criterion was
not met in accordance with the requirements of IFRS 9.
Following the COVID-19 outbreak, the majority of the Group's
fleet was grounded for a period from mid-March 2020. The fuel
consumption in F21 and early F22 was significantly lower than that
on which the Group hedging programme was originally based,
resulting in fuel and foreign currency hedge instruments being
discontinued for hedge accounting. As a consequence, hedge
accounting for certain derivatives has been discontinued and the
associated net gain on these instruments of EUR4.2 million (2021:
EUR93.6 million net loss) has been recognised in the income
statement.
None of the hedge counterparties had a material change in their
credit status that would have influenced the effectiveness of the
hedging transactions.
Sensitivity analysis
The table below shows the sensitivity of the Group's profits to
various market risks for the current and the prior year, excluding
any hedge impacts.
2022 2021
Difference in profit after tax Difference in profit after tax
EUR million EUR million
=========================================== ============================== ==============================
* 35.0
Fuel price sensitivity
Fuel price $100 higher per metric tonne -74.5
Fuel price $100 lower per metric tonne +74.5 +35.0
=========================================== ============================== ==============================
FX rate sensitivity (USD/EUR)
FX rate 0.05 higher (meaning EUR stronger) +104.2 +70.2
FX rate 0.05 lower -113.6 * 76.5
=========================================== ============================== ==============================
* 3.0
FX rate sensitivity (GBP/EUR)
FX rate 0.03 higher (meaning EUR stronger) -5.4
FX rate 0.03 lower +5.7 +3.3
=========================================== ============================== ==============================
Interest rate sensitivity (EUR)
Interest rate is higher by 100 bps +14.9 +15.4
Interest rate is lower by 100 bps -14.8 * 15.4
=========================================== ============================== ==============================
The interest rate sensitivity calculation above considers the
effects of varying interest rates on the interest income on bank
deposits and floating rate leases.
The table below shows the sensitivity of the Group's other
comprehensive income to various market risks for the current and
the prior year. These sensitivities relate to the impact of the
market risks on the balance of the cash flow hedging reserve (which
includes gains and losses related to open cash flow hedges both for
foreign exchange rates and jet fuel price).
2022 2021
Difference Difference
EUR million EUR million
=========================================================== ============ ============
Fuel price sensitivity
Fuel price $100 higher per metric tonne +20.6 +22.9
Fuel price $100 lower per metric tonne -20.6 * 22.9
=========================================================== ============ ============
FX rate sensitivity (USD/EUR)
FX rate 0.05 higher (meaning EUR stronger) -0.1 +0.1
FX rate 0.05 lower +0.1 * 0.1
=========================================================== ============ ============
Fuel volume sensitivity (metric tonn e s)
100,000 metric tonnes reduction in forecast fuel purchases -2.7 +1.1
100,000 metric tonnes increase in forecast fuel purchases +2.7 * 1.1
=========================================================== ============ ============
The sensitivity analyses for 2022 above were performed with
reference to the following market rates, as the base case:
1. For profits, annual average rates: jet fuel price $789.0 per
metric tonne; EUR/USD FX rate 1.16; EUR/GBP FX rate 0.85; and
2. For other comprehensive income, year-end spot rates: jet fuel
price $512.0 per metric tonne; EUR/USD FX rate 1.16.
Liquidity risks
Prudent liquidity risk management implies maintaining sufficient
cash and the availability of funding. In recent years the Group has
been holding a high level of cash funds compared to the needs of
the business operations. Nevertheless, the unprecedented impact of
COVID-19 on the industry was affecting the liquidity of the Group
in 2021 and 2022 especially in light of prolonged travel
restrictions. The Group responded to these special challenges with
a number of actions to improve costs and liquidity, the most
important ones being as follows:
3. continue to ensure that the flights that are operated deliver positive cash contribution;
4. securing lease financing for aircraft delivery positions until December 2022;
5. working with suppliers to reduce contracted rates and improve payment terms;
6. reducing discretionary spending and suspending non-essential capital expenditure;
7. issuance of a three-year EUR500 million bond in January 2021
that pays an annual fixed coupon of 1.35 per cent; and
8. issuance of a four-year EUR500 million bond in January 2022
that pays an annual fixed coupon of 1.00 per cent.
As a result of these measures, Wizz Air is confident in its
ability to survive, even in case of potential prolonged
restrictions or further increases in commodity prices. For further
notes, refer to the going concern assessment under Note 1.
The Group paid EUR232.6 million in F21 to settle hedging
transactions. Liquidity risk from derivative financial liabilities
is not material at 31 March 2022 due to almost no hedging activity
since the start of the pandemic.
The Group invested excess cash primarily in USD, EUR and GBP
denominated short-term time deposits with high quality bank
counterparties.
The table below analyses the Group's financial assets and
liabilities (receivable or payable either in cash or net settled in
case of certain derivative financial assets and liabilities) into
relevant maturity groupings based on the remaining period at the
statement of financial position date to the contractual maturity
date.
The amounts disclosed in the table below are the contractual
undiscounted cash flows except for derivatives where fair values
are presented. Therefore, for certain asset and liability
categories the amounts presented in this table can be different
from the respective amounts presented in the statement of financial
position.
Between
Within three months Between
three and one one and More than
months year five years five years Total
At 31 March 2022 EUR million EUR million EUR million EUR million EUR million
============================ ============ ============= ============ ============ =============
Financial assets
Trade and other receivables 110.0 11.0 20.6 - 141.6
Derivative financial
assets 0.7 - - - 0.7
Cash and cash equivalents 766.6 - - - 766.6
Short term cash deposits - 450.0 - - 450.0
Restricted cash 36.7 58.2 66.7 0.6 162.2
============================ ============ ============= ============ ============ =============
Total financial assets 914.0 519.2 87.3 0.6 1,521.1
============================ ============ ============= ============ ============ =============
Financial liabilities
Unsecured debt 6.8 11.8 1,021.8 - 1,040.4
IFRS 16 aircraft and
engine lease liability 122.1 321.4 1,338.4 847.8 2,629.7
IFRS 16 other lease
liability 0.5 1.6 6.7 5.2 14.0
JOLCO and FTL lease
liability 10.6 32.9 174.0 410.8 628.3
Loans from non-controlling
interests - - - 13.5 13.5
Convertible debt - - 26.4 - 26.4
Other payables 432.7 39.7 49.7 7.0 529.1
Derivative financial
liabilities - 4.6 - - 4.6
Financial guarantees - - - - -
============================ ============ ============= ============ ============ =============
Total financial liabilities 572.7 412.0 2,617.0 1,284.3 4,886.0
============================ ============ ============= ============ ============ =============
Between
Within three months Between
three and one one and More than
months year five years five years Total
At 31 March 2021 (restated) EUR million EUR million EUR million EUR million EUR million
============================== ============ ============= ============ ============ =============
Financial assets
Trade and other receivables** 53.1 9.1 21.5 - 83.7
Derivative financial
assets 2.0 3.1 - - 5.1
Cash and cash equivalents 1,100.7 - - - 1,100.7
Short term cash deposits - 346.8 - - 346.8
Restricted cash 22.2 12.8 119.5 14.6 169.1
============================== ============ ============= ============ ============ =============
Total financial assets 1,178.0 371.8 141.0 14.6 1,705.4
============================== ============ ============= ============ ============ =============
Financial liabilities
Unsecured debt - 358.8 513.5 - 872.3
IFRS 16 aircraft and
engine lease liability 107.4 292.3 1,137.6 454.4 1,991.7
IFRS 16 other lease
liability 0.4 1.3 6.2 3.4 11.3
JOLCO and FTL lease
liability 7.0 25.1 128.5 315.8 476.4
Loans from non-controlling
interests - - - 12.8 12.8
Convertible debt - - 26.5 - 26.5
Trade and other payables** 283.2 61.3 71.9 7.1 423.5
Derivative financial
liabilities 6.4 2.6 - - 9.0
Financial guarantees 0.7 - - - 0.7
============================== ============ ============= ============ ============ =============
Total financial liabilities 405.1 741.4 1,884.2 793.5 3,824.2
============================== ============ ============= ============ ============ =============
*As a consequence of the adjustments made to financial assets
and liabilities noted above, the maturity analysis of trade and
other receivables and trade and other payables in the table above
have been changed. As a result trade and other receivables balances
as at 31 March 2021 now total EUR83.7 million (previously EUR109.3
million) have been analysed as EUR53.1 million (previously EUR79.9
million) with maturity within three months, and EUR21.5 million
(previously EUR20.3 million) with maturity between one and five
years, amount with maturity between three months and one year did
not change . Likewise trade and other payable balances as at 31
March 2021 now total EUR423.5 million (previously EUR231.7
million), including EUR283.2 million (previously EUR206.3 million)
with maturity within three months, EUR61.3 million (previously
EUR25.4 million) with maturity within three months and one year,
EUR71.9 million (previously EURnil) with maturity within one and
five years, and EUR7.1 million (previously EURnil) with maturity
within more than five years. As a result of the change in maturity
analysis, the statement of financial position classification
between current and non-current was restated.
The Group has obligations under financial guarantee contracts.
The most significant financial guarantee contracts relate to
aircraft leases, hedging and convertible notes. For these items the
respective underlying liabilities are reflected under the
appropriate line of the financial liabilities part of the table
above (for leases the liability is presented under borrowings).
Since the liability itself is already reflected in the table, it
would not be appropriate to also include the financial guarantee
provided by another Group entity for the same obligation. The only
guarantee separately disclosed in this table relates to a contract
for the provision of public services in Hungary, with respect to
which there is no liability recognised in the statement of
financial position. This possible obligation is disclosed in the
table above within financial guarantees.
Management does not expect that any payment under these
guarantee contracts will be required by the Company.
Credit risk
Credit risk is the risk of financial loss to the Group if a
customer or counterparty to a financial instrument fails to meet
its contractual obligations. The Group's exposure to credit risk
from individual customers is limited as the large majority of the
payments for flight tickets are collected before the service is
provided.
However, the Group has significant banking, hedging, aircraft
manufacturer and card acquiring relationships that represent
counterparty credit risk. The Group analysed the creditworthiness
of the relevant business partners in order to assess the likelihood
of non-performance of liabilities and therefore assets due to the
Group. The credit quality of the Group's financial assets is
assessed by reference to external credit ratings (published by
Standard & Poor's or similar institutions) of the
counterparties as follows:
A A- Other Unrated Total
At 31 March 2022 EUR million EUR million EUR million EUR million EUR million
============================ =========== =========== =========== =========== ===========
Financial assets
Cash and cash equivalents 757.1 1.9 7.1 0.5 766.6
Short term cash deposits 450.0 - - - 450.0
Restricted cash 161.9 0.1 0.2 - 162.2
Trade and other receivables - - - 141.6 141.6
Derivative financial assets 0.7 - - - 0.7
============================ =========== =========== =========== =========== ===========
Total financial assets 1,369.7 2.1 7.3 142.1 1,521.1
============================ =========== =========== =========== =========== ===========
A A- Other Unrated Total
At 31 March 2021 EUR million EUR million EUR million EUR million EUR million
============================= =========== =========== =========== =========== ===========
Financial assets
Cash and cash equivalents 899.1 50.9 150.3 0.4 1,100.7
Short term cash deposits 346.8 - - - 346.8
Restricted cash 168.8 0.1 0.2 - 169.0
Trade and other receivables* - - - 83.7 83.7
Derivative financial assets 2.1 0.1 2.9 - 5.1
Total financial assets 1,416.8 51.1 153.4 84.1 1705.4
============================= =========== =========== =========== =========== ===========
* See note above for explanation of the change in trade and
other receivables balances as at 31 March 2021. Trade and other
receivables remain unrated.
From the unrated category within trade and other receivables the
Group has EUR25.2 million (2021: EUR35.3 million) receivables from
different aircraft lessors in respect of maintenance reserves and
lease security deposits paid. However, given that the Group
physically possesses the aircraft owned by the lessors and that the
Group has significant future lease payment obligations towards the
same lessors, management does not consider the credit risk on
maintenance reserve receivables to be material. Most of the
remaining balance in this category in both years relates to ticket
sales receivables from customers and non-ticket revenue receivables
from business partners. These balances are spread between a
significant number of counterparties and the credit performance in
these channels has historically been good.
Within cash and cash equivalents in 2022, out of the EUR7.1
million in the category "other" EURnil million (2021: EUR48.5
million) relates to cash deposits held with BBB+ rated banks. In
2021 the short term cash deposits in the other category relates to
cash deposits held with BBB+ rated banks.
Based on the information above management does not consider the
counterparty risk of any of the counterparties being material and
therefore no fair value adjustment was applied to the respective
cash or receivable balances.
Fair value estimation
The Group classifies its financial instruments based on the
technique used for determining fair value into the following
categories:
Level 1: Fair value is determined based on quoted prices
(unadjusted) in active markets for identical assets or
liabilities.
Level 2: Fair value is determined based on inputs other than
quoted prices that are observable for the asset or liability,
either directly or indirectly.
Level 3: Fair value is determined based on inputs that are not
based on observable market data (that is, on unobservable
inputs).
The following table presents the Group's financial assets and
liabilities that are measured at fair value at 31 March 2022:
Level Level Level
1 2 3 Total
EUR million EUR million EUR million EUR million
================================= ============ =========== =========== ===========
Assets
Derivative financial instruments - 0.7 - 0.7
================================= ============ =========== =========== ===========
- 0.7 - 0.7
============================================== =========== =========== ===========
Liabilities
Derivative financial instruments - 4.6 - 4.6
================================= ============ =========== =========== ===========
- 4.6 - 4.6
============================================== =========== =========== ===========
The following table presents the Group's financial assets and
liabilities that are measured at fair value at 31 March 2021:
Level 1 Level 2 Level 3 Total
EUR million EUR million EUR million EUR million
================================= =========== =========== =========== ===========
Assets
Derivative financial instruments - 5.1 - 5.1
================================= =========== =========== =========== ===========
- 5.1 - 5.1
================================= =========== =========== =========== ===========
Liabilities
Derivative financial instruments - 9.0 - 9.0
================================= =========== =========== =========== ===========
- 9.0 - 9.0
================================= =========== =========== =========== ===========
The Group measures its derivative financial instruments at fair
value, calculated by the banks involved in the hedging transactions
that fall into the Level 2 category. The banks are using generally
accepted valuation techniques, principally the Black-Scholes model
and discounted cash flow models.
All the other financial assets and financial liabilities are
measured at amortised cost.
Capital management
The Group's objectives when managing capital are: (i) to
safeguard the Group's ability to continue as a going concern in
order to provide returns for Shareholders and benefits for other
stakeholders; (ii) to secure funds at competitive rates for its
future aircraft acquisition commitments (see Note 15); and (iii) to
maintain an optimal capital structure to reduce the overall cost of
capital.
The current sources of capital for the Group are equity as
presented in the statement of financial position, bonds and other
borrowings (see Note 12), as well as to a smaller extent,
convertible debt.
Wizz Air's strategy is to hold significant cash and liquid funds
to mitigate the impact of potential business disruption events and
to invest in opportunities as they come along in an increasingly
volatile market environment. Accordingly, the Group has so far
retained all profits and paid no dividends and financed all its
aircraft and most of its spare engine acquisitions through sale and
leaseback agreements. In addition Wizz Air diversified further its
financing options through the establishment in January 2021 of a
EUR3.0 billion European Mid Term Note (EMTN) programme and issuance
of its debut bond by Wizz Air Finance Company B.V., unconditionally
and irrevocably guaranteed by Wizz Air Holdings Plc.
The existing aircraft orders of the Group create a need for
raising significant amounts of capital in the following years. The
strategy of the Group is to ensure that it has access to various
forms of long-term financing, which in turn allows the Group to
further reduce its cost of capital and the cost of ownership of its
aircraft fleet.
3. Critical accounting estimates and judgements made in applying
the Group's accounting policies
a) Maintenance policy
The estimations and judgements applied in the context of the
maintenance accounting policy of the Group impact the balance of
(i) property, plant and equipment (and, within that, of aircraft
maintenance assets, as detailed in Note 10) and (ii) aircraft
maintenance provisions (as detailed in Note 14).
Estimate: For aircraft held under lease agreements, provision is
made for the minimum unavoidable costs of specific future
maintenance obligations required by the lease at the time when such
obligation becomes certain. The amount of the provision involves
making estimates of the cost of the heavy maintenance work that is
required to discharge the obligation, including any end of lease
costs. A 10% increase in the planned costs of heavy maintenance
works at the 31 March 2022 year end would increase the balance of
both aircraft maintenance assets and aircraft maintenance
provisions by EUR8.9 million.
Estimate: The cost of heavy maintenance is capitalised and
recognised as a tangible fixed asset (and classified as an
"aircraft maintenance asset") at the earlier of: (a) the time the
lease re-delivery condition is no longer met; or (b) when
maintenance, including enhancement, is carried out. The calculation
of the depreciation charge on such assets involves making estimates
primarily for the future utilisation of the aircraft. A 46%
decrease in the F23 forecast aircraft utilisation would result in
the same average utilisation as in F22. This would cause EUR6.4
million decrease in the balance of aircraft maintenance assets.
The basis of these estimates are reviewed annually at least, and
also when information becomes available that is capable of causing
a material change to an estimate, such as renegotiation of end of
lease return conditions, increased or decreased utilisation of the
assets, or changes in the cost of heavy maintenance services.
Judgment: On a lease by lease basis the Group makes a judgement
whether it would perform future maintenance that would impact the
condition of the respective aircraft or spare engine asset in a way
that eliminates the need for paying compensation to the lessor on
the re-delivery of the leased asset. When such maintenance is not
expected then accrual is made for the compensation due to the
lessor in line with the terms of the respective lease contract.
Judgement: The policy adopted by the Group, as summarised above,
is only one of the policies available under IFRS in accounting for
heavy maintenance for aircraft held under lease agreements. A
principal alternative policy involves recognising provisions for
future maintenance obligations in accordance with hours flown or
similar measure, and not only when lease re-delivery conditions are
not met. In the judgement of the Directors the policy adopted by
the Group, whereby provisions for maintenance are recognised only
when lease re-delivery conditions are not met, provides the most
reliable and relevant information about the Company's obligations
to incur major maintenance expenditure on leased aircraft and at
the same time it best reflects the fact that an aircraft has lower
maintenance requirements in the early years of its operation. The
average age of the Group's aircraft fleet at 31 March 2022 was 5.0
years (5.4 years at 31 March 2021) . Given the policy adopted we
currently do not consider that the impact of climate change has a
material impact on maintenance provision.
b) Net presentation of government taxes and other similar
levies
The Group's accounting policy stipulates that where charges
levied by airports or government authorities on a per passenger
basis represent a government tax in fact or in substance, then such
amounts are presented on a net basis in the statement of
comprehensive income (netted against revenue).
Judgement: Management reviews all passenger-based charges levied
by airports and government authorities to ensure that any amounts
recovered from passengers in respect of these charges are
appropriately classified within the statement of comprehensive
income. Given the variability of these charges and the number of
airports and jurisdictions within which the Group operates, the
assessment of whether these items constitute taxes in nature is an
inherently complex area for some airports, requiring a level of
judgement.
c) Accounting for aircraft and spare engine assets
Judgement: When the Group acquires new aircraft and spare
engines, it applies the following critical judgements in
determining the acquisition cost of these assets:
9. Engine contracts typically include the selection of an engine
type to be installed on future new aircraft, a commitment to
purchase a certain number of spare engines, and lump-sum (i.e. not
per engine) concessions from the manufacturer. Management
recalculates the unit cost of engines by allocating lump-sum
credits over all engines ordered and by adjusting costs between
installed and spare engines in a way that ensures that identical
physical assets have an equal acquisition cost; and
10. Aircraft acquisition costs are recalculated to reflect the
impacts of: (i) any adjustment on the cost of installed engines (as
above); and (ii) concessions received from the manufacturers of
other aircraft components under selection agreements. Such
acquisition cost has relevance also for leased aircraft when
calculating the amount of total gain or loss on the respective sale
and leaseback agreement.
d) Accounting for leases
Judgement: Some of the Group's lease contracts contain lease
extension options. The extension option is taken into account in
the measurement of the lease liability only when the Group is
reasonably certain that it would later exercise the option. Such
judgement is made lease by lease, and is relevant both at
inception, for the initial measurement of the lease liability, and
also for a subsequent remeasurement of the lease liability if the
initial judgement is revised at a later date.
Judgement: The Group takes the view that, as a lessee, it is not
able to readily determine the interest rate implicit in its lease
contracts. Therefore, it applies its incremental borrowing rate for
discounting future lease payments.
The estimations made by management in accounting for leases do
not materially impact the asset and liability balances of the
Group. The majority of aircraft and spare engine assets are leased
and as such their period of depreciation is the shorter of their
useful economic lives and lease duration. As these assets are new
at the inception of the lease and typically have a useful economic
life of at least twice the duration of the lease no further
estimation has been required.
e) Income taxes
Judgement: A significant judgement has been made by the Group in
relation to the position that the Swiss tax authority would take
with respect to the calculation of income and capital gains taxes
for F18-F22 for one of the legal entities of the Group. In applying
IFRIC 23 the Group applied the "most likely amount method" and, by
relying also on professional advice, took the view that the
positions taken by the Group represent the most likely outcome for
the Swiss income tax liabilities.
f) Revenue from contracts with other partners
As explained in Note 4, revenue from contracts with other
partners relates to commissions on the sale of on-board catering,
accommodation, car rental, travel insurance, bus transfers, premium
calls and co-branded cards.
Judgement: The Group considers that it is an agent (as opposed
to principal) in relation to all its contracts with other partners.
Accordingly, Wizz recognises revenue from these contracts on a net
(commission) basis.
Out of these contracts, the one for the provision of on-board
catering services is the most significant in value and it is also
the most complex from the perspective of making the 'agent versus
principal' assessment/ judgement. The Company's judgement was based
on the facts that it is the partner that (i) enters into contracts
with the passengers/customers and bears the liability towards them
for delivering the products and services; (ii) defines the majority
of the product portfolio, manages the inventory, is responsible for
product availability/ outage, has title to the inventory and bears
the risk of loss; and (iii) has discretion in establishing prices.
The difference on this contract between gross sales and net
commission revenue (as recognised in the statement of comprehensive
income) was EUR40.8 million (2021: EUR13.6 million).
g) Aircraft in Ukraine
Judgement: Based on photographic and local employee information
management believes that these aircraft are in good condition and
have not been damaged in the conflict. Maintenance could also be
performed to a limited extent for one aircraft ensuring that
aircraft is better prepared for storage. The aircraft are assumed
to be returned to the fleet by the end of the summer season.
Estimate: The incremental maintenance provision requirement for
the four aircraft stranded in Ukraine is a judgement by management
where the range of outcomes is estimated between a minimum of
EUR0.8m and maximum of EUR30.0m less amounts already provided of
EUR1.6m. The maximum of the range represents a very remote,
worst-case scenario which assumes that no access is granted to the
aircraft for 6-12 months, no mitigation action can be taken in the
meantime, and major overhaul is required on all components,
including engines.
4. Revenue
The split of total revenue presented in the statement of
comprehensive income, being passenger ticket revenue and ancillary
revenue, is a non-IFRS measure (or alternative performance
measure).. The existing revenue presentation is considered relevant
for the users of the financial statements because: (i) it mirrors
disclosures presented outside of the financial statements; and (ii)
it is regularly reviewed by the Chief Operating Decision Maker for
evaluating financial performance of the (now only one) operating
segment.
Revenue from contracts with customers can be disaggregated as
follows based on IFRS 15:
2022 2021
EUR million EUR million
============================================ =========== ===========
Revenue from contracts with passengers 1,627.1 704.1
Revenue from contracts with other partners 36.4 34.9
Total revenue from contracts with customers 1,663.4 739.0
============================================ =========== ===========
These two categories represent revenues that are distinct from a
nature, timing and risks point of view. Revenue from contracts with
other partners relates to commissions on the sale of on-board
catering, accommodation, car rental, travel insurance, bus
transfers, premium calls and co-branded cards.
The contract assets reported in F22 as part of trade and other
receivables amounted to EUR2.3 million (2021: EUR0.4 million) and
the contract liabilities (unearned revenues) reported as part of
deferred income were EUR326.6 million (2021: EUR65.0 million). Of
the EUR1,627.1 million revenue from contract with customers
recognised in F22 (2021: EUR704.1 million), EUR65.0 million (2021:
EUR172.3 million) was included in the contract liability balance at
the beginning of the year (see unearned revenue i n Note 13).
5. Operating loss
Net other expenses
Net other expenses increased from EUR1.2 million in F21 to
EUR53.2 million in F22, as there was a significant increase in
other expenses after the industry's recovery from the COVID-19
pandemic.
The following charges are included in net other
expenses:
2022 2021
EUR million EUR million
------------------------------------------------- ------------ ------------
Gain on sale and leaseback transactions 49.7 40.6
Overhead related expenses (40.1) (30.9)
Crew related expenses (32.5) (14.6)
Flight disruption related expenses (29.5) (6.7)
Expense relating to short-term leases (2.5) -
Auditors' remuneration (see Note below) (1.4) (1.0)
Impairment of receivables (1.0) -
Expense relating to variable lease payments (0.5) -
Net other income 4.6 11.4
================================================= ============ ============
Net other expenses (53.2) (1.2)
------------------------------------------------- ------------ ------------
Overhead related expenses include fees for legal support,
professional services, consulting, and IT related services.
Auditors' remuneration
2022 2021
EUR
million EUR million
================================================= ======== ===========
Fees payable to Company's auditors for the audit
of the consolidated financial statements 1.0 0.8
Audit of financial statements of subsidiaries
pursuant to legislation 0.2 0.1
Audit-related assurance services 0.1 -
Other assurance services 0.1 0.1
Total remuneration of auditors 1.4 1.0
================================================= ======== ===========
Fees payable to Company's auditors for the audit of the
consolidated financial statements includes amounts in respect of
the interim review, and out of pocket expenses.
Inventories
Inventories totalling EUR14.5 million were recognised as
maintenance materials and repairs expenses in the year (2021:
EUR6.7 million).
6. Net financing income and expense
2022 2021
EUR million EUR million
Interest income 2.8 9.0
ETS put option fair value gain - 2.6
Financial income 2.8 11.6
================================= ============ ============
Interest expenses:
Convertible debt (2.0) (2.0)
IFRS 16 lease liability (71.3) (68.1)
JOLCO and FTL lease liability (4.7) (3.0)
Unsecured debt (10.5) (3.7)
Other (1.0) (1.6)
Financial expenses (89.5) (78.4)
================================= ============ ============
Net foreign exchange (loss)/gain (89.5) 28.4
================================= ============ ============
Net financing expense (176.2) (38.4)
================================= ============ ============
Interest income and expense include interest on financial
instruments (earned on cash and cash equivalents and short term
deposits).
Net foreign exchange loss in net amount of EUR96.0 million for
F22 relates to remeasurement of lease liabilities denominated in
USD (Note 2). During F22 the USD/EUR exchange rate decreased from
1.17 USD/EUR at 31 March 2021 to 1.11 USD/EUR at 31 March 2022
which resulted in an increase in lease liability and related
recognition of foreign exchange loss.
7. Exceptional items and underlying loss
Exceptional items
Exceptional items are disclosed separately in the financial
statements where it is necessary to do so to provide further
understanding of the financial performance of the Group. They are
material items of income or expense that are shown separately due
to the conditions created by COVID-19 and outbreak of the war in
Ukraine and its impact on jet fuel prices.
In F22 the Group had exceptional operating income of EUR4.3
million (total of EUR3.0 million gain on transactions resulting in
gain and EUR1.3 million gain on transaction resulting in a loss
during the financial year) relating to cash flow hedges regarding
future fuel purchases that were classified as discontinued (refer
to Note 2) as a consequence of the partial grounding of the Group's
fleet under the COVID-19 virus situation. In F21 the Group had
exceptional operating expenses of EUR93.6 million relating to cash
flow hedges regarding future fuel purchases that were classified as
discontinued (refer to Note 2) during 2021 as a consequence of the
grounding of the majority of the Group's fleet under the COVID-19
virus situation. The change is due to the significant fuel price
movements and also due to the lower level of hedging in F22. These
items were used by management in the determination of the non-IFRS
underlying profit measure for the Group - see below.
Underlying loss
2 022 2021
EUR million EUR million
================================= =========== ===========
Net loss for the year (642.5) (576.0)
Adjustment for exceptional items (4.3) 93.6
================================= =========== ===========
Underlying l oss after tax (646.7) (482.4)
================================= =========== ===========
The tax effects of the adjustments made above are
insignificant.
8. Income tax expense
Recognised in the statement of comprehensive income:
2 022 2021
EUR million EUR million
=============================================================== ============ ============
Current tax on loss for the year 0.3 0.1
Adjustment for current tax of prior years (0.4) (0.1)
Other income-based taxes for the year 5.7 4.8
Adjustment for income-based taxes of prior years (1.0) (3.1)
--------------------------------------------------------------- ------------ ------------
Total current tax expense 4.6 1.7
--------------------------------------------------------------- ------------ ------------
Deferred tax - increase/(decrease) in deferred tax liabilities (3.0) 6.3
Deferred tax - increase/(decrease) in deferred tax assets (0.6) 1.5
=============================================================== ============ ============
Total deferred (benefit)/ tax charge (3.6) 7.8
=============================================================== ============ ============
Total tax charge 0.9 9.5
=============================================================== ============ ============
The Company, that is Wizz Air Holdings Plc, has a tax rate of
13.97 per cent (2021: 13.97 per cent). The tax rate relates to
Switzerland, where the Company is tax resident. The income tax
expense is fully attributable to continuing operations. There was
no deferred tax asset recognised in relation to the losses incurred
by the Group in 2022 mainly because the losses incurred by the main
airline subsidiary of the Group are not eligible for utilisation
against taxable profits in the future.
Reconciliation of effective tax rate
The tax charge for the year (including both current and deferred
tax charges and credits) is different to the Company's standard
rate of corporation tax of 13.97 per cent (2021: 13.97 per cent).
The difference is explained below.
2022 2021
EUR million EUR million
========================================================================================== ============ ============
L oss before tax (641.5) (566.5)
========================================================================================== ============ ============
Tax at the corporation tax rate of 13.97 per cent (2021: 13.97 per cent) (89.6) (79.1)
Adjustment for current tax of prior years (0.4) (0.1)
Adjustment for income-based taxes of prior years (1.0) (3.1)
Increase/(decrease) in deferred tax liabilities due to changes in Swiss effective tax rate - 1.7
Effect of different tax rates of subsidiaries versus the parent company 79.7 76.6
Effect of current year losses not being eligible for utilisation against taxable profits
in
future years 6.6 8.8
Other income-based foreign tax 5.7 4.7
========================================================================================== ============ ============
Total tax charge 0.9 9.5
========================================================================================== ============ ============
Effective tax rate (0.1)% (1.7)%
========================================================================================== ============ ============
The effect of different tax rates of subsidiaries is a
composition of impacts primarily in Switzerland and the UK,
relating to the airline subsidiaries of the Group. The Company paid
EUR4.9 million tax in the year (2021: EUR3.6 million).
Substantially all the losses and the profits of the Group in F22
and F21, respectively, were made by the airline subsidiaries of the
Group, and substantially all the tax charges and credits presented
in this Note were incurred by these entities.
In the Spring Budget 2020, the UK Government announced that from
1 April 2020 the corporation tax rate would remain at 19% (rather
than reducing to 17%, as previously enacted). The Government made a
number of budget announcements on 3 March 2021. These include
confirming that the rate of corporation tax will increase to 25%
from 1 April 2023. This new law was substantively enacted on 24 May
2021. There is no material impact on the current and deferred
taxation balances of Wizz Air UK Limited.
Other income-based foreign tax represents the local business tax
and the "innovation contribution" payable in Hungary in F22 and F21
by the Hungarian subsidiaries of the Group, primarily Wizz Air
Hungary Ltd. Hungarian local business tax and innovation
contribution are levied on an adjusted profit basis.
Recognised in the statement of other comprehensive income
2022 2 021
EUR million EUR million
----------------------------------------------- ----------- -----------
Deferred tax related to movements in cash flow
hedging reserve - (0.5)
=============================================== =========== ===========
Total tax charge - (0.5)
=============================================== =========== ===========
Interpretation 23 "Uncertainty over Income Tax Treatments"
(IFRIC 23)
The Group has open tax periods in a number of jurisdictions
involving uncertainties of different nature and materiality, the
most important open ones being for F18-F21. The Group assessed the
impact of uncertainty of each of its tax positions in line with the
requirements of IFRIC 23. The outcome of this assessment in F22 was
to release EUR0.8 million of provisions previously made, due to the
facts that during the year: (i) some prior tax periods expired for
tax authority examination; or (ii) there was a tax examination that
confirmed the treatment applied by the Company. For all other tax
returns the Group concluded that it was probable that the tax
authority would accept the uncertain tax treatment that has been
taken or is expected to be taken in those tax returns and therefore
accounted for income taxes consistently with that tax treatment.
The final liabilities, as later assessed by the tax authorities,
may vary from the amounts that have been recognised by the
Group.
9. Loss per share
Basic and diluted loss per share
Basic earnings or loss per share is calculated by dividing the
profit or loss attributable to equity holders of the Company by the
weighted average number of Ordinary Shares in issue during each
year. There is no difference between the basic and diluted loss per
share for F22 and F21 as potential ordinary shares are
anti-dilutive due to incurred loss.
2022 2021
------------------------------------------- ---------- ----------
Loss for the year, EUR million (631.8) (576.0)
=========================================== ========== ==========
Weighted average number of Ordinary Shares
in issue 99,812,331 85,545,648
=========================================== ========== ==========
Basic and diluted loss per share, EUR (6.33) (6.73)
=========================================== ========== ==========
There were no Convertible Shares in issue at 31 March 2022
(17,377,203 at 31 March 2021). These shares were
non--participating, i.e. the loss attributable to them is nil.
These shares were not included in the basic loss per share
calculation above.
Underlying loss per share
The underlying earnings per share is a fully diluted non-IFRS
measure defined by the Company, calculated as follows:
2 022 2021
============================================================================= ========== ==========
Underlying loss for the year (see Note 7), EUR million (636.1) (482.4)
Weighted average number of Ordinary Shares for underlying earnings per share 99,812,331 85,545,648
============================================================================= ========== ==========
Underlying loss per share, EUR (6.37) (5.64)
============================================================================= ========== ==========
The calculation of the underlying EPS is different from the
calculation of the IFRS diluted EPS measure in that for earnings
the underlying loss for the year was used (see Note 7) as opposed
to the statutory (IFRS) loss for the year. The underlying EPS
measure was introduced by the Company to better reflect the
underlying earnings performance of the business.
10. Property, plant and equipment
Advances
Aircraft Advances paid
Land Aircraft assets Fixtures paid for RoU assets RoU
and maintenance and and for aircraft aircraft assets
building assets parts fittings aircraft maintenance and spares other
EUR EUR EUR EUR EUR assets EUR EUR Total
million million million million million EUR million million million EUR million
Cost
At 1 April
2020 18.1 463.4 354.9 12.6 546.0 192.0 2,422.5 10.9 4,020.5
Additions 0.1 27.9 162.1 0.7 165.1 41.7 418.4 4.6 820.6
Disposals - (65.7) (25.3) (4.7) (129.8) (12.2) (40.4) - (278.1)
Transfers - 4.6 54.2 - (54.2) (4.6) - - -
FX
translation
effect - 0.1 - - - 0.5 9.1 - 9.7
============= ========= =========== ======== ========= ========== =========== ========== ======== ===========
At 31 March
2021 18.2 430.3 545.9 8.6 527.1 217.3 2,809.6 15.5 4,572.5
------------- --------- ----------- -------- --------- ---------- ----------- ---------- -------- -----------
Additions 7.6 36.1 163.8 2.7 407.6 40.5 738.9 0.6 1,397.8
Disposals - (126.1) (19.5) - (200.2) (0.3) (137.2) - (483.3)
Transfers - 33.0 - - - (33.0) - - -
FX
translation
effect - 0.7 - - - 0.1 2.8 - 3.6
At 31 March
2022 25.8 374.0 690.3 11.3 734.4 224.6 3,414.1 16.1 5,490.6
============= ========= =========== ======== ========= ========== =========== ========== ======== ===========
Accumulated
depreciation
At 1 April
2020 2.1 287.0 41.7 5.5 - - 1,128.1 3.2 1,467.5
Depreciation
charge
for the year 1.2 77.3 25.9 0.9 - - 229.4 1.8 336.5
Disposals - (65.7) (5.7) - - - (40.4) - (111.8)
FX
translation
effect - 0.3 (0.3) - - - 2.0 - 2.0
At 31 March
2021 3.3 298.9 61.5 6.4 - - 1,319.1 5.0 1,694.2
============= ========= =========== ======== ========= ========== =========== ========== ======== ===========
Depreciation
charge
for the year 1.2 89.0 33.1 1.2 - - 310.1 2.2 436.8
Disposals - (124.6) (10.8) - - - (137.1) - (272.5)
FX
translation
effect - 0.1 - - - - 0.6 - 0.7
At 31 March
2022 4.5 263.4 83.8 7.6 - - 1,492.7 7.2 1,859.2
============= ========= =========== ======== ========= ========== =========== ========== ======== ===========
Net book
amount
At 31 March
2022 21.3 110.6 606.5 3.7 734.4 224.6 1,921.4 8.9 3,631.4
============= ========= =========== ======== ========= ========== =========== ========== ======== ===========
At 31 March
2021 14.9 131.4 484.4 2.2 527.1 217.3 1,490.5 10.4 2,878.2
============= ========= =========== ======== ========= ========== =========== ========== ======== ===========
The Group entered into various financing arrangements in order
to finance aircraft including Sale and Leaseback, Japanese
Operating Lease with Call Option (JOLCO) and French Tax Lease (FTL)
structures. Certain of these arrangements include Special Purpose
Vehicles (SPV) in the financing structure and in accordance with
IFRS 10, where the Group has control of these entities, these are
consolidated in the Group balance sheet. Aircraft assets and parts
leased under JOLCO as part of sale and leaseback arrangements are
not classified as leases under IFRS 16 and treated as aircraft
assets and parts (as if there were no sale at all).
Other Right-of-Use (RoU) assets include leased buildings and
simulator equipment. Please refer to Note 12 for details on lease
liabilities.
Additions to aircraft maintenance assets (EUR36.1 million in F22
and EUR27.9 million in F21) were fixed assets created primarily
against provision, as the Group's aircraft or their main components
no longer met the relevant return conditions under lease
contracts.
Additions to "advances paid to aircraft maintenance assets"
reflect primarily the advance payments made by the Group to the
engine maintenance service provider under FHAs.
Additions to "advances paid for aircraft" represent PDPs made in
the year, while disposals in the same category represent PDP
refunds received from the manufacturer where the respective
aircraft or spare engine was leased (i.e. not purchased) by the
Group. During F22 in the statement of cash flows the cash inflow
was EUR190.0 million "refund of advances paid for aircraft" and the
cash outflow was EUR407.6 million "advances paid for aircraft".
The Group has reviewed the expected useful economic lives
attributed to its leased aircraft fleet and notes that the duration
of its leases is significantly less than the current expected life
of the aircraft and accordingly no change as a result of climate
change has been made.
Impairment assessment
An impairment assessment was performed for the Group's aircraft
fleet which comprises a single cash generating unit (CGU) that
includes virtually all property, plant, equipment, and also the
intangible assets of the Group. The recoverable amount of that CGU
was estimated by value in use calculations based on cash flow
projections in the plan approved by the Board for the following
three financial years up to and including March 2025.
Management's assessment of future trends includes trading and
other assumptions - such as fleet size, passenger numbers, load
factors, commodity prices, foreign exchange rates - based on
external and internal inputs, as well as climate change risks and
opportunities outlined in the TCFD disclosure. Key assumptions for
the jet fuel price and USD exchange rate were the following:
2023 2024 2025
Je t fuel price (EUR per metric tonne) 1,050.0 950.0 950.0
U SD/EUR exchange rate 1 .1 1.1 1.1
An average growth rate of 2.1% (2021: 1.7%) was used to
extrapolate cash flow projections beyond March 2025 for a period of
12 years in total to cover all lease terms in the existing aircraft
fleet. A pre-tax discount rate of 9.7% (2021: 8.0%) was derived
from the weighted average cost of capital of the Group. The risk of
significant adverse changes in cash flows were taken into account
by calculating and weighting management's base case approved plan
with a downside scenario that is consistent with that used in the
Group's going concern assessment. Sensitivity analysis was
performed by management to assess the impact of changes in its
trading assumptions and the key assumptions detailed above.
Management did not identify any reasonable possible changes in
assumptions that would cause an impairment.
Four aircraft in Ukraine
The above impairment assessment included the four aircraft on
the ground in Ukraine, with a total net book value of EUR25.7
million . Based on photographic and local employee information
management believes that these aircraft are in good condition and
have not been damaged in the conflict. Whilst not a separate CGU
cash flow projections were estimated for these aircraft based on
the average cash contribution generated per aircraft in the Group's
fleet adjusted for a downward scenario according to the plans and
calculations described above, and the cost of planned maintenance
of the particular aircraft. Management's working assumption is that
these aircraft will be returned to the fleet by the end of the
summer season, however, delays to the date until the aircraft
remain on the ground can cause material changes to their estimated
recoverable amount. If the aircraft do not return into service for
a prolonged period of time, then additional consideration will be
needed in the upcoming reporting cycles.
11. Derivative financial instruments
2022 2021
EUR million EUR million
======================================= =========== ===========
Assets
Current derivatives
Cash flow hedges 0.7 3.8
Discontinued hedges - 1.3
======================================= =========== ===========
Total derivative financial assets 0.7 5.1
======================================= =========== ===========
Liabilities
Current derivatives
Cash flow hedges (4.6) (6.1)
Discontinued hedges - (2.9)
======================================= =========== ===========
Total derivative financial liabilities (4.6) (9.0)
======================================= =========== ===========
Derivative financial instruments represent cash flow and fair
value hedges (see Note 2 ). The full value of a hedging derivative
is classified as a current asset or liability if the remaining
maturity of the hedged item is less than a year.
The changes in the net position of assets and liabilities in
respect of open cash flow hedges are detailed in the consolidated
statement of changes in equity.
The mark-to-market gains (derivative financial assets) were
generated on gains on call options bought (as part of zero-cost
collar instruments) and FX forward transactions that were in the
money at year end.
The mark-to-market losses (derivative financial liabilities)
were generated on losses on put options sold (as part of zero-cost
collar instruments) that were out of the money at year end.
12. Borrowings
2022 2021
EUR million EUR million
--------------------------------------------- ------------ -------------
Lease liability under IFRS 16 374.3 341.7
Unsecured debt - 350.3
Liability related to JOLCO and FTL contracts 38.8 30.1
--------------------------------------------- ------------ -------------
Total current borrowings 413.1 722.1
--------------------------------------------- ------------ -------------
Lease liability under IFRS 16 1,972.9 1,452.2
Unsecured debt 997.9 499.2
Loans from non-controlling interests 13.5 12.8
--------------------------------------------- ------------ -------------
Liability related to JOLCO and FTL contracts 541.0 424.5
--------------------------------------------- ------------ -------------
Total non-current borrowings 3,525.3 2,388.7
--------------------------------------------- ------------ -------------
Total borrowings 3,938.4 3,110.8
============================================= ============ =============
The Company issued GBP300.0 million commercial paper in April
2020 through the Covid Corporate Financing Facility (CCFF) with the
Bank of England that was rolled over by twelve months in February
2021. The CCFF was repaid in February 2022. On 19 January 2021,
Wizz Air Finance Company B.V., a 100 per cent owned subsidiary of
Wizz Air Holdings Plc., issued EUR500.0 million 1.35 per cent
Eurobond, fully and irrevocably guaranteed by the Company, under
the EUR3,000.0 million EMTN programme with a maturity in January
2024. Further to that, on 19 January 2022, Wizz Air Finance Company
B.V., a 100 per cent owned subsidiary of Wizz Air Holdings Plc.,
issued EUR500.0 million 1.00 per cent Eurobond, fully and
irrevocably guaranteed by the Company, under the EUR3,000.0 million
EMTN programme with a maturity in January 2026.
The maturity profile of borrowings as at 31 March 2022 is as
follows:
IFRS 16
aircraft IFRS 16 JOLCO Loans from
and engine other lease and FTL Unsecured non-controlling
lease liability liability lease liability debt interests Total
EUR million EUR million EUR million EUR million EUR million EUR million
----------------- ----------------- -------------- ----------------- ------------ ----------------- ------------
Payments due:
Within one
months 41.7 0.2 - - - 41.8
Between one and
three months 61.5 0.3 9.7 - - 71.5
Within three
months
and one year 269.2 1.4 29.2 - - 299.9
Between one and
five years 1,176.2 5.7 161.6 997.9 - 2,341.3
More than five
years 788.7 2.2 379.4 - 13.5 1,183.8
----------------- ----------------- -------------- ----------------- ------------ ----------------- ------------
Total borrowings 2,337.3 9.8 579.9 997.9 13.5 3,938.4
================= ================= ============== ================= ============ ================= ============
The maturity profile of borrowings as at 31 March 2021 is as
follows:
IFRS 16
aircraft IFRS 16 JOLCO and Loans from
and engine other lease FTL lease Unsecured non-controlling
lease liability liability liability debt interests Total
EUR million EUR million EUR million EUR million EUR million EUR million
--------------------- ------------------ -------------- ------------ ------------ ----------------- ------------
Payments due:
Within one months 45.3 0.1 - - - 45.4
Between one and
three months 45.6 0.7 6.4 - - 52.7
Within three months
and one year 248.8 1.1 23.7 350.3 - 623.9
Between one and
five years 1,013.9 5.7 122.5 499.2 - 1,641.3
More than five
years 429.2 3.5 302.0 - 12.8 747.5
--------------------- ------------------ -------------- ------------ ------------ ----------------- ------------
Total borrowings 1,782.8 11.1 454.6 849.5 12.8 3,110.8
===================== ================== ============== ============ ============ ================= ============
The total cash outflow for leases, including JOLCO and FTL,
during F22 was EUR470.7 million (2021: EUR405.9 million). See note
10 for details on right-of-use assets.
13. Deferred income
2022 2 021
EUR million EUR million
================================== ============ ============
Non-current financial liabilities
Deferred income 63.0 43.5
================================== ============ ============
Current financial liabilities
Unearned revenue 326.6 65.0
Other 7.2 3.0
================================== ============ ============
333.8 68.0
================================== ============ ============
Total deferred income 396.8 111.5
================================== ============ ============
Non-current deferred income represents the value of benefit for
the Group coming from concessions (cash credits and free aircraft
components) received from aircraft and certain component suppliers
that will be recognised as a credit (an aircraft rentals expenses
decreasing item) on a straight-line basis over the lease term of
the respective asset.
Current deferred income represents the value of tickets paid by
passengers for which the flight service is yet to be performed
("unearned revenue"), the value of membership fees paid but not yet
recognised and the current part of the value of supplier credits
received. The lower deferred income in F21 was due to the
significant drop in ticket sales due to the COVID-19.
The contract liabilities (unearned revenue) of EUR326.6 million
existing at 31 March 2022 (EUR65.0 million at 31 March 2021) will
become revenue during F23 (subject to further cancellations that
might happen after the year end). The lower basis of contract
liabilities in F21 was driven by the lower business activity and
shorter booking windows during and towards the end of the financial
year, both due to the COVID-19.
14. Provisions for other liabilities and charges
Aircraft maintenance Other Total
EUR million EUR million EUR million
================================================= ==================== =========== ===========
At 1 April 2020 105.9 15.3 121.2
================================================= ==================== =========== ===========
Non-current provisions 44.2 2.7 46.9
Current provisions 61.7 12.6 74.3
------------------------------------------------- -------------------- ----------- -----------
Capitalised within property, plant and equipment 25.9 - 25.9
Charged to comprehensive income - 5.7 5.7
Used during the year (53.7) (10.2) (63.9)
================================================= ==================== =========== ===========
At 31 March 2021 78.1 10.8 88.9
=================================================
Non-current provisions 49.3 1.8 51.1
Current provisions 28.8 9.0 37.8
================================================= ==================== =========== ===========
Capitalised within property, plant and equipment 21.0 - 21.0
Charged to comprehensive income 0.8 19.0 19.8
Used during the year (11.1) (11.5) (22.6)
================================================= ==================== =========== ===========
At 31 March 2022 88.8 18.3 107.1
=================================================
Non-current provisions 43.0 0.9 43.9
Current provisions 45.8 17.4 63.2
=================================================
Non-current provisions relate to future aircraft maintenance
obligations of the Group on leased aircraft and spare engines,
falling due typically between one and five years from the balance
sheet date. Current aircraft maintenance provisions relate to heavy
maintenance obligations expected to be fulfilled in the coming
financial year. The amount of provision reflects management's
estimates of the cost of heavy maintenance work that will be
required in the future to discharge obligations under the Group's
lease agreements (see Note 3). Maintenance provisions in relation
to engines covered by FHA agreements are netted off with the FHA
prepayments made to the engine maintenance service provider in
respect of the same group of engines.
Other provisions mainly relate to liabilities for EU Regulation
(EC) No. 261/2004 (EU 261) compensation to customers, refunds made
to passengers, and uncertain tax positions. The value of the
provision is determined based on known eligible events and
historical claim patterns.
15. Capital commitments
At 31 March 2022 the Group had the following contracted capital
commitments:
11. A commitment to purchase 325 Airbus aircraft of the
A320-family in the period 2022-2027. Of the 325 aircraft 278 relate
to the "neo" version of the A320-family (59 from the purchase
orders placed in June 2015, 144 from the purchase order placed in
November 2017 and 75 from the purchase order placed in November
2021), while the remaining 47 relate to the "neo XLR" version (20
from the purchase order placed in June 2019 and 27 the purchase
order placed in November 2021). The total commitment is valued at
US$45.8 billion (EUR41.1 billion) based on list prices last
published in 2018 and escalated annually until the reporting date
based on contract terms (2021: US$34.1 billion (EUR29.1
billion);
12. As at the date of approval of this document out of the 325
aircraft 40 are to be delivered in F23 and for 29 financing is
already contracted. The Group uses various financing arrangements
in order to finance aircraft including Sale and Leaseback, Japanese
Operating Lease with Call Option (JOLCO) and French Tax Lease (FTL)
structures; and
13. A commitment to purchase 32 IAE "neo" (GTF) spare engines in
the period 2022-2026. In July 2016 the Group entered into an engine
selection agreement with Pratt & Whitney that, among other
matters, included a commitment for the Group to purchase 16 spare
engines. In September 2019 the Group restated and amended this
engine selection agreement with certain other commitments including
a purchase of 25 additional spare engines. In October 2021 the
Group committed to purchase further 2 spare engines. The total
commitment is valued at US$534.7 million (EUR480.4 million) at list
prices in 2022 US$ terms (2021: US$557.4 million (EUR474.5
million), valued at 2021 list prices). As at the date of approval
of this document out of the 32 engines 5 are to be delivered in F23
and none of them is financed yet.
16 . Contingent liabilities
Legal disputes
European Commission state aid investigations
Between 2011 and 2015, the European Commission has initiated
state aid investigations with respect to certain arrangements made
between Wizz Air and the following airports, respectively: Timi
oara, Cluj-Napoca, Târgu Mure , Beauvais and Girona. In the context
of these investigations, Wizz Air has submitted its legal
observations and supporting economic analyses of the relevant
arrangements to the European Commission, which are currently under
review. The European Commission has given notice that the state aid
investigations involving Wizz Air will be assessed on the basis of
the new "EU Guidelines on State aid to airports and airlines" which
were adopted by the European Commission on 20 February 2014. Where
relevant, Wizz Air has made further submissions to the European
Commission in response to this notification. In relation to the
Timi oara arrangements, the European Commission confirmed on 24
February 2020 that the arrangements did not constitute state aid.
We are awaiting decisions in relation to the other airport
arrangements mentioned herein above. Ultimately, an adverse
decision by the European Commission could result in a repayment
order for the recovery from Wizz Air of any amount determined by
the European Commission to constitute illegal state aid. None of
these ongoing investigations are expected to lead to exposure that
is material to the Group.
Claims by Carpatair
Between 2011 and 2013, Carpatair, a regional airline based in
Romania, has initiated a number of legal proceedings in Romania
alleging that Wizz Air has been receiving state aid from Timi oara
airport, demanding that Wizz Air reimburse any such state aid. In
addition, Carpatair has initiated an action for damages demanding
recovery from Wizz Air of approximately EUR93.0 million in alleged
damages, which damages claim was dismissed by the Bucharest court
of appeals on the basis of the substantive argument that Carpatair
lacks an interest in the matter. The decision by the Bucharest
court of appeals is currently subject to appeal. Importantly, in
light of the favourable European Commission decision on the Timi
oara arrangements referred to above, it is expected that the
Romanian courts will eventually rule in favour of Wizz Air
dismissing the respective requests and claims filed by
Carpatair.
No provision has been made by the Group in relation to these
issues because there is currently no reason to believe that the
Group will incur charges from these cases.
17 . Related parties
Identity of related parties
Related parties are:
14. Indigo Hungary LP and Indigo Maple Hill LP (collectively
referred to as "Indigo" here), because it has appointed two
Directors to the Board of Directors (all in service at 31 March
2022); and
15. key management personnel (Directors and Officers).
Indigo, Directors and Officers altogether held 25.6 per cent of
the voting shares of the Company at 31 March 2022 (2021: 11.4 per
cent).
Transactions with related parties
Transactions with Indigo
At 31 March 2022 Indigo held 24,684,895 Ordinary Shares (equal
to 23.9 per cent of the Company's issued share capital) and nil
Convertible Shares of the Company (2021: 7,307,692 Ordinary Shares
and 17,377,203 Convertible Shares).
Indigo has interest in convertible debt instruments issued by
the Company. The Company's liability to Indigo, including principal
and accrued interest, was EUR26.4 million at 31 March 2022 (2021:
EUR26.7 million).
During the year ended 31 March 2022 the Company entered into
transactions with Indigo as follows:
16. the Company recognised interest expense on convertible debt
instruments held by Indigo in the amount of EUR2.0 million (2021:
EUR2.0 million); and
17. fees of EUR0.3 million (2021: EUR0.2 million) were paid to
Indigo in respect of the remuneration of two of the Directors who
were delegated by Indigo to the Board of Directors of the
Company;
18. conversion of Convertible Shares to Ordinary Shares.
Transactions with key management personnel
Officers (members of executive management) and Directors of the
Board are considered to be key management personnel. The
compensation of key management personnel, including Non-Executive
Directors, is as follows:
2022 2 021
EUR million EUR million
Salaries and other short-term employee benefits 5.4 3.5
Social security costs 1.1 0.8
Share-based payments 5.6 3.1
Amounts paid to third parties in respect of Directors' service 2.5 2.7
Total key management compensation expense 14.6 10.2
There were no termination benefits paid to any key management
personnel in the year or the prior year.
There were no post-employment benefits and other long-term
benefits provided to any key management personnel in the year or
the prior year.
There were no material transactions with related parties during
the financial year except as indicated below.
In addition the group has contracted with a related party of the
CEO to provide IT services with regards to Machine Learning. The
amount paid for this service in F22 was EUR1.2 m illion (F21:
EUR0.2 m illion , which in the judgement of the Board was not
material).
18 . Prior period restatements
The consolidated statement of financial position for the year
ended 31 March 2021 has been restated as follows:
2021 2021
As previously stated I mpact of maintenance related accrual short term - long term reclassification As restated
EUR million EUR million
LIABILITIES
N on- current l iabilities
Trade and other payables - 79.0 79.0
Current liabilities
Trade and other payables 465.7 (79.0) 386.7
See Note 2 for more details on this change in classification
between current and non-current. For 2020 out of EUR469.6 million
of current trade and other payables previously reported, EUR70.8
million should have been classified as non-current.
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END
FR FPMMTMTAMMMT
(END) Dow Jones Newswires
June 08, 2022 02:01 ET (06:01 GMT)
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