Earnings Call: Q4 2019

May 31, 2019

Good morning, everyone. Thank you for coming to this meeting. Let me just start with saying that I went to Bloomberg this morning and and you're going to do that. There is a few screen blown into your paste and you see your numbers in that and falling during the it's hard to be complete. And I can tell you that the market is wrong, and that's in terms of price approved that the market is wrong and we are right. So we had a report in fiscal 2019, today. We believe it was 34 of the most 35 minute passengers. Some of higher unit avenues year on year and some of lower exterior unit cost. And I think this is quite a distinction, compared to the rest of the market. And I think we are in a different place, we're spending a little analyzing video. We are the highest margin business today, and we are the lowest was airline, India, SSP. Fast interest growth, 17%, revenue grew 20%, with load factors up 1.5%. I think we are on a Pangolin target with regard to net profit versus our latest guidance, 292 a little bit. If you exclude this group, it should take its continued business. It's EUR 295,000,000. We have been controlling our cost online or competitors. Some of it, I think, is still a topic that we always chase the superintendity. And some of it is coming from the updating of the field for AC-one hundred and twenty one. And now the industrial and roll out of AC-three thousand one hundred aircraft. And we believe that our fleet is fast to period to balance our competitors, operating terms of gauge. As well as efficiency and unit cost production. We continue to invest into our people, in many ways, into our customers into operations to make sure that, they are a more resilient business category, more resilient operating model especially putting that in whole desktop industry, how this topic of software was. And I don't think you can expect much better this type of a leader, but we would stand back to us to really report that I took them out there. Finally, I'll back on track with regard to absolute revenue Russia. We changed our cabin back policy asking if we got it right now, it started producing as the revenue properly. I was asking if there's also eased some of the operating processes of the airline. And with that, we are guiding the market, for 330 150,000,000 of profit. So that would obviously be a record profit. Do we think the year is challenging in front of us, yes, if it's challenging, what do we thing that, we are selling firm and confident, with regards to delivering these numbers. That's definitely, as I think, we are in in a good place, to deliver these numbers. And the early signs of the 2 months into the year is that, the balance that grew up meet this expectation. So back to fiscal 2019, almost 1,000,000 net interest proved due to bottoms and fab aircraft, the growth mainly came on AC 30 months. We expanded the franchise. We expanded the the network. I mean, we added 5,000,000 passengers to the franchise. I mean, this is the size of an airline, Central Bigger Airlines is at Midstream. And obviously, it is that we grew the organization as well as our organic growing 4500 people. We had a difficult year with regard to our 2 operational targets, what's the result of the external operating market and some of it was, with regard to external factors, I mean, you all know that, last summer was really, really difficult for industry given the ATC disruptions, airport issues And as a result, the whole industry suffered from a much greater level of cancellations and long delays. And if you are looking at the 1st 2 months, or maybe lost 3 months in the, in the current period, excuse me, in my shape, but we are showing much auction improved performance. It is because we are more or less the business for the services because the extra environment changed the Magic Actually, it has worsened. We are seeing more ATC slots coming in today than what we saw at the same time last year, but we have made changes to the provision and re operating order to make sure that we have more success, we have more ability to go up to recover from operational disruptions to be more at the end of the, as a business model. And as I forget, that last year, we were not affected by some internal matters. We created this LUK, I believe this LUK was an investment at only from a financial standpoint, but also from an operational standpoint, and we had a delivery stream of 17 aircraft 17 rigs, which created 5 pressure on the organization. And as a result, we also have efficient in the Indian break. I don't know. You can see that in utilization, these are not able to utilize the fleet, for example, be useful, but this year, we are going to get back on track with that regard. We continue to build market positions in our markets, 62% of our capacity. We are the leading carrier. We are the number of airlines being many cases, not only the number one SCC, but the number of airlines, I mean, like Hungary, Romania or Macedonia, we are seeing the biggest sale line of the whole industry. And at around a third of our capacity, we're seeing countries where we are number 2 or number 3. Very notably, we are becoming the largest airline at all the Luton, which we think is quite a significant achievement that it's just a homemade, it stops with the last schedule at the end. And with that, as I will turn it over throughout the year, I don't know, as of today's discussion. So first, let's focus on the 12 months due to the 31st March 2019 for the year that's just gone. I think what these numbers showed is that our objective of profitable growth is shining through. With a grew 6 by 15%, we saw strong demand in our lending factors. I think that's a fairly impressive 1.5% to 93% and we said no rating in that as we head into fiscal 20 passenger growth of 17% well ahead of any competition. So even though we had a high load factor, we were able to achieve a higher RASK plus 2,100,000,000, we saw overall revenue up 20%. So it was 1,000,000,000 of revenue, at fiscal year 2019. On the cost side of the equation, I think it's been clear that fuel cash was up 19%. Actually, actual liquid itself was up 22%. So that was a huge headwind And that really set a tale of 2 halves. So the first half would be very aggressively, but obviously that higher fuel cost is really impacted on the second half. That's where you saw us, I would say scaling our growth ambition backed up. So we probably still grew about 5% best than we had anticipated in setting up that actually had a negative impact on our ex fuel caps, simply you're taking, ASK data systems, but we're still able to deliver a minus 1% on the equity oil cap. So, cash up a 5% in an overall basis. So going to the next slide, it sounds like it's already generated and it's always useful to understand what happened last year. So there was no Easter So when you're looking at these, we've always would say we lost about 1.5% each of them last year. So that's around about 20 minutes. In terms of the bank revenues, this is what Joe referred to it, I would say, because of our main goal, we underestimated 2 things from financial impact of changing that policy. Simply put with high load factors on large aircraft, we believe we can't get those bags on the aircraft. So customers coming to the gate, so there are significant implication on the operational forms that really impacted on disruption. We won't have 19. So the financial impact was around about $1995,000,000. However, we worked very hard on the value add. So essentially when you look at the value add that's further in this presentation, we saw over $100,000,000 improvement on the value. So net net was still able to receive a positive performance on our absolutely, obviously it's not as much as we've we've been thoughtful to one that we've put back to the year. On the ticket side, 2.3% is up in RASK. That's just unit around about 50,000,000. So that all in together gives you a RASK improvement of 2.3%. Year on year. A little bit more color on the ancillary side of the equation. It was positive, it was below our plans. Ancillaries still represents 41% of our total revenue. We did have a mixed performance. So on the bank side, what you can see on the chart to the left, we saw a 3, we saw a €3, down on the banks, but also offset that with essentially €3 on the value add, which I think is a very good point think when you push towards the right side of the chart, that gives you some of the impact on considering the impacts. We introduced a new policy from November, so essentially Q3. So that's why you see that washing through effect, and we feel a very strong reaction from that. If you want to think about fiscal 20, how that's going to manifest, we'll have a very strong performance of the anniversary, which is November. November 17th, which is where we introduced the new policy. So I think it's best to say H1, we'll probably be looking around about 15% to 7% increase on and H2, you're probably more around the 5%. So on an average basis, 10% increase on that series, so on 27.6 units per to the improvements. Moving on to Slide 4 on the slide. We are an alternate hospital service room. Take 6 promise. I think it's really, if you look at the table on the right, the fuel cap was up 0.18 U. S. And total cash was up 0.16. So essentially the way we manage our business, the way we manage our costs, essentially it's through capacity. I think it's a very strong performance on pretty much all levels. The one item I would flag is start costs. We don't expect to repeat that going into this year. Essentially, this time last year, we were guiding that grew CASK up around about 10% by 10%, essentially we'd increased the part of salaries on average by around about 16%. So that would give you around about 9 percent. The we actually did over the past 20%, which we're disappointing and I think displayed on to Joe's point, the fact that we took on an awful lot of operational challenges setting up the new airline. And getting those pilots trained up, accordingly under new regulations under the case of DAA. But equally, how we source that aircraft, we closed 4 single aircraft cases. So inefficient basis that we didn't believe were ever going to get up to scale, for the WIS 300, we closed those. So a lot of disruption in the operations and a lot of out of by that coupled with disruptions over the summer period. There was quite a lot of, disruptions, challenges, aircraft on the ground, crude running out of duties on that created an excellent inflation pressure company. The way we look today, I think when you'll see an airline sale, the air loss operators, whether it's a cobalt, small plant energy manager allow. There is, I would say less stress on the I think that's a positive as we go into in fiscal 2020, probably the best it's only seen for many years. So back to maybe the answer repeat, if you model and want to see where we achieve that value. So basically we achieved plus three point one tax on the value add. So I highlighted that we've disappointed on bags that we've deposited on the value add. I would say the three areas, the whiz bundle was probably about the 1st batch the WIS priority products that clearly, passengers want to be able to bring their bags on board. So changing our priority risk priority and check into property boarding. That was probably about 1 third of the employment agreement. And then with that, the allocated season continues, the penetration continues plus we have 30 other revenue streams. So a third of it came from the allocated pieces plus the other the other revenue streams. Looking ahead, we took our first two A321neos in Q4. It's a fantastic aircraft. It's delivering exactly what it should do. We're very, very fine about the aircraft. If you think about 5 pillars of how we're going to drive our costs even lower and widen the gap competitors is there are 5 pillars to that. Number 1, we have a committed order. So essentially, we have a very steady stream of A321A won't be a tough number. These are the most fuel efficient single aircraft, on the planet. If you look at the, in terms of the gauge, the A321neo version may be 20, that's 33% extra C count, that's 59% extra C. So again, structurally you'll see in cost coming to simply because of the math. If you want to look at the next 3 years, that's close to around about 5% unit cost reductions structure is just coming through. Forgetting about fuel efficiency just purely based on seat count. Then you have the engine efficiency. These engines are delivering around our 60 fuel burn. So the engine is, delivering a thickening chest. So we've taken the delivery of the first two aircraft and the delivery exactly what we should do. We're very excited about the 2 of these engines. Then you're going to price. When you put an order that magnitude, you know you're getting a significant price that's going to be restarted to manifest loan costs. And I think the final piece of the 5th piece is our investment grade balance sheet. So one of the, one of the disadvantages we've had certainly on our earlier aircraft is that we've had limited access to capital, we've resulted in the leaseback market and the leverage on getting the best financing has never always been there. Today we have an investment grade credit rating and the pricing we're seeing is absolutely phenomenal. So what's important for us to make sure we maintain that very credit rating, make sure we have reported balance sheet, and that will continue to drive our cost base even lower. So when you look at this aircraft, it is a true game changer. This slide, I think it's also very important to flag, and we can talk about how this is going to manifest all the cost savings at the cost efficiently to get a manifest through the aircraft order. I think what's very important when you look at this is just scale. If you look at the next 3 years, we're taking over the next between now 2022, 'twenty three, we're taking an incremental 70 one aircraft. We're going to be redelivering 'twenty one. So we are uniquely positioned where we are completely replacing our our, our fleet, with brand new, the latest technology, the most fuel efficient technology So this is really going to be driving. And I think what's important is you will, this is where you start to see the step changes on pretty much all cost lines whether it's the fuel and whether it's the ownership and the financing. By the end of this matter, you will have 50% losses on the turns on. So we've noticed on the neo because of the engine efficiency, but let's not pick out the damage. It's a large aircraft, in this industry, the sector. This is a very powerful slide, generating $407,000,000 in cash flow from operations. I think we're finding a very strong business as a cash flow follow 30. So cash on cash on business of $407,000,000. Financing activities were around about $6,000,000, and then investing activities around about 64,000,000. Probably slightly less than what we expect. That's a function of a couple of things. We really adjusted our new order to get more certainty of those aircraft being delivered on time, but that adjusted PDP. So if you look at the cash flow statement, there was no outlook on the police assets that was imposed out there. But I think what's very important, we have a very strong cash generation. And the question will be, what's the next step that is capped? I think today, when you have to finance that magnitude aircraft, what have a corporate balance sheet. Interest rates today are the historical lows. So if we can lock in a lemon year interest rate, at around about 1.5% or even lower, then that is a very, very competitive proposition. That's certainly compared to some of our older aircraft, but the clients are charging more than 6% So again, re fleeting at that pace, we're going to be seeing significant cost savings coming through that. It's important to note, we no longer own ACO assets once possible, we're very keen on video technology, but we don't want to see our assets the quarter and that that comes through some of the numbers. So we don't hold any of the digital value of this one as you receive technology. So, Nick, when we look to the, when we look to the, in terms of cash generation and the leverage, Again, very strong cash generation. We have our investment grade balance sheet. I think where does that want to go, where do we want to go with that? We certainly want to kind of take them all over that led And we want to make sure that we have all access and all routes to any, the most efficient and cheapest possible financing. If I press 15, there'll be a hot topic especially those with their strategies, and I'm sure I'm going to have some conversations later on how this all goes through. One thing I would say when if you're trying to measure us on a leverage basis, the traditional mechanism of offsetting leverage is 7 times your rental costs, but that gets you to $2,300,000,000. And our IFRS 16 was not technical. On a lease by lease, you do a net present value of these cash flows or that lease, and that derived a lease debt of around about 1.8%. So when you look at our of one point four times, 1.4 of EBITDA, net debt to EBITDA, actually under IFRS 16, that's way out of the half. So the leverage under the IFRS think that number is roundabout 2017. So a very strong position from a capital perspective. So we feel good about fiscal 20 I think if you look at the tailwinds that we have on the revenue front, we have a strong recovery on the bank office. So we're seeing a very strong quarter for that. If you want to model it, I would say in the first half, you're seeing around about 15% increase on the answer. We expect the end of the second half more average 10%. So add that to the Easter, that's why we're saying up low single digit on the rest. The revenue environment is looking very strong. What we haven't talked about actually is capacity environment. When we look at the capacity in Century City, I'd say all the capacity growth, The market in some is growing around about 6% in terms of additional 6%. This time last year, it was above 13%. So when the market was growing 3 demand is growing between 6% to 8% and the supply is growing at around about 6%. There is a very constructive token to the revenue environment, but that is a lot So it's going into the summer. Ashley, when you look into the winter, with their representative over quarter So on the cost side of the equation, IFRS 16, I'll have a slide on that later, next slide. While IFRS 16 does, so this guidance is still based on IFRS 16. So these are the numbers that we will be reporting Q1 and beyond. The presentation of biopristicine remains the least cost to disappear. So essentially what happen is you're taking the least cost out of the EBIT and essentially putting some interest dollars below the year. So on a like for like basis, fiscal 'nineteen, we delivered an ex fuel CASM by stripping out that interest is around that 2 19. So one of the things I like about our press, it seems when you compare Rx, you'll have to do any other airline we are below that. So today, we can proudly say on our next year cash basis, we are delivering the lowest cost in the industry. It's a bit artificial by not taking the interest. If you don't take the interest, that gets us to a sensible plan. So, what we're saying today is that on our next fuel cash basis, we're getting a bit of in the 1 to 2%, but that CLA instead of Real Maces, we're going to be doing around about 2%. That's right. I'm really flat on that side. The headwind is fueled. So when you add all those together, essentially that's how we get to, get to these numbers, in the margin form, that delivers a range profit, net profit of around about CHF 3,550,000,000. I have one slide on IFRS 16. Probably spent an hour on this based on some of the conversations. What this slide is designed to do is to help you build your than what we've gathered. So essentially, if you take your fiscal 20 numbers and you do your debt to credit, counter that, that's usually what's worked. Then this will adjust your opening balance sheet and this will adjust your P and L. So that's what this is designed to be designed to give you and this will help you with your long And again, I'll be very happy to have some conversations after this. One of the things I would say when you look on the right spot is to see that impact of fiscal 20 If you add it all together, there's net impact on 14. When you restate fiscal 2019, there's a minus 26 So I think this in page might apply the annual report as a reconciliation of fiscal 'nineteen. So when you look at the year to year movement between fiscal 'nineteen 'twenty and actually, we're seeing the negative impact of IFRS 16 around up to CHF12 1,000,000. So if we look at ex fuel cat conceptually, the A321 should be delivering around about minus 0 point 9 percent lower unit cost. Structured business. We are guiding flattish. Of that, you're seeing depreciation is up around about 3% year on year, and that's driven by the FIFRS, the profile of depreciation. So that's a step coming from there. And the other headwind that we're seeing going into this year, every year, and it's like a story. We have a lot of aircraft going back to their soles. We have a lot of advancements, but one item that stands out. Which probably makes us to be able to hold a unit cost base of around about 10%. All other line items, very much in control, I will be there in very strong performance. In fact, segment to see that number turning negative this year on the back of now. Okay, so thanks to the market. I'm confident in Stephanie suddenly, you know, it's only 16% of the European Administration market. Well, I think it is about 15% in terms of growth potential. And, you know, it prospects going forward. If you look at any kind of estimates for GDP Growth, Century Service Fire ahead of the Brazilian projection, At the matter of fact, volumes reported 'nineteen first quarter, GDP 5.3% Poland, 4.5% But the markets remain very intact and obviously, GDPRs stimulate disposable income. And with that, we are seeing more discretionary spending coming through the coming to the market. And that's clearly a distinctive factor in our favor compared to the rest of industry because we are the leading airline in, in San Francisco, you see that by propensity to our leverage is cashing up, but it's still a long way to go. I mean, when we started in 2004, this number was 0.1. Now it point 5. So we have been increasing propensity fivefold, but it is still just a quarter of the West Ethiopian level. And with that, we're seeing that a lot more important is clearly created by the market itself. And also, with the lowest cost producer in the marketplace, we are in the best strategic position to make sure that we continue to affect people in potential supply. Stimulate the market base. At the same time, I mean, this is almost like on the sidelines, we are seeing the number of airlines failing in the industry, representing some opportunities for this. We have no interest in acquiring the businesses, but we have interest in in a infection market opportunities, should also be created by several airlines. The way we have been growing our network, it's highly consistent with what we have been presenting through you over the years, over the last 3 years, at least that over 80%, 84% of our growth capacity has been placed very safely, either by increasing crypto of existing out or joining existing airport. But at the same time, we finally report to continue to carry the flag up of USCC and we continue to pioneer new markets and new destinations. So it was 16% of our growth capacity into our inter new country new airports, most notably, wholesale was a significant market and the ibuprofen that stipulated. But if you look at the, the footprint of this area in San Francisco and beyond, we believe that we are very well positioned, to continue to own San Francisco for the purposes of the airline business. We have operating bases in 14 countries, 35, 36 operating bases across across our market. And we are very well balanced, very well diversified to make sure that we continue to to strive on market opportunities, but at the same time, we are not putting Boralex in one basket. Let me just make a comment on Austria. I think Austria has been very profitable. Especially to be in the market, for decades, nothing was going on, in that case. And although, Southern Everywhere showed up, you know, IIT, easyJet, whoever. I think the last started settling down. You are seeing airlines, contacting capacity and pulling, back from, from root. We remain very committed. We are the largest producer in Vienna. We have an AT and T1 dominating fleet in Vienna. And, in our first full year operations, we have the run rate deal in terms of financial performance. Now put that in context about the other guys that we quoted. You know, it depends on the quality of my fibrosis era that I think we are, very well placed, and we are making further actions to make sure that we continue to build our business in Vienna. So as far as pizza is concerned, we are very pleased with the development We have deployed RNA backup in Pittsburgh Penny. Still in the UK, basically operation. And it was a bit of that because Paul and Romaine, it was not yet a complete picture. Further act of our own debt to be deployed and fairly shortly will be able to make it further a long time. But I think this picture gives you a view that we continue to develop our market, in a diversified way, in a balanced way to make sure that we don't behind. So talking about the UK, I think the UK has been a real success for this. I mean, that airline has been profitable in Devon. I think it's a very rare space in, in the world. By now, we have built a network of 40 one dose. And, at the moment, the airline operates 9 have done 2 more to come in the coming weeks, and we built a team of 450 employees there. If you look at bizare, since Mexico, we have been growing capacity in the UK by 34%. And we are fairly simple business with regard to capacity management if we are doing better in terms of profitability, if we are adding capacity, if we are doing not so well, we are taking capacity out. So if we are adding capacity as a sign of a market for safety and good market performance. So unlike many of the others, I think we are very happy with the, with EBIT performance. And we remain very upbeat in the UK. And it is because we are also producing the United Kingdom, and this is a commodity business. And we have a fairly balanced customer mix. It's a we are not betting on outbound UK, I think it's the advocate of outbound UK, I think but we have already involved UK as well. And depending on how the phone goes, in terms of cents, you can balance each of the growth. Let me spend a little time on some of the operational challenges and the industrial environment and how we have been reacting to those to those challenges. I mean, certainly last year was, kind of shocking, how much the external operating environment deteriorated and follow the challenge on the industry, on ATC, ground transportation or airports and ground hazard I don't think the, the environment is going to be much better. It could even reverse them last year. And the early signs are not based, as I said, Actually, we are seeing more APC slow delays, in the 1st few months of the, of the final share year. And then same time, Sierra. But I think we have a more resilient operating order to, to address the challenges, commonly We optimized log times, we created, higher breaks in our schedule to make sure that if there are any assumptions, we can issue a recovery from those And the time to do that in a way that we are not losing out of the exercise of the business, but to be more refined with regard to these operational disruptions, for the purposes of battery recovery. Clearly, we are seeing, significant infrastructure for sales. The way we try to lessen those we are very focused on improving boarding times. And the new very solid CGM was commenting on, as subsidiary Bailey. It is not only having as the revenue production, but the cost of improving operations enters it. And then we have this big issue of how supply to the industry. And, you won't know the Boeing issues, but I can tell you that, yes, that's my ability to better, but not much. They have issued a self, and they are unable to deliver aircraft as contracted. So we had to renegotiate the I believe we'll share you about fiscal 2019 and also be looking at fiscal sorry, for fiscal 20 19 and also be looking at the next financial year. So we what we try to do is we try to secure more spend and, and more room to maneuver, capacity in the business and also make sure that we get what is killing the game when it comes to financial benefit sheet detail. Deliver the act of that threefold packet. So I think it will better be difficult, but there are no services around this entire capacity to the industry. So all in all, I think the operating environment remains challenging going into summer, but we are significantly better set of portal challenges, would be more effectively dealing with the positive outlook. If you look at the the business from a commercial standpoint, I think we've been very proud of of claiming that we are a digital era in the world. And indeed, we are, we are within the top 10 airline website in the world. I think we are number 6. At the moment that is quite amazing. I mean, it doesn't reflect on the size of the franchise of this app. But had a best start in 2004 and even the regulatory, digital last year, highlighting the benefits of that, buy now. We have a number of an airline on Facebook in Europe, again, despite the size disadvantage. And you can see that a lot of the, these actions have been converted into air. They are getting 2.2 real views, on the air. For better than ARS 1,600,000,000. So we have high emission life and we continue to, focus on the lies in all interactions with the customers as well as digitalizing the operating model of the airline. A lot has been happening with regard to operational quality and investing in our people. We created age fifty per household. We are a non unionized airline. It's a lot more spending. So I'll put it that way. But we are very keen on, walking the portfolio employees We have invested a lot into our people, and we try to institutionalize that relationships through the, these people call us just to make sure that we can better address some of the, These shoes are recorded is, on a structural basis. We create debit foundation, which is pretty much an emergency bond, so should something tackle throughout long for that family is, they have a financial source to turn to. I think this is just illustrating how much we care about our people. It is on how we internally are recognizing our people, but I think we've got to recognize externally as well. We've got the cease reward for best tech in in San Francisco. And we are very keen on that. It's going to be the hotel airline in San Francisco, we want to make sure that people associated associated with the culture of our company and the best discussion of that is kind of how have improved days when they interact with our customers. We made a major investment in in pilot and heavy boot cleaning, which is total that is 1,000,000 investment in the portal retaining center in Budapest. The state of the art world vaccine in Europe. I don't seem to find any better facilities for the purposes of a fruit raising than what we had in able to best. And for the first time, we got awarded, with the highest set of states that I think by Alan agents that remain silent on the base of, of safety, flight safety and several start, rating is how fast you can go in the very complete, basically being in each of our Locust Iris in Manitoba. We kind of call our way going forward with $300,000,000. I mean, this is, the vision to build a fleet of this at $300,000,000 aircraft. And if you see the accrual we have on hand, that corresponds to me that, these are very strongly. So we're seeing around 2020 6, 2037. This has to be flying a case of 300 aircraft and that time. This should be turning around 400,000,000 passengers. This year, it's going to be selling quarterly, you know, passengers. Obviously, the debt revenues will, grow and employees, the organization that we'll grow too. But this 300 is also important, not only from a, an inspirational perspective, but also from the perspective of decision making internally in the company. So every decision we are making nowadays, be organization, be system, be processes, the measure of the decision against it, basically, how the decision will that decision send should we sell and operate beyond that, operate. And this is kind of our way of making sure that we are investing in the future and we are making the right decisions from the standpoint of that we are making a few years from now. So let me just close it up. I think this for 2019 was a challenging year, but within that context, we believe a good result, we believe it was echo disaster on many of the of the KPIs for operational KPIs or financial KPIs, and probably most importantly, a more important of your perspective, we are very positive with regard to fiscal 'twenty. We think we had a good start into the year Every year, we have a good start to have a good finish. Every year, we have a bad start to have a bad finish, and we have a good start this year. And looking at relievers on hand, and looking at the Ally strategic position, we don't think we have been better positioned strategically, than today, as of the 4th, with cost advantage, what we keep getting, the revenue environment our business is in and A3 playing on order, what we have on hand, has not, live as advantage going forward. Sant360 remains a very intact market. It is the right market for Brazil. It is the best quality market for the prospect of of growth. And we believe that, that basically of your accounting represents significant, for many growth opportunities for reserves. I think AC is very well ordered. It's not an estimated by the market, and I would like to draw your attention to it. I mean, just put that in context. This order was placed as a single largest stack of product in the world. And as such, it gets the very good price, you can imagine agriculture is not fairly simple or even think of the size of the order and pricing, the bigger the order is below the price we have become. So we are benefiting from the pricing of the quarter. Ian was talking about financing of the, of the aircraft. Even over credit spending, we are getting financing which has never been available to us. And we are getting financing globally at 0.5% even below 1%. I mean, that makes a huge difference in terms of creating ownership value and not shareholder value in the end. And we have 253 of the back of our hand going forward. If you go to an OEM today, I decide to order aircraft. You will be told that the 1st backup, we believe it is very, very sweet, very So, simply, you can't order that car today. And we have the best backup, we have the best price, order, and we have a CQS supply chain of capacity going forward. As said, with regard to the operating market, I think it's going to be great, but we think we are much better to be able to post advances today than before. So I'm expecting a significantly better operating performance as well as financial performance in summer 'nineteen compared to last year. And with that, we are very confident in our guidance. I believe we're in that context somewhere between 350,000,000 350,000,000. There is upside to this number, but also the result side simply because we don't have full visibility on the fuel price environment. We don't have to give visibility on the operating environment and we don't yet see capacity capacity going into the second half of the year, of what we have seen today and what we are tracking today and what we have delivered that made the other investments in our ability to deliver this item. So with that, we Thank you. It's Sarah Paul from UBS. This is from IL-three. You said the start of the last call, Is there anything about May June if it's through that bill is what's got underlying pricing is doing? Secondly, It's a good indication of what percent of your summer has been booked already. I think the DD Jet talked about 34 percent of the agency. So much for your stomach's income. And then just one on the financial side, your tax rate guidance is 4% you know, standard relative 8%. So it will take the rate obviously, I don't know what's going on there and how sustainable is that right? Let me replicate the revenue, the revenue question. I think we are much better off driving sales and increasing capital revenue and make up the difference. So relative to the way we think about is that lower fares are there to stimulate the marketplace as higher absolute revenues are there to deliver profitability or deliver up for the So it is actually a favorable trend, but we are seeing at the moment. So we are lowering our price. So we are seeing around 4% fair discussion. At the same time, we are as we have said, we are getting around 10% positive investor revenue reduction. I think this is the right place to be a little more perspective because we are a loyal producer, so we can sustain lower sales in the industry. And we are doing the best with regards to the revenue for term relative to the agreement with. And that's the case that we're going to be. We also see that actually, asset revenue was more resilient to, to market volatility. Payers are much more bubbling, depending on, competitive, and certainly, you know, that the lower the fares are, you know, the better escalate the market. With regards to Hoopad bookings, we have already in, we are around 2% ahead compared to, compared to last year, same time, when it comes to Q2, bookings and, be evoked about that, that will be up around 4% in Q1. We may be on the right if you want to be able to So on the H1, we'll have a strong performance on the M and A. So maybe some rough numbers, and this gets you to see up those single digits. The ancillary are 15% H1, H2, probably more than 5%. So 10% on a full year basis on ancillary. That suggests getting back on the ticket. So you're probably seeing around about 3% to 4% giving back on the ticket in the first half down. So net net, that will give you up 5 ish in the first half flat in the second half. Thank you you on a full year basis, you know, between on a on a net basis. On to tax rate, a couple of moving parts. One is there was a reduction in Swiss income tax that was a benefit for us that also had the impact of reducing a deferred tax liability. So that's why in fiscal 'nineteen, we had a better number, the run rate is around about 4%. What I would say is with which you pay with the UK business and UK will break the tax by that 20%. As our business gets bigger and more profitable, it's still in the early days. There are some weeks that we'll be maturing. I would say given it's around about 10% complete, you can assume 1, 2% increase on the, on the tax rate for this year, there's a bit of an upside on I read a report that's already showed up at Stonewords, a few months ago, on IMF and I'd be interested in your, how are you preparing for impact of IMO? And do you like the sulphide before that disconnect your plans to my all of them equal up 13% as a report I read. I mean, 2 pieces. One you're referring, I should want cracked by the equation. So, we have hedging program that points around about 18 months or that's suggesting to start speaking. We have hedging program. We're constantly looking at that. I mean, the industry is saying that there will be some inflation going through that. I think slightly European Airlines is slightly different because we can hedge jet, so you're capturing that. Other airlines that heads in Brent, they let us start looking at maybe hitting the crack and the tenure of the crack is a lot less liquid. So as long as they are jet products, then we can head 2, 3 years out. So the question then really is the hedging view of the world. Any follow-up today, fuel prices go up, they go down. But when we were giving guidance at the time last year, our check was at 7:30. And is making me uncomfortable today at 6:30. So, you know, the price of fuel will be priced at fuel, but it's something that will take me seriously. A similar comment on carbon. The carbon, when the European ETS team came in 2013, we spent 1,500,000 on carbon. Next year, fiscal 2020 to 2050. So again, having that added to the fuel bill. So I think sort of not sort of distracting, but the A321 Neo, the fuel efficiency that's coming through that aircraft, we have the ability to absorb these inflationary, impacts other airlines don't have that. So I think to tell you the point, the next few years, you'll really see that gap between competitive on the fuel side and on the make sure you're suffering your wife. Maybe just one of our callers, Isabelle, are you okay with high fuel prices? Yeah, I'm not having a obviously who would like to see, being lower, but if it's a higher price, I think we are okay with that, with that group. Because as a matter of fact, we did multiple national owners, and I think that if you course, market consolidation on the one hand. And for certainly, some capacity rationalization of, Havana, and we would certainly benefit from, from there. Yes, this is a commodity and I think in a commodity, the lowest cost per year. And for Sonos, Seattle, producer now, we are in the industry. I mean, no matter what happens, whether this is geopolitics, whether this is a lack of economics or it should be spending that situation much better than I'm going to ask. I mean, it must be much more technical to be on the balance that was So, do the bareboat fuel, fewer cars to operate. Fuel, right, it becomes? Yes, we are not immune. Of course, we are not immune and the discretionary act to, do that. But if you look at the impact of it, increasing fewer cuts, it is much less than us, whereas we are developing a net. So all competitive position is actually improving I'm sorry, just one follow-up if I may, it was disconnected. You gave, the that change in half of the common count of the transition from the EEO, the BRL 321 1,000,000 of plan at minus 10%. Could you, that's the overall path you'll ever think, right? That's my understanding, all in years, all in. So what is it just for the fuel. And then the other, so there's a heat impact and then there's off fuel impact. I'm not sure how it's been out there. So the A320 C. M. An HV-twenty one CA has 230. So you got 50 extra seats. That's generating around about 9.20 improvement on costs at the 9.27 that shall fuel. None of the problem. Then when you take into account the A321neo, 2 effects, panache and mine seats, the next 2%, so that gives you around about 3% and then you've got the fuel, which is 16% fuel tonnes. So I would break it up ten 1037 in some of the regions between the C counties, the Danish. Morning. It's Alex Madison from Investec. And 3 from me, please. Firstly, in your prepared remarks, you mentioned that ancillary was less cyclical or sensitive than fair. So I just wondered if you could say why you call that was, is it that perhaps ancillaries less mature or less visible when something's probably, you know, what is it that they take, or or less sensitive. Secondly, again, you commented about not being used now. Should we I mean, the last airline standing in that respect, should we affirm that that international side before you are immunized that It's really precious to do that, in the near term. And then lastly, one thing, just on the hedging strategy, again, your hedging percentages have increased over time. Would you expect that to continue to indicate as you get financial stronger and your hedging costs are we to match with, come back? Let me start to get through. I mean, I don't have a plan because Could you answer the question today? So this is more than clinical. So it still has a fifty-fifty out and for the revenue production compared fiber option, we have much more sales on asset revenue. I guess it's because asset revenues, reflect on kind of the habitual behaviors of people. So once they are acquired, they are in preferential. They kind of have to stick to their habits. But the filing is a positive game. So they can go many ways. They can go to different talents, different most of the transportation, etcetera. Once they are in, they can't speak to their habits, and they spend, accordingly. I mean, this is totally every time there is a better time that we have to measure. That's what I can give you. But with regard to our engineers, no, we just don't think philosophy building that, utilization is the best way of handling, labor relationships in India. In the company. We had been making extensive efforts, with regard to, you know, management and and stop to be inseparable in terms of the ABC Income, the business and the organization. It has ever been you or me, kind of, because always be as a team, what we can do. And I'm personally spending a lot of time on visiting our bases And we have to recognize the nature of our organization, 88% to 85% of our people never see the office. Never seen in the headquarters. So they are remote compared to where decisions are made. And I think it is very important that management will also go with this people and see the people and given the opportunity to create and the infrastructure and the institution, to speak up and say whatever they say whether that that issues or that is some opportunities for the company. And we have been promoting the behavior forever since they are the very beginning. And I think they are just now layering our institutional element, the people of our store to be more more effective, be, be difficult. So I don't see a pressing need, for the organization. I recognize the context. I recognize how the industry operates. I recognize that they are an outlier in that, but I think we have a different organization about it. And I hope you can speak to it. On the hedging, I mean, we're a very data driven organization. And I think the most important thing about hedging is what's business. There is a natural hedge in the airline business because of capacity. So as your prices rise, you don't see airline sitting at capacity. We're certainly seeing that I'm not, I haven't seen that in terms of interest. So fuel prices rising, the revenue environment will follow. So the commerce hassle, I feel quite the soul. So the last thing you want to be doing is hedging everything and then suddenly the price collapsing because you'll end up going one way. We tend to probably make a little bit more money as the fuel price goes down rather than when the fuel price goes up. If you look across the curve, it's probably breakeven. But I think what's important is that we able to react, and that's why I think we're there is slightly apart from other airlines that we react quickly. So we were adjusting capacity already in Q4. Other airlines are now starting to do that, which is maybe why they're less dead, you know, a bit more bearish on the outlook. It's got nothing to do with flat balance. It's got nothing to do with SGPS. It costs money, but the reality is I think we run Mont Sky simulation was on a regular basis, which is the final contested and potentially it's prudent to be a very fast model. And hi, morning. It's complimentary and I have 3 strategies. I'm just about building the ancillary penetration. I was looking at what down comment on mutual contribution in 20 growth between the bundle and price and so on, but clearly, those have been a nice bump in part due to change the baggage policy. And so thinking about the sustainability that local permits have happened to us beyond, how you're thinking about that, maybe contribution product perhaps that might accelerate that further. And then just one second question, given terms of the impact in Fourth Quarter on the net expenses, and how, you know, we should think about that there by 2021 and, you know, the And then thirdly, just on the airlock deliveries on the renegotiates you FY 2020 FY 2019. I mean, do you anticipate a net impact on the other growth? Should we, how should we think about that? That's why I said you are and what's their HACE bill case scenario now? Thank you. Okay. So maybe starting with idea about them. I think what it does is that it, it makes us think in Africa. So it's also delivering low capacity to the business. You know, we would love to have the new aircraft, we would love to have the new, the new, more efficient capacity because it's a better capacity to lower electric. But at the same time, we have fewer erosion as well. So we can increase utilization on the existing fleet as in that function. And all the option is to extend existing leases, or even if we can go through market early capacity from the otherwise. So we are assessing each of those options in context of the aircraft delivery, rescheduling. I think we are pretty confident that the device is currently EBITDA, we believe around 17% growth. And we're just trying to see how the enthusiasm is evolving over the next period and what issues the deal has to, to be able to join in the future very well. So we don't have a full understanding on that period yet, but we are seeing some further need to, to be contacted and renegotiate, especially Canada credit bank deliveries. But again, given that you have a few other levers on hand, I think you should be in a position to be able to deliver of your growth. I don't think we're going to be able to go totally bullish on this because seem to not go into, for example, the extent or leases or technology or act of less efficiency for a long time. Think they might be better off, you know, dropping some growth opportunities, and you know, pick up the capacity and it will be delayed. It is delayed on delivery. So that's, that's enabled. With regard to our stories, penetration conclusion. I think we used to have either non broken line on asset revenue development and we used to communicate to the market that we can, we can view it as a revenue for passenger, a euro per per year implemented, not necessarily leaving a year ago per year, but certainly it was like half a year. And then we made a statistic from on VEX, and that's effect, though, that's the interim impact. I think the correct in that decision, and I think the way I can see it is that Now we are back on that at the end of the week, but I don't think it is the volatility of absolute revenue production. I think it was cut down to 1 single loan decision, what we made, and we hope to kind of learn from it. So I think going forward, I would still expect answering supplies probably between our field by your capacity trip per year. And that will come on increasing conversations like we've seen. Screens, and also we continue to look at new products to be brought to the market. I personally think that at one point, as the release did become a spin and beard, we go over to over 3% of the revenue production of the, of the other, we are already at 43% and it was a key strategy. So we, as I suggested that the answer, the fact would be up around that time spent, so that suggests around that 3 years. And maybe we can look at it this year as two year old is sort of the baggage recovery and one euro is evaluated. So I think what's important is that we are on track to get that. So certainly as we look into 4th quarter, it's not going into that line, we're going to start seeing the decreased penetration. On phonetic expenses, I think this is, This is a really good example of what Joseph highlights and some value of our NEO contracts. So essentially when we came out in Q3, the smart ones out there said, how are you going to deliver minus 11% ex fuel cash in the 4th quarter? It's a function of a number of things. Number 1 is the start of this year, which we've been waiting for in 2015 since we've got the first order. The value embedded within this contract will be repairing over the next 10 to 8 years. The question is, will that number be booked, whether it's the lower depreciation because you're buying that car? The relatively low price, whether it's in the interest, we can buy it at a cheaper price, or whether there'll be one off gains or sell leasebacks. So in we took 2 aircraft in the 4th quarter, and we also, kick off some COs off our books. But essentially it's coming through that aircraft order. If you look at our cash flow statements, you can see gain on assets 26,000,000,000. So that's easily the flavor of what happened there. And so I think the question, is that going to be recurring? The answer is yes, it is going to be recurring. The magnitude in fiscal 2020 less so. I would say probably around about a quarter, you'll be seeing that going through into fiscal 2020. Reason being is the majority of our aircraft are being financed with structures like gelcos as opposed to sound leasebacks. And when you do gelcoat, the the accounting treatment is slightly different to recognize it through loan depreciation. So yes, the gains are there, but they're coming through loan depreciation and losses that they cover. And there's a couple of offsetting lease flights. So majority of our aircraft in fiscal 'twenty are through essentially owned aircraft. So when we look at that number, is it going to be coming through? Absolutely. And I think that's what we're very excited about going forward. I'm just, I'm just, like, one follow-up on it. You know, we can discuss the focus focused around the accounting and probably a one off versus structured and if that's expensive, but basically that really the meaning of the business, I think cash, must be the real indication of the same sort of business. This produced over 1,000,000,000 of cash flow compression. I mean, this is the underlying same sort of business. I mean, you can debate how you account for that, etcetera, but it reduced over $400,000,000 of cash. Good morning, Jamie Robopin from Deutsche Bank. Just one from me. Can you talk a bit about the opportunity in the Ukraine. Your press release reminds us that whilst you're now 43% at low cost, that actually only gives you 7% of the market at 7 or 8%. How quickly can you capitalize on the opportunity in Ukraine? Very good question. The kind of positive end question internally. And, you know, we, we used to be very upbeat and you've been to an extent that we gave an airline, you said, in pain, and for years, and years, we were the only game in town, in pain, and we were rebuilding the whole Locust approach in the Ukrainian airline market. Then the market became a significant effect to geographies and we felt that the too high to our sustained administration. If you do from that, we never caught tight for this. So we maintain presence in Ukraine but the 37 operation of a small lithium hungry base in India. Over the last year or 2, I think we have regained some sense and, we kind of, reconfirm DuPage internally. I mean, clearly pain has become a major source of labor to, do you know, especially to some extent this here again? Because I mean, we're not going to be in the 16th. What we are seeing is that You see a lot of Sanjay L'O guests coming to Western L'O, and you are seeing a lot of prepayments coming to San Luis, but we've managed that. That we reported. And also as you came and we complete, hope that we became a much more open market than before, we are looking at ways of increasing capacity and reporting to grow events, to be totally honest, I think given the cost range of supply of aircraft to this. We have to be much more selective and much more fitted where we are deploying, where we are deploying the best So with that regard, I think we will remain a little constrained on growth in Ukraine in the coming year to be a growth, but maybe we could do more than what we actually we will deliver. But once that capacity post payment is lifted on the industry, I think we, if you're going to see us growing much more, you can, we are very obvious. I mean, the market performs well. I think it is a more stable share for this green environment today and certainly given all those descriptions disappearing between the even and you can, we think it is a good source of loss going forward. Sorry, it's a bit of a boring question, but if you could snap that on the whole Brexit situation as it impacts your EEA requirement on shareholding as it any negotiations that have the proposals on free, and so on. I haven't read much about the recent Maybe I'll give you an update on the presentation. So, I mean, God knows what's going to happen. So, I mean, God knows what's going to happen. So, is going to happen. But I think what you, as an airline, can do, given that you are shooting the gold deal that, you know, you play contingencies on the key matters that would affect your business. I think 2 key matters that would sector business are on the one hand to access the market and the other hand, ownership and control being a European airline. With regard to access to market, I think we played contingencies, finally enough in the creation of this LUK. Now we have this hungry deal in Ireland and its LUK airline. So we are at both sides of their patient to make sure that we are in a position for these, by the pressing patterns in whatever way it happens. And also, we received, full approvals from the business government to be able to supply between certain countries and the UK, for those Brexit, it depends. So I think we are really good to go with that regard. I'm not seeing any risk that Then you have ownership and control, and as you know, European ownership and bonus is counted with the UK team, and post Brexit in the UK would be called it out. At that point, they would not be meeting ownership and corporate standards based on our current shareholder structure. So we play the contingency of this infrastructure, and we tested that contingency with the log and collision. And European Commission 302 that contingency plan. So I think they're also good to go with that regard. And it seems to me that it this internship, like this internship, approach is a standard European standard because it's a cyclical ballet would, synchronous and favored I think the way it would happen is that this franchise has to be VFA, at a short, medium term and would allow you to, to address your structure, over time, over probably a couple of a couple of years. That's the feedback we received from the European Commission. But we also expect that investors disruptive. Maybe what we are seeing today would not exactly be the same for exactly because you know something that you don't get put on sort of because you don't get at that point. And again, we seem to don't know what Brexit really is, I mean, there are also scenario, but we try to make sure that we plan for the worst case scenario. And I think for the time being, this is all approved by development authorities we are good to go on any cost. So I don't think Brexit poses any of this So is there any questions Thank you. Our first question comes from the line of Mark Simpson from Holly. Please go ahead. Your line is open. Couple of questions. First off, just a question really on the quality of earnings being guided for this year. On a reported base, rather than restating FY 2019, IFRS 16 is given as a positive CHF 14,000,000. Your shift of treasury to a U. S. Dollar deposit base is going to add about 1,000,000. So you've got a 1,000,000 kind of like for like benefit. Then you've got the change in the non repeats of the other operating expenses in terms of maybe 1,000,000 shift negative. So million of your guidance looks to be coming from non operating I suppose the question is, do you make decisions around, say, pricing knowing that you're getting these tailwinds derived from non operating items. That's question 1. Question 2 is in terms of the fact that you'll get a, let's say, missed million of, benefits, which you've taken through the other expense line, but you're guiding broadly flat CASK ex fuel. I'm just wondering if you can tell us where you're seeing the sense the offset to recoup on that of that flat guidance? Is it coming through such items as labor? Should we be sort of expecting unit cost reductions in those lines. So I'm just trying to square the various sort of guidance you've given to some of those individual items. Sure. Thanks. Good morning, Mark. I'm trying to get my head around what first question was, but your maths was right. I'll ask you a question about whether we are making additional product based on the tailwind that we are improving from the of the accounting changes. I would say yes or no. I think we are keen on delivering the financial we've always, send that, the RDF for, hopefully, and the RDF for creating shareholder value. But at the same time, I think, no, no, for the share long haul term share or the value is also derived from the growth pattern of the business. And we are also keen to continue to grow this business. Mean, we are planning on 17% growth. And again, looking at it into perspective of the industry, I mean, industry is much, is much more down than that. So we would be premium with regard to our ability to grow the business, but we also want to make sure that we are premium in terms of the margin performance and the profitability. So this is something you try to strike a balance on. So yes, I think we want to take advantage of the million a tailwind, but at the same time, we don't want to go chase it and forget about, profitability and financial performance. Yes, maybe also taking a step back in the way we manage the business. I mean, IFRS 16, we had the benefit of couple of years of understanding what this does to the business, what financial impact is going to be the business and adjusting and making certain decisions over that flow through because we want to deliver possible, sustainable, sustainable growth. So when you are fundamentally changing your risk management structure or fundamental changes, bringing on one way 1,000,000,000 worth of liability. That requires a lot of planning. And so a lot of the decisions that we've been making that were manifesting up until the end of the financial year in the first quarter If you take a step back, I mean, there's almost an elegant step from fiscal 'nineteen to fiscal 'twenty so up, having these all the flat cats when you're fundamentally changing the way you're the numbers essentially with the target. So, it's not that we, you know, we just let things run and made the adjustments. So we made a number of decisions including the risk management policy, which you've highlighted. So with IFRS 16, we're going to be facing 1,000,000,000 of lease liability on balance sheet. The monetary asset, whereas the asset that you're bringing on balance sheet is not a monetary asset, so you introduce a lot of FX translation risk. So for the first time, we also actually capitalized on our cash. So it's been very painful to sit on 1,000,000,000,000 of cash. Earning negative interest rates. So like other airlines now, we can actually earn dollar interest income on that. So the reality is that we have some of the early January risk management policy and that will be, a pickup. So the timing of that event also works very well with the one offs in Q4. So again, I think the way we manage the business is profitable so that we make but that sort of net $20,000,000 win kind of half of your implied PAT growth this year potentially that allows you to maybe be more aggressive on pricing just to drive that growth at a time when other people are actually having a tough time of it. Yes, absolutely. I think one of the key questions really in the second half, Greg, I think very well set for the first half. And again, today, we feel positive availability to become a 30. So that suggests it's still hard to stay where they are today. That suggests there's maybe a little bit of gum powder to a little bit faster. But let's see where we are. It's still very early. And then just as a sort of the derivation of that with the view that you do have that change in the cost base because you're not getting the net other expenses being sort of reduced by those certainly spec transactions, where are you delivering the big unit cost wins to, to then deliver that broadly fact guidance? I think as I indicated that you are seeing the value coming through the aircraft because you're seeing lower depreciation of the cost, you know, the value is coming through lower depreciation on the lower interest expense side. So in terms of the ownership cost, that's where the value manifests the timing of that or the bumps, so to speak, depends on the type of plan, as I indicated, we'll give them a majority of their computation. That you own that market or that's how you should go. I mean, basically, you are seeing the benefits of the of the occasional act of flowing through so we continue to orchestrate different ways depending on what, and we will have no new flying obviously. And as we have indicated before, I think the liquidity is prudent on, on, labor expenses not here because of the complexities we had to manage. And we have much more data on those on that plan and you will see a follow-up of label. Okay. Great. And if I could, as I'm online, just one last question, how do you read Rana's exploration of the buzz fleet? Is it substituting Ron Air for Buzz or is it actually, sort of suggesting growth competition? Luis, good luck with INA. I mean, equity on an over producer that INA had and the other high blessing business that INA that you want to go over there, Arun, but I think they are driving that business into more contact with it and structure costly going forward. Hey, good morning guys, Adrian Gassham from Barreford. How about for this morning? One big thing to see your flattish units talk guidance. Is there any uptick in utilization in the beta path for free on the cyclone to carry rigor REIT 1 on carbon cost 1,000,000 run rate in fiscal 'twenty, do you have any price risk or have you guys come out? Yes, So in terms of utilization, again, we managed capacity last year when we dropped down to ramp up well, lockdowns today. That's not the level we want to be at, and that's not where we want to get back, Deborah again. So yes, she will start with the utilization rising again. And in terms of carbon price, there are hedge capabilities that we have had a little bit of that. I think in terms of your numbers, obviously, it sounds quite much. Okay. With that, I think is it time to wrap up? Great. All right. Well, many thanks again for joining us. Our story first for last year and the guidance