Strong growth in operating profit in 2023 underpinned by robust and sustainable demand for travel, alongside continued investment in our transformation to drive long-term earnings growth.
Summary
• Strong and sustained demand for travel, in particular in leisure
• Full year 2023 operating profit before exceptional items of €3,507 million significantly higher than last year and ahead of 2019
(2022: €1,247 million; 2019*: €3,253 million)
• Operating margin of 11.9% (2022: 5.4%) delivered by our transformation programme
• Strong free cash flow generation of €1.3 billion has delivered a strong balance sheet, with net debt to EBITDA before exceptional
items of 1.7 times (2022: 3.1 times), below our target of 1.8 times over the cycle
• Positive outlook for 2024: confidence in significant free cash flow generation; disciplined capital allocation will maintain our strong
balance sheet; committed to sustainable shareholder value creation and cash returns
Strategic highlights
• Capacity growth in 2023 of 22.6% vs 2022, focused on our core North Atlantic and South Atlantic markets
• Revenue and cost transformation initiatives driving improvements to our customer proposition
• Our Spanish businesses delivered €1.4 billion of operating profit (2022: €0.6 billion), highlighting the greater balance in our
portfolio
• Our highly cash-generative, high-margin IAG Loyalty business grew profits by 17% to £280 million, adding 4.9 million new
members (17% increase in new members) during the year
• Quarter 4 2023 operating profit before exceptional items of €502 million (quarter 4 2022: €477 million)
• Continued investment in our people, with 13,000 new colleagues hired in 2023
• One third of our sustainable aviation fuel target for 2030 is now committed
Luis Gallego, IAG Chief Executive Officer, said:
“In 2023, IAG more than doubled its operating margin and profits compared to 2022, generated excellent free cash flow and strengthened its balance sheet position, recovering capacity to close to pre-COVID-19 levels in most of its core markets.
“In 2024, we will execute on our strategy, building long-term value into the business. We will focus on strengthening our core airline businesses and on developing IAG Loyalty and our other asset-light growth opportunities, and we will do this while operating under a strong financial and sustainability framework. Our airlines operate in the largest and most attractive markets globally and we will
continue to invest in our brands to transform the business, improve the customer experience and support the delivery of sustainable growth and world-class margins.
“I would like to thank all of the teams across the Group for their continued hard work and dedication to delivering our transformation plan.”
