Banc Sabadell | IAG’s Capital Markets Day focused on cash generation. The reduction of some operational objectives (AKO’s 2020/23 growth from + 6% to + 3.4% per year; annual BPA growth from + 12% to + 10%), is in line with market forecasts and BS (e) .
The Anglo-Spanish multinational airline holding company maintains a discourse that we see successful and focused on cash generation. Specifically, the cash outflows planned in 2020/23 are now lower (-500 M capex / year due to lower capacity) and below those estimated in pension contributions (~ 500 M euros / year vs 600 M BS ( e)) what underpins cash generation (the average target LFCF in 2020/22 is 2,100 M euros; yield ~ 11%) and our valuation. It will also allow IAG to participate in the sector consolidation and maintain an attractive shareholder remuneration (average dividend yield for the period> 6%).