Aena Sme S.A Unsp/Adr

Good afternoon, this is the conference operator. Welcome and thank you for joining the IANA full year 2022 results presentation. As a reminder, all participants are on listening mode. After the presentation will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Ignacio Cacijon, Finance Director. Please go ahead, sir.

Thank you very much. Good afternoon, everyone, and welcome to the AINA 2022 results presentation. This is Ignacio Castejón, speaking finance director at AINA. I'm here today with Mauricio Lucena, chairman and CEO, and Jose Leo, CFO. Mauricio will go through the key highlights of 2022, and Jose will cover the business and financial performance of this year. We will end up with a Q&A session, as previously mentioned. Thank you very much for joining our call today. Mauricio, the floor is yours.

Thank you, Ignacio. Good afternoon, everybody. And again, welcome to our 2021 results presentation. I will host, as Ignacio mentioned, the call along with José Leo and Ignacio Castejón. And at the end, we will be very pleased to answer questions all the questions you may have. I will start with traffic. We are really seeing solid figures in the initial weeks of 2023. And what is more important, the capacity that airlines are scheduling for the summer season has made us to review upwards our 2023 traffic guidance for the Spanish network. I would like to remind you that our previous guidance was 87%, 97%. And we have revised upwards this guidance to 94%. So this is obviously good news and I think that this demonstrates the solid trends that our industry is experiencing so far. Concerning 2022, Aena Group increased its profit, its EBITDA. And the main reason was that we experienced a very, very strong recovery of 80, 81% of the traffic. compared to 2019. Again, I'm referring to AENA as a group, the global group. In particular, the Spanish network experienced a recovery of the traffic compared to 2019 of 88.5%. I would like to underline once more that this recovery was completely impossible to foresee at the beginning of 2022. Let's again remind that at that moment we were going through the omicron wave so the the the comeback of the traffic has been completely unforeseen very strong and we are very happy and proud that aina could manage, could accommodate this very strong comeback of the traffic with, I would say, no operational problem. So, it's good news in absolute terms, but I want also to remind you that we were probably the sole exception in Europe in the sense that The Spanish airports were the only ones that did not have operational problems in the very challenging summer of 2022. Of course, this was not only because of the, let's say, high quality management of AENA. I'm referring to the managing of the traffic. It was also due to very specific Spanish laws in the labor market. But all in all, we are happy that we could manage this very strong comeback of the traffic because in the end, it was even stronger, the recovery, than in the rest of Europe. And in particular, leaving aside Spain, in Luton, the recovery was 73% of the traffic of 2019. And in Brazil, the recovery was even better, 100.1% of the traffic in 2019. An important matter of this presentation is the following one, INA has changed the accounting policy applied to max reductions in the annual accounts. Consequently, rent reductions are registered in full at the time they occurred rather than deferring them, the impact of these max reductions over the remaining life of the lease agreements. Therefore, AENA has restated the 2021 annual accounts and also 2022 figures. Jose Leo will comment later on the accounting change and its impact on revenues, EBITDA and net profit. But leaving aside the figures, I would like to underline that at least it seems to me that this is good news because, in my opinion, it makes our communication more of the financial results to the market, let's say cleaner. And probably we have finally left aside the confusion that arise from the difference of the evolution of our actual revenues and the accountability, or the, excuse me, the accounts and the 2021 and 22 figures. So I hope that this makes your life easier because with this accounting change, I think that... The interpretation of our figures and the evolution of our activity is, as I said, cleaner than in the past. Our total consolidated revenues amounted in 2022 to 4. billion euros. This, I would say, taking into account our starting point in 2022, I would say that this total consolidated revenue is dazzling. And it's explained by the traffic growth and the outstanding performance of the commercial activity. For instance, 2022 commercial sales have exceeded 2019's by 1%. So, this means that we have experienced a very, very strong increase in spending per passenger. This, along with the recovery of the traffic, have boosted the commercial activity in 2022 to pre-pandemic levels, let's say, before than we have expected. But again, we are very happy with this novelty, of course. On the other hand, and in the same line, specialty shops and food and beverage since November 2021, we have awarded more than... 240 tenders and the marks have been really, really good. For example, marks in the main 240 tenders are higher on average than in 2019, 22% in 2024 and 46% in 2025. Yesterday, the board of directors awarded the food and beverage activity at the Madrid Barajas Airport, and we are deeply satisfied. We have not also diversified the kind of restaurants and also the companies that are responsible for these restaurants. but also the financial results of these contracts have been very, very good. For example, 2023 MAX in Madrid Barajas Airport, again, I'm referring to the food and beverage activity, are on average 32% higher than in 2019. We are also very excited with the duty-free tender. You know that this tender is the world's largest duty-free tender with more than 20,000 square meters. And we expect that this activity that will take place in this 60,000 square meters will generate sales of more than 18 billion euros during the 20 years length of the contracts. We have so far succeeded attracting the best and the good of the industry, so we expect competition will be very fierce and this will translate into we expect very good financial results when the tender is resolved. Concerning the OPEX, the operating expenses in 2022 amounted to 1.14 billion euros. This means 19.7% higher in comparison to 2019. But, and this is very important, if we for a moment exclude OPEX the impact of the electricity, the increase would have been of 0.6%, which means 5.5 million euros, which I would say it's not bad at all, taking into account the inflation pressures that have presided the economic activity at least since the end of 2021. In the mid-term, you know that AENA is strongly committed on developing renewable energy sources and we expect to soon, we can become self-sufficient in this area. If I now leap to EBITDA, Our EBITDA for the period stood at 2.1 billion euros. I'm again referring to 2022. This EBITDA includes 91.3 million pounds from Luton and 366.5 million Brazilian reales. And all in all, this is translated in a consolidated EBITDA margin that closed 2022 at 49.1%. We are still a little bit far from where we want to be again in EBITDA margins around 55% but we will reach again that percentage of EBITDA margin and In any case, it is clear that with the EBITDA margin of 2022, AENA clearly remains among the highest in the airport industry, which again, I think that clearly demonstrates the solid figures and profitability of the company. On the other hand, consolidated net profit, as you know, returned, and this was good news again, to the positive territory, and it stood at €901.5 million. Hence, we were very happy yesterday at the Board of Directors to propose to the annual... shareholders meeting that will take place next April to distribute a gross dividend of 4.75 euros per share. This is the first time since the coronavirus showed up that the company is We remunerate its shareholders, which you know is our traditional and very important policy since I now went public. And I will now start. the final part of my presentation. Concerning Brazil, I have not very relevant news. You know that in Brazil, we want the concession to run 11 additional airports in Brazil. This is very good news again. We will manage at the end of 2023 around 20% of air traffic in Brazil and the execution of the concession contract is expected to take place in the spring. And finally, concerning ESG. ESG, as you know, is one of our top priorities, and I want to highlight three milestones. First, AENA joined the Toulouse Declaration, which makes clear our commitment to achieve zero emissions by 2050. In the case of AENA, I can assure you that it will be... before 2050 and probably before 2040, which is our formal commitment. Second, AENA has achieved the highest rating awarded by the Carbon Disclosure Project and Sustain Analytics has recognized our company as the best company in the IBEX 35 for its environmental, social and governance performance. And third, and finally, Skytrax has distinguished AENA as the best airport group in the world for its excellence managing the pandemic. This is all from my side so far. Thank you very much. I now will give the floor to our CFO, to José Leo, and I will come back at the Q&A session. Thank you. José, the floor is yours. Thank you, Mauricio.