Aena Sme S.A Unsp/Adr

Good afternoon, everyone, and welcome to our 2024 results presentation. This is Carlos Gallego speaking, head of IR. It's a real pleasure being with all of you today. Our chairman and chief executive officer, Mauricio Lucena, will host the call together with Ignacio Castejón, CFO, and myself. We are going to cover some of the main topics explained in the results presentation that is already available on the CNV website, and we'll finish with a Q&A session. Without further ado, I give the floor to Mauricio Lucena. Thank you.

Thank you very much, Carlos. Good afternoon, everybody.

And thank you all for joining us to go through our 2024 results presentation. As Carlos said, I will start commenting the key highlights and then I will give the floor to our CFO, Ignacio Castejón, Nacho Castejón. So I will start with traffic. First, you know that 2024 was the second year in a row with the highest traffic ever at the Spanish airports. We are very proud of this achievement and we are glad to have been able to make it compatible with a high quality of our airport services. You know that in total, AENA group traffic increased year on year by 8.5%, up to almost 370 million passengers. And this means that we handled more than 1 million passengers per day on average. This is another milestone we are very proud of because we thought that this 1 million passengers per day on average would be achieved successfully. maybe in 2027, so we are very, very happy to have been able to achieve it in 2024. In the Spanish network, the annual increase was 9.2%, and we reached almost 310 million passengers. And you know that today, at the beginning of the day, we announced that our traffic estimate for 2025 at the Spanish airports is an increase of 3.4%, which means that if we accomplish this estimate, This will mean that approximately 320 million passengers will go through our infrastructure facilities. Regarding our fully consolidated international assets, the traffic growth expected in the current year, in 2025, may be higher than the mentioned 3.4%. Okay, now I will move to the financial performance. With respect to the 2024 financial performance, total revenue grew by 13.3%, up to 5.8 billion euros. On the cost side, the total operating expenses grew by 7.6%, up to 3.2 billion euros, so this means that in total the EBITDA came at 3.5 billion euros, and this again means that the EBITDA margin stood at 60.2%, which compares happily with the 58.8% of 2023. Again, this is the margin we expected in the context of our initial strategic plan to be reached in the future, so we are very happy to have been able to achieve it before the schedule. All in all, the net profit reached a little bit more of 1.9 billion euros. On the commercial side, I would like to mention that the commercial activity experienced a robust growth trend. You know that this robust growth started back in 2022, but the good news is that it continued into 2024 and taking into account our 2025 forecast, It will continue. This is our forecast. And in 2024, total sales grew by... 11.4% year on year thanks to on the one hand the traffic strength and on the other hand I would also highlight the increased spending per passenger and the constant introduction of new brands. If specifically I I concentrate now on the new contracts in specialty shops and food and beverage. The contracts awarded in 2024 represent, I would say, a very strong minimum annual guaranteed rent increase for 2025 of $1,000. 45% and 50% respectively compared to those of 2024. I repeat it. If I now concentrate on specialty shops and food and beverage, the new contracts that we awarded last year in terms of March, the increase was respectively 45% and 55% when we compared 2025 to 2024. On the real estate side, Real estate revenue increased last year by 11%, pushed, I would say, principally by the air cargo activity. The air cargo activity has been performing very, very well. And currently, the cargo business represents 46% of the real estate revenue, which is a higher percentage than we expected a few years ago. This is, on the other side, natural because the business areas in the airport activity evolve dynamically. sometimes a little bit difficult to foresee what precisely will be the share of each of the business lines. But we are, in other words, very happy with the evolution of the cargo business. I now move to the international area. 2024 was the first full year that we managed the Congonhas concession the 11 airports that go well the 10 that go along with Congonhas and I'm happy because I can say that very significant progress has been made since the beginning of the year within this concession. We have awarded, for example, the mandatory CAPEX to be executed in Congonia's before 2028, and some initial initiatives aiming at improving the operational activity and the passenger experience have been implemented, and I would add have been implemented successfully. On the CAPEX side, 2024 was a year, let's say, of light CAPEX in historical terms and also in future terms, including the international activity, and you know that now our Aim is to prepare the company for a new CAPEX cycle, a very strong CAPEX cycle that will start with the third DORA in 2027. But the company needs internally to prepare before the start of this new CAPEX cycle. And I'm, let's say, tranquil in the sense that I can witness how the teams are adequately preparing for this new CAPEX cycle, which will be challenging because you know that the volume of CAPEX that will start with the first year of Dora 3, 2027, will be a very high volume of CAPEX. Okay, in terms of dividends, you know that the Board of Directors has proposed, and we have disclosed this morning, has proposed for approval at the annual general meeting the payment of a gross dividend of 9.76 euros per share. It means an increase of... 27.4%, if we compare this future dividend with the one that we distributed in 2024, corresponding to 2023. And finally, let me please... highlight the fact that we celebrated in February the first 10 years as a listed company. You know that for AENA this was a very important milestone. the IPO that we launched in 2015 and we are also very happy with the evolution of the share, the financial results, I think that the reputation that the company I would say has gained for the last 10 years. In terms of the share evolution, the revaluation is above 260%. And here I'm not including the dividends paid. And you know that we have become, and this is also a milestone, the sixth... Spanish company of the IBEX 35 by market capitalization. And in this context, I think that it's very natural to understand why we will propose in the next annual general meeting to split the number of shares in the proportion of 10 new shares for each old share by reducing the nominal value of each share from 10 euros to 1 euro. Aena's share price is currently the highest in the IBEX 35, so our objective is simply to, if possible, gain some further liquidity. We are happy with the evolution, but in other words, we will make it more comfortable, easier for the investors interested in AENA to invest in our company. And in terms of ESG, I would like simply to recall that AENA is strongly committed on reducing carbon emissions, and the proof is that last year, in 2024, we brought forward the target of achieving zero emissions from 2040 to 2030. So this is the end of my brief presentation. I will join you back, of course, in the Q&A space, in the Q&A session. And now I will give the floor to our CFO, to Nacho Castejón. Thank you very much. Thank you very much, Mauricio. Hi, everyone. This is Nacho speaking. Let me go through some details with respect to traffic. and financial performance on the company. And we will try to have some time at the end for Q&A, as our chairman was referring. On traffic, our chairman and CEO already covered the traffic performance in Spain and also across the group. So let's see what has happened at Luton Airport that managed to handle 16.7 million packs. There's an increase of about 3.3% versus the previous years. And in our Brazilian assets, A and B, managed almost 16 million passengers. That's basically an increase of 8.3%. BOAB, our latest concession awarded in Brazil, managed to deliver an increase of 4.1% compared to 2023. So that's 27.4 million passengers. If we look deeper at the traffic performance in Spain, I'm referring to slide 11 and 12, the international traffic growth at 11.2%, more than double the domestic, that is stood at 5.4%. Therefore, the market share of international traffic increased from 67.2% to 68.3%. European traffic represents 86.2% of our international traffic, slightly lower than in 2023, because some long-haul destinations in Latin, North America, and Africa grew above 14%. I would highlight the case of Asia, in which even starting from a very low base, we have managed to double the traffic in 2024, reaching 1.3 million passengers. I would like to share some further information with respect to our main markets. Growth in the UK has been, growth, sorry, from the British market has been 7.6%. German market grew at 9.9%, and Italy, circa 15%, 14.8%, a very material growth coming from that country. And from France, we managed to have a 7.2% growth. Our two main largest markets, the UK and Germany, are already well above the 2019 traffic levels. In terms of performance of our airports, of our assets in Spain, in terms of our passenger volume, Madrid Barajas had an increase of 9.9%, Barcelona Prat 10.3%, Palma 7%, and the Canary Islands slightly above 9%. So remarkable traffic growth coming from our main assets in the Spanish network. With respect to our airlines... Our top 10 airlines carry 223.7 million passengers. That's an increase of about 7.9%. Operators such as Ryanair, Vueling, and Iberia managed to concentrate 72% of the whole traffic. I would like to highlight that low-cost traffic grew by 9.6% year-on-year, and then 61.6% of the total traffic in our Spanish assets. I'll go now to slide 13, and I'll start with our activity. Ordinary revenue grew 13.7% year-on-year, mainly due to traffic performance, but also to a traffic increase that was applicable in 2024, starting in March the 1st, 2024, with an increase of slightly above 4%. With respect to dilution, the company had a dilution in 2024 amounting to 129.4 million euros. Moving on to the commercial business, total sales of our tenants at the airports increased by 11%, that's a number well above traffic growth, and on upper tax basis, the growth was circa 2%. Total commercial and real estate ordinary revenue, well above by 14.3% year-on-year, so reaching a figure close to 1.9 billion euros, and again, above traffic performance. This performance is mainly driven by higher traffic, higher total revenue per passenger, growing by 4.6%, reaching 6.1 euros, as you can see in the slide. As you can see, there has been a significant growth coming from minimal unguaranteed rents, as explained by our chairman, and also the state line adjustments resulting from the new contract that we signed in this year and in the previous one. In the slide 15, we saw the commercial revenue amounting to more than 1.7 billion euros resulting in an increase compared to 2023 of 14.7%. Real estate revenue increased by 8.4% to 114 million euros. Excluding the multi-year adjustment the multi-year straight line and other adjustments, as you can see in the previous slide. Sorry about that. In slide 14, I think it's... Yes. The real estate revenue, the commercial and real estate revenue, grew by 11.7%, and the revenue per pass, on a per-pass basis, grew above the target inflation rate of 2%, reaching a 2.2% growth rate and reaching 5.72 euros per passenger. Let me share some specific details on our main commercial business lines. I would like to start stating that the sales of our tenants in our co-retail activities, duty-free, specialty shops, and food and beverage, grow well above traffic. In the case of duty-free, growth was 15.2%. In the case of specialty shops, 11.9%. In the case of F&B, 11%. Total revenue in duty-free grew by 28.2% compared to 2023, reaching 527 million euros. All the contracts ended in 2024, this year, below the minimum annual guarantee rents. I would like to add that in the Canary Islands case, in the Canary Islands contract, we were very close to exceeding the minimum annual guarantee rent, but the performance was affected because of the refurbished works inside of our airports, for example, in Gran Canaria. We are happy, especially happy with the growth rate that we have seen in the month of December on an isolated basis. That's a very important month because it is a month in which we have managed to finish some of the construction activities related to the business line. And the sales that we have seen this month has been outstanding. With respect to F&B, revenue has increased by 7%. mainly pushed by the 29 premises that entered operation through 2024 in Madrid, and also because of some increases in the surface allocated to these business lines. On the negative side, I would like to highlight that in the last quarter, our commercial activities in the airport of Palma de Mallorca have been affected because of all the remodeling works that we are accomplishing in that airport. Hopefully, through the next year, we'll be able to have all the businesses F&B specialty shops and duty-free amenities already in place to serve our beloved customers. VIP service. VIP service revenues keeps growing at a very healthy rate, as you have seen through the year, about 30%, reaching 155 million euros. Within this business line, VIP lounges, that accounts for 82% of the revenue, keeps growing at 28%. What are the reasons behind this growth? More customers, customer volumes are increasing, around 26%, higher prices, an average price increase of around 5%, and the new facilities that the company is adding inside of our airports. For example, Mallorca, Ibiza, Tenerife South, and Sevilla. As a result of all these improvements, we are seeing penetration rates still at 1.9%, and hopefully going north with all these improvements. Rental car sales grow by 11%, also about traffic. Total revenue grow by 12.5% to 207 million euros. The reasons behind this increase are higher prices and increasing the number of contracts. The number of contracts had a growth very similar to traffic, and prices were slightly higher with respect to the average transaction value of the contracts signed by the users of this business line. As you know, the new contract that we awarded in April came into force on November 1st, and we'll see the full impact next year. Car park revenue grew above traffic too, plus 13.3%. That's 204 million euros this year. And the main drivers of this business line, or the main drivers behind the growth of this business line, are the pricing policy, higher volumes, and also the optimization of the available parking spaces that we are accomplishing at AENA. As you know, we are constantly renewing our commercial offer. We have published 71 tenders in specialty shops and 37 tenders in F&B in 2024. As you can see from slide number 18, we have secured more than 1.2 billion euros of fixed and minimum under-guaranteed rents in 2025. We will have to update these numbers once we add the new minimum under-guaranteed rents of the contract that we will tender throughout 2025. Our goal is tendering out 20% of the total premises in F&B, 6% in specialty shops, and 43% in financial services. Let's move to slide number 19. You will see that consolidated operating expenses amounted to 2.35 billion euros. That's an increase of 6.1% year-on-year. The main drivers behind this increase are related to a consolidation of the portfolio of airports in Brazil, the new portfolio of airports, BOAB, that is adding roughly 85 million euros. Higher staff costs across the group. more than 12%, sorry, and more expensive security, maintenance, people's services in Spain. And on the other hand, we have also had some tailwinds related to the lower power cost that have contributed with a reduction in cost of 31 million euros, but also the reduction in the IFRIC 12 accounting expenses because we have managed to finish all our construction activities in the northeast portfolio of airports in Brazil. If we look at the Spanish network, operating expenses total 1.9 billion euros. It doesn't increase about 7%, or circa 7%. Staff costs grew by 10.2% to 535 million euros, mainly due to annual salary reviews. that's 2.5%, higher social security costs, also the increase in headcount costs, and also we have marked a potential impact for the review of our salary costs related to the negotiations of the new collective agreement at INA level. Oil operating expenses rose by 6.9%, reaching 1.2 billion euros. In the network in Spain, as I'm sure you will realize, the ratio of OPEX per pack has decreased by 2.2%, from 6.39 euros per pack to 6.25 euros per pack. That has happened while activity has increased by 9.5% in terms of traffic. If we look at the cash generated by the operating activities, I'm referring to slide number 2022, They amounted to 2.7 billion euros. That's an increase higher than the increase that we have seen in the EBITDA because it's an increase of 23.7%. At group level, consolidated net financial debt decreased to 5.5 billion euros. At the net debt to EBITDA ratio, it stood at 1.57 times. With respect to our hedging policy, hedge debt or fixed rate debt stood at 77% of our total debt compared to previous year that I was at 75%. And on the average cost of our debt, it remained at 2.54% compared to 2020 in 2023. Let me devote some time to the international activity of the company, and we'll finish after that and we'll start with the Q&A. With respect to our international activity, I'm referring to Luton Airport. I'm very happy to say that we are already operating Luton at 93% of 2019 traffic level. I would like to highlight that total revenue and EBITDA were the highest ever, and also the significant increase in the EBITDA margins. If we move and we cross the ocean, our activities in Brazil... where A&B closed the year with 59 million passengers, as I was stating earlier, and the increase in terms of passengers was 8.3%. And with that, you will realize that from an accounting standpoint, saw a decrease of 69%. There is a reason for that, a non-recurrent one. I'm sure you will remember that last year, we unwind the impairment that was affected this company. and therefore we had an extraordinary revenue that is the reason behind the EBITDA of the previous year that was €1 billion. If we compare apples to apples, the increase in EBITDA for this international subsidiary, Vaina, is higher than 40%, as you can see in the slide at the bottom left. If we move to BOA, BOAB, the Congonhas Concession. You will also see a significant increase. There is a reason behind that. Last year, we only account for a couple of months, slightly 40 days, of the activities related to Congonhas Airport and the rest of the portfolio. And this is the very first year in which we are already showing the total EBITDA for the activities of this portfolio, amounting to $600 million. From a CAPEX standpoint, also, it's worthwhile mentioning that last year, the figures that we invested, that we paid, are showing the initial upfront payments that we had to pay in Brazil because of this concession. And in this year, there has been a minimal cash flow coming out from the company for CAPEX-related activities. And that would be the end of my presentation. So, operator, if that's okay for you, we are ready to move to the Q&A session.

We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again. If you are called upon to ask a question and are listening via speakerphone on your device, please pick up your handset to ensure that your phone is not on mute when asking your question.

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Our first question comes from the line of Christian Ndelku with UBS. Your line is open.

Hi. Thank you very much for taking my questions. Maybe the first one on the December decision from the regulator to keep the tariffs flat in 2025, could you please clarify what were the arguments from the regulator's side for this decision? And what do you expect to be able to achieve in tariff increases in 2026? You have quite a meaningful tailwind from the K-factor dilution that should help you in 2026. The second question on DORA3 CAPEX, I think earlier on the call you mentioned it would be a very strong level of CAPEX when DORA3 starts. I acknowledge that the plans are not finalized, but could you give us some color? Can you rule out the trebling of the capex, the 1.5 billion euros capex per year in Spain during Dora 3? And the last one, if I may, is on retail in Spain. You have several initiatives to increase the commercial spend per pack. Simplistically, how should we think about growth in commercial revenue per passenger in 2025? Can it be more than the 2% that you've achieved in 2024? Should it be less? Any color you could help us steer. Thank you.

Thank you.

I will start with the CAPEX question and then I will give the floor back to Nacho Castejón. Unfortunately, we cannot be precise in terms of topics. Why? Well, it's just because we are very serious following the terms of the law in the sense that you know that this is a regulated business, a regulated line. We still have to discuss by the way, by the regulation with the airlines, our proposal. But anyway, we have announced and the regulator, the Spanish government, has said that they agree with us. We have announced. Sometimes we've been the first to announce it, other times it's been the government who said that they are aware of an initial proposal of AENA which they consider adequate. With this I mean that I don't foresee disagreement In global terms, between AENA and the Spanish government, we all agree that many Spanish airports need CAPEX because they need to expand. Others need REPEX. So I don't really see how we cannot agree globally the volume of CAPEX. But, of course, we have to be very careful because we have to introduce in the discussion the airlines. Okay, after this a little bit dense introduction, if you just, you know, do the exercise to consider that we have publicly announced the CapEx and the expansion of Madrid. Tenerife North Tenerife South Alicante Valencia Lanzarote and other smaller airports you can directly the views that CapEx will be strong and I would say significantly very significantly above 1 billion euros per year that's I mean That's because I think that I cannot say more than that, but I think that the adverb is important. Significantly above 1 billion euros per year. There are three. Thank you, Chairman. Hi, Christian, this is Nacho back. I understand there are two questions left on your side with respect to the 2025 charge study. Basically, the figure that we got was that the applicable EMAC of the previous year would operate as a hard cap with respect to the applicable tariff for 2025. That was the background that we got. With respect to next year, we haven't started the consultation process for 2026 tariffs yet. So that will normally start in May. And we are still a bit far from being able to give you some further visibility on 2026 tariffs. What I think is clear that is an objective from the current mandatory regulation is that the interim regime is expiring from January 2026. On dilution, the regulation is clear about how dilution operates. So I will move to the next question that you were raising on radar. Sorry to interrupt, Nacho, because I was thinking that going back to the CAPEX question, I forgot to say that we have for sure also important CAPEX in Delta III in Barcelona. and this is regardless of the final decision concerning the expansion of the airport. I mean, we have announced that we will invest in T1 and T2, regardless of the expansion, and this investment will... at least 700 million euros, so I would modify my forecast. It's not only significantly above, I would say very significantly above 1 billion euros per year. Sorry to interrupt, Nacho. Thank you. Thank you, Chairman. I think I had already addressed, Christian, your first question. So the end of the interim regime, so no caps starting from January the 1st to the 26th. With respect to retail, I believe you were asking about some guidance on commercial revenue per box because we had experienced a growth this year slightly above than 2%. What I would like to highlight, Christian, is a couple of things. I think the first one, the straight-lining and max adjustments this year in 2024 have helped a lot in terms of our revenue recognition and income recognition. That impact, if we, for example, look at the duty-free business line, that impact, and I'm referring to the multi- or straight-lining adjustment or multi-year adjustment, that impact will get smaller and smaller through the life of the contract. So we could have there some, I would say, headwinds that I will have to mitigate with the performance of the business. Next year, we have many initiatives. I was referring in my opening remarks about all the activity that we will deploy in Parma. We will also be deploying a lot of activity in Barcelona for F&B. So we are hopeful that we will be able to mitigate those potential headwinds with all the tailwinds coming from the performance of the business activities on rent-a-car. We are hopeful that we will be able to deliver increasing sales that we said when we awarded the new contract. And we are seeing also tailwinds coming from the VIPs. And also in 2025, all the construction activities, and some of them are very iconic, and referring to duty-free activities in Madrid, will be done. So we will see that that performance hopefully will help, and we will help the company to keep the growth in the commercial revenue per packs. Thank you, Christian. Thank you very much. Let's move to the next question operator, if we may.

And our next question comes from the line of Prieto Luis with Kepler Capital. Your line is open.

Good afternoon. Thanks for taking my questions in today's call. I have a couple of questions, if I may. The first one is regarding the following. If I look at financial leverage in 24, 1.6 times, seems to me a very low number. Even with significant capex in Indora 3 that you were talking about, this figure should not spiral out of control. So would this put any pressure on the capital allocation front over the long term, be it higher dividends or more active M&A activity? And then the second question is, you mentioned that no commercial contracts were above max levels in 2024, but passenger spend has grown very strongly. So would you say that you're more or less optimistic now than what your updated strategic plan forecasts for the amounts of variable rent exceeding match in 2026?

Thank you.

Hello again, this is Mauricio Lucena. I will answer the first question. I would say honestly that nothing relevant has changed in terms of the capital allocation plan of the company. I honestly think that there's room for everything. We will invest strongly, we will keep our 80% dividend policy, payout policy at least, because we are also aware that our debt ratio is decreasing. At the same time, as I said, the $3 will be very demanding in terms of CAPEX, so for us it's a good starting point, the room we have to leverage the company to manage the CAPEX investment. it will be absolutely compatible with what we think is a generous payout and dividend policy. At least in the coming years it will be 80% of the payout in terms of the individual company, AENA, SME, SA. With this context clear, We will constantly analyze the best use of the capital that belongs to our shareholders. And I forgot M&A. In M&A, again, nothing has changed. You know that we look carefully at every single project. there are not that many projects in which we can be interested because this is a sort of a tight market, but I think that we have demonstrated clearly that this constant analysis of all the international opportunities is perfectly compatible with a very serious and rigorous approach to the figures, to the financial figures. You've seen that since the acquisition of Congonhas and the other ten airports that went along with Congonhas, we have not... We have not materialized any other international project, and it's not because we have any at all financial constraint. I think we have financial muscle to, let's say, to materialize any international opportunity, but it has to accomplish the very strict requirements financial objectives and analysis that we always do with this kind of projects. But I'm just adding this reflection because, of course, this is another important part of the general space of the capital allocation. Thank you. Thank you, Chairman. Hi, Luis. This is Nacho. You were asking about our commercial performance and how that compares, if I understood you well, with our strategic plan. I think at this moment in time, Luis, we will not be updating or providing different guidance on the commercial activities compared to the strategic plan. Tailwinds, we had a higher traffic than we were expecting when we put together that plan, as you will have seen from the guidance that we provided last year, sorry, yesterday, last night. And some business commercial lines are operating in a very satisfactory manner. We have managed to deliver increases in max. But also we are very careful that the macro situation is weird, is strange. inflation is remaining, is a bit sticky or stickier than we were planning, and that could affect passenger behavior. So at this moment in time, happy to provide more information on the performance of this year's risk, but I'll have to stick to the guidance provided for the commercial performance of the strategic plan. Thank you.

Absolutely. Thank you very much. Our next question comes from the line of Elodie Ronald with J.P. Martin. Your line is open. Hi. Good afternoon. Thanks for taking my questions.

The first one is just to follow on the discussion on M&A. So obviously you have room to do some more M&A, as you said you haven't done and you had the ambition, I think, to grow EBITDA in international from 10% to 15% as part of total of group EBITDA. So I was wondering if you could update us on the pipeline, if there is anything in the pipeline for 2025 or at least over the next year. Second, the question is on cost inflation. If you could give us a bit of a guidance on where we should land on energy costs, where your hedging is also ongoing, and on wages, given the negotiations that you've had. So what kind of inflation you're looking at for 2025? And then lastly, I was wondering on your traffic guidance, you give us a very precise guidance this time. Do you think it's still conservative? I mean, we know you're usually conservative on that. So I was wondering if you could give us a bit of qualitative comment around that guidance. Thank you.

Hi, thank you very much. This is Nacho speaking. I'll try to remember all the questions that you raised. With respect to cost inflation and potential performance of our cost lines, Well, this year the chairman was referring to the, I would say, very successful performance in terms of EBITDA margin. This year has been, I would say, has been outstanding. We have an increase in charges, about 4%. And also the commercial side, we were able to get a significant increase coming from all the new contracts signed. And on the OPEX front, the energy costs helped us. If I remember well, the improvement that we got, the reduction, sorry, that we got from the previous year was around 30 million euros. So that has helped a lot. But if you look at our main cost items related to operations, we have suffered some cost pressures. I'm referring to security, I'm referring to cleaning, I'm referring to PRM cost. Those are trends that given what we are seeing in the market, are things that are going to be there through the next months. We don't see what it would be changing. We are seeing cost increases coming from our suppliers. We are seeing seeing, sorry, cost increases coming from or as a result of the stick inflation that I was discussing earlier with Luis, and we are seeing also more and more regulation applicable to some of our activities on the aero side. So that would be my reaction with respect to your question on cost. I think that the potential change 2025 versus 2024 is energy prices. January energy costs were higher, that's public info, that's market info, and we are not managing information that gives us visibility with respect to energy costs through 2025 being much better than the previous year. So the positive impact that we have in 2024 perhaps is not there in 2025. You were also asking on M&A, further to the previous explanation of the chairman. Of course, we cannot set a specific pipeline with you or specific deals, because normally if there is anything, any market player is always subject to confidentiality agreements. Normally the press is always following and the media is always following any transaction that is there. So that's all that I can share at this moment in time. On traffic guidance, I think if I look at the consensus, public info, etc., there were many peers, there were many houses and brokers that follow us that were between 3% and 4% with respect to the potential growth of next year. I understand that the guidance that we have provided is slightly below consensus. I don't think that that means that we are prudent or conservative. That means that as a result of a thorough analysis coming from our planning teams, we from a bottom up analysis, from a top up, bottom up analysis, sorry, looking at the scale of the earnings, trying to understand the low factors for the next months, looking at the summer schedules, putting all the information that we have together. And that's our conclusion today. There is a significant uncertainty around us affecting geopolitics in Europe, affecting monetary policy in Europe, and affecting inflation in Europe. From a political standpoint also, many countries in Europe are also going through difficult or at least difficult interesting times. So that's how we see 2025 in terms of traffic growth. Let's see how summer evolves, next month's evolve, and we are hopeful that we will be able to deliver the growth that we disclosed yesterday. Thank you.

Thank you. Next question comes from the line of Andrew Lobenberg with Barclays.

Your line is open.

Hi there. Could you talk to us a little bit about what might happen at Luton if there is approval by the government to expand it, how that would work in terms of the equipping concession, renegotiation of the concession, that sort of thing. Could you talk to us a little bit more about Barcelona? I mean, you came back and highlighted that you have the plans to undertake 700 million of investment regardless of the expansion plan. Is there any prospect of seeing agreement on expansion or is that simply unrealistic given the political context? And then just finally, just wondering when you might refresh the CMD or refresh the strategic plan given the strength of performance this year. Is there any prospect of you guys coming back with a capital markets day this year, or would it rather wait until the DORA 3 is closer to finalized or indeed fully done?

Thank you. Hello. Again, this is Mauricio Lucena.

I will answer the last question. I think it's a very good question because we had internally to reflect on that carefully. You know, fortunately, happily, our strategic plan has... become sort of obsolete in the sense that we have achieved our objectives, both in terms of volume of activity and in terms of financial figures. But on the other side, I think that for a company like Azaena, it's very natural to, let's say, harmonize each strategic plan with the regulatory period. I know that globally we also have to take into account Luton and Brazil, but still, the relative weight of Spain is very high, so I feel more comfortable if possible, we can, let's say, put in line the period of the strategic plan with the DORA and in this sense we just have to wait one and a half years so I think it's all right. During these one and a half years we can take as a reference the current strategic plan or as an alternative we can compare with 2024 which is more or less similar and wait until 2027 to inaugurate the next strategic plan which means that we will have to work on this new strategic plan in half a year time because we will start reflecting on the new strategic plan as a strong guide for you and for us internally at the beginning as I said of 2026 so all in all we will wait and I will give the floor to Nacho to explain better what we know for sure regarding Barcelona and what we don't know for sure regarding Barcelona thanks Thank you, Chairman. Hi, Andy. This is Nacho. On Luton Airport, I think it was your first question. Well, as you know, Aina is a 51% shareholder in a company that is a concession holder of a contract, of a concession that is terminating, expiring in 2032, August 2032, if I remember well. Therefore, any potential improvements, expansion of that airport, if they have to happen or they may happen because of a decision coming from the British government giving green light to any expansion sponsored by Luton, if that expansion needs to happen earlier or is convenient and happens earlier, I think from our side we will be willing to have that discussion. We are an airport operator. Luton is an airport that we know well, is just about sitting with all the different stakeholders, with our partners over there, with our client, trying to reach a potential solution to that equation, and having the expansion taking place, or at least part of the construction activities related to that expansion taking place before the end of our concession. And that's a scenario that we would love to see. Having said that, at this moment in time, the contract that we have is very clear, that we have a concession contract. Hopefully, the experience of our client with us is satisfactory, and that's what we think. There might be an angle there to find a solution that can get the expansion of the airport being managed through the current agreement or an amended agreement of AINA and our partners there with Luton. With respect to Barcelona CAPEX, the chairman was referring earlier to an investment of around 700 million euros in that airport. Basically, that investment... is related to creating more space to improve security controls, checking and baggage claim areas so that we can accommodate the necessary space that we need because of the new machines and new devices are necessary because of the carbon, because of the regulation that it is becoming mandatory in Europe. So that's happening, that's happening anyway and there is public information about that that we have launched some of the contracts in order to put together that in the next months from a design and engineering standpoint. With respect to the future expansion of the airport, as we were saying earlier, that's something that at this moment in time is being discussed at government level, so I will not be able to give you more insights or more updates. From the company standpoint, the position is that we are totally supportive of the expansion and we'll be happy to work on it if it finally happens. Thank you.

Thank you.

Next question comes from the line of Dario Maglioni with BNP Paribas. Your line is open.

Hi. Thank you. Congratulations for another excellent year. Three questions for me. The first one on dividend payout. You mentioned earlier that we should keep, we should expect that 80% remains stable in the next few years, as you also include in DORA3, which is just for 25 and 26. Second question is on OPEX in Spain. The staff cost increased 10%, and as you mentioned, of these, around 7%, 8%. was wage. However, there was an agreement in place for public workers to increase costs by only 2.5%, if I remember correctly. What explains the difference between 7.5% and 2.5% annual increase? And third question on the car rental. In Q4, there was a big increase in revenue per passenger. I think it was around 11%, while for the nine months, it was totally flat, year on year. What is playing this sudden improvement? Is that a new contract? And if so, is it sustainable in 2025?

Thank you. Thank you, Taiyo. This is Nacho speaking.

Let me get a respect to your first question on dividends. I think what I can confirm to you is the current dividend payout policy of the company that stands at 80%, that is the highest, and that unless it is changed by the board, that will remain as the dividend payout policy. I would like to highlight that given that sometimes we are challenged because it's a net income, it's an accounting, and it's not based on cash flow, we are also anticipating some cash flow. Because part of our revenue coming from our commercial activities is pure accounting revenue. There is no cash there coming from the commercial activities and the straight-lining adjustments. So that's an advance with respect to cash flow generation of the group. With respect to Dora 3, What I can say with you, Dario, is that once we have all the plans together, of course, we will look at a dividend payout policy, and we will see if taking into account CAPEX needs, traffic forecast, et cetera, that needs to be changed. Of course, we will look at that, but at this moment in time, the only thing that I can confirm to you is the current payout, Dario. With respect to staff cost, There are a few drivers explaining the performance of the staff cost. And if you look at an isolated basis, the last quarter of this year, you will realize that there has been an increase there. Through the year, the main drivers for the increase are related to salary increases. You are right. That's around 2.5% because of the current agreement that expired last year because it was applicable until the end of 2024. Also, we are adding headcount. The company is growing. Traffic is growing 9.5%. We have an international footprint that is getting more and more interesting but also complex. And therefore, we have been forced to add more people that hopefully will deliver value for the group and for the shareholders. And also, social security costs increased because of regulation becoming mandatory in Spain with respect to removing some social security caps that were applicable earlier. On top of that, and that's why in the last quarter you will see an increase, we have decided to book a potential impact as a result of the negotiation that is taking place related to the new collective agreement that could be applicable to the company. As a result of that new collective agreement and the content of that collective agreement, salary costs could increase a bit, and some salary costs related to items that accrued last year. So that's the reason for the performance of staff costs in 2024. I think you had a last question related to the car rental business. that if you can repeat it, I would appreciate it. Because I think you were referring to some performance for the last months that I couldn't follow you well.

Yes. So it was current for a big increase year on year in current revenue. Okay. Thank you for... I suspect it's a new contract, but I just wanted to confirm that.

You are totally right. As part of the new contract that started, if I remember well, November the 1st, Valuable rent increased from 8% to 8.5%, and also we had increases in the fixed rent related to all that business activity. Also, contracts have gone up, and prices are slightly above last year. So last quarter, the contract and also activity levels have performed as the previous nine months. The result is a better performance this quarter. Thank you, Dario. I hope that I have addressed all your questions. Indeed.

Thank you. My pleasure.

Yes, good afternoon. Thank you so much for taking my questions. I've got two. Firstly, can you just update us as to what are the next steps on DORA3? Where could we see AINA publishing its proposal for DORA3? Is that only in 2026, or could we already have some news flow during this year? And my second question relates to the CAPEX that you mentioned, significant investments. But I would be interested to know what is the increase in your capacity that you anticipate to achieve with those investments during Dora 3 in terms of millions of passengers. Are we talking about 20 million extra capacity or 40 million or is it much higher than that? Could you perhaps provide some sort of indication? Thank you.

Our pleasure, Maxime, and your questions are very good ones. My fear is that I don't think I will be able at this stage to provide you a complete answer. With respect to your first question, very likely at the end of this year, very early 2026, there will be information publicly available about DORA number three. That's our goal, and that is very clear in regulation, that consultation has to start at that moment in time. Before that, I think it's unlikely that there will be a whole picture of the company for that period of time. With respect to your second question, I think we are going through data assessment at this moment in time. We are analyzing all the current footprint of the company from a capacity standpoint, all the assets, all the investment plans, all the capex needs of the company. We are trying to prioritize half a list. And from there, we have to talk to the government, the airlines, the carriers, and start that process in order to confirm if that priority list is also one that they are willing to support, that's further to the explanation of the chairman. We are confident that that will be the case. Thank you. And this is Mauricio Lucena again. I would just add that if you look... with some perspective the last 20 years, I think that clearly one competitive advantage of Spain in terms of tourism and consequently in terms of, let's say, a competitive advantage also of its whole economy has been that AENA and its airports have had systematically enough capacity, sufficient capacity to accommodate the demand. And I think that this feature of the last decade 20 years or of the last decades, it's something that is very appreciated by also the regulator, in this case the Ministry of Transport and the Spanish government, and also by the airlines. So, in the long run, in the long term, one clear objective is to keep alive this competitive advantage, which comes from AENA, but let's say it irradiates the whole tourism sector and the whole Spanish economy. And I think this is, let's say, on the bottom line, what will... what will inspire the coming investments. That's why they will be high, because I think that we all agree in Spain that the airport system has to keep this, let's say, short or moderate excess of capacity in order constantly to have sufficient room to accommodate the future traffic.

Thank you. Thank you very much.

And our last question comes from the line of Jose Arroyas with Santander. Your line is open.

Yes, good afternoon, gentlemen. I have three or five minutes. The first one is on the dividend policy, and I know this was covered earlier. I wanted to ask you in a slightly different way. Last year, or in 2024, the free cash flow was about $1.8 billion by my analysis, but the dividend paid were just $1.1 billion. Going forward, in the absence of M&A, the dividend will continue to go down. I wanted to ask you if beyond 2026, AENA could link dividends not only to earnings, as it is doing now, but also to net debt performance. That would be my first question. My second question is on the chairman's comment about capex in Dota 3 being significantly above 1 billion euros per annum. I suppose the chairman was alluding to the capex in the cash flow statement, but I was curious if you could give us some sense if the RUB may also grow by more than one million per annum in dollar three. And lastly, and the traffic outlook for the summer. I want you to pick your brains on the Ryanair's statement that they want to reduce flight capacity at several regional airports in the summer season. I want you to understand if IMA is already receiving interest from other airlines to fill those gaps, or if there is a need to adapt the commercial incentives in these airports. Thank you.

This is Mauricio Lucena. I will take just the dividend policy. I mean, the question is very good. Just to try to be in my shoes. You see a very challenging Dora 3. At the same time, of course, we are, in ratio terms, we are deleveraging the company. I'm perfectly aware of this reality. And on the other hand, we are all the time very, let's say, we are permanently following any novelty in terms of international opportunities. Always very seriously analyzing the financial vector, of course. So, you know, I still need, or when I say I, I mean the company, of course. The company still needs a little bit of time to have a greater... greater visibility on terms of the precise amount of CAPEX. You said that I mentioned significantly above, but I added afterwards very significantly above 1 billion euros of CAPEX. So, probably at the end of 2026, we will have a clearer picture of precise CAPEX 3 and CAPEX necessities. On the other hand, what international opportunities in the terms that AENA values are feasible. And finally, the leverage we need. And of course, never forgetting that at least our dividend policy in the coming years will be 80% of payout of AENA SME. I don't see any element in the foreseeable future that makes me question this dividend policy. Not at all. I would say that rest assured that if we don't have a new pandemic or any other natural disaster, we will maintain this 80% dividend policy. I mean, it's not that we do not want to disclose... valuable information. If you are careful and prudent, at the present time it's difficult to, let's say, how would I say, to manage coherently all these very different pieces that have an impact, hypothetically at least, on our leverage and more solemnly said, our capital allocation.

Hi, José Manuel.

This is Ignacio. You were also referring to some questions related to input of CAPEX investments in the regulated asset base. You know regulation. If we invest and the assets become active from an accounting and from regulation and also from real activity, we can add all those investments to our regulated asset base. That's how it normally operates. So if we are able to deliver a plan in which we are able to invest similar amounts to the ones that the chairman was using as an example, that will become part of the asset-regulated base through Dota 3 or Dota 4, depending on how we execute those construction works and when they are open and become active for passengers. I understand those... You were also asking about airlines. and these discussions related to the possibility of having other airlines' carriers replacing the routes that Ryanair could stop providing. Well, as the MD for all the airport activities of the company always explains, those activities of talking to cities, towns or airlines They always happen. We are always in continuous conversations with all the different stakeholders in order to understand the appetite, the interest of airlines in all our airports, and in particular those airports that have to provide some kind of public service in the event that an airline leaves the operation of that airport. And that's something that we are doing on a daily basis because it's our obligation as a company.

Thank you.

Thank you, Desiree.

There are no further questions, so I think we can end our presentation. Thank you very much, everyone, for joining us today. It has been a very helpful meeting. Thank you.