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.