Aeroports De Paris Sa

Good morning and welcome to Group ADP 2024 First Quarter Revenue Conference Call. Today's call will be recorded. And if you want to ask a question at the end of the presentation, please press star zero, sorry, please press star one on your telephone keypad. I now enter the call to Cecile Kumbo to begin today's call. Please go ahead. Thank you.

Good morning. Thank you. Thank you for being with us this morning for first quarter revenue publication. I am Cécile Combeau, Head of Investor Relations of Groupe ADP, and I am here with Philippe Pascal, our CFO, who will go through some prepared remarks before taking your questions. One or two per analyst, please, to allow for a greater number of you to dialogue with him. Before we start, I remind you that certain information to be discussed on today's call is forward-looking. and is subject to risks and uncertainties that could cause actual results to differ materially. For these, I refer you to the disclaimer statement included in our press release and on slide 26 of our presentation. And with that, let me hand it over to Philippe.

So thank you, Cecile, and good morning, everyone. Let's jump directly to slide two with the highlights. Q1 shows solid start to year in line with expectation. Our total revenue is turning at 1.3 billion euros in this first quarter, up 10.9% compared to last year. Traffic has been developing in line with our assumption, with strong momentum in our international asset, except for AMAN. In Paris, spend per pack was strong, up 7.8% to 32.7 euros. Some headwinds are expected to kick in later in the year. Teams are fully mobilized and getting ready to welcome the Olympics and Paralympics games in addition to the summer traffic. At GMR, we continue to expect the merger between GMR Airport and GMR Infrastructure Limited, our listed partner, to be completed towards the end of the second quarter. Moving on to slide three, the latest Skytrax fronting was the issue last week. Paris-Charles-de-Gaulle continued to be the best airport in Europe for the third year. and early is now ranked as best regional airport in Europe. That is a huge improvement for us. Five other airports of the group are also in the top 100, including Delhi and Goa, which had opened in January 2023. Every day, our teams try to deliver the best quality of service to passengers, and we are delighted with this recognition of our work. These results also encourage us to continue to focus on hospitality in line with EDP's raison d'être. Slide four. Slide four shows overall traffic evolution fully in line with our assumption as I commented earlier. Let's focus on Paris on slide five. In Paris, we welcome 22 million passengers in the first quarter, up 4.4% against Q1. Last year, Q1 was impacted by some strikes, with an impact estimated to 470,000 passengers, 2024 being leap year, the 29th of February brought an additional 250,000 passengers. On the opposite, air traffic control carried out trials with the new for-flight system, leading to some scheduled flight cancellations in January and February. Overall impact on traffic is estimated, for this reason, to 1 million passengers. Traffic with mainland France show a decline of 4.8%, reflecting the impact of the for-flight trial and the closure of several domestic routes compared to before COVID. For international traffic, this traffic growth is strong, up 6.5%. Traffic with North America see strong momentum, which is up 7.1% overall, driven by traffic with Canada in particular, which is up 31.9 euros compared to last year. Traffic with Asia-Pacific is up 41.9%. This is notably driven by traffic with China, which was six times higher than Q1 2023. There are currently around 48 flights per week between Paris and China, which is around 60% the frequency of the pre-COVID winter season 2019. We are not expecting this frequency to evolve in the coming months. The share of low-cost traffic is close to six points of percentage above pre-COVID level, to 26.7% of Paris traffic. Let's now move on to slide six. We will focus on Ex-Time Paris spent per pack. Performance remains very strong, to 32.7 euros, up 2.4 euros or 7.8%. Bear in mind that Q1 2023 was the first quarter of the operation of Terminal 1, which was not yet full speed, providing a favorable basis of comparison. We continue to see strong performance in fashion and luxury goods, which is the greatest contributor to sales in our airside shops. This growth is driven by international traffic in the flagship terminals, Terminal 1, of course, but also Terminal 2E as well. Spend-part-packs in food and beverage continue to grow with additional selling points. Media and advertising is performing very well with a strong contribution to SPP in the first quarter, driven by advertising campaigns ahead of Olympics. In the coming quarters, we expect to see the effect of the reopening of Terminal 2E and 2C materializing from the second quarter. I remind you that this terminal was closed to upgrade the security system of luggage system, the retail offering in Terminal 2E and 2C being less powerful compared to Terminal 1 International. The reallocation of a portion of the international traffic to this terminal is expected to create a downward rebasing of SPP starting in Q2. Effects of working terminal 2EOK are now not material for the moment. Slide seven. Moving on to slide 7, we will focus on our two main international assets. As a reminder, TAV numbers are fully consolidated in our accounts and GMR Airport results are equity accounting. As you can see on the left part of the slide, traffic growth at TAV Airport was excellent, up 21.8%. In Turkey's international network of airport, traffic is up 26% with outstanding growth at Almaty. The new international terminal at Almaty is expected to open in June. And we can reach capacity to 13 million passengers at the end of the day. Turkey's airport in Turkey saw strong growth as well. up 18.2% with international traffic growing 30.6% compared to Q1. On the right side, GMR report traffic was solid, up 10.7% compared to Q1 2023. Here, as well, international traffic is seeing the strongest growth. Traffic growth in the international asset of group EDP was up 14.3%. Moving on to slide eight. Revenue reached 1.3 billion euros in Q1, up 10.9% versus last year. Aviation revenue is up 17 million euros. The segment is growing 4% in line with traffic growth in Paris. Keep in mind that the regulated tariff increase of plus 4.5% in average is being applied from 1st of April 2024, so no impact in our numbers for the moment. The retail and services revenue is growing 4%. to 42 million euros, including a scope impact of minus 13 million euros corresponding to the change consolidation method of Eckstein Food and Beverage, which is now equity accounting. The asset revenue segment is up plus 4% versus Q1 2023 due to new assets but also in addition to rent indexation. Abroad, Thierry Airport is growing 71 million euros, bringing by far the biggest contribution to revenue growth this quarter. Amman Airport is impacted by the geopolitical context. To conclude, let's move to slide 10. Our traffic assumption and financial guidance for 2024 and 2025 are confirmed. We continue to expect traffic in Paris to grow this year between 3.5% to 5% and above 8% at group level. Our target to deliver at least 4% growth in EBITDA is also confirmed. Achieving this objective imposed a high degree of discipline given the OPEX increase expected this year again, as commented already in the past quarter. Investments are expected to ramp up this year in Paris. We are guiding for 900 million euros on average between 23 and 25. And you remember, we were below that number in 2023. All our other targets are confirmed. And with that, let's open the line for the Q&A. Thank you.