Aeroports De Paris Sa

Hello and welcome to the Group ADP 2024 half-year results call. Please note this conference is being recorded and for the duration of the call, your lines will be on listen only. However, you'll have the opportunity to ask questions. This can be done by pressing star 1 on your telephone keypad to register your question. You are currently being asked to limit yourselves to a maximum of two questions. If you require assistance at any point, please press star zero and you'll be connected to an operator. I will now hand you over to your host, Cécile Combo, Head of Investor Relations, to begin today's conference. Thank you.

Thank you, François, and good evening, everyone. Thank you for being with us tonight for our Healthier Resources presentation. Today with me are Augustin de Romanet, Chairman and CEO, Edouard Arcright, Deputy CEO, and Philippe Pascal, CFO. We will start the session with some prepared remarks from the management before the Q&A session. As a reminder, 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 48 of our presentation. And with that, let me hand it over to our chairman and CEO, Augustin de Romanet.

Hello, guys. Thank you, Cecile, and good evening, ladies and gentlemen. Thank you for joining us to discuss our half-year results, 2024. So let's move directly to slide three. We've delivered a consistent set of good operating and financial results in this first half of 2024. First, traffic is developing in line with our expectations, both in Paris and in our international assets. Second, after two years of preparation, this semester we finalized the rehearsals and welcomed the arrival of passengers taking part in the Paris Olympic Games. A special summer has now started. Third, on the international side, we are in the final steps of the Gil-Angal merger in India, checking that all conditions precedent to the merger are completed. Closing of this very important transaction is expected shortly, It's now, hopefully, a matter of days. Fourth, we are posting 19 and 43 million euros EBITDA. That is 9% above last year, driven notably by an outstanding performance at Stade Airport. And fifth, we're expecting that this overperformance will likely soften in the second half on our EBITDA growth guidance of at least plus 4% is fully confirmed as our traffic assumptions on other financial objectives. On slide four, you can see overall traffic evolution in line with our assumptions for Paris and at group level. Philippe Pascal will come back on this data in a few minutes. Let's move to slide five to talk about our operations. In Paris, our news is marked by the 2024 Olympic and Paralympic Games, which will kick off this Friday. It's a fantastic hospitality challenge for which all teams have been preparing for a long time now. We've already started to welcome many delegations in good conditions. Arrivals are intensifying this week with now only three days to go before the opening ceremony and the start of the competition. The second major operational challenge will take place on August 12th when most of the athletes will set off. While Peak day traffic is expected to be higher than the usual peaks in a normal summer. Overall, for July and August, we anticipate a substitution effect between Olympic-related traffic and seasonal tourism. It was the same in London, Athens, Tokyo. Let's move on slide six. Our infrastructures are ready. with a revolution of the access to Orly thanks to the commissioning of the metro station built by ADP and the opening of Metro Line 14 a month ago. Now, Orly is related to the network of Paris Metro in very good conditions. You can reach the center of Paris in less than 25 minutes from Orly. For the first time since 2018, all Parisian terminals are now open. The last two in CDG were Terminal 2C, reopened since May the 23rd, and Terminal A since July the 2nd. Now moving on to slide seven. Our teams. are mobilized and have rehearsed to welcome tourists and delegations. In such events, there is no room for a running period. We rehearsed, and now here we are. To avoid baggage and passenger jams at departure time, we located athletes checking to the Olympic Village. They will unload their bikes the canoes and other vaulting poles, which will be transported directly by special truck to the airport, where security checks will be carried out in a dedicated plant. Athletes will also benefit from a dedicated terminal for their departure from Paris. Now, let's talk about our international operations on slide eight. Among the highlights of this half year, I would like to mention the opening of the new international terminal at Almaty Airport at the beginning of June. Part of TAVRport's portfolio, Almaty in Kazakhstan is experiencing rapid traffic growth and we are delighted to see its capacity increase to 14 million passengers with new retail facilities giving an outlook for announced profitability. Continuing with our international portfolio, I will now move to slide nine about our 51% owned Jordan subsidiary, whose name is AIG. Following COVID-19 disruption, we've negotiated together with our partners and obtained from the lenders and from the government of Jordan, a global restructuring agreement leading to the extension of the concession held by AIJ to manage Amman Airport for an additional seven years until now, November 2039. This renegotiation supports AIJ's financial and operational stability which had been shaken during COVID, as well as its ability to accompany future traffic growth in Jordan. This positive outlook is reflected in the reversal of an impairment, which Philippe Pascal will comment in a few seconds. Now, let's move on the progress made with our strategic roadmap. Actions contributing to the achievement of the 2025 Pioneer Objectives are continuing. You see on the slide some key progressives contributing notably to the decarbonization of our operations. Besides, four out of the 20 objectives of the roadmap have been adjusted to take into account certain external limiting factors such as, first, the speed of change in certain regulatory frameworks, second, some operational constraints linked to air navigation traffic control, third, the speed of renewal of airline fleets, and last, the absence of market opportunities. In the light of the above context, the adjusted objectives set demanding targets and reaffirmed the determination of Group LEP and its commitment to achieve ambitious results. Now, getting back to our half-year results on slide 11, you see here our key figures highlighting our strong performance. And I will now hand it over to Philippe Pascal, who will comment further our operating and financial member figures.

Thank you, Augustin, and good afternoon, everyone. Let's first cycle back to traffic, focusing on Paris on slide 13. As highlighted by Augustin, traffic is growing in line with our expectations, both in Paris and in our international assets. Traffic with mainland France shows a decline of 6%, predicting the impact of the for-flight air traffic management system in January and February, estimated to 1 million passengers. Domestic traffic is structurally growing slower compared to international traffic, notably due to the closure of several domestic routes compared to pre-COVID situation. International traffic, the most contributed for ADP, is growing by 8.5%. Among this traffic, you can see that traffic with North America continues to see strong momentum. It is up 7.8% overall, driven by traffic with Canada in particular, which is up 13.4% compared to last year. Also, traffic with the Middle East is down 3.1% due to the geopolitical context. And the traffic with Asia Pacific is up 35.3%, notably driven by traffic with China, which is four times higher than in H1 2023. There are currently around... 48 frequency per week between Paris and China, which is around half the capacity of the pre-COVID situation in 2019. We do not expect capacity on the road to increase in the foreseeable future. Let's now move on to slide 14, with a focus on Ex-Time Paris Spend-Per-Pax performance. The performance remains very strong to 31.7 euros, up 2.1 euros, around 7% increase. We continue to see strong performance in fashion luxury, which is the greatest contributor to sale in airside shops. This growth is notably driven by international traffic, including the gradual recovery of Chinese traffic in our flagship terminals, Terminal 1 and Terminal 2E. Media and advertising is performing well, with a strong contribution to the SPP in the first semester, driven by advertising campaigns ahead of the Olympics. Going forward, we expect the reopening of terminal 2A and 2C in May and works in terminal 2E or 2K, but will materialize in H2 to affect the short-term dynamism of SPP. Despite this, we anticipate the continued rollout of X-DIME to drive performance and more than offset the headwinds I mentioned. with SPP expected to continue to grow by 2025, but at a slower pace. Finally, I will highlight the most recent development in Eckstein, with the projected acquisition of Paris Experiences Group, as approved today by the Board of Directors. The company is positioned in a dynamic market and benefits from solid position in the tourist reception sector in the Paris region. The projected transaction aims at extending extreme values proposition to tourists throughout their stay in Paris. We hope to close the deal towards the end of the year or by Q1 2025. Moving on to slide 15, we will focus on our international airports, which overall saw a solid traffic growth of 12% driven by our two main international assets, CAV and GMR. As you can see on the left side, traffic growth of CAV airports is strong, up 17.3% overall. Thierry's international network of airports sees the strongest growth, with traffic up 22.7%, and notably a solid contribution from Almaty, where traffic is up 25.5%. The opening of the new international terminal at Almaty Airport in June, as mentioned previously by Augustin, will increase capacity to 14 million passengers and enable further routes. Turkish airports record a solid growth with 14.1% in traffic, with international traffic being the most dynamic, up 17.2%. On the right side of the slide, JMA airport traffic growth is solid, up 8.9%. Here as well, international traffic in India is seeing the strongest growth. Moving on to slide 16 for our conservative revenue. Revenue reached close to 2.9 billion euros in H1 of 24, up 13.4% versus last year. Aviation revenue is up 50 million euros of 5.4%, reflecting traffic growth in Paris and the tariff increase by 4.5% on average apply since April 24. The retail and services segment is up 13% versus H1 23, helped by the stronger in addition to traffic. Real estate revenue segment is up 7%. And abroad, with TLA Airport, CNV is up 31% against last year, bringing the biggest contribution to revenue growth this semester, supported both by a strong traffic growth and strong momentum in its services companies. For Amman Airport, Amman is still impacted by the geopolitical context around Jordan and globally is stable. Moving on to slide 17 on EBITDA, OPEC stands at 2 billion euros, up 15.9%. Out of the 275 million increase in OPEC, you can see the 64 million euros for the new infrastructure tax in Paris, which impacts the free Parisian segments. As a result, EBITDA growth with semester is largely driven by international and shown on the right side of the slide. As expected and previously commented, we are seeing OPEX increase in Paris driven by staff costs, reflecting the effect of incremental recruitment made as well as salary increase implemented in January 24 in EDP Moser Company, but also driven by higher electricity costs for about 10 million euros compared to last year, and also driven by higher subcontracting costs reflecting efforts on quality of service, but also the effect of inflation on some contracts. At TLV, we also see higher personal costs to enable the higher activity. We expect these effects to continue in the second half of this year. And while EBITDA is up 9.3% in H1 to reach 943 million euros, we expect this overall performance to soften in the second half due to OPEX increased notaries. Moving to slide 18 to see EBITDA trend excluding runoff. And you see the slide, excluding one-off, H124 EBITDA is up 12% against H123, as you can see on the graph in the middle of the slide. The list of one-off excluded is detailed in the appendix and is the half-year financial report. Below EBITDA, on slide 19, there are two items to highlight. The first, the amortization and impairment at €134 million, mainly due to the reversal of an impairment of €152 million relating to the expansion of the Amman airport concession until 2039, which rebalanced the concession. The interment reversals bring a one-off contribution to the net income group share of €61 million. And the second item that I want to highlight is the financial results of €60 million, mainly due to the gains of financial investments. Given this and the solid underlying EBITDA performance, the net result group share stands at €300 million. 47 million euros, up 64% compared to last year. Slide 20. Slide 20 shows an analysis of the net results, group share, excluding one-off, revealing a very solid underlying result in H1-24. In H1-24, the largest one-off impact was the impairment reversal from Hamann Airport that I mentioned just previously. In the bottom part of this slide, you see a reminder regarding the non-cash accounting item that we expect to book in the net result of full years 2024 relating to the upcoming merger of Gil and Gal in India. As you know, it is an accounting item and it has no impact in our cash flow. And whatever the amount of our net income group share will be for 2024, our distribution policy provides for 60 dividend payouts with 60% dividend payouts, with a productive threshold of 3 euros per share. As mentioned by Augustin, we expect the transaction to close in the coming days, and we are very excited about it because it will reveal the value of our asset, which has significantly increased compared to 2020. Moving on to slide 21, you can see on this bridge the main items explaining the evolution in our net debt. I will first highlight that, after applicable accounting rules, the derivative instruments related to the FCCB convertible bond issued by Gemma and subscribed by EDP in March 23 as part of the GIL-GAL merger project. These issues are included in our net debt at fair value. The fair value of this derivative instrument totals €709 million in June 2013, up €177 million compared to the end of 2013. The handling of these instruments will coincide with the settlement of the FCCB and does not be a commitment to cash outflows. Because of this, we wish to focus the analysis of our net debt evolution excluding these instruments with the following few items. First, the usual cash flow outflows of the dividend payments for 377 million euros and from capex spent, which amounted to 471 million euros. And the second point is the 500 million euros bond repayment on June the 11th, offset by the 500 million euros bond issuance of May. and with a seven-year maturity, which allowed to smoothen our debt profile. In total, net debt stands at 8.5 billion, or 4.2 times EBITDA, excluding SECB-related derivatives, the adjusted net debt amounts 7.8 billion, or 3.9 times EBITDA. Moving on to slide 22, about our investment trajectory, which remains unchanged. After several years of subdued cap expanding at EVP SA, another company, we expect to spend around 900 million euros on average between 24 and 25 to meet our maintenance needs and new projects. At group level, CAPEX trajectory stays at around 1.3 billion euros per year on average. On top of EDPSA CAPEX, group CAPEX includes investments in subsidiaries in Paris, mostly in real estate and retail, to a smaller degree, for which we slightly lower our forecasts. And investment in international assets, notably at TLA Airport, which expects an increased amount of investment and updated its own guidance just yesterday. Let's move on to slide 23 to talk about the overall 24-25 target. Our traffic assumptions and financial guidance for 24 and 25 are confirmed. More especially, we continue to expect traffic in Paris to grow with this year between 3.5% to 5% and growth above 8% at group level. Our target to deliver at least 4% growth in EBITDA is also confirmed. Our EBITDA is strong for the H124, even notably by outstanding performance at Thierry Airport. But with this, other performance should soften in the second half, driven by the continued pressure from OPEX, notably. And as we've confirmed out EBITDA guidance with absolutely no change. Investment are expected to ramp up slightly this year in Paris. All over our other 24-25 target, And with that, I will hand it over to Augustin Romane to conclude.

Augustin Romane Thank you, Philippe, for your brilliant presentation for these brilliant figures. So to close this presentation, I would like to invite you to look forward with confidence to the road ahead of us with two slides. Our teams with the entire airport community have worked tirelessly to make the Paris Olympic and Paralympic Games a memorable success and a source of pride. The Games have helped accelerating the transformation initiated with our 2025 Pioneers Roadmap, and they will leave a tremendous legacy for Groupe ADP on our passengers. I will mention three items. First one, hospitality for all, with greater accessibility for people with disabilities, a determining challenge is, for example, that passengers are now able to keep their own wheelchairs until boarding and have them available on arrival exactly at the time they leave the plane. better access to Paris-Orly Airport with the opening of Metro Line 14. And third, the most important perhaps, team cohesion and sense of purpose, which are an essential cement to continue to deliver our objectives. In conclusion, we look to the future with confidence as we've already begun to pivot our business model with aim to combine sustainability and long-term value creation. We build up a group with three complementary platforms, enabling us to balance our value creation profiles and find new sources of work. Hospitality and quality of service are our compass. They make a fundamental contribution to the attractiveness of our airports for airline and passengers alike and are a source of pride for our teams. We've turned the corner on sustainability with a climate strategy fully embedded into all our operations and the way we conceive the future of our platforms. I'm convinced that these strengths will help us to reconcile decarbonization, which is our license to grow further, and economic value. Saying that, with Philippe, Edouard Arclight, and myself, we're happy to answer to you if you have any questions.

Thank you. As a reminder, if you would like to ask a question or make a contribution on today's call, please press star one on your telephone keypad. You are kindly being asked to limit yourself to a maximum of two questions. If you change your mind and want to withdraw your question, please press star two. Please ensure your lines are unmuted locally as you'll be prompted when to ask your question. As a reminder, to ask a question, please press star one. The first question comes from a line of Dario Maglioni from BNP Paribas. Please go ahead.

Hi, good afternoon and congratulations for the good results. Two questions for me, one on retail. I see spend per passenger was healthy in Q2. What are you seeing in June and July after the reopening of the terminals? What is the impact, you think, so far from the reopening of the terminal? And are you seeing any weakness due to consumer being weak in Europe or maybe traffic mix with less traffic from the U.S.? And the second question is on traffic. We've seen on Monday Ryanair commenting on the pricing outlook in Europe for tickets. What are you seeing in terms of traffic and what are the airlines saying? Thanks.

So thank you for your question. So your first question about the SPP target. So as you know, we have a strong performance in this first half of Yeah, and we are also in line with our guidance, but we think that it's fair to include some prudence in our expectation to factor the potential negative impact. Nevertheless, we choose to keep for ourselves the details of our assumptions and also other detailed margins. We expect to see the effect of the reopening of Terminal 2A and 2C materiality from the third quarter of 24. This terminal was closed to upgrade the security system of the luggage system and the retail offering in this terminal 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 relasing of SPP. The works in terminal 2EOK will intensify towards the end of Q3, Q4 this year, with a reallocation of temporary shops for some luxury brands will ultimate goal to enlarge them. Despite these elements, we expect the continued rollout of extreme to drive performance and more than offset the negative effects I mentioned. So I can confirm the guidance, but at the same time, I can also confirm the negative impact that we have in this second half. Your second question about the traffic and the traffic outlook. So, as Augustin said, we expect a neutral effect of the Olympic Games on traffic with a substitution effect between traffic linked to Olympic Games and the seasonal tourism. And we see this phenomenon in London in 2012 and Rio in 2016. But in fact, we have some elements that we are very cautious, but when you see our guidance, we expect in Paris traffic to grow this year between 3.5 and 5% compared to the 23, and we can confirm that in this guidance, We monitor all the potential effects included for flights, including the fact that airlines can see some flight impact. Airlines, including Air France, can try to improve load factor by stimulating demand from pricing with the yield management. We will be monitoring this strategy and their impact on passenger load factor over the coming months, but for the moment, I confirm the guidance without issue. Thank you for your two questions.

Thank you.

Before proceeding to the next question, as a reminder, to ask a question, please press star 1. The next question. comes from a line of Christian from UBS. Please go ahead.

Hi, thank you very much. Can I ask you, the load factor you had in June showed a sequential deterioration versus the prior months, which was a larger deterioration than we were seeing in the other airports reporting the load factor. So I was wondering if you can comment if there was anything there, because usually when, I guess you also said it earlier, when you see a lower load factor, That may mean demand is slowing down a bit. So that's the first question. I guess the second question, the OPEX performance in aviation was better than I thought at least. So I guess I think you made some comments that the OPEX in the second half should be higher than the first half, but could you elaborate a little bit on this? I know recently you had also this bonus payment for the employees. other moving parts, just to get a feel of how much larger the OPEX should be in the second half in Paris versus the first half. And apologies, just a technical one. You mentioned in retail you have this 38 million headwind to EBITDA in the first half, which relates to lower energy sales and the infra tax. Just for the sake, for the second half, should it be another 40 million headwind, or is it a bit less or more, or any color that you could help us with. Thank you.

So thank you for your question. So about the load factor, in fact, we can see a slight decline. In fact, usually we can see that it's a testimony demand slow down, but all in all, when I try to answer the question just before, we can see that all the airlines try to improve this low factor by stimulating demand through pricing, and for us, one passenger has the same impact in our P&L than another passenger. All in all, at the end of the day, we can stabilize the load factor, and we have to monitor that. The key element for us is the fact that we have an international passenger or domestic passenger, but all in all, we don't expect a huge impact due to that. The improvement of load factor is not a huge issue for us. For your second question about the OPEX, clearly, in fact, we try to monitor our OPEX in Paris, but also in TAV. We have the both in our account. In Paris, the main part of the increase due to the OPEX is the infratax. for 64 million euros for the first half, for a total of 120 million euros for this year. But we have also, besides the tax, we are expecting the experiencing OPEX increase in EVP mother company for around 60 million euros. This is driven notably by staff costs for 30 million euros due to recruitment and salary increase but also electricity costs for €10 million and subcontracting costs for €16 million. We expect these effects to continue in the second half in line with our guidance, with its confirm, as I said, and our EBITDA going at least 4% this year. So, in terms of effects, we are in line with our expectations. With the infratax, so remember that for the infratax, we have for the month a claim with the Constitutional Court. We have a specific hearing at the beginning of July with all the 14 taxpayers of this time. Tax included us. Our arguments are perfectly aligned. And we now wait for September 12, which is the deadline for the decision of the Constitutional Court. The Constitutional Court is a supreme authority. There will be no further recourse to its decision. To InfraTax, remember that we have an impact in the regulated revenue, but also in the non-regulated revenue. of the impact of the regulated revenues, specifically for the aeronautical fees, are offset by this year, and we try to offset the other part the next year in 25, 26. Thank you very much.

Just to confirm, the electricity sales in retail, you mentioned this was a headwind year over year. You had less electricity sales, a headwind to EBITDA in retail. Would this repeat also in the second half, I would guess? Or would you have a similar, this 40 million headwind to your retail EBITDA year over year in the second half?

No, no, it's a specific one.

Thank you very much.

But we have the same impact for this year.

So 80 million in total, the head year-over-year in the bridge in retail EBITDA, 80 million lower year-over-year.

Globally, yes. We check and we come back. Thank you. I think so. Thank you.

As a reminder, if you would like to raise a question, please press star 1 on your telephone keypad. The next question. It comes from a line of Elodie Howe from JP Morgan. Please go ahead.

Hi, thank you for taking my question. Good afternoon. Maybe to start with, if you could give us your views on the potential impact on ADP from the current political changes at the moment in France, if you have different scenarios in mind or if you think that there is no impact to expect whatsoever because the share price reacted a little bit on ADP. since the snap election. So what could be the bear or bull case scenario? Second, if you could give us, if there is an update to give us with regard to discussions with the regulator on tariffs for next year and potential agreement on the regulated WAC and then potential ERA4. And if I can squeeze in the last one, it's technical, but the Gill and Gall non-cash expense, when do you think you'll give it to us.

Thank you. I'm not sure that the political situation will have a short-term big impact of the company. On the day-to-day life, we have relationships with the Department of Minister of Finance, who looks after public companies, whose name is APE, Agence des Participations d'Etat. We have very, very good relationships with them, and all our external projects for growth, all our transformation projects are discussed at the technical level. So I do not feel any problem with the political situation. To be frank, the long problem perhaps could be for the government to choose a new CEO, because as you know, They've decided not to pursue with myself. And so my wish is that they will be in position to choose the good person for the 1st of January 2025. But except that, there is no fear to have with the political situation at all. For the second question, I give the floor to Philippe.

So for the question of regulation, so in fact, for the moment, in terms of regulation, we have a So more clarification for the regulatory framework in terms of level of WACC when you read the last decision. We have some color about that, and we can expect WACC at a minimum of 4.5%. without an economic regulation agreement, perhaps a little bit more when we have an economic regulation agreement, but the calculation of this regulatory work is globally in a good way to have a strong dynamic in the next few years. The second element of the regulatory reform work is moderation of tariff. The law applicable for the appreciation of the moderation criteria in regulatory tariff increase was changed at the beginning of April. It's more flexible for us because it's possible now to appreciate when we have an economic regulation agreement, the moderation on average during the regulation period. Finally, in terms of cost allocation system, we are still reviewing the allocation key. We've changed until the end of transitory period in 2025. Globally, we work Also, on our investment plan, we have some clarification in terms of visibility in terms of traffic increase. So we can try to have all the elements, all the items that we can have some good visibility to start as soon as possible to work for a new economic regulation agreement. But be careful when we start to work we cannot sign an economic regulation agreement before two years after. So that is a little bit early to work for the moment on an economic regulation agreement. However, we could be looking to start internal works on this topic possibly later this year or next year. Your second question about the merger between GIL and GAL perhaps just to to summarize and clarify the impact. It's a non-cash expense, and this non-cash expense to be booked at the merger correspond to two main elements. The first is the deletion in economic interest due to the repayment of liquidity premium and the offset of the hatchet. And the second impact is the integration of the asset of New Deal, excluding GAL, whose net value is expected to be negative, strongly negative, at the date of the merger. And this negative impact is driven by the FCCB fair value. will be estimated again on the effective merger date. This is why we cannot be more specific at this stage. It is likely to increase significantly, particularly in view of the gilt stock market valuation. Be careful, we expect a strong impact due to good news, that is the strong increase in terms of market valuation of the current company, GIL Infrastructure Limited, but mechanically the new company. This one-off will impact the net results with the basis of calculation of dividends, but nevertheless, our dividend policy also includes a floor. of free euros per share to protect our shareholders from such one-off impacting the net income. So, to summarize, we have a strong, probably a strong impact. We have to calculate this impact at the effective merger date. It's a non-cash impact, and we don't have any issue for all our shareholders due to the flow of free euros. But all in all, with this good operation, we can reveal a strong value and to reveal the fact that four years before, we bought for 1.3 billion euros 49% of GMR Airport. And when you see the value for GMR Infrastructure Limited, we can see that we have a huge jump in this valuation. Thank you, Elodie.

Thanks very much.

As a final reminder, if you would like to ask a question, please press star one on your telephone keypad. The next question comes from a line of Jose Manuel Arroyas from Santander. Please go ahead.

Thank you and good afternoon. I wanted to ask you about your willingness and ability to sell fully or partially a stake in GMR Airports when the merger is completed? Considering that ADP wants to give board representation and influence and governance over the company, what is the degree of flexibility that you have to sell partially your stake? That's question number one. Question number two is how much will you be paying for this new company, Paris Experience Group, that you have told us about today? And lastly, I'm sorry, three questions. It's about the infrastructure tax. Do you think there is any scenario where the French Constitutional Court could prevent airports like ATP to pass on the tax to the airlines and still the tax be maintained? Thank you.

Thank you. Thank you, sir, for your question. About our will to sell steak in GMA, I must say that we are a long-term investor aiming to have a confident link with the GMA family. It means that the temptation to make a coup or to make a plus-value with this stake is there. It would be a lie not to reveal you that all the investment banks of the planet are are offering us to sell a part of our stake. But on the long term, we are sure that even if the level of the stock is quite high today, there is still a room for improvement, and there is still also a need to build confidence with the family. So we want to stay at a very good level on GMA Airport Company. And today, it's not on the table to go down in the capital of this company. But it can change for you, for sure. But your question is for today. And for today, our intention is not to sell. Second question, Philippe.

Your question is about the price of Paris Science Group. So regarding this price, we have agreed with the seller to keep it confidential, so we cannot disclose, but we can see that we have the capacity to create a strong value for this new asset if we close definitely this good opportunity to create some synergy with other activities of Extreme Paris via the marketing of VIP hospitality product and communication. We have also the capacity to improve our experience through a premiumization and enrichment of the experience offering. All in all, we disclose all the details when we close the operation. Your last question is about the infrastructure tax and the the Constitutional Court. So the Constitutional Court is about the tax. It's not about the capacity for EDP to rebalance the regulatory framework. So globally, the pass-through, it's a mechanical pass-through due to the fact that this tax is a regulated OPEX. So it's regulation rules. And obviously, it's not an issue. And mechanically, we have the capacity to offset this stack in the related part of the stack. That is the key. Thank you for your question.

Thank you. Very clear.

The next question comes from a line of Nicholas Mora from Morgan Stanley. Please go ahead.

Yeah, yes. Good evening, gentlemen. Just a couple of questions. So first one, can you please help us understand a little bit, I mean, the many, many, many one-offs that you report in the first half? Maybe starting with the BDA down to the bottom line, because I think I can find five or six, but there seems to be coming from all sides, from the DNA to provision release, from the Olympics, uh to fx to associates um so if you could help us citing the the items one by night that would be very helpful and just point number two on just to understand the net debt uh because it looks optically quite high but it includes that that call and put option on the fccb um is is this going to continue i mean can you can you just help us understand what's the the core net debt excluding the ICCB, just to understand a little bit where we stand at the end of each one. And I will leave it there. I have another one on retail if we have time afterwards.

So thank you, Nicolas. So we don't have many, many one-offs. We have two main one-offs and a lot of slight one-offs. These two main, one of the first in EBITDA is clearly the Olympics and the specific OPEC linked by this game. And it's around 30 million euros, 40 million euros. Perhaps a little bit more at the end of the day, but not so huge. And the second one up is the Jordan concession, and we offset the depreciation for €152 million, with an impact on net result just for €61 million for EDP. So it's not a huge impact. In the merger, so we have to detail all the elements of the merger and the impact of this element. Globally, we have a further impact linked by the mergers, the impact of the dilution through the ratchet and the payment of liquidity premium. Thank you, Augustin. The second impact is the fact that we have the FCCB, our FCCB in Gemma Infra. And the last thing that we can see now, the first and the second elements, we can see when we have the merger. The last is the question of the derivative liabilities that we can see now with the collection and the protection. So you remember that we granted a loan to GIL last year as part of the preparation of this merger. and the loan was made under the form of convertible bonds, FCCB. We subscribed for a total of 331 million euros. Alongside the FCCB convertible bond, we granted to JMR Enterprise, not to GIL, to JMR Enterprise, an option allowing them to buy the FCCB from us at any time, any time. This is a good option. corresponding to a derivative liability. And we can see that in our net debt. And we also have a put option to general enterprise for a third party in five years, not now, but in five years, corresponding to a derivative asset. As per applicable accounting rules, these derivative instruments are included in the financial debt at their fair value, and their fair value totalled €709 million at the end of June 24, reflecting the underlying value of the FCCB itself, driven by yield share price. So when the share price of the deal grow, mechanically, we have an impact in the FCCB. However, since we will be annulled at the same time as the FCCB are repaid, we believe that the economic view of our net debt should be calculated by deducting the fair value of the derivative instrument from our net debt. The reason why we have this specific slide in our presentation. So thank you for your question, and if you want to ask your question about retail, don't hesitate.

Just on retail, in the second quarter, we haven't seen any slowdown really from the first quarter. Would you just put this on the back of still a very supportive traffic mix? Or is it just a continuation of strong progress still on X-Time, still on on Terminal One International, on the luxury and the beauty products? I mean, what's continued to work well? And also, I suspect advertising, which has picked up quite a lot ahead of the Olympics.

So the main explanation of the strong performance is the performance of fashion luxury. So it's obviously the good traffic and the good traffic, but it's also the capacity to put in front of this good traffic a good offering like the fashion luxury. And we can see mechanically with this greatest contributor to sell in our air freight shop, a good performance through this element. This growth is driven by international traffic and mechanically in our flight ships, that is flight ship terminals, terminal one, but also terminal two E or K. So global is a good performance. fashion luxury with a good mix traffic and with a good X-time implementation strategy in our two main flagships in Paris. For the head wings, we start now. We can see at the end of the first half, and we see an increase in this impact in the second half to the works in terminal 2E or K, but also the consequence of the reopening of terminal 2A and 2C. with an offering, a retail offering, less power fuel compared to Terminal 1 international. So thank you for your question.

The next question comes from the line of Marcin Joftal from Bank of America. Please go ahead.

Yes. Good afternoon. Thank you so much for taking my questions. The first one is actually on the appointment of a new CEO, if I may ask. Could you please remind us who actually makes that decision? Is it the President of the Republic or is it the Prime Minister? And when do you expect the decision to be made? And my second question is actually on the reopening of Terminal 2AC. How relevant is this terminal in terms of capacity? And do you expect... this to actually benefit your traffic, because presumably now you have more slots available for airlines. So is that really material for Charles de Gaulle? Thank you.

For the first question about the appointment of the CEO of the company, it is the privilege of the President de la République to propose to the Parliament the name of a person. And if this person is accepted by the Parliament, it means that there is less than two-thirds of the members of the dedicated commissions against this appointment. The President de la République can designate this person to be CEO of the company. That is for the delay. It is because I thought it was a good thing for the company to stabilize its governance that I have decided to explain that I will leave the company before the end of this year, helping the government to have a pressure to designate a person during the last quarter of this year. So I think we can expect that at the beginning of 2025, the company will have a new person to be CEO. That was for the first question. For the second one, Philippe?

Philippe Bouchard The second question about the reopening of Terminal 2A and 2C. So, globally, the aeronautical capacity of terminal, it's around 10 million passengers, international passengers, compared to the full capacity of Charles de Gaulle, that is around 100 million passengers. Not 100, but 80 million euros of passengers. So it's a good part of this traffic. Globally, we have a good retail offering, but not so good compared to the best-in-class, that is Terminal 1. And the SPP is a little bit lower, around 40% lower than the Terminal 1 international. Thank you for your question.

Thank you. The next question comes from a line of Graham Hunt from Jefferies. Please go ahead.

Thanks for letting me ask the questions. They'll just be two short ones. Can I just get your perspectives on the current M&A environment at the moment, particularly in Europe and Latin America? So under the ADP mother company's perspective, given activity in this sector has been picking up year to date, And then second question, just coming back to that net debt, should we consider the adjusted level as 3.9 for the half year? Is that the level we should be comparing to your guidance? And is that the level that you would consider in terms of headroom to doing M&A? Or is it the 4.2? Thank you.

So thank you for your question. For the second question, we confirm our guidance that it's not for these adjusted figures, but just for the traditional guidance of net debt of GDPR. So we don't change our guidance for that. For the first question about the M&A strategy, we target to increase overall approach going forward. And for that, we have to accelerate our M&A strategy, but through, first of all, through X-Time to try to implement X-Time around the world. And it's okay when we have this kind of acquisition like Paris-Dion group, but we try to develop this element through M&A. It's not a huge M&A like the acquisition of THD or Gemma, but it's a good M&A with relative impact. for international development through the airport activities. We are very cautious, and when we go to the international business, it's to have a strong dynamic in terms of traffic and with a huge market. So that is not really the case in the major country like in Europe. It's more the case in India, in the Middle East, in Central Asia. So our target is not Europe. Our target is to have a dynamic higher than the Parisian dynamic. And for the moment, we are open to new opportunities, but we don't have in line and to a good project to go further at this stage.

Thank you.

The last question comes from a line of Eric Lemarie from CIC. Please go ahead.

Yes, hi. Good afternoon. Thanks for taking my question. I have two. So first one, I'm actually wondering about the financial impact related to the global IT outage of last Friday. Would you need, in particular, to invest to avoid to deal with this type of risk in the future? It's my first question. I've got a second question on TAV and GMR. Could you remind us when you do expect the return of the dividend payments from TAV and GMR, what would be the triggers to... for this given distribution.

Thank you. For your first question, we don't have a strong hand-material impact. We have just 30,000 passengers, so it's not material for us. 30,000 passengers in total.

And just if I add, we didn't vote the antivirus logiciel which failed. So we were secure for that because we did the choice not to buy this logiciel antivirus. So Philippe, the floor is yours.

Yes, thank you Augustin. For your third question, for dividends for CVO expecting 26 and for GMA at the end of this decade.

Thank you.

Thank you. Thank you for being with us. I think we will find you back in a few days because I think you are keen to have details on the reverse merger, which could happen quite soon. So please be awake, and we will be happy to invite you to a new conference call very soon, very soon. Cécile, do you want to have some final remarks?

Well, it's now time to close the presentation. So thank you very much. Thank you, Gustave. And yes, we hope to speak with you all very soon. And if you have any questions, obviously, feel free to get in touch with you. We'll be happy to help. Keep well, everyone. Have a good evening. Thank you very much.

Thank you for joining today's call you may now disconnect your lines.