Aeroports De Paris Sa

Welcome to Group ADP 2026 First Quarter Revenue Presentation. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now I will hand the conference over to Cecil Combo, Head of Investor Relations, to begin today's conference. Please go ahead.

Thank you and good morning everyone. Thank you for joining us for our 2026 first quarter revenue presentation. Before we begin, I would like to remind you as usual that today's discussion may include forward-looking statements which are subject to risks and uncertainties that could cause actual results to differ materially. For more details, Please refer to the disclaimer included in our press release and on slide 34 of our presentation. I will now hand over to Christelle de Robillard, Group CFO, who will take you through the prepared remarks before we open the call for questions during the Q&A session. Christelle, over to you.

Thank you, Cécile, and good morning, ladies and gentlemen. Thank you for joining us to discuss our 2026 first quarter revenue. Let me first turn to slide 3 for our key highlights, starting with traffic. We delivered solid momentum in Q1, with group traffic up 2.3% to 84 million passengers and Paris traffic up 2.6% to 24 million, demonstrating the resilience of our platforms, despite reduced passenger flows with the Middle East since March. Consolidated revenue reached close to 1.5 billion euros, then slightly year-on-year. Ex-time pari SPP declined to 31.5 euros, mainly due to an unfavorable FX impact, but also softer middle east traffic against a particularly demanding comparison base in Q1 last year. Beyond the numbers, we continue to deliver on our strategic priorities. Service quality remains a strong focus, as illustrated by SkyTracks reaffirming our ranking in 2026. On the regulatory front, the 2027-2034 ERA process is firmly on track, with a non-binding opinion from ART adopted on April 9th. Regarding the management of our international portfolio of assets, we made meaningful progress with the three-year extension of the Santiago Concession in Chile, the sale of a 3.4% stake in GMR Airport, and the closing of the Ambassador Disposal. Overall, despite a challenging external environment, execution remains strong and we fully confirm our 2026 financial targets. A quick word on service quality with Skytrax rankings for 2026. 10 airports from Group ADP ranked in the global top 100. Paris-CDG was named Europe's best airport for the fifth consecutive year and ranked sixth worldwide, while Paris-Orly was again recognized as Europe's best regional airport. This distinction clearly reflects the long-term commitment of our teams and reinforces our ambition to be a global reference in airport hospitality. Let me now briefly walk you through the IRC non-binding opinion on our future economic regulation agreement shown on slide 5. Overall, we view this opinion as constructive and broadly in line with our expectations. Importantly, the IRC confirms that the multi-year era is the right framework for Group ADP, given the scale and duration of the Paris Investment Programme and explicitly recognizes that an 8-year contract is justified by our industrial plan. We read this opinion as the regulator's roadmap for convergence ahead of the binding opinion. The ART has deliberately adopted a non-prescriptive, principle-based approach at this stage, which we see as a positive signal in terms of process. As expected, the ART identifies some key workstreams to be addressed over the coming months. On return, the ART provides a clear framework. It estimates a rack range of 4.6% to 5.6% under current assumptions and clearly highlights that access to the upper end of this range is conditional and balanced and credible with sharing. Importantly, the IRC also reminds that the WAC will be reassessed at the time of the binding opinion, taking into account prevailing market conditions. Following this simple opinion, the process now enters an active phase of discussions with the French state aimed at drafting a revised version of the ERA. In parallel, we are also continuing technical and economic cross-stream with airlines and discussions with the regulator. During this process, we will calibrate how the IRT recommendations are reflected in the revised draft while ensuring that the overall framework remains balanced and does not result in ADP bearing disproportionate or excessive risks. Our objectives remain unchanged to obtain a binding opinion from the IRT in Q4 2026 with entry into force of the ERA on January 1, 2027. Let me now come back to the transaction we announced last week regarding the partial disposal of our stake in GMR Airport Limited, which is summarized on this intentionally comprehensive slide. This transaction is a partial monetization designed to crystallize value while preserving significant economic exposure to the long-term growth of Indian aviation. In terms of transaction structure, we have put in place three separate arrangements with GMR Group. First step, completed on April 23rd, we sold the first equity trench of 3.4% to our co-shareholder for 256 million euros. Second, we implemented options in order to sell a further 3.9% by April 2027. And third, We agreed on the sale to GMR Group of the GAAL-issued FCCBs. This will be done by March 2027, allowing an early repayment of this loan, which had been implemented to accelerate the merger listing of GAAL. This structure provides us with both immediate liquidity and visibility on future cash inflows, while ensuring an orderly rebalancing of the GAAL shareholding structure. Turning to the key outcomes, there are four messages we want to highlight. First, we are rebalancing our economic exposure in GAL. We reduce our exposure in a disciplined way while retaining a significant upside alongside our partner in a market with very strong growth prospects. Second, our strategic partnership is fully preserved. Our governance rights and co-promoter status in GAAL remain unchanged and we continue to view this partnership as a long-term strategic asset. Third, the transaction represents a material crystallization of value, implying roughly a four times uplift compared to our entry valuation in 2020. And fourth, this is fully consistent with a balanced capital allocation strategy with up to around 924 million euros of post-tax cash proceeds expected by 2027, supporting both deleveraging and shareholder returns. This is why we have proposed a special dividend already in 2026. Finally, a word on the expected accounting impacts. Details are specified on the bottom part of this slide. The main message is, in 2026, Reported net debt and P&L will reflect some temporary non-cash accounting effects mainly related to derivatives, which do not reflect the underlying economics of the transaction. In 2027, as the FCC-BR reimbursed and the second equity insurance is completed, we expect a structural and positive impact on reported net debt driven by cash inflows and the disappearance of this accounting effect. Let's now dig into the numbers for the first quarter. I am now on slide number 8 with traffic. Q1 2026 demonstrates the resilience of our platforms despite a challenging geopolitical environment. At Paris airport, traffic grew by 2.6%. Traffic loss on Middle East routes was partially offset by higher traffic towards Asia and China, both showing particularly strong momentum. At group level, traffic increased by 2.3% to nearly 84 million passengers. TAV continued to benefit from strong performance at its local assets, while international airports showed more moderate growth. At GMR, traffic was broadly stable, replacing temporary operational and geopolitical headwinds, but with solid underlying demand. Finally, traffic at Amman was impacted by the Middle East conflict. Let me turn to the next slide which focuses specifically on this topic. You can see on slide 9 a focused update on the impact of the Middle East situation and how recent traffic trends have been evolving. In March, we recorded the peak impact. Traffic was affected across several platforms by airspace closures and airline schedule adjustments. In Paris, overall traffic remained solid although Middle East flows declined sharply. SPP was impacted by mix and FX effects, again, against a challenging comparison base. At TAV, impact on traffic was benign, except for Georgia. Conversely, Amman airport was the most directly exposed, with traffic down around 41%. In India, both Delhi and Hyderabad airports were impacted. daily proved more resilient, supported by increased frequencies from international carriers. In April, based on preliminary data, we are seeing signs of a gradual recovery, which remains our central scenario going forward. Looking ahead, short-term bookings remain supportive and summer schedules are broadly stable versus initial plans. At the same time, we are proactively deploying cost-discipline measures to preserve margin and financial flexibility. Based on trends observed so far, the saving measure implemented, and assuming a scenario of short-term disruption, we confirm our 2026 financial targets. Turning to Exxon Paris, sales per passenger reached 31.5 euros in Q1, down 5.7% year-on-year. This reflects a challenging retail environment driven by a global slowdown in luxury demand, an unfavorable FX effect linked to Euro appreciation, and a particularly demanding comparison base as Q1 2025 reached historically high levels. In addition, ROX in Terminal 2 EK intensified compared to last year and weighed on performance. Since March, SPP has also been impacted by the Middle East situation, which affected high contribution passenger flows and the overall traffic mix. Overall, we view the current SPP performance as a result of temporary and well-identified headwinds in a still-disrupted context rather than a change in the underlying long-term fundamentals of the Ex-Time Parry model. On slide 9, this bridge shows the evolution of group revenue in the first quarter then down 0.9% year-on-year to reach €1.5 billion. This evolution reflects contrasted dynamics across segments. In the aviation segment, revenue grew by €24 million, supported by traffic growth and the tariff increase of 4.5% implemented in April 2025. This positive contribution was partly offset by the retail and services segment, which declined slightly, reflecting the well-identified headwinds we discussed earlier compared with a strong Q1 last year and an accounting effect that uplifted Q1 2025. At the international level, revenues were than 27 million euros. At TAV, this reflects contrasting trends between service companies and airport assets, noting that in Almaty, revenues were impacted by a change in the status of fuel activities. Overall, revenue evolution reflects temporary and well-understood factors, with resilient operations and continued discipline across the portfolio. To conclude, our 2026 outlooks remain unchanged and is built on discipline and prudent assumptions. including short-term conflict-related disruption and the saving measures implemented. Our capital allocation priorities remain unchanged, with disciplined capex, strict leverage control, and a clear commitment to our dividend policy. Overall, we remain confident in the resilience of our business model and in our ability to deliver our 2026 targets despite the challenging environment. With that, let's now open the line for the Q&A session.