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.

Ladies and gentlemen, if you wish to ask a question, please dial pound key 5 on your telephone keypad to enter the queue. Two questions at a time should allow all of you to dialogue with the management. The next question comes from Graham Hunt from Jefferies. Please go ahead.

Yeah, thank you very much. I've just got two questions. First one just on the ERA regulation and the opinion that we got from the ART. Could you just clarify sort of, if you can, any positions where you have moved closer to the view of the regulator, I guess specifically on cost allocation? Is there anything there that you can share in terms of what we can sort of rule out as a point of difference? Or are you still Do you still see yourself negotiating there? And then second question, just on, I wondered if you could help around how we should think about the impact on retail going into Q2 and the relative weights of the headwinds in Q1, given we only had one month of impact on Middle East travelers, but then the FX unwinds for Q2. So just if we're thinking about a full quarter of lost Middle East travelers, I guess going into what is high season into Europe, how should we think about how retail tracks, and at what point in time you would say the disruption is no longer short-term? Thanks.

Thank you for those two questions, so maybe beginning with the regulation ones. So maybe first to begin and to highlight the fact that we find the overall tone constrictive and so this is a positive signal so that we are confident to find an agreement in the expected timeline. As you mentioned, there are maybe three most sensitive topics in the upcoming discussion that we will have. with the regulator, which are highlighted in this non-binding opinion. First of all, the underlying economic trajectories. We will have to, they are asking us to make efforts on documentation, on traffic growth, on operating costs, and on investment amounts. I see it's asking for greater robustness and documentation of our central case. ensuring that efficiency assumptions are well supported. So this will be our first work in the months to come. Second, and this refers specifically maybe more to your question, the topic of allocation keys and analytical accounting. We know there was no surprise in this non-binding opinion as the regulator reiterates what they said in their 2026 TARIF decision. So we know that this is a central topic for us and a sensitive one, given actually the direct impact of regulated returns. As you've been able maybe to read through the decision, we have resumed technical war stream with airlines. And this is, by the way, noted as a positive element by the ARC. We have begun to discuss on some main pushback that were made from the ART, especially on the surface key and the access key. Having said that, divergences remain and the authority has clearly indicated that its final position will be taken in the context of the binding opinion. But as far as it will still be a key topic and our goal will be to preserve, as you know, And maybe a third element highlighted in the decision worth noting is the consistency between risk profile and the risk sharing mechanism with allowed return. As you've seen, IRT has reiterated its doctrine and its topics. Access to higher allowed return is conditional on the level of risk effectively borne by the operator. So we will now enter in a phase of discussion with the French state, but with this first step, it's already, once again, a positive and constructive tone of the regulator. Regarding your second question on SPP and the Middle East conflict impact, so maybe just remind you some key figures around that. Traffic with Middle East in 2025 represented 5.3% of total traffic in Paris, but 12% of retail sales on the same period. So we know that these are important contributive passengers. What we've seen since March on the SPP on this specific topic on Middle East reflects reduced flows with this destination and therefore a negative mixed effect on SPP. This impact at the same time has been partly mitigated by resilience in other long-haul segments and especially new increased traffic with Asia and China especially. We are, as you understood, on the central scenario of a short-term conflict and what we've seen in April is supportive of this assumption because we've seen a progressive recovery in April, so that's why we are in a position to confirm our target. maybe beyond those topics of Middle East, the main element in the SPP performance for this quarter is the fact that the comparison base is unfavorable because Q1 2025 was particularly an outstanding one and because of the FX effect when you compared the Euro between 2025 and 2026, it has appreciated of 15% on the year-on-year basis. So this is an important element in the performance of this Q1. It is of course difficult to isolate each driver precisely. For sure, FX impact is the most important one because once again SPP started softening one year ago in April 25 and weigh on the performance. Thank you.

Thanks very much.

The next question comes from Christian Ndelsu from UBS. Please go ahead.

Hi, how are you? Thank you very much for taking my question. So the first one, both of them are on the Arete decision that was published a few weeks ago. The first one, I think Arete is flagging that the way you split the capex between regulated and non-regulated, you're allocating more than 70% of the capex to the regulated side. I think they give in particular examples on the shuttle and on LISA, where you allocate 90% to 100% of the capex to the regulated side. So I guess my question is, having this in mind, do you see a good chance to review downwards your 8.4 billion regulated CAPEX plan for the next eight years? Or what are the arguments to defend the way you allocate there? The second one, also in the document Arete mentions that from February to April, there have been several workshops between ADP and the airlines in relation to cost allocation. And we know this has been going on in the past too. But what I'm curious, could you tell us a bit more about these recent discussions with the airlines? I believe these are not yet taken into consideration by Arete in their proposal. So I'm trying to understand a little bit and get a bit more color on how these discussions are evolving in terms of cost allocation. What is changing versus the past discussions or past workshops? Thank you very much.

Thank you, Christian, for those two questions which are actually linked with each other. But maybe to begin with, the first was on the CAPEX. The ERC opinion points to an over-allocation on the investment to the regulated perimeter, notably for LIZA and the connected trend, but this is once again the same topic of the cost allocating system because we are discussing of the way we allocate both OPEX and CAPEX. So at the end of the day, it's the same topic. So ERC raises question on certain investment allocation key. which have been, as you know, under active review with airlines since 2022 actually, but since the beginning of 2026 started this rejection. And as you understood, we've resumed those discussions and those topics like LISA and Connecting Trends are part of this discussion. These works are clearly ongoing. It's a little bit early to give you a proper figure on those topics. Mechanically, if we make some change in some accounting rules, it can have an impact on the way the CAPEX are allocated between regulated and non-regulated. So it would be just a mechanical review done well should we change some specific keys on the CAPEX that are part of the proposal. But at the end of the day there is no risk that the 8.4 billion CAPEX investment program is globally reviewed All in all, what's important to keep in mind is that it's a global balance. Once again, we are contemplating the topic of accounting rules at the same time with the level of work and with the adjustment factors so as to make sure that on those three elements we are really ensuring a fair return and the fair remuneration on our investment. And we are confident in our ability to find this coherent and consistent balance to allow fair remuneration of invested capital. On the second question, and this is already partially answered through the first one, but so indeed We have resumed technical work team with Erlan. The main topics we've discussed so far are related to the main pushback stated by the ART in its 2026 decision around surfaces key especially. Those works are clearly ongoing. We have not yet come to an end on this topic. Once again, what will be key for us is to make sure that we are not challenging the integrity of the dual tilt system. This is what drives our position on this topic since the beginning. And once again, to make sure that we will have a global view on all the topics and not making progress on cost allocation key without having a view on the global economic balance.

Thank you. The next question comes from Eric Lemarié from CICCIB. Please go ahead.

Yes, good morning. I've got two questions. So the first one on the saving measures you mentioned in the in the press release, the measure to deal with the current geopolitical situation. Could you remind us what kind of savings they are? And in a scenario with a further deterioration of the geopolitical situation, what can be done on your side in addition to these saving measures? I got a second question on the recent deal with Oregon GMR. And I was wondering what was the trigger explaining the deal with EMR and if there is any specific reason behind the timing of this operation. Thank you.

Thank you, Eric. So maybe beginning with your first question regarding the saving measures. Because discipline is not a one-shot action, but we have really implemented a set of measures that can be activated gradually and progressively. This covers all our assets, both in Paris, but also in our international assets. And this also covers different kinds of OPEX, to answer more precisely to your question, consumable spending, subcontracting expenses, recruitment sizing, and also support function optimization. So all these measures are triggered in waves depending on the actual revenue impact observed. This is made so as to be as agile as possible. Our objective is very clear to preserve margin and stay in our targeted EBITDA path. As you understood, once again, we are in a scenario of a short-term conflict and we are seeing signals in that sense supportive to this assumption. Should Q2 show a sign of a different scenario, we will assess the situation, including opportunity to take additional measures, but clearly we are not there yet, so it would be too early to comment on additional measures for Regarding your question on GMR, the trigger and the specific reasons for this deal, so many different reasons and a global strategic rationale for making this operation. First of all, portfolio management. The timing is fully aligned with our strategy to secure and optimize the financial contribution of our international portfolio, in line, by the way, with the priorities given by our CEO since his appointment. Second reason for this deal, we have value crystallization at an attractive valuation. As you see now this transaction implies the valuation approximately four times higher than that of our initial investment in 2020. So this is a very good signal in terms of value for this asset and why also this timing. We've noticed that there is a strong market performance of GAL. If you look at numbers, since 2025, GAL's share price has performed strongly, up 20-30%. Clearly, our long-term condition on India is strong and intact. There is no link to do this operation with the short-term geopolitical situation of traffic trends. Our long-term convictions stay clearly the same as the one when we made the acquisition back in 2020. India remains one of the most attractive long-term aviation markets globally and we are fully committed to continue our partnership with GMR and this is also the reason why we made this operation with our partner to reinforce our partnership.

Thank you.

The next question comes from Dario Maglioni from BNP Paribas. Please go ahead.

Hi. Yes, two questions for me. One, it's on the GMR deal. So, first of all, I'm happy to see this crystallization of value. You mentioned about the accounting of the foreign convertible bond. So that's the value, the fair value of the derivatives is around 570 million. That's included in the debt, financial debt, financial liabilities that you report on the balance sheet, correct? So when you will sell the FCCB, you will also reduce the debt, the financial debt, by around $570 million. Is that correct? And second question around the guidance, and I just want to understand why you're not cut yet the guidance. What gives you confidence that, you know, to keep the guidance, given that the guidance was set before really this Middle East crisis became so apparent? So, yes, what gives you confidence about this guidance? Maybe talking about, you know, the traffic schedule that you see for Paris, for Turkey, TAV, and so on. Thanks.

Thanks, Dario, for those questions. So, and thanks particularly for the first question, which is indeed very important to understand, not maybe so easy to understand, but very important to understand. we will have indeed through this operation different accounting impact. If we look more specifically to the net debt that you are asking, maybe just a while before to begin with what will happen in 2026, so that you understand the different phases of the transaction. So in 2026, reporting net debt will reflect, of course, the benefit from the 256 million euro cash proceeds received last week and but before paying dividend but this will also reflect some temporary non-cash accounting effects mainly due to the derivatives linked to the second equity trench as you understand there is a call and foot option which will have an impact in the reported net debt, but a non-cash impact. Looking forward in 2027, indeed there will be different streams explaining the evolution of the net debt. First of all, the cash inflows coming from the repayment of the FCCB and the sale of the second tranche. which represents €500 million and 82 estimated cash impact. But at the same time, exactly what you are saying, the disappearance of the derivatives linked to the FCCB because the FCCB will be repaid. So this will have a significant impact on total in the reported net debt in 2021. For your second question, so what gives us confidence on the reaffirmation of the guidance? First of all, sorry to repeat, this is a key assumption in our guidance. Our confirmation of guidance is based on the short conflict scenario. This assumes that Tensions do not materially affect the summer traffic, so summer traffic will clearly be key from that front. It also assumes that flight schedules and load factors are broadly held, and that we continue to see the progressive recovery trend that we have observed since April. And indeed, since April we have observed this gradual recovery. March has clearly corresponded to the peak impact, both in terms of traffic disruption and mixed effect and we are seeing in April improving movements and loss factor across several exposed destinations. For instance, with destination with Israel where traffic has resumed. So these trends are supportive to our view of the progressive normalization consistent with our base case. Maybe just to give you also some highlights on the summer traffic outlook because as I was mentioning it will be key in the way the year will happen. So at this stage our view on summer traffic in Paris remains broadly unchanged compared to our initial expected trajectory. We are seeing some schedule erosion in early summer, notably linked with this Middle East context, but having said that, summer schedules overall remain broadly in line with initial plans and short-term bookings are holding up. So in the current context we expect that summer bookings might be slightly delayed compared to usual, but what we are seeing today is once again supportive of this assumption of short-term conflict scenario.

Thank you.

The next question comes from Elodie Rall from JP Morgan. Please go ahead.

Hi, thanks for taking my questions. First of all, on the ART corner proposal, you mentioned a WAC of 4.6% to 5.6%. I was wondering if the low end of the range was acceptable to you and what would be a deal breaker, if there is anything that could be a deal breaker in your mind in this range. And second, on the Middle East impact and all that, I know you're not changing your guidance, but there's a lot of discussion about what could a shortage in jet fuel mean for traffic in general, not necessarily just at your airport. So I was wondering if you had any discussion on that with your airlines. I know you've seen some erosion of bootings in the summer, but should the of almost remain closed. Is there anything like a scenario that you are starting to stress at this stage? Thank you.

Thanks Elodie for this question. Indeed we have not touched upon for the moment the WACC but this is an important element of the non-binding opinion. Maybe let me just begin first. an element which has been changed in one technical evolution that is worth noting in this non-binding opinion. Maybe you've seen that the regulator has adapted its beta methodology now offering a five-year beta based on the weekly data compared to previously a two-year beta. So this explains why the range has slightly and there was an upward shift in the WAC range. You remember that it was previously 4.1% to 5.4% and they now state a 4.6 to 5.6 range. So for us, once again, this is reflective of the overall positive tone of the decision showing that there is a desire for Having said that, once again, WACC in itself is not a deal breaker. It is a global balance. So we will have a view on the WACC only with at the same time a view on the cost allocation system and the adjustment factor as the regulators say. making themselves this link between adjustment factor, risk sharing mechanism, and level of allowed return, because they are explicitly saying that reaching the top of the range requires a commensurate level of risk borne by the operator. So that's why we will be in a position to decide only if we have this global approach. So the question for us and the key element for us will be to find this right overall balance between the risk effectively borne by ADP and the level of allowed return. But in any case, we won't accept bearing disproportionate or excessive risk. This will be key for us. Regarding your second question, so on the Middle East conflict and the potential impact on the jet fuel, both maybe prices and potential shortage, so clearly at this stage, once again, we are, as you've understood and mentioned in your question, we are seeing schedule programs supportive of our assumption. Coming to the question of the impact of potential jet fuel prices increase on the traffic evolution, clearly for us it's too early to draw conclusions on the sensitivity of traffic to a prolonged period of high jet fuel prices. Recent traffic evolution has been influenced by different factors, a combination of schedule adjustment, airspace restriction, and supply side decision by airline. So the respective impact of fuel prices, potential traffic postponement and longer term capacity responses remains clearly uncertain at this stage. Of course we are closely monitoring the situation and all those developments but we clearly don't have sufficient visibility at this point to quantify or isolate the effect of fuel prices and traffic across our platform. As we are talking about jet fuel, maybe just a word on the question of potential shortages. Just to remind you that Paris airport are supplied through a pipeline network directly connected to refineries and to oil terminal in Le Havre and that the majority of crude oil feeding those infrastructure current come from North America. We are compared to others quite in a better situation and we remain vigilant of course and continue to monitor the situation but at this stage we have the fuel reserve covering several days of operations.

Thank you.

Thank you. The next question comes from Jose Manuel Arroyas from Santander. Please go ahead.

Thank you. Good morning. I have two questions. One is about the transaction with the GMR Group. I wanted to ask you in particular about the statement that you included in the press release on Thursday. Here you said that the proceeds from the sale will give you freeway for potential future development projects. I wanted to ask you what you mean by those if those may include new international M&A opportunities, including buying more shares in TAV in particular. And my second question, and sorry, it's a very basic question that I perhaps should know myself, who drafts the final ERA document? Is it the ART in isolation, or is it the ART in tandem with the DGIC? What I wanted to ascertain is how influential the ART's opinion can be in the final agreement. Thank you.

Thanks for those two questions. So indeed, regarding the cash proceeds, we have mentioned that we have a balanced capital allocation strategy and our proposal clearly reflects a choice to keep balance sheet stability and long-term financial flexibility. So we have, as you see, allocated a part of these proceeds to a shareholder with a special dividend coming that will be proposed to the General Assembly in the month of May and the rest of the proceeds will be dedicated to deleveraging and once again keep this balance sheet stability and potentially give room of man-over potential future development. Having said that, our development strategy and our potential target for M&A have not changed compared to what we were saying previously to this opportunity. We have a selective and opportunistic approach when it comes to development. Opportunity must fix our strategic footprint, must offer long-term value creation, and of most importantly be compatible with our balance sheet, cash flow and credit strength objective. So scale for its own sake is not a target and so there is no change from that perspective. Regarding your second question, I hope I understand it correctly but so I will start an answer but don't hesitate to precise if it's not answering your question. question regarding the role of the regulator. Clearly, we were here in a step of a non-binding opinion. So it gives colors for us and gives a roadmap for the next month to be in a position to sign the economic regulation agreement. But for signing with the French states, with the DJC, this final agreement, we need this time to have a binding opinion from the regulator which is clearly mandatory and if there is not a yes coming from the ART, the French state won't be in a position to sign the agreement. So for the time being we are clearly in the expected timeline. The ART has also confirmed this is also a positive element in its decision expected schedule. So this is to say a consultation, a new consultation on a revised draft of the consultation of airlines in September following which the French state will have to ask the regulator for the binding opinion. The regulator will have two months to answer, and here we will need their approval to be in a position to sign the agreement.

Thank you, Christophe.

Ladies and gentlemen, as a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. The next question comes from Marcin Wojdel from Bank of America. Please go ahead.

Yes, thank you very much. My first question relates to your stake reduction in GMR. You mentioned in the release that you have no intention to reduce your stake further, but I'm just wondering, is there any legally binding lockup with the Indian Stock Exchange, perhaps, or have you committed to a contractual lockup with GMR Group, and could you perhaps clarify what would be a duration of any any potential lockup. Question number two, if you allow me, it's on X time Paris, so retail revenue per passenger, which I believe was minus six in Q1. Could you explain what was the main reason for that reduction? Is it the impact of the Middle East or is it driven by currency impact, weaker US dollar? And what gives you the confidence that the run rate will improve in the rest of the year on retail. Thank you.

Thanks, Marcin. So for GMR, for your first question, and indeed the statements we made that we do not intend to make additional sales, there is no legal requirement and no lookup, formal lookup in our agreement with GMR. It's just an intention of the management, but for us it was important to highlight this because once again, if we are doing this transaction, we want to... Our long-term conviction on India is strong and intact, and we want to keep a strong exposure to this growth. This was the rationale of the operations from G1. It stays true even after this crystallization of value and a minority state. But clearly no legal lookup and so no explicit duration around that. Coming to your second question in terms of retail, So indeed the SPP was down compared to 2025. It's really difficult to isolate each driver precisely, but clearly if we have to keep in mind one most important element, this is the FX rate. SPP clearly started softening a year ago in April 2025, coinciding with a sharper row, not only against USD by the way, but also against the Japanese and Chinese currency, which are, as you know, all critical currencies for key long-haul customer segments. So clearly the comparison base from that perspective is unfavorable for a 2026 Q1 performance. Having said that, on top of the FX impact, Also, the comparison base is not favorable because Q1 2025 delivered historically high SPP levels, setting a particularly elevated benchmark above 33 euros. So what we are seeing for the first quarter of 2026 compared to 2025 is not necessarily representative of the rest of the year because this creates really a pronounced base FX which mechanically amplifies the apparent decline in 2026. In addition to that, there are also a combination of exogenous headwinds that contribute to this evolution. So apart from this FX effect, there is also the slowdown in luxury demand that we have already been seeing for the last quarter of 2025. And, of course, the less favorable Middle East traffic mix, because as I was mentioning earlier on, those passengers are particularly contributive in terms of retail sales, and 12%, just to remind you, the figure of total retail sales in 2025. So taken together, These elements mean that the current SPP performance should be viewed as a cyclical and contextual dip rather than a structural deterioration, and our long-term fundamental clearly remains intact.

Last reminder for the Q&A session. If you wish to ask a question, please dial pound key five on your telephone keypad now. We will wait a few seconds to give you a chance to participate.

Okay, so if there are no further questions, I will say that it's now time to close the call. So thank you again everyone for having logged into this conference. Our next planned quarterly publication will be on July 29th with the 2026 half-year results and in the meantime, of course, Feel absolutely free to get in touch with Elliot and I in the investor relations team for any follow-up questions. And with that, enjoy the rest of the day. Thank you.

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