Aeroports De Paris Sa

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Good morning, everyone, and thank you for joining us for our 2026 half-year results presentation. I'm here with the management team, Philippe Pascal, chairman and CEO, Justine Coutard, deputy CEO, and Christelle de Robillard, group CFO. Philippe and Christelle will first go through prepared remarks on H1 and on our economic regulation agreement project before we open the line for a Q&A session. 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 the last slide of our presentation. And I will now hand over to our Chairman and CEO, Philippe Pascal.

Thank you, Cécile, and good morning, ladies and gentlemen. Thank you for joining us to discuss our 2026 half-year results and progress on our Economic Regulation Agreement project. Let me first start with the key message for the first half on slide 3. The first half reflects two realities. First, the operating environment became progressively more challenging While the direct impact of the Middle East conflict has gradually faded since April, its indirect consequences have spread more broadly affecting traffic rules and airline behavior and ultimately demand trends. Second, the group demonstrated resilience. We reacted quickly by implementing targeted cost and efficiency measures This section will help protect margin while preserving our strategic investment and our quality of service. At the same time, we continue to deliver on our industrial roadmap and strategic priorities. We completed the partial monetization of GMR Airports, crystallizing 257 million euros of value, while continuing to prepare the group's next strategic plan. We also reached an important milestone on the future economic regulation framework, which will provide greater visibility for the 2027 to 2034 period. I will come back to this important topic in the last part of this presentation. As a result, while we are revising our traffic-aimed big-bag items to reflect the current environment, we remain confident in the strength of our business model and in our ability to deliver long-term value creations. Price for all shows that despite the challenging environment, we delivered key investments. In Paris Saint-Laurent, we commissioned a new baggage-on-link system at Terminal 2. In India, GMR added two airports to its portfolio. And in the US, PS opened two new premium terminals. These achievements illustrate our continued focus on operational efficiency, growth, and customer experience. Turning now to our first art present on slide 5. Revenue increased by 1.6% while recurring EBITDA remains above 1 million euros and attributable net income reached 312 million euros supported by the partial modification of GMR report. These numbers show that despite a significantly more challenging environment, we deliver resilient results, took decisive action to protect profitability and continue to execute our strategic priorities. will now take you through the details of this result.

Thank you, Philippe. I'm turning now to Paris traffic on site 7. Traffic grew by 0.5% in the first half. The direct impact of the Middle East conflict peaked in March and has since progressively faded. However, this improvement has been offset by softer demand across other international destinations, particularly long-haul. Combined with higher fuel costs, higher ticket prices, and more cautious airline capacity deployment, this led us to adopt a more prudent view for this second half. This is the rationale behind our revised full-year traffic outlook of around 0.5% growth. Looking now at our international assets, traffic remained broadly resilient across the portfolio, although performance varied by geography, reflecting both different exposures of each asset to the current geopolitical environment and specific operational headwinds. At CAE Airport, traffic grew 1.3% in the first half, GMR traffic grew by 0.6% while AIG was more significantly impacted by the Middle East conflict with traffic down 15%. Turning to our commercial performance on timelines. Ex-time Paris Spencer Pax, €2.31 in H1. Reflecting resilience despite a still social luxury environment, the adverse currency effects from stronger euro in Q1 and the impact of rocks in Terminal 2EK. Encouragingly, SPP remained broadly stable year-round year in the second quarter as the adverse ethics impact that weighed on SPP in Q1 is materially in Q2. Turning now to revenue, slide 10. Group revenue increased by 1.6% to 3.2 billion euros, demonstrating the resilience of our diversified business model. In Paris, aviation revenues continue to benefit from tariff increases in the first quarter, as well as traffic growth, which remained slightly positive in the first half. Retail and services proved broadly resilient, despite the more difficult environments. In international assets, strong revenue growth at CIG airports more than offset the impact of the conflict in Jordan on AIG. Overall, the diversity of our activities enabled us to continue growing revenue despite the challenging environment. Turning now to EBITDA slide 11. Recurring EBITDA stood at just above 1 billion euros and down only 1% every year. We maintain tight cost discipline while continuing to invest in the business and absorb inflationary pressures across the group. In addition, the majority of the benefits from our cost-saving measures are expected in the second act. Moving on to slide 12, net income reached 312 million euros, more than three times last year's level. This strong increase was primarily driven by the 250 The key takeaway is that we continue to generate value brought through the resilience of our operations and through active portfolio management. Now, on slide 13... Net debt is totalling 9.1 billion euros at the end of June, corresponding to a leverage ratio of 3.9 times recurring at ETA. Our financial position is robust. At the end of June, our net debt position reflects continued investment in the business, the annual dividend payment for 3.8 euros per share, as well as the non-cash accounting impact of GMR-related options, which partially offset the cash proceeds from the transactions. Let me now come back briefly on the past short disposal of our second GMR airport on flight 14 to emphasize one point that might have been overlooked by the market. This transaction is not only about crystalizing value from GMR. It is also a significant deleveraging transaction. Compared with our net debt at the end of 2025, once all three components of the transaction are completed and all else being equal, Net debt would be reduced by more than 1.3 billion euros and leverage would improve from 3.7 to 3.1 times every year. At the same time, we preserve our strategic relationship with GMR and maintain significant economic exposure to India's long-term growth potential. In other words, we are at the same time preferring value, reinforcing the balance sheet, and we turn in access to one of the most attractive aviation growth markets in the world. That combination is what makes this transaction particularly compelling for ADP shareholders. Let's now turn to our 2026 outlook. As discussed throughout the presentation, we are operating in a more challenging environment. Type 16 illustrates how we are responding to it. We have deployed targeted cost-saving measures across the group Focusing on discretionary spending, outdoor services, hiring discipline and expenditure prioritization. These actions are expected to deliver between 40 and 60 million euros of savings in 2026 with most of the benefits materializing in H2. Importantly, we are protecting profitability without catching strategic investments or reckoning quality of service. In many respects, These actions are also accelerating the efficiency journey embedded in our future economic regulation framework. Let me conclude with our updated outlook on slide 17. With the prolonged Middle East conflict, our assumptions now reflect a more cautious traffic scenario for the second half. We now expect Paris traffic growth of around 0.5%, exchange rate per passenger will be stable at 32 euros, and recurring EBITDA in the range of 2.3 to 2.35 billion euros, including 40 to 60 million euros of saving measures. At the same time, we are maintaining our investment program broadly unchanged at around 1.45 billion euros of capex at book level. We continue to target a disciplined balance sheet with net debt expected at around 3.8 times recurring EBITDA. All in all, the key message is simple. We navigate the current environment with discipline, to protect profitability in the short term, without compromising our long-term growth. And with that, let me hand back to Philippe, who will provide an important update about the Economic Regulation Agreement.

Thank you Christelle, and let me now turn to the Economic Regulation Agreement, starting with slide 18. We have reached an agreement with the French state on the parameters and provisions of the future economic regulation agreement. This is a decisive milestone. This updated project addresses the main issue raised by the Regulator and reflects the key recommendations for their April non-binding opinion, and it provides the visibility needed to move forward with the final phase of the process launched in December. It is the result of several months of negotiation with the French Civil Aviation, a continued dialogue with airlines, and extensive technical works with the regulator. In all, while a few regulatory steps remain ahead of us, including the airline's formal consultation and the ART binding opinion, we now have a clear and credible This agreement reiterates the key fundamentals of the project presented in December. First, it confirms an ambitious investment program aimed at enhancing the competitiveness of Paris Airport, improving operational efficiency, reinforcing quality of service, and accelerating decarbonization. It ensures a balanced economic framework combining price moderation for airlines and a fair return on invested capital. Since the proposal we issued last December, we took into account the recommendation of the regulator. We listened carefully to airlines and engaged in extensive negotiations with the civil aviation.

As a result,

We confirm a programme of 8.2 billion euros regulated investment over an unchanged 8-year duration, supported by a strong productivity commitment of around 650 million euros annual savings accumulated over the duration of the contract, and a balanced tariff trajectory capped at CPI plus 2.1% points on average. The revised framework also relies on updated traffic assumptions, updated allocation keys that better reflect infrastructure use, and redesigned risk-sharing adjustment factors. These changes directly address regulatory recommendations and airline concerns, and we believe the contract now provides a robust basis of ART review. The parameters agree with the French state support the convergence of the regulated Roche with the regulated WACC at 5.8% in average over the duration of the agreement. One important outlook today is the confirmation of the 8 years duration of the agreement. I am now on slide 21. This is critical because the transformation of Paris airport requires long-term visibility and a stable framework to deliver an unprecedented investment program. The agreement therefore confirms the planning origin on which our industrial roadmap is built and it also establishes the necessary safeguards associated with such long-term commitments including a mid-term revenue mechanism and revision clause. The result is a framework that provides both the visibility needed to invest and the flexibility required to manage long-term uncertainty. Let me now turn to the weighted average cost of capital for the regulatory scope, which is the central component of the agreement. As we require by law The framework must ensure fair remuneration of the capital invested within the regulatory perimeter. Consistent with the principle, our objective remains for the expected regulated roadshed to converge, on average, over the duration of the contract with the regulated WAC. Importantly, the level of WAC retained in our proposal is fully consistent with the ART methodology. Based on the last market parameter and applying the regulator's own approach, the result is an updated range of 5.1 to 5.9%, with our proposal set at 5.8% in the upper part of the range. We believe this positioning is consistent with the framework set out by the ART, in its opinion published last April. The economic regulation agreement lasts eight years and compared with the initial proposal issued in December, the revised framework increases our exposure to a number of operational risks while maintaining protection against exogenous risks. Therefore, we believe that a regulated WACC of 5.8% appropriately reflects the duration and risk profile of the contract fully in line with the ART methodology. I will now hand over to Christelle regarding the other parameters of this agreement.

Thank you Philippe. Another important evolution compared with the December proposal is the allocation keys used to split costs and assets between the regulated and non-regulated businesses. This was a key issue identified by the regulator. We introduced two main changes. First, a wider recognition of mixed-use areas within terminals, and second, a more granular allocation of transfer passenger infrastructure based on actual usage. The result is a transfer of around 50 million euros of OPEX and 64 million of regulated assets out of the regulated perimeter. ARC had estimated an allocation bias of around 50 million euros to 100 million euros of OPEX in its approved opinion. Therefore, the adjustment is very much in line with the regulator's assessment and addresses one of its main expectations. Turning now to OPEX discipline. Our project relies on an efficiency plan with aim to deliver around 140 million euros of annual cost savings by 2034. This represents around 650 million euros of cumulative savings over 8 years. Despite higher business as usual cost trajectory compared with the December proposal, and this is driven by the slightly heightened traffic growth rate, regulated OPEX are expected to remain broadly unchanged by 2034. The main savings levels remain unchanged. Better procurement, more efficient operations and maintenance, improved support functions, and continued control of test costs. All those initiatives will allow us to contain regulated OPEX growth at around CPI plus 1.3 points. Let's now move to traffic. We included a few adjustments to our assumptions. First, a lower passing point. Our revised 2026 outlook Mechanically, it adds around 0.2 points to the average growth rate over the period. And second, we have also refined our assumptions regarding the impact of SaaS deployment and other price-related regulatory effects on demand, and we are expecting a more limited effect compared to our initial assumptions. As a result, we now expect average traffic growth of 1.9% per year between 2026 and 2034. Moving on to our industrial project. Since December, we have refined project cost estimates, completed additional technical studies, incorporated feedback from procurement consultation and align, and finalized a number of studies regarding the design of some projects. As a result, we confirm 8.2 billion euros regulated investment with the main project maintained, reflecting our unchanged ambition to improve Operational efficiency of our platforms, enhance quality of service and reinforce competitiveness of both airlines as the Paris has done. Let me now turn to the airport charges trajectory. The revised Paris Pass remains controlled with CPI plus 4 points in the first two years, followed by CPI plus 1 point, 5 points for the rest of the agreement. This trajectory supports the convergence between regulated Rocher and regulated WAC on average over the 8-year period. And I would also like to remind you that the signing of the ERA will validate at the same time the 2027 tariffs, implying an increase of CPI plus 4 points from 1st April 2027. Overall, the agreements provide for a moderate tariff increase, capped at CPI plus 2.1% The next slide illustrates the expected convergence between regulated Roté and regulated WACC at 5.8% on average over the life of the era. This trajectory is not based on ADP assumptions alone. The underlying business plan has been exclusively challenged by both the state and the regulator including traffic, investment and execution assumptions. The resulting economic balance has been calibrated to deliver this convergence while adjustment mechanisms help preserve it over time. As can be seen on the graph, we expect convergence from the very beginning of the contract. This is supported by the front-loaded tariff trajectory with the 2027 tariff validated upon signature of the ERAP. Overall, we believe this is a robust and credible path towards a fair remuneration on invested capital. Let me finish with the adjustment factors that help secure the long-term economic balance of the contract. Following IRC's recommendation, the revised framework is simple. ADP bears more of the risk it can influence or manage through its operations, traffic, Operational Performance and Project Delivery while remaining protected against major external risks, particularly fiscal risks. These mechanisms help preserve the contract's economic balance and support a fair remuneration of invested capital over time. Together with the review clause, they provide the flexibility and protection needed for an eight-year agreement. With that, I will hand back to Philippe

Thank you Christelle. So today's agreement represents a major milestone in the Economic Regulation Agreement process. There are three reasons why we believe uncertainty around this process has been significantly reduced. First, our revised contract addresses the key concerns raised during the review of our initial proposal, and we now see a credible path towards the signature of contract before year-end. Second, the industrial project and its economic fundamentals have been confirmed. Third, the contract provides a credible path towards convergence between regulated Roche and regulated WAC and at 5.8% on average over the eight-year period Fully consistent with the methodology of the French IELTS. More broadly, this agreement supports the most ambitious investment program ever undertaken at the Paris airport, with 8.2 billion euros of regulated investment over 8 years. And just as importantly for investors, it preserves the group's strategic flexibility with a confirmed capacity to invest In future, non-regulated growth opportunities remain. Maintain our dividend policy of 60% payout ratio with a floor of 3 euros per share. And preserve our current credit profile. Looking ahead, the next steps are well-identified. Consultation of airlines in September. IFT binding opinion later in the year and our unchanged objective of implementing the economic regression agreement on January 1st, 2017. We therefore approach the next phases of the process with confidence. With that, let's open the line for questions.

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 Christian Ndelsu from UBS. Please go ahead.

Thank you very much for taking my questions. Both of them are on the economic proposals. The first one, a few months back, Arete suggested that in order for the walk to be at the higher end of the range, they would like to see more risk taken by ADP. And I think in slide 30, you bring a few references to the changes to the adjustments factor that you've made versus your first proposal. Could you elaborate on these changes and what gives you confidence that the changes you made on the risk adjustment factors are sufficient to allow a WAC at the higher end of the range. And secondly, just from a scenario perspective, could you tell us what's the tariff, the CPI plus 2% tariff sensitivity for a 50 basis points lower WAC than in your base case, just for us to visualize if by any chance the WAC ends up being a bit lower, what does it actually mean? for the tariff you proposed today. Thank you.

Well, thank you for this question. So, for the first question, in fact, we are fully in line with the IRTM methodology with a range of the work and the fact that when we have an economic regulation agreement, mechanically, We are in the high part of the range. And we are also very comfortable with a work at 5.8% due to the risk that we have in our economic regulation agreement. That is a business risk and not an exogenous risk. And just to remind, the main risk that we have in this proposal, that is not the proposal of EDP, but the proposal of the French state and EDP. The first risk is the traffic risk. We increase slightly the traffic growth trajectory to try to have a good and well balance in our business approach. The second element is the investment risk that we increase with a new mechanism like remuneration to deliver costs of certain major projects in addition to existing schedule-related incentives. And the last but very important risk is the service quality incentive that we have reinforced with a larger penalty in case of underperformance. At the same time, that is very important to understand, it's the protection against tax-related change remain in place. So, we don't have exogenous risk in term of tax. Change in the corporate tax are covered at 75% through the expensive accounting for ASCAPEX. and the taxation of any kind factors allowing to offset any impact from an evolution in tax framework other than corporate tax above 5 million euros. So, a good balance between business risk and the over-risk that we also cover. Today, the proposal is calibrated around a 5.8% conversion target. which we believe is consistent with French regulator methodology and the revised risk profile of the contract. So, after good negotiation with the Civilization Administration, after good dialogue with airlines, but also after extensive technical work with the regulator, we are fully confident. For the second question.

Yes, maybe on the second question regarding the sensitivity of tariff trajectory and WACC. Just to say that the sensitivity indicated in our December proposal remains valid. It was mentioned that 10 bits of Roche or WACC equals plus 0.7 tariff increase. On average, I really insist on the on average because, of course, it depends on the timing of the tariff increase. But to have just a colour, it's this kind of sensitivity. Today the proposal is calibrated around a 5.8% convergence target, as Philippe mentioned, which we believe, once again, as Philippe clearly explained, is consistent with the regulator methodology and the risk profile of the contract.

Thank you.

The next question comes from Tobias Fromm from Bernstein. Please go ahead.

Good morning and thank you for taking my question. We do understand that the agreement would be with the state after all, but just because the state has issued its opinion and you published this joint proposal, we were just wondering, what do you think is the leverage on the regulator here? Obviously, you will enter into agreement with the state, that is clear. It's more like the regulator is entirely independent and has had a lot of sort of criticism on your first proposal. In April, how much leverage do you think this joint proposal will put on the regulator? Thank you.

Thank you. So, we cannot prejudge the regulatory decision and we fully respect the French regulatory independence. But with this new project contract, we are designing. and address all the main issues identified by the French regulator Simple Opinion in a print. So it incorporates change to allocation key. We also have worked with the risk sharing arrangement and we have a significant technical discussion during this last month including regarding the update of the WACC with the current market parameters. So, all in all, we believe the contract provides a robust basis for the French regulator review and we are, obviously, we have to wait the formal consultation of the airline, we have to wait the audition, with the French regulator and the final review. But now with the French state, not just the EDP, we consider that it's a very good balance with all the elements that we can have to finalize our agreement for the end of this year. Thank you.

The next question comes from Eric Lamari from CICCIB. Please go ahead.

Yes, hi, good morning. I have two questions. The first one on India. I was wondering whether the recent social movement in India, you know, the cockroach political protest had any impact on your traffic there and whether the recent opening of the Noida airport close to Delhi had any impact as well or not. And a second question on traffic in India. In Paris, did you see any negative impact from the implementation of the EES in Europe? What's your view on the future steps regarding the EES and the potential impact on Paris traffic? Thank you.

Thank you, Eric, for your question. So the first one regarding India traffic, so on the social movement, so far no impact As been observed, the traffic trajectory increased by only 0.16% year-on-year, but it's not related to this element. And to answer to your second question, Noida Airport, so... As we had already the opportunity to tell, we consider that Noida airport does not constitute a threat to daily traffic growth and prospects. You know that Noida airport is located outside daily metro area and serves more point-to-point traffic, starting notably with local domestic traffic without changing the hub status of daily. So clearly no threat from that perspective.

So thank you. Tell just about EES deployment. So at this stage we are not observing any material operational impact for the EES at our airport. We have fully implemented the infrastructure and equipment. The main point that is very important for us is the fact that the Board of Police and the French government taking a pragmatic and flexible approach to implementation. In terms of high passenger volume, the use of ES is not applied systematically. That is a key element for us. That is quite a different manner to approach this element compared to the other European countries. So, based on the experience to date, We do not consider ES to be a material operational risk and without impact in the traffic. Thank you for your question.

Thank you.

Next question, please.

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

Hi. Good morning. So I'll have a few follow-ups on the regulatory agreement. First of all, I was wondering if you had any discussion with the regulator during this whole redrafting of the proposal, and notably on the OPEC to be transferred to the non-regulated scope. I think the ART had estimated in April that you should transfer 50 to 100 million, and here you're proposing to transfer 50 million. So I was wondering, like, How comfortable you are that the ART will be okay with this amount being at the bottom of their proposal? And second, on the risk, you're saying that you've increased the risk that you are taking on your site. I'm just trying to understand with regard to traffic estimates. Previously, I think there was the case of... Thank you.

So thank you Elodie, so just to start by a global remark, just to understand that during the last months we work a lot with the French state obviously, and we finalize all the elements of the agreement, that is a very large agreement in the details, so we are fully aligned with the French state first. Second, we have a strong dialogue with all the airlines, that is a key element. Obviously, we invest a lot and it's a good news for the airline that we have a global interest to invest because growth in terms of traffic, because performance in Paris, but it's not necessarily a good news for the other airline that is not fully aligned with the growth strategy. And the last but not the least element is the fact that we have a lot of workshops, technical workshops, an extensive work with the team of the French Regulator. So we are fully consistent with the methodology of the French IRT and fully in line with the decision, the non-binding decision of April. So in the detail and specifically for the cost allocation system, Christelle.

Yes, thank you Philippe. So on this topic, indeed allocation key was among the central areas of work since December. It has been part of the extensive technical discussion that Philippe mentioned. As you've noticed, so we have transferred around 50 million euros of regulated OPEX and 65 million euros of regulated asset base between the two parameters. This compares with an estimated bias of 50 to 100 million euros OPEX in the view of ARC December decision. So, of course, we can never prejudice the regulator final assessment and we fully respect regulator independence. But we consider that what we've done addresses the ARC main observation, particularly regarding mixed-use terminal areas and transfer passenger infrastructure. Once again, we had also extensive technical workshops with airlines, so we had a constructive dialogue both with the regulator and with airlines on the cost allocation front. So we therefore believe the allocation framework is now significantly more robust than it was in December and aligned with the regulator expectations. Maybe regarding your second question in terms of traffic deviation, so indeed, we've taken more risks compared to December proposals since we have revised upwards the traffic trajectory, so 0.3 points difference compared to the initial proposal in December, in a context where we start from a lower beginning point, starting point in 2026, so this is where we are taking the risk. And at the same time, we have revised the adjustment, the traffic adjustment factor. Indeed, there is no longer a franchise corridor around the central scenario, but a symmetrical adjustment factor which protects both operator and airline, and all in all, the As a reminder, if you wish to ask a question, please dial pound key 5 on your telephone keypad.

The next question comes from Emily Fung from Barclays. Please go ahead.

Thank you very much. I have two questions, please, one on the ERA process and another on the cost savings in 26. So my first question is on the ongoing ART board appointments, how should we think about their implications for the timing and the outcome for the binding opinion? Do you have any comments on the process there? And on the guidance of the 40 to 60 million savings expected in 26, How much is that structural cost removal rather than expenditure deferred into 27? So what should be carried into the recurring cost base? Thank you.

So thank you for these two questions. For your first question, so for the moment we don't have any news about the appointment for the French regulator. What we do and what we know is the fact that we work a lot with the technical team. We have some meetings also with the president of the French regulator, but indeed, at the end of the day, for the mining decision, we need to have the full argument of The majority of the five guys that we have in the French Regulator. But due to the huge technical work that we have made, we are quite confident about that. Other questions?

Yeah, so regarding cost savings, so as you understood, we have embedded 40 to 60 million euros of savings in our expansion, with most of the benefits expected in H2. These measures are targeted at discretionary spending and efficiency levels, so the cost savings measures have been deployed all over the group on different OPEX lines. To answer precisely to your question, a significant portion of the savings are temporary actions, including deferred recruitment, delayed discretionary spending, postponed expenditures that may resume when conditions improve. But, of course, certain measures will continue to generate benefits beyond 2026. And we can consider that roughly half of the 40 to 60 million euros saving is a structural saving and will be part of the productivity measure that we target to implement within the economic regulation agreement.

Thank you, Christelle. Thank you for your question.

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

Hi, good morning. Two questions for me. So, regarding the regulatory proposal for Paris, so putting all together, how confident are you that ADT will sign an agreement? and the ART will sign it off by the end of the year. Second question. Remind us please of the process. The ART will either sign it off or not. Can they approve with some conditions? For instance, say, we can approve this deal, but you need to make these changes. Or if they don't approve, what happens? You need to go back to discussions, long discussions and so on. So if you can tell us a bit more about the signing off of the ERT and what happens if they don't agree with a proposal that you presented today. Thanks.

So thank you for your question. So just remind that at the beginning of September we have the formal consultation of all the airlines and in mid-September probably we have the formal decision of the French state to ask for the binding decision of the French IFT. The French regulator has two months to decide and to realize all the auditions of the airlines and after that to finalize the binding decision. In terms of binding decision, the first scenario, the best scenario that we can have is a green light for all the elements and we can sign a few days after Just at the end of November. The second scenario that is for us not a real scenario, it's the fact that you have a negative decision. It's not realistic for us due to the fact that we work a lot with all the stakeholders. and we have the full support of the French state and we are fully consistent with all the elements that the French regulator put in this non-binding decision and fully consistent with the methodology of the French regulator. So the last scenario is the scenario that we have a green light but with some reserve. If it's just With air that is without impact in the main element of the economic regulation agreement. Obviously, it's a question of day. We can take account of this element and we can sign a few days after and the beginning of December, the middle of December. Always there, but in some element that is for us a key element, it's a little bit more tricky. But at this time, what we can see is the fact that we have some elements that are globally comfortable for the regulator, and some elements that we have also to continue to work. Especially the fact that we have a specific element for the review in the mid of the period. But for us, we are very confident to preserve this global economic balance and to sign It's a key milestone for us. So, no issue. Perhaps we can complete, Christelle?

Just to complement, to tell that among the three scenarios mentioned by Philippe, the objective of all parties is to obtain a positive binding and to complete the contract before year-end. We believe a robust and balanced contract, we have Robust and Balanced Contracts and that it would be premature to speculate on alternative scenarios. As Philippe mentioned, there are some key structural parameters for which we are comfortable given the technical discussion, especially allocation key, especially traffic trajectory, especially the 8-year duration. And as Philippe mentioned, there remains a limited number of topics under discussion with the regulator. and we can mention here the adjustment factor and more specifically the audit process to calibrate the cost of major investment. We mentioned that we have Thank you. Thank you.

The next question comes from Nicolas Mora from Morgan Stanley. Please go ahead.

Yes, good morning, guys. Thanks for the early call. Just a couple of questions on the RT agreement. When we look at the trajectory of the road shape, it's obviously outperforming quite meaningfully at the back end of the period. You don't think this is one of the biggest risks in the agreement that actually you never get to see the tariff increases that you promised today at the back end of the project? That's question number one actually. Another one more on the short term, well short term at least on the earnings. Can you tell us a little bit what's going on in retail? You've had actually a decent second quarter in terms of external spend per packs. What are you seeing on the ground? And when you expect especially stores, either luxury goods stores or beauty and cosmetics to come back in whole edge? Is it something we should expect from the back end of this year? Is it 27? Is it 28? Just understand a little bit how you're going to finally benefit from a bit of tailwind on the retail front. Thank you.

Thank you, Nicolas, for your first question about the convergence between the regulated rocher and the regulated wag. And as you know, it's in the law, and we have it. to convert on average over the life of the economic regulation agreement. Mechanically, when we start with a very low regulatory growth rate at the end of 26, we have to accelerate the convergence at the beginning of the period, and after that, linked by the trajectory in terms of investment, linked by the The capacity we have to rebalance the trajectory during the contract, we have to assume a higher roadshed at the end of the period. But it's a mechanic application of the law. So we don't expect any issue about that and we don't have any debate Any discussion about that during the preparation of this common proposal with the French Tech? So, included with the French Tech letter. What we can have in terms of discussion, it's more the fact that it's front-loaded in terms of tariff increase. With two years, two first years, with CTI plus 4%, But we know that for the first year we have a mechanic validation of the tariff for 27. So we de-risk the first year of the application of the tariff increase and we assume and we don't have any concerns about the convergence on average and the fact that at the end of the economic regulation agreement, we have a higher roadshed compared to the level of work. For the second question.

Yes, so regarding retail, so indeed the operating environment remains challenging. As you've been able to see, there's a combination of different headwinds contributing to our performance at the end of June, among them adverse FX effects, Slowdown in luxury demand and a less favorable Middle East traffic mix, but also the continued work in Terminal 2 EK that you were mentioning. However, there are some few positive things over the last few weeks, especially as anticipated, the adverse effects impact that I was mentioning that weighed very much on FTP in Q1 eased materially in Q2. and we expect only a limited impact over the remainder of the year as exchange rates have stabilized now. And secondly, after challenging recent quarters in the luxury sector, we are also beginning to see the first positive effects on the designer renewals at several major luxury houses, supporting the attractiveness of product offerings and underpinning demand. So, all in all, And despite traffic headwinds, because you've seen that we have also revised our assumption in terms of traffic, SPP was flat in Q2, and so that's why we are confident in achieving the updated outlook at circa 32 euros per passenger. Regarding the work in Terminal 2EK, so nothing new from that front. Work will continue through 2026, 2027, with different phases in the work. But all in all, you can expect a more normal commercial configuration progressively from 2028. Thank you. Thank you.

Thank you for your question.

The next question comes from Marcin Wojdal from Bank of America. Please go ahead.

Yes, good morning. Thank you for the update. I have two questions. Firstly, could you share with us perhaps the amount of unregulated capex that you are expecting over the eight-year period on top of the 8.2 regulated? And related to that and more broadly, are you planning to provide us with more, let's say, comprehensive projections like a capital markets day with a medium-term earnings outlook for the entire company once you have the regulatory deal signed off and when could we expect that potential update? Thank you.

Thank you, Martin. So, two elements on your question. So, regarding non-regulated CAPEX, so we indeed mentioned 8.2 billion amounts of regulated CAPEX, but of course, it includes mixed scope projects related to our discussion regarding cost allocation system. So, as a result, The non-regulated share of this mixed-use project represents roughly 1 billion euros, additional billion euros, on top of the 8.2 billion euros, so roughly 9.2, 9.4 billion euros cash commitment on those mixed-use infrastructure. Of course, on top of that will come pure non-regulated investment, but it will depend and the strategy plan currently under preparation. And so that's a good transition for your second question. Indeed, so we intend to communicate on our strategy plan that we are currently working on. It's well underway, but we believe it's important to present investors with a clear and fully comparable major term financial trajectory. So globally, we expect to present the plan in early 2027.

Thank you. Thank you. Thank you for your question.

There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.

It's time to close today's call as it is a busy day for everyone. Thank you for joining us this morning and for your continued interest in Group ADT. Our next scheduled quarterly publication will be on October 22nd when we will report all nine-month revenue figures. And until then, we obviously look forward to reconnecting with many of you during the upcoming conference and workshops then. And as always, Elliot and I remain available for any follow-up questions you may have. For those of you about to take a break, we wish you a restful and enjoyable holiday period after the end of the last results publication. I know that there are a lot of them. So good luck with that. Enjoy the rest of the day. Thank you. And we look forward to seeing you later in the year. Thank you.

Thank you for your participation. You may now disconnect.