Avolta Ag Unsp/Adr

Good afternoon, good morning everybody, and thank you for attending this presentation of the results of Avolta. I'm here with Yves Gester, our CFO, and we're going to go through the presentation that was in our website this morning, starting right away with page number four. We have presented in quarter three, and here today nine months, another set of very strong results. It's the seven consecutive quarter, we are in line or ahead of our own outlook. We are reporting 10.1 billion of accumulated revenues since the beginning of the year, with a very strong organic growth and very strong like-for-like. If we look at the like-for-like, we report for the first nine months is 6.8%. And if we eliminate one strong effect we had, that is Argentina, our like-for-like growth would have been 8%. The Argentina, it's a very simple effect. There are two exchange rates in Argentina. And last year, the difference between the two was very big. And the difference between the two in 2024 has been much smaller. So the price comparison in the country has changed, making a material change. Argentina is now back to historical sales after an extraordinary year in 2023. Beyond the revenues, we have a very strong EBITDA margin with 40 basis points increase versus the same period of last year, reaching 9.9%. And the equity free cash flow is ahead of our own outlook and expectations and reached 445 million on the first nine months, which is a growth of 46% versus last year. If we go now to page 5, a few indications. The company remains very strong on diversification, and you can see that on the different graphics. We are in 73 countries. We are also extremely balanced on the business lines. We have almost a third in duty-free, a third in duty-paid, and a third in food and beverage. The channels, it remains stable. Around 80-82% is airports, and the other 20% are complementary channels. We believe that a stable outlook to go forward, and also a very balanced category mix. By regions, Like for like, all the regions grew on reported organic growth. We had a very strong growth in EMEA and Asia Pacific, a very strong growth also in North America, and we had reported negative in LATAM. But if you correct the Argentine effect, LATAM was also in line with the rest of the group with a 7.2% like for like growth. If we go to the quarter, we also see a growth that is clearly in our outlook. If we take into consideration that the Argentina effect is 1.3% effect on the growth, the reported organic growth of 5.7 would have been 7%. Because the effect of Argentina was the strongest in the third quarter of last year. So again, very strong performance across all the regions. Also on new awards, as is at the bottom of the page, it has been a nice first nine months of the year. We have for this year, as a reminder, still the consequences of the portfolio optimization. So the net wins and losses is going to still be slightly negative, but because of the portfolio optimization. If we look at the wins, are clearly much bigger than the losses of contracts. Now I hand over to Yves. I'll come back in a few minutes.

Thank you. Thank you very much, Charlie. And good morning and good afternoon to everybody on the line. Let me directly start with the EBITDA and the cash flow. Before we go there, initial statement. Look, the Q3, but also the nine months this year, were very strong quarters and year-to-date performance in all regard. Charlie has already mentioned the top line in details. Let's now look at the profitability and the cash flow. EBITDA came in in excess of 1 billion Swiss francs, reflecting an improvement versus the last year performance of 40 basis points year-to-date. And if you look at the third quarter only, by 60 basis points. We have achieved that on one hand side by very strong demand from our customers, which remains unbroken, with a very clear trend. improvements in regard to the productivity and a very strict and tight cost control on all levels of the P&L. If you look at cash flow, equity-free cash flow came in at 445 million for the nine months. That's a significant improvement versus last year. We feel extremely comfortable with that. There's just one point I want to mention in regard to the fourth quarter, and you see that at the bottom right-hand side. The fourth quarter historically is typically negative in line with the seasonality of our business. Moving on to the next slide with the financial net debt and the leverage. The group has achieved in Q3 2024 a leverage of 2.16%. That's the lowest level in more than 14 years. The last time we have reported that was back in 2010. So it's a very clear trend and a deleveraging profile over the last two years, reaching 2.16% in Q3. Close to the target leverage of 1.5 to 2 times we have provided as a target band in our medium-term outlook. The maturity profile is extended. We were able to refinance This year in Q4, actually in October, our RCF from 2027 maturity to 29, an extension of two years. And on top of that, reduced the margin by generating a cost savings of around 10 million Swiss francs. Moving on to the next slide with the strategic update. And with that, I hand over back to Xavi.

Thank you, Yves. If we go to the next slide, this slide is well known, is destination 2027, our long-term strategy remains unchanged. What in a nutshell means we focus more on consumer, both on the physical stores and on the digital engagement, and that has changed the way we work. We also have a very targeted geographical expansion. And we are extremely disciplined on the operational excellence. And we are delivering on all of those. On the last one, on the operational excellence and the operational efficiency, I think the cash flow generation year to date is a clear example. It's another quarter of progressing on the efficiency of the company. On the other two, I'll go now first to the next slide. On the consumer centricity and on the focus on extracting value from the merger between the retail and the food and beverage. The hybrid concepts. There has been a lot of questions. We are developing the hybrid concepts in a very healthy manner. We have 34 open stores that are hybrid. Another 40 to come in the next couple of quarters. So we will reach 100 stores. points of sale on hybrid very soon. But equally, or more interesting, the market is clearly moving into that direction. USA included this year, 2024, 25% of the tenders included a hybrid proposal. We are in the front run of this trend, which we expect to keep growing not only in the U.S., but in the rest of the market. I have a couple of examples of hybrid concepts in this slide. One is the Hungry Club. This is street food developed with one top chef in Spain, and this concept is inside the duty-free store we are doing in several Spanish airports, driving new people and new passengers into the store. And at the bottom, there is another one, which is a Real Madrid Cafe, also in Spain, the first one in Madrid, that is a concept where links retail, because it's also in the duty-free store, it sells merchandising, it is a food and beverage concept, and it's linked with a sports brand, and all that, again, drives another type of passengers and enhances our offering to people that otherwise might not be entering the duty-free store. So it's only one example, but it's very clear we are advancing on extracting revenue synergies from the merger we did between DoFree and AutoGrid. But it's not only, if we go to the next slide, it's not only evolving on the physical network, but it's also evolving on the digital transformation. We launched last month, at the beginning of this month actually, Club Avolta. Trapa Volta is a new loyalty program. I'll explain the details in a minute, but before, we have a short video. For those that are interested, the video will be in our website, so you can download it or watch it anytime you want. So I'll go to the next slide. In any case, it's very interesting because it's reality. So today, what CLAPA Volta has achieved, it is the first ever program in the travel environment that is accepted in 5,000 points of sale in 73 countries, in duty-free, in convenience, and in F&B. Today, in any of our points of sale, you can use Clappable. It gives you commercial advantages that could be discounts, could be specific products, could be collectibles. It will allow to give personalized offering because allows us to better understand the needs and the wishes of those members. It will offer services at the airport. will offer the possibility to link it to your frequent flyer program, and that's already working and possible with, for example, Avios. It will give you the possibility to give back on several projects we are engaging. And it's working. We launched it three, four weeks ago, and already the key numbers on engagement, subscription, download of apps, it's all increasing 40s, 50s percent. But even more important, on the last few weeks, the sales under Club of Volta program have reached a 6.3%. which is triple what we used to have with the separate loyalty programs we had across the board. So the start couldn't be better. We are super enthusiastic about this start. Of course, it requires a lot of recurrent work. But it's not only that it can drive more sales, it's even more interesting. On the sales we're already having, we are getting much more information. And this is a clear step on the digital and data transformation we announced a couple of years ago. It's a tangible example, still a lot to come, and we are working, as I explained in other cases, in other occasions, in many other initiatives on the digital. As a group, we clearly focus on the existing revenues, driving organic growth. We focus on the efficiency of the existing platform, but at the same time, we are identifying these transformative initiatives, mainly linked to the digital transformation, that can generate a different type of company, and if I may say, over the years, even a different type of industry. It's a huge opportunity for the incoming quarters and the incoming years. If we move to the next slide, here is another example of delivering. This is delivering on the geographical strategy. We made very clear that our focus is organic growth, but we also said that from time to time, we can address inorganic selective acquisitions. This acquisition, which is subject to final regulatory approval, so we expect the closing to happen at the end of this year, beginning of next year, it's a small company, 250 million revenues, but it's a perfect fit for our development in Asia-Pacific. Proportionally to Asia, it's relatively sizable. It was financed or will be financed 100% by cash, and it delivers another step into the Asia-Pacific growth. It's a business we know very well because we were already having some activities on the same area, and therefore also there are clear synergies we can address. So again, another of the strategic pillars where we are delivering. If we go now to page 15, and I think I want to make a clear emphasis on this page. This page is more than a capital allocation policy of the company. This is the way we think about the company. And there are three very clear ideas. Idea number one, we believe in the growth of this business. This is an industry that grows, and it's an industry where we can grow faster than the passengers because of the commercial and the digital transformation. And we are going to invest in the existing network, we are going to invest, and we are investing in the digital transformation, We are going to invest on the business development to expand our network. We will complement this organic growth with very financially disciplined, selective M&A of small-medium size to complement the portfolio. This is not new. This is what we have said. But I want to emphasize that this is the number one priority on the company. profitable growth. Second message, we keep an extremely strict discipline on the balance sheet management. And we stick to what we already have said of targeting to be on a leverage, net debt to EBITDA of between one and a half and two times. Profitable growth, disciplined balance sheet, and very focused return on shareholders. We will use cash to grow, but we also understand that the excess cash is for the shareholders. On a yearly dividend, already announced and already approved, and that will continue of one third of the equity free cash flow, and as the equity free cash flow grows every year, also that recurrent dividend will grow. And what we are adding now, that maybe was not clear enough, if after that dividend there is still excess cash, that cash will go back to the shareholders, either as an extraordinary dividend or as a share buyback. And we are starting with that already using the treasury shares we have. But this is not a one-off. This is part of our policy going forward. So that means that every year that there is a sales cash, there will be an extraordinary distribution to the shareholders. Not because we cannot grow, but just because after the growth, And thanks to our powerful cash flow generation, they might be enough to finance growth and to higher retribution to shareholders. With that, I hand back to Yves again.