Avolta Ag Unsp/Adr

Ladies and gentlemen, welcome to the Avolta Q3 Trading Update conference call and live webcast. I am Valentina, the Chorus Call Operator. I would like to remind you that all participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing STA and 1 on your telephone. Webcast viewers may submit their questions or comments in writing via the relative field. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Mr. Javier Rossignol, CEO of Abolta. Please go ahead.

Good morning, good afternoon, good evening. Welcome and thank you for being today in these first nine months 2025 results for Abolta. I'll go straight to the presentation. to the highlights nine months. We have reported for the first nine months of the year a total turnover of 10.6 billion Swiss francs, which is a growth of 5.8% versus last year, and an organic growth of 5.4%. Our EBITDA margin has reached 10.2%. an expansion of 30 basis points versus the same period of last year. And with that is now, I think, 16 quarters in a row where our EBITDA margin has expanded year on year. Thanks to this expansion and other optimization measures, we have reached our highest ever EBITDA. Equity-free cash flow reaching $503 million on the first nine months. Thanks to that, our leverage has decreased from two times, reaching 1.9 times, well ahead of expectations. Particularly impressive, taking into consideration that we continue a growing policy of dividend distribution and the share buyback for second year in a row. October has been a very good month with a 6% organic growth. Quarter three is the summer month. The organic growth, as expected for us, was a little bit lower than in the previous quarters because particularly in the touristic airports, where the capacity in summer months is super high, it makes more difficult the comparables. But October clearly supports the full year outlook. And we feel very confident on reaching the outlook for the year and for the years to come. If we move to the next slide and we go on a regional basis, we see a strong growth in Europe, Middle East and Africa. Probably where the comparables were more challenging is precisely in Europe, particularly in South of Europe where we have the highest percentage of tourist destinations. And again, a very strong acceleration of the growth in October that we expect to last for the remaining of the last quarter. North America, that has been flattish for most of the year, as a consequence mostly of lower traffic and poor consumer sentiment, It shows a very interesting turning point in October with for first time in the year a positive growth and we believe the quarter four will also be positive. LATAM has been very strong the whole year. Argentina, which is one of our main countries in Latin America, It's ahead of historical numbers, but compared to last year, the comparables were particularly difficult in summer, simply because the exchange rate difference between dollar and peso, it made last year an extraordinary year. This effect is disappearing now because, as you know, Argentina shows a stable microeconomics, But that's another explanation of a slightly weaker summer, but again, a strong start of quarter four. APAC remained strong for the entire year. Very valuable, particularly because the Chinese consumption has not recovered. But overall, I think the key message is that the Volta is precisely this. Of course, you will have regions or countries that will be weaker or stronger, and the same thing on months or quarters. But if you look at the Volta on its entirety and for the full year, we will be delivering in line or ahead of the outlook thanks to our geographical diversification and thanks to our business segment diversification. And I think taking into consideration how volatile the world is, it is quite an achievement. From a business development point of view, we continue developing all the regions. In the last few months, with some developments in EMEA, we continue with the expansion of our hybrid concepts. North America, we announced yesterday a very big win in Terminal 8 of GFK. We had already been awarded significant parts of the food and beverage and convenience business in that terminal, and now it was confirmed we have won also the duty-free contract in that terminal, which will make, together with the other wins we had over the year, GFK as one of our key locations in North America. In EMEA, apart from extending contracts, we have also exited one contract. And it was a very particular situation where we sold back to the airport the assets and the concession agreement. It is a very particular situation. We do not expect that to be repeated, but that is what explains the movements on the line of M&A. That effect will disappear after 25, and you shouldn't see it anymore. If we move to the next page, I think it's very important that we continue with our data and digital transformation. Club of Ulta has reached another record number of members, reaching already 15 million members. And this is something I keep repeating. How important today, but particularly in the future, will be this better understanding of the customers. This better understanding of the passengers that are not customers. How the loyalty program allows a higher intimacy with those passengers. This data and digital transformation we've been doing over the last two years and that we will continue to do on the years to come will sustain and in some cases maybe accelerate our capacity to achieve the outlook we've been providing for the mid and long term of the company. In CLAPA Volta, we continue expanding the partnerships. Club of Volta is about delivering value to the members. And you can do that better if you have partnership with airlines, with airports, with launch operators. And in some cases even converting our Club of Volta in a platform that other operators might want to use. And that is a win-win situation for everybody. The passenger wins because they get services, upgrades, a better commercial offering in more places. The partners also win because they benefit. And we definitely win because we do control Klapa Volta and we do have access to that data. If we move to the next slide, we are consistent. we repeat once more that despite all the volatility in the world, we confirm our outlook for 2025 and for the years to come. And our outlook is a turnover, organic growth of 5% to 7% per year. We've been achieving that the last three years. An EBITDA margin expansion of between 20 and 40 basis points per year. We have achieved that every single year. And on top of that, an expansion on the equity free cash flow conversion of between 100 and 150 basis points. And as you know, this year, like last year, we are clearly overachieving that target. The combination of a healthy growth in revenues together with a very strict balance. cost discipline, cost optimization, productivity plans. And it's much more that can come in the coming years. And in the next page, again, our confirmation of our capital allocation policy. First target is to invest in the business. New shops, new restaurants, digital transformation, business development, new concessions, and potentially selective accretive M&A. Always finance with the balance sheet of the company and not with new equity. Second target. De-leveraging. A strict financial discipline in the balance sheet. And I think if we'll expand on that, we are already clearly ahead of initial expectations. And the last, commitment to shareholders' return. And dividend of one-third of the equity-free cash flow. And every year, as you can see, equity-free cash flow is growing, so dividend will also grow. And share-by-back returns. when there is enough excess cash. We did one last year, and we are going to finish the one of 2025, as expected, with about 200 million invested on that plan. Now, I hand over to Yves.

Thank you very much, Xavi, and good morning and good afternoon to everybody on the line. And thank you very much for joining us today. You see on the slide the KPI of the financial performance for the nine months of 2025. I will not go into the details here. We have dedicated slides for each element you see on the slide. But let me start here by stating that I'm very pleased with the financial performance of the organization over the last nine months. on all key aspects, be it on the top line, on the turnover, the profitability, but especially the cash flow, and last but not least, also the balance sheet with the leverage. Going one by one, moving to the next slide with the top line performance. The group has generated over the nine months 10.4 billion Swiss francs, with an organic growth of 5.4% for the nine months, We have seen some, as was expected, headwinds from an FX point of view. So that obviously impacted the reported growth year-to-date, and we expect that to continue also for the full year. Having said that, we see some very positive momentum into October. with an organic growth of 6% periodic in October, specifically also driven by some inflection in North America, which comes with an organic growth for the month of positive 3%. A significant improvement versus the flattish performance we have seen for the first nine months of this year. Moving on to the next slide, with the profitability and also the cash flow. ABTA margin has improved by 30 basis points for the first nine months, and this compares to the 20 to 40 basis points guidance we provide in the medium term, so bang in line in the middle of the outlook we have provided. The third quarter specifically is even slightly better, with an improvement of 37 basis points on the quarter versus the same period of last year. We have decided here, and you will find it on the right-hand side of the slide, also the historical ABDA margins per quarter year-to-date from 2022 to 2025. And what you can clearly see is the continuous improvement we have executed. Xavi has mentioned it. But to deform in line or even ahead of the outlook and the guidance we have provided back at the initial capital markets day when announcing the new strategy. So for every single quarter from a profitability point of view, we have delivered. If I turn down to the equity-free cash flow, For me, one of the two stars of this presentation. The group has generated 503 million of equity-free cash flow for the first nine months of 2025. This is the most highest equity-free cash flow the group has ever recorded, and we have achieved that disregarding the headwinds I have mentioned before on the currency. So in absolute terms, a fantastic result for the organization. What I also want to mention here is the seasonality of our equity-free cash flow. As you know, the fourth quarter typically is flattish to negative. So considering that, we basically see what we potentially are achieving for the full year in regard to equity-free cash flow. Also there, a very solid result. Moving on to the next slide with the Treasury overview. For me, the second star. Leverage has decreased to 1.9 times. This is significantly lower than what we have done historically in our organization, and it's now in line with the guidance we have provided to 1.5 to 2 times as a target range. And we have achieved that despite the fact that we have significantly increased the dividend payment this year and have progressed well on the share buyback program where we have bought back already by September 130 million of Avolta shares. The next point is the maturity profile. As you already know, very solid liquidity position. we have extended the maturity profile by extending the maturity on the RCF from original 2029 to now 2030. The conditions remain the same, so there's no change in the margin we pay, but it's again a five-year maturity. Now let me quickly summarize, before I hand over back to Chawi, how I see the financial result and performance of the organization. For me, the financial performance we have reported in the nine months is a very strong confirmation that our focus remains crystal clear. We are focusing on generating cash flow to reinvest into the business, to strengthen the balance sheet, and ultimately to generate returns for our shareholders. And yes, we as a management team, we do know that on the top line, there might be some fluctuation week on week, month on month, or quarter on quarter. But what at the end really counts is that we translate that solid performance of the organization into strong cash flow. And the first nine months of this year clearly confirmed that. And for me, that's what this is all about. With that, handing over back to Charlie.