Avolta Ag Unsp/Adr

Good afternoon here in the Zurich airport. Good evening, good morning on the call. And very welcome to the full year 2025 of ALTA results presentation. I'm Xavier Rossignol, the CEO, and I'm joined here with our CFO, Yves Gester. Let me start by straight on the highlights of 2025. We have reported an organic growth of 5.5%. Very strong organic growth in three of our four regions, 8.2% in EMEA, 7.4% in Latin America, and 6.9% in Asia-Pacific. The only region that has not been growing so strongly is the U.S. with a flattish growth. So if you take the group without North America, the organic growth would have been 7.9%. We have once more increased the EBITDA margin from 9.4% last year to 9.7% in 2025. And that's the fourth year in a row where we increased the EBITDA margin. In 2022, it was 8.8%. Equity-free cash flow has reached 487 million. This is a 15% increase between 2025 and 2024, with a massive improvement on the cash flow conversion from 33.5% to 36.8%, clearly ahead of our own expectations. Equity free cash flow per share has increased by 18%, also supported by the reduction of the number of shares through the share buyback. Earnings per share, a fantastic 33%. This is a combination of a strong EBITDA and good performance in all the other lines of the P&L, plus the consequences of the reduction of number of shares. Leverage, very important for us, has again reduced from 2.1 times net debt to EBITDA to 1.96, crossing for first time in many, many years the barrier of two times. And that is including all the payments we have done on dividend and all the money we have invested in the share buybacks. Return on invested capital increased again from 9.5 in 2024 to 11.4 in 2025. We've been, for the last four years, on a ROIC ahead of the ROIC we had as a company before the pandemic. And if we'll elaborate on how important it is for us to focus on the return on everything we do. But not only a good performance for 2025, but a performance also with a very strict discipline on our capital allocation. We have invested in the business, as we said, with an increased return on investment. We continue deleveraging following the different layers of our capital allocation. First, invest in the business. Then, deleverage a strong balance sheet. And third, remuneration to the shareholders. We completed the share buyback of 2025 with a cancellation of 3.3% of our capital. The board approved in the last meeting to propose to the General Assembly an increase on the dividend from 1 to 1.15 Swiss francs per share, which is a 15% increase. As you know, our policy is that we will distribute as a dividend a third of our capital of our cash flow generation. As this one increases year on year, also our dividend. And we are announcing a new share buyback of $225 million for the year 2026. If you put together the share buybacks we did in 2024, in 2025, and the one we are announcing today, for these three years, we'll be roughly cancelling 10% of the shares of the company, clearly focusing on delivering more value per share for our shareholders. What's going on at the beginning of this year? The year has started... Pretty well. January is a bit of a strange month because we had a very strong 2025 January with almost 10% growth. Also, the Chinese New Year is moving between January and February. February, for me, a better proxy of what we are seeing in the company. It has grown 5.5% organically. And like last quarter of 2025, we see encouraging improvements in the U.S. Still slowly, but clearly a change on the trend of 2025. Remember that the U.S., North America, is our largest country. Middle East situation. Well, first of all, I'm not sure it's of interest of the investors community, but it's very important for our employees. We have 1,200 team members working in the region. They are all safe. We check daily with all of them. Also, we have not been affected in our shops and restaurants. And to put a little bit of context, Middle East region, directly and indirectly, it's accounting for around 3% of our total turnover. So even if this conflict will last for a few months, which I think most people don't anticipate, the effect we will have in 2025, it will be of limited nature. Also, we have seen year after year that this type of shocks have an effect on where it's happening, but lesser of an effect in the global movement of passengers. If you have to go to Asia because you have a business trip, you will not go through the Middle East now, but you will find an alternative route. People are not canceling their holidays. Maybe they are moving from one location to the other. And that's why, once more, our extensive geographical diversification, it proves as a very strong hedging against this type of risk we are seeing right now. And this performance of 2025 is the direct consequence, a clear strategy with relentless focus on execution. And I know it's a bit repetitive because we've been saying the same thing for the last four years, but I want to once more remember. Number one pillar is focus on traveler and consumer. And everything we've been saying over the last four years, the combination of food and beverage and retail, more entertainment, more flexible stores, more local products, more advanced pricing, more brands of assortment, hybrids, et cetera, et cetera, et cetera. And the investment on data, loyalty, et cetera, all that is to keep expanding spend per passenger and gross profit margin. The second pillar is is the diversification, both geographically and also on business segment. And that, once more, it's proven a key element of our resilience, both in growth and profitability. The last one is productivity, operational excellence. We focus constantly in how we can improve the things we do. And that's why not only growing in a resilient manner, but we are also expanding margin and cash flow conversion. To give some numbers on the resilience and the diversification, we are in 70 countries with 5,000 points of sales in 1,000 locations. But we are also very well diversified on business line. We almost have a third in duty-free, a third in duty-paid and convenience, and a third in food and beverage. Which ages us not only about potential geopolitical shocks, but also on consumer behavior. And the list on the right is just a reminder that 2025 was not an easy year. We had a bunch of things happening. Now we are all focused on what is happening right now, and we might be forgetting that 25 was a challenging year. We had the first Middle East conflict. We had a change rate all over the place. We had the tariffs. We had the slowdown in the U.S. passengers. We have still the ongoing lower Chinese passenger consumption. The Ukraine-Russia war that makes a bunch of flights between Europe and Asia more cumbersome. Despite all that, we've been reporting very strong numbers. Again, speaks about the resilience of the company. And one of our key focus is a spend per passenger. Because that's where we can add on top of the passenger growth. And we do that with the growth engine we presented in the Capital Markets Day presentation. a few months back. The three businesses, duty-free, duty-paid, and food and beverage, both physical spaces, shops and restaurants, but also the digital and data side. And with all that, we focus on improving pricing, assortment, having more flexible stores, more distinctive look and feel with more focus on local, because it sells more, enhancing retail and food and beverage, not only with the hybrids, but also sharing information. And now we have enough time with hybrids to confirm that a food and beverage outlet inside a big duty-free store, for example, drives more food haul into the store. So not only you sell what you're selling on the new F&B outlet, but you're enhancing the sales on the overall store. And on the digital side, I'll come back later a little bit more, but a smart use of data. With all that, we've been increasing for four years in a row, 22, 23, 24, and 25, the expenditure per passenger. If you discount the effect of the US, our like-for-like this year has been around, like-for-like, without business development, between 5.5% and 6%. And about 60% of that comes from passengers and 40% comes from spend per passenger. And what is interesting on the graphic we are putting here is that you see very different behavior per region and per category. And some of the category analysis will resonate you if you follow some of the megatrends or what's happening with some of these categories. But for me, what is very interesting interesting is that despite all plus and minuses, the overall is plus. Again, also our exposure to different categories, all the kind of brands from the most luxury ones to the most basic ones, it helps us to adapt to the consumers. And what we're trying to do year on year is to do that adaptation better and faster. And for that, we need data. And data is becoming year on year one of the key elements of our long-term strategy. And I want to put three ideas here. First idea, we are unique on the size of our data pool. There are about 10 billion passengers, air passengers per year. We have exposure in the locations where we are to about 2.5 billion. And last year we had 682 million tickets for customers. And 16 million of those are clappable. So the first... clear idea is that we have access to more data than anybody in the industry. And year on year, we might be becoming even a powerhouse on travel data alone. The second idea, we are creating a data and digital ecosystem, putting together all these sources of information we have. One is a transaction data, the tickets, what is in the ticket. Of course, if it's duty-free, we also have the boarding pass, so we have more data. We use data from the airports. We use our net promoter's score to see not only what they buy, but how they feel on the shops and the restaurant service. We have in those stores where we put tickets, smart cameras and smart analytics, we also see what happens on the stores, how people move around. We have, of course, very detailed data on those members of the Club of Volta, which are the frequent flyers. And we are also using a platform of startups, calling it a Volta Next, which is providing additional ways of looking at data. And what we are doing progressively is and without any doubt advancing, putting all those closer and closer together. So when you have more data than anybody else and a very clear data strategy putting them together, you are moving ahead in a different way. And the third idea is we don't do that for the sake of having more data and that's it. Our target is to monetize that additional and better data we are getting. And for that advanced data, management, AI, it's becoming increasingly faster and cheaper to generate value from that increased number of data points. There's a bunch of lists, but a couple of examples. If you understand better the consumer, if you have better data on the products, if you have better data on the way people move, you can start applying, for example, dynamic pricing that we tested in 2025 and we're going to extend progressively in 2026. And we see that if you do it the right way, it's a clear system to increase sales. But also, advanced data can improve the operations. One very complex topic for us, particularly in the duty-free side, because we have global suppliers, is the logistics and the supply chain. If you improve your forecasting system, which is basically data, and better, for example, AI, you can improve your assortment. improving sales, gross profit margin, and potentially decreasing working capital. So we see a tremendous potential. But it's not going to happen overnight, has not happened overnight, and we don't want to happen overnight. We want progressive, realistic improvements in the business for the incoming years. And one element of this new data, digital, and AI strategy is clappable data. We've been talking so much about Club of Volta that we maybe forgot that Club of Volta was born only in October 24. So it's a 15-month-old program and has already achieved 16 million users or members, represents 7% of the total sales. An average member of Club of Volta spends three times a non-member. This is for show. There is a transaction every two seconds. It has won a bunch of awards in the industry. But for me, what is really important is the amount and quality of data we can extract from that and how we can keep fine-tuning our offering, our services. to those Club of Volta members. And one way of doing that is with partnerships. And we have a bunch of them here from airport launches, airlines. And you see, we are starting getting to that point where we can see that if you are a member of Club of Volta and a member of certain loyalty programs of airlines, you consume more than if you are not having both programs. So better understanding the passengers, better understanding the frequent flyers allows us to more and more do better job as a retailer and as an F&B operator. One data point that is not here. We had last year 1.5 million downloads of our app. And 25% of the new members were actually downloading the app. And that's even more important. Because if you have your loyalty program in your wallet, we get a certain amount of FaceTime with you. But if you have the app, it's additional. There is people gaming for free in our app. We learn so much, and we are only at the beginning of what we can do to progressively monetize this Club of Volta. Because it's one of those win-win-win. The passenger... The loyal member wins because they have special treatments. We win because we sell more. And the airport also wins because they get a percentage of that. And one point I wanted to make here is what we call a smart capex. It's to emphasize the idea that everything we do, everything we invest on, is based on a very specific robust governance and a very strong focus on return on investment. And that includes the business development, that includes the refurbishment of existing shops and restaurants, that includes the investment on data, digital, or the new spaces. And 2025 has been on new spaces a very interesting year. We have entered new countries like Tunisia, Saudi Arabia, Japan. We opened the shops now. In existing countries, we have operated new segments. For example, we won the first duty-free store in mainland China. an historical move, and that was because we have a very clear strategy of focusing on geographical diversification and segment diversification, but we had the team in place to benefit from that. We also opened in 25 the first food and beverage in Latin America, both in Mexico and Brazil, another very interesting move. We have also won important contracts in North America, like several terminals, food, convenience, and duty-free in GFK in New York. And we also have extended many of the existing contracts. I cannot name all of them because it will take a couple of hours, but I want to mention one because it's the contract here in Zurich, which we extended this week for 10 years with duty-free included, which we are very happy. But all what we do is with a smart focus on the return on investment. I was just checking that now it comes before I have my final slide, a small video. In case people is getting bored of my speaking. Now we have some more energy into the system. So can we put the video, please? I need to push.

Travel never stops, and neither do we. At Avolta, everything comes together in one seamless world, turning every journey into something more rewarding. 2025 was a year of momentum. New experiences for travelers everywhere. Today, Club of Ulta counts more than 16 million members with one loyalty transaction every two seconds. Data connects it all, working as one, driving us forward towards destination 2027. Recognized across the industry, we deliver strong financial performance and create value for our shareholders through disciplined execution. Because in an industry that never sleeps, you keep moving. You keep innovating. You keep delivering. Avolta. Journey on.

My last slide. So, 25, despite all the turbulence and all the headwinds, was a very good year in all the key metrics of our outlook. I mean, we were very disciplined in getting a stricter outlook capital allocation policy. So we have proven over the last four years now consistent delivery and consistently doing what we have said. Now, of course, people are going to ask what happens going forward. And once more, we confirm our midterm outlook for the incoming years, which is organic growth of 5% to 7% per annum. EBITDA margin of 20 to 40 basis points additional. And yes, additional to the 9.7 we reported for the full year 2025. And an increased cash flow conversion of 100 to 150 basis points. We've been doing much better on this metric over the last four years, but we think we can keep improving another 100, 150 basis points on the current base. And with that, I hand over to Yves. Thank you very much.