Avolta Ag Unsp/Adr

Ladies and gentlemen, Welcome to the Abolta Healthier Results 2026 conference call and live webcast. I am Valentina, the call-on-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 star 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. Xavier Rossinyol, CEO of Abolta. Please go ahead.

Thank you very much, operator. Good morning, good afternoon, good evening. Welcome to this first half 2026 results presentations for Abolta. I'm Xavier Rossinyol, and I'm joined here with our Group C FO, and Yves Gerster. I'm going to go straight to page number four, where we have the highlights of this first quarter, first half of 2026. We have reported an organic growth of 3.7%. If we discount the effect of the Middle East crisis, this organic growth would have been 5.2%. We have reported an EBITDA margin of 9.1%, slightly Thank you very much. Thank you. but a very strong performance on quarter two, where we generated 370 million Swiss francs. We remain very focused on our capital allocation policy, focusing first on growth, organic growth, like the big contracts we signed in Pudong, Shanghai, and the several terminals we won in GfK. and not only that, we also announced in the last few months Riga expansion in Saudi Arabia. We are also doing, as it is in our capital allocation policy, some selective, highly accretive, small and medium-sized acquisitions like the activities we bought earlier in Okinawa from LVMA. We keep focusing as a second priority on continuous deleveraging and once more we have deleveraged versus the same period of last year. And last but not least, we continue committed to the dividend we announced in the General Assembly and also we continue acquiring shares for the share buyback program, 106 million in June 30 of the 225 million we have announced. We have confirmed this morning in our press release that we are confident on the mid-term outlook. And this is based on the performance we are seeing in July, where our organic growth was more than, or is expected to be more than 4%, but also because the major impacts we had, particularly in quarter two, we consider them of temporary nature. The Middle East crisis keeps being Thank you very much. Thank you very much. The ramp up is a very clear example. The ramp up both of Shanghai and GFK will still take a few months, but every month is getting better, and definitely in 2027. Also, we have some other additional effects like the bankruptcy of Spirit Airlines in North America. That is also a temporary effect because we are seeing, like in prior crisis, that the slots are being taken by other airlines, but of course it takes a little bit of time. So, I think the best way to say it is that we remain cautiously optimistic and we expect progression over the next months and quarters on the positive side. If we move to the next page, we are showing here that all our four regions are having positive organic growth, but of course, affected in some cases by the headwinds I just mentioned. EMEA is the region most affected by the Middle East crisis, obviously. North America is affected by the Spirit Airlines bankruptcy that I mentioned, and also because airlines in North America are focusing more on yield than capacity. And they are less growth in capacity than initially expected, which affects the number of passengers. But also experience shows that This is something that happens from time to time, more focus on the yield, but capacity, because it's related to the underlying passenger demand, will go back at growth level in the next three quarters. LATAM has been affected despite showing good organic growth by security concerns in some parts of Mexico, by the hurricane in Jamaica, and also by some fluctuations on the exchange rate, particularly in the southern part of Latin America. Asia Pacific, despite the effects of the Middle East crisis is showing a strong organic growth supported by the like for like, but also supported by the positive change of scope. All in all, Despite the headwinds, a pretty resilient performance. If we move now to the next page, three messages. Despite the volatility, Avolta continues investing confidently in the future. We want business, duty-free, duty-paid, and food and beverage in four terminals in GfK. which is one of the airports in North America with the major developments. We have signed the historical ring in Shanghai Pudong duty-free, the first time an international company, non-Chinese company has a material business duty-free in mainland China. We have also grown on the type of M&A we have explained over and over, medium-small size, clearly accretive, and in a very strategic market like Japan. We entered a few months ago with food and beverage in the Kansai Airport, and now in Okinawa with the acquisition of the EFS business in Japan. Together with China are two strategic moves. Profitable and Accretive and Focus on Return on Investment, but at the same time a strategic move to enter significantly large markets. And the business has been growing also with new businesses and extensions in all the regions. Has been published rigor, has been published expansion in South Arabia, as I just said. But one thing that remains the same, it doesn't matter where, The progress is done. It's always focused on the return on investment those projects bring to the overall company. If we move to the next page, the second idea, we continue to transform. I have mentioned that many times, but I want to reemphasize again the importance of our size in locations, but also in access to data. Of the 10.2 billion air passengers we have every year in the world, we have access and exposure to 2.5 billion. That means a potential reach that puts us at the level of materially big and influential companies, for example, on the social media or the local or the technology world. We had 700 million customers last year. And we have reached, in June 26, 20 million Club of Volta members. So since launch in October 24, the number of active members in Club of Volta has been growing month on month without exception. And why we do this focus on data? and why we do this investment on transforming our data and technology capabilities because we believe that through that we can improve pricing with dynamic pricing, we can improve assortment, we can go more local because we have the capacity to manage that, we can optimize inventory and working capital and we can manage better our team members. And all that to fuel growth and spend per passenger, to fuel margins, to fuel cash flow and to FUEL, Return on Investment. And if we move to the next page, the last idea, we continue to deliver. And we have confirmed the outlook once more. Just as a reminder that I do every quarter. This is a midterm outlook. It doesn't mean we are gonna be at the outlook every quarter, every month, every week. But the mid-term, we should be there. And that outlook is 5% to 7% organic growth, an EBITDA margin expansion of 20 to 40 basis points per year, and an increased equity free cash flow also year-on-year. And together with this outlook, we deliver on the capital allocation. And I know we repeated many times, but I think it's important for the people that might be hearing us for the first time. Number one, priority is investing in the business. Existing concessions. New conceptions to support business development. Technology to drive better sales and better margins. Technology to improve also the efficiency of the company from supply chain to cost. Selective M&A, accretive, small, and with the right return on investment. Priority number two, keep improving our balance sheet, decreasing, the level of leverage, which again today is the lowest it has been for a decade. And every quarter, every year, it keeps decreasing. Our target is to be between one and a half and two times, potentially going to 2.5 times net debt to EBITDA on a temporary basis if we do some M&A. And as a consequence of that, we are committing to straight shareholders with a dividend that is a third of our cash flow. Cash flow grows, dividend grows every year. Third year in a row that we have announced an increased dividend. And if there is still surplus of cash flow to invest that in share buyback, straight money returning to shareholders, we have announced for 2026 the third share buyback in a row. We are approximately half The total dividend and the total share buyback of the last three years, including 2026, will be about a billion Swiss francs of money going back to shareholders. So committing to invest, committing to transform, and committing to deliver both on the outlook and on the capital allocation. Thank you very much. Now I hand over to Yves.

Thank you very much, Xavi, and welcome to everybody. Good afternoon and good morning to everybody on the line, also from my side to this year's hockey results presentation. Starting directly with the financial highlights on page number 10. Turnover came in at 6,437,000,000 Swiss francs. That corresponds to a organic growth of 3.7%. As Xavier has already mentioned, we were impacted obviously by the Middle East crisis. Without Middle East impact, the organic growth would have been 5.2%. Core EBITDA came in at 583 million Swiss francs, corresponding to an EBITDA margin of 9.1%. Also here, this has been impacted by the Middle East. and also the ramp up of some of the very large operations including Poudon and also JFK, which is a large project. Net of those effects, so net of the Middle East impact and net of the ramp up of those two operations, ABTA would have been 9.5%. Equity-free cash flow came in at 207 million. Slightly short of the 216 million of last year, but a significant improvement versus Q1. As we have mentioned during Q1, and as you probably remember, there was a gap of 60 million predominantly created by the Pudong ramp-up and the corresponding networking capital investments in the business. We have closed that gap to a large extent during Q2 and have generated a record cash flow of 370 million in the second quarter this year. Leverage has been reduced further by around 0.1 term and now stands at 2.07 times. We have achieved that leverage disregarding the significant portion of treasury shares we bought for the share buyback in this year. Moving on to the next slide, slide number 11 with the growth contributors. I've already mentioned the 3.7% organic growth and the 5.2% net of The Middle East impact and Pudong and JFK ramp up. On top of that, for the half year, we had a negative impact from M&A and others. As we have mentioned over the last couple of quarters, this is related to a contract we sold in EMEA. This has analyzed now. We are about to close the business and the acquisition of Okinawa, which we bought from LDMH. and that will turn this line positive in the third quarter once we have closed the transaction. And as I've mentioned, this is expected imminent. Growth of constant exchange came in at 3.1% for the half year. We had a negative FX effect for the half year of 5.7%, but an easing in the second quarter where we only see minus 3.1%. We do expect for the full year to see a FX result of minus 3.5%, assuming that the FX rates remain roughly stable on the level they currently are. If we quickly looking at the contribution per region, EMEA came in at 1.9%, obviously affected the most by the Middle East crisis. Net of that, the organic growth of Emilia would have been 4.6%. Looking at the other regions, they all contributed nicely to the growth, the organic growth across the board. Moving on to the next slide, slide number 12 with the detailed P&L. I will not go again into the turnover growth, Well, if you look at gross profit margin, we observe a slight decrease by 20 basis point versus last year. That's on one hand side, mixed effects and also the effect from the ramp up of Pudong. Additionally, on concession expenses and personal expenses, we do see a slight increase as a percentage of turnover versus last year. Also here, we see ramp up effects on one hand side and the mixed effect due to the strong growth We observe in APAC versus other regions and relatively muted growth due to the Middle East crisis in EMEA. ABTA came in at 9.1%. We have already commented on that. Net of the Middle East effect and the ramp up, it would have been 9.5%. Below ABTA, the P&L is actually quite uneventful and aligned with expectations in regards to depreciation and amortization. and all the other lines. Financial results were slightly positively impacted by some positive FX results. Moving on to the next slide with the cash flow statement. Core IBTA year on year came in 29 million lighter. Equity-free cash flow, we have actually catched up most of that effect, only having minus 9 million gap versus last year. Obviously, we spent a little bit less on capex, so that certainly helped. It's important to note here that this is not an active measures we have taken. It's a few timing shifts, including the ramp up in JFK we have discussed earlier. So there will be a catch-up effect in that regard. And on the other hand, we have spent some additional income tax paid this year, which is balancing to a certain extent the negative capex impact. Otherwise, below the equity-free cash flow line, we see a strong purchase of treasury shares of 160 million on one hand side for the share buyback program and also for the long-term incentive plan. Additionally, we have seen a negative ethics impact from the translation of the net debt into Swiss francs, resulting in a negative evolution year on year. Moving on to the next slide with the net debt and leverage. So as you can see on top, we have already reduced once more The leverage by around 0.1 turn from 2.15 to 2.07, so roughly 0.1 turn reduction year on year, disregarding the share buyback progress and the higher dividends we have paid. On top of that, if we look at the maturity profile at the bottom left, Still a very balanced picture. We have one maturity coming up in 2027. It was originally a 750 million euro bond. We have already refinanced 400 million euro earlier this year and the remaining part here represented as 366 million Swiss franc or 350 million euro is expected to come later in the year, which will also be refinanced. So you can expect to hear again from us in due course in that regard. Otherwise, the balance sheet remains very balanced in regard to maturity, in regard to currencies, in regard to fixed floating debt. Look, having said that, let me quickly conclude with how I see the half-year results. Overall, a good result, obviously impacted by Middle East. We can obviously not deny that. That's something which happens and which is external factors only partially or not in our hands. On the other hand, very solid, very resilient performance thanks to our diversified platform. And let me repeat what Xavier mentioned in his opening remark. For the next couple of months and into 2020, second half of 2026, we remain cautiously optimistic about the future trajectory. Having said that, I hand over back to Xavi.