Meliá Hotels International, S.A.

Good afternoon and welcome to Meliá Hotels International First Half 2026 webcast. I'm Stephane Baos, Head of Investor Relations. Before we begin, we would like to remind you that our presentation will include forward-looking statements, as our results could differ from those indicated in our forward-looking statements. And forward-looking statements made today Speak only to our expectations as of today. Unless otherwise stated, our RESPAR, occupancy, average daily rates, and P&L comments refer to year-over-year change for the comparable period. For the purposes of this presentation, our President and Chief Executive Officer, Gabriel Escarrer, together with our Chief Operating Officer, André Gerondeau, We walk you through the key highlights and main topics. You can find our earnings release on our investor relations website at mediahotelsinternational.com. We will now see a short reel with the main KPIs, followed by the presentation. André Philippe Gerondeau

Thank you Stephane, good afternoon everyone and welcome once again to Melilla Hotels International's first half 2026 results webcast. We are presenting today solid first half results, demonstrating the strength of our positioning and portfolio in well-established leisure and blessure destinations. This strong execution was delivered despite a highly volatile environment marked by the development of new conflicts which continue to affect sentiment and pose risks to the tourism sector. As an introduction, to frame the results we are presenting today, I would like to highlight four key ideas. Two relate to areas of strength, while the other two reflect dynamics that are important to consider when reviewing the period's performance. First, demand across our consolidated destinations remained strong. Leisure travel trends continue to be healthy, supporting solid operating performance across the majority of our key markets. As a result, we are delivering on our goals set at the beginning of the year across almost all regions, with the exception of Mexico, which was temporarily affected by specific local events, and Cuba. Second, Growth continues to be driven by strong Red Park performance, where we remain the leaders, together with our expansion strategy. Recent acquisitions and the growing contribution from our joint ventures are increasing both the scale and diversification of our earnings base. A specific security-related event affected booking patterns and impacted the performance in Mexico during part of the semester. And finally, we completed the process of totally ceasing operations in Cuba. As a result, the business is now reported as discontinued operations. Before turning to the financials, let me provide some additional context on Cuba, as this is the main factor affecting the group's bottom-line performance during the period. Over recent years, the operating environment in Cuba has become increasingly challenging, driven by a combination of geopolitical and microeconomic factors. These conditions have significantly impacted the country's tourism industry and the operating environment for hotel companies. Against this backdrop, we concluded that exiting the market was the most prudent and responsible course of action. This was by no means an easy decision. Melia has had a presence in Cuba for more than three decades and has played a pioneer role in the development of the country's tourism industry. However, our responsibility is to safeguard the long-term interests of the company and all of our shareholders as we believe that this decision was the right one. As a consequence, and in accordance with applicable accounting standards, the Cuban business is now reported as a discontinued operations. As a result, we recognize a non-recurring impact of approximately minus 79 million euros at the bottom line, largely reflecting the impairment of our remaining exposure This is a non-recurring accounting adjustment with no cash impact. This decision completes our exit from the market and removes a source of volatility. Turning into the financials, For the second quarter and half year in order facilitated year-on-year comparability, the 2025 contribution from the Cuban business has been reclassified. Consolidated revenue excluding capital gains for the first half of the year increased by plus 7.1% and a plus 8.5% in the second quarter alone. which was particularly strong. This is also explained by the perimeter evolution and the strength of our operation in almost all destinations. Operating expenses, the increase was of plus 7.4% for the first half and plus 9.3% for the second quarter. This increase is also reflected Perimeter changes. The first half figures reflect the addition of several hotels under variable leases agreements, most of which were incorporated in June 2025, resulting in a plus 10.4 million euros increase. First half EBDA, excluding capital gains, reached plus 244.8 million euros, representing a plus 2.5% increase year on year. This growth was delivered despite higher variable leases costs and the temporary absence of a full contribution from Paradisus Cancun and Gran Meliá Don Pepe. Two of our key owned hotels. The impact on EVDA of these two hotels is more than 20 million euros during this semester. As these hotels progressively return to operation, we expect to recover this contribution and unlock further earnings growth in the coming quarters. With Paradisus Cancun having reopened in April 2026 and Gran Melilla Don Pepe expected to reopen in December 2026. Below EBDA, net financial results improved by plus 4.2 million euros year on year, mainly reflecting a more favorable foreign exchange contribution. Partially offset by non-recurring effects recorded within other financial results last year. Cost of debt remained stable at 4.1%. Profit from associates and joint ventures amounted to $5.1 million during the first half. The year-on-year comparison is largely explained by one of items recorded in the prior year, including a capital gain from the disposal of an asset in the Canary Islands. With all that, and considering that was previously explained regarding the situation in Cuba, profit and loss from continuing operations Stude at 83.5 million euros, decreasing 2% compared to last year. Meanwhile, profit and loss from discontinued operations in Cuba was minus 79.4 million euros, reflecting the accounting impact of receivables, inventories, and Omasi estate impermanence. This is a one-off impact. Consequently, Group's net profit reached 4.1 million euros, affected significantly by the aforementioned situation. Regarding margins, and although margins remain under pressure during both the first and second quarter, this reflects a combination of temporary factors rather than any deterioration in the underlying business. We also continue to face some headwinds from foreign exchange movements, which affected both the revenue and cost base of the group during the period. Driven margin expansion remains a key priority across the group, and we are confident in our ability to steadily progress towards our long-term profitability objectives. Turning to the balance sheet, net debt decreased by 51.7 million during the first half, while net debt excluding leases increased by 65.1 million euros, reflecting the investments made during the period, which I will review in a short moment. With no significant maturities ahead and a comfortable liquidity position, we have both the flexibility and the visibility required to continue investing in the business while maintaining a disciplined financial profile. Turning to investments, during the first half, we continue to deploy capital strategy, focusing on opportunities that strengthen our portfolio. We completed several acquisitions and investments in strategic destinations such as Italy, Spain, and the United States, while increasing our exposure to assets where we already have strong operational expertise and in some cases were previously under lease agreements. Cash on Cash expected returns for these investments reached double-digit numbers. Importantly, these were high-quality assets already in operation and requiring limited additional investment. At the same time, Paradisos Cancun resumed operations in April following its repositioning while the renovation of Gran Melilla Don Pepe remains fully on track. Altogether, these initiatives further strengthen the quality of our portfolio and its future earnings potential. I would like to confirm that we remain fully committed to a disciplined approach to leverage with a clear objective of keeping our net debt to EBITDA ratio below 2.5 times in the years ahead. This discipline reflects the strength of our underlying cash generation, not our reliance on portfolio actions. Separately, as part of our ongoing focus on capital allocation and balance sheet optimization, we continue to review opportunities to dispose of selected non-core assets. I will now turn the call over to André to talk about our operational performance during the second quarter and forward in more detail. Please, André.

Thank you Gabriel. Good afternoon everyone. Let me now provide some additional detail on the operational performance across our regions, where we continue to see healthy demand trends and solid execution across most of our key destinations. While geopolitical tensions in the Middle East have increased uncertainty, our exposure to mature and well-diversified destination has allowed us to navigate the situation without any meaningful impact on demand or operations. Own and lease red bar increased by 0.2% in Q2 and 1.3% in the first half. Growth was stronger on a consistent currency and comparable portfolio basis, reaching 3.1 in Q2 and 5.1 in the first half. This underlying strength was reflected in our luxury brands in Spain and EMA, where Redbar delivered a comfortable mid-single-digit increase. Also, Our operations in Dominican Republic were particularly strong, achieving double-digit ref bar increase in the period. Looking at system-wide ref bar, growth was 14.2 in Q2 and 11.7 for the first half. This includes an uplift derived due to our exit from Cuba. Excluding this effect, System-wide ref bar growth would have been 5.8 in Q2 and 5.6 for the first half. Available rooms during the first half increased by 6.1% in our owned and leased portfolio, while system-wide available rooms decreased by 5%. The decline at system-wide level was primarily driven by the progressive reduction of our exposure to Cuba and the subsequent cease of operations in line with our previous market communications and as disclosed in today's H1 earnings release. Media.com and our direct channels remain a key competitive advantage. They represented almost 48% of our centralized sales during the period, supporting both demand generation and customer loyalty, combined with diversification of our source markets. This provides greater resilience, commercial flexibility, and an increasingly valuable platform for both total REF PAR growth and value creation for owners of managed hotels. By regions, The performance over system-wide portfolio for the semester was as follows. Starting with Spain Urban, performance remained positive in the first half, mainly driven by rate growth and portfolio maturity. Madrid continues with a solid trend, especially in luxury and premium hotels, while Barcelona improved towards the end of the semester. Other cities have also benefited from recent openings, renovations, and repositioning initiatives. REF PAR increased by 8.9 in the second quarter and 6.7 in the semester. In Spain resorts, training remained very healthy across the semester. The Canary Islands continue to be our strongest contributor. While the Balearic Islands delivered growth in both rates and occupancy. Direct customers and tour operators were the main drivers of demand, complemented by the continued strong momentum of Club Milia. It is also worth noting that these results were achieved despite the temporary closure of Gran Milia Don Pepe for renovation works. Breath power increased by 7.3% in the second quarter and 4.6% In the semester. Across EMEA, results were generally positive. Although performance varied by market, Italy delivered an excellent performance supported by strong demand in Milan and the continued strength of the luxury segment in Rome, while the UK also recorded healthy growth led by London and the MICE segment. On the other hand, Germany faced a more demanding comparison due to the absence of major events that benefited the prior year, while France experienced some temporary pressure from disruptions linked to the Middle East conflict and air connectivity. Southeast Asia once again stood out as one of the strongest growth regions, benefiting from healthy leisure demand, improved connectivity, and a more diversified mix of source markets, particularly in Vietnam, Thailand, and Indonesia. China continued its gradual recovery, with occupancy improving, although pricing conditions remained competitive. Relevant to note, the positive performance of the rebranded Paradisus Bali, a key differentiator of media in the region with high potential for development. Turning to the Americas, performance in the Dominican Republic remained particularly strong throughout the semester. Demand trends were healthy, occupancy levels remained robust, and the contribution from our key assets continued to grow, supported by the diversification of the source markets and the strength of the destination tourism fundamentals, benefiting to some extent from displaced demand from other destinations. Looking at Mexico, the start of the year was positive, although demand was temporarily affected by specific local events during part of the semester. Our commercial teams reacted quickly, focusing on direct channels and profitable business. It is also worth noting that these events coincided with the reopening period of Paradisos Cancun. As the hotel is in its ramp-up period, this naturally limited the impact on the region during the semester, while leaving us with a significantly stronger product and a much better starting point for future performance. Before reviewing the outlook by region, let me highlight that we continue to see a supportive demand environment across most of our markets. Despite the geopolitical uncertainty that remains present in the background, the summer season is developing positively, supported by strong booking levels, healthy last-minute demand, and the strength of our positioning in established and highly resilient destinations. We strongly believe that our brand strategy is a key contributor to the strong performance in Spain and EMA, together with the improved results in Dominican Republic. With this in mind, we're optimistic regarding Mexico's recovery going forward. Focus on our luxury and premium properties has allowed for further Red Park growth across these brands. All the design of personalized experiences such as private boat events in Ibiza, Menorca and Mallorca, wellness programs and F&B offerings with recognized partners and beach clubs among others, has contributed to higher guest satisfaction and stronger brand affinity. Examples of this, to name a few, the strong reposition of our Mi brand with the opening of Mi Málaga, Mi Marbella, and Mi Lisbon, and the evolution of our Grand Meliá and Meliá Collection portfolio. All of these efforts are translating into the steady improvement of our NPS scores. At the same time, the renewal of our top employer certification once again validates the strength of our culture and the quality of our teams. We strongly believe that talent has become one of the most important levers in our industry and a key enabler of the personalized service, attention to detail, and memorable experiences for our guests. Our own book reservations remain ahead of last year. By double-digit, giving us good visibility for the quarter, combined with a favorable events calendar in several markets. This supports our confidence for the remainder of the summer season. Briefly by region, Spain continues to show very positive momentum across both resort and urban destinations. In our resort portfolio, Strong in the Books demand is complemented by healthy last-minute bookings. With the Canary and Balearic Islands performing well. In our urban hotels, growth continues to be supported by recent additions to the portfolio, repositioned assets, and strong direct customer performance. Across EVA, trends remain supportive overall. Italy continues to benefit from a favorable events calendar in Milan and resilient luxury demand in Rome. The UK is showing positive momentum, supported by major sporting events and corporate activity, while Germany should benefit from a strong September events calendar. France remains more moderate in the near term, although we expect some improvements as corporate activities resume after the summer period. In the Americas, Mexico continues to operate in a volatile environment, with demand remaining highly booking window sensitive. Our focus remains on direct channels and active revenue management, while the reopening of Paradisus Cancun progressively strengthens the destination positioning. In the Dominican Republic, demand remains strong across all segments. Thank you very much. Development remains a key pillar of our growth strategy. We continue to add high-quality projects, mainly under asset-like structures, reinforcing our presence in strategic destinations and supporting our long-term growth. Until July, we opened 14 hotels, adding about 2,000 rooms to the portfolio. While our team signed 17 new projects, adding over 3,800 rooms to the pipeline. Among the highlights, our entry into Tunisia stands out. The entry into the country was made possible through strategic partnership. This collaboration will allow us to progressively build a platform of up to 3,000 rooms in one of the most promising leisure destinations in the Mediterranean, increasing the depth of our portfolio. However, while our vision for gross unit growth remains around 5%, net unit growth reported figure will naturally be impacted by the exit from Cuba. This does not reflect a slowdown in our development activity, but rather a strategic portfolio decision. Our growth strategy remains firmly focused on high-quality assets, stronger destination, and opportunities that enhance the long-term value of the portfolio. Let me briefly comment on some of the most relevant openings we've had in the semester. In addition to the previously mentioned Paradisus Valley, A particularly important milestone was the reopening of Paradisos Cancun following its comprehensive transformation. This landmark investment has significantly elevated the resort's positioning and guest experience, reinforcing its leadership within the luxury segment. Having resumed operations in April, we expect the property to progressively unlock its full earnings potential. Becoming an increasingly meaningful contributor to growth from 2027 onwards. Another highlight during the period was the opening of Inside Mexico Roma Norte, strengthening our presence in one of the most dynamic urban markets in the Americas and reinforcing our commitment to the fast-growing pleasure segment. This opening further diversifies our footprint in one of the group's most important markets. Holiday World Resort in Benalmádena reinforces our leadership in the Costa del Sol, adding 900 rooms to a high-quality family-oriented resort complex, operated under affiliation by Meliá. It represents the type of partnership we're looking for, strong assets and leading destinations with significant growth potential through our brands and commercial platform. In addition, in the Andalusian region, Particularly noteworthy are the openings of Mi Málaga and Hacienda del Mar, Emilia Collection Hotel in Estepona. We were also pleased to celebrate the opening of Zelle Fuerteventura for the first Zelle property in the Canary Islands and another important milestone of expansion of the brand. The hotel strengthens our position in premium leisure destinations and forms part of our vision to create a unique well-being hub together with Paradiso's Fuerteventura. I will now turn back the call over to Gabriel to summarize the main messages of the call.

Thank you André. As a summary, I would like to highlight the following messages. Our first half results once again demonstrate the resilience of our operating model. Despite a volatile geopolitical backdrop, We continue to lead system-wide webpack growth, reflecting the strength of our brands, our distribution system, the quality of our repositioned portfolio, and our exposure to well-established and highly attractive destinations that continue to resonate strongly with travelers worldwide. EBDA, excluding capital gains, increased by plus 2.5% during the first half. This performance was achieved despite the higher contribution of new variable lease contracts and the fact that two of our most important owned hotels, Paradisus Cancun and Gran Meliá Don Pepe have not yet contributed at their full earnings potential due to their reopening and renovation activities. As these assets progressively normalize their contribution, we see upside for further profitability improvement going forward. The period was, however, significantly affected by the situation in Cuba, which resulted in a minus 79 million euros impact classified under discontinued operations in accordance with the applicable accounting standards. While this had a substantial effect on reported net profit, It reflects the prudent accounting treatment of our exit from the market, with the remaining book value of our exposure in Cuba now fully impaired. I repeat, this is a one-off event with no cash impact. We have taken a more active approach to expansion, investing in strategic assets and opportunities that strengthen the quality of our portfolio and support future growth. As we look ahead for the second half of the year, our expectations for 2026 remain positive and can be summarized as follows. Current booking trends remain very encouraging, with On the books reservations are up with double digit compared to last year, supporting our confidence for the remainder of the summer season. The continued strength of the meeting and incentive segment further enhance business visibility, supported by a high level of forward booking and contracted demand, which is double digit above same day last year. We are refirming our full-year guidance to increase REFAR in the high single-digit range under custom currency, leaving one more year the market, improving operational margins by 200 basis points on a like-for-like basis, and generate at least 565 million euros of EDGA. In terms of development, up to date we have signed 17 new hotels. On a four year basis signature goal is to reach at least a total of 40 hotels. We remain committed to maintaining a disciplined financial profile with a clear objective of keeping leverage below 2.5 times. Having flexibility to pursue growth or repositioning opportunities. As part of our ongoing focus on capital allocation and balance sheet optimization, we continue to review opportunities to dispose of selected non-core assets. Further details on our second quarter and half year can be found in the earnings release we issued today. Thank you very much for your attention and continued interest in Meliá. We look forward to welcoming you to our live conference call and Q&A session scheduled for tomorrow, Friday, July 31st at 9.30 a.m. We will be pleased to further discuss our results and outlook with you. Best regards.

Paradisos Cancun, an all-inclusive resort reborn from the Caribbean inspired by Mexican culture. Five Germans designed as the heart of the cenote, an icon reimagined to connect guests with the local culture. 773 fully redesigned suites created for a new level of comfort. Service place warm and personal, Unmistakably Mexican, distinct experiences for families and adults only, connected by nature, separated by intention. Nine restaurants and seven bars, local flavors and global cuisines. A destination designed for well-being, body, mind, and social life. 32,000 square feet of fully renovated convention space, designed for brands to connect, Good morning everyone and welcome to Meliá First Half 2026 Q&A conference call. I'm Stephane Baos, Head of Investor Relations.

As you may know, yesterday, together with the release of our results, we made available a webcast presented by our President and Chief Executive Officer, Gabriel Escarrer, and our Chief Operating Officer, André Gerondeau. It provides an overview of the key operational trends in First Half 2026 and outlines the company's outlook for the next quarter ahead. We hope you have had the opportunity to review it and that it has been to your satisfaction. In today's live session, we will begin with a brief introduction summarizing the most relevant points of the year. Afterward, we will be open at the Q&A session. This morning, as usual, On the call with me today are Gabriel Escarrer, our president and chief executive officer, André Gerondeau, our chief operating officer, and Henry Rodriguez, our chief financial officer, and Juan Ignacio Pardo, our chief real estate and sustainability officer. Please note that all participants are currently in listen-only mode. When selected to ask a question, your microphone will be activated automatically as you are introduced. Additionally, We would like to remind you that the discussion from the company may include forward-looking statements. These comments reflect our expectations as of today only, and actual results may differ from those expressed or implied. I am pleased to turn the call over to Gabriel.

Thank you, Stephane, and good morning, everyone. Before we move to the Q&A, I would like to briefly highlight a few key messages from our first half 2026 performance. First, I'm pleased to say that our business continues to show strong resilience and attractive growth fundamentals. Despite a volatile geopolitical environment and some isolated challenges in specific destinations, Demand across most of our key markets remained healthy throughout the first half of the year. Spain, our core market, continued to perform very well, both in resource and urban destinations. We also saw strong momentum across several European markets, particularly Italy and the United Kingdom, while the Dominican Republic once again delivered an outstanding performance. These results confirm the strength of our brands, the attractiveness of our portfolio, and the resilience of the destinations where we operate. Second, our strategy continues to deliver results. Beyond the solid operational performance, growth is increasingly supported by the expansion of our portfolio. and the growing contribution of our joint ventures. At the same time, our focus on premium and luxury brands together with ongoing investment in repositioning and asset enhancement is allowing us to continue improving the quality and earnings potentials of the group. First, I would like to briefly address Cuba, and it's clearly the most relevant element affecting our reported net profit during the period. As explained in the webcast and earnings release, our subsidiary, Isla Bella Gestao e Turismo, has decided to cease all of its operations in Cuba, and accordingly, the group has reclassified a business in the country as a discontinued operation. This completes the exit from the Cuban market and fully impairs the remaining exposure. This resulted in a non-recurring accounting impact of approximately 79 million euros reported within these continued operations. Importantly, this adjustment has no cash impact and does not affect the strength of our underlying business, our cash generation capacity, or our financial flexibility. If we focus on continuing operations, the businesses delivered solid results, supported by healthy demand trends, good commercial execution, and continued progress in our strategic priorities. Looking ahead, we remain confident about the remainder of the year. Current booking trends continue to be encouraging. On the books, reservations remain ahead of last year by double digits, and demand patterns across our main destinations remain supportive. As a result, we are refueling our full-year guidance, including high single-digit retail growth at constant currency, further like for like operational margin improvement and at least 565 million euros of EVDA. Finally, I would like to thank all our shareholders, investors and analysts for your continued interest and support of Meliá. We appreciate your confidence in our long-term strategy and remain committed to delivering sustainable growth, maintaining a disciplined financial profile, and creating value for all stakeholders. With that, let us move directly to your questions. Please, operator.

Thanks, Gabriel. Those interested in asking questions will have the opportunity to do so now. Please dial Star 5 so we can assign you a turn to ask questions. Allow us a brief moment to compile the questions and assigns turn. Okay, we have the first question coming from Ricardo Benavides. Ricardo from Banco Santander, please go ahead.

Thank you. Just one question from my end. In the results released, you mentioned currently evaluating asset rotation opportunities. I was just wondering if we could get some additional details on where these assets could be located, up to which amounts would you be willing to sell, and overall, what would you do with the proceeds originated from these sales? Thank you.

Juan Ignacio Pardo speaking. It's true that the company is reviewing the sale of certain non-core assets. The plan is to carry out all these disposures gradually between the second half of 26 and the 27, first half of the 27, although the final timing, as you may imagine, will depend on each of the transactions and market conditions. Most of these assets are plots, land plots, that do not currently generate income, Some of them located in Spain, some of them in foreign countries, and have no impact on the DAO cash flow. The company also is reviewing a small number of hotel-related assets, some of them including minority stakes together with our partners in next rotations. The objective is to release capital from assets that are not strategic or generate limited cash and use that capital for high return opportunities. Based on the current assessments and the list of assets that we have, these disposals could generate around an amount of over 100 million net cash proceeds. Since most of the assets have no operating contribution, as I mentioned before, the company does not expect a material impact on its recurring earnings. And, of course, more details will be provided once the transactions have been developed and executed. Angel Luis.

And Angel Luis speaking. Just for clarity, for the burdens of doubt, the use of those funds will be mainly devoted to ensure the strength of our balance sheet and, you know, as an activity of rotation to somehow finance the, you know, the investment opportunities that we have executed and, you know, some more that will, you know, might come.

Okay, thank you. It's okay, okay, thanks. Then the next question are coming from Artem from UBS. Hi, Artem.

Good morning. Thank you for taking my questions. I have three questions. So firstly, on margins, EBITDA and EBIT margins have remained under pressure so far. So what gives you confidence in delivering the 200 basis points margin improvement as per your full year guidance? And are you still committed to the target of reaching 30% EBITDA margin by 2027 that you outlined previously after FY25 results? And secondly, on StoneShield, so following the StoneShield's investment and board representation, should we expect any changes to really strategic priorities, capital allocation, or balance sheet management all the time? And finally, on the recent wildfires in Spain and France, have you seen any impact on bookings, considerations, customer behavior in affected regions?

And do you expect any broad implications for summer trading? Okay, Artem, time for your question.

The first one, regarding the margins, I think first half it's true that we didn't see a nice flow through coming from the revenues to going to the EBITDA. I think a big part of the impact from that margin going down was due to the fact that we have been close to two key markets, two key hotels, sorry, like Don Pepe, Gran Media Don Pepe, and París de Cancún. They have been on refurbishments. And you know that the impact in H1 was around 20 million euros compared with last year in EBITDA levels. And it's not the only thing that you don't have income, but you have also some expenses linked to the hotel closure and also the reopening in Q1 from the Paradiso Cancun, and that has made a lot of damage to the margins. Also, another thing that has made some damage has been the performance in Mexico. I make a calculation. I know sometimes it's easy to make numbers, but the underlying EBITDA, Sorry, underlying operational margins, excluding these two effects, the Mexico situation and the closure of these two hotels, we have improved around 200 base points on the EBITDA levels, from the operational point of view. And I think the company is making some efforts to go through that. and I think we will see probably it's going to be next year that when these two hotels are going to be open and we will see some improvements in the Mexico destination, the market will see this increase in margins for sure.

So our term in line with this, the company is fully committed and one of the main programs that we have in place and it's on our day to day. It is true that this year, you know, the fact that some of our best hotels in terms of the margin are closed impacts, you know, the Mexico factor as well as Stephane has just mentioned. But, you know, we are working towards that objective. The part that has to do with the headquarters and corporate expenses is underway and is working fine. The development expansion, as I'm sure André will explain later, is okay. And so as soon as these hotels' big contributors of margin reopen, we are sure that we'll be on track to meet the target. With respect to StoneShield, I think the company has repeatedly communicated, you know, the strategy to the market, and it hasn't necessarily to be changed because of the entry of a new shareholder.

And if I may, Artem, this is André, good morning. Just in terms of the wildfires, the unfortunate wildfires in the south of France and in Spain, there's no impact in our performance. To be honest with you, those are regions which are not really leisure and resort regions, so it's very unfortunate, but we have no impact on the performance.

It's okay, Artem, with the answer? Yeah, thank you very much, very clear. Just a quick follow-up on EBITDA 30. Just wanted to confirm, should we look at EBITDA ex-capital gains or EBITDA, rather, when we look at this 30% target?

Look, it's EBITDA without capital gains. And as you know, the fact that also we have changed some of our leases to variable leases and that has an impact on the margin, we would love to have, you know, the EBITDA target. But our president is pushing us to get the EBITDA, even if we change the perimeter of some of our leases and convert them into variable. So it's pure operating recurrent. Excluding Capital Games, and Evita.

Thank you very much. Okay.

Thank you, Artem. Then the next question is coming from Guillerme Mateo from CaixaBank. Hi, Guillerme.

Hello. Good morning. Thank you for taking my question. So three, if I may. So the first one, if you could provide more details regarding the rationale behind the several hotel stake acquisitions carried out in the second quarter of this year. The second question regarding Mexico. So, you provide expectations of sun stabilization in Mexico for the second half of the year. Is there any color that you could add on this? In recent weeks, several companies have been commenting about the normalization of bookings performance in the most affected corridors by the crisis. Have you seen any normalization of bookings growth into Spain versus early conflict run rates? Thank you.

For Ignacio Pardo speaking, as for the investments done on the H1-2026, the investments that we've completed to this first half are really fully consistent with our strategy and selectively increasing exposure to high-quality assets that are already well known to us as we operate them. We remain open to similar opportunities going forward in order to create value in repositioning and operational improvement or a more efficient ownership structure. But our approach will remain, as it's been before, highly selective and opportunistic. Any potential transaction in the company needs to compete for capital gains against all the alternatives of the company. We try to keep a disciplined investment approach and evaluate each opportunity on a case-by-case basis and also trying to generate projects capable of generating attractive risk adjusted. In fact, we are taking our minorities share in certain of these companies as a sort of key money instead of just this budget under management agreement.

Hi, Guillerme. Good morning. This is André. In regards to Mexico, you know, there's still uncertainty in the market. However, we see certain trends of stabilization in certain specific regions of the country. As you know, we're entering the summer and then Preparing for the winter season. So we are optimistic about winter season level of recovery. And specifically for us, it's the reopening of Paradisus Cancun that, as you know, is really a driver of business for us in Cancun. So that is the case for Mexico. In overall terms, I think that without simplifying, we have to say that globally, When you look at the business that we have on the books, our expectation is obviously for Dominican Republic to offset some of the decrease in Mexico, as well as south of Spain, Canary Islands, to keep pushing part of that recovery to offset the consequences. Emission business from Europe to the south of Europe has been very strong. It's been double-digit. APAC region, Asia for Asia is improving, and we have little impact from the Middle East. But we have to say that Spain continues to have a strong pattern of business, and so is the south of Europe in general. So we have a positive outlook for this. We would say that globally, besides the challenge of Mexico, we see that business on the books, performance versus last year and margins are on a quite positive trend. Not sure if that answers the questions, Guillerme.

Yes, thank you. Just to follow up on the first one, do you have expectations on the size of potential investments that you could do, something similar to the 100 million euros that you mentioned in terms of divestments?

Jaume, first, before replying to this one, as Juan Ignacio said, we generally prefer taking minority stakes with partners and, you know, key money when possible. So, in the case of the investment in New York, We should have paid a key money to retain the management agreement that we have. And instead of that, we invested with a partner. The fact that we are managing the hotel removes a lot of uncertainty around due diligence. And so all the operational due diligence is covered by us. So that gives the vendor, the seller, you know, the guarantee that we can execute the transaction so we get favorable terms. We have always said that we'll be paying attention to those kind of opportunities, but we cannot commit to an amount. All we say is that we'll rotate assets to compensate that and to have more capacity to do these opportunistic investments, always maintaining the discipline of debt. To give you an example, the investments that we have already done this year, all of them have, you know, double-digit cash-on-cash returns, which is one of the criteria that we follow.

Thank you. Then now is Fernando, Fernando Abril from Alanta Equities. Hi, Fernando. Fernando? Okay, then...

Sorry, I was on mute. Do you hear me?

Yes, perfect. Thank you.

Okay. Go ahead. Thank you. Sorry. Thank you for taking my questions. No, just a couple of follow-ups. First, on the plus above 100 billion disposal target for the next 12 months, let's say, it's just to confirm that for the moment any server pack is ruled out. because you see better investments elsewhere, I guess. And second, a little bit more if you can elaborate on the three acquisitions of the state minorities, the implications on the P&L in each of them because in some of them you are, you know, buying back a lease agreement and other ones you are moving from a lease contract to a management contract. So I was wondering if you can give us some implications on the P&L. for each of them, and how this could affect the group EVDA margin overall. Thank you.

Fernando, the answer to your first question is no for the time being in terms of share by back. The first goal, as I said before, is to strengthen our balance sheet and to kind of find us new opportunities. So we'll see. Not for the time being. With regard to the second, it's, as you prefer, for example, New York, the one that we took 20% with a partner. It's a hotel that we used to live. and so we've accounted for the termination of the lease agreement and the impact has been explained in the accounts and as of now we have converted that lease agreement into a management agreement so we'll receive fees and also hopefully we'll have dividends related to our participation so overall the situation has been

On that one, Angel Luis, you were reporting 100% of the revenues of that hotel, so I don't know how big was that hotel into your P&L revenues and AVDA, and now I guess it will only be the management fee, so I don't know if there will be a big hit, obviously you will have the dividends from the JV, but I don't know, in the P&L, the implications that this deal will have.

Fernando, that's Stephane. I completely agree with you that when we move from rental to lease, we have an impact on the EBITDA level, but at the end, we need to check for the cash point of view. I mean, it's true that it was a pitch lease that we had in New York, We had an EBITDA of probably 10 million euros, but at the end, the cash, because it's a piece list, you had the EFRS system that has the impact on the amortization and depreciation, and also in the financial point of view, and the net cash that you get was below that. That means it was, I don't know, one million or something like that. Now, with the fee that we are going to collect and the possible dividend that we are going to collect, the net amount, the bottom line amount is going to be higher than that. I don't know if that answers the question.

Fernando, happy to discuss with you and, you know, the IR department and myself are available, you know, to give you all the explanations one-to-one later on. Sure.

Sure, thank you.

And also about Benidorm, I think Benidorm we had for three years, the management culture that we had, it was for the three years, and with the minorities that we have now, they give you the opportunity to spend the management culture for, I don't know, 20 years. I think it's for 20 years now. And that gives us a lot of visibility for the business. Okay? Fernando.

Okay, thank you. Yes, thank you very much.

Thank you, André. Fernando. Now the turn for André Juliá from Dutch Prime. Bonjour, André.

Good morning. Congratulations for all what is going on. Three questions, if I may. First one, very brief on Cuba. Just wanted to be sure that we are talking about a definitive exit from the country, and the write-off is really the last thing to take into account on your balance sheet. Second question about development and what you're doing at the moment between the refurbishment, the small investment and so on. Do you have the feeling that you have enough brands or do you think about developing some new ones or acquiring some other ones? And the third question, to come back on the leverage, the capital allocation and so on. So if we consider that you will sell for more or less $100 million. In the next 12 months, could you consider to be a little bit more aggressive in the future? And how could you consider the reallocation of your cash? Is the 2.5 times net debt on EBITDA a mantra? Or could you go above and could you be a little bit more aggressive through share buybacks or return to shareholders in general? Thank you.

Bonjour André, this is André Gerondeau. Thank you for your questions. First of all, Cuba is a definite exit from the destination with uncertainty at the time being. On the development side, obviously, we continue to strengthen our positioning in our key priority destinations. We've announced a program of growth in Tunisia. We have something else moving into Morocco. And we continue actively Southeast Asia, Middle East, and obviously everything that is related to the Mediterranean Rim and Latin America. Yes, we're pushing. We have an expectation of gross unit growth close to 5%. Obviously, we need to consider the Cuba situation. We will continue to develop. In terms of brands, we feel that we have enough brands. As you know, we have a couple of soft brands, specifically Meliá Collection, which allowed us to continue growing in the portfolio. And with the addition of the Meme Hotels and the Zen Hotels, we clearly believe that we have enough brands. Obviously, we're looking for larger opportunities of growth and growth platforms with nothing specifically for the time being, but very actively developing our strategy as well continue on the commitments that we have of about 8,400 rooms and 40 hotels per year with an opening pace of about 35, which is what we think the company now has the ability to absorb. I will pass on the capital allocation question to Angel Luis, if that's okay.

Bonjour, André. Angel Luis speaking. Look, started by the end, the two, two and a half times is effectively a mantra for the next few years, as we have stated, you know, over the last couple of years at least. And no, we don't foresee any major change in our capital adaptation program. In terms of portfolio management, as we have stated also several times over the last few years, we have been more hectic. Now the portfolio that we have is what we want to have, so we'll make little adjustments in our participation, so the rotation It's going to be, you know, opportunistic. We have this 100 million Aprox to sell over the next 12 years, but this will be allocated to, you know, kind of a closed circuit to finance the opportunities to invest. So no major changes for Sinti. Six months.

Okay, André. Okay, thank you. Okay, thank you, André. Now the last Last question comes from Ivan Sanfélix. Buenos días, Ivan, from Renta Cuatro.

Good morning and excuse my broken voice today. I'd like to ask you on implications from the exit from Cuba. Is the exit going to change at all the growth strategy for Meliá? Are you going to pursue any additional growth opportunities? Or are you comfortable with the current pipeline or is it still early days to decide? Thank you.

Good morning, Ivan. This is André. Thank you for your question. No, obviously, as previously mentioned, we are continuously strengthening our development strategy. Certainly, with the situation, we need to go for an extra effort, but that's what we've been doing so far. So the commitment of about 8,400 rooms, 40 hotels per year, and looking for a growth platform that would make sense continues on. But I think this is business as usual in the sense that we keep looking for opportunities and we don't have a limit of growth if the opportunity is the right one, so we'll continue to strengthen that.

I'm sorry, if I may, Ivan, just to clarify and to be more specific. Thank you, Ivan.

Sure. Thank you very much. Okay. That was the last question for today. Then thank you once again for joining us today and for your continued interest in Media Hotels International. Please do not hesitate to contact our Investor Relations Department for any further questions you might have. Thank you. Thank you very much, everyone, and have a nice summer.

Bye.