Aena S.M.E., S.A.

Good afternoon, everyone, and welcome to our Q1 2025 results presentation. This is Carlos Gallego speaking, Head of IR.

It's a real pleasure being with all of you today. Our CFO, Ignacio Castejon will host the call together with myself.

As usual, we are going to cover some of the main topics explained in the results presentation that is already available, both on the Aena and on the CNMV website, and we'll finish with a Q&A session. Without further ado, I give the floor and going to Ignacio Castejon.

Thank you.

Thank you very much, Carlos. Good afternoon, ladies and gentlemen, and thank you for joining us to go through our first quarter 2025 results presentation today.

I'll start sharing some highlights with all of you, and then I'll give back the floor to Carlos to further expand our performance through this quarter. At the end, there will be a Q&A session as stated by Carlos.

So I'm referring now to traffic. So I would go to Slide 4.

In group traffic increased year-on-year by 4.9%, as you can see over there, reaching almost 78.3 million passengers. In the Spanish network, the annual increase was 4.7%, and we reached almost 63.6 million passengers, beating our expectations and recording the highest ever traffic in any first quarter.

As you know, you are well aware that last year, 2024 was a leap year and that the Easter break took place during the first quarter of 2024. We don't see at this stage reasons to change our traffic, our February traffic guidance for this year.

April traffic is performing well, continuing the positive trend seen over the last quarters. The European market and most of our international markets are performing in line with our expectations.

On the other hand, we observed a certain slowdown in the domestic market and regarding the U.S.A., the summer schedule looks higher than the comparable figure in 2024 as of today. However, we are seeing some early indicators that might result into a less strong demand in the following months.

Having said all that, I would like to show that the current aircraft shortage, spare part supply chain issues, economic and political uncertainty, raising airfreight and accommodation prices, especially in Spain, could affect both the demand and supply in our industry and therefore, results into changes in the traffic forecast. Now I will move to financial performance.

With respect to the first quarter 2025 financial performance, total revenue went up by 7.5%, up to EUR1,325.6 million. On the cost side, the total operating expenses increased by 3.2%, up roughly to EUR890.6 million.

This means that in total EBITDA came to EUR643.6 million, and the margin stood at 48.6%, comparing to 47.1% in the first quarter of the previous years. All in all, the net profit slightly exceeded EUR300 million.

With respect to commercial -- on the commercial side and now in slide number five. I would like to mention that the growth that we started back in 2022 continues this year in 2025.

Total sales have gone up by 10% in this quarter and on a per passenger basis by 5.1%. Revenue from fixed and variable rents invoiced in the period increased by 15.8% compared to the first quarter of 2024.

I would like to highlight several things on the commercial front. Our tenants finishing their units, and therefore, we are adding more -- more renovated spaces, sorry and a more complete offer and new brands.

The lot of the Canary Islands, I'm referring to the duty-free business, has operated this first quarter above the minimum annual guaranteed rent level for that lot. The outstanding performance of the car rental and VIP services have been incredible this quarter.

The car rental revenue increased by 32.7% year-on-year, reflecting the sales increase and improved conditions of the new contracts that are entering into operation in November -- the first of November of last year. With regard to the VIP services, revenue increased by 33.7%, thanks to a strong demand in the VIP lounges, plus 18% and also in the increase in the number of users.

Real estate revenue also increased 9.7% year-on-year in the context of these real estate activity, in our real estate businesses, I would like to highlight and I'm happy to announce that we have received proposals to develop the land plot for logistic purposes in the Barcelona Airport. This is a 50-year contract in which China will be collecting a monthly rent and the logistic operator will be responsible for the CapEx investments.

On the international front, international revenue and EBITDA were above EUR168 million and EUR88 million, respectively. Our international assets keep performing positively and delivering growth and efficiency improvements.

Please note that this quarter, the reported performance of our international activity in our consolidated figure was affected was positively affected by an insurance compensation received in Luton also was affected by the end of our construction activity in ANB and the beginning of construction activity in our subsidiary -- in our second subsidiary in Brazil, BOAB. You know that all this construction activity and how it is accounted for in our books has an impact in how we report income and cost, although it's neutral from an EBITDA standpoint.

With respect to the future capacity expansion at Luton, I would like to mention that on April 3, the British Secretary of State for Transport approved the expansion of airport capacity from the current 19 million passengers to 32 million passengers. Starting on that date, there is a six-week judicial review period in which there might be arguments being presented against such a decision.

Once this DCO has been granted, the Luton Borough Council will have to decide how and when that expansion is carried out. These are positive news for us.

And as we said in our 2024 results presentation in our call at that moment in time, we would welcome the opportunity to collaborate with the Luton Borough Council to make that project happen. As you know, in the Annual General Meeting held back in the April 9, all the resolutions were approved, including by one share split that we expect to execute in the following weeks and also the dividend payment of EUR9.76 per share out of our results of last year that was paid last week.

Before finishing with this part of the call, I would like to refer to the very serious event that took place on Monday mainly affecting Spain and Portugal. I'm referring to the general blackout that affected the country.

In this regard, I would like to highlight the robustness and effectiveness of the company operations during that day. All airports were operational in the outage, thanks to the contingent power systems in place at the airports, the transitions to these backup systems happen without disruptions and the transitions back to the ordinary power systems also happened without major disruptions.

The operations and management of the airports through a network demonstrated once again its strength by helping to keep all the airports operational and coordinated during that day. Overall, the Spanish airport served 93% of the commercial flights that day.

I would like to thank all the teams involved on our partners. That day was a difficult day, but the company reacted in a very positive manner.

This is the end of my brief presentation. I will join you, of course, in the Q&A session afterwards.

Now I'll give the floor to Carlos to go through the whole presentation. Thank you, Carlos.

Thank you, everyone.

Okay. Thank you very much, Ignacio.

Let me go through some details with respect to traffic and financial performance of the company before moving to the Q&A session. On traffic, our CFO already covered the traffic performance at the group level and in Spain, so I will comment on what happened in our international concessions.

Luton Airport 103.6 million pax, that's an increase of 7.3% compared to Q1 2024. In our Brazilian assets, ANB managed more than 4.2 million passengers, plus 4.1% year-on-year and BOAB recorded almost 6.9 million passengers, 6.1% higher than the previous year.

Digging deeper in the Spanish network, international traffic grew well above the domestic 6.7% versus 1% in the domestic one. Therefore, the market share of international traffic moved from 65.3% in Q1 2024 to 66.6% in Q1 2025.

European traffic represents 84.3% of our international traffic, 0.74 bps lower than in Q1 2024 because of the extraordinary early destination year-on-year traffic growth with Asia, Africa, Middle East and to a lesser extent, with LATAM. With respect to our main markets, growth from the British market has been -- sorry, 3.8%, German market grew 4.6%, French near 7% and Italy at a very healthy 15.3% despite the adverse calendar effects.

In terms of performance at our Spanish airports, Madrid has an increase of 4.5%, Barcelona 3.2%; Palma de Mallorca 1.9% and the Canary Islands 3.6%. 15 airports have achieved a record number of passengers in the month of March.

So good figures, especially given the challenging base. With respect to the airlines operating in Spain, the top 10 companies carry out circa 50 million passengers.

That's an annual increase of 4.6%. Locals traffic grew by 6.7% year-on-year with Iberia plus 9.3% and Ryanair 7.8%, leading the growth.

Low-cost traffic market share climbed to -- sorry 60.1%. As usual, you have a full disclosure of the passenger breakdown by top airline countries in the Slide 32 and 31 of this presentation.

Let's move to Slide 11. Ordinary aeronautical revenue grew by -- sorry, 8.2% year-on-year, mainly due to traffic performance and the year-on-year traffic increase in January and February 2025.

The dilution was low only EUR3.5 million in the whole Q1 2025 in comparison with the EUR 28.3 million in the first quarter of 2024. Moving on to the commercial business.

As Ignacio mentioned before, total sales increased by 10%, that's the double of traffic growth. On a per passenger basis, the growth was 5.1%.

Total commercial and real estate ordinary revenue grew by 9.7% year-on-year, reaching EUR467 million and again, above traffic performance. This is explained by both higher traffic and higher yield, plus 4.7%, reaching EUR7.4 per passenger.

On Slide 13, we see a commercial revenue amounting to more than EUR473 million, resulting an increase compared to Q1 2024 of 9.6%. And once again, real estate revenue increased by EUR9.9 million to close to EUR30 million.

Excluding the multi-year sidelining and other adjustment, now we are on Slide 14, commercial and real estate revenue grew by 11.6% to about EUR452 million and the revenue on a per passenger basis grew by 6.6%, reaching EUR7.11 per passenger. I think it's worth analyzing the information along commercial business in lines to comment on some specific details.

I would like to start by stating that the sales of our tenants in our core retail activities, Duty Free, specialty subs and food and beverage grew above traffic. In the case of duty-free, growth was 19% in the case of specialty 7% and in the case of F&B, 6%.

The extraordinary performance in duty-free sales is explained by the good progress on the construction works with a vast majority of the main stores completed, especially in Madrid and Barcelona. In Palma de Mallorca, at the beginning of April, the works of the 76% of the surface subject to a refurbishment in 2025 were completed.

We are especially proud of the growth in sales in March, also plus 19% despite the adverse timing of the Easter period. Total business revenue in duty-free grew by 6.8% compared to Q1 2024, reaching EUR120 million.

The Canary Islands lots, as Ignacio mentioned before, was the only one that see the minimum guarantee rents. The good performance in food and beverage and specialty shops can be explained by new brands and tenants, the improvement of the commercial mix and in the case of the food and beverage, additional commercial surface.

Total business revenue in food and beverage grew year-on-year by 4.8% to EUR79 million and specialty subs based on both businesses is in line with the traffic growth. Taking a look of the tenders of the last nine months, sorry, we awarded 23 tenders in food and beverage with an increase of the minimum annual guaranteed rents in 2025 and 2026 of 30% and 32%, respectively, compared to 2024.

And in Specialty subs, the tenders awarded were 30 and the increase of 70% and 74%. These hikes are partially due to some additional prices in comparison to 2024.

In Palma de Mallorca, the premises of both businesses will enter into operation from the end of Q2 2025 until mid-2026. VIP services business revenues keep growing every quarter 37.3% year-on-year in Q1 2025 to EUR 42 million with an income per passenger of EUR0.66, plus 31% compared to Q1 2024.

Within this business line, VIP launches is the main one, representing 84% of the revenue. Its revenue grew by 39% because of the higher number of users, plus 19% at a higher average price, 17%.

As the demand is stronger than ever, the penetration rate increased by 13%, standing at 2.1%. Car rental performance was also outstanding.

Sales grew by 9% and the total business revenue by 30.4% to EUR54.7 million. The reasons behind that, this increase are the higher number of contracts, the higher average transaction value of the contract signed by the users and the more regulative conditions of the new contract that came into force last November 1.

Car partner business revenue grew well above domestic traffic, plus 9.2% to EUR47.7 million, while domestic traffic increased by 1%. The main drivers behind the revenue growth are the streamlining of the available parking spaces and the pricing policy, which puts the average ticket by 1.5%.

Let's spend some minutes on OpEx. On Slide 15, you will see that consolidated operating expenses amounted to EUR692 million, that's an increase of 4.8% year-on-year, in line with traffic.

The main factors behind this increase are related to the staff cost increase in the group, the growth of the electricity bill, higher maintenance and security costs in Spain and lower fuel accounting in Brazil. If we look at the Spanish network, operating expenses amounted to EUR597 million.

That's an increase of 6.6%. The staff costs grew by 11% to EUR142 million, mainly due to annual salary reviews.

That's 2.5% higher, social security costs and the head count increase. Other operating expenses rose by 5.8%, reaching EUR413 million.

Although OpEx growth was higher than traffic growth, Aena accurately retains the leadership in the OpEx per passenger metric. According to 2024 data, Aena OpEx per passenger was EUR6.24 much lower than those of its European peers.

Slide 16 shows a higher detail of the main items of the other operating expenses for the network in Spain, both in million euros and in a per passenger basis. If we look at the cash generated by operating activities, I am referring to slide number 17.

They amounted to EUR820 million. That's an increase of 13.4% at the group level, consolidated net financial debt increased -- sorry, decreased to EUR4.9 billion.

The net debt-to-EBITDA ratio stood at 1.77 times. In this sense, let me recall you that last Thursday, we paid out over EUR1.5 billion in dividends.

In the next slide, Slide 18, you can see that fixed trade debt stood at 76% of our total debt compared to 77% of 2024. The average cost of our debt decreased to 2.29% compared to 2.54% in 2024.

I will end up commenting on international assets. Starting with those on Slide 19.

We are about to recover 2019 traffic, 98.6% in Q1 2025. The EBITDA stood at GBP38 million, plus 75.3% compared to Q1 2024, but including the insurance compensation of the parking fire, the EBITDA margin grows at a healthy 70 basis points to 33.1%.

Let's move to Brazil, Slides 20 and 21. I would like to highlight the traffic growth plus 4.1% in ANB and 6.1% in BOAB.

The negligible CapEx in ANB and the mandatory CapEx, we already began to spend in BOAB. As you know, EBITDA margins are affected by the accounting standard IFRIC 12.

Excluding this impact, the EBITDA margin in ANB stands at 65%, 219 basis points higher than in Q1 2024 and in BOAB at 63.3%, 130 basis points. Well, that would be the end of my presentation.

So Desiree, if that's okay for you. We are ready to move to the Q&A session.

I can see that there are many of you who will like to clear up some doubts about this presentation. And in order to give everyone a chance to speak, and to keep it out this time limit of this presentation, I will be grateful if you could limit your comments to a single question.

As always, the Investor Relations team is available to answer any further questions you may have. Thank you.

Good afternoon everyone. And thanks Aena team for taking questions.

Apologies. I had a technical issue.

Apologies if you've explained this during your presentation. But my single question would be electricity costs went up and I would like to understand what the moving parts are behind this trend, which seems to be a big change versus previous year quarterly trend.

Thank you.

Thank you very much, Luis. Happy to hear from you.

This is Ignacio. With respect to energy cost basically average prices for this first quarter of 2025 compared to average prices of 2024 are higher, and that's impacting our line.

You know that we have a hedge in place for the medium to long term and also a short-term hedge. On average, I would say that we are protected for 2025 for around 50% of our energy cost exposure.

Therefore, we are being impacted by those increases. I'm lucky to share with all of you.

I'm happy to share with all of you that we finally signed our first PPA very recently, is a small one, but it's -- I think we are moving in the right direction with a protection for 10 years for part of our supply. And I will end up, Luis, just basically stating that we are making progress with our solar farms.

And hopefully, in the next 12, 24 months, we'll start having some energy costs coming from our own production and therefore, reducing the exposure to the market. And that will be all from my side, Luis.

Thank you.

That’s also clear. Thank you.

Hi, thank you very much. I guess sticking to one question.

If we look at the very strong spend per pax that we've seen in variable rents, 10%, 11% as well as in the total commercial revenue, 6%, 7%. Do you believe that these run rates are sustainable going forward for the next few quarters, ballpark?

Is that the right type of growth you would expect to see in commercial. Thank you very much.

Hi, Cristian, this is Ignacio. Thank you very much for your question.

I can -- you know that we don't normally provide guidance for the year with respect to specific items of our P&L or business segments. I think the performance this quarter has been very positive.

Traffic has helped new brands, new units, more space. So we have had there some tailwinds that are helping us through the next months, we'll have more surface being been open in Palma and hopefully, in the Canary Islands in some airports, we'll have a better offer.

So we are hopeful, sorry that we'll keep working in a positive manner. But as you know, through the year, the traffic evolves, the passenger mix changes and that will likely affect consumption.

As I was saying at the beginning, at my opening remarks, we are positive with our traffic guidance, but we are seeing some markets that are evolving more positively than others. So there will be many factors that could impact that potential future performance.

Thank you, Cristian.

Thank you very much.

Yeah, thank you very much for question. I'll just come back to your point around potential traffic weakness going into the summer.

I just wanted to clarify, is that just a general comments around uncertainty that you're seeing? Or are there specific data points that you're now seeing in the data or capacity for the summer that would lead you to be a little bit more cautious with regards to Aena.

And any commentary, I know it's a small exposure, but anything you've seen around the U.S. traveler would be interesting.

Thank you.

Thank you, Graham. And I'm very happy you have made that question because perhaps I was not clear in my opening remarks.

We -- I was not saying that generally speaking, we are seeing a weaker demand. I was referring some specific indicators in relation to the U.S.

market that might saw some kind of potential less strong demand. Having said that, for the U.S., we are seeing more scale -- or more scale seats than in the previous year as of today.

So it's just an early indicator that could result into that less stronger potential weaker demand. But generally speaking, April is performing well, as I was saying, and the positive trend that we are seeing is there.

We are seeing some weakness -- some weakness sorry, with the domestic market. That's the info that we have in front of us the first quarter -- the first quarter, the Spanish market, the domestic market has grown by 1%.

And we are not seeing that trend could go up. I will stay there could go down.

Generally speaking, no weaker demand for summer in summary. The U.S.

-- your second question looking at the scale of capacity and comparing that number with the 2024 number at the same date, is higher, but it's true that we are seeing some -- weaknesses, sorry, with some other early indicators that could affect those capacity numbers. Having said all that, Graham, we have a current aircraft shortage, potential supply chain issues affecting spare parts, huge economic and political uncertainty, rising prices, especially in domestic prices for the Spanish market.

So many things could happen. But apart from the points that I have just said with you, Graham, that's what we are -- we are not anticipating a deviation from the guidance that we provided in February.

Thank you.

Hi, good afternoon. So my one question would be on this insurance compensation at Luton that you've registered once more in Q1 after the Q4 one as well.

So I was wondering if we should account for more of these to come for the remaining of the year. Thanks.

Hi, Elodie. If I understood you well, your question is about if we should expect more compensation payments coming from the Luton situation.

The company is planning to get full protection with respect to the damage, the damage coming or resulting from the fire and also from the loss of revenue because of the lower commercial revenues that are getting -- we are having because that facility is not up and running. We will keep working with our insurance companies in order to have that protection duly paid by the insurance companies in the next month.

That's all of what I can disclose so far.

Okay, thanks.

Hello, hi there. Sorry to stay in Luton, it's not the most glamorous part of your portfolio?

Is it? Can you help me understand what happens in the event that the government approval for the expansion of the airport is absolutely confirmed and Luton Borough Council needs to get the agreement and get someone to build it.

Is it -- does the process start with a one-on-one negotiation with you because you're the incumbent? Or do we see just a fully open tender and it becomes just equivalent to you bidding for any other new potential airport transaction elsewhere in the world?

How will it work? And does your incumbency give you an advantage to potentially win this opportunity?

Thank you, Andy. This is Ignacio.

Well, we don't see the situation as an advantage because we are the incumbent. We see the situation as a win-win for everyone involved in this situation is positive news for grantor, the Luton Borough and is also positive news for us, given our performance, operating and developing that airport and our experience and skills improving airports.

We see this as an opportunity, as a win-win opportunity for both parties to be able to look for a solution that allows our grantor to move with the project as fast as possible and in the best possible manner, given that we are already there, and we are a second-to-none airport operator and developer and we welcome the opportunity to be able to do it. That's how we see this situation and hopefully, that will -- and hopefully, that's how we -- our grantor will see the situation, but our concession is expiring 2032 as of today, and we'll have to have many discussions and negotiations in order to look for how we accommodate this new scenario between the 2 parties.

Do you think it [Indiscernible]?

Sorry?

[Indiscernible]

I don't know.

Yes, thank you. I wanted to ask you about the aviation tariffs for 2026.

Perhaps it's a bit early on in the year, but I wanted to ask you is the effective study that EMAS would rise next year, in particular, given that there was significant dilution. I think there was like almost EUR130 million revenues that were lost due to dilution.

And I wanted to, in particular, ask you if EMAS were to rise next year, would it impact the tariff path for DORA III or it's two separate things? Thank you.

Thank you, Jose Manuel. This is Ignacio speaking.

It's a bit early in the year to start talking about 2026 tariffs. We haven't started the consultation process with our carriers, our partners that is established in the applicable regulation.

As you know, we normally -- the company normally approved at the Board meeting of July the applicable tariff for next year. So at that moment in time, is when we will communicate with all of you where we stand in that regard.

With respect to the formula, I think it's a very straightforward one with respect to dilution recovery from the previous years. So that's how should operate and is the formula there.

And in 2026, as you know, is the -- we will be entitled to recover that dilution, given that the caps will not be applicable. And that's where we are with respect to tariffs 2026, Jose Manuel.

Excellent. Thank you, Desiree.

There are no further questions. So I think we can end the results presentation.

Thank you very much, everyone, for joining us today. Thank you.