Thank you. Good afternoon and thank you for participating in our full-year results 2018.

This is Julián Díaz, Dufry's CEO. Here, with me, today we have Andreas Schneiter that is going to be replaced by Yves Gerster that is participating in the meeting on 1 April.

Before anything else, Andreas, I would like to say thank you very much for all these years, your contribution to what Dufry is today has been one of the most relevant and important. I appreciate you like a person, but also like a professional, okay?

I want to, obviously, say this in front of everybody because you need to – in my case, I don't give these things away quite often, as you know, but I think you deserve it. Thank you very much.

Then we move to the agenda. This agenda is part of what we published this morning in our website, the presentation that we published this morning.

In page 3, we have, obviously, the different subject that we are going to explain and present today. The first one is the operational performance and the strategy update.

I will do both. Then I will pass through Andreas for presenting the financials.

And finally, I will talk about the update of the trade and the conclusion in the last point, number 4. If we move to page five of the presentation, I think, finally, after what happened, especially during the second part of the year, we have managed to deliver a resilient set of financial results.

It was difficult because, especially during the third quarter, what we have faced is a situation in specific parts of the world that impacted the whole performance in terms of reporting. Most of the companies last year performed well in most of the regions.

I think what happened in Argentina, Brazil, and Spain is explained properly when we see the organic growth excluding these operations. Total turnover reached CHF 1.7 billion, an increase of 3.7% compared with previous year.

Finally, organic growth is in line with what we commented on during the last conference call, 2.7%. And excluding, as I said, Argentina, Brazil and Spain, the organic growth increased to 6.5%.

Shop development, the shop development plan was based in the scale that we agreed at the beginning of the year, internally done completely. 26,800 square meters of retail space open across different shops.

This is part of the new locations and expansions. And 34,800 square meters of commercial area refurbished in 94 shops.

Therefore, putting in perspective the numbers, at the beginning of the year, we have around 410,000 square meters of commercial space. And at the end of the year, we had around 440,000 square meters.

Contracts signed, during the year, that will be opened in 2019 and 2020 is 19,800 square meters. Those are new concessions.

I am going to go through the detail in the following slide. Gross profit margin increased again, 59.8%, 40 basis points compared with previous year.

And EBITDA was stable. In terms of margin, 12%, an increase by 3.3%, reaching CHF 1.04 billion.

Due to the challenges, I think the most relevant information that I would like to share is, obviously, the evolution of the cash flows. Free cash flow and equity free cash flow increased by 32% and by 97% compared with previous year.

In the case of free cash flow, what we have reached is CHF 620 million. In the case of equity free cash flow, we have reached CHF 371 million probably the highest performance in terms of generation of cash in the history of the company.

Cash EPS increased by 6.9%, reaching CHF 7.31 per share. And the acceleration, meaning the implementation of the business model, the business operating model, deployed and delivered to the company CHF 40 million in savings above EBITDA level and CHF 10 million, as expected, will be delivered because, obviously, it will – obviously will be the scope for the 12 months during 2019.

Finally, I finish a very good news. The board of directors, due to this increase in the, obviously, generation of the cash flow of the company has decided to propose to the annual general assembly of shareholders the dividend of CHF 4 per share.

It's around 6.6% with previous year. Even that, obviously, the total amount of cash that will be out is similar to previous year.

If we moved to the next page, page number 6, is organic growth comment. We had started the year with a very good shape, continuing what happened in 2017, 7.1% increase in organic growth.

The second quarter was also very relevant in terms of growth. We were very close to 5%, four-point-something.

The summer, the higher season, show a deacceleration to minus 0.7%, almost flat. And the reasons were explained at the time and also commented on today, is especially what happened in South America and in Spain.

And I will comment this with more detail in the future. I thinking in terms of the fourth quarter, we can confirm the company's again in a move of growth in organic growth, 1.8%.

Most of the growth is due to the new concessions opened. And it's important to mention the good performance in Europe and North America.

There's slightly performance increase – performance increase in Spain. Still tough conditions in Latin America.

And then lower like in terms of comparable in Asia, compared with previous year because we started in the middle of 2017 to grow very fast in Asia. Let's go to page 7 and let's comment the organic growth division by division.

Division Southern Europe and Africa in page 7, as I said. Organic growth fell by 2.6% in 2018.

The main, obviously, reason is low move is Spain. Why Spain?

Spain has increased international passengers last year at 1%, but the main subject is not the number of passengers. The main subject is the profile of the passengers.

What we have seen in Spain, and I think I comment on that, is a shift between international passengers, especially Swiss – sorry, Swiss, because we're in Switzerland – especially British and other nationalities with high spend per passenger shifted to [indiscernible] Spaniard passengers. The difference is three times.

Sometimes, four times. These passengers that are deviated from Spain to another country now are generation three and four times more spend per passenger than the Spaniards.

There are intrinsic reasons that we can, obviously, go through a bit. But the reality is that the performance in Spain has been impacted by that.

And also because the devaluation of the British pound. The most important part of international passengers in Spain are British.

And this is something that is going to be continue in 2018. The advantage that we have now is that we have started initiatives, already commented out in the previous call, that will change the trend and, in fact, the trend has been changing.

Now, during January and February, what we have seen is slight increase – significant increase – I wouldn't say slightly – in Spain due to these changes. What are the changes?

In principle, there are flight tests, airports tests that we are doing AENA in order to accelerate the sales in the Spanish airports. This is basically based in assortment, based in pricing policy, based in square meters, based in location.

There are many aspects of the business that today required to be changed. Why?

Because this contract was created, was launched seven years ago. And the world, and especially aviation, has changed dramatically.

And we want to really reach a level of efficiency in this operation, what we need to change the way we work. But we are limited due to the contract we have.

As a consequence, the reality is that we change the contract – in the sense, from the commercial point of view, we do the things in a different way, or never we will reach the level of excluding the minimum annual guarantee in the lot number one and number two. That, for me, the critical point, is how to make it happen.

Then just to confirm, Turkey is back. You remember at that time that we drove 95% of the Russians going to Anatolia, they are back.

The operation is very good. It's performing very well.

And last year, we grew double-digit in Turkey. Greece did not the capture the suite of passengers.

The suite of passengers from Spain was captured in Turkey and in North of Africa. Italy, France and Malta performed well.

Positive high, I would say, single-digit growth. And then, Africa was flat.

Flat for that is 2%. 2% growth in Africa last year, especially with good performance in Morocco, in Egypt, in Nigeria and in Kenya.

If we move now to page number eight, what we could comment on is Division UK and Central Europe. Organic growth, plus 0.3%.

But the real organic growth, excluding Geneva, that was obviously the operation that was accrued at nine months because we lost the concession in – in October 2017, was 3.4%. This division has a very good performance, especially in the UK.

Very good and, obviously, solid. Also confirmed in Q4.

And the problem may be in terms of showing the performance in the different countries in Europe is the negative performance in Scandinavia, especially due to the devaluation of the Swedish krone. The reality is that the rest of Europe was performing very well, especially Switzerland.

In Switzerland, we had middle single digit growth last year. Obviously, assuming that Geneva was not part of the concession, the organic growth in division 2 was 3.4%.

If we move now to page 9, what we have is division Eastern Europe, MEA and Australia. Organic growth here was 15% in the year.

In the last quarter, we increased by 14.7%. I could say all the countries performed quite well.

The reality of the new operations, MTR, it's a duty-free train operation, the fast train operation in Hong Kong, and the new shops that we opened in Perth is very positive. In both cases, ahead of what we were expecting and contributed also to this development.

In Middle East, most of the operations delivered double-digit growth – Jordan, Kuwait and India. And Sharjah, single-digital growth.

In Asia, most of the operations, excluding the operations I mentioned performing well, especially Cambodia and especially Indonesia where we have seen double-digit growth in all the cases. Australia continues with a very significant double-digit growth again.

And Eastern Europe has been trending with other European markets. What is the meaning of that?

In some countries, we have been very good. In some countries, we have been almost flat.

The reality is that, in most of the countries, we have been positive. The only question here is that we are comparing with a very tough comparable last year, but we are positive in all these Eastern European countries.

Latin America. This is probably the most important in order to explain what the situation.

We started the year growing 9%, in line with 2017. The second quarter, we were flat, minus 0.2%.

And then, gradually, the performance in organic growth was deteriorating, minus 11% in Q3 and minus 10%, slightly better in Q4. The situation remains – and I am going to comment on this later on – remains unchanged.

What the main problem here is still, obviously, the deterioration that happened seven months ago of the currency in Brazil and Argentina. And the impact that these two countries also have in other destinations in the same region.

But the most important and relevant thing here is that the situation, it has no changed. It's exactly the same.

But we have, obviously, the expectation that the situation will normalize in Brazil during the next four or five months. It's happened in the past, like today.

The program will remain in Argentina. In Argentina, this time, with elections and with the situation in the country, it is not likely that, along 2019, we are going to share recover.

In any case, Argentina, just for your information, is a very profitable operation. Then the cruise line business.

This is a situation where I tried to explain in the past that is a change of scope in terms of the business. The cruise line business has a different P&L and a different performance in terms of all the financial aspects of the business.

What is different here in principle is the P&L. The EBITDA is lower because the situation of the market in cruise lines depends on the line of spend, obviously, per passenger.

And the consequence of this is because we pay rent every day that the passenger is travelling, no only one day or two days. And sometimes, if they are not very good customers, the rent normally is very high, but their returns are very good because we don't invest a lot.

It's a very good business in terms of generating more topline growth. It's a very good business in terms of generation, net profit and returns.

The importance of this business will be materialized during 2019. We are in the process to operate today 38 new ships.

Eleven new more shops will be starting probably in April, May, along this month. and former ships that will be in operation at the end of the summer.

If we move to Division North America, North America had a very good year last year, all the quarters was a very positive growth. The last one was 4.7%.

The main reason of this was not the duty-pay business. The duty-pay business was performing well.

It was the duty free part of the business. Why?

Because we depend a lot on Chinese there. And in the last quarter, what we have seen is a drop in the spend per passenger in all Chinese destinations in the US.

But in terms of the duty – the duty pay division was performing at the same level. If we move to next page, I will now comment on the passenger growth development in 2018.

What we have here is overall a positive development, 6.7%. Passengers at Dufry's operations were lower, mainly due to the, obviously, limited exposure to Asia we have.

In terms of the future, I can confirm again the same thing. In 2019 and 2020, we have, obviously, this forecast – an ACI projection.

In this case, it's a forecast, increasing by 5.5% and 5.2%. It's a very, obviously, good starting point, the number of passengers, the number of customers.

If we move to page 13, what I will comment here is about the 26,800 square meters of gross retail space that we opened during the year. I have put here some relevant ones, Madrid Terminal 4 for newer stores, MTR in Hong Kong, Perth, Malaysia, 50 new cruise lines with 48 stores.

We are now working with all the shipping companies, all the cruise line companies, Holland America, Carnival, P&O, Cunard, and Norwegian-Caribbean line and several new locations in North America, around 5100 square meters of commercial space. In terms of the other side, the 34,800 square meters of shops that have been refurbished.

What is the value of that? The value of that is, obviously, the possibility to improve the quality of the environment, engagement with the customers and also to increase the number of square meters and also the possibility to locate the shops in a better traffic flow.

We have opened three shops in Malaga, in Heathrow Terminal 3, in Glasgow, in Bali and in Cancun. I think, during 2019, we will have a very similar number of square meters that will be refurbished.

Next page, I will move to the contracts that we have signed that will be open during 2019 and a small part in 2020. Perth in Australia, Kuwait, New York City Terminal, Philadelphia, [indiscernible], Santiago, Boston and some other ships that I already commented on in the previous page, especially P&O.

Pipeline opportunities, still we have 37,300 square meters, most of them are located in Southern Europe and Africa, and we have a significant number also in the UK and Central Europe. All these opportunities are not only in airport travel retail.

We have also opportunities in other channels, travel retail channels. We move to page – now 15.

What I try here is to rephrase again the idea of the changes that we are involved. And I'm going to comment on these changes in one of the slides later on, but here is a brief explanation about where we are regarding the digitalization of the company and the initiatives that we commented on in the past.

We are, obviously, implementing Reserve & Collect, RED by Dufry, sales tablet, social media in FORUM and new generation of store. The functionalities are on the right side.

What is the intention? Here, it's two things.

One, increase the organic growth. The second one is to really develop a new way of engagement with the customers.

In terms of the update where we are. We have launched new generation stores in 2017 – Melbourne, Madrid, Cancun Terminal 4 and Zurich.

Later in 2018, we opened London Heathrow Terminal 3 and Cancun Terminal 3. And during 2019, we have already scheduled.

Buenos Aires is already open. And Amman in Jordan.

Reserve & Collect. Reserve & Collect is the tool we use as e-commerce online.

As you know, this is one of the ideas that we have been commenting on for many months. We have expanded the system in 39 countries, in 153 locations.

At the same time and in parallelly, we have developed a CRM base of travelers and RED by Dufry presented. This is a loyalty program in 40 countries and 200 airports.

We have also started the social media project FORUM that tries to communicate the values from the brands and from the travel retail to the market. And finally, what we have done also is expanded the digitalization of our employees in the shops.

We are talking about here, sellers in the shops. We have expanded this in 50 countries along 50 stores.

During the first months of 2019, we will complete the whole portfolio. And in 2019, the idea is to accelerate because the strategy behind these two different initiatives is increase the organic growth and increase the engagement with the customers.

Let's move to page 15. We have announced also a reorganization of the company back in January 2018.

The idea is basically to increase the agility of the company and the efficiency of the company. In what sense?

It's we need to react to the changes. Again, I'm going to comment to the changes in the market that are happening in the market faster.

And if we don't change the way we work, we cannot do it. We couldn't do it before because last year was the year of standardization.

Last year, we implemented the business operating model. Now, we are standardized again after the acquisitions of World Duty Free and Nuance.

And now is the time and it happened with this reorganization that was planned since the beginning to be more efficient and more agile. One of the things that is driving all the decisions is to focusing the customer, focusing the customers through guided content.

And we are going to facilitate implementation of digitalization of employees in all the shops. And this is the focus number one.

The number two is really from the commercial point of view to react faster to the changes in the market. And one of the most important initiatives already announced is we're going to merger the global platform, commercial structure with a division on commercial structure.

Meaning it will be only one structure deciding on the polity [ph] of commercial policies of the company. And then, the combination of divisions one and two.

We believe that with this combination of these two divisions, the Europe and Africa, the reality of the of the effect in the company on top of whatever – obviously, there is a synergy that we'll comment on in the future. We are in the process to calculate it exactly.

It will be also a faster way of deciding in all these countries in Europe and Africa. The final, obviously, reason is improve sustainability.

I would like to comment only in one of the project, Women at Dufry. Women at Dufry is a project we had started one and a half years ago with three specific subjects.

Number one is to promote equality, to promote the diversity and to avoid discrimination. And this is something that, when you are in a country – it's a very simple thing, but when you are in 65 countries, sixty-obviously-five operations, the reality is more complex than that.

And we have the firm commitment that any woman working in any country, independent of the region in the world, will have equal opportunities within Dufry. And this is one of the main projects.

There are several other projects, but this is the more relevant one. If we move to page 17, here what we are trying to summarize is the two proposals that I mentioned at the beginning.

First of all is the board of directors is going to propose to the general assembly of shareholders the cancellation of the 3.3 million shares that were part of the third buyback program last year. And the second one is the distribution on CHF 4 per share dividend.

The increase is 6.6% compared with previous year. The reality is that the company generates enough cash in order to continue paying dividend and doing a small/middle size acquisitions.

And the board of directors have decided that it is, obviously, a good opportunity to return cash to the shareholders. Then if we move to page 19, I would like, in these three or four slides, to really put in perspective what happened over the past year.

In the page number 19, what we see is the performance in airport retail sales. That probably is the most important channel that we have.

That happened over the past 14 years, from 2004 to 2017. The market growth is also – the market mix is also important.

In terms of growth, the company has grown more than three times the average airport retail sales during this period of time. It's an accumulated average per year of 18%.

And now, we are positioned as the leader in the market. We control more or less – about 20% of the total sales in airport retail.

This is, in my view, a very good starting point for explaining, obviously, the refresh of the strategy that we will explain during the market day and analyst on May 15. Let me move to page 20.

In page 20, we have the different phases of development of Dufry. During the first three years, we grew 18% per year.

The idea was to create an equity story to create an IPO that, obviously, was solid, as has been shown over the past years. During the second phase, the expansion and the ramp-up of internal and external growth with 18% per year.

And then, we reached a level of development at the time that the transformational acquisitions happened in 2013 and in 2015. From 2013 to 2015, due to the acquisitions, we grew 30% per year.

And then, the last phase is a more mature phase, is from 2015 to 2018 is 5% per year. What we are now – we are in a position as leaders of the market that, in my view, is giving us the opportunity to continue with elaborating the equity growth story in a way that will be very attractive for all the participants in the market.

And I think I will try in the next slide to explain how and what important subjects are. Let's move to page 21.

In page 21, we have airport retail growth on the top left side. On the right side, you have organic growth, Dufry's organic growth and total growth.

If you see, we have, in terms of trend, in the same way than the global airport retail growth. At the beginning was very fast, 13%, and the middle was 9% and then the business was 3.7%.

More volatile. More volatile because, obviously, this growth is also our consolidated figure based in the currencies of many different countries.

Dufry had different ups and downs in terms of organic growth, specifically in 2009 because the global crisis and everybody knows. And I am going to comment on that later on.

And then, the two devaluation inputs. One that happened in 2015 and on the other one that happened in 2018.

But then, the situation, as you see, is always following a positive trend. This is a temporal issue.

It's a one-off impact that normally requires between 6 and 9 months to recover. But the trend, in general, I think for Dufry has been always above whatever the market has grown.

If we move to page 22, this is a very interesting page. Again, I promise that we will discuss about this page during the analyst presentation and market presentation because, in my view, it's one of the most important ones.

We have tried to summarize the red part and the yellow part. The red part have been events that are really impacting the company in the short term.

For example, geopolitical instability we have seen. I don't know how many.

You don't know, but I can leave you more than 20. Okay, from Ivory Coast to whatever place.

Trade wars? This is something that somebody asked me one day and has been used like a weapon.

Is a trade war a problem for Dufry? Yes, it's a program.

Yes, but the taxes will increase in the countries and the duty-free will be with better competitive prices. I don't know what the consequence of this will be.

But it's what this is going to happen. Emerging market growth and volatility.

This is obvious. Including the currency volatility [indiscernible] Brexit.

How Dufry has really faced these short-term topics? With two things.

One was a flexible, variable cost structure. And 2009 is probably the best example where this 10% drop in organic, the company only dropped 100 basis points in EBITDA level.

And the second one is diversification. Diversification, meaning we are in several countries, countries where every year maybe we have a problem, but the company is sustainable due to that.

On the left side, we have a more long-term subject. New customers.

I put millennials. Millennials is just an example, but it's not only millennials.

It's new customers coming into the business. Online price comparison.

Online shopping and low cost carriers. It's another subject that I also would like to explain.

What is the way to fight really with these long-term subjects? I think the only thing we can do and we have started one-and-a-half half year or two years ago is adapt the business model.

Adapt the business model in one sense. Adapt the assortments.

We have now, and I commented on that, novelties, exclusives, a convenient product, only in promotions. Novelties and exclusives, we are selling today more than 45% of total sales.

More than 55% of total sales is in pulls in the shops. I think we are there, okay?

We are really having a very good opportunity to really face this challenge of Internet, online and all that with a captive audience and with a different engagement with the customer. The second part is the new experiences.

I think we need to create new experiences. The customers are requiring new experiences.

And we have two good examples here. One is new generation store.

Probably you have visited one of them. And the other one is FORUM.

It is social media platform that we have been using for communicating the values of the brands in the travel retail. And the last part is the new commercial concept.

And again, the new commercial concept for the new customers. And I think the reality here is new generation store is the Hudson new generation store shop that will happen in the short future and Dufry shopping and many of the concepts we have.

Assortments experiences and new commercial concepts. And this is something that we would try.

Probably we didn't do it properly. We try to explain regarding what is happening in travel retail and especially what is happening in Dufry.

And this evolution is happening today in the company. If we move to page 23, it's an example one of these red squares.

What happened in the Brazilian real? What happened in the Russian ruble and in the Argentinian peso?

Huge devaluation and also volatility. This was the main problem.

The Brazilian real devaluated 21% last year. The famous Argentinian peso, 98%.

And still, because obviously we sell in local currency, so we sell in mature currency in each of the local operations, the problem is the perception about price. We are natural hedged in the P&L, but the problem is the perception of price because if you are evaluating 98% for our Argentinian, the price of whatever product you have is multiplied by 2.

And this is that with time is soft. Why?

Because with time, all the local economies will import merchandise at the same exchange rate that we are paying. And the value between both – the savings between both will increase.

The second example here is the low-cost carrier. I think in terms of the low-cost carriers, it's our view that Europe is probably the territory where these type of traffic has developed more.

In the short hauls, on the right side, you have in 2009, this was 34% of total seats, available seats. Today, it's around 41%.

It's going to be higher in the future. Is this a problem?

I don't think so. I don't think it's a program.

I think it's a great advantage for the travel retail. What is the difference here?

It is the propension [ph] to expand. And we need to adapt and present concepts, commercial concepts, that will satisfy this customer.

But as far as the customers are coming, doesn't matter. The only thing is the average spend per passenger will drop.

Is this a problem? Not at all.

Again, it all depends on the commercial concepts that will face the situation. If we move to the next page, 25.

Here, what we have is something that I already commented on. Dufry is in the process to refresh the commercial concepts and the commercial model.

The answer is yes. Dufry is in the best position due to the size we have, the diversification of countries and the number of relationships created with landlords and with vendors, with suppliers to really accelerate the change, is what we want to do.

Accelerate the change. But we are not going to forget four things that have been in Dufry's [indiscernible] life has been tremendously important.

First of all is the in-depth knowledge of the customer. The second is the financial discipline.

The third is variable cost structure. And the last one is careful risk management.

We are not going to risk anything for having a concession in any part of the world. We can be wrong because nobody is perfect, but not intentionally done.

If we move to page 26, the strategic elements of evolution going forward. I think it's better that the detail is left for the analyst/markets day.

But in general terms, it's also commented in the press release, the midterm growth in terms of organic will position it 3%, 4%. Why we position it 3%, 4% now?

And before it was 5%, 7%. Because the situation has changed.

And we have – we'll obviously learn in the future too. And the reality of the travel retailer, you see, with all the changes we are – without taking into consideration the changes that we need to implement in the business model requires this reconsideration.

3%, 4% is achievable, I think so. I think it's a perfectly achievable target.

We are going to continue acquiring companies. It is the time we generate the cash.

On top of the dividend policy, we have a significant possibility to generate cash or continue with middle and small size. What is middle and small size?

Between CHF 400 and CHF 500 million companies. This is the middle and small size.

That can be digested very quickly and we can integrate in the business model very quickly too. Then, we need to, obviously, develop the new commercial concepts, Hudson, [indiscernible], Dufry Shopping.

We need to develop more exclusive products. All these things is also relevant.

And we need to really find and identify ways of being more efficient that will impact the P&L. Is this going to be a target?

Yes. And this is part of the reorganization.

Again, I cannot comment on figures because we don't have a final figure, but is one of the realities. We are continuing to focus in cash flow generation and returns and maintain a level between 2.5 and 3 times.

And the last one is very important too, continue with current dividend policy. Let's talk about different considerations in 2019 for Dufry.

Number one is the implementation of IFRS 16. Andreas will comment with more details.

But, again, we have a complete presentation for the analyst day. And the impact of this, obviously, one of them is the more relevant.

EBITDA is not going to be a relevant KPI for the company. And we comment on that, I think, three or four conferences ago.

The reality that we comment at that time is we need to identify with you also what are the reference KPIs that we can comment on. And we comment, in the past, organic growth.

We can comment in the past free cash flow, equity free cash flow, return on equity and cash EPS. This is what we comment on that, but it's, obviously, also an important part of what we need to discuss at Capital Day.

Then we are going to set up the midterm targets, based in the KPIs that finally will be used. And the best elements today that we can comment on is organic growth.

As I said, 3.4%; and equity free cash flow performed in line with the increasing turnover, with a starting base of CHF 350 million, CHF 400 million. And now, Andreas, I'm passing you the conference for continuing with the financials.

So, if we can change gear again. And before I start, let me just say a few words.

So, as Julián has said, this is my last official presentation with Dufry. I've been with the company for 16 years, of which 14 in some sort of shape with IR.

So, first seven years as an IR responsible and the last seven years as the CFO. Now, during these times, I have had plenty of opportunities to talk and to work with all of you here in the room and also with the people on the phone.

And I wanted really to thank everyone for the trust in Dufry, the trust in me as a person. Has been an absolute pleasure to work with all of you.

I'm definitely going to miss that. But I do hope that our path will cross again in the future.

So, looking at what Dufry is doing, I'm sure there's many good things ahead and I hope privately we're going to see each other or in another role maybe. But, now, let's move back to the financials.

Now starting with the growth, Julián has already talked about in quite a level of detail. So, I don't think we need to go through the details again.

I think, for me, there's just two key messages that I wanted to repeat because I think they are important. First one is Q3 has been the low point; and ever since, things have started to improve.

That has also been confirmed in the first weeks of 2019. So, it looks as if we're back on track to accelerate the growth for 2019.

Second point, and you do see that, at the bottom chart is, depending on which division you do look at, there is actually a huge divergence on how the business is performing. So, so you have extremely strong businesses, for example, in Middle East and Asia.

You really have also some markets like Latin America, which continue to be quite complicated. Now, if we go to page 30, this is the FX impact.

Full-year FX translation effect was about positive 0.9%. Q4 was negative 0.9%.

Now, for the first few weeks again, we're slightly positive on the FX side, but what you do see here on the bottom left chart actually setting the past few quarters the volatility. The main currency has been substantially – has relatively reduced.

Now, it's going to be interesting to see what happens then with the pound. But in any case, I think for the time being things look relatively stable at the moment.

Then, if we go to page 31 to the income statement, now starting with the gross margin, because we already talked about the growth, year-on-year improvement 40 basis points, mainly driven by negotiations with suppliers, a lot of focus on promotions, on marketing revenues. So, I think that has been a pretty good result for the year.

Then the next line, concession fees, plus 70 basis points for the year. And if you do there the analysis on fourth quarter only, that is going to be even more extreme.

So, in the fourth quarter, the change of concession fees has been 160 basis points which is absolutely massive, okay? So, let me talk about that first.

What happened in Q4 2017 was that we had some rent relief that were basically agreed in the last quarter, which applied to the full year 2017. So, if you want, we had a kind of one-off benefit booked in Q4 2017, which this time around we didn't have.

That was the first thing. The second thing was that the effect of the Spanish contract in the fourth quarter was more pronounced than for the average of the year.

So, what I want to say here, the key point is, don't use Q4 as an indicator for the future. Please do look at the full-year change because that's a better indicator.

And let me now talk about the 70 basis points that we're seeing here. First one again is the Spanish contract.

So, as you know, we have minimum guarantees in the Spanish contract. The Spanish contract has year-on-year increases of the minimum guarantees.

And that, together with lower performance in Spain, accounted for just about – a bit more than a third of the 70 basis points, okay. So, one-third of the increase was related to Spain.

Then we have another 10 basis points which are related to new businesses outside the airport channel. So, Julián, was briefly mentioning the cruise lines business.

Cruise lines business, for example, has structurally higher concession fees or rents. But on the other hand, there are lower investments required.

So, from a return perspective, it's a good business. But if you look at the P&L, it does have some impact there.

And then, about half of the 70 basis points, give or take 30 basis points, are then really related to the normal business to the airports business, to the normal portfolio changes that we have. If I then move on, personal and general expenses together, we had an improvement of around 10 basis points.

Now, in one hand, we had the business operating model efficiency of about CHF 40 million that go into these two lines, but they were partially compensated. That's why you don't see the full benefit there.

On one hand, we had higher personal expenses in North America. On one hand, due to increase of minimum wages in some of the states in the US and on the other hand because they had additional headcount due to the IPO that they did earlier in 2018.

And then, we did also lose a little bit of productivity or efficiency in the underperforming locations in Spain and Latin America. Then next one is other expenses.

Sorry, the EBITDA. So, that was stable at 12% flat.

I think we already commented on that one Then if I go further on depreciation, increased in absolute terms and also as a percentage. So, out of the CHF 40 million increase, about half again is from the US.

In the US, we had two things. We had, on one hand, an impairment of an asset of – of a non-airport asset.

That was a charge of about CHF 10 million to CHF 15 million. And the other, let's say, give or take CHF 10 million were due to the expansions and refurbishments that the US business did.

They have grown quite a bit and that is now reflected in higher depreciation. Another CHF 10 million of the increase is due to Division Middle East and Asia where we had lots of new projects.

So, that also added to the depreciation charge. Then amortization, on the other hand, that is lower by about CHF 50 million.

Now, last 2017, we had an impairment of CHF 65 million. So, 2017 is not a good comparison point.

But what we're seeing here for 2018 is the run rate amortization again. Then linearization, CHF 48 million, in line with what we guided for.

I think the good news is, one we start implement IFRS 16 from 2019 onwards, this line is going to disappear. Then our operational result, again, big gap.

Last year, you see a positive CHF 53 million. There we released a provision in the order of magnitude of CHF 18 million.

So, again, this is a bad comparison. If you look to the CHF 53 million this year, the main element was about CHF 20 million for startup restructurings.

So, the normal business development element and then we had another CHF 17 million which were project related and that also would include costs that went through the P&L due to the Hudson IPO. Then, if we move forward on financial result, that improved by CHF 80 million.

So, I think that's substantial improvement there. On one hand, we have the huge benefit from the refinancing that we did in 2017.

So, we have a lower interest rate that we're now paying due to that. Last year, we also had one-off costs due to the refinancing which are not incurred anymore and then, overall, we also had slightly lower net debt.

Then on income taxes, there has been a little bit of increase, but not too much, about 9%. We had several one-offs this year also.

But on a net-net basis, they almost compensated each other. So, in my mind, the level of taxes that we are seeing here on the P&L is a relatively good proxy as far as I can tell going forward.

Then last, but not least, non-controlling interest, plus CHF 10 million. This is due to the IPO that we did in Hudson.

So, we have additional minorities from that IPO and they are reflected in there. As a result, the cash net earnings, so adding back the acquisition-related amortization, increased by 3% to CHF 379 million.

Then if we move to page 32 to the cash EPS bridge. So, cash EPS year-on-year grew 7%.

So, that I think is a fairly okay number. If you look at the biggest changes, then you see the contributors on a positive side where, on the one hand, the EBITDA growth and the financial result savings.

On the negative side, there were the else positive one-offs that we had last year which are not there anymore in 2018. Then, going one page further to the cash flow, to the overview.

I think that is one of the most positive aspects that we have this year. I think we have delivered a really, really solid free cash flow generation despite the fact that the second half of the year was not so easy.

Again, if you look at the key metrics, you do see that the free cash flow increased by 32% and the equity free cash flow almost doubled. The conversion rate, EBITDA to free cash flow, was almost 60%.

So, that was a very good rate. And we originally guided for an equity free cash flow of CHF 350 million to CHF 400 million.

We're bang in the middle. And looking at what we said in the Q3, we're actually even slightly better than what we expected at the end of Q3.

Then on the seasonality, 2018 had one exception. The second quarter was stronger than the third quarter, but that is just the timing difference, so don't read too much into that.

But I think the pattern that you see here, on the equity free cash flow negative first quarter, slightly negative Q4, I think that is reflective of the business that we have. So, no surprises there.

Then if we look at the different free cash flow components on page 34, again, no big surprises effectively. Working capital was flat year-on-year.

Core net working capital trended in line with expectations. So, again, no surprises.

Taxes were slightly higher than last year, but not a lot. And the CapEx overall was CHF 30 million lower than last year.

So, I think we had some, if I can call it that way, savings on that cash element. But, overall, I think it's pretty straightforward.

Then if we move to page 35, from free cash flow to equity cash flow, we obviously have a substantially higher starting point. We have CHF 50 million less interest, and that results obviously in almost doubling the equity free cash flow, but, again, pretty straightforward, no surprises.

And then, from equity free cash flow to the change in debt on page 36. So, we had the net proceeds from the Hudson IPO.

This was about CHF 665 million. We paid back to shareholders one way or the other about CHF 720 million.

So, the CHF 522 million includes on one hand the share buyback plus treasury shares that we bought in the value of CHF 120 million. And then, you see the green bar, CHF 200 million of dividends that we paid.

And then, with the currency translation, this ends up with a net debt reduction of about CHF 400 million. Then next page, 37, balance sheet.

Again, nothing as a surprise there. The only bigger changes that you see is, on one hand, the reduction of the concession right with finite life.

That's the part that we amortized. It's mostly acquisition related.

And then, you see the reduction of the net debt. I think just a side comment for those that do like balance sheet analysis, since the peak time in 2015, we have reduced the size of our balance sheet by about 20%.

So, when we had the last acquisition, the starting point was above CHF 10 billion. Now, we're about CHF 8 billion.

So, a simplistic way to look at it is like we have started or we have reduced the risk of the balance sheet quite considerably over the last few years as we expected. Then financing and covenants.

That is page 38. So, again, not much change there.

Current leverage ratio, according to the calculation with the banks, is 3.2 against a covenant threshold of 4. So, we do have headroom there.

We will also discuss that probably in more detail in the Capital Markets Day in May, but – and as we're going to see later on, because of IFRS 16, we have already agreed with the banks to change the covenant calculation. So, this is already agreed.

It's a slightly different formula. I will not go through that in detail now.

I think the key message is we will have similar headroom on the new covenant calculation as we have today, although the calculation itself is a little bit different. Then last topic, that is IFRS 16.

This is the introduction page. We talked about it many times.

So, this is for – just for those that want a refresher that are not familiar with it, but I'm not going to lead through that, so you can read that yourself if in case you're interested, but I'm going to go directly to page number 40. So, again, IFRS 16 will be implemented beginning of January 1, 2019.

We will present the new format for Q1 2019, but we will not do a restatement of the old numbers. What we will, however, do and if my successor will do that, hopefully, better than I could ever do it is to give the bridges and the reconciliation from old to new, so that you can do your own math and assess yourself on how these changes work.

What we can say as of today is if we're looking at the portfolio as it stands on the 31 December, 2018, we have put here some impact. So, we would have an additional asset and liabilities of about CHF 4.1 billion that we will need to activate.

We will have a reduction of lease expenses of just shy of CHF 1 billion. We will have an additional depreciation of just about CHF 1 billion.

And then, EBIT will be slightly higher by about CHF 55 million. And then, net-net, the impact on net earnings will be negative CHF 80 million based on the portfolio here.

Now, bear in mind, every single time a new contract comes or a contract expires, this picture can change over time. So, it's something which is going to flow over time.

So, that was basically it from my side now. I give back to Julián for the conclusion.

Thank you, Andreas. Let's move to page 42.

As I commented on at the beginning of the presentation, during the first two months of 2019, the total performance increase in sales compared with previous year was 3%. Main changes, the improvement of the performance in Spain and the contribution of the new openings, especially the big ones in Hong Kong and in Australia.

Also, it's important to remark that the situation in Latin America is similar than in the previous quarter. In terms of the cash flow, no material changes expected during this quarter.

If we move to page 43, as a, obviously – trying to summarize the year, which was a tough year, very difficult during the second part of the year, but finally I think in terms of the set of financials reported, they are resilient and I hope that the generation of cash and the improvement in the many lines on the P&L is also significant sign. In terms of the gross profit margin, again, for many years in a row, the gross profit margin increased by 40 basis points.

EBITDA was flat and the strong cash generation, obviously, will put all that in perspective. In terms of the efficiencies, we have confirmed through, obviously, the certification that CHF 40 million are registered above EBITDA in the P&L due to the business operating model implementation and the two messages from the board of directors that will propose to the general assembly the cancellation of the shares acquired through the share buyback program and the dividend distribution of CHF 4 per share, plus 6.7%.

That's all from my side. I think we can move now to the Q&A session.

I suggest first week here in the room and then we pass through the conference.

René Saner from Octavian. A question on the guidance, the 3% to 4% seems to me not very ambitious given the passenger growth and net new concessions you traditionally added, 1% to 2%, conversion you're working on.

So, what is driving that number which is now lower? We saw, obviously, growth has come down.

And, secondly, that equity free cash flow is growing in line with revenues. Is that basically the message that the margin progression is sort of capped at this point?

Regarding, obviously, the guidance middle term, 3%, 4%, what we have analyzed is the possibility that events like the events that happened over the past year also are repeated and we have analyzed globally what could be a rational approach in terms of events that may happen in the future. And as I said, it's a middle term guidance.

And basically, due to that possible events worldwide, what we have calculated 3%, 4% is more in line in order to really put a clear picture to the analysts and investors regarding what could happen. If nothing happens, the situation will be better.

But the reality is that, during the last few years, we have seen a couple of times that something happened and we are, in this case, suggesting that is the best way to go. The second one is as a consequence, but we can now say the free cash flow and equity free cash flow will accelerate in a different speed.

In this case what we are trying to explain is that, if the company grows 3%, 4%, what we should expect in equity free cash flow and free cash flow is between 3% and 4% increase per year, with a base of CHF 371 million and CHF 620 million. This is the explanation.

Marco Strittmatter, Zürcher Kantonalbank. Can you explain or elaborate a bit about your collaboration with Richemont who is still holding some shares, I think.

And as you mentioned, you bought quite a lot of treasury shares. What's the meaning behind this?

Regarding Richemont, we are still developing the collaboration plan. I think I mentioned during one of the conference calls that we have prepared together a plan for expanding the different Richemont brands in the companies, around 100 new point of sales worldwide and we are progressing significantly.

We have opened a new Cartier shop. We have opened now a new Montblanc point of sales.

I think, for us, it's a great opportunity because, finally, we are able to really display and expand the Richemont brands in the group in a level that never were possible in the past. In the past, it's not a secret to open a Cartier shop in travel retail is very difficult.

And sometimes, we had arguments. Now, we are opening Cartier shops.

We're, obviously, very proud of this, but it's not the leader in this type of business worldwide. For us, it's a very impressive brand.

Regarding the treasury shares, the treasury shares happened last year because we had an opportunity to buy the shares in a very good price compared with market price at that time in a transaction that was in one package. And the shares are still there.

If in the future are needed, we can use it in transactions. I think the best – at the share price now is [indiscernible] how the evolution of the share price is.

Yeah, hi. Jon Cox, Kepler Cheuvreux.

A couple of operational questions and then maybe some more on the financials. Just on the whole Spain contract, we know it expires 2020.

Just wondering where you are in terms of conversation. You've said before you won't resign anything similar to what you have today.

It seems you're doing better things at the moment in Spain. At the same time, AENA is saying it wants a very competitive tender.

It wants the highest possible rents, et cetera, et cetera. What are your thoughts on Spain?

Second question, just on Argentina, could you just remind us on the revenues in Argentina. I guess, it's just a couple of percent, but if you could give us that, that would be useful.

And then, maybe a question for Andreas, on the IFRS 16, you seem to be saying that your net profit will be down in 2019 after IFRS 16. But, obviously, in terms of the cash side of the equation, you're saying that there's no impact on us.

So, will you give us sort of an adjusted cash net profit, so we can go back to the cash EPS? And that will be equivalent to what we saw in 2018?

Or are you actually saying, well, no, you can knock equivalent of CHF 80 million off that? So, if we're valuing you on an adjusted P/E basis, for example, we should just turn around and cut our assumptions?

Thank you.

Regarding Spain, I think the situation for us is clear. We have disclosure of this many times.

There are three lots. In two of the lots, the most important one is in terms of volume.

We are paying the market. Not we are paying the market.

The company has been paying the market forever, since day one. Okay?

The reality is that, to continue with the same conditions is not for us an option. I think what we need to do, and this is the discussion that we have maintained with AENA is really implement initiatives that will drive more sales and would drive more income for AENA and for us.

Because AENA in these two contracts is only reaching the level of the minimum guidance. It has been historically.

The problem here remains in the same place, is if there is not a change, a fundamental change in the conditions of the concession, there is a very short possibility, low possibility that the profitability will happen. Whether What are the changes that are required?

Are changed required in a square meter? Yes.

Location of the square meters, yes. Location of new products and allocation of new products to the assortment of the company, yes.

Collaboration in promotions, yes. I acting that are many examples that have been used in these five tests that we are implementing.

In fact, we are right now doing it with AENA that explains – not justify, explains that the change is possible and can be done. Then, I don't know what AENA's strategy is.

I got the impression that they want is to maximize the income from the concession. And sometimes, to maximize the income of the concession is not to do an auction process where you have a minimum guarantee every year.

Somebody pay there with a guarantee, but you are leaving on the table a significant amount of profitability because you need to generate more sales. And this means that, if needed, a collaboration between the landlord and the retailer in order to really implement these strategies.

And what I can say is today it's happening. I think there is a great collaboration between both parts, and I hope that, very soon, we will confirm what we have seen over the past 30 or 40 days.

It's a significant opportunity and change. Regarding Argentina, depending how you look at it, because now with the devaluation is difference between the 2.5% and 3%.

And you question on the cash EPS, that's a complicated one. In principle, the starting point is that we will not go back to a cash EPS as it was calculated pre-IFRS 16, oaky?

You can do it, but it's a pretty complicated way of getting there and I'm not sure that this is really the way forward. But what we plan to do as part of the session is basically show you on how it can be done, if anyone has strong feelings, but we will go for a number that will reflect post-IFRS 16.

What we will do, however, is we will give you a bridge from old to new. So, how can you compare the old cash EPS number with a new cash EPS number.

That will be our main focus if you want.

Felix Remmers from zCapital. Three questions, if I may.

You said that, in January, February, you had 3% total growth. Can you provide a bit more granularity on the composition of that, especially on like-for-like, if that's still negative and also on margin, I don't know, if you can comment on that?

Then, on gross margin, you had seen some good expansion in the beginning of the year and now in Q4. A little expansion.

So, do you feel that you gross margin has still some room to improve going forward? And maybe last question, a technical one, is on the EBITDA of the distribution center.

For the first time since I look you it is negative. So, I was asking myself what's going on there.

Regarding January and February, I don't have more information. I cannot confirm because every information that we provide to the market has to be [indiscernible] and we don't have this information available yet.

I don't want to guess. Regarding the gross profit margin, during the year, we increased by 40 basis points.

And I think this is a good proxy for the future. What happened during the last quarter is a very specific thing.

By September, we were growing 50 basis points. We have grown only 10 points in Q4 2018.

And the difference is, one is a mix thing because we accelerated the sales in in wholesale. As you know, probably because I comment on that in the past, we are doing three wholesale activities with intention to a step in the retail.

That's all. And this time – or this quarter, we had a higher percentage of wholesale compared with the rest.

And the margin in the wholesale is a lot lower. And the second is a mix effect and an accounting effect.

What is that? It basically is the way that we have calculated the mix based in the sales of the companies.

There are companies with high gross profit margin that during the last quarter were impacted because the sales were lower and this is impacting the combination, the mix. For the future, the profit is what we always say, 30, 40 basis points for 2019 is a possible target.

And then, on the distribution center, so we have done a few reorganizations. And I think this was also part of the 2018 business operating model.

And as a consequence, a few of the functions or parts of the function have been shifted to the warehouses, to the distribution centers and they have, accordingly, have picked up the costs. So, what you will see is, for example, that Division 1, Southern Europe, has had a benefit from that and that has shifted to the distribution center.

So, it's a pure reallocation of costs because we have organized ourselves differently.

There are no more questions in the room. We'll move to the call.

Yeah, good afternoon. So, first of all, Andreas, just wanted to thank you for your time.

It's been a real pleasure interacting with you and just wanted to wish you the best for the future and hope we always stay in touch. Two of three quick questions from me.

Just to follow-up, sorry, on the previous question on gross margin, Julián, if you don't mind. On the gross margin expansion, I understand you're guiding for roughly 40 basis points going forward.

But could you just come back on the, if you wouldn't mind, on the drivers of this gross margin expansion because that's not entirely clear to me of what's going to drive the gross margins expansion? That's question number one.

Question number two is that, on the cash flow leakage, historically, Dufry's cash flow leakage has been relatively significant in terms of the upfront fees paid to – for concession and so on. You had no leakage last year in 2018, Andreas.

Is there anything you're seeing on the horizon in terms of potential leakage in 2019 and 2020, if you could share with us, that would be great. And finally, my last question is on the channels, the diversifications.

Over the past few years, you've indicated that you intended to grow outside the airport channel further. But if I look at the share of the non-airport, that's been roughly 10% over the past three, four years.

So, it has been basically stable. Has it been more difficult than initially expected to grow outside the airport channel or at least to grow profitably outside the airport channel?

Okay. May I start?

Regarding the gross profit margin, the main drivers that we are using here is still the global negotiation with local and global supplier, especially now in marketing and income – advertising income. Those are obviously still opportunities for us and for the supplier for expanding the sales, adding more promotions, contributing with more promo girls or promo sellers.

The reality is still we believe that in 2019 there is a possible room including the negotiations with local suppliers. As you all know, we have around 20% of the total products that are considered local.

The second is regarding the channels. We have expanded the channels.

But if you remember, I comment that they were strategically important for us, but when I comment that we were expanding this business was in the half-year results. I think it's a business that if we have – and the question is, do you have an alternative to grow up the business in travel retail?

Yes. We have many.

And we have had many. Where?

In airport retail. We prefer to expanding airport retail.

The answer is yes. But the reality is that having the same returns on the investment, especially in the big cruise lines, we believe, due to the potential growth this channel has – as you know, there are more than 200 new cruises coming to the market during the next two years, it's a great opportunity.

Finally, we understand the business. We have had the experience over the past years and now is the time to accelerate.

Hi, Edouard. And, obviously, looking forward to stay in touch with you.

Now, to your question, look – and if I can just open that discussion in a bit [indiscernible]. When you think about upfront payment, that is typically a way of financing for airports.

Now, in general, airports, especially in developed markets, they do have access to funding. So, there is not really a benefit for the airports to have that.

So, where we would see typically upfront payments will be more in either emerging market situations or sometimes there are special circumstances. But to answer your question, in 2019, as far as we can tell, based on the pipeline that we have today, there shouldn't be any significant upfront payments in the cash flow.

So, that should be again like 2018. So, I can call it that way a clean year.

Okay, very clear. Thank you.

Thank you for the question.

Hi, Julián. Hi, Andreas.

I have two quick questions for you. So, the first one is, I know you can't really give a split for life-for-like and net new concessions for the first two months.

But when you say total growth, this includes your positive FX impact, right? And then, the second question is also you said we cannot really extrapolate the concession fees and rents in Q4 of 160 bps year-on-year.

But some of that will obviously spill into the first three quarters of 2019 and also you will have a continued minimum annual guarantee increase at AENA, which I think is slightly more pronounced next year than this year. My question is although EBITDA margin is probably not the criteria going forward, how really can you compensate for the slightly steep increase in concession fees and rents going into next year?

I will talk about the like-for-like. We don't have the like-for-like calculation yet, but in this 3% is not enclosed any type of FX.

Okay.

And to your question on the concession fees, look, what I wanted to say, maybe I wasn't really clear is, like, I think that there will be increases in concession fees. We agree with that.

And what we always said in the past is say, hey, look, you may have kind of, whatever, 20, 30 basis points increases in the normal business. I would assume that would also hold true for 2019.

There is no reason to see it differently. I also would tend to agree that we may have some additional pressure, if I can call it that way, from the businesses that are non-airport.

So, the cruise lines business, obviously, will also drive to a certain extent the concession fee increases. But with the part that is important to me, the largest part that were there in Q4 2017 will not be there.

Now, for Spain, that is a complicated one. You are right that the concession fee, the minimum guarantee will increase again.

It's not more than in 2018. It's similar.

But the key question here is actually not that the key question – and that will be a big driver on how to concession fees will evolve is like how much will we grow or not in Spain. And if we're looking to the first data points that we have in 2019, things look a bit better than in 2018.

So, if we were able to extrapolate that, which I couldn't tell you at this time because it's too early, but if we just do that, the pressure on the concession fee, obviously, from Spain is a lot lower than it was in 2018. So, I think to summarize that, yes, concession fees will increase.

We agree with that. The only thing I wanted to say, they will not increase 160 basis points in 2019.

This is not going to happen, okay? And then, to the second point that you made is to say, hey, look, how can we compensate the concession fees?

Julián mentioned the gross margin improvement. I think that is one of the components that we have had available in the past and we also expect to have available in the future.

And the second point is, obviously – and we will talk about more about that one in the Capital Markets Day in May, is like what kind of efficiencies we can drive going forward by adopting the business model. So, I think there are self-help measures available to compensate for these concession fee increases.

Okay. Two very, very quick clarifications.

So, you were aware of the one-off in Q4 when you gave the 20 to 30 bps increased guidance in concession fees in 2018, right, for the Q4. And the last one is the total growth for 3% means organic growth 3% in the first two months of the year, right?

So, we were aware of it. And you may remember that, on the Q3 call, we actually guided for a lower EBITDA margin.

So, you may remember that we said, hey, look, EBITDA margin for the full year guidance will be between 12% to 12.2%. We're now at 12%.

So, that was the reason why we guided for it.

Okay. And total growth for the first two months means organic, just a clarification from Julián.

No, it's total growth.

So, total, include FX?

Yeah, total growth.

Okay. So, it includes a positive FX impact?

Sorry?

So, it includes an FX impact? Because you just said that…

It's excluding FX. It's total growth excluding FX.

So, it's organic?

I cannot confirm it because I don't remember all the details. But in general is what I said is total growth.

Okay, fine. Thank you so much.

Hello. And thanks for taking my questions.

The first one would be please on the advertising income. I think it was very nicely contributing to the EBITDA growth, and I think it's definitely high quality growth.

May I ask is this part of the concession fee? Is this charged, payable local shop, or is it just something you're boking on the corporate functions, it's not part of the concession fee?

And how do you expect this advertising income to grow in 2019? Should it be another CHF 20 million, CHF 30 million.

And the second question will be please on the equity free cash flow. We are aware that Spain is a lower margin contract – or contracts net-net.

In the scenario you would lose 50%, 60% of the contracts and revenues, would your equity free cash flow guidance still be valid for 2020 then?

So, let me start with the first one. So, look, the advertising income really depends on how the thing is structured.

So, in some cases, for example, if you have promotions, you actually have – because you pay a percentage of your sales, you get the kickback on the cost side. So, in principle, you don't account for it, but there may be other marketing monies where you pay for it.

As a basic concept for us, in most of the cases, we don't pay, but it's not for 100% of the advertising income, okay? And then, I think on the second question on the equity free cash flow, that's kind of a tough one.

Look, if we were able to retain, for example, half of the business in Spain, but that we would be able to retain that at better terms, then clearly the equity free cash flow should be at least as good, if not better, because I think where we are currently getting hurt in Spain is, obviously, because of the low profitability. So, if you have a normal profitability there, the equity free cash flow should be supported by that from that perspective.

Even if the business is smaller, it still should hold through on that one. But we will need to say first on how the contracts will be done.

All right, thanks. And then, for a final question, if I may, coming back to the margin topic for 2019, given the confession fee increases and given some cost inflation, this negative, to offset this you have gross profit expansion, but you're not speaking about your medium-term profitability increases anymore.

Does it mean that now the business model is more focusing on keeping or profitability flatfish for the next couple of years?

The answer is yes. We are going focus in being more efficient and the next, obviously, time that we will discuss this subject, we will try to put the perspective of savings because there is leverage in the cost structure that can be used as increasing the profitability, in line obviously with the rest and the increase of sales.

But the answer is yes that you still target profitability increases going forward.

That is still possible improvement in the profitability level, yes.

All right. Thank you very much.

Yeah, hello. Volker Bosse, Baader Bank.

First of all, Andreas, thank you very much for all your support over the last years and all the best to you for the future. Starting with three questions, first of all, regarding your midterm sales growth of 3% to 4% going forward, could you split it into the components like-for-like and how much is from new concessions as you did it for the 5% to 7% which was the guidance before?

And the second question would be on M&A opportunities for 2019, be it in Asia, be it in the US, especially perhaps with the food segment as you made the Hudson IPO also in order to reshape the business there and perhaps teaming up with the one other food guy over there, perhaps, a word on that. How you look at M&A in 2019?

And a final one, just for clarification, the income tax rate, Andreas, will it be around 40% after 42% in 2018? You made some statements, but I had a bad line.

So, for clarification. Thank you.

In terms of the middle-term growth, I think is better that we talk about like in the high street. Obviously, they say sometimes like-for-like, they say sometimes growth.

We are going to talk about organic growth. And we are going to disclosure every time that the information is provided, it's ready, we're going to provide the final results.

We are not going to provide any guidance regarding life-for-like or new concessions. Regarding M&A, I think I have repeated many times the way of allocating capital here is basically that we want to go and increase the presence of the company in Asia.

And this has more middle size acquisitions are available in Asia. We have, obviously, today the opportunity to explore some of these opportunities.

And the way we do it is a very traditional way. The first thing that we tried to really be sure that it's the right thing is the concession portfolio.

After the concession portfolio, what we created is a business model, especially discounted cash flow. And after that, what we have a very specific limitation in terms of internal rate of return and payback.

The situation in each of the contracts can be obviously modified because the synergies we can create. And depending on the synergies, the opportunities will be in the first-line priority or in the second-line priority.

All the opportunities that we will look for will have two characteristics, good concession portfolio and a standing good rent, good duration of the contract and diversification of risk, and also the opportunity to implement synergies in the gross profit margin and in the cost level. Those are the parameters that we use in any type of acquisition in Asia or in any part of the world.

Hi, Volker. And, obviously, it has been great working with you.

So, thank you for that. Now, to your question, look, if you wanted to calculate the taxes or the tax rates, the easiest way to do it, put it that way, is like if you take the net earnings that you have, but you add back the acquisition-related amortization and that will be your real basis for earnings before taxes.

And the reason for that is that nowadays amortizations are not tax-deductible anymore. And if you do the math there, you get to a tax rate of about 25% on that, if I can call it adjusted EBT.

So, I think that's the almost simplest way to approach it.

Okay, thank you.

Thank you. Three questions if I may.

The first one is on CapEx. So, your organic growth split is getting more skewed towards the new concessions in the Q4.

Obviously, like-for-like was negative 1.4%. Can you talk a little bit about the CapEx implications and how should we think about it in 2019?

Your CapEx is 2.9 and you actually saw the savings there. Can you guide a bit through the thinking for the next couple of years?

The second question is, in your P&L, you have about CHF 60 million release of provisions. Can you talk a little bit about what's driving that?

And what's the outlook on that line in the future? And the last question is on your medium-term growth guidance.

You have this super-helpful slide in our Capital Markets Day where you bridge the – give us the breakdown of organic growth of 5.7% into passenger growth, spent per PAX and new concessions. Can you will give some color on what stays behind now the 3% to 4% growth that you have?

And also, what – how you're thinking evolved over the past nine months to drive this revision down? That will be very helpful.

Thank you.

Should I start with the first two? Hi.

So, look, on the CapEx, at this stage, we feel – continue to feel comfortable with the 3% to 3.5% of turnover, as we always have said. I think what you do see now in 2018, we were, if you wanted, at the low end of that range and it will depend a little bit on which project we're taking on.

So, as I said, if you go outside the airport channel, typically, the CapEx is lower. So, I think there is a certain chance that we may end up with a lower end of the range.

But still I think for the discussion here, I would stick with the 3% to 3.5%. But the key point for me is, with that, we have been able in the past and we will be able to continue also in the future to reflect the organic growth that we have had.

And the one thing that you need to bear in mind is it's not only about new contracts, these are not growth contributed this year, but we also had other situations where, for example, refurbishments and expansions were as important. So, I wouldn't take too much, let's say, analysis into, well, what is really where we grow.

But I think the important thing is that we continue to refurbish, to build new spaces and this, let's say, CHF 250 million to CHF 300 million will be there in a normal year also in the future. The second question was the release of provision.

Sorry, yeah, thank you very much. So, look, the release of provision happened in 2017.

So, 2018, in that context, is clean. The release of the provision in 2017 – there were two one-offs in 2017 that were relevant.

One was the release of provisions, which was about CHF 80 million, and there was an additional impairment charge of about CHF 65 million. Both were related to the Nuance acquisition.

So, what happened that – when we did the Nuance acquisition originally, we did a so-called purchase price allocation where we allocated values to different operations. What then happened now is like one operation performed better than we expected.

So, that's why we release the provision. And the other one performed worse than we expected, that's why we had an impairment.

This is just on how accounting works. But, net-net, the impact in 2017 was CHF 15 million.

These were real true one-offs. In 2018, we don't have any of that.

And in the future, we will see. But at this stage, I don't see any further of these one-offs for the time being.

Okay. Regarding the middle-term guidance, in terms of middle term guidance, we are not going to provide any allocation to the different components of the organic growth.

The organic growth is just a guidance for the middle term and it has been decided to communicate 3%, 4% because what we have done this time is we analyzed the different operations on countries during the next years. And we have came to the conclusion that, in this guidance, we need to consider events that may happen, as I commented on before.

And in our case, with obviously the countries participating in the projection, we have came to the conclusion that 3%, 4% is the more realistic just in case specific events will happen in these countries. That's the way that we did it.

[indiscernible] is now 3%, 4%.

That's very helpful. Thank you so much.

Just to clarify on the provisions because I've seen your financial statements in note 12 on the other operating income. There's also about CHF 16 million provision release, of long-term provision.

But I can ask that question off-line as well.

Yeah. Well, let's take it offline.

Thank you.

Okay. I would like to thank to all the participants in the room and also via conference call and we'll remain available for anything that will be needed.

Thank you very much.