Good morning, everyone, and welcome to Meliá 2025 Full Year and Q&A Conference Call. I am Stéphane Baos, Head of Investor Relations.

As you may know, this year we made an update in our approach to our results presentation. Yesterday, together with the release of our results, we made available a webcast presented by our President and Chief Executive Officer, Gabriel Escarrer, and our Chief Operating Officer, André Gerondeau.

It provides an overview of the key operational trends in 2025 and outline the company's outlook for the year ahead. We hope you have had the opportunity to review and that it has been to your satisfaction.

In today's live session, we will begin with a brief introduction summarizing the most relevant points of the year. Afterwards, we will open the Q&A session.

This morning, as usual, on the call with me today are Gabriel Escarrer, our President and Chief Executive Officer; André Gerondeau, our Chief Operating Officer; Ángel Luis Rodríguez, our Chief Financial Officer; and Juan Ignacio Pardo, our Chief Real Estate and Sustainability Officer. Please note that all participants are currently in listen-only mute.

When selected to ask question, your microphone will be activated automatically as you're introduced. Additionally, we would like to remind everyone, that the discussion from the company might include forward-looking statements.

These comments reflect our expectation as of today only, and actual results may differ from those expressed or implied. I am pleased to turn the call over Gabriel.

Thank you, Stefan, and good morning, everyone. Before opening the line for questions, let me briefly summarize our 2025 performance.

We delivered solid RevPAR growth with a strong pricing discipline, resilient demand, and a well-balanced geographic footprint. We are once again leading the market in RevPAR growth.

EBITDA, excluding capital gains, increased by +2.1% compared to 2024, even with major refurbishment on the way at flagship hotels and the effect of the depreciation of the US dollar versus euros. Net profit exceeded €200 million, up 23.6%, supported by operational momentum and lower financing cost.

Our increase in free cash flow allowed us to fund our investment, ending the year with a stable net financial debt to EBITDA ratio in line with our expectations. In February, we signed a new syndicated loan, which reinforces our financial discipline and significantly improves our maturity profile without increasing leverage.

We also benefit from lower spreads without requiring any collateral guarantees. Looking ahead to 2026, we have a positive on the books position despite a more uncertain environment in late February after some events in Mexico.

Our diversified portfolio and upcoming reopenings put us on track for another year of disciplined growth. As a result, we are expecting a RevPAR increase in the low to mid-single digit for 2026.

Now, let us open the line for the first question.

Thanks, Gabriel. Those interested in asking questions, will have the opportunity to do so now.

Please dial star-five so we can assign you a turn to ask questions. Allow us a brief moment to compile the questions and assign turns.

Hi, the first question is for Ricardo Benavides from Santander. Please, Ricardo, go ahead.

Good morning, all. Thank you.

Three questions from my end. Firstly, regarding this week's tensions in Mexico, I was wondering if you're seeing any volatility in terms of bookings, pricing, more for the mid-term, no?

Second question for your top-line growth, considering the normalized RevPAR outlook, would you potentially be also considering some net units growth in your own and leased segment? Last question regarding capital allocation.

Is your decision right now to not pursue any asset rotation more tactical in nature, or more strategic? In the event if there are no relevant, let's say, additional projects for you to allocate capital towards, what would you prefer, extraordinary dividends or a share buyback program?

Thank you.

Good morning, Ricardo. This is André Gerondeau.

Thank you for your questions. Relating Mexico, we have seen, it's been 3 days already.

First couple of days we did have a negative pickup, but I'm happy to announce that yesterday's pickup was already balanced between emission and cancellation, hopefully this is a situation that will reverse very soon. Important to know that all of our partners have started operations again into Mexico, all airports are open, flights to Vallarta have been restarted, we see that this might be a situation that hopefully has minimum impact.

However, we need to wait and see for the next few days. Again, I think that when we go into RevPAR and top-line, what we've said is that we have a strong vision for winter given the positive trends we've had so far in the Caribbean, far positive than last year besides the situation in Mexico, obviously, very strong performance in the Canary Islands, and a strong performance in the ski season as well.

Our advanced bookings plus MICE on the books make it very positive for us to foresee the mid-term business. Obviously, on the books is higher than our low to mid-single RevPAR vision given the advanced bookings and the MICE that we've said, and things will balance out.

If look at the trends for some of our competitors, which are in very low single-digit RevPAR, this is where we have our confidence from. I would pass the third question to my colleagues to answer.

Hi, Ricardo. On your question on capital allocation, I think, first of all, our policy is going to be very consistent with the financial discipline.

The framework will always be that our debt ratio to EBITDA will be between 2 and 2.5%. We'll be doing little adjustments in our participations, portfolio management that we've been carrying out over the last 12 years.

We've been looking for little adjustments. There's nothing really major identified.

I think that we see ourselves allocating the capital in growth and improving our assets rather than increasing or changing our dividends policy. We don't see ourselves giving away a extraordinary dividends and less the share buyback, which we have discussed that in depth with you one-to-one, being the little free float that we have now, one of the main circumstances that we think is dragging our quotation.

We don't see ourselves in the short term doing a share buyback.

Juan Ignacio Pardo speaking. Of course, we remain open to structures that may unlock value while preserving brand control and operating flexibility.

Any structure must improve capital efficiency, reduce risk, as Ángel Luis has said, maintain balance of the 2.2 debt ratio, and be executed at attractive pricing. We are evaluating alternatives case by case on asset type, geography, and investor appetite as we've done in similar way as we've done during the 2025 exercise.

Is okay, Ricardo?

Yes, perfect. Thank you all.

Thank you, Ricardo. Now the turn for Artem from UBS.

Please go ahead, Artem.

Good morning, everyone. Thank you for taking my three questions.

My first question on net unit growth. Pipeline for 2026 as percent of system size is 4.7% now.

Last year it was at 3.3%. Nevertheless, guidance for net unit growth in 2026 is lower than it was a year ago, 2 to 3% now for 2026 versus, I think, 4% a year ago for 2025.

How should we think about it? Do you expect an increase in the pace of disaffiliations?

My second question, how do you see 2026 RevPAR growth by main geographies? Which geographies do you expect to be stronger, which ones weaker?

Lastly, can you share any initial thoughts or indications on cost inflation for 2026? Thank you.

Hello, Artem. André Gerondeau again.

Thank you for your questions. Listen, we feel comfortable on the 2 or 3% net unit growth.

We're not pursuing any specific disaffiliation program. We do recognize, however, that we're sensitive to the situation in Cuba, which might have an impact.

Other than that, we are clearly online to follow last year's business and growth strategy as well. Nothing in disaffiliation that should be higher than what I just mentioned.

When it comes to RevPAR, we've seen a very positive increase of RevPAR in the Caribbean, mainly Dominican Republic, obviously Mexico given the circumstances in the short term. Please bear in mind that in Europe in general UK is performing very positively for us, is France, and certainly Italy for the past few weeks has had an extraordinary performance given the Milano Cortina Games.

When it comes to Spain, I think it's important for us to know that we've been upgrading our product portfolio, and we've been increasing our footprint in the main regions, whether it's the Canary Islands, certainly in Andalucía, as we have announced with the opening of Meliá Málaga, the refurbishment of Gran Meliá Don Pepe, we've taken over the former Kempinski hotel in Estepona, and we've taken over Hollywood World, which is an 800-unit resort. Even though it's a stabilization year, we see opportunity for our brands and our products specifically as our portfolio develops.

I'll pass on the cost inflation question to Stefan.

Hi, Artem. Regarding the last question, you said about the cost inflation, in the average worldwide, I would say that it's going to be between 2-3% increase, but it's going to depend on the location.

That means depend on the geographical location, you will see some differences. In general terms, for the full company, I think around 2-3% is going to be the level that we're going to have.

Is okay, Artem, about the answer we gave you?

Yes, great. Thank you very much.

Thank you very much, Artem. Now the third question is come from Guilherme from CaixaBank.

Hi, Guilherme.

Hello. Thank you for taking my questions.

Three, if I may. The first one is regarding RevPAR, if you're seeing some difference in terms of the RevPAR outlook for own and leased hotels alone and own, leased and managed hotels in general, for the whole portfolio.

Also related to RevPAR, if you could provide us a figure of like-for-like performance since there are important changing parameters that could distort a bit the guidance provided. The second question is in terms of margins.

What are your expectations for 2026? Of course, we know there's some impact from FX that could be relevant, but just so that to know that, aside from this, you see margins going up on underlying terms?

The third question is regarding free cash flow generation expectations, both on the pre-M&A basis, and if you could share with us potential size of investments that you might do that we should add to have a free cash flow generation post-M&A to include in our model. Thank you.

Hello, Guilherme. André again.

Good morning. Listen, in terms of RevPAR, no, our RevPAR where we have both own and leased and managed hotels in the same destinations is very similar.

Where obviously the difference comes is in those destinations that we only do management, like it would be Middle East, Southeast Asia, but other than that, our brand strategy calls for a very sustainable RevPAR growth in all destinations and brands. Yeah.

On the margins, I would say, and and we have discussed that as well several times, this is the obsession of the company. We have a target to get 30% EBITDA margin in 2027.

We're working on that, and there are three three lines. One is the operating performance of the hotels, and we are, optimizing the operations and trying to squeeze the assets as much as we can.

The second line is the corporate expenses, where, we have also streamlined and optimized the structure that we have here in in in HQ, but also in all in in other regional offices. The third and the third line is the asset-light expansion, which, as in terms of margins, will improve the picture.

We are working on that. It's the obsession.

We have launched internally a program called 30% Margin and is day-to-day is is on on our day-to-day. Obviously, we'll have the FX the FX effect, Ricardo, as you mentioned, but as we have always said, it's it's just an accounting effect since we don't cross currencies effectively.

Yeah. Sorry, I forgot on the on the free cash flow thing.

I was thinking that Stéphane will reconcile. I'm sure they have already the 2025 figures, we've ended up with €200 million of of cash flow from activities, and we expect a bit, a higher number for 2026.

Guilherme, it's okay with the answer?

Yes, Stefan. Just to understand a bit what type of investments should we need to take into consideration that could have implications in the actual cash flow generated?

Hi, Guilherme. For the moment, for 2026, as you may know, we have the Paradisus Cancún that we are going to open it again in May 2026.

That could represent around €25 million, and additionally to that, we have the Gran Meliá Don Pepe that is going to be opened at the end of the year and we are going to invest around €40 million. Then between these two big refurbishment that we have, it's €65 million.

This is the two major thing that we have on mind right now. Also to keep on mind that we used to have around €15, 1-5 million that we used to have in key moneys and growth opportunity that we could have for the year.

That's that we have for this year. It's

okay? Perfect.

Just on margins, just a small follow-up. How should we think about the phasing to the 30% margins between 2026 and 2027?

If I may, Guilherme, adding on to what Ángel Luis has just said, I think it's important to know that we also have a very strong strategy in terms of revenue generation, upselling, and increasing other revenues. An important percentage of the 30% is coming from the top line as well.

We have just rolled out a number of strategies and IT technologies for increased experiences in the hotels for other revenues in terms of upselling. Please bear in mind that most of our openings, over 65% of our business coming in right now, it's between premium and luxury hotels.

I think we're counting on a fairly large percentage of the Margin 30 to come from the top line as well with much better flow-throughs when we look at RevPAR growth mainly through ADR, and that's why we've been updating and upgrading our portfolio and our expansion strategy. I don't know if that supports your question.

Thank you.

Thank you, Guilherme. Now the turn is for Fernando Abril-Martorell from Alantra.

Hi, Fernando.

Hi, hola a todos. Just only one question.

I missed some of the prior questions, maybe you've already answered this, but I don't know if you are aware, but one of your main peers, Minor Hotels, no, the owner of NH, said it was looking to create a separate REIT, no? I don't know if this is something you would be also open to discuss internally and separate PropCo and OpCo within your company.

Thank you.

Hi, Fernando. Ángel Luis speaking.

Look, this is something we have discussed several times, I would say almost every time we get together. I don't see that happening in the short term.

I think, one of the reasons is that we think that the operating business has to grow a little bit more for us to start contemplating that. As we have always said, we hear the market, we listen to the market, we hear you, and we always analyze opportunities, but I don't see that happening in the short term.

Okay. Thank you very much, Ángel.

Thank you, Fernando. Now the turn to Andre Juillard from Deutsche Bank.

Hi, Andre.

Good morning, gentlemen. Thank you for taking my question.

First one about the operational trend, could you remind us the weight of Cuba in term of revenues and EBITDA contribution? On the operating side as well, could you give us some more color about the trends you are seeing on the MICE segment, especially in the Caribbean?

Second question about asset management, could you confirm that the two main projects that you have at the moment are only the Paradisus Cancún and the Gran Meliá Don Pepe, but do you have some more project of refurbishment for this year? Thirdly, about the capital allocation, could you remind us the policy in term of dividend and what we can expect for this dividend?

Thank you very much.

Bonjour, Andre. Thank you for your questions.

Basically, you know that Cuba has been struggling for the past couple of years, the impact for this year in terms of fees and overall performance is around €10 million in fees and obviously whatever comes down on EBITDA, we've considered that already. The trend for MICE has been very positive since we've increased our strategy in Europe and in the US, our on the books business is very solid, mainly for winter in the Caribbean and then springtime in Europe.

The trends continues to be positive, and there's a sense of confidence in the market. Business has been picking up.

Besides Paradisus Cancún and Gran Meliá Don Pepe, other than our traditional maintenance capex and upgrading capex, there's no other project at this time, those are those three points on our side.

Yeah. Andre.

Bonjour. Ángel Luis speaking.

On the dividends, as this is something that the board of directors propose to the General Shareholders Meeting, and I think it will be March when the directors of the company will take a decision. As we went back to dividends 2 years ago, and we started with a payout dividend of 17.5%.

Last year, we increased to 22.5%, and, very shortly, we'll have the clue of the dividend policy. We want to absolutely preserve the financial discipline, but we understand that the shareholders need to be and the dividend policies need to be consistent.

We'll confirm very shortly.

Thank you very much.

Is okay, Andre?

Perfect. Merci.

Merci.

The last question that we have for the moment is from Iván San Félix from Renta 4. Hola, Iván.

Hi, good morning to everyone, and thank you for taking my questions. Most of them have already been answered, but maybe if you could give us an update on the new developments that you've been carrying in the last few quarters, mainly Albania, Malta, Saudi Arabia, how they're going.

Then, a financial question. After the €800 million syndicated refinancing, should we expect the cost of debt to be lower than that of 2025's 4.2%?

Thank you very much.

Iván, good morning. This is André.

In terms of development, I think positive overall. On one hand, we continue to grow and consolidate our footprint in Albania, Montenegro, and Croatia with different opportunities.

Malta, as we keep opening properties after the success of the ME Malta, and we have several properties on their way. We've announced in Saudi Arabia an important project of three hotels in Qiddiya, the first one under construction.

We have a few opportunities in Riyadh that we will announce very soon, and we have something else coming in Jeddah. I do have to say that the reopening or the opening of Paradisus Bali in Southeast Asia has been very positive, we would perceive that there will be a growth on the Paradisus brand both in the Middle East and Southeast Asia.

We continue the footprint in Vietnam, very strong, and we have a few more opportunities both in Indonesia and Thailand. We feel that overall Southeast Asia and Middle East will continue to grow.

We are chasing several opportunities in the south of Italy, Greece, and Portugal, so that footprint on the Mediterranean will continue to grow, and I'm sure that we will announce very soon two or three projects more in the overall Emirates as well. I don't know if that answers your questions, Iván.

If I may add André, I just want to mention Iván that most of the openings that took place last year, the 29, and the 30 that will take place, at least this year, are taking place in where we believe we have competitive advantage. This is mainly the Caribbean, Mediterranean, and Southeast Asia.

This is where you should expect to see the new openings and in the areas where we believe we have critical mass in order to maximize the profitability and the margins of the fees generated. There are some strategic new places that, in my opinion, are the ones that we should focus as well and are mainly the Middle East and as well places like Maldives, Seychelles, et cetera.

These will be the only exceptions, but most of the openings, and can be applied as well for the new in the pipeline, the new signings will take place mainly in the Mediterranean, in Caribbean, and Southeast Asia.

Hello, Iván. Ángel Luis speaking.

On the new facility, look, the main goal of this facility was to really improve the maturity profile of the company. Some of you had already started asking questions about that, even if we were not concerned.

Again, we listened to the market, we hear you, and we thought there was momentum to approach our lenders, which we did in September. The result is you can't compare now the maturity profile of the company.

Moreover, as this kind of syndication normally are more expensive than bilateral loans because we approach the lenders in September and I have to thank them for their understanding. We've managed to reduce the spread of the 19 facilities that we have canceled with the process of this new syndication.

We've reduced by 20 basis points the average spread, and we fixed half of this at a very good rate last Tuesday, where we took advantage of the rates coming down and we close the fixing, the swap at 2.32%. There has not been underwriting commission, there has not been market clash, the kind of costs that are normally affected this kind of structures and loans, we haven't suffered.

Again, the main goal was to stabilize our debt, to have a clear and not to be concerned of the maturity profile until 4 years from now. Iván, is okay?

Sure. Excellent comments.

Thank you very much, André, Gabriel, and Ángel Luis.

Okay. There is no more questions, then thank you once again for joining us today and for your continued interest in Meliá Hotels International.

Please do not hesitate to contact our Investor Relations Department for any further question you might have. Thank you, and have a beautiful and good day.

Bye-bye.

Thank you.

Thank you, everyone.

Thank you.