Avolta Aktie

Ladies and gentlemen, welcome to the Avolta Half Year Results 2026 Conference Call and Live Webcast. I'm Valentina, the Chorus Call operator.

The conference is being recorded. [Operator Instructions]. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Mr. Xavier Espel, CEO of Avolta. Please go ahead.

Thank you very much, operator. Good morning, good afternoon, good evening. Welcome to this first half 2026 results presentations for Avolta. I'm Xavier Espel, and I'm joined here with our Group CFO, Yves Gerster.

I'm going to go straight to Page #4, where we have the highlights of this first half of 2026. We have reported an organic growth of 3.7%. If we discount the effect of the Middle East crisis, this organic growth would have been 5.2%. We have reported an EBITDA margin of 9.1%, slightly below last year. But again, if we discount the special effects related to the Middle East crisis and some major ramp-up operations that we had year-to-date, that EBITDA margin would have been 9.5%.

Equity free cash flow, it has been reported CHF 207 million, in line with last year, but a very strong performance on quarter 2, where we generated CHF 370 million. We remain very focused on our capital allocation policy, focusing first on growth, organic growth, like the big contracts we signed in Pudong, Shanghai and the several terminals we won in JFK. But not only that, we have also announced in the last few months, Riga expansion in Saudi Arabia.

We are also doing, as it is in our capital allocation policy, some selective, highly accretive small- and medium-sized acquisitions like the activities we bought earlier in Okinawa from LVMH.

We keep focusing as a second priority on continuous deleveraging. And once more, we have deleveraged versus the same period of last year. And last but not least, we continue committed to the dividend we announced in the general assembly. And also, we continue acquiring shares for the share buyback program, EUR 106 million in June 30 of the EUR 225 million we have announced.

We have confirmed this morning in our press release that we are confident on the midterm outlook. And this is based on the performance we are seeing in July, where our organic growth was more than, or is expected to be more than 4%, but also because the major impacts we had, particularly in quarter 2, we consider them of temporary nature.

The Middle East crisis keeps being volatile, and it gives definitely uncertainty to the industry and the road travel industry. But it's also true that in the last few weeks, despite all what is happening, the crisis has less effect that it had at the beginning of the war. And the remaining aspects that are affecting us, the remaining headwinds are also being progressively less and less. The ramp-up is a very clear example. The ramp-up, both of Shanghai and JFK will still take a few months, but every month it is getting better and definitely in 2027.

Also, we had some other additional effects like the bankruptcy of Spirit Airlines in North America. That is also a temporary effect because we are seeing like in prior crisis that the slots are being taken by other airlines, but of course, it takes a little bit of time. So I think the best way to say it is that we remain cautiously optimistic, and we expect progression over the next months and quarters on the positive side.

If we move to the next page, we are showing here that all our four regions are having positive organic growth, but of course, affected in some cases by the headwinds I just mentioned. EMEA is the region most affected by the Middle East crisis, obviously. North America is affected by the Spirit Airlines bankruptcy that I mentioned and also because airlines in North America are focusing more on yield than capacity. And they are less growth in capacity than initially expected, which affects the number of passengers. But also experience shows that this is something that happens from time to time, a more focus on the yield, but capacity because it's related to the underlying passenger demand will go back at growth level in the next quarters.

LatAm has been affected despite showing a good organic growth by security concerns in some parts of Mexico, by the hurricane in Jamaica and also by some fluctuations on the exchange rate, particularly in the southern part of Latin America.

Asia Pacific, despite the effects of the Middle East crisis is showing a strong organic growth supported by the like-for-like, but also supported by the positive change of scope. All in all, despite the headwinds, a pretty resilient performance.

If we move now to the next page, three messages. Despite the volatility, Avolta continues investing confidently in the future. We won business, duty-free, duty free and food and beverage in four terminals in JFK, which is one of the airports in North America with the major developments. We have signed a historical win in Shanghai Pudong Duty Free, the first time an international company, non-Chinese company has a material business duty-free in Mainland China.

We have also grown on the type of M&A we have explained over and over, medium and small size, clearly accretive and in a very strategic market like Japan. We entered a few months ago with food and beverage in the Kansai Airport and now in Okinawa with the acquisition of the DFS business in Japan.

Together with the China are two strategic moves, profitable and accretive and focus on return on investment, but at the same time, a strategic move to enter significantly large markets. And the business has been growing, also with new businesses and extensions in all the regions, has been published rigor has been published expansion in Saudi Arabia, as I just said.

But one thing that remains the same. It doesn't matter where the progress is done, it's always focused on the return on investment those projects bring to the overall company.

If we move to the next page, the second idea, we continue to transform. I have mentioned that many times, but I want to reemphasize again the importance of our size in locations, but also in access to data.

Of the 10.2 billion air passengers we have every year in the world, we have access and exposure to 2.5 billion. That means a potential reach that puts us at the level of materially big and influential companies, for example, on the social media or the technology world. We had 700 million customers last year, and we have reached in June '26, 20 million Club Avolta members. So, since launch in October '24, the number of active members in Club Avolta has been growing month-on-month without exception.

And why we do this focus on data and why we do this investment on transforming our data and technology capabilities because we believe that through that, we can improve pricing with dynamic pricing, we can improve assortment. We can go more local because we have the capacity to manage that. We can optimize inventory and working capital, and we can manage better our team members. And all that to fuel growth and spend per passenger to fuel margins, to fuel cash flow conversion and to fuel return on investment.

If we move to the next page, the last idea, we continue to deliver. And we have confirmed the outlook once more. Just as a reminder that I do every quarter. This is a midterm outlook. It doesn't mean we are going to be at the outlook every quarter, every month, every week. But the midterm, we should be there. And that outlook is 5% to 7% organic growth, an EBITDA margin expansion of 20 to 40 basis points per year and an increased equity free cash flow also year-on-year.

Together with this outlook, we deliver on the capital allocation. I know we repeat it many times, but I think it's important for the people that might be hearing us for first time. Number one, priority is investing in the business, existing concessions to increase sales, new concessions to support business development, technology to drive better sales and better margins, technology to improve also the efficiency of the company from supply chain to cost. Selective M&A, accretive, small and with the right return on investment.

Priority # 2, keep improving our balance sheet, decreasing the level of leverage, which, again, today is the lowest it has been for a decade. And every quarter, every year, it keeps decreasing. Our target is to be between 1.5x and 2x, potentially going to 2.5x net debt to EBITDA on a temporary basis if we do some M&A.

As a consequence of that, we are committing to straight shareholders remuneration with a dividend that is 1/3 of our cash flow. Cash flow grows, dividend grows every year. third year in a row that we have announced an increased dividend. And if there is still surplus of cash flow to invest that in share buyback, straight money returning to shareholders, we have announced for 2026, the third share buyback in a row.

We are approximately half of the share buyback for 2026 as it corresponds to the 12 months share buyback. If you put the total dividend and the total share buyback of the last three years, including 2026, will be about CHF 1 billion of money going back to shareholders. So committing to invest, committing to transform and committing to deliver both on the outlook and on the capital allocation.

Thank you very much. Now I hand over to Yves.

Thank you very much, Xavier, and welcome to everybody. Good afternoon and good morning to everybody on the line also from my side to this year's half year results presentation. Starting directly with the financial highlights on Page #10. Turnover came in at CHF 6.437 billion. That corresponds to an organic growth of 3.7%.

As Xavi has already mentioned, we were impacted, obviously, by the Middle East crisis. Without Middle East impact, the organic growth would have been 5.2%. Core EBITDA came in at CHF 583 million, corresponding to an EBITDA margin of 9.1%.

Also here, this has been impacted by the Middle East and also the ramp-up of some of the very large operations, including Pudong and also JFK, which is a large project. Net of those effects, so net of the Middle East impact and net of the ramp-up of those two operations, EBITDA would have been 9.5%.

Equity free cash flow came in at EUR 207 million, slightly short of the EUR 216 million of last year, but a significant improvement versus Q1. As we have mentioned during Q1, and as you probably remember, there was a gap of EUR 60 million, predominantly created by the Pudong ramp-up and the corresponding net working capital investments in the business. We have closed that gap to a large extent during Q2 and have generated a record cash flow of EUR 370 million in the second quarter this year.

Leverage has been reduced further by around 0.1 turn and now stands at 2.07x. We have achieved that leverage disregarding the significant portion of treasury shares we bought for the share buyback in this year.

Moving on to the next slide, Slide #11, with the growth contributors. I've already mentioned the 3.7% organic growth and the 5.2% net of the Middle East impact and Pudong and JFK ramp-up. On top of that, for the half year, we had a negative impact from M&A and others. As we have mentioned over the last couple of quarters, this is related to a contract we sold in EMEA. This has annualized now. We are about to close the business and the acquisition of Okinawa, which we bought from LVMH.

And that will turn this line positive in the third quarter once we have closed the transaction. And as I've mentioned, this is expected imminent. Growth at constant exchange came in at 3.1% for the half year. We had a negative FX effect for the half year of 5.7%, but an easing in the second quarter where we only see minus 3.1%. We do expect for the full year to see an FX result of minus 3.5% assuming that the FX rates remain roughly stable on the level they currently are.

If we quickly looking at the contribution per region, EMEA came in at 1.9%, obviously affected the most by the Middle East crisis. Net of that, the organic growth of EMEA would have been 4.6%.

Looking at the other regions, they all contributed nicely to the growth, the organic growth across the board.

Moving on to the next slide, Slide #12, with the detailed P&L. I will not go again into the turnover growth. But if you look at gross profit margin, we observed a slight decrease by 20 basis points versus last year. That's on one hand side, mix effects and also the effect from the ramp-up of Pudong.

Additionally, on concession expenses and personnel expenses, we do see a slight increase as a percentage of turnover versus last year. Also here, we see ramp-up effects on one hand side and the mix effect due to the strong growth we observed in APAC versus other regions and the relatively muted growth due to the Middle East crisis in EMEA.

EBITDA came in at 9.1%. We have already commented on that, net of the Middle East effect and the ramp-up, it would have been 9.5%. Below EBITDA, the P&L is actually quite uneventful and in line with expectations in regard to depreciation and amortization and all the other lines. Financial result was slightly positively impacted by some positive FX results.

Moving on to the next slide with the cash flow statement. Core EBITDA year-on-year came in EUR 29 million lighter. Equity free cash flow, we have actually catched up most of that effect, only having minus EUR 9 million gap versus last year. Obviously, we spent a little bit less on CapEx. So that certainly helped. It's important to note here that this is not an active measures we have taken. It's a few timing shifts, including the ramp-up in JFK, we have discussed earlier.

So there will be a catch-up effect in that regard. And on the other hand, we have spent some additional income tax paid this year, which is balancing to a certain extent, the negative CapEx impact. Otherwise, below the equity free cash flow line, we see a strong purchase of treasury shares of EUR 160 million on one hand side for the share buyback program and also for the long-term incentive plan. Additionally, we have seen a negative FX impact from the translation of the net debt into Swiss francs, resulting in a negative evolution year-on-year.

Moving on to the next slide with the net debt and the leverage. So as you can see on top, we have already reduced once more the leverage by around 0.1 turn from 2.15 to 2.07, so roughly 0.1 turn reduction year-on-year, disregarding the share buyback progress and the higher dividend we have paid.

On top of that, if we look at the maturity profile at the bottom left, still a very balanced picture. We have one maturity coming up in 2027. It was originally a EUR 750 million bond. We have already refinanced EUR 400 million earlier this year and the remaining part here represented as CHF 366 million or EUR 350 million is expected to come later in the year, which will also be refinanced. So, you can expect to hear again from us in due course in that regard.

Otherwise, the balance sheet remains very balanced in regard to maturity, in regard to currencies, in regard to fixed floating debt. What we have.

Look, having said that, let me quickly conclude with how I see the half year results. Overall, good results, obviously impacted by Middle East. We can obviously not deny that. That's something which happens, and which is external factors only partially or not in our hands. On the other hand, very solid, very resilient performance, thanks to our diversified platform.

Let me repeat what Xavi mentioned in his opening remarks, for the next couple of months and into the second half of 2026, we remain cautiously optimistic about the future trajectory. Having said that, I hand over back to Xavi.

Thank you, Yves. And just to echo what Yves just said, cautiously optimistic on the short term and to add a little bit more optimistic on the mid and long term. With that, we can open the Q&A session. Thank you very much for your attention.

[Operator Instructions] The first question comes from Manjari Dhar from RBC.

I just have two, if I may. The first question is on the new contract ramp-ups. I just wondered if you could give a little bit more color on sort of where we've got to on Pudong and JFK now and how we should expect those to impact the margin in the second half?

And then secondly, on cash flow, I just wondered if you could give us some color on how you're thinking about equity free cash flow phasing and development for the second half? And maybe some color on whether we should expect CapEx to pick up given slightly lower CapEx as a percentage of sales in H1?

Thank you very much. I will take the first one. Look, what happens in those two locations, and typically, the ramp-up projects or the ramp-up affects you always have, but they are typically not seen in the consolidated figures because they are smaller effects. And these are two very large new concessions. And the ramp-up comes from spaces from the airport that have not been delivered on time, construction works, the hiring of people, fully understanding the flow, providing for the working capital, in some cases, having the supply chain like in China that for duty-free is completely new for us.

So what typically you will see effects of a few weeks or three months, now you're seeing two very large group of concessions, and that takes a few months instead of a few weeks. Every month is a little bit better, but I think we will not see full operation in these two locations until next year.

So the effect should be fading away quarter-on-quarter, but they will last still a little bit for 2026. And maybe you want to take the second one?

Absolutely. So look, on the cash flow, just to be clear, as I've mentioned before, the CapEx, yes, was maybe a little bit lighter in the first half, representing around three-point-something percent on turnover, slightly lower than what we typically would expect. But this is related to the shift in some of the projects specifically also JFK, which happens a little bit later than initially assumed.

So yes, in the second half, you may see a little bit of a catch-up effect there. But then on the other hand, we paid more income tax, for example, in the first half than we would typically assume. And there is also a timing shift, an opposite timing shift in that regard because the invoices for income tax have been received earlier than anticipated. So net-net, that balances each other.

So maybe in the second half of the year, you see a little bit more CapEx, but then also a little bit less income tax, et cetera. So net-net, the impact is probably rather neutral. And look, it's probably too early to comment on the cash flow for the second half, but there's nothing unusual, nothing special to be mentioned in that regard.

The next question comes from Jon Cox from Kepler Cheuvreux.

Maybe two questions. Maybe for Xavier. I note you were mentioning don't expect us to reach the guidance every sort of day, week quarter. I'm just thinking about this year, you didn't say anything about you could potentially not meet it in any particular year. Just wondering if you think you have enough in the tank to make up in the second half of the margin pressure and also the organic sales growth, particularly when you look at IATA data, it looks pretty fragile in quite a few markets.

Second question, just in terms of the margin by different regions in the first half of the year. Maybe one for Yves. I actually see the margin went up in North America by 70 basis points year-on-year. And also then you can see that EMEA is down 50 basis points, Latin America down 200 plus, Asia Pacific down 200 plus. I wonder if you can just sort of guide us through the various factors. I'm guessing Asia Pacific was Pudong, EMEA, of course, Middle East. But I'm just wondering why North America was up and then Latin America was down in terms of margin year-on-year.

Thank you very much. The comment I made earlier on was thinking about some people, particularly you because I knew you were going to ask precisely about the second half of the year. Look, let me first, and I'm not trying to avoid the question, but I think it's important to put some context. So some of the effects we know are getting better month-on-month and quarter-on-quarter. So we know when we are going to open the missing shops in Pudong and in JFK, and we know there is a schedule, and we know things will keep going in the right direction.

But it will take a few months because that's the planning. We are talking about thousands of square meters in the JFK, for example, in four big terminals. And some of those terminals are new buildings with all the implications that, that has on getting to learn how the flows works, et cetera. It's not only a learning curve for us, but sometimes also a learning curve from the airport.

China, Mainland China duty-free came with even a higher level of challenge on legal authorizations, et cetera, something only some Chinese companies had experience on. I see it positively. I mean, if we have these major effects in '26, it's because we signed two group of very material contracts that over time, it will be positive. But at the beginning, they have a negative impact. That impact will be every month, a little bit less in the incoming six months. But I think realistically, you will have them at full potential only in 2027.

Okinawa will also be supportive. This year will be consolidated maybe three, four months, next year, 12 months. So, we have some positive investments in '26 that will pay off a little bit later. Now, the only thing we don't control is the Middle East effect. What we are seeing is a lower effect now than three months ago, but it's still an effect. And probably looking at what is happening in the world, on and off, there will be some disturbance on that part of the world.

When I put everything together, what we feel comfortable at this stage to say is that we see a progressive improvement. We think quarter 2 is probably the bottom, but we are not feeling comfortable on giving specifics for the next couple of quarters. And I think it's fair because some of what is happening, we control, others we don't control. But I think saying that we are cautiously optimistic and that we see positive progression, I think it is very important. And one thing we've been saying for a few years now is, we are more resilient than the other companies in the industry because of our size.

I think looking at what is going on in the world, it is a pretty solid set of numbers. But we also said that when there will be volatility, we will consistently focus on cash flow generation. And I think that's what once more you are seeing.

Per region, the major effects are EMEA, you very well said, this Middle East effect. LatAm has been affected Mexico by some security concerns. There are less Americans going to the touristic destination in Mexico this year, but that has happened in the past. And again, it's cyclical. There are some more extreme movements on the exchange rates of the different countries than usual, Argentina, Brazil, et cetera, that has a slightly negative effect in the profitability.

But again, we always say if you go to quarter per region or you go to weekly per country, the volatility is higher than if you go to the group and for the full year. And that's a little bit our commitment. Asia Pacific, yes, definitely is a Pudong ramp-up. And North America is very interesting because even if JFK is a very large operation, proportionally to the size of North America is less relevant. So it shows if you want, a little bit what we are able to do on the profitability of a region when the disturbing effects are less than they are in other regions. But again, I would not read much into a quarter results of a region. I still prefer to look at the full year and the full group. Thank you.

The next question comes from Jorn Iffert from UBS

I would have two questions, please. The first one is your midterm outlook is ending in 2027. Can you share with us with your thoughts how you look on the organic sales growth prospects beyond? Was the 5% to 7% still supported somewhat after the COVID recovery that this was helpful and now it could fade a little bit? Or do you think the 5% to 7% is something we should also assume for the next couple of years given your business model strategies?

And the second question, please, can you give us an update on your initiatives you are doing with investment in digitalization, loyalty program, et cetera, in terms of shops where you have tested this more pronounced about success ratio? Thank you very much.

Look, the midterm outlook remains unchanged until we say something different. Every five years, we do a full strategic review. But at this stage, we feel comfortable with the 5% to 7% that you mentioned. On the digital technology and data transformation, we continue at full speed. I gave just a few messages in one slide. But as I said, Club Avolta reached already 20 million members. But it's not only the size of the program, it's also the quality, the progressive improvement on the quality of the data we get from the Club Avolta.

It's not only the members. We can use the understanding of the behavior of the members in the Club Avolta, which I hope it's all of you, and then extrapolate some of that behavior to non-Club Avolta members. So, it's a tool in itself, but it's also a tool to understand other type of customers.

We did the pilot, I explained a little bit on dynamic pricing. Now we are doing an extended pilot in 5 different locations and probably we will progressively extend that over the next couple of years. We are doing also pilots on dynamic assortment. We believe that people face changes faster than in the past. And also, we need to invest in making the assortment more dynamic.

We keep investing, and we're giving a push at the last quarter of this year on camera analytics. Remember, I mentioned that in the past, it's not only our aim to understand the customers, which we know on the ticket information, on the Club Avolta membership, but also to understand the behavior of noncustomers. People that browse the store, but they don't buy anything or people that, and then learn through camera analytics and the software, how we can improve our offering.

We are also investing more and more on digital advertising on the stores. So, there is several initiatives that they might look from outside that they are disconnected but they are all connected on an overall strategy. And the overall strategy is, in simple terms, passengers change. Passengers behave in a different way.

For example, I typically don't like to give details because then everybody knows, but millennials buy 70% of them buy on impulse. So, for example, dynamic advertising is very important to capture them. Boomers, more than 50% to 60% do plan the purchase in duty free. And therefore, the strategy to capture them is a different one.

So, all these learnings not only nationalities, but age, backgrounds, gender, whatever might condition the way they behave, is what we want to learn. And then this simple idea to apply it one by one to anything that can make a difference from assortment to pricing to supply chain to advertising to entertainment, to hybrids, et cetera, et cetera. More and more take decisions based on what we learn from the passengers. And this is continuing. It's not always going at the speed I would like. I have to confess. Sometimes we take longer. But again, is the direction.

Like I received the question, Asia, why don't you grow in Asia, et cetera. And I always said the direction is very clear, but it will take time. And it has taken time, but now it's taking off. The same thing on the digital and data transformation. We have done a lot, not enough, but it's going on the right direction. And thank you for the question because those two questions are a little bit more longer term, and I like very much. So, thank you.

The next question comes from Harry Gowers from JPMorgan.

A couple of questions, if I could. The first one, just on Okinawa, what sort of margins can that business bring into Avolta? Is it above the group kind of average EBITDA margin? And then maybe just a little bit on why that business, in particular, was attractive for you to add to the group? And then second question on Pudong and JFK combined. I understand the sales ramp-up and opening the new stores can take a few quarters. But when might we kind of get to a full profit maturity, either could that take a couple of years? Or can they reach a full margin potential very quickly, potentially even in 2027?

And then third question, if I could, again, kind of just related, but do you envisage any more really big concession wins over the next 12 to 18 months, similar to JFK or Pudong, which will have this temporary drag on performance in the ramp-up? Or is 2027 just going to see you solidifying some of that recent space growth? Thank you very much.

I have to be always careful on what we disclose or not. So I'm looking at, if I can say that Okinawa should be ahead of the average margin. I'm not sure I'm allowed to say that, but I also said it. Why it was very attractive? For several reasons. Number one, we were in Japan recently, three months ago in food and beverage, but not in retail. And that gives us the opportunity to step in into the retail and the duty free, which makes Japan from a market where we were not a market where we are with retail and food and beverage.

This is from a strategic point of view, very important. And to do that in an accretive way, it's even more important. Japan is a very large market in our industry, but very difficult to enter. And now we are there. On top of that, this particular location has a higher component of some luxury brands than our average group. So it's also a great opportunity to increase our expertise in a segment that is small for our business, but that is relevant when in certain places, you want to win new spaces.

To be able to bring certain brands in your portfolio, it's something that might help the development in other regions. But we didn't do the acquisition to get the profit somewhere else in a distant future. In itself, it's accretive and it's the right acquisition. But on top of that, bring some more structural benefits.

Pudong and JFK, they should be almost normalize in 2027, probably not fully. So it could be an additional upside in '28, but the distortion, it should be, the difference between '27 and '28, it should be limited.

Your last question, I don't know how to answer because right now, I have to say I do not see major ramp-up effects for '27 with the current pipeline. But on the other side, I would say, well, maybe I wouldn't mind to have another one. But the reality is that the pipeline is very healthy in the four regions. We see very nice opportunities. But on average, those opportunities are smaller on size. So even if we will win a few of them, the ramp-up effect should be very limited, if any.

The next question comes from Luka Trnovsek from Joh Berenberg.

So just first on the July current trading number you gave. So, you mentioned that the Middle East headwind has reduced by about 100 basis points from Q2. And you also mentioned that the negative new space contribution in EMEA is going away in Q3. So, I was wondering if that means that essentially outside of EMEA, you've seen a deceleration in North America and LatAm in July. So just maybe some color on that.

And then just the second one, I was just curious on Club Avolta. Are you seeing that kind of strong member growth come from any particular region? Or is this very much global growth?

First, my usual disclaimer. I'm going to answer your question, but my usual disclaimer, if you go to months, if you go to weeks, if you go to days, you go to countries, of course, you have different. So, your reading is correct, but I will not read too much about it. One of the things we've been seeing over the last six months is a little bit more volatility than usual. I mean, some months were better than the following month was a little bit weaker than the next month was a little bit stronger.

North America, for example, in July has been partially affected by the World Cup that everybody expects to be a positive effect, but in general, it's a slightly negative effect. And the reason being because you have the attendees to the events, but the normal passengers avoid those cities because of concerns about traffic, hotel prices, et cetera. But again, if you look at the first and the last week in North America, Latin America will also be different. So, I think what is important is what we said earlier on. In general, we see the negative effects slowly but surely getting away in the coming months.

That doesn't mean everything is going to go perfect every week or every month. Latin America was affected by some swings on the exchange rate that, again, it could be the other way around in a couple of months. Not too much to read in my personal opinion. And again, at the end of the year, not all the regions will perform the same, but we hope or we expect the group overall to be improving from the current level.

And your question on Club Avolta was the members and if the increase of members coming from a specific region? That's a very interesting question. So there are regions where the penetration of the Club Avolta is higher and no secret, the higher penetration is where you have more frequent flyers. So if you have a big business airport, you have more Club Avolta members that if you have a holiday airport in the middle of the Caribbean where people goes maybe once every 10 years. So it's pretty rational. It's also true that at the beginning of Club Avolta worked better in general in duty-free. And now in the last months is catching up in F&B.

The reason was because, and maybe now I'm going too much into detail, we started on a standard campaign and the behavior sometimes is different. So now we have done a more specific food and beverage recruiting policy. But overall, it's pretty much across the board with regional and country differences, but differences that are logical when you understand what a membership and a loyalty program is and of course, is targeting particularly frequent flyers.

The next question comes from Gian-Marco from Zurcher Kantonalban.

So from my side, only two more questions remaining. For the second quarter, can you give us for the organic growth also the usual split of spend per passenger and tax development? Maybe you also see some key differences among the regions that you have, something that you want to share with us where you see significant reduction of spend per passenger, for example, or increases.

And then on the other side, it's more like product category related question. If I look on your food revenues from the category perspective, I see that we had some declines in EMEA, which, of course, I can explain with the Middle East, but then also North America. And I just wonder, is this mostly the reduction in the revenues due to FX? Is it more cautious spending on food due to inflation? Or is it the Spirit Airline?

Look, of course, in general, you have an effect because the line was not perfect. So I hope I answered what your question, Marco. I mean in general, you see weaker passengers, one, because of the Middle East effect; second, by the Spirit Airlines. Third, in North America, the airlines have been focusing in the recent months more on yield and capacity. So there has been, you typically have 1%, 2%, 3%, 4% increase on capacity in a normal year. And if you look at what Delta, United, et cetera, have announced, they are more on the lower end of that increased capacity. But we know that over time, the capacity comes back because the underlying demand is still there.

Spend per passenger in general remain on the positive side, of course, with some effects. For example, if in a specific market, the airline tickets grew exponentially, then in some cases, the consumer spends a little bit less money. Also, in some locations, we might have seen a decrease on high expenditure. So for example, if you are in a big European airport and you don't have the Middle East flights, that might have a slightly mixed effect.

Of course, it's true that the current volatility, I mean, any consumer that opens a newspaper in the morning, oil price goes up, inflation fears, et cetera. So in general, there is a bit of weak behavior. But when you put everything together and all these effects and being able to report a 3.7% organic growth, and don't get me wrong, I always want more. So I will be happier with 5%, 10%. But I think it shows that our portfolio, both geographically and in segment business, it's pretty resilient.

Despite all these negative headwinds, we are sustaining the operation pretty well. Of course, I can always go into more detail or more granularity in regions, countries, et cetera. But I think that's the major headlines. And there are others that we have not even mentioned. I mean, the entry exit system in Europe has not helped the last couple of months. So that was another headwind. But still lower than initially anticipated, EMEA is reporting positive organic growth year-to-date.

The next question comes from Manuel Lang from Vontobel.

First one is actually a follow-up to what Luka was asking before. It's on EMEA. There you reported, I see successive negative net concession growth in the second quarter. So could you may be shed some light on what this actually is? Is it downsizing? Has it to do with the Middle East or competition for concessions or more just on your capital allocation policy?

And the second one also related to JFK and Shanghai ramp-up effects on the EBITDA margin. There, I'm wondering if you could quantify how big this impact was in the first half as part of the 40 bps headwind you mentioned with regard to those two, including the Middle East, just to get a feeling of how big of a tailwind we can expect from a more normalized operation by end of '27?

Thank you very much. Look, on the change of scope of EMEA, there is an effect that Yves mentioned earlier on. And there is another one. We are exiting a small or relatively small, I'm not sure I want to say, well, a small structure unprofitable. But again, I would not read too much on change of scope on a quarterly basis because that moves. EMEA, I think over the next couple of years with the wins, the extensions or the expansions in Saudi Arabia, the win on Riga that we announced recently, I think over time, it will have like the rest of the regions, a regular positive change of scope, but that will not be, as we always say, every year, every quarter, but on the midterm, it should bring positive change of scope. And on the second question, I will let Yves to decide if you want to split or not the ramp-up and the Middle East effects.

So look, the two effects together amount for around 40 basis points, as we have stated before. We have not disclosed the split, but as I get the opportunity to decide, it's around half and half, give or take. If you take that as an assumption, it's not that bad.

We now have a written question from the webcast from Mr. Uzair Alam, MFS Investment Management, asking, would you be able to disclose the acquisition value of DFS Okinawa, is it expected to close in Q3 or Q4?

Thank you very much. I think we have a nondisclosure agreement with the seller, so we cannot disclose the specific price, but I think we have said that has an effect on leverage of...

The effect on leverage is between 0 and 0.1x. So you can basically do the math what that roughly means, give or take.

And we expect the closing to be at the end of quarter 3 or, sorry, we expect the closing to be imminent, so either at the end of this month or next month. So definitely by the end of August.

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Xavier Espel for any closing remarks.

Just thank you very much. I really appreciate that on the 30th of July in a hot afternoon in Europe, you spend the time with us. If we go to the next slide, just two final remarks. Number one, please, if you are not a Club Avolta member, use the QR code you have in your screen right now and become one. I personally guarantee you will be happy in the next few years of having become a member and start consolidating some advantages.

And the second one, that because sometimes we give it for granted, and I think it's very important to say that everything that happens in Avolta is thanks to all our team members in the shops, in the restaurants, in the kitchens, in the warehouses, in the offices.

70,000 team members that on a daily basis, sometimes in the middle of the night, they start their journey to go to an airport or a service area in a motorway or a train station. And daily, they talk to customers, and they work to make sure that those customers have a better journey experience.

Of course, we try as a company to provide more and better technology, more and better training, more and better tools for their job to be more efficient and to be better. But you, team members of Avolta are at the heart of this company, and I want to thank you once more all your daily work and your daily efforts.

With that, I'll just say thank you to everybody, and see you in a few months to present quarter 3 2026.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.

[Audio Gap]

Q1 2026 Trading Update Conference Call and Live Webcast. I am Mira, the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast.

At this time, it's my pleasure to hand over to Mr. Xavier Rossinyol, CEO of Avolta. Please go ahead, sir.

Thank you very much. Good morning, good afternoon, good evening, everybody. Thank you for attending this trading update for the first quarter 2026 of Avolta. My name is Xavier Rossinyol, and I'm here with our CFO, Yves Gerster. I'm going to go straight to the highlights in Page 4 of our presentation.

We have presented today a strong and positive results for the first quarter of 2026. Our core turnover reached CHF 2.9 billion with an organic growth of 4.7%. Without the estimated effect of the Middle East crisis, our organic growth would have been 5.9% on the first quarter of the year. Core EBITDA has reached CHF 190 million, which implies a margin of 6.6%, which is 20 basis points better than last year for the same period.

Equity free cash flow has been negative as it is always on the first quarter of the year because of the seasonality on CHF 164 million, affected by some net working capital effects due to new operations that Yves will explain in detail in a few minutes. Those are strong and positive results in a context that is, number one, the lowest quarter for us.

Number two, with effects on seasonality like Easter, the Orthodox Easter, the beginning and the end of the holy month of Ramadan between March and April. And of course, the Middle East crisis. Despite all those conditions, we have reported a strong quarter #1.

Because of that, we reconfirm once more our focus on our capital allocation policy. Leverage has reached 2.1x net debt to EBITDA, which is another decrease year-on-year. Yesterday, our general assembly approved the proposal of the Board to distribute CHF 1.15 per share as a dividend, which implies a growth of 15% versus the dividend of last year. And we are progressing in the announced share buyback for 2026 of CHF 225 million.

And today, we are confirming again that what we are seeing, particularly in the Middle East, but also the expected consequences on a wider sense, we regard them as temporary, not affecting our core business, and therefore, we are confirming our midterm outlook today.

Moving to the next slide. I think looking at the performance by region helps to explain the strength of our business. Organic growth has been in the first 3 months of the year, 2.5% in EMEA, the region most affected by the Middle East crisis, 3.9% in North America, 6.9% in Latin America and 17% in Asia Pacific. Yielding the 4.7% I already mentioned before, which will be close to 6% without the Middle East.

I consider more interesting in this page to look at the last column. Over the years, that April and March needs to be seen together because it's when you have the effects I mentioned before that are purely seasonal. When you look at that, you see a very clear numbers. EMEA is slightly negative, 0.6% organic, the effect of the Middle East, an effect that is higher on the lowest season quarters than in the full year. Middle East is one of the regions less or least seasonal according to the year, and EMEA is one of the most seasonal regions. So the weight of the Middle East in quarter 1 is the highest and much less in quarter 2 and especially in quarter 3. North America, a very strong performance of 5.4% in combination of March and April. We see very good signs in North America.

LATAM, 3.8%, but that was temporarily affected by some of the security concerns in Mexico that affects the number of tourists. We are seeing an improvement on the numbers after those events. And very strong APAC, both on like-for-like and on change of scope as we've been consistently saying we want to grow everywhere, but we are underrepresented in Asia Pacific.

All in all, organic growth for March and April combined has been 3%, and we think the estimated effect of the Middle East during those 2 months have been another 3%. Therefore, without the Middle East would have been an organic growth of 6%.

In North America, maybe just to mention that we regard the potential effects of the Spirit Airlines Chapter 11, extremely limited. They represent 1.5% of the overall domestic traffic in the U.S., significantly less for our portfolio. And based on previous experience and already recent announcements, we believe other airlines will take the potential passenger. So we consider that a very limited effect, if any.

Moving to the next slide, a little bit more deep dive into the Middle East. We said when the start of the crisis that Middle East, direct and indirect represents around 3% of our turnover on a full year, a little bit more on quarter 1, quarter 4, less in quarter 2 and quarter 3. We have seen a limited effect. March and April is pretty good. You can see that the effect has been 3%.

Already in May, early days, but already in May, the effect is more limited because today, some of the airports that were closed in the Middle East are open and the number of flights and passengers in the region are rapidly increasing. It's still not in a normalized situation, but better today than 2 weeks ago. We do have experience on some of the spillover effects this crisis has on oil price, potential ticket prices. Oil goes up and down over the months and over the years. We know that now it's in particularly high levels, but we think also those effects despite being negative, it will be on a limited measure for our whole portfolio.

We do have limited visibility like everybody else. But we don't believe anything that is happening today is structurally affecting neither the industry nor our core business model. Together with our diversification geographically, and it's very interesting because the first few months of 2026 are showing some regions performing better, others worse, like the last year, but they were in a different trend. The geographical diversification do matter in this business. Also the channel diversification, we have retail and we have food and beverage.

And I think it's of particular interest to point out that apart from the effect on sales, the effect in results and cash flow are always more limited because our cost base has flexible components. And as we have shown over the years, in every crisis, we can take decisions and we can focus on protecting the profitability, both on EBITDA, net earnings and also in working capital.

Moving to the next slide. Today, it's a trading update. It's not the moment to make a full review of how we are running the business, but I thought it was important to put a slide to reassure that, yes, we are focusing on managing the temporary headwinds, but we are also continuing in our commercial, data and digital transformation. We keep focusing in all the key aspects of the growth engine from the hybrids to the entertainment, to the local stores, to the pricing, the assortment, et cetera, and we are progressively increasing our focus on data and digital.

You know those figures, but I'd like to remind them from time to time, of the 10 billion people traveling a year, we have exposure to 2.5 billion. We had last year 682 million customers. And today, our Club Avolta has 18 million members, 2 million more than in our last reporting date. Club Avolta members represent 8% of the sales, and the growth on partner-linked accounts year-on-year stands now to 132%.

This data organized in a proper way with the transactional data, airport data, passenger data, net promoter scores, data from our POS, et cetera, et cetera, and the partnership with Avolta NEXT that is our platform for start-ups, all that together keeps improving the way we manage the business and allows us to use more data to optimize that business. And in every aspect, I just mentioned, we are always trying to get the best monetization possible.

Moving to the next slide, which is becoming a classic because we have been showing exactly the same slide for quite a few years now. But I think it's important in these troubled times to confirm a steady direction. Geopolitics is affecting us like it's affecting everybody else. And I want to be very clear, do we take the current events extremely serious, we monitored them on a daily basis at airport basis. And when necessary, we take decisive actions where and when it's needed. And if we need to do more because things go on one direction on the other, we will do. But said that, we regard what is happening as temporary and it's not affecting the way we address our strategy and our operating model.

And thanks to our diversification, that's why today, we feel comfortable confirming our medium-term outlook of an organic growth of 5% to 7% on turnover and EBITDA margin expansion of 20 to 40 basis points per year and a further increase of at least 100 basis points on the equity free cash flow conversion. And as we feel comfortable on our midterm outlook, we are also comfortable in reconfirming once more our commitment to the capital policy allocation, the capital allocation policy.

Number one, investment in the business, investment in the shops, investment in the restaurants, investment in the business development, investment on the digital transformation. Potential mid- to small-sized M&A, always focusing on the accretion that they will deliver, financed with our own resources and of course, with an extreme focus on ROIC that for us is fundamental.

Second, continuing the deleveraging. Our target leverage is 1.5 to 2x net debt to EBITDA. We are in that level on a full year basis with a possibility to go 2.5 on a temporary basis if we will do an M&A. And the third priority is very clear. The excess cash goes to shareholders. A yearly dividend that we have committed to be at least 1/3 of the equity free cash flow.

And yesterday, I said earlier, our General Assembly approved that for this year, we will distribute CHF 1.15 per share, which is an increase of 15%. It's the third year in a row that we distribute an increased dividend. And if there is more excess cash, we will be doing share buybacks. And we did one in '24, one in '25, and we are -- we announced we will do one in 2026. The combination of the dividends and the 3 share buybacks will give you more or less CHF 1 billion that we will have distributed directly to the shareholders.

And with that, I hand over to Yves. Thank you.

Thank you very much, Xavi, and good morning and good afternoon to everybody on the line also from my side. Looking at the financial results, turnover -- core turnover came in at CHF 2.9 billion, which represents a growth -- an organic growth of 4.7% year-on-year. If you strip out the Middle East impact, which has affected us in the first quarter by minus 1.2%, the group would have grown at 5.9%. Core EBITDA came in at CHF 190 million, and EBITDA margin was 6.6%, an improvement of 0.2% versus the same period of the previous year.

Equity free cash flow came in at CHF 164 million and leverage stood at 2.1x net debt to EBITDA, a further decrease of 0.1x versus March 2025.

Let's look into the details of the financial results on the next slide with the EBITDA and the equity free cash flow. So what is important to note, firstly, on the EBITDA is that we have faced an FX headwind of around 8.8% on the turnover. This is also visible on the EBITDA. So EBITDA at constant currency would actually have increased versus last year of 8.5%. But due to the headwinds, the reported amount is lagging slightly behind the CHF 196 million of last year.

But again, as a margin, the situation has improved by 20 basis points. And regarding the FX headwinds, it's also important to note that while the impact was severe in the first quarter, we do expect it to be reduced and eased as we go along during the year. We currently do expect the full year impact to be around minus 5%. Reason for that is the easing of the impact as we go along with the third and fourth quarter already had a quite significant impact last year and therefore, from a comparable basis, is becoming less pronounced this year.

The second point is on the equity free cash flow. Equity free cash flow came in at minus CHF 164 million versus the CHF 104 million of last year. What is important to note here is that we had 2 impacts or specific impacts, one of them being a one-off. As you know, we have opened and started to operate in Pudong, and we are the first one in a generation to start to operate with a duty-free license in Mainland China.

We have opened that operation in a rush. We got awarded in the second half of December last year and had to open the stores on the 2nd of January 2026. As a consequence, because of that speed, we took over some merchandise from the previous operator in the amount of roughly CHF 50 million equivalent. That merchandise came in without any payable.

So from a net working capital perspective, we took the full hit of the inventory. And as you know, the Pudong operations are ramping up during the course of the year. So while we started with a small footprint already at the beginning of 2026, not all of the stores are fully up and running and operational. That is expected to happen within the next 2 quarters or 3 quarters during the course of 2026. And therefore, also the net working capital impact will fade out during the course of the year. Point #2 there is an CHF 8 million impact from the Middle East, some moderate impact in the first quarter due to the Middle East crisis.

Moving on to the next slide with the typical treasury overview with financial net debt and also leverage. As I've mentioned previously, leverage decreased further from 2.2x net debt-to-EBITDA in March 2025 to 2.1x in March 2026. So a further reduction of 0.1 despite the fact that we did a CHF 200 million share buyback last year, a dividend payment last year and have started to buy back shares in the -- up to CHF 225 million share buyback program this year already.

If you look at the bottom line, you see the typical maturity profile, no material facilities coming up for renewal in the next couple of years. The next big one is 2030. However, in 2027 and 2028, in each year, we have a bond. The one in 2027, we are currently looking and preparing for the refinancing. So you can expect to hear some news from our side in the coming weeks and months. Having said that, it's also important to note that the group has currently access to around CHF 2 billion of liquidity. So there is no refinancing risk at all. And we will execute, as always, this refinancing in an opportunistic way over the next couple of months.

Moving on to the next slide with the conclusion. So look, what is the key takeaway -- sorry, what is the key takeaway from my side looking at the financial results of the first quarter. Overall, a strong result despite the Middle East crisis. And in regard to the outlook, while a lot of things are remaining fluid and liquid as we are talking, I'm convinced to achieve the medium-term outlook, as also confirmed before by Xavi. The key reason for that is, on one hand side, our resilient and global platform, which we have built up over the last years. It's the strong balance sheet with reduced leverage and it's the flexible cost structure, which allows us to react if and when required in a decisive manner.

And having said that, I hand over back to Xavi for the conclusion.

Thank you very much, Yves. I think the conclusion is one word, consistency. I think we deliver consistent results, consistent outlook, consistent strategy, consistent operations and consistent capital allocation. We monitor everything carefully, and we take decisive actions when needed, but we continue to be as consistent as possible delivering on what we say.

And with that, I think we can open the floor for Q&A. And once more, thank you for your attention so far.

[Operator Instructions] First question comes from the line of Natasha Bonnet from Morgan Stanley.

This is Natasha Bonnet from Morgan Stanley. I've got 2. The first is, could you talk to us a bit more about the underlying trends you're seeing by traffic and spend per passenger? And then the second is on the margin front. So you've confirmed the midterm guidance for an increase of the EBITDA margin of 20 to 40 basis points. What level of organic growth do you need to keep margins flat? And what levers do you have to manage your cost base?

Thank you Natasha, for your questions. Look, on the trends in passenger and spend per passenger, I think, first, it's a low month. So what I'm going to say, you need to put it as what it is, the low season. But we don't see major changes versus the last few quarters, maybe with a couple of exceptions. Exception number one, some of the Middle East traffic going to Europe has been reduced and some of them are high spenders on their duty free, for example. The effect is minor, but to mention one. And the second, we see more strength in the spending in North America than what we have seen in the last year or so. The rest remains pretty much in line with previous quarters, taking into consideration, of course, the effects of the low season. On your second question, maybe you take it?

Yes. Absolutely. So look, on the second question in regard to how much turnover or growth we need positive or negative to basically be flat on the EBITDA margin year-on-year. Look, a big part of the expected improvement of the EBITDA margin is coming from the initiatives we have from Club Avolta to all the digital initiatives to the data analytics, to the store upgrades, the refurbishments we do, et cetera, et cetera. All of that is expected to lead to the improvement. Now obviously -- and that's the lion's share of the improvement. Now to a smaller part, obviously, there is some economies of scale. I mean you have one CEO, you have one CFO and the more growth you have, obviously, that has an impact. But the impact is relatively moderate.

So to answer your question, even in a scenario where you see a slowdown of the growth or even a stop or halt of that, we do expect to be in a position to improve our margins in line with expectations and in line with our outlook.

The next question comes from the line of Manjari Dhar from RBC.

I also have 2, if I may. My first question was on Asia. I was just wondering if you could give some color on sort of the consumer behavior and the trends you're seeing there given the strong improvement and maybe some color on the early signs from the Pudong units that have opened.

My second question, I think on the Middle East slide, you mentioned that you can take some targeted actions if required to protect profitability. I just wondered what -- if you could give some color on what those actions would be and under what scenario you would need to take those?

In Asia is a very interesting area for us because, as you know, we are growing in line with what we said a few years ago on our strategic plan. So we have a wider and wider portfolio. That in itself is also helpful because we want a global diversification, but we also want a regional diversification, risk management, but also the possibility to capture the passengers that are growing. There are always some expenditure going up. The question if you get or not exposure to those.

So now we have better exposure in Asia Pacific that we used to have. We have a wider portfolio, a healthier portfolio, and we benefit better.

Pudong, it's very early to say. because we are ramping up the operation from -- if I don't recall -- if I recall properly, we started with 3 shops, and we will keep ramping up to 20-plus shops over the next few months. I don't think we will have a full Pudong until the second half of the year and probably the last part of the year. 2027, we should have a full Pudong and see the full benefit of this material operation. What actions we can take on the cost, do you want to take that also?

Yes, sure. So look, I mean, the actions we take and the area where we can take them depends very much on how severe the situation potentially becomes. I mean you can basically look into the Middle East crisis as something which you assume will continue to happen for the next 2, 3 weeks, 2, 3 months or a couple of quarters. And depending on that, I can already tell you today, and we didn't disclose that in details, but that we have the corresponding plans already on the shelf and ready to execute if and when required. And that goes from little light planning of shifts, rehiring of people taking holidays and incentivizing holidays to more severe and stronger actions, including management of personnel expenses, general expenses or also potentially the management of some of the cash flows, including CapEx in case this becomes required.

But look, having said that, and just to be very clear, all of that has no impact on the strategy. It's done in a way that whenever the situation is normalizing or growth is accelerating again, we are ready to do so. It has no impact on the strategy of the organization, specifically when it comes to business development and is done in a very careful, but also decisive and timely manner if and when required. And we are pretty far away from any of those actions at the moment.

And maybe just to add, you could see the way we act. If you look at the revenues of the turnover and the profitability of North America last year, full year, it tells you that when it's necessary, we can adapt the cost base to the turnover. I always give the same simple example. You don't want to cut, for example, high season personnel if you're going to have a very good season because you want people serving them. But if you know the passengers and the number of potential customers will decrease, you can also decrease the sales force. And we did that.

And I think it's not -- I think it's pretty clear that we did that or our North American team did that very decisively last year. And if it's needed to do the same in EMEA this year or in parts of EMEA, we will do it. It's never perfect because, of course, you need to have certain visibility on when things are going to happen, but do -- we do have ways to minimize any effect -- negative effect on sales, minimize them in the effect in the results.

The next question comes from the line of Harry Gowers from JPMorgan.

I've got 2 questions, if I could. The first one, just on the 3% Middle East negative impact. I was wondering if you could break that down into any kind of more detailed high-level bucket and maybe how much was stores based in the Middle East and store closures and how much of that was maybe weakness in the rest of EMEA or other regions with a high degree of outbound travel going into the Middle East?

And then the second one, I guess, a little bit more of a technical one, but you said the Middle East is 3% of group sales. Was that an annual figure? Or is that very much a March and April figure? Because obviously, you mentioned the seasonality point, correct, is the Middle East exposure much lower than that 3% as we go into the summer months.

As we always talk about Middle East exposure, direct and indirect, the numbers are not 100% precise, but I will tell you the average of the year is about 3%. It's more around 3.5%, 4% on the low seasons and going down to 2% on the high season, roughly. Of the effect of the 3% is probably today about 2/3 direct effect and 1/3 indirect effect, meaning demand in other places of the world that is linked to the Middle East. I answered your 2 questions the other way around, but I hope it's okay.

The next question comes from the line of Jorn Iffert from UBS.

I would have 2 to 3. The first one is good to see the trend change in North America with healthy organic sales growth in the last couple of weeks. What would you say is the reason for this? Why is this improving? And in which categories you are seeing this? Is it more food? Is it physical retail? This would be the first question, please.

Second question, just as a reminder, when you have big sports events or big events like the World Cup now coming up in the U.S., what is your current expectations? Is this a material positive one-off for the region? Or is this balancing in other regions of the world? Maybe your latest thoughts on this one would be helpful. And the third one, I know it's a very generic question. But given all your market intelligence you have, all the pre-bookings you are seeing at airlines, your conversations with landlords, what is currently your best guess what is happening with global passenger growth over the next couple of quarters? If you can answer that one.

So first, just -- so the change of trend of the U.S. is not the last few weeks, it's the last few months, at least for 2 a little bit more than 2 months, we have seen a positive trend, both in retail and F&B, maybe a little bit more in F&B. But again, I answered the question because you asked me, not necessarily because I believe that is so relevant in just the beginning of the year. We need to see the full year, et cetera. And again, it's very interesting. We typically don't cover that because we focus more on the segment reporting by region.

But this diversification that balances our portfolio that we see in the regions, we also see in the segment by business line. So not always the 3 business lines, duty-free, duty paid and food and beverage behave the same way. But the beauty of the merger we did 3 years ago is that today, that might be interesting for a conversation. It's definitely interesting for pricing policy, assortment, et cetera. But also at the end of the day, it helps us to perform on a more regular basis even if the trends on categories or type of business changes.

Your second question. The World Cup, the big events. Look, we regard these big events as, number one, positive in general with limited effect. So it will have some effects a few days in a few airports, but that doesn't mean it will probably group-wise be something you will see very materially. But they typically are neutral to slightly positive.

On the last one, I'm going to answer in a certain way. But if I could answer perfectly, probably I should be selling the answer, not answering. But look, it's a very interesting question, and we talked to all our landlords at all the airports where we operate, airlines, we read everything. And it depends a little bit on the markets.

So for example, bookings to or from the Middle East are more limited than one would expect in a normal circumstances -- sorry, they are less than what you normally would see, but it's not something you wouldn't -- that you would be surprised because sometimes the schedules are variable, et cetera. But the airlines there feel pretty comfortable and pretty reassuring that when the security circumstances change, the demand will be back very fast. In Europe, in general, the outbound markets on tourism for the summer do not see major differences from other years at this point in time.

So in general, people are still booking holidays to the southern part of Europe. Maybe Western Europe or Western Mediterranean, a little bit more than Eastern Mediterranean, which is also normal to what we have seen in the past. And in the Western Mediterranean, I include South of Europe, but also North of Africa. As you know, we have operations both in the East and the West of North Africa.

The Middle East crisis have had limited effect so far in North America. Limited effects in Latin America. Even if our numbers don't show that at all, a little bit more effects in Asia on number of flights, but not material in number of passengers. So what airlines are doing are reducing many times the number of flights, but increasing the load factors because, of course, to maximize or to optimize their P&L, they need to reduce the weight of the fuel. And that's something it's not -- there is no correlation, but it's not a 100% correlation, the number of flights and the number of passengers.

So I still expect 2026 to be weaker in overall passengers than without the Middle East crisis. But with, as we said, temporary effects and more limited than maybe in the middle of a crisis, it looks like. That's the best way I can answer. I hope it's good enough.

The next question comes from the line of Jon Cox from Kepler Cheuvreux.

Just a couple of more technical questions from my side. You mentioned Middle East passengers -- sorry, Middle East, 3% of group, but you talked about indirect effects. How many -- how much is that sort of Middle East population when they travel into Europe? Is that another couple of points? So if you can just give us some granularity on that.

Back to North America, I'm just wondering in terms of is the growth really part of this whole K-shaped economy because you obviously see who these people are buying this stuff? Or is it just general U.S. consumers coming through because this pick up does seem a bit strange given everything that's happening. And I'm just wondering if it's like another indication of the K-shaped economy, where well-off people are still traveling and buying luxury goods, for example?

And then just to come to this whole point about any slowdown, what the impact will be on EBITDA or cash flow. And I think I mentioned to Yves this morning, you guys did a fantastic job during the financial crisis, sales were down almost 10% during periods, and you still maintained more or less your margin and cash flow dynamics.

So is it fair to say then, Yves, that even with flat sales this year, you would still be able to maintain EBITDA margin and your cash flow conversion?

So look, the Middle East, when we say 3%, we include the direct effects or the potential effects in the Middle East region as such, but also in direct flights. So flights from big capitals or big cities in Europe to the Middle East. As I said, in low season, this effect could be maybe 4% in high season for the group, it could be 2%. On average, it's around 3%. The Middle East passengers flying to the rest of the world, of course, you have all kind of profiles on that traffic.

To name 3, you have a local population, which travel in particular months of the year to other locations, mostly in Europe, which are high spenders, but the number is extremely limited. And you know that because the local population in the Middle East is very limited.

Then you have the other line, you have overseas workers that constitute the majority of the number of passengers, but they typically go back home once, twice a year, and that could be India, Bangladesh, Pakistan, Philippines, et cetera. Their consumer profile is completely different. They buy another type of products, not on the luxury side, but maybe on the food and other aspects. And then you have the, let's say, the population in between that also travels on a regular basis in Europe, mostly.

The effect, of course, of the current crisis has been in the 3 because they couldn't fly as often as they used. I think on the first constituency, the effect will be limited because if they don't travel now will travel later and the consumption pattern will not change. In the last ones, they have to retain some of the flights. They will retain it because sometimes even for visa conditions, they need to take some mandatory flights a year, and they go back home to see their families that they sometimes are not together. And then on the middle one, we believe that's what the airlines in the region are saying that when the possibility to travel again on a regular basis will be there.

What there will be probably a slightly more -- slightly additional effect are the tourists going to the region that in our experience, maybe not in the Middle East, but in other areas of the world, when there is a crisis, the tourism stops, but it reinitiates as soon as the security conditions fell correct.

Domestic business, which means convenience stores and food and beverage. The duty-free is more limited. Duty-free is going quite well this year so far, but also because the perimeter has expanded. As you know, we won significant contracts in GFK last year, which included the duty-free, food and beverage and convenience. So that is supporting because they are material on the duty-free. So it's true, if you look at the categories, they are going a little bit better. But in general, the American consumption -- the American passenger is consuming more on the food and beverage and the convenience.

And yes, it might look a slightly contradiction if you look at some of the macroeconomic data and our data. But if you look at last year, the macroeconomic data was slightly better than ourselves. And now our data is slightly better than the macroeconomic data. I can give you the data. The reasoning behind, I don't 100% can answer, but we are performing better in ourselves than the number of passengers according to TSA.

The team in North America feels moderate, optimistic for the remaining of the year, but we need to see. The prediction of consumption patterns on group-wise are always much more reliable than when you go to region or you go to country or you go to airport. The more detail you go, the less precise is the forecast.

And in your last question, I think Yves addressed it before, but I can add one very clear point. If we have the same sales on last year, we should have the same results of last year. Nothing should avoid that happening because even if you have some cost base increasing, in other places, you can cut the base. I was reluctant to answer that question because you are kind of putting the scenario of 0 sales growth on the mind of people, and that's not what we want. But I think there has been twice the question. So I think it's fair to answer.

The next question comes from the line of Gian-Marco Werro from Zur KB.

Two questions from my side. First one on the self-checkouts. As I understand correctly, the rollout is mostly completed in the U.S. Can you give us a bit more visibility on the rollout in Europe or EMEA region? How much more can you do there also in regards to your cost flexibility? That would be interesting.

And then the second question is on your CapEx plans, now considering different scenarios for 2026. How much of your CapEx plans that you have budgeted for this year do you really need to spend and to also to consider as a cash out? And how much more visibility do you have there or flexibility do you have there to reduce it then also for the second half, depending on a more dark scenario?

Look, the self-checkouts, we will go in -- and they are going everywhere, but it's slightly different depending on the type of business. So for example, self-checkouts for convenience store and the number of convenience stores we have in the U.S. is bigger than anywhere else, it's a no-brainer. For food and beverage, it depends on the type of food. You have the self-checkouts, but you also have the self-kiosk that is even more sophisticated. In duty-free, we have self-checkouts practically everywhere. But we -- in those cases, we combine it with typical cashiers and also with, in some cases, handles on the most -- on certain parts of the store, also depending on the size.

So there is a progressive deployment of self-checkouts across the group. It's true in the U.S. or in North America, we are more advanced because of the type of business. Probably to reach the point that we would like to reach is another 12 to 18 months to go.

And on CapEx, we always have some commitments, but part of the CapEx can be cut or postponed if needed. We have a reasonable amount of flexibility. But I also want to say something, if it's not needed, I'd rather do the CapEx because if the CapEx is done properly, it brings you higher sales and higher profitability. So I'd like to cut -- I don't like to cut positive ROIC CapEx unless it's strictly necessary. But if it's necessary, we have flexibility.

The next question comes from the line of Luka Trnovsek from Berenberg.

So I have 2, please. So the first one was on Club Avolta. You mentioned that it's growing both in membership and also as a share of group revenue. So I was wondering, do members skew towards any particular business? Are they buying more F&B or duty-free? And also, do you see a natural limit to how big the program can get? And then just number two, I was curious about margin.

Do you see any particular kind of regional differences in margin this year? Do you think margin improvement can be broad-based across the group? Or do you see it being more concentrated in the Americas given the Shanghai ramp-up in APAC and then also, I guess, the Middle East impact in EMEA?

Thank you very much, Luca. I'll take the first one. It's super interesting, the data we take from Club Avolta. We learned so much about the Club Avolta members. We learned so much also from those Club Avolta members how to profile other type of non-Club Avolta members, and we can improve, thanks to that, the shops, the restaurants, the assortment, the pricing, et cetera.

And the information or the examples I'm going to give are exactly 0 because this is a competitive advantage for us. Nobody is even close to what we have on Club Avolta. But be assured, we learn a lot, we profile a lot, and it's a key tool together with others on the digital side to keep improving our business and keep sustaining the continuous improvement on sales over the coming years. You might want to take the second one.

Absolutely. So look, on the second one on the margin, if I understood your question correctly, it was around if the margin, and I assume EBITDA margin is different or if we see the trends in the different regions. And the answer is no. We don't see a specific trend or a change in the trend in that regard. I mean, obviously, all our initiatives target to an improvement of the EBITDA margin globally in all our operations. I mean that's obviously not limited to certain regions. But otherwise, also with the current situation of the Middle East, we don't see a change or a different trend than what we typically would expect to see in regard to the margin.

Maybe what I can add there is that in situations where you have on a regional limited basis, issue like the Middle East crisis at the moment, what we obviously always do -- and I think we're very clear on that is on making sure that the cash flow is optimized. And that typically, in most of the cases, also means maintaining the margin, obviously. But look, there might be also cases where on a situational basis, we may go for some additional promotions, et cetera, to drive sales in specific locations or regions to ultimately generate and maximize the cash flow. At the moment, it's not the case, but just to be clear and also complete there.

The next question comes from the line of Isacco Brambilla from Mediobanca.

I have 2. The first one is on the equity free cash flow. I appreciate your guidance and commitment is on equity free cash flow conversion, but focus for the market for investors is on absolute values. Based on your comments, it looks to me current consensus expectations touch about CHF 500 million seem at reach. Is this statement correct in your view based on the current scenario? Or am I missing something?

Second question is on the March, April current trading, specifically on the trajectory across the 2 months. Looking at European data, looks like the worst point in [Audio Gap] perspective, do you see that indication as somehow reliable on the trajectory seen over the past weeks?

The first one. Yes. So look, on the equity free cash flow conversion for this year, I think what we try to do today is to provide you a clear and transparent picture of where we see the current situation, also taking into account the Middle East crisis. And from today's perspective, it's obviously extremely difficult to make a forecast for the full year, and that's why we confirm the medium-term outlook.

Having said that, looking at current trading, and Xavi will answer that question in a minute and also considering what we see in the market, what we see in regard to Middle East and what we hear, there is nothing at this stage which prevents us from achieving the consensus or the targeted goal for this year in line with our expectation. But again, it's very intransparent what is currently going on. The situation remains fluid. And therefore, we also cannot and will not give any outlook or guidance for this year specifically.

On the second question, first, a caveat. Like I said, our numbers at group level are much more reliable than if you stop down to regions, countries, airports, et cetera. The same thing happens with the figures, they are on a temporary basis. They are more reliable on a year basis than on a quarter, on a month or a few days, that is what I'm going to answer. So with this caveat, what we are seeing at the end of April and beginning of May, it's a clear decrease of the effect of the Middle East.

If in April and March, the effect was in the range -- sorry, in March, April was in the range of 3%. Now in the last few days, the effect is closer to 2% than to 3%. But again, very few days. So we still want to be vigilant. But as you ask, the trend in recent days is getting slightly better than in the middle of the Middle East crisis. But it's also reasonable. I mean some airports that were shut down are open. Some routes that were shut down, they are open. So the effects also in overall number of passengers is every day, every week, a little bit less than the previous week.

We have a follow-up question from Jorn Iffert from UBS.

It's 2, please. The first one is just a housekeeping one. What you have seen in Q1? Is this mainly volume driven? Or is it more price mix driven? Just have a feeling here, please?

And the second question is with the next generation of scanners implemented at some airports, so you can't bring liquids of 5 liters plus. Do you see any changes there in consumption patterns of consumers behind the security line, buying less liquids, buying less sandwiches or anything else or not really meaningful?

I mean the effect we have seen in the first quarter is more related to passengers. I mean there were certain routes in the Middle East, obviously, and flights to and from the Middle East, there were less passengers that has been the major effect on the revenues. No meaningful effect of the new generation of scanners. We didn't see a big pick up of sales when there was the first time the liquid restrictions were added and no big changes now.

Of course, you have people that maybe buy the perfume after -- a big perfume after the security for themselves, and that's why -- but that is very limited. I mean people buy perfumes in a store for a gifting, et cetera, you want it with a package, wrappers et cetera. So in general, the effects are very limited on the negative side. What might be helpful is that experience shows that less stressful pre-shopping experience is helpful.

Less traffic to the airport, less queues in the check-in of the bags, on the security, on the passport controls, immigration, whatever of those all these stressful situations get better and the new scanners are improving that. That, in general, gives a peace of mind that helps potentially the consumption.

Again, let's not go to an extreme that is negative to the extreme that is super positive. But in general, less stressful pre-shopping experience is helpful. So we like the massive investment our airports are doing in improving the customer journey and experience.

The next question comes from the line of Manuel Lang from Vontobel.

Actually, sorry if I missed that earlier, but it is one to better understand the sentiment or the spending patterns of the passengers a little bit better. So where do you see like the spending being most resilient in terms of products, so tobacco and food, like basic needs, if one can say that, or luxury goods and perfumes. And I'm talking about March, April only now, that would be helpful.

Very good question. Look -- and very complex to answer because it depends on the region, depends on the type of business, depends on touristic, non-touristic airports, depends on the weeks of Easter, people coming in or out of Easter or a normal week, a normal workday, et cetera.

So I think the best way is it's not material change of trends on what we have seen in the last 12, 18, 24 months. It depends on the places, depends on the leisure, nonleisure, depends on the routes, the behavior stays consistent with what we expected. There are always changes, but it's not that we can say in the last 3 months, there has been a major change on the consumer sentiment across the group, and now this category is gone and this category is growing.

It's more linked to origin, destination, profile of customer and seasonality. Let's see in 12 months at the end of the year, probably it's always more relevant to answer a question like yours because then you have 12 months, you have more distance with the prior year, you can see more of the trends. Now it's too early to announce any big headline on change on consumer sentiment. But thank you for the question.

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Xavier Rossinyol for any closing remarks.

First, thank you very much for attending this call, and thank you for your thoughtful questions. Second, as I always like, I want to publicly thank all the Avolta team members. It's thanks to you on the shops, on the warehouse, on the offices, in the global and local and regional functions that we work. But I want to give a special thanks to our team members in the Middle East and their families. It's been a very difficult couple of months. You've been always supporting the company, supporting the shops, supporting the restaurants is highly appreciated.

And the last point, as this is an advertising opportunity, please become a member of Club Avolta. It will be very good for you, and we will try to use whatever data we get for that to make a better offer for yourself. And once more, thank you, everybody. And I hope to see you soon in our shops and restaurants. Safe travels. Thank you.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call and thank you for participating in the conference. You may now disconnect your lines. Goodbye.

Ladies and gentlemen, welcome to the Avolta Full Year 2025 Results Conference Call and Live Webcast. I am Moira, the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast.

At this time, it's my pleasure to hand over to Mr. Xavier Rossinyol, CEO of Avolta. You will now be joined into the conference room.

Good afternoon here in the Zurich Airport. Good evening, good morning on the call, and very welcome to the Full Year 2025 Avolta Results Presentation. I'm Xavier Rossinyol, the CEO, and I'm joined here with our CFO, Yves Gerster.

Let me start straight on the highlights of 2025. We have reported an organic growth of 5.5%. Very strong organic growth in 3 of our 4 regions, 8.2% in EMEA, 7.4% in Latin America and 6.9% in Asia Pacific. The only region that has not been growing so strongly is the U.S. with a flattish growth. So if you take the group without North America, the organic growth would have been 7.9%.

We have once more increased the EBITDA margin from 9.4% last year to 9.7% in 2025. And that's the fourth year in a row where we increased the EBITDA margin. In 2022, it was 8.8%.

Equity free cash flow has reached CHF 487 million. This is a 15% increase between '25 and '24 with a massive improvement on the cash flow conversion from 33.5% to 36.8%, clearly ahead of our own expectations. Equity free cash flow per share has increased an 18%, also supported by the reduction of the number of shares through the share buyback.

Earnings per share, a fantastic 33%. This is a combination of a strong EBITDA and good performance in all the other lines of the P&L plus the consequences of the reduction of number of shares.

Leverage, very important for us, has again reduced from 2.1x net debt to EBITDA to 1.96x, crossing for first time in many, many years, the barrier of 2x. And that is including all the payments we have done on dividend and all the money we have invested in the share buybacks.

Return on invested capital increased again from 9.5% in '24 to 11.4% in '25. We've been, for the last 4 years on a ROIC, ahead of the ROIC we had as a company before the pandemic. And Yves will elaborate on how important it is for us to focus on the return on everything we do. But not only a good performance for 2025, but the performance also with a very strict discipline on our capital allocation.

We have invested in the business, as we said, with an increased return on investment. We continue deleveraging following the different layers of our capital allocation. First, invest in the business; then deleverage a strong balance sheet; and third, remuneration to the shareholders.

We completed the share buyback of 2025 with a cancellation of 3.3% of our capital. The Board approved last -- approved in the last meeting to propose to the general assembly an increase on the dividend from CHF 1 to CHF 1.15 per share, which is a 15% increase. As you know, our policy is that we will distribute as a dividend, 1/3 of our capital -- of our cash flow generation as this one increases year-on-year also our dividend. And we are announcing a new share buyback of CHF 225 million for the year 2026. If you put together the share buybacks we did in '24, in '25 and the one we are announcing today for these 3 years, we'll be roughly canceling 10% of the shares of the company, clearly focusing on delivering more value per share for our shareholders.

What's going on at the beginning of this year? The year started pretty well. January is a bit of a strange month because we had a very strong 2025 January with almost 10% growth. Also, the Chinese New Year is moving between January and February. February for me, a more -- a better proxy of the -- what we are seeing in the company. It has grown 5.5% organically. And like last quarter of '25, we see encouraging improvements in the U.S., still slowly but clearly a change on the trend of 2025. Remember, that the U.S., North America is our largest country.

Middle East situation. Well, first of all, I'm not sure it's of interest of the investor's community, but it's very important for our employees. We have 1,200 team members working in the region. They are all safe. We check daily with all of them. Also, we have not been affected in our shops and restaurants. And to put a little bit of context, Middle East region directly and indirectly, it's accounting for around 3% of our total turnover. So even if this conflict will last for a few months, which I think most people don't anticipate, the effect we will have in 2025, it will be of limited nature. Also, we have seen year after year that this type of shocks have an effect on where it's happening, but lesser of an effect in the global movement of passengers.

If you have to go to Asia because you have a business trip, you will not go through the Middle East now, but you will find an alternative route. People are not canceling their holidays. Maybe they are moving from one location to the other. And that's why once more, our extensive geographical diversification, it proves as a very strong hedging against these type of risks we are seeing right now.

And this performance of 2025 is the direct consequence, a clear strategy with relentless focus on execution. And I know it's a bit repetitive because we've been saying the same thing for the last 4 years, but I want to once more remember, number one pillar is focus on traveler and consumer. And everything we've been saying over the last 4 years, the combination of food & beverage and retail, more entertainment, more flexible stores, more local products, more advanced pricing, more brand assortment, hybrids, et cetera, et cetera, et cetera, and the investment on data, loyalty, et cetera, all that is to keep expanding spend per passenger and gross profit margin.

The second pillar is the diversification, both geographically and also on business segment. And that once more, it's proven a key element of our resilience, both in growth and profitability.

The last one is productivity, operational excellence. We focus constantly in how we can improve the things we do. And that's why not only growing in a resilient manner, but we are also expanding margin and cash flow conversion.

To give some numbers on the resilience and the diversification, we are in 70 countries with 5,000 points of sales in 1,000 locations, but we are also very well diversified on business line. We almost have 1/3 in duty-free, 1/3 in duty paid and convenience and 1/3 in food & beverage, which hedges us not only about potential geopolitical shocks, but also on consumer behavior.

And the list on the right is just a reminder that 2025 was not an easy year. We had a bunch of things happening. Now we are all focused on what is happening right now, and we might be forgetting that '25 was a challenging year. We had the first Middle East conflict, we had exchange rates all over the place, we had the tariffs, we had the slowdown in the U.S. passengers. We have still the ongoing lower Chinese passenger consumption, the Ukraine-Russia war that makes a bunch of flights between Europe and Asia more cumbersome. Despite all that, we've been reporting very strong numbers. Again, speaks about the resilience of the company.

And one of our key focus is the spend per passenger because that's where we can add on top of the passenger growth. And we do that with the growth engine we presented in the Capital Markets Day a few months back. The 3 businesses: duty-free, duty paid and food & beverage, both physical spaces, shops and restaurants, but also the digital and data side. And with all that, we focus on improving pricing, assortment, having more flexible stores, more distinctive look and feel with more focus on local because it sells more, enhancing retail and food & beverage, not only with the hybrids, but also sharing information. And now we have enough time with hybrids to confirm that a food & beverage outlet inside a big duty-free store, for example, drives more foothold into the store. So not only you sell what you're selling on the new F&B outlet, but you're enhancing the sales on the overall store, entertainment. And on the digital side, I'll come back later a little bit more but a smart use of data.

With all that, we've been increasing for 4 years in a row, '22, '23, '24 and '25, the expenditure per passenger. If you discount the effect of the U.S., our like-for-like this year has been around -- like-for-like without business development between 5.5% and 6%. And about 60% of that comes from passengers and 40% comes from spend per passenger. And what is interesting on the graphic we are putting here is that you see very different behavior per region and per category. And some of the category analysis will resonate you if you follow some of the mega trends of what's happening with some of these categories.

But for me, what is very interesting is that despite all plus and minuses, the overall is plus. Again, also our exposure to different categories, all the kind of brands from the most luxury ones to the most basic ones, it helps us to adapt to the consumers. And what we're trying to do year-on-year is to do that adaptation better and faster. And for that, we need data.

And data is becoming year-on-year one of the key elements of our long-term strategy. And I want to put 3 ideas here. First idea, we are unique on the size of our data pool. There are about 10 billion passengers, air passengers per year. We have exposure in the locations where we are to about 2.5 billion. And last year, we had 682 million tickets for customers, and 16 million of those are Club Avolta. So the first clear idea is that we have access to more data than anybody in the industry. And year-on-year, we might be becoming even a powerhouse on travel data alone.

The second idea, we are creating a data and digital ecosystem, putting together all these sources on the information we have. One is a transaction data, the tickets, what is in the ticket. Of course, if it's duty-free, we also have the boarding pass, so we have more data. We use data from the airports. We use our Net Promoter Score to see not only what they buy, but how they feel on the shops and the restaurant service. We have -- in those stores where we put smart cameras and smart analytics, we also see what happens on the stores, how people moves around. We have, of course, a very detailed data on those members of the Club Avolta, which are the frequent flyers. And we are also using a platform of start-ups calling it Avolta NEXT, which is providing additional ways of looking at data. And what we are doing progressively and without any doubt advancing, putting all those closer and closer together. So when you have more data than anybody else and a very clear data strategy putting them together, you are moving ahead in a different way.

And the third idea is we don't do that for the sake of having more data and that's it. Our target is to monetize that additional and better data we are getting. And for that, advanced data management, AI, it's becoming increasingly faster and cheaper to generate value from that increased number of data points. There's a bunch of list with a couple of examples. If you understand better the consumer, if you have better data on the products, if you have better data on the way people moves, you can start applying, for example, dynamic pricing that we tested in 2025, and we're going to extend progressively in 2026. And we see that if you do it the right way, it's a clear system to increase sales, but also advanced data can improve the operations.

One very complex topic for us, particularly in the duty-free side because we have global suppliers is the logistics and the supply chain. If you improve your forecasting system, which is basically data and better, for example, AI, you can improve your assortment, improving sales, gross profit margin and potentially decreasing working capital. So we see a tremendous potential. But it's not going to happen overnight, it has not happened overnight and we don't want to happen overnight. We want progressive, realistic improvements in the business for the coming years.

And one element of this new data, digital and AI strategy is Club Avolta. We've been talking so much about Club Avolta that we maybe forgot that Club Avolta was born only in October 24. So it's a 15-month old program and has already achieved 16 million users or members, represents 7% of the total sales. An average member of Club Avolta spends 3x a nonmember. This is for show. There is a transaction every 2 seconds. It has won a bunch of awards in the industry.

But for me, what is really important is the amount and quality of data we can extract from that and how we can keep fine-tuning our offering, our services to those Club Avolta members. And one way of doing that is with partnerships. And we have a bunch of them here from airport lounges, airlines. And you see we are starting getting to that point where we can see that if you are a member of Club Avolta and a member of certain loyalty programs of airlines, you consume more than if you are not having both programs. So better understanding the passengers, better understanding the frequent flyers allows us to more and more do better job as a retailer and as an F&B operator.

One data point that is not here, we had last year, 1.5 million downloads of our app. And 25% of the new members were actually downloading the app. And that's even more important because if you have your loyalty program in your wallet, we get a certain amount of face time with you. But if you have the app, it's additional. There is people gaming for free in our app. We learned so much, and we are only at the beginning of what we can do to progressively monetize this Club Avolta because it's one of those win-win-win. The passenger, the loyal member wins because they have special treatments. We win because we sell more and the airport also wins because they get a percentage of that.

And one point I wanted to make here is what we call Smart CapEx is to emphasize the idea that everything we do, everything we invest on is based on a very robust governance and a very strong focus on return on investment. And that includes the business development, that includes the refurbishment of existing shops and restaurants, that includes the investment on data, digital or the new spaces. And 2025 has been on new spaces, a very interesting year. We have entered new countries like Tunisia, Saudi Arabia, Japan, we opened the shops now. In existing countries, we have operated new segments. For example, we won the first duty-free store in Mainland China, a historical move and that was because we have a very clear strategy of focusing on geographical diversification and segment diversification. But we have the team in place to benefit from that.

We also opened in '25 the first food & beverage in Latin America, both in Mexico and Brazil, another very interesting move. We have also won important contracts in North America, like several terminals, food, convenience and duty-free in JFK in New York. And we also have extended many of the existing contracts. I cannot name all of them because it will take a couple of hours, but I want to mention one because it's the contract here in Zurich, which we extended this week for 10 years with duty-free included, which we are very happy.

But all what we do is with a smart focus on the return on investment. I was just checking that now it comes before I have my final slide, a small video in case people is getting bored of my speaking. Now we have some more energy into the system. So can we put the video, please?

[Presentation]

On my last slide. So '25, despite all the turbulence and all the headwinds, was a very good year in all the key metrics of our outlook. And we were very disciplined in getting a strict capital allocation policy. So we have proven over the last 4 years now, consistent delivery and consistently doing what we have said.

Now of course, People is going to ask what happens going forward. And once more, we confirm our midterm outlook for the incoming years, which is organic growth of 5% to 7% per annum. EBITDA margin of 20 to 40 basis points additional. And yes, additional to the 9.7% we reported for the full year 2025 and an increased cash flow conversion of 100 to 150 basis points. We've been doing much better on this metric over the last 4 years, but we think we can keep improving another 100, 150 basis points on the current basis.

And with that, I hand over to Yves. Thank you very much.

Thank you very much, Xavi, and good morning, and good afternoon for everybody who joined online and good afternoon for everybody who joined here in the room in Zurich to this year's financial result presentation. Let me start directly with the highlights of this year's results, starting with the turnover on the left-hand side of the slide.

Turnover came in at CHF 13.72 billion, that represents an improvement versus last year organically of 5.5% or -- and that's actually the metric I prefer, at constant exchange rate, 5.9% versus the same year 2024.

Looking at EBITDA, the margin has improved by 0.3%, now reaching 9.7%. This is bang in line with the medium or the midpoint of our guidance, which Xavi just have explained of 20 to 40 basis points improvement year-on-year in the midterm.

Equity free cash flow, once more the start of the presentation, came in at CHF 487 million. So a significant improvement versus the number of the previous year.

If we look into the growth first -- into the detail of the growth, you will notice on the left-hand side that like-for-like came in at 3.9%, as Xavi has explained at the beginning, that's on one hand side driven or predominantly driven by the slower performance of North America. Net of the North American impact, the group would have grown by around 5.5% to 6% on the like-for-like.

If you look at the different regions, as I've just mentioned, growth was significant in EMEA coming in at more than 8%, at 8.2%, but also at Lat Am with 7.4% and APAC with 6.9% improvement versus the previous year.

If we go further into the P&L and looking at the detailed evolution here, there are 2 messages from my side on the P&L above the EBITDA margin. Number one is you will notice that the improvement year-on-year on the gross profit margin is probably not as high as expected. It's a slight decline. You will also notice that the concession expenses year-on-year as a percentage of turnover has increased actually quite substantially. And you will also see that personnel expenses and general expenses have decreased. Now there are 2 reasons for that. Number one -- or actually 3. Number one is a mix effect. Because of the slower performance of North America, we see an impact on the gross profit margin, on the concession expenses and also on the personnel and general expenses. And the reason for that is potentially an obvious one, and we have presented it in both Capital Markets Day.

North America has a very strong food & beverage business and also a very strong convenience business, driven by the big footprint we have in North America, specifically in the U.S. And as we have explained many, many times, the food & beverage business, while it has a very similar EBITDA margin than the duty-free business, comes in at a completely different cost structure when you look at the gross profit margin, the personnel expenses and the concession fee, but then also the general expense line.

Food & beverage has, relatively speaking, a higher gross profit margin. And because it's the evolution and the turnover growth was lagging behind the other regions, the improvement in the gross profit margin is not as pronounced as it would have been if North America would have grown as well in line with the rest of the organization. So gross profit margin because of that lagging slightly behind or the improvement lagging also slightly behind. But if you look at it on a region-by-region basis or if you compare food & beverage with retail in both areas, the gross profit margin has increased. But then on a consolidated basis, it did not. Again, a mix effect.

The same applies on the concession fees. Concession fees in food & beverage are significantly longer than in duty-free. So the same thing applies here because North America was not growing as much as the rest of the organization, the concession fee, relatively speaking, was increasing. And the same on personnel expenses and general expenses. Food & beverage has typically higher general expense, but because of the lower growth, you see a decline there.

Now there's another element I want to quickly mention on personnel expenses and general expenses, which is irrelevant. One element there is the improvement of productivity, simplification of processes, automation and the further use of artificial intelligence throughout the organization, from front office to back office. That also supported the reduction of general expenses and also the reduction of personnel expenses. This is point number one.

Point number two, it's probably a little bit more complex, but we have started to internalize some of the costs, which before were covered by external advisers, by support we got from outside the organization into the organization. So that led to a slight negative effect on personnel expense, but an over-proportional positive effect on general expenses. Some of the things we did there, for example, is in IT. We are focusing more on having the function there in our shared service centers rather than buying external advice. And something similar happens in HR, something similar happens also in the finance organization. So it depends less on external advice, for example, also in the area of tax support. That ultimately led to the improvement of the EBITDA margin by 30 basis points.

If we go to the lower part of the P&L, you see a number of effects there. Depreciation and amortization came in, in line with expectations. If I look at the financial result, this was significantly better than the year before. On one hand side, it's structural improvements. It's well management of the interest expenses, some additional interest income on some cash deposits we had, but then on top of that, also by a good positive FX result. So look, we have a natural hedge in place, as you know. So the FX differences we report are not very material. But nevertheless, for the last 2, 3 years, it was slightly negative. This year, slightly positive and this slightly negative to slightly positive helped us to improve the financial result there as well.

Income tax has been reduced further as a percentage of EBT. For me, this result here is a good proxy to what we should see going forward. So somewhere between what we have seen last year and this year, 21.8% to 22.8%, I believe, is a good area of approximation if you want to model our tax rate going forward.

And then when it comes to the net profit, we have generated CHF 645 million. Also, minority interest has slightly decreased as a percentage now standing at 22.8%. There are 2 effects I want to quickly mention there. On one hand side, as you know, some of the minorities we have in North America. It's part of the business model there. It's unavoidable. And as a consequence of the slower performance in North America, we are lacking a little bit behind there. This is one element.

The other element is a more structural one, because we are optimizing the organization, because we are more efficient on processes, specifically also on global functions and on global elements, which are owned 100% by us, we can expect to see a decrease of that percentage over the medium term. So that's more a structural improvement.

The last point quickly here is on the right-hand side. If you look at that table with the performance over the last couple of years, quarter-by-quarter, there's something which is very interesting to observe. If you go vertically, Q1 '22, '23, '24, '25, you do the same for half year, you do the same for the 9 months and the full year, you see that quarter-by-quarter, year-by-year, we have improved in line with what we have mentioned from an outlook perspective. So year-on-year for every single quarter, we have improved the EBITDA margin by at least 20 basis points, in some case, closer to the 40 basis points. So in range with our outlook we have provided.

Moving on to the bridge of the income statement. We have shown that several times in the past, we then didn't show it for a while. It's always reflected in the annual report. Sometimes, we have shown it in the annex of the results presentation. But it's one of those things we got asked during the roadshows by investors and external stakeholders to show because it helps to understand the bridge from IFRS to core. You see it here in a very transparent way. I will not go into the details, but we do actually 3 adjustments to IFRS. One is the acquisition-related amortization because we believe that, especially now in a situation where the big transactions and the big acquisitions lie in the past of the organization, it's important to correct for that because the concession rights are only activated when it comes to acquisitions.

When we grow organically, we don't activate those concessions. And as a consequence, over time, this amount is fading and being reduced. And it would be wrong not to adjust for that, also because core on one hand side, it should be transparent, but also management compensation depends on that. And it would be wrong to have an improvement over time purely mechanically because of the acquisition-related amortization. The second one, which is much more important in this lease adjustment, it's related to IFRS 16, and it's purely related to that. We, as you know, believe that IFRS 16 does not represent us properly, and therefore, we adjust to that something similar applies for the fuel.

What is important here, you may like or don't like, core, we believe it's the right way to represent our business, but maybe you prefer IFRS. So what is important to note here is the bottom line. The IFRS result profit to equity holders of CHF 199 million is by far the best result the group has ever generated this regarding before or after IFRS 16. If you believe that the IFRS 16 adjustment of CHF 177 million is justified and you add that to the IFRS 16 result, the bottom line result is about 3x the best one the group had in the past before IFRS 16. So a significant step-up in the bottom line result in that regard.

Moving on to the cash flow. It's a record equity free cash flow. But then if you look at the details, it's quite uneventful. Core EBITDA was one of the biggest contributor to ultimately lead to the strong equity free cash flow. On top of that, we had some improvement in the net working capital of CHF 60 million. The improvement in the net working capital is predominantly generated by improvements in inventory. So we are more efficient of managing our inventory. And as a consequence, we're able to take out some of the net working capital there. Otherwise, CapEx is in line with expectations, so is dividend to minorities, income tax and also the interest result. So nothing surprising there.

And below the equity free cash flow, we have the 3 typical lines, you will see the CHF 175 million of share buyback. As you know, the share buyback of last year in total was CHF 200 million. So we have canceled shares in the value of CHF 200 million. The amount we purchased is slightly less because we still had some treasury shares on stock, and we used CHF 25 million of treasury shares to be canceled to complete the CHF 200 million program. On top of that, you see the reflected dividend increase there from CHF 100 million the year before, CHF 140 million last year, so an improvement of 42% year-on-year. And still disregarding the share buyback, disregarding the increase in dividend, we were able to reduce the net debt by around CHF 130 million, standing now at CHF 2.5 billion.

And that leaves us or leads us to the leverage. Leverage is standing at 1.96x by the end of 2025, which is exactly in line with the medium-term guidance of 1.5x to 2x. So it's just scratching at the upper end of our medium-term target when it comes to leverage.

On the maturity profile, it's still very well balanced in regarding to different currencies, different products, different maturities and also from a fixed and floating mix with having 80% or around 80% of our debt being under fixed rate arrangements. Now there are 2 maturities coming up. One is actually in about 2 weeks' time on the 23rd of March this year, which is a CHF 500 million convertible. We are not going to refinance that. We are repaying that convertible on one hand side with cash, which we had from a refinancing of last year. Last year, we financed or refinanced a CHF 300 million bond with a new CHF 500 million bond. So there's some cash left. And on top of that, with cash from the balance sheet. So no refinancing there.

The next maturity is at the beginning in the first quarter of 2027, so around 12 months from now. There, we plan to refinance that in the next couple of months. It's not finally decided yet with which product or mix of product, but you can expect to hear from us quite soon there in that regard. And look, having said that, it's also important to note that there is no refinancing risk. So the group has sufficient cash on the balance sheet and also sufficient available facilities under the RCF, which matures in 2030 to refinance the maturity of next year even if we would not go into a new arrangement on the market.

ROIC, Xavi has quickly announced it. ROIC is something which is extremely important for us when managing the business. It drives any decision when it comes to CapEx. It drives the decision when it comes to business development, be it organically or inorganically via M&A. So whenever we enter into a new project, we look at the ROIC. And we look at, obviously, when you look at single projects at IRRs and at present value and some other performance indicators.

Now we haven't communicated that to the market in the past. We didn't want to distract from our KPIs, turnover growth, EBITDA margin improvement and equity free cash flow. We will continue to report those. But nevertheless, we came to the conclusion based on feedback also we got from the market that it's important to show you also the ROIC. The ROIC for us, this follows a very strict definition. We believe that it's a very clean definition. We take into account everything, taxes, minorities, so everything which is related to the business and for our business model is included there. It's a very clean number from that perspective. And what is also important, and Xavi has mentioned it at the beginning, is the progression over time.

So we see a strong improvement year-on-year, reaching 11.4% in 2025. And you see clearly the trajectory here. It's reflected in the arrow. We do believe that it will improve over time going forward. And we'll do everything and all the decision we are continuing to do in 2026 and beyond with that in mind and with having in mind that it should be accretive for the ROIC going forward. We are not going to report that number on a quarterly basis. It will be reported on an annual basis. So the next time you hear about that is in 1 year time. We will continue to report all the other KPIs in the usual fashion. But for that, I believe once a year is sufficient and we will also report obviously last 12-month information in that regard.

Moving on to the capital allocation policy. It's the same as we have shown for the last 2 years. There is no change in that regard, and I believe that's also important, and that's the key thing about it. We are using it very strictly. We have the clear priorities to reinvest into the group. We have just discussed CapEx before when talking about the cash flow. We will continue to do that because we believe there are opportunities out there, which are worth exploring and to enter into. On top of that, we are looking or continue to look into some small- to medium-sized bolt-on acquisition, fully cash financed and with the requirement to be accretive in general, but also from a ROIC perspective. And we are very much focused on maintaining the leverage and the leverage targets we have discussed before between 1.5x and 2x net debt to EBITDA.

And last but not least, whatever is remaining as a free cash flow of the organization, we are using as a cash return to shareholders. We have discussed it before. But as a summary, once more, the dividend, where we have started about 2 years ago, to pay CHF 0.70 per share as the dividend improved significantly to CHF 1 last year and a further 15% improvement for this year proposed by the Board to the general assembly.

We are following a very strict 1/3 of equity free cash flow there and that leads basically to that pattern. On top of that, we have continued with the share buyback. We did a cancellation of treasury shares 2 years ago. We did the share buyback last year of CHF 200 million, and we have announced this morning today a further program to be launched shortly for CHF 225 million. And if you take all of that together, that's a reduction of around 10% of the shares since we started with canceling shares and the share buybacks around 2 years ago. So a significant reduction in the number of shares over the years. And if you calculate all of that together, the dividend and the share buyback, that basically reflects a cash return to the shareholder over the last 2 years, including now 2026 of more than CHF 1 billion, so a significant amount.

That basically brings me to the end. As a quick statement before I hand over to Xavi, what is outstanding about the results from my perspective is threefold. First, that we have achieved this growth, disregarding some headwinds, and Xavi has mentioned them, we have faced during 2025, while at the same time, improving profitability. That's point number one. Point number two, we have continued to invest into the organization by investing CHF 500 million CapEx, while still significantly improving the equity free cash flow. And number three, we have achieved the target leverage of 2x, while at the same time, generating cash returns to the shareholders of a significant higher dividend and a CHF 200 million equity share buyback.

Having said that, I hand over back to Xavi for the conclusion.

Thank you, Yves. Well, to avoid to be repetitive, good performance, all the KPIs in line or ahead of the outlook, very strict capital allocation, growth, deleverage return to shareholders, an obsession on profitable growth. And we confirm the outlook.

The last thing I want to say is, first, thank everybody here, thank the shareholders for the continuous support, particularly in the last few years, also the strategic shareholders, the Board, the suppliers, the landlords. A lot of the things we are trying to do are only possible in the combination with the suppliers and the landlords, the 3 together. And the last and most important, thanks to all the team members, starting from my colleagues at the Group Executive Committee, going through all the global function, all the regional functions, all the shops, all the restaurants, all the warehouses, everybody of the 75,000 employees of Avolta that thanks to you, we are delivering these results.

And a last word of solidarity with our employees in the Middle East, they are going to the shops. They are going to the restaurants despite being in the middle of war. So we appreciate your support, we appreciate your commitment to the company. And I also want to thank the magnificent collaboration we have with the airport authorities and the authorities in that part of the world that have been tremendously supportive and also focusing a lot on the safety of our employees. So thank you very much.

Now we are going to open for questions and answers. Thank you.

Thank you, Xavi. So good afternoon, everybody. For the Q&A, we're going to start with the floor, and then we'll go on to questions on the phone, and then we'll finish with questions on the webcast. We've got a mic on either side of the room, so pick your hand up, and we can kick off.

It's Laura Bucher with Octavian. I have 3 questions, if I may. So the first one, in the CMD last year, you said that you expected a 30 bps pressure from concession fees. So if and when North America comes back, is that still the level that you expect? Or has anything changed since July? I'll take one by one.

Look, of course, we monitor the activities segment by segment and region by region, and we see a limited inflation in the concession fees when you eliminate mix effects.

I think what is important for me is that the improvement in gross profit margin and productivity has to be larger to any potential pressure on the concession fees. As Yves explained, you cannot just look at the line of concession fees, you need to look -- because you could have an operation with huge margin in the gross profit margin, very low people and a little bit higher concession fees. So we expect that the combination of the different elements allows us to deliver on our outlook on the EBITDA margin.

I think on the last 4 years, you have seen that the evolution of the concession fee has been quite kept at bay. It has increased, but in a very limited manner. So we expect something similar for the coming years.

Okay. And then the second question on lease payments in the cash flow statement. There's a 20% increase year-over-year. So almost CHF 400 million more than '24 and similar trends H1 versus H2. So what happened there?

On the lease payments? So you're looking at the IFRS results?

Yes.

So look what happens there is the lease payments on the cash flow statement, IFRS talking now, so it's not what you see in the presentation, but in the annual report reflects the fixed component. So whenever you renew a concession or whenever you have a concession, which has a relevant minimum annual guarantee, the minimum annual guarantee or the fixed component is reflected in lease payments while the variable part in the IFRS P&L is reflected under lease expenses. And together, they reflect the full charge of the year for the leases under IFRS 16.

Yes, I'm aware of that. So my question is why has it increased? Or why has your MAG increased CHF 400 million? I mean that's a massive increase if I compare with the other years. I was under the impression that post-COVID, we were going more -- or that MAG intensive concessions were not so much of a topic anymore.

Yes, absolutely. So look, overall, especially after COVID, the MAG intensity has decreased. Nevertheless, there are contracts which have a minimum annual guarantee. And whenever you renew them or when you enter into a new one, which have a minimum annual guarantee, you would be -- you would see it reflected there. So what I can tell you is that this is not a one specific concession. The last big one we have done, which has a significant MAG is Spain, but that was before 2025. So in 2025, the number of concessions we have renewed and which have a relevant MAG are minimal, but the sum together will have led to that specific amount.

Okay. And then the third and final one, I appreciate that it looks like you guys can do it all and at the same time. But again, why another share buyback? Why not deleverage faster? I mean you're at 2x, which is the high end of your guidance. Why not wait until you're at 1.5x and then you do truly recurring share buybacks at even higher amounts and then you can return even more cash to shareholders?

Look, I think the right way to answer that is consistency. So we have announced something. That is the capital allocation policy that Yves explained earlier on and we are strict following it. So you have no surprises. We said that after the investment in the business and with a leverage of 1.5x to 2x as a target, the excess cash will go to shareholders and that's what we're doing. If you ask 10 people, there are 10 opinions, but we announced something 3 years ago and we are delivering on that year-on-year.

I think the good thing is that the business still brings a lot of opportunities organically and potentially a small M&As, always accretive, always financed with the balance sheet. But if you don't have an M&A, there is enough cash for a share buyback. And that's consistency. That's the main reason why we do the things.

Gian-Marco Werro, Zürcher Kantonalbank. Two questions from my side. The first one is on the historic win of your duty-free contract in China, one of the first since a decade, as you mentioned. And I was just wondering if you could elaborate a little bit more about what have -- might have changed there in relation to the protectionism of the local airports and authorities down there? And do you now also see more opportunities to expand your duty-free business in China?

And the second one also on Asia. Just 2 years ago, you mentioned that you're entering more and more duty paid, especially in Wuhan, experimenting with this new category in Asia. What are your learnings so far and your experiences? And do you also plan to expand duty paid more in China?

Thank you for your questions. The duty free in Pudong Airport in Shanghai, it's something we feel particularly happy about. It's something the industry has been waiting for 20 years, and everybody was thinking when it would happen, it will be announced years in advance and step-by-step and actually was announced days in advance. So the tender came up on a Tuesday. We knew it on Sunday, and you had to present the offer in 3 weeks and open the first stores 2 weeks later. So really crazy. We had a very strong local team that we've been building over the last few years with very strong local leadership in the different parts of Asia, and they were ready for this tender. It's a clear change in policy. And that means the government in China wants to explore international players operating duty-free.

And one reason behind is because they are betting for inbound tourism in China. You have seen that in a massive relaxation of the Visa requirements to visit China. And this is part of a broader policy. They're going to be looking at what we do and how well we do it, and there might be more opportunities.

But I think the consistency of what we said when -- I remember in '22, when I said we are going to go more to Asia, but it will take years, not months, and it's what is happening. We've been increasing. China is a very big -- duty-free in China is a very big example, but we also enter Japan, and we continue exploring that. We need more critical mass in Asia, but it's year-on-year. There might be a new tender in 6 months, but it could be a new tender in 3 years. We're going to be ready, and we are going to be learning.

The duty paid and the F&B that we operate not only in China, but across Asia. So in most of the locations in Asia, we are trying to do the 3 businesses, at least 2 of them. So the strategy in China and in Asia is to grow on the 3 businesses as long as we can get the right contracts and the right return on investment. You learn from all of it. You learn different things. If you do duty paid and F&B, you learn the behavior of the domestic passenger. And let's remember, China is a huge market on domestic also. 80 -- almost 90% of our business in North America is domestic. I'm not saying we can do that in China in 3 or 4 or 5 years, but the opportunity is very big. But also India domestic, it's a huge opportunity. Other countries like Indonesia, Vietnam that are huge, massive distance, there is also a big potential. But some of them could be developing in the next 3, 5 years, some of them in the next 5 or 10 years.

We are selecting where to go. We are ready to go. But Asia Pacific, has been growing significantly in the portfolio. And also, we are convinced that the bigger it becomes, the more critical mass, also the profitability, which is the lowest today, it will keep improving because in order to do all the things I'm saying, we need an infrastructure that requires certain critical mass. So Asia will keep growing in the next 3 to 5 years, both in sales and profitability.

Manuel Lang from Vontobel. I have 2 questions, more on the top line. Maybe to start with Q4 first. We saw there an acceleration in the U.S. and also in APAC. I'm wondering if you could quantify maybe just in those 2 regions what -- or was it driven by more spend per packs or more by number of passengers? And then also into 2026, you also said there you saw some encouraging trends in the U.S. or in North America, to be specific. What you didn't mention is what regions you've seen a deceleration given the year-to-date growth you reported was lower than a year ago, which I think was at 6%.

So it was both -- to answer your first question on quarter 4, it was both a bit of passengers and a bit of spend per passenger. So we want to be very mindful on any short-term guidance because it's always dangerous. It's much better in our business to have an outlook or a guidance for a year, 2 years, more than a month or a week because if I look at yesterday's sales doesn't necessarily mean this week sales or next month sales and also because of seasonality. But in general, starting the last quarter of '25, we have seen encouraging signs on the consumption trends in the U.S. Now it's a spring break, which is the first indication. And I always say that our first quarter actually is 4 months because they are the Easter, Ramadan and New Year's, all these things moving across the different months of January, February, March, April. But leaving aside Middle East, we have seen a nice traction.

We have not seen this acceleration that will be used, I think, of a wrong number. But yes, we see better performance in quarter 1 in North America versus last year. And EMEA, which is also growing very nicely, but it's not growing at 10% or 12% that grew in the first quarter that, that was an exceptional beginning. So all the regions are growing nicely, all on a more normalized manner with the exception, of course, of Middle East that I explained.

Look, the strength of Avolta is in the overall performance. And I'm happy to explain the individual ones. But what makes us strong is that a low performance in one place is compensated by a strong performance and also across the year. I think I already said, quarter 3, for example, is becoming in certain parts of the world, particularly in holiday places more difficult to grow. But part of that movement on quarter 3 is moving for the last couple of years in quarter 4. So that is also helpful that the passengers are also somehow decreasing a little bit the seasonality.

Maybe if I can add a third one, probably to Yves more. You guide for a much higher FX impact this year and also probably a lower contribution from savings in other OpEx. Is it reasonable to assume that the EBITDA margin increase will likely be a bit on the lower end of your guidance, so a bit below 30 bps compared to last year?

No, look, we -- first of all, the guidance we provide is a medium-term guidance. It's not for a specific year and also not for a specific quarter. But look, having said that, 2026 from our perspective should not be in any regard different than any other year. So from that perspective, we do expect to see a nice improvement in that regard.

Having said that, look, the FX effect this year from a translation perspective should be similar to last year. I mean we have provided the guidance in -- an estimate, it's probably the better word in our press release and it's around 5% for this year. And look, that is similar than what we have seen last year. And if you take that and you extrapolate it, probably the effect we see in the first quarter this year is even more pronounced than the rest of the year. I believe that should answer the question.

If there aren't any more questions -- we've got another question.

Marti Queral from UBS. I would ask 2 questions, please. The first one would be on interest costs. I mean given the leveraging of the balance sheet now already below 2x, how shall we think about interest costs for 2026? Is this something that should help -- that should the triple EPS growth for 2026?

And my second question would be, if I look on Slide #8, spend per passenger has increased over the last 3 years, but I see that APAC has been weakening in the last 2 years. So is there any specific reason for this?

If you take the interest?

Yes. So let me start with the first one with the interest. So look, there are 2 effects I want to quickly mention. The first one is with the deleveraging, obviously, that should lead to a reduction of the interest expenses. But as we have discussed before, we are focusing very much also on cash returns to shareholders. We have the dividends, and we have also the share buyback. And as a consequence, what is remaining for deleveraging is still relevant, but slightly less than the full amount of the equity free cash flow as a consequence of those cash returns to shareholders. So yes, as a consequence, interest expense should decrease moderately over time.

The second element I want to quickly mention is the refinancing. So there will be maturities coming up for refinancing in the next coming years, one, which is in March next year. And we will need to look into the market conditions at that moment in time. And if they are in line with the products we are refinancing or lower or higher, and that also drives to a certain extent, the interest expenses going forward.

Again, I think what helps us is this maturity profile, which is spread significantly over the years and also the fixed component of interest we have in place, which helps us to mitigate short-term volatility in the interest rates to the extent possible.

And on the spend per passenger is a combination of 2 things, a bit of mix because we don't have the same spend per passenger across the different subregions in Asia Pacific. Some works in the Australian activities and still a volatile consumption of the Chinese, which have been increasing as a percentage of our total exposure in Asia Pacific. But I'm convinced that with some of the things we expect for '26, the trend should go better in the coming couple of years.

Okay. So no questions from the floor. We'll go on to questions from the phone. I believe it's 6 at the moment.

[Operator Instructions] The first question comes from the line of Dhar, Manjari from RBC.

It's Manjari Dhar from RBC. I just have 2 questions, if I may. The first question I had was on dynamic pricing. I think you mentioned you've been trialing this in 2025. I just wondered if you could give some more color on the kind of uplift and benefit you see or you have seen where you have implemented this? And maybe some more color on how far it will be rolled out in 2026?

And then my second question is just on working capital and to efficiency that I think you mentioned, Yves. I just wondered if you could let us know what's driven that inventory to improve? And should we expect further efficiencies to come in the coming years?

Thank you for your questions. On dynamic pricing, it's a fascinating area of development. The principle is super easy. You have different profile of customers, different nationalities. They look at pricing as a reference to their local market or maybe their origin or their destination. And therefore, they have different perception of pricing. If you can adapt that to the different seasonal populations to the different flights, even on different weekdays, of course, you are maximizing the possibilities to have a more attractive sale and your gross profit margin. The question has always been that you need a very advanced data management tools to do that in an efficient way. You cannot have somebody with an Excel file looking at all reference prices and changing the prices on a constant basis.

We have then done a test in Europe. It worked very well. It shows that when you adapt the pricing to the potential customers you have around, you can do that in a very efficient manner. You, of course, need to have the -- it's not only the capacity to analyze and change the prices, you also have to have, for example, screens instead of fixed pricing. So it's a bunch of things. So that's why the deployment will be step by step. We have chosen after the test a few locations in Europe where we will implement that. And if we prove that is successful, not the concept because the concept we know it will be successful. If it's successful, our capacity to implement that in a smart and fast way, we will keep deploying that in the next couple of years to all the group.

And I think your second question on working capital is for you?

Yes. Thank you very much for the question. I mean look, the net working capital, there was a kind of a step-up this year in 2025 because of system evolution, standardization, simplification of processes. So from that sense, it's a step-up. Now from here, the way I look at it is more kind of like an evolution over time. So look, we are obviously trying and that applies to all the lines of the P&L and the cash flow to optimize them, to continuously improve them and we see some further improvement also on the net working capital, but maybe not necessarily as pronounced as a step-up in one go.

But look, having said that, maybe an additional piece of information for 2025, what for me is impressive about the result of an improvement of CHF 60 million. It's not only the amount, but that we have achieved that during a time where food & beverage was muted, which typically has a relatively low net working capital and where travel retail, specifically also duty-free was growing materially. And typically, when you grow in duty-free, you have to invest into net working capital. So you would actually have expected a slightly negative amount for 2025. And that did not happen. So we have improved the net working capital in such an environment. So it's even more relevant this step, which did happen in 2025.

The next question comes from the line of Harry Gowers from JPMorgan.

First question from me. Maybe just some color on what we should be modeling for kind of the direct Middle East impact. So maybe what percentage of sales is based in the Middle East directly? And then for Q2, should we be assuming that, that component is down significantly, and we need to shave a little bit off of our organic growth estimates?

And then the second question, I just wanted to ask on the rationality of the global travel retail market at the moment. We're a few years after the pandemic. So how do you see general competition for tenders in the bidding environment at the moment? And do you think operators are more rational when bidding and winning space compared to before COVID?

The line was not perfect. So I'm going to answer what I understood. If it's not, please let us know. So as we said, the Middle East represents around 3%. So if the conflict, to give an example, will last for 4 months, you will have 1% effect. If that would be all the airports shut down, which is not even the case today, we have some operations fully shut down, others partially operating and others even at 70%, 80% of the normal is nothing in the Emirates, but it's nearby. So we believe, as I said, even if it lasts for a few months, not weeks, months, it will be of a limited effect.

On the second question, if I understood well, if operators are more rational on bidding, I see 3 things. Number one, the answer is absolutely yes. You can see that people don't go everywhere. So even on the number of bidders has decreased a little bit. Second, the rationality of the bidders is higher. We are also massively strict. We can make a mistake, but we are massively strict on returns on investment and we are not -- sometimes not bidding ourselves, not renewing contracts or even exiting existing contracts. The return on investment is everything for us.

And then the combination of more rational operators and a lot of industry talk, not everywhere, but we see more and more airports also having a more rational structure of fees. I think the win-win that has been the mantra of this industry for many, many years, but it was a little bit distorted in the years before COVID because of the bonanza of the Chinese passengers. I think that time is a little bit gone and people is more rational, both in the airports and the operators.

What I can guarantee you because that we control, we are extremely systematic and we have renewed contracts in the last couple of years where we have decreased the payments to the airports. Not everywhere, of course. Otherwise, it will be great news. But it's just an example. There are a few limited examples. But when you put the right business plan on the table, the right improvement on the sales, you can have even better conditions. I don't want to be misleading here. Still, there are certain areas where the concession fees are maybe too low structurally, and there will be some pressure. But overall, there will be a limited pressure and a pressure we expect to be lower than the gross profit margin and the cost improvements that Yves was mentioning before. So overall, we feel comfortable with the outlook on the midterm on the EBITDA margin.

The next question comes from the line of Jaafar Mestari from BNP Paribas.

I have 3 questions, if that's okay. Maybe the first one, separately, just following up on Middle East situation. Can you give us a bit more -- I'm sure trading is way too early. But on the reality of the business operations in the region, you said some shops are operating 70% of normal. Are you fully open, fully staffed? Are airports starting to talk about plans, opening times, staffing? Or is the situation for the foreseeable future just operate as close to normal as possible?

And the other side of the equation, your landlord and your suppliers in global airports. It's very early days, but what's been the chatter so far? What are they telling you in terms of passenger flows? What are they telling you in terms of assortments in your operations outside of strictly the region, please?

So the situation depends very much on each territory. There are some locations where the aerospace is completely shut down, and therefore, there is no body of our employees at the airport. Some others are operating, if not normally close to normality. And then we have the staff. And in other places, it's partially. Now is the moment to be supportive to the airports, to the employees. Even if it's limited passengers, those passengers might spend actually more time than usual in the airport. They need to be serviced. And we have a very strong commitment to our airport partners. And there will be time to talk about the potential financial consequences of that.

Now is operate when we need to operate on a safe manner, both for our employees and the passengers. And as I said, the situation changes completely airport by airport, and we follow the guidance. So we agree with the airports what are the needs of that specific location.

If you have food & beverage in some areas, we have more work than in other places because you might have an airport with 3 terminals, 2 closed, only 1 open and we have more people on that terminal than usual. It's a very different situation. It has been 9 days. It's really, really very short and we believe it will be normalized once the conflict itself is stopped, the normalization based on our experience happens very, very fast.

Globally, of course, the effects are in destination, Middle East, I mean, from other places on the world. But with the 3%, we are kind of including also that rational destination Middle East, not transfer Middle East because transfer Middle East is moving to other places.

So far, we had no major impacts on assortment, suppliers, et cetera. We have alternative logistic routes to supply our shops without going through the Middle East -- shops and restaurants, sorry. I mean the food is basically locally supplied and also the convenience. So it's only the duty-free. But the -- compared to other industries, the channels in Middle East are not as important for our industry like in other places. So until now, the effect beyond the Middle East is extremely limited.

Great. And my other questions are on capture rates, 27% looks broadly flat. I know the numbers in terms of passengers and transactions can be a bit rounded. Maybe it's increased a decimal, but it's 27%. So it looks like you're doing very well to drive spend with the people who already stop and shop. I'm not sure you're satisfied with flat capture rate on the other hand for people who do not stop. What are the plans specifically for that, if any?

And a question, net new contracts continue to tick up. It was net 2% in Q3. It's net 2.5% in Q4. Your medium-term guidance for net new space is 0% to 1%. So at which point do you start to articulate maybe that you can sustainably win new space and grow more in new contracts, please?

On your first question, of course, you need to correct one aspect, which is the U.S. or the North America. I mean if you correct that effect, you can see that conversion of penetration has been growing in the other 3 regions, but also the spend per ticket. Of course, there are thousands of mix effects. We look at this on a location by location and taking into consideration the profile of the customers. But we are doing to drive both -- I think I gave an example. I mean when you put entertainment, sports-related entertainment, when you put the combination of food, when you use the loyalty, when you use more digital promotions on the store, when you put new brands and new categories, all of those things we do is not to have fancier shops or fancier restaurants. We do it to drive more people into the stores and to increase the spend per ticket.

For me, when I have the follow-up meetings with all the regions and all the operations, spend per passenger, spend per ticket and penetration are the 3 things we discuss. And if there is a mix effect, for example, a different mix of nationalities, different mix of long haul, short haul flights, whatever is the relevant point, we explain it, but that's the target.

So I think the last 4 years have been good. Maybe I didn't say it, but the performance of the last 4 years, including '25, I think, has been good, but not by chance. It's not a miracle. It's not that it just happens. It is happening. And if you see some industry gurus, they didn't expect what is happening in Avolta to happen. And it's happening because of all the things we are doing to implement Destination 2027 and our consumer focus, more data, more digital, more entertainment, more hybrid. All those are the things that are driving more people on the stores and they are driving them to spend more.

But what we have achieved today is not worth -- it's not enough. We need to do more in '26, more in '27, more in '28. That's why we keep investing in trying to improve the understanding of passengers. Data and the use of data with machine learning, AI, call it the way you want it, it is going to be in the next 3 to 5 years, a game changer for Avolta. But we need to keep investing in data. We need to keep investing in a better understanding of the passengers. I cannot disclose everything first because I don't want competition to know. And second, because in some cases, we don't know if it's going to work or not. But we are addressing every aspect of our business to see how we can optimize it from product to assortment, to pricing, to customer understanding to loyalty.

Of course, we don't do everything at the same time. We test the different things and then we focus. And that's why when people say, why you keep reiterating the outlook with all what is happening in the world? Well, of course, we don't know everything is going to happen in the world, but we believe that we are touching the right things to keep performance. So answering your question, sorry, what we need to do is more and better what we are already doing. Sorry, I get passionate about that. And the...

Just on net new...

Yes. Look, you need to look at net wins and losses, which are 2 type of losses, voluntary losses or exiting of unprofitable or below profitability contracts and wish. The net, we want to be positive. And that's a 0% to 1%. There could be some years more, some years less. Because it's impossible to have that as an outlook per year because that's not the way the market works. Sometimes you have 1,000 contracts in a year, another year, you might have 200. Sometimes you might be massively the incumbent on that year and some other times, you might be the big winner. So it depends. So that's why the outlook we provide is for organic growth that is a combination of like plus new wins and losses. And we don't feel comfortable at this stage to change the way we've been guiding. Some years will be better, some years will be a little bit less. But overall, the organic growth should be this 5% to 7%.

The next question comes from the line of Isacco Brambilla from Mediobanca.

I have 2. The first one is on equity free cash flow conversion, 2025. So again, more than 300 basis point improvement. Second year in a row of a sharp overperformance compared to the medium-term guidance. Beyond such extremely strong results, can you give us more color on the levers you see to deliver further announcement from this level?

Second question is a follow-up on net new openings. If we look at the second half of 2025, it contributed almost as much as like-for-like to your organic growth. Looking forward to 2026, should we think about this pattern to continue? Or maybe are you expecting to rely more on like-for-like growth?

So let me start maybe with the equity free cash flow first. Thank you very much for the question. So look, the levers are coming across the grade. We have discussed before net working capital. While I do not expect some similar step-ups as we have seen this year to happen, but still some improvements going forward. It's one potential source of improvements going forward.

The second one is also what we have discussed is the deleveraging. So look, with the deleveraging and the tight management of interest expense and also interest income on the cash deposits, we do expect to see some improvements over time there. And then, look, to a maybe lesser extent, but the remaining lines, be it on the tax line or also dividend to minorities, there should be some potential improvement possibility.

CapEx, I don't want to touch. I think we feel comfortable where it stands at the moment. But then what also happens on top of the different elements of the cash flow statement, it's a pure technical one. Because of the improvement of the profitability, because of the improvement of the EBITDA margin, if you then calculate the equity free cash flow as a percentage of turnover, you should improve over time also the conversion rate there. So those are basically the levers we have to optimize the equity free cash flow.

Look, on the new concessions like-for-like, again, it depends a little bit how you consider North America. The like-for-like is this 3%, 4% or 5% to 6%. So like-for-like is clearly higher than new concessions. And again, new concessions and like-for-like have to be combined and look at it not in a quarter, not in 2 quarters, but in a longer period of time. We are very happy to have a strong like-for-like, and we are happy to have new concessions.

But you see another idea of new concessions, which is fundamental for me. I don't want to give guidance or a specific outlook there for 2 reasons. One, because it's more volatile than the like-for-like. But second, because it's a trap. If you push yourself to have new concession because you guided the market to have new concessions, you might lose discipline. And I want to be absolutely free. Of course, I want to win new concessions, but only if they come with the right return on investment and the right profitability. And if 1 year is zero, it's because that year, the opportunities were not fitting our strategy. So I think keeping this freedom of being absolutely disciplined on the new bids, it's very important. So when you have new concessions net positive, be assured that is not only good news on the sales, but it should be also good news on the profitability. And I think that is the key message we want to give.

The next question comes from the line of Luka Trnovsek from Berenberg.

So just congratulations on the results. And then just on the first one, I wanted to ask about the equity free cash flow conversion. So you've mentioned that you've reiterated the guidance, so 100 to 150 basis point improvement per year between '24 and '27. And given the improvement you delivered this year, do you still think you can do 100 basis points this year? And I'll ask one more after that.

So look, the question -- the answer to the first question is yes. I mean we have basically shown that we are in a position to do that over the last couple of years, significantly beyond that. But also for this year, we -- and we don't give guidance for one specific year. We know that it's a medium-term guidance, et cetera. But still also for this year, there is no sign or no indication why we should not achieve that. So we also believe that an improvement of 100 to 150 basis points on the equity free cash flow is achievable due to the reasons I've mentioned before.

Perfect. And then just on the size of the buyback. So it looks like it's about 46% to 47% of free cash flow in both '24 and '25. So just thinking forward, like in the absence of any big M&A or anything like that, would you be comfortable staying at that level if we think out to maybe '26? Or is it just too early to say?

I think, look -- thank you for the question. But we stick strictly to the capital allocation policy that is very clear, growth, deleverage and excess cash to dividends guaranteed 1/3 of the cash flow and potential share buybacks when there is excess cash. No more, no less than that. This is a discussion management and Board of Directors have on a yearly basis, looking at the opportunities, the growth and I think that's the best way I can answer your question.

Perfect. And then just one last one. So I know you've spoken about this kind of net new space and the contribution. But specifically just for 2026, given that you have this in China, do you think it'd be fair to say that you'd be over that 1%, just if you assume that the China was kind of like maybe not expected when you were setting the guidance? So now that you've kind of won that on a normalized basis, there should still be some more concession wins?

Look, we have to consider the wins that we already have. We have to consider some exits that we have executed in '25 with FX in '26. And I think as Yves keeps saying, we don't give -- because you see you start giving guidance for 5 years, then 3 years, then a year, then a quarter than a week. So I think our guidance is clear. Our guidance is on a multiyear midterm. Things are going on the right direction on all the key indicators, of course, with the exception of the conflict in the Middle East. And we feel comfortable on keeping the same outlook we have been saying over the last few years. And we will not go in more details on a specific year because that's too much information.

The next question comes from the line of Elias, Karine from Barclays.

I just had a quick one on your maturity profile. Obviously, you've been very proactive at addressing your upcoming maturities and with the recent bonds issued in May, you used to take out the rest of the '26, the convertible coming up. How should we think about your 2027 maturity? Are you planning to come back to the market? Or any particular thoughts with regards to currency or convert or share?

Thank you very much for the question. So look, yes, absolutely. We do expect to come back to the market in the next couple of months and quarters. We typically refinance ahead of maturity, significant ahead of maturity. But given the high liquidity of the company regarding to cash and available credit lines, specifically the RCF, which matures in 2030, we do believe that we have no rush. So we'll wait for the right market window.

In regard to the product, we have not taken a final decision there. We are debating that in management with the Board and also with treasury. There are a couple of different options, maybe also to slice and dice it, and we will take actions in due course once we are ready and once the market window is the right one.

The next question is from the line of Jörn Iffert from UBS.

Yes, it's just 2, please. And the first one is, I mean, what have you incrementally observed on consumer trends over the last 12 to 18 months? And what does it mean for you going forward?

And the second question, please, inflation in your food & beverage business, I assume was quite material over the last 2 to 3 years. And can you give more data, what you have observed on volumes on average over the last 2 to 3 years here?

Thank you for your question. It's not an easy question to answer because there are so many data points that depends on categories, regions, et cetera. Maybe the best way I can answer that is to refer to Page 8, I think it was, where you can see that there has been an overall slowdown on alcohol consumption over the last few years. We're still less affected than higher street because we have special formats, a special -- it's many of the purchases in this category is because of gifting and that is less sensitive than maybe the general trend.

We have, in some cases, been affected, for example, also on the luxury performance, that is, we are not immune to the general performance. On the flip side, perfumes, cosmetics, in general, treatment, skin care, it's a very healthy category. And also a lot of the consumption in travel retail is based on as gifting on self-care. So this category is very strong across the board. So those would be a few examples. Of course, if you go forward on a regional basis, I think we had a very strong performance across the board with the exception of North America, which is linked mostly to the domestic traffic. And we know the number of domestic passengers in U.S., in particular, North America, in general, have been flat accelerating a little bit at the end of the year.

On the food & beverage and also in retail, in general, we try -- and I think you have seen that both in high inflation, mid inflation and low inflation that we've been able to pass through most of the inflation effects on the pricing, both in retail and food & beverage. And that's why the gross profit margin has been stable and growing over the last few years. Of course, that depends on the different countries. That depends on the -- if you go on the food & beverage to the supply of products, but something we do very actively. Sometimes people want a sandwich, let's put. And they don't necessarily want the sandwich to be salmon sandwich. So if you have a salmon -- and now I don't want to get into trouble with any of our salmon suppliers, it's just an example. It increases, then you prepare a sandwich where you replace the salmon for another fish or turkey. So you can play a lot with the recipes to adapt the assortment to reflect in a smaller amount, the potential inflationary effects. But in general, we are pretty hedged, and I think we've been proving that over the last few years on inflation.

It was also about elasticities since the prices increased materially for food & beverage in general. In your channels, what have you observed on volumes? Did your volumes grow in the last 2 years on average in food & beverage? Or was mainly price driven, what you have seen there?

With few exceptions, volumes have been growing.

The next question comes from the line of Tim Barrett from Deutsche Bank.

First question just follows up from one of the last ones actually around category spend per pax. You didn't mention tobacco, but that's obviously been in compounding growth now. Do you expect that to continue? And does that have any implication for gross margin?

And second question. Yves was very clear about ROCE and the trends there. Is that mainly going to improve through margin in your view? Or are you reducing capital base intensity?

What we see in the tobacco category, which is more and more nicotine-related market because what is really growing very fast are non-cigarettes, soup categories, and that's also a general trend in the market. And some of those categories are very convenient for smokers and fly. I mean if you don't -- if you have nicotine chewing gum kind of you're something very comfortable and you don't disturb other passengers.

On the gross profit margin, with the, of course, difference between food and retail. On retail, when you take gross profit margin, minus concession fee, which is typically per category, all categories are very similar. That's why these changes in the categories have no major effects on the gross profit margin. They might have some in certain markets, but we are on net-net, on EBITDA effect very limited. And the second question, I didn't understand.

The second one is on ROIC. The improvement of ROIC is it coming from the improvement of the NOPATs or of invested capital? And look, it's basically from the margin. A big part is coming from the margin around 70% to 75%. Year-on-year improvement, 24% to 25% is coming from the NOPAT improvement and to a lesser extent, from the reduction in invested capital.

The last question from the phone is from Natasha Bonnet from Morgan Stanley.

I've got 2 quick ones. Just coming back to the Middle East, you said it was 3% of your sales. But what is your exposure to Middle Eastern national globally? Because I tend to believe they have a higher average spend. And then maybe if you could give us an update on the Chinese nationals now in your mix?

And then the second just on U.S. You said you were seeing some encouraging signs year-to-date in North America. Are you seeing any differences by income cohorts? And can you share any color on trends of U.S. customers coming to Europe?

So the 3% is what we believe it's our exposure to the Middle East, not just on the presence on the Middle East. In the Middle East, you have 2 type, high-end expenditure but also the lowest-end expenditure. The people that works in the Middle East that go back to China -- sorry, to India, Bangladesh, Pakistan, et cetera, they have, on average, a much lower average. I don't -- it's a very limited exposure. I'm more and more reluctant because we have more data than anybody else to start explaining nationality exposures, but it's still low single digit, our exposure to Chinese nationals. And the last question was on North America?

North America and the increase and the trends when people are coming to Europe, for example, Americans.

International flight, it's always -- the consumption for international flights is always more resilient than potentially domestic because when people takes a long-haul flight, both on the cost of that flight and the duration of that trip because somebody could be going, I don't know, New York, Boston 3 times in a week. But if you're planning a long haul, it's a different type of mindset. And typically, the consumption at the airport is more resilient for international travelers.

If you buy because you are going back home and you bring a gift, you still bring a gift. If you are on holidays with your family, friends, your mindset is a different one. If you are traveling long haul for business, typically, you take something back home because you've been a week abroad.

So what we typically see is that the spend per passenger in international travelers is less affected to macroeconomics than domestic. And that's what we saw in '25 in North America that was basically negatively affected the domestic much less the international travel.

Okay. So we finished with the questions from the phone. We've got 3 core questions from the webcast. I'll ask them individually. The first question is, under what circumstances would you increase the share buyback at the expense of the dividend?

That's an infinite question. I mean we have the share buyback we have with the circumstances. So...

It's probably related to the future years or potential future programs. I mean, look, going back to what Xavi mentioned before, the dividend payment, the way it is described in the capital allocation policy is strict. It's 1/3 of equity free cash flow. Equity free cash flow ideally in line with our outlook is increasing over time. And as a consequence, dividend is progressively increasing over time as an absolute amount. It's point number one.

And point number two, in regarding to the share buyback, also Xavi was explicit before, the share buyback is opportunistic in the sense that we first start with investment into growth. We have our leverage targets and achievements in mind. And then once what is left subsequent to the dividend and the progressive dividend payment is going into share buybacks. So depending on where the result lands, that is then the residual amount, which defines the share buyback in a specific year.

Second question, what is your medium-term ROIC target?

So look, in regarding to the ROIC, we are not providing a target. We are not providing a progression over a year or a medium-term outlook. We believe what we want to show there is something else. We want to show our mindset, our strict approach to investments, how we think about that and how that needs to be accretive for shareholders rather than a specific target.

And the final question is, what do you see as a ceiling for your medium-term EBITDA margin and equity free cash conversion?

For now, we stick to the current outlook. And then in a longer term, in due time, we will provide an updated outlook, if needed.

Thank you. So that's the end of the Q&A.

Okay. So thank you very much for everybody attending this call. And remember, if you travel by in Avolta shops or restaurants and become a Club Avolta member, you're going to get a bunch of benefits. Don't miss the opportunity. Thank you very much.

Thank you.

Ladies and gentlemen, welcome to the Avolta Q3 Trading Update Conference Call and Live Webcast. I am Valentina, the Chorus Call operator. [Operator Instructions] The conference is being recorded. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Mr. Xavier Rossinyol, CEO of Avolta. Please go ahead.

Good morning, good afternoon, good evening. Welcome, and thank you for being today in this first 9 months 2025 results for Avolta.

I'll go straight to the presentation to the highlights 9 months. We have reported for the first 9 months of the year a total turnover of CHF 10.6 billion [Audio Gap] growth of 5.4%. Our EBITDA margin has reached 10.2%, an expansion of 30 basis points versus the same period of last year. And with that is now, I think, 16 quarters in a row where our EBITDA margin has expanded year-on-year. Thanks to this expansion and other optimization measures, we have reached our highest ever equity free cash flow, reaching CHF 503 million on the first 9 months. Thanks to that, our leverage has decreased from 2x, reaching 1.9x, well ahead of expectations, particularly impressive taking into consideration that we continue a growing policy of dividend distribution and the share buyback for second year in a row.

October has been a very good month with a 6% organic growth. Quarter 3 is the summer month. The organic growth, as expected for us was a little bit lower than in the previous quarters because particularly in the touristic airports, where the capacity in summer months is super high, it makes more difficult the comparables. But October clearly supports the full year outlook. And we feel very confident on reaching the outlook for the year and for the years to come.

If we move to the next slide, and we go on a regional basis, we see a strong growth in Europe, Middle East and Africa. Probably where the comparables were more challenging is precisely in Europe, particularly in South of Europe, where we have the highest percentage of tourist destinations. And again, a very strong and acceleration of the growth in October that we expect to last for the remaining of the last quarter.

North America that has been flattish for most of the year as a consequence mostly of lower traffic and poor consumer sentiment, it shows a very interesting turning point in October with for first time in the year, a positive growth, and we believe the quarter 4 will also be positive.

LATAM has been very strong the whole year. Argentina, which is one of our main countries in Latin America, it's ahead of historical numbers. But compared to last year, the comparables were particularly difficult in summer, simply because the exchange rate difference between dollar and peso, it made last year an extraordinary year. This effect is disappearing now because, as you know, Argentina shows a stable macroeconomics, but that's another explanation of a slightly weaker summer, but again, a strong start of quarter 4.

APAC remained strong for the entire year, very valuable, particularly because the Chinese consumption has not recovered. But overall, I think the key message is that Avolta is precisely this. Of course, you will have regions or countries that will be weaker or stronger and the same thing on months or quarters. But if you look at Avolta on its entirety and for the full year, we will be delivering in line or ahead of the outlook. Thanks to our geographical diversification and thanks to our business segment diversification. And I think taking into consideration how volatile the wall is, it is quite an achievement.

From a business development point of view, we continue developing all the regions in the last few months with some developments in EMEA, we continue with the expansion of our hybrid concepts. North America, we announced yesterday a very big win in Terminal 8 of JFK. We had already been awarded significant parts of the Food and Beverage and Convenience business in that terminal. And now it was confirmed we have won also the Duty-Free contract in that terminal, which will make together with the other wins we had over the year, JFK as one of our key locations in North America.

In EMEA, apart from extending contracts, we have also exited one contract. And it was a very particular situation where we sold back to the airport, the assets under concession agreement. It is a very particular situation. We do not expect that to be repeated, but that is what explains the movements on the line of M&A. That effect will disappear after '25, and you shouldn't see it anymore.

If we move to the next page, I think it's very important that we continue with our data and digital transformation. Club Avolta has reached another record number of members, reaching already 15 million members. And this is something I keep repeating -- how important today, but particularly in the future will be this better understanding of the customers. This better understanding of the passengers that are not customers, how the loyalty program allows a higher intimacy with those passengers.

This data and digital transformation we've been doing over the last 2 years and that we will continue to do on the years to come will sustain and in some cases, maybe accelerate our capacity to achieve the outlook we've been providing for the mid and long term of the company.

In Club Avolta, we continue expanding the partnerships. Club Avolta is about delivering value to the members. And you can do that better if you have partnership with airlines, with airports, with launch operators. And in some cases, even converting our Club Avolta in a platform that other operators might want to use. And that is a win-win situation for everybody. The passenger wins because they get services, upgrades, a better commercial offering in more places. The partners also win because they benefit, and we definitely win because we do control Club Avolta, and we do have access to that data.

If we move to the next slide. We are consistent. We repeat once more that despite all the volatility in the world, we confirm our outlook for 2025 and for the years to come. And our outlook is a turnover organic growth of 5% to 7% per year. We've been achieving that the last 3 years, an EBITDA margin expansion of between 20 and 40 basis points per year. We have achieved that every single year. And on top of that, an expansion on the equity free cash flow conversion of between 100 and 150 basis points. And as you know, this year, like last year, we are clearly overachieving that target. The combination of a healthy growth in revenues, together with a very strict cost discipline, cost optimization, productivity plans and is much more that can come in the coming years.

And in the next page, again, our confirmation of our capital allocation policy. First target is to invest in the business, new shops, new restaurants, digital transformation, business development, new concessions and potentially selective accretive M&A, always financed with the balance sheet of the company and not with new equity. Second, deleveraging, strict financial discipline in the balance sheet. And I think Yves will expand on that. We are already clearly ahead of initial expectations. And the last commitment to shareholders return. And dividend of 1/3 of the equity free cash flow. And every year, as you can see, equity free cash flow is growing. So dividend will also grow and share buyback when there is enough excess cash. We did one last year, and we are going to finish the one of 2025 as expected with about CHF 200 million invested on that plan.

Now I hand over to Yves.

Thank you very much, Xavier, and good morning and good afternoon to everybody on the line, and thank you very much for joining us today. You see on the slide the KPI of the financial performance for the 9 months of 2025. I will not go into the details here. We have dedicated slides for each element you see on the slide. But let me start here by stating that I'm very pleased with the financial performance of the organization over the last 9 months on all key aspects, be it on the top line, on the turnover, the profitability, but especially the cash flow and last but not least, also the balance sheet with the leverage.

Going one by one, moving to the next slide with the top line performance. The group has generated over the 9 months, CHF 10.4 billion with an organic growth of 5.4% for the 9 months. We have seen some, as was expected, headwinds from an FX point of view. So that obviously impacted the reported growth year-to-date, and we expect that to continue also for the full year. Having said that, we see some very positive momentum into October with an organic growth of 6% periodic in October, specifically also driven by some inflection in North America, which comes with an organic growth for the month of positive 3%, a significant improvement versus the flattish performance we have seen for the first 9 months of this year.

Moving on to the next slide with the profitability and also the cash flow. EBITDA margin has improved by 30 basis points for the first 9 months. And this compares to the 20 to 40 basis points guidance we provide in the medium term, so bang in line in the middle of the outlook we have provided. The third quarter specifically is even slightly better with an improvement of 37 basis points on the quarter versus the same period of last year.

We have decided here, and you will find it on the right-hand side of the slide, also the historical EBITDA margins per quarter year-to-date from 2022 to 2025. And what you can clearly see is the continuous improvement we have executed. Xavier has mentioned it, but to perform in line or even ahead of the outlook and the guidance we have provided back at the initial Capital Markets Day when announcing the new strategy. So for every single quarter from a profitability point of view, we have delivered.

If I turn down to the equity free cash flow, for me, one of the 2 stars of this presentation. The group has generated CHF 503 million of equity free cash flow for the first 9 months of 2025. This is the most highest equity free cash flow the group has ever recorded, and we have achieved that disregarding the headwinds I have mentioned before on the currency. So in absolute terms, a fantastic result for the organization. What I also want to mention here is the seasonality of our equity free cash flow. As you know, the fourth quarter typically is flattish to negative. So considering that, we basically see what we potentially are achieving for the full year in regard to equity free cash flow, also there, a very solid result.

Moving on to the next slide was the treasury overview. For me, the second star. Leverage has decreased to 1.9x. This is significantly lower than what we have done historically in our organization, and it's now in line with the guidance we have provided to 1.5 to 2x as a target range. And we have achieved that despite the fact that we have significantly increased the dividend payment this year and have progressed well on the share buyback program, where we have bought back already by September CHF 130 million of Avolta shares.

The next point is the maturity profile. As you already know, very solid liquidity position. We have extended the maturity profile by extending the maturity on the RCF from original 2029 to now 2030. The conditions remain the same. So there's no change in the margin we pay, but it's again a 5-year maturity.

Now let me quickly summarize before I hand over back to Xavier, how I see the financial results and performance of the organization. For me, the financial performance we have reported in the 9 months is a very strong confirmation that our focus remains crystal clear. We are focusing on generating cash flow to reinvest into the business to strengthen the balance sheet and ultimately, to generate returns for our shareholders. And yes, we, as a management team, we do know that on the top line, there might be some fluctuation week-on-week, month-on-month or quarter-on-quarter. But what at the end really counts is that we translate that solid performance of the organization into strong cash flow. And the first 9 months of this year clearly confirm that. And for me, that what this is all about.

With that, handing over back to Xavier.

Thank you very much. I'm not going to read the slide. I think it's self-explanatory. Just a couple of words, consistency and predictability. As Yves just said, I think you can see quarter-on-quarter for the last 3 years, a very strong performance in the company with volatility like any company in the world, but lower volatility than what you see in the market. So Avolta keeps thanks to our size, thanks to our geographical diversification, thanks to our segment diversification being much more predictable than many or most of the players in our industry or ecosystem.

With that and our commitment on keep delivering on the capital allocation policy, I think we can open for Q&A. Thank you very much for your attention so far.

[Operator Instructions] The first question comes from Manjari Dhar from RBC.

I just had 3 questions, if I may. The first question is on North America. I was just wondering if you could give any color on consumer behavior and spending patterns in the region and whether you've seen any changes accompanying the inflection in trading in October?

My second question is just on Q4. I wondered if you could give us any color on the shape of the comparable from last year and maybe how October last year compared to November and December?

And then my final question is just on Club Avolta. I was just wondering if there are any regions or customer demographics with whom Club Avolta has resonated better and if there are any particular customer demographics where you still see an opportunity?

Thank you very much. The general mood in North America for travelers for most of the year, and I'm focusing now on domestic travel much more than international travel, where the behavior has been more positive along the year. But on domestic consumers, what we have seen is, one, they travel less that we have seen consistently either the same or a slightly negative number of passengers in North America. And along with that, a sluggish, flattish spend per passenger. And as you know, we target a positive spend per passenger.

What we have seen in October is that some of the early indications that the mood on consumptions might be strengthening. You could say too early to call, potentially yes, but it's pretty consistent on the different segments of business and the different airports. And when you see that consistency historically, it continues on that level. So we are cautiously optimistic in North America.

On the shape of comparables on quarter 4, we should be better than in summer because summer, as I said, hopefully clearly, the number of passengers are very close in touristic destinations to the full capacity of the airport. It's as simple as the airports are so crowded that to achieve the type of growth we have had before summer and hopefully, after summer, it's not possible to do it on the peak season. And that is pretty consistent over the years when you analyze touristic airports. So that's why we believe that the comparables in quarter 4 in that sense are easier. And that's why I said we feel very confident with the outlook of the full year.

Yes, Club Avolta works very differently in different places, in different segments and different type of customers. I'm thinking now in my head what should or I should not disclose. But when we identify a segment or a geography where the Club Avolta engagement might be lower, we do specific actions to increase it. There are certain markets, particularly when you have a higher-than-average percentage of frequent flyers where Club Avolta works much better. And I think this is pretty intuitive. If you have a touristic airport where people might go there once in their lifetime, it's more difficult to get them engaged in a loyalty program. But when we have people traveling 3, 4, 5, 6, 10 times from the same airport, it's much more likely that they engage. So when you look at the frequency of passengers, and it's pretty consistent with our capacity to engage on Club Avolta.

Club Avolta, it's a baby. It's amazing when you see the numbers, and it's amazing what we are learning and how that data can help us to improve the business. But the Club Avolta in its current form has been in place only for 12 months. It's way ahead of our expectations. And actually, now we are playing a little bit of a catch-up game, particularly on the data and loyalty program team members where we have to reinforce them to catch up with and to take full advantage of what we are learning.

But look, what is clear to us is that this program and the other data and digital initiatives are clearly supporting the way we do business, and we keep learning a lot. We need to do much better. We need to use the data better. We need to extract more value from the data. We need to use that data in a faster way in our shops and restaurants, but it's a learning process. And every month, we do it a little bit better. And it's just the beginning. But over the next 2, 3 years, I'm convinced that this transformation could be absolutely essential on our financial performance to come.

The next question comes from Harry Gowers from JPMorgan.

Two questions, if I can. I mean, Xavier, you touched on a little bit at the start. There was this minus 1% M&A and other line in the revenue bridge for Q3. So maybe you could split out just in terms of what's actual M&A in there in terms of the impact from the APAC acquisition at the end of last year versus what's like restructurings or selective exits? And then what should we be modeling for that line on Q4?

And then the second question, and you've just done over CHF 500 million equity free cash flow for the first 9 months of the year. I think consensus is at about CHF 460 million in terms of the latest number for the full year. And last year, in Q4, if the numbers I'm looking at are correct, it was about a CHF 20 million free cash flow outflow. So should we expect a similar kind of outflow number in Q4 this year and then the consensus cash numbers, therefore, need to come up a little bit for the full year?

Thank you. So the concession we sold was in a touristic destination. So it's super cyclical. It's probably one of the most cyclical -- sorry, seasonal operation we had. So the major effect, of course, was in summer. It will be slightly negative maybe in the last quarter, but then it's fading away. And then M&A should not be anymore a factor unless we do something else. If you remember, we did the one in Asia at the beginning of the year. So by the end of this year, it will also disappear. So you could have a slightly negative in quarter 4, practically nothing in quarter 1 next year and then this factor or this element is eliminated.

For the second question, I'm going to give it back to Yves because if I answer, I might then -- the team might accuse me of being overoptimistic.

So look, on the equity free cash flow for the full year, you're absolutely spot on. I mean we have generated CHF 503 million in the 9 months 2025. Now Q4, as you have mentioned rightly, so it's typically flattish to slightly negative. Consensus, if I'm not mistaken, is at CHF 480 million. So look, probably CHF 460 million. So probably somewhere between -- well, the CHF 460 million and what we have reported for the 9 months is probably a good approximation. Maybe a little bit on the upper end.

So maybe a slightly different way to answer is that we do not expect anything particularly exceptional in the last quarter. And I think with that alone, you can make your own estimation.

The next question comes from Jorn Iffert from UBS.

Would be 3 just really quick ones. Just to double-click on the statement you just made on the discontinued operations, which you have put in the M&A line. I totally understand this. Just to double check, is this something where you say, look, we will have more portfolio cleanups in '26, '27? Or is it really done now that we should not see any discontinued operations from concessions anymore in '26 and '27. This is the first question. If I would take them one by one, if it's okay.

No, look, to be clear, we always do some portfolio cleanup. Typically, that goes into change of scope. This was very particularly because from a legal point of view, we sold. We didn't stop or we didn't close the operation or we didn't just let the contract to expire. We actually reached an agreement with the airport to discontinue the operation on a sale of assets and concessions. And because of that, we have to classify it as M&A.

Any other discontinuation, which materially it shouldn't be very material, but you cannot disregard we will clean up operations because sometimes you still need to do that because structural changes on the markets, et cetera. But they will go in change of scope, and we still believe change of scope, new wins, potential closes or losses, the overall should be a net positive effect. So we expect that on top of the like-for-like, we do have some positive change of scope. And in M&A, we do not expect you to see more sales going forward or I mean, you can never say never, but it should not be something that is repeated on a regular basis.

And second question, please. When we look on retail trends going to 2026, here and there and depending on the category, in particular in Food and Beverage, it could become more deflationary. And the question is, what is roughly the pricing contribution, not the check per passenger, but the pricing contribution versus the volume contribution, the organic growth in 2025? And how do you expect the split to develop in 2026?

For '26, it's too early for me to disclose that. We are doing now the budget, and we will be defining some of the key elements of that in the next 2 months.

If we look at what we expect for 2025, what we have seen is basically you could take the organic growth, 1/3 approximately in our portfolio comes from -- sorry, 2/3 come from passengers, 1/3 comes from spend per passenger. And of that, I would say that half is pricing and half is volume.

I should now make a 300 pages disclaimer because that depends on the different locations. It's not the same thing Duty-Free than duty-paid or F&B. It's not the same North America than Europe, et cetera, et cetera. But as a rule of thumb for whatever that is worth, if you look at our portfolio 2025, more or less, the big picture should be what I just described with many exceptions, some up above that, some below that.

And the last question is, please on the very interesting turnaround in North America in October of the plus 3%. When you zoom in North America, where in particular do you see the incremental sales growth coming from? Is it from Food and Beverage? Is it from [indiscernible] you have more duty-paid? Is it more on the high end of the consumer segment? Is it more on the lower end? If you have some more color, it would be appreciated.

Smart question. Look, -- if you look at the entire behavior year-to-date, you can see that in general, across the U.S., you see, number one, a stronger Duty-Free, international travel, higher item price or value. And therefore, we have consistently seen that the people with more disposable income have been more resilient on their consumption pattern. We have seen a specific slowdown in the lower end of the available income. And then when you zoom in both in F&B and Convenience, you see that there is a trend to focus more on more affordable products.

What we see in October, and as I said, it's a good indication because it's pretty consistent across the 2 main segments in domestic Convenience and Food and Beverage and also mostly across the country is that there might be a little bit of more inclination to upgrade a little bit the consumption. So it feels there is a slightly better mood on the American consumer across the board. We monitor that very -- in a very, very detailed manner, of course, because to manage that, that -- some of the things I said could have implications on the pricing policy, could have implications on the assortment, et cetera. So we always try to maximize.

And then, of course, there is the specific geographies. It's been very clear during the year that there has been less conventions during the year. And that means less travelers moving from one place to the other. So the airports reflect also the general status of the economy. But overall, I think October underlying trends are mostly across the different segments.

And I apologize, just one last question, if I may, on the equity free cash flow, which was a clear positive, of course, in the 9 months, a strong result. Just to double check something going into 2026. I mean, I know you have confirmed your guidance. Cash conversion will further improve. So really just to double check, it's an absolutely clear number, no one-offs. Nothing where you can say next year, okay, look, I mean, we had this and this special positive in '25. So it's really and bracket the progress you are seeing down the road in '26 should show further improvements. Just double check this.

Yes, absolutely. This is fully correct. There is nothing specific or extraordinary in the 9 months 2025 equity free cash flow.

The next question comes from Jon Cox from Kepler.

I have a couple of sort of sets of questions. Maybe I'll start with -- on the cash side of the situation, which was excellent print from you guys, I think, beating consensus by about 15% on that free cash flow line in Q3. In the first 9 months of the year, your conversion ratio is about 310 basis points higher than it was in the first 9 months of the year. So clearly, you're going to be well above your guidance of 100 to 150 basis points increase in conversion annually. I wonder if you can just confirm that. I think it's pretty obvious.

But the second part of the question is, can you still maintain this sort of 100 to 150 basis points improvement next year given the fact that you have obviously doubled -- done much better than you expected in this year?

And then the final part of that question is, if we look at -- you have a buyback, which expires at the end of the year, given the free cash flow happening, given what's going to happen to your leverage, I see it's pretty easy to model another buyback of whatever it may be, CHF 250 million next year, even followed by a CHF 300 million buyback in 2027, given what's happening in the deleveraging with the free cash flow. Is there any reason why we shouldn't expect another buyback next year, holding all other things equal, i.e., excluding some big deal coming through or whatever it may be? So that's my first group of questions. If you could take those, please.

Thank you very much. So look, on the equity free cash flow, I mean, what we are providing is a medium-term outlook. And yes, the equity free cash flow conversion improvement we are guiding for is 100 to 150 basis points. So far, we have delivered or overdelivered on that in every single year over the last 3 years.

Typically, over the last years, what we said also at the end of the year is to take that as a new basis for the years to come. So in that sense, in a way, we have upgraded the guidance is one way to look at it. But look, for the moment, I would really love to maintain the guidance of the medium term, which among the top line and the EBITDA margin improvement is still the 100 to 150 basis points of equity free cash flow conversion improvement in the medium term year-on-year.

We are not providing guidance for specific years, not for the full year and also not for next year. But as we have discussed before, yes, for this year, the equity free cash flow for the year will be improving by about the amount you have mentioned before with Q4 being flattish to slightly negative in regard to equity free cash flow.

For the second part, the buyback, look, we have the capital allocation policy out there. It's very clear in the 3 elements. Xavier went through them before in the presentation. And it's also very clear in regard to the hierarchy of that. So the priority #1 remains investment into growth into accretive and attractive opportunities which are out there that includes small- to medium-sized bolt-on acquisitions, cash financed without additional equity. Number two is strengthening the balance sheet. We are at around 1.9x leverage. The guidance is 1.5 to 2x. So we are roughly in the bandwidth of our optimal capital allocation -- sorry, leverage target range we want to achieve.

Now having said that, in the absence of opportunities of investments and reaching the capital allocation policy target leverage, we can obviously consider to further do share buybacks as you have elaborated before in the question.

Okay. Just a follow-up on that group. So for the time being, you're confirming next year the medium term, i.e., 5% to 7% organic, 20 to 40 bps margin improvement, but you're not going to say this whether you can do another 100 to 150 basis points...

No, no. Just to be clear. Yes, we are saying yes. So the overperformance of 2025, the overperformance of '25 and '24, it's consolidated. And on that basis, we expect to keep growing per year 100 to 150 basis points on this new increased conversion.

That's very good news. And then sort of questions then on the -- just on the top line. And of course, there's a bit of fly in the ointment when it comes to looking at the results. The like-for-like at 2.7% seems to be below the sort of weighted average of Q3, if I look at the IATA data. And maybe this is just a broader question. Xavier, are you happy with the amount of the way things are going in terms of -- you've elaborated it really well. The consumer is changing. He wants experience or she wants experience, food, mixing things up, making things exciting at the airport. Are you satisfied with the speed of how things are going just given the fact that, that like-for-like was only 2.7% in Q3. And I know you've said, look, it's difficult to grow too much because airports are full and all that sort of thing. But it just seems really a pretty slim number given all of the things that you are doing to sort of excite the consumer at the airport and then with Club Avolta, et cetera, et cetera. That's the first sort of top line question.

Second one, did I hear you right? You're just saying that the Chinese passengers are just not coming back at all for your business. Of course, I know you're weighted more Europe, North America, Latin America. But you're just saying that Chinese are just not coming back for you at the moment.

So I'm never satisfied neither of what we achieved for the speed in which we achieve it. And I think anybody that runs a company, it should be the attitude. I always think we can improve things, we can do more. Said that, I want to be very clear. Don't overthink on the performance of quarter 3. We have the advantage of going down airport by airport, shop by shop, restaurant by restaurant, and we have a granularity that the market does not have, and I appreciate that. But when you look at where the like-for-like and the new concessions are happening, it's really in the quarter 3, very much motivated by the specific comparables.

And if you take the quarter and you go per month or per week or per day or per weekend, you will even see more volatility. I think what is important in Avolta and in the industry is to look at the full year. And on the full year, we will be in all key aspects in the outlook. And look, if you do a very simple math that I think it can be done even if you don't have the granularity we have and you add back North America to a more normalized growth, our growth this year, year-to-date would have been organic between 7% and 7.5%.

So we always said, look, it's a range between 5% and 7%. The years that you have parts of the business performing so so, you will have 5%. In the years that everything performs well, you will have 7% or even more in some years. 5% to 7%, I think with the realistic projection of our portfolio is a good proxy. Of that, the most important part is the like-for-like with some additional on new concessions.

So I am reasonably satisfied on the performance year-to-date. October is a very good sign that you can see that in lower season or let's say, on quarter 1, 2 and 4, you will always -- should have a slightly better performance than in quarter 3 on relative terms because of the seasonality.

Said that, I think we could do so many things better. We have so many areas where we can improve. We always focus, for example, on the digital and data transformation on the consumer relationship. But when you run smart tools, and we don't need the most sophisticated artificial intelligence. Just basic artificial intelligence can improve so much working capital management, optimization on how we design stores and therefore, improve the CapEx we use. If we do more flexible stores with the use of new tools on the digital spectrum, we can refurbish the store with very limited CapEx, just changing the digital content.

So the digital and data transformation will improve our capacity to deal better with passengers, but it's also part of the explanation of why we continue improvement in cost and productivity, and we continue improvement in the cash flow generation. That's why we feel comfortable with the 3 layers because we know what we can improve. We still have too many manual processes internally. And when you implement technology that is not even too expensive, you can reduce workforce, you can optimize processes and you can have better outcome with the same or lower input.

So overall, of course, if you judge us for every quarter, for every month, for every day, then it's a very difficult target to achieve. Look at what we have been doing in the full year '25, in the full year '24, in the full year '23. And it's not my style to be overoptimistic because as I just said, there is a lot of -- there are a lot of things we can do better. But I think it's undeniable after 16 quarters of improving quarter-on-quarter despite sales, despite traffic, despite volatility, despite Middle East crisis, despite the underperforming in the U.S., I think this group shows a very strong capacity of generating results and cash flow.

Sorry for the long speech. I didn't want to do it because then I look -- but I think there is a lot of room to improve over the next 3, 4, 5 years.

And just on China?

Sorry. [indiscernible] getting that. Look, Chinese passengers have changed in several aspects. Number one, where they go. They have declined in numbers definitely in North America. They were never very big in Latin America, less in Europe than it used to be in 2019, slightly recovering in a few key cities in Europe. And in Asia is where the growth of Chinese has been higher changing. In a year, they go more to Thailand, another year, they go more to Japan, for example, like in 2025.

Number of passengers are still reasonable. What happens is that the spend per passenger of Chinese today is the spend per passenger of most of the other Asian travelers. It's not anymore materially higher of what it used to be. And that's why the performance of Asia is very good, taking into consideration that Chinese are basically kind of flattish on construction. That's what I tried to say.

Okay. Just one little follow-up. Just on the U.S., like a couple of us out there, we're probably tracking the TSA data, which has been up. It looks like a couple of percent. It depends on the moving averages you use for a few months. I also see the IATA data that came out today for September for the U.S. talking about flat growth. So what is the disconnect between the TSA data and maybe what you've shown and also what the IATA are showing for September?

Well, there are 2 things. You always need to consider Avolta portfolio vis-a-vis the entire country. It's true that in North America, it's probably the place where it's the closest because of our geographical spread across the country compared to other regions that might be less coverage.

Look, different people uses different sources of data. The U.S. is very particular. Typically, they don't actually count passengers on the same way that you will do it internationally. It's a good proxy, particularly the changes of trends if you look at the same source.

I will not pay so much attention to the absolute numbers because they have different methodologies of calculation. But look, the reality is that in our portfolio, the number of passengers during 2025, it has been, on average, flattish with a few months negative and a very few weeks slightly positive. And that is starting to change a little bit. But together with that is a slight change on the mood of the passengers. We had, in recent times, a slightly positive spend per passenger in North America -- sorry, in the U.S. and Canada has been already positive, but in the U.S.

The next question comes from Isacco Brambilla from Mediobanca.

I have 2. The first one is connected to the multiple concession you have been awarded in the United States. Just if you can recall us the time frame to keep in mind for the roughly 3 percentage points cumulative contribution targeted from the tenders awarded at New York JFK. So for our model, what's the timing we should keep in mind between next year and the following years?

Second question is a follow-up on share buyback. A technical detail. How should we think about the timing for share cancellation connected to the CHF 200 million share buyback that is ongoing. So if you expect this to take place before the end of this year or early 2026?

Thank you very much for the questions. On the first one, as you know, over the last few months, we have won significant pieces of business in different terminals in JFK. Those businesses come at different time. So there will be the starting of operations in some cases, '26, some cases '27. I think the full year -- first full year where we will have everything included or at least almost everything will be 2028, but it should be positive contribution in '26, and it should be positive contribution in '27.

And the second one, probably you want to take?

Sure. So thank you very much for the question. Look, the share buyback program, as you know, started at the 31st of January, last for the entire year almost. So it ends at some point in December. We do expect by then to have purchased the full amount of up to CHF 200 million. And then what happens, and that's a technical element, you need to ask, I don't know the English word, but I think a creditor call. And basically, that also takes a couple of weeks. And if there, basically, the feedback is nil, we can cancel the shares, but technically likely to happen at some point in early 2026.

The next question comes from Elias Karine from Barclays.

Apologies if you may have covered that. But just looking through your capital structure, obviously, you've got maturities in 2026 and then 2027. Any particular plans to address those in advance? Any particular plans with regards to the type of instruments or currency that you can share at that stage? Obviously, your liquidity is very strong.

Thank you very much for the question. So we have actually for the 2026 maturity, which is a CHF 500 million convertible conversion somewhere at around CHF 85 per share, so likely not to convert into equity. We have there already partially refinanced that maturity earlier this year. We have done a bond. We have done a higher amount than was strictly required and that already refinanced out of the CHF 500 million, CHF 300 million. And then for the 2027 maturity, so look, we obviously have some quite high liquidity available in the group. We can use that. And on top of that, we do expect in 2026 and also 2027, obviously, to generate some cash, which can then also be used to amortize part of that debt. So from our perspective, no immediate requirement to refinance that, but we finally decide as we go along.

The next question comes from Alexandra Gaillard from BNP.

This is Jaafar from BNP. I just had 2 questions, please. The first one is on JFK. Thanks for the pointers as to the timing. Now that we've had a lot of different wins communicated in a lot of different documents, can you help us with the aggregate picture of your market share at JFK? Because there was a status quo a few years ago that HMSHost was almost automatically losing share in Food and Beverage at the occasion of terminal redevelopments, et cetera. And then on retail, it's been less clear, but not necessarily big share wins. So I know your U.S. market share, you've had a very clear message that you think it's nudging up by a few decimals. But can we take the case study of just a big airport doing a couple of extensions and renewals? And if you could help us understand what's happened, the small players win share, the large global players win share? Did you take more than your fair share?

And then second question on supplier income. There has been some noise at one of your peers. Could you give us a supplier income 101 lesson, please, for Avolta? How relevant is it? Is it more relevant in certain categories and certain geographies? Does it go into gross margins? And I guess, more importantly, has it changed at all in recent years?

Thank you. So first, the market share in North America on the 3 segments, Duty-Free, Food and Beverage, and Convenience over the last 2 years has been in North America, slightly positive. In JFK, it's massively positive. We have won the vast majority of the 3 business segments. Duty-Free of the different international terminals, everything except Terminal 1. And in F&B and Convenience, much more than -- I don't know what is a fair share, I would say, much more than the average share we have in the group.

Is that a proxy for the future? Of course, not. I think we need to be realistic. JFK has been extremely successful. I think in the U.S., the hybrid and the cross-sell and the opportunity to extract value from the different bits and pieces is maybe resonating better or faster than in other regions. So I think that is a competitive advantage. But I think just being in new concessions and in renewals, slightly positive, it's good enough for me because I also think the people that talks about market share too much, sometimes they do lose sight of what's really important, which is financial discipline. This is about making profits, about making cash. And for that, we are extremely disciplined. Said that, I think in some aspects, we are regarded by American Airports a little bit more advanced, and that's why maybe we are winning a little bit more market share. But it's not my obsession. I typically don't disclose it because what I do want is concessions that make incremental cash flow conversion.

The second one, I don't know if it's for you on an accounting manner.

I think, yes. Okay. So look, on the second question about advertising and promotions income. The way we reflect that is predominantly under turnover. There is a line called advertising and promotional income specifically. So it's sales and that line yields turnover. Sometimes in some cases, it's also price off and then reflected in the gross profit margin. That's point number one.

Point number two, the way we account for that, but basically for all other incomes and expenses as well is we have dedicated processes, which are very rigid. The advertising and promotions accrual specifically, but also then the invoices are accrued and invoiced not by the operating unit, which is responsible for it, but by the shared service center. And as such, you already have there a segregation of duty, which is very important.

And then point number three, all of that is obviously audited and reviewed in general, but frankly speaking, also now specifically after that news, which has been announced in August by one of our competitors. So we have reviewed that once more. And what I can tell you is that, yes, we do accruals. Those accruals of those invoices happen on a regular basis, but they turn into real invoices within 2 to 4 weeks for 99% of the cases. So to put an absolute amount on that, the absolute risk we see there on a full year basis is roughly CHF 0.5 million. And again, 99% is converting into real invoices within 2 to 4 weeks. So basically no risk there.

We now have a question from the webcast. Laura Bucher from Octavian asking, can you provide some color on the performance of the Free-Duty acquisition?

Free-Duty is slightly negative versus expectations, not very materially, but basically, it's related to a lower-than-expected Chinese consumption. But we were very reasonable. I think if you dig enough, you could see that the consideration for the acquisition was very reasonable. So we still are happy. But anything that relates to the Chinese travelers requires a lot of focus and a lot of work to fully maximize that. Thank you for the question.

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Xavier Rossinyol for any closing remarks.

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