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Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the ENAV First Quarter 2026 Results Conference Call. [Operator Instructions]

At this time, I would like to turn the conference over to Mr. Fabrizio Ragnacci, Head of IR of ENAV. Please go ahead, sir.

Good afternoon, ladies and gentlemen, and welcome to the first quarter 2026 results presentation, which will be hosted by our CFO, Luca Colman. In the presentation, we will provide some highlights of the period, and then we will walk you through the operational and financial performance for the group. Following the presentation, we will have the usual Q&A session. Before we start, let me remind you that media can be connected to both the presentation and the Q&A session.

Thank you for joining us. And now let me hand over to Luca.

Thank you, Fabrizio, and good afternoon. I will start with the key highlights of the first quarter 2026. The year started with a robust growth of traffic volume. In Q1, which includes 1 month of the conflict in Middle East, service units for En-route marked a year-on-year growth of 8.6% ahead of plan expectations by 4.5 percentage points. We are facing high levels of volatility triggered by the Middle East conflict and in a prolonged crisis scenario, the dynamics on availability and price of fuel jet -- jet fuel can have an impact on traffic during the summer season. To this end, as we approach the summer season, we will continue to monitor closely the evolution of traffic.

Financial performance and cash generation were solid. EBITDA came in at EUR 5.1 million, and free cash flow was around EUR 41 million, up by 1.5x versus previous year. Finally, let me remind you that May 14, the AGM will appoint a new Board of Directors.

Let's move now to the operating and financial performance of the quarter. In the first quarter of the year, we experienced a remarkable growth in traffic with En-route recording high single-digit growth and confirming Italy as the best performer amongst the European peer group. The performance for En-route growth was largely driven by over flight and international traffic, up, respectively, by 14.3% and 7.4% year-on-year, more than offsetting the slowdown in national traffic. This level of traffic positions us ahead of plan expectation by 4.5 percentage points. Terminal traffic increased by 2.7% year-on-year, growing in both charging zones. The overall performance is driven by international traffic, which more than offset the contraction of national traffic. Despite very promising start of the year, we will closely monitor the evolution of traffic over the coming weeks as the potential shortage and price dynamics for jet fuel could impact traffic trend for the summer season.

Let's move now to the economic results, starting with revenues. Total revenues for the period amounted to EUR 196 million, supported by the continued strength of our core regulated activities and the positive performance of the nonregulated business. Looking at the regulated business, net regulated revenue contributed for EUR 13.6 million, driven by the solid growth of En-route and a stable contribution from Terminal. Balance N-2 impacted positively for EUR 2.7 million as a result of negative Balance N-2 for EUR 37.3 million in Q1 '25 and negative EUR 34.6 million in Q1 '26. The nonregulated business contributed with EUR 3.4 million, mainly driven by commercial activities in India, where we have recently opened our branch. Balance for the period impacted for a negative EUR 2.2 million as a result of negative balance for the period for around EUR 0.2 million in Q1 '25 and negative EUR 2.6 million in Q1 '26.

Moving to cost on Slide 5. In Q1 '26, total operating costs reached EUR 191 million, up by EUR 4.9 million, mainly driven by the increase in personnel costs. Personnel costs stood at around EUR 159 million, up by 7% year-on-year as a consequence of growth in fixed component due to the contract wage adjustment mainly linked with inflation and agreement signed with the trade unions, and higher variable component, mainly driven by higher overtime and operational needs linked to the higher traffic volume managed. Let me highlight that the renewal of the labor contract [ signed ] last April is fully in line with the assumption of the industrial plan for 2026. Other operating costs are up by 1.9%, mainly due to higher maintenance activities and other personnel expenses linked to the increase of traffic. These were partially offset by lower utilities expenses.

Moving on Slide 6 on EBITDA. EBITDA came in at EUR 5.1 million, well above the value recorded last year. As said, the result was underpinned by the positive performance of the core business in a supportive traffic environment as well as the acceleration in the deployment of commercial activities in a not regulated domain, particularly in India. Cost evolution is in line with the planned expectations and confirms the expected trajectory for 2026.

Moving now to Slide 7 on the profit and loss statement. D&A and provisions were broadly stable year-on-year with the increase in depreciation broadly offset by lower provisions. Net financial expenses were EUR 1.2 million, down by approximately EUR 1 million versus previous year, mainly due to lower debt and lower interest rates. Group net income came in at negative EUR 22.8 million, in line with the business seasonality.

Let's move to cash flow and net debt on Slide 8. Net debt for the period stood at EUR 99.4 million, down by EUR 38.1 million versus December 31, '25. Cash flow from operating activities amounted to EUR 65.9 million and investment in [indiscernible] for EUR 21.2 million. Free cash flow in Q1 '26 was equal to EUR 41.4 million, marking a 1.5x increase versus Q1 '25, confirming the group's solid cash generation profile. Free cash flow for the full year is expected at EUR 250 million, as already communicated in the fiscal year 2025 results.

I will now move to the closing remarks. The operating environment in the first quarter 2026 proved to be solid and continued to show record growth rates well ahead of the European average. Nonetheless, the persistent crisis scenario related to the Middle East conflict might trigger consequence for our business as the summer season could be impacted by shortage and/or spikes in price for jet fuel. The high cash generation profile of our business is confirmed with a 1.5x increase year-on-year of free cash flow and around of EUR 250 million expected for the full year.

Finally, let me remind you that the next AGM called for May 14, we will appoint the new Board of Directors and approve the DPS of EUR 0.29 share for 2025. Thank you.

And now let's open the Q&A section.

[Operator Instructions] First question is from Carlos Caburrasi, Kepler Cheuvreux.

Two from my side. First, I wanted to go back to the jet fuel situation, given that some airports in Italy already announced -- already introduced, sorry, restrictions last month. I was wondering if you could give us some color on the trend you have seen so far and the potential implications that a fuel shortage could have on the EUR 250 million free cash flow target for the year?

And second, considering the change in management, I was wondering if we should expect any kind of changes to either the nonrelated strategy or long-term dividend outlook.

So talking about the jet fuel impact. Let me say that tone from a lines appears to be, from our point of view, supportive at the moment for the time being. And we have not seen particular criticalities and problems until April. Even the April data were quite good. We have recorded a growth of around 3% number of flights. We don't have yet -- we don't have the service unit, April service unit published yet by Eurocontrol, but still the flight in April was quite good supportive 3% increase versus the same period of the previous year. A trend that seems to be confirmed also in the beginning of May as well. So nonetheless, we need actually to wait to see what will -- what happens in the Middle East as risk of the impact from the shortage and the increase in price of jet fuel can always happen.

But it seems to be also from the communication, I mean, the press release of some airline and these are public, they seems to be not particularly impacted at least for the next 2, 3 months. We heard from either way something with them. So I mean, there are some public press release that they say that they shouldn't have particular impact for the next few months. So we are, at the moment, positively confident even if it's a very particular period, so we have to wait to have more data. But at least at the moment, what we have recorded even in the first days of May are still an increase of traffic in terms of flight.

For the second question, I think it's correct to wait a couple of days where, as I said, the new AGM will appoint the new Board of Directors and then the strategy will be released actually or some change of the strategy to be released later on. So no particular answer on this point. If I may, just consider that within the regulatory period, the 5 years scenario agreed with the European Commission. So what concerns the regulated business, the regulated business, as the word say, is regulated. So even there is some possible to move in, but the main scenario agreed with the European Commission with the regulator is something that is some way a picture -- it's a framework that you more or less taken. So this in some way stabilize at least the tariff and some figures for the regulated business.

Next question is from Aleksandra Arsova, Equita.

So a couple of questions from my end. The first one is on traffic again. If I remember correctly, at the end of March, Eurocontrol published to release its latest forecast for traffic, let's say, forecasting for Italy a 5% growth in traffic for 2026. So I was wondering if you can provide some, let's say, color on the assumptions behind this 5% and whether it already accounts for some slowdown in traffic due to the situation in Iran.

The second one is on cost evolution. Again, if I remember correctly, during your March presentation, you guided for a plus 6% roughly increase in your P&L costs. So from that time, now you closed the new labor contract. And so I was wondering if this plus 6% is still valid at least for what you know up to date.

Yes, for what concerned the traffic, see, as you said, Eurocontrol by the end -- I mean, last March, published the new forecast for Italy for the other European countries that increased what is the forecast for 2026 service unit for Italy by 1 percentage point. So they move from 1.1 that is the 1% that is the one we have in the tariff budget increase to 5.1% for what concern the base scenario, and this is definitely positive. But in the same time, as you probably remember, they also gave a disclosure related to the fact that they still had to analyze all the impact of what is happening -- I mean, what is going on with the Middle East war and crisis. And so they opened what is the high scenario and the low scenario range, a big range.

So from the total impact may go from a positive -- still a positive low scenario at an increase of 1.2% through a base scenario of 5.1% that one would normally take in consideration, but it can also get to 9.2% increase. So this magnitude is more related to the fact that still some other analysis that Eurocontrol has to do and still probably -- and that's the reason why they take this big magnitude -- big range. But yes, we think they increase by 1 percentage point, what is the base scenario for the end of 2026 for us. So we think that it could be something that we can take in consideration.

But we -- as I said, we prefer to wait the next month and the summer season -- I mean, to understand well what will happen in the next weeks just to be sure to be very -- I mean all elements to have our forecast confirmed. For what concerns the cost evolution, yes, let me say that, yes, even if we still need to wait impact of the summer season, you know how much the summer season can move some variable part of our cost. But the current year-end forecast is moving line with what we said before, I would say, with the performance reported in 2025. So if you look the cost evolution in 2025 is what we expect also by the end of this year if nothing big change will not apply. So the impact of -- the impact of renewal of the staff contract has been considered in what I just said. So take that number, take a number close to the performance recorded in 2025, that I remember, I guess it was 6.4 maybe. So something between this.

Next question is from Amal Patel, UBS.

Just 2 questions from my side. I appreciate the lack of visibility on traffic heading into summer, but the EUR 250 million free cash flow guidance you set, when you set that guidance, what were the underlying traffic assumptions embedded in this? And secondly, just a bit more color on the strikes that took place yesterday in Rome and Naples. My understanding was you reached a formal agreement with the unions. I guess what is the motivation for workers continuing to strike?

Okay. Yes, for what concern the first question, let me say that the target that we have considered -- I mean, the traffic increase that we have in our budget in 2026 is 4.1 increase of En-route is the one that was agreed with the regulator in the performance plan and is also in the target, so very in line. So let me say that now we are -- I mean, in the first quarter, we are with a good result, as you have seen from presentation, much higher than that value, even Eurocontrol is 5.1. So that cash flow generation is related to this value. So at the moment, we feel -- I mean, at least from the information we have now, we feel comfortable to confirm that generate cash flow generation looking the evolution of traffic in this way.

From what concern the strike that we had, it just a minor trade union that didn't sign. I mean all the different trade unions signed the contract and it was just one minor that from what I knew didn't sign. And so it was just a way too sure that they didn't agree with this renewal. But there was just a local, if I'm right, it was a local strike, didn't impact actually all the [indiscernible] local strike with a minimum impact for what this information came to me with a minimum impact on service.

[Operator Instructions] Next question is from Luca Bacoccoli, Intesa Sanpaolo.

Some questions from my side as well. The first one is on the service unit growth mix. As you were pointing out, Luca, most of the growth comes from the international and above all the other flights. So I was wondering if this growth in the overflight is driven by any rerouting which may occur in March because of the conflict in Iran and if you see any, let's say, benefit or headwinds from the war on the routes taken by the aircraft or the airlines? And the second question is again on OpEx, maybe on staff cost. In the press release, you mentioned the impact of the performance bonus. So what would the staff cost growth be excluding the, let's say, clawback of this performance bonus?

And finally, on the nonregulated growth, revenues growth, which was very, very strong and I think organic. So my question is, what should we expect for the remaining part of the year? Is this growth driven by some phasing so new contracts coming in or there's, let's say, a structural underlying trend behind this growth?

[Audio Gap] Luca sorry, we just had to check to be sure understood your question. So for what concern the service unit in March [indiscernible] overflight, March was the first month after the Middle East crisis started. And there was a kind of, let me say, a little bit, not panic, but just rerouting and readjusting, I don't think so. So there was a lot of movement on some flight from one part to another part. And so this is -- there was a lot of rerouting, but then they adjust by the end of March in April above all, they readjust to the, let me say, a normal situation still effect from the closing, I mean, to the fact that the Iran is closed. So the most -- some flight go below that Earthspace and then they move up to Northern Europe coming from the Middle East actually, passing through Egypt then decide to pass through Italy or through the volcanic area.

The good thing is we still continue to perform very well in terms of delay. We are still the best in class in terms of resolve, I mean, the [indiscernible] services. So we don't give delay. And this attract traffic in our overflight in our Earthspace. And this is one of the reasons why we are still having a very important impact of the overflight on our features. So -- if I'm right in [indiscernible] for what concerns the second question in terms of the agreement with the personnel, this is more or less EUR 5 million impact on cost for what concern the extra feasibility that we have asked to our controllers.

For what concern -- what was the last one? The nonregulated growth. We confirm at the moment what is our guidance. So as I said, we foresee -- we forecast to get EUR 62 million revenues from not regulated business, and that's fully confirmed at the moment.

[Operator Instructions] Ladies and gentlemen, there are no more questions registered at this time.

Thank you. So we actually have a last one, which has come through our inbox at [email protected]. And the question is on the 2026 target. And basically, they're asking us why we did not disclose the target for the full year and when we think we will be in a position to share with the market the target for 2026?

Okay. Thank you, Fabrizio. So the reason is mainly related to the scenario. Until the Middle East crisis does not stabilize or resolve, we believe that it is really difficult to define which traffic forecast can be considered reliable and this is for the summer season. Therefore, we prefer to postpone the outlook for the year to the first half release of next August. Further to the potential volatility on traffic, a postponement to August was also preferable also from a governance perspective. In fact, on May 14, so only in a couple of day time, the AGM will appoint a new Board of Directors that will be then in a position to be included in the evaluation of the scenario going forward. So these are the 2 main reasons why we...

Thank you, Luca. So with this, there are no other questions that we have received on our end. So if there are no other questions from the audience, I think that we can wrap up. And thanks, everybody, for joining our call this afternoon.

Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.

Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the ENAV Full Year 2025 Results Conference Call. [Operator Instructions]

At this time, I would like to turn the conference over to Mr. Fabrizio Ragnacci, Head of Investor Relations. Please go ahead, sir.

Thank you. Good afternoon, ladies and gentlemen, and welcome to the Full Year 2025 Results Presentation, which will be hosted by our CEO, Pasqualino Monti; and our CFO, Luca Colman. In the presentation, management will provide some highlights of the period, and then we'll walk you through the operational and financial performance for the group. Following the presentation, we will have the usual Q&A session. Before we start, let me remind you that media can be connected to both the presentation and the Q&A session.

Thank you. And now let me hand over to Pasqualino.

Thank you, Fabrizio, and good afternoon, everybody. I will start with a closer look at the operating performance.

Since 2023, the Italian airspace has shown a full recovery and continue to grow year after year. In 2025, en-route traffic for Italy stood at plus 24% versus 2019, up by more than 10 percentage points versus the comparator group in Europe. 2026 started on a strong note. As of February, en-route traffic is up by 7.6% versus 2025. In this record growth environment, ENAV's operating performance has been remarkable and confirmed our rule as best-in-class in Europe.

Results in terms of quality of service are evident. The number of flights assisted has grown over the years. And still, we have always beaten the regulatory target even by quiet some margin. This track record gives us confidence that we will continue to overperform and achieve the performance bonus also in the coming years. The significant operating performance was coupled with visible results also on sustainability. We have achieved a reduction in CO2 emissions of 86.4% versus the 2019 baseline. We have been confirmed in the Climate A List by CDP for the second year in a row and we have been included in the Sustainability Yearbook of Standard & Poor's for 2026. Besides the core business, the risk return profile of the group has improved also thanks to the focus on the nonregulated business.

Managerial efforts to valorize ENAV's expertise and know-how resulted in a growth of around 1.6x in revenues from the nonregulated business that now accounts for approximately 5% of total revenues. The acceleration started in 2023. And in 2025, this business recorded revenues of EUR 52 million, position us well to reach our target of more than EUR 100 million by 2029. We have exposure to growing markets and technologies with almost 50% of the revenue stream generated outside of Europe and with a well-diversified portfolio of products. The growth has been achieved both organically and through M&A.

In the defense sector, the higher spending planned by the government offered us the opportunity to contribute to modernization of Radar Surveillance Systems at 6 Italian Air Force bases. In Malaysia, we have proven the commercial feasibility of the remote tower concept. And ultimately, with the acquisition of AIView, which we expect to finalize in the coming days, we can expand further our presence in the drone segment, which we believe will grow significantly in the future. The solid trajectory of both core business and nonregulated segment are mirrored by the performance of the stock.

Since the start of the mandate, the re-rate of the stock has been consistent. The share price is up by 51% versus the average level recorded in 2023, recorded a growth of 46% since the Capital Market Day back in April 2025. Visibility of the path forward and our focus on shareholder remuneration resulted in a distribution of around EUR 430 million in dividends over the 2023-2025 period. As a result, total shareholder return for the period is equal to 57% higher than the TSR recorded by the Italian Mid-cap Index by 6 percentage points. As we are now at the beginning of a new year, the focus on shareholder remuneration remains unchanged and our dividend policy fully confirmed.

Let's now start on full year 2025 results. 2025 results show our ability to execute and be resilient. We have fully met the guidance upgraded as of last July and even outperformed in terms of net income. Luca will elaborate on the key drivers, but let me highlight the results at the EBITDA level. EBITDA came in at the higher end of the guidance range as we were able to extract additional efficiencies and react to the weaker traffic trend emerged from August 2025.

Results were strong also on cash generation. Free cash flow reached a higher level than projected with around EUR 260 million, up by EUR 20 million versus the initial expectation of the year. These results are the best basis for the next steps in our path to 2029, but the external context is currently very difficult to predict. We are facing an extremely volatile environment with recent turmoil in the Middle East, generating potential consequences that are difficult to forecast and are still evolving on a daily basis.

In terms of our exposure, Middle East accounted for only 10% of en-route service units in 2025. We are monitoring the situation. January and February have shown solid growth, en-route traffic is at plus 7.6%, but actual data for March will be available only at the end of April. In order to grasp better the potential sides of the impact, we are also waiting from the update of traffic forecasts from Eurocontrol. For what concerns the impact, let me highlight that our regulatory framework foresees a balanced mechanism on traffic that protects in case of volatility. Beyond a 2% decrease in traffic versus the planned level, the downside will be shared with airlines with only 30% left on ENAV's accounts and 70% borne by airlines. As a sensitivity, you can consider that each percentage point en-route traffic accounts for around EUR 6.5 million in revenues.

In light on the ongoing crisis and the lack of actual data to elaborate on, we have decided to postpone the communication of our 2026 targets to the Q1 results at the beginning of May. Operating variables are under our control, bear with us as we develop a more refined view on traffic for the coming months. Despite the turmoil can look ahead to 2026. Our results have proven the resiliency and predictability of our business model and the solidity of our strategy. We improved our targets for 2025, delivered on expectations and want to share the incremental results with our shareholders.

To this end, we are upgrading the DPS curve for the next 2 years. We will propose to the next AGM in May a DPS of EUR 0.29 per share for 2025, and the Board of Directors approved a DPS of EUR 0.30 per share for 2026. As I said, our dividend policy is fully confirmed and based on cash flow generation, which remains visible and supported by a protective regulatory framework.

And now I hand over to the CFO that will walk you through the numbers of 2025. I will come back later for closing remarks.

Thank you, Pasqualino. Good afternoon, everybody. Let's start with the operating details. Traffic in 2025 continued to be robust. And as I said by the CEO, outperformed the European average. En-route service units grew by 5.9% year-on-year, driven by overflight in international, up, respectively, by 7.8% and 6.9% year-on-year, which mitigated the national traffic, which is down by minus 2.1% year-on-year. Terminal traffic increased by 3.4% year-on-year with growth in both charging zones 1 and 2, mainly driven by international traffic that more than offset the weakness in national traffic. As a result, terminal performance came in below plan expectation by 3.6 percentage points.

Let's move now to the economic results, starting with revenues. Total revenues for the period amounted to EUR 1.025 billion, supported by the continued strength of the core business regulated activities and the positive performance of not regulated business. Looking at the regulated business, net regulated revenues amounted to EUR 12.1 million, driven by en-route revenues that increased by 15.5% year-on-year. Terminal revenues remained broadly stable, reflecting the slowdown in national traffic that we mentioned earlier. The nonregulated business contributed with plus EUR 2.8 million, achieving the target for the year, in line with the planned expectations. Balance for the period impacted for a negative EUR 32 million as a result of a positive balance for the period for around EUR 49 million in 2024 and only EUR 70 million in 2025.

Let me highlight the following. In 2024, we accrued a positive balance related to inflation worth of around EUR 64 million, which has been reset in 2025 for the start of the new regulatory period. And then 2025, we recorded mainly a negative inflation balance for around EUR 5 million, a positive balance for traffic overall of about EUR 4.9 million and EUR 13 million related to the en-route performance bonus, achieved thanks to the remarkable result in terms of punctuality versus the regulatory target that set for ENAV.

Moving to costs on Slide 11. Total operating costs for the period amounted to EUR 772 million, up by 6.4%, well below the projected 9% increase embedded in the plan, thanks to the efficiency measures and the cost control initiatives that were also activated in response to the traffic dynamics in the second half of 2025. Personnel costs reached EUR 633 million, up by 6.8% versus the previous year, as a consequence of higher fixed component due to contractual wage adjustments, mainly linked with inflation and higher variable component, mainly driven by union agreements to handle the higher traffic volumes. Other operating costs increased by 7.6% due to higher maintenance costs, Eurocontrol contributions and other personnel expenses.

Moving on Slide 12 on EBITDA. EBITDA for the period reached EUR 253 million, meeting the higher end of the guidance range for the year. This result has been achieved, thanks to the focus on cost efficiencies that allowed us to mitigate the impact stemming from the soften of en-route traffic started in August '25 as well as the weakness in terminal traffic.

Moving now to Slide 13 on the profit and loss statement. D&A decreased by EUR 10.4 million to EUR 109.3 million as the negative impact from provisions of EUR 2.7 million was more than offset by lower depreciation following the full depreciation of some assets as well as the dynamics related to the accounting of EU grants like PNRR funds and other forms of subsidized finance. Net financial expenses of EUR 8.1 million decreased by 2.5% year-on-year, reflecting lower interest expenses on variable cost of debt due to falling interest rate, partially offset by an increased charge related to the first tranche of EIB loan. Cost of debt in 2025 was equal to 3.59%, down by 47 bps versus previous year. That was 4.06%.

Let me highlight that at the beginning of 2026, we executed a liability management exercise and subscribed 2 new loans, 3 and 5 years bullet with a pool of banks that fully cover our needs for the plan period. This liability management will help us drive further more -- further down the cost of debt in 2026. Net result amount to EUR 93.1 million, marking a 4% increase compared to the 9 months 2025.

Let's move to cash flow and net debt on Slide 14, where we can see that net debt for the period is equal to EUR 137.5 million, down by EUR 120.8 million versus December 31, '24, and that was driven mainly by the strong operating cash flow generation of EUR 340.6 million, up by 1.3x versus 2024. Then we had also the cash absorbed by investment activities for around EUR 77 million and the dividend payment of EUR 146.2 million. Free cash flow for the period was equal to EUR 263.6 million, up by EUR 64.5 million year-on-year or 32%, confirming the company's strong and consistent cash generation profile. To the same extent, in 2026, we expect to generate a free cash flow of around EUR 250 million.

And now I hand over back to the CEO for the closing remarks.

Thank you, Luca. 2025 results proved our ability to deliver the solidity of our business model and our technical excellence. 2026 will drive significant progress in the implementation of the key strategic initiatives at the core of our industrial plan. We are currently experiencing high levels of volatility in light of the situation in the Middle East. The year started on a strong note in terms of traffic, but we must monitor the evolution of the events and their implications.

We are confident on the evolution of all the business variables under our direct control and we'll share with you the targets for 2026 in the Q1 results presentation of next May. Based on this confidence and the robust delivery of 2025, we have improved the DPS curve for both 2025 and 2026.

And now let's open the Q&A session.

The first question is from Carlos Caburrasi, Kepler.

Two from my side. First, on the 2026 guidance, I understand your cautious stance. And I know you've said that more visibility will be provided in Q1. But at the same time, you are providing a free cash flow target of EUR 250 million. And I was wondering if you could at least provide some visibility on the key assumptions of that figure.

And second, on dividends here, it's actually two quick questions. One is that while you haven't provided guidance in 2026, how likely is that we see the [ EUR 0.01 ] upgrade or improvement continuing through the rest of RP4? And the second is that although it's still far away, how should we think about dividends in RP5 given that in RP4, these are largely supported by balance reversals? And would it be something reasonable to expect higher debt to sustain dividend payments?

Okay. Carlos, I will go directly to the second one and then back to the cash flow. I mean, if you look at what is our profile, our net debt on EBITDA ratio above all target in 2029, we have a lot of room to have a better -- I mean, we can even have more debt without no problem. So in general term, I would answer, yes, there is the possibility to. This will decide by the future Board of Directors in that time, also looking what would be the real free cash flow generation in that time. But in general term, we would say, yes, we definitely can use that to pay our dividend also to increase our dividend.

Say that, coming back to the cash flow, to just give you a flavor of what is the main item in 2026. If you think that in 2025, our forecast was around EUR 240 million of free cash flow, and now we have EUR 250 million, you should consider more or less the same assumption that we had last year, a little bit more an improvement that will be around EUR 10 million on the plane base, mainly related to more traffic en-route and related to the fact that the cash flow that is supposed to be cashed from the balance of the previous year in 2026 tariff is more or less the same on 2025. So it doesn't really move too much the figures.

The next question is from Nicolo Pessina of Mediobanca.

First question on CapEx. EUR 77 million of CapEx is -- looks the lowest level since the IPO at least. So I'm wondering if you can elaborate a little bit more on why such a low figure. And I'm also wondering if the target of EUR 570 million total CapEx plus recovery of the past delays over the 2025, '29 period that you provided a year ago with the update of the business plan is still valid because it implies a sharp acceleration in the next few years. In particular, following up on the following -- on the previous answer, which amount of CapEx is included in this EUR 250 million free cash flow generation for 2026?

Second question on the defense spending by the Italian government you mentioned during the presentation. I'm wondering if you can provide maybe some example of additional opportunities of new contracts, maybe similar to the one you signed for the surveillance systems in [indiscernible] basis and maybe there are other opportunities with the Italian Military Institutions or other Government Institutions?

Okay. Nicolo, for what concern the CapEx, just think that we always think about cash CapEx, if you look in the cash flow, the impact on the cash flow. So the cash CapEx of this year in '25 was very close to 2024. So we didn't have so difference. And we believe we are more or less the same for the next year in terms of cash CapEx.

In terms of CapEx of the year, we still have an amount of money that -- I mean, amount -- yes, of money that is [ a factor ] 3 things mainly. One, the discount that we have. As you know, we go everything -- every time we buy something, but on the investment side and the CapEx side, we always go on bid. And this allowed us to have a discount on the price that we planned in our figure. And this is effect positively in terms of the money that we spend. But actually, we already do exactly the plan that we are thinking to do. So this doesn't really impact in any way our investment in invest payment just to save money.

Second of all, if you look at the D&A, the D&A is a little bit lower from the one that was planned just because we have 2 impacts. The first one comes from the PNRR and [ bond ] and [ chev ] all the grants that we are getting from European -- from the Italian state. This will reduce the number -- I mean, the amount of D&A in our P&L and also in our tariff. And the second one was also the fact that we have already -- we had actually fully amortized a couple of important assets came out from our D&A. And so actually, this has impacted a bit more than the value. So in general terms, we don't see any particular impact on our plan of the CapEx, just think that is more related to the discount that we are and the other factors that I explained. Or the other point, I will hand the -- just a second.

Okay. Yes. We are always looking for new opportunities. We are working on some options. One example is the control of price zones with drones where we wait for a tender to be launched. Defense opportunity will grow also because then the initial contract is expected to extend to other [indiscernible] spaces. That's it.

The next question is from Marco Limite, Barclays.

My first question is on M&A. You have announced an acquisition of AI a few months ago. Any update you could provide on that front is the first question. And the second question is more, let's say, on the strategy around M&A because clearly, this deal is not huge. But back at the CMD, you were planning for a pretty sizable firepower balance or pool for M&A.

So the question -- the two questions are, number one, if you are expecting more M&A activities, maybe of larger companies? And number two, if you don't, do you have, let's say, leverage target that you have in mind and therefore, we should start thinking about extraordinary dividends or distribution to shareholders in order to have a slightly more efficient balance sheet.

Okay. For M&A, we expect to finalize in the coming days the acquisition of AIView. In the past, we shared with the market that we were running due diligence also on another target. We are currently still evaluating, but there has been no further progress on that target. In general, we continue to scout the market for opportunities and keep looking at different potential targets, maybe bigger than the first one.

And as Pasqualino said, in case we need to raise money, so more debt, they will be focused on this M&A for even bigger targets and for CapEx. That's our profile at the moment.

The next question is from Luca Bacoccoli, Intesa Sanpaolo.

Could you hear me?

Yes, yes. We can hear you, Luca.

Okay. So first question regards the traffic trend on March. Looking at Eurocontrol data regarding the first week after the war in Iran and the third week, it seems that traffic or better the average flights per day are still up in the region of 3%, 4%. So can we assume the data as a proxy of the en-route unit service for the March data.

And the other question regards the OpEx trend in 2026 on which you can probably have good visibility. So I was wondering what should we expect in terms of cost efficiency given the very positive results delivered in 2025. Then the other question is on the nonregulated business for this year, if you have any target that you can share with us?

And finally, a question for Mr. Monti. For several months now, the Italian press has been reporting that you might be moving to another listed company controlled by the government. So my question is, do you feel that you have successfully complete your mission at ENAV?

So on traffic, as you said, Luca, we only have the number of flights for the first half of March, so 2 weeks since the war start actually. Flight -- I confirm that the flight for the first few weeks of flight and non-service unit of March are up by low to middle single digit year-on-year, so still positive. So if we compare this to the last year period, same period, we had an increase. We are having an increase, still increase. But we don't see -- I mean, we don't have the information now to understand what will be an impact on service unity. We believe that could be still positive. But for the service unit of March, we need to wait the second half of April when we were going to publish the actual value.

Also Eurocontrol, as you see, that normally, they publish the update on traffic in the middle of March, the new update, the forecast for traffic. They haven't published yet. That's the reason why they still are -- they also want to see what will -- what is happening in this couple of weeks -- sorry, the couple of weeks of March. So we need to wait a little bit more to be more precise even if the impact at least in terms of flights seems to be not bad at the moment.

For what concerns costs, let me say, you should consider that we haven't anticipated most of the cost that -- I mean, part of the cost, the efficiency that we could have done in 2026 also for the traffic impact we had in 2025 for the terminal. So we anticipate part of this effect. This is a part of the answer why we are performing so well in 2025 costs. You should translate part of this efficiency also in 2026, but you should also add a part of the consolidation of cost of [ IB Group ] that is the company that we are acquiring and also the increase of the cost that we have starting from 2025 related to the agreement on the performance bonus sharing with air traffic controllers. So you remember that this year, we had this agreement with them that push us to get -- push them to get the performance plan. And so this seems to be the performance bonus, and this works very well, and we will supply this year.

So in general terms, you should consider an increase around 6%, probably more or less an average that you could consider in your assumption.

On the nonregulated business, the not regulated business will grow by around EUR 10 million from EUR 52 million of 2025 to around EUR 62 million in 2026. On my mandate, the decision will be taken by the majority shareholder. I'm happy at ENAV and I'm focused on the implementation of the strategic plan.

The next question is from Amal Patel, UBS.

Just two from me. Just on AI, can you articulate a bit more how you're leveraging AI to achieve cost savings in the business? Clearly, the shift from digital to remote towers will be a tailwind to OpEx towards the end of the decade, and you already have this -- the [ AMAN ] system, which you're employing. But can you maybe talk about any new AI initiatives you expect to implement in the coming years and what incremental cost savings you expect these to achieve?

And my second question is, can you help me understand a bit better the age distribution of your workforce? Approximately what proportion of your workforce do you expect to retire in the next 5 to 10 years?

Okay. So we'll conserve the curve of the retirement. Let me see that we have several, let me say, several -- a number of -- important number of controllers that we retired. We will -- our purpose is not to substitute all these controllers, thanks to the fact that the implementation of our business plan related above all in remote tower and digitalization of power will help us to optimize the number of people. So depending on the trajectory and in respect of the timing of this 10 years project, we've adjusted the number of hiring controller -- the number of controllers that we will hire in the period.

So in the moment, by the end of this business plan, so '28 and '29, we foreseen to have a very positive impact on personnel costs, thanks to the -- what I just said, technology and the capability not to -- I mean, to hire new controller when they will go to retire. That is more or less our strategy on this point.

On AI, digitalization is one of the strategic pillars for us, and we are already one of the more advanced in Europe from a technology standpoint. Artificial Intelligence can be a lever to improve over time, the efficiency and capacity of the AI space. It's important to highlight that in our sector, technological evolution can only happen progressively and in line with the safety standards and regulatory framework defined at EU level.

Ladies and gentlemen, there are no more questions registered at this time. I turn the conference back to you for any closing remarks.

So thank you. Thank you to all who participated, and we'll be in touch with the Q1 results in May. Thank you. Bye-bye.

Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.

Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the ENAV 9 Months 2025 Consolidated Results Conference Call. [Operator Instructions]

At this time, I would like to turn the conference over to Mr. Fabrizio Ragnacci, Head of Investor Relations. Please go ahead, sir.

Good afternoon, ladies and gentlemen, and welcome to the 9 months 2025 results presentation, which will be hosted by our CEO, Pasqualino Monti; and our CFO, Luca Colman. We will be providing some highlights of the period, and then the management will walk you through the operational and financial performance for the group. Following the presentation, we will have the usual Q&A session. Before we start, let me remind you that media can be connected to both the presentation and the Q&A session.

Thank you. And now I hand over to Pasqualino for his opening remarks.

Thank you, Fabrizio. I will start with the key highlights of the 9 months of 2025. The Italian airspace, mainly thanks to its efficiency level, marked another quarter of higher traffic growth compared to the rest of Europe and the peer group. In this environment of prolonged record growth, ENAV confirmed its best-in-class operating performance. After the peak summer season, the average delay of flight stands at 0.014 minutes, almost negligible when compared with the threshold for the capacity bonus set at 0.14 minutes per flight.

Financial performance continues to be solid. Both EBITDA and free cash flow increased significantly in the quarter and are well on track to deliver full year guidance. In the non-regulated business, we have made further progress with the agreement for the implementation of our remote digital tower in Malaysia. This agreement shows the commercial validity of our expertise and signals the potential in terms of value pool we can address in the non-regulated segment. Despite the headwind on traffic levels, our operational and financial delivery position us well on track to reach the guidance for 2025, which was updated last July.

And now I hand over to the CFO.

Thank you, Pasqualino, and good afternoon, everybody. Let's start with the traffic. Overall, the growth remain -- the growth trend remains solid, even if at a slightly lower pace versus the first half 2025. This is mainly a consequence of the slowdown in national traffic for both en-route and terminal.

Let's take a closer look at the evolution of en-route and terminal, with the en-route service unit driven by overflight and international. They are up by 5.9%, confirming the strongest performance among the main European countries included in the peer group. Terminal grew by 3.2% versus previous year, largely driven by the positive contribution of international traffic, which accounted for almost 70% of the total and offset the impact from lower national traffic that affected the mainly terminal charging zone 1.

Let's move now to the economic results, starting with revenues. Total revenues in the period reached EUR 748.4 million. Performance in the core business was solid. En-route revenues grew by 16% year-on-year. Terminal was flat despite the impact from lower national traffic levels. After the negative impact associated with the reversal of balance N-2 worth around EUR 79 million, net regulatory revenues were equal to EUR 10.4 million. Non-regulated business recorded revenues of EUR 22 million, down year-on-year, as the commercial activities are more skewed towards the last quarter of the year.

Balance for the period accounted for a negative EUR 29.1 million, mainly driven by the balance accrued in 2024 related to inflation, which has been reset in '25 for the start of the new regulatory period, impacting for about EUR 50 million. And then we have a negative balance of EUR 3.3 million associated with the delta between the level of cost for Eurocontrol that was included in 2024 tariff and the actual cost of the agency in 2024.

Moving to costs on Slide 5. Total operating costs reached EUR 568 million, up by 3.8%, driven mainly by the increase of personnel costs, up by 4.4%, as the growth of other costs is [ muted ] by efforts on efficiency. Personnel costs reached EUR 467 million as a consequence of higher fixed salaries, mainly linked to the contractual inflation adjustment, and the increase of the variable component, mainly driven by the operational needs associated with the summer season. Other operating costs are up by 3.1%, mainly due to an increase in energy costs, in line with the dynamics observed in the previous quarter.

Moving on Slide 6 on EBITDA. EBITDA for the period amounted to EUR 180 million, with a remarkable 2.6x increase versus the first half of 2025. As said, net regulated revenues contributed positively for EUR 10.4 million. Balance dynamics impacted negatively for EUR 29.1 million overall, driven by the substantial absence of positive balance generation in 2025 as the first year of the new regulatory period.

Non-regulated business contributed for a negative EUR 3.6 million, as the business is poised to deliver results in the last quarter of the year. And finally, our focus on the cost efficiency drove a reduction of costs worth around EUR 20 million. On the back of our sound delivery, the visibility we have over the coming weeks, as well as the managerial actions we have put in place to tackle headwinds on traffic, we are confident to reach the 2025 guidance for EBITDA.

Moving now to Slide 7 on the profit and loss statement. D&A decreased by EUR 8.8 million to EUR 73.6 million as the negative impact from provisions of EUR 3.6 million. It's offset by the reduction in depreciation due to full depreciation of some assets. Net financial expenses of EUR 6.2 million show an improvement of approximately EUR 1 million, mainly due to lower financial expenses linked with the balance actualization mechanism and lower interest rate on debt. But this effect partially offset the higher financial expenses related to the first tranche of the IEB (sic) [ EIB ] loan. Net result amounted to EUR 66.6 million, marking a significant increase compared to first half of 2025.

Let's move to cash flow and net debt on Slide 8. Net debt for the period is equal to EUR 205 million, down by EUR 53 million or 21% versus December 31, 2024. The reduction is mainly associated with the high cash generation capabilities of the business. Operating cash flow amounted to EUR 251.5 million, adding around EUR 155 million in the third quarter, marking a 1.3x increase versus 2024. Free cash flow for the period was equal to EUR 197.6 million, confirming the high generation -- high cash generation profile of the company and underpinning the expected level of free cash flow for the full year of EUR 240 million.

And now I hand over to the CEO for some closing remarks.

Thank you, Luca. 9 months results confirm our leadership in quality of service and the capability of the company to successfully manage the airspace in a record growth environment. Our focus on efficiencies is visible and ensures full control and optimization of the [ cost cure ].

Cash generation is strong and accelerated further in the third quarter, bringing us closer to the expected level for the full year of EUR 240 million free cash flow. On the basis of the visibility we have on the rest of the year, as well as the managerial actions we are putting in place, we are fully on track to meet the guidance range that we have upgraded last July despite the headwinds on traffic experienced in the last 2 months.

Thank you. And now let's open the Q&A session.

Thank you. Thank you, Pasqualino. Thank you, Luca. Operator, if you could please open up the line for those that want to ask questions, we are here.

[Operator Instructions] The first question is from Carlos Caburrasi of Kepler Cheuvreux.

Two from my side. First, a clarification related to the punctuality performance bonus. Pasqualino, you've mentioned in the press release that you're very confident you will obtain this bonus by year-end. And if I recall correctly, in July, you mentioned that it would have an impact of EUR 30 million. Could you please clarify if those EUR 30 million were already included in July's EBITDA guidance or if they will be on top?

And second, related to traffic, Q3 has been weaker than expected, and you've passed from being 1% ahead of your [ estimates ] as of H1 to broadly in line by the end of September. Could you please comment a bit more about the moving parts of this and the performance and your expectations for the rest of the year?

Thank you, Carlos. Just give us a second, we'll be there with you.

Yes, Carlos, for what concerned the bonus, yes, there was already in the guidance, the EUR 30 million were already in the guidance. Upgrade, actually. So yes, the answer is yes.

For the second point, we have seen in September, the whole September, a slowdown of national traffic, there will be a slowdown of the national traffic. But we are waiting for October data just to see what could be the real effect. But at the moment, we are quite confident to reach for en-route, the margin, the target that we have given. So the 6.2 for us is not increase of traffic versus '24 at the moment is still confirming.

The next question is from Aleksandra Arsova of Equita.

The first one is maybe a little bit of color of what you expect in 2026 on the cost side since you've been very confident on the evolution until now. So maybe can provide some color on what is the growth of your cost base you expect in the next year? And linked to this, if I remember correctly, you mentioned that you expect to hire 400 new people, new controllers. So when these hirings are going to take place, just to know how to model them, whether in 2026 or even beyond?

And the second one on M&A. Again, if I remember correctly, recently, -- a few months ago, you mentioned some M&A coming potentially in the second half of 2025 in the non-regulated business. So any update on this?

Thank you. Thank you, Aleksandra.

Okay, Aleksandra. So for what concerned the first question about the cost evolution, 2026. Now we are in the phase of budgeting, so we are finalizing our budget. I can anticipate that we are fully under control, the cost level. So what we are trying to do is not only to push on the cost efficiency in 2025, but also the forward-looking in 2026 will be, I would say, quite good and quite aggressive.

But you should wait, see a couple of months. We'll give you more detail for sure when we present the full year. In March 2025 full year, we will give probably some other information in the further month as we will close the budget process.

For what concerned the assumption -- sorry, the hiring people in the budget, in the future budget, still, we are looking -- we're checking what is in the field. In the business plan, we had already a number, it's around 86 people. Technical, actually, and controllers. But it's something that we will finalize in the budget in the next weeks.

If I may just add one thing, always taking in consideration when we get people inside, most of the time with people that go on retirement. And people who go through retirement who can -- has a quite higher salary. So the net impact as we are seeing this month actually is positive. So don't look only the number of people coming, the new hiring, but just the total. So should wait a couple of weeks to have a full picture and a full impact of this double effect to measure then,, the real impact of the hiring of new people.

On M&A, we are progressing well in the discussion with 2 targets in the drones business. We are aiming to get approval from the Board on the transactions by year-end.

The next question is from Luca Bacoccoli of Intesa Sanpaolo.

Two questions from my side, the first one regards the full year '25 guidance. So you are reiterating the range updated in July. So I was wondering whether with the lower traffic growth in the last few months, you are now looking at the lower end of this guidance range? And related to the traffic prospect, Eurocontrol, on the October update release, weaker growth for this year and also on 2026. So I was wondering how do you see traffic evolving next year?

And the other question regards the contract you signed with the -- in Malaysia. I'd like to know if you could provide us with more details on this contract in the remote control tower in terms of revenue stream that we should expect this year or maybe starting from 2026? Thank you.

Thank you, Luca.

Okay. So for what concerned the first question, yes, the traffic is a bit lower, as you said before. We see that in our guidance for that. We are pushing the cost, actually, so we are in part of the range of the traffic. But on the other side, we are pushing a lot on the cost savings. So we probably may overperform on that area. So still, the EBITDA impact could be, at the moment, even neutral of the lower traffic. So let's wait a couple of months to understand how the traffic will go also in October, November and December. But we have a good level on costs, good optionalities on cost side that we are looking at and managing.

For what concerned the traffic, Eurocontrol, yes, said 5.6% there for en-route. At the moment, as you know, we have 5.9% as year-to-date. We believe that by the end of the year, maybe Eurocontrol would have been a little bit to -- with a -- looking for the English name -- a little bit too prudential, conservative.

So at the moment, as I said, 5.9% is year-to-date. A range around 6 to 6 point something, that could be in the -- I mean, at the moment, what we have in our mind. Let's see what will be October, November, December in terms of traffic volume, and we can be more precise.

Okay.

2026, at the moment, I don't know if that was part of the question. We see confirmed, the 3% that is more or less the one that Eurocontrol also have shown. So we don't see a particular impact in the next year at the moment.

On digital tower in Malaysia, the project has been kicked off at the beginning of November and will have a duration of 4 years. The contract is worth around EUR 5.1 million for us. Out of this amount, cash-in will happen in 2026 and 2027 for more than 95% of the total, and the remaining portion will be split equally between 2028 and 2029.

There are no more questions registered at this time.

Okay. So if there are no questions, I think we can close up the call. So thanks for everybody who have attended the call. Thanks to our CEO and CFO, and have a great day.

Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.

Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the ENAV First Half 2025 Results Conference Call. [Operator Instructions] At this time, I would like to turn the conference over to Fabrizio Ragnacci. Please go ahead, sir.

Thank you, operator. Good afternoon, ladies and gentlemen, and welcome to the first half 2025 results presentation. The presentation will be hosted by our CEO, Pasqualino Monti; and our CFO, Luca Colman. In the presentation, we will provide some highlights of the period, and then we will walk you through the operational and financial performance of the group. Following the presentation, we will have the usual Q&A session.

Before we start, let me remind you that media can be connected to both the presentation and the Q&A session. Thank you. And now let me hand over to Pasqualino.

Thank you, Fabrizio. I will start with the key highlights of the first semester of 2025. Traffic remained strong also in the second quarter. En-route service units for the first half are up by 7.3% year-on-year, around 1.1 percentage points above planned forecast. Business performance was solid, mainly driven by the core regulated business, which recorded net regulated revenues up by more than 2x versus the first quarter, driven by the recurring seasonality of the business. The group continued to deliver on cash generation. Free cash flow reached EUR 53.5 million, marking a twofold increase versus both previous year and the first quarter of 2025. In light of the performance achieved so far, the visibility on future deployment for both the regulated and the nonregulated businesses and most importantly, the managerial actions to drive efficiency, we can raise the guidance for 2025.

Let's take a closer look to the new guidance for 2025. Last April, we shared with you the path to deliver a stronger ENAV in 2029. Based on the delivery achieved so far and on the visibility we have for the next 6 months, we can today upgrade our targets for 2025. Revenues, EBITDA and net income will be driven up by traffic trend ahead of planned projections. The excellent operating performance, which enable us to manage record levels of traffic with almost 0 delay. And finally, the focus on cost efficiencies. The new targets have been defined as a range. There are multiple variables at play, and we will monitor the evolution of the key drivers in the coming weeks and months. Luca will elaborate on this later on. And now I hand over to the CFO for the financial highlights.

Thank you, Pasqualino, and good afternoon to everybody. Let's start by deep diving on traffic. As mentioned by our CEO, traffic performance was very strong in the first half, confirming the growth trajectory observed in the first quarter of the year. En-route service units up by 7.3%, recording the strongest performance amongst the main European countries included in the peer group. As said, this level is currently ahead of the growth embedded in our business plan by 1.1 percentage point. Terminal grew by 4.4% versus the previous year, mainly driven by international flights, which accounted for almost 70% of the total. As we enter the third quarter of the year, the record growth experienced in the semester position us optimally toward year-end.

Total revenues reached EUR 447 million in the first half of 2025, down by approximately EUR 14 million versus previous year as the solid operating performance is offset by dynamics on balances. Core business was strong, mainly driven by en-route with revenues up by 17% year-on-year, offsetting the negative impact associated with the reversal balance N-2, worth almost EUR 47 million. Let me remind you that balance N-2 reversal is a cash item for the year, but is neutral at the revenues level.

As a result of the strong performance in the core business, net regulated revenues recorded a positive result of EUR 11.7 million, up by 2.2x versus the first quarter of 2025. Revenues for the nonregulated business were stable as the commercial activity for the year is more tilted towards the second half of the year, in line with historical trend for this segment. Balance for the period accounted for a negative EUR 25.9 million, mainly driven by the balance accrued in 2024 related to inflation, which has been reset in 2025 for the start of the new regulatory period, impacting for minus EUR 26 million. The impact of the balance associated with the cost recovery scheme for Terminal Zone 3 accrued in 2024 that was for EUR 4.3 million, which is expected to be reabsorbed as the seasonality of the business is set to generate positive returns for airports under the pro forma charges on Zone 3. Lastly, the negative balance worth around EUR 3.3 million associated with the delta between the level of cost of Eurocontrol included in 2024 tariff and the actual cost of the agency in 2024.

Moving to costs on Slide 6. Total operating costs reached EUR 378 million, up by 4.5% versus previous year, driven by the increase of both personnel and operating costs. Personnel cost is up by 4.5%, mainly driven by the increase in fixed salary, mainly driven by a contractual salary inflation adjustment that was active from July 2024 and the increase of the variable component associated with the growth of traffic volume. Other operating costs, as already experienced in the first quarter, are up mainly due to an increase in energy costs.

EBITDA came into EUR 68.8 million as a result of a solid operational performance in a growing traffic environment. The robust operating performance is highlighted by the increase in net regulated revenues, which at EUR 11.7 million mark at a 2.2x increase versus Q1 2025. As already commented, in the first quarter, the result is impacted by balanced dynamics and in particular, the absence of positive balance generation in first half 2025, which is the first year of the new regulatory period before -- it is worth to highlight that in the second quarter, we recorded a negative balance of EUR 3.3 million associated to the variation of Eurocontrol costs for 2024. The impact stemming from the change in terminal zones that decreased from Q1 2025 and will rebalance mainly in the third quarter, in line with the seasonality of the business. Based on this result and on the visibility that we have for the second semester, we have upgraded our EBITDA guidance for 2025.

Let's take a closer look to the key drivers of EBITDA guidance upgrade. The revision of our guidance for 2025 is predicated on operating performance and managerial actions. Here are some main drivers. Higher traffic volume ahead of expectations. The first semester 1.1 percentage points higher than the figures included in the performance plan. For year-end, we believe that the traffic growth will land in a 7% area. Let me remind you that our plan assumes 6.2% growth in 2025 and then 1 percentage of the incremental growth corresponds to around EUR 6.5 million in additional revenues.

The second point is the quality of service. On the basis of the current levels of punctuality, we are extremely confident to obtain the full performance bonus, which is worth around EUR 13 million for en-route. And then focus on efficiency. Overall costs in the first 6 months increased by 4.5% year-on-year. And based on the projected efforts to handle traffic -- higher traffic, we see the increase on a full year basis to reach around 7% versus the 8.8% embed in the strategic plan. These operational tailwinds will allow us to offset the negative impact of a delta balance related to 2024, not embedded in the plan and worth roughly EUR 6.5 million. like the one associated with the Eurocontrol costs described earlier and another potential regulatory adjustment currently under discussion with the regulator. All the above and in light of the potential range in outcome for each of the variables bring us to a new range of EBITDA guidance for 2025 between EUR 245 million and EUR 253 million.

Let's now move to the profit and loss. D&A decreased by EUR 8.2 million to EUR 49 million as the negative impact from provisions of EUR 2.5 million is offset by the reduction in depreciation due to the full depreciation of some assets. Net financial expenses at EUR 4.5 million remained broadly stable versus previous year. Net result was equal to EUR 7 million, up from minus EUR 29.3 million in Q1 '25, in line with the business seasonality.

Now let's move to the cash flow and net debt on Slide 10. Net debt for the period is equal to EUR 350 million, up by 35% versus December 31, 2024. The increase is mainly associated with inflow of EUR 96.2 million, up by EUR 29.4 million, cash CapEx of EUR 42.7 million and the payment of dividend in June '25 for EUR 146.2 million. Free cash flow for the period at EUR 53.5 million shows a significant increase, nearly doubling year-on-year and versus Q1 '25, confirming the solid cash generation of the company.

And now I hand over to the CEO for the -- for some closing remarks.

Thank you, Luca. We are managing record levels of traffic volume in Italy, ensuring an operating performance that position us as the most efficient service provider in Europe. The leading operating performance is coupled with a focus on efficiency, which allowed us to identify opportunities to improve our cost curve already in 2025. Cash flow generation continues to be strong, a priority for our strategy and the level of delivery achieved so far and the visibility on the next 6 months are the basis for the upgrade of the 2025 targets. And now let's open the Q&A session.

[Operator Instructions] The first question today comes from Carlos Caburrasi with Kepler Cheuvreux.

Hi, Pasqualino. Hi, Luca. Thank you for the presentation and for taking my questions. Two quick ones from my side. You're upgrading your 2025 EBITDA guidance by EUR 20 million to EUR 28 million due to better-than-expected traffic, cost efficiencies, et cetera. So can you confirm if it's fair to assume that something similar could be expected for your 2029 target of EUR 361 million in EBITDA by 2029? And one additional question is related to this one. I think you've mentioned, Luca, that 100% of the bonus is around EUR 13 million. Then that EUR 13 million in bonus plus a maximum increase of EUR 13 million in revenue from EUR 1,015 million to EUR 1,028 million is already EUR 26 million higher EBITDA. So the high end increase in EBITDA is EUR 28 million. So you expect maximum EUR 2 million in cost efficiencies?

Thank you, Carlos. Give us a second, then we'll come back with the answers. Thank you. Thank you for your patience.

Okay. Sorry for what concerns the first question about the EBITDA in the future, we believe that this strong increase that we are having now and our capability to get the bonus will probably continue also in the future. So let's wait the end of the year, but we believe that could be a very positive ground to have a better, I mean, forecast also for the future. So we are not updating now our forecast for -- I'm sorry, our guidance 2029, but we believe that in the future, that will be definitely positive.

For what concerns the guidance, let me come back to some number. We believe that the traffic impact is 1%, it will be more or less, say, EUR 6.5 million increase of revenue if it will be confirmed by end of the year. The bonus is around EUR 13 million. And then you should consider a delta balance, we say a negative balance coming from the 2024 adjustment that should be around EUR 6.5 million. So this is a negative adjustment, so, to be taken out. And then so if you consider our EBITDA guidance, you should consider probably a cost performance efficiency that will be around EUR 13 million to add to the revenue impact. So if you put all these 4 figures together, you will land to the guidance that we have given.

Very clear.

[Operator Instructions] The next question comes from Amal Patel with UBS.

Hi, Luca. Hi, Pasqualino. Thanks very much for the presentation and for taking the time to answer my questions. Three from me. First one, please, can you provide an update on the wage negotiations with the union? Has there been any progress there or anything incremental? Secondly, can you talk a bit about the phasing of the nonregulated contracts? I mean, looking at this year and the performance so far, we've seen broadly flat revenues in 1H, which assuming the EUR 52 million target for 2025 would hold, it would imply around a 10% growth in 2H. Does this still hold? And can you talk about the phasing of these contracts in 2H? And I guess, what to expect midterm, both from the existing operations as well as potential M&A, how that will be phased? And then thirdly, could you just remind us the COVID balance? How much is left to pay for both the terminal and the en-route? And how is this expected to be phased and over what period?

Thank you, Amal. As usual, just a few seconds of patience, and we will be back with you. We are back. Thank you. Thank you, Amal. We will take the questions -- sorry, we will go with the answers right now.

Okay. Going with the LIBOR contract, the question there is no formal deadline, as you know, for the renewal of the LIBOR contract. The negotiation, actually, we expect to end within the end of this year and the beginning of next year. I say we don't see any particular pressure or issue at the moment. The relationship is very good, no strike. So we believe that at the moment, no issue is -- there is no issue. Pasqualino, maybe you want to answer to the second one.

Yes. Yes. So on the nonregulated business, commercial efforts are more in the second half of the year. The same dynamic happened also last year. So the target is confirmed. After a record 2024, we set a consistent path to 2029, which included moderate growth in 2025 based only on organic deployment and taking into account also the necessary hirings, which are going to be fundamental to support the projected revenue growth for the coming years.

Okay. For what concerned the #3 question, the balance of traffic balance, the COVID traffic balance. I mean the total amount, I don't have all the figure here with us, but the total amount was EUR 550 million still to cash in from business plan period. So from 2025 through 2029, we will -- we are planning to finish all the collecting by 2027. So we still have '25, '26 and part in 2027 as we are collecting from 2023. Say that, so you should divide this 50-50 between these, let me say, 3 years, '25, '26 and '27. Is that enough detail or you need more?

Thank you. That's very clear. Thanks.

Okay.

You should consider the other balances, inflation balance and all other balances that we will cash in the next years.

[Operator Instructions] The next question comes from Nicolo Pessina with Mediobanca.

I just wanted to ask if we could have more color on the OpEx savings that are driving for this full year '25 guidance improvement. I mean, half of the improvement at EBITDA level comes from cost savings. So I just wanted to understand what is working better considering that the guidance was provided only 4 months ago.

Second question on the performance bonus. If I understand correctly, EUR 13 million this year, if we assume that this is confirmed also for the rest of the regulatory period, that should be EUR 65 million in total, which would bring the 2029 EBITDA to, I mean, the target above EUR 420 million. So is it a reasonable assumption? And maybe an update on the M&A strategy in the nonregulated business. It looked like the closing of a deal back in April was imminent, but we haven't seen anything so far. So I'm wondering if anything is happening on this front.

Thank you. Thank you, Nicolo. Just again, a couple of secs on our end. Thank you. Thank you. Thank you.

Okay. For what concern costs, just consider that the costs that we have presented are the one we have just negotiated with the regulator a couple of months before. So the one we have presented in 2025. So that the day after having the business plan approved, what we did, we just work on how to reduce our cost. Let me say the more the impact that we expect to have, it will be more on external costs other than personnel staff costs. So what we are optimizing is all costs around. So from the review of internal procedures and the process to more practical solution like a higher share of purchasing made through tenders. We are doing tenders to every purchasing. And this will allow us to optimize costs on several supplies. So we are just right. We are tackling cost -- all the costs of the company. As you can imagine, as the traffic is increasing, it will be more difficult with the personnel costs, but for us much easier with all the other external costs.

For what concern instead the performance bonus, you should consider this is always 2% of the -- it is more or less EUR 13 million. That is going to increase in the future because this is 2% of the cost base presented in the performance plan for each year. So as -- actually, the revenue will increase, the cost is increasing also year after year, this will slightly increase year after year. This -- you shouldn't add this year after year because it just -- every year is EUR 13 million or whatever is the value. So we will consider at the beginning of each year if and we are going to get the target 100% other than it depends on the traffic, it depends on several things. So now we are quite confident. I mean, we are definitely confident in 2025, and we believe that we can get also for the next year. From M&A...

On M&A, we expect to have a material progress after the summer break.

There are no more questions registered at this time. I'll turn it back over for any closing remarks.

Yes. No, actually, there is a final question that we received offline. And the question is essentially linking the upgrade into the guidance with what the company intends to do with the dividend.

Yes. As said during the strategic plan presentation, shareholder remuneration is one of our priorities. But first, let us work on 2025 because there are many variables at play. Once we will have full visibility on the landing point for the year, we'll consider -- we are clearly open to consider how the incremental result can contribute to shareholder remuneration.

So thank you, Pasqualino. Thank you, Luca. That concludes our earnings call. As always, the IR team is available for any questions or follow-ups that might be necessary. Thank you.

Thank you for joining. The conference is now over. You may now disconnect your telephone.