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Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the ENAV First half 2026 Results Conference Call. As a reminder, all participants are in listen-only mode. And after the presentation, there will be an opportunity to ask questions. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Stefano Gamberini, Head of Investor Relations of ENAV. Please go ahead, sir.

Thank you, and good afternoon, everybody. My name is Stefano Gamberini and I'm the new Head of Investor Relations. So welcome to ENAV's First half 2026 retracts presentation. which will be hosted by our new CCO, Igor Biasio; and our CFO, Luca Colman, they will walk you through the group's operational and financial performance for the first part of the year. Then following the presentation, we will have the usual Q&A session.

Igor, over to you.

6 Thank you, Stefano, and good afternoon, everyone. Last May, the shareholders meeting appointed a new Board of Directors with Sandra Pappalardo Chairman and myself as the Chief Executive Officer; I am honored to take on this more challenge and pleased to be with you today for my first results presentation as another CEO. As you know, our group continues to be recognized as best-in-class among European are traffic control providers.

Our unique ability to manage higher pace flexibility allows us to accommodate additional flights and support the European aviation system when needed. We consistently achieve industry-leading punctuality significantly exceeding the route target set by the European Commission, including in the first half of 2026. In this regard, I would like to share what I consider to be a strong indicator of our performance. As certified by the European Network Manager in the first half and have accounted for around 30% of the overall saving delays in en-route traffic across the whole European network. My priority as a CEO as to preserve and strengthen ENAV's leadership position in Europe while continuing accelerating growth in addition businesses.

We will leverage our deep expertise in the air traffic sector as well as our robust capital structure to capitalize on the new opportunities and generate additional value for all stakeholders. Before we turn to our financial results, I would like to emphasize that I am supported by an outstanding management team in executing our strategy. This includes the group's most experienced operational executives, such as our COO, Maurice palette and our Chief Technology Officer, in sensor as well as our CFO, Luca Colman. In addition, we have recently strengthened our management team with several highly accomplished executives.

Among them, I would like to mention Lucero, our new Head of Strategy and Business Development, who brings more than 30 years of experience in strategic leadership roles at Philips will work higher Europe and some private equity funds. Let's move now to the key highlights of the first half of the year. Traffic remained strong in the first 6 months with route service units up 6.3% year-on-year. At the same time, we delivered a route totality performance significantly better than the challenging targets assigned to us. Our financial performance was solid as well with EBITDA up 21% to EUR 83 million, and net profit nearly tripling to EUR 20 million.

During the first half, we also completed the acquisition of IB Group, a leading company in the fast-growing drone services sector for critical infrastructure. Looking ahead, given the strong performance delivered so far and the positive traffic trends we are seeing during the peak season, we are confident in achieving EBITDA growth of 6% to 8% in 2026. The while continuing to generate solid free cash flow of around EUR 290 million. Moving to the next slide, I'd like to highlight the main achievements of the first half. In March, we completed the acquisition of an 85% stake in IB Group a highly innovative company that delivers advanced engineering services for the inspection and life cycle management of critical infrastructure, helping customers improve safety, efficiency and net liability.

Although relatively small in size, we believe this acquisition brings significant strategic value. Across Europe, aging infrastructure and increasingly stringent safety and the regulatory requirements are driving demand for advanced inspection and monitoring services. The addressable market is broad and diversified, including bridges, highways, railways, ports, logistics facilities energy infrastructure and many other critical assets. Hydro integration is a clear example of our strategy to expand into addition to high-value markets where we can leverage our unique expertise in aerospace management operational safety and loan services. Combined with our strong presence in Italy and growing international footprint, we believe we are well positioned to accelerate IB's growth and unlock significant value over tax.

Furthermore, shortly after the end of the reporting period, I am pleased to highlight another significant achievement on July, we successfully disposed of our 8.6% stake in Iran, generating proceeds of USD 60 million and further strengthening our capital structure. And now I hand over to our CFO for the operational and financial highlights. Please.

Thank you, Jo, and good afternoon from my side as well. The first half of the year reported a positive traffic volume performance, confirming Italy as the best performer on the paper go with a 6.3% increase year-on-year, members pay was plus 3.6% French plus 3.3% U.K. 2.9% in Germany [indiscernible]. We maintain outstanding trajectory of traffic growth, improving the structural strength and attractiveness of Italian routes even with a challenging geopolitical scenario, and route trend was largely driven by overflight and international traffic, up, respectively, by 7.8% and 6.5% year-on-year, which offset the softer performance of initial profit.

Terminal traffic grew by 3.5% year-on-year, showing positive results across both charging zones, strongly driven by international of lines. Let's move now to the economic results, starting with revenues. Consolidated revenues grew by 7.4% year-on-year, underpinned by the strength of our regulated business and the positive performance of nonregulated activities. Looking at the regulated business, net regulated revenues increased by EUR 27 million, primarily driven by the solid growth of and route and the positive contribution from terminal, balance and minus 2 impacted positively for almost EUR 7 million as a result of a negative balance and minus 2 for EUR 93.6 million in H1, EUR 25 million and a negative EUR 86.6 million in H1 '26. Not regulated business reported an increase of almost EUR 6 million mainly driven by new commercial activities and also the positive contribution of EUR 1.4 million from IV company. The balance for the period remained broadly stable, and was negative for around EUR 3 million. Moving to costs on Slide 6. In the first half, 26 total operating costs were EUR 397 million reporting 5% increase, primarily driven by personnel costs that reached around EUR 329 million, up by 6.2% year-on-year.

Personnel cost dynamics was driven by 2 main components. First 1 is the growth in the fixed component, around EUR 11 million due to the contractual wage adjustment mainly linked with inflation and agreement signed with trade unions and higher variable comp as another EUR 2 million, mainly driven by higher operation over time that was required to support the increased traffic model. tress tax.

Regarding other operating costs, we recorded an increase of 4.2% and mainly due to expenses for the development of not regulated business, EUR 1.8 million, which are fully supported by the more than proportional increase of related revenues. Then we have a higher euro control contribution that you remember, it is passed through our P&L and our tariff and other personnel expenses linked to the increase of traffic. These were partially offset by lower utilities expenses. Moving on Slide 7 on the EBITDA dynamics. We delivered a strong EBITDA pro forma of EUR 83.2 million, up approximately by 21% year-on-year. That was driven by the positive performance of the core business, which factually leverage the higher traffic volume we discussed earlier and the impact from not regulated less boosted by the execution of ongoing international projects.

And the new contract secured in the first half, I remember India and Malaysia Bowl as well as the AD contribution, there was more or less EUR 1.4 million. Margin expansion was successfully driven by high traffic growth, combined with effective cost control, including a staff contract renewal in the last month, substantially in line with the budget expectations, reinforcing our confidence in achieving the 2026 financial targets.

Moving now to Slide 8 on the profit and loss statement. G&A and provisions increased by 2.7% year-on-year, mainly due to higher amortization in the period. Net financial expenses improved year-on-year decreasing by EUR 3.5 million. It was mainly due to less debt and lower interest rates. Group net income reached EUR 20.1 million, almost 3x versus the first half of 2025. Let's move to cash flow and net debt on Slide 9. Operating cash flow remained strong at EUR 112 million, up more than 15% from first quarter -- for 25%. Capital expenditures remained broadly stable at EUR 44 million.

As a result, net debt increased by just over EUR 100 million at the end of June, mainly reflecting the EUR 153 million dividend payment to our shareholders. Importantly, free cash flow improved by 22% year-on-year to EUR 65 million confirming the solid underlying cash generation of our business. Let's now move to the full year guidance. Robust H1 traffic performance and positive summer and demand trends underpinning confidence in the full year outlook, notwithstanding external market and sentences. So we expect full year and new traffic growth to be slightly below 6%. OpEx increased by in H1 and reflecting the seasonal impact of the managing higher traffic volumes during the peak summer period are expected to remain well controlled growing by around 6% for the full year.

As a result, we expect full year EBITDA growth in the range of 68% increase supported by resilient traffic performance and continued operational discipline. Cash flow generation is expected to remain very strong throughout the year. We, in fact, are upgrading our previous guidance to EUR 290 million to reflect the strong business trend and the disposal of the real state of our EUR 27 million cash in 2026, 50% of the disposal price, partially offset by the strategic investment in IDUs. And now hand over to our CEO for the closing remarks.

Thank you, Luca. Thanks to our unique positioning Traffic remains strong in H1 2026, growing by more than 6%, significantly outperforming in the European average, which is more or less Furthermore, in July, the record for daily flight movements was broken 4x, reaching a new all-time high of 8,555 prices on August 1. The strong traffic performance, coupled with the cost trend broadly in line with budget, drove a high double-digit growth in H1 2026 EBITDA.

Despite the ongoing uncertainty caused by the confidence in the Middle East and the potential impact of jet oil price volatility, the resilience of traffic in the first half of the year together with the encouraging trends seen during the peak summer season, gives us confidence to remain cautiously optimistic about the full year traffic outlook. So we expect to achieve EBITDA growth of 6%, 8% and generated strong free cash flow of around EUR 290 million this year.

Finally, let me announce that we will start working on our new industrial plan in the coming weeks and expect to present our new business plan in the first half of 2027.

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

[Operator Instructions] First question is from Nicolo Pessina

I would have 2 on OpEx. The first 1 is on the 2026 OpEx outlook, with a 6% growth rate that implies an acceleration in the second half of the year from an already high base in 2025. Moreover, the 2% sale increase implemented in July 2025, will no longer impact. So I'm wondering if you can give us some visibility on the details behind this 6% increase in the the full year guidance.

Second question on the 2029 OpEx target that was indicated in the latest business plan at EUR 838 million. Is this number still valid considering that we will be already above EUR 800 million by the end of 2026. And maybe can you remind us what is the impact of an additional 1% of profit on OpEx? And what is your assumption in terms of savings from the remote control towers and maybe I had a question on the dividend outlook. Do you see any potential upside to the official guidance of $0.29 given the cash in from Iran.

Okay. No, I will take the first -- for what concerns cost trend in 2026 and -- this is a -- the expected 3% increase in OpEx in 2016 is probably in line with the planning assumptions that was underpinned at the end 2029 strategic plan.

It is important to I guess to be outlined on the core elution a -- so as you remember, we said also in the first quarter, the plan did not envisage align our cost growth trajectory. I did anticipate a higher increase in the initial year that was followed by the flatter trend towards the end of the period, driven above from the benefit from the implementation operational project as we said also in the fourth quarter, we are right now in line with the costs in 2026 that we are planning in our budget and our plan -- actual plan. .

We foresee to see the trend -- a flatter trend by the end of the plan of 2020 and 2029 thanks to the implementation of remote tower consolidation ACC. And the impact will be on the OpEx exactly in the last few years in the plan. So we are going to -- right now, we are in line.

Coming to the second part of the question. So thank you for precise dividend policy. Just 2 elements into messages. The first 1 -- so first of all, considering the strong result reporting in this half of the year, our solid cash flow generation reflected in the full year '26 guidance for free cash flow up to EUR 290 million. I believe that the existing dividend policy through 2029 remain firmly in place. So first message is this one.

Then coming to the second part of the second question, so we be higher on disposal I continue to see the existing dividend policy through 2029 as an important pillar of our shareholder remuneration framework. But I want to add also that any final decisions regarding the use of our financial flexibility will be taken in the context of the new business plan, which we are going to learn people in the next weeks and months.

Okay. Many thanks. As a quick follow-up, can you remind us what is the impact of any additional 1% traffic on OpEx and the savings from the remote control towers that you expect with -- by 2029. Nicolas, what concerned the OpEx increase is not automatically associated to increase our traffic. Remember that an increase of 1% of traffic, more or less is in the year is around EUR 6 million, EUR 6.5 million if we are in a 2% band. For what concern costs, it depends when this increase is done. It is during the summer, we normally manage and cover this with a higher, I mean, extra time and flexibility, asking accessibility to our control also ask not to go on vacation actually to use the vacation.

This is the cost we believe, is more or less the delta between the 5% that we closed in terms of in H1 in terms of cost, OpEx cost and the 6% foreseen by the end of the year. That's what we believe is we need to cover the increase of traffic. So you should put this on top, not only the 1% increase now in our forecast, in terms of traffic and in traffic, we almost have 2 percentage points higher -- the traffic that we have planned is 2% points higher than the planned 1 in the tariff that I remember is 4.1% increase versus 2025. Benign for you -- there was another question to remote tower -- just to give you 2 messages on this point.

The first 1 is that we are in line with the industrial plan. So brine are running 2 remote tower. So Bringas well in Gotalaswell as 2 airports are managed by with remote controlling tower in rand related to the FX and the cost in the future, let me just tell you that we are working now on the new strategic plan as soon as we are going to see we will be able to provide visibility on the expected tractors not only for this pillar, but for all the pillars, the old 1 and the new 1 of the new plan.

So we are just wait some use the clearer picture for the future about these effects of the new and the

Next.

Next question is from Alexandra Arsova Equity.

Three questions from my end. The first 1 is a follow-up on the OpEx side. So can you remind us what is the level of salary increase determined by the label contract in place due to inflation, not only in 2026, but also in the coming years. and when the labor contract is going to be renegotiated or renewed. And again, on personnel cost, at the end of 2029, given the current assumption you have do you expect the net head count to be lower or higher vis-a-vis 2026.

Then the second 1 is on the capacity bonds. So what is the level of bonus you are including in your full year 2016 guidance? And the third one, if you can just provide us the level of balance at the end of -- you expect at the end of 2026 that will remain to be recovered in the tariff in 2027 and beyond.

Okay. In a long list. I'll try to -- we try to go through these -- for what concern, okay. The staff cost, we recognize inflation, as you know -- I mean, it's a negotiation of the of the recognition of the inflation at the end of the period after the 3 years when we check what is the real inflation and the 1 that was the planned 1 in the contract.

And so what's happened in the first of January, the effect is around 2.5% the part related to the inflation adjustment related to the last 3 years of inflation that was not recognized to the personal cost. On top of this, so talking about the future, that every July, we plan to give to our controller to our staff. What is the so-called agreed inflation, the estimate inflation for the next 3 years that we assume is a 1.5% increase each year. And so the next increase would be in -- yes, actually, it was in July, this July.

The next 1 will be and the last one, 2028 is 1.5%. Then by the end of 3 years, we check what is real inflation versus the contracted one, the plan on, and then we negotiate eventually the delta. This for will concern inflation. For what concerns the trough in the FDA in terms of controller for the traffic, we had I mean, actually, as Igor said, we are reviewing the business plan, also taking into account what will be the traffic that we are going to manage.

So actually, we are now analyzing what could be the effect in term of this increase of traffic that we're having now, and we expect also in the future years that could be higher than the ones in Apple business plan. And so we are reanalyzing the number of people that we may need or not. So we will give you more information right after the presentation, I mean, during the presentation of the business plan.

For what concerns the bonus, right now, we are considering also the result in the first half and first half, we believe that if the things remain stable, we are able to reach the maximum level of the bonus, the punctuality bonus. So right now are EUR 13 million. were concerned, the fourth one, just let me check. I'm not sure that I remember the question.

The balance .

Okay. That was the balance. So the balance this year, how much is around EUR 190 million. So it's EUR 150 million for good and the rest is the other the terminal. So the next year 2027 tariff between the 3 tariffs, so Terminal on 1Q and [indiscernible], we are talking about EUR 150 million, more or less EUR 146 million, actually. .

And then the rest is over -- I mean, we are talking right now more than EUR 40 million. That is -- then it depends on what will be the generation part now in 2026, that at that we will guess in 2 years. I guess we give the answer to all your questions.

Next question is from Francesco Sala, Banca Akros. .

The first 1 is on the robot revenues. I wonder whether you can give us an outlook for the second half of the year, whether we should keep on an acceleration? And secondly, if you can give us a basis indication for 2027 also on the regulated revenues. And finally, I wonder whether you can give us an update on the latest available data you have, you can share with us about traffic in the last few weeks. Thank you.

Okay. So thank you for the question, we start answering the last part of the press is traffic in July, and then I leave the floor to Luca for the first part of the question. So as I already told you in July, the record for the lift movement was broken or times and then we reached the August first, the new record, the rural time record with a peak of 8,555 flights. The latest ligate showed traffic up by around 6.7% year-on-year in terms of that movement. So July is higher than the last months of the first half. So we see a continued increasing trend. And then I leave to look at the floor.

Thank you, Igor. Talking about the revenue in 2026, our guidance. As said by Igor, we expect to have an increase of traffic by the end of the year, around just a little lower than 6%. In terms of not regulated business, we confirm our target it is around EUR 62 million, as we have already said. So we confirm it. If this all together, you can get -- looking what is the guidance we have given, we are talking about total revenues of roughly 100 and 8,890,000,000 more or less of the revenue, considering also the bonus contains, or looking to spare the 2027 revenue, we haven't disclosed any information because right now, we need to check, first of all, what will be the traffic that we will consider, as you know, even the euro controls waiting for to update the forecast, and they will be probably in October. .

So after that and together with our budget, 2027 budget, we will also disclose some more information about what is the traffic? I just remember that the traffic that is now bundled in the tariff is a 3% increase in 2027 versus 202026 planned traffic, no autorack, is it okay?

Thank you. Next question is from Amar Patel, UBS.

Congratulations on the new role. Three questions on my side. Firstly, on the new free cash flow guidance. So if my math is correct, the new guidance implies EUR 225 million of free cash flow in the second half of the year, which I guess if you exclude the one-off benefit from the North Atlantic disposal gains, that would imply a decline year-over-year. So just wondered whether you can walk us through the moving parts here. I appreciate there's maybe some lower balance reversals year-over-year, but still this seems a little conservative.

Second question, in the release and on the presentation slides, you talk about your updated business plan in 127. Will you be hosting a Capital Markets Day for this event? And can you provide us with a bit more color. You talked about accelerating investments in further technological infrastructure, but anything more than that would be much appreciated.

And then thirdly, last year or so, you've been very disciplined on the cost front. You spoke earlier in your response to 1 of the questions about changes to head count to deal with future increases of traffic. But maybe can you talk a bit more about any AI initiatives you're looking to deploy over the next years and how this could provide a tailwind to costs and help offset future increases in traffic.

So I will start answering the part to the business plan for the future. And then I'll let Luca about the first 1 and the third. So let's say that looking also for the future. So I'm not expecting a new industrial plan not in line with the actual ones. I mean the actual industry plan is a good basis and then we try to leverage it and then continue improving leadership position in the business on across Europe.

So our priority is on will be to consolidate and further reinforce in our leaders acquisition among our mitigation service providers across Europe and across all around the world. And our strategy will be built around a simple principle. So continuously improving the management of Intel are space while maintaining the highest standards of safety. First of all, efficiency and service quality. These are the 3 pillars underpinning the strategy. For sure, we have to continue being flexible granting service excellence and continuing investing in innovation technology. So these 3 pillars are linked and we'll continue to believe. So the main point will be understanding in these months how we can leverage on the Acto plan, creating a new plan that will boost continuously in the future the insiders.

Yes. For what concern, the free cash flow by the end of the year, the EUR 290 million. I understand what you see, but just consider that I mean the main reason is this one. If you consider traffic that we have now in the first half is increase our traffic. Just look at the end out route is an increase of 6.3% as actual volume of traffic that we managed in the first 6 months. We expect by the end of the year to be a little bit less than 6%.

So just a different volume of traffic that we believe that we manage in the second part of the year versus the first one. So that's the reason why the free cash flow that is related mainly to the the revenue, the traffic revenue are a little bit lower in the second part than the first one. also take in consideration that the balance and everything is related to the balance, not the balance reversal that is automatically. But everything is very I mean, by the end of the year, you calculate the real balance that could be a little bit different. This will consider the balance of the year the balance reversal, maybe you meant the balance reversal, this is exactly split between the months depending on the weight of the month in the tariff.

So the 6 months and the second second 6 months. So remember that the amount -- the total amount of balance that we will get in this year is roughly EUR 190 million. So if we have got less now, we will get more because then we have by definition, July and August when the flights are higher. That's the main difference between the first and the second half. welcome the AI, there are several studies that we are doing and the application of ologiconcern our operative area. We will be more precise when we present our new business plan and even with the impact in terms of cost saving, everything will be more.

Next question is from Luca Bacoccoli into San Paulo.

Can you hear me well? So a few questions from my side. The first 1 is for the new CEO. So you said that the priorities are quite clear. And among them is the expansion in the regulated business. So I would like to ask you if you can give us an update on the M&A pipeline because last year, we were discussing several times of 2 new targets.

One of them was completed. So I was wondering if there's any other news regarding the other target that was set last year. Then on the free cash flow, some follow-ups here. The new guidance, EUR 290 million is EUR 40 million above the guidance you provided with the first quarter results conference call. So half of this comes from the M&A or the acquisition net of the disposal cash inflows.

So I was wondering the remaining other EUR 20 million where are they coming from? And let's say, a more on a longer-term perspective, still on the free cash flow generation, the normalized free cash flow generation, excluding the impact of the balance that is going to reduce going forward is between EUR 140 million, EUR 150 million every year. So do you believe there is room for increase in debt level because, for example, because of the M&A already done and also the new contract you signed in the last 2 years.

And finally, the deal in Greece, you announced recently, if you can give us some more color in terms of the financials and the impact on a -- thank you.

So thank you for the question. So I'll start from the part and also reinforcing our position in the regulated market. So what I wanted to to tell you is that I'm not searching to increase in the regulated markets in Italy because we are the only 1 managing this service. So it's not what I mean. But I want to reinforce our positioning as leader of managing the air traffic service in the whole Europe.

So now we are the first 1 in terms of Centrality, in terms of capability to be flexible in designing the space procedures. If we want to be and keep our leadership position, we have to invest continuing in our flexibility in our technology, in our human capital. So this is what I meant before. So we will want to continue to be delivering Therefore, we have to keep our pillars of the old business plan industrial plan, adding new pillars that we are going to define in the next weeks.

Talking about M&A. Of course, as we said in the past conferences, the all the business plan already includes up to EUR 350 million of fire power for the organic growth. Today, it's only more or less EUR 80 million has been deployed, as you said, with the IV Group, leaving significant headroom to pure-value creating M&A opportunities. If the right targets will become available. So we are now looking for opportunities in companies, but the process is still at an early stage.

So we will provide you more details as soon as we have more concrete information. What is sure is that we are looking to adjacent business. So not all kind of opportunities, but only the real senseful opportunities in the business close to our business. Another point important is that the IB Group acquisition was quite small, as we said, compared to whole firepower we have for organic growth. We are going to look not only small companies, but we will be open to evaluate larger opportunities. Luca -- thank you, Europe.

So what concern the free cash flow breakdown, just to give you more color on EUR 290 million guidance that we have given -- as said, the 190 are balance reversal, so the 1 we expect to -- we will definitely not only expect but definitely have from the tariff. The other EUR 20 million increase are related to the net hereon. You know that we have set at Aerion. -- half of this poll are around EUR 27 million, so EUR 27 million cash in that we had just some weeks ago. And we have used EUR 7 million also to buy as group.

So net is the EUR 20 million of cash in and the rest is around roughly EUR 80 million we expect from operations. Then if the traffic will increase even more, actually, probably we will have even a better free cash flow. And I remember this is better than the last year. From operations last year, we had EUR 58 million. Now we are talking about EUR 80 million less that is the volume. The second question was what is the normal value. There is no normal value because you know that is our free cash flow for us because the core business brings free cash flow also depending on the performance that we do in terms of cost savings versus the tariffs that you know at the beginning of the relator period is always will be more time, more sure.

And then by the year after year, if we do better if we increase our capability, manage traffic cost, we can increase this bigger. So just taking into consideration more or less, it would be 80 to give also what we would in 2025. It was 58. I guess to answer Locators.

Yes. Yes. Just a clarification on the upgrade of the free cash flow guidance this year. So if I got it right, is basically the higher traffic growth, which we explained the improvement from EUR 250 million to EUR 290 million, of course, on top of the M&A inflows. Is that right?

If you're asking trait the reason or not M&A impact on this, we just have a very small really more around EUR 1 million from Ari Group Valaris just operative. Is that -- is this a question. No. sorry, yes, this year, the drivers behind the free cash flow is, of course, the reversal of the balance the operating cash flow. And if I got it correctly, the higher free cash flow comes from the fact that now we are projecting the traffic and the service unit growing 6% approximately rather than the 3% -- sorry, the 4% growth that you were expecting at the beginning of the year Definitely, it's a mix between this one, mainly the traffic, yes, versus the planned one. So from 250 to 290 is Aaron plus operative -- I mean, free cash flow, the higher traffic that we meat. Yes.

Next question is from Nicolo Pessina, Mediobanca. .

I have a follow-up question on the 2027 tariff. I understood correctly, you mentioned EUR 160 million of balance in utilization in 2027. -- which suggests to me androtariff broadly in line with the 1 of this year. So is my reason incorrect? Do you have any kind of visibility you can provide us about this?

And maybe another question about regulation. I know we are still very far away from RP but brainstorming meetings are still -- are already underway -- so I'm wondering if there is any proposal for a change in the framework or you would expect at least today, things to remain unchanged?

Okay. Nicolas, we concern the tariff 2027. The the final Aptar is not yet, I mean, approved actually done really. And it will be by the end of 2020 -- sorry, November 20. -- see that that in June is a large committee whether it's the proposal tiff I don't know if they are public or not. I mean in any case, just taking consideration the new tariff for either it will be a little lower by the petition. 2027 target will be lower than for the main reason that the balance reversal is going to be reduced.

So as said, we are roughly EUR 190 million balance reversal in the that we are cashing in. Next year would be EUR 146 million, EUR 47 million. So we have less than EUR 40 million -- sorry, EUR 50 million that now say EUR 3 million that are less -- that are kind of costs that we put inventory to cash in. So that's the main difference. -- welcome, sorry, maybe there was the regulation for the first part of the answer is like now officially the commission just started the cost the so-called consultation asking all the stakeholders, the stakeholders and what could be their feeling the impact the suggestion. So really early, early stage.

Just to add that we are in in coordination with the other big service provider new ages Metra Friday, the CEO of Household Control. -- which is now also the Chairman of the ASIC alliance. So we are all aligned to try to have post the European Commission to continue improving the regulation of our service. So we are working with the peers to to read a good regulation for all of us.

Next question is from Marco Limite, Barclays.

The first 1 is on free cash flow again. just wanted to clarify. Look, you were mentioning 50% of the, let's say, EUR 50 million that you received from the disposal -- did I get that right? And why only 50%, the remaining 50% goes into the next year all -- just if you can clarify on that.

And the second question is on the Middle East crisis because clearly, we have seen airlines are locating traffic away from the Middle East and maybe refocusing capacity into Spain, Europe and so on, and that could be 1 of the explanation why your traffic has been so strong in the first half. Will you -- and maybe that's also why you assume a slowdown in the second half. Will you agree with that or not? -- terms of the free cash flow, just to clarify a little bit better the point. The total deal was for EUR 66 million. .

Just consider that in terms of payment, we first payment of EUR 27 million, that will read just a couple of weeks ago and that is free cash flow in the year. So what concerning is that the other EUR 28 million, we expect to have 1 year time from now. in, I would say, more or less in June, July 2028. That was the part of the agreement. So you just in more or less 50% now and 50% -- in terms of net debt, actually, you have it, but you don't have any free cash flow. -- to the second questions. So let's say -- the answer, let's say, is composed by a mix of points.

So let me say that, first of all, the crisis in the Middle East is not creating us problems in terms of flights in terms of numbers of we are managing. Why we are improving so much is compared with the other European countries. Because as I said in my speech and the initial part of the speech in the first half and have accounted for around 30% of the overall saving delays in the allotted traffic across the mobile network. So -- the reason why 1 of the main reasons why we are increasing so much is that as we are flexible, as we are capable of helping other countries with big problems like France, also about sometimes sustained. We are able to attract to Italy other flights that didn't have to go through Italy.

So we are solving issues and that's why we are improving so much. So middle is crisis is something that we are looking at to understand what can happen in the next future. But until now, we consider us quite safe.

So a quick follow-up on the free cash flow. So we should expect a plus EUR 25 million, EUR 30 million also in 27 million to the free cash flow. So if, for example, we had in the model now goes to 80 million because of that, right? Just to be very, very clear. .

Yes, in 2027 will be under $28 million to free cash flow, but no -- actually, this will not impact the net debt. as it is already impacting now -- is this a financial credit actually. Is that clear? .

Yes, yes, very clear. Telephone. Mr. Gamberini, there are no more questions registered at this time. So many thanks to everybody for joining us in our conference call, and have a great vacations. -- thank you. Thank you to all of you. Thank you for the questions, for your attention. It has been a pleasure to talk with you. See you soon.

Great mic. Have a nice vacation. 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 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.