Aeroports de Paris (Euronext:ADP) Q1 2026 Earnings Call

0:01 Welcome to Group ADP twenty twenty six First Quarter Revenue Presentation. For the first part of the conference call, the participants will be in listen only mode. During the questions and answer session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now I will hand the conference over to Cecil Combo, Head of Investor Relations, to begin today's conference. Please go ahead. Thank you, and good morning, everyone. Thank you for joining us for our twenty twenty six First Quarter Revenue Presentation. Before we begin, I would like to remind you as usual that today's discussion may include forward looking statements, which are subject to risks and uncertainties that could cause actual results to differ materially.

0:52 For more details, please refer to the disclaimer included in our press release and on Slide 34 of our presentation. I will now hand over to Christelle de Robillard, Group CFO, who will take you through the prepared remarks before we open the call for questions during the Q and A session. Christelle, over to you. Thank you, Cecile, and good morning, ladies and gentlemen. Thank you for joining us to discuss our twenty twenty six first quarter revenue. Let me first turn to Slide three for our key highlights, starting with traffic. We delivered solid momentum in Q1 with group traffic of 2.2% to 84,000,000 passengers and Paris traffic of 2.6% to 24,000,000, demonstrating the resilience of our platforms despite reduced passenger flows with The Middle East since March.

1:52 Consolidated revenue reached close to EUR 1,500,000,000, down slightly year on year. Ex time period SPP declined to €31.5 mainly due to an unfavorable FX impact, but also softer Middle East traffic against a particularly demanding comparison base in Q1 last year. Beyond the numbers, we continue to deliver on our strategic priorities. Service quality remain a strong focus as illustrated by Skytrax reaffirming our ranking in 2026. On the regulatory front, the twenty twenty seven-two thousand and thirty four ARRP process is firmly on track with the non binding opinion from ART adopted on April 9.

2:44 Regarding the management of our international portfolio of assets, we made meaningful progress with the three year extension of the Santiago concession in Chile, the sale of a 3.4 stake in GMR Sports and the closing of the Ambassador disposal. Overall, despite a challenging external environment, execution remains strong, and we fully confirm our 2026 financial targets. The quick word on service quality with Skytrax ranking for 2026. 10 airports from Group ADP ranked in the global top 100. Paris Saint Louis was named Europe's best airport for the fifth consecutive year and ranked sixth worldwide, while Paris Orly was again recognized as Europe's best regional airport.

3:39 This distinction clearly reflect the long term commitment of our teams and reinforce our ambition to be a global reference in airport hospitality. Let me now briefly walk you through the IRTNAN's binding opinion on our future economic regulation agreement shown on slide five. Overall, we view this opinion as constructive and broadly in line with our expectation. Importantly, the IRT confirms that the multiyear era is the right framework for group ADP, given the scale and duration of the Paris investment program and explicitly recognizes that an eight year contract is justified by our industrial plan.

4:26 We read this opinion as the regulator's roadmap for convergence ahead of the binding opinion. The ARRP has deliberately adopted a non prescriptive principle based approach at this stage, which we see as a positive signal in terms of process. As expected, the AIRT identifies some key work streams to be addressed over the coming months. On return, the AIRT provides a clear framework. It estimates a WAC range of 4.6% to 5.6% under current assumptions and clearly highlights that access to the upper end of this range is conditional and balanced and credible risk sharing. Importantly, the IRC also remind that the WACC will be reassessed at the time of the binding opinion, taking into account prevailing market conditions.

5:21 Following the simple opinion, the process now entered an active phase of discussions with the French state aimed at drafting a revised version of the ARRP. In parallel, we are also continuing technical and economic growth stream with airlines and discussion with the regulator. During this process, we will calibrate how the IRQ recommendation are reflected in the revised draft, while ensuring that the overall framework remains balanced and does not result in ADP bearing disproportionate or excessive risks. Our objectives remain unchanged to obtain a binding opinion from the IR team Q4 twenty twenty six with entering two fourth of the year on 01/01/2027.

6:11 Let me now come back to the transaction we announced last week regarding the partial disposal of our stake in GMR Airport Limited, which is summarized on this intentionally comprehensive slide. This transaction is a partial monetization designed to crystallize value while preserving significant economic exposure to the long term growth of Indian Aviation. In terms of transaction structure, we have put in place three separate arrangements with GMR Group. First step completed on April 23, we sold the first equity tranche of 3.4% to our co shareholder for EUR $256,000,000. Second, we implemented options in order to sell a further 3.9% by April 2027.

7:04 And third, we agreed on the sale to GMR Group of the GAL issued FCC Bs. This will be done by March 2027, allowing an early repayment of this loan, which had been implemented to accelerate the merger listing of GAL. This structure provides us with both immediate liquidity and visibility on future cash inflows, while ensuring an orderly rebalancing of GALD's shareholding structure. Turning to the key outcomes, there are four messages we want to highlight. First, we are rebalancing our economics exposure in GAL. We reduce our exposure in a disciplined way while retaining a significant upside alongside our partner in the markets with very strong growth prospects.

7:54 Second, our strategic partnership is fully preserved. Our governance rights and co promoter status in GAL remain unchanged, and we continue to view this partnership as a long term strategic asset. Third, the transaction represents a material crystallization of value, implying roughly a four times uplift compared to our entry valuation in 2020. And fourth, this is fully consistent with a balanced capital allocation strategy with up to around EUR924 million of post tax cash proceeds expected by 2027, supporting both deleveraging and shareholder returns.

8:41 This is why we have proposed a special dividend already in 2026. Finally, a word on the expected accounting impact. Details are specified on the bottom part of this slide. The main message is in 2026, reported net debt and P and L will reflect some temporary noncash accounting effects mainly related to derivatives, which do not reflect the underlying economics of the transaction. In 2027, as the FCCBR reimbursed and the second equity tranche is completed, we expect a structural and positive impact on reported net debt driven by cash inflows and the disappearance of this accounting effect.

9:29 Let's now dig into the numbers for the first quarter. I am now on Slide number eight with traffic. Q1 twenty twenty six demonstrate the resilience of our platforms despite a challenging geopolitical environment. At Paris Airport, traffic grew by 2.6%. Traffic loss on Middle East routes was partially offset by higher traffic towards Asia and China, both showing particularly strong momentum. At group level, traffic increased by 2.3% to nearly 84,000,000 passengers. Taos continued to benefit from strong performance at its local assets, while international airports showed more moderate growth.

10:15 At GMR, traffic was broadly stable, reflecting temporary operational and geopolitical headwinds, but with solid underlying demand. Finally, traffic at Amman was impacted by the Middle East conflict. Let me turn to the next slide, which focuses specifically on this topic. You can see on slide nine a forecast update on the impact of The Middle East situation and how recent traffic trends have been evolving. In March, we recorded the peak impact. Traffic was affected across several platform by airspace closures and airline schedule adjustments. In Paris, overall traffic remained solid, although Middle East flow declined sharply.

11:02 SPP was impacted by mix and FX effects, again, against a challenging comparison base. At TAV, impact on traffic was benign except for Georgia. Conversely, Amman Airport was the most directly exposed with traffic down around 41%. In India, both Delhi and Hyderabad airports were impacted. Delhi proved more resilient, supported by increased frequencies from international carriers. In April, based on preliminary data, we are seeing sign of a gradual recovery, which remains our central scenario going forward. Looking ahead, short term bookings remain supportive and summer schedule are broadly stable versus initial plans.

11:52 At the same time, we are proactively deploying cost discipline measures to preserve margin and financial flexibility. Based on trends observed so far, the saving measure implemented and assuming a scenario of short term disruption, we confirm our 2026 financial targets. Turning to Exane Paris, sales per passenger reached EUR 31.5 in Q1, down 5.7% year on year. This reflects a challenging retail environment driven by a global slowdown in luxury demand and unfavorable FX effect linked to euro appreciation and a particularly demanding comparison base as Q1 twenty twenty five reached historically high levels.

12:44 In addition, routes in Terminal 2 EK intensified compared to last year and weighed on performance. Since March, SPP has also been impacted by the Middle East situation, which affected high contribution passenger flows and the overall traffic mix. Overall, we view the current SPP performance as a result of temporary and well identified headwinds in a still disruptive context rather than a change in the underlying long term fundamentals of the XTEM pari model. On Slide nine, this bridge shows the evolution of group revenue in the first quarter, then down 0.9% year on year to reach EUR 1,500,000,000.

13:33 This evolution reflects contrasted dynamics across segments. In the Aviation segment, revenue grew by EUR24 million supported by traffic growth and the tariff increase of 4.5% implemented in April 2025. This positive contribution was partly offset by Retail and Services segment, which declined slightly, reflecting the well identified headwinds we discussed earlier compared with a strong Q1 last year and an accounting effect that uplifted Q1 twenty twenty five. At the international level, revenues were down EUR 27,000,000. At TAV, this reflects contrasting trends between service companies and airport assets, noting that in Almaty, revenues were impacted by a change in the status of fuel activities.

14:31 Overall, revenue evolution reflects temporary and well understood factors with resilient operation and continued discipline across the portfolio. To conclude, our 2026 outlook remain unchanged and is built on discipline and prudent assumption, including short term conflict related disruption and the saving measures implemented. Our capital allocation priorities remain unchanged with disciplined CapEx, strict leverage control and a clear commitment to our dividend policy. Overall, we remain confident in the resilience of our business model and in our ability to deliver our 2026 targets despite the challenging environment.

15:23 With that, let's now open the line for the The next question comes from Graham Hunt from Jefferies. Please go ahead. Yes, thank you very much. I've just got two questions. First one just on the ERA regulation and the opinion that we got from the ARRP. Could you just clarify sort of, if you can, any positions where you have moved closer to the view of the regulator, I guess, specifically on cost allocation?

16:10 Is there anything there that you can share in terms of what we can sort of rule out as a point of difference? Or are you still do you still see yourself negotiating there? And then second question, just on I wondered if you could help around how we should think about the impact on retail going into Q2 and the relative weights of the headwinds in Q1, given we only had one month of impact on Middle East travelers, but then the FX unwinds for Q2. So just if we're thinking about a full quarter of lost Middle East travelers, I guess, going into what is high season into Europe, how should we think about how retail tracks? And at what point in time you would say the disruption is no longer short term?

16:57 Thank you for those two questions. So maybe beginning with the regulation one. So maybe first to begin and to highlight the fact that we find the overall tone constrictive. And so this is a positive signal to so that we are confident to find an agreement in the expected timeline. As you mentioned, there are maybe three most of the team in the upcoming discussion that we will have with the regulator, which are highlighted in this nonbinding opinion.

17:46 First of all, the underlying economic trajectory, We will have to they are asking us to make efforts on documentation, on traffic growth, on operating cost, and on investment, amount. I have here either scheme for greater robustness and documentation of our central case, ensuring that efficiency assumption are well supported. So this will be our first, work in in the months to come. Second, and this refers specifically maybe more to your question, the topic of allocation keys and analytical accounting. We know, there was no surprise in this nonbinding opinion as the regulator reiterates what they said in their 2026 tariff decision.

18:36 So we know that this is a central topic for us and a '71. Given actually the direct impact on regulated returns. As you've been able maybe to read through the decision, we have resumed technical work stream with airlines. And this is, by the way, noted as a positive, element by the, ART. We have begun to discuss on some, main pullbacks of the that were were made from the ART, especially on the surface key and the, access key. Having said that, divergences remain, and the authority has clearly indicated that its final position will be taken in the context of the binding opinion.

19:27 But, as far as it will still be a key topic and our goal will be to preserve as you know on the system. And maybe, certain elements highlighted in the decision worth noting is the consistency between risk profile, and risk sharing mechanism with a load return. As you've seen, I have to reiterate its decision on these topics, access to higher load return is conditional on the level of risk effectively bound by the operator. So we will now enter in a phase of discussion with the French state, but with this first step, it's already once again a positive and constructive tone of the regulator.

20:16 Regarding your second question on SPP and the Middle East conflict impact. So maybe just remind you some key figures around that. Traffic with Middle East represents 5.3% in '25 with some traffic with Middle East in 2025 represented 5.3% of total traffic in Paris, but 12% of retail sales at the same on the same period. So we know that these are, important contributive, passenger. What we've seen, since March on the SPP on this specific topic on Middle East reflect reduced flows with this destination and therefore a negative mix effect on SPP.

21:08 This impact, at the same time has been partly mitigated by resilience in other long haul segments and especially new from increased traffic with Asia and China especially. We are, as you understood, on the scenario, on the central scenario of a short term conflict because and what we've seen in April is supportive of this assumption because we've seen a progressive recovery in April. So that's why we are in a position to confirm, our target. Maybe, beyond those topics of Middle East, the main, element in the SPP performance for this first quarter is, the fact that the, comparison base is unfavorable because, q one twenty twenty five was particularly an outstanding one.

22:12 And because of the FX effect, when you compare it the euro, between, 2025 and 2026, it has appreciated of 15% on the year on year basis. So this is an important element in the performance in the performance of this q one. It is, of course, difficult to isolate each driver precisely on the least impact, FX impact. For sure, a fixed impact is the most, important one because once again, SPP started softening one year ago in April 2025 and weigh on the performance.

22:59 Thank you. Thanks very much. The next question comes from Christian Nadelcu from UBS. Please go ahead. Hi. How are you? Thank you very much for taking my questions. So the first one, both of them are on the ARRPY decision that was published a few weeks ago. The first one, I think, ARRPY is flagging that the way you split the CapEx between regulated and non regulated, you're allocating more than 70% of the CapEx to the regulated side. I think they're giving particular examples on the shuttle and on Liza, where you allocate 90% to 100% of CapEx on the regulated side. So I guess my question is, having this in mind, do you see a good chance to review downwards your EUR 8,400,000,000 regulated CapEx plan for the next eight years? Or what are the arguments to defend the way you you allocate there?

23:59 The second one, also in the documentary, I mentioned that from February to April, there have been several workshops between ADP and the airlines in relation to cost allocation. And we know this this this have been going on in the past too. But what I'm what I'm curious, could you tell us a bit more about this this recent recent discussions the airlines? I believe these are not yet taken into consideration by ARETY in their proposal. So I'm trying to understand a little bit and get a bit more color on how these discussions are evolving in terms of cost allocation? What is changing versus the past discussions or past workshops? Thank you very much. Thank you, Christian, for those two questions, which are actually linked, which is each other. But maybe to begin with the first one on the CapEx.

24:59 Indeed, the European points to an overall allocation investment to the regulated perimeter, notably for Liza and the connected trend. But this is once again, same topic of the cost allocating system because we are discussing of the way we allocate both OpEx and CapEx. So at the end of the day, it's the same topic. So, I have to raise this question on certain investment allocation key, which has been, as you know, under active review with airlines before since 2022 actually, but since the beginning of 2026, started this rejection. And as you understood, we've resumed, those discussion. And those, topic, LIZA and connecting train are part of, this discussion. These works are clearly ongoing, so it's a little bit, early to tell you to to to give you a proper figure on those, on those topics.

26:12 Mechanically, if we make, some change, in some, accounting rules, it can have an impact on the way the CapEx are allocated between, regulated and non regulated. But so it will be just a mechanical review done what should we change some specific keys on the CapEx that are part of the of the of the proposal. But, at the end of the day, there is no, risk that the 8,400,000,000 CapEx investment program is globally reviewed the month. All in all, what's important to, keep in mind is that it's a global balance. So once again, we are contemplating the topic of, accounting rules, at the same time with the level of WACC and with, the adjustment adjustment factors. So as to make sure that on those three elements, we are really ensuring a fair return and a fair remuneration on our investment. And we are confident in our ability to find this current and consistent balance to an offer remuneration of of invested capital.

27:42 On the second question, and this is already partially answered through the through the first one, but so indeed, we have resumed technical work team with airlines. The main topics we've discussed so far are related to the main pushback stated by the AR team is 2026 decision around surfaces key, especially. Those works are clearly ongoing. We have not yet come to an end on those two peaks. Once again, what will be key for us is to make sure that we are not challenging the integrity of the dual team system. This is what drives our position on this two peaks since the beginning.

28:42 And once again, to make sure that we will have a global view on all the topics and not just making progress on cost allocation key without having a view on the global economic balance. Thank you. The next question comes from Eric Lemarie from CICCIB. Please go ahead. Yes. Good morning. I've got two questions. So the first one on the saving measures you mentioned in the press release, the measure to deal with the current geopolitical situation. Could you remind us what kind of savings they are? And in a scenario with a further deterioration of the geopolitical situation, what can be done on your side in addition to these saving measures?

29:41 I got a second question on the recent deal with, regarding GMR. And I was wondering, what was the trigger explaining the deal with GMR? And if any specific reason behind the timing of this operation? Thank you. Thank you, Eric. So maybe beginning with your first question regarding the saving measures. So, cost discipline is not one shot external, but we are really implemented a set of measures that can be activated gradually and progressively. Discover all our assets from both in Paris, but also in our international assets.

30:33 And this also cover different kind of OpEx to answer more precisely to your question, consumable spending, subcontracting expenses, recruitment phasing, and also super function optimization. So all these measures are triggered in ways depending on the actual revenue impact observed. This is made so as to be as agile as possible. Our objective is very clear on to preserve margin and stay in our targeted EBITDA path. Should, as you understood once again, we are in a scenario of a short term, conflict, and we are seeing signals in that sense, supportive to this assumption.

31:26 Should q two show a sign of a different scenario, we will assess, the situation, including opportunity to take additional measure. But clearly, we are not there yet. So it would be too early to comment on additional measure for for the moment. And regarding regarding your question on the GML, the trigger, and the specific reasons for for this deal. So many, different reason and a global strategic rationale for making this operation. First of all, portfolio management. The timing is fully aligned with our strategy to secure and optimize the financial contribution of our international portfolio in line, by the way, with the priorities given by our CEO, since his appointment.

32:20 Second, reason for this deal, we have value crystallization at an attractive valuation. As you've seen on this transaction, we place the valuation approximately four times higher than our than that of our initial investment in 2020. So this is a very good signal in terms of value for this asset and why also this timing. We've noticed that there is a strong market performance of GAL. If you look at numbers, it's 2025. GAL share price has performed strongly up 30%. Clearly, our long term condition on India is strong and intact.

33:11 There is no link, to do this operation with the short term geopolitical situation or traffic trend. Our long term conviction take clearly the same that the one, we, when we made the acquisition back in 2020, India remains one of the most attractive long term aviation market globally. And we are fully committed to continue our partnership with GMR. And this is also the reason why we made this operation with, our partner to reinforce our partnership. Thank you. The next question comes from Dario Maglioni from BNP Paribas.

33:58 Please go ahead. Hi. Yes. And two questions for me. One, it's on the GMR deal. So first of all, I'm happy to see this crystallization of value. You mentioned about the accounting of the foreign convertible bond. So that's the value the fair value of the derivatives is around 570,000,000. That's included in the debt, financial debt, financial liabilities that you report on the balance sheet. Correct? So when you will sell this FCCB, you will also reduce the debt, the financial debt by around $770,000,000 Is that correct?

34:46 And second question around the guidance. And I just want to understand why you're not cut yet the guidance. What gives you confidence that to keep the guidance given that the guidance was set before really, this Middle East crisis became so so apparent. So, yes, what gives you confidence about this guidance? Maybe talking about, you know, the traffic schedule that you see for Paris, for Turkey, TAV and so on? Thanks, Dario, for those questions. So and thanks, particularly for the first question, which is indeed very important to understand, not maybe so easy to understand, but very important to understand.

35:36 We live indeed through this operation different accuracy impact. If we look more specifically to the net debt that you are asking, maybe just a while before to begin with what will happen in 2026, so so that you understand the different phases of the transaction. So in 2026, reporting net debt will reflect, of course, the benefit from the EUR $256,000,000 cash proceeds received last week and but before paying dividend. But this will also reflect some temporary non cash accounting effects mainly due to the derivatives linked to the second equity tranche. As you understood, there is a call and put option, which will have an impact in the reported net debt, but a noncash impact.

36:35 Looking forward in 2027, indeed, there will be different streams explaining the evolution of the net debt. First of all, the cash inflows coming from the repayment of the FCCB and the sale of the second tranche, but, which represents, €500,000,000 and 82 estimated cash impact. But at the same time, exactly what you are saying, the disappearance of the derivatives linked to the FCCB because the FCCB will be repaid. So this will have a significant impact on total in the reported net debt in 2027.

37:28 For your second question, so what give us confidence on the the reaffirmation of the guidance? First of all, sorry to repeat this, this is a key assumption, in our guidance. Our confirmation of guidance is based on the short conflict scenario. This assumes that tension do not materially affect the summer traffic. So summer traffic will clearly be key from that front. It also assumes that flight schedule and load factor are broadly hold, and that we continue to see the progressive recovery trend that we have observed since, April.

38:13 And indeed, since April, we have observed this gradual recovery. March has clearly corresponded to the peak impact, both in terms of traffic disruption and mix effect. And we are seeing in April, improving movements and load factor across several export destination. For instance, with destination with Israel, where traffic has resumed. So this trend has supported to our view of the progressive normalization consistent with, our, base case. Maybe, just to give you also some highlights on the summer traffic outlook because as I was mentioning, it will be key in in the way the year will will happen.

39:02 So at this stage, our view on summer traffic in Paris remains broadly unchanged compared to our initial expected trajectory. We are seeing some schedule erosion in early summer, but notably linked with this Middle East context. But, having said that, summer schedules overall remain broadly in line with initial plan, and short term book bookings are holding up. So, in the current context, we expect that summer booking might be slightly delayed compared to to usual. But what we are seeing, today is once again supportive of of this assumption of short term conflict scenario.

39:51 Thank you. The next question comes from Elodie Rawl from JPMorgan. Please go ahead. Hi, thanks for taking my questions. On so first of all, on the ARRPY kind of proposal, so you mentioned a WACC of 4.6% to 5.6%. And I was wondering if the low end of the range was acceptable to you and what when or what would be a deal breaker if there is anything that could be a deal breaker in your mind in this range? And second, on the Middle East impact and all that, I know you're not changing your guidance, but there's a lot of discussion about what could the short tailed inject fuel mean for traffic in general, not necessarily just at your airport.

40:50 So I was wondering if you had any discussion on that with your airlines. I know you've seen some erosion of bootings in the summer, but should the Strait Of Armas remain closed, like, is there anything like a scenario that you are starting to stress at this stage? Thank you. Thanks, Elodie, for that question. Indeed, we have not touched upon for the moment the WACC, but this is an important element of the nonbinding opinion. Maybe let me just begin begin first by an element which has been changed in one technical evolution that is worth noting in this non binding opinion.

41:41 Maybe you've seen that the regulator has adapted its beta methodology now offering a five year beta based on a weekly data compared to previously a two year beta. So this explain why the range, has slightly, evolved, and there was an upward shift in the wide range. You remember that it was previously 4.1% to 5.4%, and they now, state of 5.6 to 4.6 to 5.6, range. So for us, once again, this is reflective of the overall positive tone of the decision, not showing that there is a desire for IRT to to keep room.

42:28 Having said that, once again, WACC in itself is not a deal breaker. It is a global, balance. So, we will have a view on the WACC only with, at the same time, a view on the cost allocation system and the, adjustment factor. As the regulator say, and they are making themselves this link between adjustment factor, risk sharing mechanism, and level of, allowed return because they are explicitly saying that reaching the top of the range require the commensurate level of risk borne by the operator. So that's why, we will be in a position to decide only if we have this, global, approach.

43:27 So the question for us and the key element for us will be to find this right overall balance between the risk effectively bound by ADP and the level of, annual return. But in any case, we won't accept bearing disproportionate or excessive, risk. This will be a key, for us. Regarding your second question, so on on the Middle East conflict and the potential impact on jet fuel both maybe prices and potential shortage. So clearly, this stage, once again, we are as you understood and mentioned in your question, we are seeing scheduled programs as supportive of our assumption.

44:23 Coming to the question of the impact of potential jet fuel prices increase on the traffic evolution. Clearly, for us, it's too early to draw conclusion on the sensitivity of traffic to a prolonged period of high jet fuel prices. Recent traffic evolution have been influenced by different factor, a combination of schedule adjustment, airspace restriction and supply side decision by airline. So the respective impact of fuel prices, potential traffic performance and longer term capacity responses remains clearly uncertain at this stage. Of course, we are closely monitoring the situation and all those development, but we clearly don't have sufficient visibility at this point to quantify or isolate the effect of fuel prices and traffic across our platform. And maybe, as we are talking about jet fuel, maybe just a word on the question of potential shortages.

45:33 Just to remind you that Paris Airport are supplied through a pipeline network directly connected to refineries and to a terminal in the lab and that the majority of crude oil feeding those infrastructure current come from North America. So we are compared to other quite in a better situation. And we have we remain vigilant, of course, and continue to monitor the situation. But at this stage, we have the few reserves covering seasonal days of operations. Thank you. Thank you. The next question comes from Jose Manuel Arroyas from Santander.

46:24 Please go ahead. Thank you. Good morning. I have two questions. One is about the transaction with the GMR Group. I wanted to ask you in particular about the statement that you included in the press release on Thursday. Here, you said that the proceeds from the sale will give you freeway for potential future development projects. I wanted to ask you what you mean by those. If those may include new international M and A opportunities, including buying more shares in TAV in particular? And my second question, and sorry, it's a very basic question that I perhaps should know myself, who drafts the final IRA document? Is it the ARRP in isolation or is it the ART in tandem with the DGIC?

47:10 What I wanted to ascertain is how influential the ARDS opinion, can be in the final agreement. Thank you. Thanks for those two questions. So indeed, the cash proceeds, we have mentioned that we have a balanced capital allocation strategy. And our proposal, clearly, we face a choice to keep balance sheet stability and long term financial flexibility. So we have, as you see, allocated a part of, these proceeds to a shareholder with a special dividend, coming, that will be proposed to the general assembly, in the month of May.

48:04 And the rest of the proceeds will be dedicated to deleveraging. And once again, keep this balance sheet stability and potentially give room of maneuver for potential future development. Having said that, our development strategy and our potential targets for M and A have not changed, compared to what we were saying previously to this opportunity. We have a selective and opportunistic approach when it comes to development. Opportunity must fix our strategic footprint, must offer long term value creation, and of course, most importantly, be compatible with our balance sheet, cash flow and credit strength objective.

48:56 So scale for its own sake is not a target, and so there is no change from that perspective. Regarding your second question, I hope I understand it correctly, but so I will start an answer, but don't hesitate too precise if it's not answering your question. So regarding the role of the regulator, clearly, so we were here in a step of a nonbinding opinion. So it gives color for us and gives a road map for the next month to be in a position to sign the economic regulation agreement. But for signing with the French state, with the DGAC, this final agreement.

49:47 We need, this time to have a binding opinion from the regulator, which is clearly, mandatory. And if, there is not a yes coming from the ARRP, the French states won't be in a position to sign the agreement. So for the time being, we are clearly, in the expected timeline. The ARRP has also confirmed. This is also a positive element in its decision, the expected schedule. So this is to say a consultation, a new consultation on a revised draft of the contract consolidation of airlines in September, following which the French state will have to ask the regulator for the binding opinion. The the regulator will have two months to answer. And here, we will need their approval to be in a position to to sign the the agreement.

50:55 Thank you, Christina. The next question comes from Martine Wojdal from Bank of America. Please go ahead. Yes. Thank you very much. My first question relates to your stake reduction in GMR. You mentioned in the release that you have no intention to reduce your stake further. But I'm just wondering, is there any legally binding lockup with the Indian Stock Exchange perhaps? Or have you committed to a contractual lockup with with GMR Group?

51:40 And could you perhaps clarify what would be, like, a duration of any any potential lockup? Question number two, if you allow me, it's on Exim Paris. So so retail revenue per passenger, which I believe was minus six in q one. Could you explain what was the main reason for for that reduction? Is is it the impact of The Middle East, Or is it driven by currency impact, weaker U. S. Dollar? And what gives you the confidence that the run rate will improve in the rest of the year on retail? Thanks, Martin. So for, Gemma, for your first question, and indeed, the statements we made that we do not intend to make additional sale. There is no legal requirement and no lookup formal lookup in our agreement with GMR.

52:42 It's just an intention of the management, but for us, it was important to highlight this because once again, if and if we are doing this transaction, we want to our long term conviction on India is strong and intact, and we want to keep a strong exposure to this growth. This was the rationale of the operations from the one. It stays true even after this crystallization of value and minority stake. But clearly, legal look at and so no explicit duration around around that.

53:28 Coming to your second question in terms of retail. So indeed, the the SPP was down compared to 2025. It's really difficult to isolate each driver precisely. But clearly, if we have to keep in mind one most important element, you see the FX rates. SPP clearly started softening a year ago in April 2025, coinciding with a sharper role, not only against USD, by the way, but also against the Japanese and Chinese Q and A, which are, as you know, all critical currency for key long gone customer segments. So clearly, the comparison base from that perspective is unfavorable for twenty twenty six q one performance.

54:24 Having said that, on top of the FX FX impact, also the comparison base is not favorable because Q1 twenty twenty five delivered historically high FPP level, setting a particularly elevated benchmark above €33 So what we are seeing for the first quarter of twenty twenty six compared to 2025 is not necessarily representative of the rest of the year because this creates really a pronounced base effects, which may can equally amplify the apparent decline in 2026. In addition, to that, there are also a combination of exogenous headwinds that contribute to this evolution.

55:15 So apart from this FX effect, there is also the slowdown in luxury demand that we are already that we have already been seeing, for the last quarter of, 2025. And, of course, the less favorable Middle East traffic mix because as I was mentioning earlier on, those passenger are particularly contributive in term of retail sales on 12%, just to remind you the figure of total retail sales in 2025. So take taken together, these elements mean that the current STT performance should be viewed as a cyclical and contextual deep rather than a structural deterioration, and our long term fundamental clearly remain intact.

56:36 Okay. So if there are no further questions, it's we I will say that it's now time to close the the call. So thank you again, everyone, for having logged into this conference. Our next planned quarterly publication will be on July 29 with the twenty twenty six half year results. And in the meantime, of course, feel absolutely free to get in touch with Elliot and I in the Investor Relations team for any follow-up question. And with that, enjoy the rest of the day. Thank you. The live presentation is over now. Thank you for your participation. You may now disconnect.