Earnings call transcript: ADP Q1 2025 revenue up, stock rises 2.15%

Aeroports de Paris SA (ADP), with a market capitalization of $119.84 billion, reported robust financial results for the first quarter of 2025, with revenue climbing 12.2% year-over-year to €1.5 billion. This performance was driven by growth across its aviation, retail, and international segments. Following the announcement, ADP’s stock rose by 2.15%, closing at €109.3. Trading at a P/E ratio of 30.5x, the company has maintained its full-year EBITDA growth target of at least 7%.

InvestingPro analysis reveals several promising indicators for ADP, including expected net income growth and impressive gross profit margins. Subscribers can access 5+ additional exclusive ProTips and comprehensive financial metrics.

Key Takeaways

• ADP’s Q1 2025 revenue increased by 12.2% year-over-year.
• The stock price rose by 2.15% following the earnings release.
• Aviation revenue grew by 7% due to increased traffic and tariff adjustments.
• The company reaffirmed its full-year EBITDA growth target.

Company Performance

ADP showed strong performance in Q1 2025, with significant revenue growth across its segments. The aviation segment benefited from a 7% increase, supported by a rise in passenger traffic and a 4.5% increase in regulated tariffs. The international segment, particularly TAV, saw an 18% revenue increase. Retail and services revenue grew by €63 million, underscoring the company’s robust retail strategy.

Financial Highlights

• Revenue: €1.5 billion, up 12.2% year-over-year
• Aviation Revenue: Up 7%, driven by traffic growth
• Retail and Services Revenue: Increased by €63 million
• International Segment Revenue: Up 18%

Outlook & Guidance

ADP expects Paris traffic growth between 2.5% and 4% in 2025 and aims to maintain a capital expenditure cap of €1.4 billion at the group level. The company is targeting a 4% to 6% increase in spend per passenger for the year and is preparing a new 10-year economic regulation agreement.

Executive Commentary

Crystal, ADP’s CFO, emphasized the company’s strategic focus, stating, "We are shaping [the ERA] as a balanced, forward-looking framework." She also highlighted the company’s financial priorities, noting, "Our objective is to reduce indebtedness."

Risks and Challenges

• Potential softening in the US market could impact traffic growth.
• Regulatory changes and tax risks may affect profitability.
• Macroeconomic uncertainties could influence retail spending patterns.

Q&A

During the earnings call, analysts inquired about potential softening in the US market and its impact on traffic. ADP’s management also addressed questions regarding the new management structure and plans for international subsidiaries TAV and GMR. The company maintains a strong financial health score of GOOD according to InvestingPro’s comprehensive assessment, which evaluates multiple financial dimensions. For detailed insights, access the exclusive Pro Research Report, available for 1,400+ top stocks, offering expert analysis and actionable intelligence for smarter investing decisions.

Full transcript - Aeroports de Paris SA (ADP) Q1 2025:

Cecile, Moderator/Host, ADP Group: Thank you, Cecile, and

Crystal, CFO, ADP Group: good morning, everyone. I am pleased to be speaking with you today as the new CFO of Group ADP. Some of you may recall that this is actually a return for me as I previously spent several years within the group before taking on other responsibilities. It’s an honor to rejoin ADP at such a pivotal time for the company, and I’m looking forward to working closely with the teams and with all of you as we continue to execute on our strategic priorities. Let me kick off this presentation with a few highlights from the quarter on Slide three.

You can see on the left side the key operational indicators and revenue for the first quarter, which is reaching close to EUR 1,500,000,000.0, up 12.2% compared to Q1 twenty twenty four. This is an encouraging start to the year, and we confirm our full year outlook. In terms of strategic progress, we launched the C. D. J.

Routes consultation of Paris Charles de Gaulle Airport, paving the way for the next economic regulation agreement, which remains on track for a year end proposal. The new management structure is now in place, driving faster and more agile decision making. We continue to actively manage our debt profile through bonded issuance and repurchase operations closed at the March. Internationally, we secured the daily tariff revision for twenty twenty five-twenty twenty nine, opened entirely a new capacity extension and completed the refinancing of the new concession. All strong steps supporting the group’s long term positioning.

Now, a few words about the new general management around the Chairman and CEO to strengthen alignment and accelerate decision making. It embodies our strategic priorities as we enter a new phase of development in Paris, focused on decarbonization, operational excellence, and quality of service. It also supports our economic model combining a disciplined disciplined approach to external growth. This new structure recognizes the growing role of hospitality within the group and accompanies the broader transformation in how we operate simpler and more agile. Moving on to Slide five, with the latest Skytrax ranking.

Eight airports of the group are now in the top 100, and Paris CDG continues to be the best airport in Europe for the first year in a row. In the day to day commitment of our team, the ability to innovate and reinvent themselves that enable our airports around the world to meet passenger expectations. This show we have everything it takes to become a global reference in airport hospitality, and we are fully committed to this ambition. Reflecting this ambition, La Rue Parisienne was opened recently in Orly Four, serving international passenger with our X time lifestyle offering. The area will include six new bars and restaurants by the end of the year, as well as eight additional shops planned for 2026 to keep growing our retail business going forward.

In Turkey, TAVARES Ports recently commissioned the first phase of capacity expansion in Antalya with a nominal capacity increased to 65,000,000 passengers compared to 35,000,000 previously. Antalya is among the most popular tourism destination in the Mediterranean Basin, and this expansion will bring significant value. Moving on to Slide nine, with overall traffic evolution. Group traffic is 6.7% higher than in Q1 twenty twenty four, with stronger growth in international airports. In Paris, traffic evolved in line with our expectation of 4.5% in Q1 twenty twenty five, reflecting several elements.

First one is a favorable base effect created by the ForeFlight air traffic management system, which led to reduction in flight schedules from January to February 2024. This is partially offset in 2025 by similar flight reduction, but to a lesser extent, and also by the absence of a leap day compared with February 2024. Excluding these effects, traffic in Q1 twenty twenty five grew around 2.6% compared to Q1 twenty twenty four. In addition, the traffic in the month of March was affected by two calendar effects, which are more difficult to quantify precisely. The month of Ramadan, which took place entirely in March, had an unfavorable impact on twenty twenty five passenger traffic with certain destination.

This materialized into lower load factor. In contrast, the Easter period had boosted traffic in March 2024, resulting in an unfavorable base effect. All in all, traffic recorded so far and the known capacities are consistent with our traffic growth assumptions for 2025, between 2.54% compared to 2024. Let’s now move on to Slide 10 with a focus on Xtime Paris spend per tax reaching EUR 33.4, up 2.2% versus Q1 twenty twenty four. This 2% growth is very solid considering the headwinds we’re facing, including the rebasing effect linked to the reopening of Terminal 2AC since May 2024 and normalization of advertising activities after an outstanding year with the Olympics in 2024.

Sales in shops, particularly in the luxury segment, keep growing steadily. Going forward, the current uncertain macroeconomic context leads us to keep an unchanged cautious stance, and we continue to expect spend per tax in 2025 to be 4% to 6% higher than in 2023. Moving on to Slide 11. Revenue reached EUR 1,500,000,000.0 in Q1 twenty twenty five, up plus 12% versus last year. Aviation revenue is up EUR 33,000,000.

The segment is growing plus 7%, reflecting the combination of traffic growth in Paris and the regulated tariff increase of plus 4.5% on average applied since April 2024. Keep also in mind that another plus 4.5% tariff increase applies from first April twenty twenty five. The Retail and Services revenue is growing EUR 63,000,000, driven by solid growth in SpencerPaks and traffic and including a positive scope effect from the acquisition of PS and Paris Experience Group in Q3 last year,

Unidentified Speaker, ADP Group: but also reclassification of SDA Croatia into the segment. Real estate revenue segment is up

Crystal, CFO, ADP Group: EUR 7,000,000 with new assets and rent indexation closing. Abroad, TAVARFORT is growing EUR 57,000,000, up 18% compared to Q1 twenty twenty four, boosted by price adjustment as well as helped by the new commercial areas in Almaty following the opening of extension last June. AIG revenue is up €13,000,000 or 23%, showing signs of recovery in spite of the geopolitical context. This solid start to the year allows us to confirm our outlook. We continue to expect traffic in Paris to grow between 2.5% to 4% compared to 2024.

We confirm as well our target to deliver at least 7% annual growth in EBITDA. CapEx guidance is maintained with investment expected to a maximum of EUR 1,400,000,000.0 at group level, of which up to EUR 1,000,000,000 in 2025 for ID PSA. Before opening the line for Q and A, let me say a few words about the progress made in Q1 on the front of our strategic projects in Paris. Starting with the Cedienne Group consultation launched in early April. Territorial dialogue is a priority for ADP.

As we did last year for Orly, we launched a voluntary public consultation on our vision for the future of CDG Airport. This ambitious vision aims to meet evolving traffic demand while driving the sustainable transformation of the airport platform. It is structured around two time reasons, ten and twenty five years, to ensure failed, scalable, and decarbonized development. Built on five pillar, from intermodality and infrastructure to cargo, energy, and real estate, CDG twenty fifty set the pace for a flexible, inclusive, and sustainable airport model. The consultation will run until the summer, and we will draw conclusions from this consultation by fall.

Final word on the preparation of our next economic regulation agreement on Slide 15. We are fully on track to submit our proposal by year end, and we are doing so with confidence and momentum. The regulatory environment is now much clearer. The authorized level of regulated WACC estimated by the regulator is directionally going up. Two legal changes, one implemented last year and one to be enacted very soon, are game changer.

Tariff moderation is now to be assessed over the full period of the era, not year by year, and the bill provides that an era itself could run up to ten years, giving us the visibility we need for our industrial project. The only remaining milestone is the cost allocation review, and it will be concluded as part of the next tariff approval process. On our side, we are preparing an era designed to meet the expectation of all stakeholders. We are shaping it as a balanced, forward looking framework, and we are doing it with determination and a clear long term vision. And with that, let’s open the line for the q and a.

Moderator, ADP Group: Thank you. And kindly be reminded We’ll We’ll take our first question from Graham Hunt of Jefferies.

Graham Hunt, Analyst, Jefferies: I’ll just have two. First one, just on The U. S. Or transatlantic travel. And really, I guess, talking about anything you’ve seen in the early phases of Q2 as to any weakening in volumes there or any flow through impact to your retail business?

So any kind of color you can give on what you’re seeing day to day on that would be helpful. And then second question is just around the new management structure and the comment you made about, I think, if I heard correctly, reflecting the weight of retail in the business. Just interested to know specifically what that means and what the new management structure is is looking to address or improve, if there’s anything tangible that you can speak to that you’re targeting with this new structure or hoping to see improvement through this new structure? Thank you.

Crystal, CFO, ADP Group: Yes. Thank you, Graham. So regarding your first question in terms of the impact of the situation in The U. S. Maybe, first of all, it’s important to bear in mind that there are cyclical ups and down and structural, changes.

For the moment, it’s a little bit early, to know if we are in something conjunctural or, structural, and we will, of course, monitor this situation. Maybe also, just to give you some figures about the weight of US, in our metrics. So traffic, with The US is 8.6% of the total Parisian traffic at Paris level. And in terms of sales, it represented double digit share of the total sales in Paris. Having said that, clearly, for the moment, we are not seeing any major impact.

Capacities are increasing. And when we discuss with airlines, we haven’t noticed that there could be some cancellation in the months to come. As always, the summer season will be decisive from that perspective. But clearly, for moment, no impact. The figures in the April, are quite good.

So that’s why, we are quite confident and we have reconfirmed our guidance in term of traffic, as I mentioned earlier on. Of course, we will monitor the situation in term of impact on the traffic load factor, but also, as you mentioned in your question, in term of SPP. Regarding also this classification in term of SPP, it’s little bit also too early to quantify. For the moment, as you saw in our figures, our performance is solid. But from that perspective also, we will continue to monitor the situation.

But all in all, we can, at this stage, confirm our guidance. Regarding your second question in terms of management structure, so indeed, it was a quick decision after the appointment of Philippe Pascal as Chairman and CEO to have an organization which reflects our group’s strategic priorities. And from that perspective, our strategic priorities, you know them. Philippe Pascal explained them when he was appointed the development in Paris. And so this is reflected by the VP executive in term of operation in Paris, but also as you know, the retail segment with Mathieu Dobbert, who is also now VP Executive for the retail activities.

It’s a key contributor to the financial performance of the group. And finally, as for myself, saw that I am now in charge of finance and development, And it’s also consistent with our strategy to have a disciplined approach on M and A and to really scrutinize the projects through their financial contribution to the group.

Moderator, ADP Group: We’ll now take our next question from Elodie Raval of JPMorgan.

Elodie Raval, Analyst, JPMorgan: Hi. Good morning, Cecile. Thanks for taking my questions. So my first question is on the ERA, so the regulatory agreement to come. I understand that having a ten year agreement gives you visibility.

But I

Unidentified Speaker, ADP Group: was

Elodie Raval, Analyst, JPMorgan: wondering how can ADP be protected during this ten year period in the event of a big downturn if traffic is a lot worse than expected? Isn’t ten year kind of risky in order to manage the traffic risk? Or would you have any way to get some compensation in case of much lower traffic risk than expected? That’s my first question. And my second question is on TAV.

I was wondering if you can give us a bit more insight on the performance there because traffic was below what we were looking for, but revenues were above. And I think it’s because of your of the services businesses. So is this indicative of performance going forward? Should we expect better growth from Q2 with Ramadan effect on traffic being removed? Thanks.

Crystal, CFO, ADP Group: Yes. Thank you, Elodie, for those two questions. So regarding the first one, in terms of the duration of the ERA. So indeed, as you saw, there was a recent bill that enable to extend the duration of an era up to ten years if the industrial project justifies it. Clearly, we think that the industrial project of ADP will justify to extend the duration of the year.

Maybe just to remind you why we consider that it will be benefit positive for the group. First of all, it’s clearly more consistent with our industrial road map. We disclose our two target vision for Orly and Senegal within the framework of the public consultation. And clearly, this is a long industrial vision, so having a ten year is consistent with this project. It will also avoid to have investment disruption, and this is all the more true as we are now in a context where we need to have environmental approval, So we which can take long and can lead to postpone a little bit sometimes some projects.

So having the possibility to override this investment disruption is also a very positive factor for us. For the airlines, it will also enable them to have greater predictability and for us to have a better management of our profitability. Having said that, indeed, it’s very relevant to make sure that we are protected enough on those longer period of time. And for that, we are quite confident. First of all, in case of a very strong economic appeal, there will still be the possibility, like, force majeure clause in every type of contract to have a termination of the economic regulation agreement.

Remember, it was the case previously because of COVID. This is the first step of protection. Secondly, we intend to integrate in the economic regulation agreements and closes with adjustment sector. This is also what was done previously in ERA two or three to have a kind of range around the traffic up or below which we can adjust the tariff with bonus adjustment. And maybe third element of protection, the bill itself foreseen that there will be a rendezvous close at the fourth year, with a specific consultation of airline and review by the regulator to see if condition have materially differed from what was previously anticipated.

Regarding your second question in terms of financial performance for TAV. So in the first quarter, we had strong operation with 18% revenue growth, significantly above traffic growth, which was boosted indeed by price adjustment, commercial basket size growth, new commercial areas in the Almaty, as I mentioned in the presentation and the new TAF technology project in Qatar. EBITDA growth was in line with passenger growth at 5%. The margin dilution of the new TAF tech project, one off gains, which has boosted EBITDA last year and Turkish lira inflation were the main factor in the low season for the differential between EBITDA growth and revenue growth percentages. But all in all, TAF has confirmed his guidance for 2025.

Elodie Raval, Analyst, JPMorgan: Great. Thanks very much.

Moderator, ADP Group: Thank you. We’ll now take our next question from Christian Nadelcu Maybe

Christian Nadelcu, Analyst, UBS: adding a question on the regulatory on a ten year regulatory period. What do you believe is an appropriate regulated WACC to reflect the longer duration regulatory period? Is the 6.3% or around 6.3% that you’ve published in the past, is that the appropriate one? Do you think it should be higher? And equally so, could you elaborate a bit around the inflation risk protection over a ten year framework?

So what are your plans there? The second one, as you have advanced for the CapEx consultation, could you help us understand what is maximum annual CapEx that ADP can incur in Paris in any given year, regulated and non regulated? I was looking at the past there, right, it was around EUR 1,300,000,000.0, the regulated CapEx, the peak regulated CapEx that you’re planning for 2024, ’5, ’6 years ago, is that type of level appropriate still? And in this context, your 60 dividend payout ratio, is that set in stone on the midterm in different of the size of the CapEx program under the new era? Or that would be under discussion?

Thank you.

Crystal, CFO, ADP Group: Thank you, Christian, for those questions. So starting with the question on the ten year duration of the era and the impact of WACC. Clearly, in the last decision of the regulator, you mentioned some elements that were, by the way, quite positive for us and that we consider as a progress regarding the WACC. They mentioned a range. So for the 2025 tariff approval between 4.1% to 5.6%, so an average of 4.8%.

But clearly, they mentioned also that when you are in a multiyear agreement, it needs to be in the upper part of this range. So clearly, when, we are in a economic regulation, we expect to be, in the higher part, of this range. And when the decision was issued at that time, there was not the possibility in the law to go up to to ten years. So that should also be a positive element to try to go higher. It’s still below our own internal estimate.

May maybe you remember that for the 2025 tariff appraisal, our own estimation work was 6.3%. But clearly, the gap is narrowing between regulator estimation and our own estimation. Regarding the inflation risk protection, I think the the kind of protection we can have is exactly the same that I mentioned previously for LOD question. In a case where there would be really significant inflation that could be considered as an economic appeal. In this case, maybe we would even argue for termination.

In a case, you know, I I would say a more normal case, we we will have some, clauses integrated, in the agreement to have some factor adjustments and to be able indeed to, to react and adjust the initial forecast. And once again, solid amount, we have in the low itself, this rendezvous close at the first year, $14.14 in the low. Regarding the CapEx, so you are asking what could be the maximum in tariff for the regulated and non regulated. It’s clearly too early to give you a proper figure on the CapEx level we could have in this area. We have shared our target vision both for Parioli and Pari CDG.

But clearly, it’s no commitment in this figure. It is no threshold, no maximum. It’s just indicative, and it will make sense to communicate on a level of CapEx, within a global, overall picture. We need, clearly to have an overall economic balance And to be able to communicate on CapEx, we also need to see what is the level of tariff and referring to the your first question, the level of WACC. This is the old economic balance, CapEx, tariff, WACC.

So, for the moment, it will be, too early to tell you what could be, this amount. The CapEx amount contained in the industrial vision presented during the public consultation once again are no commitment. So, clearly, keep this in mind. I know it’s a little bit difficult for you to model, but we really encourage you at the moment not to model something based on what you have seen in the different consultation. And sorry, last question.

So regarding the payout and dividend, Here also, it’s a little bit early to give a proper figure. It’s really a question of capital allocation policy between CapEx and investment. And once again, you see that we have an in Paris in the year to come. But the capital allocation policy also concerned dividend and deleveraging. We will, of course, intend to have a balanced approach between these three elements.

And I hope that we will be in a position to give you more color in due course once we have also this clear picture on CapEx and the economic balance of the economic regulation agreement. Thank you very much.

Moderator, ADP Group: Thank you. We’ll now take our next question from Andrew Lobbenberg of Barclays. Your line is open. Please go ahead.

Unidentified Speaker, ADP Group: Hi there, Crystal. Welcome to the role, and congratulations. Can I come back on the ERA as well? In the recent years, the the regulator was was toying with and discussing Till structures. I think that discussion is dead and buried, but could you confirm that?

But equally, you referred to the ongoing cost allocation review, which continues. And in a way, that is a sort of Trojan horse for for a for a till adjustment, I think. So can you give us any any color? I appreciate the things ongoing, but, you know, what the scale is, what the quantum of risk is potentially to you guys from the cost allocation review. And then my second question would would relate to the theme that Philippe discussed, the the full year results about trying to get cash, get dividends out of your major subsidiaries out of GMR and out of TAV.

Given that both these businesses remain rather highly leveraged, what is the timeline to to get cash into ADP out of these businesses, and how do you influence these factors given that you don’t have complete control at GMR or indeed complete control at TAV either?

Crystal, CFO, ADP Group: Thanks a lot, Andrew, and thanks for your congratulation. So regarding your first question, I think there were two elements in your question regarding the team structure. So maybe just to precise that the team structure is not decided by the regulator. It’s something, regulatory, not exactly in the law, but it’s regulatory, and it’s not decided by the regulator. But regarding this element, so far to our knowledge, it’s not on the agenda to change it.

So we are confident on the fact that the team structure will remain unchanged. There was a change recently, but it was for regional airports. We were not concerned by these changes. But on the contrary, indeed, regarding cost allocation, it’s clearly topic that is in the end of the regulator. They mentioned quite they were highlighting in their last tariff decision some elements regarding cost allocation.

They asked from that regard two elements. First of all, they requested to resume the consultation with airlines. Maybe you remember that in 2023, we made a huge work, with airlines, and we created some workshops on the key allocation during which we reviewed every key, key by key. So it’s already a long long work, and the the regulator encouraged us in his last decision to resume to resume this workshop. So that’s what we have did, and we launched some workshop last March.

So this is the first element. Second element, they mentioned some request around surveys and audit surveys to try to objectivize more, some keys. For instance, you know, the key to allocate the passenger in the city. For that, we are conducting some survey, and they ask us to update the survey. So here, again, this is a work in progress from our side.

And also to have some audit to have a third party, that audit our allocation system. So here again, we are working, and it’s work, on progress. So as you can see, all in all, it’s more a question of process rather than a question of allocation per se. We will have on this element. So there is, as you may remember, a transitory period until the end of the year.

So we will, know if what we are proposing is compliant, with the IRT because they will assess the compliance within the 2026 decision process. But all in all, we are quite confident that there won’t be major change from that perspective. Second question regarding dividends. So indeed, as Philippe Pascal mentioned, it’s really a key matter and a strategic priority for us to, secure the financial contribution of our international assets and from that point of view, both TAV and GMR. We are on a different timing for TIV and GMR even if in both case, it’s a question of capital allocation also.

But regarding TIV, the Board of Directors, maybe as you saw in their disclosure yesterday night, intend to propose a dividend out of twenty twenty five full year net income. So this should be a topic in the really in the short term. Once again, on the question of dividend payment is a question about capital allocation. Therefore, the payout at the end of the day will be considered in view of CapEx, debt and other financing needs to prepare the future of the company. And just maybe to remind you that historically, the payout of TAV was 50 percent.

So this is for TIV. Regarding GM GMR, indeed, as you know, it’s not something new. Our priority is to deleverage the the company. GMR went through, over the past few years, heavy CapEx, phases. Our objective is to reduce indebtedness with the combination of cash inflow increase, with activity with lighter capital needs.

It would be also, possible to have a look at minority stake monetization receive some cash at Gala level. Both partners, so ADP and the our co shareholder, we are fully aligned on this strategy. And our common goal would be that GMR Airport is in a position to deliver positive free cash flow to equity at the holding level towards the end of the decade. So no change compared to what Philippe mentioned during the annual results, maybe one supplementary element. GMR has indicated that IderaBad should pay dividends to each shareholder at the end of the financial year subject to further approval.

Dario Malone, Analyst, BNP Paribas: Cool. Thank you.

Moderator, ADP Group: Thank you. We’ll take our next question from Dario Malone of BNP Paribas. Your line is open. Please go ahead.

Dario Malone, Analyst, BNP Paribas: Hi, good morning. Two questions from me. One, more high level in terms of risk to the corporate tax in France or increase in concession tax. What is your what is the current status? What how much shall we worry about, you know, this risk going forward?

And then sorry to come back on the CapEx. Unfortunately, it’s quite difficult for us not to model what we read in the press. But regarding this consultation with Charles de Gaulle on Charles de Gaulle, the on the press, I read CapEx could be between $3,500,000,000 and $4,500,000,000 until 02/1935 to expand the airport. Could CapEx be materially different from this level, Or that is a reasonable range? Thank

Crystal, CFO, ADP Group: you, Daniel, for your question. So regarding taxes, clearly, to be transparent, there is always a risk because the government always has the possibility to include, something in the loop. But maybe just to remind you what we already went through over the past few months. So there was a new infrastructure tax introduced at the beginning of twenty twenty four for an amount of EUR 1 and 30,000,000 to 140,000,000 per year. On that for that tax, we consider that we have now fully offset the regulated impact of the tax through tariff increase made both in 2024 and in 2025.

Second in Item, the temporary income tax increase, which was introduced by the French Finance Act for 2025, but it was introduced for 2025 financial year only. So when you look strictly at the current law, it’s a temporary contribution that will represent an impact for us from EUR 110,000,000 to EUR 120,000,000. So even if the tax in the finance act for 2025 is defined as temporary, nothing at the end of the day prevents the government from introducing a similar surplus in the finance bill for 2026. But to our knowledge, it’s not the case for the moment. Third element in terms of tax, it was the funding of security activities.

You also know that until 2024, the French state covered 94% of the security cost borne by ADP. The recent finance act provides that this coverage drops to 92%. It represents an impact, and just to remind you some of the figure of EUR 12,000,000 on a full year basis for us. And then the third the fourth three elements in terms of tax is related to aviation tax. This tax is borne by the airlines, so hence impacting ADP only indirectly.

For the moment, the first impact in terms of traffic relates more to regional airports and small airline. As for us, we haven’t seen any impact of in terms of demand, and we continue to see strong demand for aviation. So all in all, there were there were already over the past few months, major changes implemented by the government. It’s still a possibility for them to implement additional measure, but nothing to know to our knowledge so far. Regarding your second question in term of CapEx consultation.

So indeed, we have launched a consultation in CDG quite recently. There was a figure, disclosed the one that you, that you mentioned. Once again, the consultation gives the vision target, But this vision is very important that you keep in mind that the vision is modular and feasible. So that means that we can adapt the pace of the investment. And clearly, can there be materially changes?

That was your question. Yes, there can be because the level of CapEx will necessarily be adapted depending on the level of tariff and the level of WACC are able to have in the it’s in the in the discussion. It’s a total global balance, economic balance. It’s an equation. So at the end of the day, yes, if we don’t have favorable tariff increase or a favorable work, yes, this amount can change.

And also in the modularity system, the positive element for us is that we are able to adapt the pace of investment depending the pace of business. So we are able to accelerate or slow down those investment depending on the level of traffic. This is really the key difference, with the previous project of Terminal 4. We are here in a modular and sizable project.

Dario Malone, Analyst, BNP Paribas: Okay. Thank you, Crystal. Good luck.

Crystal, CFO, ADP Group: Thank you.

Moderator, ADP Group: Thank you. We’ll take our next question from Jose Manuel Arroyos of Santander. Your line is open. Please go ahead.

Graham Hunt, Analyst, Jefferies: Good morning. And first

Jose Manuel Arroyos, Analyst, Santander: of all, congratulations, Crystal. I ’m afraid I have an accounting question. I’m having issue reconciling the like for like performance of the retail segment, and I need a bit of your patience. Correct me if I’m wrong. There are three reclassifications since the q four last year.

First, we had the addition of SDA Croatia. Second, we had the addition of TS and Paris Experience Group. I think both are relatively straightforward and very clearly disclosed in the materials. But I’m having issue with the other reclassification that there is the other income line in the segment. Some revenues have been moved to the other hospitality and retail revenue.

And I don’t know what the value of that reclassification is. I don’t think this is disclosed. And, more importantly, I wanted to ask you for the substance of this, reclassification. Is this revenue that has been reclassified from the other income a regulated income stream or nonregulated income stream? It’s think it matters in order for us to put a value on on the, you know, revenue, EBITDA, free cash flow that may come from this reclassification.

Thank you so much, and sorry for the for the accounting question.

Crystal, CFO, ADP Group: Maybe I can let Cecil answer to your question. Jose.

Cecile, Moderator/Host, ADP Group: This is something that we will have to check and get back to you, in a in a second step more precisely, I’m afraid. Yeah. I’m sorry. This is a frustrating I understand. Answer for you.

Jose Manuel Arroyos, Analyst, Santander: I understand.

Moderator, ADP Group: We’ll now take our next question from Ashish Khitan of Citigroup. Your line is open. Please go ahead.

Ashish Khitan, Analyst, Citigroup: Hello, everyone. Thanks for taking my question. I have two questions. One is your on the EBITDA outlook growth of more than 7% this year. So just wanted to understand that in this outlook, what contribution have you factored in from TAV, given that the TAV EBITDA outlook range is quite broad between $520,000,000 to $590,000,000?

And the second is what are the major headwinds you expect in the X time sales per bank’s growth for the rest of the year given that it is already ahead of the outlook provided for the year?

Crystal, CFO, ADP Group: Maybe, Ceci, you can take the first one in term of EBITDA, and I will take the second one. Yes. You go ahead. Start with the So the second one, if I’m not mistaken, was regarding the SPP guidance. Yes.

Ashish Khitan, Analyst, Citigroup: Right.

Crystal, CFO, ADP Group: Yes. Yes. So indeed, SPP guidance. So as you saw, we posted a very strong performance at the end of the of Q1, so EUR 33.4 per pack. This is clearly a very good start to the year.

Also more, as you know that we were facing headwinds with the full year effects of the reopening of terminal two AC, the work in Terminal 2 E K, but we have managed to mitigate mitigate those headwinds, especially with pop up stores, which have contributed also to this performance. All in all, despite those positive elements, we have considered that it was not appropriate to revise the guidance. So the spell per packs for 2025 is still expected between EUR 31.8 to EUR 32.4 per packs because of two elements. First of all, it’s just the first quarter, so a little bit early in the year to draw a conclusion. And all the more second element, as we are in a uncertain macroeconomic context, as I mentioned during the first part of this call regarding The US macroeconomic and the impact it could have on SPP.

So even if at the moment, once again, there is no signal of negative impact of the current situation, We have considered that it was better to stay cautious regarding our SPP guidance that has already been upgraded, I remind you, at the beginning of the year.

Cecile, Moderator/Host, ADP Group: And so your question, I’m afraid, can you please repeat it? I did not get it. I think it was in accounting and detailed numbers

Unidentified Speaker, ADP Group: of my It was on

Ashish Khitan, Analyst, Citigroup: the EBITDA outlook. So you have a growth outlook of more than 7% for ADP. So just wanted to understand what is factored in that guidance on the for TAV, given that TAV has a broad outlook of $5.20 to $590,000,000. Can you provide

Cecile, Moderator/Host, ADP Group: you. So first, maybe first item to keep in mind is the fact that this EBITDA guidance is at constant scope, meaning that the contribution of the newly acquired companies, PS and PEG, are not included in this guidance. You also have in mind the one off items that we that impacted the basis of comparison in 2024. And then regarding TAV, well, the broad guidance that they have given is also perfectly commensurate with our own guidance, so no specific new message around here.

Unidentified Speaker, ADP Group: Okay. Thank you. Thank you so much. We’ll

Moderator, ADP Group: now take our next question, a follow-up from Christian Nadelco of UBS. Your line is open. Please go

Christian Nadelcu, Analyst, UBS: From the beginning of the year, the euro appreciated versus the dollar or the renminbi by around 10%. Just looking at the long history, could you tell us what’s the ballpark rule of thumb when the euro appreciates in that range? What’s the headwind to retail spend per packs? I’m having in mind, U. S.

And China are, I believe, the two nationalities with the highest spends highest retail spending in France. And secondly, just coming back on extracting more cash from TAV and GMR. Now getting the dividend from TAV definitely should help, but how should we think about the Antalya stopping temporary the dividends paid to TAV in 2027 and 2028? And I believe they are getting somewhere around 80,000,000 to €100,000,000 per year, and they’re fully consolidated in your accounts. So aren’t these two elements offset each other, 2027, ’20 ’20 ’8?

Or am I missing anything here? Thank you.

Crystal, CFO, ADP Group: Yes. Thank you, Christian. So maybe beginning with your second question regarding Antalya. So indeed, the financial performance was necessarily and mechanically affected by the important phases of investment that they went through over the last few years. So as you saw and as I presented, the new capacity expansion has been opened very recently.

So it has an impact the financial performance, but it’s not a fully integrated company. It’s we are in a joint venture with Fraport, and it’s an equity accounted subsidiary for TAV. Regarding your first question in term of FX change, so clearly, yes, indeed, there has been some variation recently in term of FX range. It’s a little bit complicated to give you a specific correlation and sensitivity on the FX FX impact on the spend per tax. Once again, it’s something we are going to monitor.

For the moment, we haven’t seen any impact on. You saw our strong performance at the end of of the the period. Maybe let me just remind you also in terms of FX rate because it’s an important element in our account regarding TAV also because we are thinking often of the fixed rates at the Paris level for the STP, but there is also some positive impacts of the depreciation of the Turkish lira compared to The US compared to the dollar. Sorry. And as you know, you know the mechanic, one third of revenues of TAV are you are linked to the dollar dollar linked currency, one third euro, so up currency, two third linked to up currency.

But at the same time, most of the OpEx basis is in Turkish lira. So the depreciation of the Turkish lira compared to the dollar will lead to a positive impact. I just even if it was not exactly your question, I think it was important that I think so you have in mind also that there can be positive element.

Christian Nadelcu, Analyst, UBS: Thank you very much. That’s very helpful. And apologies, just if I look at the acquisitions in retail, and please correct me if I’m wrong, but I think there were that was EUR 40,000,000 roughly around EUR 40,000,000 of revenue contribution in Q1. Could you extrapolate that for the full year? So is that a €200,000,000 revenue for the full year and the EBITDA margin should be 20%, thirty %?

Could you give us any color directionally how we should think about the contribution on EBITDA and revenue for the full year? Thank you.

Crystal, CFO, ADP Group: Yes, yes, yes. So just to give you some numbers. So when we integrate our two acquisitions made at the end of last year, so Paris Experience Group and PS, So in 2023, the total revenues for those two entities amounted to EUR 150,000,000. As we said, I think it’s not a new message also, but the contribution of those entity will be relative on EPS, but in the midterm. What is really important, so we are in a ramp up phases.

And what’s really important, it’s not to have a look just as the stand alone financial performance of those two entities, but to see more broadly and more largely the contribution it can those entities will have also on the SPP. Indeed, the strategic rationale also for those acquisition was to benefit from the customer bases of those entities to bring some very high level contributive passenger inside our terminals. So at the end of the day, which can have a positive impact on the SPP. So having just a look at the stand alone performance of these entities would wouldn’t be, sufficient to understand the overall contribution, of the of those entities on our global performance.

Christian Nadelcu, Analyst, UBS: Thanks very much.

Moderator, ADP Group: Thank you. That was our last question. I will now hand it back to Cecile Cambro for closing remarks. Thank you.

Cecile, Moderator/Host, ADP Group: Okay. Thank you. This brings indeed our presentation to a close. So thank you all for joining us today. Of course, we will continue to dialogue with you, analysts and investors in the coming weeks through roadshows and conferences.

A quick reminder, our Annual General Meeting will take place on the May 15, and our first half results will be published on the July 30. And we look forward to seeing many of you soon. And of course, don’t hesitate to reach out to Elliot or myself for any follow-up question. Thank you again, and have a great day.

Moderator, ADP Group: Thank you. This concludes today’s call. Thank you for your participation. You may now disconnect.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.