Earnings call transcript: Avolta Q3 2025 sees strong growth, stock rises

Avolta AG reported robust financial performance for the third quarter of 2025, marked by significant organic growth and strategic wins that drove a 2.16% increase in its stock price. The company announced a total turnover of CHF 10.6 billion, with a record equity free cash flow of CHF 503 million, signaling strong operational efficiency and financial health.

Key Takeaways

• Avolta achieved an organic growth rate of 5.4% and expanded its EBITDA margin by 30 basis points to 10.2%.
• The company’s stock rose by 2.16% following the earnings announcement, reflecting positive investor sentiment.
• Significant strategic wins include new concessions at JFK Airport and a growing Club of Volta membership base.
• The company confirmed its annual outlook of 5-7% organic growth and EBITDA margin expansion.

Company Performance

Avolta AG demonstrated strong performance in Q3 2025, with growth driven by strategic initiatives and operational efficiencies. The company expanded its market presence, particularly in North America, and continued to innovate with digital transformation efforts. Despite flat passenger traffic in some regions, Avolta maintained positive momentum through geographical diversification and cost optimization strategies.

Financial Highlights

• Revenue: CHF 10.6 billion
• Organic growth: 5.4%
• EBITDA margin: 10.2%, a 30 basis point increase
• Equity free cash flow: CHF 503 million, the highest in the company’s history

Market Reaction

Avolta’s stock price experienced a 2.16% increase, suggesting investor confidence in the company’s strategic direction and financial health. This positive movement aligns with Avolta’s recent achievements and future growth prospects, positioning it favorably within its 52-week trading range.

Outlook & Guidance

The company reaffirmed its outlook for 5-7% organic growth annually and plans to expand its EBITDA margin by 20-40 basis points each year. Avolta also anticipates improvements in equity free cash flow conversion by 100-150 basis points, driven by continued investment and strategic initiatives.

Executive Commentary

CEO Xavier Rossinyol emphasized the company’s commitment to growth, stating, "We continue developing all the regions in the last few months." He also highlighted the importance of digital transformation, noting, "The digital and data transformation will improve our capacity to deal better with passengers." CFO Yves reiterated the focus on investment, saying, "Our priority remains investment into growth."

Risks and Challenges

• Potential stagnation in passenger traffic growth, particularly in North America.
• Regional performance variability could impact overall results.
• Macroeconomic factors and competitive pressures in key markets.

Q&A

Analysts inquired about North American consumer sentiment, the strategy behind the Club of Volta loyalty program, and the company’s approach to mergers and acquisitions. Executives addressed these questions, providing insights into Avolta’s strategic priorities and capital allocation policies.

Full transcript - Avolta AG (AVOL) Q3 2025:

Valentina, Chorus Call Operator, Chorus Call: Ladies and gentlemen, welcome to the Avolta AG Q3 trading update conference call and live webcast. I am Valentina, the Chorus Call operator. I would like to remind you that all participants will be in listen only mode and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. Webcast viewers may submit their questions or comments in writing via the relevant field. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast at this time. It’s my pleasure to hand over to Mr. Xavier Rossinyol, CEO of Avolta AG. Please go ahead.

Xavier Rossinyol, CEO, Avolta AG: Good morning, good afternoon, good evening, welcome and thank you for being today in these first nine months 2025 results for Avolta. I’ll go straight to the presentation to the highlights. Nine months we have reported for the first nine months of the year a total turnover of CHF 10.6 billion, which is a growth of 5.8% versus last year and an organic growth of 5.4%. Our EBITDA margin has reached 10.2%, an expansion of 30 basis points versus the same period of last year and with that is now I think 16 quarters in a row where our EBITDA margin has expanded year on year. Thanks to this expansion and other optimization measures, we have reached our highest ever equity free cash flow, reaching CHF 503 million on the first nine months. Thanks to that, our leverage has decreased from 2 times, reaching 1.9 times, well ahead of expectations.

Particularly impressive, taking into consideration that we continue a growing policy of dividend distribution and the share buyback for second year in a row. October has been a very good month with a 6% organic growth. Quarter three is the summer month. The organic growth as expected for us was a little bit lower than in the previous quarters because particularly in the touristic airports where the capacity in summer months is super high, it makes more difficult the comparables. October clearly supports the full year outlook and we feel very confident on reaching the outlook for the year and for the years to come. If we move to the next slide and we go on a regional basis, we see a strong growth in Europe, Middle East and Africa.

Probably where the comparables were more challenging is precisely in Europe, particularly in south of Europe where we have the highest percentage of tourist destinations and again a very strong and acceleration of the growth in October that we expect to last for the remaining of the last quarter. North America that has been flattish for most of the year as a consequence mostly of lower traffic and poor consumer sentiment. It shows a very interesting turning point in October with for first time in the year a positive growth and we believe the quarter four will also be positive. LATAM has been very strong the whole year. Argentina, which is one of our main countries in Latin America, it’s ahead of historical numbers.

Compared to last year, the comparables were particularly difficult in summer simply because the exchange rate difference between dollar and peso made last year an extraordinary year. This effect is disappearing now because, as you know, Argentina shows a stable microeconomics. That’s another explanation of a slightly weaker summer. Again, a strong start of quarter four. APAC remained strong for the entire year, very valuable, particularly because the Chinese consumption has not recovered. Overall, I think the key message is that Avolta is precisely this. Of course, you will have regions or countries that will be weaker or stronger, and the same thing on months or quarters. If you look at Avolta in its entirety and for the full year, we will be delivering in line or ahead of the outlook thanks to our geographical diversification and thanks to our business segment diversification.

I think, taking into consideration how volatile the world is, it is quite an achievement from a business development point of view. We continue developing all the regions in the last few months with some developments in EMEA. We continue with the expansion of our hybrid concepts in North America. We announced yesterday a very big win in Terminal 8 of JFK. We had already been awarded significant parts of the food and beverage and convenience business in that terminal, and now it was confirmed we have won also the duty free contract in that terminal, which will make, together with the other wins we had over the year, JFK as one of our key locations in North America. In EMEA, apart from extending contracts, we have also exited one contract. It was a very particular situation where we sold back to the airport the assets and the concession agreement.

It is a very particular situation. We do not expect that to be repeated, but that is what explains the movements on the line of M&A. That effect will disappear after 2025, and you shouldn’t see it anymore. If we move to the next page, I think it’s very important that we continue with our data and digital transformation. Club of Volta has reached another record number of members, reaching already 15 million members. This is something I keep repeating. How important today, but particularly in the future, will be this better understanding of the customers, this better understanding of the passengers that are not customers, how the loyalty program allows a higher intimacy with those passengers.

This data and digital transformation we’ve been doing over the last two years, and that we will continue to do in the years to come, will sustain and in some cases maybe accelerate our capacity to achieve the outlook we’ve been providing for the mid and long term of the company. In Club of Volta, we continue expanding the partnerships. Club of Volta is about delivering value to the members, and you can do that better if you have partnership with airlines, with airports, with lounge operators, and in some cases even converting our Club of Volta in a platform that other operators might want to use. That is a win-win situation for everybody. The passenger wins because they get services, upgrades, a better commercial offering in more places.

The partners also win because they benefit, and we definitely win because we do control Club of Volta and we do have access to that data. If we move to the next slide, we are consistent. We repeat once more that despite all the volatility in the world, we confirm our outlook for 2025 and for the years to come. Our outlook is a turnover organic growth of 5% to 7% per year. We’ve been achieving that the last three years. An EBITDA margin expansion of between 20 and 40 basis points per year. We have achieved that every single year. On top of that, an expansion on the equity free cash flow conversion of between 100 and 150 basis points. As you know, this year like last year, we are clearly overachieving that target.

The combination of a healthy growth in revenues together with a very strict cost discipline, cost optimization, productivity plans, and there is much more that can come in the coming years. In the next page, again our confirmation of our capital allocation policy. First target is to invest in the business: new shops, new restaurants, digital transformation, business development, new concessions, and potentially selective accretive M&A. Always finance with the balance sheet of the company and not with new equity. Second, deleveraging, strict financial discipline in the balance sheet. If we expand on that, we are already clearly ahead of initial expectations. The last commitment to shareholders: return and dividend of one third of the equity free cash flow. Every year, as you can see, equity free cash flow is growing, so dividend will also grow and share buyback when there is enough excess cash.

We did one last year, and we are going to finish the one of 2025 as expected with about CHF 200 million invested on that plan. Now I hand over to Yves.

Yves, CFO, Avolta AG: Thank you very much, Xavi, and good morning and good afternoon to everybody on the line, and thank you very much for joining us today. You see on the slide the KPI of the financial performance for the nine months of 2025. I will not go into the details here. We have dedicated slides for each element you see on the slide. Let me start here by stating that I’m very pleased with the financial performance of the organization over the last nine months on all key aspects, be it on the top line, on the turnover, the profitability, but especially the cash flow. Last but not least, also the balance sheet with the leverage going one by one. Moving to the next slide with the top line performance, the group has generated over the nine months CHF 10.4 billion with an organic growth of 5.4% for the nine months.

We have seen some, as was expected, headwinds from an FX point of view. That obviously impacted the reported growth year to date, and we expect that to continue also for the full year. Having said that, we see some very positive momentum into October with an organic growth of 6% periodic in October specifically, also driven by some inflection in North America, which comes with an organic growth for the month of positive 3%, a significant improvement versus the flattish performance we have seen for the first nine months of this year. Moving on to the next slide with the profitability and also the cash flow, EBITDA margin has improved by 30 basis points for the first nine months, and this compares to the 20 to 40 basis points guidance we provide in the medium term. Bang in line in the middle of the outlook we have provided.

The third quarter specifically is even slightly better with an improvement of 37 basis points on the quarter versus the same period of last year. We have decided here, and you will find it on the right-hand side of the slide, also the historical EBITDA margins per quarter year to date from 2022 to 2025, and what you can clearly see is the continuous improvement we have executed. Xavi has mentioned it, but to perform in line or even ahead of the outlook and the guidance we have provided back at the initial capital markets day when announcing the new strategy. For every single quarter from a profitability point of view, we have delivered.

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

Moving on to the next slide with the treasury overview, for me the second star leverage has decreased to 1.9 times. This is significantly lower than what we have done historically in our organization and it’s now in line with the guidance we have provided to 1.5 to 2 times as a target range. We have achieved that despite the fact that we have significantly increased the dividend payment this year and have progressed well on the share buyback program where we have bought back already by September $130 million of Avolta shares. The next point is the maturity profile. As you already know, very solid liquidity position. We have extended the maturity profile by extending the maturity on the RCF from original 2029 to now 2030. The conditions remain the same, so there’s no change in the margin we pay, but it’s again a five year maturity.

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

Xavier Rossinyol, CEO, Avolta AG: Thank you very much. I’m not going to read the slide. I think it’s self-explanatory, just a couple of words. Consistency and predictability. As Steve just said, I think you can see quarter on quarter for the last three years a very strong performance in the company with volatility like any company in the world, but lower volatility than what you see in the market. So Avolta keeps, thanks to our size, thanks to our geographical diversification, thanks to our segment diversification, being much more predictable than many or most of the players in our industry or ecosystem. With that and our commitment on keep delivering on the capital allocation policy, I think we can open for Q&A. Thank you very much for your attention so far.

Valentina, Chorus Call Operator, Chorus Call: We will now begin the question and answer session. Anyone who wishes to ask a question may press and one on the telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press and two. Questioners on the phone are requested to disable the loudspeaker mode and eventually turn off the volume from the webcast while asking a question. Webcast viewers may submit their questions in writing via the relative field. Anyone who has a question may press and one at this time. The first question comes from Manjari Dhar from RBC. Please go ahead.

Good afternoon, Xavier, Yves, thank you for the presentation and thank you for taking my questions. I just had three questions, if I may. The first question is on North America. I was just wondering if you could give any color on consumer behavior and spending patterns in the region and whether you’ve seen any changes accompanying the inflection in trading in October. My second question is just on Q4. I wondered if you could give us any color on the shape of the comparable from last year and maybe how October last year compared to November and December. My final question is just on Club of Volta. I was just wondering if there are any regions or customer demographics with whom Club of Volta has resonated better and if there are any particular customer demographics where you still see an opportunity. Thank you.

Xavier Rossinyol, CEO, Avolta AG: Thank you very much. The general mood in North America for travelers for most of the year, and I’m focusing now on domestic travel much more than international travel where the behavior has been more positive along the year. On domestic consumers, what we have seen is, one, they travel less. We have seen consistently either the same or a slightly negative number of passengers in North America, and along with that, a sluggish, flattish spend per passenger. As you know, we target a positive spend per passenger. What we have seen in October is that some of the early indications that the mood on consumption might be strengthening. You could say too early to call, potentially, yes, but it’s pretty consistent on the different segments of business and the different airports. When you see that consistency, historically it continues on that level.

We are cautiously optimistic in North America on the shape of comparables in quarter four. We should be better than in summer, because summer, as I said hopefully clearly, the number of passengers are very close in touristic destinations to the full capacity of the airport. It’s as simple as the airports are so crowded that to achieve the type of growth we have had before summer and hopefully after summer is not possible to do it in the peak season. That is pretty consistent over the years when you analyze touristic airports. That’s why we believe that the comparables in quarter four in that sense are easier. That’s why I said we feel very confident with the outlook of the full year. Yes, Club of Volta works very differently in different places, in different segments, and different types of customers.

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

It’s amazing when you see the numbers, and it’s amazing what we are learning and how that data can help us to improve the business. The Club of Volta in its current form has been in place only for 12 months. It’s way ahead of our expectations. Actually, now we are playing a little bit of a catch up game, particularly on the data and loyalty program team members where we have to reinforce them to catch up with and to take full advantage of what we are learning. What is clear to us is that this program and the other data and digital initiatives are clearly supporting the way we do business. We keep learning a lot. We need to do much better. We need to use the data better, we need to extract more value from the data.

We need to use that data in a faster way in our shops and restaurants. It’s a learning process, and every month we do it a little bit better. It’s just the beginning. Over the next two, three years, I’m convinced that this transformation could be absolutely essential on our financial performance to come.

Great. That’s very clear. Thank you.

Thank you.

Valentina, Chorus Call Operator, Chorus Call: The next question comes from Harry J. Gowers from JPMorgan Chase & Co. Please go ahead.

Yeah, good afternoon. Even Xavi. Two questions if I can. I mean, Xavi, you touched on a little bit at the start. There was this -1% M&A another line in the revenue bridge for Q3. Maybe you could split out just in terms of what’s actual M&A in there, in terms of the impact from the APAC acquisition at the end of last year versus what’s like restructurings or, you know, selective exits. What should we be modeling for that line on Q4? Second question, you’ve just done over $500 million equity free cash flow for the first nine months of the year. I think consensus is at about $460 million in terms of the latest number for the full year. Last year in Q4, if the numbers I’m looking at are correct, it was about a $20 million free cash outflow.

Should we expect a similar kind of outflow number in Q4 this year? Do the consensus cash numbers therefore need to come up a little bit for the full year? Thanks a lot.

Xavier Rossinyol, CEO, Avolta AG: Thank you. The concession we sold is or was in a touristic destination. It’s super cyclical. It’s probably one of the most cyclical, sorry, seasonal operations we had. The major effect, of course, was in summer. It will be slightly negative maybe the last quarter, but then it’s fading away and M&A should not be any more a factor unless we do something else. If you remember, we did the one in Asia at the beginning of the year. By the end of this year it will also disappear. You could have a slightly negative in quarter four, practically nothing in quarter one next year, and then this factor or this element is eliminated. For the second question, I’m going to give it back to Yves because if I answer, the team might accuse me of being over optimistic.

Yves, CFO, Avolta AG: On the equity free cash flow for the full year, you’re absolutely spot on. I mean we have generated $503 million in the nine months, 2023. Q4, as you have mentioned, rightly so, is typically flattish to slightly negative. Consensus, if I’m not mistaken, is at $480 million. Probably $460 million. Probably somewhere between the $460 million and what we have reported for the nine months is probably a good approximation, maybe a little bit on the upper end.

Xavier Rossinyol, CEO, Avolta AG: We do not expect anything particularly exceptional in the last quarter. I think with that alone you can make your own estimation.

Understood. Thank you, guys.

Thank you.

Valentina, Chorus Call Operator, Chorus Call: The next question comes from Joern Iffert from UBS. Please go ahead.

Hello and thanks for taking my questions. Would be three, just really quick ones. Just to double click on the statement you just made on the discontinued operations which you have put in the M&A line and totally understand this. Just to double check, is this something where you say, look, we will have more portfolio cleanups in 2026, 2027 or is it really done now that we should not see any discontinued operations from concessions anymore in 2026 and 2027? This is the first question if I would take them one by one if it’s okay.

Xavier Rossinyol, CEO, Avolta AG: Now look, to be clear, we always do some portfolio cleanup. Typically that goes into change of scope. This was very particular because from a legal point of view, we sold. We didn’t stop or we didn’t close the operation, or we didn’t just let the contract expire. We actually reached an agreement with the airport to discontinue the operation on a sale of assets and concessions. Because of that, we have to classify it as M&A. Any other discontinuation, which materially shouldn’t be very material, but you cannot disregard, we will clean up operations because sometimes you still need to do that because of structural changes on the markets, etc. They will go in change of scope. We still believe change of scope, new wins, potential closes or losses, overall should be a net positive effect.

We expect that on top of the like for like, we do have some positive change of scope. In M&A, we do not expect you to see more sales going forward. I mean, you can never say never, but it should not be something that is repeated on a regular basis.

Thank you for this. The second question please. When we look on retail trends going to 2026 here and there, and depending on the category, in particular on food and beverage, it could become a bit more deflationary. The question is what is roughly the pricing contribution, not the check per passenger, but the pricing contribution versus the volume contribution? Organic growth in 2025 and how do you expect this to develop in 2026?

For 2026, it’s too early for me to disclose that. We are doing now the budget, and we will be finding some of the key elements of that in the next two months. If we look at what we expect for 2025, what we have seen is basically you could take the organic growth. A third approximately in our portfolio comes from, sorry, two thirds come from passengers, one third comes from spend per passenger. Of that, I would say that half is pricing and half is volume. I should now make a 300 pages disclaimer because that depends on the different locations. It’s not the same thing duty free than duty paid or food and beverage. It’s not the same North America than Europe, et cetera, et cetera.

As a rule of thumb, for whatever that is worth, if you look at our portfolio 2025, more or less, the big picture should be what I just described, with many exceptions, some up above that, some below that.

Thanks. The last question is based on the very interesting turnaround in North America in October of the +3%. When you zoom in North America, where in particular do you see these incremental sales growth coming from? Is it from food and beverage? Is it from classical fair retail? Now you have more duty paid, is it more on the high end of the consumer segments? Is it more on the low end? If you have some more color would be appreciated.

Smart question. Look, if you look at the entire behavior year to date, you can see that in general across the U.S. you see, number one, a stronger duty free, international travel, higher item price or value. Therefore, we have consistently seen that the people with more disposable income have been more resilient on their consumption pattern. We have seen a specific slowdown in the lower end of the available income. When you zoom in both in food and beverage and convenience, you see that there is a prediction, a trend to focus more on more affordable products. What we see in October, and as I said, it’s a good indication because it’s pretty consistent across the two main segments in domestic convenience and food and beverage, and also mostly across the country, is that there might be a little bit more inclination to upgrade a little bit the consumption.

It feels there is a slightly better mood on the American consumer across the board. We monitor that in a very, very detailed manner of course because to manage that, some of the things I said could have implications on the pricing policy, could have implications on the assortment, etc. We always then try to maximize. There is the specific geographies. It’s been very clear during the year that there have been less conventions during the year and that means less travelers moving from one place to the other. The airports reflect also the general status of the economy. Overall, I think October underlying trends are mostly across the different segments.

Thank you and apologize. Just one last question if I may. On the equity free cash flow, which was a clear positive of course in the nine months, a strong result, just to double check something going to 2026. I mean I know you have confirmed your guidance cash conversion will further improve. Really just double check. It’s an absolutely clean number. No one offs, nothing where you can say next year, okay look, I mean we had this in this special positive in 2025, so it’s really the not in brackets the progress you are seeing down the road, and 2026 would show further improvements. Just double check this.

Yves, CFO, Avolta AG: Yes, absolutely. This is fully correct. There is nothing specific or extraordinary in the nine months 2025 equity free cash flow.

Great, thanks a lot.

Xavier Rossinyol, CEO, Avolta AG: Thank you.

Valentina, Chorus Call Operator, Chorus Call: The next question comes from Jon Cox from Kepler Cheuvreux. Please go ahead.

Yeah, thanks. Thanks very much. I have a couple of sort of sets of questions. Maybe I’ll start with on the cash side of the situation, which was excellent print from you guys. I think beating consensus by about $15 million on that free cash flow line in Q3. In the first nine months of the year, your conversion ratio is about 310 basis points higher than it was in the first nine months of the year. Clearly, you’re going to be well above your guidance of 100 to 150 basis points increase in conversion annually. I wonder if you can just confirm that. I think it’s pretty obvious. The second part of the question is can you still maintain this sort of 100 to 150 basis points improvement next year given the fact that you have obviously done much better than you expected in this year?

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

Yves, CFO, Avolta AG: Thank you very much. Look, on the equity free cash flow, what we are providing is a medium term outlook. Yes, the equity free cash flow conversion improvement we are guiding for is 100 to 150 basis points. So far we have delivered or over delivered on that in every single year over the last three years, typically over the last years. What we said also at the end of a year is to take that as a new basis for the years to come. In that sense, in a way, we have upgraded the guidance is one way to look at it. For the moment, I would really love to maintain the guidance of the medium term, which among the top line and the EBITDA margin improvement is still the 100 to 150 basis points of equity free cash flow conversion improvement in the medium term, year on year.

We are not providing guidance for specific years, not for the full year and also not for next year. As we have discussed before, yes, for this year, the equity free cash flow for the year will be improving by amount. The amount you have mentioned before with Q4 being flattish to slightly negative in regard to equity free cash flow. For the second part, the buyback. We have the capital allocation policy out there. It’s very clear in the three elements. Xavi went through them before in the presentation. It’s also very clear in regard to the hierarchy of that. The priority number one remains investment into growth, into accretive and attractive opportunities which are out there. That includes small to medium sized bolt on acquisitions, cash financed without additional equity. Number two is strengthening the balance sheet. We are at around 1.9 times leverage.

The guidance is 1.5 to 2 times. We are roughly in the bandwidth of our optimal capital allocation, sorry, leverage target range we want to achieve. Now, having said that, in the absence of opportunities of investments and reaching the capital allocation policy target leverage, we can obviously consider to further do share buybacks as you have elaborated before in the question.

Okay, just a follow up on that group. For the time being you’re confirming next year, the medium term, that is 5 to 7% organic, 20 to 40 bps margin improvement. You’re not going to say whether you can do another 100 to 150 basis points, just to be clear.

Xavier Rossinyol, CEO, Avolta AG: Yes, we are saying yes.

Yeah.

The overperformance of 2025, the overperformance of 2025 and 2024, it’s consolidated, and on that basis we expect to keep growing per year 100–250 basis points on this new increase conversion.

That’s very good news. Thank you. Thank you. Questions then on the top line and of course there’s always a bit of fly in the ointment when it comes to looking at the results. The like for like at 2.7% seems to be below the weighted average of Q3. Have a look at the IATA and maybe this is just a broader question. Xavier, are you happy with the amount of the way things are going in terms of, you know, you’ve elaborated it really well. The consumer’s changing, he wants experience or she wants experience, food, mixing things up, making things exciting at the airport.

Are you satisfied with the speed of how things are going just given the fact that like for like was only 2.7% in Q3 and I know you’ve said look, it’s difficult to grow too much because airports are full and all that sort of thing. It just seemed a pretty slim number given all of the things that you are doing to excite the consumer at the airport, and then with Club of Volta, etcetera. That’s the first top line question. Second one, did I hear you right? You’re just saying that the Chinese passengers are just not coming back at all for your business. Of course I know you weighted more Europe, North America, Latin America, but you’re just saying the Chinese are just not coming back for you at the moment. Thank you.

I’m never satisfied, neither with what we achieve or the speed in which we achieve it. I think anybody that runs a company, it should be the attitude. I always think we can improve things, we can do more. That said, I want to be very clear, don’t overthink on the performance of quarter three. We have the advantage of going down airport by airport, shop by shop, restaurant by restaurant, and we have a granularity that the market does not have. I appreciate that. When you look at where the like for like and the new concessions are happening, it’s really in quarter three, very much motivated by the specific comparables. If you take the quarter and you go per month or per week or per day or per weekend, you will even see more volatility.

I think what is important in Avolta and in the industry is to look at the full year, and on the full year we will be in all key aspects in the outlook. Look, if you do a very simple math that I think can be done even if you don’t have the granularity we have, and you add back North America to a more normalized growth, our growth this year, year to date, would have been organic, between 7% and 7.5%. We always said, look, it’s a range between 5% and 7% the years that you have parts of the business performing. You will have 5% in the years that everything performs well, you will have 7% or even more in some years. Five to seven, I think, with the realistic projection of our portfolio, is a good proxy of that.

The most important part is the like for like with some additional on new concessions. I am reasonably satisfied on the performance year to date. October is a very good sign that you can see that in lower season, or let’s say on quarter one, two, and four, you will always should have a slightly better performance than in quarter three on relative terms because of the seasonality. That said, I think we could do so many things better. We have so many areas where we can improve. We always focus, for example, on the digital and data transformation, on the consumer relationship. When you run smart tools, and we don’t need the most sophisticated artificial intelligence, just basic artificial intelligence can improve so much. Working capital management optimization, on how we design stores, and therefore improve the CapEx we use.

If we do more flexible stores with the use of new tools on the digital spectrum, we can refurbish the store with very limited CapEx just changing the digital content. The digital and data transformation will improve our capacity to deal better with passengers. It’s also part of the explanation of why we continue improvement in cost and productivity and we continue improvement in the cash flow generation. That’s why we feel comfortable with the three layers because we know what we can improve. We still have too many manual processes internally, and when you implement technology that is not even too expensive, you can reduce workforce, you can optimize processes, and you can have better outcome with the same or lower input. Overall, of course, if you charge cash for every quarter, for every month, for every day, then it’s a very difficult target to achieve.

Look at what we have been doing in the full year 2025, the full year 2024, in the full year 2023. It’s not my style to be over optimistic because, as I just said, there are a lot of things we can do better, but I think it’s undeniable after 16 quarters of improving quarter on quarter, despite sales, despite traffic, despite volatility, despite Middle East crisis, despite the underperforming in the U.S., I think this group shows a very strong capacity of generating results on cash flow. Sorry for the long speech, I didn’t want to do it because then I look, but I think there is a lot of room to improve over the next three, four, five years.

Thank you.

On China, sorry, I’m forgetting.

Look, Chinese passengers have changed in several aspects. Number one, where they go, they have declined in numbers. Definitely in North America they were never very big. In Latin America, less. In Europe than it used to be in 2019, slightly recovering in a few key cities in Europe, and in Asia is where the growth of Chinese has been higher, changing. A year they go more to Thailand, another year they go more to Japan. For example, in 2025, number of passengers are still reasonable. What happens is that the spend per passenger of Chinese today is the spend per passenger of most of the other Asian travelers. It’s not anymore materially higher than what it used to be. That’s why the performance of Asia is very good, taking into consideration that Chinese are basically kind of flattish on consumption. That’s what I tried to say.

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

There are two things you always need to consider, Avolta portfolio vis-à-vis the entire country. It’s true that in North America, it’s probably the place where it’s the closest because of our geographical spread across the country compared to other regions that might be less coverage. Look, different people use different sources of data. The U.S. is very particular. Typically, they don’t actually count passengers in the same way that you will do it internationally. It’s a good proxy, particularly the changes of trends. If you look at the same source, I would not pay so much attention to the absolute numbers because they have different methodologies of calculation. The reality is that in our portfolio, the number of passengers during 2025, it has been on average flattish with a few months negative and a very few weeks slightly positive. That is starting to change a little bit.

Together with that is a slight change on the mood of the passengers. We had in recent times a slightly positive spend per passenger in North America. Sorry, in the U.S. In Canada, it has been already positive, but in the U.S.

Right.

Thanks, really appreciate it.

Thank you.

Valentina, Chorus Call Operator, Chorus Call: The next question comes from Isacco Brambilla from Mediobanca. Please go ahead.

Hi, good afternoon everybody. Thanks for taking my questions. I have two. The first one is connected to the multiple concessions you have been awarded in the United States. Just if you can recall for us the time frame to keep in mind for the roughly 3% accumulated contribution targeted from the concessions awarded at New York JFK. For our model, what’s the timing we should keep in mind between next year and the following year?

Xavier Rossinyol, CEO, Avolta AG: Second question is a follow up on share buyback.

A technical detail. How should we think about the timing for share cancellation connected to the $200 million share buyback that is ongoing? Do you expect this to take place before the end of this year or early 2026?

Thank you very much for the questions. On the first one, as you know, over the last few months we have won significant pieces of business in different terminals in JFK. Those businesses come at different times, so there will be a starting of operations in some cases 2026, some cases 2027. I think the first full year where you will have everything included or at least almost everything will be 2028. It should be positive contribution in 2026 and it should be positive contribution in 2027. The second one probably you want to take.

Yves, CFO, Avolta AG: Sure. Thank you very much for the question. Look, the share buyback program, as you know, started at 31st January last for the entire year almost. It ends at some point in December. We do expect by then to have purchased the full amount of up to CHF 200 million. What happens then? That’s a technical element you need to ask. I don’t know the English, but I think a creditor call, and basically that also takes a couple of weeks. If basically the feedback is nil, we can cancel the shares. Technically, likely to happen at some point in early 2026.

Okay, very clear.

Very.

Thanks.

Valentina, Chorus Call Operator, Chorus Call: The next question comes from Elias Karin from Barclays. Please go ahead. Hi.

Thanks for the presentation and thanks for taking my questions. Apologies if you may have covered that. Just looking through your capital structure, obviously you’ve got maturities in 2026 and then 2027. Any particular plans to address those in advance? Any particular plans with regards to the type of instruments or currency that you can share at that stage? Obviously your liquidity is very strong. Thank you.

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

That’s very helpful. Thank you.

Thank you.

Valentina, Chorus Call Operator, Chorus Call: The next question comes from Alexandra Gaillard from BNP Paribas. Please go ahead.

Hi, good afternoon, this is Jaafar from BNP Paribas. Just had two questions, please. The first one is on JFK. Thanks for the pointers as to the timing. Now that we’ve had a lot of different wins communicated in a lot of different documents, can you help us with the aggregate picture of your market share at JFK? Because there was a status quo a few years ago that HMS Host was almost automatically losing share in food and beverage at the occasion of terminal redevelopments, etc. On retail it’s been less clear, but not necessarily big share wins. I know your U.S. market share. You’ve had a very clear message that you think it’s nudging up by a few decimals. Can we take the case study of just a big airport doing a couple of extensions and renewals and if you could help us understand what’s happened.

The small players win share. Did large global players win share? Did you take more than your fair share? Second question on supplier income, there has been some noise at one of your peers. Could you give us a Supplier Income 101 lesson please? For Avolta, how relevant is it? Is it more relevant in certain categories and certain geographies? Does it go into gross margins? I guess more importantly, has it changed at all in recent years? Thank you.

Xavier Rossinyol, CEO, Avolta AG: Thank you. First, the market share in North America on the three segments, duty free, food and beverage, and convenience over the last two years has been in North America slightly positive. In JFK it’s massively positive. We have won the vast majority of the three business segments, duty free of the different international terminals, everything except Terminal 1. In food and beverage and convenience, much more than, I don’t know what is the fair share? I would say much more than the average share we have in the group. Is that a proxy for the future? Of course not. I think we need to be realistic. JFK has been extremely successful. I think in the U.S. the hybrid and the cross sell and the opportunity to extract value from the different bits and pieces is maybe resonating better or faster than in other regions.

I think that is a competitive advantage. I think just being in new concessions and in renewals slightly positive, it’s good enough for me because I also think the people that talk about market share too much, sometimes they do lose sight of what is really important, which is financial discipline. This is about making profits, about making cash. For that we are extremely disciplined. Said that, I think in some aspects we are regarded by American airports a little bit more advanced and that’s why maybe we are winning a little bit more market share. It’s not my obsession. I typically don’t disclose it because what I do want is concessions that make incremental cash flow conversion. The second one, I don’t know if it’s for you on an accounting manner, I think yes.

Yves, CFO, Avolta AG: On the second question about advertising and promotions income, the way we reflect that is predominantly under turnover. There is a line called advertising and promotional income specifically. It’s sales and that line yields turnover. Sometimes in some cases it’s also price off and then reflected in the gross profit margin. That’s point number one. Point number two, the way we account for that, but basically for all other incomes and expenses as well, is we have dedicated processes which are very rigid. The advertising and promotions accrual specifically, but also then the invoices are accrued and invoiced not by the operating unit which is responsible for it, but by the shared service center. As such, you already have there a segregation of duty, which is very important.

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

Thank you. Very clear.

Thanks.

Valentina, Chorus Call Operator, Chorus Call: We now have a question from the webcast. Laura Bucher from Octavian asking, can you provide some color on the performance of the free duty acquisition?

Xavier Rossinyol, CEO, Avolta AG: Duty free is slightly negative versus expectations, not very materially, but basically it’s related to a lower than expected Chinese consumption. We were very reasonable. I think if you dig enough, you could see that the consideration for the acquisition was very reasonable, so we still are happy. Anything that relates to the Chinese travelers requires a lot of focus and a lot of work to fully maximize that. Thank you for the question.

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

Xavier Rossinyol, CEO, Avolta AG: Just big thanks for attending, for your questions, and if there are any follow ups, of course, Rebecca, Yves, and myself, we are at your disposal. Thank you very much. Never forget, if you travel by in one of our outlets, please become a member of Club of Volta, you will have a lot of advantages for that. Thank you very much.

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

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