Half Year 2026 Enav SpA Earnings Call

August 3, 2026

Speaker #1: Good afternoon, this is the chorus call conference operator. Welcome, and thank you for joining the ENAP First Half 2026 results conference call. As a reminder, all participants are in listen-only mode, and after the presentation there will be an opportunity to ask questions.

Speaker #2: Listen, to get...

Speaker #1: Should anyone need assistance during the conference call, they may signal an operator by pressing *N0 on their telephone. At this time, I would like to turn the conference over to Mr. Stefano Gamberini, Head of Investor Relations of ENAV.

Speaker #1: Please go ahead, sir.

Speaker #2: Thank you. And good afternoon, everybody. My name is Stefano Gamberini, and I'm the new Head of Investor Relations. So, welcome to ENAV's First Half 2026 results presentation.

Speaker #2: We will be hosted by our new CEO. They will walk you through the group's operational and financial performance for the first part of the year.

Speaker #3: Good afternoon, this is the Chorus Call Conference Operator. Welcome, and thank you for joining the ENAV First Half 2026 Results Conference call. As a reminder, all participants are in listen-only mode, and after the presentation there will be an opportunity to ask questions.

Operator: Good afternoon. This is the Chorus Call conference operator. Welcome, thank you for joining the ENAV H1 2026 results conference call. As a reminder, all participants are in listen only mode, after the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star N zero on their telephone. At this time, I would like to turn the conference over to Mr. Stefano Gamberini, Head of Investor Relations of ENAV. Please go ahead, sir.

Operator: Good afternoon. This is the Chorus Call conference operator. Welcome, thank you for joining the ENAV H1 2026 results conference call. As a reminder, all participants are in listen-only mode, after the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star N zero on their telephone. At this time, I would like to turn the conference over to Mr. Stefano Gamberini, Head of Investor Relations of ENAV. Please go ahead, sir.

Speaker #2: Then, following the presentation, we will have the usual Q&A session. Igor, over to you.

Speaker #3: Thank you. Stefano and good afternoon, everyone. Last May, the shareholders' meeting appointed a new board of directors, with Sandro Paparardo as chairman and myself as chief executive officer.

Speaker #3: Should anyone need assistance during the conference call, they may signal an operator by pressing star *0 on their telephone. At this time, I would like to turn the conference over to Mr. Stefano Gamberini, Head of Investor Relations of ENAV.

Speaker #3: I am honored to take on this new challenge and pleased to be with you today for my first results presentation as ENAV CEO. As you know, our group continues to be recognized as best-in-class among European higher-traffic control providers.

Speaker #3: Please go ahead, sir.

Speaker #4: Thank you, and good afternoon, everybody. My name is Stefano Gamberini and I'm the new Head of Investor Relations. So, welcome to ENAV's First Half 2026 Results presentation.

Stefano Gamberini: Thank you, good afternoon, everybody. My name is Stefano Gamberini, I am the new Head of Investor Relations. Welcome to ENAV's H1 2026 results presentation, which will be hosted by our new CEO, Igor De Biasio, and our CFO, Luca Colman. They will walk you through the group's operational and financial performance for the first part of the year. Following the presentation, we will have the usual Q&A session. Igor, over to you.

Speaker #3: Our unique ability to manage airspace flexibility allows us to accommodate additional flights and support the European aviation system when needed. We consistently achieve industry-leading punctuality, significantly exceeding the Eneroute targets set by the European Commission, including in the first half of 2026.

Speaker #4: This event will be hosted by our new CEO, Igor De Biazio, and our CFO, Luca Colman. They will walk you through the group's operational and financial performance for the first part of the year.

Speaker #3: In this regard, I would like to share what I consider to be a strong indicator of our performance. As a certified by the European Network Manager, in the first half of 2026, ENAV accounted for around 30% of the overall saving delays in Eneroute traffic across the whole European network.

Speaker #4: Then, following the presentation, we will have the usual Q&A session. Igor, over to you.

Speaker #5: Thank you, Stefano, and good afternoon, everyone. Last May, the shareholders’ meeting appointed the new Board of Directors with Sandro Paparardo as Chairman and myself as Chief Executive Officer.

Igor De Biasio: Thank you, Stefano, good afternoon, everyone. Last May, the shareholders meeting appointed a new board of directors with Sandro Pappalardo as Chairman, myself as the Chief Executive Officer. I am honored to take on this new challenge, pleased to be with you today for my first results presentation as ENAV CEO. As you know, our group continues to be recognized as best in class among European air traffic control providers. Our unique ability to manage airspace flexibility allows us to accommodate additional flights, support the European aviation system when needed. We consistently achieve industry-leading punctuality, significantly exceeding the en route target set by the European Commission, including in the H1 2026. In this regard, I would like to share what I consider to be a strong indicator of our performance.

Speaker #3: My priority as a CEO is to preserve and strengthen ENAV's leadership position in Europe, while continuing accelerating growth in adjacent businesses. We will leverage our deep expertise in the air traffic sector, as well as our robust capital structure, to capitalize on new opportunities and generate additional value for all stakeholders.

Speaker #5: I am honored to take on this new challenge and pleased to be with you today for my first results presentation as ENAV CEO. As you know, our group continues to be recognized as best-in-class among European higher traffic control providers.

Speaker #5: Our unique ability to manage airspace flexibility allows us to accommodate additional flights and support the European aviation system when needed. We consistently achieve industry-leading punctuality, significantly exceeding the inner route targets set by the European Commission, including in the first half of 2026.

Speaker #3: Before we turn to our financial results, I would like to emphasize that I am supported by an outstanding management team in executing our strategy.

Speaker #3: This includes the group's most experienced operational executives, such as our COO, Maurizio Pagetti, and our chief technology officer, Vincenzo Smorto, as well as our CFO, Luca Colman.

Speaker #5: This, I consider to be a strong indicator of our performance. As certified by the European Network Manager, in the first half of 2026, ENAV accounted for around 30% of the overall saving delays in en-route traffic across the whole European network.

Speaker #3: In addition, we have recently strengthened our management team with several highly accomplished executives, among them I would like to mention Lucio Troccino, our new Head of Strategy and Business Development, who brings more than 30 years of experience in strategic leadership roles at Philips, World Work IR Europe, and some private equity funds.

Igor De Biasio: As certified by the European Network Manager in H1 2026, ENAV accounted for around 30% of the overall saving delays in en route traffic across the whole European network. My priority as a CEO is to preserve and strengthen ENAV's leadership position in Europe while continuing accelerating growth in adjacent businesses. We will leverage our deep expertise in the air traffic sector, as well as our robust capital structure to capitalize on new opportunities and generate additional value for all stakeholders. Before we turn to our financial results, I would like to emphasize that I am supported by an outstanding management team in executing our strategy. This includes the group's most experienced operational executives, such as our COO, Maurizio Pagliari, and our Chief Technology Officer, Vincenzo Smorto, as well as our CFO, Luca Colman.

Speaker #5: My priority as CEO is to preserve and strengthen ENAV's leadership position in Europe, while continuing to accelerate growth in adjacent businesses. We will leverage our deep expertise in the air traffic sector, as well as our robust capital structure, to capitalize on new opportunities and generate additional value for all stakeholders.

Speaker #3: Let's move now to the key highlights of the first half of the year. Traffic remained strong in the first 6 months, with Eneroute service units up 6.3% year-on-year.

Speaker #3: At the same time, we delivered Eneroute punctuality performance significantly better than the challenging targets assigned to us. Our financial performance was solid as well, with EBITDA up 21% to 83 million euro, a net profit nearly tripling to 20 million euro.

Speaker #5: Before we turn to our financial results, I would like to emphasize that I am supported by an outstanding management team in executing our strategy.

Speaker #5: This includes the executives, such as our COO, Maurizio Pagetti, and our Chief Technology Officer, Vincenzo Smorto, as well as our CFO, Luca Colman. In addition, we have recently strengthened our management team with several highly accomplished executives. Among them, I would like to mention Lucio Trocino, our new Head of Strategy and Business Development, who brings more than 30 years of experience in strategic leadership roles at Philips, World Work IR Europe, and some private equity funds.

Speaker #3: During the first half, we also completed the acquisition of IB Group, a leading company in fast-growing drone services sector for critical infrastructure. Looking ahead, given the strong performance delivered so far, and the positive traffic trends we are seeing during the peak season, we are confident in achieving EBITDA growth of 6% to 8% in 2026, while continuing to generate solid free cash flow of around 290 million euro.

Igor De Biasio: In addition, we have recently strengthened our management team with several highly accomplished executives. Among them, I would like to mention Lucio Trocino, our new head of strategy and business development, who brings more than 30 years of experience in strategic leadership roles at Philips, Warwick, IE Europe, and some private equity funds. Let's move now to the key highlights of H1. Traffic remained strong in H1, with en-route service units up 6.3% year on year. At the same time, we delivered en-route punctuality performance significantly better than the challenging targets assigned to us. Our financial performance was solid as well, with EBITDA up 21% to EUR 83 million, and net profit nearly tripling to EUR 20 million. During H1, we also completed the acquisition of IDO Group, a leading company in the fast-growing drone services sector for critical infrastructure.

Speaker #3: Moving on to the next slide, I'd like to highlight the main achievements of the first half. In March, we completed the acquisition of an 85% stake in IB Group, a highly innovative company that delivers advanced engineering services for the inspection and lifecycle management of critical infrastructure, helping customers improve safety, efficiency, and necessary reliability.

Speaker #5: Let's move now to the key highlights of the first half of the year. Traffic remained strong in the first six months, with route service units up 6.3% year on year.

Speaker #5: At the same time, we delivered route punctuality performance significantly better than the challenging targets assigned to us. Our financial performance was solid as well, with EBITDA up 21% to €83 million and net profit nearly tripling to €20 million.

Speaker #3: Although relatively small in size, we believe this acquisition brings significant strategic value. Across Europe, aging infrastructure and increasingly stringent safety and regulatory requirements are driving demand for advanced inspection and monitoring services.

Speaker #5: During the first half, we also completed the acquisition of IB Group, a leading company in the fast-growing drone services sector for critical infrastructure. Looking ahead, given the strong performance delivered so far and the positive traffic trends we are seeing during the peak season, we are confident in achieving EBITDA growth of 6% to 8% in 2026, while continuing to generate solid free cash flow of around €290 million.

Speaker #3: The addressable market is broad and diversified, including bridges, highways, railways, ports, logistics facilities, energy infrastructure, and many other critical assets. IB integration is a clear example of our strategy to expand into adjacent high-value markets, where we can leverage our unique expertise in airspace management, operational safety, and drone services.

Igor De Biasio: Looking ahead, given the strong performance delivered so far and the positive traffic trends we are seeing during the peak season, we are confident in achieving EBITDA growth of 6% to 8% in 2026, while continuing to generate solid free cash flow of around EUR 290 million. Moving on the next slide, I'd like to highlight the main achievements of H1. In March, we completed the acquisition of an 85% stake in IDO Group, a highly innovative company that delivers advanced engineering services for the inspection and lifecycle management of critical infrastructure, helping customers improve safety, efficiency, and asset reliability. Although relatively small in size, we believe this acquisition brings significant strategic value. Across Europe, aging infrastructure and increasingly stringent safety and regulatory requirements are driving demand for advanced inspection and monitoring services.

Speaker #3: Combined, with our strong presence in Italy and growing international footprint, we believe we are well positioned to accelerate IB's growth and unlock significant value over time.

Speaker #5: Moving on to the next slide, I’d like to highlight the main achievements of the first half. In March, we completed the acquisition of an 85% stake in IB Group, a highly innovative company that delivers advanced engineering services for the inspection and lifecycle management of critical infrastructure, helping customers improve safety, efficiency, and necessary reliability.

Speaker #3: Furthermore, shortly after the end of the reporting period, I am pleased to highlight another significant achievement. On July 2, we successfully disposed of our 8.6% stake in IREM, generating proceeds of USD 60 million, and further strengthening our capital structure.

Speaker #5: Although relatively small in size, we believe this acquisition brings significant strategic value. Across Europe, aging infrastructure and increasingly stringent safety and regulatory requirements are driving demand for advanced inspection and monitoring services.

Speaker #3: And now, I hand over to our CFO for the operational and financial highlights. Please, Luca.

Speaker #2: Thank you, Jörg, and good afternoon from my side as well. The first half of the year reported a positive air traffic volume performance, confirming Italy as the best performer amongst the European peer group, with a 6.3% increase year-on-year.

Speaker #5: The addressable market is broad and diversified, including bridges, highways, railways, ports, logistics facilities, energy infrastructure, and many other critical assets. IB integration is a clear example of our strategy to expand into adjacent high-value markets, where we can leverage our unique expertise in airspace management, operational safety, and drone services.

Igor De Biasio: The addressable market is broad and diversified, including bridges, highways, railways, ports, logistics facilities, energy infrastructure, and many other critical assets. IDO integration is a clear example of our strategy to expand into adjacent high-value markets, where we can leverage our unique expertise in airspace management, operational safety, and drone services. Combined with our strong presence in Italy and growing international footprint, we believe we are well positioned to accelerate IDO's growth and unlock significant value over time. Furthermore, shortly after the end of the reporting period, I am pleased to highlight another significant achievement. On 2 July, we successfully disposed of our 8.6% stake in Aireon, generating proceeds of $60 million and further strengthening our capital structure. Now I hand over to our CFO for the operational and financial highlights. Please, Luca.

Speaker #2: MLB Spain was plus 3.6%, French plus 3.3%, UK 2.9%, and Germany 0%, actually. We maintain an outstanding trajectory of traffic growth, proving the structural strength and effectiveness of Italian routes.

Speaker #5: Combined with our strong presence in Italy and our growing international footprint, we believe we are well positioned to accelerate IBU's growth and unlock significant value over time.

Speaker #2: Even with the challenging geopolitical scenario, Eneroute trend was largely driven by overflight and international traffic, up respectively by 7.8% and 6.5% year-on-year. Which offset the softer performance of initial traffic.

Speaker #5: Furthermore, shortly after the end of the reporting period, I am pleased to highlight another significant achievement. On July 2, we successfully disposed of our 8.6% stake in IRM, generating proceeds of $60 million and further strengthening our capital structure.

Speaker #2: Terminal traffic view by 3.5% year-on-year, showing positive results across both charging zones, strongly driven by international flights. Let's move now to the economic results, starting with revenues.

Speaker #5: And now, I hand over to our CFO for the operational and financial highlights. Please, Luca.

Speaker #2: Thank you, and good afternoon from my side as well. The first half of the year reported a positive air traffic volume performance, confirming Italy as the best performer amongst the European peer group, with a 6.3% increase year on year.

Luca Colman: Thank you, Ugo, and good afternoon from my side as well. H1 reported a positive air traffic volume performance, confirming Italy as the best performer amongst the European peer group with a 6.3% increase year on year. I remember Spain was +3.6%, France +3.3%, UK 2.9%, and Germany 0% actually. We maintain an outstanding trajectory of traffic growth, proving the structural strength and the attractiveness of Italian routes, even with the challenging geopolitical scenario. en-route trend was largely driven by overflight and international traffic, up respectively by 7.8% and 6.5% year on year, which offset the softer performance of internal traffic. Terminal traffic grew by 3.5% year on year, showing positive results across both charging zones, strongly driven by international flights. Let's move now to the economic results, starting with revenues.

Speaker #2: Consolidated revenues grew by 7.4% year-on-year, underpinned by the strength of our regulated business and the positive performance of not-regulated activities. Looking at the regulated business, net regulated revenues increased by 27 million euro, primarily driven by the solid growth of Eneroute and the positive contribution from terminal.

Speaker #2: ENAV Spain was plus 3.6, France plus 3.3, UK 2.9, and Germany zero, actually. We maintain an outstanding trajectory of traffic growth, proving the structural strength and attractiveness of Italian routes.

Speaker #2: Balance N minus Q impacted positively for almost 7 million euro, as a result of a negative balance N minus Q for 93.6 million euro in H1-25, and a negative 86.6 million euro in H1-26.

Speaker #2: Even with the challenging geopolitical scenario, en-route trend was largely driven by overflight and international traffic, up respectively by 7.8% and 6.5% year on year.

Speaker #2: The not-regulated business reported an increase of almost 6 million euro, mainly driven by new commercial activities and also the positive contribution of 1.4 million euro from Company.

Speaker #2: This offset the softer performance of initial traffic. Terminal traffic grew by 3.5% year on year, showing positive results across both charging zones, strongly driven by international flights.

Speaker #2: The balance for the period remained broadly stable, and was negative for around 3 million euro. Moving to cost on slide 6, in the first half 2026, total operating costs were 397 million euro, reporting 5% increase primarily driven by personal costs that reached around 329 million euro, up by 6.2% year-on-year.

Speaker #2: Let's move now to the economic results, starting with revenues. Consolidated revenues grew by 7.4% year-on-year, underpinned by the strength of our regulated business and the positive performance of non-regulated activities.

Luca Colman: Consolidated revenues growth by 7.4% year on year, underpinned by the strength of our regulated business and the positive performance of non-regulated business. Looking at the regulated business, net regulated revenues increased by EUR 27 million, primarily driven by the solid growth of en-route and the positive contribution from terminals. balance N-2 impacted positively for almost EUR 7 million as a result of a negative balance N-2 for EUR 93.6 million in H1 2025, and a negative EUR 86.6 million in H1 2026. The non-regulated business reported an increase of almost EUR 6 million, mainly driven by new commercial activities and also the positive contribution of EUR 1.4 million from IVU Company. The balance for the period remained broadly stable and was negative for around EUR 3 million. Moving to costs on slide six.

Speaker #2: Looking at the regulated business, net regulated revenues increased by €27 million, primarily driven by the solid growth of en-route and the positive contribution from terminal.

Speaker #2: Personal costs dynamics was driven by two main components: first one is the growth in the fixed terms component, around 11 million, due to the contractual wage adjustment, mainly linked with inflation and agreement signed with trade unions.

Speaker #2: The balance N minus T impacted positively for almost €7 million, as a result of a negative balance N minus T of €93.6 million in H1 2025, and a negative €86.6 million in H1 2026.

Speaker #2: And the higher variable components, another 2 million, mainly driven by higher operational overtime that was required to support increased traffic volume. The rest is tax.

Speaker #2: The non-regulated business reported an increase of almost €6 million, mainly driven by new commercial activities and also the positive contribution of €1.4 million from IBU company.

Speaker #2: Regarding other operating costs, we recorded an increase of 4.2%, mainly due to expenses for the development of not-regulated business. Supported by the more-than-proportional increase of related revenues, then we have a higher euro control contribution, that you remember is passed through our P&L, our tariff, and other personal expenses linked to the increase of traffic.

Speaker #2: The balance for the period remained broadly stable, and was negative by around €3 million. Moving to costs on slide 6, in the first half of 2026, total operating costs were €397 million, reporting a 5% increase primarily driven by personnel costs that reached around €329 million, up by 6.2% year on year.

Luca Colman: In H1 2026, total operating costs were EUR 397 million, reporting 5% increase, primarily driven by personnel costs that reached around EUR 329 million, up by 6.2% year-on-year. Personnel cost dynamics was driven by two main components. First one is the growth in the fixed component, around EUR 11 million, due to the contractual wage adjustment mainly linked with inflation and agreement signed with trade unions. The higher variable component, another EUR 2 million, mainly driven by higher operational overtime that was required to support increased traffic volume. The rest is tax. Regarding other operating costs, we recorded an increase of 4.2%, mainly due to expenses for the development of non-regulated business, EUR 1.8 million, which are fully supported by the more than proportional increase of related revenues.

Speaker #2: These were partly offset by lower utilities expenses. Moving on to slide 7, on the EBITDA dynamics, we delivered a strong EBITDA performance of 83.2 million euro, up approximately by 21% year-on-year, that was driven by the positive performance of the core business, which successfully leveraged the higher traffic volume we discussed earlier, and the impact of from not-regulated business boosted by the execution of ongoing international projects, and a new contract secured in the first half, I remember India and Malaysia as well as the IBU contribution that was more or less 1.4 million euro.

Speaker #2: Personal cost dynamics were driven by two main components. The first one is the growth in the fixed component, around €11 million, due to contractual wage adjustment, mainly linked with inflation and agreements signed with trade unions.

Speaker #2: And the higher variable components, another €2 million, mainly driven by higher operational overtime that was required to support increased traffic volume. The rest is tax.

Speaker #2: Regarding other operating costs, we recorded an increase of 4.2%, mainly due to expenses for the development of not regulated business, 1.8 million euro, which are fully supported by the more than proportional increase of related revenues, then we have a higher euro control contribution that you remember in this pass through our P&L, our tariff, and other personal expenses linked to the increase of traffic.

Speaker #2: Margin expansion was a successfully driven by higher traffic growth, combined with effective cost control, including a staff contract renewal in the last month, substantially in line with the budget expectations, reinforcing our confidence in achieving the 2026 financial targets.

Luca Colman: We have a higher Eurocontrol contribution that, you remember, is passed through our P&L, our tariff, and other personnel expenses linked to the increase of traffic. These were partially offset by lower utilities expenses. Moving on slide seven, on the EBITDA dynamics. We delivered a strong EBITDA performance of EUR 83.2 million, up approximately by 21% year-on-year. That was driven by the positive performance of the core business, which successfully leveraged the higher traffic volume we discussed earlier, and the impact from non-regulated business boosted by the execution of ongoing international projects, and the new contract secured in H1. I remember India and Malaysia, above all, as well as the IVU contribution that was more or less EUR 1.4 million.

Speaker #2: These were partly offset by lower utilities expenses. Moving on slide 7, on the EBITDA dynamics, we delivered a strong EBITDA performance of 83.2 million euro, up approximately by 21% year on year, that was driven by the positive performance of the core business, which successfully leveraged the higher traffic volume we discussed earlier, and the impact of from not regulated business boosted by the execution of ongoing international projects, and a new contract secured in the first half, I remember India and Malaysia as well as the IBU contribution that was more or less 1.4 million euro.

Speaker #2: Moving now to slide 8, on the profit and loss statement, DNA and provisions increased by 2.7% year-on-year, mainly due to higher amortization in the period.

Speaker #2: Net financial expenses improved year-on-year, decreasing by 3.5 million euro, still was mainly due to less debt and lower interest rates. Group net income reached 20.1 million euro, almost three times versus the first half of 2025.

Speaker #2: Let's move to cash flow and net debt on slide 9. Operating cash flow remained strong at 112 million euro, up more than 15% from first quarter, first half 2025.

Speaker #2: Margin expansion was successfully driven by high traffic growth combined with effective cost control, including a staff contract renewal in the last month, substantially in line with budget expectations, reinforcing our confidence in achieving the 2026 financial targets.

Luca Colman: Margin expansion was successfully driven by high traffic growth combined with effective cost control, including a staff contract renewal in the last month, substantially in line with the budget expectations, reinforcing our confidence in achieving the 2026 financial targets. Moving now to slide eight on the profit and loss statement. D&A and provisions increased by 2.7% year-on-year, mainly due to higher amortization in the period. Net financial expenses improved year-on-year, decreasing by EUR 3.5 million. It was mainly due to less debt and lower interest rates. Group net income reached EUR 20.1 million, almost three times versus H1 2025. Let's move to cash flow and net debt on slide nine. Operating cash flow remained strong at EUR 112 million, up more than 15% from H1 2025. Capital expenditures remained broadly stable at EUR 44 million.

Speaker #2: Capital expenditures remained broadly stable at 44 million euro. As a result, net debt increased by just over 100 million euro at the end of June, mainly reflecting the 153 million euro dividend payment to our shareholders.

Speaker #2: Moving now to slide 8 on the profit and loss statement, DNA and provisions increased by 2.7% year on year, mainly due to higher amortization in the period.

Speaker #2: Importantly, free cash flow improved by 22% year-on-year, to 65 million euro, confirming the solid underlying cash generation of our business. Let's now move to the full-year guidance.

Speaker #2: Net financial expenses improved year on year, decreasing by €3.5 million. This was mainly due to less debt and lower interest rates. Group net income reached €20.1 million, almost three times higher compared to the first half of 2025.

Speaker #2: Robust H1 traffic performance and positive summer demand trends underpinned confidence in the full-year outlook. Notwithstanding external market uncertainties, so we expect full-year Eneroute traffic growth to be slightly below 6%, OPEX increased by 5% in H1, and reflecting the seasonal impact of the managing higher traffic volumes during the peak summer period, our expected to remain well-controlled growing by around 6% for the full year.

Speaker #2: Let's move to cash flow and net debt on Slide 9. Operating cash flow remained strong at €112 million, up more than 15% from first quarter, first half 2025.

Speaker #2: Capital expenditures remained broadly stable at €44 million. As a result, net debt increased by just over €100 million at the end, following a €153 million dividend payment to our shareholders.

Luca Colman: As a result, net debt increased by just over EUR 100 million at the end of June, mainly reflecting the EUR 153 million dividend payment to our shareholders. Importantly, free cash flow improved by 22% year-on-year to EUR 65 million, confirming the solid underlying cash generation of our business. Let's now move to the full-year guidance. Robust H1 traffic performance and positive summer demand trends underpin confidence in the full-year outlook, notwithstanding external market uncertainties. We expect full-year annual traffic growth to be slightly below 6%. OpEx increased by 5% in H1 and reflecting the seasonal impact of managing higher traffic volumes during the peak summer period, are expected to remain well controlled, growing by around 6% for the full year. As a result, we expect full-year EBITDA growth in the range of 6% to 8% increase, supported by resilient traffic performance and continued operational discipline.

Speaker #2: As a result, we expect full-year EBITDA growth in the range of 6-8% increase, supported by resilient traffic performance and continued operational discipline. Cash flow generation is expected to remain very strong, throughout the year, we in fact are upgrading our previous guidance to 290 million euro, to reflect the strong business trend and the disposal of the real estate of our partly offset by the strategic investment in IBUs.

Speaker #2: Importantly, free cash flow improved by 22% year on year to €65 million, confirming the solid underlying cash generation of our business. Let's now move to the full-year guidance.

Speaker #2: And now, and over to our CEO for the closing remarks.

Speaker #1: Thank you, Luca.

Speaker #2: OPEX increased by 5% in H1 and, reflecting the seasonal impact of managing higher traffic volumes during the peak summer period, are expected to remain well controlled, growing by around 6% for the full year.

Speaker #2: Thanks to our unique positioning traffic remains strong in H1 2026, growing by more than 6%, significantly outperforming the year-end. Furthermore, in July, the record for daily flight movements was broken four times, reaching a new all-time high of 8,555 flights on August 1st, the strong traffic performance coupled with the cost trend broadly in line with budget, drove a high double-digit growth in H1 2026 EBITDA.

Speaker #2: As a result, we expect full year EBITDA growth in the range of a 6–8% increase, supported by resilient traffic performance and continued operational discipline. Cash flow generation is expected to remain very strong throughout the year. In fact, we are upgrading our previous guidance to €290 million to reflect the strong business trend and the disposal of the RIAL stake, with our €27 million cash in 2026—50% of the disposal price—partly offset by the strategic investment in IBUs.

Luca Colman: Cash flow generation is expected to remain very strong throughout the year. We, in fact, are upgrading our previous guidance to EUR 290 million. To reflect the strong business trend and the disposal of the Aireon stake of EUR 27 million cash in 2026, 50% of the disposal price, partially offset by the strategic investment in IVUs. Now hand over to our CEO for the closing remarks.

Speaker #2: Despite the ongoing uncertainty caused by the conflict in the Middle East and the potential impact of jet fuel price volatility, the resilience of traffic in the first half of the year together with the encouraging trend seen during the peak summer season gives us confidence to remain cautious.

Speaker #2: So we expect to achieve EBITDA growth of 6-8% and generate strong free cash flow of around 290 million euro this year. Finally, let me announce that we will start working on our new industrial plan in the coming weeks, and expect to present our new business plan in the first half of 2027.

Speaker #2: And now, over to our CEO for the closing remarks.

Speaker #3: Thank you, Luca. Thanks to our unique positioning traffic remains strong in H1 2026, growing by more than 6%, significantly outperforming in the European average, which is more or less zero, furthermore in July, the record for daily flight movements was broken four times, reaching a new all-time high of 8,565 flights on August the 1st, the strong traffic performance coupled with the cost of trend broadly in line with the budget, drove a high double-digit growth in H1 2026 EBITDA.

Igor De Biasio: Thank you, Luca. Thanks to our unique positioning, traffic remains strong in H1 2026, growing by more than 6%, significantly outperforming in the European average, which is more or less zero. Furthermore, in July, the record for daily flight movements was broken four times, reaching a new all-time high of 8,565 flights on 1 August. The strong traffic performance, coupled with the cost trend broadly in line with the budget, drove a high double-digit growth in H1 2026 EBITDA. Despite the ongoing uncertainty caused by the conflict in the Middle East and the potential impact of jet fuel price volatility, the resilience of traffic in H1, together with the encouraging trends seen during the peak summer season, gives us confidence to remain cautiously optimistic about the full-year traffic outlook.

Speaker #2: Thank you, and now let's open to Q&A session.

Speaker #3: Thank you. This is the course call conference operator. We will now begin the question and answer session. Anyone wishes to ask a question may press star N1 on their touchstone telephone.

Speaker #3: To remove yourself from the question queue, please press star N2. First question is from Niccolò Pessina, Mediobanca.

Speaker #3: Despite the ongoing uncertainty caused by the conflict in the Middle East and the potential impact of jet fuel price volatility, the resilience of traffic in the first half of the year, together with the encouraging trend seen during the peak summer season, gives us confidence to remain cautiously optimistic about the full-year traffic outlook.

Speaker #4: Good afternoon, gentlemen. Thanks for taking my questions. I would have two on OPEX. The first one is on the 2026 OPEX outlook. With a 6% growth rate, that implies an acceleration in the second half of the year.

Speaker #4: From an already high base in 2025, moreover, the 2% salary increase implemented in July 2025 will no longer impact so I'm wondering if you can give us some visibility on the details behind this 6% increase in the second in the full-year guidance.

Speaker #3: So, we expect to achieve EBITDA growth of 6–8% and generate strong free cash flow of around €290 million this year. Finally, let me announce that we will start working on our new industrial plan in the coming weeks and expect to present our new business plan in the first half of 2027.

Igor De Biasio: We expect to achieve EBITDA growth of 6% to 8% and generate strong free cash flow of around EUR 290 million this year. Finally, let me announce that we will start working on our new industrial plan in the coming weeks and expect to present our new business plan in H1 2027. Thank you. Now let's open to Q&A session.

Speaker #4: There was indicated in the latest business plan at 838 million euros. Is this number still valid considering that we will be already above 800 million euros by the end of 2026?

Speaker #3: Thank you. And now, let's open the Q&A session.

Speaker #1: Thank you. This is the Chorus Call conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press *1 on their touch-tone telephone.

Operator: Thank you. This is the Chorus Call conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star one on their touchtone telephone. To remove yourself from the question queue, please press star two. First question is from Nicolò Pessina, Mediobanca.

Speaker #4: And maybe can you remind us what is the impact of any additional 1% of traffic on OPEX, and what is your assumption in terms of savings from the remote control towers?

Speaker #1: To remove yourself from the question queue, please press star N2. The first question is from Niccolò Pessina, Mediobanca.

Speaker #4: Good afternoon, gentlemen. Thanks for taking my questions. I have two on OPEX. The first one is on the 2026 OPEX outlook. With a 6% growth rate, that implies an acceleration in the second half of the year.

Speaker #4: And maybe I had a question on the dividend outlook. Do you see any potential upside to the official guidance of 2019 given the cash in from Iraeon?

Nicolò Pessina: Good afternoon, gentlemen. Thanks for taking my questions. I have two on OpEx. The first one is on the 2026 OpEx outlook with a 6% growth rate that implies an acceleration in H2 from an already high base in 2025. Moreover, the 2% salary increase implemented in July 2025 will no longer impact. I'm wondering if you can give us some visibility on the details behind the 6% increase in the full-year guidance. Second question on the 2029 OpEx target that was indicated in the latest business plan at EUR 838 million. Is this number still valid considering that we will be already above EUR 800 million by the end of 2026? Maybe can you remind us what is the impact of any additional 1% of traffic on OpEx? What is your assumption in terms of savings from the remote control tower?

Speaker #4: Thanks.

Speaker #4: From an already high base in 2025, moreover, the 2% salary increase implemented in July 2025 will no longer impact. So I'm wondering if you can give us some visibility on the details behind this 6% increase in the second—in the full year guidance.

Speaker #2: Okay. Niccolò, I will take the first question. For what concerns, cost trend 2026 in business plan and actual business plan? The expected 3% increase in OPEX in 2026 is following in line with the planning assumption that was underpinned in 2025-2029 strategic plan.

Speaker #4: Second question on the 2029 OPEX target, which was indicated in the latest business plan at €838 million. Is this number still valid, considering the fact that we will already be above €800 million by the end of 2026?

Speaker #2: It is important also to, I guess, Niccolò, credo che c'è qualcuno sotto. Excuse me. So as you remember, as we said also in the first quarter, the plan did not envisage a line or cost growth trajectory.

Speaker #4: And maybe, can you remind us what is the impact of any additional 1% of traffic on OPEX, and what is your assumption in terms of savings from the remote control towers?

Speaker #4: And maybe I could add a question on the dividend outlook. Do you see any potential upside to the cents given the cash income around? Thanks.

Nicolò Pessina: Maybe I add a question on the dividend outlook. Do you see any potential upside to the official guidance of EUR 0.29 given the cash-in from Aireon? Thanks.

Speaker #2: It acted as anticipated it anticipated a higher increase in the initial year that was followed by the flutter trend towards the end of the period.

Speaker #2: Thanks driven above all from the benefit from the implementation of operational project. As we said also in the first quarter, we are right now in line with the cost in 2026 that we are planning in our budget, and our plan, actual plan.

Speaker #2: Okay, Niccolò, I will take the first question. With regard to the cost trend for 2026 and the business plan—so, the actual business plan—the expected 3% increase in OPEX in '26 is in line with the planning assumptions that were outlined in the 2025–2029 strategic plan.

Igor De Biasio: Okay, Nicolò, I will take the first question. For what concern cost trend 2026 in the business plan, the actual business plan. The expected 3% increase in OpEx in 2026 is fully in line with the planning assumption that was underpinned in the 2029 strategic plan. It is important also to, I guess, Nicolò. As you remember, as we said also in Q1, the plan did not envisage a linear cost growth trajectory. It anticipated a higher increase in the initial year that was followed by the flatter trend towards the end of the period. Thanks, driven both from the benefit from the implementation of operational projects. As we said also in Q1, we are right now in line with the cost in 2026 that we have planned in our budget, in our plan, actual plan.

Luca Colman: Okay, Nicolò, I will take the first question. For what concern cost trend 2026 in the business plan, the actual business plan. The expected 3% increase in OpEx in 2026 is fully in line with the planning assumption that was underpinned in the 2029 strategic plan. It is important also to, I guess, Nicolò. As you remember, as we said also in Q1, the plan did not envisage a linear cost growth trajectory. It anticipated a higher increase in the initial year that was followed by the flatter trend towards the end of the period. Thanks, driven both from the benefit from the implementation of operational projects. As we said also in Q1, we are right now in line with the cost in 2026 that we have planned in our budget, in our plan, actual plan.

Speaker #2: We foresee to see the trend a flutter trend by the end of the plan for 2028 and 2029, thanks to the implementation of remote tower consolidation ASCC.

Speaker #2: It is important also to, I guess, Niccolò, credo che c'è qualcuno sotto che urla e non che copre la voce, non so se dà fastidio.

Speaker #2: And the impact will be on the OPEX exactly in the last two years of the plan. So we are going to right now we are in line.

Speaker #2: Scusami. So, as you remember, as we said also in the first quarter, the plan did not envisage a linear cost growth trajectory. It anticipated a higher increase in the initial year that was followed by a flatter trend towards the end of the period.

Speaker #1: The coming to the second part of the question, so thank you for the question related to the dividend policy. Just to element and to messages, the first strong results reported in this half of the year, our solid cash flow generation reflected in the 2026 guidance for free cash flow up to 290 million euro, I believe that the existing dividend policy through 2029 will remain firmly in place.

Speaker #2: Thanks, driven above all by the benefit from the implementation of the operational project. As we said also in the first quarter, we are right now in line with the costs in 2026 that we are planning in our budgets and our actual plan.

Speaker #1: So first message is this one. Then coming to the second part of the second question related to the Iraeon disposal, I continue to see the existing dividend policy through 2029 as an important pillar of our shareholder remuneration framework, but I want to add also that any further decisions regarding the use of our financial flexibility will be taken in the context of the new business plan which we are going to run and prepare in the next weeks and months.

Speaker #2: We foresee observing the flutter trend by the end of the plans for 2028 and 2029, thanks to the implementation of remote tower consolidation ASCC.

Igor De Biasio: We foresee to see the flatter trend by the end of the plans for 2028 and 2029, thanks to the implementation of remote tower consolidation ACC, and the impact will be on the OpEx, exactly in the last few years of the plan. Right now we are in line. Coming to the second part of the question. First, thank you for the first related dividend policy. Just two elements and two messages. The first one. First of all, considering the strong results reported in this H1

Luca Colman: We foresee to see the flatter trend by the end of the plans for 2028 and 2029, thanks to the implementation of remote tower consolidation ACC, and the impact will be on the OpEx, exactly in the last few years of the plan. Right now we are in line.

Speaker #2: And the impact will be on the OPEX, exactly in the last few years of the plan. So, right now, we are in line.

Speaker #3: Coming to the second part of the question, thank you for the question related to the dividend policy. Just to elaborate and to mention two messages. The first one:

Igor De Biasio: Coming to the second part of the question. First, thank you for the first related dividend policy. Just two elements and two messages. The first one. First of all, considering the strong results reported in this H1. Our solid cash flow generation reflected in the full year 2026 guidance for free cash flow up to EUR 290 million. I believe that the existing dividend policy through 2029 will remain firmly in place. The first message is this one. Coming to the second part of the second question, related to the Aireon disposal, I continue to see the existing dividend policy through 2029 as an important pillar of our shareholder remuneration framework.

Speaker #4: Okay. Many thanks. As a quick follow-up, can you remind us what is the impact of any additional 1% traffic on OPEX and the savings from the remote control towers that you expect with by 2029?

Speaker #3: So, first of all, considering the strong results reported in this half of the year, our solid cash flow generation is reflected in the full-year 2026 guidance for free cash flow of up to €290 million. I believe that the existing dividend policy through 2029 remains firmly in place.

Luca Colman: Our solid cash flow generation reflected in the full year 2026 guidance for free cash flow up to EUR 290 million. I believe that the existing dividend policy through 2029 will remain firmly in place. The first message is this one. Coming to the second part of the second question, related to the Aireon disposal, I continue to see the existing dividend policy through 2029 as an important pillar of our shareholder remuneration framework. I want to add also that any further decisions regarding the use of our financial flexibility will be taken in the context of the new business plan, which we are going to run and prepare in the next weeks and months.

Speaker #2: Niccolò, what concern the OPEX increase is not automatically associated to increase of traffic. You remember that an increase of 1% of traffic more or less is in the year is around 6 million, 6 and a half million.

Speaker #3: So, the first message is this one. Then, coming to the second part of the second question related to the iron disposal, I continue to see the existing dividend policy through 2029 as an important pillar of our shareholder remuneration framework. But I want to add also that any further decisions regarding the use of our financial flexibility will be taken in the context of the new business plan, which we are going to run and prepare in the next weeks and months.

Speaker #2: If we are within the 2% band. So what concern costs depend when this increase is done. If it's during the summer, we normally manage and recover this with a higher time.

Speaker #2: And flexibility, asking accessibility to our controller, also asking him not to go on vacation, actually, to use the vacation this is the cost we believe is more or less the delta between the 5% that we close in terms of an H1 in terms of cost.

Igor De Biasio: I want to add also that any further decisions regarding the use of our financial flexibility will be taken in the context of the new business plan, which we are going to run and prepare in the next weeks and months.

Nicolò Pessina: Okay, many thanks. As a quick follow-up, can you remind us what is the impact of any additional 1% traffic on OpEx and the savings from the remote towers that you expect by 2029?

Speaker #4: Okay, many thanks. As a quick follow-up, can you remind us what is the impact of any additional 1% traffic on OPEX, and the savings from the remote control towers that you expect by 2029?

Speaker #2: OPEX cost and the 6% foreseen by the end of the year. That's what we believe is we need to go over to cover the increase of traffic.

Speaker #2: So you should put this on top, not only the 1% increase, but now in our forecast term of traffic and traffic, we almost are two percentage points higher the traffic that we are planning is 2% points higher than the planned one in the tariff that I remember is 4.1% increase versus 2025.

Speaker #2: Niccolò, with regard to the OPEX increase, it is not automatically associated with an increase in traffic. You remember that an increase of 1% in traffic, more or less in the year, is around €6 million, €6.5 million.

Luca Colman: Nicolò, for what concern the OpEx increase is not automatically associated to increase of traffic. You remember that an increase of 1% of traffic more or less in the year is around EUR six million, EUR six and a half million, if we are within a 2% band. For what concern cost, it depends when this increase is done. If it is during the summer, we normally manage and cover this with the higher extra time and flexibility, asking flexibility to our controller, also asking him not to go on vacation, actually, to use the vacation. The cost, we believe, is more or less the delta between the 5% that we close in H1 in term of cost, OpEx cost, and the 6% foreseen by the end of the year. That is what we believe we need to cover the increase of traffic.

Speaker #2: Did I answer you?

Speaker #2: If you are within the 2% band, for what concerns costs, it depends when this increase is done. If it's during the summer, we normally manage and recover this with higher, I mean, extra time.

Speaker #1: There was another question about remote towers.

Speaker #2: Oh, yeah.

Speaker #1: Just to give you also two messages on this point. The first one is that we are in line with the industrial plan. So at the brindis, you know, we are running two remote tower.

Speaker #1: So brindis as well and Grottaglie as well. So two airports are managed by this remote control new tower in Brindisi. Related to the effect and the cost in the future, let me just tell you that we are working.

Speaker #2: And flexibility asking flexibility to our controller also asking him not to go on vacation actually to use the vacation. This is the cost we believe is more or less the delta between the 5% that we close in term of an H1 in term of cost OPEX cost and the 6% foreseen by the end of the year.

Speaker #1: So as soon as we are going to finish it, we will be able to provide visibility on the expected OPEX trajectory, not only for this pillar, but for all the pillars, the old one and the new one of the new plan.

Speaker #2: That's what we believe we need to cover to address the increase in traffic. So, you should not only factor in the 1% increase, but now in our forecast, in terms of traffic, we are almost two percentage points higher. The traffic that we have planned is two percentage points higher than what was initially planned, and the tariff that I remember is a 4.1% increase versus 2025.

Speaker #1: So we are just to wait some months to have the clearer picture for the future about these effects of the new pillars. And you're good.

Luca Colman: You should put these on top, not only the 1% increase, but now in our forecast term of traffic, annual traffic, we almost have 2 percentage points higher. The traffic that we have planned is 2 percentage points higher than the planned one in the tariff. The tariff number is 4.1% increase versus 2025. Did I answer you?

Speaker #4: It's all clear. Many thanks and apologies for the background noise. Thanks.

Speaker #5: Next question is from Alexandra Arsova, Equita.

Speaker #6: Hi, good afternoon. Thank you for taking my questions, three questions on my end. The first one is a follow-up on the OPEX side. So can you remind us what is the level of salary increase determined by the labor contract in place due to inflation, not only in 2026, but also in the coming years?

Speaker #2: Did I answer you?

Speaker #3: There was another question about the remote towers. So, just to give you also two messages on this point. The first one is that we are in line with the industrial plan.

Igor De Biasio: There was another question related to remote towers.

Igor De Biasio: There was another question related to remote towers. Oh. Just to give you 2 messages on this point. The first one is that we are in line with the industrial plan, at Brindisi now we are running 2 remote tower. Brindisi as well, and Grottaglie as well, 2 airports are managed by this remote control new tower in Brindisi. Related to the aspects and the cost in the future, let me just tell you that we are working now on the new strategic plan. As soon as we are going to finish it, we will be able to provide visibility on the expected OpEx trajectory, not only for this pillar, but for all the pillars, the old one and the new one of the new plan. We just wait some months for the clearer picture for the future about these effects of the new pillars and your growth.

Luca Colman: Oh.

Igor De Biasio: Just to give you 2 messages on this point. The first one is that we are in line with the industrial plan, at Brindisi now we are running 2 remote tower. Brindisi as well, and Grottaglie as well, 2 airports are managed by this remote control new tower in Brindisi. Related to the aspects and the cost in the future, let me just tell you that we are working now on the new strategic plan. As soon as we are going to finish it, we will be able to provide visibility on the expected OpEx trajectory, not only for this pillar, but for all the pillars, the old one and the new one of the new plan. We just wait some months for the clearer picture for the future about these effects of the new pillars and your growth.

Speaker #3: So, at Brindisi now we are running two remote towers: Brindisi as well as Grottaglie. So, two airports are managed by this remote control new tower in Brindisi.

Speaker #6: And when the labor contract is going to be renegotiated or renewed? And again, on personnel cost, at the end of 2029, given the current assumption you have, do you expect net the net headcount to be lower or higher vis-à-vis 2026?

Speaker #3: Regarding the effects and the costs in the future, let me just say that we are currently working on the new strategic plan.

Speaker #3: So as soon as we are going to finish it, we will be able to provide visibility on the expected OPEX trajectory, not only for this pillar but for all the pillars—the old one and the new one of the new plan.

Speaker #6: Then the second one is the capacity bonus. So what is the level of bonus you are including in your full year 26 guidance? And the third one, if you can just provide us the level of balance at the end of you expect at the end of 2026 that will remain to be recovered in the tariff in 2027 and beyond.

Speaker #3: So we just wait some months for a clearer picture of the future regarding these effects of the new pillars, and the old ones.

Speaker #4: Niccolò, many thanks, and apologies for the background noise. Thank you.

Nicolò Pessina: It's all clear. Many thanks and apologies for the background noise. Thank you.

Speaker #6: Thank you.

Speaker #1: Next question is from Alexandra Arsova, Equita.

Operator: Next question is from Aleksandra Arsova, Equita.

Speaker #2: Okay. Alexandra, long list. I'll try to go we try to go through this for what concerns no, no, it's okay. The staff cost, we recognize inflation, as you know, at 10 I mean, it's a negotiation of the recognization of the inflation at the end of the period of 33 year when we check what is the real inflation and the one that was the planned one in the contract.

Speaker #5: Hi, good afternoon. Thank you for taking my questions. I have three questions. The first is a follow-up on the OPEX side. Could you remind us what level of salary increase is determined by the labor contract in place due to inflation, not only in 2026 but also in the coming years?

Aleksandra Arsova: Hi, good afternoon. Thank you for taking my questions. Three questions on my end. The first one is a follow-up on the OpEx side. Can you remind us what is the level of salary increase, determined by the labor contract in place, due to inflation, not only in 2026, but also in the coming years? When the labor contract is going to be renegotiated or renewed? Again, on personnel cost, at the end of 2029, given the current assumption you have, do you expect the net headcount to be lower or higher vis-a-vis 2026? The second one is the capacity bonus. What is the level of bonus you are including in your full year 2026 guidance?

Speaker #5: And when is the labor contract going to be renegotiated or renewed? And again, on personnel costs, at the end of 2029, given the current assumptions, should we expect the net headcount to be lower or higher compared to 2026?

Speaker #2: And so what's happened in this 1st of January, the fact is around 2.5% is the part related to the inflation adjustment related to the last three years of inflation that was not recognized to On top of this, so talking about the future, you know that every July we planned to give to our controller, to our staff, what is the so-called agreed inflation, the estimated inflation for the next three years that we assume is 1.5% increase each year.

Speaker #5: Then the second one is the capacity bonus. So what is the level of bonus you are including in your full year 26 guidance? And the third one, if you can just provide us the level of balance at the end of you expect at the end of 2026 that will remain to be recovered in the tariff in 2027 and beyond.

Aleksandra Arsova: The third one, if you can just provide us the level of balance you expect at the end of 2026, that will remain to be recovered, in the tariff in 2027 and beyond. Thank you.

Speaker #5: Thank you.

Speaker #2: Okay, Alexandra, long list. I'll try to go through this. For what concerns—no, no, it's okay. The staff cost, we recognize inflation, as you know, at 10. I mean, it's a negotiation of the recognition of the inflation at the end of the period of 33 years, when we check what is the real inflation and the one that was the planned one in the contract.

Luca Colman: Okay. Aleksandra, long list. We try to go through these. For what concern the staff cost, we recognize inflation, as you know, it's a negotiation of the recognition of the inflation at the end of the period, so after 3 years, when we check what is the real inflation and the one that was the planned one in the contract. What's happened in this 1 January, the effect is around 2.5%, is the part related to the inflation adjustment related to the last 3 years of inflation that was now recognized to the personnel cost. On top of this, talking about the future, you know that every July, we planned to give to our controller, to our staff what is the so-called agreed inflation, the estimated inflation for the next 3 years, that we assume is 1.5% increase each year.

Speaker #2: And so the next increase would be in yeah, actually, it was in July. This July, the next one will be July 2027 and the last one 2028.

Speaker #2: It's a 1.5. Then by the end of these three years, we check what is the real inflation versus the contracted one, the planned one, and then we negotiate the eventually the delta.

Speaker #2: And so what’s happened in this first of January, the fact is around 2.5% is the part related to the inflation adjustment related to the last three years of inflation that was not recognized to the personnel cost.

Speaker #2: This is for what concerned inflation. For what concerned the FTA in terms of controller for the traffic, we had I mean, actually, as Igor said, we are the reviewing the business plan, also taking into account what would be the traffic that we are going to manage.

Speaker #2: On top of this, so talking about the future, you know that every July we plan to give to our controller, to our staff, what is the so-called agreed inflation—the estimated inflation for the next three years—that we assume is a 1.5% increase each year.

Speaker #2: So actually, we are now analyzing what could be the effect in terms of increasing the disincrease of traffic that we're having now. And we expect also in the future years that could be higher than the one is in actual business plan.

Speaker #2: And so we are re-analyzing the number of people that we may need or not. So we will give you more information right after the presentation, I mean, during the presentation of the business plan.

Speaker #2: And so the next increase will be in—yeah, actually, it was in July. This July. The next one will be July 2027, and the last one, 2028, is a 1.5.

Luca Colman: Actually, the next increase will be in July, this July. The next one will be July 2027, and the last one, 2028, is a 1.5. By then, that's 3 years, we check what is the real inflation versus the contracted one, the planned one, and then we negotiate eventually the delta. This for what concerns inflation. For what concerns the traffic, the FTE in terms of controller for the traffic, actually, as Igor said, we are reviewing the business plan, also taking into account what will be the traffic that we are going to manage. Actually, we are now analyzing what could be the effect in terms of this increase of traffic that we're having now, and we expect also in the future years, that could be higher than the one is in actual business plan.

Speaker #2: For what concerns the bonus. Right now, we have and first, yes, we believe that if the thing remains stable, we are able to reach the maximum level of the bonus, the punctuality bonus.

Speaker #2: Then, by the end of these three years, we check what is the real inflation versus the contracted one, the planned one, and then we negotiate eventually the delta.

Speaker #2: So right now, our 13 million euro. For what concerned the fourth one, just let me check. I'm not sure that I remember the question.

Speaker #2: This is for what concerns inflation. For what concerns the FTA, in terms of controller for the traffic, we had—I mean, actually, as Igor said, we are reviewing the business plan, also taking into account what will be the traffic that we are going to manage.

Speaker #6: The balance.

Speaker #2: Okay. That was the balance. So the balance this year, you know how much is it? It's around 190 million. So it's 154 for en route and the rest is the other the terminal.

Speaker #2: So actually, we are now analyzing what could be the effect in terms of this increase of traffic that we're having now, and we expect also in the future years that it could be higher than the one in the actual business plan.

Speaker #2: So the next year 2027 tariff between the three tariffs, so Terminal 1, Terminal Zone 1, 2, and route above all, we are talking about 150 million more or less, 146 actually.

Speaker #2: And so, we are reanalyzing the number of people that we may need or not. We will give you more information right after the presentation.

Luca Colman: We are reanalyzing the number of people that we may need or not. We will give you more information right after the presentation, during the presentation of the business plan. For what concerns the bonus, right now, we are considering also the result in the H1. We believe that if the things remain stable, we are able to reach the maximum level of the bonus, the punctuality bonus. Right now are EUR 13 million. For what concerns the fourth one, just let me check. I'm not sure that I remember the question. Last one. The balance. Okay, that was the balance. The balance this year, you know how much is it, is around EUR 190 million, so it's EUR 154 en-route, and the rest is the terminal.

Speaker #2: And then the rest is over I mean, we are talking right now no more than 40 million. That is then it depends on what will be the generations balance now in 2026 that is something that we will get in two years.

Speaker #2: I mean, during the presentation of the business plan, as far as the bonus is concerned, right now we are also considering the results for the first half. And yes, for the first half, we believe that if things remain stable, we will be able to reach the maximum level of the bonus, the punctuality bonus. So right now our estimate is €13 million.

Speaker #2: To all your questions, did I did we?

Speaker #6: Thank you. Yeah. Yeah. Thank you.

Speaker #2: Thank you.

Speaker #5: Next question is from Francesco Sala, Bank Across.

Speaker #4: Good afternoon. Thank you for taking my questions. The first one is on the regulated revenues. I wonder whether you can give us an outlook for the second half of the year, whether we should keep on seeing acceleration and secondly, if you can give us at least an indication for 2027 also on the regulated revenues.

Speaker #2: As for the fourth one, just let me check. I'm not sure that I remember the question.

Speaker #1: The balance.

Speaker #2: Okay, that was the balance. So, the balance this year—you know, how much is it? It's around €190 million. So, it's €154 million from the foreign route, and the rest is the other, the terminal.

Speaker #4: And finally, I wonder whether you can give us an update on the latest available data you have. You can share with us about traffic in the last few weeks.

Speaker #2: So for the next year, 2027, regarding the tariff between the three tariffs—so, terminal one, terminal zone two, and route—overall, we are talking about €150 million, more or less; actually, €146 million.

Luca Colman: The next year, 2027 tariff between the 3 tariffs, so terminal 1, terminal zone 1, 2, and route above all, we are talking about EUR 150 million, more or less, EUR 146, actually. The rest is over. We are talking right now no more than EUR 3 million. It depends on what will be the generation balance now in 2026, as you know, is something that we will get in 2 years. I guess we gave the answer to all your questions. Did I? Did we? Yes, we did. Thank you. Yep. Thank you. Yep, thank you.

Speaker #4: Thank you.

Speaker #2: And then the rest is over. I mean, we are talking right now no more than €40 million. That is, then it depends on what will be the generation's balance now in 2026. That is something that we will guess in two years.

Speaker #2: 87. Okay. So thank you for the question. I always start answering the last part of the question relates to traffic in July and then I leave the floor to Luca for the first part of the question.

Speaker #2: I guess we didn't answer all of your questions. Did we?

Speaker #1: Thank you. Thank you. Yeah, yeah. Thank you.

Aleksandra Arsova: Yes, we did. Thank you. Yep. Thank you.

Speaker #2: Thank you.

Speaker #1: Next question is from Francesco Sala, Bank Across.

Luca Colman: Yep, thank you.

Operator: Next question is from Francesco Sala, Banca Akros.

Speaker #4: Good afternoon. Thank you for taking the questions. The first one is on the regulated revenues. I wonder whether you can give us an outlook for the second half of the year—whether we should keep on seeing acceleration. Secondly, if you can give us at least an indication for 2027, also on the regulated revenues. And finally, I wonder whether you can give us an update on the latest available data you have—if you can share with us about traffic in the last few weeks.

Francesco Sala: Good afternoon. Thank you for taking the questions. The first one is on the regulated revenues. I wonder whether you can give us an outlook for H2 of the year, whether we should keep on seeing acceleration. Secondly, if you can give us a business indication for 2027 also on the regulated revenue. Finally, I wonder whether you can give us an update on the latest available data you have, and you can share with us about traffic in the last few weeks. Thank you.

Speaker #2: The latest July data showed traffic up by around 6.7% year-on-year in terms of flight movement. So July is higher than the last months of the first half.

Speaker #2: So we see a continue increasing trend. And then I leave to Luca the floor.

Speaker #1: Thank you, Igor. Talking about the revenue in 2026, our guidance, as said by Igor, we expect to have an increase of traffic by the end of the year around 6, just a little bit lower than 6%.

Speaker #4: Thank you.

Speaker #1: In terms of not regulated business, we confirm our target. This is around 62 million as we have already said. So we confirm it. If this all together you can get looking what is the guidance we have given we.

Speaker #2: Thank you. Okay. So thank you for the question. I always start by answering the last part of the question, which relates to traffic in July, and then I will leave the floor to Luca for the first part of the question.

Igor De Biasio: Thank you for the question. I will start answering the last part of the question related to traffic in July, then I leave the floor to Luca for the first part of the question. As I already told you, in July, the record for daily flight movements was broken four times. We reached, 01 August, the new all-time record with a peak of 8,555 flights. The latest July data shows traffic up by around 6.7% year-on-year in terms of flight movement. July is higher than the last months of H1, we see a continued increasing trend. I leave to Luca the floor. Thank you, Igor.

Speaker #2: So as I already told you, in July, the record for daily flight movements was broken four times. And then we reached the August 1st, the new record, the new all-time record with a peak of 8,555 flights the latest July data showed traffic up by around 6.7% year-on-year in terms of flight movement.

Speaker #1: Talking about 1,000 and 80, 88, 80, 90 million euro. More or less of the revenue. Considering also the bonus punctuality bonus. For what concerns the 2027 revenue, we haven't disclosed any information because right now we need to check, first of all, what will be the traffic that we will consider as you know, even Euro control is waiting for to update the forecast and they will do probably in October.

Speaker #2: So July is higher than the last months of the first half, so we see a continuing increasing trend. And then I leave to Luca the floor.

Speaker #3: Thank you, Igor. Talking about the revenue in 2026—our guidance, as said by Igor—we expect to have an increase in traffic by the end of the year of around 6%, just a little bit lower than 6%.

Luca Colman: Thank you, Igor. Talking about the revenue in 2026, our guidance, as said by Igor, we expect to have increase of traffic by the end of the year around six, just a little bit lower than 6%. In terms of non-regulated business, we confirm our target. This is around EUR 62 million, as we have already said. We confirm it. If you put this all together, you can get, looking what is the guidance we have given, we are talking about total revenues of roughly 1,088, 80, 90 million EUR, more or less of the revenue, considering also the punctuality bonus. For what concerns the 2027 revenue, we haven't disclosed any information also because right now we need to check, first of all, what will be the traffic. When we consider, as you know, even Eurocontrol is waiting to update the forecast, and they will do probably in October.

Luca Colman: Talking about the revenue in 2026, our guidance, as said by Igor, we expect to have increase of traffic by the end of the year around six, just a little bit lower than 6%. In terms of non-regulated business, we confirm our target. This is around EUR 62 million, as we have already said. We confirm it. If you put this all together, you can get, looking what is the guidance we have given, we are talking about total revenues of roughly 1,088, 80, 90 million EUR, more or less of the revenue, considering also the punctuality bonus. For what concerns the 2027 revenue, we haven't disclosed any information also because right now we need to check, first of all, what will be the traffic. When we consider, as you know, even Eurocontrol is waiting to update the forecast, and they will do probably in October.

Speaker #1: So after that and together with our budget, the 2027 budget, we will also disclose some more information about what is the traffic. I just remember that the traffic that is now in the tariff is a 3% increase in 2027 versus 2020, 26 planned traffic, not actual traffic.

Speaker #3: In term of not regulated business, we confirm our target. This is around 62 million as we have already said. So we confirm it. It would this all together you can get looking what is the guidance we have given we are talking about total revenues of roughly 100 1,000 and 80 88 80 90 million euro.

Speaker #2: Thank you.

Speaker #1: Is that okay?

Speaker #2: Yeah. Thank you.

Speaker #1: You're welcome.

Speaker #5: Next question is from Amal Patel, UBS.

Speaker #7: Hi, Luca. Hi, Igor. Congratulations on the new role. Three questions on my side. Firstly, on the new free cash flow guidance. So if my math is correct, the new guidance implies 225 million of free cash flow in the second half of the year, which I guess if you exclude the one-off benefit from the North Atlantic disposal gains, that would imply a decline year over year?

Speaker #3: More or less of the revenue. Considering also the bonus the punctuality bonus. For what concerns the 2027 revenue, we haven't disclosed your any information also because right now we need to check first of all what will be the traffic that we will consider as you know even Euro control is waiting for the to update the forecast and they will do probably in October.

Speaker #7: So just wondered whether you can walk us through the moving parts or appreciate there's maybe some lower balance reversals year over year, but still this seems a little conservative.

Speaker #3: So after that, and together with our 2027 budget, we will also disclose some more information about what is the traffic. I just remember that the traffic that is now in the tariff is a 3% increase in 2027 versus 2026 planned traffic, not actual traffic.

Speaker #7: Second question, in the release and on the presentation slides, you talk about your updated business plan in 1H27. Will you be hosting a capital markets day for this event?

Luca Colman: After that, and together with our budget, the 2027 budget, we will also disclose some more information about what is the traffic. I just remember that the traffic that is now embedded in the tariff is a 3% increase in 2027 versus 2026 planned traffic, not actual traffic.

Speaker #7: And can you provide us with a bit more color? You talk about accelerating investments and further technological infrastructure, but anything more than that would be much appreciated.

Speaker #7: And then thirdly, last year or so you've been very disciplined on the cost front. You spoke earlier in response to all the questions about changes to headcount to deal with future increases of traffic.

Speaker #4: Thank you.

Speaker #3: Is it okay?

Francesco Sala: Thank you.

Speaker #4: Yeah. Thank you.

Luca Colman: Is that okay?

Francesco Sala: Yeah. Thank you.

Speaker #7: But maybe can you talk a bit more about any AI next years and how this could provide a tailwind to costs and help offset future increases in traffic?

Speaker #3: You're welcome.

Speaker #1: Next question is from Amal Patel, UBS.

Luca Colman: You're welcome.

Operator: Next question is from Amal Patel, UBS.

Speaker #5: Hi Luca. Hi Igor. Congratulations on the new role. Three questions on my side. Firstly, on the new free cash flow guidance. So, if my math is correct, the new guidance implies €225 million of free cash flow in the second half of the year, which I guess, if you exclude the one-off benefit from the North Atlantic disposal gains, would imply a year-over-year decline.

Amal Patel: Hi, Luca. Hi, Igor. Congratulations on the new role. Three questions on my side. Firstly, on the new free cash flow guidance. If my math is correct, the new guidance implies EUR 225 million of free cash flow in H2, which I guess if you exclude the one-off benefit from the North Atlantic disposal gains, that would imply a decline year-over-year. Just wondered whether you can walk us through the moving parts there. Appreciate there's maybe some lower balance reversals year-over-year, but still this seems a little conservative. Second question, in the release and on the presentation slides, you talk about your updated business plan in H1 2027. Will you be hosting a Capital Markets Day for this event? Can you provide us with a bit more color?

Speaker #7: Thank you.

Speaker #2: So I will start answering the part to the business plan for the future and then I'll let Luca answer about the first one and the third.

Speaker #5: So, just wondered whether you can walk us through the moving parts. I appreciate there may be some lower balance reversals year over year, but still, this seems a little conservative.

Speaker #2: So let's say that looking also for the future. So I'm not expecting a new industrial plan, not in line with the actual one. So I mean the actual industrial plan is a good basis and then we'll try to leverage in it and then continue improving in leadership position in the business all across Europe.

Speaker #5: Second question: In the release and on the presentation slides, you talk about your updated business plan in 1H27. Will you be hosting a Capital Markets Day for this event?

Speaker #5: And can you provide us with a bit more color? You talk about accelerating investments and further technological infrastructure, but anything more than that would be much appreciated.

Speaker #2: So our priority is and will be to consolidate and further reinforce in our leadership position among air navigation service providers across Europe and across all around the world.

Amal Patel: You talk about accelerating investments in further technological infrastructure, anything more than that would be much appreciated. Thirdly, last year or so, you've been very disciplined on the cost front. You spoke earlier in your response to one of the questions about changes to headcount to deal with future increases of traffic. Maybe, can you talk a bit more about any AI initiatives you're looking to deploy over the next years, how this could provide a tailwind to costs and help offset future increases in traffic? Thank you.

Speaker #5: And then, thirdly, over the last year or so, you've been very disciplined on the cost front. You spoke earlier in your response to one of the questions about changes to headcount to deal with future increases in traffic.

Speaker #2: And our strategy will be built around a simple principle. So continuously improving the management of Italian aerospace while maintaining the highest standards of safety first of all, efficiency and service quality.

Speaker #5: But maybe, can you talk a bit more about any AI initiatives you're looking to deploy over the next few years, and how this could provide a tailwind to costs and help offset future increases in traffic?

Speaker #2: So these are the three pillars underpinning the strategy. For sure we will have to continue being flexible. Granting service excellence and continuing investing in innovation technology.

Speaker #5: Thank you.

Speaker #2: So these three pillars are linked and we'll continue to be linked. So the main point will be understanding in these months how we can leverage on the actual plan, creating a new plan that we will boost continuously in the future in our leadership.

Speaker #3: So I will start by answering the part about the business plan for the future, and then I'll let Luca answer the first and third questions.

Igor De Biasio: I will start answering the part related to the business plan for the future, and then I will let Luca answer about the first one and the third. Let's say that looking also for the future, I am not expecting a new industrial plan, not in line with the actual ones. I mean, the actual industrial plan is a good basis, and then we try to leverage on it and then continue improving leadership position in the regulated business all across Europe. Our priority even will be to consolidate and further reinforce the leadership position among air navigation service providers across Europe and all around the world. Our strategy will be built around a simple principle, continuously improving the management of Italian airspace while maintaining the highest standards of safety, first of all, efficiency, and service quality.

Speaker #3: So, let's say that, also looking to the future, I'm not expecting a new industrial plan that is not in line with the actual one. I mean, the current industrial plan is a good basis, and then we'll try to leverage it and continue improving our leadership position in the regulated business all across Europe.

Speaker #1: Yep. For what concerns the free cash flow by the end of the year, let's see 100 and 90 millions. I understand what you say, but just consider that I mean the main reason is this one.

Speaker #3: So our priority is, and will be, to consolidate and further reinforce our leadership position among air navigation service providers across Europe and around the world.

Speaker #1: If you consider traffic that we have now in the first half of traffic, just look at the end route. The route is increased of 6.3 as the actual volume of traffic that we manage in the first six months.

Speaker #3: And our strategy will be built around a simple principle: continuously improving the management of Italian aerospace, while maintaining the highest standards of safety first of all, efficiency, and service quality.

Speaker #1: We expect by the end of the year to be a little bit less than 6%. So just a different volume of traffic that we believe that we manage in the second part of the year versus the first one.

Speaker #3: So these are the three pillars underpinning the strategy. For sure, we will have to continue being flexible, granting service excellence, and continue investing in innovation and technology.

Luca Colman: These are the three pillars underpinning the strategy. For sure, we have to continue being flexible, granting service excellence, and continue investing in innovation technology. These three pillars are linked and will continue to be linked. The main point will be understanding in these months how we can leverage on the actual plan, creating a new plan that will boost continuously in the future the ENAV leadership. Yep. For what concern the free cash flow by the end of the year, the EUR 290 million. I understand what you say, but just consider that, the main reason is this one. If you consider traffic that we have now in H1 is the increase of traffic, just look at the en-route. The en-route is increase of 6.3%, is the actual volume of traffic that we managed in the first six months.

Igor De Biasio: These are the three pillars underpinning the strategy. For sure, we have to continue being flexible, granting service excellence, and continue investing in innovation technology. These three pillars are linked and will continue to be linked. The main point will be understanding in these months how we can leverage on the actual plan, creating a new plan that will boost continuously in the future the ENAV leadership.

Speaker #1: So that's the reason why the free cash flow that is related mainly to the revenue, the traffic revenue, are a little bit lower in the second part than the first one.

Speaker #3: So these three pillars are linked and will continue to be linked. So the main point will be understanding in these months how we can leverage the actual plan, creating a new plan that we will boost continuously in the future in our leadership.

Speaker #1: Also take in consideration that the balance and everything is related to the balance, not the balance reversal that is automatically. Everything is very I mean by the end of the year, you calculate the real balance that can be a little bit different.

Speaker #2: Yes. Regarding the free cash flow at the end of the year, let's say €100 million and €90 million. I understand what you're saying, but just consider that the main reason is this one.

Luca Colman: Yep. For what concern the free cash flow by the end of the year, the EUR 290 million. I understand what you say, but just consider that, the main reason is this one. If you consider traffic that we have now in H1 is the increase of traffic, just look at the en-route. The en-route is increase of 6.3%, is the actual volume of traffic that we managed in the first six months.

Speaker #1: This form will consider the balance of the year. The balance reversal maybe you meant the balance reversal this is exactly split between the month depending on the weight of the month in the tariff.

Speaker #1: So the six month and the second six month. So remember that the amount, the total amount of balance that we will get in this year is roughly 190 million.

Speaker #2: If you consider the traffic that we have now, in the first half there is an increase of traffic. Just look at the en-route. The route has increased by 6.3%, as the actual volume of traffic that is managed in the first six months.

Speaker #1: So if we have got less now, we will get more because then we have by definition, July and August were the flight are higher.

Speaker #2: We expect, by the end of the year, to be a little bit less than 6%. So, just a different volume of traffic that we believe we will manage in the second part of the year versus the first one.

Luca Colman: We expect by the end of the year to be a little bit less than 6%. Just different volume of traffic that we believe that we manage in the second part of the year versus the first one. That is the reason why the free cash flow that is related mainly to the revenue, the traffic revenue, are a little bit lower in the second part than the first one. Also take into consideration that the balance and everything is related to the balance, not the balance reversal that is automatically. By the end of the year, you calculate the real balance that can be little bit different. This one will consider the balance of the year. The balance reversal, maybe you meant the balance reversal, this is exactly split between the months depending on the weight of the month in the tariff.

Speaker #1: That's the main difference between the first and the second half. For what concerns the AI, there are several studies that we are doing and the application above all for what concerns our.

Speaker #2: So that's the reason why the free cash flow that is related mainly to the revenue, that is, the traffic revenue, is a little bit lower in the second part than in the first one.

Speaker #1: We will be more precise when we present our new business plan and even with impact in terms of cost saving and every bit everything will be more clear.

Speaker #2: Also, take into consideration that the balance and everything is related to the balance, not the balance reversal that is automatic. But everything is very—I mean, by the end of the year, you calculate the real balance, which can be a little bit different.

Speaker #7: Thanks very much, team.

Speaker #1: You're welcome.

Speaker #5: Next question is from Luca Bacoccoli, Intesa Sanpaolo.

Speaker #2: Hello. Can you hear me well?

Speaker #2: This form will consider the balance of the year. The balance reversal—maybe you meant the balance reversal—this is exactly split between the months depending on the weight of the month in the tariff.

Speaker #1: Yep.

Speaker #2: Yeah. Okay. Great. So a few questions from my side the first one is for the new CEO. So you said that the priorities are quite clear and among them is the expansion in the regulated business.

Speaker #2: So, the six months, and then the second six months. So remember that the total amount of balance that we will get in this year is roughly €190 million.

Luca Colman: The six months and the second six months. Remember that the total amount of balance that we will get in this year is roughly EUR 190 million. If we have got less now, we will get more because then we have, by definition, July and August when the flights are higher. That is the main difference between H1 and H2. For what concerns AI, there are several studies that we are doing, and the application above also will concern our operative area. We will be more precise when we present our new business plan, and even with impact in term of cost saving, everything will be more clear.

Speaker #2: So I would like to ask you if you can give us an update on the M&A pipeline because last year we were discussing several times of two new targets.

Speaker #2: So if we have got less now, we will get more, because then we have, by definition, July and August, when the flights are higher.

Speaker #2: One of them was completed. So I was wondering if there's any other news regarding the other target that was set last year. Then on the free cash flow, some follow-ups here.

Speaker #2: That's the main difference between the first and the second half. As for AI, there are several studies that we are conducting, and the most important applications are in our operational area.

Speaker #2: We will be more precise when we present our new business plan, and even with the impact in terms of cost savings, everything will be more clean.

Speaker #2: The new guidance at 290 is 40 million above the guidance you provided with the first quarter. So after this, comes from the M&A for the acquisition net of the disposal cash in inflows.

Speaker #5: Thanks very much, team.

Speaker #2: You're welcome.

Amal Patel: Thanks very much, team.

Speaker #1: Next question is from Luca Bacoccoli, Intesa Sanpaolo.

Luca Colman: You're welcome.

Operator: Next question is from Luca Bacoccoli, Intesa Sanpaolo.

Speaker #3: Hello. Can you hear me well? Yeah. Okay, great. So, a few questions from my side. The first one is for the new CEO. You said that the priorities are quite clear, and among them is the expansion in the regulated business.

Luca Bacoccoli: Hello, can you hear me well?

Speaker #2: So I was wondering the remaining other 20 millions where they coming from. And let's say more on a longer term perspective, still on the free cash flow generation, the normalized free cash flow generation excluding the impact of the balance that is going to reduce going forward is between 140, 150 million euros every year.

Luca Colman: Yep.

Luca Colman: Yeah. Okay, great. A few questions from my side. The first one is for the new CEO. You said that the priorities are quite clear, and among them is the expansion in the regulated business. I would like to ask you, if you can give us an update on the M&A pipeline, because last year you were discussing several times of two new targets. One of them was completed. I was wondering if there's any other news regarding the other target that was set last year. On the free cash flow, some follow-ups here. The new guidance at EUR 290 million is EUR 40 million above the guidance you provided with the Q1 results conference call. Half of this comes from the M&A for the acquisition net of the disposal cash inflows. I was wondering, the remaining other EUR 20 million, where are they coming from?

Luca Bacoccoli: Yeah. Okay, great. A few questions from my side. The first one is for the new CEO. You said that the priorities are quite clear, and among them is the expansion in the regulated business. I would like to ask you, if you can give us an update on the M&A pipeline, because last year you were discussing several times of two new targets. One of them was completed. I was wondering if there's any other news regarding the other target that was set last year. On the free cash flow, some follow-ups here. The new guidance at EUR 290 million is EUR 40 million above the guidance you provided with the Q1 results conference call. Half of this comes from the M&A for the acquisition net of the disposal cash inflows. I was wondering, the remaining other EUR 20 million, where are they coming from?

Speaker #3: So, I would like to ask if you can give us an update on the M&A pipeline, because last year we discussed several times about two new targets.

Speaker #3: One of them was completed, so I was wondering if there's any other news regarding the other target that was set last year. Then, on the free cash flow, I have some follow-ups here.

Speaker #2: So do you believe there is room for an increase in debt level because for example, because of the M&A already done and also the new contract you signed in the last two years.

Speaker #2: And finally, the deal in Greece you announced recently, if you can give us some more color in terms of the financials and the impact on that.

Speaker #3: The new guidance at 290 is €40 million above the guidance you provided with the first quarter results conference call. So half of this comes from the M&A, for the acquisition net of the disposal cash inflows.

Speaker #2: Thank you.

Speaker #3: So, I was wondering—the remaining other €20 million, where are they coming from? And, let's say, looking at a longer-term perspective, still on the free cash flow generation.

Speaker #1: So thank you for the question. So I start from the part related to M&A and also to reinforcing our position in the regulated market.

Luca Bacoccoli: Let's say on a longer term perspective, still on the free cash flow generation, the normalized free cash flow generation, excluding the impact of the balance that is going to reduce going forward is between EUR 140 million, EUR 150 million every year. Do you believe there is room for increase in debt level? Because, for example, because of the M&A already done and also the new contract you signed in the last two years. Finally, the deal in Greece you announced recently, if you can give us some more color in terms of the financials and the impact on ENAV. Thank you.

Speaker #3: The normalized free cash flow generation, excluding the impact of the balance that is going to reduce going forward, is between €140 million and €150 million every year.

Speaker #1: So what I wanted to tell you is that I'm not searching to increase in the regulated market in Italy because we are the only one managing this service.

Speaker #1: So it's not what I mean. But I want to reinforce our positioning as leader of managing the air traffic service in the whole Europe.

Speaker #3: So, do you believe there is room for an increase in the debt level, for example, because of the M&A already done and also the new contracts you signed in the last two years?

Speaker #1: So now we are the first one in terms of punctuality, in terms of capability to be flexible. If we want to be and keep our leadership position, we have to invest continuing in our flexibility, in our technology, in our human capital.

Speaker #3: And finally, the deal in Greece you announced recently—if you can give us some more color in terms of the financials and the impact on it.

Speaker #1: So this is what I meant before. So we will want to continue be the leader in Europe. Therefore, we have to keep our pillars of the old business plan, the industrial plan, adding new pillars that we are going to define in the next weeks.

Speaker #3: Thank you.

Speaker #1: Talking about M&A, of course, as we said in the past conferences, the old business plan already includes up to 350 million euro of higher power for inorganic growth.

Speaker #2: Thank you for the question. I'll start with the part related to M&A, and also to reinforcing our position in the regulated market.

Igor De Biasio: Thank you for the question. I start from the part related to M&A and also to reinforcing our position in the regulated market. What I wanted to tell you is that I'm not searching to increase in the regulated market in Italy because we are the only one managing this service, it's not what I mean. I want to reinforce our positioning as leader of managing the air traffic service in the whole Europe. Now we are the first one in terms of

Speaker #2: So what I wanted to tell you is that I'm not seeking to increase in the regulated market in Italy, because we are the only ones managing this service.

Speaker #1: Today, it's only more or less 8 million euro has been deployed, as you said, with ID Group, leading significant headroom to push the value creating M&A opportunities.

Speaker #2: So it's not what I mean. But I want to reinforce our positioning as leader of managing the air traffic service in the whole Europe.

Speaker #1: If the right targets will become available. So we are now looking for opportunities and companies, but the process is still at an early stage.

Speaker #1: So we will provide you more details as soon as we have more concrete information. What is sure is that we are looking to add a chance business.

Speaker #1: So not all kind of opportunities, but only the real sensible opportunities in the business close to our business. Another point important is that the ID Group acquisition was quite small, as we said, compared to the whole firepower we have for organic growth.

Speaker #1: We are going to look not only small companies, but we will be open to evaluate also larger opportunities. Luca.

Speaker #2: Thank you, Igor. For what concerns the free cash flow, breakdown, just to give you more color in 290 million guidance that we have given for 2026.

Speaker #2: As said, 190 was the one we expect to we will definitely not only expect, but definitely have from the tariffs. The other 20 millions increase are related to the net aerium you know that we have sell aerium.

Speaker #2: Half of the disposal are around 27 million, so 27 million cash in that we had just some weeks ago. And we have used 7 million also to buy ID Group.

Speaker #2: So net is under 20 million of cash in. And the rest, so around roughly 80 million we expect from operation. Then if the traffic will increase even more, actually probably we will have even a better free cash flow.

Speaker #2: And I remember that is better than the last year. The from operation last year, we had 58 million. Now we are talking about 80 million at the least.

Speaker #2: So that says the volume. The second question was what is the normal value? There's no normal value because we know that is of the cash flow.

Speaker #2: For us, because the core business brings free cash flow, also depending on the performance that we do in terms of cost saving versus the tariffs that you know at the beginning with the relatory period is always a little bit more time more sure.

Speaker #2: And then by the year after year, if we do better, if we increase our capability to manage. We can increase this value. So just taking consideration more or less would be 80 to 100, but I just gave also what it was in 2025.

Speaker #2: I was 58. I guess the answer, Luca, to your question, did we?

Speaker #3: Yes. Yes. For just a clarification on the upgrade on the free cash flow guidance this year. So if I got it right, it's basically the higher traffic growth which explain the improvement from 250 to 290.

Speaker #3: Of course, on top of the M&A inflows is that right?

Speaker #2: If you're asking to draft if the reason or not any M&A impact on this, we just have a very small really, really small around 1 million from ID Group.

Speaker #2: That is just operative. If this is the question?

Speaker #3: No. Sorry, Luca. Yeah. This year, the drivers behind the free cash flow is, of course, the reversal of the balance, the operating cash flow.

Speaker #3: And if I got it correctly, these higher free cash flow comes from the fact that now we are projecting the traffic, the service unit growing 6% approximately.

Speaker #3: Sorry, 4% growth that you were expecting at the beginning of the year.

Speaker #2: Definitely it's a mix between this one mainly is the traffic, yes, versus the planned one. So from 250 to 290 is aerium plus the operative I mean, free cash for the higher traffic that we manage.

Speaker #2: Yeah.

Speaker #3: Okay. Great. Great. Okay. Thank you. That was highly my question. Thanks.

Speaker #2: Very welcome.

Speaker #4: Next question is from Nicola Pessina, Mediobanca.

Speaker #5: Yes. I have a follow-up question on the 2027 tariff. I understood correctly, you mentioned 160 million euros of balance utilization in 2027. Which suggests to me en route tariff broadly line with one of this year.

Speaker #5: So is my reasoning correct? Do you have any kind of visibility you can provide us about this? And maybe another question about regulation. I know we are still very far away from RP5, but brainstorming meetings are still are already underway.

Speaker #5: So I'm wondering if there is any proposal or you would expect at least today things to remain unchanged. Thanks.

Speaker #2: Okay. Nicola, for what concerns the tariff 2027, the final approval tariff is not yet I mean, approved actually done really. And there will be by the end of 2020 sorry, November 2026.

Speaker #2: See that there was you know that in June, there is an analogic committee where there is the proposal tariff. I don't know if they are public or not.

Speaker #2: I mean, in any case, just taking consideration the new tariff for either it will be a little bit lower by definition. 2027 tariff will be a little bit lower than to 2026.

Speaker #2: For the main reason that the balance reversal is going to be reduced. So as said, we are roughly 190 million balance reversal in the tariff 2020 7 that we are cashing in.

Speaker #2: Next year would be 140, 46, 47 million so we have less than 40 million no, sorry, 50 million also. That no, say 40 million that are less that are kind of costs that we put in the tariff to cash in.

Speaker #2: So that's the main difference. For what concerns, sorry, maybe there was the regulation for the first part of the answer is like no, officially the European Commission just started the consultative so-called consultation asking all the stakeholders the stakeholders and what could be their feeling, the impact, the suggestions.

Speaker #2: So really early, early stage.

Speaker #5: You just add that we are in coordination with the other big service provider in Europe. I just met last Friday the CEO of Also Control, which is now also the chairman of the A6 Alliance.

Speaker #5: So we are all aligned to try to help also the European Commission to continue improving the regulation of our service. So we are working with the peers to get a good regulation for all of us.

Speaker #5: All right. Very helpful. Thanks a lot.

Speaker #4: Next question is from Marco Limite Barclays.

Speaker #3: Hi. Good afternoon. Thanks for taking my question. The first one is on free cash flow again. Just wanted to clarify. Luca, you were mentioning 50% of the, let's say, 50 million that you have received from the disposal.

Speaker #3: Did I get that right? And why only 50%? The remaining 50% goes into the next year or what? Just to clarify on that. And the second question is on the Middle East crisis because clearly we have seen airlines relocating traffic away from the Middle East and maybe refocusing capacity into Spain, Europe, and so on.

Speaker #3: And that could be one of the explanation why your traffic has been so strong in the first half. Would you and maybe that's also why you assume a slowdown in the second half.

Speaker #3: Would you agree with that or not? Thank you.

Speaker #2: From the free cash flow, just to clarify a little bit better than the point, the total deal was for us 66 million dollars actually.

Speaker #2: Just consider that in terms of payment that we first payment of 27 million euro that was already be done was done just a couple of weeks ago.

Speaker #2: And that is free cash flow also in the year. For what concerns instead the other 28 million we expect to have in one year time from now.

Speaker #2: So in I would say more or less in June, July, 2020. That was the part of the agreement. So you just put it in more or less 50% now and 50%.

Speaker #2: In terms of net debt actually you have it but you don't have any free cash flow.

Speaker #5: Let me try to answer to the second questions. So let's say it's the answer let's say is composed by a mix of points. So let me say that first of all the crisis in the Middle East is not creating us problems in terms of flights, in terms of numbers of projects we are managing.

Speaker #5: Why we are improving so much just to compare with the other European countries. Because as I said in my speech in the initial part of the speech in the first half of 2026 in 30% of the overall saving delays in the air route traffic across the whole European network.

Speaker #5: So the reason why one of the main reason why we are increasing so much is that as we are flexible. As we are capable of helping other countries with big problems like France or also the Balkans or sometimes also Spain we are able to attract to Italy other flights that didn't have to go through Italy.

Speaker #5: So we are solving issues and that's why we are improving so much. So Middle East crisis is something that we are looking at trying to understand what can happen in the next future.

Speaker #5: But until now we consider us quite safe.

Speaker #3: Thank you. So quick follow-up on the free cash flow. So we should expect a plus 25, 30 million also in '27 to the free cash flow.

Speaker #3: So if for example we add in the model under 50 now goes to under 80 because of that. Right? Just to be very, very clear.

Speaker #3: Thank you.

Speaker #2: Yes. In 2027 will be under 28 millions of free cash flow but not actually this will not impact the net debt. As it's already impacting now.

Speaker #2: It's just a financial credit actually. Is that clear?

Speaker #3: Yeah. Yeah. Very clear. Thank you.

Speaker #4: Mr. Gambrini, there are no more questions registered at this time.

Speaker #5: So many thanks to everybody. For joining us and our conference call. And have a great vacations.

Speaker #2: Bye. Thank you.

Speaker #5: Thank you. Thank you to all of you. Thank you for the questions, for the attention. It has been a pleasure to talk with you.

Speaker #5: See you soon.

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