Good morning. At this time, I would like to welcome everyone to Aena 9M 2023 results presentation conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press the Star followed by one. I would now like to turn the conference over to Ignacio Castejón, Finance Director. Please go ahead.
Thank you very much. Good afternoon, everybody, and welcome to our nine-month results presentation for the year 2023. This is Ignacio Castejón speaking. It's a real pleasure being with all of you today. Our Chairman and CEO, Maurici Lucena, will host the call together with Carlos Gallego, Head of IR, and myself. José Leo sends his apologies for not being present at the call today with us, as he's on sick leave at this moment in time. Now, I will give the floor to Maurici Lucena. Thank you, Maurici.
Thank you, Ignacio. Good afternoon, everybody. Thank you for joining us today. I will start as usual with the key highlights and then I will give the floor again to Ignacio Castejón. And at the end, as always, we will have the opportunity to discuss whatever issue you want in our Q&A session. Okay, I will start with traffic. As you can see on the documents that we sent you, the first nine months of 2023 have performed very well. Aena Group traffic increased by 17.4%, up to 240 million passengers, which represents a recovery of 100.8% of the traffic in the same months of 2019.
Concretely, in Spain, the traffic increased up to 216.6 million passengers, which is equivalent to 101.3% of the traffic in 2019. And as usual, in the past two and a half years, domestic traffic performed very strongly, up to 107.9% recuperated versus 2019, and international traffic is almost fully recovered. It reached 98.3% of the traffic in 2019. So we can clearly state that the traffic has fully come back, and we have completely overcome the very deep crisis of the pandemic.
You know, as well that, in the past days, the airlines have released their scheduling for the 2023-2024 winter season, and I think that the figures are very good figures. Concretely, they have scheduled 126.6 million seats, which represents an increase of 15.1% compared with the 2022-2023 winter season. So it means that, I think that, we can say, naturally, then, that we expect to close the current year, 2023, at around 280 million passengers in Spain, which would represent 102% of the traffic of 2019.
You know as well that this percentage of traffic in relation to 2019 terms is within the guidance that we provided for the full 2023 at the beginning of the year. In London Luton Airport, things have also performed quite well, but you know that the recovery I would say globally in the U.K. is a little bit delayed compared with Spain. And it means that in the first nine months of the current year, the traffic in London reached 90% of the traffic of 2019.
In Brazil, and I'm now referring to the northeast airports of Aena in Brazil, the recovery was better, much better than in the UK, and it reached an equivalent 104.9% of the traffic in 2019. And, if we look to the future, I think that we are positive. We are, I would say that we are optimistic, but at the same time, we remain prudent because we cannot forget the potential headwinds. And, I would like to refer to the wars in Ukraine and the war in Gaza, the higher costs of living and potential aircraft deliveries taking longer than expected.
All in all, as I say, we remain sanguine, and we think that the end of year will be a very good end of the year for Aena, and we are also optimistic referring to 2024. Now, I move to financials. You know that ordinary revenue grew by 20.1% if we compare these first nine months of the current year with the same period of 2022, and the ordinary ordinary revenue stood at EUR 3.7 billion. I would like to highlight aeronautical revenue, which increased by 16.6%, commercial revenue, which increased by 23.7%, real estate revenue by 17.7%, and finally, international activity, which grew by 29.1%.
At present, our international activity is contributing 7.1% of total EBITDA of the group, which is, I would say, a significant figure, especially if we take into account that it does not still count the future contribution of Congonhas and the other 10 airports around Congonhas. On the cost side, I would like to underline that the total operating expenses, they increased 5.1% compared with 2022, and other operating expenses grew by 3%. This evolution simply reflects the traffic growth, the full reopening of terminals and airport spaces, and, of course, inflation and lower electricity prices. The EBITDA for the period came at a noteworthy EUR 2.1 billion, and the EBITDA margin closed at a relevant 55.9%.
For the full 2023, we prudently expect a consolidated EBITDA above EUR 2.7 billion . And the net profit increased by 71.4%, reaching EUR 1.1 billion, confirming the prospects for an attractive dividend payment in 2024, which, you know, is a, let's say, a clear priority always for Aena, its management, and its board. The traffic growth, the commercial performance, the lower electricity bill, and the financial results are the main reasons that explain the performance of both the EBITDA and the net profit. Now, I move to the commercial area. The robust growth trend on the commercial business continues, and I would like to highlight firstly the commercial sales, which exceeded 2022 by 15.6%.
And secondly, the ratio sales per passenger, which is 14.1% higher than the same for 2019. I would say that a number of reasons are behind this good performance, and I would like to highlight the progressive recovery of the British under non-European Union status in duty-free, the reopening of most of the specialty shops, the sales per passenger, and the penetration rates in food and beverage, and the price increases in car parking and VIP lounges. Since November 2021, I think that we have experienced very good news related to the new contracts. In food and beverage, we have awarded 111 contracts, and the minimum annual guaranteed rents growth in the period 2023-2026 stand at 124%,
135%, 148%, and 157%, respectively, against 2019. And in the case of our specialty shops, we have awarded 210 contracts with increases respectively of 111%, 124%, 128%, and 136%, which I would honestly say is not bad at all. On the contrary. To end up my comments on the commercial section, in the duty-free business, the variable income of the Canarian and Barcelona lots exceeded the minimum annual warranty rents. And it is the first time ever that two lots simultaneously invoice the variable income instead of the MAGs. Now, I move to Brazil. We have good news as well.
In October, we took the full control of the great airport of Congonhas. I clearly can say that the transition of the airport took place normally, and probably, which is, excuse me, more relevant for you is that works are underway on the initial CapEx plans. These CapEx plans will be presented to the regulator before the end of the year, and the CapEx solution that we will propose includes increasing the terminal surface, apron, contact positions, boarding gates, and this is important: it does not contemplate changing the current runway configuration in Congonhas.
Let me be clear. I know that there are some concerns among investors and analysts, and I really know very well how Aena works, and I can naturally say that the execution of the CapEx in Congonhas will be complex, but for us, for Aena, I think is perfectly viable. So I again, I'm optimistic with the evolution of Congonhas, both in many aspects, operationally concerning the CapEx and also financially. We have had in the past months some good news coming from the Brazilian authorities. Firstly, the authorities have granted an increase of capacity from 41 to 44 operations per hour.
Secondly, the tariff proposal has been already approved and will come into force this month. Now, I will move to financing. In October, as you perfectly know, Aena issued its first-ever corporate bond for an amount of EUR 500 million, and we closed the deal with an annual reoffer yield of 4.314%, which is, I would say, not bad for our first time. But of course, in similar conditions in the future, we would expect naturally a little bit decrease in this annual reoffer yield. Concerning security, I again move to another issue.
The board of directors awarded the security contracts of 46 airports for five years, with a 4.3% discount over the tender price, which again, is a good news. And finally, you know that we've. We will beat the EBITDA target, excuse me, the net profit target that we set within our strategic plan. I think that we will beat our targets at the end of 2023. I mean, the targets that we foresaw for 2024, 2025. So we clearly feel compelled to update our financial strategic targets in a capital markets day event during the first quarter of 2024, after the 2023 results presentation.
This is the end of my presentation, and now I give the floor back to Ignacio Castejón. Thank you very much.
Thank you very much, Maurici. Hello, everyone, again. As stated by our Chairman and CEO, Group EBITDA for this period has grown to EUR 2.1 billion. That is an increase of 38.8%, very close to 2019 levels, indeed, with a very high margin of 55.9%. I would say that there are three main drivers behind that increase: traffic evolution, commercial trends, and also cost performance, in particular, energy cost, energy prices. Let's have a look at traffic. Our CEO has already talked to us about the recovery versus 2019 at the Spanish network. Domestic, from a domestic standpoint, 107.4% and international, 98.4%. Let's have a look at the international markets, because that's, that's our biggest market.
If we look at Europe, the recovery is up to 97.6%. Passengers from Italy, France, the Netherlands, Portugal already exceed 2019 levels. The recovery from the UK market and from Germany, which are our two largest markets, already sits at 93.5% and 89.1%, respectively. I would like to stop one sec in the long-haul market. This market, except for Asia, is already above 2019 levels. If we look at South America, that is at 108%, North America, 101%, and Africa 122%. So long-haul markets are already there. We released the winter schedule earlier this week.
What we are expecting might happen is significant growth in Europe, +99, +19%, 19%, with the UK and Germany growing circa 20% in number of seats. It's also worthwhile mentioning the expected growth for the USA, +27%, and in Asia, +257%. As mentioned by our CEO and chairman, there might be headwinds, and also the winter scale is subject to attrition in the following months. But as of today, those are the levels of increases that we are expecting. I also refer to the commercial trends, to the commercial performance as the second reason for the EBITDA growth. We have already discussed the increase in rentals, the increase in sales, but I would like to stop one sec in an absolute number.
This first nine months of this year, sales of our operators, sales of our retailers at Aena, have already exceeded EUR 3 billion in their activities at Aena. Of course, we can look at the increase at duty-free, food and beverage. Main reasons behind those increases is higher penetrations and higher transaction values. We can also stop at specialty shops. We are finally adding more and more spaces after COVID, with new concepts. VIP services delivering a very strong growth with very strong margins. Let me finalize these two topics with cost. Cost in this third quarter have followed a very similar pattern to the first six months of the year. We have seen some increases and also some material reductions in the cost of energies. Those increases have been lower than in the first six months.
Basically, the first six months were affected because of Omicron in 2022, and that's why in June 2023, you saw t hat's one of the reasons why you saw those increases, those higher than in September or this quarter. Energy costs. The main reason, the main driver behind that reduction is basically energy prices, as you know. The average cost of energy megawatt per hour was 167 last year, and what we are anticipating for this year, for 2023, is EUR 95 . Let me end up my short presentation with a couple of further points. Increase in net income. As highlighted by Maurici, there has been an increase of 71.4%, very close to 2019 levels and above EUR 1 billion.
The main reason is EBITDA growth, but also the performance from a financial standpoint of our financial results, contributing zero EUR, therefore not affecting the P&L. Finally, I would also like to confirm that from a leverage standpoint, net debt-to-EBITDA ratio, we are already below 2019 levels. That means that the company, through the cash generation that you have seen this time, nine months, have been able to leverage naturally further the performance of our businesses. I think that's all from our side, so we'll be happy to start the Q&A session and the rest of this meeting.
The floor is now open for your questions. To ask a question this time, please press star, then the number one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. Thank you, and your first question comes from the line of Elodie Rall from JP Morgan. Your line is now open.
Hi. Good afternoon, everyone. Thank you for taking my questions. I'll have three, if I may. The first one is on the short-haul ban on domestic traffic that we've read in the news from some of the political parties. So if those bans were to be put in place, I was wondering if you could give us an indication on how much of your traffic would be exposed to that. That would be my first question. Second, I had a question on dilution and aviation revenues. Dilution is still high over the first nine months, and I was wondering if you could tell us how long do you think this will continue? And my third question is on retail revenue and seasonality between the quarters, given the accounting of MAG.
I was wondering if we should expect Q4 retail center packs to come back to recover to Q1 level? Thank you.
Hello, this is Maurici Lucena speaking. I will take the first question, which I must confess that I knew that would come sooner or later. First of all, let me clarify that the literal words of the agreement between Sumar and the Socialist Party states that it is not a ban. It's not a ban on domestic routes. Literally, the agreement says that the initiative will promote a reduction of domestic flights on those routes with rail alternatives lasting less than two and a half hours maximum. And it contemplates an important exception, which has to do with connecting traffic with hubs. In other words, if they are connecting flights with hubs, the route will be kept alive.
As the Ministry of Public Works has announced, we will analyze the concrete implementation, but I would like to state clearly that the vast majority of the domestic routes do not have in Spain a rail alternative lasting less than two and a half hours. Thank you.
Thank you, Maurici. Hi, Elodie, this is Ignacio speaking. I'll, I'll try to address your two last questions. First one, dilution. Really, what has happened with dilution in these nine months of 2023, if you compare the second and the third quarters, levels are, are, are not that different to 2022. Really, the, the big change is, is, is explained by the first quarter, the first quarter of 2023 versus the first quarter of 2022. You will remember that, in the first quarter of 2022, our activity was still materially affected because of COVID, in particular, Omicron. So the company during that quarter generate concentration rather than dilution, and there is a significant change.
We are moving from EUR 38.7 million of concentration in that quarter because of Omicron to EUR 25.3 million of dilution in the first quarter of 2023. So that's explaining why you are seeing the amount of dilution that we have presented in our results. I think in the following weeks, what you will see is basically structural dilution that we have because of the traffic growth and how that growth is performing with leisure and low cost operating in our airports. Your third question, Elodie, if I remember well, was related to a forecast for commercial revenues, guidance for the last quarter.
I think the CEO and the chairman has already provided, and we have included in our documents, our guidance in terms of traffic and also our guidance in terms of EBITDA at the end of the year. So I would say that, with that information, I think following is wouldn't be that difficult to try to estimate commercial revenues or a forecast for commercial revenues for the rest of the year, Elodie. Happy to address or happy to discuss later with you, Elodie, if you need further info. Thank you.
Okay, thank you.
Our next question comes from the line of Nicolò Pessina from Mediobanca. Your line is now open.
Yes, good afternoon, everyone. I have a couple of questions. The first one on the winter capacity increase of 15%, if you can elaborate, if you can explain, provide some more details about this, this increase. How much is in the last two months of this year? How much is in the third quarter of next year, considering that Easter will also fall in the third quarter in 2024? I'm trying to understand if there is any exceptional event impacting on these numbers. Second question on the 2024 traffic outlook, what you have in mind? And maybe a final question on cost inflation for next year, if there is any item for which you see a relevant change, any agreed salary increase, and maybe your view on energy costs. Thank you.
Hi, Nicolo. This is Ignacio. Thank you for your questions. I think with respect to winter, the winter schedule. I can discuss with you some further input, but I think it's important to mention a couple of things. I think the first one, this year, there is one more week in the winter season, and also the Easter break is part of the winter season. Last year, Easter break took place in April, and this year, the Easter break is happening the very last week of March. So those are two things that might affect, as you were right raising your question, that might affect that forecast.
There are other things that are, that might affect that, that estimate, that number at this moment in time. And I think that the most important one from our perspective is the potential attrition that, that may happen. That always happens through the winter season or through any season when it evolves, that number of seats changes, and normally what you see is a reduction. So I think short answer, yes, there are a couple of things that might affect that forecast, and I relate it to those two points that I was sharing. With respect to the outlook for 2024 traffic, I think we are, as you will understand, we are in the middle of putting together our budget for next year.
That's information that the company is working in, on, and we'll take into account, of course, the demand that we have seen or the potential demand that we have seen, thanks to the winter schedule, but also the context and the expectations for the summer season. So I think it's a bit early to start talking about the specifics for the next year traffic, Nicolo. With respect to cost evolution for next year, basically, Nicolo, what I would share with you is we are planning to end up the year at a margin already explained by our CEO and chairman. We are seeing, of course, some inflation getting down, but we're, we are also seeing activity coming back to the levels of 2018 and higher.
So in order to provide a constructive perspective for the rest of the strategic period, and for 2024, what we are planning is to sit with all of you in March and have a discussion about how we are seeing the end of 2024, 2025, and 2026 in the basically further to all those new changes. So that's as much as I can share with you, Nicolo.
All right. Very, very clear. Thanks a lot.
Thank you.
Next question comes from the line of Luis Prieto with Kepler. Your line is now open. Next question comes from the line of Alexandra Peresova from Equita. Your line is now open.
Can you hear me? Okay, thank you for taking my question. So the first one is again, on traffic. So your updated guidance of being 2% higher than 2019 in 2023 implies a fourth quarter growing plus more than + 3% vis-à-vis 2019. So is this underpinned only by this, by the capacity provided by airlines, or do you already see this +2% in October? And if it is, this growth trend, we should expect for the beginning, at least of 2024. And the second question, just a precision on what you said on the update on your business plan.
So at the very beginning, you said that already in 2023, you expect to be, let's say, already achieving the targets you expected for 2024 or 2025. So are you referring to the EBITDA margin at already 55% or the absolute value of EBITDA, so already at 2019 level? Thank you.
Thank you, Alexandra. This is Ignacio. I'll try to address your queries. I think with respect to traffic, I think the guidance that we have provided is basically sits at 102% of 2019 traffic for the whole year. That sits in the high part of the range that we provided back in February of this year. That is equal to around 280 million passengers. I think there is public information disclosed by the company for the traffic as of September. So with respect to the performance for the last quarter, sorry, of this year, that's the million of passengers that we are estimating for October, November, and December.
With respect to 2024, we haven't provided any guidance so far. I think, sorry, but I could add, I would refer to my answer to Nicolo. Please hold with us until we are able to share with the market our new medium to long-term forecast and the strategic plan in the first quarter of next year. With respect to goals, targets of our strategic plan, sorry, we haven't been clear. What we are expecting is that a consolidated EBITDA for 2023 will be above EUR 2.7 billion, and the margin will be higher than 56%.
When we discussed our strategic plan back in November 2022, we disclosed some goals and targets, mainly EBITDA volumes and margins, but also net debt to EBITDA, et cetera. At that moment in time, our estimates, based on our traffic forecast and our commercial performance, basically were more in the second part of our strategic plan. There is a specific year for those goals, and what we are trying to say to the market is that for traffic and for EBITDA, we will be at those levels in 2023.
Brilliant. Thank you.
Our next question comes from the line of Satish Sivakumar with Citigroup. Your line is now open.
I got two questions here. Firstly, on the Air Europa and IAG merger, have you had, like, any conversation with the regulator and European Commission on your feedback? Obviously, it would mean that they had to give up some slots, and what's your thought around that? The second one is actually on the occupancy rate on the commercial side. Is there any more shops that needs to go, like, generally, if you give any color on occupancy rates. Just related to that, on the commercial revenue per pax, how does it actually progressed within the quarter? Say, what was the exit rate in September in order to compare with the quarter average? Yeah. Thank you.
Thank you very much for your questions. I will ask you to clarify the second one, and meanwhile, I'll try to address your first one. We haven't heard any specific input on that topic, if I may. What we would expect in the event that that transaction may happen, may be approved, is a potential reduction of some domestic or Latin America routes to improve profitability for the company. And in the medium to long term, it will mean improved, basically higher volumes in the medium to long-haul routes, fed by a more efficient domestic network, basically the result of those two companies. Very likely, basically, having Air Europa and IAG together will mean a stronger position in South America.
That's how we see it from our perspective. With respect to specific feedback, we don't have it. If you don't mind, Satish, repeating your second question, so I could try to address it as good as possible.
Yeah. Sorry. Yeah, my second question is actually has two parts.
Yeah.
First one is occupancy rate for the shops in Spain. What is the occupancy rate today? Basically, there's some more to ramp up in terms of opening up new stores. That's what I was trying to get to. Second part of that is, your commercial revenue per pax averages around EUR 5.5, right? So how does that trended in throughout the quarter? Did you see step up in first part of, say, August, July and August, and then September was weak, or it was consistent throughout the months?
Okay. Thank you for clarifying it. So with respect to occupancy rates, that's information that by business line, we don't disclose to the market. So, I have to apologize for that because I will not be able to give you a specific answer. What I can confirm to you is a general trend. I think, I'll stop one second, especially specialty shops. Specialty shops, because of COVID and the general tendencies in consumption, were the most affected business line.
And what we are seeing in this, in 2023 is a stronger recovery than in other categories, basically because we are we are being very successful attracting new concepts and developing new concepts in specialty shops, and that's helping us to come back with a much healthier and much higher occupancy rates than the one that we have in 2022 and 2021 because of COVID. So those those rates, those occupancy rates are getting very close to I would say to 2019 levels, but depends on the specific business line and depends on the specific on the specific airport. With respect to your second question, I wouldn't I wouldn't say that we have seen a material deviation on a monthly basis with respect to the performance of our commercial revenues per pax.
Okay. Thank you.
Our next question comes from the line of Cristian Nedelcu with UBS. Your line is now open.
Hi, thank you very much for taking my questions. The first one on domestic traffic, you are already recovered at 108% of 2019 levels. This stands out versus some of the other large European countries. So my question here, do you expect you can grow domestic traffic further from here in 2024, 2025? Or can you give us a bit of color, are we reaching a plateau here? Secondly, a bit of a technical question in the commercial division, it's a bit difficult for us to model the MAG revenues and the straight lining. So ballpark, I know MAG revenues recognized in 2019 were around EUR 144 million. Is that a ballpark, a good number going forward?
The same on straight lining, you're running at roughly EUR 10 million per quarter. Next year, I think you have the duty-free MAGs, the EUR 78 million that you disclosed in the past. So is straight lining in 2024 somewhere around EUR 120 million of revenues recognized? Is that a fair number, more or less? And I guess the last one, your commercial spend per pax is 23% above 2019 levels in Q3. Are there any initiatives going forward that could further improve that number? Are you increasing the retail space offered to retailers in 2024? Are there any meaningful initiatives from the retailers to improve their revenues there? Anything you could tell us. Thank you.
Thank you, Cristian. That was a good set of questions. I'll do my best to try to address as much as possible. I think with respect to MAX, your second question, I think that what we can do is we send, as you know, a spreadsheet explaining the accounting of MAX to all of you, so that that could be more clear. I think what I would propose, Christian, is we will send a more detailed analysis of our MAX, taking into account the MAX position as of year-end of the company, so that we can try to basically reach conclusions from that.
What is happening, what has happened this quarter is basically, if you look at this quarter on an isolated basis, is a reduction of the aggregate of MAG that you have seen up to the first part of the year, because of the effect that, that we have through the year. And even now that we are straight in, we have, basically a straight-lining input of the MAG, through the year, rather than following the traffic curve, as you perfectly know. So that's, that's what has happened this, this specific quarter. I think if we try to link this situation with, with some specific business lines, you have heard our chairman, has been the, the first time we have, the Catalunya plus the Mediterranean lot performing at a variable rent.
So traffic and also business commercial performance is, has helped in this specific, in this specific quarter. What you will see in the future, given that, the new duty-free contracts have been signed and they are entering into force as we, as we speak, you will see that, that, the multi-year impact affecting our EBITDA numbers, and we will have a higher EBITDA coming from those contracts, for the very first six years of the contracts, and then less the next six years, you will see a proportional reduction. So that's how they operate in a few words. But, based on your question, I think that I'm taking that homework with me, Christian, and we and we'll provide more information for year-end.
Meanwhile, we'll provide a new spreadsheet with these two different impacts that are affecting our EBITDA and CapEx. With respect to domestic traffic, I think I have to ask you again, Christian, sorry, to hold with us a bit until the first quarter of next year, so that we can provide a full new approach to our traffic forecast for the next years. On commercial activities, yes, there is a huge number of commercial activities that are going to be basically deployed in the following months. I think I would start just referring to the new duty-free contracts.
They are starting as we speak, this week, and of course, there will be a period of time of transition, but MAX, the new MAX, are already accounting, and variable rents will start accounting from an account, basically from a financial standpoint, as soon as they open their new stores and new facilities. With respect to car rental, I'm sure you have seen in the different media that our general director for commercial and real estate activities is already talking to the business community on this specific contract.
We are hopeful that through 2024, this is a contract that, this is an initiative that we will be able to attract very attractive bids, and that will start at the end of next year, sorry. This is the third largest business line for AENA from a commercial standpoint, so it's a very important one. We have other activities and bids, RFPs that are coming to the market. For example, in F&B for Barcelona Airport are coming to the market in a couple of years. The vending activities are coming to the market next year. So I think there are going to be a whole new set of activities, perhaps not as big
as the duty-free activities that you have seen in this year, but very relevant for Aena. Like, for example, the rent-a-car activities that will be in the market in the following months. Christian, I don't know if
Thank you very much.
If that's enough.
Appreciate it. Thank you.
My pleasure.
Our next question comes from the line of Graham Hunt with Jefferies. Your line is now open.
Thanks very much. Just two questions from me. Maybe just coming back to commercial and digging a bit more into the specialty numbers, which I think was very strong this quarter. You know, what's actually going on there? You know, is it more about new doors being opened, or is it high conversion in new formats? Just some color on, you know, what's driving that very strong performance in specialty would be helpful. And then second question, coming back on energy costs. Appreciate that maybe you can't give the 2024 outlook today, but maybe just remind us of your, where you are in terms of hedging and how your strategy looks going ahead into next year. Thanks.
Thank you for your question, Graham. I think your first question on specialty shops, I think it's a very valid one, and I would be very clear. There has been an increase in surface. There has been an increase. We have added around 10,000 more square, 10,000 more square meters to our activities, so that's a big part, or that's a big reason explaining the increase. But also the work from our commercial team that is managing to add and to attract new concepts. For example, JD Sports, Body Shop, Mango, Munich, Rituals.
You will be seeing new brands and new concepts that are coming to our airports, and that's also contributing to the increase in specialty shops. A category that has proved to be a difficult one after COVID. So it's a mix of things. Surface, of course, concepts, brands, all of that are compounding into the increases of specialty stores that you are seeing. And I agree with you, that the performance this quarter has been really good. I think when we look at the sales per packs in this specific category, they are performing above 2019 levels.
What we are trying to achieve is a basically delivering transaction values as high as possible with the new, with the new concepts and the new surface being added to this activity. With respect to your second question on energy, and thank you for understanding our basically impossibility to provide a specific guidance on energy cost for next year. I think there is an electricity market out there providing market information for forward and future prices of energies, so I think all of us can work with that. But what I would like to share with you is that earlier this year, the company closed a medium-term hedge agreement. Basically, the company has fixed part of the energy cost for 2024, 2025, 2026, and 2027.
That's around 30% of our energy consumptions for that period of time. Having said that, we keep working on potentially, hedging, a bigger part of our consumption, and we are exploring, the possibility of, signing a PPA in the future, as long as the conditions are attractive, are attractive for us. That would be also be a transaction for the medium, for the medium term. Having said all that, you are, you are very aware that, our big, our big strategic project in this matter is, is our solar plan, our solar, plan for the future, and that's where the company keeps, keeps working. Thank you.
Thanks very much.
Our next question comes from the line of Marcin Wojtal from Bank of America. Your line is now open.
Yes, thank you so much. I've got two questions. So firstly, on aeronautical tariffs, how confident are you that CNMC will approve your request for a 4.1% increase for 2024? And that is considering that some airlines have already filed an appeal. And when should we expect final decisions on tariffs? And my second question, I wanted to come back on yield per passenger dilution in your aeronautical segment. I'm just wondering if there is anything that the company can proactively do, perhaps with your tariff structure, to try to minimize the dilution next quarter and in 2024. Or the best way to be compensated for it is to just wait for the K-factor adjustment that comes with a two-year lag.
Thank you.
This is Maurici Lucena. I will take the first question concerning the tariff proposal for 2024, specifically beginning in March 2024. Well, I must clarify that the CNMC has already endorsed the P index of 3.5% increase.
So now we are waiting for the decision of the Spanish government. And we understand that there's time to have a decision from the Spanish government before the entering into force of these tariffs in March 2024. And I clearly see no reason why it should not be approved. So in other words, I'm confident that our proposal, already endorsed by the CNMC, I'm confident that it will be approved. It's just a matter of time, and I think it has simply to do with the political process. I mean, you know that our Spanish government is now what we in Spain call in functions.
I think this is the only reason why the approval of the tariff proposal is being delayed compared with past recent years. Thank you.
Thank you, Maurici. Hi, Marcin. This is Ignacio. I think the short answer with respect to dilution next quarter, the company cannot do anything for this specific quarter. Basically, tariffs and prices, costs per airport, et cetera, have been already set. So that's the situation. And that's how regulation works. For next year, we are monitoring how the tariffs for next year will be implemented at every airport level, and we'll try to mitigate as much as possible that impact. Thank you.
Our next question comes from the line of Manish Beria from Société Générale. Your line is now open.
So, my first question is also on this, dilution. I mean, so you said earlier that it's a structural thing or dilution. So should we expect like something like EUR 90-100 million of dilution also in 2024? This is the first, and the second is like, this K-factor. I understand can be recovered after two years in the tariffs, no? But since we have a cap, at least the P-factor is a cap, I mean, because that moves with the P-factor or the cap. So but with this cap, technically, we cannot recover actually this K-factor, whatever dilution we are seeing also in these two years. So is the right understanding of mine about this K-factor?
Hi, Manish. This is Ignacio. Your understanding is correct, as long as we are under the interim situation, so that there is a cap in our tariffs, that's something that we that may happen, that may happen to the company. So interim, the interim regime, the company gets rid of that interim regime at the end of 2025, so that situation, we will not have that restriction as it is now drafted, after that date. But your understanding is totally right, Manish.
And also this dilution that you're seeing right now, so will that also continue next year?
Well, I think that will depend on the final decision on tariffs for next year. As our Chairman and CEO was explaining, there is a step that is still to be got to by the company, the final increase, and from there, we'll move on. So I cannot anticipate that situation at this moment in time.
And then I also have one more question. So in the P factor, you have this 3.5% that you are proposing right now. So I'm just trying to see, like, whether we can also get this level of adjustment, like 2%-3%, also, let's say, in 2025, 2026, tariffs, no? So is this possible? I mean, you, I understand you explained last time that is related to different indices in Spain. So can it be possibility? I mean, because we earlier said, like, there is a cap of 1%. But I'm just trying to see, like, is this also a possibility if the things works out the same like it has worked this year?
Thank you, Manish. Well, the P factor is an output from the formula established in regulation, and that's basically accounts for eight or nine items with specific weightings. Some of those items are updated with our accounting, others are updated with our accounting or with a specific industry specific indexes. So it's a tailor-made index. The company follows the regulation, applies that formula, and the output is a percentage. This year, what we got is a number equal to 3.5%. If next year, following that formula, the output is higher than 1%, of course, the company will follow regulation and will try to basically get the outcome that is in the best interest of the company.
But that's regulation is a tailor-made index, as you know, Manish. And we'll follow that tailor-made index.
But there is only one query here, like these indices. I mean, is it correlated with the inflation? I mean, like, let's say we are having now we are working in a high inflationary environment. So in this high inflationary environment, all these indices that is linked it, linked with the P factor, that moves in the same direction or not?
Well, Manish, they are not. This is not a CPI index. That's my first reaction. So it's not related to the Spanish CPI. It's related to the increases in some of the Aena cost, the largest ones, for example, staff, navigation, security, cleaning, BMR. So we look at the increases that we have in some of those items. For some of our cost items, we apply some industry, that they are public, some industry specific industry indexes. Of course, those indexes, what is the reason for the increase of this year of a P factor of 3.5%? The increase in the cost of energy that we saw last year. That's the main driver. So if you ask me, there is a correlation.
There is not any statistical correlation, but if what we see is a general increase in prices in the economy, all that will be translated into our cost base and also in some of those indexes. But I want to be very, very clear, Manish, it's not, it's not a CPI index. It's a tailor-made, composed of those items. I can send you the specific regulation, and we can discuss it offline, if necessary.
Okay, thanks. Good day.
My pleasure.
Our next question comes from the line of Dario Maglione, BNP Paribas. Your line is now open.
Good afternoon, everyone, and congratulations for a good Q3 result. So the first question, I appreciate you won't comment much on guidance long term, but for this year, the EBITDA margin 56% or above, is it reasonable to expect margin should be higher next year? That's the first question. Second question on tariff for 2024, what happens if the government doesn't make any decisions before the first of March 2024? And third question on Brazil, for the CapEx, do you plan to have an EPC fixed price contract in place? Thanks.
Hello, this is Maurici Lucena. I will try to answer the question related to the tariffs 2024. I think that the regulation is very clear. This time, because of also some constraints of the regulation, this is why the Spanish government must take a decision, which is just being delayed, as I said, because of the political situation related to the probably very soon appointment of a new government. So we understand that there are, We still have time before the entering into force of the March 2024 tariffs to get them approved by the Spanish government.
I mean, I'm not worried at all, in other words, but the regulation clearly states that if there's no official decision, a formal decision, the regulation states that the proposal that would be valid is Aena's proposal. So, I mean, in no case there will be an empty space in which we would not know and airlines would not know what the 2024 tariffs are. So either the decision taken by the government will enter into force or the proposal of Aena. But let me again say it clearly: I, at present, I do not contemplate that the Spanish government does not take soon a decision on this matter. Thank you.
Thank you, Maurici. Hi, Dario. This is Ignacio. I think your last two questions were related to CapEx and also guidance for EBITDA, EBITDA margin for 2024. I think the answer with respect to EBITDA margin for next year is an answer that I cannot give you. I think that, Dario, sorry, but I think I will ask you to hold on a bit until March of next year, so that we can have a comprehensive discussion with respect to the traffic forecast, EBITDA margins, et cetera, for the period of time up to 2026, and that's where, what we are working on right now. With respect to CapEx, was your question related to CapEx being impacted by inflation?
Well, just delays in execution of the works. So I wanted to understand whether you're going to sign an EPC fixed-price contract, or you will take some of the risk?
With respect to which specific project? Because the approach of the company for infra development, contracting, et cetera, depends on the risk profile of every project. So which contract area are you referring to?
Congonhas. So Congonhas.
Congonhas. Okay. At this moment in time, on Congonhas, what we are doing is finalizing the CapEx plans. Those are being, Those are going to be discussed with the different stakeholders, such as carriers, regulators, et cetera, in the following weeks, with the intention to being submitted to ANAC in December. So the goal is having that CapEx plan basically with all the different blessings in this year. With respect to contracting, that's something that we are discussing internally. A final decision will have to be made based on the final project that we have in front of us. So I'm happy to follow up on that one and in the future, Dario.
Okay, thank you.
Our next question comes from Luis Prieto from Kepler. Please go ahead. Your line is open.
I hope you hear me now. I had a technical problem earlier. Yes, thanks for taking the questions. I had three questions, if I may. The first one is coming back to the P index. So if the Council of Ministers approves the CNMC's proposal, is that effectively deactivating the 1% cap? In other words, what would be the role of the 1% cap going forward if the proposal is approved? The second question is if you could update us. I'm reviving a couple of threads here. The first one is, could you update us on your M&A pipeline at the moment? And the second one, I've seen some encouraging press coverage on this front, so any insights on the Barcelona airport expansion in the current political context? Thank you.
Hello, Luis, this is Maurici Lucena. Well, first of all, concerning the Barcelona airport expansion, yeah, it's been a long journey until the current situation. And I think that now we are just waiting for the Spanish government and the Catalan government to meet in the coming weeks or months. You know that formally, both parties have publicly announced that they will meet in the coming weeks or months. So Aena, in this situation, will provide all the information requested for this analysis and discussion between the Spanish and Catalan government.
We expect that the final outcome of this analysis and discussion ends in a positive outcome, in the sense that you know that we are strongly committed to this expansion. We think it's great for Barcelona, it's great for Catalonia, it's great for Spain, and it's also, it would be also great for Aena. So we are now just waiting for the evolution of the conversations between the Spanish and Catalan government. The other question I would like to address before I give the floor back to Ignacio, who will just clarify the issue related to the P index, is the M&A pipeline.
Well, you know that we analyze, as I have always said, the projects, the international projects on a case-by-case basis. This has not changed, but I would say that now our pipeline, aside from the ordinary analysis of the projects that come to our tables, as is the case for other large airport operators, I would say that is empty in the sense that we do not foresee in the short term to have on the table an international operation that is similar to Congonhas or the past in the northeast of Brazil. This emptiness of the pipeline could change? Yes, of course, it could change.
But I would want now that the company focuses on Congonhas, on Brazil, because we have to orient a lot of energy in on Brazil, but this could be compatible with the analysis of an interesting international opportunity, which is not so far the case. But again, I mean, I know that I have not answered precisely your question, but this is the true. Not at present, we are not analyzing an international project, but we of course are open to analyze it in the future. Thank you.
Thank you, Maurici. Hi, Luis. This is Ignacio. On your first question, a very short answer. This is basically a scenario that is happening this year for tariff of 2024, because the output of the formula that we were discussing earlier is at 3.5%. If next year the output is higher than 1%, we'll have to follow the same process. So this is not a general deactivation. I think those were the words you used, Luis. We'll have to follow the same process and explain why we are above 1%.
Very, very clear. Thank you.
Our next question come from Filipe Leite from Caixabank. Your line is now open.
Hi. Hello, everyone. I have just one additional question on my side. Can you give us an update on the real estate master plan? Do you expect to relaunch the tender sooner, or the process is on hold? Thank you.
Hi, Filipe. This is Ignacio. Were your question related to real estate? Because your voice was very low and we couldn't-
Yeah.
We couldn't follow you well.
Yes, sorry, sorry. My question is related with the real estate master plan, if you can give us an update on progress.
Yeah. Happy, happy to do so. What the company is doing right now, Filipe, is analyzing the best course of action for the company. That's internal work that is happening as we speak. We're analyzing different scenarios, different structures, and different, of course, schedules. So, that's a work that we would like to finish in the next months. So if the conclusion from that analysis is that we have to move forward into the [inaudible] with land plot, that is a very attractive one, and the whole real estate sector and logistics sector in particular are very attractive. That's a decision that we'll be making in the following months.
Okay, perfect. Thank you.
Our next question comes from José Arroyas with Santander. Please go ahead.
Yes, good afternoon, gentlemen. A couple of questions. Can you say when you expect to take over the remaining eight Brazilian airports? That's my first question. My second question, I wanted to come back to the security contract recently awarded. You previously said that the final price came in 4% below the tender reference value, which is good news, but if I understand correctly, the worth of the contract is, about EUR 1.1 billion over four years, and that equals around EUR 275 million per annum. If I understand correctly, today, the security cost is EUR 200 million. Can you say if you agree with my analysis, or if there are any offsets, say, in this contract, and more importantly, if this, overall value of the contract is, in line with your budget? Thank you.
Thank you, José Manuel. This is Ignacio speaking. Happy to address your, Let's start with the security contract. I think overall, the result, the company is satisfied with the result. It has been a good result after a very thorough process that started back in April. That result, following your last part of your question, is better than what we were anticipating in our strategic plan, and of course, is better than the amounts that were used for bidding purposes. Savings are around EUR 50 million, taking into account the budget for four years. I think you are totally right with respect to how security costs are, have been evolving.
I think the main reason for that is the increase in minimum salaries in Spain. I think if we look at the last four years, from 2019, what we have seen is a movement from around 735 EUR of minimum salary, to a figure that is close to 1,100 EUR on a monthly basis. All that increase, plus CPI, is impacting security costs. That's a fact, and you are seeing our numbers that we report every quarter. What is also affecting our activity in security? Of course, regulation and technology. Regulation is impacting our unit costs, sorry, in security and also innovation.
I'm sure you are aware that there is a whole new plan to modernize the equipment related to security, for example, with remote screening, biometrics, and new, new equipment. The equipment is going to be provided by Aena, but that is impacting our suppliers, and our suppliers are taking into account all those factors in their, in their pricings. What we see is the capacity to be as efficient as possible, and we are putting as much pressure as possible through this process. We have put, sorry, through this process put as much pressure as possible in our suppliers so that we could have a, I could say, the lowest or the smallest possible impact.
But those two things, those three things, sorry, CPI, minimum salaries, innovation, and regulation, are impacting unit cost in security. I think the next years, those are going to remain as the main three drivers impacting security. What we expect is that we are able to have security unit costs taking advantage of efficiencies at the highest possible, at the highest possible level. Your first question was related to the Brazilian portfolio, and I think was if we have taken over the other airports or our plans to do so, and I think that that's happening in this month, in November. So the whole portfolio of airports, in which Congonhas is the last one, that are part of our SPV company called B-O-A-B, BOAB, will be part of Aena Group before year end.
Thank you.
I don't think there are any other questions, so I think we can put an end to the results presentation. Thank you. Thank you very much to all of you, and it has been a pleasure having the discussion today with you. Thank you.