Hello, and welcome to the Groupe ADP 2022 half-year results presentation. Please note this conference is being recorded, and for the duration of the call, your lines will be on listen-only. However, you will have the opportunity to ask questions at the end of the presentation. Questions will be taken only via telephone, and this can be done by pressing star one on your telephone keypad to register your question. I will hand over to your host, Monsieur Augustin de Romanet, Chairman and CEO of Groupe ADP, to begin today's conference. Thank you.
Good evening, everybody. Thank you for joining us to talk about our first half results. I am Augustin de Romanet, Chairman and CEO of the company, and I'm here with Edward Arkwright, Deputy CEO, and Philippe Pascal, our Group CFO. I will start with the highlights of this half year and Philippe Pascal will continue with the financial results. I will conclude with the outlook, and the three of us will be available to answer your questions. First slide, half-year 2022 highlights. Groupe ADP recorded a clear improvement of its performance during this semester. Our revenue doubled compared to the first half of 2021 to reach EUR 2 billion.
This is driven in particular by the rebound in traffic at Paris Aéroport, which reached 71.6% of the level of the same period in 2019. Traffic in our international assets also continues to be strong. Revenue growth has also benefited from the integration of Almaty Airport in Kazakhstan since May 2021, which had contributed only two months last year. Excluding Almaty, our revenue growth would be 92%. EBITDA reached EUR 702 million, which represents an EBITDA margin of 35% of our revenue, a level that is in line with the margin we delivered in the first half of 2019 up 19 points compared to last year. This reflects the fact that our cost base is largely fixed or linked to opening of infrastructures.
Operating income is back into positive territory to EUR 340 million, as well as net income to EUR 160 million. In a nutshell, a solid financial performance indeed. The acceleration of the traffic recovery ahead of our initial expectations on these solid results lead us to improve our EBITDA margin guidance for 2022 and 2023, and also to upgrade our deleveraging target this year. Let me first come back on the recovery in Paris. As I just remind, the first half was marked by a particularly strong rebound of the traffic in Paris. First, it was 61.4% of the level of 2019 in the first quarter and jumped back to 80.1% of the 2019 level in the second quarter.
After two years of restrictions, the need and desire to travel is extremely strong, and we expect a very solid summer. The traffic in Paris could, in certain weeks, get close or even exceed that of 2019. If I take the example of Orly, last week on Monday and Tuesday, traffic was well above 100% of the same day in 2019. The trends are very positive for certain destinations this summer, Southern Europe or France. All French people are going to Greece, but also Spain, Italy. United States and Canada have also very good scores. Clearly in this context and as always, our priority is to deliver the best level of service. Therefore, we made sure that we have taken all the necessary measures to reach this target.
That is why all our terminals in Paris are now open, except for Terminal 1 in CDG. As you know, this terminal will reopen around the end of the year, introducing the new Extime environment. Terminal 2A, 2C junction will close at the same time to implement new security standards in baggage handling system. In order to accompany the recovery of traffic, we launched in ADP a hiring plan for 600 positions in Paris over 2022 and 2023. We currently are on a good pace of 50 recruitments -60 recruitments each month, which means more than half of the positions have already been filled to date.
332 positions from the 1st of January filled as of June 30. We also opened social negotiations mid-June regarding remunerations in order to submit a rebound contract to the trade unions. Two agreements were signed on July 8th, which allow for the implementation of immediate measures to increase salary. The measures are twofold. First, a return to the 2019 salary level for employees affected by the employment contract adjustment plan, PACT, which was the nickname of the reduction of salary. Second, an additional general increase of 3% for all ADP S.A. employees. The impact of these measures in the second half of 2022 is estimated at EUR 13 million.
We consider that the conditions are now in place to welcome all our passengers in the best possible conditions during this summer period, thanks to the commitment of all of us. Moving to slide five. The commitment of our teams to improve the quality of service has been recognized, and Paris Charles de Gaulle was voted the best airport in Europe by passengers in the latest Skytrax rankings. Charles de Gaulle is now ranked 6th airport in the world, and Paris Orly moved up 27 places to the 46th rank worldwide. Also, three airports belonging to the group's international network also emerge among the world's top 100. I mean Delhi, which is up eight places, ranking in 37th position. Hyderabad is 63rd, up one place, and Medina in Saudi Arabia is 58th, up 10 places.
All these recognitions commit us to the future, in line with our 2025 Pioneers plan to keep Paris Charles de Gaulle in the world's top ten by 2025, and also getting four airports of our network in total of the top 50 and eight in the top 100. Now, about ESG strategy. This semester was also rich in ESG initiatives. As you may remember, our ESG strategy, 2025 Pioneers for Trust, lays on four pillars. First one, environmental issues. Group ADP is now formally committed to the SBTI. You know, this Science-Based Targets initiative define and validate our greenhouse gas emission reduction targets for both our internal emissions, Scope 1 and Scope 2, and our external emissions, Scope 3, with a near-term time horizon.
Our ambition is to be the pioneers in inventing the airport of tomorrow and be among the leader to the leader to drive the environmental transition of the aviation sector. Our collaboration with Air Liquide contributes to this objective, and we are working on the creation of an engineering joint venture dedicated to the integration of hydrogen in airport infrastructures. The second pillar of our ESG actions is our role vis-à-vis territories and regarding employment. In order to maintain passenger capacity at both Orly and CDG, and at the same time promote employment for local residents, Groupe ADP joined forces with public employment services, training organizations, temporary employment agencies, and airport companies to organize emergency recruitment and training referral events.
The provisional results of these events, which are excellent, show that the collective dynamic has allowed a high quality of sourcing and the conversion rate towards employment is very, very good. Third pillar, the social pillar. Regarding this social pillar, we signed beginning of June a profit-sharing agreement for the employees of ADP S.A. covering a three-year period from 2022 to 2024. This agreement materializes our will to involve employees in achieving the company's strategic and transformation objectives and allow them to benefit directly and financially from the results obtained.
The payment of the profit-sharing bonus is conditional on the achievement of five objectives linked to our roadmap 2025 Pioneers, including three ESG objectives, which are first the reduction of CO2 emissions, the number of days of civic engagement carried out by employees, and third the rate of completion of ethics and compliance training by employees. First pillar of our ESG program, governance. We formalized this semester our ESG commitment with the 2025 Pioneers For Trust roadmap, unveiled to the public on 29th of March. Next slide presents a new step in our hospitality strategy. For sure, before giving the floor to Philippe Pascal, I'm very happy to come back on the progress of our new commercial strategy. As you know, as part of 2025 Pioneers, we will be deploying our retail and airport hospitality expertise under a single brand called Extime.
Extime capitalizes on all the know-how deployed for several years in the Paris hubs and in the group. With Extime, we regroup this expertise in a single brand and we make it an instrument of international conquest within and outside the Groupe ADP's airports. The preferred deployment model is the model of franchise with a franchisor, Aéroports de Paris, providing the Extime franchise and its know-how to franchisees. Along with the implementation of this new brand, we are optimizing our business model. From the traditional model of a current concession, we are moving to a hybrid model in which ADP is strengthening its role in operations. This model allows our partner to focus on the upstream operational functions.
I mean logistics, IT purchasing center, and ADP has a greater role on downstream operations, allowing to create more synergies between the value certified operators, drive sales up, and reduce costs. An important step was achieved this month with the result of two public consultations. First one, concerning our duty-free and retail activities for Paris Charles de Gaulle and Paris Orly airports, we have a result which is that Lagardère Travel Retail was chosen to become the co-shareholder of Extime Duty Free. First Extime certified operator, I mean Extime Duty Free Paris. The new JV will operate around 1,040 beauty, gourmet, technical, and fashion outlets. It will be owned by 51% by the ADP Group and 49% by Lagardère Travel Retail.
Second, we just announced today that JCDecaux will become ADP's partner in the future joint venture, Extime Media, which will operate the advertising activities at our three Parisian airports, as well as in the second phase of the airports of Antalya and Milas-Bodrum in Turkey. I don't know if I must say Turkey or Turkey, you know, because President Erdogan is not happy that the name of Turkey is similar to a kind of poultry. Understand what you prefer. Extime Media will therefore have a multi-local dimension with a presence in six airports on two continents. With that, I will now hand over to CFO Philippe Pascal, who will comment in detail our H1 results. Philippe, you have the floor.
Thank you, Augustin, and good evening, ladies and gentlemen. Slide nine was the traffic recovery. We can see that traffic recovery has been strong this semester, both at the group level but also in Paris, with an acceleration in the second quarter. This is particularly true for Paris, where the recovery against 2019 is now close to that recorded in international. You can see on the graph on the left, the rebounds compared to the H1 2021 to 37.5 million passengers with this semester versus 10.7 million passengers last year, reaching 71.6% of the level of traffic in 2019. All in all, we expect traffic in Paris to reach this year 72%-82% of 2019 level.
This is an upgrade of 7 points compared to our previous assumption for 2022. For our foreign airports, the recovery is still slightly ahead of what's recorded in Paris, reaching 72% of the 2019 level. At group level, traffic stands at 71.9% of the 2019 level, with 118 million passengers in this first half year. Given the solid trends recorded, we also lifted our 2022 traffic assumption at group level to 74%-84% of 2019 level. It's an upgrade of 4 points, reflecting the acceleration in traffic recovery. Good news for both Paris Aéroport, but also our foreign airports for the global group.
Slide 10, we have a specific focus about Paris performance in terms of traffic with four main points. First, the traffic with European destination is recovering faster. It is 74.4% of the traffic of 2019. The second point, it's about the international traffic, which is the most contributive for regulated but also non-regulated revenue, as you know. This international traffic is recovering very good. It represents 38.6% of the half 2022 traffic. The third point is the expectation for the traffic in Asia. As you can see, traffic with Asia is still weak, representing 22.3% of the level of H1 in 2019.
The fourth point, it's the low-cost traffic with a strong performance and a good recovery compared to the pre-COVID situation. With this in mind, we can appreciate the strong performance of our retail activities in Paris. As I said, we have a very low traffic from Asia with a 22.3% recovery, and we can see that has no impact in our retail performance. The sales per pax reached EUR 25.4 in the H1 compared to EUR 22.5 in 2019. This is reflecting the strong performance of our retail business in our airport, and we can see that the traffic of Asia, the weak traffic of Asia is, for the moment, not a downside for the next year.
Moving to slide 11, we can see the performance of TAV in terms of traffic. At the end of June, we can see that TAV Airport traffic is standing at 72.8% compared to 2019. The dynamic in touristic airports has remained solid. Antalya traffic reached 76% in terms of recovery. Milas-Bodrum 84.6%. This is notably due to a particularly strong traffic coming from Germany and U.K. As you can see, the U.K. traffic was up 41% compared to 2019, and the traffic with Germany up 6.2% compared to three years ago. A good performance, and we can see that it's a partial compensation of the erosion of Russian traffic.
A good resilient traffic in TAV included for the touristic airport, included with the Ukraine crisis. We can also see that Almaty has a good performance. It's the best performance in terms of recovery for the group. Passenger traffic was 9% above 2019 level and cargo flights doubled compared to 2019. This is mainly due to the fact that the Russian airspace overflight ban, the flights avoiding the Russian airspace and stopping in Almaty. Slide 12, you can see a specific focus about inflation. As you know, in the difficult context of macroeconomic situation, of geopolitical events, we wanted to provide some color about the potential impacts of this contractual evolution on our financial presentation. In terms of revenue first, we have the possibility to increase regulated tariff in Paris, but with a timeline.
Historically, aeronautical fees for ADP in Paris involve with the CPI. This is updated annually. For our Turkish subsidiaries, TAV, most revenue are indexed to inflation. For Airport International Group, airport fees partially adjustable to inflation, while retail and rental revenues are indexed to inflation. In terms of cost, after the revenue, we can see for the cost for ADP, we expected modest impact of inflation on our OpEx base in the next 18 months, given the structure of our portfolio of purchasing contracts, which is quite protective. For example, around 9%-15% of our contracts for external services are with fixed price and around 70% have clauses with annual tariff increase, but are uncorrelated with inflation. Overall, our policy is to negotiate long-term contract and their duration is four years on average.
Because of this, about 40% of contracts with suppliers must be renewed in January 2024. Therefore, we expected the effect of inflation to be modest in 2022 and 2023, but fully felt in 2024. For energy, we are well protected until the end of 2023, thanks to fixed price contracts. Beyond these dates, and depending on the evolution of market price, we will implement a purchasing strategy limited as much as possible potential upward impact. Finally, in terms of CapEx, the main impacts to be noted is the increase in the cost of material and construction costs. The sensitivity is notable for materials such as steel, wood, and cement. At this stage, the review of our project portfolio shows that the effect of inflation on our CapEx program in Paris remain limited in 2022 and 2023, and our view on our investment trajectory remain unchanged.
Even if at this stage, we don't expect any negative impact on our guidance, we are working on the monitoring of our CapEx plan and decision process in order to increase flexibility and mitigate the potential risk incurred in choosing a good material, construction to avoid this risk. Slide 13, we can see the key figures, but I think we can go directly to Slide 14. In terms of revenue, as Augustin said, we recorded EUR 2 billion in the first half 2022, more than double the first half of 2021. Within the EUR 1 billion revenue growth, we have EUR 122 million growth linked to the integration of Almaty. It contributed only two months last year versus the full semester this year. Excluding Almaty, revenue growth would have been 92%.
This solid revenue growth has been driven by the recovery of traffic, obviously in Paris, but also in TAV, with a specific contribution with Almaty, as I said. Slide 15. We can see the strong increase in EBITDA. We are posting a strong EBITDA at EUR 704 million. The increase in EBITDA is driven by the traffic impacting positively our revenue. Also we have a good cost control, our cost being largely fixed, linked to open infrastructure, but our cost base is less sensitive to traffic itself. Concession expenses are up EUR 170 million, including EUR 65 million related to the integration of Almaty, as well as EUR 73 million related to SDA and Relay in Paris, with higher cost of goods in line with higher revenues.
Staff expenses are up EUR 40 million, including EUR 34 million at TAV Airports related to the integration of Almaty and the increase of salaries. With less recourse to partial activities in, obviously excluding TAV, the group staff expenses are only up by 2%. We can see a good cost control in ADP mother company and for TAV, the impact of the inflation in Turkey. This EBITDA reaches 35% of revenue in line with the pre-crisis EBITDA margin on first half of 2019. Slide 16, we can see the return and the good recovery in terms of a positive net result.
Amortization and impairment are quite stable, while profit from associate and JV is up for EUR 59 million, mainly due to accounting changes, as well as to the increase in the result of equity accounting subsidiaries. Financial result is down EUR 100 million with the negative impact of the debt restructuring of TAV Tunisia in the first half of 2021 for EUR 110 million. We also recorded a tax expense of EUR 59 million due to the return of a positive net impact. Overall, Groupe ADP recorded-
Net income.
Its net income. Yes. Thank you. Overall, Groupe ADP recorded its first return to profitability since 2019 with a net result of EUR 160 million. That is a good performance. Slide 17. The net debt of the group stands at around EUR 8.3 billion at the end of June, up by EUR 282 million compared to the beginning of the year. This increase is mainly linked to the financing of new Antalya concession for EUR 375 million by TAV Airports during the first half. When excluded this financing, the net debt of the group is quite stable over the first half. At the end of the day, thanks to the strong recovery in EBITDA, we can improve our 2022 guidance for net debt, now expected between 5.5x and 6.5x the EBITDA.
Slide 18. We have a specific point for regulation. We are currently involved in two separate processes. The first process is the elaboration of our tariff proposal for 2023. We start the consultation with all the airlines for first meeting in June and the second meeting in July. Discussion involving the airport users will continue in September. As always, ADP will file its tariff proposal by fall 2022, and the French regulator will make its decision public by the beginning of 2023. Please remember that in the case of two refusals by the French regulator, our proposal, the airport fees will be frozen for one year. The second process is the review of cost allocation key, the cost allocation system. Following the decision of the regulator in April, we start our discussion with the airlines regarding the cost allocation key in May.
This fall followed by working group in June and July to set the method and the timing and start the allocation key review. Such meeting will be held regularly during the coming years as long as the review process is ongoing. It's a long process and we are very comfortable with this new method with the airlines and we start a good discussion. I will hand over to the Chairman and CEO, Augustin de Romanet, for comments on the outlook of the group and closing remarks. Thank you.
Thank you, Philippe. Very short conclusion to tell you that our traffic grew strongly in Q2 and we expect this dynamic to continue in the coming months. This has led us to revise upward our 2022 traffic assumptions. We are now expecting traffic in Paris between 72%-82% of the 2019 traffic. At group level, we expect to see traffic reaching 74%-84% of this level of 2019. This acceleration of the recovery of traffic in 2022 leads, and also in the light of our solid H1 results, leads us to upgrade our EBITDA margin guidance in the short term. We now expect between 32% and 37% of revenue for 2022 and for 2023 as well.
This acceleration at EBITDA level is supportive to our deleveraging, and we therefore expect, as Philippe has just said, our net debt to EBITDA ratio to stand between 5.5x and 6.5 x as at end of 2022. It's an improvement of one EBITDA step. All our other assumptions and objectives of the 2022/2025 financial roadmap remain unchanged. Now I think it's time to open the line for the questions and together with all the people in the room, and especially Edward Arkwright, Philippe Pascal, but perhaps also Christelle de Robillard, if she wants to speak, we are at your disposal to answer the questions. Lola?
As a reminder, if you would like to ask a question or make a contribution, please press star one on your telephone keypad. The first question comes from the line of Cristian Nedelcu from UBS. Please go ahead.
Thank you very much. Hi, thank you very much for allowing me to ask the questions. The first one, could you talk a bit about the building blocks of your higher EBITDA margin guidance for this year, next year? How much of that is coming from international? How much of that is coming from Paris operation? Secondly, looking at the tariff for 2023 in Paris, do you believe you can pass through the 5% or whatever the French inflation level will be next year? Is this your target in that proposal? Can you do more than that? The last one, looking at the retail business in France, we are seeing a lot of luxury companies lifting their prices by 10% or more.
Do you believe your sales per passenger in the second half of the year will start illustrating the fact that more and more of the retailers are lifting prices to pass through inflation? Do you expect to see a meaningful increase in sales per passenger versus what you delivered in the first half? Thank you.
Thank you for this first question. Perhaps to start with EBITDA. In fact, we increased our guidance for EBITDA margin globally for the group. We can see that the main effect is linked by the traffic in Paris, but also in JV. As you can see, we have with this dynamic in terms of traffic a good impact in terms of regulated revenue, but also non-regulated revenue. Globally, the contribution of the increase in terms of EBITDA is aligned with the contribution of traffic.
In terms of margin, we can see that it's more difficult to disclose some elements due to the fact that we have fixed costs, but we have also a step in terms of recovery due to the reopening of infrastructure due to the salaries. When you see our figures, we can see that globally in Paris, we have a cost control, but the fact we have a fixed OpEx despite the reopening. In JV, we have more OpEx due to the inflation with salaries, but also with some materials and goods for the retail. Globally, we can see with the dynamic of traffic and with the dynamic of cost, what is the contribution for 2022 and 2023 in terms of margin.
Your second question, it's about the tariff in Paris, and the question to our target to increase this tariff. The main question for us, it's not exactly this question. The question is the dynamics in terms of regulated revenue due to the fact that you have more traffic with a good recovery in terms of margin, first. The second point, it's the question of the level of our cap. As you know, we have three caps. The first cap, it's the level of regulated work. For the moment, you know that we have some difference between the methodology of the French regulator and the methodology of ADP. The second cap is the moderated way to increase the tariff. We can increase, but with moderation.
The third cap, it's the question of balance between the regulated costs and the regulated fees. It's possible to increase if the regulated costs are less than the regulated fees. All in all, we can adjust and take into account the inflation if the regulated revenue for 2023 is less than the regulated cap. Because if we have a strong recovery in profitability, we reach the cap. If we have a good model and a very resilient model, we can see that perhaps what is the main target for ADP. Your third question, it's a question of retail and luxury. That is a key point for us.
It's the fact that, first of all, we have a good dynamic in terms of SPP due to our retail performance with a good model with fashion especially. We have also, for the moment, we don't see any impact in terms of inflation with the power to buy for our passenger. Clearly, we have a specific atmosphere and the specific way. For the luxury policy, we don't see for the moment an impact. Yes. That is good.
Okay. Thank you very much. The next question comes from the line of Elodie Rall of JPMorgan. Please go ahead.
Oh, hi. Good evening. Thanks for taking my question, sir. Just to come back on tariffs, I understand the math, and thanks for explaining. Just if we take a step back, you told us earlier this year that you wanted to keep the tariff increase under control, I think, for the next year or so or two years ahead of negotiating maybe the ERA 4. What kind of level are we thinking, like ballpark? Is it still like low single digits, or would that go higher given the increased inflation? That's my first question. My second question is on OpEx. Should we expect? I mean, you've increased your guidance on margin, so I guess that answers my question.
I was just surprised about that margin guidance increase given the need to rehire staff, as you mentioned, to face traffic recovery.
My last question is on the Schiphol stake and the unwind of the participation between Schiphol and ADP. Is there any news? I mean, you need to complete that, I think by November. Is there any news on that? Thanks.
Perhaps we will begin with Schiphol because Edward Arkwright has been recently member of the supervisory board, so he's especially qualified to tell you two things because we are in discussion. At the end of the day, we are in discussion with Schiphol, but very few things can be disclosed because the discussion is ongoing. I give the floor to Edward Arkwright, allowing him to be quite silent if he has no other possibility. Edward?
Good evening, Elodie, and good evening, everyone. Given the ongoing discussions, very difficult to make any precise answer. I just want to repeat that we are in ongoing discussions. There is a process which has been published and described to everyone, so nothing new. The discussions are continuing.
In a good spirit.
As usual.
With just Schiphol, it's always good spirit. The question about the need for new persons, which will diminish our margin. I don't think we will have a shock about that because our plan is for ADP to hire 600 persons. On the guidances we gave, taking into consideration the assumption that we recruit all these persons. You don't have to expect any deterioration of your margin with this full completion of hiring progress. The third question.
It's about the tariff.
Philippe?
About the tariff. To be clear, first we have to check what is our expectation in terms of regulated ROCE. Second, we have to model the regulated WACC for us, which is the two-step. The third step, we have to take into account the inflation. As you know, the definition of inflation for the regulation, it's not the full year inflation. It's another figure with a specific calculation from August to August. It's not really the same figure as we have in mind.
After that, we try to find a good balance, and we try to manage the recovery of our regulated ROCE to reach the cap in a secure manner to obtain a good approval for the French regulator. When we reach the cap, mechanically, it's not possible to increase the tariff. Globally, the inflation, we have a modest impact in our cost, as I said, in Paris. We have a slight impact in terms of inflation for the calculation of WACC. But it's very slight because we have a specific methodology.
All in all, we don't give, for the moment, our strategy in this conference call.
Okay, thanks.
The next question comes from the line of Andrew Lobbenberg from HSBC. Please go ahead.
Oh, hi there. Sorry, it's a bit repetitive. I'm just curious on Schiphol. Recently there've been dramatic and surprising moves by the Dutch government to reduce the capacity of Schiphol. I mean, surely doesn't that factor into the value of the business? Is that being taken into account with the people doing the work to value the business? On regulation, you spoke of, I think, there being a disagreement between yourselves and the regulator about how to calculate WACC. Just wondered if you could give us a little bit of color as to where the disagreement is and perhaps the scale of the gaps, what your numbers are and what their numbers are for WACC. Then a third question would be just around the strikes that you suffered.
Are there any economic consequences on your P&L beyond, you know, losing some traffic? Are you vulnerable for compensation from airline customers? Are there any other adverse consequences? Thanks.
I will take the third question. About the consequences of the strike, they are very tiny. As you know, we increased salaries, but anyway, we should have increased salaries without any strike, so it doesn't have a lot of impact. Perhaps we should have discussions with our customers, but it is not material for 2022 at all. That is the third question. About the two first quarters of the year. Your question, Philippe.
As you know, the Dutch government decided to limit flights from Schiphol to 11% below 19 level for environmental reason. In the short term, this decision could be potential upside for Paris Aéroport, as it may reinforce the positioning of CDG as a European hub. In the longer term, we are convinced that commercial aviation can have its place in a low carbon world. To do so, our infrastructure must transform to offer a diversified range of products and services adapted to the environmental context and to the behavior of travelers throughout the world. This is exactly what we are doing with our strategic roadmap, that is called 2025 Pioneers.
We try to adapt our infrastructure to avoid this kind of limit and to make the proof that it's possible to develop the aviation activities in a good manner and to have a place in the low-carbon world. Your last question, it's about the WACC. You know that we don't have the same calculation. The French regulator is looking at the past five years to determine the risk-free rate versus our methodology when we take into account 10 years for the risk-free rate. We have also impact in terms of the interest rate and the remuneration of our cash. That is the second huge pillar in terms of methodology.
For the moment, we don't have this kind of debate because our regulated ROCE is lower than the regulated WACC in the French regulator definition and obviously in the ADP definition. When we reach the gap, we have a specific view about the calculation of IFP, but for the moment it's not the case.
Can you offer any color as to how big the gap is on your WACC and their WACC?
No. For the moment, when you see in the French regulator decision, we can see a range between 2.6% and 5.2%, but this decision is decision of last year, before the impact of the huge impact of crisis. In our methodology, the level of WACC last year was 6.3%. We have a gap around 1.1 points. Remember that we don't have the same methodology and mechanically for the moment, we have to wait for the new decision of the French regulator.
The new chairman, because as you know, the chairman of the French regulator, whose name was Bernard Roman, finishes his mandate the 4th of August, and the government has to appoint a new chairman.
And the-
We just conducted the searches to have a good new chairman.
Very good. Thank you.
The next question comes from Stéphanie D'Ath of Bank of America. Please go ahead.
Hi. Thank you very much for answering my three questions. The first one is on your guidance of EUR 16-EUR 18 operating expense per passenger in 2024-2025. When you made that guidance in February this year, it was before the inflationary hikes. I was just curious to understand how comfortable you are to maintain this guidance and if you had already factored in inflation hikes back then. My second question is regarding your traffic guidance, which you expect to return to 2019 levels between 2023-2024. Could you please let us know what needs to happen for it to be 2023?
I guess you assume China to reopen and what your domestic assumptions are, would you expect them to be ahead of 2019 and of course maybe some of the international traffic not back yet? Finally on your Extime partnership, could you maybe explain what that 49% stake means in terms of, are they going to make a payment to get that stake? Should we expect a cash inflow early 2023? In terms of when exactly will it be rolled out for the consumer? When will the consumer be able to shop on your Extime website to collect at the airport and when is the kind of personal shopper service going to be rolled out? Thank you so much.
Thank you for this third question. Your first question about the guidance in terms of OpEx per pax, we can confirm our guidance. We are confident with this guidance despite the evolution in some part of our cost. But all in all, it's manageable, and we can confirm. The second question about the traffic. Obviously we expect a good recovery in terms of Asia traffic in 2023. We can confirm our assumption in terms of recovery for 2023, for 2024 and 2025 at the same level than before.
This is the fact and this recovery is linked by the reopening of destinations due to the acceleration of the demand and due to the capacity for the airlines to operate. For your third question, I am very sorry, but it's difficult to disclose for us more color. But it's key that ADP is strengthening its role in downstream operation with our partner focusing on the upstream operational function, logistics, IT, purchasing organization.
Looking at operation of the shop floor, Extime Duty Free Paris will work in synergy with all the other Extime certified operator, so like Extime Media, Extime Food & Beverage Paris, and all in all, under the global supervision of Extime Parisian management. That is the EDP staff. Extime Duty Free Paris will become franchisees of Extime, that is, ADP mother company. As part of the franchise agreement, benefit from a digital ecosystem that is Extime Rewards, and a specific brand book. We expect synergies, obviously, with the link between all this strategy and the link between the operators. Strategy like common clienteling and VIP service, synergies like Extime Media will be the advertising agency for Extime Duty Free Paris for all the advertising device inside the Extime Duty Free Paris.
So globally, the Extime will mostly start its operations at Paris on January 2023, apart from the terminal one, which will start its operation next December 2022 when the terminal reopens. In this new terminal one, will be the first Extime boutique terminal going live. That is a huge step for the Extime strategy. The impact of Extime is expected to materialize progressively in our accounts with an increase of SSP. All in all, we consolidate all this franchise effect. This will have no apparent financial impact. The revenue at the franchisor level being operating expenses at the franchisor level.
For unconsolidated operators, such as unconsolidated airports of the group or airports outside the group, the franchise fee will create additional revenue. It's just in this case that we have additional revenues. In the other case, we have synergies.
Next question comes from the line of Dario Maglione of BNP Paribas. Please go ahead.
Hi, good afternoon and, congratulations for the strong results. I wanted to follow up on the Extime JV. So, basically the JV will continue to pay rent to, Groupe ADP. Will the rent increase or decrease compared to the existing arrangement? Second question on, the inflation on the commercial side. Have stores in the airport already started rising prices and by how much? Maybe if you can comment on June and July. Final question in terms of the OpEx. What's the run rate for cost in June compared to 2019 levels? Are you seeing costs going up or flat, especially, I'm talking about Paris? Thank you.
Thank you for this question. Can you repeat the second question now?
Yes. Whether the prices in stores in Paris are already higher because of inflation and by how much compared maybe to, let's say, start of the year?
Thank you. To start for the second question, as you know, retail activities are non-regulated, meaning that we can adjust our prices freely to pass on inflation or costs of goods to customers. For example, we aim at remaining competitive against downtown Paris, where we monitor retail prices closely. Should we increase prices, this will be in line with the market practice downtown Paris. Clearly, we try to adapt our strategy in terms of price compared to our main competitor. In terms of fees, we can see that for the retail. Now we can see that we expect stable fees globally.
We can see that with fees, it's for us it's very good news because after the crisis, with a huge impact in our retail activities, the fact that we can confirm the performance of the retail model, the fact that we can fidelize all our brands, we can maintain our rent in a good way and in the same level compared to the pre-crisis situation. Your last question in terms of cost. In fact, costs globally are fixed, but we expect to reopen the terminal one with a huge number of square meters. That is the driver of our cost in Paris.
All in all, when you see, we can accompany the recovery of traffic without a huge step. We accompany with OpEx, and we try to preserve our margin at the globally. For that, when you open the terminal 1 in December, we try in January 2023 to close the terminal 2A and 2C. We try to balance our situation, to manage our margin. The reason why we can confirm our margin, and we can change our margin for 2022 and 2023.
Okay. Very clear. Thank you.
The next question comes from the line of Manik Subash of Citigroup. Please go ahead.
On the good set of results. I have three questions, if I may. Could you remind us on the latest evolution on the winter capacity schedule from airlines? Because we have heard airlines saying they might scale back capacity, this winter. What are you hearing from, say, Air France and, like, other carriers? Second question, like, you had disclosed that, because of the hyperinflation in Turkey, you had a positive EUR 6 million impact on the net income level. What was the impact at the EBITDA level? Coming back to traffic, despite increasing your traffic guidance prior to the results, like, why have you not increased your guidance for, like, let's say, 2023? You've still confirmed your previous guidance. Don't you think that the recovery could be much sooner than what you have expected?
Last is on, like, what is the currency impact on your, let's say, revenues or, like, net income because of the appreciation of the U.S. dollar? Thanks.
Thank you for this question. Your first question about the winter season and the airlines. For the moment, it's a little bit early to give you some color about that. As you know, we have changed our guidance and assumption in terms of traffic from 2022. We are confident to preserve a good dynamic in terms of traffic. We have also, and you know, historically, we are cautious because we don't know exactly what is the macroeconomic situation in the end of this year and the consequences in terms of traffic.
At this stage, it's too early to take into account the potential impact, negative or positive impact for the macroeconomic environment and the demand. We don't have clear vision about the program of the airline, but we remain prudent, very cautious, but we are also confident enough to increase our guidance. In terms of traffic guidance, it's your third question. As you know, we expected a significant step between 2022 and 2023 when you see our former guidance. Given the acceleration in 2022, the evolution in 2023 will be less of a big step. It's a question of a range between 2022, 2023, and 2024.
We have an acceleration now, but at the end of the day, it's not an acceleration for all the year. We have a step. Probably we are in the high part of the range, and now we change our guidance to have guidance more realistic, higher than the previous guidance. It's not a key point to change the full year effect. In terms of inflation, so it's difficult to take into account the inflation in TAV for the momentum. With this, it requires that we try to manage this situation given the cumulative inflation in Turkey. We have a hyperinflation accounting work to do.
In line with specific rules in terms of accounting. For TAV and for the group, the impact is globally limited for the moment. The non-monetary asset restatement and the hyperinflation accounting had a positive impact in our view for the moment. For the moment. Thank you.
Yep. There are no more questions on the line. I'll hand over to your host.
Dear friends, it's getting late. We are all in an extremely busy period for you for always all these result publications at the same time. Thank you to everyone for having logged to our conference. ADP's next financial communication event will be the release of our nine-month revenue on October twenty-eighth. In the meantime, we are planning some roadshows starting in September, and we will be attending various thematic conferences to meet you, and we are looking forward to that. Feel free as well to get in touch with our investor relations team should you have any further question. Enjoy the rest of your day, the rest of your busy week, and I wish you a beautiful summer. If you go in Greece, be aware you will have a lot of French people. Have a good night. Thank you.
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