Ladies and gentlemen, thank you for standing by. I'm Constantinos, your call operator. Welcome, and thank you for joining the TAV Airports Investor Day live webcast to present and discuss the 2026 nine months financial results. All participants will be in listen-only mode, and the conference is being recorded. The presentation will be followed by a question and answer session. Should anyone need assistance during the conference call, you may signal an operator by pressing star and zero on your telephone. At this time, I would like to turn the conference over to Mr. Serkan Kaptan, CEO, and Mr. Karim Bensalem, CFO. Gentlemen, you may now proceed.
Good afternoon, everybody. I am not Serkan Kaptan. I am Franck Mereyde, the Executive Chairman of the Board of TAV. Thanks a lot to join us this afternoon. We will do a presentation with Karim Bensalem, who is our CFO. Just as introduction, the worldwide environment is not so easy. Despite this, you will see that in our nine-month results, we have still a solid growth, both for international and domestic. We will go in more details in the coming hour. I will start with operational performance, and Karim will continue with financial information.
Of course, we will take all your questions after that. Regarding the traffic, if you look at the traffic, all in all, we have, after nine months, 89.4 million passengers, which is a growth of 3%. We are making more revenue international.
International is also growing by 1%, and we reach 59.2 million passengers. Domestic has grown even stronger and reached 30 million passengers with 6% growth. If we look at what is supporting this growth in our network, we can see Ankara with strong growth, especially on international, thanks to AJet, an international connection, new routes opened by AJet in Ankara with 9% growth. We can see North Macedonia. North Macedonia, we have aircraft base, especially Wizz Air.
They are moving from A320- A321 Airbus, which increase the seat capacity, which increase and support the growth of the traffic, and we are reaching 29% growth. Georgia suffered in the first half of the year from Middle East situation and less passengers. But since in June, we had a very strong recovery, and when we look at the cumulative nine months, we are at +3%.
It means that we compensated the first part of the year and surpass. The fourth one is Almaty, which is growing strongly for international, especially with more traffic connected to China, Thailand, and Vietnam. Regarding domestic, it is still quite limited, mainly because of the Pratt & Whitney engines availability for the fleet based in Almaty. But all in all, traffic is growing strongly in Almaty, and especially, mainly on international. If we have a more detailed look at the split between Türkiye and out of Türkiye.
Out of Türkiye, we have a 5% growth with 33 million passengers. As I mentioned, for consolidated perimeter, Almaty, Georgia, and Macedonia are strong. We can notice also that Tunisia is coming back positive, and Medina, not consolidated, is also growing. Regarding Turkish market, Ankara, I already mentioned, is growing fast for international. All Turkish market is growing fast for domestic.
But if we look at international passengers, our touristic airport are more suffering. And we can see that Antalya is at -3%. The main impact in our analysis is the competitiveness of hotels and package offers compared to other countries, and especially the effect of difference between depreciation and inflation in Türkiye. Hotels reacted in summer, in July, by improving their price, dropping price, but it was quite late. That's why we are seeing this negative impact. I give voice to Karim to shift to financial topics.
Thank you, Franck, and hello to everyone. L et me start with the key numbers. O ur revenue for the first nine months of 2026 reached EUR 1,461 million, which is up 5% year-on-year, and which is mainly supported by BTA, food and beverage operations, Ankara, and a particularly strong third quarter from Havaş ground handling activity. EBITDA was EUR 502 million, up 7% year-on-year, with the EBITDA margin improving by 0.7 points to 34.3%. Coming more precisely to third quarter performance, I can also say that third quarter EBITDA growth was 11%, which is higher than the overall average growth throughout the first nine months of the year.
Also, even though it does not directly affect EBITDA on a large basis, I want to mention that duty-free spend per passenger on average rose 21% to EUR 10.0, mainly thanks to the new Antalya operations. If we look below EBITDA, net profit after minority interest more than doubled and reached EUR 173 million, which has to be compared with EUR 75 million last year. A ll in all, almost EUR 100 million more. Three items drove this improvement. First one is related to foreign exchange losses, which were much lower.
Second one is that we booked during the first nine months of 2026, net deferred tax gains. And third and final one is related to the losses from equity accounted investments, which were smaller than last year. O verall, these improvements mostly reflect lower Turkish lira depreciation and a stronger tenge, Kazakh tenge, Kazakh currency.
But it also has to be noted that the comparison basis compared to 2025 is favorable, since last year's nine-month results also included about EUR 103 million of non-cash one-offs. Speaking about cash, free cash flow increased 17% to EUR 214 million. This has been supported by higher operating cash flow, which is basically in direct connection with the above EBITDA items that I mentioned a few minutes ago. L et us now look at revenue performance in more details.
First of all, out of a total of EUR 1,461,000,000 of revenue, 58% of it is aeronautical related, 42% of it is non-aeronautical related, which is pretty much in line with last year when we discussed the same nine-month results in 2025. 45% of revenue comes from Türkiye, 55% comes out of Türkiye, which is actually slightly stronger tropism towards Türkiye compared to last year.
Getting into the granular analysis activity by activity, we can first say that aviation revenue grew 2%, mainly under the impulsion of Ankara and North Macedonia dynamic traffic. Ground handling growth was up 11%, related to Havaş. At Havaş, we offset the loss of Middle Eastern traffic related to the Middle Eastern crisis observed since March by signing new airlines like Wizz Air and Sky Airlines. Catering grew +19%, supported by the new Antalya operations at BTA, and area allocation, sublease and advertising grew 14%, largely for the same reason.
Duty-free revenue increased 11%, driven mainly by Ankara, and lounges grew 4% in connection with higher passenger volumes across most of the geographies where we are operating, mostly through TAV Operation Services. IT revenue declined, which was expected, as the Qatar project, which was major one, was completed in 2025.
All in all, this has been a strong top-line performance, and against this performance, we also maintain a clear focus on cost discipline. Let's have a look at OPEX. Overall, cash OPEX was EUR 959 million, up 4% versus 2025, which stands one point below revenue growth. The main part of the increase is related to personnel expenses, up 17% year-on-year. Because of a 5% rise in average headcount to support the growth in activity, as well as wage inflation that is fully connected to Turkish lira inflation, which was itself higher than the devaluation of TL against euro, our reporting currency.
Catering cost of goods sold explained another part of the cash OPEX increase, as they increased by EUR 13 million or 29% versus 2025, in connection with the ramp-up of activity in Antalya and the dynamic level of activity in Almaty.
Just coming back to personnel expenses, as a reminder, we applied a single salary increase in 2026, which has been consistent with government policy, and we expect to follow the same approach next year. More generally about cost discipline, I would like to highlight that in the third quarter, we improved efficiency by hiring fewer seasonal employees at airports like Antalya and Milas-Bodrum, where traffic was relatively weak, especially during the summer.
It is also worth mentioning that the cost of services rendered fell 5% following TAV Technologies completion of its Qatar project, which I just mentioned, and that fuel costs in Almaty were 10% lower. Finally, coming to the last line, non-cash OPEX.
Depreciation rose 12%, mainly due to the new Ankara concession, which began in May 2025, and also due to the impact of an overall increasing traffic on the amortization of the airport operation rights that we own. Moving on to the contribution breakdown by asset type and by geography. Basically, you can see on this page that airports contributed EUR 339 million of EBITDA, up 1% year-on-year, with Turkish airports growing 9%, while overseas airports have been down by 3%.
On the other side, our service companies delivered EUR 163 million, up 24%. On revenue, airport growth reached 5%, led by Ankara, Macedonia and Bodrum with respectively 22%, 15% and 17% growth. In services, BTA was up 18% and Havaş was up 6%. The main message and what you can see basically is that Ankara is performing very well, both operationally and financially.
The new concession terms, which includes a higher passenger fee structure and no guaranteed passenger mechanism, which applied in the previous concession, have significantly increased Ankara's revenue and EBITDA as a consequence. Looking ahead, the growth strategies of AJet and Pegasus at Ankara is expected to help sustain this momentum in the coming years. Few words about our debt structure and figures. Net debt at the end of September stood at EUR 1,649 million, down from EUR 1,833 million in June, mainly thanks to the lower level of debt at holding.
What I can say on top of this is that average maturity is now 5.5 years, smaller than it was last year. The average cost of debt is 6.3%, and 66% of our loans are fixed or swaps.
Another message I would like to share with you is that, concerning the old bond that we have, as you know, it matures in December 2028, and we are continuously evaluating our options on it. You may recall that there is a call premium that steps down after December 2026 and which we will factor into our evaluation. In any case, we remain committed to being an active participant in the international debt capital markets. This point on debt structure and figures concludes the financial review we wanted to share with you. I'm giving it back to Franck.
Thank you, Karim. I will continue with the CapEx. Regarding our CapEx plan, the two main projects are the Tbilisi in Georgia and Almaty. For Tbilisi, it is related also to the extension we get for the concession. We have currently EUR 140 million expense. Both works are in line. If I look Almaty's extension of the passenger capacity in the terminal, Almaty is improving the airport itself, including airside runways capacities to match with the strong growth we are enjoying for the last years and the strong growth we expect.
Staying on Almaty, it links also to a shift in our revenue structure with improvement of passenger fee in Almaty, which keep us in a competitive area, but we rebalance to have a passenger fee and aviation fees to compensate what we are doing for the airport itself, and we decrease our exposure on fuel.
Regarding the dividend, our policy is always the same, is to distribute 50% of our net profit in IFRS, except if we have new projects. As of today, we are in line with this. We have distributed TRY 1.3 billion for this year in two payments in June and September. It makes sense also for the company and the profile of the company, as soon as we are collecting more cash in the summer related to the seasonality. We are still fully on track to continue to generate in a very sustainable way this cash for the coming periods.
If I do a focus on BTA, Karim mentioned the growth of BTA. BTA ramp-up is strongly linked to Antalya operation through our branch for Antalya, BSA. We started in Antalya at the opening of new areas in spring 2025. We have in 2026 more a full year effect.
It means that we have this ramp-up for new areas, and we will still have some improvement in 2027 because BTA will took over the previous areas for existing previous buildings end of this year. If you look at spend per pax for F&B, thanks to this new areas, new design, more shops, much better, very good offer for passengers. We are also improving the SPP per passengers with 11% growth to reach EUR 2.1 per passenger. I continue with ATU.
The growth of ATU is also linked to Antalya growth, where we have actually started little bit later in 2025, at the end of summer. It meant the ramp-up is shifting a little bit in the time.
You can see the improvement this year compared to last year for the quarter, including a very good improvement on SPP, thanks to Antalya new areas, new shops, which bring us to EUR 10 average per passengers, which is a growth of 21%. For the quarter, we are reaching at ATU level, EUR 174.5 million. I will continue with the guidance. Guidance, we have updated our guidance in July after our half year result to take in consideration what is happening worldwide.
I tell you what was shown already previously. The traffic, we are keeping our guidance updated in July to be between 112 and 118 million passengers, including 72- 77 million passengers for international. We keep also our revenue guidance as it was updated, EUR 1.88 billion- EUR 1.98 billion. Regarding EBITDA, we stay also in this range, EUR 580 million- EUR 630 million.
The only update we have done is to decrease a little bit the CapEx expected for this year, and we are expecting to be below EUR 300 million, based on the two main projects in Georgia and in Kazakhstan. We are still on track to complete these significant works in 2027. In a nutshell, despite the worldwide environment price increase of fuel, geopolitical situation in different region, we are keeping growth in passengers, we are keeping growth in international passengers.
We are keeping our solid EBITDA and solid free cash flow generation to support dividend and/or new projects, and we are still a growing company. We have couple of projects in the pipeline. Some of them are moving very well, and it is also part of our DNA. With Karim, we are happy to take a question. Q&A.
Ladies and gentlemen, at this time we will begin the question and answer session, with questions submitted and received only in written format via the webcast main page. For your written questions, please visit the main page of the webcast link provided in your invitation. Thank you.
We are opening the Q&A session with a question from Ashish Khetan from Citi. Question being that service companies deliver 24% EBITDA growth versus only 1% growth in airport EBITDA. What has led to this increase, and is this gap likely to persist into 2027?
Well, thank you, Ashish, for the question. As you know, in recent years, the Almaty and Georgian airports are the largest contributors to our EBITDA.
But what happened this year, basically, is that, in Georgia, the Tbilisi and Batumi airports have been hit strongly by the Middle East crisis between March and June, and then recovery started after the region, let's say, normalized. Overall, Georgian airport EBITDA remains stable during the first nine months of 2026 compared to, let's say, more dynamic growth that you might have seen in recent years.
Almaty is another key EBITDA contributor year after year for TAV since its acquisition and closing in 2021. The airport this year, in recent months actually, has been shifting from a fuel-driven model to one built on aeronautical revenues. Jet fuel price volatility and the government's new incentive program at the airport has been causing margins to shift from quarter to quarter, which has been reflected in the nine-month results that you are seeing.
As we noted a couple of minutes ago during the webcast, we managed to raise the passenger tariff starting in the third quarter, in the month of August, and the benefit will show up, starting from the fourth quarter onward, which will offset the revenue impact of lower jet fuel sales volume and, marginally speaking, the volatility.
When it comes to the rest of our airport portfolio, EBITDA grew by only low single digits, except for Ankara and North Macedonia airports. But coming back to the second part of your question, asking whether this is likely to persist into 2027, under our current assumptions, we do not expect a similar gap to persist. I am hoping that these clarifications help. I have a second question from Ashish Khetan. Duty-free spend per passenger increased 21% to EUR 10, helped by new commercial areas in Antalya.
How much further upside remains as Antalya continues to ramp up?
As I said a few minutes ago, the increase in spend per passenger to EUR 10 was mainly driven by the new commercial areas, in Antalya, whose contribution is already largely reflected in this year's share sales per passenger, sorry.
When it comes to seeing whether there is still a big potential, we see EUR 10 as a plateau, and we expect SPP to remain broadly stable around this level over the next couple of years. In the next coming years, we expect additional duty-free revenue to come more from higher traffic rather than a further increase into SPP. Franck and I will address the last question of Ashish Khetan from Citi, related to the impact of Pratt & Whitney engine issues.
For Pratt & Whitney engine issues, regarding our TAV Airports network, we are sensitive to Turkish Airlines and Air Astana. What we expect is that it will come back gradually in the fleet in 2027, and most likely mainly in 2028. Our expectation of gradual growth and comeback, regarding this, we stayed conservative for 2027.
It means that if they come back faster, it will be an upside for us. At this stage, we expect this gradual comeback, and mainly in 2028, with good impact on frequencies and capacity. Most likely not new routes, but more seat capacity and more passengers. We have another question from Yapı Kredi, Görkem Göker. First question is related to our dividend policy and what we could expect as dividend for year 2026 to be paid in 2027. As I mentioned before, our policy is very stable.
Our policy is to distribute 50% our IFRS net income unless we have significant new opportunity to grow, but this is a policy for this 50%. When we look at where we are as of today and where we expect for year-end, we expect a strong increase on net income compared to last year, which means potentially strong improvement on dividend.
Of course, at the end of the day, the decision will be submitted and managed by the board of directors and the general assembly. When we look at the numbers, we expect a strong improvement in net income and dividend subject to new opportunities. I give back the floor to Karim.
Yes, and we have another question from Görkem Göker, asking if we can provide more color on where the current tariffs stand, how much room there is for further increases, and when we would expect full compensation for diminishing fuel sales. Let me take it back to when we started operating Almaty Airport in 2021. The international passenger tariff was only roughly $7.
After our more than $250 million investment in the new international terminal and still ongoing investments, mainly on the air side, we have increased tariffs gradually year by year through negotiations with airlines, and that's the normal course of business. Now the year-to-date average is now around $17 per international passenger, with the third quarter higher than this average following the additional increase we secured, as mentioned earlier.
With this increase, Almaty's tariff has almost reached the level of other airports in our portfolio industry standards. Asking whether there is room for further increases, it all depends, but we are in line with the standards, as I said, of the other airports in our portfolio, and we see limited room for further increases, generally speaking, but you never know. From the fourth quarter onwards, addressing the last part of your question about fuel sales, we expect the passenger-related revenue to increase while jet fuel revenue to continue to decline.
Basically, the model is that we expect the higher passenger tariff to compensate for lower fuel sales on a gradual basis over the next couple of months. This is the model that we are looking for, transitioning into an aeronautical revenue-driven airport.
Next question from online is from HSBC, from Cenk Orcan, related to our CapEx plan for 2026 and 2027. We updated in July our CapEx expectation for 2026 to EUR 300 million for 2026, based mainly on Almaty and Georgia TBS project. These projects are ongoing. We expect to complete them in 2027 with broadly the same level of CapEx, and this is for the current TAV portfolio with current maturity, except if there is new project which are not secured and not in the roadmap.
I will take, this is Karim speaking, another question from Cenk Orcan, asking that, given the high inflationary period in Türkiye in the last few years, do we see aero tariff adjustments by the DHMI sufficient to cover rising cost of services? Well, let me first put this question into the wider context of our revenue, because as I said during the webcast, 45% of our revenue is related to Türkiye, and 55% of our revenue is made out of Türkiye. Focusing on Türkiye, what I can say is that the state airports authority, DHMI, they revise aeronautical tariffs every year in line with inflation.
TL-denominated tariffs are adjusted by TL inflation, and euro-denominated tariffs are adjusted by euro inflation, apart from passenger fee tariffs, which are fixed when we start a concession, just like the one we started in Ankara, with domestic passenger fee being EUR 5 and international passenger fee.
Being EUR 17. But even if this portion is not subject to inflation-linked adjustments, again, you should note that passenger fee-related revenue represents only 14% of our total revenue, and that this, let's say, lack of flexibility is pretty limited. We think that our other revenue sources are pretty well positioned against cost inflation. If you look at catering and duty-free revenues, for instance, they are not regulated, and they can be adjusted in line with market conditions. Same for ground handling contracts.
They can be revised on a regular basis. O verall, we believe these mechanisms, they allow us to broadly offset rising service costs in Türkiye. We have another question from Ak Yatırım, Aytunç Uz, related to the article published in the Financial Times and related to sanctioned airlines.
First of all, it is very important to remind that as a global airport investor and operator, at airports, we attach the utmost importance to sanction compliance. We have a team to follow this. We are working with lawyers to follow this. We apply also rigorous monitoring across all the portfolio to check what could apply and what could be updated regarding our whole network. In this article, it was pointed Türkiye. I think it is good to remind what is our duty and what is our scope in Turkish airports like Antalya, Ankara, Izmir or Bodrum.
We are not, in this airport, the airport operator. We are the terminal operator. It is the country, the authorities, and we are not deciding who can land on the airport, who can use the runway, where the aircraft will go.
Authorities decide who can use the airport, decide and guide who will use the runway, who will arrive there and will use this airport. For our part, we have a contract to run the terminals in this airport through concession agreement under Turkish laws, and we follow very closely and strictly what is allowed and not allowed regarding sanction and regarding, of course, also Turkish regulation, in that we comply to both in our scope to Turkish regulation and to international sanction rules.
We are continuously following this and be sure that any update, we follow this, and we do all needed implementation to do what is minimum to be done according to our obligation following Turkish law and compliance with international regulations. Last question from Oyak Yatırım, Melis Pocan, regarding what is in our pipeline, our radar for new projects.
Currently, we are in the final stage to operate a new terminal 2 in Kuwait Airport, which is more than 700,000 sq m . It is like half of Istanbul Airport or CDG Airport, to give you the size of a building. It is a 10-year contract. We are currently two competitors in the race. We went through the second level of offers. We expect another round in the coming weeks. For this T2, we are in a good position, and we are bidding in a consortium with a partner. We are qualified.
This is more early stage, but still one step done. We are qualified for Hurghada Airport in Egypt. We are looking at touristic airport in Egypt. Hurghada, we are qualified, and we expect that Sharm El-Sheikh could come on the market. When it will come, we will show, of course, interest.
We are following Montenegro for the last more than eight years. They selected someone else more than one year ago, but it was Incheon. After more than one year of discussion, they decided not to commit what they are supposed to commit, and they ran away, meaning that now we are still in good position to take this opportunity in Montenegro in the coming month. One more question, sorry, is about Turkish tourism. How do we see the trend?
This year, as we mentioned, we have a question about competitiveness of Türkiye compared to other countries and looking at inflation and the difference between inflation and depreciation. Our assumption, one, is that hotel capacity, especially in Antalya, is huge, and this is a strong asset. Customer experience is very strong and a very good reputation also, between that the only sensitive price is price.
This is a sensitive topic. On longer run, we expect that this growth will come back for sure. The question will be for 2027, if tourist operators, especially hotels, are ready to shrink their margin for the coming summer, not to lose customers. What we can see is also that the difference between inflation and depreciation in Türkiye is narrowing year after year. There is a very consistent policy in Türkiye to fight against inflation, to decrease inflation, and to have the currency moving smoothly.
We expect that these two trends are going closer and closer, and in the coming two, three years, this gap should be fully filled. Before that, the gap should be very limited and manageable by operators. It means that we expect that this traffic and this growth will come back on Turkish market.
We have another question actually that popped up during the webcast from Nazli from Fitch Ratings, commenting about 2026 guidance. Thank you for your question, Nazli. Passenger expectations have been reduced while revenue guidance remains unchanged. Does it mean that you expect the shortfall to be offset by higher non-aeronautical revenue, for instance, services?
The answer is yes, and actually more than services. It relates to past figures because we revised this guidance in July already. It was related. The disconnection between traffic and revenue guidance is related to the fact that fuel activity has been dynamic during second quarter of 2026, in connection with the start of the crisis and the higher than expected, let's say, fuel sales price that we observed. I think that concludes our Q&A session, too.
Thank you all for joining us for our webcast, and we hope to see you at events or in Istanbul soon. Have a nice evening, everybody.
Have a very nice evening. Hope to see you soon face to face. Thank you.
Ladies and gentlemen, the conference is now concluded, and you may disconnect your telephone. Thank you for calling and have a pleasant evening.