Ladies and gentlemen, welcome to the conference call on the financial results of the first half year 2026/2027. I am Sergen, the Chorus Call operator. I would like to remind you that all participants will be in listen-only mode, and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions. If you would like to ask a question from the webinar, you may click the Q&A button on the left side of your screen and then click the raise your hand button. If you are connected via phone, please press star followed by one on your telephone keypad. For operator assistance, please press operator assistance button on the bottom left side on your screen or star 0 on your telephone. At this time, it is my pleasure to hand over to Attila Doğudan, CEO. Please go ahead, sir.
Thank you very much. Ladies and gentlemen, good afternoon to Europe, to Turkey, Middle East, and good morning to the U.S. This is Attila Doğudan, the whole team. We are surprisingly today all in Vienna together with both Johannes and Bettina, Atilla Tuna, and myself. We are very happy to present our half-year results of the business year 26/27. We are even more happy to present the best-ever half year in our company history. Again, and as always, this is an incredible team effort, and it is always important to say a big thank you to all the team members all over the world. We are super proud of them. Every single person is contributing something to the DO & CO family and to the success.
Over many quarters, you have seen a lot. You can see that our long-term strategy focusing on margin improvements works very well, and even more important, our positioning of becoming a global premium brand is doing very good progress. It might be boring to you sometimes the same from us, but I think it is very important to understand the case and why we are doing better than the others in our peer groups and why our business case is more sustainable. First of all, we know what we stand for. We have a clear long-term strategy, means we really believe, and this is something which is driving the business incredibly, is innovation. There is no compromise on the quality and choose incredible people, train them with the right mindset. The recipe sounds easy, but it is not easy to replicate, as you see on the market.
We believe that company culture and mindset is an intangible asset, is an incredible asset of DO & CO and the way how we work. The second one is the mix of entrepreneurship and quick decision-making, meaning the mix of entrepreneurship with corporate governance, which obviously is, in our case, more entrepreneurship giving us the speed to be quicker than anyone else and to see maybe opportunities more or quicker than anyone else. End of the day, do not forget, we are a very complex and difficult product, which is, end of the day, a luxury product. Furthermore, another mix of business is the way how we operate, having restaurant and luxury coffee shops and lounges and boutique hotel on one end, which means individual B2C business is completely different to Airline Catering with 10,000 or even 100,000 of meals every day with a big logistical background.
Finally, the event catering is a mix of both of that. Very important, this is what we always have focused, is a solid financial background, means having no debt, means to have all the power to grow now and invest in future growth in a smart way, to be able to invest in education, which, end of the day, is a key driver of the individual performance of every single DO & CO member.
DO & CO, I think we mentioned last time briefly, DO & CO and the hotel school in Lausanne, we will have a joint education program, which is then coming in the DO & CO Academy, which is located in Vienna, London, New York, and Istanbul, which finally means one of the best educations in this industry for all areas, which then might follow in more and better applications of anyone who wanted to work in hospitality. I think we are one of the number one addresses, which then, again, is the driver of future business. As you know, we do not luckily suffer from demand. The problem is, can we deliver the high expectations on a global scale, yes or no?
Last but not least, to improve ourselves in all the areas we had not done so well, in our mind at least, in the past, like in internal organizations, in procurement, in IT, and these kind of things. Now we have the power, the money, the time to focus on that, to do all these areas better. I think the program in the next 12 to 18 months, which we have internally, will end up in a further improvement of our margins. We believe, bottom line, this is a great business case, and I hope you all agree to the strategy as we believe that the approach on a future-oriented growth. A well-planned growth with solid margins and increasing margins, as we always have mentioned and wanted to achieve.
I think you see that we can achieve, and step by step, we go to the next level. Means that the case works very well. Let's go quickly maybe through the presentation, which you have in front of you, I guess, as a result of the first six months. The best revenues ever with EUR 1.340 billion means an increase of 8%. At constant currencies, even 13%. EBITDA of EUR 166.8 million means an increase of 11%. EBIT of EUR 120 million is a 13% increase. More important, and what makes us really happy, is the margin, the EBIT margin of 9%, which we first time now have achieved. The net result of EUR 66.7 million means even 25% increase, with a net result margin first time of 5%. On the next page, you see the historical comparison of the margins, where we come from and where we are.
Only 10 years ago, we had kind of different numbers. If you look on where we come from in terms of net result and EBIT, I think we are together with the growth of the company, not diluting margins is one of the key elements. On the next page, you see the three segments, the three divisions. The EUR 1 billion 38 million of revenues in Airline Catering means 6% + EBITDA EUR 125 million and EBIT EUR 88 million. International Event Catering, EUR 206 million, even 25% increase in EBITDA, 32% increase, meaning EUR 27 million. In EBIT, it means even 38% increase, which cannot obviously happen every quarter, every half year, but this time it worked very well. Restaurant lounges, EUR 96 million with 7% and 5% and 9% increase in EBITDA and EBIT numbers. I think to mention additionally, the free cash flow of EUR 117 million is a good number.
Net debt to EBITDA of - 0.17 is the number I like most, to be honest, because it gives us the freedom to invest, as I've mentioned earlier. The equity ratio of 43%, I think, is more than healthy. In terms of three divisions, we had numerous tenders which we won. We expand, and we see that the demand is the same and even better than before. The clientele and the portfolio of clients you see from Air India to American Airlines and even Turkish Airlines in New York and Chicago is back. Thai Airways, EgyptAir, and so on, and Emirates in Boston, Air Canada in Los Angeles. You don't see any location which does not make it.
All of them getting on the global base, the clients, and the secret of the story is always make them in one location happy, and then you're going to get the next one. International Event Catering, obviously, in the first half year, one of the drivers was the FIFA World Cup, which we did in Mexico City, in New York, and in Miami, with very good feedback, as we have reported last quarter. Restaurants, lounges, hotel, all going well, as you see on the numbers. Refurbishment of DO & CO Hotel in Stephansplatz is going on schedule. I mean, not really on schedule. We are four weeks late, but this is, I think, more than reasonable. We're going to come back then in detail in a minute. What we stand for, we mentioned already, innovation, company culture, sustainable quality, multidimensional approach.
Coming now to the divisions in Airline Catering, the EUR 1 billion 38 million I mentioned already. You see all the different markets. Turkey is obviously one of the most important markets. It's not only Turkish Airlines. It's at the same time a lot of other clients who contribute to our joint venture. Best hospitality experience and heading in all areas, meaning in lounges and on board, to deal with the best product. We are really proud to have such a partnership. Turkish Airlines won again at Skytrax, which is the Oscar of the airline industry, a lot of awards, and we're proud to have a contribution to that and to work together with the different teams over there. Having up to 250,000, 300,000 meals a day is, I would say, most likely one of the biggest kitchens in the world.
The new gourmet kitchen is on schedule, so to say. Currently, we're expecting 2028 as the opening, and then in phases going in. The third-party clients I mentioned already, so we have more than 30 clients. I think it's important to know, and that helps a lot in the JV as well, that other clients contribute to this kind of setup. Coming then to IAG Group, Iberia, and British Airways, nothing new to report, which is good news. I think we are performing in both those destinations and locations very well. The clients, the big clients, hopefully are happy, or it seems like they're happy. As you know, we have a current contract until 2030, and we'll see what are the next steps. United States, Delta Air Lines is one of the strategic American carriers, so to say, consolidated in all these locations we serve, especially in New York.
All the hiccups and headaches we had at the very beginning are gone, so operation is working very well, thanks to the local team. On the JetBlue side is the same. We are up catering in JFK, and whenever you go to JFK, I think at least you can easily see that DO & CO trucks on the field is the majority, and I think we're market leader over there, so that makes us very proud. American Airlines, a new American carrier, we are super proud in London with 22 long-haul flights a day. This is a very decent number. 22 long-haul flights is more than many others have on their home bases. Then if you look on the next page, the contracts around the world, you see a kind of who is who with various locations where we have won these kind of tenders.
Coming now to the International Event Catering. FIFA World Cup, I mentioned already, very successful. Was good even on short notice to jump in. So it was a very good case to deliver to the American market, except the Formula 1, which we do for many years in U.S. First time we did football, and I think we have many people, many companies, many clubs have seen what is possible in an American stadium with reasonable money. I think the price level in U.S. is far higher than in Europe. The quality is definitely lower, so there might be good opportunities for in the future to go to the next level. But obviously, these kind of contracts are not on short notice, so they have all of them a few years, and then see whenever something expires, if it makes sense that we can jump in or not.
Formula 1, it's the crown jewel of hospitality, I would say, in sport business. Formula 1 is, after Liberty had taken over, an incredible success story. I guess it's the sport with the biggest impact financially, and at the same time, with 24 races, obviously with attention on the world market, with an incredible audience crowd, I think between 14 and 25 years old. So it's a young generation, so it's not like people will not watch. I think the way how Formula 1 is managed is there's nothing to add. I think you cannot do it better than Stefano Domenicali and the Liberty team and all the team of Formula 1 are doing. So what we see is in all locations we are, very strong demand.
I think what I have to mention is always Formula 1 is a client which understands exactly that increase of quality, even invest, means an incredible high return of profits. Obviously, from hospitality is one of the, I think, the four pillars of income there. The more, obviously, the promoter or Formula 1 makes, or even in other sport, tennis, golf, whatever, the more our budget is fine, and we can deliver experiences others cannot deliver. Allianz Arena, ongoing, I would say, is the other part in Europe, in Germany. Bayern Munich is a very close, emotionally close partner of DO & CO. So we are very proud of that, being the partner in Allianz Arena, not only for football, for any kind of open-airs concert and whatever it is, and means at the same time Olympiapark, SAP Garden.
You know SAP Garden is a mix of Red Bull Ice Hockey and Bayern Munich basketball, which means you have almost every week at least two sport events in the same venue, which then improves, obviously, your utilization and is good for your numbers. Furthermore, this is old, but still always good to mention, to be in the game with the best. Champions League final in Budapest have been happened in these six months. Madrid ATP Masters is, I would say, on terms of hospitality, the highest numbers ever. 43,000 guests into our place is a great number. Half of the stadium is hospitality already, so it shows that whoever chooses us as a partner has a great commercial return as well. Rathausplatz Vienna, Eurovision Village, and this is all what is regular business.
Coming to the third division, restaurant, lounges, hotels, EUR 96 million is an increase of 7%, EUR 13 and EUR 9.9 million in EBITDA. Good numbers. Demel doing very well, successful concept. DO & CO restaurants all, as long as they are open, fine. Currently, renovation and opening of the restaurant will be end in December, partially, and finally all areas then in January. Hotels have a good occupation currently. The one in Munich, obviously, airport gastronomy is doing well. That is fine. Maybe a few words, where we are heading. In Airline Catering, we see in general super demand. Although fuel prices are very high, at the same time, ticket prices have reached a high level, and especially in the premium cabins.
On the other side, almost every airline, all major airlines want to have a better quality and at least the same level of current means the demand at the same level or more is what we face currently. In economy, is obviously slightly different, but even there, the prices are high, so no one is asking for unreasonable cuts, so to say. So, good catering is, in comparison to all other expenses of an airline, still the cheapest marketing tool they have. Otherwise, we wouldn't have this kind of demand on our product wherever we go to. International Event Catering, new field of luxury and spending money.
We feel, we believe that a good portion of the money which has left, so to say, luxury brands are going into this kind of event experience, regardless you go to a tennis tournament, or to a golf tournament, or especially Formula 1, I think is a very good example. You see that they create more and more fan base and wow experiences, and all the big tennis tournaments are doing well. It looks like wherever you go for Instagrammable moments, the business works very well. Maybe one more word to say to the end of season in Formula 1. We have next week Vegas. Vegas is one of the biggest races, obviously completely sold out in all areas. The team is already there. The majority of the team is there because it's really big.
The uncertainty if we go to Qatar and Abu Dhabi is solved. We go, meaning same. Qatar has very high numbers, and Abu Dhabi even, I think, higher than ever. Abu Dhabi was always one of the very best ones, so the demand is the same. We are well organized and facing hopefully another three good weekends until we end the season, which was very challenging. I hope if we do well the next races, then it was a very good season. Restaurant, hotel, lounges, I mentioned already the Vienna story. If you look to the margins, 14.5% in EBITDA, honestly, is not so bad. I think look where we came from in this division only two, three years ago.
Even a product like Kaiserschmarrn, which is the Austrian way of pancake, does a very good contribution to our margins, and at the same time is a driver of social media coverage. Social media coverage means increasing frequencies. Increasing frequencies mean to sell more chocolates and cakes, so anyone who comes in. I'm pretty sure you will ask now what's going to happen with the new kitchens, because I have to leave today earlier for a client, by the way, not to go for dinner. I'm trying to summarize where we are. We're going to open in Boston a second kitchen. Vegas is going to come, and Chicago will do another one because we reach a certain level. In Europe, Rome, Berlin is on schedule for 2027. The new one which we focus now is Zurich in 2028.
Except these locations, we don't see any more current question marks, so to say, in Europe. Depending, one of the home carriers would go and attend that, and obviously we would be always in the game. Restaurant openings, Istanbul, we mentioned we will open a new, at least focusing on a Michelin level, first time in the lounge in Istanbul next month. London will open April, May next year. Vegas, depending on when next year we go in operation, we can do obviously the restaurant story, and at the same time we'll do Demel's there. Demel's will follow in 2027 in London. Finally, New York will open. In Istanbul, in the lounge, we opened the Kaiserschmarrn stand, so to say, selling more than 1,000 portions a day over there. We see regardless where we try it works.
The product with sweet chocolate and the Kaiserschmarrn story is really something which is special. Finally, creating the most memorable hospitality moments with a very high level of customization and personalized approach, I think within the right environment, with the right decoration, with the right vibe, which is very intangible, makes the difference. This is what I think our clients like. Thank you very much for listening. I will hand over to Johannes, and please apologize if I have to leave earlier as I have to fly to a client which you will like if it works then finally, then as a business. Thank you. Johannes, please.
Thank you. Good morning and good afternoon, everyone. Let me start with the income statement on page 29, and let us focus on the development below the top line. First, one point on the Middle East. The revenue shortfall of approximately EUR 45 million was essentially offset by the contribution from International Event Catering in the first half year, mainly related to the FIFA World Cup. More importantly, however, we continue to improve profitability across the P&L. The EBITDA margin increased from 12.1%- 2.4%, while EBIT margin increased from 8.6% - 9.0%, and last, net result from 4.3% - 5%. This means that profitability improved well ahead of reported revenue growth, resulting in further margin expansion. The tax rate increased to 29.3% compared to 26.4% last year, mainly reflecting the profit mix across our markets and the impact of hyperinflation in Turkey.
Non-controlling interests, meanwhile, remained broadly unchanged year-on-year. Let us now take a closer look at the second quarter on page 30, where growth accelerated further. Revenue increased by 11.7% year-on-year, compared with 7.8% in Q2 last year. On the constant currency basis, growth was even stronger at 16.2% in that quarter. Importantly, we also achieved a further improvement in margins. EBITDA margin increased in Q2 from 12.2%- 12.7%, EBIT margin from 8.7% - 9.1%, and net result margin from 4.3% - 5.1%. Q2 therefore confirms that we continue to combine strong revenue growth with higher profitability. On FX, the main impact again came from Turkish lira. You can see it on the bottom, - 4% in Q1 and Q2, while the British pound and the U.S. dollar each had a slightly positive effect of around 1% in Q2.
Turning to the divisions, the improvement was broad-based across the group. In Airline Catering, constant currency growth, excluding the Middle East impact, was 14.6%, while the EBIT margin improved from 8.3% - 8.5% in the first half year. International Event Catering delivered another strong performance despite the cancellation of the two Formula 1 races in the Middle East. EBIT margin increased from 9.7% - 10.7%. In Restaurant, Lounges, Hotels, the EBIT margin improved again from 10.0% - 10.3%. What I think is important here is the consistency across all three divisions. Despite the different market dynamics, each division improved its EBIT margin and contributed positively to the overall group performance. Let us move to the balance sheet on page 32, where our financial position continues to strengthen again during the first half. Total assets increased to approximately EUR 1.5 billion.
On the asset side, trade receivables increased by around EUR 99 million, while trade payables, which we will see in the next page, increased by EUR 88 million. This development reflects the higher level of business activity across the group, including a small working capital buildup related to our recent startups, as well as normal timing effects at the reporting date. At the same time, cash increased to approximately EUR 289 million. You can see, despite the higher working capital requirements, our liquidity position remained very strong. Turning to the other side of the balance sheet, we see a further improvement in our capital structure. Equity ratio increased to 43%, further strengthening our capital base. As mentioned on the previous slide, trade payables went up by EUR 88 million, and at the same time, scheduled bank loan repayments for the remainder of the year amounts to only around EUR 2 million.
This further underlines the significant improvement in our financial profile over recent years. Let us now turn to cash flow on page 34. Cash flow from operating activities increased by EUR 8.2 million - EUR 129.5 million, as the higher gross cash flow more than offset the slightly negative impact from working capital. Additions to assets amounted to EUR 37.7 million in the first half, including EUR 21.2 million in Q2. Our guidance for the full financial year remains unchanged at between EUR 80 million and EUR 90 million of CapEx. Free cash flow remained very strong at EUR 117.5 million, up 9% year-on-year. This cash generation is also clearly reflected in our liquidity position. Our cash increased by EUR 80 million - EUR 289 million. This brings me to our financial slide on page 35, focusing on our leverage position.
Based on a rolling four-quarter EBITDA, DO & CO is in a net cash position, with a ratio of - 0.17 x. As you can see, over the past years, we have significantly strengthened our balance sheet while continuing to invest in the business, and we deliver strong growth. We therefore enter now in the second half of the financial year in a very strong position, giving us also flexibility for the future. Let me summarize our performance over the last six months with three key messages. First, underlying growth remains strong and broad-based across the group. Second, we continue to improve profitability with higher margins at group level and across all three divisions. Third, strong cash generation has further strengthened our financial position and brought us into a net cash position.
Before I close, I would also like to join Attila in thanking all of our colleagues across the group for their commitment and for their contribution to these results. Thank you very much for your attention. We are now happy to take your questions.
Ladies and gentlemen, we will now begin the question and answer session. Anyone wishes to ask a question from the webinar may click the Q&A button on the left side of the screen, and then click the raise your hand button. If you are connected via phone, please press star followed by one on your telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press the lower your hand button from the webinar or press star and two on your telephone. Anyone who has a question, make you up now. We have the first question coming from Julien Richer from Kepler. Please go ahead.
Yes. Hello, everyone. Three questions for me, if I may. The first one, in terms of revenue growth, excluding FX, it was 16%+ in Q2. If I do the math, it was probably something like around 14% excluding the FIFA World Cup impact. Could we please have some granularity on what is coming from the volume, like for like, during the quarter, prices, and the new business impact in Q2 specifically? The second question, in terms of revenue growth on a reported basis, 8% in H1, close to 12% in Q2. You mentioned the Q3 ramp-up of American Airlines at Heathrow, the Formula 1 races also. Is there any reason for H2 to be below 10% in terms of reported revenue growth?
The last question, in terms of margin, if you could please disclose the origin of the 40-bps improvement you observed this year, what is coming from the mix, from scale, from efficiency, and is there potentially a reason for your 10% target to be there maybe a little bit earlier than you initially expected? Thank you.
Yes. Let me start with the answer. Maybe first of all, let us talk about the guidance for this year, because your question was regarding H2. I think, to be honest, we are very satisfied with the performance in the first six months, and we are still comfortable with the range that we communicated on the guidance. It is still what we expect, the revenue growth of 6%-8%, and an EBIT margin of between 8.6% and 9%. But yes, based on the current development, and assuming that we do not see any negative surprises now in the second half, to be honest, we hope that we finish towards the upper end of both ranges. But yeah, we stick still to the guidance on that.
Regarding the development in Q3 and Q4, please note that Q3 at the moment is a bit below Q2, as we had in Q2 also the FIFA World Cup. We think that Q3 is a little bit below Q2 at the moment, and then Q4 is always our weakest quarter, as you know, in terms of top line, but also in type of margin. At the moment, to be honest, we still head to around 7%-7.5%, hopefully at the upper end of our guidance. I think the 10% in Q3 and Q4 is a bit too high, to be honest. Then regarding the growth rate and the mix of our growth in Q2, I think approximately 40% of our growth in the first half year came from new contracts.
We disclosed already, I think it was eight tender wins in Q1 and Q2. Those tender wins approximately contributed EUR 30 million revenue for the year 2026, 2027 in total. With the startups now coming in Q3 and Q4, we expect another EUR 30 million in that business year. Which means EUR 60 million in that business year coming from new clients within that year, and that annualized, that number, to be honest, is then three-digit. But of course, part of it is already included this year's revenue, while the full annualized effect will become visible next year. The third question, sorry, was about.
In terms of margin, yes. The margin you mentioned.
Oh, the margin. Yes.
In terms of, yeah.
Yes.
Where is it coming from?
Yes. Regarding margin, I think, let us start with event catering, because here the margin expansion from 9.6% - 10.6% was a big one. Of course, the FIFA World Cup contributed our margin expansion here, but on the other side, we also had one additional Formula 1 race compared to last year, the race in Madrid. So it's a mixture of those two facts, plus a very strong season at Allianz Arena. In terms of Airline Catering, we are benefiting, of course, from scale effects, but disciplined cost management, I think we also showed you that, especially in Q1, where we had a higher Middle Eastern impact, but still we were able to increase our EBIT margin in that quarter. Then, of course, it's a continued optimization of our operation, while we have to maintain or we are maintaining a clear focus on product and service quality.
I think it's a mixture of scale effects, cost management, optimization of our operations, and then, of course, pricing. But it's not one topic that we have to announce here. It's really a mixture of that one. I think we proved in Q1 that we are really strong now in terms of operational controlling. Again, we also delivered strong numbers in Q2 again, although we have a slight impact from the Middle East. Maybe one word on the impact of Middle East, so the number in Q2 was about EUR 5 million-EUR 6 million on top line revenue that we lost. It was much higher in Q1. Q2 stabilized quite a lot, to be honest. I hope that helps. If you have another further question, please stand up.
In terms of revenue, when you mentioned the 40% coming from new business, it means that 60% is coming from like-for-like. You had a price of something like mid-single digit in H1 in terms of contribution to growth?
Yes, correct. Yes, the rest is volume growth, but volume growth, according to IATA study, it is approximately 2% passenger growth at the moment, and then the rest is, yes, price adjustment, CPI, and also more volume. Yes, correct.
Okay. Thank you very much for that. Thank you.
The next question comes from Patrick Steiner from ODDO BHF. Please go ahead.
Good afternoon. Thank you for taking questions, and congratulations to the great results. Just a few questions left from my side, mostly on cost. Firstly, personal cost went up quite a bit in the second quarter. Can you give us a bit more information why was that the case and how we should think about personal cost for the rest of the year? Secondly, related to material cost as percentage of sales, also compared to the first quarter, was a bit higher, but operating expenses were lower. How should we think about these positions going forward? Thank you.
Yes. Thank you very much, Patrick, for your question. You might know that we are also disclosing now COGS and personal costs and OpEX by division. I think it also makes sense always to look to those numbers. But in general, what we are doing now, also in terms of efficiency gains, we try to hire people on a fixed term, to be honest, rather than going for agency staff. That is why you see a reduction in COGS and an increase in personal costs. But that brings us, to be honest, more efficiency, because always the same people are doing the same type of work. If you look to the Q2 number, COGS was 39.3% overall, 38.7% in Q1, so slightly up. But then on the other side, OpEX went down from 14.2%- 13.6%. That is also related to our open book contracts.
Maybe the type of how we share costs is also different here. But one measure that we take for sure is to get more efficiency by hire people on our own. You can see especially that effect in the Airline Catering as well. Airline Catering, if you look to COGS only, this year it was at 40.7%. Last year it was at 43%. Here you can see the reduction in agency staff. On the other side, personal costs in Airline Catering went up from 36.6%- 38.1%. You can see that shift, especially in Airline Catering, because here, you see the biggest shift towards fixed staff people from agency staff.
Perfect. Thank you much. That is very clear. One follow-up maybe. Do you see currently any kind of bottleneck specifically in terms of acquiring skilled staff, maybe thinking about different kind of functions?
To be honest, no. I think to my father's point and the point we continuously also try to make, it's not so much about only finding the right people, but injecting them with the DO & CO spirit. That is the task we're improving and we will do better at. But from a talent perspective, the applications that we're seeing at the moment, they're very strong.
That's pretty clear. Thank you very much.
The next question comes from Christoph Greulich from Berenberg. Please go ahead.
Yeah. Hey, thanks a lot for taking my questions. It's three from my side, please. Yeah. Firstly, I wanted to follow up on the comments with regard to the new kitchen openings. Just, yeah, as a clarification, you mentioned seven kitchens in Boston and Chicago. If I think back about the plans to open seven new kitchens, am I right, or is my understanding right that this doesn't imply seven new locations, but includes those seven kitchens at the already existing locations? Then if you also could give or remind me of the timeline for Las Vegas, and also the CapEx phasing for those kitchen openings, how we should think about CapEx this year and next year?
Yes, Christoph, let me answer the first half of that question. I think the guidance that we gave is for the seven kitchens that you mentioned, they were very location-specific, yet at the same time, what we're also seeing is a need of increased capacity because of the locations where we're currently already operating, Chicago, Boston. We're simply seeing a higher demand, so it's increasing capacity to accommodate that. That does not mean that the other kitchens will not be opened.
In terms of CapEx for kitchens, you know that our number is around EUR 20 million-EUR 25 million per kitchen. Our plan of opening new kitchens is included in our CapEx guidance, to be honest. If we would have the chance in one year to grow further or to get a bigger contract, we are also willing to spend more, to be honest. I think we did this in JFK two years ago with the Delta Air Lines operations. But normally, the CapEx for the new kitchens is included in our guidance. For next year, it's around EUR 90 million-EUR 100 million, what we expect.
Yeah, that's very helpful. Thanks for that. The second question I wanted to ask you is about the growth that we've seen in International Event Catering. So Q2 reported growth coming at 47%. Could you give me a breakdown how much of that 47% comes from or came from the FIFA World Cup? How much is growth in Formula 1? How much is the Allianz Arena? Just a breakdown of that 47%, please.
Yes. I try my best, not disclosing too much info, but it's an increase of approximately EUR 30 million. I think we mentioned also in our Q1 call that approximately EUR 10 million came from the FIFA World Cup out of the EUR 30 million, and then the rest, the EUR 20 million, to be honest, is for sure mostly driven by Formula 1. One additional race plus higher guest numbers than last year. So that's for sure the major part of the rest. I would say around 20% is coming from Allianz Arena, SAP Garden, and Olympic Park. So that's the breakdown more or less. Mostly via Formula 1, EUR 10 million FIFA World Cup. No big surprises here, and then the rest is Munich. I hope that helps.
Yeah, that is very clear. Lastly, on the contract wins year to date in Airline Catering, I think you mentioned on a fully annualized basis, it is three digits. I do not know, is it around EUR 100 million? Is it meaningful more than that? If you could provide a bit more color on that number.
Yes. Slightly above EUR 100, I would say, yes.
Okay. Yeah, that is great. All from my side. Thank you.
Thank you.
Thank you.
The next question comes from Vladimira Urbankova from Erste Group Bank. Please go ahead.
Yes, hello. Good afternoon. Congratulations to the excellent set of results once again. I have only a few questions as most of my questions were already answered. One question would be if you could dig a little bit deeper into the EBIT margin guidance for this year, which you reiterated at 8.6%-9%. How do you see the profitability margins for individual divisions for this year, and what is maybe mid-term target in terms of EBIT margin for individual segments? The next question would be related to the financial result, which turned into positive. What is the outlook for the second half of the year, and what are eventually preconditions for the outlook for the second half of the year on the financial results side? Last but not least, with your nice cash position, what are the plans?
How do you want to use that in terms of organic or possibly inorganic growth? Thank you.
Thank you, Vladimira. Let me start with the EBIT margin guidance. We normally don't look at the divisions, but I tell you what we expect, to be honest. If you look to Airline Catering, our EBIT margin last year was at 8.2% for the full year. Our goal for sure this year is to be above that. Q1 was 8.3%, Q2 8.7%. I think Q3 maybe, as I mentioned, revenue at the moment is below Q2. I guess also the margin is maybe slightly below. Q4 normally is always our, I would say, lowest quarter. Last year, we had an EBIT margin of 7.9% compared to 8.2%. I think our goal is maybe to get further to Q1's EBIT margin in Q4. In total, I expect a slight increase on EBIT margin.
In Event Catering, for sure, hopefully it will be double digit if we do not see any big surprises here, and hopefully another improvement from last year. The same for restaurant, lounges, hotels. Double digit, and hopefully as well a slight improvement from last year. That should bring us, to be honest, if everything happens like planned, to the upper end of our guidance. Regarding the mid-term, what is our mid-term guidance? To be honest, I think we see the biggest potential for sure in our restaurant, lounges, hotel division, with retail, but also the restaurants and the gimmick shops and so on. I think, to be honest, the mid-term guidance here could be 15% on an EBIT margin level. In terms of Event Catering, double digit, slightly above double digit should be the goal.
Our goal is 10% in the next two or three years on a group level. If we want to reach that, we need also 9% EBIT margin in Airline Catering, I guess. That's still our guidance for mid-term, so no big changes here. The second one on the financial result, yes, it was positive, because we had very high interest income. Hyperinflation was a bit higher than expected, but on the other side, FX effects much better than in the last year. To be honest, for the second half, it could be the same, more or less. It could be slightly negative. That's now dependent on hyperinflation or inflation in general, and FX. It could be, again, slightly positive if the numbers are the same like in the first half year, could be slightly negative.
You should not see any big surprises here, to be honest.
Thank you. Then the use of the cash for organic or inorganic growth. Any thoughts at this moment?
Yes, Vladimira, let me try and answer that. As you know, we just got to this point. It took quite some time, the effort of everybody to allow us to even get to this point. So, to be independent, to be able to consider opportunities and act quickly if we feel that they are the right fit and they add value, is the position we want to be in for now. At this point in time, there is no strategy or approach to buying back shares. It is really being flexible for the right level of opportunities.
Thank you.
The next question comes from Olivier Calvet from UBS. Please go ahead.
Yeah, hi. Good afternoon. Thanks for taking my questions. Maybe just two first on Airline Catering. A follow-up on the kitchen CapEx topic. I think at the last conference call, Attila discussed a more nimble approach to opening up new kitchens. Have you made any progress in that area? Any comments also on fresh versus frozen mix in the U.S., and where you want to go? That would be the first two questions on Airline Catering. Then in Event Catering, just curious, going into next year, how confident you are on bridging the gap to this relatively high contribution from the World Cup that you had. Maybe it's a bit early to talk about it, but can you remind us how to think about the next large European football event in terms of potential contribution?
If you could come back on the Qatar and Abu Dhabi events that are coming up more later this month and next month. There's potentially a question mark on travel into the region, even though F1 obviously went ahead with those events. Do you expect at this point your guest numbers to be flat or up or down? Any color there would be much appreciated. Thanks.
Yes, thank you for the question. Let me start with the kitchen CapEx. Yes, we mentioned a new approach. We have a project team, to be honest, on that. We are really confident to get the solution to build a kitchen with lower CapEx than maybe in the past. That is something which is ongoing now. Maybe the first kitchen opening could be a new methodology of how we think to be more flexible as in the past. That project is ongoing. What we see at the moment is that the demand is very high. We have a lot of tenders also on short notice, so customers are asking us if we can start in two, three, or four months. We need that flexibility, to be honest, to deliver to our customers.
I think we have a great chance here to lower CapEx on one side, but on the other side, being quicker and more flexible as in the past. Then fresh/frozen, I think we talked about that in Q1 as well. We do not see any new development here. Some airlines stick to frozen, especially in economy, to get consistency within the network. In premium cabins, we do not see that trend. Airlines still invest into premium at the moment. Could be frozen an area fast in the future, yes, why not? But I think, yes, we still have a lot of tenders ongoing at this stage, so maybe not in Phase 1, but maybe Phase 2 or Phase 3. In terms of Event Catering, if we look to the next year, yes, FIFA World Cup will be out. Can we compensate that on top line?
I think it could be possible, to be honest. If guest numbers increase again at Formula 1, we hope that we see a very good business at Allianz Arena next year with a lot of open-airs. Same for SAP Garden. I think we can close the gap in terms of top line, maybe not completely, but I think close to that. In terms of margin, I think event catering double digit, that's for sure the goal. Hopefully higher than 10.0. I think, yeah, it's on us now to close the gap next year. Will we see another revenue increase in event catering? I'm not sure, but you will not see a big reduction. The last one on Qatar and Abu Dhabi, what we expect at the moment is, to be honest, quite a high number of guests.
Maybe some sponsors are not going to Abu Dhabi or Qatar, but then on the other side, I think they try to fill up the gaps. At the moment, our plan is the same like three, six months ago. We do not see any big reduction there in terms of guest numbers. I hope that helps.
That's helpful. For sure. Then just on the kitchen CapEx, if I can follow up. Any sense of the reduction versus the sort of EUR 20 million-EUR 25 million CapEx that you typically talk about? Perhaps just if you could point to what's driving the lower CapEx number?
Yes. I think, yes, one topic is the lower CapEx number. To be honest, is it EUR 15 million-EUR 20 million instead of EUR 20 million-EUR 25 million? I think that's possible. For us, it's even more important to be quicker and to be flexible. We see that there is a big demand on the market. It's getting tighter and tighter in terms of schedules. I think the flexibility is even more important for us. You can easily increase the kitchen capacity by taking another container, as an example. That's, I think, for us the beauty of the story here. Then in terms of CapEx, I think a reduction of 20%, 25% is also possible. Yes, for sure.
Okay, thanks.
As a reminder, for questions from the webinar, please click the Q&A button on the left side of the screen and then click the raise your hand button. If you are connected via phone, please press star followed by one on the telephone keypad. There are no more questions at this time. I would now like to turn the conference back over to Attila Doğudan Jr. for any closing remarks.
Yes, so thank you very much again for your time and for all of your questions. I would also like to take the opportunity to thank all of our employees and extended family. They are the ones that deliver this day in and day out, either in permanent locations or constantly traveling. So we should never forget that. Yes, I believe we will see some of you in the upcoming conferences in the next couple of weeks. So thank you very much for your time.
Thank you.
Ladies and gentlemen, the conference is now over. You may now disconnect your lines. Goodbye.