Good morning, and welcome to GAP's Third Quarter 2025 Conference Call. It is now my pleasure to turn the call over to GAP's Investor Relations team. Please go ahead.

Thank you, and welcome to GAP's Third Quarter 2025 Conference Call. Prior to introducing GAP's management team, I'd like to take a few moments to mention the forward-looking statements as described in the financial disclosure statements. Please be advised that any comments made today may not account for future economic circumstances, industry conditions, the company's future performance or financial results. As such, any information discussed is based on several assumptions and factors that could change, causing actual events to materially differ from current expectations. For the complete note on forward-looking statements, please refer to the quarterly report. Thank you for your attention. Our speakers today from GAP are Mr. Raul Revuelta, Chief Executive Officer; and Mr. Saul Villarreal, Chief Financial Officer. At this time, I'll turn the call over to Mr. Revuelta for his opening remarks.

Good morning, everyone, and thank you for joining us today. I am pleased to share with you the operational and financial highlights for the third quarter of 2025. Overall, and despite the passenger traffic slowdown in this quarter, this was another solid quarter for GAP, marked by continued revenue growth and profitability as well as important progress in terms of the company's investment program and financial strategy. Let me start with the passenger traffic. During the quarter, international passenger traffic declined, mainly due to the immigration-related challenge and a more restrictive perception under the current U.S. administration, which has affected the behavior of VFR and leisure passengers. In addition, the ongoing Pratt & Whitney engine issues continue to limit Volaris and Viva Aerobus seat capacity recovery, as carriers have indicated they expect to fully recover their fleet by 2027. Despite this challenge, total passenger traffic across GAP's 14 airports increased by 2.5% compared to the same period of 2024, reaching a total of 15.8 million passengers in the quarter. This growth was supported by new routes and additional frequencies, which helped offset the decline in international traffic and reflect the sustained recovery in domestic demand. Looking ahead, our strategy remains focused on connectivity and diversifying our network. During the fourth quarter, 8 new international routes to Canada will be launched, 3 from Guadalajara, 3 from Puerto Vallarta, and 2 from Montego Bay, which will enhance passenger traffic and support demand during the high winter season. Furthermore, for the first time in the history of Los Cabos, it will be connected directly to Panama, expanding our network into Central America and thereby strengthening GAP's position as a regional hub. Turning to total revenues, this increased by 17.4% versus the third quarter of 2024, driven by the solid performance of both the aeronautical and non-aeronautical business. Aeronautical revenue grew by 18.3%, reflecting the new maximum tariff. The original plan was to implement the increase approved in 2 phases, 15% in March of 2025 and the remainder during 2026. However, after reviewing traffic performance and load factor trends during the year, we moved forward with the second adjustment on an average of 7.5% starting September 1. Non-aeronautical revenues increased by 15.6%, driven by the strong performance in both Mexico and Jamaica. Revenue from businesses operated directly by GAP rose by a 30.1% increase mainly due to the consolidation of the cargo and bonded warehouse business, which contributed with MXN 559 million. Revenues from third-party operators increased by 4.7% and include the opening of new commercial spaces and the renegotiation of contracts under better market conditions. It is worth noting that the strongest performing business lines were food and beverage, retail, duty-free, ground transportation, and timeshares. Beyond the quarter results, non-aeronautical revenues continue to drive diversification and resilience in our business model. The expansion of commercial areas and the integration of the new services such as cargo operation strengthens GAP's long-term revenue base. Looking ahead, we expect to continue optimizing our commercial offering and leveraging passenger flow growth to enhance value creation across all the airports. Moving on to the cost. The cost of services increased by 14.1% compared to the same period last year. This increase reflects the impact of the operation of jet bridges and airport buses, a task that was previously managed by third parties, but must now be operated directly by GAP due to the change in regulations. Without this cost, the cost of services would have increased by around 4.8%. Despite this increase, our focus on strict cost discipline remains a priority. Our goal is to maximize operational efficiency and long-term sustainability while ensuring that service quality and safety standards across our airports remain among the highest in the region. Turning now to profitability. EBITDA grew by 12.8%, reaching MXN 5.1 billion with an EBITDA margin of 64.3%, excluding IFRIC-12. The margin was lower than in 2024, reflecting mainly the impact of the change in concession fees for our Mexican airports from 5% to 9%, which was payable signed in 2024 but reflected in our P&L in 2025. Regarding our financial position, we remain in a strong liquidity position with MXN 11.7 billion in cash and cash equivalents as of September 30. In the third quarter of 2025, we paid the second and final dividend installment of MXN 8.42 per outstanding share, which was approved at the Annual General Ordinary Shareholders' Meeting. During the quarter, we successfully issued 2 new bond certifications under our long-term program for a total amount of MXN 8.5 billion. The proceeds are used to finance approximately MXN 7 billion in capital investment and to repay MXN 1.5 billion bank loans with Santander. We also refinanced a USD 40 million credit line with Banamex, extending its maturity to 2030. Active management of our capital structure strengthens the balance sheet and provides us with the flexibility required to execute our long-term investment commitments and potential inorganic growth. In terms of CapEx, during the first 9 months of the year, we invested approximately MXN 7 billion. Most of these investments were related to the early stages of major infrastructure projects under the master development program, including terminal expansions, air site improvement, among others. Looking ahead, we remain cautiously optimistic. Macroeconomic uncertainty and exchange rate volatility may create a short-term challenge. However, it is important to highlight that GAP continues to benefit from a resilient domestic market, a diversified portfolio of airports, and disciplined financial management. Furthermore, our strong financial position and continued growth in both aeronautical and non-aeronautical revenues allows GAP to maintain its leadership position in the region and thus continue generating long-term value for our shareholders. Before closing, I would like to provide an update on our strategic expansion opportunities. The process related to the Turks and Caicos tender remains ongoing. We submitted our bid last year and while evaluations continue, no resolution has been announced yet. We are still analyzing the potential acquisition of Motiva Airports, including the information available in the data room, reviewing the transaction details, and developing our financial model. As always, the market will be duly informed of any developments, and we will continue to focus on value creation. Thank you again for your time, operator. Please open the line for questions.

And we'll take our first question from Rodolfo Ramos of Bradesco BBI.

I have a couple, if I may. Can you talk a little bit about the traffic dynamics that you're currently experiencing? I mean international traffic continues to underperform, especially in the VFR routes. You mentioned the immigration stance in the U.S. But yet when you see capacity deployment and the route development that, for example, Volaris is having, it's targeting those very routes. So do you see a more pronounced recovery towards the end of the year in the next few months? And how do you feel about your guidance for the year? So that would be my first question. And I have a second one, if I may.

Thank you, Rodolfo. This is Raul. In general, we are experiencing a slowdown in the VFR market. This deceleration is impacting routes from some of our airports to the U.S., such as Guanajuato to Chicago and Guadalajara to Sacramento or Los Angeles, as well as routes through Tijuana and CBX to the U.S. We are observing a slowdown in both markets due to a lack of information affecting the VFR segment. Most passengers flying on these routes have the necessary documentation, so we believe that the current decrease in this market will be temporary, as passengers gain a better understanding of the U.S. administration's migrant policies. Over the next few months, we expect a continued decline in specific VFR markets. However, we remain optimistic about the upcoming years, especially when we consider the seat capacity that various airlines like Volaris have already announced. Therefore, we still believe that the VFR market will begin to recover starting next year.

Okay. On the commercial side, the businesses you operate are experiencing rapid growth, which accounts for the strong performance in non-aeronautical revenue per passenger. Looking at the various initiatives you have in the pipeline, when can we expect the top line revenue growth to stabilize and align more closely with traditional retail, food, and beverage businesses?

It was a good question, Rodolfo. I mean, at the end of the day, we are seeing this double-digit growth in almost all our business lines directly operated by GAP. I mean we are really proud of all the efforts our commercial area is doing to maximize the revenue, to manage the prices of the products and the tariffs, and to manage the cost of these services. What we are seeing over the coming years is that some of these business lines will continue at a higher pace than the rest of the commercial business due to the fact that, for instance, there are new commercial areas that we will deploy in the coming 2 or 3 years as soon as we open new terminal businesses. So for instance, as soon as we open the new terminal building in Puerto Vallarta, we will see a jump in some of these specific business lines, but also as soon as we open the rest of the expansion of our terminal buildings in the coming years. So in general terms, I would say that we will continue to see interesting rates of growth in the business directly operated by GAP because we are expanding this business line in different airports and areas. I mean let's, for instance, think for a second that our FBOs, today, we are just running Los Cabos and 3 months ago, we began with La Paz. But for the next 20 months, we will see the first FBO directly operated by GAP in Puerto Vallarta. The same will happen, for instance, with the hotels. We have a plan for different hotel developments in the coming 5 years, which will give us additional possibilities there. But in general terms, Rodolfo, I would say that the business directly operated by us will grow at a faster pace than the other businesses operated by third parties in the coming 3 to 4 years.

And our next question comes from Guilherme Mendes of JPMorgan.

The first question is about costs. You mentioned earlier the additional costs throughout the quarter. Can we assume that the cost and expense levels we saw in the third quarter will continue in the coming quarters? Based on our calculations, this would likely put you at the lower end of your guidance for EBITDA margin for the year. I’m just wondering if that makes sense directionally. The second question is about the MDP maximum tariffs. Can you share what level you're at as of the end of the third quarter? Is the plan to increase prices in early '26 and potentially in the second half of '26 still the base case at this point?

Guilherme, this is Saul. Well, related to the cost, we believe that this will be, on average, the level of costs that we will see in the following quarters. It is very important to understand that as we increase the facilities in the airports, we increase the headcount, security, cleaning, etc. So it is part of the business. So we will see this level in the following quarters.

In terms of the maximum tariff, I mean, first of all, talking about the EBITDA margins, as you remember, we present guidance for the beginning of the year, and we are still within our guidance related to the margins. The other part related to the maximum tariff, let's remember that on the 1st of March, we had a 15% increase on passenger fees for all of our airports, both domestic and international passengers. On September 1, we implemented an additional 7.5% increase. For the coming year, we are thinking that in early February, we will implement another tariff increase. So it will be important to note that for 2026, we want to have in place the effects of 3 different tariff increases. January and February will include the effect of the 15% and the 7.5% increase. From March to September, we will have the effect of the 7.5% of the tariffs. And during almost all of the year from February to December, we will have in place the additional tariff that we will implement in the coming year. So in terms of tariffs for the coming year, we expect a much better fulfillment of the maximum tariff and it will depend on factors like inflation, price equations, and exchange rates. In general terms, I would say that we are still working through all the changes on passenger fleet to have the best possible fulfillment of the maximum tariff, and we foresee an important increase in that specific line of the business.

And just to complement answering your question, Guilherme, related to the EBITDA margin, we will be very close to the guidance we really have to...

And our next question comes from Jens Spiess from Morgan Stanley.

Just on the Motiva airport assets, I know it probably is limited what you can comment, but still like hypothetically, are you planning to go for all of the assets or maybe do a partnership with some of the other potential bidders like Aena? And if you're going alone for all the assets, would you be raising equity or mainly finance it via debt?

Thanks, Jens. I mean we are still working on the different options. I would tell you that today, we are not fully decided which will be the way that we will proceed with our bidding for this opportunity. We are open to partnerships or going alone in these steps. But what is important is that we are working in a disciplined way to review the numbers, and thinking about what is going to be accretive for our company. And for sure, in the case that we continue with this opportunity, we are considering that all the necessary funding will come from leverage. I would say that these are our main takes today on this specific opportunity of Motiva. We are still working, and we remain open to different ways of participation, either alone or with some kind of partnership, and all the funding will come from leverage.

Our next question comes from Gabriel Himelfarb of Bank of Nova Scotia.

Just a quick follow-up question. Can you repeat the tariff increases that are expected for 2026? And when do you expect to reach the 100% maximum tariff?

For the coming years, we are still working on which are going to be the increases. I mean, it's underway because we need to work on all the procedures with the AFAC, with the federal agency. So we are still on that, but we are expecting that it will happen in February. The other part is with all the changes that we are expecting for 2026 will depend on inflation and exchange rates; we expect to be around between 93% to 97% of fulfillment of the tariff by the end of 2026. And those are mainly the primary expectations in terms of tariffs.

So it's 95% at the end of 2026, right, what you're expecting?

Yes, in the range of that number.

Our next question comes from Jorge Vargas of GBM.

Regarding the potential acquisition of Motiva's airport portfolio in Brazil, could you share any color on the expected timeline along with the estimated investment size and the main strategic rationale behind your interest? And additionally, could you provide some context on how Brazil's concession structure works and how it differs from the Mexican model?

Thanks, Jorge. I mean, for sure, the rationale is diversification among our main businesses has been airports. As you know, the airport industry opportunities are limited each year around the world. So for sure, as an airport operator, it is always interesting for us to analyze any of these opportunities. Motiva is a group of airports that have different concessions, in different countries, and with different concession frameworks. We are moving quickly on this; we have a group of 4 major airports in Brazil, each with its own rules of concession. Also, the same applies to the PAC – Quito Airport, San Jose Costa Rica Airport, and other airports. What we are seeing in all of this for GAP is we will have a potential opportunity to increase the value of those companies through two different ways. The first is related to commercial revenues, applying our well-known model of increasing commercial revenues. The second is related to the discipline of costs. We believe both of these areas will be interesting to explore in order to bring all the experience of GAP into play. But again, we are in the final analysis of this opportunity. Today, we will have a complete view of whether we will participate in the last part of this bidding process. We are continuing to analyze. Regarding the timeline, I would say that this structure and project is being driven directly by Motiva. We expect that by mid-November, the presentation of the final numbers could happen. But again, it will depend completely on the seller because this process has had different moments and changes in the timeline. For GAP, we are anticipating a decision around mid-November related to this transaction.

And we have a question from Edson Murguia from SummaCap.

I have two questions. First, could you provide more details about the new routes from Los Cabos? Looking ahead, is there a chance that other airlines will connect from Los Cabos or Puerto Vallarta to Central or South America? Can you share the name of the airline that will operate the route from Los Cabos to Panama? My second question is about cargo and the bonded warehouse. I'm curious if there are similar initiatives related to new building projects or the master development plan, like those for food and beverage and new terminal buildings, since it seems that cargo and the bonded warehouse are on track for good growth in the upcoming quarters.

In the case of the route for Los Cabos, it is important. It's really interesting to see, for the first time, a direct operation in South America. As you perfectly know, the Panama hub is a great opportunity to capture all the traffic going beyond that connects to the rest of South America and Central America. So I think it's a great opportunity for Los Cabos. Ultimately, it's opening a completely new market and a new way of opportunities around that. For the case of Puerto Vallarta, for almost at least 9 years, Puerto Vallarta has been connected directly to Panama with Copa. We closed the services after COVID and we are coming back with fewer frequencies in some seasons. But what we know about the direct connections with Panama is that the hub of Panama opens the opportunity for a broader market related to all of South America. So, in that terms, I think that yes, it's a great opportunity for Los Cabos to enter into new markets. Regarding your second question, the cargo bonded warehouse is not a business regulated under the master development program. So it is not related to the new terminal for passengers, but we are interested in replicating this business in other airports if there is demand and market opportunities in those airports. So, it is a great business; it was a great acquisition, and we will be following some opportunities in the future in other airports.

Edson, this is Saul. Related to your second question, the cargo bonded warehouse is not a business regulated under the master development program. So it is not related to our new terminal for passengers, but we are interested in replicating this business in other airports if there is a demand and the opportunity in those markets. So it is a great business; it was a great acquisition, and we will be following opportunities in the future.

Well, we have some questions from the webcast. There are 2 from Rafael Simonetti from UBS. One of them was already explained. So the only one that we have is: aeronautical tariff declined quarter-over-quarter. Could you elaborate on the main drivers behind this decrease?

Rafael, this is Saul. Yes, it was due to the component and the mix of passenger traffic we have in our airports. International traffic declined, and those airports have the highest passenger charges. Therefore, this affects directly the revenue and also the exchange rate, which saw the peso appreciate in this quarter around 4.6%. Therefore, the aeronautical revenue per passenger declined slightly.

Thank you, Saul. And well, we have another question from Daniela Gutman from OSMO. The question is: what is the expected effect of next year's World Cup on traffic figures?

I mean it's hard to know because at the moment we have different scenarios regarding what could be the impact of the World Cup in specifically in Guadalajara and at different other airports. We anticipate that for sure, Guadalajara with the 4 games will have a positive effect. We believe that Tijuana, which will be connected to some of the games in Southern California, will also experience some positive effects. Today, it's really difficult to assess how big those effects could be, and it will depend on the lottery regarding the different selections that will be on Guadalajara for the World Cup. At the beginning of the coming year, there will be the lottery of national teams, and we will know which matches are assigned to Guadalajara. At that moment, we could have a clearer way to prepare some scenarios for possible increases in traffic. The estimates announced by FIFA and the government suggest that Guadalajara could see between 300,000 to 0.5 million additional passengers, but for now, it's unclear until we confirm which national teams will be allocated to Guadalajara.

Well, thank you, Raul. We have another one in the webcast from Enrique Sojo from Fundamenta. He's asking: could you provide even further details on the commercial areas, which will come online in the next few years? And do you have any longer-term vision for what level of non-aeronautical revenue per passenger may reach?

Okay. I mean, as you remember, we have touched on that. By 2029, our terminal buildings in Mexico will increase around 55% in terms of square meters. So for sure, we will have a great opportunity to deploy additional commercial offerings in those new terminal buildings and the expansion of terminal buildings. The biggest increases will come from 4 different airports. The first one is the Terminal 2 of Guadalajara, which will be operated by the beginning of 2029. The next one is Puerto Vallarta, which will have a second terminal building opening in the first quarter of 2027. The third is the expansion of Tijuana Airport, which will be ready for operation in 2028. And the last will be the expansion of Terminal 2 of Los Cabos, which will operate in 2027 mainly. In that sense, we will have a great number of opportunities to expand our commercial business. So yes, by the end of the year, the master plan will indicate a significant expansion of 55% in square meters within our terminal buildings. This will reflect opportunities to increase our commercial spaces in our terminals.

And we have a question from Alan Macias of Bank of America.

Just a question on international traffic. If you can just go through the 4 main airports and especially Puerto Vallarta has been quite weak year-to-date. Just if you can go through the negative impacts for international traffic.

I would say that in the first 9 months, we are seeing a decrease in passengers, mainly international, for Puerto Vallarta. The good news is that we are seeing a much better winter. We are reviewing the number of seats coming from mainly Canadian markets and some other different international routes from the U.S. that are coming back with additional seats for the winter season this year, and this will give us a much better first quarter of the coming year in Puerto Vallarta. But in the first 9 months, what we are seeing is a decrease of passengers, mainly due to a decrease in capacity for American Airlines, especially in the case of Puerto Vallarta, with some other effects coming from Spirit. In general terms, what we are observing in Vallarta is a decrease in passengers of approximately 5% this year in the international market. However, we are optimistic about the coming year because we see the return of some of these seats in the winter season, along with an increase in passengers from Canadian capacities, which is great news for Puerto Vallarta.

And it appears that we have no further questions at this time. I will now turn the program back to our presenters for closing remarks.

Thank you once again for joining us today. Please contact our Investor Relations team with any additional questions you may have. Have a great day, and thank you for your attention.

Thank you. This does conclude GAP's conference call. Thank you for your participation. You may disconnect at any time.