Earnings call transcript: Enav Q3 2025 sees strong cash flow and traffic growth

Enav SpA reported its financial results for the third quarter of 2025, showcasing a robust financial performance with significant improvements in cash flow and traffic growth. The company’s stock experienced a modest increase, rising 1.34% to close at €4.49. Enav’s earnings per share (EPS) and revenue forecasts were not explicitly provided in the earnings call summary, but the company’s strategic advancements and solid financial metrics contributed to a positive market reaction.

Key Takeaways

• Enav reported total revenues of €748.4 million for the first nine months of 2025.
• The company achieved an EBITDA of €180 million, marking a significant increase compared to the first half of 2025.
• Enav reduced its net debt by 21% to €205 million.
• The stock price rose by 1.34% following the earnings announcement.

Company Performance

Enav demonstrated strong performance in Q3 2025, with notable improvements in revenue and cash flow. The company leveraged its operational efficiency to achieve a significant reduction in net debt and enhance its cash flow. Enav’s strategic focus on innovation and market expansion, particularly in the international arena, contributed to its competitive edge.

Financial Highlights

• Total Revenues: €748.4 million for the first nine months of 2025.
• EBITDA: €180 million, representing a 2.6x increase over the first half of 2025.
• Net Result: €6.6 million.
• Net Debt: €205 million, a 21% reduction compared to December 31, 2024.
• Operating Cash Flow: €251.5 million.
• Free Cash Flow: €197.6 million.

Market Reaction

Following the earnings release, Enav’s stock rose by 1.34%, reaching €4.49. The stock has shown resilience, trading near its 52-week high of €4.64. The positive market reaction reflects investor confidence in Enav’s financial health and strategic direction.

Outlook & Guidance

Enav maintained its full-year EBITDA guidance and expects free cash flow to reach €240 million by year-end. The company anticipates a 3% traffic growth in 2026 and is exploring potential mergers and acquisitions in the drones sector, which could further bolster its market position.

Executive Commentary

CEO Pasqualino Monti highlighted Enav’s leadership in service quality, stating, "Nine months results confirm our leadership in quality of service." CFO Luca Colman emphasized cost management, noting, "We are fully under control of the cost level." Monti also indicated progress in discussions for potential acquisitions in the drones business.

Risks and Challenges

• Market Saturation: Enav faces potential challenges in maintaining growth amid market saturation in certain regions.
• Traffic Slowdown: A slowdown in traffic, particularly noted in September, could impact future revenue.
• Personnel Costs: Rising personnel costs, which increased by 4.4%, may affect profitability.
• Regulatory Changes: Potential regulatory changes in the aviation sector could pose operational challenges.
• Economic Uncertainty: Broader economic uncertainties could impact demand for air navigation services.

Q&A

During the Q&A session, analysts inquired about the impact of traffic slowdown and the company’s hiring plans. Enav plans to hire 86 technical personnel and controllers, indicating a focus on strengthening its operational capabilities. Additionally, the company’s exploration of M&A opportunities in the drones sector was a topic of interest, reflecting its strategic intent to diversify and innovate.

Enav’s Q3 2025 results underscore its robust financial health and strategic foresight in navigating industry challenges and opportunities.

Full transcript - Enav SpA (ENAV) Q3 2025:

Conference Operator, CorusCall: Good afternoon. This is the CorusCall conference operator. Welcome and thank you for joining the ENAV Nine Months 2025 Consolidated Results Conference Call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal the operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Fabrizio Ragnacci, Head of Investor Relations. Please go ahead, sir.

Fabrizio Ragnacci, Head of Investor Relations, ENAV: Good afternoon, ladies and gentlemen, and welcome to the Nine Months 2025 Results Presentation, which will be hosted by our CEO, Pasqualino Monti, and our CFO, Luca Colman. We will be providing some highlights of the period, and then the management will walk you through the operational and financial performance for the group. Following the presentation, we will have the usual Q&A session. Before we start, let me remind you that media can be connected to both the presentation and the Q&A session. Thank you, and now I hand over to Pasqualino for his closing remarks.

Pasqualino Monti, CEO, ENAV: Thank you, Fabrizio. I will start with the key highlights of the nine months of 2025. The Italian airspace, mainly thanks to its efficiency level, marked another quarter of higher traffic growth compared to the rest of Europe and the peer group. In this environment of prolonged record growth, ENAV confirmed its best-in-class operating performance. After the peak summer season, the average delay per flight stands at 0.014 minutes, almost negligible when compared with the threshold for the capacity bonus set at 0.14 minutes per flight. Financial performance continues to be solid. Both EBITDA and free cash flow increased significantly in the quarter and are well on track to deliver full-year guidance. In the non-regulated business, we have made further progress with the agreement for the implementation of a remote digital tower in Malaysia.

This agreement shows the commercial validity of our expertise and signals the potential in terms of value pool we can address in the non-regulated segment. Despite the headwind on traffic levels, our operational and financial delivery position us well on track to reach the guidance for 2025, which was updated last July. I hand over to the CFO.

Fabrizio Ragnacci, Head of Investor Relations, ENAV: Thank you, Pasqualino, and good afternoon, everybody. Let’s start with the traffic. Overall, the growth trend remains solid, even if at a slightly lower pace versus the first half of 2025. This is mainly a consequence of the slowdown in national traffic for both en route and terminal. Let’s take a closer look at the evolution of en route and terminal. With the en route service unit driven by overflight and international, they are up by 5.9%, confirming the strongest performance among the main European countries included in the peer group. Terminal grew by 3.3% versus previous year, largely driven by the positive contribution of international traffic, which accounted for almost 70% of the total, and offset the impact from lower national traffic that affected the mainly terminal charging zone one. Let’s move now to the economic results, starting with revenues. Total revenues in the period reached EUR 748.4 million.

Performance in the core business was solid. En route revenues grew by 16% year on year. Terminal was flat despite the impact from lower national traffic levels. After the negative impact associated with the reversal of balance and minus two, worth around EUR 79 million, net regulated revenues were equal to EUR 10.4 million. Non-regulated business recorded revenues of EUR 22 million, down year on year as the commercial activities are more skewed towards the last quarter of the year. Balance for the period accounted for a negative EUR 29.1 million, mainly driven by the balance accrued in 2024 related to inflation, which has been reset in 2025 for the start of the new regulatory period, impacting for about EUR 50 million.

We have the negative balance of EUR 3.3 million associated with a delta between the level of costs for Eurocontrol that was included in the 2024 tariff and the actual costs of the agency in 2024. Moving to costs on slide five, total operating costs reached EUR 568 million, up by 3.8%, driven mainly by the increase of personnel costs, up by 4.4%, as the growth of other costs is smoothed by efforts on efficiency. Personnel costs reached EUR 467 million as a consequence of higher fixed salaries, mainly linked to the contractual inflation adjustment, and the increase of the variable component, mainly driven by the operational needs associated with the summer season. Other operating costs are up by 3.1%, mainly due to an increase in energy costs, in line with the dynamics observed in the previous quarter. Moving on to slide six on EBITDA.

EBITDA for the period amounted to EUR 180 million, with a remarkable 2.6 times increase versus the first half of 2025. As said, net regulated revenues contributed positively for EUR 10.4 million. Balance dynamics impacted negatively for EUR 29.1 million overall, driven by the substantial absence of positive balance generation in 2025 as the first year of the new regulatory period. Non-regulated business contributed for a negative EUR 3.6 million as the business is poised to deliver results in the last quarter of the year. Our focus on cost efficiency drove a reduction of costs worth around EUR 20 million. On the back of our sound delivery, the visibility we have over the coming weeks, as well as the managerial actions we are putting in place to tackle headwinds on traffic, we are confident to reach the 2025 guidance for EBITDA. Moving now to slide seven on the profit and loss statement.

DNA decreased by EUR 8.8 million to EUR 73.6 million as the negative impact from previous provisions of EUR 3.6 million. It is offset by the reduction in depreciation due to full depreciation of some assets. Net financial expenses of EUR 6.2 million show an improvement of approximately EUR 1 million, mainly due to lower financial expenses linked with the balance actualization mechanism and lower interest rate on debt. These effects partially offset the higher financial expenses related to the first tranche of the IEB loan. Net result amounted to EUR 6.6 million, marking a significant increase compared to the first half of 2025. Let’s move to net debt on slide eight. Net debt for the period is equal to EUR 205 million, down by EUR 53 million, or 21% versus December 31, 2024. The reduction is mainly associated with the high cash generation capabilities of the business.

Operating cash flow amounted to EUR 251.5 million, adding around EUR 155 million in the third quarter, marking a 1.3 times increase versus 2024. Free cash flow for the period was equal to EUR 197.6 million, confirming the high cash generation profile of the company and underpinning the expected level of free cash flow for the full year of EUR 240 million. I hand over to the CEO for some closing remarks.

Pasqualino Monti, CEO, ENAV: Thank you, Luca. Nine months results confirm our leadership in quality of service and the capability of the company to successfully manage the airspace in a record-growing environment. Our focus on efficiencies is visible and ensures full control and optimization of the cost curve. Cash generation is strong and accelerated further in the third quarter, bringing us closer to the expected level for the full year of EUR 240 million free cash flow. On the basis of the visibility we have on the rest of the year, as well as the managerial actions we are putting in place, we are fully on track to meet the guidance range that we have upgraded last July, despite the headwinds on traffic experienced in the last two months. Thank you. Now let’s open the Q&A session.

Fabrizio Ragnacci, Head of Investor Relations, ENAV: Thank you. Thank you, Pasqualino. Thank you, Luca. Operator, if you could please open up the line for those that want to ask questions. We are here.

Conference Operator, CorusCall: Excuse me. This is the CorusCall conference operator. We will now begin the question-answer session. Anyone who wishes to ask a question may press star and one on the touch-tone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone who has a question may press star and one at this time. The first question is from Carlos Cabarracci of Kepler Cheuvreux. Please go ahead.

Carlos Cabarracci, Analyst, Kepler Cheuvreux: Hello, Luca, Fabrizio. Thank you for the presentation and for taking my questions. Two from my side. The first clarification related to the punctuality performance bonus. Pasqualino, you’ve mentioned in the press release that you are very confident you will obtain this bonus by year-end. If I recall correctly, in July, you mentioned that it would have an impact of EUR 30 million. Could you please clarify if those EUR 30 million were already included in July’s EBITDA guidance, or if they will be on top? Second, related to traffic, Q3 has been weaker than expected, and you’ve passed from being 1% ahead of your control test estimates as of H1 to be in line by the end of September. Could you please comment a bit more about the moving parts of this and the performance and your expectations for the rest of the year? Thank you.

Fabrizio Ragnacci, Head of Investor Relations, ENAV: Thank you. Thank you, Carlos. Just give us a sec. We’ll be there with you.

Luca Colman, CFO, ENAV: Yes, Carlos, for what concerns the bonus, yes, that was already in the guidance. The EUR 30 million were already in the guidance. Upgrade, actually. Yes, the answer is yes. For the second point, we have seen in September, in September, a slowdown of the national traffic. There will be a slowdown of the national traffic, but we are waiting for October data to see what could be the real effect. At the moment, we are quite confident to reach for en route the budget, the target that we have given. The 6.2 for us is not an increase of traffic versus 2024. At the moment, it is still confirmed.

Carlos Cabarracci, Analyst, Kepler Cheuvreux: Okay. Thank you.

Conference Operator, CorusCall: The next question is from Alexandra Arzova of Equita. Please go ahead.

Alexandra Arzova, Analyst, Equita: Hi, good afternoon. Thank you for taking my questions. Two on my end. The first one is maybe a little bit of color of what we expect in 2026 on the cost side, since you seem very confident on the evolution till now. Maybe if you can provide some color on what is the growth of your cost base you expect in the next year. Linked to this, if I remember correctly, you mentioned that you expect to hire 400 new people, new controllers. When these hirings are going to take place, just to know how to model them, whether in 2026 or even beyond. The second one on M&A, again, if I remember correctly, recently, a few months ago, you mentioned some M&A coming potentially in the second half of 2025 in the non-regulated business. Any update on this? Thank you.

Fabrizio Ragnacci, Head of Investor Relations, ENAV: Thank you. Thank you, Alexandra.

Luca Colman, CFO, ENAV: Okay, Alexandra. For what concerns the first question about the cost evolution in 2026, now we are in the phase of budgeting. We are finalizing our budget. I can anticipate that we are fully under control of the cost level. What we are trying to do is not only to push on the cost efficient 2025, but also the forward looking in 2026 will be, I would say, quite good and quite aggressive. You should wait a couple of months. We will give you more detail for sure when we present the full year in March, 2025 full year, but we will give probably some other information in the further months as we will close the budget process. For what concerns the hiring people in the budget, in the future budget, still we are looking, we’re checking what is in the field.

In the business plan, we had already a number. There’s around 86 people, technical actually, and controllers. It is something that we will finalize in the budget in the next weeks. Sorry, if I may just add one thing. Always take in consideration when we get people inside, most of the time we have people that go on retirement. People who go on retirement often have quite higher salaries. The net impact, as we are seeing this month, actually is positive. Do not look only at the number of people coming, the new hiring, but just the total. You should wait a couple of weeks to have a full picture and a full impact of this double effect to measure then the real impact of the hiring of new people.

Pasqualino Monti, CEO, ENAV: On M&A, we are progressing well in the discussion with two targets in the drones business. We are aiming to get approval from the board on the transactions by year-end.

Conference Operator, CorusCall: Brilliant. Thank you. The next question is from Luca Baccocoli of Intesa Sanpaolo. Please go ahead.

Luca Baccocoli, Analyst, Intesa Sanpaolo: Hi, good afternoon, everyone. Two questions from my side. The first one regards the full year 2025 guidance. You are reiterating the range updated in July. I was wondering whether with the lower traffic growth in the last few months, you are now looking at the lower end of this guidance range. Related to the traffic prospect, Eurocontrol on the October update released weaker growth for this year and also on 2026. I was wondering how you see traffic evolving next year. The other question regards the contract you signed in Malaysia. I would like to know if you could provide us with more details on this contract in the remote control tower in terms of revenue stream that we should expect this year or maybe starting from 2026. Thank you.

Fabrizio Ragnacci, Head of Investor Relations, ENAV: Thank you. Thank you, Luca.

Luca Colman, CFO, ENAV: Okay. For what concerns the first question, yeah, the traffic is a bit lower, as you said before. We still are in our guidance for that. We are pushing the cost, actually. We are in part of the range for the traffic. On the other side, we are pushing a lot on the cost saving, and we probably may overperform on that area. Still, the EBITDA impact could be at the moment even neutral of the lower traffic. Let’s wait a couple of months to understand how the traffic will go also in October, November, and December. We have good levels on cost, good optionalities on the cost side that we are looking at and managing. For what concerns the traffic, Eurocontrol, yes, says 5.6% for en route. At the moment, as you know, we have 5.9% as year-to-date.

We believe that by the end of the year, maybe Eurocontrol could have been a little bit too, looking for the English name, a little bit too prudential, conservative. At the moment, as I said, 5.9% is year-to-date, a range, an area around 6%, 6 point something that could be the, I mean, at the moment, what we have in our mind. Let’s see what will be October, November, December in terms of traffic volume, and we can be more precise. Okay. 2026, at the moment, I don’t know if that was part of the question. We still confirm the 3% that is more or less the one that Eurocontrol also has shown. We don’t see particular impact in the next year at the moment.

Pasqualino Monti, CEO, ENAV: On Digital Tower Malaysia, the project has been kicked off at the beginning of November, and we’ll have a duration of four years. The contract is worth around EUR 5.1 million for us. Out of this amount, cash-in will happen in 2026 and 2027 for more than 95% of the total. The remaining portion will be split equally between 2028 and 2029.

Luca Baccocoli, Analyst, Intesa Sanpaolo: Okay. Great. Thank you for the clarifications.

Conference Operator, CorusCall: There are no more questions registered at this time.

Fabrizio Ragnacci, Head of Investor Relations, ENAV: Okay. If there are no questions, I think we can close up the call. Thanks to everybody who have attended the call. Thanks to our CEO and CFO, and have a great day.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.