Air Global PLC Ordinary Shares Barclays 19th Annual Global Consumer Staples Conference

I'm Pallav Mittal, Head of Global Tobacco at Barclays. I'm thrilled to have the management team from AIR Global here with me, Stuart Brazier, the CEO, Bas Lotfy, the CFO, and Gaurav Jain, the Head of Corporate Strategy and IR. Thank you so much for giving us the opportunity to host you. Just for some context, AIR Global listed on the Nasdaq Stock Market via SPAC deal earlier this year in May, and it currently has an EV of $1.4 billion and trades at 12 times P/E, eight times EV/EBITDA, and a 9% free cash flow yield. We have an overweight rating and a $10 price target on AIR Global. I think Stuart and Bas, you have some opening comments before we get into Q&A.

So over to you. Opening comments?

You could start with a brief history.

Oh, a brief history. on AIR Global and your journey towards the IPO.

Okay, sure. I have been with the business now for 8 years, 5 years as the CFO and nearly 3 years now as the CEO. Prior to that, I was with British American Tobacco for nearly 23 years in the U.K., but also spent 15 years overseas, Eastern Europe, Asia, Africa. The last role I did with BAT, I was the head of finance for the European and North African division. Little history on the company. The company began back in 1999 in a place called Ajman in the United Arab Emirates. It was a Syrian couple, actually, who started making Al Fakher shisha. Over a number of years, they gained quite a following. They gained a following because of the unique flavors and the quality of the product.

If you roll forward to 2006, there was a listed Jordanian conglomerate called ICO. A major shareholder in ICO was a Jordanian family called the Fakhouri, who had previously had the license to manufacture Marlboro in Jordan. That license had recently been taken back by PMI. One of the sons, Samer Fakhouri, was a very keen shisha consumer. His favorite brand was Al Fakher. For many years, he had thought about going into the shisha business. For many years, he had been trying to replicate this particular product, and he was not successful. He decided to buy the company. They bought the company through ICO, and then it became part of this larger group. Over the next 13, 14 years, the popularity of this brand, the popularity of this product, really grew around the world.

Today, Kingsway Capital are a significant investor in our business. They initially invested in the company, I think, back in 2015. You then began to have an internationalization of the shareholder unit. Once Kingsway had control of the business, they then began to internationalize the management, which is when they begin to bring in people from multinationals as they had aspirations to grow this into a multinational business. In 2020, by that time, Al Fakher was, I think, about 98% of the revenue of ICO, and we were able to take the company private. Since that time, bringing capability into the business, putting the right systems, the right processes, building our organization in key markets such as the U.S., such as Saudi, such as Europe. As you say, we were then able to go public again in the middle of this year.

Here we are today, that's a brief history of AIR.

Bas. I myself joined AIR almost seven years ago.

Like Stuart, I had 23 years of BAT experience in various finance roles, including the Middle East region and last role being in Northern Europe. I came into the company through these five, six years of transformation as corporate finance director, then I took over from Stuart two and a half years ago as CFO when he became CEO.

Sure. At your first results since listing, which were for the first half of 2026, you laid out guidance for 2026 and also gave some medium-term guidance.

Can you please summarize the key elements of this fiscal year and the medium-term guidance?

Sure. Yeah. Well, it has been quite a busy first 6 months of the year. People might not be aware that our head office is based in Dubai, and we have a couple of large factories in Dubai as well. Given the Middle East conflict, obviously we had some supply chain challenges at the back end of February and through the rest of Q1. That meant that we had to establish new supply chains, both into the UAE, but also getting finished product out of the UAE. The employees, the team, did a wonderful job to very quickly establish those. I think that showed the great resilience and capability of the business. Like many of these things, you come out of it a lot stronger than you actually went in.

March and the first half of April were challenging in terms of shipments. But we were able to really accelerate those from the second half of April and through the rest of Q2. For the half year versus the same period last year, we managed to actually grow revenues 3.7%. Volumes were down because of supply constraints, and we could not quite catch up to the demand that remained robust throughout the period. However, we managed to increase revenues through a 14% price mix variance. The great thing about our category is it is social, it is occasional, and it is pretty price inelastic. We were able to pass on the cost inflation that we were experiencing because of the supply chain to our distributors, to our customers, who were very keen to have the product and ensure that they were able to supply their customers.