5% EBITDA beat driven by strong performance in Spain and better cost evolution OandL REVPAR reached EUR128 in 2Q 25 (+3.6% YoY), mainly driven by growth in Spain (+5.8%) and Europe (+4.7%). EBITDA was up 8% YoY, 4.8% above consensus estimates, with margins at 28.2%, up c.100bps YoY. Melia reported a very positive FCF figure, with EUR67m generated in Q2, driving net debt down to EUR2,208m, below consensus estimates of EUR2,220m. Outlook: more upbeat than peers Q3 is expected to follow similar trends as Q2, with Spain being the top contributor thanks to mid-single digit growth in rates YoY. In contrast, EMEA points to weakening results YoY, impacted by the Euros and the Olympic Games, both held last year. America is showing a recovery thanks to volumes picking up in Mexico (MICE recovering) and better air connectivity in the Dominican Republic. Key takeaways from the call 1) FY25 guidance of mid-single digit REVPAR growth reiterated; new target provided of EBITDA margin expanding 100bps YoY in 2025. 2) CF generation to be around EUR200m excluding dividends and equity investments, supported by the reduction of financial expenses YoY. 3) Melia continues to focus on cost evolution, though the new collective agreement signed in the Balearic Islands has been slightly worse than expected. 4) US demand to EU is strong with volumes up 6-7% YoY. 5) Melia is actively looking for growth opportunities. Outperform reiterated; TP raised to EUR9.7 We raise our EBITDA by 6% on average over 2025-26 on better cost evolution. As a result, our TP is lifted to EUR9.7 (from EUR9.2). We reiterate our positive view on Melia. Our investment case has started to pay off over the last few months thanks to REVPAR growing steadily in Europe, CF generation improving significantly, and investors starting to recognise the attractiveness of Melia''s FCF yield relative to peers. We reiterate our Outperform rating.