AIR Global’s Best-in-Class 1H Performance Amid Disruptions, 2H Recovery – Quarterly Update Report

Best-in-Class Execution Despite Supply Chain Disruption; 2H Recovery and NGC Progress Support Outlook. Valuation Remains Attractive.

Key Takeaways: Best-in-class execution supported 3.7% revenue growth and stable adj. EBITDA despite an FSM shipment decline during the Hormuz disruption. Americas led regional earnings growth, with adj. EBITDA up 17.2% and margin expanding to 46.3%, while MEAA remained resilient and Europe remained pressured. 2H26 expected to pivot to more volume-led growth as channel inventories normalize, with 2026 revenue guided +4-6% and adj. EBITDA growth of low-to-mid single digits. Crown Switch is the principal near-term NGC catalyst, backed by the $20 million Greentank investment, differentiated technology and a targeted U.S. commercialization strategy. Valuation remains compelling relative to core earnings resilience and visible recovery, with NGC optionality, deleveraging and potential shareholder returns providing additional upside.

Best-in-class execution supported 3.7% revenue growth and stable adj. EBITDA despite an FSM shipment decline during the Hormuz disruption.

Americas led regional earnings growth, with adj. EBITDA up 17.2% and margin expanding to 46.3%, while MEAA remained resilient and Europe remained pressured.

2H26 expected to pivot to more volume-led growth as channel inventories normalize, with 2026 revenue guided +4-6% and adj. EBITDA growth of low-to-mid single digits.

Crown Switch is the principal near-term NGC catalyst, backed by the $20 million Greentank investment, differentiated technology and a targeted U.S. commercialization strategy.

Valuation remains compelling relative to core earnings resilience and visible recovery, with NGC optionality, deleveraging and potential shareholder returns providing additional upside.

Best-in-class execution enabled AIIR to grow through a severe supply-chain disruption while protecting the underlying earnings base . Revenue rose 3.7% y/y to $206.9 million in 1H26 from $199.5 million, gross profit increased 2.4% to $116.8 million from $114.0 million, and adjusted EBITDA was stable at $71.7 million despite FSM shipment volumes declining 9.0%. Global Travel Retail volumes fell 46.5%, while FSM shipments excluding GTR declined 6.6%, reflecting the closure of the Strait of Hormuz, which historically carried approximately 70% of shipment volumes. The disruption was most acute in March, when shipment volumes declined 38.6%, before returning to growth in June. Importantly, customer purchase orders remained intact and wholesaler inventories declined, confirming that the shortfall reflected shipment availability rather than weaker end demand. Revenue growth and stable adjusted EBITDA through the disruption underscore the strength and resilience of a category-leading franchise with an estimated 36%-44% volume share across its operating markets.

Strong pricing power more than offset shipment pressure, supported by the category's relatively low consumer spend . FSM revenue increased 3.4% y/y to $204.7 million despite the 9.0% shipment decline, reflecting 14.0% price/mix growth as AIIR front-loaded 2026 pricing to offset higher logistics and raw-material costs and prioritized supply to higher-ASP markets. The ability to deliver double-digit price/mix without meaningful share erosion underscores the strength of the franchise, particularly given annual U.S. shisha spend of around $110 versus more than $2,000 for cigarettes, close to $1,000 for pod-based vapes and around $400 for nicotine pouches. This relatively low spend provides room to offset cost inflation through pricing without materially affecting affordability. The 14.0% 1H contribution should moderate in 2H as comparisons toughen and mix shifts toward lower-ASP markets, while AIIR expects approximately 4%-6%+ price/mix in a normal year, supported by category leadership, innovation and premiumization.