Flughafen Wien AG

Therefore, net profit went up 58.5 to 173. And after non-controlling interest, it's at 157. This is on the background of increased passenger volume by 30%, but less growing flight movements, only 21%. which shows that the stress for the infrastructure is not as big as it seems from the passenger side and as i already said good growth in incentive hospitality in parking fees and also in our income of our office buildings and other rentals. Especially positive was the development in Malta, which is now already clearly above 2019. The interest we received is growing in line with rising interest rates and on the other hand we are constantly lowering expenses for interest because we are paying back the EIB loan regularly with 25 million per year and we will repay an extra portion in these days of 50 million uh so to lower the overall outstanding depth there on the side of the expenses we see that consumables and services used went up 34 percent personal expenses went up 32.8 percent that's very substantial and clearly reflects the situation after COVID, after short work, and it is also very heavily triggered by the high inflation rates that have contributed to additional wage increases. You might wonder why you saw a reduction of personal expenses from Q2 to Q3. These are some specific effects, mainly driven by two factors. One is the increasing interest rate. which is affecting the provisions. And secondly, we had provisions for underutilization that have been consumed. And there was also more discipline by taking holidays, so the respective provisions could also be lowered.

Sorry, I was interrupted.

If you look at the other operating expenses, they went up 42%. And this is in line more or less with the growth in traffic and all the expenses that are related to that. So in total, we see a slight decrease in EBITDA margin, but still with 47.5%, it's very fine. And we see a slight improvement in EBIT margin from 34.9 to 33.6. So overall, we had a high degree of cost discipline and we mainly profited from lower energy expenses due to the fact that we had our own production and especially that we have bought high Part of our electricity needs already in 2018, so at very, very low prices. Yet. To the situation now. We had the fortunately. A very good development in our cash flow.

So.

All. If you look at the free cash flow, it's positive with 26.8 million. Cash flow from operating activities is 286. APEX went up from 22, but is lower than budgeted for 23. But we will see an increase in the last quarter. due to the fact that some of the projects will be finalized at the end of the year, especially also in Malta. So finally, we think we will end up somewhere at 100 million plus minus in overall capex. Given all that, our net liquidity position improved, will now melt down. due to the fact of the repayment of our EIB loan. The final decision for the bigger portion of 150 that is still outstanding has yet not been made. Whether we will repay it now or let it as it is, the decision can be expected in the last days of 2023. there will be the next possibility to check and then decide what to do. If you look at our comparison, Coup 1-3-23 to the same period in 2019, you see that we had slightly lower passenger numbers, but substantially improved revenues, EBITDA and net profit. So, overall, I think we can point out that this is a very favourable development. The financial guidance for the full year 2023 uh provides what we already said we will end up substantially above our initial guidance of 150 million in in that net result and also revenues and ebda should be substantially above the initial guidance the investment volume will be somewhere around 100 media. So that's from my part and I hand over to Julian Yeager for traffic results.

Sorry.

Hi, good afternoon. Yeah, I will continue with the traffic results. As Günter said, I think we're looking at an excellent third quarter. Summer was really, really strong. October continued to be strong. So overall, if you look at the group figures for the first nine months of this year, we were 30%. above 22. We were in the group 3.6% below 2019, overall 29 million passengers in the group. In October, in Vienna, we had 2.7 million passengers. Malta, 800,000 passengers. Kosice, 40,000 passengers overall, 3.6%. In the group very close to 2019 figures, just 1% below. In Vienna, 3.8% below. And Malta and Kosice significantly above the 2019 figures. So overall, I think a very positive result. If you're looking now a bit into November and December, don't be surprised if the comparison to 2019 is getting a bit weaker. This was expected and this has to be expected because 2019 was a very uneven year in terms of passenger distribution. As you might recall, low-cost carriers started to grow really strong in summer. So we had a relatively weak start in 2019 and a very strong final quarter. So don't be surprised if the gap towards 2019 in Vienna is widening a bit in November and December of this year. I think what's still a very positive trend is that flight movements are 70% in Vienna below 2019, passenger numbers 6% below 2019. So we see a substantially higher load factor, 3.6% each points higher than in 2019, 3.9% each points higher than in 22. So I think this is overall very positive. October is a load factor of 80%, slightly below the 2022 figures, but still above 2019. So overall, I think this is a development. Bigger planes, fuller planes, high airfares. So I think this is a development we can be quite happy with. Cargo is Decreasing a bit compared to 2022. Obviously, in the aviation industry, this is often seen as a, you know, as a parameter for overall economic activities. And there might be a bit of an indication of a weakening economy and weakening passenger demand. We are 13% below 2019. This is pretty much in line with European development. Overall, I think we are even a bit better than the European average, but still it's below 2022. If we continue and compare ourselves a bit with other airports in terms of recovery, I think we can be quite happy with the recovery rate. If you look here, Q3 was in Vienna, essentially on 2019. In Molten and Kosice, above 2019. The first nine months of this year, 6% below 2019. In Vienna, 6% above 2019. In Molten, 9% above in Kosice. Comparing these figures with Frankfurt, Berlin, Munich, Yeah, Zurich is a bit closer to ourselves, Paris. So overall, I think what you can see mainly in the German-speaking countries, but as well in some parts of Western Europe, is that this is an excellent recovery, I would say. If you look at Southern Europe, the recovery there is extremely strong. So most of the of the Southern European airports above the 2019 levels and I think this is. Reflecting the very strong demand for leisure traffic and the weakened demand for for business traffic, both compared to 2019. If we have a look at. The world map and and how we We fail in the different areas of this world. I mean, I think we can be quite happy with the development in Europe. Obviously, Southern Europe, we are a bit happier than with the developments towards Germany. Germany overall is still 25% below 2019. Switzerland even 40%. I think this is a reflection of high ticket prices, relatively low capacity, and the weak demand for business traffic in this area. North America, strong growth compared to 22.

I'm sorry. Hello.

Do you hear me? Yeah. Yeah. We had a power cut here. I switched now to the iPod, so I should have enough power here. Yeah. As I said, North America, pretty close to 2019. Southern Europe above. Middle East, very strong, plus 50% compared to 2022. And Far East, very strong growth compared to 2022, but still quite below 2019. So I think this is the area where I would see quite some room for growth next year. I had a number of discussions with Chinese airlines in recent months. And overall, my impression is that the Chinese market is coming back, that the demand for traveling to Europe is coming back there. So I'm cautiously optimistic that we will see some new routes to China next year and in the following year. And overall, yeah, I think Asia will... come back next year. Although, and this has to be seen in perspective, in terms of the numbers, these are small numbers, but very important for duty-free, for retail in general, not necessarily making a big difference in terms of the overall numbers. Middle East was extremely strong this year. So we are 30% above the pre-COVID figures on Middle East. Obviously, we all know that now with the war in Gaza, they are quite, yeah, big clouds on the horizon. The only airline which is connecting Tel Aviv with Austria right now is El Al. So we have three or four weekly flights. Overall, Tel Aviv was 2% of our overall traffic. If you include transfer traffic, it's roughly 0.5% more, so 2.5%. And in particular, the traffic pattern, Israel, to the US via Vienna is very strong for Australian Airlines. So although the numbers don't seem to be that big, we have to appreciate that the revenue stream to our home carrier, Australian Airlines, are very substantial. And overall, I think this will help us give a number of airlines a headache if it should continue into the next year that Israel is essentially closed as a market. If you look at the different market shares, Austrian very static, I would say, close to 50% market share, Ryan near 20% market share, with a 7% market share, and then Roughly 70 airlines have together a market share of roughly 30%. So I think the mix here, Lufthansa Group above 50%, low-cost carriers a little bit below 30%, I think is a is a mix which is very good for us. So if I could conserve that, I would do that actually. And I think this is the reason why we have a significantly higher recovery rate than many other airports in the German speaking countries. Yeah, I don't want to spend too much time on the winter flight timetable. Austrian has 65 aircraft based in Vienna, Ryanair 18 based aircraft in Vienna, Visa 6 aircraft based in Vienna. Overall, I think winter flight plan looks good. And yeah, I'm quite happy with the development. Which brings me to the traffic forecast this year. And I think this is no surprise. Our best guess is that we will have more than 28.5 million passengers Let's wait a couple of weeks more to see if we have then 29 million passengers, maybe a bit more, maybe a bit less. But I think we can for sure look at a very strong year 2023. In the group, we expect more than 36.5 million passengers. If we dare to look into 2024 and we are doing budget right now, I think it's pretty difficult to really get the grip on 2024. I mean, the war in Ukraine is going on. It's not clear yet. how the situation in the Middle East will develop if this conflict gets out of hand and then even affects countries around Israel. I think the economic outlook is difficult as well. So there are quite some clouds on the horizon. And that's why we will need a couple of weeks more to have a better picture. I think winter looks good, but I have my doubts that summer 2023 will be as strong as this year because we had the highest load factors ever, actually, with very high ticket prices. So I think there's a lot of... uncertainty let's say about next year's developments but we will give you an outlook there in in january as usual a few words to to the different segments starting with the airport segment we have i think an excellent development in the airport segment Revenue up by 40% to €332 million. EBITDA up 53% to €155 million. And EBIT close to €100 million and the growth of 134%. Overall, mainly the passenger-related revenues had a very strong growth of 50%. So overall, I think a good development. What's good as well is we've got already approved our airport charges for next year. We will increase our airport charges by 9.7% according to the Austrian airport charges law, which stipulates that until 2026, we can use inflation to determine the growth of our airport charges, then we will go back to our formula. So overall, I think a very positive development in the airport segment. Handling and security, as I said in our last call in August, Q3 was strong and we now have a positive development compared to 2022 as well. plus 32% in revenue to 121 million euros. EBITDA is up 20%, 13 million euros on EBIT, 7.3 million, up 63%. So overall positive development. You might notice that freight or cargo revenues are up 10% despite a reduction in the volumes. And what's important as well is that we managed to extend some contracts. So we've extended the ground handling contract with Ryanair. This year, we managed to extend the contract with Vizier. So overall, and we managed to get a number of increases in running contracts. So overall, I think we can be optimistic. happy with the developments, although this is obviously with increasing staff costs, this will remain a very challenging environment. Coming to retail and properties, I think we had a very good development here as well. Center management and hospitality is up 50% in revenues and is overall 50% of the total revenue of this segment. Parking is plus 38%, 32% share of revenues in this segment. rentals are plus 13%, 17% share in the revenues. EBIT is 64 million euros, up 20% from last year. So overall, I think a positive development. And we saw so far in the first three quarters, passenger revenue rent, just looking at retail of roughly 2.1 euro. If you add lounge VIP advertising so the whole hospitality segment it's more than 3 euros and we aim or it's our ambition to increase the passenger revenue rate in retail by roughly 50% with the south extension maybe a bit more or that's at least the ambition but the target is to increase the passenger revenue rate at least by 50% when we have the the South extension up and running in 2027. So the 50% will be achieved maybe 28, 29 in the first full year of operation of the South extension. Malta, again, as Günter said, excellent results. Revenue up 37%, EBITDA 36%, EBIT 45%, close to 50 million euros. still a roughly 70-30 share airport and retail and properties. So overall, I think a very positive development. What I would see as positive as well is that there's now clarity about the future of the Maltese flag carrier Air Malta. They are flying until the 30th of March and then On the 31st of March, a new airline will start into operation. They will start with A320neo, which is essentially the same capacity as Malta has today. Bookings are possible on an ongoing basis. So I'm very happy that Malta reached an agreement with the European Commission and that there's now clarity about the future of the Maltese flag carrier. Yeah, that's it from my end. We will publish our traffic results on the 13th of December. We will publish our traffic results 23 and our outlook for 24 on the 18th of January. And on the 28th of February, we will release our full year results 23. So thanks a lot for your attention. And we are happy to take your questions now.

Yes, Sebastian, you're first. Let me first apologize that we lost the slides in the presentation, as I lost for a second electricity here in my room, and I had to restart the machine. But thanks God, everything working again. And yes, we have an order, Sebastian, first. Then I will take Henry and Vladimir, as it's indicated here in the room.

So, hello. May I start, or?

Here is Vladimira speaking.

When you're already on the line, please go ahead.

Just very quickly, with your nine months EBITDA and net profit above the original forecast and only one quarter left, maybe it would be time to give us at least some ranges where we should see your 2023 result. And in this context, I would like to also ask you, given the original guidance was that low, what went better than you expected? Which factors of the growth were of sustainable nature and which of them are maybe endangered going forward? And then one particular question related to the energy costs. You mentioned that you have reduction of energy costs. What is the relevance of energy cost in your total cost structure and how big savings you achieved through your own electricity generation? Thank you.

Yeah, starting with your last question, I mean, it's a little bit what you compare with what, but I would in general say that the composition of early purchasing electricity was the main factor because market prices have been fairly above 200 euros per megawatt hour and we had a very very low purchase price down in 2018. You might remember that at that time electricity was traded at around 50, maximum 60 euros. And the plus there is the tax you have to pay because you get delivered the electricity in Austria. And you can only order it in advance in Leipzig. So this has to be added. It was roughly 20 euros per megawatt hour last year. And our own production amounted to roughly 25% of total consumption. And insofar, these two components contributed to lower electricity prices overall than initially expected. District heating was more or less or even slightly above what we expected. That's totally driven by gas prices. And unfortunately, we cannot influence in any form the development of gas prices. So total energy costs should be somewhere at 40 million per year. And the savings, I have not a very exact figure, but maybe it's 25% or something. of total expenses for the first nine months. Your second question, I think the income side of 23 seems to be rather healthy and I would not see substantial deviations that are not sustainable. Except what I already explained, where we have provisions and where we had to use these provisions on the one hand, and on the side of the provisions for future personal costs, you see a clear development that rising interests are lowering the amount you have to provision for. as it was the country in the last years when we had very low interest rates and the provisions had to be increased. So this is somehow briefing with the interest rate level and is more or less relating to the interest rates. The rest I would say is very, very healthy. And in respect of energy, as you know, we are currently finalizing the construction of additional PV production so that we will go up to most likely 45% of total consumption in 2024 from our own production. But what we will not see in 2024 is the differential for electricity we bought in advance because this effect now is not valid anymore because we did not buy in advance in the period of COVID and the high uncertainty we had at that time. So I hope I could answer your question.

Maybe I continue very briefly regarding your question, what went different than expected? I think what we did not foresee was such a strong summer. After last summer, where we thought that there's a kind of rebound effect after COVID, and you all know the expression revenge travel, we did not expect that on top of that, these figures in 2022, summer 2023 would be even stronger. I think one major question mark is always the low-cost carriers. With the low-cost carriers, until very late, you don't know the capacity there. deploying at your airport because they are negotiating until the end, always putting pressure and a certain level of doubt. So I think those were the main things where we were in our projection more cautious and we are happy now that the development was so strong. And obviously, we don't know what of this development will be the same in 2024. pretty optimistic that the capacity from our three largest airlines will be similar to 2023, maybe a bit more, maybe a bit less, but no major changes. But obviously, I think the big question mark for 2024 is the demand from the passengers. If the airlines are in a position to push these high ticket prices still through in 2024, What happens if not? So I think this is the biggest question mark is load factor for next year.

And your question regarding full year's results. To explain why I'm a little bit hesitant to give a detailed number, because we are still opting for the repayment of the EIB loan. And if we would repay it fully, this would affect the results in Q4. And normally, Q4 is one of the weaker parts of the year. So, yes, you can expect some upside to the Q19 figures. But to what extent exactly? uh is depending on the fact whether we will repay the the remaining 150 million or not because i mean repaying it means a certain penalty to be paid and we are checking is it economically feasible or not and we will see how the conditions then end of december will be and this will affect the full year's result. But there will be, if not something totally unforeseeable happens, a plus to the results you see now. But how big this will be is related to this decision.

Okay, thank you. Sebastian, then it would come to you.

Okay, good afternoon. Thank you for the presentation. And maybe I continue with questions regarding the EIB loan. If you repay 50 billion, would that mean that it would be repaid two years earlier or would the repayments then be lower over the same period of time?

This would be lower over the full period because we have two trenches, 50 million and 150 million. And with the 50 million, the first tranche would would be closed. Why did we opt for this decision? Because the tranche for the 50 million has an interest rate that is 30 basis points lower than the other one. So it was a rational decision to take out the lower one. And we will now see how interest rates will develop and to what terms we get an offer for the early repayment of the rest.

Okay, thank you. My next question would be regarding investments, because for this year you stick to the 100 million you communicated earlier. Could you indicate where you're heading for in 2024?

We will give you the details mid-January. But you can assume it's more because now the process of building the south extension already started. But as normally, it's a step-by-step build up. And therefore, even in 24, we will not see total reversed situation so yes it will increase and the details we will we will give you in our conference mid-january okay thanks next question would be regarding the other operating expenses because looking at the first three quarters they were up um i think 42 percent you said but looking at

Q3 only, they were only up by 1 million, although revenues increased strongly. How is that?

Let's see. Papers. Rita, can you say something about that? Hello, can you hear me? Yes, we do.

So the operating expense last year for the same quarter was up by 10 million maintenance projects, which allow the same period. And this was compensated by some higher tax-driven expense, which is, for instance, the cleaning of the aircraft where we consume services, external services. for airline maintenance and higher expense for the launch turnover. And this is mainly the reason. And the other impact is economies of scale.

Hello?

Yes.

Can I just explain? Yes, that helps.

Thanks.

Okay, thank you.

One final question regarding dividends. Do you still target the payout ratio of over 60%?

Yes.

Okay, then that's it from my side and thank you for answering the question.

Thank you.

Bye.

Thank you, Sebastian. And now, Henry, it's your turn.

Hi, thank you everybody and congratulations on the fantastic results and Q3. Yeah, I have only a few follow-up questions also regarding the other operating expenses. In Q4 for this year, how do you see the other operating expenses develop? Do you see this on a similar level as Q3 this year or do you also expect it to rather decrease because of decreasing passenger volumes?

I would not foresee a substantial difference to last year. Okay. It should be slightly higher than last year.

Okay, that makes sense. And also a follow-up question on the aircraft or the airport fees. I didn't quite get the exact percentage that it's going to increase as of January. Do you have the number for me again, please?

Excuse me? Airport charges.

The airport charges. It increases 9.7%.

9.7%. Thank you. That's quite a big number. Yes, but it's reflecting inflation. I know. Okay, that's basically been it already. All the other questions have already been asked or answered already. Thank you. Thank you.

Thank you, guys. Any further questions?

Yes, may I jump in one more time? Of course. Regarding the winter flight plan and Q4, should we calculate in other incentives than before? Did they change anything with the new flight plan or are they the same over the full year?

I would not expect any changes, no. Okay, thank you very much. Okay. Final call for questions?

If not, then I thank you all for the participation, for your interest in the company, for your questions, for the good discussions this time, and apologize myself for the electricity problem I faced, but it can also be proof doing the call via Microsoft Teams as a demonstration of the lean setup of VN Airport, which is then also reflected in the margins. Have a nice afternoon. Thank you and goodbye.

Bye-bye. Thank you. Bye-bye. Goodbye.

Goodbye, thank you.