Flughafen Wien AG

Good afternoon. So welcome again, everybody, for the conference call regarding our full year 2024 numbers. With me now, CFO Mr. Ofner, guiding you through the results, and also COO Mr. Jaeger, giving more insights on recent traffic developments, the traffic outlook, and the developments in our business results. And I hand over to you, Mr. Ofner.

Yeah, good afternoon. And many thanks for your interest. We today published full year 24 results. And as you can follow on our slide, revenue went up to 1,052,000,000 plus 13%. EBDA at 442 plus 12.4%. And group net profit at 239 million plus 27%. And 46 million thereof comes from Malta International Airport. What underlines the importance of our subsidy in Malta International Airport for our business results. The good results enable us to do both, to increase our dividend to 1.65 per share plus 32 compared to last year, but also to expand our investments here on the Vienna airport. and therefore our CAPEX will go up from 200 million last year to roughly 300 million this year. We can do this CAPEX without borrowing, so we will finance it out of our own funds, and we foresee that we will see substantial investments also in the years to come, but on a pace that is not jeopardizing our results. If you look further down, one of the reasons for the positive result in 2024 is that our financial result converted into 15.5 million plus from minus 4 million in 2023. And the reason is that we repaid, as you remember, the EIB loan end of 2023. So in general, 2024 lays the basis, as you see in the following chart, for further growth and we see that aviation remains a growth factor and we will see growth also in the coming years. The chart also shows that we recovered fully from COVID times and are now given our results and EBITDA, even stronger than we have been in 2019. And the only major obstacle we see, despite the poor economic situation, is regulatory issues arising from Green Deal regulations on the European level. and I will come back to that issue a little bit later. So, given the situation of our expenses, you see that consumables and services used was more or less stable, reflecting the price stabilization of energy, especially we saw in 2024. Personal expenses went up 10.5%, which is the major part due to our new collective agreement of plus seven. And on the other hand, of the fact that we have 263 additional employees totaled for 2024, which was caused by the overall growth of 9%. And other expenses we see extensive maintenance work, runways, technology, Malta airport, And as one of the costs for the noise protection program of 23.9 million. And this program will be realized in the next eight years. And will hopefully bring some comfort to our neighbors. If we look at our cash flow situation, you see that the cash flow from operating activities went up 15% to $443 million due to the higher payout ratio of our dividend and additional capex. the free cash flow was reduced to 114 and you see on the other hand CapEx went up from 107 to 190 and net liquidity went up to 511 and also our equity rose by 7% to 1.667 so overall we see a very strong balance sheet and a very sound situation in regard of financing. Our balance sheet structure, I think compared 2019 to 2024, shows that our equity went up almost 300 million euros. And therefore, as I said, we have overcome the COVID problems even stronger than we have started. All that enables us to come to a record dividend, the highest ever. we had in our company of €1.65 per share, which equals a dividend yield of 3.2%. What is, I think, very, very fine, given the price increase of our share in the current periods. So one of the Factors we see for the future is that we will expand our operations here on Vienna Airport by constructing the south expansion of Terminal 3, which should bring additional revenue and profit once it's operational. We are in time and in budget. And we hope that we can open the Terminal 3 South extension in 2027. And from all what we know right now, we will be able to do it within budget and within the timeframe give up. Another expansion project is Office Park 4 expansion. Around 17,000 square meters of high quality office and conference space is planned. And a start of construction there should be in 2026. There are a lot of other projects. And we are also working alongside the project team for the third runway. and most likely we will see in 2026 how to move forward in regard of that project.

So what is the only real obstacle we see?

That's bad regulation from the European Union and especially in regard of sustainable aviation fuels. They are too expensive. The quantity is not what is needed. Rising CO2 pricing leads to higher ticket prices. and European airports and airlines have a substantial disadvantage competing with airlines and airports outside the European Union due to the current regulation. So I think it's very essential to cut all that counterproductive things and come back to a pragmatic form of regulation on an even level playing field with all competitors without abandoning the overall goal to reduce the CO2 footprint. what we also support but it's the wrong way now the European Union is trying to reach that goal and especially the expansion of emission certificate trading from 1st January 2027 has a high potential to steer inflation what would negatively affect the economic position of Europe. So let's hope that we get further successes there. I mean, you heard maybe that last week the European Commission changed the Lieferkettengesetz and has also stipulated to simplify ESG reporting within the next six months. So we have to work on these issues and I hope we get some success there. What drives me a little bit on the optimistic side is that exactly today Ursula von der Leyen, as the president of the European Commission, issued a statement that the regulation for the car industry will be substantially changed And the penalization that would be due to the fact that not enough electric vehicles have been sold will be abandoned. And it's one of the results of the threats from the U.S. So even if we don't agree with the things that are proposed from the U.S., In this case, it already had a positive effect, and I hope that what Mrs. van der Leyen said today is a positive signal also for these other issues that are not regulated in a sensible way. So let's continue with our airport city, which is, as all other parts of our company, is performing very well and growing quickly. So the latest acquisition is TUI. Austria, with its corporate headquarters, moving to our airport city. and two new space industry companies will start production at the airport city in the coming weeks. So it shows that we can further grow and therefore we expand our office part and are developing additional land for companies that want to operate at the airport. So let's move to our financial guidance for 2025. I think clouds have a little bit disappeared. Not only if we look out the window today here in Vienna, it's sunny and it's like a first spring day. It has also cleared up a little bit for our guidance. So, from today's perspective, I would assume that we are on the conservative side, and if things go as it seems, we could even be better than our initial and current guidance is. So, revenue will grow to at least 1 billion 80 million. EBITDA 44 or above, Group Net Profit 230 or above, CapEx approximately 300 million.

So that's from my side, and I hand over to Julian. Thank you, Günter.

I will focus on traffic development and the segment results in the next couple of minutes. As you know, 2024 was an absolute record in passenger numbers, cargo, seat load factor, now as well in terms of revenue and earnings. Overall, and I think this is a very positive that we saw a positive development throughout the company. The airport segment had the largest share of earnings with 41% of EBIT with 126 million. Handling and security was positive after the difficult COVID years and EBIT of 8.6 million. Retail and properties, a strong EBIT increase by 15.7% to 94 million. And Volta, as Guido mentioned, already contributes to 23% to the group EBIT. We expect slight growth in 2025. Essentially, the situation has not changed a lot since we met in January. So far the booking situation is good, so the airlines are quite happy with the early bookings and the same with the travel agents. They say the same, so it depends a lot on short-term bookings and the question is if we can repeat the Again, the high seat load factor we saw last summer, but overall I would expect from today's perspective a slight increase in passenger numbers this year. We are still proud of our high quality levels. We were the third most punctual airport within the airport group of airports with more than 25 million passengers. If you would just take the airports with more than 30 million passengers, we would even be the most punctual airport, and this is a way we want to continue. January was okay in terms of passenger traffic. Vienna with plus 3.3%. Malta strong, plus 9%, Kosice plus 22%, so overall in the Group we were up 4.8%. So, as expected, a good start into the new year, and essentially from summer Standard schedule, which starts in April on the decisive month of the year, will begin in terms of our passenger development. What is positive and encouraging was the strong growth to the Far East, 38%, North America, 11%. Germany, again, pretty weak with a decrease of 5%, so the German market is still suffering. let's continue i think i've said more or less everything i think what's what is positive for um for the summer schedule we have 195 destinations in the schedule uh we've got screwed a new destination with singapore new destinations from all Austrian Ryanair Wizz Air, EasyJet is coming again, Saldia reopens, Riyadh, Albania started again, Tirana route, Condor station, one aircraft in Vienna. So overall, I think the summer schedule looks pretty good. The decisive thing will be load factor. And obviously the geopolitical situation, Ukraine, Middle East, I think there's some upside potential. Let's see if this materializes in the course of this year. Let's continue with the airport segment. As I said, very positive, mainly driven by 18% plus in passenger related fees. We increased airport charges with January 1st by 4.6%. We introduced at the same time an incentive to drive or to give an incentive to grow more in winter, mainly for larger airlines. But overall, this is obviously some positive development this year. From next year on, we will be again in our old formula, so this will mean that we will have to reduce airport charges in January 2026, roughly as far as we can charge today in the same amount as we increased them this year.

If you look at our growth, I think compared to the other Lufthansa hubs, we are quite happy.

Zurich and Vienna ahead, Brussels, Munich and Frankfurt, they still are lagging behind the 2019 figures. And the same in the catchment area, really the largest airport in the catchment area, Budafest 17.6 million, Prague 16.4 million, Prague is over 4.9 million. So overall, I think a strong competitive position. I think will be positive is the new setting in our new government. I think the sentiment towards aviation in general will be much more positive than it used to be. We have a new minister from today, Peter Ranke. He was the the responsible city councillor for finance and economy, so he was in charge of the VNA for the investment of the city of Vienna as well, so I think he understands a lot the importance of aviation for the economy and for tourism in particular, so overall I think this should be, we should expect some support here in the future, significantly more support than in recent years.

As you just said, more or less everything regarding summer.

Last year was an absolute record for the Vienna tourism. I don't see any reason why this should not be repeated or even surpassed this year. So East Asia should come back. Whatever happens on a political level, still I think North America will be very strong. So I think that should all work very well. We are preparing ourselves for a strong summer. We will get additional employees. To a certain extent to... not additional, but just replace others we have left over winter. We are ongoing to modernize the terminal infrastructure, want to keep up our high service quality to overall streams look pretty good for the summer season. To the handling and security services, what was important there that we managed last year to extend the Lufthansa cargo and the Korean cargo contracts. The ramp handling still has a market share of 89%. Last year, an important driver of the result was cargo handling, plus 27%. nearly 300,000 tons of cargo here, obviously as well one driver of growth, Chinese e-commerce. So I think the most important thing is to keep quality high, to retain our strong market position and improve results. in the future, although this is obviously the toughest field here and it's not possible to just increase prices by inflation. So it will still be a battle, but I'm very happy with 2024 and I'm optimistic for 2025 to have a positive contribution to overall results here as well. One, just on the sideline, we started to build airport partnerships last year, so we signed partnership agreements with Incheon Airport, with Korean Air, with Shenzhen Airport, with Sao Paulo Airport, not only to do an employee exchange, which we just started now with Incheon, to enable some knowledge transfer, and promote innovation and best practices, but mainly to develop together the business, to do route development together, to do cargo development together. So this is something we will continue doing in 2025. And I think the extension of the Corelia cargo contract was already one positive sign or one positive outcome of this cooperation. Coming to retail and properties here, the revenue distribution is 52% coming from center management and hospitality, plus 13%. Parking is a 30% share, plus 9% rentals, plus 9% and an 18% share. From center management, F&B and lounges contributed and marketing contributed to the positive results. We opened an increased new duty-free shop in Terminal 1, so all these things worked very well. Rental income was up 9% to 36 million. And what is important is that we started this year the tenant acquisition, which is in full swing and I expect many contracts to be signed until the end of this year. So we expect proposals from a lot of interested parties until the end of April. We will look for old or new partners, mainly in the F&B field, and we want to focus on Austrian cuisine, and we are targeting international premium and luxury brands. It will be a completely new retail environment, facades up to 8 meters, so we hope that we will be in a position as well to attract international strong brands. And overall, it's very positive that everything is on track, both in timing and in the costs. And we are looking forward to open the southern extension of Terminal 3 in the first half of 2027. 7,000 square meters additional space, 10,000 square meters retail and F&B space, new centralized security checkpoints, additional data areas, new lounges. So overall, this will be a huge improvement for our passengers. Last but not least, Malta. I told you they're growing again very strong early this year. Last year was an absolute record with 70 million EBIT, 23% contribution to the group's EBIT. I think the most important thing here is to invest now and get this investment done quickly on time. Within budget, we have to extend the terminal. This is urgently needed. The terminal environment has not significantly changed in the last 13 years, so we need to cater for future growth. We are investing now in an additional apron, which is already nearly finished. We will invest in the airport city of Malta, Skyparks 2, so additional office space, a new hotel, so everything looks pretty well set, and I'm sure Malta will contribute even more in the future to our overall results. That's it from our end, so we're looking forward for your questions. Thank you.

Thank you very much. Shroom is open for questions now. Hands are already raised. Henry, if you go ahead, raising the hand first.

Yeah, sure. Thank you. And thank you for your presentation. Congrats on surpassing the billion-euro threshold. I have a couple of questions. First, to Mr. Hofner, please elaborate a little bit more on the strong Q4 operating cash flow. I was positively surprised by the cash generation. And it was nearly double that of EBITDA. So maybe there's a working capital swing that we are missing or anything else in the operating cash flow statement. It would be nice to have some more color on this. And also, I noticed that you invested some of that operating cash or the pre-cash flow in time deposits. I would like to know what current interest rate are you receiving there? So how will it impact the financial result at 2025, 2026? And also maybe a question for both of you regarding the dividend policy. If we assume that you hit your guidance at maybe 230 million net profit for minorities, that would be a little bit below that of 2024. Would you then adjust your dividend payout ratio to keep the dividend as such stable? Or would you stick to your payout ratio and then adjust the dividend per share? maybe this is a i don't want to know a number but i want to know the policy what you're thinking of when you propose the dividend and then two more questions uh one is for politics for mr um you just have received a new um government and we also on the brink of the new government germany we've we've seen over the last few years that the travel to germany and from germany has decreased or is not on the levels that it's been before. Maybe because two conservative parties are then leading, there might be some legislation changes that you could expect or if you hope for anything that you maybe sense coming from the elections in Austria and Germany. I mean, Germany has a big voice in Europe. Maybe it could also hint towards how policy on the EU level might also influence improve the situation for air travel in Europe as such. And one more question regarding the south expansion. We talk about the south expansion only from a retail and property side, but is there maybe something we're missing in terms of capacity improvement or revenue contribution from the air side? I'm thinking of maybe less bus transfer, more direct access to the airplane. Maybe that comes in with higher revenues or higher

um aircraft fees or whatsoever maybe there's something that we're missing but maybe not thank you maybe if gutter doesn't mind i'll start with the last two questions um to start with your last question um there will be more capacity but but more bus capacity so uh which to be honest from from from a financial point of view is no difference. So either the airline has to pay for the bus or they have to pay for the pier finger. So that doesn't really make a difference. But in the south extension, there's no space for additional pier fingers. That's why when we finish the south extension, we have the intention, if everything goes well, to extend Pier North from Terminal 3 and we would add five to six additional pier fingers, but that would be a future development. We have not done the planning yet, so we don't have cost assumptions yet, but this should happen in the year 28. So, we will have more capacity in terms of bus gates, we will have more capacity for security, and we will have significantly more lounge space, retail space. So, these are the main features of Gestalt's extension. Regarding the new government, I think for Austria I would not expect a huge change in legislation. So I think we are quite happy with the environment here in Austria. I wouldn't assume that our tax on tickets, which is significantly lower than in Germany, would change. So we are relatively happy with the environment. I think what we need is a push in Brussels for a change in legislation, because I think 3455, if it would be executed as it was decided in the past, I think this would bring a lot of trouble and disadvantages for European air travel. I don't want to judge the situation in Germany, but I think in Germany probably there is a cost issue. So in terms of Luftfahrtsteuer, I think air navigation control is even more expensive than in Austria. So I think there's a cost perspective to it. And I just can hope that this will be taken by the new government in Germany and that together the Austrian-German government will put pressure on Brussels to adjust the legislation here to make the European aviation industry overall more competitive. And I think in particular the DAC region, I think this ticket prices are very high, which is good for airlines, but we probably would need a bit more competition to drive passenger numbers in this area.

Yeah, regarding your question for our financial reserves, there is a mixture of equity and mostly short-term deposits and Currently we are at around 3.5% in interest and for sure if the ECB is further lowering interest rates this will be slightly go down in the years to come. And overall I think you have to put in mind that we had a very substantial dividend increase already in 2024 and the payout for CapEx. And given our reserves at the end, of putting that together gives you the full picture. But if you are interested in further details, I think we can provide it, Bernd can provide you outside of our... In regard of the dividend policy, I'm very convinced that that in any case, we should have at least the same level we see now for 2024, so 1.65. And given that we have more traffic and business is going better, and this will be also substantially influenced by geopolitical developments, it could be more. I mean, if in fact there would be a ceasefire or even a peace agreement in Ukraine, this would substantially support our business case and the same could be true for Middle East. So, if it be successful to come to a peace agreement there, it would also support traffic here in Vienna. So, luckily, I think we are not so directly affected by the overall economic situation, which still is gloomy, and what we see is that people are trying to fulfill their holiday dreams, despite the overall economic situation, and I don't think that this will be substantially changed in 2025, so we have no indication for that. If the surveys are true, that are published by the travel agencies, pre-bookings are very, very fine, and Given all that, finally it could turn out that our guidance was on the conservative side and we will come out better than expected.

Henry, does this answer your questions?

Regarding cash flow, I come back to you later, but I think the non-cash items released in slide number four on the expenses explain part of it. And if there's something else, I come back to you. Thanks. And so we move on with Talos.

Hi, everyone. Thank you for the presentation and for taking my questions. I have two. First, I was wondering if you could provide us with the latest update on the third runway process. And secondly, and I know that this is mostly wishful thinking, but given that there are major investments coming to Vienna, is there a way to remunerate your regulated CapEx?

Thank you.

Yeah, in regard of third runway, as I said, I mean, our teams are currently working. and hopefully we will shed more light on how to move forward in the next year, so in 2026. On the legal side, there is still pending the decision of the highest administrative court in regard of construction period and So far we have fortunately no indication when they will come to a decision. So this could take substantial time throughout at least this year. And last but not least, any investment must be economically viable. So these are the criteria we are working on. And in regard of tariffs in general, all burdens that are put on us in a legislative manner can be included into the tariffs. So, for example, entry exit system installations. are included in the tariffs. The south extension is a decision we took on our own and is commercially viable and will not be included in the tariff system. So it depends what is the reason for specific costs and if they are legally binding then we can include them into the tariff system.

Quite clear. Thank you.

Vladimir, please go ahead.

Yes, hello, good afternoon once again. Just two very brief questions. First one would be related to your personal costs. If you could indicate what are your assumptions for this year? There is usually a salary increase linked to collective bargaining process. So what should we expect? You also said that your headcount is going higher. So overall, what could be growth in personal costs in 2025? And next question would be related to this noise protection program. Was it kind of one-off or do we expect that there will be maybe more kind of related costs coming in future? Thank you.

Yeah, the basis for the collective bargaining process is inflation from 1st of April 24 to 31st of March 25. So currently we are around 2.6% something. Unfortunately, January and February now are a little bit higher. So February was 3.3%, January 3.2%. So we will end up somewhere between 2.5% and 2.7%. And normally, this is the basis for negotiations. So we could end up somewhere in the region of 3%. And in regard of workforce, I mean, technically, an increase is already implemented because people who started, for example, in October or in November, are only very slightly affecting numbers in 2024, but are fully accounted for in 2025. So we will see some increase in 2025 in workforce, but it will finally depend on the development of passenger figures and and cargo and traffic growth. Because without growth, we would be very conservative and will not allow substantial increases. Once we grow, we will need additional headcounts. So this is very much depending on the overall development. But what I think can be said for sure is that the overall growth rate 25 will be below the growth rate of 24.

Thank you.

And then the question related to this noise program, is it pure one-off or should we expect maybe going forward?

It's a one-off and maybe not 100% of it will be served. So that's maybe a little bit of an upside. If the investment finally is lower than the sum we stipulated, from today's perspective, it cannot be higher, because that's the maximum we stipulated. And in case that not all people that are eligible opt for it and invest on their side, the overall expenses could be slightly lower than the provision is made.

Pretty much for clarification.

Yeah, but this will be corrected then in the course of the years. Any further questions? Filip, now your hand is up again, please.

Thanks a lot, thanks a lot. Hi from my side as well and congrats to the good result. I have two questions on Malta briefly. First one would be if you could just remind us how the year 2025 will shape up at Malta because you're guiding for a passenger growth, if I'm correct, of around 300,000 passengers, so roughly 3% year-over-year. And sales should definitely benefit from that. But could you shed a bit more light maybe on what you expect from the fee adjustment side, if there is any? So this would be the question regarding Malta.

In Malta, there is no increase in the charges. So the charges have remained stable for, I think, the last 15 years. But we have not been reduced as well, and if they would have had our formula, they would have had to decrease because of the strong growth. So we don't expect the upper charges to change in any way there. And overall, our best guess in January for 2025 overall was a very slight growth for the group. Let's see if Malta manages again to grow stronger this summer. But after the strong growth last year, I think we will see growth in Malta in summer, but more modest than in recent years and probably more modest than what we've seen now in January.

Thanks a lot. And maybe an additional one regarding capacity at Malta. Is the airport currently during the summer travel season bumping at capacity, and does that limit the growth? And is this also the reason why you don't forecast more aggressive passenger growth, or is it just that you see demand slowing down already from the booking situations at the airlines?

I think Malta had huge growth in recent years, so I think we cannot complain about the growth. I don't think that capacity is really an issue. I mean, it's more comfort, which is suffering right now, quite significantly, to be honest. And we definitely have to increase capacity in terms of space for passengers, space for passport control and space for security. So this is going to happen in the next few years. But we have two runways in Malta. We just extended now air trust stands in Malta. So I think... If we have capacity issues, the issue would be quality for the passenger, but not necessarily a loss of traffic.

Thanks a lot. No hand is raised. Are there any further questions, any follow-ups?

If not, then I thank you all for the interest in Vienna Airport. Thanks for the discussion, for the many questions. You'll see on the slide Q1 will be reported in the mid of May, 15th of May. In the meantime, annual report will be out at the end of April with all the notes. And that's it. I will close the call.

Thank you very much. Bye-bye. Thank you.