Flughafen Wien AG

good afternoon ladies and gentlemen welcome to the conference call through the h1 results of uh vienna airport uh his call is recorded a replay of the conference call will be online roundabout right after uh the session with me cfo and co-coo mr Ofner and co-CEO and COO Julian Jaeger. As always, CFO Ofner is first presenting about the financials and later Mr. Jaeger taking over about the operating part of our business. And so I hand over to you, Mr. Ofner.

Yeah, good afternoon to all of you. Today we published our results for the first six months of 2025. And as you might have seen in the presentation, revenues went up 7.4%. Net profit went up 6.2%. EBITDA was up 3.3%. And This comparison already shows that we lost some productivity in regard of our EBITDA margin, mainly due to high cost increases over the board, but especially personal expenses, as we will see On the other hand, we saw a positive contribution above expectations from Malta, which still is fastly growing, and especially from financial results, which have been clearly better in the first half of 2025. as expected. For 26, we see some fundamental change in regard of the fact that the COVID special regulation is expiring in regard of airport tariffs and the Uh, formula, which is stipulated in the law kicks in again. And this will result in an expected reduction of passenger charges of around 4.6%. And for landing fees by around the minus 2.15%.

Uh, to.

meet this challenge we will have to undergo a program of cost reduction and efficiency improvement throughout all parts of our company and we are quite optimistic that we can offset the major part of the tariff issue uh by improving productivity and efficiency so following uh following this first information you find the details in regard of the earnings improvement in the next chart. What is very, very striking that despite the cost problems, our net profit grew more or less in line, slightly below revenue, and all that on the background of a passenger growth of 4.7% in the group.

If we look at the expenses, we see

more or less growth all over the board. So consumables and services used went up 5%, personal expenses 12% because the non-consolidation of gate two amounts to roughly 7 million in comparison to the first six months of 2024. So putting together the 8.4 plus the effect of the non-consolidation of GED2 results in an overall personal expense rise by 12.8%. by 12.0%. And we also employ roughly 260 plus employees. The last collective agreement saw an increase of 3.3% starting from the 1st of May 2025. And We see also increases in the cost of material and third party services. Uh, and a slight decline in maintenance expenses. What I already mentioned before the margin, uh, is slightly below last year. Positive development in regard of cash flow and balance sheet structure. as we paid out 147 million dividends. This clearly reduced our net liquidity position from 511 at the same time last year to 398. And it also affects our equity. which is down roughly 30 43 million compared to last year despite that our equity ratio still is at a very comfortable level of 68.7 percent the decline in the cash flow from operating activities particularly due to corporate income tax payments and significant improvement in free cash flow as a result of the proceeds from the disposal of investments. CAPEX increased to 140 million and for the full year might be somewhere at 300 or below. And it contains Terminal 3 Southon expansion project which is in time and within budget and should be operational in the first half of 2027. 34.4 million of the total capex was invested at Malta airport and this is part of a investment program that goes for several years and will finally sum up to roughly 300 million vestments also in Malta. Construction progress continues in the southern expansion. The building shelf has already been completed. And now all the technical building systems, infrastructure, energy supply is on the way, and also the preparation for tenants and the interior construction, and also for the centralized logistic center the groundwork has already started as it is an essential part to operate our south extension. Our airport city projects are going very well. You might have heard that we attracted three companies who are producing uh devices for satellites and these are very fastly growing companies with a very innovative new system how to move satellites in in the orbit and we foresee that they will expand fastly in the coming years The logistic park nearby the airport, which is one of the biggest of Austria with more than 80,000 square meters of space has been opened in June. And our new hotel is more or less completed. So the final works are underway and operation should start in the last phase of 2025. And it's a big project with 510 rooms. And I think it's well accepted. And we also decided to add roughly 17,000 square meters of high quality office and conference space to our Office Park 4, whereas these will replace in the future the outdated Office Park 3, which should be put out of work somewhere in 2030. So putting all together, we can confirm the financial guidance for 2025. Regardless of revenue, EBITDA, Group Net, profit and CAPEX. Hopefully, there will not be another severe international crisis affecting our operations. And maybe there is an optimistic light somewhere in the East. If it would be possible to get the peace agreement, Russia, Ukraine, this clearly would be an upside to traffic and business whenever it comes. and peace starts again, then we would have a positive effect out of that. On the other hand, a depressing fact still is regulation, especially European regulation, FIT-455, but also sustainable aviation fuels, and certificates all of that is a big burden that really if it's not changed maybe increase ticket prices by 20 25 or even more which in in the coming years would be a negative factor regard of of growth expectations but i hope still that it should be possible to convince the parliamentarians and your eu commission to change their plans and to go a more pragmatic and aviation friendly way in the years to come

So that's from my side and I hand over to Julian Jäger. Hi, good afternoon.

I will continue with the traffic results. The first six months of this year saw an increase in passenger numbers in the group of 4.7% to 19.6 million. July we saw slight decrease in Vienna minus 1.2 percent, Malta still strong growth plus 8.8 percent, and Kosice plus 1.3 percent, so overall in the group we were growing by 1 percent. Looking at the difference between August 25 and July 25, it's obvious that now Tel Aviv is open again. We see quite strong traffic from Tel Aviv via Vienna. So overall, I would say, without spoiling too much about our August figures, I think August should end at a better note than probably July. Overall in the group, January to July, plus 4%, 24 million passengers. Let me continue with the next slide, talking about details in Vienna in July. I think you can see here very clearly that transfer passengers were down 7%. This is the sad effect of the reduction in the Middle East in July. Local passengers were flat. So I hope that with a boost in transfer passengers from the Middle East via Vienna to North America, August should look a bit brighter. Overall, seed load factor was down as well, minus two percentage points. And here as well, I think August looks better with the airlines. Maybe the bad weather in Vienna and in Austria in July helped a bit. So overall, I'm very optimistic that we will meet our targets for 2025. One thing I would like to highlight are the take stops by India. Overall, we have around 100,000 transit passengers in our figures so far this year, and transit passengers are not paying passengers. So therefore we earn on the tank stops, we earn a charge on the throughput for the fuel, we earn the landing charges, but it's not the same revenue per passenger than with normal passengers. So that's why there's a slight dilution here in terms of revenue compared to the passenger. We still have three to four aircraft here on the ground every day. We're just coming here for adding fuel to continue the flights to North America. As you can see here, I think the strongest development in H1 was the Far East, plus 32.5%. We got ANA back last year. We've got capacity increase on Bangkok. We've got Chengdu. Additionally, we got last year Shenzhen back. We have more capacity on Beijing. So overall, Far East is recovering. It's later recovering than the rest. But overall, I think we can be very happy with this development. um western europe a bit flat uh eastern europe a bit stronger plus 2.7 percent middle east plus 3.6 percent um so overall i think um a picture which was pretty much expected uh at the beginning of this year so we are very much in line uh with with our projections one um very uh um Good thing which happened this year is that Scoot started a direct flight to Singapore. I would expect next year some more capacity on Scoot. I think the initial results on the route are very good. And overall, I think East Asia is to win. Let's continue with the airlines, I think, overall. um no major surprises um i think what is important Lufthansa grew close to 50 percent low-cost carriers a bit above 30 so so everything um within our expectations um no no major surprises uh in this respect We still focus a lot on quality and I think our operational performance is even significantly better than last year. We are much more punctual this year. On the one hand due to increasing staff mainly in ground handling but as well security staff. On the other hand we are a bit lucky with the weather so we have less thunderstorms around the airport in Vienna. And the good result we see here is that we are, between January and May, we were the third most punctual airport in Europe, above 25 million passengers. And Austrian is, week on week, by far the most punctual airline within Lufthansa Group. So I think the operational excellence of Austrian is continuing and I think this is a clear sign that the cooperation here between Austrian Airlines and Vienna Airport as a service provider works pretty well. Coming to our traffic forecast for 2025, I don't think that we will have to change this guidance in the course of this year. I think as we already assumed in January, it's A bit of a flattish development with slight growth. I think we will end the year around 32 million passengers, maybe slightly above, maybe slightly below the 32 million. So that looks pretty well. And in the group, we still expect the 42 million. So there are no major surprises to be expected this year. I see 26 is From today's perspective, yeah, a bit more of a question mark. I mean, it's far too early to speculate about where we will end the year 26. We're still in 25. But overall, what we feel is that the competitive pressure from the airlines is increasing. Austria, I think, gets quite some pressure from Lufthansa Group on their results. the low-cost carriers don't get that much additional capacity in the years to come. There are some countries which reduced or completely removed their aviation taxes, like Hungary, like Sweden. We had an increase in our aviation tax on the short haul segments between 2019 and today. So we feel that there's quite some pressure from airlines and therefore next year is a bit more of a question mark than probably 2025 was 12 months ago. So we will have a lot of intense discussions and then we will see with which capacity we'll end up in summer 26 and probably we won't know before the end of the year or even January But yeah, I would say the heat is on. And one additional thing you might have heard in the last few days that Greece had a change in strategy again. So now they are not getting more than 40 XLR, but they are reducing this number to less than 10 XLR. I think the main reason is that they don't really see a market from Central Europe. The only market would be India. So because Pakistan and Afghanistan is, from a security perspective, probably not a great destination. The Arabian Peninsula, you don't need an XLR, so there's only India left. Because further east than you need, the XLR doesn't take them long enough. You can't get from Central Europe to North America, and therefore I think they changed the strategy. And overall, we will see what this means for Vienna Airport. I will carry on with our business segments. I think airport segment did very well. Revenue of 245 million plus 4.8%, EBITDA plus 3%, EBIT plus 7%. I think, as Guido already mentioned, the most important development here in the next year will be the reduction of the passenger and landing fees. Passenger service charge minus 4.6%, landing fees minus 2.15%. So this is obviously a very significant impact. And this is due to our airport charges formula, which will be implemented again from 1 January next year, as it's stipulated in the Austrian airport charges law. Yeah, overall, but I think a very good result in H1-55. The one segment which is more difficult is handling insecurities. I think we can see here two trends. One, increasing staff costs. really have an impact on this segment. This is by far the most staff-intense segment with ground handling, with security, with ground handling for general aviation, with our terminal services. So overall passenger handling, everything very staff-intense. So therefore, we see the pressure here first. And secondly, all the ground handling services are contracted, but we have no contracts which allow us to simply put in the inflation. So therefore, we have competition in this segment, and therefore, we have more difficulties in this segment. Q3 should be better with growing passenger numbers and overall a higher density of traffic. But overall, yeah, challenging and the EBIT of 0.5 million in H1 compared to 2.3 million in H1 2024. Coming to retail and properties, I think this is a segment where we see Very good results, revenue, centre management and hospitality plus 9%, parking plus 8%, rentals plus 7%. Within centre management and hospitality in particular, VIP lounges, F&B and shopping did very well. VIP lounges even plus 16%, VIP plus 11%, F&B plus 9%, shops plus 10, duty free plus 6.6%. So overall, I think we're looking at really good results here. What is important in this segment that we are right now tendering 10,000 or let's say 7,000 square meters of the additional 10,000 square meters we will bring on the market with the opening of the southern extension in two years from now. Most spaces should be leased by the end of this year, and we see a lot of interest both from on the F&B side and on the shopping side. So I'm really looking forward for this project and I'm sure we will put together a significantly improved F&B and shopping offer at the airport. Malta, continuing the success of recent years, EBIT plus 11%, 36.8 million, revenue plus 11.6%, five new airlines in 2025, more capacity from Ryanair and Wyss, very good and close cooperation with the local tourism industry, so overall again looks like an excellent year for motor airport with this strong passenger growth i mean we were growing since 2011 i think from 3.5 million passengers to 9.8 million passengers this year so obviously there's need for significant capex both in the terminal parking positions for aircraft on the air side office space, hotel space. So overall, we see there in the coming years a very strong CAPEX program. That's it from our end, and now we're happy to take your questions.

Yes, very much to our outlining of the H1 results. For the current A session, please raise your hands. Some already doing so. Let's take in the questions. recording how they came in. Carlos, you are first today. Please go ahead.

Hi, everyone. Thank you for the presentation and for taking my questions. Just two quick ones from my side. Regarding traffic at Vienna, we've seen negative performances in both June and July. You're pointing towards the Middle East. And I was wondering if you could tell us what has been the share of Middle East traffic in both months. and what would have been the development, excluding Middle Eastern routes. And second, on future airline capacity, do you have any updates on aircraft deliveries to Vienna? Thank you.

I think the important development here is, and we've already seen over significantly better figures, is it's not only the Middle East, because many passengers from the Middle East, in particular from Tel Aviv, are going via Vienna to the US. So it's not only the direct market between the Middle East and Vienna, Essentially, those passengers count four times in many times. We can give you the exact figures Middle East now for June and July in the coming hours or tomorrow. But overall, we see already that with growing transfer passengers, I think the remainder of the summer will look much better. Second instance, We saw in July a reduction in load factors. August points here to a significant improvement as well. So overall, we think we are very well set for the plus minus 32 million for the full year. And in terms of capacity, there are no news yet for next year. I think we are happy that the low-cost carriers there are a lot of discussions are going on in terms of austrian what has been communicated that they will get the 12th long-haul aircraft for vienna 12 787 which is a positive development i expect slight seed growth in vienna from austria next year and what has been communicated as well is that they will change their fleet they will farm out the Embraer, they will have only two aircraft fleet, I think from 28 onwards, 787, 320neo, and then they will have more wet lease aircraft. And overall, I think we will be looking at an increase in capacity here from Australian Airlines in the coming years.

Okay, cool. Thank you, Julian.

Vladimir, please shoot. And Carlos, I come back with Middle East numbers.

Yes. Hello. Thank you for taking my questions. First one will be related to your announcement that you want to offset the impact of the reduction of passenger charges by a cost reduction and efficiency improvement. Could you shed a little bit more light on what kind of measures do you prepare in this respect? During the last call you mentioned that in 2026 you anticipate a drop of charges of around 3% year-on-year. Is this still valid or is there any change in that? expectation and for this year you said 3% net increase. So are these numbers in place or not? And my last question, the perennial question, new runway in Vienna, any progress on that? Are we waiting for some regulatory decisions or decisions from your side or how does it look like? Thank you.

In regard of measures to offset the impact, I would not be so optimistic that we will be able to fully offset in 2026, but to a very high extent we will try to offset this development and the measures will affect all our operations. And given the fact that maybe 50% of our cost base can be influenced because depreciation, taxes and other fixed costs cannot be influenced. it would be a major part to reduce these costs to an extent that would offset maybe two thirds or something like that of the overall effect. And from these costs, we can influence personal costs are roughly two thirds. So one of the main issues is always will be personal costs and we saw this deepest increase in personal costs in recent years. So efficiency enhancing measures will be necessary to cool down these personal expenditure hike and uh to to get more efficient i mean you saw it's also a slight decrease in our ebta margin and we will we will try our best to to offset that and the next month will be the period where we prepare for that endeavor and yeah let's hope we are successful for next year and the following years

Perhaps if you continue with the third runway before going back.

Yeah, I mean, there is no new development in that regard. I mean, the highest administrative court is still dealing with the issue whether an enlargement of the building period is part of the permission process and offers also specific rights for the parties of the permission process or not? And this is a very important question for all projects that have been realized since the new law is effective. So in the last 25 years, electricity lines, streets, windmills and things like that. And all of these projects, which needed an increase of the building period, would be in the limbo, although they have been already realized. Because a party that has legal rights but has not been invited to put forward these rights, expires never. So this is a very, very strange angle, how the higher administrative court in the first instance decided this. And it's now already 16 months since the motion was put to the highest administrative court. I'm not sure if they even opened the letter already or it's still lying there. So nobody can really predict when they will decide and what they will decide.

Okay, thank you for that. Well, obviously Vladimir fell out, would be open for the tariffs.

When she comes back, we come back on this question and Philipp, your turn.

Thanks a lot.

Maybe just a quick follow-up on the potential cost savings for 2026. You mentioned a lot of the cost savings should be coming from personal expenses. Do you think you can execute such personal expense savings with maintaining the current punctuality of the airport, or will this come to the detriment of punctuality? This would be the first question. And the second is regarding personal costs for the second half of the year. Is it a correct assumption that the large CLA increases are behind us and now in the second half we should be looking at a roughly 3% personal expense increase from salary increases and that hiring is slowing down, given you expect roughly flat passenger growth for the remainder of the year in Vienna?

So definitely we will not hire now. I mean, there might be some very specific functions that have to be replaced. but in a broader sense, we will not hire additional workforce. And as always, I mean, it's the sum of small movements and measures everywhere put together and result in a good effect. So this is the work we have to do. I mean, we are to a certain extent experienced because we survived Corona, which was a much more severe issue. And I think we learned also in that time that maybe we can do things more informal and can improve our processes. and especially can speed up with automatization, with robots, with artificial intelligence and all that things. Nothing standalone will fill the gap, but the sum of all the parts should help us to fill the gap. I mean, quality, that always is a trade-off between expenses and quality and i think it will be wise to find the right balance between the different goals so quality financial results but also stakeholder issues so all of these goals have to be integrated and well balanced.

I think to add on that I think this will be the most difficult discussion we will have in the next two or three years when we are doing the budget because it's the intention to become less punctual and I don't think that this has necessarily to be the case. We want to become more efficient. Obviously, it's easier to become more efficient if there's growth. So if we should not see growth next year, it will be even a bit harder. But I think to strike the right balance between quality and costs will be definitely the challenge for the coming months. I think we We saw in Corona that we could change the one or the way how we operate. I think the major difference with Corona is that we have now 32 million passengers and during Corona we had between a couple of million and 10 million passengers. So obviously the challenge I think we see now is probably even a bit harder because we have to readjust our costs in running on a pretty high gear. So let's see, but we will do our utmost to cut as much cost as possible in the coming months.

Thanks a lot and maybe if I can ask one more question regarding passenger growth for 2026 or the potential for passenger growth in 2026. Do you have numbers on where China stands in the number of passengers compared to 2019?

I think we're still below 2019. Let me briefly check but overall I think in terms of total numbers China is not that relevant to be perfectly honest because if you look at the total let me just check if you look at the total of East Asia, we are talking, I think, about 3.6% market share. So, overall, China is not that important.

Okay, I understand.

Although we hopefully have some growth from China, but still, it's not... It doesn't have such a relevance, to be honest.

understand okay thanks uh thanks a lot and thanks also for a presentation thank you any further questions or any follow-ups seems not to be the case then i thank everyone for the interest in our company uh thanks for participating in the conference call for outlining your questions um keep in touch have a good afternoon goodbye thank you bye-bye bye thank you