Fraport Ag Frankfurt Akt

welcome to the interim report q3 nine months 2024 conference call and live webcast i'm moritz the chorus call operator I would like to remind you that all participants will be in a listen-only mode and the conference is being recorded. The presentation will be followed by a question and answer session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Christoph Nanke. Please go ahead, sir.

Thank you, Moritz, and welcome also from my side. Thanks to everybody who has dialed in at this special day. I have with me in the room our CEO, Stefan Schulte, and our CFO, Matthias Zieschang. They will start the presentation right now. Then we do it.

Good afternoon. Ladies and gentlemen, also from my side, let's go straight into my presentation. On my first slide, you see the financial performance of the past quarter. The 1.35 billion euro revenue grew by more than 10%. Matthias will talk about this later in detail, but I'm pleased to see that the international portfolio and our Frankfurt operations contributed more or less the same amount to revenue growth. So 50% from our international operations and 50% from Frankfurt in absolute terms about 60 million euros higher revenues from each side. Group FBA was broadly flat compared to the previous year, but that's due to special effects. In 2023, we recorded close to 20 million higher results from compensations. And this year, the temporary closure of Porto Alegre Airport imposed a headwind of more than 10 million euros. Adjusted for these effects, the underlying EBITDA would have provided a solid single-digit percentage increase this year of more than 8%. Bottom line, an improved result from Antalya was compensated by higher interest costs and DNA. A 273 million euro group result was flat compared to the previous year, which again was positively impacted by compensations. Net debt to last 12 months' EBITDA improved slightly to 6.2 times, thanks to the overall EBITDA improvement. Where do we stand on a year-to-date base? I'm on slide four. In the first nine months of 2024, we recorded some €330 million in higher revenues on an adjusted base. the revenue increase was again roughly balanced in between Frankfurt and the international operations. On the EBITDA level, 1.05 billion euros represented an increase of about 10% and was in line with our expectations to meet the midpoint of our full year expectations. Some 47% of the EBITDA was derived from our international operations and here in particular from Farport Greece and Lima Airport, where slightly more than 50% came from our Frankfurt operations. On the EBIT level, the mix was even more balanced, with 49% from overseas and 51% from Frankfurt. Bottom line, the financial result improved mainly thanks to Fraport Antalya and a good financial asset management from Matthias and his team. Correspondently, group result increased by more than 20% and reached 400%. 34 million euros. The backbone of our financial performance is our passenger development. On slide number five, you can see and you can find the Frankfurt performance in the first nine months. While the passenger recovery compared to 2019 stands at about 86 to 87 percent on a year-to-date basis, which is weak compared to Other European hubs, the growth rates are coming down over the course of the year. All of the reasons, yes. At the start of the year, some strikes carried out, which amounted to more than half a million passengers, or 1% of our Frankfurt full-year traffic. And you have also some geopolitical impacts. You see this here on the slide. which in the month of September, for example, on a standalone base, gone for more than one-third of our passengers to and from the Middle East, which were lost due to the conflict in the Middle East. But at the end, there are a lot of small reasons behind, but the most important one is the lack of aircraft from our main customer. On the one side, roughly 3% The Lufthansa fleet was grounded due to the Pratt & Whitney engine issue. But on the other side, and that's even more important, new modern long-haul aircraft with more seats aboard, so the Boeing aircraft, failed to be delivered. You know this from the Lufthansa calls. Roughly 40 aircraft there are missing already, which would have been delivered. And you know that the fleet of Lufthansa here in Frankfurt quite old with an average age of 70 years on the inter-con fleet, and they really need those additions and the new, more efficient aircraft. And that gives them, for sure, some disadvantages. The more and the bigger problem is that the traffic momentum also faded due to the increase in the German aviation tax from May onwards. In May, the German state increased the tax on short-haul flights by another 3 euro and by 14 euro on the long-haul flights. Compared to pre-COVID, the tax on the short-haul flights therefore has in the meantime more than doubled while on the long-haul flights the tax increased by more than 70%. So that means on the intercontinental flights it's more than 70 euro. And if you compare a flight on a 787, for example, from Frankfurt to New York, an airline has to pay just to the federal taxes and security charges for air navigation roughly 18,000 euros just on state-regulated fares compared to Paris. The same flight is going to New York. It's just 6,000 euros. And there you see what really the problem is and the challenge is and why the aviation industry is making a lot of pressure on the German government to change this route and to abolish the German air aviation tax. And we have some discussions over there, so at least they are listening to us these days. Not saying it's already happening anything, but it's absolutely clear that this way cannot go ahead and they have to change. A positive signal on that coin is that Lufthansa recognizes their challenge and decided to put six A350 now to Frankfurt, which is of course much more efficient than if you drive, not if you operate four engine aircraft any longer. That's positive, so it's going the right direction. Another positive signal came out today, which is also strengthening Frankfurt Airport, with the decision of Condor to take up several new destinations in Europe from Frankfurt, even if the aircraft, because of the taxes, are based abroad, but they are always flying to Frankfurt, domestic flights, but also European flights. So that goes the right way, but nevertheless, 2025 will not be an easy year for us. It's looking much better if you go on the international traffic development. I'm on the next slide. Slide six. The group airports excluding Fort Frankfort have in the meantime fully recovered in total at least compared to 2019 despite the temporary closure of Porto Alegre Airport. The key driver for the passenger performance on a group-wide basis is Our investment in Papua, Greece, at 120% or 118% respectively, Papua, Greece clearly outperformed 2019 with adding another 6% compared to the already high previous year level. Most of the airports in Greece will now undergo some one-way refurbishments over the winter season to be prepared for the upcoming summer season, but these one-way refurbishments are covered by the EU Recovery Act. resilience facility and therefore won't impact our net cash flow. Following the political unrest at the beginning of 2023, Lima Airport is now catching up on the lost traffic performance. This year at 103% Lima passenger numbers have in the meantime outperformed the 2019 benchmark year and we expect this to continue for the remainder of the year. The other side is recording a split development, while Fortaleza Airport recorded year-over-year growth in the search water. Porto Alegre was heavily impacted by the temporary closure of the main airport. Excluding Porto Alegre, Fortaleza Airport reached a recovery of about 80% compared to pre-COVID, roughly the same level, so 80% is the case for Ljubljana Airport. You know that the National Flag Carrier went insolvent over there, but we see already really good growth rates on Ljubljana Airport with also good fares, and that's going absolutely the right direction. Twin Star is negatively impacted by with air fleet reductions. That's also the Pratt & Whitney issue. There are two issues. base a lot of aircraft, but we have been successful to sign new contracts there with low-cost or a type of low-cost airline to give us further connectivity and further connections from 2025 onwards. So I'm still optimistic on the Bulgarian airports for the next years onwards. So international business is really performing quite well. Challenges we have in Frankfurt, as I mentioned. Shifting gears and coming to our business update on slide seven, you see the status of our Terminal 3 project in Frankfurt. Following the approval of PRG two years ago, the construction authorities just approved, last week, from a fire protection and technical readiness perspective. So we got all the necessary approvals to start operations if we would like, but we first have to finish, of course, the main building. But that's very, very positive. That was all the fire protection measurements in Germany and so on, and all the tests, everything went quite well, and that's really positive. The upcoming milestones you can find on this slide, the test runs of the people mover system to connect Terminal 1, 2, and 3 have already started. We expect the test runs to finish Q2 next year. In Q2 next year, we also expect peer job to be approved by the construction authority. So we start already there now with all the fire protection tests and so on, and all the experts The public authorities are running around there on a daily base. In Q3, finally, then the main hall building is expected to be approved. And at the same time, the trials will start to prepare for a smooth opening after Easter in the summer season 2026. From a commercial point of view, most negotiations for the food and beverage and The launches are finished, and we are in the signing process of the contracts. Further contracts, such as duty-free contracts, car rental contracts, and some other stores are already in place. Focus we are also seeing regarding the cargo development at Frankfurt site. Already in Q2, we launched the so-called Master Plan Cargo Hub, which consists on three main initiatives, digitalization and innovation, space optimization, and area development. So the cargo master plan will help us to handle the expected cargo growth in the future and enables us to keep our leading position in the cargo handling in Europe. In light of the expected cargo growth, we will, among others, create a new logistic hub on the former Ticona site in the west of the airport, so west of the new runway. And to connect this later on also, from 2028 onwards, forwarding facilities with up to 150,000 square meters of hauled space will be available on around 250,000 square meters of land. And as mentioned, in the long term, the logistic hub will also have the possibility to connect the air traffic to the new runway, not just with the road, but also then later on with the rail traffic. Beyond our space optimization and air development initiatives, we are pleased by the decision of Lufthansa to invest a further 600 million euros in the so-called Lufthansa Cargo Center evolution of LCC Evo. The project will strengthen the Lufthansa cargo and passenger operations further and is a clear commitment to the Frankfurt site in the long run. Moving to the latest developments overseas, both airport operators, Lima and Antalya, are currently preparing for the operational takeover of the new airport infrastructure. Olima Airport is on the final stretch to commission the new 270,000 square meters midfield terminal. Antalya is working on the opening of the terminal extension for the international traffic. As you will have seen from the press and social media communication last week, We expect now Lima Airport to open the new terminal at the end of January, so one month later, because of the necessary street connections by the municipalities, and they are a little bit late, but it's just one month. Voluntaria Airport expects the opening of the new terminal at the end of the first quarter next year. Given the size of the Lima investment, including for the new runway operation, we decided to provide you a market update or a deep dive on the investment after the opening. We'll be invited for that then. As for Antalya, the details on the new concession was already two years ago, but a lot of information remains available for you. Those investments in general are remarkable in size and speed. While we are adding close to 30 million passenger capacity in Antalya, The new terminal in Lima will bring total capacities up to 40 million passengers by end of next year. As for both investments, the construction time was less than three years, including for the operational tests, a remarkable testimonial of our international airport capabilities and our teams aboard. Remarkable is also the progress in Porto Alegre. I'm on slide number 10. Following more than 170 days of closure, we reopened Porto Alegre Airport for operations two weeks ago. Initially, we started operations for domestic flights with a 50% shortened runway, but which can accommodate the regular aircraft types being used. The current capacity allows for up to 128 daily flights, which is about 60% of the pre-flooding number. Simultaneously, we are reconstructing the remainder of the runway and other airport infrastructure. The works are expected to be completed with the airport being fully operational in December. Contractually, you will have seen that the ANAC has agreed to compensate for the reconstruction of the airport and the operational costs during the airport closure. Moreover, we are utilizing our insurance coverage. Those compensations, the one from ANAC and the one from the insurance company, will cover the cost for the reconstruction of the airport infrastructure and the operational cost during the airport closure. Similar with the precedent set during COVID, we are expecting a further rebalancing of the economic shortfall due to the lost traffic and earnings caused by the flooding as a force of measure event. Talking about the developments in our international portfolio in general, I'm on slide number 11. Over the past few years, we have taken clear steps to streamline our international portfolio. As a result, we reduced the number of smaller investments in our portfolio and took out complexity. Maybe you know it, starting with our 30% shareholding in Hannover Airport in 2018. and followed by the divestment of our participation in Xi'an Airport in China in 2022, and the agreement signed for Dili Airport this year. Regarding our remaining 25% shareholding in Russia, in St. Petersburg, you will have seen that we have, in the meantime, received a governmental approval to divest our stake. The presidential decree marks an important step ahead. Successful transaction, however, still depends on further conditions and approvals about which confidentiality has been agreed. Therefore, I cannot provide you further information about St. Petersburg at this point in time, but we are seeing good progress. As agreed upon investment, freedom of management capacity but management capabilities and the ways incremental funds, we have focused our acquisitions in time on either the extension of existing concessions of both acquisitions, so adding to a very strong market and investments. Consequently, we were successfully awarded the new Antalya Airport concession 2021. And we just recently showed interest in the upcoming concession to develop and manage Kalamata Airport in Greece. Kalamata Airport is a rather small airport with about 300,000 to 400,000 passengers handled, but with a very good traffic momentum. Given the strong trend for holidays in the Mediterranean in general, we are also seeing pushed to upgrade hotel capacities and golf courses in the Kalamata region. So the Peloponnese in general seems to be the next hot issue, hot potato of Greece in a positive sense, so the next tourism and hot spot of Greece. Talking about financials, we are currently just looking for a minority share of less than 50%. Hence, We are sticking to our previous communications that we won't add bigger investments to our portfolio while our leverage continues to be above five times net debt to every day. Of the years we are awarding of, as the awarding of Kalamata Airport is still under the way, we ask for your understanding that we cannot provide you further information at this time, but as mentioned, it's not a big investment. Moving on to my last slide of today's presentations, our outlook on slide number 12. Following the completion of the first nine months of fiscal year 2024, we left the guidance unchanged and stick to our financial projections and Frankfurt traffic expectations. Reflecting the year to date performances, we also stick to specified ranges. As a result of the strikes and persisting airline capacity constraints, especially the issues I mentioned on low-temperature challenges, but also the weakness of the German general economic situation, we therefore continue to expect to be in the lower half of our traffic guidance for Frankfurt Airport passengers. Thanks to the good momentum outside in Frankfurt, here in particular at Frankfurt Fries, but also in Lima Airport, we remain confident to reach about the midpoint of our full year financial expectations for group EBITDA and group results. Consequently, we expect our net debt to EBITDA key leverage ratio to stay at about the same level compared to the prior year. Having said this, I would like to thank you for your attention, and now Matthias with more financials. Matthias Wittmann Yeah.