Fraport Ag Frankfurt Akt

Welcome to the publication full year figures 2024 and annual report 2024 conference call and live webcast. I'm Moritz, the course 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, SDP Head of Finance and IR. Please go ahead, sir.

Thank you, Moritz, and a warm welcome from my side. I have with me in the room Stefan Schulte, our CEO, and Matthias Zieschong, our CFO. I know you have a lot of questions, but before that, we start with the presentation right now. Please go ahead, Stefan.

Yeah. Christoph, thanks very much. Good afternoon, ladies and gentlemen, and a warm welcome also from my side. Let me start my presentation today with a positive message. Despite a challenging environment, we achieved our financial and operational targets in the past fiscal year. so we achieved an EBITDA in the middle of our guidance range and the net result in the upper area of the expectations. Moreover, despite heavy investments, we achieved a stable leverage ratio, which is no question, but at least as expected. What have been the main challenges that we are facing Firstly, our main customer in Frankfurt, Lufthansa, is still waiting for its new wide-body aircraft. Currently, more than 40 long-haul planes are in use, which were already meant to be replaced by new modern aircraft, focusing on last year. Only Lufthansa expected the delivery of 50 new Boeing 787. As of today, none of these planes are flying Frankfurt or have been even delivered. Additionally, the maintenance of the Ferdinand Whitney engine exposed short-haul aircraft reduced our Frankfurt capacity by about three to four percent last year, and probably likewise this year. But there are some positive signals that the 787 10 to 15 could achieve, could come to Frankfurt somewhere in the second half of this year. The 777, the new 777, I would not expect to come this year and even probably not from today's point of view in the year 2026. Also, from a political perspective, we faced a challenging environment in May last year. The German aviation tax was a waste, another time making Germany one of the most expensive countries to operate worldwide. This year, the German state has further increased the security costs to be paid by the airline as well as the air navigation charges. Besides these cost items, 2025 also marks the first year of the mandatory SAF quota, so sustainable aviation fuel, applicable in the European Union. That's not really the topic. The topic is plus an additional power-to-liquid rate mandatory for flights departing Germany, so-called gold plating in Germany another time. Ladies and gentlemen, these burns are very high. Correspondingly, the German aviation industry is lacking the speed of recovery seen in other countries. The BDL, that's the German Aviation Association, for example, estimates that airlines flying in Germany will have to pay about 1.2 billion euro higher state-related charges this year, so 2025, or roughly 11 euro per departing passenger on average. Considering the airline margins, this is a very high incremental burden. I'm convinced that Germany has to regain competitiveness, and we address this to the new government or probably upcoming new government very, very clear. So there's some point of chance, some point of optimism, and I hope that we will be able to or to tell you what's going on in the next call. Despite these strong headwinds, we are happy with the results. We delivered this morning an all-time high EBITDA of 1.3 billion euro and a group result of more than 500 million euro, close to the record level of 2018. More financial data later from Matthias, who will also guide you through our segments. Looking back at our operational performance in 2024, I'm on slide four. The traffic results illustrate very much what I just said. Frankfurt is impacted by external factors, everything I just mentioned before, and it's not just Frankfurt, Germany overall. So we are on a recover rate on 87% with an increase of plus 3%, 3.7%. A better traffic performance we are seeing in our international portfolio, the group airports outside of Frankfurt have in the meantime fully recovered 2019 level on average. This is even more impressive keeping the temporary closure of Porto Alegre Airport due to the heavy flooding in might. The key driver for the passenger growth on our group-wide basis was our investment in Greece at 120%. Airport Greece clearly outperformed 2019 and was adding another 6% to the already high previous year base, a very strong development which we expect to continue this year. Maybe on a somewhat lower level we have to see, but the demand for Greece is very, very positive. Following the political unrest at the beginning of 2023, Lima Airport has caught up on the lost traffic in 2024. At 104%, Lima passengers' numbers exceeded the 2019 benchmark, and we do expect 2025 to be another good year of robust growth in Peru. Staying in Latin, Fraport Brazil on the other side recorded a mixed development, while Fortaleza achieved year-on-year passenger growth Porto Alegre was strongly impacted by the temporary closure of the airport due to the heavy flooding in May but in Q4 the airport fully reopened and we do expect it will take a few months until the airlines restore their capacities. A better performance recorded in Ljubljana while the airport still misses a national flag carrier The financials are quite fine, and the outlook for this summer season looks good, which will bring us closer to the 2019 levels again. And while our twin-star airports in Bulgaria were negatively impacted by with-air fleet reductions due to Gordon Whitney-exposed aircrafts, Antalya Airport recorded a very strong result for more than 38 million passengers, which I will also talk about in a minute. Looking now forward to the upcoming summer season in Frankfurt, I'm on slide five. Despite persistent challenges from high location costs and continued low supply of aircrafts, we expect a turning point in our Frankfurt traffic momentum. While the start of the year in general in February was still comparatively weak, we expect to see some traffic momentum from March and then further on in the year onwards. The traffic momentum will be predominantly driven by Condor, which is our second biggest customer in Frankfurt. Condor needs to strengthen its feeder networks upon preliminary short-haul routes as Lufthansa has changed the feeder agreement between the two carriers. The result of these changes is shown on the chart. We expect traffic growth this summer in the area of 4 to 5 percent, seat capacity mainly driven by Condor. Outside of Condor, EasyJet will bring new capacities and traffic routes to Frankfurt. As you know, EasyJet is a remedy taker in the Lufthansa ETA transaction. Correspondently, Lufthansa needs to support competition between Frankfurt and Italy and granted two daily services from Frankfurt to Rome and two daily services from Frankfurt to Milan, Linate, to EasyJet. Regarding Lufthansa, we don't expect the Pratt & Whitney engines issue to be solved this year, nor do we expect positive effects from the potential certification of the Boeing Dreamliner this summer. Having said this, the 4-5% capacity growth largely comes without Lufthansa. We however expect Lufthansa to come back into the growth mode this winter, latest in summer 26, when the fixing of the Pratt & Whitney engines is coming to an end and The Dream Limers will be full into service finally. Now coming back to our own homework on slide number six, we see ourselves on track with our major expansion programs. Let me start here with the new terminal at Lima Airport. As you know, the opening of the new terminal was postponed to yesterday. Exactly this night, we are now working closely with the local authorities to clear the remaining steps and to determine a new opening date, he will provide you with an update shortly. To be precise, there's nothing wrong with the new terminal, which is almost 100% completed. The new terminal is a very fine infrastructure with modern state-of-the-art retail outlets. Also, the retail outlets are finished. It's a wide terminal with lots of space for passengers, And as mentioned with our Q3 publication already, our IR team will provide you a deep dive on the new terminal and walk you through the highlights after the terminal opening. I can just say the topics around the further delay seems to be landside access topics responsible by the state and maybe also some unways we have seen today after murdering of a singer in Lima, a singer in some state of emergency. But we will give you an update as soon as we have more information what's going on there, because the terminal is fully ready and it could be open immediately. But if we have to delay it some weeks, then that's a decision by the Peruvian government. Moving on to Antalya, over the past three years, the team has made tremendous progress to fulfill the investment as set out in the concession contract. In mid of April now, we will open the new terminal around the 12th of April, most probably, and will from there on be able to handle up to 65 million passengers, an enormous capacity which will place Antalya in the top 10 airports of Europe. And despite the big capacity addition, we proved to be right last year. As I mentioned before, Antalya handled about 38 million passengers, an all-time high figure. Despite this great result, the airport still misses about 4 to 5 million passengers from Russia and Ukraine when compared to 2019. And we all hope for peace in the region and so far. Antalya is very well positioned, and we expect to see continued good traffic over there. Following Lima and Antalya, we will complete the terminal construction in Frankfurt in the second half of this year, most likely in October. With these three investments, we will complete our major CAPEX program this year, which we initiated with a groundbreaking ceremony in Frankfurt exactly 10 years ago. So somewhere after Eastern 2026. Going on to slide seven of Frankfurt Airport. We are clearly focusing there on customer satisfaction with projects such as the rollout of new CT security scanners in Terminal 1 and the new automated check-in counters. In addition, we are working on initiatives to increase the efficiency of operational processes with a clear focus on punctuality and also to improve our financial performance. A few projects such as AI-supported turnaround processes or the intelligent dispatching agent are well advanced and will be rolled out up to end of this year. fascinating to see how AI can support us in our daily business, and we are very much looking forward to make use of this. On the other side, we decided to stop individual projects such as the security relocation in Terminal 1, Concourse B after a zero review process, but we will bring in Terminal 1, Concourse B on the east side CT scanners so that even there the processes are much quicker and so with a better customer satisfaction and that's much earlier being realized than the relocation of the security lanes in general. Moreover, we extended the planning phase for the Terminal 2 modernization like this. We have clearly reduced the near-term capex needs as a result in the upcoming two years and with strong I have a strong improvement in free cash flow and will bring back the free cash flow into a clearly positive three-digit million EU area. So progress we also made regarding the tendering of the new terminal three retail areas on slide number eight. The positive message is first, all retail slots have been awarded. In a short period of time, therefore, we'll grow our Frankfurt retail areas as expected by about 12,000 square meters with the opening of Terminal 3. The new marketplace in the non-Cheng area is the heart of Terminal 3 retail area. It's structured in a way to suit all our customers' needs, ranging from kit stores to fine-dine opportunities. The centerpiece of the marketplace is a very nice bar with numerous seating opportunities to enjoy the vivid atmosphere, but also seating areas with an apron view will be provided. Besides new modern concepts in particular, the central security lane in front of the marketplace will offer our customers an improved customer experience compared to Terminal 2, where we are currently working with decentralized security checks in the non-chain area. What does the new retail offering mean for our financials? I'm on slide number nine. Compared to the current setup in Terminal 2, we expect an increase in retail revenues of roughly 50% compared to Terminal 2 by 2027, which is the first full year of Terminal 3 operations. Please keep in mind that Terminal 3 overall can generate even more retail revenues in 2027 We don't expect the terminal capacities to be fully utilized so that over the time the Terminal 3 retail sales will further grow. On the slide you see a rough split of the terminal capacities. In the long run, Terminal 2 will come back into operation and will start generating retail revenues again, but also Terminal 3 will offer further capacities on its modular peers. but that's quite long-term from today's perspective. Regarding the transition phase next year, do also keep in mind that we expect the opening of Terminal 3 after the Easter holidays. Therefore, Q3 2027 will be the first quarter with Terminal 3 in full operation, and the islands will be shifted from Terminal 2 in a staggered approach. Before talking too much about 2026, let's have a look at our expectations for the current fiscal year 2025. I'm on my final slide. Frankfurt passengers we expect to grow this year but remain below 64 million. In percent, this represents a growth rate of below 4%. And that depends very much on the question at what time which aircrafts are coming in and whether they are adding capacity or replacing other aircrafts. So it could be in a range between 2 to 3 percent, maximum up to 4 percent, and more 2 to 3 percent. As discussed before, in particular, the phase-in of the new Boeing Dreamliner Lufthansa remains a factor which we cannot fully assess at the moment. Moreover, we continue to be impacted by missing engine aircraft. For the financial performance, we are facing additional unknown parameters. In particular, the new collective labor agreement for the majority of our Frankfurt staff hasn't been agreed upon yet. In financial terms, we are talking here about a staff cost bill of close to 1 billion euro, so it makes a difference. whether we see there a 3% or a 5% or even a 7% wage settlement or even more as the union's request. Therefore, we provided you a relative broad guidance range and expect a moderate EBITDA increase in the single-digit percentage area. Of the group result, we expect this to be flat to down this year. Let me emphasize here, we incurred extra gains of more than 40 million euros last year from the disposal of our remaining shares in St. Petersburg. These gains are non-recurring. Adjusted for St. Petersburg divestment, our group result will be more flat this year. As Matthias will talk about that in a minute, the net debt to EBITDA ratio will improve due to the positive EBITDA outlook and stable net debt. For the dividend, we currently expect no dividend payment for 2025 financial year to be distributed in 2027 and want to focus on reducing our leverage first. This could only change if we would have a lot of headwind, but really a lot of headwind by positive governmental decisions on the state costs like Luftfahrtkosten, aviation tax, and if a lot of new aircraft would come into service, but it's not very much probable from today's point of view. So let's see whether we get all this headwind, then maybe the picture is changing a little bit. Having said this, I would like to thank you for your attention, and now Matthias with more financials.