Fraport Ag Frankfurt Akt

Welcome, ladies and gentlemen, to our pre-recorded nine-month analyst presentation. Matthias and I are looking back at a very eventful and, at the same time, very successful nine-month period. One of the key highlights, certainly, was the regulatory approval of our major construction site, Terminal 3 in Frankfurt. I am on slide number three. So, completely approved. we are officially at least ready to start. It fills me and the entire Fraport team with pride that Frankfurt Airport is now ready for future growth. I will come back on the remaining steps until the opening of the terminal in a minute. But let's focus on the other key areas of the past period first. In combination with the progress in Frankfurt, we also completed and opened the first phase of the new Lima terminal in June and added new terminal capacities in Antalya in April. Besides the CapEx projects, we are also pleased with the last summer season. Frankfurt Airport showed a solid growth rate of around 3%, while our passengers and airline customers at the same time perceived better operational quality compared to the previous year. During the summer season, key international group airports also achieved record levels in Q3 and on a year-to-year base. As a result of the operational growth, we recorded an all-time high EBITDA in the third quarter and received record inflows. Consequently, free cash flow was the highest ever achieved by our company in the third quarter. despite continued outflows for Terminal 3 and the new Lima Terminal in the amount of around €150 million. Having said this, we are well on track to deliver on all our financial targets set for fiscal year 2025. Taking now a look at our key financial highlights for the third quarter on slide number 4, while Headline revenues of 1.35 billion euro were flat on the previous year's level. Revenues excluding for IFRIC 12 effects moved up strongly by 8% compared to Q3 last year. Reasons for the positive revenue development were the before-mentioned traffic goals as well as increases in airport charges and other prices. From a segment perspective, our international division showed revenue growth of around 6%, while the three Frankfurt segments were up even stronger by about 10%. Moving on the EBITDA, here the increase was clearly higher compared to revenues at more than 20%. EBITDA therefore achieved an all-time high figure of 590 million euro. By young The underlying strong business development, we also recorded a positive one-off effect of roughly 50 million euro due to cashbacks in connection with the supplementary pension plan. Here, additional payments to close an expected funding gap were calculated wrongly, which led to a reimbursement of contributions and supported our results. Adjusted for this one-time effect, EBITDA nonetheless was up strongly by around 12% to 540 million euros. Bottom line, a group result of 350 million euros also marked an all-time high despite the higher interest expenses and a slightly more negative result for Mantaglia. Our traffic performance in the third quarter shown on slide number five. Frankfurt Airport showed a solid growth rate of just under 3%. In addition to the positive passenger development in the third quarter, we were also pleased to see an even better traffic performance in October at a growth rate of just under 6%. All traffic regions, so North America, Africa, Asia, and Europe, expect for Latin America, recorded passenger growth. Frankfurt Airport, therefore, now stands at a year-to-date passenger growth of 2.3%. So we are on track to achieve our full-year targets. Outside of Frankfurt, growth continued in all our group airports in the third quarter. Airport Greece recorded a similar growth rate to Frankfurt and reached another passenger record. In particular, the airport of Thessaloniki showed strong momentum of more than 8%, while also the airports of Kofu and Kanya showed good growth of more than 5% each. Lima Airport recorded a somewhat more moderate, modest growth rate at around 2% in Q3. The airport in Lima was negatively impacted by the refurbishment of the old runway, which started in September and strikes carried out in Cusco, which had a negative impact on the tourist inflows to Machu Picchu. Paraport Brazil. On the other side, it was positively impacted by the reopening of Porto Alegre Airport and doubled its passengers number compared to the last year. A solid recover to more than 90% of 2019. A very positive goal set of 12% was recorded in Ljubljana. Numerous flights were added during the summer season and we expect a continuation of this favorable trend for the upcoming winter season. Our two Bulgarian airports in Varna and Burgas also saw passenger growth of combined 6% and a recovery rate of 68%. The two airports, however, still lacked the 2019 levels due to missing passengers from Eastern Europe as a result of the war in Ukraine. After a week's start of the year, Antalya Airport came back into the growth mode. At plus 2%, the airport handled 5% more passengers compared to 2019, a solid result of our single biggest airport outside of Frankfurt. In total, the group airport therefore handled about 6% more passengers in the third quarter compared to last year and are now fully recovered to the pre-pandemic level. Looking ahead, we just released the traffic outlook on the Frankfurt winter season. I'm on slide number six. For the current winter season, we expect aircraft movements to grow by around 3% and seat capacities likewise to grow at roughly 3%. Growth will be mainly driven by capacity additions of Condor and EasyJet. The two carriers clearly increased services and start new routes last summer. This growth will now continue for the winter, but also Lufthansa, back on growth with the deliveries of the new B787. Following the winter season, we very much look forward to a new chapter for Frankfurt Airport, the reopening of Terminal 3. As we discussed before, Terminal 3 will open after the Easter holidays next year. In the meantime, we set a date for the first inaugural flight of our Terminal 3, April 23rd will be the first operational day. Until this day, we still have further tasks to do. The 12th test to test the infrastructure started already with our own employees. In January, the test runs. The test runs will commence with people from outside of the Farport code. By the time of the opening, several thousands of people will have tested the new terminal processes. Simultaneously, commercial operators will work on the completion of the new shop concepts and lounges. The security checks are set up as well as all installations by the police, customs, and all areas. In addition to the terminal infrastructure, we also made significant progress in terms of climate protection. Since October 22nd, Our photovoltaic plant next to the takeoff runway west has been operational in Frankfurt. 37,000 vertical solar panels generate substantial green electricity, especially in the mornings and afternoons. The new plant is an ideal addition to the photovoltaic system installed on airport rooftops, which reach their peak output at midday. From mid-2026 onwards, another substantial amount of green electricity will be supplied from our wind power purchase agreement with ENBW in the North Sea. This means that 100% of the electricity demand in Frankfurt will be covered by renewable resources from mid-next year onwards, so 10% local photovoltaics and 90% wind energy. In absolute terms, this would be more than 300 gigawatts per hour from wind energy and close to 30 gigawatts per hour from solar energy. Moving on to the development outside of Frankfurt on slide number nine. The slide shows you the progress of the second terminal construction phase in Lima. As you can see, the second phase, or phase 1B, is well advanced. The long swing pier, which can be used for domestic and international services, is already fully completed. The other extensions of the terminal infrastructure are close to completion. With the second phase, we will increase the terminal capacities from 30 million passengers to 40 million passengers over the next few weeks. Also, the refurbishment of the old runway is well underway and will be done by end of this year. So Lima is well underway. Antalya Airport, as you know from previous discussions, is also completed. The new capacities have been taken up well by the market. Following the settlement of the dispute with the former duty-free operator, we are also seeing further progress from the retail activities in Antalya. Further goals we also expect from the addition of Kalamata, our airport number 15 in Greece. Here the team is working closely with the Greek authorities on the concession commencement, which will probably happen during the first quarter of 2026. Coming now to my last slide of the presentation, our group outlook on slide number 10. The outlook shows that we are well on track for the full year. While we narrowed the guidance in terms of Frankfurt passengers to about 63 million, we continue to expect moderate growth in ABTA in the single-digit percentage rate range. Due to the One time effect, which we recorded in the past quarter, it is now increasingly likely that we will end up rather in the high single digit percentage area. On an underlying base, however, this shall be more in the mid single digit percentage area. As we guided before, our group result will develop at a more subdued pace. The main reasons are the absence of the positive one-off effect from the sale of St. Petersburg last year and rising interest costs. For the free cash flow, we continue to expect the free cash flow to be close to break-even this year. The near-to-break-even free cash flow is expected to have a slightly positive impact on the net financial debt-to-habit ratio thanks to a growing EBITDA. Regarding the dividend, there is no official decision taken, but as we have communicated this often times before, we see a very high likelihood to assume dividend payments as early as this year to be distributed next year. Plus, latest next year in connection with our full year result, sole March, we will provide you the final outcome of these discussions. Having said this, I would like to hand over to Matthias now for more details on our financial development.

Thank you, Stefan, and a warm welcome also from my side. On my first slide today, slide number 12, I would like to guide you through the cash flow development in the third quarter and our indebtedness at the end of September 25. Starting on the left side of the bar chart, you see a strong operating cash flow increasing by 27% year on year, which was driven by a good operational performance, working capital changes, and by the one-off effect in connection with the supplementary pension plan that Stefan has already talked about. However, even if adjusted for this one-off item, the operational cash flow increased by some 90 million Euro or around 17%. Focusing on the main CapEx programs in the group, you see a clear trend in Lima, where the new terminal has been opened and the investments are coming down quickly, only reaching 38 million Euro in the third quarter. As a comparison, Last year in Q3, we still spent some 114 million Euro. At the same time, as you heard from Stefan before, we were able to complete construction on our terminal three in Frankfurt, where CapEx in the last quarter amounted to some 119 million Euro. Also, this is still an elevated number. We already reduced CapEx for T3 by almost 60 million Euro, if compared to last year's Q3. This shows the reduction in investments also in Frankfurt, as we are now coming to the end of the capex program. While the remaining investments were only slightly higher than last year, brick and mortar capex decreased significantly by 29%. Additionally, dividends from ad-equity consolidated companies, mainly from Antalya, in the amount of 30 million euro were supported. Like this, we generated a record quarterly free cash flow of 373 million euro. This reduced our net financial debt to less than 8.2 billion euro. Correspondingly, we reached a leverage ratio of 5.8 times net debt to last 12 months EBITDA, and also our gearing ratio improved by 14 percentage points to 159%. On my next slide, number 13, I would like to give you further details on our indebtedness situation. As mentioned before, our net debt today stands at less than 8.2 billion Euro, which is a net of our 12.1 billion gross debt and the cash balance of more than 3.9 billion Euro. If we add any residual unused project finance and committed credit lines, we even end up at a cash reserve of close to 4.6 billion Euro. At 3.3%, The average cost of debt remained unchanged to the second quarter, despite regular refinancing activities and drawdowns from the Lima project financing. As you can see from the chart, around 200 million Euro are still reaching maturity this year in Frankfurt. In the meantime, so since end of September to date, the refinancing of the majority of this has already been agreed on. Now coming from the group to our segment reporting, starting with the Q3 numbers in aviation on slide number 14. After a good first half of the year, the positive trend in revenue generation continued in our operationally and financially most important third quarter, driven by pricing and volume effects at Frankfurt Airport. Therefore, total revenues increased by some 11% or 38 million Euro, while aviation charges went up 9%, which corresponds to 25 million Euro. The residual increase in revenues came from security charges, which grew strongly by more than 20% due to the new reimbursement system based on cost coverage on a full year basis and not on a monthly basis like in the past years. As we mentioned before, we received an unscheduled one-time refund in relation to our supplementary pension plan, which reduced the staff cost in all of our four reporting segments. This refund was based on a new assessment by an insurance actuary, which meant that we overpaid the pension plan in the past couple of years. Having said this, around 14 million positively impacted the staff cost in aviation. Therefore, personnel expenses decreased by 9 million Euro in the third quarter. If adjusted for the one-off item, expenses increased by some 7%. As a result of the good operational growth in the one-off item, EBITDA increased to €162 million, or 25%, and EBIT amounted to €125 million, an increase of 37%. Adjusted for the one-off and staff costs, underlying growth rates still stood at 14% and 22%, respectively. Jumping from aviation to non-aviation on my next slide, our retail and real estate segment. In the third quarter, we incurred a revenue increase of 3.4% of 5 million Euro. Out of that, the retail business contributed about half of the growth, which corresponds to an increase of 4.2% over last year's third quarter. The positive development is based on the volume growth in Frankfurt on the one side and the increasing spend per passenger from three euro and two cents to three euro and six cents on the other side. This development was primarily driven by higher advertising revenues in the quarter, which grew from 58 cents to 74 cents on a per passenger basis an increase of 28%. Details about the retail split can be found on my next slide. Also, parking showed a strong revenue increase again over the summer season, growing by more than 5%. The one-off item from the supplementary pension plan reduced staff costs in retail and real estate by some 4 million euro, which led to decreasing personnel expenses. Adjusted for the effect, staff cost increased by around 7%. In addition to that, other OPICs benefited from a reimbursement of utilities, which is why also this line item decrease compared to the previous year's quarter. Based on those effects, EBITDA and EBIT ended up strongly at 113 and 89 million Euro respectively. Moving on to our ground handling segment on slide number 17 and starting with a positive message here. As you can see on the slide, we changed our guidance for the ground handling segment and now expect to reach a positive EBITDA in 25 after a good Q2 and an even stronger Q3. But now looking at the main drivers of this development. As mentioned with our Q2 publication, there are several factors influencing the positive revenue development. Besides growing traffic volumes and higher prices, we continue to record a higher market share due to the continued slow ramp up of SISBOT. On the other side, of course, the ground handling benefited significantly from the reimbursement of the pension fund. Staff costs amounted to 128 million and therefore stayed on the previous year's level despite an increase in FTE numbers and wage increases. If adjusted for the 16 million Euro one-off effect, personnel expenses increased by some 14% over last year's third quarter. As that compared to last year, our financials are still influenced by higher FTE numbers. However, if we compare Q3 with the second quarter, 25, you see that our staff number decreased further. In the meantime, over the last two quarters, we reduced our ground handling personnel by more than 100 people. At the same time, we are becoming less dependent on third-party providers by decreasing the amount of external personnel, which is reflected in other OPECs that remained on previous year's level despite inflation. All in all, This led to a positive EBITDA of 37 million in Q3. If adjusted for the personnel one-off, we generated an underlying EBITDA of some 21 million, so we more than doubled the result of Q3 2024. Now, coming to the last slide of today's presentation, slide number 11. concluding with our international activities and services segment. Looking at the top line effects, you see that the revenues overall decreased due to the fact that the IFREC 12 related revenues came down by more than 100 million Euro, again in Q3, due to the completion of the terminal in Lima. So more relevant, of course, is to consider the underlying revenues, which performed nicely with an increase by around €30 million or 6%, bearing in mind the headwinds from exchange rate developments, especially in Lima, Brazil, and the U.S. On the cost side, the segment's performance was influenced by the Frankfurt services. which benefited from the premium refund and decreased the staff cost to 83 million Euro from 90 million last year. Adjusting for the 15 million Euro one-off effect, personnel expenses increased by around 9% overall. As a result, the segment's EBITDA increased by some 15% to 281 million Euro, or by 9% if adjusted for the cost-saving one-off item. The increase in DNA to €72 million was especially driven by the terminal opening in Lima and led to an EBIT of €209 million. This translates into an increase of 9% or 2% if adjusted for positive one-offs. With this, I would like to conclude today's presentation and thank you for your attention. We look forward to the Q&A session this afternoon. Have a nice day and goodbye for now.

Welcome also from my side. First, I would like to apologize that the webcast this morning was off-boarding one hour late, so reducing our punctuality rate. But anyway, I do hope that you meanwhile have the chance to hear it, the presentation of our CEO Stefan Schulte and our CFO Matthias Tischang. They are both with me here at the table and we can now directly jump into Q&A.

We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Questions on the phone are requested to disable the loudspeaker mode while asking a question. Anyone who has a question may press star and one at this time. The first question comes from the line of Elodie Rall from J.T. Morgan. Please go ahead.

Hi. Good afternoon. Thanks for taking my questions. So my first question is on CapEx. If you could remind us your latest expectation for 26 and 27. I think at the call at H1 he said that capex in 26 could be maybe around 800, max 900, and then for 27 we have in mind like 650. So it would be interesting and helpful if you could fine tune them, your expectation, and are you still expecting a step down to 500 million of maintenance capex from 27? And what is the envelope and timeframe for the refurbishment of Terminal 2? So that's my first question. And my second question is on dividend. You said on your presentation on the webcast that there's a chance that it comes back as soon as this year. So what needs to happen? size are we looking at? You previously had a payout ratio of 40 to 60%. Would it be a similar policy?

Thanks very much.

First of all, there's no final indication for next year for 26 and 27, just an indication, and this is not new. So we, in this year, we are going to realize about 1.1 billion, and we reconfirm this number. In 26, it's about 900 million, and in 27, it's about 700 million as a first indication. Maintenance capex 500, yes. Also confirmation that this is more or less a sustainable number for the future. And regarding the phasing of T2, again, this is a lever depending from the growth number of passengers here at Frankfurt Airport. So we can speed up, we can delay it. But based on our base case scenario, so the capex regarding T2 goes up in 29 days.

Regarding your second or third question, whatever it is on dividends, I think Matthias as well as I gave you throughout the year, whenever we met, always and also on the annual meeting, the expectation that we are optimistic to restart with dividend payments in 2026 for 2025 if, and the big if was, if the year 2025 turns on a positive way regarding our EBITDA results and regarding that we have CapEx under control, so that we are getting Net debt very close, free cash flow very close to zero. I think we are on that move, so I'm optimistic that we can get back on restarting dividend payments in 2026 or 2025, but we still have to wait on the final quarter. whether especially the capex is so far under control that we are coming close to break even on free cash flow, slightly negative, and that we have a positive outlook for 2026, of course. From today's point of view, I'm quite optimistic that this will work, but let's please wait for the final quarter, and then the official decisions and the decision on this will be taken latest by the supervisory board in March. Payout ratio will be for sure less than 40% to 60% in the first year or the first two years, but long-term, mid-term, long-term, we want to get back to 40% to 60%.

Thank you. Can I just ask on CapEx just a precision? You said Terminal 2 goes until 2930. So should we expect a level of 700 million euros of CapEx between 27 and 2030, more or less, on average?

It can be. So I would, from today's perspective, the 700 or more, the maximum could be even a little bit less than 700 before we ramp up with Terminal 2.

Okay, thanks.

The next question comes from the line of Carlos Caburrasi from Kepler-Chevreux. Please go ahead.

Hi, everyone, and thank you for taking my questions. Yes, two on my side, first on precast flow and following up on what Stefan has just commented. You've always mentioned close to breakeven in 2025, but can you maybe provide a range for your full year expectation? And if I go back to 2018, the nine-month figure was 80 million free cash flow, and then the full year numbers stood at 7 million. Should we expect something similar in 2025? And second, can you comment your expectations for Antalya during the rest of the decade? I mean, this year's performance, has been weaker than what some analysts were expecting. And I was wondering if you could provide some visibility on EBITDA net profit by 2030. And additionally, could you also provide some visibility on the dividend payments coming from Antalya, especially considering the start of the second concession and the higher concession payments? Thank you.

The first question regarding free cash flow, you could see a positive number. in Q3, which was strong, but it must be strong. Otherwise, we cannot end up close to breakeven. And we still are convinced that we will end up close to breakeven. And regarding then the indebtedness would lead to a situation that coming from 8.38 billion last year, we will end up in a range which is from a today's perspective between 8.3 up to 8.4 billion 425. And then looking forward into the year 2026, free cash flow will be clearly positive. And we are using this in the case of dividends to pay some dividends if the decision will be made. And second to use the other proceeds to bring down the of the group.

Regarding Antalya, and thanks for your questions, Antalya is now in a difficult phase between Antalya old concession, Antalya new concession, with some of the negotiations and with the DHMI over there. So in principle, yes, this year was a little bit Disappointing regarding traffic growth, but I know that a lot of activities started in Turkey, in Antalya, and we have seen already a very, very good October. It's just one month, but with a growth in October of 9%, that was very positive. This November, December are not any longer so important because the traffic numbers are still okay, but they are coming down. The high season is over. So we have to see what really the final number is on EBITDA, but roughly something about 40, 50 million could be on EBITDA level for this year, 2025. And then it should go up, but the real step up will be from 2027 onwards, not earlier, because it's in between time between the two concessions there. Dividend payments we are not expecting for the next years. As far as I'm informed .

Carlos, to be precise, that was referring to the new Antalya concession. So we need to add the current Antalya concession too. Okay, okay.

Thank you. The numbers I mentioned, the entire one numbers, do you have some? I don't know at the moment.

The dividends we got for this year, high double-digit, and we also expect more of the same next year.

Okay.

Up to 100 million.

Yeah. Sorry. It was not the consideration number.

Okay. Thank you. The next question comes from the line of Tobias Fromm from . Please go ahead.

Hello. I have just one question on ground handling. The EBITDA margin was 16% in Q3. Adjusted, this is around 9%. When I compare this to the 13 plus percent in Q3 2019, there's still sort of significant room for improvement. And now considering the reversal of the higher market share, which should go down to 90% as you said earlier, Where do you see the annual EBITDA margin for ground handling settling? Is this around the 2019 level of 8.5%, and when would you expect to actually get there? Thank you.

Well, that's 8.5%. I don't know at the moment. It will be a little bit less, I think, but we expect a big increase on the EBITDA side in 2027 and 2028. Due to contract negotiations with our main customers, our main customer, this contract negotiation started already. I think we will update you over the term of the next six, nine, 12 months because that's the duration of the actual contract and will not be an early, easy solution. So there are tough negotiations.

Okay, thank you.

The next question comes from the line of Dario Maglione from BMP Paribas. Please go ahead.

Hi, good afternoon. Just one question, pulling up on what was asking about the capex, just to make sure I understand. So the maintenance capex is 500 million, but then you mentioned the 700 million kind of long term. So, yeah, I just want to clearly understand what is the 700 million, how long for, whether it's brick-and-mortar capex or also include fixed concession payments and so on, just to be very clear. Thanks.

Just when we talk about capex, we are focusing on brick-and-mortar capex. Concession payments would be on top of it. First of all, we have now a ramp down again, 1.1 this year, about 900 next year and 700 in the following year. This includes still payments for terminal three. So we are from a technical perspective, the construction is ready, but nevertheless, there are residual works which have to be done. And then you have always a lot of discussions between the construction companies on one side regarding the final bills. This takes time. In some cases, a settlement immediately after the finalization of the work. Sometimes it takes 12, even 18 months. And you always have some residual works which have to be realized. And let me say, in the case of such a huge project, you have between, there's always a delay between the last payment on one side and the last construction works. in a range of 12 up to 18 months. And this means looking forward, again, the terminal is through, but there are still payments in 26, can be up to 200 million. This is always part of our total consideration of maximum 4.2, 4.3 billion, which we already said, including reserves, et cetera. and there will be no overrun of this number. So looking forward, if there would be a 200 million further capex in next year, this is part of the 4.2, 4.3 total budget for T3. And also looking into 27, and these 700 million, they are still in our financial plan, some final payments, delayed payments for Terminal 3. So with other words, The discrepancy between 700 and 500 million are on top elements. The 500 million is, from today's perspective, the maximum of maintenance capex for all group assets in our portfolio, including Frankfurt, including all other assets.

The next question comes from the line of Andrew Lobenberg from Barclays. Please go ahead.

Oh, hi there. Can you tell us a little bit about Terminal 3 in the airline? There was some talk I think at the last quarter's presentation that Condor and Turkish might move, but I think when the opening date was announced for T3, they were not included. Do you think you're going to get those over to T3 or not or when will we know? And a second question would be around Lima. And I think at the time of the deep dive, you told us that there were plans to introduce a connecting passenger fee that should be supportive to the airport charges notwithstanding the existing regulatory structure of RPI minus 3, I think, from memory, US RPI, I think. I think the airlines are building up quite a big campaign against that connection fee. So how confident are you that it can come to power? And then also if we look at the, I think the retail revenue in this last quarter didn't seem to move a great deal in Lima. Is this a timing matter or have we just not got enough space open yet in the new terminal? Thanks.

I'll start with the question on Terminal 3. You're absolutely right. We will start on 23rd of April, and then over four waves up to the summer holidays, we'll move all airlines out of Terminal 2 in the first step to Terminal 3. So that's excluding Condor, it's excluding Turkish Airlines, or it's excluding any other airline out of Terminal 1. Thereafter, one or the other airline was mentioned. Maybe Condor could move to Terminal 3, but that's too early at the moment. Discussions are ongoing. We will see, but I can't confirm it today. If at all, it would be from 2007 onwards. It would make a lot of sense for Condor, also for us, but the discussions are ongoing. Regarding Lima, yes, you are right that we have the right for the concession contract for connecting passenger fee. There is a big debate about that started by the airlines, and we had discussions with the concession renter which way it could be introduced or is there another way to be introduced. Whether it's starting end of the year, we have to see. It's open at the moment. The discussions are ongoing, and we will keep you updated as soon as we know which way it's going ahead. Whether it's this connected passenger fee or whether it's recalculated into the normal fees, we have to see which way was the solution at the end is. But we are in discussions there with the grant of the concession, so is the state. On retail, in my opinion, it's just the normal work to get now the passenger streams and the shops and to optimize all the streams. It will take some time. That's normal with the new terminal to adapt to one or the other topic, but we are quite optimistic there and also in discussions with the duty-free operator and so on that we should see further growth over the next years.

When you're looking on the ABDA contribution from Lima, we have three drivers or three levers on one side. It's in the moment the number of passengers, which is temporarily reduced by the refurbishment of the old runway. So this leads to a temporary limitation of movement. That's the reason why we have now a small reduction of passenger number. going into strong positive numbers at the beginning of next year. So second, of course, we have this U.S. dollar impact because the most valuable passengers are the Americans flying into Lima to stay in Peru or using Lima Airport as a stopover location for other destinations. And looking just on the retail numbers, they are very good, but again, spoiled by a little bit with temporarily reduced passenger numbers on one side and the U.S. dollar negative impact on the other side. And higher OPEC due to the opening of the terminal, of course, compared to the old terminal.

The next question comes from the line of Graham Hunt from Jefferies. Please go ahead.

Yeah, thanks. I've got two questions, please. Firstly, on T3 commissioning next year, could you give us any sense of how you see the cost developing there in terms of the impact on group EBITDA? I think you've spoken in the past to a more stable development as we saw or as we see overlap between T2 coming offline and T3 coming online. So any updated view there in terms of the cost of commissioning would be helpful. And then second question, just on your payout ratio, I just wanted to understand if EPS payout was the only approach you would take to shareholder distributions or if you would consider A different policy just given non-cash charges are stepping up significantly from next year. I just wanted to understand your thinking there around still tying that to earnings. Thank you.

T3, as always mentioned, the OPEX is higher than T2 because it's a huge terminal. It's more than twice its capacity compared to terminal two. So the OPEX increase is a double-digit million amount per annum compared to the status quo on one side, but on the other side, of course, then the headroom for growth when the passengers are kicking in, so to say, in this enhanced capacity.

On dividends, if I got your question correct, We first focus on the first dividend payment and restart the dividend payments. Then we'll see all the business developing, but it will be in the first year for sure, focusing on EPS, so on the results, the net results on dividend payments, because we also want to bring down some of the debt, and there are no plans from today's perspective for the next two, three, four years to make any shareholder repayments or something else, but it will be focused on dividend payments at least for the next two, three, four years.

Thank you. As a reminder, if you wish to register for a question, please press star and one on your telephone. The next question comes from the line of Ashish Keetan from Citigroup. Please go ahead.

Hello everyone. Thanks for taking my question. I just wanted to understand if you can provide any initial thoughts about traffic growth for 2026. And secondly, how do you expect the retail revenue to grow? Thank you.

It's too early to be quite honest. We get at the normal these days, positive signals, especially from our main customer Lufthansa, but also from Condor, the two biggest customers here in Frankfurt. that they would probably see a bigger growth rate than this year, but to be quite honest, that's too early in those discussions, and we'll give you the guidance in the beginning of next year. From today's point of view, I'm optimistic that we'll see in Frankfurt a stronger growth, but whatever it means, that's too early. I'm too long in that business, having seen too many sicknesses.

Regarding retail, looking forward, so we have the positive impact from Terminal 3 with this huge and nice retail marketplace. And as we said in the past, we expect an increase in the spend per pack of these passengers moving from Terminal 2 to Terminal 3 of about 50%. And just as a reminder, the spend per packs in the moment in T2 is above three Euro, not because the retail space is great. It has to do with the value of the passengers, which today we operated in terminal two. So we are talking about 10 million passengers moving from T2 to T3, full year effect in 27. And then the expectation is that they spend 50% more than this what they spent in the past internal tour.

Thank you.

The next question comes from the line of Arishankar Ramamurti from Deutsche Bank. Please go ahead.

Yeah. Hi, everyone. It's Hari from Deutsche Bank. Congrats on a good set of print, especially on the free cash flows. Just one quick question there. If I'm trying to build what your free cash flow might look like for 2026, maybe the starting point would be, you know, 200 million lower capex and then probably 100 million more in EBITDA going by what you indicated when you shared the plans for 2030 targets, you know, 100 million increment each year. So, Does this sound like a fast bridge from this year's FCF to next year's, or is that anything else that we need to bear in mind? Thank you.

First of all, it's absolutely correct to mention the 200 million reduction in CapEx, which has a positive impact on the free cash flow. On the other side, EBITDA will be higher in 26 compared to 25, but today it's too early to say what is the amount. of the expected EBITDA, this we will tell you then when we come with Q4 numbers. But the main driver, of course, are the 200 million capex reduction, which we are going to see in the next year.

Thank you. And maybe just one more. On the 2030 targets on EBITDA, any color from here on as to how that might evolve? in terms of, you know, the mix from volumes and price and predate regulated versus unregulated?

No, no, no. You always said about 2 billion, and this is stable, and you mentioned volume and fees, and exactly as you said, this is always, you have to find an equilibrium between the volume growth on one side and the fee escalation on the other side. This is a little bit... like equilibrium in a pipeline.

Understood. Thank you.

The next question comes from the line of Nicholas Mora from Morgan Stanley. Please go ahead.

Yes, good afternoon, gentlemen. Just a couple. First, on the cost side, you've done pretty great strides, especially in aviation, also to a lesser extent on ground handling. You see yourself being able to continue to, let's say, modestly outperform and compress especially the waste cost within aviation into the back end of the year and 26. Is there anything – special you're thinking about implementing into next year? That would be the first question. Second, coming back on CapEx, I'm thinking about the 700 million you've been talking about from 27. So you imply there's around 200 million kind of sticky international CapEx in there. So that must be, what, half of it must be Greece, if I'm correct. And I had the last one. Yes, sorry. On T2, there seems to be a little bit of a disagreement with a few clients. Is the project as of today, with what you know from the Spencer Growth Plan, is the project planned, or is this still live, but basically kind of with no clear deadline? Just wanted to get a clear grip on whether or not this is still on or basically up in the air. Thank you.

I get your question correct on stuff cost aviation. This is also a question. We believe that the number of stuff will be roughly stable. There will not be a big development on that. And on the price side, you should probably calculate plus 3%, plus 4%, something like this. Also, the hiring we have to do, for example, for ground handling, We are in that hiring process, but it will also be compared to the total number, a small number. So we need maybe another 50 to 80 people, maybe 100 people because of Terminal 3, but we have an efficiency program warning against this. So it's something in the air of 50 people, price increase also 3, 4, 5%, something like this. In the lower level of stuff, The price increase is normally higher than the more higher-paid people. That's something that I could give you as the best guidance at the moment for aviation and ground services.

Regarding CARPEX, again, we see and we calculate about 500 million for the whole group as a base CARPEX amount, like white noise, and there's no exact plan that's saying in three, four years we are taking 70% for Frankfurt and 30% for the international activities. This is more or less a budget which we have and which we are going to allocate to our assets and having a good track record what are the CAPEX maintenance requirements. We know that this is a sufficient amount also looking forward, including Greece and all other assets in our portfolio.

But Matthias, on that international capex and especially Greece, you've been, you and the local management have been quoting the price over the past year now, talking of the capex, the expansion, more runway investment and so on. Isn't there a step up? into 26, 27, 2029, or that's just within the overall envelope?

This is in the overall number. When you look back when we went to refurbish and expand the existing 14 airports, we had a total consideration of, I think, as far as I remember, €330 million for all 14 airports slash terminals. You see the amounts increase to expand. They are relatively modest, and they are part of this big box.

Okay. And last one, if I may, on just on granuling.

I think, Stefan, you mentioned that the conversation with Ms. Doncel was difficult. Do you feel you're more confident, less confident three months ago on the ability to keep the contract or reprice it upwards?

Yes, of course, we are confident. But I just tried to give you the signal, and that was clear. It will be a difficult discussion, a difficult negotiation, and such a difficult negotiation will take time. The huge price increase we need because of the inflation and the price, the staff cost increases over the recent five, six, seven years. So that's not a problem. Not a negotiation with one glass of wine or whatever you want to call it. It will take time, and that's the reason I gave the indication it will take six, nine, 12 months. But we'll keep you updated. But we are optimistic.

We have to get through this.

As a reminder, if you wish to register for a question, please press star and one on your telephone. The next question comes from the line of Marcin Wojtyla from Bank of America. Please go ahead.

Good afternoon. A couple of questions. Firstly, considering the improved free cash flow, do you have any appetite to perhaps consider some new growth opportunities outside of Germany? I'm talking about potential acquisitions of new assets or there is nothing new on that front? And I'm sorry to come back on CAPEX and apologies if that was already addressed, but could you just reconfirm that 500 million of base maintenance that you've been indicating, does that include refurbishment of Terminal 2 or that would be on top?

Thank you. Regarding new concessions, there's nothing really on the table. I know from the market Airports in Egypt could come up. We would have at least a close look at this one, but because it's an attractive market, but it's much too early because we haven't seen anything in detail. We don't know which way they're going ahead, but Egypt is a very attractive market, especially on the tourist side. That's absolutely clear, but it's too early at the moment to say anything on that one.

And second question regarding CAPEX of 500 is a realistic slash conservative number regarding all maintenance CAPEX requirements for all assets. Of course, T2 comes on top, but the total consideration for T2 is allocated for a period of up to six, seven years or eight years.

Thank you.

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Christoph Nanke for any closing remarks.

So, thanks everybody for participating, for your good questions. If there are any further questions, please give us a call later in IRR. And I wish everybody a good rest of the day.

Thanks.