Fraport AG · XETR:FRA
Fraport — Q3 2003 Earnings Presentation
55 slides from Fraport's earnings presentation, Nov 13, 2003
Slide 1: Fraport AG Frankfurt Airport Services Worldwide
Fraport AG Frankfurt Airport Services Worldwide Presentation to Analysts November 13, 2003
Slide 2: Key Messages Q3 2003
Page 2 Key Messages Q3 2003 – Q3 2003: Crises in Iraq and Asia are almost overcome – SARS effect is fading, airlines are back on old capacity – Retail is recovering with Asian traffic – Zoning procedure for capacity expansion on time Presentation to Analysts, November 13, 2003
Slide 3: Agenda
Page 3 Agenda § Traffic § ICTS § Financials § Outlook Presentation to Analysts, November 13, 2003
Slide 4: Traffic Figures 2003 at Frankfurt Airport
Page 4 Traffic ICTS Financials Outlook Traffic Figures 2003 at Frankfurt Airport Q1 2003 Q2 2003 Q3 2003 9M 2003 Oct 03 Passengers 10,567,738 11,899,187 14,026,716 36,493,641 4,589,945 ∆% 0.4 (4.2) (0.0) (1.3) 2.4 Air Freight (t) 377,290 370,056 378,880 1,126,226 142,704 ∆% 6.9 (0.1) (1.1) 1.8 2.4 A
Slide 5: Group Traffic Figures 2003
Page 5 Traffic ICTS Financials Outlook Group Traffic Figures 2003 PAX Q1 2003 Q2 2003 Q3 2003 9M 2003 Sep 03 Frankfurt (1) 10,566,133 11,897,351 14,024,494 36,487,978 4,687,456 ∆% 0.5 (4.2) 0.0 (1.3) (1.0) Antalya 736,681 2,121,137 4,607,948 7,467,035 1,399,608 ∆% (1.4) (20.9) 6.6 (3.7) 0.7 Frankfur
Slide 6: Asia provides the best Growth Opportunities for Frankfurt
Page 6 Traffic ICTS Financials Outlook Asia provides the best Growth Opportunities for Frankfurt Europe & Domestic 63% North America 15% Far East Middle East 11% 3% Central America 2% Africa 4% South America 1% Australia 1% Presentation to Analysts, November 13, 2003
Slide 7: Fraport is Europe's Gate to Asia
Page 7 Traffic ICTS Financials Outlook Fraport is Europe‘s Gate to Asia - Fraport is the most eastern hub airport in Europe - Fraport has a geographic advantage for Asian traffic which saves up to 75 minutes of flying time. Hong Kong Tokio Frankfurt 11:40 h 11:30 h London +50 min +60 min Amsterdam +
Slide 8: Impact of Gulf Wars / SARS: Less severe than in 1991
Page 8 Traffic ICTS Financials Outlook Impact of Gulf Wars / SARS: Less severe than in 1991 40% Monthly PAX development at Frankfurt 30% Mar 19, 2003: recovery 20% Start of war on Iraq 10% 0% -10% unc e nc ide 1990/1992 erta nf k co -20% a inty we 2002/2003 2002: -0.2% 2003 ytd: -0.9% -30% Mar 02 Ju
Slide 9: SARS is overcome!
Page 9 Traffic ICTS Financials Outlook SARS is overcome! Gliding 7-day-average of growth rate on daily basis; Market Share of region 01-10/2003: passenger statistics: final destination • Far East: 11% of total Basis-effect Chinese new year Effects & Basiseffects celebration 2002 Easter/Whitsun 2003,
Slide 10: PAX-Development 1980-2003: Long-term Trend continues
Page 10 Traffic ICTS Financials Outlook PAX-Development 1980-2003: Long-term Trend continues Monthly development 4.600.000 Gliding 12-months average Linear Trend 4.100.000 CAGR 1980-2002: 4.7% 3.600.000 Gulf war 3.100.000 2nd oil crisis 2.600.000 2.100.000 September-11 War on Iraq / SARS 1.600.000 1
Slide 11: Slot Demand in Frankfurt: far above Capacity
Page 11 Traffic ICTS Financials Outlook Slot Demand in Frankfurt: far above Capacity Slot Demand Winter 2003/04 100 90 80 Capacity 70 60 50 40 30 20 10 0 0500 0600 0700 0800 0900 1000 1100 1200 1300 1400 1500 1600 1700 1800 1900 2000 2100 - - - - - - - - - - - - - - - - - 0559 0659 0759 0859 0959 10
Slide 12: Intercont: Premium Traffic is concentrated in Frankfurt
Page 12 Traffic ICTS Financials Outlook Intercont: Premium Traffic is concentrated in Frankfurt Intercont-Passengers to and from Germany by Airport Frankfurt Munich Dusseldorf Others 21.000.394 23.439.941 25.214.570 23.951.276 23.017.248 12.538.087 100% 11,2% 12,2% 11,7% 10,8% 8,2% 9,0% 90% 4,8% 2,4
Slide 13: European Traffic: Substantial Market Share despite low-cost
Page 13 Traffic ICTS Financials Outlook European Traffic: Substantial Market Share despite low-cost Passengers on European Flights to and from Germany by Airport Frankfurt Munich Dusseldorf Stuttgart Hamburg Others 60.974.799 64.500.190 68.982.157 68.799.191 66.515.706 42.179.301 100% 90% 24,5% 25,3
Slide 14: Domestic Traffic: Not relevant for Frankfurt due to central Location
Page 14 Traffic ICTS Financials Outlook Domestic Traffic: Not relevant for Frankfurt due to central Location Passengers on Domestic Flights within Germany by Airport Munich Frankfurt Berlin TXL Hamburg Dusseldorf Others 41.874.158 43.885.846 46.562.042 43.999.592 43.441.146 26.355.568 100% 90% 31,3%
Slide 15: German Airports: Frankfurt is most competitive
Page 15 Traffic ICTS Financials Outlook German Airports: Frankfurt is most competitive – Frankfurt is No. 1 in intermodality, catchment area, punctuality and connectivity. – Airlines reach highest yields in Frankfurt. – Lufthansa`s premium traffic is concentrated in Frankfurt: Intercont traffic; no
Slide 16: Agenda
Page 16 Agenda § Traffic § ICTS § Financials § Outlook Presentation to Analysts, November 13, 2003
Slide 17: ICTS: Europe's Leading Aviation Security Provider
Page 17 Traffic ICTS Financials Outlook ICTS: Europe‘s Leading Aviation Security Provider – Operates at 46 locations across Europe, mainly in Germany, England and France – 8,500 employees – 149 mil. PAX handeled by ICTS in 2002 – Wide range of specialized services for aviation industry 240 250 193 2
Slide 18: ICTS: Integrated Airport Services streamline the Travel Process
Page 18 Traffic ICTS Financials Outlook ICTS: Integrated Airport Services streamline the Travel Process – Airline Security Services: • passenger screening (profiling), validity check, search, security and guarding – Airport Services: • 100% Hold Baggage Screening, training, consulting, audits – Inte
Slide 19: ICTS Market-Segmentation and Strategic Development
Page 19 Traffic ICTS Financials Outlook ICTS Market-Segmentation and Strategic Development High Screening Market potential Cargo Maritime security Terminal Aircraft/Airport Profiling services Integrated Services access (vertical) Training Integrated Services (Technology) Baggage Consulting/ carts au
Slide 20: Integrated Security Services by ICTS at Frankfurt Airport
Page 20 Traffic ICTS Financials Outlook Integrated Security Services by ICTS at Frankfurt Airport Required Requiredfor forUS Check-In US Check-Inatat Flights: Flights: Counter: Counter: ICTS Fraport queuing∅∅6.5 queuing 6.5min min queuing∅∅7.5 queuing 7.5min min FAA Profiling Check-in One Team ICTS
Slide 21: In Development: Combined Passport Control
Page 21 Traffic ICTS Financials Outlook In Development: Combined Passport Control ICTS / Fraport Border Police Integrated Check-In Border Control ICTS / Fraport Passport Control Electron. at Check-In Border Control • Computerized Check In • Electronic Border Control, supported by Flying Pass, finger
Slide 22: Integrated Check-in: Seamless Travel, more Time for Shopping
Page 22 Traffic ICTS Financials Outlook Integrated Check-in: Seamless Travel, more Time for Shopping Security check & Passport control Gate Anticipation Check-In Excitement Baggage claim Passport control Stress Flight Arrival at airport Boarding Start of travel available time for Airside Shopping It
Slide 23: Fraport Factbook November
Fraport Frankfurt Airport Services Worldwide Factbook November 2003
Slide 24: Agenda
Page 24 Agenda § Traffic § ICTS § Financials § Profit & Loss Statement § Segment Results § Balance Sheet § Cash flow § Subsidiaries § Outlook Presentation to Analysts, November 13, 2003
Slide 25: Financial Highlights
Page 25 Profit & Loss Statement Segment Results Balance Sheet Cash flow Subsidiaries Outlook Financial Highlights – Despite difficult economic conditions revenues up by 1.8 % to EUR 1,368.8 mil. mainly due to security services – Decrease of EBITDA by 1.8 % down to EUR 394.4 mil.: • Decrease of reven
Slide 26: Consolidated Financial Result
Page 26 Profit & Loss Statement Segment Results Balance Sheet Cash flow Subsidiaries Outlook Consolidated Financial Result In % of Revenues EUR mil. 9M 2002 9M 2003 9M 2002 9M 2003 Revenues 1,344.2 1,368.8 EBITDA (1) 401.8 394.4 29.9% 28.8% EBIT (2) 224.0 232.1 16.7% 17.0% Net cash flow from 226.6 3
Slide 27: Profit & Loss Statement (1)
Page 27 Profit & Loss Statement Segment Results Balance Sheet Cash flow Subsidiaries Outlook Profit & Loss Statement (1) EUR mil. 9M 2002 9M 2003 % change Revenues 1,344.2 1,368.8 1.8% Total revenues (1) 1,418.3 1,420.7 0.2% Staff costs 633.9 688.0 8.5% Non-staff costs 359.3 358.4 (0.3%) Results at
Slide 28: Profit & Loss Statement (2)
Page 28 Profit & Loss Statement Segment Results Balance Sheet Cash flow Subsidiaries Outlook Profit & Loss Statement (2) EUR mil. 9M 2002 9M 2003 % change EBITDA (1) 401.8 394.4 (1.8%) Depreciation & Amortization (2) 158.7 162.3 2.3% Write-down of financial assets 19.1 0.0 (100.0%) EBIT (3) 224.0 23
Slide 29: Revenue Increase
Page 29 Profit & Loss Statement Segment Results Balance Sheet Cash flow Subsidiaries Outlook Revenue Increase Rise in revenues: - Increased contribution of Revenues and Total Revenues ICTS Europe EUR mil. 1,418.3 1,420.7 1500 74.1 51.9 - Higher revenues from security services at Frankfurt Airport 12
Slide 30: Staff Costs increased
Page 30 Profit & Loss Statement Segment Results Balance Sheet Cash flow Subsidiaries Outlook Staff Costs increased Rise in staff costs by 8.5 %: Staff costs EUR mil. – Increase of personnel at EUR 30.6K/ EUR 29.5K/ ICTS Europe 800 employee(1) employee(1) (+ 2,370 employees) 688.0 – Frankfurt Airport
Slide 31: Flat Development of Non-Staff Costs
Page 31 Profit & Loss Statement Segment Results Balance Sheet Cash flow Subsidiaries Outlook Flat Development of Non-Staff Costs Non-staff costs EUR mil. Non-staff costs down by 0.3%: 400 359.3 358.4 – Decrease of currency losses by EUR 18.2 mil. 300 192.0 201.1 – Lower expenses for consulting 200 1
Slide 32: Decrease in EBITDA
Page 32 Profit & Loss Statement Segment Results Balance Sheet Cash flow Subsidiaries Outlook Decrease in EBITDA EBITDA Decrease in EBITDA: EUR mil. 500 29.9 % – Decrease of revenues due to Iraq 28.8 % EBITDA- EBITDA- war, SARS and weak economic margin margin conditions 400 – Decline of revenues from
Slide 33: Increase in EBIT
Page 33 Profit & Loss Statement Segment Results Balance Sheet Cash flow Subsidiaries Outlook Increase in EBIT EBIT Increase in EBIT: EUR mil. 300 16.7 % 17.0 % – One-off item in Q3 2002: EBIT- EBIT- Write-down Manila: EUR 18.1 mil. margin margin 250 200 150 232.1 224.0 100 50 0 9M 2002 9M 2003 EBIT-
Slide 34: Net Result and Earnings per Share up
Page 34 Profit & Loss Statement Segment Results Balance Sheet Cash flow Subsidiaries Outlook Net Result and Earnings per Share up Net result EUR mil. Increase in Net Result: 150 EPS - Higher EBIT 1.18 EPS EUR 0.92 - Improved interest result 100 EUR by EUR 8.2 mil. 106.1 - Tax rate down from 56.2% 83
Slide 35: Agenda
Page 35 Agenda § Traffic § ICTS § Financials § Profit & Loss Statement § Segment Results § Balance Sheet § Cash flow § Subsidiaries § Outlook Presentation to Analysts, November 13, 2003
Slide 36: Segments – Business Activities and Revenue-Split
Page 36 Profit & Loss Statement Segment Results Balance Sheet Cash flow Subsidiaries Outlook Segments – Business Activities and Revenue-Split Aviation Non-Aviation Airside operations Retail Air travel specific Real Estate security services Car Parking Management Terminal management Others 47% 20% 28
Slide 37: Financials Aviation – Revenues from Security Services increased
Page 37 Profit & Loss Statement Segment Results Balance Sheet Cash flow Subsidiaries Outlook Financials Aviation – Revenues from Security Services increased EUR mil. 9M 2002 9M 2003 % change Slight rise in revenues: Revenues 646.5 650.5 0.6 – Higher revenues from Segment result 49.2 (4.9) (110.0) se
Slide 38: Financials Non-Aviation - Contribution to Group EBITDA amounts to 77.6%
Page 38 Profit & Loss Statement Segment Results Balance Sheet Cash flow Subsidiaries Outlook Financials Non-Aviation - Contribution to Group EBITDA amounts to 77.6% EUR mil. 9M 2002 9M 2003 % change Decrease in revenues: Revenues 282.6 274.1 (3.0) – Change of segmental Segment result 202.6 216.6 6.9
Slide 39: Split of Non-Aviation Revenues
Page 39 Latest Developments Capacity Expansion Non Aviation Aviation Ground Handling Manila Financials Outlook Split of Non-Aviation Revenues 36.3 9M 2003: EUR 274.1 mil. 17.5 80.0 119.0 21.3 Retail Car Parking other Airports Real Estate Others Presentation to Analysts, November 13, 2003
Slide 40: Revenue Split Retail
Page 40 Latest Developments Capacity Expansion Non Aviation Aviation Ground Handling Manila Financials Outlook Revenue Split Retail 13.1 9M 2003: EUR 80.0 mil. 6.4 1.6 51.7 2.3 4.9 Shopping Car Rental Telecommunication Banking F&B, Hotel Advertising Presentation to Analysts, November 13, 2003
Slide 41: Retail Revenues per Passenger
Page 41 Latest Developments Capacity Expansion Non Aviation Aviation Ground Handling Manila Financials Outlook Retail Revenues per Passenger EUR mil. EUR 2.19 80.0 per PAX 80 13.1 60 15.2 40 50.0 51.7 EUR 1.35 EUR 1.42 20 per PAX per PAX 0 9M 2002 9M 2003 Shopping Services Advertising Presentation t
Slide 42: Compared with European Peers, Frankfurt Airport has huge Potential in Retail Space
Page 42 Latest Developments Capacity Expansion Non Aviation Aviation Ground Handling Manila Financials Outlook Compared with European Peers, Frankfurt Airport has huge Potential in Retail Space 700 Retail space (airside only) per 1 million departing PAX 600 500 450 400 265 300 200 100 0 Peer 1 Peer
Slide 43: Financials Ground Handling – Stable Development of Revenues
Page 43 Profit & Loss Statement Segment Results Balance Sheet Cash flow Subsidiaries Outlook Financials Ground Handling – Stable Development of Revenues EUR mil. 9M 2002 9M 2003 % change Flat development of % revenues: Revenues 377.2 377.9 0.2 – Increased revenues from Segment result 10.7 (12.1) (21
Slide 44: Financials Others - Increase in Revenues mainly due to ICTS Europe
Page 44 Profit & Loss Statement Segment Results Balance Sheet Cash flow Subsidiaries Outlook Financials Others - Increase in Revenues mainly due to ICTS Europe EUR mil. 9M 2002 9M 2003 % change Rise of revenues: Revenues 37.9 66.3 74.9 – Change of segmental Segment result 3.9 12.4 217.9 allocation o
Slide 45: Agenda
Page 45 Agenda § Traffic § ICTS § Financials § Profit & Loss Statement § Segment Results § Balance Sheet § Cash flow § Subsidiaries § Outlook Presentation to Analysts, November 13, 2003
Slide 46: Balance Sheet
Page 46 Profit & Loss Statement Segment Results Balance Sheet Cash flow Subsidiaries Outlook Balance Sheet EUR mil. 31.12.02 30.09.03 Growth Equity ratio improved: Fixed assets 2,698.6 2,700.9 0.1% Other assets 922.1 1,014.6 10.0% – 9M 2003: 51.4 % (31.12.2002: 49.8 %) Total assets 3,620.7 3,715.5 2
Slide 47: Agenda
Page 47 Agenda § Traffic § ICTS § Financials § Profit & Loss Statement § Segment Results § Balance Sheet § Cash flow § Subsidiaries § Outlook Presentation to Analysts, November 13, 2003
Slide 48: Reconciliation to Free Cash Flow – Increased Operating and Free Cash Flow
Page 48 Profit & Loss Statement Segment Results Balance Sheet Cash flow Subsidiaries Outlook Reconciliation to Free Cash Flow – Increased Operating and Free Cash Flow EUR mil. Purchases of Net cash flow intangible assets, from operating property, plant and activities equipment -169.4 (LY: - 137.3) F
Slide 49: Agenda
Page 49 Agenda § Traffic § ICTS § Financials § Profit & Loss Statement § Segment Results § Balance Sheet § Cash flow § Subsidiaries § Outlook Presentation to Analysts, November 13, 2003
Slide 50: Lima Airport
Page 50 Profit & Loss Statement Segment Results Balance Sheet Cash flow Subsidiaries Outlook Lima Airport Successful operation of 9M 2002 9M 2003 % change the largest airport in Peru: PAX 3.2m 3.4m 3.9% – Increase of PAX ATMs 52.7K 51.3K (2.6%) – Growth of revenues Revenues (1) 50.8 46.4 (8.7%) in E
Slide 51: Antalya Airport
Page 51 Profit & Loss Statement Segment Results Balance Sheet Cash flow Subsidiaries Outlook Antalya Airport 9M 2002 9M 2003 % change – H1 weak due to Iraq war PAX 7.8m 7.5m (3.7%) and economic downturn ATMs 48.8K 45.4K (7.0%) in Europe Revenues (1) (2) 41.1 36.7 (10.7%) in EUR mil. – Strong recover
Slide 52: ICTS Europe
Page 52 Profit & Loss Statement Segment Results Balance Sheet Cash flow Subsidiaries Outlook ICTS Europe 9M 2002 9M 2003 % change – Significant increase Revenues (1) 138.6 187.2 35.1% of revenues in EUR mil. and EBITDA EBITDA (1) 9.4 13.8 46.8% – New contracts in France, Spain, Netherlands and Emplo
Slide 53: Hahn Airport
Page 53 Profit & Loss Statement Segment Results Balance Sheet Cash flow Subsidiaries Outlook Hahn Airport 9M 2002 9M 2003 % change – Further positive PAX 1.0m 1.8m 71.9% development ATMs 20.7K 23.3K 13.7% of low cost market Revenues (1) (2) 10.4 16.0 53.8% – No distinct effects in EUR mil. due to Ir
Slide 54: Agenda
Page 54 Agenda § Traffic § ICTS § Financials § Outlook Presentation to Analysts, November 13, 2003
Slide 55: Outlook
Page 55 Traffic ICTS Financials Outlook Outlook 2003: – Frankfurt: traffic slightly below 2002, but better than the target of -1% – Group traffic with positive growth – Earnings forecast stable: EBITDA at the level of last year 2004: – Traffic should recover, ICAO expects +4.5% – German economic con