Fraport AG · XETR:FRA
Fraport — H1 2003 Earnings Presentation
60 slides from Fraport's earnings presentation, Aug 14, 2003
Slide 1: Fraport Frankfurt Airport Services Worldwide
Fraport Frankfurt Airport Services Worldwide H1 2003 Results, August 14, 2003 Dr. Wilhelm Bender, CEO
Slide 2: Agenda
Slide 2 Agenda – Latest Developments • Traffic Figures 6 • SARS 9 • Capacity Expansion 16 • German Airports 20 • Retail 26 – Financials H1 2003 • Profit & Loss Statement 29 • Segment Results 39 • Balance Sheet 48 • Cash flow 50 • Subsidiaries 52 • Outlook 57 H1 2003 Results, August 14, 2003
Slide 3: Key Messages H1 2003
Slide 3 Key Messages H1 2003 – Q2 2003: Iraq impact less severe than expected, but traffic loss of four per cent due to SARS. – The risks were countered by tight cost control and flexible capacity management to limit negative effects on results. – Traffic recovery continues, SARS effect is fading ou
Slide 4: Strategy
Slide 4 Strategy Core Business Core Business Growth Business Expansion Consolidation – Exploit strong position – Expand capacity to – Leverage Fraport’s in aviation and ground secure medium-term expertise to expand services growth and strengthen business beyond competitive position home base – Promo
Slide 5: Agenda
Slide 5 Agenda § Latest Developments § Traffic Figures § SARS § Capacity Expansion § German Airports § Retail § Financials H1 2003 § Profit & Loss Statement § Segment Results § Balance Sheet § Cash flow § Subsidiaries § Outlook H1 2003 Results, August 14, 2003
Slide 6: Traffic Figures 2003 at Frankfurt Airport
Slide 6 Traffic Figures SARS Capacity Expansion German Airports Retail Financials H1 2003 Traffic Figures 2003 at Frankfurt Airport Q1 2003 Q2 2003 H1 2003 July Passengers 10,567,738 11,899,187 22,466,925 4,499,816 ∆% 0.4 (4.2) (2.1) (1.9) Air Freight (t) 377,290 370,056 747,346 126,035 ∆% 6.9 (0.1)
Slide 7: Group Traffic Figures 2003
Slide 7 Traffic Figures SARS Capacity Expansion German Airports Retail Financials H1 2003 Group Traffic Figures 2003 PAX Q1 2003 April May June Q2 2003 Frankfurt (1) 10,566,133 3,710,514 3,937,133 4,249,704 11,897,351 ∆% 0.5 (5.2) (5.3) (2.3) (4.2) Antalya 736,681 326,739 707,802 1,086,932 2,121,137
Slide 8: Impact of Gulf Wars / SARS: Less severe than in 1991
Slide 8 Traffic Figures SARS Capacity Expansion German Airports Retail Financials H1 2003 Impact of Gulf Wars / SARS: Less severe than in 1991 40% FRA monthly PAX development 30% Mar 19, 2003: recovery 20% Start of war on Iraq 10% 0% -10% unc e nc ide 1990/1992 erta nf -20% k co a inty we 2002/2003
Slide 9: Agenda
Slide 9 Agenda § Latest Developments § Traffic Figures § SARS § Capacity Expansion § German Airports § Retail § Financials H1 2003 § Profit & Loss Statement § Segment Results § Balance Sheet § Cash flow § Subsidiaries § Outlook H1 2003 Results, August 14, 2003
Slide 10: SARS: Traffic Exposure to South-East Asia and Canada
Slide 10 Traffic Figures SARS Capacity Expansion German Airports Retail Financials H1 2003 SARS: Traffic Exposure to South-East Asia and Canada 4% of total PAX 8% Canada, mainly Toronto of total PAX China/Hongkong 07/2003: +5.1% Singapore Taiwan Thailand Indonesia Philippines Vietnam 07/2003: -18.2%
Slide 11: SARS has still a negative, but fading Impact
Slide 11 Traffic Figures SARS Capacity Expansion German Airports Retail Financials H1 2003 SARS has still a negative, but fading Impact H1 2003 Results, August 14, 2003
Slide 12: SARS-Impact: Airlines are returning to old Patterns in Terms of Movements
Slide 12 Traffic Figures SARS Capacity Expansion German Airports Retail Financials H1 2003 SARS-Impact: Airlines are returning to old Patterns in Terms of Movements… Movements Available Seats / Passengers 100 Traffic Supply and Demand to China 35.000 90 30.000 80 70 25.000 60 20.000 50 15.000 40 30
Slide 13: …but not yet in Terms of Capacity
Slide 13 Traffic Figures SARS Capacity Expansion German Airports Retail Financials H1 2003 …but not yet in Terms of Capacity SLF MAS [seats] 100% Traffic Supply and Utilisation to China 350 90% 325 80% 300 70% 275 60% 250 50% 225 SLF* *SLF = Seat Load Factor MAS** **MAS = Medium Aircraft Size 40% 20
Slide 14: Break-down of Countries with SARS-Impact: Strong Signs of Recovery
Slide 14 Traffic Figures SARS Capacity Expansion German Airports Retail Financials H1 2003 Break-down of Countries with SARS-Impact: Strong Signs of Recovery Passengers Seat Load Factor (Final Destination) (Direct Flights) Countries May June July May June July China/ Hongkong -73.2% -52.4% -22.8% 49
Slide 15: PAX-Development 1980-2003: Long-term Trend continues
Slide 15 Traffic Figures SARS Capacity Expansion German Airports Retail Financials H1 2003 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.
Slide 16: Agenda
Slide 16 Agenda § Latest Developments § Traffic Figures § SARS § Capacity Expansion § German Airports § Retail § Financials H1 2003 § Profit & Loss Statement § Segment Results § Balance Sheet § Cash flow § Subsidiaries § Outlook H1 2003 Results, August 14, 2003
Slide 17: FRA - Capacity Expansion Plan 2015
Slide 17 Traffic Figures SARS Capacity Expansion German Airports Retail Financials H1 2003 FRA - Capacity Expansion Plan 2015 Terminal 3 NW-Runway A380 Maintenance (Lufthansa) H1 2003 Results, August 14, 2003
Slide 18: Procedures for Lufthansa's A380 Maintenance Hangar
Slide 18 Traffic Figures SARS Capacity Expansion German Airports Retail Financials H1 2003 Procedures for Lufthansa’s A380 Maintenance Hangar Planning Approval Construction Operation ü December ü January 2003: - 2004: Start of - 2007: Readiness 2002: Com- Filing and start construction for operation
Slide 19: Capacity Expansion Process on Track
Slide 19 Traffic Figures SARS Capacity Expansion German Airports Retail Financials H1 2003 Capacity Expansion Process on Track Planning Approval Construction Operation ü 1997: Start of üJune 2002: - 2005: Start of - 2006: End of discussions Regional plan- runway con- construction of the ü 1998-2000:
Slide 20: Agenda
Slide 20 Agenda § Latest Developments § Traffic Figures § SARS § Capacity Expansion § German Airports § Retail § Financials H1 2003 § Profit & Loss Statement § Segment Results § Balance Sheet § Cash flow § Subsidiaries § Outlook H1 2003 Results, August 14, 2003
Slide 21: Slot Demand in Frankfurt: far above Capacity
Slide 21 Traffic Figures SARS Capacity Expansion German Airports Retail Financials H1 2003 Slot Demand in Frankfurt: far above Capacity 120 Slot Demand FRA Summer Schedule 2003 100 80 Capacity 60 40 20 0 0400 0500 0600 0700 0800 0900 1000 1100 - 1200 1300 1400 1500 1600 1700 1800 1900 2000 2100 - -
Slide 22: Intercont: Prime Traffic is concentrated in Frankfurt
Slide 22 Traffic Figures SARS Capacity Expansion German Airports Retail Financials H1 2003 Intercont: Prime Traffic is concentrated in Frankfurt Intercont-Flights to and from Germany by Airport Frankfurt Munich Dusseldorf Others 116.322 128.148 137.699 133.702 126.845 50.143 100% 15,8% 15,5% 13,6% 1
Slide 23: European Traffic: Munich and Frankfurt win Market Share
Slide 23 Traffic Figures SARS Capacity Expansion German Airports Retail Financials H1 2003 European Traffic: Munich and Frankfurt win Market Share European Flights to and from Germany by Airport Frankfurt Munich Dusseldorf Hamburg Cologne Others 787.922 837.305 890.301 890.104 869.437 388.712 100% 9
Slide 24: Domestic Traffic: Not relevant for Frankfurt due to central location
Slide 24 Traffic Figures SARS Capacity Expansion German Airports Retail Financials H1 2003 Domestic Traffic: Not relevant for Frankfurt due to central location Domestic Flights within Germany by Airport Munich Frankfurt Berlin-Tegel Cologne Dusseldorf Others 765.180 765.737 782.016 754.901 761.146 3
Slide 25: German Airports: Low Competition for Frankfurt
Slide 25 Traffic Figures SARS Capacity Expansion German Airports Retail Financials H1 2003 German Airports: Low Competition for Frankfurt – Frankfurt is No. 1 in Intermodality, Catchment Area, Punctuality and Connectivity. – Lufthansa’s premium traffic is concentrated in Frankfurt: Intercont Traffic
Slide 26: Agenda
Slide 26 Agenda § Latest Developments § Traffic Figures § SARS § Capacity Expansion § German Airports § Retail § Financials H1 2003 § Profit & Loss Statement § Segment Results § Balance Sheet § Cash flow § Subsidiaries § Outlook H1 2003 Results, August 14, 2003
Slide 27: Further Increase in Retail Space and Quality
Slide 27 Traffic Figures SARS Capacity Expansion German Airports Retail Financials H1 2003 Further Increase in Retail Space and Quality Success Factors Retail Space (shopping) in sqm - without Terminal 3 19650 19977 14960 15146 15146 14328 13550 Strategy / Marketing Retail operations and quality man
Slide 28: Compared with European Peers, Frankfurt Airport has huge Potential in Retail Space
Slide 28 Traffic Figures SARS Capacity Expansion German Airports Retail Financials H1 2003 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 2 Peer 3 Peer 4 FRA
Slide 29: Fraport Frankfurt Airport Services Worldwide
Fraport Frankfurt Airport Services Worldwide H1 2003 Results, August 14, 2003 Dr. Stefan Schulte, CFO
Slide 30: Agenda Financials H1 2003
Slide 2 Agenda Financials H1 2003 § Latest Developments § Traffic Figures § SARS § Capacity Expansion § German Airports § Retail § Financials H1 2003 § Profit & Loss Statement § Segment Results § Balance Sheet § Cash flow § Subsidiaries § Outlook H1 2003 Results, August 14, 2003
Slide 31: Financial Highlights
Slide 3 Profit & Loss Statement Segment Results Balance Sheet Cash flow Subsidiaries Outlook Financial Highlights – Despite difficult economic conditions revenues up by 2.6 % to EUR 877.7 mil. mainly due to security services – Decrease of EBITDA by 3.4 % down to EUR 226.1 mil.: • Decrease of revenue
Slide 32: Consolidated Financial Result
Slide 4 Profit & Loss Statement Segment Results Balance Sheet Cash flow Subsidiaries Outlook Consolidated Financial Result In % of Revenues EUR mil. H1 2002 H1 2003 H1 2002 H1 2003 Revenues 855.2 877.7 EBITDA (1) 234.0 226.1 27.4% 25.8% EBIT 128.6 118.6 15.0% 13.5% Net cash from operating 125.4 202.
Slide 33: Profit & Loss Statement
Slide 5 Profit & Loss Statement Segment Results Balance Sheet Cash flow Subsidiaries Outlook Profit & Loss Statement EUR mil. H1 2002 H1 2003 Growth Revenues 855.2 877.7 2.6% Total revenues (1) 915.5 906.8 (1.0%) Staff costs 428.6 461.6 7.7% Non-staff costs 246.7 229.3 (7.1%) Results at equity (6.7)
Slide 34: Profit & Loss Statement
Slide 6 Profit & Loss Statement Segment Results Balance Sheet Cash flow Subsidiaries Outlook Profit & Loss Statement EUR mil. H1 2002 H1 2003 Growth EBITDA (1) 234.0 226.1 (3.4%) Depreciation & Amortization (2) 104.8 107.4 2.5% Write-down of financial assets 0.6 0.1 (83.3%) EBIT 128.6 118.6 (7.8%) I
Slide 35: Revenue Increase
Slide 7 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. 915.5 906.8 1000 - Higher revenues from 60.3 29.1 security services 800 Opposite effects: 600 8
Slide 36: Staff Costs Increased
Slide 8 Profit & Loss Statement Segment Results Balance Sheet Cash flow Subsidiaries Outlook Staff Costs Increased Staff costs Rise in staff costs by 7.7 %: EUR mil. EUR EUR – Increase of personnel at 600 20.8K/ 19.9K/ ICTS Europe employee employee (1) (1) (+ 2,225 employees) 500 – At Frankfurt Airp
Slide 37: Decrease of Non-Staff Costs
Slide 9 Profit & Loss Statement Segment Results Balance Sheet Cash flow Subsidiaries Outlook Decrease of Non-Staff Costs Non-staff costs EUR mil. 300 Non-staff costs down by 7.1%: 246.7 229.3 – Decrease of currency losses 200 – Reaction to the difficult market environment: 128.4 124.0 Lower expenses
Slide 38: Decrease in EBITDA and EBIT
Slide 10 Profit & Loss Statement Segment Results Balance Sheet Cash flow Subsidiaries Outlook Decrease in EBITDA and EBIT EBITDA EBIT EUR mil. EUR mil. Decrease in EBITDA 15.0 % and EBIT: 300 27.4 % 160 13.5 % 25.8 % EBIT- EBITDA- EBITDA- margin EBIT- - Lower net margin margin margin 240 gains from
Slide 39: Net Result and Earnings per Share down
Slide 11 Profit & Loss Statement Segment Results Balance Sheet Cash flow Subsidiaries Outlook Net Result and Earnings per Share down Net result EUR mil. Decrease in Net result: EPS EPS 0.59 0.56 - Less passengers 60 EUR EUR - Decreased currency gains 40 Opposite effects: 53.6 50.2 - Improved financi
Slide 40: Agenda Financials H1 2003
Slide 12 Agenda Financials H1 2003 § Latest Developments § Traffic Figures § SARS § Capacity Expansion § German Airports § Retail § Financials H1 2003 § Profit & Loss Statement § Segment Results § Balance Sheet § Cash flow § Subsidiaries § Outlook H1 2003 Results, August 14, 2003
Slide 41: Segment Overview – Business Activities and Revenues
Slide 13 Profit & Loss Statement Segment Results Balance Sheet Cash flow Subsidiaries Outlook Segment Overview – Business Activities and Revenues Aviation Non-Aviation Airside operations Retail Air travel specific Real Estate security services Car Parking Management Terminal management 47 % Others 2
Slide 42: Financials Aviation – Revenues for Security Services increased
Slide 14 Profit & Loss Statement Segment Results Balance Sheet Cash flow Subsidiaries Outlook Financials Aviation – Revenues for Security Services increased EUR mil. H1 2002 H1 2003 Growth Rise in revenues Revenues 393.8 409.3 3.9% due to Segment result (3.7) (18.3) (394.6%) – Higher revenues from E
Slide 43: Financials Non-Aviation - Contribution to Group EBITDA amounts to 86.9%
Slide 15 Profit & Loss Statement Segment Results Balance Sheet Cash flow Subsidiaries Outlook Financials Non-Aviation - Contribution to Group EBITDA amounts to 86.9% EUR mil. H1 2002 H1 2003 Growth Decrease in revenues Revenues 194.9 179.1 (8.1%) due to Segment result 143.4 135.5 (5.5%) – Change of
Slide 44: Decline of Non-Aviation Revenues
Slide 16 Profit & Loss Statement Segment Results Balance Sheet Cash flow Subsidiaries WM 2005 Outlook Decline of Non-Aviation Revenues EUR mil. 23.5 Non-Aviation 8.9 H1 2003: EUR 179.1 mil. 8.4 (H1 2002: EUR 194.9 mil.) 42.2 82.3 13.8 Retail FRA Retail Subsidiary FRA Car Parking Airport Subsidiaries
Slide 45: Revenue Split Retail
Slide 17 Profit & Loss Statement Segment Results Balance Sheet Cash flow Subsidiaries WM 2005 Outlook Revenue Split Retail EUR mil. total: EUR 51.1 mil. 8.9 3.9 1.0 32.7 1.6 3.0 Shopping Car Rental Telecommunication Banking F&B, Hotel Retail Subisidary H1 2003 Results, August 14, 2003
Slide 46: Retail Revenues per PAX
Slide 18 Profit & Loss Statement Segment Results Balance Sheet Cash flow Subsidiaries Outlook Retail Revenues per PAX EUR mil. EUR 2.27 per PAX 60 51.1 18.6 8.9 40 9.5 67.6 32.9 32.7 20 EUR 1.43 EUR 1.46 per PAX per PAX 0 H1 2002 H1 2003 Retail / Shopping Other Concessions Advertising H1 2003 Result
Slide 47: Financials Ground Handling - Stable Development of Revenues at Frankfurt Airport
Slide 19 Profit & Loss Statement Segment Results Balance Sheet Cash flow Subsidiaries Outlook Financials Ground Handling - Stable Development of Revenues at Frankfurt Airport EUR mil. H1 2002 H1 2003 Growth Flat development at Revenues 244.6 245.0 0.2% Frankfurt Airport: Segment result (10.2) (17.7)
Slide 48: Financials Others - Increase in Revenues mainly due to ICTS Europe
Slide 20 Profit & Loss Statement Segment Results Balance Sheet Cash flow Subsidiaries Outlook Financials Others - Increase in Revenues mainly due to ICTS Europe EUR mil. H1 2002 H1 2003 Growth Increase in revenues Revenues 21.9 44.3 102.3% due to Segment result 5.9 9.0 52.5% – Change of segmental EB
Slide 49: Agenda Financials H1 2003
Slide 21 Agenda Financials H1 2003 § Latest Developments § Traffic Figures § SARS § Capacity Expansion § German Airports § Retail § Financials H1 2003 § Profit & Loss Statement § Segment Results § Balance Sheet § Cash flow § Subsidiaries § Outlook H1 2003 Results, August 14, 2003
Slide 50: Balance Sheet
Slide 22 Profit & Loss Statement Segment Results Balance Sheet Cash flow Subsidiaries Outlook Balance Sheet EUR mil. 31.12.02 30.06.03 Growth Fixed assets 2,698.6 2,690.8 (0.3%) Other assets 922.1 950.6 3.1% Total assets 3,620.7 3,641.4 0.6% Equity 1,803.4 1,853.8 2.8% Debt (1) 909.7 959.0 5.4% Othe
Slide 51: Agenda Financials H1 2003
Slide 23 Agenda Financials H1 2003 § Latest Developments § Traffic Figures § SARS § Capacity Expansion § German Airports § Retail § Financials H1 2003 § Profit & Loss Statement § Segment Results § Balance Sheet § Cash flow § Subsidiaries § Outlook H1 2003 Results, August 14, 2003
Slide 52: Reconciliation to free cash flow
Slide 24 Profit & Loss Statement Segment Results Balance Sheet Cash flow Subsidiaries Outlook Reconciliation to free cash flow EUR mil. Purchases of Net cash from intangible assets, operating property, plant and activities equipment -114.3 (LY: - 97.0) Free Cash + 202.7 Other financial Payments Flow
Slide 53: Agenda Financials H1 2003
Slide 25 Agenda Financials H1 2003 § Latest Developments § Traffic Figures § SARS § Capacity Expansion § German Airports § Retail § Financials H1 2003 § Profit & Loss Statement § Segment Results § Balance Sheet § Cash flow § Subsidiaries § Outlook H1 2003 Results, August 14, 2003
Slide 54: Lima Airport
Slide 26 Profit & Loss Statement Segment Results Balance Sheet Cash flow Subsidiaries Outlook Lima Airport – Successful operation of H1 2002 H1 2003 Growth the largest airport in Peru PAX 2.0 mil. 2.1 mil. 2.8% • Increase of PAX ATMs 34.5K 33.1K (3.8%) Revenues (1) 33.3 30.0 (10.0%) • Decrease of in
Slide 55: Antalya Airport
Slide 27 Profit & Loss Statement Segment Results Balance Sheet Cash flow Subsidiaries Outlook Antalya Airport H1 2002 H1 2003 Growth – H1 weak due to Iraq war PAX 3.4 mil. 2.9 mil. (16.6%) and economic downturn ATMs 23.2K 19.2K (17.2%) in Europe Revenues 15.7 14.5 (7.6%) in EUR mil. – Recovery since
Slide 56: ICTS Europe
Slide 28 Profit & Loss Statement Segment Results Balance Sheet Cash flow Subsidiaries Outlook ICTS Europe H1 2002 H1 2003 Growth – Significant increase of revenues Revenues (1) 86.9 118.2 36.0% and EBITDA in EUR mil. – New contracts in France, EBITDA (1) 3.2 8.4 162.5% Spain, Netherlands and Employe
Slide 57: Hahn Airport
Slide 29 Profit & Loss Statement Segment Results Balance Sheet Cash flow Subsidiaries Outlook Hahn Airport H1 2002 H1 2003 Growth - Further positive PAX 0.6 mil. 1.1 mil. 82.1% development ATMs 13.5K 14.6K 8.1% of low cost market Revenues 6.3 9.9 57.1% in EUR mil. - No distinct effects EBITDA (5.2)
Slide 58: Agenda Financials H1 2003
Slide 30 Agenda Financials H1 2003 § Latest Developments § Traffic Figures § SARS § Capacity Expansion § German Airports § Retail § Financials H1 2003 § Profit & Loss Statement § Segment Results § Balance Sheet § Cash flow § Subsidiaries § Outlook H1 2003 Results, August 14, 2003
Slide 59: Outlook
Slide 31 Profit & Loss Statement Segment Results Balance Sheet Cash flow Subsidiaries Outlook Outlook – High uncertainty because of weak economy – Traffic: 2003 PAX might not reach 2002 level in Frankfurt – Earnings forecast stable: EBITDA and net income on last year’s level H1 2003 Results, August
Slide 60: Thank you for your attention!
Thank you for your attention!