Fraport AG · XETR:FRA
Fraport — FY2001 Earnings Presentation
65 slides from Fraport's earnings presentation, Apr 23, 2002
Slide 1: Fraport AG Frankfurt Airport Services Worldwide
Fraport AG Frankfurt Airport Services Worldwide Frankfurt, April 23, 2002 Presentation to Analysts Results 2001
Slide 2: Disclaimer
Presentation to Analysts - Results 2001 Disclaimer This document has been prepared by Fraport AG Frankfurt Airport Services Worldwide. As far as this document contains forward-looking statements instead of historical statements and discussions, these forward-looking statements rely on a number of as
Slide 3: 2001 at a Glance
Presentation to Analysts - Results 2001 2001 at a Glance • IPO • Pilot strike • Weak economy • September 11th • Traffic decrease • Expansion programme on track • Revenues up • Write downs on Manila • Results can not match 2000 figures 3
Slide 4: Strategy
Presentation to Analysts - Results 2001 Strategy Core Business Core Business Growth Business Expansion Consolidation • Exploit strong position in • Capacity expansion to • Leverage Fraport’s expertise Aviation and Ground secure medium-term growth beyond home location Services and competitive positio
Slide 5: Europe's Gateway to the World
Core Business Consolidation Europe’s Gateway to the World Flights to 289 destinations in 102 countries worldwide North America 35 Europe Frankfurt 147 East Asia Middle East 20 16 Central Asia 17 Africa Latin America 25 26 Southwest Pacific 3 Source: Fraport AG 5
Slide 6: Frankfurt – No. 7 for Global Airport Passenger and Cargo Traffic
Core Business Consolidation Frankfurt – No. 7 for Global Airport Passenger and Cargo Traffic Airport 2001 Airport 2001 (1) Passengers (m) Cargo (t ’000) Atlanta 75.8 Memphis 2,631 Chicago O’Hare 66.8 Los Angeles 2,123 Los Angeles 61.0 Hong Kong 2,100 London / Heathrow 60.7 Anchorage 1,691 Tokyo / Ha
Slide 7: Traffic Figures at Frankfurt Airport
Core Business Consolidation Traffic Figures at Frankfurt Airport 1999 2000 2001 ∆ 00/01 PAX (m) 45.9 49.4 48.6 (1.6)% Air Freight (t 000) 1,428 1,589 1,494 (6.0)% Mail (t 000) 139 141 141 0.1% ATMs (000) 439 459 457 (0.5)% PAX/PAX-ATM 115 118 116 (1.9)% MTOW (t 000) 23,764 25,370 25,565 0.8% Seat Lo
Slide 8: PAX Development Impacted by Lufthansa Strike and Terror Attack
Core Business Consolidation PAX Development Impacted by Lufthansa Strike and Terror Attack % PAX growth compared to same month of last year 15,0% 10,0% 5,0% 0,0% Jan Feb Mar Apr May Jun Jul Aug Sep Okt Nov Dez Jan Feb Mrz -5,0% 01 01 01 01 01 01 01 01 01 01 01 01 02 02 02 -10,0% -15,0% -20,0% -25,0%
Slide 9: Long-Haul Traffic Will Focus on the Majors Operating out of Global Hubs
Core Business Consolidation Long-Haul Traffic Will Focus on the Majors Operating out of Global Hubs national/regional continental long-haul continental national/regional Malmoe Seattle CPH 2 2 Overseas New 1 Frank- Europe York furt San Jose 2 2 Vienna Graz Denver Airport Airline view Origin Destinat
Slide 10: LH Concentrates International Traffic at FRA
Core Business Consolidation LH Concentrates International Traffic at FRA Comparison of Summer Timetable 2001 and 2002 (flights and seats): Weekly Lufthansa departures on average Passenger Mix 1999-2001 Summer 2001 Summer 2002 Change (%) PAX m 50 International Takeoffs Seats Takeoffs Seats Takeoffs S
Slide 11: European High-Speed Railway Expansion
Core Business Consolidation European High-Speed Railway Expansion Copenhagen • High-Speed railway expansion will substantially shorten travel times until 2015. 3:51 9:18 Amsterdam 3:25 6:55 • Frankfurt is well positioned due to its 4:49 2:48 Hamburg excellent national and international London Berlin
Slide 12: Frankfurt – Most Attractive Hub Airport in Europe
Core Business Consolidation Frankfurt – Most Attractive Hub Airport in Europe IATA Connectivity Index Frankfurt Schiphol Paris - CDG Heathrow Zurich Madrid Copenhagen Gatwick Munich 0 5.000 10.000 15.000 20.000 25.000 30.000 35.000 40.000 Source: IATA 2000 Direct Hub 12
Slide 13: Leading European Hub Airport
Core Business Consolidation Leading European Hub Airport 2000 Transfer Passengers as a Proportion of Total PAX m at Major European Hub Airports 70 60 50 40 30 20 50% 10 30% 38% 42% 39% 45% 47% 0 20% 27% ) (1 h k ol rid h ow ric ic G t en ur ph ic w D Zu ad hr un kf ag -C at hi an at M G M Sc nh He r
Slide 14: Punctual Hub Services
Core Business Consolidation Punctual Hub Services FRA Most Punctual Major Hub in Europe % of Total Departure Flights Delayed 40% 36,4 2000 2001 35% 31,3 32,3 28,7 30,3 30% 27,3 25,0 25% 23,9 20,0 20,2 20% 15% 10% 5% 0% Frankfurt London Amsterdam Paris CDG Madrid Heathrow 14 Source: AEA Feb. 2001/Feb
Slide 15: Reliable Integrated Hub Services
Core Business Consolidation Reliable Integrated Hub Services % % of Total Departure Flights Delayed due to Load and Aircraft Handling 8 7 6 5 4 3 2 1 0 m na ow a en G t ns ur da en D hr ag kf pe C er Vi at nh an st ris al He pe Fr M m Pa •Delayed by more than 15 minutes A Co Source: AEA, February 20
Slide 16: Ground Handling at FRA
Core Business Consolidation Ground Handling at FRA • Stable market share of 90% • New services offered: - Container service - More ramp agent services • Management of labour more flexible - innovative shift systems - reduction of overtime and holidays • 125 people moved to federal state reimbursed s
Slide 17: Productivity Trends at Frankfurt
Core Business Consolidation Productivity Trends at Frankfurt Workload Units(1) per Employee 5.000 4.000 3.000 2.000 1.000 0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Despite adverse development, only slight decrease in productivity Note: (1) 1 WLU = 1 passenger or 100kg cargo 17
Slide 18: Frankfurt Airport Charges 2002
Core Business Consolidation Frankfurt Airport Charges 2002 2001 2002 2002 valid from valid as of Jan 1 to Mar 31 April 01 in Euro in Euro in Euro Passenger Charges per Departing Passenger • Transfer & Transit 9,20 9,20 9,31 • Domestic 10,20 11,00 11,11 • Europe (EU) 12,95 13,00 13,11 • Europe (Non-E
Slide 19: Frankfurt Airport Charges Pricing Structure 2002
Core Business Consolidation Frankfurt Airport Charges Pricing Structure 2002 Basic Basic Route / Aircraft MTOW Load Landing Parking Infra- PAX Total Type Type (t) Factor Fees Fees structure Fees EURO (based on (EURO 1.6 per (based on (70% load t per avg. 70% in movement hrs. before factor, 50% 2002)
Slide 20: Impact of Airport and ATC Charges on Costs of Intra-European Services, 2000
Core Business Consolidation Impact of Airport and ATC Charges on Costs of Intra-European Services, 2000 Airport Charges Navig. Charges as % Total Cost as % Total Cost British Midland 15.9 5.0 Aer Lingus 11.9 3.9 Austrian 7.9 5.4 BA 6.1 4.1 Iberia 6.4 5.4 Finnair 5.8 5.0 SAS 5.4 4.5 Swissair 4.7 5.9
Slide 21: Slot Demand on an Average Week at FRA as of November 2001
Core Business Consolidation Slot Demand on an Average Week at FRA as of November 2001 120 Total Number of Movements per 60 Mins. 100 80 60 40 20 0 0400 - 0500 - 0600 - 0700 - 0800 - 0900 - 1000 - 1100 - 1200 - 1300 - 1400 - 1500 - 1600 - 1700 - 1800 - 1900 - 2000 - 2100 - 0455 0555 0655 0755 0855 09
Slide 22: Second-largest Air Travel Market in Europe
Core Business Growth Second-largest Air Travel Market in Europe Top 5 European Countries for International and Domestic Scheduled Passengers (2000) 100 Passengers (m) 80 60 International 40 Domestic 20 0 UK Germany France Spain Italy Source: IATA, Merrill Lynch 22
Slide 23: Strong Growth Prospects in Germany
Core Business Growth Strong Growth Prospects in Germany Low Penetration of Air Travel in Germany Scheduled Intern. Passenger Movements per Population (1999) Intern. Flights per Person (x) 4 3,5 3 2,5 2 1,5 1 0,5 0 m s y k K ly nd nd ce n an ar iu U ai Ita m an lg rla la m Sp en Be er er Fr he itz G
Slide 24: One of Three Expansion Options will be Selected
Core Business Growth One of Three Expansion Options will be Selected North-West delivers 120 ATM. p.h. with lowest impact on North-East has higher environment and local impact on environment residents and residents South delivers only 112 ATM p.h.
Slide 25: Capacity Expansion Process on Time
Core Business Growth Capacity Expansion Process on Time Planning Approval Construction Operation ¸ 1997: Start of ¸ Official start • 2004: Completion • 2006: New runway discussions of regional of approval goes into operation planning proce- process ¸ 1998-2000: • 2007-2013: New Mediation dure on • S
Slide 26: Expansion Budget
Core Business Growth Expansion Budget Fraport forecasts total expansion-related costs of approx. € 3.3 bn up until 2014 Phasing of Investments and Expenses (inflation adjusted) The costs include: • Runway and ramp system • Terminal facilities with link-up • Infrastructure • Demolition, site clearanc
Slide 27: Retail Income Increased Despite Passenger Decrease
Core Business Growth Retail Income Increased Despite Passenger Decrease • Retail income per passenger increased from € 1,16 to € 1,24 • 13,200 sqm of retail space (FRA) at the end of December 2001 (additional 800 sqm were not opened due to fire protection measures) • Duty Free/Travel Value - produce
Slide 28: Retail - 60% Increase in Space by 2007 at Frankfurt
Core Business Growth Retail - 60% Increase in Space by 2007 at Frankfurt Total Space incl. F&B 24,500 sq.m 25,630 sq.m 26,260 sq.m 29,690 sq.m 32,110 sq.m Retail Space 12,500 sq.m 13,630 sq.m 13,975 sq.m 16,860 sq.m 19,040 sq.m Terminal 1 Terminal 1 Terminal 1 + 2 Terminal 1 1,130 sq.m 630 sq.m 3,43
Slide 29: New shops Installed since June 2001
Core Business Growth New shops Installed since June 2001 June 2001 August 2001 September 2001 Travel Value Relay Little Bit Terminal 1, Level2, A-Schengen AIRail Terminal Terminal 1, Level 2, A-Schengen September 2001 September 2001 September 2001 Relay Duty Free Christ Terminal 1, Level 2, A-Scheng
Slide 30: New shops Installed since June 2001
Core Business Growth New shops Installed since June 2001 October 2001 November 2001 November 2001 Heinemann Boutique Duty Free Gifts+++ Terminal 1, Level 2, B-Transit Terminal 1, Level 3, A-Transit Terminal 1, Level 3, A-Transit December 2001 January 2002 February 2002 Travel Value Intermezzo AIRail
Slide 31: New shops Installed since June 2001
Core Business Growth New shops Installed since June 2001 February 2002 February 2002 March 2002 Pens+++ H. Stern House of Champions Terminal 1, Level 2 Terminal 1, Level 2 Terminal 1, Level 2, A-Schengen March 2002 Art & Design Terminal 1, Level 3, A-Transit 31
Slide 32: New Retail Complex, Terminal 1
Core Business Growth New Retail Complex, Terminal 1 • Additional retail space of 3,000 sqm • Central location serving most of the passengers in Terminal 1 • Start of construction: 2003 • Planned inauguration: 2004 32
Slide 33: Planning ahead: Airports as Retail Market Places
Core Business Growth Planning ahead: Airports as Retail Market Places 33
Slide 34: AIRail Center
AIRail Center • Consortium: AIRail GmbH • Total space 186,000 sqm • Hotel, offices, retail, restaurants, parking • 5-star hotel „Le Meridien“ with 680 rooms • Retail space 2,600 sqm • Inauguration: 2005 34
Slide 35: Criteria for External Growth
Business Expansion Criteria for External Growth Internationalisation driven by core business and competencies (terminal management, retail, ground services) Strategic Fit No financial investor Management control Value Creation Risk-adjusted project-specific WACC Efficient allocation of scarce financ
Slide 36: Substantial PAX Increase at Airport Frankfurt-Hahn
Business Expansion Substantial PAX Increase at Airport Frankfurt-Hahn Ryanair Destinations PAX at Airport Frankfurt-Hahn 97-01 HHN – Frankfurt-Hahn HHN BGY – Milan Bergamo 500000 BGO – Bournemouth 450000 400000 MLP – Montpellier 350000 PGF – Perpignan 300000 PAX PIK – Glasgow Prestwick 250000 PSA –
Slide 37: Airports Frankfurt FRA / HHN - London
Business Expansion Airports Frankfurt FRA / HHN - London 37
Slide 38: Highway Expansion Airport Frankfurt-Hahn
Business Expansion Highway Expansion Airport Frankfurt-Hahn 4-Track Expansion of Road B50: - 2003: 13 km - 2006: complete route Rheiböllen-Hahn - new route Hahn-Wittlich planned HHNHAHN FRA 38
Slide 39: Antalya/Bayindir
Business Expansion Antalya/Bayindir • Highly successful BOT project • Second largest airport in Turkey • Revenue growth 2001: 41.5% 2000 2001 PAX m 7.5 9.2 Growth 53% 23% 39
Slide 40: Lima
Business Expansion Lima • Operations started in February 2001 at Jorge Chavez Lima-Callao International Airport • largest airport in Peru • Fast growing South American aviation market • PAX: 3.7m in 2001 • Revenues: US$ 49.8m 40
Slide 41: Key Financial Highlights
Key Financial Highlights 2.9 % revenue growth despite negative traffic impact Moderate decrease in revenues after September 11 Decline in EBITDA only by 4.9 % EBIT down by 28.7 % due to substantial write-downs of financial assets IPO increased equity ratio to 52.5 % and reduced gearing to 20.6 % 41
Slide 42: Profit & Loss Statement
Profit & Loss Statement €m 2000 2001 Growth Revenues 1,536.2 1,580.6 2.9 % (1) Total Revenues 1,620.8 1,713.8 5.7 % Staff costs 633.4 689.2 8.8 % Cost of materials 264.4 281.7 6.5 % Other operating expenses 193.7 225.0 16,2 % EBITDA (2) 533.5 507.2 (4.9 %) EBITDA margin (3) 34.7 % 32.1 % Depreciatio
Slide 43: Moderate Revenue Growth despite Traffic Decrease
Moderate Revenue Growth despite Traffic Decrease Revenues and Total Revenues (€ m) • Rise in total revenues 1.800 + 5.7 % 1,713.8 largely due to 1,620.8 133.2 1.600 84.6 • one-off items 1.400 1.200 • increased contribution 1.000 from subsidiaries 1,536.2 1,580.6 800 • All segments except 600 Ground
Slide 44: Staff Costs per Employee Remain Unchanged
Staff Costs per Employee Remain Unchanged Staff Costs (€ m) • 8.8 % increase in staff costs € 44.4 € 44.4 thousand thousand per per employee employee • 8.8 % increase in staff numbers 800 + 8.8 % 689.2 • wage increase in the collective 633.4 bargaining agreement 600 • one-off items (ESOP and employe
Slide 45: Increase in Non-Staff Costs
Increase in Non-Staff Costs Non-Staff Costs (€ m) • Increase in cost of materials 600 • maintenance and + 10.6 % 506.7 infrastructure enhancement 500 458.1 • energy taxes 400 225.0 193.7 • Increase in other operating costs 300 • currency losses 281.7 • one-off expenses 200 264.4 100 0 2000 2001 Cost
Slide 46: Decline in EBITDA by only 4.9 %
Decline in EBITDA by only 4.9 % EBITDA (€ m) • EBITDA margin (1) 600 - 4.9 % decreases from 34.7 % to 32.1 % 533.5 507.2 primarily due to 400 higher losses from associated companies 200 0 2000 2001 Note: (1) EBITDA margin = EBITDA / Revenues 46
Slide 47: Adjusted EBITDA
Adjusted EBITDA EBITDA and EBITDA adjusted € m 530 Results from investments + 10.7 520 Net currency Release of losses provisions 510 + 14.1 - 45.2 500 490 EBITDA 507.2 480 EBITDA adjusted 470 486.8 460 47
Slide 48: Decline in EBIT and Net Income
Decline in EBIT and Net Income EBIT NetEBIT Income • EBIT decline EBITDA (€ m) (€ m)and EPS reflects write-downs of financial assets, 400 - 28.7 % especially € 2.02 € 1.12 533.5 EPS EPS Manila loans and 150 300 329.9 shareholders’ 507.2 advances 129.0 235.2 100 200 101.1 • Reduction of net income 10
Slide 49: DPS in 2001 Remains Unchanged to Previous Year
DPS in 2001 Remains Unchanged to Previous Year Dividends and DPS € m Dividend proposal 50 € 0.40 € 0.40 unchanged: DPS DPS € 0.40 per share 40 36.0 30 25.6 20 10 0 2000 2001 49
Slide 50: Segment Overview – Business Activities and Revenues
Segment Overview – Business Activities and Revenues Aviation Non-Aviation Retail Flight Operations Property Airport Security Car Parking Management 27 % 38 % 3% 32 % Ground Handling Others Ramp Services Energy Passenger Services ICT Services Cargo Services Miscellaneous 2001 Third-party Revenues: €
Slide 51: Financials Aviation - Strong contribution from Antalya
Financials Aviation - Strong contribution from Antalya • Moderate revenue growth influenced by Bm 2000 2001 Growth • success in Antalya • 3 % tariff increase External Revenues 617.7 655.7 6.2 % • lower air traffic volume Total Revenues (1) 646.2 688.0 6.5 % than anticipated • Decrease in EBITDA EBIT
Slide 52: Fee Cap at Frankfurt Airport
Fee Cap at Frankfurt Airport •Fraport intends to sign a fee cap agreement with the airlines running from 2002 - 2006 •The agreement is based on volume assumptions and a yearly price increase •If the volume assumptions are not met •Fraport will pay 1/3 of the amount above to the airlines •Fraport wil
Slide 53: Financials Ground Handling - Hit by Lower Air Traffic Volume
Financials Ground Handling - Hit by Lower Air Traffic Volume • Moderate decrease in revenues • particularly at Frankfurt and Hahn Bm 2000 2001 Growth • slight decline in market share at Frankfurt Main External Revenues 565.0 538.5 (4.7 %) Airport Total Revenues (1) 608.6 584.6 (3.9 %) • Decrease in
Slide 54: Financials Non-Aviation - Growing Retail Business
Financials Non-Aviation - Growing Retail Business • Strong increase in revenues • one-off items €m 2000 2001 Growth • higher concessionary and rental revenues at External Revenues 391.5 469.4 19.9 % Frankfurt Total Revenues (1) 746.8 858.1 14.9 % • Increase in EBITDA EBITDA (2) 348.1 402.4 15.6 % •
Slide 55: Increase in Retail Revenues at Frankfurt Airport
Increase in Retail Revenues at Frankfurt Airport Retail Revenues at Frankfurt Airport (€ m) €m 61.5 • Increase in retail revenues for each € 1.24 60.5 PAX per passenger by 6.9 % 70 € 1.16 59.5 60 60,3 • increased space 58.5 50 57,2 for shops 57.5 40 30 • optimization of 56.5 space layout 20 55.5 10
Slide 56: Financials Others - Higher Revenues of Energy Business
Financials Others - Higher Revenues of Energy Business • Positive development of revenues €m 2000 2001 Growth • successful energy business at Frankfurt External Revenues 46.6 50.2 7.7 % location Total Revenues (1) 164.0 180.7 10.2 % • Decrease in EBITDA EBITDA (2) 25.3 23.5 (7.1 %) • higher operatin
Slide 57: Balance Sheet
Balance Sheet (B m) 31.12.00 31.12.01 Growth Fixed assets 2,729.2 3,222.8 18.1 % Current assets 270.1 407.7 50.9 % Total Assets 3,042.7 3,672.0 20.7 % Equity 1,019.3 1,964.3 92.7 % Debt (1) 1,267.9 970.1 (23.5 %) Equity & Liabilities 3,042.7 3,672.0 20.7 % Capital employed 2,232.8 2,374.2 6.3 % Net
Slide 58: Effects of IPO on Balance Sheet
Effects of IPO on Balance Sheet 31.12.00 31.12.01 IPO impact: •Total IPO proceeds: € 903.9 m (1) Equity ratio 31.0 % 52.5 % •Total IPO costs: € 41.2 m Gearing (2) 118.6 % 20.6 % • Net proceeds: € 862.7 m Interest cover (3) 5.0x 2.6x • Debt repayment RoCE (4) 14.8 % 9.9 % • Investment Fund • Increase
Slide 59: Net Investment Covered by Cash Flow from Operations
Net Investment Covered by Cash Flow from Operations Cash inflow from operations (€ m) • Strong increase in operating cash flow to €364.8m 400 + 33.2 % 364.8 • Operating cash flow / Revenues increased 300 273.8 to 23.1 % in 2001 200 100 0 2000 2001 Cash outflow from investments (€ m) + 6,2 % Bm 2001
Slide 60: Manila
Manila • Fraport owns 30 % of PIATCO • Fraport’s largest and financially most important project outside Frankfurt • 25 year BOT project Key financial issues • € 60m write-down in 2001 on loans and shareholders’ advances April 2002 • Renegotiation of concession term with Equity / Shareholder advances
Slide 61: Construction Progress and Preparation of Opening
Construction Progress and Preparation of Opening The stage of the construction progress is currently at 82% and is running according to plan In august 2002 the planed construction progress will be at 98% The starting is scheduled for the 26th November 2002 Stati in detail: • Baggage conveyor .......
Slide 62: CIVAS / ICTS
CIVAS / ICTS Further expansion in aviation security through acquisition of ICTS Europe Holdings European market leader in airport security services Key financial 100% owned by Fraport issues / pro forma Figures CIVAS Group acquired 45% of ICTS shares in 2001 Financial Year 2001 Fraport acquired rema
Slide 63: WM 2005: Creating Value for Tomorrow
WM 2005: Creating Value for Tomorrow Project Objectives Short-term profit improvements Sustainable value Value-creating expansion programme creation Profitable long-term growth Optimized processes Flexibility Variable cost structure Shortened response time Value-based business sense Capabilities Ent
Slide 64: Project To Be Conducted in 3 Phases
Project To Be Conducted in 3 Phases Phase 1 has already been completed February March April May June July ... Phase 1 Phase 2 Phase 3 Prepa- Analysis Implementation ration Determining Identifying potentials Implementation project objectives Defining milestones and responsibilities Controlling impact
Slide 65: Outlook
I= = CFraport Services