Full Year 2024 Fraport AG Earnings Call
Ladies and gentlemen welcome to the publication full year figures 2024 and annual report 2024 conference call and live webcast
I'm Moritz, the co-host co-operator. I would like to remind you that all participants will be in a listen-only mode and the conference is being recorded. The presentation will be followed by a question and answer session. You can register for questions at in time by pressing star and one on your telephone.
Speaker Change: For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's not pleasure to hand over to Christoph Nunkel, SVP Head of Finance at IR.
Christoph Nankel: Thank you Moritz and warm welcome from my site. I have with me in the room Stefan Trudeau, our CEO and Matthias T-Shung, our CEO . I know you have a lot of questions but before that we start with the presentation right now. Please go ahead Stefan.
Stefan Schulter: Thank you very much. Good afternoon, ladies and gentlemen and a warm welcome.
Stefan Schulter: Let me start my presentation today with a positive message despite the challenging environment we achieved our financial and operational targets in the past fiscal year.
Stefan Schulter: So we achieved in every DA in the middle of our guidance, the range and the net result in the upper area of the FB Station.
Stefan Schulter: Moreover, despite heavy investments, we achieved a stable level to achieve, which is a challenge that's no question but at least as expected.
Stefan Schulter: What have been the main challenges that we are facing firstly our main customer in Frankfurt Frankfurt Loftunger is still waiting for its new wide-body aircraft's currently more than 40 long haul plans
India's which were already meant to be replaced by
Stefan Schulter: New modern acquires focusing on last year only looked on the expected delivery of 15 new Boeing 787 as of today none of these planes are flying 24th or have been even delivered.
Stefan Schulter: Additionally, the maintenance of support and Whitney engine exposed shortfall air
Stefan Schulter: about three to four percent last year and probably likewise this year. There are some positive signals that the 787 10 to 15 coded chief could come to Fraport someone the second half of this year.
Stefan Schulter: I would not expect to come this year and even probably not from the best point of view in the year 2026.
Stefan Schulter: Also, from a political perspective who faced the challenging environment in May last year's German aviation text was raised another time making Germany one of the most expensive countries to operate worldwide.
Stefan Schulter: This year the German state has further increased the security cost to be paid by the airline as well as the air navigation touches.
Stefan Schulter: We saw these cost items, 2025, all the marks the first year of the mandatory self-cota Sustainable Aviation Fuel Optical in the European Union
Stefan Schulter: That's not really the topic of the topic, it's a pleasant additional power to link with a weight menitory for flags departing Germany, so called goat plating in Germany another time.
Stefan Schulter: Ladies and gentlemen, these burns are very high, correspondingly the joint aviation industry is lacking the speed of recovery seen in other countries.
Stefan Schulter: The BDL, that's a German Aviation Association, for example, estimates that airlines line-germ, you will have to pay about 1.2 billion euro higher-state related charges this year for 2025.
Stefan Schulter: Or roughly 11 euro per departing passenger on average. Considering the alarm margins, this is a very high incremental burden and convinced that Germany has to regain competitiveness and we address this to the new government [inaudible]
It's probably upcoming new government, very, very clear.
So there's some...
Stefan Schulter: A point of chance, a point of optimism and I hope that we will be able to deliver or to tell you what's going on in the next call.
Stefan Schulter: Despite these strong headwinds, we are happy with the results. We delivered this morning in all time high every day of 1.3 billion euro and a group result of more than 500 million euro close to the record level of 2018.
Stefan Schulter: More financial data later for Matthias who will also guide you through our segments.
Stefan Schulter: Looking back at our operation at performance in 2024, I'm on slide 4. The traffic results illustrate very much what I just said. Fraport is impacted by external factors. Everything I just mentioned before and is not just Fraport's Germany overall.
Stefan Schulter: So we are on a recovery rate on 87% was an increase of plus 3% 3.7%
Stefan Schulter: A better traffic performance we are seeing in our international portfolio, the Group Airport, outside of Fraport AG. And the meantime fully recovered 2019 level on average.
Stefan Schulter: There is even more impressive keeping the temporary closure of Porto Alegre after due to the heavy flooding in mind.
Stefan Schulter: The key driver for the passenger girls and her group-wide basis was our investment increase.
Stefan Schulter: At 120 percent, Fraport Greece clearly outperformed 2019 and was adding another 6 percent to the already high previous year base. A very strong development which we expect to continue this year.
Stefan Schulter: Maybe on a somewhat lower level we have to see but the demand for Greece is very, very positive.
Speaker Change: Following the political androids at the beginning of 2023, Lima Airport has caught up on the lost traffic in 2024. At 104% Lima passengers numbers exceeded the 2019 benchmark.
Stefan Schulter: And we do expect 2025 to be another good year of robust growth in Peru.
Staying in let him
Fraport Brazil and the other side recorded a mixed development.
Stefan Schulter: My father Lesa achieved year-and-year passenger growth. Porto Allegro was strongly impacted by the temporary closure of the airport due to the due to the heavy flooding in May.
Stefan Schulter: But in Q4 Airport fully reopened and we do expect it will take a few months until the adults restore their capacities.
Stefan Schulter: A better performance record in Luriana or the airport to miss the National Fleck area.
Stefan Schulter: The financials are quite fine and the outlook for this summer season looks good, which will bring us closer to the 2019 levels again.
Stefan Schulter: And while our twin-star apples in Bulgaria were negatively impacted by with their fleet
Stefan Schulter: Pardon Whitney exposed aircraft's entire airport recorded a very strong result for more than
Stefan Schulter: Thirty-eight million passengers, which are also tall for about a minute.
Stefan Schulter: Looking forward to the upcoming summer season in Frankfurt, I'm on slide 5.
Stefan Schulter: despite the system challenges from high location growth and continued low supply of aircrafts.
Stefan Schulter: We expect to see some traffic momentum from March and then for us all in the year onwards. The traffic momentum will be predominantly driven by Condor, which is our second biggest customer in Fraport.
Stefan Schulter: Condor needs to strengthen its freedom networks of parliament with short travel routes, as Loftamper has changed the freedom agreement between the two carriers.
Stefan Schulter: So that of the changes shown on the chart, we expect criticals this someone in the area of 45% seek capacity.
Stefan Schulter: mainly driven by condo. Outside of condo also, easy jet will bring new capacities and traffic goes to Fraport.
As you know, it's a dead solo.
Stefan Schulter: I'm a detaker in the Lofthamser ETA transaction, correspondingly Lofthamser needs to support competition between Fraport and Italy and go into daily services from Fraport to Milan-Linato to ItalyJet.
Stefan Schulter: We're guarding Lufthansa, we don't expect a quite a Whitney engine issue to be solved this year. Nor do we expect positive effects from the potential certification of the Boeing Dreamliner this summer, having said this.
Stefan Schulter: The 4 to 5 percent capacity gross largely comes without Lufthansa. We have, however, expect Lufthansa to come back into the gross mode, this winter summer 26th.
Stefan Schulter: When the fixing of support and Whitney engines is coming to an end and the drone lamas will be full into service. Fine.
Stefan Schulter: Now coming back to our own homework on slide number six, we see ourselves on track with our major expansion programs. Let me start here with a new terminal at Lima Airport, as you know, the opening of the new terminal was postponed the yesterday.
We are now working closely with the local authorities.
Stefan Schulter: To clear the remaining steps and to determine a new opening date, he will provide you with an update shortly. To be precise, there's nothing wrong with the new terminal, which is almost 100% completed.
Stefan Schulter: So in determinates, a very fine infrastructure with modern state of the art, retail outlets also the retail outlets are finished.
It's a bright terminal with lots of space, passengers.
Stefan Schulter: And as mentioned, with our Q3 publication already, our IT team will provide you a deep dive on the new terminal and walk you through the highlight after the terminal opening.
Stefan Schulter: I can just say the topics around the further delay seems to be landside access topics responsible by the state and
Stefan Schulter: Maybe also some unwares we have seen today after murder link of a singer in Lima and some state of emergency.
Stefan Schulter: But we'll give you an update as soon as we have more information what's going on there because the terminal is fully ready and it could be open immediately, but if we have to delay some weeks then that's the decision by the Peruvian government.
Stefan Schulter: Moving on to Ontario over the past three years, the team has met tremendous progress to fulfil the investment as set out.
Stefan Schulter: In the concession contract and mid of April now we will open the new terminal around the 12th of April , most probably and we will from there on be able to rental up to 65 million
Stefan Schulter: An enormous capacity which will place Ontario in the top 10 airports of Europe .
Stefan Schulter: Despite the big capacity addition, we will prove to be right last year, as I mentioned before, entirely handled about 38 million passengers, an all-time high figure.
Stefan Schulter: Despite this great result, the airport still misses about 4 to 5 million passengers from Russia and Ukraine when compared to 2019.
Stefan Schulter: We all hope for peace in the region and so far. Ontario is very repositioned and we expect to see continued good traffic calls over there.
Um...
Stefan Schulter: Following Lima in Ontario will complete the terminal construction in Frankfurt and the second half of this year most likely in October .
Going on to slide 7, off-print for the airport.
Stefan Schulter: We are clearly focusing there on customer satisfaction with a project such as the overall log of new CT security standards in terminal 1 and the new automated check-in count of
Stefan Schulter: In addition, we are working on high-end initiatives to increase efficiency or prolational processes with clear focus on punctuality and also to improve our financial performance.
A few projects such as AI support the turnaround processes or the
Stefan Schulter: intelligent, dispatching agent as well as our well advanced and will be all thought up to end of this year. Fascinating to see how I can support our daily business and we are very much looking forward to make use of this.
Stefan Schulter: On the other side we decided to stop an individual project such as a security relocation in Terminal 1, Concos B.
after the review process, but we will bring in
Stefan Schulter: In Terminal 1 Concourse B on the East, CTs cannot, so that even there the processes are much quicker and with a better customer satisfaction and that's much earlier being realized and
the relocation of
security lens in general.
Stefan Schulter: Mobile, we extend it to the planning phase for the Terminal 2, modernization like this.
Stefan Schulter: We have clearly reduced the near-term capex need as a result in the upcoming two years. And we have a strong improvement in free cash flow and we will bring back the free cash flow into a clearly positive three-digit million EU area.
Oh, area. Sorry, I need to find a new area.
Stefan Schulter: So progress throughout the metric regarding the tenoring of the new term is we reach an area on slide number eight.
Stefan Schulter: The positive messages first, all wittest lots have been awarded in a short period of time therefore we grow off Fraport retail area as expected by about 12,000 square meters with the opening of Term 3.
Stefan Schulter: The new market plays in the non-ging AOS, the heart of Terms 3 retail area. It's structured in a way so that all our customers need range from kid stores to fine-dine opportunities.
Stefan Schulter: The centerpiece of the marketplace was a very nice bar with numerous seating opportunities for dual and enjoying the vivid atmosphere, but also seating areas with an apron view will be provided.
Stefan Schulter: Besides new modern concepts in particular the central security lane in front of the marketplace will offer our customers an improved custom experience.
Stefan Schulter: compared to 2002, where we are currently working with decentralized security checks in the non-chang area. What does a new retail offering mean for our financial time on slide number nine?
Stefan Schulter: Compared to the current setup in Terminal 2, we expect an increase in retail revenues of roughly 50% compared to Terminal 2 by 2027, which is the first fully of Terminal 3 operations.
Stefan Schulter: Please keep your mind the terminus 3 of all can generate even more retail revenues in 2027. We don't expect the terminal capacities to be fully utilized so that over the time the terminus 3 retail size sales would have caught a goal.
Stefan Schulter: On the sliders you have split of the terminal capacity. The long one
Stefan Schulter: Terminal 2 will come back into operation and will start generating retail revenues again for our customers who will offer further capacities.
Stefan Schulter: on its moral appears, but that's quite long term from today's perspective.
Stefan Schulter: Regarding the transition phase next year and to also keep in mind that we expect the opening of terminus we have to the east of holidays.
Stefan Schulter: Therefore, we, in 2027, will be the first co-author with Terms We in full operation, and the take-out to put forth.
Stefan Schulter: Before talking too much about 2026, let's have a look at our expectations for the current fiscal year 2025. I'm on my final flight.
Stefan Schulter: It depends very much on the question at what time which aircraft are coming in and whether they are adding capacity or replacing other aircraft so it could be in a range between two to three percent, maximum up to four percent.
I'm more to the sweetest and
Stefan Schulter: As discussed before, in particular, the face in us in New Buoy and Queen Ernst Wolftons, the remains effect of which we cannot fully assess at the moment, moreover, we continue to be impacted by missing court and with new engine aircraft.
Stefan Schulter: in particular the new collective labor agreement for the majority of our fine-for-stuff hasn't been agreed upon jet.
Stefan Schulter: In financial terms, we are talking here about a staff cost bill of close to 1 billion euro, so it makes a difference, although we see there a 3% or a 5% or even a 7% wage
Stefan Schulter: Or even more, as a units request, therefore we provided you a relative broad guidance range and expect a moderate ABTA increase in the since the singer-digit percentage area.
Stefan Schulter: The group results were expected to be flat to down this year. Let me put the size here we incurred extra gains of more than 40 million euro last year from the disposal of our remaining shares in St. Petersburg.
Stefan Schulter: These games are non-recurring. It's just a phosphatabitus book. The divestment of our group will be more flat.
Stefan Schulter: As Matthias will talk about that, in a minute, the net depth to a BTI ratio will improve due to the positive ABTI outlook and stable net depth.
Stefan Schulter: For the dividend, we currently expect no dividend payment for 2025 financial year to be distributed in 2027 and want to focus on reducing our levels first.
Stefan Schulter: This could only change if we would have a lot of headwind.
Stefan Schulter: was really a lot of head print by positive governmental decisions on the state costs like Lufa Castles Aviation Text and a lot of new aircraft would come into service.
Stefan Schulter: But it's not very much probably from today's point of view. So let's see whether we get all these headwinds and maybe the picture is changing a little bit.
Stefan Schulter: Having said this, I would like to thank you for your attention and Norma T.S. with more financial. Yeah, thank you, Stefan, and the warm welcome also from my side. My first chart of the presentation shows our long-term development of passenger traffic in Frankfurt and group AVDA.
Matthias Cieschung: On slide number 12 you see the development of the last year so from 2014 until 2000 to 24.
Speaker Change: Reviewing the operational and financial performances shows a decoupling of our financial and operational metrics.
Speaker Change: While our Frankfurt-Pädnernambas just increased slightly compared to 2014, our group AVDA recorded a strong increase of 65% compared to 2014.
Speaker Change: Certainly, the increase was mainly driven by our operations outside of Frankfurt, so our international activity segment.
Speaker Change: Here, the majority of the FDA growth was generated by new investments.
Speaker Change: like Fraport Greece and Fraport Brazil, but also the airports that were already part of our portfolio in 2014, like Ema Airport or Gubeliana, showed organic earnings growth.
Speaker Change: On the other side, also our Frankfurt operations recorded in ABDA increased compared to 2014.
Speaker Change: Despite a broadly stable number of passengers, the aviation segment, for example, showed the significant ABDA growth of nearly 60 percent or 137 million Euro.
Speaker Change: Therefore, and despite the fact that Frankfurt Airport hasn't recovered to the pre-COVID passenger levels yet.
Speaker Change: The group showed overall good financial progress in the past years and marked an all-time high operational result today. Moving on to my most important slide of the agenda, our cash flow and net that outlook for 25.
Speaker Change: As a starting point, as always, we take our ABDA guidance as a proxy for our operating cash flow, so more than 1.3 billion euros of inflow this year.
Speaker Change: On this basis, we deduct the capex of roughly 1.1 billion that we have talked about for the past couple of quarters. Please note here that this amount continues to be spoiled by the major capex programs in Frankfurt as well as in Lima.
Speaker Change: which we will finish this year. So we will clearly reduce our cap expert and the next couple of years.
Speaker Change: Following the CabEx we subtract another 400 million euro net cash interest payments and cash taxes.
Speaker Change: Moreover, we expect six concession payments in IFRS 16 lease payments in the amount of some 100 million euro.
Speaker Change: On the inflow side, we expect further positive cash effects from our associated companies and changes in network and capital of in total more than 100 million euro is here.
Speaker Change: All the individual components together add up to free cash flow this year, which is very close to breakeven.
Speaker Change: Please note here that this amount does not include the 100 million Euro inflows from the daily stake in divestment which we received two weeks ago.
as a result of the free cash flow outlook.
Speaker Change: We expect our group netted to remain broadly unchanged compared to last year's level.
Speaker Change: The review of the past year of cash flow and indebtedness situation is shown on slide number 40.
Speaker Change: The operating cash flow showed a very strong performance. At 1.18 billion euro, the operating cash flow grew by 37% compared to the previous year.
Speaker Change: The increase was driven by both sound operating development and good working capital management.
Speaker Change: All as equal, the operating cash flow would have been sufficient.
Speaker Change: to provide a strong positive free cash flow of 560,000,000, excluding for the expansion cab X in Frankfurt and EMI Airport.
Speaker Change: Including for those heavy expansion works our free cash law was negative at minus 675 million and therefore in line with our expectations for the year.
Speaker Change: Correspondingly, our group netbed that figure stood short of 8.4 billion euro and our level that ratio remained at 6.4 times, both indicators were in line with our guidance.
Our current maturity profile is shown on slide number 15.
Speaker Change: Despite the negative free cash flow, our liquidity position remained at a high level of more than 3.9 billion euro or 4.5 billion including for unused project finance and committed credit lines.
Speaker Change: Roth debt on the other side amounted to 12.3 billion slightly up compared with the third quarter results.
Speaker Change: At 3.2% the average cost of debt remained unchanged in the second half of 2024.
Speaker Change: Looking ahead, we expect to refinement, refinement most of the Frankfurt for materials this year.
Speaker Change: In addition, we will make full use of the Lima Project Finances here due to the terminal completion.
Speaker Change: As a consequence of the higher cost of debt in Peru and the Frankfurt refinance
Speaker Change: We expect the average cost of debt to slightly grow this year up to a level of maximum 3.5%. Coming to our segment reporting starting with aviation on slide number 16.
Speaker Change: The segment showed an overall strong earnings development due to the higher passenger number but in particular due to the 9.5% increase in aviation charges.
Security revenues also grew by roughly 10 percent.
Speaker Change: But we are balanced with cost in more or less the same amount.
Speaker Change: Portable line, the segment recorded a strong ABDA increase of more than 21% to an all-time M-High of 374 million Euro.
Speaker Change: Despite higher DNA from the right down of the security relocation project, Abid was nicely up to 203 million.
Speaker Change: Looking ahead, we expect continued headwind from OPEC's inflation this year.
while the price increases the support, the segment earnings development.
Speaker Change: Consequently, we expect a moderate growth of ABDA in EBIT in the current financial year.
Speaker Change: Moving on to our retail and real estate segment on slide number 17.
Revenue's grew by close to 40 million to 537 million.
Speaker Change: All business areas so retail real estate as well as parking contributed to the solid increase in techment revenues.
at 3 euro and 35 cents.
Speaker Change: Retail revenues per passenger also performed well despite continued closures on the land
Speaker Change: He drives us for the solid retail momentum where strong advertising revenues which were among others supported by the European Soccer Championship in June and July .
An improved present-jump mix thanks to the China Recovery.
Speaker Change: and third and increased dwell time due to smooth and fast security processes.
Speaker Change: Parking and real estate revenues also grew nicely among others due to price effects.
Speaker Change: on the OPEC side cost for maintenance services in ongoing projects.
Speaker Change: Such as the refurbishment of the parking houses turned out to be a higher than initially anticipated.
Therefore, segment ABDA only grew slightly to 375 million euros.
[inaudible]
Speaker Change: For the year ahead we expect revenue to be supported by passenger volume growth in the retail and parking divisions.
Speaker Change: On the cross side, we expect the continuation of the OPEC strength of the fast financial year.
Speaker Change: As a result, we expect segment ABDA to remain at about the same level of 2024 or slightly above.
Speaker Change: Coming now to our ground tending segment on slide number 19, Q4 was no turning point for the segment.
Speaker Change: At a stable number of passengers, the revenue growth was solely driven by price effects in the fourth quarter.
Speaker Change: On top of the operational development in higher cost of labour.
We booked an 8 million euros staff-related provision.
Speaker Change: to reduce the headcount in the subdivision of the segment.
Consequently, ABDA in the fourth quarter was clearly negative.
and turn the full year resides below the previous year.
Speaker Change: For the year ahead, we need to restore the financial stability.
Speaker Change: Therefore we have already raised the central infrastructure charges by close to 8% and will further reduce the number of external stuff.
Speaker Change: As a consequence, we expect an improvement in segment every day, but still expect to remain in the negative area fiscal year 2021.
He had went for the segment remains the loss making luft tons of contract.
Speaker Change: which we will have to renew open by exploration in the next 12 to 24 months.
Speaker Change: Our final segment, International Activities and Services is performing clearly better. I'm now on slide number 20.
The international segment again showed a strong underlying learnings momentum.
Speaker Change: Despite the closure and gradual re-opening of Port Raleigh Airport, revenues and ABDA grew strongly on a full-air basis.
Speaker Change: T-drivers for the revenue increase where our investments in Fraport Greece, Fraport USA and Lima Airport. At the ABDA level we recorded a very good result in particular bearing the following effects in mind.
Speaker Change: In 23, Fraport USA recorded a compensation for the early termination of the Pittsburgh Masterless Concession in the amount of roughly 11 million.
Moreover, Fraport Greece was positively impacted by Covid compensations.
in the amount of about 34 million.
Speaker Change: In the year 23, while in 24, Fraport Grease just recorded COVID compensations of 28 million, so a minus of 6 million compared to the previous year.
Speaker Change: Additionally, the closure of Porto-Alico Airport in lower compensation payments led to a reduced ABDA for Fraport, Brazil, of roughly 16,000 euros.
Speaker Change: Looking ahead, we are confident that the international segment will continue its growth path also this year and will further increase its ABDA and ABIT.
Ladies and gentlemen, let me summarize our disc closure today.
Speaker Change: Our Frankfurt and international divisions reported good overall year-over-year earnings growth.
Speaker Change: Despite the challenging environment we fulfilled all our group targets we set for the past year. Our group ABDA clearly outperforms the pre-COVID level despite Frankfurt traffic remaining.
Well and significantly below 2019.
Speaker Change: While the international airport will continue their volume growth in 25th
Speaker Change: We expect a positive momentum in Frankfurt as of this month for end of this month.
Speaker Change: Our major graphics programs are coming to an end, and we signed a major agreement on airport charges in Frankfurt to provide visibility on the development of our revenue side in the next four years or for the next four years.
Speaker Change: New Carpex projects are either stopped or postponed, therefore we consequently pursue our path to turn around our free cash flow.
Speaker Change: This year will mark a first big step, as we guide a free cash flow which is very close to break even, or even a break even, our break even target here excludes any extra
Speaker Change: For the next year, we are confident to achieve a clearly positive free cash flow. Having said this, ladies and gentlemen, I'd like to thank you for your attention and we can start with you in a session now.
Speaker Change: Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the telephone. You will hear tone to confirm that you have entered the queue.
Speaker Change: If you wish to remove yourself from the question, QE may press star and two. Questioners on the phone are requested to disable the load speaker mode and eventually turn off the volume from the webcast while asking a question. Anyone who has a question may press star and one at this time.
One moment for the first question, please.
Speaker Change: And the first question comes from Roxandra Haralduiser from HSBC. Please go ahead.
Ruxandra Haraudosa: My first question is on retail. Do you have retail contracts in Terminal 2 running out this year and do you expect to prolong this contract until D2 will close next year?
Speaker Change: Second, in November , your indicated capex will be above 1.5 billion in 24.
Speaker Change: And on CapEx for FY 25 I quote Matthias we are working on a number which is below 1.1 billion as a group CapEx for 25 CapEx for 24 was 1.7 billion and the guidance for this year is a CapEx of 1.1 billion and
Speaker Change: There are a lot of questions from investors today about potential overrun. So, could you maybe give some details on these higher figures and mentioned in November ?
Speaker Change: Could you please update us on the PRG? Will it start operation at the same time with a rest of T3 and have the retail area has been already rented in PRG?
Speaker Change: And the final question, the new EU Commission has been in office for a few months. Do you have already signals and what are your expectations Stefan about the priorities in the aviation sector of the EU Commission during the current legislative period? Thank you very much.
Thank you.
Speaker Change: with CAPEX so absolutely correct what you said we guided 1.5 billion we ended up with 1.73 so this is an overrun
Speaker Change: The reason for the overrun was the 200 million what we always saw as a risk regarding T3.
Speaker Change: and today we have to say that the overrun has been realized so this is not good but on the other side it's over now.
Speaker Change: So looking forward we do not expect any additional cost over on regarding T3. So everything is fine. We are going to open after Easter holidays and 26. And the rest of the topics is in line what?
First go has been guided.
Speaker Change: So this is past looking forward looking forward means now in 25 you mentioned be guided now 1.1 I said it will be below 1.1 but we say we have.
Speaker Change: A discrepancy of perhaps 50 million and you can believe us or I think you are convinced that we are doing all to end up with number which is shortly below 1.1, but you know at the end of the day to control the outflow for topics.
Speaker Change: Depends really what happened in the last two weeks of the year and when I look back what happened in December 24 There was an outflow in a three-digit amount area
Speaker Change: But at the end of the day we have to see whether it's 1.1 or a little bit less. Our target is always to realize a number which is below.
One Point.
Speaker Change: All retail contracts are not running out so everything is awarded and will continue in term no one.
Speaker Change: Directly when I'm ready to determine who the retail contracts will be finalized in the end of second quarter.
Speaker Change: because the airlines will be moved from Terminal 2 to Terminal 3 in a staker approach, probably 3 or 4 ways in the second quarter next year and then Terminal 2 will be taken out of operation.
Speaker Change: We have solutions with the concessionaires, there's no problem, there's no further penalty or something like this to pay, and all contracts regarding terminus 3 are awarded.
Speaker Change: They are preparing for taking over then in late is up to April next year. So this is working on term is free.
Speaker Change: Regarding PRG, yes, we have top operations and maternously wisdom as we, what it will be mainly on the check-inside, lenside.
Speaker Change: From today's point of view, no operation on the PR itself, because there were enough capacity in the first step in PR-AQA or H-N-N-P-A-J.
Um...
Speaker Change: On the priorities regarding EU Commission, the top priority stage was carbon leakage and there are a lot of.
Speaker Change: Professional advisors who are giving solutions to the U-commission yesterday. I heard a study
Speaker Change: and get charges and slots, I think these are the three packages.
The U-commission is at the moment, just-
Speaker Change: Investigating whether it should open those packages up or not we expect probably somewhere by summer or late summer or any further education on the U Commission but these are the two top priorities from our side.
Speaker Change: Thank you. Thank you. Thanks. And the next question comes from Christian the day to from UBS please go ahead.
Christian Nadeltu: Hi. Thank you very much for taking my questions. The first one, can you give us some initial indication on CAPEX and free cash flow in 2026?
Christian Nadeltu: The second one, zooming in on Fraport, on Frankfurt, the mid-term maintenance capex. So, 26, 27 was roughly the mid-term.
Maintenance Capix, the third one.
when
Speaker Change: Terminals free will open. Could you give us ballpark? What is the incremental
Speaker Change: you will incur terminal free versus terminal two in a full year of operation and the last one if you allow me just on capital allocation what is the packing order mid-term, the leveraging dividend acquisition any any color there thank you
Speaker Change: regarding free cash flow. So again target in this year 25 is break even in 26.
showing clear and significant positive free cash flow.
Speaker Change: Driver for this is Québec because let me say the FDA increase will be there but this is not the big step.
Speaker Change: Up this is also clear given the traffic momentum in Frankfurt.
Speaker Change: So looking now assuming 1.1, or as Mrs. Sardoud, or rather, perhaps 1.05, we have to see at the end of the day. So this is a starting point for further considerations in 2006.
You have to see that in 26.
Speaker Change: Also, the second expansion phase of EMA is over, so there's a further drop.
Speaker Change: of the Lima Capac's significant drop as well as a further drop.
Speaker Change: Aregarding CapEx for T3 because we are going to open after Easter holidays in 26th and of course we have a delay of some payments but these are the two drivers determining the free cash flow generation in 26 the exact CapEx.
Speaker Change: Indication is too early but let me say in the second half of this year then we come for our guidance for 26
Speaker Change: can be clearly see what will be the final outcome in 25 regarding long terms of data. CapEx, when you look now on the numbers on the presentation on, I don't know it's right now.
Speaker Change: Where I show the bridge coming from the NETA 23 to the NETA 24, you have, let me say, a proven track record looking on Carbex for Brazil in Greece.
Speaker Change: For 16 airports we are spending 50 million for maintenance. This is a good number and when you look on other carpeks mostly.
Speaker Change: the 449 if you put all together we are talking about 500 million which is a good indication having also in mind that in these 449 million we are talking in investments in
Speaker Change: In Infrastructure, in Frankfurt, we are also talking investments in Trump.
Speaker Change: Investments in cars, equipment, etc. And when I am going to mention equipment, this is also equipment for Termin III, like for example, office furniture, etc. IT equipment, which is more or less one-off.
Speaker Change: So the Carp Ex for Germany, we are still with Thompson Geschäfte, I'll start in a little more translation in.
Speaker Change: and help me in English for equipment, which is in the moment higher than in the future. So from a today's perspective, I would say that the 500 million is a very conservative indication.
Bye.
All including maintenance care bags for all group.
Airports looking forward and if you already deduct
the 1.2 billion for T3 here and for limar carpets.
Speaker Change: just on the numbers from 24. Just clear as you see already the strong free cash flow generation in a year where the APDA.
Speaker Change: is on a on a level of 1.3 billion in year. You know, you know, also a long term target. So this is then the leverage to achieve a free casual generation which is higher than this. What we would have shown already in 24 without expansion topics.
Speaker Change: Further questions have been on the additional operational costs on term as we.
Speaker Change: Now that's a year in between next year because on the 1-3 Terminal 2 is still open. For half a year at least in Terminal 3 has to be prepared over it now.
Speaker Change: Because we already know have to hire some people. So in general terms of all segments, I would say it's roughly 200 people, which we have to hire for a fire brigade for operations for IT.
Speaker Change: which is not saying that we need those 200 people long-term but for the in-between time at least.
Speaker Change: Long term probably other people more but on the other side we have very good results from tenders on the maintenance side what we do with external companies.
Speaker Change: So yes, we can give you probably after we have opened up to this year better estimate what are the long-term aspects on this and just have lots of them and have found retail earnings.
Speaker Change: So there's some additional costs in for next year, that's why I tend to hire those people already now. On the other side, it's included already in the guidance we gave you, so there's no big downturn.
Speaker Change: Regarding the long-term ratio, you asked on depth to equity. What's our focus? I've got your question correct. Yes, we have at the moment a level of 160 percent depth to equity.
Speaker Change: We clearly mentioned that we want to bring this down, is there one guidance? No, there's not the one figure, but we gave you the indication that net depth to every DA should be closer in the long term at least to the number five, it's no 6.4.
And it means on the other side also that...
Not that too to equities should be the ones of.
Speaker Change: We name it 80 to 120 percent. It depends where the market conditions are. All one thing is clear for the next years and I would say at least the next three, four years. There's no big appetites, no big appetites on external growth.
Matthias Cieschung: by external acquisitions. If at all then these are smaller projects or structure projects and as Matthias mentioned already we are very strict on non-CAPX and try to keep it down as much as possible.
Speaker Change: And thank you very much. I'm sorry. Will you pay any dividends before you get to that 80 to 120 percent?
Matthias Cieschung: That's right. Yes, clearly answer. Yes, we will. But we have to get much closer. No, no, let me answer the other way on. First, we have to be free care flow positives. And as mentioned before.
Matthias Cieschung: The probability to pay in 2026, 420, 25 is a low one but it's existing if there's a lot of
would not run.
Matthias Cieschung: A lot of tailwinds for the business. There would be a very good cause if we come out this year.
Matthias Cieschung: It was very good result, and if we see that the business is really moving, especially also in Frangport, the international business, I'm quite optimistic on, but especially in Frangport. That's a great start. Really going up. That's a new aircraft are coming in and are operated in addition and not just replacing the old ones. That's a luft on the topic.
Matthias Cieschung: Then there could be that we even pay a dividend in 26 but that would be a low dividend.
Matthias Cieschung: compared to the range of 40-60% which is the normal one.
Matthias Cieschung: for 27, in 27 for the year 2026, I'm absolutely going to win that we will pay a dividend that has to be decided at that time in two years from now. So we will have discussions on this, we have already discussions on this.
would see all the business wanting to see it.
Matthias Cieschung: I think we are not waiting to achieve finally the 5% or 100% or 20% or something like this.
Matthias Cieschung: Then the next question comes from L.O.D.R.R.R.R.R.R.R.R.R.R.R.R.R.R.R.R.R.R.R.R.R.R.R.R.R.R. The next question comes from L.O.D.R.R.R.R.R.R.
Elodie Rahl: Hi, good afternoon. Thanks for taking my questions. I'll have two. The first one is on the outlook for traffic, so you give us a bit of an update.
Elodie Rahl: on the capacity issues as well as the constraints that you're facing from the German government.
Elodie Rahl: on tax and regulation, so her team at the aviation industry. So I was wondering if just of all if you are having any conversation with
anyone from the new government loadage.
Elodie Rahl: I know it's still a big moving past there, but if they have a more constructive attitude towards aviation in Germany, and if the outlook is looking more positive for traffic in 26 as a result, and when you think it can be back to 2019 level.
Elodie Rahl: So that's my first question. And the second question is on ground handling. So if you is appointing again negative in 25 still expected. Do you think it can be turning positive from 2026? Thanks.
I thank you for your questions.
Elodie Rahl: On the capacity issues of your question was more on the government relations.
Elodie Rahl: We all together, whether it's Lufthansa or we, whether it's a German association on airports or on airlines or on aviation in general. We all have the same position and we're at good discussions. We see...
Elodie Rahl: Two parties who probably will form the next government, that means the CDU and the SPD, and they all understand the issue. They understand that the tax, the aviation tax,
Plus the
Elodie Rahl: has our components, especially on ATC. Of course, there's a sharp increase over there that is too high and...
that there would have to resolve it.
Elodie Rahl: So the signals are very good, but on the other hand, also have to say it's not signed, it's not done deal, they are now in the coalition discussions and the coalition.
Elodie Rahl: It's not just because of Frankfurt Airport or because of luftone, so it's in general.
Elodie Rahl: also the competitiveness of the aviation market Germany for the German export oriented companies and so on, because we are losing more direct connections into the world. And that's a really important issue for German industry in general.
So, yes, I'm...
Elodie Rahl: I'm slightly optimistic and I'm probably more than 50% probability that I would say he has something will happen, but it's not a done deal that's absolutely clear.
We are not.
Elodie Rahl: to achieve this level but quite optimistic that there is a chance it's a German aviation takes is.
or take no way if cancelled if we get positive signals and
Speaker Change: Sorry to say this, but the Greens are not for sure. Not any longer, a member of the next coalition. That's for us. This industry is positive. The SPD and you are much more.
Speaker Change: Some were in second half. That's also a positive message, hopefully it will.
Speaker Change: So there are some some positive signals that we see should see much better at 2026 and 27 and with higher goals worth then.
Speaker Change: On ground handling, we are working very on productivity measurements, we are working along the company on productivity topics.
Speaker Change: on programs and projects. But especially on outtending the most important thing is in the negotiation and the new contract with Lufthansa and you will not find it in the numbers before the year 2027.
Okay. Great. Thank you very much.
Carlos Caburasi: Then the next question comes from Carlos Caburassi from Kettlerchefre. Please go ahead.
Carlos Caburasi: Thank you for the presentation. I'm full to make questions took with ones from me. First and considering the restructure investments program, I was wondering if you could give us a hint in terms of CapExperanum for the rest of the decade.
Carlos Caburasi: And the second, which is actually related to the first one, do you expect a meaningful impact from the low or near-tem capex on your 2030 Freakash Flow Target? I love you there. Thank you.
Speaker Change: The clearly reduced number compared to 25, and again in the second half of this year we will give you a clearer guidance what will happen exactly with Capix in 26.
Speaker Change: And looking forward, you see maintenance caps, I already explained about 500 million for the group level.
Speaker Change: which is a good indication including all 30 assets which we have today.
Speaker Change: And this is determining, let me say, the long-term base car packs. We have no intention to go for big acquisitions in the moment. And I think this is the best guidance as of today. What will happen in 2030?
Speaker Change: Frank Lee's Bogen give you today the exact guidance for 2030. This is not serious.
Thank you.
Speaker Change: And the next question comes from Andrew Lombard from Barclays. Please go ahead.
Speaker Change: Oh, hi there. Can you just help me understand why the pickup in Porto Alegre in Brazil has been so slow? Because the January day to look very slow and it looked like the capacity is quite slow.
Florian Ophillus for the
Speaker Change: for the Swiss continues to trade so well. So why hasn't the traffic slowed back more promptly to Porto Allegrae? And I thought earlier last year you were very confident that you would get full compensation for the closure impact of Porto Allegrae and yet that's not not completely clear to me. So if there's more compensation to come
Speaker Change: in the course of 25 for the closed report to Allegree in 24. And then just my one other question would be
What's going on?
Speaker Change: in the ground handling market with the competitor, did Swiss Port finally get themselves up and running out they running smoothly, and previously you said that, you know
given the challenges to the ground handling market.
Speaker Change: Notwithstanding clearly the un-economic contract with Luffyty from your perspective, you are quite keen to hand over contracts to the competitor to reduce your exposure to ground handling, has anything happened?
to lose other contracts apart from Lofty.
Let me tell you a sport or a legroom.
Speaker Change: In the case we get from the market, we get also from our other company in Brazil, our very positive from Porto Alegre.
Speaker Change: on that is still a little bit slower at the beginning now, beginning of these years and next month, that's just because the airlines have to restore their capacities, have to change airquads, which are flying from other destinations back to Porto Aliegos, they have to market those initiatives.
Speaker Change: But there will come and the signals we know are very positive, even supported by the state of Rio Grande do Sul. So, they are quite optimistic.
Speaker Change: full compensation. Yes, we get a full compensation. Probably what we should have discussed more in detail that have been.
Speaker Change: We structure rings on faults which have been known in the impulse of 10-15 million, as a single number.
Speaker Change: which are not due to the flooding which have been known before that we have to do it which we have done now in that big program together and they would of course get no compensation on. But there was a smaller number and...
Speaker Change: We've got a compensation of more than 80 million, I think something like this, I think it's a number and we invested, including those thoughts. We knew that this has to be done over the next years, which we now did.
Speaker Change: This is a total program, roughly 100 million or 95% something like this.
Speaker Change: On ground handling here in Frankfurt, it was not our task at all to handle it. It was a
Oh
Speaker Change: Fraport AG services, so the market share even went up some because of...
Speaker Change: The subcontraction solution was not within our ability to do so, but that is the case for the next few months this year.
Speaker Change: And then we have to see how the market share is developing, but it was not our task to increase the market share, was the topic of the airline.
I want to be hinder.
Speaker Change: by Fraport of Fraport Crown Services on the one side and the Swiss Port on the ill side was not be able to handle them. So it could be an interwim and we have to see how it goes ahead then.
Speaker Change: And next question comes from Dario McLeone from BNB Pariba. Please go ahead.
Dario Maglione: Hi, three questions for me. One of three cars flow for 2025. I mean, you mentioned it's going to be close to break even. How close is
That's a question. Second question on Capix.
for Frankfurt. You mentioned before the maintenance carpets.
Dario Maglione: or the group as a random medium. But also that you mentioned before that for Frankfurt specifically. The Mintranscapex will be around 350 million per year.
However, you know, I'll guide in for twenty-five and four hundred million [inaudible]
Dario Maglione: So my question is Boris, the maintenance CapEx for Frankfurt specifically.
Dario Maglione: And the last question on ground-and-ring, just a big picture has been lost making for five years.
Dario Maglione: If we don't want to be written off, then he is bitter about next year.
Bye. Bye. Bye.
Dario Maglione: So, why not tax it in this business or the rest is it? Thanks.
Speaker Change: Let's start with CapEx and let's focus on slide number 13 where you can see all the metrics of calculation for 25.
Dario Maglione: What is a given and what are the various? A given are the net interest?
Dario Maglione: The elements because growth debt is given, interest rates are given, taxes are more less given. So the minus 400 is a given and is not a variable.
Dario Maglione: from the operational success of performance but I think there's a very high probability that we are going to receive one of millions.
Dario Maglione: So three elements on the picture are not variable. What is variable a little bit on the
Dario Maglione: Extremely difficult. We have a precise calculation. What is the outflow for a car back? So 50 million plus minus is always a natural. Let me say.
Dario Maglione: The white noise so to say can be a little bit higher and will lower again our target is to come out with a number which is below 1.1 bill.
and then you'll also see on the slide.
Dario Maglione: Network and cattle changes. This is not principle hope. We know already now some items. What is it refund or VAT etc. Outside Germany. So we know that some elements are running in favor of us so that
The network and capital runs positive and this we have included.
Nevertheless, you see always regarding...
Dario Maglione: COPEX plus minus 50 million regarding network and capital changes plus minus 30 million and always regarding the final number of ABDA which is driven and generated by some uncertainty. But you see
Dario Maglione: On the picture, it's very close. It can at the end of the day with some tailwind. It can even break even. But what would be our favorite? But it can also be that in a double-digit number, we are below breaking.
Dario Maglione: But important is looking forward we are extremely close to break even or even will touch it.
Dario Maglione: But very important is that we are after in 26 we will show you positive free cash law as already since years ago guided looking ahead. Maintenance CapEx, begin.
Dario Maglione: I told you and explain the 500 million which includes also.
Dario Maglione: CapEx for IT for equipment, etc. You have always some volatility behind this number. You cannot say we are talking about 30 assets in our portfolio and nobody in the world can say it is exact 483 million maintenance capEx for us. You have always some things which...
Dario Maglione: Pop-up overnight or other things which do not happen or will be delayed, but if you in your metrics and your calculation, your Excel sheets, if you work...
Dario Maglione: With a 500 million number looking forward you have a very good base number.
Growntendling. Um, um,
The most important issue there is
Dario Maglione: The 2018 signed contract, I think it was 2018, a long term contract with Lufthansa, Lufthansa Group.
Dario Maglione: which includes some price increases but they are very limited and the words they are after governance are on change. Stuff costs increase are much higher than the price increase we have in a second but that's the main reason for the losses in the attackment.
Dario Maglione: combined with a peak structure which is already above 2019 limit 2019 structure of the traffic so very high peaks and there is some unproductivity and combined with the topics that we all together.
Dario Maglione: in Europe , not in Germany, but in Europe in general, including Germany, leads to a high delay by ATC because a lot of regulated slots, and that means that's the ground in people along on the aircraft that there should be.
Dario Maglione: That's in a mixture that we are fixed in with this contract whistle of tons of course you could say but there would be the wrong timing to say something like this and...
Dario Maglione: We mentioned already before that we have to go into the negotiations because contractors of terminals wanting out to 2026 and we'll start that negotiations somewhere over the next 12 months and quite a bit more.
Dario Maglione: And after you can think about the topic but even then you should take into account and there's a reason we're in and they're crowned ending. I'm not saying we said back share but that we're in and they're crowned ending business.
Dario Maglione: because we have a very, very high portion, much higher than other airports and threats of passengers, and we need a high stability on the ground operations and that's running in a very, very good way. That's absolutely fine.
Dario Maglione: from the stabilization and point of view so there are no delays any longer by ground tending, that's not the issue.
Dario Maglione: [inaudible] We're soft on them, they are after we can take questions like you, but for the next two or three years that would not be a solution on that side.
Thank you.
Speaker Change: There's a reminder, anyone who wishes to ask a question may press star and warn at this time. And the next question comes from Christian Kors from Barbeque Research. Please go ahead.
Christian Kors: Yes, hello. Good afternoon. Thanks for taking my questions. Sorry to come back on the ground handling issue, but looking into your financial history even before 2018, the financial performance of this division was muted.
Christian Kors: So is there any chance or do you see any chance for sustained improvement?
Speaker Change: Yeah, and are there any things you how you could improve your pricing power in this specific business field and second question relates to some Peter Spurck if I remember correctly.
Speaker Change: your investment into St. Petersburg comprised an equity stake, but also I think you have given some loans. So now you have sold your stake, are the loans still outstanding and is there any chance for these to recover? Thank you.
Speaker Change: You're absolutely right regarding ground handling, whether we exceed the work that's of course an ambition question, but even if luft-hunger is in and that call, I don't know, can be absolutely clearly our ambition is to write black numbers.
Speaker Change: We are preparing for this and that's no question at all. We have to write black numbers so we have to make profit in ground-tinting and that's no question at all.
Speaker Change: Yeah, if I get sometimes a signal somebody asked me today, um, that love turns us on the way to do to prepare themselves for safe handling. Fine, and they should do it. I'm absolutely fine with this. I can just tell you we go for black numbers and we go for profit and.
So I
Speaker Change: I understand that the top customer has to survive and so on. They have to do their business. We have to do our business.
and we're going to...
Speaker Change: Very good quality and so yes, the negotiations will be difficult but that's...
Speaker Change: Our responsibility to be prepared for those negotiations and we will be prepared for these negotiations. It's not just luft tons of air for also the central infrastructure and the segment which covers 50% of the revenues.
Speaker Change: And here in this year we are going to increase the prices by 7.8%
Speaker Change: and there's headroom for 26 to the same or even a little bit higher so this is not
Speaker Change: Let me say the compensation for Luftwarns about one segment which covers 50% of the revenue more than 300 million With then a price impact already in this year 7.8 and next year it is for example 9.5 You can see that we are talking about 30 million just price on true
On create increase we got in 50% of the total revenue segment.
Speaker Change: We have to take look at the asset group, but all other islands which are not belonging to the Loftonser group, we achieved a really high price increase because the costs are so much a one-ink on the staff side and its price increases, so those islands have been much more than 10%.
Speaker Change: much more much higher and that's working and there are instances and I'm criptures that also of turns out then understands what they get as equality and that they will pay for this.
Speaker Change: We are getting some Peter's book, everything is sold on that side, equity and loans, so that we are not coming in anything else, and so we turn on the some Peter's book.
Speaker Change: exposure has been a single digit return CRGR number so half year on 5-6% in total over the years
Okay, thank you.
Marcin Wojtal: Then the next question comes from Marching Voytile from Bank of America. Please go ahead.
Marcin Wojtal: Yes, good afternoon. Thank you so much for taking my questions. I have a couple of questions on terminal two. If you allow me firstly, could you just remind us what is the latest regarding the upgrade and the refurbishment of the terminal? What is the total capex?
Marcin Wojtal: that will be allocated to it. And when you mention 500 million group copies in the interim, do you already include?
Marcin Wojtal: the refurbishment of terminal two just to just to clarify my second question. Can you just confirm that terminal two will remain included in your regulated asset base during the refurbishment.
Thank you so far. We are first of all clearly answered. T2 will stay.
Marcin Wojtal: in the regulated asset base because we will take it again into operation in the future. We went T3 is opened based on a staggered approach and all our process and second half of 26. We are going temporarily to close to the tool, we are going into a...
Marcin Wojtal: Last, long lasting planning phase to be very precise what to do in this total refurbishment of the terminal. We have time because we have this T3, we have
Marcin Wojtal: twice as much capacity compared with terminal two and we have to see when we are going to start with a refurbishment with terminal two but we have a lot of time looking forward
Marcin Wojtal: And then we have also after the planning phase we have a precise amount what will be invested this will spread over I would say 10 years
Marcin Wojtal: up to 10 years and this will not significant of course it can be then in no.
Marcin Wojtal: Some individual year, it can be more than the 500 million, this is for sure. But overall, it's not a number which changed this, it's baseline.
Okay, thank you.
Speaker Change: Then the next question comes from Jose Manuel Arias from Santander. Please go ahead.
Speaker Change: Thank you. Good afternoon. I have three questions in relation to terminal three you said earlier that there is that there was always some risk of a couple of copies of it run and that that materialized in 2024.
Speaker Change: Could you tell us what happened this year and what gives you confidence that any such thing will not happen in the coming years?
Speaker Change: My second question is on the terminal one concourse B project and I missed your explanation as to why you stopped it. Could you tell us also?
Speaker Change: What Fraport Mrs. by not having this project there ready and my last question is always like nine where you
Speaker Change: Guide on the uplist to return revenues that Terminal 3 will provide
Speaker Change: You mentioned 30 million euros in incremental revenues coming from terminal three compared to terminal two, but all the slides you mentioned that that figure includes also your expectation that traffic will be higher. Could you isolate that uplift assuming traffic remains constant. Thank you.
Speaker Change: Let me start on terminal 1, yes you are right and we mentioned this that we stopped the security relocation more to the land side of course.
Speaker Change: It's a very expensive project, it takes several years to get through. That means that we would have seen in Terminal 1 over the next at least 5 years.
Speaker Change: constant constructions and for that we thought that at the moment the benefit is not big enough we should more focus.
Speaker Change: and how long ways would have got if we would have realized this now so we said no we take more time for this and that's the reason that for the time being we stopped that project.
Speaker Change: on Terminal 1. But nevertheless, we are very much on customer focus and that's a reason we're putting in there in the existing environment. We'll change it to CTs, canals and with the much higher capacity.
Speaker Change: The main reason is yes, it's a cost over and we're indicated already and
Speaker Change: This mansion will be more on the 200 million side. But all, um, Pepex is done. All tenders are done. Um, as I mentioned, the construction is, uh, who and everything is done on that side. We are not really in the final jobs on, um,
Speaker Change: all interior maintenance or cabling and so on so they could be of course some smaller
Speaker Change: acceleration, jobs or something like this, but from the graphics point of view there shouldn't be a big topic any longer.
Speaker Change: So we never discuss on such a big project whether they are an additional $10 or $20 million. But in principle, we are through there and that's the reason we are confident that we know what the number finally will be.
on
Tommel 2 and regarding Tommel 3.
Speaker Change: We don't give spent our passenger or terminal what we can tell you is that we are 50% in addition.
Speaker Change: So, square meters and for sure also spanned terminals 3 if I compare directly with terminal 2 but it's not helping you very much I know because we are not giving any spanned transmitter number for terminal 2 or for terminal 3 and for terminal 1.
Speaker Change: I can just tell you that the location of retail and gastro food and beverage is much better with the centralized market space in Summers 3 and that we see you.
Expect heavy upgrade uplifters. They are also on that spend.
Speaker Change: which will be on group numbers in total of course smaller but with a plus fifty percent all we expect is term a three to term a three in a four-year range 2027 you will see also an increase in the average number in total.
Graeme Hunt: Then, the next question comes from Graeme Hunt from Jeffries. Please go ahead.
Graeme Hunt: Thank you. Actually just one from me. I just wanted to come back to dividend. How are you thinking about that?
Graeme Hunt: from 2026 or 2027 whenever it does come through. I think you did speak earlier on the Payout policy.
Graeme Hunt: Historically, but given the step down in CapEx and significant step up in free cash flow.
plus if you didn't.
Speaker Change: may 1 in 2026, would there not be scope to see a meaningful increase in the payout policy versus what you've done historically? I just wanted to say to think of your thoughts on how you're thinking about that when you do start being a dividend.
Bye.
What we gave you as an indication is that
Speaker Change: For the year 2025, we expect free cash flow break even, maybe slightly negative, but around break even, let me ins, um,
Speaker Change: If we would pay a dividend in the year 2026 for the poor year 2025 it would be paid out of debt. That would mean that we would if at all pay a smaller dividend not in the range of 40 to 60 percent and that's not decided and it depends very much whether we have a lot of tailwinds and ...
Speaker Change: that we see that really new aircrafts are coming in, that aviation tech is taking out, and that we see that business is really getting up also in Frankfurt and Germany in general. It's much more positive as it has now as it is these days.
Speaker Change: If we start paying in 2027 for the year 2026, I would expect that the dividend payment would be in the range, the historical range of 40 to 60%.
Speaker Change: But also to be absolutely clear that finally is the decision we have then to take and that take also by the supervisor we bought and then finally by the annual meeting. But there will be probably our recommendation from today's point of view. Let's see how the world's end is.
Okay. Thanks.
Speaker Change: Thanks. The next question comes from Nicolas Mora from Long Stanley. Please go ahead.
Nicolas Mora: Yes, good afternoon. Just a two quick one you mentioned that into 2026 you don't really see much ABDA growth. I'm a little surprised because you've got what you've regained it for around.
Nicolas Mora: 4% traffic growth that year you've got you've got also a tight increase you've got ground handling getting better you should get at least for half a year a bit of a lift on retail
Nicolas Mora: Do you think most most of that is upset by by higher cost? That's why you you're trying to to flag that's point number one. And then point number two, just coming back on the on the retail upside for terminal three.
Speaker Change: I'm a little bit taken back you I think you've said on previous conference calls no T2 was run to Europe at PAX
Speaker Change: What you flagging is 50% increase on that. So three euros per pack spending for T3 that's still below the average. That looks that looks spectacularly low. So just wanted to know if you you could clarify a little bit there. Thank you.
Speaker Change: First of all, our guidance is not modest. We said it's a moderate single digit increase and so it's it's a lot of fantasy how it could be and this depends really from from the tailwind coming from the traffic but again single digit times.
1.3 billion
The fantasy is big.
Speaker Change: So this is one side and on the other side there's one elephant in the room or let's say a variable which we cannot.
Speaker Change: This is a wage increase. In the moment there are negotiations with the unions. Varity regarding the TFOID. This is a wage agreement. It's absolutely open. We don't know what will be the outcome. We are not negotiating this.
Speaker Change: The Ministry of Inner Affairs is responsible in cooperation with the federal states and Germany, and just to give you a number 1% wage increase equals 10 million in our P&L. This makes it so difficult to give you, you want to have a pre-size?
Speaker Change: for the year 25 if you if you are going to tell me what is the outcome of the weight increase I tell you exactly what is our VDA outcome. So is it 4% 5% 6% nobody knows and you see
Speaker Change: Variance again 10 million per 1% increase. That's the reason why it is so difficult to have a preside outlook. And that's the reason why we say single-digit increase can be high, can be low, more or less depending from...
Speaker Change: A messenger grows on one side which we cannot control in Frankfurt and second outcome of the wage negotiations. Now, in the moment, let me say, between Verde on one side and the Federal States and the Ministry of Inner Affairs on the other side.
Speaker Change: and also retail, I think, 50% increases. It's a security.
Speaker Change: It's the same story. We are going to tell you that the increase will be 50%.
Speaker Change: And and this is a good number but exactly nobody knows we have we have more space. We have nice restaurants here fantastic shops and but whether it's it's 50% 60 40 or even 70.
Speaker Change: We have to see but I think it's a good indication and it doesn't make any sense to promise in a high number which at the end of the day cannot control by us but by the spending behavior and the pockets or not the pockets of the passengers.
Speaker Change: Thank you. Thank you. If I may, in fact, the the comment on on a BDA was more was more into 2026. I think it's Mattiasu who entered that it went talking about break even for cash flow. It did not expect much a BDA growth in in that year. I was I was just wondering. Thank you very much. Thank you.
What were the offsets? Yeah.
Speaker Change: 2020 see that 2026 that the year where a terminal tool is getting out of operation, terminal 3 is getting into operation, where this additional cost as I mentioned already, of course also additional objects and so on and what Matthias mentioned.
Speaker Change: Ministry offered 5.5%. I don't know whether this is on 12 months or whether it is on which period ever and they couldn't agree so it's...
Speaker Change: in a break situation so the result will be more than 5.5% but hopefully then for a longer period and in 2026 we will have the full impact on that.
Speaker Change: And then it's a question whether we get a stronger traffic growth? Yes or no? So are the additional aircrafts are then really in? Is putting Whitney getting that issue a little bit less?
Speaker Change: And these are the components which are a little bit too early. It's a normal ride. We mentioned in Japan, it's more moderate because whatever moderate is, it's absolutely.
Matthias Cieschung: In line with materials, whatever you discuss in between 2-5% is modeled for me, but 5% or 1.3 or 1.4 is already a lot.
All right, thank you.
Speaker Change: And we do have a follow-up question from Christianity issue from UBS. Please go ahead.
Christiane Delchoux: Thank you very much for allowing me to add the terminal three remaining capex.
Christiane Delchoux: your table in the appendix is very helpful but could you remind us you're a guided for 25 but could you could you give us a bit 26 27 was the remaining capex that are just to confirm
Christiane Delchoux: And secondly, in your annual report, you talk about potential risk of capex 300 million for the drainage of the runway in Frankfurt.
Christiane Delchoux: I think you allocate the probability of 25 to 50% that at some point this may may come through. So if the water authority company would trigger this capex with this beyond top of the 500 million run rate, you discuss earlier or it already included.
Christiane Delchoux: in that run rate any any more color there would help thank you.
Christiane Delchoux: I'm going to take the second answer first, second question, the answer is first, that potential with you will find in our annual report already for five to ten years I would say maybe even longer. Sometimes yes we have to realize some smaller issues so this 300 million is a total cost number.
I will come in. It would be.
Christiane Delchoux: We have to mention those with a good happen that depends very much on the condition on water and on all the winter.
Christiane Delchoux: Interfluids are in a composition of the water and so on, the icing and so on. At the moment it's getting better, so the rest is for sure less. But we have to see our next winter song.
Christiane Delchoux: And your question regarding further outflows for Term 3, you know from 25 which you can see in our presentation is up to...
about 400 million in this year and in 26.
Christiane Delchoux: What is a final number than in 25 but as of today I would say about 250 million and then a very small amount remaining in 27.
Christiane Delchoux: If you put all the numbers together also accumulated from the past then you end up with
Christiane Delchoux: 4.2, maximum 4.3 billion. This is what we already guided years ago. 4 billion plus 200 million cost over on which today is a given. And we will end up exactly this including the 200 million cost over on.
Thank you very much. Thank you.
Christiane Delchoux: Ladies and gentlemen, this was the last question. I would now like to turn the conference back over to Christophe Nanker for any closing remarks.
Speaker Change: Thank you and thank you all, participation for the interesting questions we invest
Speaker Change: are looking forward to continue our talks in the next days, weeks, phone calls, meetings and conferences. I wish you a good rest of the day and, yeah, happy to see you soon. Bye.
Thank you.
Speaker Change: Ladies and gentlemen, the conference is now concluded and you may disconnect. Thank you for choosing Curlscore and thank you for participating in the conference. You may not disconnect your lines. Goodbye.