Full Year 2024 Flughafen Zürich AG Earnings Call
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Luca Proceeds: Good afternoon, ladies and gentlemen, welcome to the presentation of our full year results 'twenty 'twenty. Four my name is Luca proceeds and that would be hosting this presentation together with Kevin It's like our group CFO I.
I would like to remind you that the presentation is also available on our website.
Luca Proceeds: Today's agenda is as follows I will begin with a brief business update following that Kevin will provide insights into our financial performance and share our outlook, including the new dividend policy at.
Luca Proceeds: At the end of the presentation, we will have.
Luca Proceeds: We will address your questions.
Luca Proceeds: Please submit your questions already during the presentation. This helps us organize them more efficiently.
Speaker Change: Stefan vapor will moderate the Q&A session.
Speaker Change: Let me begin by highlighting our milestones for the full year 'twenty 'twenty four.
Speaker Change: In 2020 for traffic exceeded our initial expectations almost reaching pre crisis levels.
Speaker Change: Further we achieved a milestone with the introduction of a rollover mechanism for airport charges following revisions to parts of the ordinance on airport charges.
Speaker Change: These regulatory adjustments will enhance the likelihood of free chair contains those seen future negotiations and will ensure greater long term planning reliability for all stakeholders.
Speaker Change: Despite ongoing construction work, our commercial business performed excellent as well as a real estate basis I will provide more details on this later in the presentation.
Speaker Change: Our international Holdings made a substantial contribution to the company's success and continue to grow.
Speaker Change: But the inauguration of Nowaday, our part D. International pieces has felt the impressive potential for long term cold.
Speaker Change: The rising demand for air travel in our focus markets offers a strong foundation for further expansion of the international business segment.
Speaker Change: In 2024, we also introduced our inaugural strategy map, which will help communicate clear targets and priorities to our stakeholders.
Speaker Change: Beyond our infrastructural and technological advances advancements the proficiency and satisfaction of our employees are crucial for our future success last year, we implemented several initiatives to enhance our attractiveness as an employer, particularly for.
Speaker Change: She stuck.
Speaker Change: Continuous education and upscaling of our staff are central to our strategy for effectively meet the future challenges and operational stability at the airport.
Speaker Change: Lastly, the SP X D C and driving innovation projects and making progress on our E. S. Chico's.
Speaker Change: Yeah.
Speaker Change: Let's take a closer look at some key figures.
Speaker Change: The rising traffic volume and unregulated revenue led to new records in revenue operating profit and consolidated results for the reporting year.
Speaker Change: The consolidated result increased to 327 million Swiss franc, surpassing 2019 level for the first time.
Speaker Change: In total we invested approximately 571 million Swiss franc at around 293 million Swiss franc allocated to the series side.
Speaker Change: Additionally, the Capex figure for 'twenty 'twenty four include an upfront payment of around 60 million Swiss franc for not all lab part in Brazil.
Speaker Change: Last year, we invested in refining our guiding strategic principles. This process allowed us to reaffirm our business model and define five key target dimensions.
Speaker Change: Business performance, economics, innovation, and efficiency quality and customer experience and D. S. G.
Speaker Change: By establishing a measurable performance indicators aligned to reach these dimensions, we aim to enhance our company's governance and systematically set our priorities.
We believe that these sharpen strategic focus will enable us to continue securing business success, strengthening our competitiveness and contributing positively to sustainable development.
Speaker Change: For instance, we didn't the pieces performance dimension, we are bolstering our existing business segments, both at our civic site and our international subsidiaries.
Speaker Change: This effort includes maintaining favorable conditions for flight operation further developing our real estate portfolio and offering a high quality range of commercial services.
Speaker Change: Success in this area will be reflected in our share price with the goal of achieving a higher return relative to the space market index meet the cap.
Speaker Change: Regarding D E F. G dimension, we utilized the MSCI ESG rating to measure our sustainability efforts.
Speaker Change: So anything I'd say, it's just how we manage our environmental social and governance opportunities and risks.
Speaker Change: We're committed to achieving a double a rating in recognition of our dedication to these principles.
Speaker Change: Parts of this framework will also be used for the variable compensation of the management board and the management level within our company going forward further details regarding our strategy map and the future remuneration can be found in our latest integrated report.
Speaker Change: I will now highlight some of the sustainability and innovation initiatives, we launched last year.
Speaker Change: First we put our first electrically powered debased collection vehicle into operation in December.
Speaker Change: Transition from combustion engines to sustainably powered vehicles has been steadily progressing since 2022 and is now continuing with heavy commercial vehicles.
Speaker Change: Second we signed a long term offtake agreement for renewable diesel, which inhaling Swiss clean Tech company producing solid fuels.
Speaker Change: Starting in 'twenty 'twenty seven we purchased 30000 liters of solar diesel from inhaling annually.
Speaker Change: Initially.
Speaker Change: This renewable diesel will be used to power already existing passenger buses sold in the airport. The premises later, especially vehicles without electric drive will also be powered by solar Tc.
Speaker Change: So that autonomous vehicles are set to be tested that theory GAAP at this year, we did testing being carried out on the air side.
Speaker Change: These initiatives lays the groundwork for the future use of ultra enormous technology at the airport.
Speaker Change: In preparation for the test phase the so called Robo taxi has been put into operation to gather the necessary data and evidence.
All of these initiatives were launched last year and while each one has a relatively small impact into Italy together. They can create a meaningful impacts that will help us achieve to achieve our sustainability goals.
Speaker Change: Yeah.
Speaker Change: Let's review our main business segment, beginning with T aviation business.
Speaker Change: The desire to travel remains strong in 'twenty 'twenty four passenger volumes lottery returned to pre pandemic levels, so to recap parts despite fewer flight movements.
Speaker Change: This indicates that aircraft capacity utilization has increased along with the greater use of larger aircrafts.
Speaker Change: After a setback in the previous year freight volumes increased by 15% in 'twenty 'twenty four.
Speaker Change: In detail the number of passengers traveling through Siri gab part increased by 8% compared to the previous year.
Speaker Change: But the passenger traffic started off modestly at the beginning of the year. It surpassed pre crisis levels in the months of May and September October and December.
Speaker Change: Additionally, there were several peak days with more than 110000 passengers.
The expansion of our route network and the addition of new Airlines last year.
Speaker Change: Highlights to recap on its continued appeal and attractiveness.
Speaker Change: Notably our India returned two series of airport after more than 25 years, Yeah and has it been offering for weekly flights between theory and new daily since June 'twenty 'twenty four.
You were able to provide that with passengers with a reliable and high quality travel experience.
Speaker Change: As confirmed by the various awards our airport has received last year. However.
Speaker Change: However, you also faced several external challenges such as bottlenecks in the European traffic control.
Speaker Change: Political tensions and an increased number of extreme weather events affecting flight operation.
Speaker Change: These slides can pass passenger development that theory gap was between 2019 in 2020 for the various market reaches a series of airport show different developments.
Speaker Change: First in Europe, southern countries and leisure destination have significantly surpassed 2019 passenger levels.
Speaker Change: In contrast countries like Germany, France, and Australia are still below that 2019 capacity.
Speaker Change: Overall however.
Speaker Change: Our most significant markets Europe, so a 99% rebound in passenger numbers compared to 2019.
Speaker Change: Looking at North America, both the U S and Canada, they're clearly above pre crisis level last year with North America exceeding pre crisis volumes by 8%.
Speaker Change: In Asia to see duration, a smaller right, India, Thailand, Japan have reached or even exceeded 2019 levels, while China has not yet returned to its 2019 capacity.
Speaker Change: In 2024, the top European destinations by passenger numbers were a London, Berlin, Amsterdam, and Intercontinental at a leading cities, New York, Dubai and Bangkok.
Speaker Change: Yeah.
In the following slides will give you an overview of our commercial and real estate business.
Speaker Change: Despite the impact of construction project to our retail and restaurant sectors performed consistently well achieving a record turnover in 'twenty 'twenty four.
Speaker Change: The increased turnover and driving us highlight the attractiveness of our offerings and the overall quality of our location.
Speaker Change: Moreover, we successfully fog partnership with new brands.
Speaker Change: Additionally, the strategic alignment of the circle is a piece of this and service help is proving effective the real estate business across the entire airports pairing me to continues to significantly contribute to our company's overall success, achieving a record figure of smell in 'twenty 'twenty four.
Speaker Change: By expanding and modernizing our real estate assets, we are not only stabilizing our income, but also enhancing the long term value of our portfolio.
Speaker Change: The commercial business is progressing further and I'd like to discuss one of our main ongoing project at Zurich Airport.
The development of the landside passenger sones.
Speaker Change: In essence this project aims to better connect the landside facilities off the airport with the circle. Additionally, it will enhance our logistics operations and create an incremental commercial space of 8000 to 10000 square meters up in completion at the end of 'twenty 'twenty seven.
Speaker Change: As a result of this project, we began closing some of our stores and restaurants and February 'twenty 'twenty four and in January 2025, we had to close additional commercial offerings and this will continue in 2026 and 2027.
Speaker Change: The impact has already been reflected in our landside commercial turnover.
Speaker Change: And is expected to accelerate.
Speaker Change: So although it remains relatively insignificant insignificant for our total commercial operations.
Speaker Change: We anticipate mid single digit million Swiss franc loss in commercial revenues per year during construction.
By the end of 2027, the completion of the construction work will reveal the newly renovated passenger areas.
Speaker Change: Freeing visitors and passengers fresh retail and dining options and more spacious pathways.
Speaker Change: Overall due to the high demand for air travel and civic airports popularity as a destination for shopping both landside and airside turnover continued to rise in 'twenty 'twenty four.
Speaker Change: On air side, several new and attractive stars like tenure, our passion and prelaunch luxury they're introduced enhancing the shopping experience.
Speaker Change: Landside turnover also saw a slight increase despite the mentioned construction back.
Speaker Change: The landside commercial area size has been adjusted for two reasons first the current construction work will temporarily reduce commercial space.
Speaker Change: Second domain as mentioned at our Investor day in 2023.
Speaker Change: Reallocated space, we didn't just circle, resulting in less commercial space, but more fixed rental space such as offices.
Speaker Change: And also worth mentioning our various attractions drew numerous visitors to the airport thousands of people visited our observation decks or participated in one of our tours excursion or the Talbot Park Festival of light music contributing to the commercial activity at Siri Gab.
Speaker Change: What.
Speaker Change: And last but not least let's turn our attention to our international businesses, which has experienced a very attractive year I smell.
Speaker Change: I take a look at the passenger ficus at our internationally operated airports in Latin America the.
Speaker Change: Passenger numbers at Florida, Napoli Sad part in 2024 have significantly exceeded our initial expectations.
Speaker Change: Matter of lead you to the closer of the nearby Porto Alegre Airport.
Speaker Change: Last spring severe flooding caused extensive damage at this airport needing travelers to open four Florianopolis airport as an alternative.
Speaker Change: Porto Alegre resumed operations in October 2024, and we now anticipate the normalization of passenger figures in Florida Oh. Please.
Speaker Change: Additionally.
Speaker Change: It's worth mentioning Natal airport, which we successfully took over in February 'twenty 'twenty four.
Speaker Change: As a result, we have been reporting passenger figures for Natal Airport since March 'twenty 'twenty four.
Speaker Change: Now let me provide you a more detailed through the more detailed update on our activities at our international.
Portfolio.
Speaker Change: Let's continue with our airports in Latin America.
Speaker Change: Last year, we celebrated a decade of operation in Brazil, and the flow and open this airport.
Speaker Change: The at Florianopolis are partly marked the fifth anniversary of the new terminal.
Speaker Change: In July 2020 for fly and open this airport achieved a new monthly record with 480000 passengers.
Speaker Change: The International network is steadily increasing for example top introduced a direct connection with least spin in September 2024, making florianopolis to third largest international airport in Brazil, after some Paolo and Rio de Janeiro.
Speaker Change: And Mark I at the new runway construction was completed at the end of 'twenty 'twenty four.
Speaker Change: And he said to begin operation in the coming weeks pending regulatory approval.
Speaker Change: In Vitoria 15, new real estate projects were launched on 80% of the available land last year, which seldom already completed.
Speaker Change: Granting land leases for this real estate projects, providing additional non regulated revenues.
Speaker Change: The International Airport in our toll has a capacity of up to $6 5 million passengers per year, initially mashes to enhance infrastructure and improve the passenger experience were implemented to ensure long term quality, which passengers are used to from our Brazilian air.
Speaker Change: Parts.
Speaker Change: In November 2020 for determining the extension that Dikika Airport was inaugurated.
Speaker Change: The expansion will significantly boost the airports capacity and further enhance the passenger experience as well.
Speaker Change: I'm personally very proud of our airports in Latin America. They are among the best.
Speaker Change: And most advanced in their countries in terms of quality passenger satisfaction and sustainability.
Speaker Change: At the same will apply to an OIBDA by India part will be operational which I will talk about on the next slide.
Speaker Change: Now we don't have part has been and will continue to be a hot topic, among our investors and analysts given its scale. This project is a significant game changer for our international portfolio and is anticipated to substantially contribute to outgrow the company in the coming years.
Speaker Change: Over the last months, we have made remarkable progress in constructing the terminal completing the wrong way and building and building the air traffic control tower.
Speaker Change: The total construction cost for phase one remains within the previous estimate of 750 million Swiss franc.
Speaker Change: Certainly we have awarded all natures up concessions to third parties.
Speaker Change: At the end of the second quarter 2025.
Speaker Change: Expect it to begin with cargo services first st's interest of infrastructure will be fully completed by the interior of the rack on the terminal will take a few more months.
Speaker Change: Once finished passenger traffic will commence.
Speaker Change: Throughout the project it was evident that the final months, leading up to the opening will be the most challenging as everything now comes together.
Speaker Change: Therefore, a key question will be addressed in the coming weeks.
Speaker Change: Providing guidance on passenger volumes or EBITDA is difficult at this stage, we estimate that roughly neutral EBITDA contribution from Noida for the current financial year.
Speaker Change: The actual outcome will depend on the speed of the operational ramp up and we will provide a detailed operational update in August when we publish our half year figures.
Speaker Change: [laughter].
Speaker Change: We remain optimistic and committed to about the long term potential of this 40 year concession and our economic projections in the business plan has been confirmed.
Speaker Change: Additionally, we are planning a site visit for investors and analysts during the first week of November 2025.
Speaker Change: The reason it will include a detailed airport tour of course in the Q&A session with members of the Noida Airport Management Board.
Speaker Change: We are very happy to showcase our new approach Act.
Speaker Change: For those interested in attending please contact our investor relation Department.
Kevin: Now I will hand over to Kevin who will provide our financial update and outlook.
Kevin: Thank you Lucas good afternoon, ladies and gentlemen, welcome and thank you for joining US I will now provide an overview.
Kevin: The company's financial performance, let me start with a financial overview, the increasing traffic volume and the growth of unregulated to business activities have resulted in a record breaking revenue.
Kevin: At the start of 'twenty 'twenty four user fees were increased due to the refurbishment of the baggage sorting and handling system.
Kevin: This was the primary reason.
Kevin: Aviation revenues surpassed passenger normal growth by 10%.
Kevin: Aviation revenue reached 102% up to levels seen in 2019.
Kevin: Non aviation revenue grew by 4% amounting to approximately 119% of 2019 revenues.
Kevin: EBITDA rose by 8% year on year to 743 million Swiss franc, setting a new record.
Kevin: Compared to 2019, EBITDA was up by 14%.
Kevin: The consolidated results for the year rose by 7% to 327 million Swiss francs. This includes an impairment of around 8 million Swiss francs for airport any catch Ely and a free millions Swiss franc valuation adjustment for pension fund liability.
Kevin: <unk> in personnel costs.
Kevin: So let's take a closer look at the non aviation figures total commercial and parking revenue increased by 5% year over year advertising media and promotions saw the highest relative growth, partly due to higher passenger numbers.
Kevin: Real estate revenue also performed well, reaching a record high of 197 million Swiss francs, the reduction in energy and utility costs allocation was balanced by higher revenue from rental agreements.
Kevin: The anticipated decrease in energy and utility cost allocation was mainly due to lower energy and waste costs that could be passed on to tenants.
Kevin: Revenue from services grew by 3% to 49 million Swiss francs, 40 year, mainly due to increased passenger volumes.
Kevin: The international business continued to expand benefiting among other things from the operational takeover of the airport in Natal, Brazil in February 'twenty 'twenty four.
Kevin: The airport in Florida, Napoli, Brazil saw a significant increase in passenger numbers due to the temporary closure of the nearby Porto Alegre Airport.
Kevin: Overall revenue in the International Airport business rose by 11% to 141 million Swiss francs.
Kevin: 'twenty 'twenty four saw a further increase in costs, mainly due to volume effects and inflation.
Kevin: Overall operating costs increased by 6% year on year, reaching 593 million Swiss francs, when excluding construction project expenses adjusted operating costs rose by 9% to 566 million Swiss francs.
Kevin: At our half year report the increase in operating costs was 14% showing that the cost growth has slowed down in the second half of 'twenty 'twenty four.
Kevin: Compared to 2019, the adjusted operating expenses were 17% higher.
Kevin: Personal expenses saw an 11% increase mainly due to a rise in headcount and adjustments for inflation.
Kevin: This figure also includes as mentioned before a free million Swiss francs valuation adjustment for pension fund liabilities, reflecting an increase in the conversion rate.
Kevin: According to our half year report personally expenses rose by 15% in the first six months of the year.
Kevin: This indicates as well that the rate of cost growth slowed down in the second half of 'twenty 'twenty four.
Kevin: Costs for police and security went up by 11% amounting to 130 million Swiss francs, driven by higher passenger volumes and inflation adjustments.
Kevin: In contrast, energy and waste costs decreased by 9% totaling 44 million Swiss francs, thanks to reductions in electricity and district heating tariffs.
Kevin: I will now outline some key financial ratios net financial debt saw a slight increase however, the leverage ratio remained stable at around one six times due to higher EBITDA.
Kevin: The increased earnings positively influenced our return on invested capital, which rose to 7.9%.
Kevin: Primarily due to changes in working capital and higher income taxes paid operating cash flow decreased to 642 million Swiss francs higher investments along with the upfront payment for the new airport and Natal impacted our free cash flow generation.
Kevin: Excluding the upfront payment for atoll, which can be considered as a 90 day payment free cash flow would have been around 130 million Swiss francs.
Kevin: With the completion of neither this year and without any new larger projects, we anticipate a substantial increase in free cash flow generation for the group in the future.
Kevin: Yeah.
Kevin: We also tackling major infrastructure projects like replacing the baggage sorting system and enhancing the landside passenger zones.
Kevin: These projects are being carried out while the airport is operational we crying significant commitment from our employees and partner companies.
For the development of the landside passenger zones. The next construction phase has begun.
Kevin: This leads to a considerable expansion of the construction sites on our land side facilities and the associated closure after circle tunnel.
Kevin: Additionally, several shops restaurants and services had to be relocated or closed.
Kevin: The most important project in the next decade in Zurich is the construction of the new dock eight and the overall development of the main Apple complex. These.
Kevin: These investments are essential to maintain our status as a reliable efficient and high quality International Airport.
Kevin: Our most significant international project in 2024 was the development of Noida Airport in India, which we are looking forward to open this year.
Kevin: Let's now switch to a more technical topic the airport charges at Zurich Airport.
Kevin: On this slide I will provide an overview of the next steps regarding tariff setting at Zurich Airport the.
Kevin: The course is clearly defined by the ordinance on airport charges the process to adjust our tariffs will commence soon as we need to invite the negotiating parties next month before.
Kevin: Before starting the negotiations.
Kevin: We will also send them a charge proposal there.
Kevin: This proposal will serve as the basis for the bargaining.
Kevin: They involve parties will then have time to prepare for the actual negotiations.
Kevin: Which will begin in October this year.
Kevin: As indicated on the slide these discussions are expected to last four to six months.
Kevin: Up to this point the timeline is very clear however, the outcome of the talks remains uncertain.
Kevin: In case of successful negotiations the earliest we could implement new tariffs would be around mid 2026.
Kevin: In case, a failed negotiations we will rely on the federal office of civil aviation and their degree might be subject to appeals by all the parties.
Kevin: Therefore under this scenario it is difficult to predict when the new charges will take effect, but it would be earliest around the end of 'twenty 'twenty six or the beginning beginning of 'twenty 'twenty seven.
Kevin: Additionally, the level of airport charges will depend on the negotiations. This primarily depends on do you expect the traffic outlook anticipated regulated investments expected regulated WAC and projected regulated operational expenses.
Kevin: Going forward, we will of course keep you updated on the process. However, we will not be in a position to comment on the expected outcome during the process.
Kevin: So let's proceed to the outlook and the new dividend policy in 2025, we expect around 42 million passengers at Zurich Airport.
Kevin: Which would be a new record.
Kevin: Aviation revenue are expected to align with traffic growth non aviation revenue is anticipated to be slightly higher overall at the Zurich side, increasing traffic volumes will positively impact parking revenue. However, commercial revenue may decline somewhat due to the temporary.
Kevin: <unk> of additional commercial spaces as part of the projected Avalon landside passenger zones.
Kevin: Revenue from rental agreements is forecast to rise slightly while energy and utility cost allocations will have a dampening effect due to tariff reductions for electricity in district heating overall.
Kevin: Overall real estate revenue is expected to decrease slightly.
Kevin: Revenue from international basis, we will see an increase and for the first time will include contributions from operating the new airport in Noida, India.
Kevin: Operating expenses are also projected to rise mainly due to the startup of Noida.
Kevin: Volume related increases inflation.
Kevin: And measures to enhance our attractiveness as an employer.
Kevin: Personal expenses will rise more than average due to the insourcing of passengers reproduce mobility services P. R. M <unk>.
Kevin: She will be offset by lower other operating costs.
Kevin: In summary, we expect EBITDA in 2025 to be roughly the same as the previous year. However, consolidated profit is likely to be lower than in the previous financial year.
Kevin: If the opening of Noida airport depreciation and interest expenses will impact the income statement.
Kevin: It is important to note that we expect another strong financial performance from our main asset Zurich Airport in 2025, we project a decrease in the group's net profit will be primarily due to an OIBDA airport.
Kevin: Investments at Zurich side are projected to be between 300, and 350 million Swiss francs in 2025.
Kevin: Subsidiaries abroad are expected to invest an estimated 300 million Swiss francs with the majority allocated to the completion of construction of the new airport in Noida.
Kevin: Before we start the Q&A our final slide on the new dividend policy.
Kevin: We have previously informed the market about announcing a new dividend policy today.
Kevin: This slide shows our new dividend policy and the comparison with the old policy, which lasted until the financial year 'twenty 'twenty four.
Kevin: They have a lot being in your dividend policy and the current business environment has been challenging.
Kevin: We had to consider several factors, including upcoming Capex programs in Zurich.
Kevin: Central changes in tariffs flexibility for M&A options, both in Zurich, and internationally and the overall leverage of the group.
Kevin: Our board of directors has decided to increase the payout of the ordinary dividend from 40% to 50% of net income as shown on the slide.
Additionally, we will pay out the next 25% of net income if the groups groups leverage remains low.
Kevin: This means that total payout could be up to 75% of our net income.
Kevin: Based on our internal leverage ratio forecast and in absence of any major M&A transactions.
Kevin: We expect to pay out roughly 75% in the coming years.
Kevin: The new dividend policy will take effect, starting with the financial year 2025, with the first actual payment.
Kevin: <unk> in the second quarter of 'twenty 'twenty six.
Kevin: Our updated dividend policy demonstrates our commitment of being an attractive dividend paying company.
Kevin: While also allowing for further organic and inorganic growth.
Kevin: Okay.
Lukas: Thank you and back to you Lukas.
Lukas: Thank you Karen.
Speaker Change: We have now reached the end of our results presentation I'll begin the Q&A session.
Speaker Change: I will now hand over to Stefan who will moderate the session.
Stefan Vapor: Yes. Thank you very much we have received quite a number of questions. So let's get started right away.
Speaker Change: First one is on no.
Speaker Change: Can you give us your latest updates on the construction works and when do you expect to start operations.
Speaker Change: Yes sure.
Speaker Change: Construction is.
Speaker Change: Continuing the most important infrastructure has been built.
Speaker Change: These catalog we had originally was was tight but.
Speaker Change: We expect that in the Q2 <unk>.
Speaker Change: 2025.
Speaker Change: We can inaugurate the airport and then ramp up over the next two to five months runways ready tower is ready the terminal still need some interior work and many small details.
Speaker Change: And this leads to kind of a soft soft opening it's a 40 year concession.
Speaker Change: And we are still super confident that the project.
Speaker Change: Is absolutely key for us financially and strategically.
Speaker Change: And if I may.
Speaker Change: Can add more general remark Golden annoyed as he seems to be really the hot topic in our today's communications package.
Speaker Change: As Kevin has mentioned I mean building a greenfield.
Speaker Change: Apart in India was like a huge adventure to us at the beginning with a very tight schedule from the beginning which we had a lot of respect we had colgate in between which we also managed quite.
Speaker Change: Quite well and are in my view.
Speaker Change: And whatever belongs to the main assumption of the business plan be it the capacity demand etcetera.
Speaker Change: Financing everything has been confirmed or was even better than on the initial assumptions. When we had set the business plan for our investment decisions.
Speaker Change: And the same is true now for the next mountain to be talking about a 40 year concession, where we are fully convinced that our assumptions are.
Speaker Change: At least a minimum on the on the Conservative side. We have also accelerated additional aircrafts stands from the second phase already.
Speaker Change: At the end of the first phase with because simply we see a strong demand there and overall, okay. We will have like the slight delay now India opening but from the investor's perspective, given these 40 year concession and the privilege I would really call. It a privilege to operate the second capital Airport.
Speaker Change: In India I'm not so much concerned about these six or eight months delay we are now facing with the ramp up of operation.
Speaker Change: We have received a number of questions on the guidance, especially on traffic.
Speaker Change: Just looks a bit conservative so capacity planned by airlines for the first nine months is up 6%.
Speaker Change: And Lufthansa just yesterday provided guidance for 4% for the whole group.
Speaker Change: So good.
Speaker Change: Potentially hold traffic back in theory, do we expect to see any decline in to see load factor or <unk>.
Speaker Change: What else.
Speaker Change: Okay.
Speaker Change: That may start I mean, we do not have a demand issue here in Zurich Airport, it's more of a supply issue.
Speaker Change: People want to travel seat load factors are still very high.
Speaker Change: So the latest forecast, we made and which is also part of the guidance. We have today is based on the.
Speaker Change: Sensual our carriers you see at your rig airport, we will be happy if it will be more than $42 million and there are maybe some signs that it could be more but right now we.
Speaker Change: Rely our forecast or our guidance on what is.
Speaker Change: What seems to be the most realistic based on those we get from our airline partners.
Speaker Change: And so this might not be the the airline within the Lufthansa group that has the strongest growth. This year. This is all saw several issues for example, the ancient situations versus a lot of these.
Speaker Change: Bread in Sweden, a engines, which is still something that they compensate with white. Please.
Speaker Change: But I don't think that suites smooth I have flagged the same grow then the Lufthansa group overall. Nevertheless, we are at the beginning of the of the year capacity stir demand is high if there's a need of adopting the guidance during the year, we will obviously do.
Speaker Change: Another one on the guidance. This time for the investments we are guiding for capex of $300 million to $350 million a year, which is.
Speaker Change: Might be in a bit higher than will be spent in 2024.
Speaker Change: What should we.
Speaker Change: We expect going forward in terms of investments.
Airport has anything changed compared to previous communications.
Speaker Change: No nothing has changed there might be a bit of a phasing of of noida, but here in Zurich as we also communicated in the past we expect also going forward.
Speaker Change: Flea free on a million Swiss francs of investments per year here at Zurich Airport and obviously this year.
Speaker Change: And Artophorion Amelia and at 40, finishing of Noida and order rather small projects, we have at our subsidiaries.
Speaker Change: And the amount of Capex that we could spend this is limited given the numbers of engineers, we ask even see everything but we are doing is on the day of the normal operation of the airport. So even taken clear we are not in a position of doubling capex in Zurich.
Speaker Change: Simply not possible. We have also in the past we had like one large project. After each other this comes a little bit in cycles, but on the sustainable level of debt as Kevin has mentioned.
Speaker Change: Yeah.
Speaker Change: A related question on the investments outside of Zurich. So the balance sheet has lots of room.
Speaker Change: Are there any plans for new projects abroad. Besides the second phase of of Nevada.
Speaker Change: Not for the time being B.
Speaker Change: The focus clearly all forces now on OIBDA.
Speaker Change: Honestly not involved in any other meaningful approach eggs for the time being but jeez when nowadays in operation we.
Speaker Change: Are still committed to our focus areas Latin America, India, India will have flag, a strong pipeline of new airports, but one thing after the out there, but there does remain interesting markets and refined if you find like the right approach ache.
Speaker Change: In the right niches, then we will have a look at it but.
Speaker Change: Not an accelerated way we are now focusing in Noida and no other projects are on today.
Speaker Change: And we do have a few questions on the costs regarding 2025 could you. Please elaborate the moving parts, so where do we expect to see increasing costs.
Speaker Change: Yeah.
Speaker Change: Maybe first to repeat what I said before we have seen a significant slowdown of cost growth in the second half of 'twenty 'twenty.
Speaker Change: 24.
Speaker Change: In 2025, we do have some volume effects, which drive costs more passengers more cost than on the security control, we have some rather small adjustments on the head counts.
Speaker Change: In order to cope with the traffic for instance bus drivers.
Speaker Change: As I mentioned, we do invest in our labor force specifically on shift brokers.
Speaker Change: And then we have adenoidal opening so those are the main moving parts.
Speaker Change: But I think we said that also at the half year results. Our goal is to create economies of scale going forward and they should or latest by 2026, but we also see here in Zurich.
Speaker Change: On a clear path of Cigna.
Speaker Change: Significant slowdown in growth.
Speaker Change: The next question is annoyed them, what's the latest in terms of the regulatory approval what timeline do you have in mind for obtaining the aerodrome license and airlines slot allocation.
Speaker Change: Yes.
Speaker Change:
Speaker Change: Yeah, we should expect the license in the next call.
Speaker Change: Couple of weeks.
Speaker Change: That's also the talks we have and which makes it a bit difficult to specifically say when the inauguration date will be regarding the tariffs we handed in the fee application at the end of 2020 free.
Speaker Change: And the process is still ongoing we expect a temporary position so at hawk tariffs by the regulator before the start of operation. Our goal is to be as close as what we should have then Esther.
Speaker Change: Final are terrorists.
Speaker Change: And also on Noida for the 2025 financials, what to expect in terms of depreciation and interest costs.
Speaker Change: We expect our with respect to interim interest payments 40 million Swiss francs for the full year and roughly 25 million.
Speaker Change: In depreciation on a yearly basis.
Speaker Change: Yeah.
Speaker Change: Another one on Noida.
Speaker Change: Traffic forecast, so how much passengers to be expected for the financial year 2025 and 2026.
Speaker Change: For the Swiss fiscal year, we expect one to one and a half million passengers.
Speaker Change: And then it should be up to 8 million passengers for F. 'twenty.
Speaker Change: 26.
Speaker Change: And when do you expect the phase two of Noida Airport.
Speaker Change: Happen and are there any ideas on how to finance this next phase.
Speaker Change: I mean right now the focus is clearly on.
Speaker Change: Opening the airport so phase one Lucas mentioned, we are building some additional stance.
Speaker Change: Kind of a pre investment.
Speaker Change: In phase two but as soon as it's open we will tackle also the way how we are going to finance. It I think we are in a very strong position there are different.
Speaker Change: Alternatives to tackle it with.
Speaker Change: With a partner doing it on our own but that's something we will elaborate as soon as.
Speaker Change: We have opened the airport and it's fully operational.
Speaker Change: Coming back to Zurich on the expansion of the landside area.
Speaker Change: According to the presentation it looks like there.
Speaker Change: Headwinds to commercial revenues might be even higher in 2025, and 2026 compared to last year.
Speaker Change: Any thoughts on this.
Speaker Change: Well, that's true slowing it belongs to really the construction work we are today in the marketing of the new space already 40 for the pro checks over the new additional commercial space N.
Speaker Change: D. C is very good and strong demand why wait the high frequencies that we have at the airport. The airport itself remains attractive for commercial business and same is true for food and beverage, which.
Speaker Change: Even over performed over the last year, but there will be a construction impact but before you can.
Speaker Change: Create something of something which is new and of new beauty, you'll have to do like this construction work so.
Speaker Change: Zing According to plan.
Speaker Change: Maybe to add there I mean, we already had some effects on our P&L in 2024, and we will also have some in 2025 and 2026, but that's in the mid single digit million range. So not a huge effect that's caused by the.
Speaker Change: Closures, we face wireless just Lucas mentioned constructing the new world of E. L. P project.
Speaker Change: Next one is on the real estate revenues for 2025, why do you expect a lower contribution from energy and utility cost allocation.
Speaker Change: Our energy prices rising these days.
Speaker Change: We purchased almost 100% of our electricity volumes, we need in advance. So therefore, we do not see a significant risk that that is my tour in India on the other side.
Speaker Change: And 50% of all the electricity costs that we have in our P&L, India Opex I'll pass through so even if you're facing as we have seen it over the last year, increasing cost 50% is always a pass through to tenants.
Speaker Change: And a quick one on the circle.
Speaker Change: How much contribution to revenue and EBITDA for 2024.
Speaker Change: That's a $40 million in revenues 25 million EBITDA for our share of 51%.
Speaker Change: Yeah.
Speaker Change: Next one is again on Noida.
Speaker Change: We are now guiding for a neutral EBITDA contribution this year.
Speaker Change: What would've been the guidance without the two month delay.
Speaker Change: That's pretty much the same.
Speaker Change: Also neutral.
Speaker Change:
Speaker Change: And then a question related to the dividend the new updated dividend policy.
Speaker Change: Is there any likelihood of net debt to EBITDA going beyond two and a half times in the next couple of years.
Speaker Change: If you look at our midterm business plan and our leverage ratios we projected in there.
Speaker Change: And let's say in absence of any major M&A transaction, we believe we will be below two and a half.
Speaker Change: Leverage ratio.
Speaker Change: So there is quite a highly high chance that we pay out 75% over the upcoming years.
Speaker Change: The way, we think the new dividend policy. So we are now going step to.
Speaker Change: Second higher payout rather to the higher end, but if something happened as a disruptive event. Then we now have like the option of at least maintaining the 50%.
Speaker Change: Like granted and but having like this variable component of 25% as Kevin has mentioned from today's perspective, according to our planning.
Speaker Change: We expect to pay out 75% going forward.
Speaker Change: Okay.
Speaker Change: Following up on the opening of Noida is there any risk you see further delays.
Speaker Change: It's always a risk of further delay of course, but that's now the actual planning and this is based on a higher confidence level.
Speaker Change: And given the delay are there financial penalties you pay.
Speaker Change: It actually financial penalty penalties to pay that's approximately 300000 Swiss francs per month, So 10000 Swiss francs per day.
Speaker Change: But we can contractually pass them on to Tata, who is constructing an airport for US that's part of the contract we signed with them.
Speaker Change: Now switching to Latin America could you comment on your plans for your holdings in Latin America.
Speaker Change: Wouldn't it make eventually sense to sell them or partner with an infra funds to realize the full value of these holdings.
Speaker Change: It's an interesting question of course are always depending on the price there's a different answer to that question.
Speaker Change: What we have done over the last couple of years as we really made like an active portfolio management, whereas the majority of our holdings in Latin America belonged to ourself by Hollander presented these T cells.
Speaker Change: More flexibility for the future to think about how to develop this portfolio better.
Speaker Change: By the way to partner or not we are not in we see a strong demand first of all from the market to a partner in these long term assets, especially as these are now Derisked every capex is down on the existing airports.
Speaker Change: And this will be a question to us, which we are currently not actively.
Speaker Change: Pursue but for the I would say over the next couple of years and also nowadays in yellow.
Open to assess whether we want to develop the international portfolio by ourselves or together with the right partner. This depends from my view, mainly on the goods governance with his partner as we for example have into circle with Swiss life as a joint venture.
Speaker Change: And depending on the price, but I personally think that this might be.
Speaker Change: One part of creating value out of your international portfolio. That's the way how we look at it from a strategic point of view and on the strategic perspective.
And we have a question on the noise charges over the end of last year, we communicated that we intend to increase the noise charges.
Speaker Change: And any idea on the revenue impact of such an increase.
Speaker Change: Yes, the the history of the story about that is that we are having like higher charges on flights in the last 30 minutes of our operating hours just to give an incentive to the airline to.
Speaker Change: It reduced the number of flights after 11 o'clock in the evening. Therefore, we increased the tariffs after 11 and after 11 15 is a further step this count reviewed about 10 or 15 to 20 million a day.
Speaker Change: Additional revenues, but this is something that goes into the overall pulp of regular of regulated returns. So when we have like the next tariff negotiation. This will be neutralized within the regular regulated return it's more of an incentive from the noise topic than something that we are.
Speaker Change: Really creating values.
Speaker Change: Next one is on the spend per passenger.
Speaker Change: What should we expect in terms of spend per passenger once that land site works are completed.
Speaker Change: And the spend per Pax, we communicate that's only focusing on their site because of what we do on landside, that's simply this different dynamic.
Speaker Change: A lot of people are using the airport for commuting we have more than 150000 people using the airport on a daily basis, a lot of people working here.
Speaker Change: 300, then.
Speaker Change: Free on different companies at the airport 35000 employees and the majority of them are using the landside shopping to eat and shop in the morning or in the evening or at lunch. So that's a different dynamic.
Speaker Change: Yeah.
Speaker Change: And next one is on the connectivity of Noida Airport.
Speaker Change: First one.
Speaker Change: Is the access road from the Yamuna Expressway ready and the second one how about connectivity.
Speaker Change: Connectivity with public transportation in particular to high speed rail service.
Speaker Change: Yeah.
Speaker Change: First question, yes connection to the Yamuna highway that connects daily to Accra.
Speaker Change: It's a ready by the opening that there was under the responsibility of the state, but it's a it's down.
Speaker Change: And the second thing in terms of public transportation, we will firstly operate with buses sold is this also set by a contract that we have signed with the with the operator.
Speaker Change: And the state is also constructing an extension of an existing train line to the airport, but this will not be ready by the opening but theres approach ex driven by the state of connecting the widow Airport also to the train network that connects them.
Speaker Change: And OIBDA airports to the <unk> to the city center of daily.
Speaker Change: And a question related to Antofagasta.
Speaker Change: We are about to hand back this concession in 2026, so what will be the impact on on the revenue once this concession will be gone.
Speaker Change: That are approximately six to 7 million Swiss francs per year.
Speaker Change: And Abby contribution was lower than 2 million in the.
Speaker Change: 2020 for Ya.
Speaker Change: And again on the guidance we have.
Speaker Change: Kind of long term guidance during the Covid years, saying that by 2025, we will have an incremental EBITDA of 100 million now we nearly achieved this target however guidance for this year now is flat so.
Speaker Change: What's what's amazing to really achieve the 100 million target.
Speaker Change: And we expect that we on a rolling basis that in Q1, we can reach those $100 million.
Speaker Change: Swiss Franc bridge to the 2019 levels.
Speaker Change: We also discussed.
Speaker Change: You should do a new guidance, but right now there are some things into limbo tariffs are opening of Noida.
Speaker Change: And that's why we want to wait.
Speaker Change: At least until the end of this year and then discuss again, if there should be another kind of midterm guidance going forward.
Speaker Change: Next we have a question on the charges here in Zurich. What is your view what should be assumed in terms of the fear regulated whack here in Zurich, which currently sits at 5%.
Speaker Change: Okay.
Speaker Change: We for technical reason, we answered this question in the past and the whole theory solved and the cold branches before for technical reasons. We are not commenting now as we are now really starting to negotiations and maybe we don't have any numbers to set in the AR and the public.
Speaker Change: It's more for technical reason, if you're listening for a longer period to US you know our opinion on that.
Speaker Change: And we have another question Noida, which refers to the long term business plan or what we've disclosed during the C and D. In 2023, so already a medium to longer term assumptions still accurate.
Speaker Change: And our to 750 million Capex is it still the right number for phase one.
Speaker Change: Yeah.
Speaker Change: The second question definitely yes, those are still well at 750 million Swiss francs for phase one and also the business plan itself. I mean, we do have obviously a bit of shifts, but it's a 40 year concession and the figures. We have in there are still are still valid.
Speaker Change: And we've been talking about.
Speaker Change: Tailwind, we've had in Florida, Napoli because of the closure of a nearby airport.
Speaker Change: Any idea on what might be the impact.
Speaker Change: The airport has now reopened again.
Speaker Change: Yeah.
Speaker Change: Right.
Speaker Change: A bit difficult to quantify precisely.
Speaker Change: What the effect of Porto Alegre was booked.
Speaker Change: Soon as it's when it's open again, we do still see.
Speaker Change: Some.
Speaker Change: Shifts positive shifts when we compare months two months.
Speaker Change: And what we also achieved in 2024 is that.
Speaker Change: Well I don't believe the airport is deferred largest with respect to international connections. So we had quite a good organic growth and.
Speaker Change: And we expect therefore that we can continue or not and boost to same M. Obviously not with the same growth numbers. We have seen in this specific year, but there will be some permanent a positive effect.
Speaker Change: I do see actually the a part of a labor effects quite clear in the in the chart on the presentation on slide 17.
Speaker Change: If you compare it to the numbers of 2023, you can roughly estimate what the impact was.
Speaker Change: Sure.
Speaker Change: Now we've already talked about the additional depreciation and financing costs for Noida Theres now a related question, whether or not this will depend on the opening date.
Speaker Change: Yep correct them at least for the the numbers this year.
Speaker Change: Later, we would open the lower is the P&L effect for at 2025.
Speaker Change: And the nonrecurring as mentioned was like the full year effect of financing costs and depreciation in the obviously depend.
Speaker Change: Depending on the opening this will have an effect on the financial year 2025.
Speaker Change: In Florida, you dividend policy, you are saying that we considered in net profit excluding one offs.
Speaker Change: So if we were to bringing a partner into noida.
Speaker Change:
Speaker Change: Cash and some money.
Speaker Change: Would we then still consider paying an exceptional dividend.
Speaker Change: Let's cross the bridge when we get there.
Speaker Change: Okay I think we're done.
Speaker Change: With all the questions I hope I didn't Miss anything and in case, there are any questions left and please do not hesitate to contact us.
Speaker Change: Okay. Thank you very much for your time your interest.
Speaker Change: Sorry.
Speaker Change: Relatively to the other conference there were a lot of questions. We see like about the interest of your Juris.
Speaker Change: I would like to close the conference with the final remark. It changed so do we have in the investor relation team Marshall answer who most of you have come to know us a competent financial expert will be continuing his professional career and it'll be our new CFO at Siri Gab.
Speaker Change: What I'm very happy that we have been able to recruit Marcel for this important position as we have great confidence based on his excellent work in the past most of it moving to Brazil, They just drive into second quarter and on behalf of the whole.
Speaker Change: The entire management team I would like to thank Marcia for his commitment in theory, they're very professional support it provides to U S investors and analyst and wish him a shelf success in his new role. Thank you very much. Thank you for listening.
Speaker Change: Have a good afternoon. Thank you could have just one final remark you said the newest CFO Zurich airport they would at least be notifying me yes.
Speaker Change: Oh, it's I would also want to thank you for CFO for at Zurich Airport, Brazil.
Speaker Change: Well deserved and we will definitely Miss you in Zurich, but theyre all the best for your new role in the second half of 2025.
Speaker Change: Every months for correcting me.
Speaker Change: It's really a mistake is becoming our CFO at.
Speaker Change: Syrek airports, Brazil, and carrying remains our CFO at Zurich Airport group. Thank you [laughter]. Thank you.
Speaker Change: Yes.
Speaker Change: [noise].
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: [noise].
Speaker Change: Yeah.
Speaker Change: Hum.
Speaker Change: [noise].