Q2 2026 Fraport Frankfurt Airport Services Worldwide AG Earnings Call - Pre-Recorded

August 6, 2026

Speaker #1: We will have our conference call, as usual, to answer all your questions. As you all know, after a solid start to the year in Q1, markets became volatile during this first half-year of '26.

[Company Representative] (Fraport): We will have our conference call as usual to answer all your questions. As you all know, after a solid start to the year in Q1, markets became volatile during this H1 2026. This we already highlighted during our last publication in May, and today we will take a more detailed look on the influence of the current geopolitical situation and the market environment on our business development in Frankfurt and abroad. Apart from that, I will take a closer look at the early days of our Terminal 3 operations and the future potentials before I will guide you through our Q2 financials. First, let's start with the current traffic development at our group airports on slide number three.

Speaker #1: This we already highlighted during our last publication in May, and today we will take a more detailed look on the influence of the current geopolitical situation and the market environment on our business development in Frankfurt and abroad.

Speaker #1: Apart from that, I will take a closer look at the early days of our Terminal 3 operations, and the future potentials before I will guide you through our Q2 financials.

Speaker #1: But first, let's start with the current traffic development at our group airports on slide number 3. You will find the Q2 '26 development compared to '25 as blue bars and the same is for H1 numbers in purple and June figures stand alone in gray.

[Company Representative] (Fraport): We will find the Q2 2026 development compared to 2025 as blue bars, and the same is for H1 numbers in purple, and June figures stand alone in gray. As you can see on the left, Frankfurt realized negative growth rates in all three categories after a positive development in Q1. This has been primarily driven by the massive Lufthansa strikes, weather-related cancellations, and the war in the Middle East. If we adjust the development for lost passengers due to strikes and weather conditions, which amounted to close to 700,000 in H1, Frankfurt would have grown by around 1.5% in the first six months of the year. Looking abroad, apart from Antalya, the international group airports in general perform very nicely. First of all, Fraport Greece continues its growth path with a 5% increase in passenger numbers.

Speaker #1: As you can see on the left, Frankfurt realized negative growth rates in all three categories, after a positive development in Q1. This has been primarily driven by the massive Lufthansa strikes, weather-related cancellations, and the war in the Middle East.

Speaker #1: If we adjust the development for lost passengers due to strikes and weather conditions, which amounted to close to 700,000 in H1, Frankfurt would have grown by around 1.5% in the first 6 months of the year.

Speaker #1: Looking abroad, apart from Antalya, the international group airports in general perform very nicely. First of all, Fraport Greece continues its increase in passenger numbers.

Speaker #1: Looking at South America, you see that in H1, Brazil grew by 12%, still benefiting from the recovery after the closure of Porto Alegre Airport until late '24, and the soft start into '25.

[Company Representative] (Fraport): Looking at South America, you see that in H1, Brazil grew by 12%, still benefiting from the recovery after the closure of Porto Alegre Airport until late 2024 and the soft start into 2025. Now in Q2, the momentum normalized somewhat to a still solid growth rate of 4%. Lima currently faces a slower than anticipated traffic momentum, especially driven by LATAM Airlines and SKY Airline adjusting capacity as a reaction to the higher oil and jet fuel prices as a consequence of the war in Iran. Our remaining European airports in Bulgaria and Ljubljana show a strong development this year, driven by capacity additions. Last but not least, Antalya suffered from the proximity to the war region due to notable booking hesitancy in H1, which led to negative Q2 and H1 passenger numbers of -8% and -6% respectively.

Speaker #1: Now, in Q2, the momentum normalized somewhat to a still solid growth rate of 4%. Lima currently faces a slower-than-anticipated traffic momentum, especially driven by LATAM Airlines and Sky Airlines adjusting capacity as a reaction to the high oil and jet fuel prices as a consequence of the war in Iran.

Speaker #1: Our remaining European airports in Bulgaria and Ljubljana show a strong development this year, driven by capacity additions. Last but not least, Antalya suffered from the proximity to the war region due to notable booking hesitancy in the first half of the year, which led to negative Q2 and H1 passenger numbers of -8 and -6% respectively.

Speaker #1: All in all, this leads to a passenger growth at our fully consolidated international airports of 5% in H1 '26, of 4% in Q2. In total, so including for Frankfurt, we handled 77.7 million passengers, which was a slight increase of 1% in the first half of the year.

[Company Representative] (Fraport): All in all, this leads to a passenger growth at our fully consolidated international airports of 5% in H1 2026, of 4% in Q2. In total, so including for Frankfurt, we handled 77.7 million passengers, which was a slight increase of 1% in H1. Based on the current developments and the outlook for the summer, which is impacted by Lufthansa capacity adjustments, we now forecast a passenger volume in Frankfurt on about the level of 2025. On my next slide, I would like to dig deeper into the moving parts of our Frankfurt operations in the past months. Traffic-wise, as just showed, we were heavily impacted by Lufthansa strikes in April, which lasted for 6 days and made us lose around 500,000 passengers. On top of that, we lost around 300,000 passengers to the Middle East in Q2 due to the war in Iran.

Speaker #1: Based on the current developments, and the outlook for the summer, which is impacted by Lufthansa capacity adjustments, we now forecast a passenger volume in Frankfurt on about the level of 2,025.

Speaker #1: On my next slide, I would like to dig deeper into the moving parts of our Frankfurt operations in the past months. Traffic-wise, as just showed, we were heavily impacted by Lufthansa strikes in April, which lasted for 6 days, and made us lose around 500,000 passengers.

Speaker #1: On top of that, we lost around 300,000 passengers to the Middle East in Q2 due to the war in Iran. If we now look at the total passenger numbers, you see that out of those 800,000 passengers, missing from those two major events, on a net basis we just lost 530,000 passengers.

[Company Representative] (Fraport): If we now look at the total passenger numbers, you see that out of those 800,000 passengers missing from those two major events, on a net basis, we just lost 530,000 passengers. In other words, the underlying business at Frankfurt Airport proves to be robust, compensating for around one third of the gross reduction in traffic volumes. This partly comes from higher seat load to and from Africa and Far East as a consequence of passengers being hesitant to fly via Middle East hubs. Even more so, this is driven by higher demands to and from other destinations, especially in Southern Europe. Correspondingly, and as you can see in the green box on the top right, in July, we incurred growth of 1.4% again, supported by the school summer holidays leading to a year-to-date passenger development of -0.5%.

Speaker #1: So, in other words, the underlying business at Frankfurt Airport proves to be robust, compensating for around one-third of the gross reduction in traffic volumes.

Speaker #1: This partly comes from higher seat load to and from Africa and Far East, as a consequence of passengers being hesitant to fly via Middle East hubs.

Speaker #1: But even more so, this is driven by higher demands to and from other destinations, especially in southern Europe. Correspondingly, and as you can see in the green box on the top right, in July we incurred growth of 1.4% again, supported by the school summer holidays leading to a year-to-date passenger development of -0.5%.

Speaker #1: Speaking about Frankfurt, of course, I would like to take a look at Terminal 3 as well. After the opening on April 23, we transferred all T2 airlines in line with our schedule within less than 7 weeks and closed Terminal 2 for passenger operations on June 9.

[Company Representative] (Fraport): Speaking about Frankfurt, of course, I would like to take a look at Terminal 3 as well. After the opening on 23 April, we transferred all T2 airlines in line with our schedule within less than 7 weeks and closed Terminal 2 for passenger operations on 9 June. Apart from smooth operations and efficient processes, of course, we know that everybody is looking at the retail performance in Terminal 3. Admittedly, it is still early to run those analysis. However, what we can tell from the first full month of non-Schengen operations in Terminal 3 is that the retail upside is visible despite the headwind from a reduced number of high-value customers from the Middle East and operational disruptions. Long waiting times due to the new EU Entry/Exit System.

Speaker #1: Apart from smooth operations and efficient processes, of course, we know that everybody is looking at the retail performance in Terminal 3. Admittedly, it is still early to run those analyses; however, what we can tell from the first full month of non-Schengen operations in Terminal 3 is that the retail upside is visible, despite the headwind from a reduced number of high-value customers from the Middle East and operational disruptions.

Speaker #1: So, long waiting times due to the new EU entry and exit system. Speaking more about the current development that we see with regards to the retail performance in Terminal 3, I'm on slide number 5 now.

[Company Representative] (Fraport): Speaking more about the current development that we see with regards retail performance in Terminal 3, I'm on slide number five now. As said, the first full month of non-Schengen operations was in June, and we are very happy to see a 30% uplift in revenues based on an overall solid retail development and strong advertising results. Taking into consideration that we still missed out close to 30% of last year's Middle East passengers and see room to improve with regards the EES procedures, we are reasonably satisfied with these early indications. On top of that, there's more to come this year, currently being amidst the peak summer season and having the Christmas travel season ahead of us towards the end of the year.

Speaker #1: As that the first full month of non-Schengen operations, was in June, and we are very happy to see a 30% uplift in revenues based on an overall solid retail development and strong advertising results.

Speaker #1: Taking into consideration that we still missed out close to 30% of last year's Middle East passengers, and see room to improve with regards to the EES procedures, we are reasonably satisfied with these early indications.

Speaker #1: On top of that, there is more to come this year. Currently being at mid-peak summer season, and having the Christmas travel season ahead of us towards the end of the year.

Speaker #1: So, all in all, a positive development so far with more potential to unfold based on the upcoming seasonal dynamics, and fully operating the peers of Terminal 3.

[Company Representative] (Fraport): All in all, a positive development so far with more potential to unfold based on the upcoming seasonal dynamics and fully operating the piers of Terminal 3. Moving on from Frankfurt into the world on slide number six. As mentioned before, in general, we are very happy with the traffic performance at our group airports, especially in Europe and in Brazil. In addition to that, there are a few other factors also supporting the financial strength of our international portfolio. In April, for example, we increased the airport charges in Greece by 1.8%, while in Lima, the newly introduced transfer charge for international passengers generates additional revenues. On top of that, Lima Airport is a good example of how to benefit from a newly created and more attractive commercial area.

Speaker #1: Moving on, from Frankfurt into the world on slide number 6. As mentioned before, in general, we are very happy with the traffic performance at our group airports, especially in Europe and in Brazil.

Speaker #1: In addition to that, there are a few other factors also supporting the financial strength of our international portfolio. In April, for example, we increased the airport charges in Greece by 1.8%, while in Lima the newly introduced transfer charge for international passengers generates additional revenues.

Speaker #1: On top of that, Lima Airport is a good example of how to benefit from a newly created and more attractive commercial area. Looking at Q2 standalone, Lima was able to increase their retail revenues by almost 18% on a USD basis, whereas passenger numbers were flat as shown before.

[Company Representative] (Fraport): Looking at Q2 standalone, Lima was able to increase their retail revenues by almost 18% on a US dollar basis, whereas passenger numbers were flat as shown before. In Q2, we were also happy to receive dividends from Greece, Brazil, and Antalya of around EUR 40 million in total. Last, but not least, we made progress with regards our newest addition to the portfolio, Kalamata Airport on the Peloponnese. After the contract was signed on 22 June, it was ratified by the parliament in July. We plan to start operating the airport in autumn with the preparatory works being well on track. All in all, the outlook for the high summer season remains positive for our international airports, compensating for some of the weakness that we see in Frankfurt. What does the business development mean for our financials in Q2? I am now on slide number seven.

Speaker #1: In Q2, we were also happy to receive dividends from Greece, Brazil, and Antalya of around 40 million EUR in total. Last but not least, we made progress with regards to our newest addition to the portfolio, Kalamata Airport on the Peloponnese.

Speaker #1: After the contract was signed on June 22, it was ratified by the Parliament in July. So, we plan to start operating the airport in autumn, with a preparatory work being well on track.

Speaker #1: All in all, the outlook for the high summer season remains positive for our international airports, compensating for some of the weakness that we see in Frankfurt.

Speaker #1: Now, what does the business development mean for our financials in the second quarter? I'm now on slide number 7. Looking at the underlying revenues, excluding for IFRIC 12, we incurred a growth rate of 4% to 1.13 billion EUR compared to last year's Q2.

[Company Representative] (Fraport): Looking at the underlying revenues, excluding for IFRIC 12, we incurred a growth rate of 4% to EUR 1.13 billion compared to last year's Q2. This positive development was driven by the traffic growth in the internationals, as well as increases in airport charges and other prices, which compensated the volume effects in Frankfurt. The EBITDA reached EUR 386 million and therefore slightly exceeded the previous year's level. While D&A increased significantly due to the Terminal 3 inauguration in Frankfurt and annualizing effects from the Lima terminal opening last year, EBIT decreased to EUR 207 million or by 19% as we expected. Correspondingly, our group result amounted to EUR 85 million, a decline of 32%. Looking at the cash generation after a very solid performance last year, incurring a positive free cash flow in Q2, we now recorded a negative free cash flow of EUR -59 million.

Speaker #1: This positive development was driven by the traffic growth in the internationals, as well as increases in airport charges and other prices which compensated the volume effects in Frankfurt.

Speaker #1: The ABDA reached 386 million EUR, and therefore slightly exceeded the previous year's level. While DNA increased significantly due to the Terminal 3 inauguration in Frankfurt and annualizing effects from the Lima terminal opening last year, EBIT decreased to 207 million EUR, or by 19% as we expected.

Speaker #1: Correspondingly, our group result amounted to 85 million EUR, a decline of 32%. Looking at the cash generation after a very solid performance last year, incurring a positive free cash flow in Q2, we now recorded a negative free cash flow of minus 59 million EUR.

Speaker #1: I will go into the details in a minute. At the same time, our net debt to last 12 months ABDA decreased from 6.6 after Q2 last year to 6.0 as of June this year.

[Company Representative] (Fraport): I will go into the details in a minute. At the same time, our net debt to last 12 months EBITDA decreased from 6.6 after Q2 last year to 6.0 as of June this year. On my next slide, you will find the details regarding our free cash flow generation and the net debt development in Q2 2026. First, of all, I would like to take a look at the operational cash flow, which decreased by 38% of EUR 120 million to EUR 193 million. This development was especially driven by working capital changes, the accounting of interest paid, and higher taxes. On my next slide, I will give you further background information on those moving parts. Staying on slide eight and looking at the CapEx numbers, we see a further ramp down of brick-and-mortar CapEx to EUR 244 million in total.

Speaker #1: On my next slide, you will find the details regarding our free cash flow generation and the net debt development in Q2 26. First of all, I would like to take a look at the operational cash flow which decreased by 38% or 120 million EUR to 193 million EUR.

Speaker #1: This development was especially driven by working capital changes, the accounting of interest paid and higher taxes. On my next slide, I will give you further background information on those moving parts.

Speaker #1: Staying on slide 8 and looking at the CapEx numbers, we see a further ramp down of brick and mortar CapEx to 244 million EUR in total.

Speaker #1: In Lima, CapEx was reduced 25 million EUR in Q2, compared to last year, and also T3 CapEx was coming down from 129 million EUR to just 65 million EUR in Q2 26.

[Company Representative] (Fraport): In Lima, CapEx was reduced by some EUR 10 million to EUR 25 million in Q2 compared to last year, and also T3 CapEx was coming down from EUR 129 million to just EUR 65 million in Q2 2026. Dividends in the amount of EUR 13 million were mainly coming from Antalya. As a consequence of the negative free cash flow and the dividend payout of EUR 92 million in May, our group net financial debt increased to just under EUR 8.7 billion in Q2. Still, our leverage ratio remained on the Q1 level, and our gearing ratio improved to 168% compared to last year's Q2. Now, as mentioned before, I would like to explain you the parameters influencing our negative free cash flow in more detail. For this, you find a bridge from Q2 2025 to Q2 2026 on slide number nine.

Speaker #1: Dividends in the amount of 13 million EUR were mainly coming from Antalya. As a consequence of the negative free cash flow and the dividend payout of 92 million EUR in May, our group net financial debt increased to just under 8.7 billion EUR in the second quarter.

Speaker #1: Still, our leverage ratio remained on the Q1 level, and our gearing ratio improved to 168% compared to last year's Q2. Now, and as mentioned before, I would like to explain to you the parameters influencing our negative free cash flow in more detail.

Speaker #1: For this, you find a bridge from Q2 25 to Q2 26 on slide number 9. Starting from the top, you see two positive elements.

[Company Representative] (Fraport): Starting from the top, you see two positive elements, a small positive impact of EUR 2 million from the underlying operational cash flow, so without working capital changes, net interest paid and taxes. More relevant in this regard is a reduction in brick-and-mortar CapEx of EUR 21 million compared to the previous year. Moving on, you'll find the negative impact from higher interest paid in the amount of EUR 10 million and lower interest received of EUR 5 million. In addition, we received EUR 15 million less dividends from Antalya compared to last year's Q2. Now drawing a subtotal, as in our view, this is the underlying and more permanent development, you would end up with a positive free cash flow of around EUR 22 million.

Speaker #1: A small positive impact of 2 million EUR from the underlying operational cash flow. So, without working capital changes. Net interest paid and taxes. More relevant in this regard is a reduction in brick and mortar CapEx of 21 million EUR compared to the previous year.

Speaker #1: Moving on, you find a negative impact from higher interest paid in the amount of 10 million EUR, and lower interest received of 5 million EUR.

Speaker #1: In addition, we received 15 million EUR less dividends from Antalya compared to last year's Q2. Now, drawing a subtotal as in our view, this is the underlying and more permanent development, you would end up with a positive free cash flow of around 22 million EUR.

Speaker #1: Taking one of our more temporary effects into account, you see that we were paying higher taxes due to a subsequent payment in the amount of 18 million EUR coming from taxes in the previous years.

[Company Representative] (Fraport): Taking one of our more temporary effects into account, you see that we were paying higher taxes due to a subsequent payment in the amount of EUR 18 million coming from taxes in the previous years. The biggest influence, however, was coming from working capital changes, which we mainly expect to be compensated in following quarters. The EUR 66 million burden that you see on the slide was predominantly stemming from higher receivables increase in Lima on the one side, and lower trade accounts payable in Frankfurt and Lima on the other side. Due to this explanation, we stick to our full-year free cash flow, which stipulates for a low triple-digit million euro amount. Now, coming back to our well-known repayment profile on slide number 10.

Speaker #1: The biggest influence, however, was coming from working capital changes, which we mainly expect to be compensated in following quarters. The 66 million EUR burden that you see on the slide was predominantly stemming from higher receivables increase in Lima, on the one side, and lower trade accounts payable in Frankfurt and Lima, on the other side.

Speaker #1: Due to this explanation, we stick to our full-year free cash flow which stipulates for low triple-digit million EUR amount. Now, coming back to our well-known repayment profile on slide number 10.

Speaker #1: Starting with the blue box on the right-hand side, you see that our average cost of debt is going up, slightly to 3.5% from 3.3% one year ago, as a consequence of cheap money maturing and refinancing at higher interest rates in line with the debt market development.

[Company Representative] (Fraport): Starting with the blue box on the right-hand side, you see that our average cost of debt is going up slightly to 3.5% from 3.3% one year ago as a consequence of cheap money maturing and refinancing at higher interest rates in line with the debt market development. For this reason, we have now initiated a clear repayment strategy to use about EUR 300 to 400 million per annum over the next few years in order to pay down debt instead of rolling forward. Here, we will make use of our existing liquidity on the one side, while at the same time, we will also make use of parts of our free cash flow generation on the other side.

Speaker #1: For this reason, we have now initiated a clear repayment strategy to use about 300 to 400 million EUR per annum over the next few years, in order to pay down debt instead of rolling forward.

Speaker #1: Here, we will make use of our existing liquidity on the one side, while at the same time we will also make use of parts of our free cash flow generation on the other side.

Speaker #1: Like this in the medium term, we aim to reach a liquidity position of around 2 billion EUR plus unused credit lines, so about 2.5 billion EUR, while we will reduce the high level of gross debt at the same time.

[Company Representative] (Fraport): Like this in the medium term, we aim to reach a liquidity position of around EUR 2 billion plus unused credit lines, so about EUR 2.5 billion, while we will reduce the high level of gross debt at the same time. On my next slide number 11, I would like to move on to our segment reporting, starting with the Q2 numbers in aviation. Looking at the revenue development, we were able to compensate for some of the volume effects in Frankfurt and lower security charges per passenger through higher prices, though that segment revenues were just 2% below Q2 2025. Wage increases and structural effects increased personnel expenses by around 11% in the Q2. Other OpEx was going up slightly by EUR 3 million or 2%, mainly driven by the inauguration of Terminal 3 and the T3 terminal use during the Q2.

Speaker #1: On my next slide, number 11, I would like to move on to our segment reporting starting with the Q2 numbers in aviation. Looking at the revenue development, we were able to compensate for some of the volume effects in Frankfurt, and lower security charges per passenger through higher prices, though that segment revenues were just 2% below Q2 25.

Speaker #1: Wage increases and structural effects increased personnel expenses by around 11% in the second quarter. Other OPEX was going up slightly by 3 million EUR or 2%, mainly driven by the inauguration of Terminal 3 and the 3 terminal use during the second quarter.

Speaker #1: As a consequence of the lower revenue and higher OPEX, EBITDA was calming down by 18 million EUR to 102 million EUR in Q2 26.

[Company Representative] (Fraport): As a consequence of the lower revenue and higher OpEx, EBITDA was coming down by EUR 18 million to EUR 102 million in Q2 2026. A significant increase in D&A can be explained by the Terminal 3 commissioning, which all in all led to an EBIT reduction of EUR 40 million. Based on the year-to-date development and the reduced traffic expectations for Frankfurt, we now expect the EBITDA in the full year 2026 to be in the mid to high single-digit % area below 2025. Moving on to our retail and real estate segment on slide number 12. Revenue growth of 2% to EUR 142 million was primarily driven by parking and real estate based on price adjustments and the indexation of rental contracts. At stable retail revenues per passenger and a decline in passenger numbers, total retail revenues were decreasing by EUR 2 million to EUR 49 million.

Speaker #1: The significant increase in DNA can be explained by the terminal 3 commissioning which, all in all, led to an EBIT reduction of 40 million EUR.

Speaker #1: Based on the year-to-date development and the reduced traffic expectations for Frankfurt, we now expect the EBITDA in the full year 26 to be in the mid to high single-digit percentage area below 25.

Speaker #1: Moving on to our retail and real estate segment on slide number 12. Revenue growth of 2% to 142 million EUR was primarily driven by parking and real estate based on price adjustments, and the indexation of rental contracts.

Speaker #1: At stable retail revenues per passenger, and a decline in passenger numbers total retail revenues were decreasing by 2 million EUR to 49 million EUR.

Speaker #1: All in all, we assess a stable spend per pax development as a positive sign, bearing in mind the lack of high-value customers from the Middle East being fully compensated by a better offer in Terminal 3, which has just been open since late April and fully utilized since mid of June.

[Company Representative] (Fraport): All in all, we assess a stable spend per PAX development as a positive sign, bearing in mind the lack of high-value customers from the Middle East being fully compensated by a better offer in Terminal 3, which has just been opened since late April and fully utilized since mid of June. Total OpEx, on the other side, increased by around 5%, driven by higher wages, which led to a constant EBITDA of EUR 100 million. The segment's EBIT declined by EUR 7 million, in line with the increased D&A for Terminal 3. Looking ahead, we slightly amended our segment outlook, mainly based on the T3 potentials to unfold already this year and a slightly lower OpEx compared to our initial expectations. This means that in 2026, despite the headwinds from traffic volumes and negative passenger mix, we now expect an EBITDA on the level of full year 2025 or slightly above.

Speaker #1: Total OPEX, on the other side, increased by around 5% driven by higher wages which led to a constant EBITDA of 100 million EUR. The segments EBIT declined by 7 million EUR in line with the increased DNA for terminal 3.

[Company Representative] (Fraport): The segment's EBIT declined by EUR 7 million, in line with the increased D&A for Terminal 3. Looking ahead, we slightly amended our segment outlook, mainly based on the T3 potentials to unfold already this year and a slightly lower OpEx compared to our initial expectations. This means that in 2026, despite the headwinds from traffic volumes and negative passenger mix, we now expect an EBITDA on the level of full year 2025 or slightly above.

Speaker #1: Looking ahead, we slightly amended our segment outlook mainly based on the T3 potentials to unfold already this year in the slightly lower OPEX compared to our initial expectations.

Speaker #1: This means that in 26, despite the headwinds from traffic volumes and negative passenger mix, we now expect an EBITDA on the level of full year 25 or slightly above.

Speaker #1: With our full year 25 results, we guided for an EBITDA on the previous year's level. Now, coming to our ground-handling segment on slide number 14.

[Company Representative] (Fraport): With our full year 2025 results, we guided for an EBITDA on the previous year's level. Now, coming to our ground handling segment on slide number 14. First of all, looking at the top-line development, you see that revenue increased by around 4% based on price adjustments despite traffic volumes going down. On the cost side, underlying personnel expenses increased by 10% when adjusting the previous year's number for a EUR -11 million impact in the context of a one-time charge linked with the supplementary pension plan. Besides higher FTE numbers, also wage increases and structural effects influence the cost development. Also, other OpEx in Q2 2025 needs to be adjusted, having been positively impacted by the reversal of a provision in the amount of EUR +17 million.

Speaker #1: First of all, looking at the top-line development, you see that revenue increased by around 4% based on price adjustments, despite traffic volumes going down.

Speaker #1: On the cost side, underlying personnel expenses increased by 10% when adjusting the previous year's number for negative impact of around 11 million EUR in the context of a one-time charge linked to the supplementary pension plan.

Speaker #1: Besides higher FTE numbers, also wage increases and structural effects influenced the cost development. Also, other OPEX in Q2 25 needs to be adjusted, having been positively impacted by the reversal of a provision in the amount of 17 million EUR.

Speaker #1: Looking at the underlying cost base, other OPEX decreased by 5 million EUR or 7% mainly due to the reduction of external staff. Taking all the moving parts remained positive at 4 million EUR, which on an adjusted basis is a decrease of 3 million EUR based on volume reductions.

[Company Representative] (Fraport): Looking at the underlying cost base, other OpEx decreased by EUR 5 million or 7%, mainly due to the reduction of external staff. Taking all the moving parts together, the EBITDA remained at EUR +4 million, which on an adjusted basis is a decrease of EUR 3 million based on volume reductions. Higher D&A for Terminal 3 amounting to EUR 15 million in total led to an EBIT of EUR -11 million. While having adjusted the financial outlook for the other two Frankfurt segments, we stick to our guidance for the ground handling segment, which means that we still expect to reach an EBITDA on about the level of full year 2025. Lastly, let's have a look at our international activities and services to finalize the segment reporting for Q2.

Speaker #1: Higher DNA for terminal 3 amounting to 15 million EUR in total led to an EBIT of minus 11 million EUR. While having adjusted the financial outlook for the other two Frankfurt segments, we stick to our guidance for the ground-handling segment, which means that we still expect to reach an EBITDA on about the level of full year 25.

Speaker #1: Lastly, let's have a look at our international activities and services to finalize a segment reporting for Q2. A solid operational development in combination with supporting elements like charges increase and commercial uplift at our most important airports abroad.

[Company Representative] (Fraport): A solid operational development in combination with supporting elements like charges increase and commercial uplift at our most important airports abroad is reflected in an underlying revenue increase by 10%. The increase in other income can be explained by a one-off reimbursement claim in Lima in the amount of around EUR 9 million, which also supported the segment's EBITDA. Looking at the cost side, personnel expenses increased by 6.5% due to higher wages, not just in the internationals, but also the services segment in Frankfurt. Higher variable concession charges based on higher revenues and operational results led to an increase in other OpEx. Based on a strong top-line growth and the one-off in Lima, EBITDA increased significantly by EUR 30 million to EUR 181 million, which compensated for the weaker than expected development in Frankfurt, leading to a group EBITDA slightly above the previous year's level.

Speaker #1: This reflected in an underlying revenue increase by some 10%. The increase in other income can be explained by a one-off reimbursement claim in Lima in the amount of around 9 million EUR, which also supported the segment's EBITDA.

Speaker #1: Looking at the cost side, 6.5% due to higher wages, not just in the internationals but also the services segment in Frankfurt. Higher variable concession charges based on higher revenues in operational results led to an increase in other OPEX.

Speaker #1: Based on a strong top-line growth and the one-off in Lima EBITDA increased significantly by 30 million EUR to 181 million EUR, which compensated for the weaker-than-expected development in Frankfurt.

Speaker #1: Leading to a group EBITDA slightly above the previous year's level. The new Lima terminal opening annualized in June but higher DNA was still impacted in April and May, despite these negative impact EBIT was growing by 15 million EUR to 106 million EUR.

[Company Representative] (Fraport): The new Lima terminal opening annualized in June, but higher D&A was still impacted in April and May. Despite this negative impact, EBIT was growing by EUR 50 million to EUR 106 million. Taking the development in H1 into consideration and putting on top the positive outlook for the summer season, we adjusted our segment EBITDA target for the full year 2026 to a growth rate in the mid to high single-digit percentage area. Initially, we expected an increase in the mid-single-digit percentage area. Finally, coming to my last slide for today, number 16, with our full year 2026 outlook. As you are all aware, with the publication of our traffic numbers for June, we revised our traffic guidance for Frankfurt from 65 to 66 million passengers to about the level of 2025.

Speaker #1: Taking the development and the first six months into consideration and putting on top the positive outlook for the summer season, we adjusted our segment EBITDA target for the full year 26 to a growth rate in the mid to high single-digit percentage area.

Speaker #1: Initially, we expected an increase in the mid single-digit percentage area. Finally, coming to my last slide for today, number 16, with our full year 26 outlook.

Speaker #1: As you are all aware, with the publication of our traffic numbers for June, we revised our traffic guidance for Frankfurt from 65 to 66 million passengers to about the level of 2,025.

Speaker #1: Based on this and the less dynamic traffic momentum, mainly in Antalya, we amended our guidance for our group passenger numbers to grow over 25 from previously around 188 to 195 million passengers.

[Company Representative] (Fraport): Based on this and the less dynamic traffic momentum, mainly in Antalya, we amended our guidance for our group passenger numbers to grow over 2025 from previously around 188 to 195 million passengers. Despite the changes to traffic volumes, we still expect our EBITDA to increase compared to 2025 levels and our group result to decrease to EUR 300 million to 400 million, based on accounting effects following the terminal openings in Lima and Frankfurt. We also stick to the target to improve our leverage ratio compared to last year's 5.7x net debt to EBITDA. Having said this, ladies and gentlemen, I'd like to thank you for your attention and look forward to speak to you later today during our Q&A session.

Speaker #1: Despite the changes to traffic volumes, we still expect our EBITDA to increase compared to 25 levels and our group result to decrease to 300 to 400 million EUR.

Speaker #1: Based on accounting effects following the terminal openings in Lima and Frankfurt. We also stick to the target to improve our leverage ratio compared to last year's 5.7 times net debt to EBITDA.

Speaker #1: Having said this, ladies and gentlemen, I'd like to thank you for your attention and look forward to speak to you later today during our Q&A session.

Q2 2026 Fraport Frankfurt Airport Services Worldwide AG Earnings Call - Pre-Recorded

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