1998 annual report Schiphol Group. 981230 1998 annual report Schiphol Group . Table of contents. 1998 annual report Schiphol Group 4 Profile of Schiphol Group 7 Report of the Supervisory Board 9 Composition of the Supervisory Board, the Board of Management and the Works Council 10 Key figures 12 Historical summary 13 Main organisational structure Directors’ report 14 Introduction 18 Financial developments 22 Market and hub developments 30 International activities 34 Activities in The Netherlands 36 Our relation with the surroundings 41 Personnel developments Financial statements 46 Consolidated accounts 50 Principles of consolidation, valuation and determination of result 54 Notes to the consolidated balance sheet 61 Notes to the consolidated profit and loss account 64 Corporate accounts 66 Notes to the corporate accounts 71 Other information 74 Appendices 3 Board of Management of Schiphol Group: (from right to left) Gerlach Cerfontaine, Pieter Verboom and Ruud Uijlenhoet. Profile of Schipholpp Group . 8:15 “Schiphol Group” new overall name Mission Schiphol Group aims to be a leading, Up until now, NV Luchthaven Schiphol has international airport enterprise. operated under a single business name: Amsterdam Airport Schiphol. This public limited Strategy company has now developed into a collection Schiphol Group’s strategy can be outlined of companies with a diversity of activities, both as follows: nationally and internationally. The new, overall • To further strengthen Schiphol Group’s business name “Schiphol Group” will therefore competitive position as an European ‘mainport’, be brought into use for the group and all its by increasing the volume of traffic, increasing participating interests. Amsterdam Airport quality, and extending the intermodal transport Schiphol will be used exclusively as the name for network – both nationally and internationally – . 1998 annual report Schiphol Group the company that operates the Schiphol location. within the context of sustained social The use of “Schiphol” in the group name is development. a conscious decision. The Schiphol “brand” ranks • To play an active role in the construction of a among the top ten most trusted brands in the network of airports, within which the Airport- Netherlands, and a sound international reputation City Concept can be developed and expanded as manager of quality airports has been developed upon, through a process of acquisition, under this name. This strong image will be built participation, and other forms of alliance. on further, while the name also provides the room • To build on know-how and service in retail sales, required for denoting the group’s current wider real estate, and information and communication field of activities. technology, in the framework of the AirportCity- Schiphol Group stands for a collection of concept, by developing new products and financially strong enterprises with a common services for new and existing customers. mission, strategy and positioning. Schiphol Group • To further develop and exploit the already- is involved in the development and operation of strong Schiphol brand and, in so doing, to activities and services which together constitute strengthen Schiphol Group’s reputation and the “AirportCity” concept. That goes beyond leading commercial position, nationally and the development of an efficient transport hub. internationally. The “AirportCity” offers its visitors – passengers, • To create a stimulating working environment so employees, meeters and greeters – but also the that Schiphol Group can attract, develop, and Schiphol based companies – airlines, distribution hold onto the best professionals available and companies and logistic and business services thereby maintain its leading role in the industry. providers – services 24 hours a day in the field • To generate value for the investors of capital in of shops, hotels and catering, information and order to acquire an ongoing commitment from communication, corporate business and the capital market and command the necessary conference facilities, and recreation and financial power for international expansion. relaxation. In this way, the group increases the provision of service to its customers, while more value is simultaneously created for shareholders. Schiphol Group is not only strong in the development, but also and particularly in the integration of all these activities into a coherent and durable entity that is closely knit with its geographical surroundings. This knowledge is unique, and is also internationally in demand. Schiphol Group is therefore increasingly marketing the AirportCity concept internationally. 5 Priorities for 1999-2002 period Ownership The following priorities apply for the period The company is owned by the Dutch State until 2002: (75.8%), the City of Amsterdam (21.8%) and the • Capacity management: optimization of City of Rotterdam (2.4%). Borrowed capital has Amsterdam Schiphol and conducting studies been furnished by institutional investors in the into the potential offered by an artificial island form of a bond loan in the sum of NLG 400 in the North Sea and by a complete redesign of million. External rating agencies have rated the Amsterdam Schiphol to increase traffic volume organisation AAA (Standard & Poor’s) and Aa1 for the Dutch aviation industry, to increase the (Moody’s). contribution to the national economy and to facilitate sustained development. • Operational excellence: the aim is that 1998 annual report Schiphol Group Amsterdam Schiphol retains its top position in Europe in terms of services to airlines, passengers and cargo carriers. • The development of Schiphol Group as an enterprise: relinquishing of governmental control and privatization. • The further development of retail sales, real estate and information and communication technology (ICT) as building blocks for the AirportCity concept, both nationally and internationally. • The exploration of opportunities for strategic alliances in order to realize the desired strategy. 6 Report of the Supervisory Board . 1998 annual report Schiphol Group The Supervisory Board met on seven occasions In order to flesh out the company’s ambition in the reporting year. Of these meetings, five were to become a leading international airport on the regular meeting schedule, whereas two operator, the regular meetings dealt with the were additional meetings. The additional meetings situation at the existing foreign participations. were convened in view of possible participations Discussion topics included transport developments in South Africa (March 1998) and Mexico at these airports and the effects of the crisis in (November 1998). The Financial Commission Asia. The Board also discussed a number of met twice. new opportunities for foreign participations. The company’s internationally oriented strategies During its meetings, the Supervisory Board played a key role in these discussions as well as devoted close attention to corporate strategy and the risk-analysis and the financing aspects thereof. operational risks. Corporate strategy was defined The Board also examined the possibilities by the discussion about the future airport infra- of a strategic alliance in the field of information structure in the Netherlands. The development technology with a view to the company’s of Amsterdam Schiphol, whether at the current continued strategic development. location or not, was an important topic of dis- In addition to dealing with the topics referred cussion during the meetings of the Supervisory to above, the Supervisory Board discussed a Board throughout the reporting year. The Board’s number of recurring topics, such as financial discussions also dealt with short-term policies, results, developments in traffic and transport, and including the relationship with the environment investment decisions, within the framework of, for and the various legal proceedings about the example, the Masterplan. The Board also took preservation of noise zoning in which the note of the resolution to change the name of the company was involved in the course of the organisation to ‘Schiphol Group’. In addition, the reporting year. Supervisory Board looked at the millennium issue In the context of short and medium-term and the consequences of the end to European policies, topics discussed by the Board included duty-free shopping, and the corrective measures increases to the available airspace capacity for civil to be taken in relation to these issues. aviation as well as the construction of the fifth Furthermore, the importance of privatization for runway, which can be qualified as belonging to the company’s further development was discussed the Optimization project. In the scope of long- in detail by the Board. term policies, the Board discussed various options, such as building an island in the North Sea and During a meeting not attended by the Board redesigning the current Schiphol location. of Management, the Supervisory Board discussed In this respect, the Board engaged in in-depth its own performance, as well as the composition discussions of the strategy to be pursued and the of the Board of Management and the Supervisory consequences for the current location. Board. The Supervisory Board also discussed the 7 remuneration received by the members of the The Board exchanged thoughts with the Board of Management and the Supervisory Board. external auditor PricewaterhouseCoopers about The remuneration commission met once in the the financial statements, financial reporting and reporting year. the