ANNUAL REPORT 2019 ANNUAL REPORT 2019 Gruppo

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ANNUAL REPORT 2019 ANNUAL REPORT 2019 Gruppo gruppo ANNUAL REPORT 2019 REPORT ANNUAL ANNUAL REPORT 2019 gruppo gruppo Aeroporti di Roma S.p.A. Registered office: Via Pier Paolo Racchetti 1 00054 Fiumicino (Rome) Tax Code and Rome Companies’Register no.: 13032990155 VAT Number 06572251004 Fully paid-in share capital: Euro 62,224,743.00 “A company managed and coordinated by Atlantia S.p.A.” Ph. +39 06 65951 Fax +39 06 65953646 [email protected] www.adr.it gruppo ANNUAL REPORT 2019 Annual report 2019 CONTENTS Contents 1. MANAGEMENT REPORT ON OPERATIONS page 3 2. CONSOLIDATED FINANCIAL STATEMENTS as of December 31, 2019 page 111 3. SEPARATE FINANCIAL STATEMENTS as of December 31, 2019 page 229 4. RESOLUTIONS OF THE ORDINARY SHAREHOLDERS’ MEETING of April 7, 2020 page 345 1 1. MANAGEMENT REPORT ON OPERATIONSbre 2019 Management report on operations MESSAGE TO THE STAKEHOLDER 7 1. KEY MESSAGES 11 2. ABOUT US 19 2.1. Business model and corporate structure 20 2.1.1. Planning Agreement and the regulatory model 22 2.2. Summarized economic and financial situation 24 3. OUR RESULTS 27 3.1. Connectivity 28 3.1.1. Traffic and network evolution 28 3.1.2. Airport mobility 34 3.2. Retail business and Real Estate 36 3.2.1. Retail business 36 3.2.2. Real Estate 37 3.3. Quality 38 3.4. Security & Safety 45 3.4.1. Security 45 3.4.2. Safety 45 3.5. Sustainability and the environment 48 3.5.1. Environmental impacts 48 3.5.2. The people 56 3.6. Our second airport: Ciampino 66 3.7. Economic and financial situation 68 3.7.1. Consolidated economic performance 68 3.7.2. Consolidated financial performance 72 3.7.3. ADR Group investments 78 3.7.4. Economic and financial performance of ADR S.p.A. 79 3.7.5. Alternative performance indicators 84 4 Annual report 2019 CONTENTS/MANagEMENT REPORT ON OPEraTIONS 4. GOVERNANCE 89 4.1. Governance System 90 4.2. Risk factors 91 4.2.1. Operational and strategic risks 91 4.2.2. Financial risks 94 4.3. Other information 95 4.3.1. Updates and changes to the reference regulatory framework 95 5. SUBSEQUENT EVENTS 99 6. BUSINESS OUTLOOK 106 7. AGENDA 107 8. PROPOSALS TO THE ORDINARY SHAREHOLDERS’ MEETING 108 5 Annual report 2019 MANagEMENT REPORT ON OPEraTIONS/message to THE stakeholder Message to the stakeholders In 2019 the number of passengers using Fiumicino and Ciampino airports reached almost 50 million, up 1.2% on the previous year. This set a new absolute traffic record in the history of the Roman airport system. But what makes us most proud is that we have achieved these growth objectives without compromi- sing the level of service quality, which we continue to take care of and constantly improve in order to guarantee the highest levels of customer satisfaction, which remains and will always remain one of the priority objectives of our management. As a confirmation of this,for the third consecutive year Fiumicino airport has been reported by the Airports Council International (ACI) as the best European airport for service qua- lity (ASQ-Airport Service Quality Award) among those managing traffic exceeding 40 million passengers, and we closed the fourth quarter of 2019 as the best Western airport (Euro- pe+America) among airports with more than 25 million passengers and for the second conse- cutive year we are the second airport in the ranking with a score of 4.47 out of 5.00. Such recognitions are the result of the continuous effort made by the entire Group’s organiza- tion, which has contributed to placing increasing innovative priorities among our strategic prio- rities based on improving service quality, but also on the continuous search for solutions aimed at ensuring a sustainable infrastructural development of the airport system that is linked to a productive and collaborative relationship with the local communities and territory. Improvement of energy efficiency standards, adoption of appropriate measures aimed at reducing noise emissions and application of the best waste recycling technologies are now essential factors to support the competitiveness and reputation of our company over time. All of this complements, and does not clash with, the traditional profitability targets. The current regulated tariff system also requi- res targets to be set in order to improve specific environmental parameters agreed with ENAC, whose achievement generates rewarding effects on the tariffs applied in the following period and thus on revenues. Special attention is paid to the construction of new infrastructure works, for which ADR duly consi- ders, already at the planning stage, the latest energy efficiency and waste disposal criteria. Thanks to this approach, we were awarded the “Leed Gold” environmental certification for the new General Aviation terminal built in Ciampino airport. Among the many investments with a direct environmental impact, we would like to mention the commissioning of the plant for the composting of organic waste produced in the terminals, which when fully operational will reduce the amount of waste produced at the airport by up to 1,000 tons, as well as the installation of over 100,000 LED lamps in the buildings. 7 Annual report 2019 MANagEMENT REPORT ON OPEraTIONS/message to THE stakeholder In addition, an initial experiment has also been launched for the use of electric buses for the move- ment of passengers and airport personnel within the airport. All of these initiatives are part of a pro- cess that sees us committed to reaching the CO2 emissions target of 1kg per passenger/year by 2030. Despite the difficulties that continued to characterize Italy’s economy during 2019 and the ongoing uncertainties on the future of the main national carrier, aeronautical revenues grew by 1.0% thanks to a targeted business strategy focused on a worldwide enhancement of the “Rome” destination as an essential stage of international longhaul tourism. Special attention was paid not only to traffic flows from traditional destinations, such as North America, but also and above all to those originating from new geographical areas characterized by a growing propensity to travel, a situation the company has invested heavily in during 2019. In fact, in 2019, 30 new connections were opened, 12 of which to new international destinations. These include the opening of 3 new Chinese destinations, one of which is served by a new company at Fiumicino (Sichuan), which testifies to the fact that Fiumicino airport is now among those with the highest number of direct connections to this important country. The investment plan continues and, in particular, the construction of the new “East” terminal system, which will be completed as of 2020. In addition to contributing to increasing airport capacity, this will provide a further boost to the quality standards of our airport infrastructure. The new infrastructure will consist of a new terminal (new boarding area “A”) with 30 new boarding gates, 13 of which will be served by loading bridges, and an extension of the current Terminal 1 for a total area of approximately 70 thousand square meters, 18 thousand of which will be used for commercial areas. Both structures are designed and built with the aim of obtaining certification according to “Leed Gold” standards. Also in 2019 a profitable relationship with the granting administration (ENAC) continued, which focu- ses in particular on starting preliminary analyses aimed at identifying alternative solutions to the me- diumlong term development plan approved in 2012 and characterized by an expansion of the airport towards the areas to the north of the current perimeter. This project is no longer feasible these days due to the lack of approval by the Ministry of the Environment. For this reason, the technical structures are now engaged in the development of an alternative project that is less demanding in terms of the use of green areas outside the current perimeter and that provides for the creation of infrastructure that can be modulated according to the actual future traffic trend. A dialogue with the new tariff authority (ART) was initiated during the year with the aim of ensuring, also under the new regime, the continuity of tariff principles and criteria applied on the basis of the current Planning Agreement signed with ENAC in 2012 and approved by law. ADR’s objective in its dia- logue with the Authority is not to compromise the sustainability of the development plan from both a financial and operational point of view. The tariff update in force in 2019 is also the result of a consultation process that ADR has adopted with the main aeronautical customers. This process was concluded at the end of 2018 with airport fees and tariffs being set and applied as of March 2019, which are cheaper than the previous year. Such result is even more significant as it took place in a context characterized by a growing commitment of 8 Annual report 2019 MANagEMENT REPORT ON OPEraTIONS/message to THE stakeholder resources that the company allocated to investments and to improving the quality of services provi- ded to passengers and airlines. In conclusion, we cannot fail to mention the event linked to the health emergency of the first few mon- ths of 2020 and that forces us to face a new scenario whose implications are not fully predictable yet. The effects of the COVID-19 epidemic (the so-called “Coronavirus”) and the impact that its spread may have on international air traffic and, more generally, on the international economy are still diffi- cult to fully assess and will depend on the epidemiological effects that cannot be predicted yet. In any case, in agreement with the relevant authorities, the company is working to ensure the highest levels of control over passengers and staff employed at airports, with the aim of guaranteeing a con- tainment of the spread of the virus and thus encouraging a desirable rapid return to normality.
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