Fraport Interim Release Q1 2021
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Fraport Interim Release Q1 2021 May 11, 2021 Overview by the Executive Board Impact of the Coronavirus Pandemic on the Fraport Group The Fraport Group’s operating performance continued to be severely affected by the impact of the coronavirus pandemic in the first quarter of 2021. The traffic development at the Group airports has been significantly influenced by the infection rates in the respective regions. Compared to the full year 2020, the first quarter of 2020 was only slightly affected by the effects of the initial travel and contact restrictions as a result of the coronavirus pandemic, which only began in March. As a result, with the exception of Xi’an in China, all Group airports recorded clear or significant declines in traffic compared to the same period last year. This led to a noticeable decline in revenue and, as a result, a significant drop in EBITDA and a massive decline in earnings in the Fraport Group. Cargo traffic in Frankfurt, on the other hand, continued its growth trend despite the ongoing shortage of belly capacity on passen- ger aircraft; not only did it increase clearly compared to the same period in the previous year but even exceeded the volume from the first quarter of 2019. The continuation of short-time work, reduced working hours, the initial measures from the collective restructuring agreement, the closure of landside and airside operating areas, and a strict cost management led to a reduction in overall operating expenses at the Frankfurt site by around 28% in the first quarter of 2021 compared to the previous year. At the international Group companies, savings in operating expenses in the amount of 35% were achieved in the reporting period. If not already successfully concluded, the negotiations started in 2020 in Frankfurt and at the international sites to compensate for the financial losses in connection with the coronavirus pandemic will be continued. The objective is to temporarily reduce or defer concession charges or to request additional government aid. Due to the ongoing coronavirus pandemic, discussions are already underway at individual sites regarding further compensation. In the first quarter of 2021, significant progress was made in implementing the planned headcount reduction of around 4,000 positions in Frankfurt. As at March 31, 2021, the Fraport Group had around 3,000 fewer employees at its Frankfurt site compared to December 31, 2019. Of these, around 340 employees had already left the company by the end of the first quarter of 2021 as part of the volunteer program under the strategic initiative “Zukunft FRA – Relaunch 50”. After the reporting date for the first quarter of 2021, an additional 850 employees of the Group companies in Frankfurt have left the company on April 1, 2021. Along with the headcount reductions that have already taken place, mainly due to the expiration of temporary contracts and natural attrition as well as the implementation of additional personnel management measures, a significant contribution will be made to sustainably reducing the company’s costs and preparing Fraport to face the changing market environment in the future. In an effort to further expand the Group’s liquidity and create additional financial flexibility, further financing measures were com- pleted in the first quarter of 2021. As part of these measures, Fraport AG issued a corporate bond with two tranches and a total volume of €1.15 billion. In total, the Fraport Group raised around €1.9 billion in financing in the first three months, taking into account short-term debt financing measures. Note on quarterly figures The quarterly figures concerning the asset, financial, and earnings position have been prepared in accordance with the Interna- tional Financial Reporting Standards (IFRS) as applicable in the EU. The interim release does not include complete interim financial statements in accordance with International Accounting Standard (IAS) 34. The interim release was not reviewed or audited by an independent auditor. Fraport Interim Release Q1 2021 2 Overview of Business Development The continued negative traffic development in Frankfurt and at the international Group airports led to a noticeable decline in Group revenue. In the first quarter of 2021, Group revenue amounted to €385.0 million (–41.8%). An agreement with the German Federal Police on the financial compensation of aviation security services already provided in recent years had a positive impact on revenue of €57.8 million. Adjusted for revenue in connection with the capacitive capital expenditure based on the application of IFRIC 12, Group revenue decreased by 41.9% to €344.7 million. Operating expenses (cost of materials and personnel expenses as well as other operating expenses) also decreased clearly (–31.7%), although not to the same extent as Group revenue. Adjusted for IFRIC 12, operating expenses decreased by 30.4%. Group EBITDA reached a value of €40.2 million (Q1 2020: €129.1 million). The financial result of –€45.8 million (Q1 2020: –€59.9 million) and income tax relief amounting to €38.5 million (Q1 2020: €11.9 million) led to a Group result of –€77.5 million, which was clearly below the previous year’s level with a decrease of €41.8 million. As expected, the noticeable decline in operating cash flow due to the negative business development and the payment of sever- ance payments in connection with the "Future FRA - Relaunch 50" program, as well as the ongoing capital expenditure activities, in particular at the Frankfurt site, resulted in a clearly negative free cash flow of –€495.0 million. Net financial debt increased by €492.7 million to €6,026.2 million. Following the end of the first quarter, the Executive Board maintains its overall forecasts for the fiscal year 2021 (see the “Business outlook” chapter). Due to the severe decline in traffic volumes, the Executive Board describes the overall operational and financial development in the reporting period as negative. Key Figures in € million Q1 2021 Q1 2020 Change Change in % Revenue 385.0 661.1 – 276.1 – 41.8 Revenue adjusted for IFRIC 12 344.7 593.2 – 248.5 – 41.9 EBITDA 40.2 129.1 – 88.9 – 68.9 EBIT – 70.2 12.3 – 82.5 – EBT – 116.0 –47.6 – 68.4 – Group result – 77.5 –35.7 – 41.8 – Earnings per share (basic) (€) – 0.70 –0.31 – 0.39 – Operating cash flow – 214.3 92.1 – 306.4 – Free cash flow – 495.0 –195.7 – 299.3 – Number of employees as of March 31 19,170 22,274 – 3,104 – 13.9 Average number of employees 19,349 22,324 – 2,975 – 13.3 in € million March 31, 2021 December 31, 2020 Change Change in % Shareholders’ equity 3,689.7 3,758.7 – 69.0 – 1.8 Shareholders’ equity ratio (%) 22.8 25.7 –2.9 PP – Liquidity 3,478.0 2,213.7 +1,264.3 +57.1 Net financial debt 6,026.2 5,533.5 +492.7 +8.9 Gearing ratio (%) 169.3 152.9 +16.4 PP – Total assets 15,586.3 14,081.2 +1,505.1 +10.7 Fraport Interim Release Q1 2021 3 Operating Performance Traffic development at the Group sites Share in % Passengers1) Cargo (air freight + air mail in m. t.) Movements Q1 2021 Change in %2) Q1 2021 Change in %2) Q1 2021 Change in %2) Frankfurt 100 2,489,763 – 77.6 555,640 +21.4 37,994 – 60.0 Ljubljana 100 18,364 – 90.4 2,614 +11.6 2,876 – 34.8 Fortaleza 100 822,903 – 49.8 7,994 – 29.4 9,187 – 33.8 Porto Alegre 100 886,539 – 52.4 7,609 +3.3 10,285 – 44.4 Lima 80.01 1,615,784 – 67.9 51,358 – 8.5 19,560 – 53.1 Fraport Greece 73.4 320,421 – 78.8 1,320 – 14.0 9,104 – 48.0 Twin Star 60 60,593 – 69.6 1,028 – 5.3 976 – 49.7 Burgas 60 3,814 – 85.2 1,027 – 3.2 212 – 32.3 Varna 60 56,779 – 67.2 1 – 95.5 764 – 53.1 Antalya 51/503) 1,141,750 – 51.0 n.a n.a 8,782 – 48.9 St. Petersburg 25 2,833,566 – 18.3 n.a n.a 25,540 – 24.8 Xi’an 24.5 7,412,984 +40.7 86,118 +28.1 64,799 +36.1 1) Commercial traffic only, in + out + transit. 2) As a result of late submissions, there may be changes to the figures reported for the previous year. 3) Share of voting rights: 51%, dividend share: 50%. In the first quarter of 2021, the number of passengers in Frankfurt was approximately 2.5 million passengers. Compared to the previous year, this corresponded to a severe decrease of 77.6%. In March of the previous year, passenger numbers had already declined noticeably due to the beginning of the coronavirus pandemic, so that the current decline in traffic compared to the first quarter of 2019 was even -83.2%. Given the continued global travel restrictions, there were still no signs this trend would reverse in the first quarter of 2021. Nevertheless, Frankfurt performed better on average compared to all German airports, which is pri- marily due to the combining of domestic and international traffic from Germany at the Frankfurt site since the end of last year. Cargo traffic at Frankfurt Airport developed very positively in the first quarter of 2021. At 555,640 metric tons, cargo traffic rec- orded an increase of 21.4% compared to the previous year and 7.1% compared to 2019. During the reporting period, the international Group airports recorded traffic declines of between around 50% and 90%.