Consolidated Non-Financial Statement 2017 Pursuant to Italian Legislative Decree 254/2016

Contents

2 Letter to stakeholders

4 Methodological note

7 Who we are and what we do

20 Market overview

39 Our Governance

48 Integrating sustainability into the business

73 Our socio-economic impact

88 Management and development of infrastructure

113 Value generated by the Aviation Business

134 Value generated by the Non-Aviation Business

149 Management efficiency and productivity

174 Future objectives

181 Other Sustainability performances

200 Analysis of the Boundary of the material topics and reconciliation with GRI Standards

203 GRI Content Index

214 Independent Auditors’ Report

Consolidated Non-Financial Statement 2017 • 1 Letter to Stakeholders

Our company enjoyed an excel- above the low of 2009. (while posting a 1.4% decline in lent year in 2017, in terms of both passengers tied to the transfer traffic volumes - up by 9.0% for The process took a decade to com- of several Continental routes to passengers and by 7.1% for cargo plete and was not an easy one. Malpensa). It remains essential to (compared to the Italian national business traffic and continues to averages of +6.4% and +9.2% re- It was supported by efforts to rank among the best-connected spectively) - and of operating re- promote Milan from 2015 and city airports in Europe located in a sults, with an increase in EBITDA was also made possible by SEA's major metropolitan center. from Euro 239.8 million to Euro commitment to revamping its in- 264.0 million (net of non-recurring frastructure - beginning with the SEA is committed to building on revenues and costs). radical restyling of Terminal 1 - by its current success in pursuit of boosting operating efficiency and sustainable, high-quality develop- The results for the year are also by cultivating relationships with ment. significant as marking a fundamen- new carriers and routes. tal shift, the effects of which will The aspects of sustainability con- persist for some time: the end of Today Malpensa is well positioned sidered extend to all of the crucial a long period of difficulty that be- to lay claim to being one of Eu- dimensions of an airport's exist- gan in 2008 with the de-hubbing rope's foremost “point-to-point” ence, starting with the fundamen- by Alitalia and the dawn of a new intercontinental airports. Its com- tal value of security. era in which the Milan airport sys- petitive strengths include the tem and its management company number of airlines serving it, the The company remains committed can legitimately aim to compete lower level of concentration of to refining its methods of measur- with Europe's foremost airports, these airlines than at most coming the actual and perceived quali- in keeping with the renewed am- peting airports (the main airline ty of our infrastructure and the re- bitions of the local community and carries approximately one-third of lated services, while continuing to its metropolitan center. its passengers), its extensive cata- improve them. In 2017 progress logue of routes and destinations was made on almost all indicators, Malpensa began a new chapter and its significant potential for but there is always room for fur- in its history in 2017, ending its additional development before ther improvement. traditional dualistic relationship reaching the levels of saturation with Linate and returning to its typical of many other large and Collaborative, concerted and mo- originally intended role as a cru- mid-size European airports, which tivated shareholders are also es- cial component of northern Italy's not infrequently prove highly con- sential to sustainable growth. The infrastructure serving both short straining for growth. company has set itself challenging and long-haul passengers and car- organizational goals, based on in- go routes. Malpensa reported for Malpensa is Europe's fifth-largest vesting in individual responsibil- 2017 passenger number growth cargo airport and in 2017 it ac- ity in view of trust, proactive col- of 14.1%, a gain of more than counted for 52% of the total vol- laboration and a result-oriented twice the Italian national average ume of goods handled by Italian approach, which are expected to and outperforming the European airports. yield measurable results in terms average by 7.9 percentage points, of the quality of the overall per- finally approaching the previous As Malpensa grows, Linate is formance and the sustainability of high reached in 2007 and 27% consolidating its traffic volumes results over the medium term.

Consolidated Non-Financial Statement 2017 • 2 METHODOLOGICAL NOTE

Within the framework of con- The topics discussed in this doc- stant, transparent dialogue with ument have been classified by trade unions, SEA remains com- stakeholder (environment, permitted to training (dedicating sonnel, passengers, suppliers, over 57,000 hours, equivalent to etc.), but have been rearranged training for 33 people every day), into four sections, each of which improving working conditions and represents a pillar of our business safeguarding company welfare. plan (management and devel- The many facets of this commit- opment of infrastructure, traf- ment include measures aimed at fic growth, development of the meeting old and new needs and non-aviation business, and effi- initiatives that seek to set a better ciency and productivity). It is our work-life balance. view that environmental, social and stakeholder relations issues As part of this same process, dia- are not an extraneous addition to logue with local communities con- the business process but the nat- tinues, in constant pursuit of the ural next step in this process, in steps taken thus far to lend sub- best possible balance between which to invest to facilitate - or at stance and concreteness to our opportunities for airport growth least to avoid undermining or de- commitment to assume responsi- - a valuable means of connecting laying - pursuit of the goals which bility for the consequences of our communities and providing em- we have set for ourselves. actions - emphatically includes the ployment - and strict compliance perspectives of our stakeholders. with environmental restrictions. Our policies, which describe how we approach our stakeholders' in- In conclusion, the efforts made by The process of drafting and ap- terests and the prerogatives they SEA - even in difficult years - to pro- proving the Malpensa Master Plan express in their relations with us, tect and develop a harmonious air- is based on a transparent, partici- are not mere impromptu reflec- port system with the capacity for patory process that is destined to tions, but rather organic compo- sustainable growth, capable of liv- yield positive results. nents of a governance model in ing up to the ambitious goals and support of our sustainability strat- potential of its community, bore The quality of growth is particular- egy - described in a specific sec- fruit in 2017 - in terms of both op- ly focused on, as required by law, in tion of this document - designed erating results and traffic growth. this Non-Financial Statement dedi- to ensure consistency and depth cated to social, environmental and for our fundamental vision. Now the challenge is to ensure governance sustainability, along- excellence, to promote the devel- side the Financial Statements. We have provided a thorough ac- opment of the Milan metropolitan count of our airports' competitive area and to provide Lombardy with SEA regards non-financial report- performance, in which we seek to increasingly efficient, accessible ing as a challenge with deep roots combine a representation of the and well-connected airports, to in its business, in view of the need financial side of our business with help meet the challenges posed by seen in recent years for an increas- a discussion of the actual quality globalization and boost the region's ingly clear and measurable ac- of the aviation and non-aviation attractiveness and hospitality. count of that intensive process of services provided, from the per- exchanges of value with our stake- spective of their users. SEA has prepared itself for this holders that serves as a founda- challenge above all through the tion for our resilience in the face The gradual refinement of methods dedication of its workers, who of adversity, as well as for our as- of estimating the direct and indi- deserve the company's gratitude pirations to excellence. rect socio-economic effects of our for the results that have been airports' operations for the benefit achieved thus far and that will cer- The strategic key to interpreting of the local community allows us to tainly continue into the future. this document has been clear- provide an extensive, effective -ac ly provided in the form of the count of our overall impact. Pietro Modiano arrangement of the topics dis- Chairperson cussed. Our performance in environmental and social terms - reflecting the

Consolidated Non-Financial Statement 2017 • 3 Methodological note METHODOLOGICAL NOTE

Methodological note

The SEA Group (hereinafter also In contrast with previous years, out in Art. 3 of Legislative Decree the “Group”) has been publishing the 2017 Sustainability Report 254/2016. an annual Sustainability Report was drafted according to the GRI according to the GRI Guidelines Sustainability Reporting Stand- The non-financial disclosures con- since 2010. ards (2016) and the Airport Op- tained in the NFS reflect the prin- erators Sector Disclosures (2014), ciple of materiality or relevance, a Starting this year, the 2017 CSR both published by the Global Re- key characteristic of the GRI Stand- Report (hereinafter the “Sustain- porting Initiative (GRI), according ards that is also defined in the ref- ability Report”) represents the to the core option. The GRI Con- erence legislation: the materiality Group's first Consolidated Non-Fi- tent Index has been included at analysis process is described in the nancial Statement (“NFS”), con- the end of the document, with the section “Prioritizing our commit- cerning the Group's performance aim of providing a full account of ments: the materiality matrix”. during the year ended December the coverage of the GRI indicators 31, 2017, in accordance with Leg- associated with each topic identi- This document thus contains a islative Decree 254/2016. Pursu- fied as material. description of the major policies ant to Art. 5 of this Decree, it takes applied by the undertaking, the the form of a separate report that The document has been prepared management models and results includes specific language indicat- as necessary to ensure an under- achieved by the Group in 2017 re- ing that it constitutes an NFS as standing of business activity, its lating to the topics expressly cited per the regulatory requirements. performance, results and impact in Legislative Decree 254/2016 on the topics deemed material set (environmental, social, personnel-related, respect for human rights and the fight against -cor ruption), as well as the main risks identified relating to the above topics and management methods.

It should be noted that the human rights topic was not found to be highly material in the materiality analysis process. It should also be emphasized that SEA has established procedural and organizational safeguards for managing and monitoring matters relating to applicable legislation. Furthermore, the Group is assessing whether to integrate aspects relating to this topic in its supplier qualification process. As part of such efforts, the Group undertakes to include in its supplier register specific information and

Consolidated Non-Financial Statement 2017 • 5 METHODOLOGICAL NOTE

assessments regarding manage- This document was submitted ment methods, on aspects such as for review and assessment by equality of remuneration, non-dis- the Control and Risks Committee crimination, freedom of associa- on March 22, 2018 and then ap- tion and collective bargaining and proved by the Board of Directors child labor. on March 29, 2018.

It also bears noting that the Com- This document is also subject to pany regards the topic of airport limited examination ("limited as- safety and security as a prerequi- surance engagement" according site for all of the Group's activities. to the criteria indicated by the The topic in question has not been ISAE 3000 Revised standard) by included in the Materiality Matrix Deloitte & Touche S.p.A. which, at because it has been excluded from the end of the work performed, is- the process of evaluation and dia- sued a specific report on the com- logue regarding the importance of pliance of information provided the various issues undertaken by in the non-financial consolidated the management and stakeholders. report drawn up by the SEA Group as per Legislative Decree No. The development and implemen- 254/2016. tation of this activity may reason- ably require a period of approxi- The document also uses the fol- mately 12 to 18 months. lowing terms:

The Boundary of qualitative infor- ◼◼ SEA for SEA SpA; mation and quantitative data re- ◼◼ SEA Energia for SEA Energia garding social and environmental SpA; topics includes companies consol- ◼◼ SEA Prime for SEA Prime SpA. idated line-by-line in the Group's Consolidated Financial Statements. The Group's Corporate Social Re- Any minor limitations of the above sponsibility Function may be con- Boundary are appropriately dis- tacted for information regarding closed within the document. the Sustainability Report: Sebas- tiano Renna - Corporate Social The financial reporting Boundary is Responsibility Manager e-mail: se- the same as for the Group's1 2017 [email protected]. Consolidated Financial Statements. This document is also available On February 22, 2017, the Board from the SEA Group's website, of Directors of SEA SpA resolved www.seamilano.eu, in the section to authorize the dissolution and “Sustainability”. liquidation of the Malpensa Con- struction Consortium.

In order to permit an assessment of performance over time, a comparison with the figures from the years 2016 and 2015 has been included. In addition, in the interest of providing an accurate account of performance and ensuring the reliability of the data, the use of 1 For the list of Group companies consolidat- estimates has been kept to a mined line-by-line, reference should be made to Section 3 - Consolidation Scope and methods imum and appropriately disclosed - of the Explanatory Notes to the SEA Group where applicable. Consolidated Financial Statements.

Consolidated Non-Financial Statement 2017 • 6 Who we are and what we do WHO WE ARE AND WHAT WE DO

Who we are and what we do

The SEA (Società Esercizi Aer- SEA and the Group companies man- The services provided by SEA are oportuali) Group manages the age and develop the airports of guaranteed by the management Milan airport system based on a Milan Malpensa and Milan Linate, and development of secure and forty-year agreement signed in guaranteeing all services and re- cutting-edge infrastructure, plac- 2001 with ENAC, which renewed lated activities, such as the landing ing a central focus on the develop- the previous concession of May and take-off of aircraft, the man- ment of the host community and 7, 1962. The parent company SEA agement of airport security and the environmental protection. SpA is a joint stock company, in- continued development of com- corporated and registered in Italy. mercial services for passengers, operators and visitors through a wide Ownership The Malpensa and Linate airports and differentiated offer. are among the top ten in Europe The share capital of SEA SpA by passenger volume and among In addition, the SEA Group, amounts to Euro 27,500,000, the top five by cargo volume, through the company SEA Ener- comprising 250 million shares whereas at the national level the gia, produces electric and thermal of a par value of Euro 0.11, of Milan airport system is Italy's sec- energy both to serve the require- which 137,023,805 Class A shares, ond-largest in terms of passenger ments of its airports and for sale 74,375,102 Class B shares and traffic and number-one in the car- on the external market. 38,601,093 other shares. The go segment. Class A shareholders upon majority divestment must guarantee Mission Class B shareholders a right to co- sale. Class A shareholders have a The mission of SEA is to create val- pre-emption right on the sale of Key Facts ue for all parties directly involved Class B shares. in Group activities: Foundation of SEA: May 22, 1948 This is achieved through providing Registered office: Milan Linate Airport - 20090 Segrate (MI) services and solutions which serve Milan company registration the growing demands of the mar- office No.:00826040156 ket, ranging from passengers to Share capital: Euro 27,500,000 airlines, airport operators and the No. Group employees commercial partners at Malpensa at December 31, 2017: 2,837 and Linate airports.

The airport infrastructures man- HIGHLIGHTS 2017 aged by SEA ensure air access to Total revenues: Euro 726.0 million the major international destina- EBITDA: Euro 243.0 million tions for a large number of users Net profit:Euro 84.0 million and are located in one of the most Passengers: 31.5 million developed catchment areas in Eu- Aircraft movements: 271.2 thousand rope - providing a key hub for eco- Cargo: 588.5 thousand (tons) nomic growth in the North Italy region as a whole.

Consolidated Non-Financial Statement 2017 • 8 WHO WE ARE AND WHAT WE DO

Share Capital Structure 45.1% interest. Irish Stock Exchange, qualified On February 15, 2018, the shares as a Public Interest Entity (PIE) as held by the Province of Varese SEA, following the issuance of defined in Article 16, paragraph 1, were purchased by 2i Aeroporti the bond designated “SEA 3 1/8 letter a) of Legislative Decree No. Spa. Accordingly, as at the date 2014-2021” on April 17, 2014 and 39/2010. of approval of this report, public the admission to listing of the shareholders held a 54.9% inter- notes on the regulated market est and private shareholders a organized and managed by the

PUBLIC SHAREHOLDERS 9 entities/companies

Municipality of Milan(*) 54.81% 0.82% Other Province of Varese 0.64% Municipality of Busto 0.06% Arsizio 8.62% F2i Sgr SpA Other public shareholders 0.08%

Total 55.59% 35.75% 2i Aeroporti SpA

PRIVATE SHAREHOLDERS 2i Aeroporti SpA 35.75% F2i Sgr SpA (**) 8.62% 54.81% Other private shareholders 0.04% Municipality of Milan Total 44.41%

(*) Holder of Class A shares (**) On behalf of F2i - second Italian Fund for infrastructure

Consolidated Non-Financial Statement 2017 • 9 WHO WE ARE AND WHAT WE DO

SEA Group structure and investments in other companies

DIRECT AND INDIRECT INVESTMENTS OF SEA SPA AT DECEMBER 31, 2017

SEA SpA

Airport Commercial Other management Utilities activities activities Handling

S.A.C.B.O. SpA SEA Energia Dufrital SpA Romairport Signature Società per SpA SpA Flight Support l’aeroporto 40% Italy Srl civile di 100% 0.23% Bergamo - 39.96% Orio al Serio SEA Services Disma SpA Srl SITA Società 30.98% Cooperativa Malpensa 18.75% 40% arl (**) Logistica Europa SpA Aeropuertos 6 shares Argentina 25% 2000 SA (*) 8.5%

SEA Prime SpA 99.91%

Controlling shareholding Associate Investment in other companies

(*) The investment of SEA in the share capital of Aeropuertos Argentina 2000 (hereafter AA2000) amounted to 8.5% following the conversion, by the Argentinian government, of the bonds issued in 2008 by AA2000 into shares. The transfer of the shares will only be completed with authorization by the ORSNA regulator (Organismo Regulador del Sistema Nacional de Aeropuertos). At the date of the present document, ORSNA had not yet formalized the authorization of the sale of the investment in favor of Cedicor and, therefore, still holds 8.5% of the share capital of AA2000; therefore, the investment of 1 Euro was maintained in the 2017 financial statements. (**) In February 2018, SEA SpA submitted a request for withdrawal from SITA SC.

The SEA Group included the fol- liquidation financial statements lowing companies in liquidation at and the SEA Handling’s relative December 31, 2017: distribution plan, whose total shares were held by SEA SpA; ◼◼ Consorzio Milano Sistema in liq- ◼◼ the liquidation of Consorzio Mal- uidation (10% SEA SpA). pensa Construction was concluded on October 31, 2017 with the It should be noted that: presentation and approval of the liquidator's final statement of ac- ◼◼ on July 10, 2017, the Sharehold- counts and shareholders’ distribu- ers' Meeting approved the final tion plan.

Consolidated Non-Financial Statement 2017 • 10 WHO WE ARE AND WHAT WE DO

Business Model and lines

SEA BUSINESS MODEL

Regulated activities

AVIATION INVESTMENTS

◼◼ Airport fees ◼◼ Infrastructure use fees AIRLINES ◼◼ Security services fees ◼◼ Check-in desks and spaces fees

GENERAL INFRASTRUCTURE AVIATION INVESTMENTS & AVIATION SERVICES

◼◼ Airport fees CLIENTS AND ◼◼ Concession fees SUB-CON. HOLDERS

Market based activities

NON AVIATION

Market fees for direct PASSENGERS management activities Fees and royalties SUB-CON. HOLDERS Real estate

ENERGY

◼◼ Income from sale of electricity CLIENTS (SEA SPA, ◼◼ Income from sale of thermal energy ELECTRICITY EXCHANGE, OTHERS)

The management of airports by SEA is undertaken through specific business units:

Consolidated Non-Financial Statement 2017 • 11 WHO WE ARE AND WHAT WE DO

Commercial Aviation COMMERCIAL AVIATION BUSINESS OPERATING REVENUES (EURO THOUSANDS) The Commercial Aviation business unit includes Aviation and Non-Aviation operations.

The Aviation Business Unit is involved in the management, development and maintenance of the infrastructure and plant comprising the airport and the services offered to customers and the air- 2015 2016 2017 craft take-off and landing activi- 610,741 625,870 670,856 ties, in addition to airport security services. The revenues generated Source: SEA by these lines of business are governed by a regulated fee system represented by: Non-Aviation activities concern Specifically, this includes the fol- the provision of support to avia- lowing activities: ◼◼ airport fees (aircraft, passen- tion activities and include a wide gers and cargo); and differentiated offer - both ◼◼ retail (duty free and duty paid ◼◼ fees for the use of centralized directly provided and under sale to the public, catering, car infrastructure (for example sub-contract by third parties - of hire, the management of spac- loading bridges, BHS, central- commercial services for passen- es for the carrying out by third ized information systems); gers, operators and airport vis- parties of banking activities); itors, in addition to real estate ◼◼ the management of parking; ◼◼ fees for security controls (concerning passengers and hand activities. The revenues comprise ◼◼ the management of cargo spac- market fees for the Non-Aviation es; baggage and 100% of checked activities carried out directly and ◼◼ other activities, included under baggage); royalties calculated as a percent- the account “services and oth- ◼◼ fees for the use of check-in age of revenues - with indication er revenues” (ticket office, ve- desks and spaces by carriers of a guaranteed minimum - in the hicle maintenance, real estate, and baggage handlers. case of activities carried out by including rentals and conces- third parties under contract. sions of sections of the airport The security fees and payments and technological and design are set by ministerial decrees; cen- services, non-regulated security tralized infrastructure payments services). are subject to oversight by ENAC.

Consolidated Non-Financial Statement 2017 • 12 WHO WE ARE AND WHAT WE DO

General Aviation GENERAL AVIATION BUSINESS OPERATING REVENUES (EURO THOUSANDS) The General Aviation business includes the full range of services relating to business traffic at the western apron of Linate airport. The comparative figures from 2016 also include the results of the handling and general aviation business, consolidated line-by-line until March 31, 2016. 2015 2016 2017 16,179 11,750 12,124

Source: SEA

Energy ENERGY BUSINESS OPERATING REVENUES (EURO THOUSANDS)

The SEA Group guarantees energy (thermal and electric) self-suffi- ciency at both its airports through a system based on methane co-generation stations with low environmental impact, managed by the subsidiary SEA Energia. The Malpensa co-generation station has an annual estimated maxi- 2015 2016 2017 mum production capacity of 613 15,488 15,892 14,718 GWh for electricity and 543 GWh for thermal energy. The Linate sta- Source: SEA tion has an annual estimated maximum production capacity of 210 GWh for electricity and 157 GWh for thermal energy.

The Linate station also supplies thermal energy to civilian users adjacent to the Linate airport area. Indeed, from the beginning of 2015, the power plant was connected to the a2a-owned Canavese plant, near to the Viale Forlanini road, in order to provide supplementary heat energy to the city of Milan.

Consolidated Non-Financial Statement 2017 • 13 WHO WE ARE AND WHAT WE DO

Organizational structure

The SEA organization is structured into various departments and staff functions, each of which respectively subject to the control of the Chairman, the Chief Corporate Officer, the Chief Operating Officer and the Chief Financial and Risk Officer.

DEPARTMENTAL STRUCTURE AT 31-12-2017

Pietro Modiano Chairman

Auditing Department Public Affairs & External Relations Department

Continuous Improvement

SEA Study Area

Luciano Carbone Patrizia Savi Giulio De Metrio Chief Corporate Officer (CCO) Chief Financial and Risk Officer (CFRO) * Chief Operating Officer (COO)

Corporate Social Responsibility Finance, Risk Management & Customer Care Workplace Safety Investor Relations Department & Prevention & Legal and Corporate Environment Protection Service Affairs Department Planning & Control Department and Airport Safety Commercial Human Resources & Administration, Tax & Credit Non Aviation Organization Department Management Department E-Channel Department Management Purchasing Department Regulated Charges Management Aviation Business Operations Development Information and Communication Department Department Technology Department Infrastructure Safety Real Estate & Airports Development Management Accessibility Planning Department System Department Compliance Infrastructure Monitoring Department

SEA Energia

SEA Prime

* An Enterprise Risk Management (ERM) function reporting to the CFRO was established and the Finance, Risk Management and Investor Relations Department was renamed the Finance and Insurance Department with effect from January 9, 2018.

Consolidated Non-Financial Statement 2017 • 14 WHO WE ARE AND WHAT WE DO

SEA has adopted a Steering Pro- Group Sustainability Committee the monthly safety performance cess as an operating and control It proposes the guidelines for de- of airport operations and directly management method which, velopment and the implementa- or indirectly related issues/prob- through the cross and inter-de- tion and monitoring of sustaina- lem areas (also implications on partmental involvement of the op- bility policies to be integrated into insurance coverage), with the ob- erating management and staff of the Group business model. jective to decide upon actions for the Company, seeks to achieve the the resolution of problems identi- business objectives and strength- Group Business Execution and fied and the introduction of initia- en the team spirit. Economics Committee tives for the effective prevention The steering process is divided It examines the performance of of risks. into five committees: the airports in terms of their relative economic, operational, in- Executive Committee frastructural and commercial as- Linate and This develops the company stra- pects, in addition to ensuring the tegic objectives and oversees the monitoring of actions undertaken. Malpensa airports implementation of consequent actions, ensuring also the man- The committee also ensures inte- Linate Airport agement of any disclosure and au- grated disclosure on the principal thorisational process established economic, financial and adminis- Linate Airport occupies a total by the governance model. trative topics concerning the man- area of approximately 350 hec- agement of the Group, developed tares in the south-eastern part of Monthly Round Table through the reporting system and the Province of Milan, extending It analyses the key development the defined disclosure standards, into the municipalities of Peschi- and/or investment themes and in order to identify the points of era Borromeo, Segrate and Milan. projects for the main business attention and to address any cor- Forlanini Park, one of the major ur- strategies, while also ensuring rective actions. ban parks in Milan, and the Idros- that any risks and opportunities calo lake adjoin the airport. are reviewed from a strategic Safety Board standpoint. The Board analyses and evaluates

LINATE - PLAN OF AIRSIDE AIRPORT AREA

ROGGIA LIRONE

CARBURANTI P

RADAR PESCHIERA

CARGO FIUME LAMBRO ROGGIA LIRONE

P HANGAR V.D.F. e Aerologica

Radar ATCR 3 VV.F. T P AEROSTAZIONE PIAZZALE AEROMOBILI P T ILS-MM

H 36 FFM-L P G PISTA 2442 x 60 ILS-GP

18 G.P.

T-VOR ILS-LLZ

S.S. 415 NUOVA PAULLESE Radar Marconi K

prova motori

Radar HRR W band

VIALE FORLANINI

H L 35 M 17

LAMBRO

Radar Milano-Lambro

FIUME

ROGGIA LIRONE

piazzale aeromobili OVEST

N AEROSTAZIONE INFORMAZIONI TECNICHE

SEDIME AEROPORTUALE PISTA 18/36 PISTA 17/35 PIAZZALE AEROMOBILI NORD CENTRO PIAZZALE AEROMOBILI OVEST LOGISTICO MILITARE

LEGENDA

LAMBRO SEDIME P.R.G. MXP 2000 APPROVATO CON DECRETO MIN. TRASP. N. 903 DEL 13/2/1987 DIMENSIONE TOTALE 1.220 ha FIUME

LIMITE DOGANALE

CONFINI COMUNALI

TANGENZIALE EST

Consolidated Non-Financial Statement 2017 • 15 WHO WE ARE AND WHAT WE DO

The airport is dedicated primarily LINATE AIRPORT TABLE to a frequent flyer type client, on particularly attractive domestic and international routes (these Traffic FY 2017 ∆ 17/16 Rank ITA latter both within the European Passengers 9,503,065 -1.4% 5 ° Union and outside). Movements 96,467 -1.4% 3 ° In 2017, Linate handled 5.4% of passengers, 7.6% of aircraft movements and 1.2% of cargo in Italy. Operating standards - 2017 The airport has two runways for Departure punctuality (delays less than 15 minutes) 86.8% take-off and landing, of which the first (length of 2,442 meters) Delivery of first bag within 18 minutes 93.9% for commercial aviation and the Number of misdirected bags / 1,000 passengers 1.8 second (length of 601 meters) for General Aviation.

The flight infrastructure contains Infrastructural characteristics a taxiway of approx. 2,100 meters, Surface area 350 ha a system of link roads of approx. 4,000 meters and 2 aircraft stands. No. runways 2 No. aircraft stands 46 There are 46 aircraft stands, ac- commodating a maximum of 42 No. check-in desks 73 aircraft at any given time. No. departure gates 24

The passenger area extends over Terminal surface area dedicated to commercial activity 18.2% 3 levels for a total area of 75,000 Cargo warehouse surface area 16,800 m2 m2 (of which approx. 33,000 open to the public), with 73 check-in Cargo movements capacity 80-100 tons/year counters and 24 gates, of which 5 Cogeneration station - installed electric capacity 24 MWe served by loading bridges and the remaining utilized by aircraft posi- Cogeneration station - installed thermal capacity 18 MWt tioned in remote parking reacha- No. car parks 3 ble by runway shuttle buses. No. parking spaces reserved for passengers 3,736 18.2% of the airport surface open No. parking spaces reserved for airport operators 1,850 to the public is dedicated to commercial activities (sales points and No. taxi spaces 169 catering, car hire and banking services) and 7.5% to services provid- Sources: SEA, Assaeroporti (www.assaeroporti.it) ed by the airlines (check-in counters and ticket counters).

The cargo area utilizes a cargo warehouse of approx. 16,800 m2, with a capacity to handle 80- 100,000 tons per year.

(2) Source: Assaeroporti (www.assaeroporti.it).

Consolidated Non-Financial Statement 2017 • 16 WHO WE ARE AND WHAT WE DO

Malpensa Airport The airport covers 1,220 hectares ers and the numerous natural hab- within 7 municipalities: Somma itats of the Valle del Ticino from Malpensa airport is located on the Lombardo, Casorate Sempione, industrialization and encroaching Lombardy plateau in the South- Cardano al Campo, Samarate, Fer- urbanization and to safeguard the West of Varese province, 48 KM no, Lonate Pozzolo and Vizzola rich biodiversity heritage. from Milan, with rail connections Ticino. to the city and a road system, in- Malpensa airport ranks second cluding a motorway, which con- All airport grounds are within the in Italy for overall aircraft move- nects the airport with the major Lombardy Valle del Ticino Park, ments and passenger numbers. regions of Northern Italy and Swit- the largest regional park in Italy, zerland. created in 1974 to protect the riv-

MALPENSA - PLAN OF AIRSIDE AIRPORT AREA

INFORMAZIONI TECNICHE

SEDIME AEROPORTUALE 1.220 ha PISTA 35R/17L 3.920 m X 60 m PISTA 35L/17R 3.920 m X 60 m PIAZZALE AEROMOBILI TERMINAL 1 1.015.000 m 2 PIAZZALE AEROMOBILI TERMINAL 2 304.000 m 2

LEGENDA

PISTA DI VOLO 35R - 17L SEDIME P.R.G. MXP 2000 APPROVATO CON DECRETO MIN. TRASP. N. 903 DEL 13/2/1987 DIMENSIONE TOTALE 1.220 ha

LIMITE DOGANALE

CONFINI COMUNALI TERMINAL 2

PISTA DI VOLO 35L - 17R

Progetto MASPERPLAN AEROPORTUALE

N. DI PROGETTO: MP08/001 Scala: 1:10.000 Data: APRILE 2017

Codice: 5 4 MP ENAC Progettazioni 3 N. Elaborato rev. 2 1 0 0 1 REV. Data Oggetto

CARGO

TERMINAL 1 CARGO HANGAR

Aeroporto Milano Malpensa

SEDIME AEROPORTUALE

STATO DI FATTO

Malpensa managed 11.5% of The taxiing and connection road- 1998, was constructed according overall movements, 12.6% of pas- ways cover approx. 19.4 km in to- to a modular type of plan and DRAFT REDATTO: CONTROLLATO: APPROVATO: senger traffic and 51.5% of cargo tal (28.5 km if considering also the comprises a core structure (com- APRILE 2017 3 transported in Italy in 2017 . stand taxiways). The 204 stands prising 6 floors) and three satel- for aircraft - of which 111 at Ter- lite structures with airport stands, The airport utilizes two parallel minal 1, 43 at Terminal 2 and 49 from which the passenger loading runways, with 808 meters beat Malpensa Cargo - allow a max- bridges are connected. tween them, measuring 3,920 me- imum stoppage capacity of 120 ters each and capable of handling aircrafts. all aircraft in service. The runways do not permit parallel independ- There are 2 airports for passen- ent approaches. gers. Terminal 1, operative since (3) Source: Assaeroporti (www.assaeroporti.it).

Consolidated Non-Financial Statement 2017 • 17 WHO WE ARE AND WHAT WE DO

The three satellites are connected open to the public is dedicated to Malpensa Cargo utilizes warehous- to the core building by a double commercial activities (sales points es with a surface area of 50,000 tunnel for arriving and departing and catering, car hire and banking m2 and has a capacity of between passengers and a covered corridor services). 700,000 and 750,000 tons of car- for the movement of bags. go annually. Malpensa Terminal 2 has 35 check- It has 255 check-in counters and in counters and 23 gates for The airport has also a hanger for 65 gates, of which 30 served by 41 parked aircraft reachable by run- the recovery and maintenance of loading bridges and the remaining way buses. aircraft and of office use spaces. for aircraft positioned in parking, reachable with shuttle runway bus. Approx. 12.2% of the surface area open to the public is dedicated to Approx. 8.5% of the surface area commercial activities.

MALPENSA AIRPORT FIGURES

Traffic FY 2017 ∆ 17/16 Rank ITA Passengers 22,037,241 14.1% 2nd Cargo (tons/year) 576,539 7.4% 1st Movements 174,754 7.4% 2nd

Operating standards 2017 Arriving punctuality 82.0% Delivery of first bag within 27 minutes Malpensa T1 95.2% Malpensa T2 97.6% Number of misdirected bags / 1,000 passengers 1.5

Consolidated Non-Financial Statement 2017 • 18 WHO WE ARE AND WHAT WE DO

Infrastructural characteristics Surface area 1,220 bags/hour No. runways 2 No. aircraft stands 204 No. check-in desks: Malpensa T1 255 Malpensa T2 35 No. boarding gates: Malpensa T1 65 Malpensa T2 23 Terminal surface area dedicated to commercial activity Malpensa T1 8.5% of the surface area open to the public Malpensa T2 12.2% of the surface area open to the public Baggage Handling System Malpensa 1 10,650 bags/hour Baggage Handling System Malpensa 2 4,800 bags/hour No. baggage delivery carousels Malpensa T1 10 Malpensa T2 4 Cargo movements capacity 700-750,000 tons/year Cogeneration station - installed electric capacity 70 MWe Cogeneration station - installed thermal capacity 62 MWt No. car parks Malpensa T1 4 Malpensa T2 1 No. parking spaces reserved for passengers Malpensa T1 6,879 Malpensa T2 2,700 No. parking spaces reserved for airport operators Malpensa T1 2,563 Malpensa T2 1,160 Malpensa T1-Malpensa T2 intermediate area 1,609 Malpensa Cargo 1,159 No. taxi spaces Malpensa T1 280 Malpensa T2 20

Sources: SEA, Assaeroporti (www.assaeroporti.it)

Consolidated Non-Financial Statement 2017 • 19 Market overview MARKET OVERVIEW

Market overview

Global air transport Traffic at European in terms of percentage growth (+7.4%) after London Heathrow 4 5 in 2017 airports in 2017 (+10.2%).

The global passenger traffic -per Overall growth in passenger traf- formance in 2017, on a sample of fic for European airports associ- Traffic at Italian 1,056 airports, indicated growth ated with ACI Europe was 6.2% 8 of 6.4% compared to 2016. when compared to 2016, with 1.1 airports in 2017 billion passengers served. The market is growing in all are- Air traffic continued to rise at as: Europe registered the high- The main hubs, representing 36% the 38 Assaeroporti member est increase in percentage terms of total passenger traffic in as- airports. In 2017 passengers (in- (+8.5%), followed by Asia (+7.8%), sociated airports, grew 4.8% on cluding general aviation traffic) Africa (+5.9%) - recovering from last year. Increases were most totaled 175.4 million (+6.4%), up last year, the Middle East (+4.7%), notable in Amsterdam (+7.7%), by 10.7 million on the previous Central/South America (+4.3%) Zurich (+6.3%), Frankfurt (+6.1%) year. This result is due to growth and North America (+3.5%). and Madrid (+5.9%). Malpensa, in international traffic to both with a growth of 14.2% over the EU (+8.5%) and non-EU (+7.9%) The world rankings classify Atlan- previous year, stands out among countries and the increase in do- ta in North America, an area that the airports that handle 'point- mestic traffic (+3.0%). handles 1.7 billion passengers, as to-point' traffic, followed by the top airport for passenger traf- Brussels (+13.6%), Manchester 1.6 million aircraft movements fic served (104 million, including (+8.6%), Barcelona (+7.1%) and (+3.2%) and 1.1 million tons of car- 92 million linked to domestic traf- Dublin (+6.0%). Copenhagen was go (+9.2%) were achieved. fic). In second place is Beijing (96 stable compared with the previ- million passengers, including 74 ous year, whereas Berlin posted a Rome Fiumicino, followed by Mi- million for domestic destinations) decline (-3.7%). lan Malpensa and Bergamo, are in Asia, an area that carries 1.9 bil- listed in descending order in the lion passengers. Cargo traffic increased 7.2%, with ranking of Italian airports in terms a total of 11.9 million tons han- of passenger numbers. In third place is Dubai (88 million dled. Among the top five Europe- passengers), which represents the an airports in terms of cargo vol- The Rome airport system reported Middle East’s main hub with a 36% umes, Frankfurt is first with over a slight decrease (-0.6% compared market share on a total of 242 mil- 2.1 million tons, followed by Paris to 2016), with 46.9 million passen- lion passengers. Charles de Gaulle with 2.0 million gers served. The Lombardy airport tons, Amsterdam with 1.8 million system saw growth of 9.4% to On a sample of 711 airports world- and London Heathrow with 1.7 reach 44 million passengers, equal wide, cargo traffic increased by million. to 25% of the national total: Milan 7.9% on 2016, with 100.9 million Malpensa contributed with 22.2 tons handled. Cargo business also Malpensa airport ranks fifth in million, Linate 9.5 million and Orio performed well in each region terms of cargo volumes handled al Serio airport 12.3 million. analyzed. (576.5 thousand tons) and in the top five, it ranks as second airport In the north-east, Venice and Tre-

Consolidated Non-Financial Statement 2017 • 21 MARKET OVERVIEW

Airports in Georgia, Ukraine, Moldova and Iceland reported 20% average growth in 2017. EU airports saw a 7.7% increase in passenger traffic, a further improvement on 2016. ◼◼ This considerable growth is placing considerable pressure on airport facilities and personnel, as an increasing number of airports approach their capacity limits. ACI Europe predicts that passenger traffic at European airports will double by 2040. ◼◼ Operating near capacity limits at so many European airports raises the risk of lower quality of service and delays, adverse environmental impacts, less competition between airlines viso carried 13.4 million passen- affected by geopolitical risks. and higher fares. According to gers (8% of the national total) and ◼◼ The above performance was figures by ACI Europe10, passen- in Central Italy, Pisa and Florence on a par with the previous year, gers are already paying Euro 2.1 7.9 million passengers (4% of the resulting in an increase in Eu- billion in higher airfares each national total). ropean passenger traffic of year as a direct result of con- 20% in the last two years and gestion. In Apulia, the airport system (Bari, of nearly 30% in the last five Brindisi, Foggia and Taranto) years. In addition to a growing served 7 million (4% of the na- economy and oil prices that tional total), while Sicily (Catania, remain low, this performance Comiso, Lampedusa, Palermo and may also be attributed to shift- Trapani) and Sardinia (Alghero, ing consumer tastes, digitaliza- Cagliari and Olbia) served 16.9 tion and the increasing impor- million (10% of the national total) tance of millennials. and 8.3 million (5% of the national ◼◼ The fact that in the last five total), respectively. years the number of European airports (excluding major airports) with over 25 million pas- European air sengers has risen from 14 to 24 underlines the increasing com- 4 Source: ACI World (Pax Flash & Freight transport market petition between major point- Flash) 5 9 to-point airports and hubs. Source: ACI Europe Rapid Data Exchange development Programme (42 associated airports), Passen- ◼◼ The biggest traffic increases in ger arrivals+departures+transits ◼◼ Within the European market, 2017 were seen at airports lo- 6 Airport hubs: Frankfurt, Amsterdam, Paris passenger traffic posted its big- cated outside the EU and in its Charles de Gaulle, Zurich, Rome Fiumicino, Madrid and London Heathrow gest gains of the past 13 years eastern and southern regions. 7 Excluded: Luxembourg, Cologne and Liege in 2017. In 2017 European air- The swiftest growth was re- which generate higher volumes of cargo ports enjoyed their best year ported by airports in the east transport than Malpensa, since not included since 2004, when air traffic was and south of the EU, with dou- in ACI Europe’s Rapid Data Exchange Pro- gramme boosted by the addition of ten ble-digit growth recorded by 8 Source: Assaeroporti, 2017 new EU members. This high- airports in Latvia, Estonia, Po- 9 Source: ACI Europe, Airport Traffic Report lights the fact air transport de- land, the Czech Republic, Slova- December, Q4, H2 & Full Year 2017 10 mand continues to grow more kia, Hungary, Croatia, Slovenia, ACI Europe Cocktail at the European Parliament, Welcome address by Michael rapidly than the economy at Romania, Bulgaria, Belgium, Kerkloh - President ACI Europe, January 23, large and is not currently being Cyprus, Malta and Portugal. 2018

Consolidated Non-Financial Statement 2017 • 22 MARKET OVERVIEW

gions of north-eastern Italy, Emilia lan's airports, and in particular for Our airports' Romagna and Tuscany. Within the Malpensa with regard to long-haul competitive Milan airport system, Malpensa is destinations. one of two airports in Italy (the positioning other is Rome Fiumicino) serving The ability to channel demand to a significant network of long-haul Malpensa rather than to connect- Catchment area destinations. ing flights routed through other European hubs is contingent on According to the established in- Accordingly, passengers from the accessibility of Malpensa air- ternational standards, an airport's northern Italy who wish to travel port - an area in which a fast, inte- catchment area is determined as to intercontinental destinations grated and effective road system including all points within the ter- have two choices: travel from Mal- can make the difference. ritory from which the airport can pensa or depart from the near- be reached in a given amount of est regional airport and change time using any mode of transport planes at a European hub. Italy's available. The Milan airport sys- National Airport Plan also classi- tem's catchment area principally fies Venice airport as strategic, comprises, in declining order of at- but its network of long-haul des- tractiveness, the Milan metropoli- tinations is not currently compara- tan area, the Region of Lombardy ble to Malpensa's. In the short and and north-western Italy. It also medium term, it can therefore be extends - albeit with a lesser abil- stated that all of northern Italy is ity to capture demand - to the re- a potential catchment area for Mi-

MALPENSA AIRPORT'S CATCHMENT AREA

Source: Prepared by SEA using CLAS 2016 and ISTAT survey data

Consolidated Non-Financial Statement 2017 • 23 MARKET OVERVIEW

LINATE AIRPORT'S CATCHMENT AREA

Source: Prepared by SEA using CLAS 2016 and ISTAT survey data

SOCIO-ECONOMIC FEATURES OF THE MILAN AIRPORT SYSTEM CATCHMENT AREA

Catchment area % of Italian total Area (km2) 135,057 44.8 Population 27,591,204 45.5 GDP 2012 (Euro mil.) 910,053 58.1 N° companies 2015 2,652,848 56.6 N° employees 2015 10,050,207 61.7 Exports 2016 (Euro mil.) 333,200 79.8

Source: SEA on ISTAT data

Consolidated Non-Financial Statement 2017 • 24 MARKET OVERVIEW

Lombardy - among Europe's most mutually reinforcing influence on Economic performance of Milan competitive regions - is the heart one another: airports can have and Lombardy12 of the Milan airport system's an impact on the competitive- In the past four years, Milan has catchment area. ness and economic development grown by 6.2% - i.e., twice the Ital- of the communities that benefit ian nationwide rate (+3.6%) - driv- Lombardy is Italy's number-one from their presence, yet the social en by services (+7.6%, accounting region from both a demograph- and economic context in which for 82% of value added) and a ro- ic and economic standpoint. Its airports operate also has a signif- bust recovery of industry in the population of 9.9 million in 2011 icant effect on airport operating two-year period 2016-2017 (re- accounted for 16.4% of the na- performance. spectively, +4.0% and +3.4%). tionwide total and its GDP, which exceeded Euro 337 billion in the The type and Boundary of the ef- Thanks to this performance, Mi- same year, represented 20% of fects that our airports have on the lan's GDP is currently 3.2% above the Italian total. social and economic parameters of the pre-crisis level, whereas both the community in the catchment Lombardy and the rest of Italy still It is also Italy's number-one indus- area (understood in its various rami- remain below their pre-crisis levels trial region: in 2013 its industrial fications, as discussed in the section (by -1.1% and -4.4%, respectively). value added amounted to 26.7% above) are described in the section of the Italian total, whereas from of this document dedicated to so- Manufacturing figures for 2017 the standpoint of employment cial and environmental impacts. indicate that the recovery con- Lombardy accounted for 23.8% of tinues for small companies based those employed by Italian industry On the other hand, the contextu- in Lombardy (+3.4% at the an- nationwide. Yet it also plays a key al factors that have a particularly nual level), which are growing as role in agriculture, making it num- significant impact on the Bound- fast as their large counterparts ber-two in terms of agricultural ary and characteristics of the air- (+3.3%), whereas mid-size com- value added, at 10.4% of the Ital- port business include econom- panies doing even better (+4.2%). ian total. ic growth (which has an impact Small companies have a way to go above all on outgoing air traffic) yet to return to pre-crisis levels From the standpoint of economic and the attractiveness of the local (-11.9%), whereas mid-size com- indicators, Lombardy is the num- area, above all to tourists (which panies are almost there (-1.1%) ber-two European NUTS2 region instead affects incoming traffic). and their larger counterparts have in terms of GDP generation, following Île de France but coming in ahead of regions such as Inner London, Upper Bavaria, Düssel- dorf or the Stuttgart region.

Lombardy's manufacturing exports are equivalent to approximately one-third of the national total for Italy and other major European countries (excluding Germany), whereas they are equal to or slightly less than those of nations such as Poland, the Czech Republic and Austria. If it were an independent nation, Lombardy would rank 11th in hypothetical rankings of the main European ex- porting nations.

Competitiveness of the airport and its local community Airports and the communities in which they are located have a

Consolidated Non-Financial Statement 2017 • 25 MARKET OVERVIEW

progressed well beyond this point merce, services and finance); its for international visitors as well (+8.2%). leadership is strongest in areas as a significant boost for the city's relating to business and it enjoys reputation, with an important role In 2017 GDP grew by +1.8% in a very positive international repu- to play in gaining the attention Lombardy and by +1.9% in Milan, tation. of an extremely broad public and compared to +1.5% in Italy. Over worldwide media coverage. the last four years, Lombardy's The analysis was conducted on a GDP has risen by +5.1%. comparative basis with the urban Milan ranks second (1.54) after centers of the other four major Eu- Barcelona (1.82), the city most In terms of manufacturing pro- ropean economic regions: Barcelo- successful at taking advantage of duction, growth amounted to na, Lyon, Munich and Stuttgart. big sporting events. Lyon (0.69), 3.7% in 2017, almost three times Munich (0.68) and Stuttgart (0.27) the level of 2016 (+1.3%), in Milan ranked third in the panel lagged far behind, below the aver- line with Baden-Württemberg (with an overall score of 0.96 in age. In 2014-2016, Milan was num- (+3.6%), above the Italian aver- the category) in terms of its abil- ber-one in terms of the attraction age (+3.1%), but below Catalonia, ity to attract tourists: Munich of events of global interest, beat- which continued its recovery at an (1.32) and Barcelona (1.29) vie for ing out Barcelona. International even swifter pace (+4.2%). Lom- the top spot in the rankings, with conventions and conferences are bardy narrowed the gap from its Munich boasting more than twice a major focal point, drawing visi- pre-crisis peak to -3.2%, whereas the incoming tourist levels of the tors from around the world while both Italy and Catalonia still have Milan metropolitan area and Bar- also driving commercial develop- considerable ground to cover celona offering a very high hotel ment and innovation. (-18.2% and -13.2%, respectively). room occupancy rate. Baden-Württemberg is 7 points In this category, the comparison above the 2008 level. Milan fell below the panel average was drawn to the top European in terms of spending by interna- players in this sector, which dif- In 2017 GDP increased across all tional tourists (0.90), showing a fered from the standard territo- sectors of Lombardy's manufac- lower level of tourist spending rial parameters considered in the turing industry (with the excep- both on the average and per tour- analysis. When it came to con- tion of textiles), with above-aver- ist, while performing well at the ventions, Milan was number-two age gains in iron and steel (+5.9%), level of average receipt amount. in Europe (1.11), second only to leather goods and footwear It also ranked third (1.01) by quan- Frankfurt (1.15). They were fol- (+5.8%), machinery (+4.7%), rub- tity of entertainment facilities in lowed by Paris (1.01) and then by ber and plastic (+4.4%), chemicals which to engage in various typical Barcelona (0.73). and pharmaceuticals (+4.2%) and leisure time pursuits - a category non-metallic minerals (+4.2%). All which was led by Barcelona (1.44), Milan ranked after the other cities provinces grew - particularly those followed by Lyon (1.17) - but was in the benchmark in terms of inter- of Milan and Lodi, which doubled number-one (2.03) in terms of national conferences (0.74, com- their performances compared to spending by tourists on leisure pared to 1.11 for Paris, 1.10 for 2016, and Monza, which grew at time services. Milan is far ahead Barcelona and 1.05 for London). nearly three times the rate for the of all the other cities in shopping previous year. (1.59), in terms of the presence of Milan's deep integration into the retail businesses targeting both global network (garnering it an Attractiveness of the Milan area13 local customers, but also, and overall score of 1.34) compared According to data supplied by the above all, those who view big cit- to Munich (1.09), is further borne Milan Monitoring Centre, which ies as places where the variety on out by its leading position in the measures Milan's ability to attract offer allows customers to make international rankings of cities and compete - understood as the the best choices. and large number of diplomatic city's ability to play a global role, offices. projecting a positive image of it- This assessment is borne out by self and drawing people, organ- Milan's position in the rankings of ized knowledge and capital - Milan the most attractive European cit- 11 Source: Confindustria Lombardia; is a metropolitan area with a ro- ies for the 250 global top retailers. ♯Lombardia 2030 12 Source: Assolombarda, Booklet on the bust, highly diversified economy The sporting events hosted by the Economy, March 25, 2018 (ranging from industry to com- city serve as both a strong draw 13 Source: Milan Monitoring Centre 2017

Consolidated Non-Financial Statement 2017 • 26 MARKET OVERVIEW

ATTRACTIVENESS OF THE MILAN AREA - BENCHMARK BASED ON VARIOUS EUROPEAN CITIES

Tourist attractions Business & capital International attraction tourist spend

Presence of Free time global businesses tourist spend

0,5 Air accessibility Shopping structures

1,5

Inclusion in global Entertainment network 2 options International sporting events

Milan Barcelona Munich Stockholm Lyon

Source: Based on Milan Monitoring Centre data 2017

In an increasingly interconnect- of operations for companies with Capacity ed international context, a direct turnover of over Euro 1 billion (90 connection to the world's major companies), ahead of Munich (50), The capacity of an airport, which cities is indispensable. Barcelona (37) and Stuttgart (20). in Italy is established by ENAC and with the involvement of the Access to effective air transport Its ability to attract companies and interested parties, is established services is thus an essential driver capital in terms of local offices of based on the capabilities of the of success: Milan (with an over- foreign multinationals is a key fac- individual airport, which in turn all score of 1.43 in this category) tor. Milan (1.38) is well positioned placed second, following Munich above the benchmark average, depend on: (1.57), slightly ahead of Barcelo- even with Munich (1.34) and just na (1.11) and well above Stuttgart behind Barcelona (1.46) at the top ◼◼ the air navigation sector plan, (0.38) and Lyon (0.50). of the rankings. which concerns the operating and control capacity of the air Milan's greatest strength is its Compared to the other cities' roles traffic overseen by ENAV; business community, which has in their respective countries, Milan ◼◼ the runway system and relat- made it home to companies op- is unique in that it acts as a priv- ed infrastructure, in particular erating within the global network ileged gateway for foreign direct aprons and terminals; (1.73 compared to 1.32 for Mu- investment in Italy, accounting ◼◼ traffic demand factors; nich), sharply ahead of the other for 38.0% of all new international ◼◼ environmental restrictions, cities. Significantly, it leads as base greenfield projects. such as anti-noise procedures

Consolidated Non-Financial Statement 2017 • 27 MARKET OVERVIEW

and the suspension of flights during hours of darkness.

The airport capacity is expressed by a certain number of movements per hour (with a “movement” concerning the take-off or landing of an aircraft, independently of the type of traffic). The capacity of Mi- lan airports has been established by ENAC as 88 movements/hour - as follows:

◼◼ Malpensa airport: 70 movements/hour (considering jointly take-offs and landings); ◼◼ Linate airport: 18 movements/ hour (considering jointly take- offs and landings).

This breakdown of the movements per hour between Mal- pensa and Linate was established within the re-organization project of the Milan airport system, drawn up to facilitate the development of Malpensa. Capacity of Linate airport Eurocontrol14 predicts that there will be more than 30 congested Capacity of Malpensa airport The Linate airport infrastructure European airports by 2035. The capacity of Malpensa airport is capable of managing a capacity is subject to further limitations of approx. 32 movements/hour, Even today, these airports al- concerning: although traffic limitation is im- posed by the “Bersani” and “Ber- ready operate at 80% or more of their capacity for more than three ◼◼ 39 similar movements (there- sani bis” Decrees which establish hours a day. fore movements of the same a cap of 18 movements/hour. This type, take-off or landings sepa- capacity was fixed for commercial flights, without including region- According to the traffic growth rately) and 31 opposing move- scenario deemed “most likely” by ments (therefore movements al continuity agreement flights (therefore flights to and from Eurocontrol, in 2035 it will not be of a differing type, take-offs or possible to accommodate approx- particular regions located off the landings jointly) every hour; imately 1.9 million flights (12% of Italian mainland, such as Sicily and ◼◼ 6/7 similar movements every demand). 10 minutes, 6/7 similar move- Sardinia, which guarantee flights with the main peninsular airports) ments in the subsequent 10 The airport capacity shortfall minutes (for a maximum of 13 and General Aviation flights. will not be distributed uniformly similar movements every 20 throughout Europe. minutes) and 5 opposing move- The positioning of our airports ments every 10 minutes. in view of the European capacity United Kingdom, Turkey, Belgium, crunch Netherlands and several Eastern The available time slots may be The shortfall at the level of airport European countries are likely to be further developed in the future by capacity is a very sensitive issue more severely affected than others. airlines already operating out of within the European air transport the airport or by new airlines. market and is considered one of 14 EUROCONTROL (2013b). Challenges the weak points threatening the of Growth 2013. Task 6: The Effect of Air industry's future growth. Traffic Network Congestion in 2035

Consolidated Non-Financial Statement 2017 • 28 MARKET OVERVIEW

The lack of capacity at European If an airport's prices are reflect- expected to reach Euro 6.3 billion airports is also cause for concern ed efficiently in airport fees, the by 2035. Essentially, European due to the scale of the negative lack of slots will result in higher passengers will inevitably pay an externalities that will be borne by rates and thus in higher costs for increasingly higher price for insuf- passengers. airlines, which in turn will charge ficient airport capacity. their passengers higher fares for In a situation in which airport ca- flights during peak times, on the To reduce the negative impact pacity demand exceeds supply basis of the market situation. of the capacity shortfall on pas- - and in which airports have con- sengers' income, constant invest- siderable market leverage over According to Eurocontrol's esti- ments are required, in addition to passenger traffic - prices will be mated traffic growth figures, the regulatory reform to combat dis- used to balance demand and avail- total amount of fees charged to incentives for airlines to increase able capacity. airlines at congested airports is capacity.

POSITIONING AMONGST SELECTED EUROPEAN AIRPORTS BY CAPACITY UTILIZATION RATE

0.8

Istanbul 0.75 London Milan Heathrow Linate Berlin 0.7 Tegel Zurich Dusseldorf Moscow Sheremetyevo 0.65 Geneva Munich Frankfurt Dublin London Gatwick Barcelona Madrid 0.6 Lisbon Warsaw Paris CDG Copenhagen Vienna Rome 0.55 Milan Athens Nice Malpensa Amsterdam CAPACITY UTILISATION INDEX/24 h UTILISATION CAPACITY London Stansted Manchester Oslo Stockholm 0.5 Brussels Prague 0.45 CAPACITY UTILISATION INDEX (CUI) 0.4 0.5 0.55 0.6 0.65 0.7 0.75 0.8 0.85 0.9

Source: SEO Amsterdam Economics, 2017

The capacity utilization index in terms of CUI and 24-hour CUI. Air transport supply (CUI) estimates an airport's use of its capacity compared to the peak Linate may be seen to be among The Milan metropolitan area ranks level of the busiest 5% of hours. the most congested European ninth in Europe by total air trans- In other words, it is an indicator airports - although the situation port offerings at 40.2 million ASKs that measures the intensity at is destined to become less prob- (available seat kilometers) sup- which an airport operates at its lematic in the future, in the light plied each year. full capacity. of regulatory traffic limitations - whereas Malpensa shows a large The matrix shows the positioning margin of unused operating ca- of 30 major European counterparts pacity.

Consolidated Non-Financial Statement 2017 • 29 MARKET OVERVIEW

AIR TRANSPORT SUPPLY IN THE MILAN METROPOLITAN AREA (2014-2016)

ASK Places offered

2014 2015 2016 2014 2015 2016 34,148,626 37,409,952 40,202,595 22,966,425 23,936,914 25,655,148

Source: ICCSAI Fact Book

ASKs correspond to the total sea- red 26.6 million seats. fered. Destinations lying outside ts available on each flight, multi- Europe accounted for 73.4% of plied by the number of kilometers Malpensa airport ranked sixth in Malpensa's weighted offerings. flown: a measure of an airport's Europe (after London Heathrow, capacity in terms of passenger Paris CDG, Frankfurt, Amsterdam transport supply. The overall air- and Zurich) in terms of the weight port system - inclusive of Malpen- of ASKs relating to non-EU desti- sa, Linate and Orio al Serio - offe- nations out of the total ASKs of-

AIR TRANSPORT SUPPLY AT MALPENSA AIRPORT (2014-2016)

2014 2015 2016 ASK 23,998,189 26,107,947 28,086,906 ASK inter-EU 6,622,044 6,449,673 7,463,899 ASK non-EU 17,376,145 19,658,273 20,623,007 ASK non-EU/ASK total 72.4% 75.3% 73.4%

Source: ICCSAI Fact Book

Consolidated Non-Financial Statement 2017 • 30 MARKET OVERVIEW

Malpensa is one of the few Euro- Direct and indirect Malpensa airport is the Europe- pean airports with a high level of an medium-large airport (second competition non-EU ASKs that is not also a hub. overall after Venice) with the low- Direct competition est level of dependence on a sin- This may also be explained by the Analyzing the level of dependence gle airline. fact that Malpensa offers a high of European airports on particu- level of medium/long-haul desti- lar airlines (under the Herfind- This sets it apart from other Con- nations, despite lacking a feeder ahl-Hirschman - HHI concentration tinental airports such as Amster- flight network, instead relying pri- index, which reaches a value of 11 dam, Frankfurt, Zurich, Paris or marily on point-of-origin demand thousand where the offer of an Vienna, where the principal airline for air transport to international airport is completely handled by accounts for around 50% of ASKs. destinations. a single airline), it emerged that

DIRECT COMPETITION DEVELOPMENT AT MILAN MALPENSA

2014 2015 2016 HH index on ASK 533 539 519 No. airlines 88 80 86 Entropy index on ASK 1.50 1.50 1.51 % ASKs of leading 5 airlines 41.7 42.0 40.7 % ASKs of leading airline 14.3 13.5 13

Source: ICCSAI Fact Book

Consolidated Non-Financial Statement 2017 • 31 MARKET OVERVIEW

DIRECT COMPETITION DEVELOPMENT AT MILAN LINATE

2014 2015 2016 HH index on ASK 3,191 3,090 2,986 No. airlines 22 20 18 Entropy index on ASK 0.79 0.81 0.82 % ASKs of leading 5 airlines 77.9 76.3 76.7 % ASKs of leading airline 54.6 53.8 52.7

Source: ICCSAI Fact Book

Linate airport shows a higher Therefore, low index values indi- The “proximity” concept relating traffic concentration level than cate situations in which the traffic to departing airports and destina- Malpensa owing to the signifi- offer of a particular airport is high- tion airports concerns those locat- cant presence of Alitalia, which ly concentrated. Also according to ed within 110 km. is responsible for approximately this index, Malpensa airport was 53% of the total ASKs. In Italy, the the absolute leader in Europe with The exposure of an airport to indi- airport where the largest share of regard to the lowest dependence rect competition is one of the el- ASKs held by a single carrier is Ber- on an individual airline. ements taken into account when gamo: approximately 80% of sup- considering whether an airport is ply is attributable to Ryanair. Indirect competition a natural monopoly. The level of indirect competition Direct competition is measured refers to each route offered by a also by another indicator called specific airport for which alterna- the entropy (H) index, which cal- tive routes are offered by other culates (also in terms of ASK or airports close to that considered, seats) if the share of the airport for neighboring destinations or on offer is equally divided between similar routes. all airlines present.

INDIRECT COMPETITION AT MILAN MALPENSA

2014 2015 2016 No. neighboring airports 3 3 3 No. routes in indirect competition 100 76 83 Competitor ASK /ASK in competition 1.43 1.52 1.41

Source: ICCSAI Fact Book

Within Europe, the London area have indirect alternatives. from other airports in the area contains a high number of active such as Linate and Orio al Serio. airports, therefore in indirect Indirect competition is signifi- competition. cant also in the Lombardy region Malpensa airport placed third, close to Milan. From Malpensa, after London Heathrow and Gat- Nearly all departing European over 93% of European destination wick airports, in terms of intensity routes from Gatwick or Heathrow routes are open to competition of indirect competition. The ratio

Consolidated Non-Financial Statement 2017 • 32 MARKET OVERVIEW

between the alternative offer vol- the Province of Varese to the the airport itself. ume of the competing regional Province of Bergamo), the prov- airports (including Linate) and the inces of Eastern Piedmont (Ver- No study or analysis has shown offer of the airport concerning bano-Cusio-Ossola, Novara and any solid correlation between any the routes subject to competition Vercelli) and Canton Ticino; characteristics of rail service to is greater than one. ◼◼ connections with other medi- the airport and market share in um and large cities located at airport ground transport. In fact, larger distances but served by an airport's user base is so varied Accessibility to current modes of transport (particu- in terms of travel preferences and and future airports larly high-speed rail) that offer needs that it is impossible to de- travel times of less than two velop a single optimal model to From the standpoint of the de- hours. In the case of Malpen- be replicated and scaled to suit all mand for transport generated by sa, such cities include above contexts. airport catchment areas, the or- all Turin and lower Piedmont der of priority for airport ground (Alessandria and Astia), as well Some correlations may be identi- access is: as Genoa, Emilia (from Piacenza fied between the type of trip and to Bologna), Florence, Eastern traveler and a preference for rail ◼◼ connections with the major Lombardy (Brescia) and west- as the mode of ground transport, local city, which accounts for ern Veneto (Verona). with the preference for public most transport demand (in this transport increasing the longer case, the city of Milan); Modes of passenger ground the trip and in cases where the ◼◼ connections with the metro- transport to Milan airports travelers are non-residents. How- politan area surrounding the The airports are connected to ever, it is not possible to establish major local city or the “narrow” their catchment area by various unequivocal, solid correlations catchment area (within 60 min- modes of transport. between availability of service, utes from the airport). In the travel time, cost, frequency, com- case of Milan airports, this area There is no single optimal model fort and reliability of service and corresponds to greater Milan, for all situations, but rather var- the success of the mode of trans- the region to the south-west of ious models that are suited, case port, although these factors are Milan that extends to Piacenza, by case, to the characteristics of undoubtedly crucial to the choice the most developed portion of the infrastructure network, the of mode. the foothills (stretching from network of existing services and

MODE OF GROUND TRANSPORT USED BY PASSENGERS TO REACH MILAN AIRPORTS (%)

Airport system Malpensa T1 Malpensa T2 Linate TRANSPORT MODE 2017 2016 ∆ 2017 2016 ∆ 2017 2016 ∆ 2017 2016 ∆ Public road transport 20 24 -4 13 11 +2 16 20 -4 32 48 -16 Private road transport 68 64 +4 68 70 -2 69 67 +2 67 52 +13 Public rail transport 11 12 -1 18 18 = 14 13 +1 - - - Other 1 - +1 1 1 = 1 - +1 1 - +1 Sample 4,981 4,487 2,423 2,321 1,124 1,010 1,434 1,156

Source: Prepared using Doxa data - 2017 SEA passenger profile

Consolidated Non-Financial Statement 2017 • 33 MARKET OVERVIEW

In 2017 the use of public transport local area and connecting to the that Milan is no longer the main options by passengers to reach national motorway system. center of attraction, through our airports declined for both which all flows to and from any road (down four points system- Public transport options serving other destination must inevitably wide, with a peak of -16 for Linate, the airport include both a bus line be routed. whereas Malpensa Terminal 1 ran and a shuttle bus service from the counter to the trend, showing an Central Station. The user base for Linate Airport can also benefit increase of two points) and rail Linate airport primarily consists of from this network scheme be- (down one-point systemwide). the entire central portion of the cause a significant quota of "pass- Private road transport increased region of Lombardy. ing" traffic, currently concentrat- by four points systemwide, by 13 ed in Milan, would use these new points for Linate and by two for This area is characterized by sig- routes, thereby reducing the con- Malpensa Terminal 2. nificant road congestion due to gestion that Milan’s road system the central role played by Milan suffers from now. Additional ca- Current and future accessibility in the regional economic system. pacity would be released on the of Linate airport Accordingly, various efforts to current road system, improving Linate airport is currently accessi- develop and enhance the existing the level of service on the access ble solely via road, from both the infrastructure system have been routes to the city center in addi- city center and outlying areas, planned. The key characteristic tion to access to the immediate through the Milan ring road sys- of both the road and rail ground and surrounding areas (particular- tem - the foundation for all major transport systems that emerges ly Linate). road infrastructure serving the from a review of the projects is

DEVELOPMENTS ENVISAGED FOR ROAD ACCESSIBILITY FOR MILAN LINATE

ROAD SEGMENT DESCRIPTION OF THE WORKS SP14 Rivoltana & SP415 Paullese Developments & upgrades. SP160 & SP15b link road Developments & upgrades. San Bovio-Longhignana section Development of SP15b & SP160. Pedemontana Lombarda Motorway Piedmont completion. IPB Pedemontana- BreBeMi inter-connection. Completion Direction Cassanese Bis. In the absence of an adequate connec- Cassanese Bis tion between the Cassanese Bis and the SP14 Rivoltana, this action shall have little impact in improving Linate’s accessibility.

Source: Pwc, 2017

Works are currently underway to the airport structure into the ur- indeed, the prerequisites for an connect Linate with Milan’s metro ban fabric. objectively successful airport rail system (the M4 line) and include link service. the construction of a station di- Such features of Milan’s urban rectly linked to the passenger Ter- transport system (an efficient minal. Metro line, a loop metro-style rail system linked both to the high- This work will further improve the speed network and the regional quality of the services offered by railway networks, an efficient and the airport, whilst at the same broad overground public trans- time improving the integration of port system) will ensure, and are,

Consolidated Non-Financial Statement 2017 • 34 MARKET OVERVIEW

DEVELOPMENTS ENVISAGED FOR RAIL ACCESSIBILITY FOR MILAN LINATE

Section Description of the works Start-up in 2022 forecast for Milan The line will extend across the city for approx. 15 KM from west to east, opti- metro line 4 (San Cristoforo FS-Linate) mizing not only the airport connection but, more generally, also that with the or “Blue Line” entire metro and urban rail system.

Source: Pwc, 2017

Current and future accessibility Malpensa Airport. Private vehicles stems: airport bus services, taxis, of Malpensa airport use two existing motorways (the NCC (chauffeured car-hire), and Malpensa is indeed 50 km from A8 and A4, the latter connected car-sharing options (e-Vai). the center of Milan. All the main through the Malpensa-Boffalora European airports are located at motorway segment) with another In the coming years extensive an average distance of between under construction (Pedemonta- infrastructural investments are 10 to 20 km from their city center na). Other private transport sy- scheduled for the Lombardy rail of reference, with rare exceptions stems include hotel shuttles or network, whose conclusion should such as Munich (36 km), Oslo (50 tourist coaches. The road system have a positive impact on the qua- km) and Rome Fiumicino (23 Km). is used by a plethora of both col- lity of connections with the Milan Road access is currently the most lective public transport systems airports, both in terms of journey prominent system for access to as well as individual transport sy- time reduction and ease of access.

DEVELOPMENTS ENVISAGED FOR ROAD ACCESSIBILITY FOR MILAN MALPENSA

Road segment Description of the works A southward extension of the SS 336 section, beyond the Magenta link road to the A4 Milan- Turin motorway, towards the Tangenziale Ovest (West Ring Road) with branching to Vigevano. A4 The final plan for this link was recently approved and involves 17.6 KM of road works, which come under the overall improvement and development plans for road links to Malpensa Airport. A link road at Gallarate between the A8 motorway and the national SS 336. By-pass to the Sempione SS 33 between Rho and Gallarate. Inversion of the Lainate toll booth. A8 Full upgrade of the motorway entry slip roads with subsequent closure of the current Lainate and Arese entry slip roads. Construction of an underpass at the junction between the A8 and A9, North of Lainate. Creation of a fourth laneway on the A1 Motorway on the road segment between Milano Sud A1 (South Milan) (at the interconnection with the A50 Tangenziale Ovest) (West Ring-Road) and the Lodi slip road. Motorway Development of the existing Rho-Monza road link at the A8 (Baranzate)-A52 Milan-Rho-Monza (Paderno, Dugnano) segment, with the construction of a two-lane roadway in both directions, North Ring Road plus emergency hard shoulders and a parallel road for local traffic. SS 341 By-pass to the SS 341 from the A8 to Vanzaghello. Bridge over the Ticino A bridge over the river Ticino, currently under construction; These works are the closest to the city of Milan itself and serve to connect the BreBeMi Lambrate slip road motorway with it.

Source: PWC, 2017

Consolidated Non-Financial Statement 2017 • 35 MARKET OVERVIEW

With regard to the quality and signed specifically for an airport rable European airports: Elefthe- quantity of rail links, the “fire pow- service, with good services and rios (Athens), Stansted (London), er” solution expressed by Trenord high levels of comfort. With the Arlanda (Stockholm), Gardermoen in its proposal to connect central introduction in 2016 of the Termi- (Oslo), Franz Josef Strauss (Mu- Milan and Malpensa airport is un- nal 1 and Terminal 2 link, rail access nich) and Leonardo da Vinci (Rome doubtedly significant. This would to Malpensa drastically improved, Fiumicino). entail 129 daily trips delivering, thus significantly increasing the on an average hourly service over potential user base, resulting in rail These airports are comparable in a 20-hour period, a train service services becoming more cost-ef- terms of: every 18 to 19 minutes in both fective than any other means of directions. The minimum journey transport to access T2, despite an ◼◼ volume of passenger traffic time (29 minutes) is wholly ade- extensive amount of negative ex- ◼◼ distance between the airport quate and competitive in terms of ternalities, and it now transports and its reference city. international standards (the center over 6 million passengers per an- of Munich has two different airport num. link services respectively taking 43 and 53 minutes). All the routes will Road access to Malpensa was com- operate with new rolling stock de- pared with a selection of compa-

SURFACE ACCESSIBILITY - DEFINITION OF THE BENCHMARK PANEL FOR MILAN MALPENSA

Airport City Distance from city [km] Passengers year (2016) Milan Malpensa Milan 52 19,311,600 Eleftherios Athens 41 20,016,998 Stansted London 57 24,317,100 Arlanda Stockholm 41 24,700,000 Gardermoen Oslo 50 25,800,000 Franz Josef Strauss Munich 36 42,278,000 Rome Fiumicino Rome 23 41,575,280

Surce: Pwc, 2017

Consolidated Non-Financial Statement 2017 • 36 MARKET OVERVIEW

SURFACE ACCESSIBILITY - BENCHMARK BETWEEN MALPENSA AND SELECTED EUROPEAN AIRPORTS

Suburban Express Airport Regional train Scheduled bus Bus TPL Metro Car train train

Trenord S.A.C.O. Air coach Milan (Malpensa (from Motorway Malpensa Express) - Gallarate - 45’/55’ Terravision (Milan) Every day & Somma All 8 € Cost of 13 € Lombardo)

Bus Metro Suburban (X95S Line 3 Eleftherios rail service - - - - line), Every 30’ 35’-45’ (Athens) hourly Every 15’ Cost of Cost of 10 € Cost of 6 € 10 €

Stansted National Express Stansted Express - - Every 20’-30’ - - 55’-70’ (London) Every 15’ Cost of € 11.4-12.5 Cost of 18.9 €

Pendeltag Arlanda Arlanda SL, every 30’ Express - - - - 35’-50’ (Stockholm) Cost of 17 € Every 19-20’ Cost of 30 €

NSB - Norwegian AV Flytoget State Railways, SAS Flybussen Airport with 2 trains Flybussekspressen Gardermoen Express per hour - Every 30’ Cost of 17 € - - 40’-50’ (Oslo) Train System Mon-Sat. and every 10’ -20’ OSL Ekspressen 1 hourly train Cost of 19 € Hourly Cost of 24 € Sundays. Cost of 10 €

S1 and S8 S-Bahn Lines Flixbus Cost of 5 € Franz Josef connecting Strauss the airport Lufthansa (Munich 30’-40’ Airport with the central station) (Munich) center of Journey time 45’ Munich, Frequency: 15’ every 10’

Terravision and Atral from Rome Termini Direct Regional train Schiaffini Travel, SIT Leonardo connecting the Bus Shuttle from the Express airport with Vatican and Rome the Stations train Rome Termini of Trastevere, (frequency: Fiumicino 35’-40’ Ostiense, 30’ Cost of Cotral from Rome (Rome) Tuscolana 14 € Termini, Rome Tiburtina, Cornelia and Tiburtina, Frecciargento and Magliana Frequency: 15’ Trieste- Cost of 8 € Fiumicino T.A.M. Bus from Rome Ostiense and Termini Source: Pwc, 2017

Consolidated Non-Financial Statement 2017 • 37 MARKET OVERVIEW

The only other case in Europe with of including core airports such as ment of Malpensa as two priority a highly successful rail-to-airport Malpensa into the system of pri- goals. transport system approximately ority transport corridors is high- 50 km from the city center is Oslo, lighted, as well as from a national When implemented, the target with its high-speed express ser- planning point of view, where the is to capture a 30% market share vice (up to 210 km/h, at times 250 Malpensa Airports in the National of the rail services across all the km/h), and high-frequency trains Plan are indicated as strategic in- transport systems accessing the (a train every 10 minutes, with trip tercontinental gateways. terminal, thereby doubling the times of 19 to 22 minutes). current quota and promoting Even at a regional level, both the extension of the Malpensa The development of rail access to the Regional Development Pro- catchment area. This is based on Malpensa is considered a priori- gramme (PRS) of the 2013 10th a clear perception of Malpensa as ty both from a planning point of Legislature and the 2016 Region- the access gate to an extensive view, as shown in the Connecting al Mobility and Transport Pro- geographic area, which for inter- Europe Facility programme and gramme (PRMT) identified the continental travelers includes the detailed in the EU regulation No. development of the railway infra- whole of the north of Italy. 1315 of 2013, where the priority structures as well as the develop-

DEVELOPMENTS ENVISAGED FOR RAIL ACCESSIBILITY FOR MILAN MALPENSA

Section Description of the works Saronno-Seregno Line Electrification of a section of the FNM line between Saronno and Seregno. Quadrupling of the Rho-Parabiago section and tripling until Gallarate. The works will directly connect two of the Lombardy economic system’s most RHO-Gallarate Line significant points: the new Rho-Pero Events center and Milan Malpensa airport. Development of the section between Parabiago and Gallarate, with the quadrupling of the line, will follow. Double track connection between Milan Malpensa and RFI’s Gallarate-Varese Milan Malpensa Terminal 2-Gallarate Line. The definitive project will be completed and delivered to the Lombardy connection Region at the beginning of 2018.

Source: Pwc, 2017

Consolidated Non-Financial Statement 2017 • 38 Our Governance OUR GOVERNANCE

Our Governance

tant decisions for the company Board of Directors Corporate - appointing the Board of Di- Governance rectors, approving the financial The Board of Directors of SEA statements and amending the is composed of 7 executive and The Corporate Governance struc- By-Laws; non-executive members. The ture is voluntarily based (as SEA is ◼◼ The Board of Directors, which Board of Directors in office at De- operates through the executive not a listed company) on the rec- cember 31, 2017 was appointed directors and directors with ommendations and principles of by the Shareholders’ Meeting of representative powers. A Con- the “Self-Governance Code for list- May 4, 2016, for 3 years until the trol and Risks Committee and ed companies” of Borsa Italiana. approval of the Annual Accounts a Remuneration and Appoint- at December 31, 2018. SEA Corporate Governance struc- ments Committee have also ture is based on a traditional mod- been set up within the Board; The Company is not subject to par- el and is comprised of the follow- ◼◼ The Board of Statutory Audi- ticular rules in terms of the coming bodies: tors. position of the Board of Directors in relation to minority sharehold- ◼◼ The Shareholders’ Meeting, The structure of powers and duties ers or the number of independent which represents the interests complete the Governance struc- directors. of all shareholders and with a ture. duty to take the most impor- The Board of Directors of SEA has established the remuneration of the Chairman, the Vice Chairman and the other Directors on the basis of that agreed by the appointing Shareholders’ Meeting. The remuneration of the Board of Directors in 2017 was Euro 529 thousand.

The Board of Directors plays a central role within the company’s organization.

The Board is responsible for the strategic and organizational choices undertaken and exercises, within the corporate scope, all powers which by law or through the By- Laws are not expressly reserved to the Shareholders’ Meeting and therefore carries out the ordinary and extraordinary administration of the Company.

Consolidated Non-Financial Statement 2017 • 40 OUR GOVERNANCE

STRUCTURE OF SEA’S BOARD OF DIRECTORS AND COMMITTEES 2017

Remuner- Control ation and Ethics Board of Directors and Risks Appoint- Indep. Age group Comm. Comm. ments Committee Office Members Executive Non-Exec. * * * 30-50 >50 Modiano Chairman X X Pietro Brunini Vice Chairman X X X X Armando Bragantini Director X X X X X Salvatore Castelli Director X X X X Michaela Mion Director X X X Stefano Stefani Director X X X X Susanna Zucchelli Director X X X X Susanna

* Membership of the Board member on the Committee.

The Board monitors the general Internal Committees to operating performance, particularly in relation to conflicts of in- the Board of Directors terest, paying specific attention The Board of Directors of SEA, in to information received from the line with the recommendations of Chairman and from the SEA Con- the Self-Governance Code, has in- trol and Risks Committee, in addi- ternally set up through resolutions tion to periodically reviewing re- additional committees comprised sults in comparison with forecasts. of non-executive independent directors, with proposal and consul- In addition, the Board of Direc- tation functions and has set the tors examines and approves the number of members and relative operations of strategic, econom- duties. These committees regular- ic, equity or financial significance, ly carry out their duties through the strategic, industrial and finan- meetings, with minutes prepared cial plans of the company and the and maintained by the Company. group in general, the corporate governance system and the group structure.

Consolidated Non-Financial Statement 2017 • 41 OUR GOVERNANCE

MEETINGS HELD BY THE BOARD OF DIRECTORS AND THE COMMITTEES IN 2017

Control and Risks Remuneration and Ethics Board of Directors Committee Appointments Committee Committee 13 7 7 4

For the discharge of their duties, Board of Statutory shareholders with holdings of at the committees may access the least 20%. Auditors information and company departments necessary. The statutory auditors are appoin- The Board of Statutory Auditors ted for a period of three years (and comprises 5 Statutory Auditors may be re-elected), which expires The committees may in addition and 2 Alternate Auditors. Two on the date of the Shareholders’ utilize external consultants, within statutory auditors are included Meeting called for the approval of the budget limits approved by the by law: one of which as Chairman the financial statements relating Board. The Board of Directors has of the Board appointed by the to the final year in office. set up: Treasury Ministry and the other by the Ministry for Infrastructure ◼◼ the Ethics Committee, chaired by and Transport. The appointment a non-Executive Director; of the remaining three statutory ◼◼ the Remuneration and Appoint- auditors and the two alternate ments Committee; auditors takes place through the ◼◼ the Control and Risks Committee. slate voting system, presented by

SEA BOARD OF STATUTORY AUDITORS STRUCTURE 2017

Board of Statutory Auditors Office Members In office from In office until Chairperson Cotroneo Rosalba 16/11/2016 Approval 2018 Accs. Statutory Auditor Galli Andrea 24/06/2013 Approval 2018 Accs. Statutory Auditor Giovanelli Paolo 24/06/2013 Approval 2018 Accs. Statutory Auditor Casiraghi Rosalba 04/05/2016 Approval 2018 Accs. Statutory Auditor Sarubbi Giacinto Gaetano 04/05/2016 Approval 2018 Accs. Alternate Auditor Cioccarelli Andrea 24/06/2013 Approval 2018 Accs. Alternate Auditor Allievi Anna Maria 04/05/2016 Approval 2018 Accs.

In 2017 the total remuneration of the Board of Statutory Auditors was Euro 290 thousand.

Consolidated Non-Financial Statement 2017 • 42 OUR GOVERNANCE

Systems of powers and regarding the implementation of tencies are centralized under the delegated powers and thus in- the Chief Operating Officer. duties formed of developments and key company operations. These SEA Chief Officers “delegat- The most senior managerial re- ed” to manage their own relevant sponsibility within the Company This system is based on a clear and area regularly partake in Board falls to the Chief Corporate Officer formalized internal structure, sub- meetings to provide background (CCO), the Chief Executive Officer information or more in-depth in- (CEO) and the Chief Financial and divided into distinctive units, each formation on the discussions ta- Risk Officer (CFRO), according to one with a specifically identified bled. the duties conferred by the Board and respective line of hierarchical of Directors. subordination, roles and responsibilities. SEA Board of Directors, in fact, Remuneration of did not appoint a Chief Executive This organizational structure re- management Officer but instead conferred quires the structuring of respon- powers on the Company's Chief sibilities that will enhance compe- SEA’s remuneration policy reflects Officers to manage - within deter- tencies, whilst at the same time its position as a service-based mined limits - the Company's ordi- allowing for checks and balances company focused on operating nary activities, implementing the such as: performance excellence and the directives dictated by the admin- quality of the service provided to istrative body. The Board of Direc- ◼◼ the Auditing Department re- customers, in order to aligning the tors furthermore conferred on the porting to the Chairman whilst corporate interest with the objec- Chairman the power to oversee functionally subordinate to the tive of creating value for share- the work delegated to the Chief Board of Directors and to the holders. Officers, reporting to the Board Control and Risk Committee; of Directors upon the tasks as- ◼◼ staffing structures are embod- The policy seeks to attract, moti- signed to them. Each Chief Officer ied in the Chief Corporate Of- vate and retain highly qualified in his/her turn partially sub-dele- ficer, along with the Purchasing and skilled individuals, capable of gates some of their own delegat- Department and broken down achieving the Groups’ objectives: ed powers. This power delegation according to the main corpo- system ensures that the Board of rate cost centers; The variable incentive system Directors are constantly updated ◼◼ business development compe- (MBO) for Group Management

Consolidated Non-Financial Statement 2017 • 43 OUR GOVERNANCE

is in line with the Industrial Plan Control Model" in line with the with the prerequisites of independ- and seeks to further its achieve- provisions of Legislative Decree ence and autonomy, profession- ment. The variable remuneration 231/2001, taking into account the alism and continuity in its actions component recognizes the results Guidelines published by Confind- and is invested with the powers achieved, drawing a correlation ustria for the proper and transpar- to initiate and to control, as well between performance and remu- ent conduct of business. as availing of sufficient financial neration. resources to carry out its actions. This Organizational and Man- It provides periodic information The annual objectives are pre-set agement Model was modified flows for the Board of Directors on by the budget approved by the to integrate the new offences the effectiveness, suitability and Board of Directors and allocated introduced under the Decree of continuation of the Model. to the positions in relation to the September 2017, and incorpo- result and responsibility areas of rates the principles adopted, in With the aim of supervising the each role. addition to the work carried out implementation of the Model a by SEA, to prevent offences under dedicated "whistle-blower" mech- Group profitability is the principal Legislative Decree 231/2001, as anism was set up for employees, objective of Management, shared well as to avoid cases of adminis- the corporate boards and third at all levels and is the condition trative and penal criminal respon- parties to report - anonymously if upon which the individual bonus is sibility of natural persons under necessary - illicit behaviors or sce- based. Performance is measured this Decree. narios to the Supervisory Board, on, in addition to the economic-fi- even where there is simply a po- nancial topics, also the reaching of The Supervisory Board is allo- tential risk of carrying out illicit objectives in terms of operating cated the role of overseeing the actions. excellence and customer service function and compliance with the level indicators. Model, ensuring it is up to date. It The components of the SEA’s is appointed by the Board of Di- 231/2001 Model are: rectors and comprises 4 members ◼◼ the Code of Conduct; Internal control system (a Non-executive Director, two in- ◼◼ risk mapping; dependent external members and ◼◼ the corporate organizational SEA’s internal control system com- the Auditing Manager). system; prises of regulations, procedures, ◼◼ the corporate procedural sys- and organizational structure The Supervisory Board complies tem; aimed at monitoring:

◼◼ the efficiency and effectiveness of the business processes; ◼◼ the reliability of financial disclosure; ◼◼ compliance with law, regulations, the By-laws and internal procedures; ◼◼ the safeguarding of the company’s assets.

Particular attention is reserved in addition to the Organizational and Management Model as per Legis- lative Decree 231/2001 adopted.

Organization and management model as per Legislative Decree 231/01 In 2003, SEA adopted an "Or- ganizational, Management and

Consolidated Non-Financial Statement 2017 • 44 OUR GOVERNANCE

◼◼ the system of authority and sig- of stakeholders (particularly, sup- ◼◼ the publication of the Model’s natory powers; pliers and main trading partners), General Section (XI Edition) and ◼◼ the operating control system; which are required to comply with Special Section (VIII edition) on ◼◼ the reward and sanction system; certain rules of conduct set out in the company intranet; ◼◼ communication and employee the Code of Conduct and formal- ◼◼ the provision of the updated training; ized through specific provisions in Model to employees (manag- ◼◼ the company IT system; the relevant contracts. ers, employees and workers) in ◼◼ the corporate governance sys- the “Communications” section tem; The Code of Conduct’s rules are of the "Online Payslip" available ◼◼ the control activities. an essential part of the contrac- on the company intranet; tual obligations of the company’s ◼◼ the updating of information SEA Supervisory Board met 9 management, employees and relating to the Model’s various times in 2017; minutes were collaborators. Therefore, conduct components on the company drawn up for each meeting. SEA’s that is in violation of the rules con- intranet; Organization and Management stitutes an infringement of the ◼◼ the updating of information on Model includes offences relating diligence obligation required by Legislative Decree 231/2001, to occupational health and safe- the applicable National Collective the Model and F.A.Q.s on the ty, the environment, the violation Labor Agreement (CCNL). company intranet; of human rights and associated ◼◼ the provision of the Code of preventive measures taken by the For other stakeholders, compli- Conduct and the Organization company. ance with the provisions of the and Management Model in the Code of Conduct is a prerequisite dedicated intranet section for The Group companies SEA Ener- for establishing and/or continuing newly-recruited employees. gia and SEA Prime also adopted the relationship with SEA. their own Organization and Man- In 2017, information and training agement Model pursuant to Leg- SEA has set up an Ethics Commit- on Legislative Decree 231/2001 islative Decree No. 231/2001 and tee that is designated to ensure and the SEA Model was structured appointed their own Supervisory the Code of Conduct’s dissemi- as follows15: Board. The Supervisory Boards of nation, compliance, correct inter- SEA and its subsidiaries, SEA En- pretation and updating. The Com- ◼◼ continuation of training by ergia and SEA Prime, perform au- mittee is composed of a director e-learning for SEA employees, dits, including through the Audit- representing the company’s which also contains specific in- ing Department, on the suitability Board of Directors (who assumes formation on the prevention and effectiveness of prevention the Committee’s chairmanship) of corruption (conduct to be protocols adopted by the compa- and the managers of the "Human adopted/reports to be made) ny to prevent such offences. Resources and Organization", "Legal and Corporate Affairs" and includes a final test upon Code of Conduct and Ethics and "Auditing" departments. The understanding; in the 2015- Committee Ethics Committee met 4 times in 2017 three-year period, SEA’s The Code of Conduct - a compo- 2017 to discuss the dissemination training process, which began nent of the Organization, Manage- and implementation status of the in 2014, involved 2,060 employment and Control Model as per Code of Conduct and to examine ees who work in both airports Legislative Decree 231/2001 - is a reports received. and belong to the categories self-regulation tool, first adopted of managers, white-collars and in April 2000. The Code identifies The dissemination and publication blue-collars (687 in 2015, 1,056 the values and rules of conduct of the Organization and Manage- in 2016 and 317 in 2017); that SEA intends to embrace in ment Model, pursuant to Legis- ◼◼ training on the Decree and its activities and which must be lative Decree 231/2001, and the on the Organization and Man- followed by the members of the Code of Conduct continued in agement Model by an internal corporate boards, employees and 2017 through the following initi- member of the Supervisory collaborators linked to SEA and its atives: Board for 5 newly-appointed Group companies by employment SEA executives and for staff contracts of any nature (includ- ◼◼ the publication of the Model’s ing occasional or temporary), as General Section (XI Edition) on 15 Note: The training information presented well as other specific categories the company website; here refers only to SEA.

Consolidated Non-Financial Statement 2017 • 45 OUR GOVERNANCE

who cover roles that are consid- Legislative Decree 231/2001 SEA also requires its "Business ered sensitive for the Model’s that also includes corruption Partners" to comply with appli- implementation; offences. cable Laws, including Legislative ◼◼ information on the Model and Decree 231/2001, the Code of on Legislative Decree. 231/2001 In the performance of their ac- Conduct and the Organization and in compulsory courses (issue/ tivities, SEA staff adheres to the Management Model as per Legis- renewal of the Airport pass and principles of transparency, clarity, lative Decree 231/2001 - General training on occupational health correctness, integrity and fairness. Section, on the basis of clauses and safety in compliance with whose non-compliance will result Legislative Decree 81/08). In particular, behaviors and prac- in the contract’s rescission. tices that may also only appear Anti-Corruption Policy illegal or collusive, payments that SEA considers reporting as an ef- SEA, aware of the adverse effects may seem to be unlawful, at- fective tool to counteract corrup- of corrupt practices on economic tempts at bribery and favoritism, tion and encourages the reporting and social development within its direct or indirect solicitation for of suspected corruption through operating scope, is committed to personal and career advantag- dedicated "whistleblowing" chan- prevent and counteract the oc- es for oneself or for others and, nels. currence of offences in the - per more generally, acts that violate formance of its activities. For SEA, applicable laws and regulations Anti-Corruption Management the prevention of corrupt prac- in relationships and business rela- System tices, in addition to being a legal tions, are prohibited. An analysis of company process- obligation, represents one of the es was carried out as part of the principles which marks how the SEA proposes to apply correct- activities relating to the 231/01 company acts, also in view of the ness, fairness, integrity, loyalty and Model in order to identify the risks strategic importance of the sec- professional rigor to operations, linked to corruption. 34 audits tor in which it operates and the behaviors and the way of working were also carried out (19 of which importance of the legal and social both in internal relations and in at SEA SpA, 9 at the subsidiary framework in which its business is relations with external parties, by SEA Prime and 6 at the subsidiary rooted. The corruption prevention giving the utmost attention to full SEA Energia) - which also focused policy is expressed through a pro- compliance with the law, in addi- on the auditing of processes with cess which SEA has already adopt- tion to the observance of compa- a potential risk of corruption and ed through: ny procedures. A focus on ethics the suitability and effectiveness of (transparency, loyalty and honesty associated procedures. No critical ◼◼ the Ethical system whose com- in the behavior toward external issues emerged. ponents - Ethical Vision, Dia- and internal parties) is an indis- mond of Values and the Prin- pensable approach for credibility The certification process for the ciples of Relationships with in SEA’s conduct toward share- “Management System for the Pre- Stakeholders - have the nature holders/investors, customers and, vention of Corruption” in accord- of strategic policies and are more generally, the entire civil and ance with UNI ISO 37001:2016 “An- designed to identify the deci- economic context in which they tibribery Management Systems” sion-making values and princi- operate, in order to transform the commenced in 2017. This is part ples which the company aspires knowledge and appreciation of of the integration and compen- to and undertakes to consist- the values that widely inspire the dium of prevention tools already ently preserve in pursuing its company’s mode of operation into implemented under the Model of mission; competitive advantage. Legislative Decree 231/01, in line ◼◼ the Code of Conduct that de- with the principle of "zero toler- fines the principles and rules Those who work in the name and ance" toward corruption. of conduct which must inspire on behalf of SEA are aware that the work of the company, its they are resorting to punishable The implementation of a specific employees and collaborators, offences, in the event of corrupt anti-corruption training activity is members of its corporate behavior and violation of the Law planned for all SEA executives in boards and, more generally, its on corruption - on the criminal lev- the first half of 2018 under SEA’s stakeholders; el, the administrative level and the "Management System for the Pre- ◼◼ the Organization and Man- disciplinary level (in accordance vention of Corruption". agement Model pursuant to with the provisions of the CCNL).

Consolidated Non-Financial Statement 2017 • 46 OUR GOVERNANCE

Anti-Corruption Focal Point Compliance with laws and With effect from January 31, regulations 2014, the company identified Regulatory compliance is ensured an anti-corruption focal point in by the various corporate functions the person of the Legal & Corpo- within their sphere of compe- rate Affairs Director who is also a tence, with the support of special- member of the Ethics Committee. ist assistance from the Legal and Corporate Affairs Department. The anti-corruption focal point deals with any communication on In 2017, no pending actions were corruption, including toward third registered in relation to compe- parties; the role, prerogatives and tition and antitrust, nor were any responsibilities are therefore not significant penalties recorded for comparable with those provided non-compliance with laws or reg- for by applicable legislation in re- ulations, or for defaulting on envi- lation to the Anti-Corruption Man- ronmental and social obligations. ager (namely, the person in charge Moreover, no corruption cases pursuant to Law 190/2012). were confirmed during the year.

Consolidated Non-Financial Statement 2017 • 47 Integrating sustainability into the business INTEGRATING SUSTAINABILITY INTO THE BUSINESS

Integrating sustainability into the business

nancial objectives with the Socio-economic Sustainable quality of the connectivity offer ecosystem development delivered to the region, due to the public interest role under- In our role as managers of pub- governance pinning the role we carry out; lic transport infrastructure, we ◼◼ careful systematic analyses and are committed to acquiring in a We pursue a strategy of creating assessments of both strategic planned and structured manner, value, protecting shareholders’ re- and operational risks; and correctly evaluating and in- turn on capital, based on the fol- ◼◼ availability to discuss with cluding in the decision-making lowing principles: stakeholders the definition and process, the interests and expec- the implementation of our de- tations which concern our stake- ◼◼ prioritizing choices that help velopment plans, whilst seek- holders. grow the Company’s value in ing to create widespread ben- the medium to long term; efits and minimizing negative ◼◼ constantly striving to align fi- externalities.

Consolidated Non-Financial Statement 2017 • 49 INTEGRATING SUSTAINABILITY INTO THE BUSINESS

MAP OF SEA GROUP LEVEL 1 STAKEHOLDERS

INSTITUTIONAL SYSTEM FOR PLANNING, REGULATION MILAN AIRPORT SYSTEM SOCIO-ECONOMIC SYSTEM AND CONTROL

MINISTRY FOR AIRPORT LOCAL COMMUNITIES INFRASTRUCTURE COMMISSION ◼◼ Residents exposed to noise emissions Airport sector planning Noise zoning and ◼◼ Residents exposed to and development anti-noise procedures reduction of quality/use Airport traffic distribution of natural capital (air, soil, measures biodiversity, etc.) MUNICIPALITY F2i Noise emissions OF MILAN Consumption of soil & ENAV natural resources Definition air routes

Goods and ENTERPRISES OF THE Controlling Minority services ENAC shareholder shareholder SUPPLY CHAIN

Economic regulation Safety/security regulation ENVIRONMENTAL AUTHORITIES, ENTITIES & ORGANISATIONS ◼◼ Management ASSOCLEARANCE ◼◼ Personnel Prevention and control of environmental impact Allocation slots to airlines TRADE UNIONS

LOCAL ADMINISTRATIVE BODIES UE Impact on administrative Directives/Regulations Aviation and Use of spaces, services non-aviation services and revenues infrastructure

LOMBARDY MULTINATIONALS, TOURISM REGION EXPORT AND TRADE ORIENTED Transport and infrastructure SECTOR BUSINESSES regulation and AIRPORT OPERATORS development measures (AIRLINES, HANDLERS RETAILERS, LOGISTICS OPERATORS AND CONCESSION HOLDERS) SCHOOLS, UNIVERSITIES, STATE BODIES RESEARCH CENTERS MINISTRY FOR ENVIRONMENT Human capital training ◼◼ Knowledge sharing Provisions to reduce Quality of Tax and local environmental impacts/ airport services employment benefits ◼◼ Authorisations Airport accessibility ◼◼ Direct air Catalytic occupation and connectivity production value Europe and Mobility on global scale globally of goods and persons

PASSENGERS CARGO COMPETITORS ◼◼ Airline Passengers short/ ◼◼ Cargo airlines ◼◼ Airports of Northern Italy medium distance incoming/ ◼◼ Cargo handlers ◼◼ AV trains outgoing ◼◼ Logistics operators ◼◼ European hubs ◼◼ Flight passengers long-haul ◼◼ Manufacturing enterprises Incoming/outgoing ◼◼ Reduced mobility passengers ◼◼ Extension of network of or affected by other disabilities routes and frequencies ◼◼ Accessibility improvement AIR TRANSPORT MARKET ◼◼ Development of AV rail lines

Consolidated Non-Financial Statement 2017 • 50 INTEGRATING SUSTAINABILITY INTO THE BUSINESS

This is applicable to extension CSR strategy and tors to the main strategic choices works at terminals, in making which significantly impact them. available spaces and services to sustainable governance This objective is the most practi- airport operators and in ensuring model cal response to the serious and the maximum synergy between delicate interdependencies which all airport operators to guaran- Our Corporate Social Responsibil- characterize choices and deci- tee continuous, safe and efficient ity strategy seeks to enhance the sions for Companies such as the flights for passengers. relationships between our organ- SEA - who are required to design, ization and its stakeholders, so realize, develop and manage air- The map indicates our level 1 that the latter, rather than simply port transport infrastructure - and main stakeholders, i.e. those with receiving a share of the value gen- which significantly impact on its whom we develop the most direct erated by the Company, become medium to long-term results. and close relations. real and truly qualified contribu-

SEA SUSTAINABILITY GOVERNANCE MODEL

FIRST LEVEL WHO WE WANT HOW WE WANT TO Alongside the Mission and TO BE DO IT Strategic Planning, the Ethical Vision, Values and Materiality STRATEGIC ◼◼ Mission ◼◼ Ethical vision Matrix outline the managerial FRAMEWORK ◼◼ Industrial Plan ◼◼ Diamond of styles and the strategic CSR values priorities related to the pursuit of ◼◼ Materiality Matrix the business objectives.

SECOND LEVEL HOW WE WORK HOW WE MAKE Together with compliance DECISIONS instruments - both regulatory POLICY ◼◼ Code of Conduct and voluntarily adopted MANAGEMENT ◼◼ Self-Governance ◼◼ Stakeholder management systems - decision- Code of listed Engagement Tools making patterns were introduced companies ◼◼ Corporate related to - and fed by - listening ◼◼ Org. Model as per Citizenship Policy and structured involvement of Leg. Dec. 231 ◼◼ Stakeholder internal and external stakeholder ◼◼ Certified Relation Principles processes. management ◼◼ Family Audit systems

THIRD LEVEL VALUE GENERATED QUALITY OF VALUE In addition to the Financial Report, GENERATED measurement instruments were put in place regarding the quality PERFORMANCE Financial ◼◼ Sustainability of value generated (Sustainability MEASUREMENT Statements Report Report) and the socio-economic ◼◼ Airport Economic impact on the region. Footprint These reports may progressively converge

Consolidated Non-Financial Statement 2017 • 51 INTEGRATING SUSTAINABILITY INTO THE BUSINESS

The SEA Corporate Social Respon- ◼◼ Integrated Decision-making surveys (between 80-20 inter- sibility function was set up in 2011 ◼◼ Stakeholder Engagement views) with corporate stakehold- and directly reports to the CCO ◼◼ Reporting ers subdivided into categories, with the purpose of overseeing ◼◼ Corporate Citizenship. to assess their perception of the the management of stakeholder quality of the relationships with relationships and ensuring that it Integrated Decision-making SEA, to assess SEA's management supports achievement of the busi- We are working on a managerial skills and the direct impact of its ness objectives. mind-set that seeks to emphasize actions on them. In addition to a capacity to contextualize busi- this research, a Multi-Stakeholder The planning and decision-making ness projects and to expand the Workshop was held, a think-tank governance in relation to sustain- array of the variable scenarios tak- to engage with the most repre- able development was assigned en into account. sentative corporate stakeholders from 2012 to the Group Sustain- on relevant projects and topics. ability Committee, as part of the The goals we set are to succeed Steering Process, with the follow- in correctly assessing the conse- The involvement of our internal ing objectives: quences and the impacts of corpo- and external stakeholders was rate decision-making on the quality of particular importance in rela- ◼◼ to analyse the guidelines for of our relations with our stakehold- tion to Company projects such as development and the imple- ers in order to prevent/manage developing our Ethics Code, the mentation and monitoring of any of their potential negative Social Challenge and the Family sustainability policies to be inte- reactions which would impact on Audit. grated into our business model; costs, timeframes and the efficien- ◼◼ to assess the objectives and cy of the business projects. Accountability methods of involving stakehold- Accountability in relation to our ers, by profiling them, in order With the project Developing Sus- strategies, our processes and our to define corporate choices and tainability Culture (2012-2014), impact is not restricted to solely creating a Sustainability Report. their related implementation; we created the prerequisites to define our Sustainability Vision ◼◼ to discuss and participate in and the related articulation of the Our 6-year partnership with the the definition of the reporting business challenges. The project CeRst-LIUC (Centre for territorial model integrated with sustain- involved, amongst other things, research at Cattaneo University) ability performances; interviews with management and sought to measure more precise- ◼◼ to monitor the development of stakeholders, focus groups and ly and reliably the socio-economic the significant corporate -per web discussions with SEA employ- externalities created by our Mal- formance indicators in terms ees and workshops with top and pensa and Linate airports on vari- of sustainability and to propose middle management. ous territorial scales. The goal, on any corrective actions. the one hand, is to define the eco- 2016 and 2017 saw the implemen- nomic role of our airports within The Group Sustainability Commit- tation of the Project "Ongoing the Lombardy and national con- tee, presided by the Chairman, Values"; a change-management text and on the other, to support conducts four-monthly meetings plan based on the implementation optimal methods of engaging in which three Company Chiefs as of corporate values in managerial with the region. well as the Directors of the depart- practices, directly linked to the ments within their scope partake. content of the 2016-2021 Indus- Social Citizenship trial plan. The aim is bringing the In 2012 we developed our Corpo- In 2017 the Group Sustainability Values of our soft assets back to rate Citizenship Policy. Its mission Committee held 2 meetings. their minimum common denom- statement was to define efficient inator (mind-set, decisional dy- and progressive strategic social namics leadership styles), making and organic investment strate- Strategy drivers them fully synergistic and func- gies in sync with the Company's tional with the business strategy. business profile. The social invest- The CSR strategy developed over ments realized in the last six years these last few years is based on Listening and Stakeholder were based on the knowledge four principal operational pillars: engagement that our role as a Company is not Periodically, we carry out sample limited to the optimal manage-

Consolidated Non-Financial Statement 2017 • 52 INTEGRATING SUSTAINABILITY INTO THE BUSINESS

ment of our airports but also en- What is its role? tails the ability to create symbiotic Ethics and Diamond relationships: of Values The substantial revision of both the contents and the role of the Ethics ◼◼ with the region hosting our in- In December 2015, we adopted Code, since 2000, was dictated by frastructures; the Ethics Code approved by the the need to add-on value-based ◼◼ with non-profit associations Board of Directors and which com- content to the pre-established which seek to respond to the prises 3 statements: communities of which we are and prevalently rule-based con- part; tent, based on the Company’s and ◼◼ Code of Conduct; ◼◼ with SEA personnel, not just the stakeholders’ mutual commit- ◼◼ Ethical Vision and Diamond of viewed as employees, but as ments, seeking to guide its target citizens who outside of their Values; audience towards adopting deci- work, see their involvement in ◼◼ Principles of Stakeholder Rela- sion-making criteria and behaviors good causes as an important tionships. based on a self-driven and respon- part of their own personal de- sible implementation of a nucleus velopment. of shared ethical principles.

CLASSIFICATION OF THE ETHICS SYSTEM STATEMENT

Code of conduct Vision, values and principles

NATURE Self Regulation Code Strategic Policy

OBJECTIVE Sets out the conduct rules to ensure Identify the decision-making values and regulatory compliance in the execution of principles which the company aspires to employment, company offices and contracts. and undertakes to consistently preserve in pursuing its mission.

CONTENTS Prohibitions and obligations Factors supporting the creation of value over the long-term: Indicates individual conduct principles: (correctness, integrity, fairness, diligence, ◼◼ they offer baseline patterns for the etc.) decision-making process; ◼◼ they refer more to the “company system” than individuals; ◼◼ they indicate that which the organisation may not reject in its operation.

The Ethics Code seeks to highlight of discretion can be used, guided of costs and benefits across the our entrepreneurship style to our towards delivery models inspired Company and stakeholders (so audience, so that when involved in by the fundamental nucleus of called ethical dilemmas). related decision-making and oper- corporate values, potentially re- ational contexts, a certain degree sulting in the equal distribution

Consolidated Non-Financial Statement 2017 • 53 INTEGRATING SUSTAINABILITY INTO THE BUSINESS

FROM MISSION TO THE ETHICAL VISION

Mission Ethical vision

The mission of the SEA Group is to create value SEA recognises its value creation processes as unique for all parties directly involved in Group activities: and distinctive features: shareholders, customers and employees. ◼◼ their serving of public utility, under the management and development of airport infrastructure which opens up in the world for both passengers and cargo, improving the well-being and prosperity of the region; ◼◼ a focus on innovation as an elective response to the increasing complexity which characterises the management of the business, and that increases Company risks; ◼◼ the constant search for efficiencies, meaning the best use of Company resources and identifying the best conditions to use them.

This is achieved through providing services and In pursuit of this aspect of value generation, SEA solutions which serve the growing demands of the undertakes an approach to managing services market, ranging from passengers to airlines, airport centered on cultivating professional excellence, operators and the commercial partners at Malpensa the consolidation and gradual extension of merit- and Linate airports. The airport infrastructures based criteria in assigning organisation roles and managed by SEA ensure air access to the major responsibilities and in building a team spirit which international destinations for a large number of inspires a cooperative vision and common solutions, users and are located in one of the most developed both within the “company system” and in terms of catchment areas in Europe - providing a key hub for general relations. economic growth in the North Italy region as a whole.

The services provided by the SEA Group are SEA identifies the lynchpins of this business philosophy guaranteed by the management and development as the development of relations, both internal to of secure and cutting-edge infrastructure, placing the organisation and between the organisation and a central focus on the development of the host its stakeholders, based on the concrete exercise of community and environmental protection. respect, transparency and cooperation.

How was this achieved? Diamond of Values ◼◼ They imply the concept of our Company as being “part of a The process of revising and inte- ◼◼ These are the result of the best complex and interdependent grating the Ethics Code was based practices we have deployed system”. on a bottom-up procedure broad- over time and which have sup- ly involving all the Company’s ported our organization in the professional categories as well as various phases of its develop- representing the main stakehold- ment. er categories. This development ◼◼ They are also paradigms capa- work was constantly driven for- ble of creating practices which ward by using listening tools (fo- have not yet or have not been cus groups, web discussions etc.) completely implemented and and structured participation. which require that the Compa- ny engages in change.

Consolidated Non-Financial Statement 2017 • 54 INTEGRATING SUSTAINABILITY INTO THE BUSINESS

DIAMOND OF VALUES

Public utility Efficiency Innovation

Ethics of Value

Team spirit Professional Merit-based Excellence Ethics of Service

Ethics of Relations Transparency Co-operation

Respect

Decision-making and In 2017 the project was micro-ana- the drivers of the industrial plan; lyzed in terms of the relationship ◼◼ 25 in-depth interviews conduct- organizational values between the values and the SEA’s ed with the senior Directors and and processes organizational culture with the the management team related purpose of ensuring that the Eth- to managerial and leadership In 2017, the project “Ongoing Val- ical System was not simply a re- styles used and practiced; ues”, launched the year before, ceptacle of principles but also a ◼◼ an online survey involving 190 continued to promote the dissem- real accelerator of change in our executives and SEA Managers ination, exchange and sharing of managerial mind-set, driving ex- (including some involved in the the new Ethics Code. cellence, which, as outlined in the previous phases) which sought industrial plan 2016-2021, is a dis- to collect a broad range of man- The aim of the project was to tinguishing feature to be consoli- agerial assessments on Compa- launch an organizational and tech- dated in the near future. ny topics such as collaborative nological cultural change to devel- work between functions, dis- op collaborative systems in order For this purpose, we developed 3 semination of information, con- to promote the dissemination, distinctive and structured listen- flict and mistake management. the exchange and the sharing of ing sessions for the management knowledge, to circulate ideas and team: This diagnostic model facilitat- to improve the sense of organi- ed organic and deep discussions zational or corporate belonging, ◼◼ 2 focus groups - this involved 5 on the connections between the stimulating proactive employee company Directors in key Com- Company’s ethical vision, the Di- involvement in the Company's pany roles - to identify contact amond of Values, the industrial day-to-day business. points between the values and plan and the risk model, identify-

Consolidated Non-Financial Statement 2017 • 55 INTEGRATING SUSTAINABILITY INTO THE BUSINESS

ing several possible initiatives to greatly aware that the develop- to build and consolidate these re- sustain and relaunch SEA’s strate- ment of the SEA business model lations, but it also outlines the in- gic focus. also depends on the quality of the herent content of these relations internal and external relationships and expresses the need for con- From the analysis, it emerged it engages in when producing val- tinuous support of a Vision that that SEA is a Company which en- ue and that these relationships takes these into account, or which gages in robust relationships and can concretely sustain continuous codifies and develops the role of inter-dependencies with a broad improvement of efficiencies and the Company as the nerve center system of actors, fundamental for Company performance. of the physical, financial and so- the quality of its real and perceived cio-political market in which it is performance. Even in terms of its In this respect, the SEA manage- embedded. very recent past, the Company is ment team outlines the method

LEVEL OF ALIGNMENT BETWEEN VALUES AND ORGANIZATIONAL PROCESSES

Quality of organizational Quality of manager - collaborator communication Ease of sending information communications between functions

Culture and management Level of interfunctional of breakdowns involment on projects

Adoption of a cooperative Culture and management approach between of errors functions

Propension to Strategic alignment professional updating and of management outside networking

Open to change Quality of internal information on strategies and objectives

Property to adopt merit based criteria Efficacy of organisational model Quality of engagement between managers and collaborators

Very positive Positive Problematic Negative

Source: SEA

Consolidated Non-Financial Statement 2017 • 56 INTEGRATING SUSTAINABILITY INTO THE BUSINESS

Determining the material topics of the Company-stakeholder relationship is not only important solely from a point of view of identifying which topics of value should be included in the sustainability report, but also to establish what are the key areas governing the stakeholder relationship which will deliver long-lasting sustainability in terms of its financial and competitive value to the Company.

To be able to make an assessment relating to the materiality of an element, it is necessary to start from the broadest recognizable range of factors that determine the features of the Company’s relationship with its audience. In defining materiality, strong em- phasis is placed on both external and internal stakeholders, given that their reasonable expectations and interests must be taken into account as an important reference point. This vision, outlined above, accom- How we set the Through a joint Company-stake- panies and enhances the most con- holders assessment of the rele- crete values of the Industrial plan priorities of our vance of these factors in terms of (development of international traf- commitments: the impact on their mutual point of fic, development of non-aviation view, as well as their usefulness, revenues, further cost reductions) materiality matrix a range of items are defined that providing an interpretive frame- constitute the areas of primary work as well as a coherent and uni- What is materiality? commitment for sustainable de- fied method to consolidate: velopment. Materiality is the extent that a giv- ◼◼ the interdisciplinary and in- en element of the Company-stake- ter-functional work required to holder relationship can influence How did we create the govern the underlying complex- the capacity to create value. materiality matrix? ity of the SEA business model and to create further and con- These are the two characteristics The starting point of our process tinuous efficiencies; that need to be considered to as- is to identify the materiality ma- ◼◼ the cultural change necessary sess the materiality of an element trix represented by the business to robustly drive and create of the Company’s business: challenges defining our vision in elasticity in the related deci- the medium term. sion-makers’ mind-set and to ◼◼ does it produce significant im- innovate the Company's pro- pacts from a financial, social or cesses and technological infra- environmental point of view? structures; ◼◼ does it substantially influence ◼◼ the SEA employees’ commit- stakeholder assessments or ment to the objectives of achiev- decisions relating to the Com- ing excellent performance. pany?

Consolidated Non-Financial Statement 2017 • 57 INTEGRATING SUSTAINABILITY INTO THE BUSINESS

MEDIUM-TERM BUSINESS CHALLENGES

1. Development of the capital infrastructure The new Malpensa and Linate Master Plans, fundamental to the development strategy. Infrastructural development of the two airports consistent with the long-term strategic vision.

2. Increase of the value generated by the Aviation Business Short to medium-term: further develop low-cost carriers. Long-term: development of new carriers and connections; develop incoming non-EU traffic. Cargo: consolidating Malpensa as a cargo hub.

3. Expansion of the Non-Aviation Business Further diversification and improvement of the commercial offering. Ongoing investment in improving the quality of services. Become the leading European airport operator in terms of digital innovations.

4. Operational efficiency Improve productivity continuing along the route taken previously to improve efficiencies. Significant reorganization plan, to be managed within a changed regulatory environment. External costs: redefinition of purchase volumes and conditions.

Identifying the issues character- Managers across various company izing the relationship with stake- roles in 2014), taking into consid- holders was achieved in the pe- eration: the current status of the riod between 2012 and 2013, Company and the underlying pres- during which time we implement- ence of external conditions of rel- ed numerous initiatives to listen evance in identifying priorities. to the "stakeholders’ voice”. Sub- sequently, the issues identified After this final stage, the final defi- were measured by a survey con- nition of the materiality matrix ducted in 2013 involving over 111 was achieved, identifying 17 pri- participants, of which 80 were ex- mary issues, which became the ba- ternal stakeholders and 31 SEA sis of SEA's sustainability strategy. Managers (14 Executives and 17 Managers). 45 issues overall, broken down into 4 categories of business challenges, were examined in the sample.

Both the stakeholders and SEA management evaluated all issues (scale 1-10) according to two dimensions:

◼◼ level of importance in relation to their expectations; ◼◼ usefulness/consistency in relation to SEA's business challenges.

A composite picture emerged, pinpointing 28 issues which subsequently involved an internal and final assessment (5 workshops with

Consolidated Non-Financial Statement 2017 • 58 INTEGRATING SUSTAINABILITY INTO THE BUSINESS

MATERIALITY MATRIX

9,2 Quality of passenger services 9

8,8 Improvement of the passenger commercial services offer 8,6 Adoption anti-corruption programmes Transparent communication 8,4 Territorial dialogue and involvement Employee engagement 8,2 Shared development process Public transport Supplier selection accessibility to transparency Environmental airports 8 risk oversight Employee empowerment

BUSINESS RELEVANT Noise impact reduction Quality of airport work Co reduction 7,8 2 Energy efficiency Environmental mitigations 7,6 Water consumption

7,4

7,2 8 8,2 8,4 8,6 8,8 9 STAKEHOLDER RELEVANT

Issues of the materiality matrix as a fundamental lever towards Development process shared growing and developing the busi- with stakeholders Quality of passenger services ness, to fuel and strengthen the The cultivation of a development Increasing attention to passenger business, so that the passenger process in consultation with rel- needs, seeking to provide them obtains an optimum overall cus- evant stakeholders (carriers, re- with an excellent, reliable service, tomer experience. tailers, regulatory institutions, meeting their expectations and municipalities), making it possible needs in line with changing habits Public transport accessibility to to identify sustainable solutions and lifestyles and seeking solu- the airport to combat challenges to the busi- tions by the use of technological Commitment to consultation with ness and to share the benefits, the innovations to improve passenger national and local transport agen- costs and the risks in managing experience. Particular attention cies to increase accessibility, es- the airports fairly and efficiently. to the needs of passengers with pecially rail accessibility to the air- disabilities, promoting experimen- ports, with the related reduction Territorial dialogue and tation and the use of solutions in the use of private vehicles. involvement increasingly suited to their de- Consultation with the surround- mands. Transparent communication ing local communities close to the A commitment to promote ef- airports with regard to decisions Increase quality/quantity of fective communication processes which affect them, pursuing great- commercial offer with internal and external stake- er transparency and promoting an Continuous improvement in terms holders to promote discussions, informed and intelligent debate. of the commercial offering pro- team work and create a collective vided to the public at the airports knowledge-base.

Consolidated Non-Financial Statement 2017 • 59 INTEGRATING SUSTAINABILITY INTO THE BUSINESS

Transparency in the supplier collaborating with ARPA (the Re- al development; that the goal of selection processes gional Protection Environmen- continuously improving health, Consolidation of a clear and trans- tal Agency) and under its close safety and well-being in the work- parent selection procedure, en- supervision improving both the place is sustained; disseminating suring equality of information and monitoring work itself and pro- and consolidating a culture of opportunities to access the offer, tecting the areas surrounding the safety, developing knowledge and as well as conditions of correct airports. an awareness of risks and promot- and fair competition in the nego- ing responsible behavior. tiation process. Mitigation of environmental impacts Employee engagement Promotion of quality in the work To act in a proactive manner to Supporting a workplace climate of the airport chain reduce the direct and indirect of discussion, debate and sharing Promotion and dissemination of environmental impacts on the of information and knowledge to a sustainable industrial approach territory, subjecting our choices better achieve the shared objec- to all airport service providers and to a careful assessment of the tives. inspection authorities, monitoring environmental impact and com- The commitment to share with the activities of the airport oper- mitting, through the various in- the corporate community, in a ators and encouraging engage- ternational research partnership clear and transparent manner, all ment with the inspection author- programmes, to identifying and information relating to the Com- ities to ensure the minimum levels designing innovative solutions to pany's processes and decisions to of quality and service and to safe- reduce externalities. ensure that every individual can guard employees. efficiently carry out their work Energy efficiency and ensure their required involve- Anti-corruption programmes The promotion of every action ment in the objectives, methods A commitment to prevent and im- and investment to ensure eco-sus- and procedures to achieve them. pede any illicit actions in the con- tainability as well as high levels of duct of Company business. energy efficiencies in the airport The issue of “Security and The prevention of corrupt activ- processes, both in terms of our Safety” ities is one of the main principles own efficiencies as well as those The issues represented in the ma- to which the SEA is wholly com- of carriers or of other operators trix do not include airport “Securi- mitted, given the strategic im- working within the airport. ty & Safety" which SEA considers portance of the sector in which it as a meta-material issue i.e. an is- operates and the relevance of the Water consumption sue which is a prerequisite for the legal and social scope in which its Constant oversight of water re- normal conduct of airport busi- business is anchored. source management due to the ness. The issue in question was adoption of complete autonomy not included in the matrix because Environmental risks oversight in water procurement, through it was excluded a priori from the A constant level of monitoring chemical/physical and quantita- assessment and comparison pro- and verification of the processes tive controls, in addition to con- cess related to ranking the impor- related to the energy, atmospher- sumption rationalization. tance of various issues dealt with ic emission, noise and water cycle by management and stakeholders. topics, and in general the various Employee empowerment Its relevance for SEA is reflected phenomenon concerning interac- Recognizing the crucial role of hu- in the fact that in this non-finan- tion with the ecosystem. man capital in achieving the cor- cial statement there is an in-depth porate mission, the promotion of description of our management approach and of our performanc- CO2 reduction employee management policies Commitment to a series of actions to create a working environment es in terms of our Safety Manage- for the control and reduction of di- where: the various knowledge ment System. rect and indirect emissions of CO2 competencies and related pro- at the airport and deriving from fessional skills of each worker Allocation of materiality issues airport management activities. are continuously supported and to the business challenges encouraged, where career de- Noise impact reduction velopment is based on skills, the 1. Development of the Constant and efficient monitoring contribution to the Company and infrastructural capital of aircraft noise at the airports, offering further scope for person- A shared development process

Consolidated Non-Financial Statement 2017 • 60 INTEGRATING SUSTAINABILITY INTO THE BUSINESS

Territorial dialogue and involve- How we manage employee management. Each risk ment incident identified is assessed on Reduction of noise impact the main key non- the basis of a 5- year occurrence Environmental protection probability (the same period as financial risks the group's Strategic plan), and its CO2 emissions reduction Overseeing environmental risks impact is based on four elements Adopting an anti-corruption The Risk Management which include HSE (health safety programme Model and the environment), reputation- al impacts, as well as the level of Transparent communication We pay great attention to the cor- maturity in managing the risk it- rect management of risks related self. There are 5 levels of risk as- 2. Increase in the value to the conduct of our business. sessment. generated by the Aviation We have therefore adopted spe- Business cific monitoring and mitigation To integrate the mapping and The quality of passenger services processes and procedures aimed evaluation of the ERM risks (Enter- Public transport accessibility to at guaranteeing airport safety and prise Risk Management), the SEA the airports service quality, protecting tangi- Group consolidated ad hoc func- Quality of the work in the air- ble and intangible assets of inter- tions responsible for specific man- port chain est to stakeholders and creating agement systems in compliance value over the long term. In 2016, with the industry regulations. The 3. Expansion of the Non- in order to support existing meas- risks monitored by these func- Aviation Business ures, management decision-mak- tions cover the environment, en- Improvement in the offer of coming processes and stakeholder ergy and Occupational Health & mercial services to passengers assurance, we initiated an Enter- Safety. In fact, within the scope prise Risk Management (ERM) pro- of each certification process (ISO 4. Operational efficiencies ject designed to build a model for 14001, ISO 50001, OHSAS 18001 Employee empowerment the identification, classification, and ISO 37001 currently being fi- Employee engagement measurement, monitoring and nalized), the Group is engaged in Transparency of supplier selection homogeneous and transversal as- specific activities to identify, assess and manage risks, which in Energy efficiency sessment of operational risks. conjunction with the activities of Water consumption The related policy16 was approved continuous improvement and the by the Board of Directors in 2017. policies implemented, allow the Update on the materiality Company to effectively manage matrix The Risk Model used by Manage- non-financial risks also. On the basis of SEA Board discus- ment to carry out periodic assess- sions on January 25, 2018, the ments is based on 4 Risk Areas: materiality matrix will undergo a deep review, based on a broad ◼◼ external risks process of stakeholder, sharehold- ◼◼ operating and business risks er and management engagement ◼◼ financial risks every three years. In the interven- ◼◼ legal and compliance risks. ing years, the materiality matrix will undergo a light review, based Within these areas there are on exclusively logging and assess- some risk incidents which could ing internally significant topics impact on employee health and 16 On September 21, 2017, the Board of emerging from stakeholder in- safety with varying degrees of se- Directors approved the Enterprise Risk teractions to determine how the verity, and which, more broadly, Management Policy, which defined an ERM might impact on people transiting division, under the responsibility of the Chief ranking of the issues within the Financial and Risk Officer, as a second level matrix might change. Therefore, through the airport, on the envi- of risk management control to support the next update will be in 2018. ronment, in terms of pollution, corporate structures in the identification and the degradation of resourc- and management of business risks, through es, or which might have a social the development of tools, frameworks and methodologies, and to guarantee periodic impact i.e. community relations reporting to middle and top management on as well as elements relating to the evolution of the risk profile.

Consolidated Non-Financial Statement 2017 • 61 INTEGRATING SUSTAINABILITY INTO THE BUSINESS

Principal non-financial tion programme for which they dits. Every incident undergoes are responsible. In addition, we a process-analysis of the causes risk factors carry out periodic drills involv- and where necessary the proce- ing all the competent entities dures, the training process and The main risk factors linked to en- as well as providing ongoing the infrastructures are revised. vironmental, social and employ- support to the Security Forces The management system is ee-related issues come under the in defending the airside-land- certified by external accredit- risk category defined in the risk side borders and the land side ed bodies in accordance with Model as "operational and busi- area. OHSAS 18001 standards. ness risks", in addition to Safety ◼◼ Through the Ground Safety Re- ◼◼ In 2017, we submitted the new and Security risks, infrastructure port and its related indicators, Malpensa airport Master Plan investments and human resourc- we constantly monitor daily to ENAC (National Civil Avia- es, with a focus on the first area. operations carried out in air- tion Authority). The planning craft-related areas, to detect tool is in the process of being ◼◼ A potential terrorist attack in any potential incidents which approved by ENAC and fol- one of our airports could have might cause an air incident (e.g. lowing this, we will apply for serious consequences for pas- failed right of way, technical approval from the Ministry of sengers and airport operators. problems). For further informa- the Environment. The Master We invest enormous effort in tion, refer to the paragraph on Plan envisages a 60 to 90-hec- the management of this risk. "Aeronautic safety". tare expansion south from the Similar to all Italian airport ◼◼ A large fire could spread from a current airport structure. As managers, the safety proce- localized source and if not dealt this plan involves part of the dures applied are based on the with in a timely manner by em- Ticino Park area with potential National Security Programme ployees and/or by the relevant environmental and econom- (PNS) measures. In order to en- infrastructure systems, could ic impacts on the surrounding sure compliance with the provi- damage assets, structures and municipalities, the Group has sions in the PNS, every airport people. The system handling focused strongly on dialogue operator draft, implements this risk event is maintained and consultation with the local and keeps an updated Security in optimum condition and is communities in designing the Programme which outlines the monitored, whilst we strive for project, currently in the approv- processes and procedures fol- continuous improvement. In al stages. lowed to apply the aspects of terms of procedures, we use ◼◼ From the point of view of en- the National Security civil avia- joint emergency and evacua- vironmental impacts, the main tion plans with third parties risks from our Company's activ- (operators and entities within ities are noise pollution affect- the airports), fire prevention ing the areas surrounding the regulations, VVFF (Fire Brigade) airport structures, in addition fire prevention certificates, as to the impact from the poten- well as periodic system main- tial increase in traffic related to tenance. On an organizational airport activities. Other com- level, we are committed to con- mon sector-related risks are stantly ensuring our employees the consumption of natural are trained in safety awareness resources such as energy and and we conduct audits on com- fuels, with consequent impacts mercial operators regarding on the atmosphere in terms of fire prevention regulations. the production of dangerous ◼◼ We invest significantly in occu- waste and spillages affecting pational health and safety pre- the territory. These risks are ventative procedures and we managed and constantly mon- now submit our low accident IF itored by the Environmental (frequency) and IG (severity) in- Management System. For fur- dices. We have developed inter- ther information, refer to the nal policies and procedures to paragraph on our environmen- avoid such events arising, in ad- tal and energy policies. dition to conducting regular au- ◼◼ Potential extreme weather

Consolidated Non-Financial Statement 2017 • 62 INTEGRATING SUSTAINABILITY INTO THE BUSINESS

events (cloud bursts, snow) chasing management team. as an elective response to the could interrupt airport activ- ◼◼ Considering the nature and increasing complexity which ities. Processes, systems and the geographic location of the characterizes the management the structures previously set activities that we carry out, as of the business, and that in- up enable us to manage these well as the preparatory con- creases Company risks; events. trols for obtaining mandatory ◼◼ we seek efficiencies, mean- ◼◼ The ageing of the company airport passes for anyone working the best use of Company workforce (the current aver- ing in the airport, we have not resources and identifying the age age is 48) is also due to the identified any human rights best conditions to use them. extension of the working age breach risks regarding the sup- introduced under recent pen- ply chain. sion reforms and could impact Our environmental and operations (particularly in relation to the use of new technol- energy policy ogies). We constantly address How we cultivate Our clear commitment to com- this issue through the imple- excellence in our bining the fundamental value of mentation of a variety of initi- protecting our environmental her- atives, aimed, on the one hand, processes at recruiting younger staff and itage with development. on the other of developing and The pursuit of excellence in the maintaining skills (including management of processes mani- Our environmental and energy specific talent management fests itself in our high level of ex- policy is based on the following initiatives), as well as develop- pectations - from ourselves and principles: ing and maintaining employee from the organization where we physical and psychological well- work - in terms of the elements ◼◼ extensive compliance with reg- being (for example the “Fragile” we need to constantly push the ulatory requirements; initiative to support employees limits of our capabilities. ◼◼ an ongoing commitment to im- with elderly parents). proving the environmental and ◼◼ The potential risks of corruption Cultivating excellence means energy performance; offences are managed through therefore doing jobs to the best ◼◼ education and involvement of the adoption of the 231 Model. of our ability on a daily basis, the all actors involved in the airport For further information, please result of bringing intelligent be- system for a commitment to- see the “Internal control sys- havior to our tasks, focused prop- wards respecting and protect- tem” paragraph. erly on achieving our own as well ing our common environmental ◼◼ In relation to the supply chain, a as shared objectives. We believe heritage; potential significant risk across that we achieve excellence when: ◼◼ priority given to the purchase the airport sector is the possi- of products and services which bility that a single supplier may ◼◼ we succeed in combining the adopt similar environmental become bankrupt or might en- creation of a financial value sustainability parameters, with counter operational difficulties, with public purpose, underlying particular attention to energy or even potentially monopolize the management and develop- saving, the reduction of atmos- the market segment where they ment of efficient, functional, pheric and noise emissions and operate. In this case, the suppli- accessible and inclusive airport water conservation; er may not be in a position to structures; ◼◼ identification of sources and ◼◼ ensure the continuity of servic- Our choices are subject to a controls of CO2 emissions pro- es instrumental to conducting close assessment of environ- duced, both direct and indirect, our business. To mitigate this, mental impacts and we are through the involvement of the we have paid greater attention committed, through research stakeholders, in order to re- in monitoring our suppliers and international partnership duce greenhouse gas emissions through specific actions both programmes, to identifying and in line with the Kyoto protocol during the supplier Registry se- designing innovative solutions and subsequent international lection phase, as well as during to reduce the consumption agreements and conventions; supplier operations where the of natural resources and limit ◼◼ a constant level of monitoring Company business lines provide emissions; and verification of the process- periodic feedback to the pur- ◼◼ we are focused on innovation es related to the energy, at-

Consolidated Non-Financial Statement 2017 • 63 INTEGRATING SUSTAINABILITY INTO THE BUSINESS

mospheric emission, noise and In this sense, the Environment and report on the environmental and water cycle topics, and in gen- Airport Safety function ensures energy processes of our airports. eral the various phenomenon that stakeholders working in the concerning interaction with the field of aviation operations in our ecosystem; airports, through periodic month- Certified management ◼◼ a highly developed system of ly Committees, are provided with systems listening and communication information on the environment with a wide range of external and operational safety and, ex- The implementation of sustain- actors to ensure transparency ternally, this ensures a correct able management practices also and sharing. relationship with the local territo- involves adopting a broad set of ry and institutions. Our environ- certified management systems Our commitment to reduce envi- mental and energy policy man- encompassing the issues of qual- ronmental impacts increases the agement tools and guidelines are ity, safety, the environment, as need to integrate key issues of en- periodically reviewed both inter- well as social issues. vironmental management into the nally and externally and drive the strategies and economic/financial commitment we have in provid- management of the Company. ing stakeholders with a detailed

CERTIFIED MANAGEMENT SYSTEMS

Environment Safety Social Quality

1 Airport Carbon Accreditation - Neutrality Level Dasa Register5 UNI EN ISO SEA ISO 140012 OHSAS 180014 UNI CEI 9001:20087 6 ISO 500013 EN 45011 EMAS8 Registration SEA Energia ISO 14001 OHSAS 18001 ISO 50001

1. ACI (Airport Council International) Europe Certification to incentivize the contribution by airports to the fight against climate change. A series of actions for the control and reduction of direct and indirect emissions of CO2 are scheduled. In June 2010 SEA reached level 3+, with Linate and Malpensa classified among the leading airports in Italy (and among the leading in Europe) for achieving carbon “neutrality”. 2. Concerns the provision of an Environmental Management System which identifies, controls and monitors the performance of the organization. 3. International standard for the managements of energy, which focuses attention on the energy yields of the organization and requires that the promotion of energy efficiency is considered throughout the organization’s distribution chain, as a requirement to be sought from suppliers. 4. Voluntary application, within the organization, of a system which guarantees adequate control regarding the Safety and Health of Workers, as well as compliance with the regulations in force. 5. Concerns the changes to the airport infrastructure at Linate and Malpensa to ensure their usage by persons with reduced mobility, in order to guarantee equality of opportunity. 6. Concerns the passenger assistance service to those with reduced mobility at airports. 7. Services Quality Management System. 8. Enterprises and organizations wishing to voluntarily commit to the evaluation and improvement of their environmental efficiency may adhere to the Eco-management and audit scheme (EMAS). EMAS principally provides stakeholders with an instrument through which the environmental attributes of an organization may be attained.

Consolidated Non-Financial Statement 2017 • 64 INTEGRATING SUSTAINABILITY INTO THE BUSINESS

- Positive evaluation by the Eu- ropean Commission. In the first six months of 2017, the Ma- drid kick-off Meeting was held which included not only the EAS (European Aviation Safety) function - Certification and EU Project Management, but also the IT and Operation Depart- ments. ◼◼ DS-08 PROPOSAL - SEA is in the process of joining the Consorti- um. Topics cover cyber security and the implications of safety and the environment. ◼◼ TALOS (with the Polytechnic University of Milan) is involved in safety/security topics of the future. ◼◼ THESEUS - an innovative risk- based model to minimize vul- nerabilities as well as a new European green mainly focusing on environmental method for monitoring safety/ and safety/security topics. security (also in conjunction innovation projects with the Milan Polytechnic Below we briefly outline the pro- Foundation). SEA has been a pro-active mem- jects, many of which are already ber of the Environmental Strategy fully operational, which are in final Further research was carried out Committee and of ACI Europe’s stages of completion. concerning drafting new propos- (the European Airports Associa- als for engaging with the region tion) Technical and Operational and the management of more Safety Committee, for some time In 2017, the two energy Projects eco-sustainable processes for han- now. CASCADE and DREAM, as well as the WATERNOMICS Project, dling and transporting goods. Over the years, we have strength- focused on optimizing water cy- ened our European presence, cles at Linate airport, all came to promoting project-based partner- an end. Our corporate ships with key airport, regional citizenship policy and scientific entities, with a focus The project OCTAVE, now in its fi- on energy, waste and water man- nal stages (Objective Control for agement, as well as contributing TAlker VErification), is focused on Corporate Citizenship to the development of mainte- safety; the goal is to implement Policy nance and airport infrastructure a reliable biometric testing sys- control system concepts and pro- tem (TBAS = trusted biometric The main points of our “Corporate cedures. Authentication Service), working citizenship” policy are: closely with FUB (Ugo Bordoni This input continues to feed into Foundation) (Rome), on a voice ◼◼ the value of the Company’s cor- the much-needed international recognition system which allows porate citizenship is defined dialogue and discussion on best access to non-monitored sensi- more by the robustness of its practices to manage environmen- tive areas as well as to structures link with the company's strat- tal issues. and online services. Furthermore, egy than by the quantity of re- in 2017, we joined the following sources invested; It confirms the strong presence projects: ◼◼ the corporate citizen activities of SEA in the field of international are carried out in order to pro- research and innovation projects, ◼◼ TRANSFORMING TRANSPORT tect the interests of:

Consolidated Non-Financial Statement 2017 • 65 INTEGRATING SUSTAINABILITY INTO THE BUSINESS

◼◼ shareholders, in relation to (completeness, endorsement Investments in Corporate the most correct, efficient by national and international and beneficial use of em- institutions, scalability, clarity Citizenship ployees by management; of objectives, measurability and Over the last three years, we have ◼◼ the non-profit stakehold- accountability) are added to invested over Euro 200,000 in cor- ers, in relation to the need those of its proponents; porate citizenship. The majority of for transparency and objec- ◼◼ projects in line with the identi- donations (over Euro 2.7 million in tivity in terms of the criteria ty, features and distinctive char- the period) concern the support under which the company acteristics of SEA are preferred, of cultural initiatives, in particu- chooses its partners for so- which carries out an active role lar support of the La Scala Foun- cial investment; (not simply a donator, but rath- dation of Milan. As a founding ◼◼ it is defined by the Compa- er a partner) in the manage- member, we actively participate in ny itself in terms of its own ment of initiatives, considering the promotion of musical culture credibility and reputation therefore as important factors throughout the world, supporting to act transparently in ac- for the choice of the project the national artistic heritage and cepting requests for con- the possibility to mobilize the improving its quality level. tributions from non-profit involvement of employees, in organizations; addition to the opportunity ◼◼ the touchstone of our corpo- to reconcile the needs within rate citizenship activities re- the region of the airports with volves around the financed international dimension initia- project, whose credentials tives.

DONATIONS OVER THE LAST THREE YEARS (EURO)

2017 2016 2015 Total donations 896,550 782,800 820,242 of which: Culture/Education 728,500 712,400 714,900 of which: La Scala Theatre Foundation Contribution 600,000 600,000 670,000 of which: Sporting events 90,000 10,000 27,000 of which: Social/Assistance 78,050 60,400 78,342 Corporate Citizenship projects 80,000 75,000 81,500 Total donations 976,550 857,800 901,742

Source: SEA

Among the most important Cor- disabilities to engage more calm- porate Citizenship projects carried ly with the airport transit experi- out in 2017, the Project- "Autism"- ence. Travelling through the airport" is highlighted. This project, with the help and contribution of third-parties involved in the area of autism - saw the publication of a bro- chure and a series of “social sto- ries” with photographs of places and detailed descriptions to assist individuals with autistic spectrum

Consolidated Non-Financial Statement 2017 • 66 INTEGRATING SUSTAINABILITY INTO THE BUSINESS

A social investment there are 2,800 SEA employees lan or Varese are also invited to who are invited annually to: submit social projects to SEA's model involving our corporate community, which if employees: The Social ◼◼ identify non-profit organiza- selected, also undergo the same Challenge tions with operational head- evaluation and voting process as quarters in the Milan and Vare- the projects proposed by the em- In 2015 we launched a new selec- se provinces; ployees themselves. tion procedure to choose social in- ◼◼ acquire - or define along with itiatives for investment purposes these entities - a social, environ- In 2017, the Evaluation Commit- called "The Social Challenge". This mental or cultural project; tee was comprised of 2 SEA rep- entailed a participatory process resentatives and 4 experts from ◼◼ present the project to SEA, in identifying and selecting social the non-profit arena. In 2016, we through which it undergoes an projects developed by non-prof- launched a Special Reward - bring- initial selection process by an it organizations operating within ing our total contribution to Euro Evaluation Committee; the provinces of Milan and Varese, 70,000 - allocated to the best SEA ◼◼ having passed the selection to which we donate Euro 10,000 employee-promoted project for every year. process successfully, the em- an association where the employ- ployee must then promote ee was also a volunteer. Only projects that are planned to the project to their colleagues be rolled out in the provinces of to garnish their support. They We thus decided to reward em- Milan and Varese (where respec- then vote for their chosen pro- ployees who had not simply "tak- tively the airports of Milan Linate ject by a digital referendum on en ownership" of an Association and Malpensa are located) and the Seanet Intranet platform. project, but who had supported which relate to social, environ- the project of "their own" associ- mental or cultural topics can qual- Non-profit organizations head- ation. ify. At the heart of the process quartered in the provinces of Mi-

THE SOCIAL CHALLENGE: FIGURES ON THE 3 INITIATIVES

2015 2016 2017

48 by 39 by 40 by Projects submitted 138 colleagues 87 colleagues 106 colleagues

Colleagues 84 59 82 involved

Projects evaluated 104 75 92

Colleagues joining 588 564 709 the referendum

Total amount in the 299 243 145 last three years: single projects submitted single projects evaluated single colleagues involved

Source: SEA

Consolidated Non-Financial Statement 2017 • 67 INTEGRATING SUSTAINABILITY INTO THE BUSINESS

From grants to Uganda, Tanzania) and in India. KADAFRICA Project Opes channels philanthropic cap- Opes investment date: June 2016 investments in social ital in the form of investments to Investments amount: 100,000 $ entities: the impact achieve social impact and financial SEA disbursement: Euro 40,000 investing projects returns. KadAfrica, headquartered in Fort From 2015 onwards, and to fur- All the funds returned to Opes are Portal (Uganda), is a social venture ther boost our social investments, reinvested in new social ventures. Company founded in 2011, which we set up a partnership with the produces and sells passion fruit. Opes Foundation, a qualified in- Measuring the impact The entrepreneurs who launched vestment fund for high social im- When drafting its impact reports, the business in 2011, set up a pact entrepreneurship projects. foundations such as Opes try to partnership with the local Caritas, We therefore engaged in invest- determine which key indicators which was planning a three-year ing philanthropic capital, through are measurable, important and programme to encourage young Opes, into financially sustainable transferable through their impact destitute young women who had companies capable of promoting portfolio. left school to become involved in social progress and lifting people agriculture and micro-entrepre- out of poverty. Opes is the leading When it updated its scale of im- neurship. Thanks to this partner- Italian Social Venture Capital oper- pacts, Opes decided to adopt the ship, over 1,000 young women ating in critical development sec- sustainable development targets on an intermittent basis, and over tors: health, access to water, basic of the United Nations as a ref- 200 women in a more structured sanitation, energy, education and erence. These targets were ap- fashion, started working in the food. Its mission is to support so- proved by all the Member States KadAfrica production subsidiary. cial ventures and enlightened en- in January 2016 and provide a very trepreneurs proposing innovative, useful analytical and inter-sector sustainable and long-term solu- framework model (development, tions in response to the most re- corporate, impact). lenting demands of the people at the bottom of the social stratum. Below we show an analysis of the Opes' targets are pre-existing progress and impacts of the busi- start-up social ventures seeking to nesses, referencing the United validate their business model and Nations Sustainable Development are located in East Africa (Kenya, targets (SDGs).

KADAFRICA - NO. OF VULNERABLE GIRLS IN THE PROGRAM

219 213 179 141 38 0 19 21 Q3 2016 Q1 2017 Q2 2017 Q3 2017

Out of school girls leaving #of out of school girls active the program in the program

Source: Opes Foundation

Consolidated Non-Financial Statement 2017 • 68 INTEGRATING SUSTAINABILITY INTO THE BUSINESS

In the initial phases, product sup- in the production and the sale of ering added-value to the agri- ply was only guaranteed by a seeds as well as the direct man- cultural yield) and to expand network of approximately hun- agement of an agricultural invest- revenue opportunities. dred local female growers, (mar- ment fund. ginalized girls with backgrounds The social impact indicators used of abuse and deprivation) whom KadAfrica essentially operates in to assess the project reference KadAfrica supported and contin- three business areas: the three SDG parameters: SDG1 ues to support through an agricul- (eradication of poverty), SDG5 tural training programme. ◼◼ to support girls who had left (gender parity), SDG8 (dignified school in securing an income; work and economic growth). In 2016, KadAfrica redesigned its ◼◼ to help small farmers to access business model incorporating lo- markets by grouping and selling cal farmers (OGs), - in addition to their products; the local female growers (OSGs) - ◼◼ to process passion fruit (deliv-

KADAFRICA - KEY SOCIAL IMPACT INDICATORS

Indicator Metric Increase of monthly income for the girls participating in the programme $3 to $20 Number of girls to date earning income from farming 471 Percentage of KAD's employees who are women 62%

Source: Opes Foundation

KADAFRICA - TURNOVER DEVELOPMENT ($)

$ 12,000.00

$ 10,000.00

$ 8,000.00

$ 6,000.00

$ 4,000.00

$ 2,000.00

$ -

Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017

Source: Opes Foundation

To date, KadAfrica is only involved girls’ training programmes (pre- duction process on proprietary in fresh products, but in the fu- viously managed in partnership land), which should have been ture, when fully operational, there with the local Caritas) resulted in launched at the same time to di- are plans to expand its business various delays in terms of targets. versify revenue streams. by building a fruit pulp processing This greatly impacted the imple- plant; fruit pulp is in demand by mentation timeframes for other the drinks industry. planned activities (local farmers’ programme, the production and The direct management of the sale of seeds, the launch of a pro-

Consolidated Non-Financial Statement 2017 • 69 INTEGRATING SUSTAINABILITY INTO THE BUSINESS

“The Water Shop Naivasha” Launched in 2010, PureFresh is inated water with serious health Project involved in the extraction, purifi- consequences. The Water Shop Opes Investment dates: cation and sale of drinking water Company extracts water from a 2015-2016 (both loose and bottled water). well, purifies it in a system using Investments amount: 110,000 $ reverse osmosis and distributes it SEA disbursement: Euro 40,000 Water quality and scarcity are crit- through a network of four shops ical elements for the country: in in various locations throughout The Water Shop Naivasha is a so- Kenya almost 17 million people the city. cial venture Company which op- (43% of the population) do not erates through the "PureFresh" have access to safe drinking water. brand and is based in Naivasha, Kenya (80,000 inhabitants, 90 km Most families are low income fam- north west of Nairobi). ilies with access only to contam-

THE WATER SHOP NAIVASHA - KEY SOCIAL IMPACT INDICATORS

Indicator Metric Number of clients with access to affordable, filtered water 7,500 per week Volumes of water sold in the last quarter (Q3 2017) 1,810,000 liters Agents' Income Growth since Opes Investment +63%

Indicator 2014 2017 Affordability of water as measured by average price per liter 7.7 KES 3.3 KES Number of direct Employees and agents employed by Purefresh 12 56 Number Of Outlets 8 28

Source: Opes Foundation

The social impact indicators used to assess the project reference the three SDG parameters: SDG3 (health and wellbeing), SDG6 (clean water and sanitation), SDG8 (dignified work and economic growth).

Consolidated Non-Financial Statement 2017 • 70 INTEGRATING SUSTAINABILITY INTO THE BUSINESS

THE WATER SHOP NAIVASHA - GROWTH IN NUMBER OF FAMILIES SERVED PER WEEK

2014 2015 2016 2016 1,600 3,000 3,600 7,500

Source: Opes Foundation

PureFresh launched its business reduce operational costs and de- machines in Naivasha and Nakuru. with the opening of two shops liver price points that ensure its The business model was modified in Naivasha (expanded to 4 over products are more accessible for to promote a franchising structure the years). In 2015, the Company low-income customers. In 2016, which is proving to be more effi- started to test a new expansion further investments by Opes, SEA cient in reaching a greater number model installing 5 drinking wa- and 2 other American investors of people and is especially effec- ter vending machines in existing helped scale up of one of the pi- tive in lowering the price of water. shops to increase sales volumes, lots: growing from 5 to 20 vending

Consolidated Non-Financial Statement 2017 • 71 INTEGRATING SUSTAINABILITY INTO THE BUSINESS

THE WATER SHOP NAIVASHA - TURNOVER DEVELOPMENT ($)

200,000

150,000

100,000

50,000 Revenue in USD Revenue

2014 2015 2016 Q1-Q3, 2017 0 $ 155,000.00 $ 169,000.00 $ 153,000.00 Source: Opes Foundation

PureFresh plans on expanding machines. When fully operational, firstly to Naivasha, where, when PureFresh plans to provide clean fully operational it will have 25 and cheap water to over 160,000 vending machines (the target is to people per week. reach 15,000 families a week) and then it plans on expanding to the neighboring Nakuru, with a population of over 200,000, where it will set up another 40 vending

Consolidated Non-Financial Statement 2017 • 72 Our socio- economic impact OUR SOCIO-ECONOMIC IMPACT

Our socio- economic impact

The value generated year), growing from Euro 552.9 Euro 81.8 million in 2016). million to Euro 589.2 million. The and distributed to largest sum, Euro 210.7 million, Public service payments - in the our stakeholders was allocated to human resourc- form of taxes and duties, amount- es (35.8% of the overall value dis- ed to Euro 51.2 million (8.7% of tributed compared to 33.1% in the distributed value). Finally, the In 2017 SEA generated a value of value distributed to the Company 2016), with Euro 184.3 million to Euro 697.7 million, a 6.8% increase and to the region amounted to suppliers (Euro 187.2 million in the on the previous year. 0.2% in 2017 and related to dona- previous year) representing 31.3% tions to service-sector entities and 84% of this value (Euro 589 mil- of the total value. Also of signifi- associations supporting cultural, lion) was distributed to stake- cance was the value distributed humanitarian, scientific and sports holders in the form of payments to capital providers (Euro 88.5 projects. and other forms of transfers (an million equating to 15% of the increase of 6.6% on the previous distributed value, an increase on

STATEMENT OF THE ECONOMIC VALUE GENERATED AND DISTRIBUTED BY THE GROUP (EURO ‘000)

2017 2016 2015 Economic value directly generated 697,698 653,512 642,408 a) Revenues Operating revenues 697,698 653,512 642,408 Economic value distributed 589,186 552,948 545.002 Reclassified consumable material b) Reclassified operating costs 184,289 187,196 196,990 costs and other operating costs c) Commercial costs Commercial costs 53,508 44,458 40,786 d) Employee salaries and benefits Personnel costs 210,743 182,971 176,979 e) Payments to providers of capital Dividends distributed in the year 70,300 62,817 50,916 e) Payments to providers of capital Financial charges 18,167 18,940 19,929 Current income taxes and tax f) Payments to the Public Administration 51,203 55,708 58,500 charges Donations, sponsorship and com- g) Investments in the community 977 858 902 munication Calculated as the difference between Economic value the economic value generated and 108,512 100,564 97,406 the economic value distributed

Note: In order to guarantee uniformity in representing data, including data from 2015 and 2016, the items "costs" and "Dividends distributed in the year” both belong to the share value distributed to capital providers ("Payments to providers of capital").

Consolidated Non-Financial Statement 2017 • 74 OUR SOCIO-ECONOMIC IMPACT

ECONOMIC VALUE DISTRIBUTED IN 2015

0.2% Value distributed to the community

10.7% Value distributed to public administration

13.0% 36.1% Value distributed Value distributed to suppliers to capital providers of goods and services

32.5% 7.5% Value distributed Value distributed to employees to customers

Source: SEA

Over the three years, both the sources (+19.1%) and communi- value generated and that distrib- ties (+8.3%), whilst value flows to uted to stakeholders increased other stakeholders declined. significantly, respectively increasing by 8.6% and by 19.2% from Finally, in the period in question, 2015. Client stakeholders enjoyed we underline the SEA Group’s pay- the greatest increase in retained ments of taxes and duties to the value over this three-year period public services amounting to over (+31.2%), followed by providers Euro 164 million. of capital (+24.9%), human re-

ECONOMIC VALUE DISTRIBUTED IN 2016

0.2% Value distributed to the community

10.1% Value distributed to public administration

14.8% 33.8% Value distributed Value distributed to suppliers to capital providers of goods and services

33.1% 8.0% Value distributed Value distributed to employees to customers

Source: SEA

Consolidated Non-Financial Statement 2017 • 75 OUR SOCIO-ECONOMIC IMPACT

ECONOMIC VALUE DISTRIBUTED IN 2017

0.2% Value distributed to the community

8.7% Value distributed to public administration

15.0% 31.3% Value distributed Value distributed to suppliers to capital providers of goods and services

35.8% 9.1% Value distributed Value distributed to employees to customers

Source: SEA

The socio-economic atives. It also merits highlighting and transport networks, analyses its role in other specific econom- of the direct, indirect, spin-off and impact of our ic sectors such as tourism-related catalytic impact were combined sectors, logistics, transport, and and integrated, in order to under- airports trade. stand the socio-economic impact for which the airport is directly re- The Milan airport system benefits For this reason, we created a data sponsible, in addition to as a gen- the whole Lombardy region (this platform to periodically measure erator, rather than an activator, often includes the whole of north- our social impact on the region. or a central actor, although not west Italy) in terms of attracting exclusively. capital investments, generating In line with the most widely ac- employment opportunities and cepted approaches in the liter- is a catalyst for investment initi- ature concerning infrastructure

Consolidated Non-Financial Statement 2017 • 76 OUR SOCIO-ECONOMIC IMPACT

TYPES OF IMPACT ANALYZED

Indirect impact This social impact derives from all the economic activities that provide services to passengers, in addition to the goods circulating within the airport structures (e.g.: carriers, shops, bars, restaurants, car hire, banks, shippers, handlers, state authorities, catering companies, etc.). The data was compiled by starting with the list of companies who requested a badge to operate inside the airports. The average employment per sector and local units was obtained by cross-referencing Istat’s (National Statistics Institute) national and regional databases, information solely related to airport systems and assessments conducted directly in the airports. The Value of Production was estimated by applying average employee productivity indices to the employment data.

Indirect economic impact The indirect impact is that generated by the provision of services and goods to passengers outside of the airport and by the supply chain - triggered by the providers of direct activities. This concerns the increase in end demand prompted by the expenditure of those operating in various forms on the basis of the presence of the airport. Estimating indirect and spin-off effects was undertaken using economic multipliers (respectively Leontief and Keynesian models), as is common practice in economic impact studies. These multipliers are based on national economic input-output models, adjusted per region, so it could be applied to the Lombardy scenario. The model establishes how much output each company or sector needs to acquire from every other sector to produce Euro 1 of goods or services.

Catalytic impact The definition of catalytic impact encompasses all the static and dynamic effects arising from the presence of an airport in terms of the attractiveness and the competitiveness of the area involved in its activity. By creating connectivity, the airport either triggers or amplifies socio-economic development mechanisms, boosting the economic growth of the region.

On the basis of the figures for from tourism - for the Lombardy Direct socio-economic the last five years and updated to region a value of more than Euro 2017 - reported in various studies 39.5 billion, corresponding to a impact of Malpensa commissioned by the Centre for capacity to create over 325 thou- airport Regional and Sector Development sand jobs. These numbers confirm of the LIUC Business School and that the overall airport infrastruc- Malpensa airport in 2017 record- coordinated by Prof. Massimiliano ture managed by SEA is one of the ed the presence of 539 produc- Serati - our airport system overall most important "productive sys- tion activities, delivering slightly generates - between direct, indi- tems" in the whole region. over 19,000 jobs. rect spin-off and catalytic effects

DIRECT SOCIO-ECONOMIC IMPACT GENERATED BY MALPENSA AIRPORT

No. Com- Value of Cargo Transport Jobs created/ Jobs created Passengers panies production (€ mil.) (ton.) units millions of units 2014 482 16,682 3,173 18,669,740 459,696 23,266,700 717 2016 546 18,305 3,660 19,311,565 536,862 24,680,185 741 2017 539 19,093 4,977 22,037,241 576,539 27,802,631 687

Source: data by the CeRST-LIUC from SEA and ISTAT figures

Consolidated Non-Financial Statement 2017 • 77 OUR SOCIO-ECONOMIC IMPACT

In the last four years, the presence of the airport, the type of traffic, productivity which characterized of companies inside the airport as well as the mix of the traffic the whole Lombardy production structures grew by 11.8%, with handled. The growth in airport system in the period covered by the corresponding job creation in- size has an inversely proportional the three studies. creasing by 14.4%, due to an over- impact on its job creation capacity, all 19.5% increase in airport traffic just like the significant presence Direct employment impact of (passengers + cargo). of low-cost airlines in the airport Malpensa on CUV municipalities generates a lower impact on di- (Voluntary Urban Committees) These performances indicate the rect employment compared to The analysis of the regional em- current capacity of the airport to the traffic produced by traditional ployment distribution, directly create jobs against the growth in carriers. In the four-year period, due to Malpensa airport, shows traffic, which can be quantified as the value of production realized that 79% of employees live in 687 jobs per million of transport- within Malpensa airport, totaling Lombardy, with over 6% residing ed units, reducing on previous almost Euro 5 billion in 2017 (an in the neighboring province of No- years. According to a recent study increase of 56.8% on 2014), grew vara and almost 12% residing out- commissioned by ACI Europe17 significantly. This growth includes side the region. (Airports Council International), the increase in direct employ- direct employment generated by ment, the inflation-linked contri- airports is influenced by the size bution, and the increase of overall

EMPLOYMENT IMPACT OF MALPENSA ON THE CUV MUNICIPALITIES

Direct total employment Direct employment delivered in the Year % CUV of the total delivered by Malpensa CUV municipalities

2014 16,682 3,639 21.8 2016 18,305 3,722 20.3 2017 19,093 3,870 20.3

Source: SEA on CeRST-LIUC figures

In the Province of Varese, in which the airport) in 2017 are the almost Malpensa airport is located, ap- 12,000 job openings, related to prox. half of employees were Euro 1.7 billion of value of produc- based (50.6%), while in the CUV tion generated. municipalities slightly more than 20% of employment generated The spin-off effect (resulting from by the airport was located (38% of the increase of aggregate demand the employment directly generat- generated by salary and payments ed by Malpensa in the Province of to employees operating inside the Varese). airport structures) represents, on the other hand, over 9,000 job openings with a value of produc- Indirect and spin-off tion worth Euro 2.3 billion. socio-economic impacts of Malpensa

Testament to the indirect impact of Malpensa airport (related to the supply chain external to the 17 Intervistas, Economic Impact of European production units operating within Airports, 2015

Consolidated Non-Financial Statement 2017 • 78 OUR SOCIO-ECONOMIC IMPACT

DEVELOPMENT OF MALPENSA’S INDIRECT AND SPIN-OFF EFFECT

Indirect impact Spin-off impact

Year Employment Value of production (Euro mil.) Employment Value of production (Euro mil.) 2014 4,917 1,049 2,333 1,250 2016 5,497 830 2,686 1,095 2017 11,748 1,770 8,892 2,335

Source: data by the CeRST-LIUC from ISTAT figures

The significant increase of produc- tendency for families to save rather in its turn, triggers airport de- tion value and employment value than spend, (higher levels of spend- velopment. recorded in 2017 from indirect ing on imported goods and servic- and spin-off effects compared to es, or high-levels of savings, reduce Analysis of the components of previous years, is due to the up- the impact) and the levels of tax Malpensa’s catalytic impact dated productivity indicators for contributions (higher tax contribu- International trade the Lombardy region rather than tions reduce the multiplier). Manufacturing companies pres- the input-output multipliers from ent in the territory benefit from the regionalization of the data The catalytic socio- the airport connections to export used by Istat and is also due to the markets. improvement of the overall eco- economic impact of nomic climate (indirectly) and the Malpensa airport Tourism dynamics of a significant increase Air access increases the number in passenger numbers transiting The concept of the catalytic im- of inbound tourists to a country. the airport. pact is in line with the idea that This tourist spend supports a wide the airport contributes to gener- range of businesses: hotels, res- In general terms, the indirect ef- ating (and is a part of) a sort of taurants, shops, entertainment fects are positively connected to eco-system of which the airport and leisure services, car hire, etc. the overall size of the economic is initially the driving force and activities operating inside the air- then the co-pivot. Catalytic dy- The attraction and the retention port, the expansion and develop- namics may therefore be the forc- of production investments in the ment of the aviation sector in the es, which, in the long term, bring territory country (airports which acquire together in the airport’s territo- The presence of an international significant part of their supplies ry, people, production activities, airport is a key factor for compa- from domestic sectors have a competencies and technologies. nies deciding to relocate their of- higher instance of job creation By placing catalytic-type impacts fices, production plants or ware- and indirect production value) in the broader context of territori- houses. and from the levels of productiv- al attractiveness it is clear that: ity/efficiencies of the industries The role of Malpensa in interna- supplying the air transport sector ◼◼ the catalytic activation tends to tional trade (sectors with high levels of indus- become significant and trans- The volume of air cargo volume to trial automation and technologies versal only beyond a certain and from Italy is negligible (circa have a lower level of indirect em- airport size threshold and, cor- 2%) of the external national trade ployment impacts). relates in a non-linear manner, flows and is trumped by maritime to traffic flows; transport as the key mode. This The scale of the spin-off effects is, ◼◼ it is not easy to identify and sep- might imply that the catalytic ef- on the other hand, correlated to arate the various breakdowns fect on trade is insignificant. the salary scales of the jobs directly of the catalytic impact; and indirectly generated. It is also ◼◼ there are feedback mecha- The framework changes if you correlated to the preference for nisms, even if relatively weaker, take into account the value of the consuming domestic products, a by which the economic context, shipped goods.

Consolidated Non-Financial Statement 2017 • 79 OUR SOCIO-ECONOMIC IMPACT

The total value of air cargo trans- 2010), with 78.6% of this transit- impact on national direct exports ported represents 7% of Italian ing through northern Italian air- outside the EU (where air cargo foreign trade and of this over 65% ports (against 69.1% in 2010). suffers less from competition originates in the north of Italy, The role of Malpensa from this with maritime transport and nota- with increasing values over time. point of view is primordial, not bly road haulage), which between These values are even greater if only in terms of its impact on the 2010 and 2017 increased from only exports are taken into ac- overall value of Italian exports, 13.4% to 14.6%. count: 8.3% of Italian exports in (stabilizing around 6% over the value are shipped by air (8.7% in last few years), but in terms of its

DEVELOPMENT OF THE IMPORT-EXPORT FLOWS OF AIR CARGO IN ITALY (IN MILLIONS OF EURO)

Imports + Exports Exports

Year Tot. Italy Italy via air N.Italy via air Tot. Italy Italy via air N.Italy via air

2010 704.735 49.542 33.828 337.346 29.448 20.359 2017 975.495 67.081 44.433 514.121 42.705 33.553 CAGR 5.6% 5.2% 4.6% 7.3% 6.4% 8.7% Portion 2010 7.0%* 68.3%** 8.7%* 69.1%** Portion 2017 6.9%* 66.2%** 8.3%* 78.6%**

* Italy via air/Italy tot ** North via air/Italy via air

Source: data elaborated by the SEA-CeRST-LIUC from ISTAT figures- (last quarter 2017 estimated)

IMPACT OF MALPENSA CARGO TRAFFIC ON ITALIAN EXPORT VALUES (MILLIONS OF EURO)

Export Exports via Malpensa Exports Export Exports Italy Exports via Year via Malpensa/ non-EU/exports Italy Italy via Malpensa non-EU Malpensa non-EU Exports Italy non-EU 2010 337,346 20,359 6.0% 143,958 19,283 13.4% 2017 514,121 30,906 6.0% 198,977 29,087 14.6%

Source: data elaborated by the SEA-CeRST-LIUC from ISTAT-Coeweb figures (last quarter 2017 estimated)

With regard to goods transiting Asia, North America and the Eu- through Malpensa's Cargo City, ropean Union. The Middle East is the main reference markets in included when we consider export terms of import values are East values.

Consolidated Non-Financial Statement 2017 • 80 OUR SOCIO-ECONOMIC IMPACT

IMPORT-EXPORT MOVES. IN VALUE TERMS VIA MALPENSA BY REGION (EURO THOUSANDS)

Imports 2010 Imports 2017 Cge. % Exports 2010 Exports 2017 Cge. % EU 27 1,627,296 2,535,058 55.8 1,075,163 1,818,354 69.1 Europe non-EU 301,352 827,891 174.7 1,005,400 1,492,328 42.1 North Africa 43,273 45,294 4.7 463,493 306,168 -33.9 Sub-Saharan Africa 327,057 338,668 3.5 492,649 462,209 -6.2 North America 3,580,207 5,748,845 60.6 5,179,007 8,413,028 62.4 Central/south America 257,852 377,840 46.5 1,376,060 1,691,007 22.9 Middle east 207,069 211,363 2.1 2,176,413 2,877,959 32.2 Central Asia 652,819 721,754 10.6 906,166 1,010,496 11.5 East Asia 6,399,371 6,800,289 6.3 6,996,730 11,914,056 70.3 Oceania 71,242 106,848 50.0 676,293 897,073 32.6 World 13,468,749 17,640,921 31.0 20,359,115 30,906,295 51.8

Source: data elaborated by the CeRST-LIUC from ISTAT-Coeweb figures (last quarter 2017 estimated)

During the acute phase of the re- European Union (imports +55.8%, peak in exports for machinery, cession (2010) to today (2017), the exports +69.1%), North America fashion/clothes, chemical/plas- total value of exports transiting (imports +60.6%, exports +62.4%), tics and furniture/furnishings. through Malpensa has increased the Middle East (exports +32.2%) Imports are strong in the machin- much more quickly (51.8%) than and East Asia (exports +70.3%). ery, chemical/plastic and fashion/ imports (+31.0%), an increase of clothes sectors. over Euro 10 billion in absolute An analysis of main industry sector value. goods flows (altogether totaling 88.5% of the imports and 94.7% The main markets in terms of car- of the imports in terms of value go managed by Malpensa are the handled by Malpensa) shows a

CHANGE IN IMPORT-EXPORT FLOWS THROUGH MALPENSA PER INDUSTRY SECTOR (EURO ‘000)

Imports 2010 Imports 2017 Cge. % Exports 2010 Exports 2017 Cge. % Machinery 6,937,603 7,448,197 7.3 7,808,372 9,776,066 25.2 Fashion/clothes 1,965,067 1,630,326 -17.0 4,473,242 8,562,996 91.4 Chemicals/plastic 2,397,392 4,619,155 92.7 2,592,617 4,813,927 85.7 Furniture/furnishings 524,325 767,826 46.4 1,770,144 3,305,605 86.7 Transport vehicles 643,419 1,153,427 79.2 2,256,094 2,813,255 24.7 Total 12,467,806 15,618,931 25.3 18,900,469 29,271,849 54.9

Source: data elaborated by the CeRST-LIUC from ISTAT-Coeweb figures (last quarter 2017 estimated)

Consolidated Non-Financial Statement 2017 • 81 OUR SOCIO-ECONOMIC IMPACT

Compared to 2010, industrial EXPORT QUOTAS OF SOME INDUSTRY SECTORS TRANSITING sector export values transiting THROUGH MALPENSA TO KEY GLOBAL MARKETS through Malpensa have doubled (IN MILLIONS OF EURO) (+54.9%) compared to imports (+25.3%), resulting in a net improvement of the trade balance. FASHION/CLOTHES 2010 2017 Strong increases in imports in the Total exports Italy 27,018 38,183 chemical (+92.7%) and logistics (+79.2%) sectors and the near Total exports via Malpensa 3,237 8,563 doubling of exports in the fashion/ Total exports via Malpensa/Total exports Italy 12.0% 22.5% clothes (+91.4%), furniture/furnishings (+86.7%) and chemicals/ FURNITURE/FURNISHINGS plastic (+85.7%) sectors merit at- Total exports Italy 10,684 14,305 tention. Malpensa's role in terms of cargo becomes even more im- Total exports via Malpensa 1,281 3,306 portant if we focus on the growth Total exports via Malpensa/Total exports Italy 12.0% 23.1% of export value quotas over the period 2010-2017 for some indus- MACHINERY try sectors. Total exports Italy 68,885 90,942

The value of Italian exports in the Total exports via Malpensa 5,651 9,776 fashion/clothes and furniture/fur- Total exports via Malpensa/Total exports Italy 8.2% 10.7% nishing sectors transiting through Malpensa almost doubled in the CHEMICALS/PLASTIC period, growing from 12.0% for Total exports Italy 35,387 45,249 both sectors in 2010 to 22.5% and 23.1% respectively in 2017. The Total exports via Malpensa 1,876 4,814 same rate of increase was regis- Total exports via Malpensa/Total exports Italy 5.3% 10.6% tered for the chemical/plastics sector, with Italian exports using Source: data elaborated by the CeRST-LIUC from ISTAT-Coeweb figures Cargo City in Malpensa for 10.6% (last quarter 2017 estimated) of its export value, compared to 5.3% in 2010. Wickelgren, 2013). Asia (10% of total inbound), the The role of Malpensa in ◼◼ The airport becomes a key asset Middle East and North America Lombardy’s tourism industry in implementing public policies (both circa 5%). The existence of a positive and to support tourism (Jacobs Con- ◼◼ Malpensa, in 2016, delivered significant correlation between sultancy per NTTC, 2012). 57% of the total tourists vis- airport connectivity and tourist iting Lombardy from non-EU attractiveness is well-established On the basis of the data produced markets. in research literature. Beyond the by the LIUC - SEA airport-tourism obvious fact that a greater num- Observatory - it is estimated that: To establish how these dynam- ber of airport connections gener- ics translate into socio-economic ates more international mobility ◼◼ In 2016 Malpensa airport deliv- impact variables that benefit the and therefore more tourism, it is ered over 5 million tourists to Lombardy region, a study was car- worthwhile highlighting that: the Lombardy region, of which ried out on a panel of passengers 1.4 million from outside the Eu- disembarking in Malpensa, to es- ◼◼ The effect works both ways (in- ropean Union. tablish their spending habits in the bound and outbound tourism) ◼◼ Data on inbound tourism shows region, in terms of transport, ho- regardless of the type of air- a 52% impact on total inbound tels, restaurants, retail outlets, free port (Oxford Economics 2013). passenger flows, with a 44% im- time, entertainment and leisure: In ◼◼ The presence of an airport pact on intercontinental flows, 2017, 3,700 international passen- significantly contributes to in- in constant growth since 2010. gers leaving Malpensa Terminal 1 creasing the prestige and image ◼◼ After Europe, the areas con- or 2 and spending at least one night of a tourist destination (Vujicic e tributing most passengers are in Lombardy, were interviewed.

Consolidated Non-Financial Statement 2017 • 82 OUR SOCIO-ECONOMIC IMPACT

SOCIO-ECONOMIC IMPACT GENERATED BY TOURIST FLOWS THROUGH MALPENSA

Results of the airport tourist survey: amount of per capita spend by expense item Individual expense totals transport accommodation catering shopping free time total Milan T1 total passenger 90.9 300.6 193.4 356.5 93.2 1,034.5 spend (€) Milan T2 total passenger 88.4 267.8 179.4 306.8 96.2 938.6 spend (€) Spend per night T1 (€) 39.0 129.0 83.4 153.0 40.0 444.0 Spend per night T2 (€) 34.0 103.0 69.0 118.0 37.0 361.0

Results of the airport tourist survey: stay in the region Nights/region No. interview. Average stay Malpensa T1 9,183,115 3,123 2.33 Malpensa T2 5,459,602 579 2.60

Airport statistics Pax totals Incomers Malpensa T1 14,463,307 3,941,251 Malpensa T2 7,705,860 2,099,846

Reconstruction of total tourist spend Transport Accom. Catering Shopping Free time OFF SITE spend total Tot. spend spend spend spend spend spend Malpensa T1 (€ thousand) 358,141 1,184,622 762,199 1,405,017 367,325 4,077,303 Malpensa T2 (€ thousand) 185,626 562,339 376,713 644,233 202,005 1,970,916

Reconstruction of total jobs related to tourism transport accommodation catering shopping free time total produced per employee 139 89 50 53 150 Jobs generated 3,921 19,541 22,962 38,959 3,788 89,171

Source: CeRST-LIUC

For each cost item and each air- all spend per Terminal was estab- about Euro 6 billion. Jobs created port Terminal the average daily lished. These values, compared from inbound tourism linked to spend per capita declared was to the average productivity per Malpensa represent in excess of multiplied by the average stay and employee per relevant sector, 89,000 units. then by the number of interna- generated data on the catalytic tional visitors transiting through impact on employment. Economi- Malpensa in 2017. Thus, the over- cally, inbound tourism represents

Consolidated Non-Financial Statement 2017 • 83 OUR SOCIO-ECONOMIC IMPACT

The role of Malpensa in the at- duction investments (plants, offic- area east of Malpensa (Asse del tractiveness of local businesses es, warehouses), a survey was car- Sempione) and in the municipali- To identify the role played by Mal- ried out on 107 representatives of ties of Varese, Gallarate, Busto Ar- pensa airport in the decisions tak- both Italian and overseas compa- sizio, Legnano and Saronno, with en by the players in the industrial nies based in the airport’s imme- an accumulative turnover of Euro sector regarding their location diate hinterland. The companies 9 billion (2015 data), representing (and/or continued presence), pro- surveyed are mainly located in the 28,000 jobs.

ROLE OF MALPENSA IN THE CHOICE OF LOCATION/CONTINUED PRESENCE OF COMPANIES IN THE HINTERLAND

How would you rank the importance of having an intercontinental airport in the vicinity for the development of your business? None Low Average High No. responses 2 26 36 39 % 1.9 25.2 35 37.9

How would you rank the presence of Malpensa as a factor in your choice to locate or to continue your business in the region? 1 ° 2 ° 3 ° 4 ° 5 ° No. responses 27 52 20 6 2 % 25.2 48.6 18.7 5.6 1.9

Source: CeRST-LIUC

Consolidated Non-Financial Statement 2017 • 84 OUR SOCIO-ECONOMIC IMPACT

As shown from the results of the their business. their choice of location/contin- survey, 38% of the companies sur- uation of their production units. veyed attributed a high degree Furthermore, 73.8% of the com- These companies have an accumu- of importance to the presence of panies interviewed identified the lative turnover of Euro 7.2 billion an intercontinental airport in the presence of Malpensa as a primary (79.2% of the sample), providing vicinity for the development of or secondary factor conditioning 20,651 jobs (73.3% of the jobs in the sampled companies).

CUMULATIVE SOCIO-ECONOMIC IMPACT OF MALPENSA AIRPORT Overall socio-economic impact of Malpensa Putting together the results ob- Value of production tained from the estimates of the Type of impact Jobs effect (Euro mil.) different types of impacts considered, it emerges that the overall Direct 19,093 4,977 socio-economic impact of Mal- Indirect 11,748 1,770 pensa in 2017 - with variable de- Spin-off 8,892 2,335 grees of intensity within a regional catchment area, which, based on Catalytic 255,528 26,103 the processes considered, stretch- of which International trade 11,3260 17,908 es from the immediate hinterland, to Lombardy, to the entire north of which Tourism 89,171 6,048 of Italy - corresponds to over Euro of which Locating businesses 53,097 2,147 35 billion of production value generated, and the creation of over Total 295,261 35,185 300,000 jobs.

Source: CeRST-LIUC

Direct socio-economic entities, handling operators and carriers, but also SEA, which had impact of Linate airport a 12% impact on the overall data. The value of production is around In terms of direct impact, there Euro 1.9 billion. are slightly above 300 economic activities present in Linate, delivering an estimated 9,300 jobs. The main impact concerns state

DIRECT SOCIO-ECONOMIC IMPACT GENERATED BY LINATE AIRPORT

No. com- Value of production Cargo Transport Jobs created/ Jobs created Passengers panies (Euro mil.) (ton.) units millions of units

2015 296 9,347 1,349 9,638,763 12,434 9,763,103 957

2017 313 9,359 1,931 9,503,065 11,937 9,622,435 972

Source: data by the CeRST-LIUC from SEA and ISTAT figures

Consolidated Non-Financial Statement 2017 • 85 OUR SOCIO-ECONOMIC IMPACT

Indirect and spin-off 5,800 job openings, related to the increase in the production val- Euro 687 million of value of pro- ue both on an indirect and spin-off socio-economic impacts duction generated. The spin-off level can be linked also to updated of Linate impact (linked to the aggregated Istat parameters on work produc- increase in demand generated by tivity and to the multipliers of the Testament to the indirect impact employee salaries working inside input-output tables. of Linate airport (related to the the airport structures) represents, supply chain external to the pro- on the other hand, over 4,000 job duction units operating within the openings and Euro 900 million in airport) in 2017 are the almost production value. Also for Linate,

DEVELOPMENT OF THE INDIRECT AND SPIN-OFF IMPACT OF LINATE AIRPORT

Indirect impact Spin-off impact

Year Employment Value of production (Euro mil.) Employment Value of production (Euro mil.) 2015 5,751 449.7 4,353 533.3 2017 5,759 686.8 4,359 906

Source: data by the CeRST-LIUC from ISTAT figures

Linate airport - Catalytic DEVELOPMENT OF LINATE'S CATALYTIC IMPACT ON TOURISM impact on tourism 2015 2017 The airport’s catalytic impact on tourism was established, as for Passengers 9,638,763 9,503,065 Malpensa, from a survey on a pan- Incomers 1,108,715 1,713,817 el of passengers disembarking in Linate and related to their spend in Interviews 2,913 3,055 the region, in terms of: transport, Nights spent in the region n.a. 3,787,536 hotels, restaurants, retail, free time, leisure and entertainment. Average stay (days) 2.20 2.21 In 2017, 3,000 outbound passen- Spend per night (€) 234.1 220 gers from Linate, with at least one overnight stay in Lombardy, were Total spend per passenger (€) 515 486.2 interviewed. The data was then Value of production (Euro mil.) 571 833.2 linked to the reference base of 1.7 million inbound tourists landing in Jobs effect 5,669 11,805 Linate and who in 2017 had visited Lombardy. Economically, inbound Source: CeRST-LIUC tourism represents approximately Euro 833 million with the creation of 11,800 jobs.

Consolidated Non-Financial Statement 2017 • 86 OUR SOCIO-ECONOMIC IMPACT

Overall socio-economic impact intensity within a regional catch- of Linate ment area, which, based on the Putting together the results ob- processes considered, stretches tained from the estimates of the from the immediate hinterland, different types of impacts consid- to Lombardy - corresponds to ered, it emerges that the overall Euro 4.3 billion of production val- socio-economic impact of Linate ue generated, and the creation of in 2017 - with variable degrees of over 31,000 jobs.

CUMULATIVE SOCIO-ECONOMIC IMPACT OF LINATE AIRPORT

Type of impact Jobs effect Value of production (Euro mil.)

Direct 9,359 1,931 Indirect 5,759 686.8 Spin-off 4,359 906 Tourism catalytic 11,805 833.2 Total 31,282 4,357

Source: CeRST-LIUC

Consolidated Non-Financial Statement 2017 • 87 Impact of the management and development of the capital infrastructure MANAGEMENT AND DEVELOPMENT OF INFRASTRUCTURE

Impact of the management and development of the capital infrastructure

The investments in the develop- extent of the investment required. within a more limited timeframe ment of the airport infrastructure The Master Plan prepared by the compared to the general situa- are carried out in compliance with airport manager was approved tion which characterizes this latter the specific programing instru- by ENAC in relation to the techni- document. ments, subject to the control and cal-aeronautic aspects and by the approval of ENAC, which governs Ministry for the Environment for the infrastructural operations the environmental impact topics. Development of within our airports. The authorization process then involves an assessment of the plan- investments The Master Plan is the long-term ning elements expressed by the planning instrument for the up- "Conference of Services", in which In the 2015-2017 three-year peri- grade and expansion of the airport all the regional entities interested od we carried out investments for infrastructures. Beginning with in the development of the airport a total value of Euro 241.2 million, the airport development expec- participate. principally focused on the devel- tations (in terms of role, traffic, opment of infrastructure, in order types of flights served, needs ex- The short/medium-term actions to improve the service offered to pressed by the region etc.), it iden- are implemented through the passengers and the cargo trans- tifies and describes the general Four-Year Action Plan, a docu- port service, guaranteeing high situation, analyzing the functional ment requested and approved by quality, security and operational allocation of the various areas of ENAC, through which the airport efficiency levels and protecting the airport and identifies the main manager defines the infrastruc- the environment to an even great- infrastructure which need to be ture which it intends to construct, er degree. constructed, assigning different in compliance with the indications priority levels and quantifying the contained in the Master Plan,

INVESTMENTS (EURO MILLIONS)

2017 2016 2015 Total 2015-2017 Malpensa Terminal 1 10.3 9.5 35.4 55.2 Malpensa Terminal 2 1.6 4.6 0.7 6.9 Malpensa Cargo 5.6 12.9 5.9 24.4 Linate 8.5 1.5 3.3 13.3 Flight infrastructure 12.4 9.2 4.6 26.2 Various actions 28.5 14.2 24.1 66.8 Plant & Equipment 18.1 17.6 12.7 48.4 Total 85.0 69.5 86.7 241.2

Source: SEA

Consolidated Non-Financial Statement 2017 • 89 MANAGEMENT AND DEVELOPMENT OF INFRASTRUCTURE

A description of some of the ma- flights in the north zone. Some of Investments in Linate jor investments carried out in the the pre-departure areas were ex- airport three-year period follows. panded, and a new Lufthansa VIP lounge was created and included At Linate, with regard to airside in- various work in the technical and frastructures we report: Investments at Malpensa service areas. Having complet- airport ed the important operational ◼◼ the creation of new de-icing expansion developments of the areas (expanding operational In 2017 work on the airport's air- previous year, in 2017, mainte- capacity, but also ensuring that side infrastructures were mainly nance and installation works on these systems are fully com- safety and operational mainte- the new air-conditioning systems pliant with current regulatory nance/improvement works and in- in the pre-embarkation tunnels standards); cluded the upgrade of the aircraft were also carried out in Terminal ◼◼ the upgrade of the aircraft signaling system to the new EAS 2. In the cargo area, of importance parking stands in the south area regulatory standards (European is the work on the new first-line of the main apron; Aviation Safety Agency). cargo warehouses, including the ◼◼ a segment of taxiway "D" re- completion of vehicular access named as taxiway "Z" to ensure The upgraded paving on runway systems towards the south zone greater clarity of communica- 35/17 involved part of the infra- and the realization of new cus- tions between taxiing pilots structure between taxiways "F" toms areas. Other works in 2017 and the control towers; and "DA". The "Calvert" approach ◼◼ included the new Ansett pilot the change in some service traf- lighting system for runway 35R fic segments on the apron, to training center, the extension of was upgraded and upgrades were improve operational visibility the vehicle traffic control system also carried out on the visual light and safety. at Terminal 1, alteration works on aids for taxiways "WB" and "Z". the operations in the east wing of The microwave stop-bar sensors Also in Linate, the horizontal present on some of the taxiways the hangar, new entry carports at airside signage was changed to directly connected to the run- carpark P5, the recent restructur- ensure its full compliance with ways were also upgraded. Work ing of building 148, the various EASA standards. The main work is also underway to create water revamps of electrical substations, involved repositioning some of treatment and collection systems transformer stations 132/15 KV the "mandatory" markings and infor southern area de-icing waste and of other airport systems. troducing a new type of horizon- waters. Upgrades to the signaling tal signage so that taxiing pilots system involved both reposition- could clearly determine their vicin- ing and integrating "mandatory" ity to the runway. In the passenger markings, as per the new regulations, as well as the realization of new horizontal signage to show taxiing pilots their vicinity to the runways. This also involved the replacement of some vertical signage markings not fully compliant with the new regulatory provisions. Redesign works continued in Terminal 1 to match the qualitative and functional standards of the new north zone, and included the zones opened to traffic in 1998. Specifically, this involved the reconfiguration of the large retail areas in the Departure Area, the redesign of both the Arriv- als Floor in satellite "B" and the distant gates for Schengen-zone

Consolidated Non-Financial Statement 2017 • 90 MANAGEMENT AND DEVELOPMENT OF INFRASTRUCTURE

terminals, renovation works com- Our development capacity, particularly relating to menced and are continuing on the flight infrastructures (runways, Viale Forlanini facade, as well as plans: the 2030 link roads, aprons), the most crit- the installation of new canopies Malpensa Master ical areas in terms of flows. This in the departure zone and the re- study carried out in collaboration styling of the arrivals hall and the Plan with the ENAV, (National Air-Traf- baggage collection areas with the fic Control Agency), cross-refer- creation of a new VIP lounge - the Master Plan Guidelines enced and analyzed capacity pro- "Leonardo". Works on the instal- jections and studies, leading us to lation of new boarding card turn- The shift from a plan which saw a base assumption on which to es- stiles in the pre-security area for Malpensa retuning to its role as tablish our guidelines. Despite all outbound passengers have been a hub towards the development the flexibility required when fore- completed. Other work includes of an international point-to-point casting activities over the long- the upgrade and the renovation airport - primarily seen as some- term, we believe it is reasonable of buildings in the airport’s west thing strategic and subsequently to project that the current two zone (business aviation area), tak- incorporated into the industrial runway layout, improved through ing into account the current op- plan - is the founding principle a series of selective works, would erational requirements and the of the Master Plan Guidelines for be able to sustain volume growth type of vehicular traffic present in 2030. At the end of the term up to 2030. In order to tackle the this area. Traffic systems and car- (2030), Malpensa should register increase in cargo volumes, diversi- parks to the front of building 35 245,000 movements according to fication in the types of goods (car- were also altered and new loading the baseline scenario and 279,000 go, courier), as well as the increase docks were installed to store ULD in a scenario with additional esti- in operator numbers, the guidelines require several steps to ex- containers. Finally, work on re-lo- mated growth. Annual passenger pand and improve the Cargo City cating the airside aircraft fuel dis- numbers should range between services, further to those services tributor have commenced. 28 to 32.5 million, whereas cargo should be in excess of 1 mil- offered currently as well as those lion tons. Following the forecasts planned imminently (new aircraft in terms of traffic, we decided parking stands and new first line to check the airport's threshold warehouses). Some of the new

Consolidated Non-Financial Statement 2017 • 91 MANAGEMENT AND DEVELOPMENT OF INFRASTRUCTURE

structures could be developed cision was based on the intention MEETING within the existing airport struc- to anticipate the latest regulatory We organized a series of work- ture. Further developments, on provisions and to apply best inter- shops solely for the representa- the other hand, would involve ex- national experience within an air- tives of all interested stakehold- panding the airport by about 60 to port context. ers. Following an invitation from 90 hectares immediately south of the interested administrations, we the current Cargo City to relocate We anticipated two regulatory also took part in public discussions the new first line warehouses and provisions in particular: organized by entities and organi- related aircraft stands, support zations present within the airport. buildings, and road links. ◼◼ Directive 2014/52/EU regarding environmental impact assessments (transposal obligation into Member State legislation Stakeholder engagement by May 2017) which implies ear- ly-stage public participation in In the redrafting of the Malpensa the project’s decision-making Master Plan we launched a cogent process, online access to infor- public consultation plan to involve mation, consultations with the the main stakeholders. The goal target audience of not less than we set ourselves was to adopt 30 days, and careful considera- structured dialogues with the action of their relevance to health tors in the region to understand impacts. how we could complement and ◼◼ Directive 2014/24/EU regard- not conflict with their demands ing public work tenders (Trans- for developing airport traffic. posed under Legislative Decree number 50/2016 "Code of Ten- The approach we adopted was ders") which requires a "Public based on 4 methodological pa- Debate" for major infrastruc- rameters, deemed essential for an tural works impacting the envi- effective and constructive interac- ronment and region. tion: The consultation process with the ◼◼ maximum transparency, clarity stakeholder panel consisted in a and information about the pro- three-pronged approach: ject; ◼◼ SEA’s proactivity in implement- DISCLOSURE ing the dialogue and the discus- Some of information tools were sion processes; made available both in paper ◼◼ a highly inclusive process with and electronic format (guideline the various interested stake- booklet, technical project docu- holders; ments, case analysis documents, ◼◼ major separation between the socio-economic impacts and en- dialogue/discussion process on vironmental assessment docu- the preliminary content of the ments) to provide interested par- Master Plan and donations in ties with all the elements needed the region by SEA. to fully understand the project.

Stakeholders’ involvement to DIALOGUE date focused on the 2030 Master We launched a digital platform Plan Guidelines issued by SEA in (http://masterplanmxp2030.seam- autumn 2015. Discussions took ilano.eu) whereby qualified stake- place between the end of 2015 holders were able to acquire infor- and April 2017 and were based mation and send us their opinions, on design hypotheses, but not on proposals, analyses and assess- the final technical project. This de- ments on the project guidelines.

Consolidated Non-Financial Statement 2017 • 92 MANAGEMENT AND DEVELOPMENT OF INFRASTRUCTURE

PRINCIPAL STAKEHOLDER ENGAGEMENT ACTIVITIES CARRIED OUT ON THE MASTER PLAN GUIDELINES

Channel Instrument Activity Interactions

Digital Guidelines Booklet Uploaded to the platform 12 downloads

Analogue Guidelines Booklet Paper distribution 500 copies

Disclosure Illustrated technical 19 files uploaded Digital presentations in the Uploaded to the platform 17 downloads workshops

Digital Public meeting video Uploaded to the platform 5 files uploaded

Creation of an “open” Platform 55 users registered Digital Document repository accessible by registration 475 accesses

Creation of a Guidelines Creation of a dedicated section on 3 comments Digital Booklet in a digital version Dialogue the platform posted with comments allowed

Video of the technical Digital workshop with comments Uploaded to the platform 5 files uploaded allowed

Opening (09-11-2015) Technical analysis of airside traffic and works (10-12-2015) Socio-economic impact of the Scheduled technical airport (07-04-2016) 50-80 participants Analogue Workshops Environmental studies per workshop methodology (12-05-2016) In-depth study of water impacts (02-12-2-16) Closing (20-04-2017)

Meeting at Lonate Pozzolo Meeting Meeting at Ferno 15-100 Public meetings in the Analogue Meeting at Arsago Seprio participants per Municipalities Meeting at Golasecca workshop Meeting at Somma Lombardo

Sesto Calende Coordination Committee COR2: (Municipalities of Azzate, Daverio, Technical closed-door Cazzago Brabbia, Inarzo, Mornago, Analogue - meetings Sumirago, Vergiate) North Milan Industrial Associations Novara Industrial Associations Ticino Lombardo park

Source: SEA

Consolidated Non-Financial Statement 2017 • 93 MANAGEMENT AND DEVELOPMENT OF INFRASTRUCTURE

Socio-environmental specifically on the environmental permanent monitoring Observa- matrices, but not only for this pur- tory in the medium to long-term. project implications pose, a highly qualified team was put in place: Main points highlighted by the Design elements subject to stakeholders in the preliminary impact evaluations ◼◼ The Department of Earth discussions Based on the contents of the Mas- Sciences and the Environment - We outline below several points ter Plan Guidelines, new design el- University of Padua and the De- of interest regarding the environ- ements were introduced - relating partment of Civil and Environ- ment that emerged from prelim- to the current airport structure mental Engineering - the Milan inary discussions with the stake- - which undoubtedly will require Polytechnic for water, soil and holders, and the related points of environmental impact studies: subsoil issues. view stated by SEA. ◼◼ The Department of Biology - ◼◼ taxiway links to runways, aimed University of Pisa; the Depart- The progress made on the topics at improving runways and mak- ment of Sciences and the Envi- raised and the related initiatives ing them more efficient, as well ronment, University of Padua; we will undertake are subject to further improving airport safety; The Museum of Zoology and the outcomes of the environmen- ◼◼ development of Cargo City, in- Natural History, best known tal impact studies currently being volving changes to the current as La Specola - University of drafted. airport perimeter. Florence, for flora, fauna and eco-systems. The environmental impact study ◼◼ The Department of Environ- concerns the environmental im- mental Sciences and of the Re- pact of air traffic and the subse- gion, University of Milan Bicoc- quent environmental dynamics re- ca, for atmosphere, noise and lated to the current project status electromagnetic fields and light and future projections (2030). pollution.

Background to the intentions We also launched a specialist as- for the planned works sessment on health implications, The design plans which determine as well on the public health im- works requiring EIA (Environmen- pacts, robustly following the reg- tal Impact Assessments) are: ulatory framework established by the Lombardy region in this field. ◼◼ Improved efficiency of aircraft We also used the CNR (Institute ground movements, with im- for Materials Technology and En- proved safety and potentially ergetic Processes) to structure greater airside system capacity. and outline this extremely com- ◼◼ Increase in the support services plex topic and track the prima- for air transport activities. ry considerations of the general ◼◼ The upgrade and the extension methodological approach. of the cargo infrastructure to meet the increasing demand Subsequently, we set up (still on- for transport in the region (all going) a specialist unit including northern Italy), with the subse- the Department of Clinical Scienc- quent expansion of the airport es and the IRCCS Community Fon- by about 60 to 90 ha. (com- dazione Ca' Grande of the Univer- pared to 1,220 ha. of current sity of Milan, which will liaise with airport infrastructure, an ap- the ATS (Health Service) and the proximate 5% increase). Lombardy Region.

Environmental impact The working group will grow fur- assessment: specialist studies ther once the EIS and the EIA De- and competencies crees have been obtained and will To carry out the specialist studies assess the option of setting up a

Consolidated Non-Financial Statement 2017 • 94 MANAGEMENT AND DEVELOPMENT OF INFRASTRUCTURE

OBSERVATION CONTENT SEA FEEDBACK

This is an activity to be carried out contemporaneously with the ordinary management of airport operations. The activities planned for Malpensa will Health Impact Assessment (HIA) study continue as current activities, and can be used, along with other instruments, by investigations competent authorities to monitor the health conditions of the population in the territory surrounding the airport while traffic volumes progressively increase.

Verification of compliance with the A report highlighting the actions carried out in compliance with the decree is D'Alema Decree being prepared.

Assessment for the limitation of cargo It is essential to assess this issue by involving competent management roles night flights able to provide specific input for the development of the Master lan.P

Assessment of alternative solutions for A feasibility study is being carried out into the implications of 6 alternative the expansion of the cargo area solutions, as well as into the ‘zero’, or ‘do nothing’, hypothesis.

Development issues on which the new Master Plan is focused, including cargo warehouses, aircraft parking areas, roadways and parking, do not Study into the impact of airport constitute elements that significantly affect water consumption.he T new development on the water footprint airport Master Plan will provide guidelines for saving and reusing water resources to apply in the definition phases of individual projects.

For residents with greater exposure to noise pollution, soundproofing Acoustic emissions connected to the hypotheses are being studied in reference to the current regulatory framework. increase in traffic Particularly innovative solutions are also being examined, such as the NICNES project regarding receptors for the acoustic insulation of school buildings.

This is an issue that will be assessed as part of the Environmental Impact Assessment (EIA). All the technical characteristics of the current and final Analysis of acoustic and atmospheric configuration of the airport will be shared with the appointed experts in emissions connected to vehicular environmental analyzes, with particular consideration given to the common traffic reference between the Master Plan and the EIS in terms of traffic, aircraft type, airport procedures, etc.

In comparison to the approximately 430 ha of external area acquisition envisaged under the old plan, the current site expansion hypothesis would Soil consumption require considerably less (approximately 5% of the current area), sufficient to meet the expansion requirements of the cargo area alone, expected over the next 15 years.

Various landscaping and green-scaping hypotheses are being studied, Landscaping impact of the new including the potential requalification of the wooded areas adjacent to the planned works new cargo area to the south.

Interventions are being studied with the aim of reconstituting the grasslands Reduction of the grassland of Malpensa and Lonate.

A collaboration with the Ticino Park is being studied in relation to a project to Guarantee of water flow to the control meteoric events of exceptional intensity, by the recycling and the transfer wetlands of the Ticino Park to wetlands south of the airport of excess meteoric water from the airport.

The planting of trees is being studied with great attention paid to airport Planting safety issues (e.g. bird strikes).

Source: SEA

Consolidated Non-Financial Statement 2017 • 95 MANAGEMENT AND DEVELOPMENT OF INFRASTRUCTURE

Our development above all, to gradually improve area, connected to the aircraft qualitative aspects, including, for parking areas by pipeline, aims plans: the 2030 example: to reduce risks and environ- Linate Master Plan mental impacts by decreasing ◼◼ improvements in the safety, truck transports. The realiza- efficiency and reliability of option of new passenger board- erations through the developing bridges and the renovation Main project contents ment of innovative technolo- of apron paving is essential in gies; order to ensure flight opera- The Linate Master Plan 2030 is ◼◼ greater comfort and a wider tions safety. based on SEA’s strategy, over re- range of services offered to ◼◼ Works aimed at increasing cent years, to consolidate the Lin- airport users; the comfort and quality of ate Airport as a city airport, grad- ◼◼ improved integration with the services offered to users ually modernizing its facilities and surrounding territory, also pro- Alignment of the quality of- adapting areas for new airport moted by the improvement of fered by Linate Airport to high activity services, both inside and access systems (e.g. the new international standards can outside of the airport grounds. metro line); be achieved, for example, by ◼◼ improvements in environmen- improving pre-boarding areas Thus, the Master Plan aims to fur- tal protection and energy sav- near to gates with seats, install- ther open the airport up to the ing. ing new control stations and city. Indeed, the reconfiguration increasing the number of con- of the intermodal node, as part of tact boarding bridges, which the subway works, represents an Socio-environmental also significantly improve safe- opportunity to enhance the con- ty aspects and environmental tinuity of the city’s public spaces project implications impacts, due to a reduction in with a sequence of squares (e.g. shuttle buses. Such interven- of the M4 subway, of the ter- Over time, the individual com- tions envisage a reconfigura- minal’s ground floor and of the ponents of Linate Airport have tion of the external envelope Idroscalo water park dock) from developed heterogeneously and of the terminal, improving the the Grande Forlanini park to the not always under a fully coordi- overall energy efficiency of the Idroscalo park, connecting the nated vision. This means that cer- terminal and significantly re- airport and metropolitan subway tain infrastructures, systems and ducing maintenance costs. line M4. In line with this strategic facilities, in the passenger ter- ◼◼ Interventions aimed at ren- vision is the redevelopment of minal and in various operational ovating building structures the east side of the airport facing areas of the airport, have been and at technological innova- the Idroscalo park, the so-called rendered obsolete and no longer tion ‘waterfront’, which, in addition to meet operational needs, due to The realization of new building creating new spaces for activities the fact they are subject to con- structures and the renewal of directly connected and comple- tinuous functional, technical and facilities will bring about great- mentary to the airport, has the environmental developments in er energy efficiency and a re- potential to promote important relation to the territory and pas- duction in maintenance costs. synergies with the other planned senger expectations, among oth- ◼◼ Interventions aimed at ener- territorial transformations. Under er aspects. gy saving and environmental the current reference framework protection and future development pros- The Master Plan thus proposes With the proposed interven- pects, significant increases in traf- to respond to such critical issues tions of the Master Plan also fic levels served by the airport are through: aim to achieve greater environ- not expected. This is due to cur- mental sustainability, by reduc- rent regulatory limitations (max- ◼◼ Works aimed at further im- ing airport vehicle movements imum 18 runway movements per proving safety and related emissions and by hour) and the airport’s configura- The expansion of the air side the use of high performance tion in a geographical area where apron will improve functional- and low emissivity finishing significant infrastructural devel- ity in the movement of aircraft, materials. opments are limited. The future vehicles and personnel. The re- ◼◼ Interventions to support air- development of the airport aims, alization of the new fuel depot port operations and territori-

Consolidated Non-Financial Statement 2017 • 96 MANAGEMENT AND DEVELOPMENT OF INFRASTRUCTURE

al services implementing a new economic Stakeholder engagement Linate currently has a closed growth plan and responding to configuration essentially ded- the needs of a highly dynamic The Environmental Impact As- icated to the exclusive supply catchment area, which is one sessment (EIA) procedure began of services directly related to of the richest in Italy. Accord- on February 27, 2017, and de- air transport. The emerging ingly, regeneration and devel- veloped through continuous di- trend at an international level opment proposals under a new alogue between SEA, the Italian is, however, oriented towards Master Plan represent a signif- Civil Aviation Authority ENAC, a greater openness to the sur- icant opportunity to provide institutions and stakeholders, rounding territory and a diver- the airport with new facilities aimed at examining documenta- sification of services on offer for operators and airport per- tion, site conditions and further within the airport grounds. The sonnel, and to produce servic- studies for assessment require- adaption, renewal and upgrades capable of generating new ments. ing of Linate Airport under a goods and passenger traffic, as new Master Plan is therefore well as wealth for the territory. strategic in ensuring adequate air transport services in Milan,

LINATE MASTER PLAN 2030 PROCEDURE

Period Type of documentation 2015 - 2016 Preparatory studies and analysis and preparation of airport Master Plan 2015 - 2016 Drafting of Environmental Impact Study documentation August 2016 Presentation to ENAC of first version of SEA Master Plan November 2016 Presentation to ENAC of final version of SEA Master Plan January 1, 2017 Technical approval of Master Plan by ENAC February 27, 2017 Presentation application for EIA procedure by ENAC Communication of "viability" of application by General Management for Assessment March 8, 2017 and Environmental Ministry Authorisations April 30, 2017 Deadline for presentation of Observations by Public, start of Avio technical phase May 11, 2017 Presentation meeting of project proposers to regional entities and stakeholders May 24, 2017 Technical inspection at locations by regional entities and stakeholders September 27, 2017 Meeting and technical inspection at locations by Competent Authorities

Source: SEA

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Regarding the collection of stake- SEA responded via a ‘Preliminary holder observations, as part of the Phase Clarifications’ report, pub- EIA procedure, a total of 8 obser- lished on the SEA corporate web- vations were submitted, 5 from site, in the section dedicated to local authorities and 3 from pri- the Master Plan. vate citizens. To all observations,

STAKEHOLDER OBSERVATIONS ON THE MASTER PLAN, AS PART OF THE EIA PROCEDURE

NO. STAKEHOLDER OBSERVATIONS INTRODUCTION Extension of the phonometric survey to the territory of Pioltello. Municipality of 1 Pioltello Clarification regarding the limits of the specialized study concerning soil, subsoil and hydrological aspects. Request that the EIA procedure take into account the Segrate variant of the Master Plan. Integral allotting of land consumption within the airport grounds, with particular reference to multi-storey parking constructions. Expansion, within the territory of Segrate, of park surfaces as environmental compensation mechanisms. Use of parametric indices, such as the Biotope Area Factor (BAF), to measure and improve the biotope capacity of urbanized land. Contribution to the creation of ecological and cycle-pedestrian connections between the park systems surrounding the airport grounds. Seizing the opportunity of the Master Plan to restore compliance with Article 142 of Legislative Decree 42/2004 and provide for a retreat to the west of all structures facing the Idroscalo park. Municipality of 3 Segrate Seizing the opportunity of the Master Plan to position Linate as an eco-friendly airport, in particular by improving Airport Carbon Accreditation to achieve the objective of Carbon Neutrality and by providing for: the selection of airlines and aircraft using Linate on the basis of minimum noise and atmospheric pollution criteria; the installation of acoustic and atmospheric pollution monitoring stations in the Segrate neighborhoods of Novegro, Tregarezzo, Redecesio and San Felice; the elimination of the environmental impact of de-icing procedures; constant supervision by the Airport Commission; the application of sanctions for non- compliance with regulations in force. Creation of access to the MM4 subway terminus, through the creation of an entry point in the area of Novegro and of a new access road on the south-east side of the airport to allow access to local public transport, thus promoting the use of the air terminal and the M4 station by users from Peschiera Borromeo and from the provincial road SP 415 Paullese. Protection and conservation of the original aspects of the part of the air terminal designed by Aldo Rossi and of the 1930s’ hangars. Municipality Clarifications on the change in quantitative terms regarding the apacityc of newly of Peschiera 1 constructed storage reservoirs. Absence of a precise evaluation with regards to

Borromeo environmental impacts (CO2 and noise) of vehicle traffic caused by this change. Private citizens 3 Various contents.

Source: SEA

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by sources not belonging or not of Carbon Neutrality in terms The environmental controlled by the companies of emissions under the direct externalities of our themselves, such as personnel control of the airport operator work trips and home-work travel. (Scopes 1 and 2), with the pur- airports chase of offsets. In 2009 ACI Europe (Airport Coun- cil International), in order to pro- In 2017, SEA confirmed its Euro- CO2 Emissions mote the contribution of the air- pean leadership positioning for ports towards the fight against both Linate and Malpensa airports For many years we have been climate change, launched an initia- within the 3+ neutrality grouping, committed to a series of actions tive called Airport Carbon Accred- together with 29 other airports, of for the control and reduction of itation: the project required the which 2 Italian (Rome and Venice), direct and indirect emissions of introduction of a series of actions representing 20% of European

CO2 at the airport and deriving for the control and reduction of traffic. from airport management activi- direct and indirect CO2 emissions ties. by airport managers, operators, The trend in Scope 1 emissions in aircraft and by all those working 2017 is substantially in line with Carbon dioxide emissions are sub- within the airport system. previous years. A significant de- divided as follows: crease in Scope 2 emissions was The Airport Carbon Accreditation brought about compared to 2016, Scope 1 - Direct emissions associ- established four possible levels in particular in relation to Malpen- ated with sources owned or con- for accreditation: sa Airport (-56%), due to a lower trolled by the group’s companies, procurement of electricity during such as fuels used for heating and ◼◼ Mapping - checking of emis- the year. operational means necessary for sions under the direct control airport activities. of the airport manager (scope The reporting standard used (GRI 1 and 2); sustainability reporting standards Scope 2 - Indirect emissions asso- ◼◼ Reduction - creation of an emis- 2016) establishes two different ciated with the generation of elec- sion reduction plan (scope 1 calculation methods for Scope 2 tricity or thermal energy acquired and 2); emissions: "Location-based" and and consumed by the group’s ◼◼ Optimization - calculation of "Market-based". companies. the emissions produced by the airport stakeholders and their The “Location-based” method Scope 3 - Other indirect emissions involvement in the reduction requires the use of average na- deriving from the activities of the plans (scope 3); tional emission factors related group’s companies but produced ◼◼ Neutrality - the achievement to the specific energy mix used

Consolidated Non-Financial Statement 2017 • 99 MANAGEMENT AND DEVELOPMENT OF INFRASTRUCTURE

to produce electricity (the coeffi- the companies of the Group and cient of the emission used for It- the suppliers (e.g. a Guarantee aly is 406,309 gCO2/kWh, Source: of origin purchase), for this cal- Emission factor for grid electricity culation an emission factor relat- @ Airport Carbon Accreditation ed to the national “residual mix” Guidance Document Issue 9 v2: was used, which for Italy is 465.11

August 2015). The “Market-based” gCO2/kWh - Source: European Re- approach uses emission factors sidual Mixes 2016, 2016). based on the contractual agreement for the provision of electricity. Given the absence of specific electricity agreements between

CO2 EMISSIONS OF THE SEA GROUP (TCO2)

2017 2016 2015 Malpensa Linate Malpensa Linate Malpensa Linate Scope 1(1) 128,878 66,566 121,608 62,963 117,675 58,580 Scope 2 Location-based 142 66 322 89 116 90 Scope 2 Market-based 163 76 369 101 133 103 Scope 3 2,298 854 2,369 876 2,343 889

(1) Note that, for the year 2017, natural gas and heating oil emissions factors have been updated [Sources: Table of national standard parameters: coefficients used for the inventory of CO2 emissions in the UNFCCC national inventory (average values for years 2015-2017). This data can be used for the calculation of emissions from January 1, 2017 to December 31, 2017]. Electricity emission factor used: Emission factor for grid electricity @ Airport Carbon Accreditation Guidance Document. Issue 9 v2: August 2015].

2015 and 2016 data does not include SEA Prime.

Source: SEA

CO2 EMISSIONS OF SEA GROUP PER TRAFFIC UNIT (KGCO2/TRAFFIC UNIT)

2017 2016 2015 Malpensa Linate Total Malpensa Linate Total Malpensa Linate Total Scope 1 * 4.64 6.92 5.22 4.93 6.45 5.36 5.02 6.00 5.31 Scope 2 Location-based 0.01 0.01 0.01 0.01 0.01 0.01 0.00 0.01 0.01 Scope 3 0.08 0.09 0.08 0.10 0.09 0.09 0.10 0.09 0.10 Scope 1 + Scope 2 4.64 6.92 5.23 4.94 6.46 5.37 5.02 6.01 5.31 Location-based *

Note: per traffic unit means the number of passengers plus goods transported (where 1 pax is equivalent to 100 kg of goods). *2015 and 2016 data does not include SEA Prime.

Source: SEA

Consolidated Non-Financial Statement 2017 • 100 MANAGEMENT AND DEVELOPMENT OF INFRASTRUCTURE

Air quality in the movements and their Landing and the level of intermodality of the Take-Off (LTO) cycles. Airport op- territorial context in which the air- Malpensa area erators are not directly involved port is located. To ensure effective and cannot control airline specific air quality control the Regional en- The atmospheric impact of airport processes, such as the technologi- vironmental protection agency of activities relates to a series of main cal evolution of fleets, their emis- Lombardy (ARPA) monitors on a emission sources, including vehic- sions efficiency or the definition daily basis the presence of atmos- ular traffic inside and outside of of flight routes and scenarios. pheric pollutants across the entire the airport grounds, means used Nor can they directly control the region through 158 monitoring for loading, unloading and ground amount of external vehicular traf- stations. handling operations and aircraft fic that is closely correlated with

MALPENSA SURROUNDING AREA MONITORING - AVERAGE NITROGEN DIOXIDE (NO2) MONTHLY VALUES

NO Annual limit: Somma Busto 2 Ferno Lonate Gallarate Varese 40 µg/m3 annual average Lombardo Arsizio µg/m³ µg/m³ µg/m³ µg/m³ µg/m³ µg/m³ January 51.0 53.5 55.2 41.6 57.4 55.2 February 44.0 47.2 55.6 29.0 54.4 46.7 March 29.3 38.5 46.0 43.3 53.6 41.7 April 16.7 23.7 35.7 27.5 38.5 33.5 May 14.6 21.6 24.5 28.7 34.2 25.1 June 12.7 20.4 17.6 23.2 26.4 24.9 July 16.0 22.9 20.6 19.3 28.2 23.9 August 13.7 22.8 18.4 10.3 23.2 27.2 September 21.1 27.5 17.9 22.3 32.1 38.3 October 32.8 41.7 20.8 28.2 48.4 48.0 November 40.9 46.7 32.5 35.5 53.2 51.3 December 44.5 52.3 38.6 41.1 57.3 54.0

Source: Arpa Lombardia, 2017

Consolidated Non-Financial Statement 2017 • 101 MANAGEMENT AND DEVELOPMENT OF INFRASTRUCTURE

In the province of Varese, the air Lombardo) and from the other Therefore, these oxides are direct- quality recording network com- stations located in urbanised are- ly emitted into the atmosphere prises 7 fixed stations, 2 mobile as (Busto Arsizio, Gallarate, Vare- following all high temperature stations and 4 gravimetric sam- se). combustion processes (heating pling instruments for the meas- plant, vehicle motors, industrial uring of soft dust. The average Mono-nitrogen oxide in general combustion, power stations, etc.), figures, established by the daily (NOx) is produced during the com- by oxidization of the atmospheric results published by ARPA for the bustion process due to the reac- nitrogen and, only to a small de- Malpensa area, are collated from tion which, at high temperatures, gree, by oxidization of the oxygen the 3 monitoring stations in the takes place between nitrogen and particles contained in the combus- immediate vicinity of the airport oxygen in the air. tible utilized. (Ferno, Lonate Pozzolo, Somma

MONITORING OF THE AREAS SURROUNDING MALPENSA - AVERAGE PARTICLE (PM10) MONTHLY VALUES

PM10 Annual limit: Ferno Busto Arsizio Gallarate Varese 40 µg/m³ annual average µg/m³ µg/m³ µg/m³ µg/m³ January 60.7 43.0 60.4 54.9 February 47.3 34.7 53.4 46.0 March 34.7 33.6 36.1 35.6 April 19.0 18.2 20.0 22.6 May 15.6 13.3 15.4 15.7 June 18.9 17.7 18.0 19.8 July 17.2 15.4 15.7 15.6 August 18.1 18.0 18.0 17.5 September 15.2 14.9 15.2 14.3 October 45.4 44.7 48.5 40.7 November 36.3 36.4 41.4 32.0 December 39.3 40.0 42.5 29.6

Source: Arpa Lombardia, 2017

Consolidated Non-Financial Statement 2017 • 102 MANAGEMENT AND DEVELOPMENT OF INFRASTRUCTURE

Air quality in the Linate Overall, based on the range of data collected from the areas area neighboring the two Milan airports, over the years - although For Linate the average monthly the airports comprise a significant values are considered, established source of emissions - no significant by monitoring stations in the im- differentiation exists between the mediate vicinity of the airport quality of air compared with other (Limito-Pioltello and Milano-Parco areas of the provinces. Lambro) and of other stations in urban areas (Milano-Città Studi, Milan-Marche, Monza, Vimercate).

LINATE SURROUNDING AREA MONITORING - AVERAGE NITROGEN DIOXIDE (NO2) MONTHLY VALUES

NO Annual limit: Limito Mi Città Mi Parco 2 Monza Vimercate Mi Marche 40 µg/m³ annual average Pioltello studi Lambro µg/m³ µg/m³ µg/m³ µg/m³ µg/m³ µg/m³ January 80.5 69.9 91.0 55.9 77.9 76.3 February 56.6 66.5 81.3 51.0 46.7 75.4 March 47.5 52.6 64.0 39.3 35.5 97.6 April 27.2 27.5 37.2 23.2 22.4 53.1 May 32.3 24.6 27.2 22.0 20.3 53.0 June 37.6 19.5 19.8 19.9 21.7 41.5 July 32.9 22.1 24.2 19.3 23.5 51.3 August 38.0 29.6 23.6 17.5 23.9 46.0 September 30.9 42.6 36.1 22.8 32.0 52.4 October 50.9 70.9 49.1 35.1 50.7 68.1 November 55.5 59.3 57.8 47.4 - 87.4 December 62.6 59.8 63.5 59.9 - 79.0

Source: Arpa Lombardia, 2017

Consolidated Non-Financial Statement 2017 • 103 MANAGEMENT AND DEVELOPMENT OF INFRASTRUCTURE

MONITORING OF THE AREAS SURROUNDING LINATE - AVERAGE PARTICLE (PM10) MONTHLY VALUES

PM10 Annual limit: Limito Pioltello Mi Città studi Monza Vimercate 40 µg/m3 annual average µg/m³ µg/m³ µg/m³ µg/m³ January 73.7 77.3 66.0 68.7 February 53.4 67.9 61.7 61.8 March 41.3 48.2 42.8 40.6 April 24.9 28.2 27.5 23.0 May 19.2 18.8 19.6 20.5 June 21.2 20.1 22.2 23.3 July 20.8 17.7 20.6 22.3 August 22.0 20.5 23.5 24.2 September 20.8 21.8 21.8 21.0 October 66.7 64.4 55.6 57.4 November 53.0 53.7 48.7 48.7 December 57.1 50.2 54.5 52.5

Source: Arpa Lombardia, 2017

Noise emissions the index to be used for the meas- The boundaries of each zone are urement of airport noise as the identified by the Airport Commis- Since 2001, we have guaranteed Level of Assessment of Airport sions, according to Italian Ministe- the monitoring of aeronautical Noise, or ‘Livello di Valutazione rial Decree of October 31, 1997. noise origin at the airports of del Rumore Aeroportuale (LVA)’. The Linate Commission approved Linate and Malpensa, in compli- Furthermore, it classified three zoning in 2009, while the Malpen- ance with current national legis- zones around each airport by sa Commission has yet to con- lation. The monitoring system is maximum thresholds of admitted clude the process. The acoustic equipped with 22 permanent field noise, varying according to human data detected by the monitoring stations (16 at Malpensa and 6 at settlement types: stations is analyzed with the aid of Linate) and 4 mobile stations, the a special information system. By ◼◼ ZONE A: The LVA index is set latter used for specific studies. using the radar paths of individu- from 60 to 65 dB(A). There are We operate in collaboration and al flights, provided by the Italian no limits on this category. under the strict control of ARPA National Flight Assistance Agency ◼◼ ZONE B: The LVA index is set (Environmental Regional Protec- (ENAV), it is possible to distinguish from 65 to 75 dB(A). The LVA tion Agency) in order to improve aeronautical noise from the total the monitoring actions and pro- index is set from 65 to 75 dB(A), noise detected. Detailed informa- tect the areas which surround for areas of agricultural, live- tion on the noise emissions and our airports. ARPA, based on the stock breeding, industrial, com- operations of our airports may be criteria defined by the Lombardy mercial, office, tertiary and sim- consulted in a specific section of Region Guidelines, classified 4 of ilar activities. the website www.seamilano.eu. the 6 stations at Malpensa in the ◼◼ ZONE C: The LVA index may ex- “Monitoring” category, 4 of the 6 ceed the value of 75 dB(A) pro- at Linate and 10 of the current 16 duced exclusively by activities at Malpensa. Italian Ministerial De- functionally connected to the cree of October 31, 1997 defined airport infrastructure.

Consolidated Non-Financial Statement 2017 • 104 MANAGEMENT AND DEVELOPMENT OF INFRASTRUCTURE

LINATE - NOISE MONITORING LVA DB (A) (*)

62.0 62.0 60.5 60.0 55.5 55.0 62.0 61.5 San Donato Bolgiano Segrate Novegro Segrate Nuovo Municipio Segrate Redecesio

2016 2017

Source: SEA

Note: LVA - Airport Assessment Level: calculated, in accordance with Ministerial Decree 31/10/1997 - Airport noise measurement methodology, based on the AEL data relating to the three weeks with highest traffic identified in 2017.

MALPENSA - NOISE MONITORING LVA DB (A) (*)

59.0 57.0 55.0 53.0 61.5 60.0 58.0 57.5 63.0 63.0 64.0 64.0 59.0 59.0 56.0 55.0 58.5 57.5 58.5 59.5 Arsago Casorate Casorate Fermo Lonate Lonate Somma Somma Somma Somma Seprio Sempione Sempione Moncucco Pozzolo Pozzolo Lombardo Lombardo Lombardo Lombardo Cimitero Cimitero Monte Rosa Cimitero (1) S. Savina Cabagaggio Maddalena Magazzino Rodari

2016 2017

Source: SEA

(1) In the period from February 1 to July 29, 2016, in the Lonate Pozzolo cemetery, works were carried out for the construction of a new colum- barium block near to the monitoring station, which caused interference in the acoustic measurements.

(*) The data shown in the figures are awaiting validation by the Lombardia Regional Agency for the Protection of the Environment (ARPA), which controls the airport noise monitoring network according to national legislation.

Consolidated Non-Financial Statement 2017 • 105 MANAGEMENT AND DEVELOPMENT OF INFRASTRUCTURE

Discharges and spills environmental regulations, as indicated in the tables reporting the The management of discharges parameters monitored. The management of water discharge is principally related to the civil sewage filtering and collection systems (or related systems) from the airport infrastructure and from the meteorological wash away of impermeable areas. The collection and separation of domestic sewage from all buildings present at the airport is assured at Malpensa by the sewage network which delivers sewage to the San Antonio consortium filter system, while the Linate sewage network is linked to the Peschiera Borro- meo filter system.

Waters discharged into the sewer system (sewage and treated first rain waters) are subjected to systematic quality controls. At both airports the quality of the sewage is within the limits established by

LINATE - SEWER DISCHARGE DATA

Parameter values Parameter Measurement unit Average annual value Legislative Decree 152/06 2017 2016 2015 COD mg/l 110 77.9 47.7 500 BOD5 mg/l 52 36.7 23.1 250 Total phosphorus mg/l 2 2.1 1.3 10

Source: SEA

MALPENSA - SEWER DISCHARGE DATA

Parameter values Parameter Measurement unit Average annual value Legislative Decree 152/06 2017 2016 2015 COD mg/l 167.3 219.6 203.5 500 BOD5 mg/l 74 102.4 87.4 250 Total phosphorus mg/l 2.9 3.3 3.5 10

Source: SEA

Consolidated Non-Financial Statement 2017 • 106 MANAGEMENT AND DEVELOPMENT OF INFRASTRUCTURE

The following table reports the WATER DISCHARGE INTO THE SEWER SYSTEM (M3) waste water disposed of through sewerage, with the remaining quantities disposed of.

506,694 1,000,618 468,817 1,055,000 489,545 1,792,352 2015 2016 2017

Linate Malpensa

Note: 2015-2016 data does not include SEA Prime, and Linate data does not include values relating to the discharges of SEA Energia. The discharges were estimated as equal to the total withdrawals from wells, net of estimated losses from the water transport network.

Source: SEA

De-icing treatment, relating to the DE-ICING LIQUID DRAINED (TONS) defrosting of aircraft during the winter and when required by the airlines, is carried out at dedicated 2017 2016 2015 stands, equipped with a system Malpensa 2.5 7 0 for the collection of any water discharge from the activities and is Linate 168.6 77 91 treated as special waste. Source: SEA

Meteorological water from the meteoric waters are subjected to airports is collected in service periodic quality checks for the pa- water vessels (Linate) and in the rameters shown in the following underground area (Malpensa), tables, with qualitative character- before, for the areas covered by istics amply compliant with rele- the regional regulations, the sep- vant environmental regulations. aration of the first flush water (treated with oil removal systems and collected in public drainage collectors). Before final deliveries,

Consolidated Non-Financial Statement 2017 • 107 MANAGEMENT AND DEVELOPMENT OF INFRASTRUCTURE

LINATE - CHARACTERISTICS OF THE SURFACE WATER DISCHARGE

Parameter value Legislative Parameter Measurement unit Average annual value Decree 152/06 2017 2016 2015 Chromium VI mg/l <0.01 0.01 0.01 0.2 Copper mg/l 0.01 0.02 0.02 0.1 Lead mg/l 0.01 0.01 0.01 0.2 Zinc mg/l 0.09 0.23 0.10 0.5 Total hydrocarbons mg/l 0.11 0.28 0.29 5.0

Source: SEA

MALPENSA - CHARACTERISTICS OF THE SOIL DISCHARGES

Parameter value Legislative Parameter Measurement unit Average annual value Decree 152/06 2017 2016 2015 Ph pH unit 7.4 7.4 7.3 8.0 COD mg/l 15.0 10.2 14.4 100.0 BOD5 mg/l 11.0 10.0 10.3 20.0 Total suspended solids mg/l 7.8 6.0 6.4 25.0 Total phosphorus mg/l 0.1 0.1 0.1 2.0 Lead mg/l <0.01 0.01 0.01 0.1 Chromium VI mg/l <0.01 0.01 0.01 0.2 Copper mg/l 0.01 0.01 0.01 0.1 Total hydrocarbons mg/l 0.1 0.1 0.1 5.0 Zinc mg/l 0.09 0.04 0.05 0.5 Total surfactants mg/l 0.2 0.2 0.2 0.5

Source: SEA

Currently, water re-usage systems Spillage management A specific procedure applicable are not in place at the airports. We commit to closely considering to the terminal movement areas and ensuring the correct manage- is in place at the airports in com- Together with other major Euro- ment of potential spillages. In the pliance with environmental pro- pean operators, we are exploring case of the accidental spillage of tection regulations. many aspects related to Water fuel or oil in operational areas, Saving systems and the possible runways and stands, procedures re-usage of meteorological wa- are in placed to intercept fluids ter, in order to save aquifer drawn before they reach the meteoro- water and rationalize water con- logical water drainage systems. sumption.

Consolidated Non-Financial Statement 2017 • 108 MANAGEMENT AND DEVELOPMENT OF INFRASTRUCTURE

MALPENSA - SIGNIFICANT SPILLS (NO.)

20 57 14 50 19 43 2015 2016 2017

Kerosene Other (*)

(*) Spillages of hydraulic oil from aircraft, of hydraulic oil from operating vehicles and spillages of gasoline from operating vehicles.

Source: SEA

In these conditions, our Airport conditions, after any containment Maintenance and Environmental in the affected area of spreading Operations Management Units by the laying of a sufficient num- are deployed to co-ordinate the ber of oil absorbent panels by the cleaning, reclamation and restora- Fire Services. tion actions in the affected areas, of the compliance and security

Consolidated Non-Financial Statement 2017 • 109 MANAGEMENT AND DEVELOPMENT OF INFRASTRUCTURE

LINATE - SIGNIFICANT SPILLS (NO.)

0 5 0 2 2 1 2015 2016 2017

Kerosene Other (*)

(*) Spillages of hydraulic oil from aircraft, of hydraulic oil from operating vehicles and spillages of gasoline from operating vehicles.

Source: SEA

The waste generated by the clean- The spillages taken into consider- values are absolute values unrelat- ing operation is transported for ation were those considered sig- ed to the number of movements, each airport to specific airport nificant, in particular those which making the phenomenon fre- ecological islands, as established involved areas equal to or greater quency almost insignificant. None by company procedures, in com- than 20 m2. of these events had any impact on pliance with the environmental airport safety. protection, safety and workplace The phenomenon’s trend follows hygiene rules applied at both our that of the previous two years. It is airports. important to underline how such

Consolidated Non-Financial Statement 2017 • 110 MANAGEMENT AND DEVELOPMENT OF INFRASTRUCTURE

lar problem area in terms of the Aviation Safety maintenance of adequate levels of aeronautic safety. At the Milan airports, an effective Safety Management System The percentages of the three ma- (SMS) is active and validated and jor indicators for the GSR (Ground controlled by the Italian Civil Avi- Safety Report) received are re- ation Authority (ENAC), in order ported below. The GSR in 2017 to maintain the highest levels of respectively numbered 800 for aeronautical safety and service Malpensa (749 in 2016) and 559 quality in terms of flight infra- for Linate (6331 in 2016); the in- structures, facilities, processes, dicators of the principal events operating procedures and the encountered at the SEA Group training of personnel. The discus- airports did not present particular sion and analysis of issues which problems in relation to the main- form the bedrock of the Safety tenance of adequate levels of Management System are consid- aeronautic safety. In fact, continu- ered monthly at the Safety Boards ous safety performance improve- and Safety Committees of Linate ments are indicated. and Malpensa, ensuring a complete and extensive handling of Regarding non-precedence, it the operational security issues. should be noted that no events The active involvement of all air- had any repercussions in relation port operators, airlines, institu- to airport management or pas- tional bodies and parties involved sengers. In any case, new barriers in the various activities at the two have been identified to reduce the airports ensures wide ranging dis- number of events. As far as For- cussion and construct a debate on eign Object Damage is concerned, the major issues. almost all events concerned For- eign Object Debris, without any In order to monitor the efficacy of repercussions on aircraft or occu- the airport Safety Management pants. system, SEA utilizes a number of quantitative elements both at Lin- ate and Malpensa.

The indicators of the principal events encountered at SEA’s airports do not highlight particu-

Malpensa (%) 2017 2016 2015 Aircraft damage 1.8 2.4 3.9 FOD 3.4 2.3 3.1 Right of way violation 8.8 6.7 8.7

Linate (%) 2017 2016 2015 Aircraft damage 1.4 2.2 2.3 FOD 1.4 2.2 1.3 Right of way violation 5.9 7.3 9.6 Source: SEA

Consolidated Non-Financial Statement 2017 • 111 MANAGEMENT AND DEVELOPMENT OF INFRASTRUCTURE

Wildlife Strikes: prevention and issue of bird strikes are covered the sector leader in the preven- monitoring in Circular ENAC APT-01B “Direc- tion of bird strikes and which car- The prevention and monitoring tive on procedures to be adopted ries out operations at the majori- actions of wildlife strikes are gov- for the prevention of impact risks ty of Italian airports). All actions erned by the “birds and wild ani- from winged animals at airports”, carried out are documented with mal’s impact risk reduction plan” in line with the ICAO Annex 14 the bird strike monitoring form and the relative operating proce- provisions. Both the Plan and and the bird strike reporting form, dure, both included in the Airport the Operating Procedure com- which inform a database managed Manuals (separate for Linate and ply with the guidelines with the through the “Bird Strike Manage- Malpensa) and prepared by SEA circular, guaranteeing ongoing ment System” software program. as the airport manager, in com- monitoring and repelling of birds pliance with circular ENAC APT and fauna from the airports. Par- Compared to 2016, bird strike re- 16/2004 and certified by the agen- ticular attention is given to the ports are falling at Linate, while at cy. They are also periodically audit- manoeuvre area with the use of Malpensa the data remains stable ed by the authority and by internal modern equipment acquired on for both indicators. personnel. the international market. In support of this activity, we utilize the The topics related to the specific company BCI (Bird Control Italy,

WILDLIFE STRIKING RISK INDICATORS

Linate Malpensa 2017 2016 2015 2017 2016 2015 Wildlife Strike (1) 1.8 3.2 3.1 0.9 0.5 2.2 Wildlife Strike (2) 0.11 0.17 0.22 0.09 0.08 0.14

(1) Annual rate per 10,000 movements. (2) Risk indicator BRI2 calculated according to the new Circular APT-01B ENAC

Source: SEA

SEA continues to monitor and manage the phenomenon by sys- tematically implementing prevention and mitigation actions, such as the increased use of dissuasive technology, the use of products after grass mowing for inverte- brate population control and poul- try and earthworm control campaigns. At Malpensa, the differing surrounding natural environment, the behavior of dangerous species (pigeons, crows and kestrels), together with the proper management of green areas, enables the containment of interference from fauna to air traffic.

Consolidated Non-Financial Statement 2017 • 112 Value generated by the Aviation Business VALUE GENERATED BY THE AVIATION BUSINESS

Value generated by the Aviation Business

Principal passenger At December 31, 2017, Malpensa Aviation customer Airport connected to 201 domes- profile airlines operating at tic and international destinations, Malpensa 8% more than in 2016 (187). The The reduced concentration of list of the 10 leading airlines in traffic quotas continues to bea At Malpensa, at December 31, terms of the overall number of characteristic factor of our airport 2017, 120 airlines were present, passengers highlights the leading system. In particular, Malpensa 9% more than 2016. The presence position of easyJet, which repre- continues to be the airport with of all the major international air- sents 32.5% of Malpensa passen- the most limited Available Seat line alliances was confirmed: ger traffic. The English company Kilometers for the leading carrier confirmed the role of Milan- Ter among the main European airports ◼◼ Star Alliance at December 31, minal 2 as an important European (13.0%). Indeed, only 40.7% of 2017 represented 16% of pas- base. the traffic offer is realized by the senger traffic (17% at Decem- leading 5 airlines operating at the ber 31, 2016); airport, compared with 49.4% in ◼◼ Sky Team and One World at the Manchester, 57.9% in Dusseldorf end of 2017 accounted for 9% and 61.3% in Copenhagen (other and 7% respectively (9% and hub-less European airports)18. 8% in 2016) of Malpensa’s passenger traffic.

MALPENSA - TOP 10 PASSENGER AIRLINES (% TRAFFIC)

Carrier 2017 2016 easyJet 32.5 35.0 Ryanair 6.7 3.4 Lufthansa 5.1 5.4 Emirates 4.2 4.4 Vueling Airlines 3.7 3.5 Meridiana fly 2.8 2.4 Neos 2.7 2.6 Turkish Airlines 1.9 2.1 Alitalia 1.7 3.7 Aeroflot 1.7 - Other airlines 36.9 35.9 18 Source: ICCSAI Fact Book 2017 - % ASK share of the leading 5 carriers at the 20 Source: SEA largest European airports

Consolidated Non-Financial Statement 2017 • 114 VALUE GENERATED BY THE AVIATION BUSINESS

Principal passenger LINATE - TOP 10 PASSENGER AIRLINES (% TRAFFIC) airlines operating at

Linate Carrier 2017 2016 At December 31, 2017, Linate air- Alitalia Group 59.7 57.3 port hosted 18 airlines (in line with easyJet 7.3 6.7 the previous year) and connected with 49 airports, both domestic Meridiana fly 6.4 7.4 and inter-EU. British Airways 6.0 4.8

Linate operations were significant- Lufthansa 4.1 3.6 ly impacted by the Alitalia Group, Air Berlin 3.5 2.9 which in 2017 represented 59.7% Air France 2.4 4.5 of traffic. The table highlights the 10 leading airlines operating from Iberia 2.4 2.3 Linate in 2017 as a percentage of Brussels Airlines 1.8 1.4 overall passenger numbers. KLM 1.6 4.0 Other airlines 4.7 5.2

Source: SEA

Principal Cargo airlines MALPENSA - VOLUMES MOVED BY THE MAIN CARGO AIRLINES (TONS) 19 “all cargo” airlines were operating out of Malpensa airport at December 31, 2017. CARRIER 2017 2016 Cargolux Group 106,886 94,919 The Malpensa cargo business is Air Bridge Cargo Airlines 53,527 49,527 distributed among a large number of carriers; in 2017, 69% of Qatar Airways 44,094 38,817 the total cargo transported was Federal Express Corporation 34,649 33,188 shared by over 13 airlines. Among these, Cargolux - the leading sec- European Air Transport 28,752 29,334 tor operator - held a predominant Nippon Cargo Airlines 23,520 20,554 position, while the highest growth (+64.7% on 2016) was reported by Silk Way Group 23,224 23,774 Turkish Airlines. Turkish Airlines 16,741 10,167 Saudi Arabian Airlines 16,248 10,522 Etihad Airways 14,889 22,605 Asiana Airlines 13,786 11,545 Korean Air 11,751 13,576 Cathay Pacific Airways 10,593 8,490 Others 22,469 20,178 Total “All cargo” activities (*) 421,129 387,196 Total Malpensa cargo activities 576,539 536,682

(*) The figure concerns volumes moved within “all cargo” activities only

Source: SEA

Consolidated Non-Financial Statement 2017 • 115 VALUE GENERATED BY THE AVIATION BUSINESS

The following table lists the top MALPENSA - % OF CARGO MOVED BY THE LEADING 10 CARGO 10 airlines operating out of Mal- AIRLINES pensa in 2017 in terms of percentage volumes of total cargo. Carrier 2017 2016 Within the all cargo segment, Cargolux Group 18.5 17.7 the main courier carriers (Federal Express, DHL and Aerologic) han- Qatar Airways 10.4 9.7 dled 72 thousand tons of goods Air Bridge Cargo Airlines 9.3 9.2 (+2.2%), representing about 17% Federal Express 6.0 6.2 of processed cargo. European Air Transport 5.1 5.4 Emirates 5.0 5.5 Passenger profile Etihad Airways 4.1 5.6

Passenger profiling is carried out Nippon Cargo Airlines 4.1 3.8 at our airports via monthly sur- Silk Way West Airlines 4.0 4.4 veys, based on specific sampling Cathay Pacific Airways 3.5 3.3 quotas for the three terminals (Li- nate, Malpensa T1, Malpensa T2). Other airlines 30.0 29.2 The total number of passengers interviewed in 2017 amounted to Source: SEA 5,209.

Those interviewed were selected MAIN CHARACTERISTICS OF OUR AIRPORT PASSENGERS IN 2017 according to a systematic procedure (one out of every 10) at the Malpensa Malpensa security control lanes, therefore in Linate departures. T1 T2 Male 62% 65% 61% This procedure allows random selection and consequently is Average age (years) 42 41 42 representative of the sample in- University culture 45% 41% 58% terviewed for each of the three terminals. Resident in Italy 65% 73% 73% 53% Tour- 54% Tour- Principal reason for travel 54% Work The control of the samples (in the ism ism waiting of data) verify destina- Average stay in the airport 133 121 93 tions and the portions of passen- (minutes) gers in transit, terminal by terminal and by quarter. Source: CFI Group

The principal findings from the 2017 data were as follows.

Linate 3% over the previous year, while ling for vacations or tourism and The frequency of trips for work, passengers with high educational for work, business or study both business or study increased (+3% over 2016) to the detriment of qualifications and frequent flyers decreased (-1%), while trips for trips for vacations or tourism (-2%) increased by 10%. family or health reasons increased and for family or health reasons (+2%). (-1%). Malpensa Terminal 1 In relation to the historical record, Malpensa Terminal 2 Passengers residing in Italy fell by the share of passengers trave- Compared to 2016, the share of

Consolidated Non-Financial Statement 2017 • 116 VALUE GENERATED BY THE AVIATION BUSINESS

passengers traveling for work or PORTION OF REVENUES FROM AVIATION ACTIVITIES business and for family or health reasons both increased (+3% and +2% respectively), to the detri- 2017 2016 2015 ment of tourism (-5%). Aviation management revenues (Euro ‘000) 443,593 408,970 395,877 Aviation revenues (% of total revenues) 61.1 58.4 57.0 Economic Other revenues (% of total revenues) 38.9 41.6 43.0

Performance of the Source: SEA Aviation Business

Aviation Business operating rev- TYPE OF REVENUES FROM AVIATION ACTIVITIES enues (airport fees and tariffs for (EURO THOUSANDS) the management of centralized infrastructure and security services and tariffs for the use of reg- % of total 2017 2016 Aviation ulated areas), reported in 2017 Revenues amounted to Euro 443.6 million (+8.5% on the previous year), Fees and centralized infrastructure 385,043 351,088 86.8 comprising 61.1% of total Group Use of regulated spaces 12,941 12,732 2.9 revenues. Security controls 45,609 45,150 10.3 The result derives from greater Total 443,593 408,970 100 volumes of traffic recorded on the basis of new connections or Source: SEA increased frequencies on existing routes.

The majority of Aviation revenues concerns income from fees and centralized infrastructure, which in 2017 comprised 86.8% of the total, followed by security service fees (10.3%) and those for the use of regulated spaces (2.9%).

Consolidated Non-Financial Statement 2017 • 117 VALUE GENERATED BY THE AVIATION BUSINESS

veloping the activities of those al- Competitive ready operating at the airport. performance of the The year saw the opening of 13 Aviation Business new destinations and the entry of 9 new carriers, resulting in major During 2017, commercial activities growth. continued with the aim of increasing territory serving connectivity by acquiring new carriers and de-

TRAFFIC EXPANSION ACTIONS AT MALPENSA (NO.)

2017 2016 2015 Total 2015-2017 New airlines 9 4 7 20 New services* 30 30 24 84 Increased frequencies by airlines already present on 23 12 13 48 existing routes Overall increase in weekly frequencies (new services + 219 158 112 489 increased frequencies)

*New services concern the introduction of new destinations served by airlines already present, or new airlines which operate on routes already served, or new airlines serving new destinations.

Source: SEA

Passenger traffic transported in 2017. In particular, the Milan airport system ranks 2nd The Milan airports are among the in Italy and 10th in Europe in terms main European airport systems, of passenger traffic volumes. with over 31 million passengers

RANKING OF THE MAIN EUROPEAN AIRPORTS/AIRPORT SYSTEMS IN TERMS OF PASSENGER TRAFFIC VOLUMES - 2017 (1000 PAX)*

149,472 101,514 68,515 64,500 53,388 47,263 46,824 44,577 33,326 31,664 London Paris Amsterdam Frankfurt Madrid Barcelona Rome Munich Berlin Milan

Airport system Single airport

*Including transits Source: SEA, ACI Europe

Consolidated Non-Financial Statement 2017 • 118 VALUE GENERATED BY THE AVIATION BUSINESS

During 2017, our airports achieved ing Malpensa Airport, the increase a decrease in both passengers and an increase of 2,592,520 passen- came in at 14.1% for passengers movements of 1.4%. gers (+9.0%) and 10,710 move- and 7.4% for aircraft movements. ments (+4.1%) over 2016. Regard- However, Linate Airport recorded

AVIATION BUSINESS PERFORMANCE INDICATORS OF THE SEA AIRPORT SYSTEM

Movements (No.) Passengers (No.) Cargo (tons) % % % 2017 2016 2017 2016 2017 2016 Change Change Change Malpensa 174,754 162,683 7.4 22,037,241 19,311,565 14.1 576,539 536,862 7.4 Linate 96,467 97,828 -1.4 9,503,065 9,636,221 -1.4 11,937 12,553 -4.9 Airport system 271,221 260,511 4.1 31,540,306 28,947,786 9.0 588,476 549,415 7.1

Source: SEA

Malpensa lar attention was paid to the de- area was also positive (+8.6%), In 2017, our Malpensa aviation velopment of Terminal 1 Schengen with growth regarding Eastern business policy, aimed at increasing traffic, which recorded a 31.6% Europe (+17.5%, in particular Rus- territory-serving air connectivity, increase, due, in particular, to Rya- sia, Albania, Bulgaria), North Africa was focused on the acquisition of nair and the transfer of Air France (+21%) and Asia (+12.4%). Traffic new carriers and the development and KLM flights from Linate. fell only in relation to South Amer- of the activities of those already ica (-12.6%), due to Latam’s capac- operating at the airports. Particu- The result for the Non-Schengen ity reduction to Brazil.

NUMBER OF DAY TIME AND NIGHT TIME MOVEMENTS* (ARRIVING AND DEPARTING)

General Passengers Cargo State Flights Total Movements Aviation 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 Daytime Arrivals 74,763 69,843 3,759 3,705 129 - - Daytime Departures 79,845 74,122 3,946 3,929 94 - - Night time Arrivals 7,078 6,217 1,778 1,581 1,978 1 - Night Time Departures 1,977 1,924 1,608 1,362 2,007 1 - Total 163,663 152,106 11,091 10,577 4,208 4,153 2 6 178,964 166,842

*Night time movements concern those between the hours of 11 PM and 6 AM.

Source: SEA

Consolidated Non-Financial Statement 2017 • 119 VALUE GENERATED BY THE AVIATION BUSINESS

The commercial policy entails con- rian routes and more destinations. ◼◼ Cameroon and Nigeria in terms stant dialogue with airlines, the In particular, the bilateral agree- of multi-designations and in- pursuit of new development opment with Australia was revised to creased frequencies and desti- portunities, with specific market- contemplate the previously un-en- nations; ing tools (e.g. ‘welcome packages’, visaged option of carrying out ◼◼ Ethiopia in terms of increased communication initiatives, partici- all-cargo flights, as well as a- par cargo frequencies and fifth pation in international events), and tial liberalization of capacity that freedom rights; participation in bilateral agree- can be operated with code-share ◼◼ India in terms of increased ment renewal negotiations with flights via third countries. Twelve points in domestic code sharing; the aim of liberalizing traffic rights new bilateral agreements were ◼◼ Kenya in terms of the broaden- and fifth freedom rights. In 2017, signed, through the International ing of designations and domes- negotiations were conducted with Civil Aviation Organization (ICAN), tic code sharing. Russian aviation authorities, result- with the following countries: ing in the signing of a new agree- New agreements were also signed ment that calls for greater frequen- ◼◼ Argentina and Sri Lanka in with Botswana, Gambia, Rwanda cy of service to Moscow and on terms of increased frequencies and Kazakhstan, with which no other routes, the introduction of and destinations; aeronautical relations had previ- a multi-designation system and in- ◼◼ Australia in terms of the capaci- ously existed. creased frequencies on trans-Sibe- ty expansion of TCCs;

NUMBER OF ARRIVING AND DEPARTING PASSENGERS

Domestic flights International flights Total 2017 2016 2017 2016 2017 2016 Arriving passengers 1,589,339 1,350,356 9,448,358 8,324,302 11,037,697 9,674,658 Departing passengers 1,574,885 1,342,775 9,424,659 8,294,132 10,999,544 9,636,907 Total passengers 3,164,224 2,693,131 18,873,017 16,618,434 22,037,241 19,311,565

Source: SEA

The traffic structure of Malpensa Six new destinations were intro- has changed significantly since duced in the winter 2017 season, the Alitalia hub, when the transit two of which domestic (Lamezia percentage was around 30% (7 and Palermo) and four European million passengers). The current (Alicante, Katowice, Liverpool and traffic is almost entirely ‘originat- Valencia). easyJet continued to in- ing’ traffic (99%), demonstrating vest in Terminal 2, with an increase that the airport has succeeded, in seats offered of 2.8% and used through diversified carrier offer- of 6.2%, and the addition of four ings and investments in the terri- new destinations (Stockholm, Gra- tory, in stimulating the demand of nada, Santiago de Compostela the catchment area in both outgo- and Zadar). ing and incoming terms, thus generating over 5 million incremental local passengers able to create greater added value. Regarding Malpensa Terminal 1, Ryanair has more than doubled traffic, with approximately 1.5 million passengers across 15 destinations.

Consolidated Non-Financial Statement 2017 • 120 VALUE GENERATED BY THE AVIATION BUSINESS

NUMBER OF PASSENGERS BY ORIGIN AND DESTINATION, TRANSFER AND TRANSITS

Origin and destination Direct transits Total 2017 2016 2017 2016 2017 2016 Domestic 3,164,224 2,693,131 10,038 International 13,083,413 11,139,806 43,115 Intercontinental 5,789,604 5,478,628 69,696 Total 22,037,241 19,311,565 122,849 100,144 22,160,090 19,411,709

Source: SEA

Malpensa’s growth was also due to: connections, resulting from frequency increases of around 67 marketing activities carried out weekly flights on both Europe- ◼◼ new Meridiana flights to Mos- in collaboration with the air- an and non-European routes. In cow Domodedovo and Russian port; addition to easyJet and Vueling, carrier Utair’s flights to Moscow ◼◼ the new Egyptian airline, Air increases were recorded for the Vnukovo, which complete con- Cairo, which introduced two following: Aeroflot (fifth addi- nectivity to all the airports of new weekly scheduled flights tional daily frequency to Moscow the Russian capital; to Sharm El Sheikh and Marsa Sheremetyevo), Air China (an in- ◼◼ new Neos flights to Nanjing/ Alam. cremental frequency to Beijing in Jinan and Meridiana flights to winter), Ethiopian, Meridiana, Nor- Shenzhen, operated with Chi- Alitalia further reduced capacity wegian, BMI, Austrian, Wizzair, Air nese tour operators; from Malpensa with the cancel- Algerie, Air Moldova, Belavia and ◼◼ Flybe flights to London Sou- lation of Malpensa to Fiumicino Eurowings. thend, which complete connec- flights from February and Mal- tivity between Milan and the six pensa to Abu Dhabi flights from In 2017 a total of 5.8 million pas- London airports; September, confirming only long- sengers travelled to interconti- ◼◼ new flights to Stockholm with haul operations to New York and nental destinations, an increase of SAS, Norwegian and easyJet Tokyo. There were also several 5.7% on 2016.

PASSENGER TRAFFIC DESTINATIONS FROM TERMINAL 1 - 2017

Region % Europe 62.2 Middle East 14.8 North America 7.0 Far East 6.8 Africa 5.7 Central/South America 3.5

Source: SEA

Consolidated Non-Financial Statement 2017 • 121 VALUE GENERATED BY THE AVIATION BUSINESS

Linate making up for a fall in traffic from son. The cessation of Air Berlin Domestic traffic was substantially Reggio Calabria and Comiso, while operations in November also in- in line with 2016 (+0.6%); Alita- European traffic reduced 3.4%, fluenced results. lia recorded a 2.9% growth from principally due to the transfer to the destinations of Cagliari, Bari, Malpensa by Air France and KLM Palermo, Alghero and Pescara, with the start of the summer sea-

NUMBER OF ARRIVING AND DEPARTING PASSENGERS

Domestic flights International flights Total 2017 2016 2017 2016 2017 2016 Arriving passengers 2,481,310 2,470,252 2,293,514 2,378,787 4,774,824 4,849,039 Departing passengers 2,446,378 2,428,154 2,281,863 2,359,028 4,728,241 4,787,182 Total passengers 4,927,688 4,898,406 4,575,377 4,737,815 9,503,065 9,636,221

Source: SEA

The Linate-Fiumicino shuttle ser- once again achieving around 1.2 vice retained substantially the million passengers (-0.4%). same traffic as the previous year,

NUMBER OF DAY TIME AND NIGHT TIME MOVEMENTS* (ARRIVING AND DEPARTING)

General Passengers Cargo State Flights Total Movements Aviation 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 Daytime Arrivals 46,344 46,982 114 100 10,353 10,108 10 2 56,821 57,192 Daytime Departures 47,803 48,490 22 30 10,378 10,133 10 2 58,213 58,655 Night time Arrivals 1,625 1,680 150 154 245 226 - 2,020 2,060 Night Time Departures 167 168 242 224 267 236 - 676 628 Total 95,939 97,320 528 508 21,263 20,703 20 4 117,730 118,535

*Night time movements concern those between the hours of 11 PM and 6 AM.

Source: SEA

Consolidated Non-Financial Statement 2017 • 122 VALUE GENERATED BY THE AVIATION BUSINESS

PASSENGERS BY ORIGIN AND DESTINATION, TRANSFER AND TRANSITS

Origin and destination Direct transits Total 2017 2016 2017 2016 2017 2016 Domestic 4,927,688 4,898,406 221 International 4,575,377 4,737,815 763 Total 9,503,065 9,636,221 984 2,275 9,504,049 9,638,496

Source: SEA

Passenger flight on last year (80.6%), with fluctua- London Gatwick and Oslo. Linate, tions in the same months as those with over 85% of punctual depart- punctuality for departing flights. Among the ing flights, ranks as the leader in most significant consequences terms of punctuality across all the Data on punctuality 2017 col- of the general increase in traffic airports in this category, ahead of lected from the members of the the other comparable Italian air- working group ACI Europe-EAPN were airport capacity problems at ports of Bologna and Naples. With (European Airport Punctuality many airports and difficulties ex- punctuality confirmed at around Network) highlight a slight de- perienced by European air traffic 80%, Malpensa ranks above the terioration in punctuality both controllers in managing the over- average European and is the best for departures and arrivals com- all capacity of the system. Fur- amongst the European airports of pared to 2016. On average, the thermore, summer weather con- similar size within its group (15-to punctuality of departing flights ditions (wind and strong storms) 25 million passengers) (including was 75.7% compared to 77.9% re- contributed to the deterioration Vienna and Athens). It is also far corded in the previous year, with of punctuality data, especially at ahead in comparison to the main significant monthly fluctuations the airports of London Heathrow, larger airport hubs such as Rome ranging from a maximum of 83% Frankfurt, Barcelona, Palma de Fiumicino, Munich and Frankfurt. in March and November and a Mallorca and Nice. At European minimum of 66% in July. Arriving level, there were increasing delays flights recorded average punctu- in departures over arrivals, except ality of 78.6%, slightly reducing at Malpensa, London Heathrow,

EUROPEAN AIRPORT PUNCTUALITY NETWORK (EAPN) RANKING FOR DEPARTURES (% WITHIN 15 MIN.)

2017 2016 2015 Malpensa 80.1 81.3 82.3 Linate 85.3 84.9 88.4 Average EAPN 75.7 77.9 79.5

Source: SEA

Consolidated Non-Financial Statement 2017 • 123 VALUE GENERATED BY THE AVIATION BUSINESS

Cargo traffic Milan Linate totaled 588,000 tons, increasing over 39,000 tons (7.1% The Milan airport system ranks 1st at system level and 7.4% at Mal- in Italy and 5th in Europe by freight pensa). traffic volumes. In 2017, cargo traffic managed at Malpensa and

RANKING OF THE MAIN EUROPEAN AIRPORTS / AIRPORT SYSTEMS BY VOLUMES OF GOODS - 2017 (‘000 TONS)

2,109 2,100 1,795 1,752 588 514 471 363 356 206 Frankfurt Paris London Amsterdam Milan Brussels Madrid Munich Zurich Vienna

Airport system Single airport

Goods in transit are not considered. Source: SEA, ACI Europe

The positive trend has led to the an increase in rates by the carriers, golux (+12.6%), Qatar (+13.6%), achievement of a new historical with a consequent positive impact Airbridge Cargo (+8.1%) and Nip- record in terms of goods trans- on profitability. pon Cargo (+14.4%). The results ported via Malpensa to the tune of Turkish Airlines (+64.7%) and of nearly 577,000 tons. The con- The all-cargo segment grew by Saudi Arabian (+54.4%) were par- solidation of the capacity demand 8.8% overall, with excellent per- ticularly positive in increasing the by freight forwarders led to an formances recorded by the main capacity offering. improvement in load factors and all-cargo carriers of Malpensa: Car-

CARGO TRAFFIC MANAGED BY THE MILAN AIRPORT SYSTEM (000’S TONS)

11.9 12.6 12.4

576.5 500.1 536.9

2015 2016 2017

Malpensa Linate

Source: SEA

Consolidated Non-Financial Statement 2017 • 124 VALUE GENERATED BY THE AVIATION BUSINESS

The goods transported on passen- terms: Qatar (+19.6%), Ameri- ger flights also grew (+3.8%), with can Airlines (+31.4%), Oman Air the following carriers recording (+20.2%), Air India (+55.4%) and the highest growth in absolute Air China (+11%).

MALPENSA - ARRIVING AND DEPARTING CARGO ON ALL FLIGHTS (CARGO AND PASSENGER) (TONS)

Cargo Passengers Total 2017 2016 2017 2016 2017 2016 Arriving 155,687 141,199 74,834 69,685 230,521 210,884 Departing 265,441 245,994 80,576 79,984 346,017 325,978 Total cargo 421,128 387,193 155,410 149,669 576,538 536,862

Source: SEA

Three new carriers started operat- a weekly flight to Addis Ababa, erates for Amazon with six weekly ing from Malpensa: MNG Airlines, which represents the first direct flights to East Midlands. a Turkish carrier with two flights connection to the African conti- to Istanbul; Ethiopian Cargo, with nent; and ASL France, which op-

LINATE - ARRIVING AND DEPARTING CARGO ON ALL FLIGHTS (CARGO AND PASSENGER) (TONS)

Cargo Passengers Total 2017 2016 2017 2016 2017 2016 Arriving 4,642 4,817 815 943 5,457 5,761 Departing 5,108 5,324 1,372 1,468 6,480 6,792 Total cargo 9,750 10,142 2,187 2,411 11,937 12,553

Source: SEA

The cargo traffic served by the MALPENSA - DISTRIBUTION OF CARGO TRAFFIC BY GEOGRAPHICAL SEA managed airports reports a AREA OF DESTINATION (% OF TOTAL GOODS VOLUME) significant variance between final destination areas. Region 2017 2016 2015 Middle East 29.5 28.8 29.8 Far East 27.9 27.2 26.0 Europe 25.3 25.5 24.5 North America 14.4 15.1 15.8 Central and South America 1.6 2.5 2.9 Africa 1.3 0.9 1.0

Source: SEA

Consolidated Non-Financial Statement 2017 • 125 VALUE GENERATED BY THE AVIATION BUSINESS

The operational complexity which Connectivity the 111th position in the ranking defines the cargo activities at Mal- of continental accessibility, with pensa (as is the case for the major Worldwide and European an index of 3.03, down on the pre- European hubs), and the range of connectivity index vious year (2.17). operators combining in an inte- According to the latest availa- grated manner, contributing to ble data, in the ranking of the 30 Connectivity and travel times the end result expected of those best globally connected airports An indicator which provides a delivering and receiving, has led (selected from a network com- more accurate measure of the SEA to draw up values and quality prising 3,908 airports worldwide), level of accessibility to Europe by objectives for the principle param- Malpensa confirmed its 28th posi- individual airports is based on the eters concerning the handling of tioning, with a connectivity index minimum travel times to reach cargo processes at the airports. of 2.58, an improvement over the other European airports. previous year’s 2.69. As one of the Therefore, Malpensa airport de- most important airport structural Travel time includes both the cided to adopt a Cargo Services parameters, the index illustrates, flight time and the waiting time Charter, in order to: starting from a given airport, the at interim airports (in the case in average number of flights needed which more than one flight is nec- ◼◼ define performance and quality to reach all the other airports in essary to reach a particular desti- levels which satisfy the expec- the considered network (world- nation). tations of operators utilizing wide or European). At the Europe- the cargo assistance services; an connectivity level (in reference For absolute comparison purpos- ◼◼ ensure SEA the availability of a to a sample of 480 continental air- es, it is possible to reach 391 Eu- regulation and control system ports), Malpensa places 29th, los- ropean airports in a day with an for the cargo services provided ing 5 positions in the ranking com- average connection time of 249 at the airport, in order to guar- pared to the previous year, while minutes from Amsterdam Airport antee the quality of the final maintaining the index unaltered (the best connected European air- result. at 1.90. Linate however occupies port).

CONNECTIVITY INDICATORS AND TRAVEL TIMES OF THE MILAN AIRPORTS

2016 2015 2014 MXP LIN MXP LIN MXP LIN No. European airports 387 383 390 387 403 400 connected same day Average connection time (minutes) 308 333 312 332 325 344

Source: ICCSAI Fact Book

In this ranking, Malpensa Airport is Fiumicino, which connects to 384 erage time of 333 minutes. the best-connected Italian airport airports with an average time of (22nd in the European ranking) 311 minutes. Day trip with 387 airports reached same In addition to general European day and average connection times Linate airport also reports good network connectivity, journey of 308 minutes. connectivity in terms of travel times are also of great impor- times (fourth in the domestic tance, particularly for airports Malpensa surpasses by one posi- ranking after Malpensa, Rome whose traffic consists predomi- tion in both national and Europe- Fiumicino and Venice), connected nantly of business customers. an rankings the airport of Rome with 383 airports daily, with an av-

Consolidated Non-Financial Statement 2017 • 126 VALUE GENERATED BY THE AVIATION BUSINESS

This figure is particularly impor- make a round-trip flight within to offer day trips to an average tant for those airports principally a day (i.e. a day trip), remaining of 190 destinations in a maximum serving business customers. at the destinations for at least 4 time of less than 700 minutes. hours, the airports of Frankfurt, Considering the set of destina- Munich, Paris and Amsterdam tions to which it is possible to lead the rankings with an ability

EUROPEAN NETWORK REACHABLE THROUGH A DAY TRIP FROM THE MILAN AIRPORTS

2016 2015 2014 MXP LIN MXP LIN MXP LIN No. European airports 184 155 180 150 178 na connected same day Average connection time (minutes) 741 740 744 732 744 na European ranking position 15th 13th 19th 12th 20th na

Source: ICCSAI Fact Book

In the Milan airport system, Linate minutes. according to the travel time is takes 13th place in the Europe- more indicative of quality than an ranking (down one from the Accessibility to European GDP connectivity measured exclusively previous year), with a network of Malpensa is the only Italian airport in terms of the number of connec- 155 destinations and an average positioned in the top 20 of the tions within the continental net- time of 740 minutes. Malpensa continental ranking based on the work. takes 15th position (an improve- share of European GDP that can ment over previous years), with a be reached in a limited time. Malpensa comes 8th in the Eu- network of 184 destinations con- ropean ranking, with 83.5% of nected in an average time of 741 The connectivity of destinations European GDP reachable within

Consolidated Non-Financial Statement 2017 • 127 VALUE GENERATED BY THE AVIATION BUSINESS

2 hours of travel and a further mediately below Malpensa in the within 2 hours and a further 30.6% 15.6% in 2 to 4 hours. national ranking (25th in the Euro- in 2 to 4 hours. pean ranking), with approximately Linate Airport is positioned im- 65% of European GDP reachable

% EUROPEAN GDP REACHABLE BASED ON FLYING TIME

2016 2015 2014 MXP LIN MXP LIN MXP LIN % of EU GDP reachable within 2 hours 83.5 64.9 78.3 64.8 80.4 52 % of EU GDP reachable within 2-4 hours 15.6 30.6 20.9 30.8 18.9 43.5 European ranking position 8 ° 25 ° 11 ° 25 ° 9 ° 40 °

Source: ICCSAI Fact Book

The airport Services Charter is an Quality of aviation instrument created to establish services provided to the service quality level which as 19 an airport manager we guarantee passengers to our passengers.

SERVICE REGULARITY INDICATORS

Malpensa Malpensa Indicator Measurement unit Linate T1 T2

% of punctual flights/total Target 2017 80.0% 80.0% 85.0% Overall punctuality of flights departing flights 2017 Result 81.8% 82.6% 86.8% Time in minutes calculated Target 2017 22’50’’ 26’00’’ 16’50’’ 1st baggage return time from the aircraft block-on to from the aircraft block-on 1st baggage return in 90% of 2017 Result 19’55’’ 23’20’’ 16’15’’ cases Time in minutes calculated Target 2017 35’50’’ 37’00’’ 23’50’’ Last baggage return time from the aircraft block-on to from the aircraft block-on last baggage return in 90% 2017 Result 32’55’’ 27’00’’ 22’05’’ of cases

Boarding wait time for the Block-on waiting time in 90% Target 2017 4’ 3’ 3’ 1st passenger of cases 2017 Result 5’ 3’ 2’ Overall perception on Target 2017 95.0% 95.0% 95.0% regularity and punctuality of % of satisfied passengers services received at airport 2017 Result 99.4% 98.4% 97.6%

Source: SEA, Doxa 19 The data in parts of the table labelled ‘Airports in figures’ refer to 2016 (Source: 2017 Service Charter).

Consolidated Non-Financial Statement 2017 • 128 VALUE GENERATED BY THE AVIATION BUSINESS

The analysis by Terminals also shows a similar trend: Terminal 1 reports departing punctuality of 81.8% (+2.9% recovery), with Ter- minal 2 indicating a year to date value of 82.6% (+3.6% recovery).

Linate closes 2017 with punctuality values for passenger flights at 86.8%, compared to punctuality for arrivals at 87%.

Baggage delivery times, again this year, were well above Service Charter targets for all terminals. At Terminal 1, first baggage returns were within 22.50 minutes for 95.2% of flights and last baggage returns were within 35.50 minutes for 94.4 % of flights. Through the Service Charter, we approved through the Airport communicate to passengers, to- Operator Service Charter, which At Terminal 2, the delivery of the gether with airlines and compa- communicates and shares qual- first bag within 26 minutes was nies providing services to them, ity standard commitments with achieved for 97.6% of flights, our commitment to precise ser- stakeholders, including the Italian while the delivery of the last bag vice level quality objectives. Civil Aviation Authority (ENAC) within 37 minutes was achieved and the Users Committee, repre- for 99.2% of flights. The general performance in 2017 senting both airlines and airport was positive and in line with tar- operators. Misdirected baggage was sub- gets, despite inconveniences cre- stantially in line with that of pre- ated in relation to Linate’s first At Malpensa, departing flight vious years. terminal refurbishment phase punctuality for 2017 was 82% and to the positive but unexpect- with a recovery of punctuality (dif- ed growth of passenger traffic at ference between arrival punctual- Malpensa. ity and departure punctuality) of 3.1%. The targets were defined and

NUMBER OF MISDIRECTED BAGS (PER 1,000 PASSENGERS)

2.1 2.3 2.2 0.5 0.5 0.3 1.5 1.6 1.5 2.8 1.7 1.8 Malpensa T1 Malpensa T2 Malpensa (tot.) Linate

2015 2016 2017

Source: SEA

Consolidated Non-Financial Statement 2017 • 129 VALUE GENERATED BY THE AVIATION BUSINESS

ASSISTANCE SERVICE INDICATORS

Malpensa Malpensa Indicator Measurement unit Linate T1 T2

Perception of the ticket Target 2017 95.0% 95.0% 95.0% % of satisfied passengers service 2017 Result 93.4% 93.9% 94.7%

Waiting time in minutes in Target 2017 20’ 15’ 10’ Check-in waiting time 90% of reported cases 2017 Result 15’43” 15’51” 7’08”

Perception of check-in Target 2017 93.0% 93.0% 95.0% % of satisfied passengers waiting time 2017 Result 96.5% 95.9% 91.8%

Perception of passport Waiting time in minutes in Target 2017 7’ 8’ 7’30” control waiting time 90% of reported cases 2017 Result 8’19” 6’05” 7’11”

Perception of passport Target 2017 95.0% 95.0% 95.0% % of satisfied passengers control waiting time 2017 Result 97.3% 98.0% 95.3%

Source: SEA, Doxa

Our commitment is to facilitate At Terminal 1, 8 mins 19 secs in re- personnel, self check-in desks. all of the check-in and boarding lation to a limit of 7 mins 00 secs; activities, while maintaining full at Terminal 2, 6 mins 05 secs in re- In order to cope with increased compliance with the safety and lation to a limit of 8 mins 00 secs; security measures, we have devel- control procedures. For these at Linate, 7 mins 11 secs in relation oped the infrastructural and hu- purposes, we make available also to a limit of 7 mins 30 secs. man resources needed for these a Fast Track lane for passengers activities, while maintaining wait- which, qualifying for such, wish to At the airports, passengers may ing times in line with the declared reduce to the minimum possible utilize, in addition to the desks targets. their line waiting time. normally managed by assistance

Consolidated Non-Financial Statement 2017 • 130 VALUE GENERATED BY THE AVIATION BUSINESS

CUSTOMER INFORMATION SERVICE INDICATORS

Malpensa Malpensa Indicator Measurement unit Linate T1 T2

Easy to use and updated Target 2017 90.0% 90.0% 90.0% % of satisfied passengers website 2017 Result 93.2% 97.4% 91.2% Perception of the efficacy of Target 2017 95.0% 95.0% 95.0% the operative information % of satisfied passengers points 2017 Result 96.6% 97.8% 94.1% Perception of the clarity, Target 2017 98.3% 92.0% 98.4% comprehensibility and % of satisfied passengers effectiveness of internal 2017 Result 97.9% 96.6% 95.0% signage Perception of the Target 2017 95.0% 95.0% 95.0% professionalism of staff (info % of satisfied passengers point, security, etc.) 2017 Result 98.1% 97.6% 95.8% Overall perception of the Target 2017 98.5% 93.0% 98.5% efficacy and accessibility of public information services % of satisfied passengers (monitors, announcements, 2017 Result 99.0% 98.4% 97.9% internal signage etc.)

Airports in numbers T1 T2 Linate Operational information points (desks + virtual desk) 14 4 5 Number of information monitor blocks 210 66 46

Source: SEA, Doxa

2017 marked the final phase of During the last 2 months of the Customer Satisfaction service consolidation in terms of year, an engaging advertising vid- the reliability of the information eo was created with the aim of The surveys carried out in 2017 by services telepresence system, the better expressing the features Doxa (a leading market research Live Info Point. and usability of the service. institute) and concerning services at the airports of Malpensa and The use of the service by passen- The video is broadcast continuous- Linate highlight a very high satis- gers, however, generated an an- ly on the 46-inch vertical monitor faction level of passengers. nual increase, albeit minimal, of of the totem and, with the dynam- 6% at Malpensa. ic image of an operator, together The new Customer Satisfaction with textual prompts (e.g. “Look- rating system is based on the Cus- Comparing September 2015, the ing for your gate?”, “Do you need tomer Satisfaction Index (on a month in which the installation to check-in?”, etc.), attracts passen- scale of 0 to 100). of all totems at the 2 airports was gers in search of help by way of a completed (16 in total, 10 at Mal- welcoming gesture. The first feed- pensa Terminal 1, 3 at Malpensa back received indicates a marked Terminal 2 and 3 at Linate), with increase in the use of the system the same month of 2017, video after the implementation of the conference calls increased 20%. new communication tool (>20% compared to the previous period).

Consolidated Non-Financial Statement 2017 • 131 VALUE GENERATED BY THE AVIATION BUSINESS

DEVELOPMENT OF THE CUSTOMER SATISFACTION INDEX

2017 2016 2015 Malpensa T1 75 75 73 Malpensa T2 72 72 72 Linate 68 70 70 System 72 73 72

Source: SEA, Doxa

Results are stable compared to system also allows immediate in- We treat all complaints and issues 2016 for both Malpensa terminals, tervention in case of negative as- reported on services offered with but can be considered to follow a sessments concentrated in a short maximum attention and discre- positive trend if the significant period of time. tion and we commit to respond increase in airport traffic is taken in the shortest time possible, and into consideration. Linate, due in however within 28 days of receipt part to inconveniences related to Customer Relationship of the communication. In addition to quality surveys, as airport op- the first phase of works on the air- Management and port facade, marked a 4% decline, erator, we analyze all complaints a trend that, on the other hand, Complaints Management (even if only less than one third confirms the usefulness of the re- refer directly to the services or furbishment investments planned Since 2010, we have been using scope of expertise of the group’s for the coming years. an innovative CRM platform de- companies), in order to address veloped to manage relations with all critical elements reported in To supplement the perceived our customers, who, as passen- the airport system. The Customer quality monitoring system, a 24- gers, have different demands and Relationship Management system hour passenger satisfaction sur- expectations from other service facilitates both passengers in sub- veying system was introduced users. In 2017, registered users mitting complaints and our man- in 2015 concerning various indi- of the SEA CRM system reached agement of such complaints. vidual services. This system uses 2,110,000 (up approximately 50% varies faces that can be chosen compared to 2016). This very en- on a totem (from a smiley face couraging trend was mainly at- to a dissatisfied face, through 4 tributable to the Wi-Fi system levels of satisfaction). The tool is and e-commerce. Over 1,485,000 simple yet effective because it al- subscribers expressed consent lows the passenger to express an in allowing us to send them the opinion immediately after using newsletter and research question- the service. There are currently 30 naires, allowing us to inform the totems spread across the 3 Ter- airport user and to understand minals, monitoring security areas, expectations and evaluations, in sanitary services, commercial busi- order to focus our airport service nesses and general maintenance offer. areas. A total of 2,215,000 face presses were recorded in 2017. Numerous channels are available for the reporting of complaints: The monitoring provides daily and hourly results, allowing timely in- ◼◼ website (www.seamilano.eu - terventions, the improvement “contacts” section); of quality standards and the pre- ◼◼ fax; vention of medium to long-term ◼◼ form sent at the Info desk; deviations. A service-specific alert ◼◼ letter.

Consolidated Non-Financial Statement 2017 • 132 VALUE GENERATED BY THE AVIATION BUSINESS

COMPLAINTS CLASSIFICATION BY ISSUE IN 2017 (%)

Type % Baggage and lost & found 30 Security controls 12 Check-in, boarding 9 Flight operations 4 Parking 14 Comfort 10 Information 2 Retail 3 Other 16

Source: SEA

Customer Contact Center via From August, a daily transfer of media space saw development telephone and social media calls was introduced to the out- of the channels managed by our The call center service again in sourced call center company (the call center (currently Twitter, 2017 reported a double-digit contract with the company Tele- Facebook and the chat and recall (+20%) increase in calls, indicating survey covers also the manage- service which may be activated in percentage terms a link with ment of overflow calls in cases of by app), requiring the continued the general increase in traffic. operative emergencies) for those presence of a dedicated operator: concerning the lost and found ser- the opening of a chat bot plat- Specifically, requests increased vice and connections to and from form and the WhatsApp channel for information on flights (33%) the airport (from 800 to more are currently in progress. and on parking (26%); the remain- than 1000 calls a month), in order ing 40% is broken down between to recover the operating capacity airport services and commercial, of the call center staff. check-in and boarding information, Lost & Found and baggage. In fact, the success of SEA’s social

Consolidated Non-Financial Statement 2017 • 133 Value generated by the Non-Aviation Business VALUE GENERATED BY THE NON-AVIATION BUSINESS

Value generated by the Non-Aviation Business

Non-aviation spaces; operators and has resulted not ◼◼ variable fees (royalties) calcu- only in the introduction of inno- customer profile lated on the basis of differing vative sales models and the ex- parameters according to the tension of the brand portfolio op- The Non-Aviation commercial ac- activity carried out (such as, for erating out of the Milan airports, tivities not managed directly are example purposes, revenues re- but also the use of analysis instru- governed by specific contracts turned or cargo handled), pro- ments (including customer profil- signed with third party operators, viding however for guaranteed ing, targeted marketing plans and under which we confer the organ- minimums and supported only quality control systems) which en- ization and management of activi- by a bank surety. able the identification and most ties from time to time considered complete satisfaction of customer appropriate, in addition to the use The development of Non-Aviation demands. of the airport spaces necessary for activities concerns differentiated the carrying out of operations. strategies according to the vari- Public sales points ous terminals at Malpensa and Lin- The contracts have variable du- ate airports, in order to satisfy the In 2017, our airports had 131 rations (on average 3 years) and needs of the range of passenger points of sale, corresponding to do not provide for tacit renewal. and user types at the terminals. 16,238 m2 of commercial space SEA’s remuneration under these (down 366 m2), of which 12,842 contracts generally concerns: This strategy has been developed m2 at Malpensa (10,717 at T1 and with a view to collaboration and 2,125 at T2) and 3,396 m2 at Lin- ◼◼ fixed annual fees for the use of partnership with the main sector ate.

SALES POINTS AT THE MILAN AIRPORTS

Sales points Sales points Sales points m2 2017 m2 2016 m2 2015 2017 2016 2015 Malpensa Terminal 1 10,717 10,829 10,270 73 72 90 Malpensa Terminal 2 2,125 2,191 2,280 18 18 18 Linate 3,396 3,584 3,587 40 39 42

Source: SEA

Consolidated Non-Financial Statement 2017 • 135 VALUE GENERATED BY THE NON-AVIATION BUSINESS

Food & Beverage an area of approximately 12,065 m2 (up 549 m2), of which 9,127 m2 In 2017, our airports had 63 bars at Malpensa (7,375 at T1 and 1,752 2 and restaurants, corresponding to at T2) and 2,938 m at Linate.

FOOD & BEVERAGE OPERATIONS AT THE MILAN AIRPORTS

2017 Food 2016 Food 2015 Food m2 2017 m2 2016 m2 2015 & Beverage & Beverage & Beverage points points points Malpensa Terminal 1(*) 7,375 6,741 7,521 32 29 31 Malpensa Terminal 2 1,752 1,837 1,693 13 14 11 Linate (*) 2,938 2,938 2,938 18 18 18

(*) VIP lounges and external areas are not included, except for the Taxi Bar and a food court in the Malpensa Terminal 1 cargo area.

Source: SEA

◼◼ retail activities (duty free and der the account “services and Economic duty paid sale to the public, ca- other revenues” (such as ticket Performance of tering, car hire, advertising, the office operations, vehicle main- management of spaces for the tenance, real estate, including the Non-Aviation carrying out by third parties of rentals and concessions of sec- Business banking activities); tions of the airport and techno- ◼◼ the management of parking; logical and design services and The Non-Aviation activities con- ◼◼ the management of cargo spaces; also non-regulated security ser- cern the provision of aviation sup- ◼◼ the management of advertising vices). port operations completion ser- spaces; vices and include: ◼◼ other activities, included un-

PORTION OF REVENUES FROM NON-AVIATION ACTIVITIES

2017 2016 2015 Non-Aviation operating revenues (thousands of Euro) 227,263 216,900 214,864 Non-Aviation revenues (% of total revenues) 31.3 31.0 30.9 Other revenues (% of total revenues) 68.7 69.0 69.1

Source: SEA

Consolidated Non-Financial Statement 2017 • 136 VALUE GENERATED BY THE NON-AVIATION BUSINESS

TYPE OF REVENUES FROM NON-AVIATION ACTIVITIES Non-Aviation Business operating revenues reported in 2017 totaled Euro 227.3 million (+4.8% 2017 2016 % of 2017 total compared to the previous year) (Euro (Euro Non-Aviation and represent approx. 31.3% of thousands) thousands) Revenues total Group revenues. The most Retail 95,392 90,088 42.0 significant Non-Aviation Business revenue came from retail activ- Parking 64,234 60,226 28.3 ities (42.0% of total revenues), Cargo 15,838 12,688 7.0 followed by parking activities (28.3%), with increases over 2016 Advertising 10,495 10,451 4.6 of 5.9% and 6.7% respectively. In Premium service 18,066 17,874 7.9 terms of retail revenues, shop revenues increased by 5.2% and food Real estate 2,458 3,179 1.1 & beverage revenues increased by Services and other 5.3%, over the previous year. 20,780 22,394 9.1 revenues Total 227,263 216,900 100

Source: SEA

TYPE OF RETAIL REVENUES Retail

The most significant retail reve- Retail service 2017 (Euro 2016 (Euro % of total Retail nue item was shop sales (51.9% of revenues thousands) thousands) 2017 the total), followed by food & bev- Shops 49,510 47,070 51.9 erage (21.0%), car rental (17.2%) and finally bank services (9.9%). Food & beverage 20,052 19,039 21.0 Car Rental 16,379 14,761 17.2 Bank services 9,451 9,218 9.9 Total retail revenues 95,392 90,088 100

Source: SEA

The sales points within the pas- to luxury and duty-free shop- senger terminal offer both duty ping; free products (therefore exclud- ◼◼ Malpensa Terminal 2 dedicated ing VAT and other taxes), and duty to low cost; paid products (therefore under ◼◼ Linate focused on a specialized normal conditions and exclud- high-end business offer. ing therefore the benefit of the above-mentioned exemption).

The retail sector activities carried out at our airports offer the public and passengers a wide range of products and brands which satisfy the entire customer base and are differentiated at each terminal:

◼◼ Malpensa Terminal 1 dedicated

Consolidated Non-Financial Statement 2017 • 137 VALUE GENERATED BY THE NON-AVIATION BUSINESS

COMMERCIAL AREAS OF THE MILAN AIRPORTS - SHOPS + FOOD & BEVERAGE (M2)

28,870 6,651 2017 3,877 18,342

29,210 6,837 2016 4,028 18,345

29,379 6,840 2015 3,973 18,566

Total Linate Malpensa T2 Malpensa T1

Source: SEA

RETAIL AREAS OF THE MILAN AIRPORTS BY MILLIONS OF PASSENGERS (M2/PASSENGERS)

2017 2016 2015 Malpensa T1 1,234.1 1,461.9 1,583.4 Malpensa T2 540.4 595.5 591.3 Linate 689.4 709.5 709.6

Source: SEA

We do not directly carry out retail mation of the passenger foot dium and long-haul carriers, for activity (sale to the public, duty traffic layout and retail stores in example by increasing food and free and duty paid, catering, car the Malpensa Terminal 1 Schen- beverage offerings rather than hire, management of spaces for gen boarding areas, a project shops, similar to recent trends the carrying out by third parties that represented the culmination in travel retail and shopping of banking activities), but we al- of the restructuring process that centers, in pursuit of increasingly locate to third parties the use of had begun in 2013. The retail pro- varied, diversified, modern and commercial spaces at the Milan file of Terminal 1 was complete- international offerings. The con- airports. ly redesigned to suit the various struction work focused on the segments of demand created by Schengen boarding area, where The most noteworthy event in the shared use of the same pas- the commercial plaza was fully 2017 from a commercial stand- senger boarding areas by low- renovated in the second half of point was the gradual transfor- cost airlines and legacy short, me- the year, installing new furnish-

Consolidated Non-Financial Statement 2017 • 138 VALUE GENERATED BY THE NON-AVIATION BUSINESS

ings and changing the foot traffic styled its shop. The completion of isa Go. New store openings at layout. In 2017 some stores such the restyling project also brought Linate included DoDo in February as Moleskine, Mandarina Duck, in new brands such as Blue Spir- and the Tumi/Samsonite store in Venchi, Unieuro and Coccinelle it/Morellato, Benetton, Bottega September, in the airside area. moved to bigger new locations, Verde, Nau Ottica, Daniel Wel- whereas Boggi completely re- lington and, most recently, Carp-

AREAS ALLOCATED TO PUBLIC SALE ACTIVITIES (M2)

16,238 Total 16,604 16,137

3,396 Linate 3,584 3,587

2,125 Malpensa T2 2,191 2,280

10,717 Malpensa T1 10,829 10,270

2017 2016 2015

Source: SEA

We have contracted the catering business from the group’s subsidiary SEA Services, as well as other third parties. In particular, contracts have been signed with specialised operators (including Autogrill, Chef Express and My- Chef), under which we have sub- contracted the catering activities, allocating for these purposes a number of spaces in the airport to these operators.

Consolidated Non-Financial Statement 2017 • 139 VALUE GENERATED BY THE NON-AVIATION BUSINESS

AREAS ALLOCATED TO FOOD & BEVERAGE (M2)

12,065 Total 11,516 12,152

2,938 Linate 2,938 2,938

1,752 Malpensa T2 1,837 1,693

7,375 Malpensa T1 6,741 7,521

2017 2016 2015

Note: Does not include the VIP lounges and external areas

Source: SEA

Parking ing Italia. We directly manage all ment during the year was the res- the car parks of Linate Airport and toration of the full operability of Parking management at the Mi- that of Malpensa Terminal 2. the Malpensa car parks, that had lan airports is carried out in part been disrupted, in 2015, by the directly by us and in part under Parking at Terminal 1 however has construction works of the railway sub-contact by the specialised been managed since April 2007 station at Terminal 2. third party operator APCOA Park- by APCOA. A significant achieve-

NUMBER OF PARKING SPACES

2017 2016 2015 Malpensa T1 6,879 7,279 6,642 Malpensa T2 2,700 2,440 2,000 Linate 3,736 3,736 3,736 Total 13,315 13,455 12,378

Note: The figures refer only to the number of available spaces

Source: SEA

Consolidated Non-Financial Statement 2017 • 140 VALUE GENERATED BY THE NON-AVIATION BUSINESS

In general, the growth of the park- MALPENSA T1 - PARKING SERVICE PERFORMANCE INDICATORS ing business was supported by ongoing communication operations focused on establishing the Year Capacity (No. spaces) Paying car transits (No.) Average stay (days) products position on the market, 2017 6,879 866,472 3.2 accompanied by campaigns fea- turing significant price cuts, in par- 2016 7,279 675,811 3.3 ticular on the online channel for 2015 6,642 662,398 3.3 the seasonal traffic peaks.

Note: The capacity figures refer to available spaces and utilizable during the year. Particular attention was paid to Source: SEA communication and marketing to promote ViaMilano Parking, both through seasonal promotional MALPENSA T2 - PARKING SERVICE PERFORMANCE INDICATORS campaigns and enhancement of the brand itself. This was implemented via communication tools Year Capacity (No. spaces) Paying car transits (No.) Average stay (days) and road signs near to the airports, as well as via direct com- 2017 2,700 216,863 2.6 munication to the target audience 2016 2,440 210,458 2.5 in Milan, in particular, but also in Lombardy and surrounding re- 2015 2,000 190,363 2.4 gions. Attention was also paid to the B2B market, with promotional Note: The capacity figures refer to available spaces and utilizable during the year. activities addressed to the leisure Source: SEA world (tour operators) and the professional world (large companies), through participation in var- LINATE - PARKING SERVICE PERFORMANCE INDICATORS ious sector events and trade fairs.

Year Capacity (No. spaces) Paying car transits (No.) Average stay (days) 2017 3,736 596,550 2.6 2016 3,736 664,742 2.7 2015 3,736 660,756 2.6

Note: The capacity figures refer to available spaces and utilizable during the year. Source: SEA

The perception expressed by dedicated lane is available for pas- Quality of passengers concerning their per- sengers on the Milan-Rome route. Non-Aviation sonal safety level and the hand services provided baggage control service is overall very strong both at Malpensa 20 to passengers and Linate. At this latter airport, in addition to the availability of a Non-aviation services provided to “fast track” lane dedicated to VIP passengers in 2017 also brought customers and “facilitators” (per- 20 The data in parts of the table labeled extremely positive results, achiev- sonnel who provide passenger ‘Airports in figures’ refer to 2016 (Source: ing targets in almost all cases. support at the security lanes), a 2017 Service Charter).

Consolidated Non-Financial Statement 2017 • 141 VALUE GENERATED BY THE NON-AVIATION BUSINESS

TRAVEL SAFETY AND PERSONAL SECURITY INDICATORS

Malpensa Malpensa Indicator Measurement unit Linate T1 T2

Overall perception of the Target 2017 94.0% 94.0% 95.0% passenger and hand luggage % of satisfied passengers security service 2017 Result 97.2% 96.7% 94.3%

Overall perception of the Target 2017 94.0% 94.0% 95.0% personal and belongings % of satisfied passengers safety level at the airport 2017 Result 98.2% 97.8% 96.3%

Airports in numbers T1 T2 Linate Internal security service 24 h 24 h 24 h

Source: SEA, Doxa

Constant attention is focused on order to identify and choose any reducing line waiting times, with- corrective actions. out sacrificing the accuracy of controls. Monitoring is constant, in

COMFORT INDICATORS DURING TIME AT THE AIRPORT

Malpensa Malpensa Indicator Measurement unit Linate T1 T2

Target 2017 92.0% 92.0% 95.0% Perception of the availability % of satisfied passengers of luggage trolleys 2017 Result 96.2% 99.4% 93.7%

Perception of the efficiency Target 2017 93.0% 93.0% 90.0% of passenger transfer systems % of satisfied passengers (escalators, elevators, people movers, etc.) 2017 Result 96.2% 95.2% 93.3%

Perception of the efficiency Target 2017 95.0% 93.0% 93.0% % of satisfied passengers of air conditioning systems 2017 Result 96.7% 95.0% 92.5%

Perception of the overall Target 2017 97.3% 93.0% 97.2% % of satisfied passengers comfort level of the terminal 2017 Result 98.7% 96.5% 93.9%

Airports in numbers T1 T2 Linate Available space (m2) 146,500 30,000 33,600 Seats in waiting areas 5,249 874 1,268 Baggage trollies (€) 2 2 2

Source: SEA, Doxa

Consolidated Non-Financial Statement 2017 • 142 VALUE GENERATED BY THE NON-AVIATION BUSINESS

The sense of comfort experienced of satisfaction for Malpensa, while by passengers at the airport is con- not hitting the target for Linate. sidered of great importance and overall the opinion expressed was

CLEANING AND HYGIENIC CONDITIONS INDICATORS

Malpensa Malpensa Indicator Measurement unit Linate T1 T2

Perception of the cleaning Target 2017 91.2% 86.0% 90.0% level and functionality of % of satisfied passengers toilets 2017 Result 90.3% 86.6% 89.7%

Perception of the cleanliness Target 2017 95.0% 95.0% 95.0% % of satisfied passengers level at the airport 2017 Result 97.5% 95.4% 92.6%

Airports in numbers T1 T2 Linate Total number of toilets 546 147 250 Total number of disabled toilets 57 13 15

Source: SEA, Doxa

At Malpensa and Linate airports, areas, hygienic services are availing in general, but is still in line the spaces available to passen- able for persons with reduced with targets. gers and the hygienic servic- mobility. Passenger satisfaction es are constantly controlled so regarding the cleanliness and that cleanliness is guaranteed functionality of toilets is lower throughout the day. At all airport than that regarding airport clean-

Consolidated Non-Financial Statement 2017 • 143 VALUE GENERATED BY THE NON-AVIATION BUSINESS

INDICATORS OF ADDITIONAL SERVICES

Malpensa Malpensa Indicator Measurement unit Linate T1 T2

Perception of Wi-Fi Target 2017 85.0% 85.0% 93.0% connectivity inside the % of satisfied passengers terminal 2017 Result 75.6% 77.0% 91.1%

Perception of the availability Target 2017 70.0% 70.0% 83.0% of mobile phone and laptop % of satisfied passengers recharging stations in common areas, where present 2017 Result 81.2% 71.1% 65.8% % of arriving/departing Compatibility of bar opening Target 2017 100.0% 100.0% 100.0% passenger flights compatible hours with airport opening with the bar opening hours in hours 2017 Result 100.0% 99.0% 99.0% the respective areas

Perception of the adequacy Target 2017 75.0% 70.0% 80.0% of smoking rooms, where % of satisfied passengers present 2017 Result 63.7% 50.2% 55.3%

Perception of shop and Target 2017 91.0% 91.0% 91.0% newsstand availability, % of satisfied passengers quality & prices 2017 Result 96.7% 93.9% 94.0%

Perception of the availability, Target 2017 78.0% 70.0% 71.0% quality and prices of bars % of satisfied passengers and restaurants 2017 Result 91.8% 90.0% 88.0%

Perception of the availability Target 2017 90.0% 90.0% 91.0% of drink and snack % of satisfied passengers distributors, where present 2017 Result 94.6% 100.0% 96.6%

Airports in numbers T1 T2 Linate Not Bag storage capacity (m2) 130 107 present

Source: SEA, Doxa

INDICATORS OF MODAL INTEGRATION

Malpensa Malpensa Indicator Measurement unit Linate T1 T2

Perception of the clarity, Target 2017 93.0% 93.0% 91.0% comprehensibility and % of satisfied passengers effectiveness of external signage 2017 Result 97.5% 96.8% 94.4%

Perception of the adequacy Target 2017 93.0% 93.0% 91.0% % of satisfied passengers of airport-city connections 2017 Result 97.3% 97.3% 93.6%

Source: SEA, Doxa

Consolidated Non-Financial Statement 2017 • 144 VALUE GENERATED BY THE NON-AVIATION BUSINESS

We are required to support and tion. Linate airport, very close to ◼◼ the attitude and conduct of promote action plans for the up- the city of Milan, is connected to sales personnel; grading of road and rail connec- the city center by a city bus and by ◼◼ their level of knowledge and tions to and from the airports, in shuttle with Central Station and professional ability; synergy with the relevant institu- Malpensa airport. ◼◼ their problem-solving capacity; tional bodies. Malpensa Airport ◼◼ their sales skills, customer at- can be reached via Milan’s Cador- tention ability and proposal of na railway station using the ‘Mal- Commercial offer complementary purchases; pensa Express’ train service, with ◼◼ their capacity to listen, empa- travel times of around 29 minutes quality thy and demeanor; and a frequency of every 30 min- ◼◼ fulfilment of the corporate phi- utes or using the Trenitalia service We introduced in 2011 “Mystery losophy; (arriving in Gallarate and continu- shopping” - an instrument which ◼◼ in-store feel. ing by bus or taxi). Road accessibil- verifies the quality of commer- ity is guaranteed by the state road cial services - based on visits and During the year 2017, 225 com- SS 336 (via the Busto Arsizio exit interviews carried out by person- mercial businesses generated of the A8 motorway) and by the nel “incognito” in order to obtain a total of 792 different visits in highway that connects to the A4 structured information on the terms of store types and airport Turin to Milan motorway (via the shopping experiences of airport locations. Marcallo Mesero exit). Between users. At the sales point, the mys- the two Malpensa terminals, be- tery shopper, undertaking the ex- sides the free shuttle service, a rail perience of a “typical client” focus- connection has just begun opera- es upon:

MYSTERY SHOPPING - SHOPS VISITED BY TYPE OF ACTIVITY

8% 27% Services Food

65% Stores

Source: SEA

Consolidated Non-Financial Statement 2017 • 145 VALUE GENERATED BY THE NON-AVIATION BUSINESS

MYSTERY SHOPPING - SHOPS VISITED BY LOCATION

30% Linate

55% Terminal 1

15% Terminal 2

Source: SEA

The perceived quality of the com- 4 out of 5 cases. Average values are in line with sat- mercial businesses at our airports isfactory levels and show an im- in 2017 was around an average In all airports, the proportion of provement over 2016. value of 78.63%, slightly higher those saying they were ‘satisfied’ than the previous year. with the experience has grown. In Terminal 2, in particular, customer Overall, the perception of cus- perception in relation to delivered tomers was positive in more than value confirmed the 2016 trend.

MYSTERY SHOPPING - AVERAGE PERCEIVED QUALITY VALUE (1-100)

78.87 78.59 2017 78.05 78.99 78.63

77.12 77.20 2016 75.88 77.26 76.86

77.40 75.53 2015 74.62 76.65 75.97

Session 1 Session 2 Session 3 Session 4 Total Source: SEA

Consolidated Non-Financial Statement 2017 • 146 VALUE GENERATED BY THE NON-AVIATION BUSINESS

Analyzing the data according to 76.70% respectively), with ser- delivered value confirmed 2016’s business type, stores emerge vices registering a decrease com- trend: on average, perception is with above average satisfaction pared to 2016 (77.89%). higher than delivered value, ex- (80.09%), while food and general cept in the food sector. services emerge with below av- Comparing average values, cus- erage satisfaction (75.69% and tomer perception in relation to

MYSTERY SHOPPING - AVERAGE PERCEIVED QUALITY VALUE BY TYPE OF BUSINESS (1-100)

74.50 75.28 Food 76.51 76.49 75.69 81.32 80.23 Stores 78.85 79.91 80.09 74.29 75.55 Services 76.96 79.73 76.70 78.87 78.59 Total 78.05 78.99 78.63

Session 1 Session 2 Session 3 Session 4 Total Source: SEA

MYSTERY SHOPPING - AVERAGE VALUE OF PERCEIVED QUALITY BY AIRPORT (1-100)

75.55 Terminal 1 75.38 77.54 72.41 Terminal 2 74.17 78.07 78.27 Linate 81.01 80.85

2015 2016 2017 Source: SEA

Consolidated Non-Financial Statement 2017 • 147 VALUE GENERATED BY THE NON-AVIATION BUSINESS

As regards the performance of increase in the most significant achieved good results regarding the various airports, both Termi- values for Malpensa Airport, es- Terminal 1 in terms of sale conclu- nal 1 and Terminal 2 of Malpensa pecially Terminal 2, while Linate sion and welcome, regarding Ter- recorded an improvement, while Airport, in 2017, remained in line minal 2 in terms of the previous Linate remained substantially sta- with the previous year. two aspects plus general service, ble. while Linate recorded the best re- The Mystery Shopping 2017 initia- sults in terms of sale conclusion. Analyzing the average value of tive, compared to 2016, revealed perceived quality in the three-year a general improvement in perfor- period 2015-2017, there was an mance. The shopping experience

MYSTERY SHOPPING - DRIVER OF PERCEIVED QUALITY BY AIRPORT (1-100)

97.41 External 97.94 96.37 91.39 Internal 88.88 92.46 87.39 Reception 89.13 88.75 89.06 Product 90.84 91.58 67.77 Service 71.86 73.98 71.75 Purchases 72.45 74.02 51.48 Conclusion 49.77 58.00

Terminal 1 Terminal 2 Linate Source: SEA

Consolidated Non-Financial Statement 2017 • 148 Management efficiency and productivity MANAGEMENT EFFICIENCY AND PRODUCTIVITY

Management efficiency and productivity

People management the development of mutual trust, Organizational on the transparency of intentions management policies and on openness to dialogue, and opposes abuses of authority, bias As established by the corporate Over the last decade, we have and the pursuit of undue personal Code of Conduct, relations with experienced the impact of the benefit through the leveraging of employees are in full compliance global economic and financial cri- hierarchical position. with legislation protecting work- sis and, in particular, the effects ers and working conditions, guar- of the de-hubbing of Alitalia at anteeing the right to working Our people Malpensa airport. The significant conditions that fully respect the As at December 31, 2017, the to- reduction of company revenues dignity of individuals. necessitated a restructuring that tal human resources of the group amounted to 2,800 employees impacted our personnel and that In this regard, we actively employ (2,837 including temporary staff), of our subsidiaries. As part of the measures to prevent all conduct down by 50 employees since the ten-year restructuring plan (from that may be discriminatory or end of 2016 (-1.8%). Women rep- 2007 to 2017), we placed employ- damaging to individuals, safe- resented 28.4% of employees, ment protection as a priority in guarding personnel from acts of predominately concentrated the context of possible scenarios. physical and psychological abuse, in administrative and front-end First, tools such as temporary re- sexual harassment, intimidation roles, and distributed as follows: dundancy (under the ‘Cassa Inte- and hostile attitudes in work re- 3.8% executives-managers, 23.0% grazione’ framework), solidarity lations, both internally and exter- white-collar, 1.7% blue-collar. The contracts, incentivized voluntary nally. We are also committed to predominance of men in manu- redundancy and un-interrupted opposing all forms of illicit work al roles is motivated by specific access to pensions after a certain and require that employees and legislation on airport operations, time on the mobility list, were all contractors report any behavior which penalizes women over men. integrated in the restructuring or action in violation of the prin- plan. These solutions allowed the ciples of legitimate employment, limitation of collective dismissals for the protection of themselves, outside of the cases previously their colleagues and the company. highlighted. Second, the group We also promote actions aimed at implemented significant profes- supporting the growth and pro- sional retraining programs for or- fessional development of person- ganizational units affected by the nel, with particular attention to is- streamlining, and outsourcing to sues of gender, age and disability. roles (e.g. security officers) and business areas of growth in terms On an organizational level, we of workforce. These solutions consider the corporate hierarchy were accompanied by training, and authority framework as func- field mentoring and certification tional to the effectiveness and ef- support, when demanded by new ficiency of the organization, and, roles. consequently, to the pursuit of corporate objectives. Accordingly, our managerial style is founded on

Consolidated Non-Financial Statement 2017 • 150 MANAGEMENT EFFICIENCY AND PRODUCTIVITY

SEA GROUP PERSONNEL BY ROLE CLASSIFICATION AND GENDER AS AT DECEMBER 31 (NO.)

2017 2016 2015 Female Male Total Female Male Total Female Male Total Executives 7 49 56 7 49 56 7 49 56 Managers 98 176 274 97 172 269 99 171 270 White-collar 644 1,167 1,811 666 1,157 1,823 678 1,164 1,842 Blue-collar 47 612 659 52 650 702 52 667 719 Total 796 2,004 2,800 822 2,028 2,850 836 2,051 2,887

Source: SEA

SEA GROUP PERSONNEL AND CONTRACTORS BY LOCATION AND GENDER AS AT DECEMBER 31 (NO.)

2017 2016 2015 Female Male Total Female Male Total Female Male Total Linate 357 816 1,173 356 826 1,182 365 837 1,202 Malpensa 444 1,220 1,664 466 1,218 1,684 467 1,222 1,689 Other locations* ------4 10 14 Total 801 2,036 2,837 822 2,044 2,866 836 2,069 2,905

* Personnel at Rome Ciampino and Venice

Source: SEA

Empowerment policies is provided by external suppliers training. for specific interventions relating Training to skills not covered by the dedi- Of particular note are training in- Specialized technical and mana- cated training centers. terventions aimed at improving gerial skills are an intangible asset the ‘customer orientation’ of personnel dedicated to security ac- fundamental for our growth. Our Mandatory training (including that tivities (over 2,800 hours) and ‘ef- heavily regulated sector also im- relating to work and airport safe- fective and inclusive’ leadership’, poses a series of specific airport ty) constitutes approximately 53% addressed to executives (over operator training obligations, of total training. As a whole, train- 1,800 hours) and aimed at devel- which intensifies our commit- ing is considered one of the most oping and promoting a culture of ment to the programming and essential elements of profession- diversity and gender integration, provision of training courses, cer- al development at SEA, with the at introducing new methods of tifications, renewals and updates. assessment of skills (knowledge, leadership and at strengthening theory and competence) a central In 2017, training hours totaled career development. over 57,000, corresponding to element in the process of talent management and professional 32.7 full time equivalent training ‘Alzare lo sguardo’, or ‘Look up’, growth. hours. Through 2 dedicated train- an innovative initiative aimed at ing centers (1 at Linate and 1 at SEA’s young professionals, was Malpensa), we directly manage In addition to this significant un- also held. the provision of all airport specif- dertaking, during 2017, SEA em- ic training (both mandatory and ployees were provided with over non-mandatory). Limited support 27,000 hours of non-mandatory

Consolidated Non-Financial Statement 2017 • 151 MANAGEMENT EFFICIENCY AND PRODUCTIVITY

AVERAGE NUMBER OF PER CAPITA TRAINING HOURS BY GENDER & CATEGORY

2017 2016 2015 Female Male TOTAL Female Male TOTAL Female Male TOTAL Executives 23.1 17.9 18.7 16.6 18.7 18.4 13.0 17.4 16.8 Managers 32.3 27.6 29.3 16.8 15.0 15.6 14.7 10.8 12.3 White-collar 8.7 7.9 8.2 6.1 5.1 5.5 4.8 9.4 7.7 Blue-collar 2.4 5.4 5.1 0.5 3.6 3.4 0.6 4.5 4.2 Total 9.1 11.4 9.7 7.1 5.8 6.2 5.8 8.2 7.5

Note: The data does not include mandatory training hours. The 2015-2016 data refers only to SEA.

Source: SEA

Per capita training hours increased centage of employees undergoing imately three years, with the last for all role categories, except in performance assessments contin- assessment taking place in 2015 the case of managers, for whom ues to be in line with the previous and resulting in over 2,350 skills training hours were in line with two years and concerns only exec- profiles, in relation to 85% of the those in 2016. utives and managers, while skills company population. assessments are widespread and Growth address all staff. This process has Subdivided by gender, the per- an indicative frequency of approx-

EMPLOYEES INVOLVED IN FORMALIZED PERFORMANCE EVALUATION PROCESSES BY GENDER AND CATEGORY (%)

2017 2016 2015 Female Male TOTAL Female Male TOTAL Female Male TOTAL Executives 100% 100% 100% 100% 100% 100% 100% 100% 100% Managers 27% 33% 29% 27% 32% 29% 23% 24% 24%

Note: Percentages refer to executives and managers involved in formalized assessment processes on the basis of the Group MBO process. In order to ensure data representation uniformity, the 2015 and 2016 data was recalculated.

Source: SEA

Ratio between entry-level wage ing which various role and salary Diversity and local minimum salary, by adjustments are envisaged. The Regarding the gender pay gap, the gender average gross annual salary (GAS) data from 2017 is in line with that In SEA, newly hired recent gradu- in 2017 was higher than the local of 2016, with average salaries for ates (including graduates with sig- minimum wage by 17% for men men and women differing mainly nificant internship and profession- and 9% for women. For recent in relation to the total annual real experience of less than 3 years) graduates, there are also various muneration. are normally placed at a 2B/2A lev- dedicated training and develop- el and included in a career devel- ment courses, such as the ‘Alzare opment and professional growth lo Sguardo’, or ‘Look up’, course program of around 3 years, dur- administered in 2017.

Consolidated Non-Financial Statement 2017 • 152 MANAGEMENT EFFICIENCY AND PRODUCTIVITY

FEMALE/MALE SALARY AND REMUNERATION RATIO BY CATEGORY

GAS 2017 (a) Income 2017 (b) GAS 2016 (a) Income 2016 (b) GAS 2015 (a) Income 2015 (b) Executives and 82% 74% 81% 75% 79% 71% Managers White-collar 97% 89% 97% 90% 97% 90% Blue-collar 83% 82% 83% 83% 84% 84% TOTAL 97% 89% 97% 90% 96% 89%

(a) Ratio between average gross annual salary of women and men Annual remuneration is considered to be the gross annual salary (GAS) paid to the employee on the basis of his/her specific duties or tasks. (b) Ratio of Average annual income between women and men Gross annual income (GAI) is considered to be the gross annual salary plus annually variable amounts, such as bonuses related to individual performance, company productivity, night work supplements, overtime, paid holidays, attendance allowances, etc.

The 2015-2016 data refers to SEA.

Source: SEA

The difference between men and ries and occupational diseases; lution of any risk situations with women within the executive-man- ◼◼ identification of residual risks a view to mutual collaboration; ager category can be explained within the workplace environ- ◼◼ promotion of the involvement by the reduced presence of wom- ment, putting in place the most of workers in company work- en among senior management appropriate measures for their place health and safety objec- positions. The pay gap in the ad- mitigation, also through the tives, also through their safety ministrator-worker category is ongoing updating of methodol- influenced by the predominant ogies and IT supports for their representatives; presence of shift workers (above evaluation and analysis; ◼◼ promotion of the integration all male) and, in particular, by the ◼◼ development of human re- of the workplace health and recognition of various indemnities sources through improvement safety principles in the manage- relating to the better remunerat- of specific skills and training of ment of all corporate activities, ed unsocial shift hours carried out activities, key elements which including the design and main- mostly by male personnel. are a feature of all SEA Group tenance of buildings and plant; decisions, in order to make ◼◼ promotion of initiatives fo- Safety workers aware of their respon- cused on establishing a work- Our corporate policy in relation to sibilities and the need to oper- place health and safety culture workplace health and safety for its ate in compliance with legisla- employees and third parties (oper- tion and internal rules; and interaction between the ators, users and passengers) pres- ◼◼ information for all those pres- corporate structures for col- ent in the workplace environment ent in the corporate environ- laboration focused on reach- is based on a number of principles: ment (employees, subcontrac- ing corporate efficiency also in tors, suppliers, customers) on terms of safety. ◼◼ compliance with national and EU the proposed organization to legislation in terms of workplace manage safety and emergen- The SEA Group’s role as an airport health and safety, considering cies, in addition to present manager involves also a particular also the technical regulations risks and the relative preven- commitment towards workplace and international standards; tion regulations and protec- safety, which has benefitted all ◼◼ carrying out of prevention action adopted; operators, bodies and handlers, tivities in terms of the manage- ◼◼ selection of suppliers, consider- ment of workplace health and ing also workplace health and which in various roles are present safety, centered on pro-activity safety topics and the promo- at the airport. and corporate risk prediction, in tion of co-ordination activities order to avoid workplace inju- for the management and reso-

Consolidated Non-Financial Statement 2017 • 153 MANAGEMENT EFFICIENCY AND PRODUCTIVITY

OHSAS 18001 Certification The results of these activities evi- workers. In accordance with the In 2017, we maintained the certi- dence that the system is correctly applicable regulation (Article 47 fication of the Workplace Health implemented and maintained and of Legislative Decree 81/2008 and and Safety Management System is functional in pursuing corporate the Interconfederal Agreement (SGSSL) issued by TÜV Italia - Ac- objectives. of 22/06/95), the Worker’s Safety credited in line with the BS OHSAS Representatives of the SEA group 18001/2007 regulation, as estab- The participation of employees companies are elected and oper- lished by Article 30 of Legislative in safety ate on the basis of the breakdown Decree 81/08 for effective -or The involvement of workers in in the following table. ganizational models in line with company health and safety activi- Legislative Decree 231/2001. The ties principally concerns the insti- SGSSL was monitored through in- tutional channel, on the basis of ternal audits, conducted by spe- the relationship with the Worker’ cially trained and qualified compa- Safety Representatives. In this ny personnel, leading to follow-up regard, in addition to the annual activities in agreement with the safety meeting, involvement takes heads of the departments con- place upon significant changes cerned, and 5 external audit days to the workplace organization, conducted by TÜV Italia. These ac- spaces, machines and equipment tivities involved almost all corpo- and more in general following re- rate operational departments and quests put forward by the Work- led to confirmation of the validity er’s Safety Representatives or, in of the current certification. certain circumstances, directly by

NUMBER OF WORKER SAFETY REPRESENTATIVES (WSR)

Company Linate Malpensa Note SEA 6 5 6 for production units with over 1,000 employees SEA Prime 1 1 representative in companies or production units up to 200 workers SEA Energia 1 1 1 representative in companies or production units up to 200 workers

Source: SEA

SEA workplace safety in 2017 ics of fire prevention and the areas assigned to commercial Among the wide range of activ- management of specific emer- operators; ities carried out in the year we gencies concerning the various ◼◼ fire training for the profession- highlight in particular: areas of the airports; al figure of Specialist Driver ◼◼ publication of an intranet ded- (111 employees) aimed at im- ◼◼ update on the monitoring of icated to topics of health and proving the response of the air- the presence of radon gas in safety at work, with documents port operator in the event of a the work environments of Li- and information relating to pro- fire emergency in apron areas; nate and Malpensa terminals, fessional risks in work activities ◼◼ development and commission- entrusted to a specialist labo- and measures to be taken to ing, in collaboration with the ratory; monitor and mitigate such risks ICT management of the AFM - ◼◼ preparation of a specific train- in work environments; 911 S application, of an IT tool ing module, also available ◼◼ extension to the Linate termi- to support AGE (Airport Ground through e-learning, for the up- nal of the internal audit activity Emergency) officers in rapid dating of our personnel and for verification of correct con- field identification of the pre- those of third-party operators duct and compliance with fire cise location affected by a fire working at the airports on top- prevention regulations in the emergency.

Consolidated Non-Financial Statement 2017 • 154 MANAGEMENT EFFICIENCY AND PRODUCTIVITY

GROUP SAFETY INDICATORS BY GENDER AND LOCATION

Linate Malpensa Other offices(*) Male Female Male Female Male Female 2015 1.89 2.10 3.97 4.43 27.79 0.00 Overall injury rate 2016 4.51 1.77 3.21 3.09 - - 2017 4.87 1.44 3.35 4.89 - - 2015 0.73 1.05 0.76 1.77 9.26 0.00 Injury rate on the way to work 2016 1.16 1.06 0.95 1.40 - - 2017 0.89 1.08 0.86 2.87 - - 2015 0.00 0.00 0.09 0.00 0.00 0.00 Occupational disease rate 2016 0.00 0.00 0.00 0.00 - - 2017 0.00 0.00 0.19 0.00 - - 2015 57.32 42.87 87.57 137.44 158.23 0.00 Lost day rate 2016 119.81 21.48 63.36 46.98 - - 2017 95.41 56.27 67.44 158.17 - - 2015 43.08 29.87 9.11 42.73 49.97 0.00 Lost day rate on the way to work 2016 41.17 9.76 24.22 10.74 - - 2017 18.98 33.99 26.40 75.01 - -

* Personnel at Rome Ciampino, Venice and Catania airports in 2015.The data for 2016 at the other locations is not available due to the sale of 60% of the share capital of Prime Aviation Services S.p.A. on March 31, 2016.

Note: Safety indicators are calculated as follows: • Total injury rate: no. injuries at work and commuting/hours worked*200,000 • Injury rate on the way to work: no. of injuries on the way to work/hours worked*200,000 • Occupational disease rate: no. cases of occupational disease/hours worked*200,000 • Lost day rate: no. days lost due to injuries at work and commuting/hours*200,000 • Lost day rate on the way to work: no. days lost due to injuries on the way to work/working hours*200,000.

Safety statistics concern all events which resulted in at least a half-day absence from work, in addition to the day of the injury. In calculating the days of work lost, the calendar days in which the worker was absent are considered, excluding that on which the injury took place.

The figures relating to occupational diseases relates to cases reported in the year and not to the number of occupational diseases effectively recognized by INAIL for the same period.

Data regarding occupational diseases and injuries affecting contractors is not included, although the group is considering including it in Consol- idated Non-Financial Statement from 2018 onwards.

Source: SEA

Consolidated Non-Financial Statement 2017 • 155 MANAGEMENT EFFICIENCY AND PRODUCTIVITY

The analysis of safety indicators in Engagement policies care givers and in the scholastic 2017 highlights that: and professional development of Welfare employees’ children. ◼◼ there is significant relative in- A corporate welfare update pro- cidence of injuries on the way cess is underway and envisages The following table summarizes to work, equal to 33% of total new services and implementa- the access to company welfare injuries, compared to a national tions to respond more closely to services by employees (full-time average of 11%. This discrep- employees’ evolving needs. and part-time) over the last three ancy, rather than an actual ex- years. Contractors do not benefit plosion in the number of cases, In 2017, initiatives were imple- from these services. is determined by the relatively mented to provide support to low number of injuries at work compared to the total, a situation that has existed for some “SEA PER TE”: ACCESS TO SERVICES years already; ◼◼ of the workplace injuries, only approx. 40% of cases; signifi- Initiative No. Beneficiaries cantly down on the previous year (-30%) are directly linked to 2017 2016 2015 specific work activities, where- Health Fund (general) 1,854 1,863 1,829 as the remainder are related to general scenarios which Gift Vouchers 1,089 1,080 1,082 have very little or nothing to Flexible hours 851 849 854 do with the work carried out by the operators/employees, and Study grants 647 721 735 which are predominantly relat- Health Fund (check-up) 471 335 337 ed to walking about (trips, slips, sprains, bumps, etc..); Medical visits 296 310 302 ◼◼ among injuries relating to work Summer centers 203 215 219 operations, cases were particularly varied and substantially Home-work transport 183 181 183 due to conduct errors not in- Anti-flu injections 168 150 122 dicating unresolved risk situa- Future Lab: Push to Open - Learning to tions. 80 142 37 Study Trips for the elderly 112 110 82 Social services (personal loans) 98 99 173 Part-time mother (annual average data) 16 17 28 Accident insurance 13 4 14 “Fragibility” 2,735 - -

Note: 2015 and 2016 data refers to SEA.

Source: SEA

Consolidated Non-Financial Statement 2017 • 156 MANAGEMENT EFFICIENCY AND PRODUCTIVITY

Alongside the programming of Supplementary Pension Fund the usual initiatives included in the The Pension Fund of Società Es- annual welfare plan (e.g. home- ercizi Aeroportuali - FONSEA, an work mobility, health, risk preven- individual complementary Pen- tion, social services etc.), various sion Fund for employees of the new projects were proposed in participating companies provides 2017, including the ‘Fragibilità’ a complementary pension to the service, offering support in the obligatory pension, in accordance care of elderly and disabled fam- with Legislative Decree No. 252 of ily members, and the ‘Word from 5/12/2005. a Nutritionist’ initiative, aimed at promoting well-being through guidelines for a healthy nutrition and lifestyle. PENSION FUND FIGURES

Adding to initiatives for the education and employability devel- Pension Fund 2017 2016 2015 opment of employee’s children, Number of subscribers 5,001 5,045 5,113 as part of the ‘Future Lab’ project, was the implementation of a new Net pension assets (Euro millions) 204 189 177 service aimed at twelve to four- Net fund yield 2.24% 2.30% 2.97% teen year-old school pupils, the ‘Push to Open Junior’ orientation Source: SEA course for parents and children on making a conscious and appropriate choice of secondary school. The Pension Fund is set up as a In 2017, the following initiatives non-recognized association with addressed to employees’ children legal personality and operates on were re-proposed: the basis of defined contributions (the size of the pension is based ◼◼ ‘Merit Scholarships’ to reward on the contribution made and the exemplary class examination relative yields). passes; ◼◼ ‘Learn to study with SEA’, dedi- Subscription is free and voluntary. cated to middle school and high Participation in the supplementa- school children to help them ry pensions covered by Legislative learn to study more effectively. Decree No. 252 of 5/12/2005 al- ◼◼ ‘Push to Open’ for the orienta- lows subscribers to benefit from tion for year 5 high school chil- a special tax treatment for contri- dren; butions paid, yields received and ◼◼ ‘Talent Days’ with laboratory benefits gained. classes for recent graduates; ◼◼ The ‘Work-Study Alternation’ project, launched the previous year, with the involvement of 29 young people in a three- week ‘Summer Job’ experience; ◼◼ ‘Intercultura’ study abroad scholarships were increased, with the addition of a further summer scholarship for Finland.

Consolidated Non-Financial Statement 2017 • 157 MANAGEMENT EFFICIENCY AND PRODUCTIVITY

CONTRIBUTIONS (WORKERS EMPLOYED AFTER 28/04/1993 AND REGISTERED FROM 01/01/2013)

Contribution Post-employ- Worker Company ment benefit

2% on the table minimum, plus contingency indem- 1% on the table minimum, plus contingency in- 100% of Post- nity, plus 12-month periodic increases. demnity and plus 12-month periodic increases employment benefit With transitory validity 01/01/2013-31/12/2015 Any additional voluntary contribution is calcu- matured elevation of the contribution from Nat. lab. Contract lated at the % of the gross assessable tax base. of 0.5%.

Parental leave RIGHT AND USAGE OF VOLUNTARY LEAVE (NO.) Our Welfare system guarantees the right for all mothers to benefit from the reduction of working 2017 2016 2015 hours to 5 hours per day until the Female Male Female Male Female Male end of the child’s fifth year. Men’s (1) use of parental leave increased in Right 239 395 260 374 280 364 2017, while women’s use contin- Use (2) 105 208 108 204 92 164 ued in line with the previous year. (1) Voluntary leave may be requested for each child in the first 12 years of life (until the end of The following table relating to pa- their twelfth year). Employees with children less than or equal to 12 years of age in the year rental leave highlights that: considered have such a right.

(2) All those with such rights who have used at least one day of voluntary leave in the year are ◼◼ nearly all users return on sched- considered users. ule to work after the birth of their child; Source: SEA ◼◼ fathers extensively utilize the option and increasingly assist mothers in taking care of children; ◼◼ only in a small percentage of cases was the absence followed by a different form of absence.

The retention rate decreased from the previous year, mainly due to the voluntary redundancy incentive plan regarding all employees implemented in 2017.

Consolidated Non-Financial Statement 2017 • 158 MANAGEMENT EFFICIENCY AND PRODUCTIVITY

RETENTION OF LEAVE USERS IN 2017 (1)

Women (No.) Men (No.) Women (%) Men (%) Total users in 2017 105 208 Status at December 31, 2017 Leave still in progress (2) 2 - 2% 0% Absent for other reasons post-leave (2) (3) 2 1 2% 0% Leaving during the year 5 3 5% 1% Total returned to work and still employed 96 204 91% 98% Return rate at 31.12.2017 (%) (4) 95% 99%

RETENTION OF LEAVE USERS IN 2016 (1)

Women (No.) Men (No.) Women (%) Men (%) Total users in 2016 111 204 Status at December 31, 2016 Leave still in progress (2) 9 9 8% 4% Absent for other reasons post-leave (2) (3) 1 1 1% 1% Leaving during the year 2 1 0% 0% Total returned to work and still employed 99 193 91% 95% Return rate at 31.12.2016 (%) (4) 100% 100% Status at December 31, 2017 Leave still in progress (2) 0 0 0% 0% Absent for other reasons post-leave (2) (3) 2 1 2% 0% Leaving during the year 8 4 7% 2% Total returned to work and still employed 99 198 91% 98% Retention rate at 31.12.2017 (%) (4) 92% 100%

(1) In order to ensure data representation uniformity, the 2016 data was recalculated to include SEA Prime.

(2) For the identification of absences/leave still in progress, the two weeks following December 31 of the reference year were also considered.

(3) Those “absent for other reasons post-leave” are those who are still absent following the period of parental leave for various reasons (child’s sickness, the use of vacation days etc.).

(4) The retention rate indicates the percentage of employees remaining in the company at the end of the use of a period of parental leave. This figure was calculated taking into consideration employees who had used at least one day of parental leave who returned to work and were still in the workforce at year-end and at the end of the subsequent year.

Source: SEA

Consolidated Non-Financial Statement 2017 • 159 MANAGEMENT EFFICIENCY AND PRODUCTIVITY

Conciliation: Family Audit ciliation. In 2016, the Family Au- 8 managers from various depart- During 2016, the ‘Family Audit’ dit application process involved ments and roles, played a leading certification accreditation pro- the design phase, implemented role in assessing the proposals cess was finalized. The Family Au- through the establishment of 2 received (the conditions and ap- dit certification is a management separate internal working groups. plication of which will be further tool adopted on a voluntary basis assessed during implementation), by organizations, including pri- The Family Audit Working Group, leading to the achievement of Ba- vate companies and public and made up of 17 employees from sic Certification in February 2017. non-profit bodies, that has the all professional roles, carried out purpose of certifying a continu- analysis and proposed actions to In 2017, implementation of the ous commitment to a favorable improve work, life and family con- first conciliation measures was work-life balance. By adopting ciliation, taking into consideration initiated, the description and pro- the Family Audit certification, the a variety of family types. gress of which are indicated in the group intends to start a cycle of following table. continuous improvement with the A three-year platform compris- introduction of innovative organi- ing 28 conciliation measures was zational solutions, such as flexible drawn up during the 6 meetings of work hours and smart working, the Working Group. The Manage- and of a culture of work-life con- ment Working Group, made up of

Consolidated Non-Financial Statement 2017 • 160 MANAGEMENT EFFICIENCY AND PRODUCTIVITY

FAMILY AUDIT PLAN CONCILIATION MEASURES ADOPTED IN 2017

Measure Description Status Means Introduction of the possibility of using reduced work hours, for all staff, with Included in the trade union Reduced work hours prior authorization. For shift workers, Concluded agreement of December 4, reduced work hours are only possible at 2017. shift start and end.

From January until the end of Definition of a process aimed at June 2018, the experimental improving the interchangeability of ‘Job Rotation’ initiative is set to Study for increased administrative staff and activation of start. interchangeability among a trial concerning at least two services In progress administrative personnel in which there are personnel with Three selected colleagues will particular work-family conciliation work in one other role in their needs. own department.

The service was activated in two phases: the first involved administrative staff, the second Study of various ecological and Study for improved made the service available innovative solutions to improve Concluded commuting & parking to shift workers and active commuting to Malpensa. every morning from 3.30am to 7.30am and evening from 8pm to 0.30am.

SEA is equipped with a distance learning system, Significant increase in the use of available via SEAnet. 3,457 Improved remote videoconferencing and conference hours of e-learning training communication among calls, for training, internal meetings In progress were delivered in 2016. This personnel and simple communications between represents 8% of total hours personnel, replacing telephone calls. provided, up 2% on the previous year.

Working group A Working Group meeting at least once In progress maintenance a year.

As part of the restructuring of the The new arrangement provides Improvement in the portal, mandatory landing on SEAnet direct landing in SEAnet visibility of seanet to and the activation of systems inviting Concluded with access to all connected operating personnel operating personnel to read and verify activities. reading of company news.

In 2017, SEA collected information aimed at assessing opportunities for collaborative Definition of agreements with other Introduction of inter- relations with other business companies in the region to reserve company internships for In progress and industrial companies traineeships for employees’ children, employees’ children regarding inter-company aimed at facilitating work placements. internships. Some difficulty has been met in addressing the topic in practical terms.

Consolidated Non-Financial Statement 2017 • 161 MANAGEMENT EFFICIENCY AND PRODUCTIVITY

Measure Description Status Means Maximising benefit of Raising of awareness of SEA initiatives 2016 Sustainability Report sustainability reporting within the local area to improve its In progress published certification integration.

The company’s decision to progressively increase the allocation of laptops to administrative staff is Progressive transfer, regarding again confirmed for the administrative staff, from desktop Increase in the number of two-year period 2017-18. devices to laptop computers, especially In progress laptops available Current provisions on the concerning departments with potential procurement of IT equipment for smart working. (framework agreement) favor the purchasing of notebooks compared to desktops in the approximate ratio of 3:1.

Access to the new SEAnet via a Definition of a policy allowing access to single password allows use of Optimization of access & various internal company services using Concluded all connected functions without passwords as few passwords as possible. requiring different logins or passwords.

Activation of a free Wi-Fi network ‘SEANET Wi-Fi’, the free Wi-Fi Activation of a free Wi-Fi for staff to access the intranet and Concluded network for all employees has network for employees business applications via private been available since July 2017. devices.

Source: SEA

Consolidated Non-Financial Statement 2017 • 162 MANAGEMENT EFFICIENCY AND PRODUCTIVITY

In 2017, a further series of meas- tation of which had been original- ures was launched, the implemen- ly scheduled for 2018.

FAMILY AUDIT PLAN CONCILIATION MEASURES SCHEDULED FOR 2018, BUT INTRODUCED IN 2017

Measure Description Status Means Introduction of part time work for Included in the trade union fathers, according to needs, with a Paternal part-time Concluded agreement of December 4, reduction in work time up to the fifth 2017. year of life of the child. Introduction of two days of leave Included in the trade union 2 Special days of leave for offered by the company in addition to Concluded agreement of December 4, new fathers those required by law, for fathers on 2017. the birth of a child. Identification of remote work spaces In 2017, two ‘smart rooms’ for the use of administrative staff in were set up, one at Linate the event that residence is closer to and one at Malpensa T2, to Activation of spaces for other SEA offices than those in which Concluded allow colleagues to work at a remote working/coworking the employee has his/her official work different location from their station. These spaces are also open to official workplace and closer to other fellow administrative employees home. as coworking spaces. In October 2017, a working group was set up, composed of administrative colleagues from Progressive smart working various departments, to study Testing smart working experimentation for administrative In progress smart working. staff. An experimental pilot project is set to start in March 2018 and last 6 months.

Source: SEA

Absenteeism WORK ABSENTEE RATE BY GENDER AND LOCATION

The group’s total work absentee 2017 2016 2015 rate in 2017 was slightly higher than in 2016 (+0.2%), due to an Linate 3.82% 3.80% 3.79% equal increase in illness as the Female 4.43% 4.00% 4.55% main reason for work absence during the 3-year period. Male 3.56% 3.71% 3.45% Malpensa 4.06% 3.74% 3.78% Concerning gender, there was a growth in the work absentee rate Female 4.86% 4.15% 4.86% for women (Linate from 4.00% in Male 3.78% 3.59% 3.41% 2016 to 4.43% in 2017, Malpen- Other locations* - 0.44% 1.76% sa from 4.15% in 2016 to 4.86% in 2017), while for men, the rate Female - 0.18% 4.00% rose only at Malpensa from 3.59% Male - 1.18% 1.11% in 2016 to 3.78% in 2017 (Lin- ate from 3.71% in 2016 down to * Personnel present at the airports of Rome Ciampino and Venice in 2015. 3.56% in 2017). Note: The work absentee rate is calculated as follows: no. of days of absence/workable days*100. Only employees are included. Only unscheduled absences are considered (e.g. due to illness or injuries), while those that are scheduled (e.g. holidays, maternity leave) are excluded. Source: SEA

Consolidated Non-Financial Statement 2017 • 163 MANAGEMENT EFFICIENCY AND PRODUCTIVITY

runways under noise reduction Management of programming; environmental ◼◼ introduction of low consump- resources tion lighting; ◼◼ optimization of the air conditioning units (reduction of the Energy consumption ‘minimum external air flow rate’ as a function of the pres- As part of SEA’s Energy Manage- ence of passengers, integration ment System and ISO 50001 certi- of inverters at thermal substa- fication, SEA Group’s energy con- tions, optimization of AHUs and sumption management is based mixing chambers, optimization on the following principles: of microclimate); ◼◼ conclusion of the computeri- ◼◼ energy must be produced in zation of energy consumption respect and protection of the data and the integration of ad- environment; ditional field sensors in order ◼◼ the reduction of the environ- to subdivide and analyze con- mental impact and the im- sumption more precisely; provement of the environmen- ◼◼ almost complete elimination tal specifications are among the of decentralized production criteria which contribute to the centers (boilers, refrigeration establishment of the business units, direct methane use) with strategies, and also on infra- consequent further improve- structural development; ments in terms of environmen- ◼◼ the awareness of employees, tal impact; partners, suppliers, contrac- ◼◼ introduction of small electric tors and stakeholders on the cars for operators, in addition environmental impacts of their to the elimination of diesel ve- activities is a central concern hicles in the aeronautical area; for the improvement of the ◼◼ revamping of refrigeration environmental performance at units with the integration of both airports. new, more efficient units serving both the arrivals and depar- The System provides for the set- tures buildings of Terminal 2. ting up of the Energy Team and, ◼◼ replacement of CDZ heat recov- for the integrated management ery units in Terminal 1. of the more specific-technical aspects, a Technical Group (also with We have at both airports co-gen- the involvement of a SEA Energia eration/tri-generation stations in representative), involving all de- operation which generate on an partments most directly involved ongoing basis energy savings ben- in the various aspects, from de- efitting our Group, the quality of sign to implementation, to main- the environment and the inhabit- tenance, in addition to the Envi- ants of neighboring areas. We of- ronment Management structure, fer high efficiency services which ensuring the necessary collective allow the generation of savings vision in terms of processes and both for the Company and for cli- therefore the identification of the ents which, thanks to the use of best actions to be taken. district heating, achieve savings from heat recovery. No renewable The main energy saving measures source energy production facili- carried out in 2017 were: ties are in use within the group.

◼◼ night-time switch off of unused

Consolidated Non-Financial Statement 2017 • 164 MANAGEMENT EFFICIENCY AND PRODUCTIVITY

SEA GROUP ENERGY CONSUMPTION

2017 2016 2015 Measurement unit Malpensa Linate Malpensa Linate Malpensa Linate Petrol (GJ)* 4,372 1,547 5,040 1,641 4,927 1,603 Heating oil (GJ) 2,401 - 1,963 - 2,548 73 Methane (GJ) 2,265,734 1,170,658 2,141,443 1,111,063 2,068,399 1,032,663 Motor vehicle diesel fuel (GJ)* 23,596 12,221 21,030 9,610 22,434 9,554 Electricity acquired (GJ) 1,262 588 2,855 784 1,027 796 Refrigeration energy sold (GJ) 17,643 - 20,021 - 17,507 - Thermal energy sold (GJ) 15,959 334,741 21,444 284,550 19,722 238,489 Electricity sold (GJ) 287,182 274,254 251,253 246,751 231,144 237,448 Total (GJ) 1,976,581 576,019 1,879,612 591,797 1,830,963 568,753

(*) 2015 and 2016 data does not include SEA Prime.

Source: SEA

SEA’s interventions at both air- ENERGY INTENSITY (GJ/TRAFFIC UNIT) ports resulted in energy savings on the previous year of 13,589 MWh in 2010 (-7.7% compared Internal energy consumption Malpensa Linate Total to 2009), of 8,353 MWh in 2011 2015 0.08 0.06 0.07 (-5.1% compared to 2010) and of 2016 0.08 0.06 0.07 1,080 MWh in 2012 (-0.7% compared to 2011). Despite the en- 2017 0.07 0.06 0.07 largement of Malpensa Terminal 1 with new infrastructural spaces Note: per traffic unit means the number of passengers plus goods transported (where 1 pax is of 49,600 m2 in 2013, 18,500 m2 in equivalent to 100 kg of goods). 2015 and 2016 data does not include SEA Prime. 2014 and 4,950 m2 in 2015, for the Source: SEA operation of the third satellite and ENERGY CONSUMPTION TREND (%) north building and the implementation of the new railway station 6.0% at Terminal 2, SEA nevertheless managed to achieve significant 4.0% energy savings compared to 2009. 2.0% In 2017, consumptions increased 0.0% slightly at Malpensa compared to 2016, though energy consump- -2.0% tion was still less than 8,459 MWh -4.0% compared to 2009 (-7.9%), the -6.0% year in which SEA began energy saving policy interventions. -8.0% -10.0%

-7.70% -5.10% -0.70% 4.30% 2.00% 1.80% 0.40% -4.80% 2010 2011 2012 2013 2014 2015 2016 2017

Source: SEA

Consolidated Non-Financial Statement 2017 • 165 MANAGEMENT EFFICIENCY AND PRODUCTIVITY

3 Water consumption WATER CONSUMPTION (M )

The management of water resources is an environmental issue to which we have dedicated expertise and attention, following an undertaking to become entirely self-sufficient in the provision of water, through the construction of a series of independently managed wells which fulfill the hygiene/sanitary, fire control and 1,382,054 2,601,772 1,386,910 2,405,525 1,484,924 2,586,136 “industrial” needs of both air- 2015 2016 2017 ports. The principal water sources utilized are the aquifers, to which Linate Malpensa the 12 wells located at Malpensa and the 8 wells located at Linate Note: 2015 and 2016 data does not include SEA Prime. are linked. For Malpensa, the aq- Source: SEA uifer has a depth of approx. 51 meters (water table measures carried out on the G and L wells), while for Linate the aquafer has a depth of approx. 5 meters. The Waste management21 They are managed, and dis- water drawn from wells at the air- posed of, directly by the cater- port sites of Malpensa and Linate Waste produced through air- ing companies and not handled are distributed for consumption port office management, aircraft by the airport manager. through internal aqueducts. cleaning, infrastructure maintenance and commercial and cater- The chemical/physical and quan- ing activity are largely in line with titative control, in addition to the that produced in general urban ar- consumption rationalization activ- eas and are broken down into: ities, ensure the highest level of attention to this important com- ◼◼ Municipal solid waste and sim- mon resource. Our water supply ilar from cleaning and waste comes from 12 wells at Malpensa collection activities in air ter- Airport and 8 at Linate Airport, minals, auxiliary buildings and independently managed and aircraft. This waste is collected meeting the sanitary, fire preven- in dumpsters and bins, appro- tion and industrial needs of both priately distributed across the airports. The water drawn from airport and disposed of by com- wells at the airport sites of Mal- panies appointed by the rele- pensa and Linate are distributed vant regional administrations. for consumption through internal Municipal solid waste concerns aqueducts. the dry portion and the separated portions; The data describes the water ◼◼ hazardous special waste (waste needs of the airports (including oil, oily emulsions, oil and diesel various uses, such as site works, filters, sanitary waste, etc.) and etc.), which are stable at 1,350,000 non-hazardous waste (ferrous to 1,500,000 cubic meters/year at scrap metal, expired drugs, al- Linate and 2,400,000 to 2,600,000 kaline batteries, etc.) from SEA cubic meters/year at Malpensa. maintenance activities; ◼◼ waste from meals consumed by passengers on board aircraft; 21 2015 and 2016 data refers to SEA.

Consolidated Non-Financial Statement 2017 • 166 MANAGEMENT EFFICIENCY AND PRODUCTIVITY

LINATE - WASTE PRODUCED BY TYPE (TONS)

780 Fraction by 870 MSW 777

501 Special non- 437 hazardous (*) 404

226 Special 124 hazardous 164

1,029 Dry residual 1,237 fraction 1,295

2017 2016 2015

(*) The 2017 figure excludes a one-off extraordinary production of non-hazardous ‘construction and demolition’ waste totaling 548.98 tons.

Source: SEA

Consolidated Non-Financial Statement 2017 • 167 MANAGEMENT EFFICIENCY AND PRODUCTIVITY

MALPENSA - WASTE PRODUCED BY TYPE (TONS)

1,551 Fraction by 1,513 MSW 1,582

150 Special non- 148 hazardous 142

69 Special 78 hazardous 77

3,784 Dry residual 3,828 fraction 3,808

2017 2016 2015 Source: SEA

The total production of waste, in TOTAL WASTE PRODUCTION (TONS) 2017, was equal to 2,535 tons at Linate and 5,554 tons at Malpensa.

2017 saw the continuation of our 5,554 commitment to separate waste Malpensa 5,567 collection, equal to 57.4% at Li- nate and 31.7% at Malpensa, in- 5,609 cluding the separate collection of special waste. At Linate there was 2,535 an increase, while Malpensa was substantially in line with 2016. Linate 2,668 2,640

2017 2016 2015 Source: SEA % SEPARATED COLLECTION

2017 2016 2015 Malpensa 31.7 31.2 32.1 Linate 57.4 53.6 50.9

Source: SEA

Consolidated Non-Financial Statement 2017 • 168 MANAGEMENT EFFICIENCY AND PRODUCTIVITY

UNI EN ISO 14001 or the EMAS vice, the presence of a Safety Of- Supply chain registration), in addition to prod- ficer, who analyses the individual management uct environmental certification contracts/orders, whether at least (ECOLABEL, FSC, PEFC, recycled once over the last three years the Purchasing policy plastic), the means for internal INAIL rate has reduced, the num- management of environmental ber of injuries reported over the issues such as waste, packaging, last three years, the introduction We consider our suppliers an inte- the use of materials with recy- of a safety training program and gral part of the sustainability pro- cled content or recyclable, the the verification of understanding cess. Therefore, in choosing our collection of recyclable materials after each training event. partners - in addition to consider- for recycling, the use of materials ing the qualitative and financial with low emissions or low energy Corporate Social Responsibility aspects of suppliers and compli- consumption and the manner for Suppliers are requested to de- ance with regulatory obligations selecting its suppliers in accord- scribe any company initiatives to (among others the correct pay- ance with environmental charac- develop a socially responsible ap- ment of contributions to employ- teristics. proach to the planning and man- ees - DURC) - we consider also the agement of the business, in order sustainability aspects of suppliers. Safety to ensure that the SEA Group may Therefore, the Suppliers’ Register, The level of attention and the form a supply chain which con- in place since May 2011 requires management of safety profiles tributes to the achievement of specific information and evalua- through the workplace health and sustainable development. In addi- tions on the handling of sustaina- safety management system (if tion, particular attention is placed bility by its suppliers. In particular certified in accordance with Legis- on the profile level regarding the with regard to the following areas: lative Decree 81/2008, under the organizational model as per Leg- UNI-INAIL guidelines or the OHSAS islative Decree 231/2001, in addi- Environment 18001 regulation) is analyzed, in tion to the adoption of an internal Any environmental management addition to the presence or oth- Ethics Code by the supplier. system certifications of potential erwise within the company of a suppliers are evaluated (such as Prevention and Protection Ser-

ORDER VALUE BY TYPE (MILLIONS OF EURO)

25.0 66.7 153.9 35.4 48.9 135.5 33.8 35.9 166.5 2015 2016 2017

Supplies Works Services

Note: The figures refer to that ordered in the period (orders concerning more than one year are not broken down by individual year).

Source: SEA

Consolidated Non-Financial Statement 2017 • 169 MANAGEMENT EFFICIENCY AND PRODUCTIVITY

Classification of cess of qualifying and registering ly for all group tenders, with the suppliers is completely demate- exception of tenders above Euro- suppliers based on CSR rialized via its qualification por- pean thresholds regarding SEA’s criteria tal. Through this portal, supplier core business. Above such thresh- candidates can manage all quali- olds, the process is duly regulat- With a view to transparency and fication stages online, from sub- ed by European Community legis- accessibility, we have established mission up until SEA’s assessment lation. In 2017, there were 1,464 electronic registration to the sup- and final registration in the quali- qualified suppliers, broken down pliers’ register (e-procurement) fied suppliers list. The portal also by the CSR activity implemented for a number of sub-contract gathers all candidate information in the respective corporate pro- procedures. In order to guaran- necessary for the subsequent ex- cesses, according to the sustain- tee the effectiveness and effi- ecution of contracts. Supplier as- ability profiles reported in the ciency of the process, but also to sessment, ahead of registration, table below. ensure transparency and equal is based on specific financial-tech- treatment, procurement activ- nical elements by category. Via ities are substantially digitized sampling, a follow-up assessment and dematerialized. A large part of suppliers is made to evaluate of the tender process is managed activities carried out in case of through the group’s electronic suppliers awarded contracts. The trading platform, while the pro- supplier portal is used extensive-

SUPPLIER SUSTAINABILITY PROFILES

Under Profile Category Total assessment Adoption of Ethics Code 424 29 % 28 19 % 452 28 % Benefit of INAIL tax reduction in the last three years; 346 24 % 30 20 % 376 23 % EMAS Certification 14 1 % 2 1 % 16 1 % ISO 14001 certification 264 18 % 24 16 % 288 18 % Product environmental declaration - EDP 23 2 % 1 1 % 24 1 % Organization Model pursuant to Legislative Decree 231/2001 283 19 % 24 16 % 307 19 % Appointment of Safety Officer for each contract/order 845 58 % 85 57 % 930 58 % Internal Prevention & Protection Service 871 59 % 62 41 % 933 58 % Workplace Health and Safety Management System 352 24 % 43 29 % 395 24 %

Source: SEA

Selection of suppliers through a European public call Regarding public tenders, candi- for tenders, with tender pub- date selection is made using sev- lication or public notice of the eral subjective qualification crite- The method for the selection of qualification system; ria, as well as economic, financial, suppliers awarded contracts is ◼◼ core activity contracts with technical and professional criteria, based on the following major cat- values below EU thresholds in compliance with the constraints egories: or non-core contracts of any set forth by Italian Legislative De- values, which are governed by cree 50/16, applicable to SEA in ◼◼ tender contracts for core activ- SEA’s internal ‘Procurement reference to special sectors, and in ities of values higher than EU Procedure’. full compliance with the principles thresholds, which are entrusted of the EU Treaty. In relation to the

Consolidated Non-Financial Statement 2017 • 170 MANAGEMENT EFFICIENCY AND PRODUCTIVITY

“core best offer” contracts, the in- TOTAL NUMBER OF TENDERS AWARDED ternal procedure provides for the application of at least five Suppli- ers, among those included in the Suppliers’ Register in compliance with the principle of rotation and considering their characteristics in line with specific contract to be 1,245 1,101 1,195 awarded. Regarding non-core ac- 2015 2016 2017 tivity contracts, the procurement procedure provides for the invita- Note: Tender winning companies are suppliers which achieved at least one of the requirements in the period (also on pre-existing orders). The data includes incentives granted to carriers. tion of at least three, five or seven suppliers, from those registered in Source: SEA the qualified supplier list, depending on contract value (<100,000, Supplier spin-off value ticular areas, both due to the >100,000, >1,000,000 Euros), in public tender conditions and due compliance with the rotation prin- generated to the choice of the Group to pri- ciple and taking into account the oritise the qualitative, financial or ability of suppliers in meeting the In relation to the geographical sustainability aspects of the sup- specific contract requirements. origin of suppliers, SEA does not plier. Suppliers awarded with contracts, utilize specific tools to favor the in addition to meeting various selection of suppliers from par- contractual qualitative and performance constraints, must satisfy SEA’s ‘Environmental and Energy ORDER VALUE BY GEOGRAPHICAL ORIGIN (MILLIONS OF EURO) Management System’ procedure. In terms of the protection of employees in executing their contracts, the workplace safety laws are strictly enforced, with obligatory reporting of serious infrac- tions and the application of sector 9.4 110.6 125.6 9.4 63.7 146.7 7.4 84.9 143.8 labor contracts, including any sup- 2015 2016 2017 plementary contracts in force at the time or in the relevant locality where work is carried out. Com- Overseas Other Italy Local pliance with regulatory contribu- Note: Local concerns suppliers based in the provinces of Lombardy, Novara and Piacenza. tions, ascertained during qualification, contract award and contract Source: SEA stipulation, are verified again during contract execution (via the so- called ‘Consolidated Document of Contributory Regularity’ - DURC).

Consolidated Non-Financial Statement 2017 • 171 MANAGEMENT EFFICIENCY AND PRODUCTIVITY

However, the economic impact LINATE - ORDER VALUE BY REGION (MILLIONS OF EURO) generated on the areas surrounding SEA Group activities in terms of suppliers of goods and services in 2017 was 61% of the total value. At Linate Airport, the value of orders placed with suppliers located in the Province of Milan was 36% of the total, while at Malpensa Air- port, the value of orders placed with suppliers in the Province of Varese was 10% of the total. 3.7 56.8 28.7 2.2 55.1 36.6 4.7 77.2 46.8 2015 2016 2017

Overseas Other Italy Milan Province

Source: SEA

Consolidated Non-Financial Statement 2017 • 172 MANAGEMENT EFFICIENCY AND PRODUCTIVITY

MALPENSA - ORDER VALUE BY REGION (MILLIONS OF EURO)

5.7 125.4 25.3 7.2 90.5 28.2 2.6 94.0 10.7 2015 2016 2017

Overseas Other Italy Varese Province

Note: Regarding SEA Energia orders, common to both Linate and Malpensa, amounts are divided between the two locations based on final supply balances. For current or future supplies, the division is made as per contract, when stipulated, or on the basis of historical data for similar supply, when variable.

Source: SEA

Consolidated Non-Financial Statement 2017 • 173 Future objectives FUTURE OBJECTIVES

Future objectives

The sustainability objectives SEA intends to pursue in the short to Sustainability medium term derive from three Governance main sources: Objectives ◼◼ the evolution of sustainability strategy governance processes; SUSTAINABILITY GOVERNANCE OBJECTIVES ◼◼ the Regulatory Agreement - Sub-period 2016 to 2020, Objective Timeline Status signed with the Italian Civil Avi- ation Authority (ENAC) on No- Assignment to the Control and Risk vember 26, 2015; Committee of powers to deal with issues 2018-2019 Starting ◼◼ sustainable competitive perfor- relating to sustainability mance quality innovation and Achievement of ISO 37001 certification - In pro- 2018 improvement programs pro- anti-corruption management system gress moted by individual company departments and shared with Deep review of the Materiality Matrix 2018 Starting the Sustainability Committee. Source: SEA In relation to the second source, the Quality Plan and the Environ- mental Plan are central elements In particular, the Environmental of the Regulatory Agreement, Environmental Plan for both airports envisages which identify and define, through Sustainability two indicators for energy savings specific indicators, respectively (electricity and thermal-refrigera- the quality levels of services of- Objectives tion), one indicator for water con- fered to passengers and the envi- sumption savings and one indica- ronmental protection objectives During 2015, the second Sub-peri- tor for inclusion in contracts with which the airport manager is com- od (2016-2020) of the Regulatory suppliers of clauses on compliance mitted to throughout the dura- Agreement signed with the Italian with the SEA Environmental Man- tion of the Agreement. Civil Aviation Authority (ENAC) agement System. (considering 2014 as the base The innovation and improvement year) was updated to define new programmes of the competitive quality and environmental objec- capacity stem from our sustain- tives according to the evolution of ability strategy implementation the company and the market over programme. the years.

Consolidated Non-Financial Statement 2017 • 175 FUTURE OBJECTIVES

ENVIRONMENTAL SUSTAINABILITY OBJECTIVES - 2018-2020 THREE-YEAR PERIOD

Objective Indicator Linate Malpensa 2018: 44.2 2018: 40.6 Electricity savings (KWh_year/m3) 2019: 44.0 2019: 40.4 2020: 43.8 2020: 40.2 Energy saving 2018: 44.3 2018: 75.3 Thermal-refrigeration savings (KWh_year/m3) 2019: 43.4 2019: 73.8 2020: 42.5 2020: 72.3 2018: 157.16 2018: 102.95 Water treatment Total annual water consumption savings (m3_year/WLU) 2019: 155.27 2019: 101.72 2020: 153.41 2020: 100.50 Inclusion in contracts, with contractors, subcontractors and 2018: 10.00% 2018: 10.00% Indirect suppliers, of a clause on compliance with the SEA’s environmental activities with policy and the criteria of the SEA Environmental Management 2019: 12.00% 2019: 12.00% environmental System in cases of activities covered by the Planning Agreement effects (% of contracts with a clause/total contracts) 2020: 15.00% 2020: 15.00%

Source: ENAC-SEA Regulatory Agreement

Socio-Economic Sustainability Objectives

Improvement of passenger services quality

The Quality Plan, part of the Reg- ulatory Agreement, focuses SEA on achieving service levels in line with - and where possible better than - those offered by the major European airports.

Consolidated Non-Financial Statement 2017 • 176 FUTURE OBJECTIVES

SUSTAINABILITY OBJECTIVES FOR THE PASSENGER STAKEHOLDERS - 2018-2020 THREE-YEAR PERIOD

Objective Indicator Linate Malpensa 2018: 7'20’’ 2018: 7'30’’ Waiting time for baggage x-ray (minutes waiting in 90% of cases)* 2019: 7’10’’ 2019: 7’10’’ 2020: 7’00’’ 2020: 7’00’’ 2018: 0.26% 2018: 0.34% Airport operator delays (IATA Codes 19, 58, 85, 87) 2019: 0.24% 2019: 0.32% (no. of delays/total pax. departing flights) 2020: 0.22% 2020: 0.30% 2018: 16'40’’ 2018: 22'40’’ 1st baggage return time from the aircraft block-on 2019: 16'30’’ 2019: 22'30’’ (minutes of waiting in 90% of cases) 2020: 16'20’’ 2020: 22'20’’ 2018: 23'40’’ 2018: 35'40’’ Last baggage return time from the aircraft block-on 2019: 23'30’’ 2019: 35'30’’ (minutes of waiting in 90% of cases) 2020: 23'20’’ 2020: 35'20’’ 2018: 0.26 2018: 0.38 Misdirected bags due to malfunctioning of the Baggage Handling System 2019: 0.25 2019: 0.36 (No. misdirected baggage units/1000 departing passengers) 2020: 0.24 2020: 0.32 2018: 90.40% 2018: 91.40% Perception of the cleaning level and functionality of toilets 2019: 90.80% 2019: 91.60% (% of satisfied passengers) 2020: 91.00% 2020: 91.80% 2018: 97.84% Reliability of the passenger transfer system 2019: 97.85% - (% functioning time in the opening hours of the airport) 2020: 97.86%

Late flight departures due to goods handling 2018: 0.093% (IATA Codes 21,22,23,24,25,26,27,28,29,38) - 2019: 0.091% (% of delays on total annual) 2020: 0.090% 2018: 90.00% 2018: 91.00% Perception of Passengers with Reduced Mobility (PRM) assistance 2019: 91.00% 2019: 91.50% (% of satisfied passengers) * 2020: 92.00% 2020: 92.00% 2018: 92.70% 2018: 85.80% Taking charge of properly booked PRMs on arrival 2019: 92.80% 2019: 86.00% (% within 5 minutes of last passenger’s disembarkation) 2020: 92.90% 2020: 86.20%

Perception of the effectiveness and accessibility of internal signage, 2018: 98.70% 2018: 98.70% information and communications at Terminal 1 2019: 98.90% 2019: 98.90% (% of satisfied passengers) 2020: 99.00% 2020: 99.00% 2018: 97.40% 2018: 97.50% Overall perception of the comfort level at Terminal 1 2019: 97.60% 2019: 97.80% (% of satisfied passengers) 2020: 98.00% 2020: 98.00% 2018: 99.63% 2018: 99.75% Reliability of the baggage movement system 2019: 99.64% 2019: 99.76% (% time of functioning / operational hours of the airport) * 2020: 99.65% 2020: 99.77%

* Indicators concerning both Terminal 1 and Terminal 2 Source: ENAC-SEA Regulatory Agreement

Consolidated Non-Financial Statement 2017 • 177 FUTURE OBJECTIVES

For each airport, 12 indicators tution of some in order to achieve were defined, in part directly re- greater consistency with the evo- quested by ENAC, in part identi- lution of airport services. fied by SEA in consultation with users, from among a set of indica- The new indicators were: airport tors provided in part by ENAC, in operator delays, taking charge part identified by SEA and users, of PRMs on arrival and the per- from among Service Charter indi- ception of the effectiveness and cators. From Malpensa the indica- accessibility of internal signage, tors refer to, where not otherwise information and communications. specified, only Terminal 1. In addition, the baggage return The particular attention on the time indicator was divided into Terminal 1 performance was due two distinct indicators: first bag- to the fact that this infrastructure gage return time and last baggage is considered characteristic of Mal- return time. pensa airport, both in terms of volumes and type of traffic managed. Regarding both Linate and Mal- pensa airports, the indicators For the 2016-2020 Sub-period, were identified in a balanced way the Quality Plan identified the between those relating to func- same number of indicators as the tionality (8) and those relating to comfort (4). previous Sub-period (12), equal for both airports, with the substi-

Consolidated Non-Financial Statement 2017 • 178 FUTURE OBJECTIVES

Improvement of With regards to the Three-year Plan of conciliation measures work/life balance for subscribed by SEA as part of the employees - Family Family Audit Certification, the ob- Audit jectives scheduled for the 2018- 2019 two-year period are outlined below.

FAMILY AUDIT PLAN CONCILIATION MEASURES 2018-2019*

Scheduled Type of measure Scheduled end Description of measure start Introduction of a part-time measure dedicated to over Part time over 60 01/01/2018 31/12/2019 60s, of a voluntary nature and not involving additional expenses for the company. Definition and dissemination of a corporate holiday policy Corporate policy favoring family quality time, for example, by granting definition for family partners, spouses and cohabitants employed in SEA with & couple friendly 01/01/2018 31/12/2018 simultaneous leave, and families with children aged 6-14 holiday planning (e.g. with phased leave during school holidays, when requested compatible with school by the parties concerned, and compatible with service calendar) requirements and applicable rotas. Introduction of off-line and on-line internal Annual meeting communication tools between large numbers of planning for shift-work 01/01/2018 31/12/2019 colleagues and shift-workers of the same department, services aimed exchanging information on specific themes, events, issues and solutions. Introduction of off-line and on-line internal Periodic team communication tools between large numbers meetings for non-shift- 01/01/2018 31/12/2019 of colleagues and non-shift-workers of the same workers department, aimed at exchanging information on specific themes, events, issues and solutions. Intervention regarding Organization of training events, initiatives and cultural middle management awareness raising, addressed to ‘community of leaders’, for the dissemination 01/01/2018 31/12/2019 on issues relating to a management of human resources of a work-life balance better oriented to balancing work and private life. culture More analytical definition and communication of career Identification of development policies, favoring the formation of correct guidelines for growth 01/01/2018 31/12/2018 expectations regarding the possibilities for growth of in company part-time personnel.

* The measures envisaged by the plan are susceptible to modifications, updates and adaptations, agreed with the certification body.

Source: SEA

Consolidated Non-Financial Statement 2017 • 179 FUTURE OBJECTIVES

SUSTAINABILITY OBJECTIVES

Objective Timeline Replacement of the Malpensa cogeneration plant’s current 25 MWe TGC turbine with a more efficient gas turbine, in order to obtain 10-year GSEnergy e efficiency 2018 certificates (high efficiency cogeneration white certificates) for ten years. Application of the ‘Occupational Health and Safety Management System Self- Assessment Questionnaire’ to a representative sample of workers and supervisors of organizational units subject to internal audits, with the aim of assessing the level of maturity and effectiveness of the system in relation to requirements 2018 of the reference standard, regarding, for example, worker and supervisor role awareness, training effectiveness, worker consultation and participation and near miss reporting.

Source: SEA

Consolidated Non-Financial Statement 2017 • 180 Appendix: Other Sustainability performances OTHER SUSTAINABILITY PERFORMANCES

Appendix: Other Sustainability performances

Sustainable development ATAG Air Transport Action Group velopment of the public works - Association which represents all market, which tends to favor the governance actors involved throughout the private financing of public works, air transport industry chain, in or- has led to the institute extending Public policy positions and der to encourage communication its member base, with the entry of participation between the various actors and large motorway concession hold- SEA is involved in the following na- promote sustainable air transport ers, airport bodies, banking insti- tional and/or international sector development. tutes, Insurance Companies and associations: business sectors complimentary UNIVA Varese - Association of to traditional contractors. Assaeroporti - Italian Association companies within the Confindus- of Airport Managers, with the tria System, in order to encourage AIGI - Italian Association of Le- duty to protect and strengthen the development of provincial in- gal Counsel, with the scope to the position of airport managers, dustry, promoting collaboration promote, train and develop legal developing their functionality and between businesses. councils and their role in Italy. interacting with the governing institutions to ensure the devel- ACI Europe - Airport Council In- opment of air transport. It also en- ternational - Association of Euro- Environmental courages collaboration between pean airports, which represents members in order to further the over 400 airports in 46-member externalities relating to improvement of airport manage- countries. It guarantees effective our airport activities ment procedures and techniques. communication and negotiation on legal, commercial, technical, Financial implications for the ac- Assoclearance - the Italian Asso- environmental and passenger is- tivities related to climate change ciation for the Management of sues and other interests. SEA, for participation in the Air- Clearance and Slots, comprising port Carbon Accreditation project airlines and Italian airport manag- IGI - the Large Infrastructure Insti- and the reaching of “Neutrality”, ers, with the duty to optimize dis- tute is a research center focused supports the following costs: tribution of time slots and allocate on public tender issues. The de- slots to airlines, taking account of demands and historical data. INVOLVEMENT COSTS IN THE ACA PROJECT AND PURCHASE OF Assolombarda - National Associ- OFFSETS (EURO) ation of small, medium and large enterprises, with the scope to protect the interest of members in 2017 2016 2015 their dealings with external parties ACA membership/certification 10,500 11,200 9,800 involved in fields such as the institutions, training, the environment Off-sets purchases 15,524 16,230 19,362 and the region, culture, the economy, employment and civil society, Source: SEA making available a wide range of specialist services which contribute to business development.

Consolidated Non-Financial Statement 2017 • 182 OTHER SUSTAINABILITY PERFORMANCES

Number and percentage of peo- LINATE - EXPOSED POPULATION BY MUNICIPALITY ple residing in areas affected by airport noise Awareness upon noise pollution Noise zoning issues in the last 10 years has in- Municipalities 60-65 dB(A) 65-75 dB(A) creased greatly, resulting in the adoption of many European, do- Milan 41 0 mestic and regional regulations. Segrate 4,110 146 Such awareness has improved with the issue with the European Peschiera B. 173 16 Directive 2002/49/CEE enacted in San Donato M. 710 165 Italy by Legislative Decree No. 194 of 19/08/2005. San Giuliano M. 6,120 0

The Directive, and therefore the enacting decree, introduced the MALPENSA - EXPOSED POPULATION BY MUNICIPALITY concepts of noise mapping and strategic noise mapping: Under this legislation the legislature has Noise zoning saw the representation in an eas- Municipalities 60-65 dB(A) 65-75 dB(A) ily understandable manner of the noise pollution situation in the Somma Lombardo 694 120 principal urban areas and of the Arsago Seprio 82 0 areas creating greatest amount of noise pollution, and on the other Casorate Sempione 258 0 to have available useful informa- Cardano al Campo 0 0 tion and instruments to organi- cally manage the noise pollution Samarate 0 0 problem at a national and Europe- Ferno 28 0 an level. Golasecca 0 0 The tables below report the re- Lonate Pozzolo 1,195 465 sults of the noise mapping in 2014. (The census dataset used Castano Primo 247 0 by the University of Milano-Bicoc- Nosate 0 0 ca for population calculation consists of residency data supplied by Turbigo 456 0 the Lombardia Regional Agency Robecchetto 9 0 for the Protection of the Environ- ment - ARPA). Source: SEA

In June 2014, European Regulation No. 598/2014 entered into force, establishing rules and procedures for the introduction of noise reduc- limit noise emissions and reduce activities and the natural environ- tion operating restrictions at Euro- the number of people exposed to ment. The SEA Group is mindful pean Union airports, and repealing noise according to the balanced of its position within a green envi- Directive 2002/30/EC. approach principle. ronment, particularly in relation to Malpensa, and this requires a close The regulation applies exclusive- Biodiversity monitoring of the impact from ly to airports with civil traffic ex- The protection of biodiversity and business activities and a commit- ceeding 50,000 movements per ecological diversity is of primary ment to mitigating actions. year, where a noise problem has importance for sustainable devel- been detected, and establish- opment and in order to guarantee A number of areas surrounding es procedures to be followed to a proper balance between human the Linate airport are within the

Consolidated Non-Financial Statement 2017 • 183 OTHER SUSTAINABILITY PERFORMANCES

South Milan Agricultural Park (cre- comprising approx. 40%, whose ◼◼ a non-native species, intro- ated by Law No. 24 of 23/4/1990), quality has been impacted by duced for hunting purposes, comprising a vast area which ex- the general lack of natural flow- in the Black Threatened cate- tends over nearly all of the south- ers and the declining quality of gory of the IUCN Red List, not ern half of the province of Milan. the natural environment; included in Directive 2009/147/ In addition, Forlanini Park, one of ◼◼ finally, the remaining extension EC (two pairs of Northern Bob the major urban parks in Milan, of the area is classifiable as of Whites). and the Idroscalo lake adjoin the declining quality. airport. In terms of the vegetation and The fauna component analysis eco-system aspects, the area of Malpensa airport is within the however, carried out in the ex- intervention directly concerns the Valle del Ticino Regional Park. The pansion area of the airport, both habitats of conservational interest Park spans ten of the eleven mu- in the regional parks of the Tici- external to the Natura 2000 sites nicipalities within the Malpensa no valleys of Lombardy and Pied- and indirectly a number of Natura Area Territorial Plan. The only mu- mont, reported in the area of sites nearby. nicipality outside the park is Busto intervention, 84 species of trees Arsizio. against 257 present at the parks, The habitats present in the area of while amphibians, reptiles and intervention and within the list at The natural reserves of the park mammals are not found. Attachment 1 Directive 92/43/CEE and the relative protected areas are: are concentrated within the val- The fauna species of interest in ley of the river, beginning with the intervention area are the red- ◼◼ dry heaths - (4030) moorland; the Villoresi and Naviglio Grande backed shrike and the European ◼◼ common or sub-Atlantic oak canals, far from the airport, sepa- nightjar, although the former or central European hornbeam rated by wooded areas alternated in extremely reduced numbers, woods (9160); with protected cultivated zones while the presence of the latter is ◼◼ old acidophilus oakwood of of little natural value but of high only potential as generally docu- sandy plains with Quercus rob- ecological value, also for the less- mented. or (9190); ening of the impact of the airport. The landscaped areas of the Park The area of intervention also in- and comprise natural habitats of are located away from the airport, cludes 8 other nesting species, of EU interest. buffered by the residential areas which none in Attachment 1 of of Somma Lombardo, Arsago Se- Directive 2009/147/EC are within The mitigation actions were es- prio and Casorate Sempione. the endangered category of the tablished as: IUCN Red List. The scope of intervention of the ◼◼ actions for the re-establish- Malpensa airport expansion pro- In particular: ment of moorland (approx. 180 ject, described in the Master Plan, hectares); contains analysis concerning the ◼◼ three species in Attachment II ◼◼ actions for the re-establish- vegetation and fauna quality. of Directive 2009/147/EC and ment of forest and grasslands in the Least Concern category (approx. 600 hectares); In relation to the first aspect, the of the UICN Red List (a pair of ◼◼ Actions for the recovery and analysis may be summarized as Common Wood Pigeons, a pair development of ecological follows: of Common Black Birds, a pair functionality. of Hooded Crows); ◼◼ the presence of oak woods and ◼◼ six species not included in Direc- The forestry redevelopment ac- high-quality heath, resulting tive 2009/147/EC in the Least tions, in addition to planning for an from important natural forma- Concern category of the IUCN area greater than that removed, tions and which represent ap- Red List (a pair of Common positively impacts upon the qual- prox. 45%; Buzzards, two pairs of Common ity of forested areas, eliminating ◼◼ good quality pine forests, al- Swifts, four pairs of Nightin- large quantities of areas covered though with little coverage gales, a pair of Common Black by non-native species. (0.6%); Birds, a pair of Melodious War- ◼◼ a significant presence of black blers, a pair of White Throats, a locust and wild cherry trees, pair of Chaffinches);

Consolidated Non-Financial Statement 2017 • 184 OTHER SUSTAINABILITY PERFORMANCES

Service quality provided Reduced Mobility (PRM) and the duty to provide assistance to such to passengers passengers. From this point, the Passengers with Reduced service was no longer provided Mobility (PRM) under a competitive system, but From July 2008 SEA implement- rather as a centralized service re- ed all aspects of Regulation (EC) munerated under a tariff applied 1107/06 and the relative ENAC to all departing passengers. circular which allocated to the airport management companies the The 2017 performances reported responsibility for Passengers with in the Service Charter follow.

INDICATORS OF ASSISTANCE SERVICE EFFICIENCY

Indicator Measurement unit Malpensa T1 Malpensa T2 Linate

Departing PRMs: waiting time to receive Waiting time in Target 2017 20’ 20’ 9’ booked assistance from one of the minutes in 90% of designated points cases 2017 Result 21’40’’ 18’15’’ 3’50’’

Departing PRMs: waiting time to receive Waiting time in Target 2017 25’ 25’ 14’ assistance from one of the designated minutes in 90% of airport points, once presence has been cases notified, with pre-booking 2017 Result 23’10’’ 19’15’’ 3’20’’

Arriving PRMs: waiting time on board Waiting time in Target 2017 10’ 10’ 7’ for booked PRM disembarkation after minutes in 90% of disembarkation of the last passenger cases 2017 Result 8’ 8’ 6’

Arriving PRMs: waiting time on board Waiting time in Target 2017 15’ 15’ 14’ for non-booked PRM disembarkation minutes in 90% of after disembarkation of the last cases 2017 Result 7’ 7’ 5’ passenger

Source: SEA

PERSONAL SAFETY INDICATORS

Indicator Measurement unit Malpensa T1 Malpensa T2 Linate

Target 2017 90.0 90.0 90.0 Perception of the condition and % PRMs satisfied functionality of means and equipment 2017 Result 96.2 91.4 95.3

Target 2017 91.0 91.0 91.0 Perception of the adequacy of staff % PRMs satisfied training 2017 Result 96.5 96.5 99.3

Source: SEA, Doxa

Consolidated Non-Financial Statement 2017 • 185 OTHER SUSTAINABILITY PERFORMANCES

AIRPORT INFORMATION INDICATORS

Indicator Measurement unit Malpensa T1 Malpensa T2 Linate

Accessibility: essential % essential information Target 2017 100.0 100.0 100.0 information notices accessible notices accessible to persons with visual, auditory over total essential or motor disabilities over total information notices 2017 Result 100.0 100.0 100.0 essential information notices % information notices Completeness: information and instructions Target 2017 100.0 100.0 100.0 notices and instructions regarding services in regarding offered services an accessible format available in an accessible format over total information 2017 Result 100.0 100.0 100.0 over total notices and instructions

Perception of the effectiveness Target 2017 90.0 90.0 90.0 and accessibility of information, % PRMs satisfied communications and internal airport signage 2017 Result 96.8 92.9 96.8

Source: SEA, Doxa

PASSENGER COMMUNICATIONS INDICATORS

Indicator Measurement unit Malpensa T1 Malpensa T2 Linate

N. of answers provided in the % answers Target 2017 100.0 100.0 100.0 established time with respect to provided within the total requests for information established time over received total requests 2017 Result 100.0 100.0 100.0

% complaints Target 2017 0.05 0.05 0.05 Complaints received over total received over total PRM traffic PRM traffic 2017 Result 0.003 0.014 0.01

Source: SEA, Doxa

COMFORT INDICATORS AT AIRPORT

Measurement Indicator Malpensa T1 Malpensa T2 Linate unit

Perception of the effectiveness of Target 2017 90.5 90.5 90.0 % PRMs satisfied PRM assistance 2017 Result 95.8 95.5 96.9

Perception of the accessibility and Target 2017 90.0 90.0 90.0 usability of airport infrastructures: % PRMs satisfied parking, intercoms, dedicated spaces, toilets, etc. 2017 Result 95.9 90.9 96.6

Perception of spaces dedicated to Target 2017 90.0 90.0 90.0 % PRMs satisfied PRM parking (e.g. Sala Amica) 2017 Result 94.4 87.2 91.7

Source: SEA, Doxa

Consolidated Non-Financial Statement 2017 • 186 OTHER SUSTAINABILITY PERFORMANCES

RELATIONSHIP AND CONDUCT INDICATORS

Indicator Measurement unit Malpensa T1 Malpensa T2 Linate

90.0 90.0 91.0 Perception of the courtesy of staff (info Target 2017 % PRMs satisfied point, security, special assistance staff) 2017 Result 95.9 98.6 99.0

90.0 90.0 91.0 Perception of the professionalism of Target 2017 % PRMs satisfied special assistance staff 2017 Result 96.4 98.1 99.1

Source: SEA, CFI Doxa

Certification of the assistance must have to allow use by persons Airport Passenger Contingency Plan service with motor difficulties in com- The Malpensa and Linate SEA SEA’s reduced mobility passenger pliance with equal opportunities Contingency Plan has been active airport assistance service is certi- rules (Certificate IA-0510-01). since 2011, in order to respond to fied (TÜV IT 005 MS). needs at an airport in situations of Both initiatives seek to provide operational disruption that gen- The service is certified through objectivity and transparency on erate delays or cancellations of a Technical Regulatory Frame- the quality of services provided flights, through assistance to pas- work (Disciplinare Tecnico) estab- and to establish a long-term col- sengers staying at the airport for lished in line with standard UNI laboration between the parties in- prolonged periods, with targeted CEI EN 45011, and validated by volved in these delicate assistance interventions, such as temporary a special Technical Committee, processes. accommodation and catering pro- chaired by Professor Mario Mel- visions, etc. azzini and composed of the main All services for passengers with re- associations for the protection of duced mobility are provided free In 2017, the organizational struc- persons with disabilities (LEDHA of charge by the Sala Amica and in- ture demonstrated the capability and FAND) and the Malpensa Us- clude complete assistance to pas- to intervene in a regulatory emer- ers Committee, representing the sengers with temporary or perma- gency situation, when amend- airlines and airport operators of nent reduced mobility issues. This ments to the Schengen Code Milanese airports. The Technical service must be requested at least regarding border controls were Regulatory Framework, which 48 hours in advance to the airline introduced in April, applying a commits SEA to maintain at its with which the flight has been new protocol of security checks to airports of Linate and Malpensa a booked. Schengen Area country citizens. service level above that required The intensification of the docu- by the European regulation. Passengers with reduced mobility ment control process demanded may find facilitated access at all the activation of Contingency Plan The Technical Regulatory Frame- airport spaces: Car spaces close operatives, on days of greater work may be consulted on the to the entry points, elevators with traffic, in order to manage queues website www.seamilano.eu in the visual and sound devices and ap- of passengers waiting at police section: Airports - Useful Informa- propriate ramps; for blind or re- checks, both on arrival and depar- tion - Passengers with Reduced duced site passengers keypads ture, and to facilitate their access Mobility. This result is in addition with Braille have been installed to information. to that received by SEA in 2010 both to telephones and at a num- from the certification body Da- ber of elevators and preferential The higher than expected in- sa-Rägister for the compliance of pathways with the LOGES system crease in traffic, especially from Linate and Malpensa with regula- have been created (yellow rubber the end of July to the middle of tion D-4001:2008, which defines stripes with codes to indicate di- September, also generated oper- the requirements which a site rection, obstacles and dangers). ational necessities requiring the

Consolidated Non-Financial Statement 2017 • 187 OTHER SUSTAINABILITY PERFORMANCES

intervention of Contingency Plan arrived at Linate. in critical situations by providing operatives in order to manage the first-response information on the influx of passengers to security Since 2015, SEA employees have operational status of the airport, channels at Terminal 1, addressing been actively involved in the Air- and, if necessary, distributing food departing passengers separated port Helper community, making and/or folding beds with blankets from their carers. themselves available to passen- and pillows for a few hours stay at gers to provide information when the airport. Finally, on occasion of Pope Fran- they are present at the Milanese cis’ visit to Milan in March, Contin- airport terminals whether for pro- Organizational gency Plan volunteers were called fessional or non-professional rea- management to provide a welcome and essen- sons. Indeed, both Contingency tial service, involving SEA employ- Plan and Airport Helper assistants Our people ees and state bodies, in greeting are called, under the same objec- the Pope on board when his plane tive, to assist airport passengers

SEA GROUP AND EXTERNAL STAFF BY GENDER AT DECEMBER 31 (NO.)

2017 2016 2015 Female Male Total Female Male Total Female Male Total Employees 796 2,004 2,800 822 2,028 2,850 836 2,051 2,887 Temporary workers 5 32 37 - 16 16 - 18 18 Total 801 2,036 2,837 822 2,044 2,866 836 2,069 2,905

Source: SEA

SEA GROUP EMPLOYEES BY CONTRACT TYPE, GENDER AND LOCATION AT DECEMBER 31 (NO.)

2017 2016 2015 Female Male Total Female Male Total Female Male Total Permanent 791 2,003 2,794 821 2,027 2,848 834 2,047 2,881 Linate 347 798 1,145 356 813 1,169 365 816 1,181 Malpensa 444 1,205 1,649 465 1,214 1,679 465 1,222 1,687 Other locations ------4 9 13 Temporary 5 1 6 1 1 2 2 4 6 Linate 5 1 6 - 1 1 - 3 3 Malpensa - - - 1 - 1 2 - 2 Other locations ------1 1 Total 796 2,004 2,800 822 2,028 2,850 836 2,051 2,887

Source: SEA

Consolidated Non-Financial Statement 2017 • 188 OTHER SUSTAINABILITY PERFORMANCES

SEA GROUP EMPLOYEES BY CONTRACT TYPE AND GENDER AT DECEMBER 31 (NO.)

2017 2016 2015 Female Male Total Female Male Total Female Male Total Full-time 632 1,977 2,609 635 1,993 2,628 650 2,015 2,665 Part-time 164 27 191 187 35 222 186 36 222 Total 796 2,004 2,800 822 2,028 2,850 836 2,051 2,887

Note: 2015-2016 data has been modified to include staff with temporary contracts.

Source: SEA

Consolidated Non-Financial Statement 2017 • 189 OTHER SUSTAINABILITY PERFORMANCES

Contract type data indicates a with part-time workers repre- group’s total personnel. marginal share of temporary con- senting 6.8%. Contractors also tract workers, representing 0.2% represented a marginal share at of total workers at 31/12/2017, 31/12/2017, equal to 1.30% of the

SEA GROUP OUTGOING EMPLOYEES BY LOCATION, GENDER AND AGE GROUPING (NO.)

2017 <30 30-50 >50 Total Female Male Total Female Male Total Female Male Total Linate - 2 2 3 5 8 9 22 31 41 Malpensa - - - 20 21 41 9 18 27 68 Other locations* ------Total - 2 2 23 26 49 18 40 58 109 Turnover 0.0% 33.3% 16.7% 4.6% 2.3% 3.0% 6.3% 4.5% 5.0% 3.9%

2016 <30 30-50 >50 Total Female Male Total Female Male Total Female Male Total Linate - 2 2 8 22 30 1 9 10 42 Malpensa 1 - 1 4 7 11 - 2 2 14 Other locations* - 3 3 4 10 14 - - - 17 Total 1 5 6 16 39 55 1 11 12 73 Turnover 14.3% 71.4% 42.9% 2.8% 3.1% 3.0% 0.4% 1.4% 1.2% 2.6%

2015 <30 30-50 >50 Total Female Male Total Female Male Total Female Male Total Linate 3 2 5 5 2 7 6 14 20 32 Malpensa 1 - 1 2 10 12 1 4 5 18 Other locations* - 3 3 - 3 3 - - 6 Total 4 5 9 7 15 22 7 18 25 56 Turnover 50.0% 41.7% 45.0% 1.1% 1.1% 1.1% 3.6% 2.8% 3.0% 1.9%

Note: intra-group transfers are not considered.

* Personnel present at the airports of Rome Ciampino and Venice in 2015.

Source: SEA

Consolidated Non-Financial Statement 2017 • 190 OTHER SUSTAINABILITY PERFORMANCES

Regarding contract terminations, going population was 62% male, 62% involved administrative staff 53% older than 50 years, and 62% and 85% voluntary mobility and at Malpensa airport. incentivized redundancy. The out-

SEA GROUP INCOMING EMPLOYEES BY LOCATION, GENDER AND AGE GROUPING (NO.)

2017 <30 30-50 >50 Total Female Male Total Female Male Total Female Male Total Linate 4 3 7 3 14 17 2 6 8 32 Malpensa - - - 6 11 17 - 10 10 27 Other locations* ------Total 4 3 7 9 25 34 2 16 18 59 Turnover 66.7% 50.0% 58.3% 1.8% 2.2% 2.1% 0.7% 1.8% 1.5% 2.1%

2016 <30 30-50 >50 Total Female Male Total Female Male Total Female Male Total Linate - 3 3 1 19 20 - 2 2 25 Malpensa - - - 2 5 7 1 - 1 8 Other locations* - 1 1 - 2 2 - - - 3 Total - 4 4 3 26 29 1 2 3 36 Turnover 0.0% 57.1% 28.6% 0.5% 2.1% 1.6% 0.4% 0.3% 0.3% 1.3%

2015 <30 30-50 >50 Total Female Male Total Female Male Total Female Male Total Linate 3 3 6 4 4 8 1 1 2 16 Malpensa 2 1 3 1 3 4 1 1 2 9 Other locations* - 3 3 - 2 2 - - 5 Total 5 7 12 5 9 14 2 2 4 30 Turnover 62.5% 58.3% 60.0% 0.8% 0.6% 0.7% 1.0% 0.3% 0.5% 1.0%

Note: intra-group transfers are not considered.

* Personnel present at the airports of Rome Ciampino and Venice in 2015.

Source: SEA

Consolidated Non-Financial Statement 2017 • 191 OTHER SUSTAINABILITY PERFORMANCES

The 59 hires, of which 95% ad- greater concentration of hires in tributed equally between the two ministrative staff and 75% male, the age grouping between 30 and airports. mainly concerned transfers from 50 years old. On the other hand, Airport Handling to saturate the 11% of qualified new hires were incremental needs of security younger, with an age of less than area staff (68%). This explains the 30 years old. The hires were dis-

SEA GROUP EMPLOYEES BY PROFESSIONAL LEVEL, GENDER AND AGE GROUPING AT DECEMBER 31 (NO.)

2017 <30 30-50 >50 Total Female Male Total Female Male Total Female Male Total Executives - - - 2 15 17 5 34 39 56 Managers - - - 56 76 132 42 100 142 274 White-collar 6 4 10 413 654 1,067 225 509 734 1,811 Blue-collar - 2 2 32 370 402 15 240 255 659 Total 6 6 12 503 1,115 1,618 287 883 1,170 2,800

2016 <30 30-50 >50 Total Female Male Total Female Male Total Female Male Total Executives - - - 1 14 15 6 35 41 56 Managers - 1 1 55 75 130 42 96 138 269 White-collar 7 4 11 468 714 1,182 191 439 630 1,823 Blue-collar - 2 2 39 438 477 13 210 223 702 Total 7 7 14 563 1,241 1,804 252 780 1,032 2,850

2015 <30 30-50 >50 Total Female Male Total Female Male Total Female Male Total Executives - - - 2 16 18 5 33 38 56 Managers - 1 1 62 82 144 37 88 125 270 White-collar 8 6 14 527 807 1,334 143 351 494 1,842 Blue-collar - 5 5 43 492 535 9 170 179 719 Total 8 12 20 634 1,397 2,031 194 642 836 2,887

Source: SEA

Consolidated Non-Financial Statement 2017 • 192 OTHER SUSTAINABILITY PERFORMANCES

Industrial Relations The trade unionization rate in the group is in line with the previous year.

SEA GROUP TRADE UNION MEMBERSHIP

Number of trade % trade union mem- Trade Union memberships union memberships bership CGIL; CISL; COBAS COORD.P. VARESE; CUB-TRASPORTI; 31/12/2017 14 FLAI; SEL; SIN.PA; U.G.L.; UIL; USB; ADL VARESE; SGB; 59% LABOUR; SI COBAS CGIL; CISL; COBAS COORD.P. VARESE; CUB-TRASPORTI; 31/12/2016 13 FLAI; SEL; SIN.PA; U.G.L.; UIL; USB; ADL VARESE; SGB; 59% LABOUR CGIL; CISL; COBAS COORD.P. VARESE; CUB-TRASPORTI; 31/12/2015 11 59% FLAI; SEL; SIN.PA; U.G.L.; UIL; USB; ADL VARESE

Principal agreements in 2017 2016 2015 2017 with the Trade Union Number of agreements signed with the Organizations 6 2 6 In 2017, constant discussions with Trade Unions legally constituted trade unions continued regarding emerging Source: SEA issues in individual departments. The following agreements have that established by the regulation from the cases already reported also been reached in order to re- in force at the time - or where no and therefore the number of days duce personnel costs, increase regulation is in force (and there- of the duration of the procedure productivity and render the or- fore a trade union agreement or and the frequency of the various ganization more efficient: where sufficient a communication stages scheduled. campaign is applied). ◼◼ March, June and October 2017 - signing of agreements on the In the first case, the average quan- optimization and requalifica- tifiable notice time is one month tion of human resources; and in the second case two weeks. ◼◼ December 2017 - signing of an In relation to the change of shifts, agreement on the ‘welfare bo- company practices (in line with nus’ and ‘work-life balance’. the Confindustria interpretation of Article 3 point three, first par- In 2017 no specific trade union agraph of the Inter-confederal agreements concerning work- Agreement of April 18, 1996 be- place health and safety were tween Confindustria, Intersind, signed. Asap and Cgil, Cisl, Uil and Cisnal and Cisal and Confail), SEA pro- In relation to the minimum notice vides 15 days of notice between period for operational amend- communication to the Trade Un- ments, the time necessary for the ions and implementation. adoption of such may significantly vary, according to the issue for The amendments for which (e.g. which the amendment is necessary collective dismissals, lay-off and the availability of the Trade schemes) the law establishes spe- Union Organizations - according to cific procedures were excluded

Consolidated Non-Financial Statement 2017 • 193 OTHER SUSTAINABILITY PERFORMANCES

Management of Malpensa - Raw material consumption 2017 2016 2015 environmental resources Kilfrost ABC3 TYPEII (Litres) 960,000 677,035 841,566

Raw materials Solid de-icing material (Kg) 9,500 3,710 9,290 As SEA is a supplier of services, the Liquid de-icing material (Kg) 627,470 79,270 494,720 principal raw materials consumed, in addition to electricity consumption (including the gasoline and Linate - Raw material consumption 2017 2016 2015 petrol utilized for operations at Kilfrost ABC3 TYPEII (Litres) 302,981 223,699 344,277 the airport), are the liquids for the de-icing of aircraft during the win- Solid de-icing material (Kg) - - - ter season amid particular weath- Liquid de-icing material (Kg) 45,919 36,200 7,981 er conditions.

Source: SEA

Water quality The quality of the water distribut- The following tables outline that ed through the airport aquaducts the parameters analyzed are sig- was subject, in addition to inspec- nificantly lower than the maxi- tions by the Sanitary Board, an mum levels permitted by law and internal programme of frequent highlight the good quality of the checks which includes the evalu- water distributed at both airports, ation of the numerous chemical/ both from a chemical and mi- physical and microbiological pa- cro-biological viewpoint. rameters.

LINATE - CHARACTERISATION OF POTABLE WATER

Parameter values Measurement Average annual value Parameter Legislative Decree unit 2017 2016 2015 31/01 pH pH unit 8.0 7.9 8.1 6.5 ≤ pH ≤ 9.5 Conductivity µS/cm 397.5 388.6 387.7 2500 Hardness °f 22.8 22.8 21.7 15 ≤ °f ≤ 50 Nitrates mg/l 12.0 11.9 11.1 50 Chlorides mg/l 7.4 7.4 7.8 250 Sulfates ug/l 32.4 32.5 31.3 250 Iron ug/l 10.0 10.0 10.0 200 Trichloroethylene + Tetrachloroethylene µg/l 1.1 1.1 1.0 10 Total trihalomethanes µg/l 1.0 1.0 1.0 30 Benzene µg/l 0.1 0.1 0.1 1 Coliform bacteria at 37°C n/100ml 0.0 0.0 0.0 0 Escherichia coli n/100ml 0.0 0.0 0.0 0 Enterococci n/100ml 0.0 0.0 0.0 0

Source: SEA

Consolidated Non-Financial Statement 2017 • 194 OTHER SUSTAINABILITY PERFORMANCES

MALPENSA - CHARACTERISATION OF POTABLE WATER

Parameter values Measurement Average annual value Parameter Legislative Decree unit 2017 2016 2015 31/01 pH pH unit 8.1 8.1 8.1 6.5 ≤ pH ≤ 9.5 Conductivity µS/cm 327.4 314.0 307.0 2500 Hardness °f 17.9 17.4 17.0 15 ≤ °f ≤ 50 Nitrates mg/l 23.6 22.5 21.7 50 Chlorides mg/l 14.0 10.3 10.2 250 Sulfates ug/l 16.4 15.3 15.4 250 Iron ug/l 10.0 11.3 11.2 200 Trichloroethylene + Tetrachloroethylene µg/l 1.2 1.1 1.1 10 Total trihalomethanes µg/l 3.1 1.0 1.0 30 Benzene µg/l 0.1 0.1 0.1 1 Coliform bacteria at 37°C n/100ml 0.0 0.0 0.0 0 Escherichia coli n/100ml 0.0 0.0 0.0 0 Enterococci n/100ml 0.0 0.0 0.0 0

Source: SEA

Consolidated Non-Financial Statement 2017 • 195 OTHER SUSTAINABILITY PERFORMANCES

Waste management22 LINATE - SEPARATED WASTE (TONNES) Again in 2017, the SEA Group confirmed its commitment to the separated collection of municipal urban waste at the Linate and 17 Malpensa airports. Currently, sep- Bulky 24 arated collection is implement- 17 ed for: paper, cardboard, wood, glass, plastic, metal, toner, organic waste. Separated waste manage- 50 ment was introduced also to the Wood 46 areas of the airport open to the 50 public. 79 Plastics & metal 81 73

364 Paper 450 389

85 Glass 85 73

172 Wet 159 154

13 Green 25 21

2017 2016 2015 Source: SEA

22 The 2015-2016 data refers only to SEA.

Consolidated Non-Financial Statement 2017 • 196 OTHER SUSTAINABILITY PERFORMANCES

All special waste produced is sep- MALPENSA - SEPARATED WASTE (TONNES) arated by type, with specific contracts with companies authorized for the management of such (for example: IT equipment, oils, emul- Inert from 0 sions, irons, paints, etc.). It is there- ceramic 0 dishware fore entirely separated by type 0,6 and disposed of, recycled according to the applicable regulations 0 and the technological standards Batteries 0,2 of the treatment plant to which it 0,2 is conferred.

9 Iron 6 9

116 Sweeper 125 156

83 Bulky 132 201

449 Organic 424 410

224 Glass & cans 207 184

522 Paper 492 485

92 Packaging 82 in plastic 79

53 Wood 43 54

2 Toner 2 3

2017 2016 2015 Source: SEA

Consolidated Non-Financial Statement 2017 • 197 OTHER SUSTAINABILITY PERFORMANCES

The disposal methods for the various types of waste, as established by regulation (attachments B and C of Legislative Decree 152/2006) are reported in the following ta- bles23:

LINATE - SPECIAL HAZARDOUS WASTE DISPOSAL METHODS (TONS)

Disposal/recovery method 2017 2016 2015 Principal utilization as fuel or as another energy production method (R1) 0.2 0.1 - Land incineration (D10) - 0.1 0.1 Held for allocation for one of the operations indicated at points R1 to R12 190 116 154 (R13) * Preliminary depositing of waste for allocation to one of the operations 36 8 11 indicated from points D1 to D14 (D15).

* The increase in the amount of special waste produced and put into reserve storage (R13) in 2017 is attributable to the start of a new de-icing fluid collection plant accounting for a total of 168.63 tons.

LINATE - SPECIAL NON-HAZARDOUS WASTE DISPOSAL METHODS (TONS)

Disposal/recovery method 2017 2016 2015 Principal utilization as fuel or as another energy production method (R1) 1,029 1,237 - Land incineration (D10) 0.6 0.5 1,296 Held for allocation for one of the operations indicated at points R1 to R12 728 854 746 (R13) * Recycling/recovery of organic substances not utilized as solvents (including 189 175 154 compost and other organic conversion processes) Preliminary depositing of waste for allocation to one of the operations 28 39 41 indicated from points D1 to D14 (D15). Organic treatment not specified elsewhere in the present attachment, resulting in the production of compost or mixing, which is eliminated accord- 336 239 239 ing to one of the processes listed at points D1 to D12 (D8)

* The data excludes the extraordinary production of non-hazardous ‘construction and demolition’ waste coming from airport surface cleaning activities and totaling 1,417.36 tons in 2016 and 548.98 tons in 2017.

23 The information was received from providers of the service.

Consolidated Non-Financial Statement 2017 • 198 OTHER SUSTAINABILITY PERFORMANCES

MALPENSA - SPECIAL HAZARDOUS WASTE DISPOSAL METHODS (TONS)

Disposal/recovery method 2017 2016 2015 Principal utilization as fuel or as another energy production method (R1) 0.3 0.2 - Land incineration (D10) - 0.2 0.3 Held for allocation for one of the operations indicated at points R1 to R12 45 42 55 (R13) Preliminary depositing of waste for allocation to one of the operations 23 35 22 indicated from points D1 to D14 (D15).

MALPENSA - SPECIAL NON-HAZARDOUS WASTE DISPOSAL METHODS (TONS)

Disposal/recovery method 2017 2016 2015 Principal utilization as fuel or as another energy production method (R1) 3,789 3,832 - Land incineration (D10) - 2.0 3,812 Held for allocation for one of the operations indicated at points R1 to R12 1,601 1,512 1,500 (R13) Preliminary depositing of waste for allocation to one of the operations 88 139 220 indicated from points D1 to D14 (D15). Preliminary reconditioning before one of the operations from points D1 to 8 - - D13 (D14) Organic treatment resulting in the production of compost or mixing, which is eliminated according to one of the processes listed at points D1 to D12 - 5 - (D9)

The dry residual portion of urban Special waste is predominantly waste produced at both airports transferred, depending on its spe- is disposed of in energy recov- cific characteristics, to recovery ery thermal-destruction plant; plants. In case of waste with un- the separated portion of waste suitable properties (e.g. sewage is however allocated to specific purging), the waste is transferred recovery and recycling plant (dis- to final disposal plants for collec- posal collection and transport or tion, transport and disposal or recovery by the Municipality). recovery by specialized or authorized companies.

Consolidated Non-Financial Statement 2017 • 199 Analysis of the Boundary of the material topics and reconciliation with GRI Standards ANALYSIS OF THE BOUNDARY OF THE MATERIAL TOPICS AND RECONCILIATION WITH GRI STANDARDS

Analysis of the Boundary of the material topics and reconciliation with GRI Standards

Material topics Boundary GRI topic reconciliation

Party impacted Type of impact

Economic Performance

Shared development process Group Direct impact Indirect Economic Impacts

Local Communities

Territorial dialogue and Group Direct impact N/A involvement

Transparent communication Group Direct impact N/A

Group, Airport Direct and indirect Noise Noise impact reduction operators impact Customer Health and Safety

Biodiversity

Noise

Environmental risks oversight Group Direct impact Effluents and Waste

Ground Travel Connections

Environmental Compliance

CO2 reduction Group Direct impact Emissions Adoption anti-corruption Group Direct impact Anti-corruption programmes

Business Continuity and Emergency Management Group, Airport Direct and indirect Customer Health and Safety Quality of passenger services operators impact Public Administration Service Quality Reduced Mobility Passenger Services Offer

Group, Airport Public transport accessibility to operators Indirect impact Ground Travel Connections the airport Public Administration

Consolidated Non-Financial Statement 2017 • 201 ANALYSIS OF THE BOUNDARY OF THE MATERIAL TOPICS AND RECONCILIATION WITH GRI STANDARDS

Material topics Boundary GRI topic reconciliation

Party impacted Type of impact

Direct and indirect Quality of airport work Employees 24 Occupational Health and Safety impact

Improvement of the passenger Group, Airport Indirect impact N/A commercial services offer operators

Employment

Employee engagement Group Direct impact Labor/Management Relations

Diversity and Equal Opportunity

Employee empowerment Group Direct impact Training and Education

Procurement Practices

Supplier selection transparency Group Direct impact Supplier Environmental Assessment

Energy efficiency Group Direct impact Energy

Water consumption Group Direct impact Water

Environmental mitigations Group Direct impact Local Communities

24 The Boundary of health and safety information and related injury rates exclusively includes employees of group companies. The organization is assessing the possibility of collecting data on injuries and occupational diseases involving contractors (representing 1.3% of total workers) from the reporting year 2018 onwards.

Consolidated Non-Financial Statement 2017 • 202 GRI Content Index GRI CONTENT INDEX

GRI Content Index

GENERAL DISCLOSURES

GRI Standard Disclosure Page No.

GRI 102: General Disclosures

Organizational profile

102-1 Name of the organization 8

102-2 Main brands, products and services 11-13

102-3 Location of headquarters 8

102-4 Operating territories 8

102-5 Nature of ownership and legal form 8-10

102-6 Markets served 114-115

102-7 Scale of the organization 8

102-8 Employees by employment contract, gender, region and classification 150-151; 188-189

102-9 Describe the organization’s supply chain 169-173

102-10 Significant changes to the organization or its supply chain 5-6

102-11 Application of prudent approach to risk management 61-63

Externally developed economic, environmental and social charters, principles, 102-12 128-131; 141-145 or other initiatives to which the organization subscribes or endorses

Memberships of industry or other associations and national or 102-13 182 international organizations

Strategy

102-14 Letter to stakeholders 2-3

102-15 Description of key impacts, risks and opportunities 61-64

Ethics and integrity

Values, principles, standards and norms of behavior such as codes of 102-16 8; 44-47; 53-56 conduct

Governance

Governance structure of the organization, including members of the highest governance body Identification of committees responsible 102-18 40-42 for decision-making processes for economic, environmental and social topics

102-19 Delegated authority for economic, environmental and social topics 43

Consolidated Non-Financial Statement 2017 • 204 GRI CONTENT INDEX

GENERAL DISCLOSURES

GRI Standard Disclosure Page No.

Managerial or supervisory positions responsible for economic, 102-20 14-15; 43 environmental and social topics

Composition of the highest governance body and respective 102-22 40-42 committees

102-23 Chair of the highest governing body 40

Stakeholder engagement

102-40 List of stakeholder groups involved 50

102-41 Collective bargaining agreements 193

102-42 Identification and selection of stakeholders 50-52

102-43 Approach to stakeholder engagement activity 51-52; 91-98

Material topics and critical issues emerging from the stakeholder 102-44 55-57; 91-98 engagement activity

Reporting Practice

Entities included in the Consolidated Financial Statements and those not 102-45 5-6 included in the sustainability report

102-46 Process for defining report content 5-6; 57-61

102-47 Identified material topics 57-61; 201-202

102-48 Amendment of information compared to previous report 5-6

Significant changes in objectives, boundaries or measurement methods 102-49 5-6 from previous reports

102-50 Reporting period of the sustainability report 5-6

102-51 Date of publication of the most recent report 5-6

102-52 Reporting cycle 5-6

102-53 Contact point for questions regarding the report and its content 5-6

102-54 Indication of the selected ‘in accordance’ option 5-6

102-55 GRI Contents 204-213

102-56 External assurance of report 215-217

Consolidated Non-Financial Statement 2017 • 205 GRI CONTENT INDEX

TOPIC-SPECIFIC STANDARDS

GRI Standard Disclosure Pages No.

GRI 200: ECONOMIC PERFORMANCE INDICATORS

Topic: Economic performance

GRI-103: Management approach

103-1 Explanation of the material topic and its Boundary 57-61; 201-202

103-2 The management approach and its components 11-13

103-3 Evaluation of the management approach 11-13

GRI 201: Economic performance

201-1 Direct economic value generated and distributed 74-76

201-3 Pension plans 157-158

In 2017, Euro 3,829,000 in financing was received from the Public Administration, in line with 2015 (Euro 3,857,000) and down from 2016 (Euro 5,701,000), including the financing received by SEA from the Ministry for Infrastructure and 201-4 Significant financial assistance from the Public Administration25 Transport and from the European Commission, predominantly in relation to the construction of the Malpensa Terminal 2 railway station, and contributions that Sea Prime received for the adaptation of the river Lambro and for the training of personnel.

Topic: Indirect economic impacts

GRI-103: Management approach

103-1 Explanation of the material topic and its Boundary 57-61; 201-202

103-2 The management approach and its components 65-72: 76-87

103-3 Evaluation of the management approach 65-72: 76-87

25 In order to ensure data representation uniformity, the 2015 and 2016 data was modified.

Consolidated Non-Financial Statement 2017 • 206 GRI CONTENT INDEX

TOPIC-SPECIFIC STANDARDS

GRI Standard Disclosure Pages No.

GRI 203: Indirect economic impacts

203-1 Infrastructure investments and services supported 65-72

Analysis and description of the main indirect economic impacts 203-2 76-87 considering emerging externalities

Topic: Procurement practices

GRI-103: Management approach

103-1 Explanation of the material topic and its Boundary 57-61; 201-202

103-2 The management approach and its components 169-171

103-3 Evaluation of the management approach 169-171

GRI 204: Procurement practices

204-1 Proportion of spending on local suppliers 171-173

Topic: Anti-corruption

GRI-103: Management approach

103-1 Explanation of the material topic and its Boundary 57-61; 201-202

103-2 The management approach and its components 46-47

103-3 Evaluation of the management approach 46-47

GRI 205: Anti-corruption

205-3 Cases of proven corruption and actions taken 46-47

GRI 300: ENVIRONMENTAL PERFORMANCE INDICATORS

Topic: Energy

GRI-103: Management approach

103-1 Explanation of the material topic and its Boundary 57-61; 201-202

103-2 The management approach and its components 63-64; 164-165

103-3 Evaluation of the management approach 164-165

GRI 302: Energy

302-1 Energy consumption within the organization 165

302-3 Energy intensity 165

Topic: Water

GRI-103: Management approach

103-1 Explanation of the material topic and its Boundary 57-61; 201-202

103-2 The management approach and its components 63-64; 166

103-3 Evaluation of the management approach 166

Consolidated Non-Financial Statement 2017 • 207 GRI CONTENT INDEX

TOPIC-SPECIFIC STANDARDS

GRI Standard Disclosure Pages No.

GRI 303: Water

303-1 Total water withdrawal by source 166

303-2 Water sources significantly affected by withdrawal of water 166

303-3 Percentage and total volume of water recycled and reused 108

AO4 Rainwater quality according to applicable regulations 108

Topic: Biodiversity

GRI-103: Management approach

103-1 Explanation of the material topic and its Boundary 57-61; 201-202

103-2 The management approach and its components 63-64; 183-184

103-3 Evaluation of the management approach 183-184

GRI 304: Biodiversity

Location and size of land owned, leased or managed within or near 304-1 protected areas or high biodiversity value areas even if outside of 183-184 protected areas.

Description of significant impacts of activities, products and services on 304-2 biodiversity within protected areas or high biodiversity value areas even 183-184 if outside protected areas.

304-3 Protected or restored habitats 183-184

Number of species listed in the IUCN Red List and in national lists of 304-4 protected species with habitats in operational areas of the organization, 183-184 subdivided by extinction risk level.

Topic: Emissions

GRI-103: Management approach

103-1 Explanation of the material topic and its Boundary 57-61; 201-202

103-2 The management approach and its components 63-64; 99-100

103-3 Evaluation of the management approach 99-100

GRI 305: Emissions

305-1 Total direct GHG emissions (Scope 1) 100

305-2 Total indirect GHG emissions (Scope 2) 100

305-3 Other indirect emissions (Scope 3) 100

305-4 GHG emissions intensity 100

Emissions of NOx, SOx and other significant emissions into the 305-7 101-104 atmosphere, by type and weight

Air quality pollutant concentrations in micrograms per cubic meter (μg/ A05 101-104 m3) or parts per million (ppm) as required by applicable legislation

Consolidated Non-Financial Statement 2017 • 208 GRI CONTENT INDEX

TOPIC-SPECIFIC STANDARDS

GRI Standard Disclosure Pages No.

Topic: Effluents and waste

GRI-103: Management approach

103-1 Explanation of the material topic and its Boundary 57-61; 201-202

103-2 The management approach and its components 63-64; 106-108

103-3 Evaluation of the management approach 106-108

GRI 306: Effluents and waste

306-1 Total water discharge by quality and destination 107

306-2 Total weight of waste by type and disposal methods 166-168; 196-199

306-3 Total number and volume of significant spills 108-110

The Group does not Weight of waste classified as hazardous according to the Basel transport, import or 306-4 Convention and transported, imported, exported or treated, as well as export waste considered percentage transported abroad hazardous under the Basel Convention.

Identity, dimensions, conservation status and value of the biodiversity 306-5 of aquatic fauna and flora and related habitats affected significantly by 108; 183-184 water discharges and dispersions attributable to the organization

Quantity of de-icing fluid used and treated (m3and/or tons), subdivided AO6 107; 194 by runways and aircraft

Topic: Environmental compliance

GRI-103: Management approach

103-1 Explanation of the material topic and its Boundary 57-61; 201-202

103-2 The management approach and its components 47; 63-64

103-3 Evaluation of the management approach 47

GRI 307: Environmental compliance

307-1 Non-compliance with environmental regulations and laws 47

Topic: Supplier environmental assessment

GRI-103: Management approach

103-1 Explanation of the material topic and its Boundary 57-61; 201-202

103-2 The management approach and its components 169-171

103-3 Evaluation of the management approach 169-171

GRI 308: Supplier environmental assessment

Percentage of new suppliers assessed according to environmental 308-1 170 criteria

Consolidated Non-Financial Statement 2017 • 209 GRI CONTENT INDEX

TOPIC-SPECIFIC STANDARDS

GRI Standard Disclosure Pages No.

Topic: Noise

GRI-103: Management approach

103-1 Explanation of the material topic and its Boundary 57-61; 201-202

103-2 The management approach and its components 63-64; 104-105

103-3 Evaluation of the management approach 104-105

Number and percentage of people residing in areas affected by airport AO7 183 noise

GRI 400: SOCIAL PERFORMANCE INDICATORS

Topic: Employment

GRI-103: Management approach

103-1 Explanation of the material topic and its Boundary 57-61; 201-202

103-2 The management approach and its components 150

103-3 Evaluation of the management approach 150

GRI 401: Employment

401-1 New hires and employee turnover 190-191

Benefits provided for full-time workers, but not for part-time or 401-2 156 temporary employees, subdivided by main production sites

401-3 Parental leave 158-159

Topic: Labor/Management Relations

GRI-103: Management approach

103-1 Explanation of the material topic and its Boundary 57-61; 201-202

103-2 The management approach and its components 193

103-3 Evaluation of the management approach 193

GRI 402: Labor/Management Relations

402-1 Minimum notice period for operational changes 193

Topic: Occupational Health and Safety

GRI-103: Management approach

103-1 Explanation of the material topic and its Boundary 57-61; 201-202

103-2 The management approach and its components 153-154

103-3 Evaluation of the management approach 153-154

Consolidated Non-Financial Statement 2017 • 210 GRI CONTENT INDEX

TOPIC-SPECIFIC STANDARDS

GRI Standard Disclosure Pages No.

GRI 403: Occupational Health and Safety

Percentage of workers represented on the Health and Safety 403-1 154 Committee

Type of injury and rates of injury, occupational diseases, lost days, and 403-2 absenteeism, and total number of work-related fatalities, by region and 155-156; 163 by gender

403-4 Formal agreements with trade unions relating to health and safety 193

Topic: Training and Education

GRI-103: Management approach

103-1 Explanation of the material topic and its Boundary 57-61; 201-202

103-2 The management approach and its components 151-152

103-3 Evaluation of the management approach 151-152

GRI 404: Training and Education

Average hours of training per year per employee by gender and by 404-1 152 employee category

Programs for updating employee skills and providing assistance in 404-2 152 reassignment phases

Percentage of employees regularly receiving performance and career 404-3 152 development evaluations by gender

Topic: Diversity and equal Opportunity

GRI-103: Management approach

103-1 Explanation of the material topic and its Boundary 57-61; 201-202

103-2 The management approach and its components 152-153

103-3 Evaluation of the management approach 152-153

GRI 405: Diversity and equal Opportunity

405-1 Diversity governance bodies and employees 41; 152-153

Ratio of women’s basic salary and remuneration to those of men in the 405-2 153 same professional category, subdivided by significant activity areas

Topic: Local communities

GRI-103: Management approach

103-1 Explanation of the material topic and its Boundary 57-61; 201-202

103-2 The management approach and its components 65-66

103-3 Evaluation of the management approach 65-66

Consolidated Non-Financial Statement 2017 • 211 GRI CONTENT INDEX

TOPIC-SPECIFIC STANDARDS

GRI Standard Disclosure Pages No.

GRI 413: Local communities

Percentage of operations in which local community engagement, 413-1 65-67 assessment and development programs are carried out

Operations with potential or current significant negative impacts on 413-2 76-87 local communities

During the year no Number of people physically or economically displaced, voluntarily or cases of voluntary or AO8 involuntarily, by the airport manager or on its behalf by a governmental involuntary displacements or other entity and the indemnity provided were reported.

Topic: Customer Health and Safety

GRI-103: Management approach

103-1 Explanation of the material topic and its Boundary 57-61; 201-202

103-2 The management approach and its components 104-105; 111-112

103-3 Evaluation of the management approach 104-105; 111-112

GRI 416: Customer Health and Safety

Percentage of significant categories of products and services for 416-1 which health and safety impacts are assessed in order to promote 104-105; 111-112 improvement

During the reporting Total number (subdivided by type) of cases of non-compliance with period, no cases of 416-2 regulations and voluntary codes concerning the health and safety non-compliance were impacts of products and services during their life cycle reported.

AO9 Total annual number of wildlife strikes per 10,000 aircraft movements 112

Topic: Business continuity and emergency management

GRI-103: Management approach

103-1 Explanation of the material topic and its Boundary 57-61; 201-202

103-2 The management approach and its components 187-188

103-3 Evaluation of the management approach 187-188

Topic: Reduced mobility passenger services offer

GRI-103: Management approach

103-1 Explanation of the material topic and its Boundary 57-61; 201-202

103-2 The management approach and its components 64; 185-187

103-3 Evaluation of the management approach 64; 185-187

Consolidated Non-Financial Statement 2017 • 212 GRI CONTENT INDEX

TOPIC-SPECIFIC STANDARDS

GRI Standard Disclosure Pages No.

Topic: Service quality

GRI-103: Management approach

103-1 Explanation of the material topic and its Boundary 57-61; 201-202

103-2 The management approach and its components 128-131; 141-148

103-3 Evaluation of the management approach 128-131; 141-148

Topic: Ground travel connections

GRI-103: Management approach

103-1 Explanation of the material topic and its Boundary 57-61; 201-202

103-2 The management approach and its components 33-38

103-3 Evaluation of the management approach 33-38

Topic: Territorial dialogue and involvement

GRI-103: Management approach

103-1 Explanation of the material topic and its Boundary 57-61; 201-202

103-2 The management approach and its components 91-98

103-3 Evaluation of the management approach 91-98

Topic: Transparent communication

GRI-103: Management approach

103-1 Explanation of the material topic and its Boundary 57-61; 201-202

103-2 The management approach and its components 51-52

103-3 Evaluation of the management approach 51-52

Topic: Increase in the provision of commercial services to passengers

GRI-103: Management approach

103-1 Explanation of the material topic and its Boundary 57-61; 201-202

103-2 The management approach and its components 135-141

103-3 Evaluation of the management approach 135-141

Consolidated Non-Financial Statement 2017 • 213 Independent Auditors’ Report INDEPENDENT AUDITORS’ REPORT

Consolidated Non-Financial Statement 2017 • 215 INDEPENDENT AUDITORS’ REPORT

Consolidated Non-Financial Statement 2017 • 216 INDEPENDENT AUDITORS’ REPORT

Consolidated Non-Financial Statement 2017 • 217 SEA Group - Consolidated Non-Financial Statement 2017 Published by SEA Group Corporate Social Responsibility in collaboration with the SEA Departments and Corporate Functions.

We thank the SEA Group people who contributed to useful data retrieval to define the chart accounts

For further information: SEA S.p.A. - 20090 Aeroporto Milano Linate, Sebastiano Renna, Head of Corporate Social Responsibility Manager e-mail: [email protected]

The SEA Group’s focus on environmental protection, through the adoption of targeted initiatives, has significantly reduced CO2 emissions.

Malpensa and Linate confirm their exceptional record at European level, achieving “Neutrality” under the Airport Carbon Accreditation Initiative.