Investing for the Future
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TAV AIRPORTS HOLDING Stock Ticker Symbol: TAVHL Date of Istanbul Trade Registry: 07.11.1997 Trade Registration & MERSIS No: 590256 / 0832-0062-0900-0011 Phone: +90 212 463 3000 / 2122-2123-2124 Fax: +90 212 465 3100 Website: www.tavhavalimanlari.com.tr Address: Istanbul Ataturk Airport International Terminal (Gate A-Next to VIP) 34149 Yesilkoy, Istanbul TAV AIRPORTSTAV HOLDING INVESTING FOR THE FUTURE ANNUAL REPORT 2015 TAV AIRPORTS HOLDING ANNUAL REPORT 2015 This report has been published using recycled paper and environment-friendly technologies. CONTENTS 02 TAV Airports: Turkey’s Global Brand in Airport Operations 03 Airport Operations of TAV and ADP 04 TAV’s Growth Strategy 05 Istanbul Ataturk Airport International Terminal Extension Project TAV’S GROWTH STRATEGY 04 08 Our Service Companies in 2015 14 Board of Directors’ Message 16 CEO’s Message 18 Concessions at a Glance 20 MAJOR DEVELOPMENTS IN 2015 20 Aviation Industry and TAV 29 Financial Summary 30 Investments in 2015 30 Awards & Achievements 31 Highlights of 2015 34 Subsequent Events 35 Investor Relations and BIST Performance 36 CORPORATE GOVERNANCE AND SUSTAINABILITY BOARD OF DIRECTORS’ MESSAGE 14 36 Sustainability 38 Risk Management and Internal Audit 40 Corporate Governance Principles Compliance Report 52 Operating Principles of the Committees 54 Ordinary General Assemblies 56 Board of Directors 62 Senior Management 79 Financial Benefits Provided to the Members of the Board of Directors and Senior Management 80 Amendment of the Articles of Association 80 Dividends 81 Subsidiary Report 81 Auditor’s Report 82 Auditor’s Report on Risk Assessment Committee and Risk Management 82 Statement of Responsibility HIGHLIGHTS OF 2015 31 83 Statement of Independence 84 OPERATIONAL & FINANCIAL FIGURES 84 Euro Based Financials 84 Guidance and Actuals 84 2015 Guidance 84 Guidance for 2016 85 Operational and Financial Performance 86 Airport Companies 87 Service Companies 87 TAV in Figures 89 Consolidated Financial Statements and Independent Audit Report 170 Glossary OPERATIONAL & FINANCIAL FIGURES TAV HAVALİMANLARI HOLDİNG 2015 FAALİYET RAPORU84 WE HAVE COME TO THE END OF CAPACITY INCREASE INVESTMENTS FOR ISTANBUL ATATURK AIRPORT, WHICH WAS THE THIRD BUSIEST AIRPORT IN EUROPE IN 2015. ADDITIONAL FACILITY BUILDING WITH A SERVICE CAPACITY OF 10 MILLION PASSENGERS PER YEAR IS NEAR COMPLETION. TAV AIRPORTS: TURKEY’S GLOBAL BRAND IN AIRPORT OPERATIONS TAV Operations ADP Operations TAV Airports, Turkey’s global airport TAV Commercial Flights operator, has operations in many ADP’s Share countries around the world. TAV’s Share TAV Airports, Turkey’s global airport operator, manages Istanbul Ataturk, Ankara Esenboga, Izmir Adnan Menderes, Gazipasa Alanya ADP Passengers and Milas Bodrum Airports in Turkey. Additionally, TAV Airports operates one airport in Kingdom of Saudi Arabia, two airports each TAV Passengers in Macedonia, Tunisia and Georgia and Zagreb Airport in Croatia. The Company with its subsidiaries and affiliates also conducts business in related areas of airport operations including duty free, food & beverage services, ground handling services, information technologies, security, and operation services. In addition, TAV Airports provides commercial services at Riga Airport in Latvia’s capital city. In 2015, TAV Airports served nearly 780 thousand flights and 102 million passengers. The Company’s shares are listed on Borsa Istanbul under the ticker code “TAVHL”. LATVIA TAV AIRPORTS OWNERSHIP STRUCTURE(1) Riga A.* MEXICO 100% Aéroports de Paris Group* *Only commercial areas Tepe Insaat Sanayi A.S. FRANCE Akfen Holding A.S. Paris Charles de Gaulle A. 100% Sera Yapi Endustrisi ve Ticaret A.S. Paris Orly A. İGA Lorem Ipsum Sunumu TURKEY Free-float (Other) 100% Istanbul Ataturk A. Passengers CHILE Non-floating (Other) 100% 95.4 million Izmir Adnan Menderes A. Owner and Operator 100% AÉROPORTS DE PARIS GROUP* 38.0% Ankara Esenboga A. CROATIA 100% TEPE INSAAT SANAYI A.S. Zagreb A. Gazipasa Alanya A. 8.1% 15% 100% AKFEN HOLDING A.S. Zagreb A. Milas Bodrum A. 8.1% 21% 100% Commercial Flights Commercial Flights SERA YAPI ENDUSTRISI VE TICARET A.S. 39.9 Thousand 638.2 Thousand 2.0% Passengers Passengers FREE-FLOAT (OTHER) 2.6 Million 89.0 Million 40.3% Concession Operator Concession Operator NON-FLOATING (OTHER) 3.5% MEXICO JORDAN Mexico North Central Amman Queen Alia A. There are no privileged shares in our Company. Mr. Hamdi Akin 25.5% 9% indirectly has 6.2% of our Company shares due to his shares in Akfen Passengers Passengers Holding. 17.1 Million 7.1 Million *TANK OWA Alpha GmbH, a wholly owned subsidiary of Aéroports de Paris. Operator and Management Contract and (1) As of 31 December 2015. Strategic Partner Strategic Partner 2 TAV AIRPORTS HOLDING ANNUAL REPORT 2015 AIRPORT OPERATIONS OF TAV AND ADP TAV 3 CONTINENTS 7 COUNTRIES 14 AIRPORTS 102 Million PASSENGERS TAV AND ADP 4 CONTINENTS 15 COUNTRIES BELGIUM 34 LATVIA AIRPORTS NETHERLANDS CROATIA 252 Million PASSENGERS MACEDONIA *Excluding Schiphol and Riga Airport passengers GEORGIA REPUBLIC OF MAURITIUS FRANCE TURKEY Mauritius A. TUNISIA 10% Passengers JORDAN 3.2 Million KINGDOM OF Operator and Strategic Partner SAUDI ARABIA KINGDOM OF SAUDI ARABIA Jeddah A. Jeddah Hajj Terminal GUINEA Passengers REPUBLIC OF MAURITIUS 7.3 Million İGA Lorem Ipsum Sunumu Management Contract and Strategic Partner GEORGIA Tbilisi A. KINGDOM OF SAUDI ARABIA 80% Medinah A. Batumi A. 33% 76% Commercial Flights Commercial Flights 49.0 Thousand 25.1 Thousand Passengers Passengers CHILE NETHERLANDS 5.8 Million 2.1 Million Santiago de Chile A. Amsterdam Schiphol A. Concession Operator Concession Operator 45% 8% Passengers Passengers TUNISIA MACEDONIA 17.2 Million 58.3 Million Monastir A. Ohrid A. Concession Operator Industrial Cooperation 67% 100% Enfidha A. Skopje A. GUINEA BELGIUM 67% 100% Conakry A. Liège A. Commercial Flights Commercial Flights 29% 25.6% 12.2 Thousand 15.5 Thousand Passengers Cargo Passengers Passengers 0.3 Million 0.6 Million 1.4 Million 1.6 Million Operator Strategic Partner Concession Operator Concession Operator TAV AIRPORTS HOLDING ANNUAL REPORT 2015 3 TAV’S GROWTH STRATEGY With our strong partners and integrated business model, we plan to focus on new and profitable business opportunities all over the world in the coming period. ORGANIC GROWTH We are on three continents, in seven countries, and at 14 airports. The number of passengers we serve increased 8% and reached 102 million in 2015. Our primary target in the upcoming period will be to maximize our revenue and profitability at all the airports where we operate. INORGANIC GROWTH In the next 15 years, USD 1 trillion in total investment is anticipated in the world aviation sector. With our strong partners and integrated business model, we plan to focus on new and profitable business opportunities all over the world in the coming period. SERVICE COMPANY GROWTH OUTSIDE THE INERNATIONAL TERMINAL 2 TAV ECOSYSTEM 287 Thousand m Over the years, our service companies have significantly contributed to TAV’s success and started to provide services at airports not operated by TAV. We believe that the world aviation sector will soon meet with our star companies rising from Turkey in areas such as duty free, food & beverage service, ground services and information technologies. Domestic Terminal International Terminal Additional Terminal 4 TAV AIRPORTS HOLDING ANNUAL REPORT 2015 ISTANBUL ATATURK AIRPORT INTERNATIONAL TERMINAL EXTENSION PROJECT ADDITIONAL TERMINAL PROJECT +10 MILLION PASSENGERS INVESTMENTS IN THE EXISTING INTERNATIONAL TERMINAL • Baggage handling system capacity increased. • Mezzanine floor on the land side moved to the air side to expand the air side commercial and passenger area. • 32 additional check-in islands in addition to the existing 224 (May 2015) EXTENSION PROJECT DOMESTIC TERMINAL Terminal Area Existing cargo terminal was demolished and is being replaced with a 2 passenger terminal totaling 27,000 square-meters; total number of 63 Thousand m passenger bridges will rise from 26 to 34. 13 new bus gates will enter into service. There will be new check-in islands and passport control zones in the additional facility of 11 thousand square meters. ADDITIONAL PARKING POSITIONS • 26 additional parking positions and taxiways built in the area previously used by the military. (November 2014) COMPLEMENTARY TERMINAL • Number of aircraft parking positions increased from 102 to 145, Terminal Area 2 2 up 42%. 27 Thousand m + 11 Thousand m • Investments in aircraft parking stands and new taxiways were Departing Passenger Terminal financed by the State Airports Authority (DHMI). Source: Ministry of Transportation of Turkey. Istanbul Ataturk Airport, ISTANBUL ATATURK AIRPORT PASSENGER TRAFFIC (MILLION PASSENGERS) the third busiest airport 61.3 56.7 in Europe in 2015, will be 51.3 able to accommodate 45.1 37.4 32.1 29.8 more passengers with 28.6 23.2 the international terminal 21.3 extension project. 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 TAV AIRPORTS HOLDING ANNUAL REPORT 2015 5 ISTANBUL – INTERNATIONAL TERMINAL EXTENSION TERMINAL EXTENSION 27,000 PROJECT M2 8 BRIDGES (FOR NARROW BODY AIRCRAFT) The acquisition of an equity stake in 13 TAV Airports by Aéroports de Paris 13 BUS GATES paved the way for both a technical and strategic partnership betwen the two airport operators. 34 AIRPORTS, 252* MILLION PASSENGERS TAV and Aéroports de Paris together constitute one of world’s largest airport operating platforms, achieving growth by Additional Arrival Bus Gates & complementing each other and providing services to 252 million Schengen Gates passengers at 34 airports. LONG-TERM OPERATING CONTRACTS TAV will continue to operate in: Tunisia until 2047, Zagreb until 2042, Medinah until 2037, Milas Bodrum until 2035, Gazipasa Passenger Boarding Bridges Alanya until 2034, Izmir until 2032, Macedonia until 2030, Georgia until 2027 and Ankara until 2023. EXPERT IN AIRPORT DESIGN ADPI is one of the largest airport design companies in the world. Additional STRONG GLOBAL PARTNERS Bus Gates Aéroports de Paris’s acquisition of an equity stake in TAV Airports paved the way for both a technical and strategic partnership between the two airport operators.