Annual Report 2013 Frankfurt Airport behind the Scenes Annual Report 2013 Fraport Fraport Group At a Glance The Fraport Group operates internationally at 13 airports and belongs to the world’s leading airport operators. The Group’s main site is Frankfurt Airport, one of the world’s major air traffic hubs. Divided into four segments, Fraport had a workforce of more than 20,000 employees and generated revenue of € 2.56 billion in 2013. Group EBITDA stood at € 880.2 million, and the Group result was € 235.7 million. Listed since 2001, the parent company of the Fraport Group, Fraport AG, is headquartered in Frankfurt am Main. Financial performance indicators € million 2013 2012 Change in % Revenue 2,561.4 2,442.0 4.9 EBITDA 880.2 848.7 3.7 EBIT 528.1 496.0 6.5 EBT 340.7 364.1 – 6.4 Group result 235.7 251.5 – 6.3 Profit attributable to shareholders of Fraport AG 221.0 238.2 – 7.2 Earnings per share (basic) (€) 2.40 2.59 – 7.3 Year-end closing price of the Fraport share (€) 54.39 43.94 23.8 Dividend per share 1) (€) 1.25 1.25 0.0 Operating cash flow 574.8 553.0 3.9 Free cash flow 73.1 –162.4 – Total assets 9,523.4 9,640.6 –1.2 Shareholders’ equity 3,098.8 2,948.2 5.1 Group liquidity 1,486.3 1,663.1 –10.6 Net financial debt 2,975.4 2,934.5 1.4 Return on revenue (%) 13.3 14.9 – Return on shareholders’ equity (%) 7.5 8.5 – EBITDA margin (%) 34.4 34.8 – EBIT margin (%) 20.6 20.3 – ROCE (%) 8.9 8.7 – ROFRA (%) 9.5 9.6 – Gearing ratio (%) 101.3 104.9 – Table 1 Non-financial performance indicators 2013 2012 Change in % Global satisfaction (Frankfurt) (%) 80 80 – Punctuality rate (Frankfurt) (%) 82.3 80.3 – Baggage connectivity (Frankfurt) (%) 98.4 98.2 – Equipment availability (Frankfurt) (%) 94.8 95.0 – Employee satisfaction 2) 3.02 – – Total number of work accidents 1,346 1,445 – 6.9 Table 2 Employees 2013 2012 Change in % Average number of employees 20,947 20,963 – 0.1 1) Proposed dividend (2013). Table 3 2) No employee satisfaction survey took place for the 2012 fiscal year. Fraport Segments Aviation Aviation The Aviation segment includes airside and terminal management € million 2013 2012 Change as well as corporate safety and security at the Frankfurt site. The in % growth in traffic and the increase in airport charges boosted revenue by 2.6 % to € 845.2 million in the previous fiscal year. Revenue 845.2 823.4 2.6 With a workforce of 6,194 employees the segment achieved EBITDA 205.4 201.9 1.7 EBITDA of € 205.4 million. EBITDA margin 24.3 % 24.5 % – EBIT 88.1 79.6 10.7 ROFRA 4.0 % 3.9 % – Average number of employees 6,194 6,298 –1.7 Table 4 Retail & Real Estate Retail & Real Estate The Retail & Real Estate segment consists of retailing activities, € million 2013 2012 Change parking facility and real estate management at Frankfurt Airport. in % In the fiscal year 2013 Pier A-Plus in particular, which was inau- gurated in October 2012, boosted revenue and EBITDA. With Revenue 469.0 452.9 3.6 a workforce of 648 employees, the segment generated revenue EBITDA 350.7 335.2 4.6 of € 469.0 million and EBITDA of € 350.7 million. EBITDA margin 74.8 % 74.0 % – EBIT 267.9 252.8 6.0 ROFRA 15.0 % 15.5 % – Average number of employees 648 629 3.0 Table 5 Ground Handling Ground Handling The core business of the Ground Handling segment comprises Fraport Group and Segments € million 2013 2012 Change all services dealing with passengers, aircraft and cargo. With a in % workforce of 9,017 employees, the most staff-intensive seg- ment at the Frankfurt site achieved revenue growth of 1.1 % to Revenue 656.2 649.3 1.1 € 656.2 million in the previous fiscal year, thanks to the growth EBITDA 38.2 37.8 1.1 in traffic and the increase in infrastructure charges. EBITDA for EBITDA margin 5.8 % 5.8 % – the segment was € 38.2 million. EBIT – 2.3 –1.1 – ROFRA – 0.4 % – 0.2 % – Average number of employees 9,017 8,924 1.0 Table 6 External Activities & Services External Activities & Services The External Activities & Services segment comprises the Group € million 2013 2012 Change companies outside the Frankfurt site and auxiliary services in in % Frankfurt, including IT and facility management in particular. The growth in foreign companies was the main factor behind an Revenue 591.0 516.4 14.4 increase in revenue of 14.4 %. With revenue of € 591.0 million, EBITDA 285.9 273.8 4.4 the segment posted EBITDA of € 285.9 million in fiscal year 2013. EBITDA margin 48.4 % 53.0 % – EBIT 174.4 164.7 5.9 ROFRA 14.0 % 15.7 % – Average number of employees 5,088 5,112 – 0.5 Table 7 About this Report The present Annual Report enables Fraport to render account for the fiscal year 2013. The data and comments concerning the asset, financial and earnings position have been prepared in compliance with the accounting and disclosure standards to be applied to the fiscal year 2013. The disclosures contained in the Business Outlook also take the accounting standards to be applied as from January 1, 2014 into consideration and can be found from page 84 onwards of the Report. To increase the currency of the Report, Fraport has taken into consideration relevant disclosures concerning events that occurred up to the Responsibility Statement and Auditor’s Report by PricewaterhouseCoopers AG on March 4, 2014. The Annual Report is published in German and English. 1 To our Shareholders 3 Consolidated Financial Statements Letter of the CEO 4 Consolidated Income Statement 92 The Fraport Executive Board 8 Consolidated Statement of Comprehensive Income 93 Report of the Supervisory Board 10 Consolidated Statement of Financial Position 94 Statement on Corporate Governance and Consolidated Statement of Cash Flows 95 Corporate Governance Report 16 Consolidated Statement of Changes in Equity 96 Consolidated Statement of Changes in 98 non-current Assets Segment Reporting 100 Group Management Report 2 Group Notes 102 Notes to the Consolidation and Accounting Policies 102 Overview of Business Development 24 Notes to the Consolidated Income Statement 120 Situation of the Group 26 Notes to the Consolidated Financial Position 128 Operating Activities 26 Notes to the Segment Reporting 154 Structure 26 Notes to the Consolidated Statement of Cash Flows 155 Strategy 29 Other Disclosures 156 Control 32 Legal Disclosures 35 Remuneration Report 36 Further Information Economic Report 44 4 General Statement of the Executive Board 44 Economic and industry-specific Conditions 44 Responsibility Statement 194 Significant Events 45 Auditor’s Report 195 Business Development 46 Seven-Year Overview 196 Results of Operations 48 List of Graphics and Tables 198 Segments 50 Glossary 200 Asset and Financial Position 53 Financial Calendar 2014 C5 Value Management 59 Traffic Calendar 2014 C5 Non-financial Performance Indicators 60 Imprint C5 Employees 61 Research and Development 63 Share and Investor Relations 63 Significant Events after the Balance Sheet Date 67 Outlook Report 67 General Statement of the Executive Board 67 Risk and Opportunities Report 67 Business Outlook 84 1 Aviation Page 2 To our Shareholders To Retail & Real Estate Page 22 Frankfurt Airport behind the Scenes Group Management Report Group Management Report With 58 million passengers and more than two million metric tons of air freight and air mail handled, Frankfurt Airport is one of the largest passenger and cargo airports in the world. While passengers only experience the airport processes that are visible to them, such as check-in or security control, Fraport and its business partners provide a much broader range of services “behind the scenes” to ensure a seamless traveling experience. Some of these processes are presented to you on the section dividers of this Annual Report. You can also get an idea of further Fraport processes on site during a tour of the airport and experience the fascinating world of the airport live. Consolidated Financial Statements Ground Handling Page 90 Further Information External Activities & Services Page 192 2 Fraport Annual Report 2013 To our Shareholders Fraport Annual Report 2013 To our Shareholders 3 Aviation To our Shareholders To A good 17,000 airfield lights... Group Management Report In the previous fiscal year about 473,000 aircraft took off and landed at Frankfurt. This equated to about 1,300 Group Management Report daily aircraft movements. Seamless airport operations would be impossible without the use of about 17,000 airfield lights that mark the ways between the take-off and landing runway system and the terminal. To ensure that the system is always ready for use, Fraport maintains the airfield lights on an as-required and cyclical basis. In addition to a computer-controlled system, which reports defective halogen or LED lamps, Fraport employees check that the airfield lights are functioning by covering the take-off and landing runway system on a regular basis. Consolidated Financial Statements Further Information 2 Fraport Annual Report 2013 To our Shareholders ...with uninterrupted energy supply Fraport monitors the uninterrupted energy supply of Frankfurt Airport on a centralized basis and ensures this by means of a redundantly configured power supply system. Even if the power supply system fails, Fraport can guarantee an energy supply to the take-off and landing runway system by using several oversized diesel motors. Direct refueling of the motors, whose tanks hold about 40,000 liters of diesel, ensures that airport operations can be constantly maintained in an emergency.