Consolidated interim management report for the three-month period ended 31 March 2020 Aena S.M.E., S.A. and Subsidiaries Webcast/Conference call: Telephones: 29 April 2020 Spain: +34 914 146 280 1 p.m. (Madrid time) United Kingdom: +44 (0) 2071 928 000 https://edge.media-server.com/mmc/p/pmce279u USA: +1 631 510 7495 Access code: 6474059 WorldReginfo - e37023e6-c36e-4e8d-9610-96ef7431b34e Consolidated interim management report Q1 2020 l Aena S.M.E., S.A. and Subsidiaries 1. Executive summary This quarter has been particularly (-59.3%) is proving even more the Government Royal Decree-Law affected by the Covid-19 outbreak pronounced in April (over 95%). 8/2020 of 17 March on extraordinary and the State of Alarm decreed on urgent actions to cope with the 14 March by the Government in On 23 March 2020, in order to adapt economic and social impact of response to the emergency health to the sharp decline in activity, Aena Covid-19, the Board must situation in Spain. announced the adjustment of the reconvene the Ordinary General capacity of its airports to the specific Shareholders’ meeting within a The impact of the spread of Covid- operational needs. In the case of the maximum period of one month from 19 on the traffic of Aena’s Spanish Adolfo Suárez Madrid-Barajas the end of the State of Alarm and network began in late February with Airport, all the airport operations the Meeting must be held before 31 the cancellation of flights to and have been grouped into terminal T4, October 2020. At the time of the from China by various carriers. A temporarily shutting down T1,2,3 new call, the Board will proceed to few days later, given the increase in and T4S. The Josep Tarradellas assess the proposal for the cases in northern Italy, the Spanish Barcelona-El Prat Airport has distribution of dividends from the net Government cancelled direct flights concentrated all its flights in terminal profit of the 2019 financial year. between Spain and Italy, and then, T1, in zones A and D, and closed its on 12 March, the US announced the operations in terminal T2. In other On 1 April it was announced that, in suspension of flights from Europe airports, such as those of the order to strengthen the Company's for a month. At the time of writing a Balearic and Canary Islands, the liquidity, loans were signed with total of 160 countries have imposed use of terminals has been adapted various financial entities for a travel restrictions on citizens coming and, over the following days, the combined amount of €1,075 million, from Spain. adjustments have been applied to with maturities between 1 and 4 the rest of the network, reorganising years. On 14 March the Government the operations of 20 airports in decreed a State of Alarm in Spain groups I, II and III to be available on With the signing of these loans, for the following 15 days. Since then demand. Aena increases its current it has been extended three times availability of cash and credit and is currently in force until 9 May. This capacity adjustment at airports facilities to a total of €2,425 million, The State of Alarm limits people's drive the cost saving plan in addition to which a further €495 free movement and the opening to announced by Aena. This plan is million are currently available under the public of retail premises and based on the renegotiation of the €900 million Euro Commercial establishments is suspended, with service contracts (security, cleaning, Paper (ECP) programme. The the exception of, among others, food maintenance, etc.), elimination of Company continues to negotiate establishments, basic needs and expenses and a halt to new non- additional financing transactions pharmacies. essential contracts. This adjustment with various financial institutions, is aimed at obtaining a reduction in which are expected to be signed in On 17 March the member countries the average monthly cash outflow the coming weeks. of the European Union announced associated to operating expenses of the general closure of the external approximately €43 million. Finally, we would highlight the rating land borders and the prohibition of reports published by Moody’s and entry to citizens of third countries The capacity adjustment, the cost Fitch rating agencies on 31 March except in exceptional cuts and, therefore, the decrease in and 3 April respectively. circumstances. the monthly operating cash outflow will be modulated depending on how • Moody’s confirmed the Long- On 22 March the Government the level of traffic unfolds in the Term Issuer Default Rating “A3” extended restrictions on access by coming weeks and months. for Aena S.M.E., S.A. and foreign travellers to ports and revised the outlook from stable airports for a month. Likewise, Aena has temporarily to negative considering the halted a large part of its investment possible economic Aena S.M.E., S.A. (1) programme, supporting a monthly consequences that the reduction in the average cash coronavirus crisis could have on In terms of passenger traffic of the outflows of approximately €52 the rating in the medium term. Aena network in Spain, traffic in million. • Fitch confirmed both the “A” March closed with 8.1 million rating with a stable outlook and passengers, representing a On 24 March, the Board of Directors the short-term rating “F1”. decrease of 59.3% compared with cancelled the Ordinary General the same month of the previous Shareholders' Meeting, which was year. It is important to note that the scheduled for 31 March. In fall in passenger traffic in March accordance with the provisions of (1) Aena S.M.E., S.A. (“Aena” or “the Company”) 2 WorldReginfo - e37023e6-c36e-4e8d-9610-96ef7431b34e Consolidated interim management report Q1 2020 l Aena S.M.E., S.A. and Subsidiaries At present it is difficult to foresee up to 80%. An additional 75 coordination with airlines and how the crisis will evolve and when employees will be furloughed regulatory authorities. the recovery in traffic will be seen. when the terminal closes. Given the uncertainty, Aena has not Elimination of overtime and • Reviewing external service announced a new outlook for 2020, suspension of recruitments contracts, which are largely either in terms of passengers or in under way. outsourced (maintenance, the estimation of results. security and surveillance, fire • Futher adjustments to other fighting service, cleaning and operating expenses bringing the handling, among others). On the situation of the investees: total reduction in OPEX to 58%. • Asking ANAC, the Brazilian London Luton Airport • CAPEX reduction of £4.5 million regulator, to extend the for the April-June period. deadlines for the submission of In March there was a reduction in projects and the execution of the number of passengers of 56% • The lenders have been asked to grant a waiver regarding the investments required by the compared with the previous month. concession contract. The deterioration occurred mainly in leverage covenant, and this is in the second half of the month. the process of being obtained. • Taking advantage of the liquidity Currently, the number of passengers relief measures established by is below 1,000 a day. Aeroportos do Nordeste do Brasil the authorities as a result of the (ANB) declaration of the state of Public Given the significant drop in activity Calamity, consisting mainly of and in line with what has been done The pandemic reached the country the 4-month deferred payment of in the Spanish network, a a few weeks after it reached Europe. employer contributions contingency plan has been defined On 20 March 2020 the Brazilian (Contribuição Previdenciária in Luton with the aim of ensuring Government decreed a state of Patronal) and indirect federal liquidity and avoiding the ‘Public Calamity’, which entails income taxes corresponding to consequences of a non-compliance social isolation, restrictions on the payments that should have with the financial covenants. The opening stores, restaurants and been made in April and May. actions taken to protect cash have other establishments, as well as the been: closing of borders to non-resident ANB has not considered it foreigners. necessary to resort to external • Drawdown of the £80 million financing for the time being. revolving credit facility. Cash The fall in the number of passengers Given its high level of available at the end of March became apparent from 13 March capitalisation, required by the was £50 million. and gradually increased, reaching a Concession contract, as well as 91% drop in the last few days of the • Suspension of payment of the the expected effects of the month. On average, the reduction in dividend to the shareholders and aforementioned actions, it the second half of the month delay in the payment of interests estimates that it will have reached 59% (32% for the whole on the shareholder loan. sufficient cash to meet its month), gradually increasing to the commitments until the effects of • Delay the payment to the current decline of over 90%. the epidemic on its activity pension fund scheduled for subside. The Company had March (£11.8 million) until With effect from 28 March the three R$116 million (€20.4 million) in December, which has been main Brazilian airlines implemented cash at 31 March 2020 and has accepted by the Trustee. emergency corridors, which reduced no debt. the number of weekly domestic • Closure of most operational flights at the airports managed by Other aspects of the period that areas in the terminal building. ANB to 66. 100% of international should be noted are: From 22 April to 1 May the flights have been cancelled.