Perspectives Annual Report 2012 Perspectives We are an airport operator. We run a major piece of aviation infrastructure – part of an international, interconnected transport network that sustains global mobility and unites people across national boundaries. We are also a responsible corporate citizen who seeks an open, fair and balanced dialogue with stake holders and inter- est groups and for whom the long-term protection of the environment, climate and natural resources is paramount. As such, we pursue a forward-looking business strategy intended to strike a successful balance between business, environmental and social objectives. We provide our dedicated workforce with the training and continuing education they need to be their best; we offer attractive, long-term employment; and we deliver valuable economic and labor-market stimulus with a reach far beyond the bounds of our airport. Our goal: to create value – for our customers, employees, owners and host region. Markets As a hub, Munich Airport plays an important role for German and international aviation. We meet the needs of our varied customers with a comprehen- sive range of services and products. In the avia- tion segment, we handle the air traffic – including passenger services and all air-side and land-side services concerning aircraft handling. With Retail and Hospitality, as well as the Consumer Activities and Real Estate divisions, we also provide a broad portfolio of products and services in the non-avia- tion segment. Both markets make an almost bal- anced contribution to our consolidated revenue. Our corporate policy is systematically aligned toward sustainability. The quality and variety of our ser vices make us one of the most attractive airports in the world. Economy Environment Company and Employees Introduction Company profi le and strategy Service portfolio Communication and social responsibility Perspectives 2012 Motivation Markets Message A balanced contribution by all Economy Our goal is to sharpen our cus- divisions to revenue and value tomer focus and enhance the creation levels out cyclical appeal of the products and fl uctuations and contributes services we offer air travelers to a sustainable development and visitors. of earnings. Reduction of environmental im- pacts resulting from operation of the airport and a conserva- Environment We work to conserve re- tion-minded approach to dealing sources and reduce our with the resources employed environmental impacts out are applicable for the entire of respect for the environ- value-creation chain of our port- ment and future generations. folio of services and products. Company and We believe in supporting and We promote cooperative de- Employees empowering our employees, velopment with the region, creating value for our custom- assume responsibility for our ers, and partnering with our employees, and create added region to promote growth. value for our customers. The focus of the 2012 report will be our markets. 2 Annual Report 2012 Flughafen München GmbH Workforce and work environment Environmental and climate protection Financial review Sustainable development Contents Introduction Company profi le and strategy 4 Executive board 30 Company profi le 5 CEO’s letter 34 Corporate strategy 8 Management team 38 Master plan 10 Key events 40 Expansion of Munich Airport Service portfolio Communication and social Workforce and work responsibility environment 46 Aviation 66 Stakeholder dialogue 80 Human resources strategy 51 Non-Aviation 70 Regional growth 83 Training and HR 56 Quality, security, partnerships development and safety 73 Economic value 86 Diversity 75 Community engagement 87 Work-life balance and health protection 89 Remuneration and codetermination Environmental and climate Financial review Sustainable development protection 94 Climate protection 116 Management report 202 Sustainability program strategy 132 Consolidated fi nancial 209 Sustainability indicators 103 Resource stewardship statements 222 Report profi le 107 Noise control 198 Supervisory board’s report 224 GRI index 111 Biodiversity 199 Independent auditors’ report 233 Glossary 236 Executive bodies of the Company Annual Report 2012 Flughafen München GmbH 3 Introduction Company profi le and strategy Service portfolio Communication and social responsibility p Executive board p CEO‘s letter Executive board Thomas Weyer Dr. Michael Kerkloh Vice President and Chief Financial Offi cer President and Chief Executive Offi cer Chief Infrastructure Offi cer Personnel Industrial Relations Director 4 Annual Report 2012 Flughafen München GmbH Workforce and work environment Environmental and climate protection Financial review Sustainable development CEO’s letter Twenty years after the opening of the new Munich Airport, despite diffi cult economic conditions and much turbulence in the aviation industry, passenger volume at Bavaria’s gateway to the world has climbed to a new record of 38.4 million. This tops last year’s fi gure by around 600,000 passengers or just two percent. With this rate of growth, Munich is clearly above the trend for Germany as a whole. In the period between 1992 and 2012, the number of passengers has more than tripled in Munich. The airlines were able to absorb the increased passenger demand last year on the basis of the long-planned fl eet upgrades through the use of larger aircraft. Despite the record in passenger numbers, aircraft movements in Munich dropped slightly during the past twelve months, and at around 400,000, was just at three percent below the pri- or year’s level. But compared with the year of the inauguration of the airport, this still is more than double. At an average capacity utilization of the aircraft of just 75 percent, a new record was set – in 1992 this value was only around 62 percent. With the fi nancial statements for 2012, Flughafen München GmbH converted its fi nan- cial reporting from the requirements of the German Commercial Code to the Interna- tional Financial Reporting Standards, or IFRS. The purpose of this conversion is to make our fi nancial statements comparable on an international level, and thus to also increase the ability of our Company to access the capital markets. We achieved a new record high in revenue of almost €1.2 billion. This represents an increase of around fi ve per- cent over 2011. Profi t (EAT) rose to around €95 million. As was the case in past years, we succeeded again in 2012 in raising the yield of our Company. This is evident from the increase again this year in the EBITDA margin, which rose by one percentage point to around 44 percent. Annual Report 2012 Flughafen München GmbH 5 Introduction Company profi le and strategy Service portfolio Communication and social responsibility p CEO’s letter Despite the slight drop in the total number of takeoffs and landings, the existing two-run- way system continues to be overburdened. For most of the operating hours of the day, Munich Airport is “booked out.” Especially airlines that wish to operate for the fi rst time in Munich or to offer a new destination need a coherent deployment plan for their air- craft rotations with short ground times and up to eight slots per day. Already today, the development of the aircraft movement volume at Munich Airport is also being retarded by the existing bottleneck situation. Therefore, in the coming years only moderate growth will be possible in takeoffs and landings. If this situation should continue to exist in the medium to long term, there would be a migration of airlines and passengers to other airports. Thus, the Free State of Bavaria would lose important competitive and employment effects. In the meantime, the terminal satellite building has taken on clear contours on the east- ern apron. The next milestone will be the topping-out ceremony, which is planned for September 2013. The new passenger building will increase the handling capacity of Munich Airport by eleven million. Thus the airport and Deutsche Lufthansa, which are carrying out this expansion jointly on the model of their joint venture for Terminal 2, are creating a foundation for further increasing the recognized high level of quality in pas- senger handling and assuring it for the future. In 2012, Flughafen München GmbH became the fi rst German airport to adopt the Ger- man Sustainability Code. In the framework of our corporate strategy characterized by the principle of sustainability, we again in the past year took further measures for avoid- ing emissions and for achieving carbon-neutral growth. The satellite, which in compari- son with the existing buildings is signifi cantly more energy effi cient and lower in emis- sions, is as exemplary for these efforts as the review of existing buildings for energy- saving potentials or the conversion of exterior lighting to electricity-saving, long-life LED technology. 6 Annual Report 2012 Flughafen München GmbH Workforce and work environment Environmental and climate protection Financial review Sustainable development We view with concern the fact that aviation companies domiciled in EU countries must accept an entire series of glaring competitive disadvantages – from strict statutory re- quirements and regulations all the way to taxes and levies. The restriction of emissions trade to fl ights within Europe, in view of its lack of competitive neutrality, will be a special burden for European aviation. And the insistence of the German federal government on the national aviation tax in the meantime is driving millions of passengers to airports abroad close to the borders. Unfortunately, the economic signifi cance of the aviation industry continues to be under- estimated politically and by the public. This industry employs more than 800,000 people and creates an effi cient connection to a worldwide network of routes for our native en- terprises. It is a stimulus for many other industries and plays a key role for our economy. Thus our task as an industry will be to work in social and political dialogue toward mak- ing this eminently important catalyst function clear so that aviation can continue in the future to contribute to prosperity and employment in our country.