9-months traffic results at Frankfurt exceed expectations


Fraport Interim Report – Nine Months 2015: Financial and Traffic Results Exceed Expectations

2015 Full-Year Outlook Revised Upwards – Net Retail Revenue per Passenger Rises – Fraport Group’s International Business Achieves Overall Positive Performance

In the first three quarters of the 2015 business year, Fraport AG’s Group revenue grew markedly, rising by 9.4 percent to €1.96 billion year-on-year (adjusted by IFRIC 12). The Group’s operating result or EBITDA (earnings before interest, tax, depreciation and amortization) recorded double-digit growth of 10.8 percent to €688.5 million, while the Group result also climbed significantly by 19.1 percent to €261.5 million. Operating cash flow advanced to €525 million, a 28.4 percent rise compared to the same period in 2014. Free cash flow posted an even higher gain of 65.1 percent to €389.4 million.

Revenue growth was largely driven by strong passenger demand, as well as positive retail development at Frankfurt Airport (FRA) and the Group’s international business. FRA’s net retail revenue per passenger continued to improve noticeably year-on-year, from €3.27 to €3.49 per passenger. From January to September 2015, Frankfurt Airport welcomed a total of 47.3 million passengers – an increase of 3.6 percent, despite a number of strike and weather-related flight cancellations. FRA exceeded the 200,000 passenger-per-day mark on 58 days in the year to date – even registering a new daily passenger record on August 2, when some 217,500 passengers passed through Germany’s gateway to the world. Frankfurt’s cargo volume (airfreight + airmail, excluding transit cargo) decreased by 2.4 percent to about 1.56 million metric tons, mainly reflecting the overall weak global trade environment and a slowdown in emerging economies.

Commenting on the Group’s positive performance during the first three quarters of 2015, Fraport’s executive board chairman Dr. Stefan Schulte said: “With the trend of the first half continuing in the third quarter, both our traffic and key financial figures have developed positively in the year to date. Consequently, we have revised our outlook upwards for the entire 2015 business year.” Fraport now expects passenger traffic at FRA to grow by around three to four percent year-on-year, compared to the company’s previous growth forecast of two to three percent. Furthermore, Fraport’s executive board now expects Group EBITDA to range from some €840 million to €850 million and Group EBIT to range from about €520 million to €530 million. The Group result is forecast to reach a level of about €275 million to €295 million for the full year.

Overall, Fraport AG’s international portfolio achieved positive performance in the first three quarters of 2015, despite varying traffic results across the Group’s airports outside of Frankfurt. The airports of Ljubljana (LJU) in Slovenia, Lima (LIM) in Peru, Hanover (HAJ) in northern Germany, and Xi’an (XIY) in central China achieved gains in passenger figures in the year to date. In contrast, the airports of Burgas (BOJ) and Varna (VAR) in Bulgaria, Antalya (AYT) in Turkey, and St. Petersburg (LED) in Russia experienced declining passenger volumes.

Overview of Fraport’s Four Business Segments:

Aviation: Revenue in the Aviation business segment rose by five percent to €706.9 million in the first nine months, spurred by passenger growth at Frankfurt Airport as well as increased revenue from airport charges. Segment EBITDA grew only slightly by two percent to €201.7 million, as a result of higher personnel expenses and non-staff costs compared to lower other operational income. Also rising only moderately by 1.8 percent, segment EBIT reached €111.9 million in the first three quarters of 2015.

Retail & Real Estate:
Fraport’s Retail & Real Estate business segment saw revenue advance significantly during the reporting period, up by 6.5 percent to €356.8 million. The growth in revenue can be attributed to higher passenger traffic at FRA and, in particular, to the large number of intercontinental passengers making above-average purchases at FRA’s shops and restaurants. In addition, the devaluation of the euro compared to many international currencies also helped boost passenger spending at Frankfurt Airport. Segment EBITDA expanded by 8.3 percent to €286.1 million, while segment EBIT soared by 10.7 percent to €223.7 million compared to the previous year.

Ground Handling: Driven by higher passenger traffic and a rise in maximum takeoff weights (MTOW), as well as an increase in infrastructure charges, revenue in the Ground Handling business segment grew by 4.4 percent to €517.8 million in the first nine months of 2015. Higher personnel expenses and lower other operating income could not curb the growth in segment EBITDA, which rose by 15.1 percent to €40.5 million. Segment EBIT also improved, albeit at a low level, growing by 34.7 percent to €9.7 million.

External Activities & Services: Revenue in Fraport AG’s External Activities & Services business segment advanced by 31.9 percent to €385.8 million in the reporting period. Adjusted for recognizing earnings-neutral “capacitative” capital expenditure in connection with the application of the IFRIC 12 accounting standards, the segment’s revenue grew by 31.7 percent to €375.6 million. Reasons contributing to the segment’s satisfying performance included strong passenger growth at Lima Airport and higher revenues achieved at the Group’s newly acquired subsidiaries: AMU Holdings Inc. in the U.S. and Aerodrom Ljubljana in Slovenia. The conversion of revenues gained at the Lima Airport subsidiary, from U.S. dollars into the Group’s standard currency (euros), also had a positive effect. Segment EBITDA jumped by 28.9 percent to €160.2 million, while segment EBIT also grew similarly by 28.2 percent to €98.6 million for the nine-month reporting period.

The Fraport Group Interim Report (January 1 to September 30, 2015) is available for viewing and downloading on the Fraport Website under “Investor Relations > Publications > Group Interim Reports”.



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