Fraport AG

Thank you, Niobe, and welcome ladies and gentlemen. Also from my side it's continue to be challenging times.

Times where we all hope for the end of war and peace for Ukraine. But today, we are presenting you our full year figures '21 and the outlook for '22.

With me at the table, I have Stefan Schulte, our CFO -- CEO; and Matthias Zieschang, our CFO. They will guide you through the presentation and answer your questions afterwards.

So I think we can start.

Thanks. Good afternoon, ladies and gentlemen.

Before I go into my presentation and make some comments on the recent year, let me allow to make some introductory [rewards] with regard to the Ukraine and Russia. To be absolutely clear, we condemn the Russia invasion and at this moment, our thoughts are with Ukrainian who are experiencing unspeakable suffering.

And it's overshadowing our [publication] today, I think all of us know people from Ukraine or Russia or even have families or friends living there.. And we also are active or have been active, are active in Russia and have to work with many people together in good relations.

So really difficult times. We also followed our IR communication regarding on investment in Saint Petersburg and you know, that we are -- responsibilities taking to our participation there.

Why are we doing this? As you know, we should [alone] to our investment receivables outstanding and we want to treat this money and don't want to hand it over to the Washington State.

The more was a concession contract excludes any exits, but please be aware that this decision has been easy for us and kept all business relations, so there's no active business relations this day. And we have to see what the sanctions mean for us and -- however we have to assess this decision over the time and what options are with the time on the table.

It’s clear though emotions are not supporting to political leadership in Moscow with no proper employees on site therefore there’s also not [trends] of knowhow as mentioned already and we have to see what all this means and what the impact will be. Now let's talk us now for today on the year 2021.

We'll go a little bit more on detail and later on, also on Ukraine, on this war, what does that mean for our business in general. And later on, Matthias will present the financials.

We’ll go on Slide 3, you will find a brief overview of our achievements in the past year. We use 2021 to significantly prepare our book for the future.

We made clear progress regarding restructuring of our processes and staff. We also match the operational restart of the group.

Last year on March 15th, -- only about 25,000 passengers and today we expect normally four times more, so almost about 100,000 passengers, three to four times more [depends] on today. And our job as operational restart was challenging but we managed to ramp up capacity.

We hire back people for operations and we're also working on further capacities for the summer season we are quite optimistic on. On the financial side, we've also made strong progress and return to group profitable again.

Here the results were also driven by one-offs, but also these one-offs don't come for free and are part of the management responsibility. We also secured an all time high amount of available funds and Matthias will talk about this later.

And we took major steps to turn our emissions CO2 free, a topic which is clearly of high importance for us even if we're always in a quiet. It will take us long-term -- it will take us long to turn the industry in general green, but we have to go this way and we have to be green in long-term to keep the acceptance and yet also our license to operate.

Let's have first a look on the financial performance and last year. Our group financials are shown on Slide 4.

Total group revenues, so excluding 12 recovered by more than 700 million to a level of €2.3 billion. This amount also includes other income from COVID-19 compensation measures and the settlement and security business of in total roughly €380 million.

Adjusted for these effects, the increase in total revenues was still strong at €385 million to more than €1.9 billion. Key drivers for the increase in total revenues were our international holdings.

Adjusted for one off items total revenues also for [import] grew by roughly 210 million or 50%. In particular, Frankfurt showed a dynamic growth and reported some 120 million higher total revenues on an adjusted basis.

With regard to the OpEx you see on the chart the effect of our restructuring program. Despite the passenger recovery in Frankfurt and Abroad, the underlying OpEx was flat compared to previous year.

As a result, our important EBITDA increased strongly by more than €1 billion to €757 million. So the underlying EBITDA was also clearly up by €330 million to roughly €280 million.

Here, the share of our international activities again, grew and reached a level of 68%, a strong result, which again shows the strategic importance of our investments outside of Frankfurt. Bottom line, lower depreciation and an improved financial result, thanks to Antalya led to profit after taxes of more than 90 million.

Looking back at the terrific performance in the past year, I’m on Slide 5. The pictures were known to use or we don't have to go into lengthy discussions here.

I think a few points of us to be mentioned. While handling only 25 million passengers, Frankfurt airport showed a clearly improving traffic trends in the third and fourth quarter of the year.

On an year around basis, Frankfurt Airport only handled 35% as mentioned of 2019 record level, the recovery relates stood at 55% in the fourth quarter, and then we had to deal with Omicron. With regard to our international portfolio here, we in general record a better development compared to Frankfurt, because they are more in the leisure segment.

The better performance was as you are aware linked to the traffic split. We continue to see a strong recovery on touristic traffic and so called visiting friends and relatives when compared to business traffic.

Fraport Greece and and Fraport Antalya in particular, showed strong momentum reaching about 90% of 2019 level in October. Also our airport in Brazil performed well with the highest share of domestic traffic is more favorable when compared to intercontinental like Frankfurt.

One of the latest trends we're seeing, on Slide 6 is the update of the first resource calendar year and near-term play. Following a solid traffic momentum at the start of January Frankfurt Airport suffered end of January and February because of the Omicron variant.

It is important to take a look on the passenger development on a weekly base as it’s done on the slide. While we reported only a recovery of 47% in February, we're seeing traffic momentum in Frankfurt now picking up again since end of February.

Currently -- I also mentioned it before we are handling again close to 100,000 passengers per day, and it’s around 50% of 2019. Also in our international portfolio, we are seeing increased momentum towards the first two weeks of March.

This trend as well as the slot requests from the airlines provide us confidence for the upcoming summer season. While waiting for the start of the Easter season in April, we expect passenger numbers to come back to a stronger level of roughly 65%, at least on peak days around eastern holiday.

On average, April will be of course a little bit lower that year. On Slide 7, you'll see the outlook for the entire summer season.

For Frankfurt we expect the capacities will come back to level of roughly 80% of the pre-COVID days. Due to lower assumed seat load factor we expect that passengers numbers will recover at a slower rate at about 70% to 75% in summer, or on peak days probably around 75% to 85%.

Please keep in mind as we are closely monitoring the development in Russia and Ukraine, which may negatively impact our summer forecast, even it’s a direct impact just on Frankfurt business is only 2%. But the indirect effect could be a little bit bigger.

Regarding our [wood] network we expect a strong capacity recovery of 80% to 90% on European short haul woods and especially Western Europe should come back to almost 90% while Eastern Europe to reach about 80%. On long haul woods we expect the strongest performance on North American.

The capacities are expected to almost fully recover compared to 2019. Latin America should recover to a level of 75%, 80% while the Caribbean will even see higher capacities this summer compared to 2019.

Africa and the Middle East should recover to level of 80% to 85% as well, but most impacted by COVID-19 is still Far East, here capacities will only recover to a level of 60% in -- of 2019 with in China being largely closed, it leads to day's expectations. How do we prepare ourselves for the summer season?

On Slide 8, you see the progress of our staff restructuring in Frankfurt. As you're aware compared to 2019 we reduced our Frankfurt level for some more than 4,000, 4,300 employees exactly.

Here few things are important to note. In ground handling we're starting to hire [Indiscernible] since last summer.

In total, we currently employ of the 80% of our 2019 peak summer level in ground handling. More people than in ground handling are currently with us on security company passing.

Here we employ more than 85% park of summer of 2019 peak summer level. While we continue to hire back people for the operational ramp up we tend to see reduce our [Indiscernible] in administration and seamless installation time since.

Those reductions are higher pay people who either rehiring are lower paid people which also will support of financial recovery going forward. Turning to the page, to the progress of our security structuring in Frankfurt, I'm on Slide 9.

On November 19 we entered in a strategic partnership with SAS Group to transfer 51% stake of our passenger screening facility with Class A. And the first step was just over 26% of the shares and it will take over another 25% in next year.

As you are aware, we will take over the responsibility to manage the passenger screening process in Frankfurt as of next year. The takeover of the management responsibility is very important for us as the process where we're far not optimal before COVID.

As a result, we needed to reduce our direct involvement in the security handling business, so we found a good partner with [Indiscernible] that we don't have to control with any longer as a stake. And we can focus on the management of the processes in total on investment in new technology, securities technology and opening up of control lines and having a better performance for the customer.

And sort of waiting times that's the most important thing on that side and that's the reason we are going forward with this. Talking about security checks and process optimization in Frankfurt, we have meanwhile also decided to relocate the passenger screening lines in terminal one [Concourse B].

I'm on Slide 10. Here we put the security more towards the entrance of the terminal but this will create an asset connection between terminal one [Concourse A, Changan and Concourse B Changan].

This link will bring up all passenger experience in Frankfurt and simplify transfer processes for passengers. Those two areas form the heart of the airport operation as we handle more than 60% of our passengers traffic here.

Simultaneously the relocation will also allow us to create a new measure to return marketplace in Frankfurt. Around 5,000 square meters of land side retail area will be turned into more attractive asset area thanks to the relocation.

We will keep you informed about this new and innovative retail marketplace in our upcoming presentations. The relocation of the security lines -- lanes will take place in two phases.

The first phase will be completed in 2025. The second one, then in 2027.

In total, we discussed the implementation of 14 new technology security lines with a much higher throughput that will replace 24 security lines with the current technology. But the end with better and quicker processes and that's really important.

For the investment volume, we expect roughly €200 million in total, which will be part of our other maintenance CapEx and the guidance is also roughly €250 million per annum is included in this number already. In addition to the new security lanes, we also expect another milestone for the group in 2027.

The first full year operation of our wind park project hedge, how whatever you call it, edit in the North Sea, I'm on Slide 11. Last December together with our German partner ENBW we signed a commercial power purchase agreement to buy in new renewable energy, the wind [pad] will mark the major step ahead on our roadmap to become CO2 free.

Compared to our 2019 Scope 1 and 2 emissions, the wind pad will turn roughly 50% of CO2 emissions into zero emissions. In addition the wind pad project will further accelerated our CO2 transitioning in the past year.

Here we also agreed in principle on the construction of a new major photo take plan next to our take of one Western Frankfurt as we did with further plans on buildings. We also agree to further electrify our car fleet and work closely together with the German railway to have an even better tons.

As you are aware, we also intend to go for a dedicated discussion with you on our CO2 targets. Here, we also want to discuss our group-wide target in more detail.

For those targets, we also became more ambitious and want to be CO2 free 5 years earlier, so in 2045, other than in 2050. Moving on to an update in [demand].

As you are aware, we have discussions in the group about our new terminal [concepts]. Because of the pandemic we decided in favor of a temporary modular dual terminal concept rather than the construction of one big single midfield terminal.

We decided this way because the dual terminal concept is cheaper to construct, it's more modular and it favors our airline and passenger customers to bear our charges. Those savings will help to bring the local aviations reup the game while simultaneously meeting the technical requirements we entered in.

Currently, we are in discussions here with the local minister regarding this new terminal concept. And just as an update, we just got today positive answer from all the the regulatory body in Peru, and we have to follow and to see the next steps now in Peru, whether it's going through at the end finally.

So we expect the feedback on all different levels, hopefully, over the next weeks, and we'll keep you updated. The near future term -- the near-term future our outlook for this year shown on Slide 13.

Based on the continued low visibility and geopolitical tensions, we expect Frankfurt passengers to recover to a level of 55% to 65% of 2019 [value]. 55% to 65%, I would say, from today's point of view that we are more on the upper range.

But it depends a little bit on what's happening with Russia. And whether this conflict is influencing, for example, US Americans traveling to Europe more or less or whether it's influencing over the German economic with much higher prices for energy, much higher inflation or even, I mean, some worries about the future development.

From today's point-of-view I would say we are more in to 65% and the 55%. For revenue, this will mean that we expect to reach roughly about €3 billion including [Indiscernible] amount of about €400 million.

For the group EBITDA, we expect to a range between €760 million to €880 million and for the EBIT and 320 million to 440 million. For the group results, we also expect a broad range as a result we’ll range between €50 million to €150 million.

What is the background for such a big spread on the net result, the answer the question, what are the effects of the Russian war, and how many Russians and Ukrainians, but especially Russians, are flying to tourist destinations on our airport, especially on Antalya and somewhere out to Bulgaria and Greece. On today's point of view, we cannot exclude that we see a very, very small number of Russians flying to our entire year this year, and that's the background for this part, outlook on this net result.

This very rough order range, yes, I mentioned Norway is linked to the traffic uncertainties, especially on the international type, but some, of course, also Frankfurt. And despite this positive group results, expectation will continue not to propose a dividend for this year because of our high level.

Nevertheless, our midterm targets are presented on Slide 14 and here despite the current uncertainties our midterm targets remain unchanged. While we expect our international airports to be traffic wise recovered next year we continue to expect Frankfurt to be traffic wise recovered in 2025 or 2026.

Thanks to our cost saving measures, we also remain confident to be financially recovered already in 2023 or '24. So thanks very much so far.

Matthias, more on financials.

Thank you, Stefan and also a warm welcome from my side. Let me start my presentation as usual with an overview on our cash flow and indebtedness situation.

On Slide 16, you see our cash flow development in the past fiscal year. Despite the continued strong impacts of the pandemic on our passenger number, our group operating cash flow improved significantly to a level of just under €400 million.

Here the positive impact from the governmental compensation which we received in the third quarter and the cash inflow from the security settlements more or less offset the cash outflows for our staff restructuring program in Frankfurt. As a result, the €400 million operating cash flow can be seen as an underlying cash flow figure in the past year.

When assessing this figure, we are very pleased that the operating cash flow was strong enough to cover all maintenance needs which we faced on a group-wide basis. Excluding for the expansion CapEx at Lima Airport and Frankfurt Terminal 3, we were therefore able to generate a positive free cash flow of about €28 million.

This figure was supported by some €27 million, which we received as dividends from our equity consolidated investments mainly from Antalya. Taking the CapEx in Lima and Frankfurt Terminals 3 into consideration led to a negative free cash flow of about €770 million in the past year.

Our group net debt rose correspondingly to a level of more than €6.3 billion and our gearing ratio reached a level of roughly 170%. Our net debt to EBITDA key leverage figure stood at 8.4 times, a significant improvement compared to the fiscal year 2020 and the clear improvement compared to our initial forecast at the beginning of the last year.

Moving on to my next slide, a closer look at our group cash flow development in the second half on a standalone basis. As Stefan already mentioned, the first half of 2021 was still clearly impacted by the pandemic.

During the second half of '21, our operating cash flow recovered strongly to a level of €588 million or €428 million when adjusted for the €160 million government compensation, which we received in summer. Both figures represented a sharp increase year-over-year but more important, the operating cash flow was even strong enough to reach the pre pandemic level on a reported basis or to reach about 73% on an adjusted basis, so excluding for the governmental compensation.

With regard to CapEx, it is also good to see that Fraport Brazil and Fraport Greece are now both running on maintenance. At accumulated €9 million CapEx volume, Fraport Greece and Brazil contributed strongly to our second half free cash flow.

On the slides, we also presented to you the free cash flow without expansion measures in Frankfurt in Lima, and here we reached positive level of roughly €440 million or about €280 million when adjusted for the governmental compensation. Please keeps you in mind that we still discuss the second half of 2021.

The Frankfurt Airport only handled about 50% of the 2019 passenger volumes. Including for the expansion projects in Frankfurt and Lima, our second half free cash flow was mildly negative at 17 million, including for the governmental compensation.

How did the cash flow development impact our available funds? On Slide 18, you see our most up to date group cash situation.

Past the issue of our 1.15 billion corporate bonds in Q1 last year, our group cash situation remained largely stable over the course of 2021. The high-level of available funds was positively impacted by continued finance and refinance activities, but also by the clearly improved free cash flow in the second half, which I just explained.

For this year, we expect some €500 million maturities to adversely impact our liquidity situation. Here about half of the repayments we’ve already secured among others by a new loan this morning as you can see in the green box on the chart.

Also, the contractual framework for new debt remains attractive for us as we only pay a rate of 4.7%. Therefore, our liquidity situation and refinance need this year will again be driven by our free cash flow expectation.

The detailed forecast for our free cash flow can be found on my next slide. On this Slide, I'd like to start with our CapEx outlook.

Comparable to the previous year, we brought this volume down as roughly €550 million for Terminal 3 and roughly €250 million for maintenance CapEx. For Lima Airport, we expect the CapEx range between 250 million and 350 million, the final amount here will largely depend on the cash outflows for the new terminal project and the currency conversion rate.

For the remaining portfolio, we expect the CapEx to remain below €100 million. Therefore, we also expect a positive free cash flow for the airports outside of Frankfurt and Lima.

On a group wide basis, we expect the free cash flow to remain clearly negative this year, as you can see on the right hand side of the chart in the yellow bubble. We estimate a negative free cash flow in the area of roughly €900 million to €1.1 billion.

This amount also reflects the initial equity injections into the new Antalya Airport Company of more than €300 million. As a result, we expect our group net debt to grow to a level of roughly €7.3 billion to €7.5 billion.

Let me now move on to our segment performances in the past year starting with aviation. Revenues in the Aviation segment continued to be positively impacted by the security settlement in the first quarter in the amount of €58 million.

Adjusted for this item, revenues stood at 530 million, some 20% above the previous year's level. Compared to 2019, revenues reached more than 50% of the pre-COVID level with 35% passengers.

On the EBITDA level, we reflected the additional €160 million governmental compensation, which we already discussed before. As a result, segment EBITDA reached a value of €160 million, which is an equivalent to roughly 60% of the pre-COVID level.

Adjusted for the security settlement and the governmental compensation, the underlying EBITDA remained negative at minus €68 million. Compared to the adjusted level of 2020, this nonetheless represented a strong increase of €127 million despite ending only some €6 million additional [values].

The underlying EBITDA improvement was mainly due to some €73 million higher aviation charges and some €42 million lower underlying OpEx. Please kindly note here that we remain conservative regarding our balance sheet in the fourth quarter, and therefore, face some extra cost in the area of [14 million].

Adjusted for this extra item other cost remained broadly stable in the fourth quarter. Looking ahead this year the 2022 we expect EBITDA to mean broadly flat compared to the reported level of fiscal year 2021.

Please note here that this will represent a sharp increase compared to the underlying level of '21 where we have recorded more than 200 million one off items in aviation. Moving now on to our retail and real estate segment on Chart 20.

Looking at the individual revenue streams of the segment. We are pleased that our real estate subdivision is back on the pre-crisis level.

In contrast, retail revenues were still impacted by the lower number of presenters. At €72 million, retail revenues were also adversely impacted by €10 million COVID-19 easing measure in connection with our duty free partnership here in Frankfort.

Adjusted for this special item, retail revenues were up compared to the previous year. Despite these slight underlying revenue increase, our retail key performance indicator was slightly down compared to the previous year and stood at €3.70.

The key reason for the reduction in our KPIs was low advertising revenue. Here the first quarter of 2020 was still not impacted by COVID-19 and performed therefore clearly better.

Parking revenues on the other side were up compared to the previous year and achieved more than 50% of the 2019 value. At €251 million the segment EBITDA recorded more than 60% of the pre-COVID level, mainly thanks to the strong real estate performance.

For the current year 2022, we expect a continued increase of all revenue streams and our most profitable Frankfurt segment. Turning the page to our ground handling segment on Slide 22.

At 386 million ground handling revenue was up by 20% compared to the previous year and reached about 55% of the 2019 value. The key drivers for the revenue performance were the passenger recovery and charges that are not directly linked to passenger volumes like maximum takeoff weight and movement related charges.

Adjusted for an €8 million of [crew] Q4 accounting effect the OpEx and ground handling was unchanged to the previous year. Please keep here in mind that we handled some 6 million additional passengers so a flat OpEx development is a very solid result.

Still ground handling EBITDA was negative at about 70 million. Here, so second half again showed a clear improvement compared to the first half.

The second half performance also encourages us to forecast the breakeven EBITDA for the ground handling segments in the current fiscal year 2022. This is a significant increase despite we are far away of course from pre-COVID passenger levels.

On Slide 23, you will find the overview of our Frankfurt OpEx development in the past year. When compared to our OpEx in 2019 we clearly see the restructuring gains.

In total, we achieved cost savings of more than €400 million compared to our pre-COVID levels. Here we also included the extra costs which we face in the fourth quarter in the amount of up to €30 million.

Adjusted for these non-recurring cost items, we achieved an OpEx reduction of some 430 million or 27%. In the fourth quarter standalone we recorded an OpEx reduction of 64 million on a reported basis or 90 million on an adjusted basis [always] compared to Q4 2019.

The sequential lower cost saving compared to the third quarter was largely driven by higher cost for electricity, energy and the lower application of short term work. Due to the takeover of the new security contract in [Hamburg] this year, we now expect a slight dilution of our OpEx performance.

On an underlying basis, so excluding for the new security business, we however continue to expect more than €300 million cost savings this year compared to 2019. Moving on to my final slide for today, international activities on Slide 24.

In international activities, we continue to see that revenues excluding for IFRIC 12 are clearly infected by COVID-19. Compared to 2019 segment revenues dropped by roughly 40% from more than 400 million.

With regard to the fourth quarter, however see a clear upward trend. That 176 million revenues without IFRIC 12 reached almost 80% of the 2019.

On the EBITDA level, the fourth quarter result was even higher compared to 2019, thanks to some €46 million COVID-19 compensation. Adjusted for these compensations, EBITDA came to €61 million in the fourth quarter, just €80 million below the pre-COVID level.

On a full year basis, segment EBITDA reached a level of €418 million supported by some €160 million compensation. Adjusted for these compensations, segment EBITDA stood at €257 million, some €192 million down compared to 2019.

Please keep in mind that revenues were down by more than €400 million, so we are able to offset another €215 million due to OpEx reductions. For this year, we expect EBITDA to roughly reach the reported level of 2021 always strong tailwind even in this quarter.

This again will mark sharp recovery compared to the underlying value of 2021, so excluding for the COVID-19 compensation. Having said this, ladies and gentlemen, I'd like to conclude my presentation and we are looking forward to your questions now.

I’ll just have two actually, I’m sure more will come after, but just on your guidance for CapEx going forward. So you gave us '22, could you give us an update on CapEx expectations for after '23 in particular for Terminal 3, and when do we expect you opening again?

Actually, I have three question. Second, when you open Terminal 3, like we've seen at the moment pressure on airlines from -- I mean sensitivity on airlines from rising tariff.

So how do you actually expect to hear Terminal 3 when you have already a little bit of difficulty of passing tariff increases -- some of your airlines clients? And my last question is on dividends.

When should we expect a return to dividend?

So first question CapEx guidance for '23 as well as '24. So it's more or less the same level.

So 1.1 billion, maximum 1.2 billion. Why?

Because now we are in the middle of the CapEx for Q3 and also regarding Lima. So this is dominating the CapEx while the maintenance CapEx for all other assets is extremely low.

So you can see it's a continuation of the -- in the presentation mentioned also CapEx structure for '22, this is representatives for '23 as well as for '24. And then it's going down because the end of '22, the runway is ready at Lima, so it's a little bit reduction.

And also in 2024, T3 goes to its [range]. Opening this summer, it's planned, summer scheduled 26, so we have -- the terminal itself, this is already 12 months before already, but then we are testing et cetera, and we are going to open in summer '26.

And your question regarding dividends. Our guidance is we have to come back to our -- let me say the key ratio net debt to EBITDA of about 5, so below from '21.

We reached 8.4 and now we are renting down close to 5. And when we are reaching or we are adjacent to 5, then I think there's room for dividend payments again.

So can you just give us an idea of when you think you'll reach that 5 times? And also on sensitivity to airlines with regard to tariff increase, how should we think about that going forward?

We always have pressure from Airlines on fees that’s normal. There's nothing specific.

Nevertheless, we've been able to get fee increases -- last year and it's looking out across promising this year sort of starting then from 2023 onwards. And those strategy will depend a little bit how we go ahead for the next year and what the demand and terminals fees, how we also decide to use the other terminal operations and how the market at that time is.

So I don't see a special challenge over there, that's a normal challenge we always have. On dividends, it was already mentioned by Matthias.

What for us is the trigger point is to come closer to net debt to EBITDA of 5 was if we weigh up to that point or whether we can start with some dividend payments even earlier maybe on a lower level, we actually see, that's not discussed up to now with the supervisory board and depends very much on the total market outlook. So if we -- if the pandemic is really behind us, if we're reaching to -- very promising to reach the pre-COVID passenger numbers and future outlook is promising, then probably we’ll start earlier with the dividend payment.

[Whenever] exactly I can't tell you but it will take for sure some further years, so will not be two more or not 2023 thereafter there's no decision these days.

So the first one just come back on terminal three in Frankfurt. Can you just confirm what is the total expected CapEx for this project?

I believe the last communication was around 4 billion, but can you please confirm it? And can you just confirm if there are any construction contracts that are not yet awarded, or it's all fully awarded and subcontracted?

Question number two, if I may, on cost savings. I mean, previously you talked about the target of 450 million or even 500 million of cost savings.

Do you still reiterate those numbers considering we are seeing inflationary pressures in the industry? So those are the questions.

On terminal three, the a main project on Terminal 3 expansion has a total CapEx 4 billion that's unchanged. And all contracts now, but most of the contracts are awarded, I think around 80% something like this.

But all main contracts are awarded, that there are some smaller contracts could be. But we're not affected by high inflation or something like this or by sharp increase of steel price, because all those things have been done already.

There are some smaller contracts, of course, outstanding. If you take all the money, tours and so on, to be quite honest, I'm not aware.

But I would assume they are now awarded. But the commodity is -- some price increases on that side would affect us, but it's not really change the picture on terminal three.

Cost savings, first of all, I think you made it very transparent on the slide in the presentation showing officially 406 million. I also explained verbally that we did something on the balance sheet, which then was reflected in OpEx.

So let me say adjusted we made 430 million, 440 million OpEx reduction. We already said that our target was about 4,000 full time equivalents.

This is then or will be equivalent 240 million cost reduction. This we will show also on the next year.

And on the material expense side of costs the realized 150 million will be lower next year because we are ramping up with the volumes, we are ramping up with the prices on the energy sector. But at the end of the day, I would say it can be 100 million savings always compared to 2019.

And this is linked to my expectation our guidance that we see the cost reduction in 2022 of clearly more than 300 million always compared to 2019. Of course all along inflation will run against us but this we already said in the beginning of the crisis.

So we are continuing working on the labor side in the admin and senior admin sector we are doing whatever we can. And we are convinced that we can still achieve further things on the cost front.

Let me just add one comment, just to be clear on that side. The program Matthias mentioned [we learn] 50 that’s the program on structural cost savings.

We are nevertheless part of this world. So I would also expect that we will see also due to the Russian conflict now but not just because of this, higher inflation over the next few years and probably on a level, which we never have as huge.

It's of course, our jobs then that we do the structural cost savings as we did it and to continue on that side. And in addition, yes, we have to place ourselves in the market.

So if the -- on the low -- on the unit level employees, salaries are coming more up on that side, for example, ground tending, probably your reality over the next few years. Then we have to work on the revenue side to pass it over.

But we cannot exclude ourselves from those market developments. It's a little bit more difficult on the energy side, that also one of the reasons why we have to be more CO2 [freezer] earlier.

So to go into more wind alternatives and to deal we get there is really not linked to inflation, and that's a very positive thing on that side. So we get more independent from electricity costs on traditional electricity and so on.

We're not getting of course independent from material cost increases and so on. But it then has to be reflected on the revenues side, the price increases, there's no other way.

Can I ask, what's going on with the security strike that seems to be happening tomorrow, how much disruption do you expect from it? And how does that fit with the transition of the security operation?

And then I saw, on the slide, you're saying that you think that the last Ryanair flows are successfully back sailed by Eurowings Discover. But I mean, what are the prospects for building out the cost or point to point services into Frankfurt as we look ahead to T3 from where we sit today?

When I start with the securities, why today, it's not to know us today again Frankfurt. You have to differentiate because it's on the paragraph eight mainly, but there are some [personal] paragraph, but it's mainly paragraph eight.

It's not linked with us. It's a [federal] issue and that means -- you know if we are allowed to go and strike in Germany, if the union is asking for this, if you are in a tariff conflict and so on, and it's not at all linked to the transition.

This could also happen in the future. We are absolutely not a fan of such a strike and I don't respect at all.

No acceptance for this to go on, we call it advanced strikes or warnings strike for full day blocking completely or -- flights. So now that passenger is not -- originating passenger, departing passenger is not able to get an aircraft to date more or less.

For [20] passengers, yes, it's working. And for a [Indiscernible] passengers of course they are also handled, that goes on so no and so forth.

So if you take the normal day like today was launched it's weaker day it's not a peak day, it was around 80,000 passengers, 50% winter passengers, remaining 40,000. And the other passengers are the other 20,000 to 40,000.

So the direct effects is just 20,000 passengers. That's not a big effect and maybe some of them will supply them tomorrow, day later or whatever.

Nevertheless, it's really angry, because the negotiations between the partners so the union and the employee representatives, it's nothing directly linked with Fraport and they are quite near together, it's not a big distance that will meet us in tomorrow the next time, if I'm correctly informed. So it's more public sign.

In my opinion while they're doing this public signal and that's really angry. But nothing to do with the transition, it will not be changed next year or the year after, it's a principle of what we have in Germany, like in other countries, of course.

Regarding Ryanair, best times, Ryanair, the market share of around 3% of the volume. And what we mentioned with this comment is that the demand this year is so high and the airlines are put in such a lot of capacity into the market, this probably at the moment is compensated.

That’s accommodated by tourists fly, by condo, by Eurowings and so on. So if you see that even Lufthansa is flying with 747 Jumbo to Majorca, then you know how the demand seems to be for the summer and hopefully it will stay this way.

So on that side, it's compensated. In the long outrun, long outrun the business model of low cost sales will still exist, it's no question and they have that segment and we have to see how we deal with this.

But one thing is all it's up to you. With all the initiatives for CO2 neutrality or CO2 free of emissions flying to fly will be much more expensive.

And the advantage of low cost would stay, but it will be relatively more narrow on that side because if you know what the 55 will cost on a short-term flight of [150] [Indiscernible]. So on around $100 and on the long [off flight] around €100, €150 and that excluded the actual high fuel prices.

So if you take the high fuel prices would be even double the amount. The one is near-term the other one is long-term.

So it's important to be in that segment, that's clear. But at the end, it's important to have the best connectivity and to have a broad number of airlines where we are going back to the buffet and some are single on 100 airlines something like 95 airlines like this, something like this and that's a good way of saying.

Several questions, please. First a follow-up just for clarification, so given your agreement with labor unions, could you please provide guidance on the personnel costs in [transport] in 2022?

Second, to better understand the cost saving dynamics. How many people have been rehired since summer 2022?

Third, with Q3 results, you guided the full year EBITDA of 650 million to slightly above 700 million. But you reported 757 million, although the one offs have the negative impact on your performance in Q4 and there was some impact from Omicron in December.

So why did you end up with such a significant better performance in Q4 than you anticipated in November? And finally, an ESG related question.

The executive board was expanded from four to five members in 2020. And given the announcement yesterday, it looks as if this will be permanent and not just to deal with retirement this year.

Could you please explain a bit why the additional capacities are needed now in light of 20% to 30% less employees in Frankfurt, and traffic expected to recover to 2019 level only in 2025, '26. And the executive board is very much focused on Frankfurt, and though with the CEO, and CFO, and monitoring among others, external activities, which now generat the significant share of operating results.

So shall we expect some restructurings in the responsibilities of the executive board going forward?

Let's start with the first one, labor union agreements. There's no negotiation at the moment going forward.

For this year, all the agreements are in place and you should calculate roughly number on 2.5% to 3% ssomething like this, depends a little bit on detail. But there's the amount for this year 2022.

Cost savings, almost 2s.

Cost savings, I would recommend to look on Slide number 8, we showed the exact numbers regarding our staff restructuring. Regarding the three elements, ground handling, traffic, as well as other Frankfurt positions.

I think there was the question. The question was, if I'm correctly informed, maybe it was [Multiple Speakers] how many people who will be hired.

And we hired 400 people and contending on a gross number.

And net, it was 100, you can see it on the chart from 7,160 to 7,260.

But up to now to the end of March, I would say we own a net number of around 250 to 300 on a net, but by the end of March this year, and the gross number will be around 500, 600, something like this. So you have to be a little bit careful with costs and net numbers because there are still people leaving and frustration.

On the executive board, that's really simple. The supervisory board wasn't pleasant and that's probably correct.

So the company was like Fraport was group wide roughly 18,000 to 20,000 employees, should have a very experienced board member on staff issues on handling those issues, but also be experienced in change management processes and so on. And it was a lag on the actual board members on the experience, because [Indiscernible] leave and I know Matthias, he's on level and he has broad expectation but not on staff.

So staff handling issues and so on and so on. There’s some -- although I don't know and then for me.

There was the reason that we went into rehiring on that level, I think it was misconduct. We have an excellent capacity on that side because he has been involved in a lot of restructurings and then change processes.

And at the end really also on board level. That's no discussion and there's no discussion although that's not prediction for how we go ahead in three, four years from now.

I see your point. But at the end, it's a supervisory board decision.

But it could be that in the long run, we go back to four executives, we have to see.

Your question regarding Q4, it's relatively simple to answer. So we -- before Q4 we expected or we had the fear that the, was it the fourth or third corona wave would come and would have an stronger impact.

Then at the end of the day, what was reality? That's the reason why we have been let me say too conservative regarding Q4, and now we are happy that Omicron had such an strong integrity expected before.

And on the international business responsibilities versus supervisory on the executive board, yes, you gave a clear description. That's right.

It's my oversaw. I'm directly responsible for this very good support by Matthias because he's very much in detail or into the numbers.

And we have both international department. And to make an answer very simply if I look at the performance of this international -- and participations over the recent 10 years, probably it was correct as we organized this way.

I have three questions please. First one from Antalya is lightning being [Indiscernible] equity injection of just 300 million whereas as were and before you have tried this for 500 million equity injection, that does mean Antalya will pay 200 millions of dividends to Fraport in 2022, so that's question number one.

Question number two is I noticed that in the press release this morning, you mentioned Fraport will hire 1,000 operational employees in 2022. I wanted to clarify if that pertains to Frankfurt only, or if that pertains to your other entities as well?

And if it's to Frankfort, I wanted to understand how that relates to the 250 million additional cost savings, if this requires more action on your side to get there or if that number is under control? And lastly, I wanted to ask you about the Hamburg security contract.

I wanted to understand if that contract is EBITDA accretive and how long this contract last?

Antalya was the 1,000 employees. The 1,000 employees is gross number, it’s not a net number, a gross number started already on October last year up to probably October this year, or summer this year.

So it's mainly ground handling and we already exchanged the numbers where we are up to end of March of this year. So there will come another 500 or 600 on a gross level which will mean that the gross number of 1,000 will at the end be probably a net number of 500, 600.

And that's working -- just on Ground Handling now. And that's working because if you are going in some of our 100% on peak days of movements, it was probably on peak 80% of passengers, 75, 80, something like this.

And you will see on the slide that we are just on 75% of staff levels before crisis that you cannot handle the 75%, 100% of movements, that we have to go into rehiring, but we do just on a cheap base there. So no one on Fraport AG level, it's just easy qualifications on ground level.

And it's not affecting the cost savings program because on RELON 50, there are further people to leave over the year and also over next year due to early retirement programs and so on contracts we signed already. But also some fluctuation where we are not doing any replacements.

So those just working together [Indiscernible] little bit and much and just a little bit. Now the difficulty we have on the direct jobs on the ground, we have to come back, maybe not to a level of 100% because of some productivity but close to that one.

But was cheaper contracts as in the past because we took some more expensive people on. We are focusing very much on the other side to see administrative side, so the overheads in a broader sense.

And there we’re very keen to stay on that level what we achieved to have sustainable cost savings on that side. On Hamburg, as I mentioned, Hamburg that's normally -- what is three or five years, something like this, three years at least four years, probably four years.

And of course it's EBITDA and also net profit contributing of course otherwise we wouldn't do this.

And then you raised the question regarding the equity injection in Antalya, as well as the dividends which we are going to receive. So coming back, what is going on, we won, we awarded, the concession and we have to make an upfront payment together with our partner TAV of 1.8 billion.

And most of this amount will be refinanced by a project financing. So the rest will be paid as equity divided -- it will be cost, it's a joint venture.

And as of today, we have to see what will be the final outcome of the project financing. So I would say it's more than 300 million equity, which we have to inject on one side.

On the other side, we will receive dividends but the dividends are now depending from the let me say the Russian impact now on Antalya what will happen on the passenger side. So it's a little bit an equation which we have to solve at the end of the year.

So it's 300 plus for the equity minus some dividends which we are going to receive.

I have two. The first one would be on fees.

You mentioned that it's looking good for another fee increase next year. Is that based on your discussions that you have with Lufthansa and the airlines?

And also shouldn't that fee increase then be larger than the 4% that we had this year just because of other cost inflation that we are currently seeing? And the second question, just can you update us on the Saint Petersburg situation, especially on the shareholder loan.

I think that it’s still outstanding and how confident are you to retrieve that shareholder loan?

Thank you for those questions. I also answer you an outstanding that we are not giving any details, so we are speaking at what time because it's much too early.

I wanted to give you a signal that I'm quite confident taking the actual circumstances, market conditions and so on that we will see a further fee increase and that we clearly have to go for that one. And I will not comment at this point in time on which level we are going, but I wouldn't have said it if calculate 0.5%.

So that's also clear. Second on Saint Petersburg, yes, there is a shareholder loan, which is given.

We are Malta and to north -- Northern Capital, that's the name Saint Petersburg over there. It's a long-term loan, which would be repaid and Honor via the performance of St.

Petersburg airport. Are we optimistic -- I'm always optimistic but I'm also realistic, it's too early to answer this one.

But in principle, yes, I assume that we will get our money back, otherwise you would have seen a depreciation or whatever. So we are in principle optimistic and we have to fight for this.

Anything else it's too early to say these days. We have to see what the situation is in two months or three months.

But it's really clear, it’s our job to get the money and to safeguard the money and our values and we will work for that, absolutely clear.

Just a quick one from me on cost. Just looking back at what you did and delivered in Q4 in the aviation business.

Looking at the guidance, I really struggled to get to basically EBITDA in line with another €160 million for '22. How should we think about the cost?

The cost in Q4 were around 200 million. You stated that there were 14 million of exceptionals.

I mean, should we take the leftover around 185 and kind of normalize this for other year? Is that what you're trying to say that and that would take into account bit of wage inflation, lower number of average stuff, is that how we should frame this -- the 2022 EBITDA for aviation?

First of all, please do not look just on Q4, why because as you mentioned, we have some extraordinary items to let you say to make our balance sheet even stronger. Second, we have always in Q4, for example, Christmas bonus payments to the employee.

So Q4 is always higher than all the other three quarters to get an impression, what is the sustainable level for the next year? Look more or less on the average in the first three quarters.

This is a predictor not Q4, because Q4’s always spoiled by extra ordinary items in both directions. And this year was just a negative impacted by items.

And again, I said clearly during my presentation and this year, we have officially 406 million reductions, and it will be less because we have inflation. We have some rehirings of people.

But on the other side, let me say the expensive guys left the company so that we clearly will show also next year, next year means 2022, more than 300 million savings always compared to 2019.

I would recommend this is such a detailed question that you have a close look together with flow and folks here, and have a call to go through the numbers in detail, because probably that's not so wise right now.

And just on the -- I mean that's on CapEx. I mean first on Lima, you've talked about some negotiations ongoing to flex utilize a little bit the CapEx.

I mean what are we talking about? Is there is big savings to be expected from that out of the terminal budget?

That's the first one. And then on T3, you said you've got 2 billion to go on CapEx from 2022 onwards.

You stated that only 20% of the project 4 billion was up for tender. I mean, we've seen bit of overshooting in '21 on the spending, isn't there -- I mean, I'm just trying to understand whether or not there's not more risk in the tail end of that of that CapEx from let's say ‘20, ‘25, ‘26, ‘27?

Probably the difference and Matthias can comment more on this on that one is between I mentioned that 80% of water contracts, but that's not saying that’s already performed, especially not say that is already paid. That's of course the big difference on that one.

On Lima at the end, if it takes a full number of passengers, it's not a different, because you constructed in models, model one, model two, model three, all of these constructed as one big single termimal. And then it’s more on the cash flow side of the time and at what time you will construct model two and model three.

So it will save money at the moment but not in the long run. And as you see that we haev to in all cases to fulfill the session, the requirements and so on.

The difference would not be and will not be on the CapEx for 2022, because in '22 and even '23, mainly model one, which will be constructed in all instances, whatever we agree it's more than the year 2024 and '25.

And regarding terminal three, we have spend about already 50% of the CapEx. And what Stefan Schulte said is we have award, it’s a contract of up to 80%.

And now we are going to construct the rest but we spend about 50%, but we have hedged so to say prices of 80% of the whole CapEx volume and the annual spending for terminal three is exactly what we did in last year and what we are going to do in this year is between 500 million and 600 million, and it’s cannot be more than 600 million, because then everybody's working and on the size you cannot -- on the size of such area, you cannot spend more than 600 million -- going forward until -- not until the opening, until one year before the opening.

And last one if I may just on Antalya, actually on Antalya and Bulgaria. I mean, isn't your base case is just you noted it in from these assets at least in '22?

In '22, of course as the variance of the amount of dividends which we are going to receive. This now is exactly linked to the Russian impact or no impact from the Russians what we will see in summer.

That's also the reason why we have such a broad range regarding net income because Antalya plays let me say in the financial results at equity ended. And let me say the $50 million net income would be the outcome if you wouldn't welcome no Russians at Antalya airport and on the other side, if the Russians will come as before the crisis planned, we are at the upper range and let me say reality will play in between these two numbers.

And again, let me say on the low side we anticipated so to say more or less -- relatively worst case scenario regarding the Russians coming or not to coming to our airports.

Maybe to start with -- for the sake of clarity. Does your guidance include any COVID-19 compensation measures?

You have seen quite some last year, or there any other one off? And also, can you confirm that there are no one off effects on the horizon?

Because last year, it was a bit confusing sometimes. Second question relates to T3 or to be more precise, the [POG] at the low cost part of research [LT] terminal.

And as I'm informed the terminal, this terminal part is more or less ready. So do you face any operating costs for having this terminal available already?

And lastly, more of a long-term question to touch this point already. There has been lately to lose declaration by 35 European countries pushing the aviation industry towards net zero CO2 by 2050.

So I would actually like to know what is your expectation on how this is going to shape or reshape the industry, and what are the impact on Fraport? Will this be also linked to an entirely different airport sector?

And does this link also to maybe new CapEx programs necessary to prepare for that?

I will start with the final question, thanks a lot for those questions. We are aware of, of course, obviously, to lose resolution, signed also a lot of airports and a lot of airlines.

And I mentioned already that we as an airport and not just as an airport but also as an airport group, group wide the CO2 neutral or CO2 free even by the year 2045. And were we working on that and we're making good progress on that.

If we take the industry in general, so including airlines it's much more difficult regarding synthetic fuel. It's first really important that we get to 55 initiative as a law if you want as a [relative], because the every and any airline is obliged to fuel, synthetic fuel and there are still discussions going on.

Then secondly, the production capacities have to get up and serve the units and to go in energy, and you need a lot of green energy for that. So to get all this done up to the year 2050, let's stay optimistic.

That's my comment on that one. But it's important that we get to first steps and that we get to get ahead and then we can discuss in five years from now whether it's realistic to be a minus 50%, minus 70%, minus 100% on the aviation side, but that airlines it's not airports and airports, we'll get it done.

On [PAG], we have some operation costs, but it’s a small operating costs, yes, it’s ready or more or less ready. And operational costs are single-digit number, somewhere in the middle of a single-digit million number.

On [Multiple Speakers] guidance?

First question regarding the guidance, so our guidance is 760 to 880. When looking on the low side, no compensation payments are included.

It's a combination of risks and chances when we go to the high sides of the guidance, and there could be lower compensation at Greece, but at all other airports we do not expect any additional compensation in the year 2022.

There are no more question at this time. I hand back to Christoph Nanke for closing comments.

Thank you all for participating for the interesting questions. If there are any further questions, please contact us in IR, we are happy to answer.

And I wish you all a good rest of the day and we stay in touch. Thank you.