Flughafen Zurich AG · SIX:FHZN

Flughafen Zurich — H1 2008 Earnings Presentation

57 slides from Flughafen Zurich's earnings presentation, Aug 20, 2008

Slide 1: Analysts' Presentation – 2008 Half Year Financial Results
Analysts’ Presentation – 2008 Half Year Financial Results Thomas E. Kern Daniel Schmucki Chief Executive Officer Chief Financial Officer Zurich 1 l 20.8.2008 Airport l 20.8.2008 l Analysts‘ Presentation © Unique (Flughafen Zürich AG)
Slide 2: Schedule
Schedule 1. 2008 Half Year Highlights / Key Data 2. Aviation 3. Non Aviation 4. Operating Costs / Balance Sheet 5. Noise Compensations 6. Other Key Topics 7. Outlook 2008 8. Your Questions 2 l 20.8.2008 l Analysts‘ Presentation © Unique (Flughafen Zürich AG)
Slide 3: 2008 Half Year Highlights
2008 Half Year Highlights • High passenger growth • Strong growth of non aviation revenues • High net result 3 l 20.8.2008 l Analysts‘ Presentation © Unique (Flughafen Zürich AG)
Slide 4: 2008 Half Year Highlights
2008 Half Year Highlights • Strong traffic increase of both, local and transfer passengers • Strong commercial and real estate revenue increase • Operating costs increased under- proportionally, leading to a strong EBITDA, EBITDA margin and bottom line development • High quality standards of Zurich
Slide 5: 2008 Half Year Highlights (continued)
2008 Half Year Highlights (continued) • Department of Environment, Transport, Energy and Communications rejected the Northern Approach over Swiss territory and decided not to secure the option of a parallel runway • Expansion of Airport Shopping successful, opened mid April • Airport Hotel opened on
Slide 6: 2008 Half Year Highlights (continued)
2008 Half Year Highlights (continued) • Opening of Bangalore International Airport • Schengen construction projects started with a ground-breaking ceremony • UEFA Euro 2008 handled smoothly at Zurich Airport • Federal Court decided on 18 pilot cases which now enabled us to calculate the costs for fo
Slide 7: Half Year 2008 Key financial data
Half Year 2008 Key financial data 7 l 20.8.2008 l Analysts‘ Presentation © Unique (Flughafen Zürich AG)
Slide 8: 2008 Half Year Traffic
2008 Half Year Traffic 2008 2007 Delta in % Jan - Jun Jan - Jun 08 vs. 07 Local passengers 6'919'164 6'379'476 8.5% Transfer passengers 3'646'294 3'256'610 12.0% Transfer share 34.5% 33.7% Total passengers 10'606'574 9'702'855 9.3% Movements 138'343 130'912 5.7% Cargo (in tons) 199'937 183'050 9.2%
Slide 9: 2008 Half Year Financial Results
2008 Half Year Financial Results 2008 2007 Delta in % in million CHF Jan - Jun Jan - Jun 08 vs. 07 Revenues 424.7 372.9 13.9% Aviation revenue 260.3 225.2 15.6% Non-Aviation revenue 164.5 147.8 11.3% EBITDA 226.5 182.4 24.2% EBITDA margin 53.3% 48.9% Net profit 79.8 46.1 73.1% Cash flow from operati
Slide 10: 2008 Half Year Financial Results (without noise impact)
2008 Half Year Financial Results (without noise impact) 1-6/08 1-6/07 in million CHF Δ % w/o noise w/o noise Revenues 397.0 347.4 14.5% Aviation revenue 230.4 198.0 16.7% Non-Aviation revenue 166.6 149.4 11.5% EBITDA 198.8 156.9 27.2% EBITDA margin 50.1% 45.2% Net profit 60.5 26.6 127.8% Cash flow f
Slide 12: Aviation Segment Revenue Breakdown
Aviation Segment Revenue Breakdown • Strong passenger growth 2008 2007 Jan- Delta in % in million CHF Jan-Jun Jun 08 vs. 07 rates of 9.3% combined with higher security fees Passenger charges 84.9 78.5 8.1% as of 1.7.2007 led to an Security charges 68.0 46.8 45.5% over-proportional growth Landing cha
Slide 13: ZRH Passenger Market Share & Growth (2008 Half Year)
ZRH Passenger Market Share & Growth (2008 Half Year) North America Europe 7.5% (+0.2%) 77.3% (+10.4%) Asia 10.5% (+10.1%) Latin America Africa 1.1% (+9.1%) 3.6% (+4.1%) - market share - change to previous year (in brackets) average growth: 9.3% 13 l 20.8.2008 l Analysts‘ Presentation © Unique (Flugh
Slide 14: Key Indicators
Key Indicators Passengers per Movement Seat Load Factor Average Take-Off Weight 70% 100 Seat Load Factor Passengers / Movement Average Mtow 90 66% 80 62% 70 58% 60 SARS Iraq war 54% 50 98 99 00 01 02 03 04 05 06 07 08 1 19 1 19 1 20 1 20 1 20 1 20 1 20 1 20 1 20 1 20 1 20 Airline traffic only H H H
Slide 15: Passengers by Customer Segments
Passengers by Customer Segments 2007 Star Alliance 70.4% 2008 Low Cost Carrier 10.4% passenger growth Star Alliance OneWorld 5.1% Low Cost Carrier OneWorld Sky Team 5.3% Sky Team Charter Charter 3.2% -35.0% -30.0% -25.0% -20.0% -15.0% -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0%
Slide 17: Non Aviation Segment Revenue Break-down
Non Aviation Segment Revenue Break-down • Very pleasing increase in million CHF 2008 2007 Delta in % in real estate revenue is Jan-Jun Jan-Jun 08 vs. 07 mainly the result of new Real estate 59.3 53.0 11.8% lettings and an increase of Rents and leases 40.7 38.8 4.8% utility revenue. Utilities 13.2 9.
Slide 18: Development of Real Estate Revenue
Development of Real Estate Revenue in million CHF in % 140 8% Halfyear values Real Estate Revenues 7% 120 Ø vacancy in % 6% 100 5.9% 5.4% 5% 4.3 80 others 5.4 others 4% 4.2% 4.2% 4.0% 60 3.8% 110.7 3.6% 3.3% 105.2 106.2 3.3% 107.1 3% 3.3% 95.8 112.1 110.6 13.2 40 utilities 2% 9.9 59.3 56.9 53.0 util
Slide 19: Development of Passenger Spends
Development of Passenger Spends CHF m CHF 500 44.1 45 Halfyear values Passenger spends spends per dep. pax 450 435.1 42.4 41.9 390.8 41.6 400 40.6 346.3 349.8 +4% +1.9% 350 39.1 40 296.4 305.1 300 286.9 +13.7% +10.2% 250 233.6 205.5 200 35.4 186.5 35 150 33.7 33.0 33.0 100 50 0 30 2001 2002 2003 200
Slide 21: Operating Expenses
Operating Expenses • Decrease in cost of 2008 2007 Delta in % in million CHF personnel due to the Jan-Jun Jan-Jun 08 vs. 07 outsourcing of the Personnel 73.4 77.6 -5.4% emergency services to Security costs 56.4 51.3 9.9% the city of Zurich as per Energy & waste 11.8 10.0 18.1% 1.1.2008 (Project SuS)
Slide 22: Result / Balance Sheet
Result / Balance Sheet 22 l 20.8.2008 l Analysts‘ Presentation © Unique (Flughafen Zürich AG)
Slide 23: Net Result
Net Result • Significant increase of in million CHF 1-6/08 1-6/07 Δ % EBITDA margin is the result of over-proportional EBITDA 226.5 182.4 24.2% increase of aviation and EBITDA margin 53.3% 48.9% non aviation revenue and Depreciation -92.1 -90.4 1.9% cost control EBIT 134.4 92.0 46.0% • Lower interes
Slide 24: Other Key Figures
Other Key Figures • CAPEX increased as expected mainly as a in million CHF 1-6/08 1-6/07 Δ % result of project Cash flow operating activities 208.3 178.6 16.7% Schengen, Staff Cash flow investing activities -114.5 138.3% -48.0 Screening III as well as whereof CAPEX -102.2 -25.2 the refurbishment of
Slide 26: Initial position in 2006: Finance and balance sheet risks
Initial position in 2006: Finance and balance sheet risks of Unique (Flughafen Zürich AG) resulted in a supplement to the merger agreement To reduce finance and balance sheet risks, the following measures were agreed in the supplement to the merger agreement: • Unique (Flughafen Zürich AG) implement
Slide 27: History of noise-related compensation claims
History of noise-related compensation claims • 19‘000 demands for noise compensation; • Incomplete legislation; • 18 pilot cases to clarify open questions; • Final instance judgements opened in the course of the first half year 2008 • The now available answers to the open questions allow: Æ An estim
Slide 28: Financing / Accounting of noise-related costs, as of June 2008
Financing / Accounting of noise-related costs, as of June 30, 2008 As per base case scenario expected total costs: 759.8 Mio. CHF Cost for formal expropriation payments, noise insulation measures, noise related operating costs As per negative scenario expected total costs: Higher than 1.1 bn. CHF Th
Slide 29: Consequences
Consequences • „Prefinancing“ (financial handling) of „old“ noise-related liabilities by Canton of Zurich; • Split of Airport of Zurich Noise Fund as per 30.6.2008 between Canton of Zurich and Flughafen Zürich AG (intangible asset) • Split of noise charges as of 1.7.2008 between Canton of Zurich and
Slide 30: Overview AZNF
Overview AZNF Airport Zurich Noise Fund Per 30.6.2008: Per 30.6.2008: Split balance noise fund Split balance noise fund (Canton ZH 115.4 Mio. CHF) (FZAG 153.7 Mio. CHF) As of 1.7.2008 As of 1.7.2008 Annual noise charges (47%) -> 2.35 / dep. Pax Annual noise charges (53%) -> 2.65 / dep. Pax 1. Formal
Slide 31: Balance sheet and financial consequence as of 01.07.08
Balance sheet and financial consequence as of 01.07.08 • Payments for formal expropriations and for noise insulation payments will reduce the provision; • Noise charges (in the P&L) as of 1 July 2008 reduced by the part of Canton of Zurich (47%); • Unwinding of discounted provision through P&L as fi
Slide 32: Next steps
Next steps Handling: • Preparation of proposals for compensation in respect of formal expropriations to entitled owners – (only to those where all criteria as per pilot cases are fulfilled); • Dismissal of those claims that are clearly not entitled for any compensation; • Furthermore Flughafen Züric
Slide 33: Summary
Summary • Many open questions are assessed at final instance; • Expected total noise-related costs amount to CHF 760 Mio.; • Canton of Zurich pre-finances „old“ noise-related liabilities as contractually agreed; • Flughafen Zürich AG implements all necessary balance sheet measures; • Flughafen Züric
Slide 35: Update on Infrastructural Facilities for Zurich 2010
Update on Infrastructural Facilities for Zurich 2010 (Schengen and Security Projects) Refurbishment of apron Two-lane taxiway Transfer security- checkpoints Pier E Pier B Skymetro extension Mod. of Immigration Hall Passageway to Pier B Centralized Security Non Schengen Service Zone Busgate B01-10 Sc
Slide 36: Update on the development of Butzenbüel-Area
Update on the development of „Butzenbüel“-Area • Development of “Butzenbüel”-Area on track. • Architectural contest planned to start in December. • Focus on developing a construction site of about 40‘000 m2 • Estimated investments of about 0.8 – 1.2 Mrd. CHF for up to 200’000 m2 floor space • Realis
Slide 37: International Airport Activities - Bangalore / India
International Airport Activities - Bangalore / India Opening of the new airport: • After 35 month of construction, Bengaluru International Airport has been successfully opened on 24th May 2008 • The opening of the airport and the transition from the old HAL airport went very smooth • The old HAL air
Slide 38: A-Port: Joint Venture for LAT Activities
A-Port: Joint Venture for LAT Activities • End of 2007, Unique signed contracts to enter into a JV with Brazilian infrastructure group Camargo Corrêa 75% 25% 49% 51% and the Chilean Gestion e Ingenieria Unique/IDC Unique/IDC Inv. Holding Mgt. Holding IDC S.A. 80% 20% • A-Port will invest in the cons
Slide 39: Update on Arrival Duty Free
Update on Arrival Duty Free • No change in the schedule to introduce Arrival Duty Free • The national parliament decided in 2007 in favour of Arrival Duty Free • Necessary laws are amended • Decision on amended laws in national parliament expected in 2009 • Store units are planned to open shortly af
Slide 41: Market Outlook: Traffic - Airlines & Destinations
Market-Outlook: Traffic - Airlines & Destinations I &additions ¾ Swiss: Istanbul +3 weekly A320 London City +1 daily Avro Stockholm +2 weekly A319 Valencia +4 weekly A319 (reopened destination) ¾ Air Berlin: Saarbrucken +1 weekly frequency A320 (new destination) ' withdrawals / reductions ¾ Air Fran
Slide 42: Guidance on 2008 expected key figures
Guidance on 2008 expected key figures • Passenger growth of 7 – 7.5% compared to 2007. • Total expected passengers of 22.2 – 22.3 million, transfer rate slightly higher at approximately 34 to 35%. • 6-7 % increase in aviation revenue. This revision compared to the earlier guidance includes the fact
Slide 43: Disclaimer
Disclaimer This document has been prepared by Unique (Flughafen Zürich AG) for use in this presentation. The information contained in this document has not been independently verified. No representation or warranty – whether express or implied – is made as to, and no reliance should be placed on, th
Slide 45: Annex to Analyst Presentation
Annex to Analyst Presentation 45 l 20.8.2008 l Analysts‘ Presentation © Unique (Flughafen Zürich AG)
Slide 46: 10-Year Capex-Plan (unchanged)
10-Year Capex-Plan (unchanged) Capex (in mio. CHF) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Top-Projects: 223 258 279 165 76 44 18 62 41 40 Increased maintenance / renovation RWY 16/34 56 4 - - - - - - - - Increased maintenance / renovation RWY 14/32 3 2 1 60 10 - - - - - Increased maintena
Slide 47: Repayment Schedule
Repayment Schedule Major repayments: 2024 421.17 • Partly repayments ~ - CBL (2008-12) 73.15 2015 • Bonds 128m (2009) 2014 73.15 and 150m (2010) • Partly repayments 2013 73.15 US PP (2011-15) 129.18 2012 • Repayment Japa- 2011 127.35 nese PP (2024) 2010 202.42 178.70 2009 2008 49.01 0 50 100 150 200
Slide 48: Debt Maturity Structure (Financial Liabilities)
Debt Maturity Structure (Financial Liabilities) 30.6.08 22.1% 38.5% 39.3% Maturity at the end of (half) year 3.6% 2007 48.0% 48.4% 2006 8.7% 38.8% 52.5% 2005 7.8% 23.5% 68.7% 2004 6.9% 26.5% 66.5% 2003 6.5% 25.1% 68.4% 2002 17.4% 54.4% 28.2% 0% 20% 40% 60% 80% 100% within 1 year between 1 and 5 year
Slide 49: Elimination of financing- and balance sheet-risks related to aircraft noise
Extract from Analyst Presentation Spring 2006 Elimination of financing- and balance sheet-risks related to aircraft noise 49 l 20.8.2008 l Analysts‘ Presentation © Unique (Flughafen Zürich AG)
Slide 50: The Concept
Extract from Analyst Presentation Spring 2006 The Concept Unique to implement measures to ensure its ability (bearable risk) to bear balance sheet and financing risks associated with aircraft noise on its own up to CHF 1.1 billion (noise related cost). Should the total anticipated potential costs as
Slide 51: Key Definitions (1)
Extract from Analyst Presentation Spring 2006 Key Definitions (1) „old“ noise related “Old” noise-related liabilities are potential liabilities (for liabilities formal expropriation) that arose prior to June 2001, up to which date the Canton of Zurich was holder of the operating licence. As before,
Slide 52: Key Definitions (2)
Extract from Analyst Presentation Spring 2006 Key Definitions (2) Noise related Total costs associated with aircraft noise (potential formal cost: expropriations, costs for sound insulation and all related operating costs) Bearable risk: Balance Sheet risk: • The balance sheet of the company stays „
Slide 53: The Concept / Three phases
Extract from Analyst Presentation Spring 2006 The Concept / Three phases Today Stage 1 100 % to Unique On First Swiss Federal Court Ruling on a Noise Expropriation Claim Financing by Unique only Unique Estimated Total Yes Noise Liabilities No ¾Old Noise Expropiration Claims > Threshold ¾New Noise Ex
Slide 54: The Concept / Conservative anticipated cost
Extract from Analyst Presentation Spring 2006 The Concept / Conservative anticipated cost Conservative estimates of total noise related cost „Threshold“ (CHF 1,1 bn in base-case). t Today Other important Other important court decision court decision First compensation for „old“ claims (presumably en
Slide 55: The Concept / Cash Flows in Phase 2
Extract from Analyst Presentation Spring 2006 The Concept / Cash Flows in Phase – 2 (Pre-Financing by the Canton of Zurich) Pre-financing ot the Canton of Zurich (kicks-in when the first compensation for “old” formal expropriation has to be paid (Phase – 2). Yearly noise related Positive balance on
Slide 56: The Concept / Resulting Transactions
Extract from Analyst Presentation Spring 2006 The Concept / Resulting Transactions 1) The Board of Directors is to ask the General Meeting of Shareholders to approve a capital increase with a market value of approximately CHF 300m Swiss francs in order to strengthen the company’s equity. => solves t
Slide 57: Additional Steps
Extract from Analyst Presentation Spring 2006 Additional Steps 9 The outstanding debt owed to the Canton of Zurich amounting to CHF 300m can be paid back prematurely without any breakage 9 The Canton of Zurich reduces its shareholding in the company to 331/3 % of the total shares as provided for in

Flughafen Zürich — H1 2008 Earnings Presentation on 6ix

Flughafen Zurich — H1 2008 Earnings Presentation

Slide 1: Analysts' Presentation – 2008 Half Year Financial Results

Slide 2: Schedule

Slide 3: 2008 Half Year Highlights

Slide 4: 2008 Half Year Highlights

Slide 5: 2008 Half Year Highlights (continued)

Slide 6: 2008 Half Year Highlights (continued)

Slide 7: Half Year 2008 Key financial data

Slide 8: 2008 Half Year Traffic

Slide 9: 2008 Half Year Financial Results

Slide 10: 2008 Half Year Financial Results (without noise impact)

Slide 11: Aviation

Slide 12: Aviation Segment Revenue Breakdown

Slide 13: ZRH Passenger Market Share & Growth (2008 Half Year)

Slide 14: Key Indicators

Slide 15: Passengers by Customer Segments

Slide 16: Non Aviation

Slide 17: Non Aviation Segment Revenue Break-down

Slide 18: Development of Real Estate Revenue

Slide 19: Development of Passenger Spends

Slide 20: Operating Costs

Slide 21: Operating Expenses

Slide 22: Result / Balance Sheet

Slide 23: Net Result

Slide 24: Other Key Figures

Slide 25: Noise compensation

Slide 26: Initial position in 2006: Finance and balance sheet risks

Slide 27: History of noise-related compensation claims

Slide 28: Financing / Accounting of noise-related costs, as of June 2008

Slide 29: Consequences

Slide 30: Overview AZNF

Slide 31: Balance sheet and financial consequence as of 01.07.08

Slide 32: Next steps

Slide 33: Summary

Slide 34: Other Key Topics

Slide 35: Update on Infrastructural Facilities for Zurich 2010

Slide 36: Update on the development of Butzenbüel-Area

Slide 37: International Airport Activities - Bangalore / India

Slide 38: A-Port: Joint Venture for LAT Activities

Slide 39: Update on Arrival Duty Free

Slide 40: Outlook 2008

Slide 41: Market Outlook: Traffic - Airlines & Destinations

Slide 42: Guidance on 2008 expected key figures

Slide 43: Disclaimer

Slide 44: Your Questions

Slide 45: Annex to Analyst Presentation

Slide 46: 10-Year Capex-Plan (unchanged)

Slide 47: Repayment Schedule

Slide 48: Debt Maturity Structure (Financial Liabilities)

Slide 49: Elimination of financing- and balance sheet-risks related to aircraft noise

Slide 50: The Concept

Slide 51: Key Definitions (1)

Slide 52: Key Definitions (2)

Slide 53: The Concept / Three phases

Slide 54: The Concept / Conservative anticipated cost

Slide 55: The Concept / Cash Flows in Phase 2

Slide 56: The Concept / Resulting Transactions

Slide 57: Additional Steps