Analysts’ Presentation – 2008 Financial Results/media/flughafenzh/... · Analysts’ Presentation – 2008 Financial Results Zurich Airport 19.03.2009 ... Opening Bengaluru International

© Unique (Flughafen Zürich AG)19.03.2009 Analysts‘ Presentation1 l l

Analysts’ Presentation – 2008 Financial Results

Zurich Airport 19.03.2009

Thomas E. KernChief Executive Officer

Daniel SchmuckiChief Financial Officer

l


1. 2008 Highlights 2. Full Year Key Data3. Aviation 4. Non Aviation 5. Result / Balance Sheet 6. Other Key Topics 7. Outlook 2009 8. Your Questions

Schedule


1. 2008 Highlights Development Aviation Segment

• Strong traffic increase in both, local and transfer passengers

• Reconstruction of runway 16 / 34 successfully completed

• Successful implementation of Schengen infrastructure

• Several quality awards confirm the high quality standards of Zurich Airport


2008 Highlights (continued) Development Non Aviation Segment

• Strong increase in commercial and real estate revenue; higher spend per PAX

• Expansion of Airport Shopping successfully completed in April

• Opening of the new Airport Hotel

• Several new lettings:• McKinsey Switzerland

(2 ½ top floors Airport Hotel) • Bucher Industries • Swiss Railway Company


2008 Highlights (continued) • Opening Bengaluru International

Airport

• Federal Court decision on 18 pilot cases and beginning of handling of formal expropriation payments

• Economic downturn has impacted especially local traffic and commercial airside revenue, starting 4th quarter 2008


2. Full Year Key Data


2008 Traffic

Local passengers 14'263'306 13'643'601 4.5%

Transfer passengers 7'759'300 6'989'922 11.0%

Transfer share 35.2% 33.8%

Total passengers 22'099'233 20'739'113 6.6%

Movements 274'991 268'476 2.4%

whereof Line & Charter movements 231'775 223'745 3.6%

Cargo (in tons) 387'671 374'264 3.6%

2007 2008 Delta in %


2008 Financial Resultsin million CHF 2008 2007 Delta in %

Revenues 855.1 802.9 6.5%Aviation revenue 525.7 496.0 6.0%Non-Aviation revenue 329.4 306.9 7.3%

EBITDA 420.2 410.1 2.5%EBITDA margin 49.1% 51.1%

Net profit 121.3 130.7 -7.2%

Net financial debt (IFRS) 1'019.0 918.8 10.9%

Cash flow from operating activities 415.1 410.9 1.0%CAPEX 249.9 109.1 n.a.

EpS (in CHF) 19.8 21.3 -7.1%


2008 Financial Results (without noise impact)

in million CHF 2008w/o noise

2007w/o noise Delta in %

Revenues 813.0 748.6 8.6%Aviation revenue 479.3 437.7 9.5%Non-Aviation revenue 333.7 310.9 7.4%


Net profit 100.6 83.5 20.5%

Net financial debt (IFRS) 1'180.2 1'166.8 1.1%

Cash flow from operating activities 379.8 360.2 5.4%

EpS (in CHF) 16.4 13.6 20.6%


4%

1%1%

9%

1%15%

27%

2%

1%

5%

34%

Passengers Charges Security chargesNoise charges Aircraft parking chargesCargo EVALanding charges Emmission chargeAviation Fuel Supply GSAOther Aviation Services

35%10%

20%

35%

Real Estate Concessions Parking Other

Total revenue: 855.1 Mio CHF (PY: 802.9)EBITDA: 420.2 Mio CHF (410.1)Net profit: 121.3 Mio CHF (130.7)

Aviation revenue: 525.7 Mio CHF (496.0)

Non Aviation revenue: 329.4 Mio CHF (306.9)

Revenue Split

61%39%


3. Aviation

http://www.airliners.net/photo/Niki/Airbus A319-112/1347008/L/&width=1024&height=694&sok=WHERE__%28place_%3D_%27Zurich_%28-_Kloten%29_%28ZRH_ESCSLASH_LSZH%29%27%29_&sort=_order_by_photo_id_DESC_&photo_nr=4&prev_id=1359995&next_id=1303549


• Over proportional growth of transfer passengers, who pay lower charges

• Increase of security charges as per 01.07.07 (full year effect)

• Landing charges increase above change in movements as a result of higher Maximum Take off Weight

• Split of noise charges since 01.07.08 between the Canton of Zurich and Zurich Airport

Aviation Segment Revenue Breakdownin million CHF 2008 2007 Delta in %

Passenger charges 176.8 167.9 5.3%Security charges 142.1 117.9 20.5%Landing charges 79.6 74.6 6.8%Noise charges 46.4 58.3 -20.3%Emission charges 3.0 2.8 8.3%Parking charges 5.1 4.8 6.4%Fuel charges 6.5 6.2 5.6%Freight charges 7.8 8.3 -6.1%Baggage sorting 26.4 24.7 6.9%Aircraft energy supply 11.3 10.6 7.0%Others 20.6 20.0 2.8%Total 525.7 496.0 6.0% Landing charge per landing (CHF) 579.1 555.6 4.2%


Africa3.9% (PY:3.9%)

Europe77.2% (PY:77.1%)

Asia10.4% (PY:9.9%)

North America7.4% (PY:8.1%)

Latin America1.1% (PY:1.1%)

average growth: 6.6%

ZRH Passenger Market Share & Growth

- market share - previous year market share (in brackets)


Passengers by Customer Segments

Sky Team5.0%

OneWorld4.9%

Charter3.7%

Low Cost Carrier10.2%

Star Alliance70.2%

0.0% 20.0% 40.0% 60.0% 80.0% 100.0%

20072008

Charter

OneWorld

Sky Team

Low Cost Carrier

Star Alliance

-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%


Key Indicators

60%

61%

62%

63%

64%

65%

66%

67%

68%

69%

70%

71%

72%

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Seat Load Factor

50

55

60

65

70

75

80

85

90

95

100

Passengers per Movement Average Take-Off Weight

Seat Load factorPassengers per MovementAverage Take-Off Weight


4. Non Aviation


• Revenue from rents & leases positively influenced by new lettings & reduced vacancy rate of 3.8%

• Weather conditions, high commodity prices & additional users lead to increase in utility revenue

• Higher spend per dep. pax (CHF 43.54) & enlargement of the landside shopping centre account for increased commercial revenue

• Parking revenue increased due to higher utilisation

Non Aviation Segment Revenue Breakdownin million CHF 2008 2007 Delta in %

Real estate 117.0 107.1 9.2%Rents and leases 82.1 78.1 5.2%Utilities 25.5 20.3 25.8%Others 9.3 8.8 5.8%Commercial 116.6 105.7 10.4%Retail & duty free 79.5 71.4 11.4%Food & beverage 11.4 10.2 12.1%Others 25.7 24.1 6.6%Parking 64.4 61.6 4.6%Others 31.4 32.5 -3.3%Total 329.4 306.9 7.3% Concession income per departing pax (CHF) 8.2 7.9 4.6%


Real estate: Development of Revenue

95.8

105.2

117.0

106.2110.6112.1

107.1110.7

3.3%

4.0%

5.9%

5.4%

3.8%

3.3%

3.8%

4.2%

0

20

40

60

80

100

120

140

2001 2002 2003 2004 2005 2006 2007 2008

in million CHF

0%

1%

2%

3%

4%

5%

6%

7%

8%in %

Real Estate Revenues Ø vacancy in %

20.3utilities

78.1rents & leases

8.8others

25.5utilities

82.1rents & leases

9.3others


Commercial: Gross Income Shop-Operators

346.3

296.4 286.9305.1

435.1

481.1

349.8390.8

33.0 33.033.7

35.4

39.140.6

42.0

43.5

0

100

200

300

400

500

600

2001 2002 2003 2004 2005 2006 2007 2008

in million CHF

30

35

40

45in CHF

Passenger spends spends per dep. pax


5. Result / Balance Sheet


• Contract cost for maintaining the baggage sorting system, aircraft energy supply and X-Ray- assets fell away, maintenance now performed with own personnel.

• Cost for Service Level Agreement (emergency service and fire brigade) with the City of Zurich led to an increase in other operating costs.

• Extraordinary results include the payment of CHF 21.3 Mio. regarding the Swissair claim.

• Decrease in personnel costs mainly due to outsourcing of emergency service and fire brigade; partly compensated by insourcing of staff for the maintenance of the baggage sorting system, aircraft energy supply and X-ray.

• Weather conditions, high commodity prices and new infrastructures led to a high increase in costs for energy and waste

Operating Expenses

in million CHF 2008 2007 Delta in %

Personnel -152.4 -160.0 -4.8%Security costs -113.0 -108.5 4.1%Energy & waste -25.0 -20.8 20.2%Maintenance & material -43.9 -47.7 -8.0%Other operating costs -36.1 -19.1 88.8%SG&A -41.6 -40.8 2.0%Extraordinary results -22.9 4.2 n.a.Total operating expenses -434.9 -392.8 10.7%


Net Result• Increase in depreciation as a

result of the write-off of the Event Dock

• Higher net cost of capital mainly due to write-off of the bond of “Sigma Finance Corp”.

• Result of associated companies is mainly attributed to Bangalore as a result of start-up costs, decreasing traffic figures, economic crisis, missing charge for Domestic PAX (in place since January 2009)

• Decrease in taxes as a result of the reduced expected tax rate of 20.5%



Depreciation -186.2 -180.9 2.9%EBIT 234.1 229.2 2.1%EBIT margin 27.4% 28.5%

Net cost of capital -79.2 -64.6 22.6%Ordinary cost of capital -67.7 -73.3 -7.6%Change fair value interest rate SWAP 5.0 7.0 -28.6%

"Sigma" loss -11.4 - Unwinding noise deferrals -5.1 1.7 n.a.Associated companies -7.6 0.9 n.a.Taxes -25.9 -34.8 -25.5%Net profit 121.3 130.7 -7.2%


Other Key Figures

• Strong free cash flow generation despite significant higher Capital Expenditure


Cash flow operating activities 415.1 410.9 1.0%Cash flow investing activities -258.8 -147.3 75.7%whereof CAPEX -249.9 -109.1 Free cash flow 156.3 263.6 -40.7%

Net financial debt (IFRS) 1'019.0 918.8 10.9%Long term financial liabilities 1'056.0 1'195.9 Short term financial liabilities 175.8 45.3 Cash and financial assets AZNF -212.8 -322.4

Equity 1'428.9 1'373.4 4.0%


Other Key Figures (continued)

• Key ratios incl. noise impacted by noise solution with Canton of Zurich (Split of noise revenue, transfer of part of AZNF)

• Key ratios excl. noise all improved

2008 2007 2008 2007

Net Financial Debt/ EBITDA 2.4 2.2 3.1 3.3Cash Flow from operating activities / Net Financial Debt 41% 45% 32% 31%

Gearing 71% 67% 91% 92%

ROCE 7.1% 6.9% 6.1% 5.4%Return on equity 8.7% 10.0% 7.8% 6.9%Equity Ratio 42.5% 43.2% 44.0% 43.4%

Payout Ratio 25.3% 21.2% 30.5% 33.1%

incl. noise excl. noise


6. Other Key Topics


Skymetro extension

Centralized Security

Update on Infrastructural Facilities for Zurich 2010 (Schengen and Security Projects)

Pier B

Busgate B01-10

Passageway to Pier B

Mod. of Immigration Hall


Update on Arrival Duty Free• The Swiss Government and Parliament

decided in 2007 to support Arrival Duty Free

• Amendment of tax legislations currently in progress within the administration

• Formal decision on amended legislations by the Parliament expected by end of 2009 or during 2010

• Concept and planning of retail setup initiated, targeting an opening immediately after formal approval has been taken

• Arrival Duty Free will have a significant impact on commercial revenue


Status on noise-related payouts• Split of the noise fund between Flughafen Zurich and the Canton of Zurich in the third

Quarter 2008, funds of CHF 115 Mio. transferred• Split of noise charges in place since July 1, 2008• Finance of the old noise-related liabilities by the Canton of Zurich • Currently no need to increase noise surcharge of CHF 5 per departing passenger

• First agreements regarding the compensation payments for formal expropriation reached• Clarification of not yet answered fundamental questions by mean of juridical appraisals of

additional individual and pilot cases

Noise related cost-component (in Mio. CHF)

Canton of Zurich Flughafen Zürich AG

Formal expropriation payments 319.0 150.1 1)

Sound insulation measures - 240.0 2)

Operating / legal proceeding expenses - 50.7Overall cost perspective 319.0 440.8

=> Cash-Perspective going forward 319.0 ~338

1) complies with discounted 125.8 Mio. CHF2) whereof ~102 Mio. CHF already paid out as of December 31, 2008


International Airport ActivitiesBangalore:• Smooth Airport opening May 24, 2008• Efficient and high quality operations• Forecast FY 2008/2009 < 9 Mio. Pax• ad-hoc UDF for domestic passengers

only granted as from mid January 2009• Regulatory body will decide on definitive

UDF, expected as from April 2009• Currently freeze of expansion Capex

Latin America & Caribbean• A-Port S.A. structured & capitalised• First successful bid for Curaçao,

financially closed end of Jan. 2009


7. Outlook 2009


Outlook 2009 - Traffic January/February

1) Effect February 29, 2008: 1.7 percentage points Total passengers 1-2 2008/1-2 2007 = - 3.5 percent

Local passengers 1'839'625 2'023'664 -9.1%

Transfer passengers 1'077'358 1'044'542 3.1%

Transfer share 36.9% 34.0%

Total passengers1) 2'929'713 3'082'344 -5.0%

Movements 39'391 44'398 -11.3%

whereof Line & Charter movements 33'615 35'986 -6.6%

Cargo (in tons) 52'218 62'298 -16.2%

Jan/Feb 2009

Jan/Feb 2008 Delta in %


Change in flight plan of SwissEnlargement of flight offer by Swiss

New destination:Lyon 4x dailypossibly Oslo 1x daily

Reduction of flight frequencies

Withdrawal of routes

London City, 9x reduced to 7x dailyMunich, 28x reduced to 27x weeklyFurther reduction in frequencies expected

Instead of Zurich – Sao Paulo – Santiago de Chile only Zurich – Sao Paulo. The canceled route will be operated as a code share by TAM Linhas Aereas.


Enlargement of flight plan of other airlines

Increasing of frequencies

Various destinations, plus 10x weeklyMalta, 4x reduced to 6x weekly

New destinations and airlines

New York (JFK), 1x daily as of June (second route by Delta)Philadelphia, 4x weekly (as of May 11, 2009 daily)Mahe, 1x weekly (Transit by London)London Gatwick, 1x dailyLondon Gatwick, 1x daily

Various destinations, renewal of charter offering

Yerevan, 3x weeklyHeringsdorf, 1x weeklyFunchal, 1x weekly (saisonal)


Reduction of flight plan of other airlinesReduction of frequencies

Singapore, 14x reduced to 12x weekly (seasonal)London City, 5x reduced to 4x daily

Dismissal of flight offer

London Gatwick, suspension of route (2x daily)Lyon, suspension of route (3x daily)


Outlook 2009 – Commercial Activities January/February

* provisional figures for February

Total turnover, m CHF 68.7 69.8 -1.5%Airside (change versus prev. year) -12.5% 15.5%Landside (change versus prev. year) 14.5% 7.0%Commercial turnover pax, CHF 46.91 45.27 3.6%Airside (change versus prev. year) -7.9% 4.3%Landside (change versus prev. year) 20.4% -3.4%

Jan/Feb 2009*

Jan/Feb 2008 Delta in %


“The Circle at Zurich Airport“

… a new combination of fast growing premium services

at the best accessible spot in Switzerland for

international guests and local visitors…


Facts and Figures• Crescent-shaped area of 37‘000 m² close

to airport• Owned by Unique (Flughafen Zürich AG) • Utilizable area of around 200‘000 m²

50% Offices & Headquarters25% Hotels & Long stay

Health & Beauty Education & Knowledge Culture & Events Brands & Dialogue Special Services

• Development based on test planning• Result of public architecture competition

in February 2010• Construction in stages, start approx. 2012

25%


Financial Information• Investment of approximately 1 billion Swiss Francs in the next 8 - 10 years. • The project will materialise value from today undeveloped land reserves at a

premium spot of Switzerland. • No cash out for this land is needed as the land is owned by Unique (Flughafen

Zürich AG) already. • The project will only be realized if:

• it fulfils all qualitative criteria;• it exceeds a defined hurdle rate;• sufficient commitments of anchor tenants are secured at the respective

stages of modules • Clearly defined potential exit points and scenarios exist at various stages of the

project. • Cash commitment up to 2012 is limited to low double digit million project

development costs. • Project financing strategy and structure will be defined within the next 12-15

months.


Measures to manage economic downturn• Capex-Reduction from CHF 320 million to CHF 250 million in 2009

• Operating costs 2009 were significantly reduced:

• FTE-vacancies basically freezed (or only where indispensable)

• Reduced working hours by significant reduction of overtime and holiday

• Postponement of not very urgent maintenance works

• Further reduction of SG&A costs


• Passenger decrease of 3 - 5% (over proportional decrease of local passengers, transfer passengers flat or slightly positive)

• Transfer share 36-37%

• Total passengers between 21 and 21.5 million

• Lower commercial revenue, mainly as a result of lower airside revenue

• Reduction in total revenue between 5 – 8% as a result of above and full year effect of lower noise revenue as a result of noise fee split (base effect)

• EBITDA margin reduced between 0.7 to 1.0 percentage points

• Depreciation at 2008 level

• Net result between 10 – 20% lower than in 2008 (2008 including one-offs)

• Liquidity was further strengthened in January/ February 2009 with the issuance of a CHF 225 million bond (2009-2014) and the increase of committed credit lines from CHF 250m to CHF 300m

Guidance 2009 Key Figures


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, the fairness, accuracy, completeness or correctness of the information or opinions contained therein. Neither the company nor any of its affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss arising from any use of this document or its content or otherwise arising in connection with this document.

This document does not constitute an offer or invitation to purchase or subscribe for any shares and neither this document nor any part of it shall form the basis of, or be relied upon in connection with, any contract or commitment whatsoever.

This document contains forward-looking statements that are based on current estimates and assumptions made by the management of Unique (Flughafen Zürich AG) to the best of its knowledge. Such forward-looking statements are subject to risks and uncertainties, the non-occurrence or occurrence of which could cause the actual results – including the financial condition and profitability of Unique (Flughafen Zürich AG) – to differ materially from or be more negative than those expressed or implied by such forward-looking statements. This also applies to the forward- looking estimates and forecasts derived from third-party studies. Consequently, neither the Company nor its management can give any assurance regarding the future accuracy of the opinions set forth in this document or the actual occurrence of the predicted developments.

By accepting this document, you agree with foregoing.

Disclaimer


8. Your Questions


Annex to Analysts‘ Presentation


Profit & Loss 2008 – Event Driven (in Mio. CHF – change compared to 2007)

Costs

Revenues

2007

392.8m

2007

802.9m

2008

434.9m

2008

855.1m

*Outsourcing fire brigade and emergency services since January 1, 2008


Change net profit

Profit & Loss 2008 – Event Driven (in Mio. CHF – change compared to 2007)

2007

130.7m

2008

121.3m

*Outsourcing fire brigade and emergency services since January 1, 2008


Capex-Plan

Specific projects: 165 135 203 214 140 72 7 55 41 25 - - Increased maintenance / renovation RWY 16/34 54 5 - - - - - - - - - - Increased maintenance / renovation RWY 14/32 3 4 1 20 50 - - - - - - Increased maintenance / renovation RWY 10/28 2 2 3 3 3 2 1 50 10 - - - Apron renewal 4th phase 4 - - - - - - - - - - - Apron renewal 5th phase - 5 6 5 6 - - - - - - Apron renewal 6th phase - - - - - 5 6 5 6 - - Apron hangar area (next aircraft engine test silencer) - 2 5 - - - - - - - - Apron South adjustments 4 15 2 - - - - - - - - Renovation taxiway - - - - 6 - - - - - - Cargo Infrastructure - - 25 10 - - - - 25 25 - Development of "Zone West" (inkl. Hangar) - 2 - 5 25 25 - - - -

Schengen gate investment 43 37 92 92 - - - - - - - - Centralised security area 15 44 52 52 - - - - - - - - Staff Screening III/ Liquidmassnahmen 10 11 6 - - - - - - - - -

Junction Operations Center (Glatttalbahn) 3 - - - - - - - - - - - Refurbishment cargo-office-buildings 13 5 - - - - - - - - - - Shopping infrastructure landside 13 - - - - - - - - - - - Investments in parking capacity (replacement P5/P40) - 3 5 27 10 - - - - - - - Investments in parking capacity (additional capacity) - - - 40 40 - - - - - -

Aircraft engine test silencer 0 1 7 - - - - - - - - -

Other CAPEX (mainly maintenance / innovation) 84 115 87 71 70 113 113 110 109 115 120 120

Total Capex (approximately) 249 250 290 285 210 185 120 165 150 140 120 120

2018 20192016 20172012 2013 2014 2015Capex (in mio. CHF) 2008 2009 2010 2011


Repayment Schedule (as per 31.12.2008)**Major repayments:

• Partly repayments CBL (2009-12)

• Bonds 128m (2009) and 150m (2010)

• Partly repayments US PP (2011-15)

• Repayment Japa-nese PP (2024)

• ** and additionally new bond 225m (issued in 2009 -2014)

178.70

202.42

127.35

129.18

73.15

73.15

73.15

-

421.17

0 50 100 150 200 250 300 350 400 450 500

2009

2010

2011

2012

2013

2014

2015

~

2024

298.15


Debt Maturity Structure (Financial Liabilities)

17.4% 54.4% 28.2%

6.5% 25.1% 68.4%

6.9% 26.5% 66.5%

7.8% 23.5% 68.7%

8.7% 38.8% 52.5%

3.6%48.0% 48.4%

14.3% 38.1% 47.6%

0% 20% 40% 60% 80% 100%

2002

2003

2004

2005

2006

2007

2008

within 1 year between 1 and 5 years longer than 5 years

Mat

urity

at t

he e

nd o

f (ha

lf) y

ear


Traffic: European Passenger Benchmark (millions)

Source: ACI

Zurich ZRH

Munich MUC

Amsterdam AMS

Madrid MAD

Frankfurt FRA

Paris CDG

London LHR

Brussels BRU

Geneva GVA

Basel BSL

Copenhagen CPH

Milan MXP

Vienna VIE

0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0

Pax VJ

Pax IST

Z R H

M U C

A M S

M A D

F R A

C D G

B SL

GV A

B R U

M X P V IE

C PH

LHR

- 2 0 .0 % - 15.0 % - 10 .0 % - 5.0 % 0 .0 % 5.0 % 10 .0 % 15.0 %

passenger growth (YTD)

2007

2008


Hub Carrier Dominance at European Airports (seats offered)

Market share Source: Sabre, Nov. 2008

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

MXP

BRU

LHR

MAD

VIE

CPH

CDG

AMS

MUC

ZRH

FRA Hub-Carrier

Alliance members

Documents

Analysts’ Presentation – 2008 Financial Results/media/flughafenzh/... · Analysts’ Presentation – 2008 Financial Results Zurich Airport 19.03.2009 ... Opening Bengaluru International