Asset and Financial Position

Asset and capital structure

At €17,607.6 million, total assets as at December 31, 2022 were €1,367.6 million (+8.4%) above the previous year.

Non-current assets increased by €1,374.8 million to €14,366.1 million. This is mainly due to the increase in property, plant and equipment (+€473.4 million) as a result of the capacity investment measures at the Frankfurt site and the increase in shares in companies accounted for using the equity method (+€420.1 million). This resulted in the amount of €375.3 million from the capital contribution to the joint venture Fraport TAV Antalya Yatirim, Yapim ve Isletme A.S (Fraport TAV Antalya), which was founded in connection with the tender for the operating concession at Antalya Airport won in December 2021. Investments in airport operating projects increased by €352.7 million as a result of the ongoing expansion of the Group company in Lima and currency effects. Other financial assets were €241.1 million higher than on December 31, 2021, due to additions to securities and investments in promissory note loans. On the other hand, the complete write-off of the loan receivable from Thalita Trading Ltd. in connection with the activities at St. Petersburg Airport had a diminishing effect on other financial assets and other financial receivables and assets.

At €3,230.1 million, current assets were €101.1 million higher than at December 31, 2021, mainly due to higher other short-term financial assets (+€93.2 million). Furthermore, higher trade accounts receivable (+€24.8 million) due to traffic volumes and higher financial (+€24.6 million) and non-financial receivables and assets (+€18.5 million) due to the balance sheet date contributed to the increase. Cash and cash equivalents, on the other hand, decreased by €77.6 million. Non-current assets held for sale decreased by €108.3 million compared to the 2021 balance sheet date due primarily to the transfer of the 24.5% of shares in the Group company Xi’an completed on May 24, 2022.

Shareholders’ equity increased by €222.9 million to €4,131.9 million as at the 2022 balance sheet date (December 31, 2021: €3,909.0 million). The increase resulted, in particular, from the positive Group result of €166.6 million. Despite this improved result, the equity ratio fell from 23.1% as at December 31, 2021, to 22.2% due to increased debt.

Non-current liabilities increased by €337.2 million to €11,232.6 million (+3.1%), in particular due to long-term financial liabilities. In addition, current liabilities rose in the reporting period by €803.5 million to €2,231.0 million (56.3%). This is mainly due to increased financial liabilities (+€582.0 million) in connection with scheduled reclassifications and the assumption of short-term financial liabilities at the Group company in Lima.

Gross financial debt as at December 31, 2022 was €10,925.6 million, up €991.6 million from €9,934.0 million as at December 31, 2021. Liquidity also increased, by €302.6 million to €3,866.9 million. Correspondingly, net financial debt increased by €689.0 million to €7,058.7 million (December 31, 2021: €6,369.7 million). The gearing ratio reached a level of 180.6% (value as at December 31, 2021: 169.7%). The net financial debt to EBITDA ratio reached a level of 6.9 (previous year: 8.4).

Additions to non-current assets

In the 2022 fiscal year, the additions to non-current assets of the Fraport Group totaled €1,158.7 million, €46.1 million more than the previous year (previous year: €1,112.6 million). They related to €779.8 million in property, plant and equipment (previous year: €847.0 million) and €374.1 million (previous year: €251.7 million) in capital expenditure on "airport operating projects". The item "Other intangible assets" accounted for €4.7 million (previous year: €4.4 million), and €0.1 million to “investment property” (previous year: €9.5 million). The capitalization of interest expenses relating to construction work amounted to €43.9 million (previous year: €40.6 million).

At Fraport AG, the additions to non-current assets amounted to €764.6 million (previous year: €833.5 million). Capital expenditure was mostly attributed to the Expansion South project at the Frankfurt site – mainly relating to Terminal 3 and the passenger transport system – as well as modernization and maintenance measures for existing infrastructure.

The additions to non-current assets are attributed to the individual segments as follows:

Capital expenditure in the Aviation segment amounting to €426.0 million (previous year: €465.1 million) primarily concerned the ongoing construction work in connection with the Frankfurt Airport Expansion South project. Most of this amount related to Terminal 3 and the passenger transport system.

In fiscal year 2022, the Retail & Real Estate segment recorded additions to assets in the amount of €230.7 million (previous year: €264.3 million). The measures also concerned, in particular, the Expansion South project.

The Ground Handling segment recorded additions amounting to €92.9 million (previous year: €89.6 million). These mainly included the modernization measures for existing facilities as well as capital expenditure in connection with the Expansion South project.

In the International Activities & Services segment, additions to non-current assets amounted to €409.1 million (previous year: €293.6 million). The additions related mainly to the Group company Lima in connection with the infrastructure expansion.

Statement of cash flows

In the reporting year, cash flow from operating activities of €787.3 million was generated (2021: €392.6 million). The improvement by €394.7 million resulted in particular from an increase in operating results. In addition, the cash flow from operating activities was negatively impacted in the previous year by payments in connection with the Zukunft FRA – Relaunch 50” program.

Cash flow used in investing activities without investments in cash deposits and securities amounted to €1,305.8 million in the past fiscal year, an increase of €172.6 million year-on-year. This was mainly due to capital contributions of €375.3 million to the joint venture that was established in connection with the new operating concession at Antalya Airport. Higher capital expenditure in airport operating projects, especially in Lima, were offset by lower cash flow used for expansion measures at the Frankfurt site. In addition, revenue from the disposal of shares in the Group companies Xi'an and D-Port, which is accounted for using the equity method, reduced cash outflow by €173.5 million in total.

Taking into account capital expenditure in and revenue from securities and promissory note loans as well as capital expenditure in relation to time deposits, the overall cash flow used in investing activities was €1,216.0 million (2021: €2,304.2 million).

Compared to the previous year, cash flow from financing activities decreased substantially by €1,213.1 million to €882.3 million. In the previous year, considerably more extensive financing measures, including a bond issue, to secure liquidity were carried out compared to the current fiscal year. Within the scope of the signed refinancing at Fraport Greece, financial liabilities of €913.8 million were repaid and refinanced in advance in the amount of €960.0 million. The transactions with "non-controlling interests" are the sale of capital shares and loans to a co-partner of the Greek companies. Taking into account exchange rate fluctuations and other changes, the Fraport Group reported cash and cash equivalents based on the statement of cash flows of €826.2 million as at December 31, 2022 (2021: €431.2 million).

Free cash flow amounted to –€741.0 million (previous year: –€772.3 million).

The following table shows a reconciliation to cash and cash equivalents as shown in the consolidated statement of financial position.

Financing analysis

In 2022, the finance management of the Fraport Group continued to pursue balanced funding via a diversified debt financing base with a balanced maturity profile. As at the balance sheet date, there was a balanced mix of financing, consisting of promissory note loans (20.8%), corporate bonds (19.3%), bilateral loans (43.1%), and project financing (16.8%).

To reduce interest rate risks from borrowing with floating interest rates, in the past interest rate hedging transactions were concluded in some cases. In the course of a refinancing in Greece, the existing derivatives were redeemed, so that the related nominal volumes were reduced to €0.0 million at the end of the year (previous year: €130.7 million). Overall, the financial liabilities had an average remaining term of 6.5 years with an average interest maturity of approximately 5.7 years after hedging measures. Taking into account interest rate hedging transactions, the floating rate portion of the gross debt of the Fraport Group was approximately 13%, and the fixed portion approximately 87%. The cost of debt after hedging measures was 2.3%.

Fully consolidated Group companies in Germany are mostly integrated into the Fraport AG cash pool, so that acquiring separate external funding was not necessary. Funding for fully consolidated foreign Group companies was primarily obtained through previously concluded project financing agreements in the 2022 fiscal year. No analysis or calculation of the financial debt structure and liquidity at segment level is carried out.

The key features of the Group financing instruments with regard to type, maturity, and interest rate structures are presented in the following table:

The contractual agreements for the financial liabilities of Fraport AG include two customary non-financial covenants consisting of a negative pledge and a pari passu clause. Only the special-purpose loans of Fraport AG contained in bilateral loans include, among other things, commonly accepted credit clauses regarding changes in shareholder structure and in the control of the company (so-called change-of-control clause). If these have a proven negative effect on the credit rating of Fraport AG, the creditors have the right to call the loans due ahead of time above a certain threshold.

Independent project financing agreements of fully consolidated foreign Group companies, in particular in Greece and Brazil, contain a series of credit clauses typical for this type of financing. These clauses include regulations under which certain debt service coverage ratios and control indicators for leverage and credit terms must be complied with. Failure to comply with the agreed credit clauses may lead to restrictions on the distribution of dividends and/or to the early redemption of loans or to the additional payment of shareholders’ equity.

The maturity profile of the Fraport Group’s financial debt showed a largely balanced repayment structure as at the balance sheet date (financial debt in foreign currencies translated as at the balance sheet date rate).

Liquidity in the fully consolidated foreign Group companies was €945.3 million (previous year: €509.5 million). As it is partly subject to drawing restrictions arising from the conditions stipulated in the project financing agreements, it is not part of the asset management at Fraport AG.

Liquidity analysis

The strategy of broad diversification of investments in corporate bonds was continued in the 2022 fiscal year. The key characteristics of Fraport AG’s investment instruments in terms of type, remaining term, and interest rate structure are presented in the following table:

The ratings of all investments used in asset management are presented in the following diagram.

As at the balance sheet date, the portfolio consisted almost exclusively of rated assets (rated 99.9% and unrated 0.1%).

The cost of carry, which is calculated using a (tiered statement) maturity-matching principle, was 0.9% (€25.7 million) as at December 31, 2022.

As at the 2022 balance sheet date, the Fraport Group had credit lines amounting to €736.3 million (previous year: €941.8 million) available, of which €156.0 million has, however, been earmarked for future capital expenditure on infrastructure. As at the balance sheet date, Fraport AG had unused credit lines amounting to €580.9 million (previous year: €554.2 million).

Significance of off-balance-sheet financial instruments for the financial position

Fraport focuses on the products presented in the “Financing analysis” section for financing its activities. Off-balance-sheet financial instruments are of no material significance in the financing mix of Fraport.

Rating

In light of Fraport’s unrestricted access to the capital market at attractive prices, very healthy liquidity supply combined with its comfortable portfolio of free, approved credit lines, there has not been a need for an external rating so far.

At €3,866.9 million, Group liquidity was above the forecast value. The negative effect from the free cash flow was offset by high inflows from the raising of long-term financial liabilities. In addition, the sale of companies accounted for using the equity method had the effect of increasing liquidity, especially at Xi'an Airport. The other figures of the asset and financial position were in line with the 2021 forecast.