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Annual Report 2023

Letter from the CEO

I am pleased to present our Annual Report for 2023. A challenging yet good fiscal year lies behind us. We have taken important steps to put your company in a successful position, both now and in the future. For the first time since the COVID-19 pandemic, our key operating earnings indicator EBITDA is now higher than it was before the crisis....

Letter from the CEO

Dear Shareholders

I am pleased to present our Annual Report for 2023.

A challenging yet good fiscal year lies behind us. We have taken important steps to put your company in a successful position, both now and in the future. For the first time since the COVID-19 pandemic, our key operating earnings indicator EBITDA is now higher than it was before the crisis, having reached a new high of 1,204 million Euros. This improvement in our earnings was driven by international business, and our Frankfurt site played a considerable part in it too.

As in previous years, we have seen very dynamic traffic development in the past fiscal year. At the start of the fiscal year we were welcoming as few as 3.5 million passengers to Frankfurt each month – but by the middle of the year this figure had risen to 6 million passengers. We also recorded very positive development overall at our international airports. Special mention should of course be made here of our sites in Greece and Antalya, which are already operating either at or above pre-crisis levels. I am proud of our operational teams both in Frankfurt and internationally who have successfully managed this strong traffic growth over the last few years, with stable operations overall and in many cases high customer satisfaction levels across the board.

Thank you to our teams who have skillfully handled this dynamic traffic development.

A particularly important milestone in improving operational performance in Frankfurt was taking over aviation security checks at the beginning of the fiscal year, in conjunction with using new CT scanners for the first time. I would like to take this opportunity to thank the German Federal Ministry of the Interior and Federal Police for their trustful collaboration, which made it possible for us to take over operations in the first place.

Another achievement of the past year, dear shareholders, has been the important developments and progress we have made in terms of sustainability. With ReFuelEU Aviation, the European Union has adopted a new legal act that will make the European aviation market “cleaner” in the long term. The core concept of ReFuelEU Aviation is to enforce binding minimum thresholds for the use of sustainable aviation fuels, which will gradually increase from 2025 onwards.

At company level, we have rolled out our decarbonization master plan to our significant, fully consolidated company sites and have now created a Group-wide program of measures to achieve carbon freedom by 2045. In Frankfurt, I am delighted to report that you will see another “visible” sign of our sustainability activities by the end of the year: Runway West will have a 2.8-kilometer-long photovoltaic system running along it, which we submitted an application to build last year.

Your company is celebrating another special event this year too: 100 years of air transport in Frankfurt. Starting out as Südwestdeutsche Luftverkehrs-AG at the “airfield” in Rebstock, the Fraport you know today has grown into one of the world’s leading international air traffic groups. You can track this evolution in our new photo book “100 Jahre Flughafen-Geschichte in Frankfurt” (100 Years of Airport History in Frankfurt), which was published at the start of the year. It is precisely this DNA that makes us unique and that we need more than ever today: “develop together,” “don’t stand still,” or simply “shape the future together.” With our strategy Fraport.2030, we are rising to our challenges and focusing our responses on the strategic priorities of “growth and sustainability,” “efficiency and innovation,” and “employer of choice” – with the firm conviction that we will only achieve success in these areas if we work together. We believe that the various changes and challenges we are facing – take for example the key buzzwords demographic change and artificial intelligence – also offer exciting opportunities that we want to actively seize for the benefit of your company.

We are in a good position to do this: With the projects we have initiated such as Terminal 3, the modernization of Terminals 1 and 2 in Frankfurt, a multitude of development projects outside Germany, and HRneo, not to mention numerous innovation projects, we believe that we have taken the right steps to position your company successfully in the competitive market. Our new slogan “Connecting the world with tomorrow” clearly expresses our corporate mission: Fraport creates connections. We connect passengers and business models, we foster Group-wide and therefore international collaboration within our workforce, and we consistently focus on the future.

Thanks to this strategically attractive setup, the expected traffic growth, the projects being implemented, and the great dedication of our employees, we are confident that we will achieve the financial targets we have set with Fraport.2030 too: EBITDA of 2 billion Euros and free cash flow of 1 billion Euros in 2030.

Fraport creates connections.

We are already taking steps in this direction in the current year: With EBITDA of between approximately 1.26 and 1.36 billion Euros, we expect to achieve a new record result. The Group result is also set to rise strongly to around 435 to 530 million Euros. In operational terms, we predict that Frankfurt will see passenger numbers grow to between 61 and 65 million passengers. With the first phase of the construction of the terminal in Lima now complete, we are also getting closer to concluding our major expansion activities. The sizeable investment measures that are still ongoing, however, mean that we expect further significant negative free cash flow for 2024 until the investment volume declines from 2025 onwards.

As Fraport is particularly affected by the consequences of the COVID-19 pandemic and at the same time continues to invest heavily in the expansion of its capacities, the Supervisory Board and the Executive Board have decided against proposing a dividend for the past fiscal year to the 2024 Annual General Meeting and plan to allocate the profit earmarked for distribution to revenue reserves instead.

Dear shareholders, your company is in an excellent position to cope with changing market conditions. We are pleased to have finally left the coronavirus pandemic behind after three years. For this reason, the Supervisory Board and the Executive Board have decided to hold this year’s Annual General Meeting in person again. I therefore look forward to welcoming you personally to the Sheraton Hotel at Frankfurt Airport on May 28, 2024. You will receive an official invitation in April.

Thank you for your confidence in us, I am looking forward to the future of your company.

Sincerely yours,


Stefan Schulte
Financial and Non-financial performance indicators
    • 1,204.0

      mn

      EBITDA

      EBITDA above 2019 level due to positive traffic development.

    • 430.5

      mn

      Group result

      Earnings improvement driven by international business; Frankfurt Airport also makes a significant contribution.

    • –656.4

      mn

      Free Cash Flow

      Slightly improved but due to continuing expansion measures still negative.

    • 18,057

      Number of employees as of December 31

      Lower headcount due to change in consolidation of the Group company FraSec Aviation Security GmbH.

    • 158,065

      m.t.CO2

      CO2 emissions

      Implementation of the measures from the decarbonization master plan is having an impact as traffic volumes increase.

    • 59,355,389

      Passengers at FRA

      Passenger volume above previous year and around 16% below 2019 level.

  • Financial performance indicators
      2023 2022 Change Change in %
    Revenue (€ million) 4,000.5 3,194.4 +806.1 +25.2
    Revenue adjusted for IFRIC 12 (€ million) 3,485.1 2,863.3 +621.8 +21.7
    EBITDA (€ million) 1,204.0 1,029.8 +174.2 +16.9
    Group result (€ million) 430.5 166.6 +263.9 > 100
    Earnings per share (basic) (€) 4.26 1.43 +2.8 > 100
    Dividend per share (€)1) 0.00 0.00 0.00 –
    Free cash flow (€ million) –656.4 –741.0 +84.6 +11.4
    Total assets (€ million) 18,890.9 17,607.6 +1,283.3 +7.3
    Shareholders’ equity ratio (%) 22.9 22.2 +0.7 PP –
    Group liquidity (€ million) 4,041.3 3,866.9 +174.4 +4.5
    Net financial debt (€ million) 7,712.6 7,058.7 +653.9 +9.3
    Net financial debt to EBITDA 6.4 6.9 –0.5 –
    EBITDA margin (%) 30.1 32.2 –2.1 PP –
    ROFRA (%) 6.6 6.0  +0.6 PP –
    Gearing Ratio (%) 178.6 180.6 –2.0 PP –

    1) No Dividend proposed.

    Non-financial performance indicators
      2023 2022 Change Change in %
    Number of employees as at 31.12. 18,057 19,211 –1,154 –6.0
    Average number of employees 17,840 18,850 –1,010 –5.4
    Global satisfaction of passengers (Group) (%) 74 80 –6.0 PP –
    Employee satisfaction (Group) 4.761) 4.76 – –
    Women in management positions (Germany) (%) 24.4 23.1 +1.3 PP –
    Women in management positions (Germany) (%) 33.9 31.6 +2.3 PP –
    Sickness rate (Germany) (%) 8.7 9.9 –1.2 PP –
    CO2 emissions (Group) (t) 158,065 160,4892) –2,424 –1.5

    1) 2022 values. No data collection in 2023.

    2) Due to subsequent verifications 2022 number changed.

The year 2023 …

… was characterized by a further increase in traffic volume, which was dominated in particular by leisure travelers. Fraport Group EBITDA exceeded the 2019 figure for the first time in the 3rd quarter, despite lower passenger volume at the Frankfurt site. With growth rates above the 2019 level, Fraport Greece remained at the top of the Group sites. The number of passengers in Antalya was also above the pre-crisis sommerreisewelle level.

1. QUARTER
  • Positive traffic development
  • Two strike days in Frankfurt only slightly dampened development
  • Intensive preparations for the summer travel wave
Takeover of aviation security

At the turn of the year, Fraport took over control of the management of the aviation security checks at Frankfurt Airport. In addition to the takeover of the existing infrastructure of the Federal Police new control infrastructure was procured at the same time. This ­includes new CT scanners, which facilitate and speed up the passenger process.

Rethinking the world of work at Fraport: Start for HRneo

HRneo is the largest development program in Human resources in recent years. Its aim is to modernize the HR department and further increase Fraport´s attractiveness as an employer

Lima Airport: Takeover of apron control with German Air Traffic Control

The operation of apron control at Lima Airport was awarded to the subsidiary of Deutsche Flugsicherung DFS Aviation Services (DFS). Following the commissioning of the new terminal at the end of 2024, apron control will be managed using state-of-the-art camera technology for the first time in South America. This is an important milestone on the way to turning the Peruvian capital´s airport into one of the most modern hubs on the continent.

2. QUARTER
  • Start of the summer travel wave
  • For the first time since the coronavirus pandemic again more than 200,000 passengers in one day in Frankfurt
  • Regular operations in the first half of the year
  • Greek airports still clearly above traffic volume of 2019
Second runway in Lima opened

With the take-off of the first commercial flight on April 3, the new runway at Lima´s international airport “Jorge Chávez” International Airport in Lima and the new airport control tower were inaugurated. This makes Fraport´s airport the first in Peru to have two runways. The utilization of the new runway and the tower will be successively increased until they are fully operational with the completion of the new Terminal at the end of 2024.

Further Power Purchase Agreement concluded

A new Power Purchase Agreement (PPA) with the European energy provider Centrica Energy Trading A/S supplies the Frankfurt Airport hub with additional wind energy. The contract provides for the supply of a total annual wind power volume of around 63 gigawatt hours. This corresponds to an output of 22 megawatts. The energy comes from newly constructed onshore turbines near Bremerhaven. From July, four wind turbines will be operating there just for Fraport´s needs. The contract is set initially for five years.

New baggage drop-off machines in Terminal 1

Lufthansa Group passengers in Frankfurt can now use 21 state-of-the-art check-in counters inside the Terminal 1. With the automated bag drop function passengers can check in their baggage themselves. The new check-in counters provide passengers with a comfortable, modern and efficient travel experience. The use of state-of-theart technology optimizes the processes during baggage check-in.

3. QUARTER
  • Sustained high passenger demand
  • Frankfurt at 82 percent of pre-crisis level
  • Thanks to the use of additional CT scanners improved waiting times for security
  • Antalya exceeds the 2019 level
Half-time for airport expansion in Antalya

Together with the joint venture partner TAV, Fraport is expanding the terminal areas at Antalya Airport with the long-term goal to double capacity in the long term. In addition the apron areas are being expanded and new parking spaces for several thousand vehicles are created. At the beginning of 2025, Fraport will take the first construction phase into operation.

4. QUARTER
  • Traffic volume in Frankfurt at around 14 million and thus only ten percent below pre-crisis level
  • International airports partly above pre-crisis level
Fraport USA wins center management concessions for two additional airports

Fraport USA has successfully competed for the center management concessions at Washington Dulles International Airport (IAD) and Ronald Reagan Washington National Airport (DCA). The contract begins in January 2024 and has a term of ten years. On behalf of the local airport authority MWAA, Fraport USA will manage the retail and restaurant space at the two Washington airports and develop them further.

Annual Report 2023 (PDF) DOWNLOAD PDF, 13.16 MB