Business Outlook

Forecasted Situation of the Group for 2025

Development of Structure

At the time of preparing the Outlook Report, the Executive Board was not aware of any major measures or effects that could have a substantial impact on the structure of the Group and the asset, financial, and earnings position. With the disposal of its shares in Delhi Airport, Fraport is ending its activities in India, this has no substantial impact on the Group structure in the forecast period.

Development of Competitive Position and Future Markets

Fraport is continuously developing its business activities and Group sites as part of the strategic objective “Growth in Frankfurt and internationally,” (see also the “Strategy” chapter). In this context, the inauguration of new terminal capacities at the sites in Lima and Antalya is planned in 2025, which will strengthen the competitive position of the airports in the long term. In connection with the award of the concession to operate Kalamata Airport in Greece, the Executive Board expects, subject to pending approvals, to sign the contract in 2025 with a possible start of the concession at the end of 2025.

Fraport continues its aim to market its airport expertise around the world and participate in the appeal of new markets. Fraport will assess whether to participate in international tenders when appropriate opportunities arise.

Development of the Strategy and Control System

Following the presentation of the new strategy and the correspondingly revised control system in the 2024 reporting year, the Executive Board was not aware of any major measures or effects that will have a substantial impact on the Group’s strategy or control system in 2025 at the time of preparing the Outlook Report. The strategic focus of finance management is also expected to remain unchanged.

Forecasted Economic Environment 2025

Development of the Macroeconomic Conditions

The global economic outlook for 2025 remains subdued given the many uncertainties that exist. It is expected that global growth will be below average compared to the long-term average. The International Monetary Fund forecasts global growth of approximately 3.3% for the current year. World trade is expected to reach 3.2%.

The US economy is expected to grow by 2.7%, according to the IMF. Growth rates in emerging markets are predicted to be higher than the values in industrialized countries, though projected trends within this group vary. For the Chinese economy, economic momentum is expected to continue to slow compared to pre-coronavirus levels with growth of 4.6%. The outlook for development in the euro area is 1.0%. The German economy is expected to continue to develop below the European average, with a slight increase of 0.3%.

The following GDP trends are forecasted in 2025 for countries with Group sites: USA 2.7%, Slovenia 2.6%, Brazil 2.2%, Peru 2.6%, Greece 2.0%, Bulgaria 2.5%, Türkiye 2.7%.

Source: IMF (October 2024, January 2025), Deutsche Bank Research (December 2024), Deka Bank (December 2024), Ifo Institute for Economic Research (December 2024), German Federal Statistical Office (January 2025).

Development of the Legal Environment

At the time the Outlook Report was prepared, the Executive Board saw no changes in the legal environment in the 2025 fiscal year that could have substantial effects on the Fraport Group.

Development of the Industry-Specific Conditions

Based on the expected development of economic conditions, and taking into account the financial situation of the airlines, the International Air Transport Association (IATA) anticipates global passenger growth of 8.0% in 2025 compared to 2024, based on revenue passenger kilometers (RPK). Global air traffic would thus exceed the pre-crisis figures of 2019 by around 13%. At the regional level, IATA assumes the following recovery rates compared to the pre-crisis year based on RPKs:

The Airports Council International (ACI) also expects further growth in passenger traffic in Europe in 2025 with an increase of 6% compared to pre-crisis levels. The International Air Transport Association (IATA) and Tourism Economics expect passenger numbers to be 94% of the 2019 level for air traffic demand to and from Germany, i.e. O&D demand. Aviation associations primarily attribute the below-average recovery rate to high site costs in Germany.

Source: IATA Global Outlook for Air Transport (December 2024), ACI European Airport Traffic Forecast Scenarios (May 2024), IATA & Tourism Economics Air Passenger Forecast (December 2024), ADV press release (December 13, 2024), BDL publication on site costs

Forecasted Business Development for 2025

Taking into account the industry-specific conditions, the Executive Board expects traffic development at the Group airports to be positive overall in 2025, but with substantial variation among the sites. At the Frankfurt site, passenger development will continue to be restrained by the limited capacity of Deutsche Lufthansa due to the maintenance of short-haul aircraft and ongoing delivery delays affecting long-haul aircraft. Despite the capacity bottlenecks affecting the main customer, the Executive Board expects a further recovery in traffic at the Frankfurt site. Following passenger numbers of around 61.6 million in the 2024 fiscal year, the Executive Board expects a moderate increase in passenger numbers for the 2025 fiscal year up to a maximum of 64 million. The traffic development will be mainly driven by an increase in tourist traffic within Europe and associated feeder traffic, especially outside the Lufthansa Group.

Positive traffic development is also expected at the international Group airports, as follows:

Passenger growth compared to the previous year is expected at Ljubljana Airport and at the Brazilian Group airports in Fortaleza and Porto Alegre. However, the sites are expected to remain below the pre-crisis level of the 2019 fiscal year. The growth at Porto Alegre Airport will also include considerable recovery effects after the airport was closed for several months in 2024. At the 14 Greek regional airports, the passenger numbers are expected to be at or slightly above the high level of the previous year of 2024. In Varna and Burgas, as well as in Antalya and Lima, some substantial traffic increases are forecasted compared to the previous year.

Changes to the outlook could occur depending on geopolitical developments.

Forecasted Results of Operations for 2025

The forecasted Group-wide passenger growth will have a positive impact on revenue development in the 2025 fiscal year. Increases in charges at the sites in Frankfurt, Brazil, and Greece in particular will also boost revenue. By contrast, the gradual completion of construction activities in Lima will lead to a noticeable decline in revenue from the application of IFRIC 12. The cost of materials in connection with IFRIC 12 will also decrease. In addition to this effect, on the expense side, the Executive Board expects personnel expenses to rise – primarily due to expected increases in the collective bargaining agreement at the Frankfurt site. At the time the forecast was prepared, the relevant parties to the collective bargaining agreement for civil servants (TVöD) for the Frankfurt site were in negotiations, so there is uncertainty as to the level of increases in 2025. Rising concession charges at the Group companies Fraport Greece and Lima will lead to a further increase on the expense side. The largely earnings-neutral management of aviation security controls at the Frankfurt site will also have the effect of increasing revenue and expenses. In addition to the operating business development, exchange rate effects from the conversion of the functional currencies of Group companies in Lima, Fortaleza, and Porto Alegre as well as Fraport USA into the Group currency, the euro, may also have a positive or negative impact on the earnings contribution from Group companies.

Overall, the Executive Board expects a moderate increase in Group EBITDA in the 2025 fiscal year in the single-digit percentage range. Uncertainties result in particular from the forecasted traffic developments and the ongoing negotiations on the TVöD in Germany. Due to the absence of proceeds from the disposal of the shareholding in VVSS Limited Liability Company in St. Petersburg, the Group result is expected to be below the level of 2024. Adjusted for this effect, the Group result will be approximately at the previous year’s level. Negative effects arise from higher interest expenses, including the recognition of previously capitalized interest expenses in connection with the terminal construction in Lima, as well as higher depreciation and amortization. Depending on the increase in EBITDA, the Executive Board expects the Group result to be approximately at or slightly below the level of 2024. Any decrease will be due in particular to the absence of proceeds from the disposal of the shareholding in VVSS Limited Liability Company in St. Petersburg. The improvement in the operating result combined with an increase in assets will result in a ROFRA of around the 2024 level.

At Fraport AG level, the Executive Board expects an increase in net income in fiscal year 2025. Depending on traffic growth in Frankfurt and income from investments, net income is forecasted to reach up to €400 million.

Despite the forecasted development of the result, the Executive Board does not intend to propose the distribution of any dividends in the 2025 fiscal year on account of the continued high leverage.

Forecasted Segment Development for 2025

The planned traffic developments will have a positive impact on the revenue of the four Fraport segments. The gradual completion of construction activities in Lima, on the other hand, will lead to a noticeable decline in revenue from IFRIC 12 in the International Activities & Services segment. The Executive Board expects a slight increase in EBITDA in the Aviation segment in 2025. In the Retail & Real Estate segment, the Executive Board expects EBITDA to be around or slightly higher than the 2024 level. For the Ground Handling segment, the Executive Board forecasts EBITDA to improve compared to 2024 but remain negative. Despite higher variable concession charges and the loss of positive one-off effects, including in connection with the COVID-19-related compensation at Group company Fraport Greece, the Executive Board expects moderate EBITDA growth for the International Activities & Services segment.

Forecasted Asset and Financial Position for 2024

The Executive Board expects free cash flow to improve considerably in 2025 and to be in the mid-three-digit million euro range. The Executive Board’s forecast is based mainly on a substantial decrease in the volume of capital expenditure at the Frankfurt and Lima sites. Depending on the development of the operating result, free cash flow will be close to the break-even point. Despite planned cash flow used in the acquisition of the concession at Kalamata Airport in Greece, the Executive Board expects that net financial debt will remain almost unchanged from 2024 in 2025. Cash inflows and outflows in connection with dividends or capital increases of international Group companies, exchange rate effects, and changes to net current assets will also affect the development of net financial debt.

At Fraport AG level, the Executive Board expects free cash flow to also improve considerably but remain negative. Despite the negative free cash flow, the Executive Board expects liquidity to remain virtually unchanged, mainly due to extensive financing measures.

Medium-Term Outlook

Over the medium term, a positive development in the global economy and global passenger numbers is expected. A return to 2019 passenger levels in Frankfurt is forecasted for 2027/28. The Executive Board also forecasts positive traffic development for the Group airports outside Frankfurt.

The Executive Board expects rising passenger numbers to have a positive impact on the asset, financial, and earnings position of the Fraport Group and contribute to the further growth of Group EBITDA. The inauguration of the terminals in Frankfurt and Lima, on the other hand, will result in higher depreciation and amortization and a loss of the opportunity to capitalize corresponding interest expenses. Particularly as a result of these effects, the Executive Board expects there to be temporary pressure on the Group result in the first few years of the medium-term forecast period.

As a result of the inauguration of the terminals in Lima in 2025 and in Frankfurt in 2026 and the associated gradual reduction of the capital expenditure program, the Executive Board expects there to be a substantial recovery in the free cash flow in the medium term, with noticeably positive effects on the net financial debt from the 2026 fiscal year. On account of the decline in net financial debt and the expected improvement in the Group EBITDA, the ratio of net financial debt to EBITDA is expected to improve further, i.e. decrease, in the medium term.

Future capital expenditure obligations may be financed with debt instruments described above and cash flows from operations (see also the “Finance Management” and “Asset and Financial Position” chapters).

The Executive Board also aims to resume dividend payments in the forecast period. Before the start of the coronavirus pandemic, the dividend policy provided for a pay-out ratio of between 40% and 60% of the profit share of the shareholders of Fraport AG as well as a dividend that was at least stable compared to the previous year. The Executive Board plans to submit a dividend distribution proposal to the AGM again once the net financial debt to EBITDA ratio approaches the target value of five.

Frankfurt/Main, March 11, 2025

Fraport AG

Frankfurt Airport Services Worldwide

The Executive Board

Dr. Stefan Schulte, Anke Giesen, Julia Kranenberg, Dr. Pierre Dominique Prümm, Prof. Matthias Zieschang

Where the statements made in this document relate to the future rather than the past, they are based on a number of assumptions about future events and are subject to a number of uncertainties and other factors, many of which are beyond the control of Fraport AG Frankfurt Airport Services Worldwide and which could have the effect that the actual results will differ materially from these statements. These factors include, but are not limited to, the competitive environment in deregulated markets, regulatory changes, the success of business operations, and a substantial deterioration in the underlying economic conditions in the markets in which Fraport AG Frankfurt Airport Services Worldwide and its Group companies operate. Readers are cautioned not to rely to an inappropriately large extent on statements made about the future.