Letter from the CEO
I am pleased to present our Annual Report for 2024.
Despite the headwinds, we successfully achieved our targets thanks to the hard work and dedication of our employees, and our key operating earnings indicator EBITDA reached a new record high at 1,302 million Euros. This result was driven not just by our home site in Frankfurt, but also our international portfolio.
Let’s take a more in-depth look back at 2024. Although we recorded strong passenger growth of over 10 percent in Frankfurt at the start of the year, the recovery momentum weakened considerably over the course of the year. On average for the year, growth was 3.7 percent. This development can be attributed in particular to the high state-regulated site costs in Germany – namely: air traffic tax. Delays in the delivery of aircraft and ongoing geopolitical crises, such as the Russian war of aggression against Ukraine and the Middle East conflict, also played a significant role.
Fortunately, it was largely a different picture at our international Group airports, with very dynamic growth rates. The Group companies in Greece, Lima, and Antalya performed particularly strongly. This also resulted in our international airport portfolio as a whole exceeding the record passenger level of the pre-crisis year 2019. A great success for the local teams, which we will continue to build on.
2024 was a successful year for our major expansion projects: We have made great progress and achieved important milestones. The second of three piers at the new Terminal 3 has already been officially approved at the Frankfurt site, and a large part of the work on the terminals in Lima and Antalya has also been completed. However, we were affected by the severe flooding in southern Brazil in May 2024, which caused human suffering and forced our Porto Alegre Airport to close with severe damage to large parts of the infrastructure. Despite this setback, the airport reopened in October for domestic flights and in December for international flights. It would not have been possible to get the airport running again so quickly without the support of everyone who helped out, including the entire airport team and the local authorities.
We have also resolutely pressed ahead with our sustainability initiatives and have started installing the 2.8-kilometer photovoltaic system running along Runway West in Frankfurt. By the end of 2024, we had already completed 12,000 modules with an output of 5.5 MW. With our new strategy “Fraport.2030,” which we will discuss in more detail in the management report, we are continuing to keep a firm eye on measures in the area of sustainability.
In addition to operational and financial targets, Fraport.2030 also contains two key sustainability goals, namely “top employer” and “growth and sustainability,” with climate protection forming a core component of our sustainability strategy. We expanded our previous target in 2024: The Fraport Group is committed to achieving net zero in Scopes 1 and 2 at all fully consolidated sites by 2045. From now on, this includes not just CO2, but all greenhouse gases relevant to the climate. This new target is in line with the new European Corporate Sustainability Reporting Directive (CSRD).
In terms of operations, shortly before the end of the year we concluded negotiations with our airline customers in Frankfurt regarding a multi-year contract for the development of airport charges. I would like to take this opportunity to thank our customers for their trusting cooperation. Under the new agreement, the charges relevant to us in the Aviation segment will increase by a total of approximately 17 percent or, on average, by around 4 percent per year over the next four years. This will provide us and the airlines with planning security for the coming years.
At this point, I would like to take a look ahead with you to what awaits us in 2025 and beyond. With our central location in Germany and Europe, our strong position in the cargo business, the effective hub product, and the expansion of capacity through the construction of Terminal 3, we are in an excellent position from a competitive perspective – despite the challenging regulatory requirements in Germany. Frankfurt will continue to be Germany’s gateway to the world and one of the world’s most important aviation hubs; we are committed to ensuring this remains the case. With our international diversification, we are well positioned as a Group beyond the borders of Frankfurt. Once the major construction projects have been completed, the global Group airports will offer us growth potential for years to come. In the meantime, approximately half of our net result is already generated by activities outside Frankfurt.
Some very important milestones lie ahead in 2025. Most importantly, we will bring our major expansion projects over the finish line, with both the new midfield terminal in Lima and the creation of additional capacity in Antalya set for completion. This will be followed by the completion of construction on our major project in Frankfurt, keeping us on track to bring Terminal 3 into operation after Easter 2026.
By contrast, we are expecting to see only moderate traffic growth in Frankfurt this year due to the continued delays in delivery from aircraft manufacturers, which are particularly affecting our main customer, Lufthansa. That is why we are also focusing on working even more efficiently, driving digitalization forward, and ultimately increasing productivity and cutting costs. This is the only way to ensure financial growth and competitiveness in the long term.
Our expectations for 2025 show that we are on the right track. In terms of EBITDA, we expect moderate growth in the single-digit percentage range. With rising interest costs, higher depreciation and amortization and, in particular, the loss of the positive one-off income from the sale of the Group company in St. Petersburg, there will be a more moderate development in the Group result. Depending on the operating development, we expect this to be at the level of 2024 or below.There will be a significant improvement in our free cash flow in 2025 following the completion of a number of major capital expenditure projects. After years of negative cash flow – we are moving towards brek-even. We then expect to see a turnaround over the following years to reach a clearly positive free cash flow.
Due to the continuing high level of Group debt, the Supervisory Board and the Executive Board have again decided not to propose a dividend to the 2025 Annual General Meeting and to instead allocate the profit earmarked for distribution to revenue reserves, thus strengthening our base of shareholders’ equity.
Dear shareholders, after our successful in-person meeting last year, I am looking forward to welcoming you to our Annual General Meeting on May 27, 2025 at the Sheraton Hotel at Frankfurt Airport. You will receive an official invitation in April.
I would like to thank you for your confidence in us and I look forward to a successful future with you.
Sincerely yours,
Stefan Schulte