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Aéroports de Paris SA: Solid First Half Results, Driven by the Acceleration of the Traffic Recovery and Leading to the Improvement of Certain Financial Guidelines for 2022 and 2023
FINANCIAL RELEASE
July 28 , 2022
Aéroports de Paris SA
SOLID FIRST HALF RESULTS, DRIVEN BY TRAFFIC MOMENTUM
EBITDA MARGIN AND NET DEBT RATIO IMPROVED FOR 2022
Solid half-year results :
Unless otherwise indicated, changes are expressed in comparison with the results for the 1 half of 2021.
Key figures for the 1 half of the year are presented in a table on page 2 of this financial release.
Groupe ADP's 2022 traffic assumptions :
Improv e ment of certain 2022 and 2023 financial guidances :
Deployment of the 2025 Pioneers roadmap:
Augustin de Romanet , Chairman and CEO of Groupe ADP , commented:
" Groupe ADP recorded a clear improvement in its performance in the 1 half of 2022 and returned to a positive net result, at €160 million. The Group's revenue doubled compared to the 1 half of 2021, driven in particular by the rebound in traffic at Paris
Aéro port , which reached 71.6% of the level for the same period in 2019. This recovery momentum in Paris is particularly strong and is close to the one recorded in our international airports. The EBITDA margin reached 35% of revenue, or 702 million euros. This performance has led us to raise the target range for EBITDA margin by 2 points to 32% to 37% of revenue in 2022. The debt ratio is now expected to be between 5.5 and 6.5 times
the EBITDA for the year 2022.
We are proud that the Groupe ADP's commitment to quality of service and hospitality has been recognized in the latest Skytrax rankings. In Paris, the successful combination of our retail and airport hospitality expertise is also reflected in a sales per passenger of €25.4. In a particularly demanding context, Groupe ADP teams, whom I would like to thank for their commitment, are fully mobilized to welcome passengers and serve the interests of all our stakeholders . "
The financial statements for the first half of 2022 were approved by the Board of Directors of Aéroports de Paris at its meeting of July 28, 2022. They have been subject to a limited review by the statutory auditors, and the limited review report is currently being issued.
Key figures – Half-year 2022
(1) Sales per passenger for activities in the restricted area: stores, bars & restaurants, currency exchange & tax-free offices, commercial lounges, VIP reception, advertising and other paid services in the restricted area.
(1) The accounts of the management company of Almaty airport have been integrated into TAV Airports' consolidated accounts from May 2021 onwards (on the acquisition of the management company of Almaty airport, see section 5.1.6 of the 2021 Universal Registration Document )
(2) Net financial debt at end of June compared with EBITDA over 12 last months.
Comments on latest events
Evolution of tra f fic
Groupe ADP total traffic is up by +134.4% compared to the fisrt half of 2021, to 118.2 million passengers, standing at 71.9% of the group traffic over the same period in 2019.
Traffic in Paris Aéroport is up by +249.2% compared to the 1st half of 2021, to 37.5 million passengers, at 71.6% of the traffic over the same period in 2019. Moreover, aircraft movements at Paris Aéroport are up by +122.7% compared to the first half of 2021.
During the last few days of June and the first few days of July, occasional industrial actions at the Paris hubs led to flight cancellations, mainly affecting domestic and short-haul flights. The impact of these cancellations on passenger traffic remained limited.
In the context created by Russia's invasion of Ukraine and the international sanctions imposed on Russia, the group is monitoring the situation to assess its short, medium and long-term consequences. In 2019, traffic with Ukraine and Russia amounted to 1.4% of Paris Aéroport's total traffic, as well as to 17.1% of TAV Airports' total traffic, at 27.9% of TAV Airports' international traffic.
In the first half of 2022, traffic at TAV Airports' Turkish airports is up +100.8% compared to 2021, representing 70.8% of 2019 traffic levels. Although traffic with Russia and Ukraine account for 36.3% and 5.6% of their respective 2019 levels, totaling 1.5 million passengers, the recovery at TAV Airports' Turkish airports is supported by other routes, notably traffic with the United Kingdom and Germany, which stand at 141.5% and 106.2% of their 2019 levels, totaling 4.4 million passengers.
In addition, at Almaty, in Kazakhstan, traffic is up +11.8% compared to the 1 half of the year, at 3.1 million passengers, or 109.4% of the traffic level in the same period in 2019. The recovery is also supported by the doubling of the number of cargo flights served, resulting from the Russian airspace overflight ban.
Based on the traffic recorded in the 1 half of the year, and as announced in the press release of July 18, 2022, the group has revised its traffic assumptions for 2022 as follows:
Evolution of commercial activities
As announced on February 16, 2022, the Group's new commercial strategy initiated with the 2025 Pioneers plan and the launch of the Extime brand have led to a change in the definition of the "Extime Paris Sales/PAX" operating indicator from 2022 onwards. Prior to this date, the definition was: revenue from airside shops divided by the number of departing passengers (sales/Pax) in Paris.
The Extime Paris sales/pax ratio now includes all activities in the airside area: Stores, bars & restaurants, currency exchange & tax-free offices, commercial lounges, VIP reception, advertising and other paid services in the restricted area.
Over the first half of 2022, Extime Paris sales/pax was €25.4, compared with €27.0 in the same period of 2021, a decrease of 5.9% reflecting the normalization of this ratio resulting from the recovery in traffic. Compared to the first half of 2019, Extime Paris sales/pax is up by 2.9 euros, or +12.9%, confirming the Group's belief in the effectiveness of its retail model.
Following a public consultation, Groupe ADP announced on July 8, 2022 that it had chosen Lagardère Travel Retail to become the future co-shareholder of Extime Duty Free Paris, which will operate the Duty Free & Retail activities for Paris Charles de Gaulle and Paris-Orly airports.
Extime Duty Free Paris will operate nearly 140 beauty, gastronomy, technical products and fashion outlets. It will be owned at 51% by Groupe ADP and at 49% by Lagardère Travel Retail, subject to the approval of the relevant competition authorities.
In addition, following a public consultation, Groupe ADP announced on July 28, 2022 that it had selected JC Decaux to become a co-partner in Extime Media, which will operate, as of January 1, 2023, the advertising activities at Paris-Charles de Gaulle, Paris-Orly and Paris-Le Bourget airports, as well as, in a second phase, at the airports of Antalya and Milas-Bodrum in Turkey.
Subject, where required, to the approval of the relevant competition authorities, Extime Media will be owned equally by Groupe ADP and JC Decaux.
Signing of a profit-sharing agreement for the employees of Aéroports de Paris SA
Signed on June 13, 2022 by the unanimous agreement of the representative trade unions, the profit-sharing agreement set up by the group for the employees of ADP SA covers a three-year period from 2022 to 2024. The payment of the profit-sharing bonus is conditional on the achievement of five objectives linked to the Pioneers 2025 strategic plan and is paid out in the year following the end of the financial year concerned.
As part of the 2025 Pioneers for Trust ESG strategy, this agreement marks Groupe ADP's desire to involve employees in achieving the company's strategic and transformation objectives and to benefit directly from the results obtained.
The objectives relate to improving economic performance (EBITDA/Group revenue ratio), quality of service (departing passenger satisfaction rating) and corporate social responsibility (number of days of civic engagement carried out by employees during their working hours, reduction of CO2 emissions, rate of completion of ethics and compliance training by employees). This collective performance incentive agreement is unprecedented, at ADP SA in the importance it gives to ESG criteria.
Two salary increase agreements signed for the employees of Aéroports de Paris SA
Following negotiations with the representative trade unions initiated on June 14, 2022, the Group announced to ADP SA employees on July 8, 2022 the signature of two agreements relating to immediate salary increases, effective as of July 1. These agreements provide for a return to the 2019 salary level for employees affected by the Employment Contract Adjustment Plan (PACT) and an additional general increase of 3% for all ADP SA employees.
The impact of these measures in the second half of 2022 is estimated at 13 million euros.
Groupe ADP 's commitment in the scientific validation process of its greenhouse gas emission reduction objectives
Since June 23, 2022, Groupe ADP has formally committed in the process of defining and validating its greenhouse gas emissions reduction targets (scopes 1, 2 and 3) through the SBTi (Science Based Target initiative), a joint program of the CDP (Carbon Disclosure Project), the United Nations Global Compact, the World Resources Institute (WRI) and the WWF
2022 Skytrax ranking
The latest World Airport Awards rankings, based on a worldwide passenger satisfaction survey conducted by the independent British organization Skytrax, were unveiled on June 23. Paris-Charles de Gaulle was voted "best European airport" and is now ranked 6th in the Top 100 best airports in the world (up 9 places). Paris-Orly moved up 27 places to 46th place worldwide. 3 airports belonging to the group's international network are rising again in the top 100 worldwide .
Presentation of Groupe ADP's 2022 half-year results
2022 half-year consolidated accounts
(1) The accounts of the management company of Almaty airport have been integrated into TAV Airports' consolidated accounts from May 2021 onwards (on the acquisition of the management company of Almaty airport, see section 5.1.6 of the 2021 Universal Registration Document).
Revenue
(1) The accounts of the management company of Almaty airport have been integrated into TAV Airports' consolidated accounts from May 2021 onwards (on the acquisition of the management company of Almaty airport, see section 5.1.6 of the 2021 Universal Registration Document).
Groupe ADP's consolidated revenue stood at 2,006 million euros over the 1 half of 2022, up by +102.7% compared to the same period in 2021, mainly due to the effect of the traffic recovery on:
The amount of inter-sector eliminations stood at 137 million over the 1st half of 2022, compared to 122 million over the 1 half of 2021.
EBITDA
(1) The accounts of the management company of Almaty airport have been integrated into TAV Airports' consolidated accounts from May 2021 onwards (on the acquisition of the management company of Almaty airport, see section 5.1.6 of the 2021 Universal Registration Document).
Group operating expenses stood at 1,367 million euros over the 1 half of 2022, up by 373 million d'euros (+37.6%). They are growing less rapidly than revenues (+102.7%), driving the EBITDA margin up by +19.4 points to 35.0% in the first half of 2022.
The distribution of the group's operating expenses was as follows:
Other income and expenses represented a net product of 64 million euros, down by 95 millions euros compared to the 1 half of 2021, of which mainly the unfavorable base effect related to the return to full ownership of certain buildings on the Paris platforms in the first half of 2021 for +117 million euro, partially offset by an increase in reversals of provisions, particularly in international operations
Over the 1 half of 2022, the group's consolidated EBITDA stood at 702 million euros, up by 547 million euros.
Net result attributable to the Group
(1) The accounts of the management company of Almaty airport have been integrated into TAV Airports' consolidated accounts from May 2021 onwards (on the acquisition of the management company of Almaty airport, see section 5.1.6 of the 2021 Universal Registration Document).
Operating income from ordinary activities stood at 340 million euros, up by +583 million euros, under the efect:
Operating income stood at 348 million euros, up by 583 million euros compared to the 1st half of 2021, due to the improvement of operating income.
Financial result stood at -121 million euros, down by 100 million euros, mainly due to the unfavorable base effect linked to the restructuration of TAV Tunisia's debt, for a net gain of 110 million euros, during the 1st half of 2022. Besides, the cost of gross debt has decreased by 38 million euros.
Income tax expense constituted a tax expense of 59 million euros over the 1 half of 2022, compared to a tax income of 69 million euros over the first half of 2021, due to the return to a positive income before tax.
The net income stood at 167 million euros over the 1 half of 2022, up by 355 million euros over the 1 half of 2021.
Taking into account all these items, the net income g roup share was up by 332 million euros compared to the 1 half of, at 160 million euros.
Cash and investments
As of June 30, 2022, the Groupe ADP had cash position of 1.8 billion euros. In the first half of 2022, cash and cash equivalents decreased by 532 million euros, mainly due to the repayment of a 400 million euros bond in February 2022 and the capital injection by TAV Airports into the new Antalya concession, in which it is a shareholder alongside Fraport, for 375 million euros.
In view of this available cash and its forecasts for the next 12 months, the group has liquidity that it considers satisfactory in the current exceptional sanitary and economic context and to meet its current needs and financial commitments.
Tangible and intangible investments stood at 270 million euros over the 1st half of 2022, compared to 215 million euros over the 1st half of 2021.
Financial debt
Groupe ADP's net financial debt stood at 8,309 million euros at June 30, 2022, compared with 8,012 million euros at December 31, 2021. As of June 30, 2022, the debt ratio stood at 6.4x EBITDA over a sliding 12-month period, compared with 10.7x EBITDA at the end of 2021.
Given the confidence of investors in the solidity of its financial model and with its long-term credit rating (A negative outlook by Standard and Poor's since March 25, 2020, confirmed on December 17, 2021), the Groupe ADP is taking care to ensure that, in the event of a significant deterioration in the economic and health context, it would be able to meet its commitments and have recourse to additional financing.
Analysis by segment
Aviation – Parisian platforms
Over the 1 half of 2022, revenue of avi ation segment , which relates solely to the airport activities carried out by Aéroports de Paris as operator of the Parisian platforms, was up by +99.2% at 741 million euros. As revenue from airport safety and security are determined by the partially fixed costs of these activities, revenues are growing at a lower rate than passenger traffic.
Revenue from airport fees (passenger fees, landing fees and aircraft parking fees) increased by +166.8%, to 434 million euros due to:
As a reminder, the average tariff increase, approved by the French Transport Regulation Authority (ART) for the 2022 tariff period, i.e. since April 1, 2022 are as follows: a +1.54% increase in passenger fee, a freeze in the unit rate of the parking fee and the landing fee and an average increase of +0.95% for ancillary fees with the exception of the PRM (Person with reduced mobility) fee which will increase by +10.0% on the Paris-Charles de Gaulle platform and +0.94% at Paris-Orly. For the Paris Le Bourget airport, the ART approved fee increases of +0.91% for landing fees and +19.9% for parking fees.
Revenue from ancillary fees was up by +160.3%, to 92 million euros, linked to the increase in passenger traffic.
Revenue from airport safety and security services was up by +25.8%, to 198 million euros.
Other income, mostly consisting in re-invoicing the French Air Navigation Services Division, leasing associated with the use of terminals and other work services made for third parties were stable at 16 million euros.
EBITDA was up by +294 million euros at 186 million euros due to the increase of revenue.
The operating income from ordinary activities was up by +292 million euros, to 7 million euros over the 1 half of 2022, due to the increase in EBITDA.
Retail and services – Parisian platforms
Over the 1 half of 2022, Retail and services segment revenue , which includes only Parisian activities, was up by +116.4%, to 625 million euros.
Revenue from retail activities consists in rents received from airside and landside shops, bars and restaurants, banking and foreign exchange activities, and car rental companies, as well as revenue from advertising.
Over the 1 half of 2022, revenue from retail activities was up by +219.1%, to 367 million euros, including Société de Distribution Aéroportuaire, up by +201.7%, at 254 million euros and Relay@ADP, up by +413.9%, at 39 million euros, due to the increase in traffic and the number of outlets opened compared to the first half of 2021.
Revenue from car parks was up by +115.3%, to 67 million euros.
Revenue from industrial services (supply of electricity and water) was up by +34.0%, to 91 million euros.
Rental revenues (leasing of spaces within terminals) were up by +17.8%, to 69 million euros.
Other revenues (primarily constituted of internal services) were down by 87.9%, to 32 million euros.
L'EBITDA of the segment was up by +224 million euros, to 250 million euros, due to higher revenues from commercial activities, notably Société de Distribution Aéroportuaire and Relay@ADP.
Operating income from ordinary activities was up by +232 million euros, to 183 million euros, due to the increase in EBITDA.
Real Estate - Parisian platforms
Over the 1 half of 2022, revenue from the Real Estate segment , which includes only Parisian activities stood at 156 million euros, stable compared to the 1 half of 2021.
Revenue from retail activities , realized with third parties, stood at 132 million euros, stable compared to the 1 half of 2021.
EBITDA of the segment stood at 91 million euros, down by 115 million euros, due to the unfavorable base effect related to the return to full ownership of some buildings on the Parisian platforms for 117 million euros over the 1 half of 2021, compared to 5 million in the first half of 2022.
Operating income from ordinary activities stood at 57 million euros, down by 121 million euros due to the decrease in EBITDA.
International and airport developments
(1) The accounts of the management company of Almaty airport have been integrated into TAV Airports' consolidated accounts from May 2021 onwards (on the acquisition of the management company of Almaty airport, see section 5.1.6 of the 2021 Universal Registration Document).
Over the 1 half of 2022, revenue from the International and airport developments segment stood at 538 million euros, up by +143,5% compared to the 1st half of 2021, mainly due to the increase in revenue for TAV Airports and AIG.
AIG's revenue was up by +119,9%, to 104 million euros, due in particular to the effect of the increase by +163,4% of traffic recorded in Amman on aeronautical fees for +43 million euros and commercial revenues at +11 million euros.
TAV Airports' revenue was up by +166.4%, at 410 million euros, Since May 1, 2021, it has included the revenues of Almaty airport in Kazakhstan. Excluding the integration of Almaty, TAV Airports' revenues would have increased by 99.5% to 268 million euros due to:
EBITDA of the International and airport developments segment was up by +143 million euros, to 163 million euros.
TAV Airports' EBITDA was up by +107 million euros compared to the 1st half of 2021, to 127 million euros, linked to the increase in revenue, despite the increase in operating expenses of +150 million euros. Excluding the integration of Almaty, TAV Airports' EBITDA would be up by +69 million euros to 84 million euros.
AIG's EBITDA was up by up by +22 million euros compared to the 1st half of 2021, at 31 million euros, linked to the increase in revenue, despite the increase in operating expenses of +36 million euros, linked in particular to the increase in concession rent for +31 million euros concomitant with the recovery in traffic.
Operating income from ordinary activities of the segment stood at 90 million euros, up by +180 million euros, due to:
Hyperinflation in Turkey : In the context of very high inflation in Turkey, group entities whose functional currency is the Turkish lira are obliged to apply the provisions of IAS 29 "Financial Reporting in Hyperinflationary Economies" from February 2022 onwards, requiring the restatement of the financial statements to take account of changes in the general purchasing power of this currency. The limited effect on the Group's financial statements is described in note 2 of the consolidated financial statements.
Other activities
Over the 1st half of 2022, products from the other activities segment stood at 83 million euros, stable compared to the first half of 2021.
Hub One saw a slight increase in its revenue of +1 million euros, to 78 million euros.
EBITDA of the segment stood at 12 million euros, stable compared to the first half of 2021.
The operating income from ordinary activities of the segment stood at 4 million euros, stable compared to the first half of 2021.
Evolution of passenger traffic over the first half of 2022
Group traffi c
(1) Group traffic includes the traffic of Delhi International Airport Limited (DIAL), Hyderabad International Airport Limited (GHIAL), Mactan-Cebu International Airport and Almaty International Airport traffic as of January 1st, 2019. Following the non-renewal on December 31st, 2021, of the technical assistance contract (TSA) relating to Mauritius airport, group traffic no longer includes traffic of Mauritius airport.
(2) Turkey ( Milas -Bodrum & Gazipaşa ), Croatia (Zagreb), Saudi Arabia ( Medinah ), Tunisia (Monastir &
Enfidha ), Georgia (Tbilisi & Batumi), and North Macedonia (Skopje & Ohrid ).
Over the 1st half of 2022, Paris Aéroport passenger traffic was up by +249.2% with a total of 37.5 million passengers, at 71.6% of the level over the same period in 2019.
Geographical breakdown of traffic in Paris is as follows:
The number of connecting passengers was up by +172.9%. The connecting rate stood at 21.4%, down by 6.1 points compared to 2021. The aircraft load factor was up by +19.8 points, to 78.4%.
The number of aircraft movements at Paris Aéroport was up +122.7% to 272,651 movements, including 184,108 movements at Paris Charles de Gaulle, up 114.0%, to 76.4% of the first half of 2019 level, and 88,543 movements at Paris-Orly, up 143.5%, to 80.0% of the first half of 2019 level.
Traffic assumptions, forecasts and targets 2022-2025
Traffic assumptions, forecasts and targets 2022-2025
These forecasts are based on the assumption of no new restrictions or airport closures due to the health crisis, of a stable business model in Paris, and of no abnormally high volatility in exchange rates and inflation rates. Any negative change in relation to these assumptions could have an adverse effect on traffic volumes and the 2025 financial indicators. They are also based on the consolidation scope at the end of 2021, with no assumption of developments up to 2025.
Based on the traffic recorded in the 1 half of the year, and as announced in the press release of July 18, 2022,
the group has revised its assumptions for 2022 as follows
Accordingly, and in light of the results recorded in the 1 half of 2022:
Agenda
Link to the webcast in English / Link to the webcast in French
Phone lines:
United Kingdo m : +44 (0) 33 0551 0200
France : +33 (0)1 70 37 71 66
United States : +1 212 999 6659
Access codes :
French : ADP FR
English : ADP ENG
A replay of the conference will be available on Groupe ADP (https://www.parisaeroport.fr/groupe/finances)
Disclaimer
This presentation does not constitute an offer to purchase financial securities within the United States or in any other country.
Forward-looking disclosures (including, if so, forecasts and objectives) are included in this press release. These forward-looking disclosures are based on data, assumptions and estimates deemed reasonable at the diffusion date of the present document but could be unprecise and are, either way, subject to risks. There are uncertainties about the realization of predicted events and the achievements of forecasted results. Detailed information about these potential risks and uncertainties that might trigger differences between considered results and obtained results are available in the registration document filed with the French financial markets authority on 14 April 2022 under D.22-0299, and the amendment filed with the AMF on July 1, 2022 under number 22-0299-A01. These documents are retrievable online on the AMF website www.amf-france.org or Aéroports de Paris website www.parisaeroports.fr.
Aéroports de Paris does not commit and shall not update forecasted information contained in the document to reflect facts and posterior circumstances to the presentation date.
Definitions
The definition and calculation of the alternative performance indicators (APIs) as well as the segmentation of the Group's activities presented in this press release are published in full in the Group's universal registration document. It is available on the Group's website: https://www.parisaeroport.fr/en/group/finance/amf-information
Investor Relations contacts: Cécile
Combeau , Eliott Roch - +33 1 74 25 31 33
Press contact: Lola Bourget , Head of Medias and Reputation Department +33 1 74 25 23 23
Groupe ADP develops and manages airports, including Paris-Charles de Gaulle, Paris-Orly and Paris-Le Bourget. In 2021, the group handled through its brand Paris Aéroport more than 41.9 million passengers and 2.1 million metric tons of freight and mail at Paris-Charles de Gaulle and Paris-Orly, and more than 118.1 million passengers in airports abroad. Boasting an exceptional geographic location and a major catchment area, the group is pursuing its strategy of adapting and modernizing its terminal facilities and upgrading quality of services; the group also intends to develop its retail and real estate businesses. In 2021, group revenue stood at €2,777 million and net income at -€248 million
Registered office: 1, rue de France, 93290 Tremblay-en-France. Aéroports de Paris is a public limited company (Société Anonyme) with share capital of €296,881,806. Registered in the Bobigny Trade and Company Register under no. 552 016 628.
groupeadp.f r
Appendix 1 – 2022 first half consolidated financial statements
Consolidated income statement of the 1 half of 2022
Consolidated balance sheet as of 30 June 2022
Consolidated statement of cash flows of the 1 half-year 2022
1 As announced in the June 2022 traffic release, published on July 18, 2022, the 2022 traffic assumptions have been revised upwards - see page 15 of this release
2 The positive financial impacts resulting from the increase in traffic assumptions for 2022 lead to an increase in the EBITDA margin target range for 2022 and 2023 - see page 15 of this release
3 Group traffic is accounted for on a like-for-like basis, restated for the following changes: the acquisitions of Delhi,
Hyderbad , Mactan Cebu and Almaty airports, and the non-renewal of the technical assistance contract (TSA) for Mauritius airport.
Including Almaty and Zagreb airports.
5 See the press release of June 22, 2022: "Skytrax 2022 ranking. Paris-Charles de Gaulle voted best airport in Europe, 6th in the world".
The 2022 financial forecasts are based on the following exchange rate assumptions: EUR/USD = 1.09, EUR/TRY = 17.03, EUR/JOD = 0.77 and EUR/INR = 83.65
Group traffic includes the traffic of Delhi International Airport Limited (DIAL), Hyderabad International Airport Limited (GHIAL), Mactan-Cebu International Airport and Almaty International Airport traffic as of January 1st, 2019.
Extime Sales/Pax: Sales per passenger in the airside activities: shops, bars & restaurants, foreign exchange & tax refund counters, commercial lounges, VIP reception,
advertising and other paid services in the airside area.
Attachment
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