Flughafen Wien AG
VSE:FLU
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
47.2
55
|
| Price Target |
|
We'll email you a reminder when the closing price reaches EUR.
Choose the stock you wish to monitor with a price alert.
This alert will be permanently deleted.
You don't have any saved screeners yet
[Audio Gap]
[ Due ] today, a very positive set of results for 2024. So we saw a substantial growth in passenger numbers, lower energy costs and positive interest income, improving our financial results.
In terms of revenue, we saw 16.6% plus, and the additional revenue could also be passed through to EBITDA and net [ debt ]. So EBITDA margin was even slightly above the figures of Q1 of '23 and was at 37.8%. Financial results have been positive
[Audio Gap]
are aware that we have repaid our EIB loan last year. So the burden of interest is now removed, and we will see, also for the full year, a positive financial result.
Passenger numbers went up 13.8%, and we have to interpret all these figures against the fact that the first quarter '23 still was rather weak. So we see also a positive base effect. And we had this, the 29th of February, one additional day. That is also a part of the results.
For the full year outlook. We have slightly improved our financial guidance. And from today's perspective, we are optimistic to see turnover of EUR 1 billion or slightly above and EBITDA of more than EUR 400 million. And our net profit should decrease over EUR 220 million, and these figures are on the background that we expect a good level of traffic also in the summer month.
You have maybe seen the very aggressive situation between Austrian Airlines and the substantial and severe labor conflict there, including 36 hours of strike, but finally, a new collective agreement could be found. And the good side of it is that now for three years, there is an industrial peace obligation, so no actions allowed within this period. And I think the compromise that was reached is also financially viable for Austrian Airlines and is not destroying their business model as it was initially expected, unfortunately, due to the very, very high and unsound
[Audio Gap]
also from the labor side.
The airport itself has also successfully concluded the bargaining about a collective agreement starting from 1st of May of '24 until end of April '25. And we fortunately have no labor conflict at all, and it was cordially agreed to increase wages by 7%. And it is a positive signal, I think, for a very functioning social partnership within our company.
If you look at the earnings improvement and the financial results in detail, you see that our net profit for the period went up from EUR 25 million to EUR 37 million and that the net profit after noncontrolling interests was EUR 33.5 million compared with EUR 23 million last year. Financial results at EUR 3.8 million positive, and this will also be the case for the full year.
Our cash flow from operating activities ended up with EUR 68.2 million. That is slightly below last year's figures, and this -- the effect of the payout of the incentives for airlines and some of them have [undoubtedly ] been higher was -- also traffic growing at [indiscernible]. This also paid earlier compared to the first quarter in '23.
And if you look at our CapEx, you see that what was announced is now realized. So we have EUR 35 million in the first quarter, which is substantially higher than it was last year. Despite all that, we saw an increase in our net liquidity position to EUR 393 million and also a better equity. From the CapEx side, the main expense was due to the intensive construction phase now of our terminal project.
You are aware of our dividend proposal, and the AGM should follow this proposal beginning of June, so to distribute dividend of EUR 1.32 per share for '23. And if you look at our financial side, we can finance the CapEx out of our cash flow, and it will not be necessary to raise debt in the coming periods.
On [indiscernible], we received in advance also about the further development of personnel costs. Yes, we will see, on the expense side, a substantial plus in personnel expenses that is related: on one hand, to the collective agreements. We had two of them last year; and also of additional employees. So the number of employees is up at roughly 8.3% compared to the same period in 2023. And this is also an effect of additional traffic and higher passenger rates, and it'll lead finally for the full year to increase in personnel expenses of somewhere 13% to 15% for our company.
What is remarkable is that energy costs went down into the first quarter and the -- could profit also from our own production. And depreciation was more or less the same. Other operating expenses went up due to higher maintenance expenses. In the period of corona, we have saved money by reducing maintenance and now have to do additional work also throughout 2024, and this is reflected in the respective figures.
If we continue to our key projects, then we have to look at our Third Runway project, where the valuation of the project by our teams is underway. The realization decision and the expected [Audio Gap]
most likely in 2026. And it will depend on traffic development, passenger volumes, flight movements and also the expectable profitability how the decision will be made.
What is recently coming up is a decision of the Federal Administrative Court. We have received the permission by the authority to postpone the construction periods for phase 1 to the 30th of June of '33. Now the Federal Administrative [Technical Difficulty], from our perspective, unlawfully and reduced this date to 2030 is -- from our point of view, is clearly contradicting the existing legal framework of the respective law. We will appeal against this decision to the administrative court, and we don't see immediate effects of the decision for our procedure even if what I think is very, very unlikely the highest administrative court would accept the decision of the administrative court, we could opt for another prolongation. So the immediate effect of this decision is very limited.
The biggest project in realization is our terminal expansion project, and it is now -- should be under intense construction work. And it's on time and within budget and should be finalized in '27. Also, Enpulsion started operations at the airport. They are producing ion propulsion engines for satellites, and they started production right now. So they are producing one unit per day, and the plan is to triple production the next month and also their footprint on the airport.
And they are start now is -- company at the first European Space Agency Phi-Lab that is established on Vienna Airport. There will be 8 of them throughout Europe. The first now was established in Vienna on our airport, and it is financed by the federal country of Lower Austria and the federal government with EUR 12 million to support other companies in their start-up for space activities.
We have now received the license for an additional PV park with 10 megawatt peak for our airfield in Bad Vöslau. And we are finalizing another PV park on the Vienna Airport of 3 megawatt peak, and it will start production at just next week. We are also in the final phase of the construction of the fast electric charging station in our airport and should be operational end of June. And we are going to have the groundbreaking ceremony for our third hotel and finalized within the next 18 months.
So you see there are many growth projects underway, and things are progressing positively. And based on that, as already mentioned, we have slightly improved our financial guidance for to 2024 and, I repeat, with revenues at or above EUR 1 billion, EBITDA more than EUR 400 million, a group net profit, more than EUR 220 million and CapEx higher than EUR 200 million.
So that's from my side, and I hand over to [indiscernible].
Hi, good afternoon. I would like to continue with the traffic results. As Günther already reported, I think we had a strong first quarter in the group, driving our financial results, plus 13.8% Q1, plus 6.5% in April, especially in Malta, extremely strong growth in the first quarter, which will normalize now a bit over summer. Yes, but overall, I think we can be very happy with the results so far.
Obviously, in April, we felt some effects of the strike of Austrian Airlines and the staff meetings they had prior to that strike. Overall, even in our case, the damage was probably for the whole company, roughly EUR 2 million. And I think Austrian, we feel now, through May, still a bit of a negative impact on passenger numbers. Overall, they are still growing.
And what one should not forget, that we still have the war in Ukraine, so no passengers from Russia and Ukraine and Belarus, significant reduction in traffic from Tel Aviv, which, on its own, was, before the 7th of October, 2% of our overall passenger numbers. So I think even this tense geopolitical situation, I think we can be very happy with the traffic figures.
The Tel Aviv, which has an impact on Egypt and Oman as well, still overall, only minus 4.4% versus last year; market share of 7.1% to the Middle East. Far East is growing, although still on a relatively -- still quite behind 2019 figures. Western Europe, very strong, plus nearly 40%; Eastern Europe, plus 5.7%; North America, plus 14.5%. So I think, overall, still really good numbers.
Compared to 2019, I think that the biggest disappointment is in Germany, followed by Switzerland, both roughly 30% below 2019. So to look at it from the positive side, lots of room for growth in the future. Now Berlin has significantly more capacity because of Eurowings opening Berlin, but overall still quite reduced capacity and, therefore, demand from Germany.
Let's continue. I think what probably we jumped over was traffic development in April, and I did not mention cargo. Cargo is the positive surprise, I have to say, plus 15%. And no, this is not a mistake. Q1 and April had exactly the same growth rate, plus 15.6%. So that's really positive. I think what we see as well is that, to a certain extent, the ratio between passengers and flight movement is normalizing. If you look at April, plus 6% passenger growth, plus 6% flight movements. So I think we see that, in terms of similar factor, we probably reached a certain peak last year.
ANA looks good, up to 60 airlines with roughly 190 destinations in 67 countries; Austrian, 121 destinations, new: Boston, Bremen, Tiflis, 70 stationed aircraft; Ryanair, 79 destinations, 19 stationed aircraft; and Wizz Air, 28 destinations, 5 stationed aircraft. Wizz is obviously the most impacted from the engine troubles. So I would expect them to make up for that next year and in 2026. So I'm sure there will be some -- quite some growth from Wizz Air in the years to come. I think Ryanair, slow growth, but on a high basis. So I'm pretty happy with the development of our three biggest carriers here in Vienna. And as I said, Eurowings, additional 11 frequencies to Berlin; SunExpress growing; ANA is coming back; Hainan is coming back. So overall, slowly but surely East Asia is coming back as well.
We focus a lot on quality with an ongoing high punctuality. In January, February, we were the third most punctual European hub with more than 25 million passengers. I think that's really, really positive. We have, obviously, a lot of competition within the Lufthansa Group, so Brussels, Zurich, Frankfurt, Munich. And this year, so far, in every single week, Vienna was the most punctual airport. Austrian Airline is the most punctual airline of Lufthansa Group. So I think this is really, I think, proof of the high quality we deliver to our airline customers.
But not only for Austrian, as well for Ryanair, in February, we were the most punctual hub in the Ryanair network. So probably base would be a better name than hub. So I think the cooperation with Ryanair in this respect works very well as well.
We opened our VIP terminal in February, which came very nice. We got awarded by Priority Pass for the best Global Lounge of the Year. This was an award which really made us proud. Priority Pass is our biggest customer in our lounge, and probably everybody knows them. So they really have a global exposure. So we're very, very happy with this achievement.
Coming to our traffic forecast for 2024. We stick to our about 30 million. So you might ask yourself why didn't we change the passenger forecast but improved our guidance, our financial guidance. We still feel that we -- within our passenger guidance from January, as I said, in January, about 30 million to us means something between 29 million and 31 million passengers. From today's point of view, we are probably a bit closer to the 31 million than to the 29 million or significantly closer to the 31 million, so somewhere between 30 million and 31 million. But given the difficult geopolitical situation, I think it's too soon to really be overly optimistic. I think by mid-July -- in July, we will have a much, much better picture. And if there's any need to update our guidance regarding the passenger numbers, we will do that in our H1 session. But from today's point of view, we are still covered with about 30 million passengers.
Regarding seat capacity and bookings for summer, my best guess is that we are roughly 4%, 5% increase in seat capacity in the summer months. Bookings seem to be good. So what I've heard from our main customers, I think everybody so far seems to be happy with the bookings for summer, although obviously, they still have to come in. And the ticket price level is somewhat stagnating on a high level.
A few words regarding the segment results. A major driver of Q1 positive results was the Airport segment, from EUR 9.2 million EBIT to EUR 18.6 million EBIT in Q1. Passenger-related fees, very significant, increasing by 23%. Overall, I expect a net revenue per passenger for this year roughly around EUR 15.5. This is an increase of roughly 20% over 2022, if I'm not mistaken. Let me check that quickly. I'll check it out and let you know in a couple of minutes. Yes, it's over 22% in the last two years. So we had an increase of roughly 20% in net revenue in airport charges per passenger over 2022.
Regarding our charges, we go back to our old model, the price cap model in 2026. So in 2025, we will increase our airport charges according to inflation until the end of July. So we expect something around 4% airport charges increased by January 2025. And then in 2026, we will go back to the formula. It's difficult to judge today what that would mean, because obviously, it depends on the growth we will see until mid of 2025, plus the inflation until midst-2025. But my best guess would be that we will have to reduce our airport charges then by 3%, 4%, 4.5%. As I said, lots of question marks around that. But from today's perspective, I think this is -- I think this would be a sensible forecast.
Handling & Security Services had a result which was not as smooth as last year's results, we had a slightly negative EBIT, mainly due to the warm winter in ground handling. The weak operation and deicing is a very important factor in our results. But we will -- in both in security and ground handling, we will make up for that loss due to strong traffic in the quarters to come. So we expect to see a clear positive EBIT at the end of the year in this segment as well.
Coming to Retail & Properties. I think mainly parking and Center Management & Hospitality did very, very well. Center Management & Hospitality is 48% of the overall revenue in this segment; parking is 32 million (sic) [ 32% ]; rentals, 20%. Parking is extremely well. Rentals did well as well. So overall -- and Center Management result mainly due to the passenger increase, good results as well. So EBIT, EUR 16.2 million over EUR 14.6 million, slight decrease in the margin.
Overall, we saw a PRR in Center Management & Hospitality of 2.8% over last year. So as I said, the main driver here is other passenger numbers. We are opening now in summer, the extension of our duty-free shop in Terminal 2. So this should drive sales and revenues then in the second half of the year. And overall, I think as we said quite a couple of times already, the big game changer, mainly in shopping, will be -- but F&B as well, will be the South extension. One centralized, much bigger duty-free shop, lots of high-quality space for luxury travel and a significant increase in the F&B space. So I think this should then increase our revenues very significantly.
Yes. Slowly, but surely, Malta becomes an evermore important part of our results. EBIT plus 75%, EUR 10.8 million, Q1 last year was EUR 6.2 million, obviously, on the back of very significant passenger growth. I think apart from the excellent result, I think what was really relieving is that the Maltese government found solution for, yes, Malta, now KM/Malta, so a revamped new airline without this huge baggage they had to carry in the last few years. So we're very happy that there's a new home carrier. Ryanair, still growing despite the fact that they are already the biggest carrier, and Wizz Air, growing as well, roughly by 70%. So overall, I think, an excellent development.
Yes. That's it from my end, and now we are looking forward for our discussion.
[indiscernible] has been very fast. First hand is yours [indiscernible].
I'm just going to have one, and it's on the Third Runway. I mean, the implementation, that line has been extended until 2030. And as you have mentioned throughout the presentation, you're currently carrying out the valuation works. Therefore, would it be possible if you could provide us with the target date for the start of construction?
Unfortunately, not now because it's still major work to be done in regard of all the respective parts of the project. And I would assume as a best guess that we know more in 2026 or can even provide you then with the decisions how to move forward.
Vladimira, please go ahead.
Yes. In fact, my question also relates to the Third Runway project. So you say that you will appeal to the Supreme Court. Is there any timeframe for, first, placing your appeal, filing it and then for the answer? So when we will basically know if your appeal was rejected or if you would have been granted maybe prolongation?
Secondly, in case that you will go for the project, what are your criteria in terms of you are still referring to the traffic? So where do you see the threshold in the planning phase? What could be the number of takeoffs and landings or some other characteristics you are looking at? Where is the threshold to say, yes, we need a third runway, we go ahead.
And then regarding financing, you would then consider external financing most likely or what would be then the mix for financing?
And yes, in case Bratislava Airport would be ready, would it have effect on decision in this respect? So these are my questions related to the Third Runway.
If I may start, Günther, and then I would hand over. I would start with the last question. I think this is a very theoretical question because I'm in touch now with several Slovakian government on possible cooperations on a very low level to possible cooperation on a bigger scale. We are involved in Kosice Airport. We have a good relation with government. But my operation is that I think I don't see any cooperation, any meaningful cooperation with Bratislava Airport on the horizon, definitely not in -- with this government. But even with other governments, I think it would be a very difficult issue.
And regarding capacity, I think in the end, we'll have to have quite some discussions with our major customers. I think we have to understand their growth plans for the future. Obviously, the driver for a third runway would be the increase in runway capacity. We expect that because of runway, we would go up from 72 hourly maximum movements to somewhere around 95, probably a bit more. And -- but on the other hand, the ground operations are important as well. So again, we will use the next 12 months to very thoroughly go around all the operational and financial criteria, construction costs. And then, yes, we have to take all these elements in consideration, and then we will take a decision.
Yes. And in regard of the legal aspect, so for the appeal, there is a 6 weeks period, and it's not difficult to come up with our appeal within this period. And it is the case that not only we will appeal, but also the federal country of Lower Austria because they are the [indiscernible] authority, and it's their decision that was now challenged.
How long it will take the highest administrative court? I mean nobody can really give an accurate estimation about that. My best guess would be that we should expect the decision most likely within 12 months from now as it's a legal question and not -- so not a factual question. What cannot be ruled out is that it takes maybe substantially longer. This would be the case if the highest administrative court would opt to ask the European court for advise. I don't think that it is very likely that this happens, but it cannot be totally ruled out.
Why we are optimistic that the decision of the Federal Court -- Administrative Court should not prevail is that, since more than 20 years, it was decided as it was done by the federal government of Lower Austria. And it is, for the first time, a totally new approach to the legal position that now the Federal Administrative Court declared itself as eligible to decide the case and decided in some aspects of the case. And this would not only affect our project, but all projects that are under that procedure.
And so I would be also optimistic that even in the case that the highest administrative court would find some merit in the decision, that finally parliament might be in the position to pass new legislation to make it totally clear. Because if the decision of the Federal Administrative Court would prevail, it would mean that many, many projects that are very essential for energy transition, electricity lines, wind parks and all that would become a further very substantial hurdle. And that is totally against all the plans of the government and of all institutions that we have to accelerate the procedures and that we should reach decisions on the respective projects very quicker than it is the case now. So putting all that together, you will see that we are not very impressed by this decision.
Philip, you rank next.
I have only 2 short ones. First one, basically, is regarding passenger growth. I think Ryanair has, in the past week or 2, has announced that they see weaker, weaker pricing, I guess. And did you see any weakening trends as of recent as regards to demands of, yes, passengers at Airport Vienna? Or is this unchanged? So was there no real impact compared to what airlines saw such as Ryanair. This would be the first one.
I mean, we saw -- I mean, the first quarter was a sort of -- was above this year's average, obviously. So there was a kind of normalization effect. Load factor in the last few weeks was probably slightly weaker than it was last year. So we see a slight reduction, but on a very high labor. So obviously, we don't see the exact pricing. But overall, for summer, I would not see a huge -- I wouldn't see any reduction in demand. Probably in certain destinations, where there is a lot of competition, airlines have to reduce the prices a bit.
And the second one would be as regards to the cargo. How much would you say is really due to the disruption in the Middle East? And how much is much more permanent volume that you would see going through Vienna? If you could maybe dissect that a bit.
I mean, it's impossible to say, and to us, I don't think that, that cargo, in any way, that there is something like a long-term guarantee that the traffic is going through your airport or cargo traffic is coming at all. I think it's a mix of effects. I think it's, to a certain extent, obviously, the situation in the Middle East. I think it's, to a certain extent, Chinese low-cost parcel shops. It's the additional capacity on long haul. So I think -- to be honest, it's where with the trend as well. So I think overall, I think European airports see now some growth in cargo. But how sustainable this labor in the first quarter is, that's very difficult to charge. .
Thank you. Stella, please go ahead.
So I have 2 questions today, and the first one is about OpEx. I would like to ask management team, do you envisage this higher OpEx growth as we see a 49% growth in 2023 versus '22? And also for this quarter, we see again 29% growth for other operating expenses versus last year. And I wanted to ask, would you see this rather than a one-off case? Or do you see there will be a similar case going forward, especially on marketing costs and the maintaining cost and also the third-party costs?
Yes. It's a mixture. I mean, there are some one-offs and, as I said, maintenance projects that have been delayed throughout COVID. But on the other hand, when we see growing traffic, also marketing expenses will somehow breath in the same direction. There is not a strict one-to-one relation, but it has more or less the same tendency. And therefore, I would not foresee another steep increase, but also not a sharp decline. So it's somehow on the way to normalization.
That's very helpful. And on the second question, could you please give us an update on the negotiation with unions on the [indiscernible], ideally both for 2024 and also for 2025?
Sorry. I have not -- unfortunately, there was some...
Sorry. I was saying, for the second question, could you please give us an update on the negotiation with unions on the salary rates and ideally both for '24 and 25?
I mean, we already concluded our wage agreement for '24, '25. So it is 7% from the 1st of May '24, and the agreement is for 12 months. So the next negotiations will take place in April '25. And as always, they will be based on the inflation rate of the 12 month starting from 1st of April to 31st of March. So given the current tendencies, I would assume that inflation for this 12-month period, so first of April '24 to end of March '25, should stay somewhere around 3%, 3.5% as rates are going down now substantially and there are predictions from financial institutions that we will see maybe 2% or 2.5% at the end of the year and at the beginning of next year.
Henry, it took a bit longer today, but now it's your turn.
No problem. I have just one for Mr. Jager. It's regarding the still-below 2019 travel to Germany. Why is the -- why is it still lagging behind so much if you compare to other destinations? And I've seen that you also added Bremen, so my hometown, to the new Australian -- Austrian destinations, which is nice to know. And yes, I would just like to know, is there also upside to growth from Germany again? Or what is hindering the traffic to Germany to become -- or to grow again to prior-2019 levels?
I mean, I think the only [ juice ] is that we are not alone. I mean, Germany, overall, has a significant lower recovery rating in terms of air traffic than most other European countries. This is due to the absence of low-cost carriers in Germany or they've come back, just need a very, very small number. Essentially, I mean, higher taxes. Just now the ticket tax in Germany has been increased very significantly. And in our case, with -- it's the reduction in capacity. So with very few exemptions, we have essentially -- Lufthansa has monopoly of Germany. And I don't blame them, but the reality is they have to look after their results. So they optimize the [indiscernible]. And that means not a lot of capacity or less capacity than we had in 2019 and higher ticket prices, which means a lower recovery rate. Similar is the situation in Switzerland.
So yes, I think there is some room for growth in the future. And what -- obviously, you have to see as well is that the habit of people change. So I think there's significantly less business traffic between Austria and Germany because of things and other needs. And on the other hand, there is a certain number, probably, which is using now the train or the road instead of flying probably, to a certain extent, because of the high ticket prices on the other and probably because of -- due to reasons. But I think the mix of all these things together leads to a relatively low recovery rate.
Okay. And then one follow-up, if I may. What impact do you see from the European championship in football for the summer? Is it like very minor? Or does it have like some...
Minor, completely minor. The only impact is that if you want to fly to Berlin or Düsseldorf or wherever the Austrian team is playing, on that day, you need a fortune to buy ticket. But in terms of numbers, this doesn't have an impact. And we hosted in Austria in 2008 the European Cup, and this is -- the impact is minute. You can ignore events like that in all your calculations.
Thank you. Are there any further questions? No hand raised at the moment.
Okay. So thank you. Bye-bye.
Thank you.
Thank you for your questions, for the interest. Have a good day. Goodbye.