Fraport AG Frankfurt Airport Services Worldwide
XETRA:FRA
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Fraport AG Frankfurt Airport Services Worldwide
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Warm welcome from my side to Fraport's Analyst Call for the First Quarter 2023. I'm here in the room with our CFO, Matthias Zieschang, and he is ready to start the presentation.
Yes. Thank you, Christoph. Good afternoon, ladies and gentlemen, and also warm welcome from my side. to our presentation of the first quarter 2023.
Today, my first slide provides you an overview of our 4 highlights in the first months of the year. But before going into the presentation, let me say that we are well encouraged by the most recent business developments. We are clearly seeing that private travel is back on the 2019 level, not only in our international portfolio, as I will show you in a minute, but also in Frankfurt, and we also see this across our peer airports here in Europe. Having said this, we are still missing a certain share of corporate travelers in some international markets on our way to the full traffic recovery. We are, however, confident that this gap will be filled over time, and we also expect the continued traffic recovery to lead to financial growth for our group.
But now let's move on to our most recent development. On Slide 4 of our presentation, you see our latest capacity addition to the group airports, the second runway at Lima Airport. Following a construction time of roughly 2 years, our team in Peru has managed to commission the new runway in Lima on time and budget, a very good execution of our local management team. As a result of the commissioning, a clear bottleneck situation has been solved, and Lima Airport is now from, air side point of view, prepared for future growth and to welcome many more gas tourists and business travelers to Peru. Financially, there has been no cost overrun during the construction process due to the favorable framework conditions agreed in our EPC contract. Looking ahead, we are also convinced that the new terminal will be delivered on time and according to the budget. In this context, Lima Airport has also reached another important milestone in closing the new project finance in a total amount of USD 1.25 billion. Here, the first disbursement already took place end of March being back the bridge loan in the amount of roughly USD 400 million. Consequently, Lima Airport Partners had more than USD 800 million of unused project finance left. This amount will entirely expect the upcoming CapEx for the expansion. The U.S. dollar-based project finance has a term of 7 years and is agreed at a minimum fixed rate of 70%. On the back of the current interest rate levels, we are starting with an average interest rate of about 6%, which is very good for an international project finance in this size and duration, the moderate interest rate level also clearly shows the confidence of banks in our business case in Lima and our track record. An update on our current indebtedness and funding level overall, I will present you later on in my presentation.
Slide 5 provides you an overview of our current traffic performances at our international airports. As you are well aware, fiscal year 2022 marked a fantastic year for our investment in Fraport Greece from a traffic and from a financial point of view. Correspondingly, we will now receive the first distribution from Fraport Greece in the second quarter. As already mentioned in our full year presentation, this will be an amount of roughly EUR 250 million for 100% or about EUR 160 million for us based on our 65% shareholder. Also, the current traffic development is very encouraging. Based on preliminary figures, April exceeded the level of 2019 by about 13%, and now stands on a cumulated basis at 105% of 2019. The strong traffic momentum we are also seeing at Antalya Airport at 101% Antalya Airport exceeded the 2019 benchmark year during the first quarter. Also, April performed very strong and was entirely recovered compared to 2019. Here, the traffic performance resulted from continued demand from Western European countries, but also a strong share from Russian travelers. A very good start to the year was also recorded at our TwinStar airports in Bulgaria. While the absolute number of passengers handled was still very low, -- the reopening of a Ryanair Base at Burgas Airport is, however, a good sign that Bulgaria will regain attractivity from a touristic point of view. For Ljubljana, airport, the road to full traffic recovery will be a little bit longer. Following the insolvency of the national flag carrier, Adria Airways in September 2019, the gap hasn't been filled yet. Both the state of Slovenia and our local management team are working on solutions to bring back connectivity to the Capital Airport of Slovenia. Good progress as well we are seeing at Lima airport. Lima Airport is starting to catch up to 2019 levels due to an increased connectivity. We are also optimistic for the year ahead in Peru. Compared to Lima, our 2 Brazilian airports are recovering at a little bit slower rate. Here, it seems harder for midsized airports in Brazil to recover the entire pre-pandemic traffic. Thanks to reopen domestic and international routes, we remain nonetheless very optimistic for the remainder of the year. Overall, our group airports outside of Frankfurt are showing a good recovery rate of 89% in Q1 2023, respectively. For the rest of the year, we expect the international airports to continue their way to full recovery.
On Slide 6, we are moving on to our main airport in Frankfurt. Also, Frankfurt Airport is gradually getting closer to pre-COVID level. While the first quarter of fiscal year '23 showed a passenger recovery of about 77% or close to 80% when adjusting for the 2 days of strike April '23 showed a slightly better passenger recovery of about 80%. And as of today, we are at 82%. Here, no news are sometimes also good news. Despite the accelerated traffic momentum, operations turned out to be smooth without any major hiccups or delays. The strongest traffic recovery, we continue to see on routes to the Americas, Middle East and Africa. All these markets have meanwhile exceeded the level of 90% of 2019. European short-haul traffic is still impacted by the war in Ukraine, which leads to a drop in passenger numbers to and from Eastern Europe of about 45%. Southeast Europe, on the other side, developed fine and was back at 99% of 2019 or full recovery. It's encouraging as those figures are the traffic recovery in Frankfurt is still held back. The temporary reasons are the reduced rate of corporate travelers, low traffic to and from China, but also the temporary cap on our maximum movements per hour, which we implemented due to capacity shortages. While we are currently offering some 90 movements per hour at Frankfurt Airport, we expect to come back to our pre-COVID level of 104 slots per hour by the end of this summer season. Then we also expect the cap on routes to China to be lifted, which is imposed due to bilateral flight rights between the German state and China. Latest in the fourth quarter, we expect to see a much stronger traffic recovery to and from China.
Turning now the page to our financial development on Slide #7. Thanks to the traffic recovery but also price upward adjustments, we have meanwhile recovered about 80% of our pre-COVID EBITDA. In fact, only 2 years turned out to be stronger in terms of group's EBITDA in our history. As you will also see on my next slide, our international portfolio continues to see higher results than pre-corporate. At the same time, this means that Frankfurt Airport remains below this level. Part of the Frankfurt performance is linked to the fact that Q1 marks our low season quarter. During Q1, usually handle less than 20% of our full year traffic at Frankfurt. Consequently, our fixed costs are covered to a lower degree during the first quarter. Looking ahead, this should lead to a stronger traffic to EBITDA translation for Frankfurt in the next quarters. Bottom line, you still see the impacts of the pandemic and the negative free cash flow. Here, the higher net debt led to a more negative financial result when compared to 2019. Consequently, the gap to our pre-COVID group result still amounts to about EUR 61 million, while the GAAP to EBITDA is at about EUR 43 million.
Moving on to our segment reporting, starting as always with Aviation on Slide #8. In the first quarter of fiscal year 2023, airport charges recovered to a rate of about 92% of the pre-COVID levels. This number is clearly higher than the passenger recovery of about 77% and reflects pricing growth in the meantime. Here, we applied the new airport charges as of January 1 and are also seeing catch-up effects from the reduced number of incentives compared to the previous year. In light of the takeover of the security responsibilities in Frankfurt, revenues from security management grew by about EUR 11 million compared to our benchmark year 2019. Here, please bear in mind that the security management doesn't come with a margin. Having said this, the security transitioning also led to a higher cost and shifted staff costs into non-staff costs in the period under review. In addition to the higher revenues and OpEx from the security transition, the further reduction of our shareholding in [Indiscernible] and the fair value measurement of our remaining 49% stake led to a positive one-off effect in other operating income of about million. Thanks to the positive underlying business development and the one-off effect segment EBITDA reached the pre-COVID level and was clearly positive in the first quarter.
Coming to our retail and real estate segment on Slide 9. Segment revenues overall achieved 93% of the precrisis level. The strong recovery was especially due to real estate revenues, which were also driven by inflation-linked rent adjustment. Also parking revenues developed fine and achieved a recovery rate of around 91%, outperforming the Frankfurt passenger recovery. Here, our yield pricing system proves highly efficient. Over the past 2 years, we've successfully automated our system to incorporate real-time and predictive data to maximize the revenues depending on parking lots and time. With regards retail, due to the refurbishment of one of our most attractive duty-free shops in Terminal 1, Concourse B, and continued low advertisement revenues. The spend per passenger stood at EUR 3.30, and therefore, a touch below the level of 2019. Adjusting for the advertising effect, which is not linked to passenger spending behavior, the revenue streams from shopping and services on a stand-alone basis would have meant an increase of about 3% compared to Q1 2019 despite the before mentioned duty-free refurbishment. Regarding the advertisement. Here, we are confronted with 2 negative effects. On the one side, we still miss our Chinese passengers as a major target group. On the other side, reduced share of corporate travelers imposes a headwind for advertisement as well. Despite the near-term headwinds due to the anticipated recovery of those traffic streams, we continue to expect further progress on advertisement over the course of the year. Bottom line, we still experienced higher costs from energy, while the first quarter still compares with a lower inflation quarter in the previous year we expect to see some moderating trends in energy costs over the next months. Here, our current hedging rate stands at about 80%. Bearing the development of the first quarter and the current forward levels in mind, we expect energy costs to rise by about EUR 20 million this year. Despite the OpEx headwind, the Retail & Real Estate segment still yielded a highly attractive margin of about 73% in the first quarter.
Turning now the page to our Ground Handling segment on Slide #10. Segment revenues clearly increased to around 88% of the pre-COVID levels. This outperformance compared to the passenger recovery was again attributable to weight and movement related charges as well as price effect. As you are aware from previous presentations, we hired close to 1,000 temporary external workers to stabilize operations in Frankfurt. The higher cost from external staff again increased other OpEx in the period under review. Here, we expect to see positive base effects during the second and third quarter. On the other side, the new collective bargaining agreement for the public sector will impose further OpEx headwind. As a result of the increased cost, EBITDA was clearly negative at minus EUR 24 million in Q1 and even was below the previous year. For the remainder of the year, we remain nonetheless optimistic to achieve a financial improvement, a clear financial improvement versus fiscal year 2022.
Coming to our final segment, International Activities & Services on Slide 11. As you can see on the chart, our international operations continued their outperformance against 2019 benchmark here. Underlying revenues and EBITDA during the low season quarter stood above the precrisis level. Here, our business in North and South America, but also Fraport Greece and Twinstar Bulgaria achieved positive EBITDA momentum. Thanks to the EBITDA growth, the segment share and group EBITDA grew to a level of about 40%. And also, the EBITDA margin developed fine and achieved 34% on an underlying basis, so excluding IFRIC 12 revenues and cost of materials.
Following the segment update, let me take a closer look at our cash flow and indebtedness situation on Slide 12. Overall, the operating cash flow and capital expenditure developed in line with our expectations for Q1. reflecting the traffic recovery of the first quarter. Also, our operating cash flow clearly increased over the previous year. While in Q1 2022, the operating cash flow was only breakeven. The operating cash flow reached a clearly positive level in the period under review. Still at EUR 84 million, the overall share of the cash flow remained low from a full year perspective. On the other side, CapEx is largely un-impacted by the seasonality in traffic. At about EUR 100 million spending in Lima, EUR 140 million for Terminal 3 and EUR 59 million for other CapEx. Our spending showed a very linear performance compared to our full year guidance. Consequently, Q1 free cash flow turned out to be negative at about EUR 240 million and our group net debt increased to EUR 7.3 billion. Thanks to the increase in EBITDA, our net debt to last 12 months EBITDA ratio further improved to a level of 6.6x. This compares to a level of 9x a year ago of 6.9x at year-end 2022.
On my next slide, I would like to show you an update on our cash situation for the group. As described previously, we have meanwhile closed the project finance at Lima Airport and paid back the bridge loan. As a result, our available funds increased further by more than EUR 440 million despite a negative Q1 free cash flow of about EUR 240 million. The level of more than EUR 5 billion, we also expect to have reached the peak of the available funds and don't expect this number to increase meaningfully anymore. Still, we continue to work on refinance measures. As a result, we have just recently secured the prolongation of another EUR 450 million full [Indiscernible] or promissory note loan. This means that our maturity profile this year is reduced to a residual level of less than EUR 420 million, bearing our significant cash position in mind. We expect now to be sufficiently funded until fiscal year 2026 or on a group-wide basis.
On Slide 14, you see our group liquidity and repayment profile at the end of Q1. Here, we haven't reflected the before mentioned prolongation yet. At the same time, our average group interest rate grew slightly due to the new Lima project finance and higher interest rates for Frankfurt debt. On the other side, we are also seeing a positive development in our conservative financial asset management. Compared to year-end 2022, the higher interest rate level will increase our interest income.
Coming now to the last slide of my presentation, our outlook on Slide 15. On the back of the very broad guidance ranges, which we presented to you 2 months ago, there have been no changes in the meantime. While we see ourselves at about the midpoint in terms of Frankfurt passengers, we continue to expect to be in the upper half of the financial ranges.
So thank you, ladies and gentlemen, for your attention, and we can now open the Q&A session.
[Operator Instructions] And the first question is from the line of Elodie Rall with JPMorgan.
My first one is on the aviation business. I think excluding the one-off cost, the one-off income, EBITDA was around like EUR 20 million lower than 2019 level. And I think you have to pay full year results that you would expect EBITDA to actually come back to 2019 level for the division. So where do we stand now following Q1 results? Is this still something you can achieve? Or it has to include the positive one-off for that to be the case? So that's my first question. And my second question is on energy cost. So we're seeing some increase in energy costs in Q1. So can you give us the magnitude of these increases? What percentage of electricity cost do you have a hedge if you have hedged any, and how much does that represent out of your total cost base? And lastly, on staff costs. So you have achieved savings in labor expenses from your employee reduction program, but you still have more hiring to do in ground handling. So what is the expected step-up in labor expenses this year?
Yes. Thank you for your questions. Starting with the segment Aviation and your question, what will be the EBITDA outcome for the full year. So first of all, we are absolutely confident and optimistic to reach our guidance. And as I mentioned, as of today, we have the clear confidence to end up in the second, so in the upper half of the EBITDA range for the full group. Focusing on aviation. Just to remember, we had in 2019 this segment and EBITDA of as far as I remember, EUR 273 million. And including the one-off of EUR 22 million, I think we will end up at about EUR 300 million or even a little bit above EUR 300 million. So in the first quarter, yes, there was a positive impact of EUR 22 million, adjusted EUR 22 million less, but you also have to see that we are starting with a new security agreement in a way that at the end of the day, all the costs will be compensated and covered by the revenues. And we are starting with a system that we are collecting about EUR 10.70 per passenger. So the higher the passengers in the meantime, the higher the revenues. And on the other side, we have calculated cost levels for the rest of the year. So we have our preliminary calculation, we have to assume a certain number of total passengers for the full year, then we are calculating the cost items and then distributed by the expected number of passengers. We came to this number of EUR 7 -- EUR 10.17. This means, in the meantime, there could be and there will be a mismatch between us and the costs because passengers are higher or lower. And at the end of the day, it's nearly wash or even if there is a surplus or the deficit this will be compensated then end of December when we have the final numbers. To make the long story short, in the first quarter, there was a a deficit of EUR 5 million. So the cost level on the security side was EUR 5 million higher than the revenue side. And this will be balanced out in Q1, Q2 or Q3 nobody knows, but latest in Q4, there is a final compensation or a total adjustment of the situation. So with other words, EUR 22 million more from this one-off, EUR 5 million less from the security business during Q1. So energy cost, yes, we had last year as far as I remember, about million more, always compared to 2029. And for this year, first of all, we see in the market that maximum was reached and now more and more prices for energy are going down. Nevertheless, we see in total another increase of energy cost of about EUR 20 million in this year. But that's it. And then Along there's even a chance to have lower energy costs compared to this what we see in '22 and what we will see in '23. The hedge ratio at the moment is about 80%. And so the exposure is 20% of the total energy volumes. But again, in absolute numbers, we are talking about energy cost increase of EUR 20 million in this year. Third question was regarding staff. So now the tariff agreement is over. We think it's over, it's not finally signed, but let me say, general market expectation is that it is like it is. It's a very complex one because it's over 24 months. It consists one-off payments to employees in a very complex structure as well as sustainable elements. And since weeks, so to say, we are working working out, what does it mean for us. So we have -- in the meantime, we have finalized our calculations. And for the 3 domestic segments here in Frankfurt. So aviation, retail real estate as well as ground handling, we have made a calculation that the price effect including all tariff elements in 2023 is at a level of EUR 70 million. This is a huge increase. As you remember in the past, we had always EUR 25 million price increase. Now it's nearly 3x more, but it is like it is. And -- but this is -- everything is included already in our guidance because if you translate this in a relative increase. This means 8% to 9% expressed as a percentage, but we are very carefully saying as a percentage because, again, when I talk about EUR 70 million cost increase, then we have EUR 35 million thereof as a sustainable base effect and EUR 35 million is so-called inflation compensation one-offs paid to the employees. So for you, EUR 70 million personnel expense increased price driven in '23. So I hope I have covered all your questions.
The next question is from the line of Cristian Nedelcu with UBS.
The first one on retail spend per passenger, it was very helpful, the incremental color you offered on Q1, but could you tell us a bit your expectations for the remainder of the year? And where do you expect at the end of the year retail spend per pax to be versus 2022? The second question, could you discuss a bit more in color about the cost savings levels in Frankfurt at the end of this year versus 2019 levels, putting in balance all the moving parts and the wage agreement. So where do we expect the cost savings versus 2019 to be at the end of 2023. And if directionally, you could give us some color for 2024, at least for the wage agreement part of cost. And maybe the last one, if I may. I appreciate your statement on the guidance and your confidence in the upper half, I guess, versus 2, 3 months ago, traffic was probably slightly weaker than I was expecting, at least. I think the wage agreement was also slightly higher. The wage inflation agreed is slightly higher than I thought. I guess I'm trying to better understand, are there moving parts in there? Any positives in particular that you would flag over the last few months or going forward, that are offsetting maybe some of these incremental headwinds? Or was there a meaningful buffer in your guidance in the first place?
Thank you for your questions or a bunch of questions. Let's start with retail. As I mentioned, retail performance was relatively weak in Q1. I think the explanation is, first of all, refurbishment in some important shops, which is now over. So up from April. Everything is, let me say, is open. This is one element. The second element, which I mentioned is the relatively weak media business. But let's, first of all, come back to to retail and real estate. So not real estate, retail and services, we just to show you the numbers. We had in always with reference to Q1 2019. We had in 2019, shopping spent the tax of EUR 1.89. Now we ended up in Q1 2023 with EUR 1.67. So it's EUR 0.20 less, a little bit disappointing. On the other side, we saw in services, this is primarily food and beverage, an increase from EUR 0.86 in 2019 to EUR 1.17 in Q1 2023. So nearly EUR 0.30 more over compensation. So putting these elements together, to shopping and services spend per [ pax ], we had in 2019, EUR 2.76, and now we have EUR 2.84, so EUR 0.08 more. Nevertheless, retail was and is relatively weak. Again, one reason is media or advertising where we are lagging behind. But now looking forward, the question is what will happen up from now in Q1, Q3 and Q4. Here, we are much more optimistic why? Because one stumbling block on the road, of course, is the absence of Chinese passengers in Germany. And this also makes a difference to other airports. If you if you would be on the high street in Vienna or Paris or everywhere, you can see, again, a lot of Chinese with the big bags of Louis Vuitton on [Indiscernible] and all the Gucci stuff. If you go to Germany to the high streets in Berlin and Frankfurt as well as Munich, you don't see just a reduced number of Chinese. So there's a mismatch between Germany, recovery of Chinese in Germany compared to other countries in the Euro zone. And this has to do with the constrained slots between -- based on bilateral agreements between Germany and China. And to give you a quantitative impression, in Q1 of this year, the number of lives between Germany and China at a level of about 20% compared to 2019, 20%. And this was artificially done to, let me say, to protect to help competition or especially the situation of German airlines or one German airline. And -- but this is now changing. So up from April now, the bilateral flight numbers between China and Germany are lifted up to a range of 40% to 50%. So now it's in Q2 and Q3, we have twice as much capacity between the 2 countries as in Q1. So this will help us. And in Q4, the reopened flights will reach a level of more than 80%. So now we have a 2-step ramp up from a very low Q1 now to the reopening of the market. And this will bring us in the intake of Chinese and they have the deep pockets. And just by the Chinese, you will see an improvement of the retail business and the spend per [ pax ], and so the numbers will be better. Finally, what is our expectation we had in last year 2022, you know the numbers for the full year, EUR 3 spent per [ pax ], and our expectation is clearly an improvement in this year compared to 2022. So we are confident that up from now, we will see a good recovery. And again, the explanation between Paris and other cities with us in Germany has to do with the absence of Chinese people. And in Paris is, again, it's in the meantime, not totally full of Chinese, but you can see them on the street, while you don't see them here in the high streets in the German cities. So second is cost cost increase. I told you the effect in '22. So EUR 70 million price effect this is sustainable, 50% is one-off. So the starting base point for '24 is not 70%. It's just 35%, and then we have made the calculation for '24 based on the tariff agreement. So there will be then, of course, a sustainable price effect in of about EUR 70 million. So again, the sustainable effects are EUR 35 million in '23 and EUR 70 million in '24. On top comes one-off payments in '23 of EUR 35 million. In average, when you look at the final personnel expenses end of '24 and comparing this with the adjusted personnel based adjusted means adjusted by the carve-out of the FraSec business, which totally changed the absolute numbers. We have on an annual basis, a percentage increase in these 2 years between 8% and 9% per annum, which is significant and which is nearly 3x higher than this what we had in the past. On the other side, you know our clear strategy that we have to accept this high inflation situation now in the Eurozone in Germany in this business. And therefore, we are going to compensate this on the revenue side by higher fees. And we always said, looking forward into '24, the fee increase, which in the next couple of, I don't know which [Indiscernible] perhaps we are going to communicate. It will be an increase, which is linked to the inflation rate as we always said. So what do we have -- what was guidance? No.
Traffic.
Traffic. Yes, traffic. Upside, downside in our guidance. Again, we have a clear confidence to reach what we have promised. Of course, some items can be higher, can be lower. What are the ups or the downs or the chances and the risks in Frankfurt. As you mentioned, we said now in the middle of the range, this would translate into EUR 60 million, can be that at the end of the day, it's just 58%, nobody knows, this is possible. So there could be some downside in Frankfurt traffic wise. On the other side, that's the reason why we showed you the chart with the international activities when you look to Greece, when you look to Bulgaria. So there is a trend that, let me say, to summarize all these things that we see even more chances than risk in the international portfolio. So for the case that we do not meet the EUR 60 million, but perhaps EUR 58 million, we also see with a good probability passenger numbers in the international portfolio, which are higher than this what we included in our guidance. So it's an up and down at the end of the day, the positive and the negative things will compensate each other. That's the reason why the confidence is given. And the very expensive tariff agreement, which is really expensive was already known -- not known, but when you ask us some months ago, and there have been a lot of questions already months ago what do we expect -- we said, yes, it can be that the tariff agreement could be 8% to 9%. This is a coincidence that now the outcome is more or less exactly in line with this, what we expected months ago. So we have put all these already in our guidance calculation. So that from the -- of course, we hope perhaps some upside from the tariff agreement, but now it's not an upside, it's just a confirmation of this what we put in our calculation. So this is a long story. And to end the story. Again, we are confident to end up in the upper end of the EBITDA range, and I hope everything is now answered.
The next question is from the line of Marcin Wojtal with Bank of America.
My first question is on tariffs in Frankfurt for at 2024. Is there any update? Can you shed some color on your thinking? Do you think you will be able to maybe request an even higher tariff increase next year versus the current year? And my second question, if I may, on your Latin American assets, Brazil and Peru. At the moment, traffic is underperforming Europe in LatAm, could you explain why what types of traffic are proving slow to recover? And do you see the situation changing at some point. And maybe lastly, this new runway in Lima, is it actually some project that will be generating additional traffic and therefore, it's EBITDA accretive or it's actually generating initially mostly additional cost, and it could be a bit dilutive.
First question, tariffs. So based on the tariff agreement, which is now on the table. Again, it's not signed, but I think everybody, the unions as well as the government agreed for it includes and covers the year 2024. And as I mentioned, it's a 24-month tariff agreement, starting with the first of January this year, ending up 31st of December. Next year, again, very complex items. And as I told you, the outcome for us are EUR 70 million personnel cost increase in this year, 50% sustainable, 50% one-off. And in '24, we already know what will come because it's part of the tariff agreement. And again, this is another EUR 70 million, but sustainable in 2000 -- but sustainable means tariff effects which go into the tariff list of another EUR 70 million in '24.
Sorry. I think the question was more related to the charges.
Yes, to the charges. Again, in this year, it's -- we have now this 4.9% increase as of January 1 in this year. And in the next couple of weeks, you will hear what will come for 2024. And I mentioned the impact of the wage tariff agreement, 8% to 9%. And I'm not willing to give you now an exact number. But based on the philosophy that we are going and have to pass through these inflation-driven wage increases, this is determining, so to say, the level of the price in the fee increase in '24. So your fantasy is open. It will be not more than 10%. It will be a single-digit number, much higher than the 4.9%, which you saw and see in 2023. Regarding Latin America, it's twofold. First of all, if you look to Lima Airport, you know there have been some political hiccups with the President which is now put into prison. And now the situation is coming down. This means on the other side, especially international traffic is coming back. So the the trends, the very positive growth trend in Lima is [ unbroke ], and it was interrupted by the political disturbances, so to say, which are now going back on a normal base and already a very good recovery coming from the international traffic using Lima in Peru as a regional hub servicing for South American destinations. So very optimistic regarding Peru. And again, it has to do with the past not with the future. In Brazil, it's also -- we have the 2 airports, Porto Alegre and [ Fortaleza ]. Fortaleza is pure domestic airport. So we -- it's a domestic play, so to say. And nevertheless, in the meantime, the numbers are good. And in [ Fortaleza ], we also -- [ Fortaleza ] has some international exposure to tourists going to Fortaleza due to the beaches and surfing activities, et cetera. And here, we are now looking forward expecting also a good recovery and strong inflow of international tourists coming long haul to [ Fortaleza ]. So again, optimistic regarding Lima as well as for the 2 Brazilian airports, but due to different drivers of the optimism. And the Lima runway itself, so first of all, it was part of the concession agreement. So we have been since years, we have been forced to build a second one, but it's not just to the obligation of the concession agreement is also due to the to the expected traffic growth for the remaining time of our concession. So we need the second runway and the capacity to achieve these growth numbers, which are based on the correlation between GDP growth and passenger growth. So it's now opening the way for further growth at Lima Airport.
The next question is from the line Sathish Sivakumar with Citi.
I've got 2 questions here. So firstly, on the potential to ramp up the slot allocation from 90 to 104. How much of it is actually going to go to the Chinese carriers, say, rather than Lufthansa. So any split on that, how much of those slots will be more geared towards Chinese because we know that Lufthansa has capacity limitation in terms of ramp-up. So any color on that would be helpful. And also, what will be the cost impact as you ramp up this daily slot increase towards this somewhere? And the second one, just a follow-up on the tariffs. So obviously, for Frankfurt, you did mention that in the next couple of weeks, we should have an update what about trees? It's obviously -- it has an automatic pass-through with inflation linked, but where do you think that would pan out for '24?
First question, slot situation. So the constraint of 92 slots or movements per hour is an artificial constraint which we set, why? Because we had the problems with the ramp-up regarding ground handling. So our problem was that in the peak hours during last summer, so we had a full recovery in the peaks, while on the resource side, this means the number of employees and qualified employees in ground handling, we just had maximum 80% of the people. So with 80% of the staff, you cannot cover 100% of the traffic because there was a mismatch between peak hours and so to say, low utilization hours. This was our problem, the high volatility during the daily operation and to have more balanced operation during the day, we we fix this artificial constraint of 92 slots to avoid these over peaking during the day. So this was the reason why we brought down the capacity in peak times. Now we made very good progress in ground handling regarding resources also, which is much more important regarding the qualification of personnel. On the other side, also the airlines worked on their punctuality items. So on both sides, the homework was made. And today, I can say that since the last 4 weeks, we have a very stable operation thanks to ground handling improvement, but also thanks to all the efforts on the airline side. And this combination worked very well so that we are now also when we saw the the performance at the Easter holidays. So this was a very good performance, and this was a good test for the summer season. And this gives us the confidence that we are right on track. And that's also the reason why we -- now we are ramping up with the slots back to the old level of 104 slots, which we had in 2019. This has nothing to do with the situation of the Chinese plants. This is just and also an artificial cap, but set and fixed by the German government in combination with the Chinese government. So they reduced to have a parity between China inbound, outbound in Germany. They reduced the flights to about 20% of the former number of flights in 2019. And now step by step, these artificial constraint is lifted. Again, this has nothing to do with the 92 even today the Chinese could go back to the old level. This would not create a conflict between the current artificial 92 slots constraint. So these are 2 totally independent topics. And as I mentioned, we came from 20% flights in Q1 this year, China, Germany to 40% to 50% of the old flight level in Q2 and Q3. And the next big step take place in Q1 when we go up to 80%, 85% of the 2019 level. So this is a way, and based on the fact that the demand for Chinese inbound flight. So the passenger numbers are inbound driven and not outbound driven. We also have the clear expectation that when -- today, we see up from April, 40% to 50%, that the seat load factor will be good. And so we are more or less overnight, can welcome more Chinese, and this is good for the numbers in aviation, but it's even more important for the spend per pax in the retail business. Cost increase in combination with the slot increase, it's fixed cost business, so nothing will happen. This is without any additional cost. And the third question.
Greece inflation in the aviation...
Yes, we have -- in Greece, it's relatively in the fees. It's a simple mechanism. So in the concession agreement is fixed that -- we always have to take the official Greek inflation rate from the last year. And this inflation rate is multiplied with 0.9, and this is automatically up from the 1st of April of the following year, the fee increase for the 14 airports. So we had in -- for 2022 Greek inflation rate was about 9%, close to 9% x 0.9%. So that's also now from the 1st of April, so beginning with the second quarter, all the fees in Greece will be higher with 8%, so this is not in Q1. That's the reason why Q1 is a little bit underperforming and you will see now a strong Q1 Why? Because further ramp-up of passenger numbers as well as price increases. And in absolute, it's about parting passenger in Greece. We are talking now about EUR 20 fees per departing [Indiscernible]. So far, the answers.
The next question is from the line of Dario Maglione with BNB Paribas.
Three questions from me. The first one on staff expense for the 3 Frankfurt segments. How much will this cost increase in 2023 relative to last year. You mentioned the EUR 70 million increase in wage, also have more people you're hiring external staff and so on. So just if you will summarize in 1 number. Same question for other costs, excluding energy. And the third question is on employee, the number of employees in ground handling division in Q1. I think they went up by only 60 employees. But my understanding was that you plan to hire 700, 800 people more by the end of the year. So I'm just wondering why the hiring process is so slow in Q1, if there is a specific problem or not to be concerned.
Thanks for your questions. So first answer, what is the increase of personnel expenses. As I mentioned, in 2023, we have EUR 70 million price effect. And on top of this, we have the volume effect, and this is about EUR 30 million. So in total, personnel expenses will increase on EUR 100 million for the 3 segments, EUR 70 million price, EUR 30 million volume in the volume, you can translate in in minimum 500 FTEs, which will be net recruited in this year, primarily in ground handling. And this is directly the to spill over to your second question, why is the net effect that has been so slow in Q1. Are there problems with the recruitment? We have no problems with the recruitment. We are recruiting a lot of people, but at the same time we have a high fluctuation rate. So on the growth side, so to say, we have a lot of intake of people. But on the other side, we have a high fluctuation rate, and we have to work -- we have to continue with the recruitment, and we have to do or to trying to bring down retention management, et cetera, to bring down the fluctuation. That's the reason why the increase was relatively slow in Q1. And I cannot promise what will be the fluctuation rate up from Q2, but we are continuing on the recruiting side, and we have to work hard on the, let me say, with retention measures to bring down the fluctuation. So in other words, the target nevertheless, will be about 500 FTE to be on a level which is sufficient then to cover all these fully recovered traffic, what we expect in -- not in this year, but then also in 2024.
Maybe the follow-up, the same question on the cost increase for this time not for staff but for other costs excluding [Indiscernible].
Okay. The total OpEx -- again, in -- to sum up, personnel expenses EUR 100 million. In this year, EUR 70 million price, EUR 30 million volumes, then we have energy cost, as I mentioned, plus EUR 20 million. And we have other things on the material expense side, spare parts, all the stuff which we have on the material expense side, in total, about -- could be about EUR 40 million. So that we have a net saving. So we come -- just to summarize also the history of our cost reduction program we had in 2021. We had total OpEx savings of about EUR 400 million, primarily based of the personnel reduction then in last year, we ended up on an adjusted basis of EUR 200 million remaining cost savings always compared to 2019 and from these adjusted by the carve out of FraSec, of course, because this is spoiling the whole story. We have from the EUR 200 million cost savings as of 31st of December last year. Now we have minus EUR 100 million for personnel, EUR 70 million price, EUR 30 million more employees, minus EUR 20 million energy, minus EUR 40 million, all the other nitty gritty, material expenses. And if I make the math, then we have EUR 100 million, EUR 120 million. So the remaining cost reduction to 2019 is -- would be EUR 40 million -- about EUR 40 million. Of course, then we have the other thing. We have the carve out of FraSec, which has an impact on personnel costs, and we have an overcompensation by, so to say, taken in material expenses because all the security costs in the future are going through our P&L as material expenses on the other side in the P&L, you will see it 100% covered by revenue. That's the reason why the absolute numbers are now relatively difficult to compare.
Just to confirm this carve-out and change in accounting of the Security business net effect is only EUR 10 million additional OpEx like on a full year, or is it more?
No, no. The additional let me say, additional means that the reductions coming from the last year. So always compared to 2019 are significantly reduced. So when I have reduced savings, I have higher absolute cost items. And everything adjusted by the FraSec security carve-out. We had an absolute cost level again, starting in the beginning of this year, which has been EUR 200 million less adjusted compared to 2019. And from these EUR 200 million savings now we are going to lose EUR 100 million by increased personnel costs, EUR 70 million price, EUR 30 million more employees, another EUR 20 million coming from energy and another EUR 40 million -- about EUR 40 million coming from higher prices, inflation driven on the material expense side. Then we have a remaining cost reduction to 2019 on an adjusted basis of about EUR 40 million.
The next question is from the line of Graham Hunt with Jefferies.
Maybe just coming back to this EUR 70 million price effect in staff costs, especially given what you just said about net retention, do you think there's upside risk to that number if you're seeing further outflows, I suppose, of staff and are there other ways that you can improve retention, which aren't financial, let's say, what other levers are there at your disposal to help with that recruitment, which I guess ultimately underpins your capacity for the summer. And then second question, maybe just on an update on Terminal 3. Perhaps I missed it in the presentation remarks, but I didn't hear what's the latest on that project.
Regarding fluctuation rate, this is -- I think it's a phenomenon of the German labor market. So each and every company has the same problem. So fluctuation rates are going up. We have the strong pressure from wages, which has to do with, of course, with the inflation. It's primarily a driver and we have to live with this. So -- and to bring in more money, this is not the way how it would like to we have to, let me say, in the last 3 or 2.5 years. So the aviation industry suffered, of course, from the corona pandemic. And so the mood was difficult also all future options, future expectations have been very negative. And so in former times, it was very attractive to work for an airport as well as for an airline has changed totally during the pandemic. But in the meantime, we see really month by month, the attractivity of the aviation industry is coming back because pandemic is over and also people have a short memory. And so we see also a comeback of the attractivity of jobs in the airline industry as well as for airports. And that's the reason why, again, the recruitment is working, and we have to now have to focus on what can we do to bring down fluctuation rates. And also here, we are confident, and we are doing a lot of because now jobs are in the last 2 years, they have not been secured. Now we can say, look at the future, our growth rates are fine. So we are expanding and everything is going up. This gives confidence to the workers, to the employees, and these are very positive signals, and that's the reason why we expect that we can now follow our plan to ramp up the people to bring up the qualifications in ground handling. And again, in the last 4 weeks, the operation was very, very smooth, no complaints, no waiting times. And I think this is a very strong positive indication now for the summer season. and we are monitoring very closely the level of qualifications, what is changing month by month. And our efforts are there successfully. And again, we follow our plan. Our plan is working. Quality is back on track, and this gives us the confidence for the rest of the year. Terminal 3 is also in time on budget, no hiccups. You see that in Germany itself, driven by the strong increase of interest rates as a big problem in the construction industry. for big projects. There's more or less overnight, there's a stop of all new projects in Germany in housing, but all in other big investments. And so the market has totally changed. And so now the -- in the last 2, 3 years, we have been running after the construction companies asking them to work for us now the market changed totally, and companies now are asking for jobs, and this is good for the price level. So we do not see any longer a strong increase on the construction price side and also availability of material as well as personnel regarding the construction industry is back on track. And this also gives us the confidence that everything is running like planned. So we don't see any hiccups on the budget side as well as on the milestone side, looks good. Everybody who is time to visit us can see the site. We're making side to us. There's a lot of investors as well as analysts, and we are showing the progress which is planned in our plans. And here, I also received now the numbers personnel numbers in Q1. So we had -- we recruited just in Q1, nearly 1,000 people. But on the other side, we had fluctuation of more than 600. So this is defining then the net number. But you see the recruiting machine is working very well. And now we have to to bring up retention management on the same level to bring down the fluctuation numbers.
The next question is from the line of Manisha Barria with Society General.
So I will take a question one by one. So my first question is, just trying to understand what sort of financial returns do you seek when you do an international investment. So let's speak an example of Antalya, the new concession, so just wanted to understand like what in your excel seat, what sort of return, I mean, do you get the IRR on this project?
This is always relatively simple because when we look on IRR, we always -- our base is always WACC for Frankfurt. So the weighted average cost of capital, then of course, carved out the expected return on equity. And then of course, we have to put on top project risks including political risks. And of course, everybody knows, Turkey is not risk-free. This means that's not giving you the exact number, but the IRR is above 10%. It's in all our international activities, it's always a double-digit IRR number.
So just to clarify, this double-digit IRR is on Turkish cash flow or is on the euro cash flows. So this is the one and is all based on the euro cash flow gas, I guess.
Of course, it's our euro currency. Good question, good question. Thank you very much. Cannot calculating in Brazilian real or Turkish lira. Of course we have -- but it's, of course, at the end of the day, we are facing what comes over to us in euros. So the return is always return on invested -- our invested capital in euro terms based on a net tax base.
And this is...
After taxes.
And this is on the equity invested, not the total CapEx like that is debt finance. Just on the equity that Fraport put, you expect more double-digit IRR return on euro terms?
Exactly. Always -- what we invest is our equity and we always see IRRs calculated in return on equity based on after-tax basis in euro-denominated, double digit.
Perfect. And the second question I wanted to ask that is slightly more longer term rather than very short term is here. Is that if you see the ROFRA, the return on your assets in the regulated aviation business, I mean, I understand now with inflation, maybe a little bit impacted, but still much lower than the WACC that you present for your Frankfurt for the Germany, I mean, the WACC that is required back. So just trying to understand, can we go back to something like more than 7% pretax retail there in the division business, not now, but at some point, I mean, when things are more cooler, let's say, when the traffic is back, when the inflation will control or something like that at some point in the medium term.
Yes, sure. First of all, we have the -- we have always official WACC and officially means because the WACC has been approved by the regulator because it's also defining the maximum return in the Aviation segment. That's the reason because it's double and triple checked. And we had in 2021 and the WACC was 6.1%. And then we have the phenomenon that interest rates went up, beta factor went up equity-to-debt ratio changed so that in 2022, the WACC increased from 6.1% to 7.3%. Don't ask me what will be the WACC in the next couple of years. But having in mind that the interest rates for the indebtedness is even, let me say, on a higher level, perhaps increasing for the next couple of years on a relatively high level. So there is some impact to go for higher WACC in the next couple of years. Of course, we have to look then the impact of inflation of the whole WACC calculation. So with other words, the probability that the WACC numbers in the next 2, 3 years will be higher than in the past is relatively high. But I'm not -- I don't also have not the crystal ball. Yes.
And then the...
Of course, in aviation, the relatively return or the ROFRA in aviation was negatively impacted from pandemic. And now you see already last year improvement in this year, further improvement. And next year, there will be a very nice increase on the positive side. So we are going up step-by-step year-over-year to achieve the allowed return on assets.
But what I see, like if I do the historical, even if I go back 5, 7 years, 10 years, so it's rare that I mean, you reach the WACC that you present in the annual report, like it's never been the case like some point in the history, it was like, of course, you match the WACC. The ROFRA matched the WACC. But in general, like you never meet it. I mean, so what's the reason? I mean if it is allowed, everything is possible. So why it is lagging, I mean, year after year?
First of all, the WACC -- let me say, the return on asset depends on the development of EBITDA, which is linked to prices volumes. And now we see year-over-year we cannot, of course, theoretically, we could say, okay, we are increasing the fees and fully compensating the volume effect, but this is just a theoretical approach. So in reality, it must be step by step. You see a good volume increase, recovery of the pandemic, and you see price increases. Please go back, let me say, in the years before the pandemic. Nobody thought that we would bring through 4.3, 4.9% next year, a much higher number. So we, of course, reflected the pandemic as well as the inflation. But now we are we are coming with fee increases, which are much higher than ever thought, and we are continuing with them. And that's the reason why we are, again, confident in some years, don't ask me exactly in what year to also reach the constraint given by the official WACC.
The next question is from the line of Jose Arroyas with Santander.
Just a couple of basic ones. Both on cost since the salary agreement at the federal level has not been timed, I just wanted to clarify if the Q1 2023 expenses at Fraport reflect the higher salary areas that we will see or we refer need to retrospectively make an adjustment to reflect the outcome, that's question number one. And question number two, I am clear, Matthias, you have been very clear saying that salary increases will be plus 8% to plus 9% year-on-year in Q3. And did you say that there will be another plus 8% to plus 9% in 2024. Is that what to wanted to say?
Regarding the personnel cost increases. So the first payment will start of this agreement. If it is signed and everybody assumed that it will be signed from all the parties. First, payment will be in June. But in the meantime, we already paid higher. This is an internal agreement which we did with the unions. We're already now paying higher wages, which will be compensated against the outcome of this tariff agreement. So with -- it's a very complicated internal agreement which we have. So with other words, you already -- in these numbers, which are now on the table in Q1, you already see this high increase. So there is no step-up when the first payment kicked in because we have already anticipated this, which will be compensated against this was in the agreement. So there's a smooth continuous and sustainable personnel payment month by month and not that you have in your calculation to put in a huge step in some in the future. And what was second, what was tariff agreement?
8% to 9%, also 2024.
Yes, yes. And we are talking about '23 is already fixed. In '23, we realized a fee increase of 4.9% up from the first of January this year. This is gone. We're just talking about '24 on the labor side, on the labor I mean, is labor side is, as I said, 8% to 9%. And so this is, for us, we have -- in total, we have -- if you take the OpEx allocation, we have always about 70% of the OpEx at Frankfurt Airport is personnel cost and the remaining 30% is material expenses. So with other words, inflation is a key for us, but especially the wage increase because we are dominated by personnel costs, and this means the orientation. It's -- of course, it's the official inflation rate in Germany. But in our case, it's also more the focus on the impact coming from tariff increases. And again, 8% to 9%. And this is an indication also then for the expected fee increase in '24.
[Operator Instructions] The next question is from the line of Achal Kumar with HSBC.
Three from me, if I may. And kindly excuse me, if I'm repeating, because sort of my line was bad, and I could not hear many of the questions. So first of all, I just wanted to understand about about the tariff and the capacity. I mean Lufthansa has already started shifting capacity to Munich and those kind of things are happening. So I mean what are your views? What are your thoughts there? I mean, are you thinking about offering some discounts in order to get the capacity back, or how do you see that? And if that is the case, do you see a further risk to the capacity? That is my first question. Secondly, in terms of your retail spend per [ pax ], I mean, what is the reason of you underperforming in terms of retail spend per pax as compared to your peers. I mean most of the other airports, airport operators have reported strong retail spend per pax higher than pre-COVID, but in your case, it was still lower. So what is it that is driving, and what kind of upside or positive you see positive do you see from recovery from Asian recovery, Asian traffic recovery, which is still lagging, especially for European carriers, although Chinese have started flying much more. But so that is my second question. And finally, in terms of your balance sheet, so how -- what sort of plans do that to improve your balance sheet? I mean the leverage has further increased. Now are you sort of would you prefer for the balance sheet to improve gradually, automatically as the trading improves? Or do you have any specific plans to improve your balance sheet? That's my last question.
Yes. Thank you for the questions. Munich topic. So just to clarify the situation, Lufthansa is not shifting traffic from Frankfurt to Munich. If you go back in the last, you can say, since the pandemic, if you look, first of all, in the reduction of passengers as well as flights in Munich versus Frankfurt and now the recovery. You can see we have this data history, that the percentage reduction in Munich was always stronger than in Frankfurt. And when we are looking on the recovery rates, the recovery rates in Frankfurt have been better than in Munich. So based on all numbers, there is no shift from traffic from Frankfurt to Munich and the reason is relatively simple. Yes, the argument always saying that Munich is more expensive than Frankfurt and so far is correct that you have a difference regarding the passenger fees of about per passenger. If you can always bring the example, if you take an intercontinental aircraft, assuming passengers sitting inside the aircraft, having in mind that the fees per departing passenger is in average EUR 24, having a price difference of 10%, this means EUR 2, EUR 2.5 difference times 300 passengers. So the cost disadvantage for flight from Frankfurt to, for example, JFK versus Munich to JFKs, EUR 2 times 300, 400, So we are talking about EUR 600, EUR 800. Cost disadvantage of Frankfurt. On the other side, if you look on the revenue side, ticket prices are comparable. It's the same level in Munich as well as in Frankfurt. But the difference makes the belly. And the belly of long-haul aircraft in Frankfurt, the belly is full of luggage of the passengers, but the rest is filled up by cargo. In Munich, the belly is empty of cargo. And this means if you take an average flight from Frankfurt to the U.S., including the belly freight. You have proceeds of depending, of course, from the cargo fees, EUR 30,000, EUR 40,000, EUR 50,000 per flight. So the revenue advantage out of Frankfurt for each and every long-haul carrier, having in mind that you can fill up the value with cargo, we have EUR 30,000 to EUR 50,000 per flight revenue advantage, where there's a cost disadvantage of EUR 600 to EUR 800, that's the reason why it's so attractive to fly via Frankfurt, not from our destinations because we are multi-hub. We have a strong catchment area as well as the cargo hub functionality. So this is the big disadvantage. And often in the press, you can read, yes. The A380 is allocated to Munich. That's true. But we are talking about 6 A380s and former before corona, it had been 11 or 12. But why the A380 because it's relatively simple, it's a double-decker. And if you look in the belly, there's just a place for the luggage of the people. So with other words, the disadvantage of the A380, you cannot fill in cargo is not relevant when you bring the A380 to Munich because in Frankfurt, you cannot make additional money because in the valley, there's no space for tons of cargo. That's the reason why the A380 is in Munich because you don't have the cargo business and not in Frankfurt, where you need classical long-haul aircraft with a lot of belly capacity for the cargo business. So this is a whole story. And Frankfurt is a very attractive hub. And even in the pandemic, there was a proof if you look, there was a concentration of traffic at Frankfurt Airport. And if you compare the relatively number of Frankfurt and Munich, we can't see any shift from Frankfurt to Munich. So then spend per pax before you came into the conference call, we had an intensive discussion about the reasons to -- again, to summarize, the low performance was due to the fact that in the other European capitals, you have still a strong recovery of Chinese in Germany, not this has to do with the artificial constraint of slots in the moment or in Q1, we just had about 20% of the former Chinese flights while in other countries, it's already much more. And -- but now the good story is that up from April, we are going back from a 20% capacity level for China, Germany to 40% to 50% slot level. And in Q4, there is a further recovery of 80% to 85%, this means up from now, you will see more Chinese passengers in Germany in Frankfurt and these are the big spenders. And this is one reason or the main reason why the spend per [ pax ] will go up. Second, we had a refurbishment of a very important duty free shop as well as other ones. This is through now all the shops are back on track. And so this is also giving a tailwind. And the third topic is that in Q1, already -- also in the full last year 2022, the advertisement revenues have been relatively slow. And here with the -- in combination with the recovery of the business demand, there's more power for the companies to make -- to spend more money for advertisement inside Frankfurt terminal. So in other words, these are the reasons for for performance in Q1. And the reasons which will give us and gives us confidence that the situation will be better. And to that we in -- for the full year we expect a spend of tax, which is higher than the EUR 3.33, which you saw in last year. Balance sheet, yes. Are there special plans? No. The plan is to fulfill our financial targets, and this means to bring up the EBITDA year by year and is expressed in the guidance for this year and '24, which will be much higher EBITDA. On the other side, the the most important number is free cash flow, which is still negative due to the 2 expansion programs running in Germany for T3 and in Lima for second runway, which is over now and the new terminal. And here, the good story is that in beginning of '25, Lima is inaugurated, and in summer 26 Terminal 3 will be inaugurated, then we are over with these big cash burner, so to say, and then overnight or in 2 steps, CapEx will drop significantly on one side, and we have this linear and permanent EBITDA increase on the other side. So the free cash flow turns into the black numbers in '25. And so we have on 1 side, the reduction of the absolute indebtedness and on the other side, an ongoing EBITDA increase. So let me come back to our maximum 5x net debt-to-EBITDA ratio which is a key parameter expressing our financial equilibrium.
There are no further questions, and I hand back to Christoph Nanke for closing calls.
So thanks, everybody, for your good questions, for your attention and participation. If you have further question, please contact us in IR. So we wish you good rest of the day, and we stay in touch. Thank you.