Chief Financial Officer, Fraport AG
Fraport-CFO Zieschang: „Terminal-Finanzierung auch über den Kapitalmarkt“
Eine 1,2 Milliarden-Akquisition in Griechenland, eine mögliche Übernahme brasilianischer Airports und jetzt auch noch der 3 Milliarden Euro schwere Bau des neuen Terminals am Frankfurter Flughafen: Der Flughafenbetreiber Fraport dreht ein großes Rad. Bald auch wieder am Kapitalmarkt? „Die Investitionen zahlen wir großteils aus dem Cashflow. Aber zur Refinanzierung auslaufender Kredite werden wir ziemlich wahrscheinlich an den Fremdkapitalmarkt gehen“, kündigte Fraport-CFO Matthias Zieschang bei FINANCE-TV an. Ob Bonds oder Schuldscheine anstehen, was für einen Kupon er bereit wäre zu zahlen un...
Transcript (18 segments)
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Moderator0:08
Welcome, dear viewers, to a new week on Vereinen TV. There is a lot happening at Frankfurt Airport and beyond. The airport operator Fraport is expanding at the location and beyond. A big deal in Greece is about to be closed. Who is visiting the company today in Dessau? Questions about how the airport is doing and the color attack. Welcome, Dr. Matthias Zieschang, Morgenpost.de. Greece, unusual timing, unusual country. You have now taken over the operation of 14 regional airports, a billion-euro deal. There is some resistance. Is the deal going as you expected when you signed it?
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Matthias Zieschang0:46
Yes, absolutely. It will be in the next few weeks that we will close the transactions. We will then pay the purchase price of 1.2 billion, we will receive the 14 airports in return, and we look forward to integrating this beautiful asset into our overall portfolio.
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Moderator1:03
The calculation seems a bit ambitious. You said 1.2 billion purchase price, then you have to invest over 30 million euros, then you will still pay 30 percent of the operating profit to the Greek state and public authorities. Heretically asked: Is anything left for Fraport? And if so, do you expect that to remain?
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Matthias Zieschang1:22
Otherwise we wouldn't have done it here. You have to see it this way: We start with about 25 million passengers at the 14 airports. We always said in the first year of the takeover, i.e., 2017, we will start with a good 100 million EBITDA. That is a substantial amount that will help us in the consolidated income statement. You just have to see the upside potential of these assets. We continue to expect positive growth rates in passenger numbers. We see very large potential, especially in the retail business, which was not strongly developed before. The combination of volume increases, higher retail revenues, and the corresponding fee increases in the concession agreement will together cause us to significantly raise EBITDA in the coming years.
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Moderator2:13
This is not your first major airport project in emerging markets. You are active in Turkey, Russia, Peru, Bulgaria. You have had very different experiences with political risks. Some airports good, some not so good. Now you are in Greece. There is a lot of resistance from unions, regional politicians, who want to drive you out. The managers see...
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Matthias Zieschang2:36
One has to communicate authentically and transparently, clearly set out what plans we have. Ultimately, we want to generate growth. Growth means better earning opportunities, better employment, overall prosperity for all. If you convey that appropriately, it is only a matter of time until it is received positively. Doubts? Regarding the problems in Antalya and St. Petersburg, due to known macroeconomic and political reasons, have the airports seen the worst? I think yes. In 2016, we had a passenger decline of about 30% in Antalya, unexpected due to geopolitical events. But especially after the lifting of the ban on direct flights from Russia to Turkey, we see a recovery. Russian tourists are coming back, so we are quite optimistic for 2017, expecting higher passenger numbers. Overall, we have a broad, diversified portfolio. So even if one airport develops poorly geopolitically or macroeconomically, we often have many assets that perform positively. This balancing mechanism in a broad portfolio works excellently.
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Moderator4:08
There is speculation in the press that you have set your sights on the largest airports in Brazil. What is there to it?
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Matthias Zieschang4:13
Not the largest ones. There are again four airports up for privatization: Salvador, Florianópolis, Porto Alegre and... We are interested in these airports. We think the timing in Brazil is good. The economic situation is not entirely favorable, which is good for purchase prices of infrastructure assets. So we imagine the timing could be very interesting, because prospectively Brazil is a great country with a large population and many natural resources. The long-term economic recovery is assured, and passenger numbers will rise significantly.
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Moderator4:56
Now the CFO comes into play. Many plans abroad. Now you are also investing three billion euros at Frankfurt in a new terminal. That costs a bit. How do you finance that?
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Matthias Zieschang5:08
We are known for very conservative financing. Our balance sheet ratios are always conservative, leverage is within a reasonable range. When we talk about acquisitions or investments on site, we always keep the balance sheet in mind. We ensure that our key figures are adhered to and that we do not get into critical territory. That will not be the case. All the things you mentioned—investments in Terminal 3, possible acquisitions outside Germany—fit into our balance sheet. We have reserved the corresponding amounts in our planning to avoid any stress situations.
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Moderator5:56
But now: An investment of three billion euros in the new terminal would roughly double your net debt, if you take last year's cash flow. That will significantly affect the ratio, especially since the cash flow from the terminal will only come from 2022/23 onwards.
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Matthias Zieschang6:11
We have to see it this way: These three billion will be invested over a relatively long period. At the same time, we have very high cash inflows that will increase year by year. We will certainly increase net debt a bit, but our earning capacity will also improve, keeping everything in a positive balance.
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Moderator6:34
Very surprising: You are one of the most solid issuers and infrastructure operators in Germany. Still, you are hardly present in the debt capital market. You have one large bond outstanding, but you still pay three to four percent interest on average. You can probably refinance at zero or minimal interest now. With regard to Terminal 3, do you have plans?
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Matthias Zieschang6:59
That's right. Looking at our consolidated balance sheet, our average interest burden is about three percent, reflecting past higher rates. If we went to the capital market now, our ten-year costs would be under one percent—extremely attractive. So through new borrowing or refinancing, our average interest burden will continue to fall. Currently we don't have a large capital need because our cash flow is strong, but we will substitute existing financings with new ones and return to the capital market. Whether that will be a large bond, we cannot say yet. We have had very positive experiences with Schuldschein loans, which we frequently bring to market, are well received by investors, and generate excellent conditions.
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Moderator8:05
On one street come is now also one or the other investor friend. Yes, the markets are dry. We get constant inquiries: 'Do you want to come?' So there is an enormous investor appetite for Fraport bonds at the federal level. If we come or will come, demand will be correspondingly high, which benefits us.
Then we come to the conclusion with the three questions from 5/1 TV. With a very short answer please, yes or no. The first question: Are the construction costs for Terminal 3 of 2.5 to 3 billion euros planned with a financial buffer? They are of course planned with a financial buffer. The second question: Will Fraport enter into a new airport stake abroad this year? That is my hope and effusively, money relatively high. And the third question: Beyond Terminal 3, are there any other major investments planned at Frankfurt Airport?
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Matthias Zieschang8:56
No, for the foreseeable future this is the largest investment we will make.
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Moderator9:02
Then it may be the last opportunity for investors to access your bond market a bit. We are curious what will happen. Thank you, Dr. Matthias Zieschang, for watching. Until next week, stay well. All the best, good times.