CFO Zieschang: „Fraport wird eine Free-Cashflow-Maschine werden“

Yes, because we simply managed it well. The banks' leverage is textbook too high, but that's due to Corona and expansion. We communicated that accordingly, and the market accepts it. So refinancing in terms of volume and price is not an issue at all. That's why I live deeply relaxed. Corona is more or less over, earnings are almost back to where they were before, investments are still running for a few more years, and the end is in sight. One thing that is central is the expansion of Terminal 3 in Frankfurt. You recently said that you will have a cash outflow of just over 2 billion euros until the project is completed.

No, not in the existing portfolio. Everything is long-term and financed. The upfront payments were already made in the past. We have to reduce debt absolutely and relatively, which we are doing as planned. Regarding M&A, our appetite is currently modest, but prospectively we will generate large free cash flows. Then we will see if there is something on the international market. You occasionally give sneak peeks of what free cash flow could look like without these expansion programs. You recently said that in 2022, without these expansion programs, you would have achieved free cash flow of half a billion euros. That gives an impression of the debt reduction capacity for the period after the expansion program.

Yes, definitely. Clear guidance, we repeat like a mantra: in 2025 we will reach break-even on free cash flow. Then we will have an EBITDA of about 1.5 billion, and investments will still be around 1 billion because T3 is still being built. Then we have about 300 million in interest, which roughly balances out. But then prospectively from 2026 onwards, the capex level will drop to the mentioned 400 million. EBITDA will march towards 2 billion by the end of the decade, and we will pay about 400 million in interest. The difference is about 1 billion, which is the perspective for free cash flow generation. After the expansion, Fraport will be a free cash flow generating machine.

First of all, we feel very comfortable with the high liquidity because it carried us through the pandemic. Without these high balances, we would not have survived independently. So it's our life insurance. But as you said, we have the option to reduce these extremely high liquidity balances at any time instead of new financing. That's our option, depending on further interest rate developments. But at the moment, with about 3.7 billion in liquidity, we feel very comfortable. However, we will certainly reduce the high liquidity when the free cash flow turns positive.

You named the figure. Currently we pay an average of 2.6% on the 11 billion gross debt. But if we go to the market today, our credit rating hasn't changed. We have a BBB+ rating from the Bundesbank, solid investment grade, so 180 basis points spread for 7-10 years, so all-in around 5%. That means we are currently rolling over 1 billion per year. We go from 2.6% (in Frankfurt even slightly lower) to 5%, so a delta of 3% on 1 billion costs us an additional 30 million per year. The interesting question is how long the high interest rate level will last. We internally expect that in about 3 years, interest rate relief will come again. We are on the conservative side. So we will have a few years of 30 million higher costs. But we don't have to because we have the option to let liquidity melt away. But that's not the plan. So we have a temporary increase in interest costs, but it doesn't hurt us because we also have 3.7 billion in investments, which are much shorter-term, and the yield curve is inverted. So we have a positive cost of carry. Interest expense goes up, but interest income also goes up, so there is a compensating effect that helps us temporarily. That's why I am deeply relaxed.

Yes, exactly. If you take the outlook, when I add it up, we are probably at 400-500 million in interest costs, 400 million capex, and you mentioned EBITDA of 1.5 to 2 billion medium-term. That's basically the picture for investors regarding Fraport's debt reduction capacity.

Simply the fact that currently the company is characterized by negative free cash flow. On the other hand, we have the statements of our change. We have a very good track record when it comes to our guidance; we have never deviated. Nevertheless, the situation is what it is. And we are naturally in the same boat as the airlines. They are currently earning very well, but they also have the exposure to ticket prices. We have recession, geopolitical risks. The big question is whether this very comfortable high ticket price level can be sustained going forward. I don't think so. There will be at least a freeze or a partial decline. That would hit the airlines' earnings heavily. The analyst's view is always on the entire industry, with the sawtooth profile of airlines, and airports suffer along with that, even though they have a completely different volatility.

2026, 4x, promissory notes.