About this report
Gute Reise! We make it happen
Fraport has been operating under a new mission statement for two years now. Processes and infrastructure are focused
on our customers having a “gute Reise”, a good trip. We’ve stated our objective in no uncertain terms: We operate airports
for our customers with worldwide success, and offer associated services. We create the conditions needed for international
interconnectedness, economic development and prosperity. In doing so, we want to offer our partners a platform for their
business model, and be an economic force and job engine in the respective regions as well as an attractive employer and
responsible partner.
The cover photo once again touches on our slogan. Airports around the world are fascinating places, and Frankfurt Airport is no
exception. Not only visitors and passengers but also Fraport employees are fascinated – each in his own way – by various im-
pressions. A feeling of the diversity on the apron is shown on the cover photo of the 2017 Annual Report.
Financial performance indicators
€ million
Revenue
Revenue adjusted by IFRIC 12
EBITDA
EBIT
EBT
Group result
Profit attributable to shareholders of Fraport AG
Earnings per share (basic) (€)1)
Year-end closing price of the Fraport share (€)
Dividend per share (€)
Operating cash flow
Free cash flow
Total assets
Shareholders’ equity
Group liquidity
Net financial debt
Return on revenue (%)
Return on shareholders’ equity (%)
EBITDA margin (%)
EBIT margin (%)
ROCE (%)
ROFRA (%)
Gearing ratio (%)
Non-financial performance indicators
Global satisfaction (Frankfurt) (%)
Baggage connectivity (Frankfurt) (%)
Employee satisfaction
Women in management positions (%)
Sickness rate (%)
CO2 emissions (m.t.)
Employees
Average number of employees
Total employees as at the balance sheet date
1) Proposed dividend (2017).
2017
2,934.8
2,893.1
1,003.2
643.0
506.1
359.7
330.2
3.57
91.86
1.50
790.7
393.1
10,832.4
4,028.7
1,018.6
3,512.4
17.2
8.9
34.2
21.9
8.9
10.0
94.2
2017
85
98.5
2.87
28.0
7.5
209,668
2017
20,673
24,598
2016
Change in %
2,586.2
2,566.3
1,054.1
693.7
581.4
400.3
375.4
4.07
56.17
1.50
583.2
301.7
8,872.8
3,841.4
1,247.5
2,355.9
22.5
10.4
40.8
26.8
11.6
11.4
65.4
2016
82
98.7
2.91
30.5
7.9
228,389
+13.5
+12.7
–4.8
–7.3
–13.0
–10.1
–12.0
–12.3
+63.5
0.0
+35.6
+30.3
+22.1
+4.9
–18.3
+49.1
–
–
–
–
–
–
–
Change
+3 PP
–0.2 PP
+0.04
–2.5 PP
–0.4 PP
18,721
2016
Change in %
20,322
22,650
+1.7
+8.6
Contents
1 To Our Shareholders
Letter of the CEO
The Fraport Executive Board
Report of the Supervisory Board
Joint Statement of Corporate Governance and Corporate
Governance Report
Combined Separate Non-financial Report
Independent Practitioner’s Report
4
8
10
16
25
42
2 Group Management Report for the 2017 Fiscal Year
Economic Report
Situation of the Group
Information about Reporting
Overview of Business Development
Control
Strategy
Structure
Business Model
Legal Disclosures
Remuneration Report
Finance Management
General Statement of the Executive Board
44
45
46
46
51
53
58
64
65
67
75
75
Macroeconomic, Legal, and Industry-specific Conditions 76
77
79
81
83
86
94
95
97
98
99
100
101
Non-financial Performance Indicators
Results of Operations for Segments
The Group’s Results of Operations
Share and Investor Relations
Asset and Financial Position
Research and Development
Business Development
Value Management
Significant Events
Environment
Employees
Society
Events after the Balance Sheet Date
Risk and Opportunities Report
Outlook Report
General Statement by the Executive Board
Business Outlook
3 Consolidated Financial Statements for the 2017
Fiscal Year
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
105
105
126
126
126
134
135
Consolidated Statement of Cash Flows
Consolidated Statement of Financial Position as at December
31, 2017
136
137
138
Consolidated Statement of Changes in Non-current Assets 140
142
Consolidated Statement of Changes in Equity
Segment Reporting
4 Group Notes for the 2017 Fiscal Year
Notes to the Consolidation and Accounting Policies
Notes to the Consolidated Income Statement
Notes to the Consolidated Financial Position
Notes to the Segment Reporting
Notes to the Consolidated Statement of Cash Flows
Other Disclosures
5 Further Information
Responsibility Statement
Independent Auditor´s Report
Ten-Year Overview
Glossary
Financial Calendar 2018
Traffic Calendar 2018
Imprint
144
162
170
198
199
201
226
227
234
236
238
238
238
4
To Our Shareholders / Letter of the CEO
Fraport Annual Report 2017
To Our Shareholders
Letter of the CEO
In the past fiscal year, your company achieved a very good result. With over 64.5 million passengers, your
Frankfurt Airport grew by more than six percent, setting a new record. We also served a significantly
greater number of passengers at all Group airports compared to the previous year. With the addition of
the two Brazilian airports as well as the successful take-over of 14 Greek airports in the past year, we were
also able to continue to expand our international portfolio. As a result, we have made good progress in our
goal to continuously increase the result contribution of our international business activities.
At the same time, growth at Frankfurt Airport presents us with the challenge of creating the capacities
necessary for it in good time. In Terminals 1 and 2, we are intensively working with our partners on
measures to improve processes and capacities. The most important aspects for meeting the challenge of
increasing passenger numbers during peak hours are security checks as well as passport controls for
entry into and departure from the country. Customer satisfaction once again increased, with 85% of our
passengers stating that they were satisfied with the travel process as a whole. This new record is certainly
proof of our excellent performance and the great commitment of our airport employees and partners.
In particular, we are creating capacity for 14 million additional passengers in Frankfurt with the construction
of Terminal 3, which should commence operations in 2023 with piers H and J. The construction of this
terminal is on schedule. In order to be prepared for the anticipated passenger growth as well as offering
our customers even better and more tailored services, the schedule for the construction of pier G with an
annual capacity of four to five million passengers will also be brought forward. The building application for
pier G was submitted last year, and construction work is set to start in the second half of 2018.
As you, our esteemed shareholders, can see, we are in a good position in Frankfurt to meet future traffic
demands despite the currently robust traffic growth. Developing capacities based on demand while at the
same time keeping customer satisfaction at a high level are the challenges that we set ourselves both in
Frankfurt and at our airports internationally. For example, after taking over the Greek airports, we immedi-
ately started implementing important modernization measures as well as efficient processes to noticeably
improve the travel experience for our guests from all over the world. The next step will include extensions
to and new constructions of terminal facilities, including more attractive services and shopping.
Fraport Annual Report 2017
To Our Shareholders / Letter of the CEO
5
Our experience shows that well-managed airports prove themselves to be true engines of economic
growth in their respective regions. The best example of this can be seen at our airport in Lima. One of the
most successful airports in our portfolio, “Jorge Chávez International Airport” has achieved consistently
high growth rates and a high level of customer satisfaction, while receiving numerous awards. For this
reason, we will build an additional runway as well as a new passenger terminal at the airport. This is the
only way we can meet the growing traffic volume in Lima, and continue to steadily improve the range of
high-level offerings and services for passengers.
Our commitment to the issues of active noise abatement and noise reduction shows that growth and re-
sponsibility are not mutually exclusive. These continue to have a high priority. Together with our partners
such as Deutsche Flugsicherung, Deutsche Lufthansa, and other players from politics and the industry, in
the past year we have improved our role of international pioneer in noise absence at the Frankfurt site.
Frankfurt is now the first hub airport worldwide that is equipped with state-of-the-art navigation technology
on all runways and supports an approach procedure that allows for noise reduction in the areas most
affected by the landing approaches. We have taken these and additional measures in a conscious effort
to shoulder our corporate responsibility.
6
To Our Shareholders / Letter of the CEO
Fraport Annual Report 2017
In line with the growth in traffic volume, Fraport was also very successful from a financial standpoint in
fiscal year 2017. We achieved our objectives and have consistently built on the positive development of
recent years. At the Group level, your company generated EBITDA of 1,003 million Euros and EBIT of
643 million Euros. The Group result amounted to nearly 360 million Euros. Lima and Fraport Greece, which
together achieved EBITDA of more than 237 million Euros, contributed to this positive financial develop-
ment. Fraport shares reached an all-time high several times last year and closed significantly higher at the
end of the year at 91.86 Euros.
You, our esteemed shareholders, should of course also benefit from this positive development. The Exec-
utive Board and the Supervisory Board will therefore submit a proposal to the AGM to maintain the dividend
at the level of last year’s increase and once again distribute a dividend of 1.50 Euros per share for fiscal
year 2017. The employees of Fraport AG will also receive a profit-sharing bonus and thus participate in
the positive development of the company.
In this respect and on behalf of my colleagues on the Executive Board, I would like to thank our employees
across the entire Group, who now number over 24,500. It is due to their efforts and performance that we
have achieved such a positive result despite the challenges we face.
After encouraging gains in 2017, we expect continued strong growth for the 2018 fiscal year. At the Frank-
furt site, we expect passenger numbers to be in the range of approximately 67 to 68.5 million. We also
expect an overall positive development at our international airports. In particular, the airports in Antalya,
Lima, and Xi’an should once again exhibit a high growth trend. At the two Brazilian airports in Fortaleza
and Porto Alegre as well as the 14 Greek regional airports, we expect growth in the mid-single-digit per-
centage range. With regard to the development of our key financial performance indicators, we expect
Group EBITDA of between around €1,080 million and approximately €1,110 million, Group EBIT of about
€690 million to around €720 million. We forecast the Group result to lie in a range between around
€400 million and about €430 million.
The financial outlook for the 2018 fiscal year also includes the two Brazilian airports “Pinto Martins” in
Fortaleza and “Salgado Filho” in Porto Alegre. The take-over of these airports on January 2nd of this year
is an important step in the further expansion of our international business. These airports welcomed nearly
14 million passengers in total in 2017, an increase of 4.4 percent compared to the previous year. Drawing
on our expertise, we will significantly develop both airports also for the benefit of the country. For our
customers, whether airlines or passengers, we will expand terminal capacity and improve processes and
services as well as add attractive retail and food & beverage offerings.
Fraport Annual Report 2017
To Our Shareholders / Letter of the CEO
7
Dear shareholders, we have set the right course in recent years in order to be able to make your company
more successful and sustainable in international competition. I would like to warmly thank you for your
confidence in us.
I hope you will enjoy reading our 2017 Annual Report and look forward to welcoming you to this year's
AGM on May 29, 2018 in the Jahrhunderthalle in Frankfurt/Main.
I would also like to point out a new feature in this annual report. According to the CSR Directive Implemen-
tation Act, the publication of a “Combined Separate Non-Financial Report” is now mandatory starting in
the 2017 fiscal year. You will find this report and more information about it in the chapter “To our share-
holders”.
Sincerely yours,
Stefan Schulte
8 To Our Shareholders / The Fraport Executive Board
8
An unsere Aktionäre / Der Fraport-Vorstand
Fraport Annual Report 2017
Fraport-Geschäftsbericht 2017
The Fraport Executive Board
Fraport Annual Report 2017
Fraport-Geschäftsbericht 2017
To Our Shareholders / The Fraport Executive Board
An unsere Aktionäre / Der Fraport-Vorstand
9
9
10
To Our Shareholders / Report of the Supervisory Board
Fraport Annual Report 2017
Report of the Supervisory Board
The Supervisory Board performed all the tasks incumbent on it under law, the company statutes, and rules of internal procedure,
and continuously monitored the management of the company in fiscal year 2017. The Supervisory Board regularly obtained timely
and comprehensive information from the Executive Board, in writing and orally, on the proposed business policies, fundamental
questions concerning future management and corporate planning, the situation and development of the company and the Group
as well as significant business transactions, and consulted with the Executive Board on these matters. Deviations in the develop-
ment of business from the planning were explained in detail to the Supervisory Board. Based on the reports of the Executive
Board, the Supervisory Board extensively discussed the business transactions of significance to the company. The Supervisory
Board harmonized the strategic alignment of the company with the Executive Board. In addition, the Chairman of the Executive
Board maintained regular contact with the Chairman of the Supervisory Board and informed him about the current developments
concerning the business situation as well as substantial business transactions. The Supervisory Board was directly involved in all
decisions of fundamental importance to the company. Where required by law, the company statutes, or rules of internal procedure,
the Supervisory Board voted on the relevant proposals made by the Executive Board after having thoroughly examined and
consulted on those matters.
During the reporting period, the Supervisory Board convened four ordinary meetings, one strategy session, and two special
meetings.
All members of the Supervisory Board participated in more than half of the meetings of the Supervisory Board and of the commit-
tees of which they are members.
Focal points of discussions of the Supervisory Board
The business development of the Fraport Group and its Group companies, with a particular emphasis on the traffic and earnings
development at Frankfurt Airport and the business development of important airlines for the Frankfurt site were the subject of
regular discussions by the Supervisory Board.
The Supervisory Board also covered the progress in the expansion in the south of the Airport site on an ongoing basis. In particular,
the developments, opportunities, and risks in the individual expansion programs and the respective pending measures and deci-
sions were discussed. Furthermore, the Supervisory Board focused on the expected traffic development and the resulting early
completion of Pier G.
Apart from this regular reporting, the following matters were extensively discussed in particular:
> In 2017, the Supervisory Board also consistently obtained information on the various measures and initiatives to improve active
and passive noise abatement at Frankfurt Airport. The agreement concluded at the end of the year on implementing an upper
noise limit played a particular role in this respect. Furthermore, at its December meeting, the Supervisory Board was also
informed by a representative of German air traffic control of the assessment of a Point Merge departure procedure for Frankfurt
and its associated difficulties.
Fraport Annual Report 2017
To Our Shareholders / Report of the Supervisory Board
11
> More detailed reports were once more provided on the progress of the projects to utilize new communication media for passen-
ger retention and to promote retail activities, which were commenced in 2015.
> Another ongoing topic in the reporting was the efforts to further improve the service quality in all areas. In this context, the
various measures in the existing terminal facilities to improve passenger satisfaction were reported and their positive results
welcomed. Various approaches for the increased assumption of management responsibility at security control points at the
Frankfurt site were analyzed in detail.
> With a view to energy management at Fraport, the Supervisory Board was also informed of the various projects for climate
protection, from the reduction in energy consumption through to the promotion of e-mobility.
> In continuation of the internationalization strategy, the Supervisory Board covered, inter alia, the progress of the take-over
process with regard to the Greek regional airports based on the concession agreement concluded on December 14, 2015 and
the effects of the political developments with regard to Russia and Turkey.
> In addition, the Supervisory Board dealt with the financial statements and management reports of the company and the Group
as at December 31, 2016, the agenda and the included resolution proposals for the Annual General Meeting (AGM) on May 23,
2017, as well as the 2016 Annual Report. Furthermore, the Supervisory Board again decided to propose to the AGM that
PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft, Frankfurt am Main, be appointed as the auditor for fiscal year
2017.
> The Supervisory Board also discussed the results of the external review of the suitability of the remuneration for the Executive
and Supervisory Boards.
12
To Our Shareholders / Report of the Supervisory Board
Fraport Annual Report 2017
Furthermore, the Supervisory Board made specific decisions on the following subjects, among others:
> As part of two special meetings on March 6 and March 13, 2017, the Supervisory Board agreed to the binding submission of
tenders for the concessions to operate Brazilian airports in Fortaleza and Porto Alegre. Subsequently, it was pleased to note
the acceptance into the public privatization process and the take-over of operations on January 2, 2018.
> Following appropriate prior consultation in the executive committee, on March 15, 2017 the Supervisory Board approved the re-
appointment of Ms. Giesen as a member of the Executive Board of Fraport AG for a further five years.
> Also on March 15, 2017 the Supervisory Board adopted the agenda for the ordinary Annual General Meeting on May 23, 2017
and, in this respect, also approved the proposal for the closing of control and profit transfer agreements with two further Group
companies.
> On June 26, 2017 the Supervisory Board, after successfully developing the project, granted its approval to sell a plot on the
Gateway Gardens land.
> In connection with the implementation of the CSR Directive, the Supervisory Board decided on the separate review of the CSR
reporting by an external auditor on September 15, 2017.
> On December 11, 2017 the Supervisory Board approved the application for a consultancy and operating contract at Newark
Airport (USA).
> Likewise, on December 11, 2017 the Supervisory Board also approved the 2018 Business Plan.
As part of its strategy session in mid-September 2017, the Supervisory Board initially focused on the development of international
investments. Looking to the future, trends, innovations, and their relevance for Fraport were then determined. The main topic was,
however, the consideration of market developments and the strategic direction of the Frankfurt site. In particular, the point of view
illustrated by a keynote speech by the main client, Lufthansa, was considered and the resulting challenges were discussed.
Work of the committees
The Supervisory Board continued its successful work with the committees it had formed to increase efficiency and to prepare for
the Supervisory Board meetings. In individual appropriate cases and in accordance with law, decision-making powers of the
Supervisory Board were granted to the committees. The chairpersons of the committees provided regular reports at the next
Supervisory Board meeting to the plenum of the Supervisory Board on the work of the committees. The composition and respon-
sibilities of the individual committees can be found in the chapter “Joint Statement on Corporate Governance and Corporate
Governance Report” as well as on the company’s website at www.fraport.com/corporategovernance.
The finance and audit committee met six times during the reporting period and discussed substantial business transactions, the
annual and consolidated financial statements, the management reports and the recommendation to the AGM for the appropriation
of profit and for the amount of the dividend. Representatives of the auditor often participated in the meetings on individual agenda
items. The finance and audit committee prepared the determination of the focal points of the 2017 fiscal year audit of accounts
for the Supervisory Board. The half-year interim report and the other interim releases were discussed in detail prior to their publi-
cation. Comments were also made on the 2018 Business Plan of Fraport AG (prepared in accordance with the German Commer-
cial Code, HGB) and the 2018 Group Plan (prepared in accordance with IFRS). Furthermore, the committee dealt with the award-
ing of the audit mandate to the auditor and made a proposal to the plenum for the election of the auditor for fiscal year 2017. In
this context, the auditor’s confirmation of independence pursuant to Section 7.2.1 of the German Corporate Governance Code
(GCGC) was obtained, the qualification of the auditor monitored, and the remuneration of same discussed. Furthermore, the issue
of mandates for non-audit-related services to the auditor was discussed. After the cyclical change of the auditor for fiscal year
2013, it was proposed to the plenum again to recommend PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft,
Frankfurt am Main, to the AGM as auditor for fiscal year 2017. Furthermore, with regard to the review of the CSR reporting, the
recommendation of the Supervisory Board was in favor of this auditing company.
Fraport Annual Report 2017
To Our Shareholders / Report of the Supervisory Board
13
Further focal points of the discussions were asset and liability management as well as the regular supplementary reports in ac-
cordance with Section 90 of the German Stock Corporation Act (AktG) to the consolidated financial statements and/or the consol-
idated interim releases and the half year report. In addition, the committee discussed the risk management, the internal control
system, the internal audit system as well as the compliance management system in detail and ensured that the Supervisory Board
was appropriately informed.
The focal points of the discussion of the investment and capital expenditure committee in fiscal year 2017 were again the
further business development of the investment business and capital expenditure with particular focus on expanding the Frankfurt
site. During four regular meetings and one extraordinary meeting, the committee, inter alia, discussed in depth the preparation of
the Supervisory Board decisions on the submission of tenders in Brazil, the sale of the plot on the Gateway Gardens land, and
the application for a consultancy and operating agreement at Newark Airport.
The focus of attention also regularly turned to both the existing global investments and those at the Frankfurt site, while members
of the Supervisory Board and the committee took the opportunity to gain an impression of the development at the Slovenian Group
airport in Ljubljana on site at the end of August 2017. Finally, the committee assisted with the capital expenditure at the Frankfurt
site and worked in depth on the planning of capital expenditures in the context of the 2018 Business Plan.
The human resources committee met four times in fiscal year 2017 and regularly discussed the human resources situation in
the Group. In addition to the current issues of tariffs, the focus of the discussion was also put on the reaction to the new Temporary
Employment Act (AÜG), the planned measures in executive skill development and the development of secondments and return-
ees. Furthermore, a program for changes to the personnel structure and health management with particular focus on the devel-
opment of the operational sickness rate were the subject of discussion.
The executive committee met twice during the reporting period. It dealt with Executive Board matters and remuneration issues
arising in the 2017 fiscal year. In this context, it also made arrangements for the re-appointment of Ms. Giesen as a member of
the Executive Board for a further five year period.
In light of the fact that there was no change in the composition of the Supervisory Board, the nomination committee formed for
preparing the new election of shareholder representatives did not meet in the 2017 fiscal year.
Nor was it necessary to convene the mediation committee in accordance with the German Co-Determination Act in fiscal year
2017.
Corporate Governance and statements of compliance
The Executive Board and the Supervisory Board addressed the implementation of the German Corporate Governance Code
(GCGC) also in the past fiscal year.
In light of the fact that the Regierungskommission Deutscher Corporate Governance Kodex (commission responsible for the
German Corporate Governance Code) decided on a few material changes to the GCGC and amended the Code in accordance
with legislative changes on February 7, 2017, after no changes had been made in the previous year, the Fraport Code was
amended accordingly on June 26, 2017.
Ultimately, based on the relevant resolution of the Supervisory Board of September 18, 2015, the implementation of the recom-
mendation to set a company-specific limit for the term of membership of the Supervisory Board was waived. As a consequence,
the relevant non-conformance once again had to be explained and justified in the 2017 statement of compliance.
In 2017, the Supervisory Board performed its regular efficiency audit by means of self-evaluation based on an internal survey.
The results were discussed in depth at the December meeting. This did not result in any specific need for action.
14
To Our Shareholders / Report of the Supervisory Board
Fraport Annual Report 2017
Further details on Corporate Governance and the wording of the current statement of compliance pursuant to Section 161 of the
AktG, released by the Executive Board and the Supervisory Board on December 11, 2017, are provided in the “Joint statement
on corporate governance and corporate governance report” starting on page 16. The Fraport Code and the current and past
statements of compliance can also be found on the company’s website at www.fraport.com/corporategovernance.
Conflicts of interest and their treatment
There were no conflicts of interest in fiscal year 2017.
Annual and consolidated financial statements
PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft audited the annual financial statements of Fraport AG and the
consolidated financial statements as at December 31, 2017, as well as the management report of Fraport AG, the Group man-
agement report and issued unqualified auditor’s reports. The audit mandate was issued by the chairman of the Supervisory Board
and the chairwoman of the finance and audit committee in accordance with the resolution of the Annual General Meeting of
May 23, 2017.
The separate financial statements and the management report were prepared in accordance with the regulations of the HGB
applicable to large capital companies; the consolidated financial statements and the Group management report were prepared in
accordance with IFRS as applicable in the EU. Furthermore, the German legal regulations to be applied in addition to Section
315e (1) HGB in the preparation of the consolidated financial statements and the Group management report were applied. The
individual financial statements and the management report, as well as the consolidated financial statements and the Group man-
agement report were audited by the auditors. The consolidated financial statements and the Group management report meet the
conditions for exemption from the preparation of consolidated financial statements in accordance with German law. The auditor
established that an early risk warning system, that meets the legal requirements and which makes it possible to identify at an early
stage developments that could jeopardize the company as a going concern, was in place.
The documents mentioned as well as the proposal by the Executive Board for the utilization of the profit earmarked for distribution
have been sent to the Supervisory Board by the Executive Board without delay. The finance and audit committee of the Supervi-
sory Board examined these documents extensively and the Supervisory Board reviewed them also personally. The audit reports
of PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft and the financial statements were available to all members
of the Supervisory Board, and were comprehensively dealt with in the accounting meeting of the Supervisory Board on March 15,
2018 in the presence of the auditor, who reported on the significant results of its audit and was available to respond to additional
questions and provide further information. In the meeting, the chairwoman of the finance and audit committee provided a compre-
hensive report on the treatment of the annual financial statements and the consolidated financial statements in the committee. A
focal point of this reporting was the key audit matters described in the auditor’s report. The Supervisory Board approved the results
of the annual audit. After the completion of the audit by the finance and audit committee and its own review, the Supervisory Board
did not raise any objections. The Supervisory Board approved the annual financial statements prepared by the Executive Board;
the annual financial statements were thus adopted.
The Supervisory Board approved the proposal by the Executive Board to use the profit earmarked for distribution to pay a dividend
of EUR 1.50 per no-par value share.
The report prepared by the Executive Board on the relationships of Fraport AG with affiliated companies pursuant to Section 312
of the AktG was submitted to the Supervisory Board. The report concludes with the following statement of the Executive Board,
which is also included in the management report:
“The Executive Board declares that under the circumstances known to us at the time, Fraport AG received fair and adequate
compensation for each and every legal transaction conducted. During the reporting year, measures were neither taken nor omitted
at the request of or in the interests of the State of Hesse and the City of Frankfurt am Main and their affiliated companies.”
Fraport Annual Report 2017
To Our Shareholders / Report of the Supervisory Board
15
The auditor reviewed the report on the relationships with affiliated companies and issued the following auditor’s report:
“Based on our mandatory audit and the conclusions reached, we confirm that
1. the effective disclosures made in the report are correct,
2. the consideration paid by the company for the legal transactions referred to in the report was not unreasonably high.”
The auditor participated in the discussions with the Supervisory Board on March 15, 2018 on the report regarding the relationships
with affiliated companies and was available to the Supervisory Board to provide additional information. After conducting its own
review, the Supervisory Board agrees with the assessment by the auditor and raises no objections to the statement of the Exec-
utive Board regarding the relationships with affiliated companies provided at the end of the report and included in the management
report.
Audit of the non-financial reporting
As part of the implementation of the CSR Directive Implementation Act, the Supervisory Board was also for the first time respon-
sible for reviewing the content of the combined separate non-financial report. As preparation for the audit, the auditor,
PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft, was commissioned to prepare a voluntary audit of the com-
bined separate non-financial report with limited assurance.
At the meeting of the Supervisory Board to discuss the financial statements on March 15, 2018, the auditor, in addition to the
results of its audit of the financial report, also reported on the significant results of its audit of the combined separate non-financial
report and, in this regard, was available for additional questions and information.
Ultimately, the Supervisory Board reached the positive audit result that the combined separate non-financial report complies with
the requirements under commercial law.
Personnel particulars
The composition of the Executive Board and Supervisory Board remained unchanged compared to the previous year in 2017.
With regard to the successful fiscal year 2017, the Supervisory Board would like to thank the Executive Board and the company's
employees for the commitment they have shown.
Frankfurt am Main, March 15, 2018
Karlheinz Weimar
(Chairman of the Supervisory Board)
16
To Our Shareholders / Joint Statement of Corporate Governance and Corporate Governance Report
Fraport Annual Report 2017
Joint Statement of Corporate Governance and Corporate
Governance Report
The Fraport AG Executive Board reports – in the name of the Supervisory Board as well – on the contents subject to the reporting
requirements pursuant to Section 289f of the German Commercial Code (HGB) for Fraport AG as well as for the Fraport Group
(Fraport AG and fully consolidated Group companies, hereinafter referred to as “Fraport”) as part of a joint statement on corporate
governance pursuant to Sections 315d and 289a of the HGB in conjunction with Section 289f of the HGB, in order to enable a
general statement on the Group's corporate governance principles. The Executive Board and Supervisory Board also provide an
annual report on corporate governance pursuant to Section 3.10 of the German Corporate Governance Code (GCGC) as part of
the corporate governance report and publish this in conjunction with the general statement on corporate governance.
The term “corporate governance” at Fraport means responsible corporate management and control. The objectives of corporate
governance at Fraport are long-term economic enhancement and creating as well as strengthening confidence among investors,
customers, employees and the public. Good corporate governance therefore has the highest priority at Fraport. In this context,
efficient collaboration between the Executive Board and the Supervisory Board is as important as protecting shareholders’ inter-
ests and maintaining open and transparent corporate communications. Fraport monitors the national and international develop-
ments in this area and regularly reviews its own corporate code, the Fraport Corporate Governance Code, in connection with new
legal regulations and revised national and international standards, and modifies it to meet these as required.
In accordance with Section 317 (2) sentence 6 of the HGB, the following information pursuant to Sections 289f (2) and (5) and
315d of the HGB has been included by the auditor in the audit of the annual financial statements only to the extent that the auditor
verified whether the information was actually given.
Statement of compliance pursuant to Section 161 of the German Stock Corporation Act (AktG)
As a publicly listed corporation headquartered in Germany, corporate governance at Fraport AG primarily orients itself to German
stock corporation law, capital market law, and the suggestions and recommendations of the GCGC. There is no obligation to
implement the suggestions and recommendations of the GCGC. However, under Section 161 of the AktG the Executive Board
and the Supervisory Board are obliged to issue a statement of compliance and to report and justify any deviations from the
recommendations of the GCGC.
Statement of compliance with the GCGC of December 11, 2017
The Executive Board and the Supervisory Board last issued the following statement of compliance under Section 161 of the AktG
on December 11, 2017:
“The last annual statement of compliance was issued on December 12, 2016. Since then, Fraport AG has complied with the
recommendations made by the Government Commission on the German Corporate Governance Code in the versions dated
May 5, 2015 (“GCGC 2015”) and February 7, 2017 (“GCGC 2017”) with the exception of the recommendations set forth in Section
5.4.1 (2) sentence 2 of the GCGC 2015 and Section 5.4.1 (2) sentence 2 of the GCGC 2017 with regard to the specification of a
regular limit of length of membership in the Supervisory Board. With the exception of this recommendation, Fraport AG will also
in future comply with the recommendations listed in the current version of the German Corporate Governance Code of February
7, 2017.
Grounds:
Section 5.4.1 (2) sentence 1 of the GCGC 2015 and Section 5.4.1 (2) sentence 2 of the GCGC 2017 contain, inter alia, a recom-
mendation that a regular limit of length of membership in the Supervisory Board be specified. The Supervisory Board of
Fraport AG views such a limit on the duration of membership as inappropriate. Rather, in determining the composition of a func-
tional and effective Supervisory Board, care should be taken to ensure a mix of experienced members and those newly elected
to serve in this body. A rigid maximum duration runs contrary to this, as it would be necessary to replace all or most members of
the Supervisory Board at regular intervals. However, the long-standing Supervisory Board members who would be affected by
Fraport Annual Report 2017
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17
such a provision in particular have profound knowledge of the company, which they can use to the company’s benefit in supervis-
ing and advising the Executive Board. In light of the time limit on their activities as such, long-standing Supervisory Board members
also do not lose either their independence or their openness towards new ideas. It would therefore not be in the interests of
Fraport AG if persons with particular supervisory and advisory skills and abilities were to be required to leave the Supervisory
Board based on a fixed time limit on their membership therein. In addition, a fixed maximum length of membership may run counter
to the diversity the GCGC requires in the composition of the Supervisory Board, which is reflected in part in the different lengths
of time for which members have served and, associated with these lengths, the members’ experience levels.”
The statement of compliance was promptly made permanently available to the shareholders on the company’s website at
www.fraport.com/corporategovernance.
GCGC recommendations
Fraport AG also voluntarily complies with the recommendations of the GCGC, solely with the following exceptions:
Transmission of the Annual General Meeting (AGM) via modern communication media (Section 2.3.3 of the GCGC).
Primarily for security reasons and personal privacy, Fraport AG only published the speeches of the Chairman of the Supervisory
Board and the Chairman of the Executive Board at the beginning of the 2017 AGM on the Internet.
First-time appointment of members of the Executive Board (Section 5.1.2 (2) of the GCGC).
All Executive Board members were initially appointed for a term of five years, indicating Fraport AG's willingness to enter into a
long-term arrangement. Furthermore, an initial term of five years still represents the common practice among experienced pro-
fessionals and is therefore in line with the expectations of many potential Executive Board members.
Disclosures on other corporate management practices
Beyond the statutory provisions, Fraport utilizes the following corporate management practices:
Own corporate governance code
The Supervisory Board of Fraport AG has adopted its own corporate governance principles for the company. The Fraport Corpo-
rate Governance Code describes the fundamental principles for the management and control of the company as well as the
responsible corporate governance that Fraport has undertaken to uphold. It also presents the specific implementation of the
recommendations and suggestions of the GCGC at Fraport and defines the substantial rights of the shareholders.
The Fraport Corporate Governance Code is closely modeled on the GCGC and is regularly monitored and adapted where neces-
sary in light of new legal regulations as well as revised national and international standards (last amended on June 26, 2017). The
Fraport Corporate Governance Code can be accessed at the company’s website at www.fraport.com/corporategovernance.
Compliance
Fraport understands the term “compliance” to mean compliance with laws and internal regulations. In 2003, Fraport developed
values-based compliance, which is continued and updated in a Compliance Management System (CMS). The CMS is focused on
prevention, identifying non-compliance, and responding to infringements. Fraport has structured the CMS based on audit standard
IDW PS 980. In addition to an internal representative and an external ombudswoman, Fraport has been offering an electronic
whistleblower system (BKMS® system) since 2009. This enables information relating to serious legal violations to reach the
compliance department via a range of reporting channels, which then processes and clarifies the information in a central case
management system.
In 2016, the area of compliance was organizationally assigned to the Fraport AG legal department. The Chief Compliance Officer
is now the head of the central “Legal Affairs and Compliance” department.
Compliance and prevention measures are focused on a group-wide compliance risk analysis, numerous communication
measures, and a range of training courses, which either take place as classroom-based events or as e-learning. In recent years,
the Executive Board has implemented the essential minimum requirements of the CMS in both the national and international
Group companies.
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Fraport Annual Report 2017
Moreover, in the past fiscal year, Fraport has updated its internal guideline for insider and ad-hoc publicity. The new guideline,
adapted to the Market Abuse Regulation requirements, also defines the concept of insider information. In addition, the guideline
regulates the handling of insider information up to disclosure. To announce the changes, Fraport published the guideline internally
and held training events at the top management levels.
Fraport also anchors its commitment to comply with internationally accredited regulations, such as the principles of the UN Global
Compact, OECD Guidelines, and ILO Core Labor Standards, across the company through a code of conduct. The Fraport policy
is at the heart of this commitment. Conduct standards substantiate the value-based compliance of Fraport AG and assist employ-
ees in complying with existing laws and internal regulations
The supplier code, updated in fiscal year 2016, describes the requirements and principles for cooperations of Fraport AG with
contractors, suppliers, and service providers. They are obliged to comply with the applicable national laws and the relevant inter-
nationally recognized standards, guidelines and principles, as also stipulated in the code of conduct. Business partners are addi-
tionally obliged to work towards the consistent compliance with these standards by all other companies involved in the provision
of services.
Social and environmental commitment
As an active partner in the region, Fraport AG supports sporting, social, and cultural associations and institutions. In addition,
Fraport AG has always been dedicated to making a contribution to reduce flight noise exposure at the Frankfurt site and believes
it has a responsibility to adequately take into account environmental requirements that stem from operating the airport. This
particularly includes protection of the climate and nature, as well as the responsible use of resources. At the Group airports, noise
and environmental protection measures are managed and implemented according to the local requirements.
In light of the growing challenges, such as international competition in the air transport industry as well as customer quality ex-
pectations together with a continuing focus on earnings, the objective is to support the personal and professional expertise of
employees. This is how Fraport ensures the quality of its services in all Group companies.
Further information is available in the “2017 Compact” report and on the company’s website at www.fraport.com/responsibility.
Structure and functioning of the Executive Board and Supervisory Board
For Fraport, a responsible and transparent corporate management and control structure is the cornerstone for creating value and
trust. In accordance with the statutory provisions, Fraport AG is subject to a “dual governance system”, which is achieved by the
strict separation of personnel in the management and control bodies (two-tier board). The Executive Board manages Fraport AG,
the Supervisory Board monitors the Executive Board. The members of the Executive Board and the Supervisory Board work
closely together in the interest of the company.
The structure of the management and control bodies at Fraport AG is as follows:
Executive Board
The Executive Board of Fraport AG has comprised four members since September 1, 2014: Dr Stefan Schulte (Chairman), Anke
Giesen, Michael Müller, and Dr Matthias Zieschang. As the management body, it conducts the business of the company. The
Executive Board is bound by the company’s interests and corporate sociopolitical principles within the framework of the stock
corporation law. In addition, its work is based on the rules of procedure, which have been approved by the Supervisory Board.
The schedule of responsibilities for the Executive Board, which governs the allocation of responsibilities, is also attached to the
rules of procedure as an annex.
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19
On this basis, the Executive Board reports to the Supervisory Board on all relevant matters of business development, corporate
strategy, and possible risks in a regular, timely, and comprehensive manner. In addition, the Executive Board must have the prior
approval of the Supervisory Board for several matters, particularly for capital expenditure and equity investment measures above
a value of €10 million, to the extent that this is not provided for in a business plan approved by the Supervisory Board. The length
of the appointment of the Executive Board members is geared toward the long term and is – as already stated – five years as
standard. Remuneration of the Executive Board comprises fixed and performance-related components. A detailed schedule of
the remuneration is provided in the remuneration report in the Group management report.
The Executive Board usually meets weekly and constitutes a quorum if at least half of its members participate in the meeting.
Resolutions are adopted by a simple majority of all the participating members of the Executive Board. In the case of a tie vote,
the chairman holds the casting vote.
Supervisory Board
The Supervisory Board of Fraport AG supervises the activities of the Executive Board. It is composed of an equal number of
representatives of shareholders and employees and comprises 20 members. The ten shareholder representatives are elected by
the AGM, and the ten employee representatives are elected by the employees in accordance with the provisions of the German
Co-Determination Act (MitbestG) for five years. The Supervisory Board has created rules of procedure, under which it has a
quorum if – on the basis of a proper notice of meeting – at least half of its members participate in the voting in person or through
submission of written votes. Resolutions are adopted with a simple majority unless otherwise mandated by law. In the event of a
tie vote, the chairman of the Supervisory Board, who must be a shareholder representative, is entitled to a second vote. Beyond
this, the rules of procedure regulate, in particular, the appointment and powers of committees of the Supervisory Board.
The Supervisory Board generally meets four times a year (seven times in 2017) and regularly reviews the efficiency of its activities.
The Supervisory Board reviews its activities in the past fiscal year on an annual basis in the Supervisory Board Report. A detailed
schedule of its remuneration is provided in the remuneration report in the Group management report.
At the time of publishing this statement, the Supervisory Board was comprised as follows:
Composition of the Supervisory Board
Representatives of the shareholders
Karlheinz Weimar (Chair)
Uwe Becker
Kathrin Dahnke
Peter Feldmann
Peter Gerber
Dr. Margarete Haase
Frank-Peter Kaufmann
Lothar Klemm
Michael Odenwald
Prof. Dr.-Ing. Katja Windt
Representatives of the employees
Gerold Schaub (Vice-Chair)
Claudia Amier
Devrim Arslan
Hakan Cicek
Dr. Roland Krieg
Mehmet Özdemir
Arno Prangenberg
Hans-Jürgen Schmidt
Werner Schmidt
Edgar Stejskal
Committees of the Supervisory Board
The Supervisory Board has formed the following committees based on the statutory provisions and the provisions of its rules of
procedure. The following table provides an overview of the tasks, regulated number of meetings, the actual number of meetings
in the past fiscal year, the planned number of members, and the actual number of members as at the date of publication of this
statement.
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To Our Shareholders / Joint Statement of Corporate Governance and Corporate Governance Report
Fraport Annual Report 2017
Committees of the Supervisory Board
Committee
Functions
Finance and audit committee
Investment and capital expenditure
committee
Human resources committee
> Preparation of resolutions in the area of finance and audit-related
resolutions
> Tasks
> monitors the accounting process
> monitors the effectiveness of the internal control system, the risk
management system, the internal audit system, the audit of accounts,
and compliance
> Statement of opinion
> on the business plan and plan changes that require approval, on
the annual and consolidated financial statements, on the Executive
Board recommendation for the appropriation of profits, on the
management and Group management report, on the audit report of
the auditor of the financial statements and of other auditors, on the
Supervisory Board's recommendation for the audit report, and on the
discharge of the Executive Board
> on the assignment of the audit mandate to the auditor, the fee
agreement, and the stipulation of the areas of focus of the audit.
> The finance and audit committee is responsible for the auditor
selection process.
> It monitors the independence of the auditor
and the quality of the audit of accounts. In this regard, it provides its
advance consent to all of the auditor's legitimate non-audit services.
> Preparation of resolutions relating to capital expenditure, resolutions
or decisions concerning the founding, acquisition, and sale of Group
companies and ongoing monitoring of the economic development of
existing Group companies
> Final decision if the obligation or entitlement of Fraport
AG arises from a capital expenditure measure (outside of the approved
business plan) or an investment-related action between
€10,000,000.01 and €30,000,000
> Final decision on the acquisition or disposal of, or charge
on, property or land rights between €5,000,000.01 and
€10,000,000
> Statement of opinion on the capital expenditure plan and on capital
expenditure reporting
> Preparation of resolutions in the area of human resources
> Statement of opinion, in particular on changes in headcount,
fundamental issues relating to collective bargaining law,
the payment system, the employee investment plan, matters
concerning the company retirement plan
Executive committee
> Preparations for the appointment of members of the Executive Board
and the conditions of employment contracts, including remuneration
> Final decision concerning outside activities of members
of the Executive Board that require the approval of the Supervisory
Board
Regulated
number of
meetings
Meetings
2017
Regulated
number of
members
Members
4
6
8 Dr. Margarete Haase
(Chair)
Arno Prangenberg
(Vice-Chair)
Uwe Becker
Kathrin Dahnke
Lothar Klemm
Dr. Roland Krieg
Hans-Jürgen Schmidt
Edgar Stejskal
4
5
8 Lothar Klemm (Chair)
Gerold Schaub (Vice-Chair)
Claudia Amier
Peter Feldmann
Frank-Peter Kaufmann
Werner Schmidt
Edgar Stejskal
Prof. Dr.-Ing. Katja Windt
4
4
8 Claudia Amier (Chair)
Frank-Peter Kaufmann
(Vice-Chair)
Devrim Arslan
Uwe Becker
Hakan Cicek
Mehmet Özdemir
Michael Odenwald
Prof. Dr.-Ing. Katja Windt
As needed
5
8 Chairman of the
Committee in accordance with Section
27 of the MitbestG
> Preparation of a recommendation on the appointment or dismissal of
members of the Executive Board if the entire Supervisory Board does
not reach such decision
As needed
0
Nomination committee
> Recommendation of suitable candidates to the Supervisory Board for
its recommendations to the AGM
As needed
0
Supervisory Board
Karlheinz Weimar
(ex officio)
Vice Chairman of the
Supervisory Board
Gerold Schaub (ex officio)
Claudia Amier
Peter Feldmann
Dr. Margarete Haase
Frank-Peter Kaufmann
Werner Schmidt
Edgar Stejskal
4 Chairman of the
Supervisory Board
Karlheinz Weimar
(ex officio)
Vice Chairman of the
Supervisory Board
Gerold Schaub (ex officio)
Devrim Arslan
Lothar Klemm
3 Karlheinz Weimar
Uwe Becker
Dr. Margarete Haase
Fraport Annual Report 2017
To Our Shareholders / Joint Statement of Corporate Governance and Corporate Governance Report
21
Shareholders and AGM
The shareholders of Fraport AG exercise their rights at the AGM where they exercise their right to a voice and a vote. The
shareholders are informed of business developments in the past year and the company’s forecasts through the management
report with sufficient time prior to the meeting. During the year, the shareholders are provided with comprehensive and timely
information about current business developments through interim reports and other company publications on the company web-
site. The AGM is held in the first six months of every fiscal year and makes decisions concerning the tasks assigned to it by law,
such as the appropriation of profits, election and approval of the actions of the members of the Supervisory Board and approval
of the actions of the Executive Board, the selection of the external auditor, amendments to the company statutes, and other tasks.
The shareholders can either exercise their right to vote in person or can authorize third parties to exercise their right to vote. Each
share entitles its holder to one vote in the voting.
Defining targets for the proportion of women on the Supervisory Board, Executive Board,
and the two levels below the Executive Board
On May 1, 2015, the “Act on Equal Participation of Women and Men in Management Positions in the Private and Public Sector”
came into force. The targets for the proportion of women on the Executive Board and the two levels below the Executive Board
as well as the deadlines for reaching these targets must be determined based on this law. In principle, the targets for the proportion
of women on the Supervisory Board must also be determined; however, this does not apply if there is already a fixed gender ratio
for the Supervisory Board, as is the case at Fraport AG.
Targets for the Executive Board
The Supervisory Board sets the targets for the proportion of women on the Executive Board in accordance with Section 111 (5)
of the AktG and Section 5.1.2 (1) of the GCGC.
The Supervisory Board set a target of 25% for the proportion of women on the Fraport AG Executive Board at its meeting of
September 18, 2015. This target should have been reached by June 30, 2017. As the Executive Board currently consists of one
female and three male members, this target had already been reached and will continue to be reached.
Targets for the first and second management levels below the Executive Board
The Executive Board sets the targets for the proportion of women at the two levels below the Executive Board in accordance with
Section 76 (4) of the AktG and Section 4.1.5 of the GCGC.
At the turn of the year 2016/2017, the Executive Board set a target of 30.0% for the proportion of women in the first management
level below the Executive Board (“direct reports”) and a target of 30.0% for the proportion of women for the subordinate manage-
ment levels (“direct reports” to the first management level) by December 31, 2021 for Fraport AG. At the end of 2017, the proportion
of women in the first management level amounted to 24.0 % and 28.0 % in the second management level.
Gender ratio on the Supervisory Board
After the “Act on Equal Participation of Women and Men in Management Positions in the Private and Public Sector” came into
force on May 1, 2015, the statutory gender ratios of a minimum of 30% women and 30% men on the Supervisory Board must be
complied with (Section 96 (2) of the AktG, Section 5.4.1 (3) of the GCGC) as part of the new elections and postings to Fraport’s
Supervisory Board that become necessary from January 1, 2016.
In this respect, the Supervisory Board decided at its meeting of September 18, 2015 that these ratios are to be met separately for
shareholders and for employees. The Supervisory Board currently comprises three female and seven male shareholder repre-
sentatives and one female and nine male employee representatives.
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Fraport Annual Report 2017
Targets for the composition of the Supervisory Board; diversity concept for the Supervisory Board
and Executive Board
On June 27, 2016, in accordance with Section 5.4.1 of the GCGC and Section 289f (2) of the HGB, the Supervisory Board adopted
its specific targets for its composition as well as a competency profile for the overall board. The targets for the composition of the
Supervisory Board and the competency profile for the overall board (including the diversity concept) are as follows:
“The objective is that the Supervisory Board should be composed in such a way that it ensures the competent control and support
of the company’s Executive Board by the Supervisory Board. It should be taken into account that the Supervisory Board as a
collective body has the overall knowledge, skills, and professional experience required to properly perform its tasks. It cannot be
expected that each individual member of the Supervisory Board possesses the required knowledge and experience to the fullest
extent; however, there should be at least one competent member of the Board for each aspect of the Supervisory Board’s activities
to ensure that the Board's members together represent a comprehensive range of knowledge and experience. These should
include, inter alia, an understanding of the relevant market environment, financial and commercial experience, and a strong com-
mitment to the region.
In addition, each member of the Supervisory Board should be expected to have a certain level of essential general knowledge
and experience that is appropriate to the nature, extent, and complexity of the business activities, and the risk structure of an
international company such as Fraport AG.
In adherence to the age limits set by the Supervisory Board in Section 5.4.1 (2) of the Fraport Code, candidates should be put
forward who are able to perform the duties of a member of a supervisory board of an international company and safeguard the
reputation of Fraport AG through their integrity, motivation, availability and personality. The principles of diversity and the propor-
tion of women and men based on the statutory provisions should be taken into account when nominating candidates for the Board.
In addition, the Supervisory Board should have at least three independent members.”
Concerning the extent to which this policy has been implemented, it can be stated that the current Supervisory Board, whose
members offer a wide range of economic, political, and corporate expertise, already has the knowledge, skills, and experience
required to properly perform its duties.
In addition, the Supervisory Board has both a sufficient number of members with international experience and an adequate number
of members with a strong regional connection, as some of them hold seats in local and regional governments.
With regard to diversity, the Supervisory Board had already updated the target it established in the fiscal year for the proportion
of women on the Board: “The Supervisory Board shall be composed of at least 30% women and 30% men, and this ratio is to be
met separately for shareholder representatives and for employee representatives.”
As already stated, the Supervisory Board currently still comprises three female and seven male shareholder representatives and
one female and nine male employee representatives.
Regarding the Board’s objective of having at least three independent shareholder representatives within the meaning of Section
5.4.2 of the GCGC, the Supervisory Board currently has as its members Kathrin Dahnke, Dr Margarete Haase and Prof. Katja
Windt, which means that is has reached its goal of having three independent shareholder representatives.
Fraport Annual Report 2017
To Our Shareholders / Joint Statement of Corporate Governance and Corporate Governance Report
23
In the future, the nomination committee and the Supervisory Board will also adequately take into account this objective for the
composition of the Supervisory Board when presenting candidates for election to the Supervisory Board at the Annual General
Meeting.
In addition, in accordance with the recommendation in Section 5.4.1 (5) of the GCGC, they will in future check with the respective
candidate that he or she can contribute the time expected.
The Supervisory Board also takes diversity into account regarding the composition of the Executive Board (Section 5.1.2 (1)
sentence 2 of the GCGC). Given the identified qualifications and long-term contractual commitments of the current members of
the Executive Board, the Supervisory Board does not yet pursue a diversity concept for the Executive Board.
Further information
Remuneration of the Executive Board and the Supervisory Board
The essential features of the remuneration system as well as the disclosures on the remuneration of the Executive Board and the
Supervisory Board can be found in a separate remuneration report. This is part of the Group management report in compliance
with Section 314 (1) number 6 of the HGB and Section 315a (2) of the HGB, and Sections 4.2.5 and 5.4.6 (3) of the GCGC.
Acquisition or disposal of company shares (directors’ dealings)
Pursuant to Section 19 of the Market Abuse Regulation (MAR), management (directors) and persons closely related thereto are
legally obliged to disclose the acquisition or disposal of shares of Fraport AG or any financial instruments related thereto, if the
value of the transactions undertaken exceeds the sum of €5,000 within one calendar year. The notifications in this respect are
immediately disclosed by Fraport AG.
Shareholdings of the bodies
The total shareholdings of all members of the Executive Board and Supervisory Board are less than 1% of the total number of
shares issued by Fraport AG.
Risk and opportunity management
For Fraport, corporate governance also means handling corporate risks and opportunities responsibly. For this reason, Fraport
has introduced a comprehensive Group-wide risk and opportunity management system. The structure of the risk and opportunity
management system and a report on key risks and corporate opportunities are presented in detail by the Executive Board in the
management report for the fiscal year. Depending on their importance for the company, changes to key risks or significant oppor-
tunities opening up during the year are published either in an ad hoc disclosure or as part of the financial reporting during the year
or the interim releases.
The early risk recognition system is also part of the annual audit by the auditor. The effectiveness of the internal control and risk
management system, and of the internal auditing system as well as the audit of accounts is monitored by the Supervisory Board
in accordance with Section 107 (3) of the AktG. At Fraport, the finance and audit committee of the Fraport AG Supervisory Board
performs this task.
Accounting and audit of accounts
Fraport prepares its consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) as
applicable in the European Union, and the additional applicable requirements of German commercial law pursuant to Section
315e (1) of the HGB. A Group management report is prepared in accordance with Section 315 of the HGB. The annual financial
statements and management report of Fraport AG are prepared in accordance with the provisions of the HGB. Further information
on the accounting principles is available in the notes to the respective financial statements. The annual and consolidated financial
statements are published within 90 days of the end of the fiscal year.
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To Our Shareholders / Joint Statement of Corporate Governance and Corporate Governance Report
Fraport Annual Report 2017
The annual and consolidated financial statements and the management report and Group management report of Fraport are
audited by an external auditor in accordance with Section 316 of the HGB. On the basis of the AGM’s resolution, in fiscal year
2017 this was PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft (“PwC”), which is thus auditing Fraport for the
fifth year in a row. The confirmation of independence required in accordance with Section 7.2.1 (1) of the GCGC for the preparation
of the vote was submitted by PwC. The audit of accounts is carried out in accordance with German auditing standards. It was
agreed with the external auditor that it will immediately inform the Fraport AG Supervisory Board of possible grounds for disqual-
ification or partiality if these are not remedied at once. The external auditor shall also immediately report on all findings and
incidents arising during the performance of the audit of accounts that are significant for the tasks of the Supervisory Board. In
addition, the external auditor has to inform the Supervisory Board and record in the audit report if it finds facts that reveal an
inaccuracy in the statement of compliance submitted by the Executive Board and Supervisory Board in accordance with Section
161 of the AktG while performing the audit of accounts.
During the year, the external auditor also participated in discussions with the finance and audit committee regarding the Group
interim financial statements and meetings with the Fraport AG Supervisory Board regarding the annual and consolidated financial
statements.
Disclosure of the joint statement on corporate management and corporate governance report
The Executive Board disclosed the joint statement on corporate management and corporate governance report on March 16,
2018 on www.fraport.com/corporategovernance.
Fraport Annual Report 2017
To Our Shareholders / Combined Separate Non-financial Report
25
Combined Separate Non-financial Report
Description of Business Model
The Fraport Group, with Frankfurt Airport and its international Group companies, is one of the leading global airport operating
companies. The range of the Group includes all services of the aviation and terminal operations as well as associated services.
Passenger traffic at all Group airports plays a substantial role in the Group’s revenue and earnings development.
In contrast to time-limited airport operating models, the Fraport Group parent company, Fraport AG, wholly owns and operates
Frankfurt Airport with no time limits. With more than 10,200 employees, Fraport AG, which has been stock exchange-listed since
2001, is also the biggest single company of the Group, which has more than 20,600 employees. Including the Frankfurt site,
Fraport was also active at 29 further airports through Group companies at the time of preparing the consolidated financial state-
ments. More information on the business model, the competitive position, and the Group structure can be found in the “Situation
of the Group” section of the Group management report starting on page 46, as well as in the Fraport AG management report in
the section “Situation of the Fraport AG”.
About This Report
This combined separate non-financial report describes, in accordance with the CSR Directive Implementation Act, the activities
of the Fraport Group (Fraport AG and all fully consolidated Group companies, hereinafter: “Fraport”) as well as the Fraport parent
company (hereinafter: “Fraport AG”). It is identified whether the remarks refer to the Fraport Group or to Fraport AG.
Derivation of materiality
In fiscal year 2017, Fraport began implementing its Group strategy developed based on the mission statement implemented in
2015/2016. The mission statement encompasses the Group goals “Growth in Frankfurt and internationally”, “Service-oriented
provider”, “Economically successful through to optimal cooperation”, “Learning organization” and “Fairness and recognition for
partners and neighbors”. The vision of establishing Fraport as Europe’s top airport operator and also to set global standards forms
the basis of the Group strategy.
Based on these Group goals, the Executive Board has defined six key non-financial performance indicators in accordance with
Section 315 (3) of the HGB in conjunction with section 289 (3) of the HGB. These are Global passenger satisfaction and baggage
connectivity, employee satisfaction, women in management positions, sickness rate, and CO2 emissions. These performance
indicators are also included in the Group management report in the chapters “Control”, “Non-financial performance indicators” and
“Business Outlook” starting on page 58, as well as in the correspondent sections of the Fraport AG management report starting.
The materiality matrix pursuant to the requirements of the Global Reporting Initiative framework used by Fraport is the result of a
systematic exchange with internal and external stakeholders. First, the relevant areas of activity were identified, focusing on issues
that can be recorded using targets and measurable performance indicators. Fraport’s management and representatives of the
most important stakeholders (analysts, shareholders, employee representatives, employees, airlines, local residents living near
airports, business partners, NGOs, passengers, politicians and authorities, foundations, associations, science) confirmed the rel-
evance of ten areas of activity for the company’s sustainability in an online survey. Both groups were also asked to prioritize the
areas of activity. As the term “area of activity” implies, the greatest need for action is in relation to the issues deemed most
important. The matrix was most recently reviewed and confirmed as up-to-date by the Executive Board in 2017.
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Fraport Annual Report 2017
In accordance with Section 289c (3) HGB, the scope of the reportable non-financial aspects is based on a two-step materiality
assessment. Material aspects are those that are relevant to an understanding of Fraport’s business development, business per-
formance and situation as well as to an understanding of the effects of Fraport’s business activities on non-financial aspects.
Taking the aforementioned commercial requirements into account, the key areas of activity identified according to materiality
matrix have been attributed to non-financial aspects in accordance with Section 289c (2) of the HGB as follows: The aspect of
“Employee-related matters” corresponds to the “Employees” dimension in the materiality matrix and is divided into the issues
“Attractive and responsible employer” and “Occupational health and safety”. The aspect of “Social matters” corresponds to the
dimension “Society” with the issues “Value added and commitment in the region” as well as "Noise abatement”, and the aspect of
“Environmental matters” corresponds to the dimension “Environment” with the issues “Climate protection” and “Nature and re-
source protection”.
The aspects not contained in the materiality matrix based on GRI, “Respect for Human Rights” and “Anti-corruption and Bribery
Matters”, were not included in the stakeholder survey, since they form the basis of Fraport’s business activities. In this respect,
they are nevertheless essential aspects in the meaning of the HGB and are therefore reported below.
Fraport Annual Report 2017
To Our Shareholders / Combined Separate Non-financial Report
27
Beyond these reportable non-financial aspects, Fraport has also identified “customer satisfaction and product quality” as an addi-
tional aspect. The crossover aspect “Supply and Subcontracting Chain” is not an individual aspect, but deals with all reportable
information in connection with the non-financial aspects in a separate chapter.
The financial matters are not directly part of this report, but can be found in the Group management report in the section “Economic
Report” beginning on page 75, as well as in the correspondent section of the Fraport AG management report. This concerns the
areas of activity “Economic efficiency”, “Growth and development in the Group”, “Ideas and innovation”, and “Value creation”.
Use of frameworks
The combined separate non-financial report is based on the requirements of the Global Reporting Initiative (GRI) 4.0. The mate-
riality matrix and the text on the aspects “Respect for Human Rights”, “Anti-corruption and Bribery Matters”, “Customer Satisfaction
and Product Quality”, “Employee-related Matters”, and “Environmental Matters “ and Social Matters” were prepared in reference
to the requirements of the GRI. The GRI Report of the Fraport Group for fiscal year 2017 will be available on May 3, 2018 at
www.fraport.com/responsibility. References to information beyond the scope of the Group management report and consolidated
financial statements are additional information and do not form part of this combined separate non-financial report.
Identification of risks
Fraport defines the risks associated with the combined separate non-financial report as future developments or events that may
negatively affect non-financial aspects. The risk evaluation is conservative, i.e., the greatest possible adverse impact for Fraport
is assessed. A distinction is made between a gross evaluation and a net evaluation. The gross risk is the greatest possible
negative impact of the risk prior to countermeasures. The net risk represents the expected residual impact after initiation or im-
plementation of countermeasures. The risk assessment in this report reflects the net risk.
To identify these risks, the risk management system described in the section “Risk and Opportunities Report” of the Group man-
agement report on page 105 and in the Fraport AG management report has been expanded and linked to a corresponding analysis
of the risks that have or will have potential negative effects on the non-financial aspects.
For fiscal year 2017, there were no additional reportable risks for the Fraport Group and Fraport AG in connection with the non-
financial aspects, which are necessary to understand the business activities, business performance, the situation of the corpora-
tion as well as the impact of their activities on the non-financial aspects, beyond the material risks already listed in the Group’s
“Risk and Opportunities Report” on page 105 as well as Fraport AG’s “Risk and Opportunities Report”.
Consideration of the supply and subcontracting chain specific to the business model
Unlike manufacturing companies, Fraport’s management does not focus on the supply chain, but on the quality of the services
offered and the functionality of the infrastructure required for this. Irrespective of this, it is crucial that business partners and
suppliers are selected carefully. The Group companies each have their own procurement management.
In Germany, Fraport AG compels business partners and suppliers to comply with its Supplier Code of Conduct as part of its
General Terms and Conditions (AGB). The Supplier Code of Conduct details how to treat employees correctly, including compli-
ance with human rights, environmental and climate protection, and integrity in the course of business, for example the prohibition
of corruption and bribery. A violation of this code may result in the termination of the business relationship. A contractual penalty
may be imposed and a claim for lump-sum damages may be raised in the event of antitrust violations and serious misconduct.
Business partners and suppliers must also undertake to observe these principles in dealings with their own suppliers.
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Fraport Annual Report 2017
Fraport AG undertakes to focus on sustainability criteria when purchasing products and services. In addition, the company was
one of the first in Hesse to sign a target agreement initiated by the Hessian Ministry of the Environment, Climate Protection,
Agriculture and Consumer Protection in 2016. Consequently, social and ecological criteria are considered in purchasing decisions
in addition to economic criteria.
Fraport AG has a heterogeneous requirement structure. Its requirements range from architectural services to the construction of
entire buildings and maintenance of such buildings, from office materials to IT services and aircraft push-backs. More than 68%
(approximately €663 million) of Fraport AG’s order volume of approximately €972 million was awarded to companies in the Rhine-
Main area in 2017.
Fraport AG had around 2,950 active suppliers and service providers in 2017. Around 98% of the order volume was awarded to
suppliers and service providers based in Germany, approximately 1% to those based in the EU and about 1% to those based in
the US and Switzerland. As there are comparable legal standards in these countries, in particular in relation to respect for human
rights (see page 29) and anti-corruption and bribery matters (see page 30), the first level of Fraport AG’s supply chain is not
deemed critical. Although orders with business partners and suppliers based outside the aforementioned countries seem insignif-
icant in relation to the total order volume, of which they make up less than one percent, business relationships with suppliers from
risk countries, known as the “Primary Impact Countries” (in accordance with the FTSE4Good Index), in particular require particular
care. For this reason, an examination of the first level of the supply chain by contractors’ country of origin is an essential part of
regular monthly reporting for the “Central Purchasing, Construction Contracts” central unit.
If contracts for product groups that include suppliers or service providers from risk countries are to be put out to tender and
awarded, the potential contractors will be reviewed depending on the order value. This also applies to orders for work clothes, for
example. The location of production sites is periodically checked. If a business relationship is started with a supplier from one of
these countries, sanction lists are extensively checked in advance. Sanction lists are official lists of people, groups or organizations
subject to economic or legal restrictions. If there are irregularities, further checks are planned which may result in the withdrawal
of an order.
A separate procurement process via the Group company Fraport Ausbau Süd was defined for the Expansion South project, in
particular Terminal 3 at Frankfurt, due to the size and complexity of the project. By submitting an offer in this procurement process,
building companies are obliged to comply with all requirements in the Posted Workers Act (Arbeitnehmer-Entsendegesetz, AEntG)
and the Minimum Wage Act (Mindestlohngesetz, MiLoG), to make contributions to the collective bargaining parties’ joint facilities,
and also to only engage subcontractors or other third parties that meet these requirements. The Fraport Supplier Code of Conduct
also forms part of any agreement.
A due diligence review process was defined for purchases made for the construction of Terminal 3, which has since been carried
out depending on the order value. In addition to mandatory checking of sanction lists and company information, this includes
extensive research online on potential business partners before business relationships are started.
Fraport AG’s four largest suppliers by order volume are service companies in which Fraport AG has a stake. These are the Group
companies FraSec, FraGround, FraCareServices, and GCS. This concerns among others Ground Services, Security, Cleaning
Services, and IT Services. As fully consolidated Group companies, they must adopt the Code of Conduct for employees and are
also obliged to comply with the Group Compliance Management System (CMS) policy. These guidelines include instructions to
make the Supplier Code of Conduct part of the General Terms and Conditions and to use it insofar as this is possible for the
Group companies pursuant to national law. If such inclusion in the General Terms and Conditions is not possible, or is only
possible if the Supplier Code of Conduct is modified, the local management shall inform the department dealing with compliance
at Fraport AG. Fraport AG’s fifth-largest supplier, Arbeitsgemeinschaft Baugrube T3, is not part of the Fraport Group and is en-
gaged by the Group company Fraport Ausbau Süd. It is subject to the award conditions described above.
The international Group companies must also comply with all components of the Group CMS policy. This applies in particular to
large construction projects such as the new terminal at Lima Airport. In that project, compliance with the Fraport Supplier Code of
Conduct is a mandatory part of the tender for the general contractor.
Fraport Annual Report 2017
To Our Shareholders / Combined Separate Non-financial Report
29
Correlations with the financial statements
The reportable correlations with the Group management report and the consolidated financial statements as well as the
Fraport AG management report and financial statements are explained at the end of each respective non-financial aspect.
Voluntary external audit
report has been economically audited by PricewaterhouseCoopers GmbH
The combined separate non-financial
Wirtschaftsprüfungsgesellschaft according to ISAE 3000 (revised) with limited assurance. An unqualified auditor’s opinion can be
found on page 42.
Respect for Human Rights
The Fraport Group has undertaken to comply with the most important internationally recognized codes of conduct – the principles
of the UN Global Compact, the OECD Guidelines for Multinational Enterprises, and the Core Labor Standards of the International
Labor Organization (ILO). In accordance with the values in the Fraport Code of Conduct, Fraport intends to operate in a socially,
economically and ecologically sustainable manner. This responsibility is defined in the Code of Conduct for all employees. The
same values are contained in the Fraport Supplier Code of Conduct. Fraport expects its suppliers and service providers to comply
with the same standards.
Fraport rejects any form of forced or child labor. Among other things, the minimum age permitting full-time employment in compli-
ance with the relevant national regulations is observed within the Fraport Group. The Code of Conduct and the Group Compliance
Management System (CMS) policy are available to all employees on the internal information portals. In the course of semi-annual
compliance reporting, the Executive Board is notified about the activities of the department dealing with compliance at the Fraport
AG and the status of measures.
The certified electronic whistleblower system (BKMS® System) is an important tool for preventing and uncovering violations.
Fraport has also engaged an external lawyer to act as ombudswoman for all of the Group’s employees as well as customers,
suppliers, and other business partners. Her job is to receive, legally review and forward information about unlawful conduct that
damages the company. An internal representative is also available to employees in Germany.
Regulations on working hours and complaints mechanisms, for example, are implemented in large financing projects, some of
which are also demanded by external lenders. The Environmental and Social Action Plan (ESAP), which requires the implemen-
tation of a human resource policy as well as a management and a monitoring system, is, for example, a prerequisite for the
financing of Fraport Greece (see the section “Notes on Reporting” in the Group management report). The plan applies not only to
Fraport’s employees, but also to suppliers and subcontractors. The ESAP also regulates the conditions for employees along the
supply chain in order to prevent, for example, suppliers from employing refugees under inappropriate working conditions.
Fraport supports the police where possible in pursuing and combating international human trafficking – for example at Frankfurt
Airport by providing video material in certain justified cases. Before any data is exchanged, the relevant data protection officers
are asked to review the data and approve the transfer. Furthermore, technical security systems were installed in cooperation with
the German Federal Police and the German Customs Office. One example of this are ID card locks that prevent repeated use of
the same ID card on doors within a short period of time. Wherever possible, check points for staff between Schengen and non-
Schengen areas will be installed in close proximity to a border inspection post. In addition, there are clear guidelines for all ID
card holders in the airport user regulations and the identification regulations as well as rules for abuse thereof up to the withdrawing
of ID cards or access permissions.
The aforementioned organizational concepts for identifying and reporting irregularities ensures that the Executive Board gains
direct knowledge of any cases of human rights violations. During the period under review, there were no complaints related to
human rights submitted to Fraport AG and the Group companies by way of the formal organizational complaint mechanisms.
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Fraport Annual Report 2017
Anti-Corruption and Bribery Matters
The basis of ensuring legal and compliant behavior in the Fraport Group as well as at Fraport AG is the corporate culture as it has
been laid out, in particular, in the code of conduct for employees. The Code of Conduct applicable to all employees worldwide
takes into account the United Nations’ anti-corruption conventions and is based on the ten Global Compact principles, the OECD
guidelines, and the ILO Core Labor Standards. It covers corruption prevention and antitrust law, among other things. The Execu-
tive Board is expressly committed to these principles as well as the zero tolerance principle, in particular in respect to corruption
and violations of antitrust and competition law. This Code of Conduct is a key part of the Compliance Management System (CMS)
for the Group companies and of Fraport AG’s CMS. The comprehensive analysis of compliance risks forms an important part of
the CMS. There is a focus on anti-corruption and antitrust and competition law.
The value-based corporate culture is the basis of the stable further development of the CMS. The CMS is designed to be preven-
tive and should enable Fraport employees to become aware of compliance risks and violations at an early stage and respond to
them appropriately. For Fraport AG, the Executive Board has expressly committed to this value-based compliance. With the
Group-wide Code of Conduct as well as various communication measures, the Executive Board supports the Managing Directors
and their managers within the Group to meet their responsibility to continuously implement the compliance targets.
Conduct standards flesh out Fraport AG’s value-based compliance and help employees to adhere to existing laws and internal
company rules. To prevent accusations of bribery, it clearly describes – using examples – in what form it is acceptable to give or
receive gifts, benefits and invitations.
Compliance due diligence is a standard process in Fraport AG’s strategic business unit Global Investments and Management,
meaning that significant compliance aspects, such as reviews of business partners on the topics of corruption, price fixing, and
fraud, are taken into account for each capital expenditure project and for consulting services. The obligation for all fully consoli-
dated Group companies to adopt the Group CMS policy also ensures that the Fraport standards for the CMS are implemented in
the relevant Group companies.
Semi-annual compliance reports inform the Executive Board about the activities of the department dealing with compliance of
Fraport AG and the status of measures to combat corruption. The Code of Conduct and the Compliance Guidelines are available
to all employees on the internal information portals. The certified electronic whistleblower system (BKMS® System), which is used
to report conduct damaging the company, is an important tool for preventing or uncovering violations. Fraport has also appointed
an external lawyer as an ombudswoman. She is a trusting contact for all of the Fraport Group’s employees as well as customers,
suppliers, and other business partners and also receives information on corruption issues. An internal ombudsperson is also
available to employees in Germany.
Fraport has taken preventative corruption measures among others for the foreign Group companies in accordance with the CPI
(Corruption Perceptions Index) issued by Transparency International. Here, the focus is on compliance risk analysis, which mainly
looks at corruption risks. The analysis also considers risks resulting from fraud and competition law. Measures to prevent corrup-
tion are derived by the Group companies on this basis. These include, for example, training measures, reviews of business part-
ners, and documentation of compliance-related processes.
Within the scope of large financing projects, measures against corruption and bribery are implemented in the Group companies,
in part as stipulated by external lenders. This is, for example, also the case in the “Environmental and Social Action Plan”, as a
precondition for the financing of Fraport Greece. The plan applies not only to Fraport’s employees, but also to suppliers and
subcontractors.
Fraport Annual Report 2017
To Our Shareholders / Combined Separate Non-financial Report
31
The aforementioned organizational concepts for identifying and reporting irregularities ensure that the Executive Board gains
direct knowledge of any cases of corruption and bribery. In fiscal year 2017, there were no agreement with any business partner
terminated due to allegations of corruption.
Customer Satisfaction and Product Quality
The customer comes first for Fraport. This is also reflected by the mission statement, “Gute Reise! We make it happen.” The aim
of the strategy is to establish itself as Europe’s best airport operator and also to set global standards. This ensures the develop-
ment of the company’s value and competitiveness in the long term. The target is to win over the main customers, i.e. passengers,
airlines, the freight community, and retail concessionaires, with attractive offers and the best service. Fraport works closely with
the Federal Police in particular to ensure that security and passport control processes are efficient and that a high volume of
passengers is handled in sufficient time.
Passenger satisfaction is considered the main indicator for all customers, and this is therefore the most important criterion for
service quality. Global satisfaction describes passengers’ satisfaction with the services offered and the overall service at Frankfurt
Airport. Fraport is committed to the target of maintaining and increasing customer satisfaction continuously. Despite the expected
temporary overload of terminal infrastructure due to traffic growth in the next few years, Fraport AG aims for a target of at least
80% global satisfaction at Frankfurt Airport. With the inauguration of the Pier G, passenger satisfaction should be at least 82.5%
as of 2021. From 2025, Fraport AG’s target is 85% based on the capacity increase from Terminal 3.
In Frankfurt, passenger satisfaction is mainly recorded using surveys. The global satisfaction of passengers at the Frankfurt site
was 85% in 2017, three percentage points above the level of the previous year (previous year: 82%), setting a new historical
record. This value of 85% was reached in all four quarters (previous year: Q1 81%, Q2 82%, Q3 83%, and Q4 82%). Numerous
service and infrastructure measures had a very positive impact on individual satisfaction criteria. For example, more than three
out of four respondents evaluated opportunities to pass the time until departure as very good or good. With 85% passenger
satisfaction in terms of cleanliness of the terminal, Frankfurt Airport could improve significantly in this area of great importance to
customers.
Also, the strategic relevance of global satisfaction is made clear by considering it as part of Executive Board remuneration (see
also the chapter entitled “Remuneration Report” starting on page 67 of the Group management report and of the management
report of Fraport AG).
Passenger satisfaction is important for international Group companies, too. The fully consolidated Group airports that are operated
through concession agreements (see also the “Situation of the Group” section of the Group management report, starting on page
46) are contractually obliged to carry out surveys on passenger satisfaction. In order to guarantee service quality while passenger
numbers increase, and to meet passengers’ and airlines’ increasing requirements, Fraport is planning, for example, to construct
a new terminal and a second runway for Lima Airport. Passenger satisfaction is measured at the different sites using various key
figures (see also the “Non-financial Performance Indicators” section of the Group management report, starting on page 95). Where
appropriate, this system of collecting data is to be harmonized in the medium term.
Frankfurt Airport, the site with the most passengers, is in particular the focus in the Group portfolio. The following will therefore
discuss the service quality management implemented at that site.
“Great to have you here!” is the name of the service program launched in 2010, which has been able to increase passenger
satisfaction at Frankfurt Airport significantly. The service program was further developed at the start of 2014 with the aim of offering
passengers a better and more tailored service. As part of five sub-initiatives, directions and signposting, ambience and comfort,
and the range of relaxation, work and entertainment options on offer in the terminals were all significantly improved. At the same
time, employees undergo systematic training in direct passenger contact in a separate program, in order to further improve hos-
pitality and service orientation at Frankfurt Airport.
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Fraport Annual Report 2017
Deutsche Lufthansa, the security companies working at Frankfurt, retail concessionaires, Deutsche Bahn, and others have also
been directly exchanging ideas on service, hospitality, and customer satisfaction in the Service Quality Committee since 2016.
The first important milestone was the definition and approval of the Service Guidelines for FRA. In these guidelines, the partners
reiterate their desire and their joint responsibility to strengthen the Frankfurt site and to further develop service quality and trusting
cooperation. The target is to ensure that common passengers, customers, and guests keep a good impression of Frankfurt Airport
in addition to improving overall satisfaction, the willingness to recommend us, satisfaction with the hospitality, and improving the
sense of security.
Fraport AG’s Executive Board is informed in quarterly reports about the most important passenger satisfaction indicators and
involved in decision-making processes. The Executive Board also adopts annual target levels for the most important passenger
satisfaction criteria. These levels are authoritative for all relevant business units and in some cases for service providers. Improve-
ment measures are primarily set out in the service program “Great to have you here!”, employee training, and other infrastructure
projects.
The reliable loading of luggage for departing flights and the fast delivery of luggage to the baggage claim for arriving flights have
a major impact on customer satisfaction. The baggage connectivity figure provides information about the percentage of baggage
at Frankfurt Airport that is loaded on time in relation to the total departing baggage. A high level of connectivity proves the good
quality of baggage processes, which is one of the main responsibilities of Ground Services. This is particularly important because
Frankfurt has a high proportion of transfer baggage with a transfer share of more than 55%. The target is to achieve baggage
connectivity in the long term of more than 98.5%. This key figure has been stable at a high level since 2012. In the past fiscal
year, baggage connectivity at Frankfurt Airport amounted to 98.5% and was therefore just on target, but 0.2 percentage points
lower than in the previous year. In particular, flights that were not always on time, weather conditions, and an IT malfunction in
December had an impact on the on-time loading of baggage. In order to stabilize connectivity at its current high level in the future
coupled with increasing number of baggage items, Fraport is constantly working on optimization measures that are closely coor-
dinated with airlines within the scope of regular performance discussions.
The Executive Board is informed about the development of baggage connectivity on a monthly basis. The division manager
receives daily reports so that in the event of a decline in performance short-term countermeasures can be taken to restore the
quality. Twice a year, Fraport AG holds a Committee meeting with all airlines on the use of the infrastructure and presents any
quality assurance measures if necessary. As the main customer at Frankfurt Airport, Deutsche Lufthansa receives a monthly
report as per agreement.
Other parameters for measuring and increasing customer satisfaction and service quality at Frankfurt Airport include quality audits
by the consultancy Skytrax. Frankfurt Airport was ranked 10th in 2017 in the annual ranking of the top 100 airports worldwide,
based on online passenger surveys. As recently as 2007, Frankfurt Airport placed 94th.
Further details can be found in the Group and Fraport AG’s management report under “Control” beginning on page 58 and “Non-
financial Performance Indicators” beginning on page 95.
Non-financial key performance indicators
Issue
Target
Key figure
Target level
Term
Scope
Status at the end of
2017
Customer satisfaction and
product quality
We want to maintain
and improve our cus-
tomer satisfaction.
Global passenger
satisfaction
>80 %1)
Baggage connectivity
>98.5 %
2021
2018
Fraport AG
85 %
Fraport AG
98,5 %
1) Target from 2021 forward: 82.5%, from 2025: 85%.
Fraport Annual Report 2017
To Our Shareholders / Combined Separate Non-financial Report
33
Employee-related Matters
Fraport AG has a long tradition as a company with a social and a partnership-based approach. Group-wide, Fraport aims to remain
competitive at all sites and in all areas and thereby secure jobs with fair and just working conditions. This involves providing fair
wages and salaries, and a package of benefits that goes beyond pay. Fraport offers a high level of job security, good working
conditions based on collective bargaining agreements, career and personal development options, and a highly developed corpo-
rate ethic.
The Fraport Policy forms the overarching structure for all commitments and topic-specific codes of the Group. Pursuant to respon-
sible corporate governance, Fraport has made a commitment to comply with internationally recognized standards of conduct,
such as those defined in the principles of the UN Global Compact, the OECD guidelines, and the ILO Core Labor Standards. In
2013, Fraport published its own Code of Conduct to anchor these principles even more firmly within the company. This code
commits employees to compliance with these fundamental principles.
Fraport Group has over 20,600 employees. Given the growing challenges, such as increasing international competition in the
aviation industry and passengers’ and airlines’ increasing demands, and the continuous focus of the Group on earnings, the aim
is to organize the personnel structure in such a way that this competitive pressure can be withstood. Employees’ personal and
professional skills are boosted Group-wide by training measures. This allows Fraport to ensure a high service quality.
Fraport AG offered its employees an attractive, voluntary personnel restructuring program in fiscal year 2016 in order to keep
labor-intensive business fields in the Group and to improve marketability and competitiveness. The program was initiated to sup-
port the foreseeable staff restructuring required and to improve the overall cost structure of personnel expenses. The program
focused in particular on the operational areas at Frankfurt Airport, especially the labor-intensive Ground Services. Employees can
voluntarily choose available options such as partial retirement, early retirement, part-time arrangements, or resignation with sev-
erance pay. By using the Group structures, new jobs that offer fair remuneration and individual development opportunities were
also created in the Group companies in particular. In this way, Fraport takes account of the fundamental change and increased
competitive pressure in the aviation industry.
Provisions in the amount of €37.7 million were formed for the entire package of measures as at December 31, 2016. €19.8 million
of these provision were allocated in fiscal year 2017, and due to individual shifts within the packages of measures new provisions
in the amount of €9.4 million were formed. At Fraport AG, the amount of €44.0 million was set up as provision for the package of
measures in 2016, of which €19.8 million were allocated in fiscal year 2017. Due to the shifts of individual measures, provisions
amounting to €2.6 million were formed in 2017. Therefore, the Fraport Group held provisions in the amount of €27.3 million and
Fraport AG held provisions amounting to €26.8 million as at December 31, 2017 (see Group management report in the section
“Economic Report” beginning on page 75 and Group Notes, note 39 as well as Fraport AG’s Note 9).
The fundamental importance of the human resources strategy is taken into account by the three key non-financial performance
indicators of employee satisfaction, women in management positions, and sickness rate. The Executive Director Labor Relations
is informed at quarterly meetings with the HR managers of the Group companies of the development of these key figures at the
Frankfurt site.
Attractive and responsible employer
As an attractive and responsible employer, Fraport aims to provide good working conditions and high levels of employee satis-
faction. This figure is calculated annually by surveying employees of Fraport AG and the Group companies. All Group companies
in Frankfurt with a high demand for personnel as well as the Group companies Fraport Slovenija and Twin Star took part in the
survey in 2017. In future, the survey will be expanded to all other key Group companies. The strategic relevance of employee
satisfaction is also clear given as it is taken into account in the Executive Board’s remuneration (see also the “Remuneration
report” section of the Group management report beginning on page 67).
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Fraport Annual Report 2017
The figure is calculated based on nine satisfaction elements and shows improvement potential in the detailed analyses. Fraport
aims to stabilize and continuously improve employee satisfaction in the long term to better than 3.0 Group-wide (index value
based on the German school grading system). The average grade for satisfaction by the employees of the Fraport Group was at
2.87 in fiscal year 2017, and therefore slightly below the previous year’s figure of 2.91. At Fraport AG, the figure should be better
than in the previous year. The figure in 2017 was 2.88 (previous year: 2.90). Fraport has stepped up its recruitment activities in
operations to meet challenges such as the tangible impact of demographic change at many airport sites and the increased burden
on operational employees due to the growth in traffic.
As a responsible employer, Fraport respects and promotes personal diversity and attaches great importance to ensuring that this
is reflected in the way employees interact with each other. Diversity is a key goal for Fraport that the Group systematically tackles
as part of its diversity management. As far back as 2007 Fraport published its “Diversity charter” – a company initiative to promote
diversity in companies and institutions. The Group company agreement “Conduct of Partnership, Diversity and Equality in the
Workplace” formed the platform for principles such as freedom from discrimination and equal opportunities. The company agree-
ment includes explicit definitions of values as well as specific internal regulations and structures. From an organizational perspec-
tive, responsibility for diversity is assigned to the Executive Director Labor Relations with corresponding resources.
Fraport places particular focus on promoting women in management positions at the two levels directly below the Executive Board
as well as at the respective management levels at the German Group companies. For reporting purposes, executives who report
directly to the Executive Board are categorized as level 1. Executives who report to this first level of leadership are categorized
as level 2. Regarding the Group companies in Germany, the levels of management are categorized based on comparable posi-
tions at Fraport AG. This corresponds to the objectives in the “Act on Equal Participation of Women and Men in Management
Positions in the Private and Public Sector” (FüPoG). The target is to increase the proportion of women in management positions
in Germany at both levels to 30% by 2021. Fraport respects national laws and does not want to impose any quotas based on
German law at the foreign Group companies.
In 2017, the proportion of women in management positions in Germany was 28.0% (previous year: 30.5%). In fiscal year 2017,
the proportion of women in management positions in Fraport AG was 27.1% (previous year: 29.2%). The slight decline of the ratio
is due to organizational changes and vacant executive positions as at December 31, 2017 that were previously held by women.
Measures to this end include programs where experienced managers within the company act as mentors for women with particular
potential. For example, they help them to develop their network and position in the Group. Dialog events with Executive Board
members are also planned in this context. For job vacancies, suitable female candidates are also actively approached at the same
time that advertisements are published. In principle, it should be possible to offer management roles with reduced working hours
at least temporarily. Succession planning should increasingly make use of the findings of the company’s Potential Assessment
Center and development meetings for positions within departments and across departments. This also includes pointing out sys-
tematic development and career paths to suitable female candidates.
Occupational health and safety
Occupational health management in the Fraport Group has always focused on preserving the health, performance and therefore
productivity of employees in the long term. With its preventive nature, Fraport contributes to maintaining employee performance
and prevents work-related health risks. Employees are regularly informed about health-maintaining measures and conduct and
their workplaces are ergonomically designed in the operational and administrative areas.
Fraport AG’s multi-award-winning occupational health management initiates a wide range of health-promoting activities and
measures with various focal points. In 2017, for example, cooperation with gyms made it possible for employees to exercise close
to their place of residence. Those who exercise regularly are rewarded with a contribution to membership fees. For 2018, a “Fitbox”
with suggestions for improving your own health, a thank-you campaign for employees that have not been absent from work and
the expansion of supplementary occupational health insurance are planned for all employees in Germany. From an organizational
perspective, responsibility for health management is assigned to the Executive Director Labor Relations with corresponding re-
sources.
Fraport Annual Report 2017
To Our Shareholders / Combined Separate Non-financial Report
35
The effects of demographic change in the Group and the increase in the average age of employees contribute, among other
things, to a continuous linear increase in the number of illnesses. However, high levels of absenteeism, especially in the opera-
tional units and Group companies in Germany, cannot be attributed only to health issues, workload and age-related effects. It can
be seen that absenteeism in the operational areas decreases significantly on public holidays, which leads to the conclusion that
there are motivation-related absences, as these working days are compensated by special bonuses. A Group-wide communication
campaign was launched in 2017 as a countermeasure. For managers, new ways to evaluate sick leave and trainings – also with
regard to labor law – were developed and executed. Discussions in individual teams will follow in order to derive and implement
group or individual measures.
Fraport evaluates the effectiveness of the measures by continuously analyzing the sickness rate, among other things. The calcu-
lation excluding absences beyond sick pay (extended sick leave) primarily reflects the development of short- and medium-term
illnesses.
Fraport focuses on limiting or reversing the sickness rate, which is increasing due to seasonal and age-related absences, among
other things. The target is to have a maximum rate of 7.2% in both the Group and at Fraport AG by 2025.
In 2017, the sickness rate in the Group was 7.5% (previous year: 7.9%), and it improved particularly at Fraport AG and the Group
companies FraSec and FraGround, which both have a large number of employees. The sickness rate deteriorated, however,
slightly at the Group companies Fraport Slovenija and FraCareServices. At Fraport AG, the sickness rate improved from 7.7% to
7.6%. In the security division, which has a large number of staff, the sickness rate decreased significantly, while it worsened
slightly in the Strategic Business Unit Ground Services.
A strong prevention culture means that, in addition to health management, occupational safety is systematically integrated into
the company’s processes and structures as well. Accident prevention not only serves personal safety, but is also of great im-
portance from an economic point of view, for example if ground-handling equipment is damaged. Strengthening the personal
responsibility of all employees and, in particular, the management is a top priority. Comprehensive measures to guarantee high
occupational safety standards are required, for example, when handling hazardous materials, in Ground Services’ handling pro-
cesses, in maintenance, in internal transport and traffic, and during infrastructure construction activities.
Driver safety training is offered to employees whose work involves driving. There are special occupational safety seminars for
managers, for example on transferring obligations of the business operator. Targeted and temporary measures and projects are
intended above all to raise employees’ awareness of safe conduct in operational areas. For example, the project “Mindful through
‘18” is on the agenda of Fraport AG’s Ground Services for 2018.
In accordance with the Occupational Safety Act, Fraport has implemented an occupational safety unit under the Executive Director
Labor Relations, which advises and supports departments in the further development of occupational safety. The key principles
for the Group companies can be found in the Occupational Safety Management Manual. They are to be implemented inde-
pendently by the Managing Directors. These specifications are described in a separate manual for Fraport AG.
Fraport measures the effectiveness of occupational safety measures by the number of accidents at work, among other things.
The target is to continually reduce the total number of accidents at work per year and to achieve a “rate per 1,000 employees”
(number of reportable accidents at work per 1,000 employees) of less than 25 within the Group by 2020. While the total number
of accidents dropped significantly (-136 accidents), there were 554 reportable accidents at work in the year under review, which
translates to an increase of 34 reportable accidents at work (previous year: 520). For all Group employees, the rate per 1,000
employees was 25.5 (previous year 24.3). Fraport AG’s target for the rate per 1,000 employees is a figure under 20. In 2017, it
was 22.8 (previous year: 21.9; as a result of late submissions, there may be changes to the figures in previous years). In the
strategic business unit Ground Services, in particular, more accidents occurred due to weather conditions at the beginning of
fiscal year 2017 in comparison to the previous year.
36
To Our Shareholders / Combined Separate Non-financial Report
Fraport Annual Report 2017
Further details can be found in the Group management report and Fraport AG management report under “Control” beginning on
page 58 and “Non-financial Performance Indicators” beginning on page 95.
Non-financial key performance indicators
Issue
Target
Key figure
Target level
Term
Scope
Status at the end of
2017
Employee satisfaction Better than or equal
2018
Group
2.871)
Attractive and responsible
employer
We want to create
good working condi-
tions and increase em-
ployee satisfaction.
to 3.0
Better than the
previous year’s figure
2018
Occupational health and
safety
We want to increase
the number of women
in management
positions.
Women in manage-
ment positions (first
and second level be-
low the Executive
Board)
30 %
30 %
We want to stabilize
the sickness rate in the
medium term and re-
duce it in the long
term.
Sickness rate
7.2 %
7.2 %
2021
2021
2025
2025
Fraport AG
2.88
Group
28.0 %
Fraport AG
27.1 %
Group
7.5 %
Fraport AG
7.6 %
1) This includes Fraport AG and 12 Group companies at the Frankfurt site as well as the Group companies Twin Star and Fraport Slovenija.
2) This includes Fraport AG as well as all Group companies in Germany.
Social Matters
Airports are important business locations and contribute directly and indirectly to economic and social value creation. For example,
Frankfurt Airport is the largest local workplace in Germany with almost 81,000 direct employees (as at December 31, 2015). The
survey provides an insight into the sectors in which employees at the site work. Accordingly, two thirds of employees surveyed
work for an airline, in airport operations or in freight forwarding and transport operations. Other sectors are authorities and insti-
tutions, catering, security services, personnel services, consulting, hotels and restaurants, freight handling, cleaning and retail.
There is predominantly potential for growth in companies that offer security services and at authorities. The people who live in the
metropolitan region around the airport also benefit from this. They not only benefit from the short journey to the airport; many of
them also work at a company that benefits from being close to the airport.
Noise abatement
Airports located in the vicinity of metropolitan areas are a burden for many local residents. At the Group airports, noise abatement
measures are implemented according to the national requirements on noise protection and, where appropriate, based on ad-
vanced specific local regulations. The airports comply with the relevant national laws and have correspondingly implemented their
own monitoring systems where required.
At the Frankfurt site, Fraport AG is responsible for tens of thousands of jobs and is therefore a key driver of economic prosperity
for the entire Rhine-Main region. This goes hand in hand with noise exposure for those living close to the airport, which is why
two bodies at Fraport AG work with the region affected by aircraft noise, representatives of the state government and other
members of the aviation industry:
Fraport Annual Report 2017
To Our Shareholders / Combined Separate Non-financial Report
37
The Aircraft Noise Commission (FLK) is a legally appointed body that advises the Hessian Ministry of Economics, Energy,
Transport and Regional Development (HMWEVL), the Deutsche Flugsicherung and the Federal Supervisory Office for Air Traffic
Control. The FLK advises the aforementioned bodies on measures to protect against aircraft noise and air pollution resulting from
aircraft exhaust gases.
The key task of the Airport and Regional Forum (FFR), which is assigned to the Hessian State Chancellery, is to foster dialog
between the region and the aviation industry and to facilitate discussion of the effects of air traffic, with a particular focus on
Frankfurt Airport and the Rhine-Main region. The FFR includes the “Active Noise Abatement” expert group, which advises on
measures that may help to reduce aircraft noise and the impact on the area around the airport.
Fraport wants to grow further at its main site and ensure this growth generates as little noise as possible. For Fraport AG, this
means that, in addition to the legal requirements, it is constantly working towards measures that reduce aircraft noise exposure.
The development of aircraft noise exposure in the area around the airport is subject to continuous monitoring. Measurement
analyses and the results of comprehensive simulations are regularly reported to the supervisory authority and the FLK, and are
also publicly disclosed on the company’s website. Municipalities where there are Fraport aircraft noise measurement stations
receive additional detailed analyses on request.
Fraport Noise Monitoring, FRA.NoM, tracks the level values continuously measured at stationary measuring stations and indicates
the aircraft noise in the last three months. It also reports the approaches and takeoffs at Frankfurt Airport. The information system
for aircraft noise issues, FRA.Map, is available online and allows local residents and interested parties to find information for their
location or place of residence on an interactive map. The system also displays the areas that are targeted by noise abatement
measures or entitled to compensation payments.
As regards measures to reduce noise exposure, a distinction needs to be made between active and passive noise abatement.
In active noise abatement, noise is reduced directly at the source or by noise-reducing operating concepts and takeoff or landing
procedures. An example of this is the commissioning of the Ground Based Augmentation System (GBAS). Together with the
project partners Deutsche Flugsicherung and Deutsche Lufthansa, Fraport AG hopes that GBAS will increase efficiency and result
in additional noise-reducing approach procedures. An important objective was to develop GBAS-based approaches with an ap-
proach angle of 3.2 degrees for all runways. Fraport AG supports airlines’ use of GBAS technology with special subsidies within
the framework of the applicable charges regulation. The aim is to further increase the rate of use of the GBAS. The development
of noise-dependent charges systems serves active noise abatement, as the use of low-noise aircraft is rewarded by comparatively
favorable charges.
Since May 2016, the so-called noise absence model has been applied at night for flights operating to the west of the airport, the
main direction of the airport's activities. This means that early in the morning (5-6 a.m.) and late in the evening (10-11 p.m.),
individual runways are alternately not used. The “DROps Early Morning” procedure (Dedicated Runway Operations) is used in
operating direction east. The alternating use of runways for take-off and landing in the comparatively off-peak hours calls for the
nighttime quiet period to be extended by one hour.
Use of the noise absence model is voluntary. It is sometimes the case that the procedure cannot temporarily be used consistently
due to infrastructure requirements or weather conditions. As the traffic volume increases in off-peak hours, further use must be
reviewed and the model revised if required. The institutions and companies involved will jointly come to an agreement on the
continuation of the model in sufficient time before each summer season.
As an additional voluntary measure introduced in 2017, a partnership for a noise emission ceiling was created. This should ensure
that, despite the rise in aircraft movements, the daytime noise impact at Frankfurt Airport does not increase, as would be permis-
sible according to the zoning decision. The traffic volume and traffic structure of the zoning approval for the expansion result in
noise contours with continuous sound levels of 55 dB(A) and 60 dB(A). These contours have been reduced by 1.8 dB(A) across
the board. The total areas within the reduced contours define the noise emission ceiling. If the limit is exceeded, Fraport AG and
the airlines are obliged to check further noise abatement measures. If the limit is repeatedly exceeded, any involved party is free
to take action outside of the partnership.
38
To Our Shareholders / Combined Separate Non-financial Report
Fraport Annual Report 2017
Passive noise abatement measures are intended to reduce the noise level inside buildings by way of structural modifications.
Fraport AG has extensive statutory obligations to take measures in around 86,000 households close to Frankfurt Airport. Eligibility
is defined by a noise protection area determined by the Hesse State Government in accordance with the strictest regulations of
the Aircraft Noise Act. Fraport AG satisfies these requirements in full. In this connection, structural noise abatement measures
beyond statutory requirements were brought forward.
The state government promised affected residents additional, more extensive efforts than those previously made in the vicinity of
the airport in announcing the “Together for the Region – Alliance for Noise Abatement 2012” program in February 2012. That
same year, a regional fund was set up to this end with €265-270 million. The funds are predominantly provided by the State of
Hesse and Fraport AG and can be used for both private households and public facilities qualifying for protection, such as schools,
kindergartens, or hospitals. Some 17,300 households in the airport region may receive additional support for passive noise abate-
ment from the regional fund. The application deadline for financing from the fund was December 31, 2017.
Damage repeatedly occurred on roofs in the direct vicinity of Frankfurt Airport in the past and wake turbulence from landing aircraft
could not be ruled out as a cause. The HMWEVL subsequently issued supplemental planning zoning decisions on May 10, 2013
and May 26, 2014. They regulate the requirements for protecting roof coverings on buildings from gusts of wind caused by wake
turbulences and clarify the relevant prerequisites. The HMWEVL defined an area with around 6,000 buildings as an eligible area
in the decisions. Including fiscal year 2017, some 3,200 applications for roof protection (wake turbulence prevention) have been
submitted and work on some 2,570 properties has been completed so far.
The Executive Director Controlling and Finance is regularly informed about the programs of measures regarding noise abatement
and roof protection. The Executive Director Operations is also directly informed of individual issues where required.
In the area of passive noise abatement and wake turbulence prevention, Fraport AG had formed provisions of €63.4 million as at
the 2017 balance sheet date (see also Group notes, note 39, and Fraport AG’s Notes, note 30).
In order to support local residents in the determination of their rights and to assist their applications, Fraport provides an extensive
range of information and services on the company website.
Social commitment in the region
Frankfurt Airport is the site in the Group with the largest traffic volume by far and is also the location of the company headquarters.
For Fraport, social responsibility has been a corporate principle for many years, and Fraport AG has therefore long supported
numerous clubs and institutions in the Rhine-Main region in particular.
Fraport AG’s funding concept for its community, cultural and social engagement is “Active for the region”. It primarily serves to
boost clubs and support volunteer work in the region around Frankfurt Airport. All activities are combined into an independent
department. In organizational terms, the competent central unit is assigned to the Chairman of the Executive Board.
The so-called “neighborhood framework” describes the geographical boundary for support activities. The area is based on district
and state borders taking into account the most important approach and takeoff routes. If these change, the neighborhood frame-
work will also be modified – as it was most recently when Runway Northwest was inaugurated. The expansion allowed other cities
and municipalities to participate in the company’s economic success.
Fraport Annual Report 2017
To Our Shareholders / Combined Separate Non-financial Report
39
Donation priorities include the promotion of social and charitable institutions, particularly those that encompass measures relating
to education, social equality, health, and the integration of marginalized groups in society. Employees can also apply for donations
as patrons of their clubs.
Sports sponsorship in the Rhine-Main region includes both recreational and professional sports. Well-known names that have
concluded long-term contracts with Fraport AG include the FRAPORT SKYLINERS and Eintracht Frankfurt. In the area of bas-
ketball, Fraport sponsors not only the German soccer league team but also gives donations to support the project “Basketball
goes to school”. At the soccer club Eintracht, the club is promoted and Eintracht AG is sponsored with the affiliated soccer school.
In the fields of culture and education, Fraport is involved in the Rheingau Music Festival, among other things. There are also long-
term partnerships with the Frankfurt cultural institutions Städel Museum, Schirn Kunsthalle, and Liebieghaus sculpture collection.
Overall, in 2017 Fraport supported more than 1,540 projects run by various clubs and institutions by making donations and provid-
ing sponsorships totaling €5.3 million.
Fraport has financially supported youths’ and young adults’ integration into working life since 1999 with the ProRegion Foundation.
The foundation subsidizes the creation of additional training places or the securing of available training capacities in the region,
as well as improvements in the training infrastructure. This includes support for projects and institutions that help to improve the
trainability and employability of youths and young adults. As one of the largest employers in Hesse, Fraport also focuses on
helping young refugees to gain professional qualifications and integrate as part of its social responsibility.
Fraport has supported nature and environmental conservation projects, research, and environmental education since 1997 with
the environmental fund. Its best-known project is the RhineMain Regional Park, which extends between Rüdesheim, Wetterau,
the Kinzig Valley, and the Hessian Ried.
Fraport is also involved in the Wirtschaftsinitiative FrankfurtRheinMain (FrankfurtRhineMain Business Initiative), which 150 com-
panies participate in. One outcome of this cooperation is the House of Logistics and Mobility (HOLM) competence center at
Frankfurt Airport.
Even at the individual sites of the international Group companies, regions close to the airport benefit from donations made and
sponsorship activities undertaken by each company independently, as well as from their economic performance. Local companies
and their value added as well as employee consumption contribute directly and indirectly to the positive economic development
of the respective regions (see also the Group management report in the section entitled “Society” starting on page 100).
Environmental Matters
The operation of an airport and air traffic have various effects on the environment. Fraport considers itself responsible for taking
due consideration of the resulting environmental requirements and expects the same of its suppliers and service providers.
The environmental policy from 2008 obliges all Group companies to make use of natural resources and the environment in a
sustainable, conserving and preventive manner, and to continually improve their environmental performance. To this end, there
are environmental management systems at Fraport AG and all fully consolidated Group companies that are classified as “funda-
mentally environmentally relevant” due to their portfolio. These systems are, almost without exception, certified in accordance
with the relevant standard ISO 14001 or the European EMAS Regulation. Companies that join the Group and do not yet have
such a system are obliged in the course of the acquisition to introduce an environmental management system in future.
40
To Our Shareholders / Combined Separate Non-financial Report
Fraport Annual Report 2017
Environmental management systems serve to systematically organize, manage and monitor corporate environmental protection
within the relevant company. In addition, they support those responsible for operational activities and the management with regard
to the performance of their respective duties and improvements in environmental performance. The functionality and effectiveness
of the environmental management systems is reviewed and certified by external certifiers (ISO 14001) or environmental verifiers
(EMAS) on an ongoing basis.
The environmental policy includes a commitment to report each year on environmental activities and performance
(www.fraport.com/responsibility). To this end, the Group companies report to Fraport AG once a year on a comprehensive catalog
of standardized environmental indicators and projects as well as associated improvements, and Fraport AG compiles this infor-
mation for reporting purposes.
The environmental management systems cover all environmental factors such as energy consumption, CO2 emissions, air pollu-
tants, effects on biodiversity, water consumption, and waste. Climate protection and conservation of nature and resources were
determined to be important areas of activity as a result of the materiality matrix according to GRI.
Climate protection
The management activities at Fraport AG mainly deal with the emissions the company is direct responsible for, but it also looks
at emissions that it is only indirectly connected to and which it can therefore only indirectly influence. Based on the Federal
Government’s climate change agreement 2050, Fraport AG wishes to reduce the CO2 emissions at Frankfurt Airport to 80,000 m.
t. by 2030. This corresponds to a reduction by 65% compared to the emissions in the base year of the international climate change
agreement (1990). In the past fiscal year, Fraport AG’s CO2 emissions amounted to approximately 190,065 m. t. of CO2, 9.2%
less than in the previous year. For the Group as a whole (including Frankfurt), the Executive Board has set a climate protection
target of a reduction of to 125,000 m. t. of CO2 by 2030. If necessary, the target will be adjusted for changes within the Fraport
airport portfolio. The target is based on the national reduction rates agreed to at the United Nations Climate Change Conference
in Paris. In 2017, emissions in the fully consolidated Group companies amounted to 209,668 m. t. of CO2.
A way of successfully managing CO2 is to participate in the Airport Carbon Accreditation program of the ACI (Airports Council
International), which Fraport played a major role in developing. Since 2010, it has evolved into the world standard for CO2 reporting
and management at airports. Participation at level 2 (“reduction”) or higher requires proof of both a CO2 reduction target, a CO2
management program in accordance with international requirements, and of annual emission reductions verified by external ex-
perts. Frankfurt Airport reached level 3 (“Optimisation”) back in 2012. Ljubljana Airport achieved level 2 in 2015 and is aiming for
level 3+ (“neutrality”) in the medium term. Lima, Varna and Burgas airports do not currently participate, nor do the airports of
Fraport Greece and Fraport Brasil. Airports that choose a different management approach must also have their CO2 footprint
assessed and testing by external experts.
Fraport has used its own monitoring instrument, the CO2 and energy consumption monitoring system, since 2013 to depict, ana-
lyze, and manage energy consumption at the Frankfurt site. It creates transparency about consumption and consumers, helps to
improve energy efficiency and reduce energy costs. It also allows qualified statements to be made at any time about the current
CO2 emissions at Frankfurt Airport and allows any undesirable developments with respect to the strategic CO2 targets for Frankfurt
Airport to be detected at an early stage. The company’s monthly energy consumption, which is recorded in a sophisticated manner
by building, system or equipment, serves as the database. All energy sources, such as electricity, district cooling, district heating,
gas, fuel for vehicles, and other fuels, are taken into account.
Since 2014, all decisions relating to Fraport AG’s energy management at Frankfurt Airport have been prepared in a separate
body, known as the Energiezirkel, which is chaired by the Executive Director Controlling and Finance and reports to the Executive
Board. Such decisions mainly concern improvements in building, system, and process energy efficiency. For the vehicle fleet and
aircraft handling equipment, the specialist departments assess the opportunities to use alternative forms of propulsion, in particular
electricity, as an alternative to gasoline and diesel.
Fraport Annual Report 2017
To Our Shareholders / Combined Separate Non-financial Report
41
Fraport AG has been involved in the Carbon Disclosure Project (CDP) since 2006, which analyzes companies and their strategies
with regard to climate change and CO2 reporting. The CDP manages the world’s largest database on this topic, which is used by
investors and also by political decision-makers. A score assesses a company’s transparency and activities. Fraport AG achieved
level C (“Awareness”) in 2017. This is evidence of transparent reporting and the company’s awareness of its influence on climate
change.
Protection of nature and resources
As transport hubs, airports make extensive use of resources. The target is to equip all environmentally relevant, fully consolidated
Group companies with a certified environmental management system. This serves to execute the Group’s processes and activities
in the most environmentally sound manner possible. At the end of the past fiscal year, 89.3% of the fully consolidated environ-
mentally relevant Group companies were equipped with such a system. Fraport AG’s employees’ many years of experience in
environmental management benefit all Group airports, for example in the form of training and technical support, including on site.
Comprising an area of around 22 square kilometers, Frankfurt Airport is among the most compact major airports in the world.
Around half of this land is unsurfaced. The largest open continuous area is located close to the runways. In nature conservation
terms, this extensively maintained permanent grassland is a high-quality habitat that is home to many rare and endangered animal
and plant species. Frankfurt Airport has since become a nationally significant retreat and protection area for some species, such
as the skylark.
The Wildlife Control department is responsible for preserving and further enhancing this value, as long as flight operations allow.
Its success in doing so is monitored extensively. Wherever possible, Fraport AG extends the green areas. For example, the new
buildings in CargoCity South are increasingly being planned with ecological green roofs.
Some 2,300 hectares of land in the immediate and wider vicinity of the airport will be upgraded from a nature conservation per-
spective as a legal requirement under the zoning decision. High-quality habitats such as deciduous forests, orchards, marshes,
and nutrient-poor grassland are being developed. Measures to counterbalance the Expansion South, in particular Terminal 3, are
already included in this extensive package of measures.
On a voluntary basis, Fraport AG also supports projects to preserve and promote ecosystems and biodiversity in the Rhine-Main
region using funds from the environmental fund.
In the area of environmental protection, Fraport AG held provisions in the amount of €39.3 million, and a Group company held
provisions amounting to €0.9 million as at the balance sheet date (see Group Notes, note 39, and Fraport AG’s Notes, note 30).
Further details can be found in the Group management report and Fraport AG management report under “Control” beginning on
page 58 and “Non-financial Performance Indicators” beginning on page 95, as well as “Environment” starting on page 99.
Non-financial key performance indicators
Issue
Target
Key figure
Target level
Term
Scope
Status at the end of
2017
Climate protection
We want to reduce
the CO2 emissions of
the Fraport Group.
CO2 emissions (total of
scope 1 and 29
125.000 m. t. CO2
2030
Group
209.668 m. t. CO2
1)
80.000 m. t. CO2
2030
Fraport AG
190.065 m. t. CO2
1) Includes Fraport AG and the Group companies GCS, FraGround, Fraport Slovenija, Lima, and Twin Star.
42
To Our Shareholders / Combined Separate Non-financial Report
Fraport Annual Report 2017
Independent Practitioner’s Report on a Limited Assurance Engagement
on Non-financial Reporting1
To Fraport AG, Frankfurt am Main
We have performed a limited assurance engagement on the combined separate non-financial report within the meaning of §§
(Articles) 289b Abs. (paragraph) 3 and 315b Abs. 3 HGB ("Handelsgesetzbuch": "German Commercial Code") of Fraport AG,
Frankfurt am Main, (hereinafter the “Company”) for the period from 01 January to 31 December 2017 (hereinafter the “Non-
financial Report”).
Responsibilities of the Executive Directors
The executive directors of the Company are responsible for the preparation of the Non-financial Report in accordance with §§
315b and 315c in conjunction with 289c to 289e HGB.
This responsibility of Company’s executive directors includes the selection and application of appropriate methods of non-financial
reporting as well as making assumptions and estimates related to individual non-financial disclosures which are reasonable in the
circumstances. Furthermore, the executive directors are responsible for such internal control as they have considered necessary
to enable the preparation of a Non-financial Report that is free from material misstatement whether due to fraud or error.
Independence and Quality Control of the Audit
We have complied with the German professional provisions regarding independence as well as other ethical requirements.
Our audit firm applies the national legal requirements and professional standards – in particular the Professional Code for German
Public Auditors and German Chartered Auditors (“Berufssatzung für Wirtschaftsprüfer und vereidigte Buchprüfer“: “BS WP/vBP”)
as well as the Standard on Quality Control 1 published by the Institut der Wirtschaftsprüfer (Institute of Public Auditors in Germany;
IDW): Requirements to quality control for audit firms (IDW Qualitätssicherungsstandard 1: Anforderungen an die Qualitätssicher-
ung in der Wirtschaftsprüferpraxis - IDW QS 1) – and accordingly maintains a comprehensive system of quality control including
documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal
and regulatory requirements.
Practitioner´s Responsibility
Our responsibility is to express a limited assurance conclusion on the information in the Non-financial Report based on the assur-
ance engagement we have performed.
Within the scope of our engagement we did not perform an audit on external sources of in-formation or expert opinions, referred
to in the Non-financial Report.
We conducted our assurance engagement in accordance with the International Standard on Assurance Engagements (ISAE)
3000 (Revised): Assurance Engagements other than Audits or Reviews of Historical Financial Information, issued by the IAASB.
This Standard requires that we plan and perform the assurance engagement to allow us to conclude with limited assurance that
nothing has come to our attention that causes us to believe that the Company’s Non-financial Report for the period from 01
January to 31 December 2017 has not been prepared, in all material aspects, in accordance with §§ 315b and 315c in conjunction
with 289c to 289e HGB.
In a limited assurance engagement the assurance -gathering procedures are less in extent than for a reasonable assurance
engagement, and therefore a substantially lower level of assurance is obtained. The procedures selected depend on the practi-
tioner’s judgment.
1) PricewaterhouseCoopers GmbH has performed a limited assurance engagement on the German version of the separate non-financial report and issued an inde-
pendent assurance report in German language, which is authoritative. The following text is a translation of the independent assurance report.
Fraport Annual Report 2017
To Our Shareholders / Combined Separate Non-financial Report
43
Within the scope of our assurance engagement, we performed amongst others the following assurance procedures and further
activities:
• Obtaining an understanding of the structure of the sustainability organization and of the stakeholder engagement
•
Inquiries of personnel involved in the preparation of the Non-financial Report regarding the preparation process, the internal
control system relating to this process and selected disclosures in the Non-financial Report
•
Identification of the likely risks of material misstatement of the Non-financial Report
• Analytical evaluation of selected disclosures in the Non-financial Report
• Comparison of selected disclosures with corresponding data in the consolidated financial statements and in the group man-
agement report
• Evaluation of the presentation of the non-financial information
Assurance Conclusion
Based on the assurance procedures performed and assurance evidence obtained, nothing has come to our attention that causes
us to believe that the Company’s Non-financial Report for the period from 01 January to 31 December2017 has not been prepared,
in all material aspects, in accordance with §§ 315b and 315c in conjunction with 289c to 289e HGB.
Intended Use of the Assurance Report
We issue this report on the basis of the engagement agreed with the Company. The assurance engagement has been performed
for purposes of the Company and the report is solely intended to inform the Company about the results of the limited assurance
engagement. The report is not intended for any third parties to base any (financial) decision thereon. Our responsibility lies only
with the Company. We do not assume any responsibility towards third parties.
Frankfurt am Main, 28 February, 2018
PricewaterhouseCoopers GmbH
Wirtschaftsprüfungsgesellschaft
Thomas Noll
Wirtschaftsprüfer
[German public auditor]
ppa. Nicolette Behncke
Wirtschaftsprüfer
[German public auditor]
44
Group Management Report
Fraport-Annual Report 2017
Group Management Report for the 2017 Fiscal Year
Information about Reporting
Group accounting takes account of the International Financial Reporting Standards (IFRS) in force on the reporting date (Sunday,
December 31, 2017) and the interpretations issued by the IFRS Interpretations Committee (IFRS IC) as adopted in the European
Union (EU). In addition, Fraport reports the information pursuant to Section 315e (1) of the German Commercial Code (HGB).
Compared to the previous year, there were no significant changes to accounting and reporting standards, meaning that the pre-
vious year’s figures were not restated and no significant adjustments to the report structure were needed. The changes to the
German Accounting Standard No. 20 (GAS 20) through the German Amendment Accounting Standard No. 8 (GAAS 8) have been
taken into account.
Compared to the previous year, the following significant events occurred:
In a public bidding process by the Brazilian Government, Fraport was awarded the tender on March 16, 2017 to privatize the
airports of Fortaleza and Porto Alegre (hereinafter referred to as Group company Fortaleza and Group company Porto Alegre). In
the International Activities & Services segment (formerly External Activities & Services, renamed as at January 1, 2018), start-up
costs were €12.3 million in 2017. Operations were taken over on January 2, 2018.
On April 11, 2017, Fraport took over operations of 14 Greek regional airports. Below, the two companies Fraport Regional Airports
of Greece A and Fraport Regional Airports of Greece B are referred to collectively as “Fraport Greece”. The revenue generated
in the 2017 fiscal year amounted to €234.9 million. Fraport Greece generated EBITDA of €117.4 million, EBIT of €84.9 million,
and a result of €13.5 million. The amounts were allocated to the International Activities & Services segment.
When looking at the comparison to the previous year, it is important to point out that in the third quarter of 2016 Fraport AG
received payments of approximately US$270 million (€241.2 million) from the project company PIATCO in connection with the
terminal project in Manila. From the amount received, Fraport is required to make repayments in an expected amount of
€42.4 million to the German government for the payment received in fiscal year 2008 in connection with a federal guarantee for
investments abroad (GKA). €34.1 million of this amount was repaid in 2016, which led to an increase in other operating expenses
in fiscal year 2016. The remaining amount of €198.8 million increased both Group EBITDA and Group EBIT. Taking exchange
rate effects into account, Group EBT increased due to a compensation payment of €189.6 million. An amount of €121.4 million is
attributable to the Group result for 2016. The amounts were allocated to the International Activities & Services segment.
With effect on October 21, 2016, Fraport sold 10.5% of the shares in the parent company of the operating company of Pulkovo
Airport in St. Petersburg, Thalita Trading Ltd. The gain from the sale of shares amounted to €40.1 million, the full amount of which
impacted Group EBITDA and Group EBIT, and €36.4 million of which impacted Group EBT. The amounts were allocated to the
International Activities & Services segment.
There were no further significant changes in the companies included in consolidation nor any other significant increases or reduc-
tions in shareholdings. The companies included in consolidation and the disclosures of shareholding pursuant to Section 313 (2)
of the HGB are to be found in the Group notes.
An overview of the calculation of financial key figures and a description of specialist terms are presented in the chapter “Glossary”.
The Executive Board approved these consolidated financial statements and this Group management report for publication on
February 28, 2018. The Supervisory Board gave its approval on March 15, 2018.
Fraport Annual Report 2017
Group Management Report / Overview of Business Development
45
Overview of Business Development
Situation of the Group
> Operational take-over of 14 Greek regional airports in April 2017
> Further development of strategy based on the mission statement & derivation of programs
> Revision of the non-financial performance indicators
Economic Report
> Fraport was awarded the tender to operate the airports in Fortaleza and Porto Alegre, Brazil, and took over operations on
January 2, 2018
> Strong passenger growth in Frankfurt and at the Group airports
> Positive financial development
> Correspondingly, earnings per share amounted to €3.57 (2016: €4.07)
> Free cash flow of €393.1 million significantly exceeded dividend distribution
> Increase of net financial debt to €3,512.4 million and the gearing ratio of 94.2% due to the cash outflows in connection with
the acquisitions in Greece and Brazil
> Shareholders' equity ratio fell to 34.4% (–6.2pp)
> Significant increase in value added in the Group by €60.8 million to €229.9 million
> Solid development of the non-financial performance indicators
> The annual average number of employees was 20,673 (2016: 20,322)
> Continuing focus on innovations and ideas and on the environment and society
> Share price increase by 63.5% to €91.86
Outlook Report
> Positive passenger forecasts Group-wide
> Revenue growth to up to approximately €3.1 billion as well as Group EBITDA between approximately €1,080 million and ap-
proximately €1,110 million forecast for 2018
> With capital expenditure slightly under €1 billion, free cash flow for 2018 noticeably below the level in 2017 and forecast to
remain negative
> Increase in net financial debt to up to €4 billion and a slightly higher gearing ratio expected
> No risks jeopardizing the Group as a going concern discernible
> Stable dividend per share of €1.50 for the 2017 fiscal year
46
Group Management Report / Situation of the Group
Fraport Annual Report 2017
Situation of the Group
Business Model
The following section provides an overview of the Fraport Group’s fundamental business model and most economically important
Group sites as well as their competitive positions.
A leading international airport group
Fraport Group (hereinafter also referred to as: Fraport) is among the leading global airport groups with its international portfolio.
Thereby, Fraport provides all airport and terminal operation services and associated services. Fraport also provides planning and
consultancy services and has operational and administrative activities. Passenger traffic, which impacts on a majority of the ser-
vices the Group provides, is key to the Group’s revenue and earnings performance.
The Fraport Group is divided into four segments: Aviation, Retail & Real Estate, Ground Handling, and International Activities &
Services. The main site is Frankfurt Airport, one of the biggest passenger and cargo airports in the world. Fraport AG Frankfurt
Airport Services Worldwide (hereinafter: Fraport AG) is the owner of Frankfurt Airport. Fraport’s strength lies in an integrated
business model in airport management, which guarantees comprehensive know-how in all airport services. Fraport provides the
entire range of airport and airport-related services at the Frankfurt site.
The Aviation segment covers the operation of landside and airside infrastructure at the Frankfurt site and thus covers the area of
airport charges, which is legally regulated in Germany, and security services. This section is responsible for ensuring safe, effi-
cient, and customer-oriented traffic in the flight operating areas as well as the operational implementation of airport and air safety
tasks in compliance with legal requirements. The close cooperation with authorities, including the German Federal Police, is of
great importance to ensure smooth operation of the airside and landside processes.
The Retail & Real Estate segment is primarily responsible for the retail activities and is responsible for the marketing of real estate
and land at Frankfurt airport. Its activities extend from the management of buildings and facilities through the management of the
parking and retail areas to the rental of advertising space. Particular focus is placed on networking within existing channels of
interaction as well as on further digitization of retail offerings.
The Ground Services, ranging from loading and passenger services through airmail and luggage transport to freight handling at
Frankfurt Airport are summarized in the Ground Handling segment. The section is responsible for the quality of the processes and
thus ensures the quality of Frankfurt Airport’s role as a hub. The segment also includes the provision of corporate infrastructure,
in particular the baggage transfer system, at the Frankfurt site.
The International Activities & Services segment includes the operation, maintenance, development, and expansion of airports and
infrastructure facilities in Germany and abroad. This also includes the “Operational Readiness and Airport Transfer” (ORAT) ser-
vices. These services encompass consulting services and customized solutions to the challenges of airport management. An
extensive ORAT project for the inauguration of a new terminal at Bahrain Airport has been running since the summer of 2017.
The segment was expanded to include the take-over of the operations of 14 Greek regional airports in April 2017. The Brazilian
Group companies Fortaleza and Porto Alegre have also been a part of the segment since June 2017.
Fraport Annual Report 2017
Group Management Report / Situation of the Group
47
Key sites
Fraport Group airports
Continent
Site
Europe
Germany: Fraport AG
Slovenia: Fraport Slovenija
Greece: Fraport Greece
Bulgaria: Fraport Twin Star
Germany: Hanover
Russia: NCG/Thalita
South America
Brazil: Fortaleza & Porto Alegre
Peru: Lima
Turkey: Antalya
Asia
China: Xi'an
India: Delhi
1) Extension option.
2) Share of voting rights: 51%, dividend share: 50 %.
Airport
Change in %
Term
Frankfurt
Ljubljana
14 Flughäfen
Varna
Burgas
Hannover
St. Petersburg
Fortaleza
Porto Alegre
Lima
Antalya
Xi'an
Delhi
100
100
73.4
60
60
30
25
100
100
70.01
50/512)
24.5
10
1924
2014
2017
2006
2006
1998
2010
2017
2017
2001
1999
2008
2006
no time limits
20541)
2057
2041
2041
no time limits
2040
2047
2042
20411)
2024
no time limits
20361)
In addition to the aforementioned airports, Fraport operates retail areas at the airports in Baltimore, Cleveland, and Pittsburgh
through its Group company Fraport USA. Subject to a pending approval, Fraport USA will also take over operation of the man-
agement of the retail area in the JetBlue Airways Terminal 5 at JFK Airport in New York, in the first half of 2018. The Boston
Airport agreement terminated as at October 31, 2017 (see also the “Significant Events” chapter starting on page 77).
Germany – almost exclusively Frankfurt Airport – was once again the most important site of the Fraport Group in the past fiscal
year with a share of 66.0% in the Group result (2016: 63.7%). Among others, the share of the Slovenia site rose compared with
the previous year, to 1.5% (2016: 0.8%). The contribution to earnings (3.7%) from the Greece site (hereinafter: Fraport Greece)
was added in 2017. The Turkey site recovered in fiscal year 2017 and made a positive contribution of 4.3% (in the previous year:
negative contribution). In contrast, the Brazil site, due to start-up costs without offsetting revenue in preparation for the operational
take-over of the Brazilian airports in January 2018, and the USA site, due to the extraordinary impairment loss for the concession
in Boston, made a negative contribution to the Group result.
Share in Group result by site
In %
0.6
Other Sites
3.2
China
4.3
Turkey
3.7
Greece
66.0
Germany
1.5
Slovenia
15.0
Peru
5.7
Bulgaria
48
Group Management Report / Situation of the Group
Fraport Annual Report 2017
External influences
The main external factors influencing Fraport’s business model, both in Germany and abroad, include disruptive events in addition
to economic, political, and regulatory factors. These factors can affect both the passenger numbers and the cargo volume at the
Group airports and have a direct influence on the economic situation of the Fraport Group.
Economic growth fosters business travel and also promotes the prosperity of a society as a whole, which is a prerequisite for
private travel. Over the past 15 years, the world economy and world passenger traffic have grown in parallel: on average, by 3.8%
and 3.9% per year, respectively. Currency rates are closely linked to economic development as well as to the interest rate policies
of central banks and international currency trading. These, in turn, affect the appeal of tourist destinations, travel flows, and
passengers’ buying behavior. This development is very important, in particular for tourist locations such as Greece, Varna, Burgas,
and Antalya, which have a low level of originating passengers. However, the two sites in Brazil are disproportionately affected by
the local situation and risks, as more than 90% of their air traffic is domestic travel.
Another major influence on the frequency of travel in the aviation sector is the price of jet fuel and thus the price of crude oil. A
high crude oil price usually translates to a rise in ticket prices. This dampens demand for air traffic.
Politics affect Fraport’s business activities at different levels. At a regional level, restrictions on operations, such as bans on night
flights, have a negative impact on the airline offering and thus indirectly also negatively affect the passenger numbers and cargo
volumes. Conversely, the lifting of restrictions has a positive influence. A similar situation can be observed at the national level:
The introduction of special taxes, such as the aviation tax in Germany, depresses demand for air traffic and distorts competition
at the European level. Through the deregulation of aviation law, international politics can open up new markets for air traffic or
enlarge existing markets. However, politicians can impose sanctions such as travel restrictions, which again close off markets, as
was shown by the sanctions in the context of the tensions between Russia and Turkey in fiscal year 2016. Britain’s withdrawal
from the European Union (EU) is also a factor that may affect air traffic in various ways, depending on the outcome of the exit
negotiations: Modified entry requirements and aviation laws as well as an influence on the exchange rate between the pound and
euro are manifestations of this.
Disruptive events that have significant impact on passenger numbers include strikes and weather conditions. Their occurrence
and impact can vary greatly from year to year and are unpredictable. In the 2016 fiscal year, which featured a high level of strikes,
Frankfurt Airport reported a loss of about 43,000 passengers per strike day. With a total of nine days on strike, this translated to
approximately 387,000 passengers. In 2017, however, there were no major strikes at Frankfurt Airport or at any other Group sites.
However, 228,000 passengers were affected by weather-related flight cancellations in 2017, compared to only 86,000 passengers
in the previous year. In addition, natural disasters such as floods or volcanic eruptions can have a negative effect on global air
traffic.
Terrorist attacks in Europe and around the world negatively affect passenger numbers in Frankfurt and at Group sites. International
media offer varying reports on such attacks, depending on the frequency and intensity. As a result, there are varying degrees of
decline in incoming traffic in different markets, and experience has shown that these are usually temporary.
Competitive position at the Frankfurt site
With 64.5 million passengers, Frankfurt Airport was the fourth largest passenger airport in Europe in the past fiscal year after
London Heathrow (78.0 million), Paris Charles de Gaulle (69.5 million) and Amsterdam Schiphol (68.5 million), and ahead of
Istanbul Atatürk (63.9 million). In Germany, Frankfurt Airport was by far the largest passenger airport, ahead of Munich with
44.6 million passengers in the 2017 fiscal year. Based on its cargo throughput (air freight and airmail) of 2.2 million metric tons,
Frankfurt has remained Europe’s largest airport ahead of Paris Charles de Gaulle and Amsterdam Schiphol. In Germany, Leip-
zig/Halle Airport was the next largest competitor with 1.1 million metric tons of cargo. Compared across continents, Frankfurt
Airport is among the largest passenger and cargo airports in the world.
Fraport Annual Report 2017
Group Management Report / Situation of the Group
49
In respect to its competitive position, Frankfurt Airport competes, on the one hand, with airports in its catchment area for originating
passengers and, on the other hand, for national and international transfer passengers on the basis of its function as an interna-
tional transfer airport. The main customer at the Frankfurt site remains Deutsche Lufthansa, which accounted for more than 60%
of passengers in Frankfurt in the 2017 fiscal year. The largest competitors for transfer passengers are primarily the hub airports
London Heathrow, Paris Charles de Gaulle, Istanbul Atatürk, Amsterdam Schiphol, and Munich, which are also dominated to
varying degrees by their resident main customers British Airways, Air France, KLM, Turkish Airlines and Deutsche Lufthansa. Due
to the dynamic development of many airlines and airports from the Persian Gulf region, the Frankfurt site is increasingly also in
intercontinental competition with these sites, currently particularly with Dubai.
In particular, the expansion and modernization programs at the Frankfurt site contribute to maintaining and improving its interna-
tional competitive position. The completed projects Runway Northwest or Pier A-plus as well as in particular Terminal 3, which is
scheduled to take up operations in 2023, ensure airport capacities and the required level of infrastructure for the long term in order
to give the site a successful, lasting competitive edge. In addition, low-cost traffic is continuing to gain importance at Frankfurt
Airport. Fraport will meet the needs of the growing passenger demand by moving up construction of Pier G from the second
construction phase for Terminal 3. The construction work on this pier is set to start in the second half of 2018.
The increased customer focus also has a positive impact on the competitive position (see also the chapter titled “Strategy” begin-
ning on page 53). The ongoing enhancement of CargoCity North and CargoCity South also supports the competitive position in
the cargo segment.
Competitive Position Outside the Frankfurt Site
The competitive situation at the very tourist-oriented sites Greece and Antalya, Turkey, as well as in Varna and Burgas, both in
Bulgaria, differs from that of the Frankfurt site. The key drivers of the sites’ traffic and business development are tourist providers’
charter traffic without a significant focus on individual airlines. The performance of each site depends particularly on the appeal of
the respective regions with regard to safety, quality, price level, and entry requirements.
In a public bidding process by the Brazilian Government to privatize the two airports in Fortaleza and Porto Alegre, Fraport was
awarded the tender in March 2017. On January 2, 2018 the Group companies Fortaleza and Porto Alegre took over operations.
Fraport expects capital expenditure on airport infrastructure of around €700 million in the first five years. Both airports have a
similar traffic structure, with over 90% domestic traffic made up mostly of originating passengers. Fortaleza Airport, in particular,
offers above-average potential for growth given its favorable geographical location in northern Brazil with proximity to North Amer-
ica and Europe as well as a relatively underdeveloped region economically. Porto Alegre Airport, located in the southern part of
the country, also offers solid potential for growth, albeit at a lower level. In the past fiscal year, Fortaleza Airport was the twelfth-
largest airport in Brazil with over 5.9 million passengers. The largest airline at the site is the Brazilian company TAM with a market
share of 36%, followed by GOL at 31% and Avianca at 13%. Significant capital expenditure is being invested in modernizing and
expanding the terminal. Porto Alegre Airport is the ninth largest in the country with approximately 8.0 million passengers. The
largest airline at the site is GOL with a market share of 33%, followed by TAM at 27% and Azul at 26%. Capital expenditure
priorities will be to modernize and expand both terminals and the apron areas as well as to extend the runway.
The Ljubljana site is the airport for Slovenia’s capital city and at the same time the country’s largest airport with around 1.7 million
passengers. Its further development is therefore essentially connected to the country’s economic and tourist prosperity and the
development of neighboring regions and their airports, for example Zagreb in Croatia or Trieste in Italy. The key customer in
Ljubljana is Adria Airways, which serves around 60% of the passenger traffic. In addition, various destinations are also served by
low-cost traffic providers, which were able to achieve significant gains in market share at the Ljubljana site in recent years. Short
and long-term capital expenditure is necessary to increase the quality of service at the airport and improve operational processes.
The largest capital expenditure in this context will be the expansion of the terminal.
50
Group Management Report / Situation of the Group
Fraport Annual Report 2017
Fraport Greece has been operating 14 Greek regional airports since April 11, 2017. These include the airports in Kerkyra (Corfu),
Chania (Crete), Kefalonia, Kavala, Aktio/Prevezka, Thessaloniki, Zakynthos, Mykonos, Skiathos, Santorini (Thira), Kos, Mytilini
(Lesbos), Rhodes, and Samos. With just under 27.6 million passengers in fiscal year 2017 and growth of 10.3% compared with
the previous year, the sites benefited to a great extent from the appeal of Greece as a tourist destination, but doubtless also from
the change of tourism traffic to Turkey. At 75%, the high share of international travelers demonstrates the importance of Greece
as a holiday destination. Passengers from the United Kingdom represent the largest passenger group at approximately 23%.
Based on passenger numbers, Aegean Airlines/Olympic Air is the largest airline at the 14 airports with a passenger share of 21%,
followed by Ryanair with an approximately 13% share of passengers. The 40-year concession agreements budget for capital
expenditure of approximately €400 million on airport infrastructure in the first four years. Most of this will be spent on a compre-
hensive expansion and extension project. Five new terminals will be built, and six terminals will be expanded at the sites.
In Peru, the Lima site continues to benefit from the relatively high economic growth rate of the country as well as ever-increasing
tourist demand. In addition, the airport benefits from a good geographical location, which is particularly attractive for the transfer
traffic between South and North America. Jorge Chávez Airport is Peru’s most important airport and is once again among the ten
largest airports in South America with over 20.6 million passengers in the last fiscal year. The site’s main customer is LAN Perú,
which belongs to the LATAM Group and carries more than half the airport’s passengers. Due to passenger growth, the Lima site’s
capacity is reaching its limit. In October 2017, a call for tenders was announced for the construction of a new terminal, a new
runway including aprons and taxiways as well as other peripheral infrastructure. The signing of the agreements and start of con-
struction are planned for the second half of 2018. The expansion of the airport with planned capital expenditure of approximately
US$1.5 billion is necessary in order to be able to provide adequate infrastructure for the expected growth in traffic and to strengthen
the competitive position in South America. The completion of the second runway is scheduled for 2021, and the terminal should
be completed by 2024.
The Black Sea airports in Burgas and Varna, with just under 3.0 million and approximately 2.0 million passengers, respectively,
were the second and third-largest passenger airports in Bulgaria after Sofia. The sites’ key passenger groups were passengers
from Germany (over 19%), Russia (approximately 18%), and the United Kingdom (approximately 12%). As a result of the inaugu-
ration of the terminals in the 2013 fiscal year, both tourist sites initially have sufficient capacity to be able to serve the growth that
is expected in these regions in the medium term. The plans also provide for successive extension measures, such as the expan-
sion of the departure area at Burgas Airport, which is to be completed by 2021.
With some 26.3 million passengers, the airport in Antalya was the third-largest passenger airport in Turkey in the past fiscal year
behind Atatürk and Sabiha Gökçen airports in Istanbul, and one of the dominant tourist airports in the Mediterranean region. The
largest passenger groups were travelers from Russia and Germany, accounting for a share of around 39% and 22%, respectively.
Compared to the previous year, there were significant recovery effects especially among passengers from Russia after the Rus-
sian sanctions against tourist charter traffic were lifted and the Russian government did not issue any new sanctions in 2017.
However, the number of passengers from Western Europe was below the previous year’s level due to the sometimes tense
situation in Turkey. The development of traffic in Antalya is still marked by uncertainty. Mandatory capital expenditure on airport
infrastructure is now no longer required.
In the previous fiscal year, Xi’an Airport was the eighth largest airport in China, carrying around 41.9 million passengers. The site
is largely influenced by a high percentage of originating passengers. Several airlines with growth rates in double digits are devel-
oping very dynamically at the site. These include China Eastern Airlines, which, with a market share of almost 30%, is the largest
passenger airline. The transfer market, which has to date only been relatively small, offers the airport further potential. Due to the
high growth prospects of the site, further expansion will be carried out in the next few years.
Additional information about business development in the past fiscal year can be found in the chapter titled “Economic Report”
beginning on page 75.
Fraport Annual Report 2017
Group Management Report / Situation of the Group
51
Structure
Changes compared with the previous year
Compared with the previous year, no fundamental changes were made to the legal and organizational Group structure in the 2017
fiscal year. There were no significant increases or reductions in shareholdings.
Frankfurt Airport Retail GmbH & Co. KG was founded with effect from January 1, 2017. The joint venture between Fraport AG
and retail company Gebr. Heinemann operates all Heinemann Duty Free & Travel Value Shops and Concept Stores at the Frank-
furt site. It aims to provide passengers with a comfortable shopping experience and optimize profitability by combining the exper-
tise of both partners.
Operation of 14 Greek regional airports was taken over on April 11, 2017. The concessions have a term of 40 years. Fraport
Greece thus undertakes to invest in the airport infrastructure and further develop the airports through optimized processes and
applying its specific expertise (see also “Significant Events” chapter starting on page 77).
At the beginning of June 2017, Fraport AG acquired all shares in two companies founded in connection with the management and
operation of the airports in Fortaleza and Porto Alegre in Brazil, Fraport Brasil S.A. Aeroporto de Porto Alegre and Fraport Brasil
S.A. Aeroporto de Fortaleza. The newly founded companies were not yet active in the fiscal year 2017. The operational take-over
of the operation of the companies took place on January 2, 2018.
Fraport AG has been working together with Group companies FRA Vorfeldkontrolle and FraGround in a joint operation since July
1, 2017. This restructuring, in particular the joint control of essential personnel and social affairs, ensures the quality of ground
handling by means of coordinating processes more closely and improved cooperation among all parties involved. This arrange-
ment of cooperation on the organization of work means there is no longer a need for temporary workers and third-party personnel
of the Group company FraGround at Fraport AG. The portfolio includes baggage, freight, and aircraft handling as well as passen-
ger, baggage and freight transport. The mapping of check-in and VIP processes as well as technical services round off the product
range.
As of January 1, 2018, the “Airport Security Management” strategic business unit has been fully integrated into the “Airside and
Terminal Management, Corporate Safety and Security” strategic business unit of Fraport AG. By merging the two strategic busi-
ness units within the Aviation segment, interfaces have been reduced and the responsibilities have been appropriately pooled.
This will have a positive impact on efficiency and quality of service in the medium term. Furthermore, the merger allows for
improved focus on customers and overarching control of all activities within the terminal in Frankfurt from a single unit.
To illustrate the growing operational share of the international Group companies, the External Activities & Services segment was
renamed “International Activities & Services” as of January 1, 2018.
Legal structure of the Group
In contrast to time-limited airport operating models, the Fraport Group parent company, Fraport AG, wholly owns and operates
Frankfurt Airport with no time limits. With over 10,200 employees, Fraport AG, which has been stock exchange-listed since 2001,
is also the biggest single company of the Group, which has more than 20,600 employees. It directly or indirectly holds the shares
in the other Group companies (companies pursuant to Section 313 (2) of the German Commercial Code (HGB)) and its head
office is in Frankfurt/Main.
52
Group Management Report / Situation of the Group
Fraport Annual Report 2017
Including the Frankfurt site, Fraport was active at 29 airports through Group companies at the time of preparing the consolidated
financial statements. The most significant Group companies include the Group companies Lima (concession agreement to operate
Lima Airport until 2041 with an extension option), Fraport Greece A & B (concession agreements to operate 14 regional airports
until 2057), Fortaleza and Porto Alegre (concession agreements to operate Fortaleza Airport until 2047 and Porte Alegre Airport
until 2042), Antalya (concession agreement to operate the terminals until 2024), Twin Star (concession agreement to operate the
airports in Varna and Burgas until 2041), Fraport USA (agreements on the time-limited marketing of retail areas at the Baltimore,
Cleveland, and Pittsburgh airports), Fraport Slovenija (right to use the airport in Ljubljana until 2054), and Xi’an (capital share in
the operating company of the airport in Xi’an). Whereas the Group companies Fraport Slovenija, Fortaleza, Porto Alegre, Fraport
USA, Fraport Greece A & B, Lima, and Twin Star are fully consolidated in the Fraport Group, the Group companies Antalya (joint
venture) and Xi’an (associated company) are included using the equity method.
As at December 31, 2017 there were 54 companies consolidated excluding companies accounted for using the equity method,
and 74 companies including companies accounted for using the equity method (in the previous year: 51 and 70 companies re-
spectively). For a detailed overview of the shareholdings within the Group, please see Group note 56.
Organizational Group structure
As a management body, the Executive Board bears the strategic and operational responsibility for the Group. The Executive
Board consisted at the time of preparing the consolidated financial statements of the four members Dr Stefan Schulte (Chair),
Anke Giesen (Executive Director Operations), Michael Müller (Executive Director Labor Relations), and Dr Matthias Zieschang
(Executive Director Controlling and Finance).
A detailed description of the structure and operation of the management and control body is presented in the “Joint Statement on
Corporate Governance”. The annually updated Joint Statement on Corporate Governance does not form part of the annual audit
of the consolidated statements by the auditor and can be found in the chapter “To Our Shareholders”.
For the purpose of managing the Group, the Executive Board has divided the business activities into four segments: “Aviation”,
“Retail & Real Estate”, “Ground Handling”, which are largely active at the Frankfurt site, as well as “International Activities &
Services”, which primarily includes the Group companies outside of Frankfurt. The segments encompass the strategic business
units and service units of Fraport AG and also include the Group companies involved in each of these business processes.
The Aviation segment incorporates the strategic business unit “Airside and Terminal Management, Corporate Safety and Secu-
rity” as well as the Group companies FraSec and Fraport Ausbau Süd.
The Retail & Real Estate segment consist of the “Retail and Properties” strategic business unit. The Group companies Fraport
Immo and the joint venture Frankfurt Airport Retail also belong to this segment.
The Ground Handling segment includes the “Ground Services” strategic business unit as well as among others the Group com-
pany FraGround and the joint venture Frankfurt Cargo Services.
The International Activities & Services segment primarily consists of the “Global Investments and Management” strategic busi-
ness unit as well as the Group companies that are not integrated in the business processes at the Frankfurt site, including Lima,
Fraport Greece A & B, Fortaleza and Porto Alegre. In addition to activities outside of the Frankfurt site, the segment includes the
“Integrated Facility Management”, “Information and Telecommunication”, “Airport Expansion South”, and “Corporate Infrastructure
Management” service units.
In addition to the aforementioned strategic business units and directly allocated service units, Fraport AG’s ten central units in
Frankfurt provide, among other things, Group-wide services. The costs of the central units are allocated to the four segments
appropriately. The central units include the areas of “Controlling”, “HR Top Executives”, and “Corporate Communications”.
Fraport Annual Report 2017
Group Management Report / Situation of the Group
53
At the time the consolidated financial statements were prepared, the organizational structure of the Fraport Group was as follows:
Segment structure
Segments1)
Directly assigned strategic
business and service units of
Fraport AG
Aviation
Airside and Terminal
Management, Corporate Safety
and Security
Fraport Group
Retail & Real Estate
Retail and Properties
Groung Handling
Ground Services
International Activities & Services
Global Investments and
Management
Integrated Facility Management
Information and
Telecommunication
Airport Expansion South
Corporate Infrastructure
Mangement
Central units
Controlling | Finance and Investor Relations | Internal Auditing | HR Top Executives | Human Resources | Accounting | Legal Affairs and Compliance | Corporate Development,
Environment and Sustainability | Corporate Communications | Central Purchasing, Construction Contracts
1) Including assigned Group companies.
Strategy
Changes compared with the previous year
In fiscal year 2017, Fraport began implementing its Group strategy developed based on the mission statement implemented in
2015/2016. To reflect the strategic objectives of the mission statement, ten programs were initiated Group-wide. The implemen-
tation of the programs and the measures derived from them began in 2017, and this will continue into the coming years.
Group strategy remains oriented toward long-term market development
Fraport continues to guide its strategy by the long-term forecasted development of the global aviation market and its market
trends. Here, renowned aviation associations and aircraft manufacturers expect long-term stable growth of the aviation market.
This is derived, in particular, from projected global economic growth and the continuing global expansion of the middle class,
which consumes more. Supporting effects continue to result from the continuing internationalization of labor and education. In-
creasing traffic is also forecasted from migration and tourism. The intense competition between airlines has the effect of promoting
growth. Disproportionate growth is still expected from and in the economic emerging markets.
Forecasts for the long-term development of global air traffic
Source
Airbus
Boeing
Embraer
ACI
Period
Reference
until 2038
until 2038
until 2038
until 2040
Revenue passenger kilometers
Number of passengers
Revenue passenger kilometers
Number of passengers
CAGR
+4.4 %
+4.7 %
+5.8 %
+4.5 %
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Short-term development of air traffic remains volatile
Despite the long-term growth forecasts, the short-term development of aviation markets continues to be marked by uncertainties
in individual markets. These primarily result from geopolitical conditions, such as in Ukraine or the wider Middle East, potential
terrorist attacks, and the possible spread of epidemics, but also from the economically uncertain situations of various economies.
In addition, the various companies in the aviation industry, and airlines in particular, continue to be negatively influenced by intense
competition, the rolling out of national taxes, such as the German aviation tax, and potential labor disputes. Positive and negative
effects also arise from the appreciation and depreciation of currencies and from price fluctuations on commodity markets.
The aforementioned uncertainties also affect Frankfurt Airport, as it is an international hub. Individual Group airports may see
shifts in passenger flows, albeit temporarily, to other destinations. For example, Antalya Airport was significantly affected by this
in 2016 in particular. Due to the high share of Russian-dominated traffic, the St. Petersburg, Varna, and Burgas sites are also
affected by political uncertainties related to Russia.
Fraport monitors various lead indicators to identify trends in travel or freight flows at an early stage. At an economic level, these
include industrial production, purchasing managers indices, the logistics indicator or private consumption in different economies.
In addition, indicators specific to flight markets such as booking forecasts or the airlines' publications of flight plans are part of
such monitoring activities.
Group mission statement
The changing conditions in global aviation influence the entire air aviation sector. Price wars between airlines as well as passen-
gers’ price-conscious travel behavior are leading to more competition among airports. At the same time, the quality of the service
as well as providing reliable and fast processes are increasingly gaining importance as competitive factors.
The continued development of the Group strategy, based on the mission statement implemented in 2015/2016, draws on existing
and anticipated changes to general and market conditions, and gears the Fraport Group to achieving success in this dynamic
environment. The mission statement’s vision of establishing Fraport as Europe’s best airport operator while setting standards
worldwide is the basis of the Group strategy.
From the passengers’ perspective, airports are becoming increasingly interchangeable. Transfer passengers can often choose
between several airlines or alliances and thus different hubs. Price-sensitive passengers have a wide range of low-cost carriers
(LCC) to choose from. Fraport has responded to this expanding market by opening up the Frankfurt site to LCC. For Fraport, a
factor critical for competitive success is to offer various customer groups appropriate products upon departure, arrival or transfer
at Frankfurt Airport. With the mission statement “Gute Reise! We make it happen”, the focus of the entire company that is needed
for this has been placed on customer. The further penetration of the mission statement's aspirations throughout the company will
also be continued at the segment level and in the Group companies over the next few years.
The implementation of the strategy is subject to company-wide planning and management based on numerous measures in which
representatives of various business units and companies are involved. Strategic teams draw up annual targets to put the strategic
goals of the mission statement in concrete terms. In total, ten programs are being pursued in order to promote the achievement
of the objectives. In addition, sub-strategies are drawn up and pursued within the segments, which do not deviate from the over-
arching Group objectives. They operationalize the Group objectives in a manner specific to the different sections and make rec-
ommendations.
The mission statement includes the Group objectives: “Growth in Frankfurt and internationally”, “Service-oriented airport operator”,
“Economically successful through optimal cooperation”, “Learning organization” and “Fairness and recognition for partners and
neighbors”.
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In the following section, the strategic objectives and measures towards attaining the vision are described in detail.
Objective: Growth in Frankfurt and internationally
Frankfurt is Fraport AG’s home site and will remain so in the future. Fraport seeks to further develop the Frankfurt site as a hub
and secure and increase its appeal for network carriers. The role of Frankfurt Airport as a leading cargo hub in Europe will also
be strengthened. In order to create the conditions for further growth of our main customer at the Frankfurt site, Deutsche Lufthansa,
Fraport AG and Deutsche Lufthansa have entered discussions on strengthening their partnership in the medium and long term.
The goal is to consistently and jointly take advantage of the potential to improve efficiency and cut costs. In addition, potential for
growth should also be realized in order to open up new sources of revenue and thus secure the Frankfurt site’s future viability and
enduring competitiveness. Given the strong growth of low-cost traffic in Europe, it is also important to develop the Frankfurt site
in this respect.
In terms of infrastructure, Terminal 3 in the southern part of the airport will be built to meet the expected growth in air traffic. With
Piers H and J, the Terminal should begin operations in 2023. Pier G should be completed beforehand. Construction work on this
pier is set to start in 2018.
To reach the strategic objective “Growth in Frankfurt and internationally”, special focus was placed on international business,
which is already a key factor for Fraport’s economic development, within the framework of the 2017 strategy process featuring the
“Advancing the contribution of international business” program. In addition to portfolio management and the development of re-
turns, in particular by optimizing the Group’s current airports, the program also includes acquisition projects that Fraport is con-
sidering for future investments.
The international portfolio continues to grow and generates a stable return in the long term. It continually increases its share of
the Group’s comprehensive income. In April 2017, Fraport completed the operational take-over of 14 regional airports in Greece.
In the next few years, extensive modernization and expansion measures are planned at all 14 airports to ensure they are well
equipped for the future. In addition, operation of the airports in Fortaleza and Porto Alegre, Brazil, was taken over on January 2,
2018. Here too, measures for the further development of the infrastructure are subsequently set out contractually.
Appropriate financing instruments for financing measures to be carried out in the near future are selected depending on how
attractive the price is, the respective availability of funds and the volume of the financing, all while complying with and adhering to
a balanced financing mix. The aforementioned projects are mainly financed on a long-term basis (see also the chapter titled
“Finance management” starting on page 64).
Fraport uses the traffic volumes at Frankfurt Airport as well as at the Group airports as an indicator for the Group-wide growth in
traffic. The corresponding figures can be found in the chapter titled “Business Development” starting on page 79.
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Fraport measures the Group-wide growth in the result and controls this by monitoring the development of, among other things,
Group EBITDA and the Group result, the ROFRA, net financial debt, and free cash flow. Additional key financial performance
indicators relating to the Group objective “Growth in Frankfurt and internationally” can be found in the chapter titled “Control”
beginning on page 58. A description of the development of performance indicators during the past fiscal year can be found in the
chapters titled “The Group’s Results of Operations”, “Asset and Financial Position”, and “Value Management” beginning on page
81. The associated forecasted figures for the 2018 fiscal year can be found in the chapter titled “Business Outlook” beginning on
page 126.
The key risks and opportunities associated with the expansion of airport infrastructure in and outside of Frankfurt can be found in
the “Risk and Opportunities Report” beginning on page 105.
Objective: Service-oriented airport operator
The mission statement “Gute Reise! We make it happen” shows the aspiration of having a strong customer and service orientation
at all Group sites. To this end, Fraport aims to offer even better and more customized services for customers. The Group’s vision
is to become Europe’s best airport operator through efficient and reliable processes as well as infrastructure that is in keeping
with requirements. Fraport therefore develops value-creating services for customers, for example the door-to-gate service or the
“Frankfurt Airport Rewards” customer loyalty program at the Frankfurt site.
To improve the passenger experience and quality of service, a comprehensive program has been launched at Frankfurt Airport in
recent years, and initial measures are already being implemented. In the future, Fraport wants to offer passengers at its home
site a special passenger experience.
Not only at Frankfurt Airport but also at all fully consolidated Group airports, the focus is on improving the quality of service and
customer satisfaction. For example, the Group company Twin Star developed company objectives under the motto “We place the
airport in the traveler’s heart” in the past fiscal year.
The program “Shaping passenger services FRA” makes a significant contribution to achieving the objective of “Service-oriented
airport operator”. The goal is to offer all passengers a seamless trip, intuitive design, and well-integrated technologies. This re-
quires customized airport infrastructure and ultimately leads to the “autonomous airport”, which is equipped with comprehensive
self-services, including check-in and baggage drop. Other areas along the travel chain, such as security checks and retail offers,
are also being looked at, given evolving technologies and concepts (e.g., Easy Pass) and changing shopping behavior (e.g., e-
commerce).
Fraport uses, among other things, two non-financial performance indicators to measure the objective of “Service-oriented airport
operator”. The global passenger satisfaction in Frankfurt reflects the success of the program “Great to have you here!”, which
aims to increase passenger satisfaction and loyalty. Also, baggage connectivity is an essential measure for performance as a hub
airport. The punctuality rate is another quality indicator for Frankfurt as a hub airport.
The key performance indicators relating to the Group objective “Service-oriented airport operator” can be found in the chapter
titled “Control” beginning on page 58. A description of their development during the past fiscal year can be found in the chapter
titled “Non-financial performance indicators” beginning on page 95; the associated forecasted figures for the 2018 fiscal year can
be found in the chapter titled “Business Outlook” beginning on page 126. More information can be found in the chapter titled
“Combined Separate Non-Financial Report”, which is not a part of the Group management report or the audit of consolidated
accounts by the auditor.
Objective: Economically successful through optimal cooperation
The integrated business model is a unique feature in Frankfurt. The site is to continue to be managed successfully and competi-
tively. The Group’s broad portfolio of services is to be used to achieve the strategic Group targets. Optimized collaboration within
the Group enables Fraport to hold up well in competition and operate successfully. In efficient cooperation, Fraport successfully
deals with a wide range of tasks and issues and develops an atmosphere of teamwork and networking throughout the entire
Group. Cutting costs and complexity increases the profitability of the Fraport Group and helps to contribute towards maintaining
its competitive position.
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The objective is to have all Group companies and segments provide their services under quality and cost structures that can
always keep pace with specialized air traffic service providers. For this purpose, Fraport AG initiated a company-wide program to
support the change of the personnel structure in fiscal year 2016. In particular, the focus was placed on the operating units, such
as Ground Services, which place a high demand on personnel. The program will improve the cost structure of personnel expenses
and secure the integrated business model at the Frankfurt site.
With a view towards making a contribution to optimizing the cost structure also in material costs and to reducing the environmental
impact at the same time, Fraport AG has set the objective of reducing energy consumption by 20% by 2020 compared to fiscal
year 2013 without significant capital expenditure.
Among other ways, the implementation of the third objective is pursued through the “Lowering unit costs, optimizing processes”
and “Lowering unit costs, digitizing administration” programs. Both programs seek to optimize the cost structure in particular at
the Frankfurt site. Above all, internal processes are being looked at. The key factors here will be digitization projects that aim to
make administration of the Group more efficient and lower its costs.
Key performance indicators relating to the Group objective “Economically successful through optimal cooperation” can be found
in the chapter titled “Control” beginning on page 58. A description of the development of performance indicators during the past
fiscal year can be found in the chapters titled “The Group’s Results of Operations”, “Asset and Financial Position”, and “Value
Management” beginning on page 81. The associated forecasted figures for the 2018 fiscal year can be found in the chapter titled
“Business Outlook” beginning on page 126. In addition, the Executive Board is examining further measures to improve profitability,
which are not part of the business outlook, and are shown by way of example in the chapter titled “Risk and Opportunities Report”
beginning on page 105.
Objective: Learning organization
As a learning organization, Fraport relies on good entrepreneurship, economic efficiency, and competitiveness. Risks and oppor-
tunities are recognized at an early stage, and changes in the market are anticipated. Fraport promotes innovation and new busi-
ness ideas. Fraport uses the resources and knowledge of its workforce in order to strengthen the Group as a whole. In doing so,
Fraport supports and sets the framework for development and qualification. Fraport reacts to demographic change and targeted
knowledge transfer with recruiting and retention management.
Fraport has adopted a digitization strategy to meet the challenges of the future, while at the same time taking advantage of the
corresponding opportunities digitization presents. It takes into consideration four dimensions as a framework for making strategic
decisions: Digital company, digital world of work, digital customer experience, and new digital business models. In addition, Fraport
evaluates digital technologies in terms of their relevance to its business model and adapts these.
To meet the demand of learning from one another within the Group, regular meetings with experts from the different Group sites
have been stepped up. The so-called “International Expert Working Group” meets several times a year at various sites to exchange
ideas on specific issues in airport management.
One of the programs to achieve the objective of “Learning organization” is “Developing new digital products”. The program, in
particular, focuses on the part of the digitization strategy that controls the development and networking of innovations that can be
commercialized.
More innovations and ideas in the Fraport Group can be found in the chapter titled “Research and Development” starting on page
98.
Objective: Fairness and recognition for partners and neighbors
Fraport aims to be respectful and appreciative of its partners and neighbors Group-wide. For Fraport, this includes reducing the
burden of airports on the environment and climate by compensating for such burdens. In the area of climate protection, Fraport
seeks to reduce Group-wide CO2 emissions to 125,000 metric tons by 2030 (see also chapter titled “Control” starting on page
58).
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At the Frankfurt site, active and passive noise abatement helps limit the impact of air traffic. One example of noise-reducing
measures are emission-related airport charges that provide financial incentives for airlines to use aircraft with low pollutant and
noise emissions. At the Group airports, noise abatement measures are managed and implemented in accordance with local
requirements.
Fraport takes its corporate responsibility seriously as an attractive and responsible employer for its employees. The objective
“Fairness and recognition for partners and neighbors” is pursued by way of the program “Designing the world of work of the future”.
The focus here is also on ensuring staff restructuring at Fraport in the long term, on the appeal as an employer in times of an
increasing lack of skilled workers as well as on the workplace of the future, including sustainable technological facilities and
equipment.
Fraport uses employee satisfaction, the ratio of women in management positions as well as the sickness rate to measure its
objective of being an attractive and responsible employer. In addition to CO2 emissions, the Executive Board has defined these
indicators as the most important non-financial performance indicators for the objective “Fairness and recognition for partners and
neighbors” in fiscal year 2017 (see also the chapter titled “Control” starting on page 58). A description of the development during
the past fiscal year can be found in the chapter titled “Non-financial performance indicators” beginning on page 95; the associated
forecasted figures for the 2018 fiscal year can be found in the chapter titled “Business Outlook” beginning on page 126.
An additional description of measures taken in the area of the environment and society is included in the chapters titled “Environ-
ment” and “Society” starting on page 99. More detailed information can be found in the chapter titled “Combined Separate Non-
Financial Report”, which is not a part of the Group management report or the consolidated audit of accounts by the auditor, as
well as on the Group’s website at www.fraport.com/responsibility.
Control
The Control chapter explains the most important key figures primarily used by the Executive Board to make the corporate
measures taken as part of the Group strategy measurable and to evaluate them. Here, the Executive Board differentiates between
financial and non-financial performance indicators.
Changes compared with the previous year
There were no fundamental changes to the Group's control system for the past fiscal year as a result of the strategy developed
further in 2017 or the implementation of programs of measures. The Executive Board continues to control the Group in accordance
with key financial and non-financial performance indicators, which are derived from the Group strategy. The Executive Board
assessed the non-financial performance indicators in fiscal year 2017 and derived them within the framework of the measures to
implement the Group strategy. For example, the punctuality rate, the equipment availability rate as well as the rate per 1,000
employees will no longer be defined as non-financial performance indicators from the fiscal year 2018. Nonetheless, the develop-
ment and comparison to the forecast as published in the 2016 Annual Report is included in the 2017 Group management report
in the chapter titled “Non-financial performance indicators” starting on page 95. Beginning with the Group management report
2017, the key non-financial performance indicators were defined as the ratio of women in management positions, the sickness
rate as well as the CO2 emissions, and these are included in the reporting and the Outlook Report.
In the area of value management, beginning in the 2017 fiscal year, the Fraport assets not included in depreciation and amortiza-
tion, in particular, assets under construction, will be recognized at full acquisition/manufacturing costs (at cost). In addition, the
weighted average cost of capital (WACC) decreased from 8.6% to 6.7%.
For more information on the two issues mentioned above, see the corresponding sections of the following chapter.
Financial performance indicators
For Fraport, the growth-oriented development of financial performance indicators is critical for the long-term success of the com-
pany. The overriding importance of these indicators is reflected in the Group strategy as a set of criteria for the Group objectives
“Growth in Frankfurt and internationally” and “Economically successful through optimal cooperation”. Control, derived from the
Group strategy, is carried out primarily at the Group level, and segment-specific key figures are used to aid the process.
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59
Fraport mainly uses key figures relating to the consolidated results of operations and to the Group asset and financial position, as
well as key figures that link the results of operations with the asset and financial position, as key financial performance indicators
(value management). In accordance with the long-term oriented Group strategy, the Executive Board manages and evaluates the
development of financial performance indicators while also taking account of long-term forecasted market developments. In this
context, strategic measures – such as the implementation of larger capital expenditure projects or the expansion of international
business – can also lead to a short to medium-term burden on the financial performance indicators, as long as it is assumed that
the asset, financial, and earnings positions will develop in a positive manner over the long term, and the measures do not pose
disproportionately high risks to the Group.
The key financial performance indicators and their significance for Fraport are described in the following. The description of their
development during the past fiscal year can be found in the chapters titled “Group Results of Operations”, “Asset and Financial
Position”, as well as “Value Management” beginning on page 81. The associated forecasted figures for the 2018 fiscal year can
be found in the chapter titled “Business Outlook” beginning on page 126.
Results of operations key figures
The results of operations include the presentation and explanation of significant earnings components and key figures. While the
results of operations in the context of regular reporting provide information about the past business development and are fore-
casted in the business outlook, earnings forecasts are also regularly drawn up over long-term periods for internal planning pur-
poses. The information resulting from this is essential for the Executive Board with regard to the company’s long-term manage-
ment.
The key financial performance indicators for Fraport are revenue as the key component of the total revenue, EBITDA, EBIT, EBT
and the Group result.
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EBITDA and, indirectly, the Group result through the result per share (earnings per share, EPS) are part of the Executive Board
remuneration and underline the relevance of these financial key figures as a control element (see also chapter titled “Remunera-
tion Report” starting on page 67; definitions for calculating the financial key figures can be found in the chapter titled “Glossary”
starting on page 236).
Asset and financial position key figures
As well as in the results of operations, the result of the strategically adopted measures and operating activities of Fraport is also
reflected in the Group’s asset and financial position. For Fraport, in particular the development of shareholders’ equity, the
shareholders’ equity ratio, liquidity or net financial debt, the gearing ratio, the operating cash flow, and the free cash flow
are significant.
The level of shareholders’ equity or the shareholders’ equity ratio represents the basis for the current and future operating activities
for Fraport. A solid base of shareholders’ equity is, for example, essential for the financing of large strategic projects. Also con-
nected with this was the company’s stock market launch in the 2001 fiscal year, which led to a significant increase in shareholders’
equity of around €900 million, and formed the essential basis for financing the expansion of the Frankfurt site as well as the
international business.
Besides shareholders’ equity, liquidity or net financial debt and the gearing ratio in particular serve as key financial indicators to
the Executive Board to assess the financial situation. The gearing ratio indicates the Group’s leverage and varies as a rule de-
pending on the phase of Fraport’s investment cycle. The gearing ratio therefore usually increases in times of high capital expendi-
ture and falls when the company’s capital expenditure is lower. In the context of the capital expenditure program at the Frankfurt
site, the Executive Board has defined that the gearing ratio should not exceed a value of about 140% in the long term.
In addition to the gearing ratio, the Executive Board uses the operating cash flow and the free cash flow as key performance
indicators for the evaluation of the financial strength of the Group. The free cash flow provides information about the financial
funds available to the Group from the operating activities of a period after deducting operating capital expenditure activities. These
free funds can, in turn, be retained in order to increase the company’s liquidity and to be available as a financial reserve for future
capital expenditure, or to reduce the leverage (the gearing ratio) and/or to be distributed among shareholders as dividends (defi-
nitions for calculating the financial key figures can be found in the chapter titled “Glossary” starting on page 236).
Links between the results of operations and the asset and financial position (value management)
In order to sustainably increase the Group’s value, the Executive Board, in addition to the key figures of the results of operations,
and asset and financial position, specifically draws parallels between the development of the results of operations, and the asset
and financial position. In this context, the Executive Board plans and manages the Group’s development according to the princi-
ples of value management.
At Fraport, the most important measurement and steering figure of this approach is the “Fraport value added” figure. The value
added is annually consolidated and recorded at Group and at segment level. While EBIT and the pre-tax results of Group com-
panies accounted for using the equity method are key figures of the results of operations, Fraport assets are derived from the
consolidated statement of financial position, and are defined as the average of the Group’s or segments’ fixed interest-bearing
capital required for operations including the carrying amounts of the Group companies accounted for using the equity method.
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To avoid economic enhancement coming solely from depreciation and amortization of assets, the Fraport Executive Board rec-
ognizes regularly depreciable or amortizable assets within Fraport assets at half of their historical acquisition/manufacturing costs
(at cost/2), and not at residual carrying amounts. Goodwill and investments in Group companies accounted for using the equity
method are recognized at carrying amount because they are not subject to regular depreciation and amortization. Beginning in
the 2017 fiscal year, the Fraport assets not included in depreciation and amortization, in particular, assets under construction, will
be recognized at full acquisition/manufacturing costs.
Fraport calculates the weighted average cost of capital (WACC) using the capital asset pricing model and uses this regulatory
specific WACC specifically to calculate its airport charges. Given the continuously changing economic environment, interest rate
levels, and/or Fraport’s risk and financing structure, Fraport regularly reviews, and, if needed, adjusts its WACC. The WACC is
also used for the value management of the Fraport Group. In the 2017 fiscal year, the WACC was 6.7% (before taxes, in the
previous year: 8.6%). For details on the use of the cost of capital in the context of impairment tests, please refer to Group note 4.
The WACC is comprised as follows:
To allow comparisons between segments of varying size, in addition to its value added Fraport uses the measurement and steering
figure “Return on Fraport Assets”, in short: ROFRA. ROFRA shows whether the business areas created value (ROFRA >
WACC) or not (ROFRA < WACC).
ROFRA is also an element of the Executive Board remuneration and underlines the long-term goal of Group-wide business activ-
ities that create value. For the regulated Aviation segment, this means generating a value added of zero, and for the other seg-
ments – in particular the Ground Handling segment which currently has a negative value added figure – significantly positive value
added figures should be generated (see also the chapter titled “Remuneration Report” starting on page 67; definitions for calcu-
lating the financial key figures can be found in the chapter titled “Glossary” starting on page 236).
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Non-financial performance indicators
In addition to the key figures for its financial development, Fraport also measures the development of “non-financial performance
indicators”, which are also essential for the long-term success of the company and result primarily from the Group objectives
“Service-oriented airport operator” and “Fairness and recognition for partners and neighbors”. These key performance indicators
include, for example, service quality as perceived by passengers at Frankfurt Airport, the sickness rate, and the Group's CO2
emissions. To improve the company control, the Executive Board has assigned the non-financial performance indicators to the
categories “Customer satisfaction and product quality”, “Attractive and responsible employer”, “Occupational health and safety”,
and “Climate protection”.
The key non-financial performance indicators pursuant to GAS 20 in the amended version of GAAS 8 and their significance for
Fraport are shown in the following. The description of their development during the past fiscal year can be found in the chapter
titled “Non-financial Performance Indicators” beginning on page 95. The associated forecasted figures for the 2018 fiscal year can
be found in the chapter titled “Business Outlook” beginning on page 126. More information on the topic of “Corporate Social
Responsibility” can be found on the company website at www.fraport.com/responsibility and in the chapter titled “Combined Sep-
arate Non-Financial Report” starting on page 25. Neither report is a part of the Group Management Report or the audit of consol-
idated financial statements by the auditor.
Customer satisfaction and product quality
For Fraport, the quality of services performed and the associated customer satisfaction are decisive competitive factors and of
key significance for the long-term success of the business. The clear objective is to raise its own quality and a high level of
customer satisfaction. Fraport uses a number of performance indicators for the purposes of measurement and control. The key
indicators at the Frankfurt site include the global satisfaction of passengers and baggage connectivity. Beyond the Frankfurt
site, the focus at the Group airports is also on passenger satisfaction. This is measured at the fully consolidated Group airports
with various key figures. Where appropriate, this system of collecting data is to be harmonized in the medium term.
Global satisfaction describes the overall passenger satisfaction with the travel process chain and the service at Frankfurt Airport.
Despite the expected temporary overload of terminal infrastructure with the traffic growth in the next few years, Fraport aims for a
target of at least 80% global satisfaction. With the inauguration of Pier G, passenger satisfaction should be at least 82.5% from
2021. And from 2025, with the capacity extension through Terminal 3, Fraport has set a target of 85%. In Frankfurt and at the
other Group sites, passenger satisfaction is measured predominantly through surveys. Also, the relevance of passenger satisfac-
tion as a control element is clear given as it is taken into account in the Executive Board’s remuneration (see also the chapter
titled “Remuneration Report” starting on page 67).
Baggage connectivity provides information about the percentage of departure baggage at Frankfurt Airport that is loaded on
time in relation to the total departing baggage. Baggage connectivity measures, among other things, the performance of the airport
in its role as a hub with a transfer share of more than 55% and thus a high proportion of transfer baggage. A growing volume of
baggage also increases the challenge of misrouting as few pieces of luggage as possible. A high level of connectivity proves the
good quality of baggage processes here. The objective is to achieve a long-term baggage connectivity of more than 98.5%.
The punctuality rate indicates how many flights took off and landed on time in Frankfurt, whereby a flight is regarded as being
late after 15 minutes in accordance with the International Air Transport Association (IATA). The availability of mobility equipment
in terminals is particularly important for passengers with limited mobility. Fraport uses the equipment availability rate to track
the availability of this equipment at the Frankfurt site. In the future, the punctuality rate as well as the equipment availability rate
will no longer be used as non-financial performance indicators. Both operational key figures are of lesser importance for achieving
the strategic objective “Service-oriented airport operator”, and in the case of the punctuality rate, it can only be controlled to a very
limited degree by Fraport. Nonetheless, the development of these figures for 2017 and their comparison with the forecast pub-
lished in 2016 is included in the chapter titled “Non-financial performance indicators” starting on page 95.
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Attractive and responsible employer
For Fraport, appeal and responsibility as an employer is, like customer satisfaction and product quality, a key factor to ensure the
long-term success of the business. Fraport understands appeal to mean the creation of good working conditions in order to gain
and retain committed and qualified employees. In order to measure and control its appeal and responsibility as an employer,
Fraport uses various performance indicators, such as employee satisfaction and the ratio of women in management positions.
Employee satisfaction is a central instrument for measuring employee mood. Fraport is convinced that satisfied employees
achieve better customer loyalty and improved performance. This key figure is calculated annually by surveying employees of
Fraport AG and the Group companies. All labor-intensive Group companies in Frankfurt as well as the Group companies Fraport
Slovenija and Twin Star took part in the survey in 2017. In the future, the survey is to be extended to include all key Group
companies. Also, the strategic relevance of employee satisfaction is clear given as it is taken into account in the Executive Board’s
remuneration (see also the chapter titled “Remuneration Report” starting on page 67). The key figure is calculated from nine
aspects of satisfaction and the detailed analyses show potential areas of improvement. Fraport aims to maintain employee satis-
faction at a stable level Group-wide and continually improve the rating in the long term to exceed 3.0 (index value in line with
German school grading system). Fraport has stepped up its recruitment activities in this area to meet challenges such as the
tangible impact of demographic change at the many airport sites and the increased burden on operational employees in particular
due to the growth in traffic.
As a responsible employer, Fraport respects and promotes personal diversity, and attaches great importance to ensuring that this
is reflected in the way employees interact with each other. Diversity is a key goal for Fraport, which the Group systematically
tackles as part of its diversity management. Fraport particularly focuses on the promotion of women for management positions
in the first and second levels directly below the Executive Board and at the respective management levels at the German Group
companies. In the reporting, managers who report directly to the Executive Board are categorized as level 1 and executives who
report to this first level of managers are categorized as level 2. Regarding the Group companies in Germany, the levels of man-
agement are categorized based on comparable positions at Fraport AG. This corresponds to the objectives in the “Act on Equal
Participation of Women and Men in Management Positions in the Private and Public Sector”. The objective is to increase the
proportion of women in management positions in Germany across both levels to 30% by 2021. Fraport respects local circum-
stances and does not impose any quotas based on German law at the foreign Group companies.
Occupational health and safety
As a responsible employer, Fraport contributes to maintaining employees’ performance and preventing work-related health haz-
ards through preventive health management. Fraport evaluates the effectiveness of the measures for health management by,
among other things, continuously analyzing the sickness rate. The calculation excluding absences beyond sick pay (extended
sick leave) primarily reflects the development of short- and medium-term illnesses. The effects of demographic change in the
Group and the increase of the average age of employees contribute, among other things, to a continuous linear increase in the
number of illnesses. The focus is on limiting or reversing the sickness rate, which is increasing due to seasonal and age-related
absences, among other things. The objective is a maximum rate of 7.2% by 2025.
Fraport measures the effectiveness of occupational safety measures, among other ways, based on the number of accidents at
work and the rate per 1,000 employees derived from this number. In 2017, the Executive Board decided to focus on the sickness
rate as a non-financial performance indicator. In the future, the rate per 1,000 employees will no longer be used as a non-financial
performance indicator. Nonetheless, the development of this figure for 2017 and its comparison with the forecast published in
2016 is included in the chapter titled “Non-financial Performance Indicators” starting on page 95. From 2018, the topic of “occu-
pational safety and accident prevention” will be reported on in the chapter titled “Employees”.
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Climate protection
Operating an airport and air traffic have an effect on the environment. Fraport is committed to the due and proper consideration
of the environmental requirements associated with this. Fraport’s environmental policy places importance on the sustainable and
careful use of natural resources as well as a continuous improvement of its environmental performance. As part of this effort,
environmental management systems have been implemented at Fraport AG as well as in all fully consolidated Group companies
that are classified as “fundamentally environmentally relevant” based on their portfolios. The Executive Board has determined
CO2 emissions as the most important key figure for measuring environmental impact. The objective is to reduce CO2 emissions
that are directly or indirectly attributable to Fraport AG and the fully consolidated Group airports to 125,000 metric tons by 2030.
If necessary, the objective will be adjusted to any changes in Fraport’s airport portfolio. The target is based on the national reduc-
tion rates agreed to at the international Climate Change Conference in Paris.
Finance Management
The core objectives of finance management of Fraport AG are securing liquidity, limiting financial risks, achieving an appro-
priate level of profitability, and ensuring flexibility. The highest priority is to secure liquidity. Based on the Group’s solid share-
holders’ equity base, this is generally secured through both internal financing via operating cash flow and external financing in the
form of debt. The following section shows how finance management is implemented at Fraport AG.
To secure liquidity within the scope of its finance management, Fraport AG aims to achieve balanced financing composed of
bilateral loans, bonds (capital market), loan financing from public loan institutions, and promissory note loans. The significant
financing measures to be carried out in the near future at Fraport AG arise mainly from the refinancing of existing financing
maturities, from capital requirements, in particular from the capital expenditure for Terminal 3 at the Frankfurt site as well as
possible further acquisitions abroad. Appropriate financing instruments are selected based on the situation, i.e., depending on
how attractive the price is, the respective availability of these funds as well as the volume of the financing, all the while complying
with and adhering to a balanced financing mix. In keeping with the long-term nature of capital expenditure, the financing of these
projects is mostly long term as well. In line with the finance policy, money can be borrowed both at a fixed and at a floating interest
rate. To reduce interest rate risks from borrowing with floating interest rates, interest rate hedging transactions can be concluded
as a rule. In addition, Fraport AG has a strategic liquidity reserve to ensure its independence from financing sources. The medium-
and long-term investment horizon corresponds to the greatest possible extent to the expected long-term cash outflows. To cover
payments expected in the short term, Fraport AG uses operating liquidity and holds time deposits and liquid securities with a short
remaining term. Fraport AG limits default risks in its liquidity reserves with broadly diversified investment. Based on this strategy,
there have been no defaults or losses within asset management in previous fiscal years. To improve profitability, assets manage-
ment invests for the most part in rated corporate bonds and only in selective cases without a rating. The majority of the investments
concern listed corporate bonds and commercial paper, time deposits at banks, and promissory note loans. All the investments
are fungible or can be liquidated at any time on short notice.
The majority of the fully consolidated Group companies in Germany are integrated into the Fraport AG cash pool. The liquidity in
these Group companies is permanently guaranteed – via access to their own liquidity at any time as well as, within the scope of
the agreements also concluded in some cases, to the financial resources of Fraport AG – so that external financing is not neces-
sary. At the same time, the close connection of these companies to Fraport AG also ensures that attention is paid to other strategic
objectives of financial management within these Group companies.
Fraport Annual Report 2017
Group Management Report / Situation of the Group
65
For the controlled and non-controlled foreign Group companies, liquidity is secured depending on the relevant company share-
holding, either by concluding project financing, bilateral loans, or by internal provision of funding via a Group loan or shareholders’
equity. Adherence to the core objectives within financial management of these Group companies always takes place with the
involvement of Fraport AG’s Finance department.
The pending substantial strategic financing measures in the foreign Group companies stem, in particular, from the expansion
commitments within the framework of the concession agreements for Fortaleza, Porto Alegre, Lima, and Fraport Greece. In the
2017 fiscal year, financing from the European Investment Bank was secured for expansion commitments in Greece. This financing
will be drawn as planned in the coming years in line with the capital expenditure measures. In Brazil, it is planned to finance the
expansion commitments with a financing mix, consisting of the capital to be contributed in accordance with the concession agree-
ment, operating cash flow and local financing sources in local currency. Similar to the situation in Brazil, it is also planned to
finance the existing expansion commitments in Lima with a financing mix. This consists of shareholders’ equity to be additionally
contributed, operating cash flow and external financing. In contrast to Brazil, in connection with raising external financing, not only
local sources are to be used, but also financing from the international banking and capital market should be taken into account.
Due to the effects on the consolidated statement of financial position as at December 31, 2017, the financing and liquidity analysis
in the chapter titled “Asset and Financial Position” beginning on page 86 relates only to Fraport AG and the fully consolidated
Group companies in Germany and abroad. Additional key financial risks and opportunities, i.e. also referring to the Group com-
panies accounted for using the equity method are stated in the “Risk and Opportunities Report” beginning on page 105.
Legal Disclosures
As a listed corporation headquartered in Germany, Fraport AG is subject to a number of statutory disclosure requirements. Im-
portant reporting obligations that apply to this management report as a result of these requirements are shown in the following.
Takeover-related disclosures
The capital stock of Fraport AG is €924,687,040. It is divided into 92,468,704 no-par-value bearer shares. The company holds
treasury shares (77,365 shares), which are offset from capital stock on the balance sheet. The issued capital stated in the com-
mercial balance sheet as at December 31, 2017 and reduced by treasury shares is €923,913,390 (92,391,339 no-par-value bearer
shares). There are no differing classes of shares. Additional information regarding the acquisition of treasury shares in accordance
with Section 160 (1) no. 2 of the German Stock Corporation Act (AktG) can be found in Group note 31.
On the basis of the consortium agreement concluded between the State of Hesse and Stadtwerke Frankfurt am Main Holding
GmbH dated April 18/23, 2001 with a supplement as at December 2, 2014, the total voting rights in Fraport AG held by both
shareholders, calculated in accordance with Section 22 (2) of the German Securities Trading Act (WpHG), amounted to 51.34%
as at December 31, 2017. At that time, they were attributed as follows: State of Hesse 31.31% and Stadtwerke Frankfurt am Main
Holding GmbH 20.03%. The voting rights in Fraport AG owned by the City of Frankfurt am Main are held indirectly via the
Stadtwerke Frankfurt am Main Holding GmbH subsidiary. According to the last official reports in accordance with the WpHG or
disclosures by individual shareholders, other voting rights in Fraport AG were attributable as follows (as at December 31, 2017):
Deutsche Lufthansa AG 8.44%, Lazard Asset Management LLC 5.05%, and BlackRock Inc. 3.12%. The relative ownership inter-
ests were adjusted to the current total number of shares as at the balance sheet date, and therefore may differ from the figures
given at the time of reporting or from the respective shareholders’ own disclosures.
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The appointment and dismissal of Executive Board members is carried out in compliance with the relevant provisions of the AktG
(Sections 84 and 85). Pursuant to Section 179 (1) sentence 2 of the AktG in conjunction with Section 11 (3) of the company
statutes, the Supervisory Board is entitled to amend the company statutes only with respect to the wording. Other amendments
to the company statutes require a resolution of the AGM, which, according to Section 18 (1) of the company statutes, must be
passed in general by a simple majority of the votes cast and the capital stock represented at the time of the resolution. If, by way
of exception, the law requires a higher capital majority (e.g., when changing the purpose of the company as stated in the company
statutes, Section 179 (2) sentence 2 of the AktG; or when creating contingent capital, Section 193 (1) sentence 1 of the AktG),
the resolution of the AGM has to be passed by a three-quarter majority of the represented capital stock.
At the AGM of May 23, 2017 the existing authorized capital was canceled and new authorized capital of €3.5 million was approved,
which can be used for issuing shares to employees of Fraport AG and companies controlled by Fraport AG (see also Group note
31). The Executive Board is now entitled, with the approval of the Supervisory Board, to increase the capital stock on one or more
occasions by up to a total of €3.5 million until May 22, 2022 by issuing new shares in return for cash. The statutory subscription
rights of the shareholders may be excluded. In 2017, a total of €342,850 of authorized capital was used for issuing shares within
the scope of the employee investment plan. After assessing the operational and economic implications of this process, shares will
no longer be issued to employees through use of the authorized capital beginning in fiscal year 2018. In the future, the shares
required for this will be acquired on the market by the company.
Report on the relationships with affiliated companies
Due to the investments of 31.31% (previous year: 31.32%) held by the State of Hesse and 20.03% (previous year: 20.00%) held
by Stadtwerke Frankfurt am Main Holding GmbH, as well as the consortium agreement concluded between these shareholders
on April 18/23, 2001 with a supplement as at December 2, 2014, Fraport AG is a publicly controlled enterprise. There are no
control or profit transfer agreements.
The Executive Board of Fraport AG therefore compiles a report on the relationships with affiliated companies in accordance with
Section 312 of the AktG. At the end of the report, the Executive Board made the following statement: “The Executive Board
declares that under the circumstances known to us at the time, Fraport AG received fair and adequate compensation for each
and every legal transaction conducted. During the reporting year, measures were neither taken nor omitted at the request of or in
the interests of the State of Hesse and the City of Frankfurt am Main and their affiliated companies.”
Joint Statement on Corporate Governance and Corporate Governance Report
Within the scope of a Joint Statement on Corporate Governance as required by Section 315d of the HGB in conjunction with
Section 289f of the HGB, the Fraport AG Executive Board reports – in the name of the Supervisory Board as well – on the contents
subject to the reporting requirements pursuant to Section 289f of the HGB for Fraport AG as well as for the Fraport Group. The
Executive Board and Supervisory Board also provide an annual report on corporate governance pursuant to Section 3.10 of the
German Corporate Governance Code (GCGC) as part of the corporate governance report and publish this in conjunction with the
Joint Statement on Corporate Governance. The Joint Statement on Corporate Governance as well as the Corporate Governance
Report are published in the chapter “To Our Shareholders” and on the corporate website at www.fraport.com/corporategovern-
ance.
Combined separate non-financial statement
The requirements for reporting non-financial information as laid out in the CSR Directive Implementation Act are met in the form
of a separate non-financial report in accordance with Section 315b (3) of the HGB in conjunction with Section 298 (2) sentence 1
of the HGB. Pursuant to Section 298 (2) sentence 3 of the HGB it is layed out which information relates to the Fraport Group and
which information only pertains to Fraport AG. In accordance with Section 315b (3) no. 2a of the HGB, the combined separate
non-financial report is published together with the Group Management Report in accordance with Section 325 of the HGB. The
combined separate non-financial report, which is not a part of the Group Management Report or the consolidated financial state-
ment by the auditor, can be found in the eponymous chapter as well as on the Group’s website at www.fraport.com/responsibility.
Fraport Annual Report 2017
Group Management Report / Situation of the Group
67
Key features of the internal control and risk management system
The description of the key features of the internal control and risk management system with respect to the accounting process in
accordance with Section 315 (4) of the HGB can be found in the chapter titled “Risk and Opportunities Report” beginning on page
105 of this report.
Remuneration Report
The following remuneration report describes the main features of the remuneration system for the Executive Board and Supervi-
sory Board of Fraport AG in accordance with the statutory regulations, and the recommendations of the German Corporate Gov-
ernance Code (GCGC) as amended on February 7, 2017. It summarizes which principles apply in determining the total remuner-
ation of the members of the Executive Board, and explains the structure and amount of the compensation of the Executive Board
and Supervisory Board members.
Remuneration of the Executive Board members in fiscal year 2017
Remuneration system
Executive Board remuneration is set by the Supervisory Board upon the recommendation of its executive committee and is re-
viewed on a regular basis. The remuneration of the Executive Board members of Fraport AG is intended to be in proportion to the
tasks of the position and the company’s situation and in line with a transparent and sustainable corporate management approach
which focuses on the long term.
Remuneration is comprised as follows:
> Non-performance-related components (fixed salary and compensation in kind)
> Performance-related components with a short- and medium-term incentive effect (bonus)
> Performance-related components with a long-term incentive effect (Long-Term Strategy Award and Long-Term Incentive
Program)
In order to comply with the requirements of the GCGC, with effect starting in fiscal year 2014, a maximum limit was defined with
each Executive Board member for the sum of the aforementioned respective remuneration components. For the Chairman of the
Executive Board this amounts to €2.3 million and €1.65 million for every other member of the Executive Board. This maximum
limit refers to the amount of payments that result from the rewards in a fiscal year and also applies in relation to the remuneration
components that were granted for previous fiscal years and have not yet been fully paid out. This is still relevant for fiscal year
2013.
In addition to the remuneration components specified above, the members of the Executive Board received allocations to pension
commitments. In principle, the pension commitments, including performance-related contributions, are in a fixed proportion to the
respective fixed annual gross salary, and are therefore subject to implicit maximum limits. Further information on pension com-
mitments for Executive Board members can be found in Group note 37.
Non-performance-related components
During the term of their employment contract (generally five years), Executive Board members, as a rule, receive an unchanging
fixed annual salary across the entire period.
The amount of the fixed annual salary is reviewed on a regular basis to ensure that it is appropriate.
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Fraport Annual Report 2017
The fixed annual compensation also covers any activity performed by an Executive Board member for companies in which
Fraport AG holds an indirect or a direct interest of more than 25% (so-called “other board mandates related to Group companies”).
In addition, the remuneration for Executive Board members includes compensation in kind and other payments (ancillary benefits).
In particular, compensation in kind is the pecuniary benefit subject to income tax from the private use of a company car with driver.
This compensation in kind is generally available to all Executive Board members in the same way; the amount of compensation
depends on the personal situation.
Executive Board members also receive half of the total contributions toward their pension insurance in the case of voluntary
insurance, and in the case of statutory insurance, half of the total statutory contributions.
For contributions to voluntary statutory or private medical and health care insurance, each member of the Executive Board re-
ceives a tax-free employer contribution in line with legal provisions.
Performance-related components
Without a long-term incentive effect (bonus)
The bonus is dependent on the EBITDA and ROFRA of the Fraport Group for the respective fiscal year. EBITDA is the Group
operating result, ROFRA the interest on Group assets; i.e., the total return on capital (“Return on Fraport Assets”). Both key figures
(EBITDA and ROFRA) are recognized business management parameters for measuring the success of a company.
The actual bonus for an Executive Board member is calculated by multiplying EBITDA and ROFRA, each minus a basic allowance,
by a multiplier contractually stipulated for each Executive Board member and adding together the aforementioned results. The
bonus amount for one fiscal year is capped at 175% of the bonus paid for 2009 – or if the member was appointed during the year
or the employment contract was amended in 2009, an amount extrapolated for the entire year. For Executive Board members
appointed as of 2012, the maximum bonus amount for a fiscal year is limited to 140% of the bonus calculated pro forma for fiscal
year 2011. According to employment contracts extended in 2016 and 2017, the maximum amount of the bonus for Dr. Zieschang
was raised to €785.0 thousand from April 1, 2017, for Mr. Müller to €714.0 thousand from October 1, 2017, and for Ms. Giesen to
€714.0 thousand from January 1, 2018. 50% of anticipated bonus payments are paid out monthly during the fiscal year. The
remaining bonus payments are payable within one month after the Supervisory Board has approved the respective consolidated
financial statements for the relevant fiscal year.
50% of the calculated bonus payments have a conditional payback provision. If EBITDA and ROFRA in the following year do not
reach at least an average of 70% of the corresponding key figure for the fiscal year in question, the Executive Board member has
to pay back 30% of the bonus to Fraport AG. Should the same apply to the second year after the relevant fiscal year, 20% of the
bonus has to be repaid. A possible repayment obligation exists for each following year separately and must be individually re-
viewed for compliance each year.
If the Supervisory Board is of the opinion that the relevant business figures have decreased due to influences outside of the
Executive Board’s control, it can grant a bonus at its discretion or waive the repayment in full or in part, based on the Executive
Board member’s performance. If an Executive Board member holds an active position for less than one fiscal year, a pro rata
bonus payment is made.
Fraport Annual Report 2017
Group Management Report / Situation of the Group
69
With a long-term incentive effect
(Long-Term Strategy Award, LSA)
The LSA creates an additional long-term incentive effect that appropriately and on an ongoing basis takes into consideration the
interests of the main stakeholders of Fraport AG, specifically employees, customers, and shareholders.
As part of the LSA, each Executive Board member is promised a prospective financial reward for one fiscal year. After three fiscal
years have expired (the fiscal year in question and the two following years), the extent to which the targets have been met is
determined and the actual payment is calculated based on these results. The paid amount can exceed or fall below the prospective
amount but is capped at 125% of the amount originally stated. Performance targets are customer satisfaction, sustained employee
development, and share performance. All three targets are equally important under the LSA. As in the previous year, a prospective
sum of €120 thousand has been promised to the Chairman of the Executive Board for the performance period of 2017 to 2019,
with a payout in 2020, while a prospective sum of €90 thousand each has been promised to the other members of the Executive
Board.
Customer satisfaction is evaluated on an annual basis using an established assessment system for airlines, real estate manage-
ment, retail properties, and passengers. Whether or not a target has been met is determined by comparing the corresponding
data (in percentage points) at the beginning of the three-year period with the average achieved over the same period. If the actual
result exceeds or falls below the target by two full percentage points, the bonus paid for customer satisfaction is increased or
decreased correspondingly.
Sustained employee development relates to employee satisfaction and the changes in headcount. The Supervisory Board decides
to which extent the target has been met. Its decision is based on the results of the employee satisfaction barometer (an annual
survey among employees of the Fraport Group) and the responsible development of headcount in view of the Group’s economic
situation.
For the share performance target, the Fraport share price development over the corresponding three-year period is compared
with the average development of the MDAX and a share basket, which includes the shares of the operating companies of the
Paris, Zürich, and Vienna airports. The payment for this share performance target is again determined by comparing the reference
value calculated at the beginning of the three-year period with the actual development. Positive or negative deviations increase
or decrease the prospective bonus accordingly.
Entitlement to LSA payments is established by approval by the Supervisory Board of the consolidated financial statements for the
last fiscal year of the performance period.
If an Executive Board member leaves Fraport AG before the end of a three-year period already commenced, the performance
targets for such an Executive Board member are not calculated until after this three-year period has expired. The award for the
entire period is then paid on a pro rata basis for the amount of time the Executive Board member actually worked for the company.
There is no right to payment for a three-year period which has not yet expired at the time the employment contract has been
legally terminated due to extraordinary circumstances that are within the control of the Executive Board member (termination by
request of the Executive Board member without cause pursuant to Section 626 of the German Civil Code [BGB], termination for
cause within the control of the Executive Board member in accordance with Section 626 of the BGB), or if the Executive Board
member has been removed from his or her office for cause pursuant to Section 84 (3) of the AktG. If an Executive Board member
joins the company during the course of a fiscal year, the Supervisory Board decides if and to what extent the Executive Board
member is entitled to participate in the LSA program for this fiscal year.
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Long-Term Incentive Program (LTIP)
The LTIP is a virtual stock options program. The Executive Board members of Fraport AG are promised a contractually stipulated
amount of virtual shares within their employment contracts, so-called performance shares, for each fiscal year on the condition
that and depending on whether they meet predefined performance targets (the so-called target tranche). After four fiscal years,
the so-called performance period, it will be determined to what extent these performance targets have been met and the number
of performance shares actually due to the Executive Board member, the so-called actual tranche. The actual tranche can exceed
or fall below the target tranche but is capped at 150% of the target tranche.
The two performance targets “earnings per share” (EPS) and “rank total shareholder return MDAX” are relevant for deriving the
actual tranche from the target tranche, with earnings per share (EPS) being weighted at 70% and rank total shareholder return
MDAX at 30%. For the fiscal year 2017, 9,000 performance shares were allocated to Dr. Stefan Schulte as a target tranche, while
the other Executive Board members were allocated 6,850 performance shares.
In order to determine to what extent the EPS performance target has been met, the weighted average target EPS during the
performance period, based on the strategic development planning applicable at the time of the award, is compared with the
average EPS actually achieved during the performance period. For the evaluation to what extent the target has been met, the
target EPS for the first fiscal year accounts for 40%, the second for 30%, the third for 20%, and the fourth for 10%. If targets have
been met 100% across the performance period, the actual tranche corresponds to the target tranche. If the actual EPS differs
from the target EPS, the number of allocated performance shares is adjusted accordingly. If the actual EPS falls below the target
EPS by more than 25 percentage points, no performance shares are issued for the EPS performance target. If the actual EPS
falls below the target EPS by 25 percentage points, the actual tranche amounts to 50% of the target tranche. If the actual EPS
exceeds the target EPS by 25 percentage points, the actual tranche amounts to 150% of the target tranche. Intermediate values
can be calculated using a straight-line method. Any performance exceeding the targets by more than 25 percentage points is not
taken into account.
The extent to which the rank total shareholder return MDAX performance target has been met is calculated by determining the
weighted average rank of Fraport AG amongst all companies listed in the MDAX in relation to the total shareholder return (share
price development and dividends) over the performance period. Just as with the EPS performance target, the four relevant fiscal
years will be weighted in decreasing order. The actual tranche equals the target tranche if Fraport AG, during the performance
period, ranks number 25 among total shareholder return MDAX with its weighted average. For each rank exceeding or falling
below 25, the actual tranche is increased or reduced by 2.5 percentage points. If Fraport AG ranks worse than 45th place, no
performance shares will be issued for the rank total shareholder return MDAX performance target; if Fraport AG ranks better than
5th place, there will not be a further increase in the number of performance shares issued over 5th place.
The relevant share price used for calculating the LTIP payment corresponds to the weighted average of the company’s closing
share prices in XETRA, or a similar trading system replacing XETRA at the Frankfurt Stock Exchange, during the first 30 trading
days immediately subsequent to the last day of the performance period. For the performance shares issued in 2013 and in previ-
ous fiscal years, the relevant share price for calculating the LTIP payment is limited to €60 per performance share.
Fraport Annual Report 2017
Group Management Report / Situation of the Group
71
For all performance shares allocated from the fiscal year 2014 onwards, the LTIP payment is limited to 150% of the product of the
performance shares of the target tranche multiplied by the “relevant share price at the time of issuance”. The “relevant share price
at the time of issuance” corresponds to the weighted average of the company’s closing share prices in XETRA or a similar trading
system replacing XETRA at the Frankfurt Stock Exchange during the month of January of the fiscal year, in which the relevant
performance period begins. Entitlement to the LTIP payment is established by approval by the Supervisory Board of the consoli-
dated financial statements for the last fiscal year of the performance period.
Furthermore, for all LTIP performance share tranches allocated after December 31, 2013, maximum payment amounts have been
defined, which amount to a maximum of €810.0 thousand for Dr. Schulte and for the other Executive Board members a maximum
of €616.5 thousand per performance share tranche.
The rules for LTIP entitlements of former Executive Board members are largely the same as for the LSA. In addition, a former
Executive Board member is not entitled to any performance shares for a target tranche whose performance period had not yet
lasted at least twelve months at the time the employment contract was legally terminated. The LTIP fair value accrual allocation
resulted in the following expenses for the fiscal year 2017: Dr. Stefan Schulte €1,066.0 thousand (previous year: €529.7 thousand),
Anke Giesen €811.3 thousand (previous year: €341.1 thousand), Michael Müller €669.0 thousand (previous year:
€304.5 thousand), Peter Schmitz €0 (previous year: €51.2 thousand), Dr. Matthias Zieschang €811.3 thousand (previous year:
€410.3 thousand).
Further information regarding share-based remuneration via LTIP is provided in the Group notes under note 45.
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Fraport Annual Report 2017
Remuneration of the Executive Board 2017
In the tables below, the contributions, inflows, and pension-related expenses afforded to each member of the Executive Board
are displayed individually based on the recommendations of Section 4.2.5 (3) of the GCGC:
Remuneration of the Executive Board (contributions granted)
in €’000
Fixed salary
Ancillary benefits
Total
One-year variable remuneration (bonus)
Multiyear variable remuneration
Long-Term Strategy Award (3 years)
Tranche 2016 (1/1/2016 to 12/31/2018)
Tranche 2017 (1/1/2017 to 12/31/2019)
Long-Term Incentive Program (4 years)
Tranche 2016 (1/1/2016 to 12/31/2019)
Tranche 2017 (1/1/2017 to 12/31/2020)
Total
Pension-related expenses
Total remuneration
Dr. Stefan Schulte
(Chairman of the Executive Board;
Executive Director since April 15, 2003)
2017 (Max)
2017 (Min)
2017
415.0
20.1
435.1
841.1
–
–
–
120.0
–
–
443.5
1,839.7
528.5
2,368.2
415.0
20.1
435.1
–
–
–
–
–
–
–
–
435.1
528.5
963.6
415.0
20.1
435.1
870.1
–
–
–
150.0
–
–
810.0
2,265.2
528.5
2,793.7
2016
415.0
36.0
451.0
783.3
–
–
120.0
–
–
458.1
–
1,812.4
492.0
2,304.4
1) Ancillary benefits vary depending on personal circumstances; there is no set minimum or maximum.
2) The bonus includes the payments on account for the 2017 fiscal year and the addition to the bonus provision in 2017.
3) LTIP was carried at fair value as at the time of offer.
4) For the Chairman of the Executive Board, the total cap amounts to €2.3 million and €1.65 million for all other members of the Executive Board. If the total cap is
exceeded, the last payment component will be reduced accordingly.
5) Pension-related expenses were reported according to IAS 19.
6) According to the extended employment contracts there was a maximus bonus raise during 2017. For Dr. Zieschang the maximum bonus amounted to €541,406
until March 31, 2017 and €785.0 thousand beginning from April 1, 2017. For Mr. Müller the maximum bonus amounted €674,797 until September 30, 2017 and
€714.0 thousand beginning from October 1, 2017.
7) The bonus calculation took into account the differentt maximum amounts. (see also footnote 6).
Remuneration of the Executive Board (Inflows)
in € ´000
Fixed salary
Ancillary benefits
Total
One-year variable remuneration (bonus)
Multiyear variable remuneration
Long-Term Strategy Award (3 years)
Tranche 2013 (1/1/2013 to 12/31/2015)
Tranche 2014 (1/1/2014 to 12/31/2016)
Long-Term Incentive Program (4 years)
Tranche 2012 (1/1/2012 to 12/31/2015)
Tranche 2013 (1/1/2013 to 12/31/2016)
Total
Pension-related expenses
Total remuneration
Dr. Stefan Schulte
(Chairman of the Executive Board;
Executive Director since April 15, 2003)
2017
2016
415.0
36.0
451.0
797.1
–
–
60.0
–
–
406.3
–
1,714.4
492.0
2,206.4
415.0
20.1
435.1
779.5
–
–
–
60.0
–
–
503.0
1,777.6
528.5
2,306.1
1) An offsetting of the remuneration in 2017 for the Supervisory Board activities at Hanover-Langenhangen Airport was made against the bonus payment
of Dr. Zieschang in the amount of €2,380.00 for fiscal year 2017.
2) The bonus includes the payments on account for fiscal year 2017 and the ex-post adjustment to the bonus for fiscal year 2016.
Fraport Annual Report 2017
Group Management Report / Situation of the Group
73
Contributions granted
Anke Giesen
(Executive Director Operations;
Executive Director since January 1, 2013)
2017 (Max)
2017 (Min)
2017
300.0
26.6
326.6
593.7
–
–
–
90.0
–
–
337.6
1,347.9
141.3
1,489.2
300.0
26.6
326.6
–
–
–
–
–
–
–
–
326.6
141.3
467.9
300.0
26.6
326.6
674.8
–
–
–
112.5
–
–
616.5
1,730.4
141.3
1,871.7
2016
300.0
31.6
331.6
552.9
–
–
90.0
–
–
348.7
–
1,323.2
134.8
1,458.0
2016
300.0
31.7
331.7
552.9
–
–
90.0
–
–
348.7
–
1,323.3
121.6
1,444.9
Michael Müller
(Executive Director Labor Relations;
Executive Director since October 1, 2012)
2017 (Min) 2017 (Max)6)
20177)
Dr. Matthias Zieschang
(Executive Director Controlling and Finance;
Executive Director since April 1, 2007)
2017 (Min) 2017 (Max)6)
20177)
2016
300.0
31.2
331.2
593.7
–
–
–
90.0
–
–
337.6
1,352.5
122.9
1,475.4
300.0
31.2
331.2
–
–
–
–
–
–
–
–
331.2
122.9
454.1
300.0
31.2
331.2
714.0
–
–
–
112.5
–
–
616.5
1,774.2
122.9
1,897.1
320.0
46.6
366.6
541.4
–
–
90.0
–
–
348.7
–
1,346.7
341.1
1,687.8
320.0
43.3
363.3
625.2
–
–
–
90.0
–
–
337.6
1,416.1
365.6
1,781.7
320.0
43.3
363.3
–
–
–
–
–
–
–
–
363.3
365.6
728.9
320.0
43.3
363.3
785.0
–
–
–
112.5
–
–
616.5
1,877.3
365.6
2,242.9
Anke Giesen
(Executive Director Operations;
Executive Director since January 1, 2013)
Michael Müller
(Executive Director Labor Relations;
Executive Director since October 1, 2012)
2016
300.0
31.6
331.6
562.7
–
–
45.0
–
–
231.9
–
1,171.2
134.8
1,306.0
2017
300.0
26.6
326.6
550.2
–
–
–
45.0
–
–
382.8
1,304.6
141.3
1,445.9
2016
300.0
31.7
331.7
534.5
–
–
45.0
–
–
141.3
–
1,052.5
121.6
1,174.1
2017
300.0
31.2
331.2
550.2
–
–
–
45.0
–
–
198.4
1,124.8
122.9
1,247.7
Inflow
Dr. Matthias Zieschang
(Executive Director Controlling and Finance;
Executive Director since April 1, 2007)
20171)
2016
320.0
46.6
366.6
544.5
–
–
45.0
–
–
309.2
–
1,265.3
341.1
1,606.4
320.0
43.3
363.3
554.6
–
–
–
45.0
–
–
382.8
1,345.7
365.6
1,711.3
74
Group Management Report / Situation of the Group
Fraport Annual Report 2017
Provisions for pensions and similar obligations
Pension obligations to currently active Executive Board members were as follows:
Pension obligations
in €’000
Dr. Stefan Schulte
Anke Giesen
Michael Müller
Dr. Matthias Zieschang
Total
Other agreements
Obligation 31.12.2016
Change in 2017 Obligation 31.12.2017
7,299
605
569
3,583
12,056
806
145
137
489
1,577
8,105
750
706
4,072
13,633
Each member of the Executive Board has entered into an obligation to purchase shares in Fraport AG amounting to at least half
a year’s fixed gross salary (cumulative cost at the time of purchase) and hold them for the duration of the respective contract of
employment. Already existing holdings of Fraport AG shares are taken into account. The obligation to purchase and hold shares
is reduced pro rata if the employment contract has a term of less than five years. If the Executive Board member is reappointed,
the equivalent value of the shares an Executive Board member is obliged to hold is increased to at least a full annual gross salary.
Each member of the Executive Board has agreed to a two-year non-competition clause. During this term, reasonable compensa-
tion in the form of an annual fixed gross salary pursuant to Section 90a of the HGB shall be paid. Partial payments shall be made
monthly. The compensation shall be generally credited against any retirement pensions owed by Fraport AG, inasmuch as the
compensation together with the retirement pensions and other generated income exceeds 100% of the last fixed salary received.
Furthermore, in fiscal year 2017, Mr. Schmitz received payments of €159.5 thousand for the LTIP 2013 tranche, and a payment
of €10.0 thousand for the LSA 2014 tranche.
Other benefits
As other benefits, Executive Board members have the option of private use of a company vehicle with a driver, private use of a
company mobile device, a D&O liability insurance with a deductible pursuant to Section 93 (2) sentence 3 of the AktG, an accident
insurance and a lifetime entitlement to use the VIP service of Fraport AG, as well as access to a parking spot at Frankfurt Airport.
Fraport AG reimburses travel costs for company trips and other business expenses in line with the regulations in general use at
Fraport AG.
Remuneration of the Supervisory Board in the fiscal year 2017
The remuneration of the Supervisory Board is laid down in Section 12 of the Statutes of Fraport AG. It is provided solely as fixed
remuneration. According to this, every member of the Supervisory Board shall receive a fixed remuneration of €22.5 thousand for
each full fiscal year payable at the end of the fiscal year, the Chairman and the Chairman of the finance and audit committee shall
receive twice that amount, the Vice-Chairman and the Chairmen of the other committees shall each receive one and a half times
this amount. For their membership on a committee, Supervisory Board members receive an additional, fixed remuneration of €5
thousand per committee for each full fiscal year. This additional compensation is paid for a maximum of two committee member-
ships. Supervisory Board members that become members of or leave the Supervisory Board during a fiscal year receive pro rata
remuneration. The same holds true in the case of any change in the membership of committees. Each Supervisory Board member
receives €800 for every Supervisory Board meeting he or she attends and every committee meeting attended of which he or she
is a member. Accrued expenses will also be reimbursed (see also Group note 55).
Fraport Annual Report 2017
Group Management Report / Situation of the Group
75
The following remuneration was paid to the individual members of the Supervisory Board for fiscal year 2017:
Remuneration of the Supervisory Board 2017
in €
Supervisory Board Member
Fixed salary
Committee remuneration
Attendance fees
Total
Amier
Arslan
Becker
Cicek
Dahnke
Feldmann
Gerber
Haase
Kaufmann
Klemm
Krieg
Odenwald
Özdemir
Prangenberg
Schaub
Schmidt
Schmidt
Stejskal
Weimar
Windt
Total
Claudia
Devrim
Uwe
Hakan
Kathrin
Peter
Peter
Dr. Margarete
Frank-Peter
Lothar
Dr. Roland
Michael
Mehmet
Arno
Gerold
Hans-Jürgen
Werner
Edgar
Karlheinz
Prof. Dr. Katja
33,750.00
22,500.00
22,500.00
22,500.00
22,500.00
22,500.00
22,500.00
45,000.00
22,500.00
33,750.00
22,500.00
22,500.00
22,500.00
22,500.00
33,750.00
22,500.00
22,500.00
22,500.00
45,000.00
22,500.00
528,750.00
10,000.00
10,000.00
10,000.00
5,000.00
5,000.00
10,000.00
0.00
10,000.00
10,000.00
10,000.00
5,000.00
5,000.00
5,000.00
5,000.00
10,000.00
5,000.00
10,000.00
10,000.00
10,000.00
10,000.00
155,000.00
13,600.00
8,800.00
12,800.00
8,800.00
8,800.00
8,800.00
4,000.00
12,000.00
14,400.00
14,400.00
10,400.00
7,200.00
8,800.00
10,400.00
10,400.00
10,400.00
11,200.00
16,000.00
7,200.00
12,000.00
210,400.00
57,350.00
41,300.00
45,300.00
36,300.00
36,300.00
41,300.00
26,500.00
67,000.00
46,900.00
58,150.00
37,900.00
34,700.00
36,300.00
37,900.00
54,150.00
37,900.00
43,700.00
48,500.00
62,200.00
44,500.00
894,150.00
Remuneration of the Economic Advisory Board in fiscal year 2017
For membership on the Economic Advisory Board, a compensation of €2,500.00 is paid for every year of membership and
€2,000.00 per meeting attended, with the Chairman receiving twice that amount. Travel expenses are reimbursed independently.
Economic Report
General Statement of the Executive Board
A new passenger record was set at Frankfurt Airport in the past fiscal year with approximately 64.5 million travelers. The increase
by 6.1% compared to the previous year is primarily attributable to increases in supply by airlines given the good macroeconomic
development as well as the market entry of low-cost carriers at the Frankfurt site. The strong development of the global economy
was also reflected in the cargo section in fiscal year 2017 with an increase by 3.8% to around 2.2 million metric tons. The Group
airports of Fraport showed a uniformly positive development. Above all, tourist destinations in Europe such as Greece, Burgas,
and Varna, but also investments in Lima and Xi’an in some case had double-digit growth rates. The airports in Antalya and
St. Petersburg also grew significantly after a difficult 2016.
Financially, the Fraport Group had an overall positive performance in 2017. In addition to the passenger growth, positive factors
at the Frankfurt site were the increase in airport charges, increased income from security services and higher proceeds in con-
nection with the sale of land. Increased earnings from Ground Services as well as higher retail revenue also had a positive effect
on revenue. Outside of Frankfurt, significant contributions to revenue growth came from Fraport Greece and the Group company
Lima. While the Group result grew by 13.5% to €2,934.8 million, Group EBITDA declined compared to the previous year by 4.8%
to €1,003.2 million due to the compensation payment received from the Manila project in the previous year as well as sales of
shares in Thalita Trading Ltd. The negative financial result of –€136.9 million (previous year: –€112.3 million) led to a Group result
of €359.7 million (–10.1%).
The positive Group-wide operating development increased free cash flow by €91.4 million to €393.1 million.
76
Group Management Report / Economic Report
Fraport Annual Report 2017
Due to the very good traffic development in Frankfurt and at the Group airports, the Executive Board describes the operational
and financial development of the Fraport Group as positive overall in fiscal year 2017. With the take-over of operations of the
airports in Fortaleza and Porto Alegre, Brazil, as at January 2, 2018 Fraport has had a good start to the fiscal year 2018 up to the
date on which these consolidated financial statements were prepared.
Macroeconomic, Legal, and Industry-specific Conditions
Development of the macroeconomic conditions
In 2017, the global economy once again grew at a rate significantly above the expectations at the beginning of last year. At 4.7%,
the growth rate of global trade rose above the forecasts.
Gross domestic product (GDP)/world trade1)
Real changes compared to the previous year in %
World
Eurozone
Germany
USA
China
Japan
World trade
2017
+3.7
+2.4
+2.2
+2.3
+6.8
+1.8
+4.7
2016
+3.2
+1.8
+1.9
+1.5
+6.7
+1.0
+2.5
1) 2017 figures: Estimates based on International Monetary Fund (IMF, January 2018), German GDP: The Federal Statistical Office, Report (January 11, 2018).
The global economy has been in an upturn since 2010, which can now be felt in most economies. The key driver of the positive
development in 2017 was industrial production in advanced economies as well as in emerging markets. This was supported by
the fact that a number of risks lost importance over the course of the year. For example, the long-feared growth slump in China
did not eventuate and domestic demand proved to be robust. In Europe, although the Brexit vote led to a slowdown in economic
activity in the United Kingdom, the recession did not spread to major British trading partners. In elections in the Netherlands,
France, and Germany, political parties critical of Europe won fewer votes than had been feared, which will contribute to the stability
of the European Union in the future. Global monetary policy as a whole is still expansionary, and interest rates in the Eurozone
remain at a low level. Overall, expectations of both businesses and consumers thus rose more than expected and the momentum
of global economic activity became firmly established. During the same period, global trade also gained momentum.
In addition to the Eurozone, Germany provided by far the greatest positive surprise in terms of economic development. Consump-
tion increased more than expected due to an accelerated rise in employment. Among other things, this sparked increased travel
activity, which was reflected in high passenger numbers compared to the previous year – including at Frankfurt Airport. Low
interest rates, excellent corporate and consumer sentiment, and oil prices that remain relatively low compared to the long-term
average are behind a high demand for air travel to the main volume markets for Frankfurt Airport, such as Europe, the USA, or
China.
The global economy, which has recently been growing more dynamically, and reinvigorated global trade have given additional
impetus to the German economy, which is aligned towards exports. As a result, German exports have improved significantly since
the end of 2016 despite the dampening effect on demand that came from the appreciation of the euro against most other curren-
cies. Consequently, there was high demand for air freight in Frankfurt.
Short-term interest rates have fallen further in the Eurozone over the past year. As a result, the average 6-month Euribor was
negative at –0.26% (previous year: –0.17%). In the long-term segment, the average 10-year Euro swap rate rose from 0.53% to
0.81%. Fraport AG benefited from the interest rate situation, particularly with regard to short-term loans, and was also able to take
on additional loans at attractive rates despite the slight rise in long-term interest rates that nonetheless remain at a low level.
Fraport Annual Report 2017
Group Management Report / Economic Report
77
Crude oil price and significant exchange rates 2017
Values at index base 100
130
120
110
100
90
80
70
January 1, 2017
December 31, 2017
US-$ in €
CNY in €
Yen in €
Ruble in €
CHF in €
Barrel Brent crude oil in US$
Development of the legal environment
During the past fiscal year, there were no changes to the legal environment that had a significant influence on the business
development of the Fraport Group.
Development of industry-specific conditions
According to the preliminary figures from Airports Council International (ACI), global passenger traffic grew by 6.4% in fiscal year
2017. Air freight volume rose by 7.9%. European airports achieved above-average growth in passenger numbers at 8.5%. In air
freight too, European airports developed above the total market at 8.7%. The passenger numbers at German airports grew by
5.2%. Cargo tonnage increased by 6.7%.
Passenger and cargo development by region
Changes compared to the previous year in %
Germany
Europe
North America
Latin America
Middle East
Asia-Pacific
Africa
World
Passengers 2017
Air freight 2017
+5.2
+8.5
+3.5
+4.3
+4.7
+7.8
+5.9
+6.4
+6.7
+8.7
+7.3
+5.4
+6.0
+8.5
+12.4
+7.9
Source: ACI Pax Flash and Freight Flash (ACI, February 14, 2018), ADV for Germany; cargo instead of air freight (ADV, February 5, 2018).
Significant Events
Fraport wins the tender for the Brazilian airports in Fortaleza and Porto Alegre
In a public bidding process by the Brazilian Government, Fraport was awarded the tender on March 16, 2017 to privatize the
airports of Fortaleza and Porto Alegre. With a bid in the amount of 1,505.7 million reais for the Fortaleza Airport and 382.0 million
reais for the Porto Alegre Airport, Fraport won out against international competition. Part of the required concession fee
(715.5 million reais, or 718.7 million reais after being adjusted for inflation; approximately €181 million) had to be paid on July 28,
2017 – the day the concession agreements were signed. In addition, other minimum concession payments amounting to a total
of 1,172.2 million reais (with adjustment for inflation; approximately €295 million as at December 31, 2017, dependent on future
exchange rates) will be paid over the term of the concessions. In addition to the costs of acquiring the concession, Fraport must
pay a commercial fee of five percent annually. The terms for the two concession agreements are 30 years for Fortaleza and 25
years for Porto Alegre. With a share of 100%, Fraport is the sole owner of the concessions for both airports. Currently, Fraport
expects capital expenditure on the airport infrastructure of around €700 million, dependent on future exchange rates, in the first
78
Group Management Report / Economic Report
Fraport Annual Report 2017
five years. Fraport took over operation of the airports on January 2, 2018. The financial impact on the forecasted asset, financial,
and earnings position of the Fraport Group for 2018 is described in the chapter “Business Outlook” starting on page 126.
Low-cost traffic continues to grow at Frankfurt Airport
Since the start of the summer flight schedule for 2017, the share of low-cost traffic at Frankfurt Airport has been growing. In
addition to WOW Air, which has been operating out of Frankfurt since June 2016, Fraport now welcomes the Irish airline Ryanair
and the Hungarian airline Wizz Air, which took up operations at the end of March and May 2017 respectively.
Fraport Greece takes over operations of 14 Greek regional airports
On April 11, 2017, Fraport Greece took over operations of 14 Greek regional airports. As at this date, Fraport AG and its partners
paid the initial one-time fee in the amount of €1,234 million to the Greek national privatization fund, HRADF (Hellenic Republic
Asset Development Fund). The financial impact on the asset, financial, and earnings position of the Fraport Group is described in
the chapter “Economic Report” starting on page 75.
Fraport USA concession in Boston ended as at October 31, 2017
On April 13, 2017, Fraport USA lost the tender for the operation of the gastronomy and retail areas in all four terminals at Boston
Logan International Airport. As a result, the concession at Boston Airport ended on October 31, 2017. This resulted in an extraor-
dinary impairment loss for the concession in the amount of €8.6 million in the year under review.
Financing of the terminal operating concession in Antalya
The negotiations between the operating company of the terminal operating concession in Antalya and the banks regarding the
operational use of the liquidity intended for the concession payment and the suspension of credit clauses (Waiver Letter; see
Interim Release Q1 2017 starting on page 6) were completed in May 2017. The temporary technical breach of contract was thus
retroactively remedied without the need for the financing banks to call in outstanding net loans. The operating company was able
to secure new financing in August 2017. The previous financing was replaced and the reported risks no longer apply (see also
2016 Annual Report starting on page 87).
Agreement on cost savings and further growth between Lufthansa and Fraport
By means of the agreement signed on July 5, 2017 between Deutsche Lufthansa AG and Fraport AG pertaining to cost relief and
in the interests of more growth at the Frankfurt site, potential measures to improve efficiency and reduce costs are to be pursued
jointly by the two companies. To secure the competitiveness of Frankfurt Airport, Fraport decided against increasing airport
charges for the 2018 fiscal year. The current charges regulation, including the incentive program therefore, will remain in effect.
Extension of concession agreement at Lima site
On July 25, 2017, the Group company Lima signed a new addendum to the concession agreement with the Peruvian government.
With the signing of the addendum, the land required for the expansion of the airport was handed over to the company. This was
accompanied by, among other things, a commitment to construct a new runway by the end of 2021 and a new passenger terminal
by 2024. The expansion of the airport will likely require capital expenditure of approximately US$1.5 billion. In a separate agree-
ment with the Peruvian government, the concession agreement was also extended for an additional ten years until 2041 (with
extension option).
Fraport submits building application for Pier G
On August 16, 2017, Fraport submitted the building application to construct the new Pier G to the competent authorities of the
City of Frankfurt am Main. By moving up the schedule for the construction of Pier G, Fraport is responding to passenger growth.
The pier was originally planned for the second phase of construction of Terminal 3 but should now be completed and inaugurated
earlier. The new pier will be fully integrated into Frankfurt Airport’s hub functionality. Pier G will provide an annual capacity of 4 to
5 million passengers in the first construction phase. In the construction project, Fraport AG anticipates capital expenditure of up
to €200 million for the first phase. The start of construction for the new pier is scheduled for the second half of 2018.
Fraport Annual Report 2017
Group Management Report / Economic Report
79
No other events that have had or will have a significant effect on the business development of the Fraport Group have occurred
over the past fiscal year.
Business Development
Development at the Frankfurt site
In 2017, Frankfurt Airport set a new passenger record with approximately 64.5 million passengers. The numbers for the previous
year were exceeded by around 3.7 million passengers (6.1%). Unlike in previous years, there were no significant cancellations
due to strikes. Excluding weather-related cancellations and taking into account the leap day in the previous year, the growth rate
would be 6.8%. Frankfurt Airport too was thus able to benefit from a record year for the entire global air traffic industry. A new
record was set in passenger traffic in ten out of twelve months last year. A historic monthly high was set in July with almost 6.4
million passengers. This was caused in particular by growth in traffic to tourist-oriented destinations, which was higher than ex-
pected at the beginning of the past fiscal year.
Drivers of growth were primarily European traffic (+7.4%), followed by intercontinental traffic (+4.9%) and domestic traffic
(+4.5%). The southern and south-eastern European countries benefited from weak travel to Turkey as well as from significant –
and in part early – expansion of services offered in the low-cost segment. In intercontinental traffic, the traffic regions of the Middle
and Far East in addition to Africa reported significant growth. Unlike in the previous year, China, India, Japan, and South Korea
contributed to a further increase in passenger numbers. At the same time, demand for holiday travel to North Africa recovered
with double-digit growth rates. In the tourist market segment, the Caribbean, owing to limited bed capacity, was the only region
that did not post growth. Domestically, traffic at medium-sized and smaller airports increased the most. In the fourth quarter, traffic
to and from Berlin declined due to Air Berlin leaving the market.
In 2017, cargo volume increased by 3.8% to approximately 2.2 million metric tons. The economic upturn caused high demand
for air freight. Like the economic forecasts, cargo prospects also improved over the course of the year. In particular, the North
American volume market developed positively: After a decline in tonnage in the previous year, there was dynamic growth in
transatlantic flights in 2017.
2017 saw a turnaround in the trend in the development of aircraft movements at Frankfurt Airport. After years of declining figures,
there was significant growth of 2.7% for the first time with approximately 476,000 take-offs and landings. The tailwind was due to,
among other things, the lack of strike-related cancellations. Overall, airlines responded to the increasing demand by expanding
supply. In addition, the entry of low-cost carriers to the Frankfurt market provided more growth. Although maximum take-off
weights also increased by 1.3% to approximately 30.1 million metric tons, they could not keep up with the development of aircraft
movements, since airlines prefer lighter aircraft.
2017 passenger and cargo development at Frankfurt Airport
Percentage change compared to 2016 on monthly basis
+1.8
+5.8
+1.0
+1.8
+1.8
+10.5
+10.0
+2.5
+5.7
+5.5
+5.3
+5.1
+4.4
+4.5
+5.0
+5.5
+5.4
+4.3
+6.4
+0.7
+21.1
+5.0
+7.3
–5.1
January
February
March
April
May
June
July
August
September
October
November
December
Passengers
Cargo
80
Group Management Report / Economic Report
Fraport Annual Report 2017
Development outside the Frankfurt site
Traffic development at the Group sites
Fraport share
in %
Passengers1)
Cargo (air freight + air mail in m. t.)
2017
Change
in %
2017
Change
in %
100
100
73.4
70.01
60
60
60
51/503)
30
25
24.5
64,500,386
1,683,045
27,582,575
20,607,443
4,953,039
2,982,339
1,970,700
26,346,068
5,870,104
16,125,520
41,856,604
+6.1
+19.8
+10.3
+9.3
+8.4
+3.6
+16.6
+38.5
+8.5
+21.6
+13.1
2,194,056
12,324
n.a.
283,702
14,529
14,300
229
n.a.
16,861
n.a.
259,883
+3.8
+18.7
n.a.
–1.4
+2.5
+31.5
–93.0
n.a.
–11.0
n.a.
+11.2
Movements
Change
in %
+2.7
+5.4
+11.7
+5.6
+4.8
+2.8
+7.6
+25.6
–0.6
+14.4
+9.7
2017
475,537
34,467
227,195
186,826
37,416
21,466
15,950
156,909
75,256
152,280
318,248
Frankfurt
Ljubljana
Fraport Greece2)
Lima
Twin Star
Burgas
Varna
Antalya
Hannover
St. Petersburg
Xi’an
1) Commercial traffic only, in + out + transit.
2) Take-over of operations on April 11, 2017.
3) Share of voting rights: 51 %, dividend share: 50 %.
At Ljubljana Airport, passenger numbers in fiscal year 2017 were up 19.8% compared to the previous year at around 1.7 million.
This growth was due to, on the one hand, the entry of new airlines and, on the other hand, a significant increase in capacity
utilization by Adria Airways. While there were more passengers on routes to London Gatwick, Amsterdam, and Istanbul, passen-
ger numbers decreased on routes to and from Frankfurt and Belgrade.
Lima Airport again recorded strong passenger growth by 9.3% to nearly 20.6 million in fiscal year 2017. Domestic traffic (+8.8%)
as well as international traffic (+10.0%) grew in the reporting period. Cargo throughput was around 284 thousand metric tons. This
figure was slightly below the previous year’s level (–1.4%).
Fraport Greece welcomed approximately 27.6 million passengers (+10.3%) in the past fiscal year. The high growth rate resulted
mainly from heavy traffic for foreign tourism and the rise of low-cost and package-deal travelers. In addition, Fraport Greece
significantly expanded the operating hours of its airports, which increased the number of available slots.
The Bulgarian airports in Varna and Burgas served some 5.0 million passengers in the reporting period, thus around 8.4% more
than the same period in the previous year. Travelers from the UK, Poland, and Germany, in particular, but also strong domestic
traffic contributed to growth in traffic. However, the number of Russian passengers, mainly as a result of traffic increasing again
between Russia and Turkey, was down.
At Antalya Airport, around 26.3 million passengers in fiscal year 2017 signified an increase of 38.5%. While the number of pas-
sengers traveling within Turkey increased by 5.0% to over 7.3 million, the number of international passengers fell significantly by
57.8% to around 19.0 million. The passenger growth was primarily due to travelers coming from Russia who had stayed away in
the previous year because of the sanctions from the Russian government. Figures for travelers from Germany were down by
11.5% due to the geopolitical situation.
With nearly 5.9 million passengers, the Hanover site experienced an increase of 8.5% in the 2017 fiscal year. This growth was
mainly attributable to the addition of new routes by Wizz Air and Norwegian as well as a higher overall aircraft capacity utilization.
In addition, the negative development due to Air Berlin was almost fully compensated for by the growth of Eurowings. Traffic to
Turkey also developed much better than expected.
With over 16.1 million travelers, passenger traffic at St. Petersburg Airport saw a 21.6% increase in the reporting period compared
with the previous year. While international traffic increased significantly by 29% due to the economic recovery in Russia as well
as the resumption of charter traffic in Turkey, domestic traffic also experienced a significant jump by 17.4%.
Fraport Annual Report 2017
Group Management Report / Economic Report
81
Xi’an Airport continued to show a dynamic development as passenger numbers increased by 13.1% to approximately 41.9 million.
High-volume domestic traffic increased by 13.8% to approximately 39.9 million passengers, while international traffic rose only
slightly by 2.1% to approximately 2.0 million passengers. There was a comparatively slight increase in international transport due
to interim changes in the political environment in China with South Korea and Japan, among others.
Comparison with the forecasted development
Airport
2017 Forecast 2016 [adjustment during the year]
Frankfurt
Cargo in m. t.
Ljubljana
Fraport Greece
Lima
Twin Star
Antalya
Hanover
St. Petersburg
Xi’an
64,500,386
2,194,056
1,683,045
Passenger growth between 2% and 4%
[growth of around 5%]
Moderate increase
[increase of up to 4%]
Growth in the low single-digit percentage range
[growth in the low double-digit percentage range]
Rise in passangers numbers of over 5 %
[increase by approximately 10%]
27,582,575
20,607,443 Significant growth in the high single-digit percentage range
Growth in the single-digit percentage range
[growth rate of just over 5%]
Growth in the low double-digit percentage range
[significant double-digit passenger growth]
26,346,068
4,953,039
5,870,104 Growth in the low single-digit percentage range
16,125,520
41,856,604
Slight recovery
[growth in the double-digit percentage range]
Growth in the mid single-digit percentage range
[growth in the low double-digit percentage range]
2016 Change form the
previous year in %
60,786,937
2,113,594
1,404,831
25,008,965
18,844,534
4,568,478
19,027,504
5,408,814
13,265,037
36,996,728
+6.1
+3.8
+19.8
+10.3
+9.4
+8.4
+38.5
+8.5
+21.6
+13.1
The Group’s Results of Operations
Group revenue increased by 13.5% in fiscal year 2017 to €2,934.8 million (+€348.6 million). In addition to the passenger growth,
positive factors at the Frankfurt site were the increase in airport charges by an average of 1.9% as at January 1, 2017, increased
income from security services and higher proceeds in connection with the sale of land (2017: €22.9 million compared to 2016:
€14.6 million). Increased earnings from Ground Services (+€8.1 million) as well as higher retail revenue (+€5.5 million) also had
a positive effect on revenue. Outside of Frankfurt, significant contributions to revenue growth came from Fraport Greece
(+€234.9 million) and the Group companies Lima (+€19.9 million) and Fraport Slovenija (+€5.7 million). Revenue included
€41.7 million in connection with the application of IFRIC 12 (previous year: €19.9 million). Adjusted for revenue from IFRIC 12,
Group revenue increased by €326.8 million to €2,893.1 million (+12.7%).
The decrease in other operating income resulted from the compensation payment of €241.2 million received in the previous
year from the Manila Project as well as the gain from the sale of shares in Thalita Trading Ltd. amounting to €40.1 million, which
significantly increased other operating income for 2016. The total revenue was €3,010.4 million (+1.9%).
Personnel expenses increased in the past fiscal year by 2.5% (+€26.2 million) to €1,092.9 million. In particular, the increase was
due to the take-over of operation of the Greek regional airports (+€25.7 million), higher wages at Fraport AG (+€17.7 million) and
at the Group company FraSec (+€6.5 million) as well as higher expenditures due to traffic volumes at the Group company
FraGround (+€8.8 million). In contrast, the addition to the provision for the staff restructuring program at Fraport AG was lower by
€28.3 million compared to the previous year, which reduced expenses.
Cost of materials increased from €621.9 million to €720.4 million (+15.8%) primarily due to the take-over of operation of the
Greek regional airports (+€74.2 million), increased concession fees as a result of traffic volumes from the Group company Lima
(+€10.4 million), higher expenses in connection with security services at the Group company FraSec (+€4.0 million), and due to
higher expenses associated with increased revenue from sales of land (+€3.5 million).
Compared to the previous year, other operating expenses decreased by 8.4%. In particular, these were negatively impacted in
an amount of €42.4 million in fiscal year 2016 by the repayment obligation resulting from the GKA payment already received in
connection with the compensation payment from the Manila project. Higher expenses from Fraport Greece (+€17.0 million) had
the opposite effect.
82
Group Management Report / Economic Report
Fraport Annual Report 2017
Operating expenses (cost of materials, personnel expenses, and other operating expenses) amounting to €2,007.2 million were
€106.9 million higher than in the previous year (+5.6%). Start-up costs of €12.3 million led to an increase in expenses within the
scope of preparations for the operational take-overs of the airports in Fortaleza and Porto Alegre. Group expenses included
€41.7 million in connection with the application of IFRIC 12 (previous year: €19.9 million). Adjusted for expenses from IFRIC 12,
Group expenses increased by €85.1 million to €1,965.5 million (+4.5%).
EBITDA decreased by €50.9 million to €1,003.2 million (–4.8%) primarily due to lower other operating income. Relative to Group
revenue, this meant that there was an EBITDA margin of 34.2% (previous year: 40.8%).
At €360.2 million, depreciation and amortization was below the previous year’s level (–€0.2 million). Higher depreciation and
amortization, in particular in connection with Fraport Greece, (+€32.5 million) stood in contrast to lower depreciation and amorti-
zation expense due to the impairment of goodwill of the Group company FraSec recognized in the previous year (–€22.4 million).
Correspondingly, Group EBIT reached €643.0 million (–7.3%).
The cause of the deterioration of the negative financial result (from –€112.3 million to –€136.9 million) was due primarily to the
worse interest result because of interest expenses related to financing the one-off payment as well as the compounding of con-
cession liabilities within the scope of the take-over of the operation of the Greek regional airports (+€49.2 million). A positive effect
came from improved earnings from companies accounted for using the equity method, which developed positively mainly as a
result of the Group companies Antalya (+€31.8 million) and Xi'an (+€2.2 million). The other financial result, including the early
repayment of the project financing of the Group company Lima, had a negative effect (–€10.2 million).
Group EBT decreased from €75.3 million to €506.1 million (–13.0%). At an expected tax rate of 28.9% (previous year: 31.1%)
and income tax expense of €146.4 million (previous year: €181.1 million), the Group result was €359.7 million (–10.1%). This
resulted in basic earnings per share of €3.57 (previous year: €4.07).
Comparison with the forecasted development
€ million
2017 Forecast 2016 [adjustment during the year]
2016 Change from the
previous year
Change from the
previous year in %
Revenue
Expenses adjusted by IFRIC 12
2,934.8 Up to about €2.9 billion
1,965.5 Slight decrease
2,586.2
1,880.4
+348.6
+85.1
EBITDA
Depreciation and amortization
EBIT
Financial result
EBT
Group result
Dividend per share in €
Of between around €980 million and approximately
€1,020 million
[start-up costs in regard with Fortaleza and Porto Alegre
of up to €15 million]
1,003.2
360.2 Slightly higher
643.0 Of about €610 million to around €650 million
–136.9 Noticeable deterioration
506.1 Between approximately €450 million and about €490 million
359.7 Between around €310 and about €350 million
1.50 At least stable
1,054.1
360.4
693.7
-112.3
581.4
400.3
1.50
–50.9
–0.2
–50.7
–24.6
–75.3
–40.6
0.0
+13.5
+4.5
–4.8
–0.1
–7.3
–
–13.0
–10.1
0.0
Contrary to the forecast in 2016, expenses adjusted by IFRIC 12 increased slightly. This is due to, among other things, higher
personnel expenses as a result of the increased provision for the staff restructuring program based on shifts of individual options
within the package of measures as well as the start-up costs associated with the Group companies Fortaleza and Porto Alegre.
Due to the operational take-over of 14 Greek regional airports on April 11, 2017, which occurred later than forecast, Group depre-
ciation and amortization did not increase as forecasted but rather remained constant. EBT and the Group result were slightly
above the forecasted ranges due to the significantly stronger recovery of the Group company Antalya, which is accounted for
using the equity method.
Additional key figures developed in line with forecasts.
Fraport Annual Report 2017
Group Management Report / Economic Report
83
Results of Operations for Segments
Aviation
€ million
Revenue
Personnel expenses
Cost of materials
EBITDA
Depreciation and amortization
EBIT
Average number of employees
2017
954.1
329.5
48.9
249.5
117.8
131.7
5,881
2016
910.2
326.6
40.9
217.9
147.5
70.4
6,048
Change
Change in %
+43.9
+2.9
+8.0
+31.6
–29.7
+61.3
–167
+4.8
+0.9
+19.6
+14.5
–20.1
+87.1
–2.8
Revenue in the Aviation segment increased by 4.8% to €954.1 million (+€43.9 million). In addition to the passenger growth,
positive factors at the Frankfurt site were the increase in airport charges as at January 1, 2017 by an average of 1.9% as well as
higher revenue from security services.
The segment’s personnel expenses increased slightly by €2.9 million to €329.5 million (+0.9%). Additional personnel expenses
resulted, in particular, in connection with higher wages at Fraport AG (+€3.7 million) and at the Group company FraSec
(+€6.5 million). In contrast, lower additions to the provision for the staff restructuring program had a reducing effect (–€6.4 million).
Increased expenses associated with capital expenditure (+€2.7 million) as well as higher expenses related to security services
(+€4.0 million) increased the segment’s cost of materials to €48.9 million (+€8.0 million). In total, non-staff costs increased by
7.0% to €93.8 million.
EBITDA was up by €31.6 million on the previous year, at €249.5 million (+14.5%). Significantly lower depreciation and amortization
– due to the impairment of goodwill of the Group company FraSec in the amount of €22.4 million – led to a segment EBIT of
€131.7 million (+€61.3 million).
Retail & Real Estate
€ million
Revenue
Personnel expenses
Cost of materials
EBITDA
Depreciation and amortization
EBIT
Average number of employees
2017
521.7
53.6
150.7
377.5
83.7
293.8
651
2016
493.9
53.2
145.3
368.0
84.4
283.6
645
Change
Change in %
+27.8
+0.4
+5.4
+9.5
–0.7
+10.2
+6
+5.6
+0.8
+3.7
+2.6
–0.8
+3.6
+0.9
At €521.7 million, revenue in the Retail and Real Estate segment was 5.6% above the previous year’s value (+€27.8 million). The
positive revenue development was due to higher proceeds from the sale of land (2017: €22.9 million compared to 2016:
€14.6 million). In addition, passenger growth had a positive effect on retail revenue (+€5.4 million) – this included additional
advertising revenue amounting to €2.5 million – as well as on parking revenue (+€5.3 million). The net retail revenue per passenger
deceased by 3.4% to €3.37 compared to the previous year (previous year: €3.49). In addition to the depreciation of various
currencies against the euro, which led to reduced purchasing power, the reasons for this decrease also included changes to the
passenger mix and a disproportionate increase in passenger numbers on European routes. Other income decreased by
€3.3 million, primarily as a result of allowances on accounts receivable released in the previous year.
Cost of materials increased slightly by €5.4 million to €150.7 million and operating expenses by €3.1 million to €40.0 million in
connection, among other things, with the increased proceeds from the sale of land (+€3.5 million) as well as expenses in connec-
tion with capital expenditure (+€3.5 million). There was almost no change in personnel expenses at €53.6 million (+0.8%), which
led to an EBITDA of €377.5 million (+2.6%). With depreciation and amortization unchanged, segment EBIT stood at €293.8 million
(+€10.2 million).
84
Group Management Report / Economic Report
Fraport Annual Report 2017
Ground Handling
€ million
Revenue
Personnel expenses
Cost of materials
EBITDA
Depreciation and amortization
EBIT
Average number of employees
2017
641.9
431.0
51.6
51.4
39.8
11.6
8,600
2016
630.4
435.7
52.3
34.7
40.2
–5.5
8,649
Change
Change in %
+11.5
–4.7
–0.7
+16.7
–0.4
+17.1
–49
+1.8
–1.1
–1.3
+48.1
–1.0
–
–0.6
In the reporting period, revenue from the Ground Handling segment was slightly above the previous year’s level (+1.8%) at
€641.9 million. This is mainly due to increased revenue from ground services (+8.1%) due to traffic growth at the Frankfurt site.
While personnel expenses at Fraport AG declined mainly as a result of lower additions to the provision for the staff restructuring
program (–€14.4 million), personnel expenses increased in particular at the Group company FraGround due to traffic volumes
(+€8.8 million). In total, personnel expenses in the segment decreased to €431.1 million (–1.1%). Cost of materials and other
operating expenses changed only slightly compared to the previous year to €51.6 million (–€0.7 million) and €20.1 million
(–€0.6 million), respectively.
Correspondingly, EBITDA increased to €51.4 million (+€16.7 million). With depreciation and amortization (–€0.4 million) virtually
unchanged, segment EBIT stood at €11.6 million (+€17.1 million).
International Activities & Services
€ million
Revenue
Personnel expenses
Cost of materials
EBITDA
Depreciation and amortization
EBIT
Average number of employees
2017
817.1
278.7
469.3
324.8
118.9
205.9
5,541
2016
551.7
251.2
383.4
433.5
88.3
345.2
4,980
Change
Change in %
+265.4
+27.5
+85.9
–108.7
+30.6
–139.3
561
+48.1
+10.9
+22.4
–25.1
+34.7
–40.4
+11.3
Revenue in the International Activities & Services segment grew significantly by €265.4 million on the previous year to reach
€817.1 million (+48.1%). Revenue development was mainly driven by Fraport Greece (+€234.9 million), the Group company Lima
(+€19.9 million), and the Group company Fraport Slovenija (+€5.7 million). Revenue included €41.7 million in connection with the
application of IFRIC 12 (previous year: €19.9 million). The segment’s other income decreased significantly due to the compensa-
tion payment received in the previous year from the Manila Project (–€241.2 million) as well as the gain from the sale of shares in
Thalita Trading Ltd. (–€40.1 million).
The take-over of operation of the Greek regional airports increased personnel expenses (+€25.7 million), cost of materials
(€74.2 million), and other operating expenses (€17.0 million). In addition, there were higher traffic-related concession payments
in the Group company Lima (+€10.4 million) and higher non-staff expenses in the service units at the Frankfurt site. Due to the
Group companies Fortaleza and Porto Alegre, start-up costs – without corresponding revenue – amounting to €12.3 million were
incurred in the past fiscal year, which also increased segment expenses. The repayment obligation from the previous year result-
ing from the GKA payment already received in connection with the compensation payment from the Manila project (–€42.4 million)
in 2016 led to a reduction in expenses. Segment expenses included €41.7 million in connection with the application of IFRIC 12
(previous year: €19.9 million).
EBITDA decreased by €108.7 million to €324.8 million (–25.1%) primarily due to lower other income. Higher depreciation and
amortization, in particular in connection with Fraport Greece (+€32.5 million) led to segment EBIT of €205.9 million
(–€139.3 million).
Fraport Annual Report 2017
Group Management Report / Economic Report
85
Development of the key Group companies outside of Frankfurt (IFRS values before consolidation)
Fully consolidated
Group Companies
Fraport USA Inc.
Fraport Slovenija
Fraport Greece2)
Lima
Twin Star
Share
in %
100
100
73.4
70.01
60
Revenue in € million1)
EBITDA in € million
EBIT in € million
Result in € million
2017
2016
Δ %
2017
2016
Δ %
2017
2016
Δ %
2017
2016
Δ %
61.8
41.7
234.9
325.6
67.5
62.9
36.0
–
305.7
63.8
–1.7
+15.8
–
+6.5
+5.8
13.0
15.6
117.4
120.0
39.6
12.0
14.5
–
110.8
40.8
+8.3
+7.6
–
+8.3
–2.9
–1.6
5.9
84.9
103.4
28.0
–3.4
4.4
–
92.8
29.2
–
+34.1
–
+11.4
–4.1
–3.9
5.3
13.5
54.4
20.8
–0.6
2.0
–
53.5
21.3
–
> 100
–
+1.7
–2.3
Group companies accounted for
using the equity method
Share
in %
Revenue in € million
EBITDA in € million
EBIT in € million
Result in € million
2017
2016
Δ %
2017
2016
Δ %
2017
2016
Δ %
2017
2016
Δ %
Antalya3)
Hanover
Pulkovo/Thalita
Xi’an4)
51/50
30
25
24.5
260.2
156.5
258.2
231.2
180.9
147.6
194.0
213.4
+43.8
+6.0
+33.1
+8.3
222.6
26.3
147.4
90.3
141.1
28.9
105.7
97.1
+57.8
–9.0
+39.5
–7.0
114.1
6.1
107.3
41.6
32.5
8.8
71.4
45.6
> 100
–30.7
+50.3
–8.8
31.4
2.3
–29.9
37.3
–32.2
2.8
–0.8
30.4
–
–17.9
–
+22.7
1) Revenue adjusted by IFRIC 12: Lima 2017: €306.9 million (2016: €285.7 million); Fraport Greece 2017: €211.8 million.
2) Take-over of operations on April 11, 2017.
3) Share of voting rights: 51%, dividend share: 50 %.
4) Figures according to the separate financial statement.
The Group company Fraport USA generated revenue amounting to €61.8 million in the 2017 fiscal year. Despite traffic increases
at all sites, this was €1.1 million below the previous year’s level due to currency effects. EBITDA of €13.0 million and a level of
depreciation and amortization lower by a total of €0.7 million led to EBIT of –€1.6 million. Negative tax effects led to a result of –
€3.6 million compared to the previous year.
With significantly growing passenger numbers, the Group company Fraport Slovenija reported revenue of €41.7 million, EBITDA
of €15.6 million, EBIT of €5.9 million and a result of €5.3 million in the past fiscal year.
The 14 Greek regional airports, for which the Group took over operations on April 11, 2017, collectively referred to as Fraport
Greece, contributed revenue of €234.9 million, EBITDA of €117.4 million and EBIT of €84.9 million, driven by strong passenger
development. Despite interest expenses related to financing the one-off payment as well as the compounding of the concession
liability, the Group company’s result was positive at €13.5 million.
Helped by strong traffic development, the Group company Lima realized significant growth in revenue, EBITDA, EBIT, and result
in 2017, with increases of €19.9 million, €9.2 million, €10.6 million, and €0.9 million, respectively.
The Group company Twin Star generated revenue growth of €3.7 million to reach €67.5 million in the past fiscal year. As a result
of one-off effects from the previous year (release of provision) as well as higher personnel expenses, EBITDA and EBIT each
decreased by €1.2 million and the result decreased by €0.5 million.
Owing to the significantly higher passenger volume in international traffic, the Group company Antalya, which is accounted for
using the equity method, saw a steep increase in result figures in 2017. The Group company’s result of €31.4 million was
€63.6 million above the previous year’s figure.
The good traffic development at the Group company Hanover had a positive impact on revenue (+6.0%). EBITDA and EBIT
deteriorated due to higher non-staff costs. The result of the 30% stake was €2.3 million.
The Group company Pulkovo/Thalita posted an increase in revenue from €194.0 million to €258.2 million (+33.1%) in the year
under review based on passenger growth. The EBITDA and EBIT values were also well above those of the previous year at 39.5%
and 50.3%, respectively. The result deteriorated from –€0.8 million to –€29.9 million due to negative exchange rate effects in
2017.
86
Group Management Report / Economic Report
Fraport Annual Report 2017
The positive traffic development at the Group company Xi’an led to an increase in revenue of 8.3% in 2017. The company EBITDA
deteriorated in comparison to the previous year due to a disproportionate increase in expenses. At €37.3 million, the result grew
by €6.9 million (+22.7%). Offsetting the increase in traffic, the translation of the Chinese currency into euros had the effect of
decreasing the result.
Comparison with the forecasted development
Aviation
in € million
Revenue
EBITDA
EBIT
Retail & Real Estate
in € million
Revenue
EBITDA
EBIT
Ground Handling
in € million
Revenue
EBITDA
EBIT
International Activities
& Services
in € million
Revenue
EBITDA
EBIT
2017 Forecast 2016 [adjustment during the year]
2016 Change from the
previous year
Change from the
previous year in %
954.1 Growth in revenue of over 2%
249.5 Noticeably above the level reported in 2016
131.7 Well above the previous year´s level
2017 Forecast 2016 [adjustment during the year]
521.7 Slight increase in revenue
377.5 Slightly above the previous year´s level
293.8 Slightly above the previous year´s level
2017 Forecast 2016 [adjustment during the year]
641.9 Slight rise in revenue
51.4 Well above the previous year
11.6 Noticeable increase
2017 Forecast 2016 [adjustment during the year]
+43.9
+31.6
+61.3
+27.8
+9.5
+10.2
+11.5
+16.7
+17.1
+4.8
+14.5
+87.1
+5.6
+2.6
+3.6
+1.8
+48.1
–
910.2
217.9
70.4
2016
493.9
368.0
283.6
2016
630.4
34.7
–5.5
2016
817.1 Revenue of up to about €800 million
Fall to around €330 million
[start-up costs of up to €15 million in regard with Fortaleza and
Porto Alegre]
324.8
205.9 Fall to around €210 million
551.7
+265.4
+48.1
433.5
345.2
–108.7
–139.3
–25.1
–40.4
The segment key figures developed in line with the forecast from 2016.
Asset and Financial Position
Asset and capital structure
In comparison to the 2016 balance sheet date, the total assets of the Fraport Group as at December 31, 2017 were significantly
above the level of the previous year at €10,832.4 million (+22.1%).
Non-current assets increased by €2,081.6 million to €9,779.3 million primarily due to higher investments in airport operating
projects in connection with the take-over of operations of the Greek regional airports. These included the one-off payment made,
capitalized minimum concession payments, and capital expenditure on the infrastructure of the airports. The acquisition costs of
the concessions for Fortaleza Airport and Porto Alegre Airport led to an increase in capital expenditure on airport operating pro-
jects. Current assets decreased – despite an increase in trade accounts receivable as at the balance sheet date – primarily due
to a decline in cash and cash equivalents from the financing of Fraport Greece to €1,053.1 million (–10.4%).
Fraport Annual Report 2017
Group Management Report / Economic Report
87
Despite the distribution of profits for the past fiscal year, shareholders’ equity rose in 2017 from €3,841.4 million to
€4,028.7 million (+4.9%). This increase is mainly due to the positive Group result and the capital contribution by the minority
shareholder of Fraport Greece. After deducting the “non-controlling interests” item in the amount of €160.6 million and the profit
earmarked for distribution of €138.7 million, the shareholders’ equity ratio reached 34.4% as at December 31, 2017, falling short
of the level of 40.6% as at December 31, 2016 by 6.2 percentage points.
Non-current liabilities increased significantly due to higher financial liabilities and other liabilities by €1,431.1 million to
€5,543.6 million (+34.8%). Current liabilities rose noticeably from €918.9 million to €1,260.1 million (+37.1%). This was also
primarily due to an increase in financial liabilities and other liabilities. The current and non-current liabilities particularly increased
as part of the financing of concession liabilities of Fraport Greece and in connection with the Group companies Fortaleza and
Porto Alegre.
The Group's liquidity decreased as at December 31, 2017 primarily due to cash outflows in connection with the acquisitions in
Greece and Brazil by €228.9 million to €1,018.6 million (previous year: €1,247.5 million). In contrast, current and non-current
financial liabilities increased by €927.6 million to a total of €4,531.0 million (previous year: €3,603.4 million), which resulted pri-
marily from the project financing in Greece. This led to a €1,156.5 million increase in net financial debt to €3,512.4 million
(previous year: €2,355.9 million) and a gearing ratio of 94.2% (previous year: 65.4%), which increased by 28.8 percentage points,
in particular as a result of higher debt.
Structure of the consolidated financial position as at December 31
€ million
2017
Assets
Liabilities
and equity
2016
Assets
Liabilities
and equity
9,779.3
4,028.7
5,543.6
7,697.7
1,053.1
1,260.1
1,175.1
10,832.4
8,872.8
3,841.4
4,112.5
918.9
Non-current assets
Current assets
Shareholders’ equity Non-current liabilities
Current liabilities
Additions to non-current assets
In the 2017 reporting period, additions to non-current assets in the Fraport Group amounted to €2,591.1 million (previous year:
€376.6 million). The main driver of this increase was capital expenditure on “airport operating projects” in the amount of
€2,197.9 million (previous year: €32.2 million). Additions to “property, plant, and equipment” in the past fiscal year were €287.1
million (previous year: €266.9 million), and additions to “financial assets” were €96.6 million (previous year: €70.6 million),
€9.0 million related to the item “other intangible assets” (previous year: €6.2 million) and €0.2 million to “investment property”
(previous year: €0.7 million). The capitalization of interest expenses relating to construction work amounted to €20.4 million (pre-
vious year: €18.8 million).
Additions relating to the “airport operating projects” concerned Fraport Greece in the amount of €1,763.1 and the Group companies
Fortaleza and Porto Alegre in the amount of €388.6 million. The additions included the respective capitalized airport concessions,
the capitalized minimum concession payments as well as the capital expenditure on the infrastructure of the airports.
At Fraport AG, the additions to non-current assets amounted to €279.0 million (2016: €254.1 million). The focus of the additions
to property, plant, and equipment was modernization and maintenance measures amounting to €158.8 million, capacity-generat-
ing capital expenditure on the Expansion South project of around €103.0 million, primarily relating to Terminal 3 at the Frankfurt
site, as well as capacity-enhancing measures of €17.2 million, such as Pier C in Terminal 1.
Additions to non-current financial assets of €96.9 million resulted in particular from the positive contribution to earnings from the
Group company Antalya, which is accounted for using the equity method, from the first-time recognition of shares in the Group
company Frankfurt Airport Retail and from securities.
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The additions to airport operating projects; property, plant, and equipment; intangible assets; and investment property are at-
tributed to the individual segments as follows:
Share in Group result by site
in millions
2,240.7
International Activities &
Services
156.3
Aviation
64.9
Retail & Real Estate
32.3
Ground Handling
Capital expenditure amounting to €156.3 million (previous year: €126.5 million), which was attributed to the Aviation segment,
particularly concerned the ongoing construction work in connection with the Expansion South project as well as the renovation of
the runways at Frankfurt Airport.
In fiscal year 2017, the Retail & Real Estate segment recorded capital expenditure amounting to €64.9 million (previous year:
€62.4 million), which was primarily due to capacity-expanding measures within the framework of the Expansion South project.
The Ground Handling segment recorded additions amounting to €32.3 million (previous year: €36.9 million). In addition to capital
expenditure in connection with the Expansion South project, these also had to do with the modernization measures for existing
facilities.
In the International Activities & Services segment, additions to non-current assets amounted to €2,240.7 million (last year:
€80.2 million). Additions result primarily from the aforementioned capitalized airport concessions, the capitalized minimum con-
cession payments as well as the capital expenditure on airport infrastructure in connection with Fraport Greece as well as the
Group companies Fortaleza and Porto Alegre.
The concession agreements in Greece, Brazil, and Lima include expansion and extension commitments on airport infrastructure.
Additional information can be found in the chapter titled “Finance Management” starting on page 64, as well as in the chapters
titled “Business Outlook” and “Medium-term Outlook” starting on page 126.
Fair values
Differences between the carrying amounts and fair values may arise for assets and liabilities that are not valued at fair value in
the Fraport consolidated financial statements. For an overview of the valuation methods used for significant balance sheet items,
see Group note 4.
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89
Investments in airport concessions make up approximately 95% of the intangible assets in non-current assets. While their carrying
amount results from amortized acquisition costs and primarily depends on the amount of the determined acquisition costs and
term of the respective concession agreements as basis of the regular depreciation and amortization, the fair value of the invest-
ments in airport concessions is primarily driven by the development of traffic volume and passenger numbers at the concession
airports and the resulting cash flows.
Property, plant, and equipment of the Fraport group is mainly made up of land/buildings (approximately 56%) and technical equip-
ment and machinery (approximately 25%) of Fraport AG. While the fair value of land is derived from standard land values (see
also Group note 21), the fair value of airport infrastructure (buildings, technical equipment, and machinery) is determined in refer-
ence to the corresponding replacement costs.
The fair value of investment property (see also Group note 22) is based on the standard land value (land) or capitalized income
value (buildings). The fair value of land designated as land for sale in the inventories (see also Group note 28) are also based on
standard land values.
For information on the fair values of derivative and non-derivative financial instruments see Group note 40.
Statement of cash flows
At €790.7 million, the cash flow from operating activities (operating cash flow) in the past fiscal year was significantly higher
than the previous year by €207.5 million (+35.6%). Compared to the previous year, this increase was due primarily to the signifi-
cant improvement of the operating activities based on the operating contribution of Fraport Greece as well as the positive opera-
tional development at the Frankfurt site.
Cash flow used in investing activities without investments in cash deposits and securities amounted to €1,869.2 million,
a significant increase of €1,828.1 million compared to the figure in fiscal year 2016. This is mainly due to the one-off payment of
approximately €1.2 billion at the beginning of the take-over of operations of the Greek regional airports as well as the acquisition
costs for the concessions of the airports in Fortaleza and Porto Alegre of approximately €181 million, which increased investments
in airport operating projects. The distributed dividends of the previous year of the Group company Antalya, which is accounted for
using the equity method, as well as one-off effects in connection with the compensation payment as part of the Manila Project
and the sale of shares in Thalita Trading Ltd. had a counter-rotating effect.
Correspondingly, the increase in the operating cash flow led to a significantly higher free cash flow of €393.1 million (previous
year: €301.7 million). Taking into account investments in and proceeds from securities and promissory note loans as well as
payments from time deposits, the overall cash flow used in investing activities was €1,604.5 million (previous year: cash outflow
of €22.2 million).
As a result of new financial liabilities from the financing of Fraport Greece and the Group companies Fortaleza and Porto Alegre,
as well as the capital contributions from non-controlling interests in connection with Fraport Greece, there was a cash inflow
from financing activities of €879.7 million as at December 31, 2017 (previous year: cash outflow of 347.6 million).
Taking into account exchange rate fluctuations and other changes, Fraport reported cash and cash equivalents based on the
statement of cash flows of €461.0 million as at the 2017 balance sheet date (previous year: €448.8 million).
The following table shows a reconciliation to cash and cash equivalents as shown in the consolidated statement of financial
position.
Reconciliation to the cash and cash equivalents as at the consolidated statement of financial position
€ million
December 31, 2017
December 31, 2016
Bank and cash balances
Time deposits with a remaining term of less than three months
Cash and cash equivalents as at the consolidated statement of cash flows
Time deposits with a remaining term of more than three months
Restricted cash
Cash and cash equivalents as at the consolidated statement of financial position
185.4
275.6
461.0
112.6
55.8
629.4
208.2
240.6
448.8
263.9
23.3
736.0
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Summary of the statement of cash flows and reconciliation to the Group’s liquidity
+790.7
–1,869.2
€ million
448.8
+879.7
–53.7
461.0
+557.6
1,018.6
+264.7
Cash and cash
equivalents
as at
January 1,
2017
Cash flow
from operating
activities
Cash flow
used in investing
activities excl.
cash deposits and
securities
Cash flow
from investing
activities in cash
deposits and
securities
Cash flow
used in financing
activities
Foreign currency
translation effects and
other changes
on cash and cash
equivalents
Cash and cash
equivalents as at
December 31,
2017
Short-term
realizable assets
Group’s liquidity
as at
December 31,
2017
Financing analysis
In 2017, the finance management of the Fraport Group continued to pursue balanced funding via the operating cash flow and a
diversified debt financing base with a balanced maturity profile. As at the balance sheet date, there was a balanced mix of financing
consisting of bilateral loans (23.0%), bonds (21.0%), loan financing from public loan institutions (15.2%), project financing (18.0%),
and promissory note loans (22.8%).
To reduce interest rate risks from borrowing with floating interest rates, in the past interest rate hedging transactions were con-
cluded in some cases. The nominal volume relating to this was €550 million at the end of the year, which was down by
€205 million (–27%). Overall, the financial liabilities had an average remaining term of 4.4 years with an average interest maturity
of 4.0 years. Taking into account interest rate hedging transactions, the floating rate portion of the gross debt of Fraport AG was
approximately 20.5%, and the fixed portion approximately 79.5% (floating rate portion in previous year: approximately 23%, fixed
portion: approximately 77%). The cost of debt after interest rate hedging measures was approximately 2.8% (previous year: 3.1%).
Fully-consolidated Group companies in Germany are usually integrated into the Fraport AG cash pool, so that acquiring separate
external funding was not necessary. In fully-consolidated foreign Group companies, funding is primarily carried out through com-
mon project financing schemes. No analysis or calculation of the financial debt structure and liquidity at segment level is carried
out.
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Group Management Report / Economic Report
91
The key features of the Group financing instruments with regard to type, maturity, and interest rate structures are presented in the
following table:
Maturity
Repayment structure
Interest
Interest rate
Financial debt structure
Financing type
Year of
origin
Nominal volume
in € million
Promissory note loans
2012
235
2020
2022
2030
end of term
fixed
2012
2013
2014
2014
2017
2017
2009
60
50
350
50
135
2020
2022
2028
2021
2021
2025
2027
2024
2027
490 2018 – 2019
150
2016
2009
2009
1993 - 2017
2017
200
800
150
2026
2019
2029
1,038.8 2018 – 2028
815.8 2034 – 2041
end of term
end of term
end of term
end of term
end of term
end of term
ongoing repayment during
the term of the loans
end of term
end of term
end of term
mainly end of term
ongoing repayments during
the term
fixed
fixed
fixed
fixed
fixed
fixed
floating
fixed
fixed
fixed
mainly fixed
mainly fixed
Public loans
Bond issue
Private placement
Bilateral loans
Project financing
(fully consolidated foreign group
companies)
2.42 %
2.90 %
4.00 %
2.74 % p. a.
3.06 % p. a.
4.0 % p. a.
1.436 % p. a.
1.436 % p. a.
1.395 % p.a.
1.81 % p.a.
1.086 % p.a.
1.609 % p.a.
6-month-EURIBOR + margin
1.18 % p. a.
5.25 % p. a.
5.875 % p. a.
0,76 % – 5,08 % p.a.
4,5 % – 6,0 % p.a.
The contractual agreements for the financial liabilities of Fraport AG include two customary non-financial covenants consisting of
a negative pledge and a pari passu clause. Only the public loans include, among other things, commonly accepted credit clauses
regarding changes in shareholder structure and in the control of the company (so-called change-of-control clause). If these have
a proven negative effect on the credit rating of Fraport AG, the creditors have above a certain threshold the right to call the loans
due ahead of time.
Independent project-financing arrangements of fully consolidated foreign Group companies, in particular in Greece, contain a
series of credit clauses typical for this type of financing. These clauses include regulations under which certain debt service
coverage ratios and control indicators for leverage and credit terms must be complied with. Failure to comply with the agreed
credit clauses may lead to restrictions on the distribution of dividends and/or to the early redemption of loans or to the additional
payment of shareholders’ equity. Compliance with these criteria is examined on an ongoing basis. Regarding the financial indica-
tors, all of the clauses had been complied with as at the balance sheet date 2017.
The maturity profile of the Fraport Group’s financial debt showed a largely balanced repayment structure as at the balance sheet
date (financial debt in foreign currencies translated as at the balance sheet date rate).
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Maturity profile as at December 31, 2017
€ million
1,018.6
4,531.0
544.4
1,128.3
182.5
421.1
412.7
65.4
148.6
182.8
271.3
1,169.0
Liquidity
Gross
debt
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027 ++
Carrying amounts
Nominal values
Liquidity in the fully consolidated foreign Group companies was €523.8 million (previous year: €467.1 million). As it is partly subject
to drawing restrictions arising from the conditions stipulated in the project financing agreements, it is not part of the asset man-
agement at Fraport AG.
Liquidity analysis
The strategy of broad diversification of investments in corporate bonds was continued in the 2017 fiscal year. The key character-
istics of Fraport AG’s investment instruments in terms of type, remaining term, and interest structure are presented in the following
table:
Asset structure of Fraport AG
Investment type
Market value
in € million1)
Average remaining term
in years
Promissory note loans
Overnight funds
Time deposits
Bonds
thereof governmental
thereof financials
thereof insurances
thereof industrials
Commercial paper
1) As a result of rounding, there may be discrepancies when summing up.
25.0
3.5
0.0
93.3
0.0
69.3
291.1
0.0
37.2
67.1
6.5
32.2
217.4
0.0
0.7
2.9
0.0
0.5
0.0
1.2
2.5
0.0
1.3
1.1
0.2
1.0
2.8
0.0
Interest
floating
fixed
fixed
fixed
floating
floating
fixed
fixed
floating
fixed
fixed
floating
fixed
fixed
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93
As at December 31, 2017, industrial promissory note loans and industrial bonds were distributed across the following industry
sectors (market value: €278.1 million):
Allocation of industrial assets
in %
17.4
Sectors <5%
5.9
Software
7.3
Chemicals
5.1
Pharma and health
14.1
Oil & Gas
The ratings of all investments used in asset management are presented in the graphic.
Rating structure of assets
in %
0
20
40
AAA
AA
A
BBB
BB
Not rated
18.7
Automotives
12.9
Food and beverages
10.1
Telecommunication
8.5
Transport and logistics
60
0.0
20.4
39.2
37.3
2.1
1.0
As at the balance sheet date, rated (99.0%) and non-rated assets (1.0%) were in the industrial portfolio.
The cost of carry, which is calculated using a (tiered statement) maturity-matching principle, was –0.33% (–€1.6 million) as at
December 31, 2017, which means a positive contribution was achieved in Asset Management.
As at the balance sheet date, the Fraport Group had unused credit lines amounting to €758.0 million (previous year:
€580.4 million) available, €276.4 million of which has, however, been earmarked for future capital expenditure on infrastructure.
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Significance of off-balance-sheet financial instruments for the financial position
Fraport focuses on the products presented in the “Financing analysis” section for financing its activities. Off-balance-sheet financial
instruments are of no material significance in Fraport’s financing mix.
Rating
In light of Fraport’s unrestricted access to the capital market at attractive prices, very healthy liquidity supply combined with its
comfortable portfolio of free, approved credit lines, there has not been a need for an external rating so far.
Comparison with the forecasted development
€ million
2017 Forecast 2016 [adjustment during the year]
Capital expenditure in prop-
erty, plant, and equipment
Operating cash flow
Free cash flow
Net financial debt
Gearing ratio (%)
Group’s liquidity
Shareholders’ equity
Shareholders’ equity ratio (%)
287.1 At about or slightly above previous year´s level
790.7 Noticeably above previous year
393.1 At or slightly below the previous year´s level
3,512.4
Significant increase of about €900 million
[increase of approximately €1.2 billion]
94.2 Significant increase
1,018.6 Significant fall
4,028.7 10% higher than the previous year
34.4 Slightly below the previous year´s level
2016 Change from the
previous year
Change from the
previous year in %
266.9
583.2
301.7
2,355.9
65.4
1,247.5
3,841.4
40.6
+20.2
+207.5
+91.4
+1,156.5
+28.8 PP
–228.9
+187.3
–6.2 PP
+7.6
+35.6
+30.3
+49.1
–
–18.3
+4.9
–
The good operating development in Frankfurt as well as at the Group sites led to a significant rise in operating cash flow, and as
a result – contrary to the forecast from 2016 – to a significant increase in free cash flow. Due to the slightly lower increase in
shareholders’ equity by 4.9%, the shareholders’ equity ratio dropped significantly by 6.2 percentage points to 34.4%.
The additional key figures developed in line with the forecast from 2016.
Value Management
Development of the value added
€ million
Fraport Group
Aviation
Retail & Real Estate
Ground Handling
2017
2016
2017
2016
2017
2016
2017
2016
International Activities &
Services
2016
2017
Adjusted EBIT1)
Fraport assets
Costs of capital before taxes
Value added before taxes
ROFRA in %
696.6
6,965.8
466.7
229.9
10.0
691.0
6,069.2
522.0
169.1
11.4
131.8
2,683.8
179.8
–48.0
4.9
70.4
2,463.9
211.9
–141.5
2.9
292.8
1,891.1
126.7
166.1
15.5
283.1
1,903.1
163.7
119.4
14.9
16.4
574.2
38.5
–22.1
2.9
–3.4
604.4
52.0
–55.4
–0.6
255.6
1,816.8
121.7
133.9
14.1
340.9
1,097.9
94.4
246.4
31.0
1) Adjusted EBIT = EBIT plus earnings before taxes of the Group companies accounted for using the equity method.
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Group Management Report / Economic Report
95
In fiscal year 2017, the value added of the Fraport Group increased significantly by €60.8 million to €229.9 million (previous year:
€169.1 million). This increase is due to lower capital costs, which resulted from the reduction of the WACC from 8.6% to 6.7% as
well as the operational take-over of the Greek regional airports and the recovery of the Group company Antalya, which is ac-
counted for using the equity method. This was offset by the absence of one-off effects that boosted Group EBIT in the previous
year from the sale of shares in Thalita Trading Ltd. and the compensation payment from the Manila Project. The value added of
the Aviation segment improved significantly from –€141.5 million to –€48.0 million, though it still remained negative. As well as
from the effect from the cost of capital, this improvement resulted from the unscheduled full depreciation and amortization of
goodwill of the Group company FraSec in the previous year. In the Retail & Real Estate segment, the value added was also
significantly influenced by the changed cost of capital. In addition, the improved segment EBIT led to an increase in the value
added from €119.4 million to €166.1 million. The negative value added of the Ground Handling segment rose in part due to positive
traffic effects from –€55.4 million to –€22.1 million. The value added of the International Activities & Services segment decreased
from €246.4 million to €133.9 million. This was due to the absence of the aforementioned one-off effects in the previous year. The
take-over of operations of the Greek regional airports as well as the strong recovery of the Group company Antalya, which is
accounted for using the equity method, made a positive contribution.
The Fraport Group’s ROFRA decreased from 11.4% to 10.0% primarily due to the one-off effects in the previous year.
Comparison with the forecasted development
2017 Forecast 2016 [adjustment during the year]
Group value added
ROFRA (%)
Value added Aviation
Value added
Retail & Real Estate
Value added Ground Handling
Value added
International Activities &
Services
229.9 At the same level as the previous year or slightly higher
10.0 Slightly below the previous year´s level
–48.0
Improvement but still in negative territory
Improvement in the middle double-digit million € range
166.1
–22.1 Above the value for 2016, but still in negative territory
2016 Change from the
previous year
Change from the
previous year in %
169.1
11.4
–141.5
119.4
–55.4
+60.8
–1.4 PP
+93.5
+46.7
+33.3
+36.0
–
–
+39.1
–
133.9 Significant reduction, but still in positive territory
246.4
–112.5
–45.7
The Group value added developed significantly better than forecasted due to Group-wide good operating development. The value
added in the Aviation segment significantly increased compared to the forecast in 2016 additionally thanks to good development
of the passenger numbers in Frankfurt.
The value added in the Retail & Real Estate, Ground Handling, and International Activities & Services segments, as well as
ROFRA developed in line with the forecast in 2016.
Non-financial Performance Indicators
Customer satisfaction and product quality
Global satisfaction of passengers
The global satisfaction of passengers at the Frankfurt site was 85% in 2017, three percentage points above the level of the
previous year (previous year: 82%). This level of 85% was reached in all four quarters (previous year: Q1 81%, Q2 82%, Q3 83%,
and Q4 82%). Numerous service and infrastructure measures within the scope of the service program “Great to have you here!”
had a very positive impact on individual satisfaction criteria. The various ways to pass the time until departure were also rated
positively. In particular, the assessment of the terminals’ cleanliness improved significantly.
At the Antalya site, customer satisfaction was 5.4 percentage points higher than the previous year’s figure at 79.4% (previous
year: 74.0%). Continued strong passenger growth at Lima Airport resulted in the level of satisfied passengers declining to 82.0%
(previous survey: 96.0%). The high capacity utilization of terminals and infrastructure had a negative effect on passenger satis-
faction. At the airports in Varna and Burgas, the satisfaction level, in line with the previous year, was nearly 97%. At 64, the
number of complaints in Ljubljana declined slightly in 2017 with significant passenger growth (previous year: 72 complaints).
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Baggage connectivity
In the past fiscal year, baggage connectivity at the Frankfurt site amounted to 98.5% and was therefore 0.2 percentage points
below the previous year’s figure. In particular, delayed flights, poor weather conditions and an IT malfunction in December 2017
had a negative impact on the loading of baggage on time. In the first quarter of 2017, connectivity declined by 0.3 percentage
points (98.8% compared to 99.1% in the first quarter of 2016). The levels in the second and third quarter of 2017 remained virtually
unchanged at 98.6% and 98.4% (Q2 2016: 98.7% and Q3 2016: 98.5%). At 98.2%, the level in the fourth quarter was 0.4 per-
centage points below the same period of the previous year (98.6%).
Punctuality rate
The punctuality of aircraft movements at the Frankfurt Airport (74.1%) was below the level of the previous year (2016: 79.5%). In
addition to increased unfavorable weather-related delays throughout the year, the punctuality rate was negatively affected by late
arriving flights and other reasons attributable to the airlines, which were not included in the 2016 forecast. The first quarter of the
year had a relatively high punctuality rate of 80.5% (Q1 2016: 83.4%). In the second and third quarters, overall punctuality was
below the previous year’s rate (Q2: 75.3%, Q3: 68.5%, Q2 previous year: 77.8%, Q3 previous year: 78.1%). At 73.3%, the punc-
tuality rate in the last quarter was also down compared to the previous year (79.3%).
Equipment availability rate
In the full year 2017, the equipment availability rate at the terminal facilities in Frankfurt was 97.1% (previous year: 96.7%). With
an average availability of 92.6%, substantial closures due to construction activities had a negative effect on the availability of the
Skyline train in 2017. Without such construction sites, availability would have been 99.8%.
Attractive and responsible employer
Employee satisfaction
The average grade for satisfaction by the employees of the Fraport Group was in the past fiscal year at 2.87 and therefore slightly
better than the previous year’s figure of 2.91. Employee satisfaction improved at Fraport AG as well as the vast majority of Group
companies. The response rate was slightly above the level of the previous year at 52% (previous year: 49%).
Women in management positions
In the 2017 fiscal year, the proportion of women in management positions at the first and second level directly below Fraport’s
Executive Board was 28.0% in Germany (previous year: 30.5%). The decrease of the share was caused by organizational changes
as well as the vacancy of management positions as at December 31, 2017, that had been held by women before.
Occupational health and safety
Sickness rate
In the 2017 fiscal year, the sickness rate declined by 0.4 percentage points to 7.5% (previous year: 7.9%). The sickness rate
particularly improved at Fraport AG and the Group companies FraSec and FraGround, which both have a large number of em-
ployees. The sickness rate deteriorated slightly, however, at the Group companies Fraport Slovenija and FraCareServices.
Rate per 1,000 employees
While the total number of accidents declined significantly (–136 accidents), there were 554 reportable accidents at work in the
year under review, which translated to an increase of 34 reportable accidents at work (previous year: 520). In the Ground Handling
segment, in particular, more accidents occurred due to weather conditions at the beginning of the fiscal year 2017. As a result,
based on the total Group workforce, the rate per 1,000 employees was 25.5 (previous year: 24.3; as a result of late submissions,
there may be changes to the figures reported for the previous year).
Climate protection
CO2 emissions
In the past fiscal year, CO2 emissions amounted to approximately 209,668 metric tons of CO2, and were thus 8.2% lower than in
the previous year (previous year: 228,389 metric tons of CO2). The drop in emissions is due to energy savings from the ongoing
programs to improve energy efficiency as well as improvements in environmental quality of the types of energy used, also called
emission factors.
Fraport Annual Report 2017
Group Management Report / Economic Report
Comparison with the forecasted development
Indicators
2017 Forecast 2016 [adjustment during the year]
Global satisfaction (Frankfurt) in %
Baggage connectivity (Frankfurt) in %
Punctuality rate (Frankfurt) in %
Equipment availability rate (Frankfurt) in %
Employee satisfaction1)
Women in management positions (Germany) in %2)
Sickness rate in %2)
Rate per 1,000 employees3)
CO2-Emissions in m.t.2), 4)
85 At least 80 %
98.5 Better than 98.5 %
74.1 Approximately unchanged at a high level
97.1 Significantly above 90 %
2.87 Remain at the level of over 3.0
28.0 –
7.5 –
25.5 Confirmation of the low level of 2015
209,668 –
2016 Change from the
previous year
82
98.7
79.5
96.7
2.91
30.5
7.9
24.3
228,389
+3 PP
–0.2 PP
–5.4 PP
+0.4 PP
+0.04
–2.5 PP
–0.4 PP
+1.2
–8.2 %
1) This includes Fraport AG and 12 Group companies at the Frankfurt site as well as the Group companies Twin Star and Fraport Slovenija.
2) Establishment as non-financial key performance indicator for full year 2017, first-time forecast for 2018.
3) Figures as as at the reporting date December 31, 2017 and December 31, 2016, respectively. As a result of late submissions, there may be changes to the figures.
4) As a result of subsequent verifications, there may be changes to the figures.
Explanations for the changes in the values compared to the forecast in 2016 for baggage connectivity, punctuality rate, and rate
per 1,000 employees can be found in the preceding chapter titled “Non-financial performance indicators”. Further non-financial
performance indicators developed as forecasted.
Employees
Development of employees in the Group
Average number of employees
Fraport Group
thereof Fraport AG
thereof Group companies
thereof in Germany
thereof abroad
2017
20,673
10,204
10,470
18,120
2,553
2016
20,322
10,487
9,835
18,333
1,989
Change
Change in %
+351
–283
+635
–213
+564
+1.7
–2.7
+6.5
–1.2
+28.4
Compared with the same period of the previous year, the average number of employees in the Fraport Group (excluding appren-
tices and employees on leave) increased to 20,673 in fiscal year 2017 (previous year: 20,322). At Fraport AG, the headcount (–
283 employees) was lower, partly as a result of an increased fluctuation in connection with the staff restructuring program initiated
in fiscal year 2016. Increased passenger numbers in Frankfurt resulted in the need for more manpower at the Group companies
FraGround (+81 employees) and FraCareServices (+32 employees).
Outside of Germany, the headcount increased primarily due to the take-over of the operation of the Greek regional airports
(+486 employees) as well as due to the first-time recognition of the new Group companies Fortaleza and Porto Alegre (+25 and
+12 employees, respectively).
With regard to permanent employees, the staff turnover rate of 8.3% in the past year was below the rate of 9.4% in the previous
fiscal year. This decrease was caused by fewer employees leaving the Group coupled with an increase in the number of new
employees, especially due to Fraport Greece.
Development of employees in the segments
Average number of employees
Aviation
Retail & Real Estate
Ground Handling
International Activities & Services
2017
5,881
651
8,600
5,541
2016
6,048
645
8,649
4,980
Change
Change in %
–167
+6
–49
+561
–2.8
+0.9
–0.6
+11.3
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Fraport Annual Report 2017
While the Aviation segment in the past fiscal year had a lower number of employees, primarily due to a decline in the number of
persons employed at the Group company FraSec (–79 employees) and Fraport AG (–62 employees), the number of employees
in the Retail & Real Estate segment remained virtually unchanged (+6 employees). In the Ground Handling segment, the number
of employees declined in particular due to fewer workers in the strategic business unit of Ground Services at Fraport AG
(–175 employees), partly as a result of the staff restructuring program. In the International Activities & Services segment, the
number of employees increased in the reporting period in particular due to Fraport Greece (+486 employees) and the new Group
companies Fortaleza and Porto Alegre (+25 and +12 employees, respectively).
Development of total employees in the Group
Total employees as at the reporting date
December 31, 2017
December 31, 2016
Change
Change in %
Fraport Group
thereof Fraport AG
thereof Group companies
thereof in Germany
thereof abroad
24,598
10,747
13,851
21,732
2,866
22,650
11,164
11,486
20,555
2,095
+1,948
–417
+2,365
+1,177
+771
+8.6
–3.7
+20.6
+5.7
+36.8
Compared with the previous year’s balance sheet date, the total number of employees (employees including joint ventures, tem-
porary employees, apprentices, and employees on leave) of the Fraport Group as at December 31, 2017 increased from 22,650
to 24,598 (+1,948 employees). The increase is due in particular to the first-time inclusion of the joint venture Frankfurt Airport
Retail (+789 employees) as well as the Group companies FraGround (+306 employees) and FraSec (+159 employees). Outside
of Germany, the headcount increased, among other reasons, due to Fraport Greece (+405 employees) and the Group companies
Fortaleza and Porto Alegre (+159 and +91 employees, respectively).
Development in personnel structure
Fraport values the diversity of its employees. This diversity helps the Group to better understand the concerns of its customers,
develop innovative solutions, and remain competitive in a globalized economy. Diversity management is therefore a central com-
ponent of its human resources strategy. It is based on a Group agreement that includes the establishment of principles of anti-
discrimination, advancement of women into management positions, and diversity. These principles form part of recruitment deci-
sions and training measures.
The percentage of women increased slightly in fiscal year 2017 to 25.0% (previous year: 24.2%). The average age of the Group’s
workforce rose slightly from 43.5 years to 43.6 years. The percentage of employees with foreign citizenship (excluding German
citizens with an immigration background) was 24.6% (previous year: 20.5%). The percentage of persons with major disabilities
reached 7.9% on a Group-wide basis (previous year: 8.3%).
Research and Development
At Fraport, promoting innovation is an integral part of the Company's goals and its management principles. The aim is to introduce
new technologies and continuously optimize complex processes to meet a wide range of customer demands while staying true to
the economic and business requirements. As a service group, Fraport does not conduct research and development in the nar-
rowest sense. Nevertheless, a small amount of development costs are capitalized from internally generated intangible assets,
such as software. This mainly applies to software related to the operation of the baggage transfer system at Frankfurt Airport,
which is developed in the “Information and Telecommunication” service unit (see also Group note 4 and note 20).
In addition, Fraport has set up a two-tracked approach to use all of its potential: The idea management system brings together
employee creativity while innovation management enables the targeted development of projects with external partners (see also
the chapter titled “Risk and Opportunities Report” starting on page 105).
Fraport Annual Report 2017
Group Management Report / Economic Report
99
Once again in the past fiscal year, an “ideas day” was organized by the idea management team. Overall, 596 ideas were submitted
in the reporting year and 81 ideas implemented (previous year: 689 ideas, 45 implementations). Fraport has set the goal of
generating an economic benefit of at least €300,000 per year. In the 2017 fiscal year, the economic benefit was €557,133 (previous
year: €389,242).
In innovation management, Fraport specifically carries out networking with companies in its own value chain as well as “best
practice” companies in other sectors. The value added lies in the coordinated cooperation with other companies and scientific
institutions in the region. The objective is to support forward-looking logistics projects and technical developments, and further
increase the appeal of the Frankfurt site. In the autumn of 2017, the first four-week test drive of a self-driving shuttle for employee
transportation was successfully carried out. In addition, particularly in the area of passenger information, innovations in robotics
and artificial intelligence are being tested for further use (see also the chapter titled “Risk and Opportunities Report” starting on
page 105).
Environment
At its airport sites, Fraport serves the mobility requirements of the relevant regions and countries. At the same time, flight opera-
tions are invariably associated with direct and indirect burdens for local residents and the environment. In this area of conflict,
Fraport faces up to its corporate responsibility. To the extent that this is feasible, Fraport ensures that the burden on the environ-
ment from airport operations is reduced.
The measures that Fraport starts and implements are wide-ranging. In this respect, important topics are bundled and the measures
taken are monitored using targets and achievement levels. These issues include, among other things, climate, nature, and re-
source protection. The measures in the area of climate protection are measured in particular with reference to the CO2 emissions
of the Group (see also the chapter titled “Control” starting on page 58 and the chapter titled “Non-financial Performance Indicators”
starting on page 95). With regard to nature and resource protection, Fraport has set a goal, among other things, of providing all
environmentally relevant fully consolidated Group companies with a certified environmental management system.
Climate, nature, and resource protection
The management activities at Fraport AG mainly deal with the emissions the company is directly responsible for, but it also looks
at emissions that it is only indirectly connected to and which it can therefore only indirectly influence. Measures to reduce energy
consumption at Frankfurt Airport mainly concern improvements in the energy efficiency of buildings, equipment, and processes.
This includes optimizing the 80-km-long baggage transfer system. For the vehicle fleet and the aircraft handling equipment, the
specialist departments assess the opportunities to use alternative forms of propulsion, in particular electricity, as an alternative to
gasoline and diesel.
As transport hubs, airports make intensive use of resources. Environmental management systems enable the Group to run its
processes and activities in the most environmentally sound manner possible. At the end of the past fiscal year, 89.3% of the fully
consolidated environmentally relevant Group companies were equipped with such a system.
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Fraport Annual Report 2017
Society
Noise abatement
At the Frankfurt site, a distinction is made between active and passive noise abatement.
In active noise abatement, noise is reduced directly at the source or by implementing noise-reducing operating concepts and take-
off or landing procedures. An example of this is the “ground based augmentation system” (GBAS), which is a navigation system
that allows for more efficiency and more noise-reducing approach procedures. The aim is to further increase the rate of use of the
GBAS. The development of the noise-dependent charging system serves active noise abatement, as the use of low-noise aircraft
is rewarded by comparatively more favorable rates of charges. Since May 2016, the so-called noise absence model has been
applied at night for the operating direction west. This means that early in the morning (5-6 a.m.) and late in the evening
(10-11 p.m.), individual runways are alternately not used. The “DROps Early Morning” procedure (Dedicated Runway Operations)
is used in the operating direction east. The alternating use of runways in the comparatively off-peak hours is intended to extend
the nighttime quiet period by one hour.
An alliance for a noise emission ceiling was voted for in 2017 as an additional new voluntary measure. It should help to ensure
that the noise exposure at Frankfurt Airport during the day does not increase as much as would be permitted under the zoning
decision, despite growth in aircraft movements. If the limit is exceeded, Fraport AG and the airlines are obliged to review noise
reduction measures. If the limit is repeatedly exceeded, any of the parties involved can take action outside of the alliance.
Passive noise abatement measures are intended to reduce the noise level inside buildings by way of structural modifications.
Around Frankfurt Airport, Fraport AG has legal obligations to take measures in around 86,000 households. Damage repeatedly
occurred on roofs in the direct vicinity of Frankfurt Airport in the past and wake turbulences from landing aircraft could not be ruled
out as a cause. As a result, the Hessian Ministry of Economics, Energy, Transport and Regional Development issued supplemental
planning zoning decisions on May 10, 2013 and May 26, 2014. These regulate the requirements for protecting roof coverings on
buildings against wind gusts caused by wake turbulences and clarify the relevant prerequisites. The decisions defined an eligible
area with approximately 6,000 buildings.
Value creation statement
Airports are important business locations and contribute directly and indirectly to economic and social value creation. Frankfurt
Airport, for example, with almost 81,000 direct employees, is the largest local place of work in Germany. Additional employment
effects are also created in enterprises that are appointed by Fraport for the construction and modernization of airport infrastruc-
tures. With a catchment area of around 38 million people in a radius of approximately 200 kilometers and in its role as the largest
cargo airport in Europe, the Frankfurt site is one of the most important business locations of the country.
In this context, Fraport contributes comprehensively to social value creation. The company’s direct value creation includes ex-
penses for personnel, capital expenditure, taxes, interest, and dividends to its shareholders. Over the past fiscal year, corporate
performance (gross value added) amounted to approximately €3.1 billion. The net value added amounted to around €2.2 billion.
The Fraport Group’s indirect value creation includes consumption by airport employees and companies located at each airport,
which also have their own value chain and employment effects and thus directly and indirectly make a contribution to the positive
economic development of their respective regions.
More information on Fraport’s environmental and social commitment can be found in the chapter titled “Combined Separate Non-
Financial Report” starting on page 25 and on the company website at www.fraport.com/responsibility.
Fraport Annual Report 2017
Group Management Report / Economic Report
101
Share and Investor Relations
Development of the share 2017
The German equity markets showed a clearly positive development in 2017. At 12,918 points, Germany’s benchmark DAX closed
12.5% higher in the reporting period than the 2016 fiscal year’s closing price. The MDAX also posted a strong rise by 18.1% to
26,201 points. The positive development of both indices started at the beginning of the year. As early as the first quarter of 2017,
the DAX and MDAX gained 7.2% and 7.7%, respectively. The rally on the German stock exchange continued in the second quarter
of 2017. Above all, the positive economic conditions in Europe as well as the robust development of the German domestic and
export markets led to a further improvement in the general mood. The low interest rates in the Eurozone as well as the favorable
financing conditions continued to support this positive trend. The two indices also showed positive growth in the third quarter. The
DAX rose by 4.1% and the MDAX by 6.3% in this period. Their growth flattened slightly in the fourth quarter. The DAX finished
the year at 12,918 points, which was 12.5% higher than the previous year. The MDAX was up 18.1% and finished the year at
26,201 points.
Within this positive market environment, the Fraport share performed significantly better than the German benchmark indices with
a closing price of €91.86 (previous year: €56.17). After a price increase of 18.1% in the first quarter of the past fiscal year, the
share price once again jumped significantly by 16.5% to €77.30 in the second quarter and was at €80.34 (+3.9%) in the third
quarter. At the end of 2017, the share price reached a new all-time high of €91.86. Cumulatively, the increase in the share’s value
in fiscal year 2017 was €35.69 (+63.5%) or, taking into account the dividend payment of €1.50 per share, €37.19 (+66.2%). The
main drivers behind the good stock performance were, in particular, the increased passenger growth and expectations at the
Frankfurt site as well as the Group-wide traffic development. The growth of international business with the successful take-over
of the Greek regional airports, winning the concessions for the two Brazilian airports, and the significant recovery in the develop-
ment of Antalya were well received, leading ultimately to better estimates by analysts.
The Fraport share had a market capitalization of €8.5 billion at the year-end (previous year: €5.2 billion). The share was thus,
based on market capitalization, the 15th largest stock among the 50 MDAX shares (previous year: 23rd place). Measured by
traded stock market turnover (XETRA), the Fraport share was ranked 14th among the MDAX stocks (previous year: 30th place).
With an average of 173,015 shares traded daily, the share’s trading volume was virtually unchanged year-on-year (previous year:
173,666).
Fraport share
2017
2016
2015
2014
2013
2012
2011
2010
Opening price in €
Closing price in €
Change in €1)
Change in %2)
Highest price in € (daily closing price)
Lowest price in € (daily closing price)
Average price in € (daily closing prices)
Average trading volume per day (number)
Market capitalization in € million (quarterly closing price)
56.17
91.86
+35.70
+63.5
91.86
55.26
74.12
173,015
8,494
58.94
56.17
–2.80
–4.7
58.94
45.25
51.77
173,666
5,192
48.04
58.94
+10.90
+22.7
62.30
48.04
56.34
151,188
5,443
54.39
48.04
–6.40
–11.7
57.77
47.19
52.13
100,101
4,436
43.94
54.39
+10.50
+23.8
57.41
42.33
48.38
118,554
5,020
38.00
43.94
+5.90
+15.6
49.37
38.41
44.70
156,604
4,052
47.16
38.00
–9.16
–19.4
58.10
37.60
49.14
190,671
3,494
36.28
47.16
+10.88
+30.0
48.78
34.40
40.43
160,634
4,335
1) Change including dividends: 2017: €37.19€, 2016: –€1.42.
2) Change including dividends: 2017: 66.2%, 2016: –4.7 %.
The shares of other stock-exchange listed European airports performed as follows: Aéroports de Paris +56.4%, Vienna Airport
+40.2%, AENA +30.0%, and Zurich Airport +7.8%.
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2017 development of the Fraport share compared to the market and European competitors
in % (index base 100)
170
160
150
140
130
120
110
100
90
80
January 1, 2017
December 31, 2017
Faport AG
DAX
MDAX
Aéroports de Paris
Vienna Airport
Zurich Airport
AENA
Last 10 years development of the Fraport share compared to DAX and MDAX
in % (index base 100)
300
250
200
150
100
50
0
January 1, 2008
Faport AG
DAX
MDAX
December 31, 2017
Development in shareholder structure
Fraport was notified of the following changes in shareholder structure in the past fiscal year:
Notification of voting rights pursuant to Section 21 of the German Securities Trading Act (WpHG)
Holders of voting rights
Date of change
Type of change
New share of voting rights
BlackRock, Inc.1)
BlackRock, Inc.1)
December 20, 2017
December 21, 2017
Exceeded the 3 % threshold
Exceeded the 3 % threshold
3.03 %
3.12 %
1) All voting rights were allocated pursuant to Section 22 of the WpHG.
Fraport Annual Report 2017
Group Management Report / Economic Report
103
Shareholder structure as at December 31, 2017 1)
in %
32.05
Free Float
5.05
Lazard Asset Management
LLC
3.12
BlackRock Inc.
31.31
State of Hesse
20.03
Stadtwerke Frankfurt am Main
Holding GmbH
8.44
Deutsche Lufthansa AG
1)
The relative ownership interests were adjusted to the current total number of shares as at December 31, 2016 and therefore may differ from the figures given
at the time of reporting or from the respective shareholders’ own disclosure. Shares below 3 % are classified under “Free Float”.
The majority (51.34%) of the approximately 92.5 million shares are held by German institutions. The State of Hesse held 31.31%
and the City of Frankfurt am Main 20.03%, which holds these voting rights indirectly via the subsidiary Stadtwerke Frankfurt am
Main Holding GmbH. Deutsche Lufthansa AG as the main customer at Frankfurt Airport holds 8.44% or over 7.8 million no-par-
value shares, making it the third largest individual shareholder of Fraport AG. The asset manager Lazard Asset Management
LLC, whose shareholding is managed from Australia, has held more than 5% of the issued shares since December 15, 2016
(holding as at December 15, 2016: 5.05%). Most recently, BlackRock Inc., as the world’s largest institutional investor, exceeded
the 3% threshold and now holds 3.12% of the Fraport shares as of December 21, 2017.
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To the extent it was known, the proportion of Fraport shares in free float (40.25%) was split across the following countries:
Allocation of free float1)
in %
28.0
Smaller Countries & unknown
0.9
Japan
1.1
Switzerland
1.8
Benelux
1.9
Singapore
2.5
Nordics
20.7
Australia
19.5
USA
10.2
Germany
6.3
United Kingdom & Ireland
4.5
Canada
2.6
France
1) Free float = total number of shares as at December 31, 2017 excluding shares held by the State of Hesse, Stadtwerke Frankfurt am Main Holding GmbH,
Deutsche Lufthansa AG, and treasury shares. Shares held via several subsidiaries were not combined.
Source: IPREO.
Dividend for the 2017 fiscal year (recommendation for the appropriation of profit)
Fraport pursues a consistent dividend policy. The aim is that shareholders participate appropriately and with a long-term orienta-
tion in the business development. Correspondingly, the Executive Board aims to distribute approximately 40 to 60% of the profit
attributable to shareholders of Fraport AG, where the dividend per share should at least match the level of the previous year.
For the 2017 fiscal year, the Executive Board intends to propose to the AGM an unchanged dividend compared to the previous
year of €1.50 per share. Compared to the share closing price in 2017 of €91.86, this would correspond to a dividend yield of 1.6%
(previous year: 2.7%). The profit earmarked for distribution of €138.7 million (previous year: €138.7 million) would then equate to
a pay-out ratio of 42.0% based on the profit attributable to shareholders of Fraport AG in the Group result of €330.2 million
(previous year: 36.9%).
Investor Relations (IR)
Timely, consistent, and transparent communication with investors and analysts is of utmost importance for Fraport IR work. The
IR team maintains personal contact with existing and potential investors in the context of road shows, capital market conferences,
and meetings at the company’s headquarters at Frankfurt Airport. Over the past fiscal year there were also targeted individual
and Group meetings as well as presentations with the company’s chief executive officer and chief financial officer. The key topic
in the talks in 2017 was the current and future traffic development at the Frankfurt site with the development of the main customer
as well as the low-cost airlines. The integration of the 14 Greek regional airports, the strong traffic recovery at Antalya Airport and
being awarded the concessions for the two airports in Brazil were also a focus. In addition, in particular, at the Frankfurt site, the
retail business, the development of airport charges, and the necessary expansion of capacity through Terminal 3 and Pier G were
discussed.
Fraport Annual Report 2017
Group Management Report / Economic Report
105
Throughout the year, the IR team was available by phone on +49 (0)69 690-74842 or by e-mail at investor.relations@fraport.de
for direct dialog. The telephone conferences for analysts on the financial publications, the AGM in May 2017, and the provision of
up-to-date information on the IR website at www.meet-ir.com rounded off the range of IR services in the past fiscal year.
Annual General Meeting (AGM)
At the last AGM on May 23, 2017, Fraport received a clear majority for all agenda items from its shareholders. Of the capital
entitled to vote, 80,601,425 ordinary shares and the same number of voting rights (87.20% of capital) were represented. The
detailed voting results as well as further information about the AGM are published on the company website at www.fraport.com/in-
vestors. The AGM for the 2017 fiscal year will be held on May 29, 2018 at the Jahrhunderthalle in Frankfurt.
Data relevant to the capital market
Share capital Fraport AG1)
Total number of shares as at December 31
Number of floating shares as at December 312)
Number of floating shares (weighted average of reporting period)
Absolute share of capital stock
Annual performance (including dividend)
Beta relative to the MDAX
Earnings per share (basic)
Earnings per share (diluted)
Price-earnings ratio
Dividend per share3)
Profit earmarked for distribution
Dividend yield as at December 313)
ISIN
Security identification number (WKN)
Reuters ticker code
Bloomberg ticker code
Selected indexes
€ million
Number
Number
Number
per share, in €
in %
in €
in €
in €
€ million
in %
2017
2016
924.7
92,468,704
92,391,339
92,377,435
10.00
+66.2
0.55
3.57
3.56
25.7
1.50
138.7
1.6
924.3
92,434,419
92,357,054
92,337,317
10.00
–2.6
0.75
4.07
4.06
13.8
1.50
138.7
2.7
DE 000 577 330 3
577 330
FRAG.DE
FRA GR
MDAX, FTSE4Good Index,
Euronext Vigeo (Eurozone 120),
Deutschland Ethik 30 Aktienindex,
Ethibel Sustainability Index (ESI) Excellence Europe
1) Including treasury shares.
2) Total number of shares as at the balance sheet date, less treasury shares.
3) Proposed dividend (2017).
Events after the Balance Sheet Date
There were no significant events after the balance sheet date for the Fraport Group.
Risk and Opportunities Report
The Fraport Group has a comprehensive, Group-wide risk and opportunity management system, which makes it possible for
Fraport to identify and analyze risks at an early stage, and to control and limit those risks using appropriate measures, as well as
to take advantage of opportunities. This results in the early identification of potential risks that could jeopardize the Fraport Group.
Fraport regards risks as future developments or events that can have a negative impact on the achievement of operational plan-
ning and strategic targets. Opportunities are regarded as future developments or events that can lead to a positive planning
deviation or strategic target deviation.
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Risk strategy and objectives
At Fraport it is always ensured, within the context of the integrated strategy and planning process, that the risks associated with
the opportunities are in an appropriate relationship to each other. This is ensured through a comprehensive risk and opportunity
management, which guarantees that risks and opportunities are identified at an early stage, are evaluated, controlled, and moni-
tored in a standardized manner and are transparently communicated using a systematic reporting.
The following principles are derived from this objective:
3. Already as part of the strategic planning processes and when preparing the long-term business plan, a comparison is made
with the opportunities and risk strategy, which results from the anticipated business development. This way, Fraport avoids
risks that are not directly related to the original business purpose.
4. The centralized Risk Management unit is responsible for the implementation and further development of the risk manage-
ment system and links this with the opportunity management process.
5. Risk and opportunity management is a key function of the respective business, service, and central units that are responsible
for their business processes; this involves material risks being managed using appropriate measures and being reduced to
an acceptable level, as well as actively utilizing opportunities.
6. Through standardized and comprehensive processes, early identification, standardized analysis, centralized control and
monitoring, as well as systematic and transparent reporting take place regarding all material risks and opportunities.
7. All employees are encouraged to actively become involved in risk and opportunities management in their area of activity.
The risk management system
Fraport Annual Report 2017
Group Management Report / Risk and Opportunities Report
107
The Fraport Executive Board bears the overall responsibility for an effective risk management system, through which comprehen-
sive and standardized management of all material risks is ensured. In this context, by preparing the development plan, it has also
approved the risk strategy and risk objectives for the Group. The Executive Board appoints the Chief Risk Officer and the members
of the Risk Management Committee (RMC), approves the rules of procedure for the RMC, and is the addressee for the quarterly
reporting of relevance to the Group and ad hoc reports in the risk management system.
The RMC is the highest executive body in the risk management system below the Executive Board and is made up of senior
managers from the company’s operating and supporting units. The management of the RMC is performed by the Risk Manage-
ment and Internal Control System department. The management of the RMC is responsible for the organization, maintenance,
and further development of the Group-wide risk management and internal control system (ICS), as well as the regular updating
and implementation of the risk management and ICS guideline in the Fraport Group. The RMC reports to the Executive Board on
a quarterly basis immediately after its meetings.
The risk management system is documented in writing in a policy for Fraport AG and one for the Group companies to be included,
and is closely linked to the central ICS and the compliance management system, and is interlinked with them in an integrated
system. It follows the “COSO II” (Committee of the Sponsoring Organizations of the Treadway Commission) framework and covers
risks in the areas of strategy, operational business, financial reporting, and compliance.
Using a risk-oriented scope procedure, which is to be performed annually, the Risk Management and Internal Control System
department determines which Group companies should be included in the standardized ICS procedure. Based on an annually
updated analysis, this process records internal risks along the significant business processes, mitigates them through suitable
control activities and/or reduces them to an appropriate level. Based on an annual self-assessment by the responsible depart-
ments and Group companies (so-called control self-assessment), the effectiveness of the key process controls is assessed, and
the results of this effectiveness assessment are then reported to the Executive Board and the Supervisory Board. Linking the risk
management system to the ICS creates a more comprehensive transparency regarding the material risks existing in the Group
and a closed “risk workflow” is established.
Process-integrated and process-independent monitoring measures form the elements of the internal monitoring systems. The
central Group Internal Audit unit is integrated into the internal monitoring system of the Fraport Group with process-independent
audit activities.
PricewaterhouseCoopers GmbH (PwC) has examined the risk early-warning system of Fraport AG within the context of the annual
financial statement audit with regard to stock corporation law requirements. It fulfills all of the legal requirements that apply to such
a system.
The Supervisory Board of Fraport AG has the function of supervising the effectiveness of the internal control and risk management
system in accordance with Section 107 (3) of the AktG. This responsibility is executed by the finance and audit committee of the
Supervisory Board.
Risk transfer through the purchase of insurance policies is controlled by the Group company Airport Assekuranz Vermittlungs-
GmbH.
The Fraport risk management system only covers risks. An opportunities consultation takes place quarterly within the context of
the RMC meeting.
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Risk management process
The risk management process comprises the following steps. In order to support the entire process, Fraport uses an integrated
risk management software solution.
1) Identification and reporting of risks
Risks are identified using various instruments primarily by the operational business, service, and central units of Fraport AG, as
well as the Group companies. The risk identification methods used range from market and competition analysis, to the evaluation
of customer surveys, information about suppliers and institutions, right through to monitoring risk indicators from the regulatory,
economic, and political environment. Division Managers are responsible for the accuracy of the information received from their
units that is processed in the risk management system. They are obligated to constantly monitor and manage risk areas, and
report on all risks in their divisions and their integrated investments to the Risk Management and Internal Control System depart-
ment on a quarterly basis. Outside of regular quarterly reporting, newly identified substantial risks must be immediately reported
on an ad hoc basis.
2) Evaluation of risks
The systematic evaluation of risks determines the impact and probability of occurrence of the identified risks, and makes it possible
to estimate the extent to which the individual risks can jeopardize the objectives and strategy of the Fraport Group, or which risks
will very likely, due to their nature, jeopardize the company as a going concern. For this purpose, the financial impact (quantitative
assessment or – if this is not possible – grouping into the relevant impact levels) and its probability of occurrence is ascertained
by the responsible business, service, and central units (= risk owners). The reference basis is always the rolling 24-month period.
However, this does not mean that risk owners only analyze and evaluate the risks from a short-term perspective; possible infra-
structural risks are in particular monitored in accordance with their long-term impact. During the evaluation process, the potential
impact (= impact level) is divided into four categories: “low”, “medium”, “high” and “very high”. The impact level is evaluated
according to how the risks impact the relevant detection variable (EBIT, financial result, or liquidity). Furthermore, qualitative
factors (media reporting/attention, effect on stakeholders), which could be important for Fraport’s reputation and which also de-
termine the risks, are also included in the analysis. The probability of occurrence for individual risks is also divided into four
categories: “unlikely”, “possible”, “likely” and “very likely”. The risk level (“low”, “moderate”, “considerable” and “substantial”) arises
from the combination of impact level and probability of occurrence.
The risk evaluation is conservative, i.e., the greatest possible impact for Fraport is assessed. A distinction is made between a
gross evaluation and a net evaluation. The gross risk is the greatest possible negative (financial) impact prior to risk-minimizing
measures. The net risk represents the expected residual (financial) impact after initiation or implementation of countermeasures.
The risk assessment in this report only reflects the net risk.
3) Risk control
Risk owners are tasked with developing and implementing suitable measures to minimize and control risk. In addition, general
strategies must be developed to deal with the identified risks. These strategies include risk avoidance, risk reduction with a view
to minimizing the (financial) impact or the probability of occurrence, transfer of risk to a third party (for example, through the
purchase of insurance policies), or risk acceptance. The decision regarding the implementation of the relevant strategy and/or
measures also considers the costs in relation to the effectiveness of potential countermeasures. Here, the Risk Management and
Internal Control System department works closely with the risk owners in order to monitor the progress of countermeasures and
to evaluate their effectiveness from a Group perspective.
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109
4) Risk aggregation and reporting
Integrated risk management aims to ensure a transparent presentation of the Fraport Group’s risk situation. For this, the Risk
Management and Internal Control System department consolidates and aggregates the quarterly risk reports from the divisions
and Group companies as required and provides these to the RMC for assessing the risk situation using a “risk map”. Risks are
reported to the Executive Board when they are classified as “considerable” or “substantial” on the basis of their net risk according
to systematic evaluation standards used Group-wide.
In the event of very significant changes to previously reported risks or newly identified “substantial” risks, reporting also takes
place outside of the regular quarterly reporting as ad hoc reporting.
Twice a year, the Executive Board reports the “considerable" (“amber”) and “substantial” (“red”) risks, including their changes, to
the Supervisory Board with a focus on the finance and audit committee of the Supervisory Board. The following graphic shows
the addressees of the risk reporting, depending on the net evaluation of the risks:
Reporting matrix
very l i kel y
> 80 %
l i kel y
> 50 % ̶ 80 %
pos s i bl e
> 20 % ̶ 50 %
unl i kel y
≤ 20 %
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t
i
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i
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P
Stra tegi c bus i nes s uni ts ,
s ervi ce a nd centra l uni ts /
Group compa ni es
Fi na nce a nd a udi t
commi ttee/Executi ve
Boa rd, RMC
Ma na gement report,
fi na nce a nd a udi t
commi tte / Executi ve
Boa rd, RMC
Ma na gement report,
fi na nce a nd a udi t
commi tte / Executi ve Boa rd,
RMC
Stra tegi c bus i nes s uni ts ,
s ervi ce a nd centra l uni ts /
Group compa ni es
RMC
Stra tegi c bus i nes s uni ts ,
s ervi ce a nd centra l uni ts /
Group compa ni es
RMC
Ma na gement report,
fi na nce a nd a udi t
commi tte / Executi ve
Boa rd, RMC
Ma na gement report,
fi na nce a nd a udi t
commi tte / Executi ve Boa rd,
RMC
Fi na nce a nd a udi t
commi ttee / Executi ve
Boa rd, RMC
Ma na gement report,
fi na nce a nd a udi t
commi tte / Executi ve Boa rd,
RMC
Stra tegi c bus i nes s uni ts ,
s ervi ce a nd centra l uni ts /
Group compa ni es
Stra tegi c bus i nes s uni ts ,
s ervi ce a nd centra l uni ts /
Group compa ni es
RMC
Fi na nce a nd a udi t
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Boa rd, RMC
l ow
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> €3 ̶ 10 mi l l i on
> €10 ̶ 20 mi l l i on
> €20 mi l l i on
Level of fi na nci a l i mpa ct
This process ensures the early detection of risks that could jeopardize the Fraport Group as a going concern.
An integral component of Fraport’s risk management system is also monitoring financial risks, whereby the presentation of finan-
cial instruments overall and, in particular, hedging transactions in accounting is monitored and controlled. This process is de-
scribed in the financial risks section (“Risk report”). At Fraport, this process represents a subsection of the accounting-related
internal control system.
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Further development of the risk management system in 2017
A workflow-supported system for entering new risks and updating risks was introduced to increase the user friendliness of the risk
management software as well as to optimize the overall system. In addition, the internal risk reports have been simplified by,
among other things, introducing a new field entitled “Trend” that allows users to recognize at a glance how the risk has changed
compared to the last query.
Accounting-related internal control system in accordance with Section 315 (4) of the HGB
In terms of the Group accounting process, Fraport regards the internal control and risk management system as a process that is
embedded in the Group-wide internal control and risk management system. Fraport’s Group accounting system covers the pro-
cessing of business transactions; records for the documentation of assets and liabilities; and processes for the consolidation of
the separate financial statements of parent/subsidiary companies, for the inclusion of joint ventures, and associated companies,
and for recording the required information for the disclosures in the Group notes and Group management report. The company
applies principles, processes, and measures aimed at safeguarding the effectiveness and compliance of the Group’s accounting
system, which Fraport designed to conform to “COSO” standards, in an effort to ensure that the recognition, measurement, and
presentation of assets and liabilities is in line with the legal guidelines and the principles of proper accounting.
Group accounting at Fraport is generally organized on a local basis. The reconciliation of the local separate financial statements
of the parent company and subsidiaries, joint ventures and associated companies (commercial balance sheet I) to the separate
financial statements prepared in accordance with Group-wide accounting and valuation methods (commercial balance sheet II) is
decentralized at the respective companies. In individual cases, the bookkeeping and preparation of financial statements for Group
companies at the Frankfurt site is carried out by the accountants of the Group parent company Fraport AG within the framework
of service agreements. In so doing, separation on an organizational and system level of the accounting of the Group parent
company Fraport AG is ensured. To ensure consistent Group-wide accounting and evaluation, Fraport has developed a policy on
IFRS Group accounting principles, on the basis of which the companies included in the consolidated financial statements perform
the reconciliation of Commercial balance sheet I to Commercial balance sheet II. The effectiveness of the Group accounting
process and its compliance with the relevant policies are confirmed by the companies included in the consolidated financial state-
ments within the framework of an internal statement of completeness.
The SAP BPC system is primarily used for the accounting-related Group reporting process between the companies included in
the consolidated financial statements and the Group parent company, Fraport AG. The financial statements to be consolidated
are recognized in this system, as is required information for tax accruals and for the Group notes. Access authorization on the
level of the consolidated companies is awarded and administered by Fraport on the basis of a user authorization concept. Group
reporting in SAP BPC is adapted by Group Accounting on a regular basis to the changes in accounting-relevant legal regulations.
A Group chart of accounts in the SAP BPC system is set up and administered by Group Accounting.
Accounting-related internal controls are, as far as possible, carried out within the SAP BPC system. Manual application and
monitoring controls, especially regarding completeness and quality of the reported data, are carried out in the context of the
operating accounting processes in Group Accounting.
Quality assurance is carried out by Group Accounting of Fraport AG for complex accounting issues or fundamental questions, as
well as at local companies included in the consolidated financial statements.
The consolidated financial statements are prepared by Fraport AG Group Accounting. The reporting process for the consolidated
financial statements is laid down in a schedule detailing each individual step, including deadlines and responsibilities. Group
Accounting monitors progress, reporting deadlines, and the completeness of the Group reporting process.
In the run-up to the preparation of the consolidated financial statements, a Group questionnaire is sent to all companies included
in the consolidated financial statements in order to identify any issues relevant to the accounting process in good time. The
consolidated companies are also questioned about any events after the balance sheet date so that these can be completely
recorded.
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111
Capital, liabilities, expenses, and income are consolidated and information relevant to segment reporting is processed in the SAP
BPC system. Prior to consolidating liabilities, internal balances are reconciled. Capital consolidation, including the updating of the
valuation of investments in companies accounted for using the equity method, the elimination of intercompany profits and losses,
and the preparation of the statement of cash flows, and of the statement of changes in equity are mainly carried out manually with
the help of the system. Deferred and accrued taxes are calculated and recognized by Group Accounting in coordination with the
Group Tax department.
Group policies, which are available to all consolidated companies, ensure that consolidation processes and the reconciliation of
internal balances are carried out properly.
Valuations in connection with assets and liabilities from the acquisition or sale of shares in companies are generally measured on
the basis of an external value analysis prepared by experts (e.g., calculation of acquisition costs or purchase price allocation).
The Group notes are prepared by Group Accounting as part of the consolidated financial statement process. Once the Group
notes have been drawn up, the information given in them is verified by central or local departments, where required.
The central unit Finance and Investor Relations is generally responsible for preparing the Group management report. It consoli-
dates the information provided by the relevant departments. Consolidated information is then verified by the relevant departments
in turn.
The Group parent company Fraport AG prepares its own separate financial statements in accordance with German commercial
and stock market regulations. Fraport AG has developed an HGB accounting policy to ensure that its accounts are prepared
consistently and in accordance with the principles of proper accounting.
Accounting at the Group parent company Fraport AG is, as far as possible, kept local through sub-ledgers (for creditors, debtors,
asset accounting, treasury, accounting of local departments). During the preparation of financial statements, the general ledger/ac-
counting creates any closing entries in the general ledger, which cannot be entered by local departments. The general ledger also
performs internal controls in the framework of preparation of financial statements for important local accounting processes.
In order to ensure standardized procedures, important operational processes of the sub-ledgers and general ledger have been
documented (including policies, process descriptions, manuals, and guidelines). The effectiveness and compliance of the sub-
ledger processes with the relevant policies are verified by the responsible departments, which issue an internal declaration of
completeness.
The Group parent company Fraport AG uses the SAP R3 system for its accounting. Accounting-related internal controls are
carried out, where possible, in the SAP R3 system. Manual application and monitoring controls are carried out during the opera-
tional accounting processes in the sub-ledgers and also during the preparation of the financial statements by the general ledger.
Functions in the departments involved in the accounting process are separated on a system, personnel, and organizational level.
A SAP authorization concept is used for issuing and administering access authorization for accounting-related systems.
The aim of the controls carried out within the framework of accounting is to ensure completeness, correctness, existence, owner-
ship, and presentation of the assets and liabilities, and items in the income statement recorded in the accounting process.
During the preparation of the financial statements by the general ledger, subsequent, and mainly manual monitoring controls are
carried out for the purpose of ensuring the completeness and correctness of items recognized in the sub-ledgers. Preventative,
system-aided controls and a four-eyes principle are implemented as subsequent controls of closing entries in order to achieve the
purposes of the monitoring mentioned.
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In order to ensure that all financial statements are complete, the Group parent company Fraport AG has implemented a contract
management process that evaluates contracts recognized in the financial statements to obtain a complete and correct view of all
facts relevant to the accounting process. In addition, the head of Group Accounting is a member of the RMC. As a result, it is
generally ensured that issues identified during the risk management process are assessed for their effect on the financial state-
ments and reported in accounting, if applicable. The contract management and risk management processes are both regulated
in a separate policy.
A special implemented process monitors risks associated with the recognition of financial instruments in the accounting system,
particularly hedging transactions.
The process of preparing the financial statements of the Group parent Fraport AG is laid down in a schedule detailing each
individual step, including deadlines and responsibilities. Group Accounting monitors the progress and schedule system-assisted.
The major steps in the financial statement process are the closing of the sub-ledgers, which in the case of the accounts receivable
accounting process includes the valuation of receivables, i.e., the creation of allowances. In asset accounting, the closed sub-
ledger reflects scheduled depreciation and amortization and impairment losses on property, plant, and equipment. The Treasury
department is responsible for the operational processes of its own sub-ledger (including cash pooling) and for providing the infor-
mation required for recognizing financial instruments in the general ledger.
After the closing of the sub-ledgers, the general ledger/accounting of Fraport AG carries out the necessary closing entries, which
also includes carrying out subsequent manual monitoring controls. This mainly relates to the items of other provisions and per-
sonnel provisions, financial assets and instruments, shareholders’ equity, and expense and income accruals. The tax department
calculates and posts taxes on income, and performs manual application and monitoring controls.
Fraport regularly uses external service providers within the framework of the preparation of the annual financial statements for
evaluating provisions, mainly personnel provisions, as well as financial instruments and assets.
The Internal Auditing department regularly assesses major sub-processes of the accounting process, including accounting-related
internal controls.
Business risks
The risks that could have a substantial effect on the business activities or on the asset, financial, and earnings position and/or
reputation of Fraport are explained in the following description. In this description, they are aggregated more intensively than when
used for internal control in some cases; however, the risks are classified according to the same risk categories (strategic risks,
operating risks, financial risks and compliance risks) that are used in the internal risk management reporting system. Unless
specified otherwise, the risks described relate to all segments to varying extents (Aviation, Retail & Real Estate, Ground Handling,
and International Activities & Services). Selected, non-substantial risks are indicated on a voluntary basis in order to provide a
comprehensive view of the risk situation.
Fraport AG is the parent company of the Fraport Group and comprises all of the described segments. Therefore, it is also – directly
or indirectly – subject to the risks described.
The following overview table briefly illustrates the changes in risk compared to the previous year. This is followed by a compre-
hensive description of the risks:
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113
Risk overview
Risk
Strategic risks
Macroeconomic risks
Market, competitive and regulatory risks
Drainage for the parallel runway system
Risks in connection with the airport expansion
Financial risks
Interest rate risks (cumulative)
Foreign Currency risks
Credit risks
Other price risks
Legal and compliance risks
Compliance breaches
Operating risks
Risks from capital expenditure projects
Risks from investments and projects
Lima expansion
Political development in Russia
Personnel risks
Additional provision ZVK
Profit sharing 2016
Risks of exeptional incidents
IT risks
Probability of occurrence
Level of financial impact
Risk level
Page
possible
possible
possible
unlikely
unlikely
possible
unlikely
unlikely
unlikely
possible
possible
unlikely
possible
1)
unlikely
unlikely
â very high
â very high
â very high
â very high
â high
â very high
â low
â medium
â substantial
â substantial
â substantial
â considerable
â moderate
ã substantial
â low
ã low
â 113
â 114
â 115
â 115
â 116
ã 116
â 117
â 117
â high
â moderate
â 117
â very high
â substantial
â 118
â very high
â very high
â very high
very high
â very high
â high
â substantial
â considerable
â substantial
2)
substantial
â considerable
â moderate
â 119
â 119
â 120
2)
120
â 120
â 121
1) No indication of the probability of occurrence is given in order not to influence the result of the ongoing procedure.
2) New Risk
ã higher than previous year â unchanged from previous year ä lower than previous year
Strategic Risk
Macroeconomic risks
Further expansion of the global economy is expected for 2018 (see also the “Business Outlook” chapter beginning on page 126).
Nevertheless, the risks that could arise from the economic and financial policy conditions remain unchanged. The cyclical upwards
trend in Europe could be slowed or even stopped by a renewed flare-up in the European debt crisis, weakening in the EU and the
Eurozone as a result of diverging interests of the member states, or also as a result of new government constellations. The
economic effects of the intended withdrawal of Great Britain (Brexit) also remain to be seen. Global economic development could
be negatively affected by the aforementioned factors, while protectionist tendencies between major economic areas and economic
or geopolitical crises could also have negative consequences for growth. Such developments can have a significant impact on
global and regional air traffic development and thus also have an adverse effect on Fraport.
The risks currently existing in China (structural change), the Middle East (geopolitical tensions), and Russia (continuing sanctions)
as well as in various emerging countries could have a dampening effect on the global economy and, as a result, on Germany’s
export-based economy, which would also affect Fraport’s airport business. At the same time, crude oil price shocks due to an
increasingly unstable geopolitical situation in the Middle East would also have a dampening effect on economic development.
Resulting jet fuel price rises would additionally have a negative impact on demand and thus ultimately the development of supply.
A further deterioration of the crises in Syria and the Ukraine could rekindle the old East-West conflict. The consequences would
include global uncertainty as well as tangible trade barriers that would hamper growth. The number of global trade barriers has
grown continuously since 2008, despite statements to the contrary given at G20 summits. Election results show that the “my
nation first” policies are not only gaining importance in the United States. Accordingly, a trend reversal towards fewer trade barriers
could be a long time coming, which could dampen global trade.
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If the aforementioned reasons impaired the development of air traffic, this could result in negative consequences for Fraport's
asset, financial, and earnings position. For this reason, Fraport closely monitors the development of supply and demand in air
traffic so that reasonable countermeasures can be introduced if required. In the personnel area, Fraport has agreements with the
employee representative body (such as an order to eliminate time sheets) in order to be able to intervene with countermeasures
to a certain extent if traffic volumes drop.
Furthermore, structural changes in business travel (e.g. further reduction in the number of business trips) could have a direct or
indirect impact on Fraport’s business. Currency rate fluctuations, unemployment, and changes in consumer behavior insofar as
they influence passengers’ shopping habits can also significantly impact the earnings of the Fraport Group in the retail business.
The buildings and areas that Fraport currently lets are mainly used by airlines or companies whose business largely depends on
the development of air traffic at Frankfurt Airport. This sector of the real estate business is therefore not directly tied to general
real estate market development.
Given the situation described, Fraport estimates the potential impact level of the macroeconomic factors as “very high” overall.
The probability that negative macroeconomic developments could have this kind of an impact on Fraport’s asset, financial, and
earnings position is assessed as being “possible”.
Market, competitive and regulatory risks
In addition to an appealing infrastructure, the success of an international airport is dependent on its airline customer structure and
the associated global and dense route network, the fleet structure and the fares offered by the airlines.
Subdued global economic development and increasing competitive pressure in all transport sectors have led to consolidations
and also some insolvencies of airlines in the past, and this also cannot be ruled out in future. Changes to the alliance systems
and the continuous expansion of low-cost traffic modify the customer and supply structure, also associated with the reorientation
of the offer to other airport sites. In the course of these market changes, the affected employees may go on strike, which may
damage Frankfurt Airport through flight cancellations or cancellations of feeder traffic. Moreover, the establishment or the devel-
opment of existing hub systems in the Middle East may lead to a shift in the global flow of transfer passengers as a result of huge
increases in offerings, to the disadvantage of the Frankfurt site (and therefore for Fraport). In Europe, there may also be decreases
in transfer traffic as a result of competitor hubs expanding or if airlines change their business priorities. New aircraft types such
as the B737 MAX or A321neo LR, with ranges up to 7,000 km, allow for direct flights to/from smaller airports, including intercon-
tinental routes. This could reduce transfer traffic via traditional hubs like Frankfurt.
Furthermore, due to the increasing market and competitive pressure, the potential risk also exists that future capital costs from
planned capital expenditure may only be capable of being priced into the achievable charges to a limited extent.
Political and regulatory decisions on regional, national, and European level have a partial impact on the market, and therefore
competition through taxes, fees, and regulations, such as the aviation tax, the EU emissions trading, the CO2 regulations, noise
protection requirements, and bans on nighttime flights. There is therefore the risk of airlines using alternative sites and routes
outside Frankfurt in the medium term if restrictions are tightened. More medium- to long-term risks in the form of a weaker com-
petitive advantage among European airlines and consequently among European airports cannot be ruled out.
As recent years have shown, terrorist attacks and the development of trouble spots, such as in Ukraine, Syria or Turkey, can also
be extremely damaging for passenger flows to the affected destinations. In the past, this resulted in a reluctance to travel in
outgoing as well as incoming tourism in Germany, which in particular temporarily affected Frankfurt as a hub. The same applies
to the regions in which the Fraport Group airports are located or have their main target areas. Further attacks appear likely and
could once again spark a reluctance to travel. In addition, restricted opportunities to fly over trouble spots or flight bans between
states may lead to further limitations on services supplied.
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Fraport counters these risks through continuous market monitoring for prompt identification of potential changes with negative
consequences for the business, but also through balanced, needs-based expansion planning. In view of the dynamic market
environment, Fraport assesses the potential impact (impact level) of these risks as “very high” and the probability of occurrence
as “possible”. For 2018, the Executive Board expects passenger numbers to be in a range of approximately 67 to approximately
68.5 million.
Capital expenditure of up to €300 million for a state-of-the-art drainage system for the parallel runway system could be necessary
in connection with the operation of Runway West and the existing parallel takeoff and landing runway system depending on the
results of investigations due to the expected official order. On August 18, 2014, a water order was imposed for the Runway West
area. A state-of-the-art drainage system must be implemented for the part of Runway West south of the tunnel. For the northern
section, due to the deicing fluids and their degradation products measured in the winter of 2015/2016 and the pending hearing for
a water order, it is likely that state-of-the-art drainage will become necessary.
The existing orders do not contain any conditions for the realization of a state-of-the-art drainage for the parallel runway system.
However, there is fundamentally a risk that, if deicing fluids are detected in the groundwater also in connection with the parallel
runway system, the higher water authorities will call for a state-of-the-art drainage system and impose a corresponding water
order. The impact level is assessed as “very high”, the risk level as “substantial” and the probability of occurrence of the risk as
“possible”.
Risks in connection with the airport expansion
With its appellate decision, issued on April 4, 2012, the German Federal Administrative High Court essentially confirmed that the
zoning decision and thus the airport expansion complied with legal requirements in several test cases. Insofar as it objected to
the night flight policy, the Hessian Ministry of Economics, Energy, Transport and Regional Development (HMWEVL), as the re-
sponsible zoning authority, adapted the zoning decision on May 29, 2012, imposing a complete ban on all scheduled flights
between 11 p.m. and 5 a.m., and for the hours immediately before and after the night flight ban, from 10 p.m. to 11 p.m. and from
5 a.m. to 6 a.m. the number of aircraft movements was limited to an annual average of 133 takeoffs and landings.
There is a risk that the existing night flight ban will have a long-term negative impact on the conditions for the development of the
Frankfurt site.
If additional restrictions of airport operation, demanded in some cases in the political discussion, were implemented into law, this
could result in a further weakening of the competitive position of Frankfurt Airport, which – depending on the configuration – would
have a considerable impact on traffic volume, as well as traffic structure, at the Frankfurt site. However, it must be considered that
these restrictions (for example, extended night flight ban, maximum noise limits) would have to overcome high legal hurdles. The
risk of an institutionally imposed, legally binding noise limit was minimized significantly for the foreseeable future by the voluntary
Alliance for a Noise Limit announced on November 7, 2017. The zoning decision and airport approval remain unaffected by this
alliance. The alliance includes the State of Hesse (HMWEVL), airlines, the Aircraft Noise Commission, the forum on the airport
and region, and Fraport. Only when the noise limits are significantly exceeded twice in consecutive years – this is not expected
for the foreseeable future – does the HMWEVL reserve the right to take measures for, for example, noise abatement, outside of
the alliance. Depending on the design and implementation of any such measures, Fraport could appeal the decision. Any potential
subsequent introduction of a government imposed noise limit is expected to be legally supported by the proposed amendment of
the federal state development plan (LEP). The HMWEVL has, however, pledged to only make use of the corresponding federal
state planning principle if the objectives of the voluntary Alliance for a Noise Limit are not met.
The draft of a revised LEP also envisages tightening requirements for nighttime quiet periods. It remains to be seen, however,
whether the criticism from the aviation industry will be taken into consideration in the context of the public participation. In addition,
the HMWEVL stated in its explanation of the LEP draft that the current restrictions on night flights already addresses the ideas
behind observing the nighttime quiet period, meaning that there are currently likely to be no imminent additional restrictions on
night flights pending.
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The aforementioned rulings by the German Federal Administrative High Court mean that legal recourse in the test cases is now
concluded. However, it is impossible to completely exclude the possibility of residual legal risks to the airport expansion in light
of, inter alia, possible appeals to the European Court of Justice and/or European Court of Human Rights, as well as the still
outstanding decisions of the German Federal Administrative High Court in the non-test-case proceedings, which are now being
continued. Fraport counters these risks through comprehensively following the proceedings, in legal and technical aspects. Mean-
while, the Hessian Administrative Court has also rejected in the first instance the last legal action which had still been pending
before the court of first instance in the non-test case proceedings. This significantly further reduces the risks in connection with
the expansion. Furthermore, Fraport is committed to active noise abatement and noise research with the goal of further reducing
the risk.
The total volume of capital expenditure invested in the airport expansion so far has increased to approximately €2,715 million as
of December 31, 2017 due to the advancing building and contract award activity.
In view of the initiated and upcoming measures (for example, comprehensive roof reinforcement program, particularly in the
municipalities of Raunheim and Flörsheim) and the evaluation of the legal situation, Fraport estimates the probability of occurrence
of the risk of a rescission of the zoning decision regarding the expansion of Frankfurt Airport as being “unlikely”. However, if the
risk was realized, the financial impact (impact level) of the risk would be “very high” and would be associated with high damage
to Fraport AG’s reputation, as extensive media coverage in Germany and limited media reporting at the European level would be
expected.
Financial Risks
“Risk report” according to Section 315 (2) no. 1 of the HGB
With regard to its financial position accounts and planned transactions, Fraport is, in particular, subject to credit risks, interest rate
and currency exchange risks, and other price risks. Fraport covers interest and foreign exchange rate risks by establishing natu-
rally hedged positions, in which the values or cash flows of primary financial instruments offset each other in their timing and
amount and/or by using derivative financial instruments to hedge the business transactions. The scope, responsibilities, and
controls for the use of derivatives are stipulated in a binding internal policy. The existence of a risk that needs to be hedged is the
prerequisite for using derivatives. Derivatives are not used for trading or speculative purposes. To control the risk positions, sim-
ulations are regularly carried out by Risk Controlling using various worst-case and market scenarios. The Chief Financial Officer
is regularly informed about the results. The Fraport AG Treasury department is responsible for efficient market risk management
(for more information, see the Group note 46). Generally, only risks that affect the Group’s cash flows are managed. There can
only be open derivative positions in connection with hedging transactions in which the underlying transaction is canceled or is not
carried out as planned.
Interest rate risks arise in particular from the capital requirements for capital expenditure and from existing floating interest rate
financial liabilities and assets. Fraport assesses the probability of occurrence of this risk as being “unlikely” and the potential
impact (impact level) as “medium”. As part of the interest rate risk management policy, in order to limit the interest rate risk for the
majority of the financial debt, interest derivatives were concluded and financing was concluded with fixed-interest rate agreements.
Following the commitment to these interest rate-hedging positions, there is still a risk that the market interest rate level will de-
crease and as a result there will be a negative market value of the interest rate-hedging instruments. These changes can have an
impact on the result, within the income statement, or also on the shareholders’ equity, depending on the classification of the
derivative. Fraport assesses the probability of occurrence of the risk as being “unlikely” and the potential impact (impact level) as
“medium”.
Foreign currency risks mainly arise from financing in foreign currencies and from planned revenue that is not covered by ex-
penses in matching currencies. Such risks are hedged, to the extent necessary, either through ongoing sale of these currencies
or by entering into currency forward transactions. Due to the hedging that has taken place or is planned, Fraport assesses the
probability of occurrence of foreign currency risks as “possible” and their possible financial impact (impact level) as “very high”.
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Credit risks for Fraport stem, on the one hand, from primary financial instruments. Such risks arise, for example, upon the pur-
chase of securities in the framework of asset management and comprise the default risk of the issuer. On the other hand, credit
risks arise in connection with derivative financial instruments with a positive fair value and the risk that the counterparty will not
be able to meet the obligations that are advantageous for Fraport. This risk is generally countered by acquiring financial assets
and concluding derivatives only in the case of issuers and counterparties who have a rating of at least “BBB-”. If the credit rating
is downgraded below “BBB-” during the asset’s holding period or the term of the derivative, a decision will be made on a case-by-
case basis on the further course of action with the financial asset or derivative, taking into account the remaining term.
In addition, investments in bonds without ratings are also possible in individual cases, within narrowly defined limits. The counter-
parties’ issuer and issue ratings are regularly monitored. In addition, ongoing reporting regarding the counterparties is monitored.
Moreover, the upper limits are continually adjusted to the credit-rating development and where necessary reduced, and financial
assets are diversified further under risk considerations. In consideration of the previously described measures, Fraport classifies
the potential financial impact (impact level) of credit risks as “low” and their probability of occurrence as “unlikely”.
Other price risks result from the fair value measurement of financial assets. This, however, does not immediately affect cash
flow. Financial assets with a fixed term are assumed to be subject only to temporary market fluctuations that reverse automatically
by the end of the products’ maturities, since a repayment in the full nominal amount is expected. Even without specific measures,
Fraport assesses the probability of occurrence of other price risks as “unlikely”, and the impact level as “medium”.
Regarding further information about the nature of risks arising from the use of financial instruments and the impact of risks from
open risk positions in the context of financial instruments, please see Group note 46 in the Notes to the Consolidated Financial
Statements.
Other financial Risks
Risks for Fraport’s asset, financial, and earnings position may arise from the current financial market situation and its effects on
the overall economy, particularly on liquidity and future possible bank lending practices. As a countermeasure, Fraport continues
to pursue a “prefinancing” strategy, thereby securing funding for items such as upcoming capital expenditure and repayments.
The capital from this strategic liquidity reserve is still available.
Legal risks and compliance risks
As a Group that operates internationally, Fraport is subject to numerous national and international laws and regulations, as well
as their amendments, through which the future business success of Fraport could be negatively influenced. In addition to the
industry-specific regulations of air traffic law, planning and environmental law, and safety-related regulations, the general provi-
sions of capital market law, anti-trust, data protection law, and employment law are also of material importance. The Legal Affairs
departments of Fraport and its Group companies keep abreast of the legal developments, including the relevant case law, inform
the affected business units about changes, and are actively involved in limiting any resulting risks.
Furthermore, the risk exists that bodies and/or employees may violate laws, internal policies, or standards of good corporate
management that are recognized by Fraport. These include the risk of fraud, misrepresentation or manipulation of financial data
or bribery and corruption, with the consequence that Fraport could suffer asset losses and/or damage to its reputation. Fraport is
proactively working to counter these potential risks through the establishment and expansion of a Group-wide compliance organ-
ization, adopted in the Group compliance management system policy, and the implementation of a compliance program, inter alia
through the code of conduct that is binding for all employees, their training on risks, and constant further development of the
central ICS. In addition to this, Fraport has implemented various whistle-blower systems, which employees and external parties
can turn to confidentially and anonymously. In addition, a regular review is made of the applicable policies for whether they are
current and appropriate. All policies adopted by the Executive Board are freely accessible to all employees via the intranet. Fur-
thermore, Fraport documents important business processes to create transparency, and promotes the implementation of suitable
control mechanisms. In view of the previously described effective compliance structures, the probability of occurrence of a com-
pliance violation with a “high” potential impact (impact level) is assessed as being “unlikely”.
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Other legal risks
Tax risks affecting the tax items in Fraport’s statement of financial position and income statement can arise from changes to tax
law and case law, and from different interpretations of existing tax law. Thus, there is the risk of back tax payments in connection
with tax audits that are still to be carried out, which might be accounted for as tax provisions on the basis of probability consider-
ations.
To minimize tax risks, internal controls have been established in the Tax department in order to recognize tax risks in good time
as well as to check and value known risks. Risk-minimizing measures are agreed between the Tax department and the responsible
departments or Group companies.
Operating Risks
Risks from capital expenditure projects
Fraport AG carries out its capital expenditure for construction in two separate programs: “FRA-Nord” for projects in infrastructure
and “Expansion” for projects meant to expand or create capacity.
Fraport’s capital expenditure plan covers a period of ten years and is subject to various risks. Increases in construction costs,
suppliers going out of business, changes in planning figures, or weather-related delays could, for example, all lead to extra costs.
Long-term capital expenditure projects, such as the Expansion South project, are subject to risks in relation to external influences
from the public, the environment, politics, crises or customer/market developments, technological changes, engineering practices
or other legal requirements.
Monitoring measures are implemented so that these potential risks can be confronted appropriately, thus ensuring that counter-
measures can be introduced early on. These include active market cultivation as well as systematic change management in order
to counter possible cost increases.
The potential loss from the capital expenditure projects amounts to approximately €400 million net (impact level: “very high”).
Taking the project-related monitoring measures into account, the probability of the risk materializing is “possible”.
Risks attributable to investments and projects
(International Activities & Services segment)
Investment companies and airport operating projects, like Fraport AG at the Frankfurt site itself, are subject to general economic
and company-specific risks as well as industry-specific market risks. In addition, there are general political risks at individual sites
abroad.
In principle, Fraport’s investments outside of the Frankfurt site can be distinguished from one another as either capital-intensive
capital expenditure, such as the acquisition of long-term concessions or the acquisition of shares in airports, or as business models
with no capital investment or only a small amount, such as the conclusion of service contracts (management contracts). Here,
Fraport is also active in countries, such as Brazil, China, Russia, and Turkey, which can hold higher risks for investors than is the
case for capital expenditure in Germany. These risks typically include country, market, and foreign exchange risks, which can
lead to a significant impairment of the future earnings outlook, right up to a total loss of the investment.
For reasons of bidding strategy, as well as risk minimization, Fraport often works in cooperation with a local partner who has
experience with the relevant typical national regulations and customs. Within the context of major capital expenditure and depend-
ing on the project conditions, Fraport frequently employs project financing that allows no recourse or only limited recourse to
Fraport AG as the capital provider. These types of project financing, which are also referred to as non-recourse or limited-recourse,
are used for risk reduction. Notwithstanding this, the subscribed shareholders’ equity of the relevant project company and share-
holder loans granted by Fraport AG are exposed to a default risk. In order to minimize these risks, Fraport AG uses investment
protection insurances, wherever possible and economically reasonable.
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Risks in connection with the existing airport operating projects, which are generally long-term, arise primarily in connection with
the estimation of the future development of air traffic and consumer behavior by passengers. A possible lack of growth and/or
downturn in air traffic could have a significant negative effect on the earnings development of concessionary companies, which
could also result in “substantial” risks to project financing or the capital invested. Unforeseen official interventions in the tariff, tax,
and levy structure of the airports to the detriment of the airport operators can also cause risks. Additional risks, such as delays in
connection with the construction and continuing development of airport infrastructure, which as a rule adhere to a contractually
stipulated schedule, may also implicitly occur from this.
For the Jorge Chávez Airport in Lima, Peru, operated by Lima Airport Partners (LAP), various risks currently exist regarding the
planned expansion of the airport. Due to the size and complexity of the project, the possibility of changes to the planned costs
cannot be excluded. In October 2017, the tender to appoint a general contractor (EPC contract) was announced, which stated
that the contractual party is to assume most of the usual construction risks. The signing of the agreement is planned for the second
half of 2018. In addition to the usual construction risks, other risks arising from environmental, social or other conditions cannot
be ruled out. In the event that a risk occurs, it is assumed it would be a material risk.
At our Group airport in Antalya, passenger numbers in 2017 increased overall compared to the previous year. Although it appears
unlikely on the reporting date, the situation in Turkey could, nevertheless, lead to a deterioration in profitability and the financial
situation in the future.
Due to the existing tension between Russia, the United States, and Europe, there are continued uncertainties surrounding activi-
ties in St. Petersburg. Direct measures that could be taken against foreign investors would, at least in the short term, result for
Fraport in a weakening of the Group company in St. Petersburg. This “unlikely” risk would potentially result in a “very high” impact
level for Fraport.
Fraport AG guarantees and sureties exist on the basis of existing contracts between Fraport AG, its Group companies, and various
principals. The drawing of such collateral by the contractor is classified as “possible”, depending on the circumstances of the
respective project. If such a risk occurs, up to a “medium” impact level must currently be expected.
Personnel risks
Fraport intends to continue utilizing the growth in global air traffic to create sustainable and attractive jobs at all Group sites.
Fraport is aware that the current demographic shift will intensify the competition for high-quality professionals and managers,
particularly at the Frankfurt site. This relates to the acquisition of new professionals and managers, as well as retaining existing
employees. In order to deal with this risk adequately, Fraport has taken measures in the fields of qualification, commitment, and
work satisfaction. In the qualification field, airport-specific and universal qualification and development programs for employees
and managers, trainee programs, and short- and medium-term assignments are offered at foreign sites. In the commitment field,
Fraport offers attractive company benefits, the participation of employees in the company’s success, and concrete measures for
good work-life balance. In the work satisfaction field, the training and sensitization of the managers to the reduction and minimi-
zation of work and health risks play an important role. In addition, comprehensive employee surveys are conducted every year in
all Group companies with a substantial workforce. They provide Fraport with important insights and opportunities to improve the
working environment on all operational levels. At the same time, Fraport AG has established an attractive, voluntary program for
staff restructuring for its employees. In particular, the focus has been placed on the operating units, starting with the ground
services at the Frankfurt site, which place a high demand on personnel. Long-term employees have been offered options such as
partial retirement, early retirement, part-time hours, or an exit with severance pay. The program was initiated to support the staff
restructuring and improve the overall cost structure of the personnel expenses, especially in the personnel-intensive business
fields within the Group. On the basis of the initiated measures, the potential impact (impact level) of the risk is assessed as “low”
and the probability of occurrence as “possible”.
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For the purpose of granting a company pension under the statutory insurance scheme based on collective bargaining agreement,
Fraport AG is a member of the Zusatzversorgungskasse in Wiesbaden (ZVK). This is currently structured – as with the statutory
insurance scheme – as a solidarity model. In view of the demographic development, the ZVK has the problem that the current
levies are not sufficient to finance the benefits in the long term. Therefore, a so-called “restructuring fee” is now being collected in
addition to the levies. Furthermore, the ZVK’s solidarity model envisages that personnel who leave are replaced by new levy
payers. If the requirement for work performance declines, in addition to the demographic development, the number of employees
for whom levies and restructuring charges are paid will fall. Because of this, the funding shortfall will grow continuously in the
company pension plan. Therefore, it cannot be ruled out that the ZVK could charge further compensation amounts in order to
cover the growing compensation funding shortfall. The parties to the collective agreements have now also addressed the problem
and agreed on countermeasures in the current collective bargaining agreement for 2016 and 2017. From mid-2016, both the
employer's contribution and the employee contribution were raised by the same amount, by 0.2 rising to 0.4 percentage points.
The aim is to respond to the increasing financing requirement for the company pension plan.
In view of the high complexity of the issue and unclarified legal questions, a precise assessment of the potential financing impact
(impact level) is not currently possible; the probability of occurrence is assessed as “possible”. However, if the risk was realized,
its impact would be “very high”.
There has been disagreement between the Fraport AG works council and the company’s Executive Board since April 2017 in
regard to determining the budget amount for the 2016 employee profit-sharing plan. The background to this is the fact that in the
calculation for 2016, special effects that had no direct relation to the Frankfurt site in fiscal year 2016 were taken into account as
a correction. Explicitly on the topic of “Manila”, this was partly done because the extraordinary depreciation and amortization of
the Manila investment had not caused any disadvantages for employees in 2002.
The Fraport AG works council brought a claim before the Labor Court of Frankfurt am Main regarding this. The Labor Court
dismissed the works council’s motions on February 8, 2018. Since the decision is not yet final, it is possible that a court of second
instance may reach a different decision that would lead to the realization of the risk and would result in a “substantial” negative
effect.
Risks of exeptional incidents
Operations in Frankfurt and other Group airports may be impaired by local events such as accidents, terrorist attacks, fires, or
technical malfunctions, as well as events that influence the operation of national and international air traffic (such as natural
disasters, extreme weather conditions, armed conflicts, and epidemics).
Fraport has taken a series of measures in order to minimize or counteract such negative effects. In order to protect the IT infra-
structure and the critical operating systems from significant negative effects, Fraport and the other Group airports have developed
plans for maintaining critical business and operating processes (business continuity and emergency teams), as well as the resto-
ration of the IT services. Furthermore, a central crisis team is established in Frankfurt which carries out all of the necessary
processes airport-wide in the event of emergencies. In order to verify the adequacy of these plans and measures and to continu-
ously improve them, malfunction scenarios are set up and exercises are carried out on a regular basis.
In addition to these preventative measures, Fraport AG’s insurance protection covers the risks that are usually insurable at airport
companies. It particularly includes loss events that result in the loss of or damage to assets, including resulting business interrup-
tions, as well as the statutory third-party liability of Fraport AG from all business capacities, legal situations, and activities in relation
to the operation of Frankfurt Airport, as well as all additional risks that are conventional or necessary in the business or industry,
as well as in the operation. Insurance protection regularly also covers the risks from terrorism regarding property and third-party
liability. Fraport AG and the domestic Group companies, in which an interest of at least 50% is held, are covered against risks of
environmental damage from potential accidents, for statutory and public-law claims.
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Foreign Group companies generally cover the aforementioned risks using separate local insurance policies.
If one of the described risks were to occur, this could have a “very high” financial impact (impact level) – in spite of possible
insurance protection – depending on the seriousness. This assessment takes account of far-reaching consequences for the
Fraport business, for example, from natural disasters or terrorist attacks. As such unusual disruptions tend to be rare, Fraport
assesses the probability of occurrence as “unlikely”.
IT risks
All important business and operating processes of Fraport AG are supported by IT systems and IT components. A serious system
failure or material loss of data could lead to serious business disruptions and security risks. In addition to this, attacks by viruses
and hackers could lead to system failure and ultimately to the loss of business-critical and/or confidential data. To counter these
risks, all of the IT systems of critical importance to the company are configured redundantly and are optionally housed at separate
sites. The possibility of residual risks resulting from the architecture and operation of the IT facilities cannot be completely ruled
out due to their nature.
Due to the ongoing development of new technologies and the ever-increasing global threat of cyberattacks, there is an underlying
risk potential for IT systems. Fraport takes account of this situation with active and preventative IT security management, which
particularly focuses on Fraport AG’s business-critical IT systems and their availability. The requirements for IT security are spec-
ified and compliance with these requirements is reviewed in the IT security policy and security guidelines that must be followed
throughout the company. Furthermore, compliance with data protection regulations is ensured. In addition to this, residual risks
from failures that occur, are, as far as economically reasonable, additionally covered by the general property, terror, and business
interruption insurance, and by specific IT insurance policies.
IT systems are highly important to all of Fraport’s business and operational processes. Despite the preventative and proactive
measures introduced, the potential effects (impact level) of an IT failure lasting several hours are assessed as “high” in at least
one scenario and the probability of occurrence as “unlikely”.
The risk of cyberattacks was also evaluated given the fact that such attacks have recently been launched against other large
companies as was widely reported. Despite all protective measures taken, the likelihood is classified as “possible” and the poten-
tial damage to reputation as “high”.
Opportunities report
The opportunity management system
The opportunity management system of the Fraport Group has the aim of identifying and evaluating opportunities at the earliest
possible stage and initiating appropriate measures so that opportunities are taken and lead to commercial success. Opportunities
should be assessed for existing business, as well as from new business fields.
The identification and recording of opportunities is undertaken by the operating units/segments and the supporting Group units
throughout the year, within the context of the company’s operational control and the annual revolving medium-term planning
process. While the short-term result monitoring is aimed at opportunities that mainly relate to the current fiscal year, the medium-
term planning process focuses on opportunities that are of strategic importance for the Group.
Within the context of the planning process, Fraport assesses market and competitive analyses, as well as environmental scenarios
and deals with the orientation of the product and service portfolio, the cost drivers, and the critical success factors of the industry.
Furthermore, Fraport monitors the identifiable trends at its competitors, customers – such as airlines, passengers, and tenants –
as well as in businesses outside of the industry, which have an impact on air traffic in general and the operation of airports in
particular. Fraport aims to further develop and expand the value-creating business fields that are already part of its operations.
Furthermore, Fraport invests in business fields and business ideas in which the company can establish sufficient expertise in
order to operate these to create value over the long term.
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In addition to the opportunity management by the strategic business units and the Group’s central units, Fraport also uses the
expertise of the entire workforce. With a variety of instruments, Fraport aims to identify opportunities developed by employees.
This includes traditional Group ideas management as well as the establishment of Smart Data and innovation labs, the implemen-
tation of innovation competitions as well as the continuous development of various knowledge exchange platforms (see also the
chapter titled “Research and Development” starting on page 98).
In general, Fraport aims for a balanced relationship between opportunities and risks, where its aim is to increase the added value
for customers and shareholders by analyzing and using new market potential and opportunities.
If it is likely that the opportunities will occur, they have been included in the 2018 forecast and respectively, in the medium-term
plan. Therefore, the following section concentrates on future developments or events that may lead to a positive deviation from
the outlook and medium-term plan for Fraport.
Unless specified otherwise, the opportunities described relate to all segments to varying extents (Aviation, Retail & Real Estate,
Ground Handling, and International Activities & Services).
Fraport AG is the parent company of the Fraport Group and comprises all of the described segments. Therefore, it is also – directly
or indirectly – subject to the opportunities described.
Overall economic opportunities
Experience with the growth cycles has shown that temporary market turbulence can generally only interrupt the upward develop-
ment of global air traffic for a period of time. Turbulence may, on the one hand, mean that passenger numbers only reach a certain
level after a longer period of time than expected. On the other hand, catch-up effects with accelerated growth are possible after
times of crisis. A close correlation between economic and air traffic growth continues to exist, so that upturn and recovery phases
in the economy result in growth in air traffic.
In 2017, the global economy saw more dynamic growth overall than in 2016, and economic research institutions expect a contin-
uation of this growth in 2018. The economic areas of the USA and Europe, which are particularly important for the hub operation
in Frankfurt, will record moderate growth in 2018. The new U.S. Government’s actions are in part stimulating (tax cuts) but can
also be potentially dampening (trade restrictions, limiting immigration). The economy in the Eurozone is approaching full capacity.
European sentiment indicators suggest that the economic upturn could spread: The mood among businesses and households in
the four main economies in the Eurozone is good. While Great Britain’s withdrawal from the EU (Brexit) will dampen economic
growth in the next few years, the devalued British pound could stimulate tourism in England. A relocation of transfer traffic from
Great Britain to Frankfurt is also conceivable if parts of Great Britain's traffic rights cease to apply. Important leading indicators in
global trade such as the purchasing managers indices rose to six-year highs in 2017. This could indicate trade growth, which
would have a positive impact on the handled cargo volume. The high regional diversification of German exports means that the
German economy is also resistant towards negative developments in individual target markets, which contributes to making air
freight in Frankfurt robust. Fraport must, of course, permanently face competition from cargo airports in Central Europe.
The historically cheap crude oil prices in place since the fall of 2014 are relieving the pressure on the international and national
economy, including the air traffic sector and households, and are encouraging travel. A continuing weak euro could make Euro-
pean goods cheaper internationally and thus create a positive stimulus for exports from which Frankfurt Airport as a handling
location could particularly benefit. As a result of the economic conditions in conjunction with an improved financial situation, the
established airlines could bring the consolidation in the airline industry to an end more quickly, stop route reductions, create new
airline services, and exceed the current traffic forecasts.
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IATA assumes global passenger growth of 6.0% for 2018, based on revenue passenger kilometers (RPK), and a growth rate of
6.0% for Europe. These growth rates bear witness to the dynamic development of the air traffic industry. The long-term average
annual growth of passenger kilometers globally is higher than economic growth, meaning that the chance of significant growth in
air traffic also exists for 2018. Also for Frankfurt, the Executive Board expects passenger numbers to be in the range of approxi-
mately 67 to approximately 68.5 million for 2018.
Global air traffic provides the central infrastructure basis for the now strongly internationalized global economy. This is supported
by development in various developing and emerging countries with lasting, favorable growth potential. The rise in the standard of
living in these countries is key to the disproportionately high growth of air traffic, not least because landside transport infrastructure
is often underdeveloped in these areas. Compared to Central Europe and North America, economic development in these coun-
tries was far less impacted by the financial and economic crisis.
As an international airport operator that is represented in virtually all parts of the world, Fraport can take advantage of this region-
ally varied growth potential and balance out geopolitical risks through investments. Also in future, Fraport will continue to expand
selectively and on a success-orientated basis in international business. This can compensate certain signs of saturation in the
demand for air traffic in western countries, which also affect the Frankfurt site.
Opportunities in corporate strategy
Political conditions
The discontinuation of the regulatory measures that distort competition, such as the aviation tax or the transfer of costs of pas-
senger controls to the public purse, could result in increased traffic.
Further development of the Group strategy
The Group mission statement introduced at the end of 2015 reflects Fraport's intention to develop the Group from an infrastructure
provider to Europe's premium service-oriented airport operator. The strategic objectives associated with the mission statement
take account of Fraport's aim for the sustainable development of existing growth potentials (see also the chapter titled “Strategy”
starting on page 53). Moreover, the mission statement intends to promote a cultural shift amongst employees towards increased
customer focus, cooperation and cost awareness. It opens up significant opportunities for the successful economic development
of the Group in the coming years.
The implementation of the refined Group strategy results in the following key growth drivers for Fraport:
Growth in air traffic at the Frankfurt site
With the inauguration of Runway Northwest, Fraport has managed to create sufficient airside capacities at the Frankfurt site in
the last few years as the basis for dynamic traffic growth. Fraport also wants to ensure and continue to increase the appeal of the
Frankfurt site for network carriers on the land side. As a result, the airport's infrastructure will continue to be adapted to customer
requirements. A high-quality premium product has already been established in areas A and B (West) for Deutsche Lufthansa and
its Star Alliance partners. Fraport will develop this even further in close cooperation with the airlines in order to continue to meet
the company's claim to be a leading hub airport in Europe.
Fraport is constructing Terminal 3 in order to have sufficient capacity available for the growing air traffic in Frankfurt in the future.
Piers H and J will provide additional capacity of up to 14 million passengers per year. Inauguration is scheduled for 2023. Pier G
should be completed before that. The construction work of this pier is set to start in the second half of 2018.
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Growth in the retailing and multichannel business
Extending and modernizing the retail, food and beverage, and service areas in the terminals, in particular on the airside, continue
to be central elements for increasing retail revenue. In the medium term, the focus is on implementing innovative shopping con-
cepts in suitable existing areas. The development is supported by culture-specific, sales-promoting measures and a more strongly
individualized approach to customers, particularly passengers with especially high purchasing power. In view of this, Fraport is
intensively analyzing the buying behavior of passengers. Fraport is also monitoring general trends in the retail sector in order to
derive future new business opportunities for the company at any early stage.
This also includes the multichannel business field. Working together with its partners, Fraport operates target group-specific,
individualized marketing across all relevant channels. The online trading platform created a digital platform on which goods and
services are offered and sold, supported by additional digital instruments at the airport and on passengers’ mobile devices. The
Frankfurt Airport Rewards Program builds up a personal connection to the customer. Customized offers for travelers can be made
based on the data collected.
The aim is to offer a tailored shopping and service offering to the customer along their entire travel chain, thus increasing customer
satisfaction. This also includes the continuous testing of digital technologies to develop new products and services and to optimize
airport processes.
Growth outside the Frankfurt site
Fraport realized substantial growth in international business by opening up new markets with the development and expansion of
existing sites as well as the acquisition of new investments. Fraport aims to market its expertise around the world and participate
in the appeal of new sales markets.
Including the Frankfurt site, Fraport was active at 29 airports through Group companies at the time of preparing the consolidated
financial statements.
At the beginning of 2018, the Group companies Fortaleza and Porto Alegre took over operations of each respective airport. The
terms of the concessions for the operation of these airports amount to 30 and 25 years, respectively.
In addition to this portfolio, Fraport holds all the shares in the US subsidiary Fraport USA, Inc. The company markets commercial
areas within the scope of master concessions at the North American airports in Baltimore, Pittsburgh, and Cleveland. Subject to
a pending approval, Fraport USA will take over management of the retail areas in Terminal 5 at JFK Airport in New York in the
first half of 2018 (see also the chapter titled “Business Outlook” starting on page 126).
Fraport’s international portfolio has constant growth rates above those of global air traffic. To permanently benefit from this growth,
Fraport is continually evolving its existing sites through expansion and quality measures.
The clear aim is to further increase the result from the external business in the next few years.
Opportunities in conjunction with organizational and process-related improvements
A continuous optimization of key business processes and constant cost control are of essential importance for ensuring stable
profitability and capital returns. Fraport holds the view that the possibilities for further optimization of the cost structures within the
Group are not yet fully utilized. The functions of corporate management include continuously investigating the organization to
determine how it can be structured more effectively and efficiently. Case-by-case projects are initiated to utilize the identified
optimization potential (such as the lean management initiative). Through this continuous process, it should be possible to achieve
additional earnings potential over and above the forecasts.
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Opportunities for improving the processes not only result from within the Group, but also in cooperation with customers and
suppliers. Therefore, Fraport also aims to review the processes at these interfaces on a regular basis and leverage further poten-
tial, which will have a positive impact on the corporate result and the quality delivered.
Fraport is continuously striving to realize organizational and process-related improvements. Therefore, Fraport also focused on
creating additional impetus here during the past fiscal year, including within the scope of process-oriented quality management,
in order to anchor and strengthen process orientation in the company. Here, specific challenges of an integrated business model
in the Group, as well as the importance of the Group in terms of social and regional policy also need to be taken into account.
Fraport sees many possibilities to take advantage of the potential in the rapidly evolving technology of autonomous driving. In the
areas of employee transport on the company sites, but also for container transports and winter services, projects have been
designed with industry partners and test runs have been carried out during the last year. Building on the results, these activities
will be advanced and developed further in the current year. Autonomous driving can create longer-term opportunities to rapidly
and efficiently deploy personnel. This can also be a solution to social developments such as the increasing lack of bus drivers.
Financial opportunities
Favorable changes on the financial markets
Favorable exchange rate and interest developments can have a positive impact on the Group’s financial result. Accordingly,
exchange rate effects from the conversion of results that are not denominated in euros into the functional currency of the Group
(the euro) can have a positive impact on the financial result. Overall, Fraport expects to be able to take advantage of favorable
developments in the financial markets.
Overall assessment of the opportunities and risks by the company management
Fraport consolidates and aggregates all of the risks and opportunities reported by the various company units and Group compa-
nies that are reported within the context of the quarterly risk analysis process. Furthermore, the Group’s risks and opportunities
are regularly discussed and assessed at the Executive Board level and within the context of the regular planning processes. They
have not materially changed overall in comparison to the previous year. In the opinion of the Executive Board, the risks described
before are not of a nature, individually or in their entirety, that might jeopardize the company as a going concern in consideration
of their respective risks of occurrence and their financial impact, as well as in view of the stable balance sheet structure and
anticipated business development. The Executive Board continues to be convinced that the Group’s financial strength forms a
solid basis for future business development and provides the necessary resources to effectively pursue and utilize opportunities
that present themselves to the Group.
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Outlook Report
General Statement by the Executive Board
Financial and economic institutions expect a continued expansion of the global economy for fiscal year 2018, which will have a
positive impact on the development of air traffic in general as well as on the Frankfurt site and the Fraport Group’s airports.
Correspondingly, the Executive Board forecasts positive operating development for the Group in total. Uncertainties continue to
result from political crises and terrorist attacks, which have the ability to impact air traffic at Fraport’s airports (see also the “Risk
and Opportunities Report” chapter starting on page 105). At the Frankfurt site, the incentive programs for passenger growth will
promote the supply of services by airlines and more frequent services. The Executive Board expects positive effects from the full-
year operation of Fraport Greece as well as the first-time operational inclusion of the Group companies Fortaleza and Porto Alegre,
whose financial impact have been taken into account in the following forecast.
For the fiscal year 2018, the Executive Board expects passenger numbers in a range of between approximately 67 million and
68.5 million passengers at the Frankfurt site. The development of the consolidation process among the airlines, which is difficult
to forecast, as well as uncertainties in terms of strikes may lead to deviations from the forecast. In addition to the expected growth
in traffic, the Executive Board expects higher parking and retail revenue, ground services and infrastructure charges as well as
revenue from security services. Exchange rate fluctuations that impact the purchasing power of passengers may additionally have
positive or negative effects.
Outside of Frankfurt, the Executive Board forecasts positive traffic development for all Group airports in fiscal year 2018. In par-
ticular, revenue from the Group companies Lima, Twin Star, and Ljubljana will contribute to growth. The Group company Antalya
will improve the result from companies accounted for using the equity method significantly. The development of the Varna and
Burgas, Antalya and St. Petersburg sites will continue to be determined largely by the political situation around Russia and the
developments in Turkey. Possible terrorist attacks in these regions may also influence travel behavior.
Overall, the Executive Board forecasts Group EBITDA of between around €1,080 million and approximately €1,110 million for the
fiscal year 2018. The Executive Board expects a Group result in the range between around €400 million and about €430 million,
with a stable financial result. With regard to the asset and financial position, the Executive Board expects significantly higher cash
flow used in property, plant, and equipment in Frankfurt and for airport operating projects of slightly less than €1 billion. The free
cash flow is expected to be noticeably below the 2017 level due to the higher capital expenditure measures and is expected to be
negative. The financing of the expansion measures at the sites in Brazil, Greece, and Lima will result in an increase in net financial
debt of up to €4 billion as well as a slight deterioration of the gearing ratio. Despite the expected higher indebtedness, the Executive
Board continues to assess the Fraport Group’s financial situation in the forecasted period as stable. As at the date of preparing
the consolidated financial statements, the Executive Board does not see any material risks that might jeopardize the Fraport
Group as a going concern (see also the “Risk and Opportunities Report” beginning on page 105). Apart from the take-over of the
operation of the Brazilian airports in Fortaleza and Porto Alegre as at January 2, 2018, there are no further significant acquisitions
or disposals of companies or increases or reductions in shareholdings included in the forecasted period.
Business Outlook
Information about reporting
The business outlook is based on the assumption that the domestic and international economy and air traffic will not be impaired
by external shocks such as terrorist attacks, wars, epidemics, natural catastrophes, or renewed turbulences on the financial mar-
kets. Moreover, statements concerning the anticipated asset, financial, and earnings position reflect the accounting standards to
be applied in the EU at the start of the 2018 fiscal year. No material effects on the asset, financial, and earnings position will result
from amendments of the accounting standards.
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Risks and opportunities that do not form part of the business outlook and may lead to significant negative or positive changes to
the forecasted developments can be found in the chapter titled “Risk and Opportunities Report” starting on page 105.
Forecasted situation of the Group for 2018
Development of structure
With the operational take-over of the airports in Fortaleza and Porto Alegre, Brazil, in January 2018, Fraport welcomes a new
major Group site (“Brazil”). The site will have a material impact on the Group’s asset, financial, and earnings position. The effects
are presented below in this chapter. The Executive Board does not expect any further changes to the Group structure in fiscal
year 2018 that will have a significant impact on the asset, financial, and earnings position.
As at January 1, 2018, the “Airport Security Management” strategic business unit has been fully integrated into the “Airside and
Terminal Management, Corporate Safety and Security” strategic business unit of Fraport AG, and the External Activities & Ser-
vices segment has been renamed “International Activities & Services” (see also the chapter titled “Structure” starting on page 51).
Development of competitive position and future markets
The development of future markets is the focus of the strategic objective “Growth in Frankfurt and internationally”, (see also
chapter "Strategy" starting on page 53). Fraport aims to market its expertise around the world and participate in the appeal of new
markets. In this respect, Fraport selectively assesses whether to participate in international tenders. Through the acquisition of
the 14 Greek regional airports and the operational take-over of the Brazilian airports at the start of fiscal year 2018, Fraport has
expanded its portfolio to reach more markets that are attractive from a touristic and an economic perspective. The winning of the
tender for the retail space concessions to operate in Terminal 5 of JFK Airport in New York also enhances the presence of the
Group company Fraport USA and leads to a further opening up of the local market there (see also the chapter titled “Risk and
Opportunities Report” starting on page 105).
In its existing portfolio, Fraport also aims to strengthen its competitive position and expand its markets in Germany. Examples
here include the new agreements in security services via the Group company FraSec in the Aviation segment, via the Group
company FraGround in the Ground Handling segment, and the multichannel strategy in retail business.
Development of strategy
As shown in the chapter titled “Strategy” on page 53, the focus in the year under review was on the further implementation of the
Group strategy, which was developed further in 2017 based on the mission statement, and broken down into individual programs.
The Executive Board does not anticipate any material effects on the structure of the Fraport Group or impacts on the future asset,
financial, and earnings position from the change.
Development of control
Compared with the fiscal year 2017, the Executive Board does not expect any substantial changes in 2018 in the financial and
non-financial performance indicators that are used to control the Group. As already included in the 2017 reporting, the global
passenger satisfaction, baggage connectivity, employee satisfaction, the ratio of women in management positions, the sickness
rate, and CO2 emissions will be reported as the key non-financial performance indicators beginning in fiscal year 2018.
For the fiscal year 2018, the WACC will decrease from 6.7% to 6.5% (before taxes). The Executive Board does not expect any
fundamental changes to the strategic focus of finance management in 2018.
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Forecasted macroeconomic, legal, and industry-specific conditions for 2018
Development of the macroeconomic conditions
The global economic environment remains fraught with risks; however, many of them lost significance over the course of 2017.
Consequently, financial and economic institutions continue to expect the global economy to expand further in the 2018 fiscal year.
Following global economic growth of approximately 3.6% in 2017, an increase of 3.7% to 3.8% is expected for the fiscal year
2018. Global trade will rise by up to 4.2%, according to current forecasts. Growth in the economy and trade will provide generally
positive momentum for passenger numbers and cargo volume. The US Federal Reserve’s expansionary monetary policy is slowly
coming to an end. In the Eurozone, however, there are hardly any signs that the European Central Bank will end its loose monetary
policy and raise the low interest rates. As a consequence, with regard to the euro to US dollar exchange rate, it is assumed that
the slight depreciation trend will continue, despite strong economic data from the Eurozone. The oil price has come off its low and
is showing an increasing trend. The agreement to limit production quantities by OPEC and Russia supports the price. However,
US oil production will increase due to the use of fracking, which means a possible rise in prices should be limited. Overall, the still
relatively low oil price compared to the long term leads to lower fuel costs for airlines, which keeps fare prices down and is therefore
a positive driver of passenger demand.
In 2018, the important markets for Frankfurt are expected to develop positively. The USA is expected to have GDP growth of
approximately 2.7%. While only moderate growth is anticipated in Japan, the growth rates in emerging countries, above all China,
are again expected to significantly exceed those for industrial countries. The upturn in the Eurozone has solidified. After achieving
growth of 2.3% in 2017, economic growth of 2.1% is forecasted for the 2018 fiscal year. For Germany, many forecasts continue
to expect growth at the level of the past year (2017: +2.2%). Domestic demand and exports will promote continued recovery.
Driven by rising real wages, increasing transfer income, and rising employment, private consumption should grow faster than
public consumption.
The following growth rates are expected for the countries with significant Group sites: Slovenia +4.3%, Brazil +2.3%, Peru +4.1%,
Greece +2.8%, Bulgaria +2.8%, Turkey +3.0%, Russia +1.1%, and China +6.5%.
Source: IMF (October 2017, January 2018), Deutsche Bank Research (December 2017), DekaBank (January 2018), German Federal Statistical Office (January 2018),
ifo Institute (December 2017).
Development of the legal environment
At the time the consolidated annual financial statements were prepared, the Executive Board saw no changes in the legal envi-
ronment in fiscal year 2018 that will have significant effects on the Fraport Group.
Development of the industry-specific conditions
Based on the expected development of economic conditions, and taking into account the financial situation of the airlines, IATA
anticipates global passenger growth of 6.0% in 2018, based on sold revenue passenger kilometers (RPK). Regionally IATA an-
ticipates the following growth rates (also based on RPK): Europe: 6.0%, North America: 3.5%, Asia-Pacific: 7.0%, Latin America:
8.0%, Middle East: 7.0%, and Africa: 8.0%. Globally, cargo is expected to grow by 4.3%. With regard to global passenger numbers,
ACI expects growth of 5.7% in 2018.
On the basis of the German airports, the German Airports Association (ADV) forecasts solid passenger growth of 4.2% despite
the continued consolidation of airlines. ADV expects an increase of 5.1% in the cargo area.
The strong economic growth should allow passenger numbers to grow faster than the capacity on offer. This will enable airlines
that benefit from consolidation to gain financial strength, thereby generating added value for investors. Although a slight decrease
of the return on invested capital (ROIC) is expected for the airline industry, it will remain above the cost of capital.
The positive outlook allows airlines to order more aircraft. New aircraft are more efficient and consume less jet fuel per flight,
which allow fares to drop further. This boosts passenger growth, which also benefits Frankfurt Airport.
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In the future, the entry of new competitors into the hub business may result in increased competition for transfer passengers on
certain routes. In particular, the new airport in Istanbul can offer favorable traffic rights for Turkish airlines in Germany, which may
draw transfer travelers from Europe, including those from Frankfurt, on their way to Southeast Asia. The airport is expected to be
opened at the end of 2018 or in 2019. Such withdrawal effects will probably be more than compensated for, however, by the
general passenger growth that is forecasted for the next few years. These effects are taken into account in the forecasts of traffic
growth in Frankfurt.
Source: IATA “Economic Performance of the Airline Industry” (December 2017), ADV Forecast (December 2017).
Forecasted business development for 2018
Taking into account the economic and industry-specific conditions, the development of the consolidation process among the
airlines which is currently difficult to forecast, and continued uncertainties in connection with potential strikes, the Executive Board
expects passenger numbers in a range of between approximately 67 million and approximately 68.5 million at the Frankfurt site
for the fiscal year 2018. The good economic environment and consumer enthusiasm are keeping demand high, which can already
be seen in the booking indicators used for the company forecast. The incentive program for passenger growth in Frankfurt pro-
motes supply by airlines, and there will be increases in services supplied and more frequent services, as is already reflected in
the published schedules and reservation systems. However, uncertainties continue to result from political crises and the short-
term yield and capacity management of the airlines. With regard to the handled cargo tonnage, in the 2018 fiscal year, the
Executive Board expects a slight increase of around 1% compared to 2017. The reason for this is the growth of both the global
economy and global trade.
At the two Brazilian airports of Fortaleza and Porto Alegre, the Executive Board expects in each case growth in passenger
numbers in the mid to upper single-digit percentage range for 2018. For the Ljubljana and Hanover sites, the Executive Board is
forecasting a slight rise in traffic in the single-digit percentage range. Based on the positive economic assumptions and tourist
forecasts, significant growth in the high single-digit percentage range is expected at the Lima Airport for the fiscal year 2018. For
the 14 Greek regional airports, the Executive Board expects a rise in passenger numbers of approximately 5% in 2018. The
airports in Varna and Burgas will also develop positively, although at a slightly lower growth rate than reported the previous year.
The Executive Board expects growth in the single-digit percentage range for both Bulgarian airports in 2018. This is primarily
driven by stronger low-cost traffic. For the Antalya airport, growth in the low double-digit percentage range is also expected
compared to 2017. For 2018, the tourist demand from Russia as well as from Western Europe is expected to increase compared
to the previous year, unless there are new negative political or terrorist developments in Turkey. Due to the positive development
of the economic and political situation in Russia, the Executive Board assumes that the positive trend from last year will continue
and that passenger traffic at St. Petersburg Airport will grow in the low double-digit range in 2018. The positive trend from last
year will also continue at the Xi’an site. The Executive Board expects growth in the high single-digit percentage range for 2018.
Forecasted results of operations for 2018
The expected Group-wide passenger growth will have a positive impact on the Fraport Group's revenue development in 2018. In
Frankfurt, this should be reflected, in particular, in higher airport charges, parking and retail revenue as well as ground services
and infrastructure charges. In addition, the Executive Board expects increasing revenue from security services of the Group
company FraSec from the operations at the airports in Berlin and Cologne/Bonn. Moreover, the development of Group companies
Lima, Twin Star, and Ljubljana is expected to develop positively. In addition to the operating development, the full-year operation
of Fraport Greece as well as first-time operational inclusion of the Group companies Fortaleza and Porto Alegre will lead to a
noticeable growth in revenue. The Executive Board expects revenue of over €100 million for the Brazilian Group companies.
Exchange rate effects from the conversion of the Group companies Lima, Fortaleza, Porto Alegre, and Fraport USA into the
Group’s functional currency, the euro, may have a positive or negative impact on the earnings contribution in these companies.
The Executive Board therefore expects Group revenue of up to approximately €3.1 billion. In addition, the Executive Board also
expects higher capacitive capital expenditure in the triple digit million euro range in connection with the application of IFRIC 12 at
Fraport Greece and in the Group companies Fortaleza, Porto Alegre, and Lima.
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Adjusted for the recognition of capacitive capital expenditure, the Executive Board anticipates an increase in non-staff and per-
sonnel expenses of approximately 5% in 2018. The reasons behind this increase will, in particular, be Fraport Greece as well as
the Group companies Fortaleza, Porto Alegre, and FraSec. Overall, the Executive Board forecasts a Group EBITDA of between
around €1,080 million and approximately €1,110 million for the fiscal year 2018. Here, the Executive Board has taken into account
an EBITDA contribution from Brazil in the amount of around €45 million. Depreciation and amortization in fiscal year 2018 will
increase by up to €30 million in connection with Fraport Greece as well as the Group companies Fortaleza and Porto Alegre. As
a result, Group EBIT of about €690 million to around €720 million is expected.
While it remains difficult to forecast, the Executive Board expects the financial result to remain virtually constant. The continued
positive traffic development expected for the Antalya site will lead to a significant rise in the result from companies accounted for
using the equity method. In addition, the early repayment of project financing of the Group company Lima will have a positive
effect on the other financial result. In contrast, higher interest payments in connection with Fraport Greece as well as the Group
companies Fortaleza and Porto Alegre will have a negative impact.
Overall, the Executive Board expects Group EBT of between around €560 million and approximately €590 million. A Group result
in a range between around €400 million and about €430 million is expected. No significant contribution to the result is expected
from Brazil.
Growth in EBIT and a lower WACC before taxes compared to the previous year of 6.5% (previous year: (6.7%) will lead to an
increase in Group value added by around 10% in 2018. The ROFRA is forecasted to remain approximately at the same level as
in the previous year.
The Executive Board intends to increase the dividend per share for the fiscal year 2018.
Forecasted segment development for 2018
The assumed passenger growth at Frankfurt Airport will have a positive impact on the Aviation segment’s revenue development
in 2018. In addition to the passenger development, increased revenue from security services of the Group company FraSec from
the operations at the airports in Berlin and Cologne/Bonn in particular will contribute to higher revenue. The Executive Board
therefore expects growth in revenue of around 5% in the Aviation segment.
Despite rising expenses in connection with effects from collective labor agreements and from the Group company FraSec, seg-
ment EBITDA will improve noticeably. Segment EBIT will be significantly higher than the previous year with nearly constant or
slightly increasing depreciation and amortization. The value added of the segment will also benefit from the noticeable improve-
ment of the segment EBIT, but remain in negative territory.
The Retail & Real Estate segment will also benefit from the positive passenger outlook at the Frankfurt site in 2018, which will
primarily impact parking and retail. In the area of real estate, revenue is expected from the sale of land, which, however, will be
not as high as in fiscal year 2017. The Executive Board expects nearly stable revenue depending on the level of sales of land in
2018. Exchange rate effects can have both positive and negative effects on the purchasing power of passengers and thus the
revenue from retail in the fiscal year.
Due to a decline in other income, segment EBITDA and EBIT are forecasted to remain roughly at the same level as in 2017. This
will depend on the level of potential sales of land as well as the development of the retail revenue per passenger. The segment’s
value added is expected to remain at approximately the same level as in the previous year.
The assumed passenger growth will lead to a noticeable rise in revenue in the Ground Handling segment in 2018. Despite higher
expenses due to effects from collective labor agreements as well as higher personnel expenses due to traffic volumes, the Exec-
utive Board anticipates a segment EBITDA slightly higher than the previous year. Assuming constant or slightly higher depreciation
and amortization, the Executive Board expects segment EBIT to rise slightly accordingly. Correspondingly, the segment value
added is expected to improve slightly but remain negative.
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In connection with the expected positive business developments from Fraport Greece as well as the Group companies Lima, Twin
Star, and Ljubljana, the Executive Board expects a noticeable increase in revenue in the International Activities & Services
segment for fiscal year 2018. The operational take-over of the Brazilian airports is expected to have a positive effect, with a
contribution to revenue of more than €100 million. In addition, the Executive Board also expects higher capacitive capital expendi-
ture in the triple digit million euro range in connection with the application of IFRIC 12 at Fraport Greece and in the Group com-
panies Fortaleza, Porto Alegre, and Lima. Exchange rate effects from the conversion of the currencies in the Group companies
Lima, Fortaleza, Porto Alegre, and Fraport USA into the Group’s functional currency, the euro, may have a positive or negative
effect on the earnings contribution made by the Group companies. Operating expenses will increase, in particular, due to the full-
year operation of Fraport Greece as well as first-time operational inclusion of the Group companies Fortaleza and Porto Alegre.
Overall, the Executive Board anticipates a significant increase in segment EBITDA and segment EBIT. In this respect, the Exec-
utive Board has taken into account an EBITDA contribution from Brazil in the amount of around €45 million and an EBIT contribu-
tion of approximately €30 million. The segment value added is forecasted to be slightly at the level or slightly above the previous
year’s level.
Forecasted asset and financial position for 2018
Subject to changes to working capital, the Executive Board expects operating cash flow to noticeably exceed the level of fiscal
year 2017. The Executive Board expects additional cash inflow from Brazil, Frankfurt, and Greece.
In the area of capital expenditure, the Executive Board anticipates significantly higher cash outflows for property, plant, and
equipment in Frankfurt and for airport operating projects (excluding payments for the purchase of new Group companies or con-
cessions). Overall, the Executive Board – depending on the progress of construction – anticipates an amount slightly under
€1 billion. The increase will result, in particular, from the ongoing construction of Terminal 3 in Frankfurt and from higher or first-
time capital expenditure at the sites in Greece, Lima, and Brazil. At the Lima site, above all, potential bonus payments in connec-
tion with the construction agreement to be awarded may lead to cash outflows that may be above the effective progress of the
construction project. The Executive Board expects the operating cash flow to cover approximately 80% of the planned capital
expenditure. The free cash flow before the planned dividend distribution for fiscal year 2017 is expected to be noticeably below
the 2017 level due to the higher capital expenditure measures and should be negative. In addition to possible working capital
changes, the development of the free cash flow in the Group companies Lima, Fortaleza, and Porto Alegre are also affected by
exchange rate effects.
Taking into account the planned dividend distribution, the Executive Board is expecting an increase in net financial debt to up to
€4 billion in the 2018 fiscal year. The gearing ratio will rise slightly depending on the effective growth of debt. Depending on
exchange rate effects, the Group shareholders’ equity is expected to be noticeably higher than the figure as at the end of the
2017 fiscal year. The Group shareholders’ equity ratio, depending on potential refinancing measures and the amount of capital
expenditure, is forecasted to remain approximately the same as at the 2017 balance sheet date.
The scheduled repayment of loans and the payment of a dividend will lead to a significant decrease in the Group's liquidity in
fiscal year 2018 (without taking potential refinancing measures into consideration). In this context, scheduled repayments amount-
ing to €550 million are planned for 2018, which are essentially all attributed to Fraport AG. The scheduled repayments may be
settled either from the existing Group liquidity resources, extensions of existing financing, or refinancing measures. Fraport AG
finances the capital expenditure on expansion projects at the Frankfurt site from a combination of operating cash flow and debt.
The major capital expenditure abroad, which has yet to be financed, particularly affects Lima and Brazil. Financing is already
being negotiated for both projects, and the discussions are expected to conclude in fiscal years 2018/2019 (see also the chapter
titled “Finance Management” starting on page 64).
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Forecasted non-financial performance indicators for 2018
In the category of “Customer satisfaction and product quality”, the Executive Board continues to expect global passenger satis-
faction of at least 80% at the Frankfurt site as well as continued high satisfaction figures at the fully consolidated Group sites.
The Executive Board expects baggage connectivity to improve to better than 98.5%.
In the field of “Attractive and responsible employer”, the Executive Board is aiming for Group-wide employee satisfaction to
remain at a level of better than 3.0 in 2018. In addition, the Executive Board anticipates a slight increase in the ratio of women in
management positions in Germany.
In the category of “Occupational health and safety” the Executive Board is aiming for a stabilization of the sickness rate.
For the category of “Climate protection”, the Executive Board anticipates a slight increase in CO2 emissions due to the operational
take-over of the Brazilian airports as well as the first-time inclusion of the 14 Greek regional airports.
Medium-term outlook
In the medium-term forecasted period, the Executive Board expects continuing expansion of the global economy, which will have
a positive impact on the development of air traffic in general as well as on the Group airports. Generally strong growth in con-
sumption is associated with a broadly diversified growth in capital expenditure. The growth rates of the economies in emerging
markets are expected to remain well above those of the advanced economies. For Europe and Germany, stable growth is ex-
pected for the medium term. A gradual normalization of inflation is probable due to the high capacity utilization of the industrial
facilities and as a result of rising wages. Interest rates should rise only slightly as a result of the monetary policy of central banks,
which means saving will remain unattractive. Accordingly, a consumer mood open to consumption and an overall good corporate
position should lead to a positive operating development for the Group. There are uncertainties resulting from protectionist tenden-
cies which could lead to trade restrictions. Britain’s potentially disorganized exit from the EU could lead to market distortions in
the United Kingdom as well as in the EU, which may have a negative impact on European economies and also the Fraport Group.
In the medium to long term, the Executive Board expects stable growth in passenger traffic at the Group airports. After significant
growth rates in fiscal year 2017 and forecasted for 2018, the Executive Board expects the passenger development at Frankfurt
Airport to normalize to the level of recent years (average growth rates between 2% and 3%). Fraport’s airports will benefit Group-
wide from expected market growth in the medium to long term (see also the chapter titled “Strategy” starting on page 53).
The expected passenger growth will have a positive impact on the Fraport Group’s asset, financial, and earnings position. The
Executive Board therefore expects a clearly positive development of the Group revenue, EBITDA, EBIT, and result until the inau-
guration of Terminal 3. In the medium term, the Executive Board expects a contribution by international business to the Group
result approaching around 50%.
Operating cash flow is expected to increase as a result of the operating business in Frankfurt as well as at the international Group
airports. With the growing number of passengers, capital expenditure on infrastructure both at the Frankfurt site and at Group
sites outside Germany will be necessary. In Frankfurt, this will essentially apply to Terminal 3, including Pier G, in the southern
part of the airport. Outside of Frankfurt, capital expenditure, in particular, on Fraport Greece and the Group companies Fortaleza,
Porto Alegre, and Lima are required (see also the chapter titled “Business model” starting on page 46). The free cash flow will
temporarily be significantly below the level in fiscal year 2017 and remain in negative territory for a period of time. Because of this
development, the Group’s net financial debt will also increase. The Executive Board does not expect the ratio of net financial debt
to exceed the range of four to six times Group EBITDA.
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With regard to the asset and financial position, in particular, the €800 million loan issued in 2009 will be repaid by Fraport AG in
2019. Potential acquisitions as well as future capital expenditure commitments can be financed via the aforementioned debt
products. Financing at the level of Fraport AG through a capital increase is not planned (see also the chapter titled “Finance
Management” on page 64 as well as the chapter titled “Asset and Financial Position” starting on page 86).
For the dividend payment, the Executive Board continues to aim for a pay-out ratio between 40 and 60% of the profit attributable
to shareholders of Fraport AG, whereby the dividend per share should at least maintain the level of the previous year.
The Executive Board continues to use the non-financial performance indicators to control the Group in the medium term. In par-
ticular, for passenger satisfaction, the ratio of women in management positions, the sickness rate, as well as CO2 emissions, the
Executive Board has set long-term goals that it consistently pursues (see also the chapter titled “Control” starting on page 58).
Frankfurt/Main, February 28, 2018
Fraport AG
Frankfurt Airport Services Worldwide
The Executive Board
Dr Schulte
Giesen
Müller
Dr Zieschang
Where the statements made in this document relate to the future rather than the past, they are based on a number of assumptions about future events and are subject
to a number of uncertainties and other factors, many of which are beyond the control of Fraport AG Frankfurt Airport Services Worldwide and which could have the
effect that the actual results will differ materially from these statements. These factors include, but are not limited to, the competitive environment in deregulated
markets, regulatory changes, the success of business operations, and a substantial deterioration in the underlying economic conditions in the markets in which Fraport
AG Frankfurt Airport Services Worldwide and its Group companies operate. Readers are cautioned not to rely to an inappropriately large extent on statements made
about the future.
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Consolidated Financial Statements for the 2017 Fiscal Year
Consolidated Income Statement
€ million
Revenue
Change in work-in-process
Other internal work capitalized
Other operating income
Total revenue
Cost of materials
Personnel expenses
Depreciation and amortization
Other operating expenses
Operating result
Interest income
Interest expenses
Result from companies accounted for using the equity method
Other financial result
Financial result
Result from ordinary operations
Taxes on income
Group result
thereof profit attributable to non-controlling interests
thereof profit attributable to shareholders of Fraport AG
Earnings per €10 share in €
basic
diluted
EBIT (= operating result)
EBITDA (= EBIT + depreciation and amortization)
Notes
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
(13)
(13)
(14)
(15)
(16)
(17)
2017
2,934.8
0.4
36.3
38.9
3,010.4
–720.4
–1,092.9
–360.2
–193.9
643.0
29.0
–186.5
30.9
–10.3
–136.9
506.1
–146.4
359.7
29.5
330.2
3.57
3.56
643.0
1,003.2
2016
2,586.2
0.4
34.9
332.9
2,954.4
–621.9
–1,066.7
–360.4
–211.7
693.7
32.0
–138.9
–4.6
–0.8
–112.3
581.4
–181.1
400.3
24.9
375.4
4.07
4.06
693.7
1,054.1
Fraport Annual Report 2017
Consolidated Financial Statements / Consolidated Statement of Comprehensive Income
135
Consolidated Statement of Comprehensive Income
€ million
Group result
Remeasurements of defined benefit pension plans
(Deferred taxes related to those items
Other comprehensive income of companies accounted for using the equity method
(Deferred taxes related to those items
Items that will not be reclassified subsequently to profit or loss
Fair value changes of derivatives
Changes directly recognized in equity
realized gains (+)/losses (–)
(Deferred taxes related to those items
Fair value changes of financial assets available for sale
Changes recognized directly in equity
realized gains (+)/losses (–)
(Deferred taxes related to those items
Currency translation of foreign subsidiaries
Changes recognized directly in equity
realized gains (+)/losses (–)
Income and expenses from companies accounted for using the equity method directly recognized in equity
Changes recognized directly in equity
realized gains (+)/losses (–)
(Deferred taxes related to those items
Items that will be reclassified subsequently to profit or loss
Other result after deferred taxes
Comprehensive income
thereof attributable to non-controlling interests
thereof attributable to shareholders of Fraport AG
2017
359.7
–0.5
0.2
0.3
–0.1
–0.1
–1.6
–26.1
24.5
–7.2
–3.0
0.0
–3.0
1.1
–47.2
0.0
–47.2
–7.3
–8.1
0.8
–0.1
–31.1
–31.2
328.5
22.5
306.0
2016
400.3
–1.9
0.6)
0.4
–0.1)
–1.0
–4.3
–31.4
27.1
–8.4)
13.4
0.4
13.0
0.1)
7.0
0.0
7.0
1.9
–12.9
14.8
–1.0)
52.6
51.6
451.9
26.8
425.1
136
Consolidated Financial Statements / Consolidated Statement of Financial Position
Fraport Annual Report 2017
Consolidated Statement of Financial Position as at December 31, 2017
Assets
€ million
Non-current assets
Goodwill
Investments in airport operating projects
Other intangible assets
Property, plant, and equipment
Investment property
Investments in companies accounted for using the equity method
Other financial assets
Other receivables and financial assets
Income tax receivables
Deferred tax assets
Current assets
Inventories
Trade accounts receivable
Other receivables and financial assets
Income tax receivables
Cash and cash equivalents
Total
Liabilites and equity
€ million
Shareholders´ equity
Issued capital
Capital reserve
Revenue reserves
Equity attributable to shareholders of Fraport AG
Non-controlling interests
Non-current liabilities
Financial liabilities
Trade accounts payable
Other liabilities
Deferred tax liabilities
Provisions for pensions and similar obligations
Provisions for income taxes
Other provisions
Current liabilities
Financial liabilities
Trade accounts payable
Other liabilities
Provisions for income taxes
Other provisions
Total
Notes
December 31, 2017
December 31, 2016
(18)
(19)
(20)
(21)
(22)
(23)
(24)
(25)
(26)
(27)
(28)
(29)
(25)
(26)
(30)
(31)
(31)
(31)
(31)
(32)
(33)
(34)
(35)
(36)
(37)
(38)
(39)
(33)
(34)
(35)
(38)
(39)
19.3
2,621.1
132.4
5,921.5
96.4
268.1
488.6
190.9
0.0
41.0
9,779.3
29.3
143.5
245.5
5.4
629.4
1,053.1
10,832.4
19.3
516.1
146.7
5,954.2
79.6
209.7
561.7
173.3
0.2
36.9
7,697.7
37.9
129.6
259.7
11.9
736.0
1,175.1
8,872.8
December 31, 2017
December 31, 2016
923.9
598.5
2,345.7
3,868.1
160.6
4,028.7
3,955.6
42.4
1,090.1
203.8
34.2
70.3
147.2
5,543.6
575.4
185.9
249.7
33.1
216.0
1,260.1
10,832.4
923.6
596.3
2,220.4
3,740.3
101.1
3,841.4
3,236.9
41.8
408.0
173.6
33.2
71.8
147.2
4,112.5
366.5
146.7
145.7
42.9
217.1
918.9
8,872.8
Fraport Annual Report 2017
Consolidated Financial Statements / Consolidated Statement of Cash Flows
137
Consolidated Statement of Cash Flows
€ million
Profit attributable to shareholders of Fraport AG
Profit attributable to non-controlling interests
Adjustments for
taxes on income (prior year: not including Manila)
Depreciation and amortization
Interest result
Gains/losses from disposals of non-current assets
Others
Earnings effect of the Manila project (including taxes on income)
Changes in the measurement of companies accounted for using the equity method
Changes in inventories
Changes in receivables and financial assets
Changes in liabilities
Changes in provisions
Operating activities
Financial activities
Interest paid
Interest received
Paid taxes on income (prior year: not including Manila)
Cash flow from operating activities
Investments in airport operating projects
Investments for other intangible assets
Capital expenditure for property, plant, and equipment
Investments for “Investment property”
Investments in companies accounted for using the equity method
Sale of shares in companies accounted for using the equity method
Dividends from companies accounted for using the equity method
Dividends from other investments
Revenue from disposals and repayments of loans to investments
Proceeds from disposal of non-current assets
Payments for the Manila project (including taxes on income)
Cash flow used in investing activities excluding investments in cash deposits and securities
Financial investments in securities and promissory note loans
Proceeds from disposal of securities and promissory note loans
Decrease in time deposits with a term of more than three months
Cash flow used in investing activities
Dividends paid to shareholders of Fraport AG
Dividends paid to non-controlling interests
Capital increase
Capital contributions for non-controlling interests
Cash inflow from long-term financial liabilities
Repayment of non-current financial liabilities
Other financing activities
Changes in current financial liabilities
Cash flow used in financing activities
Change in restricted cash
Change in cash and cash equivalents
Cash and cash equivalents as at January 1
Foreign currency translation effects on cash and cash equivalents
Cash and cash equivalents as at December 31
Notes
(16)
(11)
(13)
(1)
(14)
(28)
(25), (29)
(34 – 35)
(36 – 39)
(42)
(19)
(20)
(21)
(22)
(2)
(23)
(1)
(24)
(30)
(42)
(31)
(31)
(33)
(42)
(30), (42)
2017
330.2
29.5
146.4
360.2
157.5
6.9
–23.2
0.0
–30.9
8.6
–4.1
66.0
8.9
1,056.0
–137.3
12.5
–140.5
790.7
–1,579.0
–9.0
–287.1
–0.2
–3.0
0.0
3.4
2.2
0.0
3.5
0.0
–1,869.2
–68.8
182.2
151.3
–1,604.5
–138.5
–9.1
2.5
47.1
1,304.9
–356.3
48.4
–19.3
879.7
–32.5
33.4
448.8
–21.2
461.0
2016
375.4
24.9
112.9
360.4
106.9
–31.4
–8.9
–121.4
4.6
4.9
12.6
–10.0
–21.0
809.9
–113.8
10.9
–123.8
583.2
–32.2
–6.2
–266.9
–0.7
0.0
40.1
24.5
0.0
57.1
4.3
138.9
–41.1
–129.8
260.6
–111.9
–22.2
–124.6
–5.7
2.5
5.6
295.0
–513.7
0.0
–6.7
–347.6
0.0
213.4
230.7
4.7
448.8
138
Consolidated Financial Statements / Consolidated Statement of Changes in Equity
Fraport Annual Report 2017
Consolidated Statement of Changes in Equity
€ million
Notes
Issued capital
Capital reserve
As at January 1, 2017
923.6
596.3
Foreign currency translation effects
Income and expenses from companies accounted for using the equity method directly recognized in equity
Remeasurement of defined benefit plans
Fair value changes of financial assets available for sale
Fair value changes of derivatives
Other result
Issue of shares for employee investment plan
Distributions
Group result
Transactions with non-controlling interests
Capital contributions to the Airports of Greece companies
Consolidation activities/ other changes
As at December 31, 2017
As at January 1, 2016
Foreign currency translation effects
Income and expenses from companies accounted for using the equity method directly recognized in equity
Remeasurement of defined benefit plans
Fair value changes of financial assets available for sale
Fair value changes of derivatives
Other result
Issue of shares for employee investment plan
Distributions
Group result
Capital contributions to the Airports of Greece companies
As at December 31, 2016
(31),(32)
(31),(32)
–
–
–
–
–
0.0
0.3
–
–
–
–
–
923.9
923.1
–
–
–
–
–
0.0
0.5
–
–
–
923.6
–
–
–
–
–
0.0
2.2
–
–
–
–
–
598.5
594.3
–
–
–
–
–
0.0
2.0
–
–
–
596.3
Fraport Annual Report 2017
Consolidated Financial Statements / Consolidated Statement of Changes in Equity
139
Revenue reserves
Foreign currency
reserve
Financial instruments
Revenue reserves
(total)
Equity
attributable to
shareholders
of Fraport AG
Non-controlling
interests
Shareholders’ equity
(total)
2,136.2
–
0.2
–0.3
–
–
–0.1
–
–138.5
330.2
–40.9
–
–1.3
2,285.6
1,886.4
–
0.3
–1.3
–
–
–1.0
–
–124.6
375.4
–
2,136.2
58.9
–39.9
–7.6
–
–
–
–47.5
–
–
–
–
–
–
11.4
47.7
5.1
6.1
–
–
–
11.2
–
–
–
–
58.9
25.3
–
8.3
–
–1.9
17.0
23.4
–
–
–
–
–
–
48.7
–14.2
–
7.7
–
13.1
18.7
39.5
–
–
–
–
25.3
2,220.4
3,740.3
–39.9
0.9
–0.3
–1.9
17.0
–24.2
–
–138.5
330.2
–40.9
–
–1.3
2,345.7
1,919.9
5.1
14.1
–1.3
13.1
18.7
49.7
–
–124.6
375.4
–
2,220.4
–39.9
0.9
–0.3
–1.9
17.0
–24.2
2.5
–138.5
330.2
–40.9
–
–1.3
3,868.1
3,437.3
5.1
14.1
–1.3
13.1
18.7
49.7
2.5
–124.6
375.4
–
3,740.3
101.1
–7.3
–
–
–
0.3
–7.0
–
–9.1
29.5
–
47.1
–1.0
160.6
74.4
1.9
–
–
–
–
1.9
–
–5.7
24.9
5.6
101.1
3,841.4
–47.2
0.9
–0.3
–1.9
17.3
–31.2
2.5
–147.6
359.7
–40.9
47.1
–2.3
4,028.7
3,511.7
7.0
14.1
–1.3
13.1
18.7
51.6
2.5
–130.3
400.3
5.6
3,841.4
140
Consolidated Finanacial Statements / Consolidated Statement of Changes in Non-current Assets
Fraport Annual Report 2017
Consolidated Statement of Changes in Non-current Assets
(Note 18 to 22)
€ million
Acquisition/production costs
As at January 1, 2017
Foreign currency translation effects
Additions
Disposals
Reclassifications
As at December 31, 2017
Accumulated depreciation and amortization
As at January 1, 2017
Foreign currency translation effects
Additions
Impairment losses
Disposals
As at December 31, 2017
Residual carrying amounts
As at December 31, 2017
Acquisition/production costs
As at January 1, 2016
Foreign currency translation effects
Additions
Disposals
Reclassifications
As at December 31, 2016
Accumulated depreciation and amortization
As at January 1, 2016
Foreign currency translation effects
Additions
Impairment losses
Disposals
Reclassifications
As at December 31, 2016
Residual carrying amounts
As at December 31, 2016
Goodwill
Investments
in airport operating
projects
Other intangible
assets
132.3
0.0
0.0
0.0
0.0
132.3
113.0
0.0
0.0
0.0
0.0
113.0
19.3
132.3
0.0
0.0
0.0
0.0
132.3
90.6
0.0
0.0
22.4
0.0
0.0
113.0
762.6
–61.1
2,197.9
0.0
0.0
2,899.4
246.5
–24.4
56.2
0.0
0.0
278.3
2,621.1
715.4
15.0
32.2
0.0
0.0
762.6
214.5
6.1
25.9
0.0
0.0
0.0
246.5
268.7
–5.6
9.0
–5.1
5.3
272.3
122.0
–2.9
17.0
8.6
–4.8
139.9
132.4
261.4
1.3
6.2
–3.8
3.6
268.7
100.2
0.7
17.5
7.4
–3.8
122.0
19.3
516.1
146.7
Fraport Annual Report 2017
Consolidated Finanacial Statements / Consolidated Statement of Changes in Non-current Assets
141
Land, land rights,
and buildings,
including buildings
on leased lands
Technical equipment
and machinery
Other equipment,
operating, and
office equipment
Construction in
progress
Property, plant,
and equipment (total)
Investment
property
6,129.3
0.0
32.3
–9.8
–0.1
6,151.7
2,613.5
0.0
145.7
0.0
–8.3
2,750.9
3,400.8
6,039.0
0.0
52.0
–7.0
45.3
6,129.3
2,469.9
0.0
151.6
0.0
–5.6
–2.4
2,613.5
3,115.5
0.0
50.1
–72.8
31.8
3,124.6
1,547.5
0.0
94.8
0.0
–67.8
1,574.5
1,550.1
3,175.9
0.0
32.7
–52.2
–40.9
3,115.5
1,499.0
0.0
98.0
0.0
–49.7
0.2
1,547.5
453.3
–5.5
27.8
–20.5
4.4
459.5
281.9
–2.7
36.7
0.0
–19.0
296.9
162.6
425.6
1.1
39.9
–19.0
5.7
453.3
263.6
0.2
36.4
0.0
–18.3
0.0
281.9
700.1
0.0
176.9
–6.4
–61.5
809.1
1.1
0.0
0.0
0.0
0.0
1.1
808.0
638.5
0.0
142.3
–7.9
–72.8
700.1
1.1
0.0
0.0
0.0
0.0
0.0
1.1
10,398.2
–5.5
287.1
–109.5
–25.4
10,544.9
4,444.0
–2.7
277.2
0.0
–95.1
4,623.4
5,921.5
10,279.0
1.1
266.9
–86.1
–62.7
10,398.2
4,233.6
0.2
286.0
0.0
–73.6
–2.2
4,444.0
88.6
0.0
0.2
–1.8
19.6
106.6
9.0
0.0
1.2
0.0
0.0
10.2
96.4
82.3
0.0
0.7
–0.1
5.7
88.6
7.8
0.0
1.2
0.0
0.0
0.0
9.0
3,515.8
1,568.0
171.4
699.0
5,954.2
79.6
142
Consolidated Financial Statements / Segment Reporting
Fraport Annual Report 2017
Segment Reporting
(Note 41)
€ million
Revenue
Other income
Income with third parties
Inter-segment income
Total income
Segment result EBIT
Depreciation and amortization of segment assets
EBITDA
Share of result from companies accounted for using the equity
method
Income from investments
Carrying amounts of segment assets
Segment liabilities
Acquisition cost of additions to property, plant, and equipment, in-
vestments in airport operating projects, goodwill, intangible assets,
and investment property
Other considerable non-cash effective expenses
Investments in companies accounted for using the equity method
Aviation Retail & Real
Estate
Ground
Handling
International
Activities &
Services
Reconcilia-
tion
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
954.1
910.2
25.8
28.7
979.9
938.9
78.3
85.6
1,058.2
1,024.5
131.7
70.4
117.8
147.5
249.5
217.9
0.0
0.0
0.0
0.0
521.7
493.9
21.6
24.9
543.3
518.8
207.8
218.5
751.1
737.3
293.8
283.6
83.7
84.4
377.5
368.0
–9.7
–0.4
0.0
0.0
641.9
630.4
9.6
12.5
651.5
642.9
44.9
46.8
696.4
689.7
11.6
–5.5
39.8
40.2
51.4
34.7
3.1
1.1
0.1
0.0
817.1
551.7
18.6
302.1
835.7
853.8
389.2
381.0
1,224.9
1,234.8
205.9
345.2
118.9
88.3
324.8
433.5
37.5
–5.3
2.1
0.0
–
–
–
–
–
–
–720.2
–731.9
–720.2
–731.9
–
–
–
–
–
–
–
–
–
–
Group
2,934.8
2,586.2
75.6
368.2
3,010.4
2,954.4
–
–
3,010.4
2,954.4
643.0
693.7
360.2
360.4
1,003.2
1,054.1
30.9
–4.6
2.2
0.0
December 31,
2017
December 31,
2016
December 31,
2017
December 31,
2016
2017
3,669.0
2,319.6
586.9
4,210.5
46.4
10,832.4
3,807.5
2,412.8
618.7
1,984.8
49.0
8,872.8
2,498.2
1,480.6
385.4
2,132.3
307.2
6,803.7
2,405.9
156.3
1,378.0
64.9
354.8
32.3
604.4
2,240.7
288.3
–
5,031.4
2,494.2
2016
126.5
2017
2016
December 31,
2017
December 31,
2016
66.8
93.4
0.0
0.0
62.4
44.7
53.2
23.6
3.4
36.9
12.4
15.3
19.3
17.7
80.2
21.1
8.9
225.2
188.6
–
–
–
–
–
306.0
145.0
170.8
268.1
209.7
Fraport Annual Report 2017
Consolidated Financial Statements / Segment Reporting
143
Geographical information
€ million
Revenue
Other income
Income with third parties
Carrying amounts of segment assets
Germany
Rest of Eu-
rope
2017
2016
2017
2016
2017
2016
2,162.2
2,084.0
69.9
111.2
2,232.1
2,195.2
356.6
108.7
4.2
8.8
360.8
117.5
Asia
24.9
21.9
0.2
247.4
25.1
269.3
Rest of
World
Reconcilia-
tion
391.1
371.6
1.3
0.8
392.4
372.4
0.0
0.0
0.0
0.0
–
–
Group
2,934.8
2,586.2
75.6
368.2
3,010.4
2,954.4
December 31,
2017
December 31,
2016
6,793.9
2,759.9
334.6
897.6
46.4
10,832.4
7,065.8
879.6
309.8
568.6
49.0
8,872.8
Acquisition cost of additions to property, plant, and equipment,
investments in airport operating projects, intangible assets, and
investment property
2017
2016
282.6
1,780.5
259.1
25.2
0.0
0.0
431.1
21.7
–
–
2,494.2
306.0
144
Group Notes / Notes to the Consolidation and Accounting Policies
Fraport Annual Report 2017
Group Notes for the 2017 Fiscal Year
Notes to the Consolidation and Accounting Policies
1 Basis for the Preparation of the Consolidated Financial Statements
Fraport AG Frankfurt Airport Services Worldwide, Frankfurt/Main (hereinafter: Fraport AG), is a global airport operator and its
main business focus is the operation of Frankfurt Main airport, one of Europe’s most important air transport hubs. Fraport AG is
headquartered at Frankfurt Airport. Fraport AG is registered in the Frankfurt am Main District Court, Department B, under number
7042.
Fraport AG has prepared its consolidated financial statements as at December 31, 2017 in accordance with the standards issued
by the International Accounting Standards Board (IASB).
We have applied the International Financial Reporting Standards (IFRS) for the consolidated financial statements and the inter-
pretations about them issued by the International Financial Reporting Committee (IFRS, IC) as adopted in the European Union
(EU), in force on the balance sheet date, completely and without any restriction in accounting, measurement, and disclosure in
the 2017 consolidated financial statements. Pursuant to Section 315e(1) of the German Commercial Code (HGB), these notes to
the financial statements contain the supplementary disclosures according to Sections 313, 314 HGB.
As a capital market-oriented parent company of the Fraport Group, Fraport AG must prepare its consolidated financial statements
in accordance with IFRS, pursuant to Regulation (EC) No 1606/2002 of the European Parliament and the Council dated July 19,
2002 (new version dated April 9, 2008) on the application of international accounting standards.
The consolidated income statement is prepared according to the nature of expenditure method.
The consolidated financial statements are prepared in euros (€). All figures are in € million unless stated otherwise.
There is no need to adjust the previous year’s figures.
The business activities and the organization of the Fraport Group are presented in the management report.
The consolidated financial statements of Fraport AG for the 2017 fiscal year were approved for publication by the Executive Board
on February 28, 2018. The Supervisory Board approved the consolidated financial statements in its meeting on March 15, 2018.
Result for 2017 in comparison with the result for 2016 adjusted for the impact from the Manila project:
The earnings figures from the previous year cannot be compared to the earnings figures of the 2017 fiscal year due to the non-
recurring effects from the Manila project. The adjusted results are compared in the following table:
Result 2017 compared with the result 2016 adjusted for the compensation payment from the Manila project
€ million
Other operating income
Other operating expenses
EBITDA
EBIT/Operating result
Other financial result
EBT/Result from ordinary operations
Taxes on income
Group result
Consolidated
financial
statements 2017
Consolidated
financial
statements 2016
38.9
–193.9
1,003.2
643.0
–10.3
506.1
–146.4
359.7
332.9
–211.7
1,054.1
693.7
–0.8
581.4
–181.1
400.3
Consolidated
financial
statements 2016
without
Manila effect
91.7
–169.3
855.3
494.9
8.4
391.8
–112.9
278.9
Fraport Annual Report 2017
Group Notes / Notes to the Consolidation and Accounting Policies
145
2 Companies included in the Consolidation and Balance Sheet Date
Companies included in the consolidation and balance sheet date
Fraport AG and all subsidiaries are included in the consolidated financial statements in full. Joint ventures and associated com-
panies are accounted for in the consolidated financial statements using the equity method.
Companies controlled by Fraport AG are considered to be subsidiaries. A company is controlled by Fraport AG if Fraport AG holds
decision-making power on the basis of voting or other rights allowing it to determine the significant activities of the affiliated
company, participates in positive or negative variable returns from the affiliated company, and is able to affect these returns
through its decision-making power.
Inclusion in the consolidated financial statements commences on the date when control is obtained.
A joint arrangement applies if the Fraport Group makes joint decisions on operations on the basis of a contractual agreement with
third parties. Joint management is exercised if decisions on significant activities require the unanimous agreement of all parties.
A joint arrangement is either a joint operation or a joint venture.
For all joint arrangements in the Fraport Group, the partners have a share in the net assets of a jointly managed, legally inde-
pendent company; these are therefore joint ventures.
Associated companies are Fraport investments in which Fraport AG is able to exercise major influence on financial and business
policies.
The annual financial statements of the companies included in the consolidated financial statements are prepared on the basis of
shared accounting and valuation principles.
The fiscal year of Fraport AG and all consolidated companies is the calendar year.
The consolidated financial statements of Fraport AG are dominated by the parent company. The companies included in the con-
solidated financial statements changed as follows during the 2017 fiscal year:
Companies included in consolidation
Germany Other countries
Total
Fraport AG
Fully consolidated subsidiaries
December 31, 2016
Additions
Disposals
December 31, 2017
Companies accounted for using the equity method
Joint ventures
December 31, 2016
Additions
Disposals
December 31, 2017
Associated companies
December 31, 2016
Additions
Disposals
December 31, 2017
Companies consolidated including companies accounted for using the equity method on December 31, 2016
Companies consolidated including companies accounted for using the equity method on December 31, 2017
1
26
0
0
26
8
2
0
10
4
0
0
4
39
41
0
24
3
0
27
4
0
0
4
3
0
–1
2
31
33
1
50
3
0
53
12
2
0
14
7
0
–1
6
70
74
146
Group Notes / Notes to the Consolidation and Accounting Policies
Fraport Annual Report 2017
Additions to the fully consolidated subsidiaries related to Fraport Brasil S.A. Aeroporto de Fortaleza, Fortaleza, Brazil, Fraport
Brasil S.A. Aeroporto de Porto Alegre, Porto Alegre, Brazil, and Fraport New York Inc., New York, USA as well as to the joint
ventures Frankfurt Airport Retail Verwaltungs GmbH, Frankfurt/Main and Frankfurt Airport Retail GmbH & Co. KG, Hamburg. The
disposal of associated companies related to the sale of Aerodrom Portoroz d.o.o., Secovlje, Slovenia. The effects of the decon-
solidation of Aerodrom Portoroz for the Fraport Group were not substantial.
At the end of May 2017, Fraport AG acquired all shares in two companies formed in connection with the acquisition of the con-
cession for the management and operation of the airports in Fortaleza and Porto Alegre in Brazil: Fraport Brasil S.A. Aeroporto
de Porto Alegre and Fraport Brasil S.A. Aeroporto de Fortaleza. The companies took over operation of the airports on January 2,
2018. Further information on the concession agreements is contained in note 48. The newly founded companies were not yet
active in fiscal year 2017 and therefore had no substantial effect on the results of operations of the Group. The impact of the initial
consolidations on the financial situation is shown in the following table.
Disclosure of interests in subsidiaries
€ million
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Shareholders’ equity/net assets
Fraport Brasil S.A. Aeroporto
de Porto Alegre
December 31, 2017
Fraport Brasil S.A. Aeroporto
de Fortaleza
December 31, 2017
88.4
15.7
10.0
3.2
90.9
251.4
12.1
142.4
2.9
118.2
On January 27, 2017, the Group company Fraport USA established its subsidiary company Fraport New York, Inc. The company
will operate Food & Beverage as well as retail space in Terminal 5 of the John F. Kennedy International Airport in New York.
In order to develop the duty-free business at the Frankfurt site, Fraport invested in two joint ventures in January 2017, purchasing
a 50% capital share in each company, Frankfurt Airport Retail GmbH & Co. KG, Hamburg (hereinafter: FAR), and Frankfurt Airport
Retail Verwaltungs GmbH, Frankfurt/Main. The companies have been included in the consolidated financial statements since
January 1, 2017 as joint ventures accounted for using the equity method. The fair value of the net assets at the time of initial
consolidation amounted to €14.0 million.
Fraport AG holds a 52% capital share of the company N*ICE Aircraft Services & Support GmbH, Frankfurt am Main. The company
is included in the consolidated financial statements as a joint venture according to the equity method due to contractually agreed
joint management.
Operational services GmbH & Co. KG, Frankfurt/Main, in which Fraport holds 50% of the shares, is recognized according to the
equity method as an associated company based on the contractual arrangements.
The full list of the shareholding pursuant to Section 313 (2) HGB is shown under note 56 of the Notes to the consolidated financial
statements.
Disclosure of interests in subsidiaries
The following table shows the summarized financial information for the Group companies Lima Airport Partners S.R.L, Fraport
Twin Star Airport Management AD, and the two Greek companies, Fraport Regional Airports of Greece A S.A. (hereinafter Fraport
Greece A) and Fraport Regional Airports of Greece B S.A. (hereinafter Fraport Greece B). The Fraport Group holds substantial
non-controlling interests in these companies. Lima Airport Partners S.R.L., Lima, operates Lima International Airport in Peru.
Fraport Twin Star Airport Management AD, Varna, operates Varna and Burgas airports in Bulgaria. The two Group companies in
Greece, Fraport Regional Airports of Greece A S.A., Athens, and Fraport Regional Airports of Greece B S.A., Athens, each
operate seven airports in Greece. Further information on the companies is contained in note 48.
Fraport Annual Report 2017
Group Notes / Notes to the Consolidation and Accounting Policies
147
Disclosure of interests in subsidiaries
€ million
Fraport Regional Airports of
Greece A S.A.
December 31,
2016
December 31,
2017
Fraport Regional Airports of
Greece B S.A.
December 31,
2016
December 31,
2017
Lima Airport Partners S.R.L.
December 31,
2017
December 31,
2016
Fraport Twin Star Airport
Management AD
December 31,
2016
December 31,
2017
Participation quota
of non-controlling interests in %
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Shareholders’ equity/net assets
Carrying amount, non-controlling interests
Revenue
EBITDA
Result after taxes
Other result
Currency translation differences
Comprehensive income
Proportion of non-controlling interests in
comprehensive income
Cash flow from operating activities
Cash flow used in investing activities
thereof investments in airport operating
projects
thereof in infrastructure
Cash flow used in financing activities
Change in cash and cash equivalents
Cash and cash equivalents as at January 1
Restricted cash
Foreign currency translation effects
on cash and cash equivalents
Cash and cash equivalents
as at December 31
Dividends to non-controlling interests
26.60
882.7
100.8
857.6
40.3
85.6
22.8
2017
129.7
67.2
13.3
0.8
0.0
14.1
3.8
62.7
–651.7
–609.0
–42.7
662.9
73.9
2.1
–29.7
0.0
46.3
0.0
28.00
5.6
5.4
0.0
3.1
7.9
2.2
2016
0.0
–2.8
–2.0
0.0
0.0
–2.0
–0.6
–1.7
–6.1
0.0
–6.1
9.9
2.1
0.0
0.0
0.0
2.1
0.0
26.60
902.9
88.4
832.9
38.7
119.7
31.8
2017
105.2
50.2
1.1
0.5
0.0
1.6
0.4
54.4
–663.8
–625.0
–38.8
676.7
67.3
2.2
–26.1
0.0
43.4
0.0
28.00
5.6
5.4
0.0
3.1
7.9
2.2
2016
0.0
–2.8
–2.0
0.0
0.0
–2.0
–0.6
–1.8
–5.9
0.0
–5.9
9.9
2.2
0.0
0.0
0.0
2.2
0.0
29.99
354.1
111.5
186.7
69.8
209.1
62.7
2017
325.6
120.0
54.4
0.0
–24.5
29.9
9.0
76.2
–19.3
0.0
–19.3
–98.5
–41.6
155.6
0.0
–18.5
95.5
2.5
29.99
372.7
172.0
268.2
89.3
187.2
56.1
2016
305.7
110.8
53.5
0.0
6.3
59.8
17.9
71.8
–19.7
0.0
–19.7
–11.8
40.3
111.8
0.0
3.5
155.6
0.0
40.00
190.2
22.4
79.3
28.8
104.5
41.8
40.00
192.5
28.2
85.8
37.3
97.6
39.1
2017
2016
67.5
39.6
20.8
0.0
0.0
20.8
8.3
31.1
–9.2
0.0
–9.2
–26.2
–4.3
22.1
0.0
0.0
17.8
5.6
63.8
40.8
21.3
0.0
0.0
21.3
8.5
31.0
–6.1
0.0
–6.1
–23.3
1.6
20.5
0.0
0.0
22.1
4.4
All subsidiaries are fully consolidated in the Fraport consolidated financial statements. The capital shares in the subsidiaries
directly held by Fraport AG as a parent company do not differ from the proportion of voting rights held. There are no preferred
shares in the subsidiaries.
3 Consolidation Principles
Capital consolidation of all business combinations follows the purchase method.
All identifiable acquired assets and the acquired liabilities, including contingent liabilities, are recorded at fair value on the acqui-
sition date. The acquisition costs for company acquisitions correspond to the fair value of the transferred assets and liabilities.
Incidental acquisition costs are recorded as expenses as they are incurred. Conditional purchase price payments are recorded at
fair value on the acquisition date. Subsequent changes in the fair value of a conditional consideration, which is deemed to be an
asset or a liability, will be recognized either through profit or loss or as a change in other income. Non-controlling interests are
valued at fair value or the corresponding proportion of the identifiable net assets of the acquired company. In the case of step-by-
step company acquisitions, the shares already held in the acquired company are revalued through profit or loss at fair value on
the date that control is obtained.
148
Group Notes / Notes to the Consolidation and Accounting Policies
Fraport Annual Report 2017
Goodwill is recorded insofar as the sum of the consideration that is transferred, the amount of all non-controlling interests in the
acquired company and any equity that was previously held and revalued on the acquisition date is higher than the balance of the
acquired and revalued identifiable assets and the revalued acquired liabilities. If the comparison results in a lower amount, a net
income on acquisition at a price below the fair value is recorded after the assigned values are reviewed.
Joint ventures and associated companies are accounted for in the consolidated financial statements using the equity method.
Initial measurements of companies accounted for using the equity method are carried out at fair value at the time of acquisition,
similarly to capital consolidation for subsidiaries. Subsequent changes in the shareholders’ equity and the updating of the differ-
ence from initial valuation change the amount accounted for at equity.
Intercompany profits and losses on trade accounts payable between companies included in the consolidated financial statements
were minimal.
Loans, accounts receivable, and liabilities, contingencies and other contingent liabilities between companies included in the con-
solidated financial statements, internal expenses, and income, as well as income from Group investments are eliminated.
Currency translation
Annual financial statements of companies outside Germany denominated in foreign currencies are translated on the basis of the
functional currency concept in accordance with IAS 21. The assets and liabilities of the consolidated companies are translated at
the exchange rate on the balance sheet date and shareholders’ equity at the historical exchange rate, whereas, for the purpose
of simplification, the expenses and income are translated at average exchange rates, since the companies are financially, eco-
nomically, and organizationally independent. Foreign currency translation differences are included directly in equity without affect-
ing profit or loss.
The following material exchange rates were used for the currency translation:
Exchange rates
Unit/Currency in €
1 US Dollar (US-$)
1 Turkish New Lira (TRY)
1 Renminbi Yuan (CNY)
1 Hong Kong Dollar (HKD)
1 Peruvian Nuevo Sol (PEN)
100 Russian Rubles (RUB)
1 Brazilian Real (BRL)
Exchange rate
December 31, 2017
Average exchange rate
2017
Exchange rate
December 31, 2016
Average exchange rate
2016
0.8342
0.2205
0.1280
0.1067
0.2576
1.4423
0.2518
0.8852
0.2427
0.1311
0.1136
0.2715
1.5166
0.2774
0.9470
0.2683
0.1359
0.1221
0.2820
1.5463
–
0.9034
0.2991
0.1360
0.1164
0.2677
1.3487
–
Business transactions in foreign currencies are accounted at the exchange rate on the date of the business transaction. Meas-
urement of the resulting assets and liabilities that are nominally bound in the foreign currency as at the balance sheet date takes
place at the exchange rate as at the balance sheet date. Translation differences are generally recorded through profit or loss.
4 Accounting Principles
Uniform accounting measurement policies
The financial statements of the Fraport Group are based on accounting and measurement policies that are applied consistently
throughout the Group.
The consolidated financial statements are drafted on the basis of historic acquisition and production costs. Particular exceptions
include financial assets available for sale and derivative financial instruments.
Fraport Annual Report 2017
Group Notes / Notes to the Consolidation and Accounting Policies
149
The following overview contains a summary of the valuation methods for items in the statement of financial position.
Measurement policies by financial position item
Financial position item
Measurement policy
Assets
Goodwill
Investments in airport operating projects
Other intangible assets with determinable useful lives
Property, plant, and equipment
Investment property
Other financial assets
Trade accounts receivable
Other receivables and financial assets
Short-term securities
Others
Inventories
Cash and cash equivalents
Derivative financial instruments
Liabilities
Financial liabilities
Trade accounts payable
Other liabilities
Provisions for pensions and similar obligations
Other provisions
Derivative financial instruments
Accumulated impairment (IAS 36)
Amortized costs
Amortized costs
Amortized costs
Amortized costs
Categories IAS 39 (Note 40)
Amortized costs
Fair value
Amortized costs
Lower of acquisition or production cost and net realizable value
Nominal value
Fair value
Amortized costs
Amortized costs
Amortized costs
Projected unit credit method
Present value or amount required to settle the obligation
Fair value
Recognition of income and expenses
Revenue and other income are recognized in accordance with IAS 18 when the goods have been delivered or the service ren-
dered, when it is reasonably probable that an economic benefit will be received, and when this benefit can be quantified reliably.
In addition, the significant opportunities and risks must have been transferred to the buyer.
Income and expenses from the same transactions and/or events are recognized in the same period.
Traffic charges for the provision of the airport infrastructure are divided into those subject to regulation (according to Section 19b
(1) of the German Air Traffic Act [LuftVG]), which include, among others, landing and take-off charges, including noise components
and emission charges, parking charges, passenger and security charges, and other charges not subject to regulation, such as
ground handling services and ground handling infrastructure.
In addition, the Fraport Group mainly generates revenue from revenue-based payments, renting, parking, sale of land, and security
services. Revenue from renting is recorded using the straight-line method over the term of the lease. Revenue from revenue-
based payments is recorded appropriate to the period based on the revenue generated. Revenue from sales of land is realized
after transfer of the opportunities and risks.
In the context of the airport operating projects outside of Germany (see also note 48), income and expenses from the operation
of airport infrastructure and the provision of construction and expansion services are generated.
Revenue from the operation of airport infrastructure is recognized in accordance with IAS 18 when the services have been ren-
dered, when it is reasonably probable that an economic benefit will be received, and when this benefit can be quantified reliably.
Income and expenses from the provision of construction and expansion services are recorded pursuant to IAS 11. The order costs
are expensed as incurred pursuant to IAS 11.32, since the result of production orders cannot be estimated reliably. Proceeds
from production are recorded in the amount of the incurred order costs expected to be recovered.
Interest income is recorded using the effective interest rate method.
150
Group Notes / Notes to the Consolidation and Accounting Policies
Fraport Annual Report 2017
Goodwill
After the initial recognition of goodwill acquired in the course of a business merger, it is measured at acquisition costs less any
cumulative impairment losses.
For the purpose of impairment testing, goodwill acquired in the course of a business merger is assigned to the cash-generating
units of the Group since the acquisition date. Goodwill impairment testing is performed by comparing the recoverable amount of
a cash-generating unit to its carrying amount, including goodwill. The recoverable amount corresponds to the higher amount of
the fair value less costs to sell and the value in use. Essentially, in the Fraport Group the value in use based on a company
valuation model (discounted cash flow method) is used to calculate the recoverable amount. All goodwill items are tested for
impairment at least once a year in December in accordance with IAS 36.88 – 99. In the event of an impairment, an impairment
loss is recognized. Goodwill is not written up when the reasons for impairment are eliminated. Goodwill is not subject to regular
depreciation and amortization.
Investments in airport operating projects
To allow for better transparency, investments in airport operating projects are presented separately. These consist of concessions
for the operation of airports in Greece, Varna and Burgas (Bulgaria), Lima (Peru), and Fortaleza and Porto Alegre (Brazil) acquired
within the scope of service concession agreements (see also note 48). The concession agreements for the operation of the airports
fall under the application of IFRIC 12.17 and are recognized according to the intangible asset model, since Fraport receives the
right in each case to impose a charge on airport users in exchange for the obligation to pay concession fees and provide con-
struction and expansion services. The contractual obligations to pay concession fees that are not variable, but contractually fixed
in amount, are recorded as financial liabilities. These liabilities are initially recognized at fair value using a risk-adjusted discount
rate. Airport operation rights received as consideration are recorded as intangible assets at the same amount and reported under
investments in airport operating projects. The rights received as consideration for construction and expansion services are recog-
nized at the cost of production for the period in which the production costs are incurred. Revenue and expenses from construction
and expansion services are generally recorded pursuant to IFRIC 12.14 and in accordance with IAS 11. Borrowing costs are
capitalized as part of the costs of acquisition if the requirements (see “Borrowing costs”) are fulfilled. Provisions for maintenance
measures are formed if maintenance obligations of specified amounts arise from the concession agreements. Costs for ongoing,
scheduled maintenance measures are therefore recognized as current expenses of the period.
The recognized financial liabilities are subsequently measured at amortized cost using the effective interest method. Subsequent
measurement of the capitalized rights is at the cost of acquisition or production less cumulative regular depreciation and amorti-
zation over the term of the concessions.
Impairment losses are recognized in accordance with IAS 36, where necessary.
Other intangible assets
Acquired intangible assets (IAS 38) are recognized at acquisition cost. Their useful life is limited. They are amortized over their
useful lives using straight-line depreciation and amortization. Where necessary, impairment losses are recognized in accordance
with IAS 36. If the recoverable amount of the asset later exceeds the carrying amount after an impairment loss has been recog-
nized, the asset is written up to a maximum of the recoverable amount. The write-up through profit or loss is limited to the amortized
carrying amount that would have resulted if no impairment losses had been recognized in the past.
Development costs for internally generated intangible assets are capitalized at manufacturing cost when it is probable that the
manufacture of these assets will generate future economic benefits for the company and the costs can be measured reliably. The
manufacturing costs cover all costs directly attributable to the manufacturing process. If the conditions for capitalization are not
met, the expenses are recognized in the income statement in the year in which they are incurred. Internally generated intangible
assets are amortized over their useful lives using the straight-line method.
Borrowing costs of other intangible assets that constitute qualifying assets are recognized (see “Borrowing costs”).
Fraport Annual Report 2017
Group Notes / Notes to the Consolidation and Accounting Policies
151
Property, plant, and equipment
Property, plant, and equipment (IAS 16) are recognized at the cost of acquisition or production less straight-line depreciation and
amortization and any impairment losses pursuant to IAS 36, where applicable. If the recoverable amount of the asset later exceeds
the carrying amount after an impairment loss has been recognized pursuant to IAS 36, the asset is written up to a maximum of
the recoverable amount. The write-up through profit or loss is limited to the amortized carrying amount that would have resulted
if no impairment loss had been recognized in the past. Subsequent acquisition costs are capitalized. Production costs essentially
include all direct costs including appropriate overheads. Borrowing costs of property, plant, and equipment that constitute qualify-
ing assets are recognized (see “Borrowing costs”).
Each part of an item of property, plant, and equipment with an acquisition cost that is significant in relation to the total value of the
item is measured and depreciated separately with regard to its useful life and the appropriate depreciation method.
Government grants and third-party grants related to assets are included in liabilities and are released straight-line over the useful
life of the asset for which the grant has been given. Grants related to income are included as other operating income through profit
or loss (IAS 20).
Investment property
Investment property (IAS 40) includes property held to earn long-term lease revenue or capital appreciation, which is not owner-
occupied; it also consists of land held for a currently undetermined future use.
If land as yet held for an undetermined use is now defined as being held for sale and development has begun, it is transferred to
inventories; if it is intended for owner-occupation, it is transferred to property, plant, and equipment.
Investment property is measured initially at the cost of acquisition or production. Subsequent measurement is at the cost of ac-
quisition or production less regular straight-line depreciation and amortization and impairment losses according to IAS 36 where
applicable. Borrowing costs of investment properties that constitute qualifying assets are capitalized (see “Borrowing costs”).
Borrowing costs
Borrowing costs (IAS 23) that relate to the acquisition, construction, or production of a qualifying asset are required to be capital-
ized as part of the acquisition/production cost of such assets. Due to the scope of Fraport’s capital expenditure, qualifying assets
are determined on the basis of planned investment measures. If the volume of the planned measures at Fraport AG exceeds €25
million and if the construction period is more than one year, all assets produced as part of the measure are recognized as qualifying
assets. Interest, financing charges in respect of finance leases, and currency differences are included in borrowing costs to the
extent that they are regarded as an adjustment to interest costs. Each Group company defines its own individual criteria for what
constitutes the presence of qualifying assets.
Regular depreciation and amortization
Regular depreciation and amortization is carried out on the basis of estimated useful technical and economic life. It takes place
fundamentally on a Group-wide basis according to the straight-line method. The data on expected useful life also includes the
useful lifespans of individual components.
152
Group Notes / Notes to the Consolidation and Accounting Policies
Fraport Annual Report 2017
The following useful lifespans are taken as a basis:
Regular depreciation and amortization
In years
Investments in airport operating projects
Other concession and operator rights
Software and other intangible assets
Buildings (structural sections)
Technical buildings
Building equipment
Ground equipment
Flight operating areas
Takeoff/landing runways
Aprons
Taxiway bridges
Taxiways
Other technical equipment and machinery
Vehicles (including special vehicles)
Other equipment, operating, and office equipment
25 – 50
8 – 39
1 – 30
7 – 80
20 – 40
12 – 38
5 – 99
7 – 99
20 – 99
80
20 – 99
3 – 33
3 – 25
2 – 25
The expected useful life of investment property corresponds to the expected useful life of the property, which is part of property,
plant, and equipment.
Impairment losses pursuant to IAS 36
Impairment losses on assets are recognized pursuant to IAS 36. Assets are tested for impairment if there are indications of an
impairment loss. An impairment test is carried out annually for existing goodwill. Impairment losses are recorded if the recoverable
amount of the asset has fallen below its carrying amount. The recoverable amount is the higher of an asset’s fair value less costs
to sell and its value in use. The value in use is the present value of the estimated future cash inflows and outflows from the use
and subsequent disposal of the asset.
Since it is not generally possible in the Fraport Group to allocate cash flows to individual assets, cash-generating units are formed
and the existing goodwill is allocated to them. A cash-generating unit is defined as the smallest identifiable group of assets that
generates separate cash inflows and outflows.
Regardless of indicators for possible impairment losses, assets are subject to an annual impairment test pursuant to IAS 36.
Generally, the value in use is calculated as the recoverable amount. The value in use is determined by the entity through applica-
tion of the discounted cash flow method.
Determination of the future cash flows of the cash-generating units is based on the planning figures. The value in use is generally
determined based on the future cash flows estimated on the basis of the current planning figures for the years between 2018 to
2022 as approved by the Executive Board and in effect at the time the impairment tests are made (in December of the year under
review), and on the basis of the current long-term plans up to 2025 or over the respective contractual periods in the case of
investments in airport operating projects and other concession and operator rights. These forecasts are based on past experience
and the expected market performance. A growth rate of between 1.0% and 2.0% (previous year: 1.0% to 2.0%) based on the
planning assumptions is taken into account in the perpetual annuity. The discount factor was a country-specific, weighted average
cost of capital (WACC) after taxes of between 4.1% and 11.93% (previous year: 5.1% to 9.9%).
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Leases
Agreements that transfer the right to use a specific asset for a specified period of time in exchange for compensation are deemed
to be leases. Fraport is both a lessor and a lessee. A decision as to whether economic ownership is assigned to the lessor
(operating lease) or the lessee (finance lease) is made based on which party bears the opportunities and risks associated with
the respective leased asset.
Finance lease
If economic ownership can be attributed to the Fraport Group as lessee, the lease is capitalized at the inception of the lease at
the present value of the minimum lease payments plus any incidental costs that are paid or at the fair value of the lease object if
this value is lower. This asset is depreciated straight-line over its useful life or the lease term, if this is shorter. Impairment losses
are recorded against the carrying amount of the capitalized leased asset. If economic ownership cannot be attributed to the Fraport
Group as the lessor, a receivable equivalent to the present value of the lease payments is recognized.
Operating lease
If economic ownership of the leased assets remains with the lessor and Fraport AG assumes the role of the lessee, lease pay-
ments are recognized on a straight-line basis over the lease term. If Fraport assumes the role of the lessor, leased assets are
capitalized at the cost of acquisition or production and regularly depreciated and amortized on a straight-line basis. Lease revenue
is generally recognized on a linear straight-line over the lease term.
Investments in companies accounted for using the equity method
Investments in joint ventures and associated companies are recognized at the pro rata share of equity, including goodwill. Impair-
ment losses are recorded if the recoverable amount is lower than the carrying amount. The investments are tested for impairment
annually.
Other financial assets
Other financial assets include securities, loans with a remaining term of more than one year, and other investments. Other financial
assets are recognized at fair value on the settlement date, i.e. at the time the asset is created or transferred, plus transaction
costs. Non-current low-interest or interest-free loans are recognized at their present value.
The subsequent valuation of financial assets depends on the respective category pursuant to IAS 39 (see note 40).
Securities are allocated to the “available for sale” category. Securities exclusively comprise debt instruments. Subsequent meas-
urement is at fair value, taking into account the effective interest method, where changes in value are included directly in share-
holders’ equity without affecting profit or loss.
Loans are assigned to the “loans and receivables” category. These financial instruments are subsequently measured at amortized
cost of acquisition using the effective interest method.
Other investments are allocated to the “available for sale” category. They are recognized at fair value as long as they can be
reliably calculated, and the gains or losses are included directly in shareholders’ equity without affecting profit or loss.
When deciding whether to dispose of a financial asset as a result of a contractual amendment, quantitative and qualitative criteria
are taken into account.
Other receivables and financial assets
Other receivables and financial assets mainly consist of trade accounts receivable, receivables from banks, other financial and
non-financial receivables, as well as marketable securities with a remaining term of less than one year. These assets are recog-
nized on the settlement date, i.e. at the time the asset is created or economic ownership is transferred, at fair value plus transaction
costs.
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Trade accounts receivable, accounts receivable from banks, and all other financial receivables with fixed or ascertainable pay-
ments that are not listed in an active market are assigned to the “loans and receivables” category. Subsequent measurement is
carried out at amortized cost of acquisition, based on the effective interest method. Receivables in foreign currencies are trans-
lated at the exchange rate on the balance sheet date.
Securities are allocated to the “available for sale” category. Securities largely comprise debt instruments. The financial debt in-
struments are measured at fair value, according to the effective interest method. Changes of value are included directly in share-
holders’ equity without affecting profit or loss.
Impairment losses of financial assets
On each balance sheet date, the carrying amounts of financial assets which are not measured at fair value through profit or loss
are assessed to see whether there is any objective evidence (such as considerable financial difficulties of the debtor, high proba-
bility of insolvency proceedings against the debtor, or a permanent decline of the fair value below amortized cost) that the asset
may be impaired.
In general, impairment losses are recognized through profit or loss by directly reducing the carrying amount of the financial asset.
The impairment loss of trade accounts receivable is recognized in an item-by-item allowance account through profit or loss.
If there is an indication in subsequent periods that the reasons for an impairment loss no longer exist, a write-up is recognized
through profit or loss. If an already impaired receivable is designated as non-recoverable, the asset is derecognized.
Impairments of equity instruments in the “available for sale” category are recognized through profit or loss if there is a prolonged
decline in fair value below cost of acquisition. If in subsequent periods, as a result of events that took place after the date of
recognition of the impairment, the fair value has objectively increased, reversals of impairment losses must be carried out in the
corresponding amount and recognized directly in equity.
Inventories
Inventories include work-in-process, raw materials, consumables, supplies, and property held for sale within the ordinary course
of business.
Work-in-process, raw materials, consumables, and supplies are measured at the lower of acquisition or production cost or net
realizable value. Acquisition or production costs are generally calculated using the average cost method. Production costs include
direct costs and adequate overheads.
Property held for sale within the ordinary course of business is also measured at the lower of acquisition or production cost or net
realizable value.
The subsequent production cost required for land development is estimated for the entire marketable land area on the basis of
specific cost unit rates for individual development measures. Depending on the land sales recognized in the respective year under
review, the development costs are allocated on a pro rata basis to the remaining land area to be sold. Net realizable value is the
estimated selling price less the costs incurred until the time of sale, and discounted over the planned selling period.
External reports on the fair value of the land being sold, as well as information about previous land sales, form the basis for the
calculation of the estimated selling price.
Where the inventories constitute qualifying assets, the borrowing costs are capitalized.
If a write-down made in previous periods is no longer necessary, a write-up is recognized.
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155
Cash and cash equivalents
Cash and cash equivalents basically include cash, cash accounts, and short-term cash deposits (including restricted cash) with
banks maturing in three months or less. Cash deposits with banks with a maturity of more than three months from the time of
acquisition are recorded in this item if their values do not fluctuate significantly and they can be liquidated at any time without
deduction for risk. Cash and cash equivalents are recognized at nominal value. Cash in foreign currencies is translated at the
exchange rate on the balance sheet date.
Non-current assets held for sale
Non-current assets held for sale are recognized at either the carrying amount or at fair value less costs to sell, whichever is the
lower amount.
Accounting of taxes on income
Taxes on income are recognized using the liability method pursuant to IAS 12. All tax expenses and refunds directly related to
income are recorded as taxes on income. These also include withholding taxes, penalties, and interest on retroactively assessed
taxes from the date it appears probable that a reduction of taxes will be denied.
Current taxes are recognized on the date when the liability for taxes on income is incurred.
Deferred taxes are recognized pursuant to IAS 12 using the liability method based on temporary differences on a case by case
basis. Deferred taxes are recognized for temporary differences between the IFRS and tax financial positions of the single entities,
and differences arising from unused, utilizable loss and interest carry-forwards and consolidation transactions. The recognition of
goodwill that is not deductible for tax purposes does not lead to deferred taxes.
If the carrying amount of an asset in the IFRS financial position exceeds its tax base (e.g. non-current assets depreciated on a
straight-line basis), and if the difference is temporary, a deferred tax liability is recognized. Pursuant to the IFRS, deferred tax
assets are recognized from financial position differences and for carry-forwards of unused tax losses, to the extent that it is
probable that taxable profit will be available, against which the unused tax losses and unused tax credits can be utilized.
Deferred taxes are calculated at future tax rates insofar as these have already been legally established and/or the legislative
process is largely completed. Changes in deferred taxes on the financial position generally lead to deferred tax income or expense.
When transactions resulting in a change to deferred taxes are recorded directly in shareholders’ equity without affecting profit or
loss, the change to deferred taxes is also included directly in shareholders’ equity without affecting profit or loss.
No deferred tax liabilities are recognized for temporary differences in connection with shares in subsidiaries if Fraport can control
the timing of the reversal and it is not expected that these differences will reverse in the foreseeable future.
Provisions for pensions and similar obligations
The provisions for pensions relate to defined benefit plans and have been calculated in accordance with IAS 19 under the appli-
cation of actuarial methods and an interest rate of 1.60% (previous year: 1.70%). For the calculation of the interest expense from
the defined benefit plans and the income from plan assets, the same interest rate is used as a basis.
Re-measurements resulting from the change in the interest rate or from the difference between actual and computed income from
plan assets, for example, are recognized in other comprehensive income (OCI) as non-reclassifiable.
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The present value of the defined benefit obligation (DBO) is calculated annually by an independent actuary using the projected
unit credit method. The calculation takes place by discounting the future estimated cash outflows with the interest rate from
industry bonds of the highest creditworthiness. The industry bonds are denominated in the currency of the distribution amounts
and show the relevant maturities of the pension obligations. If benefit claims from the defined benefit plans are covered by plan
assets in the form of reinsurance, the fair value of the plan assets is netted with the DBO. Benefit claims that are not covered by
plan assets are recognized as pension provisions.
As in the previous year, the calculations did not include salary increases for the active members of the Executive Board. For
former members of the Executive Board pensions are valued in accordance with the “Gesetz über die Anpassung von Dienst-
und Versorgungsbezügen in Bund und Ländern 2003/2004” (BBVAnpG). The calculation of provisions for pensions was based
on the 2005G mortality tables of Professor Heubeck.
The service cost and net interest are recognized in personnel expenses.
With regard to the description of the various plans, see note 37.
Provisions for taxes
Provisions for current taxes are recognized for tax expected to be payable in the year under review and/or previous years taking
into account anticipated risks.
Other provisions
Provisions represent liabilities that are uncertain with regard to amount and/or maturity. Other provisions are recognized in the
amount required to settle the obligations. The amount recognized represents the most probable value.
Provisions are recognized to the extent that there is a current commitment to third parties. In addition, they must be the result of
a past event, lead to a future cash outflow, and more likely than not be needed to settle the obligation (IAS 37).
Refund claims toward third parties are capitalized separately from the provisions as “other receivables”, provided that their reali-
zation is virtually certain.
Non-current provisions with terms of more than one year are discounted at a capital market interest rate with a matching maturity,
taking future cost increases into account, provided that the interest effect is material. This especially applies to the provisions for
passive noise abatement, which are discounted over a period until 2023 and according to the expected cash outflow dates of
matching interest rates up to a maximum of 0.19% (previous year: 0.10%).
The provision for partial retirement is recognized pursuant to IAS 19. The recognition of the liability from step-ups starts at the
time when Fraport can legally and factually no longer withdraw from the liability. The step-up amounts are added to the liability in
installments until the end of the active phase on a pro rata basis. The utilization begins with the passive phase.
Contingent liabilities
Contingent liabilities are possible liabilities that are based on past events, and the existence of which is only confirmed by the
occurrence of one or more indeterminate future events that are nonetheless beyond Fraport’s control. Furthermore, current obli-
gations may constitute contingent liabilities if the probability of the outflow of resources is not sufficient for a liability to be recog-
nized, or if the extent of the liability cannot be reliably estimated. Contingent liabilities are not recorded in the financial position,
but rather shown in the notes.
Liabilities
Financial liabilities, trade accounts payable, and other liabilities are recorded at their fair value upon initial recognition. For current
liabilities, this corresponds generally to the nominal value. Non-current low-interest or non-interest-bearing liabilities are carried
at their present value at the time of addition less the transaction costs. Liabilities in foreign currencies are translated at the ex-
change rate on the balance sheet date. Finance lease liabilities are reported at the lower of the present value of the minimum
lease payments and the fair value of the leased asset.
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157
Subsequent measurement of financial liabilities is based on the effective interest method at amortized acquisition cost. Each
difference between the refund amount and the repayment amount is recorded in the income statement over the term of the contract
in question using the effective interest method.
Derivative financial instruments, hedging transactions
The Fraport Group basically uses derivative financial instruments to hedge existing and future interest and exchange rate risks.
Derivative financial instruments with positive or negative market values are measured at fair value in accordance with IAS 39.
Changes of value on cash flow hedges are recorded in shareholders’ equity in the reserve for financial instruments without affect-
ing profit or loss. Corresponding to this, deferred taxes on the fair values of cash flow hedges are also recorded in shareholders’
equity without affecting profit or loss. The effectiveness of the cash flow hedges is assessed on a regular basis. Ineffective cash
flow hedges are recorded in the income statement through profit or loss under “financial result on other items”.
If the criteria for a cash flow hedge are not met, the derivative financial instruments are allocated to the “held for trading” category.
In this case, the changes in the fair value and the related deferred taxes are recognized through profit or loss in the income
statement. The fair value changes are recorded under “financial result on other items”.
Derivative financial instruments are recognized at the trading date.
Treasury shares
Repurchased treasury shares are deducted from the issued capital and the capital reserve.
Stock options
The value of the remuneration within the scope of the annual employee investment plan is not based on the performance of the
shares, which means that the employee investment plan does not fall within the scope of application of IFRS 2.
Virtual stock options
Virtual stock options (“Long-Term Incentive Program”) have been issued since January 1, 2010 as part of the remuneration for
the Executive Board and Senior Managers. They are paid out in cash immediately at the end of the performance period of four
years. The measurement of virtual shares is at fair value pursuant to IFRS 2. Up to the end of the performance period, the fair
value is re-determined on each reporting date and on the date of performance and is recorded in personnel expenses on a pro
rata basis.
Judgment and uncertainty of estimates
The presentation of the asset, financial, and earnings position in the consolidated financial statements depends on accounting
and valuation methods as well as assumptions and estimates. The assumptions and estimates made by the management in
drawing up the consolidated financial statements are based on the circumstances and assessments on the balance sheet date.
Although the management assumes that the assumptions and estimates applied are reasonable, there may be unforeseen
changes in these assumptions that could affect the Group’s asset, financial, and earnings position.
Balance sheet items for which assumptions and estimates have a significant effect on the reported carrying amount are shown
below.
Property, plant, and equipment
Experience, planning, and estimates play a crucial role in determining the useful life of property, plant, and equipment. Carrying
amounts and useful lifespans are checked on each reporting date and adjusted as required.
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Other financial assets
The valuation of loans included in the other financial assets is based in part on cash flow forecasts.
Accounts receivable
For receivables, the assessment of impairment depends on the probability assessment of future payment defaults.
Taxes on income
Fraport is subject to taxation in various countries. In assessing global income tax receivables and liabilities, estimates sometimes
need to be made. The possibility cannot be ruled out that the tax authorities will come to a different tax assessment. The associated
uncertainty is accounted for by recognizing uncertain tax receivables and liabilities when they are considered by Fraport to have
a probability of occurrence of more than 50%. A change to the assessment, for example, as a result of final tax assessments, will
have an effect on current and deferred tax items. For uncertain income tax items that have been recognized, the expected tax
payment is used as a basis for the best estimate.
Deferred tax assets are recognized if it is probable that future tax benefits can be realized. The actual tax earnings situation in
future fiscal years, and therefore the actual usability of deferred tax assets, could differ from the forecasts at the time the deferred
tax assets are recognized.
Provisions for pensions and similar obligations
Material valuation parameters for the valuation of provisions for pensions and similar obligations are the discount factor as well
as trend factors (see also note 37).
Other provisions
The valuation of the other provisions is subject to uncertainty with regard to estimations of amount and the time of occurrence of
future cash outflows. As a result, changes in the assumptions on which the valuation is based could have a material impact on
the asset, financial, and earnings position of the Fraport Group. In connection with legal disputes, Fraport draws on information
and estimates provided by the Legal Affairs department and any mandated external lawyers when assessing a possible obligation
to recognize provisions and when valuing potential outflows of resources. The existing provisions for passive noise abatement as
at December 31, 2017 (€54.6 million; previous year: €75.5 million) and wake turbulences (€8.8 million; previous year:
€17.9 million) are substantially dependent with regard to their amounts on the utilization of the underlying programs by the eligible
beneficiaries. The existing provisions for compensation in accordance with nature protection laws as at December 31, 2017
(€25.9 million; previous year: €29.2 million) are dependent with regard to their amount on the extent and time of implementation
of the environmental compensation measures.
Contingent liabilities
The contingent liabilities are subject to uncertainty with respect to estimations of their amounts and, in particular, the timing of
cash outflows. The time of the expected cash outflow is specified if it can be determined sufficiently reliably.
Company acquisitions
When an acquired company is consolidated for the first time, all identifiable assets, liabilities, and contingent liabilities must be
recognized at their fair value at the time of acquisition. One of the main estimates relates to the determination of the fair value of
these assets and liabilities at the time of acquisition. The measurement is usually based on independent expert reports. Marketable
assets are recognized at market or stock exchange prices. If intangible assets are identified, the fair value is usually measured by
an independent external expert using appropriate measurement methods which are primarily based on future expected cash
flows. These measurements are considerably influenced by assumptions about the developments of future cash flows as well as
the applied discount rates. The actual cash flows may differ significantly from the cash flows used as a basis for determining the
fair values.
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159
Impairment losses
The impairment test for goodwill and other assets within the scope of IAS 36 is based on assumptions about future developments.
Fraport AG carries out these tests annually as well as when there are reasons to believe that goodwill has been impaired. In the
case of cash-generating units, the recoverable amount is determined. This corresponds to the higher of fair value less costs to
sell and value in use. The measurement of the value in use includes estimates regarding the forecasting and discounting of future
cash flows. The underlying assumptions could change on account of unforeseeable events and may therefore impact the asset,
financial, and earnings position.
Specific estimates or assumptions for individual accounting and valuation methods are explained in the relevant section. These
are based on the circumstances and estimates on the balance sheet date, and in this respect also affect the amount of the reported
income and expense amounts of the fiscal years shown.
New standards, interpretations, and changes
Of the new standards, interpretations and changes, Fraport generally applies those for which application was mandatory; i.e.
those applicable to fiscal years beginning on or before January 1, 2017.
As part of the disclosure initiative, on January 29, 2016, the IASB published amendments to IAS 7 “Statement of cash flows”. The
objective is to improve information on the company’s debt. Disclosures include: cash changes to the cash flows used in financing
activities, exchange rate-related changes, changes from the acquisition and sale of companies, changes to fair values as well as
other changes. The amendments are to be applied to fiscal years starting on or after January 1, 2017. No comparative figures for
the previous year are required in the year of initial application.
On January 19, 2016, the IASB published amendments to IAS 12 “Income taxes – recognition of deferred tax assets for unrealized
losses”. Devaluations to a lower market value of debt instruments that are measured at fair value, which result from a change in
the market interest rate level, lead to deductible temporary differences. The amendments are to be applied retrospectively to fiscal
years starting on or after January 1, 2017. The amendments did not have a material impact on the reporting of the asset, financial,
and earnings position of the Fraport Group.
Standards which have not been applied prematurely
For the following new or amended standards and interpretations, which the Fraport Group is not obliged to adopt until future fiscal
years, the Fraport Group is currently working on implementing the requirements for initial application. Early application is not
planned. At this point in time, Fraport expects the effects on the consolidated financial statements described below.
Standards, interpretations, and amendments published and accepted into European law by the EU Commission
On May 28, 2014, the IASB published the new standard IFRS 15 “Revenue from Contracts with Customers”. The objective of the
new standard for recognition of revenue is to bring together existing regulations and to set standardized basic principles that are
applicable to all sectors and categories of revenue. According to IFRS 15, revenue must be recognized when the company has
fulfilled its performance obligation and the customer has received the authority to dispose of the agreed goods and services and
is able to draw benefits from them. To determine the time and amount of recognition of revenue, IFRS 15 provides for the appli-
cation of a five-step model taking in account detailed regulations on the individual levels.
Based on the analyses of the business models and typical customer contracts that exist in the Fraport Group carried out with
regard to IFRS 15, the application of the five-step approach provided for in IFRS 15 is not expected to result in any material
changes with respect to the time and amount of revenue in the consolidated financial statements.
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IFRS 15 will replace IAS 11 “Construction Contracts” and IAS 18 “Revenue” as well as the associated interpretations. IFRS 15
was adopted under EU law on September 22, 2016, and must be applied for fiscal years starting on or after January 1, 2018. The
application date of IFRS 15 in the EU therefore corresponds to the initial application date resolved by the IASB.
On July 24, 2014, the IASB published the fourth and final version of the new IFRS 9 “Financial Instruments”. The accounting and
measurement of financial instruments pursuant to IFRS 9 will supersede IAS 39 “Financial Instruments: Recognition and Meas-
urement”. IFRS 9 introduces a standardized approach to categorizing and measuring financial assets on the basis of their cash
flow characteristics and of the business models according to which they are managed. In principle, IFRS 9 provides for the fol-
lowing models for debt instruments: “Hold to obtain contractual cash flows”, “hold and sell” and “intention to trade”.
In future, debt instruments previously assigned to the “loans and receivables” category will be reported in the “hold to obtain
contractual cash flows” model. In future, debt instruments assigned to the previous “available for sale” category will be assigned
to the “hold and sell” model. These changes have no effect. No debt instruments will be assigned to the “intention to trade” model
at Fraport in future. In this respect, there will be no impact on the accounting of debt instruments at Fraport. Material changes to
future transactions arise for other investments previously assigned to the “available for sale” category. In the future, these can no
longer be recycled in the income statement when interests are sold. For financial assets, in future, impairments must be reported
based on expected losses, rather than not until losses have occurred. These changes are not expected to have a material impact
on the consolidated financial statements. The categorization and measurement of financial liabilities essentially remains un-
changed, with no material changes. For liabilities designated at fair value, changes to the fair value, provided that they are due to
changes in own credit risk, are no longer recorded in the income statement but rather under other comprehensive income. No
liabilities are currently designated at fair value in the Fraport Group, so this does not result in any changes. For the recognition of
hedge accounting, IFRS 9 contains new regulations geared towards a company’s risk management activities, particularly in rela-
tion to the management of non-financial risks. In hedge accounting, the application of IFRS 9 does not have a material impact on
the Fraport Group. IFRS 9 was adopted under EU law on November 22, 2016, and must be applied for fiscal years starting on or
after January 1, 2018.
On January 13, 2016, the IASB published the accounting standard IFRS 16 “Leases”. IFRS 16 contains the new rules on account-
ing for leases and replaces the current IAS 17 with the associated interpretations. The new standard affects, in particular, the
accounting of the lessee. In future, the rights and obligations resulting from previous “operating lease” relationships will have to
be accounted for as rights of use and leasing liabilities. In accordance with IAS 17, the payment obligations from “operating lease”
relationships are only indicated in the notes. Due to the changes in the “lessee accounting”, we currently expect an insignificant
increase in total assets as a result of the minimum leasing payments recognized as assets and liabilities at present value based
on future minimum leasing payments indicated in note 44. In addition, an insignificant improvement in Group EBITDA of a maxi-
mum of the minimum leasing payments from operating leasing relationships currently specified in the notes (see also note 44) is
expected. The EBITDA improvement is due to the future reporting of depreciation and amortization of rights of use and interest
expenses from the compounding of the leasing liability instead of the former leasing expenses in the income statement. The
effects of the compounding and depreciation and amortization have not yet been quantified. For the “lessor accounting”, the new
regulations according to IFRS 16 essentially correspond to the former IAS 17. Based on previous investigations, the application
of IFRS 16 will not have any material impact on the Fraport consolidated financial statements. The new rules are mandatory for
fiscal years starting on or after January 1, 2019. Earlier application is permitted provided IFRS 15 is also applied. The date of the
initial application corresponds to the application date adopted by the IASB through the adoption of IFRS 16 on October 31, 2017
into European law.
On April 12, 2016, the IASB published clarifications on IFRS 15 “Revenue from contracts with customers”, which relates to the
following topics: identifying performance obligations from a contract, classification as a principal versus agent, and revenue from
licenses. As with IFRS 15, the changes apply from January 1, 2018, while EU endorsement was given on October 31, 2017.
Fraport Annual Report 2017
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161
On December 8, 2015, the IASB published the “Improvements to IFRS 2014 – 2016”. The amendments relate to IAS 28, IFRS 12
and IFRS 1. The amendment to IFRS 12 “Disclosure of interests in other entities”, which is of relevance for the Fraport Group,
clarifies that the duties of disclosure, with the exception of IFRS 12.B10 – B16, also relate to interests in entities that fall within the
scope of IFRS 5. The amendments to IFRS 12 apply from January 1, 2017 and amendments to IAS 28 and IFRS 1 apply from
January 1, 2018. Earlier application is permitted. The amendments are not expected to have a material impact on the reporting of
the asset, financial, and earnings position of the Fraport Group in future. The changes were adopted into EU law on February 7,
2018.
Standards, interpretations and amendments that have been published, but not yet adopted into European law by the
European Commission
On September 11, 2014, the IASB published amendments to IAS 28 “Investments in Associates and Joint Ventures” and IFRS
10 “Consolidated Financial Statements”. The changes relate to the sale or contribution of assets to or in an associated company
or joint venture. In future, the net income or loss from such transactions should only be recorded if the assets sold or contributed
constitute a business operation for the purposes of IFRS 3. If the assets do not constitute a business operation, only a pro rata
recording of results is permitted. The originally intended date of initial application for fiscal years starting on or after January 1,
2016 has been postponed indefinitely by the IASB.
On June 20, 2016, the IASB published the final amendment to IFRS 2 “Share-based payment”. The amendments particularly
relate to the following issues: The measurement of share-based payment transactions with cash settlement, classification of share-
based payments subject to withholding tax, and accounting for a change to share-based payment from “cash-settled” to “equity-
settled”. The amendments apply for fiscal years beginning on or after January 1, 2018; voluntary early application is permitted.
The effects of the amendments are currently still being analyzed.
On December 8, 2016, the IASB published amendments to IAS 40 “Investment property”. The amendment provides clarification
on the date from which transfers to or from investment property can take place. The amendment to IAS 40 applies from January
1, 2018. Earlier application is permitted. The amendments are not expected to have a material impact on the reporting of the
asset, financial, and earnings position of the Fraport Group in future.
On December 8, 2016, the IFRS IC published a new interpretation of IFRIC 22 “Foreign currency transactions and advance
consideration” within the scope of IAS 21 “The effects of changes in foreign exchange rates”. A foreign currency transaction is
recorded in the functional currency at the spot price applicable on the day of the transaction. If a company pays or receives
multiple advance considerations as part of a transaction, the date of the transaction and the exchange rate must be determined
separately for every advance consideration. IFRIC 22 applies from January 1, 2018. Earlier application is permitted. The interpre-
tation will not have a material impact on the reporting of the asset, financial, and earnings position of the Fraport Group.
On June 7, 2017, the IFRS IC published a new interpretation of IFRIC 23 “Uncertainty over Income Tax Treatments” within the
scope of IAS 12 “Income taxes”. IFRIC 23 supplements the provisions of IAS 12 in relation to the inclusion of uncertainties with
regard to the treatment of income tax from events and transactions. IFRIC 23 applies for all fiscal years starting on or after January
1, 2019. The interpretation will not have a material impact on the reporting of the asset, financial, and earnings position of the
Fraport Group.
On October 12, 2017, the IASB approved amendments to IFRS 9 “Financial Instruments”. The changes affect the valuation of
early repayment options with prepayment penalty. The date of initial application is January 1, 2019. Voluntary early application is
permitted. The amendments are not expected to have a material impact on the reporting of the asset, financial, and earnings
position of the Fraport Group in future.
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Fraport Annual Report 2017
On October 12, 2017, the IASB published amendments to IAS 28 “Investments in Associates and Joint Ventures”. The amend-
ments relate to long-term interests that, depending on the business purpose, are part of the Group’s net investment in a company
accounted for using the equity method. Therefore the accounting and measurement of such interests are carried out in accordance
with IFRS 9. The date of initial application is January 1, 2019. Voluntary early application is permitted. The amendments are not
expected to have a material impact on the reporting of the asset, financial, and earnings position of the Fraport Group in future.
On December 12, 2017, the IASB published the “Improvements to IFRS 2015 – 2017”. The amendments relate to IFRS 3 / IFRS
11, IAS 12 and IAS 23. The amendments to IFRS 3 “Business Combinations” and IFRS 11 “Joint Arrangements” determine that
when obtaining control of a business operated thus far as a “joint operation” the principles for successive business combinations
(IFRS 3.42A) are applicable. On the contrary, no revaluation needs to be made when obtaining joint control of a business operation
that thus far was operated within the scope of common activities (joint operation).
The amendment to IAS 12 “Income Taxes” states that the effects of taxes on income on the receipt of dividends must be disclosed
in the operating result. This applies regardless of how the tax burden has arisen.
The amendments to IAS 23 “Borrowing costs” include clarifications in determining the financing rate in connection with procuring
qualified assets.
The date of initial application of the amendments is January 1, 2019. Voluntary early application is permitted. The amendments
are not expected to have a material impact on the reporting of the asset, financial, and earnings position of the Fraport Group in
future.
Notes to the Consolidated Income Statement
5 Revenue
Revenue
€ million
Aviation
Airport charges
Security services
Other revenue
Retail & Real Estate
Real Estate
Retail
Parking
Other revenue
Ground Handling
Ground services
Infrastructure charges
Other revenue
International Activities & Services
Total
2017
2016
780.3
127.3
46.5
954.1
194.2
206.0
86.6
34.9
521.7
323.8
304.7
13.4
641.9
817.1
2,934.8
755.8
112.5
41.9
910.2
191.9
200.6
81.3
20.1
493.9
315.7
299.0
15.7
630.4
551.7
2,586.2
Information on revenue can be found in the management report under the chapter “Results of Operations” as well as the segment
reporting (see note 41).
Fraport Annual Report 2017
Group Notes / Notes to the Consolidated Income Statement
163
The Retail & Real Estate segment includes income from operating leases from renting terminal areas, offices, buildings, and
properties. No purchase options have been agreed upon. When renting retail space, either minimum rents or variable, revenue-
related rents apply, depending on the occurrence of contractually defined conditions. Predominantly revenue-related rents are
agreed for these areas. Overall, during the fiscal year, revenue-related rent of €167.8 million (previous year: €165.6 million) was
realized. The underlying lease contracts in the Retail section for fiscal year 2017 contain contractually agreed minimum lease
payments of €44.3 million (previous year: €43.6 million).
Properties were predominantly rented in the form of assigned hereditary building rights. On the reporting date, the remaining term
of hereditary building rights contracts is 44 years on average (previous year: 46 years).
The acquisition and production costs of the leased buildings and land amount to €477.2 million (previous year: €425.9 million).
Cumulative depreciation and amortization came to €355.6 million (previous year: €304.9 million), of which depreciation and amor-
tization amounted to €6.7 million for the fiscal year (previous year: €6.7 million).
Revenue in the International Activities & Services segment (formerly External Activities & Services, renamed as at January 1,
2018) includes contract revenue from construction and expansion services related to airport operating projects abroad of
€41.7 million (previous year: €19.9 million).
The total amount of future income from minimum lease payments arising from non-cancelable leases (not including subleases) is
as follows:
Minimum lease payments
€ million
Minimum lease payments
€ million
Minimum lease payments
< 1 year
1 – 5 years
Remaining term
> 5 years
Total
2017
142.6
315.2
741.2
1,199.0
< 1 year
1 – 5 years
Remaining term
> 5 years
Total
2016
137.0
300.2
807.7
1,244.9
The future income from minimum lease payments includes the contractual unconditional minimum rental for the retail areas as
well.
The total future income from minimum leasing payments under subleasing arrangements amounted on the reporting date to €62.9
million (previous year: €101.3 million), and is predominantly accounted for by Fraport USA Inc. (International Activities & Services
segment), which operates and develops commercial terminal areas at various US airports as part of leasing and concession
agreements. Over the fiscal year, payments from subleasing arrangements of €50.5 million (previous year: €51.7 million) were
received, which also included revenue-related leases and were predominantly attributable to Fraport USA Inc.
6 Change in Work-in-Process
Change in work-in-process
€ million
Change in work-in-process
The change in work-in-process essentially relates to land and buildings for sale.
2017
0.4
2016
0.4
164
Group Notes / Notes to the Consolidated Income Statement
Fraport Annual Report 2017
7 Other Internal Work Capitalized
Other internal work capitalized
€ million
Other internal work capitalized
2017
36.3
2016
34.9
The other internal work capitalized primarily relates to engineering, planning, and construction services and services of commercial
project managers, as well as other performance work. The internal work capitalized primarily arose as part of the expansion
program and for the expansion, renovation, and modernization of the existing airport infrastructure at Frankfurt Airport.
8 Other Operating Income
Other operating income
€ million
Releases of provisions
Income from compensation payments
Compensation payment Fraport Greece
Releases of special items for investment grants
Gains from disposal of non-current assets
Compensation payment Manila project
Net income from the sale of investments in associated companies
Releases of allowances
Repayment of adjusted shareholder loans
Others
Total
2017
10.4
5.3
3.0
1.2
0.8
0.0
0.0
0.0
0.0
18.2
38.9
2016
21.7
1.8
0.0
1.2
0.6
241.2
40.1
7.2
6.0
13.1
332.9
The release of provisions mainly relates to current provisions for rebates and refunds, legal disputes as well as personnel-related
provisions.
9 Cost of Materials
Cost of materials
€ million
Cost of raw materials, consumables, supplies, and real estate inventories
Cost of purchased services
Total
2017
–132.3
–588.1
–720.4
2016
–96.2
–525.7
–621.9
Among other things, the cost of raw materials, consumables, supplies, and real estate inventories includes the carrying amounts
of real estate inventories sold in the fiscal year. The proceeds already realized in this respect are included under revenue in the
Retail & Real Estate segment.
In the context of the airport operating projects outside of Germany (see also note 48) the cost of purchased services includes
accrued variable concession charges of €169.3 million (previous year: €144.6 million), as well as order costs for construction and
expansion services of €41.7 million (previous year: €19.9 million).
In connection with the Fraport USA Inc. concession agreements for the marketing of retail space, the cost of materials include
minimum leasing payments of €19.2 million (previous year: €22.6 million) and conditional leasing payments of €14.6 million (pre-
vious year: €15.1 million).
Fraport Annual Report 2017
Group Notes / Notes to the Consolidated Income Statement
165
10 Personnel Expenses and Number of Employees
Personnel expenses and average number of employees
€ million
Remuneration for staff
Social security and welfare expenses
Pension expenses
Total
Average number of employees
Permanent employees
Temporary staff (interns, students, and scholars)
Total
2017
2016
–888.6
–159.3
–45.0
–1,092.9
2017
19,775
898
20,673
–872.2
–150.2
–44.3
–1,066.7
2016
19,372
950
20,322
Additions to pension provisions and additions to obligations arising from time-account models are included in personnel expenses.
11 Depreciation and Amortization
Depreciation and amortization
€ million
Composition of depreciation and amortization
Goodwill
non-regular
Investments in airport operating projects
regular
Other intangible assets
regular
non-regular
Property, plant, and equipment
regular
Investment property
regular
Total
2017
2016
0.0
–56.2
–17.0
–8.6
–22.4
–25.9
–17.5
–7.4
–277.2
–286.0
–1.2
–360.2
–1.2
–360.4
Regular depreciation and amortization
The useful lives of some assets were re-estimated in the year under review, resulting in increased depreciation and amortization
of €3.8 million year on year (previous year: €5.7 million) and reduced depreciation and amortization of €14.6 million (previous
year: €5.7 million).
Impairment losses pursuant to IAS 36
The non-regular depreciation and amortization of €8.6 million on other intangible assets relates to the concession rights of Fraport
USA Inc. (previous year: €7.4 million) (see also note 4 and note 20).
166
Group Notes / Notes to the Consolidated Income Statement
Fraport Annual Report 2017
12 Other Operating Expenses
Other operating expenses
in Mio €
Insurances
Costs for advertising and representation
Consulting, legal, and auditing expenses
Rental and lease expenses
Losses from disposal of non-current assets
Other taxes
Expenses from obligations to environmental and local areas
Write-downs of trade accounts receivable
Rebates for payments received from a federal guarantee for capital contributions (Manila project)
Others
Total
2017
–28.4
–22.2
–24.1
–12.4
–7.7
–9.8
–2.7
–0.8
0.0
–85.8
–193.9
2016
–26.1
–21.1
–18.0
–12.4
–5.6
–6.7
–6.6
–0.9
–42.4
–71.9
–211.7
Rental and lease expenses include minimum lease payments of €9.8 million (previous year: €9.1 million) and contingent rental
payments of €0.3 million (previous year: €0.2 million). Minimum lease payments from subleasing arrangements amounted to
€0.7 million (previous year: €0.7 million).
Among other things, other operating expenses include: travel costs, office supplies, course and seminar fees, entertainment ex-
penses, administration fees, postage, and costs from compensation payments.
The consulting, legal, and audit expenses include Group auditor fees (disclosed in accordance with Section 314 (1) no. 9 HGB)
amounting to €1.9 million (previous year: €1.8 million). Substantial certification services provided by the external auditor for Fraport
AG related to the audit of the summarized separate non-financial report with limited assurance and the carrying out of a private-
investor test. They are comprised as follows:
Group auditor fees
€ million
Audit services
Other certification services
Tax audit services
Other benefits
Total
13 Interest Income and Interest Expenses
Interest income and interest expenses
€ million
Interest income
Interest expenses
Fraport AG
2017
Consolidated
companies
Fraport AG
2016
Consolidated
companies
1.2
0.2
0.0
0.3
1.7
0.2
0.0
0.0
0.0
0.2
1.3
0.3
0.0
0.0
1.6
0.2
0.0
0.0
0.0
0.2
2017
29.0
–186.5
2016
32.0
–138.9
Interest income and interest expenses include interest from non-current loans and time deposits as well as interest expenses and
interest income from interest cost added back on non-current liabilities, provisions, and non-current assets. The net interest pay-
ments of derivative financial instruments as well as interest income from securities are recorded as interest result.
Fraport Annual Report 2017
Group Notes / Notes to the Consolidated Income Statement
167
Interest income and interest expenses for financial instruments that are not recognized in income at fair value
€ million
Interest income from financial instruments
Interest expenses from financial instruments
14 Result from Companies accounted for Using the Equity Method
Result from companies accounted for using the equity method
€ million
Joint Ventures
Associated companies
Total
2017
26.0
–180.8
2016
26.7
–130.6
2017
12.0
18.9
30.9
2016
–13.9
9.3
–4.6
The result from joint ventures accounted for using the equity method contains, inter alia, the result after taxes for Antalya of
€15.6 million (previous year: –€16.1 million) and for the first time the result after taxes of FAR of €6.3 million as well as the
expenses from a contractually agreed tax settlement payment from Fraport AG to FAR of €14.2 million.
The result for associated companies accounted for using the equity method includes a write-up of €8.0 million on the carrying
amount for Flughafen Hannover-Langenhagen GmbH.
15 Other Financial Result
The other financial result breaks down as follows:
Other financial result
€ million
Income
Foreign currency translation rate gains, unrealized
Foreign currency translation rate gains, realized
Valuation of derivatives
Others
Total
Expenses
Foreign currency translation rate losses, unrealized
Foreign currency translation rate losses, realized
Valuation of derivatives
Others
Total
Total other financial result
2017
2016
4.1
1.9
6.4
2.7
15.1
–2.1
–1.7
–0.7
–20.9
–25.4
–10.3
3.7
8.5
2.7
2.8
17.7
–0.8
–14.3
–3.4
0.0
–18.5
–0.8
Other expenses included in the financial result are primarily the prepayment penalty for redemption of the financing of LAP of
€10.1 million and the fair value of the minority shareholder’s option to purchase further shares in the Group companies Fraport
Regional Airports of Greece of €9.3 million.
168
Group Notes / Notes to the Consolidated Income Statement
Fraport Annual Report 2017
16 Taxes on Income
Income tax expense breaks down as follows:
Taxes on income
€ million
Current taxes on income
Deferred taxes on income
Total
2017
–131.6
–14.8
–146.4
2016
–190.3
9.2
–181.1
Current income tax expense consists of current taxes on income for the year under review (€142.6 million, previous year:
€192.7 million) and taxes on income for previous years (–€11.0 million, previous year: –€2.4 million).
The tax expenses include corporation and trade income taxes, the solidarity surcharge of the companies in Germany, and com-
parable taxes on income of the foreign companies. The effective taxes result from the taxable results of the fiscal year and any
revisions to previous assessment periods, to which the local tax rates of the respective Group company are applied.
Deferred taxes are generally valued on the basis of the tax rate applicable in the respective country. A combined income tax rate
of around 31% including trade tax has been applied to German companies, just as in the previous year.
Deferred taxes are recognized for all temporary differences between the tax and IFRS financial statements, for utilizable carry-
forwards of unused tax losses, as well as for carry-forwards of tax-deductible interest.
The probability of the future use of the losses carried forward is decisive for the evaluation of the recoverability of deferred tax
assets and interest. This depends on whether future taxable profits will be available in the periods in which the carry-forward of
unused tax losses and interest can be utilized. As at December 31, 2017, based on current information, the Fraport Group had
non-utilizable tax losses carried forward of €16.0 million (thereof €10.8 million related to trade taxes and €5.2 million to corporation
taxes; previous year: €10.0 million, thereof €7.9 million related to trade taxes and €2.1 million to corporation taxes) as well as
utilizable tax losses carried forward of €10.9 million (previous year: €5.9 million). Loss carry-forwards that are not expected to be
utilizable are attributable to Fraport Immobilienservice und -entwicklungs GmbH & Co. KG and FraSec Fraport Security Services
GmbH and can be carried forward indefinitely. Loss carry-forwards that are expected to be utilizable are primarily attributable to
Fraport Brasil S.A. Aeroporto de Porto Alegre and Fraport Brasil S.A. Aeroporto de Fortaleza (previous year: Fraport Greece A
and Fraport Greece B).
As at December 31, 2017, based on current information, the Fraport Group had utilizable carry-forwards of tax-deductible interest
of €14.8 million (previous year: (€0.0 million), which are exclusively attributed to Fraport Greece A and the Fraport Greece B.
For temporary differences in connection with shares in subsidiaries amounting to €189.9 million (previous year: €250.5 million),
no deferred tax liabilities were recognized, as Fraport can control the timing of the reversal and it is not expected that these
differences will reverse in the foreseeable future. These potential tax liabilities are, however, limited to 1.55% of the difference as
well as local withholding taxes in the case of future dividend payments from certain foreign subsidiaries.
In addition, deferred taxes result from consolidation measures. Pursuant to IAS 12, no deferred tax is recognized in the context
of initial consolidation with respect to goodwill capitalized or any impairment losses of goodwill.
Deferred tax assets and liabilities are netted insofar as these income tax claims and liabilities relate to the same tax authority and
to the same taxable entity or a group of different taxable entities that, however, are assessed jointly for income tax purposes.
Deferred taxes resulting from temporary differences between tax financial valuation and assets/liabilities accounted according to
IFRS are assigned to the following financial position items:
Fraport Annual Report 2017
Group Notes / Notes to the Consolidated Income Statement
169
Allocation of deferred taxes
€ million
Investments in airport operating projects
Other intangible assets
Property, plant, and equipment
Financial assets
Accounts receivable and other assets
Provisions for pensions
Other provisions
Liabilities
Financial derivatives
Losses and interest carried forward
Total separate financial statements
Offsetting
Consolidation measures
Consolidated Statement of Financial Position
Deferred tax
assets
2017
Deferred tax
liabilities
Deferred tax
assets
2016
Deferred tax
liabilities
0.0
0.0
0.9
0.1
2.3
6.9
26.8
198.5
6.3
8.0
249.8
–208.8
0.0
41.0
–20.3
–158.0
–229.3
0.0
–0.8
0.0
–0.7
0.0
–0.4
0.0
–409.5
208.8
–3.1
–203.8
0.0
0.0
3.0
0.3
4.1
6.9
36.6
57.1
12.4
1.7
122.1
–85.2
0.0
36.9
–10.5
–25.8
–217.5
0.0
–1.3
0.0
–0.8
0.0
0.0
0.0
–255.9
85.2
–2.9
–173.6
The vast majority of the deferred tax assets and liabilities result from non-current assets (investments in airport operating projects,
other intangible assets, property, plant, and equipment) and non-current liabilities (primarily concession liabilities).
Over the fiscal year, equity-decreasing deferred taxes of €6.1 million (previous year: €8.4 million) from the change in the fair
values of financial derivatives and securities were recognized directly in shareholders’ equity without affecting profit or loss. Further
equity-decreasing deferred taxes resulted primarily from the revaluation of defined benefit plans to the value of €0.2 million
(previous year: equity-increasing deferred taxes to the value of €0.5 million).
The following reconciliation shows the relationship between expected tax expense and tax expense in the consolidated income
statement:
Tax reconciliation
€ million
Earnings before taxes on income
Expected tax income/expense1)
Tax effects from differences in foreign tax rates
Tax credit from tax-free income
Taxes on non-deductible operating expenses
Non-creditable non-German withholding tax
Permanent differences including non-deductible tax provisions
Result of companies accounted for using the equity method
Non-utilizable tax losses carried forward
Trade effects and other effects from local taxes
Prior-period taxes
Others
Taxes on income according to the income statement
2017
506.1
–156.9
11.9
10.2
–5.6
–0.2
–10.9
12.1
–0.9
–3.7
–0.9
–1.5
–146.4
2016
581.4
–180.2
15.2
9.3
–15.7
–0.8
–5.6
–1.4
–0.8
–3.7
2.4
0.2
–181.1
1) Expected tax rate around 31%, for corporation tax 15.0% plus solidarity surcharge 5.5 % and trade tax of around 15.5 % (unchanged from the previous year).
The consolidated tax rate for the 2017 fiscal year is 28.9% (previous year: 31.2%).
170
Group Notes / Notes to the Consolidated Income Statement
Fraport Annual Report 2017
17 Earnings per Share
Earnings per share
Group result attributable to shareholders
of Fraport AG in € million
Weighted number of shares
Earnings per €10 share in €
basic
2017
diluted
basic
2016
diluted
330.2
92,377,435
3.57
330.2
92,667,323
3.56
375.4
92,337,317
4.07
375.4
92,546,302
4.06
The basic earnings per share for the 2017 fiscal year were calculated using the weighted average number of floating shares, each
corresponding to a €10 share of the capital stock. Due to the capital increase (see note 31), the number of floating shares during
the period rose from 92,357,054 to 92,391,339 as at December 31, 2017. With a weighted average number of 92,377,435 shares,
the basic earnings per €10 share amounted to €3.57.
As a result of the rights granted to employees to buy shares (authorized capital) within the scope of the employee investment
plan, the diluted number of shares amounts to 92,667,323 (weighted average) and the diluted earnings per €10 share are therefore
€3.56.
Notes to the Consolidated Financial Position
The composition and development of goodwill, investments in airport operating projects, other intangible assets, property, plant,
and equipment, and investment property are shown in the Consolidated Statement of Changes in Non-Current Assets.
18 Goodwill
Goodwill arising from consolidation relates to:
Goodwill Tax reconciliation
€ million
Fraport Slovenija
Fraport USA
Media
Total
Carrying amount
December 31,
2017
Carrying amount
December 31,
2016
18.0
1.0
0.3
19.3
18.0
1.0
0.3
19.3
The following table provides an overview of the assumptions incorporated in the main goodwill impairment tests as at December
31, 2017:
Goodwill impairment test
Designation CGU
Carrying amount
of goodwill
Discount rate
before taxes
Growth rate of
perpetual annuity
Average revenue
growth in detailed
planning period
Average EBITDA
margin in detailed
planning period
Detailed planning
period
Fraport Slovenija
–
8.2 %
–
5.2 %
–
2017 bis 2053
The parameters used within the scope of the impairment tests are based on the current plan approved by the Executive Board.
This takes account of internal empirical values and external economic framework data.
The revenue forecasts used to determine growth assumptions are based, in particular, on expected air traffic trends derived from
external market forecasts.
Fraport Annual Report 2017
Group Notes / Notes to the Consolidated Income Statement
171
A variation in the discount rate of +0.5 percentage points or growth forecasts of –0.5 percentage points will not affect the recov-
erability of the reported goodwill.
The planning period on which the impairment test for Fraport Slovenija is based corresponds to the term of the right derived from
a long-term land use contract to operate the airport in Ljubljana.
19 Investments in Airport Operating Projects
€ million
Investments in airport operating projects
December 31, 2017
December 31, 2016
2,621.1
516.1
Investments in airport operating projects relate to concession rights, which comprise the following items due to the application of
IFRIC 12 (see also note 4 and note 48): the paid initial payment and capitalized minimum concession payments of €2,379.3 million
(previous year: €288.5 million) as well as capital expenditure of €241.8 million (previous year: €227.6 million). They relate to
terminal operation at the concession airports in Greece at €1,741.9 million (previous year: €10.3 million), Lima at €311.5 million
(previous year: €324.6 million), Varna and Burgas at €179.1 million (previous year: €181.2 million), and Fortaleza and Porto Alegre
at €388.6 million. The acquisition costs of the concession in Lima increased to €21.2 million in the year under review due to the
extension of the concession agreement.
Borrowing costs of €4.3 million were capitalized due to the financing of the projects to expand the airports in Greece (previous
year: €0.0 million). The borrowing costs include €0.1 million in interest paid and €4.2 million in ancillary costs associated with debt
capital, such as commitment interest (€3.7 million). The fixed interest rate on debt capital is around 4.7%. Agreed payouts at a
floating interest rate have not been made thus far.
The additions in the fiscal year amounting to €2,197.9 million resulted in cash outflows of €1,579.0 million in the statement of cash
flows, which are fully reflected in the cash flow used in investing activities. These include €1,234 million for the initial concession
payment for the Greek regional airports as well as €181.0 million for the initial concession payment for the Brazilian airports of
Fortaleza and Porto Alegre. The non-cash portion correspondingly resulted in an increase in overall liabilities in connection with
concession liabilities or other liabilities (see note 35).
20 Other Intangible Assets
Other intangible assets
€ million
Other concession and operator rights
Software and other intangible assets
Total
December 31, 2017
December 31, 2016
72.5
59.9
132.4
89.0
57.7
146.7
The other concession and operator rights include the right derived from an existing, long-term land use contract to operate the
airport in Ljubljana (€58.9 million, previous year: €60.6 million) with a remaining term of 36 years (previous year: 37 years), and
the concession rights shown in the balance sheet of Fraport USA Inc. (€13.6 million, previous year: €28.4 million) in the retail
sector with residual terms of up to 12 years (previous year: 13 years). In the year under review, a Fraport USA Inc. concession
right assigned to the “International Activities & Services” segment had to be impaired due to losing a tender for the renewal of the
concession in Boston, which led to the recognition of an impairment loss of €8.6 million. The carrying amount of the concession
right was fully depreciated at the reporting date, as the concession expired at October 31, 2017.
The other intangible assets included as at the reporting date contain internally generated intangible assets with residual carrying
amounts of €16.7 million (previous year: €16.4 million). The capitalized manufacturing costs are attributable in full to the develop-
ment phase. The depreciation and amortization is carried out on a straight-line basis taking into account the scheduled useful
lives between two and 16 years. Depreciation and amortization in the fiscal year amounted to €1.6 million (previous year:
€1.5 million).
172
Group Notes / Notes to the Consolidated Income Statement
Fraport Annual Report 2017
21 Property, Plant, and Equipment
Property, Plant, and Equipment
€ million
Land, land rights, and buildings, including buildings on leased lands
Technical equipment and machinery
Other equipment, operating, and office equipment
Construction in progress
Total
December 31, 2017
December 31, 2016
3,400.8
1,550.1
162.6
808.0
5,921.5
3,515.8
1,568.0
171.4
699.0
5,954.2
Additions in the 2017 fiscal year amounted to €287.1 million. Of this, €103.0 million was attributable to projects relating to the
capacitive expansion of Frankfurt Airport.
Borrowing costs were capitalized in the amount of €16.0 million (previous year: €18.7 million). These costs were used for capital
expenditure whose financing could not be clearly classified for the purpose of creating a specific qualifying asset. The cost of debt
for general project financing was approximately 3.5% on average (previous year: approximately 4.7%). Borrowing costs were
mainly incurred for projects relating to the capacitive expansion of Frankfurt Airport.
As at the balance sheet date, property, plant, and equipment with a carrying amount totaling €5.7 million (previous year:
€12.4 million) carry mortgages.
Property, plant, and equipment of the Fraport Group comprises land, land rights, and buildings, including those on land leased by
Fraport AG and is valued at €3,295.3 million. As at the balance sheet date of 2017, land with an area of 25.2 million square meters
(equivalent to approximately 9.7 sq mi) is owned by Fraport AG. Depending on the location and type of use, the market value of
the land included in property, plant, and equipment varies between €1 and €600 per square meter (equivalent to approximately
10.75 sq ft) (land values published by the committees of experts for real estate values of the State of Hesse).
Assets from finance lease contracts amounting to €7.1 million were recognized in property, plant, and equipment on the balance
sheet date (previous year: €18.5 million):
Finance lease contracts (2017)
€ million
Land, land rights, and buildings,
including buildings on leased lands
Technical equipment and machinery
Other equipment, operating, and office equipment
Total
Finance lease contracts (2016)
€ million
Land, land rights, and buildings,
including buildings on leased lands
Technical equipment and machinery
Other equipment, operating, and office equipment
Total
Carrying amount
January 1, 2017
Additions
Disposals Depreciation and
amortization
Carrying amount
December 31,
2017
8.3
9.4
0.8
18.5
0.0
0.0
0.0
0.0
0.0
3.0
0.0
3.0
2.1
6.0
0.3
8.4
6.2
0.4
0.5
7.1
Carrying amount
January 1, 2016
Additions
Disposals Depreciation and
amortization
Carrying amount
December 31,
2016
10.4
13.3
0.1
23.8
0.0
1.5
0.9
2.4
0.0
0.0
0.0
0.0
2.1
5.4
0.2
7.7
8.3
9.4
0.8
18.5
Land, land rights and buildings, including buildings on leased lands, include an energy plant belonging to Mainova AG located on
the site of Fraport AG. Given the exclusive use by Fraport AG and the existence of a special lease contract, Fraport AG is con-
sidered to be the beneficial owner of the plant. The contract expires in 2020.
Fraport Annual Report 2017
Group Notes / Notes to the Consolidated Income Statement
173
Technical equipment and machinery includes an IT service agreement for the provision of an IT network on the Frankfurt Airport
site and related services. As the network is located on the site of Fraport AG and is of no reasonable commercial use to any other
party, Fraport AG is considered to be the beneficial owner. Technical equipment and machinery also includes another IT service
agreement for the provision of server and data storage capacities. The computer center required for this purpose is located on
the site of Fraport AG, and Fraport AG is the sole recipient of the server and data storage services. Both contracts run until 2018.
As at December 31, 2017, Fraport AG acquired the assets contained in the agreements and capitalized them in property, plant,
and equipment. The lease was ended early, and the lease liability and leased assets have been derecognized. This resulted in
disposals amounting to €2.9 million.
22 Investment Property
Investment property includes land and buildings situated in direct vicinity to Frankfurt Airport, which are classified as follows:
Investment property
in Mio €
Undeveloped land – Level 2
Undeveloped land – Level 3
Developed land – Level 3
Total
Carrying amount
December 31, 2017
Carrying amount
December 31, 2016
Fair value
December 31, 2017
Fair value
December 31, 2016
27.5
8.5
60.4
96.4
8.8
8.8
62.0
79.6
70.5
8.8
96.6
175.9
64.8
10.1
96.5
171.4
The undeveloped land – Level 2 is agricultural land, which is partly located in the bird sanctuary, and undeveloped land in the
Kelsterbach district, as well as undeveloped land to the south of the airport. The fair value of the land is calculated internally using
the comparative value procedure pursuant to the Real Estate Valuation Regulation of May 19, 2010 (ImmoWertV) applicable in
Germany based on the standard ground values published by a committee of experts.
The fair value of the undeveloped land – Level 3 is also calculated internally using the comparative value procedure. The square
meter prices of real estate transactions currently being carried out in the same land use area are, however, not observable on the
market.
The developed land – Level 3 comprises real estate leased for residential purposes from the voluntary purchase program for real
estate in Flörsheim in the flight zone of Runway Northwest, commercially leased real estate with low flight altitude in Kelsterbach,
and commercially leased properties situated in the south of the airport site. In addition, this class includes commercially used real
estate with third-party hereditary building rights.
The fair values in the developed land – Level 3 category are calculated partly using the capitalization of earnings method pursuant
to ImmoWertV and partly using the discounted cash flow method by independent assessors. Key input parameters in the capital-
ization of earnings method include the multiplier, depending on the useful life and property yields, and the underlying annual rent.
A perpetual annuity is assumed in the discounted cash flow method. The key input parameters here are the discount rate, the
sustainable market rent, the assumed remaining useful life, predicted maintenance costs, and the anticipated development in
rents.
The reclassifications in the year under review amounting to €19.6 million are attributed to reclassifications of €18.6 million from
property, plant, and equipment for land in Kelsterbach close to the Airport. The development plan for this land, which refers to
commercial use and obtaining rental income, was completed in fiscal year 2017.
As at the balance sheet date, the investment property included assets under construction of €1.5 million (previous year:
€1.9 million).
174
Group Notes / Notes to the Consolidated Income Statement
Fraport Annual Report 2017
For major parts of the investment property, foreseeable restrictions on saleability arise from the fact that these areas are located
in the immediate vicinity of Runway Northwest.
Net lease revenue from investment property during the 2017 fiscal year amounted to €4.8 million (previous year: €4.6 million).
The total costs incurred for the maintenance of investment property amounted to €1.1 million (previous year: €0.7 million), classi-
fied as expenses that are not allocatable (excluding depreciation and amortization), and of which €0.1 million was incurred for
property for which no lease revenue was earned during the fiscal year.
As at the balance sheet date, obligations were recognized for the acquisition of investment property amounted to €0.3 million
(previous year: €0.6 million) and land with a carrying amount of €8.0 million, which was sold in fiscal year 2017 for which ownership
will be transferred in 2018.
23 Investments in Companies accounted for Using the Equity Method
Companies that are Group airports outside of Frankfurt are considered to be substantial joint ventures and associated companies
in the Fraport Group. This applies to the airports in Antalya, Pulkovo, Hanover, and Xi’an.
Shares in joint ventures
Fraport IC Ictas Antalya Havalimani Terminal Yatirim ve Isletmeciligi Anonim Sirketi, Antalya/Turkey (operator) is a joint venture
of Fraport AG and IC Yatirim Holding A.S. that operates the terminals at Antalya Airport as part of the concession agreement of
May 22, 2007 with the Turkish airport authority (DHMI grantor). The concession for the operation of the terminals and thus the
right to use all assets listed in the concession agreement runs for a total of 17 years to the end of 2024.
With regard to the authorized use of infrastructure, the company is obligated to perform maintenance and capacity expansions
(as required). Distributed over the term of the concession agreement, concession fees of €2.01 billion net must be paid to DHMI.
In exchange, the operator receives the right to use the existing and future terminal infrastructure to operate the airport and the
right to generate revenue from passenger charges paid by the airlines and from other services related to terminal operations.
Passenger charges are regulated by the grantor.
Fraport holds a 51% interest in the company’s share capital, though neither party may make a decision unilaterally due to the
voting system laid down in the partnership agreement. The division of the variable returns from the company is governed sepa-
rately in the partnership agreement, according to which both partners are entitled to equal amounts in returns. The company
accounts for 50% according to the equity method on the basis of the division of the dividend rights and the joint management and
control. The dividends are for the most part distributed through the non-operating joint venture Fraport IC Ictas Havalimani Isletme
Anonim Sirketi, Antalya/Turkey. Since the companies are not listed on a stock exchange, there is no available active market value
for the shares.
Fraport Annual Report 2017
Group Notes / Notes to the Consolidated Income Statement
175
The following overviews contain summarized IFRS financial position and results data from the Antalya companies accounted for
using the equity method (Fraport IC Ictas Antalya Havalimani Terminal Yatirim ve Isletmeciligi Anonim Sirketi, Antalya/Turkey,
and Fraport IC Ictas Havalimani Isletme Anonim Sirketi, Antalya/Turkey).
December 31, 2017
December 31, 2016
Financial position data for Antalya
€ million
Non-current assets
Non-current liabilities
thereof financial liabilities
thereof other liabilities
(including trade accounts payable)
Current assets
thereof cash and cash equivalents
thereof other assets
Current liabilities
thereof financial liabilities
thereof other current liabilities
(including trade accounts payable)
Net assets
Pro rata share of net assets
Goodwill
Investment carrying amount
Results data for Antalya
€ million
Revenue
EBITDA
Regular depreciation and amortization
Interest income
Interest expenses
Taxes on income
Result after taxes
Other result
Comprehensive income
747.5
621.5
104.1
517.4
185.0
160.2
24.8
221.0
13.0
208.0
90.0
45.0
16.9
61.9
2017
260.2
222.6
–108.5
2.2
–67.1
–14.4
31.4
16.1
47.5
863.5
606.4
0.0
606.4
168.2
145.6
22.6
382.7
272.0
110.7
42.6
21.3
16.9
38.2
2016
180.9
141.1
–108.6
1.9
–68.3
4.5
–32.2
9.8
–22.4
Total
2016
94.5
–15.0
4.9
–10.1
–19.4
0.0
0.0
65.0
The reconciliation for the carrying amount in joint ventures recognized in the Group is shown in the following overview:
Reconciliation for carrying amount in joint ventures
€ million
Investment carrying amount as at January 1
(Fraport share)
Share of annual net profit/losses
Share of other result
Comprehensive income
Dividends
Other adjustments
Additions
Investment carrying amount as at December 31 (Fraport
share)
Unrecorded pro rata results/losses
In the reporting period
Cumulative
2017
38.2
15.6
8.1
23.7
0.0
0.0
0.0
61.9
Antalya
2016
Other joint ventures
2016
2017
68.1
–16.1
4.9
–11.2
–18.7
0.0
0.0
38.2
26.8
10.6
0.0
10.6
–1.2
–0.8
15.7
51.1
0.0
0.0
26.4
1.1
0.0
1.1
–0.7
0.0
0.0
26.8
0.4
0.0
2017
65.0
26.2
8.1
34.3
–1.2
–0.8
15.7
113.0
In connection with financing the concession in Antalya, €100.5 million of bank balances are subject to a drawing restriction
(previous year: €145.2 million).
There are no further significant restrictions pursuant to IFRS 12.
176
Group Notes / Notes to the Consolidated Income Statement
Fraport Annual Report 2017
Investments in associated companies
Thalita Trading Ltd. and its wholly owned subsidiary Northern Capital Gateway LLC (NCG) were founded as companies by
Fraport AG, the Russian bank VTB, and the Greek Copelouzos Group. NCG develops and operates Pulkovo Airport (St. Peters-
burg, Russia) as part of a 30-year concession agreement with the city of St. Petersburg. The company is responsible for the entire
airport infrastructure. Fraport AG holds 25.0% of the shares in Thalita Trading Ltd. In connection with a refinancing of NCG
conducted in December 2016, the original deadline for the final transfer of the full guarantees to the new investors was extended
to March 31, 2018, which avoided a breach of the credit clauses.
Xi’an Xianyang International Airport Co., Ltd. (Xi’an) was founded by Fraport AG and three additional Chinese companies. The
company operates Xi’an International Airport, China. The company’s scope of responsibility includes the operation of the terminal
including the commercial areas, as well as certain parts of the landside infrastructure. Fraport holds 24.5% of the shares in Xi’an
through its subsidiary, Fraport Asia Ltd.
Flughafen Hannover-Langenhagen GmbH operates the airport of Lower Saxony’s capital city of Hanover. Fraport AG holds 30%
of the shares, while the City of Hanover and the State of Lower Saxony each hold a 35% stake in the company.
NCG, Xi’an, and Hannover are not listed companies. There are no available active market values for the shares.
The following information shows the IFRS financial statements of the material associated companies. Accounting and valuation
differences were adjusted to the requirements of the Group.
Summarized financial position
€ million
Share of shareholders’ equity in %
Non-current assets
Non-current liabilities
thereof financial liabilities
thereof other liabilities
(including trade accounts payable)
Current assets
thereof cash and cash equivalents
thereof other assets
Current liabilities
thereof financial liabilities
thereof other liabilities
(including trade accounts payable)
Net assets
Pro rata share of net assets
Adjustments/accumulated impairments
Investment carrying amount
Result data
€ million
Revenue
EBITDA
Regular depreciation and amortization
Interest income
Interest expenses
Currency translation differences
Taxes on income
Result after taxes
Other result
Comprehensive income
December 31,
2017
Thalita/NCG
December 31,
2016
December 31,
2017
Xi’an
December 31,
2016
December 31,
2017
Hanover
December 31,
2016
25.00
694.5
1,114.4
1,058.9
55.5
196.0
170.0
26.0
118.9
62.7
56.2
–342.8
–85.7
0.0
0.0
2017
258.2
147.4
–37.3
0.0
–87.3
–26.7
–11.1
–29.9
–6.9
–36.8
25.00
792.5
1,200.6
1,131.7
68.9
194.3
137.2
57.1
94.3
41.3
53.0
–308.1
–77.0
0.0
0.0
Thalita/NCG
2016
194.0
105.7
–34.3
0.0
–112.2
63.1
–11.1
–0.8
–3.4
–4.2
24.50
732.0
184.6
151.6
33.0
97.9
33.0
64.9
119.5
0.0
119.5
525.8
128.8
0.0
128.8
2017
235.3
90.3
–49.3
3.0
–7.6
0.0
–7.3
40.0
0.0
40.0
24.50
688.9
231.7
196.8
34.9
210.3
168.2
42.1
150.9
0.0
150.9
516.6
126.6
0.0
126.6
Xi’an
2016
213.4
97.1
–50.8
4.1
–11.3
0.0
–5.9
30.4
0.0
30.4
30.00
331.7
150.2
118.9
31.3
19.1
6.0
13.1
61.8
21.0
40.8
138.8
41.6
–17.6
24.0
2017
156.5
26.3
–20.2
0.0
–5.3
0.0
0.2
2.3
1.4
3.7
30.00
336.1
155.0
124.1
30.9
10.6
1.1
9.5
54.5
20.4
34.1
137.2
41.2
–25.7
15.5
Hanover
2016
147.6
28.9
–20.1
0.0
–5.8
0.0
–1.9
2.8
–1.0
1.8
Fraport Annual Report 2017
Group Notes / Notes to the Consolidated Income Statement
177
The reconciliation for the carrying amount in associated companies recognized in the Group is shown in the following overview:
Reconciliation for carrying amounts in associated companies
€ million
Investment carrying amount as at January 1
(Fraport share)
Share of annual net profit/losses
Share of other result
Currency translation differences
Comprehensive income
Dividends
Write-up
Investment carrying amount as at December 31
(Fraport share)
Unrecorded pro rata results/losses
In the reporting period
Cumulative
There are no significant restrictions pursuant to IFRS 12.
24 Other Financial Assets
Other financial assets
€ million
Available for sale financial assets
Securities
Other investments
Loans
Loans to joint ventures
Loans to associated companies
Other loans
Total
Thalita/NCG
Xi’an
Hanover
2017
2016
2017
2016
2017
2016
Other associated
companies
2016
2017
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
126.6
9.8
0.0
–7.6
2.2
0.0
0.0
128.8
125.7
7.5
0.0
–3.4
4.1
–3.2
0.0
126.6
–7.5
–83.2
–0.2
–75.7
0.0
0.0
0.0
0.0
15.5
0.7
0.5
0.0
1.2
–0.7
8.0
24.0
0.0
0.0
15.0
0.8
–0.3
0.0
0.5
0.0
0.0
15.5
0.0
0.0
2.5
0.4
0.0
0.0
0.4
–0.7
0.0
2.2
0.0
0.0
2.4
0.9
0.0
0.0
0.9
–0.8
0.0
2.5
0.0
0.0
December 31, 2017
December 31, 2016
271.7
105.3
12.8
84.8
14.0
488.6
335.3
104.7
4.3
88.2
29.2
561.7
In the year under review, investments in securities amounting to €40.1 million (previous year: €49.8 million) were transacted,
which were assigned to the “available for sale” category. Other changes resulted from reclassifications to current other financial
assets due to securities of €97.3 million maturing in 2018 (previous year: €120.3 million) and changes arising from valuation of –
€2.4 million (previous year: €0.6 million).
Investment securities include fund units that have been acquired exclusively for the insolvency protection of credits from the time-
account models and partial retirement claims in particular of employees of Fraport AG. In the 2017 fiscal year, fund units were
increased by €1.9 million (previous year: €8.5 million). As at the reporting date, acquisition costs amounted to €57.8 million (pre-
vious year: €55.9 million). These securities are measured at fair value and credited against the corresponding obligations of
€50.4 million (previous year: €46.2 million) (see also note 40). At year-end, there was an overfunding from fund units of
€9.3 million (previous year: €11.8 million).
The change in other investments of the “available for sale” category relates to shares in Delhi International Airport Private Ltd.,
New Delhi, India, for which there was a newly derived price as fair value in the year under review.
Loans to associated companies related to a loan issued to Thalita Ltd., Cyprus, in previous years. The interest receivables arising
from the interest accrued according to the effective interest method are reported as non-current receivables from associated
companies (see note 25).
178
Group Notes / Notes to the Consolidated Income Statement
Fraport Annual Report 2017
25 Non-current and Current Other Receivables and Financial Assets
€ million
up to 1 year
Remaining term
over 1 year
Total
December 31,
2017
up to 1 year
Remaining Term
over 1 year
Total
December 31,
2016
Accounts receivable from joint ventures
Accounts receivable from associated companies
Accounts receivable from other investments
Financial assets available for sale
Refunds from
“Passive noise abatement/wake turbulences”
Promissory note loans
Accruals
Prepayments
Other assets
Total
thereof financial assets
10.6
13.0
0.5
98.2
11.2
15.0
9.5
22.5
65.0
245.5
136.5
6.7
37.8
0.0
0.0
79.6
0.0
26.5
29.3
11.0
190.9
71.9
17.3
50.8
0.5
98.2
90.8
15.0
36.0
51.8
76.0
436.4
208.4
5.4
0.4
0.0
152.7
11.8
28.5
8.1
0.0
52.8
259.7
174.9
5.7
54.6
0.0
0.0
91.7
0.0
16.6
0.0
4.7
173.3
70.4
11.1
55.0
0.0
152.7
103.5
28.5
24.7
0.0
57.5
433.0
245.3
The financial assets in the “available for sale” category include securities with a remaining term of up to one year. The change in
the total amount as at December 31, 2017 compared to the previous year results from scheduled reclassifications from the balance
sheet item “Other financial assets” of around €97.3 million (previous year: €120.3 million), additions during the year under review
of around €20.0 million (previous year: €70.0 million), and disposals of securities that matured in the fiscal year of around
€170.6 million (previous year: €246.4 million).
The item “Refunds from passive noise abatement / wake turbulences” includes the expected full reimbursement amount from
noise abatement charges from airlines for passive noise abatement and wake turbulences, which was recognized as other assets
in compliance with IAS 37.53 in connection with the provisions created for the obligation of Fraport AG to reimburse costs for
noise abatement construction measures, expenses from refund claims for reduced utilization of outdoor facilities, and roof rein-
forcement measures (wake turbulences). The value was determined at the present value of the estimated expenses for reimburs-
ing the costs of noise abatement construction measures and estimated expenses for refund claims for reduced utilization of
outdoor facilities.
The item developed as follows in the fiscal year:
Refunds from “Passive noise abatement/wake turbulences”
€ million
January 1, 2017
Receipts
Disposals
Reclassification
Interest effect December 31, 2017
Refunds from
“Passive noise abatement/
wake turbulences”
103.5
12.3
0.0
0.0
–0.4
90.8
More information about the corresponding other provisions can be found in note 39. The carrying amount of the refund claim
depends on the noise abatement charges actually received, and those expected in the future. The carrying amount of the corre-
sponding provision depends on the actual, and future expected cash outflows for passive noise abatement measures and wake
turbulences.
Accounts receivable from associated companies primarily include interest receivables from the interest cost added back pursuant
to the effective interest method to the loan to Thalita Ltd. recorded under “Other loans” (see note 24).
The accruals are mainly construction cost subsidies paid by Fraport AG. They are especially paid to public utilities who set up
facilities for special requirements of Fraport AG. The utility companies own the utility equipment.
Where applicable, the appropriate allowance is recognized for other financial assets as at the reporting date. As was the case in
the previous year, no material allowances were recognized in the year under review. There are no material overdue non-impaired
items.
Fraport Annual Report 2017
Group Notes / Notes to the Consolidated Income Statement
179
26 Income Tax Receivables
Income tax receivables
€ million
up to 1 year
Remaining term
Total
over 1 year December 31, 2017
up to 1 year
Remaining term
Total
over 1 year December 31, 2016
Income tax receivables
5.4
0.0
5.4
11.9
0.2
12.1
Income tax receivables as at December 31, 2017 primarily comprised refund claims from the current year/previous years.
As at December 31, 2016, income tax receivables still included the corporation income tax credit.
On December 12, 2006, the revised Section 37 of the German Corporation Tax Act (KStG) became legally effective in connection
with amendments to the law based upon the Act on tax assistance measures for the introduction of the European Company and
changes to further tax requirements (SEStEG).
According to Section 37 (4) of the KStG (new version), the corporation tax credit of Fraport AG had to be established for the last
time on December 31, 2006. In accordance with Section 37 (5) of the KStG (new version), Fraport AG is entitled to a refund of its
corporation tax credit in ten equal annual installments during a payout period from 2008 to 2017. The refund claim arose after the
end of December 31, 2006 and is non-interest-bearing. The first installment was refunded in 2008 and is payable on September
30 of each year. The last installment was paid in 2017. The corporation tax credit was therefore reduced to €0.0 million as at
December 31, 2017 (previous year: €6.0 million).
The present value of this tax refund claim amounted to a total of €5.3 million as at the balance sheet date in 2016. Economically,
this refund claim was an overpayment pursuant to IAS 12.12.
27 Deferred Tax Assets
Deferred tax assets
€ million
Deferred tax assets
December 31, 2017
December 31, 2016
41.0
36.9
Deferred tax assets are recognized in accordance with IAS 12. Further explanations are provided in note 16 “Taxes on income”.
28 Inventories
Inventories
€ million
Land and buildings for sale
Raw materials, consumables, and supplies
Work-in-process/other
Total
December 31, 2017
December 31, 2016
10.6
17.6
1.1
29.3
20.0
17.2
0.7
37.9
Land and buildings for sale are entirely attributable to the Mönchhof site situated in the immediate vicinity of Frankfurt Airport,
which is held for sale. The ground value is currently €220 per square meter (equivalent to approximately 10.75 sq ft).
180
Group Notes / Notes to the Consolidated Income Statement
Fraport Annual Report 2017
Based on the ongoing development of the real estate held for sale, €0.5 million was capitalized in the year under review (previous
year: €0.7 million). In addition, a reclassification of €0.9 million from investment property (previous year: €0.0 million) resulted from
a change in the intended use of parts of the land. Carrying amount reductions of €10.8 million (previous year: €5.4 million) were
the result of property sale transactions. As was the case the previous year, borrowing costs were capitalized in the amount of
€0.1 million. The cost of debt was set at around 0.9% (previous year: approximately 0.5%).
The net realizable value of the real estate held for sale was calculated using the discounted cash flow method over the remaining
planned selling period, with a discount rate adequate for the risk and related to the term of 3.0% after tax (previous year: 3.5%).
When calculating the discount rate, further discounts were applied in addition to the general sector risk premium, particularly for
as yet unknown environmental and selling risks. When calculating the net realizable value, the selling prices of sales which have
already taken place and expenses planned for further development and selling are taken into account. As was the case last year,
the net realizable values were higher than the carrying amounts.
Additional costs that will be incurred up to the date of sale mainly relate to expenses for the further development of the property
held for sale on the Mönchhof site.
Sales of real estate with a carrying amount of around €5.2 million are planned for 2018 (previous year: around €4.6 million). The
sale of other land and buildings (€5.4 million) should be realized in 2019 and 2020.
Expenses for the maintenance of real estate inventories during the year under review were minor.
Raw materials, consumables, and supplies mainly relate to consumables for the airport operation.
29 Trade Accounts Receivable
Trade accounts receivable
€ million
From third parties
December 31, 2017
December 31, 2016
143.5
129.6
For 2017, as at the reporting date, the maximum default risk without taking securities into account equaled the carrying amount
of €143.5 million (previous year: €129.6 million). The following table provides information on the extent of the default risk with
regard to the non-impaired trade accounts receivable.
Default risk analysis
€ million
Carrying amount Thereof not overdue or
impaired
Thereof in stated term overdue
and not impaired
< 30 days
30 – 180 days
> 180 days
December 31, 2017
December 31, 2016
143.5
129.6
106.1
102.2
26.3
13.6
7.2
6.4
3.9
7.4
With regard to trade accounts receivable which are neither impaired nor in default, there is no indication as at the reporting date
for 2017 that the debtors will not meet their payment obligations. This includes disputed claims arising from the provision of security
services on behalf of the Federal Government. These claims are now being raised in a legal action. 25% (previous year: 26%) of
outstanding accounts receivable are due from two customers.
Fraport Annual Report 2017
Group Notes / Notes to the Consolidated Income Statement
181
Cash security of €6.7 million (previous year: €6.5 million) and non-cash guarantees (mainly loan guarantees) to the nominal value
of €31.1 million (previous year: €30.8 million) were accepted as guarantee for unsettled trade accounts receivable. The guarantees
received until the reporting date were neither sold nor passed on as security, and will be returned to the respective debtor after
termination of the business relationship. The guarantees received will be used only in the event of the debtor’s default.
Allowances for trade accounts receivable developed as follows:
Allowances
€ million
Balance as at January 1
Allowances included in other operating expenses
Revenue-decreasing allowances
Release
Availments
Exchange rate differences
Balance as at December 31
30 Cash and Cash Equivalents
Cash and cash equivalents
€ million
Cash in hand, bank balances, and checks
2017
43.7
0.8
2.4
–1.1
–0.8
0.6
45.6
2016
57.2
0.9
2.8
–7.2
–10.1
0.1
43.7
December 31, 2017
December 31, 2016
629.4
736.0
The bank balances mainly include short-term time deposits as well as overnight deposits.
Cash and cash equivalents include time deposits of €112.6 million (previous year: €263.9 million) with a term of more than three
months from the time of acquisition. These funds are not subject to any significant fluctuations in value and can be realized at any
time.
In connection with financing the concessions in Greece, €55.8 million of bank balances are subject to a drawing restriction. In
connection with the financing of the Antalya concessions, bank deposits of €23.3 million remained subject to drawing restrictions
in the previous year.
31 Equity Attributable to Shareholders of Fraport AG
Equity attributable to shareholders of Fraport AG
€ million
Issued capital
Capital reserve
Revenue reserves
Total
Issued capital
December 31, 2017
December 31, 2016
923.9
598.5
2,345.7
3,868.1
923.6
596.3
2,220.4
3,740.3
Issued capital (less treasury shares) increased by €0.3 million in fiscal year 2017 and is fully paid up as at the balance sheet date.
This increase relates to the partial use of authorized capital following the capital increase in exchange for cash contributions to
issue shares in connection with the employee investment plan.
182
Group Notes / Notes to the Consolidated Income Statement
Fraport Annual Report 2017
Number of floating shares and treasury shares
Issued capital consisted of 92,391,339 (previous year: 92,357,054) bearer shares with no-par value, each of which accounts for
€10.00 of the capital stock.
Development of floating and treasury shares pursuant to Section 160 of the AktG
As at January 1, 2017
Employee investment plan
Capital increase
As at December 31, 2017
As at January 1, 2016
Employee investment plan
Capital increase
As at December 31, 2016
Issued shares
Number
Floating shares
Number
Number
Amount of
capital stock
in €
Treasury shares
Share in
capital stock
in %
92,434,419
92,357,054
77,365
773,650
0.0837
34,285
92,468,704
34,285
92,391,339
77,365
773,650
0.0837
Issued shares
Number
Floating shares
Number
Number
Amount of
capital stock
In €
Treasury shares
Share in
capital stock
In %
92,385,076
92,307,711
77,365
773,650
0.0837
49,343
92,434,419
49,343
92,357,054
77,365
773,650
0.0837
The new shares created under the employee investment plan were issued to the employees at a price of €71.27 each in June
2017.
Authorized capital
Pursuant to Sections 202 et seqq. AktG, the Executive Board was authorized by resolution of the AGM held on May 31, 2013 to
increase the capital stock by up to €3.5 million on one or more occasions until May 30, 2018 with the approval of the Supervisory
Board. This was used for issuing shares to employees of Fraport AG and companies controlled by Fraport AG. It was possible to
exclude the statutory subscription rights of the shareholders. In 2017, a total of €342,850 of authorized capital was used for issuing
shares within the scope of the employee investment plan.
At the AGM of May 23, 2017, by canceling the existing authorized capital, new authorized capital of €3.5 million was approved.
The Executive Board is now entitled, with the approval of the Supervisory Board, to increase the capital stock on one or more
occasions by up to a total of €3.5 million until May 22, 2022, by issuing new shares in return for cash.
Therefore, €3.5 million of authorized capital remained as at December 31, 2017, which can be used for issuing shares to employ-
ees of Fraport AG and companies controlled by Fraport AG. The subscription rights of the shareholders may be excluded.
Capital reserve
The capital reserve contains the premium from the issue of Fraport AG shares. The €2.2 million increase in the capital reserve
results from the excess in the issue amount (€61.27 per share) of new shares issued under the employee investment plan (34,285
shares in total).
Revenue reserves
The revenue reserves consist not only of the reserves of Fraport AG (including the statutory reserve of €36.5 million), but also the
revenue reserves and retained earnings of the Group companies included in the consolidated financial statements, as well as
effects of consolidation adjustments. Furthermore, the revenue reserves include reserves for currency translation differences and
financial instruments.
Fraport Annual Report 2017
Group Notes / Notes to the Consolidated Income Statement
183
The derivative valuation reserve is –€1.0 million as at the balance sheet date (previous year: –€26.3 million). The reserve for the
fair value valuation of financial assets available for sale totals €49.7 million (previous year: €51.6 million).
Pursuant to Section 253 (6) sentence 1 of the HGB and in accordance with Section 268 (8) of the HGB, a total of €53.8 million of
the shareholders’ equity attributable to Fraport AG’s shareholders (previous year: €62.5 million) is subject to a distribution block.
However, the distribution block did not take effect insofar as sufficient free reserves were available.
The proposed dividend is €1.50 per share (previous year: €1.50 per share)
In the 2017 fiscal year, the AGM of May 23, 2017 decided to pay a dividend of €1.50 per no-par value share entitled to dividends.
The distributed amount thus came to €138.5 million (previous year: €124.6 million).
32 Non-controlling Interests
Non-controlling interests
€ million
Non-controlling interests (excluding the attributable Group result)
Group result attributable to non-controlling interests
Total
December 31, 2017
December 31, 2016
131.1
29.5
160.6
76.2
24.9
101.1
Non-controlling interests related to allocated shareholders’ equity and earnings of Fraport Twin Star Airport Management AD,
FraCareServices GmbH, Media Frankfurt GmbH, Lima Airport Partners S.R.L., and the Fraport Group companies Fraport Greece
A and Fraport Greece B.
33 Non-current and Current Financial Liabilities
Non-current and current financial liabilities
€ million
up to 1 year
Remaining term
over 1 year
Total
December 31,
2017
up to 1 year
Remaining term
over 1 year
Total
December 31,
2016
Financial liabilities
575.4
3,955.6
4,531.0
366.5
3,236.9
3,603.4
Please refer to the presentation of finance management and the asset and financial position in the Group management report for
additional explanations of financial liabilities.
34 Trade Accounts Payable
Trade accounts payable
€ million
up to 1 year
Remaining term
over 1 year
Total
December 31,
2017
up to 1 year
Remaining term
over 1 year
Total
December 31,
2016
To third parties
185.9
42.4
228.3
146.7
41.8
188.5
Trade accounts payable include liabilities in connection with compensation measures in connection with nature protection law in
the amount of €24.1 million (previous year: €26.4 million). The liabilities relate to the contractual obligations to carry out environ-
mental compensation measures based on the finished work to clear the forest south of the airport and near the Runway Northwest,
as was necessary for the airport expansion.
184
Group Notes / Notes to the Consolidated Income Statement
Fraport Annual Report 2017
35 Non-current and Current Other Liabilities
Non-current and current other liabilities
€ million
Prepayment for orders
To joint ventures
To associated companies
To investments
Investment grants for
non-current assets
Other accruals
Liabilities in connection
with concession obligations
Negative fair values of
derivative financial instruments
Other liabilities
Total
thereof primary financial liabilities
up to 1 year
Remaining term
over 1 year
Total
December 31,
2017
up to 1 year
Remaining term
over 1 year
Total
December 31,
2016
3.9
11.2
11.8
–
1.3
12.4
43.8
54.0
111.3
249.7
74.0
–
–
–
–
8.2
89.7
910.6
44.4
37.2
1,090.1
13.8
3.9
11.2
11.8
–
9.5
102.1
954.4
98.4
148.5
1,339.8
87.8
1.8
5.1
4.4
–
1.2
6.1
28.5
4.6
94.0
145.7
68.4
–
–
–
–
9.6
33.9
256.1
73.1
35.3
408.0
265.7
1.8
5.1
4.4
–
10.8
40.0
284.6
77.7
129.3
553.7
334.1
The liabilities in connection with concession obligations relate to obligations to pay fixed and variable airport operation concession
fees for the airport operating projects in Greece, Lima, Fortaleza, Porto Alegre, Varna, and Burgas.
The remaining other liabilities, inter alia, consist of finance lease liabilities, wage and church taxes, outstanding social security
contributions, liabilities from accrued interest and liabilities to company employees.
The following lease payments are due from the lease contracts:
Maturity of lease payments
€ million
Lease payments
Discount amounts
Present value
€ million
Lease payments
Discount amounts
Present value
up to 1 year
1 – 5 years
over 5 years
December 31, 2017
Remaining term
Total
3.3
0.4
2.9
6.0
0.3
5.7
0.0
0.0
0.0
9.3
0.7
8.6
up to 1 year
1 – 5 years
Remaining term
over 5 years
Total
December 31, 2016
10.5
0.9
9.6
13.0
0.8
12.2
0.0
0.0
0.0
23.5
1.7
21.8
Discount rates are between 1.0% and 5.5% (previous year: 1.0% and 6.0%). The fair values of the liabilities from finance leases
totaled €9.2 million as at December 31, 2017 (previous year: €23.2 million). For additional comments, see note 21.
36 Deferred Tax Liabilities
Deferred tax liabilities
€ million
Deferred tax liabilities
December 31, 2017
December 31, 2016
203.8
173.6
Deferred tax liabilities were recognized in compliance with IAS 12 using the temporary concept. Further explanations of deferred
tax liabilities can be found under note 16 “Taxes on income”.
Fraport Annual Report 2017
Group Notes / Notes to the Consolidated Income Statement
185
37 Provisions for Pensions and Similar Obligations
Defined benefit plans
Within the Fraport Group, there are pension obligations for the members of the Executive Board of Fraport AG and their surviving
dependents as well as obligations for Senior Managers and employees not covered by collective bargaining agreements.
Pension obligations primarily include 17 (previous year: 17) vested pension benefits promised in individual pension commitments
to members of the Fraport AG Executive Board and their surviving dependents. A reinsurance was already obtained in 2005 to
reduce actuarial risks and protect pension obligations for the former and current (in some cases still active) members of the
Executive Board against insolvency. This is a group insurance policy with an annual, constant minimum insurance amount for the
entire group. The pension benefits from the reinsurance correspond to the total achievable retirement, occupational disability, and
widow’s/widower's benefits in accordance with the pension commitments. Reinsurance benefits are recognized at the active value
reported by the insurance company to the value of €23.2 million (previous year: €22.3 million), of which €1.1 million (previous
year: €0.8 million) is attributable to reserved trust assets. The reinsurance is not traded on an active market. Plan assets are
invested in shares, real estate, fixed-interest securities, and other assets. Reinsurance installments of €1.0 million have been paid
for 2017 (previous year: €0.9 million) and €1.0 million is expected for the next year (previous year: €0.9 million). The average
weighted term of the members of the Executive Board’s defined benefit plans is 15.7 years (previous year: 16.1 years) for pensions
with reinsurance and 8.5 years (previous year: 8.8 years) for pensions without reinsurance.
The Executive Board members are entitled to pension benefits and provision for surviving dependents. An Executive Board mem-
ber is generally entitled to a retirement pension if he or she becomes permanently unable to work or retires from office during the
term of, or upon expiry of, his or her employment agreement. If an Executive Board member dies, benefits are paid to his or her
surviving dependents. These amount to 60% of the retirement pension for the widower or widow; children entitled to receive
benefits receive 12% each. If no widow’s pension is paid, the children each receive 20% of the retirement pension.
Upon retirement, income from active employment as well as retirement pension payments from previous or, where applicable,
later employment relationships shall be credited against accrued retirement pay up until reaching 60 years of age, insofar as
without such credit the total of these emoluments and the retirement pension would exceed 75% of the fixed salary (100% of the
fixed salary if Fraport AG wishes the employment to be terminated or not be extended). Effective January 1 of each year, the
retirement pensions are adjusted at discretion, taking into account the interests of the former Executive Board member and the
company’s economic situation. The adjustment obligation is considered to be satisfied if the adjustment does not fall below the
increase in the consumer price index for the cost of living for private households in Germany.
The retirement pension of an Executive Board member is defined by the percentage of a contractually agreed basis of assessment,
with the percentage rising annually by 2% up to a limit of 75%, dependent on the duration of time an Executive Board member is
appointed.
As at December 31, 2017, Dr Schulte is entitled to 66.0% of his fixed annual gross salary. Dr Zieschang is entitled to 50.0% of his
fixed annual gross salary as at December 31, 2017.
In the event of occupational disability, the pension rate for Dr Schulte and Dr Zieschang amounts to at least 55% of their respective
fixed annual gross salaries or of the contractually agreed basis of assessment.
186
Group Notes / Notes to the Consolidated Income Statement
Fraport Annual Report 2017
For Executive Board members appointed from 2012 onwards, the pension benefits, provision for surviving dependents, and pro-
vision for long-term occupational disability are governed by a separate benefit agreement. This calls for the payment of a one-
time pension capital or lifelong retirement pension after the insured event. The pension capital is generated when Fraport AG
annually credits 40% of the fixed annual gross salary paid to a pension account. The pension capital accumulated at the end of
the previous year pays interest annually at the interest rate used for the valuation of the pension obligations in the German balance
sheet of Fraport AG at the end of the previous year pursuant to Section 253 (2) of the HGB, which is at least 3% and at most 6%.
This is increased by 1% on January 1 of each year for lifelong retirement payments. No further adjustment is made. If the pension
capital reached is less than €600 thousand when retirement benefits fall due as a result of long-term occupational disability,
Fraport AG will increase it to this amount. In the event of long-term occupational disability within the first five years of their activities
performed as members of the Executive Board, it is foreseen that Executive Board members can postpone the receipt of a monthly
retirement pension payment by a maximum of five years from the start of the employment contract. Until the postponed start of
the pension benefit payments, they will receive a monthly benefit of €2.5 thousand. The risk of pension payments in the increase
phase and of payments for the increase has been reinsured by an occupational disability insurance policy. The full amount of all
income pursuant to the Income Tax Act from employment or self-employment is credited against the retirement pension paid until
the end of the month in which the Executive Board member reaches the age of 62.
Benefits for surviving dependents of Executive Board members appointed from 2012 onwards are regulated as follows: If there is
no prior event giving rise to retirement benefits, the widow or widower receives the pension capital generated so far. If there is no
widow or widower entitled to benefits, each half-orphan receives 10% and each full orphan receives 25% of the pension capital
generated so far as a one-time payment. If the pension capital reached is less than €600 thousand upon death, Fraport will
increase it to this amount. The payment risk of this increase has been reinsured by a term life insurance policy. If an Executive
Board member dies while collecting retirement pensions, the widow or widower is entitled to 60% of the last retirement pensions
paid. Half-orphans receive 10% and full orphans receive 25% of the last retirement pensions paid. If there are no surviving de-
pendents as set forth above, the heirs receive a one-time death grant in the amount of €8.0 thousand.
Moreover, each member of the Executive Board has entered into a two-year restrictive covenant. During this term, reasonable
compensation in the form of an annual gross salary (fixed salary) pursuant to Section 90a of the HGB shall be paid. Part payments
shall be made monthly. The compensation shall be generally credited against any retirement pensions owed by Fraport AG,
inasmuch as the compensation together with the retirement pensions and other generated income exceeds 100% of the last fixed
salary received.
No other benefits have been promised to Executive Board members should their employment be terminated.
The retirement pension payments entitlement of former Executive Board members is determined by a percentage of a contractu-
ally agreed fixed basis of assessment.
For Senior Managers and employees not covered by collective bargaining agreements who joined the company as Senior Man-
agers or employees not covered by collective bargaining agreements after December 31, 1997 or who will join in future, the
pension benefits and benefits for surviving dependents on the monthly compensation liable to top-up pension payments, for which
contributions are payable, are restricted to the upper limit defined in Section 38 of the ATV-K in the amount of 1.133 times of the
payment group 15 level 6 of the collective bargaining agreement for civil servants (TVöD). In addition to said limited pension
benefits and benefits for surviving dependents, there exists a supplementary company retirement benefit for these persons. Ac-
cordingly, Fraport AG makes an annual contribution in the amount of 13% of the eligible income as capital components into an
individually managed pension account. The period of contribution began on January 1, 1998 for employees who entered into an
employment not covered by a collective bargaining agreement before January 1, 2000. Furthermore, this applies to employees
who changed from an employment covered by a collective bargaining agreement to one not covered by a collective bargaining
agreement after December 31, 1997 or who entered into an employment not covered by a collective bargaining agreement after
December 31, 1997, effective as at the time of the change in status. There were 454 benefits (of which 417 vested) as at the end
of the year. The present value of the non-vested benefits amounted to €0.3 million (previous year: €0.2 million); the present value
of the vested benefits amounted to €10.0 million in the 2017 annual financial statements (previous year: €9.7 million). Future
obligations amount to €6.9 million for active employees and €3.4 million for former and retired employees. No significant provision
amounts were paid this fiscal year due to the young age structure. The obligations for Senior Managers and employees not
covered by collective bargaining agreements had an average weighted term of 8.5 years (previous year: 9.4 years).
Fraport Annual Report 2017
Group Notes / Notes to the Consolidated Income Statement
187
Furthermore, senior managers have had the opportunity to participate in an employee-financed company pension scheme (“de-
ferred compensation”) since 1996. The employee contribution is generated through converting a portion that can be chosen freely
each year. This portion is converted into an insured sum and is accumulated by Fraport AG and accrues interest. At the end of
the fiscal year, there were 15 vested pension commitments totaling €5.4 million (previous year: €5.1 million). Obligations amount
to €4.5 million for active employees (previous year: €4.2 million); obligations amount to €0.9 million for former and retired employ-
ees (previous year: €0.9 million). The average weighted term of the employee-financed company pension scheme was 5.6 years
(previous year: 6.3 years).
Guidelines nos. 2 and 3 as well as company agreement BV 47 expired effective January 1, 2017 and were replaced with a new
version of company agreement BV 47 and an amalgamation of guidelines nos. 2 and 3. The new version differs from the previously
valid version in that the interest on contributions from January 1, 2017 is no longer accrued at a fixed interest rate of 6% nor is
direct interest attributed based on age factors but rather at an annual rate based on the market rate, which is no less than 2% p.a.
and no more than 6% p.a. Contributions that have been paid in by December 31, 2016 still accrue interest according to the
previous version. For deferred compensation (development account), starting in calendar year 2017, a special regulation applies
that allows for the contributions to accrue interest in accordance with the version valid until December 31, 2016 (unchanged age
factors) with the exception of interest accrual from the age of 61. The interest accrual from the age of 61 for conversion contribu-
tions for calendar year 2017 will no longer be 6% p.a., but rather 2% p.a. For deferred compensation from January 1, 2018, no
direct interest is attributed based on age factors but rather at an annual interest rate based on the market rate in accordance with
company agreement BV 47. For employees who have left the company before the signing of the revised agreement, the previous
version of the company agreement remains in effect for 2017.
The valuation of pension obligations is based on the provisions of IAS 19. The pension obligations as at December 31, 2017 were
calculated on the basis of actuarial opinions. Changes to the obligations outlined above were as follows:
Pension obligations (2017)
€ million
As at January 1, 2017
Service cost
Current service cost
Supplementary service cost
Gains and losses on compensation
Total service cost
Net interest income/expense
Interest income and interest expenses
Remeasurements
Income on plan assets, excluding interest
Actuarial gains and losses from changes in demographic assumptions
Actuarial gains and losses from the adjustment of the obligation based on experience
Actuarial gains and losses from changes in financial assumptions
Total remeasurements
Impacts of exchange rate differences
Contributions of the employer to the plan
Contributions of the employee to the plan
Payments from the plan
Overfunding
As at December 31, 2017
Present value of the
obligation
Plan assets
Total
55.5
1.9
0.0
0.0
1.9
0.9
0.0
0.0
0.1
0.7
0.8
0.0
0.0
0.2
–1.9
0.0
57.4
–22.3
0.0
0.0
0.0
0.0
–0.4
–0.2
0.0
0.0
0.0
–0.2
0.0
–1.0
0.0
0.7
0.0
–23.2
33.2
1.9
0.0
0.0
1.9
0.5
–0.2
0.0
0.1
0.7
0.6
0.0
–1.0
0.2
–1.2
0.0
34.2
188
Group Notes / Notes to the Consolidated Income Statement
Fraport Annual Report 2017
Pension obligations (2016)
€ million
As at January 1, 2016
Service cost
Current service cost
Supplementary service cost
Gains and losses on compensation
Total service cost
Net interest income/expense
Interest income and interest expenses
Remeasurements
Income on plan assets, excluding interest
Actuarial gains and losses from changes in demographic assumptions
Actuarial gains and losses from the adjustment of the obligation based on experience
Actuarial gains and losses from changes in financial assumptions
Total remeasurements
Impacts of exchange rate differences
Contributions of the employer to the plan
Contributions of the employee to the plan
Payments from the plan
Overfunding
As at December 31, 2016
Present value of the
obligation
Plan assets
Total
52.0
2.2
0.0
0.0
2.2
1.1
0.0
0.0
0.1
2.0
2.1
0.0
0.0
0.0
–1.9
0.0
55.5
–21.3
0.0
0.0
0.0
0.0
–0.5
–0.2
0.0
0.0
0.0
–0.2
0.0
–1.0
0.0
0.7
0.0
–22.3
30.7
2.2
0.0
0.0
2.2
0.6
–0.2
0.0
0.1
2.0
1.9
0.0
–1.0
0.0
–1.2
0.0
33.2
Offsetting
Pension obligations are offset against the plan assets reserved for insolvency insurance below:
Offsetting
€ million
Offsetting
Reconciliation to assets and liabilities recognized in the financial position
Present value of an obligation funded through a reinsurance/trust assets
Fair value of plan assets
Overfunding (not included in the net liability)/underfunding
Present value of an obligation not funded through a reinsurance/trust assets
(Net) liabilities recognized in the financial position
Significant actuarial assumptions
Salary trend
Interest rate
Pension growth
Mortality
Retirement age
2017
2016
27.1
–23.2
3.9
30.3
34.2
25.7
–22.3
3.4
29.8
33.2
2016
2017
0.00 %
1.70 %
1,75 %/2,25 %
Mortality tables 2005G of Prof. Dr. Heubeck Mortality tables 2005G of Prof. Dr. Heubeck
Termination of contract period, earliest
pensionable age in pension commitments
Termination of contract period, earliest
pensionable age in pension commitments
0.00%
1.60%
1,75 %/2,25 %
The significant actuarial assumptions relate to the pension obligations of the Fraport Group. All pension obligations largely have
the same assumptions where the adjustment to pensions is only calculated on pension obligations of the Executive Board mem-
bers.
Fraport Annual Report 2017
Group Notes / Notes to the Consolidated Income Statement
189
Sensitivity analysis
The sensitivity analysis is based on changes in the assumptions while other factors remained constant. In practice, it is unlikely
that only one actuarial assumption would change. Changes in actuarial assumptions may correlate with other actuarial assump-
tions. The method for determining the sensitivity analysis did not change. The pension provision would vary by the following
amounts in the event of a change in assumptions:
Sensitivity analysis (December 31, 2017)
€ million
Interest rate
Pension growth
Mortality1)
Retirement age
2017
Decrease in interest rate by 0.5%
3.3
Decrease in pension growth by 0.25%
–1,2
Increase in interest rate by 0.5%
–3,0
Increase in pension growth by 0.25%
1.2
Reduction by one year
1.4
Increase by one year
0.0
1) The obligation would increase for all beneficiaries by €1.4 million as a result of the decrease in mortality of one year.
Sensitivity analysis (December 31, 2016)
€ million
Interest rate
Pension growth
Mortality 1)
Retirement age
2016
Decrease in interest rate by 0.5%
Increase in interest rate by 0.5%
3.3
Decrease in pension growth by 0.25%
–1,1
–3,0
Increase in pension growth by 0.25%
1.1
Reduction by one year
1.4
Increase by one year
0.4
1) The obligation would increase for all beneficiaries by €1.4 million as a result of the decrease in mortality of one year.
The retirement age has no influence on the pensions received by members of the Executive Board and was only calculated for
other pensions. Due to the structure of the respective pension plans, the salary adjustment has no effect on pension obligations.
In connection with the defined benefit plans, the Group is exposed to the actuarial risks mentioned above as well as the interest
rate risk. Due to the liquidity available in the Group, there is no risk with regard to fulfillment of non- reinsured obligations.
Multi-employer plans
Fraport AG has insured its employees for purposes of granting a company pension under the statutory insurance scheme based
on a collective bargaining agreement (Altersvorsorge-TV-Kommunal[ATV-K]) with the Zusatzversorgungskasse for local authority
and municipal employers in Wiesbaden (ZVK). The contributions are collected based on a pay-as-you-go model. As in the previous
year, the contribution rate of the ZVK is 6.6% on compensation liable to top-up pension payments; thereof, the employer pays
5.9%, with the contribution paid by the employee amounting to 0.7%. In addition, a tax-free restructuring fee of 2.3% of the
remuneration liable to top-up pension payments is levied by the employer in accordance with Section 63 of the ZVK Statutes
(ZVKS). An additional contribution of 9% is paid for some employees included in the statutory social security insurance scheme
(generally employees exempted from collective bargaining agreements and Senior Managers) for the consideration subject to
ZVK that, according to Section 38 ATV-K, exceeds the upper limit defined in the collective bargaining agreement.
This plan is a multi-employer plan (IAS 19.8), since the companies involved share the risk of the investment and also the biometric
risk. Reference is also made to the collective bargaining agreement risks arising from the ZVK insurance in the Risk and Oppor-
tunities Report in the management report.
190
Group Notes / Notes to the Consolidated Income Statement
Fraport Annual Report 2017
The ZVK insurance is generally to be classified as a defined benefit plan (IAS 19.30). Because there is not sufficient information
on the plan and the company also covers the risks of other insuring companies with its contributions (IAS 19.34), only the current
contributions are accounted for as if it were a defined contribution plan. Due to its structure, the ZVK does not provide any infor-
mation to participating companies that would allow the allocation of obligations, plan assets, service costs, and, if applicable, over-
or underfunding or the extent of Fraport’s participation in the plan. In the consolidated financial statements of Fraport, the consid-
eration of contributions corresponds to defined-contribution pension commitments. Along with the remaining member companies,
Fraport AG is obliged to finance accrued obligations not covered by assets as well as future obligations. The precise share of the
remaining extent of the obligation cannot be determined. In the event of Fraport AG withdrawing from the multi-employer plan (for
example, through terminating the agreement), compensation in the amount of the present value of the obligation at the point of
the membership being terminated is to be paid to the ZVK. This amount cannot be determined due to only insufficient information
being available. Should the multi-employer plan be dissolved by a resolution of the administrative committee, no share in any
possible remaining overfunding will be due to Fraport.
In the fiscal year, €30.5 million (previous year: €29.8 million) was recorded as contributions to defined contribution plans for ZVK.
Furthermore, due to statutory provisions, contributions are also made to state-administered pension funds in Germany. The cur-
rent contributions are shown as expense for the respective year. Employer contributions made by the Fraport Group to statutory
insurance schemes totaled €70.2 million (previous year: €69.1 million).
38 Non-current and Current Income Tax Provisions
Non-current and current income tax provisions
€ million
Remaining term
up to 1 year
over 1 year
Total
December 31,
2017
Remaining term
up to 1 year
over 1 year
Total
December 31,
2016
Provisions for taxes on income
33.1
70.3
103.4
42.9
71.8
114.7
Tax provisions amounting to €103.4 million (previous year: €114.7 million) were accrued for unassessed corporation tax and trade
taxes, as well as for tax audit risks.
39 Non-current and Current Other Provisions
The development in the non-current and current provisions is shown in the following tables.
Non-current and current personnel-related provisions
€ million
Personnel
thereof non-current
thereof current
January 1, 2017
117.3
23.7
93.6
Use
–81.4
Release
Additions
December 31, 2017
–2.1
87.8
121.6
47.1
74.5
A large part of the personnel-related provisions was generated for partial retirement and incentive schemes for the employees of
Fraport AG. The partial retirement provisions are recognized pursuant to IAS 19. The credit for partial retirement is offset against
the fund units (see also note 24).
The provision for the company-wide program to develop the personnel structure initiated in fiscal year 2016 “Future Contract Plus
(FC Plus)” amounted to €27.3 million as at the balance sheet date (last year: €37.7 million).
Fraport Annual Report 2017
Group Notes / Notes to the Consolidated Income Statement
191
Other provisions
€ million
Environment
Passive noise abatement
Nature protection law com-
pensation
Wake turbulences
Others
Total
thereof non-current
thereof current
January 1, 2017
Use
Release
Additions
Interest effect
December 31, 2017
39.3
75.5
29.2
17.9
85.1
247.0
123.5
123.5
–2.6
–20.6
–0.6
–8.9
–20.7
–53.4
0.0
0.0
–3.0
0.0
–5.3
–8.3
4.2
0.0
0.0
0.0
53.0
57.2
–0.7
–0.3
0.3
–0.2
0.0
–0.9
40.2
54.6
25.9
8.8
112.1
241.6
100.1
141.5
Releases include releases not reflecting net income of €3.0 million which were recognized against the corresponding asset.
Environmental provisions have been formed largely for probable restructuring costs for the elimination of groundwater contami-
nation on the Frankfurt Airport site in Frankfurt/Main, as well as for environmental pollution in the southern section of the Airport.
As at December 31, 2017, estimated cash outflows (present value) amounted to €5.4 million within one year (previous year:
€5.9 million), €14.4 million after one to five years (previous year: €18.0 million), and €20.4 million after five years (previous year:
€15.4 million).
The “passive noise abatement” provision includes obligations to refund the passive noise abatement expenses of owners of private
and commercial land and obligations to pay outdoor living and commercial area compensation. The obligations result from the
planning approval notice made by the Hessian Ministry of Economics, Energy, Transport and Regional Development (HMWEVL)
on December 18, 2007 in conjunction with the Act for Protection against Aircraft Noise (Aircraft Noise Act), and the planning
approval notice of April 30, 2013. As at December 31, 2017, estimated cash outflows (present value) amounted to €26.4 million
within one year (previous year: €28.4 million), €27.4 million after one to five years (previous year: €41.1 million), and €0.8 million
after five years (previous year: €6.0 million). There is a corresponding refund claim reported under other accounts receivable for
all obligations reported under “passive noise abatement” as at the reporting date (see also note 25). The carrying amount of the
refund claim depends on the actually collected, and future expected noise abatement charges. The carrying amount of the corre-
sponding provision depends on the actual, and future expected cash outflows for passive noise abatement measures and wake
turbulences.
A provision for environmental protection compensating measures was created in previous years due to the long-term obligation
to implement ecological compensating measures resulting from the work performed to clear the land in the southern part of the
airport and in the area of Runway Northwest required for the airport expansion. As at December 31, 2017, estimated cash outflows
(present value) amounted to €0.1 million within one year (previous year: €0.5 million), €14.0 million after one to five years (previous
year: €8.3 million), and €11.8 million after five years (previous year: €20.4 million).
The wake turbulence protection program concerns the protection of roofs in the defined entitlement areas to protect against
damage to roof cladding due to gusts of wind caused by wake turbulences. The obligations result from the corresponding supple-
mentation decision dated May 10, 2013 and May 26, 2014. As at December 31, 2017, estimated cash outflows (present value)
amounted to €4.2 million within one year (previous year: €10.2 million), €4.2 million after one to five years (previous year:
€6.6 million), and €0.4 million after five years (previous year: €1.1 million). There is a corresponding refund claim for obligations
reported under other accounts receivable (see also note 25).
The remaining provisions include provisions for rebates and refunds of €49.8 million (previous year: €29.4 million), provisions for
development measures to be carried out in connection with the sale of real estate inventories (also see note 28) of €14.9 million
(previous year: €17.3 million), provisions relating to legal disputes of €3.5 million (previous year: €4.3 million), and provisions for
risks arising from renting and other services for which no further information is provided due to disputed facts. The cash outflows
for the other provisions are primarily expected within one year.
192
Group Notes / Notes to the Consolidated Income Statement
Fraport Annual Report 2017
40 Financial Instruments
Disclosures on Carrying Amounts and Fair Values
The following tables present the carrying amounts and fair values of the financial instruments as at December 31, 2017, and
December 31, 2016, respectively:
Financial instruments as at December 31, 2017
€ million
Measured at amortized costs
Measured at fair value
Measurement category according to IAS 39
Carrying amount
Loans and Receivables
Fair value
Available for Sale
Carrying amount1)
Financial assets
Cash and cash equivalents
Trade accounts receivable
Other financial receivables and assets
Other financial assets
Securities
Other investments
Loans to joint ventures
Loans to associated companies
Other loans
Total
Measurement category according to IAS 39
Financial liabilities
Trade accounts payable
Other financial liabilities
Financial liabilities
Derivative financial liabilities
Hedging derivative
Other derivatives
Share Option
Total
1) The carrying amount equals the fair value of the financial instrument.
629.4
143.5
110.2
12.8
84.8
14.0
994.7
629.4
143.5
134.5
12.8
109.0
14.0
1,043.2
98.2
271.7
105.3
475.2
Measured at amortized costs
Other financial liabilities Held for Trading
Measured at fair value
Hedging
derivative
Fair value Carrying amount1) Carrying amount1)
Carrying amount
228.3
1,042.2
4,531.0
233.0
1,295.1
4,702.2
5,801.5
6,230.3
19.1
50.2
69.3
27.6
27.6
December 31,
2017
Total fair value
629.4
143.5
232.7
271.7
105.3
12.8
109.0
14.0
1,518.4
Total fair value
233.0
1,295.1
4,702.2
27.6
19.1
50.2
6,327.2
Fraport Annual Report 2017
Group Notes / Notes to the Consolidated Income Statement
193
Financial instruments as at December 31, 2016
€ million
Measured at amortized costs
Measured at fair value
Measurement category according to IAS 39
Carrying amount
Loans and Receivables
Fair value
Available for Sale
Carrying amount1)
December 31,
2016
Total fair value
Financial assets
Cash and cash equivalents
Trade accounts receivable
Other financial receivables and assets
Other financial assets
Securities
Other investments
Loans to joint ventures
Loans to associated companies
Other loans
Total
Measurement category according to IAS 39
Financial liabilities
Trade accounts payable
Other financial liabilities
Financial liabilities
Derivative financial liabilities
Hedging derivative
Other derivatives
Total
736.0
129.6
92.6
4.3
88.2
29.2
1,079.9
736.0
129.6
92.6
4.3
88.2
29.2
1,079.9
736.0
129.6
245.3
335.3
104.7
4.3
88.2
29.2
1,672.6
152.7
335.3
104.7
592.7
Measured at amortized costs
Measured at fair value
Total fair value
Other financial liabilities Held for Trading
Hedging
derivative
Fair value Carrying amount1) Carrying amount1)
Carrying amount
0.0
188.5
334.1
3,603.4
0.0
193.4
479.6
3,755.9
4,126.0
4,428.9
0.0
193.4
479.6
3,755.9
0.0
52.4
25.4
4,506.7
0.0
25.4
25.4
0.0
52.4
0.0
52.4
1) The carrying amount equals the fair value of the financial instrument.
Given the short terms, the carrying amounts of cash and cash equivalents, trade accounts receivable, and current other financial
receivables and assets as at the reporting date correspond to the fair value.
With regard to the fair values of the liabilities from finance leases, see note 35.
The fair values of listed securities are identical to the stock market prices on the reporting date. The valuation of unlisted securities
was based on market data applicable on the valuation date using reliable and specialized sources and data providers. The values
are determined using established valuation models.
The derivative financial instruments relate to interest rate hedging transactions, two of which contain floors. The fair values of
these interest swaps are determined on the basis of discounted future expected cash flows, using market interest rates corre-
sponding to the terms to maturity. The calculation of the fair market value of the floors is based on a standard option pricing model.
In order to determine the fair value of financial liabilities, the future expected cash flows are determined and discounted based on
the yield curve on the reporting date. The market-driven and maturity-linked risk premium of the respective borrower as at the
reporting date is added to the cash flows.
194
Group Notes / Notes to the Consolidated Income Statement
Fraport Annual Report 2017
The fair values of loans to joint ventures and associated companies, as well as other non-current financial assets, are determined
as the present value of future cash flows. Discounting was applied using the current maturity-linked interest rate as at the balance
sheet date. The fair value of the loan including interest receivables to NCG is mainly affected by cash flow forecasts and interest
rate developments.
The carrying amounts of other loans correspond to the respective fair values. Some of the other loans are subject to a market
interest rate, and their carrying amounts therefore represent a reliable valuation for their fair values. Another part of the other
loans is reported at present value as at the balance sheet date. The remaining other loans are promissory note loans with a
remaining term of less than three years. Due to the lack of an active market, no information is available on the risk premiums of
their respective issuers. As the promissory note loans are mainly floating interest rate loans, their carrying amounts were used as
the most reliable value for their fair values.
The fair values of leasing liabilities are calculated by discounting the expected future cash flows based on current interest rates
for similar financial liabilities with a comparable maturity.
Non-current liabilities are recognized at their present value. To determine fair value, the respective cash outflows are discounted
at interest rates with similar terms and with the Fraport credit risk as at the reporting date. The carrying amounts of current liabilities
are equal to the fair value. There is a general interest rate risk for fixed-interest loans that are extended at the ends of their terms.
The other investments categorized as Level 3 relate to the shares in Delhi International Airport Private Ltd. Until December 31,
2016, the fair value of the shares in Delhi International Airport Private Ltd. was determined based on a current bid and taking
current exchange rates into account, and categorized as Level 2. Since June 30, 2017, the fair value has been determined based
on a discounted cash flow valuation. The shareholders’ equity option in Level 3 relates to shares in Fraport Greece A and Fraport
Greece B. Fraport holds a short position. Another shareholder has the possibility to exercise his option for shareholders' equity
shares once in the next six years.
The substantial non-observable input factors, both for the shareholders' equity option and the shares in Delhi International Airport
Private Ltd., for determining the fair value, are the forecast cash flows, which are based on the company’s future earnings and
planned capital expenditure, as well as the discount factor that is applied. The discount factor used was the WACC (country-
specific, weighted average capital cost after taxes).
Fair value hierarchy level 3 reconciliation (values determined using valuation techniques)
€ million
Share Option
Other Investments
Sensitivities
€ million
January, 1 2017
Additions
Gains/losses in in-
come statement
Transfers
into level 3
Gains/losses in
OCI
December, 31
2017
0.0
0.0
–40.9
0.0
–9.3
0.0
0.0
104.5
0.0
0.5
–50.2
105.0
Sensitivities with regard to unobservable input parameters
Growth forcasts
–0,5%
Discount rate
–0,5%
+0,5%
+0,5%
Currency rate sensitivity (INR)
+0,5%
–0,5%
Share Option
Other Investments
6.8 %
11.9 %
34.7
98.5
67.6
122.6
73.2
152.7
27.1
62.0
N/A
–5.0
N/A
5.5
Fraport Annual Report 2017
Group Notes / Notes to the Consolidated Income Statement
195
The fair values of financial instruments belong to the following measurement categories of the hierarchy pursuant to IFRS 13 as
at December 31, 2017:
Measurement categories pursuant to IFRS 13 (2017)
€ million
December 31, 2017
Level 1
Quoted prices
Level 2
Derived prices
Level 3
Prices that cannot
be derived
Financial assets
Other financial receivables and financial assets
Available for sale
Loans and receivables
Other financial assets
Securities
Other investments
Loans to joint ventures
Loans to associated companies
Other loans
Total
Financial liabilities
Trade accounts payable
Other financial liabilities
Financial liabilities
Liabilities from finance leases
Derivative financial liabilities
Derivatives without hedging relationships
Derivatives with hedging relationships
Share Option
Total
98.2
134.5
271.7
105.3
12.8
109.0
14.0
745.5
233.0
1,295.1
4,702.2
9.2
19.1
27.6
50.2
6,336.4
98.2
271.7
369.9
948.0
948.0
85.8
12.8
14.0
112.6
233.0
1,295.1
3,754.2
9.2
19.1
27.6
5,338.2
48.7
105.3
109.0
263.0
50.2
50.2
The fair values of financial instruments belonged to the following measurement categories of the hierarchy pursuant to IFRS 13
as at December 31, 2016:
Measurement categories pursuant to IFRS 13 (2016)
€ million
December 31, 2016
Level 1
Quoted prices
Level 2
Derived prices
Level 3
Prices that cannot
be derived
Financial assets
Other financial receivables and financial assets
Available for sale
Loans and receivables
Other financial assets
Securities
Other investments
Loans to joint ventures
Loans to associated companies
Other loans
Total
Financial liabilities
Trade accounts payable
Other financial liabilities
Financial liabilities
Liabilities from finance leases
Derivative financial liabilities
Derivatives without hedging relationships
Derivatives with hedging relationships
Total
152.7
92.6
335.3
104.7
4.3
88.2
29.2
807.0
193.4
479.6
3,755.9
23.2
25.4
52.4
4,529.9
152.7
300.3
453.0
903.2
903.2
38.0
35.0
104.7
4.3
29.2
211.2
193.4
479.6
2,852.7
23.2
25.4
52.4
3,626.7
54.6
88.2
142.8
0.0
196
Group Notes / Notes to the Consolidated Income Statement
Fraport Annual Report 2017
Net results of the measurement categories
€ million
Financial assets
Loans and receivables
Available for sale
Financial liabilities
At amortized cost
Held for trading
2017
1.6
–1.7
–11.8
–3.6
2016
–0.8
14.3
0.9
11.8
The net result consists of changes in fair values recognized through profit or loss, impairment losses and write-ups recognized
through profit or loss, exchange rate changes, and gains and losses of disposals.
Interest and dividend income of the category “available for sale” are also included in the computation of the net result. Interest
and dividend income of the other categories are not included in the net result disclosed.
In addition to the recognized fair value changes, gains on financial liabilities in the “held for trading” category also include the fair
values of two interest rate swaps for which there were no hedged items in the course of the 2017 fiscal year. In addition, the
recognized change in the shareholders' equity option was included in this position.
Derivative financial instruments
With regard to the items in its statement of financial position and planned transactions, Fraport is, in particular, subject to interest
rate and currency exchange risks. Fraport covers interest rate risks by establishing naturally hedged positions, in which the values
or cash flows of primary financial instruments offset each other in their timing and amount, and/or by using derivative financial
instruments to hedge the business transactions. Derivatives are not used for trading or speculative purposes.
Interest rate risks arise in particular from the capital requirements associated with capital expenditure and from existing floating
interest rate financial liabilities and assets. As part of the interest rate risk management policy, interest swaps and interest swaps
with embedded floors were concluded in order to limit the interest rate risk arising from financial instruments with floating interest
rates and assure planning security.
An expense of €7.2 million was accrued within the scope of the acquisition valuation of derivatives in connection with the commit-
ment in Greece in April 2017. In the year under review, the value dropped by €0.4 million to €6.8 million, which was recognized
over the term due to the proportional release.
The Group holds 19 interest rate swaps as at the reporting date (previous year: 26). In relation to one interest rate swap (in the
previous year: two), a bank has the unilateral right to terminate the interest rate swap. The value of this right was taken into
account in the fair value of the interest rate swap.
Derivative financial instruments
€ million
December 31, 2017
Nominal volume
December 31, 2016
December 31, 2017
Fair value
December 31, 2016
December 31, 2017
Credit risk
December 31, 2016
Interest rate swaps
thereof hedge accounting
thereof trading
Share Option
691.2
561.2
130.0
0.0
755.0
605.0
150.0
0.0
–46.7
–27.6
–19.1
–50.2
–77.8
–52.4
–25.4
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
Fraport Annual Report 2017
Group Notes / Notes to the Consolidated Income Statement
197
The fair values of the derivative financial instruments are recorded as follows in the statement of financial position:
Fair values of derivative financial instruments
€ million
Interest rate swaps - cash flow hedges
Interest rate swaps - trading
Share Option
December 31, 2017
Other assets
December 31, 2016
December 31, 2017
Other liabilities
December 31, 2016
0.0
0.0
0.0
0.0
0.0
0.0
27.6
19.1
50.2
52.4
25.4
0.0
16 interest rate swaps (previous year: 22) are already assigned to existing floating interest-bearing liabilities.
A total of 16 interest rate swaps (previous year: 22) are accounted for as cash flow hedges in accordance with IAS 39. Changes
in the fair values of these instruments are recorded in a shareholders’ equity sub-account without affecting profit or loss. The
effectiveness of these cash flow hedges has been verified and is confirmed and documented at regular intervals. Three interest
rate swaps (previous year: four) are classified as “held for trading”. All changes in value resulting from this classification are
recorded through profit or loss.
The payments under the cash flow hedges become due in the following years. This is also the time when the respective hedged
item affects profit or loss.
Interest rate swaps (2017 hedge accounting)
€ million
Beginning of term
2008
2009
2010
2017
Total
There were the following time periods as at December 31, 2016:
Interest rate swaps (2016 hedge accounting)
€ million
Beginning of term
2007
2008
2009
2009
2010
2010
Total
End of term
Nominal value
December 31, 2017
Fair value
2018
2019
2020
2034
115.0
220.0
85.0
141.2
561.2
–3.8
–14.9
–10.3
1.4
–27.6
End of term
Nominal value
December 31, 2016
Fair value
2017
2018
2017
2019
2017
2020
60.0
115.0
25.0
220.0
100.0
85.0
605.0
–1.6
–8.8
–0.5
–24.9
–2.2
–14.4
–52.4
Unrealized losses of €1.6 million were recorded in shareholders' equity from the change in fair value of derivatives in the 2017
fiscal year (previous year: €4.3 million). During the year under review, losses of €26.1 million (previous year: €31.4 million) were
transferred from shareholders’ equity to the financial result. In addition, ineffectiveness of the interest rate swaps amounting to
€0.1 million was recorded through profit and loss (previous year: €0.2 million).
198
Group Notes / Notes to the Segment Reporting
Fraport Annual Report 2017
Notes to the Segment Reporting
41 Notes to the Segment Reporting
Segment reporting in the Fraport Group according to IFRS 8 is based on internal reporting to the Executive Board as principle
decision-maker and is attached as an appendix to the notes.
The same accounting principles as those used in the consolidated financial statements underlie segment reporting.
The strategic business units of Fraport AG at the Frankfurt site are clearly assigned to the Aviation, Retail & Real Estate, Ground
Handling and International Activities & Services segments. In addition, these segments include Group companies integrated in
the business processes at the Frankfurt site.
The Aviation segment incorporates the strategic business units "Airside and Terminal Management, Corporate Safety and Secu-
rity" and "Airport Security Management" as well as the Group companies involved in the processes at the Frankfurt site. As at
January 1, 2018, “Airport Security Management” has been fully integrated into the strategic business unit “Airside and Terminal
Management, Corporate Safety and Security” of Fraport AG.
The Retail & Real Estate segment consists of the strategic business unit “Retail and Properties”, comprising the retailing activities,
parking facility management, and the rental and marketing of real estate at the Frankfurt site. In addition, the Group companies
integrated into these activities on the Frankfurt site are allocated to this segment.
The Ground Handling segment combines the “Ground Services” strategic business unit and the Group companies involved in
these operations at the Frankfurt site.
The International Activities & Services segment encompasses in aggregate, due to the similarity of the economic criteria, the
Group companies that are not integrated in the processes at the Frankfurt site, and Group companies that carry out their business
operations outside the Frankfurt site (International Activities). The business operations of these companies consist of the operation
of airports outside the Frankfurt site or the provision of airport-related services, and are primarily aimed at the users of airport
infrastructure. In subareas, they are subject to country-specific regulatory requirements for the operation of airport infrastructure.
In addition, the internal service units Integrated Facility Management, Corporate Infrastructure Management, Airport Expansion
South, Information and Telecommunication and their Group companies and the strategic business unit Global Investments and
Management are assigned to the segment because they primarily provide internal services for the Fraport Group. Revenue of
€85.7 million, EBITDA of €23.1 million and EBIT of –€11.4 million result from the internal service units and their investments as
well as the acquisitions and investments section.
Corporate data at Fraport AG is divided into market-oriented business and service units on the one hand and into central units on
the other hand. All the business and service units are allocated clearly to one segment each. The central units are categorized
appropriately.
The data about the Group companies that are not integrated in the processes at the Frankfurt site and Group companies that
carry out their business operations outside the Frankfurt site are allocated to the International Activities & Services segment during
reporting. The Group companies that are integrated in the processes at the Frankfurt site are allocated to the relevant segment
according to their business operations.
Inter-segment revenue is primarily generated by the allocation of rent for land, buildings and space, as well as maintenance
services and energy supply within Fraport AG. The corresponding assets are allocated to the Retail & Real Estate segment. The
relevant units are charged on the basis of the costs incurred, including imputed interest.
Inter-segment income also reflects income that has been generated between the companies included from different segments.
Goodwill from business mergers and the appropriate impairment losses, where applicable, have been allocated clearly to a seg-
ment according to this segment structure.
Fraport Annual Report 2017
Group Notes / Notes to the Segment Reporting
199
The reconciliation of segment assets/segment liabilities column includes the income tax assets/liabilities (including the deferred
tax assets/liabilities) of the Group.
In the additional disclosures “Geographical Information”, allocation is according to the current main areas at operation: Germany,
Rest of Europe, Asia and Rest of the world. The figures shown under “Asia” relate mainly to Turkey and the People’s Republic of
China. The figures shown under “Rest of the world” relate mainly to the USA, Peru, and Brazil. The revenue of Lima Airport
Partners S.R.L., Lima, Peru, amounted to €325.6 million in 2017 (previous year: €305.7 million). The company holds non-current
intangible assets in connection with the recognition pursuant to IFRIC 12 of around €299.1 million as at the balance sheet date
(previous year: €312 million). In the “Rest of Europe” region, the two Greek companies contributed a total of €234.9 million to
revenue (see also note 2). The investments in airport operating projects according IFRIC 12 amounted to €1,741.8 million as at
December 31, 2017.
Additions of the fully consolidated Group companies in the fiscal year related to Fraport Brasil S.A. Aeroporto de Fortaleza, For-
taleza, Brazil, Fraport Brasil S.A. Aeroporto de Porto Alegre, Porto Alegre, Brazil and Fraport New York Inc., New York, USA. All
three companies were allocated to the International Activities & Services segment. The newly founded companies were not yet
active in the fiscal year and therefore had no material effects on the results of operations. The effect on the financial position is
shown in note 2. In addition, the joint ventures Frankfurt Airport Retail Verwaltungs GmbH, Frankfurt/Main and Frankfurt Airport
Retail GmbH & Co. KG, Hamburg were added to the Retail & Real Estate segment. The two additions did not have a material
effect on the segment reporting.
The disposal of the associated company Aerodrom Portoroz d.o.o. Secovlje, Slovenia (International Activities & Services segment)
had no material impact on the segment reporting.
Impairment losses on segment assets of the International Activities & Services segment were recognized pursuant to IAS 36 to
the value of €8.6 million (previous year: €7.4 million) (see also note 4 and note 20).
Segment assets of the Retail & Real Estate segment include real estate inventories of €10.6 million (previous year: €20.0 million).
During the 2017 fiscal year, revenue of €969.5 million was generated in all four segments from one customer (previous year:
€931.6 million). Further explanations about segment reporting can be found in the management report.
Notes to the Consolidated Statement of Cash Flows
42 Notes to the Consolidated Statement of Cash Flows
Cash flow from operating activities
Cash flow from operating activities of €790.7 million (previous year: €583.2 million) resulted in €1,056.0 million (previous year:
€809.9 million) from operating activities, €124.8 million (previous year: €102.9million) from financing activities, and €140.5 million
(previous year: €123.8 million) from cash flow used in taxes on income. The sharp increase in the operating area is primarily a
result of the take-over of operations of Fraport Regional Airports of Greece and its contribution to the Group result.
For the purposes of calculating the operating cash flow, the changes to liabilities compared to the previous year according to the
statement of financial position (€825.9 million) are adjusted for operations that had no direct impact on current cash flows for the
period or which can be assigned to cash flow used in investing or financing activities (€759.9 million).
Cash flow from operating activities includes cash outflows for fixed and variable concession payments in connection with the
airport operating projects.
200
Group Notes / Notes to the Consolidated Statement of Cash Flows
Fraport-Annual Report 2017
Cash flow used in investing activities
Cash flow used in investing activities excluding investments in cash deposits and securities amounted to €1,869.2 million (previous
year: €41.1 million), a significant increase of €1,828.1 million year on year. The large cash outflows resulted from the payment of
the initial one-off fees for airport operating projects in Greece and Brazil. In addition, the payments made in the previous year from
the Manila project and the sale of the shares in capital, loans and interest receivable in Thalita Trading Ltd. affected the change
in cash flow. The additions to investments in the airport operating projects of €2,197.9 million are adjusted in the cash flow for
non-cash accounting for the present value of the minimum concession payments (concession liability) of €618.9 million.
Major capital expenditure on property, plant, and equipment was made as part of the airport expansion program and the extension
projects at Frankfurt Airport.
The cash flow used in investing activities includes payments for capacitive capital expenditure in infrastructure in connection with
the airport operator projects.
Cash flow from financing activities
Cash flow from financing activities of €879.7 million (previous year: cash outflow of €347.6 million) resulted primarily from taking
on long-term financial liabilities to finance the airport operating projects in Greece and Brazil.
Other financing involved payments from long-term liabilities for financing purposes.
The following overviews show the composition of cash and cash equivalents and non-cash changes to the liabilities from financing
activities.
Reconciliation to the cash and cash equivalents as shown in the consolidated statement of financial position
€ million
December 31, 2017
December 31, 2016
Bank and cash balances
Time deposits with a remaining term of less than three months
Cash and cash equivalents as at the consolidated statement of cash flows
Time deposits with a remaining term of more than three months
Restricted cash
Cash and cash equivalents as at the consolidated statement of financial position
185.4
275.6
461.0
112.6
55.8
629.4
208.2
240.6
448.8
263.9
23.3
736.0
Changes in liabilities from financing acitivities
€ million
January 1, 2017 Cash inflow from
non-current
financial
liabilities
Repayment of
non-current
financial
liabilities
Cash-effective
changes in
current
financial
liabilities
Non cash-effective changes
December 31,
2017
Foreign currency
translation
effects
Changes in fair
value
Reclassifications
and other
changes
Non-current financial liabi-
lities
Current financial liabilities
Other financing activities
3,236.9
366.5
0.0
1,304.9
0.0
48.4
–356.3
0.0
0.0
0.0
–19.3
0.0
–9.9
–1.8
0.0
2.9
0.0
0.0
–222.9
230.0
0.0
3,955.6
575.4
48.4
Fraport Annual Report 2017
Group Notes / Other Disclosures
201
Other Disclosures
43 Contingent Liabilities
Contingent liabilities
€ million
Guarantees
Warranties
thereof contract performance guarantees
Other contingent liabilities
Total
December 31, 2017
December 31, 2016
1.2
342.7
294.2
22.8
366.7
1.2
196.8
140.2
39.8
237.8
The warranties concluded mainly result from the respective contract terms in connection with national and international investment
projects.
The guarantees primarily contain contract performance guarantees of €294.2 million, the most important of which are explained
below.
As at the balance sheet date, there were contract performance guarantees in connection with the two service concession agree-
ments concluded in 2015 for the 14 Greek Regional Airports (€51.4 million), the corresponding construction activities
(€51.4 million) and financing (€7.3 million). The operations of the airports were taken over in fiscal year 2017 (see note 48).
Fraport and the Brazilian Government signed concession agreements on July 28, 2017 for the operation and further development
of the Brazilian airports of Fortaleza and Porto Alegre (see note 48). This commitment resulted in performance guarantees of
€97.5 million.
A performance guarantee, excluding recourse against Fraport AG, was signed between GMR Holdings Private Ltd., Fraport AG,
and ICICI Bank Ltd. to the amount of €39.2 million (previous year: €41.9 million) to modernize, expand, and operate Delhi Airport
(India). If, however, the party to the contract, GMR Holdings Private Ltd., fails to meet its contractual obligations, Fraport AG’s
liability may not be excluded given the fact that Fraport AG is party to the contract.
The performance guarantee relating to the concession agreement for the operation of the airport in Lima, Peru, amounted to
€13.3 million as at the balance sheet date (previous year: €15.2 million).
The contractual performance of its Group company Fraport USA Inc. is guaranteed to a total of €12.7 million (previous year:
€17.2 million) in connection with the operation and development of commercial terminal areas at various US airports.
The contractual performance of its Group company Fraport Twin Star Airport Management AD is guaranteed to the amount of
€7.5 million (previous year: €7.5 million) in the context of operating the airports in Varna and Burgas, Bulgaria.
The other contingent liabilities include that Fraport AG is held liable to the amount of €9.7 million for rentals payable by Lufthansa
Cargo Aktiengesellschaft to ACC Animal Cargo Center Frankfurt GmbH if Lufthansa Cargo Aktiengesellschaft exercises an ex-
traordinary right to terminate the contract (previous year: €10.3 million), contingent liabilities at Lima from tax risks to the amount
of €12.7 million (previous year: €15.2 million).
There are contingent liabilities amounting to €42.7 million (previous year: €53.6 million) in connection with investments in joint
ventures.
202
Group Notes / Other Disclosures
Fraport Annual Report 2017
44 Other Financial Obligations
Order commitments for capital expenditure
€ million
December 31, 2017
December 31, 2016
Orders for capital expenditure in property, plant, and equipment and intangible assets
330.5
248.3
Order commitments for intangible assets comprise an insignificant portion of the total amount.
Operating leases
€ million
Rental and lease contracts
up to 1 year
more than 1 up to 5 years
more than 5 years
Total
December 31, 2017
December 31, 2016
23.2
72.7
46.2
142.1
29.3
53.1
32.8
115.2
In addition to order commitments, other financial obligations include future expenses arising from rental and leasing contracts.
The contracts entered into relate to building and land rental agreements and the lease of equipment. In view of their economic
content, the relevant leases qualify as operating leases, i.e. the leased asset is attributable to the lessor.
Other obligations
As at the balance sheet date, there were also other obligations amounting to €82.9 million (previous year: €74.2 million). These
relate largely to obligations arising from a long-term heat supply contract (€70.5 million, previous year: €69.2 million) with Mainova
AG. The other obligations include €4.5 million (previous year: €1.0 million) of obligations to joint ventures.
Revenue-related concession fees and additional obligations for capital expenditure of unspecified amounts on airport infrastruc-
ture have been agreed based on the existing concession agreements relating to the operation of the airports in Varna and Burgas,
Bulgaria; Lima, Peru; Fortaleza and Porto Alegre, Brazil; and the 14 Greek Regional Airports (see also note 48).
45 Long-Term Incentive Program
The Long-Term Incentive Program (LTIP) for the Executive Board and Senior Managers was introduced effective January 1, 2010.
A certain number of virtual shares (so-called performance shares) is allocated annually depending on certain performance objec-
tives. Target achievement is measured over four years (performance period); payment in cash takes place immediately at the end
of the four-year performance period.
The number of virtual shares actually allocated depends on the extent to which two performance targets are met:
> Earnings per Share (EPS) (target weighting 70%)
This internal performance target is determined by comparing the actual average EPS in the performance period with the
weighted average plan EPS at the time of awarding.
> Rank Total Shareholder Return MDAX (TSR) (target weighting 30%)
The TSR measures the development of shares over a certain period of time subject to dividends and share price develop-
ments. Therefore, it constitutes a market-dependent performance target.
The amount of the actual tranche is limited to 150% of the target tranche (virtual shares awarded) including any increase in value
from share price development.
Fraport Annual Report 2017
Group Notes / Other Disclosures
203
For all performance shares allocated from fiscal year 2014 onwards, the LTIP payment is limited to 150% of the product of the
performance shares of the target tranche multiplied by the “relevant share price at the time of issuance”. The “relevant share price
at the time of issuance” corresponds to the weighted average of the company’s closing share prices in XETRA or a similar trading
system replacing XETRA at the Frankfurt Stock Exchange during the month of January of the fiscal year, in which the relevant
performance period begins. A total of 47,525 virtual shares were issued in the 2017 fiscal year. A provision for the LTIP of
€8.9 million (previous year: €7.1 million) was reported as at December 31, 2017.
Expense reported in the 2017 fiscal year amounted to €5.4 million (previous year: €3.0 million). €3.5 million of which is attributable
to the Executive Board (previous year: €1.6 million) and €1.9 million is attributable to senior managers of Fraport AG (previous
year: €1.4 million).
Development of the fair values of the virtual shares for the Executive Board and Senior Managers
Tranche
All figures in €
Fiscal year 2014
Fiscal year 2015
Fiscal year 2016
Fiscal year 2017
Fair value December
31, 2017 Executive
Board
Fair value December
31, 2017 Senior
Managers
Fair value December
31, 2016 Executive
Board
Fair value December
31, 2016 Senior
Managers
82.85
77.53
78.87
80.03
82.85
76.97
74.75
77.25
52.94
52.02
50.52
49.28
51.79
47.18
43.39
49.28
On January 1 of the years 2014 to 2017, the Executive Board and Senior Managers in the Fraport Group were each promised a
tranche. The tranches for the Executive Board and for Senior Managers differ in the calculation of the extent to which objectives
have been reached for the targets in the weighting of the individual years of the performance period.
Virtual share conditions
The virtual shares in the 2017 tranche were issued on January 01, 2017. Their term is four years ending on December 31, 2020.
The payout per virtual share corresponds to the weighted average closing prices of the Fraport share in the XETRA trading system
on the first 30 stock market trading days immediately following the last day of the performance period.
Entitlement to the LTIP payment is established by approval by the Supervisory Board of the consolidated financial statements for
the last fiscal year of the performance period. Payments are made within one month.
The valuation of the virtual shares takes place on the basis of the fair value per share for a tranche. A Monte Carlo simulation is
used to determine the fair value. In this process, the log-normal distributed processes of the Fraport share price are simulated to
determine the relevant payment according to the respective performance targets.
The fair value of virtual shares to be measured in fiscal years 2014 to 2017 was calculated based on the following assumptions:
The basis of the computations on the respective valuation date was a continuous zero interest rate. The interest rates were
computed from the interest rate structures of government bonds maturing between one and ten years.
The computation basis for future dividend payments is public estimates made by ten banks. The arithmetic mean of these esti-
mates is taken to determine the dividends.
Historic volatility is used for the calculations. The calculations are based on the daily XETRA closing price for Fraport AG.
The remaining term of the LTIP is used as the time horizon to determine volatility.
204
Group Notes / Other Disclosures
Fraport Annual Report 2017
46 Risk management
Fraport is exposed to market price risks mainly due to changes in exchange rates and interest rates. The Group is additionally
exposed to credit risks. There are also liquidity risks arising in connection with credit and market price risks or resulting from a
worsening of the operating business or disturbances on the financial markets. It is the objective of financial risk management to
monitor and limit these risks by means of current operating and finance-related activities. Depending on a risk assessment, se-
lected hedging instruments are used for these purposes. In general, Fraport hedges only those risks that affect the Group’s cash
flows. Recently concluded derivative financial instruments are used exclusively as hedging instruments; i.e. they are not used for
trading purposes.
Reporting to the Executive Board of risk positions is made once per quarter as part of the early risk recognition system. In addition,
the Chief Financial Officer receives a current financial report each month with all important financial risk positions. These are also
part of the monthly Treasury Committee Meetings (TCM) in which the Chief Financial Officer and representatives of the financial
department participate. The processes of risk control and the use of financial instruments, among others, are regulated as part of
the Group’s financial guidelines. These regulations also include requirements for the unambiguous segregation of functions in
respect of operating financial activities, their settlement and accounting, and the controlling of the financial instruments. The
guidelines, which are the basis of the risk management processes, aim to limit and control the risks appropriately and monitor
them. Both the guidelines and the systems are regularly reviewed and adjusted to current market and product developments.
For further details, please refer to the opportunity and risk reporting in the group management report.
Credit risk
Fraport is subject to default risks from its operating business and certain financial positions. The default risks arising from financial
positions are controlled by a broad diversification of counterparties and issuers, as well as regular verification of their credit ratings
and the limits derived from this. It is the company’s risk policy that financial assets and derivative transactions are in principle only
carried out with issuers and counterparties with a credit rating of at least “BBB–”. If the credit rating is downgraded to a grade
worse than “BBB–” during the asset’s holding period or the term of the derivative, a decision will be made on a case-by-case basis
on how to deal with the asset or derivative in future, taking into account the remaining term.
The maximum credit risk on the balance sheet date is mainly reflected in the carrying amounts of the assets reported in the
financial position. The amount of the debt instruments corresponds to the credit risks of the securities and promissory note loans.
The breakdown on the balance sheet date is as follows:
Classification of securities
€ million
Debt instruments
December 31, 2017
December 31, 2016
388.9
524.0
Fraport Annual Report 2017
Group Notes / Other Disclosures
205
Securities and promissory note loans have the following long-term issuer ratings:
Issuer ratings of securities and promissory note loans (2017)
€ million
AAA
AA+
AA
AA–
A+
A
A–
BBB+
BBB
BBB–
BB
Not rated
Total
In 2016, the securities and promissory note loans had the following issuer ratings:
Issuer ratings of securities and promissory note loans (2016)
€ million
AAA
AA+
AA
AA–
A+
A
A–
BBB+
BBB
BBB–
BB+
Not rated
Total
December 31, 2017
0.0
0.0
19.5
78.9
72.8
53.4
27.9
68.6
27.2
25.6
10.0
5.0
388.9
December 31, 2016
0.0
15.6
29.9
79.7
78.2
65.1
80.4
93.7
14.3
40.3
10.0
16.8
524.0
The credit risk on liquid funds applies solely with regard to banks. Here, current cash deposits are maintained with banks. The
banks where liquid funds are deposited have the following long-term issuer ratings:
Issuer ratings of liquid funds (2017)
€ million
AAA
AA+
AA
AA –
A+
A
A –
BBB+
BBB
BBB –
BB+
BB
BB –
CCC+
Not rated
Total
December 31, 2017
0.0
0.0
0.0
73.2
0.0
135.1
112.2
81.7
50.2
1.0
0.0
24.9
0.3
36.7
114.1
629.4
206
Group Notes / Other Disclosures
Fraport Annual Report 2017
In 2016, the banks where liquid funds were deposited had the following issuer ratings:
Issuer ratings of liquid funds (2016)
€ million
AAA
AA+
AA
AA –
A+
A
A –
BBB+
BBB
BBB –
BB+
BB
BB –
CCC+
Not rated
Total
Liquidity risk
December 31, 2016
0.0
0.0
0.0
158.1
50.0
287.9
0.1
119.1
87.8
0.7
23.4
0.0
1.0
5.0
2.9
736.0
Fraport generates financial funds mainly through its operating business and external financing. The funds are primarily used to
finance capital expenditure for items of property, plant, and equipment and intangible assets.
The operating cash flow, the available liquid funds (including cash and cash equivalents and current realizable securities and
other financial instruments), as well as current and non-current credit lines and loan commitments, give sufficient flexibility to
ensure the liquidity of the Fraport Group. As at the balance sheet date, the Group had unused credit lines amounting to
€758.0 million (previous year: €580.4 million) available, of which €276.4 million are allocated for future capital expenditure in
infrastructure.
Given the diversity both of the financing sources, and the liquid funds, and financial assets, there is no risk of concentration in the
liquidity.
The operating liquidity management comprises a cash concentration process, which, on a daily basis, combines the liquid funds
of most of the Group companies headquartered in Germany. This allows optimum control of liquidity surpluses and requirements
in line with the needs of individual Group companies. Short and medium-term liquidity management includes the maturities of
financial assets and financial liabilities and estimates of the operating cash flow.
The following list of maturities shows how the liability cash flows as at December 31, 2017 influence the Group’s future liquidity.
Liquidity profile as at December 31, 2017
€ million
Total
2018
2019
2020 – 2024
2025 – 2029
2030 et seqq.
Interest Payment
Interest Payment
Interest Payment
Interest Payment
Interest Payment
Primary financial instruments
Financial liabilities
Finance leases
Concessions payable
Trade accounts payable
Other financial liabilities
Derivative financial instruments
Interest rate swaps
Thereof trading
Thereof hedge accounting
5,547.6
9.3
2,933.0
228.3
50.6
61.1
19.8
41.1
116.7
–
–
–
–
27.4
6.2
21.2
544.4
3.3
44.0
186.0
46.0
–
–
–
114.0
–
–
–
–
19.8
5.9
13.9
1,128.3
3.0
44.1
21.1
–
342.2
–
–
–
–
1,230.3
3.0
242.1
12.5
4.6
–
–
–
15.1
7.3
7.7
–
–
–
284.8
–
–
–
–
–0.3
0.4
–0.8
1,065.6
–
345.4
8.7
–
–
–
–
163.8
–
–
–
–
–0.9
–
–0.9
557.5
–
2,257.4
–
–
–
–
–
Fraport Annual Report 2017
Group Notes / Other Disclosures
207
The liquidity profile as at December 31, 2016 was as follows:
Liquidity profile as at December 31, 2016
€ million
Total
2017
2018
2019 – 2023
2024 – 2028
2029 et seqq.
Interest Payment
Interest Payment
Interest Payment
Interest Payment
Interest Payment
Primary financial instruments
Financial liabilities
Finance leases
Concessions payable
Trade accounts payable
Other financial liabilities
Derivative financial instruments
Interest rate swaps
Thereof trading
Thereof hedge accounting
4,035.0
23.5
659.3
188.5
39.3
83.1
26.3
56.8
86.3
–
–
–
–
30.7
6.4
24.3
338.7
10.5
28.5
146.7
29.8
–
–
–
82.7
–
–
–
–
24.6
6.1
18.5
516.5
6.9
22.6
23.0
0.5
189.9
–
–
–
–
2,169.4
6.1
118.3
11.2
0.2
–
–
–
26.5
12.5
14.0
–
–
–
82.8
–
–
–
–
1.3
1.3
–
293.2
–
127.7
7.6
1.1
–
–
–
17.4
–
–
–
–
–
–
–
258.1
–
362.2
–
7.7
–
–
–
All financial instruments that are subject to agreements as at the reporting date were included to determine the undiscounted
payments. If a contractual partner can release a payment at different points of time, the earliest deadline was taken into account.
The respective forward interest rates derived from the interest curve as at the balance sheet date were used to determine the
interest payments on primary financial liabilities bearing interest at floating rates and the net payments on derivative financial
instruments. The respective forward interest rates were used to determine the interest payments on primary financial liabilities in
foreign currency.
Financial liabilities of certain Group companies abroad arising from independent project financing with a nominal value of €692.0
million (previous year: €98.8 million) include numerous credit clauses that are typical for this type of financing. These clauses
include regulations under which certain debt service coverage ratios and control indicators for debt ratio and credit periods must
be complied with. Failure to comply with the agreed credit clauses may lead to restrictions on the distribution of dividends and/or
to the early redemption of loans or to the additional payment of shareholders’ equity. Additionally, there are contractually agreed
credit clauses for specific earmarked and/or project-related public loans issued by public business development banks of
€1,397.3 million (previous year: €940 million). These clauses relate, among other things, to changes in the shareholder structure,
and control of the company. If these changes have a proven negative effect on the credit rating of Fraport AG, the creditors have,
above a certain threshold, the right to call the loans due ahead of time.
All agreed borrowing terms and conditions were observed in 2017. There are currently no indications that there will be any failure
to comply with the essential agreed borrowing terms and conditions.
208
Group Notes / Other Disclosures
Fraport Annual Report 2017
Currency risk
The international focus of the Fraport Group makes its operating business, the financial results reported, and the cash flows
subject to foreign currency fluctuation risks. Within the Group, foreign currency risks mainly arise from revenue in foreign curren-
cies, that are not covered by expenses in matching currencies. This results in a cash flow risk between foreign currency revenue
and functional currency revenue. Only the transaction risks affecting cash flows are actively controlled. These mainly apply be-
tween the US Dollar (US$) and the Peruvian Nuevo Sol (PEN). To reduce the foreign currency effects in the operating business,
the transaction risk is assessed on an ongoing basis and hedged where necessary by using derivative financial instruments.
Entering into financial instrument transactions is the responsibility of the Group companies in close coordination with the Treasury
department of Fraport AG. The transaction risks are assessed by means of sensitivity analyses. The calculation rates on which
the analyses are based are the result of the mean value for the respective exchange rate in the period under review, less or in
addition to a standard deviation. Taking these assumptions as a basis, the result for the period would have been affected in the
year under review as follows:
Currency rate sensitivity
Risk in € million
Net income
December 31, 2017
Loss
Net income
December 31, 2016
Loss
US$/PEN
0.80
0.80
0.14
0.15
In addition, there are effects in the Group from the translation of foreign currency assets or liabilities into euros and/or from the
consolidation of Group companies not accounted for in euros. These translational risks are met as far as possible by applying
natural hedging.
Interest rate risk
The Fraport Group is exposed to interest rate risks on a variety of primary and derivative financial assets and liabilities, as well as
future planned capital requirements.
In regard to assets and liabilities that are currently held, the objective of refinancing at matching maturities is generally pursued.
The interest rate risk arising in the next twelve months is relevant for control. Therefore, it is assessed every quarter and reported
to the financial risk committee. Sensitivity analyses are prepared to determine the risk. These show the effects of changes in
market interest rates on interest payments, interest income and expenses, other profit or loss portions, and shareholders’ equity.
Interest rate changes are defined to be the maximum fluctuation of the key interest rate in the past for the respective currency
and the respective period of time and/or the maximum fluctuation of the ten-year euro swap rate in the past. Here, the deviation
in absolute terms is taken into consideration.
To limit the interest rate risks, derivative financial instruments, such as interest rate swaps, floors, and swaptions, are used.
The sensitivity analyses are based on the following assumptions:
Changes in market interest rates of primary financial instruments with fixed interest rates affect profit or loss, or shareholders’
equity, only if the instruments are measured at fair value. The sensitivity analysis for these financial instruments assumes a parallel
shift of the interest rate curve by 169 basis points over a period of twelve months.
The financial instruments measured at amortized acquisition cost with fixed interest rates do not affect the result for the period or
the shareholders’ equity of the Fraport Group.
Fraport Annual Report 2017
Group Notes / Other Disclosures
209
Market interest rate changes of primary floating-rate financial instruments that are not designated hedged items in a cash flow
hedge of interest rate exposures affect the interest result and are therefore included in the calculation of profit or loss related
sensitivities. The respective net financial position for each currency is taken into account in the process. The interest rate sensitivity
analysis is based on the following assumptions: in €: 3.25 percentage points; US Dollar (US$): 4.00 percentage points; Turkish
Lira (TRY): 10.00 percentage points; Peruvian Nuevo Sol (PEN): 6.70 percentage points; Saudi Riyal (SAR): 3.50 percentage
points; Bulgarian Lew (BGN): 5.22 percentage points; Hong Kong Dollar (HKD): 5.25 percentage points; Brazilian Real (BRL):
6.75 percentage points. The individual sensitivities are then aggregated to become one profit or loss related sensitivity in €.
Changes in market interest rates of financial instruments which were designated as hedging instruments in an interest rate related
cash flow hedge affect shareholders’ equity and are therefore included in the equity-related sensitivity computations. The maxi-
mum variability is taken to be a parallel shift of the interest rate curve by 169 basis points over a period of twelve months.
Changes in market interest rates of interest rate derivatives which are not part of a hedging relationship pursuant to IAS 39 affect
the other financial result and are therefore included in the profit or loss related sensitivities. The maximum variability is taken to
be a parallel shift of the interest rate curve by 169 basis points over a period of twelve months.
Based on the portfolios and the structure of the consolidated statement of financial position as at December 31, 2017 and the
assumptions made, the profit or loss-related sensitivity is €0.7 million in the event of an increase (decrease) in the market interest
rate (previous year: €13.0 million). This means that the financial result could hypothetically have increased (decreased) by
€0.7 million. This hypothetical effect on the result would have resulted from the potential effects of interest rate derivatives of
€7.6 million (previous year: €10.4 million) and an increase (decrease) in the interest result from primary floating-rate net financial
positions of –€6.9 million (previous year: €2.6 million).
Interest sensitivity on the financial result (169 basis points)
December 31, 2017
December 31, 2016
Interest sensitivity in €
million
Thereof from deriva-
tive financial instru-
ments
Thereof from primary
financial instruments
0.7
13.0
7.6
10.4
–6.9
2.6
The equity-related sensitivity is –€21.7 million (previous year: €2.0 million). By applying the assumptions made, an increase (de-
crease) in interest rates would have resulted in an increase (decrease) in shareholders’ equity of –€21.7 million.
Assuming a parallel shift in the interest rate curve of 35 basis points (previous year: 49 basis points) over a twelve-month period
in the current interest rate environment gives the following results-oriented interest sensitivity:
Interest sensitivity on the financial result in the current interest rate environment
December 31, 2017
December 31, 2016
Interest sensitivity in €
million
Thereof from deriva-
tive financial instru-
ments
Thereof from primary
financial instruments
–5.3
5.6
1.6
3.0
–6.9
2.6
The equity-related sensitivity for 35 basis points (previous year: 49 basis points) is –€4.5 million (previous year: €0.6 million). By
applying the assumptions made, an increase (decrease) in interest rates would have resulted in an increase (decrease) in share-
holders’ equity of –€4.5 million.
210
Group Notes / Other Disclosures
Fraport Annual Report 2017
Capital management
The Group’s objectives with a view to capital management are ensuring the company’s continued existence and a sustained
increase in the company’s value. As a capital market-oriented company with continuing capital expenditure requirements, Fraport
monitors the development of its financial debt using ratios that relate EBITDA to net financial debt and/or interest expense. As
long as the company remains within the following margins, Fraport’s present view is that there is sufficient access to debt capital
sources at reasonable costs.
The components of the control indicators are defined as follows:
Components of the control indicators
Net financial debt
EBITDA
Interest expense
Current financial liabilities
+ Non-current financial liabilities
– Liquid funds
– Current realizable assets in “other financial assets” and “other receivables
and financial assets”
Operating result + depreciation and amortization
Interest expense
The financial ratios developed as follows in the period under review:
Financial debt ratios
Key figures
Net Debt/EBITDA
EBITDA/interest expense
Corridor
December 31, 2017
December 31, 2016
max. 4 – 6 x
min. 3 – 4 x
3.5
5.4
2.2
7.6
On the basis of a financial institution license, Fraport Malta Business Ltd. finances both companies controlled by Fraport AG and
joint ventures and associated companies in the Group. There are minimum capital requirements due to regulatory requirements
in connection with the existing financial institution license. In particular, with regard to lending to companies in which Fraport AG
directly or indirectly only holds a minority interest, special minimum capital requirements in relation to the amount lent complied
with by the company as at the balance sheet date are to be observed per loan. The minimum capital requirements were consist-
ently met during fiscal year 2017. Capital management is performed by the company taking account of the regulatory conditions
set by the EU and the Maltese financial supervisory authority.
47 Related Party Disclosures
Relationships with related parties and the State of Hesse
Alongside the Group companies included in the consolidated financial statements, in the context of the course of ordinary business
operations, the Group is also related to parties that are not included as well as associated companies and joint ventures, which
are parties related to the Group according to IAS 24. Thus, Fraport AG has numerous business relationships with the State of
Hesse and the City of Frankfurt and their majority-owned investments. Related companies and authorities with which major busi-
ness relationships are maintained include Landesbetrieb Hessen-Forst, Mainova AG, and Messe Frankfurt Venue GmbH & Co.
KG.
Fraport Annual Report 2017
Group Notes / Other Disclosures
211
All transactions with related parties have been concluded under conditions customary in the market as with unrelated third parties.
The services rendered to authorities are generally based on cost prices. The following table shows the scope of the respective
business relationships:
Relationships with related parties and the State of Hesse
€ million
Majority shareholders
State of Hesse
Stadtwerke
Frankfurt am
Main Holding
GmbH
Joint Ventures Associated com-
panies
Companies
controlled and
significantly
influenced
by majority
shareholders
Revenue
Purchased goods and services
Interest
Accounts receivable
Loans
Liabilities
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
0.8
0.7
2.2
4.6
0.0
–0.8
0.0
0.0
0.0
0.0
0.0
0.1
0.3
0.3
9.2
10.0
0.0
0.0
0.0
0.0
0.0
0.0
0.2
0.5
142.5
41.5
14.0
15.8
0.2
0.1
17.6
11.4
12.8
4.3
11.2
5.1
6.6
8.0
31.2
33.1
14.6
17.2
50.8
60.5
84.8
87.2
11.8
4.6
6.3
5.6
77.0
95.1
0.0
0.0
0.2
0.0
0.0
0.0
0.5
8.5
Receivables from associated companies primarily relate to deferred interest receivables from issued loans.
Regarding contingent liabilities and other financial obligations to joint ventures, please refer to note 43 and note 44. Regarding
other obligations to related parties, see note 44.
Relationships with related persons
The Executive Board, Supervisory Board, and their family members are defined as related persons pursuant to IAS 24.
Remuneration for management in key positions in accordance with IAS 24 comprises the remuneration of the active Executive
Board and Supervisory Board.
These were compensated as follows:
Remuneration of management
€ million
Salaries and other short-term employee benefits
Termination benefits
Post-employment benefits
Other long-term benefits
Share-based remuneration
Total
2017
2016
4.8
0.0
1.2
0.4
1.5
7.9
4.8
0.0
1.1
0.4
1.5
7.8
Information regarding salaries and other short-term employee benefits for employee representatives on the Supervisory Board
exclusively includes remuneration for their Supervisory Board activities. In addition, they receive remuneration customary for the
market in the context of their work as employees.
Post-employment benefits include service costs from pension provisions for the active members of the Executive Board.
The benefits granted for the Long-Term Strategy Award (LSA, see also note 53) were accounted for as other long-term employee
benefits in fiscal year 2017.
212
Group Notes / Other Disclosures
Fraport Annual Report 2017
The statement of share-based remuneration includes the granted amount for the Long-Term Incentive Program awarded in the
2017 fiscal year (LTIP, see also note 53).
At the end of the fiscal year, there were outstanding balances for the Executive Board members’ bonuses amounting to
€1.4 million (previous year: €1.3 million).
48 Operating Permit and Service Concession Agreements
The following Group companies in the Fraport Group have been granted service concessions or similar permits, which give the
public access to important economic and social facilities:
Fraport AG
In agreement with the German Federal Minister of Transport, the Minister of Labor, Economics, and Transport for the State of
Hesse approved operations at Frankfurt Main Airport in accordance with Section 7 as amended on August 21, 1936, of the German
Air Traffic Act on December 20, 1957. This permit does not expire at any specific time and was last amended by the decision of
October 29, 2012 based on the outcome of the planning approval notice for the expansion of the airport, in particular regarding
Runway Northwest, taking into account the relevant ruling of the German Federal Administrative High Court.
The right to operate the airport is linked to various obligations that are specified in the permit. According to this, Fraport AG is
required, among other things, to keep the airport in good operating condition at all times, to provide and maintain the equipment
and signs needed to monitor and control air traffic at the airport, and to guarantee the availability of fire prevention and protection
systems that take account of the special operating conditions. The restrictions on night flight traffic that were initially imposed in
1971 and subsequently updated have been tightened by the aforementioned amendment and extension to the permit. Also day-
time operational restrictions on aircraft for civil aviation purposes at Frankfurt Main Airport that do not comply with the International
Civil Aviation Organization (ICAO) noise protection regulations have been further tightened. Furthermore, there are statutory
requirements for passive noise abatement and outdoor living area compensation as a result of the construction work for the airport
expansion around Runway Northwest.
The company charges airlines that fly to Frankfurt Airport what are known as “traffic charges” for provision of the transport infra-
structure. These traffic charges are broken down into airport charges that require approval and other charges that do not require
approval.
> The airport charges that require approval according to Section 19b of the German Air Traffic Law (LuftVG) are divided into
takeoff and landing charges, including noise components and emission charges, parking charges, and passenger and security
charges, as well as charges for the financing of passive noise abatement measures (noise surcharges). The amount of the
charges is specified in a related charge table.
Airport charges rose by 1.9% beginning on January 1, 2017. The new charge table approved by the HMWEVL was published
in the Air Transport Bulletin (NfL). Charges for the financing of passive noise abatement measures (noise surcharges) have
been levied since July 1, 2012 (see also note 25). The charge table includes an incentive program for continuous and sustain-
able passenger growth on routes outside Germany with low-noise aircraft. The refund amounts distinguish between whether
the growth is achieved through existing or new airlines and whether the targets are new or existing ones. Airport charges ac-
counted for 36.92% (previous year: 36.75%) of Fraport AG’s revenue in the year under review.
> The remaining charges not subject to approval are classified as charges for central ground service infrastructure facilities and
ground service charges. In accordance with EU regulations, ground services on the apron were opened up to competition on
November 1, 1999 (opened up in practice on April 15, 2000), by issuing a permit to another third-party ground handling com-
pany along with Fraport AG. The services in the area of central ground service infrastructure facilities continue to be excluded
from competition (monopoly sector) and are completely segregated from the ground services when they are offset with the
airlines. Of Fraport AG’s revenue in 2017, 15.12% was generated by ground services (previous year: 15.17%) and 14.42% by
infrastructure charges (previous year: 14.54%).
Above and beyond the traffic charges, Fraport AG generates revenue essentially from revenue-based payments, renting and
parking, and security services. The proceeds from these operations which do not require approval accounted for 33.54% (previous
year: 33.54%) of Fraport AG’s entire revenue in the year under review.
Fraport Annual Report 2017
Group Notes / Other Disclosures
213
Fraport Twin Star Airport Management AD
Fraport Twin Star Airport Management AD (operator) and the Republic of Bulgaria (grantor), represented by its Minister of
Transport, signed a concession agreement on September 10, 2006, for the operation and management of the Bulgarian airports
in Varna and Burgas on the Black Sea.
According to the concession agreement, the operator is obligated to render various airport services and to improve services in
line with international standards, national laws, and the provisions stipulated in the concession agreement. Moreover, the operator
has capital expenditure obligations of unspecified amounts for the expansion and a capacity increase of the airports in Varna and
Burgas and to maintain the assets ceded for use. In addition, the operator pays an annual concession fee of 19.2% of total
revenue, at least 19.2% of BGN57 million (€29.1 million), adjusted for the development of the national inflation rate, to the grantor.
The operator paid an additional non-recurring concession fee in the amount of €3.0 million to the grantor after the agreement was
signed. In return, the operator receives the right to use the existing and future infrastructure for airport operations and the right to
generate revenues, in particular through airport charges (passenger, landing, and parking fees), and for ground handling services.
Airport charges are regulated by the grantor.
The concession agreement started on November 10, 2006, and has a duration of 35 years. There are no options for renewal.
Contract performance guarantees must be granted to the grantor depending on the phase of the project (also see note 43).
At the end of the concession term, the infrastructure pursuant to the contract that is essential for airport operations must be
returned to the grantor in proper operating condition without receiving any consideration in return.
Lima Airport Partners S.R.L. (LAP)
On February 14, 2001, LAP (operator) and the Peruvian government (grantor) signed the concession agreement for Jorge Chavez
International Airport on the operation, expansion, maintenance, and use of the Jorge Chavez International Airport in Lima (Peru).
With the upcoming expansion of the Airport, both parties concluded additional material amendments to the existing concession
agreement on July 25, 2017.
The term of the concession agreement was extended from 30 to 40 years, until 2041. Furthermore, there is a 10-year extension
option. By concluding the amendments, the land required for the expansion of the Airport was handed over to the company, and
in return it is obliged to construct a new runway by the end of 2022 and a new passenger terminal by the end of 2024. The original
contractual amount of US$100 million has already been invested. The pending capital expenditure is expected to be around
US$1.5 billion.
In addition to the capital expenditure, the company has additional obligations in connection with the operation and maintenance
of airport infrastructure.
The operator is obligated to pay concession fees. The concession fee is the higher of two amounts: either the contractually fixed
minimum payment (basic payment of US$15 million per year, adjusted by US CPI) or 46.511% of total revenue after deduction
and transfer to Corpac (Aviation Regulatory Authority) of 50% of landing charges and 20% of the international passenger charges
(TUUA). In addition, a regulatory charge of 1% of the same assessment basis is payable. In return, the operator receives the right
to use the existing and future infrastructure for airport operations and the right to generate revenue, in particular through airport
charges (passenger, landing, and parking fees), and for ground handling and other services. Airport charges are regulated by the
grantor.
Contract performance guarantees must be granted to the grantor depending on the phase of the project (also see note 43).
214
Group Notes / Other Disclosures
Fraport Annual Report 2017
At the end of the contract term, the infrastructure pursuant to the contract that is essential for airport operations must be returned
to the grantor by the operator in the contractually defined operational condition. The operator has the right to have the residual
carrying amount of said infrastructure reimbursed by the grantor for a limited period of time. This does not apply if the concession
agreement is terminated early.
Fraport Regional Airports of Greece
The two concession agreements, each for the operation of seven Greek regional airports, were signed between Fraport AG and
its Greek consortium partner with the Hellenic Republic Asset Development Fund (HRADF) on December 14, 2015. After fulfilling
all conditions precedent, the take-over of the operating business of the 14 Greek regional airports took place on April 11, 2017.
The initial term of each concession agreement is 40 years.
In return for the right to operate the Greek airports, an initial one-time fee of €1,234 million was paid. Initial annual minimum
concession payments of €11.3 million per annum for Fraport Greece A and €11.6 million per annum for Fraport Greece B were
agreed over the term of the concessions. The minimum concession payments will be adjusted for inflation. In addition, from the
beginning of the concession an additional levy of approximately €1 per departing passenger is payable to the grantor for the entire
term. From 2020, a variable concession fee of 28.2% of the EBITDA of Fraport Greece A and 28.9% of the EBITDA of Fraport
Greece B will also be payable.
Furthermore, the consortium partners are obliged to invest in measures to upgrade and expand the airport infrastructure by 2020.
In addition, additional capital expenditure for the maintenance of the airports and transport-related capacity expansions will be
made in subsequent years. The total capital expenditure over the first four years is expected to be around €400 million.
In return, the operator is entitled to charge fees for its services, in particular state-regulated airport charges (passenger, landing,
and parking fees) as well as other non-regulated levies related to air traffic and other services.
Contract performance guarantees must be granted to the grantor depending on the phase of the project (also see note 43).
At the end of the concession term, the operator must return the airports to the grantor, including any capital expenditures made,
in a defined and proper operating condition. There will be no consideration given in return.
Fraport Brasil Aeroporto de Fortaleza and Fraport Brasil Aeroporto de Porto Alegre
The Fraport Group and the Brazilian Government signed concession agreements on July 28, 2017 for the operation and further
development of the Brazilian airports of Fortaleza and Porto Alegre. After paying the initial one-off fees, adjusted for inflation, of
BRL291.8 million (€73.5 million) for Porto Alegre and BRL426.9 million (€107.5 million) for Fortaleza as well as fulfilling other
conditions precedent, the term of the concession agreements of 30 years for Fortaleza Airport and of 25 years for Porto Alegre
Airport started at the end of August 2017. The Fraport Group took over operations of both airports on January 2, 2018.
In addition to the paid initial concession fees, additional acquisition costs of approximately €54.2 million were incurred by the
Fraport Group within the scope of acquiring the concession.
In addition to the aforementioned payments, additional fixed minimum concession payments plus inflation-related adjustments (at
the time of signing the agreements for both airports these totaled BRL1,080.7 million or approximately €272.2 million) must be
made from 2023. Also, an annual variable concession payment of 5% of revenue must be effected.
Fraport Annual Report 2017
Group Notes / Other Disclosures
215
Furthermore, the agreements stipulate certain specific investment obligations for the modernization and expansion of the current
airport infrastructure as well as construction of new airport infrastructure. Currently, Fraport expects capital expenditure in the
airport infrastructure of around €700 million, dependent on future exchange rates, in the first five years. The companies also laid
out other contractually-defined standards and obligations relating to the operation, availability, use, and maintenance of the air-
ports.
Contract performance guarantees must be granted to the grantor depending on the phase of the project (also see note 43).
In return for the right to operate the two airports, the operator is entitled to charge fees for its services, in particular state-regulated
airport charges (passenger, landing and parking fees) as well as other non-regulated levies related to air traffic and other services.
At the end of the concession term, the operator must return the airport infrastructure to the grantor in a condition that guarantees
the proper continued operation of the airports. There will be no consideration given in return.
49 Significant Events after the Balance Sheet Date
No reportable events took place after the balance sheet date.
50 Exemption pursuant to Section 264 (3) of the HGB
The following German subsidiaries claim the exemptions under Section 264 (3) of the HGB for the 2017 fiscal year:
> Airport Assekuranz Vermittlungs-GmbH
> Airport Cater Service GmbH
> Flughafen Kanalreinigungsgesellschaft mbH
> Fraport Ausbau Süd GmbH
> Frankfurter Kanalreinigungsgesellschaft mbH
> Fraport Casa GmbH
> Fraport Passenger Services GmbH
> FRA - Vorfeldkontrolle GmbH
The subsidiaries Energy Air GmbH and FraGround Fraport Ground Services GmbH claim the exemptions under Section 264 (3)
of the HGB for the 2017 fiscal year regarding the provisions of the First Subsection (annual financial statements of the corporation
and management report) and the Fourth Subsection (disclosure).
51 Information on Investments pursuant to the German Securities Trading Act (WpHG)
Fraport AG received the following notifications pursuant to Section 21 (1) of the WpHG in fiscal year 2017:
BlackRock, Inc, Wilmington, USA, informed us on December 20, 2017, in accordance with Section 21 (1) of the WpHG, that its
voting rights in Fraport AG Frankfurt Airport Services Worldwide, Frankfurt/Main, Germany, exceeded the threshold of 3% of
voting rights on December 20, 2017 and on that day amounted to 3.03% (2,803,570 voting rights).
BlackRock, Inc, Wilmington, USA, informed us on December 21, 2017, in accordance with Section 21 (1) of the WpHG, that its
voting rights in Fraport AG Frankfurt Airport Services Worldwide, Frankfurt/Main, Germany, amounted to 3.12% on December 21,
2017 (2,888,516 voting rights).
216
Group Notes / Other Disclosures
Fraport Annual Report 2017
As at December 31, 2017, the shareholder structure of Fraport AG was as follows:
The total voting rights in Fraport AG held by the State of Hesse and Stadtwerke Frankfurt am Main Holding GmbH calculated in
accordance with Section 22 (2) of the WpHG amounted to 51.34% as at December 31, 2017. They were attributed as follows:
State of Hesse 31.31% and Stadtwerke Frankfurt am Main Holding GmbH 20.03%.
The voting rights in Fraport AG owned by the City of Frankfurt/Main are held indirectly via the Stadtwerke Frankfurt am Main
Holding GmbH subsidiary.
According to the last official report in accordance with the WpHG or disclosures by individual shareholders, the other voting rights
in Fraport AG were attributable as follows (as at December 31, 2017): Deutsche Lufthansa AG 8.44%, Lazard Asset Management
LLC 5.05%, and BlackRock Inc. 3.12%. The relative ownership interests were adjusted to the current total number of shares as
at the balance sheet date and may therefore differ from the figures given at the time of reporting or from the respective sharehold-
ers’ own disclosures.
There are no reports for the remaining 32.05% (free float).
52 Statement Issued by the Executive Board and the Supervisory Board of Fraport AG pursuant to Section 161 of
the AktG
On December 11, 2017, the Executive Board and the Supervisory Board of Fraport AG issued the Statement of Compliance with
the Corporate Governance Code pursuant to Section 161 of the AktG and made it available to the public on a permanent basis
on the company website www.fraport.com/corporategovernance.
53 Information Concerning the Executive Board, Supervisory Board, and Economic Advisory Board
Remuneration of the Executive Board and Supervisory Board in fiscal year 2017
The essential features of the remuneration system, and the information on the individualized remuneration of the Executive Board
and the Supervisory Board, are shown in the remuneration report. The remuneration report is part of the management report.
Total remuneration of the Executive Board amounted to €5,956.2 thousand (previous year: €5,805.6 thousand) plus service costs
for pensions of €1,158.3 thousand (previous year: €1,089.5 thousand).
As part of the Long-Term Strategy Award (LSA), each Executive Board member is promised a prospective financial reward for
one fiscal year, the first being in 2010 for fiscal year 2013. After three fiscal years have expired (the fiscal year in question and
the two following years), the extent to which the targets have been met is determined and the actual payment is calculated based
on these results. The paid amount can exceed or fall below the prospective amount but is capped at 125% of the amount originally
stated. Performance targets are customer satisfaction, sustained employee development, and share performance. All three tar-
gets are equally important under the LSA. Total obligations as part of the LSA amounted to €924 thousand as at December 31,
2017 (previous year: €535 thousand). The fair values of the LSA for Dr Schulte amounted to €149.9 thousand as at the balance
sheet date, December 31, 2017, for the 2015 tranche (previous year: €106.6 thousand), €132.5 thousand for the 2016 tranche
(previous year: €103.8 thousand) and €137.0 thousand for the 2017 tranche. The fair values of the LSA for Ms Giesen, Mr Müller,
and Dr Zieschang amounted to €112.8 thousand each as at December 31, 2017 for the 2015 tranche (previous year:
€75.8 thousand), €99.4 thousand each for the 2016 tranche (previous year: €72.8 thousand) and €102.5 thousand for the 2017
tranche.
The Executive Board received short-term remuneration components of €2,653.7 thousand for fiscal year 2017 (previous year:
€2,430.5 thousand). In addition, long-term remuneration components were allocated with an issue fair value of €1,456.3 thousand
(2017 LTIP tranche) and €390.0 thousand (2017 LSA tranche) as part of the LTIP and LSA programs (previous year for the 2016
LTIP tranche: €1,504.2 thousand, 2016 LSA tranche: €390.0 thousand).
Fraport Annual Report 2017
Group Notes / Other Disclosures
217
All active members of the Supervisory Board received total remuneration of €894 thousand in the 2017 fiscal year (previous year:
€902 thousand).
No loans or advances were granted to members of the Executive Board or the Supervisory Board in the fiscal year.
Former Executive Board members and their surviving dependents received €1,638 thousand (previous year: €1,612 thousand).
The pension obligations towards active members of the Executive Board as at the balance sheet date were €13,633 thousand
(previous year: €12,056 thousand) and towards former Executive Board members and their surviving dependents €24,433 thou-
sand (previous year: €24,949 thousand).
The information concerning the members of the Executive Board and Supervisory Board is presented in note 54 and note 55.
Remuneration of the Economic Advisory Board in fiscal year 2017
In the 2017 fiscal year, aggregate remuneration of the Economic Advisory Board amounted to €104.0 thousand (previous year:
€109.3 thousand).
Notifications pursuant to Article 19 of the Market Abuse Regulation (MAR)
Pursuant to Article 19 of the MAR, members of the Executive Board and Supervisory Board of Fraport AG are required to disclose
transactions with shares of Fraport AG or any related financial instruments to the company and the German Federal Financial
Supervisory Authority (BaFin) within three business days. This also applies to persons who are closely related to members of the
Executive Board and Supervisory Board as defined in Article 19 of the MAR. These transactions have been published by
Fraport AG in accordance with the deadlines under Article 19 of the MAR.
218
Group Notes / Other Disclosures
Fraport Annual Report 2017
54 Executive Board
Mandates of the Executive Board
Members of the Executive Board
Chairman of the Executive Board
Dr. Stefan Schulte
Executive Director Operations
Anke Giesen
Executive Director Labor Relations
Michael Müller
Executive Director Controlling & Finance
Dr. Matthias Zieschang
55 Supervisory Board
Mandates of the Supervisory Board
Members of the Supervisory Board
Chairman of the Supervisory Board
Karlheinz Weimar
Former Finance Minister of the State of Hesse
(Remuneration 2017: €62,200; 2016: €64,600)
Vice-Chairman
Gerold Schaub
ver.di Hessen
(Remuneration 2017: €54,150; 2016: €57,350)
Claudia Amier
Chairperson of the Works Council
(Remuneration 2017: €57,350; 2016: €59,750)
Memberships in mandatory Supervisory Boards
and comparable control bodies
Chairman of the Supervisory Board:
> Fraport Ausbau Süd GmbH
Member of the Supervisory Board:
> Deutsche Post AG
Chairman of the Board of Group companies:
> President of the Board of Directors Fraport Regional Airports of
Greece (A S.A., B S.A., Management Company S.A.)
> Chairman of the Supervisory Board Fraport Brasil S.A. Aeroporto
de Porto Alegre (from December 4, 2017)
> Chairman of the Supervisory Board Fraport Brasil S.A. Aeroporto
de Fortaleza (from December 4, 2017)
Member of the Supervisory Board:
> AXA Konzern AG
> Fraport Ausbau Süd GmbH
Chairman of the Supervisory Board:
> FraSec Fraport Security Services GmbH
Member of the Supervisory Board:
> Fraport Ausbau Süd GmbH
Member of the Shareholders’ Meeting:
> Airport Cater Service GmbH
> Medical Airport Service GmbH
> Terminal for Kids gGmbH
Member of the Supervisory Board:
> Fraport Ausbau Süd GmbH
> Flughafen Hannover-Langenhagen GmbH
Member of the Board of Group companies:
> Member of the Board of Directors Fraport Regional Airports
of Greece (A S.A., B S.A., Management Company S.A.)
Member of the Shareholders’ Meeting:
> Flughafen Hannover-Langenhagen GmbH
Member of the Administrative Board:
> Frankfurter Sparkasse
Memberships in mandatory Supervisory Boards
and comparable control bodies
Member of the University Council:
> University of Frankfurt am Main
Member of the Board of Trustees:
> Institute for Law and Finance
Member of the Administrative Board:
> Krankenhausgesellschaft St. Vincenz mbh Limburg
Vice-Chairman of the Supervisory Board:
> LSG Lufthansa Service Holding AG (until August 29, 2017)
> FraGround Fraport Ground Services GmbH
> LSG Sky Chefs Frankfurt ZD GmbH (until August 29, 2017)
Member of the Supervisory Board:
> operational Services GmbH & Co. KG
Fraport Annual Report 2017
Group Notes / Other Disclosures
219
Mandates of the Supervisory Board
Members of the Supervisory Board
Devrim Arslan
Chairman of the Works Council of
FraGround Fraport Ground Services GmbH
(Remuneration 2017: €41,300; 2016: €41,300)
Uwe Becker
Mayor and City Treasurer of the City of Frankfurt am Main
(Remuneration 2017: €45,300; 2016: €40,500)
Hakan Cicek
Member of the Works Council relieved of duty
(Remuneration 2017: €36,300; 2016: €36,300)
Kathrin Dahnke
Member of the Executive Board at Wilh. Wehrhahn KG
(Remuneration 2017: €36,300; 2016: €37,100)
Memberships in mandatory Supervisory Boards
and comparable control bodies
Member of the Supervisory Board:
> FraGround Fraport Ground Services GmbH
Membership in mandatory control bodies:
> Stadtwerke Verkehrsgesellschaft Frankfurt am Main mbH
(Chairman)
> Mainova AG (Chairman)
> Messe Frankfurt GmbH
> Stadtwerke Frankfurt am Main Holding GmbH
> Süwag Energie AG
Membership in comparable control bodies:
> Hafenbetriebe der Stadt Frankfurt am Main
> Kommunale Kinder-, Jugend- und Familienhilfe
Frankfurt/Main
> Marktbetriebe der Stadt Frankfurt am Main
> Stadtentwässerung Frankfurt am Main
> Kita Frankfurt
> Städtische Kliniken Frankfurt am Main-Höchst
> Volkshochschule Frankfurt am Main
> Dom Römer GmbH (Vice Chairman)
> Gas-Union GmbH (Chairman)
> Gateway Gardens Projektentwicklungs-GmbH
> Nassauische Sparkasse
> Kliniken Frankfurt-Main-Taunus GmbH
> Sportpark Stadion Frankfurt am Main Gesellschaft für
Projektentwicklungen mbH
> Tourismus- und Congress GmbH Frankfurt am Main
> Wirtschaftsförderung Frankfurt – Frankfurt Economic
Development – GmbH (until December 31, 2017)
> Zentrale Errichtungsgesellschaft mit beschränkter Haftung
(until December 27, 2017)
> RMA Rhein-Main Abfall GmbH
> RTW Planungsgesellschaft mbH
Member of the Supervisory Board
(wholly owned subsidiaries of Wilh. Wehrhahn KG):
> Bank11 für Privatkunden und Handel GmbH
> abcbank GmbH
Chairperson of the Supervisory Board:
> ZWILLING J.A. Henckels AG (unitl May 31, 2017)
> Basalt-Actien-Gesellschaft (from June 1, 2017)
Vice-Chairperson of the Supervisory Board:
> Basalt-Actien-Gesellschaft (unitl May 31, 2017)
> ZWILLING J.A. Henckels AG (from June 1, 2017)
Member of the Supervisory Board:
> B.Braun Melsungen AG
Member of the Administrative Board
(wholly owned subsidiary of Wilh. Wehrhahn KG):
> abcfinance GmbH
Member of the Executive Board
(wholly owned subsidiary of Wilh. Wehrhahn KG):
> Wehrhahn Industrieholding AG
220
Group Notes / Other Disclosures
Fraport Annual Report 2017
Mandates of the Supervisory Board
Members of the Supervisory Board
Peter Feldmann
Lord Mayor of the City of Frankfurt am Main
(Remuneration 2017: €41,300; 2016: €38,100)
Peter Gerber
Chairman of the Executive Board of Lufthansa Cargo AG
(Remuneration 2017: €26,500; 2016: €27,300)
Dr. Margarete Haase
Member of the Executive Board of DEUTZ AG
(Remuneration 2017: €67,000; 2016: €68,600)
Frank-Peter Kaufmann
Member of the Hessian State Parliament
(Remuneration 2017: €46,900; 2016: €49,300)
Lothar Klemm
Former Hessian State Minister
(Remuneration 2017: €58,150; 2016: €58,150)
Dr. Roland Krieg
Head of the service unit Information and Telecommunication
(Remuneration 2017: €37,900; 2016: €37,900)
Michael Odenwald
State Secretary of the German Federal Ministry for Transport
and Digital Infrastructure
(Remuneration 2017: €34,700; 2016: €33,900)
Memberships in mandatory Supervisory Boards
and comparable control bodies
Chairman of the Supervisory Board:
> ABG FRANKFURT HOLDING Wohnungsbau- und
Beteiligungsgesellschaft mbH
> Messe Frankfurt GmbH
> Stadtwerke Frankfurt am Main Holding GmbH
> KEG Konversions-Grundstücksentwicklungs-Gesellschaft mbH
Membership in Supervisory Boards and comparable control bodies
of business enterprises:
> Alte Oper Frankfurt Konzert- und Kongresszentrum GmbH
(Chairman)
> Dom Römer GmbH (Chairman)
> FrankfurtRheinMain GmbH International Marketing of the Region
(Chairman)
> Gas Union GmbH
> Nassauische Heimstätte Wohnungsbau- und Entwicklungsgesellschaft mbH
(Vice Chairman)
> Rhein-Main-Verkehrsverbund GmbH (Chairman)
> Schirn Kunsthalle Frankfurt am Main GmbH (Chairman)
> Tourismus- und Congress GmbH Frankfurt am Main (Chairman)
> Landesbank Hessen Thüringen (Helaba) (acting member)
Member of the Advisory Board:
> Thüga AG
Member of the Supervisory Board:
> Albatros Versicherungsdienste GmbH
Member of the Executive Board:
> Bundesvereinigung Logistik e.V.
> Bundesverband der Deutschen Fluggesellschaften
Presidium membership:
> Bundesverband der Deutschen Luftverkehrswirtschaft e.V.
> Chair of IATA Cargo Committee (CC) (from September 9, 2017)
Membership in comparable control bodies pursuant to Section 125
of the AktG:
> DEUTZ (Dalian) Engine Co. Ltd.
> Deutz Engines (Shandong) Co. Ltd. (Chairperson)
Member of the Supervisory Board:
> ZF Friedrichshafen AG
> ING Groep N.V. and ING Bank N.V. Amsterdam
(election April 2017; beginning of mandate 2018)
Member of the Supervisory Board:
> Hessische Staatsweingüter Kloster Eberbach GmbH Eltville
Chairman of the Supervisory Board:
> Dietz AG
Chairman of the Executive Board:
> Förderverein für integrierte Verkehrssysteme (Darmstadt)
Non executive Director:
> European Electrical Bus Company GmbH (Frankfurt)
Chairman of the Supervisory Board:
> AirIT Services AG
Member of the Supervisory Board:
> FraSec Fraport Security Services GmbH
> operational services GmbH & Co. KG (from November 22, 2017)
Member of the Shareholders’ Meeting:
> AirITSystems GmbH
> operational services GmbH & Co. KG (from November 1, 2017)
> AirIT Services GmbH (from December 28, 2017)
Member of the Supervisory Board:
> Deutsche Bahn AG
Fraport Annual Report 2017
Group Notes / Other Disclosures
221
Mandates of the Supervisory Board
Members of the Supervisory Board
Mehmet Özdemir
Member of the Works Council
(Remuneration 2017: €36,300; 2016: €36,300)
Arno Prangenberg
Auditor, tax consultant
(Remuneration 2017: €37,900; 2016: €36,300)
Hans-Jürgen Schmidt
First State Vice-Chairman komba gewerkschaft Hessen
(Remuneration 2017:€37,900; 2016: €37,900)
Werner Schmidt
Task manager
(Remuneration 2017: €43,700; 2016: €46,100)
Memberships in mandatory Supervisory Boards
and comparable control bodies
Chairman of the Executive Board:
> Arbeitsgemeinschaft unabhängiger Flughafenbeschäftigter (AUF e. V.)
Vice-Chairman of the Executive Board:
> komba gewerkschaft, Kreisverband Flughafen Frankfurt/Main
Edgar Stejskal
Chairman of the Group Works Council (until September 30, 2017)
Vice-Chairman of the Group Works Council (from October 1, 2017)
(Remuneration 2017: €48,500; 2016: €50,900)
Prof Dr. Katja Windt
Member of the Management Board SMS Group GmbH (appointed from 1.4.2018)
(Remuneration 2017: €44,500; 2016: €44,500)
Member of the Supervisory Board:
> FraSec Fraport Security Services GmbH
Member of the Supervisory Board:
> Airmail Center Frankfurt GmbH
Member of the Representative Committee:
> Deutsche Rentenversicherung Hessen
Member of the Executive Board:
> Bundesvereinigung Logistik (BVL) e.V.
Member of the Supervisory Board:
> Deutsche Post AG
222
Group Notes / Other Disclosures
Fraport Annual Report 2017
56 Disclosures of Shareholding According to Section 313 (2) of the HGB
Subsidiaries
Name and registered office
Afriport S.A., Luxembourg/Luxembourg
AirlT Services GmbH, Lautzenhausen
AIRMALL Boston Inc., Boston/USA
AIRMALL Cleveland Inc., Cleveland/USA
AIRMALL Maryland Inc., Maryland/USA
AIRMALL Pittsburgh Inc., Pittsburgh/USA
AIRMALL Inc., Pittsburgh/USA
AIRMALL USA Inc., Pittsburgh/USA
Airport Assekuranz Vermittlungs-GmbH, Neu Isenburg
Airport Cater Service GmbH, Frankfurt am Main
Antalya Havalimani Uluslararasi Terminal Isletmeciligi Anonim Sirketi, Istanbul/Turkey
Daport S.A., Dakar/Senegal
Energy Air GmbH, Frankfurt am Main
Flughafen Kanalreinigungsgesellschaft mbH, Kelsterbach
Flughafen Parken GmbH, Frankfurt am Main
FraCareServices GmbH, Frankfurt am Main
FraGround Fraport Ground Services GmbH, Frankfurt am Main
Frankfurter Kanalreinigungsgesellschaft mbH, Kelsterbach
Fraport Asia Ltd., Hong Kong/China
Fraport Ausbau Süd GmbH, Frankfurt am Main
Fraport Beteiligungsgesellschaft mbH, Neu-Isenburg
Fraport Beteiligungs-Holding GmbH, Kelsterbach
Fraport Brasil S.A. Aeroporto de Fortaleza, Fortaleza/Brazil
Fraport Brasil S.A. Aeroporto de Porto Alegre, Porto Alegre/Brazil
Fraport Bulgaria EAD, Sofia/Bulgaria
Fraport Casa GmbH, Neu-Isenburg
Fraport Casa Commercial GmbH, Neu-Isenburg
Fraport Immobilienservice- und Entwicklungs GmbH & Co. KG, Frankfurt am Main
Fraport Malta Business Services Ltd., St. Julians/Malta
Fraport Malta Investment Ltd., St. Julians/Malta
Fraport Malta Ltd., St. Julians/Malta
Shareholding in %
Shareholders’
equity
(pursuant to IFRS)
in € thousand
Result
(pursuant to IFRS)
in € thousand
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
51
51
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
4
31
2,894
2,704
14,331
20,175
3,819
4,075
20,991
21,677
12,338
11,727
–550
–625
–4,005
–3,105
162,602
162,593
26
26
41,781
48,918
443
445
52
52
25
22
29
25
1,268
1,283
1,990
1,479
25
25
97,825
113,039
25
23
70
71
72
74
118,176
90,907
26
6
42,031
42,031
3,115
3,161
13,300
11,638
428,436
484,436
25,638
45
448,515
–27 1)
–1,555 1)
646
450
–2,967
–2,102
244
–319
2,013
1,046
2,131
750
0
65
–1,347
–1,180
2,176 2)
1,917 2)
90 2)
90 2)
1,732 3)
5,972 3)
–3 1)
–23 1)
5,622 2)
4,278 2)
302 2)
282 2)
4
0
125
140
526
22
74 2)
72 2)
–201
2,700
0 2)
–2
–1
–2
–2
–1
–5,495 4)
–2,886 4)
0
0
1,327 2)
1,330 2)
–46
–33
11,655 2) 5)
10,238 2) 5)
10,048
9,278
–21
0
14,589
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2017
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
Fraport Annual Report 2017
Group Notes / Other Disclosures
223
Subsidiaries
Name and registered office
Fraport New York Inc., New York/USA
Fraport Objekt Mönchhof GmbH, Frankfurt am Main
Fraport Objekte 162 163 GmbH, Frankfurt am Main
Fraport (Philippines) Services, Inc., Manila/Philippines
Fraport Peru S.A.C., Lima/Peru
Fraport Passenger Services GmbH, Frankfurt am Main
Fraport Real Estate Mönchhof GmbH & Co. KG, Frankfurt am Main
Fraport Real Estate Verwaltungs GmbH, Frankfurt am Main
Fraport Real Estate 162 163 GmbH & Co. KG, Frankfurt am Main
Fraport Regional Airports of Greece A S.A. Athens/Greece
Fraport Regional Airports of Greece B S.A. Athens/Greece
Fraport Regional Airports of Greece Management Company S.A. Athens/Greece
Fraport Saudi Arabia for Airport Management and Development Services Company Ltd.,
Riyadh/Saudi Arabia
Fraport Slovenija, d.o.o. Zgornji Brnik/Slovenia (previously: Aerodrom Ljublijana)
Fraport Twin Star Airport Management AD, Varna/Bulgaria
Fraport USA Inc., Pittsburgh/USA
FraSec Fraport Security Services GmbH, Frankfurt am Main
FRA – Vorfeldkontrolle GmbH, Kelsterbach
GCS Gesellschaft für Cleaning Service mbH & Co. Airport Frankfurt/ Main KG,
Frankfurt am Main
Lima Airport Partners S.R.L., Lima/Peru
Media Frankfurt GmbH, Frankfurt am Main
VCS Verwaltungsgesellschaft für Cleaning Service mbH, Frankfurt am Main
2016
2017
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
Shareholding in %
Shareholders’
equity
(pursuant to IFRS)
in € thousand
Result
(pursuant to IFRS)
in € thousand
100
100
100
100
100
100
99.99
99.99
100
100
100
100
100
100
100
100
100
100
73.4
72
73.4
72
73.4
72
100
100
100
100
60
60
100
100
100
100
100
100
100
100
70.01
70.01
51
51
100
100
498,176
0
27
26
28
27
0
0
162
486
350
350
6,320
4,437
37
34
6,385
6,068
85,581
7,927
119,667
7,976
980
16
4,293
7,696
199,047
212,256
104,467
97,700
3,566
3,936
4,254
7,373
13
123
2,049
1,910
199,356
177,174
7,326
7,197
43
42
13,467
0 4)
1
1
1
1
0 1)
0 1)
534
170
644 2)
878 2)
9,614 2) 5)
7,948 2) 5)
2
2
2,674 2) 5)
2,772 2) 5)
13,274
–1,972
1,097
–1,934
963
–12
–2,638 1)
–316 1)
5,277
1,270
20,810
21,291
105
–65
–3,119
–3,025
–8 2)
–7 2)
742 5)
724 5)
54,786
53,887
2,211
2,113
1
1
224
Group Notes / Other Disclosures
Fraport Annual Report 2017
Joint ventures
Name and registered office
AirITSystems GmbH, Hanover
FCS Frankfurt Cargo Services GmbH, Frankfurt am Main
Fraport IC Ictas Havalimani Isletme Anonim Sirketi, Antalya/Turkey
Fraport IC Ictas Antalya Havalimani Terminal Yatirim ve Isletmeciligi Anonim Sirketi,
Antalya/Turkey
Frankfurt Airport Retail GmbH & Co. KG, Hamburg
Frankfurt Airport Retail Verwaltungs GmbH,
Frankfurt am Main
Grundstücksgesellschaft Gateway Gardens GmbH, Frankfurt am Main
Medical Airport Service GmbH, Kelsterbach
Multi Park II Mönchhof GmbH, Walldorf (Baden)
M-Port GmbH & Co. KG, Neu-Isenburg
M-Port Verwaltungs GmbH, Neu-Isenburg
N*ICE Aircraft Services & Support GmbH, Frankfurt am Main
Pantares Tradeport Asia Ltd., Hong Kong/China
Shanghai Frankfurt Airport Consulting Services Co., Ltd., Shanghai/China
Associated companies
Name and registered office
Airmail Center Frankfurt GmbH, Frankfurt am Main
ASG Airport Service Gesellschaft mbH, Frankfurt am Main
Flughafen Hannover-Langenhagen GmbH, Hanover
operational services GmbH & Co. KG, Frankfurt am Main
Xi’an Xianyang International Airport Co., Ltd., Xianyang City/China
Thalita Trading Ltd., Lakatamia/Zypern;
Northern Capital Gateway LLC, St. Petersburg/Russia
Shareholding
in %
Shareholders’
equity
(pursuant to IFRS)
in € thousand
Result
(pursuant to IFRS)
in € thousand
50
50
49
49
51/50
51/50
51/50
51/50
50
50
33.33
33.33
50
50
50
50
50
50
50
50
52
52
50
50
50
50
4,329
3,521
13,478
11,034
24,091
24,170
27,496
–28,815
23,217
23
5,560
2,022
10,453
9,185
122
129
3,316
24
24
155
19,269
17,891
9,546
11,684
362
376
809
720
2,686
320
–79 6)
835 6)
40,044 6)
–23,591 6)
12,546 4)
0 4)
3,538
–852
2,024
1,789
–7
33
–163
–1
0
–20
1,653
113
1,337
1,748
8
10
2017
2016
2017
2016
2017
2016
2017
2016
2017
2017
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
Shareholding
in %
Shareholders’
equity
(pursuant to IFRS)
in € thousand
Result
(pursuant to IFRS)
in € thousand
40
40
49
49
30
30
50
50
24.5
24.5
25
25
4,650
4,763
838
1,083
138,766
137,194
35,953
33,584
525,846
516,721
–342,800
–308,100
687
1,313
361
823
2,322
2,818
17,575
14,853
39,959
30,427
–29,920
–818
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
Fraport Annual Report 2017
Group Notes / Other Disclosures
225
Other investments
Name and registered office
Delhi International Airport Private Ltd., Neu Delhi/India
Gateways for India Airports Private Ltd., Bangalore/India
Ineuropa Handling Alicante, U.T.E., Madrid/Spain
Ineuropa Handling Madrid, U.T.E., Madrid/Spain
Ineuropa Handling Mallorca, U.T.E., Madrid/Spain
Ineuropa Handling Teneriffa, U.T.E., Madrid/Spain
Perishable-Center Verwaltungs-GmbH Zentrum für verderbliche Güter Frankfurt,
Frankfurt am Main
Shareholding
in %
Shareholders’
equity
(according to
local regulation)
in € thousand
Result
(according to
local regulation)
in € thousand
10
10
13.51
13.51
20
20
20
20
20
20
20
20
10
10
348,334
295,362
0
0
0
–575
0
–1,282
0
871
0
1,642
0
1,976
63,694 7)
70,440 7)
0 1)
0 1)
0 1) 8)9)
–786 1)9)10)
0 1) 8)9)
–2,604 1)9)10)
0 1) 8)9)
270 1)9)10)
0 1) 8)9)
–762 1)9)10)
0 10)
449
2017
2016
2017
2016
2017
2007
2017
2007
2017
2007
2017
2007
2017
2016
1) Company inactive or in liquidation.
2) IFRS result before result transfer.
3) 0.01% of the shares are held by natural persons.
4) Company founded in 2017.
5) In the shareholders’ equity of commercial partnerships, capital shares as well as shares in profit and loss of the limited partners are recognized
(according to IAS 32, these represent debt).
6) 51% capital shares, 50 % dividend rights.
7) Fiscal year of the company ends on March 31.
8) There is no influence on financial and business policies.
9) Shareholders’ equity has been largely or wholly repaid.
10) Current financial statements not yet available.
Frankfurt/Main, February 28, 2018
Fraport AG
Frankfurt Airport Services Worldwide
The Executive Board
Dr. Schulte
Giesen
Müller
Dr. Zieschang
226
Further Information / Responsibility Statement
Fraport Annual Report 2017
Further Information
Responsibility Statement
To the best of our knowledge and in accordance with the applicable accounting principles, the consolidated financial statements
give a true and fair view of the asset, financial, and earnings position and profit or loss of the Group. Furthermore, the Group
management report includes a fair review of the development and performance of the business and the position of the Group,
together with a description of the principal opportunities and risks associated with the expected development of the Group.
Frankfurt am Main, February 28, 2018
Fraport AG
Frankfurt Airport Services Worldwide
The Executive Board
Dr. Schulte
Giesen
Müller
Dr. Zieschang
Fraport Annual Report 2017
Further Information / Auditor’s Report
227
Independent Auditor´s Report
To Fraport AG Frankfurt Airport Services Worldwide, Frankfurt am Main
Report on the audit of the Consolidated Financial Statements and of the Group Management Report
Audit Opinions
We have audited the consolidated financial statements of Fraport AG Frankfurt Airport Services Worldwide, Frankfurt am Main,
and its subsidiaries (the Group), which comprise the consolidated statement of financial position as at 31 December 2017, and
the consolidated statement of comprehensive income, consolidated statement of profit or loss, consolidated statement of changes
in equity and consolidated statement of cash flows for the financial year from 1 January to 31 December 2017, and notes to the
consolidated financial statements, including a summary of significant accounting policies. In addition, we have audited the group
management report of Fraport AG Frankfurt Airport Services Worldwide for the financial year from 1 January to 31 December
2017. We have not audited the content of those parts of the group management report listed in the “Other Information” section of
our auditor’s report in accordance with the German legal requirements.
In our opinion, on the basis of the knowledge obtained in the audit,
•
•
the accompanying consolidated financial statements comply, in all material respects, with the IFRSs as adopted by the EU,
and the additional requirements of German commercial law pursuant to § [Article] 315e Abs. [paragraph] 1 HGB [Han-
delsgesetzbuch: German Commercial Code] and, in compliance with these requirements, give a true and fair view of the
assets, liabilities, and financial position of the Group as at 31 December 2017, and of its financial performance for the
financial year from 1 January to 31 December 2017, and
the accompanying group management report as a whole provides an appropriate view of the Group’s position. In all material
respects, this group management report is consistent with the consolidated financial statements, complies with German legal
requirements and appropriately presents the opportunities and risks of future development. Our audit opinion on the group
management report does not cover the content of those parts of the group management report listed in the “Other Infor-
mation” section of the group management report.
Pursuant to § 322 Abs. 3 Satz [sentence] 1 HGB, we declare that our audit has not led to any reservations relating to the legal
compliance of the consolidated financial statements and of the group management report.
Basis for the Audit Opinions
We conducted our audit of the consolidated financial statements and of the group management report in accordance with § 317
HGB and the EU Audit Regulation (No. 537/2014, referred to subsequently as “EU Audit Regulation”) and in compliance with
German Generally Accepted Standards for Financial Statement Audits promulgated by the Institut der Wirtschaftsprüfer [Institute
of Public Auditors in Germany] (IDW). Our responsibilities under those requirements and principles are further described in the
“Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements and of the Group Management Report” section
of our auditor’s report. We are independent of the group entities in accordance with the requirements of European law and German
commercial and professional law, and we have fulfilled our other German professional responsibilities in accordance with these
requirements. In addition, in accordance with Article 10 (2) point (f) of the EU Audit Regulation, we declare that we have not
provided non-audit services prohibited under Article 5 (1) of the EU Audit Regulation. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our audit opinions on the consolidated financial statements and on the
group management report.
Key Audit Matters in the Audit of the Consolidated Financial Statements
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated
financial statements for the financial year from 1 January to 31 December 2017. These matters were addressed in the context of
our audit of the consolidated financial statements as a whole, and in forming our audit opinion thereon; we do not provide a
separate audit opinion on these matters.
228
Further Information / Auditor’s Report
Fraport Annual Report 2017
In our view, the matters of most significance in our audit were as follows:
❶ Recoverability of goodwill and non-current assets
❷ Other provisions and valuation allowances for trade receivables
❸ Airport concessions (IFRIC 12)
Our presentation of these key audit matters has been structured in each case as follows:
① Matter and issue
② Audit approach and findings
③ Reference to further information
Hereinafter we present the key audit matters:
❶ Recoverability of goodwill and non-current assets
① In the Company's consolidated financial statements non-current assets in a total amount of EUR 9.1 billion (84.3% of total
assets) are reported under the balance sheet items "Goodwill", "Investments in airport operating projects", “Other intangible
assets”, “Property, plant and equipment”, “Investment property” and “Investment in companies accounted for using the equity
method” . While goodwill must be tested for impairment ("impairment test") on an annual basis and if there are indications
that goodwill may be impaired, such a test needs only to be carried out for other non-current assets if there are indications
that these assets may be impaired ("triggering events"). The impairment test is performed at the level of the cash-generating
units. The carrying amount of the relevant cash-generating unit is compared with the corresponding recoverable amount for
the purposes of the impairment test. The calculation of the recoverable amount generally employs the value in use. The
present value of the future cash flows from the respective cash-generating unit normally serves as the basis of measurement.
The present values are calculated using discounted cash flow models. Within the Fraport Group, this is generally based on
the approved medium-term plan for the 2018 to 2022 financial years. Due to the long-term investment plans at the Frankfurt
location, the plans for the cash-generating units in this location are projected on an aggregated level from 2023 to 2025 and
then based on assumptions about long-term rates of growth. In cases involving cash-generating units with fixed-term airport
concessions, the plans are taken as a basis in line with the term of the respective concession agreements. Expectations
relating to future market developments and assumptions about the development of macroeconomic factors are also taken
into account. The discount rate used is the weighted average cost of capital for the relevant cash-generating unit.
The outcome of this valuation is dependent on the estimates made by the executive directors with respect to the future cash
flows of the respective cash-generating unit, the discount rate used, the rate of growth and other assumptions, and is there-
fore subject to corresponding uncertainty. Against this background and due to the complex nature of the valuation, these
matters were of particular significance in the context of our audit.
② As part of our audit, we evaluated, among other things, the methodology used for the purposes of testing the recoverability
of goodwill and non-current assets. After matching the future cash flows used for the calculation against the adopted business
plan of the Group, we assessed the appropriateness of the calculation, in particular by agreeing it to general and sector-
specific market expectations. We discussed supplementary adjustments to the plan for the purposes of the impairment tests
with the departments responsible and evaluated their appropriateness. We also assessed the appropriate consideration of
the costs of Group functions. In the knowledge that even relatively small changes in the discount rate applied can have a
material impact on the value calculated using this method, we focused our testing in particular on the parameters used to
determine the discount rate applied, and assessed the calculation model. In order to reflect the uncertainty inherent in the
projections, we evaluated the sensitivity analyses performed by the Company and carried out our own additional sensitivity
analyses with respect to those cash-generating units with low headroom (recoverable amount compared with the carrying
Fraport Annual Report 2017
Further Information / Auditor’s Report
229
amount). Taking into account the information available, we found that the respective assets were sufficiently covered by the
discounted future cash flows.
Overall, the measurement parameters and assumptions used by the executive directors are in line with our expectations and
are within the ranges considered by us to be reasonable.
③ The Company's disclosures pertaining to impairment testing are contained in sections 4, 11, 14, 18, 19 and 20 of the notes
to the consolidated financial statements.
❷ Other provisions and valuation allowances for trade receivables
① As an airport operator with global operations, the Fraport Group is exposed to various risks. In addition, Fraport AG is
involved in in-court and out-of-court proceedings with authorities and other parties. The trade receivables (EUR 143.5 million)
contain receivables that include risks resulting from legal disputes by way of a specific valuation allowance. In the consoli-
dated financial statements the Fraport Group has recognized provisions for contingent obligations in the amount of EUR
363.2 million for legal disputes and legal, environmental and reimbursement risks, as well as obligations resulting from
personnel measures.
Trade receivables are recognized at their nominal amount or at the lower present value of the expected future cash flows.
Individual risks that can be identified are recognized by way of specific valuation allowances. The measurement of the
specific valuation allowances for trade receivables is determined, in particular, by the estimates made by the executive
directors regarding future defaults and the assessment of the individual legal disputes.
Provisions are set up for contingent obligations insofar as the recognition criteria set out in IAS 37 have been met. The
recognition and measurement of the provisions are based on estimates and assumptions made by the executive directors.
In light of this background and due to the amounts of these material items in terms of its amount, we consider these matters
to be of particular significance for our audit.
②
In our audit, we evaluated and assessed the appropriateness of the methodology used by the Company for recording legal,
environmental and reimbursement risks, as well as personnel-related risks, for assessing any future obligation on the part
of the Company/the need for impairment losses to be recognized on trade receivables and for accounting treatment.
In the knowledge that estimated values result in an increased risk of accounting misstatements and that the measurement
decisions made by the executive directors have a direct impact on the Company’s consolidated net profit/loss, we assessed
the appropriateness of the carrying amounts. With respect to the recognition and measurement of obligations and risks, we
evaluated, among other things, the underlying agreements and cost estimates. Furthermore, our assessment also involved
meetings with the Company's legal department in order to receive updates on current developments and the reasons for the
corresponding estimations. In addition, we obtained external legal confirmations as at the balance sheet date. These support
the risk assessment performed by the executive directors. We examined the presentation of the legal disputes and the
associated risk provisions in the consolidated financial statements. Within this context, we also evaluated the consistency
and continuity of the calculation processes used and the underlying documents. On the basis of this, we then assessed,
among other things, the calculation of the provisions/valuation allowances for trade receivables and their presentation in the
consolidated statement of financial position, the consolidated statement of profit or loss and the notes to the consolidated
financial statements.
230
Further Information / Auditor’s Report
Fraport Annual Report 2017
Overall, we were able to satisfy ourselves that the estimates applied and the assumptions made by the executive directors
were sufficiently documented and substantiated to justify the recognition and measurement of the in terms of their amount
material trade receivables and provisions.
③ The Company’s disclosures pertaining to other provisions and valuation allowances are contained in sections 4, 25, 29, 38
and 39 of the notes to the consolidated financial statements.
❸ Airport concessions (IFRIC 12)
①
In the Company's consolidated financial statements assets and liabilities in connection with concession rights (IFRIC 12) in
a total amount of EUR 2.4 billion and EUR 1.0 billion respectively are reported under the “Investments in airport operating
projects” and “Other liabilities” balance sheet items. Material acquisitions during the reporting period related to two conces-
sions in Greece and two concessions in Brazil with carrying amounts as at 31 December 2017 of EUR 1,741.9 million and
EUR 388.6 million respectively. The concession rights fall under IFRIC 12.17 and are accounted for using the intangible
asset model, because the Company receives the right, in each case, to charge a fee from the airport users as consideration
for the obligation to pay concession fees and to perform construction and expansion services. The cost of the intangible
assets with regard to the “Investments in airport operating projects” comprises one-off fees paid, ongoing minimum conces-
sion payments over the term of the respective concession and investments made in the airport infrastructure. At the time of
initial recognition, the future minimum concession payments are discounted and both the concession right and a concession
liability are recognized at present value.
This calculation requires assumptions to be made by the executive directors, in particular regarding the projected inflation
rates that are typical for the country in question and the appropriate discount rate.
The outcome of this valuation is dependent on the estimates made by the executive directors with respect to the applicability
of IFRIC 12, the projected inflation rates that are typical for the respective country and the appropriate discount rate, and is
therefore subject to corresponding uncertainty. Against this background and due to the complex nature of the valuation, this
matter was of particular significance in the context of our audit.
② As part of our audit, we evaluated the methodology used by the Group to account for concession rights. In the knowledge
that estimated values result in an increased risk of accounting misstatements and that the measurement decisions made by
the executive directors have a direct and significant impact on consolidated net profit/loss, we assessed the appropriateness
of the carrying amounts. With respect to the recognition and measurement of assets and liabilities, we evaluated, among
other things, the available concession agreements, inflation assumptions and the appropriateness of the discount rate and
examined the presentation of the concessions in the consolidated financial statements. Overall, we were able to satisfy
ourselves that the estimates applied and the assumptions made by the executive directors were sufficiently documented and
substantiated to justify the recognition and measurement of the in terms of their amount material airport concessions.
③ The Company's disclosures pertaining to airport concessions are contained in sections 4, 19, 35 and 48 of the notes to the
consolidated financial statements.
Other Information
The executive directors are responsible for the other information. The other information comprises the following non-audited parts
of the group management report:
•
•
•
the statement on corporate governance pursuant to § 289f HGB and § 315d HGB included in section “Legal Disclosures” of
the group management report
the corporate governance report pursuant to No. 3.10 of the German Corporate Governance Code
the separate non-financial report pursuant to § 289b Abs. 3 HGB and § 315b Abs. 3 HGB
Fraport Annual Report 2017
Further Information / Auditor’s Report
231
The other information comprises further the remaining parts of the annual report – excluding cross-references to external infor-
mation – with the exception of the audited consolidated financial statements, the audited group management report and our
auditor’s report.
Our audit opinions on the consolidated financial statements and on the group management report do not cover the other infor-
mation, and consequently we do not express an audit opinion or any other form of assurance conclusion thereon.
In connection with our audit, our responsibility is to read the other information and, in so doing, to consider whether the other
information
•
is materially inconsistent with the consolidated financial statements, with the group management report or our knowledge
obtained in the audit, or
•
otherwise appears to be materially misstated.
Responsibilities of the Executive Directors and the Supervisory Board for the Consolidated Financial Statements and the Group
Management Report
The executive directors are responsible for the preparation of the consolidated financial statements that comply, in all material
respects, with IFRSs as adopted by the EU and the additional requirements of German commercial law pursuant to § 315e Abs.
1 HGB and that the consolidated financial statements, in compliance with these requirements, give a true and fair view of the
assets, liabilities, financial position, and financial performance of the Group. In addition the executive directors are responsible for
such internal control as they have determined necessary to enable the preparation of consolidated financial statements that are
free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the executive directors are responsible for assessing the Group’s ability to
continue as a going concern. They also have the responsibility for disclosing, as applicable, matters related to going concern. In
addition, they are responsible for financial reporting based on the going concern basis of accounting unless there is an intention
to liquidate the Group or to cease operations, or there is no realistic alternative but to do so.
Furthermore, the executive directors are responsible for the preparation of the group management report that, as a whole, provides
an appropriate view of the Group’s position and is, in all material respects, consistent with the consolidated financial statements,
complies with German legal requirements, and appropriately presents the opportunities and risks of future development. In addi-
tion, the executive directors are responsible for such arrangements and measures (systems) as they have considered necessary
to enable the preparation of a group management report that is in accordance with the applicable German legal requirements,
and to be able to provide sufficient appropriate evidence for the assertions in the group management report.
The supervisory board is responsible for overseeing the Group’s financial reporting process for the preparation of the consolidated
financial statements and of the group management report.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements and of the Group Management Report
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from
material misstatement, whether due to fraud or error, and whether the group management report as a whole provides an appro-
priate view of the Group’s position and, in all material respects, is consistent with the consolidated financial statements and the
knowledge obtained in the audit, complies with the German legal requirements and appropriately presents the opportunities and
risks of future development, as well as to issue an auditor’s report that includes our audit opinions on the consolidated financial
statements and on the group management report.
232
Further Information / Auditor’s Report
Fraport Annual Report 2017
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with § 317 HGB
and the EU Audit Regulation and in compliance with German Generally Accepted Standards for Financial Statement Audits prom-
ulgated by the Institut der Wirtschaftsprüfer (IDW) will always detect a material misstatement. Misstatements can arise from fraud
or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the eco-
nomic decisions of users taken on the basis of these consolidated financial statements and this group management report.
We exercise professional judgment and maintain professional skepticism throughout the audit. We also:
•
•
•
•
•
•
•
•
Identify and assess the risks of material misstatement of the consolidated financial statements and of the group management
report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evi-
dence that is sufficient and appropriate to provide a basis for our audit opinions. The risk of not detecting a material mis-
statement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit of the consolidated financial statements and of arrangements
and measures (systems) relevant to the audit of the group management report in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an audit opinion on the effectiveness of these sys-
tems.
Evaluate the appropriateness of accounting policies used by the executive directors and the reasonableness of estimates
made by the executive directors and related disclosures.
Conclude on the appropriateness of the executive directors’ use of the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt
on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to
draw attention in the auditor’s report to the related disclosures in the consolidated financial statements and in the group
management report or, if such disclosures are inadequate, to modify our respective audit opinions. Our conclusions are
based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause
the Group to cease to be able to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures,
and whether the consolidated financial statements present the underlying transactions and events in a manner that the
consolidated financial statements give a true and fair view of the assets, liabilities, financial position and financial perfor-
mance of the Group in compliance with IFRSs as adopted by the EU and the additional requirements of German commercial
law pursuant to § 315e Abs. 1 HGB.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the
Group to express audit opinions on the consolidated financial statements and on the group management report. We are
responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit
opinions.
Evaluate the consistency of the group management report with the consolidated financial statements, its conformity with
German law, and the view of the Group’s position it provides.
Perform audit procedures on the prospective information presented by the executive directors in the group management
report. On the basis of sufficient appropriate audit evidence we evaluate, in particular, the significant assumptions used by
the executive directors as a basis for the prospective information, and evaluate the proper derivation of the prospective
information from these assumptions. We do not express a separate audit opinion on the prospective information and on the
assumptions used as a basis. There is a substantial unavoidable risk that future events will differ materially from the pro-
spective information.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Fraport Annual Report 2017
Further Information / Auditor’s Report
233
We also provide those charged with governance with a statement that we have complied with the relevant independence require-
ments, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independ-
ence, and where applicable, the related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance
in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter.
Other legal and regulatory requirements
Further Information pursuant to Article 10 of the EU Audit Regulation
We were elected as group auditor by the annual general meeting on 23 May 2017. We were engaged by the supervisory board
on 22 November 2017. We have been the group auditor of the Fraport AG Frankfurt Airport Services Worldwide, Frankfurt am
Main, without interruption since the financial year 2013.
We declare that the audit opinions expressed in this auditor’s report are consistent with the additional report to the audit committee
pursuant to Article 11 of the EU Audit Regulation (long-form audit report).
German public auditor responsible for the engagement
The German Public Auditor responsible for the engagement is Thomas Noll.
Frankfurt am Main, February 28, 2018
PricewaterhouseCoopers GmbH
Wirtschaftsprüfungsgesellschaft
Dietmar Prümm Thomas Noll
Wirtschaftsprüfer
[German public auditor]
Wirtschaftsprüfer
[German public auditor]
234
Further Information / Ten-Year Overview
Fraport Annual Report 2017
Ten-Year Overview
Consolidated income statement1)
€ million
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
Revenues
Change in work-in-process
Other internal work capitalized
Other operating income
Total revenue
Cost of materials
Personnel expenses
Other operating expenses
EBITDA
Depreciation and amortization
Operating result/EBIT
Interest result
Result from companies accounted for using the
equity method
Income from investments
Write-down on financial assets
Other financial result
Financial result
Result from ordinary operations/EBT
Taxes on income
Group result
thereof profit attributable to non-controlling
interests
thereof profit attributable to shareholders
of Fraport AG
Earnings per €10 share in € (basic)
Earnings per €10 share in € (diluted)
2,934.8
0.4
36.3
38.9
3,010.4
–720.4
–1,092.9
–193.9
1,003.2
–360.2
643.0
–157.5
30.9
0.0
0.0
–10.3
–136.9
506.1
–146.4
359.7
2,586.2
0.4
34.9
332.9
2,954.4
–621.9
–1,066.7
–211.7
1,054.1
–360.4
693.7
–106.9
–4.6
0.0
0.0
–0.8
–112.3
581.4
–181.1
400.3
2,598.9
0.5
29.9
49.8
2,679.1
–610.4
–1,026.7
–193.2
848.8
–328.3
520.5
–125.6
37.6
0.0
0.0
1.3
–86.7
433.8
–136.8
297.0
2,394.6
0.6
28.3
42.5
2,466.0
–533.3
–970.4
–172.2
790.1
–307.3
482.8
–141.1
43.5
0.0
0.0
–10.5
–108.1
374.7
–122.9
251.8
2,375.7
0.6
32.3
32.5
2,441.1
–595.2
–928.9
–184.1
732.9
–294.3
438.6
–136.0
18.5
0.0
0.0
10.4
–107.1
331.5
–95.8
235.7
2,442.0
0.5
44.0
55.8
2,542.3
–558.1
–942.9
–192.6
848.7
–352.7
496.0
–174.1
11.7
0.0
0.0
30.5
–131.9
364.1
–112.6
251.5
2,371.2
0.4
40.3
40.9
2,452.8
–541.1
–906.3
–203.1
802.3
–305.7
496.6
–144.4
11.5
0.0
0.0
–16.4
–149.3
347.3
–96.5
250.8
2,194.6
0.4
36.9
52.1
2,284.0
–491.1
–880.4
–201.9
710.6
–279.7
430.9
–137.7
7.0
0.0
0.0
–21.5
–152.2
278.7
–7.2
271.5
2,010.3
0.9
39.1
45.3
2,095.6
–471.6
–866.9
–187.4
569.7
–268.8
300.9
–99.7
4.3
0.1
–7.2
–3.9
–106.4
194.5
–42.5
152.0
2,101.6
0.4
33.8
66.1
2,201.9
–471.1
–925.6
–204.5
600.7
–241.5
359.2
–71.0
–15.1
0.1
0.0
24.2
–61.8
297.4
–100.5
196.9
29.5
24.9
20.5
17.1
14.7
13.3
10.4
8.6
5.6
7.2
330.2
3.57
3.56
375.4
4.07
4.06
276.5
3.00
2.99
234.7
2.54
2.54
221.0
2.40
2.39
238.2
2.59
2.58
240.4
2.62
2.60
262.9
2.86
2.85
146.4
1.60
1.59
189.7
2.07
2.05
Key figures
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
Operating cash flow
Free cash flow
EBITDA margin in %
EBIT margin in %
Return on revenue in %
Fraport assets in € million
ROFRA in %
Year-end closing price of the Fraport share in €
Dividend per share in €
Passenger numbers Frankfurt
Average number of employees
790.7
393.1
34.2
21.9
17.2
6,965.8
583.2
301.7
40.8
26.8
22.5
6,069.2
652.2
393.6
32.7
20.0
16.7
6,071.0
506.2
246.8
33.0
20.2
15.6
5,830.5
454.2
34.3
30.8
18.5
14.0
5,061.7
553.0
–162.4
34.8
20.3
14.9
5,152.3
618.8
–350.1
33.8
20.9
14.6
4,447.3
567.5
–291.1
32.4
19.6
12.7
4,019.7
426.5
–711.4
28.3
15.0
9.7
3,820.2
468.0
–370.7
28.6
17.1
14.2
3,419.1
11.4
56.17
1.50
10.0
91.86
1.502)
10.5
30.91
1.15
64,500,386 60,786,937 61,032,022 59,566,132 58,036,948 57,520,001 56,436,255 53,009,221 50,932,840 53,467,450
23,079
9.2
48.04
1.35
11.2
38.00
1.25
10.7
47.16
1.25
9.6
43.94
1.25
8.7
54.39
1.25
7.9
36.28
1.15
9.4
58.94
1.35
20,481
20,595
20,673
20,963
19,792
19,970
20,322
20,395
20,720
Financial position key figures
Dec. 31,
2017
Dec. 31,
2016
Dec. 31,
2015
Dec. 31,
2014
Dec. 31,
2013
Dec. 31,
2012
Dec. 31,
2011
Dec. 31,
2010
Dec. 31,
2009
Dec. 31,
2008
Profit earmarked for distribution in € million
Net financial debt in € million
Capital employed in € million
Gearing ratio in %
Debt-to-equity ratio in %
Dynamic debt ratio in %
Working capital in € million
Group liquidity
138.7
3,512.4
7,241.8
94.2
32.4
444.2
575.1
1,018.6
138.7
2,355.9
5,957.5
65.4
26.6
404.0
840.9
1,247.5
124.7
2,774.3
6,086.9
83.8
31.4
425.4
606.0
1,043.1
124.7
3,012.8
6,109.2
97.3
33.4
595.2
626.6
1,179.6
115.4
2,870.6
5,808.3
97.7
32.6
632.0
797.6
1,368.1
115.5
2,934.5
5,731.5
104.9
30.4
530.7
1,057.8
1,663.1
115.4
2,647.0
5,362.1
97.5
28.7
427.8
977.6
1,606.9
115.6
2,024.4
4,626.9
77.8
22.1
356.7
1,878.4
2,384.0
106.2
1,614.5
4,043.5
66.5
18.2
378.5
2,030.0
2,631.3
105.6
925.6
3,328.0
38.5
14.1
187.9
919.7
1,315.2
1) Due to new accounting policies, and shifts in Group definitions, figures reported in previous years may differ.
2) Proposed dividend.
Fraport Annual Report 2017
Further Information / Ten-Year Overview
235
Consolidated statement of financial position1)
€ million
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
Goodwill
Investments in airport operating projects
Other intangible assets
Property, plant, and equipment
Investment property
Investments in companies accounted for using the
equity method
Other financial assets
Other receivables and financial assets
Income tax receivables
Deferred tax assets
Non-current assets
Inventories
Trade accounts receivable
Other receivables and financial assets
Income tax receivables
Cash and cash equivalents
Non-current assets held for sale
Current assets
Issued capital
Capital reserve
Revenue reserves
Equity attributable to shareholders of Fraport AG
Non-controlling interests
Shareholders’ equity
Financial liabilities
Trade accounts payable
Other liabilities
Deferred tax liabilities
Provisions for pensions and similar obligations
Provisions for income taxes
Other provisions
Non-current liabilities
Financial liabilities
Trade accounts payable
Other liabilities
Provisions for income taxes
Other provisions
Liabilities in the context of non-current assets held
for sale
Current liabilities
19.3
2,621.1
132.4
5,921.5
96.4
268.1
488.6
190.9
0.0
41.0
9,779.3
29.3
143.5
245.5
5.4
629.4
0.0
1,053.1
923.9
598.5
2,345.7
3,868.1
160.6
4,028.7
3,955.6
42.4
1,090.1
203.8
34.2
70.3
147.2
5,543.6
575.4
185.9
249.7
33.1
216.0
19.3
516.1
146.7
5,954.2
79.6
209.7
561.7
173.3
0.2
36.9
7,697.7
37.9
129.6
259.7
11.9
736.0
0.0
1,175.1
923.6
596.3
2,220.4
3,740.3
101.1
3,841.4
3,236.9
41.8
408.0
173.6
33.2
71.8
147.2
4,112.5
366.5
146.7
145.7
42.9
217.1
41.7
500.9
161.2
6,045.4
74.5
237.6
659.2
167.0
5.4
33.4
7,926.3
42.8
154.0
310.8
7.4
406.0
0.0
921.0
923.1
594.3
1,919.9
3,437.3
74.4
3,511.7
3,273.8
42.5
447.7
172.2
30.7
62.1
201.6
4,230.6
543.6
143.1
129.4
56.0
232.9
41.7
479.2
157.1
6,127.7
63.0
216.9
773.3
181.1
10.2
31.1
8,081.3
43.7
174.7
297.6
7.7
401.1
7.1
931.9
922.7
592.3
1,706.1
3,221.1
64.9
3,286.0
3,874.3
47.1
497.5
158.7
33.7
68.8
228.0
4,908.1
318.1
134.5
123.7
14.7
223.8
22.7
458.1
51.1
5,962.3
47.7
194.9
728.6
172.2
20.3
27.9
7,685.8
42.3
174.4
426.4
1.0
486.9
0.0
1,131.0
922.1
590.2
1,540.8
3,053.1
45.7
3,098.8
3,948.1
50.8
491.7
107.2
26.7
54.1
223.9
4,902.5
290.6
159.6
123.0
7.7
234.6
38.6
1,031.2
44.2
5,927.3
34.4
136.6
742.7
117.1
19.5
49.2
8,140.8
77.7
180.0
385.2
35.0
821.9
0.0
1,499.8
921.3
588.0
1,403.2
2,912.5
35.7
2,948.2
4,401.0
64.4
1,006.4
102.5
27.4
80.2
211.2
5,893.1
196.6
214.4
163.2
5.3
219.8
38.6
1,067.1
43.6
5,643.8
74.6
138.0
648.6
33.5
29.6
48.2
7,765.6
81.4
163.9
280.2
6.2
927.1
0.0
1,458.8
918.8
584.7
1,327.0
2,830.5
29.4
2,859.9
4,034.0
64.9
1,001.0
110.8
22.9
68.1
201.8
5,503.5
219.9
228.9
187.4
2.4
222.4
38.6
1,073.4
32.4
5,013.3
34.0
97.1
394.6
20.9
29.6
43.1
6,777.0
77.9
178.3
319.2
5.5
1,812.6
0.0
2,393.5
918.4
582.0
1,217.7
2,718.1
21.2
2,739.3
4,256.6
60.0
949.2
105.5
22.1
68.0
147.0
5,608.4
151.8
274.6
180.5
12.9
203.0
40.0
1,098.4
34.0
4,486.4
34.7
72.9
474.7
20.0
23.6
68.3
6,353.0
54.0
158.4
492.2
5.3
1,802.3
0.0
2,512.2
917.7
578.3
1,039.2
2,535.2
22.6
2,557.8
4,126.9
114.7
904.7
143.9
20.3
135.0
129.9
5,575.4
118.9
219.8
147.7
6.7
238.9
22.7
597.6
33.3
3,968.6
9.0
72.4
205.4
42.4
26.6
30.4
5,008.4
47.4
154.9
205.1
7.8
1,154.8
0.0
1,570.0
916.1
573.1
1,018.8
2,508.0
60.2
2,568.2
1,685.3
192.9
514.8
123.5
19.0
170.0
101.0
2,806.5
555.5
393.8
63.6
1.9
188.9
0.0
0.0
0.0
4.3
0.0
0.0
0.0
0.0
0.0
0.0
1,260.1
918.9
1,105.0
819.1
815.5
799.3
861.0
822.8
732.0
1,203.7
Total assets
10,832.4
8,872.8
8,847.3
9,013.2
8,816.8
9,640.6
9,224.4
9,170.5
8,865.2
6,578.4
Change over the previous year in %
Dec. 31,
2017
Dec. 31,
2016
Dec. 31,
2015
Dec. 31,
2014
Dec. 31,
2013
Dec. 31,
2012
Dec. 31,
2011
Dec. 31,
2010
Dec. 31,
2009
Dec. 31,
2008
Non-current assets
Shareholders’ equity (less non-controlling interests
and profit earmarked for distribution)
Share of total assets in %
Non-current assets
Shareholders’ equity ratio
+27.0
+3.5
90.3
34.4
–2.9
+8.7
86.8
40.6
–1.9
+7.0
89.6
37.4
+5.1
+5.4
89.7
34.4
–5.6
+5.0
87.2
33.3
+4.8
+3.0
84.4
29.0
+14.6
+4.3
84.2
29.4
+6.7
+7.1
73.9
28.4
+26.8
+1.1
71.7
27.4
+7.4
+0.2
76.1
36.5
236
Further Information / Glossary
Fraport Annual Report 2017
Glossary
Rate per 1,000 employees
Reportable accidents at work × 1,000/average number of employees
Capital Employed
Net financial debt + shareholders’ equity1)
Dividend yield
Dividend per share/year-end closing price of the share
Dynamic debt ratio
Net financial debt/cash flow from operating activities
Earnings per Share (EPS)
Profit attributable to shareholders of Fraport AG/ weighted number of shares
EBIT
Abbreviation for: earnings before interest and taxes
EBIT margin
EBIT/revenue
EBITDA
Abbreviation for: earnings before interest, taxes, depreciation and amortization
EBITDA margin
EBITDA/revenue
EBT
Abbreviation for: earnings before taxes
Shareholders’ equity ratio
Shareholders’ equity1)/total assets
Return on shareholders’ equity
Profit attributable to shareholders of Fraport AG/shareholders’ equity1)
EURIBOR
Abbreviation for: European Interbank Offered Rate = Interest rate used by European banks when trading fixed-term deposits with
each other. It is one of the most important reference interest rates, among European bonds, bearing floating interest payments.
Free cash flow
Cash flow from operating activities + dividends from companies accounted for using the equity method – capital expenditure in
property, plant, and equipment – investment property – capital expenditure for other intangible assets – investments in airport
operating projects (excluding payments to acquire Group companies and concessions) – capital expenditure in investments ac-
counted for using the equity method
Gearing ratio
Net financial debt/shareholders’ equity1
1) Shareholders’ equity less non-controlling interests and profit earmarked for distribution.
Fraport Annual Report 2017
Further Information / Glossary
237
Total employees
Employees of Fraport AG, subsidiaries, and joint ventures as at the balance sheet date (including temporary staff, apprentices,
and employees on leave)
Annual performance of the Fraport share
(Year-end closing price of the Fraport share + dividend per share)/previous year-end closing price
Sickness rate
Sick days/planned days × 100 excluding absences beyond sick pay (so called extended sick leave)
Price-earnings ratio
Year-end closing price of the Fraport share/earnings per share (basic)
Liquidity
Cash and cash equivalents (as at financial position) + short-term realizable items in “other financial assets” and “other receivables
and financial assets”
Market capitalization
Year-end closing price of the Fraport share × number of shares
Net financial debt
Non-current financial liabilities + current financial liabilities – liquidity
Operating expenses
Material expenses + personnel expenses + other operating expenses
ROCE
Abbreviation for: return on capital employed = EBIT/capital employed
ROFRA
Abbreviation for: return on Fraport assets = EBIT/Fraport assets
Return on revenue
EBT/revenue
Debt-to-equity ratio
Net financial debt/total assets
Working capital
Current assets – trade accounts payable – other current liabilities
238
Further Information / Financial Calendar 2018 / Traffic Calendar 2018 / Imprint
Fraport Annual Report 2017
Financial Calendar 2018
Wednesday, May 9, 2018
Interim Release Q1 2018, online publication,
conference call with analysts and investors
Tuesday, May 29, 2018
Annual General Meeting 2018,
Frankfurt am Main, Jahrhunderthalle
Friday, June 1, 2018
Dividend payment
Traffic Calendar 2018
(Online publication)
Friday, April 13, 2018
March 2018/3M 2018
Tuesday, May 15, 2018
April 2018
Wednesday, June 13, 2018
May 2018
Thursday, July 12, 2018
June 2018/6M 2018
Monday, August 13, 2018
July 2018
Imprint
Publisher
Fraport AG Frankfurt Airport Services Worldwide
60547 Frankfurt am Main
Germany
Telephone: +49 (0)1806 37246361)
Website: www.fraport.de
Wednesday, August 8, 2018
Interim Report Q2/6M 2018, online publication,
conference call with analysts and investors
Wednesday, November 7, 2018
Interim Release Q3/9M 2018, online publication,
conference call with analysts and investors
Thursday, September 13, 2018
August 2018
Friday, October 12, 2018
September 2018/9M 2018
Tuesday, November 13, 2018
October 2018
Thursday, December 13, 2018
November 2018
Tuesday, January 15, 2019
December 2018/FY 2018
Photography/Design
Michael Gernhuber, Essen
This report was compiled with the system SmartNotes.
Editorial Deadline/Publication Date
February 28, 2018/ March 16, 2018
1) 20 cents (€) per call from a German landline;
Disclaimer
maximum 60 cents (€) per call from a German cell phone .
Contact Investor Relations
Finance and Investor Relations
Telephone: + 49 69 690-74840
Fax: + 49 69 690-74843
Website: www.meet-ir.de
E-Mail: investor.relations@fraport.de
In case of any uncertainties which arise due to errors in
translation, the German version of the Annual Report is
the binding one.
Rounding
The use of rounded amounts and percentages means
slight discrepancies may occur due to
commercial rounding.
Fraport Annual Report 2017
Further Information / Financial Calendar 2018 / Traffic Calendar 2018 / Imprint
239