BlackRock Floating Rate Income Strategies Fund, Inc. Price & Performance (FRA)

Moreover, despite heavy investments, achieved [indiscernible] which is too high, that's no question, but at least as expected. What have been the main challenges that we are facing Firstly, our main customer in Frankfurt, Lufthansa, is still waiting for its new wide body aircraft currently more than 40 long haul plans in use, which were already meant to be replaced by new modern aircraft focusing on last year only Lufthansa expected the delivery of new Boeing seven eighty seven As of today, none of these planes are flying Frankfurt or have been even delivered. Additionally, the maintenance of the Pod And Whitney Engine Exposed Short Haul Air Aircraft Reduced Our Frankfurt capacity by about 3% to 4% last year, and probably likewise this year. But there are some positive signals that the seven eighty seven ten to 15 could achieve, could come to Frankfurt somewhere in the second half of this year The seven seventy seven, the new seven seventy seven I would not expect to come this year and even probably not from today's point of view in the year 2026. Also from a political perspective, we faced a challenging environment in May. The German aviation tax was a waste, another time making Germany one of the most expensive countries to operate worldwide.

This year, the German state has further increased the security cost to be paid by the airline as well as the air navigation charges. Besides these cost items, 2025 also marks the first year of the mandatory SAF quota so sustainable aviation fuel Applicable in the European Union That's not really the topic. The topic is plus an additional power to liquid rate mandatory for flights departing Germany. So so called gold plating in Germany another time. Ladies and gentlemen, these burns are very high. Correspondingly, the German aviation industry is lacking the speed of recovery seen in other countries. BDL, that's the German Aviation Association, for example, estimates that airlines flying to Germany will have to pay about €1,200,000,000 higher state related charges this year for 2025 or roughly €11 per departing passenger on average. Considering the airline margins this is a very high incremental burden. I'm convinced that Germany has to regain competitiveness will address this to the new government or probably upcoming new government very, very clear. So there's some point of chance, some point of optimism and I hope that we will be able to deliver or to tell you what's going on in the next call.

Despite these strong headwinds we are happy with the results we delivered this morning an all time high EBITDA of €1,300,000,000 and a group result of more than €500,000,000 close to the record level of 2018. More financial data later for Matthias who will also guide you through our segments. Looking back at our operational performance in 2024, I'm on Slide four, The traffic results illustrate very much what I just said. Fraport Is Impacted By External Factors Everything I Just Mentioned Before, And It's Not Just Frankfurt's Germany overall. So we are on a recovery rate on 87% with an increase of plus 3%, 3.7%. A better traffic performance we are seeing in our international portfolio So group airports outside of Frankfurt have the meantime, fully recovered 2019 level on average This is even more impressive keeping the temporary closure of Porto Alegre Airport due to the heavy flooding in mind. The key driver for the passenger growth in our group wide basis was our investment in Greece. At 120% Fraport Greece clearly outperformed 2019 and was adding another 6% to the already high previous year base, so very strong development which we expect to continue this year Maybe on a somewhat lower level, we have to see, but the demand for Greece is very, very positive.

Following the political unrest at the beginning of twenty twenty three, Lima Airport has caught up on the lost traffic in 2024, at 104%. Lima passengers' numbers exceeded the 2019 benchmark and we do expect 2025 to be another good year of robust growth in Peru. Staying in LatAm, Fraport Brazil, on the other side, recorded a mixed development while Fortaleza achieved year on year passenger growth, Portalego was strongly impacted by the temporary closure of the airport due to the heavy flooding in May, But in Q4, airport fully reopened and we do expect it will take a few months until the airlines restore their capacities. A better performance recorded in Ljubljana was the airport to miss misses a national flag carrier the financials are quite fine and the outlook for this summer season looks good. Which will bring us closer to the 2019 levels again. And while our TwinStar apples in Bulgaria were negatively impacted by air fleet reductions due to Port and Whitney exposed aircraft Antalya Airport recorded a very strong result for more than 38,000,000 passengers I will also talk about in a minute. Looking now forward the upcoming summer season in Frankfurt, I'm on Slide five.

Despite persistent challenges from high location costs and continued low supply of aircraft, we expect a turning point in our Frankfurt traffic momentum. While the start of the year in January and February was still comparably weak, expect to see some traffic momentum from margins in further on in the year, onwards. The traffic momentum will be predominantly driven by Condor, which is our second biggest customer in Frankfurt, Condor needs to strengthen its feeder networks from preliminary short haul routes as Lufthansa has changed the feeder agreement between the two carriers. The result of these changes is shown on the chart We expect traffic growth this summer in the area of 4% to 5%, seat capacity mainly driven by Condor. Outside of Condor, also easyJet bring new capacities and traffic growth to Frankfurt As you know, its jet is a remedy taker in the Lufthansa Ita transaction Correspondingly, Lufthansa needs to support competition between Frankfurt and Italy and granted to daily services from Frankfurt to Rome and to daily services from Frankfurt to [indiscernible] Regarding Lufthansa, we don't expect the Pratt and Whitney engines issue to be solved this year nor do we expect positive effect from the potential certification of the Boeing Dreamliner this summer.

Having said this, the 4% to 5% capacity growth largely comes without Lufthansa We however expect Lufthansa to come back into the growth mode this winter, latest December 26, when the fixing of the Pratt and Whitney engines is coming to an end and the Dreamliners will be fully into service finally. Now coming back to our own homework on Slide six, we see ourselves on track with our major expansion programs Let me start here with the new terminal at Lima Airport, as you know. The opening of the new terminal was postponed yesterday. Exactly this night, we are now working closely with the local authorities to to clear the remaining steps and to determine a new opening date, he will provide you with an update shortly. To be precise, there's nothing wrong with the new terminal which is almost 100% completed. So the new terminal is a very fine infrastructure with modern state of the art retail outlets. Also, the retail outlets are finished It's a wide terminal with lots of space for passengers. And as mentioned with our Q3 publication already, our IT IR team will provide you a deep dive on the new terminal and walk you through the highlights after the terminal opening I can just say the topics around the further delay seems to be Landside access topics responsible by the state and maybe also some unrest we have seen today after murdering of a singer in Lima, of a singer in some state of emergency But we'll give you an update as soon as we have more information what's going on there.

Because the terminal is fully ready, and it could be opened immediately. But if we have to delay it some weeks, then that's the decision by the Peruvian government. Moving on to Antalya. Over the past three years, the team has made tremendous progress to fulfill the investment as set out. In the concession contract in April now we will open the new terminal around the April 12, most probably and we'll from there on, be able to handle up to 65,000,000 passengers an enormous capacity which will place Antalya in the top 10 airports of Europe, [indiscernible] big capacity addition, we will prove to be right last year. As I mentioned before, Entire handled about 38,000,000 passengers an all time high figure. Despite this great result, the airport still misses about 4,000,000 to 5,000,000 passengers from Russia and Ukraine, when compared to 2019 And we all hope for peace in the region and so far, Antalya is very well positioned, and we expect to see continued good traffic growth over there. Following Lima and Antalya, we will complete the terminal construction in Frankfurt. In the second half of this year, most likely in October. With these three investments, we will complete our major CapEx program this year which we initiated with the groundbreaking ceremony in Frankfurt exactly.

Ten years ago. So somewhere after Eastern twenty twenty six. Going on to Slide seven of Frankfurt Airport, we are clearly focusing there on customer satisfaction with projects such as a rollout of new CT security scanners in Terminal 1 and new automated check-in counters In addition, we are working on airlines' initiatives to increase the efficiency of our operational processes with a clear focus on punctuality and also to improve our financial performance. A few projects such as AI supported turnaround processes or the intelligent dispatching agent as well as are well advanced and will be rolled out up to end of this year. Fascinating to see how AI can support us in our daily business, and we are very much looking forward to make use of this. On the other side, we decided to stop individual projects such as the security relocation in Terminal 1, Concourse B, after a thorough review process, but we will bring in Terminal 1, Concourse B on the East Side, CT scanner So that even there, the pulses are much quicker and so with a better customer satisfaction, and that's much earlier being realized than the relocation of security lanes in general. Moreover, we extended the planning phase for the Terminal 2 modernization like this we have clearly reduced the near term CapEx need as a result in the upcoming two years.

With strong a strong improvement in free cash flow and will bring back the free cash flow into a clearly positive three digit million euro area. Euro area, sorry, euro area. So progress throughout that matter regarding the tendering of the new terminals three retail areas. I'm on Slide number eight. Positive message is first, all retail slots have been awarded. In a short period of time. Therefore, we grow our Frankfurt retail areas as expected by about 12,000 square meters with the opening of Terminal 3. The new marketplace in the [indiscernible] of Terminal 3 retail area It's structured in a way to suit all our customers' needs, ranging from kits stores to fine dining opportunities the centerpiece of the marketplace is a really nice bar, with numerous seating opportunities [indiscernible] vivid atmosphere but also seating areas with an apron view will be provided. Besides new modern concepts, in particular, the central security lane in front of the marketplace will offer our customers an improved customer experience compared to Terminal 2 where we are currently working with decentralized security checks in the Nanjing area. What does new retail offering mean for our financials? On Slide number nine. Compared to the current setup in Terminal 2, expect an increase in retail revenues of roughly 50% compared to Terminal 2 by 2027.

Which is the first full year of Terminal 3 operations. Please keep you in mind that Terminal 3 overall can generate even more retail revenues in 2027 we don't expect the terminal capacities to be fully utilized so that over the time, the Terminal 3 retail sales will cut a On the slide, you see a rough split of the terminal capacity. In the long run, Terminal 2 will come back into operation and will start generating retail revenues again, but also Terminal we will offer further capacities on its modular peers but that's quite long term from today's perspective. Regarding the transition phase next year, do also keep in mind that we expect the opening of Terminal 3 the Easter holidays. Therefore, Q3 twenty twenty seven will be the first quarter with Terminal 3 in full operation and the airlines will be shifted from Terminal 2 in a staggered approach. Before talking too much about 2020 let me let's have a look at our expectations for the current fiscal year 2025. I'm on my final slide. Frankfurt passengers, we expect to grow this year but remain below 64,000,000. In percent, this represents a growth rate of below 4%. And that depends very much on the question at what time would aircraft are coming in and whether they are adding capacity or replacing other aircrafts and so it could be in a range.

In between 2% to 3%, maximum up to 4%. But more 2% to 3%. As discussed before, in particular, the phase in of the new Boeing Dreamliner, Lufthansa, remains a factor which we cannot fully assess at the moment. Moreover, we continue to be impacted by missing Pratt and Whitney engine. Aircraft. For the financial performance, we are facing additional unknown parameters in particular, the new collective label agreement for the majority of our Frank staff hasn't been agreed upon yet. In financial terms, we are talking here about the staff costs billion of close to a tough cost bill of close to €1,000,000,000 it makes a difference. Although we see there a 3% or a 5% or even a 7% wage settlement or even more as the union's request Therefore, we provided you a relative broad guidance range and expect a moderate EBITDA increase in the single digit percentage area. For the group result, we expect this to be flat to down this year Let me emphasize here, we incurred extra gains of more than €40,000,000 last year from the disposal of our remaining shares in St. Petersburg. These gains are non recurring. Adjusted for St. Petersburg divestment, our group result will be more flat.

This year. As Matthias will talk about that in a minute, the net debt to EBITDA ratio will improve due to the positive EBITDA outlook and stable net debt. For the dividend, we currently expect no dividend payment for twenty twenty five year. To be distributed in 2027. And want to focus on reducing our leverage first This could only change if we would have a lot of headwind but really a lot of headwind by positive governmental decisions on the state costs like Lufa Kestos, aviation tax And if a lot of new aircraft would come into service, but it's not very much probable from today's point of view. So let's see whether we get all these headwinds, then maybe the picture is changing a little bit. Having said this, I would like to thank you for your attention, and now Matthias with more financials. Yes. Thank you, Stefan, and a warm welcome also from my side, my first chart of the presentation shows our long term development of passenger traffic in Frankfurt and group EBITDA. On Slide number 12, you see the development of the last year, so from 2014 until 2024. Reviewing the operational and financial performances shows a decoupling of our financial and operational metrics.

While our Frankfurt passenger numbers just increased slightly compared to 2014. Our group EBITDA recorded a strong increase of 65% compared to 2014. Certainly, the increase was mainly driven by our operations outside of Frankfurt, so our International Activity segment. Here, the majority of the EBITDA growth was generated by new investments like Fraport Greece and Fraport Brazil, but also the airports that were already part of our portfolio in 2014 like Lima Airport or Gubeliana, showed organic earnings growth. On the other side, also our Frankfurt operations recorded an EBITDA increase compared to 2014. Despite a broadly stable number of passengers, the aviation segment, for example, showed a significant EBITDA growth of nearly 60% or €137,000,000 Therefore, and despite the fact that Frankfurt Airport hasn't recovered to the pre COVID passenger levels yet, The group showed overall good financial progress in the past years and marked an all time high operational result. To date. Moving on to my most important slide of the agenda, our cash flow and net debt outlook for '25. As a starting point, as always, we take our EBITDA guidance as a proxy for our operating cash flow. So more than €1,300,000,000 of inflow this year.

From this basis, we deduct the CapEx of roughly 1,100,000,000.0 that we have talked about for the past couple of quarters. Please note here that this amount continues to be spoiled by the major CapEx programs in Frankfurt as well as in Lima. Which we will finish this year. So we will clearly reduce our CapEx burden in the next couple of years. Following the CapEx, we subtract another €400,000,000 net cash interest payments and cash taxes. Moreover, we expect fixed concession payments in IFRS 16 lease payments in the amount of some €100,000,000 On the inflow side, we expect further positive cash effects from our associated companies and changes in net working capital of in total more than €100,000,000 this year. All the individual components together add up to free cash flow this year which is very close to breakeven. Please note here that this amount does not include the €100,000,000 of inflows from the daily stake in divestment which we received two weeks ago. As a result of the free cash flow outlook, we expect our group net debt to remain broadly unchanged compared to last year's level. The review of the past year's cash flow and indebtedness situation is shown on Slide 14.

Operating cash flow showed a very strong performance. At €1,180,000,000 the operating cash flow grew by 37% compared to the previous year. The increase was driven by both sound operating and good working capital management. All else equal, the operating cash flow would have been sufficient to provide a strong positive free cash flow of €560,000,000 excluding for the expansion CapEx in Frankfurt and Lima Airport. Including for those heavy expansion works, our free cash flow was negative at minus 6,000,000 and therefore, in line with our expectations for the year. Correspondingly, our group net debt figure stood short of €8,400,000,000 and our leverage ratio remained at 6.4 times. Both indicators were in line with our guidance. Our current maturity profile is shown on Slide 15. Despite the negative free cash flow, our liquidity position remained at a high level of more than €3,900,000,000 or 4,500,000,000.0 including for unused project finance and committed credit lines. Gross debt on the other side amounted to 12,300,000,000.0 slightly up compared to the third quarter result. At 3.2% the average cost of debt remained unchanged in the second half of twenty twenty four. Looking ahead, we expect to refinements most of the Frankfurt maturities this year.

In addition, we will make full use of the Lima project finance this year due to the terminal completion. As a consequence of the higher cost of debt in Peru and Frankfurt refinance, we expect the average cost of debt to slightly grow this year up to a level of maximum 3.5%. Coming to our segment reporting, starting with Aviation on Slide number six. 16. The segment showed an overall strong earnings development due to the higher pass passenger number, but in particular, due to the 9.5% increase in aviation. Charges. Security revenues also grew by roughly 10%. But were balanced with cost in more or less the same amount. Bottom line, the segment recorded a strong EBITDA increase of more than 21% to an all time high of €374,000,000 despite higher D and A from the write down of the security relocation project, EBIT was nicely up to $2.00 €3,000,000 Looking ahead, we expect continued headwinds from OpEx inflation this year.

While the price increases will support the segment earnings development. Consequently, we expect a moderate growth of EBITDA and EBIT in the current financial year. Moving on to our Retail and Real Estate segment on Slide number 17. Revenues grew by close to 40,000,000 to €537,000,000 All business areas, so retail, real estate as well as parking, contributed to the solid increase in segment revenues. At €3.35 retail revenues per passenger also performed well despite continued closures on the land side. In the Frankfurt Terminal. Key drivers for the solid retail momentum were strong advertising revenues, which were among others supported by the European Soccer Championship. In June and July, and improved passenger mix, thanks to the China recovery and third, an increased dwell time due to smooth and fast security processes. Parking and real estate revenues also grew nicely, among others, due to price effects. On the OpEx side, cost for maintenance services in ongoing projects such as a refurbishment of the parking houses turned out to be higher than initially anticipated. Therefore, our segment EBITDA only grew slightly to €375,000,000 For the year ahead, we expect revenue to supported by passenger volume growth in the retail and parking divisions.

On the cost side, we expect a continuation of the OpEx trend of the past financial year. As a result, we expect segment EBITDA to remain at about the same level of 24, or slightly above. Coming now to our Ground Handling segment on Slide number 19. Q4 was no turning point for the segment. At a stable number of passengers, revenue growth was solely driven by price effects in the fourth quarter. On top of the operational development and higher cost of labor, we booked an €8,000,000 staff related provision to reduce the headcount in the subdivision of the segment. Consequently, EBITDA in the fourth quarter was clearly negative and turned the full year results below the previous year. For the year ahead, we need to restore the financial stability. Therefore, we have already raised the central infrastructure charges by close to 8% and will further reduce the number of external staff. As a consequence, we expect an improvement in segment EBITDA but still expect to remain in the negative area in fiscal year twenty five. Key headwind for the segment remains the loss making Lufthansa contract, which we will have to renew open by expiration in the next twelve to twenty four months.

Our finance segment, International Activities and Services is performing clearly better. I'm now on Slide number 20. The International segment again showed a strong underlying earnings momentum. Despite the closure and gradual reopening of Porto Aleke Airport, revenues and EBITDA grew strongly on a full year basis. Key drivers for the revenue increase were our investments in Fraport Greece, Fraport USA and Lima Airport. At the EBITDA level, we recorded a very good result in particular bearing the following effects in mind. In 'twenty three, Fraport USA recorded a compensation for the early termination of the Pittsburgh master lease concession in the amount of roughly €11,000,000 Moreover, Fraport Greece was positively impacted by COVID compensations. In the amount of about 34,000,000 in the year 'twenty three, while in 'twenty four, Fraport Greece just recorded COVID compensations of $28,000,000 so a minus of $6,000,000 compared to the previous year. Additionally, the closure of Porto Alegre Airport and lower compensation compensation payments led to a reduced EBITDA for Fraport Brazil of roughly €16,000,000 Looking ahead, we are confident that the International segment will continue its growth path also in this year and will further increase its EBITDA and EBIT. Ladies and gentlemen, let me summarize our disclosure today.

Our Frankfurt and international divisions reported good overall year over year earnings growth. Despite a challenging and wide we fulfilled all our group targets we set for the past year. Our group EBITDA clearly outperformed the pre COVID level despite Frankfurt traffic remaining well and significantly below twenty nineteen. While the international airports will continue their volume growth in '25 We expect the positive momentum in Frankfurt as of this month for end of this month. Our major CapEx programs are are coming to an end, and we signed a major agreement on airport charges in Frankfurt. To provide visibility on the development of our revenue side in the next four years or for the next four years. CapEx projects are either stopped or postponed, Therefore, we consequently pursue our path to turn around our free cash flow. This year will mark a first big step as we guide free cash flow which is very close to breakeven or even breakeven our breakeven target here excludes any extra gains from divestment. For the next year, we are confident to achieve a clearly positive free cash flow. Having said this, ladies and gentlemen, I'd like to thank you for your attention and we can start the Q and A session.

Now.

Ladies and gentlemen, we will now begin the question and answer session. And the first question comes from Alexandra Hauwdozer from HSBC. Please go ahead.

Good afternoon. Thank you very much for taking my questions. Mattias, great to hear that you are continuing until 2028. Makes a lot of sense for Fraport. My first question is on retail. Do you have retail contracts in Terminal 2 running out this year? And do you expect to prolong this contract until D2 will close next year? Second, in November, you indicated CapEx will be above €1,500,000,000 in 2024. And on CapEx for FY 2025, I quote Matthias, We are working on a number which is below 1,100,000,000.0 as a group CapEx for 2025. CapEx 2024 was €1,700,000,000 and the guidance for this year is a CapEx of EUR 1,100,000,000.0 and there are a lot of questions from investors today about potential overruns. So could you maybe give some details on these higher figures you mentioned in November? Third, could you please update us on the PRG Will it start operations at the same time with the rest of T3? And have the retail areas been already rented in PRG? And the final question, the new EU Commission has been in office for a few months. Do you have already signals? And what are your expectations, Stefan, about the priorities in the aviation sector of the EU Commission during the current legislative period?

Thank you very much.

Okay. Thank you for your questions. Starting with CapEx. So absolutely correct what you said. We guided €1,500,000,000 We ended up with €1,730,000,000 So this is an [indiscernible] Reason for the overrun was the the €200,000,000 what we always saw as a risk regarding T3 And today, we have to say that the overrun has been realized. So this is not good. But on the other side, it's over now. Looking forward, we do not expect any additional cost overrun regarding T3. So everything is fine. We are going to open after Easter holidays in 2026. And the rest of the CapEx is in line years ago has been guided. So this is passed. Looking forward, looking forward means now in 'twenty five, mentioned we guided now 1.1 I said it will be below 1.1 me say we have a discrepancy of perhaps €50,000,000 and you can believe us or you are I think you are convinced that we are doing all to end up with a number which is shortly below 1.1 But at the end of the day, control the outflow for CapEx depends really what happened in the last two weeks of a year. When I look back what happened in December, '24, was an outflow in the three digit amount area.

But at the end of the day, we have to see whether it's 1,100,000,000.0 or a little bit less Our target is always to realize a number which is below 1,100,000,000.0 All retail contracts there was a question regarding retail contracts. They are not running out. So everything is awarded and will continue in terminal 1. [indiscernible] Terminal two, the retail contracts will be finalized and end of second quarter. Because the airlines will be moved from Terminal 2 to Terminal 3 in a staggered approach probably three or four ways in the second quarter next year. And then Terminal 2 will be taken out of operation. We have solutions with the concessionaire sales. There's no problem. There's no further penalty or something like this to pay. And all contracts regarding Terminal 3 are awarded, and they are preparing for taking over then in latest up to April. So this is working on Terminal 3. Regarding PLG, yes, we will start operations simultaneously with Terminal 3, but it will be mainly on the check-in side, land side, from today's point of view, no operation on the P itself because there we have enough capacity. The first step in [indiscernible] [indiscernible] [indiscernible] On the priorities regarding EU Commission, the top priority stays with carbon leakage.

There are a lot of professional advisers who are giving solutions to the EU Commission yesterday. I heard a study from Ernst and Young, or AY, which would help very much, and that's the top priority. From our side. Another priority is, of course, the question how it goes ahead with the airport and airline package on ground handling, on charges and on the slots. I think these are the three packages. The EU Commission is at the moment just investigating whether they should open those package up or not. We expect probably somewhere by summer or late summer, any further indication from the EU Commission, but these are the two top priorities from our side.

Thank you. Thank you. Okay.

Thanks. And the next question comes from Christian Niedelcu from UBS. Please go ahead.

Hi, thank you very much for The first one, can you give us some initial indication on CapEx and free cash flow in 2026? The second one zooming in on Fraport, on Frankfurt, the midterm maintenance CapEx. So 26%, 27% was roughly the midterm maintenance CapEx. The third one, when terminals three will open, Could you give us ballpark what is the incremental OpEx will incur Terminal 3 versus Terminal two in a full year of operation? And [indiscernible] the last one, you allow me, just on capital allocation, is the pecking order midterm deleveraging dividend acquisition? Any color there? Thank you.

Regarding free cash flow, so again, target in this year 25% is breakeven and 26 showing clear and significant positive free cash flow. Driver for this is CapEx because, let me say, the EBITDA increased will be there, but this is not big step. Up. This is also clear given the traffic momentum at the moment in Frankfurt. So looking now, assuming the 1.1 or as Ms. [indiscernible] 1,050,000,000.00 We have to see at the end of the day So this is a starting point for further considerations in '26. You have to see that in 2026, also the second expansion phase of Lima is over. So there's a further drop of the Lima CapEx, a significant drop as well as a further drop regarding CapEx for T3 because we are going to open after Easter holidays in 'twenty six. And then, of course, we have a delay of some payments, But these are the two drivers determining the free cash flow generation in 'twenty six. The exact CapEx indication, it's too early, but let me say, in the second half of this year, then we come for a guidance for '26 and we clearly see what will be the final outcome in 'twenty five.

Regarding long term sustainable CapEx, you will when you look now on the numbers on in the presentation on I don't know, it's slide number.

Where I show the bridge coming from the net debt 23,000,000 to the net debt in '24 you have, let me say, a proven track record looking on CapEx for Brazil and Greece. For 16 airports, we are spending €50,000,000 for maintenance. This is a good number. And when you look on other CapEx, mostly Frankfurt, the $449,000,000 If you put all together, we are talking about 500,000,000 which is a good indication having also in mind that in these €449,000,000 we are talking in investments in in infrastructure, In Frankfurt, we are also talking in investments in some investments in cars, equipment, etcetera. And when I'm going to mention equipment, this is also equipment for Terminal 3, like, for example, office, furnitures, etcetera, IT equipment, which is more or less a one off So CapEx for Germany, say, don't know the translation in and help me in niche for equipment, which is in the moment higher than in the future.

So from today's perspective, I would say the €500,000,000 is very conservative indication for all including maintenance CapEx for all group. Airports looking forward. And if you already deduct the €1,200,000,000 for T3 and for Lima CapEx, based just on the numbers from 24 as you see already, the strong cash flow generation in a year where the EBITDA is on a level of €1,300,000,000 You know also our long term target So this is then the leverage to achieve a free cash flow generation, which is higher than this, we would have shown already in '24 without expansion CapEx. Further questions have been on the additional operational costs on Terminal 3 That's a year in between next year because on the one side, Terminal 2 is still open for half a year at least. And Terminal 3 has to be prepared already now. Because we already now have to hire some people So in general terms, overall, segments of say, it's roughly 200 people, which we have to hire for fire brigade, for operations, for IT and which is not saying that we need those 200 people long term. But for the in between time, at least, long term, probably 100 people more.

But on the other side, we have very good results. From tenders on the maintenance side. What we do with external companies. So yes, we can give you probably after we have opened up terminals, we have better estimate what are the long term aspects on this on the other side. We also then have higher retail earnings So there's some additional costs in for next year, that's right. And we hire those people already now. On the other side, it's included already in the guidance we gave you. So there's no big downturn. Regarding the long term ratio, you asked on debt to equity. What's our focus I got your question correct. Yes, we have, at the moment, a leverage of 160% net debt to equity. We clearly mentioned that we want to bring this down. It's a one guidance. No, there's not one figure, but we gave you the the indication that net debt to EBITDA should be closer in the long term at least to the number five. It's now 6.4 And it means on the other side also that net debt to equity should be the range of you name it, 80% to 120%. It depends very much how the market are.

One thing is clear for the next years, and I would say at least the next three, four years, there's no big appetite on external growth. By external acquisitions. If at all, then these are smaller projects. Or structural projects. And as Matthias mentioned already, are very strict on CapEx and try to keep it down as much as possible.

And sorry, will you pay any dividends before you get to that 80% to 120% debt to equity?

Yes. A clear answer. Yes, we will. But we have to get much [indiscernible] Let me answer the other way around. First, we have to be free cash flow positive. And as mentioned before, the probability to pay in 2026 for 2025 is a low one, but it's existing. If there's a lot of tailwind. So a lot of tailwinds for the business There would be a very good growth if we come out this year with very good results. And if we see that the business is really moving, especially also in Frankfurt, so international business, I'm quite optimistic on, but especially on Frankfurt, the growth rates are really going up. That's new aircrafts are coming in. And are operated in addition and not just replacing the old ones. That's Lufthansa topic, then there could be that we even pay a dividend in 'twenty six, but it would be a low dividend compared to the range of 46%, which is the normal one. For '27, in 'twenty July the year twenty twenty six, I'm absolutely convinced that we will pay a dividend but it has to be decided at that time in two years from now. So we will have discussions on this.

We have already discussions on this. And we'll see how the business is running this year. But we are not waiting to achieve, finally, the 5% or the 100% or 120% or something like this.

Then the next question comes from Elodie Rall from JPMorgan. Please go ahead. [indiscernible] Thanks for taking my questions. I'll have two. The first one is on the outlook for traffic. So you gave us a bit of an update on Lufthansa capacity issues as well as the constraints that you're facing from the German government on tax and regulations, so hurting the aviation industry. So was wondering, first of all, if you are having any conversation with anyone from the new government, I know it's still a big moving part there, but if they have a more constructive attitude towards aviation in Germany, And if the outlook is looking more positive for traffic in 2026 as a result? And when you think you can be back to 2019 level? That's my first question. And the second question is on ground handling. So obviously, disappointing again, negative in 2025, still expected. Do you think it can be turning positive from 2026? Thanks.

Yes. Thank you for your questions. On Lufthansa capacity issues, so you question was more on the government relations. We all together, whether it's Lufthansa or it's we, whether it's the German association on airports or on airlines, or on aviation in general, we all have the same position, and we're at good discussions with the two parties who probably will form the next government that means the CDU and the SPD, and they all understand issue. They understand that the tax, aviation tax plus the other components, on ATC, of course, there's a sharp increase over there. This is too high and that they would have to resolve it. So the signals are very good. But on the other hand, I also have to say, it's not signed. It's not a done deal. They are now in the coalition discussions and coalition contract negotiations. So we have to stay on this topic and we can give you an update then probably on the May call for the first quarter. To see whether it's in the coalition contract because there, we have to get it in. That's most important. And it's not just because of Frankfurt Airport or because of Lufthansa.

It's in general, also the competitiveness of the aviation market Germany for the German export oriented companies and so on because we are losing more and more direct connections into the world. And that's really an important issue for German industry in general. So yes, I'm slightly optimistic, and I'm more than 50% probability that I would say, yes, something will happen. But it's not a done deal. That's absolutely clear. We are now 22% worse or negative compared to other European markets on the recovery compared to 2019. So Frankfurt is on 87%. German average is on 83%. [indiscernible] come back to the 2019 levels of Fraportona level, will not be possible in one or two years because we also have to handle that growth with hopefully is coming then, but it will take at least three, four years minimum to achieve these levels. But I'm quite optimistic that there is a chance if the German aviation tax is taken away, canceled, if we get positive signals and sorry to say this, but the greens are not for sure, not any longer a member of the next coalition. That's for us. In this industry, positive. The SPD and the CDU are much more positive related to aviation.

They see this point So that's at least a lot of tailwinds. That's positive. And it's the new aircraft. I mentioned the signals you also got from press conference of Lufthansa that they are coming at least on the seven eighty seven. Somewhere in second half. That's also a positive message. And hopefully, it will they will get it through. So there are some some positive signals that we see should see a much better 2026 and 'twenty seven with higher growth rates On ground handling, we are working there on productivity measurements. We are working along the company on productivity topics, on programs, on projects But especially on ground tenings, the most important thing is in the negotiation and the new contract with Lufthansa you will not find it in the numbers before the year 2027. Okay?

Great. Thanks very much.

Then the next question comes from Carlos Caborasi from Kepler Cheuvreux. Please go ahead.

Hello, everyone. Thank you for the presentation and for taking my questions.

Two quick ones from me. First, and considering the risk investments program. I was wondering if you could give us a hint in terms of CapEx per annum for the rest of the decade. And the second, which is actually related to the first one, do you expect a meaningful impact from the lower near term CapEx on your 02/1930 free cash flow target? I'll leave it there. Thank you.

As I mentioned, we have have two steps looking forward. In this year, 1.1 or even lower in 'twenty six clearly a reduced number compared to 'twenty five And again, in the second half of this year, we will give you a clear guidance what will happen exactly with CapEx in 'twenty six And looking forward, you see maintenance CapEx I already explained, about €500,000,000 for the group level. Which is a good indication, including all 30 assets which we have today. And this is determining, let me say, the long term base CapEx we have no intention to go for big acquisitions at the moment. And I think this is the best guidance as of today what will happen in 02/1930. But frankly spoken, I don't give you today an exact guidance, 02/1930. This is not serious.

Then the next question comes from Andrew Lomberg from Barclays. Please go ahead.

Hi, there. Can you just help me understand why the pickup in Porto Alegre in Brazil has been so slow because the January data look looked very slow and it looked like the capacity is quite slow whilst Florianopolis for the Swiss continues to trade so well.

Why hasn't the traffic slowed back more promptly to Porto Alegre? And I thought earlier last year, you were very confident that you would get full compensation for the closure impact of Porto Alegre and yet that's not completely clear to me. So is there more compensation to come the course of 2025 for the closure of Porto Alecre in '24? And then just my one other question would be what's going on in the ground handling market with the competitor? Did SwissPort finally get themselves up and running? Are they running smoothly? And previously, you said that given the challenges to the ground handling market, notwithstanding clearly the economic contract with Lufti from your perspective, you were quite keen to hand over contracts to the competitor to reduce your exposure to ground handling. Has anything happened to lose other contracts apart from Loughty? Let me start with Porto Alegre. The indications we get from the market, we get also from our water company in Brazil are very positive from Porto Alegre. And that is still a little bit slower yet at the beginning now, beginning of this year, the next month. That's just because the airlines have to restore their capacities.

They have to change aircraft which are flying from other destinations back to Puerto Rico. They have to market initiatives, but they will come and signals we know are very positive even supported by the state of Rio Grande del Sol. So there, I'm quite optimistic. Full compensation, yes, we get a full compensation Probably what we should have discussed more in detail that there have been [indiscernible] on faults, which have been known in the infrastructure of €10,000,000 €15,000,000 I think was the number which are not due to the flooding, which have been known before that we have to do it, which we have done now in that big program together. And there will, of course, get no compensation on But that was a smaller number, and we have we got a compensation of more than €80,000,000 I think, something like this I think it's the number. And we invested including those forts. We knew that this has to be done over the next years, which we now did. The total program, roughly €100,000,000 or $95,000,000 or something like this. On Ground Handling, here in Frankfurt, it was not our task at all to handle it with the third license as it happened.

But we cannot avoid if more and more airlines want to be handled by Fraportown services, So the market share even went up some because of the subcontracting solution, which was not our favor to do it this way, but we'll which is the case for the remaining months in the for the next month in this year. And then we have to see how the market share is developing. So that was not our task to increase the market share. It was a topic by the airlines at the wanted to be handled by Fraport or Fraportown services on the one side and that SwissBot on the other side was not be able to handle them So it could be an interim, and we have to see how it goes ahead then. [indiscernible] The next question comes from Dario Maglione from BNB Paribas.

Please go ahead.

Hi. Three questions from me.

One on free cash flow for $20.25.

I mean, you mentioned it's going to be close to breakeven.

How close is my first question? Second question on CapEx.

For Frankfurt. You mentioned before the maintenance CapEx.

For the group at 500,000,000 But also, I think you mentioned before that for Frankfurt specifically, maintenance CapEx will be around €350,000,000 per year.

However, as you're now guiding for 2025 at 400,000,000 So my question is what is the maintenance CapEx for Frankfurt specifically?

And the last question on ground ending.

Just big picture.

Has been loss making for five years. And it won't be will not be breakeven on EBITDA level next year.

So why not exiting this business or divesting Thanks.

Let's start with CapEx, and let's focus on Slide number 13, where you can see all the metrics of calculation for 'twenty five.

Euros What is a given and what are the variables? A given the net interest elements because gross debt is given, interest rates are given, taxes are more or given. So the minus 400,000,000 is is a given and is not a variable. Also, the IFRS 16 items as well as the fixed concession payments are given. So we have minus 400,000,000 which is not variable We have minus 100 which is not variable. And also, the inflow of dividends of about €100,000,000 of course, depends from the operational success or performance, but I think there's a very high probability that we are going to receive 100,000,000 So three elements on the picture are not variable. What is variable? A little bit on the EBITDA side, depending from traffic, whether it's a little bit better and lower. Second, it's always extremely difficult to have a precise calculation what is the outflow for CapEx. So €50,000,000 plusminus is always a natural, let me say, white noise, so to say, can be a little bit higher, little lower. Again, our target is to come out with a number which is below €1,100,000,000 And then you also see on the slide net working capital changes This is not principal hope.

We know already now some items, what is it, refund of VAT etcetera, outside Germany. So we know that some elements are running in favor of us so that the net working capital runs positive, and this we have included. Nevertheless, we see always regarding CapEx, plusminus €50,000,000 regarding net working capital changes plusminus 30,000,000 and always regarding the final number of EBITDA, which is driven and generated by passenger numbers, some uncertainty.

But you see on the picture, it's very close. It can, at the end of the day, with some tailwinds. It can even break even. What would be our favorite.

It can also be that in a double digit number, we are below breakeven. [indiscernible] important is, looking forward, we are extremely close to breakeven or even will touch it. But very important is that the year after in 2016, we will show you positive free cash flow as already since years ago. Guided looking ahead. Maintenance CapEx, again, I told you and explainedly €500,000,000 which includes also CapEx for IT, for equipment, etcetera. You have always some volatility behind this number. You cannot say we are talking about 30 assets in our portfolio and nobody in the world can say with the exact 483,000,000 maintenance CapEx because you have always some things which pop up overnight or other things which do not happen or will be delayed. But if you in your metrics, in your calculation, your Excel sheets, if you work with a €500,000,000 number looking forward, you have a very good base number. Regarding Ground Handling, the most important issue there is the twenty eighteen signed contract, I think it was 2018, a long term contract with Lufthansa and Lufthansa Group.

Which includes some price increases, but they are very limited And the world thereafter, after corona and so on, change stuff costs increase are much higher than the price increase we have in the contract and that the main reason for the losses in that segment. Combined with a peak structure, which is already above 2019 limit, 2019 structure of the traffic, so very high peaks. And that gives some unproductivity. And combined with the topic that we all together have to challenge that the ATC capacity leads to in Europe, not in Germany, but in Europe in general, including Germany, leads to high delays by ATC because a lot of regulated slots, and that means the ground turning people are long on the aircraft that they should be. And that's in a mixture that we are fixed in with this contract with Lufthansa. Of course, you could say, but that would be the wrong timing to say something like this. And we mentioned already before that we have to go into the negotiations because the contract with Lufthansa is running out 2026, and we'll start that negotiation somewhere over the next twelve months, I'm quite sure. And thereafter, you can think about the topic.

But even then, you should take into account, and that's the reason we are in that pound heading. I'm not saying said market share, but that we are in the account ending business because we have a very, very high portion much higher than other airports and threats of passengers, and we need a high stability on the ground operations, and that's one in a very, very good way. That's absolutely fine. From the stabilization point of view. So there are no delays any longer by ground handling. That's not the issue. But now the second important point is to bring out the financial spec. [indiscernible] for that, we have to have the negotiations with Zuftan Then thereafter, we can take questions like you, for the next two, three years, that would not be a solution on that side.

Thank you.

And the next question comes from Christian Kaus from Warburg Research. Please go ahead.

Yes, hello. Good afternoon. Thanks for taking my questions. Sorry to come back on the ground handling issue, but looking into your financial history even before 2018, the financial performance of this division was muted. So is there any chance or do you see any chance for a sustained improvement that will allow return on Fraport asset that is exceeding the WACC. So far as I can look in your financial history, this has never been the case. And yes, are there any things you how you could improve your pricing power in this specific business field? And second question relates to some Petersburg. If I remember correctly, your investment into St. Petersburg comprised an equity stake, but also I think you have given some loans So now you have sold your stake. Are the loans still outstanding? And is there any chance for these to recover?

Yes. Thanks for both questions, Christian. You're absolutely right regarding ground handling. Whether we exceed the WACC, that's of course an ambition question. But even if Lufthansa is in that call, I don't know. I can I can be absolutely clearly, our ambition is to write black numbers? And we are preparing for this, and there's no question at all. Have to write back numbers, so we have to make profit in ground handling. And there's no question at all. And yes, if I get sometimes a signal, somebody asked me today, that Lufthansa is on the way to do to prepare themselves for safe handling. Fine, then they should do it. I'm absolutely fine. With this, I can just tell you, we go for black numbers and we go for profit. Sorry, I understand that the top customer has to survive and so on. They have to do their business. We have to do our business. That's absolutely fine. And we bring a very good quality. And so yes, the negotiations will be difficult, but that's our responsibility to be prepared for those negotiations, and we will be prepared for these negotiations. Not just Lufthansa, we have also the central infrastructure in the segment, which covers 50% of the revenues.

And here and this year, we are going to increase the prices by 7.8%. And there's headroom for 26% to do the same or even a little bit higher. So this is not let me say, the compensation for Lufthansa, but one segment which covers 50% of the revenue, more than €300,000,000 will then a price impact already in this year, 7,800,000,000.0, and next year, which is, for example, 9.5 can see that we are talking about €30,000,000 just price on [indiscernible] regarding 50% of the total revenue of the segment. On the rental interest rates, you know that we have 90 airlines here in Frankfurt and with all other 89 airlines or yes, we have to take Lufthansa as a group, but all other airlines which are not belonging to the Lufthansa Group we achieved a really high price increase because the cost are so much running on the staff side and these price increases with those others have been much more than 10% much more and much higher and that's working, and they understand this. And I'm quite sure that also of Sandoz understands what they get as the quality and that they will pay for this. Regarding St.

Petersburg, everything is sold on that side. Equity and loans. So there will not not coming in anything else. And the return on the St. Petersburg exposure has been a single digit return CRG number, so roughly around 5%, 6%. In total over the years.

Okay. Thank you.

Then the next question comes from Wojtal from Bank of America.

Yes. Good afternoon. Thank you so much for taking my questions.

I have a couple of questions on Terminal 2, if you allow me. Firstly, you just remind us what is the latest regarding the upgrade and the refurbishment of the terminal? What is the total CapEx that will be allocated to it? And when you mentioned the €500,000,000 group CapEx medium term, do you already include the refurbishment of Terminal 2, just to clarify? My second question, can you just confirm the Terminal 2 will remain included in your regulated asset base during the refurbishment? Thank you.

Yes. First of all, clear answer, T2 will stay in the regulated asset base because we will take it again into operation in the future. When T3 is opened, based on the staggered approach and rollout process, then second half of 'twenty six, We are going temporarily to close Terminal 2. We are going into a last a long lasting planning phase be very precise what to do in this total refurbishment of the Terminal. We have time because we have this T3, we have more or less twice as much capacity compared with Terminal 2. We have to see when we are going to start with the refurbishment with Terminal 2. But we have a lot of time looking forward. Then we have also, after the planning phase, we have a precise amount what will be invested. This will spread over, I would say, ten years or up to ten years and this will not significant. Of course, it can be then in some individual year.

It can be more than the €500,000,000 This is for sure. But overall, it's not a number which changed this CC's baseline.

Okay. Thank you.

Then the next question comes from Jose Manuel Aouillas from Santander. Please go ahead.

Thank you. Good afternoon. I have three questions. In relation to Terminal 3, you said earlier that there is that there was always some risk of CapEx overrun and that, that's materialized 2024. You tell us what happened this year? And what gives you confidence that any such thing will not happen in the coming years. My second question is on the Terminal 1 Concourse B project. [indiscernible] I missed your explanation as to why you stopped it. Could you tell us also what Fraport misses by not having this project ready? And my last question is on Slide nine, where you guide on the uplift to retail revenues that Terminal 3 will provide. You mentioned €30,000,000 incremental revenues coming from Terminal 3 compared to Terminal 2. But on the slide, you mentioned that that figure includes also your expectation that traffic will be higher. Could you isolate uplift assuming traffic remains constant? Thank you.

Let me start on Terminal 1. Yes, you are right. And we mentioned this that we stopped the security relocation more to the land side.

Because it's a very expensive project. It takes several years to get through. That means that we would have seen in Terminal 1 over the next at least five years constant constructions And for that, we thought that at the moment, the benefit not big enough. We should more focus on CT scanners in B and most efficient process in That's the main topics. There are some other topics around processes how processes would have been changed and how long ways would have got if we would have realized this now. So we say, no, we take more time for this. And that's the reason that for the time being, we stopped that project on Terminal 1. But nevertheless, we are very much on customer focus, and that's the reason we'll bring in there In the existing environment, we'll change it to CT scanners and with a much higher capacity. On Terminal 3, the main reason is, yes, the cost overrun we indicated already and Matthias mentioned will be more on the €200,000,000 side. But all CapEx is done. All tenders are done. As I mentioned, the construction is through and everything is done on that side. We are now really in the final jobs on all interior measurements, all cabling and so on.

So there could be, of course, some smaller acceleration jobs or something like this But from the CapEx point of view, there shouldn't be a big topic any longer we never discuss on such a big project whether there are an additional 10,000,000 or €20,000,000 But [indiscernible] we are through there, and that's the reason we are confident that we know what the number finally will be. On Terminal 2 and regarding Terminal 3, we don't give spend per passenger or per Terminal What we can tell you is that we are 50% in addition [indiscernible] so square meters and for sure also spent Terminal 3, if I compare directly with Terminal 2. But it's not helping you very much, know, because we are not giving any spend per passenger number for Terminal 2 or for Terminal 3 and for Terminal 1. I can just tell you that the location of retail and gastro food and beverage is much better with the centralized marketplace internally and that we see expect a heavy upgrade uplift there also on that spend. Which will be on group numbers in total, of course, smaller but with the plus 50% we expect Terminal 3 to Terminal 3 in a full year range to 2027, you will see also an increase in the average number in total.

Then the next question comes from Graham Hunt from Jefferies. Please go ahead.

Thank you. Actually, just one from me. I just wanted to come back to dividend how you're thinking about that from 2026 or 2027 whenever it does come through. I think you did speak earlier on the payout policy historically. But given the step down in CapEx and significant step up in free cash flow, plus if you didn't pay one in 2026. Would there not be scope to see a meaningful increase in the payout policy versus what you've done historically? Just Just wanted to sort of think hear your thoughts on how you're thinking about that. When you do start paying a dividend? Thanks.

What we gave you as an indication is that for the year 2025, we expect free cash flow breakeven maybe slightly negative, but around breakeven that means if we would pay a dividend in the year 2026, for the full year 2025, it would be paid out of debt. That would mean that we would, if at all, pay a smaller dividend not in the range of 40% to 60%, and that's not decided, and it depends very much whether we have a lot of tailwinds then. That we see that really new aircrafts are coming in, that the aviation tax is taken out and that we see that business is really getting up also in Frankfurt and Germany, in general, is much more positive seen as it now has it is these days. If we start paying in 2027 for the year 2026, I would expect that the dividend payment would be in the range that is historical range of 40% to 60%. But also to be absolutely clear that finally, the decision we have then to take and that taken also by the Supervisory Board and then finally by the annual meeting. But that would be probably our recommendation from today's point of view Let's see how the world and his Okay.

Thanks.

Thanks. The next question comes from Nicolas Mora from Morgan Stanley. Please go ahead. [indiscernible] two quick ones. You mentioned that into 2026, you don't really see much EBITDA growth I'm a little surprised because you've got you've already guided for around 4% traffic growth that year. You've got also tariff increase. You've got ground handling getting better. You should get at least for half a year a bit of uplift on retail. Do you think most of that is offset by by higher costs? That's what you you're trying to flag? That's point number one. And then point number two, just coming back on the retail upside for Terminal 3.

Think like Jose Manuel, I'm a little bit taken back you. I think you've said on previous conference calls, T2 was around €2 per pax. What you're flagging is 50% increase on that. So 3 per pax spending for T3, that's still below the average. That looks spectacularly low. So just wanted to know if you could clarify a little bit there. Thank you.

First of all, our guidance is not modest. We said it's a moderate single digit increase And so it's a lot of fantasy how it could be, and this depends really from the tailwind coming from the traffic. But again, single digit times 1,300,000,000 the fantasy is big. So this is one side. And on the other side, there's one elephant in the room, or, let me say, a variable which we cannot control, and this is a wage increase. And in the moment, there are negotiations with with the unions, Verdi, regarding the TFOOD. This is wage agreement is absolutely open, and we don't know what will be the outcome. We are not negotiating negotiating. This is the Ministry of Inner Affairs is its responsibility in cooperation with the federal states and Germany just to give you a number, 1% wage increase equaled 10,000,000 in our P and L. This makes it so difficult to give you you want to have a precise guidance for the year 'twenty five. If you are going to tell me is the outcome of the wage increase, I tell you exactly what is our EBITDA outcome. So it 4%, 5%, 6%? Nobody knows.

And you see variance, again, 10,000,000 per 1% increase. That's the reason why it is so difficult to have precise outlook, and that's the reason why we say single digit increase can be high, can be low, more or less depending from passenger growth on one side, which we cannot control, in Frankfurt and second, outcome of the wage negotiations now in the moment, let me say, between Verdi on one side and the federal states and the Ministry of Interfares on the other side. And also retail, I think, 50% increase is [indiscernible] the same story. We are going to tell you that the increase will be 50% And this is a good number, but exactly nobody knows. We have We have more space. We have nice restaurants. We have fantastic shops then. But whether it's 50%, 60%, 40% or even 70 we have to see. But I think it's a good indication and it doesn't make any sense to promise a high number, which at the end of the day, cannot control by us but the spending behavior and the deep pockets or not deep pockets of the passengers.

Thank you. If I may, in fact, comment on EBITDA was was more into 2026. I think it's Matthias who hinted that it when talking about breakeven free cash flow, it did not expect much EBITDA growth in that year. I was just wondering what were the Yes.

Twenty twenty three twenty twenty six that's a year where Terminal 2 is getting out of operation, Terminal 3 is getting into operation, whereas there's additional cost, as I mentioned already, because of the additional OpEx and so on, And what Matthias mentioned, what we have seen yesterday from the rate agreement, from the negotiations, the employees, there's a Mr. Offered 5.5%. I don't know whether this is on twelve months or whether this is on which view it ever, and they couldn't agree. So it's in a break situation. So the result will be more than 5% five 0.5% but hopefully then for a longer period. And in 2026, we will have the full impact on that.

And then it's a question whether we get a stronger traffic growth yes or no. So are the additional aircraft are then really in? Is Whitney getting that issue a little bit less? And these are the components which are a little bit too early at the moment why we mentioned, yes, probably it's more moderate growth, whatever moderate is. Then absolutely in line with Matthias. Whatever you discuss in between 2% to 5% is modeled for me. But 5% or 1.3% or 1.4% is already a lot.

And we do have a follow-up question from Christian Netelshu from UBS. Please go ahead.

Thank you very much for allowing me to add. The Terminal three remaining CapEx your table in the appendix is very helpful, but could you remind us you already guided for 25%, but could you give us a bit 53,000,000 was the remaining CapEx there just to confirm? And secondly, in your annual report, you you talk about potential risk of CapEx €300,000,000 for the drainage of the runway. In Frankfurt. I think you allocate a probability of 25% to 50% that at some point this may come through. So if the water authority company would trigger this CapEx would this be on top of the €500,000,000 run rate you earlier or it's already included? In that run rate? Any more color there would help. Thank you.

Let me take the second answer first. The second question is answering the first that potential risk you will find in our annual report already for five to ten years, I would say, maybe even longer. Sometimes, yes, we have to realize some smaller issues. So the $300,000,000 is the total cost number. If it would come in it would be my best estimate over several years. So it would be included in that number. It's not the one off, which you have to pay the have invest it in one year. It will be a long term investment and spread it over a lot of years. So that's not an issue for you, but we have to mention those risks. It could happen. That depends very much how is the condition on water and on all [indiscernible] fluids there and the composition of the water so on, de icing and so on. It's a normal, it's getting better. So the risk is for sure less we have to see how the next winter And your question regarding further outflows for Terminal 3, it's you know from twenty May you can see in our presentation, is up to about €400,000,000 in this year. [indiscernible] what is a final number than in twenty five million But as of today, I would say about $250,000,000 and then a very small amount remaining in 2027.

If you put all the numbers together also, accumulated from the past, then you end up with 4,200,000,000.0 maximum €4,300,000,000 This is what we already guided years ago. Euros 4,000,000,000 plus €200,000,000 cost overrun, which today is a given. And we will end up exactly this, including the €200,000,000 cost overrun.

Full stop.

Thank you. Ladies and gentlemen, this was the last question. I would now like to turn the conference back over to Christoph Nankke for any closing remarks.

Thank you, and thank you all for participation, for your interesting questions.

We, in Investor Relations looking forward to continue our talks in the next days and weeks, phone calls, meetings and conferences I wish you a good rest of the day, and yes, happy to see you soon. Bye.

Ladies and gentlemen, the conference is now concluded, and you may disconnect. You for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.