Results trend
Aviation revenue
Due to the increased traffic volume at Zurich Airport, flight operations charges rose by CHF 40.8 million or 8% to CHF 580.1 million in the year under review.
Aviation fees and other aviation revenue amounted to CHF 92.7 million in the year under review, which is a rise of CHF 21.9 million over the previous year. This disproportionately high increase of 31% is largely because of the increase in usage fees at the start of 2024 in connection with the refurbishment of the baggage sorting and handling system.
Overall, aviation revenue outperformed the growth rate in passenger numbers due to the increase in aviation fees mentioned above and rose from CHF 610.1 million to CHF 672.8 million (+10%). Aviation revenue was equivalent to 102% of the level seen in 2019.
Non-aviation revenue
Non-aviation revenue rose by 4% to CHF 653.5 million in the year under review, equivalent to around 119% of 2019 revenues.
Total commercial and parking revenue increased year-on-year to a total of CHF 276.5 million (+5%). Advertising media and promotion posted the highest relative growth, partly caused by higher passenger volumes.
Real estate revenue also saw a positive performance, rising CHF 0.9 million in the year under review to reach a new record high of CHF 197.4 million. The CHF –4.3 million decline in energy and utility cost allocation was offset by higher revenue from rental agreements of CHF 5.1 million. The expected decrease in energy and utility cost allocation is mainly due to lower energy and waste costs, which can be passed on to tenants.
Revenue from services increased by 3% to CHF 48.7 million in the reporting year, primarily due to higher passenger volumes.
The international business continued to grow and benefited, among other things, from the operational takeover of the airport in Natal, Brazil in February 2024. The airport in Florianópolis, Brazil, recorded a significant increase in passenger numbers due to the temporary closure of the nearby airport in Porto Alegre. Revenue from international airport concessions rose to CHF 100.9 million.
A year-on-year reduction in construction activity in Latin America led to a decline in revenue from construction projects ("concession accounting") of 30% to CHF 26.9 million. Overall, revenue in the international airport business rose by 11% to CHF 130.9 million. Factoring out the income statement-neutral revenue from construction projects, revenue from the international airport business grew by 31% or CHF 24.9 million.
Operating expenses
Total operating costs increased by 6% year-on-year to CHF 593.3 million. Adjusted operating costs (excluding expenses from construction projects) increased by 9% to CHF 566.5 million. Adjusted operating costs were 17% higher than in 2019.
Personnel expenses in the reporting year rose by 11% to CHF 244.9 million, largely thanks to the increase in headcount and the inflation adjustment. This also includes a valuation adjustment of CHF 3.3 million to pension fund liabilities due to the increase in the conversion rate. Costs for police and security also rose by CHF 13.3 million to CHF 129.9 million (+11%) due to higher passenger volumes and inflation adjustment.
As expected, energy and waste costs fell CHF –4.5 million (–9%) to CHF 44.4 million due to reductions in electricity and district heating tariffs.
The cost block for sales, marketing and administration rose by 18% to CHF 58.0 million This increase was mainly due to additional external support, price increases for IT software and various administrative costs.
Operating and consolidated result
Earnings before interest, taxes, depreciation and amortisation (EBITDA) increased year-on-year by CHF 56.3 million to CHF 733.0 million, equivalent to an increase of 8% and a new record. The EBITDA margin remained high at 55.3%. Compared with 2019, EBITDA was up by 14%.
Depreciation and amortisation rose in the reporting year to CHF 299.5 million (+4%). Amongst other things, this increase was due to new project activations for the baggage sorting system and the commissioning of the extension to the Zone West apron. Also included is an impairment loss of CHF 7.8 million for the airport in Iquique, Chile. The main reasons for this were the delay in commissioning and cost increases for the new terminal as well as adjusted assumptions concerning future revenue and cost performance.
The finance result moved from CHF –12.2 million to CHF –20.1 million. At the Zurich site, interest expenses fell due to a reduction in debt. By contrast, the debt at the international companies increased, which led to higher financial expenses overall.
The consolidated result for the year under review rose by 7% to CHF 326.7 million (previous year: CHF 304.2 million), setting a new record.
Investments
In total, Zurich Airport Ltd. invested CHF 570.9 million (previous year: CHF 437.7 million) in property, plant and equipment, projects in progress and airport operator projects, of which CHF 292.5 million at the Zurich site (previous year: CHF 234.4 million).
The single biggest project at the Zurich site was the refurbishment and expansion of the baggage sorting system. Other key projects included developing the landside passenger areas, preparatory work for the development of the main airport complex (new Dock A, tower and dock base, etc.) and the Zone West apron extension.
Assets and financial position
At the end of 2024, cash and cash equivalents and fixed deposits (excluding noise-related funds) amounted to CHF 308.9 million, of which slightly more than CHF 200 million was attributable to the Zurich site.
In May 2024 the maturing debenture of CHF 300 million was repaid without taking out any long-term funding.
Based on the operating cash flow of CHF 641.6 million and investments in property, plant and equipment, projects in progress and airport operator projects totalling CHF 570.9 million, the resultant free cash flow for the reporting year was CHF 70.7 million (previous year: CHF 242.8 million).
Financial outlook
Around 32 million passengers are expected at Zurich Airport in the current year, which would be a new record.
Aviation revenues will move in line with traffic growth.
Non-aviation revenue is expected to be slightly higher overall. At the Zurich site, the rising traffic volumes will have a positive impact on parking revenue. Commercial revenue, on the other hand, is likely to fall, partly due to the temporary closure of further commercial space as part of the project to develop the landside passenger zone. Within real estate revenue, revenue from rental agreements is forecast to rise slightly, with energy and utility cost allocations having a dampening effect thanks to tariff reductions for electricity and district heating. All in all, real estate revenue is therefore expected to decline.
Revenue from international business will increase again and for the first time also include contributions from operating the new airport in Noida, India.
Operating costs are also expected to be higher, mainly due to inflation-related adjustments, volume-related increases and measures to increase employer attractiveness. Personnel expenses will increase more than average as a result of taking on services for passengers with reduced mobility (PRM), but this will also be offset by lower other operating costs. The opening of the new Noida airport will also cause an increase in operating costs.
All in all, Zurich Airport Ltd. expects earnings before interest, taxes, depreciation and amortisation (EBITDA) in 2025 to be roughly on the same level as the previous year. Consolidated profit, however, is likely to be lower than in the previous financial year. With the opening of Noida Airport, depreciation and interest expenses will have an impact on the income statement.
Investments at the Zurich site are expected to amount to between CHF 300 and 350 million in 2025. Investments of an estimated CHF 300 million are expected at subsidiaries abroad, with completion of construction of the new airport in Noida accounting for the majority of this.
Dividend for the past financial year 2024
The existing payout ratio of around 40% of net profit after adjustment for one-off effects will be retained and distributed in the form of an ordinary dividend. As in previous years, an additional dividend will be distributed from the capital contribution reserves in addition to the ordinary dividend.
The Board of Directors is therefore proposing to the Annual General Meeting the payment of an ordinary dividend of CHF 4.30 per share and an additional dividend of CHF 1.40 per share.
New dividend policy from financial year 2025 onwards
As the planned additional dividend for the 2024 financial year will have exhausted the capital contribution reserves, a new dividend policy has been set for the coming years.
A new dividend policy will come into effect from financial year 2025. In future, the payout ratio should be around 50% of net profit (consolidated profit) adjusted for one-off effects.
In addition, the payout ratio will be increased by a further 25% if the ratio of Interest-bearing liabilities (net)/EBITDA is below 2.5x.
If debt is low (the leverage ratio at the end of 2024 was 1.6x), the total payout ratio may therefore amount to around 75% in future.
The 2024 Annual Report and Investor Presentation of Zurich Airport Ltd. are available under https://report.flughafen-zuerich.ch/2024/ar/en/ and https://www.flughafen-zuerich.ch/newsroom/en/ir-presentations/.
