Full Year 2020 Aeroports de Paris SA Earnings Call Paris Cedex 14 Feb 18, 2021 (Thomson StreetEvents) — Edited Transcript of Aeroports de Paris SA earnings conference call or presentation Thursday, February 18, 2021 at 10:59:00am GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Augustin Pascal Pierre Louis Marie de Romanet de Beaune Aeroports de Paris SA – President of the Board & CEO * Edward Rodolphe Paul Arkwright Aeroports de Paris SA – Deputy CEO of Development, Engineering & Transformation and Member of Executive Committee * Philippe Pascal Aeroports de Paris SA – Member of Executive Committee & Executive Director of Finance, Strategy & Administration ================================================================================ Conference Call Participants ================================================================================ * Arthur David Truslove Crédit Suisse AG, Research Division – Research Analyst * Cristian Nedelcu UBS Investment Bank, Research Division – Associate Director and Aerospace & Defense Analyst * Dario Maglione Exane BNP Paribas, Research Division – Research Analyst * Elodie Rall JPMorgan Chase & Co, Research Division – Research Analyst * Nicolas J. Mora Morgan Stanley, Research Division – Equity Analyst * Siobhan Lynch Deutsche Bank AG, Research Division – Research Analyst * Virginie Rousseau ODDO BHF Corporate & Markets, Research Division – Analyst ================================================================================ Presentation ——————————————————————————– Operator [1] ——————————————————————————– Good morning, everybody, and welcome to the annual results conference of the ADP Group. My name is Stefano. I’ll be the coordinator of your event here today. (Operator Instructions) We’ll give the floor straightaway to Mr. Augustin de Romanet. ——————————————————————————– Augustin Pascal Pierre Louis Marie de Romanet de Beaune, Aeroports de Paris SA – President of the Board & CEO [2] ——————————————————————————– Ladies and gentlemen, good morning, everybody. Thank you for logging on to our results conference for the ADP Group for 2020. Now we’ll talk about the highlights, firstly, for the year, then Philippe Pascal will present the financial results, and I’ll conclude myself and talk about the outlook of ADP Group for 2021 and the medium term. If we look at the first slide, that’s #3 here, that will be on screen in just a second, I’m sure. You see 2 sets of curves. There are the dotted lines for 2019 and then the full bold ones, that’s for 2020. Now there are 2 curves for each category. The orange one dotted is Paris Aéroport alone in 2019, and the blue one that’s dotted is the ADP Group in 2019. And the bold curves, full lines, you have orange for Paris Aéroport and ADP Group in blue. Now there’s a common feature between Paris Aéroport and the Group. It’s the fact that in April and May, the airports were empty, no traffic. And then the second point is a difference. You see that there was a recovery in our Indian airports, in particular, and also in Turkey in a stronger way than for the Paris Aéroport themself overall. So all told, we had 96.3 million passengers, down by 60.4% if we include GMR. And if you focus just on Paris Aéroport, the drop is 69.4%, with just 33.1 million passengers. Now that’s the strongest drop we’ve seen in the last 50 years. We’ve gone back to the traffic level we had in 1995. The main point to be taken out of these results is on the graph on the next page, that’s Page 4. You see that the operating income from ordinary activities is positive in spite of [revenues] that went down by EUR 2.563 billion, going from EUR 4.7 billion to EUR 2.137 billion. Now this operating income from ordinary activities remained positive, thanks to the flawless mobilization of our people on the job, great solidarity shown because more than 50% of people were in parcel activities, we call it, for the year. So we’ve managed to flex up our investments, adopt a variable approach to our expenses, renegotiate some contracts and so on with suppliers, and we kept our head above water, so to speak, in that manner. Now of course, we had to do a lot of impairments of assets abroad. We also booked provisions to come into a line in terms of personnel management and the NRAG is also negative, as you see here on the screen, the net result attributable to the group, as well as the operating income from ordinary activities. Now I’d like to move on to the next slide. We try not to forget our clients in periods of crisis, that is the temptation, isn’t it? So the quality of service remained a main priority for us, reflected in a 3.89 rating in the ASQ score by the ACI, which is up in Paris-Charles de Gaulle, it’s beyond 4, especially Terminal #3. So good quality of service — excellent quality of service, in fact. And then secondly, in terms of retail, we managed to organize the flows and streams of people such that the retail outlets could remain open. We focused on quality. We didn’t want to see the outlets going bankrupt or anything. So we maintained the sales per passenger in the Paris Aéroport facilities over 2020, EUR 19.1 was this sum. And 23 of our ADP Group airports are now signatories of the Airports for Trust charter in support of an even more sustainable and responsible airport industry. So carbon neutrality is what we’re aiming at by 2030, development of airside solutions to speed up the environmental transition, especially so to have hydrogen-powered planes and sustainable aviation fuel powered aircraft. And we want to be part and parcel of the local resources, the local regional circular economy and foresee — reduce our environmental footprint in the terminals themselves with more sober design in them. Also, that’s the spirit in which we are going to review the situation for the future terminal in Charles de Gaulle airport. We’ve been working on the project for 3 years in that respect. It was supposed to come to fruition in March or April with public inquiry — public consultation. Now the fact is there has been a huge reduction in air traffic. We should get back to the 2019 level in about 2026 or thereabouts. So that will postpone by 6 or 7 years, the need for a new terminal to accommodate new passengers. So the new terminal we were thinking of operating in 2028, if you do your mathematics, it won’t be needed until 2034. So it’s, in a niche, a lot native way that we’re going to address this situation. We’re going to respond to the state authorities and come up with an overhaul of the project. And also we have put in a very good performance in terms of corporate social responsibility. When the crisis hit, and this is the next slide, if you don’t mind screening it, what did we do? What did we do? Firstly, from March onwards, we wanted to make sure we took care of the health of everybody. So in the passenger journey, we were careful to set up the right equipment, the right signage, public address announcements, reminding people they have to wear a mask, use sanitizer and so on. And we also used some technological innovations because we organized a contest, a global contest, to encourage new ideas. And there’s lots of innovation and experimentation that has been done to address the needs of the health crisis, and there were 4 prize winners in that context. There’s CASPR. They have a system to purify air with ultraviolet rays. And we achieved a degree of quality of air in our terminals, which is equal to an operating theater in a hospital. Secondly, we have a partnership with RUBIX, which is a company that captures — that measures, I mean, the quality of air, but also detects odors and microparticles. We have a company called DETEKT’IN, which also, with ultraviolet technology, can disinfect 100% the overhead bins used for hand luggage in the cabins of aircraft. And finally, we have also decided to make use of LiDAR, it’s supplied by a company called Outsight, to measure in real-time in 3D, the movement of people, luggage objects, measure physical distancing and send in people if it’s necessary so as to ask people to stand further apart and so on. We also set up thermal cameras. And additionally, medical evacuation corridors, especially with Réunion Island. We’ve done it in person around the world, but 22 of our airports are now equipped with the right equipment and they’ve got the accreditation for — the AHA accreditation. So that’s important. The airports were spearheading what can be done so to reassure clients, passengers, airlines and everybody else. A few words now to say that we put in huge efforts to make savings is because we think that the crisis is here to stay for a while. Why? Firstly, because we’re a connectivity business line. And if you haven’t got proper safety at the origin and destination, connectivity is going to be threatened. So there are all sorts of variations in what you can do. And then we have the new strain, the variant, of the virus and the travel restrictions changing as the pandemic waves change. So the situation on vaccination is highly contrasted from one country to another. It will take a while for us to get back to normal, we know that. And without considering that demand will be totally lackluster, I think people have wanted to travel for the last while and they will travel when they can. But the traffic volume is bound to go down. We won’t bounce back to the previous level. And environmental concerns are also an issue for people, would-be travelers. And the airlines aren’t in the best of health either. So air traffic is bound to be in a weak situation for some time to come. So to sum up the actions we’ve been taken — taking in the group, you see Slides 8 and 9, we have made the situation safe for our passenger clients. We have also made, as safe as possible, the environment for suppliers and providers, EUR 50 million put into that in the year. Up to the 20 — up to the 1st of November 2020, the aircraft of airlines parked in our airports were actually exempted from fees. So we decided to forgo — to waive fees — parking fees that would have applied, normally speaking. Also, we wanted to secure our cash position in the group in March or April. We didn’t know what was going to happen in the future, if the financial markets would still be open in October and November or what. So I wanted us to use, as much as possible, the facility that could be available to us to secure our situation. We have 2 bond issues that we made, EUR 4 billion worth in total, in April and July of 2020. We managed to secure our cash in that way. And we, of course, adapted our airport hospitality possibilities in accordance with the situation that was necessary so as to be able to bounce back when the time comes. Now bouncing back will — you’ll see on Slide 9, will be reflected in the fact that in terms of capital expenditure, we’ve done our total reset. The commitments in the Economic Regulation Agreement #3 obliged us to put in more than EUR 1 billion of investment on capital expenditure in 2020 was no longer pertinent, was no longer relevant. So that’s been terminated, that ERA. So it’s now lapsed. So we could prune down our CapEx, EUR 486 million worth, in 2020. That means that we invested “just” — just but it’s a lot — EUR 689 million, EUR 463 million in the regulated environment. So that’s the past, that’s 2020. For the future, we also wrote to the state to say that our commitments to — proposals for ERA #4 were no longer relevant. And that the financial forecast were — had lapsed, were no longer relevant either. Therefore, they were obsolete, so we could no longer continue in that framework. Regarding capital expenditure in Paris and internationally, we’ve got 2 major guidelines. We’re working to, firstly, bring down as much as we can without sacrificing essential investments, which would — if we had postponed them, would have generated additional cost. Three major pieces of investment in Paris, therefore, firstly, the merger of the satellites in Terminal 1 that will make it possible to have boarding areas, that would be of cathedral scope, let’s say. Then the junction, the connection between 2B and 2D — to B and D, it’s a BD — it’s a BD connection, we call it. It will be inaugurated in the spring of this year, the connection between B and D, and we’ll be able to shut down 2AC so as to renovate. And also, in Orly, we have been investing in Terminal 4. So these 3 major projects, we could have postponed them or just stalled them, but that would have generated 20% of an overcost because of all the toing and froing, which we have had to do with the people with whom we had contracts. Internationally speaking, in 2020, we made the acquisition of GMR, of course, a major acquisition for us, in 2 steps — 2 stages. This price was slightly brought down to take account of the COVID pandemic in the second stage. And as of today, we see what GMR has to offer us in terms of resilience for the ADP Group. Also, we pursued the work we were doing to pursue — to acquire the Almaty Airport via TAV Airports. This is a freehold and the closing of that acquisition should take place in the first half of 2021. For the rest of it, we’re very, very selective, highly selective in terms of future developments, including international ones. I’ll give the floor now to Philippe Pascal, who will present the financial results. ——————————————————————————– Philippe Pascal, Aeroports de Paris SA – Member of Executive Committee & Executive Director of Finance, Strategy & Administration [3] ——————————————————————————– Hello, everyone. To present, first of all, the main drivers of the group activity is traffic, and we’ll get back to what the Director just said. You can see on Slide 11, the traffic for each of the group platforms, where all the platforms were very strongly impacted by the pandemic linked to COVID-19, with the group traffic standing at 96.3 PAX, down by 60%, in 2020. Now 3 main families of platforms. You have the Indian platform, where the decrease was 55% to 60%. Second family was Turkey, French and Chile, where the decrease was 65% to 70% compared to 2019. And the third family, Jordan and Georgia. Jordan was down 77%, particularly impacted by a long closure of the airport, and Georgia doubly impacted by the pandemic but also by the embargo of Russian flights. On the next slide, you have a specific focus on traffic in Paris. Parisian traffic was down by 77%, decreased greater than the group — so it’s a relative decrease internationally. In the third slide, the first message is that Paris is holding up well compared to its peers, the European peers, such as London, Amsterdam, Frankfurt and Madrid. The second message is a deformation between the CDG and Orly platforms with a lesser decrease in Orly, down minus 66.1%. Now this factor is justified by the fact that a lot of the domestic traffic and North African traffic held up well and — as well as did overseas traffic, you just have it on the right hand corner. The second thing is the connections rate. Now this is maintained in 2020. It’s even slightly increased with a growth of 23.1%. Now this is a very important factor in terms of international traffic but also for our retail businesses, and we will get back to that. They were very little impacted, in fact, by the decision of the French administration. Concerning the following slide, you can see the various group indicators, starting with the sales. The sales in the group were impacted differentially with a commercial joint venture, impacted notably by the reduction in air traffic, but also by the decision to close retail businesses in France, which also involved retail areas in the airport. There was a long-term close and a slow pickup of traffic, which led to a very strong decrease in sales in the main reserved areas in Jordan. In TAV — in TAV, the situation was more contrasted because the platforms are both touristic but also more general platforms with contrasted results. But there’s a very strong — very specific in TAV, the service companies, notably BTA, TAV OS, Havas, who were significantly impacted in their activity with decreased sales for these 3 service companies of EUR 228 million. Parisian activities have been impacted as have others. But one notable event was that the real estate held up well despite the exoneration we granted — the exemptions we granted to some people. We have succeeded, nonetheless, in stabilizing this particular segment of our activity in the group. About EBITDA. This takes into account all of the savings planned in the group, which resulted in a savings of EUR 800,000, a very significant effort, where almost all of the parts of the group contributed, especially including head office, but also thanks to TAV and the commercial joint venture. AIG had a mechanical decrease in its concession rents of EUR 100 million. The 2 other indicators on Page 14 are the current operating income, shows the rate — the amount of depreciation in certain assets. And immobilizations of — for EUR 71 million, amongst the depreciation and impairment. The one portion of that is not negligible, having to do with studies about the future Terminal 4. And certain studies will not be used in the framework of a new project as such anyway. So these studies had to do with parts of the project which are not variable. About the companies, we practiced some impairment in commercial joint ventures of EUR 41 million for SDA and for ADP for EUR 25 million. About international, the TAV Group — there’s no substantial impairment. It’s a slight depreciation in one of its small concessions. For an important reason is that all of the concessions in Turkey have obtained a 2-year extension in the duration. So we’ve taken this factor into account in these impairments of assets. Two major assets were depreciated, Chile and Jordan, for amounts that we cannot discuss today because negotiations are currently undergoing. About the net result attributable to the group, the depreciation of — the goodwill of — international goodwill. And the level of the rock is — this decrease is temporary given that the negotiations are upcoming. We have also accounted a significant appreciation for the outstanding amounts in the group. The results are down significantly given the gross financial debt linked to the bond issues. On Slide 15, you have the resilience of our commercial model — retail model. The change in passenger retail sales in 2020, which you see here, given average sales figure per passenger, EUR 19.1 per PAX compared to EUR 19.7 in 2019. If you take into account the periods of closure and lockdown in 2020, it is equivalent to 2019. So the fact that retail sales held up well is linked to the strategy of our concentration of the activity and a reduced number of terminals and the best performers commercially from — so this helped us to stabilize, at least in part, by the connecting traffic which is a very important and favorable aspect this year, for which we opened some tests up in the reserved areas, which made it possible for us to improve our activity in the hub in Paris compared to other hubs in Europe, notably. We have obviously a significant protection activities for our team, preserving knowledge and so forth and know-how. This is part of our commercial model, which makes it possible to — and what really this slide (inaudible) is the resilience of our model and our performance financially based on these factors. On Page 16, the group — the initiation of a major savings plan of EUR 668 million, where we are renegotiating our subcontracting contracts. The infrastructure closure strategy to adapt to the traffic. We have a share of closed areas, it’s some 50%. There’s also a savings plan in the salary with partial unemployment, partial layoffs in Paris, run rate roughly 50% but also — and other platforms in the group, in particular, at TAV. And the economic plan, which ultimately sought to make a variable our expenditures and to accompany our sales figures as well as we could. We’ll get back to this in a bit later. We are setting up an indicator and specific guidance in this respect for the upcoming year. The second strategy is that of making our investments more flexible. This is on Page 17. With an important flexibility of our CapEx, this made it possible. And that’s the message we pulled out of the Economic Regulation Agreement. That’s not bad news. It’s rather good news because it makes it possible to adapt our investment management to the crisis by basing the prices on an annual basis instead. So we can change the nature of our investment, we can be more agile, we can think about our future with this. We want to make our terminals adapted to international traffic, for example, the Schengen traffic, or to make the infrastructure more modular so that we can open up not only one terminal and then another but we can do it more modularly, a part of this infrastructure, a part of a terminal so that we can adapt to traffic as changes occur. It can be reviewed on a periodic basis. Page 18. We’re getting back to a figure, which is the impact of the crisis on our international activity. Now this impact is of 2 natures. There’s a negative impact with impairments that I spoke about, with the total impact of EUR 299 million negative. And also an impact positive in nature, as you can see, internationally, there’s a good relay for growth, which has been confirmed, which — so that we had a quicker recovery of traffic than expected. In 2020, it was 60.4% at GMR Airports and in fact it was up by 16 — it would have been 16 — minus 69.8% without GMR Airports. So as you can see, the acquisition of GMR was positive. And to conclude, some good news on Slide 19. You can see that we sought, during the whole period, to preserve our cash position. So — and we also wanted to preserve our financial rating, and we succeeded in doing that since August. We were almost able to stabilize our cash position, whereas we did have traffic equivalent to 35% of 2019. The stabilization of our cash position, we have almost — and that is the fruit of the implementation of the economic plan. The saving — the cost-cutting plan and due to the selection of our investments. So ultimately, the net financial debt at the 31st of — stood at 700 — EUR 7.484 billion. So we confirmed our net debt to EBITDA ratio projected as between 6x and 7x by the end of the year. So much for the financial portion of this presentation. ——————————————————————————– Augustin Pascal Pierre Louis Marie de Romanet de Beaune, Aeroports de Paris SA – President of the Board & CEO [4] ——————————————————————————– Thank you, Philippe. This is Augustin de Romanet. I will now present a few pieces of outlook, let’s say, going forward and some medium-term perspectives as well. Firstly, the airport model. The airports all over the world have been managing since the start of the 1960s on ending growth — on seizing growth. We had 100 million passengers in the world in 1960, 45x more than that in 2000, and it was forecasted we’d have 90x that figure by 2030, 2040. So this growth, all of a sudden, has ground to a halt. It could go on for 4, 5, 6 years, we don’t know. And we will have to move from a growth model, managing growth, to a model followed by will be enhancing the quality of service, enhancing our commitments, our action taken to speed up the energy transition of our airports. Our purpose which has been built into our articles of association is to welcome passengers, operate and imagine airports, in a responsible way and all around the world. Now it’s not that the — because the market isn’t growing overall that we mightn’t grow. If it’s not growing in Europe, we can grow somewhere else. We, along with AENA, are joint leaders globally. And depending on the way which you do the waiting and so on, along with AENA, we are among the 2 biggest airport groups in the world. We’re going to pursue our ambition to become the leader with 4 major strategic orientations. A more integrated group firstly. Adapt our jobs, our methods and our products. A more agile group, so to review our organization, our operating methods and remuneration system, to become more agile. And more efficient group, reviewing the scope of our activities and be more targeted in our investment policy. And be a more sustainable group, emphasize our action in terms of quality of service, innovation and the environment. So we can say that our roadmap is to be green, smart and flexible. That sums it up. The next slide shows you the way in which we envision the adaptation measures taking place. Now the adaptation of our economic and social model. The first way of doing things is to be almost military. No concessions to be made on the reduction of our operating expenses, to be on the par with the expectations of shareholders and clients. And we’ve got to be military rigorous about this. And in that context, we cannot have any people forced to leave the organization. It’s very important for us to organize supportiveness, outreach amongst staff members. We prefer people to stay in the company, be a little bit less well paid but not be obliged to go and find a job elsewhere rather than preserving salaries and wages at all cost and having to make lots of other people redundant. So we have negotiated a collective mutually agreed termination agreement that will open up the possibility of voluntary departure to 1,150 people with the commitment that we will replace all those departures beyond that number. So it would be including 700 unreplaced departures. So this has been quite a successful agreement that’s negotiated. Actually 1,500 people have gone forward as candidates for early retirement or some kind of mobility leave and so on. We’re also additionally going to present to the Economic and Social Council that will be meeting early this year, a plan to adapt our employment contract. We’ll bring down the 13th-month pay. We will freeze another portion of pay. We will reduce the mileage compensation that was provided in the past when people really were subsidized to use their cars. And we’re negotiating arrangements with the trade unions currently on this adaptation of our service agreements. We don’t want to do something unilateral. We hope to reach an agreement. And the idea is to set up arrangements so that we will achieve an amount of savings that should be quite substantial, and being proud at the same time that we won’t be obliging anybody to go home in the evening having to tell his family he has lost his job. So voluntary departures are voluntary, of course. We do foresee the adaptation of the employment contract. So it’s up to people to decide what they want to do individually, of course, in that context. Now you see then on the next slide a summary of the 2 strands of our environmental ambitions, the domestic side of things and the more external one. So objective is zero emissions by 2050 for Paris-Charles de Gaulle, Paris-Orly, Zagreb, Liège, Ankara and Izmir. So we want to green our activities, our airside partners’ activities. We want to see electrified vehicles, natural gas and hydrogen being used, and also on the ground side have more environmentally friendly operations for ground handling, shuttles, taxiing and aircraft parking and so on. And then outside the company, air transportation has got to make its own energy transition as well. And it — maybe do it faster than the car fleet, the fleet of cars out on the road. The airports must be ready, though, if aircraft are to become more environmentally friendly. We’ve got to foster the use of SAF, sustainable aviation fuel, and also be able to accommodate hydrogen-powered aircraft. So the group has become a partner in consortia, and we’re involved in 4 actually, 4 dedicated consortia in that respect, so as to develop sustainable alternative fuel for air transport. And we’re also supporting the introduction of hydrogen-powered aircraft scheduled for 2035 for airport infrastructures. We’re collaborating with Airbus and Air Liquide there. So regarding the trends for 2021 and medium-term guidance, it’s about to come on your screen, I’m sure. You know the tradition we have in our group. Under promise and over deliver. And we want to do that again. So we’re prudent, conservative in our traffic forecast. We’re aware that there’s no such thing as quite far because that will make you optimistic overnight. So we’ve got to be prudent and realistic. When we look at the figures for 2019 and 2020, we had the help, of course, of Turkey and India. We hope to achieve a group traffic figure of 45% to 55% of the 2019 group traffic figure for 2021. Also, we hope to come back into the positive in terms of our operating income between 18% to 23% EBITDA over group revenue ratio by — for 2021. Regarding the CapEx, the annual investment, we’re going to finalize the projects underway. We’re going to do the maintenance and in fact secure regulatory investments, EUR 500 million, EUR 600 million that cost per year, regulated and nonregulated annual investments. Now for 2022, our guidance is to have net financial debt over EBITDA ratio at 6x to 7x of a ratio by the end of 2022. And we think that we return to the traffic level we had in 2019 sometime between 2024 and 2027. We think it would be about 2026 if we do the mathematics — if the simulations are correct. So that concludes the actual presentation of our 2020 results. But the one word that’s important for us going forward is solidarity. Solidarity because the group has been hugely mobilized. Everybody has fed into the process for short-time working, furloughing and so on. We had, at one time, 85% of our people that were on short time or that were furloughed. They were flexible. They helped us to close down the terminals temporarily and so on. So they — everybody was mobilized to bring down our operating expenses. And the people who were on the job and doing their job were mobilized too. They had to put in their best efforts to help us to renegotiate 180 contracts with their suppliers. The procurement people had a very hard job as well. And if you add up what everybody did, between the people who are on short-time working arrangements and those who stayed on the job and helped us to go forward, the end result of that is we came out of it with a positive situation. And as of September, we were not burning cash anymore. So we found we could get off to a head start, again, from that point on as soon as traffic resumes. So Philippe Pascal and my colleagues and myself will be happy to take any questions you may have. ================================================================================ Questions and Answers ——————————————————————————– Operator [1] ——————————————————————————– (Operator Instructions) We have a question from Elodie Rall from JPMorgan. ——————————————————————————– Elodie Rall, JPMorgan Chase & Co, Research Division – Research Analyst [2] ——————————————————————————– I would have three, in fact. Would like in terms of the OpEx that you managed to maintain under control operationally in 2020. Honestly, that was a great performance. The EBITDA was great. We thought it would be negative. However, your guidance in 2021, about the margins in EBITDA between 18% and 23%. These figures imply that the OpEx will be going up. So we took it — the shares into account based on the efforts you made from a salary point of view up to date. But could you give us a couple of words about the expectations you have about the reductions of structural efforts? I’m sorry, the interpreter — the sound is breaking up, the interpreter doesn’t hear. My second question about CapEx. You gave us a guidance, very clear between — for 2022. Mr. Chairman, does this take into account the green CapEx that you were speaking about? And when do you think you’ll be able to negotiate a real contract over 5 years? Will that not be before 2023? You gave us a guidance about 2021, 2022. So how can we project tariffs into 2022? And the last question about retail, very good performance there, again, wonderful, very resilient for PAX — price per PAX really resilient. Do you think it’s possible to continue along the same lines to reach that same level in 2021, above EUR 19 per PAX? ——————————————————————————– Unidentified Company Representative, [3] ——————————————————————————– So we’ll answer the different questions. Elodie, first of all, about the OpEx in 2020. The performance of OpEx in 2020 is due to several factors. Closure of an infrastructure that was significant and there’s a traffic effect. There are certain number of expenditures lowered because of that decrease in traffic between 1/3 and 1/4, so a partial activity or equivalent for international flights. The other savings measures involve a certain number of recurrent expenses for amounts that are sometimes quite significant. So long is there a share of that decrease, non-negligible part of the decrease, is linked to traffic. But in absolute terms, the level of rigidity of our expenditures was decreased significantly. So that’s why we’re trying to say — we’re talking about cash and cash position. With 35% of traffic, we will not be burning cash. That 35% is an average. So perhaps we might have a level of performance which is quite a bit better. So the result in 2020 was satisfactory, which we had communicated on, and we did respect our commitments, obviously. About the guidance for 2021 now. EBITDA over sales. There’s already one important point here, and that is, as you know, you’ve done this exercise many times. There’s a consistency between the traffic forecast that we had set and the guidance that we are offering of EBITDA and EBITDA over sales. That guidance only has one objective, really, and that is a commitment of a — strong commitment to continue the efforts we made in 2020, which consist in adapting the level of our expenditures to the level of our sales. So we’re still continuing on that same logic to avoid burning cash and to accompany the decrease in traffic and the recovery of traffic. And so there’s a perfect consistency which indeed makes it possible for us to commit to preserving that effort for cost cutting. And if you take into account normally, the difference between Paris of 35% to 45% of traffic of 2019 and you translate into — translate that into sales terms, you will see that the EBITDA on the contrary over sales is globally quite ambitious because it requires a minimum amount of continuing the efforts that we did in 2020, to which we’ve added the beginning of a voluntary departure program which will be several tens of millions of euros in cost. So for us, on the contrary, with respect to the perception that you might have, we are really moving towards a stabilization of our efforts and a commitment to not pick up those expenses as fast as we’re picking up traffic. About the second question. We do have an indication of Parisian CapEx levels regulated and unregulated. This is not financial CapEx. This is not international CapEx. I’d rather say that because sometimes there’s some confusion there. Obviously, all Parisian CapEx, regulated or not, are included, including our wish to go towards a greener airport. The fact that we are committing to a greener and smarter and more flexible airport gives some color to this way forward that we have and to our plan. In other words, we will be prioritizing green investments. This being said, green takes time. We are not going to be greening an airport in 2 years. And that step-by-step, this investment program will be developing as a priority and a strategic orientation over the long haul. The question about the regulation agreement. In our presentation, we said that the fact that we didn’t have an agreement was a consequence that we did — because we had no visibility about the future, we wanted to keep control over that, which is good news. Now the question you’re asking is when will there be a new regulatory agreement? The answer is simple. As soon as we have some long-term visibility over 5 years, in other words, in 7 or 8 years because we need 2 years to negotiate the contract. So at this point in time, we have no — we don’t have good enough visibility. We have to maneuver. So we are committed to ’21, ’23 with this plan. If we have 2 years of negotiation, that means that by — after 1 year, 1.5 years, we consider that we don’t have enough visibility, we will not commit to negotiating a new regulatory agreement. All this goes to say that in order to set a date for a new agreement, we’ll talk about it again in a year. About the consequences on tariffs. It’s not because we have no regulatory agreement that we don’t have any economic regulation. This tariff — these tariffs respond to a balance that is examined on an annual basis, for which we partially have some control over because we are regulating our investments and this has to do with the capital employed as well to modulate the pressure by the new authority on the WACC. But the WACC at this point is not very impacting because of the level of profitability of the regulated scope for the moment. About retail and the resilience in 2020, you’ve seen that the objective was notably with respect to most of our brands and luxury brands is the resilience of the model is there. And the commercial structure, the way it’s been set up, the way the offer has been built up, the way the customer is at the heart of the strategy and even in the atmosphere around, including the boarding areas, it works. Obviously, we will try to pursue that strategy to ensure our resilience in this respect as equivalent as possible. Let’s hope that it will be better in the upcoming years. However, there’s one point to be cautious about, which is not — there are some marching effects. At a given point in time, traffic will be coming back. Sometimes it’ll come back suddenly, and we’ll have to reopen. It is certain that very quickly, we can develop the synergy of our infrastructures to that purpose at — and this may have an effect on the commercial structure which is not necessarily optimal, and that’s why we are seeking with this flexible strategy of our infrastructure to reopen as intelligently as possible to optimize our — the commercial performance. That’s what explains what I was indicating earlier, i.e., we want to convert boarding areas into international zones and so forth. So yes, that is the objective — the objective, the resilience of retail including in the boarding areas. ——————————————————————————– Operator [4] ——————————————————————————– Next question is from Line 2, Madam Virginie Rousseau from ODDO. ——————————————————————————– Virginie Rousseau, ODDO BHF Corporate & Markets, Research Division – Analyst [5] ——————————————————————————– A few questions. The first has to do with the restructuring costs and cash in 2021. You had provisions of EUR 205 million in 2020. So could you consider that you’ll have similar thing in 2021? The second question is about the international aspect. I understand that you’re continuing negotiation with your partners (inaudible) or banks for a certain number of your holdings. Could you go over the state of negotiations in the various countries and what the calendar would be that you’re expecting? ——————————————————————————– Unidentified Company Representative, [6] ——————————————————————————– About the first question. Indeed, we entered a provision — a significant provision that you will see, for which — with a provision that has been fine-tuned — very strongly fine-tuned. It’s very precise because we passed the provision at the time we’re right in the ongoing period of voluntary departures. As the CEO said, with a very strong — we had 1,150 departures in the few — next few months. And in September, we will have nonreplaced departures that are structural. And I taking advantages to add to the question about OpEx, we would be expecting 700 departures that would not be replaced structurally. So the provision is counting on recovery, and it will be paid out gradually over 5 years. Why 5 years? And our restructuring plan, we have people that are going to be retiring. We have people that will be leaving for professional reasons and you have accompaniment at end of career. And these are long accompanying periods for people between 58 and 62 years old because that’s the year at which they retire. So gradually, the cash will be paid out and that provision will be debited and reviewed. About the international aspects. We have 2 major negotiations ongoing and several smaller ones. There’s one that’s over, it’s finished. That is the one having to do with the renewal of concessions in Turkey, for which TAV succeeded in obtaining, as the other Turkish airports have, they obtained a concession — an extension — a 2-year extension with regulation of the concession fees, which for — in 2022, that has been carried over, with a positive effect, including in upcoming years. So I’d like to say as well the TAV received yesterday. The second portion of the indemnities compensating the early closure of the Atatürk Airport. So the Turkish government respected their commitments. So much for TAV. There are some smaller issues that are under negotiating with TAV, but they’re going in the right direction, notably in Tunisia. And TAV have also obtained the commitment of having the concession in Saudi Arabia. There are other negotiations which are ahead of us. In Jordan, for example, for which we won’t go into — in detail today because it’s ongoing. But the Jordan concession isn’t great difficulty given that we’ve taken into account in the impairment that we passed through, and for which we have had active exchanges ongoing with the Jordan government, which could hopefully conclude in the upcoming months. About the second concession where we have important negotiation is in Chile in connection with our partners, which is VINCI Airports. We are right at the beginning of that discussion, often they can be a bit rough with the Chilean government, but the exercise usually has a positive outcome as was the case in the previous negotiations we had with them in previous years. So much for the main drivers having to do with concession issues abrupt. As to the rest, it’s less substantial. ——————————————————————————– Operator [7] ——————————————————————————– The next question comes from the line of Cristian Nedelcu, calling from UBS. ——————————————————————————– Cristian Nedelcu, UBS Investment Bank, Research Division – Associate Director and Aerospace & Defense Analyst [8] ——————————————————————————– Three, if I may. The first question, if I understood well your statement earlier that you’re targeting neutral cash or no cash burn at 35% of traffic. Could you help us reconcile that with your guidance on EBITDA, CapEx, the interest cash, cash outflows because I’m getting sort of cash burn in 2021? So maybe I’m missing some other building blocks there. The second one is on net debt in December 2021. Again, can you give us a bit of — you have the Almaty transaction still to be done. Can you give us a bit of color on where you expect net debt at the end of 2021? And the last one on the OpEx 2021 bridge, maybe coming back to this question, you told us about the EUR 30 million benefit from the restructuring from the layoffs. But could you give us a bit more color on other building blocks in terms of terminal closure, in terms of other cost cutting measures? Or can you help us better visualize how the OpEx moves in 2021 versus 2020? ——————————————————————————– Unidentified Company Representative, [9] ——————————————————————————– The first question on cash and cash burn in 2021. Now indeed, we have a cash position that is pretty high, EUR 3.5 billion or so at group level, EUR 2.6 billion in the parent company at the end of December 2020. Now we expect to burn a little bit of that cash, especially insofar as we have a bond redemption, EUR 400 million worth, for ADP SA during 2021. Also there is a probable closing of the Almaty transaction by TAV Airports that will lead us to have an acquisition cost out but — cash out, but also some CapEx will be required in Almaty. So there will be cash out there and CapEx if the transaction goes through. And also, there are some small deadlines in the offering so that we expect a drop in our cash position first, remaining really very comfortable throughout 2021, cash-wise, with cash position that will remain unless there’s some major crisis, that will remain at a very high level, our cash position, therefore. The second question you asked. We haven’t got any interim report to give you regarding your second question. We have given you our guidance, EBITDA at the end of 2022, the ratio at the end of 2022. But we don’t yet see our way forward clearly enough to quote a figure that we could commit to, a precise one, for 2021. But we have the means to support our financial itinerary so to manage the situation as we go forward. Now the net debt over EBITDA ratio will be higher than 7x. That’s the objective for 2022 — in 2022, higher than 7x. We will hopefully have bridged a lot of the gap that exists between the current situation at the end of 2020 and what will happen in 2022. So the effect of the restructuring plan and the employee ramifications. There are 2 main categories of measure, the nonreplacement of departures, 700 unreplaced departures, structural move that is, at the full year, it would be about EUR 60 million worth. In 2021, it’s about EUR 30 million worth of savings, firstly. Secondly, in 2021, technically, we will have short-time working that will be running at a lower ebb than in 2020, but it will still be there. So we’ve got to take account of that in terms of the one-shot savings that will be made in 2021. Also thirdly, here on the payroll, we have the plan to renegotiate the structure of remuneration, comprising 2 kinds of measure. The first one — kind of measure is to do with savings to support people in the 2, 3 or 4 years of crisis ahead of us with lesser traffic so as to do our best by people. And the other measures, as I said, are more fundamental ones to do with the structure of the remuneration. So to re-base it on something that would be still very positive, a positive dynamic, but at a lower level, so to be in line with our future traffic levels. And as you know, the traffic has fallen off. So closure of infrastructures, payroll measures. We haven’t given you any more precise details because we’ve got to flex things up and things change the whole time. The situation around us is changing all time, but they are part of our facilities that won’t open until April to June 2022, that we know. So that means adaptation of our infrastructure. And when we reopen, we’ll have — had to overhaul them. For example, reopen boarding lounges, but not the public area so as to, once again, flank the restructuring plan. The whole time, we’re making savings in terms of our consumables and operating expenses, our lifestyle kind of expenses as a company that we keep on revisiting, reviewing the whole time so as to prune them down and bring ourselves into line with the current situation. That hopefully will give you some details that you were looking for regarding the savings. ——————————————————————————– Operator [10] ——————————————————————————– The next question comes from the line of Siobhan Lynch, calling from Deutsche Bank. ——————————————————————————– Siobhan Lynch, Deutsche Bank AG, Research Division – Research Analyst [11] ——————————————————————————– Three for me, if possible. The first one, thinking beyond 2021, and I guess aside from the structural cost savings and stuff that you just spoke about, how do you expect costs to evolve as we get back to 2019 levels of traffic? I guess, do you think ADP could be a more efficient business in the medium term? And could we see margins higher than pre-crisis levels once traffic has normalized? My second question, how should we think about the prospects of ADP paying a dividend? What kinds of things would have to be achieved on earnings and debt levels for you to reintroduce the dividend? Or is it just a matter of once back to profitability at the bottom line back to 60% of net result? And then finally, if I could just ask on the statement from a few days ago on the ecological development proposal in place at T4. Does a new terminal fit with the government’s demands on environmental focus, and I guess, ADP being a greener airport operator? Clearly, a new terminal could be delayed, as you said, to 2034 because of COVID. But if you were to propose a new terminal, could it actually be supported by the government? Or is large growth like this no longer going to be possible? If you’re trying to align with carbon emissions targets, I guess, ultimately, can a new airport be considered — a new airport terminal be considered a green investment? ——————————————————————————– Augustin Pascal Pierre Louis Marie de Romanet de Beaune, Aeroports de Paris SA – President of the Board & CEO [12] ——————————————————————————– Thank you for these questions. I will take the first one. This is Augustin de Romanet, and I’ll leave my colleague answer you for the other questions. Now firstly, on the operating expenses. Of course, we wish to gradually flank the return of traffic by 2027, as we heard a minute ago, we have to support this trend and be there when traffic comes back, but at the right time. So the idea is to do long-term development projects, too. But that requires us to have some kind of dynamic in our OpEx that won’t be as strong as in the previous period because the dynamic of the traffic levels, even if we get back to 2019 levels, it won’t be a stronger dynamic as we had before. So that we know. So our wish is that when we enter into a new ERA, that we would guarantee sufficient profitability that would be decent for the regulated scope so that all of the parties in the ERA will find they’re being well served. So in our strategy, we’ve re-based downwards our OpEx structure. ——————————————————————————– Philippe Pascal, Aeroports de Paris SA – Member of Executive Committee & Executive Director of Finance, Strategy & Administration [13] ——————————————————————————– Now you asked a rather precise question on the dividend and so on, but we don’t have such details. We run models. We’re talking about the health crisis. We’re talking about traffic crisis. We’re talking about people issues. And that’s what I can (inaudible) answer to that particular question. Now the dividend to — return to dividend payout. There are a couple of principles. In the current period, when substantial efforts are required of employees, the company decided not to pay out a dividend in 2020 for 2019 — financial year 2019, apart from the initial installment, of course, that was already paid. And it’s probably — it won’t be done in respect of 2020 results or 2021 results, that would be in 2022. So the fact is that there is no reason why — as of 2023 for the 2022 financial results. Therefore, there is no reason why we might go back to a 60% payout ratio, which I think could legitimately be expected by our shareholders at that point in time. That’s on the dividend. I’ll leave Edward Arkwright answer your question on the new Charles de Gaulle terminal. ——————————————————————————– Edward Rodolphe Paul Arkwright, Aeroports de Paris SA – Deputy CEO of Development, Engineering & Transformation and Member of Executive Committee [14] ——————————————————————————– Thank you for your question. The decision was made — is about the Terminal 4 to finish that project. So that project is finished. There was some impairment of assets, as was indicated in the documents — in the annual results. And we should be able to work on to — move on to another project. It’s going to take time. It’s going to take a lot of time. So you don’t need to have a short-term model of significant CapEx effects. No, the next 2 or 3 years, we’re going to have to give up on studies. We’re going to have to take a break. An agreement with the airlines and local neighboring associations, with staff and with the government because that’s another question. What are the objectives? They were set very clearly by the government’s communication and they actually agree with the company’s objectives that the Director just went over in his presentation. The objective is to reconcile 2 requirements that are equivalent. The first is the objectives — the ambitious objectives of reducing greenhouse gas emissions and becoming carbon neutral by 2030, for carbon neutrality. And by 2050, for net carbon neutrality. These objectives, environmental objectives, need to be reconciled with other objectives set by the government, not only by ADP. The development of traffic in Paris other than domestic traffic, preservation of connectivity to France, the reinforcement of the Parisian hub. These words are in the official communication by the French government. And that’s good because it’s our objective. So it is for that reason we need to start that project again from 0 and take time to look at it to see how we’re going to handle all the projects to reach those objectives, how we’re going to welcome low-carbon planes. Low-carbon planes, they have fuels that will be decarbonated? Or will it be because they’re hydrogen. We have to know that. Improve terminal performance in terms of energy and intermodality with the railway system. As you know, we have a significant intermodal area which actually handles 10% of traffic from Charles de Gaulle. They could take advantage after 2025 of the arrival of CDG Express, reinforcing the high-speed trains, the TGV, and so forth. Sorry, it was a bit long, but it’s a project we’re starting from the scratch, a very long-term project, and these specifications are clear. There’s no CapEx implication whatsoever in short term, and we would have a look at that when the time comes, and that would be translated into the regulatory agreement as Philippe was indicating earlier about the new regulatory agreement. ——————————————————————————– Operator [15] ——————————————————————————– Nicolas Mora, Morgan Stanley. ——————————————————————————– Nicolas J. Mora, Morgan Stanley, Research Division – Equity Analyst [16] ——————————————————————————– Some follow-ups. Just to clarify, the cash impact and restructuring measures on staff. You talked about an impact over a 5- year period. Could you confirm the order of magnitude of that cash envelope for those 5 years? That’s the first thing. Second thing about cost. When we listen to you and we put into parallel the guidance about traffic, short and middle term, and the status of ADP which has turned towards CapEx and growth, it’s a bit more environmentally friendly. Did you do enough to recalibrate the cost basis in terms of staff? Unfortunately, because I think the net decrease by 1/2, it will impact both traffic and the change in business model. And the last point about regulation and the tariffs. I understand that you’ve moved on to a system with an annual rhythm in the decision-making process. But this may be depressed for 2021, 2022, if you have a traffic recovery curve with an effort on the cost. In paper, you’re going to be overperforming in ’23, ’24. It’s not a risk for you without having a multi-annual agreement to suffer from big tariff increases — decreases in tariffs between now and 2023? ——————————————————————————– Unidentified Company Representative, [17] ——————————————————————————– Thank you, Nicolas. About the first question, I can give you an order of magnitude as such. In cash outlay, over 5 years, obviously, be careful because it’s gradual over those 5 years. It’s on the order of EUR 200 million to EUR 300 million, a bit more than half with a vision that is a gradual decrease, it’s EUR 20 million in the first and then less than EUR 30 million later. That is the first point. The second point is the staff have to be careful. We said 1,150 people would be leaving from the company out of 6,400. At the same time, there’s an infrastructure to be managed. We know that we can, without difficulty — without major difficulty, we can work with 700 people less after reorganization of the group as a whole. Reorganization that would have to be handled in 2021 so that we can sanctuarize those 700 departures and not to replace them over time. About the 450 other departures between 1 million — 1,150 and the 700, the 450 departures will be provided — done gradually so that we will have a functional savings — temporary savings. But which — it does accompany the recovery of traffic. It takes that into account. That’s an important point. Now, can we go further? The question that is raised is will we get back through a model, an airport model, with significant developments or an airport model to accompany moderate growth which does not require to mobilize as much as many staff in the preparation for the future? At this point in time, what we decided to do is the airport development will start-up again. And what Edward said about Terminal 4 is testimony to that. It will start-up again with greener airports. And better — that fit better into their regional area. But perhaps not quite as dynamically, but dynamically nonetheless compared to a certain number of activities outside. Now about regulation, the response to your question is what level of WACC — regulated WACC will the transfer regulation authorities target? If the level is very low, we’re going to reach a ceiling very quickly. It would be — if it’s reasonable, we will — sealing off, if possible, at the time we’re starting negotiation in the next regulatory agreement or at the beginning of the regulatory agreement such that we can properly accompany, ultimately, this dynamic change in tariffs with a positive effect. Be that as it may, what’s important for us today is certainly to restore our profitability in the regulated context, but also to get back to profitability, nonregulated, at least as good as the previous period. And that’s why, by the way, as you noted, we have a specific focus on retail activity in our strategy, even on the infrastructure of that. Sorry, it’s kind of frustrating the answer I’ve given to you in the last 2 responses. But on the first one, I was pretty generous, I think, in the information that I gave out. ——————————————————————————– Nicolas J. Mora, Morgan Stanley, Research Division – Equity Analyst [18] ——————————————————————————– Just one last point about real estate. The performance in 2020, it’s hard to understand. You wrote off provisions that you had provided for in the first half year? Or is the EBITDA really strong? I’m trying to understand what the dynamics are coming from. And if you were so much in real estate as you were in retail in the negotiating phase with your customers to reduce the rental income with respect to the difficulties that are persisting in real estate or retail, in the broader sense of the term, for retailers and concession holders? ——————————————————————————– Unidentified Company Representative, [19] ——————————————————————————– We wrote off some provisions in the second half year for segment, real estate. The second point is the performance is good to the extent where we have an activity that was dynamic in cargo and the whole small package and small parcel and postal activity, which leaves us — that was a significant investment. But also, to have load factors of our hangers, which is pretty high. So if in segments other than industrial and hanger activities, in other words hotels and office space, we have some problems having to do with the traffic, but they were not substantial. You have to bear in mind that we have secured our leases in negotiations with our customers such that we can’t — we did agree to some one-off discounts, but this is what most people in real estate are doing these days. They do that in exchange for obtaining a prolonged — a significant prolongation in the lease duration. In other words, the average duration — length of our leases is quite long. So it really helps us to absorb the shock in the real estate sector, which is held up well for us based on everything — the questions that you raised. ——————————————————————————– Nicolas J. Mora, Morgan Stanley, Research Division – Equity Analyst [20] ——————————————————————————– And about the retail side, you have an unusual model of (inaudible) and joint ventures with partners. Are you going to be staying with that system? Are you going to just stay with the concession fees which are 32%, 33%? ——————————————————————————– Unidentified Company Representative, [21] ——————————————————————————– Our strategy was to comfort our quotation fee. We negotiated — we didn’t negotiate any rate with any brand as such. We accompanied the closure and the reopening of structures. On a one-off basis, we gave them a break on the — but we did negotiate the concession fees. So long as the dynamics, as such, did not seem to be broken, and we actually were proven that by the results. So that’s the strategy that made it possible to avoid falling into renegotiating at a lower price. Another important question. What — there’s been a lot of work on strategies having to do with our retailers. ——————————————————————————– Operator [22] ——————————————————————————– The next question comes from the line of Arthur Truslove, calling from Crédit Suisse. ——————————————————————————– Arthur David Truslove, Crédit Suisse AG, Research Division – Research Analyst [23] ——————————————————————————– So 3 if I may. So just sort of following on from a couple of questions that have already been answered really. In terms of when you’re expecting a new Economic Regulation Agreement. From memory, at the second quarter results, you talked about potentially 2023 or 2024 as the introduction of a new one. But per your comments today, am I right to assume that, that’s been pushed back somewhat? Second question, you’ve obviously talked about your plan to change workers’ remuneration. Would you be able to just remind me what do you have to — what do you need from the trade unions in order to get this done? And then, I guess, final question just on the real estate. How — what sort of proportion of your rental agreements come up for renewal in 2021? And are you able to give us any idea as to what verticals those might be in, so whether potentially the likes of hotels, which may be struggling, for example? ——————————————————————————– Unidentified Company Representative, [24] ——————————————————————————– Thank you for these questions. Firstly, on the ERA, is it 2023, 2024 or what? Well, I’d say really, in a year’s time, we’ll have more visibility on that to give you a date. It goes on for 5 years, but it takes 2 years to negotiate it. So perhaps in a year, hence, we’ll have more visibility. Would it be before 2023, of course, probably 2024, but perhaps not even then. We want to remain flexible and agile, and we have certain capital expenditure that naturally will have to be postponed, just because we won’t need substantial capacity that we thought we’d need until at least 2027 or 2030 or even 2032. If we get back to the traffic level we had in 2019 in 2027, we forecast that we had spare capacity before the crisis of 3 to 5 years worth after 2020, that would be 2023, 2025. So we won’t need a huge amount of capacity until at least 2030 or 2032. We probably need large capacity that would require the construction of a major infrastructure base called Terminal 4 or something else. And mechanically then it wouldn’t be until about 2034. Regarding the plans to adapt service agreements, employment contract and modify the remuneration structure, now these measures can be taken unilaterally. The negotiations are underway with the trade union organizations concerning just the flanking measures, the support measures. In terms of mobility transfer possibilities, geographically speaking and so on, departures, but not the actual content, the substance of the measures to do with remuneration. So the savings are not subject to the outcome of talks with the trade unions. On real estate, I won’t go into the different segments and their behavior, but we have long-term leases that, in the main, are secured. But for real estate, there may be departures, there may be people who want to opt out. But for the hotel infrastructure, they represent less than 10% of our rental income. Very fewer the subject of direct investment. There are only 2, I think, from memory, maybe 3 shortly, but the hotels don’t weigh substantially for us. That hopefully answers your 3 questions. ——————————————————————————– Operator [25] ——————————————————————————– The next question comes from the line of Dario Maglione, calling from Exane. ——————————————————————————– Dario Maglione, Exane BNP Paribas, Research Division – Research Analyst [26] ——————————————————————————– Three questions for me. One on OpEx, which decreased EUR 1 billion in 2020 and 2019. You mentioned EUR 668 million coming from cost-cut measures. Just to clarify, how much of these reductions was linked to traffic, if any? Second question on retail. Sales pre-tax remains quite good in 2020. And remained good despite the lack of Chinese passengers, who tend to spend a lot. Why do you think it remained like these? And what should we expect in the next few years? Third question on traffic. Can you provide us the traffic split by segment for 2020 between business, Germany and France, and leisure? ——————————————————————————– Unidentified Company Representative, [27] ——————————————————————————– The effects of the flow of passengers and airplanes is about less than 1/3. The indirect effect, that’s the rebounding of the infrastructure and the optimization of our staff and so on, that’s about 1/2 and the other savings are structural operating savings. That’s how it breaks down. ——————————————————————————– Operator [28] ——————————————————————————– Perhaps you could take another question? The next question is from (inaudible). ——————————————————————————– Unidentified Analyst, [29] ——————————————————————————– Would you give us more details about the trend per quarter per year? ——————————————————————————– Operator [30] ——————————————————————————– Sorry, we didn’t hear the first part of the gentlemen’s question. ——————————————————————————– Unidentified Analyst, [31] ——————————————————————————– Could you recall the CapEx that you’ve had in the last couple of years and also we’ve seen that the departure plan will generate EUR 60 million of savings from 2022 onwards. But what about the changes in the employment contracts? What savings will come in from that? ——————————————————————————– Unidentified Company Representative, [32] ——————————————————————————– Regarding the traffic, traffic is expected to be at a very low ebb until the end of March or so. You’ve seen that in the press releases we issued in January. We think it should recover a bit in March and more substantially so in June. And from June to December, it should remain flat. Perhaps go up a bit in the summertime, but not hugely. The usual drop in traffic in September. In the last time — around last September, of course, actually, we didn’t see because people were able to travel more easily than they had been during the main summer months. Now the drop connected with the current third wave isn’t absolutely substantial. What’s most substantial is the drop in the dynamic in the summertime because of the extension of the duration of the restrictions on travel. On the guidance on CapEx, CapEx, well, about 1/3 connected with regulatory requirements and maintenance. Another 1/3 or so, a bit more, less than half because of the finalization of important infrastructure work like the T1 junction, the BD connection and other projects that we want to finalize — important projects for us that we want to finalize. And then CapEx for improvement enhancement, small piece of CapEx that help us to improve the passenger experience gradually, especially as the terminals are closed. It’s sometimes easier to do this kind of quality improvement when there are no passengers around, but not substantial amounts. On the structural savings, I gave you what — connected with the departures, but the drop in pay and remuneration and the change in employment contracts, I cannot talk about because the process is still underway. That hopefully answers your questions. Are there any other questions? ——————————————————————————– Operator [33] ——————————————————————————– Thank you. This is the operator. We don’t have any other questions in the line and in the queue. Thank you, everybody, for giving us your time. [Statements in English on this transcript were spoken by an interpreter present on the live call.]
