Results of operations, net assets, and financial position

Results of operations

Profit after tax collapsed due to the pandemic

In the 2020 fiscal year, Munich Airport’s profit after tax (EAT) decreased by T€ 499,248 to T€ -321,401. The developments are explained in detail below.

Results of operations

 

 

 

 

 

 

Change

T€

 

2020

 

2019

 

Absolute

 

Relative in %

Revenue

 

579,672

 

1,567,967

 

-988,295

 

-63.0

Other income

 

44,543

 

43,165

 

1,378

 

3.2

Total revenue

 

624,215

 

1,611,132

 

-986,917

 

-61.3

Cost of materials

 

-232,577

 

-413,210

 

180,633

 

-43.7

Personnel expenses

 

-408,606

 

-537,239

 

128,633

 

-23.9

Other expenses

 

-144,870

 

-106,369

 

-38,501

 

36.2

EBITDA

 

-161,838

 

554,314

 

-716,152

 

>100,0

Depreciation and amortization

 

-242,016

 

-208,835

 

-33,181

 

15.9

EBIT

 

-403,854

 

345,479

 

-749,333

 

>100,0

Financial result1

 

-29,566

 

-88,657

 

59,091

 

-66.7

EBT

 

-433,420

 

256,822

 

-690,242

 

>100,0

Income taxes

 

112,019

 

-78,975

 

190,994

 

>100.0

EAT

 

-321,401

 

177,847

 

-499,248

 

>100,0

1

This also includes income from companies valued using the equity method.

After years of steady growth, air traffic at Munich Airport came to a complete standstill from March 2020 due to the various lockdowns combined with additional worldwide travel restrictions. For this reason, revenue from airport charges decreased significantly from T€ 655,189 to T€ 164,782 (-74.8 percent).

Revenue from handling operations also decreased by a total of T€ 116,865 (-63.9 percent), primarily in the area of ground handling services. All airlines repeatedly adjusted their flight offers at short notice to the lockdowns and the corresponding travel restrictions.

Revenue in the other divisions developed as follows.

Breakdown of revenue of other areas

T€

Breakdown of revenue of other areas (bar chart (horizontal))

The decline in rental and leasing income is primarily due to the rent reductions in the retail and catering sectors.

Other revenues include global management, consulting and training services for the aviation industry amounting to T€ 20,247 (2019: T€ 14,295).

The cost-cutting measures introduced in the Group resulted in a reduction in the cost of materials (-T€ 180,633). In particular, purchased services (-T€ 76,932) and cost of sales (-T€ 85,779) decreased significantly.

Personnel expenses at Munich Airport fell by a total of 23.9 percent to T€ 408,606, in particular due to the short-time work benefits introduced in April 2020 and the substantial reduction in remaining vacation and flexitime credits. The average number of employees decreased from 9,678 in the previous year to 9,384.

Adjusted for expenses to cover provisions in connection with the «Restart» change program (T€ 76,868), other expenses decreased by a total of 36.1 percent (-T€ 38,367) as a result of drastic cost-cutting measures.

Depreciation and amortization (T€ 242,016; 2019: T€ 208,835) includes impairment losses on assets of T€ 42,495 (2019: T€ 6,126). With an amount of T€ 24,663, these primarily relate to planning services performed for the third runway in the 2020 fiscal year, which must still be performed due to an expected further postponement in connection with the Corona pandemic. Overall, depreciation and amortization decreased slightly by T€ 3,188 or 1.6 percent.

The financial result (including the result from companies assessed at equity) improved by T€ 59,091 to T€ -29,566. This was mainly due to the non-cash positive effects from the revaluation of financial liabilities from interests in partnerships in other financial results.

Tax expenses include actual tax income of T€ 704 (2019: tax expenses of T€ 85,258) and deferred tax income of T€ 111,315 (2019: T€ 6,283). The high level of deferred tax income is mainly due to the recognition of tax losses carried forward, since the Group companies expect to generate positive earnings again in the coming years.

Net assets and financial position

Assets – Munich Airport secures its liquidity

Financial position

 

 

 

 

 

 

Change

T€

 

Dec. 31, 2020

 

Dec. 31, 2019

 

Absolute

 

Relative in %

Non-current assets

 

5,315,139

 

5,151,911

 

163,228

 

3.2

Current assets1

 

213,451

 

390,112

 

-176,661

 

-45.3

thereof cash and cash equivalents

 

9,717

 

39,576

 

-29,859

 

-75.4

Assets

 

5,528,590

 

5,542,023

 

-13,433

 

-0.2

Equity

 

2,064,962

 

2,378,139

 

-313,177

 

-13.2

Other non-current liabilities2

 

2,530,126

 

2,072,660

 

457,466

 

22.1

Other current liabilities2

 

933,502

 

1,091,224

 

-157,722

 

-14.5

Liabilities

 

5,528,590

 

5,542,023

 

-13,433

 

-0.2

1

Including assets classified as held for sale

2

Including financial liabilities resulting from partnerships

The increase in non-current assets (+T€ 163,228) at T€ 168,431 primarily affected property, plant, and equipment for own use. As a result of construction projects that continued, advance payments made and assets under construction increased by a total of T€ 147,693 to T€ 635,845.

In the 2020 fiscal year, Munich Airport’s liquidity reserves decreased from T€ 168,767 to T€ 67,985 as a result of the crisis. The balance at the end of the year resulted from the raising of new funds to secure liquidity, which are included in the short-term assets. In addition, current receivables (-T€ 33,626) decreased to T€ 60,603 and cash and cash equivalents (-T€ 29,859) decreased to T€ 9,717.

The change in equity to T€ 2,064,962 is mainly due to the consolidated net loss for the current financial year of T€ 321,401.

The increase in non-current debt to T€ 2,530,126 is mainly due to the borrowing of funds totaling T€ 480,000 to secure liquidity.

Current liabilities include repayments of loans due in the 2021 fiscal year. The total balance at the reporting date was T€ 212,751 (previous year: T€ 303,292). In addition, liabilities decreased by T€ 40,023 to T€ 111,597.

Capital structure – borrowing to secure liquidity

Capital structure

 

 

 

 

 

 

Change

T€

 

Dec. 31, 2020

 

Dec. 31, 2019

 

Absolute

 

Relative in %

Subscribed capital

 

306,776

 

306,776

 

0

 

0.0

Reserves

 

133,651

 

147,490

 

-13,839

 

-9.4

Other equity

 

1,624,515

 

1,923,854

 

-299,339

 

-15.6

of which annual profit/loss

 

-321,401

 

177,847

 

-499,248

 

>100,0

Non-controlling interests

 

20

 

19

 

1

 

5.3

of which annual profit/loss

 

1

 

5

 

-4

 

-80.0

Equity

 

2,064,962

 

2,378,139

 

-313,177

 

-13.2

 

 

 

 

 

 

 

 

 

Financial liabilities from interests in partnerships

 

334,619

 

354,047

 

-19,428

 

-5.5

 

 

 

 

 

 

 

 

 

Shareholder loans

 

502,327

 

491,913

 

10,414

 

2.1

 

 

 

 

 

 

 

 

 

Fixed-rate loans

 

1,220,872

 

722,576

 

498,296

 

69.0

Floating-rate loans

 

603,417

 

683,616

 

-80,199

 

-11.7

Loans

 

1,824,289

 

1,406,192

 

418,097

 

29.7

 

 

 

 

 

 

 

 

 

Derivatives

 

16,341

 

28,918

 

-12,577

 

-43.5

 

 

 

 

 

 

 

 

 

Other liabilities

 

786,052

 

882,814

 

-96,762

 

-11.0

 

 

 

 

 

 

 

 

 

Financial liabilities

 

3,463,628

 

3,163,884

 

299,744

 

9.5

 

 

 

 

 

 

 

 

 

Equity ratio

 

37.4 %

 

42.9 %

 

 

 

 

The equity ratio has deteriorated mainly due to the results of the financial year and the borrowing of funds to secure liquidity.

The main terms of Munich Airport’s current and non-current financial liabilities can be found in the table below.

Non-current loans conditions

 

 

 

 

 

 

 

 

Interest rate in %

Method of funding

 

Currency

 

Interest rate

 

Residual debt
in T€

 

from

 

to

Financial liabilities from interests in partnerships

 

EUR

 

Earnings-based

 

334,619

 

 

Shareholder loans

 

EUR

 

Variable/
Earnings-based

 

491,913

 

Base rate plus margin

Loans

 

EUR

 

Floating-rate

 

605,992

 

3M and 6M EURIBOR
plus margin

Loans

 

EUR

 

Fixed-rate

 

1,224,317

 

0.16

 

3.46

(As at December 31, 2020)

The shareholder loans are available indefinitely and interest is charged on the basis of the base rate plus a margin, if the results and anticipated economic development allow this.

The loans bear usual non-financial covenants, including negative pledges and pari passu clauses. In addition, there are other general conventional agreements concerning repayment in the event of changes in shareholder structure. No financial covenants have been agreed.

Munich Airport uses interest rate payer swaps and forward exchange transactions to hedge against risks arising from interest rate and exchange rate fluctuations. Interest rate hedges are accounted for as a valuation unit.

Hedging transaction conditions

 

 

 

 

 

 

Fixed rate
in %

 

Forward rate
in EUR/USD

 

 

Hedge transactions

 

Notional amount

 

Currency

 

from

 

to

 

from

 

to

 

Underlying transactions

Interest payer swaps

 

491,000

 

T€

 

0.52

 

2.38

 

 

 

Syndicated loans

Forward exchange transactions1

 

608

 

T€

 

 

 

1.15

 

1.15

 

Expected transactions

1

These hedges are not recognized.

Liquidity

Due to the significant decline in the development of traffic throughout the Group in the 2020 fiscal year, there was a cash outflow from operating activities (previous year: cash inflow of T€ 429,074).

The cash outflow from investing activities resulted primarily from investments in construction projects. The cash inflow from financing activities increased by T€ 501,899 over the previous year to T€ 372,862 (previous year: cash outflow of T€ 129,037), in particular due to the raising of long-term financial debt to secure liquidity.

Cash flow statement

T€

Cash flow statement (line chart)

Investments

In fiscal year 2020, investments in property, plant, and equipment for own use at Munich Airport was T€ 387,809 in total. This was offset by planned depreciation and amortization in the amount of T€ 189,538.

These investments primarily comprise costs for construction projects, which were not yet completed in fiscal year 2020. These included investments in connection with the development of AirSite West, including the «LabCampus» project, the expansion and modernization of Terminal 1, and the expansion of the rail tunnel for the Erding ring road.

In addition, construction projects such as infrastructure improvement in the eastern sector, the logistics center and the West 0 traffic junction were completed and put into operation.

Further explanations on this are included in the section Key events in the past fiscal year.

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