Flughafen Zürich : Analyst's Presentation FY2020

Financial Year Results 2020

Presentation to Investors & Analysts

Stephan Widrig, Chief Executive Officer

Lukas Brosi, Chief Financial Officer

March 2021

Content

Traffic Development ZRH

Significant drop due to COVID-19

Milestones

Milestones

Full Year 2020

•	Bonds: Raised a total of three bonds of CHF 900m in 2020 at very favorable conditions (Ø 0.34%)
Treasury	•	Credit facility: Increased to CHF 300m, which will be largely undrawn by the end of this month
•	Liquidity: Consolidated liquidity at the end of December at ~CHF 550m, excluding credit facilities
•	Duration: Extended with flexible mechanism, depending on cumulated return of regulated business
Airport Charges	•	Start: Adjusted charges will come into effect on April 1, 2021 (incl. temporary 10% ramp-up discount)
•	Regulated return: New regulatory WACCs of 5.0% starting in 2021 (5.9% for 2016-2020)
Commercial	•	Minimum Annual Guarantees (MAG): Waiving of MAG during government-imposed lockdowns
Activities	•	MAG concessions: Negotiations with all retail, tax & duty free and F&B partners for 2020 concluded
•	The Circle: Revenue contribution started in 2020; pre-letting around 85%; public opening was
Real Estate	in November
•	Priora assets: CHF ~20m contribution in FY2020 to facility management revenues according to plan
•	Brazil: Faster recovery due to mostly domestic traffic, financial re-equilibrium granted by government
International	•	India: Concession agreement signed on October 7, 2020 for Noida International Airport; state support
agreement signed on March 1, 2021; project progressing according to expectations

Financial Summary

Full Year 2020

* Cash view

Aviation

Aviation Business

Heavily impacted by COVID-19

The outbreak of the pandemic depicted unprecedented times in Zurich. Traffic came almost to a standstill in spring; after a slight recovery during summer months, traffic remained muted for the rest of the year.

PASSENGERS

• • -73.5% reduction in passenger volumes to 8.3m

  • − Local passengers of 6.3m (-71.7%)

  • − Transfer passengers of 2.0m (-78.2%)

  • − Transfer share of 24.2%

AIR TRAFFIC MOVEMENTS

• • Decrease in air traffic movements to 111,328 (-59.6%)

  − whereof line & charter movements 83,081

CARGO

• • Cargo -35.6% to 291,163 tons

Commercial Business and Real Estate

Commercial Business and Real Estate

Resilient Real Estate Business

COMMERCIAL BUSINESS

The commercial business shows lower rental income as a result of lower passenger numbers and the impact of the lockdown on commuters as well as employees (remote work) at the airport. Negotiations for MAG reductions for 2020 are concluded and were held on a case-by-case basis to find individual agreements.

• • Commercial turnover -60.5% to CHF 237.2m − Airside -72.6%

  − Landside -43.1%

REAL ESTATE

Fixed contract real estate business performed in line with expectations and showed only minor shortfalls in rent.

• • Real estate revenues increasing due to acquisition of Priora real estate portfolio in December 2019 and initial revenues from The Circle

Commercial Business

Significant Drop after Record Year

• • Commercial turnover (actual spend of customers) heavily impacted by lower frequencies both on air- and landside

• • As a result, commercial revenue (amount tenants pay as rent) significantly lower; however, Minimum Annual Guarantees

  (MAG) provide certain protection but had to be lowered as well in various cases

• • Largest commercial tenants are Dufry, SSP and Autogrill

Real Estate Business

Solid Progress and Expected to Perform Well in the Years to Come

Circle?

CHF 140.9

CHF 122.4 CHF 123.4 CHF 119.8 CHF 121.4 CHF 125.3

mFHCnI

FY2015

FY2016

FY2017

FY2018

FY2019

FY2020

Revenue from services

Cleaning

Energy and utility cost allocation

Revenue from rental and leasing agreements

Revenue from Facility Management (in million CHF)

• • Revenue from facility management mainly consists of fixed rental contracts (rental and leasing agreements) and offers good visibility with high EBITDA margins

• • Significant boost in revenues in 2020 as a result of the acquisition of the Priora real estate assets and initial revenue generation from The Circle

• • Rental revenue is generated from office space, hangars or cargo/engine halls; largest tenants are SR Technics, Cargologic,

  Swiss International Air Lines, Gate Gourmet and Swissport

• • With the completion of The Circle, revenues are estimated to rise and further improve the quality of the tenant profile

International

Monthly Passenger Development

Portfolio Overview

Florianópolis International Airport

• • New terminal completed in October 2019; no major mid-term investments expected

Noida International Airport

• • Initial capacity of 12m passengers p.a.

• • Construction start expected in 2021

• • Phase I investments of approx. CHF 650m

Airport

LocationPassenger Development (in million)

2017

2018

2019

2020

Concession Period

Stake

Florianópolis International Airport

Florianópolis

Eurico de Aguiar Salles / Benedito Lacerda AirportVitória / Macaé

3.8

3.2

3.8

3.1

3.9

3.3

1.9

1.5

2017 - 2047

2019 - 2049

100% 100%

Belo Horizonte International Airport

Belo Horizonte

10.2

10.7

11.2

4.8

2014 - 2044

12.75%

Andrés Sabella Gálvez International Airport

Antogasta

1.8

2.1

2.2

1.1

2011 - 2025*

100%

Diego Aracena International Airport

Iquique

1.3

1.4

1.6

0.9

2018 - 2040*

100%

Curaçao International Airport

Curaçao

Noida International Airport

New Delhi

1.4

n/a

1.4

n/a

1.5

n/a

0.5

n/a

2021 - 2061*

2003 - 2033

9.69% 100%

* expected

Noida International Airport

Solid Progress

ACHIEVED MILESTONES

• • Signing of Concession Agreement on

  October 7, 2020

• • Appointment of local management team

• • Selection of architect and finalization of Master Plan

• • Signing of state support agreement

NEXT MILESTONES

• • Financial Close for project financing

• • Hand over of airport perimeter by the authority

• • Selection of EPC (engineering, procurement, construction) contractor

Noida International Airport

Architectural Renderings

View of the terminal and curb

View of the forecourt commercial areas

View of the terminal south elevation and forecourt

Retail areas in the international departures lounge

ContentDeclining Revenue and Profit

Full Year 2020

• • Declining revenue numbers as a result of COVID-19

  1'210

  624

• • Further lowered by less international CAPEX (concession accounting)

FY19

FY20

Revenue (in million CHF)

1'127

597

EBITDA (in million CHF)

• • Reduction in EBITDA of

642

69.5% because of significant less revenues

• • Cost reductions did not offset lower revenue figures due to high portion of fixed costs

FY19

FY20

196

Concession accounting

• • Not all revenues correlate directly with traffic development

  1'210

  624

• • Decline in non-aviation revenues of 19.4% (excl. concession accounting)

AviationNon-Aviation

FY19

FY20

Revenue Split (in million CHF)

465

661

375

222

• • Higher depreciation andamortization coming mainly from additional real estate D&A

• • Impairment for shareholding in Curaçao Airport (CHF 3.8m)

-69

FY19

FY20

Consolidated Result (in million CHF)

309

Lower Non-Aviation Figures

Full Year 2020

• • Mainly as a result of the lockdowns, all commercial revenues are lower

  253

• • Due to the MAG, drop in commercial revenue was less significant than traffic numbers

FY19

FY20

Commercial & Parking (in million CHF)

170

• • While communication services showed only a small decrease, the catering and fuel charges business dropped considerably

44

28

FY19

FY20

Revenue from Services (in million CHF)

• • Higher fixed rental income due to acquisition of additional real estate in December 2019

  141

• • Initial contribution of The Circle

FY19

FY20

Facility Management (in million CHF)

125

• • Concession accounting substantially lower since international CAPEX postponed

  127

  63

• • Revenue decline mitigated from new airports in Brazil

FY19

FY20

International Revenue (in million CHF)

Concession accounting

43

36

Cost-Cutting Initiatives Working

Full Year 2020

• • Implementation of short-time working in Zurich to receive partial unemployment insurance compensation helped to reduce salary costs

216

179

FY19

FY20

Personnel Expenses (in million CHF)

Total Operating Expenses (in million CHF)

• • Large decrease of total OPEX due to less concession accounting and cost-cutting initiatives taken in Zurich as well as internationally

568

428

FY19

FY20

Concession accounting

485

401

Financial Key Ratios

Full Year 2020

Free Cash Flow (incl. noise, in million CHF)

• • One time cash outflows for M&A (real estate and upfront payment in Brazil) led to a negative free cash flow already in 2019

FY19

FY20

-261

-251

Group CAPEX

Full Year 2020

The Circle ~CHF 136 million

New Baggage Sorting System ~CHF 68 million

Expansion of Landside Area ~CHF 23 million

Restoration Maintenance Area ~CHF 17 million

ContentOutlook

Guidance 2021

2020 Actual

2021 Guidance

* Cash view

Passengers ZRH 8.3 million	• Recovery dependent on vaccine rollout and lifting of travel restrictions • Well positioned for recovery (passenger mix, robust economy in CH) • Need for standardized travel regimes (at least within Europe), testing strategies / vaccination
Revenues CHF 624 million	• Aviation: In line with traffic numbers (tariffs: one-time ramp-up discount of 10% for flight operation charges starting on April 1, 2021) • Non-Aviation: − Commercial activities: MAG's waived for 2nd official lockdown − Real estate: Additional revenue contribution of The Circle − International: Faster recovery expected
Operating expenses CHF 428 million	• Approx. 50% of cost savings initiated in 2020 will be sustainable (excl. concession accounting) • Further cost cuts needed if traffic recovery slower than expected
Amortization CHF 253 million	• Expected to be higher
Break-even	• Break-even of net profits and free cash flow at approx. 50% of 2019 traffic figures
CAPEX CHF 399 million*	• CHF 200-220m in Zurich (incl. completion of The Circle), CHF 100m abroad

Mid-Term CAPEX Roadmap Outlook

Zurich and International

Zurich

Brazil

Chile

India

• • Total CAPEX of CHF 200m to 220m p.a. expected in Zurich going forward.

  Most important adjustments:

  • − The Circle: No adjustments and full completion in 2021

  • − Expansion of landside area: Slow down over next two years, completion earliest at the end of 2026

  • − New baggage sorting system: Schedule maintained, optimizations to reduce costs

  • − Replacement pier A (incl. refurbishment Terminal 1 etc): Stopped

• • Florianópolis: New terminal was opened on October 1, 2019; limited CAPEX expected going forward

• • Vitória and Macaé: Total CAPEX of roughly CHF 80m expected from 2021 to 2024

• • Antofagasta: No notable infrastructure investments are anticipated through to the end of the concession

• • Iquique: Total expected investments in airport infrastructure of approximately CHF 20m in 2021

• • Delhi Noida: Total investments of approx. CHF 650m for phase 1; timelines, amongst other things, dependent on hand over of airport perimeter by the authority

  Current planning: start of construction in H2 2021; CAPEX peak in 2022 and 2023

Investments have either been reduced or postponed, with major CAPEX in India in the coming years

Consolidated Balance Sheet

What will the Future bring?

Pre COVID-19, as of Dec 2019

Currently, as of Dec 2020

CHF 3'000

CHF 3'000

CHF 1'952

noillimFHCniCHF 2'000

CHF 1'311

CHF 1'000

• • Issuance of three new bonds:

  −CHF 400m in Feb −CHF 300m in April −CHF 200m in Dec

  noillimFHCniCHF 2'000

  CHF 1'000

  CHF -

  CHF -

  Liabilities

  Non-current financial liabilities

  Current financial liabilities

• • Repayment of a CHF 300m bond in July

  Liabilities

  Non-current financial liabilities

  Current financial liabilities

• • Increased credit facilities

Net Financial Debt*:

Net Financial Debt / EBITDA:CHF 1,158m 1.8x

Liabilities: Before and After

Net Financial Debt*:

Net Financial Debt / EBITDA:CHF 1,403m 7.2x

• • Goal to abstain from any kind of government help and weather the crisis with own resources

• • Significant increase in outstanding debt, which will have to be reduced in the coming years

• • Target Net Financial Debt / EBITDA below 3x

* excluding noise

ContentCorporate Calendar

Contact Information

• • March 15, 2021

  Zürcher Kantonalbank Roadshow (Virtual)

• • March 18/19, 2021

  Kempen Roadshow (Virtual)

• • March 22/23, 2021

  Exane BNP Roadshow (Virtual)

• • April 22, 2021

  Annual General Meeting (no physical attendance)

• • June 2, 2021

  Stifel Conference

• • June 26, 2021

  Goldman Sachs Transport Conference

• • August 24, 2021

  Publication of half year results 2021

Investor Relations Team [phone]

Lukas Brosi

Chief Financial Officer

Stefan Weber

Head IR, Treasury & Risk Management

Marcel Heinzer

Senior Financial Analyst

ContentLiquidity and Debt Overview

As of December 31, 2020

Liquidity (in CHFm)

Committed Credit Facilities1

Total utilization (incl. guarantees)

Available short-term credit facilities

Cash balance (excl. Noise Fund) at December 31, 2020

CHF 160m

CHF 72m

CHF 88m

CHF 548m

Total liquidity (excl. AZNF) at December 31, 2020

CHF 636m

Debt Composition (in CHFm)3

by maturity

by currency

Short-termLong-term

by category

Bond Maturity Profile (in CHFm)2

400

InCHFm

Net Debt / LTM EBITDA (excl. noise)

NetDebt/EBITDA

CHFOther

Bonds

500

300

200

100

0

2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033

2034 2035

8.0x

Bank LoansOther

6.0x

4.0x

2.0x

0.0x

FY2020

FY2016

FY2017

FY2018

FY2019

Aim to reduce debt to levels prevailing before COVID-19

1 Increased to CHF 300m in Feb 2021

2 Only shows bonds denominated in CHF

3 Incl. lease liabilities

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Commercial Contracts

Implementation of IFRS16 for Commercial Contracts

IFRS16	Old Terms	New Terms	Comments
MAG*	CHF 5m p.a.	CHF 3m for the current year, thereafter again CHF 5m p.a.	One-time reduction of MAG
Length of contract	10 years	10 years	Length unchanged
Concession	CHF 5m - CHF 3m = CHF 2m	This amount will be activated and amortized until end of contract
Amortization	CHF 2m / 10 years = CHF 0.2m p.a.	Straight line depreciation

*Minimum Annual Guarantee

Revenue=CHF 5m - CHF 0.2m

Current Year

Year 2-10 (ceteris paribus)

CHF 4.8 m

CHF 3.0 m

Revenue

Cash

CHF 4.8 m

CHF 5.0 m

Revenue

Cash

• • The illustration above does not take accruals into account (usually MAG's are paid in the subsequent year)

• • IFRS16 is not applicable for official lockdown (in Switzerland from mid March to mid May), directly impacting revenues

• • The above illustrated process applies to each new concession given separately

This slide is presented for illustrative purposes only

AVIATION / REGULATED

2020 revenue of CHF 222 million

• • "To satisfy the demand for direct connections to the world's major cities"

• • Regulated business with profitability restrictions; not subsidized

• • Premium mid-sized hub with operating license until 2051

• • Land and infrastructure wholly-owned by Zurich Airport

• • Service to 177 airports in 69 countries

• • Economic importance: 111,328 air traffic movements and 291,163t freight

• • Passengers: ~31 million/year (pre COVID-19)

• • Revenue contribution ~60%

Zurich Airport at a Glance

Diversified Airport Operator

NON-AVIATION / UNREGULATED

Commercial, Real Estate & Services 2019 revenue of CHF 422 million

• • Leading commercial center

• • Commercial revenues driven by passenger numbers (airside) and commuters, employees, shoppers etc. (landside)

• • Revenue contribution ~40%

STRATEGIC GROWTH PROJECTS / UNREGULATED

The Circle 2020 investments of CHF 137 millionInternational Business 2020 revenue of CHF 63 million

• • Business and lifestyle center

• • Overall CHF 1.2 billion investment, 180,000m2 lettable area and 6,500 jobs

  • • Long-term growth potential in international markets as airport developer and operator

• • Co-owned with Swiss Life AG (49%)

  • • Diversification of revenues to strengthen future profitability

• • Expect knock-on effect on existing commercial business from additional commuters and visitors

  • • Financial capacity for investments with focus on airports in Latin America and Asia

• • Successfully opened in November 2020; staggered move in of tenants

• • Profit target contribution ~15%

Commercial Centers at Zurich Airport

Three Different Commercial Centers

Our Contribution to the Environment

Long history in minimizing Emissions

Airport Carbon Accreditation Certified climate protection program with reduction targets to be met by 2050

Aircraft noise

Certified environmental management system (ISO 14001) since 2001

Climate protectionHabitat

Key issues

Air pollution controlEnergy

Group Key Figures

Income Statement

Including noise

Excluding noise

in million CHF

Jan - Dec 2020

Jan - Dec 2019

Jan - Dec 2020

Jan - Dec 2019

Aviation revenue Non

Revenue EBITDA

EBITDA margin (in %)

Depreciation and amortization EBIT

EBIT margin (in %)

Finance result (net) Associated companies Income tax expense CONSOLIDATED RESULT

Aviation revenue	221.7	661.5	216.2	648.6
Non-aviation revenue	402.3	548.6	402.3	548.6
Revenue	624.0	1,210.1	618.4	1,197.3
EBITDA	196.0	641.8	194.3	632.5
EBITDA margin (in %)	31.4	53.0	31.4	52.8
Depreciation and amortization	(252.6)	(238.7)	(249.0)	(234.5)
EBIT	(56.6)	403.1	(54.7)	398.0
EBIT margin (in %)	(9.1)	33.3	(8.8)	33.2
Finance result (net)	(24.8)	(14.0)	(26.9)	(18.2)
Associated companies	(3.1)	(2.5)	(3.1)	(2.5)
Income tax expense	15.4	(77.4)	15.7	(75.4)
CONSOLIDATED RESULT	(69.1)	309.1	(69.0)	301.9

Aviation Business

in million CHF

Jan - Dec 2020

Jan - Dec 2019

Passenger-related operations charges	120.0	445.7
Landing charges	32.7	86.9
Aircraft-related noise charges	5.5	12.8
Emission charges	1.6	4.1
Parking charges	24.4	26.6
Freight revenue	6.3	8.4
Total flight operations charges	190.5	584.5
Baggage sorting and handling system	14.7	43.5
De-icing	5.0	12.7
Check-In	2.3	5.7
Aircraft energy supply system	2.1	3.9
Other fees	4.2	6.2
Total aviation fees	28.3	72.0
Total other aviation revenue	3.0	4.9
TOTAL AVIATION REVENUE	221.7	661.5
Avg. landing charge / movement (in CHF)	586.6	631.3

Non-Aviation Business

in million CHF

Jan - Dec 2020

Jan - Dec 2019

Retail, tax & duty

Food & beverage operations Advertising media and promotion Revenue from multi

Other commercial revenue Total commercial revenue

Revenue from rental and leasing agreements Energy and utility cost allocation

Cleaning and other service revenue Revenue from facility management Revenue from services

Revenues international

Revenues from construction projects Total revenues international TOTAL NON

Retail, tax & duty-free	89.7	114.2
Food & beverage operations	14.6	20.1
Advertising media and promotion	13.1	18.2
Revenue from multi-story car parks	40.8	82.6
Other commercial revenue	11.6	17.6
Total commercial revenue	169.8	252.7
Revenue from rental and leasing agreements	113.5	91.7
Energy and utility cost allocation	20.5	23.7
Cleaning and other service revenue	6.9	9.8
Revenue from facility management	140.9	125.3
Revenue from services	28.2	44.1
Revenues international	36.0	43.2
Revenues from construction projects	27.4	83.4
Total revenues international	63.4	126.5
TOTAL NON-AVIATION REVENUE	402.3	548.6

Cost Overview

Operating Expenses Breakdown

in million CHF

Jan - Dec 2020

Jan - Dec 2019

Personnel expenses	179.3	216.3
Police and security	94.1	122.4
Energy and waste	18.0	20.3
Maintenance and material	27.0	40.7
Other operating expenses	42.0	50.8
Sales, marketing, administration	39.7	43.8
Expenses from construction projects	27.1	83.4
Capitalized expenditure & other income/expenses	0.7	(9.5)
TOTAL OPERATING EXPENSES	428.0	568.2
Whereof ZRH	372.4	453.7
Whereof international	55.5	114.5

Portfolio Overview - Majority Owned

Revenues (in CHF millions)	14.7	107.1	(88%)	12.9	0.0	n/a	29.8*	16.4*	80%	4.8	n/a	n/a
of which concession accounting	2.1	83.4	(97%)	0.5	n/a	n/a	20.0	n/a	n/a	4.8	n/a	n/a

OPEX (in CHF millions)	(10.9)	(101.0)	(89%)	(12.8)	(2.8)	340%	(25.5)	(7.8)	227%	(6.0)	n/a	n/a
of which concession accounting	(2.1)	(83.4)	(97%)	(0.5)	n/a	n/a	(19.7)	n/a	n/a	(4.8)	n/a	n/a

EBITDA (in CHF millions)

3.8

6.1

(38%)

0.1

(2.8)

n/a

4.3

8.7

(51%)

(1.2)

n/a

n/a

Ownership

100%

100%

100%

100%

*including revenue from consulting activities in Bogotà and Curaçao

Passenger Development

Global Market Figures (Jan - Dec 2020)

Europe	2020
Share ZRH	78.9%
From/to ZRH	-71.9%
Global market	-69.7%

Worldwide	2020
From/to ZRH	-73.5%
Global market	-63.7%

North America	2020
Share ZRH	6.0%
From/to ZRH	-81.6%
Global market	-61.3%

Middle East	2020
Share ZRH	4.6%
From/to ZRH	-77.7%
Global market	-68.7%

Africa	2020
Share ZRH	2.6%
From/to ZRH	-73.6%
Global market	-65.1%

Far East	2020
Share ZRH	5.7%
From/to ZRH	-79.8%
Global market	-59.7%

Latin America	2020
Share ZRH	2.3%
From/to ZRH	-70.1%
Global market	-59.2%

Source: ACI & ZRH data warehouse, 2020

Source: ZRH data warehouse, 2020

FY2020 Alliance Share ZRH

Largest Alliances in ZRH

Lufthansa Hubs Passenger Development

One Year Hub Comparison (Jan 2020 - Dec 2020)

20%

0%

-20%

-40%

-60%

-80%

-100%

-120%

Jan 20

Feb 20

Source: ACI & ZRH data warehouse, 2020

Lufthansa Hubs Passengers

Mar 20

Apr 20	May 20	Jun 20
ZRH	BRU	FRA

Jul 20

VIE

Aug 20

MUCDUS

Sep 20

Oct 20

Nov 20

Dec 20

Source: ZRH data warehouse, 2020

Traffic Ratios

Seat Load Factor, Passengers per Movement and Take-Off Weight

Passengers and Movements Development

Since ZRH Privatization

Disclaimer

Forward-Looking Statements

This document has been prepared by Flughafen Zürich AG for use in this presentation.

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This document contains forward-looking statements that are based on current estimates and assumptions made by the management of Flughafen Zürich AG to the best of its knowledge. Such forward-looking statements are subject to risks and uncertainties, the non- occurrence or occurrence of which could cause the actual results - including the financial condition and profitability of Flughafen Zürich AG - to differ materially from or be more negative than those expressed or implied by such forward-looking statements. This also applies to the forward-looking estimates and forecasts derived from third-party studies. Consequently, neither the Company nor its management can give any assurance regarding the future accuracy of the opinions set forth in this document or the actual occurrence of the predicted developments.

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