Report on activity and sustainable development 2020

LOWER COSTS AND SECURE CASH FLOW

This optimisation plan was continually adjusted during the year in response to the changing situation with the target of reducing current operating expenses by between €650 to €700 million over the year. In the event, it secured savings of €668 million on the 2019 figure, €423 million of which related to the parent company Aéroports de Paris SA (including €84 million as a result of Paris infrastructure closures, and €118.5 million as a result of the part-time working measure introduced in response to the decline in airport activity).

One of the most urgent needs was to strengthen the financial structure and ensure its security. The capital required to stabilise the cash position at a high level was raised by two bond issues: the first raising €2.5 billion in April, and the second €1.5 billion in July. With €3.5 billion in cash and cash equivalents available at the end of 2020, the Group anticipates no issues with short-term cash flow or with medium and long-term funding.

AGILE CAPACITY MANAGEMENT AND CUSTOMER SUPPORT MEASURES

The Group has shown great agility and control in adjusting its airport capacities to reflect the reality of traffic flows, closing and reopening all or part of its airports and terminals in France and internationally. Each terminal has been managed as a separate entity to enable the Group to close and reopen it quickly in response to circumstances and demand in agreement with airlines and air traffic control authorities. The valuable experience and skills gained over the weeks and months of the crisis have resulted in greater agility and shorter response times.

At Paris Aéroport, commercial flights were suspended at Paris-Orly between
1 April and 26 June, and half of all Paris-Charles de Gaulle terminal space remains closed. By concentrating residual traffic in a limited number of the most efficient terminals, the Group has reduced its structural costs and lowered not only its own operating costs, but also those of its airline customers. They have also benefited from support measures, including exemption from parking charges for aircraft grounded as a result of the crisis. Excluding its Paris airport buildings, the Group has also closed nearly 70% of its commercial properties, the majority of which are office buildings at Orly and Roissy.

As part of adapting its workforce to the situation created by the crisis, the Group also introduced part-time working: the average rate of part-time working for employees of the parent company Aéroports de Paris SA was 50% between March and December 2020. A collective bargaining agreement signed unanimously by employee representatives at the end of December provides for 1,150 voluntary redundancies in 2021, 700 of which will not be replaced.

FINELY TUNED FINANCIAL LEADERSHIP AND MANAGEMENT

Marked by a lasting change in traffic, the new realities of the air transport industry have resulted in a detailed reassessment of the financial trajectories and capital expenditure policy roadmap (see also page 34). The Covid-19 crisis has made it impossible to achieve the financial targets set out in the Connect 2020 strategic plan. Having terminated the five-year Economic Regulation Contract (CRE) with the French State and halted the process of preparing for the next CRE (for the period 2021-2025), Groupe ADP has moved from the unprecedentedly uncertain position it has occupied since its market flotation in 2006, and regained the opportunity of submitting its tariffs for approval and scheduling its capital expenditure on an annual basis for as long as forward visibility of industry prospects remains insufficient. As a result of the savings plan, the capital expenditure envelope for 2020 was reduced to €689 million (€463 million of which inside the so-called regulated perimeter): it will remain in the range €500 to €600 million per year for 2021 and 2022.

Groupe ADP plans to continue the process of transformational change now underway for its organisational structure, procedures and working methods. The action plan for its commercial activities (shops, bars and restaurants in terminals) has been developed in collaboration with all the subsidiary companies, joint ventures, operators and brands operating on airport premises. It provides for short-term support over the period 2020-2022 to optimise costs, contain debt and prepare for the reopening of retail units as terminals reopen to reflect rising traffic volumes. More structural initiatives are also in place to improve retail productivity by structuring this part of the business as a series of commercial subsidiaries in a One Group model. It is partly thanks to this “fine tuning” work that the key indicator for the Paris airport shops – revenue per passenger in airside retail – was maintained at €19.1 in 2020, just 3% down on the previous year. As a result, the company must adapt its financial management and capital expenditure policy to a forward visibility horizon that currently depends on how the pandemic develops, the success of vaccination campaigns and the rate at which countries reopen their borders, all of which are required before any sustained and substantial recovery of worldwide air traffic can take place.