Ladies and gentlemen, welcome to the Flughafen Zürich AG Full Year Results 2020 Conference Call and live webcast. I am Sandra, the conference call operator. I would like to remind you that all participants will be in listen-only mode, and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. Webcast viewers may submit their questions or comments in writing via the relevant field. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Mr. Stephan Widrig, CEO. Please go ahead, sir. Ladies and gentlemen, welcome to the presentation of our company's full year results 2020. I would like to remind you that the analyst presentation is available on our webpage, zurich-airport.com, and available as a webcast as well. My name is Stephan Widrig. I'm the CEO of Zurich Airport, and I will host this presentation together with Lukas Brosi, our company's Chief Financial Officer. I will start with the business update before our CFO will provide you with information on our financial performance, followed by the outlook. At the end, as always, we will have enough time to answer your questions. If you are using the webcast platform, it's also possible to submit questions already during this presentation. Stefan Weber, our Head of Investor Relations, will moderate the Q&A session at the end. 2020 was dominated by the coronavirus crisis. The pandemic represents a major challenge for the entire aviation industry, as well as for Flughafen Zürich AG, and is impacting all areas of our business. With a decline from over 30 million passengers per year to 8.3 million passengers in 2020, Zurich Airport suffered a historic drop in traffic. After signs of a slight pickup in international air travel in the summer season, passenger numbers and traffic declined once again, following the imposition of travel restrictions and quarantine rules. Constantly changing travel rules and the differing regulations in various European countries created a high level of uncertainty for passengers, making it difficult for them to plan any journeys. Airfreight proved to be a valuable mainstay for the remaining intercontinental flights. Even though events were overshadowed by the pandemic, we have been able to make progress on various topics, as the following slide depicts. Already at the end of February 2020, before the pandemic spread to Europe, our company was successfully able to obtain refinancing on the Swiss capital market with a 15-year bond for CHF 400 million. A further four-year bond for CHF 300 million followed in May. The favorable market conditions in December enabled the company to issue a third bond for CHF 200 million for seven years in order to build up additional liquidity reserves. The new issues in 2020 were raised at an average weighted interest rate of 0.34%. Moreover, as a precaution, the option to increase credit lines to a total of additional CHF 300 million was exercised at the beginning of 2021. Internationally, even in these difficult times, the long-term financing of the two Brazilian concessions in Vitória and Macaé was also granted at favorable conditions. In June, an agreement was reached with all stakeholders on flight operation charges, creating long-term planning security for all parties involved. The current charging period, which commenced in 2016, has been extended, and the level of charges remain broadly unchanged. A temporary 10% cut in flight operation charges for this year only, starting in April, was agreed in order to help the airlines ramp up their operations again this year. The flexible duration of the charging period allows Zurich Airport to offset the economic losses of the current situation and the temporary reduction in charges in 2021 with the WACC fixed at 5% for the full period. Commercial activities were equally affected by the difficult situation. As we will elaborate later, we waived the minimum annual guarantees during the official lockdown periods and have reached agreements with all retail, tax, and duty-free, and food and beverage partners for the remaining period of the year 2020. During the crisis, our real estate business proved to be a very valuable diversification, and the opening of The Circle will help to further increase these revenues in the future. Internationally, we successfully took over the new concession in Brazil at the beginning of 2020. In October, the concession agreement for the construction and operation of the new airport in Delhi, Noida, India, with a term of 40 years, was signed, and just a few days ago, we were able to sign another contract with the government, the state support agreement. Financially, the prevailing situation presents a major challenge to our company. For 2020, we generated almost 50% less revenue, which amounted to CHF 624 million. Although a number of cost cutting initiatives were implemented, our EBITDA fell to CHF 196 million and our consolidated results turned negative to CHF 69 million. Our group CapEx decreased to roughly CHF 400 million in 2020. In relation to 2019, one has to take into account that in 2019 that 2019 was impacted by a large real estate acquisition and the up from payment for the Brazilian airports in Vitória and Macaé. Let's quickly talk about the current situation in our aviation business. Zurich Airport saw a massive 73.5% drop in the number of air passengers, ending the year at 8.3 million passengers. Travel restrictions and the imposition of quarantine periods all over the world made any kind of meaningful travel impossible and passenger volumes were back to the 80s. In total, there were around 111,000 flight movements in 2020, a decrease of roughly 60% over the previous year. Freight volumes at Zurich Airport decreased by 1/3 compared with the 2019 levels. Airfreight did not experience such sharp decline as passenger volumes and flight movements. As so many passenger flights were not operating, additional freight aircraft deployed and there have never been so many freight flights in one calendar year in the history of Zurich Airport, at least one positive record. On the next slide, I will provide you with an overview about our commercial and real estate business. Our commercial partners in retail, tax and duty free and food and beverage operations have seen turnover fall significantly as a result of the lockdowns and lower frequencies. No rent was charged during the approximately two months lockdown imposed by the authorities in spring and again for some days in December 2020. In addition, further rent concessions for the post lockdown period were discussed with the commercial partners, with the fair risk sharing and agreements were found with all tenants in the retail, tax and duty-free, and food and beverage business. Hence, the commercial revenues shown in the Annual Report 2020 are all based on final and executed agreements. After our commercial partners set a new record in 2019 in terms of turnover, last year was significantly less profitable, seeing the turnover decreasing by 61%. Thanks to the minimum annual guarantees, the commercial revenues are protected to some extent. Rent concessions amounted to a total of CHF 52 million for 2020, which represents around 40% of the total MAG volume. Thanks to a high proportion of fixed rent, our revenue from facility management proved to be the most stable pillar of our business model over recent months. In November, we saw the opening of The Circle with numerous shops and restaurants, Approximately 60,000 square meter of office space has been led to leading companies in the technology, pharmaceutical and financial sectors. As a result of the pandemic, the opening of the hotels and the associated convention center have been withheld. They will open in beginning of April this year. All construction work should be completed by the early summer of 2021. The construction costs are within the earmarked budget and the overall occupancy rate of The Circle is currently at 85%. Occupancy and rent levels are in line or better than the expectations of the business plan. The Circle is one of the largest real estate developments in Europe also proves that a carbon free future is possible. It employs, among others, alternative energy sources, For example, solar electricity, systematic heat recovery and seasonal underground thermal energy storage. The Circle operates with virtually no fossil energy sources and is LEED Platinum and MINARGIE-certified. On the next slide, an update from our international holdings is provided. Compared to most airports in Europe, our airports in Latin America showed faster recovery so far, especially towards year end. This is mainly attributable to the air traffic mix, which is mostly domestic. We have also exceeded our passenger capacity for January and February this year, they're exceeded. Also in Latin America, airports suffered a dramatic slump in traffic in 2020. Various measures taken at our airport ensured that liquidity was protected despite the reduced level of operations. This slide shows an overview of our current international portfolio for your reference. The focus of our international business is on the two markets in Brazil and in India. Since the travel restrictions were imposed by official order, the airports in Brazil are entitled to compensation from the respective authorities. Floripa Airport filed a claim towards the Brazilian airport regulator, ANAC, to restore the economic and financial equilibrium of the concession contract. ANAC accepted the claim, and the rebalancing of the economic and financial equilibrium will be made through an immediate increase of 15% in regulated tariffs, which started in December 2020, and the waiver of the variable concession fees. For Vitória and Macaé, a similar claim for the year 2020 is being filed. Further claims in Brazil for the year 2021 will be filed for all airports, and we are confident to get them confirmed as well. In Chile, the duration of the concession was extended for the two airports there, which is also a mechanism defined in the agreements that we signed and compensates for the revenues lost during the pandemic. Let's talk about our biggest international project currently. In October last year, we signed the concession agreement for Delhi Noida International Airport in India. The picture on the top shows our local CEO with the government representatives at the signing event. Our local team is pretty much in place, and we were able to select the architect and finalized the master plan. The picture on the bottom depicts a rendering of how the new airport will look like in its initial phase. Just a few days ago, we could also sign the state support agreement, which will help, for instance, to facilitate the connectivity to the high-speed rail link between Delhi and Agra. As a reminder, the concession for building and operating the second capital airport, 80 kilometers south of Delhi in the Greater Noida area, is for a term of 40 years. The investment associated with the first phase of construction amounts to approximately CHF 650 million. Once this first phase is operational, the new airport will have the capacity to handle at least 12 million passengers a year. The next crucial milestones will be the handover of the land by the authority, the selection of an EPC contractor, and helping us building the infrastructure and reaching the financial close for loans in Indian rupees with a local bank. Just two weeks ago, the subsidiary of the rating agency Fitch, called India Ratings, issued a provisional A- rating with outlook stable for this new airport, which is at the moment the highest rating in India for a greenfield airport. Here we see some further architectural renderings of phase I. On the top are renderings showing the terminal from different perspectives. On the bottom, you can have a glimpse of how the terminal will look like inside at the opening with the first capacity at 12 million a year. We are very excited to build this new state-of-the-art airport to create value for all stakeholders involved. Due to the increasing importance of the international business, a separate division is formed as of May 2021. The division will be led by Daniel Bircher, who will become part of the Management Board of Zurich Airport Group. Daniel Bircher has been working for us since 2006 and has an excellent knowledge of the international business due to his many years of on-site activities. From 2011 on, he was Operations Director of Bangalore International Airport in India, from 2015, CEO of Belo Horizonte in Brazil, and since 2019, in charge of our business in Asia. With this, I'm handing over to Lukas for the financial update and the outlook. Thank you, Stephan. Good morning, ladies and gentlemen. Welcome also from my side. I will now give you an overview of the financial performance of the company. Obviously, the pandemic had a significant impact on our numbers. Revenue dropped by 48.4% compared to mid last year to CHF 624 million. Aviation revenue was down by 66.5% to CHF 222 million. This decline was slightly lower than passenger numbers due to the fact that not all charges depend on passenger volumes. Landing charges are determined by the numbers of flight movements, for example, and aircraft parking charges were affected by the many parked planes. Non-aviation revenue was down by 26.7% in the same period to CHF 402 million. As the cost reductions could not offset the lower revenue figures given the high portion of fixed cost, EBITDA fell by 69.5% to CHF 196 million. The bottom line result for the full year 2020 was a loss of CHF 69 million. In the prior year period, Flughafen Zürich AG was able to post a profit of CHF 309 million. Let's have a closer look at our non-aviation figures, which were slightly less affected from the pandemic. Compared with the previous year, total commercial and parking revenue fell by CHF 83 million to CHF 170 million. As mentioned before, no rent was charged during lockdowns, and further rent concessions for the post-lockdown periods were agreed upon. Rent concessions were capitalized in accordance with IFRS 16 and will be amortized over the term of the respective contracts. Please find further simplified explanations for the accounting treatment of IFRS 16 in the appendix. While commercial and parking revenue declined significantly, earnings from facility management grew by 12.5% to CHF 141 million. This increase is chiefly attributable to the purchase of a total of 36 buildings and land owned by Priora Suisse AG at the end of 2019. The first rental income from The Circle also contributed to this positive growth. Revenue from services fell to CHF 28 million. The drop in revenue from international airport business to CHF 63 million was due in particular to a fall in revenue from construction projects, the so-called concession accounting, which correlates with the reduced investment activity. The revenue of the Brazilian airports, Vitória and Macaé, which were taken over at the beginning of 2020, were recognized in the P&L for the first time. As mentioned before, we have been able to cut our operating costs considerably, and compared with the previous year, operating expenses decreased by 24.7% to CHF 428 million. In 2019, the cost basis was affected in particular by the expansion of the infrastructure in Florianópolis at a cost of CHF 83 million. After adjustment for expenses for construction projects, operating expenses fell by 17.3% in total. In Zurich, operating expenses fell by 17.9%. Owing to a lower headcount and short-time working payments, personal expenses for the reporting year decreased by CHF 37 million to CHF 179 million. The lower costs of CHF 28 million for police and security was mainly attributable to fewer duty hours. It was possible to reduce all other cost blocks likewise. The temporary shutdown of individual parts of the infrastructure helped us to lower maintenance and material costs, as well as energy consumption. I will now outline some key ratios. Net financial debt, excluding the Airport Zurich Noise Fund, stands at CHF 1.4 billion. As a result of lower profit numbers, the return on invested capital stands at -1.1%. The operating cash flow figure was also lower compared to the prior year period, while the free cash flow was on a comparable level as the year before, when the purchase of real estate as well as the upfront payment for the airports in Vitória and Macaé occurred. Understandably, the focus over the last weeks was on the liquidity situation of the company. During months like November to February, with very low traffic and commercial centers mostly locked down, the total monthly cash burn, which includes CapEx in Zurich, amounted to roughly CHF 35 million. The next slide shows the largest projects we have worked on last year. Our major projects have multi-year development, planning, and implementation phases and go on to operate over many decades. It is also necessary to carefully maintain our infrastructure and real estate in order to preserve their value. For 2020, our CapEx was slightly higher than anticipated. The completion of The Circle, amounting to about 1/3 of the group CapEx, was pursued with high priority in order to secure the revenues from the project as planned. Other projects have been continued to a certain milestone at which the project can be adjusted or delayed without additional costs. This results in a revised investment planning for the next few years with significantly lower CapEx. I will come to that later in the presentation. With this, let's move on to the outlook. The forecast for the current financial year is still surrounded by a great deal of uncertainty, with passenger volumes in 2021 being primarily dependent on the point at which international travel picks up again. Flughafen Zürich AG is well placed to take advantage of the recovery when it comes. An advantageous passenger mix with a high proportion of travelers flying within Europe and to tourist destinations, and a robust Swiss economy constitute favorable conditions. As well as aviation revenue, commercial revenue remained under pressure for 2021. Thanks to additional income from The Circle, revenue from real estate is set to grow slightly in 2021. A speedier recovery is expected in the case of revenue from international business activities, as this is more driven by domestic travel in the respective markets. Flughafen Zürich AG has taken extensive measures on the cost and investment side. Significant cuts to operating costs were achieved over the past year. The company expects it will be possible to retain around half of these reductions during the recovery phase. Around 50% of the passenger volume of 2019 is needed to return to profits and generate a positive free cash flow again. Investment at the Zurich base will amount to CHF 200 million- CHF 220 million this year. Regarding the net investments at subsidiaries abroad, the project in Noida is the most significant one. The start of the construction will be dependent on certain milestones. If construction starts this year as scheduled, this will lead to a first double-digit million amount of CapEx for the project, depending on the agreement with the construction companies on upfront payments, et cetera. On this slide, I'd like to provide you with an updated overview of our estimated CapEx in Zurich and internationally over the next few years. Although we are still pursuing our strategic projects and our high-quality standards in Zurich, we have reduced our midterm CapEx plans as much as possible, especially where CapEx is capacity driven. The upgrading and expansion of the baggage sorting system is under construction. Capacity related elements are currently under review and will be postponed if necessary. This will bring the total cost down to less than CHF 400 million. The expansion of the landside passenger zone is crucial for the use of all landside zones. The opening of the new landside passenger area is now scheduled for the end of 2026 and will include new retail outlets and a food hall above ground, but also provides a significant improvement of the underground logistics of the whole airport system and an improvement of the flow of passengers, commuters, and workers at the airport. International CapEx is based on a project basis and is typically front-loaded over the concession period. In Brazil, after having successfully built the new terminal in Florianópolis, there is only limited CapEx needed for this airport going forward. For the two new airports in Vitória and Macaé, we currently expect CapEx of approximately CHF 80 million until 2024. In Chile, the main CapEx item will come from the airport in Iquique, with estimated investment of roughly CHF 20 million in 2021. In India, we estimate total CapEx for these greenfield airports to amount to around CHF 650 million, which is spread over the next four years. As of now, we believe the construction start will be in the second half of this year. To finish my part of the presentation, I'd like to talk about the changes in our balance sheet triggered by the pandemic. We aim to reduce the leverage to a targeted level of below three times EBITDA. It will be crucial for us to strike a balance among the initiated cost savings, lower investments, and future shareholder remuneration to achieve that goal. Apart from the short time working support available to all companies, Flughafen Zürich AG has received no government assistance or other public funding. In the past, we have always maintained a very solid balance sheet and a high level of internal financing, which has proved beneficial now. Even though we still have a very good financial rating, we intend to restore our previous balance sheet strength by maintaining strict cost and investment discipline over the next few years. We will always be in a position to weather any future crisis, too. With this, we are at the end of the presentation. I hand over back to Stephan. Thank you, Lukas. Thank you all for listening. We now open the Q&A part of this presentation. First, we like to invite the questions asked on our webcast platform, and then answering the questions raised by phone. Mr. Stefan Weber, Head of Investor Relations, will first answer the question coming from the web. Please, Mr. Weber. We have some first questions from the webcast. Daniel Bürki from ZKB has a question on the guidance. We mentioned that 50% of 2019 passengers are needed to reach break even for free cash flow and net profit. It's the same figure for both. Is the 50% of 2019 passenger numbers a reasonable target for 2021 based on today's knowledge? Well, the message behind that guidance as the break-even point for profit and free cash flow is not the same as we now guiding 50% passenger volumes for 2021. The message behind is that we believe that within a reasonable timing, we can achieve this 50% over, let's say, the next 12- 18 months for almost sure once international travel will be open. This is probably not the case for the financial year 2021. We have a couple of questions coming from Pascal Bürki from Bank Vontobel. First, he would like to know the 10% ramp-up discount to help the airlines in 2021. Why is this discount still happening, and shouldn't it be pushed out by one year as the passenger recovery clearly prolongs? Is there a risk that we will see the discount on airport charges also in 2022? Well, this 10% discount was part of the agreement we achieved with all the partners involved regarding the regulated returns for the next year. It was defined for the year 2021. We had a certain delay of implementing the new tariff, including the 10% discount. With the tenants, have you been willing to fully waive rents for the lockdown period beginning of 2021 as well? The local press in Switzerland suggests you are quite tough in the negotiation process with tenants, but could there come additional concessions on top of the already published CHF 32.6 million in 2020? Maybe I start and Lukas can add. First, I like to hear that we are tough enough. On the other hand, it's really not normal that we have found agreements with all partners for 2020, which shows that we have very stable and robust partnerships and still can go with tougher stands as probably some of the state-owned airports. You ask whether we waived also during the official lockdown in 2021, the rent. Yes, we did. We think it's not the right moment now to discuss about the MAGs in 2021. At the end, legally, these MAGs are due, but we want to have stable partnerships. We assume that the MAGs will be fully paid once the markets recover, and in the interim, we have to a little bit observe still the situation this year also how much they get state help. We believe that the more that aviation gets healthier, the less compromises we will have to do on the MAG payments. Anything to add, Lukas? Maybe just one or two sentences on what is different in 2021 to 2020 in terms of our commercial partner is the fact that we are discussing in Switzerland additional state aid to tenants. That's something that we have to balance in as well when we talk about individual agreements on the MAGs for 2021. Just to ensure that a commercial partner cannot have access to state aid and on top of that, let's say, whatever fully or partial withdraw of the MAGs. I agree that it's too early right now to go into binding agreement for 2021 as too much is still pending on important questions. Great. Next question is on new retail contracts. There are, for example, food service companies that mentioned that they have closed much better deals with certain airports now. With lower minimum rents and guarantees that are linked to passenger volumes. What is our strategy with regards to rental agreements both on air and land side? We have no major contracts expiring this next year or even in 2023. I think the agreement situation with all the large commercial partners on retail duty-free as well as on the F&B operations, we are not under probe because we don't have new major concessions that have to be renegotiated. The agreed MAG before corona will still apply. Next question is on The Circle. Hyatt is an important tenant for The Circle. It appears that hotels are still closed. Does this mean a meaningful share of rental income from The Circle will be pushed into 2022, or what can we expect in rental income from The Circle this year? By when do we expect to reach a 100% letting rate? Well, different answer to this question, first of all, obviously, we are facing a tough situation in the hotel and also in the food and beverage part in The Circle. It's true that the full potential of these segments will not really play in 2021. Yes, one can assume that, let's say the full first year of rental incomes from the hotels and also from the food and beverage tenants will be, let's call it, postponed to next year. We are not guiding a particular number in terms of revenue as there is, I think, too much in flow right now for also the tenants in The Circle. We are now at the pre-letting phase of 85%, which is more than we have assumed at the opening, first of all. The quality of the tenant out of this 85% is on a very high base. Therefore, even if The Circle probably cannot play its full potential in the first year of operation, we are even more convinced that this is going to happen at a now later stage. I think also important to mention here is that no one of the really larger tenants has withdrawn from its obligation during the pandemic. We are very much convinced that whatever we have assumed for The Circle is going to happen, but obviously at a later point. We also have assumed from the beginning that The Circle will need a ramp-up phase over multiple years to come from 85%- 100%, and therefore we don't see us under pressure to really bring this pre-letting up to 100% this year. This is something that we are now following in the marketing, and the target will be that we have, let's say, 100% in the next two to three years. Maybe to add one thing from my side, most of the rents in The Circle are fixed rents, basically the only major variable rent is the one with the Hyatt group for the two hotels and convention. Hyatt Regency is confirmed that it will open on 1st April, and so next month, including the convention center, of course, in form of a soft opening and ramp up. One has also to see that starting next year, there is also a guarantee part in the hotel rent that will also help to stabilize. Last question from Pascal is on personal expenses. In 2020, Zurich Airport has received CHF 34 million from the short-time working scheme. Until when will you get support, and are there certain measures you intend to take thereafter? Yeah. The situation is that the Federal Council proposes extending the maximum duration of short-time work to a maximum of 24 months. It is likely that the federal parliament will adopt this proposal in the relevant law, at the end, there is also a public voting about this. We will have, let's say, full certainty by summer if short-time work gets extended to 24 months, which would mean to the end of first quarter next year. Obviously, short-time working allows us to maintain the staff by getting compensated for the cost. Therefore, I think the decision has to be made when we see the end of the short-time work coming in and balancing out the point of where we do stand in the ramp-up and in the operation. We do need to also assure a smooth ramp-up. If, for example, in summer we see the recovery of international travel, I think the decision on lower the total staff will be different to a decision we do have to make once we see that the recovery is not taking place and we are coming to the end of the short-time period. I think we do have to remain the question for open for right now, but we are fully convinced, and you see this also in our guidance, that further measures on the cost side have to be taken once we do not see a recovery ahead of us. The next two questions are from José Manuel from Santander. First one is on The Circle. Does The Circle benefit from minimum guarantees, and could this be a caution for 2021? As I outlined before, most of the rents are fixed anyway, so there is no need for any MAG since it's a classical real estate fixed rent, except the one for the Hyatt Group, which has a guarantee component in it. The second one is on the project in India. What proportion of the CHF 650 million will be equity financed provided by Flughafen Zürich AG, and what proportion will come from non-recourse debt providers? I think José Manuel has already answered this question in his report from this week. I'm referring to the number in the Santander report, which sums the equity up to CHF 255 million. I think we are now at the final stage of closing the financing package, but this seems to me as a reasonable number also in terms of the debt-to-equity ratio of 65%/35%, which was assumed in that report. The next question is coming from Reto Portmann, zCapital. What is the current cash drain per month? With this month of low traffic and commercial centers in lockdown, the cash drain is about CHF 35 million, which includes CapEx in Zurich. We have a very similar question coming from Alexandra Bossard from UBS and Andrea Frey from Credit Suisse. How quickly do you expect to return to net debt EBITDA below three times? Also on slide 31, we aim to reduce debt levels prevailing before COVID, which would translate to below two times and not three times. Could you please elaborate on this? Maybe last question first. The target is clearly to lower the levels to below three times. The target is not to go to below two times as before crisis. I think with three times EBITDA as the debt ratios, that's something that we consider as, let's say, sustainable situation for the balance sheet. This is obviously, let's say, a medium term target in a way that this is not the only priority in terms of the usage of funds. As I've mentioned in the presentation, it's really a balancing amongst further cost saving investments and also to go back to attractive future shareholder remuneration. To catch up on this, we also have a question on the future dividend policy. Andreas Wild from Zuger Kantonalbank would like to know our thoughts. Well, the dividend will continue to depend, first of all, on profit of the company. The achievement of a profit, therefore, determines the point in time when the dividend is resumed. As I've mentioned before, we intend to continue to pursue an attractive dividend policy in the future. Again, here, I think important to emphasize, which we believe does not contradict the intention to reduce the debt. The next question is on traffic. Yusuf from Belfield Capital would like to know the projection of traffic relative to 2019 in 2021 and 2022. To be very honest, as we have summarized that in our guidance, it's even hard for us to go with a precise number into the financial year 2021 or 2022, as we all don't know the point in time when really international travel will be possible. Compared to maybe going into, let's say, a detailed discussion on what is the right number or what is the best guess number for passenger volumes, I think we have to make clear that whatever happens in terms of different scenario, we have to be prepared, even if the recovery takes longer. Given the financial strength of the company, the liquidity situation, et cetera, I think we are prepared for different scenarios right now, but at that point in time, we could not be more precise on that question. Maybe one addition from my side. At the end, we are an infrastructure provider. There is a difference between airports and airlines in terms of variability and dependency on short-term developments on the traffic scenarios. Being an infrastructure provider, we depend much more on medium and long-term traffic expectations rather than too many changes in the short term. Here, if we look a little bit ahead, 2025 onwards, and ask what are really the drivers of aviation, I believe it's economy growth, it's population growth, and it's international dependency of our economy and our private lives also. There is none of these three drivers that we expect to be lower in 2025 than today post-COVID. All the infrastructure that practically we provide has a horizon of 20, 30, 40 years. There I really do not see any sustainable shift, especially at the capacity-constrained airport at Zurich in terms of our long-term fundamentals. Maybe for an airport and an infrastructure provider, it's not so crucial what happens in this year or next year. It's of course crucial that the international aviation markets recover in a time span of 5- 10 years. Here, if I look at all the research and all the intelligent people writing about it, then I think there is a lot of evidence that aviation as an industry overall will grow and being the only and largest intercontinental airport of Switzerland is a very robust and stable economy that also will recover earlier from COVID, having capacity limit anyway achieved in 2040 or 2050. I think for us, these are the fundamental questions and that's why we also on a long-term master planning, there is no major change expected in our business from our view. The next two questions are coming from Charles from Kempen. First one is on aviation. Are you still comfortable with your long-term regulatory agreement? Based on the current visibility, do you still expect to reach the break-even point in the aviation EVA by 2025? That's a good question. We are still convinced that an agreement on the tariff as we have reached last year is the right solution as we have now certainty of the possibility to refinance the losses occurring from the situation. That was our main goal with this agreement. I think also compared to other airports across Europe or even internationally, one can take it for sure that we have visibility on the tariffs for the next four years until the end of 2025. Also we have a solution that allows us to recover the current losses. I think that was the main goal and I'm still very much convinced that this is a good agreement we have set last year. Whether we do believe if we can fully recover the losses until the end of 2025. First of all, also here there is much obviously in flow. We also have assumed in this agreement that there will be a ramp-up phase for multiple years and even on a maybe more technical base, the negotiation says that we have to start, or the agreement says that we have to start negotiations in 2025, so in 2025 is not the ultimate deadline to have the refinancing done. To sum up, we are still convinced that we see it very likely that we can fully recover the losses until then. The second question is on M&A. Can you confirm that there is nothing in your pipeline at the moment? Given that we own a 100% stake in Noida, would you consider selling at a later stage? I can confirm that there is nothing in the pipeline. We look at the markets in India and Brazil if there are tenders going on, depending when they are going on and then what size. Generally, currently no new acquisitions planned. First, we have to stabilize our situation. On the other hand, there is also no divestment of a certain shared plan that the current assets we have. By having 100% in this development stage, we can take much better control than with complex joint venture agreement and implement at the end what we want. There are no more questions from the webcast. The first question from the phone comes from Ruxandra Haradau-Döser from Kepler Cheuvreux. Please go ahead. Good afternoon. Three questions, please. First on cost savings. For clarification, do you expect 50% of the cost savings to be sustainable once traffic recovers or only during the traffic recovery period? You mentioned that further cost cuts will be considered in case tariffs do not recover as expected. Could you please talk about flexibility in case lockdowns were to be prolonged into the summer this year? More generally, do you expect social distancing measures and the requirement to minimize passenger crowding to remain at airports post-crisis? If yes, how do you prepare for this? Finally, could you please give us an update on the environmental tax in Switzerland? Thank you very much. Maybe start with the first question of the cost saving. I think to answer both questions in this regard, I think one has to have a closer look into our cost base or into the individual drivers of our cost base. There are costs that depend directly with the volume, where we have to be careful that these costs do not increase faster than the volume, basically. Keep in mind that we have proven in the past, over the years of steady volume growth, that we are able to manage that OpEx develop disproportionately lower than cost. Same is true now for the whole period of the ramp up. There are also cost savings based on supplier contracts that have been renegotiated as part of the cost savings already implemented, and ultimately, we can also influence part of the cost directly, for example, in India, the administrative area. At the end, it's also the ambition of the management to keep half of the cost savings during the recovery phase and not just for the ramp-up year. On the question on social distancing and passenger crowd management, I believe now we have three levels of taking care of the medical situation. One is the hygiene. Hygiene measures, I think they will remain. There will be a high sensibility of people in terms of not having too many contact points, for example, or we have the staircases with a UV light installed. All these measures, I think, will remain, but whatever is related to social distancing and passenger crowd, this will not work in the plane. Since it will not work in the plane, it does not make much sense to keep it on the ground. It's not just in aviation, it's in many other situations of public life. We cannot come back to a sustainable business again in restaurants, in shopping centers, wherever, if we would keep those measures. I do not believe that in terms of social distancing and passenger crowd management, anything will remain. Of course, this year it will still remain to some extent, but not in a one or two year horizon. On your question on the environmental tax in Switzerland, there will be a public quotation in June, where there will be the final verdict on this tax. It's not a tax impacting us. It's a ticket tax for the airlines, which would put a tax on flying in Switzerland before the same levels are achieved in the European Union, for example, which is why we are against this law. I'm quite confident on terms of competitive levels, sooner or later, similar things will come up in Europe as well. We are again back on a competitive term again. Thank you very much. The next question comes in Siobhan Lynch from Deutsche Bank. Please go ahead. Hi. Good morning. Thank you very much for taking my questions. Three on the international division, please, if possible. Firstly, could you give us an insight into what the underlying revenue decline was in 2020 versus 2019 when you strip out the positive impact from the V&M airports in Brazil? I guess how much further incremental uplift are you expecting from V&M in 2021 versus 2020? My second question, in relation to the Indian airport project, I think you said four years potentially until completion. Should we assume that you start recognizing revenues from then onwards? Can you give us any guidance on the kind of magnitude that these revenues could contribute per year to Zurich? Just finally, in your guidance, you've noted that you expect the international airports to recover at a faster rate in 2021, I guess, versus Europe and Zurich Airport. Is there any guidance you can give on how fast you're thinking that could be this year in terms of your revenue assumptions? Thank you very much. I can quickly outline on the last question. On the first two, I ask you, Lukas, to give the answer. When we say the international assets will recover faster, we mean in relation to Zurich because of its larger proportion of domestic traffic. It's, of course, difficult to foresee now still the situation for the next months in Brazil. I think 2021 will still be a difficult year to project. If you look at China, for example, as the largest domestic market, it more or less has recovered in the meantime, if you look on the domestic business, not on the international, of course. If you look at the United States, I think one can be confident that in the second half of this year, the domestic traffic within the United States will recover with a certain also compensation effect on visiting friends, relatives, on doing business networking. I assume that the Brazilian market and, of course, also the Indian market, but there we are not exposed to its operational assets yet. The Brazilian market will be similar. In the airports we have, Floripa, Vitória, Belo Horizonte, there is not much international traffic. It's mainly the traffic between the major cities in Brazil that impacts that traffic growth. On the second question regarding India, yes. From today's perspective, we are planning a four-year construction phase. Certain milestones have to be achieved before we start the construction. Current planning is still that we start construction towards the end of this year, and obviously we are recognizing revenues. If you just calculate that then by 2026. We have not yet guided any particular numbers on our estimation, besides the fact that we are expecting a double-digit percentage return on the equity IRR above 10%. If you calculate that backwards, that brings you to a double-digit million amount in terms of EBITDA contribution. I cannot go into more details on that. In terms of your first question, let's call it the clean result of the international business. Obviously, we have to go a little bit more into detail for that, but we will follow up after the call with a precise answer. What I can say is that, in terms of the traffic volume as a proxy, the airports were about down 55%-60% in terms of passenger 2020 compared to 2019. Okay. Thank you very much. The next question comes from Cristian Nedelcu from UBS. Please go ahead. Hi. Thank you very much for taking my questions. Three, if I may. In the annual report, you talk about rent concession granted under the form of staggered rents and lease term extensions. Would you elaborate a little bit on this, exactly what you mean by that? In terms of your real estate portfolio, could you give us, please, your split of revenues by office logistics or other real estate segments? In that regard, excluding The Circle, do you expect the real estate revenues to grow year-over-year in 2021? The last one. In your annual report, you talk about the potential risk that Lufthansa could shift capacity between the hub airports. If we look at your transfer traffic ratio, this year it has been declining or it has been lower versus some of the hub competing airports. I guess, could you give us a bit of an update on your discussions with your main carrier and the plans in terms of long-term capacity, in terms of transfer capacity in the first phases of the recovery in 2021 and 2022? Thank you. Maybe I start with the last question. What we have seen in spring and summer was clearly that among the Lufthansa hubs, after Frankfurt, Zurich was clearly the most robust before Vienna, Munich, and Brussels. There is also clear commitment of the Lufthansa Group, who has obtained state support in Switzerland, that they cannot grow faster at the other hubs compared to Zurich out of that financing agreement. That gives also certain guarantee for Zurich. At the end, the robustness of Zurich is a very strong catchment area here. Even in crisis, one could see that after Frankfurt, Zurich was the clear number two. Swiss announced its result also last week. Of course, when they expect in 2023 somewhere around 85% of the traffic, that they say till that moment, we have to do a certain fleet reduction to react on the reduced demand. It's not planned that they will reduce more capacity than the demand is here, because at the end, they want to maintain their strong position in Zurich and Switzerland as such. Maybe on the question on real estate, how much the portfolio is distributed among various segments. I would say we have a certain real estate portfolio in logistics since we own all the cargo buildings. We have a certain volume in industrial assets, especially with the Priora portfolio and the ones we had before in maintenance and similar facilities, which is quite large in Zurich. Of course, we have the parking business, which you can see out of our annual report. We have the office segment, which has now grown substantially with The Circle and really with absolute prime A tenants at the prime A location. We have the retail, F&B, and hospitality business. I think we have a good distribution among these four major real estate, or five, if you take the parking, between these five major real estate segments. Even within real estate, we have a good diversification among the segments and of course, real estate being a very good diversification against the volatile aviation business. If I understood your first question right, you ask about how these concession adaptations with the government worked in India. In India, of course, there was no adaptation because we don't have traffic there. It's on the Brazil and Chilean assets, our two major investments. In Chile, the concession agreement foresees an extension of the duration of your concession to insulate you against the negative impact of the pandemic. This could be executed. In Brazil, it's on the one hand, the concession allows us to increase the tariffs, which we already did. On the other hand, the payments you have to do to the government have been reduced in that concession. Maybe Lukas to add what I didn't mention. Nothing to add here, but I have a follow-up for the question from Siobhan Lynch from Deutsche Bank regarding the clean results in the international business, my colleagues from Investor Relations just informed me about that you have all Information disclosed in the annex of the presentation in terms of individual turnovers, etcetera. Also this should allow you to calculate this clean revenues. Apologies. Thank you for your answers. Could I just clarify? What I meant in my first question was regarding the MAGs and the rent concessions in Zurich. You mentioned about staggered rents and lease term extension. My understanding was this referred to Zurich, if I understood well. Could I ask you to elaborate a bit on this? Sorry. In Zurich, usually with the retail and S&P operations, we have a certain percentage of the revenue that they have to pay. We do together a business plan, 80% of that business plan has to be guaranteed as a fixed rent. Usually we take the top 20% risk on the turnover ourselves, and then the rest is an insulation on the bottom. Now we had a specific situation with official government closures, which we had to adapt, and the severe situation for the partners. Mainly for 2020, then, we have given partial reduction of the MAG, depending on the situation. For 2021, in general, this MAG is due. Depending on the year, we might have to do some compromises there again. From the years onwards, again, we go back to the normal mechanism. Did that respond better to your question? Yes, understood. Thank you very much. The next question comes from Andrew Lobbenberg from HSBC. Please go ahead. Oh, hi there. Can I just follow up with a small detail on the MAG? Over how long do you depreciate the agreement under the IFRS 16? Another almost trivial detail. I think earlier in the call you mentioned that the 10% discount would end at the end of 2021. I thought it was a 12-month thing. Does it not end in March? A third question, which is going to valiantly try on this question line that was earlier being pushed in some of the questions on the call. With regard to de-leveraging the business and getting to the net debt EBITDA of three times, how much of a hurry are you in? Is it an absolute target to get there really immediately? If you're on a glide path towards it, would you be relaxed and calm? It's all about trying to anticipate how you think about dividends, I suppose. How much pressure, how much tension do you feel, maybe from the rating agencies as well, to get to that three times? I start with your question regarding the depreciation phase for the rent concessions. We already made the first depreciation at the end of this year. On average, it's about five years, if you want to model it. The 10% discount was provided for the financial year 2021, and not on a 12 months tenor, which means that the 10% discount ends at the end of 2021. Your last question, please remind me. How much of a hurry are you in to get to three times the EBITDA, net EBITDA? Exactly. We are not much in a hurry. That's a medium-term target. Considering, as I have elaborated before, that we also want to be an attractive dividend payer for you, and given that we also have a lower, but we still have investments to do going forward. Okay. Thank you. The next question comes from Johannes Braun from Stifel Europe. Please go ahead. Yes. Thank you. Sorry, I just have two things to clarify, which I might have not fully followed. Sorry for that. Firstly, on the dividend again. I think you said that the intention is to resume dividend payments once you return to profits, as long as this does not prevent you from reducing net debt. Does that basically mean that you would pay dividends to the extent they are covered by free cash flow, right? The payout is basically capped by the level of free cash flow. That's the first question. The second question, again on the MAG. Just to double-check on what you have agreed with the partners and what you have not agreed yet. You have agreed to reduce the MAG for 2020? You have agreed on the MAG to be waived during lockdown periods, but you have not yet agreed on the level of the MAG for this year post-lockdowns. Is this correct? Yeah, that's a good summary. Correct. For both of the questions? I'm sorry? For both of the questions or. Oh no, for the last one. On the first one, regarding the dividend. Well, profit defines when we start to become a dividend payer again, and remind you of the past, where we also had this extraordinary dividend, as part of our shareholder remuneration, and that this is not directly linked to free cash flow, but on the other hand, no decisions on that are made at the current date. I think we really have to first come back to profit-making levels and further decisions have to be made by then. The trigger is profit and not generally free cash flow. Once we are back to profit levels, it's not about the sequence, it's about the right balance between the elements in order also to be attractive in terms of dividends. Yeah, understood. Thank you. As a reminder, if you wish to register for a question, please press star and one. Gentlemen, so far there are no more questions. I would like to hand over to Mr. Stefan Weber. Please go ahead. Thank you. We have one more question from the webcast. Vittorio from Alvento has a question on the tariffs. Given that we lower CapEx over the coming years, the regulated asset base will decrease. Assuming sustainable cost savings, full traffic recovery, and a stable WACC, so 5% we have today, what tariff cut should we expect in 2025? Thank you, Vittorio, for this interesting question. I think obviously we do run our business plans and scenario on that important question. To be very honest, it's simply too early to give you guidance on that, given the uncertainty for the short and medium term period. There are no more questions from the webcast. There are no questions from the phone. I conclude the session. Thank you very much. These were very, I think, good and balanced questions for a dialogue in these uncertain times. As I outlined somewhere in the answers, as an infrastructure provider and looking at the long-term drivers, I think maybe we have realized we are still in a volatile business, but we are also in a long-term growth business. Happy to have long-term investors also, and looking forward to our next exchange, hopefully physically again for some back in Zurich. Thank you, and the call is closed. Yep. Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call and thank you for participating in the conference. You may now disconnect your lines. Goodbye.