Aéroports de Paris - 2019 Universal registration document
RISK AND MANAGEMENT 03 RISK FACTORS
Faced with these risks, Groupe ADP has undertaken numerous actions aimed in particular in France at protecting its infrastructures, especially landside shops, in conjunction with the relevant services from the French State. For example, crisis management exercises are regularly carried out with the latter in order to check the robustness of the system. The international airports have put in place robust security systems. Nevertheless, the Group operates in countries where the geopolitical risk remains high. As a result, this risk is mainly of an external nature. It requires the constant reinforcement of control systems. These measures cannot, however, protect the Group frommalicious acts. Moreover, terrorist attacks carried out in countries where the Group operates could adversely affect their attractiveness and have repercussions on the level of air traffic. This situation could adversely affect the business actity, financial position and outlook of the Group's concerned airports. 1 – D: While in order to reconstitute its free cash flow, Aéroports de Paris plans in particular to make use of external financing, Aéroports de Paris could, in a context of highly volatile markets, enjoy less favourable financial conditions than those it has experienced in the past. Groupe ADP has sufficient cash flow (€1,500million at the end of February 2020) tomeet its current needs (in particular thematurity of a €500million bond on 12 May 2020 and the payment of a dividend of €296.9 million for 2019 proposed at the next General Meeting on 12 May 2020 and payable on 10 June 2020 1 ) and is working to increase its available cash to meet its non-current financial commitments (second tranche of the GMR transaction 2 for around €670 million over the coming months) and the exceptional situation resulting from the current coronavirus epidemic (CoVid 19) 2 . In addition, the government has decided to extend social and tax deadlines in order to support companies. In this regard, Aéroports de Paris plans to resort to external financing in 2020. ADP is rated by Standard and Poors, and its long-term rating has been A+ since 2014 (negative outlook since 26/02/20). The external financing conditions for Aéroports de Paris could, in a context of highly volatile markets, benefit from less favourable financial conditions than those it has experienced in the past. Nevertheless, thanks in particular to the strength of its financial model, Groupe ADP does not anticipate any particular medium- or long-term financing difficulties. 1.2 – Risks related to the development and maintenance of airports’ capacities 1 – E: Groupe ADP is exposed to risks related to mismanagement of large scale projects. As part of its activities, as contracting owner and project manager, the Group is led to conduct infrastructure projects presenting an inherent complexity and requiring important investments and long investigation procedures and regulatory authorizations. Those projects are mainly related to infrastructures and land improvement of the Group’s Île-de- France region platforms, covered by commitments described in the 2016-2020 Economic Regulation Agreement as part of the regulated scope (see section 4.2.2 "Projected Aéroports de Paris’ investment programme between 2016 and 2020, excluding financial investments”
of this Universal Registration Document), and may also include with time other infrastructure projects (as part of the 2021-2025 Economic Regulation Agreement, under ongoing negotiation). The investment program proposed by Groupe ADP amounting for €6 billion on the 2021-2025 period is detailed in section 4.2.4 “Investment programme proposed as part of the negotiations on the 2021-2025 Economic Regulation Agreement” of this Universal Registration Document. Those projects are characterized by a long investment cycle (from the study phase up to commissioning). Hence, unexpected changes in traffic volume and structure, or significant technological changes may lead to the latter being inadequate to the Group’s needs. Furthermore, a saturation of existing infrastructures may occur before the delivery of the new facilities. Lastly, the return on investment could be lower than forecasted, and thus have a negative impact on the Group’s financial position and prospects. Generally, the realization of these projects is subject to a number of technical, industrial, operational, economic, regulatory or environmental risks prone to delay, and even prevent their delivery. The Group has an investment projects steering scheme relying on an Investments strategic committee and an Engagements committee, both chaired by the CEO. Furthermore, the Engineering and land improvement division, formulate, organize and realize investments on infrastructure matters in order to fulfill airport and strategic needs on medium and long term. 1 – F: Groupe ADP must face the issues of the maintenance of its infrastructure. Groupe ADP must make available facilities in good working order for its customers. Given the complexity and density of its physical infrastructure in its Île- de-France region platforms (with a strong increase in reception capacities over the last ten years), the Group is exposed to a obsolescence and value- loss risk of its infrastructure, which may lead to the need of important investments for buildings’ restructuration and renovation. At all of the airports managed by the Group, infrastructure maintenance presents challenges in terms of security, image, customer satisfaction (airlines, passengers), operational effectiveness and relations with the concessionary authority (under the concession specifications). Infrastructure maintenance and investments to address obsolescent facilities is one of the priorities of the “Connect 2020” strategic plan (€1 billion in investments allocated to the Île-de-France region airports) over the 2016-2020 period. The proposed investment programme is detailed in Section 4.2.4 “Investment programme proposed as part of the negotiations on the 2021-2025 Economic Regulation Agreement” of this Universal Registration Document. In France, the Airport operations division is managing the technical policy (on maintenance and obsolescence matters in particular) and the infrastructure information. The state of the Parisian platforms and the resources needed to their maintenance in operational condition are monitored in the Investments strategic committee.
1 For more details, see Chapter 10 - Information concerning trends - Section 10.1. 2 For more details, see Chapter 10 - Information concerning trends - Section 10.2.
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AÉROPORTS DE PARIS ® UNIVERSAL REGISTRATION DOCUMENT 2019
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