Aéroports de Paris - 2019 Universal registration document

BUSINESS OVERVIEW 05

DESCRIPTION OF ACTIVITIES BY SEGMENT

shops, and the performance resulting from the airport manager’s retail negotiations, as reflected in rental income. It is calculated as the total sales of airside shops divided by the number of departing passengers (53.9 million passengers in 2019). The recent renegotiations with Société de Distribution Aéroportuaire and Relay@ADP set the new contractual term at 31 December 2022.

◆ leisure and convenience activities: Newsagents, Bookshops, Photo- Video-Sound, Souvenirs, Gifts, Toys and Pharmacies. A joint venture, Relay@ADP, covering part of this scope has been in existence since 4 August 2011, and runs the Newsagents, Bookshops, Convenience and Souvenirs activities. The company is 49%-owned by Aéroports de Paris, 49% by Lagardère Travel Retail, and 2% by Société de Distribution Aéroportuaire. Groupe ADP uses a revenue per passenger indicator (Sales/Pax) to better differentiate retail performance, reflected in the revenue from the airside

2019 34.4

2018

2019/2018

(in euros)

Duty Free zone Duty Paid zone

32.3

+6.5% +6.3% +7.3%

7.9

7.4

TOTAL

19.7

18.4

Strategy relating to retail activity Aéroports de Paris’s commercial strategy is based on four pillars: ◆ two pillars for supply: ◆ a marketing positioning “The Ultimate Parisian shopping and dining experience”, implemented via products (centred on three product families that are emblematic of French know-how: Fragrances & cosmetics, Luxury Fashion and the French Art of Living), the design of retail spaces conceived as Paris shop windows, and service and quality. This strategy is accompanied by an increase in the total area dedicated to shops (bars, restaurants and shops both landside and airside), ◆ a unique business model, with two main types of operations: joint ventures held 50% by Aéroports de Paris and 50% by a specialist in the business in question, and the brands themselves. This business model gives Aéroports de Paris a good level of control over the implementation of its strategy; ◆ two pillars for demand: ◆ stimulating demand, particularly by creating brand recognition upstream of the airport arrival, notably in the key markets (specifically China), ◆ the impact of traffic growth. This strategy has enabled Aéroports de Paris to benefit from consistent growth in revenue per passenger from 2006 to 2015, increasing from €9.8 to €19.7 at end 2015. After a difficult 2016, marked by a sharp decline in tourism in Paris, the growth in Sales/Pax resumed in 2017, with a slight 0.4% increase (strongly penalised by a sharp decline in tobacco sales linked to the implementation of plain packaging in France), as well as in 2018, in spite of major work in the terminals. In 2019, Sales/Pax grew significantly, with growth notably sustained by the traffic, the good momentum of Perfume-Cosmetics and Luxury fashion as well we the progress in the work of Halls K and L of Terminal 2E and at Orly with the opening of the junction. The group has thus built a robust travel retail model for the Paris airports that has met growing competition from the town centre offering and has adapted to an environment that is uncertain in both legislative and economic terms.

In 2019, revenue per passenger airside (Shops & Bars and restaurants) was €19.7. It should be noted that China represents 2.1% of the Group’s total traffic, but 15.4% of revenue from retail activities. Bars and restaurants Aéroports de Paris receives income from the operators of bars and restaurants, essentially based on the revenue from the business in question. For Aéroports de Paris, revenue from retail activities is therefore closely linked to the gross revenue received by these operators. Until 2015, the bars and restaurants were mainly operated by third parties, although Relay@ADP opened a first restaurant unit under the Kayser brand in December 2012. As of 1 February 2016, a joint venture, EPIGO, 50%-owned by Aéroports de Paris and 50%-owned by Select Services Partner (SSP) became the operator for fast food in a number of terminals at Paris-Charles de Gaulle. At Paris-Orly, the bars and restaurant business is managed by several operators. Advertising Advertising at Groupe ADP airports is managed by Média Aéroports de Paris SAS, a French simplified joint stock company created in June 2011 and 50% co-owned by Groupe ADP and 50% by JCDecaux France SAS. The company has been fully consolidated since 2016. The primary function of Média Aéroports de Paris is to operate and market advertising space and, additionally, to run a television network dedicated to passenger/ airport relations, notably at airports operated by Groupe ADP in the Paris region. The governance procedures, and the procedures for excluding the joint partner, are comparable to those applicable to Société de Distribution Aéroportuaire. In addition, shares of the company Média Aéroports de Paris are unalienable until the end of 2022. Banking, foreign exchange, car rentals and other retail activities Aéroports de Paris receives revenue from car rental companies, banking and foreign exchange activities and several for-fee services (luggage wrapping and storage…). Commercial income is based on airport revenues. Rental income comes from leases for non-retail space within the terminals.

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AÉROPORTS DE PARIS ® UNIVERSAL REGISTRATION DOCUMENT 2019

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