TAV AIRPORTS HOLDING. Financial Results of February 2012

Transcription

1 TAV AIRPORTS HOLDING Financial Results of February 2012

2 2 CONTENTS Page # CEO s Message 3 Highlights of Summary Financial and Operational Results 4 Passenger Growth 5 Comparison to Revenues 7 Costs 8 Summary P&L 9 Quarterly Revenues & EBITDAR by Assets 10 Selected Financials by Assets 11 Cash Flow Statement 12 Debt Structure 13 Employee Numbers & FX Sensitivity Analysis 14 FX Exposure of Operations 15 Timeline 16 Notes on Financials 17 IFRIC 12 & Our Adjusted Financials Policy 18 Summary Financials and P&L 19 Balance Sheet 20 Material Event Disclosures in New Tenders Won 25 Concessions Table 26 TAV Group Structure and Shareholder Structure 27 Contacts 28

3 at a Glance CEO s Message Highlights of 2011 In line with our vision for 2011 as a business development year, TAV Airports won two strategic tenders during the year in Izmir and Medinah, resulting in significant inorganic expansion for us. In 2011, our company has not only continued on its ambitious growth path but has also proven the strength of its brand name through its financial performance once again. I am most pleased to announce that we are going to crown this performance by proposing a cash dividend of 0.25 TL per share to our General Assembly. As this will be the first dividend our company would distribute, it will truly be a landmark in our history by demonstrating that we have struck the optimum balance between growth and investor return at the same time. A balance which we like to call smart growth... TAV Airports Holding continued to deliver a strong financial and operational performance in 2011, on continued strong passenger growth. Airports Council International (ACI) reported 4.9% growth in passenger traffic worldwide for 2011 compared to the previous year, fueled by 3% real growth in world Gross Domestic Product (GDP) and strong demand for air travel. TAV Airports realized 11% growth in passenger numbers y-o-y, reaching 53 million, despite a 42% decrease in Tunisian airports. This was reflected in 12% increase in consolidated revenues to 881 million and 21% growth in EBITDA to 257 million (with 2.2 percentage points improvement in EBITDA margin) compared to Robust free cash flow generation continued, which amounted to 250 million. While achiving these record levels of financial performance in our history we also managed to reduce our net debt to 792 million by the end of December 2011, despite capital expenditures of 106 million. TAV Airports continues to grow as a success story in the infrastructure industry. Considering our benefit to the economy solidified through our net profit, 13% increase in workforce and continuing investments, it is obvious that we continue to set a best practice example in effective communication between employees and analytic management. Consolidated revenue of 881m (+12% vs 2010) Double digit increase in revenues, in line with passenger growth of 11% Consolidated EBITDA of 257m (+21% vs 2010) EBITDA growth outpaced revenue growth Net profit of 53m (+6% vs 2010) The growth is eye-catching, considering FX loss and deferred tax expense in 2011 Free cash flow: 250m (+15% vs 2010) Robust free cash flow generation Capex for 2011 of 106m compared with 119m for 2010 Macedonia investment was finalised in 2011 Net debt 792m (-4% vs 31 December 2010) Decline in net debt continued, thanks to strong cash flow generation Passengers served 53m (+11% vs 2010) TAV realized robust growth in 2011, despite 42% drop in Tunisia First time cash dividend proposal of TRL 0.25 per share I would like to thank all TAV Group employees who are our principal asset in this business, our passengers and our shareholders for their invaluable contributions. Dr. M.Sani Şener Member of Board of Directors President & CEO

4 4 Summary Financial and Operational Results ( m, unless stated otherwise)* y-o-y Revenues** % EBITDA** % EBITDA** margin (%) 29.2% 27.0% 2.2 ppt EBITDAR** % EBITDAR** margin 43.9% 43.5% 0.3 ppt FX Gain (Loss) (5.0) 6.2 nm Deferred Tax Income (Expense) (3.7) 21.5 nm Net Income (Loss) % Cash flow from operations % Capex (106) (119) -11% Free Cash Flow % Shareholders Equity % Net Debt % Average number of employees 19,838 17,535 13% Number of passengers (mn) % - International % - Domestic % Duty free spend per pax ( )*** % * Construction revenue and construction expenditure are excluded while computing the operational performance in the table. ** Figures are adjusted by including guaranteed passenger fee revenues from airports in Ankara and Izmir Source: TAV Airports Holding, DHMI, TAV Tunisie, TAV Macedonia, Georgian Aviation Authority Revenues increased by 12% to 881 million in 2011 from 785 million in 2010, on the back of strong organic and inorganic growth. In 2011, passengers served at the existing airports increased by 11%, while the number of aircrafts served by Havaş, TGS and Havaş Europe increased by 14% YoY. EBITDA surged by 21% to 257 million in 2011 from 212 million in 2010, implying respective 29.2% and 27.0% margins in 2011 and Superb performance of ground handling and duty free operations supported EBITDA growth, with 2.2 ppt improvement in EBITDA margin. EBITDAR rose by 13% to 387million in 2011, fell short the growth in EBITDA, mainly due to flat concession rent expense. On the back of strong operational performance, the bottom line (net profit attributable to owners of the company) came in 6% higher in 2011 at 52.8 million in 2011 versus 49.8m in 2010, against an increase in finance costs ( 5.0 million foreign exchange loss in 2011 vs 6.2 million foreign exchange gain in 2010) and deferred tax expenses ( 4 million deferred tax expense in 2011 vs 22 million deferred tax income in 2010). Consolidated net debt came at 792 million at end of December 2011, versus 832 million at end of September 2011, thanks to cash flow generation. Free cash flow (net cash provided from / (used in) operating activities capex) amounted 250 million in 2011, compared to 217 million in 2010.

5 5 Passenger Growth The number of passengers using airports operated by TAV increased by 11% to 53 million in The number of international passengers served by TAV Istanbul soared in 2011 and reached 24 million, increasing by 17% YoY. Atatürk Airport International Pax 23.8 m 20.3m 18.4 m January-December Passengers Change % Ataturk Airport % International % Domestic % Esenboga Airport % International % Domestic % Izmir Airport % Tunisia (Monastir&Enfidha) % Georgia (Tbilisi&Batumi) % Maceonia (Skopje&Ohrid) % TAV TOTAL % International % Domestic % January-December Air Traffic Movements Change % Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Ataturk Airport % International % Domestic % Esenboga Airport % International % Domestic % Izmir Airport % Tunisia (Monastir&Enfidha) % Georgia (Tbilisi&Batumi) % Macedonia (Skopje&Ohrid) % TAV TOTAL % International % Domestic %

6 Aeronautical Revenue 6 Comparison to 2010 Revenue EBITDA OPEX Duty-free Aviation Ground-handling F&B Other Istanbul Other Airports ATU BTA HAVAŞ Other Services Personnel Concession Rent Other Duty-free D&A Services Rendered 16% 18% 6% 6% 22% 19% 13% 12% 2% 3% 8% 7% 24% 27% 15% 11% 9% 3% 3% 9% 7% 16% 10% 9% 24% 26% 19% 21% 53% 51% 33% 31% 34% 35% Revenue EBITDA Net Profit / Loss % % 53 6%

7 7 Revenues ( mn) Change (%) Sales of duty free goods % Aviation income % Ground handling income % Commission from duty free sales % Catering services income % Other operating income % Total operating revenue % Adjusted revenues increased by 12% to 881 million in 2011 from 785 million in 2010, on the back of strong organic and inorganic growth. In 2011, passengers served at the existing airports increased by 11%, while the number of aircrafts served by Havaş, TGS and Havaş Europe increased by 14% YoY. Commission from sales of duty free goods increased by 12% from 78 million in 2010 to 87 million in Catering service income, mainly denominated in TL, increased by 8%, from 48 million in 2010 to 52 million in 2011, on the back of inorganic growth from BTA IDO. Other operating income decreased by 2% from 140 million in 2010 to 137 million in This decrease primarily reflected the exclusion of one-off insurance income ( 9.7 million) recorded in 2010, stemming from the trigeneration plant in Istanbul. Ground handling income surged by 26% to 192 million in 2011 from 152 million in The number of aircrafts served by HAVAŞ, TGS, Havaş Europe increased by 14% YoY to 308K. Ground handling income outpaced the growth in number of flights served, thanks to favorable pricing developments at TGS. Aviation income (excluding ground handling income) amounted 211 million in 2011, versus 202 million in 2010 (+5% yoy). The growth in passenger number (+11%) outpaced the growth in aviation income, mainly due to c. 5% appreciation of the Euro against the US$ in 2011 compared to Note that Istanbul international passenger fee (US$15) and Georgia passenger fee (US$22) are set in US$ terms, while the financials are presented in Euros. As a separate note, in IFRIC 12 application, total guaranteed passenger fee revenues from Ankara Esenboga Airport ( 15.9 million) and Izmir Adnan Menderes Airport ( 17.6 million) in FY11 are excluded from the IFRS P&L. However we included these revenues in aviation revenues throughout our announcement and presentations. # of Flights Served ( 000) % 269 Sales of duty free goods increased by 22% from 166 million in 2010 to 203 million in 2011 on the back of strong international passenger growth and alleviations of the customs limits in September Commencement of operations in Riga International Airport, contributing around 14 million duty free revenue in 2011, was another factor for the increase in duty free revenues. Average per passenger spending increased by 3% YoY from 14.5 in 2010 to 14.9 in 2011, against the dilutive impact of the increase in transfer traffic. Duty free expenditure per passenger at Istanbul Ataturk Airport grew by 2% from 16.3 in 2010 to 16.6 in 2011, against the 28% increase in international transfer passenger traffic. 21% 7% % HAVAŞ TGS NHS HAVAŞ + TGS + NHS

8 8 Costs ( million) Change (%) Cost of catering inventory sold (17.7) (16.5) 7% Cost of duty free inventory sold (77.3) (64.9) 19% Cost of services rendered (59.7) (42.1) 42% Personnel expenses (236.1) (219.3) 8% Concession rent expenses (129.4) (129.6) 0% Istanbul (122.6) (117.3) 5% Tunisia (4.3) (10.3) -58% Macedonia (2.5) (2.1) 19% Depreciation & amortisation expenses (65.1) (59.5) 9% Other operating expenses (103.6) (100.4) 3% Total Operating Expenses (689.1) (632.4) 9% Operating expenses increased by 9% from 632 million in 2010 to 689 million in This was primarily the result of increase in cost of services rendered and cost of duty free inventory sold. Concession and rent expenses remained unchanged at 129 million in Rent expenses principally consist of payments to DHMI under the terms of the Istanbul Ataturk Airport lease agreement and renovation of the domestic terminal ( 123 million in 2011). Concession expenses consist of payment made to Tunisian Airports and Civil Aviation Authority (OACA) and payments made to Macedonian Ministry of Transportation and Communication. While the rent payment of Istanbul Ataturk Airport is made in USD terms at the beginning of each year, due to amortization schedule of the payment, Istanbul Ataturk Airport s rent increased by 5% from 117 million in 2010 to 123 million in The 12-month inclusion of the concession expense (15% of revenue) for Macedonian airports vs 10-month inclusion in 2010 was the major reason for the 19% increase in Macedonia concession expense. In Tunisia, based on the negotiations with OACA, the concession fee for 2011 is reduced by 4.6 million. Cost of duty-free inventory sold increased by 19% to 77 million in 2011 compared with 22% growth in duty-free sales, as cost of inventory sold as a % of duty-free revenues decreased on a year-on-year basis. Cost of catering inventory sold increased by 7% in 2011 to come in at 18 million in 2011 slightly lower than catering revenue growth at 8%. Personnel expense increased by 8% from 219million in 2010 to 236 million in 2011, with new operations and 13% YoY increase in the average number of employees in Against new operations added to portfolio and high growth in labor-intensive ground handling segment, the share of personnel expenses in total operating revenues declined by 1.1 percentage points to 26.8% in Cost of services rendered increased by 42% from 42 million in 2010 to 60 million in Cost of services rendered principally consists of Havaş operating expenses and also includes some costs of BTA, TAV O&M, TAV Latvia. Depreciation and amortization expense rose by 9% from 60 million in 2010 to 65 million in 2011, mainly due to new operations. Other operating expenses increased by 3% to 104 million in TAV booked one-off provision expense of c 5 million in 2011, while the impairment loss on property and equipment stemming from the trigeneration plant in Istanbul of around 6.6 million recorded in 2010 was one-off, as well.

9 9 Summary P&L ( million) y-o-y Operating profit * % EBITDA** % EBITDA margin 29.2% 27.0% 2,2 ppt EBITDAR*** % EBITDAR margin 43.9% 43.5% 0,3 ppt * ignoring net effect of construction revenue and construction expenditure ** profit (loss) adjusted for income taxes, finance income and expenses and depreciation & amortization expense *** EBITDA before concession rent payment Note: Adjusted figures include guaranteed passenger fee revenues from airports in Ankara and Izmir ( million) Change Finance income % Finance costs (96.1) (89.2) 8% FX gain/loss (5.0) 6.2 nm Net finance income/(expense) (67.0) (57.3) 17% Profit/(Loss) before income tax % Income tax expense (39.8) (11.8) 236% Profit/(Loss) for the period % Attributable to Equity holders of the Company % Non-controlling interest (0.9) 1.9 nm Income Tax ( million) Change Current period tax expense (36.1) (33.3) 8% Deferred tax (income) / expense (3.7) 21.5 nm Tax income/(expense) (39.8) (11.8) nm Operating profit (ignoring net effect of construction revenue and construction expenditure) increased from 153 million in 2010 to 192 million in EBITDA, which we define as profit (loss) adjusted for income taxes, finance income and expenses and depreciation & amortisation expense, surged by 21% and amounted 257 million in 2011 versus 212 million in EBITDA margin improved by 2.2 percentage points in 2011 and reached 29.2%. EBITDAR, which we define as EBITDA before concession rent payment, increased by 13% from 342 million in 2010 to 387 million in Net finance expenses amounted 67 million in 2011, compared with 57 million in 2010 due mostly to the reversal of the FX gain of 6.2 million in 2010 to 5 million FX loss in The voluntary prepayment of a 24 million loan for which we partially unwound the existing Interest Rate Swap (IRS), which resulted in a one-off IRS unwind cost of around 5 million in the first quarter of 2011 was another reason for this. In the final quarter of 2010, TAV Istanbul terminated the cross currency swap and new cross currency swaps were signed, which was supportive for the FX gain. Income tax benefit /(expense) consists of deferred tax and corporate taxes. Current period tax expense was 36 million in 2011, compared with 33 million in This figure includes 2.9 million tax expense booked in the second quarter of 2011, as some subisidiaries of TAV obtained benefits from tax amnesty within the context of Law no Note that, analysing the effective tax rate on a consolidated basis is not meaningful for holding companies like TAV, as the tax payments are based on subsidiaries pre-tax local GAAP accounts and since there may also be loss making subsidiaries. In 2010, TAV had recorded 22 million deferred tax income. However, in 2011 TAV booked 4 million as deferred tax expense, mainly due to the reversal of tax loss carry forwards. All in all, total income tax expense amounted 40 million in 2011 versus 12 million in 2010, mainly due to deferred taxes. Net income attributable to owners of the company in 2011 was realized as 52.8 million compared to a net income of 49.8 million in 2010 according to IFRS financial statements. Non-controlling interest reflects the allocation of profit / losses held by the non-controlling interest and amounted -1 million in 2011.

10 10 Quarterly Revenues & EBITDAR by Assets Revenues * m 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 Airports Istanbul Ankara Izmir Tunisia Gazipasa Georgia Macedonia Services Havas ATU (50%) BTA Other Total Eliminations Consolidated Revenue EBITDAR * m 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 Airports Istanbul Ankara Izmir Tunisia Gazipasa Georgia Macedonia Services Havas ATU (50%) BTA Other Total Eliminations EBITDAR Total Guaranteed passenger fee revenues from Ankara from Izmir 1.7 3,7 7,3 4, Total Concession expense Istanbul Tunisia Macedonia * Figures are adjusted by including guaranteed passenger fee revenues from airports in Ankara and Izmir and excluding construction income and expenses

11 11 Selected Financials by Assets m EBITDA EBITDA Revenues Margin (%) Net Debt Airports % 671 Istanbul % 114 Ankara % 104 Izmir (including TAV Ege) % 3 Tunisia % 358 Gazipasa 0 (1) nm 17 Georgia % 15 Macedonia % 61 Services % 121 ATU (50%) % 15 BTA % (3) Havas % 57 Others 66 (2) nm 51 Total % 792 Elimination (169) (1) - Consolidated % 792 Revenue ( m) Chg% Airports % Istanbul % Ankara % Izmir (including TAV Ege) % Tunisia % Gazipasa 0 0 n.m Georgia % Macedonia % Services % ATU (50%) % BTA % Havas % Others % Total % Elimination (169) (155) 9% Consolidated % EBITDA Bridge ( m) EBITDA 25.2 Istanbul 8.8 Havas 5.8 ATU (50%) 4.4 Ankara 4.0 Other 2, ,2-0,5-1,2 BTA Macedonia Gazipasa Georgia Izmir -6,1 Tunisia 257, EBITDA EBITDA ( m) Chg% Airports % Istanbul % Ankara % Izmir (including TAV Ege) % Tunisia % Gazipasa (1) (1) n.m. Georgia % Macedonia % Services % ATU (50%) % BTA % Havas % Others (2) (5) -63% Total % Elimination (1) (2) -66% Consolidated %

12 12 Cash Flow Statement CASH FLOWS FROM OPERATING ACTIVITIES Profit for the period Adjustments for: Amortisation of airport operation right Depreciation of property and equipment Amortisation of intangible assets Amortisation of prepaid concession rent Provision for employment termination benefits Provision set for doubtful receivables Other provisions released Discount on receivables and payables, net Impairment of property and equipment 6.6 Gain on sale of property and equipment Provision set for unused vacation Provision set / (released) for slow moving inventory Accrued insurance income -6.9 Interest income Interest expense on financial liabilities Income tax expense Discount income from concession receivable Unrealised foreign exchange differences on statement of financial position items Cash flows from operating activities Change in trade receivables Change in non-current trade receivables Change in inventories Change in due from related parties Change in restricted bank balances Change in other receivables and current assets Change in trade payables Change in due to related parties Change in other payables and provisions Change in other long term assets 8.3 Additions to prepaid concession expenses Cash provided from operations Income taxes paid Interest paid Retirement benefits paid Net cash provided from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Interest received Proceeds from sale of property and equipment and intangible assets Proceeds from sale of non-controlling interest in a subsidiary Acquisition of property and equipment Additions to airport operation right Acquisition of non-controlling interest -9.2 Acquisition of subsidiary net of cash acquired -3.2 Acquisition of intangible assets Net cash provided from / (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES New borrowings raised Repayment of borrowings Change in restricted bank balances Non-controlling interest change Change in finance lease liabilities Net cash (used in) / provided from financing activities ( million) Cash flow provided operating activities Capex for property and equipment (43.5) (79.8) - Capex for investment in airport (61.1) operation right (38.0) - Capex for intangible assets (1.2) (1.0) Free Cash Flow (FCF) NET (DECREASE) / INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT 1 JANUARY CASH AND CASH EQUIVALENTS AT 30 SEPTEMBER In 2011, TAV used 94 million net cash in investing activities, mainly due to the 106 million capex TAV had undertaken (Macedonia: 61 million). In 2010, TAV had generated 36 million cash from investing activities, on the back of 142 million cash proceeds from Havas and TAV Tunisie stake sales. Net Cash flow from financing activities is mainly related to bank loans and project finance loans and the associated repayments. In 2011, TAV used 215 million of cash from financing activities, which principally included the project finance facility of TAV Macedonia. In 2010, HAVAŞ Holding signed a loan agreement of around 60 million to purchase HAVAŞ from TAV Airports. On the other hand, TAV Holding reduced its indebtedness with HAVAŞ sale proceeds, repaying its loans. Free cash flow (net cash provided from operating activities capex) was realized as 250 million in 2011 versus 217 million in 2010, mainly due to stronger cash flow from operations. Note that TAV undertook 106 million capex in 2011 versus 119 million capex in 2010.

13 13 Debt Structure Net Debt (eop mn) December 2011 September 2011 December 2010 Airports Istanbul Ankara Izmir Tunisia Gazipasa Georgia Macedonia Services ATU (50%) BTA (3) (5) (3) Havas Others Total Net Debt In 2011, TAV Macedonia raised 70 million loan mainly for the construction of the airports. Consolidated net debt came in at 792 million at end of December 2011 versus 832 million at end of September ( million) 2011 % 2010 % On demand or within one year % % In the second year % % In the third year % % In the fourth year % 117 9% In the fifth year % % After five years % % % %

14 14 Employee Numbers & FX Sensitivity Analysis Number of Employees (eop) Chg 9M11 Chg TAV ISTANBUL TAV ESENBOĞA TAV İZMİR TAV TUNISIE TAV GAZİPAŞA TAV Georgia TAV Macedonia HAVAŞ ATÜ BTA TAV HOLDING TAV O&M TAV IT TAV Security TAV Latvia TOTAL Sensitivity Analysis Equity Profit or loss Strengthening Weakening Strengthening Weakening of EUR of EUR of EUR of EUR 31 December 2011 USD ( ) ( ) TRL - - ( ) Other - - ( ) Total ( ) ( ) December 2010 USD ( ) ( ) TRL - - ( ) Other - - ( ) Total ( ) ( ) A 10 percent strengthening/weakening of the EUR against the following currencies at 30 December 2011 and 31 December 2010 would have increased/(decreased) equity and profit/loss by the amounts shown to the left. This analysis assumes that all other variables, in particular interest rates, remain constant. Based on the Group s current borrowing profile, a 50 basis points increase in Euribor or Libor would have resulted in additional interest expense of approximately EUR 1.0 million on the Group s variable rate debt when ignoring effect of derivative financial instruments. EUR 0.9 million of the exposure is hedged through interest rate swap contracts. Therefore, the net exposure on statement of comprehensive income would be EUR 0.1 million. A 50 basis points increase in Euribor or Libor would have resulted an increase in cash flow hedge reserve in equity approximately by EUR 27.9 million and a 50 basis points decrease in Euribor or Libor would have resulted a decrease in cash flow hedge reserve in equity approximately by EUR 24.4 million.

15 15 FX Exposure of Operations 56m Revenues (1) Opex (1) (2) Other; 53m Other; 5% USD; 6% USD; 16% 164m 17% 149m 349m TL; 33% 1,050m 858m EUR; 46% TL; 43% EUR; 33% 481m 372m 284m Concession Rent Expense Gross Debt 7m EUR; 5% 18m TL; 1% USD; 3% 36m 129m 1,238m USD; 95% 123m EUR; 96% 1184m (1) Combined figures, pre-eliminations. (2) Includes concession rent expenses ( 129m) and depreciation ( 65m)

16 16 Timeline Q1 Sold 28.3% of Havaş to HSBC and 6.7% to İş PE, TAV started to deduct minority interest for HAVAŞ TAV Macedonia took over the operations at Skopje & Ohrid airports and started construction works TGS started operations at five airports Started to charge 2.5 for international to international departing transfer passengers at Istanbul Atatürk Airport Temporary closure of the third runway, between March end of June 2010 Q2 18% of TAV Tunisie sold to PAIDF, no gains were booked Volcanic ash eruption in Iceland Havaş acquired 50% of Havaş Europe Insurance income of 7.9m and impairment loss of 6.6m was booked for the damage occured on the generators of the Trigeneration plant of TAV Istanbul Q3 Customs law amended to alleviate restrictions BTA took over catering operations in Istanbul Atatürk Airport domestic terminal TGS started operations in Sabiha Gökçen Airport TAV Passport launched by TAV O&M Holding incurred c. 5m one-off consultancy expense mainly due to projects followed Q4 Increased shareholding in TAV IT from 97% to 99% TAV Istanbul terminated cross-currency swap and two new cross currency contracts were signed, TAV booked a one-off FX gain TGS fee restructuring in 2010 resulted in negative EBITDA of 7.7m in 4Q10 Q1 Tunisian civil unrest started TAV Latvia took over the duty free operations in Riga International Airport Increased shareholding in TAV Security from 67% to 100% Q2 Increased shareholding in TAV Urban Georgia from 66% to 76% Increased shareholding in TAV Batumi from 60% to 76% Adjustments incurred within the context of the tax amnesty legislation ( 2.9m one-off expense) Q3 Skopje Airport construction finalized BTA IDO established and the multistage takeover of the catering operations in IDO ferries initiated One-off provision of c 5m (KTHY) THY CIP Lounge operations at Istanbul Atatürk Airport International terminal ended Q4 Tunisian elections took place Increased shareholding in Havas Europe from 50% to 67% Izmir Adnan Menderes Airport International and domestic tender won, TAV Ege was established, 12m paid as rent advance

17 17 Notes on Financials Basis of Consolidation The attached consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards ( IFRS ). Although the currency of the country in which the Group is domiciled is Turkish Lira (TRL), most of the Group entities functional currency and reporting currency is EUR. Each entity is consolidated as follows: Summary Consolidation Table Name of Subsidiary Consolidation % Stake Consolidation % Stake TAV İstanbul Full - No Minority 100 Full - No Minority 100 TAV Esenboğa Full - No Minority 100 Full - No Minority 100 TAV İzmir Full - No Minority 100 Full - No Minority 100 TAV Ege Full - No Minority TAV Gazipaşa Full - No Minority 100 Full - No Minority 100 TAV Tunisia Full - With Minority 67 Full - With Minority 67 TAV Urban Georgia (Tbilisi) Full - With Minority 76 Full - With Minority 66 TAV Batumi Full - With Minority 76 Full - With Minority 60 TAV Macedonia Full - No Minority 100 Full - No Minority 100 TAV Latvia Full - No Minority 100 Full - No Minority 100 HAVAŞ Full - With Minority 65 Full - With Minority 65 BTA Full - With Minority 67 Full - With Minority 67 TAV O&M Full - No Minority 100 Full - No Minority 100 TAV IT Full - With Minority 99 Full - With Minority 99 TAV Security Full - No Minority 100 Full - With Minority 67 Havaş Europe (NHS) Full - With Minority 67 Proportionate 50 ATÜ Proportionate 50 Proportionate 50 TGS Proportionate 50 Proportionate 50 BTA Denizyollari (IDO) Proportionate FX Rates Average Rate 31 December 31 December EUR/USD EUR/TRL EUR/GEL EUR/MKD EUR/TND EUR/SEK Hedging Subsidiaries, TAV Istanbul, TAV Esenboga, TAV Izmir, Havaş, TAV Macedonia and TAV Tunisie enter into swap transactions in order to diminish exposure to foreign currency mismatch relating to DHMI installments and interest rate risk to manage exposure to the floating interest rates relating to loans used. 100%, 49%, 100%, 50%, 100% and 85% of floating bank loans for TAV Istanbul, TAV Izmir, TAV Esenboga, HAVAŞ and TAV Macedonia and TAV Tunisia respectively are fixed with financial derivatives. Changes in the fair value of the derivative hedging instrument designated as a cash flow hedge are recognized directly in equity to the extent that the hedge is effective. To the extent that the hedge is ineffective, changes in fair value are recognized in profit or loss.

18 İzmir Ankara 18 IFRIC 12 & Our Adjusted Financials Policy IFRIC 12- is an accounting application treating BOT assets with special provisions for guaranteed income. Ankara Esenboga Airport and Izmir Adnan Menderes Airport International Terminal, with their guaranteed passenger fee structures, fall under the scope. The capex we incur on our BOT assets, is routinely booked as airport operation right in the balance sheet. However when there are guaranteed passenger fees in question, these fees are discounted to their NPV and subtracted from the airport operation right of the BOT in question. The remaining capex amount gets booked as airport operation right and the NPV of guaranteed passenger fees gets booked as trade receivables. When the guaranteed passenger fees become earned during the course of operations, these are credited from the balance sheet and the difference between discounted (NPV of) guaranteed passenger fees and the actual fees as they are earned are booked as finance income. Due to the application of IFRIC 12, guaranteed passenger fees stop being P&L items and get treated as Balance Sheet/Cash Flow items, while at the same time, part of these fees gets shown as finance income. This unduely decreases aviation income and increases finance income and distorts our P&L. To adjust for the distortion we add back guaranteed passenger fees while reporting our adjusted revenues. On the other hand the capex incurred during the construction phase is immediately transferred to P&L with an offsetting construction income assigned to it. This income may or may not carry a mark-up on it. Since this method of booking also distorts both the P&L and the Balance Sheet we adjust our financials to disregard the effects of both construction expense and construction income. IFRIC 12 Booking Model 1. During Construction BS BS BS Construction in progress PL Construction Expense 2. Completion of Construction BS BS (NPV of) Passenger Revenue Receivable (Trade Receivables) BS Airport Operation Right * 3. Operations During Year DebitCredit Debt Cash Construction Income Construction in progress PL Aviation Income for the Current Year ** BS Cash ** 4. Year Close PL Aviation Income for the Current Year *** PL BS PL Amortisation of Airport Operation Right BS * AOR = Construction in progress- (NPV of ) Passenger Revenue Receivable ** TR-GAAP ***IFRS (IFRIC 12 application) ****Discounted guaranteed passenger revenues for that period Finance Income (Difference between discounted receivables and the actual receivables) Passenger Revenue Receivable**** Accumulated Amortisation of Airport Operation Right Guaranteed Pax Structure International Departing Pax (m) Guaranteed Pax Income ( m) Domestic Departing Pax (m) Guaranteed Pax Income ( m) International Departing Pax (m) Guaranteed Pax Income ( m)

19 19 Summary Financials and P&L TAV Airports Holding Selected Financials (Amounts expressed in mn Euro) Other Financial Data: Adjusted EBITDA * 257,1 212,2 Adjusted EBITDAR * 386,6 341,8 Summary Cash Flow Data: Net cash provided by (used in): Operating activities 355,5 336,3 Investing activities (93,6) 35,9 Financing activities (215,1) (374,2) Summary Balance Sheet Data: Cash and cash equivalents Restricted bank balances Total assets Bank loans Total liabilities Total equity Net debt * Ignoring net effect of construction revenue and construction expenditure and including guaranteed passenger revenues from airports in Ankara and Izmir TAV Airports Holding Selected Financials (Amounts expressed in mn Euro) Construction revenue 64,7 41,6 Total operating income 811,9 713,3 Sales of duty free goods 191,9 152,0 Aviation income 177,5 169,7 Ground handling income 202,7 165,8 Commission from sales of duty free goods 87,2 77,8 Catering services income 51,6 47,8 Other operating income 35,8 39,6 Construction expenditure (64,7) (41,4) Operating expenses (689,1) (632,4) Cost of catering inventory sold (17,7) (16,5) Cost of duty free inventory sold (77,3) (64,9) Cost of services rendered (59,7) (42,1) Personnel expenses (236,1) (219,3) Concession rent expenses (129,4) (129,6) Depreciation and amortization expense (65,1) (59,5) Other operating expenses (103,6) (100,4) Operating profit 158,6 120,8 Finance income 29,1 31,9 Finance expenses (96,1) (89,2) Profit before income tax 91,6 63,5 Income tax expense (39,8) (11,8) Profit for the period from continuing operations Attributable to: Owners of the Company 52,8 49,8 Non-controlling interest (0,9) 1,9 Profit for the year 51,8 51,6

20 20 Balance Sheet million ASSETS Property and equipment Intangible assets Airport operation rights Other investments 0 0 Goodwill Prepaid concession expenses Trade receivables Other non-current assets 1 1 Deferred tax assets Total non-current assets million EQUITY Share capital Share premium Legal reserves Other reserves 8 15 Revaluation surplus 2 2 Purchase of shares of entities under common control Cash flow hedge reserve Translation reserves -1 1 Retained earnings / (Accumulated losses) Total equity attributable to equity holders of the Company Non-controlling interest Inventories Prepaid concession expenses Trade receivables Due from related parties 8 5 Derivative financial instruments 4 0 Other receivables and current assets Cash and cash equivalents Restricted bank balances Total current assets TOTAL ASSETS TOTAL EQUITY LIABILITIES Loans and borrowings Reserve for employee severance indemnity 10 7 Due to related parties 8 14 Deferred income Deferred tax liabilities 6 6 Total non-current liabilities Bank overdraft 0 3 Loans and borrowings Trade payables Due to related parties Derivative financial instruments Current tax liabilities Other payables Provisions 6 5 Deferred income 11 7 Total current liabilities Total Liabilities TOTAL EQUITY AND LIABILITIES

21 21 Material Event Disclosures in , Establishment of two companies in Saudi Arabia The Board of our Company has decided to establish a limited liability company named Tibah Airport Development Company or under such other name to be approved by the Ministry of Commerce in Saudi Arabia, provided that the New Company shall be headquartered in the City of Medinah, Kingdom of Saudi Arabia. Our Company shall have equal shares with Al Rajhi Holding Group CJSC and Saudi Oger Limited in the capital (SR 99,000 - Saudi Riyals ninety nine thousand) of the New Company. The Board of our Company has decided to establish a limited liability company named Tibah Airport Operations Company or under such other name to be approved by the Ministry of Commerce in Saudi Arabia, provided that the New Company shall be headquartered in the City of Medinah, Kingdom of Saudi Arabia. Our Company shall have 51% (fifty one per cent), Al Rajhi Group CJSC shall have 24.5% (twenty four and a half per cent) and Saudi Oger Limited shall have 24.5% (twenty four and a half per cent) shares in the capital (SR 100,000 -Saudi Riyals hundred thousand) of the New Company , North Hub Services TAV Airports Subsidiary (65%) HAVAS has increased its shareholding in North Hub Services ( NHS ) from 50% to 66.7%. NHS, which provides ground handling services in Latvia Riga, Sweden Stockholm and Finland Helsinki airports will operate under the trademark of Havas Europe henceforth , Cukurova Airport Tender TAV Airports Holding Board of Directors has decided not to bid in the Çukurova Regional Airport tender to be held by the State Airports Authority (DHMI) on December 15, , Signing of Izmir Adnan Menderes Airport leasing contract We had announced on that the tender held by the General Directorate of State Airports Authority (DHMI) for leasing the operating rights of Izmir Adnan Menderes Airport Current International Terminal, CIP, Domestic Terminal and auxiliary structures had been awarded to TAV Airports Holding Inc. A new company has been established and registered under the name of TAV Ege Terminal Yatırım Yapım ve İşletme A.Ş. in order to conduct the operations of Izmir Adnan Menderes Airport current International Terminal, CIP, Domestic Terminal and auxiliary structures through leasing. TAV Airports Holding Inc. holds 100% shares of the company which has a capital of 1,000,000 TL. The leasing contract for granting the operational rights by leasing has been signed between the recently established TAV Ege Terminal Yatırım Yapım ve İşletme A.Ş. and DHMI. A concession fee of 610 million Euros shall be paid to DHMI excluding VAT for the airport operating rights until the end of 2032.

22 22 Material Event Disclosures in , Cukurova Airport Tender Our Company is planning to bid independently for the Built-Operate-Transfer (BOT) tender for Cukurova Regional Airport (a greenfield airport project, located between Adana and Mersin), to be held on 15 December 2011 by the General Directorate of State Airports Authority (DHMI) , TAV Airports Wins Izmir A. Menderes Airport Tender TAV Airports has won the tender held by the General Directorate of State Airports Authority (DHMI) for the leasing of the operating rights of the Izmir Adnan Menderes Airport existing International Terminal, CIP, Domestic Terminal and the auxiliary structures, as the highest bidder. As per the tender specifications, our Company, already having the operating rights of Izmir Adnan Menderes Airport International Terminal until 2015, shall maintain these operating rights until the end of 2032, as the winning party. The capacity of the current 28,500 square meters Izmir Adnan Menderes Airport Domestic Terminal is to be increased to 204,500 square meters with the new terminal building planned to be completed by 2015, and the total investment amount is estimated to be at the level of around 250 million Euros. The construction of the new terminal building is planned to be commenced in Until the new terminal building is completed, it is planned that services for both domestic and international terminal passengers shall continue through the existing international terminal building. The service charges per passenger have been determined as 15 Euros for outgoing international passengers and 3 Euros for outgoing domestic passengers throughout the operation period. 610 million Euros (VAT excluded) shall be paid as the total concession lease amount to DHMI for the entirety of the operating period until , İzmir Adnan Menderes Airport Tender Our Company is planning to bid independently for the tender for the operating rights of the Izmir Adnan Menderes Airport Existing International Terminal, CIP, Domestic Terminal and the auxiliaries by leasing to be held on 17 November 2011 by the General Directorate of State Airports Authority (DHMI) , Signing of Medinah BTO contract We had declared in our Material Event Disclosure dated August 8, 2011, that the consortium constituted by our company, Al Rajhi Holding Group and Saudi Oger Ltd. was named as the best bidder in the tender held by the Civil Aviation General Directorate (GACA) of the Kingdom of Saudi Arabia for an operation of 25 years for the Medina International Airport. The contract for the operation of the Medina International Airport as per the Build Transfer Operate model was signed on October 29, 2011 between the consortium and GACA. The capacity of the current 4 million yearly capacity of the Medina Airport is to be increased to a capacity of 8 million passengers per year with the new terminal to be constructed by the first half of 2015, and the total investment amount is contemplated to be at the level of billion USD. It is planned to take over the airport as it is, and commence the construction of the new terminal building during the first half of Until the new terminal building is completed, services shall continue through the existing terminal building. The service charges per passenger have been determined as 80 SAR (approximately 22 USD) both for incoming and outgoing international passengers, throughout the operation period. 54.5% of the annual turnover of the Medina Airport shall be paid as the concession lease amount to the local administration throughout the airport operation rights to continue until the first half of 2037.

23 23 Material Event Disclosures in , Corporate Governance Rating (2011) The periodic revision of the Corporate Governance Rating Report has been completed by ISS Corporate Services, an international rating organization officially authorized to rate compliance with Corporate Governance Principles as set forth by the Capital Markets Board of Turkey. The Corporate Governance Rating of our Company has increased to (9.09 out of 10) on from a rating of (9.03 out of 10) assigned on , owing to our strong emphasis on and determined approach in developing good corporate governance practices , Outcome of Medine Int l Airport Tender During our Material Event Disclosure released on June 6th, 2011, we announced that our company bid for Medina International Airport project, jointly with Saudi Oger Ltd and Al Rajhi Holding Group. As a result of the evaluation carried out in relation to the tender by the local authority, General Directorate of Civil Aviation, Kingdom of Saudi Arabia, it was announced that the consortium including our company was the preferred bidder of the tender. After obtaining the required approvals and signing of the contracts, the current 4 million passenger capacity will be increased to 8 million with the addition of the new terminal building to be built at the Medina Airport of which we will gain the operating rights for 25 years on the basis of the Build-Transfer-Operate model , Medina Int l Airport Tender Our Company has submitted a bid with Saudi Oger Ltd. and Al Rajhi Holding Group for the tender of Medina International Airport in Medina, Saudi Arabia whose operating period shall be 25 years, held by the local authority; Kingdom of Saudi Arabia General Authority of Civil Aviation (GACA). Each company has an equal share within the consortium, accordingly as TAV Airports Holding we have 1/3 share. Following the technical and financial evaluation by the Authority, the winning party is expected to be announced , Share Purchase in TAV Urban Georgia In TAV Urban Georgia LLC, 66% of the capital of which is owned by our company, the shares of Sera Yapı Endüstrisi Tic. A.Ş., i.e. 5.5% and of Akfen İnşaat Turizm ve Ticaret A.Ş., i.e. 4.5%, corresponding to 10% of the company capital will be acquired in return for 8,583,000 USD and the share transfer is planned within the next 3 months. The purchase value of these shares was determined by calculations based on the valuation report. After the share transfer, the share of TAV Airports Holding in TAV Urban Georgia LLC shall increase from 66% to 76%, and Sera Yapı Endüstrisi ve Tic. A.Ş. and Akfen İnşaat Turizm ve Ticaret A.Ş. shall no longer have any shares in TAV Urban Georgia LLC , Share Purchase in TAV Batumi In TAV Batumi Operations LLC, 60% of the capital of which is owned by our company, the shares of Aeroser International Holding, i.e. 6% and the shares of Akfen İnşaat Turizm ve Ticaret A.Ş., i.e. 10%, corresponding to 16% of the company capital, will be acquired in return for USD and the share transfer is planned within the next 3 months. The purchase value of these shares was determined by negotiations. After the share transfer, the share of TAV Airports Holding in TAV Batumi Operations LLC shall increase from 60% to 76%, the shares of Aeroser International Holding shall reduce to 24%, and Akfen İnşaat Turizm ve Ticaret A.Ş. shall no longer have any shares in TAV Batumi Operations LLC.

24 24 Material Event Disclosures in , Share Purchase in TAV Guvenlik In TAV Özel Güvenlik Hizmetleri A.Ş.(TAV Security), 66.67% of the capital of which is owned by our company, the shares of Tepe Savunma ve Güvenlik Sistemleri Sanayi A.Ş. corresponding to 33.33% of the company capital will be acquired in return for 6,000,000 TL and the share transfer is planned within the next 3 months. The purchase value of these shares was determined by calculations based on the valuation report. After the share transfer, the share of TAV Airports Holding shall increase to 100%, and Tepe Savunma ve Güvenlik Sistemleri Sanayi A.Ş. shall no longer have any shares in TAV Özel Güvenlik Hizmetleri A.Ş , Recent Developments in Tunisa-2 As we have stated in our announcement dated 17th January 2011 regarding the latest developments in Tunisia, some European countries like England, France and Germany have removed / eased their warnings for their citizens regarding their travels to Tunisia. The operations at Monastir and Enfidha Airports have been going on uninterrupted. The airports will be operated by TAV Tunisie SA by 2047, where TAV Airports Holding has a 67 per cent stake. TAV Airports Holding does not have any investments or operations at Libya and Egypt experiencing public unrest recently. For detailed information about the operations of TAV Airports Holding please visit the web site: , Recent Developments in Tunisia Regarding the recent unrest in Tunisia, there have been news reports stating that the air space of Tunisia has been closed and that the Tunisian army has taken control of the airports in the country. Monastir and Enfidha Airports, operated by TAV Tunisie SA, an affiliate of our company is open to flights. Enfidha Airport is being used to transfer foreign citizens abroad. The airports that we operate in Tunisia have been under police and army protection since the first day of the unrest and there has been no security problem. TAV Airports Holding experienced a similar situation in Georgia in 2008, gaining valuable skill and experience in terms of management and coordination, taking all the necessary precautions

25 25 New Tenders Won Izmir tender Izmir Airport International Terminal, CIP, Domestic Terminal and the Operations Right auxiliary structures Concession Expiry 2032 TAV Stake 100% Total Planned Invesment : 250mn New Domestic Terminal Start: 2012 Total Area Increase: sqm to sqm Pax Fees 15 per international pax and 3 per domestic No volume guarantee, except for existing international terminal guarantee Volume Guarantee valid until January 2015 Total concession rent for entire operating period (until 2032) 610mn (excluding VAT) Concession fee payment schedule : Concession Rent 2% to be paid at the signature date ( 12m) 3% to be paid 3 months from contract signing date ( 18m) First instalment to be paid on 1 January 2013 ( 29mn) and afterwards annually on first business day of each year. BTA IDO BTA awarded F&B operations of İstanbul Deniz Otobüsleri AS (IDO, with c50m pax) and formed a JV with TASS (operator of IDO) BTA started to gradually take over the current F&B sales points in September 2011 BTA will serve at 82 outlets in 21 Terminals, 17 Vehicle Ferries and 8 Fast Ferries, comprising; 50 BTA Owned and operated Sales Points 7 International Fast Food Restaurant (Mc Donald's) 22 International Coffee Shop Chain (Nero) 3 Other Tenants Medinah tender Operations Right Prince Mohammed Bin Abdulaziz Airport structures Concession Expiry 2037 TAV Stake 33% Total Planned Invesment : $1-1.5bn New Terminal Expected Start: first half of 2012 Total terminal capacity will Increase from 4mn to 8mn Pax Fees SAR 80 from both departing and arriving international pax. Pax charges will increase as per cumulative CPI in Saudi Arabia every three years Volume Guarantee No volume guarantee Total concession rent for entire operating period (until 2037): 54.5% of total Concession Rent revenues will be paid. The concession charge will be reduced to 27.3 % for the first two years that follow the completion of the construction.

26 26 Concessions Table Airport Type/Expire TAV Stake Scope Istanbul Ataturk Ankara Esenboga Izmir A.Menderes Gazipasa Tbilisi Batumi Monastir&Enfidha Concession (Jan. 2021) BOT (May 2023) BOT+concession (Dec.2032) Concession (May 2034) BOT (Feb. 2027) BOT (Aug. 2027) 2011 Pax(mppa) 100% Int'l+Dom fee/pax Int'l US$15, 2.5 (Transfer) fee/pax dom. 100% Int'l+Dom % Int'l +Dom Volume Guarantee 3 No 0.6m Dom., 0.75 Int'l for 2007+%5 p.a 1.0m Int l for %3 p.a. (until 2015) Concession Fee $140m/yr + VAT Net Debt 114m - 103m 29m starting from % Int'l+Dom TRL4 No $ VAT 17m 76% Int'l+Dom US$22 US$6 No - 15m 76% Int'l+Dom US$12 US$7 No - - BOT+Concession 11-26% of 67% Int'l+Dom No revenues from 358m (May 2047) 2010 to m Skopje & Ohrid BOT+Concession (March 2030) 100% Int'l+Dom in Skopje, 16.2 in Ohrid - No 15% of the gross annual turnover 61m Medinah BTO+Concession (2037) 33% Int'l+Dom. 3.3 SAR 80 - No 54.5% of revenues -

27 27 TAV Group Structure and Shareholder Structure TAV Airports Holding Co. Shareholder Structure Airport Companies Atatürk Airport (100%) Service Companies ATÜ (50%) (5) 40.3% (1) 26.1% Esenboga Airport (100%) BTA (67%) A Menderes Airport (100%) Gazipaşa Airport (100%) HAVAŞ (65%) TGS (50%) (4) 3.5% (3) 4.0% Founding Shareholders (2) 26.1% Tbilisi & Batumi (76%) Monastir & Enfidha (67%) TAV O&M (100%) HAVAŞ / EUROPE (67%) 1. Tepe Insaat Sanayi A.Ş. Turkish integrated conglomerate focused on infrastructure and construction Skopje & Ohrid (100%) TAV Latvia (100%) TAV IT (99%) TAV Security (100%) 2. Akfen Holding A.Ş. Holding company operating in the infrastructure, construction, seaport, REIT and energy sector Madinah Airport (33%) 3. Sera Yapi Endustrisi A.Ş. Focused on construction in Turkey & MENA region 4. Other Non-floating (KIA) 5. Other Free Float TAVHL effective free float is 40% Akfen Holding A.Ş. has 14,466,267 (3.98%) shares in the free float Sera Yapi Endustrisi ve Tic. Ltd. Sti. has 446,544 (0.01%) shares in the free float

28 28 Contact IR Website Phone (x ) Twitter twitter.com/irtav Facebook facebook.com/irtav Address TAV Airports Holding Co. Istanbul Ataturk Airport International Terminal (Besides Gate A and VIP) Yesilkoy, Istanbul IR Team Nursel İLGEN, CFA Head of Investor Relations nursel.ilgen@tav.aero Tel : / 2122 Fax : Ali Özgü CANERİ Investor Relations Assistant Manager ali.caneri@tav.aero Tel : / 2124 Fax : Besim MERİÇ Investor Relations Assistant Manager besim.meric@tav.aero Tel : / 2123 Fax : Pelin AKIN Investor Relations Associate pelin.akin@tav.aero Tel : / 2288 Fax : About TAV Airports TAV Airports Holding is the leading airport operator in Turkey. TAV Airports Holding operates Istanbul Ataturk Airport, Ankara Esenboga, Izmir Adnan Menderes Airport and Gazipasa Airport in Antalya in Turkey, as well as Tbilisi and Batumi Airports in Georgia, Monastir and Enfidha Airports in Tunisia, Skopje and Ohrid Airports in Macedonia. TAV Airports, with its partners Al Rajhi Holding and Saudi Oger, won the Medina Airport tender in Saudi Arabia. TAV also operates duty free and other commercial areas at Riga Airport in Latvia. TAV Airports operates in other branches of airport operations as well, such as duty free, food and beverage services, ground handling services, information technologies, security and operation services. TAV Airports served 451 thousand flights and 53 million passengers in The company shares are listed in the Istanbul Stock Exchange since February 23, 2007, under the name of "TAVHL.