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1. Company Snapshot

1.a. Company Description

Flughafen Zürich AG owns and operates the Zurich in Switzerland.It provides infrastructure and services related to flight operations, including the runway system, apron zones, passenger zones in the terminals, freight operations, passenger handling and services, and safety; support for passengers with reduced mobility; and check-in areas and facilities, baggage sorting and handling system, aircraft power supply system, handling apron areas, and the related services.The company also offers passenger and aircraft security measures with systems and their operation and maintenance designed to prevent actions that affect the security of commercial civil aviation primarily facilities for checks on passengers, hand luggage, checked baggage, and freight.


In addition, it provides air security-related equipment and services comprising relevant systems and their operation and maintenance; and airport policing duties, con surveillance patrols and other security-related duties.Further, the company is involved in the development, marketing, and operation of the commercial infrastructure at Zurich Airport, including retail and restaurant/catering operations at the airport, renting premises, parking services, and various commercial services; and shopping centers, service centers, leisure, and experiential activities.Flughafen Zürich AG was founded in 2000 and is headquartered in Zurich, Switzerland.

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1.b. Last Insights on FHZN

Flughafen Zürich AG's recent performance was negatively impacted by operational and financial challenges, despite surpassing pre-pandemic revenue levels. The company's record-breaking revenue and strategic international expansion, highlighted in its FY 2024 earnings call, were offset by rising costs and operational disruptions. The airport's expansion and renovation efforts are expected to continue, potentially leading to short-term challenges. Additionally, the company's decision to initiate a share buyback program may provide some support to shareholders.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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Flughafen Zürich (SWX:FHZN) Valuation: Exploring What Recent Moves Might Mean for Investors

Sep -28

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Flughafen Zuerich AG (FLGZY) (FY 2024) Earnings Call Highlights: Record Revenue and Strategic ...

Mar -08

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Is Flughafen Zürich AG (UZAPF) One of the Worst Airport Stocks to Buy?

Sep -30

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Is Flughafen Zürich AG (UZAPF) a Good Airport Stock To Add To Your Portfolio?

Sep -24

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Flughafen Zuerich AG's Dividend Analysis

Apr -23

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20 Largest Airport Companies in the World by Market Cap

Mar -30

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Slowing Rates Of Return At Flughafen Zürich (VTX:FHZN) Leave Little Room For Excitement

Mar -25

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Banque Cantonale de Genève's (VTX:BCGE) 22% CAGR outpaced the company's earnings growth over the same three-year period

Mar -12

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.62%)

6. Segments

Non-regulated

Expected Growth: 4%

Non-regulated segment of Flughafen Zürich AG, with 4% growth, driven by increasing passenger traffic, strong demand for air cargo, and expansion of retail and parking services. Additionally, strategic partnerships and investments in digitalization and sustainability initiatives contribute to growth.

Aviation

Expected Growth: 3%

Strong demand for air travel, increased tourism in Switzerland, and Zurich Airport's strategic location as a European hub drive growth. Additionally, Flughafen Zürich AG's investments in infrastructure and services, such as expanded terminal capacity and improved passenger experience, support the 3% growth rate.

Air Security

Expected Growth: 2%

Air Security from Flughafen Zürich AG's 2% growth is driven by increasing air travel demand, stringent security regulations, and investments in technology upgrades. Rising passenger traffic and cargo volumes necessitate enhanced security measures, while advancements in biometric screening and surveillance systems improve efficiency and effectiveness.

International

Expected Growth: 6%

International segment of Flughafen Zürich AG grew 6% driven by increasing demand for air travel, strategic route expansions, and strong partnerships with airlines. Additionally, Zurich's hub status, efficient airport operations, and attractive tourist destinations in Switzerland contributed to the growth.

User Fees

Expected Growth: 4%

The 4% growth in User Fees from Flughafen Zürich AG is driven by increasing passenger traffic, higher airport charges, and a growing demand for premium services. Additionally, the airport's strategic investments in infrastructure and technology upgrades have enhanced the overall passenger experience, leading to increased revenue from user fees.

People with Reduced Mobility

Expected Growth: 3%

Increased accessibility initiatives by Flughafen Zürich AG, growing demand for assisted travel, and investments in infrastructure improvements, such as elevators and ramps, contribute to the 3% growth in people with reduced mobility.

Access Fees

Expected Growth: 5%

Strong growth in access fees from Flughafen Zürich AG driven by increasing passenger traffic, higher parking and security fees, and rising demand for premium services. Additionally, strategic partnerships and investments in digitalization and infrastructure expansion contribute to the growth.

7. Detailed Products

Airport Operations

Management of airport infrastructure, including runways, taxiways, and aprons

Aircraft Services

Ground handling services, including baggage handling, cargo handling, and fueling

Retail and F&B

Management of retail shops, restaurants, and bars within the airport

Real Estate

Management of airport properties, including office spaces and logistics facilities

Security Services

Provision of security services, including passenger screening and access control

Parking and Mobility

Management of parking facilities and mobility services, including car rentals and public transport

Airport IT and Telecommunications

Provision of IT and telecommunications services, including network infrastructure and system integration

8. Flughafen Zürich AG's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Flughafen Zürich AG is medium due to the presence of alternative modes of transportation such as trains and buses, but the airport's strategic location and high-quality services reduce the likelihood of substitution.

Bargaining Power Of Customers

The bargaining power of customers is low due to the airport's dominant position in the region and the lack of alternative airports in the vicinity, giving customers limited options.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium due to the presence of multiple suppliers of aviation fuel, food, and other services, but the airport's large scale of operations gives it some bargaining power.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the airport industry, including the need for significant capital investment and regulatory approvals.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of other airports in the region, such as EuroAirport Basel-Mulhouse-Freiburg, which competes with Flughafen Zürich AG for passengers and airlines.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 33.62%
Debt Cost 3.95%
Equity Weight 66.38%
Equity Cost 9.23%
WACC 7.46%
Leverage 50.65%

11. Quality Control: Flughafen Zürich AG passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Flughafen Wien

A-Score: 6.3/10

Value: 4.4

Growth: 6.7

Quality: 7.9

Yield: 4.4

Momentum: 5.0

Volatility: 9.3

1-Year Total Return ->

Stock-Card
ENAV

A-Score: 6.3/10

Value: 4.1

Growth: 5.8

Quality: 4.9

Yield: 8.1

Momentum: 6.0

Volatility: 8.7

1-Year Total Return ->

Stock-Card
Zurich Airport

A-Score: 5.9/10

Value: 2.6

Growth: 5.8

Quality: 6.2

Yield: 3.8

Momentum: 7.0

Volatility: 10.0

1-Year Total Return ->

Stock-Card
IAG

A-Score: 5.4/10

Value: 7.3

Growth: 4.8

Quality: 5.0

Yield: 1.2

Momentum: 9.0

Volatility: 5.0

1-Year Total Return ->

Stock-Card
Aeroports de Paris

A-Score: 4.4/10

Value: 3.2

Growth: 5.9

Quality: 2.6

Yield: 2.5

Momentum: 4.0

Volatility: 8.0

1-Year Total Return ->

Stock-Card
Corporación América Airports

A-Score: 4.1/10

Value: 4.9

Growth: 6.9

Quality: 6.2

Yield: 0.0

Momentum: 4.0

Volatility: 2.3

1-Year Total Return ->

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

240.2$

Current Price

240.2$

Potential

-0.00%

Expected Cash-Flows