Groupe ADP has announced a new 2022-2025 strategic roadmap to build the foundation of a new airport model geared towards sustainability.
As part of its ‘2025 Pioneers’ vision, the group aims to make its airports multimodal and create energy hubs designed and operated in a sustainable way. In addition, the group has launched a new retail and hospitality concept, called Extime.
Groupe ADP says that at the heart of the transformation is the evolution of airports into multimodal energy hubs, which will no longer be a place to fly, but a place where passengers can benefit from renewed connectivity, offering them a choice between different modes of travel and where rail-air connections will account for a growing share of the development of its hubs. According to the group, these multimodal energy hubs will lead the deployment of new clean energies and will see existing infrastructures densified and the capacities of stations and multimodal hubs extended, using new innovative and environmentally friendly construction methods. They will also be integrated into a global urban planning process.
The new roadmap will also be adopted by the group’s subsidiary companies TAV Airports and GMR Airports, and is based on a financial trajectory allowing the Group to return, by 2025, to its pre-crisis performance under the impulse of the gradual return of traffic to 2019 levels and of a strong financial discipline in operations and investments.
New retail and hospitality concept
The group is launching a new retail and hospitality concept, called Extime, to create more value for passengers and increase customer satisfaction. Groupe ADP says: “The preferred deployment model is that of a franchise, with a franchisor, Aéroports de Paris, providing the Extime franchise and its know-how to franchisees.”
The value creation strategy is based on four levers:
- Launching an ambitious aviation marketing strategy to stimulate traffic focused on the highest contributing destinations, such as China.
- Stimulating demand ahead of the arrival at the airport via a high-performance digital ecosystem consisting of a loyalty programme Extime Reward and Extime Pass, as well as a digital marketplace www.extime.com.
- An integrated business model, with the majority of operations carried out by companies at least 50% owned by the Group, bearing the Extime name, and being genuine champions in their field of activity with optimised business models
- A field of expression mainly in the airside area of airports in places called “Boutique Terminaux”, which aim for excellence in design, architecture, customer experience and in the range of brands and concepts.
Under the new strategy, the group’s objective is to raise spend per passenger from €25.3 in 2021 to €27.5 in 2025. Meanwhile, ADP’s operating expenses are expected to decline from €32 per passenger in 2021 to between €16 and €18 in 2024 and 2025, close to 2019 levels.
The group expects a gradual return of traffic to pre-crisis levels, faster abroad than in Paris Aéroport, given the expected dynamics of TAV Airports and GMR Airports.
In 2022, group traffic is expected to be between 70% and 80% of pre-pandemic 2019 levels and expects a full return to 2019 levels between 2023 and 2024. Similarly, this year Paris Aéroport’s traffic is expected to be between 65% and 75% of 2019 levels, in 2023 between 85% and 95%, in 2024 between 90% and 100% and in 2025 between 95% and 105%.
With this anticipated recovery in traffic, the new commercial strategy and the cost control policy, by 2024 Groupe ADP expects to return to an EBITDA level higher than that of 2019, which was €1,772 million.
Augustin de Romanet, Chairman and CEO, said: “After a period marked by an unprecedented crisis that has had a lasting impact on the air transport sector, Groupe ADP wishes to promote a new long-term airport model that will create sustainable value for the company and the territories and provide a new impulse for its employees and the entire airport community. It intends to build its leadership by relying on a pioneer approach to the global and structural transformation of its activities and businesses. The “2025 Pioneers” strategic roadmap, which for the first time is group-wide, proposes 20 objectives, testifying, by 2025, of the implementation of the first concrete actions of this long-term transition.
“This strategic roadmap is part of a financial trajectory characterised by the gradual return of traffic to the 2019 level as well as a demanding financial discipline in terms of cost evolution and investment control which should enable Groupe ADP to return to its pre-crisis financial performance level by 2025. The deployment on retail and hospitality activities of the new Extime strategy, in Paris then abroad, will be decisive in the group’s search for competitiveness thanks to the implementation of a franchise concept that is new to the airport industry. Extime carries a promise of excellence not only in terms of retail performance and customer satisfaction, but also in terms of profitability and productivity of retail operations. As a result, Groupe ADP will be able to guarantee a fair return of its value creation to all its shareholders.”