A Solid Performance From Aeroports de Paris as Passenger Traffic Recovers; FVE Unchanged

Narrow-moat Aeroports de Paris, or ADP, is nearing operating breakeven as traffic and revenue recovers from a low base. Full-year 2021 group revenue of EUR 2.8 billion increased by 30%, largely driven by a 37% increase in passenger traffic across the group’s airports. The EBITDA margin of 27% is ahead of previous guidance but can be attributed to one-off gains in the year. Traffic for the full year still remains at slightly less than 50% of 2019 prepandemic levels. The group is forecasting traffic to reach 70% to 80% of 2019 levels in 2022 and to fully recover between 2023 and 2024, a slight upgrade from previous guidance. More color was given on the medium-term financial guidance, with EBITDA margins expected to range between 35% and 40% by 2024, in line with prepandemic levels. Our normalized EBITDA margin is at the high end of this range at 39% by 2025. We maintain our EUR 115 fair value estimates as we update our model, while shares appear overvalued trading in 2-star territory.