Final Results

RNS Number:0029J
Schiphol Nederland B.V.
24 February 2005


Schiphol Group's 2004 result up by 13.1%, excluding unrealised capital
gains on investment property



                                 Persbericht / Press Release

Schiphol,
24 February 2005


Schiphol Group's result after taxation in 2004 was down by 17.2%, from Euro191
million to Euro158 million. The main factor behind this was the much lower level of
unrealised capital gains on investment property of Euro5 million in 2004, compared
with Euro83 million in 2003.



Excluding the unrealised capital gains, the result after taxation in 2004 in
fact rose by 13.1%, primarily accounted for by an increase in revenues from
airport fees (Euro41 million), concessions (Euro5 million) and parking fees (Euro6
million).



The aviation industry appears to have recovered in the year under review from
the twin blows dealt by the Iraq war and the SARS epidemic in 2003, as reflected
in the increase in traffic volumes at Schiphol Group's airports and the revenues
which this generated.



The return on net assets (RONA) after taxation but including unrealised capital
gains on investment property turned out at 5.4% compared with 7.7% in 2003.
Excluding unrealised capital gains, but including the results of the
non-consolidated participating interests, the RONA last year was 5.5%, compared
with 5.8% in 2003.



The return on shareholders' equity including unrealised capital gains on
investment property turned out at 7.6% compared with 9.8% in 2003 and, excluding
unrealised capital gains, the figures were 7.4% in 2004 and 7.0% in 2003.

Revenues

Net turnover in 2004 rose by 3.2%, from Euro860 million to Euro888 million. The
analysis of

revenues according to the various turnover categories is as follows:


Net Turnover (in millions of euros)                    2004          2003   Increase/decrease

Airport fees                                            507           466                8.7%
Concessions                                             120           115                4.2%
Rents and leases                                        106           105                1.4%
Parking fees                                             69            63               10.4%
Utility services                                          6            18             - 64.5%
Sales of investment property                             24            30             - 20.2%
Other activities                                         56            63             - 12.9%
                                                    -------       -------
Total                                                   888           860                3.2%

Unrealised capital gains                                  5            83             - 93.9%



Income from airport fees

Income from airport fees rose by 8.7% from Euro466 million to Euro507 million, the
increase being explained as follows:



*       Volume factors
Increases in passenger numbers (6.5%), air transport movements (2.4%) and the
average takeoff weight of aircraft at Amsterdam Airport Schiphol from 94.2 to
97.7 tonnes lifted airport fee income by Euro15.2 million. Set against this was a
drop of Euro1 million in aircraft parking fees.

*       Airport charge increases
Increases in takeoff and landing fees (2.8%) and passenger-related fees (6%),
effective as from 1 April 2004, produced an additional Euro14.1 million.

*       Transfer of preventive security duties
On 1 April 2003 the authorities transferred the responsibility for performing
preventive   security duties in the terminal at Amsterdam Airport Schiphol to
Schiphol Group. An airport security charge closely matching the actual costs was
introduced to pay for this and, in 2004, generated an additional three months of
revenues compared with 2003, raising income from airport fees by Euro18.9 million.

*       Higher revenues from regional airports
The income from airport fees at the regional airports rose by Euro9.2 million in
the year under review (65.6%) to Euro23.3 million, a sharp increase compared with 
the 0.9% rise in 2003.


*   Settlement of the difference between estimated and actual income and
expenses
Commencing in 2004 we are now adhering as closely as possible to the provisions
of the draft Aviation Act and draft General Administrative Order under the Act.
This means that Schiphol Group, when setting the airport fees for 2005 and 2006,
takes into account the difference between the estimated and actual income and
expenses in 2004, to the benefit of the industry. The difference has been
calculated at Euro16.0 million and has been deducted from the income from airport
fees for 2004.



Other turnover categories

After falling in 2003, income from concessions rose in the year under review
from Euro115 million to Euro120 million, an increase of 4.2%. The main factor here was
the increase in the number of passengers. The average spend per departing
passenger on international flights was in fact down in 2004 from Euro17.86 to
Euro16.82, partly because of the poor dollar and sterling exchange rates and the
economic situation.


Real estate letting income increased by 1.4%, from Euro105 million to Euro106 million.
This fractional increase was due to an increase in the area of land leased out
and indexation of rents. Income from rents and leases was reduced by the sale of
investment property to ACRE Fund at the end of 2003, halving the associated
income.



Parking fee income increased by 10.4% in 2004, from Euro63 million to Euro69 million,
the increase being accounted for by a larger number of users for both the
short-term and long-term car parks and an increase in parking charges introduced
on 1 January 2004. The growing volume of activities at Rotterdam Airport and
Eindhoven Airport also produced additional parking fee income of Euro1.6 million.



Net turnover on utility services was down by 64.5%, from Euro18 million to Euro6
million, owing to the disposal of Schiphol Group's activities relating to the
supply of gas and electricity to other airport users at the end of 2003. The
remaining turnover was generated by transport services and network management.



The Euro24 million income from the sale of investment property concerns the sale of
50% of the Schiphol Group head office (Schiphol Building) to ACRE Fund.



The income from other activities was down by 12.9%, from Euro63 million to Euro55
million. This is partly explained by the fact that the 2003 figure included
non-recurring income of approximately Euro8 million from the disposal of waste
collection and waste water treatment activities as well as the supply of gas and
electricity.



Unrealised capital gains

The unrealised capital gains on investment property in 2004 amounted to Euro5
million. The amount of growth was sharply lower than the Euro83 million in 2003,
when unrealised capital gains were, however, exceptional, as described in our
2003 Annual Report. The net amount of the unrealised capital gains in 2004 is
made up of two components, viz. unrealised capital gains on offices and other
buildings, totalling Euro8 million, and unrealised capital losses on land,
totalling Euro3 million.



Operating expenses

Operating expenses increased by 5.3%, from Euro618 million to Euro651 million. The
analysis is shown below.




Operating Expenses  (in millions of euros)                   2004       2003     Increase/decrease

Costs of outsourced work and other external charges            310      298               4.0%
Salaries and social security charges                           146      139               5.0%
Depreciation/amortisation and movements in value               153      131              16.9%
Cost of sales of investment property                             7       27            - 73.3%
Other operating expenses                                        35       23              49.9%
                                                           -------  -------
Total                                                          651      618               5.3%



Costs of outsourced work and other external charges

In 2004, the increase in external charges (including outsourcing) was 4.0%. This
was mainly due to hiring contract security staff in connection with the transfer
of preventive security duties from the authorities referred to earlier.
Maintenance and repair costs increased by Euro11 million and the costs of
purchasing gas and electricity were lower as a result of no longer supplying
third parties.



Salaries and social security charges

Salaries and social security charges rose by 5.0% in 2004 to Euro146 million. The
increase was not due to recruiting more staff or to pay rises. The number of
staff (FTEs) in fact fell by 15 in 2004 and, under the terms of the 12-month CLA
which took effect  on 1 April 2004, there were no automatic pay rises. The
increase was accordingly accounted for by the non-recurring, performance-related
benefits agreed in the CLA, higher profit-sharing bonuses, an increase in
pension charges, severance packages and retaining pay.



Amortisation/depreciation and movements in value

The increase in amortisation/depreciation and movements in value in 2004
amounted to Euro22 million, or 16.9%, partly accounted for by a number of
exceptional write-downs on Area J

(between the A4 motorway and Runway 18C-36C) and Beech Avenue (the new road
linking Schiphol South and Schiphol Southeast) totalling Euro6.2 million.
Impairment losses were also recognised for the forecast short-term and
medium-term losses and negative operating cash flow of Lelystad Airport, in
respect of which we wrote off Euro7.4 million from the tangible fixed assets of
Lelystad Airport. The amount of the write-down was subsequently reduced by
releasing the remainder of the Lelystad underperformance provision as at
year-end 2004, amounting to Euro2.3 million.  Depreciation charges also increased
owing to the opening of new baggage handling facilities.



Other operating expenses

The other operating expenses were Euro12 million higher than in 2003, the increase
being mainly accounted for by a provision of Euro10 million in respect of various
claims and disputes,  for which Schiphol Group is liable, as was established in
the course of 2004.



Cost savings

Summarising, the Euro33 million increase in the operating expenses can be explained
as follows. Security costs increased by Euro18 million, from Euro111 million to Euro129
million. They are accounted for in various categories of operating expenses and
now make up more than 20% of the total. In addition, maintenance costs rose by
Euro11 million and amortisation/depreciation charges plus movements in value were
up by Euro22 million. The inclusion of certain participating interests in the
consolidation with effect from 2004 increased operating expenses by Euro3 million.
Other operating expenses rose by Euro12 million, chiefly as a result of the above
provision for possible claims and disputes. Finally, staff costs increased by Euro7
million, partly as a result of severance packages and higher pension charges.
Offsetting these increases were lower costs of sales of investment property and
effective cost savings of approximately Euro20 million were achieved.



Operating result and result after taxation

The operating result in 2004 was down by 23.2%, from Euro337 million to Euro258
million, the drop being almost entirely explained by the lower unrealised
capital gains (Euro78 million), on top of which there was a lower result on the
sale of investment property (Euro14 million) compared with 2003. The result before
interest, taxation and depreciation/amortisation (EBITDA) was down by 12.2% in
the year under review, from Euro468 million to Euro411 million.



Net financial income and expenses improved by Euro14 million, from Euro43 million to
Euro29 million, partly owing to non-recurring income of Euro8.9 million in connection
with the Triport office building finance lease. The share in the results of
participating interests improved sharply compared with 2003, from Euro1 million to
Euro6 million, the improvement being mainly accounted for by Schiphol Australia's
interest in Brisbane Airport Corporation. With effect from 1 January 2004, this
participating interest has been carried at net asset value instead of 
historical cost. The associated revaluation amounted to Euro7.1 million.



Investments and finance

The cash flow from operating activities improved from Euro298 million to Euro323
million. The main reason for this was that the company did not receive a
provisional corporation tax assessment in 2004 (2003: Euro52 million). The positive
net cash flow from operating activities and investing activities (free cash
flow) of Euro45 million plus the existing cash balances were sufficient to fund
loan repayments of Euro55 million and dividend payments of Euro41 million. As a
consequence, the net cash position fell by only Euro21 million from Euro271 million to
Euro250 million, making it unnecessary to raise additional finance in 2004.
Investments in tangible fixed assets during the year amounted to Euro294 million
compared with Euro353 million in 2003. The most important projects were the
expansion and renovation of Departure Lounge 1, including the construction of
the new baggage basement in the south wing of the terminal, the extension of the
west wing of the terminal, the installation of inline hold baggage screening
equipment in the baggage basements, enhancement of the fire protection systems
in the terminal and extension of the elevated roadway system. Offsetting these
investments were disposals

totalling Euro7.2 million, mainly associated with the sale of property to ACRE
Fund.



Ratios

As at year-end, interest-bearing debt amounted to 27% of the balance sheet total
of Euro3,590 million, an improvement of three percentage points compared with the
previous year-end. Adjusted for the cash position, interest-bearing debt
amounted to 21% of the balance sheet total, again an improvement of three
percentage points compared with 2003. The interest coverage ratio increased from
7.9% in 2003 to 9.0% in 2004. This can be attributed to a proportionately
greater decrease in net financial income and expenses compared with the decrease
in the operating result in 2004. Non-recurring income of Euro8.9 million lay behind
the improvement in net financial income and expenses.



Financing policy

The total amount of loans outstanding as at year-end 2003 was Euro956 million. No
new loans were drawn down in 2004 and repayments of Euro55 million were made. The
amount borrowed under the Euro Medium Term Note (EMTN) programme as at year-end
2004 was Euro606 million.

The remaining terms to maturity of the loans issued under the EMTN programme
range from 2.5 to 13.5 years. The average interest charge was fractionally lower
in 2004, down from 4.94% to 4.87%.



Dividend Proposal

It is proposed to distribute to the shareholders a dividend of Euro46.4 million on
the paid-up share capital calculated on the basis of the 30% result after
taxation, excluding unrealised capital gains on investment property after
taxation.



Forecast

Schiphol Group's Board of Management expects to see passenger volume grow by
4.5%-5.0% and cargo volume by around 5.5%.  These forecasts are made on the
assumption that the world economy and the Dutch economy will continue to improve
and that aviation will not be hit by crises such as those occurring in 2001 and
2003.



Costs are set to further increase as a result of the additional security
measures that were implemented at year-end 2004, and by higher depreciation
charges in connection with the completion of major capital projects. The airport
will continue to control its costs.

Investments in 2005 are estimated at Euro400 million, over half of which will be
made in aviation facilities at Amsterdam Airport Schiphol.  Consequently there
will be an increase in financing costs. The existing cash, the forecast cash
flow from operating activities and the available financial facilities provide
ample funding. The result after taxation but excluding unrealised capital gains
on investment property is expected to be on par with 2004.

Key Financial Figures (in millions of euros)
                                                                 2004        2003   Change in %
Results
Net turnover                                                      888        860           3.2
Unrealised capital gains                                            5         83
Capitalised own production                                         17         13
                                                              -------    -------
Total operating income                                            910        956         - 4.8
Total operating expenses excluding                              - 499      - 488           2.3
depreciation/amortisation and movements in value
                                                              -------    -------
EBITDA                                                            411        468        - 12.2
Depreciation/amortisation and movements in value                - 153      - 131          16.9
                                                              -------    -------
Operating result                                                  258        337        - 23.2
Financial income and expenses                                    - 29       - 43
Share in results of participating interests                         6          1
Taxation                                                         - 77      - 103
                                                              -------    -------
Result on ordinary activities after taxation                      158        192        - 17.7
Minority interests                                                  0        - 1
                                                              -------    -------
Result after taxation                                             158        191        - 17.2

Result after taxation excluding unrealised capital gains          155        137          13.1

Balance sheet
Balance sheet total                                             3,590      3,469           3.5
Fixed assets                                                    3,192      3,046           4.8
Shareholders' equity                                            2,139      2,024           5.7
Interest-bearing liabilities                                      966      1,027         - 6.0




015-2005/rw/pk


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