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SWISSPORT INTERNATIONAL AG COMPANY PROFILE 2019
Swissport International AG Company Profile 2019 3
Dear Readers,
In 2019, Swissport achieved solid results in a Furthermore, we are making efforts to increase
weakening market environment. On revenue of data availability to efficiently steer our busi
3.13 billion euros, operating EBITDA1 came to ness and to create a framework that supports
272.3 million euros. In constant currency, our data-driven service innovations.
revenue was up 2.3 percent, largely in line with
sector growth, while EBITDA was 2.4 percent As the global leader in aviation ground services,
below previous year – and roughly on previous we are committed to contributing to the success
year in actual terms. Our operating cash flow 1 of airlines and logistics companies, while delivering
improved to 196.4 million euros in 2019, up from sustainable growth to our investors.
182.5 million euros the year before.
Thank you for your interest in Swissport.
In our pursuit of continuous improvement, we
remain focused on enhancing our operational
execution in line with our quality objectives and
our service principles. As a people business, we
continually invest in our employees. To this end,
we train our frontline employees and foster the
development of leaders across the organization.
Since 2018, more than one thousand mid-level
leaders have enrolled in leadership development. Eric Born
15 senior-level managers attended a pilot pro President & CEO
gram on transformational leadership in 2019. Swissport International AG
1
Pre-IFRS 16, as defined in our audited financial statements
4 Company Profile 2019 Swissport International AG
6
2019 KEY FACTS
Facts and figures are to the point, but don’t account for the
people of Swissport standing behind them – around 64,000 in
2019. Our company profile tells the stories behind the numbers.
CONTINENTS
115 47
COUNTRIES
WAREHOUSES
5LOUNGE GUESTS (million)
4.6
TONS OF CARGO (million)
Swissport International AG Company Profile 2019 5
265
2.1
AIRCRAFT TURNS (million)
AIRLINE PASSENGERS (million)
>850
300
CORPORATE CLIENTS
AIRPORTS
64,000
EMPLOYEES
Company Profile 2019 Swissport International AG
Swissport International AG Company Profile 2019 7
CONTENTS
2019 key facts 4 Our commercial ambitions 26
Swissport at a glance 8 Our competitive advantage 29
Group executive management 11 Full range of mission-critical services 30
Overview of results 12 Competitive cost base 32
Interview with the CEO 14 Safe and industry-leading operations 34
Our global presence 16 Global consistency 36
Our story 18 Sustainable stakeholder relations 38
Market review 20 Pricing discipline and commercial governance 40
Objectives & strategy 22 Corporate sustainability 42
Our corporate strategy 25 Credits /Contact 50
8 SWISSPORT AT A GLANCE Company Profile 2019 Swissport International AG
1 SWISSPORT
AT A GLANCE
Swissport International AG Company Profile 2019 9
Group executive management 11
Overview of results 12
Interview with the CEO 14
Our global presence 16
Our story 18
Market review 20
Swissport International AG Company Profile 2019 SWISSPORT AT A GLANCE 11
GROUP EXECUTIVE MANAGEMENT 1
Eric Born Glenn Rutherford Luzius Wirth
President & CEO 2 Executive Vice President Executive Vice President
Asia-Pacific Europe, Middle East & Africa
Andreas Hugener Dr. Peter Waller
Chief HR Officer Chief Financial Officer
1
As per 30 April 2020
2
Ad-interim EVP Americas12 SWISSPORT AT A GLANCE Company Profile 2019 Swissport International AG
OVERVIEW OF RESULTS
2019 BUSINESS PERFORMANCE
Against a weakening global economy, Swissport was able to achieve solid results by
taking decisive cost-efficiency measures. A strong de-icing business in the first
quarter and the first full-year consolidation of Aerocare also had a positive impact.
FINANCIAL PERFORMANCE OPERATING PERFORMANCE Management statements not included in
the consolidated financial statements section
In 2019, revenue growth of 2.3 percent was largely The weakening global economy and inter commenting on “operating result” refer to operating
in line with the sector’s overall growth. EBITDA national trade impacted our business, earnings before interest, tax, depreciation and
stood at 272.3 million euros, 2.4 percent below especially in the cargo segment. Swissport amortization (“operating EBITDA”) as reported in
previous year in constant currency and roughly performed 2.05 million aircraft turns and → note 1.1. Segment Information in the financial
on previous year in actual terms. handled 4.62 million tons of cargo. report. Statements discussing results’ comparison
year on year are made on a constant currency
basis, i.e., adjusted for movement in foreign currency
REVENUE AIRCRAFT TURNS exchange rates between the two comparative periods.
€ 3.13 bn
2018: €3.06 billion 1
2.05 m
2018: 2.16 million
EBITDA2 CARGO TONS
€ 272.3 m
2018: €278.9 million 1
4.62 m
2018: 4.78 million
1
On a constant currency basis
2
Operating EBITDA (pre-IFRS 16), as defined
in our audited financial statementsSwissport International AG Company Profile 2019 SWISSPORT AT A GLANCE 13
REVENUE AND EBITDA CASH FLOW AND LIQUIDITY
2019 2018 2018
Operating cash flow improved over the previous
constant as reported
MEUR currency year, owing in part to a solid business per
Revenue 3,134.5 3,063.9 2,994.5 formance and effective working capital manage
Operating EBITDA 272.3 278.9 273.2 ment. Total liquidity increased overproportionally
Operating EBITDA margin 8.7 % 9.1 % 9.1 % due to a decrease in investment activity and a
long-term refinancing in August 2019.
REVENUE PER REGION
OPERATING CASH FLOW 1
+ 7.6 %
Our revenue growth stemmed from increased activities from various business
lines across the globe. Strategic acquisitions also supported top-line growth.
2019: €196.4 million
2018: €182.5 million
2019 2018
CASH AND CASH EQUIVALENTS
EMEA 54.7 % EMEA 55.8 %
+ 74.5 %
31 Dec 2019: €253.4 million
Americas 35.4 % Americas 36.0 % 31 Dec 2018: €145.2 million
APAC 9.9 % APAC 8.2 %
1
Operating cash flow (pre-IFRS 16), as defined
in our audited financial statements14 SWISSPORT AT A GLANCE Company Profile 2019 Swissport International AG
INTERVIEW WITH THE CEO
Eric Born, Swissport’s President & CEO, reviews an
eventful 2019 and shares his outlook on 2020.
How do you rate Swissport’s business results Would you say that Swissport’s business model continuously work on further improving our
in 2019? with ground services and cargo handling is overall efficiency. This will strengthen Swissport’s
We achieved solid results in a weakened market working to our advantage under more challenging ability to compete for business, help in realizing
environment. Our revenue climbed to 3.13 market conditions? margin-improvements and increase our cash
billion euros. That’s 2.3 percent more than in Absolutely. The ground services business, which flow. In the longer term, we will be able to
2018 on constant currency and 4.7 percent contributes about 80 percent of Group revenue, further strengthen our balance sheet and increase
more in real terms. Our operating EBITDA was added stability. In line with past market our capability to invest. On the revenue side, we
272.3 million euros, a 2.4 percent drop over last behavior, the segment reacted to the global aim for growth at least in line with the sector.
year at constant currency, but roughly stable economic slowdown with a delay and a smaller
in real terms. Our operating cash flow increased contraction than cargo. It also has a higher When Swissport acquired Aerocare in 2018, it
to 196.4 million euros, a 7.6 percent year-on- share of variable cost and we can swiftly react had high hopes for the Australian affiliate to
year improvement which was supported by our to downturns by adapting our workforce or by serve as a platform for growth in Asia-Pacific. Is
effective working capital management. selling equipment. We successfully did this in the business delivering on the expectations?
Brazil in 2019, for example, where a sizeable We continue to see opportunities across the
In 2018, the first-time consolidation of our newly share of our revenue was lost due to the market Asia-Pacific region. We are expanding our
acquired business in Australia and New Zealand exit of a client. Cargo, on the other hand, current activities and developing new lines of
contributed significantly to our above-market contributes higher margins, which compensate business, with a focus on Australia and New
growth. This effect was no longer there in 2019, for the risks associated with long-term lease Zealand, where we can indeed build on the basis
of course. And in the spring of 2019, the weakening obligations for facilities and equipment. of our existing operation. Next year, a brand-
global economy increasingly impacted sector new airfreight warehouse will go online in
growth. As a result, our EBITDA-margin ultimately Where do you see the main challenges for Melbourne, Australia, our first on the continent.
slipped by almost half a percentage point com Swissport? And in Perth, we will open the first Australian
pared to 2018. So 2019 was not great, however; Process efficiency and cost leadership are Aspire airport lounge, with further locations in
all in all it was still a solid year and we are working becoming ever more important in our industry. the planning. And Skycare, the former fixed base
hard to improve further. And now we are operating in a weaker economic operation of Aerocare, has been integrated in
environment than just 18 months ago. Thanks Swissport Executive Aviation. I am pleased to
to its position as the world market leader, see that Asia-Pacific is delivering on our
Swissport is ideally positioned to strive for and aspirations as a platform for growth.
defend cost leadership in key markets. WeSWISSPORT AT A GLANCE 15
“We are also continuing to develop smaller
business lines with a strategic focus on
high-margin aviation services.”
Apart from our Asia-Pacific expansion, where Where do you see Swissport in 2020?
else is Swissport investing? From a macroeconomic perspective, 2020 got
We are focusing on projects of strategic impor off to a bumpy start. The global economic
tance. In Brussels, Belgium, we are investing in a slowdown became more pronounced in the fourth
25,000-square meter warehouse. In Frankfurt, quarter of 2019 and the Covid-19 health crisis
Germany, we are developing a 17,000-square adds to the uncertainty. Depending on the
meter facility. We are also making tangible further course of the pandemic and the timing
progress in redesigning our IT infrastructure and and speed of the recovery in demand, 2020
applications landscape, which will support a could be a rocky year for aviation. We will continue
more data-driven steering of the business and to do our homework on the cost side, work to
service innovations. The multiyear project is well further enhance our service level and seize
under way. attractive market opportunities.
We are also continuing to develop smaller
business lines with a strategic focus on high-
margin aviation services. Our airport lounge
business, which operates under the Aspire brand,
is one such example. While still comparatively
small in revenue terms, we see a lot of potential
here. The segment grew profitably last year and
Aspire now operates 48 lounges worldwide.
Another interesting business that we continue
to expand are load control services. In Nairobi,
Kenya, we opened an additional office providing
centralized load control services. It complements
the first such unit in Casablanca, Morocco, and
our load-control teams in Zurich and Geneva.16 SWISSPORT AT A GLANCE Company Profile 2019 Swissport International AG
OUR GLOBAL PRESENCE
92
AVIATION SERVICES ON SIX CONTINENTS
By the end of 2019, Swissport was operating at 300 airports in 47 countries.
We have a broader global presence than any of our competitors and our NORTH AMERICA
clients benefit from the industry’s widest single-source service portfolio.
Swissport’s global presence in combination with As a global organization, Swissport strives to
our knowledge of the local markets and the provide its international clients with services that
breadth of our service portfolio, is the basis of are consistent around the globe. Therefore,
our continuous success in a competitive environ standardizing our structures and processes
ment. We proudly serve more than 850 corporate continues to be high on our agenda. Our Swissport
clients with airport ground services and air cargo Formula, first introduced in 2008, is a proven
handling at 300 airports globally. set of principles that defines the way we work –
focusing on training and operations. It also serves
With the acquisition of Australian Aerocare in as a framework for standardization. As we
2018, Swissport expanded its footprint to six continue to further digitize our business processes
continents. While Aerocare was originally focused and our service delivery, standardization becomes
on airport ground services, our Australian even more important. It will allow us to unlock
management team moved swiftly to build on the full potential of our industry expertise to
the Group’s service portfolio, launching expan the benefit of our clients.
sion projects into air cargo handling and the
34
airport lounge business. At year-end, work was
under way for the opening of a cargo ware
house in Melbourne, Swissport’s first such facility
in Australia. And in Perth, Australia, the Group’s
first Aspire airport lounge on the continent was
under construction.
SOUTH AMERICASwissport International AG Company Profile 2019 SWISSPORT AT A GLANCE 17
80
EUROPE
20 THE INDUSTRY’S MOST
COMPREHENSIVE NETWORK
ASIA
47 COUNTRIES
45
26EMEA
16Americas
5APAC
AFRICA
64,000 EMPLOYEES
29
> 29,000EMEA
~29,500Americas
> 5,500 APAC
PACIFIC
300
300 AIRPORTS
125EMEA
126Americas
49APAC
AIRPORTS WORLDWIDE18 SWISSPORT AT A GLANCE Company Profile 2019 Swissport International AG
OUR STORY
FROM LOCAL PLAYER TO GLOBAL LEADER
Cargo services Ferrovial
Swissport was incorporated in 1996. Today, the company is the wissport significantly expands
S Spanish construction company
its cargo handling business by Ferrovial purchases Swissport
global leader in airport ground services and air cargo handling, acquiring Cargo Service Center B.V. from British private equity
both based on revenue and the number of airports served. with 61 stations in 15 countries. company Candover.
Candover
British private equity company
Candover purchases Swissport
from Swissair Group.
1996 1998 1999 2000 2002 2004 2005 2006
101 130 153 166 180
Swissport is incorporated Global expansion 25 countries UK expansion Asia expansion
Swissport is incorporated in Expansion to Turkey and Swissport expands to 130 Acquisition of Groundstar Ltd. Swissport acquires Globeground
August 1996 in Switzerland South Africa. Acquisition locations in 25 countries. adds five locations and doubles Korea, adding Seoul to its network
with an initial presence in of DynAir in US and Aer Swissport’s business volume in as the third major station in its
Zurich, Geneva and Basel. Lingus Ground Handling the UK. Asia-Pacific network after Manila
he company subsequently
T in London. and Singapore.
expands into the UK, Germany KLM cargo, SWISS and United
and Brazil. Swissport and KLM conclude a Aviation security
five-year worldwide agreement Swissport diversifies and enters
covering 64 stations. the security business via its
ajor outsourcing agreements
M acquisition of Protectas Aviation
signed with SWISS and United Security Ltd., today branded
Airlines. Checkport.
warded for Best Global Ground
A
Handler five times in a row.
Number of stationsSwissport International AG Company Profile 2019 SWISSPORT AT A GLANCE 19
Growth in Asia-Pacific
Following through on its plan to use
Finnair Servisair Aerocare as a platform for growth,
Swissport wins contract as Swissport substantially Swissport announces plans to open an
ground handling partner for expands its global presence air cargo facility in Melbourne, its
Finnair’s Helsinki hub. by acquiring the ground first in Australia, and to bring its Aspire
handling group Servisair. lounge business to Perth, Australia.
PAI Partners
errovial successfully concludes
F HNA Group
sale of Swissport to PAI Partners. Chinese HNA Group acquires
Swissport from PAI Partners.
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
178 191 266 303
Lufthansa Munich Mexico expansion Middle East Expansion
Swissport-Losch, a joint venture Swissport expands its presence Swissport expands into the
with Losch Airport Service, in Mexico to 28 stations Middle East with start-ups in
wins the handling of Lufthansa’s via a joint venture with AGN Saudi Arabia and Oman.
regional fleet as a major initial Aviation Services.
contract at the Munich hub.
Fueling Apron
Flightcare Swissport invests in its fueling Acquisition of German cargo handler
Swissport acquires business through the acquisi Apron GmbH makes Stuttgart the second-
Flightcare Spain and tion of a majority stake in AFS largest cargo hub of Swissport in Germany,
Belgium. Aviation Fuel Services GmbH. only topped by its Frankfurt facility.
Aerocare
Major expansion in the Asia-Pacific
region: Swissport acquires Aerocare,
the number one ground handler in
Australia / New Zealand.20 SWISSPORT AT A GLANCE Company Profile 2019 Swissport International AG
MARKET REVIEW
Swissport is well positioned to take advantage
FORECASTED ANNUAL
of major trends in the global aviation industry.
3.7 %
GROWTH GROUND SERVICES
FORECASTED ANNUAL
The global economic slowdown became more ROBUST SECTOR GROWTH
4.5 %
GROWTH CARGO HANDLING
pronounced in the fourth quarter of 2019 and
2020 got off to a bumpy start from a macro Historically, passenger and air cargo volumes
economic perspective, as the Covid-19 pandemic have been outperforming GDP growth by over
sent shock waves through the global economy. 50 percent. Despite the challenging economic
environment, the airport ground services sector
In 2019, the world economy grew by just 2.9 AVERAGE SAVINGS BY AIRLINES
is expected to deliver a compound annual
10–25 %
percent, down from 3.7 percent in 2018, ac FROM OUTSOURCING SERVICES
growth rate (CAGR) of 3.7 percent between 2018
cording to the OECD. Last year’s growth was and 2023, according to a Roland Berger industry
the weakest since the global financial crisis report. For air cargo handling we expect a CAGR
of the previous decade and was projected to pick of 4.5 percent. And with the risk of a prolonged
up only marginally to 3.0 percent in 2020. The impact of Covid-19 on aviation, market
escalating international trade conflicts between uncertainty is growing further.
the US and China and between the US and the OUTSOURCED AVIATION
42 %
EU, persisting uncertainty around Brexit, and HANDLING MARKET
As industry estimates predict a potential doubling
rising tensions in the Middle East continue to of global aircraft numbers between 2015 and
weigh on the industry. All this leads to declining 2035, we expect our sector to grow at least in
volumes and increased pricing pressure. line with these figures. With established oper
ations at 300 airports worldwide, Swissport is
Despite the short-term challenges, the medium- well positioned to participate in the sector
term outlook remains positive for Swissport growth.
overall. There are several supporting industry
trends.
MARKET DEREGULATION
The deregulation of airport ground services and
air cargo handling in many countries and regions
continues to open new markets to independent
service providers like Swissport. The trend supports Source: Roland Berger industry reportSwissport International AG Company Profile 2019 SWISSPORT AT A GLANCE 21
our growth and continues to be a positive driver and New Zealand and a strong foothold in Japan
of Swissport’s global expansion. and Korea, it is well positioned to leverage on
this trend.
Swissport’s expansion in the Middle East after
the market was opened to international ground In line with our ambitions to build on our newly
service providers, first into Saudi Arabia and acquired Australian business as a platform for
soon after into Oman, has developed favorably. growth, we launched an initiative to expand our
In 2019, Swissport added Dutch airline KLM, cargo business in the greater Asia-Pacific region.
India-based IndiGo, Fly Jordan from Jordan and The Swissport cargo warehouses in Melbourne
Salam Air from Oman to its growing customer and Sydney will be our first such facilities in
portfolio in the Middle East. The prospects Australia. 2019 also saw our Aspire lounge busi
remain promising. ness expand to Australia with Perth planned to
open next year.
OUTSOURCING
INDUSTRY CONSOLIDATION
Outsourcing of ground services and cargo
handling by airlines has led to an increase in the With the top four players accounting for less
share of the freely accessible aviation handling than 30 percent of the global market, the sector
market to an estimated 42 percent of the total remains fragmented, which supports further
market volume. On average, estimates indicate consolidation. Since its foundation in 1996,
a savings potential from outsourcing ground Swissport has been a driver of consolidation in
services and cargo handling between 10 and 25 the industry. Scale contributes to realizing cost
percent. Low-cost airlines with their focus on synergies with respect to investments. There are
cost efficiency are at the forefront here. With its also synergies in global sales and key account
long-standing partnerships with leading low- management.
cost carriers around the world, Swissport has a
strong position in this growing segment, too, Swissport latest strategic expansion was to
and expects the outsourcing trend to continue. Australia and New Zealand by acquiring
Aerocare in 2018. Last year, the Group introduced
a leaner global structure with just three regions;
GROWTH POTENTIAL IN Americas, EMEA and APAC and consolidated
ASIA-PACIFIC overheads across the organization to unlock
efficiency gains.
Growth in Asia-Pacific remains high. We expect
this to continue to stimulate demand for air
cargo handling and airport ground services. With
Swissport’s leading market position in Australia22 SWISSPORT AT A GLANCE Company Profile 2019 Swissport International AG
2 OBJECTIVES &
STRATEGYSwissport International AG Company Profile 2019 23
Our corporate strategy 25
Our commercial ambitions 26
Our competitive advantage 29
Full range of mission-critical services 30
Competitive cost base 32
Safe and industry-leading operations 34
Global consistency 36
Sustainable stakeholder relations 38
Pricing discipline and commercial
governance 40OUR VISION IS TO BE THE MOST TRUSTED SINGLE-SOURCE GROUND SERVICES AND CARGO HANDLING PROVIDER IN THE AVIATION INDUSTRY.
Swissport International AG Company Profile 2019 OBJECTIVES & STRATEGY 25
OUR CORPORATE STRATEGY
ANCHORED IN A RESILIENT BUSINESS MODEL
Swissport is the world’s leading independent provider of airport
ground services and air cargo handling based on revenue and
the number of airports served.
Swissport is active in airport ground services, Diversity extends to our client structure and our AIR CARGO HANDLING
including a number of adjacent services like geographical presence, too. Our 850 clients
lounge hospitality, and in air cargo handling. worldwide include multinational airlines, low- With some 4.6 million tons of cargo handled,
There are many benefits to this diverse business cost carriers, regional carriers, airports and Swissport is one of the global market leaders
model, ranging from exposure to the economic freight forwarders. The top ten account for 30 in this business segment as well. By the end of
cycle, to profit margins, risk profiles of capex percent of our Group revenue and even our largest 2019, the company was operating 115 air cargo
commitments and even staff training. client contributes just a single-digit percentage warehouses, providing clients with a range of
share of Group revenue. With operations across services for general freight, mail and documents,
With its broad portfolio of services, many of a wide variety of markets, including mature as well as specialist shipments, such as express
which are critical to airline operations, Swissport’s markets and emerging markets in Eastern Europe, services and pharmaceuticals. In 2015, the first
business model is not only diverse, but also Africa, Asia and the Middle East, Swissport Swissport cargo warehouse was certified by the
resilient to short-term volume changes by its can cushion declines in one region with positive IATA Center of Excellence for Independent
airline clients. developments in other regions. Validators in Pharmaceutical Logistics (CEIV
Pharma). 14 Swissport facilities were certified
Airport ground services and air cargo handling under the CEIV Pharma standard, by the British
complement each other perfectly. Cargo AIRPORT GROUND SERVICES MHRA (Medicines and Healthcare products
handling yields higher margins at the cost of Regulatory Agency) or other recognized industry
a steeper risk profile, as Swissport is often Swissport offers its clients ramp handling and associations, by the end of 2019.
committed in long-term lease agreements with passenger services. These include activities
its cargo warehouses. like the movement of aircraft, fueling, de-icing
and anti-icing, baggage handling, as well as
Ground services adds stability to our revenue check-in, gate and security services, and lounge
stream and is a very flexible business. In a hospitality. Our clients can customize the services
market downturn it is reasonably easy to react they wish to source, ranging from a single
by selling or decommissioning equipment, like service to full hub outsourcing. In 2019, Swissport
a push-back tractor, or to adapt our workforce. performed some 2.1 million aircraft turns and
Last, but not least, there are synergies in served 265 million airline passengers, making it
training and resource planning. the undisputed global market leader.26 OBJECTIVES & STRATEGY Company Profile 2019 Swissport International AG
OUR COMMERCIAL AMBITIONS
At Swissport, we are committed to sustainable value creation. We want
to further strengthen our leadership in our core markets and expand
our global presence through targeted investments in emerging markets.
We are driving growth by combining organic STRENGTHENING LEADERSHIP We are also driving our expansion by entering
growth with selective acquisitions and greenfield AND GROWING PROFITABLY IN into framework agreements with existing clients.
developments. Organic growth comes with CORE MARKETS Such agreements contain terms and conditions
business expansions by airline customers or by for ground services or cargo handling, allowing
diversifying our own service portfolio. We also Swissport has grown consistently since its existing clients to better plan their expansion to
support growth by maintaining a loyal customer founding and continues to develop favorably. new locations – provided that Swissport already
base. Partnerships with our ten largest We seek to build on our existing portfolio offers its services there and has infrastructure in
customers date back over ten years. and exploit new opportunities. place. Such agreements actively support our
core-market growth beyond passive growth, which
Large incremental growth opportunities typi With the acquisition of Aerocare in March 2018, occurs when clients expand their business.
cally present themselves when airlines decide Swissport was able to expand its presence to
to outsource parts or all of their ground services Australia and New Zealand and now offers its In addition to realizing profitable growth in core
or cargo handling. services on six continents. By the end of 2019, markets, we intend to expand our presence in
the company was active at 300 airports in 47 the fast-growing Asia-Pacific region and other
The outsourcing of ground services by airlines is countries. The acquisition added about six emerging markets. In combination with our
an industry trend that is leading to dispropor percent to the Group’s business in terms of operations in Japan and Korea, our presence in
tionate growth in demand for aviation service revenue. Australia and New Zealand provides an ideal
providers. We expect to see this trend accelerate platform for this.
further in the wake of the Covid-19 pandemic. Initially, Swissport will be concentrating on
leveraging its presence in Australia and New
Contracts typically have a local and not a regional Zealand by winning new airline customers and
or even global scope. This additionally stabilizes by adding new services to former Aerocare’s
Swissport’s long-term development, as the com traditional offer. In September 2018, following a
mercial impact of contract wins or losses is competitive tender focused on safety, quality
initially a purely local issue. and performance, Air New Zealand chose
Swissport as their ground services provider at
four major Australian airports.Swissport International AG Company Profile 2019 OBJECTIVES & STRATEGY 27
“At Swissport we know how to grow profitably
and we draw on all levers to achieve this growth.”
Matthias Pape – Head of Business Development
OUR LEVERS OF GROWTH EXPAND IN EMERGING MARKETS couple of years, our Omani business has developed
from a greenfield start-up into an established
In aviation services, deregulation is a key driver organization.
of the global market volume expansion. We
expect new opportunities for market entries to Since its inception, Swissport Oman has been
ORGANIC arise from the deregulation in emerging markets. adding prominent brands to its client portfolio –
SELECTIVE
CUSTOMER AND We want to exploit economically viable oppor the customer base today includes flydubai, Air
ACQUISITION
SERVICE LINE tunities when markets open to competition. Arabia, Turkish Airlines, Pegasus Airlines, Air
ACTIVITY
GROWTH New Zealand, and the homebase airline Salam
When we consider market entries, whether Air. In Saudi Arabia, KLM and IndiGo are just
through greenfield developments or an acquisition, some of the latest big-name clients that decided
we maintain a disciplined approach, based on to develop their business with us. Onboarding
commercial rationale and the benefit/risk profile. renowned customers helps us consolidate our
To this end, we will also continue to focus on position as a high quality service provider on the
further developing existing emerging markets Arabian Pensinsula and forms a solid base for
LARGE projects – both by winning new business and future growth. We also note that many customers
GREENFIELD
OUTSOURCING by growing our contract volumes with existing utilize our services across our operations in
DEVELOPMENTS
PROJECTS clients. Oman and Saudi Arabia, realizing operational
synergies.
Where required by local legislation or deemed
beneficial from a business perspective, we seek In emerging markets, too, we capitalize on the
to expand our activities through joint ventures. trend of airlines outsourcing ground services and
Such partnerships can also be an effective vehicle cargo handling. Our business development team
for entering new markets from a risk perspective. continuously analyses opportunities in Eastern
One example was our start-up operation in Europe, Africa, Latin America, the Middle East
Oman that we had established with a local joint and Asia-Pacific.
venture partner, the Al Jarwani Group. In just a28 OBJECTIVES & STRATEGY Company Profile 2019 Swissport International AG
Swissport International AG Company Profile 2019 OBJECTIVES & STRATEGY 29
OUR COMPETITIVE ADVANTAGE
BASED ON DISTINCTIVE SUCCESS FACTORS
Swissport’s competitive advantage is based on a set 1
of distinctive success factors. They are supported by FULL RANGE OF
MISSION-
the Swissport Formula, which defines the way we work. CRITICAL
6
SERVICES
PRICING
2
THE SWISSPORT FORMULA DISCIPLINE AND COMPETITIVE
COMMERCIAL COST BASE
GOVERNANCE
The Swissport Formula is a management
philosophy and a set of principles to support our
distinctive success factors. It helps Swissport
in creating a sustainable competitive advantage
and in executing its corporate strategy.
5 3
SAFE AND
Our aspirations are the same around the globe. SUSTAINABLE INDUSTRY-
Based on innovation, engagement and reliability, STAKEHOLDER LEADING
RELATIONS OPERATIONS
4
we deliver high-quality, tailor-made solutions to
meet the expectations of our clients. That is why
the Swissport Formula is the way we work. GLOBAL
CONSISTENCY
Watch our video to learn more
about the Swissport Formula UNDERPINNED BY
STANDARDIZED
INNOVATION GLOBAL IT
OPERATIONS &
LEADERSHIP SYSTEMS
TRAINING30 OBJECTIVES & STRATEGY Company Profile 2019 Swissport International AG
FULL RANGE OF MISSION-CRITICAL SERVICES
Our customers can turn to us for almost any aviation ground service.
Swissport’s services range from ramp handling, passenger services and
lounge hospitality to air cargo handling and load control.
Swissport offers a wide range of high-quality AIRPORT GROUND SERVICES Swissport served 265 million airline passengers
services in aviation handling, many of which are handled around 4.1 million flights in 2019. This
“mission critical” for our clients. Swissport Swissport generates around 80 percent of its corresponds to roughly one aircraft served by our
customers can choose any degree of vertical revenue with classic ramp handling and passenger ramp personnel every 15 seconds.
outsourcing. This can include selected passenger, services. Ancillary business such as airport lounge
ramp and cargo handling services or a full hospitality, executive aviation and load control
hub outsourcing. The scope of all cooperations is complement our portfolio. Combined with our PASSENGER SERVICES
flexible over time, both geographically and in global network, it provides us with distinct
terms of the services offered. This proves to be service and cost advantages. We strive for client ■ Check-in and Gate
an key selling point for Swissport. partnerships that enable us to move from the ■ Passenger Mobility
provision of selected services to broader service ■ Lounge Hospitality
packages or even integrated hub management – ■ Executive Aviation
as we have successfully established with several ■ Security Services
leading airlines. ■ Lost & Found
In 2019, Swissport accelerated the expansion of
its airport lounge business, which operates under RAMP HANDLING
the Aspire brand. New lounges opened at London
Gatwick and at Edinburgh airports in the UK, ■ Baggage Services
and at Eindhoven airport in the Netherlands. Perth ■ De-Icing
is to become Aspire’s first lounge in Australia. ■ Fueling
At the end of 2019, Aspire managed 48 lounges ■ Moving of Aircraft
at over 30 airports in 13 countries. ■ Central Load Control
■ Aircraft CleaningOBJECTIVES & STRATEGY 31
AIR CARGO HANDLING Swissport also benefits from direct cost savings.
Swissport Brussels piloted the deployment of
Our air cargo business accounts for roughly 20 Cargo kiosks.
percent of our revenue. We handle everything
from general cargo to specialist shipments like Swissport has been using “Cargospot,” a tailored
high-value or temperature sensitive products. cargo handling system for more than 15 years.
Cargospot enables us to handle any carrier with
Swissport keeps adding facilities where it sees our own system. It allows Swissport to optimize
opportunities for profitable growth. The ware its cost base and increase its flexibility towards
house infrastructure at Brussels’s Zaventem airline customers.
Airport is nearing completion of a multi-million
euros refurbishment and expansion. In October In 2019, Swissport handled 4.6 million tons of air
2019, the first part of the new cargo complex, cargo. By the end of the year, the company was
a state-of-the-art Swissport Pharma Center, operating 115 cargo warehouses at airports
was successfully put into operation. Major around the world. 14 Swissport facilities were
expansion projects or market entries are also certified under the CEIV Pharma standard, by
underway in Frankfurt, Germany, and in the British MHRA (Medicines and Healthcare pro
Melbourne, Australia, where Swissport plans to ducts Regulatory Agency) or other recognized
start its first Australian cargo operation. industry associations, by the end of 2019.
In 2016, we had opened a new warehouse in
Ghana, followed in 2017 by Chicago O’Hare.
SERVICES
We also invest in technology and automation at
existing warehouses. Self-service cargo kiosks ■ General & Special Cargo Handling
are one such example. The kiosks enable truck ■ Temperature-Controlled Handling
drivers to skip queues at the counter during such as pharmaceuticals
peak-hours and bypass the manual processing ■ Hub Handling
of paperwork, saving them time that is sometimes ■ Express Services
critical to get a shipment on an earlier flight. ■ Forwarder Handling2
32 OBJECTIVES & STRATEGY Company Profile 2019 Swissport International AG
COMPETITIVE COST BASE
In a market with intense global competition and low margins, it
is essential to keep costs under control to generate sufficient free
cash flow to finance investments and profitable growth.
In recent years, Swissport has developed impres On the regional level, January 2019 saw the in application consolidation and create the foun
sively and profitably through a combination of introduction of a new structure with three instead dation for a data-driven business operating model.
organic growth and inorganic activity. We take of formerly nine regions. With EMEA (Europe,
our strategic decisions with a strong focus on Middle East & Africa), Americas and Asia-Pacific, Swissport has also made good progress in rolling
customer service. At the same time, we are support functions, formerly scattered across local out a standard enterprise resource planning
relentlessly striving to reduce our costs, as organizations, are now concentrated on the (ERP) system within our global Finance organi
competition is intense, and margins are low. regional level. zation. Currently, over 80 percent of the
Group’s revenue is handled through one ERP,
In the autumn of 2019, in light of softening serving as the backbone for all feeder systems
ORGANIZATIONAL DEVELOPMENT market conditions and trading deviations and processes. Our focus remains on finance
compared to budget, Swissport identified 250 process standardization, automation and centrali
Swissport has implemented structural adjust overhead positions to be eliminated. This zation to improve our cost position and further
ments at all levels of the organization. Starting included positions at the head office, which will support our local finance teams in their role as
with Swissport2020 in 2018, we introduced focus even more on support services creating business partners.
global standard operating structures on the value through global alignment and governance.
local level. In addition to improved efficiency and These measures allowed us to start 2020 with In the third quarter of 2019, Swissport introduced
an enhanced service delivery, the program is a cost base that was 20 million euros lower. a new procurement structure featuring global
expected to deliver some 20 million euros of category management, a shared project tracker
recurrent annual savings. It will conclude at the tool and selected agreed suppliers. This will
end of 2020 after delivering its first full-year IT AND FINANCE TRANSFORMATION allow Swissport procurement teams and the
contribution. Going forward, we will take stan supply chain to increase their response time and
dardization a step further by developing a truly IT transformation remains a focus as we work to to better support our operations and customer
consistent way of working, which fully embraces increase IT performance and security. We have service delivery. Beyond enhancing our reaction
process digitalization and allows us to take been preparing to embark on a cloud journey time, the focus of the new procurement structure
advantage of Swissport’s global scale, in other starting in 2021. Critical workloads and appli is to protect our cash and improve our results.
words to enhance the Swissport Formula. Our cations will be migrated to the cloud to reduce It will reinforce our actions on compliance and
focus will be to better support our frontline cost and prepare for a data-driven strategy. safety all along our supply chain around the globe.
colleagues in delivering material benefits for our Standardization of core business and support
customers. services across Swissport is expected to resultSwissport International AG Company Profile 2019 OBJECTIVES & STRATEGY 33 “Efficient staff resource management is vital to creating a competitive cost base.” Artemis Papanika – Head of Planning and Performance Central & Eastern Europe ADVANCED RESOURCE PLANNING Our people are the key asset for a superior service delivery. At the same time, with 64,000 staff on our payroll at the end of 2019, personnel costs are our biggest cost element. Therefore, efficient staff resource management is vital and a constant focus. At Swissport we have been supporting mid-sized airports with technology since 2018. By digitalizing our staff and GSE allocation processes, we are able to manage operational resources more efficiently by optimizing productivity and reducing overtime while never compromising safety. We strive to meet the needs of all business lines across our network and are driving the development of this tech nology and our digital transformation.
3
34 OBJECTIVES & STRATEGY Company Profile 2019 Swissport International AG
SAFE AND INDUSTRY-LEADING OPERATIONS
Around 64,000 dedicated Swissport employees strive to fulfill our
clients’ highest expectations – day in and day out. Above all stands our
unwaivering commitment to a safety-first culture.
A POSITIVE SAFETY TREND SAFETY CULTURE AND LEADERSHIP Swissport pursues a “Just Culture” philosophy,
meaning that the company requests fully open
Swissport aims to be the recognized global Beyond favorable numbers, we have been working reporting of unsafe acts, conditions, incidents
sector leader in health and safety. That is why on a cultural leadership transformation with and accidents. Reports on such events are
we are working relentlessly towards our goal respect to workplace safety. Swissport has a collected and analyzed continuously to prevent
of zero accidents, zero work-related injuries and dedicated team of experts who focus on “Quality, similar incidents. While team leaders, managers
zero illnesses. We are aware our goals are Health, Safety and Environment” (QHSE). or HR managers are the primary reporting
ambitious, but they keep us focused and drive However, safety and other aspects of QHSE must channels, employees have the option to report
continuous improvement. not be delegated. While the overall account incidents via our external “SpeakUp” hotline,
ability ultimately rests with the Board of Directors introduced in 2019. SpeakUp includes an online
And our efforts are paying off. In 2019, the “lost and the Group Executive Management, utmost and telephone service, enabling employees to file
time injuries frequency rate” (LTIFR), which is a attention and focus by every manager, every reports in full confidentiality and anonymously.
key performance indicator (KPI) measuring the team leader and every frontline worker is
number of injuries leading to workplace absences, required in daily service delivery activities.
was 29 percent below the 2015 level. This is a SAFETY INITIATIVES AND INDUSTRY
significant improvement over 2018, when the Thanks to our Safety and Health Improvement STANDARDS
KPI improved by 19 percent versus 2015. Aircraft Program (SHIP) we were able to establish an
damages per one thousand turns, another effective incident reporting culture. Today, our Swissport’s corporate head office has been ISAGO
safety KPI, also improved. In 2019, it was down staff and management are aware that they (IATA Safety Audit for Ground Operations)
20 percent from 2015 after 19 percent in 2018. all play an active role in mastering the daily registered since 2010 and by the end of 2019,
We are encouraged by the progress but will have challenge of fulfilling high client expectations 19 locations across its global network were
to intensify our efforts beyond 2020 to reach while always putting safety first. There is zero also ISAGO-registered.
our goal of a 50 percent reduction versus 2015 tolerance when it comes to any shortcuts in
for both KPIs. procedures.Swissport International AG Company Profile 2019
“Safety cannot be delegated. It is
everybody’s responsibility to adhere
to safety measures and to support
others in doing so.”
Alexandre Bolay – Head of Global QHSE
Swissport has developed its own integrated DIGITIZATION AND TECHNOLOGY
management system, which conforms to current
industry standards including the international Continuous innovation has been a catalyst for
quality management norm ISO 9001:2015 as well enhanced service delivery and greater efficiency.
as the sector-specific IATA Ground Operations It ensures that we maintain our competitive
Manual (IGOM) and the ISAGO standard. By edge and our position as the industry’s partner
aligning Swissport’s Management System with of choice.
ISAGO and IGOM standards all locations that
have implemented this management approach Standard digital applications, which have been
automatically became ISAGO-compliant. around for some time, include frontline self-
service applications, such as kiosks, web, mobile
Swissport also invests in hands-on initiatives. check-in combined with bag-drop services. We
Together with Auxivo, a spin-off of ETH, the took self-service a step further at Swissport by
Swiss Federal Institute of Technology, we have introducing kiosks at selected cargo warehouses
developed and tested operational support to speed up the delivery of shipments at
gear for employees in physically demanding jobs. trucking gates and their transfer to the aircraft.
The “LiftSuit” is a wearable exoskeleton that The use of technology and digitization, such
helps prevent musculoskeletal injuries from as cloud-based platforms with real-time data
baggage handling. At the IATA Ground Handling reporting across our operations, helps enhance
Conference in Madrid, Swissport was awarded our performance and facilitates improved
with the “Innovator Award 2019” for this inno tracking and tracing. Furthermore, we are running
vation. In fall 2020, following further im pilots with advanced resource planning soft
provements, the LiftSuit is scheduled to be intro ware, which have delivered promising results.
duced for long-term testing at the airports in
Basel and Zurich, Switzerland, with the aim of
improving the wearing comfort of the suit.36 OBJECTIVES & STRATEGY Company Profile 2019 Swissport International AG
GLOBAL CONSISTENCY
Consistency in the delivery of our services is a key success factor
for Swissport. We can only realize our full potential through rigorous
standardization. The Swissport Formula helps us achieve this.
Swissport provides aviation services at some 300 At Swissport we never compromise on health,
airports on six continents, and our aspirations safety, security or the environment. They are
are the same around the globe. With our commit fundamental principles on which the Swissport
ment to reliability, dedication and innovation, Formula is based and that we stand for. We
we strive to provide our customers with consistent, measure our performance against the expec
high-quality solutions. tations of our customers and our own goals.
This include security, service quality, process
efficiency as well as environmental, commercial
THE SWISSPORT FORMULA and financial aspects. We also strive to con
tinuously improve as an employer, a business
Consistency is key: That is why the Swissport partner and in terms of our cost base.
Formula is “The Way We Work.” More than ten
“Consistency is key: That is
years after the Formula’s inception, its principles Despite the Swissport Formula being solidly
still drive our success. They define the global anchored in our corporate DNA, maintaining
operational and organizational standards our consistency in processes and structures demands why the Swissport Formula
staff comply with. To deliver on these standards, constant effort. This is true for any large orga
we train our employees at the highest level nization and it rings even more true in organi is ‘The Way We Work ’.”
and offer attractive career paths and progression. zations expanding at the rate Swissport has been
This is recognized by over 20 airlines, airports growing its business. In just under 25 years since Matthias Hüttner – Head of Global Operations
or authorities that accept Swissport training the company’s foundation in 1996, Swissport has
material as being equal to, or of higher quality evolved from a local player with three locations
than their own. in Switzerland into a global leader active across
six continents.Swissport International AG Company Profile 2019 OBJECTIVES & STRATEGY 37
SWISSPORT2020 We continue to work on the realization of cost
savings beyond Swissport2020. The variance in
Thanks to Swissport’s rapid growth, many the number of employees required to deliver
structures and processes have remained local. certain service volumes, which we still observe
While our service quality may still fulfill the across the organization, cannot be explained by
expectations of our customers, irrespective of customer requirements, local regulation and
exact process consistency, our inconsistent infrastructure constraints alone. Efficiency gaps
structures and processes make steering the make it challenging to implement a global
business more complicated. Varying operational pricing strategy. We are committed to continue
or commercial processes also make client working on this to increase our commercial
interactions more complex. We know that our performance, and ultimately to improve our
larger clients expect global solutions for their results and our ability to invest.
global needs. Therefore, we continue to focus on
bringing global consistency to the next level. Last, but not least, we are working on standard
job roles to reduce the complexity of our training
Swissport2020 has contributed to remedy these and improve staff qualification. This will also
issues. It has introduced global standard opera support our efforts to compete for talent and
ting structures and strengthened our ability to improves the flexibility of our staff when
serve our customers with a consistent service switching between locations.
according to the principles of our Swissport
Formula. The program also increased our efficiency
and is expected to deliver some 20 million euros
of recurrent annual cost savings. Swissport2020
launched in 2018 and will formally conclude at
the end of 2020.5
38 OBJECTIVES & STRATEGY Company Profile 2019 Swissport International AG
SUSTAINABLE STAKEHOLDER RELATIONS
When airlines outsource, they entrust us with mission-critical services,
and they rely on our employees to meet their standards. Mutual trust and
open dialogue are crucial for the success of such partnerships.
OPEN DIALOGUE With so many passenger contacts on behalf of believe that Swissport has improved its services,
our airline clients, mutual trust and open dia while 40 percent think that customer relations
Strong and resilient relationships with key logue are crucial for positive long-term relation have been enhanced. Among the criteria that
stakeholders are essential in any service busi ships. Sustainable customer and stakeholder were rated, Swissport customers are most
ness. This particularly rings true in the aviation relations are therefore key to our success. satisfied with the relationship with their primary
services business. When outsourcing mission- contacts and their level of professionalism.
critical services, our customers place their We also listen closely to what our customers
success in our hands. This fills us with a strong have to say and carefully analyze their feedback.
sense of responsibility. In passenger services, Our latest customer survey was carried out in
our employees are often the first faces our early 2020. It covered topics such as service
clients’ customers see. quality, client relationships and the perceived
professionalism of our staff. The annual survey
With over 3,700 client contracts, Swissport results serve as a lever for continuous improve
currently services some 850 corporate clients. ment, allowing us to focus on aspects creating
In 2019, our employees served over 265 million added internal and external value. Of the more
airline passengers in face-to-face interactions, than 250 participants who answered our questions,
often in collaboration with third-party providers. over 30 percent of the customers surveyed
“With so many passenger contacts on
behalf of our airline clients, mutual
trust and open dialogue are crucial for
positive long-term relationships.”
Steen Pedersen – Head of Global CommercialSwissport International AG Company Profile 2019 39 FLEXIBLE COOPERATION MODELS To benefit from lower operating costs and specialist expertise, airlines around the globe continue to turn to outsourcing for their ground services, even at their home base airports. Swissport clients can select any combination of services, ranging from specific services to a full outsourcing of passenger services, ramp handling as well as cargo handling. With its broad service portfolio, Swissport offers clients a “one-stop shop” in service integration, should they so desire. Our commitment to sustainable stakeholder relations helps us build longstanding partner ships with airport operators and airlines alike. In addition to Swissport’s presence at 300 airports on six continents, having the industry’s most complete aviation service portfolio is one of our key competitive advantages. We continue to selectively grow our service offering across our network to provide an even more complete geographic coverage and a broader portfolio of services at each of the airports we serve. We are currently preparing to launch cargo operations in Melbourne and Sydney and will also enter the Australian market with our Aspire Airport Lounges, leveraging our recent expansion into Australia and New Zealand for lateral growth. By signing framework agreements airline cus tomers can secure general terms for the delivery of a range of ground services and cargo handling services that apply whenever they expand to new locations where Swissport already offers its services. Such agreements can reduce the complexity of client relationships and allow for more flexible and swift service adjustments.
6
40 OBJECTIVES & STRATEGY Company Profile 2019 Swissport International AG
PRICING DISCIPLINE AND COMMERCIAL GOVERNANCE
The focus on sustainable value creation in our business decisions contributes to
Swissport’s reliability as a business partner. State-of-the-art commercial systems
support us in making the right choices, together with our airline customers.
PRICING DISCIPLINE offering. This is ultimately to the benefit of our This new state-of-the-art solution supports our
customers who know they can count on employees with a host of commercial appli
We apply our sustainable business principles, as Swissport and plan on us being a reliable partner cations that ensure we maintain a disciplined
laid out in our Swissport Formula, to all our stake for the long term. approach to pricing, within a robust gover
holders, including – of course – our clients. As nance framework. From a strategic standpoint,
a reliable airline partner, we want to deliver as it delivers complete transparency for senior
promised and therefore, we are flexible when COMMERCIAL GOVERNANCE management to make decisions on commercial
participating in public tenders, but responsible matters and direct the business in a more
and disciplined in our pricing. With Swissport’s The Commercial Steering Committee is a govern effective and efficient way.
competitive cost base, coupled with the quality ing body that assesses, reviews, and makes
and consistency of our service delivery, we enter recommendations on how the commercial teams In the markets, Salesforce allows our sales mana
public tenders with confidence and ambition. should manage and negotiate business cases gers and our key account managers to access
However, we do not compete under terms that to maximize our financial and operational perfor the latest information available through real-
do not make sense to us from an economic per mance whilst minimizing risk. time reporting dashboards in a cloud-based
spective or that cannot be maintained over the system. This new, sophisticated data and infor
long-term. This underlines our firm commitment In January 2018, we successfully started the roll mation sharing platform enables our front-line
to sustainable stakeholder and client relations, out of “Salesforce”, our new commercial manage sales managers to engage with our clients in a
which is based on a deep understanding of the ment tool, bringing Swissport’s commercial well-informed and consistent manner to deliver
business and a detailed global costing template. steering to our exacting standards as a leading the right solutions.
global operator. The tool was set up over a six-
Just as we focus on value creation in new agree month period, drawing on the experiences and The adoption of the tool across Swissport’s global
ments, we may seek to apply corrective measures business requirements expressed by our work operations is progressing according to plan.
to existing contracts in open and transparent force to ensure that the resulting solution was The number of active users of the Salesforce tool
consultations with our customers, should market fit for purpose. has increased from 200 to 300 during 2019.
conditions or the operating environment change. Going forward, it will support improved pricing
Our disciplined commercial approach contributes discipline and commercial governance at
to the stability of our network and our service Swissport.You can also read
