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Princess Cruises And Fincantieri Sign Contracts For Two Next-Generation Cruise Ships

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Princess Cruises and Fincantieri announced today the signing of the final contracts for the construction of two next-generation 175,000-ton cruise ships, which will be the largest ships ever built so far in Italy, with deliveries scheduled in Monfalcone in late 2023 and in spring 2025. This announcement follows the initial signing of a memorandum of agreement between the two parties in July 2018.

The vessels will each accommodate approximately 4,300 guests and will be based on a next-generation platform design, being the first Princess Cruises ships to be dual-fuel powered primarily by Liquefied Natural Gas (LNG). LNG is the marine industry’s most environmentally friendly advanced fuel technology and the world’s cleanest fossil fuel, which will significantly reduce air emissions and marine gasoil usage.

“Princess Cruises continues to grow globally — adding new ships to our fleet built by our long-time trusted ship building partner, Fincantieri, who brings decades of expertise to these next-generation cruise ships,” said Jan Swartz, Princess Cruises President. “Even more exciting is that these two ships are being designed to include our MedallionClass platform, powered by OceanMedallion, the most advanced wearable device available within the global hospitality industry.”

Giuseppe Bono, CEO of Fincantieri, commented on the announcement: “This result proves, once again, the trust we receive from the market, which allows us to look to the future with ambition. It honors our great work focused on innovation thanks to which we have been able to offer to the client a record-breaking proposal not only in terms of size. Besides we firmly believe that a new class of Princess Cruises’ ships, one of Carnival Group’s top brands, can stem from this promising project. In fact, for Princess Cruises, we have received orders for 21 ships, another unprecedented result in this industry.”

Considered a breakthrough in the vacation industry and recently honored with a CES® 2019 Innovation Award, the OceanMedallion is leading-edge technology that delivers personalized service on a large scale through enhanced guest-crew interaction, as well as enabling interactive entertainment. Guests are currently experiencing Princess MedallionClass vacations onboard Caribbean Princess and Regal Princess. By the end of the year, MedallionClass vacations will be activated on three additional ships, Royal Princess, Crown Princess and Sky Princess.

Cruise Lines International Association (CLIA) and United Nations reported that growth in the number of people cruising between 2004 and 2014 outpaced land-based vacations by over 20 percent, and CLIA projects 30 million people will take an ocean cruise in 2019, an all-time record. These stats signal a bright future for the cruise industry, as well as for professional travel advisor partners enthusiastic for more inventory to meet the growing demands for cruising.

With five ships being built over the next six years, Princess Cruises is the fastest growing premium cruise line in the world.

One of the best-known names in cruising, Princess Cruises is the fastest growing international premium cruise line and tour company operating a fleet of 17 modern cruise ships, carrying two million guests each year to 380 destinations around the globe, including the Caribbean, Alaska, Panama Canal, Mexican Riviera, Europe, South America, Australia/New Zealand, the South Pacific, Hawaii, Asia, Canada/New England, Antarctica and World Cruises. A team of professional destination experts have curated 170 itineraries, ranging in length from three to 111 days and Princess Cruises is continuously recognized as “Best Cruise Line for Itineraries.”
In 2017 Princess Cruises, with parent company Carnival Corporation, introduced MedallionClass Vacations enabled by the OceanMedallion, the vacation industry’s most advanced wearable device, provided free to each guest sailing on a MedallionClass ship. The award-winning innovation offers the fastest way to a hassle-free, personalized vacation giving guests more time to do the things they love most. MedallionClass Vacations will be activated on five ships by the end of 2019. An activation plan will continue across the global fleet in 2020 and beyond.
Princess Cruises continues its multi-year, “Come Back New Promise” – a $450 million-dollar product innovation and cruise ship renovation campaign that will continue to enhance the line’s onboard guest experience. These enhancements result in more moments of awe, lifetime memories and meaningful stories for guests to share from their cruise vacation. The product innovations include partnerships with award-winning Chef Curtis Stone; engaging entertainment inspired shows with Broadway-legend Stephen Schwartz; immersive activities for the whole family from Discovery and Animal Planet that include exclusive shore excursions to onboard activities; the ultimate sleep at sea with the award-winning Princess Luxury Bed and more.
Three new Royal-class ships are currently on order with the next new ship under construction, Sky Princess, scheduled for delivery in October 2019, followed by Enchanted Princess in June 2020. Princess has announced two new (LNG) ships which will be the largest ships in the Princess fleet, accommodating approximately 4,300 guests are planned for delivery in 2023 and 2025.  Princess now has five ships arriving over the next six years between 2019 and 2025. The company is part of Carnival Corporation & plc (NYSE/LSE: CCL; NYSE:CUK).

Fincantieri is one of the world’s largest shipbuilding groups and number one for diversification and innovation. It is leader in cruise ship design and construction and a reference player in all high-tech shipbuilding industry sectors, from naval to offshore vessels, from high-complexity special vessels and ferries to mega yachts, as well as in ship repairs and conversions, production of systems and mechanical and electrical component equipment and after-sales services.
With over 230 years of history and more than 7,000 vessels built, Fincantieri has always kept its management offices, as well as all the engineering and production skills, in Italy. With over 8,600 employees in Italy and a supplier network that employs nearly 50,000 people, Fincantieri has enhanced a fragmented production capacity over several shipyards into a strength, acquiring the widest portfolio of clients and products in the cruise segment. To hold its own in relation to competition and assert itself at global level, Fincantieri has broadened its product portfolio becoming world leader in the sectors in which it operates.
With globalization, the Group has around 20 shipyards in 4 continents, over 19,000 employees and is the leading Western shipbuilder. It has among its clients the world’s major cruise operators, the Italian and the US Navy, in addition to several foreign navies, and it is partner of some of the main European defense companies within supranational programs.
Fincantieri’s business is widely diversified by end markets, geographical exposure and by client base, with revenue mainly generated from cruise ship, naval and offshore vessel construction. Compared with less diversified players, such diversification allows it to mitigate the effects of any fluctuations in demand on the end markets served.
www.fincantieri.com

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Strongest year-by-year growth in a decade expected

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The number of business trips and the cost of those trips is set to rise in 2019, according to the 14th annual International Travel Management Study (22 October 2018). Almost half (45 percent) of the 777 corporate travel managers surveyed by AirPlus in 24 countries expect their company to travel more in the year ahead. That figure is up from 35 percent in 2018 and the highest since the global financial crisis of the late 2000s.

Only 10 percent of travel managers believe their company will travel less, while 44 percent expect no change. India is the country where the highest number of travel managers (83 percent) forecast more trips in 2019. In contrast, 33 percent of Russian travel managers, more than any other country, predict less travel.

Travel managers are economic optimists

Almost half (46 percent) of travel managers expect the global economy to affect business travel positively in 2019. That is well up on last year (27 percent) and the highest figure in the six years the study has asked this question. Only 16 percent of travel managers expect the economy to affect business travel negatively, down from 20 percent in 2018.

The optimism among travel managers may seem surprising given several risks threatening to slow the global economy in 2019, including Brexit, slower growth in the Chinese economy and international trade disputes. But at time of writing the International Monetary Fund’s 2019 forecast is for global GDP growth of 3.5 percent (slower than 2018 but still a relatively high figure), and business travel volume and GDP have long been shown to correlate.

Expect business travel to cost more in 2019

The almost inevitable consequence of more travel is more cost, and sure enough, 51 percent of travel managers expect their company to increase its travel spend in 2019 — up from 41 percent in 2018.

“Our travel managers’ prediction of increased corporate travel highlights the importance that business travel has gained over the years. Regardless of any possible positive or negative effects of the global economy, travel managers consider business travel to be necessary and essential in order to gain new business and meet corporate challenges”, says Yael Klein, a marketing director. “But more travel also means companies need to pay increased attention to controlling their rising spend. Luckily, there are many excellent tools and techniques to help track and manage travel spend. 2019 is definitely the year to put these good travel management practices in place, or review them if you already have a strong managed program.”

Action points recommended to control budgets include:

  • Make sure you have a good corporate payment solution providing the best possible travel spend data.
  • Review your policy to identify fresh potential savings.
  • Re-visit your supplier deals. If you have more spend, you also have more spending power.
  • Communicate. Tell your travelers that costs are increasing

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Fraport 2018 Fiscal Year: Revenue and Earnings Increase Significantly

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Fraport

Boards propose dividend increase to EUR2 – Outlook remains positive
In the 2018 fiscal year (ending December 31), Fraport AG continued on
its growth path, achieving new records in revenue and earnings.
Supported by strong passenger growth at its Frankfurt Airport home
base and its Group airports worldwide, revenue climbed by 18.5
percent to nearly EUR3.5 billion. After adjusting for revenue related
to capital expenditure for expansion measures at the international
Group companies (based on IFRIC 12), revenue rose 7.8 percent to over
EUR3.1 billion. About two-thirds of this increase can be attributed
to Fraport’s international portfolio – with the airports in Brazil
and Greece, in particular, making a significant contribution.
Fraport AG’s executive board chairman Dr. Stefan Schulte said: “We
are pleased to look back on another very successful year, especially
for our Group airports around the world. Here in Frankfurt, however,
2018 presented challenges due to the constraints in European airspace
and the strong traffic demand. For the medium and long term, we are
very well positioned both at Frankfurt Airport and in our
international business. Moreover, we are laying the foundations for
further long-term growth by implementing our expansion projects.”
Revenue and earnings targets achieved
The operating result (Group EBITDA) climbed markedly by 12.5 percent
to over EUR1.1 billion. The Group result (net profit) rose even
stronger, by 40 percent to EUR505.7 million. This includes earnings
gained from the sale of Fraport’s stake in Hanover Airport, which
contributed EUR75.9 million. However, even without the positive
effects from the Hanover transaction, Fraport already achieved its
revenue and earnings targets. Operating cash flow slightly dipped by
2.0 percent to EUR802.3 million. This was mainly due to changes in
the net current assets related to the reporting date. After adjusting
for these changes, operating cash flow rose by 18.8 percent to
EUR844.9 million. In line with expectations, free cash flow fell
sharply by 98.3 percent, because of more extensive capital
expenditure for Frankfurt Airport and Fraport’s international
business, while remaining in positive territory at EUR6.8 million.
Given the positive business development, the Executive Board and
Supervisory Board will propose to the Annual General Meeting that the
dividend be raised to EUR2.00 per share for the 2018 fiscal year
(2017 fiscal year: EUR1.50 per share).
Passenger traffic rises noticeably at FRA and internationally
Serving some 69.5 million passengers, Frankfurt Airport (FRA)
achieved a new passenger record in 2018 and growth of 7.8 percent
compared to 2017.
CEO Schulte commented: “We are pleased that the airlines have
significantly expanded their flight offerings at Frankfurt Airport
for the second year in a row, thus improving connectivity and
prosperity for businesses far beyond the Frankfurt Rhine-Main Region.
Until the first pier of the new Terminal 3 opens in late 2021, we
will focus on maintaining a high level of service quality at
Frankfurt Airport – while dealing with the constraints affecting the
entire aviation industry. In particular, enhancing the situation at
the security checkpoints will be a top priority for us.”
In response to strong passenger growth, Fraport hired over 3,000 new
staff members at Frankfurt Airport in 2018. Despite the constraints
experienced at some central process points in the terminals during
peak periods – particularly at the security checkpoints – global
satisfaction of passengers with Frankfurt Airport was at 86 percent
in 2018 – thus even posting a slight increase compared to the
previous year (2017: 85 percent). To provide additional space for
security checkpoints, Fraport is investing in an extension to
Terminal 1 for installing seven extra security lanes in the summer of
2019.
Fraport’s international portfolio also posted a significant gain in
passenger traffic during 2018. In Brazil, the two airports of Porto
Alegre and Fortaleza reported a 7.0 percent increase to 14.9 million
passengers in 2018 – Fraport Brasil’s first year of operating these
airports. At the 14 Greek airports, traffic rose by almost 9 percent
to 29.9 million passengers. Antalya Airport in Turkey grew by a
significant 22.5 percent to 32.3 million travelers, a new historic
passenger record.
Outlook: Growth expected to continue
Fraport is forecasting sustained growth at all of the Group airports
in fiscal year 2019. At Frankfurt Airport, passenger volume is
expected to rise between around two and roughly three percent.
Fraport expects consolidated revenue to increase slightly up to
around EUR3.2 billion (adjusted for IFRIC 12). Group EBITDA is
expected to reach a range of around EUR1,160 million and
approximately EUR1,195 million, despite the non-recurring revenue
from the sale of Fraport’s stake in Hanover Airport. The application
of the IFRS 16 accounting standard – which changes the accounting
rules for leases – will not only make a positive contribution to
Group EBITDA, but will also lead to much higher depreciation and
amortization in fiscal year 2019. As a result, Fraport expects Group
EBIT to be in the range of about EUR685 million and around EUR725
million. The company also expects to post a Group result (net profit)
of around EUR420 million and about EUR460 million. The dividend per
share is expected to remain stable at the higher level of EUR2 for
the 2019 fiscal year.
Fraport’s four business segments at a glance
Revenue in the Aviation segment increased by 5.5 percent to slightly
over EUR1 billion. This was due partly to higher revenue from airport
charges resulting from increased passenger traffic at Frankfurt
Airport. At EUR277.8 million, segment EBITDA increased by 11.3
percent year-on-year, while segment EBIT rose 6.5 percent to EUR138.2
million.
Revenue from the Retail & Real Estate segment dropped 2.8 percent
year-on-year to EUR507.2 million. A major reason for this drop was
significantly fewer proceeds from the sale of land (EUR1.9 million in
the 2018 fiscal year versus EUR22.9 million for the same period in
2017). In contrast, parking income (+ EUR8.3 million) and retail
revenue (+ EUR0.8 million) grew. Net retail revenue per passenger
fell 7.4 percent year-on-year to EUR3.12. Segment EBITDA increased by
3.4 percent to EUR390.2 million, while segment EBIT climbed 2.8
percent to EUR302.0 million.
Revenue in the Ground Handling segment rose by 5.0 percent
year-on-year to EUR673.8 million. The strong growth in passenger
traffic resulted, in particular, in stronger revenue from ground
services and higher infrastructure charges. On the other hand,
passenger growth also led to higher personnel expenses at the
FraGround and FraCareS subsidiaries. Accordingly, segment EBITDA
declined by EUR7.0 million to EUR44.4 million. Segment EBIT dropped
considerably by 94 percent, but at EUR0.7 million still remained in
positive territory.
At nearly EUR1.3 billion, the International Activities and Services
segment significantly advanced by 58 percent compared to the previous
year. After adjusting for the EUR359.5 million in revenue related to
IFRIC 12, the segment’s revenue rose by 20.1 percent to EUR931.4
million. This revenue growth received major contributions from the
Group subsidiaries in Fortaleza and Porto Alegre (+ EUR90.9 million),
as well as Fraport Greece (+ EUR53.2 million). Segment EBITDA
increased a noticeable 28.3 percent to EUR416.6 million, while
segment EBIT jumped 40.7 percent to EUR289.6 million.
You can find our 2018 Annual Report and the presentation from the
press conference on our financial statements (as of 10:30 a.m.) on
the Fraport AG website.

MEDIA CONTACT: Fraport AG, Torben Beckmann, Corporate Communications, Media Relations, 60547 Frankfurt, Germany, E-mail: t.beckmann@fraport.de

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