Heathrow Fi.29 Regulatory News (80CX)

TRADING STATEMENT FOR THE 3 MONTHS

ENDED 31 MARCH 2025

Passenger demand remains strong - Passenger demand in the first quarter of 2025 remained level with last year's record performance, despite the busy Easter holidays falling in Q2 this year and the leap year in 2024. The National Energy System Operator and Kelly Reviews into the North Hyde substation fire and response are due to report initial findings in May.

Delivering a good service safely remains our priority - Punctuality is now close to record highs with over 81% of flights leaving on-time, nearly 99% of bags travelling on their flights as expected and 97% of passengers waiting less than 5 minutes at security. We remain focussed on improving passenger experience, and we were proud to be recognised as the Best UK Airport by Travel Weekly for the fourth consecutive year. The first phase of our refreshed VIP service The Windsor also launched in Q1, providing guests with a dedicated discreet, luxurious and personalised service.

Growing range of destinations served this summer - Heathrow is the world's most connected airport. Whether passengers are chasing sunshine, history, or adventure, nine new routes launching for summer 2025 will give them even more choice than ever when planning their next adventure. New long-haul connections include Cancun in Mexico, Ottawa in Canada and Kuala Lumpur in Malaysia, as well as new short-haul services to Rimini in Italy, Tbilisi in Georgia and Santiago de Compostela in Spain.

Future business plan will deliver tangible benefits for customers - We have undertaken extensive engagement with our airline partners to shape our H8 business plan over 2027 to 2031. The plan will outline the outcomes that customers can expect and provide value for our customers with the aim to submit the plan to the CAA this summer. The CAA published their final H8 methodology, reaffirming the importance of RAB-based regulation for Heathrow's financeability and supporting many positions set out in Heathrow's response. Alongside the method statement reflecting the UK Government's support for Heathrow expansion, the CAA has issued a letter outlining their intention to set a separate review on the approach to costs of capacity growth (terminal and runway). The H8 timeline has been delayed, with the final decision now expected in April 2027 (after the start of the H8 period) and a 2027 holding cap to be based on CAA's Initial Proposals (March 2026).

Unlocking new capacity at the UK's gateway to growth - Work continues at pace towards the submission of our proposal to Ministers by the summer. Our plans would be entirely privately funded and have the potential to kickstart economic growth across the whole of the UK from construction through to operation. Depending on the Government's response, we would aim to meet their ambition to secure planning permission in this Parliament and for the runway to be operational by 2035. New capacity would boost competition and choice for consumers, drive economic growth for the UK and improve operational resilience at the UK's hub airport.

Robust Q1 EBITDA - In the first three months of 2025, the Group's revenue increased by 2.1% to £825 million (2024: £808 million). The higher revenue was driven by more long-haul flying, and improved property and retail income. Adjusted operating costs increased by 1.6% to £371 million (2024: £365 million) due to higher costs from PRM services, cleaning and maintenance. Utilities and other costs also increased on account of noise and vortex mitigating activities and inflation. These cost increases were partially offset by lower employment costs. Adjusted EBITDA increased 2.5% to £454 million (2024: £443 million). As a result of our strong operational and financial performance in 2024, on 7 March 2025 a payment of £250 million was made by FGP Topco Limited to our ultimate shareholders, marking our first dividend payment in five years. 

Outlook - The performance outlook for 2025 remains consistent with the forecasts published in our Investor Report on 13 December 2024. We expect overall passenger demand in 2025 to exceed 2024. 

Disclaimer

These materials contain certain statements regarding the financial condition, results of operations, business and future prospects of Heathrow. All statements, other than statements of historical fact are, or may be deemed to be, "forward-looking statements". These forward-looking statements are statements of future expectations and include, among other things, projections, forecasts, estimates of income, yield and return, pricing, industry growth, other trend projections and future performance targets. These forward-looking statements are based upon management's current assumptions (not all of which are stated), expectations and beliefs and, by their nature are subject to a number of known and unknown risks and uncertainties which may cause the actual results, prospects, events and developments of Heathrow to differ materially from those assumed, expressed or implied by these forward-looking statements. Future events are difficult to predict and are beyond Heathrow's control, accordingly, these forward-looking statements are not guarantees of future performance. Therefore, there can be no assurance that estimated returns or projections will be realised, that forward-looking statements will materialise or that actual returns or results will not be materially lower than those presented.

All forward-looking statements are based on information available at the date of this document. Accordingly, except as required by any applicable law or regulation, Heathrow and its advisers expressly disclaim any obligation or undertaking to update or revise any forward-looking statements contained in these materials to reflect any changes in events, conditions or circumstances on which any such statement is based and any changes in Heathrow's assumptions, expectations and beliefs.

These materials contain certain information which has been prepared in reliance on publicly available information (the "Public Information"). Numerous assumptions may have been used in preparing the Public Information, which may or may not be reflected herein. Actual events may differ from those assumed and changes to any assumptions may have a material impact on the position or results shown by the Public Information. As such, no assurance can be given as to the Public Information's accuracy, appropriateness or completeness in any particular context, or as to whether the Public Information and/or the assumptions upon which it is based reflect present market conditions or future market performance. The Public Information should not be construed as either projections or predictions nor should any information herein be relied upon as legal, tax, financial, investment or accounting advice. Heathrow does not make any representation or warranty as to the accuracy or completeness of the Public Information.

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Any reference to "Heathrow" means Heathrow (SP) Limited (a company registered in England and Wales, with company number 06458621) and will include its parent company, subsidiaries and subsidiary undertakings from time to time, and their respective directors, representatives or employees and/or any persons connected with them.

These materials must be read in conjunction with the Heathrow (SP) Limited annual report and financial statements for the year ended 31 December 2024.