27 June 2025

Heathrow Funding Limited

Heathrow Finance plc

Publication of June 2025 Investor Report

On behalf of Heathrow Airport Limited, Heathrow Express Operating Company Limited, Heathrow (AH) Limited and Heathrow (SP) Limited ("Heathrow SP"), LHR Airports Limited (as Security Group Agent) is today distributing its semi-annual Investor Report to various parties pursuant to the terms of the Common Terms Agreement entered into on 18 August 2008 (as amended) (the "CTA").

The Investor Report is also being distributed by Heathrow Finance plc ("Heathrow Finance") to various parties pursuant to Heathrow Finance's £275 million 3.875% Senior Secured Notes dated 5 June 2017 and due 2027, the £300 million 4.125% Senior Secured Notes dated 15 November 2019 and due 2029 and the £400 million 6.625% Senior Secured Notes dated 19 March 2024 and due 2031  (the "Heathrow Finance Bonds"), a note purchase agreement dated 14 September 2018 (the "Note Purchase Agreement") and pursuant to Heathrow Finance's facilities agreements dated 22 November 2018, 23 November 2018, 1 February 2019, 8 May 2019, 16 August 2019 and 2 December 2019 (the "Heathrow Finance Facilities Agreements").

The Investor Report contains information relevant to creditors of both Heathrow SP (and its subsidiaries) and Heathrow Finance.

The attention of potential readers of the Investor Report is drawn to page 2 of the document, which contains an Important Notice, including in relation to certain forward-looking statements included in the Investor Report, and contains a description of the basis on which the operational and financial information included in the document has been prepared.

The Investor Report includes an updated forecast for 2025 for the financial performance of Heathrow SP prepared on a consolidated basis, forecast nominal debt and financial ratios for Heathrow SP and Heathrow Finance. Heathrow SP, through its indirect subsidiary, Heathrow Airport Limited, owns Heathrow Airport.

This report sets out the actual financial performance and ratios for Heathrow (SP) in 2024 and forecast figures for 2025, together with key business updates. Additional information specific to Heathrow Finance is set out in Appendix 5.

In the five months to May 2025, we have seen strong demand in traffic at Heathrow with 32.6 million passengers travelling through the airport. For 2025, we continue to forecast passenger traffic of 84.2 million (+0.5% vs FY24) - in line with Q1 guidance and the December Investor Report forecast driven by an increase in passenger movements with leisure demand remaining strong.     

2025 revenue is forecast to improve versus the December 2024 Investor Report as we see more long-haul flying than initially anticipated. However, higher operating costs are also forecast for 2025 due to ongoing cost pressures including security requirements demanding more resources, additional service mitigations and higher contractual costs due to National Insurance. This means the adjusted EBITDA is expected to decrease 3% year on year although slightly ahead of December Investor Report forecast.

We have delivered strong and improved operational performance since the beginning of the year, particularly punctuality for departures and arrivals making Heathrow the most punctual hub airport in Europe. We also achieved 98.4% of regulated queue times in Central Search Areas below 5 minutes (2024: 97.1%).  

We published our 2024 Sustainability Report in March demonstrating the continued success in our strategy and outperformance on a number of targets, namely the contribution of Sustainable Aviation Fuel ("SAF") to overall jet fuel consumption of 2.9% (vs 2.5% target). Our advocacy work with the Government has been constructive with the introduction of the SAF Bill to UK Parliament.  

In April, the CAA published their final H8 method statement providing further clarity and guidance. We will be submitting our H8 business plan in July. Following the Government's support for a third runway in February, we will also submit our proposal to expand Heathrow to Government this summer. Policy changes are needed to deliver the project successfully and we will also be working with Ministers to agree these changes, particularly around airspace modernisation, planning reform and adjustments to the regulatory model for a third runway. The CAA will run a separate review on the expansion plan. Timelines for the review around regulatory models for expansion are yet to be set out. 

The forecast capex for the H7 period is £4.5 billion (£1,050 million for 2025) delivering improvements in services and our carbon footprint, cost efficiency and revenue growth whilst continuing to strengthen our operational resilience. 

The Investor Report document is available in pdf format at the following link:

http://www.rns-pdf.londonstockexchange.com/rns/6478O_1-2025-6-26.pdf

The Investor Report is available from today via the Heathrow Investor Centre at https://www.heathrow.com/company/investor-centre/reports/investor-reports

By way of reminder, pursuant to the CTA, the Heathrow Finance Bonds, Note Purchase Agreement and the Heathrow Finance Facilities Agreements (as appropriate), the following is available on the Heathrow Investor Centre at https://www.heathrow.com/company/investor-centre/reports/annual-accounts:

-     consolidated financial statements of Heathrow (SP) Limited for the year ended 31 December 2024.

-     consolidated financial statements of Heathrow Funding Limited for the year ended 31 December 2024.

-     consolidated financial statements of Heathrow Finance plc for the year ended 31 December 2024.

-     regulatory accounts for Heathrow Airport Limited for the year ended 31 December 2024.

For investor enquiries please contact Wendy Butler, Debt Investor Relations Manager, +44 (0) 07841 530844.

(1)           Adjusted EBITDA is earnings before interest, tax, depreciation and amortisation, and exceptional items