January-September results 2013
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Transcript of January-September results 2013
January – September 2013
Results
1
A I R P O R T S T O L L R O A D S
M O T O R W A Y S
C O N S T R U C T I O N
C I Ó N
S E R V I C E S
INDEX
GENERAL OVERVIEW ....................................1 Business performance ...............................1
TOLL ROADS ................................................2 Assets in operation ...................................2 Assets under development ........................3 Projects out to tender ...............................4 Assets under creditor protection.................4 Events after the close ...............................4 407-ETR ..................................................5
SERVICES ....................................................6 New organisational structure .....................6 Results ....................................................6 Spain ......................................................6 United Kingdom .......................................6 International ............................................7 Backlog ...................................................7 Corporate activity .....................................7
CONSTRUCTION ...........................................8 Budimex ..................................................8 Webber ...................................................8 Ferrovial Agromán ....................................8 Backlog ...................................................8
AIRPORTS ...................................................9 HAH- Traffic performance ..........................9 Tariffs .....................................................9 Income statement .................................. 10 Revenue breakdown ............................... 10 Regulatory aspects ................................. 10 Net debt ................................................ 11 Dividends .............................................. 11 Divestments ........................................... 11 Events after the close ............................. 11
CONSOLIDATED INCOME STATEMENT ......... 12 BALANCE SHEET AND OTHER MAGNITUDES . 14
Consolidated net debt ............................. 15 Credit rating........................................... 15 2013 dividend ........................................ 15 Corporate bond issuance ......................... 15
APPENDIX I: IMPORTANT MILESTONES ........ 16 Events after the close ............................. 16
APPENDIX II: PRINCIPAL CONTRACT AWARDS
................................................................ 17 APPENDIX III: EXCHANGE-RATE MOVEMENTS
................................................................ 19 Comparable information: The principal adjustments made to facilitate comparative analysis are the elimination of fair-value adjustments (hedging, impairments and asset revaluations), disposals, the impact of the costs of the acquisition and integration of new businesses and the effect of exchange-rate movements. *EBIT For the purposes of analysis, all the comments referring to EBIT are before impairments and disposals of fixed assets.
GENERAL OVERVIEW For Ferrovial, the first nine months of the year saw the culmination of several important corporate
transactions, such as the acquisition of Enterprise, one of the principal services companies in the UK, the
start-up of services for the mining industry with the acquisition of Steel Ingeniería in Chile, the closure of
financing for the Texan toll motorway NTE 35W and the sale of Stansted Airport by Heathrow Airport
Holdings (HAH).
Amey, the subsidiary of Ferrovial Servicios in the UK, acquired Enterprise in April, becoming in the process
one the most diversified companies in the sector in terms of products, doubling its turnover in the UK
(annual turnover will be more than GBP2,000mn), and expanding its workforce to 21,000. The acquisition
also facilitates Amey’s entry into the utilities services sector.
Ferrovial has been awarded various contracts through consortia led by Cintra. Of particular note are a
new section of the North Tarrant Express (NTE) motorway in Texas (USA), with a total investment
estimated at USD1,380mn and the contract to complete the Central Scotland motorway network, worth
GBP415mn, also awarded to a consortium led by Cintra.
During the first nine months of the year, HAH has distributed GBP491mn of dividends, including
GBP300mn related to the sale of Stansted Airport. The 407ETR also paid dividends, amounting to
CAD430mn. 407ETR has since paid a fourth dividend in October, amounting to CAD250mn.
Ferrovial issued two corporate bonds in the period, firstly its inaugural issuance (five years, EUR500mn,
coupon 3.375%) and then a second issue (eight years, EUR500mn, coupon 3.375%). In both cases the
issues were significantly oversubscribed (by 11x and 6x, respectively). The proceeds have been applied to
the early retirement of corporate debt. These bond issues have enabled Ferrovial to optimise the maturity
profile of its corporate debt, reduce its cost and eliminate practically all its bank debt.
At end-September, Ferrovial’s net cash position, excluding infrastructure projects, amounted to
EUR835mn after net investments of EUR621mn and dividend payments totalling EUR273mn.
Business performance The backlog at the Services division reached a new high including the incorporation of Enterprise.
Revenues in Spain remained stable in spite of the difficult economic environment.
Tariff increases plus cost controls have resulted in notable growth at the EBITDA level, both at Heathrow
Airport (+22%), and at the 407ETR (+11%), both in local currency terms (both assets are consolidated
by the equity method). In terms of traffic, Heathrow reported 54.8 million passengers, an increase of
3.6%. Traffic on the 407ETR (+0.9%) reflected a combination of the increase in the daily average
distance travelled (+0.8%) and performance in line with the same period last year in terms of the number
of vehicles. On the other motorways, there were signs of recovery in the corridors.
The Construction division reported a continuation of the trends seen in earlier quarters, with weaker
domestic activity partially offset by international growth.
Consolidated revenues reached EUR5,927mn, with EBITDA of EUR632mn. Ferrovial reported a net profit
of EUR485mn.
Sep-13 Sep-12 Chg. (%) LfL (%)
Sep-13 Dec-12 Chg. (%)
Revenues 5,927.1 5,652.6 4.9 6.8
Construction Backlog 8,496 8,699 -2.3
EBITDA 631.6 658.3 -4.1 0.2
Services Backlog 15,917 12,784 24.5
EBIT* 450.8 497.1 -9.3 -4.0
Net result 485.2 475.7 2.0
Traffic Sep-13 Sep-12 Chg. (%)
Capex -620.6 -626.4 -0.9
ETR 407 (VKT´ 000) 1,760,406 1,745,396 0.9
Chicago Skyway (ADT) 41,673 42,803 -2.6
Indiana Toll Road (ADT) 28,303 27,749 2.0
Ausol I (ADT) 11,793 13,420 -12.1
Sep-13 Dec-12 Chg. (mn)
Ausol II (ADT) 14,024 14,694 -4.6
Net financial Debt -6,075.5 -5,106.5 -969
M4 (ADT) 25,753 25,625 0.5 Net Debt Ex-Infrastructure Projects
834.6 1,488.1 -654
Heathrow (million pax.) 54.8 53.0 3.6
Results January - September 2013
2
TOLL ROADS
Sep-13 Sep-12 Chg (%) Like for Like
(%)
Revenues 318.3 293.4 8.5 8.9
EBITDA 199.6 226.9 -12.0 -11.2
EBITDA Margin 62.7% 77.3%
EBIT 141.4 178.3 -20.7 -19.8
EBIT Margin 44.4% 60.8%
Revenues increased by 9%, inter alia thanks to the entry into operation of
the SH-130 motorway in November 2012 and the significant tariff
increase in January on the Chicago Skyway (+14% for light vehicles and
+25% for heavy), together with more resilient traffic growth than
expected. The increase in revenues was also driven by the reversal of a
provision booked in 2012 for the Norte Litoral against the possibility of
attracting a fine on the part of the Administration for non-availability.
At Autema, the reversal of a EUR20mn VAT-related provision in the first
quarter of 2012 was reflected in an 11% drop at the EBITDA level.
Assets in operation
TRAFFIC PERFORMANCE
There was a slight improvement in traffic in Spain in all the corridors.
Traffic continued to decline, but increasingly slowly. In fact, Spanish toll
roads reported in August their first increase since March 2010. This
change of trend appears to be driven by a degree of recovery in domestic
economic activity.
Nevertheless, the toll motorways are still losing market share. This is
partly due to the improvement in traffic conditions on the alternative non-
toll roads after several years of shrinking traffic; and partly due to
motorists being less willing to pay tolls as a consequence of their ongoing
loss of purchasing power. In addition to the above, VAT increased from
18% to 21% on 1 September 2012, which raised tariffs by 2.5%.
Other individual circumstances had a negative impact on traffic at Ausol,
such as the 7.5% extraordinary tariff increase that came into effect on 28
July 2012, driven by the cancellation of the compensation approved in
1999 for the drop in tariffs at the time, and the opening to traffic of the
San Pedro de Alcántara tunnel on 26 June 2012. This all led to a
significant loss of market share in a corridor which is still weakening as a
consequence of the economic crisis, although there are now signs of an
incipient improvement. On the other hand, in the third quarter the works
at the Port of Algeciras had a notable positive impact on traffic, as did the
increase in the number of vehicles during the holiday season.
In the Azores, 15 December 2012 marked the first full year of operation
for the concession as a whole. Over the course of the year there has
been a significant improvement, with the rate of decline slowing in every
quarter. The reasons for this improvement include better weather, the
positive impact of a good tourist season and the increase in heavy
vehicles due to civil works.
Traffic Revenues EBITDA
EBITDA Margin
Net Debt
100%
Global consolidation Sep-13 Sep-12 Chg. Sep-13 Sep-12 Chg. Sep-13 Sep-12 Chg. Sep-13 Sep-12 Sep-13 Share
Intangible assets
Chicago Skyway 41,673 42,803 -2.6% 46.3 41.8 10.9% 40.5 36.3 11.5% 87.4% 86.9% -1,075 55%
SH-130 5,633
10.2
n.s. 4.0 0.4 n.s. 39.4% -875 65%
Ausol I 11,793 13,420 -12.1% 38.3 40.8 -6.3% 27.7 32.4 -14.5% 72.3% 79.3% -445 80%
Ausol II 14,024 14,694 -4.6%
M4 25,753 25,625 0.5% 16.6 16.1 3.1% 11.4 11.1 2.9% 68.7% 68.8% -114 66%
Algarve 9,438 9,631 -2.0% 26.2 27.9 -6.1% 22.4 24.1 -7.0% 85.6% 86.5% -154 85%
Azores 8,065 8,351 -3.4% 15.9 16.1 -1.6% 5.8 13.2 -55.6% 36.8% 81.6% -330 89%
Financial assets
Autema
65.1 64.8 0.6% 58.6 76.8 -23.7% 89.9% 118.6% -667 76%
M3
15.8 15.2 4.1% 12.0 11.6 3.5% 76.2% 76.6% -201 95%
Norte Litoral
44.9 31.5 42.5% 40.0 27.5 45.5% 89.2% 87.3% -215 84%
Via Livre
9.7 11.8 -18.1% 0.7 3.2 n.s. 6.7% 27.1% 7 84%
Equity accounted Sep-13 Sep-12 Chg. Sep-13 Sep-12 Chg. Sep-13 Sep-12 Chg. Sep-13 Sep-12 Sep-13 Share
407 ETR (VKT) 1,760,406 1,745,396 0.9% 440.4 425.2 3.6% 373.0 352.7 5.8% 84.7% 82.9% -3,893 43%
Intangible assets
Indiana Toll Road 28,303 27,749 2.0% 117.8 114.6 2.8% 90.8 93.4 -2.8% 77.1% 81.5% -2,775 50%
Central Greece 18,589 19,293 -3.6% 6.2 6.4 -2.9% 0.9 0.0 n.s. 14.7% 0.5% -257 33%
Ionian Roads 27,901 30,033 -7.1% 42.5 44.4 -4.3% 18.2 24.8 -26.7% 42.8% 55.9% 19 33%
Serrano Park
3.7 3.4 9.9% 2.2 1.7 23.3% 58.0% 51.6% -47 50%
Results January - September 2013
3
TRAFFIC PERFORMANCE (cont.)
On the M4, traffic continues to show clear signs of recovery, a reflection
of the improvement in the economic situation in Ireland, and in particular
in employment. Both the traffic on the corridor and the toll road’s market
share improved in the second and third quarters.
In Greece, traffic on both the Central Greece and the Ionian Roads toll
road continued in steep decline as a consequence of the combination of
two factors: the economic crisis and the high price of fuel. In the case of
the Central Greece, the concession only has one of the planned toll
booths in operation (located just after the last toll booth on the Ionian
Roads).
In North America, in Canada, the 407ETR traffic growth was (+0.9%),
reflecting the combination of an improvement in the average journey
length (+0.8%) and no change in the number of vehicles.
On the Chicago Skyway, in spite of the tariff increases applied on 1
January 2013, traffic performance has been more robust than expected,
especially for heavy vehicles. As per the contract, the weighted average
tariff increase was 17.5%, with a 14% increase for light vehicles and a
25% increase for heavy vehicles.
On the Indiana Toll Road there was a notable increase (+2.6%) in heavy
vehicles on the Ticket section of the motorway, which represents around
60% of toll revenues.
On the SH-130, which was only opened to vehicles in October 2012 and
for which there are thus no comparisons available, traffic is heavier in a
southbound direction and on the days before public holidays.
Nonetheless, northbound traffic has been improving in recent months. On
On 1 April, the Texas authorities (TxDOT) introduced a temporary
discount for heavy vehicles to encourage the use of all segments of the
SH-130 expected to end in November 2013. Heavy vehicles now pay the
same tariff as light vehicles. TxDot will cover the corresponding drop in
revenues. The motorway access signage on the outskirts of San Antonio
has also been improved. As a result, in September heavy traffic was 51%
higher than in March. In fact, there has been an increasing monthly rise
in traffic since March.
FINANCIAL ASSETS
In the application of IFRIC 12, concession contracts are classified as one
of two types: intangible assets or financial assets.
Intangible assets (where the operator assumes the traffic risk) are those
where remuneration consists of the right to collect the tariffs
corresponding to the degree of utilisation.
Financial assets (where the operator does not assume the traffic risk), are
those concession agreements where the remuneration consists of an
unconditional contractual right to receive cash or other financial assets,
either because the entity awarding the contract guarantees the payment
of certain amounts, or because the entity guarantees the shortfall
between the amounts received from the users of the public service and
the above-mentioned determined amounts. These are thus concession
agreements where the demand risk is assumed in full by the entity
awarding the contract.
The assets in operation classified as financial assets, where there is no
traffic risk due to some kind of guarantee mechanism, are Norte Litoral,
Eurolink M3, Autema and Via Livre.
Assets under development
ASSETS UNDER CONSTRUCTION
Global consolidation Invested
Capital
Pending committed
capital
Net Debt 100%
Share
Intangible assets
NTE 135 44 -542 57%
LBJ 186 70 -839 51%
NTE 35W 13 148 -19 50%
Equity accounted
Financial assets
407 East 10 -102 50%
A-66 Benavente Zamora 2 8 -12 25%
NTE: The project is on schedule, with 71% of the construction completed
and the project is expected to be finished in 2015.
LBJ: The project is on schedule, with 66% of the construction completed
and the project is expected to be finished in 2015, thought a small
section will be operative from 2014.
NTE 35W: The financing for the project was closed on 19 September,
comprising both TIFIA debt and PAB bonds. The financing was rated
investment-grade Baa3 by Moody’s and BBB- by S&P.
407 East: Construction work began in the first week of March. At present,
15% of the construction has been completed. Work is expected to be
concluded at the end of 2015. The credit rating agencies DBRS and S&P
have affirmed the project’s rating at A- with stable outlook.
A66 Benavente-Zamora: The financing for the project was closed on 31
July, and construction work has already begun.
CONTRACT AWARDS
- In Scotland, a consortium led by Cintra has been selected as the
preferred bidder to design, build, finance and operate an infrastructure
project to complete the motorway network in Central Scotland. The
project has been valued by Transport Scotland at some GBP415mn of
new construction. In addition, the contract guarantees 33 years of
revenues for operation, maintenance and investment for the consortium.
Ferrovial Agromán and Lagan Construction will carry out the construction
works, and share the design with Amey. Cintra and Amey will be
responsible for the operation and maintenance.
The project has been awarded under an Availability Payment scheme.
At present, the consortium is working towards closing the financing for
the project, once completed it will be included in the Construction and
Services backlogs.
Results January - September 2013
4
Projects out to tender
In spite of the uncertainty in the markets, there was a slight recovery in
the development activities on the part of the public authorities in some of
Ferrovial’s international target markets such as North America, Europe,
Australia and Latin America.
In Canada, Infrastructure Ontario published a “Request For Qualification”
(RFQ) on 25 March 2013 for the 407East Extension Phase II project. The
consortium formed by Cintra and Ferrovial Agromán presented their
response to the RFQ on 6 June. Infrastructure Ontario is expected to
announce the list of pre-qualified bidders for the RFQ during 4T2013. The
project comprises the design, construction, financing and maintenance of
approximately 33km of motorway.
In North America, Cintra was pre-qualified for the SH183 Managed Lanes
(Texas) on 22 August. The project consists of the design, construction,
financing, operation and maintenance of approximately 23km of
motorway. This is a project with no traffic risk.
I77 Managed Lanes (North Carolina). A consortium led by Cintra was pre-
qualified on 30 March for the design, finance operate and maintain the
Managed Lanes carriageways under a real toll regime.
Assets under creditor protection
Traffic Revenues EBITDA EBITDA Margin
Net Debt
100% Global consolidation Sep-13 Sep-12 Chg. Sep-13 Sep-12 Chg. Sep-13 Sep-12 Chg. Sep-13 Sep-12 Sep-13 Share
Intangible assets
Ocaña-La Roda 3,165 3,540 -10.6% 10.3 11.3 -8.9% 3.8 5.8 -34.6% 36.4% 50.7% -538 54%
Radial 4 5,018 6,015 -16.6% 10.4 11.8 -12.1% 4.9 5.2 -6.4% 46.7% 43.9% -597 55%
RADIAL 4
On 14 September 2012, the Board of the Radial 4 agreed to request
protection from its creditors through the courts. On 4 October, this
request for voluntary creditor protection was granted.
Ferrovial’s investment relating to this project is fully provisioned, such
that the resolution of the creditor protection situation should have
absolutely no negative impact whatsoever on the group’s accounts.
As a result of filing for creditor protection, the stand-still agreements with
the lending banks were terminated.
OCAÑA - LA RODA
The Ocaña-La Roda toll motorway filed for creditor protection on 19
October 2012. On 4 December the courts accepted the request.
Ferrovial’s investment in this project is provisioned in full, and it does not
expect there to be any negative impact whatsoever on its accounts from
the resolution of the creditor protection situation.
The creditor protection filing triggered the early expiration of the
financing contract, which matured on 31 December 2012.
Events after the close
On 16 October, the rating agency Moody’s rating downgraded its rating
assigned to the SH-130 motorway from B1 to Caa3, with negative
outlook.
The SH-130 is a 145km point-to-point motorway in Texas, which links the
cities of Austin and San Antonio. It was opened to traffic in October 2012,
a month ahead of schedule, and started to charge tolls in November
2012.
The project’s debt is a mix of TIFIA (USD430mn) and bank debt
(USD686mn). The concession has not issued any bonds. The financing
has no significant debt maturities until 2023 (3% of total debt), and there
is no single year when the debt maturities amount to more than 8% of
the total. The final maturity is in 2046. Ferrovial has invested EUR153mn
in the project.
Traffic is underperforming the pre-recession forecasted levels. The project
is still in its initial ramp-up phase and traffic increases can be expected.
The reasons that support the expected traffic increases are, the low level
of uptake of corridor traffic since its opening, the long distance and
discretionary usage of the corridor leading to a longer than expected
ramp-up period and the significant existing and future economic and
population growth in the Austin-San Antonio area.
Results January - September 2013
5
407-ETR
TRAFFIC
Slight traffic growth (+0.9%), reflected an improvement in the average
distance travelled per journey (+0.8%) and an unchanged number of
vehicles.
INCOME STATEMENT
CAD Sep-13 Sep-12 Chg (%)
Revenues 596.7 546.8 9.1
EBITDA 505.3 453.5 11.4
EBITDA Margin 84.7% 82.9%
EBIT 459.0 408.3 12.4
EBIT Margin 76.9% 74.7%
Financial results -191.2 -219.5 12.9
EBT 267.8 188.8 41.8
Corporate income tax -70.4 -58.4 -20.6
Net Income 197.4 135.0 46.2
Net Income attributable to Ferrovial 74.8 58.4 28.1
Contribution to Ferrovial equity
accounted result (€) 53.2 35.4 50.3
NB: since Ferrovial’s sale of 10% of the concession in 2010, the motorway has been consolidated by the equity method commensurate with the size of Ferrovial’s stake in the concession (43.23%).
407ETR reported significant growth in both revenues (+9.1%) and
EBITDA (+11.4%) in local currency. This positive performance reflects
the combination of the tariff increase on 1 February, solid traffic and
efficiency improvements. The average revenue per journey was 8.9%
higher than in the same period in 2012.
The financial result deteriorated vs. the same period last year due to the
rise in inflation (which had a negative impact on the inflation-linked
bonds) and the fall in interest rates.
407ETR contributed EUR53.2mn to Ferrovial’s equity-accounted results
after the annual amortisation of the goodwill generated by the sale of
10% of the concession in 2010, which will be amortised over the life of
the asset depending on forecast traffic levels.
DIVIDENDS
On 14 February, the Board of 407 International approved the payment of
an ordinary dividend of CAD0.129/share, totalling CAD100mn.
On 24 April, the Board of 407 International approved the payment of an
ordinary dividend of CAD0.168mn per share, or a total of CAD130.0mn.
On 17 July, the Board of 407 International approved the payment of an
ordinary dividend of CAD0.258 per share, or a total of CAD2000mn.
After the close of the third quarter and coinciding with the publication of
its results, the motorway announced and distributed a fourth dividend of
CAD250mn.
(CAD million) 2013 2012
Q1 100.0 87.5
Q2 130.0 87.5
Q3 200.0 87.5
Q4 250.0 337.5
Total 680.0 600.0
NET DEBT
At 30 September, the motorway’s net debt stood at CAD5,423mn.
On 2 October, 407ETR issued a CAD200mn bond maturing on 7 October
2053 with a coupon of 4.68%.
On 10 June, 407ETR issued another CAD200mn. These bonds mature on
11 September 2052 with a coupon of 3.98%.
After this issuance, more than 26% of the motorway’s debt has a
maturity of more than 25 years. The company has no significant debt
maturities until 2015 (CAD629mn) and 2016 (CAD289mn).
At 30 September 2013, the average cost of 407ETR’s external debt was
5.0%, taking into account all its interest-rate, exchange rates and
inflation.
CREDIT RATING
S&P: "A" (Senior Debt), "A-" (Junior Debt) and "BBB" (Subordinated
Debt).
DBRS: "A" (Senior Debt), "A low" (Junior Debt) and "BBB" (Subordinated
Debt).
407ETR TARIFFS
The table below shows a comparison of the tariffs in 2012 and 2013
(increase effective 1 February) for light vehicles:
CAD 2013 2012
Regular Zone Peak Period Mon-Fri: 6am-7am, 9am-10am, 3pm-4pm, 6pm-7pm
Peak Hours Mon-Fri: 7am-9am (2010: 7.30am-8.30am), 4pm-6pm
26.20¢ /km
27.20¢ /km
24.20¢ /km
25.20¢ /km
Light Zone Peak Period Mon-Fri: 6am-7am, 9am-10am, 3pm-4pm, 6pm-7pm Peak Hours Mon-Fri: 7am-9am, 4pm-6pm
24.90¢ /km
25.85¢ /km
22.60¢ /km
23.55¢ /km
Midday Rate Weekdays 10am-3pm
22.70¢/km 21.00¢/km
Midday Rate Weekends and public holidays 11am-7pm 21.00¢/km 19.35¢/km
Off-Peak Rate
Weekdays 7pm-6am, Weekends and public holidays 7pm-11am
19.35¢/km 19.35¢/km
Transponder: Monthly rental CAD3.25 CAD3.00
Transponder: Annual rental CAD21.50 CAD21.50
Video toll per journey CAD3.80 CAD3.80
Charge per journey (Note this is not a charge per km.)
CAD0.70 CAD0.60
Results January - September 2013
6
SERVICES
New organisational structure
The reported information reflects the new organisational structure of the
Services division, which inter alia, groups the business units by
geography: Spain, the UK and International.
In the UK, the process of integrating Enterprise and Amey is on schedule.
The design of the new organisational structure has been completed, and
now the focus is on implementing the necessary actions needed to
achieve synergies in the procurement and supply management areas, as
well as the cross-selling between activities. In Spain, the integration of
businesses into one single organisation, has been completed.
Results
Sep-13 Sep-12 Chg.(%) Proforma
(%)
Revenues 2,658.5 2,204.1 20.6 23.8
EBITDA 211.5 215.0 -1.6 11.1
EBITDA Margin 8.0% 9.8%
EBIT 114.6 134.6 -14.9 4.7
EBIT Margin 4.3% 6.1%
EBITDA at Ferrovial % in businesses under
common control 14.1 3.7 281.1 281.1
Backlog* 15,916.8 12,783.9 24.5 26.6
*Backlogs compared with December 2012.
**Proforma, excluding costs related with Enterprise acquisition and integration and
Spanish restructuring.
The Services income statement consolidates six months of Enterprise and
nine months of Steel Ingeniería Chile, companies acquired in the 2013
financial year.
Enterprise contributed EUR503.8mn to revenues and EUR22.9mn to
EBITDA. Steel, meanwhile, made a contribution of EUR29.9mn to
revenues and EUR5.8mn to EBITDA.
The income statement also includes the acquisition cost of Enterprise
(EUR5.4mn) and the costs of the integration incurred to date in the UK
(EUR11.9mn) and Spain (EUR3.3mn).
The variation reflects performance vs. 2012 excluding the acquisition
costs of Enterprise, the integration costs in Spain and the UK and the
exchange rate impact.
Performance in the third quarter was in line with expectations: in Spain,
sales volumes were stable compared with last year, with some pressure
on margins due to the general economic environment. In the UK, the
process of integrating Amey and Enterprise is on schedule, and
performance remained positive with good contracting in roads and
utilities. Finally, in the International unit various contracts in Qatar have
come into operation, although their impact is not reflected in revenues or
EBITDA as they are equity-accounted.
From the commercial point of view, contract awards continue at a good
pace, with the Services backlog once again at all-time highs.
In the different countries where the Services division operates, awarding
some contracts under the “joint venture” format has become a frequent
practice, where partners keep a joint control of the project. From the
accounts point of view, the stake in these projects is shown in the equity
accounted section and is therefore not included in the EBITDA from
Services. In order to give higher visibility to these projects, we include the
associated EBITDA figure, EUR14.1mn in total for the whole Division (vs.
EUR3.7mn same period last year).
Spain
Sep-13 Sep-12 Chg. (%) Proforma
(%)
Revenues 1,053.2 1,053.0 0.0 0.0
EBITDA 127.5 134.0 -4.9 -1.3
EBITDA Margin 12.1% 12.7%
EBIT 61.0 69.3 n.s. -4.9
EBIT Margin 5.8% 6.6% EBITDA at Ferrovial %
in businesses under common control
1.1 2.1 -47.6 -47.6
Backlog* 5,566.5 5,219.4 6.7
**Proforma, excluding costs related with Spanish restructuring.
At the beginning of the year the process of integrating all the activities
carried out in Spain into one single business unit was set in motion. This
integration will allow cost savings and a more efficient way of servicing
clients.
Spain is now operating as a single organisation. In the intervening
months the new functions and structures in areas, such as Human
Resources, Finance and Legal have been set. The new Efficiency &
Quality department has also been created with the objective of identifying
opportunities to generate efficiencies throughout the organisation,
ranging from structural issues to contracts, and the introduction of the
measures required to achieve these efficiencies.
In the year, the cost of the integration amounted to EUR 3.3mn. These
costs have been excluded from the comparative figures. The cost of the
complete reorganisation is estimated at around EUR5mn.
Revenues were in line with 2012, in spite of the adverse economic
context, as a consequence of a stable backlog of contracts, with no
significant contracts lost in the renewal processes and the contribution of
new contracts in the area of infrastructure maintenance.
EBITDA was slightly lower than last year as a consequence of the costs of
getting these new contracts into operation, and the lower volume of
waste handled vs. 2012 (-2.6%).
In comparable terms, EBITDA performance was in line with revenues. In
both years EBITDA includes EUR8mn corresponding to the reversal of
provisions thanks to the collection of old debts.
The contracts awarded as joint ventures, included in the equity-accounted
section, reached a total EBITDA of EUR1.1mn (vs. EUR2.1mn same period
last year).
United Kingdom
The process of integrating Amey and Enterprise is still on schedule.
Progress has been made in three key areas.
Firstly, the company’s new organisational structure has been defined,
both in terms of support functions (Human Resources, Finance, Systems,
Legal, etc.) and concerning the business areas. Staff cutbacks associated
with the new organisation are in line with plans.
Secondly, in the area of procurement, progress has been made in
determining the actions required to generate efficiencies derived from the
management of purchases and suppliers that, in many cases, were
common to Amey and Enterprise.
Results January - September 2013
7
The third aspect where progress has been made is cross-selling, with the
identification of opportunities to expand the range of services offered to
clients of the organisation.
From the commercial point of view, one of the principal objectives of the
past months has been to try and achieve a controlled transition, avoiding
any kind of commercial or operational impact.
The volume of contract awards since April has remained at a healthy level
in all areas of business, with significant awards in all of them (highway
maintenance in East Anglia, DBFO of the Milton Keynes treatment plant,
waste collection in Northampton, water network maintenance in
Yorkshire, gas network maintenance for Northern Gas Networks, etc.).
UK PERFORMANCE
Sep-13 Sep-12 Chg.(%) Proforma
(%)
Revenues 1,553.7 1,134.2 37.0 44.2
EBITDA 79.4 80.0 -0.8 28.0
EBITDA Margin 5.1% 7.1%
EBIT 53.4 65.6 -18.6 14.5
EBIT Margin 3.4% 5.8%
EBITDA at Ferrovial % in
businesses under common control
10.3 1.6 n.s n.s
Backlog* 10,158.6 7,467.6 36.0 39.9
**Proforma, excluding costs related with Enterprise acquisition and integration.
Amey’s 2013 accounts include six months of Enterprise. They also include
the costs of the acquisition (EUR5.4mn) and the integration (EUR11.9mn)
incurred to date. The comparative figures show the percentage variation
excluding these costs.
Revenue growth in the first nine months of 2013 vs. 2012 was above all
due to the contribution from Enterprise (EUR503.8mn).
At the EBITDA level, Enterprise made a contribution of EUR22.9mn before
costs of integration and acquisition (EUR17.3mn). Excluding Enterprise,
Amey contracts performance Vs 2012 remained positive.
The operating result includes the amortisation of intangible assets arising
after the acquisition of Enterprise. This goodwill basically reflects the
value of the contracts in Enterprise’s portfolio at the time of the
acquisition. The annual amortisation charge for this is expected to be
around EUR10.6mn (EUR5.2mn to September).
Joint venture contracts (equity-accounted) reached a total EBITDA of
EUR10.3mn (vs EUR1,6mn same period last year).
International
sep-13 sep-12 Chg.(%) Proforma
(%)
Revenues 51,5 16,9 205,3 n.s.
EBITDA 4,7 0,9 394,0 n.s.
EBITDA Margin 9,1% 5,6%
EBIT 0,1 -0,3 n.s. n.s.
EBIT Margin 0,2% -1,8%
EBITDA at Ferrovial % in
businesses under common control
2,7 0,0 n.s n.s
Backlog* 191,7 96,9 97,8
This new business unit includes the activities in countries other than
Spain and the UK. The breakdown of revenues by country is as follows:
Chile (EUR29.9mn), Portugal (EUR17.0mn) and Poland (EUR4.2mn).
Joint venture contracts (equity-accounted) reached a total EBITDA of
EUR2.7mn (vs EUR0.0mn same period last year).
Backlog
The Services portfolio reached another all-time high in September at
EUR15,917mn, increasing a 25.7% (excluding forex impact) Vs December
2012.
The pace of contract awards in the third quarter was as robust as in the
first half of the year, with total awards worth EUR923mn during the
quarter.
In the UK, the highlights of the contract awards during the quarter
included highway maintenance in East Anglia (EUR252mn, five years),
water power infrastructure in South Wales (EUR234mn, six years) and
highways and street cleaning contracts in Liverpool (EUR132mn, nine
years), water distribution network maintenance in Yorkshire (EUR75mn,
five years), and maintenance of the gas network for Northern Gas
Networks (EUR69mn, four years).
In Spain, the most significant awards during the quarter were
maintenance of Iberia installations at Barajas Airport (EUR34mn, four
years) and installations maintenance in Social Services properties in
Castilla Leon (EUR20mn, 10 years).
At the International unit, the awards during the quarter amounted to
EUR18mn, notably the maintenance of a section of the S-7 motorway in
Poland (EUR7.5mn, six years) and various contracts for services to the
mining industry in Chile worth a total of EUR7.2mn.
Corporate activity
SALE OF AMEY PFIs
In March, Ferrovial Servicios closed the sale of 40% of the companies
that execute long-term PFI contracts to the Dutch investment fund DIF,
for GBP37mn. Prior to this sale, Amey owned 50%, and the stake was
consolidated by the equity method. Amey now owns 10% of these
companies. The capital gain on the transaction amounted to EUR20.4mn.
ACQUISITION OF STEEL
On 4 March, Ferrovial Servicios closed the acquisition of 70% of Steel
Ingeniería, a company that specialises in the mining sector in Chile, for an
EV of EUR28.5mn (including 8.5mn of debt) thus gaining entry to this
new market.
With this acquisition, Ferrovial Servicios starts operations in Latin America
and advances its international expansion after the recent contract awards
in Poland and Qatar, as well as the recent acquisition of Enterprise in the
UK.
ACQUISITION OF ENTERPRISE
On 8 April, Ferrovial Servicios closed the acquisition of the British
company Enterprise, after receiving the approval of the European
competition authorities, for a price of EUR473.9mn.
Enterprise is one of the principal British companies in the field of services
to utilities and the public sector. Not only does this deal increase turnover
at Ferrovial Servicios but it expands its product offering in certain
business areas.
The integration of Enterprise into Amey will generate cost and revenue
synergies estimated at around GBP40mn from 2015 onwards.
Results January - September 2013
8
CONSTRUCTION
Sep-13 Sep-12 Chg. % Like-for-Like
(%)
Revenues 2,942.5 3,168.7 -7.1 -5.9
EBITDA 221.0 240.7 -8.2 -5.9
EBITDA Margin 7.5% 7.6%
EBIT 197.7 210.5 -6.1 -3.6
EBIT Margin 6.7% 6.6%
Backlog* 8,496.1 8,699.4 -2.3 -0.4
*Backlogs compared with December 2012.
The dynamics behind the drop in revenues (-5.9% in comparable terms)
is the same as in the past few years: a significant decline in activity in
Spain, offset by the growth in other international markets, principally the
US. International turnover represented 76% of the Division’s revenues.
Activity in Poland continued to decline, although with some slow down
versus previous quarters, thanks to the new works awarded in 2013. On
the contrary, Webber posted strong growth thanks to the execution of
the NTE and LBJ motorways.
Budimex
Sep-13 Sep-12 Chg. % Like-for-Like (%)
Revenues 799.6 1,096.6 -27.1 -26.4
EBITDA 32.5 45.7 -28.8 -28.1
EBITDA Margin 4.1% 4.2%
EBIT 27.4 36.2 -24.3 -23.5
EBIT Margin 3.4% 3.3%
Backlog* 1,144.3 1,193.9 -4.2 -0.9
The period was notable for the finalisation of large projects, the impact of
the contraction in public-sector tendering in the previous year and the
bad weather.
The backlog stands at EUR1,144mn, 0.9% lower than in December 2012,
reflecting a change of trend in the award of new projects. Notable
contract awards included the construction of the S8 motorway (Roza-
Wroclaw), the Lubin ring road, the Gdansk city tram and the A4
motorway (between Krzyz and Debica).
The increase in contract awards will be reinforced by the EU’s new
recently approved budget: Poland is to be the principal beneficiary of
structural and cohesion funds, and as a consequence of this the Polish
government has announced a highway plan for 2014-2017, with
tendering expected to start at the beginning of 2014.
Webber
Sep-13 Sep-12 Chg. % Like-for-Like
(%)
Revenues 524.3 425.4 23.3 26.3
EBITDA 20.4 16.5 24.0 27.4 EBITDA Margin 3.9% 3.9%
EBIT 15.3 12.8 20.0 23.5
EBIT Margin 2.9% 3.0%
Backlog* 1,238.6 1,288.3 -3.9 -1.5
Webber posted strong revenue growth in local currency terms (+26%),
reflecting the execution on the NTE and LBJ motorways.
The backlog contracted (-1.5% in local currency terms) due to the high
level of execution on these toll roads, although there were also significant
new awards: Highway projects such as the US-290, Denton, the I-10 and
the NTE 35W.
Ferrovial Agromán
Sep-13 Sep-12 Chg. % Like-for-Like (%)
Revenues 1,618.6 1,646.8 -1.7 -0.3
EBITDA 168.0 178.5 -5.9 -3.3
EBITDA Margin 10.4% 10.8%
EBIT 155.0 161.6 -4.1 -1.3
EBIT Margin 9.6% 9.8%
Backlog* 6,113.2 6,217.2 -1.7 -0.1
Revenues (-0.3% in comparable terms) reflect the combination of the
evolution of the Spanish market (-26%), where there were particularly
significant contractions in civil works driven by the cuts in public-sector
tendering (-45% in 2012). These cutbacks in the Spanish market were
offset by the positive contribution made by other international markets,
particularly the US, on works related to new motorways in Texas, as well
as contributions from projects in the UK (Crossrail) and Canada (407 East
Extension).
Profitability remained at similar levels to 2012, thanks to the combination
of the margins generated by the US projects and the reversal of
provisions on the completion of projects in Spain that are not being offset
by provisions required at the start of new projects.
Backlog
Sep-13 Dec-12 Chg. %
Civil work 6,850.3 6,837.4 0.2
Residential work 168.2 284.2 -40.8
Non-residential work 718.1 867.2 -17.2
Industrial 759.5 710.6 6.9
Total 8,496.1 8,699.4 -2.3
The backlog contracted 2.3% (-0,4% LfL) in comparison with December
2012. The high level of execution was offset by the award of new
contracts, notably the NTE Extension (EUR735mn). Ferrovial’s capacity to
handle complex projects such as the LBJ and NTE motorways in Texas is
positioning the company as a reference in the US market.
The International backlog reached EUR6,175mn and is now much larger
than the domestic backlog (EUR2,321mn, -12%), accounting for 73% of
the total.
Results January - September 2013
9
AIRPORTS The HAH contribution to Ferrovial’s equity-accounted result amounted to
EUR253.4mn, and includes the capital gain on the sale of Stansted Airport
(EUR137.2mn). Note that the division’s net result excluding one-offs was
positive (EUR46.2mn).
HAH- Traffic performance
The positive growth of traffic through Heathrow (+3.6%) reflected an
acceleration of the trends observed earlier of increasing load-factors and
larger aircraft. Load-factors reached 77.0% in the first nine months of
2013 vs. 75.8% in 2012 and the average number of seats per flight was
202.3 vs. 196.6 in 2012.
Traffic growth was even stronger during the summer thanks to the
absence of the negative impact of the Olympic Games on the summer of
2012 (estimated at a loss of 720,000 passengers).
The decline during the period of the Olympic Games was more
pronounced on short-haul flights, and this was reflected in a sharp
increase in European traffic during the third quarter of 2013. During the
first nine months of this year, European traffic increased 5.7% to 22.8
million passengers. The acquisition of bmi by British Airways made a
significant contribution to these results, as load-factors on the old bmi
routes are now in line with those of BA. Domestic traffic grew 4.4% to
3.7 million passengers, with this increase due in part to Virgin Little Red
starting domestic flights at the beginning of the summer.
Long-haul traffic growth was positive (+0,8%) in most regions: Asia
Pacific increased 5.5% to 7.8 million passengers, boosted by new routes
and frequencies. Traffic with the Middle East increased by 4.6% to 4.4
million passengers, driven by larger aircraft and the increase in the
number of passengers using different airlines.
Heathrow won the “best airport in 2013” for the category of airport with
more than 25 million passengers in the ACI Europe Awards. T5 had
earlier been nominated as the best airport terminal in the world by
Skytrax World Airports Awards for the second year running.
Traffic performance by destination (excluding Stansted in both years) was
as follows:
Sep-13 Sep-12 Chg. %
UK 8.9 8.6 3.6%
Europe 26.6 25.3 5.2%
Long Haul 29.0 28.4 1.8%
Total 64.5 62.3 3.4%
Tariffs
The maximum increases in aeronautical tariffs applicable for the
regulatory years 2012/2013 and 2013/2014 came into effect on 1 April in
2012 and 2013 respectively.
The following table sets out the tariff increases applied at Heathrow
Airport in April 2012 and April 2013, which support the revenue growth in
2013:
2013 2012 Regulation
Heathrow +10.4% +12.7% RPI+7.5%
GBP Traffic Revenues EBITDA EBITDA Margin
Sep-13 Sep-12 Chg. Sep-13 Sep-12 Chg. Sep-13 Sep-12 Chg. Sep-13 Sep-12 Chg.
(bps)
Heathrow 54.8 53.0 3.6% 1,741 1,544 12.7% 981 786 24.9% 56.4% 50.9% 548
Heathrow express
91 86 6.1% 53 48 8.7% 57.8% 56.4% 137
Holding
0 2 -92.0% -4 10 n.s.
Heathrow total
1,832 1,631 12.3% 1,030 845 22.0% 56.2% 51.8% 448
Glasgow 5.7 5.5 2.8% 69 66 4.8% 25 25 1.5% 36.3% 37.5% -117
Aberdeen 2.6 2.5 3.3% 44 43 2.4% 16 16 1.4% 37.3% 37.6% -38
Southampton 1.3 1.3 2.2% 20 20 1.1% 6 6 -4.6% 30.0% 31.9% -181
Non Regulated 9.6 9.4 2.8% 134 129 3.4% 48 47 0.6% 35.7% 36.7% -99
Adjustments
1 2 n.s. 1 0 n.s. HAH total 64.5 62.3 3.4% 1,967 1,762 11.6% 1,079 892 20.9% 54.8% 50.6% 422
Results January - September 2013
10
Income statement
GBP Sep-13 Sep-12 Chg. % LfL (%)
Revenues 1,966.9 1,762.3 11.6 11.6
EBITDA 1,078.6 892.0 20.9 20.9
EBITDA margin % 54.8% 50.6%
Depreciation 391.3 403.3 -3.0 -3.0
EBIT 687.3 488.7 40.7 40.7
EBIT margin % 34.9% 27.7%
Impairments & disposals 0.5 0.5 7.2
Financial results -672.1 -347.9 -93.2 13.1
EBT 15.7 141.2 n.s. n.s.
Corporate income tax 174.6 104.0 67.9 n.s. Result from discontinued
operations 452.5 190.8 137.2 -85.3
Net income (100%) 642.8 436.0 47.4 222.9
Contribution to Ferrovial
equity accounted result (€) 253.4 268.7 -5.7 222.9
Revenues grew 11.6% and EBITDA 20.9% as a consequence of the
17.1% increase in aeronautical revenues, driven by the tariff increases
(+12.7% in April 2012 and +10.4% in April 2013 at Heathrow) and the
increase in passenger traffic (+3.4%); retail revenues increased by 5.9%
and the Other revenues element by 1.9%. EBITDA jumped 21%, boosted
by cost reductions (-2.1%), reflecting the combination of a reduction in
general expenses (which were higher in 2012 due to the Olympic Games)
and an increase in personnel and rental expenses.
The deterioration in the financial result in comparison with September
2012 was principally due to the deterioration in the market value of
Heathrow’s portfolio of derivatives, mainly the inflation hedges (-
GBP145mn vs. +GBP258mn in 2012), with no cash impact, after the
increase in expectations of future inflation in the UK since December
2012. Nevertheless, the movement in this variable in the second quarter
had a positive impact on the market value of the portfolio, which in the
first quarter posted a loss of GBP422mn.
At Corporate income tax, the improvement is due to the reductions in the
rate od corporation tax from 23% to 21% from 1 April 2014 and from
21% to 20% from 1 April 2015, as result the Group´s deferred tax
balaces have been re-measured.
At 30 September 2013, the average cost of HAH’s external debt was
5.93%, including the cost of all the hedging for interest rates, exchange-
rate movements and inflation.
Revenue breakdown
GBP Sep-13 Sep-12 Chg. % LfL (%)
Aeronautic 1,201.8 1,026.3 17.1 17.1
Retail 396.5 374.4 5.9 5.9
Others 368.6 361.6 1.9 1.9
TOTAL 1,966.9 1,762.3 11.6 11.6
Aeronautic. Retail Other
GBP Sep-13 LfL
(%) Sep-13
LfL
(%) Sep-13
LfL
(%)
Heathrow 1,130.3 18.3 358.0 5.9 343.4 1.5
Glasgow 35.3 3.2 22.2 5.2 11.9 8.8
Aberdeen 23.8 -4.2 9.4 11.3 10.9 11.3
Southampton 12.5 2.5 5.9 -2.7 1.9 4.6
Other & adjustments
1.0 -11.5 0.5 -18.7
Total airports 1,201.8 17.1 396.5 5.9 368.6 1.9
Aeronautical revenues increased 18.3% at Heathrow due to the
combination of traffic growth (+3.6%) and the tariff increases (+12.7%
in April 2012 and +10.4% in April 2013). Average aeronautical revenues
per passenger rose 14.3% to GBP20.60 (2012: GBP18.03). In addition,
since the second quarter of 2013 growth has recovered thanks to the “K
factor” and the lower real tariff revenues in the 2011/12 financial year.
Commercial revenues (+5,9%). The rate of growth through the year is
likely to have been impacted by the shift in mix towards European traffic,
passengers that showed a lower propensity to spend in retail outlets.
Heathrow’s commercial revenues increased (+5.9%). Net retail income
per passenger reached GBP6.18 (2.3% increase), although growth rate
was impacted by the higher proportion of European passengers with
lower propensity to spend in Heathrow retail outlets.
Regulatory aspects
REGULATORY ASSET BASE (RAB)
RAB is used in the calculation of HAH Group’s gearing levels.
In September 2013, the RAB reached GBP14,318mn (vs. GBP13,471mn in
December 2012), reflecting investments made (GBP1,000mn) and the
inflation impact (GBP285mn), offset by amortisation during the period
(GBP440mn) and a small amount for adjustments and changes in the
consolidation perimeter.
DEFINITION OF THE DEVELOPMENT OF HEATHROW
AIRPORT FOR THE NEXT FIVE YEARS
Heathrow’s next regulatory period (Q6) starts on 1 April 2014. After a
period of dialogue with the airlines present at the airport during 2012,
Heathrow put forward a Full Business Plan in January 2013, establishing a
plan for investment and operations that would enable it to continue
transforming the airport. The plan is focused on service quality and
improving the passenger experience. At the same time, it included
operating efficiency targets, always allowing an adequate return on
investment. The CAA published its Initial Proposal on 30 April, with a
formula for the annual review of the tariff per passenger of RPI (inflation)
-1.3%.
Heathrow responded to the Initial Proposal with new plans, which include
increasing operating efficiency to GBP427mn and a revised estimate of
the number of passengers. The CAA was presented with two different
plans, the first, the Revised Business Plan with lower investment
(GBP2,000mn) in response to the CAA’s proposal of lower returns. The
second, the Alternative Business Plan, includes an investment programme
of GBP3,000mn.
The CAA published its Final Proposal on 3 October. This proposes an
annual tariff increase of RPI +0%, assuming an investment plan of
Results January - September 2013
11
GBP2,885mn. The CAA’s proposed real cost of capital is 5.6%, which does
not correctly reflect the risks and cost of the debt required to develop one
of the most important privately-funded infrastructure investment plans.
Continuing to invest in Heathrow would improve the passenger
experience of the airport, would maintain Heathrow competitive with
other European airport hubs and would help the UK to compete as one of
the principal international business centres.
Heathrow is reviewing the Final Proposal carefully and considering its
investment plan in exhaustive detail before responding to the CAA before
the deadline of 4 November. The final decision is expected to be
published on 4 January 2014.
AIRPORTS COMMISSION
The British government has created an Airports Commission, led by Sir
Howard Davies, to determine how to maintain the UK’s position as an
international aviation hub. The Commission has been charged with
evaluating the various options for covering the UK’s international
connectivity, recommending the best way of achieving this and ensuring
that the needs are met as quickly and practicably as possible.
There is a clear basis for opting for the growth of Heathrow, and on 17
July, Heathrow presented to the Commission various options for the
construction of a third runway at the airport, to the northeast, to the
southeast or to the north of the present airport; the three possibilities
have been designed to take into account the possible future construction
of a fourth runway.
A third runway at Heathrow is the quickest, most practical and
economically efficient of meeting the UK’s needs for international
connectivity. All of the options proposed would increase capacity at
Heathrow, which could eventually operate 740,000 flights and process
130 million passengers a year.
A third runway at Heathrow would be cheaper to put into operation than
the construction of a new international airport. The estimated costs of the
options presented range between GBP14,000mn and GBP17,000mn, of
which approximately between GBP9,000mn and GBP11,000mn would be
related to the development of the airport infrastructure, and between
GBP5,000mn and GBP7,000mn to funds for the community, the
environment and to improving access. The infrastructure development
would include the construction of the third runway, new access for
aircraft to the runways, additional passenger terminal capacity and
connections to the existing infrastructure, including walkways for
passengers in transit and baggage handling infrastructure.
The Commission is expected to complete a preliminary report by the end
of 2013 and publish its final conclusions in the summer of 2015. However,
whatever the recommendation made regarding increased capacity, it
would take a considerable time to implement, even supposing an
immediate political consensus in support of the recommendations.
Net debt
GBP Sep-13 Dec-12 Chg. %
Senior loan facility 496.5 587.7 -15.5%
Subordinated 753.3 717.0 5.1%
Securitized Group 11,043.6 11,315.2 -2.4%
Non-Securitized Group 330.1 337.2 -2.1%
Other & adjustments -40.5 -26.2 n.s.
Total 12,583.0 12,931.0 -2.7%
Dividends
In the first nine months of 2013, HAH has distributed GBP491mn of
dividends, including GBP300mn related to the sale of Stansted Airport. In
2012, HAH paid dividends of GBP240mn to its shareholders.
Divestments
SALE OF STANSTED AIRPORT
The process of selling this asset initiated in August 2012 was completed
on 18 January 2013 with the announcement of the sale of Stansted
Airport to MAG (Manchester Airport Group), for GBP1,500mn (EBITDA
2012 GBP94mn, RAB 2012 GBP1,343mn). The deal was closed on 28
February, generating capital gains of GBP351.4mn (100%), and a
contribution to Ferrovial’s net result of EUR137.2mn.
Events after the close
FERROVIAL SELLS AN 8.65% STAKE IN HAH
Last 22nd of October Ferrovial, which indirectly owns 33.65% of HAH,
reached an agreement with Universities Superannuation Scheme (USS),
to sell an 8.65% stake in HAH for GBP392mn (EUR463mn).
The transaction was completed on 24 October 2013 upon the receipt of
funds. Capital gain of EUR86mn is expected to be accounted before 2013
year end. Once the deal is closed, Ferrovial’s indirect stake in Heathrow
Airport Holdings. thus falls to 25%.
Ferrovial remains the major shareholder in FGP Topco Ltd. and its only
industrial partner.
HEATHROW PLACES £750 MILLION STERLING BOND TO
REFINANCE EXISTING DEBT
Heathrow announced last 24th of October that it had successfully placed
a £750 million sterling Class A bond with a 2046 maturity and a fixed
annual coupon of 4.625%.
The transaction was significantly oversubscribed and supported by a
broad range of high quality predominantly UK based institutional
investors. As a result, the bond was priced well inside initial price
guidance.
Heathrow plans to use the proceeds of the bond issue to repay short-
term loan facilities and an existing bond maturing in November 2013.
Heathrow last issued a long-dated sterling bond in May 2011.
Results January - September 2013
12
CONSOLIDATED INCOME STATEMENT
Before Fair
value Adjustments
Fair value
Adjustments Sep-13
Before Fair
value Adjustments
Fair value
Adjustments Sep-12
Revenues 5,927
5,927 5,653
5,653
Other income 7
7 13
13
Total income 5,934
5,934 5,665
5,665
COGS 5,302
5,302 5,007
5,007
EBITDA 632
632 658 658
EBITDA margin 10.7%
10.7% 11.6%
11.6%
Period depreciation 181
181 161
161
EBIT (ex disposals & impairments) 451
451 497 497
EBIT margin 7.6%
7.6% 8.8%
8.8%
Disposals & impairments 22
22 -11 -11
EBIT 472
472 486 486
EBIT margin 8.0%
8.0% 8.6%
8.6%
FINANCIAL RESULTS -321 63 -258 -297 17 -280
Financial result from financings of infrastructures projects -256
-256 -213
-213
Derivatives, other fair value adjustments & other financial result from infrastructure projects
-5 11 6 -5 -11 -15
Financial result from financings of other companies -41
-41 -23
-23
Derivatives, other fair value adjustments & other financial result
from Other companies -19 52 33 -57 28 -29
Equity-accounted affiliates 355 -38 317 188 124 312
EBT 507 25 532 377 141 518
Corporate income tax -60 -18 -78 -50 -5 -56
Net Income from continued operations 447 7 454 326 135 462
Net income from discontinued operations
CONSOLIDATED NET INCOME 447 7 454 326 135 462
Minorities 32 0 31 9 4 14
NET INCOME ATTRIBUTED 478 7 485 336 140 476
Results January - September 2013
13
REVENUES
Sep-13 Sep-12 Chg. % Like-for-Like (%)
Construction 2,942.5 3,168.7 -7.1 -5.9
Toll Roads 318.3 293.4 8.5 8.9
Services 2,658.5 2,204.1 20.6 23.8
Others 7.9 -13.6 n.s.
Total 5,927.1 5,652.6 4.9 6.8
EBITDA
Sep-13 Sep-12 Chg. % Like-for-Like (%)
Construction 221.0 240.7 -8.2 -5.9
Toll Roads 199.6 226.9 -12.0 -11.2
Services 211.5 215.0 -1.6 11.1
Others -0.4 -24.3 n.s.
Total 631.6 658.3 -4.1 0.2
AMORTISATION
This increased 13.0%, like-for-like, in comparison with the same period
last year to EUR181mn.
EBIT (before impairments and disposal of fixed assets)
Sep-13 Sep-12 Chg. % Like-for-Like (%)
Construction 197.7 210.5 -6.1 -3.6
Toll Roads 141.4 178.3 -20.7 -19.8
Services 114.6 134.6 -14.9 4.7
Others -2.9 -26.3 n.s.
Total 450.8 497.1 -9.3 -4.0
*For the purposes of analysis, all the notes refer to EBIT before impairments and
disposals of fixed assets.
IMPAIRMENTS AND DISPOSALS OF FIXED ASSETS
This heading principally includes the EUR20mn capital gain on the sale of
Amey’s joint-ventures.
FINANCIAL RESULT
Sep-13 Sep-12 Chg. %
Infra projects -255.6 -212.9 -20.1
Other -41.2 -22.9 -80.1
Net financial result (financing) -296.8 -235.7 -25.9
Infra projects 5.6 -15.4 n.s.
Other 33.4 -29.1 n.s.
Derivatives, other fair value adjustments
& other financial result 39.0 -44.5 n.s.
Financial Result -257.8 -280.2 8.0
The financial result improved 8.0%, reflecting the combination of the
following:
Net financing charges increased 26%. This was principally due to the
increase in financial expenses for infrastructure projects, in turn mainly
due to the increase in the level of debt associated with projects coming
into operation (SH-130). Financial expenses at the other companies also
increased, principally due to the accelerated amortisation of the
origination commissions on bank loans cancelled with the proceeds of the
bond issues (EUR16mn).
The financial result for derivatives and others is determined by the impact
of the improvement in Ferrovial’s share price on the derivatives contracts
hedging the share option schemes.
EQUITY-ACCOUNTED RESULTS
Sep-13 Sep-12 Chg. %
Construction -1.0 -0.6 n.s.
Services 11.6 9.5 22.7
Toll Roads 53.3 34.0 56.9
Airports 253.4 268.7 5.7
Total 317.3 311.5 -1.9
The companies consolidated by the equity method made a post-tax
contribution of EUR317mn (vs. EUR312mn in 2012). Note in particular the
contributions from the 407ETR (EUR53mn) and HAH (EUR253mn), with
the latter principally a reflection of the capital gain on the disposal of
Stansted Airport (EUR137mn).
TAXATION
The effective tax rate excluding the equity-accounted results stood at
36.4%.
NET RESULT
The net result reached EUR485mn (vs. EUR476mn in 2012).
Results January - September 2013
14
BALANCE SHEET AND OTHER MAGNITUDES
Sep-13 Dec-12
FIXED AND OTHER NON-CURRENT ASSETS 17,795 16,638
Consolidation goodwill 1,921 1,487
Intangible assets 221 116
Investments in infrastructure projects 7,478 6,755
Property 40 35
Plant and Equipment 495 507
Equity-consolidated companies 4,129 4,304
Non-current financial assets 1,841 1,668
Receivables from Infrastructure assets 1,333 1,334
Financial assets classified as held for sale 1 1
Restricted Cash and other non-current assets 312 148
Other receivables 195 186
Deferred taxes 1,506 1,609
Derivative financial instruments at fair value 162 158
CURRENT ASSETS 5,391 5,580
Assets classified as held for sale 2 2
Inventories 391 394
Trade & other receivables 2,560 2,204
Trade receivable for sales and services 1,931 1,647
Other receivables 540 437
Taxes assets on current profits 90 120
Cash and other financial investments 2,427 2,971
Infrastructure project companies 338 237
Restricted Cash 43 25
Other cash and equivalents 295 212
Other companies 2,090 2,734
Derivative financial instruments at fair value 11 8
TOTAL ASSETS 23,186 22,217
EQUITY 6,092 5,762
Capital & reserves attributable to the Company´s equity holders 5,814 5,642
Minority interest 277 121
DEFERRED INCOME 468 356
NON-CURRENT LIABILITIES 11,429 11,117
Pension provisions 128 105
Other non current provisions 1,364 1,166
Financial borrowings 7,457 6,996
Financial borrowings on infrastructure projects 6,324 5,825
Financial borrowings other companies 1,133 1,171
Other borrowings 207 203
Deferred taxes 1,147 1,080
Derivative financial instruments at fair value 1,127 1,567
CURRENT LIABILITIES 5,197 4,982
Financial borrowings 1,358 1,229
Financial borrowings on infrastructure projects 1,262 1,168
Financial borrowings other companies 96 61
Derivative financial instruments at fair value 89 65
Trade and other payables 3,400 3,272
Trades and payables 2,782 2,648
Deferred tax liabilities 124 75
Other liabilities 493 549
Trade provisions 350 415
TOTAL LIABILITIES & EQUITY 23,186 22,217
Results January - September 2013
15
Consolidated net debt
The net cash position excluding infrastructure projects reached
EUR835mn (EUR1,488mn in December 2012). This reduction reflects the
following: the acquisition of the UK company Enterprise in April for
EUR474mn, together with additional net investments amounting to
EUR147mn; the payment of the supplementary dividend on 23 May
(EUR0.25 per share) totalling EUR183mn; the payment in January 2013
of the withholding tax corresponding to the dividend paid on account in
December 2012 (EUR85mn). All these have been compensated by
dividends received from projects for a total of EUR373mn (EUR202mn
from Airports, EUR153mn from Toll Roads and EUR17mn from Services),
as well as cash generated from the different business units.
Net project debt stood at EUR6,910mn. The variation was principally due
to the investment in motorways under construction in the US.
This net debt includes EUR1,399mn of net debt related to motorways
under construction (NTE, LBJ and NTE 35W). It also includes
EUR1,135mn related to the radial motorways (R4 and OLR) which are
now under creditor protection.
Group net debt reached EUR6,076mn.
Sep-13 Dec-12
NCP ex-infrastructures projects 834.6 1,488.1
Toll roads -6,583.7 -6,238.1
Others -326.3 -356.5
NCP infrastructures projects -6,910.1 -6,594.6
Net Cash Position -6,075.5 -5,106.5
Credit rating
In August 2011, the credit rating agencies Standard&Poor’s and Fitch
Ratings published their opinions on Ferrovial’s credit rating for the first
time; in both cases the rating was investment grade.
Standard & Poor’s upgraded Ferrovial’s rating from BBB- to BBB on 9 May
2013.
Rating agency Rating Outlook
S&P BBB Stable
Fitch Ratings BBB- Stable
2013 dividend
The Company's Board of Directors has declared an interim 2013 dividend
of 0.40 euro gross per share.The dividend will be paid on 10 December
2013.
It is foreseen that the Board of Directors would propose to the 2014
Ordinary General Shareholders meeting for approval a complementary
dividend in the range of 0.25 to 0.30 euro gross per share
Corporate bond issuance
Ferrovial has issued two corporate bonds in 2013.
In January the group made its inaugural issue which was very well-
received by the market, and was 11x oversubscribed. The EUR500mn
five-year issue was closed at 240bp over midswap, with a coupon of
3.375%.
On 28 May Ferrovial issued a second bond, which again attracted
considerable interest and was 6x oversubscribed. This was an eight-year
EUR500mn issue at 200bp over midswap, also with a coupon of 3.375%.
In both cases, the proceeds were applied to the early retirement of
corporate debt.
With this issuance, Ferrovial has managed to optimise the maturity
schedule of its corporate debt, reduce its cost of debt and retire
practically all its bank debt.
Year Corporate debt maturities (EUR mn)
2013 60
2014 22
2015 82
2016 21
2017 11
2018 500
2019 0
2020 0
2021 - 2030 504
2031 - 2040 2
2041 - 2050 1
Results January - September 2013
16
APPENDIX I: IMPORTANT MILESTONES
Ferrovial successfully issued EUR500mn of bonds maturing on
30 January 2018.
(18 January 2013)
Ferrovial Emisiones, S.A., a subsidiary of Ferrovial, successfully priced
a EUR500mn bond issue maturing on 30 January 2018 and
guaranteed by Ferrovial and some of its subsidiaries. The Bonds carry
a 3.375% coupon payable annually.
On 3 January the Bonds were subscribed and paid for by the investors
concerned, and the Bonds started trading in the regulated London
market.
The net proceeds of EUR497.75mn were applied to amortising existing
corporate debt.
Ferrovial Servicios reached an agreement with 3i Group plc to
acquire 100% of the capital of Enterprise Plc.
(21 February 2013)
The investment made by Ferrovial Servicios amounted to an EV of
GBP385mn (EUR443mn). The perimeter of the transaction does not
include Enterprise’s joint-venture with Mouchel Limited (Mouchel) for
highway maintenance services in the UK.
Enterprise is one of the principal British supplier of services to energy
and water companies (“utilities”), as well as to public-sector
infrastructure clients. In 2012 it turned over GBP1,100mn
(EUR1,267mn) with EBITDA of GBP60mn (EUR69.1mn), excluding the
joint-venture with Mouchel.
With this acquisition, Ferrovial Services – whose UK presence is
through its subsidiary Amey – enters the utility supply services sector,
and also strengthens its environmental services business.
The deal was closed on 9 April 2013, once it had the competition
authorities’ green light.
The rating agency Standard & Poor’s upgraded Ferrovial,
S.A.’s long-term rating from BBB - to BBB with stable outlook.
(9 May 2013)
Ferrovial successfully issued EUR500mn of bonds maturing on
7 June 2021.
(28 May 2013)
Ferrovial Emisiones, S.A., a subsidiary of Ferrovial, successfully priced
the EUR500mn bond issue maturing on 7 June 2021 and guaranteed
by Ferrovial and some of its subsidiaries. The Bonds carry a 3.375%
coupon payable annually.
The investors concerned subscribed and paid for the Bonds on 7 June,
and they started trading in the regulated London bond market.
The net proceeds of EUR496.58mn were applied to retire corporate
debt (reducing the debt to EUR28mn of the syndicated credit).
Portman Baela, S.L., the largest shareholder in Ferrovial, S.A.,
announces the launch of an accelerated placement of a block
of shares equivalent to 1.4% of the company’s capital.
(30 July 2013)
Portman Baela, the largest shareholder in Ferrovial, announced that
Morgan Stanley & Co. International plc had started the private
placement of a block of 10 million shares in the Company,
representing approximately 1.4% of its capital, by means of an
“accelerated placement” exclusively for eligible Spanish residents and
institutional and or eligible investors abroad.
On 31 July, Portman Baela announced the result of the accelerated
placement. The sale totalled EUR127mn, or EUR12.70 per share. After
the placement, Portman Baela’s stake in the Company is reduced to
301,126,351 shares, or approximately 41.1%.
Events after the close
Ferrovial reaches an agreement to sell an 8.65% stake in FGP
Topco Ltd. (the HAH parent).
(22 October 2013)
Ferrovial, which indirectly owns 33.65% of Heathrow Airport Holdings
Ltd., reached an agreement with a wholly-owned subsidiary of
Universities Superannuation Scheme Limited (acting as corporate
trustee for Universities Superannuation Scheme, “USS”), to sell an
8.65% stake in FGP Topco Ltd. (parent company of Heathrow Airport
Holdings Ltd.) for GBP392mn (EUR463mn).
The transaction was completed on 24 October 2013 upon the receipt
of funds. Capital gain of EUR86mn is expected to be accounted before
2013 year end. Once the deal is closed, Ferrovial’s indirect stake in
Heathrow Airport Holdings Ltd. thus falls to 25%.
Ferrovial remains the major shareholder in FGP Topco Ltd. and its
only industrial partner.
Ferrovial's Board of Directors has declared an interim 2013
dividend of 0.40 euro gross per share to be paid on 10
December 2013.
(28 October 2013)
At a meeting today, in accordance with the provisions of article 277 of
the Capital Companies Act, the Company's Board of Directors has
declared an interim 2013 dividend of 0.40 euro gross per share.
The dividend will be paid on 10 December 2013.
It is foreseen that the Board of Directors would propose to the 2014
Ordinary General Shareholders meeting for approval a complementary
dividend in the range of 0.25 to 0.30 euro gross per share.
Results January - September 2013
17
APPENDIX II: PRINCIPAL CONTRACT AWARDS
CONSTRUCTION
NTE Extensions, NTE mobility partners segments 3, USA.
Batinah Highway Package, Ministry of Transport and communications
of Oman, Oman.
Metro Santiago T4 L3, Empresa de Tte Pasajeros Metro, S.A., Chile.
Construcción Al Ghubrah, Muscat City Desalination Company, Oman.
Nipigon Bridge, Ministry of Transportation, Canada.
Ferrocol Loma Hermosa, Departamento de Antioquia. Secretaria de
Infraestructura Fisica, Colombia.
Hetco 2 Programme Change, Heathrow Airport, UK.
Edia Cinco Reis-Trindade, Edia, Portugal.
O&M Al Ghubrah, Muscat City Desalination Company, Oman.
Nelson Bay Road, Roads and Maritime Services, Australia.
School building, Juncal Alcobendas, Spain.
Edia Calicos-Pias, Edia, Portugal.
Mostoles University Hospital, Inversiones Sur 2012, S.A., Spain.
134 residential units, Miralbueno, Spain.
Waste treatment plant, Tomaszow Mazowiecki, Water Management
Department, Tomaszow, Poland.
Corredor Mediterráneo Castellbisbal-Martorell, ADIF, Spain.
Abastecimiento Iregua, Aguas de las Cuencas de España, Spain.
Autovía Purchena, Autovía del Almanzora, Spain.
Drainage works in Sandin, Drainage & Aqueducts Department, Puerto
Rico.
Waste treatment plant Viseu-Sul, Viseu Municipal Water Treatment
Authority, Portugal.
Arroyo Niebla, Acuasur, Spain.
60 residential units, Bon Pastor, Barcelona, Spain.
51 residential units, Vitra Legazpi, Vitra Madrid, Spain.
Irrigation improvements, Sector 3, SEIASA del Norte, Spain.
Cesión Gomasper, Canary Islands government, Spain.
Refurbishment of Hotel Beach House, Evertmel, S.L., Spain.
65 residential units, La Térmica, Inmobiliaria Acinipo, Spain.
Phase 2, Yesa right bank, Ministry of the Environment, Spain.
Waste treatment plant Galapagar-Torrelodones, Canal de Isabel II,
Spain.
Pevasa Bermeo HQ, Vasco-Montañesa fish farm, Spain.
Urbanisation, University of Cadiz, Spain.
Granada Metro station, Granada, Spain.
AVE Madrid-Valencia maintenance, ADIF, Spain.
Waste treatment plant Gorzow Wielkopolski, Department of Water &
Waste Management, Poland.
Waste treatment plant maintenance, Ibiza Zona E-2, Balearic Islands
government, Spain.
BUDIMEX
Metropolitano de Pomerania Phase I, Poland.
Continuation of works on the A4, Tarnow Rzeszow, Poland.
A4 Rzeszow West - Rzeszow Central, Poland.
University Hospital Clinic in Bialysto, Poland.
Chemistry Faculty buildings, Jagellónica University, Poland.
KGHM – industrial units, Poland.
Expansion of take-off area, Warsaw Airport, Poland.
Sienna apartments, Phase II, Poland.
Clinics – University Hospital in Bydgoszcz, Poland.
Four-dome pavilion, Muzeum Wroclawiu, Poland.
Building A, Phase I - Katowice, Poland.
Installations for LEK S.A., Poland.
Research Management Centre, Warsaw Polytechnic, Poland.
Waste treatment plant modernisation, Tomaszów Mazowiecki, Poland.
Sea defences, Wicko Morsiec, Poland.
Faculty of Philology buildings, Paderevian, Poland.
Waste treatment plant, Belzyce, Poland.
Teaching centre, Faculty of Chemistry, Poznan University, Poland.
Bus shelters for MPK Lublin (municipal transport company), Poland.
Landing zone at Okecie PPS Airport, Poland.
Construction of additional floors, buildings in Wroclaw, Poland.
Lodgings in Sabe-Swinoujscie, Poland.
Construction of furnace for KGHM POLSKA MIEDZ SA, Poland.
Breakwater remodelling in Dziwnow, Poland.
WEBBER
NTE extension, Mobility partners segments 3 llc, USA.
US 290, TxDOT, USA.
Denton FM 1171, TxDOT, USA.
I 10 Bexar County, TxDOT, USA.
IH 30 ROCKWALL, TxDOT, USA.
Tomball tollway mainlanes, HCTRA, USA.
I-45 TMS Improvements, TxDOT, USA.
US 59 Angelina, TxDOT, USA.
Paving activities, USA.
Lonestar Executive Airport Runway Ext, TxDOT, USA.
IAH Project 647 Taxiway NB, Spawglass, USA.
Results January - September 2013
18
SERVICES
SPAIN
Public service contract for cleaning and conservation of public spaces
and green zones for Madrid. Lot 1 includes the Central, Chamberí,
Tetuán and Argüelles districts.
Waste treatment and assessment plant, Vega Baja, Alicante.
Highway cleaning and domestic waste collection, treatment and
elimination in the city of Alicante.
New maintenance contract for Telefónica data centres.
Cleaning and maintenance of Iberia installations at Barajas Airport.
Cleaning contract for first aid centres, Community of Madrid.
New contract for maintenance and energy services at the Social
Services building, Castille and Leon regional government.
Renewal of maintenance contract for parks and gardens in Almeria.
Contract renewal for urban waste collection and highway cleaning,
Premiá del Mar.
Prorogation of service contracts for various districts of Madrid (Usera,
Fuencarral-El Pardo, Hortaleza and Centre).
Call centre services, Castile la Mancha.
Prorogation of the cleaning contract for the Virgen del Rocío University
Hospital.
Prorogation of the cleaning contract for the University of Seville.
New contract for gardening services, Banco de Santander Financial
City.
Prorogation of urban waste collection contract for Formentera.
UK
Design, construction and operation of a waste treatment complex in
Milton Keynes
Highway management and maintenance in East Anglia
Maintenance and conservation of municipal buildings in three London
boroughs (Chelsea, Kensington and Hammersmith & Fullham)
Street maintenance and highway cleaning in Liverpool
Waste collection, Northamptonshire
Extension of the infrastructure maintenance contract for water
treatment (Yorkshire Water)
Infrastructure maintenance of the gas network for Northern Gas
Networks
Extension of BBA contracts: maintenance of T4 and T5 at Heathrow
Airport, Heathrow Express and Stansted Airport
New consultancy contract for integrated services for Kent
Meter installation and water distribution network maintenance for
United Utilities
INTERNATIONAL
Incorporation of Steel Ingeniería Chile backlog
Renewal of urgan waste collection contraction for Planalto Beirao,
Portugal
Various highway maintenance and FM contracts in Poland
New motorway conservation contract for the S-7 in Poland
Furnace cleaning, Chuquimata Mine
Various mining services contracts in Chile
Results January - September 2013
19
APPENDIX III: EXCHANGE-RATE MOVEMENTS
Exchange-rate Last (Balance sheet)
Change% 13/12 Exchange-rate
Mean (P&L) Change% 13/12
GBP 0.8362 2.8% 0.8537 5.2%
US Dollar 1.3531 2.5% 1.3181 2.5%
Canadian Dollar 1.3932 6.1% 1.3548 5.3%
Polish Zloty 4.2218 3.3% 4.2263 0.9%
Exchange rates in units per euro, with negative variations representing euro depreciation and positive variations euro appreciation.
INVESTOR RELATIONS DEPARTMENT
ADDRESS: PRÍNCIPE DE VERGARA 135 - 28002 MADRID
TELEPHONE: +34 91 586 25 65
FAX: +34 91 586 26 89
E-MAIL: [email protected]
WEB: HTTP://WWW.FERROVIAL.COM
Important information
This document contains statements regarding the Company’s future intentions, expectations and forecasts at the time of writing. These statements are
based on projections and financial estimates with underlying assumptions, announcements relating to plans, objectives and expectations that refer to
various aspects, including the growth of the various lines of business and the global business, market share, the Company’s results and other aspects
relating to its activities and situation.
These estimates, projections and forecasts are not in themselves guarantees of future performance as they are subject to risks, uncertainties and other
important factors that could result in the development and final results differing from those contained in these estimates, projections and forecasts.
This should be taken into account by all individuals or institutions that might have to take decisions or form or transmit opinions relating to stocks and
shares issued by the Company, and in particular, by the analysts and investors who consult this document. All interested parties are invited to consult
the documentation and information publicly available or filed by the Company with stock market supervisory authorities and, in particular, the
information filed with the CNMV (the Spanish stock market regulator).