January-September 2014
Results
1
A I R P OR T S T OL L R O A DS C ONS T R U C T I O NS E R V I C E S
GENERAL OVERVIEW
The results of the first nine months of 2014 show revenue growth of
10.2% to EUR6,488mn, principally driven by the Services division as a
consequence of its organic growth through contributions from new
contracts (+7.8%) and the consolidation of Enterprise for nine months
versus six months in 2013. In like-for-like terms, revenue growth was
10.2% and EBITDA 9.3%.
Important milestones during the period include: the issuance of
Ferrovial’s third corporate bond for EUR300mn with a 10-year maturity
and a coupon of 2.5%, the rating upgrade on its corporate debt from
BBB- to BBB with stable Outlook by the rating agency Fitch, and the
negotiation of a new EUR750mn liquidity line for Ferrovial (in April) for
five years at a cost of 80 basis points.
There were some important contract awards in the Construction division
that are not yet included in the backlog, worth approximately EUR800mn
at current exchange rates. They include new contracts in Budimex
(approx. EUR400mn), the widening of the I-77 toll road in North Carolina
(approx. EUR355mn at 100%) or a section of a new urban toll road in
Riyadh, Saudi Arabia (approx. EUR70mn for Ferrovial’s share).
During the period, HAH paid dividends to its shareholders totalling
GBP203mn (EUR63mn of which corresponded to Ferrovial). The 407 ETR
toll road paid dividends totalling CAD525mn (EUR163mn of which
corresponded to Ferrovial), vs. CAD430mn in 2013.
The net cash position at the end of September, excluding infrastructure
projects, stood at EUR1,533mn.
In the third quarter, Ferrovial paid a dividend equivalent to the 2013
complementary dividend, approved by the AGM in June, and introduced
the new system of shareholder remuneration, the “Ferrovial Dividendo
Flexible” (Ferrovial Scrip Dividend) (EUR0.291 per share). In October
Ferrovial announced the payment of a second dividend within the same
Scrip Dividend programme (equivalent to the 2014 interim dividend),
which will be paid in November (EUR0.381 per share). The AGM also
approved a capital reduction by means of a share buy-back and
cancellation. By 30 September, Ferrovial had bought back 5.8 million of
its own shares.
In October 2014, Ferrovial made various corporate moves as part of its
growth strategy. It made an indicative, non-binding offer for 100% of
Transfield Services in Australia and also made an offer for a stake in Aena
in the context of the potential privatisation of the latter, subject to the
outcome of the IPO. Additionally, Ferrovial Aeropuertos reached an
agreement, in a 50/50 consortium with Macquarie Infrastructure Fund 4,
to acquire 100% of the airports of Aberdeen, Glasgow and Southampton
(UK). Subject to the approval of the European competition authorities,
this deal is expected to close no later than January 2015.
Business performance During the period, the Services division consolidated its position as the
largest division in the group in terms of revenues, with significant growth
both in the UK and in Spain and continued margin improvement (7.7%
vs. 6.7% in the first quarter). The backlog reached a new high of more
than EUR20,000mn, including the equity-accounted contracts.
At Construction there was a slight decline in revenues, principally as a
reflection of the sale of Danwood (by Budimex) in 2013, as well as lower
activity in Spain and the UK due to the completion of the Terminal 2
works at Heathrow Airport. Of note were the first contract awards in
Brazil and the strengthening of Ferrovial’s presence in Australia. The
Construction backlog topped EUR7,700mn at the end of the period.
Cintra Infraestructuras was awarded the I-77 toll road in North Carolina,
USA (41.8km long), with an estimated investment of USD655mn.
The principal equity-accounted assets continued to post strong growth,
with EBITDA increases of 11.2% and 10.2% at Heathrow Holding and the
407 ETR toll road respectively.
With regard to traffic, Heathrow reported an increase of 1.5% vs. the
same period last year, with notable growth in long-haul flights. Traffic on
the 407 ETR increased by 3.4%. The improving trend at the European toll
roads seen since 4Q13 continued, with growth in Spain compared to the
previous year (with the exception of the R4) and solid increases in
Portugal and Ireland. In the USA the rising trend continued after the
negative impact of snowstorms in the first quarter of the year.
Sep-14 Sep-13 Var. Like-for-Like
Sep-14 Dec-13 Var.
Revenues 6,488 5,889 10.2% 10.2% Construction Backlog 7,726 7,867 -1.8%
EBITDA 701 631 11.1% 9.3%
Services Backlog 19,371 17,749 6.2%
EBIT 512 451 13.7% 11.1%
Net result 270 485 -44.4% Traffic Sep-14 Sep-13 Var.
Net debt Sep-14 Dec-13
ETR 407 (VKT´ 000) 1,820,860 1,760,406 3.4%
Net Debt Ex-Infrastructure Projects
1,533 1,675 Chicago Skyway (ADT) 41,424 41,673 -0.6%
Total net debt -6,054 -5,352
Indiana Toll Road (ADT) 28,692 28,303 1.4%
Ausol I (ADT) 12,177 11,793 3.3%
Ausol II (ADT) 14,368 14,024 2.5%
M4 (ADT) 26,670 25,753 3.6%
Heathrow (million pax.) 56 55 1.5%
Results January - September 2014
2
INDEX
GENERAL OVERVIEW .................................................................................... 1 Business performance ..................................................................................................... 1
INDEX ............................................................................................................ 2 TOLL ROADS .................................................................................................. 3 Assets in operation ......................................................................................................... 3 Assets under development .............................................................................................. 4 Tenders in progress ........................................................................................................ 5 Assets in insolvency proceedings ..................................................................................... 5 407 ETR ......................................................................................................................... 6 North Tarrant Express (1 – 2) .......................................................................................... 7
SERVICES ...................................................................................................... 9 Spain ............................................................................................................................. 9 UK ................................................................................................................................. 9 International................................................................................................................. 10 Backlog ........................................................................................................................ 10 Corporate transactions .................................................................................................. 10
CONSTRUCTION .......................................................................................... 11 Budimex ....................................................................................................................... 11 Webber ........................................................................................................................ 11 Ferrovial Agroman ........................................................................................................ 11 Backlog ........................................................................................................................ 11
AIRPORTS ................................................................................................... 12 Corporate transactions .................................................................................................. 12 HAH – Traffic performance ............................................................................................ 12 User satisfaction ........................................................................................................... 12 Profit & Loss Account .................................................................................................... 13 Revenue breakdown ..................................................................................................... 13 Regulatory matters ....................................................................................................... 13 Net debt ....................................................................................................................... 13 Dividends ..................................................................................................................... 13
CONSOLIDATED PROFIT & LOSS ACCOUNT ............................................... 14 BALANCE SHEET & OTHER MAGNITUDES .................................................. 16 Net debt ....................................................................................................................... 17 Credit rating ................................................................................................................. 17 Corporate bond issuance ............................................................................................... 17 Dividends 2013 & 2014 ................................................................................................. 18 Share buy-back programme (treasury stock) .................................................................. 18
ANNEXES ..................................................................................................... 19 I: Significant events ...................................................................................................... 19 Events after the close.................................................................................................... 19 II: Principal contract awards .......................................................................................... 20 III: Exchange-rate movements ...................................................................................... 20
__________________________________________________________________________________________________________________________
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).
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
Results January - September 2014
3
TOLL ROADS
Sep-14 Sep-13 Var. Like-for-Like
Revenues 323 318 1.6% 2.0%
EBITDA 203 200 1.5% 4.8%
EBITDA Margin 62.7% 62.7%
EBIT 142 141 0.6% 4.9%
EBIT Margin 44.0% 44.4%
The Toll Roads division reported positive growth (+1.6%) despite 2013
revenues being positively impacted by the reversal of provisions at the
Norte Litoral toll road (EUR7mn), and 2014 revenues negatively impacted
by the provisions made in 3Q at the same motorway for EUR4mn. The
adverse weather conditions during the first quarter in the USA were offset
by solid traffic growth in the second and third quarters of the year.
Assets in operation
TRAFFIC PERFORMANCE
In the first nine months of 2014, traffic increased on practically all the
group’s toll roads. The exceptions were the Chicago Skyway (-0.6%), due
to the negative impact of the snowstorms in the first quarter of the year,
and in spite of the growth in the second and third quarters; and the
Greek toll roads as a reflection of the impact of the sharp increase in tolls
applied in February 2014.
By country:
In Canada traffic increased by 3.4% (+2.8% in the third quarter
standalone), with positive growth in each quarter, reflecting the beneficial
effect of the lane closures on alternative routes.
In North America, we highlight the strong growth of the SH130 toll
road, where traffic surged by 17.2% vs. the first nine months of 2013
(+21.4% in the third quarter standalone). The Chicago Skyway reported
growth in the second and third quarters, but in the first nine months of
the year posted a slight drop (-0.6%). The Indiana Toll Road posted
growth in the first nine months of the year, with the second and third
quarters compensating for the significant drop in the first quarter due to
the extreme weather conditions, with heavy snowfall during January and
February.
In Spain, the improving trend observed since 3Q13 was confirmed, with
traffic growth on the principal toll roads. Note the strong growth at Ausol
(+5.2% and +5.5% on Ausol I and II, respectively) in the third quarter,
showing the benefits of the uptick in tourism, very favourable weather
conditions and a more stable macroeconomic environment than last year.
There was a slight decline in traffic on the R4, which is suffering from
being very expensive since the compensatory increase in tolls applied in
January 2014, and continues to show no signs of recovery.
The Portuguese concessions (Algarve and Azores) reported solid
traffic growth, confirming the trend seen since October 2013 thanks to
the recovery of the Portuguese economy. This was particularly the case at
the Algarve concession, which reported a cumulative growth in traffic of
10% in the first nine months of 2014. Growth in traffic remains notable,
although slightly moderated in the third quarter standalone (Algarve
+8.9% and Azores +1.7%).
In Ireland, traffic growth continues in the positive trend seen since the
second quarter of 2013, although with a slight slowdown in the third
quarter. The traffic growth for the first nine months of the year on the M4
remained positive due to the improvement in employment, in line with
2013, although with slower growth in the third quarter (+2.0%).
Finally, in Greece the negative traffic growth on the Ionian Roads
reflected the 60% increase in tolls introduced in February.
Traffic Revenues EBITDA EBITDA Margin Net Debt 100%
Global consolidation Sep-14 Sep-13 Var. Sep-14 Sep-13 Var. Sep-14
Sep-13
Var. Sep-14 Sep-13 Sep-14 Share
Intangible assets
Chicago Skyway 41,424 41,673 -0.6% 46 46 -1.5% 40 40 -1.9% 87.1% 87.4% -1,160 55%
SH-130 6,599 5,633 17.2% 13 10 28.5% 4 4 -3.1% 29.7% 39.4% -973 65%
Ausol I 12,177 11,793 3.3% 38 38 -1.7% 30 28 8.7% 79.9% 72.3% -445 80%
Ausol II 14,368 14,024 2.5%
M4 26,670 25,753 3.6% 17 17 4.4% 12 11 4.4% 68.7% 68.7% -109 66% Algarve 10,384 9,438 10.0% 36 26 37.0% 33 22 45.3% 90.8% 85.6% -119 85% Azores 8,207 8,065 1.8% 16 16 2.5% 13 6 123.3% 80.2% 36.8% -334 89%
Financial assets
Autema 71 65 9.1% 64 59 9.8% 90.5% 89.9% -652 76% M3 16 16 1.1% 12 12 1.5% 76.4% 76.2% -193 95% Norte Litoral 32 45 -28.4% 28 40 -30.8% 86.2% 89.2% -202 84% Via Livre 10 10 3.0% 1 1 100.1% 13.1% 6.7% 7 84%
Equity accounted Sep-14 Sep-13 Var. Sep-14 Sep-13 Var. Sep-14
Sep-13
Var. Sep-14 Sep-13 Sep-14 Share
407 ETR (VKT´ 000) 1,820,860 1,760,406 3.4% 446 440 1.3% 377 373 1.0% 84.4% 84.7% -4,166 43% Intangible assets
Central Greece 17,723 18,589 -4.7% 6 6 -5.4% 4 1 338.9% 68.1% 14.7% -423 33% Ionian Roads 24,064 27,901 -13.8% 55 42 29.4% 40 18 121.6% 73.4% 42.8% 118 33% Serrano Park 4 4 1.9% 2 2 13.9% 64.8% 58.0% -46 50%
Note: traffic data in ADT (average daily traffic) except in Canada.
Results January - September 2014
4
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 comprises the right to charge the corresponding
tariffs depending on the level of use.
Financial assets are concession agreements where the remuneration
comprises an unconditional contractual right to receive cash or other
financial assets, either because the entity awarding the concession
guarantees the payment of agreed sums, or because it guarantees it will
cover the gap between the sums received from the users of the public
service and the said agreed amounts. In this type of contract, the
demand risk is assumed by the entity awarding the concession.
Assets in operation classified as financial assets, where there is no traffic
risk thanks to some kind of guarantee mechanism are the Norte Litoral,
the Eurolink M3, Autema and the Via Livre.
Assets under development
ASSETS UNDER CONSTRUCTION
Global consolidation Invested Capital
Pending
committed capital
Net
Debt 100%
Share
Intangible assets 424 193 - 1,899
NTE 178 6 -767 57%
LBJ 221 44 -1,047 51%
NTE 35W 25 143 -85 50%
Equity accounted
Financial assets 6 15 -360
407 East 11 -278 50%
A-66 Benavente Zamora
6 4 -82 25%
NTE: Sections 1 and 2 of this toll road were opened to traffic on 4
October 2014, nine months ahead of schedule.
LBJ: The project is on schedule; 90% of the construction is now
complete and works are expected to be concluded in 2015.
NTE 35W: Financing for the project was closed in September 2013; the
project is on schedule and expected to open in mid-2018.
407 East: Construction work started in the first week of March, and is
now 45% complete. 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.
I-77: The project received its NTP1 (Notice to Proceed) on 22 August.
Preliminary expropriation activities have begun, together with the period
to prepare the Business Plan and the workflow timetables.
CONTRACT AWARDS
Ferrovial, through the consortium led by its subsidiary Cintra
Infraestructuras, has closed a contract with the North Carolina
Department of Transportation (NCDOT) for the design, construction,
financing, operation and maintenance of the widening of the I-77 toll
road at a total cost of USD655mn (c.EUR478mn). The new infrastructure
concession has a life of 50 years from the date it opens to traffic. The
contract was signed after NCDOT announced in April that the consortium
was the preferred bidder.
Cintra will be responsible for the development for the project, while the
design and construction will be carried out by a Joint Venture that
includes Ferrovial Agroman and the US construction company W.C.
English. The design includes widening the carriageways in both directions
over a 26m (41.8km) stretch of the I-77 toll road in the metropolitan area
north of Charlotte, between the junctions with the I-277 in Charlotte and
the NC-150 in Iredell County. The existing toll road will be rebuilt in three
sections, adding capacity by creating variable electronic toll lanes that will
improve the functioning of the corridor.
Results January - September 2014
5
Tenders in progress
Some recovery has been observed in development activity in some of
Ferrovial’s target international markets (North America, Europe, Australia
and Latin America).
In Canada, Infrastructure Ontario published a Request For Qualification
(RFQ) in March 2013 for the 407 East Extension II. Cintra’s consortium
was prequalified in April 2014. The project comprises the design,
construction, financing and maintenance of approximately 33km of toll
road. The concession has a life of 35 years. The final bid was presented
on 30 September.
SH288 Toll Lanes (Houston, Texas): Cintra was prequalified in
September 2013. The project comprises the design, construction,
financing, operation and maintenance of 10.3 miles of 2 tolled lanes in
each direction (new construction), under a real tolls regime. The contract
also includes the operation and maintenance of the toll-free lanes and the
existing service roads in the section. The final bid is expected to be
presented at the beginning of 2015.
Illinois Portion of the Illiana Corridor (Illinois, USA): Cintra was
prequalified on 17 January 2014. The project comprises the design,
construction, financing, operation and maintenance of 57km of toll road
with two lanes in each direction, under an availability payment regime.
The final bid is expected to be presented in the second quarter of 2015.
Indiana Portion of the Illiana Corridor (Indiana, USA): Cintra was
prequalified on 28 February 2014. The project comprises the design,
construction, financing, operation and maintenance of 20km of toll road
with two lanes in each direction, under an availability payment regime.
The concession has a life of 35 years from the end of construction. The
final bid is expected to be presented in the second quarter of 2015.
Assets in insolvency proceedings
Global consolidation Traffic Revenues EBITDA EBITDA Margin Net Debt 100%
Sep-14 Sep-13 Var. Sep-14 Sep-13 Var. Sep-14 Sep-13 Var. Sep-14 Sep-13 Sep-14 Share
Intangible assets
Ocaña-La Roda 3,287 3,165 3.9% 10.9 10.3 5.0% 2.3 3.8 -37.8% 21.6% 36.4% -553 54%
Radial 4 4,852 5,018 -3.3% 10.5 10.4 0.7% 4.9 4.9 0.5% 46.6% 46.7% -617 55%
Indiana Toll Road 28,692 28,303 1.4% 122.2 121.7 0.4% 87.7 90.8 -3.4% 71.8% 74.6% -3,064 50%
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 2012, this
request for court-ordered insolvency proceedings was granted.
Impairments have been recognised for all the investments and
guarantees relating to this project, such that the resolution of the
insolvency process should have absolutely no negative impact whatsoever
on Ferrovial’s accounts.
As a result of the filing for insolvency, the standstill agreements with the
creditor banks were terminated.
INDIANA TOLL ROAD
The consensual creditor protection process (Chapter 11 pre-packaged)
began with the request for the same on 22 September and it counted
with the necessary support from creditors. The debtors and shareholders
of ITR Concession Company LLL ("ITRCC") reached an agreement to
restructure the company’s debt. The agreement contemplates the sale of
the company, or the recapitalisation of the balance sheet.
OCAÑA - LA RODA
The Ocaña-La Roda toll road filed for creditor protection on 19 October
2012. On 4 December 2012 this request for court-ordered insolvency
proceedings was granted. The Creditor Committee meeting was set for 19
September 2014, but subsequently delayed again with a new date for 4
March 2015 as a consequence of the modifications introduced by the
government to insolvency legislation, which among other measures,
allows the Administration to present its own proposals.
Impairments have been recognised for the entire investment in this
project, and Ferrovial does not expect there to be any negative impact
whatsoever on its accounts from the resolution of the insolvency
proceedings.
Results January - September 2014
6
407 ETR
PROFIT & LOSS ACCOUNT
CAD Sep-14 Sep-13 Var.
Revenues 660 597 10.5%
EBITDA 557 505 10.2%
EBITDA Margin 84.4% 84.7% -0.3%
EBIT 506 459 10.2% EBIT Margin 76.7% 76.9%
Financial results -286 -191 -49.7% EBT 219 268 -18.1% Corporate income tax -58 -70 18.0%
Net Income 162 197 -18.1%
Contribution to Ferrovial
equity accounted result (€) 39 53 -27.2% Note: after Ferrovial’s disposal of 10% in 2010, the toll road switched to being consolidated by the equity method, in line with Ferrovial’s stake (43.23%).
407 ETR reported strong growth in revenues (+10.5%) and EBITDA
(+10.2%) in local currency terms. This positive growth reflects the
combination of the toll increase on 1 February, an increase in the number
of journeys (+2.7%) and an increase in the average distance travelled
(+0.7%). Average revenues per journey increased by 7.5% vs. the first
nine months of 2013.
Financial expenses increased by CAD95mn vs. the previous year due to
the increase in inflationary expectations (with no cash impact), compared
to a decline last year. Additionally, interest expenses rose due to the two
bond issues (for CAD200mn each) in June and October 2013, and the
CAD250mn bond issuance carried out in May 2014.
407 ETR made a contribution to Ferrovial’s equity-accounted results of
EUR39mn, after the annual amortisation of the goodwill generated by the
sale of 10% of the asset in 2010, which is amortised over the life of the
asset as a function of the traffic forecast.
DIVIDENDS
In the first nine months of 2014, the toll road paid dividends amounting
to CAD525mn vs. CAD430mn in the same period last year. On 23 October
2014, it agreed a new payment of CAD205mn which has already been
paid to the shareholders.
CAD 2014 2013 2012
T1 175.0 100.0 87.5 T2 175.0 130.0 87.5 T3 175.0 200.0 87.5 T4 205.0 250.0 337.5
Total 730.0 680.0 600.0
TRAFFIC
Traffic, total kilometres travelled, increased by 3.4% due to a 2.7%
increase in the number of journeys and a 0.7% increase in the average
distance travelled. Traffic is benefitting from maintenance works and lane
closures on the parallel roads.
NET DEBT
The concession’s net debt as at 30 September stood at CAD5,898mn,
with an average cost of 4.89%. In May, 407 ETR issued bonds for
CAD250mn. This issuance matures in May 2024 and carries a coupon of
3.35%.
After this issuance, 41% of the debt matures in more than 20 years’ time.
Debt maturities in 2015 and 2016 amount to CAD770mn and CAD295mn
respectively.
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).
407 ETR TOLLS
The table below compares the 2013 and 2014 tolls (increased on 1
February) for light vehicles:
CAD 2014 2013
Regular Zone Peak Period Mon-Fri: 6am-7am, 9am-10am, 3pm-4pm, 6pm-7pm
Peak Hours Mon-Fri: 7am-9am, 4pm-6pm
28,30¢ /km
30,20¢ /km
26,20¢ /km
27,20¢ /km
Light Zone Peak Period Mon-Fri: 6am-7am, 9am-10am, 3pm-4pm, 6pm-7pm Peak Hours Mon-Fri: 7am-9am, 4pm-6pm
26,90¢ /km
28,70¢ /km
24,90¢ /km
25,85¢ /km
Midday Rate Weekdays 10am-3pm 24,06¢/km 22,70¢/km
Midday Rate Weekends and public holidays 11am-7pm 22,25¢/km 21,00¢/km
Off-Peak Rate Weekdays 7pm-6am,
Weekends and public holidays 7pm-11am
19,35¢/km 19,35¢/km
Transponder: Monthly rental $3,40 $3,25
Transponder: Annual rental $21,50 $21,50
Video toll per journey $3,95 $3,80
Charge per journey (NB This is not a charge per km) $0,80 $0,70
Results January - September 2014
7
North Tarrant Express (1 – 2)
On 4 October the NTE toll road (sections 1 and 2) in Texas (USA)
was opened to traffic; this 21.4km toll road is on the Dallas-Fort Worth
axis and provides a solution to the problem of congestion on a group of
key toll roads in the area, such as the Interstate 820 and the State
121/183. The Dallas-Fort Worth axis is one of the most saturated in the
USA.
The toll road was designed as “managed lanes”, which involved
upgrading and adapting the existing highway and the construction of
completely electronic tolled lanes with no toll barriers, which offer an
alternative to the congestion problem on roads carrying high volumes of
traffic located in urban centers with no space to build new roads.
The consortium comprises Cintra, the reference manager of the asset
with a 56.7% stake, together with the infrastructure fund Meridiam
(33.3%) and DPFPS, a local pension fund (10.0%).
Key data of the concession company:
The managed lanes have a dynamic toll system, which gives the operator
the flexibility to determine the tariff depending on the level of congestion.
The sensors installed along the toll road transmit data continuously on
traffic conditions (volumes, speed, weather, level of congestion, etc.),
which are used to determine the tariff with the aim of maintaining the
traffic at a minimum speed of 50mph (80kmph) in the managed lanes.
The toll charge can be updated every five minutes.
− Initial toll regime (for the first 180 days): the tolls are fixed for
half-hour intervals in the peak periods and can be changed weekly.
During this period the maximum toll is 75 cents per mile.
− Definitive tariff regime (after the first 180 days): the tolls can
be modified every five minutes. The maximum toll is 82 cents per
mile (adjusted for inflation every year).
There is cap of 82 cents per mile which can be exceeded under the
following conditions:
− The traffic speed in the managed lanes falls below 50mph
− and/or traffic exceeds 1,650 cars per hour and per lane.
Type Description
Concessionaire NTE Mobility Partners
Location Dallas/Fort Worth, North Texas
Customer Texas Department of Transportation
56.7% Cintra Infraestructuras S.A.
33.3% Meridiam
10% Dallas Police and Fire Pension System
Opening day Oct-14
Concession start date 2009
Concession end date 2061
Duration 52 years
PurposePlan, design, finance, construct, maintain and
enhance.
Managed Investment 1,592.3 M €
Length of the highway 21.4 Km (13.5miles)
Number of lanes 2 tolled lanes and 2-3 free lanes each way
Toll System Open (free flow)
Payment methods Transponder & video
Equity structure
1.650 pce/h c/mi
0,82
1.650 pce/h c/mi
50 mi/h
Results January - September 2014
8
The construction of the toll road, which began at the end of 2010,
was completed nine months ahead of schedule. During these four years,
the corridor was kept open to traffic while the existing lanes were
widened and improved and the managed lanes were built the length of
the IH 820 and the SH 121/183 (non-toll roads) which link the IH 35W in
Fort Worth with Dallas-Fort Worth Airport on the route to Dallas.
Financial structure: Financing for the project came from four sources:
USD398mn of Private Activity Bonds (PABs)* issuance, a USD704mn long-
term TIFIA** loan from the US Department of Transportation; and the
contributions made by the consortium members (USD427mn) and the
Texas Department of Transportation (USD573mn).
PAB issuance in 2009: NTE Mobility Partners LLC issued USD398mn
(approximately EUR270mn) as part of the financing process for the toll
road.
These tax-exempt bonds were issued in the US municipal bond market.
The issuance, with an average coupon of 6.98% was the first time PABs
had been used by a private toll road concession. It comprised two issues:
one for USD59.8mn with a 7.5% coupon maturing on 31 December 2031,
and the other for USD340.2mn with a 6.875% coupon maturing on 31
December 2039. The issuance was very well-received by the market, with
demand exceeding supply by 2.4x.
* PAB: Tax-exempt bonds issued by or in the name of the local or state government intended to provide special tax benefits to the bond holders.
This is a common form of financing for joint projects between private-
sector entities and public authorities to infrastructure projects in America.
** Transportation Infrastructure Finance and Innovation Act (TIFIA) is a
programme that provides Federal credit (including direct loans,
guarantees, lines of credit) to finance transport infrastructure with a
regional or national impact. TIFIA loans have the following
characteristics:
− Long-term, low fixed cost
− Joint public/private investment
− Patient (soft) lender
− Builds up confidence in the project
− Flexible pay-back
The NTE project was a winner of the ‘Project of the Year 2010’
award from the most respected association of transport infrastructure in
the USA (ARTBA) for being one of the most innovative, complete and
complex toll roads planned in the USA. The magazine Infrastructure
Journal also selected this toll road for its ‘Best Global Transport Deal of
2009’ award.
For more information on the concession, please click on the following
related links:
http://www.youtube.com/user/TheNTExpress
http://www.youtube.com/watch?v=6f_uR_o5liI&list=UU1Y_aM6QdTQzL-4CROeRPnQ
Sources & Uses Funds (USDmn)
Total Sources 2,102 % total
Equity 427 20.31%
Subsidies 573 27.26%
PABs * 398 18.93%
TIFIA ** 704 33.49%
Total Uses 2,102 % total
Construction, opex, capex and insurance 1,807 85.97%
Interest costs capitalized 199 9.47%
Bidding costs 36 1.71%
Reserve account 60 2.85%
Results January - September 2014
9
SERVICES
Sep-14 Sep-13 Var. Like-for-Like
Revenues 3,202 2,620 22.2% 18.5%
EBITDA 246 211 16.5% 10.6%
EBITDA Margin 7.7% 8.1%
EBIT 150 114 30.8% 19.2%
EBIT Margin 4.7% 4.4%
EBITDA at Ferrovial % in equity accounted businesses
17 10 68.6% 63.5%
Backlog* 19,371 17,749 6.2% 4.6%
JVs Backlog* 1,305 874 31.0% 45.3%
Global Backlog+JVs* 20,675 18,624 11.0% 6.5%
*Backlogs compared with December 2013. JV = joint-venture
The P&L for 2014 includes the costs incurred in the integration of Amey
and Enterprise in the UK (EUR13mn) and Spain (EUR0.3mn). In
September 2013, these costs amounted to EUR17mn in the UK and
EUR3mn in Spain. The comparable column reflects the variation vs. 2013
excluding merger costs and FX movements, and resulted in revenue and
EBITDA growth of 18.5% 10.6% respectively.
The revenue growth vs. 2013 is partially a consequence of the higher
contribution from Enterprise (nine months in 2014 vs. six months in
2013). Excluding this impact, the organic growth at the Services division
would have been 7.8% (by area: +11,3% in Spain, +5.3% in the UK and
+30.3% International).
In September, the EBITDA/Sales margin stood at 7.7% vs. 6.7% in
March. Margins are expected to continue to improve in the fourth quarter,
supported by the increased contributions from the contracts started in
2014, once they have got beyond the initial start-up stage; and the
increased volume of synergies in the UK.
Finally, the growth in the backlog continued at the same pace as in recent
quarters, reaching EUR19,371mn. Including Ferrovial’s share in equity-
accounted investments, the backlog rises to EUR20,675mn, +11% vs.
December 2013 (+6.5% in pro-forma terms).
Spain
Sep-14 Sep-13 Var. Like-for-Like
Revenues 1,173 1,053 11.3% 11.3%
EBITDA 122 127 -4.0% -5.2%
EBITDA Margin 10.4% 12.1%
EBIT 61 61 -0.3% -3.0%
EBIT Margin 5.2% 5.8%
EBITDA at Ferrovial % in equity accounted businesses
3 1 n.s n.s
Backlog* 6,349 6,330 0.3% 0.3%
JVs Backlog* 349 350 -0.5% -0.6%
Global Backlog+JVs* 6,697 6,681 0.2% 0.2%
*Backlogs compared with December 2013.
Revenue growth reached 11.3% as a consequence of new contracts
awarded in 2013 coming on stream, such as the maintenance of
Valdecilla hospital in Cantabria and customer services for Renfe’s long-
distance services.
In pro-forma terms, EBITDA was 5.2% lower than in the same period last
year (EUR7mn in absolute terms). In 2013, the division booked EUR8mn
derived from the reversal of provisions after collecting on some bad debt.
However, in 2014, EBITDA reflects a negative EUR5mn impact derived
from regulatory changes that have resulted in an increase in Social
Security contributions. Excluding both the provisions reversed in 2013 and
the regulatory changes of 2014, EBITDA growth would have been
approximately 5%, in line with the higher turnover.
At end-September 2014, the EBITDA margin stood at 10.4% vs. 10.8% in
June. The reason for the contraction was the seasonality of some
personnel-intensive activities, where personnel expenses were higher in
the summer due to having to replace staff during their holidays. Margins
are expected to improve in the fourth quarter, principally as a reflection
of contributions from the new contracts where margins have already
stabilised after an initial start-up period.
UK
Sep-14 Sep-13 Var. Like-for-Like
Revenues 1,968 1,515 29.9% 22.9%
EBITDA 120 79 52.0% 31.5%
EBITDA Margin 6.1% 5.2%
EBIT 89 53 67.1% 37.9%
EBIT Margin 4.5% 3.5%
EBITDA at Ferrovial % in equity accounted businesses
10 7 53.2% 45.0%
Backlog* 12,766 11,188 14.1% 6.7%
JVs Backlog* 875 441 98.4% n.s
Global Backlog+JVs* 13,641 11,629 17.3% 9.7%
* Backlogs compared with December 2013.
The 2013 P&L only included 6 months of Enterprise, given that the
company was acquired in April 2013. Meanwhile, the costs of the
Amey/Enterprise merger had risen to EUR13mn by end-September 2014
(vs. EUR17mn in 9M13).The estimated merger costs for FY14 are
approximately GBP17mn (EUR20mn); from 2015, merger costs are no
longer expected to represent a significant cost. The comparable column
shows the performance vs. 2013 excluding in both cases these one-off
merger costs, as well as the impact of the foreign exchange rate.
The revenue and sales growth vs. 2013 were partially driven by the three
additional months from Enterprise, which boosted revenues by
EUR265mn and EBITDA by EUR13mn.
Excluding the impact of these three additional months, revenues and
EBITDA would have expanded 5.3% and 16.8% respectively vs. 2013.
The revenue growth was mainly thanks to new contracts awarded in
2013, including the contract for the maintenance of municipal buildings in
London, the waste treatment in Milton Keynes and highway maintenance
and cleaning for Liverpool. The EBITDA growth (+16.8%) is principally
due to this higher turnover, and above all, to the savings derived from
the merger of Amey and Enterprise.
The merger process is on track with the schedule determined at the time,
and will focus on procurement once the two companies have been
merged into a single entity.
Results January - September 2014
10
International
Sep-14 Sep-13 Var. Like-for-Like
Revenues 61 52 19.1% 30.3%
EBITDA 3 5 -26.6% -9.1%
EBITDA Margin 5.6% 9.1%
EBIT 0 0 -277.2% 31.3%
EBIT Margin -0.4% 0.2%
EBITDA at Ferrovial % in equity accounted businesses
4 3 53.1% 56.7%
Backlog* 256 231 10.6% 9.1%
JVs Backlog* 81 83 -2.2% 6.9%
Global Backlog+JVs* 337 314 7.2% 8.5%
*Backlogs compared with December 2013.
The revenue breakdown by country in the International area is as follows:
Chile (EUR35mn), Portugal (EUR19mn) and Poland (EUR6mn). Activity
and results in the different countries is positive, with the main negative
deviation vs. the previous year due to the consolidation in 2014 of the
necessary structure to get this new activity created in 2013 up and
running.
The International business also includes the business in Qatar, although
the results are equity-accounted. During 2013 three infrastructure
maintenance contracts at Doha airport got underway, with Ferrovial’s
share in them share of the principle magnitudes as follows: revenues
EUR19mn, EBITDA EUR4mn and backlog EUR81mn.
Backlog
At end-September, the backlog reached a new historical high of
EUR20,675mn, or 11% more than in December 2013 (+6.5% excluding
FX movements).
By business line, in Spain the backlog pending execution stood at
EUR6,697mn (+0.2% vs. December 2013). In the third quarter the
highlight was the award of a contract for the maintenance, cleaning and
energy management of the hospital complex in Orense worth EUR147mn
over 15 years.
In the UK, the portfolio reached EUR13,641mn (+17.3% vs. 2013, +9.7%
in pro-forma terms). Note the close to 100% increase in the Joint-Venture
backlog in the first nine months of the year. In the third quarter the
highlights were: the renewal of a highway maintenance contract in
Staffordshire, worth EUR776mn over 10 years, and a new contract for the
maintenance of the Docklands Light Railway trains in London; this
contract will be equity-accounted and Ferrovial’s share will be EUR172mn
over the 6.5 years of the life of the contract.
In International, the backlog to September reached EUR337mn, +7.2%
vs. 2013, or +8.5% in pro-forma terms. The highlight of the third quarter
was the award of a new contract for waste collection in the city of
Poznan, Poland, worth EUR11mn over three years.
Corporate transactions
In October 2014, Ferrovial made an indicative non-binding offer for 100%
of the capital of Transfield Services in Australia, at a price of
AUD1.95/share in cash. The price implies a premium of:
− 39% over the volume weighted average price over one week.
− 34% over the volume weighted average price over one month.
− 45% over the volume weighted average price over six months.
The offer is subject to the usual conditions and requires no external
financing. The offer is of an indicative nature and non-binding and does
not guarantee that the transaction will take place. Ferrovial Servicios
reserves the right to withdraw the said offer at any moment.
On 20 October, the Board of Transfield Services issued a recommendation
to its shareholders to take no action following Ferrovial’s offer, allowing
the latter to carry out a limited due diligence exercise on non-exclusive
terms after signing a confidentiality agreement.
Results January - September 2014
11
CONSTRUCTION
Sep-14 Sep-13 Var. Like-for-Like
Revenues 2,936 2,942 -0.2% 2.7%
EBITDA 256 221 16.1% 15.0%
EBITDA Margin 8.7% 7.5%
EBIT 229 198 15.6% 13.9%
EBIT Margin 7.8% 6.7%
Backlog* 7,726 7,867 -1.8% -5.7%
*Backlogs compared to December 2013.
Revenues declined slightly, principally due to the deconsolidation of
Danwood, a subsidiary of Budimex sold in the fourth quarter of 2013,
together with weaker activity in Spain and the UK. In like-for-like terms,
revenues increased +2.7%. International turnover accounted for 77% of
the division’s revenues. The division posted significant growth (+16.1%)
at the EBITDA level.
Budimex
Sep-14 Sep-13 Var. Like-for-Like
Revenues 860 800 7.5% 16.9%
EBITDA 38 33 16.2% 42.3%
EBITDA Margin 4.4% 4.1%
EBIT 34 27 23.3% 54.9%
EBIT Margin 3.9% 3.4%
Backlog* 1,123 1,044 7.6% 8.3%
* Backlogs compared to December 2013.
The data to September 2014 do not include Danwood, which was sold at
the end of 2013, as noted above, and which in the first nine months of
2013 made a revenue contribution of c.EUR72mn. Thus in like-for-like
terms there was a notable increase in both revenues (+16.9%) and more
particularly at EBITDA level (+42.3%), mainly due to better management
of costs of materials and subcontractors.
The backlog reached EUR1,123mn, or +8.3% in like-for-like terms vs.
December 2013. This reflected some large new contracts, marking the
beginning of a new expansion cycle supported by EU funds. These
contracts include the power station project in Turow for EUR173mn and
various toll road projects awarded by the General Highway Directorate
worth approximately EUR254mn.
Webber
Sep-14 Sep-13 Var. Like-for-Like
Revenues 518 524 -1.1% 1.2%
EBITDA 50 20 143.9% 150.7%
EBITDA Margin 9.6% 3.9%
EBIT 44 15 190.1% 198.5%
EBIT Margin 8.6% 2.9%
Backlog* 941 1,095 -14.0% -21.3%
* Backlogs compared to December 2013.
The decline in revenues was principally due to FX movements, as there
was an increase in like-for-like terms (+1.2%). Webber posted very
significant EBITDA growth, mainly as a reflection of the progressive
mitigation of construction risks on its key toll road contracts, such as the
NTE, which on 30 September were close to completion.
The backlog contracted due to the lower volume of new awards in the
first nine months of the year.
Ferrovial Agroman
Sep-14 Sep-13 Var. Like-for-Like
Revenues 1,558 1,619 -3.7% -3.3%
EBITDA 169 168 0.5% -4.3%
EBITDA Margin 10.8% 10.4%
EBIT 150 155 -3.0% -8.3%
EBIT Margin 9.7% 9.6%
Backlog* 5,662 5,728 -1.2% -5.0%
* Backlogs compared to December 2013.
Revenues at Ferrovial Agroman declined 3.3% in like-for-like terms,
principally as a reflection of the Spanish market (-5.8%) and the lower
output in the UK due to the completion of Terminal 2 at Heathrow
Airport, which was inaugurated at the end of June 2014. The new
contracts awarded to Ferrovial Agroman in new countries in the first half
of the year (principally in Brazil and Australia) are in their initial states
and have not yet translated into revenues.
Backlog
Sep-14 Dec-13 Var.
Civil work 6,071 6,164 -1.5%
Residential work 208 182 14.4%
Non-residential work 637 768 -17.0%
Industrial 810 753 7.6%
Total 7,726 7,867 -1.8%
The backlog declined vs. December 2013 (-1.8%, or -5.7% in like-for-like
terms). This reflected the high level of execution, but does not include
the new contracts that will be added to the backlog in the coming
months, worth in excess of EUR800mn including: new contracts in
Budimex for approximately EUR400mn, the widening of the I-77 toll road
in North Carolina (approximately EUR355mn at 100%) or the construction
of a section of a new urban toll road access to Riyadh (Saudi Arabia), of
which Ferrovial’s share should be around EUR70mn.
The International backlog reached EUR5,743mn, considerably more than
the domestic backlog (EUR1,983mn), or 74% of the total.
Results January - September 2014
12
AIRPORTS
HAH’s contribution to Ferrovial’s equity-accounted results was EUR35mn
vs. EUR253mn in the same period in 2013, which included the EUR137mn
capital gain on the disposal of Stansted Airport and non-recurrent items
such as the effect of the change in the tax rate.
Corporate transactions
Ferrovial has made an offer for a stake in Aena in the context of its
privatisation. This offer is subject to the outcome of the Initial Public
Offering (IPO). The potential privatisation of Aena will be effected
through the sale of 49% (28% in the IPO and 21% in a placement
among qualified institutional investors).
Additionally, in October, a consortium owned 50% by Ferrovial
Aeropuertos and 50% by Macquarie Infrastructure Fund 4, reached an
agreement to buy 100% of Aberdeen, Glasgow and Southampton
airports. The transaction implies an EV of GBP1,048mn (EUR1,317mn),
and is subject to the approval of the EU competition authorities. The deal
is expected to close no later than January 2015.
HAH – Traffic performance
During the first nine months of 2014, the number of passengers in HAH
airports reached 65.8 million, an increase of 2.0%. This positive traffic
growth was due to an increase in load-factors and the operation of larger
aircraft.
At Heathrow, traffic increased by 1.5%, with growth of 5.6% on domestic
flights due to the impact of the launch of Virgin Atlantic Little Red in the
summer of 2013. Long-haul traffic rose 2.1%, with growth of 1.6% in
traffic to North America and 3.7% on the routes to the Middle East.
Passenger load-factors in the first nine months of the year reached
77.2% vs. 77.0% in 2013 and the average number of seats per flight
stood at 204.0 per aircraft (202.3 in 2013). Heathrow operates at 98.1%
of capacity.
Heathrow’s new Terminal 2 (The Queen´s Terminal) was opened to
traffic on 4 June. From October, 26 airlines operate out of this terminal.
Terminal 2 operates approximately 350 flights per day.
Heathrow has doubled its annual traffic growth forecast for 2014, from
+0.7% to +1.5%. Traffic for the year is now expected to reach 73.4
million passengers versus a previous forecast of 72.8 million, and
compared to the 72.3 million passengers in 2013.
The non-regulated airports reported growth of 5.0%.
Traffic growth by destination
Sep-14 Sep-13 Var.
UK 9 9 4.3%
Europe 27 27 1.1%
Long Haul 30 29 2.1%
Total 66 64 2.0%
User satisfaction
User satisfaction reached record levels during the first nine months of the
year, with 78% of passengers rating their level of satisfaction as very
good or excellent, with 4.04 out of 5 points, reflecting the improvements
in punctuality, security and immigration.
For the third year running, Heathrow’s Terminal 5 has been awarded the
best airport terminal in the world by “Skytrax World Airports Awards”.
GBP Traffic (million passengers) Revenues EBITDA EBITDA Margin
Sep-14 Sep-13 Var. Sep-14 Sep-13 Var. Sep-14 Sep-13 Var. Sep-14 Sep-13 Var. (bps)
Heathrow 55.7 54.8 1.5% 1,988 1,839 8.1% 1,166 1,037 12.4% 58.7% 56.4% 225
Heathrow express
53 50 5.6% 5 5 5.8% 9.2% 9.2% 2
Adjustments
-55 -53 n.s. 1 1
n.s. n.s.
Heathrow SP 55.7 54.8 1.5% 1,986 1,836 8.2% 1,172 1,043 12.4% 59.0% 56.8% 221
Glasgow 5.9 5.7 3.7% 72 69 4.4% 28 25 10.5% 38.4% 36.3% 214
Aberdeen 2.8 2.6 8.2% 48 44 9.8% 19 16 13.8% 38.6% 37.3% 139
Southampton 1.4 1.3 4.2% 21 20 1.4% 6 6 -3.9% 28.5% 30.0% -156
Non Designated 10.1 9.6 5.0% 141 134 5.7% 52 48 9.8% 37.1% 35.7% 140
Adjustments -2 -3 n.s. -25 -12 n.s. n.s. n.s.
HAH total 65.8 64.5 2.0% 2,125 1,967 8.1% 1,199 1,079 11.2% 56.4% 54.8% 160
Results January - September 2014
13
Profit & Loss Account
GBP Sep-14 Sep-13 Var. Like-for-
Like
Revenues 2,125 1,967 8.1% 8.1%
EBITDA 1,199 1,079 11.2% 11.2%
EBITDA margin % 56.4% 54.8%
Depreciation 446 391 14.1% 14.1%
EBIT 753 687 9.6% 9.6%
EBIT margin % 35.4% 34.9%
Impairments & disposals 0 0 n.s. n.a.
Financial results -604 -672 -10.1% -6.4%
EBT 149 16 n.s. 19.9%
Corporate income tax -41 175 -123.3% -27.5%
Result from discontinued operations
4 453 -99.0% n.a.
Net income 112 643 -82.5% 17.4%
Contribution to Ferrovial
equity accounted result (€) 35 253 -86.3% 17.4%
Revenue and EBITDA growth of 8.1% and 11.2%, respectively, at HAH
reflected the combination of an 11.2% increase in aeronautical income,
driven by the tariff increase (+10.4% in April 2013 and +11.3% in July
2014 at Heathrow), and the increase in passenger traffic (+2.0%); retail
revenues rose 3.3% and Other revenues 3.1%.
Revenue breakdown
GBP Sep-14 Sep-13 Var. Like-for-Like
Aeronautic 1,336 1,202 11.2% 11.2%
Retail 412 399 3.3% 3.3%
Others 377 366 3.1% 3.1%
TOTAL 2,125 1,967 8.1% 8.1%
Aeronaut Retail Other
GBP Sep-14 LfL Sep-14 LfL Sep-14 LfL
Heathrow 1,261 11.6% 371 2.8% 354 2.6%
Glasgow 37 3.9% 23 5.6% 12 3.3%
Aberdeen 27 13.3% 10 4.4% 12 6.6%
Southampton 12 -3.7% 7 11.8% 2 2.1%
Adj & others 0
1 n.s. -3 n.s.
Total
airports 1,336 11.2% 412 3.3% 377 3.1%
Aeronautical revenues rose 11.6% at Heathrow, reflecting the
combination of higher traffic and the tariff increase in April 2013
(+10.4%) and July 2014 (+11.3%). Average aeronautical revenue by
passenger was 10.0% higher at GBP22.66 (GBP20.60 in 2013).
At Heathrow, retail revenues increased 2.8%. Net retail revenues per
passenger reached GBP6.34, or a rise of 1.7%. There was strong growth
in parking revenues (+10.6%) thanks to commercial initiatives
undertaken. Net retail spending by passenger was affected by works
carried during the summer to extend the luxury shopping area in
Terminal 5 and airlines changing terminals after the closure of Terminal
2, as well as the strength of sterling against other currencies in 2014.
In October, Heathrow agreed an extension to its contract with World Duty
Free which is expected to have a positive impact from 2014 through the
rest of the current regulatory period.
Regulatory matters
Regulatory Asset Base (RAB)
At end-September 2014 the RAB reached GBP14,844mn (vs.
GBP14,585mn in December 2013), which reflects the investment made
(GBP540mn) and the inflation increase (GBP245mn), offset by the
depreciation during the period (GBP490mn).
New regulatory period
The new regulatory period (Q6) started on 1 April 2014 and runs to 31
December 2018. The CAA approved a maximum annual increase in tariffs
per passenger of RPI -1.5%.
Airport Commission
At the end of 2013, the Airport Commission led by Sir Howard Davies
included Heathrow’s proposal for a new runway to the northeast of the
airport as one of the possible alternatives to increase capacity in the
southeast of the UK. In May 2014, HAH presented a more detailed
proposal. With this proposal the airport’s capacity would increase to 130
million passengers per year, vs. the present 80 million. The investment
required is estimated at GBP16bn over 15 years.
The Airport Commission will launch a public consultation in next months
and is expected to publish its conclusions at the end of the summer of
2015.
Net debt
GBP Sep-14 Dec-13 Var.
Senior loan facility 497 496 0.1%
Subordinated 747 752 -0.6%
Securitized Group 11,324 11,119 1.8%
Non-Securitized Group 320 325 -1.7%
Other & adjustments -90 -9 n.s.
Total 12,798 12,683 0.9%
At 30 September 2014, the average cost of Heathrow’s external debt was
5.84%, taking into account all the hedges for interest rates, exchange
rates and inflation.
Dividends
In the first nine months of 2014, HAH distributed GBP203mn vs. the
GBP491mn in the same period last year (including GBP300mn of
extraordinary dividends after the sale of Stansted Airport). The total
dividends payable in 2014 are estimated at GBP270mn. In 2013, HAH
paid its shareholders GBP255mn of ordinary dividends (vs. GBP240mn in
2012).
Results January - September 2014
14
CONSOLIDATED PROFIT & LOSS ACCOUNT
Before Fair
value Adjustments
Fair value Adjustments
Sep-14 Before Fair
value Adjustments
Fair value Adjustments
Sep-13
Revenues 6,488 6,488 5,889 5,889
Other income 6
6 7
7
Total income 6,493
6,493 5,896
5,896
COGS 5,792
5,792 5,264
5,264
EBITDA 701 701 631 631
EBITDA margin 10.8%
10.8% 10.7%
10.7%
Period depreciation 189
189 181
181
EBIT (ex disposals & impairments) 512 512 451 451
EBIT margin 7.9%
7.9% 7.7%
7.7%
Disposals & impairments 0
0 22
22
EBIT 512 512 472 472
EBIT margin 7.9%
7.9% 8.0%
8.0%
FINANCIAL RESULTS -306 15 -291 -320 63 -258
Financial result from financings of infrastructures projects -267
-267 -256
-256
Derivatives, other fair value adjustments & other financial result from infrastructure projects -8 -4 -12 -5 11 6
Financial result from ex infra projects -25
-25 -41
-41
Derivatives, other fair value adjustments & other ex infra projects -6 19 13 -19 52 33
Equity-accounted affiliates 90 1 91 355 -38 317
EBT 297 16 313 507 25 532
Corporate income tax -71 -5 -76 -60 -18 -78
Net Income from continued operations 226 11 237 447 7 454
Net income from discontinued operations
CONSOLIDATED NET INCOME 226 11 237 447 7 454
Minorities 32 0 33 32 0 31
NET INCOME ATTRIBUTED 259 11 270 478 7 485
Results January - September 2014
15
REVENUES
Sep-14 Sep-13 Var. Like-for-Like
Construction 2,936 2,942 -0.2% 2.7%
Airports 4 5 -20.5% -20.5%
Toll Roads 323 318 1.6% 2.0%
Services 3,202 2,620 22.2% 18.5%
Others 21 3 n.s. n.s.
Total 6,488 5,889 10.2% 10.2%
EBITDA
Sep-14 Sep-13 Var. Like-for-Like
Construction 256 221 16.1% 15.0%
Airports -11 -9 -16.4% -12.3%
Toll Roads 203 200 1.5% 4.8%
Services 246 211 16.5% 10.6%
Others 7 9 -23.4% -44.8%
Total 701 631 11.1% 9.3%
DEPRECIATION & AMORTISATION
The figure was 4.7% higher in like-for-like terms vs. the same period last
year, reaching EUR189mn.
EBIT (before impairments and disposal of fixed assets)
Sep-14 Sep-13 Var. Like-for-Like
Construction 229 198 15.6% 13.9%
Airports -11 -9 -16.0% -11.9%
Toll Roads 142 141 0.6% 4.9%
Services 150 114 30.8% 19.2%
Others 3 6 -57.5% -72.2%
Total 512 451 13.7% 11.1%
For purposes of analysis, all references to EBIT are before impairments and disposal
of fixed assets.
IMPAIRMENTS AND DISPOSAL OF FIXED ASSETS
In 2013, this element included the EUR20mn capital gain on Amey’s joint-
ventures.
FINANCIAL RESULT
Sep-14 Sep-13 Var.
Infrastructure projects -267 -256 -4.4%
Ex infra projects -25 -41 38.9%
Net financial result (financing) -292 -297 1.6%
Infrastructure projects -12 6 n.s.
Ex infra projects 13 33 -60.3%
Derivatives, other fair value
adjustments & other financial result
1 39 -96.5%
Financial Result -291 -258 -12.8%
The net financial had a negative evolution (-12.8%), reflecting the
combination of the following impacts:
− Lower interest expense excluding infrastructure projects, principally
due to a lower non-recurrent impact of the amortisation of
commissions (EUR3mn in 2014 vs. EUR16mn in 2013) after the debt
retirement carried out in 2013, as well as the lower cost of debt due
to lower interest rates and a different debt mix.
− Higher expenses on infrastructure projects due to assets coming into
operation.
− Lower derivatives income due to the impact of the share price in
relation to the company’s stock option hedges (the share price rose
from EUR11.20/share in December 2012 to EUR13.29/share in
September 2013, and from EUR14.07/share in December 2013 to
EUR15.35/share at end-September 2014).
EQUITY-ACCOUNTED RESULTS
Sep-14 Sep-13 Var.
Construction -2 -1 -87.3%
Services 17 11 51.6%
Toll Roads 41 53 -23.9%
Airports 35 253 -86.3%
Total 91 317 -71.3%
The companies consolidated by the equity method made a contribution of
EUR91mn after tax (vs. EUR317mn in 2013). The 2013 result included a
series of non-recurrent items, principally the capital gain on the sale of
Stansted Airport at HAH (EUR137mn).
TAXATION
The tax rate stood at 24%. Excluding the equity-accounted results, which
are included net of tax, it would stand at 34%.
NET RESULT
Net profit reached EUR270mn (vs. EUR485mn in 2013), due to the
inclusion of non-recurrent results in 2013 such as the sale of Stansted
airport and the sale of Amey’s joint-ventures.
Results January - September 2014
16
BALANCE SHEET & OTHER MAGNITUDES
Sep-14 Dec-13
FIXED AND OTHER NON-CURRENT ASSETS 18,774 17,202
Consolidation goodwill 1,971 1,893
Intangible assets 207 229
Investments in infrastructure projects 8,840 7,639
Property 6 37
Plant and Equipment 463 483
Equity-consolidated companies 3,573 3,562
Non-current financial assets 1,907 1,870
Receivables from Infrastructure assets 1,430 1,341
Financial assets classified as held for sale 1 1
Restricted Cash and other non-current assets 353 377
Other receivables 124 152
Deferred taxes 1,535 1,344
Derivative financial instruments at fair value 273 144
CURRENT ASSETS 6,417 5,618
Assets classified as held for sale 2 2
Inventories 358 325
Trade & other receivables 2,563 2,202
Trade receivable for sales and services 1,917 1,635
Other receivables 540 470
Taxes assets on current profits 106 98
Cash and other financial investments 3,490 3,070
Infrastructure project companies 483 279
Restricted Cash 76 41
Other cash and equivalents 407 238
Other companies 3,007 2,791
Derivative financial instruments at fair value 5 18
TOTAL ASSETS 25,192 22,820
EQUITY 6,229 6,074
Capital & reserves attributable to the Company´s equity holders 5,885 5,719
Minority interest 343 355
DEFERRED INCOME 872 503
NON-CURRENT LIABILITIES 12,735 11,230
Pension provisions 123 107
Other non current provisions 1,363 1,350
Financial borrowings 8,502 7,496
Financial borrowings on infrastructure projects 7,040 6,403
Financial borrowings other companies 1,461 1,093
Other borrowings 208 208
Deferred taxes 1,299 1,117
Derivative financial instruments at fair value 1,241 952
CURRENT LIABILITIES 5,355 5,013
Financial borrowings 1,395 1,303
Financial borrowings on infrastructure projects 1,324 1,228
Financial borrowings other companies 71 75
Derivative financial instruments at fair value 118 67
Trade and other payables 3,365 3,254
Trades and payables 2,777 2,665
Deferred tax liabilities 80 60
Other liabilities 508 528
Trade provisions 478 389
TOTAL LIABILITIES & EQUITY 25,192 22,820
Results January - September 2014
17
Net debt
The net cash position excluding infrastructure projects at end-September
2014 stood at EUR1,533mn (vs. EUR1,599mn in June 2014 and
EUR1,675mn in December 2013).
In the first nine months of the year, Ferrovial made investments
amounting to EUR145mn excluding infrastructure projects. These
included EUR64mn of capital investment in the American motorways (NTE
EUR29mn, NTE Extension EUR12mn, LBJ EUR10mn), and investment in
machinery for Construction (EUR27mn) and Services (EUR54mn).
In January 2014, the company paid over the withholding tax on the
dividend paid to shareholders in December 2013, amounting to EUR36mn
vs. the EUR85mn paid in the previous year.
The net cash position was also affected by the flexible dividend in July
2014 (EUR119mn).
As part of the process of acquiring the treasury stock approved by the
AGM on 26 June, Ferrovial had bought 5,852,249 of its own shares by 30
September, equivalent to EUR89.8mn.
Net project debt stood at EUR7,587mn, more than at December 2013,
due to the impact of exchange-rate movements and the investment made
in the construction of various projects underway. This net debt includes
EUR1,899mn of net debt related to toll roads under construction (LBJ,
NTE 35W and NTE, which at end-September had not yet opened to
traffic). It also includes EUR1,169mn of debt related to the R4 and OLR
toll roads which are under creditor protection.
The Group’s net consolidated debt stood at EUR6,054mn.
sep-14 dic-13
NCP ex-infrastructures projects 1,533 1,675
Toll roads -7,241 -6,710
Others -346 -317
NCP infrastructures projects -7,587 -7,027
Net Cash Position -6,054 -5,352
sep-14 dic-13
Gross financial debt -9,896 -8,799
Gross cash 3,842 3,447
Total net financial position -6,054 -5,352
Credit rating
In August 2011, the rating agencies Standard & Poor’s and Fitch rated
Ferrovial’s debt for the first time; in both cases in the Investment Grade
category.
Standard & Poor’s upgraded Ferrovial’s rating from BBB- to BBB in May
2013.
In July 2014, Fitch upgraded Ferrovial’s rating from BBB- to BBB.
Agency Rating Outlook
S&P BBB Stable
FITCH BBB Stable
Corporate bond issuance
In July, Ferrovial issued a new EUR300mn 10-year bond that was closed
at 113 basis points over mid-swap, with a coupon of 2.5%.
Together with the issuance in 2013, Ferrovial has now optimised the
maturity profile of its corporate debt and reduced its cost.
In January 2013, Ferrovial made its inaugural issuance with a EUR500mn
five-year bond that closed at a price of 240 basis points over mid-swap,
with a coupon of 3.375%.
In May 2013, it issued another EUR500mn bond with a coupon of
3.375%, this time at eight years, which closed at a price of 200bp over
mid-swap.
Año Vencimientos Deuda corporativa
2014 43
2015 14
2016 18
2017 11
2018 501
2019 96
2020
2021 - 2030 803
2031 - 2040 8
2041 - 2050 0
Results January - September 2014
18
Dividends 2013 & 2014 2013 dividend
On 28 October 2013, the Board agreed the distribution of an interim
dividend for 2013 of EUR0.40 per share gross. Payment was made on 10
December 2013.
Ferrovial Scrip Dividend (equivalent to complementary 2013 dividend)
At the Annual General Meeting (AGM) on 26 June, Ferrovial’s
shareholders approved a fully paid-up capital increase charged to
reserves for the purposes of the Ferrovial Scrip Dividend (*), a new system
of shareholder remuneration that replaces the traditional complementary
dividend for 2013. As a result of this programme:
− Ferrovial guaranteed a fixed price for the purchase of rights at
EUR0.291 per right gross.
− The number of free rights allocated required to receive one new
share was 55.
− The number of new shares issued was 5,911,393.
− Ferrovial’s capital thus amounted to 739,421,648 shares with a par
value of EUR0.20.
Ferrovial Scrip Dividend (equivalent to 2014 interim dividend)
After the approval by the AGM, the company will make a second fully
paid-up capital increase charged to reserves, in the context of its
Ferrovial Scrip Dividend programme, equivalent to the 2014 interim
dividend. This capital increase is estimated to amount to EUR293.4mn,
which is within the limit set by the AGM, which would imply a theoretical
dividend of EUR0.381 per share.
The tentative timetable for this transaction is as follows:
− 30 October 2014: Agreement to execute the capital increase.
Communication on the number of free rights allocated required to
receive one share and the guaranteed price at which Ferrovial will
buy rights. This will be based on the volume weighted average price
of Ferrovial’ shares on the five trading sessions prior to 30 October
2014 (23, 24, 27, 28 and 29).
− 3 November 2014: Publication of the capital increase in Spain’s
Official Mercantile Bulletin (BORME in its Spanish acronym).
Reference date for the allocation of rights.
− 4 November 2014: Start of trading period for free allocated rights
and of the period for requesting that Ferrovial buy these rights.
− 14 November 2014. End of period for requesting payment in cash.
− 18 November 2014. End of rights trading period. Acquisition by
Ferrovial of the rights held by shareholders who have requested that
Ferrovial buy their rights.
− 19 November2014. Ferrovial renounces the free allocated rights
acquired through its commitment to buy. Capital increase closed and
communication, in the form of an important event, indicating the final
result of the transaction.
− 19-27 November 2014. Registration of the capital increase and
listing of the new shares on the Spanish stock exchanges.
− 21 November 2014. Cash payment to those shareholders who
opted to sell their rights to Ferrovial.
− 28 November 2014. Estimated start or ordinary trading of the new
shares on the Spanish stock exchanges, subject to the approval of the
corresponding authorisations.
(*) “Ferrovial Scrip Dividend” seeks to offer shareholders the option, at
their choice, of receiving fully paid-up new shares in the Company or a
cash amount by means of selling to the Company (or in the market) the
free allocated rights that they have received in relation to the shares that
they already hold.
Share buy-back programme (treasury stock)
The AGM approved a reduction in capital by means of the acquisition of
own shares through a buy-back programme with the following principle
characteristics:
− Objective: to reduce Ferrovial’s capital by means of cancelling own
shares, with the purpose of this capital reduction to help the
Company’s shareholder remuneration policy by increasing earnings
per share. The Buy-back Programme, as well as being a channel for
acquiring the shares to be cancelled, also favours liquidity in the
stock.
− Maximum investment: EUR350mn but in no event exceeding
25,672,859 shares representing a 3.5% of the share capital at the
date of approval by the Board of this resolution.
− Price and volume: the shares shall be acquired at market price and
the number will not exceed 25% of the average daily volume in
Ferrovial’s shares, subject to price movements and market liquidity.
− Duration: until 15 December 2014, although Ferrovial reserves the
right to terminate the programme earlier if it reaches its maximum
limit in terms of either investment in euros or the number of shares,
or in any other circumstance that would make this advisable.
As at 30 September 2014, the Company had bought 5,852,249 shares
under the auspices of the Buy-back Programme. The average daily
volume in Ferrovial’s shares was 10% to that date.
Results January - September 2014
19
ANNEXES
I: Significant events
� The rating agency Fitch upgraded its long-term rating on
Ferrovial, S.A. from BBB- to BBB with stable Outlook.
(7 July, 2014)
� Ferrovial successfully completes a EUR300mn bond issuance
maturing on 15 July 2024.
(8 July, 2014)
Ferrovial Emisiones, S.A., a Ferrovial subsidiary, successfully
concluded the pricing for a EUR300mn bond issuance maturing on 15
July 2024, guaranteed by Ferrovial. The bonds pay an annual coupon
of 2.5%. The bonds were priced at 99.459% of par value. Ferrovial
expects net proceeds of approximately EUR297,177mn, which it
expects to apply to general corporate needs.
� Ferrovial announced the subscription and payment of its
EUR300mn bond issuance maturing 15 July 2024.
(15 July, 2014)
As a continuation of the information published on 8 July 2014,
Ferrovial announced that, on 15 July 2014, it had proceeded with the
subscription and payment of the above-mentioned bonds, and
requested that they be listed for trading in the AIAF fixed-income
market (AIAF). The bonds started trading on 22 July 2014.
� Ferrovial announced the end of the trading period for the free
allocated rights corresponding to the scrip issue for
shareholder remuneration as part of the Ferrovial Flexible
Dividend plan.
(17 July, 2014)
At the end of the rights trading period, 44.32% of rights holders
(325,126,615 rights) have opted to receive new shares in Ferrovial.
The definitive number of ordinary shares with a par value of 20
eurocents (EUR0.20) issued as part of this capital increase was
5,911,393. The holders of 55.68% of the free rights sold their rights
to Ferrovial, which acquired a total of 408,383,606 rights
(EUR118,839,629.35). The capital increase was closed on 17 July
2014.
Events after the close
� Ferrovial and Macquarie agree to buy 100% of the companies
that own Aberdeen, Glasgow and Southampton Airports in
the UK
(16 October, 2014)
A 50/50 consortium of Ferrovial Aeropuertos, a subsidiary of Ferrovial
and Macquarie Infrastructure Fund 4 (MEIF4), reached agreement to
buy 100% of NDH1, a company that in turn owns 100% of the
owners of Aberdeen, Glasgow and Southampton Airports.
The price agreed implies an EV of GBP1,048mn (EUR1,317mn).
Among other conditions, the deal is subject to the approval of the EU
competition authorities. The transaction is expected to close no later
than January 2015.
� Ferrovial Servicios makes an indicative, non-binding offer for
the acquisition of Transfield Services in Australia.
(20 October, 2014)
Ferrovial Servicios, a wholly-owned subsidiary of Ferrovial, S.A., has
made an indicative, non-binding offer to the Board of the Australian
company Transfield Services Ltd to acquire 100% of the company at a
cash price of AUD1.95 per share.
The total amount of the indicative, non-binding offer for 100% of the
shares of Transfield Services Ltd is approximately AUD999mn (c.
EUR680mn).
As well as the usual conditions, the offer is subject to a satisfactory
due diligence review by Ferrovial Services. Transfield is a quoted
Australian company.
Results January - September 2014
20
II: Principal contract awards
CONSTRUCTION
SPAIN
� Works on the Olivar dual-carriageway in Andalusia, Puente del Obispo junction.
� New neighbourhood of San Fernando en Lorca, Murcia.
� Residential units Prado Sierra, Tres Cantos, Madrid.
� Residential units Balcón San Lázaro Phase I & II in Zaragoza.
� Undurraga by-pass, Consorcio de Aguas, Bilbao Vizcaya.
� Works on the Las Aves building in Aranjuez, Madrid
� Adaptation of the INSS for the Ministry of Employment & Social Security in Padre Damián, Madrid
� Assembly of the high-speed train track Valladolid-Palencia
� Old age home in Arturo Soria, Madrid.
� Improvements to the L-12 platform, Madrid Metro.
� Urban integration works for the Granada Metro.
BUDIMEX
� Power plant in Turow.
� A4 dual-carriageway Rzeszow-Jaroslaw.
� A1 dual-carriageway Strykow-Tuszyn, section III
� I Vía Express on the S5 dual-carriageway Korzensko-Widawa (Wroclaw)
� Completion of the S5 dual-carriageway Poznan-Wroclaw
� AVIA residential units phases 8 & 9 in Kraków
� Production line and warehouse for Ferrero Poland
� Railway station in Bydgoszcz
� Works for the Palace of Congress in Lublin
� Take-off apron at Szymany Airport
� Road safety works on the national road N21 Slupsk
� Expansion of Szczecin-Goleniów Airport
INTERNATIONAL
� Extension of the Northern Line for the London Tube, UK
� Design and construction of the Warrell Creek to Nambucca toll road, Australia
� Los Condores hydroelectric project for Endesa in Chile.
� Airport installations at Heathrow Airport - Q6, UK
� FM 423 highway, Denton, USA
� Works on the SH-99 toll road, Harris, USA
� FM 2499 toll road, Denton, USA
SERVICES
SPAIN
� Contract for energy supply, maintenance, cleaning and security for the Hospital Complex, Orense.
� Highway cleaning, waste collection and cleaning of municipal buildings for Orotava Town Hall, Tenerife
� Cleaning and other services for the Virgen del Rocío University Hospital, Seville
UK
� Highway maintenance for Staffordshire County
� Maintenance and cleaning of buildings for Kent County
� Maintenance of the Docklands Light Railway trains (DLR)
INTERNATIONAL
� Maintenance of the medium- and low-tension electricity system in the Chuquicamata region, Chile
� Urban waste treatment and collection in Poznan, Poland
� Contract for the modernisation of the electricity system in Kraków, Poland
III: Exchange-rate movements
Exchange-rate Last
(Balance sheet) Change 14/13
Exchange-rate Mean
(P&L) Change 14/13
GBP 0.7786 -6.45% 0.8079 -5.36%
US Dollar 1.2629 -8.41% 1.3493 2.37%
Canadian Dollar 1.4156 -3.40% 1.4786 9.14%
Polish Zloty 4.1832 0.66% 4.1830 -1.02%
Exchange rates in units of currency per euro, with negative variations representing euro depreciation and positive variations euro appreciation.
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