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Ferrovial's Financial Report for January-June 2014
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January - June 2014
Results
1
A I R P O R T S T O L L R O A D 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
GENERAL OVERVIEW
In the first six months of 2014 the Group reported revenue growth of
11.5% reaching EUR4,159mn, mainly driven by the Services division on
the back of organic growth from the contribution of new contracts and
the consolidation of Enterprise (consolidated for six months in 2014 vs.
only three in 2013). LFL revenue growth was a solid +12.5% and EBITDA
increased by 3.5%.
During the period, Ferrovial, through a consortium led by its subsidiary
Cintra Infraestructuras, closed a contract for the design, construction,
financing, operation and maintenance of the concession for 41.8km of the
I-77 toll road in North Carolina (USA), with an estimated investment of
USD655mn.
Another event of note during the first half was the negotiation with 12
banks for a new 5-year, EUR750mn liquidity line for Ferrovial, signed in
early April, at a current cost of 80bp. This line has not yet been drawn,
which increases the company’s financial flexibility. After the close of 1H
2014, the rating agency Fitch upgraded Ferrovial’s corporate debt from
BBB- to BBB with stable Outlook. In the second week of July, Ferrovial
issued its third corporate bond for EUR300mn, with a 10 year maturity
and with a coupon of 2.5%.
Ferrovial S.A.’s AGM was held on 26 June 2014, when the shareholders
approved a capital increase charged to reserves to introduce a new
flexible shareholder remuneration system, the so-called “Ferrovial Flexible
Dividend”.
Also during the period, HAH paid GBP135mn in dividends, of which
EUR41mn corresponded to Ferrovial. The 407ETR toll road paid CAD350m
in dividends during the period (of which EUR110mn corresponded to
Ferrovial), more than the CAD230m paid in the first half of 2013.
Net cash excluding infrastructure projects reached EUR1,599mn at end-
June 2014.
Finally, the Construction division won some important contracts that are
not yet reflected in the backlog, including an electricity generation plant
in Poland and the extension of the I-77 toll road in North Carolina (USA)
and new contracts totalling approximately EUR1,100mn at current
exchange rates.
Business performance
The group’s two principle assets confirmed their resilience during the
period, with EBITDA growth of 15.6% at Heathrow Airport and 10.0% at
the 407ETR toll road.
In terms of traffic, Heathrow’s increased by 1.9% vs. the same period last
year, while at the 407ETR traffic increased by 3.8%. The improving trend
seen since the last quarter of 2013 at the European toll roads was
confirmed, with growth in Spain vs. the same period last year and solid
growth in Portugal and Ireland.
The Services division consolidated its position as the biggest division in
the Group in terms of revenues, EBITDA and backlog, with significant
growth in both the UK and in Spain. The backlog reached a new high of
close to EUR20bn including the contracts consolidated by the equity
method.
At the Construction division there was a slight decline in revenues, mainly
due to exchange-rate movements and the 2013 disposal of Danwood, a
company owned by Budimex. We also highlight Ferrovial’s entry into new
countries with the first contract awards in Brazil and Saudi Arabia, as well
as a strengthening of its position in Australia.
jun-14 jun-13 Var. Like-for-Like (%)
jun-14 dic-13 Var.
Revenues 4.159 3.732 11,5% 12,5%
Construction Backlog 7.297 7.867 -7,3%
EBITDA 435 415 4,8% 3,5%
Services Backlog 18.841 17.749 6,2%
EBIT* 315 302 4,3% 2,2%
Net result 168 287 -41,4%
Traffic jun-14 jun-13 Var.
Cash flow ex-projects
ETR 407 (VKT´ 000) 1.145.192 1.103.360 3,8%
Operating cash flow 72 -154
Chicago Skyway (ADT) 37.755 38.288 -1,4%
Investment -82 -603
Indiana Toll Road (ADT) 25.854 25.765 0,3%
Divestment 21 46
Ausol I (ADT) 10.315 10.132 1,8%
Net debt jun-14 dic-13
Ausol II (ADT) 12.764 12.707 0,5%
Net Debt Ex-Infrastructure Projects 1.599 1.675
M4 (ADT) 25.653 24.562 4,4%
Total net debt -5.563 -5.352
Heathrow (million pax.) 35 34 1,9%
Results January-June 201
2
TOLL ROADS
Jun-14 Jun-13 Var. Like-for-Like
(%)
Revenues 200 206 -3.0% -2.3%
EBITDA 123 125 -1.8% 3.0%
EBITDA
Margin 61.4% 60.7%
EBIT 86 91 -5.6% 0.4%
EBIT Margin 42.9% 44.1%
Revenues at this division were mainly affected by the reversal of
provisions made in 2013 at the Norte Litoral toll road (EUR7mn) and the
adverse weather conditions in the first quarter of the year in the USA.
Assets in operation
TRAFFIC PERFORMANCE
Traffic growth was very positive in the second quarter, on the Group’s toll
roads. In North America, both Chicago and Indiana posted growth in the
period vs. significant declines in the first quarter due to the extreme
weather conditions and heavy snowfalls in January and February. Note
the strong YOY growth (+14.8%) in 1H 2014 on the SH130.
In Spain, the improving trend observed at the end of 2013 was
confirmed, with traffic growth on all the toll roads with the exception of
the R4, which saw a slight fall.
The Portuguese concessions (Algarve and Azores) posted solid traffic
growth, confirming the trend observed in the latter part of 2013.
In Ireland, traffic on the M4 maintained positive growth in the first half of
the year due to the improvement in employment, in line with the
performance in 2013.
Finally, in Greece, the fall in traffic on the Ionian Roads and Central
Greece toll roads is impacted by the 60% increase in tolls applied since
February
.
Traffic Revenues EBITDA EBITDA Margin Net Debt 100%
Global consolidation Jun-14 Jun-13 Var. Jun-14 Jun-13 Var. Jun-14 Jun-13 Var. Jun-14 Jun-13 Jun-14 Share
Intangible assets
Chicago Skyway
37,755 38,288 -1.4% 28 29 -4.5% 24 25 -5.4% 85.9% 86.6% -1,081
55%
SH-130 6,273 5,463 14.8% 8 7 24.7% 2 2 -10.3% 25.3% 35.2% -895 65%
Ausol I 10,315 10,132 1.8% 19 20 -8.2% 14 13 8.1% 73.7% 62.6% -452 80%
Ausol II 12,764 12,707 0.5%
M4 25,653 24,562 4.4% 11 11 4.8% 8 7 4.7% 68.3% 68.4% -109 66%
Algarve 7,589 6,824 11.2% 20 17 12.7% 17 15 16.5% 88.5% 85.6% -131 85%
Azores 7,856 7,719 1.8% 10 10 2.5% 8 1 n.s. 78.6% 10.8% -326 89%
Financial assets
Autema
48 44 7.4% 43 39 8.5% 89.6% 88.7% -642 76%
M3
11 10 1.2% 8 8 2.1% 76.2% 75.6% -195 95%
Norte Litoral
24 33 -26.5% 21 29 -28.0% 87.4% 89.2% -189 84%
Via Livre
6 6 -5.6% 1 0 61.7% 9.6% 5.6% 7 84%
Equity accounted Jun-14 Jun-13 Var. Jun-14 Jun-13 Var. Jun-14 Jun-13 Var. Jun-14 Jun-13 Jun-14 Share
407 ETR (VKT´ 000) 1,145,192 1,103,360 3.8% 276 277 -0.6% 230 234 -1.7% 83.5% 84.4% -3,992 43%
Intangible assets
Indiana Toll Road 25,854 25,765 0.3% 74 74 0.2% 53 56 -4.7% 71.8% 75.5% -2,829 50%
Central Greece 16,437 17,275 -4.8% 4 4 -5.5% 2 -1 -424.9% 66.8% -19.4% -413 33%
Ionian Roads 22,495 26,253 -14.3% 33 26 24.9% 23 8 172.3% 68.4% 31.4% 187 33%
Serrano Park
3 3 0.7% 2 2 11.9% 66.3% 59.6% -46 50%
Results January-June 201
3
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 due 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 407 195 -1,661
NTE 165 18 -667 57%
LBJ 221 41 -929 51%
NTE 35W 21 136 -65 50%
Equity accounted
Financial assets 4 15 -259
407 East 9 -207 50%
A-66 Benavente
Zamora 4 6 -52 25%
NTE: This toll road will open to traffic in the second half of 2014.
LBJ: The project is progressing according to schedule, and 84% of the
construction phase is now complete and is expected to conclude in 2015.
NTE 3A3B: The financing for the project was closed on September 2013.
At 30 June 2014, the project is progressing according to schedule, with
the opening expected for mid-2018.
407 East: Construction started in the first week of March, and is expected
to be completed at the end of 2015. The rating agencies DBRS and S&P
have affirmed the project’s rating at A- with stable Outlook.
CONTRACT AWARDS
Ferrovial, through the consortium led by its subsidiary Cintra
Infraestructuras, has closed a contract with North Carolina Department of
Transport (NCDOT) for the design, construction, financing, operation and
maintenance of the extension of the I-77 toll road for a total of
USD655mn (some EUR478mn). The concession period for the new
infrastructure is 50 years from the date the toll road opens to traffic. The
contract was signed after NCDOT’s selection in April of the consortium as
it had the best proposal.
Cintra will be responsible for the development of this project, while the
design and construction will be done by a JV which includes Ferrovial
Agromán and the US construction company W.C. English. The design
includes lane-widening, in both directions, for a 26-mile (41.8km) section
of the I-77 toll road in the metropolitan area to the north of Charlotte,
between the junctions with the I-277 in Charlotte and the NC-150 in
Iredell County. The existing roadway will be reconstructed in three
sections, adding capacity by creating variable electronic toll lanes that will
improve the functioning of the corridor.
Results January-June 201
4
Tenders in progress
There was a recovery in development activity in Ferrovial’s international
target markets (North America, Europe, Australia and Latin America).
In Australia, the consortium led by Cintra has been selected for the final
stage of the bidding process for the East West Link project. This project
comprises the design, construction, financing, operation and maintenance
of 9km of toll road, of which 4.3km are in a tunnel. This is a project
under payment for availability.
In Canada, Infrastructure Ontario published an RFQ in March 2013 for the
407East Extension II. In April 2014, the Cintra consortium was
prequalified. The project is for the design, construction, financing and
maintenance of approximately 33km of toll road, and the contract has a
life of 35 years.
Portsmouth Bypass (Ohio). Cintra was prequalified on 6 September
2013. The project is for the design, construction, financing and
maintenance of approximately 26km of toll road. This is a project without
traffic risk.
SH288 Toll Lanes (Houston, Texas). In September 2013, Cintra was
prequalified. The project consists of the design, construction, financing,
operation and maintenance of 10.3 miles of two toll lanes in both
directions (new construction), under a real toll regime. It also includes
the operation and maintenance of the existing non-toll lanes and service
roads on the section.
Illinois Portion of the Illiana Corridor (Illinois, USA). Cintra was
prequalified on 17 January 2014. The project consists of the design,
construction, financing, operation and maintenance of 57km of toll road
with two lanes in each direction, under a payment for availability regime.
Indiana Portion of the Illiana Corridor (Indiana, USA). Cintra was
prequalified on 28 February 2014. The project consists of the design,
construction, financing, operation and maintenance of 20km of toll road
with two lanes in each direction, under a payment for availability regime.
The contract would be for 35 years from the completion of construction.
ASSETS UNDER CREDITOR PROTECTION
Global
consolidation
Traffic Revenues EBITDA EBITDA Margin Net Debt 100%
Jun-14 Jun-13 Var. Jun-14 Jun-13 Var. Jun-14 Jun-13 Var. Jun-14 Jun-13 Jun-14 Share
Intangible assets
Ocaña-La Roda 2,637 2,505 5.2% 6 5 6.4% 1 0 114.6% 19.2% 9.5% -551 54%
Radial 4 4,153 4,290 -3.2% 6 6 0.1% 2 2 -5.9% 38.6% 41.1% -612 55%
RADIAL 4
On 14 September 2012, the Board of the Radial 4 agreed to request a
judicial declaration of voluntary insolvency. On 4 October, this request
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 no negative impact whatsoever on
Ferrovial’s accounts.
As a result of the filing for insolvency, the moratorium agreements with
the creditor banks were terminated.
OCAÑA - LA RODA
The Ocaña-La Roda toll road requested a judicial declaration of voluntary
insolvency on 19 October 2012. On 4 December 2012 this request was
granted. The Creditor Committee meeting was set for 19 September
2014.
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-June 201
5
407ETR
PROFIT & LOSS ACCOUNT
CAD Jun-14 Jun-13 Var.
Revenues 414 372 11.3%
EBITDA 345 314 10.0%
EBITDA Margin 83.5% 84.4% -1.1%
EBIT 313 284 10.1%
EBIT Margin 75.6% 76.4% Financial results -203 -110 85.0%
EBT 109 174 -37.2%
Corporate income tax -29 -46 -37.7%
Net Income 81 128 -37.0%
Contribution to Ferrovial
equity accounted result (€) 18 35 -49.2% NB: since Ferrovial’s sale of 10% of the concession in 2010, the toll road has been consolidated by the equity method, as a reflection of the size of Ferrovial’s stake in the concession (43.23%).
407ETR posted significant revenue and EBITDA growth of 11.3% and
10.0% in local currency terms. This positive performance reflected the
combination of the tariff increases that came into force on 1 February,
the increase in the number of journeys and in the average distance
travelled. Average revenues per journey increased by 8.1% vs 2013.
The financial result was higher than in the previous year due to the
increase in inflationary expectations – with no cash outflow – vs. a decline
last year. In addition, interest expenses were higher due to the issuance
of two bonds of CAD200mn each, one in June and the other in October
2013 and one for EUR250mn in May 2014.
407ETR contributed EUR18mn to Ferrovial’s equity accounted results after
the annual depreciation of the goodwill generated on the sale of 10% of
the concession in 2010, which is being depreciated over the life of the
asset as a function of the expected traffic.
DIVIDENDS
In the first half of the year, the concession paid CAD350mn in dividends
(vs. CAD230mn in 2013). On 17 July, it agreed another distribution of
CAD175mn which will be paid in the third quarter.
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 250.0 337.5
Total 680.0 600.0
TRAFFIC
Traffic, total kilometres travelled, increased 3.8% as a reflection of a
2.8% increase in the number of journeys and a 1.0% rise in the average
distance travelled. Traffic is benefiting from maintenance works and lane
closures on the parallel roads.
NET DEBT
The toll road’s net debt at 30 June stood at CAD5,759mn with an average
cost of 4.96%. In May 2014, the concession issued a CAD250mn bond
maturing in May 2024 and with a coupon of 3.35%.
After this issuance, 42% of the debt matures at more than 20 years. The
2015 and 2016 debt maturities amount to CAD627mn and CAD294mn
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).
407ETR TARIFFS
The table below shows the comparison between the tariffs in 2013 and
those in 2014 (increase 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 & holidays 11am-7pm 22,25¢/km 21,00¢/km
Off Peak Rate
Weekdays 7pm-6am, Weekends & 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-June 201
6
SERVICES
Jun-14 Jun-13 Var. Like-for-Like
(%)
Revenues 2,125 1,655 28.4% 25.7%
EBITDA 158 138 14.7% 11.6%
EBITDA Margin 7.5% 8.3%
EBIT 94 76 24.9% 18.5%
EBIT Margin 4.4% 4.6%
EBITDA at Ferrovial % in equity accounted
businesses
11 4 n.s n.s
Backlog* 18,841 17,749 6.2% 3.6%
JVs Backlog* 1,146 875 31.0% 28.4%
Global Backlog+JVs* 19,987 18,624 7.3% 4.7%
*Backlogs compared with December 2013.
Revenue growth vs. 2013 is a consequence of both organic growth in the
division’s activity +8.6% (+10.2% in Spain, +7.4% in the UK and
+24.7% International) and from the increase in the contribution from
Enterprise (with six months consolidated in 2014 vs. three months in
2013).
The 2014 P&L includes the costs incurred in the integration of Amey and
Enterprise in the UK (EUR10mn) and the Spanish businesses (EUR0.3mn).
In June 2013, these costs amounted to EUR12mn in the UK and EUR2mn
in Spain.
The EBITDA margin reached 7.5% in June vs. 6.7% in the first quarter of
this year. The margin is expected to gradually improve over the rest of
the year, supported by an increase in the contribution from the contracts
which have started in 2014, once they have passed the start-up phase,
and the higher volume of synergies in the UK.
There was also strong EBITDA growth in the equity-accounted
companies, which reached EUR11mn vs. EUR4mn in June 2013.
Finally, the backlog maintained the same rate of growth as in recent
quarters, reaching EUR18,841mn. Including Ferrovial’s stake in the
equity-accounted companies, the backlog stood at EUR19,987mn, 7.3%
higher than in December 2013 (+4.7% in pro-forma terms).
Spain
Jun-14 Jun-13 Var. Like-for-Like
(%)
Revenues 774 702 10.2% 10.2%
EBITDA 84 95 -12.3% -12.4%
EBITDA Margin 10.8% 13.6%
EBIT 42 51 -16.4% -16.6%
EBIT Margin 5.5% 7.2%
EBITDA at Ferrovial % in equity accounted businesses
2 0 n.s n.s
Backlog* 6,407 6,330 1.2% 1.2%
JVs Backlog* 343 351 -2.3% -2.3%
Global Backlog+JVs* 6,750 6,681 1.0% 1.0%
*Backlogs compared with December 2013.
Revenues increased 10.2% as a consequence of the start-up of new
contracts won in 2013, such as maintenance at Valdecilla Hospital in
Cantabria, and passenger services on long-distance trains.
In spite of the revenue growth, EBITDA was 12.3% lower than in June
2013 (or -EUR12mn in absolute terms) . This mainly reflected the impact
of two factors: the reversal of provisions for overdue accounts in 2013
(EUR9mn reversed in 2013 vs. zero in 2014), and an increase in Social
Security contributions due to changes in the legislation, which resulted in
an additional charge of EUR3mn in 2014 (the full-year impact is expected
to reach EUR6mn).
Some new contracts came into operation during the year that have been
less profitable than the rest of the backlog during the first few months of
the start-up phase. The margins on these new contracts have now
started to stabilise, and this was the main reason for the higher EBITDA
margin in June (10.8%) than in the first quarter of the year (10.3%).
UK
Jun-14 Jun-13 Var. Like-for-Like
(%)
Revenues 1,312 918 42.9% 37.0%
EBITDA 73 39 86.9% 58.5%
EBITDA Margin 5.5% 4.2%
EBIT 52 24 118.7% 70.6%
EBIT Margin 4.0% 2.6%
EBITDA at Ferrovial % in equity accounted
businesses
8 4 n.s n.s
Backlog* 12,165 11,188 8.7% 4.6%
JVs Backlog* 723 441 63.8% 57.5%
Global Backlog+JVs* 12,888 11,629 10.8% 6.6%
*Backlogs compared with December 2013.
The significant revenue and EBITDA growth vs. 2013 was driven by both
the strong organic growth and the consolidation of six months of
Enterprise in 2014 vs. three months in 2013 after the acquisition in April;
this accounted for an additional EUR265mn of revenues and EUR13mn at
EBITDA level.
Excluding the impact of these additional three months, LfL revenues and
EBITDA growth would have been 7.3% and 27.5% respectively vs. 2013.
The organic revenue growth was mainly derived from the contribution
from the new contracts won in 2013, including the maintenance of public
buildings in London, the waste treatment plant in Milton Keynes and
highway maintenance and street cleaning in Liverpool. The LfL EBITDA
growth (+27.5%) was a reflection of this higher turnover and, above all,
to the savings arising on the merger of Amey and Enterprise.
On the other hand, the integration costs of this merger reached EUR10mn
in the first half of 2014 (vs. EUR12mn in 2013). Integration costs for the
full year are expected to reach approximately GBP17mn (EUR20mn); from
2015 onwards no significant costs are anticipated. The “Proforma” column
in the above table shows the performance vs. 2013 excluding non-
recurrent merger costs in both years, as well as the impact of exchange-
rate movements.
In relation to the integration process, to date the synergies generated
have been driven by action taken in two areas in particular: the
introduction of a single organisational structure, and changes in
procurement procedures. In the first case, the bulk of the integration into
a single unit was completed in 2013, such that the savings arising on this
Results January-June 201
7
integration are already consolidated in the P&L. In the area of
procurement, the action taken are intended to achieve more efficient
supplier management and personnel expenses; the June accounts already
reflects savings derived from these measures, and these savings are
expected to increase progressively over the rest of the year.
The consolidation of the merger synergies is the main driver of the
improvement in the margin vs. the first quarter of this year (to 5.5% in
June vs. 4.7% in March).
International
Jun-14 Jun-13 Var. Like-for-Like
(%)
Revenues 39 35 12.0% 24.7%
EBITDA 2 4 -46.2% -32.7%
EBITDA Margin 5.4% 11.3%
EBIT 0 1 -147.4% -197.1%
EBIT Margin -1.1% 2.5%
EBITDA at Ferrovial % in
equity accounted businesses
1 0
Backlog* 269 231 16.2% 16.2%
JVs Backlog* 81 83 -2.6% -3.3%
Global Backlog+JVs* 349 314 11.3% 12.2%
*Backlogs compared with December 2013.
The breakdown of revenues by country in the International area is as
follows: Chile (EUR22mn), Portugal (EUR12mn) and Poland (EUR4mn).
The business performance and results in the different countries is
positive, with the principal negative deviation vs. last year due to the
consolidation in 2014 of the structure necessary for this new activity
created in 2013 to function.
Activity in Qatar is also included in the International area, although the
results are equity-accounted. During 2013, three infrastructure
maintenance contracts at Doha airport came into operation. In June
2014, the main figures of Ferrovial’s stake in these contracts stood at:
revenues EUR12mn; EBITDA EUR1mn; and backlog EUR81mn.
Backlog
As in 2013, in the first half of the year there was a high volume of awards
which took the backlog pending execution to a new all-time high of
EUR18,841mn, +6.2% vs. December 2013 (+3.6% excluding exchange-
rate movements).
Including the part corresponding to Ferrovial pro rata to its stake in the
equity-accounted companies and in which it has a significant interest, the
backlog amounted to EUR19,987mn (+7.3% vs. 2013, +4.7% excluding
exchange-rate movements).
By business area, in Spain the backlog pending execution to June stood
at EUR6,750mn (+1% vs December 2013). The awards in 2Q14 included
extensions of contracts for waste collection and street cleaning in
Barcelona, Almendralejo, Sitges and Pontevedra, together amounting to
EUR166mn.
In the UK, the backlog amounted to EUR12,888mn (+10.8% vs. 2013,
+6.6% in pro-forma terms). In 2Q14 the notable awards included a new
contract with Network Rail for the renewal of switches and crossings on
the Scottish, Welsh, Midlands and London area networks for a period of
10 years for EUR469mn; maintenance of military buildings and
installations in various regions of England and Scotland worth EUR378mn
over five years; and highway maintenance in south east Scotland for
EUR183mn over six years.
In International, the backlog to June stood at EUR349mn (+11.3% vs.
2013, +12.2% in pro-forma terms). In the second quarter the awards of
note were integrated support services for the Ministro Hales mine in Chile
(EUR25mn, five years) and a contract for earth moving and mine waste
management in the municipality of Talabre (EUR12mn, four years). In
Poland, the company was awarded a contract for the maintenance of the
S7 toll road (EUR11mn, six years). Finally, in Qatar, the maintenance
services contract for Doha airport was extended for 22 months for a
consideration of EUR18mn.
Results January-June 201
8
CONSTRUCTION
Jun-14 Jun-13 Var. Like-for-Like
(%)
Revenues 1,804 1,859 -3.0% 0.7%
EBITDA 153 154 -0.9% -0.1%
EBITDA Margin 8.5% 8.3%
EBIT 137 140 -2.3% -2.0%
EBIT Margin 7.6% 7.5%
Backlog* 7,297 7,867 -7.3% -7.7%
*Backlogs compared with December 2013.
Revenues declined slightly, principally due to the deconsolidation of
Danwood, a company owned by Budimex sold in the last quarter of 2013,
as well as lower activity in Spain and the UK. In LfL terms, there was a
mild increase in revenues (0.7%). International turnover represented
75% of the division’s revenues.
EBITDA remained in line with 2013 in LfL terms.
Budimex
Jun-14 Jun-13 Var. Like-for-Like
(%)
Revenues 481 476 1.1% 10.7%
EBITDA 20 18 7.9% 28.6%
EBITDA Margin 4.1% 3.8%
EBIT 17 15 14.7% 40.2%
EBIT Margin 3.5% 3.1%
Backlog* 945 1,044 -9.5% -9.4%
*Backlogs compared with December 2013.
The figures for June 2014 do not include the contribution from Danwood,
sold at the end of 2013, as noted above, whose contribution in 1H13
amounted to revenues of EUR45mn and EBITDA of EUR2.5mn. In LfL
terms, the division posted both strong revenue growth (+11%) and
stronger EBIT growth (+40%), principally due to better management of
costs of materials and subcontractors.
The backlog stood at EUR945mn, or 9.4% lower LfL vs. December 2013,
although this situation will reverse in the coming months when some
large contracts still pending signature worth more than EUR500mn are
included in the backlog, marking the start of a new expansive cycle
supported by EU funding. These contracts include pre-assigned projects
for the Directorate General of Roads for approximately EUR350mn, as
well as the construction of a coal unit at the Turow electricity generating
plant for EUR770mn awarded to a consortium in which Budimex has a
22.3% stake.
Webber
Jun-14 Jun-13 Var. Like-for-Like
(%)
Revenues 326 348 -6.1% -1.8%
EBITDA 33 19 75.4% 84.6%
EBITDA Margin 10.1% 5.4%
EBIT 29 15 92.2% 102.5%
EBIT Margin 8.9% 4.4%
Backlog* 906 1,095 -17.2% -17.8%
*Backlogs compared with December 2013.
The slight decline in revenues in LfL terms (-1.8%) was due to reduced
execution in the organic construction activity. EBIT doubled, principally
due to the progressive mitigation of risks in the construction of the
principal toll road contracts, which are close to completion.
The backlog contracted (-17.8% in local currency terms) due to the lower
volume of contract awards in the first half of the year.
Ferrovial Agromán
Jun-14 Jun-13 Var. Like-for-Like
(%)
Revenues 996 1,036 -3.8% -2.7%
EBITDA 101 118 -14.4% -16.3%
EBITDA Margin 10.1% 11.3%
EBIT 90 110 -17.6% -19.8%
EBIT Margin 9.1% 10.6%
Backlog* 5,446 5,728 -4.9% -5.5%
*Backlogs compared with December 2013.
Revenues at Ferrovial Agromán fell by 2.7% LfL, mainly due to the
Spanish market, which fell by 3.1%, and the lower output in the UK due
to the completion of the recently inaugurated Terminal 2 at Heathrow
Airport. The contracts awarded to Ferrovial Agromán in new countries in
the first half (Brazil and Australia, principally) are in the start-up phase
and are not yet generating revenues.
Profitability slipped a little vs. 2013, reflecting a combination of the
margins generated on the US projects and the reversal of provisions on
the completion of projects, which were not offset by the start of new
projects.
Backlog
The backlog contracted by 7.3% vs. December 2013 (-7.7% LfL). The
performance was affected by the high level of execution, but does not
include the award of new contracts that will be included in the next few
months, worth approximately EUR1,100mn. In addition to those noted
above at Budimex, these contracts include the extension of the I-77 toll
road in North Carolina (USA) and the construction of a section or urban
toll road for the new access to Riyadh (Saudi Arabia).
The international backlog stood at EUR5,216mn, well above the level of
the domestic backlog (EUR2,081mn), and representing 71% of the total.
Jun-14 Dec-13 Var.
Civil work 5,755 6,164 -6.6%
Residential work 174 182 -4.0%
Non-residential work
703 768 -8.5%
Industrial 664 753 -11.8%
Total 7,297 7,867 -7.3%
Results January-June 201
9
AIRPORTS The equity-accounted contribution from HAH to Ferrovial amounted to
EUR20mn vs. the EUR140mn in 2013, which included the capital gain of
EUR138mn generated by the sale of Stansted Airport.
HAH traffic performance
In the first half of 2014, the number of passengers passing through HAH
airports reached 41.1 million, up 2.5% vs. 2013. This traffic growth was
thanks to an acceleration of the trends observed earlier, with higher load-
factors and larger aircraft in service.
At Heathrow, traffic growth reached 1.9% overall, and 8.3% for domestic
flights due to the impact of the new Virgin Atlantic routes. Long-haul
traffic increased 2.5%, with 2.2% growth in North American traffic and
4.4% on the Middle East routes. Load-factors reached 74.5% in the first
half vs. 74.4% in 2013 and the average number of seats per flight
reached 203.5 (vs. 201.4 in 2013), with 1,700 more flights than in the
same period last year.
For the third year running, Heathrow Terminal 5 was voted the best
airport terminal in the world by “Skytrax World Airports Awards”.
The new Terminal 2 at Heathrow (The Queen’s Terminal) was opened to
traffic on 4 June. By the end of October all the Star Alliance airlines will
operate from this terminal.
Traffic at the non-regulated airports increased 5.7%.
Traffic growth by destination
Jun-14 Jun-13 Var.
UK 6 6 5.9%
Europe 17 16 1.2%
Long Haul 19 18 2.6%
Total 41 40 2.5%
User satisfaction levels reached record levels in the first half of the year,
with 79% of passengers rating their experience as very good or excellent,
reflecting the improvements in punctuality, security and immigration.
GBP Traffic (million passengers) Revenues EBITDA EBITDA Margin
Jun-14 Jun-13 Var. Jun-14 Jun-13 Var. Jun-14 Jun-13 Var. Jun-14 Jun-13 Var.
(bps)
Heathrow 35.1 34.4 1.9% 1,223 1,137 7.5% 701 606 15.6% 57.3% 53.3% 402
Heathrow express
36 34 5.1% 3 3 5.3% 9.2% 9.2% 1
Adjustments
-25 -22 n.s.
n.s. n.s.
Heathrow SP 35.1 34.4 1.9% 1,234 1,149 7.4% 704 610 15.6% 57.1% 53.0% 404
Glasgow 3.5 3.3 4.4% 44 42 4.6% 14 12 13.8% 32.0% 29.4% 256
Aberdeen 1.8 1.6 8.2% 31 28 11.4% 11 10 9.2% 36.3% 37.0% -75
Southampton 0.8 0.8 5.7% 13 12 2.6% 3 3 -3.9% 22.4% 23.9% -153
Non Designated 6.1 5.8 5.7% 87 82 6.7% 28 26 9.9% 32.1% 31.2% 94
Adjustments
-3 -1 n.s. -23 -2 n.s. n.s. n.s. HAH total 41.1 40.2 2.5% 1,319 1,230 7.2% 710 633 12.1% 53.8% 51.5% 235
Results January-June 201
10
Profit & Loss account
GBP Jun-14 Jun-13 Var. Like-for-Like
(%)
Revenues 1,319 1,230 7.2% 7.2%
EBITDA 710 633 12.1% 12.1%
EBITDA margin % 53.8% 51.5%
Depreciation 281 263 7.1% 7.1%
EBIT 428 370 15.7% 15.7%
EBIT margin % 32.5% 30.1%
Impairments & disposals 0 0 n.s. n.a.
Financial results -341 -490 30.4% -0.6%
EBT 87 -120 172.9% n.s.
Corporate income tax -23 126 -118.2% -164.3%
Result from discontinued
operations 1 350 -99.6% n.a.
Net income 64 356 -81.5% n.s.
Contribution to Ferrovial
equity accounted result (€)
20 140 -85.7% n.s.
HAH posted revenue and EBITDA growth of 7.2% and 12.1% respectively
as a reflection of a 10.5% increase in aeronautical revenues, driven by
the tariff increase (+10.4% at Heathrow in April 2013) and the growth in
passenger traffic (+2.5%); retail revenues rose by 3.7% and Other
revenues by 1.0%.
Revenue breakdown
GBP jun-14 jun-13 Var. Like-for-
Like (%)
Aeronautic 814 736 10.5% 10.5%
Retail 262 252 3.7% 3.7%
Others 243 241 1.0% 1.0%
TOTAL 1,319 1,230 7.2% 7.2%
Aeronaut Retail Other
GBP Jun-14 LfL (%) Jun-14 LfL (%) Jun-14 LfL (%)
Heathrow 767 10.8% 237 3.6% 230 0.9%
Glasgow 22 4.1% 14 4.9% 8 5.6%
Aberdeen 17 13.8% 6 7.0% 8 10.0%
Southampton 7 -1.6% 4 12.4% 1 1.4%
Adj & others
-3 n.s.
Total airports
814 10.5% 262 3.7% 243 1.0%
Aeronautical revenues increased by 10.8% at Heathrow, thanks to the
combination of the higher passenger traffic and the tariff increase in April
2013 (+10.4%). Average aeronautical revenues per passenger grew by
8.5% to GBP21.87 (vs. GBP20.15 in 2013).
At Heathrow, retail revenue growth reached 3.6%. Net retail revenues
per passenger increased by 2.2% to GBP6.42, probably affected by the
higher proportion of European traffic, which has traditionally had less
propensity to spend money in Heathrow’s retail outlets, and the strength
of sterling against other currencies in recent months, plus the faster
growth of domestic traffic.
Regulatory aspects
Regulatory asset base (RAB)
RAB stood at GBP14,871mn in June (vs. GBP14,585mn in December
2013), reflecting the investment made (GBP470mn), the increase in
inflation (GBP170mn), partially offset by depreciation during the quarter
(GBP325mn).
New regulatory period
The new regulatory period (Q6) started on 1 April 2014 and lasts until 31
December 2018. The CAA approved a maximum annual tariff increase 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 a year vs. the current level of 80 million. The
investment is estimated to amount to GBP16bn over a period of 15 years.
The Commission is expected to publish its conclusions at the end of the
summer in 2015.
Net debt
GBP jun-14 dic-13 Var.
Senior loan facility 497 496 0.1%
Subordinated 755 754 0.1%
Securitized Group 11,568 11,119 4.0%
Non-Securitized Group 330 325 1.6%
Other & adjustments -22 -12 n.s.
Total 13,129 12,683 3.5%
At 30 June 2014, Heathrow’s average cost of external debt stood at
5.75%, taking into account all the costs of hedging for interest rates,
foreign exchange and inflation.
Dividends
In the first half of 2014, HAH distributed GBP135mn in dividends vs.
GBP128mn in the same period last year. The total dividend payable in
2014 is estimated at GBP270mn. In 2013, HAH paid its shareholders
GBP255mn, and GBP240mn in 2012.
Results January-June 201
11
CONSOLIDATED PROFIT & LOSS ACCOUNT
Before Fair
value Adjustments
Fair value
Adjustments Jun-14
Before Fair
value Adjustments
Fair value
Adjustments Jun-13
Revenues 4,159
4,159 3,732
3,732
Other income 3
3 5
5
Total income 4,163
4,163 3,737
3,737
COGS 3,728
3,728 3,322
3,322
EBITDA 435
435 415 415
EBITDA margin 10.5%
10.5% 11.1%
11.1%
Period depreciation 120
120 113
113
EBIT (ex disposals & impairments) 315
315 302 302
EBIT margin 7.6%
7.6% 8.1%
8.1%
Disposals & impairments 0
0 21 21
EBIT 315
315 323 323
EBIT margin 7.6%
7.6% 8.7%
8.7%
FINANCIAL RESULTS -206 39 -167 -219 33 -186
Financial result from financings of infrastructures projects -172
-172 -169
-169
Derivatives, other fair value adjustments & other financial result from infrastructure projects -5 -2 -7 -3 9 6
Financial result from ex infra projects -17
-17 -30
-30
Derivatives, other fair value adjustments & other ex infra
projects -13 41 29 -18 24 7
Equity-accounted affiliates 49 0 49 212 -32 180
EBT 158 40 197 316 2 318
Corporate income tax -40 -12 -52 -41 -9 -51
Net Income from continued operations 118 28 146 274 -8 267
Net income from discontinued operations
CONSOLIDATED NET INCOME 118 28 146 274 -8 267
Minorities 23
23 21 0 20
NET INCOME ATTRIBUTED 141 28 168 295 -8 287
Results January-June 201
12
REVENUES
Jun-14 Jun-13 Var. Like-for-Like (%)
Construction 1,804 1,859 -3.0% 0.7%
Airports 3 4 -21.3% -21.3%
Toll Roads 200 206 -3.0% -2.3%
Services 2,125 1,655 28.4% 25.7%
Others 28 8 258.4% 245.3%
Total 4,159 3,732 11.5% 12.5%
EBITDA
Jun-14 Jun-13 Var. Like-for-
Like (%)
Construction 153 154 -0.9% -0.1%
Airports -7 -6 -9.7% -14.7%
Toll Roads 123 125 -1.8% 3.0%
Services 158 138 14.7% 11.6%
Others 8 4 108.1% -38.5%
Total 435 415 4.8% 3.5%
DEPRECIATION
Depreciation was higher than in the same period last year (+6.4% LfL) at
EUR120mn.
EBIT (before impairments and disposals of fixed assets)
Jun-14 Jun-13 Var. Like-for-Like (%)
Construction 137 140 -2.3% -2.0%
Airports -7 -6 -10.2% -15.1%
Toll Roads 86 91 -5.6% 0.4%
Services 94 76 24.9% 18.5%
Others 5 2 138.8% -53.3%
Total 315 302 4.3% 2.2%
For comparative purposes, all comments refer to EBIT before impairments and
disposals of fixed assets.
IMPAIRMENTS AND DISPOSALS OF FIXED ASSETS
In 2013, this heading included the EUR20mn capital gain on the sale of
Amey’s joint ventures.
FINANCIAL RESULT
Jun-14 Jun-13 Var.
Infrastructure projects -172 -169 -1.9%
Ex infra projects -17 -30 45.0%
Net financial result (financing) -189 -199 5.2%
Infrastructure projects -7 6 -210.2%
Ex infra projects 29 7 n.s.
Derivatives, other fair value adjustments & other financial result
22 13 70.2%
Financial Result -167 -186 10.4%
The financial result improved by 10.4%, due to the combined effect of:
Lower financing costs excluding infrastructure projects, principally due to
the inclusion in 2013 of EUR16mn for accelerated depreciation of the
origination fees on the bank loans cancelled with the proceeds of the
bond issuance.
The movements in the financial result for the derivatives and other was
mainly determined by the performance of the derivatives linked to the
share price, which rose from EUR14.07/share in December 2013 to
EUR16.27/share at the end of June.
EQUITY-ACCOUNTED RESULTS
Jun-14 Jun-13 Var.
Construction -2 -1 -151.0%
Services 12 6 107.1%
Toll Roads 18 35 -47.1%
Airports 20 140 -85.7%
Total 49 180 -72.8%
The companies consolidated by the equity method contributed EUR49mn
net of tax (vs. EUR180mn in 2013). The 2013 result included a number of
non-recurrent items at HAH, principally the capital gain on the sale of
Stansted Airport (EUR138mn).
TAXATION
The effective tax rate was 26%. Excluding the equity-accounted results,
which are added net of tax, the rate would have been 35%.
NET RESULT
The group posted a net profit of EUR168mn (vs. EUR287mn in 2013).
The lower figure was due to the inclusion in the 2013 results of non-
recurrent items such as the sale of Stansted airport and the capital gain
on the disposal of Amey’s joint ventures.
Results January-June 201
13
BALANCE SHEET AND OTHER MAGNITUDES
Jun-14 Dec-13
FIXED AND OTHER NON-CURRENT ASSETS 17,821 17,202
Consolidation goodwill 1,929 1,893
Intangible assets 206 229
Investments in infrastructure projects 8,154 7,639
Property 38 37
Plant and Equipment 456 483
Equity-consolidated companies 3,517 3,562
Non-current financial assets 1,876 1,870
Receivables from Infrastructure assets 1,399 1,341
Financial assets classified as held for sale 1 1
Restricted Cash and other non-current assets 351 377
Other receivables 126 152
Deferred taxes 1,441 1,344
Derivative financial instruments at fair value 203 144
CURRENT ASSETS 5,893 5,618
Assets classified as held for sale 2 2
Inventories 325 325
Trade & other receivables 2,397 2,202
Trade receivable for sales and services 1,768 1,635
Other receivables 527 470
Taxes assets on current profits 103 98
Cash and other financial investments 3,162 3,070
Infrastructure project companies 455 279
Restricted Cash 62 41
Other cash and equivalents 393 238
Other companies 2,707 2,791
Derivative financial instruments at fair value 7 18
TOTAL ASSETS 23,714 22,820
EQUITY 5,940 6,074
Capital & reserves attributable to the Company´s equity holders 5,631 5,719
Minority interest 309 355
DEFERRED INCOME 742 503
NON-CURRENT LIABILITIES 11,736 11,230
Pension provisions 121 107
Other non current provisions 1,355 1,350
Financial borrowings 7,744 7,496
Financial borrowings on infrastructure projects 6,648 6,403
Financial borrowings other companies 1,097 1,093
Other borrowings 215 208
Deferred taxes 1,176 1,117
Derivative financial instruments at fair value 1,125 952
CURRENT LIABILITIES 5,296 5,013
Financial borrowings 1,331 1,303
Financial borrowings on infrastructure projects 1,267 1,228
Financial borrowings other companies 64 75
Derivative financial instruments at fair value 82 67
Trade and other payables 3,479 3,254
Trades and payables 2,698 2,665
Deferred tax liabilities 98 60
Other liabilities 683 528
Trade provisions 404 389
TOTAL LIABILITIES & EQUITY 23,714 22,820
Results January-June 201
14
Net debt
The net cash position excluding infrastructure projects stood at
EUR1,599mn (vs. EUR1,675mn in December 2013). The net cash position
was more favourable in the first half of 2014 than in the same period last
year, when it declined by EUR1,046mn, reflecting a better working capital
performance, lower investment and a different dividend payment
calendar.
In the first half of the year, Ferrovial made net investments (excluding
infrastructure projects) amounting to EUR61mn.
In January 2014, Ferrovial paid over the withholding tax applied to the
dividend paid in December 2013, amounting to EUR36mn vs. the
EUR85mn paid in the previous financial year.
Cash generation was less seasonal in the first half of the year, principally
in the international Construction business and the Services activity in
Spain.
Net project debt stood at EUR7,162mn, slightly higher than in December
2013, reflecting the impact of exchange-rate movements and the
investment made in the construction of the various projects under
development. This net debt includes EUR1,661mn of net debt related to
toll roads under construction (the NTE, LBJ and NTE 3A3B). It also
includes EUR1,163mn of debt related to the two toll roads (R4 and OLR)
that are in insolvency proceedings.
The Group’s consolidated net debt stood at EUR5,563mn.
jun-14 dic-13
NCP ex-infrastructures projects 1,599 1,675
Toll roads -6,835 -6,710
Others -327 -317
NCP infrastructures projects -7,162 -7,027
Net Cash Position -5,563 -5,352
Credit rating
In August 2011, the credit rating agencies Standard & Poor’s and Fitch
Ratings published their opinions on Ferrovial’s credit for the first time; in
both cases the rating was investment grade.
Standard & Poor’s upgraded Ferrovial’s rating from BBB- to BBB on May
2013.
Fitch Ratings upgraded Ferrovial’s credit rating from BBB- to BBB in July
2014.
Rating Agency Rating Outlook
S&P BBB Estable
FITCH BBB Estable
2013 dividend
At a meeting held on 28 October 2013, the Board agreed to distribute a
gross dividend of EUR0.40/share on account for 2013. Payment of this
dividend was made on 10 December 2013.
Ferrovial Flexible Dividend
At Ferrovial’s AGM held on 26 June, the shareholders approved a capital
increase fully charged to reserves.
The capital increase was approved by the AGM as a way of introducing a
new flexible system of shareholder remuneration, the Ferrovial Flexible
Dividend, in place of what would have been the traditional payment of a
supplementary dividend for 2013.
The purpose of this scheme is to offer all Ferrovial’s shareholders the
option – at their choice – of receiving new shares in the company,
without this affecting the company’s policy of distributing cash to its
shareholders, as they have the alternative of receiving cash by selling the
free warrants that they receive for the shares that they already own to
the company (or in the market).
The fixed price for the purchase of warrants guaranteed by Ferrovial was
EUR0.291 per warrant. The number of free warrants needed for one new
share was 55.
At the close of the trading period for the warrants, the number of new
shares issued was 5,911,393, taking the issued share capital to
739,421,648 shares, each with a nominal value of EUR0.20.
Results January-June 201
15
Corporate bond issuance
In July, Ferrovial issued a EUR300mn 10-year bond that was closed at
113 basis points over mid-swap, with a coupon of 2.5%.
With this bond and the issuance in 2013, Ferrovial has 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 with a coupon of 3.375%, this
time at eight years, which closed at a price of 200bp over mid-swap.
Year Corporate debt maturing
2014 44
2015 42
2016 19
2017 11
2018 501
2019 5
2020
2021 - 2030 503
2031 - 2040 7
2041 - 2050 0
Results January-June 201
16
CONSOLIDATED CASH FLOW
jun-14
Ex-infrastructure
projects
Infrastructure projects
Adjustments Total
EBITDA 251 184 435
Dividends received 165 -6 159
Working capital -339 40 -298
Operating flow (before taxes) 77 225 -6 296
Tax payment -5 -3 -7
Operating cash flow 72 222 -6 289
Investment -82 -169 42 -208
Divestment 21 -13 8
Investment cash flow -61 -169 29 -201
Activity cash flow 12 53 23 88
Interest flow -30 -123 -152
Capital flow from Minorities 0 56 -29 27
Dividend payment -65 -9 6 -69
Forex impact 12 -28 -17
Deconsolidated Debt of assets classified as held for sale/ Perimeter changes/ Equity acc.
Other (non-cash) -5 -84 -89
Financing Cash Flow -88 -188 -23 -299
Net debt variation -76 -135 -211
Net debt initial position 1,675 -7,027
-5,352
Net debt final position 1,599 -7,162
-5,563
jun-13
Ex-
infrastructure projects
Infrastructure
projects Adjustments Total
EBITDA 242 173 415
Dividends received 139 -4 135
Working capital -522 -25 0 -547
Operating flow (before taxes) -140 147 -4 3
Tax payment -14 -7 -21
Operating cash flow -154 140 -4 -18
Investment -603 -309 55 -856
Divestment 46 46
Investment cash flow -557 -309 55 -811
Activity cash flow -711 -168 51 -828
Interest flow -13 -130 -143
Capital flow from Minorities 0 96 -55 41
Dividend payment -273 -4 4 -273
Forex impact -31 -44 -75
Deconsolidated Debt of assets classified as held for sale/ Perimeter changes/ Equity acc.
17 -17
Other (non-cash) -34 -41 0 -75
Financing Cash Flow -334 -140 -52 -526
Net debt variation -1,046 -309 0
-1,354
Net debt initial position 1,484 -6,595 0
-5,111
Net debt final position 438 -6,903 0
-6,465
Results January-June 201
17
Cash flow excluding infrastructure projects
OPERATING FLOW
The breakdown of cash flow from operations by division excluding
infrastructure projects is shown in the table below (June 2014 vs. June
2013):
Operating cash flow jun-14 jun-13
Construction -41 -191
Services 11 -30
Dividends from Toll roads 114 77
Dividends from Airports 41 50
Other -49 -47
Operating flow (before taxes) 77 -140
Tax payment -5 -14
Total 72 -154
The Other element includes the operating flows relating to the
Corporation and the parent companies of the Airports and Toll Roads
divisions.
The significant EUR217mn improvement in the operating flow before
taxes in 2014 vs. 2013 was due to the better working capital
performance: the deterioration was reduced from EUR522mn in 2013 to
EUR339mn in June 2014. The improvement in Construction was
particularly marked, as was the increase in dividends received from the
toll road projects.
In the first half, the figures include payments received under the supplier
payment plan totalling EUR49mn at the Construction division and
EUR26mn at the Services division.
The table below shows the detail of the flows at the Construction and
Services divisions:
Construction jun-14 jun-13
EBITDA 147 148
Settlement of provisions from completed
works -48 -84
Adjusted EBITDA 99 64
Changes in factoring -41 9
Ex Budimex Working Capital 25 -140
Budimex Working Capital -123 -123
Operating Cash Flow before Taxes -41 -191
Services jun-14 jun-13
EBITDA 126 114
Dividends received 10 12
Changes in factoring 0 0
Pensions payments UK -10 -9
Ex UK Working Capital -24 -66
UK Working Capital -90 -81
Op. cash flow ex-Taxes 11 -30
The breakdown by business area in the Services division is shown in the
following table:
Spain UK Rest of
Services Services
EBITDA 61 63 2 126
Dividends 3 7 0 10
Pension scheme payments 0 -10 0 -10
Working capital -13 -90 -12 -115
Op. cash flow ex-Taxes 52 -31 -9 11
At the Toll Roads division, the operating flow in 2014 includes EUR114mn
from dividends and capital repayments from the companies holding the
toll road infrastructure projects, as shown in the table below:
Dividends and Capital reimbursements
jun-14 jun-13
ETR 407 110 74
Irish toll roads 3 3
Portuguese toll roads 0 0
Greek toll roads 0 1
Spanish toll roads 1 1
Other 0 0
Total 114 77
INVESTMENT FLOW
The following table shows the breakdown by business segment of the
investment flow excluding infrastructure projects, in each case
distinguishing between outflows for investments and inflows from
disposals.
jun-14 Investment Divestment Investment
Cash Flow
Construction -10 2 -8
Services -26 15 -11
Toll roads -45 0 -45
Airports 0 -2 -2
Others -1 6 5
Total -82 21 -61
jun-13 Investment Divestment Investment
Cash Flow
Construction -21 1 -20
Services -525 49 -476
Toll roads -56 0 -56
Airports 0 -4 -4
Others -2 0 -2
Total -603 46 -557
The lower level of investment in 2014 vs. 2013 reflects the acquisition of
the UK company Enterprise in the first half of 2013 for EUR474mn, and
the Chilean company Steel Ingeniería for EUR29mn.
In 2014 the highlights include the capital investments made in the
infrastructure projects (US toll roads under construction); and also the
investment in material fixed assets, principally at the Services division.
Results January-June 201
18
The disposals in 2014 were mainly small sales of machinery at the
Construction division and sales of land.
In 2013, it was the Services division that stood out, due to the sale of
40% of Amey’s JVs for EUR44mn and Ecocat for EUR5mn.
Equity investment in toll roads jun-14 jun-13
LBJ -10 -34
NTE -16 -20
NTE 3A&B -8 -1
SH-130 -2 0
Spanish toll roads -5 -1
Portuguese toll roads -4 0
Greek toll roads 0 0
Others 0 0
Total -45 -55
FINANCING FLOW
Included in the financing flow are the dividend flows, which in the first six
months of 2014 corresponded to the dividend payment to the Budimex
minorities (EUR30mn) and the payment in January 2014 of the
withholding tax applied to the dividend paid in December 2013,
amounting to EUR36mn vs. the EUR85mn paid to June last year.
Note also the net interest payment of EUR30mn due to the payment of
the annual coupons on the bond issuance in January and June. This
figure is higher than the figure recognised in the P&L, because the latter
only reflects the accrual for the first six months of the year.
Cash flow at infrastructure projects
OPERATING FLOW
As regards the operating flow from the infrastructure concession
companies, this basically includes the entry of funds at the companies
that are in operation, although it also includes the VAT payments and
refunds at those in the construction stage. The table below shows a
breakdown of the operating flows for the infrastructure projects:
jun-14 jun-13
Toll roads 159 114
Other 63 26
Operating flow 222 140
INVESTMENT FLOW
Note the investment in assets under construction at the Toll Roads
division in 2014, particularly in the USA (NTE and LBJ).
Investment cash flow jun-14 jun-13
LBJ -169 -201
North Tarrant Express -162 -160
North Tarrant Express 3A3B -33 0
SH-130 -1 -4
Portuguese toll roads -1 -2
Spanish toll roads -1 0
Chicago 0 -1
Other 0 0
Total toll roads -369 -368
Other -41 -7
Projects total -410 -375
Equity Subsidy 241 66
Total investment cash flow (projects) -169 -309
FINANCING FLOW
The financing flow reflects the dividend payments and capital repayments
made by the concession companies, as well as the capital increases
received by these companies. In the case of the concession companies
the Group consolidates by global integration, these amounts correspond
to 100% of the amounts disbursed and received by the concession
companies, independent of the size of the Group’s stake. It does not
include any dividends or capital repayments relating to the companies
that are consolidated by the equity method.
The interest flow corresponds to the interest paid by the concession
companies, as well as other commissions and costs that are closely
related to obtaining financing. The flow for these items corresponds to
the interest expense relating to the period, as well as any other item that
implies a direct variation in net debt during the period. The amount does
not coincide with the financing result in the P&L, fundamentally due to
differences between accrual and payment of interest.
Interest Cash Flow jun-14 jun-13
Spanish toll roads -32 -31
US toll roads -56 -64
Portuguese toll roads -13 -14
Other toll roads -8 -7
Total toll roads -109 -116
Other -14 -14
Total -123 -130
Additionally, the financing flow includes the impact of exchange-rate
movements on foreign currency denominated debt (-EUR28mn in the
year to June 2014), fundamentally due to the appreciation of the US
dollar vs. the euro, which has had a significant impact on the net debt of
the US toll roads.
Finally, under the heading Other non-cash movements in debt, are
included those items that result in a variation in accounting debt, but
imply no real cash movement, such as the case of unpaid interest
accrued, etc.
Results January-June 201
19
APPENDIX I: SIGNIFICANT EVENTS
Ferrovial announces the proposals adopted by the 2014 AGM.
(26 June, 2014)
Events after the close
Fitch Ratings upgraded its long-term rating for Ferrovial, S.A.
from BBB - to BBB with stable Outlook.
(7 July, 2014)
Ferrovial successfully places a EUR300mn bond issue,
maturing on 15 July 2024.
(8 July, 2014)
Ferrovial Emisiones, S.A., a Ferrovial subsidiary, successfully
completed the pricing of a EUR300mn bond issue maturing on 15 July
2024, guaranteed by Ferrovial, at 99.459% of nominal. The bonds pay
an annual coupon of 2.5%. Ferrovial expects net proceeds of
approximately EUR297,177mn, which it expects to apply to general
corporate needs.
Ferrovial announces the subscription and disbursement of the
EUR300mn bond issue, maturing on 15 July 2024.
(15 July, 2014)
Continuing with the information published on 8 July 2014, Ferrovial
announces that as of 15 July 2014 the subscription and disbursement
of the bonds by investors has taken place. The company has
requested that the bonds be admitted into negotiation at the AIAF
fixed income markets (AIAF). The bonds are expected to be admitted
into negotiation prior to 15 August 2014, once the CNMV approves
and registers the prospectus that has been written in accordance with
international standards for new issues.
Ferrovial announces the end of the negotiation period for the
warrants issued corresponding to the capital increase which
instruments the shareholder remuneration program
“Ferrovial Flexible Dividend”.
(17 July, 2014)
At the end of the negotiating period, the owners of 44.32% of the
warrants (325,126,615 warrants) have chosen to receive new
Ferrovial shares as remuneration. The final number of ordinary shares
with a unitary nominal value of EUR0.2 issued in the capital increase
is 5,911,393. The owners of 55.68% of the warrants have sold them
to Ferrovial which has acquired a total of 408,383,606 warrants
(118,839,629.35 Euros). The capital increase was closed on 17 July
2014.
APPENDIX II: PRINCIPAL CONTRACT AWARDS
CONSTRUCTION
SPAIN
Olivar highway, Puente del Obispo junction, Jaén.
75 residential units in Tres Cantos, Madrid.
169 residential units in Balcón de San Lázaro, Zaragoza.
Installation of tracks for the AVE high-speed train, Valladolid-Palencia.
Platform improvements on Line 12 of the Madrid Metro.
Urban and infrastructure integration works for the Granada Metro.
West dock platform in the port of Palma de Mallorca.
Secondary school in Santa Eularia des Riu, Ibiza.
Railway infrastructure Legutiano-Escoriatza in the Basque country.
Multipurpose building in Fuerteventura.
Psycho-geriatric centre in Pamplona.
Industrial premises for Renault España, Palencia.
BUDIMEX
Completion of the S5 Poznan-Wroclaw highway.
Railway station in Bydgoszcz.
Palacio de Congresos en Lublin.
National Road N 21, Slupsk.
Expansion of Szczecin-Goleniów Airport.
Tram station in Olsztyn.
Industrial distribution centre for JMP SA.
Tram remodelling, Gdansk.
Completion of the A1 highway in Lodz.
Road-widening works on the N747 Ilza-Konopnica.
Logistics area for the Michelin Olsztyn factory.
INTERNATIONAL
Design and construction of the Warrell Creek-Nambucca toll road,
Australia.
Los Condores hydroelectric project, Chile.
FM 423 highway in Denton, Texas, USA.
Traffic improvement works in Sancrox, Australia.
Improvements to the PR18/PR21 intersection, Puerto Rico.
New link road in Florianopolis, Brazil.
Stafford-Sugarland toll road, USA.
SERVICES
SPAIN
Street cleaning, selective urban waste collection in Barcelona.
Street cleaning and urban waste collection in the municipality of
Almendralejo, Badajoz.
New maintenance contract for OAMI offices and headquarters (Office
for the Harmonisation of the Internal Market), in Alicante.
Parks and gardens maintenance in the metropolitan area of Barcelona.
Cleaning, logistics, maintenance and auxiliary production services for
the saloon car production line at the Michelin plant in Vitoria.
Extension of the service contract for street cleaning and waste
collection in Sitges, Barcelona.
Extension of the street cleaning and urban waste collection
contraction for Pontevedra.
Results January-June 201
20
UK
Renewal of the switches and crossings on the railway infrastructure in
Scotland, North Wales, East Midlands, London North East and London
North West (Amey Sersa).
Maintenance management of service quarters in the UK.
New maintenance contract for the toll roads in South East Scotland
(STRU SE).
New contract for maintenance of military infrastructure in Scotland
and Northern Ireland.
INTERNATIONAL
New contract for integrated services and leasing of permanent support
teams for the Ministro Hales mine, Chile.
Extension of maintenance services for Doha airport (Qatar).
New integrated services contract for earth moving and mine waste
dumping in the municipality of Talabre, Chile.
New conservation contract for the S7 toll road in Poland.
Industrial cleaning oriented towards the removal of extraction
/processing waste from the Gabriela Mistral mine, Chile.
Renewal of the office cleaning contract for Vodafone, Portugal.
APPENDIX III: EXCHANGE-RATE MOVEMENTS
Exchange-rate Last
(Balance sheet) Change%
14/13 Exchange-rate Mean
(P&L) Change%
14/13
GBP 0.8005 -3.82%
0.8179 -4.14%
US Dollar 1.3690 -0.72%
1.3714 4.66%
Canadian Dollar 1.4603 -0.36%
1.5009 11.95%
Polish Zloty 4.1577 0.05%
4.1789 -0.86%
Exchange rate expressed in units of currency per euro, with negative variations implying 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).