Ferrovial - Annual Report 2011

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Company profile

Ready for the future

Ferrovial reinforced its financial discipline, generated value via its asset rotation strategy and recorded strong cash flow across its businesses and through divestments, while the order backlog remained at an all-time high. Ferrovial is committed to innovation, the environment and engaging with society, which represent key aspects of its leadership in infrastructures and services.

In 2011 the main macroeconomic trends seen in the previous year continued. The turmoil seen in international financial markets, triggered by a debt crisis in peripheral countries among other factors, led to credit restrictions, cost containment in the public sector and declining consumption in major developed economies.

Despite these challenges facing companies, Ferrovial has been consistently profitable, demonstrating its solid financial position and discipline throughout the year. It is thanks to this policy, and the value generated by mature asset rotation and strong cash flows, that the company has sufficient liquidity and therefore flexibility to make the investments it needs in order to target growth as it goes forward.

Ferrovial successfully implemented a strategy based on generating asset value and asset rotation. It completed the sale of 5.88% of FGP Topco, generating capital gains of 847 million euro. The sale price offers a value of 100% of BAA for 5.527 billion euro. It also completed the sale of Swissport and its stake in the M-45 highway. These divestments, along with that of BAA, outstripped market estimates, reaching a figure of 1.264 billion euro.

Despite the changes in the company's consolidation scope, international markets continue to represent a large proportion of Ferrovial's activities. In addition to the strong growth recorded by Budimex and Amey, there are also significant projects in Morocco, Chile and Colombia, along with the Webber highway construction projects in the United States and the company's participation in one of Europe's largest projects, Crossrail. International markets currently account for 55% of sales and 48% of EBITDA.

The order backlog remains at the all-time high reached last year at 22.422 billion euro. The order backlog in the Services division set a new record at 12.425 billion euro. In Construction it stood at close to 10 billion. The international contribution to the order backlog accounts for 51% and 68%, respectively.

Cash flow ex. projects continues to perform well, standing at 1.447 billion euro, combining favorable business performance with divestments, reaching a net cash position of 907 million euro. Net consolidated debt, including infrastructure projects, was down to 5.171 billion, due primarily to the deconsolidation of BAA, as well as early repayment of part of the corporate debt.

Midway through the year the credit rating agencies Standard & Poor´s and Fitch issued their first credit ratings for Ferrovial, both coming in the "investment grade" category.

The profitability of Ferrovial Servicios showed a positive trend in 2011 as a result of new contracts in Spain and the United Kingdom, as well as cost control. Highlights in the domestic market were the contracts awarded to Cespa and Ferroser, as well as the provision of emergency ambulance services in Madrid, the renewal of the waste collection and treatment contract in Murcia and management of various AENA control towers.

Cintra's results reflected the developments in traffic, toll hikes and the inclusion of compensation accounts for the R4 and Ocaña-La Roda radial highways. The 407 ETR highway, following the sale of the 10% stake in 2010, contributed 27 million euro to earnings based on the equity method. Furthermore, Ausol refinanced its debt with a banking syndicate.

In Construction the year saw positive performance from the international business, particularly for Budimex, which offset declining activity in Spain. Last year several milestones were reached in the construction of the new T2A terminal at Heathrow, as well as the Crossrail concessions.

The Airports division benefited from positive traffic performance at Heathrow, standing at 69.4 million travelers. Furthermore, passenger figures remained at record levels since the summer, reaching annual all-time highs. In this period there was a significant increase in long-haul traffic to North America and Brazil, as well as to Europe, led by Germany, Switzerland and France. Performance in Scottish airports was also strong.

As a leader in infrastructures and services, Ferrovial is at the cutting edge of new solutions that seek to improve the quality of life of users and ensure economic, social and environmental sustainability. Following the signing of an ambitious agreement with the Massachusetts Institute of Technology (MIT) last year, several working groups were set up in 2011 by Ferrovial researchers and line personnel, launching various projects aimed at providing society with advanced infrastructure and service solutions.

For the tenth year in a row, Ferrovial was selected by the DJSI as one of the elite global companies in the sector for its sustainability practices. It also received the backing of FTSE4Good, another index that lists committed companies.

Results 2011: Ernesto López Mozo

Results 2011: Ernesto López Mozo

The Chief Financial Officer notes that 2011 was "a very good year in a very complex environment", in which the key financial data has improved.

© Copyright 2012. Ferrovial

  • Dow Jones Sustainabiliy Indexes
  • LBG Spain
  • The Global Compact
  • FTSE4Good
  • Carbon disclosure project

This is an electronic version of the 2011 Annual Report prepared by Ferrovial S.A. for its stakeholders, which aims to be complete and accurate. The contents of this version can be checked by referring to the print version. A copy of the print version in PDF format is available to download on this web page