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Ferrovial
FY 2016 Results
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Disclaimer
This document may contain statements that constitute forward looking statements about the Company. These statements are based on
financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations, which
refer to estimates regarding, among others, future growth in the different business lines and the global business, market share, financial
results and other aspects of the activity and situation relating to the Company.
Such forward looking statements, by its nature, are not guarantees of future performance and involve risks and uncertainties, and other
important factors that could cause actual developments or results to differ from those expressed in these forward looking statements.
Analysts and investors, and any other person or entity that may need to take decisions, or prepare or release opinions about the securities
issued by the Company, are cautioned not to place undue reliance on those forward looking statements which speak only as of the date of
this communication. They are all encouraged to consult the Company’s communications and periodic filings made with the relevant
securities markets regulators and, in particular, with the Spanish Securities Markets Regulator.
2
E-mail: [email protected] – Tel: +34 91 586 27 30
Agenda
• 2016 Highlights
• Business Units
• Financial Results
• Looking Ahead
3
E-mail: [email protected] – Tel: +34 91 586 27 30
2016 Highlights
Solid cash generation
 €995mn Operating Cash Flow (pre-tax)
• 40% from infra projects dividends
Shareholder remuneration
 €544mn (€532mn in 2015)
Strong operating growth
 Traffic growth across the board
 New awards in core markets (I-66)
 Total order book increase (+6.3%)
Solid financial position
 €697mn net cash position
 €356mn ordinary CAPEX
 €1bn M&A investment
Corporate transactions
 Broadspectrum acquisition
 Transchile acquisition
 Mature toll road asset rotation
Ex-infra projects
• Chicago Skyway (US)
• M3 & M4 stakes (Ireland)
• Portuguese toll roads stakes (to be completed)
Environment
4
 UK & US
E-mail: [email protected] – Tel: +34 91 586 27 30
2016 results & order book
€ million
2016
% var. vs 2015
10,759
+11%

EBITDA
944
-8%

Operating cash flow (pre-tax)
995
+12%

Construction order book
9,088
+4%

Services order book
24,431
+7%

Revenues
Ex-infra projects
5
E-mail: [email protected] – Tel: +34 91 586 27 30
Agenda
• 2016 Highlights
• Business Units
• Financial Results
• Looking Ahead
6
E-mail: [email protected] – Tel: +34 91 586 27 30
Toll roads
TRAFFIC EVOLUTION
Canada
407ETR
€ million
+4.9%
 Strong dividends
• €290mn dividends from projects
ETR €244mn, other assets €46mn
Ireland
M4
• €113mn invested in equity of new projects
+6.5%
 Traffic growth in main markets
Spain
Ausol I +11.2%
DIVIDENDS FROM PROJECTS (€ mn)
290
 New projects awarded: I-66 (Virginia, US)
• USD3bn managed lane project
• 35km along the I-66 corridor
• 50 years concession
267
255
2014
2015
2016
FY 2016 RESULTS TOLL ROADS
Revenues
EBITDA
7
Portugal
Azores
+7.2%
 Openings:
• 407ext I: June 2016 (toll-free until February 1, 2017)
 Mature asset rotation to crystalize value:
• Chicago Skyway
€289mn cash in
€124mn net capital gains
• Irish toll roads
• Portuguese toll roads stake sale agreed
USA
NTE +19.5%
LBJ +45.4% (4Q’16 vs 4Q’15)
E-mail: [email protected] – Tel: +34 91 586 27 30
FY16
486
297
%
-5.3%
-10.8%
% LfL
+24.8%
+24.9%
407ETR
Equity method, Ferrovial stake 43%
EMPLOYMENT GROWTH (2021 – 2041)
POPULATION GROWTH (2021 – 2041)
407ETR Regions includes: Toronto, Durham, Peel, Halton & York
Source: Government of Ontario Places to Grow
Growth in population & employment to support traffic
407ETR FY 2016 RESULTS (CAD mn)
(CADmn)
Revenues
EBITDA
Traffic (VKTs'000)
Dividends
FY16
1,135
985
%
+13.2%
+17.3%
2,640,770
+4.9%
790
+5.3%
407 EAST PHASE I OPENING IMPACT
 407 East I opened to traffic on June 20, 2016
 407 East I was toll-free until February 1, 2017
 Overall traffic impact above +2%
Highest EBITDA growth over the last 10 years
8
E-mail: [email protected] – Tel: +34 91 586 27 30
Managed Lanes (NTE & LBJ)
GROWTH SINCE OPENING (NTE)
Index 100
GROWTH SINCE OPENING (LBJ)
350
200
300
180
250
160
200
140
150
120
100
4Q'14
1Q'15
2Q'15
3Q'15 4Q'15
Revenue
100
1Q'16 2Q'16 3Q'16 4Q'16
Txns
4Q'15
Rev/Txn
1Q'16
2Q'16
Transactions
SPEEDS AT NTE
Revenue
3Q'16
4Q'16
Rev/Txn
TOLL RATES EVOLUTION (NTE)
80
CAP linked to
inflation
70
60
50
Average toll
rate per
transaction
(2016):
~USD3.05
40
30
20
+18.2%
10
0
12am
3am
6am
9am
2011
2016 TEXpress Lanes
9
Eastbound workday on segment 2
12pm
3pm
6pm
9pm
2016 Non-Tolled Lanes
12am
3am
6am
2014
E-mail: [email protected] – Tel: +34 91 586 27 30
9am
12pm
2015
3pm
2016
6pm
Cap
9pm
Services
€ million
FY16
6,078
325
5.4%
24,431
Revenues
EBITDA
EBITDA %
Order book
 € 395mn operating cash flow (OCF)
 UK Services: Challenging environment
• Budget constrains
• Fewer project works (higher margins)
• Birmingham contract (legal expenses)
% LfL
+2.8%
-12.9%
+7.2%
-11.0%
OPERATING CASH FLOW
Restructuring plan focused on profitability
2017E Sales slightly below 2016 figures
2017E EBITDA margin: 3% - 4%
395
302
289
2014
2015
>900 layoffs
-€21mn impact
2016
PERFORMANCE BY GEOGRAPHY (LfL)
UK
 Positive evolution in Spain
Profitability remains stable with EBITDA margin at 10.7%
 7 months contribution from Broadspectrum
10
%
+24.1%
+4.2%
E-mail: [email protected] – Tel: +34 91 586 27 30
+1%
-45%
-16%
SPAIN
Revenues
EBITDA
Order book
+5%
+5%
-6%
Broadspectrum
TRANSACTION DETAILS
TOTAL PIPELINE
AUD million
Transaction terms:
• EV
€934mn
100% acquisition
• Equity €499mn
Broadspectrum delisted
• Debt
Consolidation from May 31st
€435mn
Acquisition rationale:
19%
• Platform for medium and long term growth
• Bought at low point sector cycle
46%
TOTAL
• Leading position in public and infrastructure services in
Australia & New Zealand
13%
AUD30.3bn
• Exposure to US
• AUD8bn order book provides revenue visibility
22%
Ongoing strategic review
• No renewal of immigration centres contracts (contracts end
October 2017)
Government
Urban Infrastructure
Broadspectrum contribution: 7 months in 2016
• Revenues: €1,446mn
• EBITDA: €91mn
• EBITDA margin: 6.3%
11
E-mail: [email protected] – Tel: +34 91 586 27 30
Transport
Resources
Construction
€ million
 €245mn operation cash flow (OCF)
 Profitability remains at high level (EBITDA margin
8.1%)
Driven by Budimex (Poland)
FY16
4,194
342
8.1%
9,088
Revenues
EBITDA
EBITDA %
Order book
%
-2.2%
-13.1%
% LfL
-2.7%
-12.8%
+4.1%
+2.6%
 Strong growth in Budimex
•
Revenues +8.1% (LfL)
•
EBITDA +70.8% (LfL)
•
OPERATING CASH FLOW
272
245
236
Order book +6.0% (LfL)
2014
BUDIMEX ORDER BOOK (PLNbn)
2015
2016
ORDER BOOK BY COUNTRY
+107%
4.3
6.1
8.4
8.9
17%
Spain
2013
12
2014
2015
2016
E-mail: [email protected] – Tel: +34 91 586 27 30
22%
Poland
27%
US
8%
UK
25%
RotW
HAH
(Equity method, FERROVIAL stake 25%)
FY16
% LfL
100% GBP million
HAH P&L
 +8.3% dividend increase (GBP325mn vs GBP300mn in
2015 )
Revenues
2,809
+1.5%
EBITDA
1,683
+4.7%
 All-time high in passenger number for 2016
(75.7mn of passenger; +1% vs. 2015)
EBITDA %
59.9%
Net debt
14,307
30%
Transfer
Share
Destinations
1%
OPERATING IMPROVEMENT AT HEATHROW
94%
International
194
Punctuality
471k
75.7m
Passengers
Growth
+6.5%
% Passengers rating Heathrow
as Excellent or Very Good
Flights
63%
82
84%
79%
48%
Countries
 RAB: positive impact from higher inflation
 Heathrow expansion: Government support confirmed in Oct
2016 & draft NPS released in Feb 2017
AGS
2007
2007
2016
Record service standards
AIRPORTS TRAFFIC
(PAX million)
FY16
% LfL
Heathrow
75.7
+1.0%
Glasgow
9.4
+7.4%
Aberdeen
3.1
-12.2%
Southampton
2.0
+9.8%
(Equity method, FERROVIAL stake 50%):
 +6.7% dividend increase (GBP64mn vs GBP60mn in 2015)
 Traffic +2.8% (14.4mn pax.)
 EBITDA +10.8% thanks to cost controls
13
2016
E-mail: [email protected] – Tel: +34 91 586 27 30
Agenda
• 2016 Highlights
• Business Units
• Financial Results
• Looking Ahead
14
E-mail: [email protected] – Tel: +34 91 586 27 30
Macro impact
GBP million
FX
Over 3y expected GBP dividends hedged
UK airports
dividends*
USD, CAD & AUD
appreciated vs EUR
113
GBP
Hedge**
325
Additional GBP155mn 0.85 – 0.9 put spread
INFLATION
GBP million
INTEREST RATES
Ferrovial positively exposed to higher inflation in UK
90% FIXED DEBT
15,237
+100bps on interest rates
+€8mn financial expenses
-7,332
Heathrow RAB
Heathrow debt linked to RPI
Source: Company information, December 2016
15
* Dividends paid in 2016
** GBP Hedge, December 31st, 2016
E-mail: [email protected] – Tel: +34 91 586 27 30
Cash
flow
generation
vs
Dividends
Ex- Infrastructure Projects
(356)
639
995
(544)
Shareholder
remuneration
Operating Cash Flow
(pre-tax)
16
Organic Investments
Activity Cash Flow (pre-tax)
Before M&A investment
E-mail: [email protected] – Tel: +34 91 586 27 30
2016 figures
€ million
Strong
cash
flow
generation
Ex- Infrastructure Projects
2016 figures
€ million
OPERATING CASH FLOW (pre-tax)
Construction
Services
Toll Roads (dividends)
Airports (dividends)
Others
2016
245
395
290
134
(69)
TOTAL
995
OPERATING CASH FLOW
13%
27%
23%
40% DIVIDENDS FROM INFRA PROJECTS
37%
CONSTRUCTION
SERVICES
SOURCES & USES
Other*
Operating CF
Dividends
17
* Includes Divestments & Financing
Investments
E-mail: [email protected] – Tel: +34 91 586 27 30
Interest Taxes & others
Net debt evolution
€ million
EXCLUDING INFRASTRUCTURE PROJECTS
1.514
502
697
424
340
98
-435
-82
Settlement from
Net Cash Dec'15 EBITDA ex infra Dividends from
WC
projects
Toll Roads & Construction & completed
Airports
Services
works, factoring
& Other*
-356
-137
-130
-499
Organic
Investment
Broadspectrum
transaction
-544
Other M&A
Divestments
Shareholder Interest, taxes & Net cash Dec'16
remuneration
others
INFRASTRUCTURE PROJECTS
1.702
442
122
-68
-388
-353
-363
-4.963
-6.057
Net debt Dec'15
18
EBITDA
Working Capital
Net Investment
Dividends & Interest
Capital
E-mail: [email protected] – Tel: +34 91 586 27 30
Perimeter
Taxes, Forex & Other
changes/Divestments
Net debt Dec'16
2016 Profit & Loss
€ million
IMPAIRMENT & DISPOSALS (2016)
2016
2015
10,759
9,701
EBITDA
944
1,027
Impairment & disposals
324
131
EBIT
926
901
(-391)
(-637)
82
312
EBT
617
577
Taxes
-233
54
-7
89
Revenues
Net Financial Result
Equity accounted
Minorities
NET PROFIT
19
376
•
•
•
•
Capital gain from the sale of Chicago
Capital gains from the sale of Irish toll roads
Further provision registered at Autema
SH-130 deconsolidation
NET FINANCIAL RESULT (2016)
•
•
Lower financial expenses (deconsolidations)
2015 negative impact: derivatives
EQUITY ACCOUNTED
•
•
2016: change in MtM of inflation hedges (HAH)
2015: positive extraordinary results
TAXES (2016)
•
•
•
Chicago divestment impact
No recognition of tax loss carry forward
Tax payment at cash flow statement €147mn
NET PROFIT (2016)
• Chicago, M3 & M4 sale
720
• SH130 deconsolidation
• Fair value adjustments
• Non-recurring effects on HAH
(vs +€138mn in 2015)
• 2015 positive impact OLR & R4
deconsolidation (+€122mn)
E-mail: [email protected] – Tel: +34 91 586 27 30
(+€124mn)
(-€30mn)
(-€31mn)
(-€107mn)
Agenda
• 2016 Highlights
• Business Units
• Financial Results
• Looking Ahead
20
E-mail: [email protected] – Tel: +34 91 586 27 30
Shareholder remuneration
Shareholder
remuneration
2016
2015
€544mn
€532mn
+2.3%
2017 SHAREHOLDER REMUNERATION PROPOSAL
2016
Scrip dividend (€/share)
First scrip dividend (equivalent to 2016 complementary dividend)*
0.32
0.311
Second scrip dividend (equivalent to 2017 interim dividend)*
0.42
0.408
TOTAL
0.74
0.719
Share buyback
21
of up to €275mn
or up to 19m shares
E-mail: [email protected] – Tel: +34 91 586 27 30
of up to €275mn
or up to 19m shares
Looking ahead
Services
High quality assets
UK turnaround
Addressing pipeline in Australia
Strong traffic trends
Higher dividends
Attractive
shareholder remuneration
Scrip dividend
Share Buyback
22
Construction
Additional order book
from infra projects
Active pipeline
Infra projects
US /Australia /Canada/Poland
Monitoring other
markets
E-mail: [email protected] – Tel: +34 91 586 27 30
Q&A Session
23
E-mail: [email protected] – Tel: +34 91 586 27 30
ferrovial
INVESTOR RELATIONS DEPARTMENT - C/ Príncipe de Vergara, 135 - 28002 MADRID (Spain)
T: +34 91 586 27 30 F: +34 91 586 28 69 e-mail: [email protected]
website: www.ferrovial.com