Ferrovial N.v. · BME:FER
Ferrovial — Debt Investor Presentation (September 2016)
56 slides from Ferrovial's debt investor presentation, September 2016
Slide 1: Fixed Income Investor Presentation 1H 2016
Ferrovial Fixed Income Investor Presentation 1H 2016 September 2016 1
Slide 2: Ferrovial Overview & Strategy
Ferrovial Overview & Strategy Who we are… We are a transport infrastructure provider/operator with a strong focus on CF generation, with solid corporate ratings of BBB by S&P and Fitch (both stable). Though based in Spain, c85% of the SOTP is international. 40% of our value comes from downtown Toron
Slide 3: What is Ferrovial?
What is ? World leading private infrastructure provider present in toll roads, airports and cities Design Financing Building Operating Maintaining TOLL ROADS AIRPORTS CONSTRUCTION SERVICES • Leading sponsor of toll roads • Largest airport private investor • Civil engineering • Leading provider of in
Slide 4: 1. Cash Flow Generation
1. Cash Flow Generation € million 2015 figures € 393mn EX-INFRASTRUCTURE EBITDA from Construction PROJECTS Net cash position € 312mn EBITDA from Services Non capital intensive / Backlog visibility / EPS accretive PARENT COMPANY 65% Institutional & Retail Investors 35% Founder’s family members (Chair
Slide 5: 1. Strong cash flow generation
1. Strong cash flow generation € million 2015 figures Excluding Infrastructure Projects OPERATING CASH FLOW 2015 Construction 272 Services 289 Toll Roads (dividends) 267 Airports (dividends) 132 Others (70) TOTAL 889 BALANCED CONTRIBUTION 42% DIVIDENDS FROM INFRA PROJECTS CONSTRUCTION SERVICES 14% 2
Slide 6: 2. Profitable growth. Solid Financial Situation
2. Profitable growth. Solid Financial Situation € million 1H16 figures EX–INFRASTRUCTURE PROJECTS Net debt evolution ex-infrastructure projects €mn 1,484 1,663 1,632 1,514 907 NET CASH 31 444 €444mn -1,172 -1,547 -1,987 -3,064 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 1H16 PARENT COMPANY INF
Slide 7: Recent developments
Recent developments Ferrovial 1H16 Results 7
Slide 8: Recent developments
Recent developments GBP weakness Higher inflation 1 BREXIT Lower interest rates Lower GDP growth? Acquisitions: Broadspectrum 2 M&A UPDATE Asset Rotation Geographical footprint 8
Slide 9: 1. Brexit – GBP short/medium term weakness hedged
1. Brexit – GBP short/medium term weakness HEDGED Ex infrastructure cash, debt and net exposure to GBP (GBPmn) Net cash position in GBP Net cash + FX Forwards 286 103 -183 -265 -368 FX GBP Gross debt GBP Gross cash GBP Net position GBP Forwards Hedge Net position (1) (2) (1) + (2) Source: Company in
Slide 10: 1. Brexit – Over 3 year expected GBP dividends hedged
1. Brexit – Over 3 year expected GBP DIVIDENDS HEDGED Airports dividends & GBP Hedge (GBPmn) UK airports 105 dividends* GBP Hedge** 368 Source: Company information * Dividends paid in 2015 ** GBP Hedge, June 30th, 2016 10
Slide 11: 1. Brexit – Ferrovial positively exposed to higher inflation in UK
1. Brexit – Ferrovial positively exposed to higher inflation in UK Heathrow (GBP mn) +2.5% RPI 375 216 15,007 -6,362 -159 Heathrow RAB Heathrow debt linked Additional Additional Positive annual net to RPI Heathrow RAB Heathrow debt linked impact on RAB to RPI Source: Company information, June 2016 1
Slide 12: 1. Brexit – Lower interest rate environment
1. Brexit – Lower interest rate environment Interest rate curve evolution USD CAD 2.0% 2.0% 1.8% 1.7% 1.6% 1.4% Lower overall 1.2% 1.4% 1.0% interest rates 0.8% 1.1% 0.6% increased appetite 0.4% 0.8% 1M 3M 6M 12M 2Y 3Y 5Y 7Y 10Y 15Y 20Y 30Y 1M 3M 6M 12M 2Y 3Y 5Y 7Y 10Y 15Y 20Y 30Y for long duration
Slide 13: 1. Brexit – Lower GDP growth?
1. Brexit – Lower GDP growth? • Resilient track record Heathrow • Operates at capacity • Glasgow: Potential negative impact from lower GDP AGS • Private transactions in airports show values well above analysts’ SOTP • Less public budget restrictions? Amey • Restructuring process to mitigate current
Slide 14: 1. Brexit – Over 70% of valuation in CAD, USD & EUR
1. Brexit – Over 70% of valuation in CAD, USD & EUR Analyst consensus valuation 21% GBP CAD & USD EUR RoW CAD, USD have appreciated vs EUR since Brexit referendum Source: Valuation based on Analyst consensus, June 30th 2016 14
Slide 15: 2. Ferrovial M&A update
2. Ferrovial M&A update Acquisitions: Broadspectrum Acquisition rationale: - Platform for medium and long term growth to develop Construction, Services & Toll roads - Bought at point with weaker results on sector & cycle downturn 100% acquisition - Leading position in public and infrastructure servi
Slide 16: Ferrovial 1H16 Results
16 > Ferrovial 1H16 Results ferrovial | Investor Relations
Slide 17: Toll roads
Toll roads € million Robust traffic growth in all markets TRAFFIC EVOLUTION* Canada 407ETR 407ETR • +4.6% traffic in Q2 despite c.+10% in tariffs (Feb’16) • Four all time daily traffic records during May & June +2.9% USA • ETR407 East Extension opened to traffic on June 20th: NTE +31.9% (+2% traffic
Slide 18: 407ETR
407ETR Equity method, Ferrovial stake 43% New bond: CAD500mn, 31Y, 3.6% (May 2016) POPULATION GROWTH * 2nd lowest long dated coupon in its history 3,439,131 1991-2011 * 3rd lowest at any tenor CAGR +2.9% 3,052,631 407ETR 1Q 2016 RESULTS (CAD mn) 2,600,332 1H16 % 2,243,462 Revenues 516 +9.5% 1,959,98
Slide 19: NTE
NTE Global Consolidation, Ferrovial stake 57% CORRIDOR TRAFFIC RECOVERY DECREASE IN CONGESTION LEVELS Construction Construction 135 ends begins 100 = MARCH 2010 INDEXED VOLUME 115 95 Average speed 75 55 *+25% segment 1 *morning peak hour (7:00 am) HIGH APPROVAL RATING Favourable & very favourable 70
Slide 20: Services
Services € million UK Services 1H 2016 RESULTS • Results impacted by lower public expenditure 1H16 % Revenues 2,609 +9.6% • Restructuring plan underway: EBITDA 142 -20.1% • 600 lay-offs EBITDA % 5.5% • c.£14mn cost Order book 27,024 +18.5% • £20mn savings in 2H2016 • Focus on profitability, not grow
Slide 21: Construction
Construction € million 1H 2016 RESULTS Lower revenues (-11.6%) from: 1H16 % • Weak domestic market Revenues 1,862 -11.6% • Completion of managed lanes (NTE and LBJ) in US EBITDA 139 -29.7% EBITDA % 7.4% 83% of revenues are international Order book 9,462 +8.4% High margins (7.4% at EBITDA) Order book
Slide 22: HAH and AGS airports
HAH (Equity method, FERROVIAL stake 25.0%) GBP million Traffic +0.6% 1H 2016 RESULTS (100%) HAH P&L 1H16 % UK -12.5% M. East +6.0% Revenues 1,321 +1.0% EBITDA 783 +4.5% N.America +0.3% Europe +1.9% EBITDA % 59.3% Africa -6.6% Asia Pac +2.6% OPERATING IMPROVEMENT AT HEATHROW Latam +3.9% % Passengers
Slide 23: Heathrow: Best ever passenger service levels
Heathrow: Best ever passenger service levels 1H16 figures Quarterly passenger satisfaction Passenger satisfaction European ranking Q4 2006 – Q2 2016 4.50 2Q16 4.20 ASQ score (out of 5) 4.16 4.00 4.20 3.80 3.90 3.60 3.60 3.40 3.30 3.20 2Q'15 2Q'11 2Q'12 2Q'10 2Q'14 4Q'06 4Q'09 2Q'13 2Q'16 4Q'08 4Q'07
Slide 24: Net Financial Position
Net Financial Position Net Cash position €1,514mn net cash position (ex-infrastructures) Dec 2015 • Looking for further growth opportunities - €287mn toll roads divestments - €1.1bn gross investment (incl. Broadspectrum €934mn) - €175mn shareholder remuneration €444mn net cash position (ex-infrastru
Slide 25: Conclusions
Conclusions • Excellent performance of key infrastructure assets • Low interest rates benefit long duration assets and make investing more competed • Dividends hedged • Brexit • Resilient Heathrow • Benefits from higher inflation • GDP uncertainty to prompt infrastructure investment? • Higher divide
Slide 26: 1H16 Results
1H16 Results € million Income Statement Revenues 1H16 1H15 Var % 1H16 1H15 Var % Construction 1,862 2,105 -11.6% Revenues 4,697 4,736 -0.8% Airports 3 3 0.6% Toll Roads 236 245 -4.0% EBITDA 421 538 -21.8% Services 2,609 2,380 9.6% Other -12 3 n.a. EBITDA margin 9.0% 11.4% Total 4,697 4,736 -0.8% Per
Slide 27: 2015 Results
2015 Results € million Income Statement Revenues 2015 2014 Var % 2015 2014 Var % Construction 4,287 3,942 8.8% Revenues 9,701 8,802 10.2% Airports 8 9 -9.7% Toll Roads 513 432 18.9% EBITDA 1,027 983 4.5% Services 4,897 4,401 11.3% Other -6 18 -133.9% EBITDA margin 10.6% 11.2% Total 9,701 8,802 10.2%
Slide 28: Thank you
Thank you Ferrovial Investor Relations 28 E-mail: ir@ferrovial.com – Tel: +34 91 586 27 30
Slide 29: Appendix
Appendix Introduction to 407ETR Toll road Managed Lanes Toll roads 407ETR vs Managed Lanes Diversified porftolio Historic consolidated & business units figures 29
Slide 30: 407ETR location
407 ETR Location Area of expansion 407 East extension High density population area Ring road of Toronto 108 km 407 30
Slide 31: All Electronic Roadside Tolling System
407 ETR All Electronic Roadside Tolling System Sophisticated electronic toll highway NO toll-booths, “closed ticket” tolling scheme (on/off ramps) NO stopping or slow-downs to pay ALL vehicles able to use highway Transponder not required. If valid transponder is not detected, digital images are take
Slide 32: 407ETR: Fast, Safe, Reliable
Fast 407 ETR Safe Reliable LOCATION HIGH HOUSEHOLD INCOME Greater Toronto Area 46% higher 23% of Canada population than Canada average SPEED NO REGULATORY REVIEWS Alternatives routes 40kph vs 100kph at 407 During concession life (99 years) TRAFFIC TOLL RATE HIGH FLEXIBILITY Including segment, Altern
Slide 33: Strong dividend flow, equity valuation sharp increase
407 ETR Cash flow and valuation overview CASH GENERATION (1999-2015) 407 ETR VALUATION (100%) € million € million Cash Generation Initial equity invest.(62%) -326 mn 100% pay-back 14,808 Dividends 1,575 mn in first 10 years 28x 10%Disposal 640 mn Valuation x28 NET CASH IN 1,889 mn 525 MATURITY 1999
Slide 34: Financial overview ($CAD million)
407 ETR Financial overview ($CAD million) 2015 figures REVENUES CAPITAL EXPENDITURE CAGR: 9.1% 1,002 97 90 88 72 77 70 74 70 420 49 55 38 82 years to maturity 2005 2015 OPEX DIVIDENDS CAGR: 4.5% 162 730 750 680 600 104 460 100% pay-back in first 10 years 300 190 145 120 135 85 2005 2015 20052006 200
Slide 35: Value creation: EBITDA-GDP-Traffic
407 ETR Value creation: EBITDA-GDP-Traffic annual % growth EBITDA growth Traffic growth GDP growth (annual) 18.9 15.4 15.4 15.6 14.1 14.2 13.2 12.6 11.7 10.8 10.3 9.7 9.7 7.5 7.2 6.1 5.4 5.5 3.1 3.2 3.4 3.4 3.3 2.8 2.9 2.6 3.0 2.5 1.9 2.0 1.9 2.0 1.5 1.2 1.2 1.0 0.7 0.6 0 -0.5 -1.7 -2.7 2002 2003 20
Slide 36: Appendix
Appendix Introduction to 407ETR Toll road Managed Lanes Toll roads 407ETR vs Managed Lanes Diversified porftolio Historic consolidated & business units figures 36
Slide 37: Managed Lanes: New assets landmark
Managed Lanes New assets landmark “Express Tollway within an Existing Highway” Free Tolled Lanes Free Lanes Speed >50mph Lanes A solution to congestion on “existing urban corridors” by means of Active management of “newly added capacity” through tolling 37
Slide 38: Level of demand
Managed Lanes Level of demand NTE (untolled) 407ETR (tolled) Peak period Westbound Eastbound 00.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 16.00 18.00 20.00 22.00 24.00 12.00 2.00 4.00 6.00 8.00 10.00 12.00 2.00 4.00 6.00 8.00 10.00 12.00 Time of the day Time of the day 38
Slide 39: Dallas and Fort Worth Regional Map
Dallas and Fort Worth Regional Map Managed Lanes regional map LBJ NTE 1-2 NTE 35W 39
Slide 40: Toll rates – tariff threshold
Toll rates – tariff threshold Tariff threshold Toll Rate Toll Rate Cap 0.75 c/mi 0.84 $/mi Demand threshold 3300 pce/h 2-lane sections Speed Speed Threshold 50 mi/h Demand 12:00 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 Hour starting Analysis by segment and direction Freedom und
Slide 41: North Tarrant Express
Managed Lanes North Tarrant Express Opened on October 2014, 9 months ahead of schedule KEY CHARACTERISTICS DESCRIPTION: Dallas-Fort Worth Metroplex, Major thoroughfares between Fort Worth and DFW Airport LENGTH: 13 mile section (IH 820 & SH 183 in Tarrant County) CONCESSION PERIOD: 52 years (since 2
Slide 42: Lyndon B Johnson
Managed Lanes Lyndon B Johnson Opened on September 10th 2015, 3 months ahead of schedule KEY CHARACTERISTICS DESCRIPTION: IH 635 (Dallas County), the most populous county in Texas LENGTH: 13 mile section of the IH 635 and IH 35E 108Km Electronic toll CONCESSION PERIOD: 52 years (since 2009) TARIFF P
Slide 43: North Tarrant Express 35W
Managed Lanes North Tarrant Express 35W Expected to open in mid-2018 KEY CHARACTERISTICS DESCRIPTION: 2 “managed lanes” in each direction of the IH-35W, segments 3A and 3B (3B segment to be built by TxDOT) LENGTH: 10.2 mile section (segments 3A 6.2 miles and 3B 4 miles) CONCESSION PERIOD: 48 years (
Slide 44: Managed Lanes Financial Overview
Managed Lanes Financial Overview Financial structure Figures in US Dollars Total Investment: 2.05 bn 2.62 bn 1.36 bn Private Equity: 21% 426 mn 26% 672 mn 32% 430 mn Cintra: 242 mn (57%) 343 mn (51%) 215 mn (50%) Meridiam: 141 mn (33%) 107 mn (16%) 60 mn (14%) DPFPS: 43 mn (10%) 44 mn (7%) 43 mn (10
Slide 45: Appendix
Appendix Introduction to 407ETR Toll road Managed Lanes Toll roads 407ETR vs Managed Lanes Diversified porftolio Historic consolidated & business units figures 45
Slide 46: How does the 407ETR compare to the new Managed Lanes?
How does the 407ETR compare to the new Managed Lanes? 407ETR Managed Lanes (NTE1-2) Participation: • 43%. Equity consolidated • 56.7%. Global consolidation Partners: • SNC Lavalin (17%), CPPIB (40%) • Meridiam (33%), Dallas fire & police pension scheme (10%) Concession period: • 99 years • 52 years
Slide 47: Appendix
Appendix Introduction to 407ETR Toll road Managed Lanes Toll roads 407ETR vs Managed Lanes Diversified porftolio Historic consolidated & business units figures 47
Slide 48: Diversified portfolio
Diversified portfolio € million 2015 figures EX – INFRASTRUCTURE PROJECTS INFRASTRUCTURE PROJECTS Services Construction Toll Roads Airports Non Capital Intensive Capital Intensive PROFIT GENERATION LONG DURATION CASH GENERATION LONG TERM VALUE Fully consolidated Method €1,027Mn EBITDA Proportional (
Slide 49: Appendix
Appendix Introduction to 407ETR Toll road Managed Lanes Toll roads 407ETR vs Managed Lanes Diversified porftolio Historic consolidated & business units figures 49
Slide 50: Historic consolidated figures: 2011-2015
Historic mn € consolidated figures: 2011-2015 Operating CF ex-infra projects (before tax.) Net debt OCF ex-infra 578 939 1,097 1,076 889 ND -5,171 -5,106 -5,352 -6,230 -4,542 Op. CF (Construction 1,489 1,663 1,632 1,514 538 N. CASH EX- 907 & Services) 663 591 560 INFRA Dividens from infra INFRA PROJ
Slide 51: Construction figures: 2011-2015
Construction figures: 2011-2015 mn € Operating & investment CF (ex-projects) Revenues 298 304 4,244 4,326 4,064 4,287 272 3,942 OCF ex-infra 236 10% 14% 15% (before tax) 17% 17% 31% 33% 27% 29% 100 29% 59% 53% 56% 54% 2011 2012 2013 2014 2015 56% EBITDA ex-project 235 324 329 335 380 2011 2012 2013
Slide 52: Services figures: 2011-2015
Services figures: 2011-2015 mn € Operating & investment CF (ex-projects) Revenues 491 4,897 4,401 OCF ex-infra 359 3,656 (before tax) 302 289 2,821 2,951 63% 62% 164 51% 59% 46% 54% 49% 39% 36% 34% 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 EBITDA ex-project 274 273 264 321 237 Dividends rece
Slide 53: Toll roads figures: 2011-2015
Toll roads figures: 2011-2015 Dividends received Managed Investment mn € 7% 255 267 242 13% 220 25 USA 31 22 25 1,877 km Canada 159 44% 7% Spain 26 27 concessions UK & Ireland 217 224 242 198 8% 9 countries Rest od Europe 133 Rest of World 21% 2011 2012 2013 2014 2015 407-ETR Others Years to maturit
Slide 54: Airports figures: 2011-2015
Airports figures: 2011-2015 Portfolio Heathrow Heathrow (25% stake) *AGS (50% stake) Heathrow shareholders 2 runways Aberdeen 183 destinations Glasgow 25% 20% 12.6% 11.2% 11.2% 10% 10% 82 Countries Southampton 80 Airlines Ferrovial Qatar Brittania GIC Alinda CIC USS Dividends received from airports
Slide 55: Disclaimer
Disclaimer The information and the opinions in this presentation have been prepared by Ferrovial, S.A. (the “Parent”) solely for use at a meeting regarding a proposed offering (the "Offering") of notes (the “Notes”) of Ferrovial Emisiones, S.A. (the “Issuer”). This presentation and its contents are
Slide 56: Disclaimer
Disclaimer The Notes have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or the laws of any state or other jurisdiction of the United States, and may not be offered or sold within the United States, or for the account or benefit of, U.S.
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