Ferrovial N.v. · BME:FER
Ferrovial — FY2016 Earnings Presentation
61 slides from Ferrovial's earnings presentation, May 2017
Slide 1: Ferrovial
ferrovial 1 Ferrovial App
Slide 2: People and Environment
FY2016 figures People Environment TALENT MANAGEMENT, ENGAGEMENT & CULTURE Operating excellence & innovation are possible given Ferrovial employees’ Ferrovial assumes a firm commitment on emissions reduction and environmental talent, high engagement & corporate culture. Over 96.000 people work in the
Slide 3: Innovation and Say on pay
FY2016 figures Innovation Say on pay Ferrovial understands innovation as a differential element that allows it to lead PRESIDENT & CEO REMMUNERATION the Infrastructure & Services transformation, offering its clients and users solutions that contribute in an efficient, sustainable and safe way to the
Slide 4: Community
FY2016 figures Community In its commitment to the scope of Sustainable Development Goals (SDG), Ferrovial actively participates in the community through the development and execution of social programs to significantly improve people's lives. The company has a key role in the social and economic dev
Slide 5: Table of Contents
Table of Contents Ferrovial overview & strategy Ferrovial main assets Ferrovial FY16 results Ferrovial 1Q17 results Appendix: 407ETR toll road Managed Lanes toll roads 407ETR vs Managed Lanes Diversified porftolio Historic consolidated & business units figures 5
Slide 6: Ferrovial Overview & Strategy
Ferrovial Overview & Strategy Who we are… A transport infrastructure provider/operator with a strong focus on CF generation, based in Spain, but with c.88% international SOTP. Pricing power, dynamic tolling & very long duration are our main differential factors vs other toll road operators. Infrastr
Slide 7: 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 8: 1. Cash Flow generation
1. Cash Flow generation € million 2016 figures € 342mn EX-INFRASTRUCTURE EBITDA from Construction PROJECTS Net cash position € 325mn EBITDA from Services Non capital intensive / Backlog visibility / EPS accretive PARENT COMPANY 64% Institutional & Retail Investors 36% Founder’s family members (Chair
Slide 9: Cash Flow generation – Balanced Contribution
1. Cash Flow generation – Balanced Contribution 2016 figures Ex- Infrastructure Projects € million OPERATING CASH FLOW (pre-tax) 2016 CF GENERATION vs DIVIDENDS Construction 245 Services 395 (356) Toll Roads (dividends) 290 639 Airports (dividends) 134 995 Others (69) (544) Shareholder TOTAL 995 rem
Slide 10: Profitable growth. Solid Financial Situation
2. Profitable growth. Solid Financial Situation FY16 figures € million EX–INFRASTRUCTURE PROJECTS Net debt evolution ex-infrastructure projects €mn 1,484 1,663 1,632 1,514 907 697 NET CASH 31 €697mn -1,172 -1,547 -1,987 -3,064 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 PARENT COMPANY INF
Slide 11: Shareholder remuneration (CF Criteria)
3. Shareholder remuneration (CF Criteria) 917 +2.3% 510 532 544 477 308 367 +77% 2010 2011 2012 2013 2014 2015 2016 SHAREHOLDER REMUNERATION PROPOSAL 2017 2016 Scrip dividend (€/share) First scrip dividend (equivalent to 2016 complementary dividend) 0.32 0.311 Second scrip dividend (equivalent to 20
Slide 12: Valuation split by currency & asset
Valuation split by currency & asset Analyst consensus valuation Over 70% in CAD, USD & EUR, 17% in GBP 17% RoW EUR CAD & USD Australia GBP 5% from UK Services, 12% from UK airports 12% 5% Toll Roads Airports Construction Services UK Rest of Services Cash Source: Analyst consensus, December 2016 12
Slide 13: Ferrovial main assets
13 > Ferrovial main assets ferrovial Investor Relations
Slide 14: Valuation per asset type
Valuation per asset type c.50% from 407ETR toll road & Managed Lanes (Canada, US) 68% from Infrastructure assets 68% INFRASTRUCTURE Rest of Rest of ETR407 Man. Lanes Heathrow Infra Construction Services UK Services Net cash at 45% 7% 9% 7% 12% 5% 12% parent 3% Source: Analyst consensus, December 201
Slide 15: 407ETR Canada
407ETR Canada, Ferrovial stake 43%, Equity method LONG DURATION & PRICING FLEXIBILITY • 108kms in Greater Toronto • Tariff freedom • Tariff flexibility by segment, direction, time, day… • 81 years to maturity (to 2098) • Alternative routes are strongly congested • Fast & reliable travel times • Free
Slide 16: 407ETR: Strong EBITDA growth
407ETR Strong EBITDA growth … even with negative traffic and GDP EBITDA growth 6.8x GDP growth (avg 2010-16) 2016 EBITDA, the highest growth of the past 13 years. annual % growth 18.9 17.3 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 4.1 3.1 3.2 3.4 3.4 3.3 2.8 2.9 2
Slide 17: Managed Lanes Texas, USA
Managed Lanes Texas, USA, Global Consolidation. NTE 57%, LBJ 51% LONG DURATION & PRICING FLEXIBILITY • 3 Managed Lanes in Dallas - Fortworth (2 open: NTE & LBJ) • Dynamic tolling: can change tolls every 5 mins • 44 years to maturity (to 2061) • Higher speed allowed (70mph vs 60 on free lanes) • Free
Slide 18: Heathrow Airport London, UK
Heathrow Airport London, UK, Ferrovial stake 25%, Equity method THE BUSIEST AIRPORT IN THE WORLD • Traffic growth: +1% vs 2015 • Record passengers: 75,7mn 2016 • Heathrow operates at over 98% capacity • Annual flights 472,067 (1,293 per day) • Connected 183 destinations in 82 countries • Cargo 25% U
Slide 19: Macro impact
Macro impact FX GBP million Over 3y expected GBP dividends hedged UK airports dividends* 113 USD, CAD & AUD GBP appreciated vs EUR Hedge** 325 Additional GBP155mn 0.85 – 0.9 put spread INFLATION INTEREST RATES GBP million Ferrovial positively exposed to higher inflation in UK 15,237 90% FIXED DEBT +
Slide 20: Looking ahead
Looking ahead Services High quality assets Construction UK turnaround Strong traffic trends Additional order book Addressing pipeline in Australia Higher dividends from infra projects Attractive Active pipeline shareholder remuneration Infra projects Scrip dividend US /Australia /Canada/Poland Share
Slide 21: Ferrovial FY16 Results
21 > Ferrovial FY16 Results ferrovial | Re,
Slide 22: 2016 Highlights
2016 Highlights €995mn Operating Cash Flow (pre-tax) Solid cash generation • 40% from infra projects dividends Shareholder remuneration €544mn (€532mn in 2015) Traffic growth across the board Strong operating growth New awards in core markets (I-66) Total order book increase (+6.3%) €697
Slide 23: Toll roads
Toll roads € million TRAFFIC EVOLUTION Canada 407ETR +4.9% Strong dividends USA • €290mn dividends from projects NTE +19.5% ETR €244mn, other assets €46mn Ireland LBJ +45.4% (4Q’16 vs 4Q’15) • €113mn invested in equity of new projects M4 +6.5% Portugal Traffic growth in main markets Azores Spain
Slide 24: 407ETR
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) 40
Slide 25: Managed Lanes (NTE & LBJ)
Managed Lanes (NTE & LBJ) GROWTH SINCE OPENING (NTE) GROWTH SINCE OPENING (LBJ) 350 200 300 180 250 160 200 140 150 120 Index 100 100 100 4Q'14 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 Revenue Txns Rev/Txn Transactions Revenue Rev/Txn SPEEDS AT NTE TOLL RATES EVO
Slide 26: Services
Services € million FY16 % % LfL Revenues 6,078 +24.1% +2.8% € 395mn operating cash flow (OCF) EBITDA 325 +4.2% -12.9% EBITDA % 5.4% UK Services: Challenging environment Order book 24,431 +7.2% -11.0% • Budget constrains • Fewer project works (higher margins) OPERATING CASH FLOW • Birmingham cont
Slide 27: Broadspectrum
Broadspectrum TRANSACTION DETAILS TOTAL PIPELINE AUD million Transaction terms: • EV €934mn 100% acquisition • Equity €499mn Broadspectrum delisted • Debt €435mn Consolidation from May 31st Acquisition rationale: 19% • Platform for medium and long term growth 46% • Bought at low point sector cycle T
Slide 28: Construction
Construction € million €245mn operation cash flow (OCF) FY16 % % LfL Revenues 4,194 -2.2% -2.7% Profitability remains at high level (EBITDA margin EBITDA 342 -13.1% -12.8% 8.1%) EBITDA % 8.1% Driven by Budimex (Poland) Order book 9,088 +4.1% +2.6% Strong growth in Budimex • Revenues +8.1% (LfL
Slide 29: HAH and AGS
HAH (Equity method, FERROVIAL stake 25%) 100% GBP million HAH P&L FY16 % LfL +8.3% dividend increase (GBP325mn vs GBP300mn in Revenues 2,809 +1.5% 2015 ) EBITDA 1,683 +4.7% All-time high in passenger number for 2016 EBITDA % 59.9% (75.7mn of passenger; +1% vs. 2015) Net debt 14,307 +6.5% 30% 94%
Slide 30: Heathrow: Best ever passenger service levels
Heathrow: Best ever passenger service levels FY16 figures Quarterly passenger satisfaction Passenger satisfaction European ranking 4Q 2006 – 4Q 2016 4.50 4Q16 4.20 ASQ score (out of 5) 4.19 4.00 4.00 3.80 3.60 3.50 3.40 3.20 3.00 2Q'10 2Q'11 2Q'12 2Q'13 2Q'14 2Q'15 2Q'16 4Q'06 4Q'07 4Q'08 4Q'09 2Q'0
Slide 31: Ferrovial 1Q17 Results
31 > Ferrovial 1Q17 Results ferrovial | Re,
Slide 32: 1Q17 Results
1Q17 Results € million HIGHLIGHTS P&L 1Q17 • Positive performance of main infra assets (407ETR, HAH and AGS), with solid 1Q17 1Q16 Var % growth in traffic and higher contribution from dividends (total dividends from REVENUES 2,885 2,083 38.5% projects reached a total of EUR154mn). EBITDA 227 194 16.
Slide 33: Thank you
Thank you E-mail: ir@ferrovial.com – Tel: +34 91 586 27 30 33
Slide 34: Appendix
Appendix Introduction to 407ETR Toll road Managed Lanes Toll roads 407ETR vs Managed Lanes Diversified porftolio Historic consolidated & business units figures 34
Slide 35: 407ETR Location
407 ETR Location Area of expansion 407 East extension High density population area Ring road of Toronto 108 km 407 35
Slide 36: 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
Slide 37: 407 ETR: Fast, Safe, Reliable
407Fast ETR Safe R eliable 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 Alternatives routes Inclu
Slide 38: 407ETR Cash flow and valuation overview
407 ETR Cash flow and valuation overview CASH GENERATION (1999 - FY2016) 407 ETR EQUITY VALUATION 100% (€mn) € million € million Cash Generation 100% pay-back 16,110 Initial equity invest.(62%) -326 mn in first 10 years Dividends 1,761 mn 31x 10%Disposal 640 mn NET CASH IN 2,075 mn Valuation x31 525
Slide 39: 407ETR Financial overview
407 ETR Financial overview ($CAD million) 2016 figures REVENUES CAPITAL EXPENDITURE CAGR: 9.5% 1,135 97 90 88 72 77 70 74 70 72 55 456 38 81 years to maturity 2006 2016 OPEX DIVIDENDS CAGR: 3.8% 150 750 790 680 730 600 103 100% pay-back in first 10 years 460 300 145 120 135 190 2010 2014 2016 2012 2
Slide 40: Value creation: EBITDA-GDP-Traffic
407 ETR Value creation: EBITDA-GDP-Traffic Strong EBITDA growth even with negative traffic and GDP annual % growth 18.9 17.3 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 4.1 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 1.2 1.0 0.6 0.7 0 -0.5 -1
Slide 41: Appendix
Appendix Introduction to 407ETR Toll road Managed Lanes Toll roads 407ETR vs Managed Lanes Diversified porftolio Historic consolidated & business units figures 41
Slide 42: Managed Lanes: Express Tollway within an Existing Highway
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 42
Slide 43: Managed Lanes: 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 43
Slide 44: Dallas and Fort Worth Regional Map
Dallas and Fort Worth Regional Map Managed Lanes regional map LBJ NTE 1-2 NTE 35W 44
Slide 45: Toll rates – tariff threshold
Toll rates – tariff threshold Tariff threshold Toll Rate Toll Rate Cap 0.75 0.84 c/mi $/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 46: 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 47: 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 48: 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 49: 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 50: Appendix
Appendix Introduction to 407ETR Toll road Managed Lanes Toll roads 407ETR vs Managed Lanes Diversified porftolio Historic consolidated & business units figures 50
Slide 51: 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 52: Appendix
Appendix Introduction to 407ETR Toll road Managed Lanes Toll roads 407ETR vs Managed Lanes Diversified porftolio Historic consolidated & business units figures 52
Slide 53: Diversified portfolio
Diversified portfolio € million 2016 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 €944Mn EBITDA Proportional (1)
Slide 54: Appendix
Appendix Introduction to 407ETR Toll road Managed Lanes Toll roads 407ETR vs Managed Lanes Diversified porftolio Historic consolidated & business units figures 54
Slide 55: FY16 Results
FY16 Results € million Income Statement Revenues FY16 FY15 Var % LfL FY16 FY15 Var % LfL Construction 4,194 4,287 -2.2% -2.7% Revenues 10,759 9,701 10.9% 1.2% Airports 4 8 -49.9% -68.6% Toll Roads 486 513 -5.3% 24.8% EBITDA 944 1,027 -8.1% -4.0% Services 6,078 4,897 24.1% 2.8% Other -4 -6 n.a. n.a.
Slide 56: Historic consolidated figures: 2012-2016
Historic mn € consolidated figures: 2012-2016 mn € Operating CF ex-infra projects (before tax.) Net debt OCF ex-infra 939 1,097 1,076 889 995 ND -5,106 -5,352 -6,230 -4,542 -4,266 Op. CF (Construction 1,489 1,663 1,632 1,514 N. CASH EX- 697 & Services) 538 663 640 INFRA 591 560 Dividens from infra I
Slide 57: Construction figures: 2012-2016
Construction figures: 2012-2016 mn € Operating & investment CF (ex-projects) Revenues 304 4,244 4,326 3,942 4,287 272 4,064 OCF ex-infra 236 245 10% 17% 15% (before tax) 14% 17% 31% 29% 33% 27% 29% 100 59% 53% 56% 54% 2012 2013 2014 2015 2016 56% EBITDA ex-project 324 329 335 380 329 2012 2013 2014
Slide 58: Services figures: 2012-2016
Services figures: 2012-2016 mn € Operating & investment CF (ex-projects) Revenues 6,078 491 4,897 4,401 24% 359 OCF ex-infra 395 3,656 302 (before tax) 289 2,951 45% 63% 59% 62% 51% 49% 39% 36% 34% 29% 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 EBITDA ex-project 273 264 321 237 241 Spain UK B
Slide 59: Toll roads figures: 2012-2016
Toll roads figures: 2012-2016 Dividends received Managed Investment mn € 290 7% 255 267 242 13% USA 220 25 46 25 31 1,877 km Canada 22 44% 7% Spain 27 concessions UK & Ireland 224 242 244 217 8% 198 9 countries Rest od Europe Rest of World 21% 2012 2013 2014 2015 2016 407-ETR Others Years to maturit
Slide 60: Airports figures: 2012-2016
Airports figures: 2012-2016 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 61: Disclaimer
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 regardin