Ferrovial - Annual Report 2012


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It was Ferrovial's 60th anniversary in December. Over the years it has maintained the features that have defined its profile as a company. At the end of December 1952, Rafael del Pino Moreno decided to establish a company driven by innovation that could undertake highly difficult projects faster and more successfully.

After the initial years of consolidation, it faced the first of many great challenges that have defined the evolution of the company. The challenge consisted of a large and technically difficult project: the Bilbao-Behovia toll road (1968).

Later on, when Spanish companies had not yet started to expand internationally, the company took its first steps abroad with projects in Mexico, Brazil and Chile, and above all in Libya, a country where the company took on a project that proved a tough training ground for its executives and challenged workers' skills, because of the difficult terrain and the scarcity of materials.

In the late 1990s, it purchased the 407 ETR toll road in Toronto. This has proved to be one of the company's most complex and profitable operations, as it involves managing one of the best infrastructure assets in the world.

In 2003 Ferrovial purchased Cespa in Spain and Amey in the United Kingdom. With these two companies it created the services division, which holds an important position in the Spanish and UK markets today, and is starting to take its first steps in Poland, Chile and Qatar.

Three years later, in 2006, the company purchased BAA and this proved to be a real management challenge. After all the time and work put in, the new company HAH has begun to pay out dividends to its shareholders for the first time.

These are just some of the milestones that have shaped Ferrovial's character and its present and future success as a company.

2012 was a very positive year for Ferrovial thanks to its good operational results and improved financial position, as well as the award of major contracts and effective asset rotation. This success is reflected in the excellent share price.

It was a year when international markets offset declining activity in Spain, with major contracts won in countries including Canada, the U.S., France and Poland.

The company's main assets, the 407 ETR toll road in Toronto and Heathrow Airport, have performed excellently once again, with traffic reaching an all-time high. The UK airport rose to the occasion of its major event, the summer London Olympics, when it became the gateway for thousands of athletes and important figures from five continents. A total of 70 million passengers arrived in the UK last year though its terminals.

Also in the UK, the Services division, through Amey, was awarded an important contract in Sheffield, which strengthened its role as a benchmark for Smart Cities and for putting innovation at the service of the people. The confirmation of the recovery of traffic in the US, the opening of the SH130 toll road in Texas and Ferrovial Agroman's US460 concession in Virginia, together with the East Extension to the 407 toll road in Canada, have confirmed the company's solid position in the competitive and attractive market of North America.

Ferrovial continues to grow international and is gradually expanding into other countries. Last year the Ferrovial Services and Budimex joint venture in Poland started to bear fruit and won several maintenance contracts. The company has also been awarded its first service contract in Qatar.

Latin America has also provided opportunities for Ferrovial Agroman. After a few years of no work in Colombia, the company will now undertake several construction projects which will relaunch its activity in the country. Chile was another of the South American countries in which the construction company won several concessions for mining projects. To sum up, the international proportion of the company's backlog has become consolidated and now accounts for 62%.

As part of the asset rotation and asset value realization strategy, Ferrovial sold 16.34% of HAH, the former BAA. The move involved two investors with a large financial capacity: the China and Qatar sovereign wealth funds. The deal demonstrates the great interest of international markets in an asset like Heathrow Airport and also recognizes that its management has greatly improved over the past few years.

Other operations in the Airports division included the sale of Edinburgh and Stansted airports by Heathrow Airport Holdings at a higher price than expected by the market. These sales met the requirements of the UK Competition Commission.

To round off 2012, in January 2013 Ferrovial successfully completed its first corporate bond issue of 500 million euro. The issue was 11 times oversubscribed, showing that the capital markets back the company's management and expansion over the next few years. The funds obtained will be used for the early repayment of corporate debt, which will help to continue optimization of the company's financial structure.

The company is going to maintain its internationalization strategy by strengthening its presence in traditional markets and studying opportunities in new countries. It will continue to focus on profitability and value creation, while considering investment opportunities such as those made recently in the UK and Chile, with the purchase of Enterprise and of 70% of Steel Ingeniería.

These are just some of the milestones for the company over the year. Ferrovial has combined these successes with its traditional commitment to innovation, social responsibility and the environment. The agreement with the MIT has led to various energy efficiency projects with some Spanish city councils. The CI3 is also enabling the company to take part in a number of innovation projects, in partnership with other leading companies in the sector.

In the area of corporate responsibility, Ferrovial remains committed to its Social Infrastructure program, under which it has collaborated to improve access to drinking water and basic sanitation in African and Latin American countries as part of its strategic plan (the 20.13 Plan).

For the eleventh 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 has also received the backing of FTSE4Good, another index that lists committed companies, for the eighth year in a row.

In short, 60 years on Ferrovial still maintains its main distinguishing features, which have made it one of the world's leading companies in the construction, management and operation of transport infrastructures and urban services.

Ernesto López Mozo

Ernesto López Mozo

2012 Results

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  • Dow Jones Sustainabiliy Indexes
  • LBG Spain
  • The Global Compact
  • FTSE4Good
  • Carbon disclosure project
  • Corporate Responsibility Prime. Rated by oekom research

This is an electronic version of the 2012 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