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ferrovialGrowing Infrastructure
ferrovial App
FY 2017
Ferrovial overview1. Overview2. What are investors worried about?3. Looking ahead4. What makes Ferrovial different?
Ferrovial 2017 Results
Additional InformationA. Main value driversB. Main infrastructure assets
a. 407ETRb. Managed Lanesc. 407ETR vs Managed Lanesd. Airports
C. Capital Market Day (CMD) 2017 D. Historic dataE. Non Financial Information
Table of Contents
3
Solutions to CONGESTION
Narrowing THE GAP betweenpublic budgets & huge infrastructure needs
World leading private infrastructure provider present in toll roads, airports and cities
€12,208mn €1,341mn
NET CASH*
+13.5%€999mn €32,063mn
OP. CASH FLOW* ORDER BOOK**REVENUES
€13,858mn+11.3%
MARKET CAP
Figures as of FY 2017 (Market cap from Dec 2017)* Ex-Infrastructure projects ** Construction and Services, Including JVs
4
Design Financing OperatingBuilding Maintaining
ConstructionServices
EX-INFRASTRUCTURE PROJECTS
Toll Roads Airports
INFRASTRUCTURE PROJECTS
1. Ferrovial OverviewPresent in the whole value chain of infrastructure
5
26%
23%
38%
13%
1. Ferrovial OverviewCash Flow generation: Balanced Contribution
OPERATING CASH FLOW
Construction
Airports
Toll Roads
Services
2017 figures
EX-INFRASTRUCTURE PROJECTS
INFRASTRUCTURE PROJECTS
€277mn €237mn
€423mn €199mn
EBITDA
DIVIDENDS€515mn
€622mn
6
TOLL ROADS*
€4,729mn
* €844mn related to NTE 35W & I77, toll roads under construction.
NET CASH €1,341mn
NET DEBT €4,804mn
INFRASTRUCTURE PROJECTS
EX-INFRASTRUCTURE PROJECTS
2017 figures
ferrovial
Net Cash Position ex-InfrastructureNet Debt ring-fenced to infrastructure assets
NET DEBT €3,463mn
1. Ferrovial OverviewGroup Financial Structure
7
1. Ferrovial OverviewFocus on Six Main Markets
CANADAUK
SPAIN
POLAND
Construction
Airports
Toll Roads
Services
USA
AUSTRALIA
407 ETR toll road407 East Extension Phase I & II
Managed Lanes: NTE, LBJ, NTE35W, I-66, I-77Denver Great Hall ProjectCalifornia High Speed RailwayGrand Parkway
Heathrow airport, Aberdeen, Glasgow &
Southampton airportsCrossrail projectThames Tideway TunnelNetwork RailSevern Trent water
Warsaw 7 roads modernizationTurow power stationGdansk roads network
Toowoomba roadPacific highway roadMelbourne roads network
Autopista del SolTerrassa-Manresa toll roadMichelin plantsValdecilla Hospital
8
525
18,614
1999 Dec'17
Tariff freedomTariff flexibility80 years to maturity
CAGR (2007-17)Tariffs EBITDA
+9% +10.5% 100% payback first 10Y
LONG DURATION & PRICING FLEXIBILITY
Canada, Greater Toronto108 kms
Alternatives strongly congestedFast & reliableFree flow, fully electronicStrong collection security
43%, Equity method
DIVIDEND GROWTH (CADmn) LEVERAGE (X EBITDA) EQUITY VALUATION 100% (€mn)
1. Ferrovial Overview407ETR
120 135190
300
460
600680 730 750 790
845
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
27.1X
6.3x
1999 2017Analyst consensus
9
Dynamic tollingTariff freedomTariff flexibility
43 years to maturity
LONG DURATION & PRICING FLEXIBILITY
Texas, USA
Higher speed allowedFree flow, fully electronic
No collection risk
2 in operation: NTE 63%, LBJ 55%. Global Consolidation. 3 under construction: NTE 35W 54%, , I-66 50%, I-77 50%
+10.6%*NTE
+10.2%*LBJ
+32.6%*NTE
+37.4%*LBJ
TRANSACTIONS (mn) EBITDA (USDmn)
1. Ferrovial OverviewManaged Lanes
* Growth 2017 vs 2016
38
57
75
2015
2016
2017
59
80
2016
2017
20
24
27
2015
2016
2017
38
41
2016
2017
10
82% of passengers rate their experience in Heathrow as “Excellent” or “very good”
Best airport Western Europe (3rd consecutive yr)
Best airport for shopping (8th consecutive time)
Continued improvements in security, punctuality & bag-gage performance
471,082 annual flights204 destinations >30% UK exports (1.7mn tonnes)
Strong traffic performance in 2017+3.1%, 78mn passengers
Operating at over 98% capacity
Runway 3: Gov green light Oct 25th 2016
THE BUSIEST AIRPORT…
SERVICE STANDARDS STRONG EBITDA GROWTH (£mn)
… WITH HIGH SERVICE STANDARDS
2008-2016 CAGR : +9.8%
London, UK, Ferrovial stake 25%, Equity methodTime based separation
landing at Heathrow
1. Ferrovial OverviewHeathrow Airport
63%
80%
2007 2017
Punctuality
48%
82%
2007 2017
% Passengers rating Heathrow as Excellent or Very Good
756885 967
1,132 1,1541,421
1,559 1,605 1,683 1,760
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
11
Services: Recurrent CF generator with long duration order book, providing long term visibility
1. Ferrovial OverviewConstruction: Proven competitive tool for successful int’l bidding for complex greenfield infra projects
By Geography By Work
Video on Viaducto de Erques construction
Civil engineering, industrial, building & water projectsComplex projects & broad diversification between sectors
EBITDA 2017
BUDIMEX: Biggest Polish constructor
WEBBER: Leader in Texas road construction
F. AGROMAN: International strategic markets & Spain
Diversified portfolio in public & private sector (maintenance & operation of infra for transport, environment, industry, natural resources and utilities; provision of facility mgmt services)
Video on F. Services
BROADSPECTRUM: A platform to grow in Australia (& New Zealand)
SPAIN: stable profitability. Local government, environmental mgmt & treatment, infrastructures.
INTERNATIONAL: USA, Chile (BRS Americas), Poland & Portugal.
UK: Utilities, Facility mgmt, Highways, Consulting, Rail & environmental services
ORDER BOOK 2017
EBITDA 2017
By GeographyORDER BOOK 2017
20%
47%
28%
4%International
Broadspectrum
Spain
UK
66%
18%
16%Agroman
Webber
Budimex
77%
3%12%
7% Civil work
Residential work
Non-residentialworkIndustrial
12%
22%
45%
7%14% Spain
PolandUSUKRotW 47%
25%
20%
7%
UKSpainBroadspectrumInternational
12
2. What are investors worried about?
Ferrovial looks expensive in multiples
… but cheap in private transactions
Negative reaction to reported results
Growing results in Infrastructure & bottoming out in Contracting
Exposure to UK Services sector … is negligible in valuation
Impact from potential interest rate hike
… is positive. Our assets amplify economic growth
Cash Flow generation vs dividends to shareholders
Growing dividends from infrastructure
13
2. What are investors worried about?
Airports
Toll Roads
Much of our value is in Equity Consolidated assets
407 ETRHeathrowAberdeen, Glasgow & SouthamptonIrish, Portuguese & Greek toll roadsSerranopark, A66
2017 figures
… but contribute 0% to
Revenues & EBITDA
VALUE
(€510mn)
64%
51%
OCF
Ferrovial looks expensive in multiples
14
€932mn €1,733mn
2017 figures
PROPORTIONAL EBITDAFULLY CONSOLIDATED EBITDA
33% Infrastructure 67% Infrastructure
Services
Reported figures don’t reflect Ferrovial’s Business
Toll Roads ConstructionAirports
2. What are investors worried about?
21%
45%
34%
-1%8%
25%
36%
31%
Negative reaction to reported results
15
PROPORTIONAL EBITDAVALUATION
UK Services represents little of our results & valuation
3% of valuation 5% of EBITDA
Dec 2017
2. What are investors worried about?Exposure to UK Services sector
2017 figures
16
Our assets AMPLIFY ECONOMIC GROWTH
PRICING POWER leads to benefit from better economic conditions
Positive exposure to INFLATION
DERISKING at our US assets should lead to lower discount rates
95% of our infrastructure debt is FIXED, 92% at Consolidated level
We can REFINANCE MANAGED LANES DEBT at better rates
2. What are investors worried about?Impact from potential interest rate hike
17
EBITDA FROM CONTRACTING is bottoming out
GROWING DIVIDENDS from infrastructure projects
2. What are investors worried about?CF Generation vs dividends to shareholders
18
High complexity concessionsGreenfieldTraffic risk
Dynamic tolling
Texas, USA
WHAT WE FOCUS ON
Population growthEmployment growth
High household incomeCongestion
Value of time / willingness to pay
WHERE THIS MODEL WORKS
3. Looking ahead
Mitigating risks in contracting
Capital allocation focused on infra projects,
mainly in the US
NTE & LBJ to pay dividends in 2019-2020
19
PRICING POWER & FLEXIBILITY
VALUE CREATION FROM DERISKING & ROLLING
FORWARD
KNOW HOW IN DEMAND SEGMENTATION
ATTRACTIVE SHAREHOLDER REMUNERATION
UNIQUE TRANSPORTATION INFRASTRUCTURE ASSETS & CAPABILITIES
4. What makes Ferrovial different?
Ferrovial overview1. Overview2. What are investors worried about?3. Looking ahead4. What makes Ferrovial different?
Ferrovial 2017 Results
Additional InformationA. Main value driversB. Main infrastructure assets
a. 407ETRb. Managed Lanesc. 407ETR vs Managed Lanesd. Airports
C. Capital Market Day (CMD) 2017 D. Historic dataE. Non Financial Information
Table of Contents
21
c.€1bn Operating Cash Flow (pre-tax)
€781mn Activity Cash Flow (after tax)
€520mn FER shareholder remuneration
€1,341mn net cash position (€500mn hybrid bond issuance)
Excellent growth from our infrastructure assets
Traffic increased across the board
EBITDA grew at double digit in our main assets
Higher dividends from 407 ETR, LHR & AGS
Solid cash generation & financial position
ex-infra projects
Ferrovial 2017 resultsHighlights
Addressing contracting
Our infrastructure assets outperform in times of economic growth & inflation
Reported figures don’t fully reflect FER’s business. More information on assets consolidated under equity method
Share Price has underperformed vs peers
22
38%13%26%23%
Ex- Infrastructure Projects
49% DIVIDENDS FROM INFRA PROJECTS
AIRPORTS SERVICES
51% OCF FROM CONSTRUCTION AND SERVICES
TOLL ROADS CONSTRUCTION
Ferrovial 2017 resultsStrong Cash Flow Generation
OPERATING CASH FLOW pre-tax 2017Toll roads (Dividends) 277Airports (Dividends) 237Services 396Construction 134Others -46TOTAL 999
999
261
(102)(115)
520
Operating Cash Flow(pre-tax)
Net Investment Taxes Activity Cash Flow
Activity Cash Flow
€781mn
Shareholder remuneration
FROM OPERATING CF TO ACTIVITY CFOPERATING CF
BALANCED CONTRIBUTION TO OPERATING CASH FLOW
€mn
23
2017 % % LfLRevenues 461 -5.3% +15.7%EBITDA 320 +7.7% +23.8%
Traffic growth in main markets
Solid financial results in LfL terms:
• EBITDA +23.8%
• +€19mn positive impact from success fees
€277mn dividends from toll roads
• 407 ETR dividends: €262mn
Cintra acquired 6.3% in NTE & 3.6% in LBJ ($107mn)
• Ferrovial now holds 62.97% in NTE & 54.6% in LBJ
Mature asset rotation to crystalize value:
• Sale of 51% stake of Norte Litoral: €104mn
• Sale of 49% stake of Algarve: €58mn
TRAFFIC EVOLUTION
DIVIDENDS FROM TOLL ROADS
FY 2017 RESULTS TOLL ROADS
Canada407ETR: +2.6%
US*
NTE +10.6%LBJ +10.2%
SpainAusol I
+10.3%
€162mn cash in€98mn net capital gains
* Transactions
Ferrovial 2017 resultsToll Roads
217 224 242 244 262
25 31 25 46 15242 255 267 290 277
2013 2014 2015 2016 2017407ETR OTHERS
€mn
24
Equity method, Ferrovial stake 43%
Much better than expected 4Q 2017 traffic growth despite a difficult comparison in 2H 2017
1Q 2018 dividend announced (+9% vs 1Q 2017)
Global consolidation
• EBITDA +32.6%
• TRAFFIC* +10.6%
• TARIFF** +13.2%
• EBITDA +37.4%
• TRAFFIC * +10.2%
• TARIFF ** +20.5%
* Transactions** Average toll rate per transaction
Ferrovial 2017 results407 ETR Managed Lanes
NTE
LBJ
(CADmn) 2017 %Revenues 1,268 +11.7%EBITDA 1,104 +12.1%EBITDA mg 87.1%
Traffic (VKTs'000) 2,708,589 +2.6%Dividends 845 +7.0%
38
57
75
2015 2016 2017
EBITDA (USDmn)
59
80
2016 2017
EBITDA (USDmn)
25
Ferrovial 2017 results407 ETR: 58% good or very good value for money
7%
3%
3%
5%
4%
4%
3%
2%
2%
57%
56%
55%
51%
47%
43%
41%
38%
31%
5%
9%
9%
8%
7%
5%
8%
6%
6%
13%
20%
21%
22%
26%
31%
28%
25%
38%
Public transit
A typical fast food restaurant
407ETR
Your internet service
Airplane travel
your cell phone bill
your electricity bill
Taxis
Your cable TV bill
Very good good neither good nor bad not very good poor don't know / don't use
26
HAH• Traffic: 78mn pax (+3.1%)
• Revenues: +2.6% Higher traffic & retail, despite lower aeronautical tariffs
• EBITDA: +4.6% on cost control
• Higher-than-expected dividends: £525mn (£150mn extraordinary dividend).
AGS• Strong traffic growth (+4.9%)
• EBITDA +10.7%EBITDA since acquisition (2014): +35%
• Dividend: £146mn post refinancing (£75mn extraordinary)
Dividends received by FER: • €237mn (€134mn 2016).
Denver International Airport• 6th busiest airport in the US by passenger traffic• Redesign & retail operation of main terminal (34y)
(PAX mn)TRAFFIC
(Equity method, FER stake 25%)
(Equity method, FER stake 50%):
DIVIDENDS (100% £mn)
Ferrovial 2017 resultsAirports
2017 % LfLHeathrow 78.0 +3.1%AGS 15.1 +4.9%
Glasgow 9.9 +5.7%Aberdeen 3.1 +1.9%Southampton 2.1 +6.1%
375
150300 325
525
2015 2016 2017
HAH DIVIDENDSOrdinary Extraordinary
71
7560 64
146
2015 2016 2017
AGS DIVIDENDSOrdinary Extraordinary
27
Revenues +16.3% with FY integration of BRS
EBITDA margin 6% (5.4% in 2016)
Order book -11.3% LfL (selective bidding in UK)
€396mn Operating Cash Flow
UK: Still challenging environment
• EBITDA ’17 mg (3.5%) in line with guidance provided
• EBITDA’18E mg : ex-Birmingham (2% - 3%)
AUSTRALIA: FY integration vs 7months in 2016
• 2017: EBITDA mg 5.5% (RPC* contracts ended Oct 2017)
• 2018E: EBITDA mg 3% - 4%
SPAIN: solid performance, EBITDA margin at 10.4%.
Ferrovial 2017 resultsServices
€ million
2017 % % LfLRevenues 7,069 +16.3% +1.9%EBITDA 423 +30.2% +14.2%EBITDA % 6.0%Order book 20,918 -14.4% -11.3%
EBITDA 2017 BY BUSINESS
OPERATING CASH FLOW (pre tax)
302 289
395 396
2014 2015 2016 2017
20% 47% 28% 5%
UK Spain BRS International
* RPC: Regional processing centres
28
66% 18% 16%
Budimex Webber F. Agroman
Revenues (+11% LfL) with positive evolution in all areas
Lower profitability (EBIT margin 3.5%)
• Major projects in their initial phases.
• Order book with a lesser levels of complexity.
• Lower proportion of contracts with sisters companies.
• Losses incurred in 2017: mainly explained by two contracts (Scotland -€54mn & Colombia -€31mn).
Solid growth in Budimex: EBITDA +17.7%
Order book reached a record figure (+26.7%LfL)
• I-66 (Virginia, EUR1.9bn), Denver Airport (EUR541mn) & Grand Parkway (Texas, EUR784mn).
2018E performance: EBIT margin should evolve from around 1% (1Q) to 3 - 3.5% for FY 2018.
Ferrovial 2017 resultsConstruction
€ million
EBITDA 2017 BY BUSINESS
ORDER BOOK BY COUNTRY
2017 % % LfLRevenues 4,628 +10.3% +11.0%EBITDA 199 -41.8% -41.8%EBITDA % 4.3%EBIT 162 -48.1% -48.1%EBIT % 3.5%Order book 11,145 +22.6% +26.7%
12% 22% 45% 7% 14%
Spain Poland US UK RotW
29
• Capital gain from Norte Litoral & Algarve• Further provision registered at Autema
• 2017: Lower financial expenses (deconsolidations)• 2016: negative impact from cancellation of Ausol
derivative
• 2016: Chicago divestment impact
• 2017: higher contribution from HAH & 407ETR
• Higher profit at Budimex• Deconsolidation of SH-130 & Chicago and the
improved results from Managed Lanes
Ferrovial 2017 resultsProfit & Loss
€ million
IMPAIRMENT & DISPOSALS (2017)
NET FINANCIAL RESULT
EQUITY ACCOUNTED
TAXES
MINORITIES
2017 2016Revenues 12,208 10,759EBITDA 932 944Depreciation -375 -342Impairment & disposals 81 324EBIT 638 926Net Financial Result -311 -391Equity accounted 251 82EBT 578 617Taxes -71 -233Minorities -53 -7NET PROFIT 454 376
INFRASTRUCTURE PROJECTS
EXCLUDING INFRASTRUCTURE PROJECTS
2017 PNT excluding Hybrid bond: €841mn
Ferrovial 2017 resultsNet Debt Evolution
€ million
697484 553
-38
-355
253
-520-184
500
1,341
-48
Net Cash Dec'16 EBITDA ex infraprojects
Dividends fromToll Roads &
Airports
WCConstruction &
Services
Investment CF Divestments Shareholderremuneration
Interest, taxes &others
Hybrid Bond Net cash Dec'17
-4,963
449
-16-371 -215
73
-43
283
-4,804
Net debt Dec'16 EBITDA Working Capital Net Investment Dividends & Interest Capital Perimeterchanges/Divestments
Taxes, Forex & Other Net debt Dec'17
31
An adjustment of -€272mn has been recognized through reserves in the opening balance (Jan 01, 2017).
Early application in January 2017 of IFRS 15 Standard: Revenue from contracts with customers.
New standard implies more strict threshold for revenue recognition (approval/highly probable vs. probable) and the
evaluation of WIP/Debtor balance as of Dec.2016 according the new threshold.
The impact of this review has to be charged to equity.
Part of the adjustment can be recovered through P&L in the future if the threshold is finally reached.
Ferrovial 2017 resultsIFRS15 impact
32
Scrip dividend (reference dividend /share)
First scrip dividend (equivalent to 2017 complementary dividend)* 0.312Second scrip dividend (equivalent to 2018 interim dividend)* 0.402
TOTAL 0.714
up to €275mnor
up to 19m shares
(*) Calculation based on average closing price from 30th January to 5th February of 18.103€
Ferrovial 2017 resultsShareholder remuneration
20172018 SHAREHOLDER REMUNERATION PROPOSAL (*)
Share buybackup to €275mn
orup to 19m shares
0.3150.404
0.719
Ferrovial overview1. Overview2. What are investors worried about?3. Looking ahead4. What makes Ferrovial different?
Ferrovial 2017 Results
Additional InformationA. Main value driversB. Main infrastructure assets
a. 407ETRb. Managed Lanesc. 407ETR vs Managed Lanesd. Airports
C. Capital Market Day (CMD) 2017 D. Historic dataE. Non Financial Information
Table of Contents
34
15% 9% 64% 12%
24% 23% 14% 13% 21% 6%
REVE
NUES
>75% infrastructures
A. Business split vs. valuation
Construction
Airports
Toll RoadsServices
Construction Toll RoadsServices
Infra assets76% of valuation
4% of revenues
USA & Canada59% of valuation
14% of revenues
Infra assets are main value drivers (76%) with limited P&L contribution
Revenues FY 2017 results, Valuation December 2017
By GEOGRAPHYBy BUSINESS
VALU
ATIO
N
58% 38% 4%
16% 12% 59% 4%4%5%
35
Strong dividends in 2017• €277mn dividends from projects – 407 ETR €262mn
• €154mn invested in new projects
Traffic growth in main markets
New project awarded: I-66 (Virginia, US) • USD3bn managed lane project
• 35km along the I-66 corridor
• 50 years concession
Mature asset rotation: • Portuguese toll roads stake sale:
• 51% Norte Litoral, April (EUR104mn) • 49% Algarve, September (EUR58mn).
Focus mainly on North America (Canada & USA)Unique Assets
High complexity, free tolling, dynamic pricing & long term
B. Main infrastructure assetsCintra: One of the world leaders in open-competition highway concessions
DIVIDENDS FROM PROJECTS (€ mn)
159220 242 255 267 290 277
2011 2012 2013 2014 2015 2016 2017
36
B. Main infrastructure assets: 407 ETR
407
GREEN BELT
East Extension
407
Toronto Ring Road 108 km
High Density Population
401
37
Typical traffic on a Wednesday at 5:20 p.m.
Source: Google
407ETR
407ETR
407ETR
2. Main infrastructure assets407 ETR: The only non-congested road to cross Toronto
38
2. Main infrastructure assets407 ETR: Strong EBITDA growth … even with negative traffic & GDP
18.9
15.4 15.4
14.1
11.7
15.6
1.5
7.2
12.6
10.89.7 9.7
10.3
14.2
17.3
12.113.2
1.0
7.5
5.4
2.9
6.1
0
-1.7
5.5
-0.5
0.6 0.7
3.4 3.34.1
2.62.81.9
3.1 3.22.6
2.01.2
-2.7
3.4 3.01.9 2.0
2.5
1.2 1.2
2.9
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
EBITDA growth Traffic growth GDP growth (annual)
GDP growth source: World Bank
%
39
Strong dividend flowSharp increase in equity valuation
80 years to maturity2098
Analyst valuation up 35x
€mn
CASH GENERATION (1999 – 2017) EQUITY VALUATION 100%MATURITY
2. Main infrastructure assets407 ETR: Cash flow and valuation overview
100% pay-back in first 10 years
* Analyst Consensus Valuation
35xCash GenerationInitial equity invest.(62%) -326 mnDividends 2,023 mn10%Disposal 640 mn
NET CASH IN 2,337 mn
525
18,614
1999 Dec'17
40
103
164
2006 2017
456
1,268
2006 2017
120 135 190300
460600
680 730 750 790 845
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
B. Main infrastructure assets407 ETR: Financial Overview
CAPITAL EXPENDITURE
DIVIDENDS
NET DEBT / EBITDA x
REVENUES
OPEX
EBITDA
97 90
38
72 7788
70 7455
70 72
104
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
27.0X
6.3x
1999 2017
CAGR: 9.7%
CAGR: 4.3%
353
1104
77%79%
76%
80%82%
83% 83% 83% 83% 84%
87% 87%
2006 2017
CAGR: 10.9%
CAD mn
41
Perfect locationExcellent prospects for business growth
Sources:- Planning for Prosperity – November 2015 - (Globalization, Competitiveness and the Growth Plan for the Greater Golden Horseshoe) . Neptis Foundation.- No shortage of land for homes in the Greater Toronto and Hamilton Area – October 2016 – Land supply for future urban development designated by municipalities across the Greater
Golden Horseshoe to accommodate growth to 2031. Neptis Foundation.- Statistics Canada
GTA POPULATION4.5 mn
POPULATION EMPLOYMENT MEGAZONES
YESTERDAY
B. Main infrastructure assets407 ETR: Reasons for 407 ETR’s success
42
Perfect locationExcellent prospects for business growth
POPULATION AREA URBANIZEDBETWEEN 2006 & 2016
EMPLOYMENT MEGAZONES
407 avg PK hour speed : 100 Kph401 avg PK hour speed : 20 Kph
GTA POPULATION6.5mn
+44% vs 1996
TODAY
B. Main infrastructure assets407 ETR: Reasons for 407 ETR’s success
43
407ETR Regions includes: Toronto, Durham, Peel, Halton & YorkSource: Government of Ontario Places to Grow
POPULATION GROWTH (2021 – 2041)EMPLOYMENT GROWTH (2021 – 2041)
Future growth in population & employment to support traffic
TOMORROW
B. Main infrastructure assets407ETR: Reasons for 407 ETR’s success
44
407ETR Managed Lanes (NTE1-2)• 62.97%. Global consolidation• Meridiam (37%)• 52 years
Opened October 2014 (43 years remaining)
• Dallas-Fort Worth Metroplex, between Fort Worth & DFW Airport • 13 miles. 2 segments.
2 lanes per directionTollway within a freeway
• Predictability & reliable travel times (minimum speed 50m/hr)Higher speed allowed on NTE (60mph in free lanes, 70mph NTE)Safety & comfort
• Yes. No toll booths, fully electronic, free flow system• Freedom to set tariffs up to cap ($0.84, updated with inflation)
Cap is lifted if av. speed <50m/hr of cars >3,300pce/h (2 lanes)Dynamic tolling (tariffs can be changed every 5 minutes) Different tariffs depending on segment, direction, time, day..
• Not a regulated activity, but a contractual agreement• From TxDOT (who charges the drivers). No collection risk
• 5 initial years lock-up
• 43%. Equity consolidated• SNC Lavalin (17%), CPPIB (40%)• 99 years
Opened 1999 (80 years remaining)
• Greater Toronto Area (Ontario province)• 108kms. 24 segments
From 2+2 lanes up to 5+5 lanes per direction (dep on segment)Separate toll road
• Predictability & reliable travel timesAlternative routes are highly congestedAverage speed: 100km/h vs 40km/h on the alternativeSafety & comfort
• Yes. No toll booths, fully electronic, free flow system• Freedom to set tariffs
Penalty paid if traffic falls below thresholdTariffs can be changed every 30 daysDifferent tariffs depending on segment, direction, time, day..
• Not a regulated activity, but a contractual agreement• From drivers. Licence plate not renewed if tolls not paid.
• Strong growth (from CAD85mn 2005 to 750mn 2015)
Participation:Partners:Concession period:
Location:Length:
Benefits:
Open tolling?Tariff Policy:
Regulatory risk?Collection:
Dividends:
B. Main infrastructure assets407ETR vs Managed Lanes
45
A solution to congestion on “existing urban corridors”
Active management of “newly added capacity” through tollingthrough
Free
Lanes
Free
Lanes
Tolled LanesSpeed >50mph
“Express Tollway within an Existing Highway”
2. Main infrastructure assetsManaged Lanes
46
2. Main infrastructure assetsManaged Lanes
47
Toll Rate Cap 0.75 c/mi
Demand threshold 3300 pce/h2-lane sections
Speed Threshold 50 mi/h
12:00 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00Hour startingAnalysis by segment and direction
Freedom under the cap TOTAL FREEDOM Freedom under the cap
Speed
Demand
Toll Rate
0.88 $/mi
B. Main Infrastructure AssetsManaged Lanes: Toll rates – tariff threshold
48
• First privately-financed road development project of its kind to reach financial close in 2010.
• Texas’ third big recent road project to reach financial close since 2008.
• First combination of TIFIA and tax exempt PABs.
• First private activity bond issuance for a toll road.
• First time that a U.S.-based pension fund made a direct investment in a highway concession.
21%
51%
28%
25%
56%
18%
Figures in US Dollars
32%
59%
9%
• Very competitive capital structure in spite of the difficult market conditions.
• Strong portion of the debt from TIFIA program with its flexible amortizing structure during the first 25 years.
2.05 bn
427 mn
242 mn (57%)141 mn (33%)43 mn (10%)
1,048 mn
398 mn650 mn
573 mn
2.62 bn
672 mn
343 mn (51%)107 mn (16%)
44 mn (7%)178 mn (26%)
1,456 mn
606mn850 mn
490 mn
1.36 bn
430 mn
231 mn (54%)75 mn (18%)
124 mn (29%)
805 mn
274 mn531mn
126 mn
Total Investment:
Private Equity:
Cintra: Meridiam: DPFPS:APG:
Total Debt:
PABs:TIFIA:
Public Funds:
Financial structure
* In September 2017, Cintra, along with the other Managed Lanes partners (Meridiam and APG) has acquired DPFPS’s stake in NTE (10%) and LBJ (7%).Cintra acquired 6.3% in NTE and 3.6% in LBJ, and now holds 62.97% in NTE and 54.6% in LBJ
B. Main Infrastructure AssetsManaged Lanes: Financial Overview
49
12am 3am 6am 9am 12pm 3pm 6pm 9pm
2014 2015 2016 2017 Cap (2017)
Eastbound workday on segment 1
CAP linked to inflation2017 avg toll rate per transaction: ~USD3.4
Index 100
+13.2%
B. Main Infrastructure AssetsManaged Lanes
100
150
200
250
300
350
400
4Q'14 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17Revenue Txns Rev/Txn
100
120
140
160
180
200
220
240
4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17
Transactions Revenue Rev/Txn
GROWTH SINCE OPENING (LBJ)GROWTH SINCE OPENING (NTE)
TOLL RATES EVOLUTION (NTE)SPEEDS AT NTE
30
40
50
60
70
80
12am 3am 6am 9am 12pm 3pm 6pm 9pm
2011 2017 Non-Tolled Lanes2017 TEXpress Lanes
50
21% 52% 27%
63% 37%
CINTRA MERIDIAM
DESCRIPTION:
LENGTH:
CONCESSION PERIOD:
TARIFF POLICY:
Dallas-Fort Worth Metroplex, Major thoroughfares
between Fort Worth and DFW Airport
13 mile section (IH 820 & SH 183 in Tarrant County)
52 years (since 2009)
Open Road Tolling System (no toll booths) with a dynamic tolling
regime (every 5 minutes) to maintain at all times a minimum speed of
50 mph
● No toll-booths, fully electronic free flow tolling system
● Tollway within a freeway: Motorists will be provided with a choice of
driving in non-tolled GP lanes or paying a toll to bypass such GP
lanes
● Tolls setting to ensure minimum speed on new lanes
● As demand grows and capacity becomes scarce, pricing power
increases
● Physically separated from the GP lanes with controlled access
EQUITY DEBT PUBLIC FUNDS
Opened on October 2014, 9 months ahead of schedule
KEY CHARACTERISTICS
SHAREHOLDER STRUCTURE
FINANCIAL STRUCTURE
B. Main Infrastructure AssetsManaged Lanes: North Tarrant Express
51
24% 56% 19%
55% 28% 17%
CINTRA MERIDIAM
108KmElectronic toll
DESCRIPTION:
LENGTH:
CONCESSION PERIOD:
TARIFF POLICY:
IH 635 (Dallas County), the most populous county in Texas
13 mile section of the IH 635 and IH 35E
52 years (since 2009)
Open Road Tolling System (no toll booths) with a dynamic tolling
regime (every 5 minutes) to maintain at all times a minimum speed of
50 mph
● No toll-booths, fully electronic free flow tolling system
● Tollway within a freeway: Motorists will be provided with a choice of
driving in non-tolled GP lanes or paying a toll to bypass such GP
lanes
● Tolls setting to ensure minimum speed on new lanes
● As demand grows and capacity becomes scarce, pricing power
increases
● Physically separated from the GP lanes with controlled access
For further information on the concession, check the following links:https://youtu.be/9GMj3H5OovAhttps://youtu.be/pnNFZ8qJY-c
EQUITY DEBT PUBLIC FUNDS
APG
SHAREHOLDER STRUCTURE
FINANCIAL STRUCTURE
KEY CHARACTERISTICS
Opened on September 10th 2015, 3 months ahead of schedule
B. Main Infrastructure AssetsManaged Lanes: Lyndon B Johnson
52
32% 59% 9%
54% 29% 18%
CINTRA MERIDIAM
DESCRIPTION:
LENGTH:
CONCESSION PERIOD:
TARIFF POLICY:
2 “managed lanes” in each direction of the IH-35W, segments 3A and
3B (3B segment to be built by TxDOT)
10.2 mile section (segments 3A 6.2 miles and 3B 4 miles)
48 years (since 2013)
Open Road Tolling System (no toll booths) with a dynamic tolling
regime (every 5 minutes) to maintain at all times a minimum speed of
50 mph
● The corridor south to the 3A segment is currently ranked as the most
congested roadway in Texas.
● No toll-booths, fully electronic free flow system
● Tollway within a freeway: Motorists will be provided with a choice of
driving in non-tolled GP lanes or paying a toll to bypass such GP
lanes
● Tolls setting to ensure minimum speed on new lanes
● As demand grows and capacity becomes scarce, pricing power
increases
● Physically separated from the GP lanes with controlled accessEQUITY DEBT PUBLIC FUNDS
APG
SHAREHOLDER STRUCTURE
FINANCIAL STRUCTURE
KEY CHARACTERISTICS
Expected to open in 2H’2018
B. Main Infrastructure AssetsManaged Lanes: North Tarrant Express 35W
53
HAH
100% £mn
£525MN dividend in 2017 (£325mn in 2016)
RAB: positive impact from higher inflation
Traffic: +3.1% 2017 (14 consec monthly records)
EBITDA +4.6% & 61% EBITDA mg (59.9% in 2016).
(Equity method, FERROVIAL stake 25%)
AGS paid £146mn (2017, incl. £75mn in extraordinary dividends after its refinancing).
Traffic +4.9% in 2017 (15.1mn pax.):
EBITDA +10.7%, on traffic growth & greater cost control
Regional UK Airports(Equity method, FERROVIAL stake 50%)
*RAB: Regulated Asset Base
85Countries
25%Transfer
Share
3.1%Growth
93%Int’l
471kFlights78.0m
Passengers
204Destinations
B. Main Infrastructure AssetsAirports
Revenues EBITDA EBITDA %2017 Var. 2017 Var. 2017
Total AGS 209 +6.3% 92 +10.7% 43.8%Glasgow 122 +8.4% 58 +10.3% 47.6%Aberdeen 56 +0.6% 22 +8.0% 39.6%
Southampton 31 +9.1% 11 +18.3% 36.5%
HAH P&L 2017 Var.Revenues 2,883 +2.6%
EBITDA 1,760 +4.6%EBITDA % 61.0%Net debt 13,519 -1.2%
2017 Var.Glasgow 9.9 +5.7%Aberdeen 3.1 +1.9%Southampton 2.1 +6.1%Total AGS 15.1 +4.9%
54
REAL GDPNOMINAL INTEREST
RATESPRICES
(INFLATION)
TARIFFS
+ VALUE
VKT
+ VALUE
COST OF CAPITAL
- VALUE
“DISCOUNT RATE EFFECT”
EXCHANGERATE
+ VALUE
“CASH FLOWS EFFECT”
Sources: Paper of professor Carles Vergara-Alert
WHICH IS THE PREVAILING EFFECT…
AND HOW DOES IT AFFECT INFRA-ASSETS VALUE, ESPECIALLY 407 ETR & MLS?
REAL INTEREST
RATES
Central bank increases the nominal interest rate to meet
its target real interest rate (Taylor rule)
Output gapDemand and inelastic
supplyMonetary policy
C. CMD 2017: Interest & FX rate risksWhat the economic theory says…
55
Widespread belief among investors that “an increase in interest rates reduces the value of the infra-asset”.
In other words “INFRASTRUCTURE ARE BOND-LIKE ASSETS”
KEY CONCEPT VARIABILITY IN CASH FLOWSOn what variables does revenue depend?How are these variables affected by interest rates?
Sources: Paper of professor Carles Vergara-Alert
Bond: A string of future fixed set of payments
0.03 0.035 0.04 0.045 0.05 0.055 0.06 0.065 0.07 0.075 0.08 0.085 0.09 0.095 0.1 0.105 0.11
Duration
(Price/yield curve)VALUE
Ke7.5% 8% 8.5% 9% 9.5% 10% 10.5%4% 4.5% 5% 5.5% 6% 6.5% 7%
Valuation @ current constant cash flows
Infra asset: A string of future variable set of cash-flows
but…
-
C. CMD 2017: Interest & FX rate risksInterest Rate Risk Infra-Asset Valuation
56
WITH TRAFFIC RISK (TOLL ROADS)3. - Pre-fixed toll rate (CPI escalated) AUSOL (Spain) CF= (CPI, traffic)
4. - Tolls escalated to a maximum (GDP per capita) “Chicago Skyway”, ITR (USA) CF= (CPI, traffic, GDP per capita)
5. - Free-rate tolling mechanism 407 ETR (Canada), ML (USA) CF= (CPI, traffic, willingness to pay)
WITHOUT TRAFFIC RISK (NON-TOLL ROADS)1. - Availability payment (no CPI adjusted) Towoomba (Australia) CF=K
2. - Availability payment (CPI adjusted) Norte Litoral ( Portugal) CF= (CPI)
“INTEREST RISK METER OF CONCESSION VALUE”
Sources: Paper of professor Carles Vergara-Alert
High Mid Low Very Low None
1 2 3 4 5
94%Cintra´s
Value
C. CMD 2017: Interest & FX rate risksCategories of infra-assets as per variability of cash flows
57
1 Assumptions of the exercise: 100 “currency units” of investment, 50 years concession, Beta=1.0, ERP=5%, Leverage = 50%, Debt premium = 4.0%, Tax rate 30%.
Valu
e
Project i.e.: TOOWOOMBA
Significant value decrease
(Bond proxy)
0%Cintra´s Value
1
RISK FREE RATE
Project i.e: AUSOL
3%Cintra´s Value
Stablevalue
3
Valu
e
RISK FREE RATE
Project i.e.: NORTE LITORAL
3%Cintra´s Value
Slight value decrease
2
Valu
e
RISK FREE RATE
Project i.e: CHICAGO SKYWAY
0%Cintra´s Value
Modest value increase
4
Valu
e
RISK FREE RATE
-Capture consumer’s surplus generated by CPI/GDP per capita
-Inability to capture “optimal price”
Sources: Paper of professor Carles Vergara-Alert
AVAILABILITY
AVAILABILITY & CPI Adj
DEMAND RISK & CPI Adj
DEMAND RISK & CPI, GDP Adj
C. CMD 2017: Interest & FX rate risksEffect of interest rates on asset valuation by category1 (I)
58
RISK FREE RATE
Valu
e
TARIFFS - Maximum discretional adjustment- Ability to capture the consumer’s surplus
generated by higher willingness-to-pay
PROJECT I.E.: 407 ETR
Optimal price Sub-optimal price
94%Cintra´s Value
TRAFFIC - Traffic ( VKT ) increases when the real GDP increases
5th category is the only one that: - Is able to reach “optimal tariffs” and to extract full value from a rise
of interest rates- Has a “cash flow effect” much higher than the “discount effect”
Sources: Paper of profesor Carles Vergara-Alert
Demand risk & Total free-rate tolling
THE EXCHANGE RATE OPERATES AS BONUS EFFECT IN OUR CANADIAN-US ASSET’S VALUE:− Short-term: next 18-24 month of dividends fully hedged− Long-term: from a € based investor, US and Canada provided a better future economic outlook, that will lead us to a likely
revaluation
5
C. CMD 2017: Interest & FX rate risksEffect of interest rates on asset valuation by category (II)
59
NOT CPI INDEXED(i.e. Toowoomba)
HIGH COMPLEXITY
LOW COMPLEXITY
From value to standpoint … very different “animals” fall within the CATEGORY OF “HIGHWAY CONCESSION”
AVAILABILITY PAYMENT PROJECTS DEMAND RISK PROJECTS
CPI INDEXED(i.e. Norte Litoral)
CPI INDEXED TARIFFS(i.e. Ausol)
TARIFFS LINKED TO REAL ECONOMY
GROWTH(i.e. Chicago Skyway)
FREE TARIFF FLOW(i.e. 407 ETR & MLs)
(1) After 10 years of operation, if currently expected CF´s are met(2) Ferrovial price per share impact: value generated / Ferrovial number of shares as of 31.12.16 (732.5M)
Sources: Cintra Infraestructures, S.E.
VERY HIGH UPSIDE OF UNTAPPED VALUE
Long remaining concession periods, back-ended CF’s with high expected bid IRRs
• 407 ETR in 10 years (1) 1.6x Value at Present +7 €/ Fer. Sh(2)
• ML’s in 10 years (1) 5.5x Equity Committed 11 € / Fer. Sh(2)
FOCUSED ON HIGH COMPLEXITY CONCESSIONS
MOST of Cintra portfolio
• In terms of Equity Value: 94%
• In terms of Equity Committed: 74%
C. CMD 2017: Different Concessions Models
60
LOW COMPLEXITY CONCESSIONAVAILABILITY PAYMENT CPI INDEXED
Long concession term (99 years)
THE BID IRR: the higher the Bid IRR, the larger
the room to reduce the rate of discount
THE CONCESION TERM: the longer the term, the
higher the value produced by late cash flows with
almost no value at present
THE CASH FLOW PROFILE: the more back
ended, the higher the value produced by late very
high cash flows with almost no value at present
Low Bid IRR(11%)
Front ended CF’s (Low rev CAGR (2%))
Short concession term (25 years)
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039
…
HIGH COMPLEXITY CONCESSION407 ETR TYPE
…
WHAT MAKES THE CF STREAM PROFILE MORE BACK ENDED?
1. HIGHER TRAFFIC GROWTHS: - better regional economic growth rates- lower relative size of toll roads vs free alternative
2. HIGHER TARIFF GROWHTS: - higher willingness to pay (increased with congestion levels and disposable income)
High Bid IRR(15%)
Back ended CF’s (High rev CAGR (6%))
Sources: Cintra Infraestructures, S.E. analysis
O&M + Capex + Tax
Debt Service
Equity distributions
Revenues + ReserveAccounts releases
C. CMD 2017: Different Concessions ModelsWhat makes the difference?
61
A HIGHWAY CONCESSION: a contractually defined set of rights and obligations with regards to vehicles moving in a certain route during a period of time
Basic Rights: collect tolls (or other payments) Basic Obligations
− Design and build the highway (construction phase)− Ensure safe trips (operation phase): design, build, finance, operate and maintain
FINANCIALLY: string of cash flows that reflect annual monetary value of contractual rights net of obligations
Price paid for these cash flows at the initial moment is determined by the bidding IRR and their expected values
The premium (over the RFR) of this IRR reflects the risks of the project undertaken by the sponsors If the concession is tendered under perfect competition, price paid equals value acquired: no value is
created nor destroyed at this specific moment
THEN… WHAT HAVE WE CREATED?
A potential value that sponsors will progressively crystallize in the future
C. CMD 2017: Highway Concession Business Value CreationHow does the highway concession business create value for shareholders?
62
THE NORMAL WAY: meeting expected cash flows as we put risks behind, that is, DE-RISKING or reducing the market discount rate of the business as projects mature
AN IMPORTANT “NICE TO HAVE”: cash flow outperforming original expectations Main objective of an operator: managing the asset to maximize cash flows: that is optimizing the asset through Premium
Operation ) This is, not the primary source of value for shareholders in concessions won under competition
Risks
Disc.Rate
CONSTRUCTION
Design & ConstructionCost environmental, RoW
Traffic / RevenueInitial traffic, ramp up, long
term variationsFinancial Closing
Operation MaintenanceInterest Rates
10% - 15%
RAMP-UP
--
Traffic / RevenueRamp up, long term variations
RefinancingOperation Maintenance
Interest Rates
8% - 13%
GROWTH / MATURITY
--
Traffic / RevenueLong term variations
-Operation Maintenance
-
4% - 8%
RISK
CONCESSION TERM
Sources: Cintra Infraestructures, S.E.
C. CMD 2017: Highway Concession Business Value CreationHow do sponsors create value?
63
VALU
E*
* NPV of remaining cash flowCONCESSION TERM
186
812
1,058
1,426
1,662
1,702
1,296
Yr 0@14.5%
Const. end@12%
Yr 10@7.5%
Yr 15@7%
Yr 20@6%
Yr 25@5.5%
Yr 30@5%
Yr 40@4%
Yr 47
THE ROLLING FORWARD EFFECT: progressive increase of value as we get closer to back ended cash flows
Sources: Cintra Infraestructures, S.E.
VALUE CREATION: DERISKING & ROLLING FORWARD
€100M invested in one of our ML’s
C. CMD 2017: Highway Concession Business Value CreationHow do sponsors create value?
64
-27 -58 -70 -69 -46
461 596399 424 515
663 538560 640 530
2013 2014 2015 2016 2017
Op. CF (Construction& Services)
Dividens from infra(Toll roads & Airports)
Holding & Others
Operating CF ex-infra projects (before tax.)
EBITDA & Margins
• Net cash at parent company
• Net debt at infra projects level (non recourse to parent company)
Revenues
Net debt
OCF ex-infra ND
D. Historical dataHistoric consolidated figures: 2013-2017
€mn
1,097 1,076 889 995 999
Op. CF:Construction 304 236 272 245 134
Services 359 302 289 395 396
Dividends:Toll Roads 242 255 267 290 277
Airports 219 341 132 134 237
Holding & Others -27 -58 -70 -69 -46
-7,015 -7,862 -6,057 -4,963 -4,804
1,663 1,632 1,514 697 1,341
2013 2014 2015 2016 2017
N. CASH EX-INFRA
INFRA PROJ.
-5,352 -6,230 -4,542 -4,266 3,463
2,590 2,709 2,694 2,629 2,837
5,577 6,093 7,006 8,1299,371
8,166 8,8029,701
10,75912,208
2013 2014 2015 2016 2017
Dom estic International
934 983 1,027 944 932
11.4%11.2%
10.6%
8.8%
7.6%
7 .0 %
8 .0 %
9 .0 %
1 0. 0%
1 1. 0%
1 2. 0%
0
2 00
4 00
6 00
8 00
1 ,0 00
1 ,2 00
2013 2014 2015 2016 2017
EBITDA Margin
65
108
35 32 21 27 1641 35
105
48 41
130 119152
407
ETR
407
ETR
E.I
407
ETR
E. I
I
NTE
LBJ
NTE3
5W I-77
I-66
Auso
l I
Aute
ma
Toow
oom
ba
Alga
rve
Nort
e-Li
tora
l
Buca
ram
anga
80
27 2943 43 43 40
48
2818 25
12 1326
407
ETR
407
ETR
E.I
407
ETR
E. I
I
NTE
LBJ
NTE3
5W I-77
I-66
Auso
l I
Aute
ma
Toow
oom
ba
Alga
rve
Nort
e-Li
tora
l
Buca
ram
anga
2,078 km 26 concessions
10 countries
(Km’s)
Dividends received Managed Investment
Concession lengthYears to maturityYears
D. Historical dataToll roads figures: 2013-2017
€mn
217 224 242 244 262
25 31 25 46 15242 255 267
290 277
2013 2014 2015 2016 2017
407-ETR Others
39%
21%
6%
7%
27%
USA
Canada
Spain
UK & Ireland
Rest of World
66
1,4411,541 1,608
1,6831,760
2013 2014 2015 2016 2017
2013 2014 2015 2016 2017
Heathrow 72.3 73.4 75.0 75.7 78.0AGS 12.6 13.3 14.0 14.4 15.1
Glasgow 7.4 7.7 8.7 9.4 9.9
Aberdeen 3.5 3.8 3.5 3.1 3.1
Southampton 1.7 1.8 1.8 2.0 2.1
Dividends received from airports (€mn)
Heathrow (25% stake)
2 runways204 destinations85 countries471K flights
*AGS (50% stake)
AberdeenGlasgowSouthampton
Traffic mn passengers HAH EBITDA (£mn )
Heathrow shareholdersPortfolio Heathrow
*Ferrovial increased its stake in AGS from 25% (held through HAH) to 50% in 2014.
Capital expenditure (mn £)
Ferrovial Qatar Brittania GIC CICAlinda USS
D. Historical dataAirports figures: 2013-2017
96153
38 38
84
219
341
132 134
237
2013 2014 2015 2016 2017
AGS
HA H
1,283
853
627674 687
2013 2014 2015 2016 2017
25% 20% 12.6% 11.2% 11.2% 10% 10%
67
343 349393
342
199
8.4% 8.8% 9.2%8.1%
4.3%
0 .0 %
1 .0 %
2 .0 %
3 .0 %
4 .0 %
5 .0 %
6 .0 %
7 .0 %
8 .0 %
9 .0 %
1 0. 0%
0
5 0
1 00
1 50
2 00
2 50
3 00
3 50
4 00
2013 2014 2015 2016 2017
EBITDAMargin
2017
2017
Operating & investment CF (ex-projects)
Backlog
Revenues
EBITDA & Margins
OCF ex-infra(before tax)
2017*”Ferrovial Agroman” unit was created in 2013, previously,
“Other markets” was the relevant unit.
D. Historical dataConstruction figures: 2013-2017
€mn
304236 272 245
134
2013 2014 2015 2016 2017
EBITDA ex-project 329 335 380 329 186Working Capital & others -25 -99 -109 -87 -57
Operating Cash Flow (b. tax.) 304 236 272 245 134Investment Cash Flow 25 -32 -30 -74 9
2,274 2,116 2,419 2,217 2,387
1,099 1,1521,226 1,270 1,457
690 673643 708
7844,064 3,942 4,287 4,194
4,628
2013 2014 2015 2016 2017
*F.Agroma n Budimex Webber
*F.Agroman 11.9% 11.1% 9.8% 8.4% 1.3%
Budimex 4.1% 4.8% 5.6% 8.7% 9.0%
Webber 3.9% 8.7% 13.8% 6.2% 4.6%
17% 83% Dom esticInternational
5,729 5,785 5,807 5,9777,507
1,044 1,426 1,974 2,027
2,4671,095 880 950 1,084
1,1717,867 8,091 8,731 9,088
11,145
2013 2014 2015 2016 2017
*F.Agroma n Budimex Webber
12% 88%Dom estic
International
16% 3% 77%ResidentialIndustrial ~ & OtherCivil work
68
Operating & investment CF (ex-projects)
Backlog with JV’s
Revenues
EBITDA & Margins
2017
OCF ex-infra
(before tax)
D. Historical dataServices figures: 2013-2017
€mn
359302 289
395 396
2013 2014 2015 2016 2017
EBITDA ex-project 264 321 237 241 338
Dividends received 28 19 78 49 33
Working Capital & others 67 -38 -27 106 25
Operating Cash Flow (b. tax.) 359 302 289 395 396
Investment Cash Flow -528 -92 -207 -658 -120
1,421 1,599 1,677 1,762 1,898
2,1632,717 3,103 2,732 2,501
2,206
3,6564,401
4,897
6,0787,069
2013 2014 2015 2016 2017
Spain UK Broadspectrum International
11,18815,298 16,323
11,8985,260
6,330
6,736 6,140
5,741
9,878
6,1174,246
17,749
22,369 22,80024,431
20,918
2013 2014 2015 2016 2017
UK España Broadspectrum Internac ional
322387
312325
423
8.8% 8.8%
6.4%5.4%
6.0%
0 .0 %
1 .0 %
2 .0 %
3 .0 %
4 .0 %
5 .0 %
6 .0 %
7 .0 %
8 .0 %
9 .0 %
1 0. 0%
1 1. 0%
1 2. 0%
0
5 0
1 00
1 50
2 00
2 50
3 00
3 50
4 00
2013 2014 2015 2016 2017
EBITDA
Margin
EBITDA Margin
España 12.4% 10.7% 10.7% 10.7% 10.4%
UK 6.3% 7.7% 3.9% 1.5% 3.5%
34% 66%Domestic
International
69
EMPLOYEE COMMITMENT & EXPERIENCE: focus on attracting & hiring the best talent to become an employer of choice in markets where Ferrovial operates.
TALENT MANAGEMENT: help each employee to reach their maximum potential while promoting the best professional opportunities.
• Play the Future Project: 6 training itineraries linked to new technologies (Big Data, IoT…)
• Awareness Sessions Cycle: conferences focused on emerging technologies & innovation
• Executive Forums: similar to Awareness Sessions, completed with teamwork to describe the critical capabilities that must be reinforced or created to position the company as a key player.
CULTURE: Ferrovial, with more than 110 nationalities in its workforce, shows a firm commitment to effective equality of opportunities, focused on three areas (Strategic Diversity Plan): gender, generational and multicultural.
People Say on pay FY17 figures
CHAIRMAN & CEO REMMUNERATION
27% 44% 29%VARIABLEFIXED LONG TERM INCENTIVES
* BOARD REMMUNERATION
* VARIABLE REMUNERATION (TARGET 125%, MAXIMUM 225%)
* LONG -TERM REMUNERATION based on delivery of share plans structured into multi-year cycles (3y) overlapping,which turn into shares at the end of the cycle.
Metrics MAX MINEBITDA/avg earning assets (70%) ≥10.5% <9%
Total Shareholder Return (30%) Among top 5 positions Between position 11th & 18th
FER compares with IBEX-35 members & is in the median of non-executive directors remuneration.
EMPLOYEE COMMITMENT & EXPERIENCE, TALENT MANAGEMENT & CULTUREPromote a collaborative, flexible and inclusive culture based on meritocracy, tooffer unique and challenging experiences, forming experienced teams committedto corporate values.
BY BUSINESS UNITS
SERVICES81%
AIRPORTS0.05%TOLL ROADS1%CONSTRUCTION17%
BY COUNTRIES
CEOCHAIRMANQUALITATIVE QUANTITATIVE QUANTITATIVEQUALITATIVE
50% 50% 60%40%
• Board & Executive Committee operations
• Corporate Governance• Strategic Plan• Successions• Institutional Relations
• Strategic Plan compliance• Employee Health & Safety, measured using accident rates. • Promoting Innovation & CSR. • Professional teams development to guarantee stability in
mgmt. & achievement of organization’s strategic objectives• Adjustment & monitoring of procedures linked to assuming
controlled risks. • Relationships with stakeholders
95,978 600,000h88%training provided
(10Y of Summa University)Employees
(71% men; 29% women)Out of all the employees
consider Ferrovial a good place to work
TSR COMPANIES: Serco, Strabag, SNC-Lavalin, Skanska, AENA, ACS, FCC, Eiffage, VINCI, KIER, Abertis, Transurban, B. Beatty, Fraport, ADP, Ferrovial, Carillion, OHL
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INNOVATION PROJECTS
ACKNOWLEDGEMENTSFerrovial has been included in the DJSI (Dow Jones Sustainability Index) for the last16 consecutive years, at a global level; in the FTSE 4Good index for the past 13, in theCarbon Disclosure Project for the past 6, and is also a member of Stoxx and MSCIGlobal Sustainability Index.
Ferrovial continues its efforts to offer services and infrastructures that respond tochallenges such as climate change, water footprint management, the energy crisis,the reuse of waste and the loss of biodiversity, to create value by reducing theenvironmental impact and discover new business opportunities.
Ferrovial believes that innovation is a difference maker that enables the companyto lead transformation of infrastructures and services, providing customers andusers with solutions that efficiently, sustainably and safely contribute to well-being and progress of society.The company works on new business models that increase offers of products &services; improvement of operational efficiency & cross-cutting managementprocesses and increase of digital skills of employees.New technologies (robotics, artificial intelligence, IoT and Big Data) arehaving a significant and fast impact on all sectors. To respond to thesechallenges, Ferrovial is accelerating its process of implementing innovativesolutions, within its open innovation strategy.
INNOVATION IN 2017
>110 €47mn30R&D investmentR&D developed projects Pilot projects
developed with Startups
EnvironmentInnovation
-28.4%REDUCTION OF CO2 EMISSIONS
ELECTRICITY FROM RENEWABLE SOURCE
-10.2% 36% -35.4%IN RELATIVE TERMS
(tCO2 eq/€mn) (2009-2017)
IN ABSOLUTE TERMS (2009-2017)
NEW REDUCTION2020 TARGET
WATER FOOT PRINT
• Business Water Index (BWI): 5,482,743.Water consumption and discharge in activitiescarried out by the business units
• Water Treatment Index (WTI): -199,656,213.Cadagua's water treatment processes impactand those of F. Services & Amey's leachatetreatment in landfills.
• Water Access Index (WAI): -535,156;Impact of Social Action projects for watersupply to communities in developing countries.
BIG DATA AND MOBILITY TRENDSUse of Big Data is a competitive advantage when analyzing newprojects & optimizing existing ones. In Europe, Dallas & Canada tollroads, projects are already underway to analyze impact ofautonomous and connected vehicles.
INTERNET OF RADIO LIGHT IN TUNNELSLIFI (Light Fidelity) technology to improve communications incomplex & difficult to access works (tunnel/confined areas).Communication solution based on wireless tech. that transmitsultra-fast data through a beam of light.
ZITY CARNew car sharing mobility service in Madrid that has an electricvehicle with 400km autonomy and allows citizen to drive furtherand use the vehicle for longer. Recharged with 100% renewableenergy & highest safety certification.
OF THE TOTAL CONSUMED
FY17 figures
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CommunityHealth & Safety FY17 figures
Ferrovial works to create risk-free environments for all its employees, as well as forusers of infrastructures and services by developing action plans under the premiseof the target zero principles and that any accident can be avoided.
HEALTH & SAFETY TRAINING (hrs)
-9.3%
FREQUENCYINDEX(1)
-6.1%
SEVERITYINDEX(2)
753,818
HEALTH & SAFETY INSPECTIONS & AUDITS
79,058+2.4mn since 2015
(1)YoY% in index: number of accidents occurring during working hours leading to days lost for 1 mn hrs worked. (2)YoY% in index :number of days lost as a result of occupational accidents for every 1,000 hrs worked.
PRINCIPLES OF HEALTH & SAFETY STRATEGY
Ferrovial's Health & Safety strategy, together with the firm commitment frommanagement and all employees, have improved the company's accident rates.
Health & Safety is a Senior Management priority, and it is fully committed.
• Risk evaluation & planning: reliable risk and hazard evaluation processimplemented in all work centers to establish the organization, planning andcontrol systems needed to facilitate a safe work environment.
• Compliance with legislation & other standards in force in the countries whereFerrovial operates, paying attention to best practices when reasonably viable.
• Effective & consistent communication, facilitating communication channelsto encourage employees to contribute to a positive performance in matters ofOccupational Health & Safety, promoting safety culture throughout Ferrovial.
• Training & involving workers: Ferrovial has spent years increasing its trainingefforts to involve workers increasingly in common goal of creating risk-freeworkplaces.
• Measuring & monitoring performance: to promote consistent and positivework safety culture, a reporting system is needed that identifies unsafesituations or actions before they occur and implement the necessary preventivemeasures to avoid any type of accident.
• Innovation: new standards of performance, technology & safety measures canbe developed over innovation, contributing to Target Zero goal achievement.
UNITED NATIONS PARTNER IN SUSTAINABLE DEV’T& MEMBER OF PRIVATE SECTOR ADVISORY GROUP
In its commitment to the scope of Sustainable Development Goals (SDG), Ferrovialactively participates in the community through the development and execution ofsocial programs to significantly improve people's lives. The company has a key role inthe social and economic development of the countries where it carries out activities.
305
COMMUNITY SUPPORT PROJECTS
212,605
BENEFICIARIES IN WATER &SANITATION PROJECTS
4.3
COMMUNITYINVESTMENT (M€)
Since 2011, Ferrovial has had a program to cooperate in the development of Social Infrastructures, whichfacilitates access to water in Africa and Latin America. Ferrovial, together with NGOs and Local Authorities,develops water and sanitation infrastructures. Company employees in turn participate as volunteers,contributing with their knowledge in the country where the intervention is being carried out
Since 2005, employees decide to contribute to social projects, which is doubled by Ferrovial. In 2017, threeprojects chosen: start-up of Day Center for Children’s Villages in Málaga, rehabilitation of a medical clinic inHaiti with Manos Unidas and caring for leprosy patients in India with the Fontilles Association.
Ferrovial supports refurbishment & reconditioning of offices set up for distributing food & delivering socialaid packages to underprivileged groups. In 2016, Ferrovial provided support with World Vision España toimprove conditions in 6 food distribution centers (Madrid, Seville, Mieres, Valencia & Barcelona).
148,845 BENEFICIARIES
€1,605,930INVESTED
€597,894INVESTED
38,467BENEFICIARIES
€5,030,398INVESTED
214,549BENEFICIARIES
22PROJECTSSOCIAL INFRASTRUCTURES
STRONGER TOGETHER
COMMUNITY ENGAGEMENT IN SPAIN
COMMUNITY SUPPORT PROJECTS INVESTIMENT IN THE COMMUNITY
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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.
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