Overview

Ferrovial results January – December 2023

• 407 ETR’s traffic grew by +14.6% in 2023 vs 2022, primarily due to an increase in mobility and more people commuting to work in 2023 vs 2022, when all COVID-19 related restrictions were lifted (Q1 2022). In 2023, traffic growth was also supported by an increase in rehabilitation construction works on Highway 401. Revenues reached CAD 1,495 million up by +12.7% given the positive trend in traffic volumes.
• Managed Lanes registered strong traffic growth in 2023. All Managed Lanes (MLs) posted solid average revenue per transaction growth vs. 2022 with Texan MLs exceeding 2023 Soft Cap update (+6.5%): NTE 35W +15.4%, LBJ +10.7% and NTE +9.0%. This same KPI grew by +28.1% at I-77 where no price cap is in place. I-66 reached an average revenue per transaction of USD 5.5 for 2023 with both, traffic and revenue ramping up.
• December traffic at Heathrow and Dalaman was above pre-pandemic levels. Heathrow registered a strong recovery with 79.2 million passengers in 2023 (+28.6% vs 2022 and -2.1% vs 2019), the third highest year in Heathrow’s history. AGS traffic evolution performed well vs 2022 (+13.5%), while traffic vs 2019 continued to improve (-23.4%). Dalaman saw a strong performance (+15.5% vs 2022), outperforming 2019 (+6.8%).
• Construction adjusted EBIT stood at EUR 77 million vs EUR 63 million in 2022, mainly driven by Budimex performance (Adjusted EBIT +41.0%) partially offset by completion works on large projects in their final stages in the US and the negative impact from a landslide in Colombia (Ruta del Cacao). Adjusted EBIT margin reached 1.1% vs. 1.0% in 2022. The order book reached EUR 15,632 million (+5.5% LfL growth), a new all-time high, not including pre-awarded contracts of c.EUR 1.9 billion.
• Solid financial position: high ex-infrastructure project companies liquidity levels reaching EUR 5,387 million and Consolidated Net Debt of ex-infrastructure project companies at EUR -1,121 million, positively impacted by EUR 741 million dividends collected from infrastructure projects, including the first year of dividend distribution from NTE35W (EUR 251 million) and a significant improvement in Cash flows from operating activities in Construction. Cash consumption driven by investments (EUR -454 million) due to equity injections into new projects (I-66, NTE 3C and New Terminal One), as well as shareholder remuneration (EUR -250 million).
• Other 2023 highlights:
  • Agreement reached for the sale of c.25% stake in FGP Topco (Heathrow’s parent company) for GBP 2,368 million,although the completion of the deal is subject to the satisfaction of tag-along conditions.
  • Sale completed of 89.2% stake in Azores in December 2023, as part of our mature asset rotation strategy.
  • NTE 3C (NTE35W extension) opened to traffic in June 2023 (ahead of schedule).
  • Since June 16, 2023, Ferrovial’s shares are simultaneously listed in both Spain and the Netherlands stock markets.

*Non-IFRS financial measure. For the definition and reconciliation of the most directly comparable IFRS measure, refer to Alternative Performance Measures of the Integrated Annual Report.

CONSOLIDATED RESULTS

• Revenues at EUR 8,514 million (+13.2% LfL growth) on the back of higher Toll Roads revenues (+42.1% LfL growth) and higher Construction revenues (+9.9% LfL growth).
• Adjusted EBITDA reached EUR 991 million (+40.6% LfL growth) thanks to a higher contribution from Toll Roads (+48.3% LfL growth), particularly US Toll Roads which posted an adjusted EBITDA of EUR 741 million. Along with greater contribution from Construction (+19.6% LfL growth).

RESULTS BY DIVISION

Toll roads: rose by +42.1% LfL growth and adjusted EBITDA by +48.3% LfL growth. Adjusted EBITDA stood at EUR 799 million.

• Texas Managed Lanes: showed strong traffic growth in 2023 vs 2022, NTE +9.0%, LBJ +9.2%, and NTE 35W +20.1%, the latter positively impacted by the opening to traffic of Segment 3C on June 20. The traffic at NTE35W excluding Segment 3C increased by +6.9% in 2023. NTE & NTE35W traffic was above pre-pandemic levels (2019), while LBJ traffic remained below, mainly due to the construction works underway in the area. All MLs posted significant average revenue per transaction growth vs. 2022: NTE 35W +15.4%, LBJ +10.7% and NTE +9.0%.
  • NTE reported revenues of USD 289 million (+19.0%), aided by higher traffic and higher toll rates. Adjusted EBITDA reached USD 255 million (+19.5%). Adjusted EBITDA margin stood at 88.3% (vs 87.9% in 2022).
  • LBJ revenues stood at USD 193 million (+20.9%), helped by higher traffic and higher toll rates. Adjusted EBITDA at USD 158 million (+23.5%) with Adjusted EBITDA margin of 81.9% (80.1% in 2022).
  • NTE 35W reached revenues of USD 234 million (+39.4%), led by higher traffic (Segment 3C opening) and higher toll rates. Adjusted EBITDA reached USD 195 million (+40.3%) with Adjusted EBITDA margin of 83.1% (82.6% in 2022).
• I-77 traffic increased by +18.4% vs 2022. Revenues reached USD 91 million (+50.5% vs. 2022) with significant growth in toll revenue per transaction (+28.1% vs 2022). Adjusted EBITDA stood at USD 66 million, and Adjusted EBITDA margin at 72.0% (62.9% in 2022).
• I-66 showed revenues and traffic ramping up, with USD 167 million of revenues in 2023. Adjusted EBITDA reached USD 129 million with Adjusted EBITDA margin at 76.9%.
• 407 ETR recorded higher traffic in 2023 (+14.6% vs 2022), due to an increase in mobility. Traffic growth was supported by an increase in rehabilitation construction works on Highway 401. Revenues reached CAD 1,495 million increasing by +12.7% given the positive trend in traffic volumes when restrictions were lifted in Q12022. EBITDA reached CAD 1,284 million (+12.7%) with EBITDA margin at 85.9%.

Airports: traffic improved notably in 2023 vs 2022 at all of the assets. Heathrow 2023 traffic ended up slightly below 2019 figures (-2.1% ).

• Heathrow revenues increased by +26.6% and adjusted EBITDA was up +32.3% vs 2022. Heathrow welcomed 79.2 million passengers in 2023, increasing by +28.6% vs 2022.
• AGS revenues increased by +18.9% vs 2022 driven by higher traffic in the airports (+13.5% vs 2022) coupled with a higher yield. Adjusted EBITDA performed strongly increasing by +42.0% vs 2022.
• Dalaman revenues reached EUR 77 million driven by the positive performance in traffic due to the longer peak season. Adjusted EBITDA stood at EUR 55 million. Traffic numbers reached an all-time high of 5.2 million passengers (+15.5% vs 2022).

Construction: revenues were up by +9.9% LfL growth. Adjusted EBIT reached EUR 77 million vs. EUR 63 million in 2022, due to strong performance at Budimex (7.6% Adjusted EBIT margin), partially offset by completion works on the large projects in their final stages in the US and the negative impact from a landslide in Colombia (Ruta del Cacao). Adjusted EBIT margin reached 1.1% vs. 1.0% in 2022. The order book reached EUR 15,632 million (+5.5% LfL growth), not including pre-awarded contracts of c.EUR 1.9 billion.

DIVIDENDS FROM PROJECTS

Total dividends received from projects reached EUR 741 million in 2023 (vs EUR 475 million in 2022) with the main distributions including:

• 407 ETR: EUR 281 million were received by Ferrovial in 2023, (EUR 237 million in 2022).
• Texas Managed Lanes: EUR 397 million were received by Ferrovial (EUR 123 million in 2022), including the first year of distribution from NTE 35W (EUR 251 million), as well as dividends from NTE (EUR 109 million) and LBJ (EUR 37 million).
• Other toll roads: EUR 26 million in 2023 (EUR 28 million in 2022), including EUR 9 million from Australian toll roads, EUR 8 million from Spanish toll roads and EUR 2 million from the Irish toll roads.
• Energy Infrastructure and mobility: EUR 11 million from Serveo and EUR 18 million related to an intercompany loan repayment following the refinancing process with bank debt at Berrocal photovoltaic plant.

FINANCIAL POSITION

As at 31 December 2023, the Consolidated Net Debt of ex-infrastructure project companies reached EUR -1,121 million vs EUR -1,439 million in December 2022. Consolidated Net Debt of infrastructure project companies stood at EUR 7,100 million (EUR 7,219 million in December 2022). Consolidated Net Debt stood at EUR 5,979 million (EUR 5,781 million in December 2022).

CORPORATE TRANSACTIONS

• On November 28, 2023, Ferrovial announced that an agreement had been reached for the sale of its entire stake (c.25%) in FGP Topco, the parent company of Heathrow Airport Holdings Ltd., for GBP 2,368 million. The agreement has been reached with two different buyers, Ardian and The Public Investment Fund, who would acquire Ferrovial’s shareholding of c.15% and c.10% stakes respectively, through separate vehicles. Some FGP Topco shareholders have exercised their tag-along rights in respect of shares representing 35% of the share capital of FGP Topco (Tagged Shares). The agreement for the sale and purchase of Ferrovial SE’s subsidiary’s shares in FGP Topco remains in force although it is a condition for the sale of the shares that the Tagged Shares are also sold. The parties are working towards satisfaction of such condition by exploring different options to satisfy the same.
• In December, Ferrovial and Renault Group reached an agreement to sell the entire 50% of Ferrovial’s stake in Zity by Mobilize to its partner Renault Group.
• In December, Ferrovial sold its 89.2% stake in the Portuguese toll road concession Euroscut Azores to infrastructure funds Horizon Equity Partners and RiverRock for EUR 43 million.

SUSTAINABILITY HIGHLIGHTS

• Ferrovial recognized as one of the world’s leading environmental companies by CDP (Carbon Disclosure Project). Included in the ‘A List’ for Climate Change and “A List” for water, making it one of the best performing companies.
• Ferrovial received ‘Top Employer’ 2023 recognition as one of the best companies to work for in Spain.
• Ferrovial issued its first sustainability-linked bond (EUR 500 million).
• Ferrovial submitted the Climate Strategy for the advisory vote of the 2022 Annual General Shareholders’ Meeting and received approval from over 90% of shareholders.
• Ferrovial has been included in S&P’s Global Sustainability Yearbook 2023.
• Ferrovial was included in the FTSE4Good Global Index for the 20th consecutive year.
• Ferrovial signed its annual social aid program, which will benefit  over 52,000 people. The program aims to improve access to water  for human consumption, contribute to the fight against food  insecurity and alleviate poverty and severe diseases.
• Heathrow remains focused on championing the role of sustainable aviation fuel (SAF). Considered a success in 2022, the incentive has been increased from 0.5% to 1.5% in 2023, and it was once again oversubscribed.
• Heathrow is the first airport to achieve “science based validation” from the SBTi for their 2030 carbon reduction goals.