Construction

Revenues increased by +9.9% LfL growth with all three subdivisions registering revenue growth, particularly Budimex and business in Spain. International revenues accounted for 81%, focused on North America (30%) and Poland (31%).

In 2023, Construction adjusted EBIT stood at EUR 77 million vs. EUR 63 million in 2022, reaching 1.1% adjusted EBIT margin (1.0% in 2022).

Details by subdivision:

• Budimex: Revenues increased by +13.7% LfL growth supported by the Civil Works activity due to a different portfolio of contracts in progress and exceeding forecasts due to the good weather and newly awarded projects from last year. Adjusted EBIT margin reached 7.6% in 2023 improving vs 6.3% in 2022. Last year profitability was impacted by the uncertainty of the war in Ukraine and the increase in the prices of steel and other materials, as well as problems with some supplies, which today have been mitigated to a certain extent (also favored by indexation agreements at both Roads and Railways).
• Webber: Revenues increased by 11.8% LfL growth, mainly due to Civil Works activities on the back of strong hiring pace along with higher sales from infrastructure maintenance activity, partially offset by the permanent withdrawal of the Non-Residential. Adjusted EBIT margin stood at 2.7% vs. 2.8% in 2022.
• Ferrovial Construction: Revenues increased by +7.1% LfL growth, with the Spanish market particularly standing out, with growth in both civil works and non-residential building; and the Australian market, mainly due to the execution of the Sydney Metro and Coffs Harbour Bypass works, offsetting the lower activity in North America due to the coincidence of some large contracts completions (I-66 in Virginia and NTE 3C in Dallas) with the still very early stages of new contracts (Toronto Subway in Canada or I-35 in San Antonio).

Adjusted EBIT stood at EUR -122 million (EUR -87 million in 2022), the decrease in profitability at Ferrovial Construction is largely due to the impact of the completion works in large projects in the US. The cost estimate for these projects close were higher than previously anticipated. Prior estimates were based in our experience in completing other projects of similar size and complexity. By contrast, many of the activities in these outstanding projects were performed out of sequence due to client requirements. Additionally, said clients’ posture with respect to punch-list and completion works, though still under discussion, has largely over-exceeded our expectations, which again were based on prior experience with these types of projects.

Finally, the company firmly believes that it is entitled to recover an important part of incurred costs from said clients via claims which have already been submitted to the client and are pending resolution.

Additionally, in October 2023, a landslide occurred in Colombia that affected the completion of the Ruta del Cacao project. A provision has been included for the provisional estimate of costs. The company is in negotiations with the client to analyze viable technical alternatives for the delivery of the project.

The order book stood at EUR 15,632 million (+5.5% LfL growth compared to December 2022). The Civil Works segment remains the largest segment (69%) and continues to adopt highly selective criteria when participating in tenders. The international order book accounts for 82% of the total.

The percentage of the construction order book (excluding Webber and Budimex) from projects with Ferrovial remained consistent with December 2022 at 8%.

The order book figure, at December 2023, which is an all-time high, does not include pre-awarded contracts or contracts pending commercial or financial agreement, which amount to c.EUR 1.9bn, from contracts at Budimex.