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Group profile transformed by consolidation of BAA for half the year and the sale of the Real Estate division
- The more recurring businesses (infrastructure and services) expanded revenues by 133% to 82% of the total, while international activities increased by 73% and now account for 59% of Group revenues
- EBITDA increased by 106% to 2,324 million euro
- Growth in all businesses, and a record 4,446 million euro invested
Ferrovial today announced its 2006 results, with growth in all business areas, increasing diversification into recurring activities (services and infrastructure projects) and a shift in exposure towards international markets.
Activities outside Spain accounted for 60% of revenues and 72% of EBITDA, after consolidating BAA for six months (68% of Infrastructure division revenues) and the sale of the Real Estate division, in a year in which the Company invested a record 4,445 million euro.
Revenues totalled 12,354.6 million euro, a 48.5% increase. Construction expanded by 17% due to progress with projects in Spain and abroad, including Budimex (+17%) and Webber, in Texas, which contributed 322 million euro in revenues. The Services division increased revenues by 34%, mainly due to integrating Swissport and Owen Williams for a full year, and Infrastructure revenues surged by 285% as a result of consolidating BAA for half the year, plus new concessions and good traffic performance at toll roads and airports.
As a result, net profit amounted to 1,426 million euro in 2006 (242.8% more than in 2005). Excluding changes in consolidation scope and discontinued operations, pro-forma net profit increased by 35.5%. EBITDA increased 105.6% to 2,324.3 million euro, boosted by all business areas, mainly the more recurring activities (services and infrastructure), which grew by 132.7% and now account for 82% of the total.
Businesses outside Spain expanded 73% year-on-year and now represent 59% of the total. EBIT increased by 104.4% to 1,459.1 million euro. International revenues increased by 88% to 7,244.6 million euro and now account for 59% of the Company's total, mainly as a result of consolidating BAA and Owen Williams, starting operation of the ITR (USA), and full-year consolidation of Swissport, Webber, Chicago Skyway (USA) and the N4-N6 toll road (Ireland). The main sources of Group revenues are the United Kingdom (33%), North America (Canada and the USA: 9%), Poland (7%) and the rest of Europe (Ireland, Portugal, Italy, Greece, Switzerland: 6%).
A record 4,445.8 million euro in investment, and 46% leverage
In 2006, Ferrovial invested 4,445.8 million euro, the largest figure in the Company's history, to buy UK airport company BAA (3,672.1 million euro), the Indiana Toll Road concession (302.9 million euro), another 10% of the R-4 toll road (54.9 million euro), as well as capital increases at the Madrid-Levante toll road (22 million euro) and the N4-N6 toll road (28.1 million euro), and the acquisition of engineering firm Owen Williams in the Services division (35.2 million euro).
Notable divestments include the sale of the real estate business to Habitat (for 2,200 million euro EV, including 600 million euro in debt), Europistas (334 million euro) and Bristol airport (150 million euro).
Despite those sizeable investments, Ferrovial ended the year with a net debt position (excluding concession companies' debt) of 3,064.1 million euro (46% leverage). In 2006, Ferrovial's operating cash flow net of taxes amounted to 806.9 million euro.
Construction margins improved and Webber was consolidated for the full year
Construction revenues increased by 17.3% to 5,146.4 million euro due to good performance in Spain (+14.0%), the improvement by Budimex (+17.0%) and full-year consolidation of Webber (revenues 322 million euro and backlog 504 million euro). Construction EBITDA amounted to 424.4 million euro, a 34.9% increase. At year-end, the Construction backlog had increased by 7% to 8,023 million euro due to the pace of project execution.
The Infrastructure division included six months of BAA, the world's largest airport company
Infrastructure, which includes toll roads, airports and car parks, increased revenues by 285% to 2,927.2 million euro. This increase was due to consolidation for six months of BAA (revenues 1,979.7 million euro, 68% of the entire Infrastructure division), good toll road and airport traffic performance, commencement of operations on the Indiana Toll Road (USA), and full-year consolidation of Chicago Skyway and the N4-N6 toll road in Ireland. Infrastructure EBITDA increased by 204.7% to 1,461 million euro, and the EBITDA margin was 49.9%. Other notable events:
- Airports: BAA consolidated from July to December 2006. BAA's revenues (1,979.7 million euro) accounted for 68% of the Infrastructure division total, and its EBITDA amounted to 845.8 million euro. Traffic increased by 7% between July and December at BAA's airports: Heathrow, Gatwick, Stansted, Glasgow, Edinburgh, Aberdeen and Southampton, in the UK, as well as Budapest and Naples.
- Toll roads: good traffic performance led to 884.7 million euro in revenues (+27.1%) and 593 million euro in EBITDA (+27.8%). In particular, 407 ETR increased revenues by 13.4% and EBITDA by 17%, while the number of vehicles and average trip length increased despite an 8.7% increase in tolls in 2006, and the company engaged intensively in bidding for new projects, with six new contracts and three pending final award, and 7,500 million euro in gross investment, in the USA (Indiana Toll Road, awarded in January and operational since July, and segments 5 & 6 of the SH130 in Texas), the M3 road in Ireland, the Scut Azores toll road in Portugal, and the Ionia Odos and Central Greece toll roads (the latter in January 2007) in Greece
- Car parks: revenues increased by 10.4% to 132.4 million euro and the number of managed parking spaces reached 253,023 (+6.2%). Notably, EBITDA increased by 10.3% to 46 million euro and the EBITDA margin rose to 34.7%.
Services: Rising revenues and EBITDA
The Services area has established itself as the Group's second-largest generator of revenues (34.4% of the total) and EBITDA (29.8%). In 2006, this division's revenues increased by 34.4% to 4,300 million euro, boosted by business performance in Spain and the UK as well as full-year consolidation of Swissport (handling) and Owen Williams (engineering). EBITDA amounted to 435.5 million euro, having risen by 29.8%. The EBITDA margin was 10.1%.
The Services backlog (excluding Tube Lines) amounted to 8,629 million euro (+20.3%), boosted by new contracts at Amey (17.8%) and in Spain (24.0%). Through Amey, the Services division has strengthened its presence in the UK, a market which represents 45% of the division's total revenues (1,932.6 million euro, +9.1%) and 45% of its EBITDA (198 million euro, +19.5%). Amey's margin increased by 10.2%, and it expanded its backlog by 17.8% to 4,974 million euro. Major events included the acquisition of Owen Williams, a UK consulting and engineering company which provides design, project and asset management consultancy to the highway and railway sectors, and the first project under the "Building Schools for the Future" programme. Handling company Swissport contributed 1,087 million euro in revenues (25% of total Services revenues) and 58.5 million euro in EBITDA, and it expanded in Eastern Europe (buying 51% of the second operator at Kiev), Asia (acquiring SGS Shimaya in Japan), New Zealand (new contracts) and Spain (six airports, including Madrid).
Real Estate: division sold to Grupo Habitat
In 2006, Ferrovial sold its real estate business (apart from the operations in Poland) to Habitat for 2,200 million euro (EV), including 600 million euro in debt, although it is committed to investing 125 million euro to buy 20% of the resulting Grupo Habitat. The capital gain, net of taxes and the cost of the 20% stake in Grupo Habitat, is 765.5 million euro.
