Ferrovial shareholders meeting approves the Groups best results ever

Press releases

In 2001, earnings increased by 37.1% to 218.3 million euros and net profit continued to grow fast (35% CAGR in the last six years).

Ferrovial confirms its position as Spain´s largest construction company, as it enters what will be the sector´s best years ever (00-06 Infrastructure Plan), and as the world´s biggest concession company in terms of committed capital expenditure (1.5 billion euros).

The alliance with Macquarie, the year´s main event, puts Ferrovial in a privileged position to continue growing in private transport infrastructure management.

The operating results - the construction backlog (5.6 billion euros), the property backlog (767 million euros) and the growth potential in concessions - will ensure the Group´s expansion in the coming years.

Gross capital expenditure totaled 3 billion euros in the last five years and investment is expected to continue at a rapid pace in the coming years.

The key factors for Ferrovial´s future are operating performance, investment capability and the situation of the markets in which it operates.

Madrid, 22 March 2002
Ferrovial again attained sustained growth and increased profitability. In 2001, a record year in all its business lines, Ferrovial laid the foundations for future growth and consolidated its position as one of Europe´s leading groups in terms of business volume, profitability and market capitalization.

Ferrovial posted 218.3 million euros in net profit in 2001, up 37.1% on 2000, due to growth in all its business areas, mainly construction and concessions, and positive margin performance. The main operating figures (construction, property and concession backlogs) ensure activity in the coming months and rapid growth in the future. The company´s objective is to increase net profit by over 10% in 2002.

Judicious investments the key to growth
At the Shareholders´ Meeting, Rafael del Pino y Calvo-Sotelo, Ferrovial´s Chairman, stated that "positive performance in earnings and operating aggregates ensures the company´s future growth. When Ferrovial was listed in May 1999, the latest available data, i.e. for 1998, showed that net profit totaled 85 million euros, which means that it has increased 2.5-fold in the last three years."

The share appreciated by 45% during the year, one of the best performances in the Ibex-35 index and the best in the sector. Since the IPO, Ferrovial has appreciated by 9.8%, compared with a 16.3% fall in the Ibex-35 index, meaning that it has outperformed the Ibex-35 index by 26.1%. This further consolidates us as largest construction group in Spain and the third-largest in Europe by market capitalization."

He added: "Ferrovial´s steady growth is due partly to good performance by the markets in which we operate and, above all, to our shrewd investments in recent years, a strict cost culture and company efficiency." In the last five years, Ferrovial has invested 3 billion euros in concessions, property development and services plus the acquisition of construction company Budimex. "The sizeable cash generating capacity of construction -our core activity- has enabled us to diversify and internationalize, ensure steady growth in the bottom line in the future, offset the cyclical nature inherent to some of our businesses, and use the cash flow from construction to meet the borrowing needs o the concession business."

In 2001, Ferrovial maintained a fast pace of investment (712 million euros) yet it ended the year with 24% gearing (39% in 2000). The cash position is now positive (over 500 million euros in January 2002) after completing the Macquarie transaction.

The Ferrovial-Macquarie concession alliance
"The alliance with Macquarie Infrastructure Group (MIG), Ferrovial´s largest transaction in 2001, has placed us in a privileged position to continue growing in private transport infrastructure- a field in which we are already the leaders, with an investment of nearly 1.5 billion euros, and strengthened by our partner´s quality and complementarity (Macquarie is Australia´s largest private investment bank and the world´s third-largest toll road operator) and it has renewed the Group´s investment capacity. Moreover, it will generate extraordinary gains in 2002 and provides visibility to our concession business, which is valued at 2.3 billion euros, i.e. 30% more than the average of analysts´ estimates."

This alliance opens new possibilities of international expansion for both groups, mainly in the OECD, and favors preferential collaboration between Ferrovial, Spain´s largest construction company with broad experience and assets in private infrastructure development, and Macquarie, Australia´s largest investment bank with a sizeable presence in concessions in the English-speaking markets.

Key to the future
Ferrovial´s future will be based on three factors: its operating aggregates, investment capability and the conditions of the markets in which it operates; "the current performance of those factors gives us grounds for optimism about the near future and we can look forward to a new growth phase at the Group. Ferrovial has healthy operating figures: our construction backlog is at a record high of 5.6 billion euros, our sizeable property backlog (767 million euros) is double the revenue figure in 2001 and our concession business has potential once the toll roads under construction are opened. In 2002, we plan to open 4 new toll roads, including the M-45, inaugurated last week."

"Additionally, our considerable investment capacity will enable us to continue investing at a fast rate in the coming years. Moreover, the markets in which we operate continue to show signs of strength: Spain´s Infrastructure Plan will mean 114 billion euros in investment; the OECD countries, our main geographical target, will concentrate the bulk of our concession projects in the next five years; and we are in a strategic position in East Europe, which is expected to join the European Union shortly."

Growth and increased profitability
Joaquín Ayuso, the Group´s general manager, highlighted "the Group´s growth and increased profitability, good performance by all the business lines and the consolidation of the foundations for Ferrovial´s future growth."

He continued, "In 2001, we strengthened our position as Spain´s largest construction company by sales volume and profitability and we further focused on our internationalization and diversification strategy. In 2001, 33% of our business was outside Spain, mainly in OECD countries, and non-construction activities progressively increased their contribution to the company´s operating profit from 42% in 1998 to 69%, significantly ahead of the schedule we established in our IPO nearly three years ago."

Spain´s largest construction company
A fast growth in revenues both in and outside Spain boosted the construction business by 16% to 3.432 billion euros and operating profit increased by 27.7% to 123 million euros. Ferrovial´s construction backlog, the sector´s largest, attained a record figure of 5.6 billion euros, 6% more than in 2000. "Outside Spain, the highlight was the consolidation and improvement of Budimex, our Polish subsidiary, with a view to making it a major source of growth and earnings in the coming years."

Ayuso also stated that "we are optimistic about the immediate future because of the steady rate of investments in the Infrastructure Plan, and our strategic position in the Polish market will offset the construction cycle in the domestic market, along with selective growth in other OECD countries."

Positive performance by concessions, property development and services
In concessions, in addition to the strategic alliance with Australian group Macquarie, "with which we have reinforced our growth strategy in the concession business", Ferrovial completed the extension of the Canadian toll road a few months ahead of schedule, consolidated its presence in the Portuguese market with a second toll road, and completed the financing of all its Chilean toll road concessions. "Ferrovial, the world´s leading company in terms of investments committed to concessions, amounting to 1.5 billion euros, manages 15 toll roads. Moreover, the fact that only eight toll roads are open to traffic, including the recently-inaugurated M-45, means that concessions will provide a significant contribution to Group revenues and earnings in the coming years."

Another highlight in 2001 was that Ferrovial began to operate Bristol Airport: "we now manage this airport, in addition to the 10 airports we run in Mexico and Chile, and we significantly increased parking spaces in Spain to over 165,000, making us the leaders in the domestic market." Concession revenues grew by 34.5% to 345.8 million euros and operating profit by 70.5% to 176 million euros.

Joaquín Ayuso also stated that "all the financial and management variables of our residential development division increased significantly." Revenues grew by 23% to 375 million euros and operating profit by 17% to 88 million euros. Ferrovial attained a record property backlog of 767 million euros, i.e. twice book sales, which ensures growth in the bottom line in the future.

 "In 2001, we boosted our marketing strategy with a novel initiative of selling homes via El Corte Inglés department stores and through the acquisition of Don Piso, Spain´s largest realtor. Based on an industrial concept of the business, we continue to focus on residential products and geographical diversification while applying an active risk management policy in order to reduce our exposure to the cycles inherent to this market."

Ferrovial consolidated its services area in 2001: revenues increased by 10.7% to 215 million euros and operating profit by 68.6% to 11.8 million euros. The cleaning business was reinforced with the acquisition of Eurolimp, which will contribute significant revenues: about 75 million euros in 2002. "We want to continue growing and boosting the urban services, maintenance and facility management areas, in which we manage over 3.5 million square meters in 2,300 buildings, as well as integrated infrastructure maintenance via subsidiary Grupisa, which is the leader in this market."

"Finally, in the telecommunications sector, in which we hold financial positions, we sold our stake in Uni2 and we maintain our presence in cable via ONO, an investment which is meeting our business plans."

In 2001, 712 million euros were invested, mainly in concessions and property. The acquisition of Bristol Airport, managed by Ferrovial since January 2001, the incorporation of concession company Autopista Scut Norte Litoral in Portugal, and the increase in the stakes in Europistas, Ausol and Santiago-Talca and Talca-Chillán in Chile concentrated the bulk of investments in concessions. In the property division, Ferrovial maintained a steady pace of land purchases and acquired Don Piso.

Value creation
Ayuso also highlighted that "profitable growth is one of Ferrovial´s priorities and the selective progress in business diversification and internationalization plus the investments in recent years are enabling us to maintain rapid earnings growth and to advance significantly in making Ferrovial one of the world´s most profitable companies."

"In addition to this growth capacity, Ferrovial is firmly committed to transparency, which enhances our credibility and inspires trust in our shareholders, employees and customers, and also forms part of our commitment to creating value."

Joaquín Ayuso, chief executive of Ferrovial since January 2002, was appointed CEO of Grupo Ferrovial at the Shareholders´ Meeting.


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