Rafael del Pino, Chairman of Ferrovial, underlined that the government’s measures have helped restore competitiveness and rebuild investor confidence. In his presentation at the Shareholders’ Meeting, he stated that it is necessary to stimulate domestic demand so as to create jobs. The Shareholders’ Meeting, held in Madrid, passed all the items on the agenda, including the Ferrovial Flexible Dividend programme.
In his presentation at the Shareholders’ Meeting, Ferrovial Chairman Rafael del Pino described the Spanish government’s measures as “helping restore competitiveness and rebuild confidence.” The meeting, held in Madrid, passed all the items on the agenda, including the financial statements and the Ferrovial Flexible Dividend programme, under which shareholders can choose between multiple remuneration options.
After confirming that the economy is recovering, Mr del Pino called for measures to reinforce growth through an increase in public spending on infrastructure. “That is the only way to boost domestic demand and achieve a significant recovery in employment,” he added.
In his overview of 2013, Mr del Pino said “for the first time since the crisis began, Ferrovial’s investments outstripped divestments, with acquisitions in the UK and Chile of companies that will drive international growth by the Services division.” He also described 2013 as a “satisfactory year for Ferrovial and its shareholders.” The year was marked by “good performance by the businesses, successful asset rotation, strong cash flow and a growing international presence,” he added. “Sound progress outside Spain increased revenues by 9% and EBITDA by 5%, in like-for-like terms.”
Ferrovial’s share appreciated by 26% in 2013, i.e. 5% more than the Ibex 35 in the same period, yielding a total shareholder return of 32%, including dividends.
Mr del Pino underlined the company’s financial strength. As a result of skilful management, operating cash flow rose by 15% year-on-year, supported by positive business performance, divestments, and dividends from Toll Roads and Heathrow Airport Holdings (HAH).
He also highlighted growth of 18% in revenues outside Spain, with the result that the international area now accounts for 68% of total revenues, 66% of the backlog, and 58% of EBITDA.
“In short, during 2014 we maintained our commitment to profitability and value creation. We aim to expand our international business and we expect a range of investment opportunities to arise,” he said.
Growth in the backlog and a greater international presence
During the presentation of earnings to shareholders, Ferrovial CEO Íñigo Meirás noted the good performance of the main assets, such as 407 ETR in Canada and Heathrow Airport, with record traffic numbers, bond issues last year, and dividend payments. He also highlighted the Services and Construction backlog and the first contracts obtained in new markets such as Australia and Persian Gulf countries; the company is also tracking infrastructure plans in Mexico and Peru.
Mr Meirás underlined that the company maintained its strategy of long-term funding through the capital markets in 2013, with several bond issues by the company’s main assets and the first bond issues by Ferrovial itself. The issues were very well-received by the market, and enabled the company to optimise the maturities calendar, reduce funding costs, and practically eliminate bank debt.
Mr Meirás also spoke about the main contracts obtained by Ferrovial during the year, such as water infrastructure projects in several regions of the UK; management of non-medical services at Valdecilla Hospital in Santander; sections 3A and 3B of the NTE in Texas; the completion of the M8 and other roads in Central Scotland; the main section of the Batinah expressway in Oman; and the financial completion of a section of the La Plata Highway (A-66) between Benavente and Zamora, in Spain.
He also discussed the good performance by Ferrovial businesses outside Spain: international projects account for 64% of the Services backlog, and 70% in the case of Construction. The total backlog amounts to 25.616 billion euro, which ensures the company’s activity in the medium and long term.
Lastly, he spoke about the company’s priorities for 2014, which include profitable growth by obtaining new projects and acquisitions while maintaining financial discipline, focusing in particular on cash flow and operational management. In the coming months, the company will continue to develop its internationalisation strategy, which has yielded excellent results to date.
Ferrovial Flexible Dividend
The Meeting approved the new Ferrovial Flexible Dividend programme. In line with the latest trends at other companies, Ferrovial seeks to provide a choice to those shareholders who prefer the tax advantages of a scrip dividend.
With Ferrovial Flexible Dividend, shareholders can choose to receive remuneration in shares or cash, each with its corresponding tax conditions.
As part of this initiative, shareholders approved a reduction in share capital through the amortisation of previously acquired own shares, the goal being to increase Ferrovial’s earnings per share.
The financial statements were also submitted for approval, along with the directors’ report, the application of income from 2013, the conduct of business by the Board of Directors, the re-appointment of auditors, and the Board of Directors remuneration system.