Ferrovial - Annual Report 2010

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Spanish version

Letter from the Chairman

Rafael del Pino

Fellow shareholder,

In 2010 Ferrovial posted a net profit of 2,163 million euros, strengthened its financial position and generated cash flow in excess of market expectations. Debt at the parent company was substantially reduced and major contracts in Construction and Services were landed, bringing the year end backlog to a record high and strengthening our solid foundation for future business.

The year was marked by the world economic backdrop, as governments in the countries where we operate adopted measures to reduce their fiscal deficits. Nevertheless, the curtailment of public expenditure offers a range of opportunities for public private partnerships (PPP) in project development. We have been successful in this area over the last two years, such as the highways in Texas. These achievements came in the context of a credit crunch that hampers the ability to raise funds. We plan to continue exploring the PPP approach and anticipate that such an approach will play a key role in the infrastructure business going forward.

I would like to summarize the main figures of 2010:

Earnings.- Net profit amounted to 2,163 million euros. EBITDA totaled 2,514 million, a 6.5% increase in organic terms, boosted by a 2.7% growth in revenues to 12,169 million.

Cash flow and financing.- Operating cash flow maintained the positive trend supported by Construction and Services; coupled with divestments, this resulted in a net cash position of 31 million at year-end (excluding infrastructure project finance), compared with 1,172 million net debt at the end of 2009. Ferrovial continues to diversify its funding sources. Projects such as the new US concessions (LBJ) as well as 407 ETR and BAA issued bonds. The latter was recognised as Corporate Issuer of the Year by IFR, AS IT replaced subordinated debt with long-term financing.

Financial data. - Ferrovial improved its key financial figures. Consolidated net debt, which includes infrastructure projects, amounted to 19,789 million euros, an 11% less than the previous year.

Share price.- Ferrovial outperformed key indices such as the IBEX-35, although it ended the year at €7.44 euro per share, compared with €8.23 at the end of 2009.

Internationalisation.- Ferrovial's international operations continue to grow in importance accounting for nearly 70% of revenues and 85% of EBITDA.

Backlog.- Our Construction and Services backlog also reached an all-time high—over 22 billion euro—with projects outside Spain accounting for 60% of the total. The backlog in Services expanded by 20% to 12 billion euros, while in Construction it increased by 16% to 10 billion euros.

All our business units performed positively, especially in the international arena. Consequently, our outlook for 2011 is positive despite the challenging market conditions.

Services.- Ferrovial Services increased profitability in 2010 as a result of cost controls, new contracts in the UK and in Spain and increased customer focus. Revenues totaled 3,896 million euros in revenues, 3.1% more than 2009 in like-for-like terms, and EBITDA amounted to 410 million euros, an 8.6% increase in the same terms.

Toll roads.- Traffic performance in 2010 reflected the economic situation in each country with traffic on the 407 ETR increasing by 5.5%. The division grew revenues by 7.2% in like-for-like terms to 869 million euro and EBITDA amounted to 630 million euros, a 7.6% increase in homogeneous terms.

Construction.- The strong growth in international Construction managed to offset lackluster performance in the domestic market. The division registered 4,525 million euros in revenues in 2010, a 1.3% decline in like-for-like terms and EBITDA amounted to 231 million euros, 1.9% less.  

Airports.- BAA handled 109 million passengers - 66 million at Heathrow - and revenues increased by 5% in like-for-like terms to 2,790 million euros. EBITDA expanded by 7.4% to 1,282 million euros.

Our good performance in 2010 would not have been possible without the support of an extraordinary team of people throughout the company, and I thank them for their dedication and commitment.

I would specially like to thank our shareholders for their continued support which encourages us to keep on working to overcome the challenges that we might face in the future.

 Firma de Rafael del Pino

Rafael del Pino
Chairman of Ferrovial
March, 2011

© Copyright 2010. Ferrovial

In agreement with:
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This is an electronic version of the 2010 Annual Report prepared by Ferrovial S.A. for its stakeholders, which aims to be complete and accurate. The contents of this version can be checked by referring to the print version. A copy of the print version in PDF format is available to download on this web page