Ferrovial N.V.

Good afternoon or good morning, depending on where you are, everybody. This is Silvia Ruiz speaking, and I would like to welcome you to Ferrovial's conference call to discuss the financial results for the third quarter of 2024. I am joined here today by your CFO, Ernesto Lopez-Mozo, and by your Corporate Finance Director, Ignacio Del Pino. Just as a reminder, both the results report and the presentation are available on our website since yesterday evening after the U.S. market was closed. At the end of the presentation, there will be a Q&A session. As in previous calls, you will have the opportunity to ask questions live. For that, you will need to join the call through the conference call channel and press star five on your phone keypad. If you prefer, you can send them through the forum, including the webcast, and I will be reading them out loud at the end of the Q&A session. With all this, I will hand over to Ernesto. Ernesto, the floor is yours.

Thank you, Silvia, and hello to everybody. Well, we have another set of strong results this quarter. In the overview, we can see that toll roads continue to benefit from increased mobility in Canada in the 407. The U.S. managed lanes posted solid revenue per transaction growth. Also in airports, we had record-breaking numbers at Heathrow and also strong growth in AGS and Dalaman. Construction had another quarter with profitability improvement. When we look into the whole nine months of 2024, we have a 3.9% EBIT margin. In terms of cash, this has been the first nine months where we have received dividends from infrastructure assets of 190 million euros, and this includes the first dividend from the I-77. Also, we had proceeds from the sale of a 5% stake in IRB, €211 million. And also, we had proceeds from the divestment of the AMI vendor loan, €176 million, and also Cerveo, €40 million. This has been also gone hand-in-hand with investments and shareholder distributions. We were catching up with last year with shareholder distributions, mainly buybacks of €749 million. And also we invested in the IRB Infrastructure Trust, €652 million. And of course, we continue with the development of NTO and investment of equity here was €319 million. I mean, different events that were announced since the first half of the year. One of them is the additional buyback program for a maximum amount of 300 million euros. We have in the first nine months of the year, we have already invested 75 million euros in our treasury shares. So that's on top of the number. that I mentioned before of shareholder distributions. This is treasury stock. In terms of other transactions, we had an agreement to transfer the economic rights of concessions in Europe and Canada to JAB with Interogo Holding. Cash received was 100 million euros, but this was in October. So this number is not in the net debt position of the first nine months. And then lastly, we announced yesterday the second script dividend as per the approval of the shareholder meeting earlier in the year. Okay, we move on to the next slide. We start with the toll roads performance, and we see that the whole division had a strong WD growth in revenue and the BDA. But I would like to highlight the numbers we have in the bubbles that relate to the North American assets. I mean, the U.S. toll roads had revenues and a BDA growing in excess of 20%. And in terms of dividends from North American assets, we had a triple for four hundred and forty four million euros dividends compared to just below four hundred three ninety three in the first nine months of the past year. If we move on to the next slide, please, we move into the into the 407 and the 407 has had a strong quarter in terms of traffic I mean we I mean so increased mobility and commuting and we have to highlight weather effects here and well there was heavy rain in a Much higher number of days than in the past year and also with a heavy downfall and this affected traffic. In terms of the revenues, I would like to have a look at the breakdown that we show on the chart. top right-hand corner. We see good growth in total revenues outpacing other quarters. Also, the fee revenues that were affecting comparison in the past quarters now have a slight growth. That helps. And contract revenue that was reflected in the first months of last year now is not part of the comparison. And that gives a number of growth in total revenue of 16.1% for this quarter. And in terms of dividends, I would like to highlight that the 407 dividends paid in the first half and third quarter of 175 plus 225 million Canadian dollars. And it has approved a dividend for the last quarter of the year of 700 million Canadian dollars. So this is an important growth compared to last year. If we move on to the Dallas Forward Managed Lanes, here we have the solid revenue per transaction growth that I was mentioning at the beginning. In NTE, we have traffic and revenue impacted by the capacity improvement construction works. I mean, this is performing much better than what we expected. expected, but clearly the works are affecting. Whereas in LBJ we have solid traffic growth, even though it's affected by construction works, some of the connections are already improved from the past year, so we are starting to see also a part of the mobility coming back and that shows in the growth of LBJ and in the NT35 West we have traffic growth benefiting from the opening of segment 3C last last year and of course well this out performance means that we're also having some revenue share and in the third quarter the BDA includes 3.4 million dollars of revenue share and this is accrued on a quarterly basis since the second quarter 2024 and therefore for the first nine months of 2024 the number of revenue share is 10.1 million dollars. So we also have at the bottom the dividend distributions at 100% shareholder base of the different assets, and you see the strong performance. As a reference, we have the soft cap update of 3.4%. Usually when you're able to beat that growth is related to mandatory modes that we have in NTE and is the main driver of also the comparison vis-a-vis last year. We have had mandatory modes this quarter, but there were more frequent last year without the ultimate capacity, right? So that affects the comparison, but it's very healthy and strong. If we move to the next one, please, in the I-77, we have a strong revenue growth in terms of the traffic, the performance vis-à-vis the same quarter last year. We have to refer to construction works that were benefiting the 2023 traffic and also this quarter we had impacts from hurricanes Debbie and Helene. I must mention that it has affected negatively and we, I mean, don't comment into the performance after the close of the quarter. But I mean, the situation in North Carolina is that there are different roads closed. and traffic has been diverted to the I-77 and of course this is helping the performance a lot throughout October. I don't give specific numbers but it's just a warning so that you don't extrapolate this performance in September into your October numbers going forward. Of course, the performance of the asset means that we are having revenue share as well. We have $1.2 million in Q3, and when we look into the full nine months of 2024, the revenue share is $3.6 million. I would like to highlight not only the revenue per transaction growth, but also the first dividend distribution at 100%, it was $293 million. When we look into the IC66 on the right side of the slide, we see some stabilization in traffic. Well, part of this is also related to similar effects. I mean, in the Q3 of 2023, still completion works were very intense and that was affecting traffic in the general purpose lanes. helping um traffic in the in the i-60s on the i-66 um and also this year we had impact from hurricanes debbie and helene so um i mean this has been affecting the uh the comparison the renew per transaction uh keeps uh um growing um healthily okay we move to the Next slide. Here we get into the airport's division. And Heathrow, well, you probably have seen the results already with record-breaking passenger numbers. Of course, the comparison to 2023 is affected by the gliding path of the aeronautical tariffs that were set by the CAA, and therefore you have a drop in revenue on passengers. and the BDAB deals affected by higher cost to basically service the high demand of traffic. Okay, if we move off to the next one, in other airports we see a solid growth in the AES with Revenue growing at a high single digit, adjusted the BDA even above 20%. So a strong growth and the different assets, the big one, Glasgow, is driving most of the growth. Southampton is also growing. Aberdeen is more stable. On the right-hand side, we have Dalaman that had the busiest nine months ever recorded. And this growth is also significant. looking strong with 7.4% growth in revenues, international traffic is growing, and really the area is growing as an attractive tourism destination. In fact, the region has been declared a tourism development area, so we should expect more hotels being built and more capacity to attract passengers through the airport. Regarding new Terminal 1, it's on track. Really, the construction is performing really well. It's within budget and schedule. We're also advancing in the negotiation with airlines for the opening, let's say, two years down the road or a little bit more. And here we have nine airlines that have been signed during the first nine, well, until the first nine months of 2024. And, well, the new airlines are mentioned in the slide, EVA Air, Air Serbia. So, yes, and news in terms of equity contribution, they follow the pace of the of the project. Three hundred forty seven million dollars have been injected in the first nine months of two thousand and twenty four. And in the third quarter was one hundred sixty million dollars. The total investment up to September 30th this year is $641 million, the total since the beginning. And we have a pending commitment of $501 million. I mean, in the first half of the year, we had successful issuance of 2.55 billion long-term green PAPs. Okay, we move to the next slide. Construction, a very strong quarter. Basically, I mean, the comparison with last year is very strong because last year we still had impact from closing of big projects. Now we have... a healthy backlog and the margins are up across the board, right? So we have a 7.8% EBIT margin in the first nine months of the year for Budimex, 3.0% in Weber and Ferrabial construction had a good recovery with 1.9% EBIT margin. As I said, the order book is at peak levels. We think it's a healthy backlog and we still are not reflecting 2.3 billion in contracts that are pending financial close or final signing. Okay, so if we move to the P&L, we have the P&L broken down into revenue, EBITDA and EBIT for the first nine months of the year and then for the third quarter. So we see that growth is very strong this quarter and of course for the first nine months even more so. So very solid, strong operational results. If we move on to the net debt graph, here we see, I mean, the main captions were already discussed in the introduction. I mean, we had a strong number of dividends from projects, close to 500 million. It's 490. Construction has some cash drain, I mean, better than last year to this point in time, but, I mean, it's – drain a little bit of cash and then you have other cash flow from other operating activities and taxes. In taxes, the main impacts are from Budimex and also from cash repatriated from Canada that has a 5% withholding tax. and to the right of these cash flow operations we have the investment activities and here we have all the investments that I mentioned before and you also have here the interest received on the cash in hand and the investments. clearly a year where we are focused on investment and shareholder remuneration. In terms of financing activities, as I mentioned, the focus has been shareholder distributions, catching up with last year. We also have other treasury shares acquisition. and then we have cash flow from used in financing activities and here you have repayment of bonds or European commercial paper, you have for instance the dividend in Budimex leakage to minority holders, all these captions that are well described in the note that was published yesterday. Okay, so good cash performance in the different captions with a strong focus on investment and shareholder remuneration. Just to close the presentation before getting into the Q&A, I mean, really strong performance across the board in infrastructure assets, construction profitability clearly improving, and I mean, No, I mean, we have to remember you have the 3.5% guidance that we provided for this year. We are there clearly. Then we have growth investments combined with shareholders distribution that I mentioned and a sizable pipeline ahead. So pipeline is accelerating. Okay, so thanks for bearing with us and we open the floor for the Q&A session.

Thank you, Ernesto. The Q&A sessions will start shortly. Please, operator, just go ahead.