Ferrovial SE(FER) - 2025 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue reached EUR 9.6 billion, up 8.6% year-over-year on a like-for-like basis, driven mainly by high revenues in highways and construction [6][7] - Adjusted EBITDA stood at EUR 1.5 billion, representing a 12.2% year-over-year increase on a like-for-like basis [7] - Dividends from projects reached a record EUR 968 million, showing a 2.2% increase year-over-year [8] - Total shareholder return in 2025 reached an outstanding 38.6% [8] Business Line Data and Key Metrics Changes - Highways revenue grew 13.7% like-for-like in the year, while adjusted EBITDA was up 12.2%, driven by strong double-digit growth from U.S. assets [11] - Construction revenue reached EUR 7.7 billion, up 7.5% in like-for-like terms compared to 2024, with adjusted EBITDA increasing by 19.9% [26] - The construction order book reached a new all-time high of EUR 17.4 billion, with almost 50% coming from North America [7][27] Market Data and Key Metrics Changes - U.S. highways revenue grew 14.2% in like-for-like terms in 2025 compared to the previous year [12] - Traffic in the Greater Toronto Area is expected to expand 22% by 2051, supporting long-term growth prospects [21] - The Dallas-Fort Worth region is projected to surpass Chicago and become the third largest metropolitan area in the U.S. by 2050 [22] Company Strategy and Development Direction - The company focuses on enhancing customer segmentation and maximizing EBITDA through targeted promotions [39] - A capital rotation strategy is in place, focusing on mature assets to reinvest in attractive opportunities [11] - The company remains selective in pursuing opportunities where its capabilities provide a clear competitive advantage [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term prospects of North American infrastructure assets, particularly in highways [9] - The company is facing a record pipeline of infrastructure projects in the U.S., larger than anything seen before [10] - The outlook for the construction division maintains an average long-term target of 3.5% adjusted EBIT margin [28] Other Important Information - The company returned EUR 156 million in cash to shareholders and repurchased shares totaling EUR 501 million [5] - The New Terminal One project at JFK Airport is progressing towards operational readiness, with a target completion date for the first phase set for fall 2026 [24][25] Q&A Session Summary Question: Can you elaborate on the revenue per transaction for the 407 ETR and its impact on 2026? - Management noted that the fourth quarter's revenue per transaction was affected by seasonality and weather, and it is too early to determine if this trend will continue into 2026 [41][44] Question: What are the reasons behind the provision for lifetime expected credit loss of the 407 ETR? - Management explained that the provision was due to changes in collection processes, but collections have returned to normal levels [49][51] Question: What is the outlook for pricing on the I-66 and I-77? - Management indicated that toll rates for I-66 are expected to increase above inflation, based on user value and economic activity [66] Question: What drove the strong Q4 performance in construction? - Management attributed the strong performance to positive developments in certain markets and change orders that occurred in the fourth quarter [65][68] Question: Will there be any pushback regarding the toll rate increase for the 407? - Management stated that there has been no significant pushback regarding the toll rate increase and that promotions will continue to be a focus [72][73]