Elodie Rall

Elodie Rall asked if there has been any political or press pushback regarding the 407 ETR's tariff increase for 2026. She also inquired if the intensity and impact of 407 ETR promotions for 2026 would be similar to 2025. Regarding the NTO project, she sought clarity on when financial impacts would be visible, when more financial visibility would be provided, and when communications would occur, given the pushed-back opening to fall 2026. Lastly, she asked about plans to update the market on strategy, shareholder return, or the NTO opening as the 2024-2026 plan concludes.

Answer

CEO Ignacio Madridejos stated that the 407 ETR's toll rates should be viewed in combination with promotions, and he is not aware of any relevant pushback. He confirmed that 2026 promotions will largely focus on peak hours, similar to 2025, with continued efforts for segmentation and learning. For NTO, Madridejos indicated that financial information would only be provided after the opening and initial operational numbers are available. He also mentioned that a new strategic plan would be prepared this year, with decisions on external communication to follow its finalization.

Elodie Rall asked if there has been any political or press pushback regarding the 407 ETR's 2026 tariff increase and whether the intensity of promotions for 2026 will be similar to or greater than 2025. She also inquired about the financial visibility and communication timeline for the NTO project, given its delayed opening to fall 2026. Lastly, she asked about plans to update the market on strategy and shareholder return as the Horizon 26 plan concludes this year.

Answer

CEO Ignacio Madridejos reported no relevant pushback on the 407 ETR's toll rate increase, considering the benefits of promotions. He confirmed that 2026 promotions will largely focus on peak hours, similar to 2025, with ongoing efforts for segmentation and learning. For NTO, he stated that financial information will only be communicated after its opening and initial operational numbers are available. He also mentioned that a new plan will be prepared this year, and decisions on external communication will follow its finalization.

Elodie Rall inquired about the drivers behind the Schedule 22 provision reversal in Q3 for 407 ETR, its implications for future penalties, and Ferrovial's outlook on Nasdaq-100 inclusion.

Answer

CFO Ernesto López Mozo clarified that the Schedule 22 provision reversal was primarily driven by increased mobility due to return-to-office mandates and the successful performance of targeted promotions. He noted that while the company is pleased with the performance, they would not comment on future Schedule 22 projections. Regarding Nasdaq-100 inclusion, Mr. López Mozo stated that the determination would be based on relative market capitalization at the end of November, and he would not speculate on the company's chances.

Elodie Rall inquired about the drivers behind the Schedule 22 provision reversal in Q3 for 407 ETR, the company's optimism regarding penalties decreasing to zero, and Ferrovial's chances of Nasdaq-100 inclusion.

Answer

CFO Ernesto López Mozo stated that the Schedule 22 reversal was driven by increased mobility from return-to-office mandates and the successful performance of targeted promotions. He noted 407 ETR is outperforming initial assumptions but declined to comment on future Schedule 22 projections. On Nasdaq-100 inclusion, he mentioned it depends on relative market cap at the end of November and would not speculate on chances.

Elodie Rall from JPMorgan Chase & Co. asked about the lower Schedule 22 provision in Q2, the competitive landscape for U.S. Managed Lanes, and the likelihood of a Nasdaq 100 inclusion.

Answer

CEO Ignacio Madridejos stated the lower Q2 Schedule 22 provision was due to more data showing promotions were successfully attracting users during peak times. CFO Ernesto López Mozo added that while the company's liquidity meets a key Nasdaq 100 requirement, inclusion depends on relative performance against other index members.

Elodie Rall sought expectations for 407 ETR's full-year traffic relative to 2019 levels and questioned the strategy of not consolidating the asset despite increasing the stake. She also asked about liquidity progress for a potential NASDAQ listing and the nature of feedback from U.S. investors, such as requests for more guidance.

Answer

Executive Ernesto Lopez Mozo declined to provide specific traffic guidance for the 407 ETR. He characterized the stake increase as a financially attractive investment, independent of crossing the 50% consolidation threshold. He confirmed U.S. trading liquidity is above NASDAQ's minimum requirements and noted that the primary request from U.S. investors is for longer-term dividend guidance.

Elodie Rall asked for the main drivers behind the strong tariff growth in Texas managed lanes, which surpassed the soft cap, with a particular focus on the 19.6% increase at NTE 35West.

Answer

Corporate Finance Director Ignacio Del Pino explained that the NTE 35West's significant revenue per transaction growth was influenced by the inclusion of the new, longer Segment 3C, a ramp-up in rates post-reopening, and a higher proportion of heavy vehicles. For the other assets, he attributed the above-inflation growth to a combination of inflationary adjustments and toll rate optimizations permitted under the soft cap framework.

Elodie Rall from JPMorgan Chase & Co. asked why the full-year guidance implies a potential slowdown in H2 EBIT growth after a strong H1, inquired about H2 volume trends in Europe, and requested an update on the Nigeria divestment.

Answer

CEO Miljan Gutovic explained that the guidance was kept consistent with what was issued in March, but he is positive about H2 and expects performance to be 'equally or even better than H1.' He stated the Nigeria divestment process is running, with an expected closing in H2 2025. For European volumes, he conservatively predicted a flattish H2 but noted potential upsides from recovery in some markets.

Elodie Rall from JPMorgan Chase & Co. asked why H2 guidance implies a slowdown, whether European volumes will turn positive, and for an update on the Nigeria divestment.

Answer

CEO Miljan Gutovic clarified they are positive on H2, expecting performance to be 'equally or even better than H1.' He projected a flattish H2 for European volumes with potential upside and confirmed the Nigeria divestment is progressing and expected to close in H2 2025.

Elodie Rall from JPMorgan Chase & Co. asked if the full-year guidance implied a slowdown in H2 EBIT growth, inquired about H2 volume trends in Europe, and requested an update on the Nigeria divestment.

Answer

CEO Miljan Gutovic expressed a positive outlook for H2, expecting performance to be 'equally or even better than H1,' and maintained the guidance set in March. He stated the Nigeria divestment is progressing and expected to close in H2. For European volumes, he conservatively projected a flattish H2 with potential for some upside.

Elodie Rall from JPMorgan Chase & Co. asked what level of price increase would be required in H2 to achieve a flat price-cost spread for that specific period. She also questioned Q4 volume expectations in Southern Europe due to a high comparison base and requested the working day impact for Q3 and Q4.

Answer

CFO Sreedhar N. stated that a 9% price increase would be needed in H2 to fully offset the €1.1 billion inflation for the half. COO, CEO & Director Benoit Bazin noted that while there is a high comparison base and a -2% working day impact in Southern Europe for Q4, underlying volume trends remain solid. Sreedhar N. confirmed the group-level working day impact was -0.5% in Q3 and is expected to be around -1% in Q4.

Elodie Rall of JPMorgan Chase & Co. followed up on pricing, asking if the strong performance meant the price-cost spread could be expected to be positive for the full year 2021. She also requested a progress update on ongoing divestments, including Lapeyre and the Netherlands distribution business.

Answer

CFO N. Sreedhar stated that while the price-cost spread was positive in Q1, the company's goal for the full year is to compensate for the rising inflation, which has accelerated. Pierre-Andre de Chalendar provided updates on divestments, noting Lapeyre should be completed by summer, the Netherlands process is proceeding, and the Pipe business in China has been sold, with no short-term plans for the rest of the Pipe division.

Elodie Rall requested more granularity on the H2 operating profit guidance by division, its potential magnitude, and an update on the impact of renovation stimulus plans in France and the broader EU Green Deal.

Answer

CFO N. Sreedhar stated that while he couldn't quantify the H2 profit increase, he expected margin improvement in all segments except High Performance Solutions (HPS). CEO Pierre-André de Chalendar noted that customer backlogs in France are high and the stimulus will be a significant factor in 2021. He added that the EU Green Deal's impact will be significant but occur later, particularly for public building renovations.