Marcin Wojtal

Marcin Wojtal asked about the NTO project's delay to fall 2026, specifically if it entails any increase in project cost, additional equity contributions, or an impact on the equity IRR. He also questioned Ferrovial's dividend policy for the 407 ETR, given its significant 36% dividend increase in 2025, and whether the asset is still considered under-levered. Lastly, he inquired about any further steps Ferrovial is considering to become more of a U.S. company, such as a switch to US GAAP accounting, following its U.S. listing.

Answer

CEO Ignacio Madridejos stated that NTO's project cost remains substantially close to budget, with no expected material deviations or additional equity funding for Phase A, and the minor delay will not impact the IRR. CFO Ernesto López Mozo explained that the 407 ETR's leverage should reflect its solid financial performance, and while there's headroom for dividend uplift, the capital structure is adequate to current ratings. He also noted that while US GAAP accounting has been analyzed, there is no current market demand or short-term plan for its adoption.

Marcin Wojtal asked about the NTO project delay to fall 2026, specifically if it would lead to increased costs, require extra equity contributions, or impact the project's equity IRR. He also inquired about the 407 ETR's dividend policy, given the significant 36% increase in 2025, and whether the asset is still considered under-levered. Finally, he asked if Ferrovial is considering further steps in its U.S. listing journey, such as switching to US GAAP accounting.

Answer

CEO Ignacio Madridejos stated that the NTO project cost remains close to budget, with any deviation expected to be immaterial and dependent on contractor claims. He confirmed no additional equity funding is expected for Phase A, and the minor delay will not affect the project's IRR, with the primary impact being uncollected revenues. CFO Ernesto López Mozo explained that the 407 ETR's leverage should reflect its solid financial performance and current ratings, indicating headroom for further distributions. He also noted that while US GAAP has been analyzed, there is no current market demand for it, so it will not be implemented in the short term.

Marcin Wojtal asked about the progress and strategy of the EUR 500 million share buyback, specifically its completion timeline and the rationale for U.S.-only execution, and whether a new business plan would be presented soon.

Answer

CFO Ernesto López Mozo affirmed the commitment to deliver EUR 2.2 billion to shareholders by the end of 2026, acknowledging the need to catch up on buybacks. He stated that buybacks have been primarily in the U.S. to support liquidity but could be executed elsewhere. Regarding a new business plan, Mr. López Mozo mentioned that while no decision has been made, the company would need to update the market, especially given upcoming important bids next year, but no official date is set.

Marcin Wojtal inquired about the progress of the €500 million share buyback, its completion timeline, and why it's primarily executed through the U.S. listing. He also asked if a new business plan presentation is expected within the next 18 months.

Answer

CFO Ernesto López Mozo confirmed commitment to the €2.2 billion shareholder distribution target by the end of 2026 (not May 2026), acknowledging a need to catch up on buybacks. He noted buybacks have been small and primarily in the U.S. to support liquidity but could be done elsewhere. He stated there's no official date for a new business plan but acknowledged the need to update the market, especially with upcoming bids.

Marcin Wojtal from Bank of America Merrill Lynch asked about the traffic impact on the 407 ETR from toll removal on an adjacent road and the company's plans for adopting U.S. GAAP reporting.

Answer

CEO Ignacio Madridejos said it was too early to quantify any traffic benefit to the 407 ETR from the toll removal. CFO Ernesto López Mozo acknowledged that U.S. GAAP is necessary for inclusion in most U.S. indices and the company is analyzing it, but there are no short-term plans to switch.

Marcin Wojtal asked if the acquisition of an additional stake in the 407 ETR provides any incremental governance or influence over its operations. He also sought confirmation on whether the transaction is expected to generate a double-digit equity IRR for Ferrovial.

Answer

Executive Ernesto Lopez Mozo stated that he could not comment on governance matters until the transaction is officially closed. However, he did confirm that Ferrovial was targeting a double-digit equity IRR for the investment, noting that the target for a brownfield asset like this is typically tighter than for a greenfield project with construction risk.

Marcin Wojtal questioned the company's confidence in completing the Heathrow transaction by year-end and asked if any hard deadlines exist within the shareholder agreement.

Answer

CFO Ernesto Lopez Mozo declined to provide any new commentary on the Heathrow divestment, stating that the company would provide updates in due course and offered no comment beyond his prepared remarks.

Marcin Karol Wojtal of Bank of America asked about the drivers for margin improvement in Support Services given the revenue decline, and questioned the company's capacity and potential win ratio for upcoming HS2 tenders.

Answer

CFO Philip J. Harrison attributed the margin improvement to cost-cutting in power and gas/water, as well as favorable timing in the gain-share cycle for gas and water contracts. Group Chief Executive Leo M. Quinn expressed strong interest in future HS2 tenders for rail systems and the Crewe extension, stating that the company has been strategically investing in key skills and capabilities to absorb the work.

Marcin Wojtal from Bank of America Merrill Lynch asked for the expected total cash outflow to complete the remaining UK legacy projects and whether the cash performance on these projects had outperformed original expectations.

Answer

CFO Phil Harrison stated that the cash performance on the legacy projects has been broadly in line with expectations, with some positive and negative outcomes balancing each other out. He confirmed that a further £50 million cash outflow is anticipated in 2017 related to the completion of these contracts.