Ruairi Cullinane

Ruairi Cullinane requested commentary on the pricing strategy for I-66 and I-77 at the start of 2026, specifically if another year of double-digit pricing increases in revenue per transaction growth is reasonable. He also asked what factors drove the significant increase in EBITDA for Ferrovial Construction in Q4 and whether a decrease in Schedule 22 payments is expected, considering higher tolls, rush hour traffic, and promotions.

Answer

CEO Ignacio Madridejos stated that Ferrovial does not provide 2026 guidance but expects I-66 toll rates to grow above inflation, driven by user value and congestion. He attributed Ferrovial Construction's strong Q4 performance to positive developments from change orders and late-stage projects with mitigated risks, reiterating the long-term 3.5% EBIT margin target. For Schedule 22, he explained that promotions aim to maximize EBITDA by balancing traffic, revenue per transaction, and Schedule 22 payments, rather than targeting a zero payment.

Ruairi Cullinane asked for commentary on the pricing of I-66 and I-77 at the start of the year, specifically if another year of double-digit pricing increases in revenue per transaction growth is reasonable. He also questioned what drove the more than doubling of EBITDA in Ferrovial Construction during Q4. Finally, he inquired if, considering higher tolls, rush hour traffic, and targeted promotions, an overall decrease in Schedule 22 payments could be expected.

Answer

CEO Ignacio Madridejos stated that no 2026 guidance is provided, but I-66 toll rates are expected to increase above inflation, driven by value to users, congestion, and economic activity, as both I-66 and I-77 have freedom to set toll rates. For construction, he attributed the strong Q4 to positive developments from change orders and projects in later stages with mitigated risks, reiterating the long-term 3.5% EBIT margin target without future guidance. Regarding Schedule 22, Madridejos explained that promotions aim to maximize EBITDA by considering traffic, revenue per transaction, and Schedule 22, rather than targeting a zero payment.

Ruairi Cullinane of RBC Capital Markets asked about the year-over-year earnings decline in Ferrovial Construction in Q2 and sought commentary on the sustainability of the company's low tax rate.

Answer

CEO Ignacio Madridejos explained the Q2 margin decline in Ferrovial Construction resulted from higher costs for IT systems and increased bidding expenses for a strong project pipeline. CFO Ernesto López Mozo clarified that the low tax rate was influenced by non-taxed capital gains and that the underlying average rate is closer to 20%, with U.S. investments providing tax deferrals via accelerated depreciation.

Ruairi Cullinane questioned how revenue per transaction growth on the I-77 in March compared to the Q1 average, considering the reopening of the alternative I-40 route. He also asked about potential labor availability issues in the construction sector related to U.S. immigration policies.

Answer

Executive Ernesto Lopez Mozo clarified that the I-40 reopening was not a full reopening, allowing the I-77 to continue benefiting from heavy traffic, which was captured by dynamic pricing. On the topic of labor, he stated that Ferrovial has not experienced significant pressure on resources recently and that its workforce is fully permitted, though they will continue to monitor the situation.

Ruairi Cullinane asked for an explanation of the notable EUR 75 million positive swing in adjusted EBIT within the 'Other' segment and whether the underlying drivers are expected to persist in future quarters.

Answer

CFO Till Streichert attributed the improvement to two main factors: lower project expenses within headquarter functions and favorable foreign exchange effects. He noted that while the company can control project spending, the impact from foreign exchange rates is inherently unpredictable.

Ruairi Cullinane of RBC Capital Markets asked for an explanation of the notable EUR 75 million positive swing in adjusted EBIT within the 'Other' segment and whether the drivers of this improvement are sustainable.

Answer

CFO Till Streichert attributed the positive swing to lower project expenses at the headquarter level and favorable foreign exchange effects. He indicated that while project expenses are controllable, the foreign exchange impact is inherently unpredictable and not necessarily sustainable.