Ferrovial's 38.9% Adjusted EBITDA Surge: A Recipe for Future Growth

Ferrovial, a global infrastructure giant, has just reported a staggering 38.9% increase in adjusted EBITDA for 2024, a remarkable feat driven by robust performance across all business areas. This impressive growth is a testament to the company's strategic vision and commitment to driving long-term success. Let's delve into the key factors behind this achievement and explore how Ferrovial plans to maintain this momentum in the coming years.

Ferrovial's 2024 adjusted EBITDA surge was fueled by strong performance in its core business segments:

1. Toll Roads Division: This segment recorded a 21.9% increase in revenue and a 22.8% improvement in adjusted EBITDA in like-for-like terms. The solid growth was primarily due to robust performance in North America, with traffic on 407 ETR in Canada growing by 4.6% and revenue rising 13.2% to CAD 1.3 billion. Additionally, the Express Lanes in the U.S. experienced solid growth in revenue per transaction, with I-66 Express registering a 34.4% increase. These trends suggest that the Toll Roads Division will continue to perform well in the future, driven by mobility and commuting patterns, and potential increases in revenue per transaction.
2. Construction Division: The Construction division ended the first nine months of the year with a record order book of $17.4 billion, with North America accounting for 49% and Poland 25%. Revenue amounted to $5.7 billion, an increase of 3.2% on a like-for-like basis. The Construction division reported adjusted EBIT of $220 million and an adjusted EBIT margin of 3.9%, on track to meet the 3.5% target for fiscal year 2024. This strong performance indicates that the Construction division will likely continue to contribute significantly to Ferrovial's overall performance in the future.
3. Airports Division: The Airports division registered strong growth in traffic, with Heathrow having its busiest first nine months ever, welcoming 63.1 million passengers between January and September, a 6.2% gain year-over-year. As a result of the solid demand experienced during the year, the airport upgraded its traffic projections for 2024 to a new record of 83.8 million passengers. This trend suggests that the Airports division will continue to perform well in the future, driven by increasing passenger traffic.



To maintain this momentum and continue driving growth in the coming years, Ferrovial's management has identified several strategic initiatives:

1. Infrastructure assets in growing areas: Ferrovial's CEO, Ignacio Madridejos, highlighted that the company's infrastructure assets are located in growing areas, which translates into higher dividends. This allows Ferrovial to take advantage of future growth opportunities. For example, the company received $532 million in dividends from infrastructure assets in North America during the first nine months of 2024.
2. Capital gains from divestments: Ferrovial registered the proceeds from the divestment of a 5% stake in IRB Infrastructure Developers and the sale of Amey and Serveo. These inflows were mainly allocated to shareholder distributions, the acquisition of 24% of IRB Infrastructure Trust, and equity investments in the JFK's New Terminal One. This strategy allows the company to reinvest in growth opportunities while maintaining a solid financial position.
3. Strategic acquisitions: Ferrovial has shown interest in strategic acquisitions to drive growth. In the first nine months of 2024, the company acquired a 24% stake in IRB Infrastructure Trust and made equity investments in the JFK's New Terminal One. These acquisitions align with Ferrovial's strategy to expand its presence in growing markets and diversify its revenue streams.

In conclusion, Ferrovial's 38.9% adjusted EBITDA surge in 2024 is a testament to the company's robust performance across all business areas. To maintain this momentum and continue driving growth in the coming years, Ferrovial's management plans to focus on infrastructure assets in growing areas, capitalize on capital gains from divestments, and pursue strategic acquisitions. These initiatives, supported by specific examples and data from the materials, demonstrate the company's commitment to continuing its strong financial performance.