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What were the key takeaways from Ferrovial’s earnings call?

- **North American dominance**: Toll Roads revenue +22.8% YoY, driven by Texas managed lanes and I-66/I-77 ramp-ups. Construction order book hits €16.8 billion, 49% in US.
- **Record shareholder returns**: €831M returned in 2024, with €2.2B+ committed for 2024-2026. €500M buyback program highlights cash flexibility.
- **Strategic pivot**: Sold Heathrow stake for €2B, invested €710M in IRB InvIT. New Terminal One on track for 2026 opening with 10 airline agreements.
- **Sustainability leadership**: 35.8% CO2 reduction vs. 2020, 26% injury rate reduction. New 2030 targets: 42% Scope 1/2 reduction, 25% Scope 3 reduction.
- **Risk management**: 97% local sourcing in Construction mitigates tariff risk. Toll Road soft caps protect margins during economic uncertainty.

**【Chairman's Opening Remarks】**
- **Record financial performance**: 2024 revenue of €9.5 billion (+6.7% YoY), EBITDA of €1.3 billion (+38.9% YoY), driven by North American Toll Roads and Construction growth.
- **Strategic asset rotation**: Sold 19.75% stake in Heathrow for €2 billion, generating €2.57 billion profit. Collected €947 million in dividends from infrastructure assets, a new high.
- **Shareholder returns**: Returned €831 million to shareholders in 2024, including €272 million in share buybacks. Announced a minimum €2.2 billion distribution for 2024-2026, with flexibility to increase based on investment opportunities.
- **Balance sheet strength**: Ex-infrastructure net debt of -€1.8 billion, reflecting disciplined capital allocation.

**【CEO Business Review】**
- **North American Toll Roads**: 
  - Texas managed lanes (NTE, LBJ, 35W) saw revenue per transaction growth of 6-12.5%, outpacing inflation. I-66 and I-77 delivered 33.2% and 11.7% revenue growth, respectively.
  - 407 ETR in Toronto achieved 14% revenue growth, with CAD1.1 billion in dividends (+15.8% YoY). Population growth in Greater Toronto (48% by 2046) supports long-term demand.
  - New pipeline includes I-285 East and I-24 Nashville, with four more projects expected to launch bids within three years.
- **Construction**: 
  - Adjusted EBIT margin of 3.9% (vs. 3.5% target), driven by Budimex's 8% margin and improved project mix. Order book at €16.8 billion, 49% in North America.
  - Record operating cash flow of €291 million, with €2.7 billion in pre-awards awaiting financial close.
- **Sustainability**: 
  - 26% reduction in serious injury/fatality rate vs. 2022; 35.8% CO2 reduction vs. 2020; 26.7% water consumption reduction vs. 2017.
  - New targets: 42% Scope 1/2 CO2 reduction by 2030, 25% Scope 3 reduction.

**【CFO Financial Highlights】**
- **Income Statement**: 
  - €9.5 billion revenue (+6.7% YoY), €1.3 billion EBITDA (+38.9% YoY). Infrastructure assets contributed €947 million in dividends.
  - Financial results from ex-infrastructure projects (e.g., Heathrow stake) drove €2.57 billion profit.
- **Cash Flow**: 
  - Operating cash flow of €2.6 billion from asset sales and €291 million from Construction. Total investments €1.6 billion (€710M in IRB InvIT, €469M in NTO).
  - Shareholder returns: €831 million in 2024, including €570 million for 2025 (€570M dividend/buyback + €500M buyback program).
- **Leverage**: 
  - Ex-infrastructure net debt of -€1.8 billion, reflecting strong cash generation and disciplined capital allocation.

**【Q&A Key Themes】**
- **Investment Strategy**: 
  - Prioritize North American toll roads, with pipeline of 6+ new projects. Explore airports (e.g., JFK Terminal One), data centers, and greenfield infrastructure.
  - Heathrow stake sale proceeds and IRB InvIT acquisition reflect asset rotation strategy.
- **Shareholder Returns**: 
  - €2.2 billion+ distribution commitment for 2024-2026, with flexibility to increase if investment pipeline slows.
  - €500M buyback program could be extended if no attractive opportunities arise in 2025.
- **Project Risks**: 
  - Construction delays (e.g., LBJ corridor work) impact near-term traffic but support long-term demand.
  - Tariffs and economic growth uncertainty could affect Canadian/US border traffic, but 97% of Construction materials sourced locally mitigates supply chain risk.
- **New Terminal One (NTO)**: 
  - 60% physical completion in 2024, on track for June 2026 opening. Signed 10 airline agreements, 6 LOIs, with final negotiations ongoing.
  - €2.55 billion bond refinancing completed, €742 million equity contributed to date.


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