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Ferrovial

Ferrovial - Integrated annual report 2013 / International Construction

The international construction division operates in all spheres of civil works and building, with subsidiaries such as Budimex in Poland and Webber in Texas, and stable local offices in countries that are considered of strategic interest. There are currently offices in the United States, Canada, Poland, the UK, Ireland, Portugal, Chile, Colombia, Peru, Puerto Rico, Brazil, Qatar, UAE, Saudi Arabia, India and Australia.

Webber

In 2013 revenue stood at 3.012 billion euro (not including the international operations of Cadagua), up 2% on the previous year (5% at a constant exchange rate). The main strategic markets (Poland, US, Canada and UK) have accounted for more than 90% of total international sales, with the share of the United States being 40% of this figure.

The backlog maintains its high levels at 5.393 billion euro (not including the international operations of Cadagua), though it did suffer a 9% drop with respect to 2012 due fundamentally to the deconsolidation of the work pending execution on the highways of Greece for 406 million euro and to the exchange rates, without which the drop would have been 2%. However, the backlog still represents 21 months of production at the current rate of execution.

The main contracts awarded in the year, apart from those indicated below for Budimex and Webber, include the NTE Extension Highway in the United States (735 million euro, in a JV with Webber at 75%-25%), the extension of the M8 M73 M74 highway network in Scotland (372 million euro, in a JV at 80%), the Batinah Highway in Oman (260 million euro, in a JV at 50%), the civil works and tunnels of section 4 of Line 3 of the subway in Santiago, Chile (65 million euro), the Nipigon cable-stayed bridge in Canada (78 million euro, in a JV at 50%), and the extension of the BR116 highway in Brazil (69 million euro, in a JV at 50%).

Work on several projects was also begun, including the new parking platforms and auxiliary access/service areas for Heathrow’s Satellite Terminal 2B in the United Kingdom, the N3 road from Butlersbridge to Belturbet in Ireland and the Ituango Hydroelectric Station Tunnels in Colombia. It should be noted that the construction phase of Heathrow’s Terminal T2A has been completed in 2013 and that it is undergoing operational tests for the 2014 inauguration. The project has been underway for more than five years from the start of the design and preconstruction process in 2008.

Awards received during the year include several in connection with Heathrow’s Terminal T2A, such as the Constructing Excellence award and the RoSPA Gold Award for Accident Prevention (in 2013, the project achieved the national record of cumulative hours with no reportable incidents) and the Green Apple for environmental and sustainability best practices. Other prizes received include the Globe ARTBA Environmental Excellence award for the LBJ Express highway.

Budimex

Budimex is Poland’s largest construction company in terms of business volume and stock market capitalization and a Ferrovial Agroman subsidiary since 2000. The company is involved in all types of civil works, building, industrial and real-estate projects.

In 2013 it had revenue of 1.099 billion euro, 23% down on 2012, with the backlog down 14% to 1.044 billion euro. These declines are a reflection of the general fall in the sector in Poland due to the end of the 2007-2013 European Funding cycle and the 2012 European Cup, and have been especially pronounced in civil works on highways. However, the sector is expected to recover as of 2014-2015, supported by the improvement in volume of awards in 2013 with respect to the previous year.

In 2013, the biggest contracts awarded were the Pomerania metro railroad line (136 million euro), the Tarnow-Rzeszow section of the A4 highway (187 million euro, in a JV at 50%), the West Rzeszow-Central Rzeszow section of the A4 highway (36 million euro), the Clinical Hospital at Bialystok (33 million euro), the Chemistry School at the University of Krakow (31 million euro), an industrial complex for copper production in Glogów (28 million euro) and the extension of the runway at Warsaw Airport (26 million euro).

During the year, various large contracts were completed, including the A4 Jaroslaw-Radymno highway, the Lublin beltway, the north Jêdrezejowa beltway, the new headquarters of the Museum of Silesia and the Serocku Convention Center.

Awards earned include the Eurobuild Award as “Best Construction Company” on the Warsaw Stock Exchange, the seven first prizes and the five second prizes at the Construction of the Year PZiTB event from the Polish Highway Engineer Association, the Greater Pearl of Polish Economy from the Polish Market Journal, the Created in Poland Business Superbrand 2013/14 and its ranking among the top three construction/real estate companies as Most Desired Employer.

FB Serwis, a joint subsidiary of Budimex and Ferrovial Servicios for highway maintenance and Facility Management, continued to increase its backlog of contracts with the 2013 award three-year maintenance for Warsaw National Stadium.

The Budimex subsidiary Danwood, which operated in the construction and installation of prefabricated wood houses, was sold in late 2013. This business activity was considered non-core and was therefore sold for a price of 57 million euro once an investor willing to pay a value that reflected the company’s potential was found.

Webber

A subsidiary of Ferrovial Agroman since 2005, it is the largest road construction company in Texas (United States), specializing in the construction of civil infrastructure works, and a leader in the production of recycled construction aggregates in Houston. Webber recorded sales of 690 million euro in 2013, 17% more than in the previous year, due to rapid execution of the major contracts for the NTE and LBJ highways.

Webber had a backlog of 1.095 billion euro, 15% less than in 2012, due to the high levels of contract execution mentioned above, but still representing more than 22 months of production for the construction business.

The most relevant awards include the NTE Extension Highway (735 million euro, in a JV with Ferrovial Agroman, with Webber’s percentage at 25%), as well as works for the Texas Department of Transportation (TxDOT) for the US 290 highway (45 million euro), the Denton FM 1171 highway (36 million euro) and the I-10 Bexar County highway (30 million euro).

Webber celebrated the 50th anniversary of its inception in 2013, and was distinguished for the third consecutive year by the prestigious journal Engineering News Record as the leading highway contractor in the state of Texas.