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Ferrovial

Ferrovial - Integrated annual report 2013 / Performance in the year

Ferrovial Services maintained its leading position in the UK and Spanish markets. It also reinforced its position in Poland, Chile, Qatar and Portugal in 2013.

Having completed the integration of Amey and Enterprise in the UK, and of Cespa and Ferroser in Spain, Ferrovial Services is a leading provider of infrastructure-related services.

With a footprint in over 150 major cities, the company attained a record 3.7 billion euro in revenues in 2013, 26% more than in 2012. The order book also reached an all-time high of 17.7 billion euro, 40% more than at the end of 2012. This increase is due to consolidating nine months of Enterprise and one year of Steel Ingeniería, which were acquired during the year, and to landing significant contracts in the United Kingdom and Spain. Order intake amounted to over 2.5 billion euro in the fourth quarter alone. 

Operating cash flow in the year totalled 359 million euro, with very good performance in both Spain and the UK. In the last two years, Ferrovial Services’ operating cash flow totalled 918 million euro.

Two strategic acquisitions

In February, Ferrovial acquired Enterprise, one of the UK’s leading providers of services to utilities (power, gas and water) and the public sector. Ferrovial Services acquired the company from international investor 3i Group for 474 million euro. The merger of Amey and Enterprise created a company with a much broader service offering and one of the most diverse players in the UK market.

Since Enterprise’s integration in Amey, it became part of a single operating company. This acquisition has provided an inroad into the utilities services sector and the growing environmental services market in the UK, while also creating value through synergies within the resulting Amey.

As a result of the integration, Amey has one of the most diverse service portfolios in the UK public and regulated sectors. With 21,000 employees and annual revenues in excess of 2.6 billion euro, the company covers a broad range of end-to-end services, from road and railway maintenance to waste management and treatment through to utilities maintenance services, facilities management and justice services. All of these services are underpinned by an asset management capability.

Ferrovial Services also acquired 70% of Steel Ingeniería, a specialized mining services company in Chile, for 28 million euro in 2013. This operation has enabled Ferrovial Services to enter Latin America and the booming mining sector.

Steel Ingeniería, founded in 1998, is specialized in industrial maintenance, mechanical and electrical assembly, and mine operation and maintenance. Chile is the world’s third-largest copper producer and holds close to 30% of the world’s reserves. Chilean mining companies outsource over 5 billion euro in services.

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A new organization

In 2013, Ferrovial Services also announced a new organization structure that addressed the challenges and positioned the business to best optimise the opportunities whilst growing profitably.

The new organization is based on three main principles:

  • Segmenting the company into geographic Business Units: UK, Spain & International.
  • Establishing new Centres of Excellence that develop expertise which can be exploited by the three Business Units.
  • Creating a structure that facilitates integrated service delivery and cross-selling.

Centres of Excellence, knowledge hubs

Ferrovial Services has created four Centres of Excellence to develop additional capabilities for the Business Units. Each Centre of Excellence comprises multidisciplinary teams of experts in their respective areas of knowledge.

  • The Centre of Excellence for Cities is designed to promote and scope a new approach to municipal service delivery. It aims to lead and develop a proprietary model using technology and data to reengineer the way that services are delivered and to engage citizens in the use of technology to ultimately optimise economic efficiency and service quality. This Centre of Excellence is working with world-leading institutions such as Massachusetts Institute of Technology (MIT) and the Centre for Intelligent Infrastructure Innovation (Ci3), among others.
  • The Centre of Excellence for the Environment is focused on developing technical competence for the Business Units throughout the environmental assets’ life cycle, from the initial planning and draft designs through to designing the most appropriate solution, bidding for opportunities, technical supervision during construction and assistance during operations. The Centre constantly drives improvements, shares best practice and helps to implement changes with the Business Units. This Centre of Excellence also identifies environmental and industrial risks and actively engages in waste management research.
  • The Infrastructure Maintenance Centre of Excellence supports and develops projects across capabilities such as energy efficiency, facilities management or road maintenance. Its primary objective is to support the Business Units to share and utilise best practices in sales and tenders, starting up new contracts, and searching for new lines of business. This Centre shares knowledge, codifies standards, manages a network of experts, and innovates infrastructure maintenance.
  • The Asset Management Centre of Excellence supports all the Business Units with consulting, design and end-to-end management of infrastructure assets in a structured, predictable way that provides added value to clients. This Centre also enables Ferrovial Services to gain a foothold in new markets with a distinctive, unique offer that creates a point of differentiation from the competition.

Solid foundations for future growth

In summary, 2013 was a key year in the establishment of Ferrovial Services’ profitable growth strategy. Operating performance in the core markets remains solid, acquisitions in the year reinforced business capacities and competitive position, and a new organization structure was put in place to continue driving profitable growth.