Ferrovial Q1 Earnings Call Highlights

Key Points

• Solid Q1 performance and net cash position: Consolidated revenue rose 10.2% like‑for‑like with adjusted EBITDA up 15% and adjusted EBIT up 10.6%, while net debt excluding infrastructure projects was negative €1.2 billion (net cash) and treasury share purchases totaled €162 million.
• North American tolls drove growth: 407 ETR posted traffic +8.2%, revenue +20% and EBITDA +25.4% with a CAD 500 million dividend approved for Q2, and Texas managed lanes saw double‑digit revenue‑per‑transaction gains largely driven by camera/vehicle‑classification technology.
• Project progress and construction strength: JFK’s New Terminal One is 87% complete with phase A targeted for fall 2026 and €978 million equity invested, while construction margins remained stable, backlog hit a record €17.6 billion, and the group issued €500 million of bonds alongside a €400 million scrip dividend.

Ferrovial NASDAQ: FER reported what Chief Financial Officer Ernesto López Mozo called a “solid start to the year” in the first quarter of 2026, highlighting growth across its core businesses—led by North American highways—alongside continued progress at the New Terminal One project at JFK Airport and stable construction margins despite higher investment in bidding activity and IT.

On a consolidated basis, López Mozo said revenue grew 10.2% on a like-for-like basis, while adjusted EBITDA increased 15% and adjusted EBIT rose 10.6%, also like-for-like. He added that net debt excluding infrastructure projects stood at negative EUR 1.2 billion at the end of the quarter, meaning the group held net cash. The CFO said treasury share purchases totaled EUR 162 million during the period.

North American toll roads: 407 ETR posts strong quarter

Ferrovial’s 407 ETR toll road in Canada delivered another strong quarter, with traffic up 8.2% year-over-year in the first quarter of 2026. López Mozo attributed the increase to targeted driving offers and higher mobility tied to “a higher percentage of on-site employees,” partially offset by unfavorable winter weather.

Revenue at 407 ETR grew 20% in the quarter, and toll revenue increased 22.1%, reflecting a mix of higher toll rates effective Jan. 1, 2026 and higher traffic volumes, according to the CFO. EBITDA rose 25.4% versus the prior-year quarter, which included a Schedule 22 provision of CAD 8.1 million, “significantly lower” than in the first quarter of 2025.

López Mozo cautioned that traffic comparisons may be distorted due to differences in promotions between periods. He noted that in Q1 2026 the asset had three months of targeted promotions, whereas in Q1 2025 broad-based promotions only began in March. He emphasized that the “demand segmentation strategy continues to work really well,” helping balance pricing, traffic distribution, and service levels while focusing on EBITDA as the key metric.

On dividends, Ferrovial did not receive 407 ETR dividends in the first quarter, but López Mozo said the board approved a CAD 500 million dividend to be paid in the second quarter of 2026. Later in the Q&A, he said the higher dividend profile was tied to both performance and improved financing, including “additional debt,” but he declined to provide guidance for the remainder of the year.

Texas managed lanes: revenue per transaction rises well above inflation

In Dallas-Fort Worth, Ferrovial’s managed lanes produced “double the revenue per transaction growth,” which López Mozo said significantly outpaced U.S. inflation despite adverse weather, particularly in January, and more closures than in the prior year.

• NTE: Traffic fell 3.6% due to capacity-improvement works and weather, but revenue rose 13.1% and adjusted EBITDA increased 11.2%, including a $2.4 million revenue share accrual.
• LBJ: Traffic declined 1.5% due to construction in adjacent corridors and weather impacts; revenue increased 9.8% and adjusted EBITDA rose 8.9%.
• NTE 35W: Traffic increased 1% despite weather and congestion at certain entry/exit points; revenue grew 18.3% and adjusted EBITDA increased 18.1%, including $7.5 million of revenue share accrued.

Revenue per transaction climbed sharply across the Texas assets, with NTE up 18.3%, LBJ up 11.5%, and NTE 35W up 17.3%. López Mozo said the increase was driven by a favorable traffic mix with higher heavy vehicle volumes, supported by camera-recognition technology enhancements implemented through 2025 and 2026 that improved vehicle classification. He also cited an increase in “mandatory mode events” at NTE and NTE 35W.

In response to analyst questions, López Mozo said technology was “the main driver” of revenue per transaction improvements, while better performance from commercial and heavy vehicles also contributed. He added that the technology-related benefit should “diminish” over coming months as implementation nears completion, while other factors will depend on economic conditions. On rising U.S. gasoline prices, he said the company had not identified any significant shift in behavior during the quarter and would continue monitoring.

I-66 and I-77: pricing strength offsets mixed traffic

Ferrovial’s I-66 managed lanes posted what López Mozo described as a “very solid quarter,” with traffic up 8.3% year-over-year despite adverse weather. Revenue per transaction increased 4.9%, and total revenue rose 13.6%. Adjusted EBITDA increased 16.1%.

At I-77, traffic fell 5.6%, which López Mozo attributed to adverse weather and a difficult comparison against the first quarter of last year, when alternative routes were partially closed following hurricane-related events. Revenue per transaction increased 14.2% due to higher toll rates, but adjusted EBITDA declined 11.9%. López Mozo said the decline reflected a step-up in the revenue share band from 25% to 55%, calling it “largely a first year effect” expected to normalize as revenues grow within the new band. He said Q1 adjusted EBITDA included the accrual of EUR 8 million of revenue share.

On potential future dividends and balance sheet optimization, López Mozo said the I-66 has recapitalization potential, consistent with the business plan referenced at bid stage, but added it would not occur “this year nor the next.”

Airports: New Terminal One reaches 87% completion; Dalaman faces off-peak season

At the New Terminal One (NTO) project at JFK, López Mozo said construction and integration are progressing through what he called “a crucial year.” He said the contractor has communicated an updated target in which completion of the first phase is expected in fall 2026. During the first quarter, the project began its first operational readiness and airport transfer trials and reached 87% construction progress.

On airline engagement, López Mozo said the project has secured commitments with 30 airlines, including 21 executed agreements and nine letters of intent. As of March 2026, total equity invested stood at EUR 978 million, with EUR 64 million pending and expected to be injected in 2026.

Addressing questions about timing and penalties, López Mozo said Ferrovial expects phase A completion in fall 2026, though delivery depends on contractor resourcing. He added that penalties payable by Ferrovial would require a “huge delay”—beyond June 2027—something he said is not expected. He also said the company can apply liquidated damages to the contractor if obligations are not met, though he described that as something settled “a long time” later.

At Dalaman Airport, López Mozo said the first quarter reflected the typical off-peak season. Domestic traffic supported results, with traffic up 9.8%, while international volumes were affected by geopolitical challenges in the Middle East. He said the airport remains predominantly international on a full-year basis and that the peak season began in late March, but he cautioned performance is expected to be affected by instability in the region.

Construction: stable margins, record backlog, and strong cash flow

In construction, López Mozo said margins were stable year-over-year despite higher bidding and IT costs aimed at supporting future growth. He noted:

• Budimex maintained stable margins at 6.5% EBIT despite lower volumes due to adverse weather.
• Webber delivered higher margins benefiting from increased production and operating leverage.
• Ferrovial Construction margins were slightly lower due to higher investment costs related to bidding and IT, with revenues stable.

The order book remained at an all-time high of EUR 17.6 billion, up 0.5% like-for-like versus December, excluding about EUR 1.3 billion of additional projects not yet included because they are pending award or financial close, the CFO said. He added that nearly half of backlog is in Ferrovial’s core U.S. and Canada markets. Construction operating cash flow (excluding tax and dividends) totaled EUR 144 million, driven mainly by advance payments and compensations in the U.S. and Canada.

On capital allocation and financing, López Mozo said dividends from projects were “small” in the first quarter, including some from IRB in India and the Silvertown Tunnel in the U.K., and he reminded investors that managed lane dividends tend to arrive later in the year. He also said “other cash flows from or used in financing activities” totaled EUR 421 million, including the issuance of EUR 500 million in bonds in March. He added that the company announced its first scrip dividend totaling EUR 400 million.

Looking ahead, López Mozo told analysts that Ferrovial expects award decisions in the U.S. managed lanes market based on public timelines, citing Tennessee in late August and Atlanta in mid-to-late October. He also said the company’s growth strategy and remuneration plans are linked, with an update likely “not this year, but early next year,” depending on how Ferrovial balances growth and distributions.

About Ferrovial NASDAQ: FER

Ferrovial, SA is a Spanish multinational infrastructure company headquartered in Madrid that develops, constructs, operates and maintains transport and urban infrastructure. Its core activities include the design and construction of large civil engineering projects, the development and operation of transport concessions such as toll roads and airports, and the provision of urban and industrial services and maintenance. The company typically operates through long-term concession and public-private partnership models, combining construction expertise with asset management and operations.

Within its operating model, Ferrovial's business spans construction contracting, concession management and services.

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