Chief Executive Officer, Logista Integral
Ferrovial | Annual Results 2018 - Íñigo Meirás
Íñigo Meirás, CEO, discusses Ferrovial 2018 results. https://newsroom.ferrovial.com/en/press_releases/annual-results-2018/
About Íñigo Meirás
Íñigo Meirás, CEO of Logista, said in July 2020 that the COVID-19 crisis "breaks paradigms" and "is demonstrating that teleworking works." He noted that Logista was operating at about 80% capacity during the confinement and described the situation as a short-term crisis, expressing optimism that the company would return to normal within three months. He declined to criticize the Spanish government's handling of the pandemic, stating that "making destructive or constructive criticisms leads to little" and that the government, like business managers, was facing an unprecedented crisis. In his previous role as CEO of Ferrovial, Meirás described 2019 as "a transformational year" focused on transport infrastructure investment, particularly in U.S. toll roads and airports. He announced the company's decision to classify its entire services division as available for sale, a move aimed at concentrating on transport infrastructure and recognizing a provision for the impairment of its investment in Amey without cash outflow.
Transcript (20 segments)
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Interviewer0:05
Today we'll be talking to Mr. Meirás, who is CEO here at Ferrovial. Mr. Meirás, how would you describe Ferrovial's performance last year?
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Íñigo Meirás0:13
Our main assets continued to perform as only in 2018. It drove around 80 million passengers in a year, while traffic continued to grow on Highway 407 in Canada and non-toll roads in Texas. These assets are characterized by increasing traffic, client satisfaction, and profits, making a good contribution in the form of dividends. Cost and revenues improved as the large projects in the United States started up, but margins remain under pressure. The construction backlog remains strong, around 11 billion euros. The bottom line was affected by a contract with Birmingham City Council and the impairment because of this subsidiary's lower book value. Classified, the services division is available for sale, which complicates comparison with the previous year. Nevertheless, the company's good performance enables shareholders' remuneration to stay at the current levels of 520 million in the year.
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Interviewer1:18
This way, you made an important announcement.
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Íñigo Meirás1:20
The sale of the services division and the provision for AMI. After ending the review that we announced last year, we have decided to classify the entire services division as available for sale. Our goal is to focus on developing the company's transport infrastructure business. This means classifying the services business as discontinued operations at fair market value, and that allows us to recognize a provision for the impairment of our investment in AMI, but without any cash outflow. AMI has been affected by the situation of the UK services sector in recent years, mainly because of budget cuts by local governments and by the contractual dispute with Birmingham City Council.
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Interviewer2:07
What is the strategic context for this transaction?
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Íñigo Meirás2:10
Throughout its history, the company has always been redefining its strategy. In the 90s, it divested its agriculture and tedious businesses to focus on the core business. Between 2006 and 2009, it pulled out of car parts and real estate businesses. So this is nothing new for us. The result was a more focused company that is supported by the markets and investors. We are experiencing a change in mobility, new technologies, and social customs in transport that have a major impact. Changes in mobility have done so many cities, infrastructure needs, and how people work. We want to be ready with a company that is more focused on transport infrastructure by innovating and investing in these markets.
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Interviewer3:04
One of your biggest markets is the United States. How did it perform last year?
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Íñigo Meirás3:09
The US is a fantastic market. We have sizeable investments in cutting-edge toll roads and strong growth prospects in the coming years. The managed lanes in Texas will start paying dividends this year, which is very good news for us. Moreover, NT 35 West opened to traffic, and this year we also see the opening of the I-77 in North Carolina, while expansion is already underway on the I-66 in Virginia. And at Denver Airport, we are also tracking plans for new toll roads under the managed lanes approach, and we are keeping a close eye on a number of fiber projects that will come to the market in the coming years.
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Interviewer3:49
Mr. Meirás, however, the company's new business is performing.
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Íñigo Meirás3:57
We are very satisfied with those mobility projects. For example, Zity, the car-sharing venture with Renault in Madrid, had a great first year. We have registered over 160,000 users. We are planning to extend their services to other cities.
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Interviewer4:14
How do you see the United Kingdom and the situation created by Brexit?
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Íñigo Meirás4:20
Ferrovial has taken a number of steps, such as protecting its dividend flow from foreign exchange rates and moving its registered office to the Netherlands so that it remains under EU legislation. But the United Kingdom continues taking decisions such as the British Parliament's approval for the expansion of Heathrow Airport. That investment, which is pending the last approvals, will be one of the largest private sector infrastructure investments in Europe in the coming years. We remain committed to the UK, a country where all our business lines have sizeable investments.
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Interviewer4:57
Mr. Meirás, companies are much more than just operating or financial results, aren't they?
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Íñigo Meirás5:04
Indeed, Ferrovial pays particular attention to those issues since we see ourselves as an active member of society. We focus considerably on the SDGs. We continue to be members of leading sustainability indices such as Dow Jones and FTSE4Good, and we have achieved the highest score from the Carbon Disclosure Project. We also continue to invest actively in communities, particularly water and sanitation projects in very disadvantaged towns and villages. Additionally, we are particularly satisfied with the improvement in workplace accident rates.
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Interviewer5:41
To conclude, what are the main challenges you face in 2019?
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Íñigo Meirás5:47
2019 will be a transformational year for Ferrovial. We must seize the opportunity offered by plans for investment in infrastructure, mainly in the US and particularly in toll roads and airports. It is a transformation shaped by our strategy, sustainability, and innovation.
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Interviewer6:04
Would you care to add anything?
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Íñigo Meirás6:07
Well, I would like to thank our shareholders and investors for their trust, and our professionals for their hard work. These are exciting times ahead, and I will maintain their superior performance. We will continue to work hard, focusing on innovation and with a commitment to society, so that Ferrovial continues to play the role that has characterized it in recent years.
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Interviewer6:31
Mr. Meirás, thank you very much.
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Íñigo Meirás6:31
Thank you.