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May 8, 2026 – Q1 2026 Earnings Conference Call
Amsterdam May 8, 2026 – 15:00 CEST – Edited Transcript of the Q1 2026 Earnings Conference Call
CORPORATE PARTICIPANTS
Ernesto López Mozo, Ferrovial, N.V. – CFO
Silvia Ruiz, Ferrovial, N.V. – Global Head of Investor Relations
ANALYST PARTICIPANTS
Cristian Nedelcu, Analyst, UBS
Dario Maglione, Analyst, BNP Paribas
Elodie Rall, Analyst, JP Morgan
Graham Hunt, Analyst, Jefferies
Harishankar Ramamoorthy, Analyst, Deutsche Bank
Jose Manuel Arroyas, Analyst, Santander
Luis Prieto, Analyst, Kepler Cheuvreux
Marc Ip, Analyst, Citi
Marcin Wojtal, Analyst, Bank of America
Nicolas Mora, Analyst, Morgan Stanley
Silvia Ruiz, Ferrovial, N.V. – Global Head of IR
Good morning or good afternoon, everyone. This is Silvia Ruiz speaking, and I would like to thank you and welcome you
to Ferrovial's conference call to discuss the company's operating results for the first quarter of 2026. I am joined here
today by our CFO, Ernesto Lopez Mozo. Just as a reminder, both the results report and presentation were made available
on our website yesterday evening after the U.S. market was closed.
The company's 2026 investor presentation and factbook is expected to be available on the company's website shortly
after this conference call concludes.
At the end of the presentation today, there will be a Q&A session. You will have the opportunity to ask questions live.
In order to do so, you will need to join the call through the conference call channel and press star five on your phone
keypad. If you prefer, you can send questions through the forum included in the webcast, and I will be reading them
out loud at the end of the Q&A session.
Before starting, please take a moment to look at the safe harbor statement included in the presentation, and please,
bear in mind that the presentation contains forward-looking statements and expectations that are subject to certain risks
and uncertainties. So, actual figures may differ.
During this call, we will discuss non-IFRS financial measures, which are defined and reconciled to the most comparable
IFRS measures in our results report and in our website. With all this, I will hand over to Ernesto. Ernesto, the floor is
yours.
Ernesto López Mozo, Ferrovial, N.V. – CFO
Thank you, Silvia, and good morning, good afternoon, everyone. Thank you for joining us today to review Ferrovial's
results for the first quarter of 2026. Starting, I mean, overall, the first quarter was a solid start to the year with a strong
growth across our core businesses, particularly in North American highways. Also, continued progress at the new
Terminal 1 at JFK, the stable construction margins, despite higher upfront bidding, and IT investments to support future
growth. And from a financial perspective, net debt excluding infrastructure projects was reported as negative net debt
or net cash, amounting to 1.2 billion euros.
The primary sources of cash included a construction operating cash flow of 144 million euros. On the other hand, the
principal cash outflow consisted of treasury shares, purchases, totaling 162 million euros. On a consolidated basis,
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May 8, 2026 – Q1 2026 Earnings Conference Call
revenue grew 10.2% on a like-for-like basis, adjusted EBITDA increased 15% also like-for-like, and adjusted EBIT grew
10.6% like-for-like as well. Let's move now to the 407 ETR. The asset delivered another strong quarter. Traffic increased
by 8.2% in the first quarter of 2026, driven by the continued use of targeted driving offers, as well as an increase in
mobility and rush hour commuting from a higher percentage of on-site employees.
This was partially offset by unfavorable winter weather. Revenue grew 20% with toll revenues growing by 22.1% in the
quarter, reflecting a combination of higher toll rates that were effective since the 1st of January 2026 and higher traffic
volumes. As a result, EBITDA increased by 25.4% versus the 1st quarter of 2025, including a Schedule 22 provision of
8.1 million Canadian dollars significantly lower than the one we recorded in the 1st quarter last year.
On the other hand, operating costs were higher, driven by higher customer operations, also higher highway operations
that are related to worse weather requiring higher winter maintenance, and higher system operations that increased
with more segmented promotions implementation.
When looking at the monthly traffic performance compared to 2025, as shown in the graph, it is important to bear in
mind that in the 1st quarter of 2026, traffic performance reflects three months of promotions, targeted promotions,
compared to the 1st quarter of 2025, where promotions started in March on a broad basis. So it was only one month,
and this has impacted the traffic comparability.
I will also highlight that the demand segmentation strategy continues to work really well. It is helping us to balance
pricing, traffic distribution, and service levels, while maximizing EBITDA, which remains the key financial performance
metric for the asset. This more segmented approach could distort the traffic comparison going forward, since promotions
last year were broadly based. Regarding dividend distribution, no dividends were paid in the 1st quarter, but the board
approved a 500 million Canadian dollar dividend to be paid in the 2nd quarter of 2026.
Now we move to Dallas-Fort Worth, and here the managed lanes posted double digit revenue per transaction growth,
significantly outperforming US inflation. And this was despite the negative impact on traffic from adverse weather,
particularly in January, including more managed lanes closures than in the 1st quarter of 2025. Let's look at each of the
assets, at NTE, traffic decline 3.6%, reflecting the impact of capacity improvement construction works and adverse
weather, particularly in January. These works are expected to be completed by year end, except for two additional ramps
that began construction last year. Despite lower traffic, revenue increased by 13.1% in the 1st quarter, and adjusted
EBITDA grew by the 11.2%. Including the accrual of $2.4 million of revenue share in the quarter.
Regarding LBJ, traffic declined 1.5% due to construction works in adjacent corridors and weather impacts. Revenue
increased by 9.8% and adjusted EBITDA increased by 8.9%.
At NTE 35West, traffic increased 1%. And this is also despite adverse weather and congestion at certain entry and exit
points, as well as the finalization of capacity restrictions linked to construction works on competing nearby road
121.Revenue increased by 18.3%, adjusted EBITDA grew by 18.1%, and this includes 7.5 million dollars of revenue
share accrued in the quarter.
Looking at the revenue per transaction, all assets increased well above inflation. NTE revenue per transaction was up
18.3%, LBJ up 11.5% and NTE 35West up 17.3%. This was driven by several factors. A favorable traffic mix with higher
heavy traffic volumes thanks mostly to technology enhancements in camera recognition implemented throughout 2025
and 26. With this improved vehicle classification and higher overall commercial and heavy vehicles. Also, we had a higher
number of mandatory mode events at NTE and NTE 35West.
Let's go now to the I-66 and I-77, our managed lanes in Virginia, North Carolina. At I-66 we saw a very solid quarter,
traffic increased by 8.3% compared to first quarter last year, showing a strong resilience despite adverse weather. This
was supported by the growth in mobility across the corridor and our ability to capture value through dynamic pricing.
Revenue per transaction grew close to 5%, 4.9% in the quarter, and the revenue in the quarter grew in total 13.6%
versus last year. Adjusted EBITDA increased 16.1% in the quarter.
At I-77 traffic declined by 5.6% versus last year mainly due to adverse weather together with the exceptional
performance in the first quarter last year. Remember that then, alternative routes remained partially closed following
hurricane related events. Despite the traffic decline, revenue per transaction increased 14.2% reflecting higher toll rates.
Adjusted EBITDA declined 11.9% compared to the first quarter last year. This was negatively impacted by the step up
in the revenue share band from 25% to 55% revenue share. This is largely a first year effect and is expected to normalize
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May 8, 2026 – Q1 2026 Earnings Conference Call
as revenues continue to grow within the new share band. First quarter of 2026 adjusted EBITDA included the accrual of
$8 million of revenue share.
Regarding airports, starting with a new terminal 1 at JFK, the project continues to progress through a crucial year for
construction and integration. In terms of Schedule, as we explained in the full year 2025 earnings, the contractor has
communicated an updated target where the completion date for the first phase falls in the fall of 2026. In the first
quarter of 2026, the first operational readiness and airport transfer trials began during the quarter and the project
reached 87% construction progress. Airline engagement continues against a challenging backdrop. We have secured
commitments with 30 airlines, including 21 executed agreements and nine letters of intent.
As of March 2026, total equity invested stands at 978 million euros and we have 64 million euros pending that are
expected to be injected in 2026.
At Dalaman, the first quarter reflects the typical off-peak season. Domestic traffic supported performance and traffic
increasing by 9.8% while the international volumes were affected by the geopolitical challenges in the Middle East. On
a full year basis, the airport remains predominantly international with the peak season starting late March and is expected
to be affected by the instability in the Middle East.
Moving to construction, margins remained stable year on year while there were higher bidding and IT costs aimed at
supporting future growth as we have explained in past quarters. Regarding the operations in the different geographies,
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 remaining stable.
The order book remains at an all-time high of 17.6 billion euros. Up 0.5% on a like for like versus December, excluding
approximately 1.3 billion euros of additional projects not yet included because they are pending award or financial close.
The composition of the order book remains very healthy given the lower weight of large design and build projects with
non-group companies. And almost half of our backlog is in our core US and Canada markets, which we expect will
continue to support future growth. The operating cash flow at construction, excluding tax and dividends, amounted to
144 million euros in the quarter, mainly driven by advanced payments and compensation received in US and Canada.
Now moving to the net debt position and cash flow, net debt excluding infrastructure projects was negative for, let's
say, net cash 1.2 billion euros at the end of first quarter, 26. As shown in the bridge, dividends from projects are small,
including some dividends from IRB in India and Silvertown Tunnel in UK. Remember that dividends also come later in
the year in the managed lanes in June and end of the year and also along the year in the 407 ETR.
We’ve also had a solid cash flow from construction that I just mentioned in the previous slide that reflects payments
received together with the compensations and in general the good performance of the operations. Tax payments are
mostly related to Budimex. In terms of investments, these are mostly related to construction and equity invested in
energy projects, while divestments are largely related to services business sales earnouts and so on. Additionally, we
repurchased treasury shares for a total amount of 162 million euros in the quarter. Lastly, the other cash flows from or
used in financing activities reached 421 million euros. This included the issuance of 500 million euro bonds that took
place in March.
Well, we did not include any slide with the scrip dividend, but I'm sure you all got the information. We announced also
yesterday the first scrip dividend for an amount of 400 million euros.
Okay, so thanks for your attention and I now hand back to Silvia to open up the Q&A session.
Silvia Ruiz, Ferrovial, N.V. – Global Head of IR
Okay, thank you very much Ernesto. So let's start now with the Q&A session operator, please go ahead.
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May 8, 2026 – Q1 2026 Earnings Conference Call
QUESTIONS AND ANSWERS
Operator
Ladies and gentlemen, we'll now begin the Q&A session. If you'd like to ask a question, please press star five on your
telephone keypad. If you change your mind, please press star five again. Please ensure that your device is annuted
locally before proceeding with your question.
Operator
Our first question comes from Cristian Nedelcu from UBS. Please go ahead.
Q - Cristian Nedelcu – UBS
Thank you very much. Maybe I'll ask three questions if you allow me the first one on Texas lanes. You mentioned the
building blocks for the price increases: technology, vehicle mix, mandatory modes. Could you give us a bit more color
on the contribution from each of these blocks and if the tail winds are sustainable into second quarter and fourth quarter.
The second one, again for the U.S. lanes, if we zoom in on the last couple of months when gasoline prices in the U.S. is
up 30 to 50%, could you tell us a bit more how does traffic look like in the context of that?
Any color you could give us is traffic off peak suffering or leisure traffic a bit weaker or any other changes in behavior
of the users.
The last one, please. The 407 ETR, you talk about the introduction of a loyalty program going forward. Could you
elaborate a bit on the start date, the rationale behind introducing it and any details on how it will work? Thank you.
A - Ernesto López, Ferrovial, N.V. – CFO
Okay. Thanks, Christian. Well, let me see what kind of color without giving really numbers I can give you. I mean,
regarding the, let's say, the revenue per transaction performance, technology has been implemented. Still, I mean, a
little bit remaining, but mostly done in technology to better identify cars. That was the main driver. It started last year.
As I said, also this quarter as well. That is the main driver. But in second place, just we've seen underlying better
performance of heavies and commercials…not to the same scale, but it has contributed. And then the third one would
be mandatory modes. Please allow me not to give you the split here. These things tend to be commercially sensitive.
The first one, yes, we'll, let's say, diminish the impact in the coming months. The rest we will see. We have to monitor
the economy, and this is related to the second question.
I mean, yes, gasoline prices have been going up. We haven't identified any significant movement. Always, of course,
when gasoline prices go up, they affect, but people tend to do the trips they have to do. We'll have to see a sustained
situation of higher prices to maybe see a different development. So we'll have to monitor that. But so far, we haven't
seen anything really significant. It's also true that the economy is something that is important that has kept performing,
right? No news yet. We'll keep monitoring that.
Regarding the 407 ETR, I mean, there's no details I can share on loyalty schemes. But usually this kind of schemes is
about providing value in terms of trips to people that reach some levels of consumption, things like that. But I mean,
this is still being designed. And also, let's say, commercially sensitive will update more when we launch, and we will keep
updating other quarters. But that kind of the basics is what I mentioned.
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Operator
Our next question comes from Elodie Rall, from JP Morgan. Please go ahead.
Q - Elodie Rall – JP Morgan
Good afternoon. Thanks for taking my question. So I'll have three, I think. First of all, on the U.S. managed lanes in Q1,
we saw traffic. I mean, you mentioned traffic has been impacted by one off in Q1. Maybe you could help us understand
the impact that those one-offs have had on Q1 traffic and revenues.
Second, could you give us an update on your U.S. managed lane pipeline and bidding process?
And third, related to that second question, I was wondering if your shareholder remuneration policy is dependent on
any managed lane wins, and therefore, do we need to wait until you have more visibility on that, until we have an update
on your shareholder remuneration policy, which I think the last time you gave it on that, whether the last CMD for 2426. So basically, the question is, when are we going to get an update? Are you planning to do something at the end of
this year, maybe beginning of 27? And is this dependent on the win of any new projects? Thanks a lot.
A - Ernesto López, Ferrovial, N.V. – CFO
Okay, so thanks a lot. I cannot give much detail, detailed numbers on whether January was worse. I mean, we don't
provide this specific detail, but it was part of the drop in traffic. It was most relevant and the construction works that
really affect the overall corridor, right? So yes, it affected negatively, but I mean, if I were to highlight NTE and LBJ is
more affected by the construction, either in the corridor or on the adjacent corridors.
Regarding the bidding process, we expect to have news on the awards, and this is public information from Tennessee
in late August, and from Atlanta in mid to late October. That's the expectation at the moment for the awards.
And then regarding the future strategy, we are finalizing 2026. That was the last one provided. Yes, the strategy of
growth and remuneration are linked. We're not talking only about these projects, but growth in general. So we'll shape
our distribution in line with the growth we expect in the different business and perspectives. When we update that, it
probably would have to be not this year, but early next year, but this has to be decided. And yes, we will have to see
how we balance growth and remuneration.
Q - Elodie Rall – JP Morgan
Okay, thanks very much.
A - Ernesto López, Ferrovial, N.V. – CFO
Thank you.
Operator
Our next question comes from Luis Prieto from Kepler Cheuvreux. Please go ahead.
Q - Luis Prieto – Kepler Cheuvreux
Good afternoon. Thanks for taking our questions. First of all, apologies. If you've already covered my questions, I had
some technical issues. But my three questions are the following. Can we read anything Ernesto into a significant increase
in dividends for the 407 ETR versus last year? Can we extrapolate for the rest of the year?
The second question is, if there are any penalties associated to the contractors delayed completion of the NTO projects?
I mean, penalties or basic payments to you.
And the final question is, the average revenue per transaction on the I-66 was below the other asset in terms of year
on year growth. Can you provide some light on the drivers behind this? Thank you.
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A - Ernesto López, Ferrovial, N.V. – CFO
Okay, thanks. Luis, so yes, the 407 ETR had a higher dividend, both related to performance and better financing. Let's
say additional debt. This is something that we have discussed in other conference calls. The 407 ETR has some leeway
that we will have to see a long time, how we are optimizing, so how we are optimizing that. So please forgive me for
not providing guidance for the dividends for this year, but clearly it has started higher and that performance is very
good. So looking forward to the remainder of the year, we'll see how it finalizes.
Then the second question was on NTO, with any potential penalties against us, not the contractor. If it's to us, I mean,
it would have to be a huge delay to start having some sort of penalties, right? So it would have to be beyond June 2027
to get some sort of small penalty for us, not expected to happen. Yes, the contractor, we can apply LDs if there's no
fulfillment, and that's something that, of course, has to be settled a long time.
And then regarding the I-66, it’s true it has a lower revenue per transaction, I wouldn't try to read anything regarding
elasticity. I mean, we've seen more widespread traffic along the day. That area is having more business activity during
the midday. So I mean, I think that the performance of the asset is positive, and we shouldn't read into this kind of
slowing down in revenue per transaction. We have to keep a look in at it going forward.
Q - Luis Prieto – Kepler Cheuvreux
Excellent. Thank you.
A - Ernesto López, Ferrovial, N.V. – CFO
Thank you.
Operator
Our next question comes from Graham Hunt from Jefferies. Please go ahead.
Q - Graham Hunt – Jefferies
Yeah, thanks very much. I'll have just two questions from me, I think. First one, I'm just trying to get my head around
a little bit of these sort of bottlenecks and congestion zones around the Texas lanes and how much they might be
impacting traffic. I don't know if there's any additional color you can give on just some of the adjacent activity that's
going on, which is impacting your assets there in Texas and any timing that you're seeing on the ground when that
might alleviate, which obviously would be sort of a negative from your perspective or just a bit more sort of, I guess, on
the ground color, as it seems like there's a number of different sort of factors going on there and just that's affecting
performance positively today.
And then second question, really just on the managed lane market beyond what you've already mentioned in the report.
I think Maryland PPP market seems to be warming up after being very cold for a long time. There's been Pennsylvania
mentioned other airports. Any color on just project pipeline that you're seeing beyond what's kind of announced that
might be sort of adding into the funnel further up would be interesting. Thank you.
A - Ernesto López, Ferrovial, N.V. – CFO
Okay, let me see what I can tell you here. Well, really, traffic in NTE is directly affecting the corridor, right? It's true that
also, I mean, at peak time, we could have mandatory modes that are related to, I mean, less width or capacity at the
road, right? So when it opens, yes, the corridor should come back and it has declined on an important manner in the
last three years, right? So we'll have to see how that balances out. Regarding the 35 west, yes, you have some limit in
your capture due to this bottlenecks. It's also true that congestion is higher, so you have some mandatory modes, right?
So we don't have visibility on when there will be a solution to this bottlenecks, we'll update as soon as we have. Regarding
regarding LBJ, we have different roads that should affect LBJ throughout 2026. These are roads that are not, let's say,
controlled by us. So yes, expectation is that they will be completed on 2026, it's an opening in 2027. But I mean, that's
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information that is provided by the grantor. We'll have to see if it materializes, but 2026 should definitely be still affected,
right? So I don't know, Graham, is that covered? We were addressing, sorry, I cannot give a more specific details.
Q - Graham Hunt – Jefferies
No, that's helpful, thank you, thank you.
And then just on the pipeline, I guess.
A - Ernesto López, Ferrovial, N.V. – CFO
Yeah, and the pipeline, well, the pipeline, I mean, what I can say is that in general, there's more support for P3s. We'll
see how that materializes, accelerates, but just the background is better. I think that really Tennessee and Atlanta are
bringing some projects that others are watching. And the fact that you can ease pressure on government or state
finances with much needed infrastructure through P3 is attractive. So the only thing I can say is that there's some
momentum, but we don't have visibility on them coming to the market. Finally, or the source order, we will keep
updating.
Q - Graham Hunt – Jefferies
Understood, thanks very much, appreciate it.
A - Ernesto López, Ferrovial, N.V. – CFO
Thanks.
Operator
Our following question comes from Harishankar Ramamoorthy from Deutsche Bank. Please go ahead.
Q - Harishankar Ramamoorthy – Deutsche Bank
Hi, good afternoon, everyone. Thanks for taking my questions. A couple of them, if that's okay. You've provided the
breakup of traffic by months for for ETR. That's very helpful. Would we be getting something similar for the U.S. managed
lanes, please?
And the second, when I look at the the 407 ETR traffic performance, obviously, you mentioned that because the base
did not have the promotions, there's that impact flowing through. But if you kind of strip that out, then would you see
traffic growth more or less in line with what you see with March? Or what's what's the underlying momentum been for
say January and March? Thank you.
A - Ernesto López, Ferrovial, N.V. – CFO
Okay, so thanks for the questions. No, we won't be providing more granularity on the managed lanes. I know this could
be a little bit frustrating, but I mean, it's commercially sensitive for the different things that we've mentioned. From
lights, heavies and also mostly traffic. No, we don't have plans to provide that information as in the 407.
Regarding the 407 traffic, please bear something in mind. I mean, last year we had promotions that were very broad.
Like, I mean, people were getting the same kind of promotions that didn't really address segmentation properly. Now
we have promotions that are targeted and that could disturb traffic comparisons.
Really, we have to focus more on the revenue growth and the total revenue growth specifically. So that could come with
not necessarily higher traffic, right? So just bear in mind that that comparison will be distorted. I'm sorry, we cannot
provide more information. So this is commercially sensitive, but traffic is not going to be a driver. I mean, the
segmentation is different this year.
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Q - Harishankar Ramamoorthy – Deutsche Bank
No problem, Ernesto. Thanks. I was just trying to get to any potential color on how the fuel price at the pump might
have impacted traffic. But are you seeing anything of that sort with March exit rate?
A - Ernesto López, Ferrovial, N.V. – CFO
I mean, not really that we could differentiate. There's always some line negative elasticity. Really that sometimes
happens with an economy that is performing and they turn to wash out. So far, the economy where we operate is okay.
So we will have to see if this lingers, I mean, how it could affect. But I mean, nothing that we can really highlight in the
first quarter.
Q - Harishankar Ramamoorthy – Deutsche Bank
Thank you.
A - Ernesto López, Ferrovial, N.V. – CFO
Thank you.
Operator
Our next question comes from Dario Maglione from BNP Paribas. Please go ahead.
Q - Dario Maglione – BNP Paribas
Hi, I have three questions. Sorry to come back to this point. If I understood correctly, you mentioned that you didn't
see much of an impact of higher fuel prices on the U.S. express lanes. Can you maybe comment on the 407ETR given
the 1% traffic growth in March?
The second question is on NTO. The construction, you mentioned that the operational readiness trials have started. This
sounds like a positive message. So I'm just wondering whether you now feel more confident that the timeline for opening
this terminal will be the fall of 2026.
And the third and last question is technical on the tax expense on a P&L. It was a 60 million positive for the full year
2025. What's your expectation for 26? Thanks, Ernesto.
A - Ernesto López, Ferrovial, N.V. – CFO
Okay, so thanks, Dario. Regarding fuel prices, I mean, what I've said is that just when you have higher fuel prices, you
have some negative elasticity. I mean, in the short term, if the economy is performing, I mean, the economic
performance tends to wash out, to compensate for that. And people make the trips that they have to make. I mean, we
will have to see if this takes longer. Yes, it could affect. So far, we don't have any evidence of any impact in the first
quarter, right? But we'll have to keep monitoring that. That is similar in the 407 ETR in Toronto. So there has been
higher mobility with a higher return to the office. It's true that in terms of economy, in heavies, construction and trucks
related to car parts movements and that kind of business has been lower. But I mean, the overall economy has seen
higher mobility. When we talk about traffic regarding the 407 ETR and March, I will again refer to the explanation I've
been giving throughout the call. Promotions are very different this year, right? So last year, they were broadly based.
Now they are more segmented, right? So maybe we have a situation where we are growing our revenues handsomely,
but traffic doesn't grow that much or even falls, right? So traffic has been clearly affected by promotions is something
that we manage and we target, right?
So throughout last year, we got a lot of experience. Right now, they are more targeted and we should really focus more
on financial result, because segmentation is going to bring different traffic patterns.
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Then the question regarding NTO, yes, the contractor has provided that finalization date for phase A in the fall of 2026.
It can be done with the right resources. It's not under our control. I mean, we push for this eventually. I mean, we need
the contractor to deliver with their resources. So yes, we expect it to happen there. And if there's any slipage, I mean,
not to be and not to be a long one.
So, yes, when we talk about finalization of construction, we also talk about the start of operations. I mean, that's
something that goes hand in hand because we do the operational readiness, I mean, the months before, right? And we
are not talking about civil works, talking about the whole construction and start of operations, not having, let's say, any
lead time between construction finalization and the start of operations. So that's the idea. The expectation is fall to 2026,
as we mentioned.
And then regarding, regarding taxes. Well, I mean, the last year, the accounting number that you mentioned is related
to some, some one-offs. Really, when we focus into the cash component, the efficiency of the tax groups means that
while we are developing new, new projects, I mean, we don't expect any really impact in the US. We pay taxes in Canada
and Poland and mainly and slightly in Spain, right? But I mean, while we are developing business in the US, this is not
happening, right? So I cannot provide you any guidance, just this kind of framework for any model you may be doing.
Q - Dario Maglione – BNP Paribas
Thank you.
A - Ernesto López, Ferrovial, N.V. – CFO
Thank you.
Operator
One next question comes from Jose Manuel Arroyas from Santander. Please go ahead.
Q - Jose Manuel Arroyas – Santander
Hello, and I wanted to come back to two answers you provided earlier. First is on 407 ETR and the ability to re-lever the
asset was the extent of the opportunities and what are the metrics that you are looking at. Is it debt service coverage
ratios?, is it net debt to EBITDA, any colour there would be helpful.
And then on NTE, I wanted also to ask you about the clarification on the risk of mandatory modes diminishing next year
once construction works end related to the expansion. Is that risk significant or moderate going into next year? Thank
you.
A - Ernesto López, Ferrovial, N.V. – CFO
Thank you. Thanks for the for the question. Okay. Let me see how I can address those. Well, regarding the the 407 ETR
leverage is assessed on a debt service coverage ratio. But I've always mentioned that you shouldn't expect the 407 big
recaps just to optimize the structure along the different years, trending more to the DSCR that don't have so much
headroom, So that's the level. I don't provide a target. That's something that right now is clearly above two times, but
we cannot provide the level that we could be targeted in a long time. But yes, there's there's some headroom there as
you rightly pointed out. Please don't think of big recaps here.
Then regarding NTE, well, we have two effects once we open, right? I mean, one of them is there's going to be more
capacity that lowers mandatory modes that don't weight that much now. That's important to bear in mind. And it also
comes with people that have left the corridor coming back to the corridor, right? And the fall in the corridor traffic has
been substantial. So these two effects will play. We are not providing any guidance. The only thing when we're talking
about the risk of this, mandatory modes in NTE haven't been that, let's say, relevant, they have played a role, but this
is not the bulk of the revenue growth at all. It could be in the future, but not now.
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May 8, 2026 – Q1 2026 Earnings Conference Call
Operator
The following question comes from Marcin Wojtal from Bank of America. Please go ahead.
Q - Marcin Wojtal – Bank of America
Yes, good afternoon, and thank you. So my first question, you are obviously continuing to roll out customer discounts
for the 407 ETR, but is there any update on the possibility of rolling out some sort of discounts or incentives or loyalty
programs for the US managed lanes? And do you see a way for this to potentially allow you to optimize EBITDA of these
assets?
The question number two, I mean, you mentioned technology enhancements, helping your revenue per transaction on
the US managed lanes. But are you referring to perhaps reducing toll evasion or perhaps some trips being built correctly
or you're just more generally talking about improving your pricing mechanism and pricing algorithm?
And if I can squeeze in one more very quickly, thinking about higher dividends and potential recaps of infrastructure
assets, is the I-66 another asset on top of the 407 ETR, where there is, in your view, some headroom in terms of the
balance sheet and the possibility to distribute more generous dividends. Thank you.
A - Ernesto López, Ferrovial, N.V. – CFO
Thanks, Marcin. Thanks for all the questions. I mean, we are working, I mean, it's not something that is readily available,
but we are working on the possibility of promotions and therefore more segmentation in all the US highways. Yes, we
are working on that. So in the future, that could help. Yes, but I mean, we are not there yet. We will update the market.
And we're working, we will update the market when we reach something.
In terms of the technology, what it has helped is to identify commercial vehicles and heavies that were not properly
identified before.
And then to do to do with evasion, we don't face any, let's say, collectivity, collecting risk in the express lanes in DallasFort Worth. It has been about identification of commercials and heavies.
And then the third question, just the I-66 has potential for recap as was in the, let's say, a business plan that was
submitted for reference. So it won't be this year nor the next, but it's not far away, but it's not this year or the next that
we will see a recap in the 66.
Q - Marcin Wojtal – Bank of America
Great. Thank you very much.
Operator
Ladies and gentlemen, please be reminded that in order to ask a question, you must press star five on your telephone
keypad. Our final question comes from Nicolas Mora from Morgan Stanley. Please go ahead.
Q - Nicolas Mora – Morgan Stanley
As good afternoon, guys, just a quick one on the 407 ETR, just to understand this one correctly. So you basically
preparing us for potentially for softer traffic sequentially, but for much higher capture of price rises that you've done in
25-26. So it means basically lower, I mean, as it's been lower discounting on an absolute terms from from here because
it's more targeted. And as you also imply, you're now with the current traffic levels. You're very comfortable where that
traffic puts you versus the scheduled 22 risk.
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May 8, 2026 – Q1 2026 Earnings Conference Call
A - Ernesto López, Ferrovial, N.V. – CFO
Well, thanks, Nicholas. I mean, you are reading into what I said. I'm not confirming or denying. I'm saying that traffic
shouldn't be comparable. And yes, we could have lower traffic, but maybe we're doing better. But I mean, I'm not saying
if it's going to be lower or higher, just that it's more important to follow the other metric as you rightly point out. And
yes, regarding the Schedule 22, we have provided for a number that takes into account all these effects that we were
considering when we were budgeting. So yes, that's what we are expecting for Schedule 22 to reflect.
Q - Nicolas Mora – Morgan Stanley
All right. Thank you. And if I'm your last one on talking about the reopening or the end of the construction works on on
NTE and maybe in the adjacent to to LBJ into late 26-27. Do you have a sense of how much traffic you might have lost
versus trend and that you may recover once the asset go back to normal?
A - Ernesto López, Ferrovial, N.V. – CFO
Well, we're not providing figures on the corridor because also that would mean we would be providing figures on our
capture rate. We are on a commercially sensitive, I mean, the ball game now. So no, we were not providing that. I
would say that NTE is the traffic reduction in the past three years in the corridor has been important. Our capture rate
has held well. So I mean, that's all I can comment.
Q - Nicolas Mora – Morgan Stanley
All right, we have to try. Thank you very much.
A - Ernesto López, Ferrovial, N.V. – CFO
Thank you. Thank you.
Operator
And our final question comes from Marc Ip from Citi. Please go ahead.
Q - Marc Ip – Citi
Hi, thanks for the question. I've got one here just actually on the construction business. The EBIT margin 3.1% in the
first quarter. I'm just wondering how should we think about that in the context throughout the year and against your
kind of long term, three and a half percent target.
And then following from that, maybe on the Ferrovial Construction business, can you just give a little bit more color on
what you've seen with the higher costs there and whether that will drive any sort of margin benefit in the later periods
from that. Thank you.
A - Ernesto López, Ferrovial, N.V. – CFO
Hi, thanks. Well, regarding construction margins, the only guidance we have is our, let's say, a standing long term
average 3.5% EBIT margin as I said, it's an average. The backlog is healthy. We're not providing, let's say, guidance for
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May 8, 2026 – Q1 2026 Earnings Conference Call
margins this year, but I mean, you can see from the cash performance or anything that the backlog is healthy. So our
only guidance is long term and that we stick to that. Sorry, what was the second question?
Q - Marc Ip – Citi
Just a bit more colour on the Ferrovial Construction costs.
A - Ernesto López, Ferrovial, N.V. – CFO
The cost, sorry, sorry, sorry. I mean, well, basically, these, all these costs are related to to to bidding. And they, I mean,
it's true that we bid like next year, but we'll also keep looking at all the developments. So this year is going to be affected
by this kind of bidding and IT costs going forward. It could be different depending on our success.
Q - Marc Ip – Citi
Thank you.
A - Ernesto López, Ferrovial, N.V. – CFO
Thank you.
Operator
There are no further questions at this time. I will now hand it back to the Ferrovial team. Your line is open.
Silvia Ruiz, Ferrovial, N.V. – Global Head of IR
Thank you. Thank you all for your questions. There were a couple of questions in the webcast, but we understand that
all of them have been already answered. So there are no more questions. Well, thanks a lot.
Ernesto López, Ferrovial, N.V. – CFO
Thanks for attending the call and we're looking forward to meeting you shortly. Thank you.
This is an edited transcript of the live event and does not purport to be a complete or error-free statement or summary of available
data or the event itself.
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