Annual Report 2015 > Introduction > Report from the Vice-Chairman & CEO
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Report from the Vice-Chairman & CEO

Dear Shareholders,

For Abertis 2015 has been a year of fresh challenges and fulfilled commitments. In a climate of economic and political uncertainty in some of its main markets, the Group has achieved record results in its history, driven by significant growth and the search for greater synergies among all the divisions of the Group.

The Group’s economic figures for the year are marked by capital gains from the IPO of 66% of Cellnex which have enabled historic growth in net profit up to 1,880 million euros. Disregarding the extraordinary impacts as well as other effects and provisions made within a framework of prudent accounting, like-for-like net profit grew by 7% in 2015.

Likewise, both like-for-like revenue and EBITDA increased by 5% to 4,378 million and 2,692 million, respectively.

As for traffic, in 2015 we have seen the consolidation of the upward trend in average daily traffic on the Group’s toll roads as a whole. Especially significant is the increase of 6.1% in Spain, the best since 2001, and 8.5% in Chile, above all expectations. Levels have also continued to rise in France (1.8% above the previous year), Puerto Rico (0.8%) and Argentina (0.7%). Only in Brazil, where the political situation marks the economic future, has Arteris network traffic fallen by 2.3% due mainly to the performance of heavy vehicle traffic.

As a result of the internationalisation efforts made over recent years, 70% of Abertis Group revenue comes from outside Spain. France has consolidated its position in 2015 as the leading market for the Group, contributing 37% of total revenue and 38% of EBITDA, followed by Spain, with 30% of revenue and 34% of EBITDA.

Consolidated investment in 2015 has come to 1,074 million euros, of which 811 million corresponds to investment in expansion, 95 million to operational investment, and 168 million to investment in new acquisitions.

Financially sound balance sheet

Revenue from the sale of Cellnex and cash generation have made it possible to carry out a significant reduction in the Group’s net debt, which at the end of December 2015 stood at 12,544 million euros compared to 13,789 million euros at the end of 2014, a decline close to 10%. The net debt/EBITDA ratio stood at 4.7x. 66% of the total debt is non-recourse, 90% is longterm and 88% is fixed rate.

At the same time the company has continued to work on liability management programmes aimed at buying back old debt and making new issues at lower rates, lengthening their term to maturity. In the past two years Abertis has conducted corporate refinancing operations and in its subsidiaries coming to more than 4,000 million euros, thereby enhancing its financial capacity to undertake new investments and lengthening debt repayment profiles and reducing its cost.

Fulfilment of the Strategic Plan 2015-2017

Abertis continues to move forward towards fulfilment of the main objectives of Strategic Plan 2015-2017. The company has gone further in its strategy of focusing on the toll roads business with the whole disposal from the airport business and the IPO of the terrestrial telecommunications business, in creating shareholder value, and in the incorporation of new assets and the extension of existing contracts.

Driving growth

Abertis remains focused on growth as one of the main strategic principles for the coming years. In 2015 it successfully closed an agreement with the French government what is called the Relance Plan, an ambitious plan to relaunch the French economy, reduce unemployment and improve infrastructure through public-private partnership.

In the case of Abertis, its subsidiary in France is to invest 590 million euros in exchange for an extension to the term of its concessions in the country by an average of 2.5 years. This is an important precedent for future agreements between governments and private companies to enable sustainable financing of the infrastructure which is the basis of social and economic progress.

In addition, Abertis has worked prominently to consolidate its position in Chile by taking control of the concessions in which it had a stake. While in 2014 it achieved control of 100% of Rutas del Pacifico, in 2015 it was the turn of Autopista Los Libertadores and Autopista del Sol. To that end the company has disbursed about 130 million euros. Furthermore, in 2016 Abertis has taken control of 100% of Autopista Central, the country’s busiest toll road. This means that Abertis now controls 100% of the 6 concessions it has in Chile.

In Spain it increased its stake up to 50.01% in the concession firms of the Vallvidrera Tunnels, one of the most used routes between Barcelona and towns and cities inland in Catalonia, and of the Cadi Tunnel, main point of connection between the central area of Catalonia and the Pyrenees.

In the same strategic line to extend the existing asset base, in 2015 Participes en Brasil, controlled by Abertis (51%) and Brookfield (49%), has launched a public tender offer for Arteris minority shareholders.

Abertis is continuing to actively analyse acquisitions with its sights set on North America and Europe. Specifically, in Italy Abertis is in exclusive negotiations to purchase control of A4 Holding, which holds the concession for the A4 (Brescia- Padova) and A31 (Vicenza-Piovene-Rocchette) toll roads.

Successful Cellnex IPO

One of the major milestones of the company in 2015 has been the IPO of the terrestrial telecommunications infrastructure division, Cellnex Telecom, which was a success and exceeded all expectations. The capitalisation of Cellnex Telecom came to more than 3,244 million euros in the first day of trading. The listing of 66% of Cellnex generated net book gains of about 2,700 million euros for Abertis.

With its launch on the Spanish stock market, Cellnex Telecom has increased its capacity for organic and inorganic growth as well as its leading position in the European market for telecommunications network infrastructure. The operation has enhanced its access to capital markets and new financing channels to address on a sound footing its development and internationalisation strategy.

In line with this strategy of focusing on toll roads of which the Cellnex IPO forms part, in 2015 Abertis has also finally concluded its disposal process in the airport sector.

Turning to its efficiency plans, Abertis has consolidated the significant savings of the previous Plan and has launched new plans with a focus on France, Brazil and Chile.The implementation of the Group best practices in all its subsidiaries and invests will create important synergies between all the companies and consolidate our unique and competitive industrial model.

2015 has also been a year of improvement in the main economic figures of Hispasat, the Spanish satellite operator in which Abertis is the majority shareholder.The company’s backlog (guaranteed long-term contracting of satellite capacity) has continued to set records by increasing its annual revenue seven-fold.

Global leader and benchmark company

The company has a solid foundation to build promising prospects in the future. The positive performance of traffic expected in its major markets reflects the consolidation of the improvement experienced over recent years.

In 2016 Abertis is facing new challenges to consolidate its footprint in the world as a global leader. Its financial strength, its experience and industrial model and its long term vision make it into a key player in the search for solutions to one of the biggest global challenges: sustainable financing of infrastructures for the future.

Francisco Reynés Massanet

Vice-Chairman & CEO

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