The year 2020 has been a year marked by the economic and health effects of the COVID-19 pandemic. Since March, many countries have restricted mobility, severely impacting the demand for services, and to a large extent those related to transportation. The company has experienced a significant drop in traffic figures on its roads and airports, but at the same time, it has responded firmly to this challenge by focusing on health and safety, strengthening its financial position and contributing to society.
The development of vaccines and treatments, the stimulus announced by Governments (COVID-19 stimulus bill in the US, European Recovery Fund) and the actions taken by the private sector are paving the path for recovery that will differ by geographies and businesses and will contribute to the transformation of the infrastructure sector towards a more green, digital and inclusive industry.
In this context, investment in infrastructure continues to be a key factor for economic recovery and growth. Sustainable infrastructure development, preserving resources for future needs, and the acceleration of trends, such as mobility or digitalization, present attractive opportunities for Ferrovial:
- Congestion in cities and access routes will demand new transport infrastructure and mobility alternatives that are more innovative and that contribute to reduce carbon emissions. Trends such as “Work from home” (WFH) or e-commerce have accelerated during the pandemic, impacting behavior patterns and traffic evolution, for example, increasing heavy vehicles in toll roads next to industrial and logistic corridors and decreasing business travel.
- Digitalization of transport infrastructure and the increasing need for connectivity among infrastructure, vehicles and users, will require new investments in technology. Autonomous vehicles and the upgraded infrastructure required will play a key role in improving road safety and performance.
- Climate change concerns and decarbonization commitments will also demand new infrastructure development in the fields of electrification, water treatment and sanitation, energy efficiency and circular economy.
In addition to the impact that the pandemic will have on the economy, the company faces several challenges:
- Competition from infrastructure companies, with growing interest in greenfield projects in developed countries, and from financial investors, providing liquidity to the market and investing at more aggressive returns.
- Decarbonization in transportation, a clear objective for the sector, as it is responsible for a significant portion of global emissions.
- Regulation and rule of law, key factors when investing in long duration assets and selecting geographies.
- Commercial, political and social tensions in the countries where the company operates, that could affect economic recovery.
STRATEGY
Strategic priorities
- People: The first priority of the company’s strategy. The company’s people management model is a key source of competitive advantage and is based on three main pillars, people safety, talent management and engagement. Ferrovial has defined the organizational and management structures to ensure alignment with strategy, ensuring equal opportunities and diversity. Ferrovial will promote the highest standards for health and safety in its operations based on prevention and target zero accidents. In addition the company will focus on identifying, developing and retaining talent, and will continue to reinforce engagement creating working environments to maximize the contribution from its employees.
- Sustainable growth: Develop and operate sustainable, innovative and efficient infrastructure projects with high concessional value. The company will focus on its core markets (USA, Canada, Spain, UK and Poland), while evaluating opportunities in other regions such as Australia and other selected countries in Europe and Latam.
- In Toll Roads, Ferrovial will continue developing greenfield, traffic-risk projects with a focus on Managed Lanes, mainly in the US and Canada, proactively generating pipeline and bidding for strategic projects. The company will also maintain its competitive advantages in availability projects in markets with potential pay-per-use growth.
- In Airports, the company will focus on preserving liquidity while it continues to implement efficiencies and explore opportunities and partnerships globally.
- In Construction, the objectives are to maintain sustainable profitability over time and to increase business with other group companies. In addition, it will support infrastructure business focusing on greenfield transport projects and it will develop additional local capabilities in key countries.
Ferrovial will also continue building capabilities for other sustainable infrastructure related opportunities in adjacent sectors such as electrification, water and mobility.
