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FERROVIAL: 4Q’20 RESULTS (ANÁLISIS BANCO SABADELL)

4Q'20 vs. 4Q'19 Results:
Sales: € 1.772 Bn (+0.6% vs. +5.5% BS(e) and +2.2% consensus);
EBITDA: € 168.0 M (+90.9% vs. +51.1% BS(e) and +35.2% consensus);
EBIT: € 176.0 M (-66.0% vs. -84.6% BS(e) and -88.0% consensus);
Net Profit: € 88.0 M (-76.4% vs. € -13.29 M BS(e) and -93.0% consensus);
FY2020 vs. FY2019 Results:
Sales: € 6.341 Bn (+4.7% vs. +6.2% BS(e) and +5.2% consensus);
EBITDA: € 409.0 M (+238.0% vs. +209.1% BS(e) and +197.5% consensus);
EBIT: € 226.0 M (-43.6% vs. -67.6% BS(e) and -72.1% consensus);
Net Profit: € -410.0 M (€ 268.1 M in FY2019 vs. € -511.29 M BS(e) and € -471.8 M consensus);

The 4Q’20 results came in above expectations on the operating level and cash, with a better dividend than expected. EBITDA came in above expectations (€ 168 M vs. € 133 M BS(e) and € 119 M consensus) thanks to Construction (€ 113 M EBITDA vs. € 64 M BS(e) and € 45 M consensus), which offset the weaker performance of Toll Roads (€ 54 M vs. € 73 M BS(e) and € 66 M consensus), where the recovery of traffic continues to be slow. Net Profit came in well above expectations (€ 88 M vs. € -13 M BS(e)) and included the recovery of an impairment in Autema (€+51 M, no impact on cash) and better tax performance (€+28 M vs. € 0 M BS(e)).
Very positive performance by the net cash position ex-infra, which improved +17% on the quarter to € 1.99 Bn (vs. €~1.75 Bn BS(e)), despite the impact from growth investments (€ 66 M for 15% stake in I-77) and a drop in dividends from infra assets (€ 241 M in 4Q’20 vs. € 364 M in 4Q’19), thanks to solid working capital performance (€ 188 M in 4Q’20 vs. € -39 M in 4Q’19). This positive cash performance, along with the financing transactions completed over the past few months allowed the company to reach a record liquidity level (€ 7.96 Bn vs. € 7.54 Bn in 3Q’20; ~3.1x NFD), making the company more flexible, not only in case the crisis drags on, but also to take advantage of opportunities arising in the short/medium term.
The company has announced a proposed dividend payment of € 0.513/sh. (+43% vs. 2020 and -31% vs. 2019; 2.4% yield), which stands above our estimates and those of the consensus (€ 0.37/sh. BS(e) and € 0.44/sh. consensus), which is split into (i) a final dividend’20 of € 0.20/sh. (-36%; vs. € 0.16/sh. BS(e)) and (ii) an interim dividend’21 of € 0.313/sh. (+57%; vs. € 0.21/sh. BS(e)).
With all this in mind, the 4Q’20 results beat expectations on the operating level, with positive cash performance and bringing a better dividend than expected, and thus we expect a warm reception, especially given the recent performance (-5% YTD; -8% vs. IBEX 35 and -12% vs. Eurostoxx Const. & Mat.). BUY. T.P. € 27.00/sh. (upside +26.29%).