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FCC's International revenues exceed domestic revenues for the first time in history


FCC's International revenues exceed domestic revenues for the first time in history

  •  The Citizen Services group's profit amounted to 178 million euro, up 6.9% with respect to 9M10
  •  Net interest-bearing debt declined by 10.6% y/y, to 7.785 billion euro
FCC's International revenues exceed domestic revenues for the first time in history
FCC reported profit of 178 million euro in the first nine months of 2011, i.e. 6.9% less than in 9M10. In complex economic situation, the Group made progress in internationalisation, with revenues outside Spain increasing by 9.9% and the international backlog by 11%, offsetting the decline in infrastructure-related demand in Spain.
Revenues outside Spain (+9.9%) amounted to 4.309 billion euro. The Group also achieved a milestone: for the first time in its more than 100-year history, revenues from outside Spain accounted for more than half of the total (51%). As a result, the international backlog amounted to 5.081 billion euro, i.e. three out of every four new contracts come from outside Spain. 

The Group reduced net financial debt by 10.6% y/y to 7.786 billion euro, similar to the figure at 31 December 2010 and very close to the target set by the group for 31 December 2011. The assets and liabilities corresponding to FCC Energía and Cement activities in the US (Giant) have been designated as "discontinued operations" in the consolidated financial statements and are classified as available for sale.
According to Baldomero Falcones, FCC Chairman and CEO: "The results reflect the company's strategic commitment to internationalisation, financial stability and efficiency. These quarterly earnings reflect our goal of financial consolidation, by managing the cash flow, maintaining capital expenditure below depreciation and amortisation, and selling non-core assets." Consolidated accounts also reflect notable improvements in efficiency, supported by a technology platform that leverages synergies between its various activities.
In the first three quarters, revenues amounted to 8.441 billion euro, 2.8% less year-on-year (2.3% less in like-for-like terms, adjusting for the sale of Versia assets in 2010). Sales outside Spain were concentrated mainly in Europe (86% of the total), followed by the US (2.9%), Latin America (6.6%), and Asia and Africa (4.7%).
EBITDA from the Services area, which includes Environment, Industrial Waste, Water and other businesses under Versia, expanded 6.9% in like-for-like terms (adjusting for divestments at Versia), and now account for 61.9% of the Group total. The good performance of activities such as Environment offset the contraction in Construction and Cement, but could not prevent a 5.9% decline in EBITDA to 950 million euro, which includes 14 million euro in restructuring costs.

FCC's backlog increased by 2.4% in the first three quarters of 2011 to 36.151 billion euro, of which 72.5% are long-term contracts in the Services area.

Results by business area

FCC Servicios, which includes Environment, Industrial Waste, Water and Versia, performed well in the first nine months of 2011, with revenues up 1.1% to 2.771 billion euro. Revenues in the International Environment area increased by 4.2% due to the good performance of the business in Central and Eastern Europe and to the incipient recovery in the UK.
Industrial Waste revenues maintained notable growth, rising 14.8%, due to the larger volume of waste treated in the US and Portugal and to appreciation by petroleum-based products. The 3.4% fall in revenues in the Water division is due to completion of construction of the two desalination plants in Algeria.
The Construction area obtained 4.654 billion euro in revenues, of which 2.971 billion euro were obtained outside Spain. EBITDA amounted to 231 million euro in the period.


FCC strengthens its presence in recycling and alternative fuels in the US and Spain. In August, several initiatives were implemented relating to recycling and to producing alternative fuels of industrial origin. In 2012, the company plans to start building the first plant on the east coast of the US (Baltimore) for the recovery and reuse of base lube; the estimated cost is 35 million euro. It has also started up one of the first refuse-derived fuel (RFD) plants in Spain (Castellbisbal), which will produce up to 30,000 tonnes of alternative fuel per year.
The infrastructure division's international area made a particularly notable contribution via railway and tunnel projects. The group has been awarded several railway and metro contracts, totalling 1.900 billion euro, so far this year. Panama is another success story: a veritable hub for regional development, where FCC had several contracts totalling close to 2.000 billion euro at the end of the third quarter. As a result, it is the leading infrastructure operator in the region, with projects including the recently-awarded Panama hospital complex.

The environmental services backlog (waste collection and processing) was also strengthened in the first nine months of 2011. The major projects obtained by the group include a 322 million euro contract to build and operate a Waste Management Centre in Guipuzcoa for five years, extendible for additional periods of 5 years.

During the period, FCC signed a number of strategic agreements, including one with Siemens, to develop electric mobility infrastructure. The company also signed a cooperation agreement with Citroën España and BlueMobility to build the electrical installations for the charging points at Citroën vehicle dealerships, as well as providing Citröen with battery charging equipment for its own fleet of electric and hybrid vehicles.

In July, FCC reached an agreement sell Eysa (Estacionamientos y Servicios S.A.), which is part of Versia, to a financial investment group for 115 million euro. This transaction is part of FCC's plan to focus on strategic growth businesses and allocate the funds raised to further growing those businesses and to strengthening the Group's financial position.

As regards funding, Alpine placed another bond issue. This subsidiary of the Infrastructure area issued 90 million euro of bonds paying a 5.25% coupon. Strong demand led the company to increase the issue (originally 75 million euro). This is FCC Group's third bond issue in the last two years, and Alpine's second, after having successfully raised 100 million euro in June 2010.

KEY FIGURES (Millon Euro) 
  Sept.11 Sept.10  Chg. (%) 
Net sales  8,440.90 8,688.5 -2.80%
EBITDA  950.1 1,009.30 -5.90%
EBIT 490.5 523.3 -6.30%
Income attributable to equity holders of the parent company 178.1 191.3 -6.90%
Net interest-bearing debt 7,785 8,706 -10.6%
Backlog 36,151 35,309 2.4%