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FCC earnings in 1Q09


FCC earnings in 1Q09

  • La cifra de negocios disminuye el 7,5%
  • El mercado exterior supone el 40% del total
  • La cartera se incrementa el 6,3%
  • El EBITDA retrocede el 17%
  • Los gastos financieros disminuyen el 1%


  • Revenues declined by 7.5%
  • International revenues accounted for 40% of the total
  • The backlog increased by 6.3%
  • EBITDA declined by 17%
  • Financial expenses fell 1%

FCC obtained 2,787.8 million euro in revenues in the first quarter of 2009, 7.5% less than in the same period of 2008. 

This was due primarily to shrinking demand in the Cement business and a decline in revenues in non-environmental services, such as Urban Furniture, which fell by 14.2% with respect to the first quarter of 2008 as a result of the impact of the global crisis on consumer spending and advertising.

The international market, which accounted for 39.9% of group revenues, was stable in the quarter, falling just 1.7% with respect to the same period of 2008, when international revenues gained significantly in importance as a result of the establishment of the construction business in several European markets.

Breakdown of revenues by bussines (million euro)*

March-09March-08% Change
Environmental Services823.6824.3(0.1)
Torre Picasso6.66.44.2



*Realia has been equity accounted since 1 January 2009. For comparison purposes, this note presents a pro-forma income statement for 1Q08 in which Realia is equity-accounted.
The Renewable Energy business came into operation at the end of 2008 and has been classified as a separate division since 1Q09.

The backlog of works and services amounted to 34,769 million euro at 31 March 2009, 6.3% more than at 31 December 2008.


International revenues amounted to 708.9 million euro, 47% of the total, while ALPINE's contribution was lower for seasonal reasons (it accounted for 91.3% of total international revenues). Domestic revenues declined by 10.4%, in line with projections for the period and as a result of tailoring the pace of activity to customers' funding capacity.

International activity focused on Europe, which accounted for 89% of the total: Austria represented 38%, Germany, 20%.

Civil engineering provided 64% of revenues, up 3 percentage points with respect to 1Q08 due to the large backlog obtained the previous year in this area, which is more complex and has higher added value.

Environmental Services

Revenues were practically stable at 823.6 million euro. The pound sterling depreciated by 17.4% against the euro,  which had a major impact on the operations of UK subsidiary WRG; but for that effect, environmental services revenues would have increased by 3.4% in 2009, to 852.4 million euro.

Water management revenues increased by 3.9% due to this business's recurring nature and the start-up of new contracts.

Industrial Waste management experienced a decrease of 2.2% due to the impact of lower volumes and prices of benchmark raw materials (oil, paper and metal).

International revenues increased their share slightly to 33.7% of the total. The main foreign markets are the United Kingdom (56% of the total), Austria (7%), Czech Republic (16%) and the USA (7%).


Versia, which covers non-environmental services, saw revenues decline by 14.2% to 189.3 million euro. This was due to the impact of the economic slowdown on demand in the Urban Furniture area.

International activity accounted for 30.7% of the total, focused mainly in Handling (where it accounts for 74% of revenues) and Urban Furniture (52.2%).


Revenues declined by 35.4% to 247.8 million euro. This was the result of domestic activity declining by 41.5% and international activity by 9.4%. Nevertheless, domestic revenues did not fall as far as overall domestic cement consumption (-44.7%) as a result of the drastic adjustment in the residential construction industry in Spain since early 2008.

International revenues amounted to 65.9 million euro, 26.6% of the total. The change in revenues reflects the positive impact of the exchange rate effect (the dollar appreciated by 14.2% in the period) and a deceleration in demand in the US (36%).

The stimulus plans envisaged for Spain and the USA will support cement consumption this year, with the result that demand is expected to rise steadily. Additionally, the harsh winter weather had a particular impact on civil engineering work in 1Q09.

Renewable energy

This division obtained 25.1 million euro in revenues in the first quarter after its creation, of which 88.8% was from selling wind power and the remainder came from solar photovoltaic.

Torre Picasso

Torre Picasso, which is wholly owned by FCC, increased revenues by 4.2% to 6.6 million euro. At the end of March, the building had a 100% occupancy rate and average rents were slightly higher than in the first quarter of 2008. 


EBITDA amounted to 301.1 million euro and the EBITDA margin was 10.8% (12.0% in 1Q08). 

The decline in margin is attributable basically to the International Environment business, due to the effect of a decline in the volume of waste managed and in commodity prices, coupled with a lower volume of industrial waste. Versia also experienced the impact of sharp curtailment in demand for advertising in its Urban Furniture business.

In contrast, margins improved slightly in Construction and Cement (the latter due to lower energy prices, the implementation of cost-cutting plans, and optimisation of production capacity, and despite the sharp decline in cement sales).

Breakdown of EBITDA by bussines (million  euro)

Amout% of totalEBITDA margin (%)
Environmental Services124.241.215.1
Torre Picasso5.61.984.7

Net financial expenses amounted to 82.6 million euro, 1.1% less than in the first quarter of 2008. This reduction was made possible by a decline in the average cost of debt, supported by an increase in exposure to floating-rate debt.

Earnings attributed to equity holders of the parent company  totalled 33.1 million euro, 0.9% more than the seasonally-adjusted budget for the year. Earnings declined steadily in 2008, whereas the company projects a steady increase in all P&L ratios in 2009. Therefore, this comparison is between the best quarter of 2008, before the world economic slump, and the least favourable quarter of 2009, before the impact of the announced anti-crisis measures. 

At 31 March, net interest-bearing debt amounted to 8,130.6 million euro, i.e. 1,230 million euro more than at the end of December 2008. Most of that increase was due to the acquisition of 14 wind farms and to buying out minority interests in Cement companies.

Services and Energy together account for 68.8% of total debt, mostly connected to regulated long-term public utility contracts that provide a stable cash flow.