Abertis Infraestructuras S.A.
Annual Report 2006

Plain-text annual report

annual report _06 Key figures (in millions of euros) IFRS IFRS Consolidated financial and operating figures Operating revenues Ebitda - Gross operating margin Ebitda margin Ebit - Profit from operations Net allocated profit Total assets Net equity Debt Leverage (1) Net debt / Ebitda Cash flow Total dividends Total investments Average number of employees (1) Debt / net equity (in euros) Per share data Adjusted closing price for year (2) Adjusted profit (2) Gross dividend Pay - out 2003 1,283 915 71% 695 355 9,685 3,107 3,611 116,2% 3,9 595 237 527 2004 1,534 1,043 68% 743 467 9,940 3,318 3,516 106,0% 3,3 706 264 447 2004 1,549 1,050 68% 740 489 7,095 2,904 3,490 120,2% 3,4 706 264 447 2005 1,906 1,204 63% 833 511 8,447 3,036 4,256 140,2% 3,5 822 290 941 2002 794 534 67% 402 195 6,459 2,033 2,521 124,0% 4,8 330 156 1,301 3,990 4,617 5,668 5,668 7,831 10,763 IFRS 2006 3,335 2,099 63% 1,343 530 19,217 4,447 12,168 273,6% 5,6 1,221 304 3,590 2002 8.89 0.46 0.45 76% 2003 10.36 0.58 0.45 67% 2004 14.69 0.77 0.48 57% IFRS IFRS 2004 14.69 0.80 0.48 54% 2005 20.25 0.84 0.50 57% IFRS 2006 22.50 0.87 0.50 57% Capital market 2002 2003 2004 2004 2005 2006 Listed shares 31/12 (class A + class B) Total market capitalization (in millions of euros) Adjusted annual appreciation (class A) (2) 345,629,915 3,784 1.3% 525,220,358 6,296 16.6% 551,481,375 8,897 41.9% 551,481,375 8,897 41.9% 579,055,443 12,331 37.8% 608,008,215 13,630 11.1% (2) Adjustment for 1x20 bonus share issue Revenues by activity 76%_ Highways 11%_ Telecommunications 8%_ Airports 4%_ 1%_ Car parks Logistic Services 2006 82%_ Highways 7%_ 11 %_ Telecommunications 2002 Car parks Revenues by country (millions of euros) 794 6% 94% 1.283 6% 94% 1.549 5% 95% 1.906 7% 11% 82% 3.335 5% 6% 37% 52% 2002 2003 2004 2005 2006 Spain France Great Britain Rest of world (Please turn over) Operating revenues (in millions of euros) 62% Ebitda (in millions of euros) 75% 71% 74% 21% 23% % variation 2000 1500 1000 500 0 15% 15% % variation 2002 2003 2004 2005 2006 2002 2003 2004 2005 2006 Net profit (in millions of euros) % 2 % 2 4 % 8 3 % 8 1 % 5 % 2 1 % 2 8 % 1 1 Cash Flow (in millions of euros) 80% 1200 1000 800 600 400 200 0 Allocated net profit Comparable allocated net profit 48% 19% 16% % variation 2002 2003 2004 2005 2006 2002 2003 2004 2005 2006 Total dividends (in millions of euros) 290 304 264 237 156 Evolution of abertis vs. Ibex 35 (Base 28/12/01=100) abertis share price Ibex 35 300 260 220 180 140 100 60 20 2002 2003 2004 2005 2006 2002 2003 2004 2005 2006 Investments (in millions of euros) Workforce (in millions of euros) 281% 111% -15% -59% % variation 10000 8000 6000 4000 2000 0 38% 37% 23% 16% % variation 3500 3000 2500 2000 1500 1000 500 0 600 500 400 300 200 100 0 300 250 200 150 100 50 0 3500 3000 2500 2000 1500 1000 500 0 2002 2003 2004 2005 2006 2002 2003 2004 2005 2006 Variations in 2003 were affected by the merger of Acesa and Aurea to create abertis, and in 2006 by the incorporation of sanef. Significant events of the year 1st quarter 2006 > Arasur inaugurated its first four logistics warehouses with a total ground area of 70,000 square metres. The forecasted plan will be concluded within nine years and will consist of an area of two million square metres. > The consortium led by abertis acquired 75.65% of sanef, a French highway concessionary that manages toll highways in the northwest of France and Normandy. The transaction was carried out through Holding d'Infraestructures de Transport SAS (HIT), made up of abertis (in a majority position) and a group of prominent French investors (Caisse des Dépôts, Predica, Axa and FFP). A takeover bid was subsequently executed on the 24.3% remaining shares to achieve 95.98% ownership of sanef. > abertis airports became 5% shareholders in Concesiones Aeroportuarias, the concessionary of the future Castellón airport. > The Argentinean government ratified the renegotiation agreement of autopistas del oeste and Ausol thereby approving a 13.83% and 15.01% increase in rates, respectively. 2nd quarter 2006 > saba set up saba Aparcamientos de Levante, S.L., of which saba and Parkings Ilicitanos each own 50%, in order to jointly develop the car park business in Alicante and Murcia. > acesa signed an agreement with the Spanish Ministry of Public Works to expand the AP-7, which implies a major improvement to this strategic Mediterranean corridor. > On the 23rd of April the Boards of Directors of abertis and Autostrade approved the beginning of an incorporation process through the merger of the two companies. The equation of exchange was established at 1 x 1 plus an exceptional dividend of 3.75 euros per share to be received by Autostrade shareholders. > The takeover bid was finalised on the remaining 4.02% of sanef stock not controlled by the consortium HIT led by abertis, achieving the acquisition of 100% of sanef share capital. > The abertis Ordinary General Shareholders' Meeting approved the individual and consolidated annual accounts for the 2005 financial year, an additional dividend of .25 euros per share, and a bonus share issue charged against reserves of one new share for every 20 held. > On the 17th of May an additional dividend for 2005 was paid out at a total of 145 million euros. > saba opened its first car park in Sardinia (Sassari). > The Argentinean government and abertis signed a future protocol by which autopistas del oeste will implement section IV of the western access highway. > abertis issued bonus shares for 86.8 million euros, as approved in May. > The Extraordinary Shareholders' Meetings of abertis and Autostrade approved the merger of the two companies conditioned to the authorisation from European competition authorities and approval by the Italian government. 3rd quarter 2006 > abertis reached an agreement with the Portuguese government for the construction and operation of a 100-hectare multi- modal logistics platform north of Lisbon. > saba was granted a 50-year concession for the management of a 947-space car park in Pamplona. > Arasur signed an agreement for the use of a 10,900 m2 industrial warehouse at the Arasur multi-modal logistics platform, located in Rivabellosa (Alava). > abertis held its position in the international sustainability indexes Dow Jones Sustainability World (DJSI), and European Dow Jones Sustainability Stoxx (DJSI). > The companies abertis and Autostrade received approval for the merger project from the European competition authorities. > Televisión Española awarded abertis telecom a contract for the transmission and broadcast of the analogue and digital signals for all of their channels until 2009. 4th quarter 2006 > On the 30th of October an interim dividend on 2006 earnings was paid-out at 0.25 euros per share, totalling 152 million euros. > The company HIT, through its affiliate HIT Finance B.V. refinanced part of the debt stemming from 100% purchase of sanef in April 2006, with a bond issue of 1,500 million euros at fifteen years. > abertis telecom signed an agreement with Retegal to collaborate on the implementation of the coverage network for TVE digital programmes in Galicia. > autopistas del oeste placed corporate bonds in the amount > saba acquired 100% of the company Italparcheggi, owner of of 150 million Argentinean pesos. more than 2,700 parking spaces in Italy. > The consortium A'lienor, owned by sanef (35%) and Eiffage (65%) were awarded a 55-year contract for the construction and subsequent operation of the 150 kilometres of the A-65 highway joining Langon and Pau in the south of France. > abertis sold its shares in Xfera (8.69%) to Telia-Sonera. > 25 Spanish companies and organisations, among them abertis telecom, created Project Furia (future integrated audio-visual network) for the analysis of second generation DTT. > abertis telecom acquired 32% of capital in the European satellite operator Eutelsat Communications S.A., a company listed on the French stock market. The transaction was formalised on the 23rd of February 2007 after all the required permits from the competition authorities had been granted. > abertis and Autostrade announced the impossibility of moving forward with the merger under the terms and conditions stipulated in the terms sheet issued by both companies on the 23rd of April. The merger had been approved at Shareholders' Meetings of both companies on the 30th of June. annual report _06 0 contents page 04 Letter from the chairman page 11 1_ corporate administration page 12 Corporate administration page 14 Administrative bodies Board of Directors Delegated monitoring body Senior Management Business units page 19 2_ abertis group business activities page 22 Highways page 34 Telecommunications infrastructures page 38 Airports page 44 Car parks page 48 Logistics services page 53 3_ corporate social responsibility page 54 The abertis CSR Strategic Plan page 60 Summary of indicators 2006 page 63 4_ financial and economic information page 64 Consolidated figures page 70 Financial management page 72 Shareholders and the stock market 04_05 letter from the chairman letter from the chairman Dear Shareholders, 2006 was possibly one of the most significant and important years in the history of our Group, in terms of both the scale of the leap forward in internationalizing our activities and their positive performance. In the last two financial years –2005 and 2006– abertis has been able to fully develop its growth potential abroad, accumulating investments in expansion in excess of 8,000 million euros in company value (price + debt) while at the same time maintaining our high Single A rating from Standard & Poor’s and Fitch Ratings. In this respect we can boast that our proven capacity for inorganic growth joins our no lesser capacity –for which we can thank our management team– for the day-to-day management of our business activities, resulting in consolidated, recurrent growth year-on-year. This represents the best possible guarantee for the future for our shareholders, our staff, the users of our infrastructures and public administrations, all of whom put their faith in our savoir faire and our long-term commitment to managing assets which are a key factor in the competitiveness of any economy. In the last two financial years –2005 and 2006– abertis has been able to fully develop its growth potential abroad, accumulating investments in expansion in excess of 8,000 million euros. An abertis open to the world sanef, Eutelsat and Autostrade are the three names that best embody what 2006 has represented for abertis. All three express the strategic understanding we have of the challenges facing us as a Group –with a focus on infrastructures and geographical diversification; selectiveness of investments, and a commitment to a model with a markedly industrial profile. They also express the opportunities offered to us by the emergence of public-private collaboration models in the leading economic regions around the world. The acquisition of the sanef highway concessionary in France –in whose parent company we have a controlling share of 52.5%– and our acquisition of 32% of Eutelsat’s capital, making us the main shareholder in the leading European satellite operator, offer concrete examples of the integrated vision of infrastructures that characterises our Group’s management model. This is a model in which infrastructures are not seen as isolated entities but rather as systems that complement and strengthen each other and which, through their very nature –the physical interconnection of regions, the transmission of information, the mobility of people and goods– surpass countries’ territorial limits. Eutelsat is a prime example of this, as its network of 23 satellites reaches 90% of the world’s population. Eutelsat represents another step forward in our strategy of sectoral and geographical diversification. It brings greater visibility to our activities in telecommunications and complements them technologically by adding the satellite transmission network to abertis telecom strong position in terrestrial signal transportation. I should also like to mention the merger project with Autostrade that we announced in April 2006, which was approved by the General Shareholders Meeting on 30 June. The vision, the direction and the potential that inspired the project are still as valid today as they were at the beginning. The total consensus of the Boards of Directors of the two companies clearly reflected the same shared ambition of all the partners. The unanimous approval of the General Shareholders Meetings demonstrated their enthusiasm for a project that would turn us into the world leader in the management of infrastructures. The collaboration –during a period of more than eight months– between the teams of executives from both groups confirmed the timeliness of the moment and the solidity of 06_07 letter from the chairman sanef, Eutelsat and Autostrade are the three names that best embody what 2006 has represented for abertis. All three express the strategic understanding we have of the challenges facing us as a Group: a focus on infrastructures and geographical diversification; selectiveness of investments, and a commitment to a model with a markedly industrial profile. the bonds which should have allowed us not only to close the operation but also to lay the foundations for managing a new abertis. All of us know that despite these entirely favourable circumstances and despite the explicit, unrestricted authorization of the European Commission, in December we were obliged to suspend the process of integration between the two companies due to the degree of uncertainty induced by the new regulatory framework for highway concession companies, which was passed in Italy after the merger announcement. As I have mentioned on other occasions, the operation with Autostrade was approached as an opportunity to put together a European business venture with the talent, the quality and the size to compete on the world stage. Above and beyond the effective possibility of this opportunity materializing, our ambition and our global plans continue apace. It is from a shared vision of the role that corporate groups can play in building a competitive Europe, and not from a position of distrust, that we will consolidate a powerful economic area with the capacity to influence and lead the process of globalization. I have already mentioned in my introduction to the Annual Report for 2005 that today, more than ever, our group is a leading global operator in infrastructures. The geographical origin of abertis’ operating revenues is more diverse and qualitatively better. With Eutelsat –still not consolidated in the 2006 figures– half our turnover is now generated abroad and 51% of the network of highways managed by abertis are in France, a country with a consistent, reliable model in terms of the planning and pricing criteria of its high-capacity road network; a country that represents one of the core hubs of the European and global project we are putting together. The economic context of our activities The year 2006 was once again marked by the strong growth of international trade and the Gross World Product, and it looks as if the conditions are ripe for 2007 to present the same favourable economic situation. In terms of the distribution of this growth, despite the relative improvement in the Euro Zone of +2.7% –with Germany continuing to improve its basic measurement indicators and, what is perhaps more important, the climate as perceived by economic agents– the most dynamic performances were forthcoming from emerging countries, with a rate of 6.7% –China being particularly noteworthy with 10.3%. With regard to the United States, its role as the engine of the world economy, with growth of between 2.5% and 3%, was put into context by the increasing economic punch of the emerging countries, especially those known as the BRIC (Brazil, Russia, India and China). It seems, then, that 2007 will see a continuation of this more multipolar trend from an economic point of view, with the United States, Europe and Asia as the hubs of an economic surge which, though moving at different speeds, is still consistently heading upwards. 2006: a great year The main measurement indicators of abertis in 2006 reflect what we can undoubtedly classify as a brilliant year. Operating revenues –thanks to the consolidation of sanef within our group– grew by 75% to 3,335 million euros. The EBITDA reached 2,099 million euros, showing growth of 74%, and cash flow increased by 48% to 1,221 million euros. Investments, meanwhile, came to 3,590 million euros of which 93% were earmarked for expansion projects (sanef, implementing digital terrestrial TV, the Guadarrama tunnel, capacity increases at airports, new car parks and logistics platforms), while 259 million euros were set aside for operating investments. Of the total revenue, 48% was generated outside Spain, and in terms of sectors, 76% came from highway operations, 11% from telecommunications infrastructures and 8% from airport activities. saba, our car park operator, contributed 4% of revenue while the logistics platforms represent 1% of the Group’s total income. Net profits came to 530 million euros, showing an increase of 3.7% which, if we disregard non-recurring factors, rises to 22%. The main activity indicators of our areas of business confirmed a positive evolution which, not counting the significant qualitative leap in our indicators represented by sanef, would have put our growth at 11%. In the case of highways, we should highlight the extraordinary performance of traffic on the Spanish 2007 is going to continue a more multipolar trend from an economic point of view, with the United States, Europe and Asia as the hubs of an economic surge which will consistently be heading upwards. 08_09 letter from the chairman The true value of abertis springs from its credibility, efficiency, dialogue and collaboration. network, with an increase of +5.2% (+9.2% in income) and the excellent progress throughout the year of the sanef network which closed with growth of 3.9% in the last quarter and overall growth of 1.2% over the year (+6% in income). The evolution of abertis telecom in 2006, which has still not been affected by the impact of Eutelsat’s acquisition, was marked by the implementation of digital terrestrial television in Spain which, though representing a significant investment effort of around 350 million euros, has allowed a significant increase in both income, up 33% to 373 million euros, and EBITDA, up 60% to 159 million. Meanwhile, passenger traffic in the airports handled by abertis airports grew by 4%, in line with the sector’s growth on a global scale, with revenues reaching 282 million euros. We are keeping a very close eye on the privatization processes being announced by various countries, particularly France and the United States. We believe that this line of business has considerable future potential, with average year- on-year growth for this sector estimated at 4% through to 2025. saba, the company that operates abertis’ car parks, has remained faithful to its strategy of international expansion, with operations such as the acquisition of Italparcheggi in Italy which has allowed it to increase its parking spaces to 2,700 in that country, where we have a presence in 17 cities. We have also continued growing in Spain through an important agreement to operate the 1,000 spaces in Plaza del Castillo in Pamplona. saba closed 2006 with 87,127 parking spaces under management, 4.3% more than in 2005. The expansion of its activities was accompanied by an increase of 8% in revenues, with 120 million euros, and 15% in EBITDA, with 48 million. Our activities in the logistics platforms sector were marked by the start-up of the first phase of the Arasur platform (in Alava), which during 2006 was already providing services to its first operators. The Seville platform –Sevisur– fulfilled all its objectives and we are looking at the possibility of enlarging it. This progress is reflected in the 12% increase in income –20 million euros– and 7% in the EBITDA, with 6 million euros. Another achievement worth noting is the agreement we reached in July 2006 with the Portuguese government to develop a new logistics platform in Lisbon, just 5 kilometres from the planned location of Lisbon’s new international airport and in a privileged communications node with direct access to the motorway linking Lisbon with Porto, the railway network and the Tajo estuary. The value of abertis The excellent performance of our business activities, together with an expansion strategy geared towards long-term profits, is reflected in our market value which allowed us to close the 2006 financial year with capitalisation in excess of 13,500 million euros with appreciation of 11%, which, though more moderate than the previous year, represents abertis’ consolidation as one of the top-ranking IBEX 35 companies in the last three years, with total profitability –including capital increases– of 120%, and 40% in annual terms. We are certain that our investors will continue to see a guarantee of sustained profitability in the key elements of our balance sheet and our growth policy and, what is perhaps the most important, that this growth is sustainable in the short, medium and long term. It is in view of this that we are proposing to distribute a complementary dividend of 0.25 gross euros, in addition to the interim dividend distributed in November and the released capital increase of 1 new share for 20 old shares. All things considered, the true value of abertis springs from our credibility, resulting from the consistency between what we say and what we do. Our efficacy is the result of our skill in managing the resources that our shareholders entrust us with, which we employ in the different projects through which we serve society. Dialogue and collaboration are the premise behind our capacity for growth in open and complex companies. These are the main principles that structure our business actions and which make our group a responsible social and economic stakeholder, a true corporate citizen. This spirit and this understanding of our activities are what inform our corporate social responsibility strategy, the progress of which in all the business sectors that make up the abertis group is detailed in the specific report which rounds of this Annual Report for 2006. Once again, I should like to reiterate my thanks for the trust you have placed in abertis and in the 11,000 people who, from different positions of responsibility, carry out the Group’s work with the aim of materializing a project which, to a great extent, is a facilitator of progress and growth for the companies in which we operate. Isidre Fainé, Chairman of abertis 1 corporate administration page12 Corporate administration page14 Administrative bodies Board of Directors Delegated monitoring body Senior Management Business units 12_13 corporate administration corporate administration approved by means of General Shareholders' Meetings, the company's most powerful governing instrument. In order to ensure the rigour and independence of the proposals and decisions put before the Board of Directors, abertis guarantees the Audit and Control Committee and the Appointment and Remuneration Committee a more active role in making fundamental company decisions. The Board of Directors assumes responsibility for transparency of public information issued to the markets about abertis, as recommended by the CNMV, and of information about transactions carried out with associated parties, under the supervision and oversight of the Audit and Control Committee. Similarly, the Board ensures the independence and efficacy of the internal audit function, while making sure that executive management takes into account the conclusions and recommendations outlined in their reports. One of latest modifications to Board regulations stipulates that the Appointment and Remuneration Committee will be responsible for improving board member appointment, dismissal, continuance and evaluation processes, as well as for establishing their remuneration. The goal is to maintain a Board made up of members who contribute the maximum level of competence, solvency and experience in order to ensure that all its duties are carried out effectively. The common interest of the shareholders The corporate administrative policy of abertis is built on two basic pillars that govern all its activities: defending its shareholders’ company and common interests and maintaining transparency and diligence in all public information distributed to the markets regarding the company’s development. To these fundamental objectives, which have always played a role in the activities of the Board of Directors, abertis is gradually adding the central recommendations of the new Unified Code of Good Governance approved by the Spanish Continuous Stock Market Authorities (CNMV) on the 22nd of May 2006. The internal regulations of abertis, which are basically contained in the corporate statutes, the regulations of the General Shareholders’ Meeting and the regulations of the Board of Directors, took on new recommendations in 2006 through the modification of some of the articles of the regulations of the Board of Directors. These modifications primarily involve the explicit commitment to carry out all the responsibilities of the Board of Directors associated with general supervisory functions. These responsibilities are to communicate and promote company policy (strategic responsibility), monitor managing authorities (monitoring responsibility) and act as a link to shareholders (communication responsibility). abertis has 100,000 shareholders whose interests must be defended and protected through the actions of the Board of Directors, the governing body of the company, whose proposals must in turn be 14_15 corporate administration _ administrative bodies administrative bodies Board of Directors The members of the abertis Board of Directors, as of the 31st of December are: Isidro Fainé Casas (Chairman) Pablo Vallbona Vadell (1st Deputy Chairman) G3T, S.L represented by Carmen Godia Bull (2nd Deputy Chairman) Angel García Altozano (3rd Deputy Chairman) Salvador Alemany Mas (Chief Executive Officer) Caixa d’Estalvis de Catalunya represented by Josep Maria Loza Xuriach Comunidades Gestionadas, S.A. represented by Antonio García Ferrer Enrique Corominas Vila Dragados, S.A. represented by Demetrio Ullastres Llorente Carlos Godó Valls Miguel Angel Gutiérrez Méndez Ernesto Mata López Enric Mata Tarragó Braulio Medel Cámara Vasco de Mello José Luis Olivas Martínez Ramón Pascual Fontana Manuel Raventós Negra Leopoldo Rodés Castañé Miquel Roca Junyent (Secretary, non-board member) Juan A. Margenat Padrós (Vice-secretary, non-board member) In 2006 Jorge Mercader ceased to be a member of the board (his position has been filled by Manuel Raventós Negra). Delegated monitoring body Executive Committee Isidro Fainé Casas (Chairman) Pablo Vallbona Vadell (1st Deputy Chairman) G3T, S.L represented by Carmen Godia Bull (2nd Deputy Chairman) Angel García Altozano (3rd Deputy Chairman) Salvador Alemany Mas (Chief Executive Officer) Caixa d’Estalvis de Catalunya represented by Josep Maria Loza Xuriach José Luis Olivas Martínez Miquel Roca Junyent (Secretary, non board member) Juan A. Margenat Padrós (Vice-secretary, non-board member) Audit and Control Committee Ernesto Mata López (Chairman) Caixa d’Estalvis de Catalunya represented by Josep Maria Loza Xuriach Enrique Corominas Vila Juan A. Margenat Padrós (Secretary) Appointment and Remuneration Committee Manuel Raventós Negra (Chairman) Angel García Altozano Miguel Angel Gutiérrez Méndez Juan A. Margenat Padrós (Secretary) In 2006 Jorge Mercader Miró ceased to be a member of the Appointment and Remuneration Committee (he was replaced by Manuel Raventós Negra). 16_17 corporate administration _ administrative bodies Senior Management as of the 31st of December 2006 Chief Executive Officer: : Salvador Alemany Mas Company Secretary: Director of Legal Services: Director of Corporate Management Director of Corporate Development Director of Fiscal Planning Director of Corporate Security Juan A. Margenat Padrós Marta Casas Caba Josep Martínez Vila David Díaz Almazán José María García Martín Luis Jiménez Arrébola Director of Fiscal Planning and Corporate Governance Jordi Lagares Puig Director of Personnel and Organisation Joan Rafel Herrero Director of Operational Development Director of Construction Chief Financial Officer Director of Finance Juan Rodríguez de la Rubia Rodolfo Vicente Bach Francisco José Aljaro Navarro Lluís Subirà Laborda Director of Institutional Relations and Quality Ricard Maxenchs Roca Director of Studies and Corporate Communication Antoni Brunet Mauri Shared Services Managing Director of serviabertis Director of IT systems Director of Engineering and Projects Manuel Cruces Socasau José Antonio López Becerra Carlos Pitarque Durán Director of Organization, Purchasing and Services Jordi Pujol-Xicoy Gimferrer Director of Administration Francesc Sánchez Farré Business units Highways Managing Director of sanef Henri Jannet Managing Director Easth-South (aumar) Américo Jiménez Rodríguez Managing Director Centre-North (iberpistas) José Mª Morera Bosch Managing Director of Catalonia-Aragon (acesa and aucat) Lluís Serra Serra Director of International Highways Jordi Graells Ferrández Telecommunications Infrastructures Managing Director of abertis telecom Tobías Martínez Gimeno Airports Managing Director of abertis airports Miquel Puig Raposo Car Parks Managing Director of saba Joan Font Alegret Logistics Services Managing Director of abertis logística Josep Canós Ciurana 2 abertis group business activities page 22 highways page 34 telecommunications infrastructures page 38 airports page 44 car parks page 48 logistics services 20_21 abertis group business activities abertis is an international group that manages mobility and telecommunications infrastructures through five business areas: Continuing dedication to the process of internationalising its business activities has led the abertis group to operate in 16 countries: _ highways _ telecommunications infrastructures _ airports _ car parks _ management of logistics areas Spain Andorra Portugal Sweden United Kingdom France Italy Morocco South Africa United States Puerto Rico Costa Rica Colombia Bolivia Chile Argentina Share of operating revenues by sector and geographic area 76% 11% 8% 4% 1% 52%_ Spain 37%_ France 6%_ United Kingdom 5%_ Rest of world 2006 63% 15% 15% 6% 1% 82%_ Spain 2005 2006 11%_ United Kingdom 2005 7%_ Rest of world Average workforce by sector and geographic area 58% 12% 19% 9% 2006 40% 16% 29% 12% 2% Corporation 3% Corporation 2005 47%_ Spain 30%_ France 18%_ United Kingdom 5%_ Rest of world 64%_ Spain 2006 28%_ United Kingdom 2005 8%_ Rest of world The incorporation of sanef in 2006 shifted the relative weight of the different business units, placing increased weight on the highways sector. It also consolidated the internationalisation of the group’s business activities, a process that had already significantly moved forward with the acquisition of TBI in 2005. 22_23 abertis group business activities _ highways highways Investing for the future: more traffic, higher capacity, improved safety Autostrade announced a merger project to form the first European infrastructure group of reference in the world. Although the European Commission approved the merger, the Italian government did not grant authorisation but instead initiated new legislation that unilaterally modified the regulatory framework of highway concessions in Italy, thereby changing the conditions under which the transaction had been approved by the companies’ shareholders. That being the situation, the administrators of both companies decided to put the merger process on hold with the hope that eventually conditions will be in place to allow reconsideration of the project. This business unit continues as the main business activity of abertis and brought in 2,537 million euros in revenues (representing 76% of the company’s total revenues) and 1,827 million euros in EBITDA (87% of the consolidated figure). The incorporation of sanef increased the relative weights of these figures, which in 2005 were 63% and 81% respectively. In 2006 the highways sector of abertis showed an excellent level of business activity, with especially notable traffic volumes in Spain as well as on the French and Argentinean networks. But if anything characterises this sector this year it is the combined investment effort made by its concessions, both in terms of operational investments to improve the quality and safety of its highways, and in projects, whether already implemented or agreed upon with the administration, in the most dynamic areas of the sector. Some examples of these are the projects to widen the lanes on the AP-6 and construct a third tunnel at Guadarrama (iberpistas) and the agreement signed for the expansion the AP-7 (acesa) centailing an investment of 500 million euros by 2009. The implementation of automatic electronic toll payment systems in all the concessions in Spain and France has also been very successful and represented 20% of all abertis highway transactions and nearly 30% of acesa transactions. And we must not forget the main corporate transaction that abertis carried out this year: the purchase of 57.5% of the French concessionary sanef at an investment of 3,064 million euros. The celebrated highway concessionary revolutionised abertis’ business profile and definitively transformed the corporation into an international group in 2006, with 48% of revenues coming from outside Spain (37% from France). This year abertis and the Italian concessionary Highway sector growth strategy abertis’ growth strategy in this sector is based on the analysis of new opportunities mainly in North America (US, Canada and Mexico), Latin America (mainly Chile), and in Europe (France, Spain, the UK, Ireland and central and eastern European countries). Opportunities should open up in both Europe and the United States in the next few years, whether in terms of new road network projects to be implemented and operated by concessions, or in the allocation and privatisation of existing road networks already in operation. abertis has significant concessions in Spain, France and the rest of the world and enjoys an excellent combination of geography and level of project development (from already developed concessions to projects in the construction or start-up phase) which together ensure a balanced and sustainable future profit flow for shareholders. Spain Direct or shared management acesa aumar iberpistas castellana Other holdings Túnel del Cadí Accesos de Madrid Ciralsa aucat aulesa Avasa Trados 45 Autema Henarsa France Rest of world sanef sapn masternaut (*) APR autopistas del oeste gesa Alis Routalis Autostrade Brisa Elqui Ausol Coviandes RMG PTY (*) Company providing telematic geo-localisation and toll services for vehicles. 24_25 abertis group business activities _ highways Spain In Spain, abertis is the leader in this sector. abertis directly manages more than 1,500 kilometres of highway, representing 59% of all toll roads in the country, and is a minority holder in a series of concessions comprising a total of 229 kilometres. Direct management acesa aumar iberpistas castellana aucat aulesa Avasa Montgat-Palafolls (C-31 / C-32) La Jonquera-Barcelona-Tarragona (AP-7) Montmeló-El Papiol (AP-7) Zaragoza - Mediterráneo (AP-2) Tarragona-Alicante (AP-7) Seville-Cadiz (AP-4) Villalba-Adanero (AP-6) Villacastín-Ávila (AP-51) San Rafael-Segovia (AP-61) Castelldefels-El Vendrell (C-32) León-Astorga (AP-71) Bilbao-Zaragoza (AP-68) Trados 45 Tramo II (M-45) Other holdings Túnel del Cadí Túnel del Cadí (C-16) Accesos de Madrid Madrid-Arganda del Rey (R-3) Madrid-Navalcarnero (R-5) Ciralsa Autema Henarsa Circunvalación de Alicante Sant Cugat-Manresa (C-16) Madrid-Guadalajara (R-2) % holding Concession end 100% 2021 100% 100% 100% 100% 79.2% 50% 50% 2019 2031 2031 2039 2055 2026 2029 Km 49 250 27 216 374 94 70 23 28 58 38 294 15 1,535 Km % holding Concession end 37.2 % 35.2 % 25.0 % 23.7 % 22.5 % 2023 2049 2040 2037 2024 30 32 29 29 48 61 229 aulesa Avasa acesa aucat Túnel del Cadí Autema Bilbao León Astorga Adanero Ávila Navalcarnero Zaragoza La Jonquera Segovia Guadalajara Madrid Arganda del Rey Palafolls Barcelona Tarragona Seville Cadiz aumar Valencia Alicante iberpistas castellana Trados 45 Accesos de Madrid Henarsa aumar Ciralsa direct management other holdings Financial and business results Revenues generated from direct-managed highway concessions in Spain reached 1,294 million euros and represented 41% of abertis’ total operating revenues. In 2006, excellent performance in the group’s Spanish highways sector brought about an increase in revenues and EBITDA of 7.1% and 8.3% respectively over the 2005 figures. A series of positive events in 2005 such as the compensation payment received for the rate freeze in 2000 and capital gained in the sale of Concema and A.C. Gallega partially detract from the impact of the 2006 increase. Increases in traffic on the abertis network of highways in Spain exceeded expected figures, reaching 5.2% at the end of 2006, a figure which puts AADT on directly- managed highways at 26,785 vehicles: This positive performance was generally experienced on all highways, both those directly managed by abertis and those in which abertis holds shares. Of the latter, the Madrid radial highways (R3, R5 and R2) are especially noteworthy, with increases of over 20% as they are still in the first phase of activity. Operating investments of 76 million euros were made in Spanish highways in 2006, mostly in surface courses and improvements in toll collection areas. Direct management Concessionary AADT 2006 Var % Operating revenues Var % EBITDA Var % EBIT Var % Cons. results 2006 AADT (millions of euros) acesa aumar iberpistas castellana aucat aulesa Avasa Trados 45 37,225 26,078 30,454 5,779 32,438 4,269 14,176 79,763 4.6% 5.8% 5.0% 7.6% 7.7% 8.2% 4.7% 9.0% 605 370 118 9 100 5 74 12 7% 8% (2%) 10% 12% 13% 12% 5% 471 319 94 4 84 2 61 11 8% 9% (1%) 4% 12% 17% 14% 5% 375 254 52 (4) 70 (1) 43 8 9% 11% (12%) 0% 15% 44% 19% 15% 26,785 5.2% 1,294 7.1% 1,046 8.3% 799 9.3% 26_27 abertis group business activities _ highways will allow higher capacity on the AP-6 highway and the access corridor from the centre of the peninsula to north-western Spain (Castilla León, Asturias and Galicia). The electronic toll payment system Via T, which was implemented in 2005 for heavy goods vehicles, was consolidated in 2006 and went from representing 14% of the total number of transactions in 2005 to 20% on the abertis- operated Spanish highway network in 2006. This increase of 6.5 points was mainly the result of heavy goods vehicle use. This system is currently in place on all abertis toll highways in Spain. Significant events In April 2006, the Council of Ministers approved the agreement between the Spanish Ministry of Public Words and acesa for the expansion of the AP-7. The agreement implies a substantial improvement to the strategic Mediterranean corridor. The project consists of the expansion of the highway to three lanes for 123 kilometres, from the Mediterranean barrier to Vila-seca / Salou in Tarragona, and the Maçanet–La Jonquera stretch in Gerona. It also envisages the expansion to 4 lanes between Fornells de la Selva and Medinyà (Gerona ring road) and the replacement of 3 main toll barriers with access route barriers. The agreement means an investment by acesa of approximately 500 million euros and does not entail increases in rates or concession terms. The investment will be recovered through higher revenues generated by the increased traffic that the expansion of lanes will provide, and if the revenues obtained do not prove sufficient, they will be complemented by economic compensation granted the concessionary by the Ministry upon termination of the concession. The fourth lane on the Las Rozas–Valle de los Caídos stretch went into service in 2006 and works continued on the finalisation of the Guadarrama road and the third tunnel and the third carriageway forecasted for the first quarter of 2007. These works 28_29 abertis group business activities _ highways France abertis In 2006 abertis held a 57.55% share in the French concessionary group sanef. This group is responsible for the management of 1,743 kilometres of toll highways until 2028 through two concessionaries, sanef in north-western France and sapn in Normandy. These figures represent 21% of the entire French network and 53% of the abertis highway network. sanef manages four of the seven highway access routes to the Ile de France (Paris region) as well as the highways connecting Germany, Belgium and Luxembourg with northern France and the United Kingdom. sanef Calais Alençon Paris Strasbourg direct management Direct management Other holdings Km % holding Concession end Km % holding Concession end sanef sapn 1,375 57.55% * 368 99.97% 2028 2028 masternaut ** 84.83% (*) abertis holds 57.55% interest in sanef, which holds the shares in the other companies. (**) Company providing telematic geo-localisation and toll services for vehicles. Alis 125 19.67% 2067 sanef also holds shares in masternaut, a leading company in France in the geo-localisation of vehicles. The company manufactures and markets communication systems intended for the tracking and management of vehicles based on satellite localisation technology (GPS), transmission of GSM/GPRS data and internet. achieved a 10.1% reduction in the accident rate on its highway network as well as a 27% decrease in work-related accidents. Significant events The consortium A’lienor, owned by sanef (35%) and Eiffage (65%) was awarded a 55-year contract for the construction and subsequent operation of the 150 kilometres of the A-65 highway that join Langon and Pau in the south of France. Forecasted investment for construction amounts to 1,000 million euros and the new highway is expected to be operational by 2010. In 2007, abertis transferred 5% of its holdings in Holding d’Infraestructures de Transport SAS (HIT) to another shareholder, Caisse des Dépôts, but remains the majority holder with 52.5% of share capital. In the first quarter of 2007, sanef was awarded two contracts for the implementation and management of electronic toll payment systems on the Goleen Bridge in Vancouver, Canada and on Dublin’s M50 highway. These events support the strategy to consolidate the company’s development of electronic toll systems and further confirm the willingness of sanef to be a leading actor in the next international calls for tender for the implementation of electronic toll payment systems. Financial and business results Revenues generated from direct-managed highway concessions in France reached 1,241 million euros and represented 37% of abertis’ total operating revenues. Operating revenues from the French concessionary consist of, in addition to toll revenues, revenues for telematic services, fees for service areas, and engineering and telecommunications services. Toll revenues increased by 6% due to increased traffic, a rise in average rates through annual review (+2.3%), a reduction in discounts for road hauliers and an improvement in the rate level due to optimisation between stretches and other reasons. Traffic volume rose gradually during the year, reaching an increase of 3.9% in the last quarter of 2006, putting total annual growth at 1.2%. Regarding other revenues, telematic services, in a phase of expansion, showed an increase of 42%, mainly due to higher sales of geo-localisation systems and a higher number of customers through their affiliate masternaut. In France, 101 million euros were invested in the renovation and modernisation of the existing network, (consolidation of automatic toll transactions), in resurfacing (181 kilometres of road) and in finalising three new junctions. sanef put considerable effort into safety improvements during the year. The company IMD sanef sapn Total IMD 2006 Var % 22,435 27,108 1.2% 1.5% 23,340 1.2% Cons. results IFRS (millions of euros) 2006 Var % Operating revenues EBITDA EBIT 1,241 6.4% 806 524 11.0% 15,1% 30_31 abertis group business activities _ highways Rest of the world abertis has holdings in a series of projects in Argentina and Puerto Rico and has minority holdings in Europe and South America. In Europe, abertis has a strategic presence in two of the main private highway operators, the Italian company Autostrade and the Portuguese company Brisa, in which abertis has holdings of 6.7% and 10% respectively and maintains positions on their Boards of Directors. The companies combined the normal development of their business areas with a selective process of national and international expansion, leading Brisa to open new stretches of highway and to acquire an additional 40% of Auto-Estradas do Atlântico. The process also resulted in Autostrade's acquisition of holdings in Costanera Norte (in Santiago de Chile) and in Slaexport (in Poland). Puerto Rico APR Teodoro Moscoso Bridge San Juan Colombia Coviandes Bogotá Bogotá Villavicencio Chile Elqui La Serena Ovalle Los Vilos Santiago San Fernando San Isidro Buenos Aires Argentina Ausol autopistas del oeste Buenos Aires Luján Buenos Aires Direct management APR autopistas del oeste (*) 57.6% of voting right. Km 2 56 % holding 75.0% 48.6% (*) Concession end 2027 2018 Country Puerto Rico Argentina United Kingdom RMG Peterborough Gloucester Sawtry Alconbury Cirencester Swindon London Portugal Brisa Oporto Lisbon Milan Venice Genoa Rome Naples Italy Autostrade South Africa Bela-Bela Zeerust Pretoria Johannesburg direct management other holdings Johannesburg Other holdings Autostrade Brisa Elqui Ausol Coviandes RMG Km % holding Concession end 3,408 1,368 229 119 86 73 6.7% 10.0% 25,0% 31.6% 39.0% 25.0% 2038 2032 2022 2020 2020 2026 Country Italy Portugal Chile Argentina Colombia United Kingdom 32_33 abertis group business activities _ highways Investments in Italy were implemented using the equity method as existing agreements give shareholders there significant influence in management decisions. Holdings in Brisa were classified in accounting terms as a financial investment at market value. In 200, autopistas del oeste invested 7 million euros in the construction of a new lateral carriageway, the repaving of main carriageways, and improvements in safety barriers and toll collection areas. Financial and business results In general, business development in APR and autopistas del oeste has been very positive, with significant increases in traffic and revenues. Of note is the economic recovery in Argentina which began in 2003 and consolidated over the past few years and which has led to a 10.1% increase in AADT on the highways operated by autopistas del oeste reaching a total of 66,365 vehicles daily. This positive development in business activity added to the 13.83% increase in rates for light vehicles has meant a considerable increase in operating revenues. The principal figures on direct-management companies are as follows: IMD 2006 Var % 64,601 10% Cons. results IFRS (in millions of euros) 2006 Operating revenues EBITDA EBIT 46 29 22 Var % 14.6% 17.1% 21.5% Significant events In March 2006, the Argentinean government ratified the renegotiation agreement of the abertis concessionaries in Argentina, autopistas del oeste and Ausol. The agreement increases rates for light vehicles by 13.83% for autopistas del oeste and 15.01% for Ausol, whose rates had not changed since 1999 and 2002, respectively. During the concession contract renegotiation process with the granting authorities abertis and the Argentinean government signed a future protocol in June 2006, which will be conditional on re-establishing contractual balance of its concessions for access routes to Buenos Aires. Within this framework autopistas del oeste, which is controlled by abertis, will operate stretch IV of the western access highway. Furthermore, in November 2006, autopistas del oeste issued corporate bonds in the amount of 150 million Argentine pesos at a floating rate (349 basic points) and expiring in 2012. On the 23rd of April the Boards of Directors of abertis and Autostrade approved the initiation of an integration process through the merger of the two companies. The equation of exchange was established at 1 x 1 plus an exceptional dividend of 3.75 euros per share to be received by Autostrade shareholders. On the 30th of June 2006, Extraordinary Shareholders’ Meetings of the two companies approved the merger pending authorisation from the European competition authorities and approval by the Italian government. Finally, new legislation promoted by the Italian government unilaterally modified the regulatory framework of highway concessions in Italy, thereby changing the proposed transaction approved by shareholders. In December abertis and Autostrade therefore had to announce that it would be impossible to move forward with the merger in accordance with the terms and conditions stipulated in the terms sheet issued by both companies on the 23rd of April. 34_35 abertis group business activities _ telecommunications infrastructures telecommunications infrastructures Internationalisation, leadership and innovation abertis telecom fully met its objectives for 2006 –moving into international markets, leading the implementation and development of digital terrestrial television in Spain, and increasing the range of audiovisual services offered to its clients. This has led to a significant increase in revenues and has consolidated the leading role that abertis telecom plays in the development and achievement of i n t h e i n n o va t i v e p r o j e c t s telecommunications sector. An example of one of these innovative projects is the development of technologies that will advance the possibilities for mobile TV. ( R & D & I ) As announced at the end of the 2006 financial year, in 200 abertis telecom became the principal shareholder in the European satellite operator, Eutelsat with the acquisition of 32% of its capital –an important milestone for the future of the company. It represents the first step toward internationalisation for abertis telecom and makes a significant contribution to advancement in the management of complementary technology networks (terrestrial and satellite broadcasting of radio and television signals) both from an operational and commercial perspective. In 2006 abertis telecom defined a solid and unique business model, capable of offering the most complete package of audiovisual services to its clients and working closely with them in the development of advanced technology solutions, thereby consolidating a business organisation clearly orientated toward the client. Growth strategy abertis’ growth strategy in the telecommunications sector is clearly focused on internationalisation through the exploration and analysis of opportunities in television and radio signal broadcasting and mobile telephone coverage, mainly on the European market. The role of abertis telecom as a leading shareholder in Eutelsat has propelled the company to the status of one of the principal global operators of telecommunications infrastructures in Europe. 36_37 abertis group business activities _ telecommunications infrastructures abertis telecom has an analogue and digital network covering the entire country of Spain and which includes landmark sites such as the Torrespaña in Madrid and Torre de Collserola in Barcelona. abertis telecom also provides technical and operational assistance for fibre optic cabling. Financial and business results The telecommunications infrastructures business sector brought in the second highest amount of revenues with 373 million euros and EBITDA, 159 million euros, representing 11% and 7% of the abertis total respectively. The excellent development of this business sector, due to the launch of digital terrestrial television and the new analogue channels, has led to significant increases in revenues and EBITDA figures and resulted in a net profit of over 30 million euros. 30 million euros were invested in modernising, renovating, and replacing equipment and in improving the efficiency of existing sites in 2006. abertis telecom, is the parent company of the telecommunications business sector and solidifies the group’s shareholdings in this sector. Company % holding Nº sites abertis telecom retevisión tradia overon Torre de Collserola 100.0% 100.0% 100.0% 51.0% 41.8% – 2,524 693 – – abertis telecom focuses its activity on the audiovisual market. Its subsidiaries provide an extensive broadcasting and transport network which offer the following services: > Analogue and digital television and radio transmission > Signal transport > Transmission of events of interest > Telecommunication services for telephony operators > Operation and maintenance of networks > Mobile radio communications for public safety and emergencies Number of sites 2006 3,217 Var % 0.0% Cons. results IFRS (millions of euros) 2006 Operating revenues EBITDA EBIT 373 159 84 Var % 32.5% 60.1% 245.8% and which provides transmission services and mobile television links in Spain. abertis telecom holds a 51% interest in the company after the merger. At the end of the year, abertis telecom reached an agreement with the investment funds Nebozzo, CB Luxembourg III and GSCP 2000 Eurovision Holding to acquire 32% of shares in the European satellite operator Eutelsat Communications S.A., a company listed on the French stock market. The transaction was formalised at the beginning of 2007 after having received all the necessary permits from the competition authorities. Eutelsat is the third biggest satellite operator in the world with 30% of European market share and 13% of market share in the world. The company has a fleet of 23 satellites which provide coverage for 90% of the world population and serve 2,100 television channels and 970 radio broadcasters. The investment in this infrastructure operator implies an important step in the process of international expansion in the communications infrastructures sector while complementing abertis telecom’ already significant terrestrial signal transport network. Significant events abertis telecom consolidated the launch of digital terrestrial television (DTT) begun in November 2005. abertis telecom currently transports the signal of 20 digital channels from 147 centres in its broadcasting network (80% of the population), all of which are completely adapted to offer the latest audiovisual services in accordance with the national DTT technical plan and 85% coverage is forecasted by July 2007. In September 2006, Televisión Española (TVE) awarde abertis telecom the transport and broadcast contract for their analogue (2 channels) and digital (6 channels) signals until 2009. The company also signed an agreement with Retegal to cooperate in the use of the network in Galicia for TVE digital programming. 25 Spanish companies and organisations, among the abertis telecom, created Project Furia (future integrated audio-visual network) for the analysis of second generation DTT. The project consists of transmitting multimedia content to mobile terminals and developing the second generation of DTT standards. A budget of 9 million euros has been set aside for the project, which will be carried out over two and a half years. During the year, the company overon merged with Mediasat and Globecast overon (formerly Alella) is a company which is 100% owned by abertis telecom 38_39 abertis group business activities _ airports airports TBI integrates into abertis culture In 2006, abertis airports continued working on the process of integrating TBI into the culture of abertis. This incorporation has maximised synergies between different airports, optimised financial structures, actively worked to stimulate air traffic growth and increase market share, and propelled commercial activity. Growth strategy abertis’ growth strategy in the airport sector is focused on the exploration and analysis of investment opportunities in medium-sized international airports that operate "point to point" flights in areas with a high growth potential and with prospects for commercial development. There is a good possibility that there will be progressively more interesting development prospects as a consequence of the growing pace of privatisation promoted by governments and local authorities, both in the US and in Europe. 40_41 abertis group business activities _ airports abertis, through the British group TBI, either owns or holds the concession for eight international airports in Europe (the UK and Sweden), the US and Bolivia. One of the most noteworthy of these is London Luton, a main London airport and a major hub for air transport on a global level. abertis also totally or partially manages four airports for governmental or local authorities in the United States and Costa Rica. And, through Codad, abertis operates two runways at the Eldorado-Bogotá airport under concession. Airport London Luton Belfast International Cardiff International Stockholm Skavsta Orlando Sanford El Alto (La Paz) Viru Viru (Santa Cruz) Jorge Wilstermann (Cochabamba) Eldorado Atlanta Burbank Miami Internacional San José Country U. K. U. K. U. K. Sweden Florida (USA) Bolivia Bolivia Bolivia Colombia Atlanta (USA) Los Angeles (USA) Miami (USA) Costa Rica Control Concession Owned Owned Owned Concession Concession Concession Concession Concession Mngmnt. contract Mngmnt. contract Mngmnt. contract Mngmnt. contract Financial and business results The airport sector currently represents 8% of the group's revenues and 4% of EBITDA. Despite a higher degree of business activity, both in terms of the number of TBI passengers and Codad flights, the 2006 results show a decrease compared to the year before. This was basically due to the sale of non-essential assets in 2005. In comparable terms, revenues increased by 5.6%. Of note was growth by 4% in the number of passengers registered at TBI airports, up to 22.2 million users, with good performance at airports such as London Luton, Belfast, which exceeded 5 million passengers for the first time, and Cardiff, which exceeded 2 million passengers, also for the first time. 38 million euros were invested in improvements during the year including repaving the landing strip at London Luton and various improvements at both Belfast and Cardiff. Nº of passengers (thousands): London Luton Belfast International Cardiff International Orlando Sanford Stockholm Skavsta Bolivia 2006 9,435 5,021 2,000 1,642 1,757 2,351 Total nº of passengers (thous.) TBI 22,207 Var % Cons. results IFRS (millions of euros) 2006 Operating revenues EBITDA EBIT 282 92 22 3.1% 4.1% 12.9% -0.2% 1.0% 5.1% 3.9% Var % 0,0% -6.3% -34.3% Nº of flights CODAD 108,414 9.9% 42_43 abertis group business activities _ airports Burbank Atlanta Orlando Sanford Miami San José Eldorado El Alto (La Paz) Jorge Wilstermann (Cochabamba) Viru Viru (Santa Cruz) USA Costa Rica Colombia Bolivia concession or owned management contract Sweden United Kingdom Belfast International London Luton Cardiff International Stockholm Skavsta Significant events TBI continued expansion and improvement works at the London Luton and Cardiff airports in 2006. A 64 million euro investment was made, mainly for paving the runway in Luton and improvements to terminals at Luton and Cardiff. The Master Plan 2030 was drafted during 2005 and 2006 and entails the response of every airport in the United Kingdom to the guidelines published i “The future of air transport in the United Kingdom” the white paper issued by the British government. The Cardiff and Belfast airports have already been approved and the Luton airport is in the process of seeking approval from local authorities. In March abertis airports became shareholders in Concesiones Aeroportuarias, the concessionary of the future airport of Castellón, through the subscription of 575 thousand euros, equivalent to 5% of the company’s capital. The company is the concessionary responsible for the construction and operation of the new airport in Castellón until 2053. The airport is currently under construction. 44_45 abertis group business activities _ car parks car parks International expansion, technological innovation and exceptional quality saba is the indisputable company of reference for the entire European sector. In 2006, the company developed and improved technological solutions for dynamic signing, guided vehicle services, Teletac electronic payment systems, and GPRS. saba was also granted the ISO 9001 quality certification and the OHSAS 18001 workplace risk prevention certification. And, in its main car parks, saba completed all planned improvements related to environmental aspects, accessibility and payment systems in 2006. The car park sector continued its expansion in 2006, especially in Italy with the acquisition of car park company Italparcheggi. The company holds the concession for more than 2,700 spaces in the provinces of Calabria and Luguria. This was a very important event in the development of saba as it demonstrates the company’s decided commitment to Italy, a country which generates 19.4% of revenues, and to the permanent challenge of consolidating and opening up new markets. saba continued growing in Spain as well (Navarra, Catalonia, and the Community of Valencia) with new contracts to which saba clearly brought the differentiating features of its brand: technological innovation, high-quality services and exceptional sites in city centres. Growth strategy abertis’ growth strategy in the car park sector turns on the exploration and analysis of new opportunities arising in the countries in which it already operates –Spain, Italy, Portugal, Chile– as well as in other markets that will provide an added push toward the internationalisation of the business, mainly in Europe and North America. saba will continue working closely with the authorities in charge of improving and expanding car park networks for their citizens, with the aim of decongesting city centres, improving mobility, and providing solutions for more fluid movement of traffic. 46_47 abertis group business activities _ car parks Through saba, abertis is one of the main European operators of car parks, managing 87,127 spaces in a total of 161 operational facilities throughout 70 cities in Spain, Italy, Portugal, Chile, Morocco, and Andorra. Country % holding Nº of spaces Nº of cities present Chile Spain Portugal Italy Chile Andorra Morocco 99.3% (*) 100% 100% 100% 60% 51% 45,116 16,328 18,355 3,804 295 3,229 87,127 43 6 16 3 1 1 70 (*) abertis holds 99.3% of saba car parks, which holds the shares in the other companies. Financial and business results The car park sector represents 4% of abertis’ operating revenues and reached 120 million euros in 2006, 8% more than the previous year. The consolidated contribution to EBITDA was 48 million euros, representing 2% of the abertis total and a 15% increase over the previous year. 48.7 million vehicles visited a car park managed by saba in 2006, 3.2% more than the previous year. There were 29,421 paid passes issued in 2006, a figure which represents an increase of 9.8% over 2005. The increase in the number of spaces, and in general in all indicators of business activity, has primarily been due to the national and international expansion effort undertaken in the last few years, centred on the Italian and Chilean markets (where saba has been operating since 2004). And, with 3,937 new spaces, Italy was responsible for 80% of growth in the year. Valparaíso Santiago Concepción These new incorporations, along with the maturation of more recently opened facilities and a good general pace of business have led to a significant rise in the figures on saba’s balance sheet. saba invested 12 million euros in operations in 2006, mostly in environmental and safety related improvements and in adaptations of facilities for people with limited mobility. Nº of car parks Nº of spaces Vehicle turnover (in millions) Nº paid passes 2006 Var % 161 87.127 48,7 29.421 4,5% 4,3% 3,2% 9,8% Cons. results IFRS (million €) 2006 Var % Operating revenues EBITDA EBIT 120 48 33 7,6% 14,5% 23,5% Spain Portugal Madrid Lisbon Seville Rabat Milan Venice Andorra Barcelona Rome Sassari Brindisi Morocco Italy Significant events On a national level, in 2006 saba was awarded a 50-year concession for its first car park in Pamplona, which consists of a total of 947 spaces. A new company called Saba Aparcamientos de Levante, of which saba holds 50%, was also set up to develop the car park business in Alicante and Murcia. In 2007, contracts were awarded for three car parks in Vilafranca del Penedès which include the management of two car park centres comprised of 786 spaces, a regulated surface parking area with a capacity for 585 vehicles, the expansion of another car park, and the provision of new technology for already existing infrastructure. The contracts were awarded for a period of 39.5 years for the car park centres and 15 years for the regulated surface parking area. saba’s presence in Italy was consolidated during the year with the 100% acquisition of the company Italparcheggi, a car park subsidiary and holder of the concession for more than 2,700 spaces in the cities of Consenza (Calabria) and Sanremo (Liguria), and with the grand opening of a new car park in Cerdeña (Sassari) which has 1,380 spaces. 48_49 abertis group business activities _logistics services logistics services Consolidation of a model 2006 proved an important year in the ongoing development of abertis logística. The company consolidated its business activities in platforms already in operation such as Sevisur in Seville and Parc Logístic in Barcelona, and began operating the new Arasur platform in Alava. It also took a decisive step forward in its internationalisation strategy thanks to an agreement with the Portuguese government for the development of the Northern Lisbon logistics park and the promotion of a new logistics park in Santiago de Chile in 2007. abertis logística also established its growth project and model, laying the foundations for solidifying its position as the top private investor in logistics services infrastructure on the Iberian peninsula. abertis logistics has structured the company into new functional areas and has defined a management model that optimises all its resources and makes the most of technical and commercial synergies between its platforms. Growth strategy Signing the agreement with the Portuguese government for the development of the Northern Lisbon logistics park was an extremely important event for abertis’ growth strategy in this sector. abertis logística hopes to complete the Barcelona, Valencia, Madrid, Lisbon corridor in order to offer its clients infrastructure of the highest quality at all of the transfer hubs in the corridor, which constitute the main centres of consumption on the Iberian Peninsula. This future project includes consolidating the management of existing logistics parks in Spain (Barcelona, Alava, Sevilla, and CIM Vallès) and exploring new select investment opportunities on the international market, mostly in Europe. 50_51 abertis group business activities _logistics services abertis logística is a subsidiary of abertis which channels its investments in the promotion and development of logistics spaces, equipment areas and services for logistics operators. Its business activities are focused at strategic points for the transport of merchandise, near land infrastructure networks as well as sea and air access points. Company City % holding Total Surface area (m2) Current status abertis Logística / CIM Vallès Barcelona 100.0% 70,000 Operational Sevisur Seville 60.0% 250,000 Parc Logístic Zona Franca Barcelona Arasur Cilsa Alava Barcelona 50.0% 43.8% 32.0% 409,000 1,900,000 2,270,000 Operational Under construction Operational Under construction Operational Under construction Operational Under construction Financial and business results The logistics services business unit contributed operating revenues of 20 million euros and EBITDA of 6 million euros to abertis, figures which represent 1% and 0.3% of the group's totals. The positive performance of all the businesses in this sector led to an increase in revenues of 12% over last year and an increase in EBITDA of 7%. The full occupation of the Zona Franca logistics park and Zal Barcelona and the completion of the marketing project for Sevisur’s completed facilities are two noteworthy examples of the year’s successes. As this is a sector that is being developed and which has projects that are still in the construction phase, the main investments made in this sector in 2006 were for expansion projects, for a total of 25 million euros. Cons. results IFRS (millions of euros) 2006 Var % Operating revenues EBITDA EBIT 20 11,6% 6 3 6,9% 18,7% Alava Barcelona Cim Vallès PLZF CILSA Lisbon Seville Significant events 2006 was the year of internationalisation for this sector. abertis reached an agreement with the Portuguese government for the construction and operation of a 100-hectare multi-modal logistics platform (expandable by approximately 50 hectares) in the north of Lisbon. The project will assume a total estimated investment of 370 million euros. This agreement, the first project developed outside of Spain for this sector, represents its first step towards internationalisation. In 2007 abertis logística has given a new push to its process of international expansion with the announcement of its acquisition of a 63.3 hectare plot on which a logistics park will be developed in the Santiago de Chile metropolitan area. The new infrastructure has an excellent strategic location and the project is expected to be operational at the beginning of 2009 when marketing of its first warehouses will commence. The total estimated investment amounts to 186 million euros and will be made progressively over the next ten years. On the national scene, this year saw the grand opening of the first warehouses at Arasur (multi- modal transport platform in Alava) with a total surface area of 70,000 square metres. The forecasted plan will be concluded within nine years and will consist of an area of two million square metres. Arasur also reached agreements for the use of 10,900 square metres of industrial warehouse space. 3 corporate social responsibility page 54 The abertis CSR Strategic Plan page 60 Summary of indicators 2006 54_55 corporate social responsibility abertis’ development model is built on solid values of credibility, efficiency, dialogue, collaboration, trust in our employees, customer service, pro- activity and responsibility. Development based on ethical behaviour and sustainability is a critical component to abertis’ way of doing business responsibly and is the cornerstone of our social responsibility policy. The group’s Corporate Social Responsibility report for 2006, which has been audited for the second consecutive year by an independent expert, explains in detail all the advances and activities in this area. the abertis CSR strategic plan In 2003, abertis developed a Corporate Social Responsibility (CSR) Strategic Plan which consists of different commitments to all the company’s different stakeholders. The plan is structured to include 8 strategic areas, 48 specific actions and more than 200 monitoring and control indicators. The most important aspects of abertis’ CSR policy are outlined in a series of commitments to stakeholders, which are envisaged along broad strategic lines that encompass specific actions for each group. 1. Minimising environmental impact 2. Ensuring transparency for the investing One of the main priorities of the abertis’ CSR programme is to minimise the environmental impact of the group through implementing environmental management systems, training and sensitising employees and society (promoting measures to encourage good environmental practices in the organisation and fomenting a culture of protection and preservation of the environment) and developing eco-efficiency programmes. The preservation of biodiversity also accounts for a considerable scope of action with measures such as inventorying natural spaces adjacent to infrastructure or introducing indigenous species into those spaces. It involves other activities as well such as carrying out the maintenance tasks laid out in the Biodiversity Action Plan (BAP) and encouraging initiatives to minimise the impact of direct emissions stemming from company activities or indirect emissions from users of our facilities as part of our climate change strategy. community abertis’ commitment to transparency for the investing community translates into excellent business results with a non-speculative long- term vision and broad channels of dialogue with shareholders and investors. The presence of abertis in stock market sustainability indexes (Dow Jones Sustainability, European and World) attests to our experience as a responsible company capable of creating value for shareholders and other stakeholders alike. 3. Ensuring staff motivation and involvement for the continued improvement of the company abertis’ commitment to its employees (in a context of continuous expansion through new acquisitions) is centred on developing integration policies, promoting and retaining talent, strengthening internal communication and performance evaluation management systems, establishing work/life balance policies, and the promotion of equality, diversity and ethical commitment —a critical commitment for creating and maintaining a proactive approach to safety and occupational health. 56_57 corporate social responsibility 4. Maintaining a close relationship with 5. Extending the CSR commitment to suppliers and subcontracted companies abertis commitment to Corporate Social Responsibility also extends to our suppliers. This group of stakeholders is included in the company’s code of conduct (based on the principles of equality, honesty and mutual respect, as well as quality, cost, and payment criteria) which includes social and environmental clauses for their selection. clients and guaranteeing their satisfaction abertis’ commitment to our clients is evident in our constant processes of innovation and improvement to our products and services as well as in our approach to quality as a tool to continuous advancement to heighten company performance and customer satisfaction. abertis works tirelessly to improve safety and to open up as much as possible the channels of communication with users of our facilities (24- hour service, e-mail and regular post, informative leaflets, specific links on our web-site, etc.). The abertis foundation The Foundation is one of the indicators of abertis’ commitment to social responsibility. It is a central element of dialogue with the community through its projects and patronage. The Foundation’s goal is to study the environmental, demographic and economic repercussions of infrastructure in the area in conjunction with leading academic institutions. It also manages an extensive road safety programme. The Foundation’s main activities in 2006 were: • Research: Air quality around motorways, The rural world in the 21st century, A Comparative analysis of public use management of natural parks, Efficiency in water use in motorway service areas, Sustainable development of Mediterranean woodlands, Habitual mobility and living spaces in Spain, The emergence of regional airports in Spain. • Road safety programme: > Research: Road accident response management, A model for travel time estimation > School programme: 30,805 primary-school pupils, 875 conferences, 297 schools, 120 towns and cities in three autonomous communities. Joined the European Road Safety Charter. Introduced the programme in the European Union. > Conferences: Road systems anthropology (law, offences and penalties), courses for road safety auditors, five conferences on responsible mobility. • Web-site redesign: Double A degree of accessibility in accordance with European WAI norms. IQUA recognition of quality. programmes, improved social integration, cultural access (recovery and financing of goods and collaborating with institutions, museums and cultural organisations), and measures to protect the environment. The abertis foundation accounts for more than a third of this investment, and along with the abertis Chairs makes up one of the primary development instruments of the Social Responsibility Policy. 6. Getting involved in the community and promoting social well-being Interaction and dialogue with the community has become one of the cornerstones of abertis’ CSR policy through collaboration with local associations and collectives (professional organisations, universities, academic institutions, NGO’s, associations and the media), and nearly 2% of total revenues is contributed to these organisations. abertis further commits to social well-being structured around four primary priorities: the development of mobility and road safety abertis Chairs abertis has established solid links with the academic world with the conviction that the generation and diffusion of knowledge helps create value and permanently and responsibly contributes to the progress of society as a whole. • The abertis Chair in the Management of Transport Infrastructure, created by abertis in collaboration with the Polytechnic University of Catalonia, carries out training and research activities in the field of transport infrastructure management. In addition to organising courses and seminars intended for professionals in the sector and publishing specialised publications, every year the chair holds a competition for the abertis Award for Research in the Management of Transport Infrastructure, open to all students enrolled in approved under-graduate or graduate studies at Spanish universities. • Created within the framework of the IESE, the objectives of the abertis Chair in Regulation, Competition and Public Policy are to undertake study, do research, generate ideas, and proliferate knowledge in this field. This will result in the improved application of existing instruments and the development of new ones to increase the general well-being of the community and provide a better service to society. • abertis is also one of the promoters of the Chair in Leadership and Democratic Governance which, organised by ESADE, pursues the analysis of the characteristics of leadership in today’s society, as well as studies of the conditions that must be promoted in order to generate executives and leaders with the vision and capacity to move toward improved socio-economic progress and welfare. 58_59 corporate social responsibility 7. Promoting and systematising channels of dialogue On of the strategic priorities of abertis is to establish an open, transparent dialogue with its stakeholders in order to find out their expectations and incorporate them in our reflection and decision-making processes. This year the dialogue came about through a process of consulting with different stakeholders to find out their expectations for and perceptions of company performance in the scope of the CSR Strategic Plan. These consultations also allowed us to integrate the suggestions for improvement that were received with reference to the 2005 CSR report. Another important reason for maintaining an open process of dialogue and communication is that it allows abertis to strengthen links of cooperation and to reach solutions by means of consensus. 8. Ensuring monitoring and control of the implementation of the Corporate Social Responsibility Strategic Plan abertis’ commitment to the CSR Strategic Plan involves a continuous process of measuring results and proposing new mechanisms for promotion and internal coordination. Furthermore, high priority is given to revising objectives and updating commitments and planned activities in keeping with the expectations of our stakeholders. With this in mind, the results achieved up to now have been revised and an expanded CSR Strategic Plan is in the works which will include new actions and which will have a new duration of three years. The positive results achieved in 2006 have encouraged abertis to continue toward our goals of fomenting open dialogue with our stakeholders and reducing the environmental impact of our business activity. abertis is also committed to integrating the personnel of the group’s new companies into the abertis culture; providing innovative, maximum-quality products and services to our clients; extending the CSR commitment to suppliers and subcontracted companies; and strengthening community involvement in accordance with the commitment laid out in the Corporate Social Responsibility Strategic Plan. 60_61 corporate social responsibility summary of indicators 2006 Environment Companies representing 72% of turnover have an environmental management system in place. 45 % % of energy consumption comes from fuel with a lower environmental impact (natural gas). Investing community 13% increase in market capitalisation. 46 % increase in abertis equity. Human Resources 3.5% increase in women in management and supervisory positions. 21,3% increase in worker training investments. Clients Companies representing 68 % of turnover certified with ISO 9001. Client satisfaction rate over 70 % Suppliers 67% of calls for tender included environmental and social clauses. 388 suppliers were evaluated with social and environmental criteria. Community 1.7 % of abertis consolidated revenues in community contributions. Scope of the road safety programme: 30,000 pupils at 300 schools. Dialogue More than 60 external dialogue processes with economic, social and environmental organisations. 56,5 % increase in the number of media requests attended to. Monitoring More than 200 indicators measured. 48 lines of action developed. 96.5 % of waste is recovered. 9% increase in the use of Telepeaje (electronic toll payment system). 100% response to opinions and requests from the investing community. 7 informative meetings held by the Próximo Programme all over Spain. An average of 10.15 hours of training per worker. 0 fatal accidents. 100 % of client consultations attended to. Companies representing 86,35% of turnover carry out customer satisfaction surveys. More than 500 assessments of the open dialogue process with stakeholders on aspects related to CSR. 4 financial and economic information page 64 Consolidated figures page 70 Financial management page 72 Shareholders and the stock market 64_65 financial and economic information _ consolidated figures consolidated figures Results The acquisition of sanef in 2006 had a significant impact on income statement figures, making comparison with 2005 difficult: (in millions of euros) Operating revenues Operating expenses EBITDA Amortization and depreciation Impairment of assets Operating results Financial result Equity method company results Before-tax results Corporate income tax Yearly results Minority Interest Profit due to shareholders Consolidated 2006 3,335 (1,236) 2,099 (755) 0 1,343 (461) 47 930 (355) 575 (45) 530 2005 1,906 (702) 1,204 (371) 0 833 (159) 65 739 (224) 515 (4) 511 VAR 75% 76% 74% 61% 26% 12% 3.7% Results The profit results for abertis in 2006 were 530 million euros, an increase of 3.7% over the previous year. Comparing 2005 to 2006, the impact of the following non-recurring factors must be considered: > The profits for 2005 include a non-recurring gain of 22 million euros due to capital gains from the sale by Schemaventotto (of which abertis owns 13.3%) of 2% of Autostrade (reducing Schemaventotto’s ownership from 52.1% to 50.1% and leaving abertis with an indirect interest of 6.7%). > In 2005, 10 million euros net was received in compensation for the rate freeze in 2000 on state toll highway concessions. > In 2005 a net capital gain of 10 million euros was obtained from the sale of shares in Concesiones de Madrid and Autopista Central Gallega. > The 2006 results include a negative impact of 42 million euros for the reduction approved in November 2006 of deferred tax assets derived from the Spanish Corporate Tax, which will drop from the current 35% to 32.5% in 2007 and to 30% in 2008. If we exclude the impact of these non-recurring or extraordinary events, the consolidated profits for the year due to shareholders have increased by 22% on a comparative basis. Results (in millions of euros) Operating Revenues EBITDA EBIT Profit due to shareholders S28 Capital Gains/ Autostrade Compensation for rate freezes in 2000 Sale of Concema and A.C. Gallega shares Reduction in Corporate Tax Comparable Shareholder Profit This increase of 22% was made possible by the incorporation of sanef and by positive developments m a d e p ri m a ri ly i n t h e h i g h way s a n d telecommunications sectors. 2006 3,335 2,099 1,343 530 +42 572 2005 1,906 1,204 833 511 -22 -10 -10 469 Var % 75% 74% 61% 3.7% 22.0% +75% 5 3 3 3 , 6 0 9 1 , +74% 9 9 0 2 , 4 0 2 1 , +61% 3 4 3 1 , 3 3 8 +3,7% 1 1 5 0 3 5 +22% 2 7 5 9 6 4 2005 2006 Operating Revenues EBITDA EBIT Profit due to shareholders Comparable Shareholder Profit 66_67 financial and economic information _ consolidated figures Revenues Operating revenues increased by 75% over the 2005 figure, reaching 3,335 million euros. The acquisition of sanef in 2006 (with revenues of 1,241 million euros) is responsible for a large part of the increase. On the other hand, 2005 operating revenues include payment for the rate freeze in 2000, and capital gains from the sale of Concesiones de Madrid and Autopista Central Gallega. Without considering the events indicated in either year, revenues increased by 11% when compared to 2005. This increase is mostly due to very healthy activity in the highways sector (with an increase of 5.2% in Spanish national highways, +1.2 for sanef, and +10.1% Autopistas del oeste) and in the telecommunications sector due to the introduction of DTT (Digital Terrestrial TV), and the propagation of new channels. The incorporation of sanef has changed the relative weight of the revenues of the different business units and has increased revenues generated outside Spain. Operating Revenues (in millions of euros) 2006 2005 Highways Telecommunications Airports Car Parks Logistic services Corporate and other services Total 2,537 369 282 118 19 10 76% 11% 8% 4% 1% 0% 1,209 281 282 111 17 5 63% 15% 15% 6% 1% 0% 3,335 100% 1,906 100% Operating Revenues (in millions of euros) 2006 2005 Spain France Great Britain Rest of the World Total 1,739 1,241 204 150 52% 37% 6% 5% 1,561 0 205 140 82% 0% 11% 7% 3,335 100% 1,906 100% Gross Operating Income (EBITDA) Operating expenses are concentrated in personnel and maintenance of infrastructure and have increased by 75%. This is primarily due to the incorporation of sanef which, in addition to other consequences, caused the average workforce to grow from 7,831 to 10,763 in 2006. Discounting the impact of sanef, expenses rose by 10%. EBITDA was 2,099 million euros, an increase of 74% over 2005. The EBITDA margin was 6.3%, in line with 2005. The consolidation of lower margins on the French highways was compensated by improved performance in telecommunications. Ebitda (in millions of euros) Highways Telecommunications Airports Car Parks Logistic services Corporate and other services Total 2006 2005 1,827 154 92 47 6 -28 87% 7% 4% 2% 0% -1% 971 99 98 42 6 -11 81% 8% 8% 3% 0% -1% 2,099 100% 1,204 100% Ebitda (in millions of euros) 2006 2005 Spain France Great Britain Rest of the World Total Amortisation and Impairment of Assets Allocations for amortisation increased 103%. Not taking the impact of sanef into consideration, the increase from 2005 is 1%. Total amortisation includes the impact of amortisation of assets that have appreciated as a consequence of the “allocation of acquisition price”. The value of assets and liabilities has appreciated to a net 1,743 million euros based on their fair value, and the difference between the purchase price and the fair value has been allocated to goodwill. Goodwill , under IFRS, is not amortised systematically, it is reduced on the basis of impairment testing. This test has been completed, and no adjustments were required on the existing goodwill in the abertis group. Financial result The negative financial result has risen due to the impact of the acquisition of sanef , which includes the financing and the financial load from the 1,195 779 58 66 57% 37% 3% 3% 1,077 0 62 65 89% 0% 5% 5% 2,099 100% 1,204 100% acquisition plus the financial load of HIT, and costs to abertis associated with the purchase. The financial load of sanef has had a positive impact due to reduced expense from the inclusion of its debts at fair value in the application of the “allocation of acquisition price”. Equity Method Companies The contribution of companies consolidated by the equity method decreased due to Autostrade's non- recurring 22 million gain from the sale of 2.05% of Autostrade by Schemaventotto (13.3% of which is held by abertis). Corporate Tax In 2006 there was a negative impact of 42 million euros due to the reduction in deferred asset tax derived from the Spanish Corporate Tax of November 2006 (on the other hand, this will have a positive effect in the future due to a reduced tax burden). 68_69 financial and economic information _ consolidated figures This adjustment has primarily affected Spanish highway concessionary companies (from the reduction in deferred tax assets as a consequence of adapting the IFRS to their finances under the sectorial accounting plan of the Spanish highways), and telecommunications (from the reduction of tax credit for negative profit bases). Cash flow In 2006, abertis generated a net cash flow (before investments and dividends) of 1,221 million euros, an increase of 48% over 2005, thanks to the incorporation of sanef and the positive impact of increased activity. (in millions of euros) 2006 2005 VAR Net Cash-flow 1,221 822 48% Balance sheet (millions of euros) ASSETS Non-current assets Fixed assets Goodwill and other intangibles Holdings in associated companies Other non-current assets (millions of euros) Consolidated LIABILITIES 2006 2005 7,969 4,597 1,790 660 922 7,969 4,597 1,790 660 922 Equity Capital Reserves Earnings Minority interest Non-current liabilities Debt Other non-current liabilities Current assets 946 478 Current liabilities Debt Other current liabilities Consolidated 2006 2005 4,447 1,756 1,167 530 994 12,775 11,104 1,671 1,996 1,089 907 3,036 1,572 877 511 76 3,836 3,227 609 1,575 1,029 546 Total assets 19,217 8,447 Total liabilities 19,217 8,447 50 %_ Fixed assets 63 %_ Debt 35 %_ Goodwill and other intangibles ASSETS LIABILITIES 23 %_ Equity 15 %_ Other assets 14 %_ Other liabilities Variations in the balance sheet figures reflect the impact of the acquisition of sanef and the expansion of existing businesses. Total assets reached 19,217 million euros, representing an increase of 10,770 million euros over December 2005. The increase in fixed assets is principally due to the net investment in highways throug sanef and the year's investments. Intangibles also increased significantly due to the allocation of the difference between the price paid for sanef and its theoretical value in accounting terms, as well as the goodwill generated as a counterpart to deferred tax, which enter under appreciation of assets as “allocation of acquisition price". Net equity has increased by 1,411 million euros, reaching 4,447 million euros mostly due to the incorporation of external HIT members. On the liabilities side, of note is the net debt of 7,625 million euros incurred throug abertis’ direct investment in HIT, the incorporation of the total debt of sanef, and the increase in the sanef debt up to its fair value calculated by the “allocation of acquisition price”. Investments The group invested 3,590 million euros in 2006. 3,331 million, or 93%, went toward expansion projects and the remaining 259 million euros were operational investments. The most noteworthy investment of 2006 was the acquisition of the French highway concessionary sanef for 3,064 million euros. This amount represents abertis’ share (57.55% as of December 2006) of the 5,324 million euros invested by HIT in the 100% acquisition of sanef. Of the remaining investments in highway expansion, those in castellana are of particular interest. These amounted to a total of 74 million euros for constructing a third tunnel and widening the lanes of the AP-6. A further 16 million euros was invested through iberpistas in the Guadarrama relief road, 6 million euros went toward increases in capital in the Madrid radial highways (R2, R3, and R5) and 9 million euros toward the purchase of an additional 4% of Alazor. Investment in expansion in the remaining sectors were for the development of DTT in the telecommunications sector, increasing the capacity of the London Luton and Cardiff airports in the airports sector, the awarding of a car park in Pamplona and new car parks in Italy in the car parks sector, the construction of a new building and new warehouses in the Zona Franca logistics park, the beginning of phase II at Sevisur, and increases in capital at Arasur in the logistics services sector. The most significant operational investments were made in the highways and airports sectors. The most notable investments made in the highways sector were in sanef where 101 million euros went toward the renovation and modernisation of the existing network in new surfaces and junctions, in acesa for toll lane facilities and safety barriers and in aumar for carriage ways. Operational investments in airports were mostly for improvements made to the London Luton airport, where a landing strip was repaved, and to the Belfast and Cardiff airports. Investments (millions of euros) Operational % 68% 11% 15% 5% 1% Growth 3,195 40 26 45 25 % 96% 1% 1% 1% 1% 177 29 38 12 2 259 100% 3,331 100% Highways Telecom Airports Car parks Logistics Total 70_71 financial and economic information _ financial management financial management abertis showed strong growth in 2006 in both its financial and its economic outcomes. The group’s debt amounted to 11,836 million euros compared to 4,211 million euros in 2005. The acquisition of sanef was the main investment made in 2006 and resulted in an increase in net debt of 7,625 million euros. Net debt Net debt / EBITDA Debt / Equity Interest cover (free cash flow + interest) / Net Interest Financial structure / Financing policy The incorporation of sanef into the financial structure of the group has resulted in a change in the distribution of debt. The balance between long- term sources of financing has been redistributed to capital markets 31%, Caisse Nationale des Autoroutes 36%, and financial institutions 27%. In line with the policy on treasury management and hedging risks, the acquisition of sanef was financed equally between capital markets and financial institutions. The HIT consortium, which took control of the concessionary in April, refinanced 1,150 million euros through a 7-year syndicated loan at a floating rate converted to a fixed rate through interest rate hedging. The remaining 1,500 million euros were raised through a 15-year fixed 2006 2005 11,836 4,211 5.6 2.7 2.8 3.5 1.4 4.9 rate bond issue through the consortium’s affiliate HIT Finance BV. The terms of these refinancing facilities allow for an average maturity for outstanding debt of 7.32 years. In 2006 the second promissory note issuance programme was registered in the CNMV with a maximum outstanding balance of 500 million euros and validity of one year. The note programmes have afforded flexible short-term financing at a lower cost than the banking market can provide. The total volume issued over last year reached 710 million euros, with an outstanding balance at the end of the year of 323 million euros. Financing instruments 31 %_ Bonds 36 %_ CNA 20 %_ Syndicated loans 7 %_ 3 %_ 3 %_ Long-term loans Short-term loans Commercial notes 51 %_ Bonds 9 %_ Syndicated loans 2006 19 %_ Long-term loans 2005 14 %_ Short-term loans 7 %_ Commercial notes Hedging of financial risks Liquidity risks The group’s activities entail several different types of risk including exchange rate risks, credit risks, liquidity risks, interest rate risks and cash flow risks. The management programme for the group’s overall risk considers the uncertainty of the financial markets and attempts to minimise any potential adverse affects to the group's financial results using derivatives to hedge both exchange rate and interest rate risks. Exchange rate risks Variations in exchange rates modify the fair value of transactions carried out in certain currencies, especially those involving pound sterling, the US dollar, Argentine peso, and Chilean peso resulting from the group's international investments (in the United Kingdom, United States and South America). In order to neutralise possible variations in exchange rates, abertis obtains financing in these currencies either directly or by means of derivatives. Credit risks Transactions are carried out with verified solvent financial institutions to avoid any significant concentration of credit risk for the group. The group has a prudent policy of protection against liquidity risk through verified unused credit facilities in the amount of 1,200 million euros. Interest rate risks abertis uses interest rate derivatives to hedge the risk of variations in financial payments. These derivatives are generally designated as hedging instruments for accounting purposes. Credit rating abertis has an A rating (investment grade-high credit quality) for long-term debt granted in March 2006 and ratified in December 2006 and awarded by the international credit agency Standard & Poor's. abertis also has an A rating (investment grade- high quality) for long-term debt, assigned in March 2006 and ratified in January 2007, and an F1 rating (highest credit quality) for short-term debt, ratified at the same time. Both ratings were awarded by the international credit agency Fitch Ratings. Maturity of debt Type of debt 42 %_ From 5 to 10 years 26 %_ More than 10 years 9 %_ Less than 1 year 13 %_ 10 %_ From 1 to 3 years From 3 to 5 years 84 %_ Fixed 16 %_ Floating 72_73 financial and economic information _ shareholders and the stock market shareholders and the stock market The turning point came at the close of the month of June, when the Federal Reserve Bank applied its latest raise, suggesting its expectations for a slow- down in growth and price increases. Petroleum started to wane, inflation figures began to correct themselves and the cycle of interest rate rises was expected to end, all of which helped the markets. It was then that the Spanish stock market began an almost vertical ascent. The Ibex35, the principal indicator of the Spanish stock market, closed 2006 with an increase of 32%, the highest increase in four consecutive years of gains (18%, 17%, and 28% in 2005, 2004, and 2003 respectively). This went with historic records in profitability, capitalisation, liquidity and transactions. The Spanish stock market performed better than other world markets due to several factors among which were the notable corporate activities of Spanish companies on both a national and international level, and the Spanish economy’s more exceptional performance compared to those of the Eurozone. Stock market performance 2006 At the end of 2006, an assessment of stock market performance during the year could be nothing but very positive, and in the case of the Spanish stock market, extraordinary. The first part of the year was marked by the same positive line that was seen at the end of the previous year, which then dropped dramatically due to expectations of inflation, increases in petroleum prices and rising interest rates leading to stock market volatility. The initial optimism was driven by enormous levels of liquidity, by high activity in mergers and acquisitions and by the strength of corporate profits. During this period, petroleum and raw materials prices continued to rise. This was the beginning of a series of worries about inflation, interest rates and the real estate market, and about the impact these three factors might have on the global economy, which culminated in a period of volatility between May and June. But during the second half of the year, with good performance in world economies and good business results combined with the strong correction of the prices of crude and the controlled environment of interest rates, a very favourable stage was set for equities. 74_75 financial and economic information _ shareholders and the stock market abertis on the securities market the European Commission’s decisions on merger processes in September. In mid-November, these setbacks resulted in uncertainty about the merger which weighed on share performance. The uncertainty ended on the 13th of December when the merger’s suspension was announced. The next day shares reach their highest close of the year at 23.10 euros. In the month of December, after the purchase of 32% of Eutelsat had been announced and the air had been cleared about the merger, shares increased by 5.8%, the second best month of the year after September when share prices, with the backing of the European Commission on the merger, increased by 8.7%. Share performance For the seventh year in a row, abertis closed the year in the black with an increase of 11.11%, adjusted for bonus share issues. In share performance a clear difference can be seen between the first and second halves of the year, in keeping with the market trends described above. In the first quarter, shares oscillated within a narrow horizontal band. Activity started brewing after the announcement of the merger with the Italian company autostrade last 23rd of April and, affected by the general market trend in the months of May and June, shares reached the low of the year on the 13th of June at 17.55 euros. After hitting this trough, shares recovered in the second half of the year in line with the performance of the main stock market indices and backed by Ordinary class A abertis shares - 2006 Close (euros) 24 23 22 21 20 19 18 17 16 23/04 Announcement of merger between abertis and Autostrade 01/03 Results 2005 03/05 Ordinary GSM 30/10 Payment of 2006 interim dividend 05/12 Acquisition 32% Eutelsat 29/09 Italian Council of Ministers approves legislation for the regulation of toll highways 11/05 Results 1T2006 19/05 Begin bonus share issue 30/06 Ext. GSM merger approved 27/07 Results 1S2006 24/03 Takeover finalised 24% sanef. Final holding: 96% 17/05 Payment of add. dividend 2005 07/11 Results 3T2006 22/09 EC approves abertis and Autostrade merger project 13/12 Suspension of merger announced 03/02 Formalisation of purchase of 75% of sanef 28/04 Acquisition 100% sanef 04/08 ANAS and the Italian Ministry of Infrastructure reject merger January February March April May June July August September October November December Unadjusted price Adjusted price Note on the price adjustment due to bonus share issue: The allocation of new shares does not affect the equity of the company, even though it is divided into a larger number of shares. All shareholders who invested before the issue receive shares without any additional outlay. The investment in their portfolios therefore does not change even though they own a larger number of shares. Consequently, historic prices prior to the issue have to be adjusted in order to compare pre-issue and post-issue prices. The 11.11% increase in shares in 2006 is added to shares registered over the past six years, amounting to an accrued increase of 228% over the past seven years. abertis market appreciation 2006 2005 2004 2003 2002 1.3 % 2001 2000 1.3 % 11.1 % 16.6 % 26.2 % 37.8 % 41.9 % Accrued variation +228 % This increase in value has meant that abertis closed 2006 as the top ranking highway company for equity market capitalisation, with capitalisation of 13,630 million euros, 12,847 million of which were in class A shares and 783 million in class B shares. Turning to the market evolution of preferred class B shares, they have retained low liquidity and scant trading frequency since their initial listing on the 29th of July 2002. This might be explained by the fact that these shares grant the right to a potential preferred dividend based on the holding period and ordinary class A share price, which detracts from the incentive to trade them on the market. Due to this infrequent trading since January 2004, the 37,036,366 class B shares have been traded using a price fixing model in which the price is set at two daily auctions. Comparison of the evolution of abertis and the Ibex35 Evolution over 10 years (1997-2006) % 1 4 % 6 3 % 0 2 % 1 2 % 8 1 % 6 2 % 1 % 1 % 8 - % 2 2 - % 9 2 - % 8 2 - % 2 4 % 8 3 % 8 2 % 7 1 % 7 1 % 8 1 % 2 3 % 1 1 abertis A* Ibex 35 (*) Adjusted for share issue 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 76_77 financial and economic information _ shareholders and the stock market All company shares are officially listed on the stock exchanges of Barcelona, Bilbao, Madrid and Valencia, and are traded by means of the Spanish Automated Quotation System. Ordinary class A shares have consistently formed a part of the selective Ibex 34 index since 1992, and also appear in other noteworthy international indices such as Standard & Poor’s Europe 350 and the FTSE Eurofirst 300. abertis on the DJSI (Dow Jones Sustainability Indexes) In 2006 abertis maintained its presence in the selective Dow Jones Sustainability World index for the second year in a row. The index lists 10% of all the companies in the world with the best criteria for sustainability and which represent 20% of capitalisation in their sector. With its listing on the DJSI, abertis has clearly consolidated its presence on the most significant international sustainability indices. abertis achieved a point above the average in the three dimensions analysed by the world Dow Jones Sustainability index: economic, social and environmental management. Ibex 35 Close Annual variation High Low abertis class A Price Close Adjusted close (*) Adjusted annual variation (*) Non-adjusted high Adjusted high (*) Non-adjusted low Adjusted low (*) Non-adjusted weighted average Adjusted weighted average (*) Volume Total trading volume Average daily volume Equivalent percentage on all shares Cash value traded (M€) Daily average cash value Nº shares Market capitalisation (31/12) (M€) Options on abertis shares Note: Closing highs and lows (1) Adjustment derived from paid-in capital interest 1997 1998 1999 2000 7,255.4 40.8% 7,335.1 5,018.6 12.29 7.92 20.0% 12.41 7.98 9.50 5.83 10.98 6.89 9,836.6 35.6% 10,952.5 7,133.3 14.18 9.60 21.2% 16.29 10.50 11.99 7.73 13.73 9.11 11,641.4 18.3% 11,686.6 9,140.7 9.65 6.86 -28.6% 15.21 10.29 9.60 6.82 11.67 8.06 9,109.8 -21.7% 12,816.8 8,864.3 9.31 6.95 1.3% 10.61 7.54 8.38 5.96 9.22 6.72 113,277,307 449,513 47% 1,243 4,933,815 240,340,174 2,954 34,710 122,654,117 494,573 49% 1,680 6,776,147 252,357,182 3,579 22,915 137,047,819 548,191 52% 1,597 6,389,462 264,975,041 2,557 38,028 146,336,403 585,346 53% 1,350 5,401,374 278,223,793 2,590 57,736 Shareholder return and a low of 0.91 euros. Since 1993, abertis has based its shareholder return policy on a regular annual dividend in two payments, which have grown through an annual bonus share issue. Bonus share issue At the General Shareholders’ Meeting held on the 3rd of May, a decision was reached to increase capital with the incorporation of reserves for a total of 86.9 million euros, through the issue and circulation of 28,952,772 ordinary class A shares for all holders of either class A or class B shares at a ratio of 1 new share for every 20 held. Between the 19th of May and the 2nd of June, 63.6 million entitlements were traded at a high of 0.96 euros The theoretical value of the entitlements was 0.94 euros. The new shares were initially listed on the market on the 26th of June, and have the same political and economic rights as existing shares of the same class, granting their holders the right to a dividend on profits obtained as of the 1st of January 2006. Dividend In the month of May, abertis paid out an additional dividend of 0.25 euros per share from the year 2005, and in October 2006, the company paid an interim dividend of 0.25 euros gross per share for 2006. 2001 2002 2003 2004 2005 2006 8.397,6 -7,8% 10.132,0 6.498,4 11,19 8,77 26,2% 11,89 8,87 9,26 7,12 10,54 8,04 158.556.245 634.225 54% 1.670 6.679.584 292.134.982 3.269 43.793 6.036,9 -28,1% 8.554,7 5.364,5 10,80 8,89 1,3% 11,99 9,39 10,28 8,05 11,15 8,74 7.737,2 28,2% 7.760,4 5.452,4 11,99 10,36 16,6% 12,90 10,61 10,80 8,89 11,82 9,86 9.080,8 17,4% 9.100,7 7.578,3 16,20 14,69 41,9% 16,26 14,75 12,03 10,39 14,29 12,63 219.180.111 876.720 71% 2.433 9.732.570 308.593.549 3.333 22.637 257.902.032 1.031.608 53% 3.045 12.181.931 488.183.992 5.853 43.731 309.826.837 1.234.370 60% 4.211 16.775.116 514.445.009 8.334 37.140 10.733,9 18,2% 10.919,2 8.945,7 21,26 20,25 37,8% 25,30 24,10 16,18 14,68 20,25 18,84 269.001.790 1.050.788 50% 5.440 21.250.912 542.019.077 11.523 29.194 14.146,5 31,8% 14.387,6 10.665,6 22,50 22,50 11,1% 23,10 23,10 17,55 17,55 20,55 20,23 284.207.931 1.118.929 50% 5.825 22.932.133 570.971.849 12.847 35.250 78_79 financial and economic information _ shareholders and the stock market At the 2007 Ordinary General Shareholders’ Meeting, the Board of Directors of abertis have agreed to propose, in addition to a 1x20 bonus share issue, an additional dividend for 2006 of 0.25 euros gross per share. This amount, added to the interim dividend paid in October, amounts to direct shareholder return in the form of dividends of 0.50 euros gross, paid from 2006 profits. Shareholder return per dividend on the exchange at the close of 2006 was at 2.2%. Returns on abertis shares, taking into account market appreciation, bonus share issues, and yield per dividend is one of the highest on the market in the last 10 years as can be seen in the next section. Return over the decade The following table shows the stock market return on abertis shares over the last ten years, with shares being bought and sold at different intervals. The return on abertis shares is compared with the IBEX 35. The intersection indicates the return on abertis shares and the market, respectively, for the period selected (year of entry and year of exit). So an investor who invested 10.76 euros in abertis shares at the end of 1996 (an investor who had access to the successive bonus share issues and taking into account paid-out dividends), would have a portfolio worth 36.65 euros by the 31st of December 2006 and he would have earned 5.97 euros in dividends, which equals total accrued returns of 296.2%. abertis shares over the combined period have performed better than the market. Year of exit (1) 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 24.25% 54.16% 17.38% 23.71% 56.49% 63.76% 91.83% 163.55% 254.68% 296.17% 40.75% 90.83% 125.84% 76.73% 62.91% 17.11% 50.10% 76.16% 108.23% 174.44% 24.93% 35.58% -5.73% 60.45% -0.46% 25.56% 26.87% 32.94% 56.33% 116.12% 192.08% 226.67% 15.74% -16.79% 6.64% 25.16% 47.94% 94.98% -25.30% -20.95% 1.60% 6.60% 25.91% 75.25% 137.94% 166.49% 18.35% -7.39% -14.63% -38.63% -21.34% -7.68% 9.12% 43.81% 6.09% 37.66% 44.67% 71.69% 140.76% 228.52% 268.48% -21.75% -27.86% -48.14% -33.54% -22.00% -7.80% 21.52% 31.17% 38.08% 64.76% 132.94% 219.58% 259.02% -7.82% -33.73% -15.07% -0.32% 17.83% 55.29% 5.48% 26.62% 80.64% 149.29% 180.55% -28.11% -7.86% 8.14% 27.82% 68.46% 20.86% 74.17% 141.91% 172.75% 28.17% 50.42% 77.80% 134.33% 45.73% 103.84% 130.30% 17.37% 38.73% 82.84% 40.96% 59.61% 18.20% 55.78% 13.53% 31.79% Year of entry (1) 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 NOTES: abertis IBEX-35 abertis IBEX-35 abertis IBEX-35 abertis IBEX-35 abertis IBEX-35 abertis IBEX-35 abertis IBEX-35 abertis IBEX-35 abertis IBEX-35 abertis IBEX-35 (1) Entry and exit on the last day of the indicated year. Market appreciation is considered as are bonus share issues, and dividend yield. The possibility that the shareholder may have made additional outlays is not accounted for. Share capital and treasury share portfolio abertis shareholder structure As abertis shares are bearer shares, there is no record of nominative shares. The structure of abertis share capital, according to information provided by Iberclear on the 22nd of June 2006 for the purposes of the last Extraordinary General Shareholders’ Meeting, is distributed in the following manner: 93% of shares are held by residents of Spain (16% private investors and 77% institutional investors) and 7% are held by non- residents of Spain. abertis share capital rose to 1,824 million euros by the 31st of December 2006, made up of 608,005,215 shares that are entered in the share register at a nominal value of 3 euros each, fully subscribed and paid up. 570,971,849 of those are ordinary class A shares, and 37,036,366 are class B preferred shares. In 2006, share capital increased by 28,952,772 shares, amounting to an increase of 87 million euros, corresponding to the bonus share issue. At the close of 2006, abertis held 3,336,610 shares in its treasury share portfolio (0.55% of share capital), compared to 7,685,832 shares in 2005 (1.33% of share capital). As communicated to the market on the 16th of December 2005, abertis intends to keep the shares in its portfolio only temporarily. In 2006, with the exception of the bonus share issue, only sales transactions were undertaken for purposes of increased liquidity. Distribution of capital ownership 24,83 %_ ACS 24,40 %_ “la Caixa” 5,69 %_ 5,50 %_ 39,58 %_ Caixa Catalunya Sitreba Free-float 80_81 financial and economic information _ shareholders and the stock market abertis and its shareholders and investors Our goal is to provide regular, consistent service to our investment community Channels of information The original idea of the Investor Relations / Shareholders’ Office area was to create value for shareholders by transmitting to the investing public extensive information about the progress of the company. Transparency in information is the essential part of our value chain, therefore, we look for ways to get shareholders and the market more involved in our company. > Investor Relations Department abertis attends to consultations from analysts and institutional investors every day, and provides them with continuous information on all relevant company events. Furthermore, periodic meetings are held in our offices in Spain as well as in other countries. We aim to be the point of contact to channel and coordinate relationships between shareholders, analysts, investors and the company, through personalised treatment and bi-directional contact. 2006 saw a change in approach and certain modifications were introduced, such as an increase in the number of meetings held and greater tracking of analysts and institutional investors. With this goal in mind, abertis has made different channels of information available by which shareholders can get in touch with the company. The call for information on the part of the investing community is growing, and one of the objectives of the Investor Relations Department is to undertake an active communication policy, providing consistent information on abertis’development, results and strategies. Information requests from analysts and investors tend to intensify when abertis publishes its quarterly results, and when the company undertakes financial transactions (last year especially with the acquisition of sanef, the announcement of the Autostrade merger and the purchase of 32% of Eutelsat). In 2006, meetings were held with the two of the groups with which the Investor Relations Department has the most contact: institutional investors and financial analysts. Thirteen group meetings were held with institutional investors, attended by 124 people, and 130 individual meetings were held in Spain, Europe and the United States. Regarding financial analysts, abertis regularly works with 23-25 firms, who value the company, allocate an objective price to its shares and recommend them. These financial analysts, both Spanish and international, carry out quarterly tracking in order to publish results as well as make occasional contact in the wake of significant events in order to write reports on the company’s development. In 2006, 64 individual meetings were held with analysts who in turn published 103 reports and notes on the value of abertis, 34% of which comes from national consulting firms and the remaining 66% from foreign ones. Investor Relations continuously monitors the perception that principle analysts have of abertis. From this we have seen a change in the trend for the year, an increase in BUY recommendations from 0% at the start of the year to 61% of consulting firms recommending buying shares at the end of the year. In 2006 this information was made available on the web-site, providing information on the recommendations of each consulting firm. Three conference calls were arranged in order to publicise company results in 2006 (one for each quarter). For the publication of annual results, presentations were given in Madrid and Barcelona, attended by 185 investors and analysts, who had the opportunity to ask questions directly. This was retransmitted by web-cast, in the video retransmission format, in three languages. A web-cast was also arranged to announce the merger of abertis and Autostrade to the investor community, so that questions could be directed to company management. The breakdown of the recommendation on the value abertis % 1 2 % 9 7 % 4 2 % 6 7 % 4 % 4 2 % 2 7 % 8 % 8 2 % 4 6 % 9 1 % 9 2 % 2 5 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% % 1 4 % 8 4 % 0 5 % 6 5 % 8 5 % 1 6 % 1 6 % 8 1 % 1 4 % 7 1 % 5 3 % 7 1 % 3 3 % 6 1 % 8 2 % 5 2 % 7 1 % 6 2 % 3 1 % 0 3 % 9 buy hold sell 01/06 02/06 03/06 04/06 05/06 06/06 07/06 08/06 09/06 10/06 11/06 12/06 82_83 financial and economic information _ shareholders and the stock market In addition, a conference call was arranged concerning the purchase of 32% of Eutelsat in which more than 155 investors and analysts participated. 43 releases were also sent out in 2006 to analysts and investors with information about the company. Information supplied to official bodies included 56 releases to the National Securities Market Commission in addition to other memos. > PRÓXIMO programme – A pioneer initiative between non-banking Ibex companies Transparency and active, fluid communication with shareholders are our primary objectives. Concerned with being closer to its shareholders and having a better understanding of their worries, in 2005 abertis founded the PRÓXIMO programme. The PRÓXIMO programme is an initiative that, through informative meetings in different cities in Spain, allows the company to forge a closer relationship with its shareholders and investors, apart from coming together at Ordinary Shareholders Meetings. The programme, created on the recommendation of good governance, is not obligatory, but one whose implementation abertis felt was important in order to build stronger ties to its shareholders, to be able to explain first-hand the facts and events happening at any given moment, and to give stakeholders the opportunity to directly address management with their doubts or suggestions. A Coruña Vigo Oviedo Bilbao Zaragoza Madrid Barcelona Castellon Valencia Seville Granada Alicante Elche Malaga Events in 2005 Events in 2006 Our aim is that our shareholders -the people who have shown confidence in us and supported us– should have access to clear, concise, consistent, up- to-date and complete information in order to better evaluate the performance of the company and its economic and financial results. The PRÓXIMO programme is an ideal vehicle for this. Our shareholders have been the first to thank us for this effort, and they have been doing so for the duration of the program. Meetings In 2006, the Shareholders’ Office met with investors and shareholders in seven Spanish cities. The meetings were well-attended with total of 592 participants and an average attendance of 85 people. The PRÓXIMO programme was created in mid- 2005, and in addition to presentations held in 2006, has enabled us to meet with 1,412 shareholders and investors. In 2006 meetings were held in Seville, Malaga and Granada, bringing the programme to southern Spain. After the interest shown in 2005, we repeated the meetings in Alicante, Barcelona, Madrid and Valencia. The PRÓXIMO programme meetings were not only held in cities with stock markets –abertis wanted to reach out to all its shareholders, and the investor community in general. abertis also offers “individualised” meetings: If a group of investors or shareholders from any city is interested in getting to know the company, they can simply get in contact with the Shareholders’ Office and arrange a meeting. 84_85 financial and economic information _ shareholders and the stock market > www.abertis.com > abertis magazine Our corporate publication has a section specifically for shareholders and investors with articles on subjects such as the presentation of quarterly results, information on recent and current events, and other items of interest to the investor community (dividends, company presentations, and the evolution of our stocks). > Shareholders’ Service phone: 902 30 10 15 24-hour service, 365 days a year to help you with any question, doubt or suggestion you may have. Consultations especially revolve around topics related to share issues, General Meetings and dividends, and this year the "others" category expanded to take in all consultations related to the merger process with the Italian company Autostrade, which was announced in April. The abertis website is organized into five broad sections: corporate information, business areas, investor relations, press room, and social responsibility In the investors’ and shareholders’ section, the investment community can find sections on information related to activities, a large amount of financial information, information on corporate leadership, and more. For the purposes of an upcoming General Shareholders’ Meeting, information about all issues, proposals and reports indicated in the meeting announcement will also be made available. The information will be accessible on-line or by pre-recorded web-cast in three languages. The investors’ and shareholders’ section changed a bit in 2006 and several new items were added. For example, the investors’ calendar has been updated, the analysts’ recommendations section has been expanded and a yield calculator has been added. The section providing information on company results has also been improved and a new French web-site is now available. This was the second most visited abertis section in 2006. The most visited section was the General Shareholders’ Meeting page. Distribution of shareholder services telephone consultations (in percentages) 40 %_ Meeting 20 %_ Dividends 11 %_ Issues 6 %_ 23 %_ PRÓXIMO Others 23% of "OTHERS" were questions about the announced merger between abertis and Autostrade, price evolution, important events, new investments and requests for documentation. > Mail @ Email: relaciones.inversores@abertis.com Address: Avenida del Parc Logístic, 12-20, 08040 Barcelona These direct channels to the company offer the possibility of open dialogue with shareholders, so they can express their doubts and the company can provide any information or clarification that may be necessary. > Events for shareholders and investors abertis participates in fairs for investors and shareholders as another way to bring us closer to our shareholders. These fairs and event, along with the PRÓXIMO programme, allow us to have a channel of communication in two senses. We are able to explain the most important aspects of company business, but at the same time our shareholders and investors are able to address their uncertainties and doubts to us, so that we can identify where we can improve and how we can provide better information. This mutual understanding allows us to improve from day to day. abertis participated in Bolsalia 2006, on the 2nd, 3rd and 4th of March in Madrid. This event was aimed exclusively at small shareholders and investors. Also, in October, on the 23rd, 24th and 25th abertis participated in BORSADINER, el Salón del Dinero, la Bolsa y Otros Mercados Financieros (BORSADINER, conference on money, the stock market and other financial markets). This was also directed at small investors. 86_87 financial and economic information _ shareholders and the stock market The Shareholders’ Service received approximately 900 calls about the General Meeting, 40% more than the total received in 2006. In addition, the office attended to more than 450 requests for information. The Investor Relations / Shareholders Office area pledges a commitment to its shareholders, its private and institutional investors, to market analysts and in general to the entire investor community to form strong ties with them and provide them with accessibility and availability, in short, we pledge a commitment to dialogue. > General Shareholders’ Meeting The Shareholders’ Office will answer any questions related to attendance or organisation of the General Shareholders Meeting, in accordance with the rights of shareholders under article 212 and 144 of public limited companies and article 7 of the regulations on General Shareholders’ Meetings. All information about the General Meeting is available on the corporate web-site starting on the day of the meeting. It is also possible to request that information by post. In 2006 two General Meetings were held, and both were rebroadcast by web-cast, as a video retransmission, in three languages. The Ordinary General Shareholders’ Meeting was held in May 2006. Of a total of 424,066,591 shares, 211,768,876 were present, and 212,297,715 were represented, forming a quorum of 73.23% of share capital (36.57% present and 36.66% represented). 

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