Abertis Infraestructuras S.A. Annual Report 2017

Plain-text annual report

INTEGRATED ANNUAL REPORT 2017commitment & delivery02ABERTIS AT A GLANCE 0601Letter from the Chairman 10Letter from the Vice-chairman and Chief Executive Officer 1403ABERTIS IN 20172017 Milestones 20 04STRATEGYStrategy 24 Opportunities and industry challenges 26Strategic Plan 28Strategic Programs 34CSR Master Plan 35Global Footprint 38Awards and Recognitions 51 SAFE AND INNOVATIVE ROADSRoad Safety 74Road Tech 84Quality Management and Client Focus 92COMPLIANCE AND RISK MANAGEMENT07Ethics and Compliance 62Risk Control 68CORPORATE GOVERNMENT06Adaptation to the Code of Good Governance 54Corporate Governance Structure 56Group’s Management Committee 590508VALUE CREATIONSHAREHOLDERSFigures and results 99Financial Management 108Shareholder Retribution 112SOCIETYTax Contribution 117Contribution to the Environment 119Contribution to the Community 124 Supplier Management and Supply Chain 130HUMAN TEAMCommitted to Talent 135Professional Development 138Safety and Health 142OUTLOOKABOUT THIS REPORT 152102018 Course of action 15009ABERTIS AT A GLANCE01Value creationWe combine commitment to our shareholders and employees with our contribution to the growth of the countries in which we operate.Financial strength and industrial experienceAbertis is a leader on one of today’s greatest global challenges: the sustainable financing of the infrastructure of the future. Safe and innovative roadsWe invest in technology and smart engineering to make sure our customers have the best experience.Partnering with governmentsOur long-term commitment and high quality services make us a trusted partner to governments.International leaderWe manage thousands of kilometers of high capacity, high quality roads around the world. Solid results:Revenue +13%Ebitda + 14%Investments €3,728Mn15 countriesMore than 15,000 collaborators8,650kilometersLong-term visionWe want to be a part of the solution to problems associated with the increase in global traffic. Mobility innovationLeaders in free-flow tollsystemsGlobal road safety campaignsCommitted to society and the environmentResponsibility and transparency Dividends+10% Over €1,800Mnin tax contributionsMore than 60 years of experienceBest practicesManagement excellenceNet profit + 13%2017 FiguresABERTIS AT A GLANCE701 ABERTIS AT A GLANCELETTER FROM THE CHAIRMAN02day to provide a service of the highest quality to users through modern, safe and sustainable infrastructures. Thank you very much. Salvador Alemany Mas Chairman 01 LETTER FROM THE CHAIRMAN Dear shareholders, It is my pleasure to present you the Integrated Annual Report for the 2017 financial year. A report which, according to the requirements established in the current accountability regulations, contains financial and non-financial information that allow consolidating an integrated vision of the economic, environmental, social and good governance performance of our organization, thus meeting the expectations of our various stakeholders. The Integrated Annual Report and its annex have been prepared according to the main international standards on the matter and have been reviewed externally. The results of our activity throughout the year 2017 reflect the good performance of the business, driven by the growth of traffic in our main markets. In turn, the increase of our stake in Sanef in France and A4 Holding in Italy together with the new Via Paulista concession granted to Arteris in Brazil and the agreement reached with the Argentine government for the extension of the concessions of Ausol and GCO, are elements that allow us to embrace the future with optimism. These operations contribute to the renewal of our concessions portfolio, with new additions that replace those that will end their journey in the coming years. A strategy focused on achieving stability in the generation of cash flow, which is necessary to achieve our commitment to generate value for our shareholders. The behavior of the Abertis share throughout 2017 can be described as exceptional, in the strictest sense of the word. The announcement of the Takeover Offer made by Atlantia last May, and the subsequent competing offer announced by Hochtief in October reveal an unprecedented situation for our company. The interest shown by these two business groups to achieve a controlling position in the shareholding of Abertis is an example of the attractiveness that our company has today, endorsing a track record of success that has allowed us to position ourselves as world leaders in the industry. This, together with the high liquidity of our stock market value, has allowed them to compose two offers that have had a very positive reception from the markets. This situation has benefited our shareholders, who have seen the value of their shares increase by nearly 40% over the entire year. A return that is added to the total dividend of 80 cents per share for the year 2017, which the Board of Directors has agreed to propose to the General Shareholders’ Meeting. Since Abertis’ inception in 2003, and until the end of 2017, the average annual return of the share was 10.28%, including stock market appreciation, bonus issues and dividend yield. Likewise, during the last five years the cumulative yield rose to 113% with an annual average of 16%, for a shareholder who had bought his or her shares on December 31, 2012 and did not sell them until December 31 of 2017. In the area of corporate governance, 2017 saw the incorporation as independent directors of Mr. Xavier Brossa Galofré and Mr. Antonio Viana-Baptista. With these appointments, ratified by the General Meeting in March, the Board has 9 independent directors or 60% of the total. Also in this area, last October the Board of Directors agreed to the move our registered office. A temporary decision that seeks to protect the general interests of the company and its shareholders avoiding any uncertainty that could impact the current circumstances. With respect to corporate social responsibility matters, Abertis has once again renewed its commitment with the United Nations Global Compact and the Sustainable Development Goals, known as the 2030 Agenda. In this sense, it has joined the initiative developed by the Spanish Network of the United Nations Global Compact to promote knowledge and contribute to the achievement of the Sustainable Development Goals in the business world. Throughout 2017, work has continued on the development of specific CSR plans in each country and progress has been made to include the new activities and countries in the materiality analysis. Actions have been developed to promote eco-efficiency and the circular economy that will contribute to achieving the objectives of reducing greenhouse gas emissions and recovering construction waste. And, the objectives that we have set ourselves in terms of equal opportunities and diversity, as well as in the field of occupational health and safety, are equally ambitious. I would also like to highlight the collaboration agreement signed with UNICEF to combat the main cause of death of school-age children, road accidents, offering children a safe journey to and from school. With this agreement, UNICEF recognizes our commitment to road safety and our program of campaigns adapted to the needs of the most vulnerable groups. More and more agencies and entities are evaluating our compliance in economic, environmental, social and good governance matters. These external evaluations allow us to continue working permanently to improve the systemic performance of the organization, which has led us to remain in the main sustainability indices one more year. To conclude, on behalf of the Board of Directors, I wish to thank you for the trust you have placed in us and in the work of the thousands of people who, from the companies that make up the Abertis group, strive every 10 INTEGRATED ANNUAL REPORT LETTER FROM THE CHAIRMAN 11 0INFORME ANUAL INTEGRADO 2017INFORME ANUAL INTEGRADO 20170LETTER FROM THE VICE-CHAIRMAN AND CHIEF EXECUTIVE OFFICER0202 LETTER FROM THE VICE-CHAIRMAN AND CHIEF EXECUTIVE OFFICER Dear shareholders, 2017 has been an important year for Abertis. On the one hand, in the last twelve months the Group has entered a new market -India- and has strengthened its position in the markets where it was already present -France, Italy and Brazil - with an investment in growth of about 3,700 million euros. On the other hand, the period of the 2015-2017 Strategic Plan has been successfully completed, and it is the result of a significant collective effort by the entire team of the Group. 2017, INVESTMENT AND GROWTH Abertis has recorded double-digit growth in its main figures in 2017, closing the year with a net profit of nearly 900 million euros, and revenues that, for the first time in history, have exceeded 5,000 million euros. These figures have been boosted by the improvement in the operating margin and also by the inclusion of the results of minority interests, following a broad participation purchase plan executed during the year. Thus, in France, Abertis has assumed 100% control of Sanef (from 52% at the end of 2016); and in Italy, the company has increased its stake in A4Holding with the purchase of minority interests, from the initial 51.4% to more than 90% (until January 2018). In the last 12 months, the Group has invested more than 3,700 million euros, allowing it to increase its concessional average life and consolidate its strategy of continuous investment in its network, and with an eye set on two clear objectives: road safety - through the Road Safety program - and the adaptation of our infrastructures to an increasingly digitized and interconnected world - through the Road Tech program - both of which are strategic for the Group. 2015-2017 STRATEGIC PLAN: FULFILLING OUR COMMITMENTS The year 2017 is also special for Abertis since it closes the period linked to the 2015-2017 Strategic Plan which has been successfully completed, exceeding its commitments across its four strategic pillars: growth, focus, efficiencies and shareholder remuneration. Between 2015 and 2017 Abertis has entered new countries with new subsidiaries, such as Emovis or Eurotoll, and through the purchase of new concessions in countries such as Italy, Brazil or India, consolidating its position as a world leader in the industry with a presence in 15 countries in Europe, America and Asia. In turn, the company has completed its process of focusing on the toll road sector, which accounts for 100% of the business in the consolidated accounts of the Group. In terms of efficiencies, Abertis has strengthened its efforts to search for synergies in our operations and among the Group’s various companies. Three years later, our international subsidiaries stand out for their efficiency, their adaptation to the needs of the industry in their respective countries, and their management excellence, by leveraging and sharing the Group’s know-how and best practices throughout the world. Lastly, Abertis has continued to improve shareholder remuneration with an annual increase in remuneration of 10%. Abertis’ broad - international and institutional - shareholder base and the latest shareholding shifts are another example of the growing attraction offered by the Group’s industrial and business project, which in 2017 was placed at the center of attention of the infrastructure sector in the world. A TEAM COMMITTED TO THE PROJECT to the project, At Abertis, we fulfill our commitments, and this is possible thanks to the daily collaborative effort of the entire team of the Group. Their commitment for continuous improvement, their resolve before the day-to-day challenges, and their ability to adapt to change in a constantly-changing industrial environment have allowed us to meet all the objectives we had set ourselves more than three years ago today. their enthusiasm Today, Abertis has consolidated itself as the international leader in the toll road industry, a more internationalized, competitive, efficient, sustainable and attractive group for its employees, customers and shareholders. In short, a better company for society. Thank you very much for trusting the entire Abertis team. Francisco Reynés Massanet Vice-Chairman and Chief Executive Officer 14 INTEGRATED ANNUAL REPORT LETTER FROM THE VICE-CHAIRMAN AND CHIEF EXECUTIVE OFFICER 15 ABERTIS IN 2017032017 MILESTONESABERTIS IN 201719INTEGRATED ANNUAL REPORT1803/01 ABERTIS IN 2017KILOMETERS (DIRECTLY MANAGED)7,994 kmsKILOMETERS (INDIRECTLY MANAGED)654 kmsCONCESSIONS43KILOMETERS TRAVELLED75 million TOTAL ADT24,368 vehicles +2.5%FATALITY RATE1.3 -6%ELECTRONIC TOLL TRANSACTIONS62% +2ppACCIDENT RATE21.3 -3%REVENUE€5,323 Mn +13%EBITDA3,480 Mn€ +14%TOTAL INVESTMENTS€3,728 MnDISCRETIONARY CASH FLOW€1,987 Mn +20%ACCRUED DIVIDENDS€792 Mn€ +10%NET DEBT€15,367 Mn (4.4xEbitda)CORPORATE RATINGBBB+ (Fitch Ratings) BBB (Standard & Poor’s)NET PROFIT897 Mn€ +13%TAX CONTRIBUTION€1,832 Mn FINAL WORKFORCE15,099 peopleWORK-RELATED ACCIDENTS-32%OCCUPATIONAL HEALTH & SAFETY TRAINING106,934 hours -27% CO2e EMISSIONS /REVENUE (SCOPES 1 & 2)-13%COMMUNITY315LOCAL SUPPLIER PURCHASES91%INDEX FTSE4GOODTwo consecutive yearsinitiatives developed As per the scope of non-financial information (specified in Chapter 7 of this report)111111 GLOBAL LEADERSAFE AND INNOVATIVE ROADSFINANCIAL STRENGTHVALUE CREATION FOR SOCIETY03/02 2017 MILESTONES JANUARY AUGUST • Sanef agrees with the French government a €147Mn investment in exchange for an increase in tariffs • Ausol reaches new agreement with Argentina for a US$430Mn investment in exchange for an extension of the term of the FEBRUARY • Abertis purchases an additional 8.53% of A4 Holding MARCH • Abertis closes the purchase of two toll roads in India for €133Mn APRIL concession OCTOBER • Emovis launches free-flow toll in the Mersey Gateway Bridge in the United Kingdom • Repurchase of part of the bonds issued by Autostrada Brescia- Verona-Vincenza (€200Mn) with maturity in 2020 • Global partnership with UNICEF to prevent damages caused to children as a result of car accidents • The Group signs its first “sustainable credit” for €100Mn • Abertis reaches 100% stake in Sanef, its French subsidiary • Arteris wins the Via Paulista concession in Brazil NOVEMBER • Autopistas opens the first free flow toll in Spanish AP-7 toll • HIT, owner of French subsidiary Sanef, issues bonds for road JUNE • Grupo Concesionario del Oeste agrees with Argentina Government a US$250Mn investment in exchange for an extension of the term of the concession • Abertis reaches global agreement with Waze in 7 countries to join its Connected Citizens program JULY • Abertis reaches 84% ownership of A4 Holding after several acquisitions from minority stakeholders €1,000Mn and repurchases €140Mn of bonds from a previous issue DECEMBER • Arteris opens the duplication of the Régis Bittencourt toll road in the Serra do Cafezal after a total investment of €330Mn • Abertis renews its presence in the FTSE4Good indices for the second year in a row Additionally, on May 15, 2017, Atlantia announced its decision to make a public takeover offer on all Abertis Infraestructuras shares. The acceptance period of this takeover offer was suspended on October 18 when the company Hochtief submitted a competing offer to acquire also 100% of the shares of Abertis Infraestructuras. This competing offer is pending authorization from the National Securities Market Commission at the close of fiscal year 2017. 20 INTEGRATED ANNUAL REPORT 2017 MILESTONES 21 STRATEGY04STRATEGY OPPORTUNITIES AND INDUSTRY CHALLENGESSTRATEGIC PLANSTRATEGIC PROGRAMSCSR MASTER PLANGLOBAL FOOTPRINTAWARDS AND RECOGNITIONSBASIS FOR VALUE CREATION • Be the reference company in the industry. Nobody is better placed than Abertis to set the pace on quality and innovation. • Our long-term commitment and the high quality of our services make us a great partner for the Administrations. • Continuous investment in technology and smart engineering, which allows us to maintain maximum levels of service in our toll road networks day after day, guaranteeing clients a fast, comfortable, easy and safe journey. • By combining financial strength and industrial experience: we have a strong financing capacity in world markets and have the best know-how in the industry. • By being part of the solution to problems associated with the increase of world traffic, such as congestion and climate change. INDUSTRIAL VISION ENGINEERING Our team of engineers is committed to keeping the highest levels of service, quality and technology in our toll roads; to guarantee their optimized maintenance in order to contribute to extending their lifecycle; and to control construction risks in all expansion and renovation projects in order to ensure compliance with planned schedules. TECHNOLOGY Abertis’ experts promote the use of innovative solutions geared at increasing efficiency, safety and quality of service. All of the above with the goal of ensuring efficient and safe traffic management through diligent monitoring of traffic conditions, efficient control of traffic flows, etc., while providing continuous information to the client. OPERATIONS Abertis’ industrial team develops and deploys best practices and policies that are based on the Group’s broad experience and know-how. 04/01 STRATEGY Abertis is the global leader in toll road management with over 8,600 kilometers managed and a presence in 15 countries in Europe, America and Asia. Abertis is the leading international road infrastructure management group by kilometers managed, with 8,648 kilometers of high capacity and quality roads and presence in 15 countries in Europe, America and Asia. Fueled by its commitment to research and innovation, Abertis combines advances in high capacity infrastructures with new technologies to drive innovative solutions to meet the challenges of the future of mobility. Abertis is the leading national road operator in countries such as Spain, Chile, and Brazil, and has an important presence in France, Italy and Puerto Rico. The company has stakes in the management of more than 650 kilometers indirectly managed. Abertis is listed on the Spanish Stock Exchange and is part of the selective Ibex 35, as well as of international indices FTSEurofirst 300 and Standard & Poor’s Europe 350. Thanks to the internationalization strategy developed by the Group in recent years, today more than 70% of Abertis’ revenues come from outside Spain, with significant contributions from France, Brazil and Chile. Abertis’ top priority is driver safety. The company invests continuously in smart technology and engineering to ensure that its customers experience a safe, comfortable, fast and easy journey when they choose to travel on the Group’s toll roads. Abertis’ vision is to be the world’s leading operator in infrastructure management at the service of mobility and communications. Our mission: to promote and manage toll roads in a sustainable and efficient way, contributing to the development of the infrastructures of society in harmony with the well-being of our employees, and to create long-term value for our shareholders. At Abertis we operate with integrity guided by our values: Managing with responsibility and trust on people. Finding solutions for the development of infrastructures through dialogue and collaboration with our stakeholders. Staying ahead and adapting to the needs of our clients and users through innovation and continuous improvement. • • • • Driving efficiency in our organization based on simplicity and pragmatism. • Being transparent to assess our rigor and credibility. 24 INTEGRATED ANNUAL REPORT STRATEGY 25 04/02 INDUSTRY OPPORTUNITIES AND CHALLENGES The toll road management industry offers several opportunities and poses a number of challenges of different nature that will have an impact on the future business prospects in the coming years. OPPORTUNITIES MOBILITY AS A SERVICE ROAD INFRASTRUCTURE DEFICIT Big data and the collaborative economy are driving mobility as a service, a new transport paradigm centered on the user. This new way of understanding mobility establishes a closer link between supply and demand, in which users seek the greatest efficiency in their travel decisions. Globally, the estimated infrastructure deficit is set in trillions of dollars, corresponding a significant part to road transport infrastructure. In the coming years, plenty of opportunities will arise both in new roads designing in developing markets such as India or Latin America, and in the upgrading of existing ones in mature markets such as Europe and the United States. DIGITIZATION AND CONNECTIVITY Road infrastructure should incorporate new digital components such as wireless networking technologies, digitization, the Internet of Things and artificial intelligence, which will be vital for better managing the new generation of autonomous and connected vehicles. NEW PAYMENT SYSTEMS The demand for free-flow tolling systems is growing due to the advantages they bring through both the reduction in travel times and carbon emissions and the ease of payment. GENERATING FINANCIAL RESOURCES There are multiple road transportation costs, including construction, maintenance, congestion and pollution. At a time when investment in infrastructure is paramount as a driver for economic growth, the private sector can contribute to the much-needed investments in infrastructure. The implementation of pay-per-use schemes in toll roads can be a way to transfer the risk of demand of infrastructure projects. CHALLENGES TRAFFIC GROWTH MANAGEMENT The increase in traffic (it is estimated that the number of vehicles in the world will grow 4 times by 2050) will pose important challenges such as pollution, congestion and other externalities on road safety and public health, imposting new ways of traffic management that seek a more sustainable, efficient and safe mobility. EVOLUTION OF THE ECONOMIC SITUATION The uncertainty in the evolution of macroeconomic data and the collapse of prices of raw material along with other elements such as stalling investments and weak improvement of the productivity can contribute to discouraging consumption and road transportation. INCREASING COMPETITION In recent years, a number of new international players with interest in assets such as toll roads have appeared in the market. These are fundamentally infrastructure investment funds and pension funds. The current scenario, which is marked by low interest rates, have led these funds to increasingly invest in infrastructure assets due to their attractive profitability. REGULATIONS AND LEGAL SECURITY The majority of the Group’s businesses are in the form of concessions, and thus, limited in time, based on agreements with governments, and carrying the duty to guarantee the concessional obligations and the investment commitments. The legal security that protects bilateral contracts is a cornerstone of the industry. ADAPTING TO SOCIETY’S NEW EXPECTATIONS Toll road clients and other stakeholders have new expectations that are related to services, customer care, new technologies, transparency and flexibility, among others. 26 INTEGRATED ANNUAL REPORT INDUSTRY OPPORTUNITIES AND CHALLENGES 27 04/03 STRATEGIC PLAN In 2017 Abertis has invested over €3,600 Mn in growth transactions. GROWTH DEALS IN 2017 GROWTH IN THE EXISTING ASSET BASE In 2017 Abertis gained control of 100% of the Holding d’Infraestructures de Transport (HIT) holding, a company controlling 100% of Sanef, after successive acquisitions of capital from the rest of the minority shareholders. Abertis has invested more than 2,200 million euros throughout the year in this process, which strengthens the Group’s presence in its biggest market. Abertis has also increased its stake in A4 Holding, its Italian subsidiary. The Group has closed agreements to acquire several minority interests until reaching close to 90% of the capital of the A4 and A31 toll roads concessionaire, which has been already completed in January 2018. The Group has also strengthened its position in Brazil. In October, Arteris - a subsidiary of Abertis - signed the concession contract for Via Paulista in São Paulo. The concession was awarded by the State of São Paulo in April for a period of 30 years. It is a concession totalling 720 kilometers, which includes 317 kilometers managed by Autovias (belonging to the Arteris Group) and other additional 401 kilometers, which, up to the time of the bidding process, were under direct management by the State of São Paulo. With these operations, Abertis has achieved a greater balance of its global portfolio by growing in economies with stable concessional frameworks and a clear commitment to public-private partnerships in the toll road sector. NEW ACQUISITIONS In March, Abertis closed the agreement with the MSIIPL and SMIT funds, controlled by Macquarie and State Bank of India, for the acquisition of two of India’s main toll roads, NH-44 and NH-45, for a total of 133 million euros. After this deal, Abertis controls 100% of concessionaire Trichy Tollway Private Limited (TTPL), which manages the NH-45 toll road (State of Tamil Nadu), and 74% of Jadcherla Expressways Private Limited (JEPL), which holds the concession of the NH-44 toll road (State of Talangana). These two toll roads are located in regions that are experiencing an economic growth that is above the average of the whole of India and both have GDP levels that are among the highest in the country. This transaction, which represents the Group’s entry into the Asian market, is an important step in Abertis’ commitment to geographical diversification, with presence in an expanding continent and in one of the CONTINUOUS SEARCH FOR NEW OPPORTUNITIES In 2017, the Abertis Business Development area analyzed more than 40 projects in 18 countries, of which seven projects have been successfully completed, enabling Abertis to consolidate its presence in countries where it already conducts business (France, Brazil, Italy and Argentina) and to gain access to new countries with high potential in the field of road concessions (India). Without prejudice of the passivity duty due to the takeover offers on Abertis, the company keeps on working on a business-as-usual basis, and it is in a position to leverage all the opportunities that may arise. Targeted markets North America Western Europe Latin America Australia India countries with the highest potential growth in the world, reinforcing the Group’s leadership and balancing its global exposure to different markets. PRIVATE-PUBLIC PARTNERSHIP AGREEMENTS In January, Abertis’ French subsidiary Sanef reached an agreement with the French Government for the implementation of a new investment plan for the upgrade of its network. Under the agreement, Sanef will invest 147 million euros in various projects in exchange for a rate increase of between 0.27% (Sanef) and 0.40% (Sapn) per year from 2019 to 2021. This new plan will improve the French road network around four basic objectives: road safety, traffic flow, quality of service and environmental sustainability, while giving a new boost to the French economy through large-scale work aimed at promoting the activity and employment of the country’s businesses network. In August, Ausol, a subsidiary of the Abertis Group in Argentina, agreed with the Ministry of Transportation on new investments in its toll road network. This agreement contemplates an additional investment plan to improve the current road network for a total of US$430 million, which will be fully financed with future revenues of the concession thanks to the extension of the current contract, set to end in 2020, until the end of 2030. Two months earlier, in mid-June of this year, the Group had reached a similar agreement with the Argentine Government regarding its other concessionaire in the country, Grupo Concesionario del Oeste S.A. (GCO), which also contemplates an investment plan of US$250 million and an extension of the concession term until the year 2030. Abertis thus reinforces its commitment to public-private partnerships with the goal of achieving solutions aimed at creating future value for the territories through agreements with governments for new investments in exchange for extensions of the term of concessions or through rate increases. In this sense, the Group has reached important agreements in the majority of countries where it operates, including Argentina, France, Italy, Brazil, Chile and Puerto Rico. In addition, the operation shows the Group’s ability to grow its portfolio of existing assets, by increasing the average term of its concessions. 28 INTEGRATED ANNUAL REPORT STRATEGIC PLAN 29 SHAREHOLDER REMUNERATION IN 2017 Delivering on the commitment established in the 2015-2017 Strategic Plan, the dividend per share has grown 10% in 2017. With this policy of shareholder remuneration, Abertis will have distributed nearly 2,166 million euros in the 2015-2017 period in ordinary dividends alone. ORDINARY ACCRUED DIVIDENDS €Mn DIVIDEND PER SHARE € 792 +10% 723 0.80 +10% 0.73 2016 2017 2016 2017 ORDINARY ACCRUED DIVIDENDS €Mn +10% 2017 shareholder remuneration +10% 792 723 DIVIDEND PER SHARE € 0.80 +10% 0.73 For more information, see the Shareholder Remuneration section in this 2016 report. 2017 2016 2017 30 INTEGRATED ANNUAL REPORT STRATEGIC PLAN 31 INTEGRATED ANNUAL REPORT2015-2017 STRATEGIC PLAN: COMMITMENT AND DELIVERY3233DRIVERS FOR GROWTH2015-2017 GROWTH TRANSACTIONS2015-2017 STRATEGIC PLAN: COMMITMENT AND DELIVERY 201520162017CHILE: 100% of Autopista del Soland LibertadoresINDIA: Purchase oftwo toll roadsBRAZIL:Awarding of Via PaulistaCHILE: 100% consolidation ofAutopista CentralBRAZIL: Purchase ofArteris minoritystakesFRANCE:100% SanefITALY: Purchase ofA4 HoldingITALY: 84% A4 HoldingSPAIN: Control of TúnelsPUERTO RICO: Extension of MetropistasFRANCE: Plan Relance IFRANCE: Plan Relance IIINVESTMENT AGREEMENTS WITH GOVERNMENTSFRANCEPlan Relance I and II €750 MnBRAZIL Network upgrade €2,000 MnCHILEAutopista Central (under negotiation) and Autopista del Sol ∼€800 MnPUERTO RICO Extension of PR-22 and PR-5 €125 MnITALYNorth Connection project€1,500 MnARGENTINAUpgrade of GCO and Ausol€565 MnMore than €7,000 Mn invested in growth since 2015FOCUSEFFICIENCIESNew efficiency plans FRANCE, BRAZIL AND SPAIN2016ANNUAL AND CUMULATIVE SAVINGS - EFFICIENCIES €Mn2017163201574179TOTAL 2015-20174162016ORDINARY ACCRUED DIVIDENDS €Mn2017723+11%792+10%2015651+10%2016DIVIDEND PER SHARE €20170.730.8020150.692016ORDINARY ACCRUED DIVIDENDS €Mn2017723+11%792+10%2015651+10%2016DIVIDEND PER SHARE €20170.730.8020150.69Shareholder remuneration 2015-2017 +10%INCREASED SHAREHOLDER REMUNERATIONOver €400 Mn of cumulative savings since 2015Over €2,100 Mn in ordinary dividends2015CELLNEX TELECOM iPO2015DISPOSAL LAST ASSETS INAIRPORTSMBJ (Jamaica) andSantiago de Chile2015CELLNEX TELECOM iPO2015DISPOSAL LAST ASSETS INAIRPORTSMBJ (Jamaica) andSantiago de ChileA PURE TOLL ROAD OPERATORINTEGRATED ANNUAL REPORTCSRMASTERPLAN3435ROAD SAFETY Abertis’ Road Safety program builds on more than 60 years of knowledge and experience in toll road construction and management with the highest international standards.The Group invests in smart technology and engineering to ensure that its customers have the best experience when traveling on our roads.Abertis applies advanced construction and management practices and collaborates with reference institutions and organizations worldwide.Looking ahead, Abertis conducts awareness-raising initiatives every year aimed at groups such as children and young people, and promotes university research.04/04 STRATEGIC PROGRAMS The Group’s two strategic programs seek to respond to the main challenges of future mobility, such as road safety, congestion and pollution. ROAD TECHAbertis is concerned about the mobility of the future. The company manages roads in an efficient and state-of-the-art way, innovating in technology and investing in smart engineering programs for a sustainable future.Abertis’ Road Tech program promotes projects aimed at the new challenges of mobility, such as electric, connected or autonomous vehicles.Abertis also leads innovation in the digitalization of road payment methods and promotes mobility solutions with the implementation of free-flow toll projects in many countries.TOGETHER FORSAFER ROADS®Road Tech ReportCompany businessesPayment systems issuersFree-flow and tolling technologyCollaborative projectsElectric vehiclesConnected vehiclesFor more information about these strategic programs, see the Safe and Innovative Roads section in this report. Road Techafrontando los retos del crecimiento del tráficoEscrito por: 04/05 CSR MASTER PLAN The Corporate Social Responsibility (CSR) policy and the materiality analysis constitute the basis for the definition of the CSR Master Plan. MASTER PLANThe Board of Directors’ CSR Committee is responsible for the follow-up and development of the CSR Master Plan, with the Corporation’s CSR Department acting as the global coordinator; and the different business departments involved in all the activities and countries, acting as the operating parties.• In 2017 the 2016-2020 CSR Master Plan was deployed internationally, with the goal of building action plans available in each country, that would centralize and deploy all actions related to the achievement of the different objectives set in the Master Plan.• Work was undertaken for the progressive inclusion of Italy, India and Emovis in the existing CSR formal management processes, the initial result of which is their direct participation in the ESG (Environment, Social and Good Governance) accountability exercise.• Abertis’ CSR Department has conducted workshop sessions in Brazil, Chile and Argentina. The sessions have identified specific management and operational aspects that affect the deployment of actions related to the management of ESG impacts, as well as contextual facts that help explain and adapt the management approach of each of the aspects.The development of the Road Tech and Road Safety strategic programs together with the deployment of the best corporate governance practices and the management of the rest of the environmental and social aspects through the CSR Master Plan centralize the management approach of the material ESG aspects in connection with the organization’s activities. The direct link with the Strategic Plan is formalized through the inclusion of shared monitoring indicators for both the Strategic Plan and the CSR Master Plan.Data related to detailed performance by activity and country for each of the strategic objectives of the CSR Master Plan are detailed in the Annex linked to this report. EXTERNAL EVALUATIONSThe frequency and significance of external evaluations of environmental, social and good governance matters have increased, as have their degree of systematization and procedure. This is partially due to the relevance and inclusion of the results in the decision-making process of the different stakeholders, including the investment and finance sector.Participation in different evaluations has secured Abertis’ continued presence, in different reference indices, such as the STOXX, MSCI and FTSE4Good families of the ESG indices. On the other hand, CDP has evaluated the performance of the organization and ranked it under the B category. After several years of Abertis’ presence in the DJSI indices, the results obtained in the evaluation of 2017 have not allowed the company’s maintenance in them.STRATEGIC PILLARS AND OBJECTIVES The CSR Master Plan is based on Human Rights as a prevention and risk management principle spanning the entire plan. This consists of four pillars and 13 strategic objectives that are deployed into 38 quantitative common objectives spanning the entire organization (the details about these objectives can be consulted in the Annex to this report). 2016-2020 CSR MASTER PLAN FOLLOW-UP SUMMARY STRATEGIC PILLAR ASSESSMENT OF QUANTITATIVE GOALS FOLLOW-UP Good governance, transparency and accountability • The number of breaches of the code of ethics has increased in relation to the previous year, although the number of complaints has decreased. • All claims have been addressed, with a positive trend with respect to compliance with the recommendations of the Code of Good Governance. • Training in the code of ethics and prevention of corruption together with awareness-raising actions have continued to involve different stakeholders. • The systematization of the supplier ESG evaluation is in the process of being implemented, although progress made in Brazil points to a significant increase in the tracking indicator in terms of the number of suppliers evaluated and approved according to CSR (applicable to the 4 pillars). • We must continue with the deployment of actions for the inclusion of human right aspects in due diligence processes. STRATEGIC PILLAR ASSESSMENT OF QUANTITATIVE GOALS FOLLOW-UP Ecoefficiency • Scopes 1 and 2 CO2e emissions have increased by 15% in absolute values and have decreased by 13% in relative values in according to revenue in relation to the base year (2015). The calculation methodology for scope 3 has been refined and will be shared for extensive use by the rest of the countries and activities. Actions are being carried out to manage the emissions of the company’s own fleet of vehicles and vehicles transitting the toll roads. The assessment of energy management systematization to be conducted by the different activities and countries is pending. • The usage percentage of electronic toll payment collection has exceeded 60% due to its extensive use in some countries. This objective will be reviewed next year in order to assess its modification. • The development of products and services with positive ESG impacts is pending, which relate directly to the goal of favoring the use of less polluting vehicles and focusing further on construction waste management and related actions. Integration with the community • The number of projects and the volume of resources allocated to the relationships with the communities have remained constant, as has the volume of local purchases. • All claims have been addressed and actions have been continued in terms of biodiversity enhancement. The identification of natural species is in the process of being systematized across the board, and the assessment of the services provided by ecosystems in relation to noise is still pending. • The number of road accidents has remained constant, although the number of fatalities has decreased in comparable terms. The increase in absolute terms results from the inclusion of India data. Accident and fatality rates have improved, although in the latter case India’s incidence on the global figure does not reflect this improvement. • All claims have been addressed, and road safety campaigns and related education and research projects have Safety and quality continued. • Workplace accidents have evolved positively, and the number of health and safety training hours and other skills/ competence training hours has also increased. • The trend towards gender balance is maintained, and work must continue to achieve equal pay. • The number of people with functional disabilities has increased through direct contracting. 36 INTEGRATED ANNUAL REPORT CSR MASTER PLAN 37 INTEGRATED ANNUAL REPORTGLOBAL FOOTPRINT3839BARCELONATARRAGONACURITIBASÃO PAULOGIRONALOGROÑOMADRIDSEGOVIAADANEROÁVILAALICANTELEÓNASTORGASEVILLECÁDIZBILBAOGLOBAL LEADER IN ROAD MANAGEMENT04/06 GLOBAL FOOTPRINT Assets inCountries158,600Km under management43Concessions15,099CollaboratorsSPAIN Control: Abertis Infraestructuras, Autopistas, Acesa, Aucat, Invicat, Aumar, Iberpistas, Castellana, Avasa, Túnels, Aulesa. Non-control: Autema, Accesos de Madrid, Henarsa, Ciralsa, Trados 45Concessions14Kilometers (indirectly managed)219Collaborators2,058 ADT (vehicles) +3.9%20,876Tn of CO2 (scopes 1 and 2) -9.3%22,361Kilometers (directly managed)1,559 More thanFRANCE Control: Sanef, Sapn, Abertis Mobility Services Non-control: Alis, Aliénor, Léonord ITALY Control: A4 Holding CAEN REIMS ALENÇON PARIS STRASBOURG LYON LANGON PAU 4 Concessions 1,761 275 Kilometers (directly managed) (Indirectly managed) 23,456 Tn of CO2 (scopes 1 and 2) +13.4% 2,756 Collaborators 24,836 ADT (vehicles) +1.5% PIOVENE ROCCHETTE BRESCIA PADOVA BADIA POLESINE 236 Kilometers 64,589 ADT (vehicles) +3.2% 1 Concession 609 Collaborators 1,903 Tn of CO2 (scopes 1 and 2) 40 INTEGRATED ANNUAL REPORT GLOBAL FOOTPRINT 41 BRAZIL CHILE Control: Arteris, Autovias, Centrovias, Intervias, Vianorte, Fernão Dias, Fluminense, Régis Bittencourt, Litoral Sul, Planalto Sul, Latina Manutençao Control: VíasChile, Autopista Central, Rutas del Elqui, Rutas del Pacífico, Autopista del Sol, Autopista Los Libertadores, Autopista de los Andes 9 3,250 Concessions Kilometers 44,063 Tn of CO2 (scopes 1 and 2) +15,7% 5,375 Collaborators 18,255 ADT (vehicles) +3.2% 6 Concessions 771 Kilometers 1,231 26,810 Collaborators ADT (vehicles) +4.0% 17,041 Tn of CO2 (scopes 1 and 2) +8.6% 42 INTEGRATED ANNUAL REPORT GLOBAL FOOTPRINT 43 FRANCAARARASFLORIANÓPOLISCURITIBASÃO PAULOSÃO CARLOSRIBEIRÃO PRETOBELO HORIZONTERÍO DEJANEIROSANTIAGODE CHILELOS ANDESLA SERENAVIÑA DE MARSAN ANTONIOOVALLEQUILOTAPUERTO RICO ARGENTINA Control: Metropistas, Autopistas de Puerto Rico, Abertis Mobility Services Control: Ausol, Grupo Concesionario del Oeste ARECIBO SAN JUAN BARCELONETA VEGA ALTA 2 Concessions 80 90 Kilometers 64,645 Collaborators ADT (vehicles) -2.9% 2,334 Tn of CO2 (scopes 1 and 2) -29.5% 44 INTEGRATED ANNUAL REPORT 2 Concessions: 175 Kilometers 2,160 82,825 Collaborators ADT (vehicles) -1.7% 17,041 Tn of CO2 (scopes 1 and 2) +8.6% GLOBAL FOOTPRINT 45 SAN FERNANDOSAN ISIDROLUJÁNBUENOS AIRESINDIA Control: Trichy Tollway Private Limited, Jadcherla Expressways Private Limited 2 Concessions 53 152 Kilometers 19,613 Collaborators ADT (vehicles) +9.6% 2,417 Tn of CO2 (scopes 1 and 2) IRELAND Control: Abertis Mobility Services M-50 (Dublin) – Free-flow operation 86 Collaborators UNITED KINGDOM Control: Abertis Mobility Services Dartford Crossing (London) and Mersey Gateway (Liverpool) - Free-flow operation Financial stake: RMG. A1-M Alconbury-Peterborough. A419/417 Swindon-Gloucester 74 Kilometers 427 Collaborators (Emovis) UNITED STATES Control: Abertis Mobility Services Research and Development Center (New York) LIVERPOOL ALCONBURY GLOUCESTER LONDON SWINDON NEW YORK DUBLIN 43 Collaborators 46 INTEGRATED ANNUAL REPORT GLOBAL FOOTPRINT 47 HYPERABADJADCHERLATRICHYULUNDURPETPETERBOROUGHCANADA Control: Abertis Mobility Services Golden Ears Bridge, Port Mann Bridge- Free-flow operation 36 Collaborators VANCOUVER MONTREAL CROATIA Control: Abertis Mobility Services Research and Development Center 42 Collaborators SPLIT HUNGARY Control: Abertis Mobility Services Operations office 10 Collaborators COLOMBIA Financial stake: Coviandes Bogotá-Villavicencio Toll Road 86 Kilometers BUDAPEST BOGOTÁ VILLAVICENCIO 48 INTEGRATED ANNUAL REPORT GLOBAL FOOTPRINT 49 ABERTIS MOBILITY SERVICES 8 Presence in: USA, Canada, Puerto Rico, United Kingdom, Ireland, Croatia, France, Hungary 341 3.8 Million transactions per year (Emovis) Million electronic toll accounts (Emovis) 715 150,000 55,000 Collaborators Devices (Eurotoll) Km network (Eurotoll) OTHER NON-CONSOLIDATED STAKES HISPASAT CELLNEX 57 % 34 % Stake Stake 04/07 AWARDS AND RECOGNITIONS • • The Legal 500 Spain awards the Abertis Corporate Legal Advisor Department, led by Marta Casas “Women and Traffic management” Award by the Spanish Association of Traffic Engineers and Mobility Experts, for Lourdes Roquet, Autopistas Operations Director • Bronze Leon at the Cannes Creativity Festival for the Speed-o-track app by Arteris (Brazil) • Valor Carreira Best People Management Award for Arteris (Brazil) • Highest qualification (three stars) for the Autopistas’ Truck Parks, by the European Professional Association ESPORG (Spain) • 1st and 2nd place for Rutas del Pacífico and Autopista del Sol respectively, as the toll roads with the best reputation in the industry, by the Reputation Institute (Chile) • 4 COPSA Awards (in the CSR, Innovation and Road Safety categories) for ViasChile’ projects on social action, reintegration and accident prediction • Centrovias, Autovias, Intervias, Vianorte and Litoral Sul, at the Top 20 by the Brazilian National Transport Confederation • Grandes e Líderes “500 Maiores do Sul” (Revista Amanhã y PwC) Award to Litoral Sul (Arteris) • • Valor Compartido Award from Sustainability Hub to VíasChile for its project on the scouting and social rehabilitation of imprisoned women The Arteris’ Process Intelligencee Analytics Project, awarded by the KofaxInspire 2017 (Chile) • Recognition to VíasChile from the Global Compact Global Network as one of the 5 best companies in the field of anti-corruption, with an emphasis on its voluntary adhesion to the Code of Good Tax Practices (Chile) 50 INTEGRATED ANNUAL REPORT AWARDS AND RECOGNITIONS 51 CORPORATE GOVERNANCE05ADAPTATION TO THE CODE OF GOOD GOVERNANCECORPORATE GOVERNANCE STRUCTUREGROUP’S MANAGEMENT COMMITTEE05/01 COMPLIANCE WITH THE CODE OF GOOD GOVERNANCE For Abertis, a good Corporate Governance is an essential factor for sustainability and long-term growth. STRATEGIC GOALS Achieve excellence in Good Governance Foster Corporate Social Responsibility and good Corporate Governance practices 15 40 % 60 % 53 Board members Women Independent board members Recommendations fulfilled GOOD GOVERNANCE BEST PRACTICES Abertis follows a Corporate Governance policy of promoting diversity within its decision-making bodies. In recent years, the company has increased the number of independent directors, gender diversity and the diversity of geographical and industry origins of the members of its Board of Directors and its Committees. In 2017, the Board of Directors approved the appointment of two new directors: Xavier Brossa Galofré and Antonio Viana-Baptista, as independent directors. These appointments have contributed to increase the percentage of independent members and broaden the international profile within the Board. As of December 31, 2017, Abertis’ Board of Directors has 9 independent directors, representing 60% of its members, thus in alignment with Corporate Governance best practices. Commited to transparency, Abertis complies with Good Governance regulations applicable to listed companies and with most of the recommendations of the Code of Good Governance. Of the 64 recommendations (58 of which apply), Abertis complies with 53. Furthermore, the Chairman reports to the General Shareholders Meeting on the compliance with these recommendations and provides justification in the case of the unfulfilled ones. For more Governance Report (ACGR) information, please consult Abertis’ Annual Corporate 54 INTEGRATED ANNUAL REPORT COMPLIANCE WITH THE CODE OF GOOD GOVERNANCE 55 05/02 CORPORATE GOVERNANCE STRUCTURE The functioning of the Group’s management bodies is described in detail in the ACGR, which highlights the functions of the Board of Directors as the top governance body at the company. Board of Directors Executive Committee Audit and Control Committee Appointments and Remunerations Committee Corporate Social Responsibility Committee BOARD OF DIRECTORS Salvador Alemany Mas Chairman Marcelino Armenter Vidal Susana Gallardo Torrededia Carmen Godia Bull, representing G3T, S.L. Juan-José López Burniol Miquel Roca Junyent Secretary, non-Board Member Josep Maria Coronas Guinart Vice-secretary, non-Board Member Antonio Viana-Baptista Xavier Brossa Galofré Carlos Colomer Casellas María Teresa Costa Campi Luis Guillermo Fortuño Sandra Lagumina Enrico Letta Mónica López-Monís Gallego Marina Serrano González Francisco Reynés Massanet Vice-Chairman - Chief Eexcutive Officer Proprietary Independent Executive As of December 31, 2017 56 INTEGRATED ANNUAL REPORT CORPORATE GOVERNANCE STRUCTURE 57 BOARD COMMITTEES EXECUTIVE COMMITTEE Chairman: Salvador Alemany Mas Members: Francisco Reynés Massanet, Marcelino Armenter Vidal, Xavier Brossa Galofré, Carlos Colomer Casellas, María Teresa Cos- ta Campi, Luis Guillermo Fortuño, Juan-José López Burniol, Mónica López-Monís Gallego APPOINTMENTS AND REMUNERATIONS COMMITTEE Chairman: Mónica López-Monís Gallego Members: Marcelino Armenter Vidal, María Teresa Costa Campi, Juan-José López Burniol, Mónica López-Monís Gallego, Marina Serrano González Secretary, non-Board Member: Miquel Roca Junyent Secretary, non-Board Member: Josep Maria Coronas Guinart Vice-secretary, non-Board Member: Josep Maria Coronas Guinart AUDIT AND CONTROL COMMITTEE CORPORATE SOCIAL RESPONSIBILITY COMMITTEE Chairman: Carlos Colomer Casellas Chairman: María Teresa Costa Campi Members: Marcelino Armenter Vidal, Xavier Brossa Galofré, Susana Gallardo Torrededia, Antonio Viana-Baptista Members: Carlos Colomer Casellas, Luis Guillermo Fortuño, Carmen Godia Bull, representing G3T, S.L., Sandra Lagumina Secretary, non-Board Member: Marta Casas Caba Secretary, non-Board Member: Josep Maria Coronas Guinart 05/03 GROUP’S MANAGEMENT COMMITTEE Vice-Chairman – Chief Executive Officer Francisco Reynés Massanet General Secretary and Corporate Affairs Managing Director Josep Maria Coronas Guinart Chief Financial Officer José Aljaro Navarro Chief Industrial Officer Josep Lluís Giménez Sevilla Business Development Director Sebastián Morales Mena People and Organization Director Joan Rafel Herrero Autopistas (Spain) Managing Director Anna Bonet Olivart Sanef (France) Managing Director Lluís Deulofeu Fuget Arteris (Brazil) Chief Executive Officer David Díaz Almazán VíasChile (Chile) Managing Director Luis Miguel de Pablo Ruiz A4 Holding (Italy) Executive Chairman Carlos del Río Carcaño 58 INTEGRATED ANNUAL REPORT GROUP'S MANAGEMENT COMMITTEE 59 * As of December 31, 2017 COMPLIANCE AND RISK MANAGEMENT06ETHICS AND COMPLIANCERISK CONTROL06/01 ETHICS AND COMPLIANCE The Abertis Group is fully committed to conducting its activities with honesty, integrity and in compliance with the law, in its relationships with all its stakeholders. STRATEGIC GOALS Develop an organizational culture based on ethical principles Reject all forms of corruption 211 Reports received in 2017 (-11.3%) 84% Resolved CODE OF ETHICS MAIN INITIATIVES IN 2017 The Abertis Group is fully committed to conducting business with honesty, integrity and in accordance with the law, be it in its relations with its employees or with the rest of the individuals that are part of its stakeholders. These guidelines of conduct are reflected in the Code of Ethics of the Abertis Group, a core code of the Group, whose principles are deployed in all the internal regulations. This Code of Ethics captures the principles and values that must guide the behavior of employees, as well as suppliers, customers, distributors, external professionals and representatives of governments. The Group does not tolerate any act that is contrary to the Code of Ethics and formally and expressly condemns any form of corruption and its firm commitment to comply with the law. Any infringement carries penalties of a contractual nature for infringing employees, as well as sanctions of a commercial or administrative nature for the rest of the individuals who are part of the stakeholders. The Ethics and Criminal Prevention Committees are entrusted with managing ethics and the criminal prevention model. The design, implementation and supervision of regulatory compliance processes and the rollout of the criminal prevention model are carried out by the Compliance functions of the Abertis Group. Abertis’ Audit and Control Committee regularly monitors all complaints and irregularities arising in all Group companies. • Training: – delivered in-person, covering workplace harassment aspects – delivered online, on the improper use of information by non- executive staff – reminder campaigns in matters related to corruption, conflicts of interest, ethics channel, ethics and criminal prevention committees of the Abertis Group, workplace harassment and information management. • • • • Deployment of a common methodology for the assessment of criminal risks. Streamlining of the Criminal Prevention model in all of the Group’s business units. French companies have adapted to the requirements of the Loi Sapin II Act. Preparation of Abertis’ risk and legal enforcement matrices with respect to Environment, Labor and Prevention of Occupational Risks, which reinforce responsible management and the respect for the environment and the physical safety of employees and suppliers. • Improvement and permanent updating of the Group’s policies and rules as per Compliance requirements. 62 INTEGRATED ANNUAL REPORT ETHICS AND COMPLIANCE MANAGEMENT 63 ETHICS CHANNEL COMPLIANCE MANAGEMENT MODEL All Group companies, except Italy and India, have mechanisms for reporting irregularities of any kind that guarantee confidentiality in the investigation and the analysis of all communications received. complaint or question regarding the Code of Ethics of the Abertis Group and / or its Local Codes of Ethics. The corresponding Ethics and Criminal Prevention Committees are responsible for investigating and proposing solutions in the event of any Abertis’ ethics channel as well as the Group’s Code of Ethics and Compliance standards are available at the company’s website www.abertis.com. BOARD OF DIRECTORS AUDIT AND CONTROL COMMITTEE ETHICS AND CRIMINAL PREVENTION CORPORATE COMMITTEE ETHICS AND CRIMINAL PREVENTION LOCAL COMMITTEES CHIEF COMPLIANCE OFFICER LOCAL COMPLIANCE OFFICERS REPORTS RESOLVED BY TYPE OF RESOLUTION 3.2% 7% 3.2% OTHER DISCIPLINARY MEASURES TERMINATION OTHER DISCIPLINARY MEASURES 7% TERMINATION 5.9% WARNINGS 5.9% WARNINGS 2016 2016 83.8% DISCARDED 83.8% DISCARDED 4.6% 4.6% 6.8% TERMINATION 6.8% OTHER DISCIPLINARY MEASURES TERMINATION OTHER DISCIPLINARY MEASURES 19.6% WARNINGS 19.6% WARNINGS 2017 2017 68.9% DISCARDED 68.9% DISCARDED Brazil Integrity Program In 2017 Arteris launched its Integrity Program (Compliance) with the aim of guaranteeing and promoting an ethical environment in the company, among its collaborators and third parties. The program is structured into five pillars that support the set of measures, instruments and responsibilities for preventing, detecting and extinguishing or mitigating potential risks. The launch of the program has been accompanied by an awareness campaign and mandatory training on the Arteris Code of Conduct. The reduction in the number of complaints received and discarded with respect to 2016 indicates an improvement in the level of knowledge about the use of the system and the implementation of awareness and training procedures related to the Code of Ethics. During the course of 2017 and in addition to the resolution of all reports received during the year, all reports that were still pending from the previous fiscal year have also been handled. Of these, 85.7% have already been resolved. 64 INTEGRATED ANNUAL REPORT ETHICS AND COMPLIANCE MANAGEMENT 65 BREAKDOWN OF REPORTS BREAKDOWN OF REPORTS RECEIVED BY COUNTRY 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Brazil France Spain Chile Argentina Italy 66 INTEGRATED ANNUAL REPORT ETHICS AND COMPLIANCE MANAGEMENT 67 06/02 RISK CONTROL The Abertis Group has implemented a risk management model in all countries where it operates. MAIN RISKS AND INTERNAL CONTROL The Abertis Group faces different risks that are inherent to the different countries where it operates. Therefore, it has implemented a risk management model – approved and monitored by the Audit and Control Committee – that applies to all business and corporate units in all countries where it operates. RISK TYPE MAIN RISKS CONTROL MEASURES Context and regulatory risks and risks deriving from the specific nature of the Group’s business • Decrease in demand due to the economic • Internationalization and selective growth policy situation of some countries. and Investment Committees. • Creation of alternative infrastructures. • Collaboration with governments. • Risks deriving from the integration of acquired • Efficiency plans. businesses. • Mobility changes. • Entry of new competitors in some sectors of • Coordination for ensuring adequate compliance with the existing local legislation and anticipation to regulatory changes. activity. • Insurance coverage. • Regulatory changes and socio-political changes. • Catastrophic risks. RISK TYPE MAIN RISKS CONTROL MEASURES Financial risks • Foreign exchange risk. • Interests rates and foreign exchange rates • Liquidity risk. • Cash flow interest rate risk. • Debt refinancing risk and credit rating variations. management policy. • Monitoring and extension of debt maturity and monitoring of potential impacts on credit ratings. Industrial risks • Client and employee safety. • Specific policies, procedures, plans and control • Adaptation risks and rapid response to technological changes in operational systems and the onset of new technologies. systems for each area. • Investment program monitoring and control (opex and capex committees). • Control risks in construction projects. • Road safety, operations and management • Risks associated with the correct maintenance system improvement plans (traffic, tunnels). and quality of infrastructures. • Risk monitoring and analysis and • Training and talent retention risks. • Supplier dependency. • Business disruption. • Environmental risks. implementation of Corporate insurance programs. • Environmental management system. Financial information risks, fraud and compliance • Integrity and security of financial and operations related information. • Internal Financial Information Control System (IFICS) organizational and supervision model. • Information manipulation fraud, corruption • Compliance model en vez de function and embezzlement. implemented at the Group. • Tax. • Legal compliance and compliance with internal and contractual regulations. 68 INTEGRATED ANNUAL REPORT RISK CONTROL 69 COMPREHENSIVE RISK CONTROL The members of the company’s Government bodies commit to ensuring that all company-relevant risks are duly identified, appraised and prioritized. As well, they are commited to establish the mechanisms and basic principles required to achieve a level of risk that allows a sustainable growth of our share value and shareholder remuneration, protect the Group’s reputation, promote good Corporate Governance practices and provide quality service in all infrastructures operated by the Group. (mitigated by internationalization and geographical diversification), the persistence to restrict availability and the public and private financing terms of some countries (mitigated by strict financial discipline), damages as a result of adverse climatic conditions (mitigated by a corporate policy of insurance coverage and contingency plans), and the reduction of the average life of road concessions (mitigated through the achievement of new public-private agreements in most of the countries in which the In 2017, the main materialized risks are those related to: political and social instability in some of the countries in which the Group operates Group operates). RISK CATEGORIES BY VOLUME 7% FINANCIAL 18% INFORMATION AND COMPLIANCE 34% GROWTH / STRATEGIC 41% INDUSTRIAL RISK ASSESSMENT BY CATEGORY Medium Low High High Medium Low 47% 47% 50% 50% 3% INDUSTRIAL 3% INDUSTRIAL 26% 26% 59% 59% 15% GROWTH / STRATEGIC 15% GROWTH / STRATEGIC 42% 42% 55% 55% 3% INFORMATION 3% AND COMPLIANCE INFORMATION AND COMPLIANCE 29% 29% 57% 57% 14% FINANCIAL 14% FINANCIAL 37% 37% 55% 55% 8% TOTAL 8% TOTAL ABERTIS RISK CONTROL AND MANAGEMENT MODEL Board, Audit & Control Committee Management Committee Risk Control (Corporation) Definition of value levers Definition of key topics (main risks) Definition of initiatives for each key topic Methodology, Homogenization, Coordination Abertis consolidated risk map Coordination Monitoring and follow-up Business Unit Risk identificacion and appraisal Business Unit risk maps Development of initiatives and control systems IDENTIFY AND APPRAISE PRIORITIZE CONTROL MONITOR 70 INTEGRATED ANNUAL REPORT RISK CONTROL 71 SAFE AND INNOVATIVE ROADS07ROAD SAFETYROAD TECHQUALITY MANAGEMENT AND CLIENT FOCUS07/01 ROAD SAFETY As the global leader in the toll road management industry, road safety is our priority. STRATEGIC GOALS Guarantee and promote road safety Develop products and services with a positive environmental, social and good governance (ESG) impact 21.3 -3.2% 1.3 -6.1% €43 Mn Accident rate (FR1) Fatality rate (FR3) Investment in road safety * FR1 = Number of accidents with victims / Traffic in 108 veh x Km ** FR3 = Number of fatalities / Traffic in 108 veh x Km 74 INTEGRATED ANNUAL REPORT ROAD SAFETY PROGRAM Through the Global Road Safety program, cross-functional teams from all disciplines and geographical locations work together in the Group to ensure road safety best practices are known and applied in all Abertis toll roads. We work in interdisciplinary groups in all business units creating a single global vision for the Group, bringing together both the most operations- intensive units and those closest to the client, their environment and society in general. We share this global vision with an ambition: reaching the zero fatalities goal on all Abertis roads, with 100% safe toll roads. As a result of this strategy, the main units of the Group have continuously improved their accident and fatality rates in recent years. YEAR-ON-YEAR CHANGE FR1 FR3 2017 -3.2% -6.1% 2016 -2.6% -5.4% 2015 -3.6% -15.8% Abertis works on a vision of road safety that shares the values of the Global Plan for the Decade of Action for Road Safety 2011-2020, which focuses on 5 pillars: Safe infrastructures, road safety management, safer vehicles, safer users and post-crash response. ROAD SAFETY 75 100% SAFE ROADS Abertis brings more than 60 years of knowledge and experience in road construction and management with the highest quality standards. The Abertis Group abides to the most recognized policies and procedures in the industry to ensure road safety in all areas of our activity. • Guerville viaduct (France). Declared a public interest, the construction of a third structure in the Guerville viaduct is under way using the most advanced techniques, with the goal of causing no inconvenience to the existing traffic. APPLICATION OF THE BEST PLANNING, DESIGN AND CONSTRUCTION PRACTICES • Enlargement to double capacity of the Serra do Cafezal section in the Régis Bittencourt toll road (BR-116). Arteris has completed this ambitious project in December 2017 after successfully completing 7 years of work. The enlargement of this road has resulted in: PROJECT FIGURES – 30 months of work – 180,000 cubic meters of earthworks – Work on 2 kilometers of roads – Length of the new structure: 360 meters – 3,000 tons of steel. – Improvements in the level of service; – The handling of more than 80 critical points identified by the Strategic Accident Reduction Group; – The adoption of new methodologies and practices such as the use of more adherent asphalt, preventive signage, new concrete barriers, pedestrian walkways and wildlife crossings. – Innovative tunnels, reaching quality levels that exceed the country’s standards, with a new pedestrian emergency tunnel and a modern automation and safety system, featuring the duplication of ventilation devices, specific lighting devices, fire prevention and mitigation systems and an intelligent flammable liquid drainage system. PROJECT FIGURES – 30 kilometers of enlarged toll road – 4 tunnels, 3 bridges and 36 viaducts – 12 wildlife crossings – 2 pedestrian walkways – More than 2,000 workers involved OTHER INITIATIVES FOR THE APPLICATION OF MANAGEMENT AND OPERATIONS BEST PRACTICES Autopistas • New Road Safety Center which seeks to position itself as a Center for Studies and Analysis and a Road Safety Center of Excellence (CoE) for public and private governments and institutions. • Seat Cone Project, which entails retrofitting a van for lane closing, placing and removing cones on the lanes, in order to improve the working conditions of our employees and the quality of service for our customers. • Cardio-protected Road Project: Installation of 33 semiautomatic defibrillators at toll stations and in service areas and a training plan for all staff to promote the knowledge on the use of cardioprotective devices. Arteris • Speed-o-Track: Arteris has created the Speed-o-Track app in Brazil together with Spotify and Google Maps, an app that alerts drivers if they exceed the speed limit. Drivers enter their Spotify account and select a song list. Thanks to the GPS data provided by Google Maps, the device detects the speed allowed on the road and the speed of the driver. If the allowed speed limit is exceeded, the music accelerates. A4 Holding • Use of a sound-absorbing draining layer of pavement along 100% of the toll road, which has led to an improvement in the indeces that measure the quality of the pavement in terms of roughness and regularity by more than 20% in the last ten years. Abertis Argentina • Toll booth reinforcement. • Installation of new speed radars. VíasChile • The new Maipo bridge of Autopista Central, featuring anti-seismic technology and LED lamps. • Implementation of Gate-Guard for making transfers and traffic management in Rutas del Pacífico. Abertis India • Improvement of crossing or intersection signage through the installation of light posts and the use of rough paint on the pavement. Metropistas • Installation of new LED lighting: • 2,674 lamps. • 48.5% reduction in energy consumption. • Improved maintenance, quality of lighting, visibility and safety. 76 INTEGRATED ANNUAL REPORT ROAD SAFETY 77 OPTIMAL SAFETY MANAGEMENT AGREEMENT FOR A SAFER MOBILITY Standardizing actions and training: In 2017 efforts were made to standardize best internal practices from across all of the Group’s units in order to achieve a global vision on road safety. The commitment to the road safety of our customers also drives us to look for partners whom we believe can add more value to our mission. – Several documents began to be drafted in 2017 such as the White Paper on Tunnel Safety Strategy, the White Paper on the Quality Management System, and the White Paper on Crisis Management. – The Group has continued to promote employee training on road safety to ensure the best operation and maintenance through drills in most of the concessions, such as France, Spain or Chile. • In Argentina, a special drill was conducted involving the transport of dangerous goods. The drill sequence consisted of a fuel spill from a bulk transport in the fuel pump sector, primary assistance, relevant notices in the face of imminent fire, evacuation and receiving the different representatives including the transfer of a wounded person. For more information on safety training for Group employees please see the “Safety and Health” section. • A4 Holding (Italy) works in collaboration with Autovie Venete and CAV to offer integrated information to drivers in the north of the country. Thus, through a single source, it is possible to obtain real- time information of all the toll roads linking the north of Italy (from Brescia to Udine, Gorizia and Trieste, including the Mestre ring road (Venice)). RESEARCH AND DEVELOPMENT OF ACCIDENT PREDICTION SYSTEMS • VíasChile works together with the Institute of Complex Systems of the University of Chile on an accident prediction model, which has obtained the COPSA Award in the Innovation category. The project, which began 2 years ago, takes place along 2 kilometers of the Central toll road as a test, seeks to prevent risk situations and alert users promptly, leveraging many possibilities offered by real-time information collected by the toll road’s electronic systems. A first phase has enabled the identification of the variables that have an impact on the occurrence of accidents, and even predict 70% of occurrences. In 2017 we have worked on creating a software that allows sending the information to the toll road control center for processing, Connected Citizens Program In 2017 Abertis has signed a global agreement to join Waze’s Connected Citizens Program, the pioneering social navigation application and mobile technology that offers free real-time traffic information, fed by the largest community of drivers in the world. Abertis thus becomes the first company to adhere to the program in seven countries: Spain, France, Italy, Argentina, Brazil, Chile and Puerto Rico. Abertis uses the application as a sensor to understand traffic in real time as well as as another communication channel to inform its customers. The company receives anonymous information in real time directly from the source: the drivers. On the other hand, users of the application obtain updated information from Abertis from the traffic management centers the Group has in each business unit, as well as the roadwork program information or information on other incidents that could affect travel. with the aim of developing better actions geared at alerting users adequately and try to prevent accidents. CONTINUOUS EVALUATION OF ALL ASPECTS OF ROAD SAFETY MANAGEMENT autonomous driving, the increasing use of Big Data and the Internet of Things, or the collaborative economy, to name but a few factors, will undoubtedly have an effect on road safety. For this reason, Abertis participates in important international projects together with automobile companies to improve the safety of the cars of the future. – Through its own management software that monitors both the state of the pavement and structures and retaining walls. For more information about these and other projects, please see the “Road Tech” section. – Through independent security controls: in addition to the internal control systems, the Abertis Group works with independent entities such as the iRAP Foundation (International Road Assessment Program), which carries out safety audits of roads. IRAP is a non-profit institution based in the United Kingdom dedicated to saving lives on the road. They develop a scientific methodology and predictive tools recognized by higher-level institutions such as the United Nations, the World Bank or the Asian Development Bank, among others, with projects in more than 80 countries. In 2017, Abertis has become the first private road operator to cooperate globally with iRAP. This methodology will allow Abertis to know the level of safety of its toll roads in a standardized and highly professional manner, identifying all areas of improvement that can help define the Group’s future investment plans. SAFER CARS In 2017 the Group has seen its Road Tech and Road Safety strategic programs converge more and more, setting a trend toward using new technologies in the sector to enhance road safety. Advances in POST-CRASH RESPONSE The Group continues to work to offer the best possible solutions in the event of an accident. Our recent innovations include advanced intelligent transport systems and an application that automatically detects irregular situations in tunnels. • • EIn Chile, the fleet of emergency vehicles has been modernized with the new incorporation of electric motorcycles for paramedic personnel. In Argentina, it has been reached an agreement with the ambulance service provider to obtain data of each medical assistance given: time delay data and injury category (severity). This way, the Quality area produces statistical control charts, analyzes cases that are outside the control limits and takes improvement actions. 78 INTEGRATED ANNUAL REPORT ROAD SAFETY 79 SAFER USERS At Abertis, we not only focus on infrastructures, but also dedicate a special effort to our customers through studies and observatories to assess their driving habits with the goal to knowing them better, as well as through safe driving awareness campaigns. Using a similar methodology, observations of toll road drivers’ behavior are made through detailed observation and analysis in those sections of the network that, due to their characteristics, allow us to analyze behaviors and draw general conclusions. They focus on specific analysis factors such as speed, safety distances, lane occupation, use of the turn signal or use of the telephone behind the wheel. DRIVING OBSERVATORY In 2017, the Sanef Driving Observatory became internationalized. Thus, Autopistas (Spain), Arteris (Brazil), VíasChile (Chile), Metropistas (Puerto Rico) and Argentina (Ausol and GCO) have conducted Driving Observations in their respective territories. By 2018, the Abertis Global Observatory will be launched, which will allow us to understand the global trends accross the world and the specific characteristics in each of our markets, with the aim of applying this knowledge to better adjust our awareness campaigns. The creation in Spain of an Observatory focusing on heavy vehicles is also planned for 2018. MAIN AWARENESS CAMPAIGNS DEVELOPED IN 2017 Autopistas • Behind the barrier campaign: Communication plan and distribution of road safety kits, including the necessary material to deal with emergency situations and increase maximum safety and comfort. • Adventure on the Road: A family day to provide insights into road management and road safety through Autopistas’ mobile application. • Summer playrooms, to favor and foster resting times of families in service areas. Sanef • Speeding campaigns: Vous me voyez? Ralentissez! • Campaigns against sleepiness. • Alternatives to fines: actions whereby fines in case of violation are replaced by road safety training. • Instagram campaign to favor periodic rests: #OnPoseporlaPause. Arteris • Celebration of the 4th Road Safety Forum, with a greater international outreach. • Celebration of the 2nd Youth Forum (90 young people between 12 and 17 years old from 4 states). • Awareness campaign on nightlife venues addressed to young people. • Campaign to promote adequate vehicle maintenance, including inspections and sharing. • Projeto Escola (590 schools, more than 287,000 students and more than 16,000 teachers in its 16-year history). • Action Tô de Cinto, Tô Seguro (2 workshops, 11 meetings, with an impact on more than 5,000 people). VíasChile • Campaigns against the stoning of vehicles that use roads; educational talks were held on the toll roads with the highest number of incidents, in addition to educational film activities in communities (COPSA 2017 prize in the Road Safety category). • The School Project, which supports the training of basic education children, reaching 131 schools on the 6 concessionaires. Puerto Rico • No Texteo (I don’t text), against the use of mobile while driving. • Driver’s Education with the Transportation Safety Education Park (PESET) - Road Safety Education Program in an interactive park to raise awareness among children about the importance of prevention. • Other campaigns on the use of safety belts, protective seats or on the observance of speed limits. Argentina • Campaign against alcohol at the wheel: Manejá sin alcohol (Drive without alcohol). • Campaign against the use of technological devices at the wheel. • Awareness campaign on nightlife venues addressed to young people. India • National program on eye exams of heavy vehicle drivers, in collaboration with the Government and various NGOs. • Driver’s education campaigns in schools. 80 INTEGRATED ANNUAL REPORT ROAD SAFETY 81 INTEGRATED ANNUAL REPORTROAD SAFETY8283COMMITMENT TO GLOBAL ROAD SAFETYAbertis’ commitment to road safety goes beyond our toll roads. We understand that it is a global problem, and we want to contribute our know-how and experience to face this challenge, which is already one of the Millennium Development Goals.The Abertis Foundation has also played an important role in raising awareness among society through responsible driving. Its activities seek to accompany citizens throughout their lives, with actions adapted to all ages.Likewise, in 2017 Abertis granted the first Road Safety Awards, which recognize PhD theses or Master’s final projects that focus on road safety aspects. In October, the First International Road Safety Award was also awarded, recognizing the best work among the winners of the national prizes in this category of each academic Chair (Brazil, Chile, Spain, France and Puerto Rico).UNICEF and Abertis, together for child road safety In October, Abertis and UNICEF reached a ground-breaking collaboration agreement to combat the main cause of death in school-age children: road accidents.The alliance focuses on the prevention of road traffic injuries in children and will strengthen and expand UNICEF’s existing work to protect children on the world’s roads and provide a safe route to school.In order to help develop national responses to this global challenge, the program will first be implemented in the Philippines and Jamaica, which, like many low- and middle-income countries, experience a severe health burden from child road traffic injury. This agreement marks the first global corporate contribution to UNICEF programs to prevent road traffic injuries in children. It is the largest agreement on road safety focusing on children.Goal: Safe Journey to SchoolUS$3 Mn contributed between 2017-2019Countries: The Philippines and Jamaica with plans to extend to other countries soon.For more information on the Foundation and the Abertis Academic Chairs see the “Contribution to the Community” section.EIn 2017 the Group has intensified its work with other institutions with the purpose of sharing its experience and knowledge for the preparation of studies on road safety. This is the case of the webinar organized with the International Road Federation on “Forgiving Roads.” In addition, it collaborates with the International Transportation Forum and companies from the sector in the report “Safety and Security on the road to automated transport”, to define the policies that must regulate road safety and digital security before the challenges of the new connected and autonomous mobility.The new Road Safety Center (CESVI) of Autopistas has triggered two more studies on other aspects of road safety:– The analysis of heavy vehicle accidents– Study of free velocities in toll roadsISO AS A TOOL AND FRAMEWORK FOR GLOBAL ROAD SAFETY MANAGEMENTImplemented - ISO 39001Certified - ISO 390010%20%40%60%80%100%Implemented - in houseImplementation under wayNo formal systemROAD SAFETY MANAGEMENT BASED ON REVENUEThe case of Chile stands out where, following Autopista Central’s ISO 39001 certification, a pilot project is being developed for the implementation of an accident prediction and emergency management model according to international standard ISO 22320.The implementation of a formal road safety management system allows the permanent systematization of practices and performance monitoring within a cycle of continuous improvement. Thus, 31.9% of the toll roads business (Spain, Chile and Argentina) has an implemented and / or certified management system according to international standard ISO 39001.07/02 ROAD TECH The intersection between new technologies and road infrastructure. STRATEGIC GOALS Innovate and incorporate the best technological practices Development of products and services with a positive ESG impact More than 10 Road Tech Projects At Abertis, we know that managing the mobility of the future will bring about important challenges but also great opportunities. Through our “Road Tech” strategic program, we work at the crossroads between road infrastructure and new technologies. Our ambition is to become the platform for a safer, smarter and more sustainable mobility. INNOVATIVE ROADS SOLUTIONS FOR SMART ROADS AND INTEGRATED MOBILITY: • • C-Roads Project: a project promoted by the European Union that analyzes the possibilities of intelligent systems in cooperative transport and autonomous driving systems. One of the five projects in Spain is the one carried out in the Mediterranean Corridor in several sections of the AP-7 toll road of Autopistas (Spain). Its main purpose is to check the functioning of C-ITS (Cooperative Intelligent Transport Systems) services on toll roads. Both Autopistas (Spain) and Sanef (France) participate in this project in their own countries. V2I Connectivity (Vehicle to Infrastructure): Autopistas (Spain) works on the development and implementation of advanced communication solutions applied to mobility between vehicle and infrastructure. In Italy, A4 Holding participates in the Smart Road Project, a pilot program to equip 10km of toll road with road units for DSRC (Dedicated short-range communications) communications in the 5.9Ghz frequency for traffic and safety information. • • • Implementation of the Internet of Things (IoT): A4 Holding (Italy) researches the connectivity of different sensors and network technology to monitor the state of the infrastructure. Sanef (France) also works with an IoT sensor system to improve service and optimize operations. In the Reims region, there is the first stretch of toll road that has been fully equipped with connected solutions in the country. The project, which involves the installation of 250 IoT devices, will optimize toll road operation and maitenance equipment routes and improve service quality. Wireless connections: Several Group concessionaires, such as A4Holding or Sanef (France), are deploying Wi-Fi connections across the network. In Brazil, the new Via Paulista will have Wi-Fi coverage throughout its entire length as a communications system between the user and the concessionaire. 84 INTEGRATED ANNUAL REPORT ROAD TECH 85 SOLUTIONS FOR CONNECTED AND AUTONOMOUS VEHICLES: SOLUTIONS FOR ELECTRIC VEHICLES: • • SCOOP@F Project: A project involving the deployment of cooperative in 3,000 intelligent transport systems (C-ITS) vehicles and 2,000 km of roads to exchange information on traffic conditions. As part of this project, Sanef (France) has begun to collaborate with Renault to improve the range of autonomous cars in construction works and toll lane passing zones. Inframix: this is a 3-year research project of the European Commission designed to evaluate the future role of infrastructures during the period of coexistence between conventional and autonomous vehicles, with the aim of making roads faster, safer and socially sustainable for all traffic participants. Autopistas (Spain) has offered a section of the 20-kilometer AP-7 toll road to conduct tests in the three priority components of the project: dynamic lane allocation, construction zones, traffic jams and congestion. • • • Fabric: Sanef (France), together with 22 partners, is studying the feasibility and development of wireless road charging solutions for electric vehicles. We analyze the technological developments required in the pavements, as well as the operational restrictions once implemented. E-way corridor: a project for experimenting with an electric toll road corridor for heavy vehicles. The tests are being carried out in the Seine Valley’s A13 toll road. Abertis’ subsidiary in France, Sanef, participates together with other companies to analyze which of the different solutions - power rail, induction or directly contactless charging- will be more convenient in the future. Corri-door (France): A consortium with multiple agents - EDF, Sodetrel, Renault, Nissan, BMW, Volkswagen, ParisTech and toll road operators, including Sanef - joining forces in the development of the electric vehicle. The project consists in the installation of fast- charging electric devices across the road network in France, making chargers available every 80km that allow users to charge 80% of the battery in 30 minutes. 86 INTEGRATED ANNUAL REPORT ABERTIS MOBILITY SERVICES At Abertis, innovation extends across many areas. On the one hand, through the analysis of how new trends in mobility can impact our traditional business. On the other, through the commitment to a new line of business based on Mobility as a Service (MasS), which shifts the focus of attention of mobility from the mode of transport to the individual who understands mobility as a point-to-point service with new and different needs. In 2017 Abertis Mobility Services, the Group’s multimodal mobility services division, was born as a result of the continuous evolution of new technologies and the search for solutions for safer, more efficient, smarter and more sustainable mobility and the need to reflect a global vision on the subject, with the mission to: dedicated to the search for new businesses within the concession industry, as well as the creation of Innovation Committees consisting of members of the technology departments from across all business units. Abertis Mobility Services was born to respond to these changes and become the pioneering platform for a modern and efficient mobility, focused on different types of customers: On the one hand, governments and road operators (B2A), through the subsidiary Emovis. On the other, vehicle fleet companies (B2B), through Eurotoll, which has joined the Abertis Group 100% in 2017. It is one of the largest issuers of electronic payment devices, or OBUs (On-Board- Unit) in Europe. Lastly, citizens are the direct client of subsidiaries such as Bip & Go and Bip & Drive, the toll payment devices industry. – Manage the Group’s assets related to these services under a single vision and common strategy, in order to build a value proposition aligned with market trends. – Develop business opportunities in the field of mobility services, complementing the Group’s current strategy. – Act as the center of excellence for mobility solutions of the Abertis Group. The creation of the Abertis Mobility Services division responds to the Group’s renewed drive for innovation, by reinforcing the human team FREE-FLOW SYSTEMS Abertis offers advisory services, design, implementation, operation and maintenance of free-flow mobility solutions through Emovis, its technology and services division. The division operates some of the largest electronic toll infrastructures in the world in the United Kingdom (Dartford Crossing - 160,000 vehicles per day), Ireland (M-50 (145,000 vehicles per day), the United States and Canada. It is present in 7 countries: Canada, United States, Puerto Rico, United Kingdom, Ireland, France and Croatia. Eurotoll In 2017, Abertis has formalized the purchase of 100% of Eurotoll. This acquisition seeks to boost the development of a business, that of electronic toll payment management for heavy vehicles, complementary to the toll concessions. Also, this acquisition will improve Abertis’ position before the implementation of the new EETS standard (European Electronic Tolling Service) in several European countries. 8,000 client accounts 150,000 devices in Europe Services across a 55,000 network in 16 countries Offices in France, Belgium, Poland and Hungary Main projects in 2017 • Implementation and management of free-flow electronic toll on the Mersey Bridge (United Kingdom). • The Mersey Gateway Project is one of the largest infrastructure initiatives in the United Kingdom in recent years and is considered one of the 40 major projects of the National Infrastructure Plan and one of the top 100 infrastructure projects in the world (KPMG). Inauguration: October 14 Characteristics: 6-lane bridge over the Mersey River between the towns of Runcorn and Widnes Expected number of vehicles: +65,000 / day Up to 1,000 payment devices issued each day (before its opening) More than 80,000 registered users before its inauguration, 60% online Travel time savings: from 10 min to 1 hour in moments of great affluence Modernization of the electronic toll systems of the A25 toll road, a strategic axis in the Montréal metropolitan region (Canada). The project was executed without affecting the infrastructure’s traffic flow. • After completing the pilot program, Autopistas has finally installed the free-flow lane at La Roca toll plaza on the AP-7 toll road. This technology enables automatic toll payments, without gates and without the need to stop, and traveling at a speed of up to 60 km per hour. • Installation of the first automatic reversible bidirectional electronic gantry in Puerto Rico. The gantry has 10 lanes, two of them reversible that allow changing the direction of the lanes automatically without human intervention and without interrupting traffic, therefore speeding the journeys on the toll road. At present, analyses are under way to transfer this technology to other concessions of the Group. • Road Usage Charge Pilot Project (RUC), a pay-per-use pilot project for road use in the state of Washington (USA). The RUC system establishes payments based on the distance traveled, so that drivers can pay based on how much they use the Washington State road network based on the number of miles travelled. Emovis will be 88 INTEGRATED ANNUAL REPORT ROAD TECH 89 responsible for implementing a back-office system that will store the information in the cloud, as well as providing an on-board device (OBD-II) and app technology that will record user mileage and charge the amount established based on the route taken. This project adds to the pilot project that is currently in operation in the State of Oregon, which counts with the participation of 1,000 volunteers. In addition, Emovis continues to promote its research and development in other technologies such as thermal cameras for calculating the number of vehicles through heat; or “fingerprint” technologies to recognize the shape of the vehicle and facilitate its recognition. INTEROPERABILITY AND PAYMENT DEVICES The Abertis Group works to make road travel a comfortable and easy experience for the client. • Eurotoll continues to increase the interoperability of its Tribox Air device, equipped with DSRC / GNSS / GSM and “over the air” technology, a single device for traveling in France, Spain, Portugal, Austria, Belgium (in 2017), and soon, Germany. • Bip & Go and Bip & Drive, issuers of payment devices owned by Abertis, are also making progress in the interoperability of their devices not only between countries, but also for their use beyond the toll road (shopping centers, gas stations, car parks...). • Bip & Drive has launched in 2017 the first exclusive VíaT for motorcyclists, consisting of a bracelet that incorporates the Vía-T pass, valid for all toll roads in Spain, France and Portugal. • Through Autopase, its issuer of payment devices, VíasChile has also made progress in the field of interoperability among the division’s concessionaries in the country. ADVANCED PAYMENT SYSTEMS The Abertis Group continues to innovate in the field of payment systems and models. • Autopistas has launched the Ronda Gi, a free device designed to facilitate the mobility to enter and exit tolls on the Girona ring road of the AP-7 toll road. With this device, vehicles traveling on this free section do not have to stop at the tolls. In addition, customers who have the device can enjoy a number of advantages and are provided with information to plan their journeys. • VíasChile has installed the “stop and go” electronic payment service on the Libertadores and Rutas del Pacífico toll roads. The device allows vehicles to pass through the tollgate without the need to manually pay the toll. These are the only two inter-urban toll roads in the country featuring these multifunction tolls, which do not require registration or an additional contract and have a single invoice. Los Libertadores toll road figures: Increase in road capacity from 250 vehicles / hour to 650. Average toll drive-through time of less than 6 seconds • • In Argentina, an agreement has been reached with Banco Nación to create a prepaid toll system linked to each user through their mobile phones. Emovis has launched an application that allows paying the toll in the M-50 ring road in Dublin via a mobile application. In France, Sanef is also experimenting with payments via mobile on the A13 toll road, with Autopistas currently studying this as well. As a result of these improvements, the percentage of automatic or electronic toll transactions has increased in the Group up to 76.4% (+2.9pp) of the total, of which 62.9% are electronic toll (+2.8pp) only, with Argentina (+8.6pp) and Italy (+5pp) among the countries that have grown the most. ROAD TECH: A COLLABORATIVE SANDBOX In France, through the Open Innovation project, a start-up company selection process has been opened allowing them to test their innovations in Sanef. Through partnership and collaboration with governments and innovators large and small, the Group seeks to accelerate the evolution of new technologies and develop its full potential in the field of infrastructures. • Open Innovation project: which seeks to create a platform for better mobility, greater security and better service. The Abertis Group has begun to search for new partners to create a hub for companies in the Road Tech ecosystem. Open Innovation 20 selected companies 14 submitted projects 5 projects in deep assessment phase The Group also works on a study on the future of mobility with experts from the World Economic Forum. Road Tech Report, by the Intelligence Economist Unit This year, Abertis has worked with the The Economist Group’s studies division on the Road Tech report: Addressing the challenges of traffic growth, based on detailed interviews with key experts in infrastructures, technologies and transportation from different sectors and geographical areas, to assess the challenges of the mobility of the future. The report was presented this year in cities such as Barcelona, Madrid, Brussels or Dubai and has served to open the debate on how new road technologies (Road Tech) are transforming the transportation sector and are the key to a smarter and more sustainable mobility in the future. www.abertis.com/en/roadtechreport 90 INTEGRATED ANNUAL REPORT ROAD TECH 91 07/03 QUALITY MANAGEMENT AND CUSTOMER FOCUS Our commitment to road safety and new technologies has a clear objective: the satisfaction of our customers. STRATEGIC GOALS Provide quality services (fluidity, comfort and information to the customer) Quality products and services with a positive ESG impact 93% of revenue ISO 9001 QUALITY MANAGEMENT QUALITY MANAGEMENT ACCORDING TO REVENUE Our commitment to road safety and new technologies has a clear objective: the satisfaction of our customers. All our initiatives have in our customers our raison d’être. Our customer focus drives us to work on the quality management of our roads through different lines of action: road safety, information security, and obtaining and maintaining international certificates that back our management performance. The Group is currently working on the definition of a new White Paper on the Quality Management System that seeks to unify all of the Group’s quality-related policies and standardize the processes of each business unit to create a common vision into quality management throughout the entire Group. 92.6% of the revenue has a quality management system implemented and/or certified according to the ISO 9001 international standard. This percentage includes all activities except those developed in India. In the case of Chile, the system has been implemented in Autopista Central, which represents more than 50% of the business’ turnover of the activity in the country; in the rest of the roads, it is in the process of being implemented. In some cases such as Puerto Rico (Metropistas) and Argentina (GCO), the certification was renewed during the course of 2017 based on the most recent version of the standard (2015). Likewise, the activities in Spain have a specific information security management system based on the international standard ISO 27001. 0% 20% 40% 60% 80% 100% Implemented - ISO 9001 Certified - ISO 9001 No formal system Implementation under way CUSTOMER QUALITY SURVEYS Satisfaction surveys are conducted periodically for both general and specific users of the infrastructures. In addition to the general surveys, RESULT OF DIFFERENT CUSTOMER SATISFACTION SURVEYS CONDUCTED AMONG CUSTOMERS (SCALE FROM 1 TO 10) Spain France Brazil Italy Chile 2016 2017 6.9 8 8 7.3 6.5 6.7 7.9 8.2 7.2 7.5 Puerto Rico 7.6 (bi-annual) 92 INTEGRATED ANNUAL REPORT QUALITY MANAGEMENT AND CUSTOMER FOCUS 93 • In 2017 Autopistas presented the “Customer’s Voice”, which monitors customer satisfaction in service areas by conducting surveys using QR codes in customers’ restaurant sales receipts. Progress was also made in obtaining a customer satisfaction index and a recommendation index or NPS (Net Promoter Score). The results obtained will allow identifying the strengths that must be preserved and analyze opportunities for improvement. • • In turn, Sanef (France) ranked first in the Customer Quality survey conducted by the Ministry of Environment, Energy and Sea in 2017. In addition to the general surveys, in 2017 Argentina has carried out a specific exercise to measure the level of satisfaction among tow-truck users. In 2017, 2.1 million queries, complaints and suggestions were received, of which almost 100% have been resolved. Brazil, Chile and Argentina are the countries that concentrate the highest volume of communications received. EVOLUTION OF THE TOTAL NUMBER OF QUERIES, COMPLAINTS AND SUGGESTIONS RECEIVED 2017 2016 2015 0 500,000 1.000,000 1,500,000 2,000,000 2,500,000 Brazil France Spain Chile Argentina CUSTOMER COMMUNICATIONS In 2017 the use of information channels has intnsified by improving existing ones and creating new ones by leveraging social networks. The goal is to consolidate an ecosystem of relationships and dialogue with customers and citizens. INTERNET • A4 Holding (Italy) and Eurotoll have launched a new website in 2017, with renewed contents and services. • Autopistas’ new blog (blog.autopistas.com), a content space on topics related to road safety and the driving industry, offering reports, driving tips, industry-related articles, updated information and publications related to the results of studies from the Road Safety Center (CESVI) in Autopistas. TV AND RADIO • A4 Holding (Italy) opens its operations center every week to a local television team (Brescia, Verona, Vicenza and Padua) for the recording of the “Qui Centro Operativo” program, which reports on everything that can help ensure the fluidity and road safety of drivers during their journey on the A-4 toll road (traffic forecasts, work schedules, incidents due to anticipated events, etc.). • Radio Sanef reinforced its content this summer, constantly informing about the summer vacation campaign. In 2017, Sanef 107.7 was chosen for the second year in a row as the best thematic radio of the year in the Salon de la Radio. ON-SITE • In Brazil, the use of Artificial Intelligence is currently under study for the customer service chat. • VíasChile reinforced its mobile customer service offices to facilitate electronic payment in areas located far from urban centers. SOCIAL MEDIA • Use of Instagram to approach the user and promote responsible driving through the hashtags #onposepourlapause (Sanef) and #ContigoHastaDondeQuierasllegar (Autopistas). • On the occasion of the summer vacation campaign, Arteris offered a live broadcast through its Twitter account of surveillance camera images of the Litoral Sul. • Autopistas has created its customer service Twitter account and activated its corporate profile in LinkedIn. • Autopistas: open days at the control and customer service centers in Segovia and Logroño including an educational session on road safety for children. ACCIONISTAS 94 INTEGRATED ANNUAL REPORT QUALITY MANAGEMENT AND CUSTOMER FOCUS 95 VALUE CREATION08SHAREHOLDERS FIGURES AND RESULTSFINANCIAL MANAGEMENTSHAREHOLDER RETRIBUTIONSOCIETY TAX CONTRIBUTIONCONTRIBUTION TO THE ENVIRONMENTCONTRIBUTION TO THE COMMUNITY SUPPLIER MANAGEMENT AND SUPPLY CHAINHUMAN TEAM COMMITTED TO TALENTPROFESSIONAL DEVELOPMENTSAFETY AND HEALTHSHAREHOLDERS. FIGURES AND RESULTS 9908/01 FIGURES AND RESULTS Revenue Ebitda€5,323 Mn +13%€3,480 Mn +14% Net profit€897 Mn +13%Ebit€2,058 Mn +10%STRATEGIC GOALS Grow in new concessions profitably and with financial discipline Promote agreements with Governments to increase the average life and optimize tariffs Increase revenues and efficiently manage expenses, making recurrent cash flow growSHAREHOLDERSMAIN FIGURES In 2017, the positive evolution of traffic on the Group’s toll roads continued, which continues to grow at a good pace in the company’s main markets. The consistent levels of activity achieved in Spain, Chile and Italy stand out, as well as the continued growth in France and the change of trend in Brazil. India, a market that has joined the Group in 2017, has also experienced a significant growth in traffic. The negative evolution of the activity in Puerto Rico is mainly due to the impact of Hurricane Maria last September. Traffic 2017 Spain France Italy Brazil Chile Puerto Rico Argentina India ADT 20,876 24,836 64,589 18,255 26,810 64,645 82,825 19,613 Total Abertis 24,368 Var. ADT +3.9% +1.5% +3.2% +3.2% +4.0% -2.9% -1.7% +9.6% +2.5% PROFIT AND LOSS ACCOUNT* JANUARY - DECEMBER 2017 (€Mn) Operating revenue Operating expenses Ebitda Ebitda (like-for-like) Depreciation and amortization of revalued assets Operating result (Ebit) Net financial result Shares of profits (losses) of associates Income tax Discontinued operations Minority interests Net profit Net profit (like-for-like) Dec. 2017 Dec. 2016 5,323 -1,843 3,480 -1,422 2,058 -786 19 -365 72 -102 897 4,707 -1,642 3,065 -1,192 1,872 -611 30 -287 7 -216 796 Var. 13% 14% 7% 10% 13% 24% * 2016 consolidated profit and loss account restated considering the impact of the classification of the discontinued activities pursuant to NIF 5. REVENUES Revenues have increased 13% up to 5,323 million euros, mainly due to consolidation from the global integration of A4 and the two toll roads in India, the positive evolution of the activity and the favorable impact of the exchange rate of the Brazilian real and the Chilean peso. Seventy-four percent of Abertis’ revenues come from outside Spain. The French market has consolidated as the largest for the Group (32%), followed by Spain (26%). REVENUE 8% ROW 26% SPAIN 10% CHILE 16% BRAZIL 8% ITALY 32% FRANCE Revenue 2017 Spain France Italy Brazil Chile Puerto Rico Argentina Rest of the world (ROW) Holding €Mn 1,362 1,690 423 851 514 131 227 122 3 Total Abertis 5,323 100 INTEGRATED ANNUAL REPORT SHAREHOLDERS. FIGURES AND RESULTS 101 EBITDA The gross operating margin (EBITDA) reached 3,480 million euros (+14%), although when discounting perimeter and other non-recurrent impacts, the like-for-like EBITDA grew 7% more than in the previous year. The result of operations (EBIT) of the year grew 9.9%, 9.2% in like-for- like terms. Likewise, the results of the Group have been favored by the implementation of a series of measures to improve efficiency and optimize operating expenses, which the Group will continue to focus on in the coming years. Ebitda 2017 Spain France Italy Brazil Chile Puerto Rico Argentina Rest of the world (ROW) Holding €Mn 1,112 1,161 215 429 402 92 71 35 -36 Total Abertis 3,480 EBITDA 6% ROW 12% CHILE 12% BRAZIL 6% ITALY 31% SPAIN 33% FRANCE 102 INTEGRATED ANNUAL REPORT SHAREHOLDERS. FIGURES AND RESULTS 103 FINANCIAL RESULT SHARE OF PROFITS FROM ASSOCIATES The net financial result amounts to -786 million euros, of which -677 million euros correspond to the financial cost of the debt and the rest amounted to -107 million euros. The contribution of registered companies using the equity method amounts to 19 million euros. BALANCE STATEMENT Total assets as of December 31, 2017 amounted to 29,831 million euros, representing a reduction of 4.3% compared to the close of 2016, mainly due to the impact of the purchase of minority interests of HIT and A4 Holding and the impact of the depreciation of the Brazilian real, the Chilean peso and the US dollar. On the other hand, consolidated net equity reached 4,777 million euros, 30.8% less than at the end of 2016, due to the impact of the purchase of minority stakes and negative conversion differences, among others. INCOME TAX The income tax expense amounts to 365 million euros, with the following tax rates in the main countries where Abertis operates: Spain, 25%; France, 39.4% (compared to a prior of 34.4%); Italy, 27.9% (compared to a prior 31.4%); Brazil, 34% and Chile, 25.5% (compared to a prior of 24%). RESULT The consolidated result for the year 2017 attributable to the shareholders has reached 897 million euros, which represents an increase with respect to 2016 of 13% and 24% in like-for-like terms. CASH FLOW During 2017 Abertis generated a gross cash flow (before investments and dividend payments) of 2.073 million euros. Discretionary cash flow was 1,987 million euros, which in like-for-like terms is 11.5% higher than in 2016. The cash flow of the Group is enough to support the investment plan that the company is undertaking to improve the infrastructure of its assets and also allows the company to maintain one of its main strategic pillars: shareholder remuneration. BALANCE STATEMENT JANUARY-DECEMBER 2017 (€Mn) ASSETS LIABILITIES Dec. 2017 Dec. 2016 Tangible and intangible assets 20,128 22,506 Financial fixed assets Current assets Cash flow Assets held for sale Total assets Net equity 4,075 1,373 2,458 1,796 4,281 1,819 2,529 50 29,831 31,186 47% OTHER ASSETS 29,831 €Mn ASSETS 4,777 6,901 LIABILITIES Non-current financial debt 16,217 15,210 Non-current liabilities 47% OTHER ASSETS Current financial debt Current liabilities 29,831 €Mn Liabilities held for sale 4,988 1,608 1,613 53% Total liabilities 29,831 31,186 628 FIXED AND INTANGIBLE 44 ASSETS (WITHOUT GOODWILL) 5,348 1,695 1,988 84% CURRENT AND NON-CURRENT LIABILITIES 29,831 €Mn 16% NET EQUITY 84% CURRENT AND NON-CURRENT LIABILITIES 29,831 €Mn 53% FIXED AND INTANGIBLE ASSETS (WITHOUT GOODWILL) 16% NET EQUITY 104 INTEGRATED ANNUAL REPORT SHAREHOLDERS. FIGURES AND RESULTS 105 INVESTMENTS MAIN INVESTMENTS IN 2017 Inorganic growth: • Acquisition of an additional 47.45% in Holding d’Infraestructures de Transport (HIT), the company that controls 100% of Sanef, reaching 100% of its control (2,214 million euros). • • • The closing of the purchase of 100% of two toll roads in India (133 million euros). The acquisition of an additional 32.16% of A4 Holding (179 million euros). The awarding of the Via Paulista 30-year concession in Brazil (396 million euros). Expansion of road capacity: • • • In Brazil, Arteris continues to work on the expansion and improvement of the roads. Worth highlighting in 2017 are the pavement recovery works, the completion of the duplication of the Serra do Cafezal in Régis Bittencourt, the duplication of lanes in Fluminense and the works of the and the works of the Florianópolis ring road in Litoral Sul (458 million euros). In France, Sanef has continued working on the improvement of its network as part of the agreement reached in 2016 with the French Government (Plan Relance), highlighting the construction of a third structure in the Guerville viaduct, among others (151 million euros). In Chile, the construction of the new Maipo bridge in Autopista Central and the construction of a new section in Autopista Los Andes (80 million euros) stand out. INORGANIC EXPANSIONS 179 PURCHASE OF A4 HOLDING MINORITY STAKES 135 INDIA ASSETS + ROW 396 VIA PAULISTA 2,924 €Mn 2,214 PURCHASE OF HIT MINORITY STAKES 2017 Investments Operations Expansions Spain France Italy Brazil Chile Rest of the world (ROW) Holding 12 39 1 24 4 5 1 6 151 15 458 80 9 0 Inorganic Expansions Total 0 19 2,214 2,404 179 396 0 135 0 195 878 83 148 1 Total Abertis 85 719 2,924 3,728 106 INTEGRATED ANNUAL REPORT 08/02 FINANCIAL MANAGEMENT Abertis has succeeded in reducing the average cost of consolidated debt down to 4% in 2017. KEY FINANCIAL DEALS IN 2017 STRATEGIC GOAL Achieve a healty and efficient financial structure Refinancing operations Over €10,000 Mn 2015-2017 • Abertis has signed loan agreements with credit institutions for a total value of 2,140 million euros, and with maturities between 2018 and 2022. December 31, 2017) with two tranches, the first one with maturity in October 2022 and a CDI 12m + 1,60% coupon and the second one with maturity in 2024 and a IPCA 12m + 5.09% coupon. • Throughout the year, promissory notes with quarterly maturities were issued, with a promissory note amounting to 100 million euros due in January 2018 remaining at the end of 2017. • Arteris closed also an issue of bonds for 72 million Brazilian reais (approximately 18 million euros) with maturity in January 2018 and a CDI 12m + 1.80% coupon. • HIT, a French subsidiary of Abertis, has issued bonds worth 1,000 million euros: 500 million euros with maturity in 2023, and 500 million euros with maturity in 2027. • Vías Chile has closed the voluntary redemption of bonds of Autopista Los Libertadores for an amount of 120 million euros and of Rutas del Pacífico for an amount of 190 million euros (in the latter case the transaction was completed in January 2018). • HIT has reepurchased bonds for 140 million euros from a previous issue with maturity in October 2021, at an interest rate of 4.875%. • A4 Holding has repurchsed bonds for 200 million euros from an issue with maturity in 2020. • Arteris completed the issuance of new bonds for 1,615 million Brazilian reais (approximately 407 million euros at the close of With these operations, the Group extends the profile of debt maturities and highlights the efficiency in the active management of the company’s balance sheet. It also strengthens its ability to take advantage of the opportunities offered by the credit market to obtain attractive conditions and continues to generate value for its shareholders. Sustainable credit Abertis has signed its first sustainable credit with ING for a total of 100 million euros at 3 years with the possibility to extend maturity by an additional year. This loan is characterized by the fact that its cost is indexed to the company’s environmental, social and corporate governance (ESG) performance, such that the cost is reduced if there is a positive evolution in these areas. The measurement of the sustainability rating applicable to the credit subscribed with ING is made by the rating agency Sustainalytics, an independent leader in ESG analysis and assessments, which supports investors around the world in the development and implementation of responsible investment strategies. 108 INTEGRATED ANNUAL REPORT SHAREHOLDERS. FINANCIAL MANAGEMENT 109 FINANCIAL STRUCTURE Following the policies defined by the Board of Directors, the financial structure of the Abertis Group seeks to limit the risks to which it is exposed due to the nature of the markets in which it operates. roads in India and the operating and expansion investments made in the year. Abertis maintains a high percentage of debt at a fixed rate or at a rate fixed through hedging, minimizing to a large extent the possible effects of stress in the credit market. Abertis’ net financial debt increased by 990 million euros in 2017, mainly due to the impact of the acquisitions of minority interests in Italy and France, the payment of dividends, the purchase of the toll Net debt Net debt/Ebitda Debt maturity Fixed debt Average cost of consolidated debt 2017 2016 €15,367 Mn €14,377 Mn 4.4x 4.7x 5.3 years 5.9 years 79% 4,0% 90% 4,8% CREDIT RATING Agency Fitch Ratings Long term Short term Standard & Poor’s Date of evaluation Rating Outlook 25/10/2017 25/10/2017 BBB+ F2 Rating Watch Negative Rating Watch Negative Long term 24/10/2017 BBB Developing Outlook 110 INTEGRATED ANNUAL REPORT SHAREHOLDERS. FINANCIAL MANAGEMENT 111 Less than 1 yearBetween 1 and 3 yearsBetween 3 and 5 yearsBetween 5 and 10 yearsMore than 10 years0%10%20%30%40%50%60%70%80%90%100%DEBT MATURITY9%19%25%42%5%08/03 SHAREHOLDER REMUNERATION Abertis has increased its shareholder remuneration by 10% in 2017. STRATEGIC GOAL Sustainable growth in share value and remuneration Annual yield +16% 2013-2017 Accrued dividends €792 Mn 2017 Market CAGR +10% 2009-2017 EVOLUTION OF ABERTIS SHARE IN 2017 23/01 Accelerated placement of 2.5% of OHL in Abertis 03/04 GSM 2017 24/04 Abertis obtains 100% of HIT 19/06 GCO extension process begins 21/08 Begin Ausol extension process 29/09 Bond repurchase by A4 Holding 17/11 Repurchase of HIT bonds and issuance of two new bonds 21/03 TSJM ruling on the accounting treatment of AP-7 03/05 Agreement to reach 85.36% of A4 Holding 15/05 Atlantia announces takeover bid on Abertis 26/04 Arteris wins Via Paulista concession 20 18 16 14 1 2 10 8 1 2,000 +39.5% 11,500 18/10 Hochtief announces takeover bid on Abertis 11,000 10,500 09/10 CNMV authorizes takeover bid by Atlantia 10,000 +7.4% 9,500 9,000 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT N OV D EC Abertis share price IBEX 35 index Closing price Maximum price Minimum price Number of shares Capitalization Annual yield 2013-2017* Treasury stock 2017 €18.55 / share €19.06 €13.24 990,381,308 €18,372Mn +16% 8% * Includes stock appreciation, bonus issues and dividend yield for shareholders who purchased on December 31, 2012 and have not sold their shares until December 31, 2017 112 INTEGRATED ANNUAL REPORT SHAREHOLDERS. SHAREHOLDER REMUNERATION 113 DIVIDEND On April 3, 2017, the General Shareholders’ Meeting of Abertis agreed to the distribution of a second and final payment of the 2016 dividend charged against available voluntary reserves of 0.37 euros gross per share, which became effective in April of 2017. In this way, the total 2016 dividend was 0.73 gross euros per share, representing 723 million euros and implies an increase of 10% over the total distributed amount against the results of the previous year. The aforementioned Shareholders’ Meeting agreed to offer shareholders the possibility to choose between receiving the second payment of the 2016 dividend of 0.37 euros gross per share in cash or through the awarding of shares of Abertis Infraestructuras, S.A. from shares held by the Company. 15.3% of the share capital of Abertis Infraestructuras, S.A. has opted to collect said dividend in the Company’s own shares, which has entailed the delivery of 2.9 million treasury shares representing 0.29% of the share capital of Abertis Infraestructuras, S.A. The Board of Directors has agreed to propose to the Ordinary General Shareholders’ Meeting the distribution of a second and final dividend payment for 2017 of 0.40 euros gross per share. With all of the above, considering the first dividend payment already distributed of also 0.40 €/ share, the total 2017 dividend will amount to 792.3 million euros, and represents an increase of 10% over the total distributed amount in 2016. Thus, in compliance with the commitment established in the 2015-2017 Strategic Plan, shareholder remuneration has experienced an average increase of 10% per year in the period (specifically 10% in 2017, 11% in 2016 and 10% in 2015). SHAREHOLDER STRUCTURE* 114 INTEGRATED ANNUAL REPORT SHAREHOLDERS. SHAREHOLDER REMUNERATION 115 * As per the notification submitted to Abertis in December 2017 and December 2016: Participation through Criteria Caixa, S.A.U. of 15.07% and Inversiones Autopistas, S.A. of 6.07% and under a syndication agreement with G3T, S.L. and BCN Godia, S.L.U. of 0.26% and 0.15% respectively (15.08% through Criteria Caixa, S.A.U. and 7.17% through Inversiones Autopistas, S.A., as of the close of 2016). 2016ORDINARY ACCRUED DIVIDEND €Mn20177237922016DIVIDEND PER SHARE €20170.730.80+10%+10%2016ORDINARY ACCRUED DIVIDEND €Mn20177237922016DIVIDEND PER SHARE €20170.730.80+10%+10%CAGR: +8%1st payment2nd payment200820092010201120122013201420152016201740212%5%5%15%5%5%5%10%11%10%422443512538565593651723792FREE FLOAT78.45%CRITERIA CAIXA, SAU21.55%SOCIETY. TAX CONTRIBUTION117SOCIETY08/04 TAX CONTRIBUTIONAbertis’ tax policy is based on transparency and the responsible and cautious application of tax laws. The Group is committed to its duty to pay taxes to contribute to public finances, which provide the essential public services for the progress and socio-economic development of the countries in which it operates.Since 2014, Abertis voluntarily adheres to the Code of Good Tax Practices, which contains a set of recommendations agreed between the Spanish Agencia Tributaria (Tax Agency) and the Foro de Grandes Empresas (Large Company Forum). The company complies with its principles of performance.Following the principles that have guided its actions since its incorporation, Abertis avoids the use of opaque structures, processes or systems with fiscal purposes that seek to shift profits to low tax jurisdictions (tax havens) or prevent tax authorities from identifying the end party responsible for the activities or the ultimate owner of the goods or rights involved. Additionally, the Board of Directors is notified on an on-going basis about the tax policies being applied.TAX CONTRIBUTION 2017Country*Total contribution (€Mn)France867Spain237Argentina216Brazil215Chile141Italy132Other**24Total1,832* Changes in perimeter with respect to 2016: Italy includes Grupo A4 Holding for all of 2017 and section Other includes Trichy Tollway Pvt Ltd and Jadcherla Expressways Pvt Ltd concessionaries of India since the date of acquisition (2/3/17).** Includes United Kingdom, The Netherlands, Puerto Rico, Mexico and India, among others.€1,832 Mn €219,339 per kilometer of directly managed toll roadTotal tax contributionTax contributionTAX CONTRIBUTION IN 2017 1,021 of which have corresponded to taxes paid and taxes collected respectively. In this sense, the Abertis Group includes all dependant companies that are consolidated by the global integration method10. Abertis makes quantifiable economic and social contributions through the payment of public taxes in the different countries in which it operates. Said payments imply a strong effort in order to comply with all formal notification and collaboration obligations before the Spanish Tax Agency as well as with all relevant responsibilities. Following OECD cash basis methodology, the total tax contribution of the Abertis Group in 2017 amounted to 1,832 million euros, 811 and In 2017, for every 100 euros of Abertis’ revenue, 34 euros are destined to the payment of taxes. Specifically, 15 euros go to the payment of taxes paid and 19 euros go to the payment of taxes collected. Likewise, the tax contribution per kilometer of toll roads directly managed by Abertis amounts to 219,339 euros, of which 94,053 euros and 125,286 euros correspond to taxes paid and taxes collected respectively. BREAKDOWN OF TOTAL TAX CONTRIBUTION 08/05 CONTRIBUTION TO THE ENVIRONMENT Abertis applies preventive measures to preserve the environment and reduce pollution, giving shape to a more efficient, responsible and sustainable operations model. STRATEGIC GOALS Reduce the carbon footprint Innovation based on circular economy criteria of the activity’s value chain Develop products and services with positive environmental and social criteria Enhance and preserve the natural capital -13% Emissions of CO2e (scopes 1 and 2) (Tn/€Mn of revenue) €23 Mn +3% Destined to the environment Taxes paid are those that represent an effective cost for the company (payments of Income Tax, local taxes, indirect taxes on goods and services and social security for the business quota). Taxes collected are those that do not affect the result but are collected by Abertis on behalf of the tax administration or are paid on behalf of other taxpayers (value added tax, withholdings and social security for the worker’s contribution). * Includes taxes paid by the Hispasat Group that amount to €58 Mn (€43 Mn of taxes paid and €15 Mn of taxes collected). *Perimeters 2016 and 2017 non comparable. 118 INTEGRATED ANNUAL REPORT SOCIETY. CONTRIBUTION TO THE ENVIRONMENT 119 1,021€Mn€OTHER TAXES€86MnVAT AND OTHER INDIRECT TAXES€822MnEMPLOYMENT RELATED TAXES€113Mn811MnTAXES AND OTHER€115Mn €315MnINDIRECTTAXESSOCIAL SECURITY€137MnINCOME TAX€244MnTAXES COLLECTEDTAXES PAID1,832€MnCHILE8%ITALY7%ARGENTINA12%12%BRAZILFRANCE47%OTHER1%SPAIN13%1,021€Mn€OTHER TAXES€86MnVAT AND OTHER INDIRECT TAXES€822MnEMPLOYMENT RELATED TAXES€113Mn811MnTAXES AND OTHER€115Mn €315MnINDIRECTTAXESSOCIAL SECURITY€137MnINCOME TAX€244MnTAXES COLLECTEDTAXES PAID INTEGRATED ANNUAL REPORTSOCIETY. CONTRIBUTION TO THE ENVIRONMENT120121The Abertis Group applies a set of measures aimed at minimizing environmental impact and which start from the design phase of the infrastructure itself, seeking a balance between sustainability and economic and technical viability. This allows defining and implementing preventive measures to preserve the environment and reduce pollution, giving shape to a more efficient, responsible and sustainable operations model.79.6% of revenue has an environmental management system implemented and/or certified according to the ISO 14001 international standard.Implemented - ISO 14001Certified - ISO 140010%20%40%60%80%100%No formal systemImplementation under wayPUERTO RICOCHILEBRAZIL12%33.6%ARGENTINA13.4%SPAIN17.5%FRANCE18.3%1.8%CO2e EMISSIONS (SCOPES 1 AND 2) BY COUNTRYITALY1.5%INDIA1.9%CLIMATE CHANGEAbertis has formally identified the risks and opportunities arising from climate change and is currently in the process of conducting an economic assessment of the former as part of its corporate risk management framework and specific projects developed in this area.The emissions derived from the use of the infrastructures, as well as the intensity related to liquid fuels and materials and energy used during maintenance and construction are some of the main sources of emissions related to the activity.Annually, Abertis takes part in the climate change performance and management analysis conducted by the Carbon Disclosure Project, through the preparation of a detailed report on the management of risks and opportunities as well as details of its carbon footprint.The calculation of the footprint, expressed in tons of CO2e, is a fundamental element for Abertis to determine which priority areas and processes the organization must focus on that require action, as well as to evaluate the advances taking place in response to actions implemented in the field of greenhouse gas emissions reduction. In 2017, scope 1 and 2 CO2e emissions were reduced by 13% relative to revenue with respect to 2016 in a non-constant perimeter. If an estimate of the scope 1 and 2 CO2e emissions is included from the new additions (India and Italy) in the year 2016, the evolution would represent an increase of 3.5%. Total emissions in relation to revenue have increased 16.6%.* * The emissions included in the calculation of the carbon footprint are the following: scope 1 emissions: emissions derived from the direct consumption of fuels and refrigerant gases; scope 2 emissions: indirect emissions derived from electricity consumption; scope 3 emissions: other indirect emissions derived from the suppliers of the organization and from the use of the products and services provided by the organization (vehicles traveling on the included toll roads).Of the total emissions of the Group in 2017, 86.3% of the contaminating emissions come from the vehicles that transit through its toll road network. In this sense, Abertis works to facilitate the circulation and implementation of more ecological, quieter and safer vehicles on its roads (see Road Tech section).Likewise, with regard to the management of scope 1 and 2 emissions, different actions have been developed focused on contributing to the established overall emissions reduction target.• In 2017, Autopistas obtained the environmental quality certification granted by the Generalitat de Catalunya, which recognizes Aucat’s and Invicat’s fleet of environmentally-friendly vehicles that contribute to ecoefficiency and sustainability. This action was developed as part of the deployment of the sustainable mobility plan formalized during the year.• Among the measures implemented by Autopistas through its Electrical Maintenance Master Plan are the regulation of the lighting flux, the optimization of outdoor lighting or the renovation and installation of LED technology lamps.• Photovoltaic panels, recycled material collection systems and a waste segregation center have been installed in Brazil.CIRCULAR ECONOMYAlthough most wastewater generated during the activities is similar to domestic wastewater, appropriate measures are available to ensure an adequate management thereof in the case of other types of wastewater, including containment ponds and other treatment and purification techniques. Worth highlighting is the treatment of wastewater through the use of roots and the installation of rainwater collection tanks in Brazil with the aim of optimizing water consumption and promoting actions related to circular production processes.• Sanef (France) advances in it aquifer protection program which, as part of the Relance Plan, will entail a total investment of 55 million euros. In 2017, work has been carried out on the construction of water collection and treatment ponds in 12 locations along the A4 and A1 toll roads, with an investment of 25 million euros.• In Autopista Los Libertadores (VíasChile), where water for irrigation is scarce, a system of reuse of treated water was implemented, allowing to irrigate the landscaping areas of the urban section of this route. This project allowed increasing the availability of water in the sector, reduce transportation time and costs and reduce emissions from transportation.Generated waste346,046 TnNon-hazardous wasteConstruction waste99.7% 77.7% Adequate waste management is integrated into daily operations. Road maintenance is another way in which the environmental footprint can be reduced, often through R&D. During 2017, work has continued on the development of joint projects with the goal of identifying the feasibility of reusing construction waste for the conservation of pavements.Likewise, possible collaboration agreements are being explored with different stakeholders for the reuse of the waste generated by the activity, including the potential energy recovery thereof and specific containers have been installed for the recovery of this type of waste during construction work.Hazardous wasteOrdinary wet sludge0.3%49.7% BIODIVERSITY AND NATURAL CAPITAL 1,418.3 km of Abertis’ toll roads are located in zones of special biodiversity interest, mainly in France, Brazil, Spain and Italy. • In India, the Government is collaborating in the Mission for a clean India campaign, which aims to promote hygiene standards to ensure cleaner roads. ENVIRONMENTAL IMPACT PREVENTION MEASURES (BIODIVERSITY) – emergency plans – conservation and cleaning plans – environmental monitoring programs – environmental liability recovery programs – awareness and education campaigns – installation of wildlife crossings and enclosures – compensatory planting • Awareness-raising is another of the Group’s tools to reduce its environmental footprint. In Brazil, through Arteris, the Group conducts awareness campaigns during the holidays as well as other campaigns on the occasion of Water Day, Environment Day, Tree Day and others. Likewise, Spain is also committed to raising awareness among partners and collaborating companies by establishing requirements for better environmental practices. Similarly, France has continued with awareness actions related to the biodiversity of the environment in the vicinity of roads. • In addition, environmental emergency kits have been installed in construction sites in Brazil, and specific supervisory measures have been carried out of environmental matters affecting construction work, together with specific wildlife studies. ENVIRONMENTAL IMPACT PREVENTION MEASURES (NOISE) – installation of acoustic screens – measurement of the acoustic impact by means of control points During 2017, acoustic impact studies were conducted in a total of 2,511 kilometers in mostly Spain, Brazil, Chile and Italy, which represents 31% of the total kilometers managed. • France has worked on the isolation of the facades of Roberval Castle (along the A1 toll road), by updating the strategic noise maps (in the same way as Spain) and noise prevention plans for the environment and the noise observatory. • Argentina works both on the use of noise reducing asphalt, as well as on the deployment of reforestation plans. For more information please see the Annex to this Report. 122 INTEGRATED ANNUAL REPORT SOCIETY. CONTRIBUTION TO THE ENVIRONMENT 123 08/06 CONTRIBUTION TO THE COMMUNITY Abertis collaborates with the community through projects relating to road safety, the environment, culture and social accessibility. STRATEGIC GOAL Generate positive synergies with local communities DIRECT RELATIONSHIP WITH THE COMMUNITY 315 €6.3 Mn +5% Initiatives developed in 2017 Destined to social initiatives and sponsorships During 2017, the companies of the Group in the different countries have participated in a total of 82 associations. Also worth noting is the continuation of the 1% cultural projects in Spain and the Rouanette Law in Brazil. Abertis actively participates in the local communities in which it operates through different mechanisms, formalization of communication channels and the establishment of direct relationships, as well as through involvement in industry and generalist associations and coordinating and executing sponsorship and social action projects. including the • Red Viva Program (Chile): Prior to the development of new interventions due to capacity expansion construction work, a mapping of stakeholder groups that are linked to the territory and the local community was carried out, in which their expectations and needs that are to be incorporated into the design and execution of the works are identified. The Red Viva program coordinates the actions geared at building links with the territory, formalizing a systematic direct relationship with the local community and generating positive social impacts of the operations. Once the works are completed and the new infrastructure begins operations, the Red Viva program continues the relationships established in the initial phases. 124 INTEGRATED ANNUAL REPORT SOCIETY. CONTRIBUTION TO THE COMMUNITY 125 Hurricane Relief Aid in Puerto Rico In order to contribute to the recovery efforts following Hurricane Maria in Puerto Rico, Abertis and Goldman Sachs, parties to the Metropistas consortium partners, consortium, have donated US$ 1 million toward aid after the hurricane swept through the island. The donation will be channeled through three non-governmental organizations (NGOs) that have been actively involved in various aspects of post- hurricane relief efforts in Puerto Rico: United for Puerto Rico, the American Red Cross and Team Rubicon, each of which will receive an equal portion of the total. THE ABERTIS FOUNDATION The Abertis Foundation represents institutionally and strategically the organization’s commitment to the environment and the local community, and coordinates the identification of positive synergies in different countries. On an annual basis, it publishes the activities report, which provides details about the actions that have been conducted. The Castellet Castle, the Abertis Foundation’s headquarters, also hosts the headquarters of the UNESCO International Center for Mediterranean Biosphere Reserves (CIURBN), which coordinates a network of 60 reserves in 15 Mediterranean countries with the aim to build bridges for dialogue, cooperation and the exchange of knowledge and experiences. MAIN UNDERTAKINGS IN 2017 Road Safety: • Te queda una vida (“You have one life left”) and “#SumaTuLuz” (Sum up your light): Awareness actions in nightlife areas in Madrid and Catalonia to alert young people about the risks of driving after having consumed alcohol or drugs, or on the dangers of distractions caused by the use of mobile phones. • Cooperante Vial (Road cooperant): a project taking place in Barcelona and Madrid where young people with Down syndrome observe and take notes of the mobility habits around schools and then provide suggestions for improvement. • KanGo!: Third edition of a project that combines road safety with disabilities in Barcelona. • Senior Driver Observatory: A workshop about the subject of driving after 70 held in Madrid in June. Environment: • Italy-Spain collaboration: The Abertis Foundation, together with the Spanish Embassy in Rome and the Royal Academy of Spain in Rome, has presented in Italy its program to promote collaboration between both countries within the framework of UNESCO’s Network of Mediterranean Biosphere Reserves. • Mediterranea 2017: the CIURBN hosted the MEDITERRANEA 2017 convention in September, the first forum for Sustainable Tourism in Mediterranean Biosphere Reserves. ABERTIS ACADEMIC CHAIRS Since 2003, Abertis and the Abertis Foundation have been promoting the creation of different academic chairs in collaboration with renowned universities and national and international academic institutions. Aware of the importance of working with the academic world to ensure social and economic progress, Abertis promotes training, research and the transfer of knowledge between University and Corporations. The first Academic Chair was established in Spain together with the Polytechnic University of Catalonia - BarcelonaTec, and was subsequently followed by France (IFSTTAR-École des Ponts); Puerto Rico (University of Puerto Rico); Chile (Pontificia Universidad Católica de Chile) and Brazil (University of São Paulo). More recently, the Abertis-UPM Chair (Polytechnic University of Madrid) was also created. 1st Abertis Road Safety Award The International Network of Abertis Academic Chairs has granted its first International Road Safety Award in 2017, which recognizes the best work among the winners of the national prizes of each Chair (Brazil, Chile, Spain, France and Puerto Rico). The award went to Dr. Hédi Hamdane, from the Aix-Marseille University (France). In his thesis, the author develops several road safety systems for vehicles to detect pedestrians and thus avoid impact. These systems analyze the trajectory of the vehicle by processing images with sensors; the emergency brake is activated whenever a pedestrian is detected in its path. SOCIAL ACTION AND SPONSORSHIPS 2017 MILESTONES • VíasChile has received the Valor Compartido Award from Sustainability Hub for its project on the scouting and social rehabilitation of imprisoned women. • Arteris continues to promote the Projeto Escola (School Project) in Brazil. In 2017, the project opened to people with disabilities. • Thanks to the collaboration of Grupo Abertis, the Sant Joan de Déu Hospital in Barcelona has added to its new hall (a large 600-square meter space joining the external consultations, child hospitalization and women’s areas) several interactive games related to the human body to provide fun to children, patients and relatives during their waiting times. • Also in Brazil, the Jovens Aprendizes (Young apprentices) project combines volunteering with labor integration. Its aim is to integrate young people living in shelters near the Autopista BR-101 into the work environment of Fluminense. • Demos Project: Sanef has signed an agreement with the Paris Philarmonic to finance the musical education of disadvantaged children. 126 INTEGRATED ANNUAL REPORT SOCIETY. CONTRIBUTION TO THE COMMUNITY 127 CULTURAL SPONSORSHIP • Abertis along with its Foundation and subsidiaries of Grupo Sanef and A4 Holding have sponsored several exhibitions of Pablo Picasso’s artwork in Spain, Italy and France. • A4 Holding has also sponsored the exhibition “Da Caravaggio a Bernini. Capolavori del Seicento italiano nelle Collezioni Reali di Spagna”. • Abertis’ subsidiaries in Argentina, Ausol and GCO, have brought to Buenos Aires unique works from Joan Miró as part of the exhibition “Miró: The experience of watching”, open to the public from October 25 until February 25, 2018 at the Buenos Aires National Museum of Fine Arts. Total investment in social action initiatives and sponsorships in 2017 was 6.3 million euros, for projects of different characteristics according to the Abertis and LBG classification. Methodology from the London Benchmarking Group (LBG), which enables item standardization based on different classifications and provides tools for measuring their impact. 128 INTEGRATED ANNUAL REPORT SOCIETY. CONTRIBUTION TO THE COMMUNITY 129 PERCENTAGE DISTRIBUTION OF CONTRIBUTIONS BY AREA OF ACTIVITY (ABERTIS CLASSIFICATION)PERCENTAGE DISTRIBUTION OF CONTRIBUTIONS BY AREA OF ACTIVITY (LBG CLASSIFICATION)MOBILITY AND ROAD SAFETYCULTURAL ACCESIBILITYPRESERVATION OFTHE ENVIRONMENTTRAINING / RESEARCH7.2%41.4%EDUCATIONSOCIALWELL-BEINGHEALTH7.4%5.8%OTHER2.3%ART AND CULTURE40.7%SOCIO-ECONOMICDEVELOPMENT15.7%ENVIRONMENT7.6%12.9%10%8.2%SOCIAL ACCESIBILITY AND SOCIO-ECONOMIC DEVELOPMENT33.2%HUMANITARIANAID7.6%PERCENTAGE DISTRIBUTION OF CONTRIBUTIONS BY AREA OF ACTIVITY (ABERTIS CLASSIFICATION)PERCENTAGE DISTRIBUTION OF CONTRIBUTIONS BY AREA OF ACTIVITY (LBG CLASSIFICATION)MOBILITY AND ROAD SAFETYCULTURAL ACCESIBILITYPRESERVATION OFTHE ENVIRONMENTTRAINING / RESEARCH7.2%41.4%EDUCATIONSOCIALWELL-BEINGHEALTH7.4%5.8%OTHER2.3%ART AND CULTURE40.7%SOCIO-ECONOMICDEVELOPMENT15.7%ENVIRONMENT7.6%12.9%10%8.2%SOCIAL ACCESIBILITY AND SOCIO-ECONOMIC DEVELOPMENT33.2%HUMANITARIANAID7.6%INTEGRATED ANNUAL REPORTSOCIETY. SUPPLIER MANAGEMENT AND SUPPLY CHAIN13013108/07 SUPPLIER MANAGEMENT AND SUPPLY CHAIN Abertis works with qualified suppliers with proven technical, financial, ethical and responsible performance credentials.Purchases from local suppliers91% CONTRACTING POLICY AND PROCEDURE The supplier management policy and the implemented contracting procedures establish, among other requirements, the qualification and evaluation of suppliers in matters pertaining to ESG. A formal system has been implemented in Brazil, Spain and Chile, through a joint evaluation tool that collects information on supplier performance and management in connection with different environmental, social and good governance aspects. Thus, it is possible to obtain an indicator of the performance of each supplier and establish a system of incentives for continuous improvement. In the rest of the countries, work is under way to integrate equivalent supplier evaluation procedures, although 100% of the critical suppliers have already been evaluated.The ultimate goal is to ensure the standardization under common criteria in all countries and progressively increase the volume of purchases from these suppliers.The increase in the number of evaluated suppliers according to CSR scoring in Brazil stands out, where the evaluation is a prerequisite to participate in the bidding processes. The good performance of this measure makes it a good case for replicability in other countries to encourage the increased participation of suppliers in this type of ESG performance evaluation exercises.Abertis’ supplier policy is based on the principles of competence, long-term relationship, adequate planning, efficiency and control. Abertis has several control mechanisms in place with the purpose of assuring adequate compliance with these principles and their traceability in order to revent certain risks. Said mechanisms combine committees and management tools that ensure that each and every contract is justified, that describe the implications resulting from not proceeding with them, and that verify their profitability.The implemented supplier contracting process is electronic and includes a formal assessment and qualification process based on the risk levels associated with the supplier company.Supplier involvement in the development of products and services with positive ESG (environmental, social and good governance) impacts is important, especially when they participate in activities related to road maintenance and construction. The objectives of the Master Plan in relation to external collaborators are present in the four strategic pillars of the plan, due to the cross-cutting impact they have on each of the aspects. In this sense, 100% of the tenders in 2017 have been formalized under environmental and social clauses (ESG).The scope of the non-financial information and the main management procedures related to ESG aspects includes external collaborators, and performance in connection with the actions conducted a part of the life cycle of the organization’s activity is reflected in the data presented.2017 HIGHLIGHTS • 2nd Supplier Convention at Autopistas, which brought together more than 100 people on behalf of 65 suppliers to discuss Road Safety, Risk Prevention, Supplier Evaluations and Customer Service. • Arteris has conducted the environmental assessment and monitoring of all construction works in Brazil. • VíasChile has launched a training program for its different concessionaries addressed to all personnel involved in the purchase of goods and services. The idea is to showcase the general guidelines of the Procurement processes, the stages of the acquisition of goods and services and the use of the Contracts and Instruments Management System as a support to the management of company contracts. • 3rd edition of the Abertis Global Purchasing Meeting, with the participation of all people involved in the Purchases Department of all countries. 132 INTEGRATED ANNUAL REPORT HUMAN TEAM. COMMITTED TO TALENT135EQUIPO HUMANO08/08 COMMITTED TO TALENTAbertis strives to create a culture of respect, inclusion, collaboration, safety and health in the workplace.Executives come from the local community89% Collaborators (final workforce)15,099Heads of deparment24% Executives17% Total workforce37% WomenSTRATEGIC GOALS Guarantee the safety and health of people at the workplace. Promote a team that is satisfied, committed and aligned with our goals and values. Guarantee equal opportunities Boost quality of employment Attract, develop and retain professional talent within a multicultural contextHUMAN TEAMA total of 342 people have taken parental leave during the year, with a retention rate of 99.2% for men and 90% for women. training and selection, among others. The overall remuneration ratio for women is 83.2%, a slightly higher percentage than the previous year. The presence of women in executive and management positions has increased, thus consolidating a positive trend over time. Nevertheless, it is necessary to keep on working to guarantee the gender balance across all professional categories. All countries have regulations linked to equal opportunities, although only Spain imposes the obligation to prepare a specific equality plan in relation to the various management aspects surrounding this matter, in addition to remuneration, such as promotion, Similarly, some countries have specific legislation on the hiring of functional-diverse people. Brazil, France and Spain require the hiring of a percentage of hiring of functional-diverse people, either workers, either directly or indirectly, through the use of alternative measures. WORKFORCE CHARACTERISTICS Workforce Permanent contract Full-time Turnover Men 63% 97% 95% 17% Women Total 37% 94% 85% 25% 15,099 95% 91% 20% DIVERSITY AND EQUALITY The center of the entire Abertis universe is the people that make up its human team. A cross-functional and diverse team whose mission is to consolidate Abertis as the world’s leading toll road operator and a global reference in the field of road mobility. Abertis’ team is made up of nearly 15,000 people that combine the talent to ensure that our toll roads become high quality roads for our customers. This way, the Abertis Group strives to create a culture of respect, inclusion, collaboration, safety and health in the workplace. The vision of the Human Resources teams is to create a positive environment in which people can share the Group’s values and leverage their capabilities - experience, knowledge and skills - to achieve the levels of excellence with which to contribute to the consolidation of Abertis as a reference company in the industry. The Group promotes diversity through hiring, internal promotion and training and development programs. 136 INTEGRATED ANNUAL REPORT HUMAN TEAM. COMMITTED TO TALENT 137 FINAL WORKFORCE AS OF DEC 31, 201715,099REST2%EMOVIS5%SPAIN14%CHILE8%ARGENTINA14%36%BRAZILFRANCE18%ITALY4%* The average number of Abertis employees at the end of December 31, 2017 includes 205 employees associated with non-current assets held for sale (233 employees as of December 31, 2016), which means the average number of employees without considering those associated with these assets and/or businesses discontinued in the current or previous years would amount to 14,841 in 2017 and 14,889 in 2016.*Less than 30Between 30 and 45Between 45 and 55 More than 55BRAZILFRANCESPAINCHILEARGENTINAPUERTO RICO20%40%60%80%100%ITALYINDIAWORKFORCE BY AGE GROUPS AS OF DECEMBER 31* This graph and the following in this chapter are calculated from data with a non-financial information scope (specified in chapter “About this report”)*AVERAGE FUNCTIONAL-DIVERSE WORKFORCE (DIRECT HIRING)BrazilFrance0%20%40%60%80%100%ArgentinaSpainItaly 08/09 PROFESSIONAL DEVELOPMENT OPEN CULTURE Abertis bases its business corporate culture on the basis of collective intelligence resulting from the sum of the intelligence of the entire team. The company has consolidated the so-called “Open Culture” through various programs: Likewise, the Corporation has continued to work with different Open initiatives, such as the second edition of In Abertis, based on trust; the Nice to Meet You meetings; the Open Challenges or the Come In session dedicated to international intelligence presentations. Open Circles: Participatory sessions to connect with the vision of the Corporation. • Come in!: Short presentations enabling direct and transparent access to knowledge about the organization’s relevant issues and projects. In 2017 Sanef has completely renewed its corporate headquarters by adapting “open space” criteria. The company is studying the renovation of other corporate buildings with these same criteria. A4 Holding also plans to adapt its Verona offices to this new concept that seeks transparency, participation and teamwork. Open Challenges: Participatory and voluntary projects. In 2017, the projects of the 5 teams have been approved. The most advanced one is the Innovation project that seeks the mobilization of 180 people of the corporation through a program consisting of several actions (6 in 2018). • Autopistas has launched the Focus project on cultural transformation at the company, with initiatives such as a new intranet with access to all employees, a new workforce rotation policy that gives greater flexibility, and the implementation of process-based management. Nice 2 Meet you: Short presentations about each department of the Corporation to promote greater knowledge in the various areas and a greater efficiency. In 2017, 5 units were submitted: Tax, Legal Counsel, Risk Control and Internal Audit, Engineering and Construction and Information and Technology Systems. • In India, an inverse training program was launched whereby country employees were able to learn about the cultural differences between the Asian country and the rest of the countries of the Group. Ninety per cent of executive-level vacancies in the last five years have been filled via internal promotion. SUCCESSION AND DEVELOPMENT PLANS PROMOTION OF TALENT In 2017, Abertis has started the implementation of its Succession Plan for both the Corporation and the subsidiaries. This plan allows to identify the successors of all critical positions at the company (“high potentials”) and provide a global and cross-cutting vision to making the most of the organization’s talent base. Talent promotion and retention are the main elements that make up Abertis’ professional development policy. Therefore, committing to this talent base is a fundamental pillar of our people management policy. One of the Group’s strategic objectives is to ensure that at least 75% of the executives and managers vacancies are filled by internal candidates. The Succession Plan is already under way in most of the Group’s business units. At present, the training needs of the so-called successors with respect to the responsibilities of the positions to which they are appointed are being analyzed. Likewise, in 2017 work has continued on a development program for managers and key employees and specific training has been developed in the field of cultural competences as a result of the greater international and cultural diversity conforming the Group’s employee base. • In 2017 the HR Standards were created, a tool that helps streamline the development objectives and the improvement of the Human Resources departments of all business units. Proof of this is the importance that the company gives to people development initiatives, such as the Abantis program, designed for the executive development of high potential employees within the Group and which is now in its fourth edition, and the “Talent Development Program”, both developed in collaboration with top business schools. In the last five years, 39 executive positions have been renewed in the Group, 32% of the total number of Abertis executives. Ninety per cent of these new management positions have been filled by internal promotion via vertical or horizontal movements. In addition, more than 48% of employees who have gone through the Talent program are currently holding a leading position in the Group. The Group has established a Management by Objectives system for the promotion of talent. Currently, 100% of the executives positions, 96.2% of managers (heads of department) and 60.3% of the remaining positions are under this performance evaluation system. 138 INTEGRATED ANNUAL REPORT HUMAN TEAM. PROFESSIONAL DEVELOPMENT 139 INTEGRATED ANNUAL REPORTHUMAN TEAM. PROFESSIONAL DEVELOPMENT140141KNOWLEDGE NETWORKSTo encourage the efficient use of this collective intelligence, Abertis has created the Connectis knowledge network, a space that allows people involved in the different phases of the operation to share knowledge and work collaboratively with the goal of implementing continuous improvement processes across the entire group.Toll roads of Brazil, France, Spain, Chile, Argentina and Puerto Rico are actively involved and, specifically, the areas of civil construction works, operations and exploitation, technology and information systems and procurement.The initiatives identified in Connectis become projects that are implemented by the different activities and countries jointly, thus sharing good practices and the challenges encountered, from a broader perspective that enriches all stages of the project. This allows implementing continuous improvement processes across the entire Group using tools such as e-learning or webinars.WORK ENVIRONMENTThe Group periodically conducts work climate surveys to measure employee satisfaction and develop action plans focused on improving the well-being of the staff.• In 2017, actions have been launched that focus on the analysis of the current performance evaluation processes and the promotion criteria for their revision and modification after the results of the work climate survey conducted among central services employees in 2016, which saw a participation of nearly 90%.• Arteris (Brazil) has conducted the satisfaction survey as part of the Valor Carreira project, whose results have been satisfactory and an overall satisfaction rate of 80%.• Vías (Chile) has conducted the “Yo opino (I give my opinion)” survey at the central offices, and it is planned to be rolled out in the toll roads.CORPORATE VOLUNTEERINGAbertis wants to encourage and support volunteering activities with the ...creation of the Abertis Infraestructuras and Abertis Foundation “Altruis Volunteer Program”, through which its professionals can spontaneously donate part of their time, skills, knowledge and economic support to improve society.This implies carrying out activities of a general interest that meet welfare, social services, civic action, educational, cultural, scientific, sports, health, development cooperation, environmental, defense of the social economy or research criteria oriented to that end, as well as development of associative life, the promotion of volunteering services or any other of similar nature at the national level.In Brazil and through its Voluntários program, Arteris employees travel around the toll roads to locate homeless youth living near the infrastructures.Among other corporate volunteering actions, Sanef workers in France give music lessons to small orchestras consisting of children without economic resources.Likewise, VíasChile’s landscaping professionals in Chile teach classes to women in prison to encourage their re-integration into the workplace. Also in VíasChile, as part of the “Construye tu Futuro (Build your Future)” plan, succeeded in helping more than 170 young people from highly socially vulnerable backgrounds in 2017 obtain state scholarships to pursue higher education careers. Thanks to this program, nearly 500 young people have gained access to technical and professional careers, with the support of tutors and volunteering collaborators of VíasChile.For more information, please see the Contribution to the Community section.TRAININGAlmost all countries have specific training plans aligned with the direct needs of collaborators and the achievement of the strategic objectives of the Group. Abertis has set the goal that, in the coming years, each employee of the Group will receive a minimum of one development action per year, thus increasing the average number of training hours per worker.• Autopistas has launched the CAMPUS platform with the aim of conducting online training through a platform available on the company’s intranet. Due to the geographical dispersion of collaborators, it is a very useful tool that allows reaching out to the entire workforce simultaneously and offer regulatory-required training courses (health and safety, collective agreements and ISO certifications basically) and also required training applicable to the entire staff.• Online Arteris University. The Arteris University was created in 2016 with the goal of sharing the knowledge about the business among internal collaborators, and promoting the professional development among talented company employees. In July 2017, the Arteris University was strengthened through the creation of the Arteris Online University and the Arteris Operations University.Arteris Online University: 31 published courses; 92% active collaborators in the networkArteris Operations University: training for 362 collaborators; 54 courses completed.20162015TOTAL INVESTMENT IN TRAINING €Mn AND AVERAGE HOURS PER COLLABORATOR20174.00.01.02.03.024.012.09.06.03.00.015.018.021.022.517.721.53.33.44.7Investment in trainingAverage training hoursInvestment in training€4.7 Mn08/10 SAFETY AND HEALTH EVOLUTION OF ACCIDENT RATES GLOBAL ACCIDENT FREQUENCY RATE: 10.7 (-27.7%) The Group has launched the Global Health and Safety Program with the aim of reducing accidents at work. -32% Workplace accidents 106,934 hours of health and safety training In 2017, work-related accidents were significantly reduced, with drops observed across all main indicators. It is the result of unrelenting work to prevent risks and of the actions implemented in all of the Group’s concessionaires. 142 INTEGRATED ANNUAL REPORT HUMAN TEAM. SAFETY AND HEALTH 143 WORKPLACE ACCIDENTS50030025020015010050035052135214628742527920285169400450TotalWomenMenINCIDENT RATE40.030.020.010.00.026.128.229.135.339.319.521.715.922.6TotalWomenMen201520162017201520162017201520162017FREQUENCY RATE10.00.017.018.213.614.815.614.920.0TotalWomenMen201520162017SEVERITY RATE0.50.00.550.610.430.500.540.461.0TotalWomenMen10.711.79.00.340.390.25WORKPLACE ACCIDENTS50030025020015010050035052135214628742527920285169400450TotalWomenMenINCIDENT RATE40.030.020.010.00.026.128.229.135.339.319.521.715.922.6TotalWomenMen201520162017201520162017201520162017FREQUENCY RATE10.00.017.018.213.614.815.614.920.0TotalWomenMen201520162017SEVERITY RATE0.50.00.550.610.430.500.540.461.0TotalWomenMen10.711.79.00.340.390.25MANAGEMENT SYSTEM PERFORMANCE APPRAISAL 92.3% of turnover has a formal health and safety implemented and/or certified management system based on the OHSAS 18001 international standard. Operations in India, one of the concessionaires in Puerto Rico and one in Argentina, as well as the operations in Italy lack this type of formalized systems. aimed at preventing occupational risks. These committees have met on a total of 522 occasions, with the goal of addressing various issues such as training, safety activities, planning monitoring, investigation of events and coordination with contracted companies involving 25,924 employees. The analysis of workplace risks, the deployment of preventive measures, training and the provision of specific equipment and the monitoring of performance indicators on a permanent basis are some of the actions included in the systems. Likewise, 85% of the workforce is covered by a health and safety committee, which jointly between the workers and the organization, conduct a specific follow-up of the application plans and the measures Workplace accidents have continued with a downward trend, as have the related rates, according to the established objective. Nevertheless, the potential incidence of India must be assessed as soon as the procedures and the safety culture are consolidated that allow to obtain related data. During the year 2017, one collaborator died in France due to an accident, and there were a total of 209 accidents among subcontractors, which are not included in the data analyzed in this report. HEALTH AND SAFETY MANAGEMENT SYSTEMS AS A FUNCTION OF REVENUE MAIN ACTIONS IN 2017 • Global Occupational Safety Program: Aligned with the Global Road Safety program, the Global Occupational Safety Program was launched in 2017 with the aim to work together as a Group to reduce accidents at work. • Ongoing training: During 2017, 106,934 hours of Health and Safety training were completed at Group level (-27.1%). • Global Corporate Challenge: Promotion of physical activity among Sanef employees. For 100 days, employees (divided into 7 teams) wore a pedometer to measure their physical activity. They competed symbolically between teams to see who had gone the furthest. The goal is to encourage employees to make progress, in particular by exceeding the 10,000 step per day threshold recommended by the WHO. • • Improved worker safety: In France, Sanef has driven actions such as the 9 golden rules of prevention and has completely banned the consumption of alcohol among its workers during corporate events, and has conducted several awareness actions as well. Implementation of the Workplace Risk Reduction Index (IRR) as a Strategic Objective of Arteris. In order to have available proactive measures to measure and monitor health and safety at work, the toll roads in Brazil have designed an index that relates the number of accidents that occur to the number of audits or prevention actions that have been developed, since a direct relationship between these two variables has been observed. • Other actions performed: – Specific monitoring and control audits – Psycho-social evaluations – Procedures for continuous improvement – Workshops and awareness-raising activities. Sanef’s 9 golden rules of prevention 1. Remain aware and be concerned about safety 2. Comply with and enforce safety rules 3. Do not act with haste 4. Keep calm 5. Choose a safe route and do not run 6. Keep workspaces neat and clean 7. Control the vehicle and respect traffic laws 8. Make sure you have the necessary resources, carry/wear the right equipment and know the rules 9. Take care of the material and ensure its proper use 144 INTEGRATED ANNUAL REPORT HUMAN TEAM. SAFETY AND HEALTH 145 Implemented - OHSASImplemented - In-house0%20%40%60%80%100%Certified - OHSASNo formal systemECONOMIC VALUE ADDED The Economic Value Added (EVA) shows the economic value generated by the Abertis Group and at the same time describes how that value is distributed among those elements that have contributed to its creation. The economic value generated by Abertis in the year 2017 has amounted to 5,655.9 million euros, of which 74.9% has been distributed and 25.1% has been retained by the organization. 146 INTEGRATED ANNUAL REPORT HUMAN TEAM. SAFETY AND HEALTH 147 EVA - CONSOLIDATED ANNUAL ACCOUNTSPROVISIONSOTHER EXPENSESRESERVES1.8%1.9%AMORTIZATIONS25.1%DIVIDENDS14%SUPPLIERS14.5%INVESTMENT IN SOCIAL ACTION0.1%ENVIRONMENTAL EXPENSES0.4%INCOME TAX AND OTHER TAXES12.6%FINANCIAL EXPENSES18.2%PERSONNEL EXPENSES11.3%0.1% OUTLOOK092018 COURSE OF ACTION09/01 2018 COURSE OF ACTION Spain • Analysis of new lines of business in Spain through the new Development office. • Study of new concession tenders that may open up in the near future. Puerto Rico the model in the mid term. • New CapEx program for the rehabilitation of damages caused by hurricane María and re-assessment of • Manage insurance claims as a result of hurricane María. • Under study the implementation of the free-flow system in the Teodoro Moscoso bridge. • Deployment of the specific CSR action plan. • Work with the governments and other local social agents to move forward with initiatives geared at Argentina • Design of the project for new investments in concessions (nearly $700 million): lane expansion, France Italy improving mobility. • CSR and sustainability action plan. • Continuation of the Plan Relance investment plan. • Analysis of the new investment plan (Grand Paris). • Deployment of the specfic CSR action plan. • Complete the integration with the Group. • Extend the Open Space model at the Verona offices. • Advance with the Northern Connection project: begin construction works at the Veneto section and obtain the green light for the Trento section. • Advance with the lane expansion project for the Brescia-Verona section. • Analysis of new concessions. • Deployment of the specfic CSR action plan. Brazil • Commissioning of Via Paulista and implementation of Group best practices. • Continuation of the investment plan with landmark works such as the area surrounding the city of Florianópolis, the duplication of the Fluminense toll road in Rio de Janeiro and the negotiation of new investments. • Analysis of new concessions that may appear in the market as part of the Programa de Parcerias de Investimentos (PPI) Program. • Strategic sustainability plan. network improvements, etc. • Analysis of new public-private partnership opportunities in road concessions. • Deployment of the specific CSR action plan. India • Advance with the integration with the Group. • Create organizational teams with local collaborators that can become integrated in the international diversity of the Group. • Streamline and integrate the two assets under a common brand and with uniform management criteria. • Analysis of new growth opportunities in the country by leveraging the Infrastructures Plan announced by the country’s Government. • Deployment of the specfic CSR action plan. Abertis Mobility Services • Search for new opportunities in free-flow, truck tolling and Road Use Chargning projects with a focus in the United States, Europe and Latin America. • Promote the leadership of eurotoll as a provider of EETS services for heavy vehicles in Europe. • Development of new business related to mobility (congestion charging, Maas, etc.). • Continue to promote innovation in advanced and non-intrusive free-flow technological solutions for application in new projects and their deployment within the business units of the Abertis Group. • Deployment of the specfic CSR action plan. Chile • Begin construction work of the Nudo Quilicura- Autopista Central intersection and Autopista del Sol’s Corporation • Analysis, adaptation and valuation of the new industry and corporate situation. third lane. • Negotiations with governments for new investments in Ruta Los Libertadores and Ruta-68. • Re-tendering for the Rutas del Elqui concession and analysis of tenders for new concessions. • Deployment of the specfic CSR action plan. • Analysis of new public-private partnerships in the different business units. • Reinforce the Group’s strategic programs: Road Safety and Road Tech (applicable to all business units of the Group). • Update the materiality analysis including the new activities and geographical locations. 150 INTEGRATED ANNUAL REPORT 2018 COURSE OF ACTION 151 ABOUT THIS REPORT1010/01 REPORTING METHODOLOGY This report and its annex have been prepared pursuant to the current legal requirements in terms of accountability, and abiding to the main international standards related to economic, social, environmental and good governance information, specifically: SRS GRI IIRC FRAMEWORK UNGC COP / SDG INTEGRATED ANNUAL REPORT ESG ASSESSMENTS (CDP, DJSI,...) ACCOUNTABILITY The framework of the IIRC together with the SRS standards of the Global Reporting Initiative, the policy for the preparation of progress reports and the Sustainable Development Goals of the Global Compact, the relationship standards with Accountability stakeholders and the recommendations for the publication and evaluation of external analysts and evaluators in ESG matters constitute the basis for the definition and development of the contents of the IAI and its annexes. This methodology includes the international references on non-financial information that are included in the European Non-Financial Information Directive, whose transposition has been made effective through the approval of Royal Decree 18/2017 of 24 November. Other publications of the organization complement the information and the accountability exercise, providing a complete picture of its activity and of its ESG impacts. The organization’s Board of Directors and the CSR Committee are the bodies responsible for the oversight and formulation of the information contained in the Annual Report and its annexes. Likewise, the external audit and review of the financial and non-financial information has been carried out respectively, according to the review reports annexed both to this report and to the financial statements of the organization. SCOPE OF THE INFORMATION The financial information in this report includes the total activity of the organization, and the scope of non-financial information includes 96.8% of the total revenue and 94% of the workforce as of December 31, 2017. The main changes with respect to the previous year in the scope of non-financial information are the inclusion of activities in Italy and India, as well as the activity of Túnels in Spain, and the Emovis business unit present in different countries, but the inclusion of which in 2017 covers only its central services located in France, and the exclusion of the satellite telecommunications activity. Likewise, any limitation in scope of a specific datum has been detailed in the RSC 2017 Master Plan Monitoring Annex document. COMPANIES INCLUDED IN THE SCOPE OF NON-FINANCIAL INFORMATION TOLL ROADS SPAIN - Autopistas, Acesa, Aucat, Invicat, Aumar, Iberpistas, Castellana, Avasa, Aulesa and Túnels. FRANCE - Sanef, Sapn and BPNL SAS. ITALY - A4 Holding, A4 Mobility, Autostrada Bs Vr Vi Pd SpA, A4 Trading SpA. BRAZIL - Arteris, Autovias, Centrovias, Intervias, Vianorte, Planalto Sul, Fluminense, Fernão Dias, Régis Bittencourt, Litoral Sul and Latina Manutenção de Rodovias. CHILE - VíasChile, Autopista Central, Autopista Los Libertadores, Autopista del Sol, Autopista Los Andes, Rutas del Elqui, Rutas del Pacífico and linked operators: Operadora Sol, Operadora Los Libertadores, Operadora Andes, Operadora del Pacífico and GESA. PUERTO RICO - Metropistas and APR. ARGENTINA - Ausol and GCO. INDIA - Jadcherla Expressways Private Limited and Trichy Tollway Private Limited. ABERTIS MOBILITY SERVICES - Emovis SAS. CENTRAL SERVICES Abertis Infraestructuras and Abertis Foundation. The remaining 3.2% comprises the following companies: • Direct participation: Abertis Infraestructuras Finance B.V, Abertis Motorways UK Ltd, Abertis USA Corp, Abertis Mobility Services, S.L. (except Emovis S.A.S), Abertis PDC, S.A. and Abertis Telecom Satélites. • Indirect participation: Sanef Aquitaine S.A.S, Bip & Go S.A.S, Leonord Exploitation SAS, Acufon Spa, Globalcar Services Spa, A4 Mobility S.r.l. and Via Paulista, S.A. 154 INTEGRATED ANNUAL REPORT ABOUT THIS REPORT. REPORTING METHODOLOGY 155 CALCULATION METHODOLOGIES The calculation methodologies related to non-financial information are determined in the specified standards (especially those of the Global Reporting Initiative) as well as international references related to certain specific areas, such as ISO 14064: 1-2012: “The Greenhouse Gas Protocol, a Corporate Accounting and Reporting Standard” and the criteria established in the “Corporate Value Chain (Scope 3) Accounting and Reporting Standard”, published in 2011 by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD) together with the Climate Disclosure Standards Board (CDSB), for the calculation of the carbon footprint and the methodology from the London Benchmarking Group for the quantification of the contribution to the community. Free translation for information purposes ABOUT THIS REPORT. REPORTING METHODOLOGY 157

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