Good morning, and thank you for joining in this September 21st results presentation. As always, we briefly analyze the key aspects of our results, which were released yesterday, and then we'll have a Q&A session. We are referring growth rates to 2020 pro forma figures. That is, with Industrial Services reclassified as discontinued operations after the sale agreement to Vinci, and accounting for our 50% stake in TIS as equity method in both years. In the first nine months of 2021, sales increased 2.8% to EUR 20.4 billion, affected by the U.S. dollar depreciation of 5.6% year-on-year. FX adjusted, sales remain virtually stable. Backlog at historical heights, closing at EUR 66.4 billion. That is 8.6% higher than the prior year.
EBITDA reached EUR 1.16 billion, increasing by 12.5%, thanks to the positive contribution from Abertis and operating margin resilience. As you know, Abertis was highly affected by worldwide mobility restrictions imposed after the COVID-19. As these restrictions have eased, traffic rates lifted up to similar pre-pandemic levels. Mainly in the last three months have increased the 2019 levels. Likewise, EBIT increased by 12.1% up to EUR 775 million. The group net profit reached EUR 545 million, growing by 24.7%. This growth is underpinned by the recovery of Abertis activity and the volume performance of core activities.
As of September 30th, 2021, the group had EUR 3.6 billion net debt, meaning EUR 734 million decrease in the like-for-like basis after restructuring net debt from Industrial Services business unit. It was EUR 859 million at year-end 2020, related to the sale agreement with Vinci. Looking at the sales breakdown with the reclassification of Industrial Services same perimeter as discontinued operations, the group sales are rebalanced towards our core strategic regions. The weight in North America increased up to 60%. Australia now represents 19% of the total sales, and Europe increases to 17%. Especially in Spain, the core market of the region, representing 10% of it, of the overall sales of the group. In more detail, North America sales reached EUR 12.1 billion, particularly affected by the USD depreciation and the termination of large projects.
FX adjusted sales went down by 5.4% year-on-year. Still affected by the economic setback from COVID-19. Full recovery is expected by year-end with the initiation of new projects awarded in the period. Asia Pacific experienced a quick turnaround driven by the Australian markets, which consolidated its recovery with 8% sales growth in local currency terms. Europe has recovered regular production, growing by 4.2% against the comparable period. Core countries Spain, Germany, and Britain have even surpassed pre-pandemic production levels. Operating performance. In construction, margins evolution reflects project migration towards a more balanced risk profile. Services recovered pre-pandemic operating margins. Meanwhile, in concessions, operating efficiency improvement is mainly driven by Abertis, whose contribution rose by EUR 118 million year-on-year. Let me give you a bit more color on Abertis performance.
Abertis average daily traffic in September 2021 was 22% higher year-on-year due to the easing of mobility restrictions introduced last year and benefiting from the resilience afforded by the diversified portfolio of toll roads. Individual country performances varied based on the timing and extent of lockdown measures as well as prevailing travel restrictions. France, +14%, Spain, +24%, Italy, +20%, Brazil, +12%, Chile, +45%, Mexico, +19%, and the U.S., +18%. Some of these countries are at or even over pandemic traffic levels, such as Mexico or Brazil. Operating revenues rose 22% year-on-year in the nine-month period to EUR 3.65 billion, with an EBITDA up 32% year-on-year to EUR 230 million.
An increase of 32% helped by the full consolidation of Mexico, RCO, and Elizabeth River Crossings in the U.S., acquired during 2020. Abertis net profit for FPA amounts to EUR 516 million for the nine months of 2021, a 62% increase year-on-year due to improving traffic trends and operational performance. The company remains with a strong liquidity and significant debt reduction we take with proceeds from hybrid bond issuance. Company rating remains unchanged BBB, as recently confirmed by Fitch Ratings, credit rating agency.
In addition, Abertis announced on October tenth that it has signed an agreement with the Chilean Minister of Public Works for the deployment of a major CapEx project over EUR 200 million to build the tunnel in Santiago that will improve mobility in the city. As part of this agreement, Chilean concession period will be extended for 20 more months. Net profit by activities. Construction profit amounted to EUR 209 million, up by 2%. Concessions raised to EUR 107 million, driven by EUR 87 million contribution from Abertis in the period whereas last period contributed with a negative EUR 8 million. Industrial services reached EUR 225 million, 31% higher than the previous year, partially due to the fact that this period has no asset depreciation after the sale agreement with Vinci.
Service net profit reached EUR 20 million, fully recovering pre-pandemic levels. Finally, ACS's quarter accounted for a negative net result of EUR 150 million, affected by non-recurring financial results related to the change in value derivatives having no cash impact. Overall, the group net profit as of September 31st, reached EUR 545 million, 24.7% higher year-on-year. Year-to-date net debt evolution. As of September 21, the group had a net debt of EUR 33.57 billion. At 2020 year end, industrial business net cash of EUR 859 million was reclassified as asset held for sale after the agreement reached with Vinci, and therefore excluding from the group net debt balance.
The increase in net debt is basically due to seasonality effect of working capital, with a net flow of around EUR 1 billion, which is around EUR 200 million lower than in September 2020 in comparable terms. As you can notice in the graph, funds from trading operations plus cash from asset disposals compensate the cash outflows from project investments and shareholder remuneration to both ACS and Hochtief. Backlog, geographical and order intake. Over 80% of the backlog comes from three core countries. U.S., 43%, Australia, 31%, and Spain, 8%. The solid growth trend across regions is confirmed by the order intake momentum, which reached EUR 27.2 billion in the first nine months of 2021, fostered by third quarter outperformance.
Furthermore, we have a positive outlook based on the stimulus plans and green deal agreements as part of a crisis response from governments. For instance, the U.S. Congress has recently approved Biden's five-year infrastructure bill for a total amount of $1.2 trillion. This figure includes yearly baseline of $130 million funding that the Congress approved, plus a yearly $110 billion of U.S. spending aimed at modernizing infrastructure for the coming five years. The funding for the incremental investment will be partially paid by unspent COVID relief, no longer relying on an increase on the U.S. corporate taxes. Backlog evolution. As of September 2021, total group backlog amounted to €66 billion, beating historical records on a like-to-like basis, that is excluding Industrial Services and 50% of TII's contribution.
Analyzing five-year evolution, backlog experienced 6.3% annual growth coming from both construction and service activities. In this slide, we have some of our major contract awards for the year in Australia, U.S. and Spain. You've got a variety of projects. Just to finish, I'd like to highlight the group's third quarter results, confirming the resilience of our businesses backed by a strategic decision to focus in the most developed markets and activities that render higher visibility and better balanced risk profile. Key takeaways of the group performance in the first nine months of 2021, sales recovery trend and operating resilience across activities. Risk-balanced free cash flow with high visibility and stability. Backlog at historical highs and sustained by positive momentum in order intake.
These sets of results uphold recovery trends in profitability, cash flow and backlog, positioning the group on track to meet the 2021 targets. Looking forward, the group is supported by numerous stimulus packages from the government and the identified tender pipeline of relevant projects worth EUR 530 billion for 2021 and beyond, including EUR 200 billion in PPP projects provide a positive outlook. Just to finish, let me remind that we look forward to closing the necessary transaction by the end of next month, as almost all permits required have been already granted. Now, we're ready to answer any questions that you might have.
Thank you. Ladies and gentlemen, the Q&A session starts now. If you wish to ask a question, please press zero one on your telephone keypad. Please be informed that there might be a short silence while questions are being registered. Thank you. The first question comes from Filipe Leite from CaixaBank BPI. Please go ahead.
Good morning, everyone. I have three questions, if I may. First one, if you can give us additional visibility or details for the reason why working capital excluding factoring in this quarter at ACS and Hochtief was so strong, and also your expectations for full year. Second question, if you can give us also an update on AP-7 litigation, and when do you expect a final decision from the court? Last one is just a confirmation regarding Radiales. I would like to confirm that the amount related with both R3 and R5 are already full provision, and also if the amount related with R2 is also full provision. Thank you.
Okay. Well, in the working capital excluding Hochtief, basically, we've obviously as of in the last year, we had Industrial Services included. Now it is excluded. The performance of the working capital is being probably stronger than it was in the past. As you asked about the litigation, the Radiales, this is a very technical question, but basically, I guess, what our lawyers say is that we have very solid grounds to support and the sentence can be revoked in the appeal court. Do not forget that in the letter of support and therefore what is guaranteed is the maintenance of rank of creditors and not the repayment. That is, you get into a very complicated matter.
The impression of our lawyers is that the sentence can be revoked, and it will be appealed shortly. On top of it, the full amount of this risk is fully provisioned in our accounts, as well as in the accounts of Abertis, which also made a disclosure to the market. I think this is a very technical issue, and you guess the creditors are distressed debt holders which have their strategy to communicate things in a different manner. We are comfortable that our lawyers tell us that the sentence have very strong grounds to be revoked in the appeal court.
Thank you very much. The next question comes from Alejandro Vigil from Bestinver Securities. Please go ahead.
Hello, Angel. Thank you for taking my questions. The first question is about the Industrial Services divestment. You mentioned that you are expecting to close the transaction at the end of next month. Can you confirm also that you will receive the EUR 5 billion at that time, and your expectations overall about the net debt by the end of the year? That would be the first group of questions. The second is about the reinvestment of the proceeds from Industrial Services. Your thoughts about these reinvestment options, particularly about Abertis. Yesterday Atlantia was openly talking about Abertis as the vehicle of growth in motorways for the company. If you can share your thoughts on Abertis' strategy. Thank you.
Thank you, Alejandro. As we said, we hope that the investment of the Atlantia transaction will be closed before the end of the year. The contract provides for the authorization we need to be obtained from competition authorities. We were getting one by one. The largest one, which was Europe, which is where the strongest competition was possible between both groups, had already been granted. We've got different ones in different countries. We do not have any concern about it. Obviously, when the transaction closes, the payment will be received immediately. We think that will be closed as expected before the end of the year.
In terms of the reinvestment strategy, I think we've made very clear that we want to focus our investment mostly in the development of the concession business. We have with Atlantia a joint investment vehicle, which is Abertis. We would like to strengthen Abertis' capacity to grow. It's a fantastic vehicle for growing in this market. It has a wide, quite diversified asset base geographically and, but also mostly in developed markets, and we think this is the way we want to continue. As you know, this is a project we have with our partners, and we have to agree both in what things that company do. It's a 50/50 joint venture.
We also on top of it have the capacity to develop new concessions ourselves and which we can invest if they were to be a project which is of interest for us and our partner would consider would not be appealing. We have the two options. The main one is obviously Abertis, which is the established concession company, but also we can develop greenfield projects directly through ourselves. The focus of the investment is going to be in concessions. Obviously, we've been working for the last month on it. I guess we've got quite a lot of work done, and we think there's attractive opportunities coming in the market. We have no problem in considering the reinvestment process. We continue as soon as we close the transaction.
Thank you, Ángel. Just a follow-up. Are you planning to provide a kind of a strategic update after you have a clear view about this reinvestment strategy, kind of capital markets day or strategic update about this strategy? Thank you.
As you know, in the investment program, you first make the investment, then you announce it. Obviously, we are looking at different price already, and probably it's much better to communicate once you've completed the acquisition. Yes, once the basic framework of the investment is already, a company will provide a capital market view on how we see the concession business going forward and what our role will be.
Brilliant. Thank you. Thank you very much.
Thank you. The next question comes from Bosco Ojeda from UBS. Please go ahead.
Hi, good morning. I have a couple of questions. The first one on your backlog. If you could give us some color on where you are growing in terms of sectors. You gave the geographic breakdown, but maybe in terms of sectors, where is it that you're getting that growth in contract and the margin outlook for that growth? Second question I wanted to ask is on your industrial services activity that you keep, the one that you are consolidating. I can see the debt has moved to around EUR 500 million in last reported data. I'm not sure if you could give us details. Is that the renewable concessions line, and are you making any progress in renewable investment or looking for more investments in that area or in size and then the timing for that? Thank you.
Bosco, thank you for the question. First of all, backlog, as you've seen, obviously has grown in the U.S., in Australia and in Spain. You know, basically the two markets. I guess probably, the one which is, in contrast with last year, probably, a stronger growth is in the Australian market. I think, this is a market where all governments have a very clear view on infrastructure development. And regardless of the color of the government or different regions, they all share the same view. I guess, with the reinforcing of CIMIC strategy, I think we've been able to attract good queries and this backlog is important. Basically civil works, all of it.
In Spain it's also some building growth because the building market in Spain is growing quite a bit. In the U.S., basically, you've got a little bit of everything. Turner has growth, is backlog and this institutional building and also civil works. Mostly I think it's institutional building portion of it. In terms of Industrial Services, well, the debt that we have there is obviously the asset that we have, a few of them are still under construction. The growth is basically investment in those projects. I guess we could keep on completing them, and will depend how we see that. We may dispose of them if we see a fair value. We'll keep them in the long term.
We do not have a clear decision yet, as to what we'll do with each of them. Some have been sold, and the others, if we see an attractive value for them, we'll sell them. Otherwise, we'll keep them because they are providing good returns.
Okay. Thank you.
Thank you. The next question comes from Marcin Wojtal from Bank of America. Please go ahead.
Yes, thank you very much. My first question is on the transaction with Vinci. You are, I believe, in negotiations to set up a joint venture between ACS and Vinci that would in the future acquire some renewable energy projects. Is there actually any update on that joint venture? Is there any deadline? Can you give us some color or if this is progressing at all? Question number two is on share buybacks. I think we saw an announcement that ACS would be increasing the share buybacks to 7%. Can you update us a little bit on the rationale? Are you planning to reduce the share count or this is just to offset the dilution that is coming from the payment of dividends, partly in shares?
Can you also comment a little bit on the Hochtief share buyback? What is the rationale and how do you see that, from the point of view of ACS? Thank you.
In reference to the Vinci joint venture vehicle for the renewable asset, basically not much to be negotiated. The agreement is that we'll do a project jointly with 51% owned by Vinci and up to 49% owned by us. I guess we are all focused on closing the transaction. The agreement is all assets which will be developed by Vinci, our ex Cobra unit will be put in that vehicle, and we have the capacity to invest. We haven't really paid much attention. I guess the first thing is to close the transaction and then starting to develop the vehicle. The vehicle is a company will be housing the assets as we finish them, so it's not very complicated.
In terms of share buyback, we've actually canceled, in the board of yesterday, we announced the cancellation of 6 million of ACS shares. The rationale is we wanted obviously, we saw the price was very below, and we thought it was, it would complement to the contribution to shareholders. Hochtief and they had a 3.5% equity treasury stock, and they allowed the company to go up to the 10% capacity, the rationale was the value was, or the shares they considered was low, and it was again a way to compensate the shareholders. It's basically taking advantage of a low price to give an attractive return to the shareholders. There's nothing more to it than that.
Okay, thank you.
Thank you. The next question comes from Luis Prieto from Kepler. Please go ahead.
Good morning. Thanks, I'm Luis, for taking my questions. I had a couple of them if I could. The first one. I know it's very difficult to talk about these things, but you just reiterated your concession investment approach inside and/or outside of Abertis. In this context, would you be able to provide a bit more granularity on what amounts could be potentially committed through Abertis? How the dialogue with Atlantia is progressing on this particular front? The second question is just a very quick one. How comfortable are you with Abertis' financial gearing? Thank you.
Okay, Luis. Thank you for the question. A couple of comments. The reason why I mentioned investing in concessions with Atlantia through Abertis or without basically refers to the type of projects that we might consider investing. Obviously, Abertis is mostly around brownfield, and we think the greenfield would add additional capacity and additional profitability returns, because obviously when you compete for a greenfield, you've got a more limited amount of competitors. If you go to buy a brownfield, you've got all funds, the pension companies, infrastructure funds, which some of them have very low cost of capital, and it's very difficult to obtain. But obviously, our partners need to be comfortable with the type of risk that we will be incorporating.
That is the reason why it might be that we do not coincide in the interest of a project. Then if that is the case, and we think it's an attractive project, and they consider this too risky for the greenfield, we can take that ourselves alone. The normal investment vehicle will be through Abertis. Obviously Abertis, we want to pursue a large investment in Abertis. We have to strengthen their capital base, but our partners and ourselves are well prepared and agree that we will do that to foster the growth of Abertis. It's not any particular amount that's going to commit, but we will provide the funds, significant funds to develop according to the investment capacity that we see in the market.
If we see attractive projects, both partners will provide capital to the company so that the company can pursue the investment if we decide to go ahead. It's not any amount set. We have the ambition to get to create Abertis as a larger infrastructure company, and we have the resources and so do our partners. We share the view and we'll provide enough funding for the company to pursue. We cannot keep on levering the company for last project because that would go in an amount will be probably in excess of what the company should bear. We can provide capital so the company can do that without any problems.
Thank you.
Sorry. Regarding Abertis's-
Please go ahead.
Financial gearing.
Luis, yeah, you can follow with the question.
Hello, do you hear me?
Yes.
Oh, yeah. No, no, the second question is how comfortable are you with Abertis' financial gearing, level of financial gearing?
For the time being, we do not have any problem. It's been confirmed the BBB rating. Obviously, if Abertis were to pursue a large investment, we think it will be helpful to provide a stronger capital base, but obviously that depends on the opportunity. Again, with the existing portfolio, the company can manage that as confirmed by the rating agency. If there is new investment, and we think there will be new investment, you know, of large size, we'll have to provide additional capital, but that's no problem for it.
Excellent. Thank you very much.
Thank you. The next question comes from Fernando Lafuente from Alantra Equities. Please go ahead.
Good afternoon, [Non-English content] . Just two, well, three quick questions from me, please. The first one is a follow-up on the Abertis capital injection. I fully understand the rationale of inject capital. My question here is, were you be able to or decide to do it directly through ACS or Hochtief would be proportional to its stake? I mean, I understand that Atlantia wants to keep the stake as it is. I was wondering if you could take the opportunity to increase your direct stake against that of Hochtief. The second question is on dividends buybacks. It was very clear you have canceled 6 million shares. Last year you did so with around 4 million shares, if I recall correctly.
Is this actually something that we should expect every year as a complement for the dividend, or it's just on an opportunistic basis? The third one is on disposals. On the one hand, renewables, I guess in the past you were willing or considering potential disposals of the assets that you keep on renewables. On the other, services, given all the comments that we've heard in press over these last few weeks, if you would be willing to make something with your services division, sorry. Where a merger or a disposal, partial disposal, something like that. Thank you so much.
In the shareholder structure that we have in Abertis, Atlantia 50%, Hochtief 20%, and ourselves 30%. In principle, there's no consideration to change that structure. Obviously the capital increase will be provided by the ACS Group, including Hochtief as part of the ACS Group. We would not have any problem to inject the capital in the existing shareholder base. I don't think if we wanted to change that, we can do it, but no decision has been taken in that regard. As you go to the buybacks, by definition, is something that we do on an opportunistic basis. It's not something that we're going to do every year as a token to the shareholder compensation.
We'll do it if and when we think it, the value is attractive, and without any commitment to recurrence. In terms of disposal, the renewables that we keep from the carve-out of Industrial Services, the ones that we're not selling, they are at different stages. They are of different nature. Some are still under construction, some are ready to be disposed of. The ones which are under construction, we'll first complete them. Then the disposal basically is in an opportunistic basis. There's no rush. They're all contributing to regular profits. If we see a good price, we'll sell them. If not, we'll keep them until we get a better offer. There's nothing.
As you refer to the services, Clece, which is a service company, is a company which we've never considered being to put in the market for sale. The fact that some companies are selling their divisions has no relation to us. For us, Clece is a very important company. We think besides it being a profitable operation, very profitable operation in reference to the capital employed, we think it provides a good service to society, and we are very proud of it. We're not considering to sell it by any means.
All right. Gracias.
Thank you. The next question comes from Ethan Zafara from Banco Santander. Please go ahead. Mr. Zafara, please go ahead. Your line is open.
Yes. Sorry. I am Zafara from Banco Santander. Sorry, I was on mute. Just one quick question. It's actually clarification from the first question that Ángel answered. You mentioned and that's in your accounts that the R3 and R5 Radiales, they're fully provisioned. I didn't understand if that is the case also for the R2, since there's no explicitly. It doesn't explicitly say in your account, neither on Abertis accounts.
Yeah, just if you didn't hear it well. In terms of ACS, we made a statement on the full provision, and Abertis also made a statement to the market that it's also fully provisioned in their accounts. As you refer also to R2, despite of the provision in consideration, our lawyers tell us that even in this case, it's even more remote the possibility of being sanctioned because of it. It is in their opinion without any legal substance. We will have to wait until we see the judgment in court.
Okay. Understood. The lower likelihood implies that you haven't provisioned all the potential liability from the R2. That's my understanding.
Yeah. We have the Radiales fully provisioned in our accounts. It is probably disclosed. If you go to an annual statement. Even in the interim results.
You got that fully explained. Again, it's something that, despite of the opinion of our lawyers, you have to wait until the full appeal process is completed. We have a good opinion that we're not going to have to spend that amount of money which is being in first instance against us.
Okay. Thank you.
Thank you. The next question comes from Nicolas Mora from Morgan Stanley. Please go ahead.
Yes. Good morning, gentlemen. Actually, just one question for me. Can you please just clarify? I think the question was put that your debt expectations or net debt expectations for the end of 2021, and from there, how much do you genuinely think you have in terms of firepower for reinvestments looking into 2022? Putting aside the cash m anaged by Abertis. Are we talking about EUR 5 billion? Talking about EUR 4 billion, EUR 3 billion, EUR 2 billion? The range are quite wide. Any hints on where you think into 2022 you can set the cursor on reinvestment would be grateful. Thank you.
In terms of debt, basically, the debt we have obviously depends on the evolution of working capital. We think the last quarter of the year is always normally tends to be the best quarter in terms of working capital, so we'll probably finish the year with a significant lower debt than we have now. The exact amount will depend on many things, investments and what have you, but also working capital, which is probably the largest component. In terms of the firepower, well, we expect to get EUR 5 billion in cash from the divestment, EUR 4.95 billion or whatever. Obviously, we will probably devote this up to this amount in the investments.
Obviously, we depend on the opportunities and whether we invest more or less will depend whether we see more or less attractive opportunities. The firepower, in principle, is the amount that we were getting.
You don't consider you need from the, I mean, from the net position at the end of the year, you don't feel the need to pay back a fair amount of that debt and come back to a, to basically a quasi-net cash position?
Well, obviously, it depends very much on the investment opportunities. With the present cost of debt, I think we will get investment opportunities over a long period of time, which will be much more interesting than debt reduction. The debt that we have is very comfortable, we have three times EBITDA, and we don't have any problem. Obviously, from a net debt, from a practical standpoint, if we get the cash, the net debt will be reduced, from that standpoint, but that doesn't imply that we'll use the proceeds to cancel debt. The debt now has a cost level which is not necessarily urgent to cancel it. I think we will look to invest in new business who will generate revenue for the future, rather than using that to cancel debt. The debt will be canceled with the cash flow from the operation going forward.
Nico, just to remind you on the working capital evolution in the last three years, even the worst scenarios, we have been able to recover around EUR 1 billion every year. It's true that this year we're performing better in terms of previous years for the first three quarters, but I mean, it wouldn't be a surprise if we get around, you know, this figure for the year end. We aim to be neutral in working capital consumption.
All right. Excellent. Thank you very much.
Thank you. Ladies and gentlemen, let me remind you again, if you have any comments or questions, please press zero one on your telephone keypad. Once again, if you wish to ask a question, please press zero one on your telephone keypad. Thank you. The next question comes from Alejandro Vigil from Bestinver Securities. Please go ahead.
Thank you. Sorry, last question from my side is about the remaining Industrial Services portfolio. Revenues have been EUR 160 million in this nine months and EBITDA of EUR 76 million. Which is the nature of this EBITDA and revenues? Is it a recurring activity or is it just the one-off from disposals? You can give us any color about the recurring level of EBITDA contribution from this portfolio. Thank you.
Thank you, Alejandro. I think the EBITDA of this portfolio, I understand it's difficult to assess from the outside, mostly because it's a very diversified type of asset. You've got assets such as Manchasol, which is a thermosolar plant which is up to speed and generates significant EBITDA. Kincardine, which started recently and also is producing attractive EBITDA, and others which are under construction. I think we will have to wait until we finalize the transaction and at the same time try to gain time to complete some operations under construction, and we'll disclose the kinda in a pro forma what is going to be the same EBITDA and net income of this asset.
Because some of them are under construction, some are completed, so it's very difficult to give. There are very many small things. I think we have to, once the transaction is completed and we are able to focus on this, we'll probably give a view of what do we have, how it is performing. Again, most of them are available for sale, but we'll only sell them if we see an attractive price. Otherwise, we'll keep them. We'll provide you with the visibility on that.
All right. Thank you very much.
Thank you. The next question comes from Fernando Lafuente, from Alantra Equities. Please go ahead.
Sorry, Angel, just one last question on construction. You've posted quite strong margins in this Q3 on a separated basis, recovering versus Q2. What are your views on this construction, basically Dragados, I mean, your views on these margins going forward in this context of high cost inflation and supply disruptions, et cetera? Thank you.
It's probably on a quarterly basis, and obviously that depends very much on a yearly basis. I guess the margins really have not changed significantly. On a quarterly basis, if you compare one quarter with the previous one or with the same quarter last year, you might get discrepancies. I think the margins in construction will remain basically as they are. If anything, probably can be reduced a bit because the profile of the projects, we are focusing on reducing significant risks. It's more alliance-type of contracts, pre-development agreements, things where you share the risk with the client, and obviously risks are reduced, but margins probably will not increase by any means. This is basically the situation.
I don't think we've gotten, on a yearly basis, a significant change in the margins. It is basically, as you say, if you look quarter by quarter, it depends very much if a major project is finished and you get the pickup in the margin because you're finished with the project, but nothing significant.
Okay. Well, thanks.
Thank you. The next question comes from Daniel Gandoy from JB Capital. Please go ahead.
Yes. Good morning, Luis, Angel. My question is about the follow-up on the working capital issue. You maintain the guidance for a flat consumption of working capital in the year. I would like to know if this is including the factoring reduction, which you are mentioning, which to some extent could be considered to be extraordinary. If this target of break even includes the Hochtief group as well or if it's only ACS. Thank you.
Thank you, Daniel. I guess, basically, the objective is to get zero consumption in working capital, but without taking into consideration the factoring reduction. Basically the operational working capital, the objective is to get it basically at zero investment, and we'll see. This applies to the whole group, including obviously Hochtief with the American and Australian operations. This is the objective. We've been able to accomplish it in the last year, but let's see this year how it comes because it also affects, for instance, in the last month in Australia, there was a really a slowdown in the administration because the pandemic effect pick up significantly.
They closed some offices, so all the paperwork for the requisite orders were slowed down. I think we keep the same update, but we have to see at the end of the year how it comes. Basically, it's a working capital operation without taking into consideration the factoring.
Okay. Thank you, Ángel.
Thank you very much. There are no further questions. Dear speakers, the floor is yours.
Okay. Well, thank you very much then. If there are no further questions, I thank you again for joining the call, and if you have any further clarification required, give us a call. Thank you.