Afternoon, everybody, welcome to Ferrovial's conference call to discuss 2018 nine months financial results. Just as a reminder, both the results report and the presentation are available to you on our website. If you have any questions, you will have a Q&A session at the end of this call. With this, I will hand over to Ernesto López Mozo, Ferrovial CFO, who will be leading this call.
Thank you, Ricardo, good afternoon, good morning, everybody. Starting with the highlights for the nine months of 2018. With infrastructure assets, growth has been excellent. As we have said recurrently, the performance is better than what we expected in the Capital Markets Day last year around April. Also revenues are showing great performance. Double-digit EBITDA growth in the main assets, higher dividends from the 407 ETR and London Heathrow, also a strong start to the NTE 3B, also called I-35W. In construction, EBIT to sales margin is at 2.1%, along our expectations for this quarter. We expect improvement in the fourth quarter, cost pressure is the main point of uncertainty. We'll elaborate a little bit more along the presentation.
Services in line with expectations, mainly, of course, impacted by the Birmingham provision, trading in line with the margin provided ex Birmingham of 2% EBITDA to sales. Australia also performing along expectations. We had the end of the immigration contracts in 2017, we are performing in line with expectations with good cost effort. Ferrovial Services Spain, EBITDA grows at 3.5%, this is driven by the good performance of waste treatment and industrial maintenance activities. In cash generation activities, services focused on getting more dividends from their projects and services cashed in EUR 87 million, also asset disposals on a strategic of EUR 108 million. Let's start elaborating more on the different sections, before getting into them, just highlighting the proportional EBITDA figures that most of you like to see because it reflects better the proportional value of the company.
In terms of reported EBITDA, we have EUR 580 million if we take out the provision for the Birmingham contract. If we look into the proportional numbers, we reach EUR 1.2 billion, EUR 1,257 million of EBITDA. Here we see that the contribution of infrastructure assets is around 70%. This kind of growth of the EBITDA from infrastructure will keep increasing this proportion. If we move into the toll roads division, if we were to summarize what's going on, we can call it a spin-up, as the slide says. We have double-digit EBITDA growth. Around 50% of the EBITDA comes from the U.S. assets, looking at the consolidated numbers. We have higher dividends from all these toll roads, EUR 213 million, EUR 202 million were from the 407 ETR. That is close to 9% growth in Canadian dollar terms. Then the rest contributed EUR 11 million.
Of course, we do not have yet dividends from the managed lanes in Texas that will start next year. Also, I would like to highlight the opening of the NTE 35W managed lane with performance above expectations. Probably the best number to provide is the EUR 13 million contribution from an asset that started in July this year. When you look into the different graphs, the growth in terms of revenue and EBITDA on like-for-like terms is around 16%. We move on to the 407 ETR to look at it more in depth. There is a solid performance compared to last year, even though the weather conditions were much worse. During this quarter, we saw quite some heavy rains compared to the past year. If we were to quantify this effect, it would have been around 0.5% in traffic for the quarter.
Why is this asset performing so well? You see that traffic is growing close to 2%. Revenues are close to 10%, EBITDA higher. Well, we have a strong economic growth in the area, with GDP of the area growing at 2.3%. Population also growing close to 2%. Personal disposable income is growing above 5%, and inflation is also high compared to the European terms of 2.7%. If we add to this the fact that a lot of growth in terms of residential and business is happening close to the 407, that gives you an idea of the support for growth that the asset has. This translates into dividends, and not only looking this year compared to 2017. If we look into a two-year period, we see that it is growing above 8% CAGR. The performance is impressive as we know.
Very important if we move to the next slide that the performance is based on a great service and a great service compared to alternatives. So here we reproduce some of the highlights of the different customer satisfaction polls, and you can see that if you take into account the favorable answers vis-a-vis the competition, it had been a lot better or somewhat better. And you get responses that in terms of being faster to drive in, they have a 98% favorable response, reliable, 90%, well maintained, 81%, or safer, 78%. So this is good value for money for our clients and is supporting growth in the near future. Moving into the managed lanes, we have the consolidated numbers here for NTE and LBJ, and revenues, NTE growing at 21%, LBJ a little bit faster at 24.7%, EBITDA 23.27%, and you see traffic also growing.
Look at the evolution in the past years. We really have not seen this kind of initial performance on any road in the past, and the area keeps growing. So a good margin improvement with all the operating leverage that these assets show. If we move to next slide number nine, we can see also the support of the growth in the area, helping to perform on this outstanding manner. Employment is growing at 3.5%, population 1.6%, real GDP close to 4%, and household income is growing at 5.6%. So these indicators show the strength in the area, and the growth in population and employment will support the growth going forward. Let's move to the next slide where we give a little bit more color on the NTE 35W. Also, we have a map of the area that shows a little bit what lies ahead.
The NTE 35W opened three months ahead of schedule, the performance probably has to do with drivers knowing the roads and the area. Also the fact that there's more connectivity, as you can see in the map. Being more specific about the area of the NTE 3B, NTE 3A, you see that it's growing fast with the alliance area growing fast. We've experiencing higher capture rates and faster traffic recovery in this area compared to the others, NTE 1 and 2, and LBJ. In fact, NTE 3B, that opened first, more than tripled since opening one year ago. Very important to mention the different connections, right? The NTE 3B, NTE 3A will have more connections in the south, Downtown and I-30. That should continue to support getting more growth. Probably the NTE 1 and 2 is improving because of more feeding from the NTE 3A, NTE 3B.
In the map, I won't extend myself. I leave that for your producer. You have the different roads like the SH 183 or further improvements that could happen in the future in the I-635 that could make better flow, more connection, and don't have the construction works that could divert traffic at this point in time. The more connection we get, the more traffic we should be getting. At the bottom of the page, you can also see different logos from companies that have relevant logistic development in the area. All these bodes well for the future growth of the assets. Moving into airports, you saw the Heathrow release last week, you can see that in terms of revenues, traffic was strong, the main driver of revenue growth was retail income, with different initiatives to promote that.
In terms of aeronautical revenue, it could have been higher, there's some deal dilution due to incentives for quieter planes. Please remember that this kind of incentive is recovered two years down the road. Adjusted EBITDA also growing nicely, close to 2%, dividends at GBP 341 million for the whole of Heathrow, also healthy and along expectations. In terms of the regulated asset base, the high inflation that we are seeing increases the regulated asset base, this is also a natural deleverage for our participation there. Definitely it brings higher equity value. Growth has been widespread, as you see in the map, showing the appetite to connect through Heathrow, to fly through Heathrow. Looking forward to all the expansion work and efforts that the company is doing.
If we move into AGS, Aberdeen, Glasgow, and Southampton, here we have a very strong EBITDA performance on the back of also initiatives on retail income also cost efforts, because traffic has been affected by adverse weather conditions in winter that forced some closures in the airports. Also there's been some lower traffic from some low-cost airlines that are readdressing their schedules. EBITDA has grown healthily this year and also in the past. It's a good history of success for these assets. Let's move now from the infrastructure assets into the contracting area, starting with construction. Here we see, as I mentioned in the beginning, that the EBIT to sales is 2.1% at this point in time.
Probably the main driver of the performance is increased cost pressure, especially in Poland, that you could see yesterday and is expected to remain under pressure both in labor costs and material. Also, in the remainder international contracts, we also took some provisions for expected higher costs in the future. That's the reason why, even though we have reverted some provisions, the margin is not higher, because we have also provided for expected higher costs in some contracts. The fact that we've taken this initiative also helps to get a fourth quarter that could have higher margins. In remainder, also that in terms of order book, we are growing well. We still have some works to come into the backlog.
Recently, after the results close in October, we had the financial close of the Colombian toll road, Bucaramanga-Barrancabermeja-Yondó, this should also help to get more backlog in the future, not included in these numbers. If we move into the services, before getting into services, the summaries of the outlook for the fourth quarter is that margins should improve. Probably we won't get to the 3% because of these cost pressures, but we are expecting an improvement because we've taken care of some provisions for the future in some contracts. In terms of services on next slide, that is page 13, we see that we are performing in line with expectations. I would like to start with Spain. That is growing well, and this, as I said in the beginning, is helped by more treatment of waste and also industrial maintenance activities.
It's keeping margin quite high and has contributed to cash generation, as I said before, with some dividends from some of its projects. Services in Spain has some infrastructure maintenance projects, and they have provided healthy dividends. In terms of the U.K., excluding them, we have a margin of 2%. This also is looking probably for a better performance in the final quarter, helped by the incorporation of business with Carillion that was previously in joint ventures. In September, we had the incorporation of some defense maintenance contracts with Carillion. They added some EBITDA this quarter, around EUR 9 million, and we expect them to keep contributing in the last quarter. The other hand, we had some cost pressure from Milton Keynes. The plant started operating, but it has had some stop-and-go situations. With the stoppage, we have to basically redirect tons to landfills and that costs us.
That has cost something like £7 million in the quarter. Now the plant is operating, we expect with a more solid maintenance team to be able to operate more smoothly. Also we have some contracts where it's taking longer to get out. As I said, in line with expectations and expecting to improve in the last quarter of the year. Regarding Australia, we have the end of the last year of the RPC immigration contract, therefore we have less profitability this year because we don't have that contract anymore. We are trading along expectations in terms of margins with improvement in overheads. In terms of revenues, it's a little bit slower. It's not that the pipeline is not there, it's a little bit delayed. We remain with expectations for the backlog and to capture revenues for growth in the future.
Of course, for any newcomer to the story, we have in the results of the services division, the provision for the Birmingham contract we took this year of EUR 236 million. When we move into the net cash evolution ex-infra projects, just please remember that the infrastructure debt itself has no recourse to shareholders, and therefore we concentrate on the evolution of net cash or net debt at the ex-infrastructure projects level. When we look at the graph on page 14, we start with the net cash position at the end of December 2017, and we can see the contribution of dividends from projects, 407 ETR, and from the services projects I mentioned on the previous page. Of course, then we have the working capital evolution that was expected by us.
You see it's up here close to EUR 600 million, and it's due to advanced payments last year in Poland that basically affect this year's performance. Also in the U.K., there has been a reduction on the days of payment to suppliers by Amey, and we also have some works both in Poland and in the U.K. services that get collected more at the end of the year. This evolution was kind of expected, and we should see some reversal of this at the end of the year. What we can see is that divestments almost cover for investments, and we have dedicated EUR 302 million to shareholder remuneration along this time.
Please bear in mind that also today the board approved the details for the second scrip dividend that will take place along November, all the trading of rights and the final payment of cash to the shareholders that decide to take the cash. This will happen along November. You have all the details on the web, basically as announced at the general shareholders meeting. No news there. In terms of debt, we move to the next slide. I think it's worth just to focus on sensitivity to higher interest rates risk. That is something that many of you bring up in different meetings. Well, you can see on this slide that basically we have our debt substantially in fixed terms, and therefore we have only in floating our cash. When rates go up, we tend to do better.
Actually, part of the good financial performance in terms of expenses is the higher remuneration of our U.S. dollar cash position. That is helping results this quarter. When we look into the sensitivities on page 15, as I was mentioning, you see that an increase of 100 basis points on interest rates on the debt, it would mean something like EUR 7 million higher financial expenses, but financial income would also be higher by EUR 50 million. We would get EUR 43 million of net result and net cash if rates were to go up. Of course, this is a constant debate in the market. Before getting into the concluding remarks, you will probably also see a press release with some changes in the management committee. Enrique Díaz-Rato, the CEO of Cintra, is leaving the company as expected.
Basically, he reached his date that he discussed with the company for retirement a long time ago. I would like to thank him for really all the value creation that he has helped to contribute the company. Just remember all the improvements on the 407, customer segmentation, customer satisfaction, all the growth operationally and financially. The managed lanes, the way he could manage to get these assets on, and also all the innovation around them in terms of pricing and all the sophistication regarding that. Thanks for all. All the best for your new ventures, Enrique. He will be substituted as was long planned by the company, by Alejandro de la Joya, that was the current CEO of the construction division.
This goes according to the plans of the company, and also keeps going with the strategy that we have in plan of more capital allocation to infrastructure. No change in the strategy, and welcome Alejandro in the new role, a long-time plan. Substituting Alejandro will be Ignacio Gastón, that is the current successful CEO of the services division in Spain. Also a civil engineer that basically was in the construction division a long time ago before getting into services. Both Alejandro and Ignacio have been for a long period of time with the company, and we wish them well in their new positions. Okay. Everything as normal as expected. I just wanted to share that with you rather than you reading the press release. Okay. We move into the conclusions for the results. The summary is quite easy.
The strong performance from the infrastructure assets performing better than what we expected, even in our more optimistic scenarios. Growing dividends that we were expecting, probably accelerating a little bit. The third runway is very important for Heathrow Airport and the U.K., and looking forward to delivering that. The full opening of the NTE 35W, that is also a corroboration that these assets are really something that customers like and deliver an important service in the region. Looking forward to reducing risks in contracting with more capital allocation on infra, mainly in the U.S. Of course, we cannot forget that we are looking forward to more dividends from infrastructure, NTE, and LBJ in the coming years. Okay. Thank you for all your attention. Maybe it took a little bit longer. We open now the floor for Q&A.
Ladies and gentlemen, if you would like to ask a question, please press star followed by one on your telephone keypad now. If you change your mind, please press star followed by two, and when preparing to ask your question, please ensure your phone is unmuted locally. As a reminder, that is star followed by one to ask a question. Our first question today comes from Vittorio Corelli from Santander. Please go ahead.
Hi. Good evening, gentlemen. Thank you for receiving my questions. The first one is related to the possible sale of the service unit. Which is the ideal perimeter, according to management, that could be on sale? Which is the rationale behind the change of the strategic view about the service unit? The second question is related to the coming tariff reset at Heathrow, if you can guide us through the recent developments and what to expect in terms of returns and tariff, if you have an idea. The last one is related to the EUR 600 million of net working capital absorption. How much of this is related to construction and how much of this is related to services, and what to expect by the end of the year? Thank you.
Okay. Hi, Vittorio. Thanks for the questions. Well, as we said in the communication to the market regarding services, we said we are analyzing potential sale of the whole or part, or maybe not even a sale of the division. Our plans really are for an improvement of the services performance that could be quite substantial in the coming years, and therefore there's no decision yet. Right? As I said, the strategic rationale is we focus more on the infrastructure investment now, where we think we have some good competitive advantages. The reason for focusing on infrastructure is clear. We create a lot of value there. Regarding services, there's no final decision, right? The only thing I can comment is what was mentioned in that communication. Right? Regarding Heathrow, you were asking probably about regulation coming forward, the kind of tariffs. I didn't get the question right.
Probably if you could redo that again, the question on tariffs on Heathrow, and I will take the next one in terms of working capital consumption. We usually don't break this down, but it's fairly split between services and construction. In construction, the main driver being Budimex. In services, the main driver being Amey. Right? As I said, both of them tend to have an improvement at the end of the year in services because some of the milestones, in particular in consulting works, happen more at the end. And rail, sorry. It's happened more at the end of the year, and in construction in Budimex, usually you have also more collections and advanced payments at the end of the year. Without getting exactly into the number, the scale is very similar in both. Right?
If you could, Vittorio, say again the question on Heathrow, I couldn't get it correctly.
Yes. Very simply, if you can give us an idea what to expect about the new tariff reset for the next regulatory period, according to your latest conversation with the regulator. If you can give us an idea what could be the return on the investment, so the work.
No. Basically, there's going to be exchange of information with the regulator and with the advisors in the coming months. There will be ranges, there will be discussions. There could also be commercial discussions with airlines. It's too early to discuss this. As I said, there will be information on ranges, but final numbers on this probably will come second half of 2019. There's still some way to go.
Okay.
Well, before the next question, if I may, we got a question through the web. It's a clarification on EBIT margins. The guidance we provided was for the full year, right? When we say we are likely to stay better than 2.1 but short than 3%, probably it's for the whole year, not for the specific quarter. Just that clarification. Thank you. Next question, please.
Our next question today comes from Guillermo Fernandez from Kepler. Guillermo, please go ahead.
Good afternoon. It's Guillermo from Kepler. I have three questions. First one would be regarding the divestment process of the 7% stake in the ATR by one of your partners, SNC-Lavalin. I would like to understand if Ferrovial has some kind of preferential rights, given you are the main shareholder there. What would be your intention, if you could consider investing and getting hold of the 7% stake. Second one would be regarding the working capital. I know you already answered to Vittorio, but last year you recovered more than EUR 600 million in Q4. My question would be if we could expect something similar to that in 2018. Probably the last one is regarding the margins, both as construction and services.
More than in the Q4, my question would be if you consider sustainable the level of margins you are going to close this year looking into 2019? Thank you.
Thanks, Guillermo. Okay. Regarding the divestment process of SNC-Lavalin, I cannot comment on the shareholders' agreement. It's confidential, therefore, I cannot give you any information on that regard. Regarding the working capital recovery, last year, we had the benefit of some financial closings that provided good advance payments for the construction division. We don't have the sort of financial closing, so it's going to be difficult to reach this level of last year recovery. Okay. The third one regarding margins in construction and services. I mentioned in the past conference call that we didn't expect improvements for next year in construction, but it's early. We will be working on the budget in the coming weeks, probably the time to update our view here is on the conference call with the year-end results.
Thank you.
Next question today comes from Stephanie D'Souza from RBC. Please go ahead. Stephanie, your line is now open. Next question today comes from Olivia Peters from Macquarie. Please go ahead, Olivia.
Hi. Good evening, everyone. Thank you for taking my questions.
Olivia, sorry to interrupt. I mean, we are getting nothing. I don't know if you could get close to the microphone, do something regarding that.
Is that better?
Much better. Thanks.
Okay. Sorry. Excuse me. Okay. My first question is on the 407. I was just wondering, and I don't need you to be specific, if there has been any changes to the shareholder agreement. Also, what makes you think that the disposal this time around will be more successful than obviously the last attempt back in 2015? That's my first question. My second question is on the construction, the consensus in terms of the EBIT. Obviously, you're saying we're not going to get to the 3% margin target for the full year, which you kind of guided to at the first half in any case. It seems that the consensus is expecting a further margin improvement in 2019, and I'm wondering how confident you are that you can get there in next year given the cost pressures you're under. Thank you.
Well, thanks, Olivia. Regarding the 407 process, I cannot comment. I mean, it will depend on SNC willingness and how they design the process, if they decide to carry it out, right? I cannot comment on that. It's a question for them. Regarding the construction, EBIT to sales, as I mentioned in the past conference call and today, I don't see a really improvement for next year at this point in time. I would like to take the benefit of analyzing a little more the budget, and update at the year-end conference call. At the moment, I don't see improvement.
Can I just follow up with one more question? Just on if you do sell all or part of your services business, in terms of the capital allocation, you've obviously said that you wish to deploy that into infrastructure assets. On that basis, you very helpfully listed out all the infrastructure projects that you're bidding on in the U.S. Are there any where we can expect a decision fairly imminently on those tenders?
No. Probably the first tenders we'll be looking at for the second half of 2019. Maybe some smaller projects could come in the first half, no, not imminent.
Any potential transaction probably would be done in 2019, not before year-end.
Okay. Thank you so much.
Okay. Thank you.
Thank you.
Our next question today comes from Marcin Wojtal from Bank of America Merrill Lynch. Marcin, please go ahead.
Yes. Good afternoon. Thank you for taking my questions. Just first, a couple of just technical questions on construction. First, can you provide us with a balance of provision reversals and the new provisions created for the nine months? And then, my understanding previously was that the improvement in construction margin for the second half was supposed to be held by provision reversals, probably on that new managed lane project that you completed. Can you confirm if that is correct? And I am actually interested to know if there were any provision reversals on that major project already in Q3, or you are keeping that for Q4? And maybe one more question regarding the pipeline. You are mentioning two projects in the state of Maryland, two complex greenfield motorways. Can you confirm that those are managed lanes or similar to managed lanes?
More broadly, are you seeing more states in the U.S. potentially looking to adopt this model? Are you seeing a more significant pipeline of those complex projects for Ferrovial for the next two to three years?
Okay. Thanks, Marcin. I'll take the ones regarding construction. Then I'll pass on the pipeline prospects to Paco from Cintra. Well, without giving you the specific number on the technicalities of construction, I'll give you answers to some concepts. Right? We have reverted provisions for end of works in Poland and also in Spain. Also we have recognized some higher margin for the construction ended in the U.S. These are the substantial numbers, but we have taken the similar amount, substantial hit, for expected losses due to increased costs in some international works. This is spread into some different works, right? Yes, we are starting to revert provisions that we were expecting. We are being prudent on the cost outlook.
That also means that it's not costs that have been incurred recurrently, but kind of one-offs as a result of why we expect some improvement on the fourth quarter. Okay. I'll pass it on to Paco for the pipeline.
As of the pipeline in the short term, which is for the next 24 months, we have screen projects totalizing up to 26 projects, which means roughly between EUR 35 billion and EUR 40 billion of investment. Out of that, those 26 projects, we expect that something like between four and five will be managed lanes, and the rest will be availability payments. In terms of geographics, six out of the 26 will be in the U.S., in Europe, roughly 12, and the rest will be splitted between Australia and Latin America, mostly Chile and Colombia. In regards of the calendars, most of them will be in the second part of the 2019 and in the 2020. Thank you.
All right. Yeah. Thank you.
As a reminder, ladies and gentlemen, that's star followed by one to ask any further questions.
Sorry.
We have a-
We received email question concerning our margins that is asking about the decrease compared with the first half of the third quarter in Webber. Also is due, as we have commented, for the main markets in U.S. and Poland. Also in U.S., due to the high activity, we are being impacted also for increase of cost in labor and materials in several projects. Not so much, but it's small decrease compared with the previous half.
This question was from Alexandra Pereira. Also just to add that some of the big projects are starting production now, and we don't recognize margin in the beginning. That's an example with the Grand Parkway project in Houston.
Yes.
The next question today comes from Luca De Rizzi from Milan, Anima. Luca, please go ahead.
Good afternoon. I have two questions to ask. The first concerns your relationship with the rating agency. What are your next steps to support and possibly to improve your rating? The second question concerns your consideration regarding the issue of hybrid debt. Do you think at the moment you create a curve with other issues over time, or it was a single event? Thank you very much.
We didn't get the last question. Well, the first one regarding the rating, we are at triple B stable and looking to remain that way, right? This is the kind of level where we feel comfortable operating internationally, right? Regarding the question with issuance and tenors, could you repeat that, please?
Yes. I was asking if you are confident at the moment that the hybrid debt commission would be a single event or do you think to create a curve with other issues over time as other players have done in the past, like Telefónica, like Orange, like Volkswagen. Thank you very much.
Okay. The question was regarding hybrids. No, there's no plans for further hybrids. When the time comes close to the call option, that would be the time to think about hybrids. Not at the moment. That call date, it's 5 years since inception, if I'm correct, maybe slightly higher. The next issue we have in hand is a regular bond maturing in 2021. Next question, please.
The next question today is a follow-up question from Vittorio Corelli from Santander. Please go ahead.
Hi, Ernesto. Apologies for the follow-up. Do we have any one-off in the account below EBITDA? Because I saw a deviation just above EBIT in the third quarter, which does not fit to forecasts, probably in the impairment just below D&A. Second question for up is related to the provision of Birmingham. Should we expect somehow in the future, a reverted provision related to the EUR 230 million that we had this year? Thank you. Sorry again.
Regarding the question below the line of divestment, the sale of the different participations from services mainly that I mentioned, that brought something like EUR 100 million in cash. In terms of results, was something like EUR 28 million in terms of impact. Also we have a small sale by Budimex of Elektromontaż Poznań, that is a machine operator. It was EUR 10 million, the impact at that level. You have that is kind of different from other quarters. Okay. Regarding the Birmingham provision, I guess it was, no comments for the time being. There's different talks about the parties for the future of the project, but I don't have any update that I can share with you at this point in time.
Okay. [Foreign language]
We now have a follow-up question from Guillermo Fernandez from Kepler. Guillermo, please go ahead.
Yeah. Hello. Sorry. As well, a follow-up. This time on the margin of Amey. I checked that for the Q3, you were already at 3.2% EBITDA margin. The guidance for the full year was from 2%-3%. If I remember correctly, you were quite confident in last call that you would get to the upper range of this 2%-3%, taking into account the Carillion contracts that are contributing from September. The question is, if we should still expect for you to reach the upper range of the EBITDA margin guidance, so this around 3%, taking into account Carillion contracts.
Thanks, Guillermo. I don't remember saying upper range, but it doesn't matter. We expect improvements as to the Carillion contracts, the main driver up and down would be the operations, if they remain smooth of Milton Keynes. As I say, when you start operating this kind of plant energy from waste, you could have different stoppages, right? If it runs smoothly, would be one margin. If not, the other, but we think we can deliver on this regard of range of margins.
Okay, thanks.
Next question, please.
The next question today comes from Robert Crimes from Insight. Robert, please go ahead.
Yeah. Hi. Just wondering if we could have some clarification on the legal structure of the Birmingham PFI. If the losses continue in kind of a relatively worst case scenario, are you under any legal obligation to continue to support the Birmingham PFI? Or is it kind of typical as with a PFI project, where in a worst case scenario, you could walk away from it? Thank you.
Okay. This typical PFI structure has different caps on the obligations. One of them is during the CapEx phase, where we are still in. That cap applies. If we move from this CapEx phase to others, it would be a different obligation. Yes, now we have a cap rather than say we can walk away. No, we have a cap on the liabilities.
After the CapEx phase finishes, there's more potential if losses continue to potentially think about walking away.
After the CapEx cycle, if you sign off, you have caps that apply every year. Every year are reset. You have, let's say, a one-year obligation every year.
Okay. Thanks.
Thank you.
We currently have no further questions, I'll hand back to the team.
Well, thank you all, I'm looking forward to meet you in the following days. Thank you. Bye-bye.
Ladies and gentlemen, that does conclude today's call. Thank you for joining. You may now disconnect your lines. Have a lovely day.