Spanish infrastructure firm creates single version of shorter annual report
For the past two years Ferrovial, the Spanish blue-chip company, has been producing integrated financial reports. The project has involved the whole company and has not only been beneficial for investors, but has also simplified the company’s reporting process.
Ferrovial is a large infrastructure company with projects ranging from a high-speed railway in California to toll roads in Colombia and Scottish airports.
The company’s investor relations team has been using a variety of tools to better serve the investment community and one of the most important documents for investors and analysts when making an investment decision is the annual report. In an effort to make this document more accessible and informative, the IR team joined forces with the control department to create a more comprehensive but shorter document.
‘The project involves the whole company,’ says Ricardo Jiménez, head of the IR team. ‘We sat down with the heads of each department to determine the value of their business.’
Integrated annual reports look beyond the economic impact of the company to the entire infrastructure of a company and the benefits it provide; for Ferrovial, this means society, environment, customers and employees.
Investor benefits
When the IR team sat down with the heads of the different departments it forced the executives to think critically and come up with two paragraphs about the value their department adds to shareholders.
‘We asked them, What is your focus? How do you add value to shareholders?, and then we made them give us some examples,’ Jiménez explains.
When creating a new annual report, Jiménez is conscious of a crucial aspect of investors’ lives: time. ‘Time is key to investors,’ he says. ‘Our reports used to be close to 400 pages long. Now they are about 170, and we are looking to [further] reduce that number.’
This has meant creating a succinct document that highlights the important numbers, with appropriate explanations, and the IR team has made sure there are graphics to easily break down the numbers.
Reporting simplification
The integrated annual report also means there is only one version of this important document. It is suitable for all the company’s governing bodies, making it easier on the financial compliance team as well as investors. Previously, Ferrovial was creating six versions of its annual report, explains Jesus Herranz, head of financial control.
‘The key challenge was the different reporting requirements,’ he says. ‘There was Spanish law, the integrated reporting requirements, and other [issues].’ He adds that he realized Ferrovial hadn’t been reporting its message clearly and globally.
The work has paid off: last summer the company won an award from the Spanish Association of Accounting and Business Administration for the business transparency the new integrated report provided.
Continual improvements
Ferrovial didn’t realize initially just how much work would be involved so, since 2014, it has started the process increasingly earlier in order to have time to double-check all numbers and include more statistics.
In September teams from Ferrovial were planning to sit down to talk about how to make their reporting more efficient. ‘The plan has been an important tool for integrating the company,’ says Jiménez. ‘It has been a good exercise in interconnection.’
