3.A.[Reserved]
3.B.Capitalization and Indebtedness
Not applicable.
3.C.Reasons for the Offer and Use of Proceeds
Not applicable.
3.D.Risk Factors
You should carefully consider the risks described below, together with all of the other information in this Annual
Report, our consolidated financial statements and related notes. Our business, financial condition, and results of
operations could be materially and adversely affected if any of the risks described below occur. As a result, the market
price of our ordinary shares could decline, and you could lose all or part of your investment. This Annual Report also
contains forward-looking statements that involve risks and uncertainties. See “Cautionary Statement Regarding
Forward-Looking Statements.” Our actual results, business and financial condition could differ materially and
adversely from those anticipated in these forward-looking statements due to certain important factors, including the
risks facing our Group. Additional risks and uncertainties not presently known to us or that we currently deem
immaterial also may impair our business operations.
3.D.1Business Environment and Macroeconomic Factors
3.D.1.1Major conflicts, acts of violence and geopolitical unrest could have a negative impact on our business.
Conflict regions, or the occurrence, or threats, of violence (including terrorism), at or close to our activities could
adversely affect our business, financial condition, results of operations, and prospects.
2
For example, the closure of Russian airspace and corresponding FAA (Federal Aviation Administration) overflight
restrictions are causing the U.S.–China market to remain well below pre-COVID levels, impacting New Terminal One
at John F. Kennedy International Airport (“NTO” or “NTO at JFK”) traffic estimations. NTO has significant exposure
to Asia traffic and China in particular, and normalization of these factors is critical for demand. Our activities in
Poland (through the construction business of Budimex S,A - “Budimex”), as a neighboring country to Ukraine, are at
an increased risk of being disrupted by the conflict. While our revenue generated in Poland, which, in 2025, amounted
to 23.3% of our revenues was not materially affected as a result of the conflict, the risk that such impact may
materialize in the future cannot be excluded. Besides Budimex, the Construction Business Division is particularly
vulnerable to such effects due to the potential impact the conflict could have on raw materials within the surrounding
area, including cost increases of certain materials and decreased availability.
The ongoing conflicts in Ukraine and in the Middle East have also adversely impacted the world economy and
markets. For further discussion on the impact of macroeconomic factors see “—2 Slow economic growth or economic
contraction adversely impacts demand in the sectors and industries in which we operate; and —7 We operate in highly
regulated environments and those regulations are subject to change, which could have a material adverse effect on our
business, financial condition, and results of operations”.
And further, for example, a serious public order incident took place in December 2025 at our toll road concession Ruta
del Cacao in Colombia (where we hold a 30.0% stake), at the La Lizama toll station, that involved a discharge of
firearms and detonation of an explosive device resulting in injury to an individual, the destruction of the La Lizama
toll infrastructure, and temporary suspension of toll operations. While the overall impact to the Company was limited,
other similar types of violent events or threats thereof could have a material impact on our operations and business.
Moreover, we do not have insurance to cover all of our liabilities related to such hazards or operational risks. The
occurrence of a significant uninsured claim, or a claim in excess of the insurance coverage limits maintained by us,
could harm our business, financial condition and results of operations.
3.D.1.2Slow economic growth or economic contraction adversely impacts demand in the sectors and industries in
which we operate.
A slowdown or contraction in economic growth is generally connected to a reduction in the use of, and related income
from, highways and air travel which may in turn have a negative impact on the availability of future projects to
expand, manage or build highways and airports. A slowdown in economic growth or economic contraction in a
country or region in which our businesses operate may have a negative impact on our business, financial condition and
results of operations.
3.D.1.3An inflationary environment could have an adverse effect on our business, financial condition, and results
of operations.
In our airports and highways businesses, periods of high inflation combined with low or negative economic growth,
could significantly impact demand which could offset additional revenue generated by permissible tariff and non-
regulated income increases. This decline in demand may stem from reduced disposable income, higher tolls or
airfares, and other inflation-driven pressures that impact affordability and customer behavior.
Increases in inflation may also have an adverse effect on operating margins under certain of our construction contracts
due to increases in the cost of raw materials and energy, which may affect expected profitability, especially in design
and build projects where such risk may not be hedged, or mitigated by contract, from the effects of inflation, which
could have a material adverse effect on our business, financial condition, and results of operations. Price volatility may
also introduce uncertainty for our renewable energy business, as counterparties may be disincentivized from
punctually negotiating long-term off-take agreements in an uncertain price environment, any of which could impact
our ability to generate predictable cash flows and achieve expected rates of return from our investments.
In addition, if real rates (interest rates adjusted for the effects of inflation) increase, the value of our assets may be
affected, as the effect on present value of discount rates could offset the benefits of inflation in our concessions.
Furthermore, lower than anticipated or estimated inflation rates may hinder the implementation of anticipated price
increases across our business divisions, negatively impacting future financial performance.
3.D.1.4Exchange rate fluctuations could have a material adverse effect on our business, financial condition, and
results of operations.
We have exposure to foreign currency, mainly to the Canadian dollar, the U.S. dollar, the Indian rupee, the Polish
zloty, the pound sterling, the Chilean peso, the Colombian peso, and the Australian dollar.
3
Our foreign exchange rate risks arise primarily from:
(i)our international presence, through our investments and businesses in countries that use currencies other than
the euro and the expected return that will be generated in local currency;
(ii)debt denominated in currencies other than that of the country where the business is conducted or the home
country of the company incurring such debt; and
(iii)trade receivables or payables in a foreign currency to the currency of the company with which the
transaction was registered.
In analyzing sensitivity to exchange rate effects, we estimate that a 10% appreciation in the value of the main
currencies in which the Group holds investments against the euro at year-end 2025 would have an impact on our
equity attributable to shareholders of EUR 382 million, of which 43% would relate to the impact of the Canadian
dollar, 9% to the U.S. dollar and 26% to the Indian rupee.
Although we enter into foreign exchange derivatives to cover certain future expected operations and cash flows, any
current or future hedging contracts or foreign exchange derivatives we enter into may not adequately protect our
operating results from the effects of exchange rate fluctuations which could have a material adverse effect on our
business, financial condition, and results of operations. We are subject to the creditworthiness of, and, in certain
circumstances, the early termination of the hedging agreements by, hedge counterparties.
We cannot assure that future exchange rate fluctuations will not have a material adverse effect on our business,
financial condition, and results of operations.
3.D.1.5Interest rate fluctuations may affect our net financial expense, which could have a material adverse effect
on our business, financial condition, and results of operations.
Interest rate fluctuations may impact our net financial expense due to the variable interest on financial assets and
liabilities, as well as the measurement of financial instruments arranged at fixed interest rates.
97% of our indebtedness is hedged (either by a fixed rate or by derivatives). The rest of the indebtedness bears interest
at variable rates, generally linked to market benchmarks such as EURIBOR, Secured Overnight Financing Rate
(“SOFR”), Canadian Overnight Repo Rate Average (“CORRA”), and Sterling Overnight Interbank Average Rate
(“SONIA”). Any increase in interest rates would increase our finance costs relating to variable rate indebtedness and
such increase may not be offset in part or at all through any hedging arrangements to cover interest rate fluctuations
which we may enter into.
For example, a linear increase of 100 basis points in market interest rate curves as of December 31, 2025, and 2024
would not have a significant impact on the income statement. This impact would be offset by any increases in financial
results due to the expected higher return of cash held by us as of that specific date.
In addition, interest rate fluctuations could increase the costs of refinancing and of issuing new debt. This interest rate
fluctuation risk is particularly important in the financing of infrastructure projects and other projects, which are
heavily leveraged in their early stages and the performance of which depends on possible changes in the interest rate.
Furthermore, any current or future hedging contracts or financial derivatives entered into by us may not adequately
protect our operating results from the effects of interest rate fluctuations, which could have a material adverse effect
on our business, financial condition, and results of operations. We are also subject to the creditworthiness of hedge
counterparties and, in certain circumstances, the early termination of the hedging agreements by hedge counterparties .
We cannot assure that future interest rate fluctuations would not have a material adverse effect on our business,
financial condition, and results of operations.
4
3.D.1.6We depend on public and private sector projects in the countries in which we operate, and changes in
financial, economic and tax policies, such as a decrease in fund allocation towards such projects, may adversely
impact our project volume, which could adversely affect our business, financial condition, and results of
operations.
Our ability to develop new projects, including in our Highways Business Division, Airport Business Division and
Energy Business Division, depends highly on government infrastructure strategy and the continued availability of
attractive levels of government funds, and incentives to attract private investments, especially, as it pertains to public-
private risk sharing in connection with private highways development. For instance, in the United States, we currently
benefit from the Transportation Infrastructure Finance and Innovation Act (“TIFIA”)’s credit assistance program as
granted by the United States Department of Transportation to stimulate investment in transportation infrastructure. Our
Highways projects in the United States have been granted funds through different financial instruments under the
TIFIA credit assistance program (for a description of the credit assistance received, see “Item 5. Operating and
Financial Review and Prospects—B. Liquidity and Capital Resources—8. Financing”). As of December 31, 2025 the
balance of these TIFIA loans is USD 2,386 million.
Similarly, our Construction Business Division depends on public sector projects and in 2025 clients from the public
sector accounted for 84% of the total Order Book of our Construction Business Division, (for further information on
the Construction Business Division’s clients, see “Item 4. Information on the Company—B. Business Overview—3.
Group Overview—3. Our Business Divisions—3. Construction Business Division,” and for a discussion of how we
determine Order Book” see “Item 5. Operating and Financial Review and Prospects —A. Operating Results —8. Non-
IFRS Measures and Other Key Performance Indicators: Operating Results”).
Private sector projects may also decrease in number and/or scale in connection with declines in government projects or
changes in government strategy, or independently, and our businesses are exposed to loss of revenue if such works
never commence, are delayed or cancelled. Delays of our ongoing private sector projects or public sector projects from
originally scheduled opening date, including, for example, the expected delay in completion of the first phase of
construction at NTO, may adversely affect our future participation in such projects or project volumes generally.
For these reasons, continued or further decreases in the spending on the private sector or public sector projects by
governments and local authorities in the markets in which we already operate, or in those in which we could operate in
the future, has in the past, and could in the future, adversely affect our business, financial condition, and results of
operations.
3.D.1.7We operate in highly regulated environments and those regulations are subject to change, which could
have a material adverse effect on our business, financial condition, and results of operations.
We must comply with both (i) specific aviation, toll road, waste management and treatment, public procurement, and
construction and energy sector regulations, as well as (ii) general regulations in the various jurisdictions where we
operate. Each jurisdiction where we provide our services has a different regulatory risk profile and may present
different regulatory challenges, including political and social tensions, legal uncertainty, local content requirements or
increased tax pressures.
It is possible that new laws, regulations and other requirements, or amendments to or changes in interpretations of
existing laws, regulations and other requirements, may require us to incur significant costs, implement new processes,
or change our handling of information and business operations, which could ultimately hinder our ability to grow our
business and could adversely affect our business, financial condition, and results of operations.
For example, our ability to conduct business can be impacted by changes in tariffs, changes or repeals of trade
agreements or the imposition of other trade restrictions, including sanctions, or retaliatory actions imposed by various
governments. For example, the United States and other countries have proposed new and increased tariffs on imports,
and any new tariffs have been and continue to rapidly evolve. The state, duration and scope of any tariffs or
restrictions are uncertain and unpredictable and could lead to increased costs and affect our strategic planning and
financial forecasting. As a result, we may face supply chain disruptions and delays that could negatively impact our
businesses.
Also, in our airport division, changes in domestic or international regulation, such as international trade liberalization
developments (e.g. Open Skies), government intervention like restrictions on the use of certain aircraft imposed by
national regulatory safety bodies, efforts to decarbonize air travel, including potential limitations to airline and airport
capacity or increase in airfares or new taxes could affect flight demand.
5
A third example is the highly regulated energy sector. Changes in energy markets regulation could have a material
effect on both the short-term and long-term results of our business, as they can lead to variation in our financial
condition as well as income and costs of operation of our projects. Contractual allocations of risk may not limit the
impact of such changes as they may not be contemplated at the relevant time, or may not be commercially feasible, or
could result in disputes with our customers.
For additional discussion of legal, regulatory and litigation risks see the risk factors discussed under the heading
“Legal, Regulatory, and Government Contracting” below.
3.D.1.8We may face increased risks due to climate change and its impact, which could have a material adverse
effect on our business, financial condition, and results of operations.
We may be subject to physical and transitional risks to our business in connection with climate change and its impacts.
While in some cases these categories of risk may overlap, physical risks to our businesses include extreme weather
events that may adversely affect our infrastructure, maintenance, and progress of ongoing projects, as well as future
identification and development of projects and opportunities. We may be forced to discontinue certain operations due
to physical damage to infrastructure, productivity may decrease under certain extreme weather conditions, and hedging
and insurance premiums relating to climatological events may increase due to higher frequency or impact of climate-
related events. In addition, global trends related to climate change and extreme weather events may result in further
economic, regulatory, technological, reputational impacts and consumer behavior changes, and may require us to
reassess our operations or incur additional costs as we respond to transitional risks associated with climate change.
Any of the above factors could have an adverse effect on our business, financial condition, and results of operations.
3.D.1.9Natural or man-made disasters and health emergencies may disrupt our business
Our operations and assets cover a broad geographic scope and extreme weather conditions in areas in which we
operate, such as hurricanes, high winds, flooding, water scarcity or drought, extreme heat and cold, snow or ice storms
and other extreme weather events, as well as disease outbreaks or pandemics or other health emergencies, as well as
major earthquakes or fires (including in each case the reactions of governments, markets, and the general public), may
result in disruptions to or inability to continue our operations, and may result in damage to our infrastructure or
reputational harm, any of which could have adverse consequences for our business, and results of operations.
Health emergencies such as Covid-19, including government mandates, lock-downs and other actions taken in
response thereto, have been in the past, and could be in the future, particularly impactful on our businesses as they
have the capacity to impact traffic flows, construction activities, availability of labor, supply chains, and planning,
among other potentially unknown impacts. If such a risk or risk of a similar nature materialized in the future it could
have adverse consequences for our business, operations, and results of operations.
Moreover, we do not have insurance coverage to address all of our liabilities related to such hazards or operational
risks. The occurrence of a significant uninsured claim, or a claim in excess of the insurance coverage limits maintained
by us, could harm our business, financial condition and results of operations.
3.D.2Business, Structure and Industry
3.D.2.1Our business is derived from a small number of major projects, which, if terminated or otherwise
materially affected, may have a material adverse effect on our business, financial condition, and results of
operations.
Our main projects in terms of valuation and equity invested are (i) in the Highways Business Division, the 407 Express
Toll Road (the “407 ETR”) and several managed lanes projects such as the North Tarrant Express toll road (“NTE”),
the North Tarrant Express 35W toll road (“NTE 35W”), the I-66 toll road (“I-66”), the I-77 Express lane (“I-77”), and
the Lyndon B. Johnson Expressway (“LBJ”) and (ii) in the Airports Business Division, the NTO. According to market
analysts’ reports, Highways and Airports amounted to approximately 89% of our valuation as of December 2025.
On June 6, 2025, Ferrovial completed the acquisition of approximately 3.3% of the common shares in 407 ETR from
affiliates of the AtkinsRéalis Group Inc., and exercised its call option to acquire an additional 1.76% on June 11 2025,
having received all requisite approvals. After this acquisition, Ferrovial ownership in 407 ETR increased to 48.3%. For
further details on this acquisition, see “Item 4. Information on the Company—A. History and Development of the
Company—1. Summary of Historical Investments and Divestments—1. Acquisition of an additional 5.06% stake of
407 ETR.”
6
NTO has been informed by the contractor that the completion of the first phase of construction will be delayed from
the originally scheduled opening date of June 2026. The contractor has communicated that it is currently targeting the
completion date for the first phase of construction to occur during Fall 2026. Ferrovial continues to monitor the
process and timeline to complete the first phase of construction. The expected delay in the completion of the first
phase of construction has the potential to trigger various contractual rights and obligations of NTO (including the
presentation of a remedial plan under the NTO Lease) and its counterparties in connection with this project and,
depending on the determinations and actions under these arrangements, may have significant adverse consequences for
NTO, including potential penalties and damages claims pursuant to those arrangements. The expected delay or any
other developments in the construction of NTO could have adverse impacts on NTO and Ferrovial, including
reputational impacts on NTO and Ferrovial and impacts on NTO’s relationships and prospects with airlines and
vendors, and may adversely affect ongoing and future negotiations in relation to NTO or other public or private sector
projects. Any of these developments may have a material adverse effect on our business, financial condition and
results of operations.
We cannot guarantee that any of the aforementioned projects, or our performance thereunder, will not be terminated or
otherwise be materially affected by developments outside of our control such as regulatory developments, the public
and/or governmental nature of our clients in all of the above-mentioned projects, impacts of inflationary pressures,
foreign exchange rate fluctuations, factors affecting traffic and infrastructure use, adverse weather, availability of
financing on favorable terms, performance by contractors or other third parties or other conditions or risks, including
the other risks identified in this Annual Report on Form 20-F. Due to the importance to our business of a relatively
small number of projects, the termination or significant alteration of the terms of any of these projects, or any material
change to their performance could potentially have a material adverse effect on our overall business, financial
condition, and results of operations.
3.D.2.2.We operate in a global market that is highly competitive and where high value opportunities can be scarce.
Most of our competitors are multinational companies bidding on projects worldwide, which places the competitive
focus on the attractiveness of each individual project as opposed to its geographical location. The market for
infrastructure development and operation projects is highly competitive and is exposed to political, macroeconomic,
and social factors that are difficult to predict and manage as described elsewhere in these risk factors in detail.
In addition, in the United States—our core market for toll road investment—we expect competition to intensify over
2026–2027 as several projects enter the procurement phase. For example, we have already been shortlisted for
opportunities such as the I‑285 East Express Lanes in Georgia, the I‑24 Southeast Choice Lanes in Tennessee and the
I‑77 South Express Lanes in North Carolina. Other upcoming initiatives, including the I‑285 West Express Lanes in
Georgia, are also expected to attract significant interest from international developers and infrastructure funds. While
these projects represent strategic growth opportunities, heightened competitive pressure may limit our ability to secure
awards on terms that align with our investment requirements, or at all.
The lack of investment opportunities in some geographies has pushed capital flows towards markets in which we also
operate, increasing the competitive tension within those markets and resulting in pressures on prices and profit
margins in projects in which the customer risk transfer dynamic is not balanced. These circumstances may have an
impact on the achievement of our growth objectives.
In recent years, the construction sector at an international level has been experiencing low profitability margins, which
we believe to be partly driven by aggressive commercial strategies, imbalances in customer risk transfer, and cost
inflation. In addition, the increase in infrastructure-focused investment funds requiring lower rates of return in their
investments, coupled with these funds’ readiness to take on more segments of a project’s value chain, may increase
competition in our target markets.
Technological developments in terms of digitalization of processes may also pose a risk to our business if our
competitors develop an advantage over us in this area. Specifically, if we fail to develop differential competitive
capabilities at the same or a faster pace than our competitors due to, for example, the rapid deployment of generative
artificial intelligence, this may pose a significant risk to our business, financial condition, and results of operations, as
the engineering and construction industry is highly dependent on technology. Failure to adequately keep up with
technological advances could result in our decreased ability to perform in competitive bidding.
7
If we are unable to obtain contracts for new projects to sustain our current order book volume, or if these projects are
only awarded under less favorable terms as a result of macroeconomic and competitive pressures, our business,
financial condition, and results of operations may be adversely affected. Even when winning competitive bidding
processes high risks still persist as tenders are based on estimating future revenue, cost and project risks among other,
where failing to estimate them correctly could have a material effect on our business, financial condition, and results
of operations.
3.D.2.3.We may face risks related to past and future acquisitions or divestments which could have a material
adverse effect on our business, results of operations, and financial condition.
We deploy capital in mergers and acquisitions from time to time. This deployment is subject to various general risks,
including: the inability to sufficiently integrate newly acquired businesses, the inability to achieve the anticipated
benefits from the acquisition or even incur significant losses, inability to collect full price or repayment of vendor loan,
the transmission of actual or potential liabilities related to events prior to our acquisitions, claims or penalties as a
result of breach of applicable laws or regulations, financial liabilities relating to employee claims, claims for breach of
contract, for breach of fiduciary duties, or employment-related claims among others, impacts to our brand and
reputation, environmental liabilities and tax liabilities.
As part of our strategic plans, we may also from time to time divest businesses or assets we no longer deem profitable
or in strategic alignment. For example, on December 12, 2024, the Group completed the divestment of the Group’s
19.75% stake in Heathrow airport, retaining a 5.25% stake. On February 26, 2025, we announced that a binding
agreement had been reached for the sale of that 5.25% remaining stake. Full completion of the divestment under the
agreement was finally achieved on July 3, 2025. Furthermore, on January 28, 2025, we completed the sale of our
entire stake in AGS Airports. For additional details on our divestments, see “Item 4. Information on the Company —
A. History and development of the Company —1. Summary of Historical Investments and Divestments. Any failure to
complete our planned divestments in a timely manner or on favorable terms, could have a material adverse impact on
our assets, profitability and business operations.
Furthermore, we may also be subject to risks related to divestment processes, including (i) when we are unable to
complete the expected transaction(s) in a timely manner, or at all, (ii) with regard to warranties and indemnities that
we may become liable for under the transaction documents and (iii) our, or the buyer’s, liability under applicable law
arising out of the divestment(s). For example, in some instances we remain, and may in future transactions remain,
subject to potential environmental liability in relation to entities and businesses we no longer own due to covenants
and indemnities given in favor of such entities or of the purchaser(s) under the transaction documents.
Environmental, health, and safety requirements and regulations and labor disputes could affect not only activities in
connection with businesses that have been acquired and are in operation, but also activities at businesses that have
been divested or that will be acquired or divested in the future. As a result, past and future acquisitions and
divestments expose us to potential losses and liabilities, and lower than anticipated benefits, which could have an
material adverse effect on our business, results of operations, and financial condition.
In addition, in connection with an acquisition or divestment, our tax obligations may change or fluctuate, become
significantly more complex, or become subject to greater risk of examination by taxing authorities, including as a
result of plans to expand our business operations, including to jurisdictions in which tax laws may not be favorable,
any of which could adversely affect our after-tax profitability and financial results.
3.D.3Operation and Performance
3.D.3.1.Flaws in estimates or changes in underlying assumptions, or amendments to project plans, public or
private tenders, and any failure to meet construction project deadlines or budgets may have a material adverse
effect on our business, financial condition, results of operations, and prospects.
There is a risk that our cost or revenue estimates in public or private tenders may prove inaccurate. Failure to properly
estimate project scope, costs, or timelines could result in financial losses, contractual penalties, or reputational
damage.
There are certain risks that are inherent to large-scale construction projects. In the case of Ferrovial, these construction
related risks can impact both our Construction Division (which have in the past and could in the future incur penalties
or overruns related to flaws in estimates or changes in underlying assumptions and/or any failure to meet construction
project deadlines or budgets), and our other business divisions that include a construction element – whether provided
by our Construction Division or by other parties.
8
For example, in the design phase, errors or omissions, not meeting expected requirements of our clients, or not
delivering in a timely manner could affect expected return through penalties or overruns, and could lead to higher
maintenance costs beyond the construction phase. Difficulties in obtaining any requisite permits, consents (including
environmental consents), licenses, planning permissions, compulsory purchase orders, or easements could adversely
affect the design or increase the cost of a project or delay or prevent the completion of the project or the
commencement of its commercial operation. In the event of construction delays, we may receive revenues later than
expected, or achieve lower revenues, and could face penalties and even contractual termination.
In addition, public bodies or other customers may, from time to time, request amendments or alterations to agreed
projects plans, even after the project has commenced, or may ask to renegotiate terms. Any of this could lead to
project delays, increased project development costs for us, or even termination of contracts. We may not always be
able to recoup the increased costs in such cases. Any potential project amendments or renegotiations with our
customers could therefore significantly reduce the revenue and profit we are able to realize. If we are unsuccessful in
our claims against customers in this context, there may be a reduction in the expected revenues and profit of such
projects, which could have an adverse effect on our business, financial conditions, and results of operations.
If we do not identify key risks or effectively estimate costs for projects where we are exposed to the risk of cost
overruns, or if client renegotiations cause a project to incur additional, unexpected costs, this could have an adverse
effect on our business, financial condition, and results of operations.
The NTO project, for example, is a significant and complex design and construction endeavor, with multiple
milestones and a schedule that contemplates completion in phases and which could result in cost overruns, delays or a
failure to complete the project. NTO has been informed by the contractor that the completion of the first phase of
construction will be delayed from the originally scheduled opening date of June 2026. The contractor has
communicated that it is currently targeting the completion date for the first phase of construction to occur during Fall
2026. Ferrovial continues to monitor the process and timeline to complete the first phase of construction. The expected
delay in the completion of the first phase of construction has the potential to trigger various contractual rights and
obligations of NTO (including the presentation of a remedial plan under the NTO Lease) and its counterparties in
connection with this project and, depending on the determinations and actions under these arrangements, may have
significant adverse consequences for NTO, including potential penalties and damages claims pursuant to those
arrangements. The expected delay or any other developments in the construction of NTO could have adverse impacts
on NTO and Ferrovial, including reputational impacts on NTO and Ferrovial and impacts on NTO’s relationships and
prospects with airlines and vendors, and may adversely affect ongoing and future negotiations in relation to NTO or
other public or private sector projects. The costs of expansions and any variations with respect to the initial plans and
their impact on costs and revenues may also affect NTO’s financial performance. In addition, NTO may face higher-
than- expected construction costs and delays and possible shortages of equipment, materials, and labor due to the
number of major construction projects in the New York area, respectively. The commencement of commercial
operations of a newly constructed facility may also give rise to start-up problems, such as the breakdown or failure of
equipment or processes, failures in systems integration or lack of readiness of airline operators, closure of facilities,
and disruptions of operations and compliance with budget and specifications. The ability of contractors to meet their
financial or other liabilities in connection with these projects cannot be assured. The construction contract for NTO
contains restricted remedies or limitations on liability such that claims or amounts paid may be insufficient to cover
the financial impact. The failure of NTO to recognize, plan for or manage these risks could result in budget overruns,
operational disruptions, capital expenditure trigger rebates to airlines, unsatisfactory facilities, safety and security
performance deficiencies, and higher-than- expected operating costs any of which could have an adverse effect on our
business, financial condition, and results of operations.
3.D.3.2.Accidents may occur at our project sites, facilities or at our Infrastructure assets, which may cause harm
to our employees or customers, could severely disrupt our operations and could trigger legal claims, any of which
could in turn have a material adverse effect on our business, financial condition, results of operation and
reputation.
Our project sites and facilities, such as highways, airports, and construction project sites, may be exposed to incidents
such as fires, explosions, toxic product leaks, and other environmental incidents. These sites and facilities’ respective
employees may be exposed to accidents (for example, falling from a significant height, being hit by vehicles and
machinery, overturning of heavy equipment, coming in contact with electricity, and incidents arising from a technical
error or flaw). Any such accidents may cause death and injury to employees, contractors, and also residents and other
member of the public in surrounding areas, and may cause damage to the assets and property owned by us and third
parties, as well as damage to the environment. We are also exposed to a risk of negative impacts to our business,
financial conditions, and results of operations resulting from various types of damage, including temporary
9
interruption of services as a result of accidents during the course of operations, reputational damage as well as other
impacts connected to accidents involving land and air transport, substances, goods, and equipment. Notwithstanding
our implementation of health and safety strategies and systems, the occurrence of low-probability, high-impact events
such as accidents is a material risk to us.
For example, if an accident occurs at one of our facilities or project sites, in addition to the internal investigation to be
carried out in accordance with our internal policies and protocols, legal proceedings could be initiated by the relevant
authorities to identify the causes of the accident and assess any potential civil, labor, or criminal liability. Such legal
proceedings could result in the relevant facility or project site being closed while the investigation is conducted,
disrupting our operations during the time of such closure. In addition, sanctions may be imposed on us or victims of
such accidents may claim compensation from us and hence may expose us to civil liability and reputational damage.
Furthermore, accidents may occur on our infrastructure assets involving users of the infrastructure, such as incidents
on the Highways we currently operate. For instance, there was a multiple vehicle accident on February 11, 2021 on the
NTE 35W in Dallas, Texas. The accident involved 133 vehicles and resulted in six deaths and other injuries. As a
result of this incident, the concession company NTE Mobility Partners Segment 3 LLC, of which we indirectly own
53.7%, together with several of our U.S. companies, were named parties to 29 claims filed. Of these, as of December
31, 2025, the six fatality cases have been fully resolved by the parties. As to the remaining twenty three claims related
to injury cases, two are fully resolved and one is partially resolved. The remaining proceedings are ongoing. For
additional information about these claims, see note 6.5.1 (Litigation) to the Audited Financial Statements.
Any accidents, incidents, and associated claims for damages, including any reputational damage, and disruptions at
our project sites or facilities, or related to our infrastructure assets, could have a material adverse effect on our
business, financial condition, results of operations, and reputation.
3.D.3.3.Our revenue from our highways and airports is highly dependent on the number of individuals or entities
using our infrastructure; alternative infrastructure, or means of transport could capture users and adversely impact
our business, results of operations, and financial condition.
Our revenues from our highways concession infrastructure depends on the number of vehicles using our roads and the
existence of competing alternative roads. Traffic volumes and toll receipts are highly affected by the quality,
convenience, and travel time on competing roads, toll-free roads or highways that are not part of our portfolio, along
with demographic growth and geographic distribution patterns. An increase in the capacity or attractiveness of
competing roads, the quality and state of repair of the highways, and the viability and existence of alternative means of
transportation, such as air and rail transport, buses, and urban mass transportation, all have the ability to adversely
impact our business, results of operations, and financial condition.
The economic impact to us of reduced usage of our infrastructure may be amplified (beyond reduced toll revenues) by
certain of our contractual arrangements. For example, the 407 ETR concession agreement provides for certain
payments to be made by us to the province of Ontario, Canada, in the following year, if annual traffic levels do not
meet minimum prescribed traffic thresholds (“Schedule 22”). ; Schedule 22 payments for the year 2025 (payable in
2026) have been recorded as an expense in the 407 ETR 2025 financial statements for an amount of CAD 41 million.
If we are unable to maintain an adequate level of traffic or traffic toll rates, our business, financial condition, and
results of operations may be adversely affected.
In our airports business, our revenue derives from the number of passengers. The propensity of passengers to spend in
the restaurants and shops located within the airports also drives retail concession fees. An increase in competition from
other airports or terminals (including increase in capacity of these airports and terminals), at our locations, changes in
the mix of international and domestic passengers, economic factors (including cost and availability of fuel), retail
tenant defaults, lower retail yields on lease renegotiations, redevelopments, or reconfigurations of retail facilities at the
airports, may affect our business. Furthermore, factors such as route operators facing financial difficulties or becoming
insolvent, decisions by airlines regarding the number, type, and capacity of aircraft (including the mix of premium and
economy seats), as well as the routes utilized, can negatively impact and have in the past negatively impacted the
performance of our airports business in connection with passenger-related revenues.
In addition, the development of viable alternatives to air travel, improvement or expansion of existing surface transport
systems, or the introduction of new transport links or technologies negatively impact air traffic and passenger volumes.
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Any of these factors could have a material adverse effect on our business, financial condition, and results of
operations. For additional discussion of certain other factors which can negatively impact air and surface transport
volumes and patterns and / or our estimations thereof see “— 1. Business Environment and Macroeconomic Factors:
— 1 Major conflicts, act of violence and geopolitical unrest could have a negative impact on our business; — 2 Slow
economic growth or economic contraction adversely impacts demand in the sectors and industries in which we
operate; — 9 Natural or man-made disasters and health emergencies may disrupt our business; and — 8 We may face
increased risks due to climate change and its impacts, which could have a material adverse effect on our business,
financial condition, and results of operations.”
3.D.3.4.Not delivering the expected performance could have a material adverse effect on our business, financial
condition, and results of operations.
Certain of our contracts include performance requirements addressing operations and/or maintenance; if we do not
meet the expected performance levels we could face penalties or early termination.
Some of our Group Companies provide performance guarantees to cover liability to customers for a failure to meet
contractual specifications and requirements. In some instances, we obtain guarantees issued by banks and/or insurance
companies, to aid in addressing such exposure. As of December 31, 2025, the balance of such guarantees amounted to
EUR 7,939 million (EUR 8,260 million as of December 31, 2024). For more information on these guarantees, see
Note 6.5.2 (Guarantees) to the Audited Financial Statements.
For example, during 2025 we operated waste treatment at four sites in the United Kingdom under four different
concession contracts with different local authorities and scheduled to expire between 2026 and 2043. During
December 2025, we reached an agreement with the Isle of Wight Council to exit that contract on 31 March 2026.
Under this agreement, all guarantees issued linked to this project have been released. The termination payment has not
had a relevant impact on our results as it was covered by the future losses provision recognized for these waste
treatment contracts. All the contracts that we operate as of December 31, 2025, are in their operational phase. We are
responsible for delivering the existing contracts and for the liabilities that may arise under the associated parent
company guarantees. As of December 31, 2025 the maximum estimated value supported by these guarantees
amounted to EUR 111 million (GBP 97 million), EUR 357 million (GBP 295 million) in 2024); however, this
limitation may be disallowed under certain scenarios, e.g. death or personal injury, fraud, willful misconduct and / or
criminal conduct or abandonment. Certain of the facilities have encountered issues in relation to their construction and
operation; as of December 31, 2025, we recognized a provision for future losses in the amount of EUR 4 million (GBP
3 million), EUR 26 million (GBP 22 million) for the year ended December 31, 2024. This provision does not include
overhead costs of the business which in 2025 amounted to EUR 10.5 million (GBP 9 million).
The occurrence of further issues in any of our businesses for which we have given guarantees and which may trigger
such performance guarantees, could materially and adversely affect our results of operations and wider financial
condition.
3.D.3.5.We are dependent on the continued availability, effective management, and performance of subcontractors
and other service providers, the absence of which could have a material adverse effect on our business, financial
condition, results of operations, and prospects.
In the ordinary course of operations, we rely on subcontractors to provide certain services. For example, in the
Construction Business Division, billing by subcontractors and services providers represented 75.5% of the total
operating cost for the year ended December 31, 2025. As a result, our business, financial condition, results of
operations, and prospects may be adversely affected if we are not able to locate, select, monitor, and manage our
subcontractors and service providers effectively.
Attempts to transfer risks through contractor and sub-contractor liability clauses may not always be available,
effective, or may not cover the total value of losses.
Additionally, subcontractors to whom we have awarded work may become insolvent, which would require us to select
a new subcontractor at the risk of delays and/or at higher cost. These eventualities could cause delays, increase our
expenses and reduce our revenue, particularly if we are unable to recover any such expenses from third parties under
our concessions, in which case our business, financial condition, results of operations, and prospects may be materially
adversely affected.
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3.D.3.6.Digitalization and the use and importance of digital and technological environments and assets and,
consequently, the increased risk of cyber threats and misuse, or failure of such environments and assets (including
artificial intelligence and quantum technology), may affect our normal operation of assets and our ability to
generate expected value, which could have a material adverse effect on our business, financial condition, and
results of operations.
Our digital products and services, industrial systems and internet connected assets, which include hardware, software,
technology infrastructure and online sites and networks for both internal and external operations (collectively, “digital
and technological environments”), are critical to our business operations. In a highly digitalized, rapidly evolving and
interconnected environment, the risk of technology failures (including artificial intelligence and quantum computing),
cyber security failures or threats, or our or others’ misuse of such digital and technological environments, potentially
harming us, has exponentially increased in recent years.
The progressive development of quantum technology applied to computing provides exponentially greater processing
capacity compared to traditional technologies. The proliferation of new technologies that take advantage of this
extraordinary increase in computing capacity could significantly increase exposure to the risk of cyber threats, as
traditional encryption methods could prove insufficient in the face of the processing power of quantum computing.
Technology failures, including errors, and cyber-attacks can impact the normal operation of our digital and
technological environments, and have negative implications for both our corporate and projects’ operations and may,
accordingly, impact our ability to generate expected value from our assets, result in the disclosure of our confidential
information, or result in legal claims, regulatory actions, fines, reputational damage and significant incident response
costs.
For instance, a ransomware attack affecting one of our airports could cause flight cancellations, which in turn could
materially affect our operating revenues and financial results.
While to date no cyber security incidents have had a material impact on our operations or financial results, we cannot
guarantee that material incidents will not occur in the future.
Finally, we cannot guarantee that costs and liabilities from a failure, including errors, or attack on our digital or
technological environments will be covered by our existing insurance policies, or that future insurance will be
available on reasonable terms, or at all. These factors could have an adverse effect on our business, financial condition,
and results of operations.
3.D.3.7.The increase in demand for skilled labor in the geographic areas in which we are active makes it more
difficult for us to attract and retain talent, which could impact our competitiveness and have an adverse effect on
our business, financial condition, and results of operations.
The increase in demand for skilled labor (i.e., STEM positions requiring higher education degrees, and more
specifically civil, industrial, or computer engineers, which are normally the main positions required for delivering our
projects and managing our assets) in our main markets and particularly in those markets in which the development and
operation of highways and other transportation-related construction are concentrated, such as in the United States,
Spain, and the United Kingdom, as well as several other western countries, makes it more difficult for us to attract and
retain talent, which could impact our competitiveness.
We may lose certain business opportunities and may not be able to fulfill certain commitments to clients, such as
commitments regarding contractual deadlines or the pre-established quality of work, due to hiring difficulties and/or
understaffing, in the event of a lack or scarcity of qualified staff. This inability to acquire and retain skilled labor and
the resulting inability to fulfill contractual requirements could have an adverse effect on our business, financial
condition, and results of operations, and may impact our reputation and competitiveness. Furthermore, we may
experience lower profit margins due to increased labor costs resulting from higher demand for skilled labor. This
could have an adverse effect on our business, financial condition, and results of operations.
3.D.3.8.We may face increased scrutiny and changing expectations with respect to sustainability and ESG matters,
which could impose additional costs on us, impact our access to capital, or expose us to new or additional risks.
Increased focus, including from regulators, investors, employees, clients, competitors and other interested parties on
sustainability or ESG matters may result in increased costs (including but not limited to increased costs related to
compliance and stakeholder engagement), impact our reputation, or otherwise affect our business performance.
Negative public perception could damage our reputation or harm our relationships with regulators, employees,
customers, investors, or other interested parties if we do not, or are not perceived to, adequately address these issues,
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including if we fail to demonstrate progress towards any current or future ESG goals. We may also suffer from
contradictory or conflicting requirements, demands and expectations with respect to sustainability matters across the
different jurisdictions in which we operate, both with respect to legal frameworks and stakeholder’s expectations,
which may make it costly, difficult or impossible to achieve such requirements, demands or expectations across all
jurisdictions, and which may impact our ability to attract and retain business opportunities and talent.
A misalignment between our strategy and the requirements, expectations and demands of regulators and other
interested parties with regards to sustainability could compromise the fulfillment of our growth and investment
objectives. Furthermore, increasing requirements and demands (and as noted, sometimes conflicting requirements and
demands) in connection with sustainability by our investors and other interested parties may result in increases in our
compliance costs in this regard.
In particular, if we are not able to adhere to a call for increased sustainability by certain regulators or investors and
other interested parties, we may face penalties by said regulators and investors and other interested parties, including
shareholders, suffer damage to our corporate reputation, lose our positioning in sustainability indexes, experience an
increase in our financing costs, and experience a negative impact in analysts’ ratings. Furthermore, as a consequence
of the financial demands derived from our need to become more sustainable or of our potential failure to become more
sustainable, project financing and our access to sources of financing may worsen.
In addition, various organizations have developed ratings to measure the performance of companies on ESG topics,
and the results of some of these assessments are widely publicized. Such ratings are used by some investors to inform
their investment and voting decisions. Many investors have created their own proprietary ratings that inform their
investment and voting decisions. Unfavorable ratings of our Group or our industry, as well as omission or inclusion of
our stock into ESG-oriented investment funds, may lead to negative investor sentiment and the diversion of investment
to other companies or industries, which could have a negative impact on our stock price and our access to and cost of
capital.
3.D.3.9.Our business and operations may be adversely affected by violations of applicable anti-corruption laws, in
particular the U.S. Foreign Corrupt Practices Act, the EU anti-corruption legislation, the United Kingdom Bribery
Act, or similar worldwide anti-bribery laws.
Our international operations require us to comply with international and national laws and regulations regarding anti-
bribery and anti-corruption, including the U.S. Foreign Corrupt Practices Act, the United Kingdom Bribery Act, or
similar anti-bribery laws that may be applicable to our business. These laws and regulations, for example, prohibit
improper payments to foreign officials and private individuals for the purpose of obtaining or retaining business and
may include reporting obligations to relevant regulatory and governmental bodies. The scope and enforcement of anti-
corruption laws and regulations may vary a, and new regulatory frameworks may broaden the scope of prohibited
conduct or introduce new compliance requirements. In addition, such laws and regulations have may have
extraterritorial reach.
Our compliance programs, internal controls, policies, and procedures may not always prevent reckless or negligent
acts including bribery of government officials and private individuals, petty corruption, and misuse of corporate funds
committed by our employees or associated third parties, particularly given our decentralized nature and our use of joint
venture arrangements. Violations of these laws, or allegations of such violations, may lead to fines, findings of
criminal responsibility, or harm to our reputation, disrupt our business, and could result in inaccurate books and
records, each of which may have a material adverse effect on our business, results of operations, financial condition,
and prospects.
Violation of applicable laws in this regard may have a material impact on our business, results of operations or
financial condition and prospects.
For further discussion of legal and regulatory risks and government contracting , see “—4. Legal, Regulatory, and
Government Contracting—3. We are subject to litigation risks, including claims and lawsuits arising in the ordinary
course of business, which could have a material adverse effect on our reputation, business, financial condition, and
results of operations”.
3.D.3.10.Any actual or perceived failure to comply with new or existing laws, regulations and other
requirements relating to the privacy, security and processing of Personal Information could adversely affect our
business, results of operations, or financial condition.
In conducting our business, we may receive, store, use and otherwise process information that relates to individuals
and/or constitutes “personal data,” “personal information,” “personally identifiable information,” or similar terms
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under applicable data privacy laws (collectively, “Personal Information”). We are therefore subject to a variety of
federal, state and foreign laws, regulations and other requirements relating to the privacy, security and handling of
Personal Information. For example, in Europe and the UK, we are subject to the European Union General Data
Protection Regulation (the “EU GDPR”) and to the United Kingdom General Data Protection Regulation and Data
Protection Act 2018 (collectively, the “UK GDPR”) (the EU GDPR and UK GDPR together referred to as the
“GDPR”), while in the U.S., we are subject to various state and federal laws like the California Consumer Privacy Act
and others. In addition, the GDPR regulates cross-border transfers from the European Economic Area (“EEA”) and the
UK, and we anticipate ongoing legal complexity and scrutiny regarding international data transfers.
The application and interpretation of these requirements are constantly evolving and are subject to change, creating a
complex compliance environment. In some cases, such requirements may be either unclear in their interpretation and
application or they may have inconsistent or conflicting requirements with each other. Furthermore, there has been a
substantial increase in legislative activity and regulatory focus on data privacy and security around the globe,
including in relation to cybersecurity incidents.
It is possible that new laws, regulations and other requirements, or amendments to or changes in interpretations of
existing laws, regulations and other requirements, may require us to incur significant costs, implement new processes,
or change our handling of information and business operations. In addition, any failure or perceived failure by us to
comply with laws, regulations and other requirements relating to the privacy, security and handling of information
could result in legal claims or proceedings (including class actions), regulatory investigations or enforcement actions.
We could incur significant costs in investigating and defending such claims and, if found liable, pay significant
damages or fines or be required to make changes to our business. These proceedings and any subsequent adverse
outcomes may subject us to significant negative publicity and an erosion of trust. If any of these events were to occur,
our business, results of operations, and financial condition could be materially adversely affected.
3.D.4.Legal, Regulatory, and Government Contracting
3.D.4.1We are subject to risks related to the granting of permits and rights-of-way and securing land rights, which
could have a material adverse effect on our business, financial condition, and results of operations.
We operate in sectors (construction, highways, energy and airports) where part of our pipeline depends on public
awards for the development, improvement and/or operation of complex infrastructure. The construction, revamping
and entering into operation of such infrastructure assets usually comprises a wide mix of requirements to be fulfilled,
such as administrative and environmental permits, land access, rights of way, as well as construction and
interconnection requirements.
We cannot assure that we will not encounter significant problems in obtaining new or renewing existing approvals,
licenses, permits, and certificates required for the conduct of our business, nor that we will continue to satisfy the
conditions under which authorities grant such authorizations. In addition, there may be delays on the part of the
regulatory, administrative, or other relevant bodies in reviewing our applications and granting the required
authorizations. If we fail to obtain or maintain the necessary approvals, licenses, permits, and certificates required for
the conduct of our business, we may lose contracts or be required to incur substantial costs, suspend the operations of
one or more of our projects or delay the commencement of the commercial operation of any of our present or future
companies. Furthermore, to bid, develop, and complete a construction project, highways, airports, data or an energy
project, we may also need to obtain permits, licenses, certificates, and other approvals from the relevant administrative
authorities. We cannot assure that we will be able to obtain or maintain such governmental approvals or fulfill the
conditions required for obtaining the approvals or adapt to new laws, regulations, or policies that may come into effect
from time to time, without undue delay or at all. Obtaining environmental permits and the acquisition of the relevant
rights-of-way are key elements in the pre-construction phase of many highways and transmission line or energy
generation projects in which we are or may be involved in the future.
Potential delays in any of the events explained above may result in not completing construction or not commencing
entering into operation within the deadlines set forth by the relevant authority or agreed with the client, which may
lead to adverse consequences. For instance, in energy projects, delay in achieving energization deadlines may result in
penalties imposed by the relevant authority.
Land rights and related governmental action. Additionally, we may not be able to secure, timely or at all, the land or
connection rights we need to obtain to build or extend the highways, develop the infrastructure assets, or develop
energy infrastructure projects or data centers for the concessions and agreements in which we have an interest.
Securing such land or connection rights is generally dependent on governmental action, as it often involves
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governmental authorities taking action to limit rights or expropriate the land on which the relevant infrastructure asset
is to be constructed.
The entry into force of new regulations and the imposition of new or more stringent requirements as part of permits or
authorizations, or a stricter application of existing regulations, may cause delays or increase our costs or impose new
responsibilities,
All these risk factors could materially and adversely affect our financial condition and results of operations.
3.D.4.2Our concessions are granted by governmental authorities and are subject to special risks, including the
risk that governmental authorities will take action contrary to our interests or rights under the concession
agreements, which may include unilaterally terminating, amending or expropriating the concessions on public
interest grounds, or imposing additional restrictions (including on toll rates).
This risk is especially relevant in infrastructure assets, where we enter into most of our agreements with governmental
authorities. Under these concession development agreements or facility agreements, typically, the relevant government
authority, as the concession grantor or lessor, has, in addition to other termination rights for concessionaire default,
certain judicial rulings and other specified matters, a right to terminate the concession/lease unilaterally if such
governmental authority determines that such termination is in its best interests, oftentimes referred to as a right to
terminate for convenience. Although not in every instance, in the event that a termination for convenience right is
exercised by the relevant governmental authority, the authority is generally required to make a payment to the relevant
concessionaire as compensation for such termination.
For example, the 407 ETR, I-77 and I-66 concession contracts stipulate that compensation in the event of termination
for convenience will be at fair market value (as defined therein) plus any reasonable costs and expenses incurred due
to the termination.
Additionally, under our agreements with the Texas Department of Transportation in respect of our infrastructure assets
in Texas, the amount payable to the relevant concessionaire in respect of any such exercise will typically require a
payment that is calculated by reference to the fair market value of the concession, the outstanding or initial debt
incurred in respect of such concession and/or a guaranteed equity return plus outstanding or initial debt. Although the
agreements regulating such concessions establish both the method and formula for the calculation of the applicable
compensation amount, disputes may arise between the parties as to the ultimate amount of such compensation, the
method used to calculate the same or related interpretation of the contract and applicable provisions.
Furthermore, with respect to airport assets, the concession grantors typically may also terminate the concession
unilaterally in circumstances where no breach or omission by the concession operator has occurred.
In the case of the airport assets within the portfolio of the Airport Business Division, for example, the concession
agreement for the operation of the airport terminals at Dalaman expressly allows the administration to terminate the
concession unilaterally and, in the event of a unilateral termination, the administration must pay to the concessionaire
a termination fee for the loss of revenue corresponding to the remaining concession period at the time of termination,
as determined by independent international audit firms.
A concession grantor could also unilaterally change the scope of our concession agreements due to circumstances out
of our control, such as occurred recently in Portugal to non-Ferrovial assets, where a toll was eliminated due to
political factors and a new concession agreement was negotiated.
Should any actions such as the above be taken by government authorities in any of the jurisdictions in which we
operate, there is no certainty that adequate compensation for any losses arising from such risks will be provided by the
relevant government, which could have a material adverse effect on our business, financial condition and results of
operations.
In addition, because we contract with government authorities (including at the federal and state-level), we may also be
subject to impacts to our projects or potential bidding opportunities from delayed or disrupted government budget
cycles and funds allocations; and to government audits or investigations applicable to government contractors, or
potential government contractors, which could result in disputes, delayed payments or contractor costs not being
reimbursed, or where an audit or investigation results in allegations of improper or illegal activities we could be
subject to civil or criminal penalties and administrative sanctions could result, including termination of contracts,
forfeiture of profits, suspension of payments, fines, and suspension or prohibition from doing business with a
government entity or jurisdiction in future.
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3.D.4.3We are subject to litigation risks, including claims and lawsuits arising in the ordinary course of business,
which could have a material adverse effect on our reputation, business, financial condition, and results of
operations.
We are, and in the future may be, a party to judicial, arbitration, and regulatory proceedings including government
investigations and audits. We are exposed to risks derived from such proceedings, potential lawsuits or litigation or
disputes of different kinds arising, including in the ordinary course of business. In relation to these legal risks, and
according to prevailing accounting standards, when such risks are deemed probable, we must make accounting
provisions. When such risks are less likely to materialize, we disclose contingent liabilities if they are significant. For
a description of our potential significant liabilities, see Note 6.5.1 “Litigation” to the Audited Financial Statements.
For example, as of December 31, 2025, our litigation and tax provisions amounted to EUR 188 million, including
provisions of EUR 102 million to account for possible risks resulting from lawsuits and litigation in progress.
Our business strategy is to focus on technically complex projects with long periods of maturation and the development
of which, due to such long maturation, may result in non-compliance with agreed quality levels and committed
deadlines. Any such non-compliance or perceived non-compliance may give rise to disputes with clients,
counterparties, partners, or other interested parties. For example, NTO has been informed by the contractor that the
completion of the first phase of construction will be delayed from the originally scheduled opening date of June 2026,
which may result in disputes with the contractor, the relevant government authority or other parties. In addition, the
budgetary constraints faced by some of our public clients may increase their need or willingness to initiate disputes
and litigate, and consequently increase our exposure to the risk of contractual disputes on construction and
maintenance projects, as has been the case in the past, which can negatively impact our return on investment.
Several types of claims may arise in connection with this risk, including:
1.claims relating to compulsory land purchases required for highways construction;
2.claims relating to acts, errors, omissions, delays, or to defects in construction projects performed or services
rendered;
3.claims for third party liability in connection with the use of our assets or the actions of our employees;
4.employment-related claims;
5.environmental claims; and
6.claims relating to tax inspections, or other investigations or audits.
An unfavorable outcome, including an out-of-court settlement, in one or more such disputes or proceedings beyond
our total litigation provisions, as well as material new claims and proceedings, could have a material adverse effect on
our reputation, business, financial condition, and results of operations.
3.D.4.4Our shareholders in the United States may have difficulty bringing actions and enforcing judgments,
against us, our directors, and our executive officers based on the civil liabilities provisions of the federal securities
laws or other laws of the United States or any state thereof.
We are incorporated in the Netherlands and the vast majority of our directors and executive officers reside outside the
United States, primarily in Spain or the Netherlands. As a result, our shareholders’ ability to bring an action against
these individuals or us in the United States in the event that the shareholders believe their rights have been infringed
under the U.S. federal securities laws or otherwise, or the procedures in relation thereto, may be subject to
uncertainties. Even if our shareholders are successful in bringing an action of this kind, whether they can successfully
enforce a judgment against our directors, executive officers, or us outside the United States is subject to substantial
uncertainty.
3.D.5Financing and Joint Ventures
3.D.5.1.Our joint venture and partnership operations could be affected by our reliance on our partners’ financial
condition, performance, and decisions, which could have a material adverse effect on our business, financial
position, results of operations, and prospects.
A number of our operations are conducted through joint ventures and partnerships, including holding non-controlling
interests in companies that operate some of our main infrastructure assets, such as the 407 ETR.
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We may continue to enter into arrangements subject to joint control, such as joint ventures, or we may have minority
ownership. Joint ventures, related partnerships, and minority ownership interests are subject to risks related to
oversight and control, compliance, competing business interests, financial liabilities, and difficulties to dispose of the
stake due to the existence of pre-emptive rights. Disputes with joint venture partners or co-shareholders may result in
the loss of business opportunities or intellectual property or disruption to, or termination of, the relevant venture, as
well as litigation or other legal proceedings. In the event that risks related to oversight and control, compliance,
competing business interests, financial liabilities, and difficulties to dispose of the stake, materialize, this could result
in financial, reputational, and legal consequences, which could have a material adverse effect on our business, results
of operations, and financial condition.
Examples of projects in which we do not have a controlling stake include some of our main assets, such as our 48.3%
ownership interest in 407 International Inc., the concession operator of the 407 ETR, our 19.9% ownership interest in
IRB Infrastructure Developers Limited (“IRB”), an Indian toll road builder and operator, and our indirect 49.0%
ownership interest in JFK NTO, the concessionaire entity that manages the NTO at JFK concession.
For the year ended December 31, 2025, our total dividends received from our infrastructure assets amounted to EUR
968 million, of which EUR 467 million were received from consolidated entities (48.2% of such total dividends) and
EUR 501 million were received from equity-accounted companies (i.e., business activities with companies in which
joint control is identified) from joint venture and partnership operations (51.8% of such total dividends).
In addition, the success of our joint ventures and partnerships depends on the partner’s satisfactory performance of
their obligations. If our partners fail to satisfactorily perform their obligations as a result of financial or other
difficulties, the joint venture or partnership may be unable to adequately perform contracted services. Under these
circumstances, we may be required to make additional investments to ensure the adequate performance of the
contracted services.
Furthermore, mainly in connection with the Construction Business Division, we could be jointly and severally liable
for both our obligations and those of our partners. In addition, in the ordinary course of our business, we undertake to
provide guarantees and indemnities in respect of the performance of the contractual obligations of our joint venture
entities and partnerships. These guarantees and obligations may give rise to liability for us to the extent the respective
entity fails to perform its contractual obligations. A partner may also fail to comply with applicable laws, rules, or
regulations, which may further result in our liability.
Any of the above factors could have a material adverse effect on our business, financial condition, results of
operations, and prospects.
3.D.5.2.We may not be able to effectively manage the exposure of our liquidity risk including access to and costs of
capital and credit risks, which could have a material adverse effect on our business, financial condition, and results
of operations.
Certain industries in which we operate, such as airports and highways, are by nature capital-intensive businesses.
Therefore, the development and operation of our assets, especially infrastructure concession assets, require a high level
of financing. Our assets, especially our infrastructure assets, must be able to secure significant levels of financing for
us to be able to carry out our operations (for example, regarding the NTO at JFK. (See “Item 4. Information of the
Company—B. Business Overview—3.Group Overview—3.Our Business Division—2.Airports Business Division”).
Our ability to secure financing on terms favorable to us, depends on several factors, many of which are beyond our
control, including:
(i)general economic conditions;
(ii)developments in the debt or capital markets;
(iii)the availability of funds from financial institutions; and
(iv)monetary policy in the markets in which we operate.
Our ability to make payments on and to refinance our debt, as well as to fund future working capital and capital
expenditures, will depend on our future operating performance and ability to generate sufficient cash. In addition, if
the financial condition of our customers or suppliers is negatively affected by illiquidity, their difficulties could also
have a material adverse effect on us.
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Regarding ex-infrastructure borrowings, several facilities and one bond were maturing in 2025. The revolving credit
facility and the bond were refinanced during January 2025. At the end of the year ended 31 December 2025, the first
extension of the revolving credit facility maturity was approved, currently maturing in 2031 (see “Item 5. Operating
and financial review and prospects —B. Liquidity and capital resources —8. Financing —2. Ex-infrastructure project
borrowings —1. Corporate debt”). For the remaining maturities, if we are unable to secure additional financing on
favorable terms or at all, our growth opportunities would be limited and our business, financial condition, and results
of operations may be materially adversely affected.
The risk of late payments in both the public and private sectors has increased during global financial crises and during
periods of localized political disharmony and governmental budgetary disagreement. The cost of government
financing and financing of other public entities has also increased due to financial stress in Europe, and this may
represent an increased risk for our public sector clients. Our ability to effectively manage our credit risk exposure may
affect our business, financial condition, and results of operations. We are exposed to the credit risk implied by default
on the part of a counterparty (customer, provider, partner, or financial entity), which could impact our business,
financial condition, and results of operations.
Although we actively manage this credit risk through credit scoring and eventually, in certain cases, the use of non-
recourse factoring contracts and credit insurance, our risk management strategies may not be successful in limiting our
exposure to credit risk, which could adversely affect our business, financial condition, and results of operations.
3.D.5.3.We have entered into equity swaps which could result in losses and have a material adverse effect on our
business, financial condition, and results of operations.
We have entered into, and may in future enter into, equity swaps linked to our share price in order to hedge potential
asset losses derived from the different incentive share plans to which we are a party. Under the general terms of these
equity swaps, if, at the maturity date of each equity swap, our share price decreases below a reference share price (i.e.,
the strike price agreed at the inception of each equity swap), we will make a payment to the counterparty. However, if,
at the maturity date of each swap, the share price increases above the reference price, we will receive payment from
the counterparty. During the lifetime of the equity swaps, the counterparty will pay us cash amounts equal to the
dividends generated by those shares and we will pay the counterparty a floating interest rate.
Further, whilst the equity swaps are not deemed to be hedging derivatives under International Accounting Standards
(“IAS”), their market value during a given period of time has an effect on our income statement, which will be positive
if the share price increases or negative if the share price decreases during that period. If our share price decreases
below the reference price, the market value of the swap will decrease and our business, financial condition, and results
of operations may be materially adversely affected.
3.D.6.Tax
3.D.6.1.We are subject to complex tax laws, in the jurisdictions in which we operate which could have a material
adverse effect on our business, financial condition, results of operations, cash flows, and prospects.
We are subject to complex tax legislation in the jurisdictions in which we operate. Our tax treatment depends on the
determination of facts and interpretation of complex provisions of applicable tax law, for which no clear precedent or
authority may be available. Any failure to comply with the tax laws or regulations applicable to us may result in
reassessments, late payment interest, fines, and penalties.
We are subject to tax audits by the respective tax authorities on a regular basis. As a result of ongoing and future tax
audits or other reviews by the tax authorities, additional taxes and fines could be imposed that exceed the provisions
reflected in previous financial statements, also it may affect the recoverability of our deferred tax assets. This could
lead to an increase in our tax obligations, either as a result of the relevant tax payment being assessed directly against
the Company or as a result of becoming liable for the relevant tax as a secondary obligor due to the primary obligor’s
failure to pay such taxes.
The materialization of any of the above risks could have a material adverse effect on our business, financial condition,
results of operations, cash flows, and prospects.
Specifically, we are currently involved in a tax proceedings related to previous tax assessments in various
jurisdictions, (See Note 6.5.1 “Litigation” to the Audited Financial Statements). The outcome of these or any future
tax proceedings may have a significant impact on our tax provisions and could have a material adverse effect on our
business, financial condition, results of operations, cash flows, and prospects.
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Also, the tax authorities as a result of the Merger, could interpret that the Company’s and its Dutch subsidiaries’
ability to use carry-forward losses and other tax attributes for Dutch tax purposes that arose prior to the Merger to
offset taxable income that arises after the Merger may be subject to certain limitations, or that the Company and its
Spanish subsidiaries that apply the Spanish special CIT (“ CIT Group Regime”) would also face restrictions on its
ability to use carry-forward losses and other tax attributes for Spanish tax purposes. The amounts of tax credits the
future use of which could be impacted by these legal restrictions are: (i) in Spain, EUR 112 million of tax loss credits
and EUR 45 million of other tax credits, and (ii) in the Netherlands, EUR 40.9 million tax loss credits.
Further, any change in current tax legislation (including conventions for the avoidance of double taxation) in the
countries where we operate, or a change in the interpretation of such legislation by the tax authorities, as well as any
change in accounting standards as a result of the application of tax regulations, could have a material adverse effect on
our business, operating results, and financial position of the Company and our Group Companies.
3.D.6.2.The Company operates so as to be treated exclusively as a resident of the Netherlands for tax purposes, but
other jurisdictions may also claim taxation rights over the Company, which could have a material adverse effect on
our business, financial condition, results of operations, cash flows, and prospects, and on the net cash proceeds
received by the Company’s shareholders in respect of distributions by the Company.
The Company has established its organizational and management structure in such a manner that the Company is
regarded to have its residence for tax purposes exclusively in the Netherlands and to exclusively qualify as a Dutch tax
resident for purposes of the Dutch Dividend Withholding Tax Act (the “DWTA”) and the Dutch Corporate Income
Tax Act. However, the determination of the Company’s residency for tax purposes depends primarily upon its place of
effective management, which is largely a question of fact, based on all relevant circumstances. Therefore, no assurance
can be given regarding the final or future determination of the Company’s tax residency by the relevant tax authorities.
If the tax authorities of a jurisdiction other than the Netherlands take the position that the Company should be treated
as a tax resident of exclusively that jurisdiction (including for purposes of a tax treaty), the Company may be liable to
pay an exit tax for Dutch income tax purposes and may also become subject to income tax in such other jurisdiction. In
addition, this assessment would result in the Company no longer being part of the Dutch fiscal unity headed by it,
which may subsequently result in certain deconsolidation charges becoming due, and the loss or use restriction of
certain tax assets such as carry-forward tax losses.
If the Company is regarded to also have its residence for tax purposes in any other jurisdiction(s) than the Netherlands,
the shareholders could become subject to dividend withholding tax in such other jurisdiction(s), as well as in the
Netherlands.
The impact of these risks differs depending on the jurisdictions and tax authorities involved and the Company’s and its
shareholders’ ability to resolve double taxation issues. The cross-border merger by absorption between Ferrovial, S.A.
(“Ferrovial, S.A.”), as the Spanish absorbed company and former parent of the Group, and Ferrovial International SE
(renamed Ferrovial SE), as the Dutch absorbing company and formerly a wholly-owned subsidiary of Ferrovial, S.A.
(the “Merger”), was carried out under the special tax neutrality regime implemented in Spain pursuant to Chapter VII
of Title VII of the Spanish Law 27/2014 of November 27 on Corporate Income Tax.
In connection with the application of the special tax neutrality regime the Spanish tax authorities may, in the course of
a tax audit, consider that the Merger did not take place for a valid business reason and instead occurred with the main
intention of obtaining a tax advantage, a position that the Company expressly rejects. In such case, the Spanish Tax
Authorities may deny the application of such special regime and reverse the intended tax advantages.
The main difference in taxation between the Spanish and the Dutch Corporate Income Tax (“CIT”) regimes is the
participation exemption—while the Netherlands has full participation exemption on dividends and gains, in Spain
5.0% of such incomes are included in the CIT taxable base. On the other side, Dutch CIT is taxed at 25,8% tax rate
(25% in Spain) and financial expenses CIT deduction is more restricted in the Netherlands (20% EBITDA vs 30% in
Spain) In this regard, the main impact of a potential assessment would derive from the gains on the transfer of the
ordinary shares; however, only 5.0% of the gains would be effectively subject to taxation at a 25.0% CIT rate; such
part of the gains would be further reduced by the carry-forward losses that Ferrovial had and deductible expenses,
including financial expenses and pending tax credits.
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3.D.6.3.If the Company is classified as a passive foreign investment company for U.S. federal income tax purposes,
U.S. investors in the Company’s ordinary shares may be subject to adverse U.S. federal income tax consequences.
A non-U.S. corporation will be classified as a passive foreign investment company (“PFIC”) for any taxable year if,
either: (i) 75.0% or more of its gross income for the taxable year consists of “passive income” for the purposes of the
PFIC rules (including dividends, interest, and other investment income, with certain exceptions) or (ii) at least 50.0%
of the value of its assets for the taxable year (determined based upon a quarterly average) is attributable to assets that
produce or are held for the production of “passive income.” The PFIC rules also contain a look-through rule whereby
the Company will be treated as owning its proportionate share of the assets and earning its proportionate share of the
income of any other corporation in which it owns, directly or indirectly, 25.0% or more (by value) of the stock.
The determination of the Company’s PFIC status is complex and subject to ambiguities. Whether the Company is
treated as a PFIC is a factual determination to be made annually after the close of each taxable year and thus may be
subject to change. The Company’s PFIC status for each taxable year will depend on facts including the composition of
the Company’s assets and income, as well as the value of the Company’s assets (which may fluctuate with the
Company’s market capitalization) at such time. In addition, the Company’s PFIC status for the current and future
taxable years depends, in large part, on the expected value of its goodwill, which could fluctuate significantly.
Based on the nature of the Company’s business, the ownership, and the composition of the income, assets, and
operations of the Company, although not free from doubt, the Company believes it was not a PFIC for the taxable year
ended December 31, 2025.
The U.S. Internal Revenue Service (“IRS”) or a court may disagree with the Company’s determinations, including the
manner in which the Company calculates the value of the Company’s assets and the percentage of the Company’s
assets that are passive assets under the PFIC rules. Therefore, there can be no assurance that the Company will not be
classified as a PFIC for the current taxable year or for any future taxable year. If the Company is treated as a PFIC for
any taxable year during which a U.S. Holder (as defined in “Item 10. Additional Information—E. Taxation—2.
Material U.S. Federal Income Tax Consequences”) held ordinary shares, such U.S. Holder could be subject to adverse
U.S. federal income tax consequences. See “Item 10. Additional Information—E. Taxation— 2. Material U.S. Federal
Income Tax Consequences” for further discussion on this matter.
3.D.7.Our Ordinary Shares
3.D.7.1Our operating results and the market price of our ordinary shares have been and may be, volatile, and, you
may lose all or part of your investment.
Our results of operations have fluctuated from quarter to quarter in the past and may continue to vary significantly in
the future so that period-to-period comparisons of our results of operations may not be meaningful. Our quarterly
financial results may fluctuate as a result of a variety of factors, many of which are outside of our control and may be
difficult to predict. Factors that may cause fluctuations in our quarterly financial results include, but are not limited to:
▪Internal update of contract end results. We periodically perform a complete review of contract end results for
our construction activities. The complexity and size of some of our contracts and the existing risks inherent to
them may lead to contract end losses arising between quarterly financial results, which would have a negative
impact on our financial results.
▪Seasonality. Typically, construction activity will be higher over the spring and summer months, due to
improved weather conditions. Highways’ traffic and passenger demand will generally also be higher during
spring and summer. Thus, we may expect our second and third quarters revenues to be higher than those of
other quarters.
▪Dividends collected from infrastructure assets, which may vary significantly from quarter to quarter due to
various factors, including project debts refinancing, and traffic levels.
▪Non-recurring events, such as acquisitions, divestments, potential claims and legal disputes, or legal
settlements may have a significant impact on our financial results, especially in our cash flow generation.
▪Other events impacting the normal operations of our assets, such as cyber-attacks.
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In addition, securities markets worldwide have experienced, and are likely to continue to experience, significant price
and volume fluctuations. This market volatility, as well as general economic, market or geopolitical conditions, could
subject the market price of our ordinary shares to wide price fluctuations regardless of our operating performance. It
may limit or prevent investors from readily selling their shares and may otherwise negatively affect the liquidity of our
ordinary shares.
In addition, in the past, when volatility has affected the market price of a company’s shares, holders of those shares
have sometimes instituted securities class action litigation against the company that issued the shares. If any of our
shareholders were to initiate a lawsuit against us, we could incur substantial defense costs. Such a lawsuit could also
divert the time and attention of our management from our business, which could significantly harm our profitability
and reputation.
3.D.7.2The payment of future dividends will depend on our financial condition and results of operations, which
could negatively impact the market price of our ordinary shares.
Under Dutch law, distribution of dividends may take place only after the adoption of the Company’s annual accounts
referred to in article 2:391 2 of the Dutch Civil Code (Burgerlijk Wetboek) (the “BW”) by the general meeting of the
Company (the “General Meeting”), showing that the distribution is allowed. Furthermore, the distribution by the
Company of interim dividends and the distribution of dividends in the form of ordinary shares are subject to the prior
approval of our board of directors (the “Board”).
A distribution to shareholders by the Company will be allowed under the terms of articles 2:391 BW insofar as the
Company’s equity exceeds the sum of the paid-up and called-up share capital, increased by the reserves required to be
maintained by either Dutch law or the Articles of Association. Once the annual accounts are available, the Board will
determine whether the Company is able to, or should, make distributions in accordance with Dutch law. As a holding
company with no direct cash generating operations, the Company depends on its operating Group Companies to
generate the funds necessary to meet its financial obligations, as well as the payment of dividends.
The declaration and payment of any dividend distribution will be subject to the discretion of the Board, which will
determine whether the Company should make distributions. Future dividends or distributions, if any, and their timing
and amount, may be affected by, among other factors, the Board or senior management team’s views on potential
future capital requirements for strategic transactions, earnings levels, contractual restrictions, the cash position and
overall financial condition, debt related payments and commitments we may incur, including restrictive covenants
which may limit the ability to pay a dividend, changes in tax or corporate laws, the need to invest in our business
operations and such other factors as the Board or senior management may deem relevant.
Dividend or other distribution payments may change from time to time, and we cannot provide assurance that we will
declare dividends or other distributions in any particular amounts (including with regards to prior dividends,
repurchases, or other distribution programs that we may have in place) or at all as the payment of any such dividends
or other distributions will depend on our ability to generate profits available for distribution and cash flow.
3.D.7.3Rights of holders of shares may be limited, particularly outside the Netherlands and Spain, and as a result,
shareholders may suffer dilution.
Pursuant to a resolution adopted by the General Meeting, the Board has been authorized, for a period of eighteen
months (from April 24, 2025, the date of our General Meeting, through October 23, 2026), to (i) issue shares or grant
rights to subscribe for ordinary shares up to a maximum of 10.0% of our issued share capital on April 24, 2025, and to
limit or exclude pre-emptive rights in relation thereto, for any and all corporate purposes, and (ii) issue shares or grant
rights to subscribe for ordinary shares up to a maximum of 5.0% of our issued share capital on April 24, 2025 (the date
of our General Meeting), and to limit or exclude pre-emptive rights in relation thereto, for the implementation of one
or more scrip dividends as may be resolved on by our Board.
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Furthermore, the securities laws of certain jurisdictions may restrict the ability of certain shareholders outside the
Netherlands and Spain to participate in future equity offerings, who may therefore suffer dilution. In particular,
shareholders in the United States may not be entitled to exercise pre-emptive rights or participate in a rights offer,
unless either our ordinary shares and any other securities that are offered and sold are registered under the Securities
Act, or are offered pursuant to an exemption from, or in a transaction not subject to, the registration requirements of
the Securities Act. We cannot assure prospective investors that any Annual Report would be filed as to enable the
exercise of such shareholders’ pre-emptive rights or participation in a rights offer, or that any exemption from such
securities law requirements would be available to enable shareholders in the United States or other jurisdictions to
exercise their pre-emption rights or, if available, that we would use any such exemption. If the Company increases its
share capital in the future, shareholders who are not able to exercise a potential pre-emptive right (in accordance with
the laws applicable to them) should take into account that their interest in the Company’s share capital may be diluted
as a result, possibly without such dilution being offset by any compensation received in exchange for subscription
rights.
In addition, the Company has in the past and may in the future offer, from time to time, a share dividend election to its
shareholders, subject to applicable corporate and securities laws and regulations. However, the Company may not, or
may not be able to, permit shareholders and other prospective investors with registered addresses, or who are resident
or located in, or who are organized under the laws of, certain restricted jurisdictions, to exercise this election subject to
certain exceptions. Accordingly, shareholders and other prospective investors in these restricted jurisdictions may be
unable to receive dividends in the form of ordinary shares rather than cash and may, as a result, suffer dilution.
3.D.7.4The multiple listings of our ordinary shares in different jurisdictions may adversely affect the liquidity and
price of our ordinary shares.
Our ordinary shares are admitted to listing and trading on Nasdaq, Euronext Amsterdam and the Spanish Stock
Exchanges. Our ordinary shares on these markets trade in different currencies (U.S. dollars on Nasdaq and EUR on
Euronext Amsterdam and the Spanish Stock Exchanges) and take place at different times (as a result of different time
zones, different trading days and different public holidays in the United States, Spain and the Netherlands).
Multiple listings may adversely affect liquidity and trading prices for our ordinary shares on one or more of the
exchanges due to the above-mentioned factors or other circumstances, which may be beyond our control. For example,
the multiple listings may increase share price volatility as trading will be split between the three markets, resulting in
less liquidity on the various exchanges. Different liquidity levels, trading volumes, market conditions and regulatory
conditions (including the imposition of capital controls) on the various exchanges may result in different prevailing
prices and any decrease in the price of our ordinary shares on one exchange could cause a decrease in the trading price
of our ordinary shares on another exchange.
Investors could seek to sell or buy our ordinary shares to take advantage of any price differences between the markets
through a practice referred to as arbitrage. Any arbitrage activity could create unexpected volatility in both the prices
and the volumes of the shares available for trading on the exchanges. In addition, investors may not be able to sell or
buy our ordinary shares on an exchange in case of a technological malfunction or other failure, or trading halt, which
may further increase the risk of arbitrage activities and create unexpected volatility in the trading price of our ordinary
shares.
3.D.7.5Future issuances of additional ordinary shares or debt or equity securities convertible into our ordinary
shares may adversely affect the market price of our ordinary shares and dilute investors’ shareholdings.
The rights of our shareholders are governed by Dutch law, the Articles of Association and other internal rules. In the
event of an increase in our share capital, holders of our ordinary shares are generally entitled to full pre-emptive rights
unless these rights are limited or excluded either by virtue of Dutch law, a resolution of the General Meeting pursuant
to a proposal of the Board, or by a resolution of the Board (if the Board has been designated by the General Meeting or
the Articles of Association for this purpose). Pursuant to a resolution adopted by the General Meeting, the Board has
been authorized, for a period of eighteen months (from April 24, 2025, the date of our General Meeting, through
October 23, 2026), to (i) issue shares or grant rights to subscribe for ordinary shares up to a maximum of 10.0% of our
issued share capital on April 24, 2025 (the date of our General Meeting), and to limit or exclude pre-emptive rights in
relation thereto, for any and all corporate purposes, and (ii) issue shares or grant rights to subscribe for ordinary shares
up to a maximum of 5.0% of our issued share capital on April 24, 2025, and to limit or exclude pre-emptive rights in
relation thereto, for the implementation of one or more scrip dividends as may be resolved on by our Board.
In the past, typically on a semi-annual basis in May and November of each year, we paid our dividends by way of an
optional scrip dividend, allowing our shareholders to elect payment of dividends in either cash or ordinary shares, that
22
may be newly issued or shares held in treasury. Our most recent scrip dividend was paid out in November 2025, which
was paid by the delivery of treasury shares rather than the issuance of new shares. We currently expect to continue
such periodic practice and anticipate paying our scrip dividend on a semi-annual basis on or about May and November
of each year, subject to the Board’s discretion and other applicable requirements. Any ordinary shares that we issue,
including under any scrip dividends, options plans or otherwise, could dilute the percentage ownership held by the
investors who own our ordinary shares at that time. There is no guarantee that we will pay any dividends, either in
cash or in ordinary shares, at any time in the future. In addition, in the future, we may seek to raise capital through
public or private debt or equity financings by issuing additional shares, debt or equity securities convertible into shares
or rights to acquire these securities, and exclude the pre-emptive rights pertaining to then outstanding shares.
Moreover, we may seek to issue additional shares as consideration for, or otherwise in connection with, the acquisition
of new businesses. Furthermore, we may issue new shares in the context of any new employment arrangement for
employees. The issuance of any additional shares may dilute our then-existing shareholders’ interest in the Company if
they do not have preferential subscription rights in connection with the issuance, if they do not exercise their pre-
emptive rights or if such rights are totally or partially excluded. Moreover, any new securities that we may issue may
have rights, preferences or privileges senior to those of our existing shareholders.
3.D.7.6The requirements of being a public company, including compliance with the reporting requirements of the
Exchange Act and the requirements of the Sarbanes-Oxley Act, may strain our resources, increase our costs, and
we may be unable to comply with these requirements in a timely manner.
As a public company, we need to comply with new laws, regulations and requirements, certain corporate governance
provisions of the Sarbanes-Oxley Act of 2002 (“SOX Act”), related regulations of the SEC, including filing interim
and annual financial statements, and the requirements of Nasdaq. Complying with these statutes, regulations and
requirements has and will absorb a significant amount of time of our Board of Directors and management and may
significantly increase our costs and expenses. We will need to continue to:
▪increase the resources of the compliance function, including for financial reporting and disclosures;
▪prepare and distribute periodic public reports in compliance with our obligations under federal securities
laws;
▪comply with rules promulgated by Nasdaq;
▪prepare and distribute periodic public reports in compliance with our obligations under federal securities
laws;
▪enhance our investor relations function;
▪review and maintain internal policies, such as those relating to insider trading; and
▪involve and retain to a greater degree outside counsel, accountants and other consultants and advisors in the
above activities.
As a U.S.-listed public company, we are required, for the first time as of December 31, 2025, to file a report by
management on, among other things, the effectiveness of our internal control over financial reporting (ICFR) pursuant
to Section 404(a) of the SOX Act. The rules governing the standards that must be met for our management to assess
our internal control over financial reporting are complex and require significant documentation, testing and possible
remediation.
Additionally, our independent registered public accounting firm is required, for the first time as of December 31, 2025,
to formally attest to the effectiveness of our internal control over financial reporting pursuant to Section 404(b) of the
SOX Act. Our independent registered public accounting firm may issue a report that is adverse in the event it is not
satisfied with the level at which our internal control over financial reporting is documented, designed or operating.
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To achieve compliance with Section 404 of the SOX Act, we must document and evaluate our internal control over
financial reporting, which is costly. In this regard, we will need to continue to dedicate internal resources, potentially
engage outside consultants, and adopt and pursue a detailed work plan to assess and document the adequacy of internal
control over financial reporting, continue steps to improve control processes as appropriate, validate through testing
that controls are functioning as documented, and report on the internal control over financial reporting status. Despite
our efforts, there is a risk that we will not be able to conclude, within the prescribed time frame or at all, that our
internal control over financial reporting is effective as required by Section 404. Moreover, material weaknesses may
be identified in the future and this could result in an adverse reaction in the financial markets due to a loss of
confidence in the reliability of our financial statements. As a result, the market price of our ordinary shares could be
negatively affected, and we could become subject to investigations by the SEC or other regulatory authorities, or
private litigation, which could require additional financial and management resources. The changes necessitated by
becoming a public company require a significant commitment of resources and management oversight that has
increased, and may continue to increase, our costs and might place a strain on our systems and resources. Such costs
could have a material adverse effect on our business, financial condition and results of operations.
In addition, being a public company subject to these rules and regulations make it more difficult and more expensive
for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and
coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult
for us to attract and retain qualified individuals to serve on our Board of Directors or as executive officers. We are
currently evaluating these rules, and we cannot predict or estimate the amount of additional costs we may incur or the
timing of such costs.
3.D.7.7In our 2024 Form 20-F, filed with the SEC on February 28, 2025 (the “2024 20-F”), our management
identified one material weakness in the design and operating effectiveness of our internal control over financial
reporting (“ICFR”). We have concluded that the material weakness has been remediated as of December 31, 2025.
If we identify additional material weaknesses in the future, we may not be able to accurately or timely report our
financial information and such failure could result in a negative reaction in the financial markets due to a loss of
confidence in the reliability of our financial information and the market price of our shares may be adversely
affected.
Although as of December 31, 2024, we were not yet required to make a formal assessment of the effectiveness of our
internal control over financial reporting in accordance with the requirements of Section 404 of the SOX Act, we
identified in the “2024 20-F” one material weakness as defined under the Exchange Act and by the U.S. Public
Company Accounting Oversight Board, or PCAOB, in our internal control over financial reporting. A material
weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there
is a reasonable possibility that a material misstatement of the company’s annual financial statements will not be
prevented or detected on a timely basis. The material weakness identified related specifically to insufficient
monitoring controls in relation to the activity of privileged users of IT applications. The material weakness did not
result in a restatement of our prior year financial statements.
As of December 31, 2025, we have completed the design and implementation of remedial efforts with respect to the
material weakness identified in our 2024 20-F and performed a testing exercise of controls following the
implementation of such remedial efforts. Following the assessment of the testing results, we have concluded that the
material weakness identified in the 2024 20-F has been remediated.
For further details regarding our remediation efforts with respect to the previously identified material weakness see
“Item 15. Controls and Procedures —D. Changes in Internal Control Over Financial Reporting”.
While we have concluded in our assessment of the effectiveness of our internal control over financial reporting as of
December 31, 2025 that our internal control over financial reporting is effective, we cannot provide assurance that any
testing by us conducted in connection with Section 404 of the SOX Act, or any testing by our independent registered
public accounting firm, may reveal in the future additional deficiencies in our ICFR that are deemed to be material
weaknesses.
Considering these factors, if we identify additional material weaknesses in the future, or otherwise fail to maintain an
effective system of ICFR, we may not be able to accurately or timely report our financial information and such failure
could result in a negative reaction in the financial markets due to a loss of confidence in the reliability of our financial
information, which could negatively affect the market price of our shares. In addition, we may be required to incur
additional costs in connection with maintaining and improving our internal control system and hiring additional
personnel. Any such action could negatively affect our results of operations and cash flows.
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3.D.7.8As a foreign private issuer, we are permitted to follow certain home country corporate governance
practices instead of certain SEC and Nasdaq requirements, which may result in less protection than is afforded to
investors under rules applicable to U.S. domestic issuers.
As a foreign private issuer, we are permitted to follow certain home country corporate governance practices instead of
those otherwise required by Nasdaq for U.S. domestic issuers. For instance, we are permitted to follow, and in some
cases follow, Dutch home country practices with respect to, among other things, composition and function of the
committees of our Board, certain quorum requirements, shareholder approval requirements with respect to employee
share plans, and other general corporate governance matters. In addition, in certain instances, we may choose to follow
our home country law, instead of Nasdaq rules applicable to U.S. domestic issuers that would require that we obtain
shareholder approval for certain dilutive events, such as an issuance that will result in a change of control of our
Company, certain transactions other than a public offering involving issuances of a 20.0% or more interest in our
Company and certain acquisitions of the stock or assets of another company. Following our home country corporate
governance practices as opposed to the requirements that would otherwise apply to a U.S. company listed on Nasdaq
may provide less protection than is afforded to investors under Nasdaq rules applicable to U.S. domestic issuers. For
additional detail regarding home country practices we have elected to follow see “Item 16G. Corporate Governance”
of this Annual Report.
In addition, as a foreign private issuer, we are exempt from the rules and regulations under the Exchange Act related to
the furnishing and content of proxy statements and the requirements of Regulation Fair Disclosure (“Regulation FD”),
and our directors, officers and principal shareholders will be exempt from the short-swing profit recovery provisions
of Section 16 of the Exchange Act. In addition, we are not required under the Exchange Act to file annual, quarterly
and current reports and financial statements with the SEC as frequently or as promptly as domestic companies whose
securities are registered under the Exchange Act.
3.D.7.9Investors may suffer adverse tax consequences in connection with owning and disposing of our ordinary
shares.
The tax consequences in connection with owning and disposing of our ordinary shares may differ depending on a
shareholder’s particular tax circumstances including, without limitation, where such shareholder is a tax resident. Such
difference in tax consequences could, for example, relate to the taxation of distributions made to a shareholder for
Spanish and Dutch dividend withholding tax purposes and the possibilities for a shareholder to obtain a credit, refund,
or other type of relief in connection therewith. These differences could be materially adverse to shareholders and they
should seek their own tax advice about the tax consequences in connection with owning and disposing of our ordinary
shares.
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