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FCC: From Barcelona's Streets to Carlos Slim's Global Infrastructure Empire
I. Introduction: A 125-Year Odyssey Through Spain's Property Apocalypse
Picture the boardroom of a distressed Spanish construction giant in late 2013. Debt collectors circling. A legendary Austrian subsidiary filing the largest bankruptcy since World War II. The founding family's matriarch hemorrhaging personal wealth to save the company her father built. And then—like cavalry arriving in the final act—a parade of the world's most legendary investors: Bill Gates, George Soros, and finally Carlos Slim, Latin America's richest man.
This is the story of Fomento de Construcciones y Contratas, known simply as FCC—a Spanish business group based in Barcelona that has specialized in public services. In 2025, on the occasion of the company's 125th anniversary, they recalled that innovation has been a fundamental pillar of the Group since its inception.
The hook is irresistible: How did a 125-year-old Barcelona construction company survive Spain's property apocalypse, near-bankruptcy, and emerge as a Carlos Slim-controlled global infrastructure giant? Slim owns more than 80% of FCC, as the Spanish firm is known.
Today, operating in more than 29 countries worldwide, over 47.5% of its turnover comes from international markets, mainly from Europe and the United States. Its core activities are environmental services management, end-to-end water cycle management, major infrastructure construction, cement production and related services. FCC's environmental services revenue grew by 11.5%, reaching €3.4 billion. The company's international contracts now make up two-thirds of its portfolio.
The transformation is remarkable. A construction company born in the waning days of Spanish colonial power—when Spain still mourned its 1898 losses in Cuba and the Philippines—has reinvented itself as an essential services juggernaut. Environmental services and water management now generate the overwhelming majority of cash flows, with construction reduced to a supporting role. This is a masterclass in corporate evolution, family drama, billionaire intervention, and the underappreciated power of boring but essential infrastructure.
II. Origins: Two Companies, Two Cities (1900-1991)
The Barcelona Roots (1900-1944)
The year 1900 marked a curious moment in Barcelona. The city was emerging from the shadow of Spain's catastrophic losses in Cuba and the Philippines, yet simultaneously experiencing a cultural and commercial renaissance. Into this environment came a new venture that would prove extraordinarily durable.
The business was founded as a construction company in Barcelona in 1900, under the name of Fomento de Obras y Construcciones S.A. and became known as FOCSA. It began operations in public services in 1911 with a contract to clean and maintain Barcelona's sewerage network.
Fomento de Obras y Construcciones, S.A. (FOCSA) was founded on 3 July with a share capital of 5 million pesetas. Following the 1992 merger with Construcciones y Contratas, the company came to be known as FCC.
Remarkably, its shares were first listed on the stock exchange in December 1900—making this one of Spain's oldest continuously listed companies. Few enterprises can claim such longevity in public markets, and this early embrace of public capital would prove both blessing and curse over the following century.
The decision to diversify into municipal sewerage maintenance in 1911 seems almost mundane in retrospect. But consider the insight required: construction is cyclical, vulnerable to economic downturns and political whims. Sewers, however, require perpetual maintenance. Cities cannot simply pause their sanitation systems during recessions. The contracting in 1911 of cleaning and maintenance services for the Barcelona sewerage system was a milestone in the company's history, establishing it as a pioneer in diversification policy.
Between 1923 and 1925, FOCSA constructed its headquarters on Balmes Street in Barcelona, a stone building adorned with four statues representing culture, architecture, art, and agriculture, which earned recognition and inclusion in the city's historical-artistic catalog. In 1928, the company played a pivotal role in preparing Barcelona for the World's Fair, including urbanization of the fairgrounds, construction of Plaza de España with four hotels and over 4,000 homes completed in record time.
This was a company building its reputation through civic projects—visible infrastructure that residents encountered daily. The strategy planted deep roots in municipal governments across Catalonia.
The Madrid Counterpart: The Koplowitz Saga Begins (1944-1991)
The other half of the modern FCC story begins with a far more dramatic origin: a refugee fleeing Nazi persecution.
Esther's father Ernesto, who had fled the Nazis in his native Upper Silesia, formed Conycon in 1944 with a loan from a friend. The firm began to participate in rebuilding infrastructures destroyed during the Spanish civil war of 1936-1939.
Ernest Koplowitz Sternberg arrived in Spain with little more than his wits and determination. Ernest Koplowitz founded the family construction company FCC after he had immigrated to Spain. His full name was Ernest Koplowitz Sternberg, son of Wilhem Koplowitz, who was a pharmacist, and Clara Sternberg.
Her parents married in 1950 in a Catholic ceremony. Her father first worked for the German electronics company AEG and then in 1952, borrowing funds from a German friend, purchased the construction company Construcciones y Reparaciones S. which he would rename Construcciones y Contratas (CYCSA).
The timing was propitious. Franco's Spain desperately needed infrastructure rebuilt after the devastating civil war. The 1930s and 1940s were shaped by Spain's political turmoil, including the Spanish Civil War (1936–1939), which disrupted operations, followed by post-war reconstruction. By 1940, FOCSA secured privatization contracts for urban trash collection in Madrid and Zaragoza, initiating long-term municipal services that continue uninterruptedly.
By 1957, Construcciones y Contratas, the other major predecessor founded in 1944 and specialized in urban services, secured a long-term street cleaning contract in Valencia following devastating floods, marking early post-war entry into municipal waste management. These efforts laid groundwork for diversification beyond pure construction, as both entities pioneered integrated urban services like waste compaction using patented technologies imported from Switzerland in the late 1940s and adapted domestically.
Tragedy struck in 1962. In 1952 he acquired a small construction company called Building and Repair, that changed its name much later on to FCC, but which was the forerunner of the giant firm we see today. In 1962, Ernesto Koplowitz died in a riding accident when his daughters were still young girls. Their mother died just six years later.
The orphaned Koplowitz sisters—Esther and Alicia—inherited a construction empire at a remarkably young age. In 1962, her father died in a horse-riding accident and her mother enlisted Ramón Areces, a close friend of her father and the president of El Corte Inglés S.A., the largest department store chain in Europe, to run CYCSA for her and her daughters' benefit. In 1968, Alicia's mother died of cancer.
The sisters' marriages would temporarily shift control to a new power center. In 1969, Koplowitz's sister Esther married Alberto Alcocer and six months later, Koplowitz married Alberto Alcocer's cousin Alberto Cortina, the son of Pedro Cortina Mauri, a foreign minister during the Franco period. The sisters gave up their board seats to their husbands and the "Albertos", as they were known, made the firm grow from 1973 onwards.
The Water Business Emerges
Even as family drama unfolded, the businesses continued their strategic diversification into essential services.
In 1972, entry into water cycle management via a Linares contract evolved into Aqualia, the group's water division; the decade also featured construction of El Atazar, then the world's largest drinking water plant, supplying Madrid's burgeoning population. International forays began modestly, including a 1970s contract for 640 kilometers of coaxial cable ducting in Libya. The 1980s brought over 1,000 kilometers of roadways under Spain's first General Highways Plan and Aqualia's launch in AlmerĂa in 1981, alongside waste collection expansion to Caracas, Venezuela.
These moves, driven by empirical needs for stable cash flows amid construction cycles, positioned predecessors as diversified players—urban services comprising a growing revenue share by the late 1980s—before the 1992 merger forming Fomento de Construcciones y Contratas (FCC).
By the late 1980s, a scandal would reshape the ownership structure entirely. In 1990, Koplowitz divorced Alberto Cortina after he was photographed by paparazzi in 1989 with another woman (Marta Chávarri, then wife of Fernando Falcó, marqués de Cubas, who Esther would later marry in 2003). At the same time, Esther also found that her husband was having an affair and divorced six months later. In 1990, the sisters returned to the board of CYCSA, filling the seats vacated by their husbands.
The tabloid scandal known as the "Albertos affair" dominated Spanish media, but its corporate consequences were profound: the Koplowitz sisters reclaimed direct control of their father's legacy.
III. The 1992 Merger: Creating Modern FCC
The early 1990s presented a window of opportunity. Spain was preparing for its coming-out party—the 1992 Barcelona Olympics and Seville World Expo. Infrastructure spending was surging. And the Koplowitz sisters saw a chance to create something far larger than either predecessor company alone.
In 1992 FOCSA merged with Construcciones y Contratas, a company founded in Madrid in 1944 to form Fomento de Construcciones y Contratas, S.A.
In 1992, CYCSA merged with Fomento de Obras y Construcciones, S. A. (FOCSA) forming the largest construction company in Spain. The company was renamed Fomento de Construcciones y Contratas S.A. (FCC).
The strategic logic was compelling: FOCSA brought deep Barcelona roots and municipal services expertise; CYCSA contributed Madrid connections and construction muscle. Together, they commanded presence in Spain's two largest cities and combined complementary capabilities across the urban services value chain.
The timing aligned with Spain's accelerating modernization. EU structural funds were flowing. Euro adoption was on the horizon. Low interest rates beckoned. FCC positioned itself to capture this generational infrastructure buildout.
Shortly after the merger, the sisters' relationship fractured along business lines. In 1998, Koplowitz sold her 28.26% stake in FCC to her sister Esther for 871 million euro. When Alicia left FCC in 1998, FCC was the largest construction and services company in Spain.
Her current predicament follows the decision in 1998 to take on the largest loan ever given a person in Spain, so she could buy her sister Alicia's share of their firm, FCC (Fomento de Construcciones y Contratas SA). Esther now controls 50% of FCC.
After his death in 1962, Ernesto's youngest daughters, Esther and Alice Koplowitz, inherited a controlling stake in the company that they ran together from 1989 until 1997. Alice sold her shares in the company to her sister for $800 million and focussed on investments in other businesses.
Esther Koplowitz bet everything on FCC. The massive personal debt incurred to buy out her sister would haunt her for decades—and ultimately force her to cede control to Carlos Slim.
IV. The Boom Years: Spain's Infrastructure Golden Age (1992-2007)
Spain's Construction Miracle
The decade following the 1992 merger represented perhaps the greatest building boom in Spanish history. Euro adoption eliminated currency risk and slashed borrowing costs. EU structural funds poured into infrastructure. A property mania seized the nation, with construction employment eventually reaching 14% of the workforce—an extraordinary concentration for a developed economy.
FCC rode this wave brilliantly, but with a crucial difference from pure-play construction competitors. The environmental services and water divisions—descendants of that prescient 1911 sewerage contract—provided ballast against the inevitable cycle turn.
Key Acquisitions & Expansions
FCC's international ambitions accelerated through strategic partnerships and acquisitions:
Proactiva was a 50–50 joint venture formed in 1999 between Veolia Environnement and FCC—a partnership with the French utility giant that expanded the company's environmental services footprint across Latin America and Europe.
The most significant international move came in the UK: In September 2006 FCC acquired the British Waste Recycling Group, excluding its landfill gas operations, from Terra Firma Capital Partners for ÂŁ1.4 billion.
FCC – Fomento de Construcciones y Contratas S.A. – is the parent company of the relatively small UK-based waste management firm Focsa UK. The acquisition of WRG will see FCC becoming one of the largest waste management companies operating in this country. The newly-acquired company manages about 13 million tonnes of household, commercial and industrial waste each year.
We have been present in this market for more than 15 years through our subsidiary Focsa. Through the acquisition of WRG, and with the support of its outstanding management team, we will become one of the leading UK waste management operators. Our ambition is to become a European leader in the waste management sector.
This £1.4 billion gamble on British waste management would prove transformative—creating a substantial international revenue base that insulated FCC during Spain's coming collapse.
The Alpine Bau Acquisition: Setting the Stage for Disaster
Yet one acquisition would nearly destroy the company: Alpine Bau.
The Austrian construction giant had an impressive pedigree. Austria's second largest construction corporation had built some of the biggest infrastructure projects of our time – everything from football stadia for World Cups to European highways in the Balkans and the controversial arena for Azerbaijan's lavish Eurovision Song Contest.
FCC saw Alpine as a gateway to Central and Eastern European markets—the next frontier for infrastructure investment. But Alpine's aggressive expansion strategy masked fundamental problems that would detonate spectacularly.
V. The Crisis: Spain's Property Crash & The Alpine Disaster (2008-2014)
The Spanish Property Apocalypse
The 2008 financial crisis exposed Spain's construction bubble as perhaps the most severe property mania in modern European history. Construction's 14% share of employment began an agonizing collapse. Property values cratered. Banks that had recklessly financed developers faced insolvency.
As with other Spanish contractors, it suffered from the 2008 property crash, which left it with debts on which the interest to be paid was between 11% and 16%.
Consider that interest rate: between 11% and 16%. These were not normal financing costs but distressed debt territory—the kind of rates that presage default. FCC's debt burden, accumulated during the boom years, became crushing.
FCC did not pay a dividend to shareholders this year, and reported a net loss of $840m in the first nine months of 2013.
The Alpine Bau Catastrophe
If the Spanish property crash was an earthquake, Alpine Bau was an extinction-level asteroid.
Yet it could no longer pay its bills and was forced to file for bankruptcy the next day in Austria's biggest insolvency since 1945.
Alpine Holding GmbH, the Austrian builder owned by Fomento de Construcciones & Contratas SA, started a 2.56 billion-euro ($3.4 billion) insolvency today, the country's biggest failure since World War II.
The Salzburg based Austrian construction company Alpine Bau, which had become insolvent in June 2013, will be closed down, making its 4,905 employees redundant. The insolvency of the company, which is part of the Spanish construction group FCC, is due to liabilities of around EUR 2.6 billion.
What went wrong? A liquidators' report delivered damning conclusions:
In the BDO report commissioned by Alpine Bau's liquidators, the authors claim the firm's rapid expansion overseas was "sales-oriented and not profit-oriented" and that this was driven "by long-time co-owner and 'strongman' of Alpine Bau, Mr Aluta-Oltyan, and the Spanish majority owner FCC".
The expert concludes that the ALPINE Bau was insolvent at the latest on 30 November 2010.
This was the killer revelation: Alpine had been effectively insolvent since late 2010—yet FCC kept pouring money into the subsidiary, throwing good capital after bad. Alpine Bau was brought down by its foreign debts, despite having pumped more than 1.3bn euros into its overseas subsidiaries and branches over a decade, a September 2014 report by accounting and tax consultancy firm BDO concluded.
The Alpine collapse cost FCC approximately €1 billion in losses—money the parent company desperately needed as its own balance sheet deteriorated.
Alpine Bau employs about 7.000 people in Austria and 1.900 in Germany. Alpine made a pre-tax loss of 90 million euro in the first quarter, as the long winter delayed the building season and business decreased in Central, Eastern and South-Eastern Europe, as well as in Germany. The subsidiary of Spanish builder FCC has been grappling with an expansion into Eastern European and Asian markets, which has proven unprofitable.
2013: The Annus Horribilis
By 2013, FCC teetered on the edge. The company's annual report laid bare the carnage:
- Writedowns and extraordinary adjustments totaling €1,680 million
- Asset divestments exceeding €1,550 million
- Net losses of €724 million
Yet amid this devastation, one pattern stood out: In the main Spanish companies, except ACS, construction activities per se are minority businesses; thus, for example, in FCC it barely represents 10% of EBITDA, its largest business being environmental and water cycle services.
The environmental services and water divisions—those boring municipal contracts stretching back to 1911—kept generating cash even as construction collapsed. Cities still needed garbage collected, sewers maintained, water treated. The diversification strategy pioneered a century earlier provided crucial survival margin.
VI. The Billionaire Rescue: Gates, Soros & Carlos Slim (2013-2016)
The Star-Studded Shareholder List
What attracts the world's shrewdest investors to a heavily indebted Spanish construction company? The answer lies in those essential services—water and waste management don't stop during recessions.
In October 2013, Bill Gates joined the company as a shareholder with a 5.7% stake, reflecting FCC's strong position in sectors linked to his vision of sustainability (Environmental Services and Water). Shortly thereafter, in December of the same year, the financier George Soros became a shareholder of the company with a 3% stake.
After Microsoft Co-Founder Bill Gates made a bet on Spain-based FCC three months ago, billionaire George Soros followed suit and bought a stake in the indebted construction firm, the Financial Times reported. Citing people familiar with the transaction, the report said funds associated with the philanthropist, who earned his reputation by making billions speculating in currency, purchased a 3.1% stake in the firm from Esther Koplowitz last week.
In October, funds linked to Bill Gates bought a 6% stake in FCC valued at €113.5 million, fueling an increase in the firm's share price. The market looked at the move as a sign of increasing confidence in the economy of Spain.
The Gates investment reflected a specific thesis: essential infrastructure serving urbanizing populations. Water, sanitation, and waste management—these were sectors aligned with his foundation's focus on global health and sustainability. FCC's distress merely created an attractive entry point.
Carlos Slim Takes Control
But the decisive player was Carlos Slim—at various points the world's richest person, whose América Móvil and Grupo Carso commanded vast resources.
Mexican billionaire Carlos Slum will invest 500 million euros ($624 million) in Spanish construction firm FCC and receive a controlling stake in the company. Fomento de Construcciones y Contratas SA says in a statement Slim's stake will be 25.6 percent.
In December 2014, FCC carried out a share issue worth €1 billion, facilitating the involvement of business magnate Carlos Slim as a majority shareholder.
Slim, whose net worth has been estimated at $62 billion by Forbes magazine, has been betting on Spanish real estate and infrastructure after the financial crisis brought both industries to their knees.
Slim's initial investment triggered a cascading takeover. Spanish law mandated that any shareholder exceeding 30% launch a tender offer for the entire company. The Mexican multi-billionaire's holding companies, Inversora Carso and Control Empresarial de Capitales, now own 36.6% of debt-laden FCC, and will offer €7.60 a share for the 63.4% of the company they do not already own. Carlos Slim is set to launch a €2.8 billion ($3.2 billion) general offer for Spanish building and infrastructure group Fomento de Construcciones y Contratas after pushing up his holding in the company in a rights issue. The Mexican multi-billionaire's holding companies, Inversora Carso and Control Empresarial de Capitales, now own 36.6% of debt-laden FCC.
The Koplowitz Exit
The rescue came at enormous cost to Esther Koplowitz, whose family had controlled FCC for generations.
The company's largest stakeholder, Spaniard Esther Koplowitz, will have her stake reduced from more than 50 percent to 22.4 percent.
Koplowitz operates through an investment firm called B-1998. However, this has debts of about $1.1bn, which it is trying to restructure.
The woman who had borrowed record amounts to consolidate family control was now forced to dilute dramatically. Her personal holding vehicle carried over $1 billion in debt—secured by FCC shares whose value had collapsed.
Last December the Mexican magnate beat out Soros to become the largest shareholder in builder FCC after a 1 billion euro rights issue rescue left him with a 25.6 percent stake. Slim's arrival gave the company some much-needed breathing space from its lenders.
Carlos Slim, the Mexican businessman who took control of Spanish construction company FCC in 2016, has increased his equity in real estate developer Realia.
By 2016, the transformation was complete. FCC, founded by a German refugee and controlled for generations by the Koplowitz family, now belonged to Latin America's richest man.
VII. The Slim Era: Strategic Transformation (2016-Present)
Focus on Essential Services
Under Slim's control, FCC accelerated its strategic pivot away from construction toward essential services—particularly environmental and water management. Slim directly owns around 12% of FCC and controls a further 76% of the company through investment vehicles Inversora Carso and Operadora Inbursa.
The strategy reflected lessons learned from the crisis: construction's cyclicality nearly destroyed the company, while municipal services provided stable cash flows throughout the downturn. Why maintain significant exposure to the volatile segment?
Aqualia: The Crown Jewel
The water division became central to FCC's investment thesis. In 2018, FCC monetized a minority stake while retaining control:
IFM Investors, one of the world's largest infrastructure managers, announces it has entered an agreement with Fomento de Construcciones y Contratas S.A. ("FCC"), one of the largest European services groups, to acquire a 49% stake in FCC Aqualia S.A. ("FCC Aqualia"). The aggregate purchase price for the 49% stake in FCC Aqualia is €1,024 million.
FCC has formally completed the sale of a 49% stake in its Aqualia subsidiary to Australian fund IFM Investors for €1,024 million after receiving the green light from the European Commission on August 22t, in accordance with the merger regulation.
FCC has used the disposal proceeds mostly to pay down financial debt at the parent by more than EUR 800 million.
Today, Aqualia is the water management company owned by the citizen services group FCC (51%) and by the Australian ethical fund IFM Investors (49%). The company is the fourth water company in Europe by population served and the ninth in the world, according to the latest Global Water Intelligence ranking (December 2024). It currently provides service to 44.8 million users and we are present in 18 countries.
Aqualia's geographic reach now spans Algeria, Saudi Arabia, Colombia, Chile, Egypt, the United Arab Emirates, Spain, the United States, France, Georgia, Italy, Mexico, Oman, Peru, Portugal, Qatar, the Czech Republic and Romania.
A particularly significant expansion came in early 2024: Aqualia, in keeping with its strategy for international growth, has acquired a controlling stake in the company Municipal District Services, LLC (MDS), that manages the end-to-end water cycle for more than 364,000 people on the outskirts of Houston and has approximately 140 service agreements with Municipal Utility Districts. MDS, recognized for its more than 16 years of dedicated service, is the second-largest provider of water, wastewater and stormwater services in the Houston area.
With this acquisition, Aqualia will take on the development of this business with an aim of becoming one of the leading operators in the southern United States.
Recent Strategic Moves (2023-2025)
FCC has continued monetizing minority stakes in its essential services businesses:
Canada Pension Plan Investment Board (CPP Investments), through its wholly owned subsidiary, CPP Investment Board Europe S.à r.l has agreed to acquire a 24.99% stake in FCC Servicios Medio Ambiente Holding, SAU ("FCC Medio Ambiente"), the environmental services division of Fomento de Construcciones y Contratas, S.A. ("FCC"). CPP Investments has agreed to pay €965 million (C$1,438 million) for the stake.
CPP had already held 25% of this business since 2023, although FCC reports that it will continue to hold the majority of the shareholding with 50.01%, compared to 49.99% held by the fund.
FCC is essentially replicating what it has already done with its Water division (Aqualia), where it also holds a 50% stake after selling the rest to the Australian fund IFM in 2018.
Perhaps the most significant structural change came in 2024:
The partial financial spin-off of FCC in favour of Inmocemento is now complete. On 16 May 2024, the Board of Directors of FCC S.A. announced the proposed partial financial spin-off of FCC, whereby it will transfer en bloc the Real Estate and Cement units to Inmocemento (a company wholly owned by FCC).
At its meeting held today, May 16, the Board of Directors of the FCC Group approved the project for the partial financial spin off FCC in favor of a new company called Inmocemento, which will integrate the Real Estate and Cement business areas. This operation will be submitted for approval at FCC's General Shareholders' Meeting, to be held on 27 June. The spun-off assets of FCC, which will be transferred to Inmocemento, consist of FCC's shares in FCYC and Cementos Portland Valderrivas, 80% and 99%, respectively.
The proposal was approved by the General Shareholders' Meeting held on 27 June, with 99.9% of the votes of the attending capital voting in favour.
This spin-off crystalizes FCC's transformation: the parent company now focuses purely on environmental services, water management, and construction—shedding the cement and real estate businesses into a separately traded entity.
VIII. Controversies & Legal Challenges
No discussion of FCC's evolution would be complete without acknowledging significant legal headwinds—legacies of the boom era that continue casting shadows.
FCC was charged with corruption and money laundering by Spain's High Court in October 2019. The charges related to bribes, totalling €82 million ($91 million), to secure transport and hospital contracts in Panama between 2010 and 2014.
On October 30, Spain's National High Court, the Audiencia Nacional, formally charged Spanish construction company Fomento de Construcciones y Contratas, S.A. (FCC) with corruption and money laundering in connection with €82 million ($92 million) in payments that FCC allegedly made in Panama. The charges, which are directed at three FCC entities, relate to allegations that FCC paid bribes to obtain metro and hospital contracts in Panama between 2010 and 2014.
The judge of the National Court of Justice, Ismael Moreno, said evidence of the investigation, corroborated by information provided by the Swiss authorities, pointed to senior executives of FCC and Odebrecht designing "a scheme of repeated corruption" which consisted of oversizing the supply of steel needed to build the Panama metro and billing it at double its price. "In this way, funds were obtained to pay gifts to employees and political leaders of Panama. The diversion of money was done through screen companies managed by FCC and Odebrecht executives."
Crucially, current management distances itself from these events: FCC is now controlled by Mexican tycoon Carlos Slim, who took a 25% stake in 2014 and gained control of the board in 2016. A spokesperson for Slim's Grupo Carso conglomerate told Reuters on Wednesday that the case related to a period before he acquired a stake in the firm.
Additional legal challenges emerged:
In September 2020, FCC was banned from bidding for contracts by the World Bank for two years following the company's involvement with fraudulent and collusive practices in Colombia. The company was required to pay $5.5m in restitution for its illegal activities.
In July 2022, the company was fined €40.4 million, along with five other contractors, by the Comisión Nacional de los Mercados y la Competencia (CNMC) for bidding collusion in public tenders for building and civil infrastructure works. In January 2023, the National Court suspended, on a precautionary basis, the sanction imposed by the CNMC against FCC Construcción, which consisted of a fine of €40.4 million and a prohibition to contract with public authorities.
These controversies present ongoing reputational and legal risks. However, investors should note that the most serious allegations relate to pre-Slim management, and the company has emphasized compliance reforms under new ownership.
IX. The Modern FCC: Financial Performance & Strategy
2024 Results: A Company Transformed
One of the highlights of the 2024 annual results presented by the FCC Group was its turnover in the period, which amounted to 9,071.4 million euros, 10.4% higher than in the previous year. This growth was mainly caused by increased activity across all of the FCC Group's business areas, particularly Concessions, with excellent growth of 26.3%, followed by the Environment and Water businesses, which increased by 12.8% and 12.6%, respectively, mainly due to new contracts and acquisitions in Europe and the USA.
2025 Performance
The FCC Group recorded revenue of €7,051.5 million in the first nine months of the year, up 7.7% year on year. The FCC Group recorded revenue of €7,051.5 million in the first nine months of the year, up 7.7% year on year. This result was driven by a balanced combination of acquisitions made by the Environment division in the United Kingdom, the United States and France during 2024, as well as by organic growth across all business areas.
The Concessions division outperformed, posting growth of 38%, fuelled by the start-up of new contracts, followed by the Water division, which also recorded significant growth across its various lines of activity. The income statement also benefited from the positive performance in terms of EBITDA, which climbed to €1,058.6 million, up 7.5% from the previous year, mainly supported by higher revenue. EBITDA, at 15%, remained at a similar level to that recorded in the same period of 2024.
Business Segment Performance
Fomento de Construcciones y Contratas SA (FCC) reported robust growth in its Q3 2025 earnings call, driven primarily by its environmental and water management divisions. FCC's environmental services revenue grew by 11.5%, reaching €3.4 billion. FCC demonstrated strong performance in Q3 2025, with significant growth across its business segments. The environmental services division, which includes waste management, saw an 11.5% increase in turnover. The water cycle segment also reported an 8.7% rise in revenue, reflecting FCC's strategic focus on expanding its services in these areas.
FCC plans to invest approximately €1 billion in 2025/2026.
Key Recent Contract Wins
On 30 September, the municipality of Granada signed a new street cleaning and waste collection contract, which will now be managed by FCC Medio Ambiente for the first time. It has a value of €740 million and will run for 15 years.
In construction, FCC has secured major international projects:
The total value of the contract amounts to approximately €4 billion. The Scarborough subway extension SRS project will be built by Scarborough Transit Connect, a consortium formed by Aecon and FCC Canada.
The FCC Group's construction division increased its portfolio by 30% in the first quarter of 2025 compared to the same period in 2024. The international division recorded growth of 42.6%, thanks to the addition to the portfolio of the implementation phase of the Scarborough metro extension in Canada, where, following completion of the development phase, the construction phase has been signed, representing more than €1.9 billion.
FCC ConstrucciĂłn has been present in Canada for more than 25 years. In 1998 he was awarded the Federicton-Moncton Highway construction, operation and maintenance project. In 2011, he was awarded the contract for the expansion of a section of the Toronto Metro expansion, the city's first modern subway infrastructure project.
X. Porter's Five Forces & Hamilton's 7 Powers: Strategic Analysis
Porter's Five Forces
Threat of New Entrants: LOW
Essential services like water management and municipal waste collection feature significant barriers to entry: - Long-term municipal contracts (often 10-20+ years) create sticky relationships - Regulatory expertise and compliance requirements deter newcomers - Capital intensity—treatment facilities, collection fleets, distribution networks - Incumbency advantage: municipalities prefer proven operators
Bargaining Power of Suppliers: MODERATE
FCC sources inputs across diverse categories—vehicles, processing equipment, consumables. No single supplier holds critical leverage. However, specialized equipment for water treatment or waste-to-energy facilities can involve concentrated supplier relationships.
Bargaining Power of Buyers: MODERATE-HIGH
Municipal clients—FCC's primary customers—exercise significant negotiating power: - Competitive tender processes pit operators against each other - Public sector budget constraints limit pricing flexibility - Political sensitivity around essential services - However, switching costs and contract lock-in provide some protection
Threat of Substitutes: LOW
Municipalities cannot simply "substitute" water treatment or waste collection. These are non-discretionary services that populations demand. The only substitution threat comes from insourcing (municipalities taking services in-house), which remains rare given efficiency advantages of specialized operators.
Competitive Rivalry: MODERATE-HIGH
Spain's construction sector features several strong competitors. Acciona recorded a strong rise, from 33rd to 24th place. FCC improves two places in the ranking to 41st. Ferrovial improved three places to 43rd, while Sacyr moved up from 53rd to 62nd and OHLA climbed from 79th to 76th. Finally, Grupo San José improved three positions from 98th to 95th.
ACS continues to be the first Spanish company, occupying the 12th position, repeating the same position as in 2021. Acciona rises three places, going from 36th to 33rd position, experiencing strong growth of 34.2%. FCC is ranked 43rd.
In environmental services, competition varies by geography—FCC holds strong positions in Spain and the UK, but faces formidable rivals like Veolia and Suez in broader European markets.
Hamilton's 7 Powers Framework
Scale Economies: MODERATE
FCC benefits from route density in waste collection (more customers per truck route), shared treatment facilities, and procurement leverage. However, these advantages are localized—scale in Spain doesn't translate directly to competitive advantage in Texas.
Network Effects: WEAK
Unlike platform businesses, FCC's services don't exhibit meaningful network effects. One additional customer doesn't make the service more valuable to other customers.
Counter-Positioning: MODERATE
FCC's integrated essential services model represents some counter-positioning against pure-play construction competitors. ACS, Ferrovial, and others face the same construction cyclicality but haven't matched FCC's pivot toward environmental and water services. However, this isn't true counter-positioning since incumbents could theoretically reposition.
Switching Costs: MODERATE-HIGH
Multi-year municipal contracts create contractual switching costs. Additionally, FCC's embedded relationships with municipalities—understanding local conditions, regulatory requirements, operational rhythms—create soft switching costs that persist even after contract expiration.
Branding: WEAK
In B2G (business-to-government) services, brand matters less than track record, pricing, and capabilities. Residents rarely know or care which company collects their garbage or treats their water.
Cornered Resource: MODERATE
FCC's 125-year operational history provides institutional knowledge that newer entrants cannot easily replicate. The company's embedded relationships across Spanish municipalities—contracts that in some cases have persisted continuously since the 1940s—represent accumulated trust and expertise.
Process Power: MODERATE
Operational excellence in waste collection, water treatment, and construction emerges from decades of incremental improvement. However, these processes aren't dramatically superior to competent competitors.
Competitive Position Assessment
FCC's moat derives primarily from: 1. Long-term contract lock-in with municipal clients 2. Geographic density in core markets (Spain, UK) 3. Integration across the value chain (collection, treatment, disposal, recycling) 4. Carlos Slim's financial backing providing capital stability
Weaknesses include: 1. Legacy legal/compliance issues affecting reputation 2. Dependence on municipal budgets subject to political cycles 3. Construction segment volatility (though now reduced) 4. Currency exposure as international revenues grow
XI. Bull Case vs. Bear Case
The Bull Case
Essential Services Thesis Water and waste management represent perpetual demand—populations cannot pause sanitation during recessions. These businesses provide: - Inflation-linked pricing (many contracts include CPI adjustments) - Defensive cash flows during economic downturns - Growing demand from urbanization and environmental regulation
The Circular Economy Megatrend FCC Medio Ambiente is a leading waste management operator in Iberia, the U.K. and Central Europe, with a growing presence in the U.S. By capitalizing on FCC Medio Ambiente's extensive expertise in recycling and energy recovery and its strong platform for growth, this investment provides CPP Investments an access point to the global circular economy megatrend. The recovery of materials and products, and converting waste into a productive economic resource, is a key pillar of its Infrastructure investment strategy.
EU regulations increasingly mandate recycling and diversion from landfill, driving demand for sophisticated waste treatment capabilities. FCC's energy-from-waste facilities and recycling operations are positioned to benefit.
International Expansion Momentum The US market represents substantial growth opportunity. With the Houston water acquisition and multiple UK expansions, FCC is building scale outside its traditional Spanish base. These contracts entail increasing the population served in Florida by 780,000 people, in Minnesota by 300,000 and a further 175,000 in North Carolina, taking the population served globally by the Environment Area to almost 71 million people.
Slim's Deep Pockets Slim owns more than 80 per cent of FCC, as the Spanish firm is known. Having the backing of one of the world's wealthiest individuals provides financial flexibility and strategic optionality unavailable to competitors.
Portfolio Simplification The Inmocemento spin-off clarifies FCC's equity story—investors can now evaluate the core essential services business without cement and real estate dilution.
The Bear Case
Legal Overhang Persists The Panama corruption charges and Colombia World Bank debarment represent unresolved risks. While management emphasizes these predate current ownership, courts make final determinations—and adverse outcomes could affect bidding eligibility or reputation.
Municipal Budget Sensitivity FCC's revenue depends heavily on public sector clients whose budgets respond to political and economic cycles. Fiscal austerity—whether in Spain, UK, or elsewhere—could pressure contract renewals and pricing.
Construction Remains Volatile While reduced in relative importance, construction still represents meaningful revenue. The sector's inherent cyclicality means periodic profit volatility remains.
Slim Control Concerns But his interests may not be always aligned with minorities in those companies. Going along for the ride has its risks. With over 80% ownership, minority shareholders have limited influence over capital allocation, dividend policy, or strategic direction.
Competition for Municipal Contracts Success in waste and water management attracts competition. Larger players like Veolia, along with private equity-backed entrants, continually bid for contract renewals. No contract is permanently secure.
XII. Key Metrics to Watch
For long-term fundamental investors, three KPIs deserve particular attention:
1. Contract Backlog Growth (Environmental + Water)
The revenue backlog represents contracted future revenues—the most direct measure of business security and growth trajectory. Track both absolute growth and the mix between domestic and international contracts. The company reported: The backlog increased by 3.8% compared to the close of the previous year.
International backlog growth matters most, as it signals success in the expansion strategy beyond saturated Spanish markets.
2. EBITDA Margin (Consolidated)
EBITDA, at 15%, remained at a similar level to that recorded in the same period of 2024.
This margin reflects operational efficiency across the business mix. Watch for margin compression (signaling pricing pressure or cost inflation) or expansion (indicating scale benefits and pricing power). The 15% level represents a reasonable target—essential services should maintain mid-teens margins through cycles.
3. Net Debt / EBITDA Ratio
The 2008-2014 crisis proved that excessive leverage can threaten even companies with stable underlying businesses. FCC has used the disposal proceeds mostly to pay down financial debt at the parent by more than EUR 800 million.
Monitor this ratio to ensure FCC maintains financial flexibility. Current levels around 2-2.5x represent comfortable territory for essential services businesses.
XIII. Conclusion: Lessons from 125 Years
FCC's 125-year odyssey offers enduring lessons about corporate survival, strategic evolution, and the underappreciated power of boring essential services.
Lesson 1: Diversification Saves Lives
That 1911 sewerage contract—unremarkable at the time—planted seeds that saved the company a century later. When Spanish construction collapsed and Alpine Bau imploded, environmental services and water management kept generating cash. The boring municipal contracts that executives often overlook proved essential for survival.
Lesson 2: Family Dynasties Face Inflection Points
Ernesto Koplowitz built something lasting, but family control doesn't guarantee perpetual stewardship. Esther Koplowitz's massive personal leverage to consolidate family ownership ultimately forced dilution to outside investors. Family businesses often face moments requiring outside capital—how they navigate these inflections determines their future.
Lesson 3: Crisis Creates Opportunity for Patient Capital
Bill Gates, George Soros, and Carlos Slim didn't invest in FCC during the boom years. They invested when Spanish construction companies were radioactive, when debt burdens seemed crushing, when headlines screamed disaster. Their patience—and willingness to provide capital when others fled—generated substantial returns.
Lesson 4: Essential Services Compound Quietly
Cities grow. Populations urbanize. Environmental regulations tighten. These trends drive persistent demand for water treatment, waste management, and sanitation services. Unlike flashy technology businesses, essential services rarely generate exciting headlines—but their steady compound growth builds substantial enterprise value over decades.
Today, FCC stands transformed: a Carlos Slim-controlled infrastructure group generating over €9 billion in annual revenues, operating across 29 countries, with environmental services and water management contributing the overwhelming majority of profits. The construction heritage remains, but essential services dominate the value proposition.
For long-term investors, FCC represents an unusual combination: a 125-year operating history, essential services positioning, institutional infrastructure investor validation (IFM, CPP Investments), and the backing of one of the world's wealthiest entrepreneurs. The controversies and legal challenges warrant monitoring, but the underlying business—keeping cities clean, water flowing, and infrastructure functioning—serves needs that persist regardless of economic cycles or political changes.
As the company marks its 125th anniversary, one theme echoes across the decades: survival belongs to those who adapt. From Barcelona's sewers in 1911 to Houston's water districts in 2024, FCC keeps finding essential services that populations need—and that generate the cash flows sustainable enterprises require.
Myth vs. Reality: Common Misconceptions About FCC
| Myth | Reality |
|---|---|
| FCC is a Spanish construction company | Construction represents roughly 10% of EBITDA; environmental services and water dominate |
| The Koplowitz family controls FCC | Carlos Slim controls over 80% of voting power; Koplowitz family retains minority stake |
| Alpine Bau was a Spanish failure | Alpine was an Austrian subsidiary that expanded aggressively into Eastern Europe |
| FCC is a domestic Spanish business | Over 47% of revenues come from international markets, and two-thirds of contracts are now international |
| The corruption charges reflect current management | All significant allegations relate to pre-2015 activities, before Slim took control |
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