Mota-Engil milestones

Transcription

1 November 2018

2 Mota-Engil milestones Incorporation of Engil in Portugal Mota & Companhia begins operations in Portugal Mota & Companhia diversifies its service offering Lists on Euronext Lisbon s main share index Mota-Engil SGPS completes 110 Mn ABB Restructures organisational model to geographic business segments First public medium-term bonds issuance ( 175 Mn) Acquisition of EGF Mota-Engil SGPS completes 160 Mn ABB Ports & Logistics businesses sale Indaqua sale Agreement to sell Ascendi s assets June: Record backlog of 5,3bn 2 nd Half: Launch of CerPi investment fund in México, amounting to MXN 3bn Incorporation of Mota & Companhia in Angola Completion of the first major project: Luanda International Airport in Angola Expansion into Sub- Saharan countries other than Angola IPO of Mota & Companhia on the Lisbon Stock Exchange Merger of Mota & Companhia and Engil Enters the logistics sector through the acquisition of the Tertir Group in Portugal Awarded two sections of the Nacala Corridor railway project in Malawi Announced intention to spin-off and list its African business De-listing of MEAFR and ME SGPS share capital increase Enters the energy production sector through Fenix (Mexico) First closing of Ascendi s assets sale to Ardian 1

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5 Mota-Engil in the Environment Business Mota-Engil s turnover in the Environment sector is over 400mn Total population served reaches 14 million clients, number which will grow to 18.5 million taking into account the contracts signed in Ivory Coast PORTUGAL (*) MEXICO CAPE VERDE BRAZIL MOZAMBIQUE (*) Clients of SUMA & EGF 4

6 Internationalisation and diversification are key routes of growth Turnover by geography ( bn) Turnover by segment ( bn) 2, The internationalisation strategy is delivering results with 78% of current total turnover being generated outside Portugal The diversification strategy contributes to value creation through less cyclical cash-flows generation and corporate transactions 5

7 Diversified geographic exposure Turnover reflects diversified exposure to Europe, Africa and Latin America and internationalisation strategy EBITDA reflects resilient margins in Africa and positive evolution in both Europe and Latin America Geographic diversification of backlog expected to continue Turnover 2017: 2,597mn EBITDA 2017: 405mn Backlog 2017: 5,138mn Europe(*) Africa LatAm (*) Includes others, eliminations and Intra-group 6

8 Strong backlog position Backlog evolution ( bn) 1 E&C backlog/sales 2 June 2018: 2.0x Europe Africa LatAm Outside Europe 53% 70% 77% 77% 78% 82% 79% 78% Mota-Engil has been able to increase both Turnover and Backlog, thus ensuring a sustainable growth and a positive outlook for the coming years 1 Contracts already financed. Excludes future revenues from concessions (motorways and EGF). 2 E&C ratio: E&C backlog/e&c turnover. 7

9 Working capital and capex downward trend Working Capital ( mn) Capex ( mn) 19% % % 1 9% 9% % 8% % 146 3% 67 6% Dec14 Dec15 Dec16 Dec17 Jun H18 Working Capital Working Capital to Sales ratio (Last Twelve Months) Capex Capex to Sales ratio Working capital maintains the downward trend which started in The increase in 1H18 ( 44mn) was below the average seasonal first half pick up of working capital in recent years ( 93mn) Capex increase in 2017 and 1H18 was related to EGF and long-term contracts in Africa (equipment for mining works) Cash-flow has benefited from working capital optimisation and capex rationalisation 1 Performance impacted by Africa commodities crisis. 8

10 Committed to decreasing net debt/ebitda Net debt 1 and EBITDA evolution ( mn) Net debt/ebitda Total net debt EBITDA 3 Despite the increase of activity, net debt and gearing have recently been decreasing 1 Excludes leasing and factoring. Sovereign Angolan bonds considered as cash and cash equivalents ( 150 Mn in 1H18). 2 Performance impacted by Africa Commodities crisis. 3 Last Twelve Months EBITDA. 9

11 Liquidity position of 726mn and cost of debt down to 5,1% Gross Debt 3 amounted to 1,633mn and Net Debt 1 to 1,002mn in 1H18 Leasing amounted to 202mn, up 37mn in the 1H18, of which 33mn related to long term contracts Average cost of debt of 5.1% in the 1H18, down from 5.6% in December 2017 Total liquidity position of 726mn ( 631mn of cash & cash equivalents 2 and 95mn of undrawn credit lines) corresponding to c.44% of total gross debt, and to c.1.1x of 1-year non-revolving financing needs Gross debt maturity 3 (as of June 2018; mn) Average cost of debt and average debt life (years) 320 As of June mn were already refinanced or to be refinanced shortly thereafter 6.2% 5.8% 5.6% 5.6% 5.1% year 2 years 3 years 4 years 5 years > 5 years Dec14 Dec15 Dec16 Dec17 Jun-18 Non-revolving Revolving Organic cash flow generation will drive a strong balance sheet 1 Excluding leasing, factoring and the sale of receivables covered by the Cosec Portugal/Angola credit line amounting to 202 mn, 82 mn and 150 mn, respectively, and including 150 mn of Angolan sovereign bonds; 2 Sovereign Angolan bonds considered as cash and cash equivalents ( 150Mn); 3 Excluding leasing and factoring. 10

12 StepUp 2020 strategic pillars Cash-flow generation Sustainable growth Controlled risk Selectivity of projects profitability and cash-flow Higher weight of resilient activities Regional and markets balance Rotation and monetisation of assets Focus on current strategic markets Diversification of the client and supplier base Capex and working capital optimisation Projects with scale and higher profitability Funding sources diversification Divestment of non-strategic assets Focus on utilities businesses (waste and energy) Focus on risk assessment and management 11

13 StepUp 2020 financial strategy Financial strategy pillars Efficient capital allocation Capex rationalisation and working capital optimisation Long-term financial partnerships Local funding for treasury and liquidity management Diversification of funding sources 12

14 StepUp 2020 financial targets Turnover increase to 4 Bn in 2020 Turnover Assumptions: African countries economic recovery Commodities price increase Maintenance of international financial entities appetite to finance relevant projects in Africa and in Latin America, through equity or debt Turnover growth with less working capital requirements Promote at least two markets in each region, which represent 60% of regional turnover Maintenance of EBITDA margins of c. 15% CAGR 11% EBITDA CAGR 10% Optimisation of the organisational structure in order to reduce overheads to 3% of turnover (from 7% today) Improvement in net margin to 3% 13

15 Final remarks Diversified geographical and business exposure Leverage on long lasting presence and growth opportunities, namely in Africa and Latin America Cash flow generation focus to strengthen balance sheet and finance growth opportunities Strategic and structural decisions will enhance the capital structure as key pillars to execute the Company s strategy Challenging year in terms of operational performance, but management strongly committed to deliver on delineated strategy 14

16 Appendix Executive Committee Financials Regional overview Business Diversification Manuel António da Mota Foundation

17 Executive Committee Degree in Law With Mota-Engil since 1990, holding several management positions Gonçalo Moura Martins CEO and Chairman Africa Degree in Economics Since 2009 in senior positions in the Group Degree in Civil Engineering With the Group since 2006 in senior positions Degree in Civil Engineering With the Group for 30 years Degree in Civil Engineering With the Group for 30 years José Pedro Freitas CFO Carlos Mota Santos Chairman Europe and Latin America Martinho de Oliveira CEO Europe (E&C) Ismael Gaspar CEO ME Capital Manuel Mota CEO Africa Degree in Civil Engineering More than 8 years of experience in the Group, namely in Central Europe and in Africa s division João Parreira CEO Latin America Degree in Law Working for Mota- Engil since 2008, being the CEO of LatAm region since 2012 Eduardo Pimentel CEO E&S Degree in Civil Engineering CEO of Mota-Engil E&S and working in the Group for 25 years Luís Silva Strategy and Planning and Control Degree in Economics With the Group for 27 years 16

18 Financials (Consolidated) P&L ( Mn) Europe Africa LatAm 1H18 1H17 YoY Turnover ,251 1,196 5% EBITDA (5%) EBITDA margin 12% 23% 9% 14% 16% (2 p.p.) EBIT (7%) EBT % Minority interests % Net income % 17

19 Financials (Consolidated) Balance Sheet ( Mn) Jun.18 Jun.18 (*) Dec.17 Jun.18- Dec.17 Fixed assets (12) Financial investments Long term receivables (19) Non-current assets held for sale (net) Working capital Equity (106) Provisions (1) Long term payables Net debt Gross debt (45) Cash (169) (*)Excluding IAS 29 1 Sovereign Angolan bonds considered as cash and cash equivalents ( 150Mn in 1H18) 18

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21 At a glance - Europe Turnover ( Mn) EBITDA ( Mn) and margin (%) CAGR : -8% CAGR : 3% 1, % % 20% 15% 10% 1, Backlog 1 ( Mn) CAGR H18: 2% H18 1,166 5% 0% 1 Contracts already signed and financed. Excludes future revenues from concessions (highways and EGF). 20

22 Leadership as an advantage for upcoming investment cycle Positioning Market leader in Portugal in the E&C Leadership in Portugal in waste collection, with a c.50% share in the privatised market and with 68% in waste treatment, following EGF acquisition Top 30 in Europe in E&C Top 10 in E&C in Poland, being present in Central Europe for 20 years Presence in Ireland for ten years Strategy Organic growth in current markets Leverage on competencies, know-how and Human Capital to strengthen business internationalization, namely the E&S activity Growth opportunities Portugal s Government Plan Portugal 2020, partially financed by EU funds, such as railway works Poland s continues to be a beneficiary from EU funds for road and railway infrastructures International opportunities in E&S, namely in Latin America and Africa, leveraging on the Group s competitive advantages in Waste Management / Waste-to-Energy 21

23 EGF s assets highly complementary EGF serves around 6.4 million inhabitants, which represents a 68% market share in municipal solid waste (MSW) treatment business, with 65% of EGF revenues resulting from resilient sources EGF s footprint Equity price of c. 150 Mn, and EV of c. 411 Mn, corresponding to an EV/EBITDA13 multiple of 6.2x Turnover of c. 173 Mn and EBITDA of c. 77 Mn in 2017 Regulatory framework for the period approved, with a RAB of 273 Mn and ROA of 6.14% Integrated management with existing business, SUMA, will allow for synergies and will help gathering opportunities in Africa and LatAm Company fully consolidated since 3Q15 SUMA EGF CESPA Focsa Public entities 22

24 Flagship projects Vasco da Gama Bridge, Portugal Construction of the 2 nd Biggest Bridge in Europe (17 km) 1 st PPP in Portugal Construction between Alto do Lindoso Dam, Portugal ( 369 Mn) Construction of a vault type concrete dam with double bend in Lima River 110 meters high, 21 meters thick and 297 meters crown development Concluded in 1992, remaining a milestone in the Company s major projects Section of expressway S17, Poland ( 158 Mn) Construction of a section of the two-lane expressway S17, which connects Warsaw and Lublin Works included a 24 km length stretch, as well as a network of access roads, 10 km of noise barriers, 7 bridges, 13 overpasses and 4 interchanges Concluded in 24 months 23

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26 At a glance - Africa Turnover ( Mn) EBITDA ( Mn) and margin (%) CAGR : 3% CAGR : 4% % 19% Backlog 1 ( Mn) CAGR H18: +10% 2,657 1,480 1 Contracts already signed and financed. 25

27 Present for 72 years in Africa Positioning Long lasting experience in Africa, where activity initiated in 1946 in Angola Currently present in 15 countries, being leader in Mozambique and Malawi Strong installed asset base, namely equipment and fully vertically integrated Leader in sub-saharan market in the infrastructures sector Strategy Focus on large infrastructure projects Recent Expansion to new markets in sub-saharan region and in E&S Expansion in the value chain, growing from a contractor to a solutions provider Develop and train key local human resources Growth opportunities Government/supranational programmes financed by multilaterals to decrease infrastructure gap Private investments namely in the Power, Oil&Gas, Mining, Logistics Multinational private clients (ex: Vale) as a base to act on a global scale 26

28 Significant local resources Human capital and machinery: Around 11,000 employees (including c.1,500 expatriates) and c. 4,500 items of heavy equipment on site Viana warehouse: Total storage area of 18,200 m 2, key to enable maintaining prudent levels of key materials, equipment and components required by operations Precast factories & project camps: Facilities that ensure self-reliance of operations in remote and challenging environments, complemented by camps that house and cater the project s workforce Quarries and aggregate batching plants: Total installed capacity of 2,940 ton/hr, with 19 plants distributed through Angola (seven), SADC (ten) and West Africa (two) 27

29 Major growth opportunities ahead The Programme for Infrastructure Development in Africa (PIDA) which amounts to US$ 360 Bn envisages infrastructure development in the period The African Regional Transport Infrastructure Network (ARTIN) programme, part of PIDA s programme, aims at building a road network connecting major cities and is expected to be complemented with other important infrastructure investments, namely ports and a standardized railway network PIDA Transport Networks 2020 & Corridor 2020 Corridor 2040 TAH 2020 TAH 2040 ECCAS Connectivity Hub Port Programmes ARTIN Programme 1 Infrastructures to be built until 2040 Modern Highways 37,300 km Modern Railways 30,200 km Port Capacity 1.3 Bn tons Hydroelectric power generation 54,150 MW Interconnecting powerlines 16,500 km New water storage capacity 20,101 hm 3 1 PIDA, African Development Bank Group. 28

30 Flagship projects Section 3 and 5 of Nacala Corridor Project, Malawi ( 700 Mn): Construction of 2 sections of the Nacala Railway Corridor, connecting the coal mines in Moatize and the port of Nacala (in Mozambique) through Malawi Civil works, earthworks, supply of ballast and sleepers and assembly of the railway superstructure Completed in 2H14 New Luanda Bay, Angola ( 300 Mn): Rehabilitation of the coastline area of the Luanda Bay Project involved the construction of modern road infrastructures, green spaces, cultural, sports and shopping areas Project concluded in 2012 Vale s mining contract, Mozambique (US$445 Mn): Works in Vale s Moatize coal mining project Project includes mining services involving drilling, explosives supply, loading and transport of barren and coal To be concluded in

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32 At a glance Latin America Turnover ( Mn) CAGR : +25% EBITDA ( Mn) and margin (%) CAGR : +27% % 33 9% 42 Backlog 1 ( Mn) CAGR H18: +9% 1, Contracts already signed and financed. Excludes future revenues from concessions (highways). 31

33 A regional player with more than 20 years in the region Positioning Regional Player with presence in 9 countries Presence in the Region since 1998 Peru (actually in the Top 4 of the market) Mexico is the biggest market in E&C with presence in E&S, Energy and road concessions Entry in 2015 in the Energy business through Generadora Fénix (300 MW) Recent expansion to new markets Strategy Focus on large infrastructure projects Partnerships with local companies (Ex: ME Mexico and ECB), including in the financial front Concession activity acts as a promoter of the construction activity, with an asset rotation policy focus Business diversification to waste management Growth opportunities Public investment to be fuelled by new Infrastructure Plans in the near future Mota-Engil know-how of more than 20 years is a competitive advantage to leverage on PPP and APP opportunities Reinforcement of Public Investments in the Environment and Energy sector as an opportunity to diversify investments 32

34 Different market approaches Start of operations in 2008 through the award of a road concession, being the country with the highest backlog Top 5 in Mexico Construction diversification (roads, railways, light rail, buildings) and reinforce Concessions portfolio Entry in the electricity generation business in 2015 Start of operations in Latin America through Peru in 1998 Top 4 in Peru Until 2010 operations in mining and road infrastructure, and since then also leveraged on private investment To reinforce: Start of operations in 2011, with first project awarded one year later Partnership with ODINSA in 2013, leader in the concessions sector in Colombia First concession awarded in 4G Colombian Infrastructure Plan in 2014 Start of operations in 2009 through road concessions Acquisition of 50% stake in ECB in 2012 Competitive edge of having full engineering license for any project in Brazil Regional track record with the financial market, including multilaterals Partnerships with local companies Business diversification to waste management activities, namely in Mexico and Brazil 33

35 Entering in Mexico s Electricity Liberalised Market A new business Leading role in the opening of Mexico s electricity liberalised generation market Build, explore, operate and maintain electricity generation plants for a period of 30 years through Generadora Fénix (Mota-Engil Mexico with a 51% stake) No upfront investment requirements, no labour or facilities related liabilities assumed and resilient cash flow expected Strategic Rationale Strong track record in Mexico, a core country for the Group Positive outlook for the sector, namely in electricity generation with the new electricity law opening the sector to private players Complementary know-how Growth Opportunities Opportunities Existing hydro plants already in operation with c.300 MW Option to add 1,700 MW through a CCGT (when is PPA signed), totalling 2,000 MW of installed capacity 34

36 Major growth opportunities ahead Peru 1 (US$ Bn) Planned investment of US$21 Bn in transport infrastructures for the period Mexico 2 (US$ Bn) The National Infrastructure Plan for the period includes investments in the transport sector expected at US$46 Bn Highways 31.8 Railways 17.0 Ports 6.3 Airports 2.3 Total 57.4 Brazil 3 (US$ Bn) The National Plan for Logistics and Transportation includes US$ 27 Bn for the period Colombia 4 (US$ Bn) The Fourth-Generation Concession Plan (4G) seeks an investment of US$ 26 Bn in the period Source: Peru's Plan Nacional de Infraestructura Source: México s Programa Nacional de Infraestructura Source: Brazil s Plano Nacional de Logística e Transportes Source: Colombia s Agencia Nacional de Infraestructuras. 35

37 Flagship projects Perote-Xalapa Project, Mexico ( 180 Mn): Highway construction connecting Mexico City to the coastal city of Veracruz, where the most important Atlantic port of the country is located Extension of 60 km with several special works of art Concluded in 2012 Tailings Storage Facility Toromocho Project, Peru (US$147 Mn): Construction of an earth dam Over 5 Mn m3 of fill material at an altitude of approximately 4,600 meters Concluded in 2013 Carajás railway, Brazil ( 243 Mn): Contract with the Brazilian company Vale for the duplication of Blocks A2, A3 and A4 of Carajás railway Works include an extension of 150 km, including 12 bridges and 10 viaducts Block A2 completed in December 2016 and Blocks A3 and A4 in June

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39 Business diversification Mota-Engil in the energy business Portugal (EGF): Waste-to-Energy: 50MW Biogas (Landfill): 46MW Mexico (Fénix): Mini-hydro (installed capacity of 300MW) 38

40 We believe in the benefits of a management model that is ethically, socially and environmentally responsible. For that reason we share a responsible attitude of sustainable growth, respecting the well-being of future generations, implementing standards of eco-efficiency and contributing to the development of the community that surrounds us. Therefore, it was created the Manuel António da Mota Foundation in tribute to the founder of the Group and that has Mota-Engil as sole sponsor, being an important instrument of the policy of social responsibility, as an organised and systematised expression of an ethical and socially committed management, on behalf of an active and participatory business citizenship, through which the Mota-Engil Group seeks to contribute in the communities where it carries out its activities, especially in the social, cultural, educational, training and environmental fields. Contribute to the social development of the communities where it carries out its activities. Present the Manuel António da Mota Award annually to recognise organisations and personalities who have distinguished themselves in the various areas of the Foundation's activities. Promote culture, enhance its value and access the enjoyment of the cultural assets in the fields of plastic arts, the performing arts, music, humanities, science and technology. 39

41 Disclaimer The information contained herein ( Information ) relates to Mota-Engil, SGPS, S.A. ( Mota-Engil ) and has been prepared using information extracted from sources deemed credible and reliable. However, the Information does not purport to be comprehensive and has not been verified by an external auditor or expert. The Information is disclosed under the applicable rules and regulations and may only be used under the condition that Mota-Engil renders no representation, warranty or undertaking, express or implied, with respect to, and that no reliance should be placed on, the fairness, accuracy, completeness or correctness thereof. Neither Mota-Engil nor any of its affiliates, subsidiaries, directors, representatives, employees and/or advisors shall be held liable or responsible for any direct or indirect damages, whatsoever, that may occur or that may arise from any use of the Information, or otherwise arising in connection with this presentation or as a result of any use or manipulation, modification or alteration, update, revision or correction, whether intentional or not, of the Information. The Information may contain estimates or expectations of Mota-Engil and thus there can be no assurance that such estimates or expectations are, or will prove to be, accurate or that a third party using different methods to assemble, analyse or compute the relevant information would achieve the same results. Some contents of this document, including those in respect of possible or assumed future performance of Mota-Engil or its industry or other trend projections, constitute forward-looking statements. By nature, forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors, seeing as they relate to events and depend upon circumstances that are expected to occur in the future and that may be outside Mota-Engil s control. Such factors may mean that actual results, performance or developments may differ materially from those expressed or implied by such forward-looking statements. Accordingly, there can be no assurance that such forward-looking statements will prove to be correct and, as such, no undue reliance shall be placed on forward-looking statements. All Information must be reported as of the document s date, as it is subject to many factors and uncertainties. The Information may change without notice and Mota-Engil shall not be under any obligation to update said Information, nor shall it be under any obligation to make any prior announcement of any amendment or modification thereof. Therefore, the Information may not be used in the future in connection with any offer (public or private) in relation to securities issued by Mota-Engil, which declines any responsibility to update, revise or correct the Information. The Information is provided for general purposes only and is not intended to constitute professional advice. Furthermore, the Information does not constitute or form part of, and should not be construed as, an offer (public or private) to sell, issue, advertise or market, an invitation to subscribe or purchase, a submission to investment gathering procedures, the solicitation of an offer (public or private) to subscribe or purchase securities issued by Mota-Engil or any of its affiliates in any jurisdiction, or an inducement to enter into investment activity in any jurisdiction. Any decision to subscribe, purchase, exchange or otherwise trade any securities in any offering launched by Mota-Engil should be made solely on the basis of the information contained in the relevant prospectus and/or other relevant offering documents to be made available in due course in relation to any such offering, in accordance with the applicable rules and regulations. 40