RESULTS PRESENTATION. 1 st HALF 2010

Transcription

1 RESULTS PRESENTATION 1 st HALF 2010

2 HIGHLIGHTS ECONOMIC AND FINANCIAL ANALYSIS REVENUES AND EBITDA ANALYSIS BY SEGMENT - METALLIC CONSTRUCTION - RENEWABLE ENERGY CAPEX NET DEBT ANNEXES 2

3 HIGHLIGHTS Analysis of Strategic Goals and delivery of Corporate Objectives along the 1H10: FOCUS OPERATIONAL EFFICIENCY ACTIVITY EXPANSION OF METALLIC CONSTRUCTION One digit growth in YoY Revenues comparison QoQ Growth +25.7% (2Q10 vs 2Q09) +20.6% (2Q10 vs 1Q10) Stable order book and increased exposure to markets outside Iberia (from 48% in 1Q10 to 55% in 2Q10) IMPROVING OPERATING PERFORMANCE Adj. EBITDA (for the Tavira Gran-Plaza effect) +5.8% YoY growth and +1.7 pp improved margin in an increasingly competitive environment The positive performance of Solar, Metallic Constructions and RE Developer more than compensates the losses in Energy Systems VISIBILITY OF MARTIFER SOLAR +56.2% YoY growth in Revenues +153% YoY growth in the EBITDA Increased weight in total Consolidated Revenues, e.g., 29.2% in 1H10 vs 16.5% in 1H09 +96% in 2Q10 vs 1Q10 in the EBITDA FINANCIAL CONSOLIDATION FINANCIAL DISCIPLINE M in Net Debt to M (from FY M ), excluding the Tavira Gran-Plaza effect Net Debt/EBITDA = 4.9x only considering Net Debt allocated to core business PROFITABILITY Recurrent Net Profit grew 13.4% YoY to 1.5 M Prio Energy and Prio Foods contributed, in the 1H10, respectively with 1 M and -2.6 M of Net Profit 3

4 ECONOMIC AND FINANCIAL ANALYSIS Reported Figures - non audited 1H 1H M - IFRS 2010 Marg Marg. Var. % Revenues % EBITDA % % -16.8% EBIT % % 75.5% Financial Results % Profit before tax % Income tax % Profit from continued operations % % -98.6% Net Profit - From discontinued operations Consolidated Net Profit % % -98.5% Attributable: to non-controling interests n.m. to shareholders % Adjusted Figures 1H 1H M - IFRS 2010 Marg Marg. Var. % Revenues % EBITDA % % -16.8% EBITDA w/o Tavira Plaza effect % % 5.8% EBIT % % -51.7% Financial Results % Profit before tax % Income tax % Profit from continued operations % % 13.4% Net Profit - From discontinued operations Consolidated Net Profit % % n.m. Attributable: to non-controling interests n.m. to shareholders % Consolidated Net Profit of 1.5 M, what compares with -9.7 M Net Financial Expenses adjusted for non-recurrent events have progressed favorably to -4.5 M in the 1H10, comparing with M in last year s 1H (this improvement was due mainly to foreign currency exchange gains, but also from a decrease in interest, resulting from a reduction of the debt level and interest rates) 4

5 REVENUES M REVENUES - QoQ Trend Q09 2Q09 3Q09 4Q09 1Q10 2Q10 1H2010 1H2009 Revenues M Weight M Weight Var. % Martifer Consolidated % Metallic Construction % % 4.0% Energy Systems % % -64.5% Solar % % 56.2% RE Developer % % 32.0% Holding, Elim. and Adjust % % -37.6% Besides the strong recorded growth of the revenues in Martifer Solar and RE Developer with +56.2% and +32.0%, respectively, and a growth of 4.0% in the Metallic Construction business area. 1H10 Operating Revenues decreased by 11.9% YoY to M which is totally explained by the decrease of Operating Revenues in the Energy Systems (-64.5%) Energy Systems, as we ve already pointed out, will have a tough 2010 due to the delay of the Ventinveste project and downturn of the sector. We highlight that the QoQ comparison revealed significant improvements, i.e, +39% from 1Q10 to 2Q10 Metallic Construction (53%) and Solar (29%) areas represented 82% of the Revenues. 5

6 EBITDA EBITDA - QoQ Trend M EBITDA Margin % % 10.3% 10.2% 11.9% 7.1% 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 In the 1H10, total consolidated EBITDA registered a sum of 22.2 M, which represents a decrease of 16.8% comparing with same period last year, and corresponding to an EBITDA margin of 9.1%, which compares with the EBITDA margin of 9.6%, in the same period last year. The YoY increase of the EBITDA in Solar (>100%) and RE Developer (>100%) nearly compensates the decrease in Energy Systems EBITDA 1H2010 1H2009 EBITDA M Marg. M Marg. Var. % Martifer Consolidated % % -16.8% Metallic Construction % % -38.2% But if we adjust the values for the effect of the Tavira Plaza we obtain a growth in the Adj EBITDA of 5.8% to 25.4 M, which corresponds to an increase of 1.7 p.p. in the Adj EBITDA margin (please refer to the following slide for a more detailed explanation) Energy Systems % % n.m. Solar % % >100% RE Developer % % >100% Holding, Elim. and Adjust

7 30,0 25,0 20,0 15,0 10,0 5,0 0,0 EBITDA 1H09 TGP effect 1H09 EBITDA 1H09 w/o TGP effect Metallic Construction Energy Systems Solar RE Developer Holding & Adjustments EBITDA 1H10 w/o TGP effect TGP effect 1H10 EBITDA 1H10 ADJUSTED EBITDA The Tavira Gran-Plaza effect +1.7 pp 10.4% % % Adj. EBITDA margin EBITDA Tavira Gran-Plaza effect Business Areas EBITDA 7

8 ANALYSIS BY SEGMENT METALLIC CONSTRUCTION RENEWABLE ENERGY 8

9 METALLIC CONSTRUCTION Sector Trends Specific Markets IBERIA Both countries have been suffering from the debt crisis. At the moment, private investment has contracted, and public investment has been mostly delayed. ANGOLA Continues to show a strong dynamic, both from the public and the private sectors, but the high risk of the country remains the key point for the companies operating in the market. International Outlook Mature countries have stagnated or decreased their demand for metallic constructions Emerging countries have shown some growth in metallic constructions demand companies must capitalize on these markets Steel prices rose during the 1H10, but the last two months (June and July) have shown a slight decrease EASTERN CENTRAL EUROPE Though not suffering the same impact that Iberia faces with the debt crisis, the economic growth in these countries is very slow at the moment, with reduced investment, although already showing positive signs from demand. BRAZIL One of the countries with higher expected growth for the following years, with lots of public investment due to the World Cup in 2014 and the Olympic Games in OTHER GEOGRAPHIES The North of Africa and the Middle East are interesting geographies to look out for in the next months and years. 9

10 METALLIC CONSTRUCTION Order Book The backlog at the end of the 1H10 totalled 283 M, representing an increase of 4.8% against the portfolio at the end of 2009 The weight of the Iberian Peninsula in the portfolio dropped from 64% to 45% YoY Of the recent projects in the order backlog we highlight the Kanhangulo Building in Luanda, Angola, a project of 12.2 M ORDER BACKLOG FEATURED PROJECTS Project Location Total Value Beginning Year End Year Artenius PTA plant Sines, Portugal Euro 22.4 M Pego Power Plant Abrantes, Portugal Euro 7.0 M Galp Petrogal conversion of refinery Sines, Portugal Euro 16.7 M Coach Museum Lisbon, Portugal Euro 6.0 M Champalimaud Center for the Unknown Lisbon, Portugal Euro 7.6 M Ulla Bridge Corunna, Spain Euro 20.8 M Repsol HeadQuarters Madrid, Spain Euro 18.1 M Dublin Airport, Terminal 2 Dublin, Ireland Euro 61.0 M Basarab Bridge Bucharest, Romania Euro 5.1 M Baltic Arena Gdansk, Poland Euro 11.0 M ORDER BOOK TOTAL: 283 M Other 24% Portugal 32% Toll Station Calafat, Romania Euro 3.5 M Renault Factory Tangier, Morocco Euro 25.3 M Canberra Airport Terminal Canberra, Australia AUD 10.3 M Alstom Mannheim 9 Mannheim, Germany Euro 16.5 M Morocco Mall Casablanca, Morocco Euro 5.1 M Kanhangulo Building Luanda, Angola Euro 12.2 M Amiens Hospital Amiens, France Euro 1.8 M Office Building ZAC Victor Hugo Paris, France Euro 3.0 M JMD Koszalin Koszalin, Poland PLN 42.1 M Angola 18% Eastern Central Europe 13% Spain 13% 10

11 METALLIC CONSTRUCTION Earnings Metallic Construction 1H 1H Var. % M Revenues % EBITDA % EBITDA Margin 7.7% 13.0% -5.3 pp Adj EBITDA % Adj EBITDA Margin 10.1% 10.8% -0.7 pp EBIT % EBIT Margin 3.8% 9.8% -6.0 pp Net Financial Expenses n.m. Income tax % Net Profit % Attributable to non-controlling interests % Attributable to shareholders % Note: Adjusted EBITDA figures account a 3.1 M loss in 2010 and a 2.7 M gain in 2009, both concerning the update in the valuation of Tavira Gran-Plaza. Tavira Gran-Plaza was evaluated for 44.4 M in July 2010, whilst it was valued at 47.5 M in Metallic Construction s Revenues in the 1H10 increased about 4.0% on a YoY basis to M. And comparing the 2Q10 with 2Q09, Revenues registered a growth of 25.7%, mainly due to an increase in volume activity but also due to the late recovery in the price of raw material, such as steel and aluminium. Adjusted EBITDA reached 13.2 M, which compares with 13.5 M in the same period last year, corresponding to an EBITDA margin of 10.1%, a decrease of 0.7 p.p. YoY. The adjustments, respectively 3.1 M and -2.7 M, made in 2010 and 2009 in the EBITDA are related with the change of Fair Value of Tavira Gran- Plaza. Net Financial Expenses showed an improvement in this half of the year and amounted to a positive 0.9 M mainly with positive foreign currency exchange of 4.2 M. Net Profit totalled 5.4 M, of which 2.5 M attributable to minorities, mostly in Martifer Angola and Martifer Aluminios. The niche market for aluminium continues to show attractive returns that justify Martifer Constructions efforts to strengthen its position in this area. Net Debt in Metallic Construction by 30 th of June 2010 reached M (includes 25.0 M of Debt used at the Holding level) CAPEX reached 3.3 M in the 1H10, denoting a significant cut when compared to 1H09 where 9.2 M were invested. Roughly 60% of the CAPEX was applied in the conclusion of the new factories in Angola. 11

12 WIND MARKET Sector Trends International Outlook Expectations and estimates for 2010 indicate that the market should reach around 40 GW of new capacity. Around 20 GW of new capacity will come from Asia, with China representing circa 18 GW and close to 2 GW coming from India. The Asian market is almost entirely absorbed by local players, where low cost is the main driver. The European market is to reach around 8 GW. A decrease from the last year s 10 GW, mostly due to the regulatory uncertainty some of the markets are under (like Spain and Italy). The number includes some offshore capacity already being installed. The North-American market will be able to maintain the 10 GW quota of new capacity, despite a probable reduction in the US market that should be offset by an increase in new installations in Canada and Mexico. This market is under some strain due to the fall of natural gas prices, reductions in electricity demand and uncertainties over the national energy policy, which make it even harder to secure long-term power purchase agreements (PPA). To survive the wind market from now on it is necessary to make framework agreements and other partnership style relationships. The wind industry is changing oversupply leads to cuts in production and prepares for medium and long term with product differentiation; price pressure leads to differentiation in services and reduction of costs from the production cycle. In conclusion, 2010 will be a tough year for players, like Martifer, with exposure to the markets in Europe and USA; the decrease in activity will affect the whole value chain. 12

13 ENERGY SYSTEMS Earnings Energy Systems 1H 1H Var. % M Revenues % EBITDA n.m. EBITDA Margin -1.9% 7.7% -9.6 pp EBIT n.m. EBIT Margin -7.1% 3.0% pp Net Financial Expenses % Income tax n.m. Net Profit <-100% Attributable to non-controlling interests n.m. Attributable to shareholders n.m. Revenue amounted to 36.1 M at the end of the 1H10, registering a decrease of 65% in comparison to 1H09 As a consequence of this abrupt reduction in activity, EBITDA margin in the 1H10 dropped to a negative 1.9% owing to, as we have already mentioned, strong external pressure caused by the overall drop of the sector, which was not accompanied by a reduction in structural costs in the same proportion. Similarly the Naval Engineering activity was negatively affected by the operating margins in projects currently under development. Net Financial Expenses recorded 1.5 M, -33% YoY, mostly influenced by the favourable comparison with 1H09 in which were accounted 1.1 M in foreign currency losses. Total CAPEX in the 1H10 reached 4.3 M, mainly in the new tower plant in the USA completed this semester. Net Financial Debt in Energy Systems by the 30 th of June 2010 amounted to 61.0 M : Net Debt of 47.1 M registered in the financial statements of the business area and 13.9 M in other debt used at the Holding level. In 1H10 there have been changes in the management of Energy Systems, which is now led by the CEO of Martifer Metallic Constructions, taking advantage of the existent synergies between both business areas. 13

14 SOLAR MARKET Sector Trends Specific Markets International Outlook The 2Q10 was very active, and expectations for the 2H10 are very good, with specialists believing the market can reach around 15 GW of new installations, which will more than double 2009 figures Europe still has a very unstable economic situation, especially in Greece with the possibility of affecting other countries. Then there is also the regulatory uncertainty in countries like Spain or Italy, where tariffs will be cut, but there s still no visibility on what the final numbers will exactly be. Germany is still the biggest market in the world, and is supposed to remain so in 2010, reaching between 7 and 9 GW. This market will probably suffer a large reduction in 2011, especially in large-scale projects, but a crash is no longer expected. The major PV players in Germany will feel the pressure to move fast to other markets, increasing the competition in most of the geographies we are currently focused on. PORTUGAL The Government announced the objective of 1,500 MW of solar capacity installed by 2020 SPAIN The Government is having trouble because of the cost they have to pay due to the high tariffs offered to renewable energy in recent years; a reduction of tariffs is probably the way forward, with more information available until the end of the year ITALY Market with very good prospects for 2010, with projections between 1.3 and 2.1 GW installed this year; according to the latest draft, cuts will range from 10% to 24% year-to-year depending on system size, and permitting will receive new national guidelines that will speed up the process FRANCE Expanding market in Europe, with a strong wager in building integrated PV, for which the tariff is especially attractive CZECH REPUBLIC Market driven by an attractive tariff and good exposure to sun, will be one of the main PV growth drivers in Europe in 2010; tariffs will be reduced for 2011 onwards BELGIUM Remains as an interesting market with its support for integrated PV in industrial rooftops USA Huge market and great potential, however it is still waiting for strong regulation support to impulse its development GREECE Currently unattractive market for development due to high uncertainty associated with the severe crisis the country is facing and also the current permitting bottlenecks 14

15 SOLAR Earnings Solar 1H 1H Var. % M Revenues % EBITDA >100% EBITDA Margin 10.5% 6.5% 4.0 pp EBIT >100% EBIT Margin 8.7% 4.6% 4.1 pp Net Financial Expenses % Income tax >100% Net Profit >100% Attributable to non-controlling interests >100% Attributable to shareholders >100% Revenue grew 56.2% in the 1H10, in comparison to the same period of last year, totalling 71.5 M, what shows the growing activity in solar photovoltaic industry since 2Q09 and accomplish our expectations in the Solar sector. Total EBITDA rose by 153% to 7.5 M, comparing with the same period last year, with the EBITDA margin reaching 10.5%. CAPEX in the 1H10 was 0.9 M, contrasting with 1.9 M for the same period of Net Financial Debt at the end of the 1H10 stood at 63.8 M, an increase of 16.8 M from year-end This variation is explained primarily by an increase in working capital for the development of various projects. Currently the backlog* (turnkey contracts signed and projects financed) until the end of the year is around 100 M, equivalent to approximately 28 MW of capacity to install. * The definition of backlog is different for Solar and Metallic Construction: whilst the Solar backlog definition represents the projects we have until the end of the year, Metallic Construction s backlog represents a rolling year. 15

16 RE DEVELOPER Earnings RE Developer 1H 1H Var. % M Revenues % EBITDA >100% EBITDA Margin 41.3% 19.4% 21,9 pp EBIT % EBIT Margin n.m. n.m. n.m. Net Financial Expenses % Income tax n.m. Net Profit % Attributable to non-controlling interests <-100% Attributable to shareholders % Note: In 2010 the figures for non-recurring events amount to 12.8 M of impairment losses in the USA and Poland, recorded during the 1 st Quarter Operating Revenue increased 32% to 11.3 M in the 1H10, corresponding to MW of assets in operation. EBITDA reached 4.7 M in the 1H10, representing an EBITDA margin of 41.3%, 21.9 p.p. more than in the previous compared period. The average EBITDA margin of the parks in operation was approximately 80%, which means an improvement over the yearend average (70%), reflecting a gradual improvement in the margins of the parks that came into operation during Total CAPEX during the 1H10 reached 9.6 M, applied to the development of wind projects in Brazil, Poland, Romania and Portugal. Net Financial Debt amounted to 141 M, of which 45.3 M from Project Finance, 13.5 M from project s leasings and 39.2 M with the financial participation in EDP. To this debt we must also add the 45.2 M in other debt at the Holding level and assigned to the business area, totalling M. Net Income adjusted from non-recurring events was -2.8 M. 16

17 CAPEX M CAPEX QoQ TREND Q09 2Q09 3Q09 4Q09 1Q10 2Q10 The value of Investment in fixed assets in the 1H10 amounted to 18.4 M, essentially channelled to the construction of the new tower plant in Texas, USA and to the development of RE Developer s assets in Romania, Poland and Brazil, and finally the investments made in Angola to conclude the Metallic Construction s facilities. The breakdown of CAPEX in the period by business area was 3.3 M in Metallic Construction, 4.3 M in Energy Systems, 9.6 M in RE Developer and 0.9 M in Solar. 17

18 NET DEBT M Metallic Construction Energy Systems Solar RE Developer Holding Martifer Consolidated Corporate Net Debt allocated to operating activities Corporate Net Debt allocated to nonoperating activities Non-Recourse Net Debt Total Net Debt Holding debt allocated to business units EBITDA annualized * (Net Debt allocated to business areas + PPC Holding) / EBITDA 2.6x 22.2x 3.7x 12.4x - 4.9x * The value of EBITDA taken into account in the calculation of financial ratios corresponds to the sum of the last 2 quarters of 2009 with the first 2 quarters of Note: Net Debt = Borrowing + Financial Lease + Derivatives Cash and Cash Equivalents The Group s Consolidated Net Debt at the end of the 1H10, amounted to million euro. The variation (decrease of 3.4% or a reduction of 15.1 M ) verified in the 1H is explained by the reclassification of the debt related with the Tavira Gran-Plaza to liabilities related to assets held for sale, although there was an increase in debt from the working capital investment incurred in the period, related with the increased activity in Solar segment, the payment of the dividend to shareholders and Capex. 18

19 ANNEXES P&L M 1H10 Adjusted 1H09 Adjusted Var. % 1H10 Reported 1H09 Reported Var. % Revenues % % Gross Profit % % Earnings before depreciation, amortization and provisions & impairment losses (EBITDA) % % EBITDA Margin 9.1% 9.6% -0.5 pp 9.1% 9.6% -0.5 pp Depreciation & Amortization % % Provisions & Impairment losses % % Operating Income (EBIT) % % EBIT margin 2.9% 5.3% -2.4 pp -2.3% -8.3% 6 pp Financial Results % % Profit before taxes % % Income tax % % Net Profit from Continued Operations % % Results from the business unit held for sale Net Profit n.m % Attributable to non-controlling interests n.m n.m. Attributable to shareholders % % per share Note: Results presented according to the consolidated financial statements (reported values) non-audited. To allow a better understanding of the operational performance of the Group, values were adjusted for non-recurring events. In the 1 st Half 2010 adjustments reached 12.8 million euro of impairment losses and 13.1 million euro of capital gains relative to Prio Energy and Prio Foods share sales. 1 st Half 2009 values were re-expressed in order to present the results from the business unit held for sale (Agriculture & Biofuels) separate from continued operations. Reported figures in the 1 st Half 2009 include a financial gain of million euro from the sale of REpower Systems, AG, and provisions and impairment losses of 38 million euro resulting from a revaluation of assets. 19

20 ANNEXES BALANCE SHEET M Jun-10 Dec-09 Variation Fixed Assets (including Goodwill) % Other non-current assets % Financial assets available for sale % Inventory and Receivables % Cash and cash equivalents >100% Assets of the business unit held for sale Assets held for sale Total Assets 1, , % Shareholders Equity % Minority Interests % Minority Interests associated to assets held for sale Total Equity % Non-current debt and leasings % Other non-current liabilities % Current debt and leasings % Other current liabilities % Liabilities related to the assets of the business unit held for sale Liabilities related to the asset held for sale Total Liabilities % 20