GRAÑA Y MONTERO. Corporate Presentation

Transcription

1 GRAÑA Y MONTERO Second Quarter 2015

2 Business highlights

3 Grupo Graña y Montero at a glance Largest Engineering & Construction company in Peru measured by revenues 82 years of recognized operational excellence and significant international experience Undisputed reputation, reliability and highest corporate governance standards Revenues of US$2.3bn and EBITDA of US$306mm in 2014 Backlog and recurrent business of US$4.3bn as of December x revenues 4,200 engineers and over 49,000 employees Listed in the NYSE since July 2013 Shareholders August 2015 AFPs (*) 12.4% Others 17.4% Internal Shareholders Internal Shareholders 32.0% (*) Includes only AFPs holdings reported at CAVALI (Peruvian clearing house) GH Holding Group (Jose Graña, Chairman): 17.8% Bethel Enterprises Inc. (Carlos Montero, Director): 5.1% Byron Development (Mario Alvarado, Director and CEO): 3.4% Hernando Graña (Director): 2.3% ADSs Program, 38.2% Other executives and former executives: 3.4% 3

4 Our Business Segments Largest E&C company in Peru Leading infrastructure concessionaire in Peru Largest apartment building developer in Peru Leader in infrastructure O&M and complementary services LTM2015 Revenues by business segment LTM2015 EBITDA by business segment LTM2015 Net Income by business segment Technical Services 15% Real Estate 3% Engineering & Construction 70% Technical Services 10% Real Estate Real Estate 9% Engineering & Technical 5% Engineering & Construction Services 3% Construction 45% 43% Infrastructure 12% Infrastructure 36% Infrastructure 50% US$ 2,418mm US$ 266mm US$ 65mm (S/. 7,688mm) (S/. 847mm) (S/. 205mm) 4

5 Engineering and Construction Main companies: GyM: Construction company, founded in 1933, comprised of three divisions: electromechanic construction, civil construction and building construction. Stracon GyM: GyM subsidiary since 2011, specialized in mining services. GMI: Engineering consulting firm since 1984 consisting in two different divisions: Supervision & Engineering and Geomatics. Vial y Vives- DSD S.A.: E&C company formed from a merger between two Chilean companies, Vial y Vives and DSD Construcciones y Montajes, which are companies we acquired in 2012 and 2013, respectively. Morelco S.A.: Colombian company acquired in 2014, specialized in electromechanical assemblies, civil works, and services for the oil and gas industry as well as energy industry. Relevant Facts: We have presented a proposal in order to develop the civil works for the Talara Refinery Modernization Project GyM S.A., was awarded the Buena Pro for the construction of an Open Plaza shopping center in the city of Huancayo for US$ 47 million. Stracon GyM has subscribed with Red Eagle Mining a contract for the development and operation of the San Ramon Gold Mine in Colombia for 8 years for US$ 155 MM and has subscribed shares from Red Eagle Corporation for US$ 7 MM with which it will obtain a minority stake of 19.94%. 1,800 1,600 1,400 1,200 1, Revenues and EBITDA (US$ in millions) 1,685 1,382 1,457 1, Revenues EBITDA

6 Infrastructure Main companies: Norvial: Concessionaire of Red Vial 5 Highway Survial: Concessionaire of 1st Tranche of the Interoceanic Highway Concesión Canchaque: Concessionaire of the Bs As-Canchaque Highway Concesionaria La Chira: Concession for the construction, operation and maintenance of a waste 350 water treatment plant for Lima Ferrovías GyM: Concessionaire of Line 1 of the Lima Metro 300 GMP: Oil production (Blocks I, III, IV and V), gas processing plant and operation of ten 250 fuel terminals in Peru 200 Concesionaria Via Expresa Sur: Concession to build, maintain, and operate a 4.6km extension of one of the main highways in Lima 150 COGA: Company responsible for the operation and maintenance of the transportation system of 100 Transpotadora de Gas del Perú (TgP) Chavimochic: Concession to build the water infrastructure of the third stage of the Project 50 Relevant Facts: GyM S.A. has subscribed a MoU for a participation of 20% in the Concesionaria del Gasoducto Sur Peruano for US$ 215 MM and 29% in the construction consortium. Lima Metro Bond Issuance for S/. 629 MM in February and Norvial Bond Issuance for S/. 365 MM in July Block III and Block IV contracts in Talara: started operations in April From the 28 Private Iniciatives presented in 2014 and 2015, 15 are still in the process of approval - 4 Private Initiatives presented in 2014 have been declared of relevance Talara Refinery: 4 additional proposals presented for the Refinery expansion s related projects 0 Revenues and EBITDA (US$ in millions) Revenues EBITDA

7 Real Estate Main companies: Viva GyM: Real estate development company Almonte: Subsidiary of Viva GyM and owner of a 800 Ha. of undeveloped land, located 30 Kms to the south of Lima (Lurín) Affordable Housing Projects under execution: Parques del Callao, Parques de San Martin de Porres, Parques de Villa El Salvador II, Parques de Carabayllo II, Parque Comas, Parques Naranjal Parques de Piura, Parques de Nuevo Chimbote, Chiclayo Bolognesi (Provinces) Housing Projects under execution: Pezet (San Isidro), El Sol 451 (Barranco) Commercial Real Estate projects under execution: Real Ocho (San Isidro), Real Dos, Rivera Navarrete, Panorama (offices) Relevant Facts: Viva GyM S.A. has subscribed a contract for the transfer of shares and rights by which it acquires 78.5% of the shares and rights of El Rancho project for approx. US$ 49.8 MM Revenues and EBITDA (US$ in millions) Revenues EBITDA Units delivered 1,244 1,368 1, Units sold 1,368 2,017 1,

8 Technical Services Main companies: Revenues and EBITDA GMD: Provider of IT services and business solutions through four divisions: (i) Systems Integration, (ii) IT Outsourcing, (iii) Application Outsourcing, (iv) Business Processes Outsourcing. Concar: Operation and maintenance of infrastructure assets. It currently operates more than 5,000km of Peruvian roads and highways, including three private concessions, in addition to the Lima Metro. CAM: provides field and specialized electrical services in Chile as well as in Brazil, Colombia, and Peru. Relevant Facts: GMD acquired 44% of Adexus S.A. for US$ 13.8 MM with presence in Chile, Peru, Ecuador, Argentina and Colombia. CAM Chile, through its subsidiary Coasin, was awarded two contracts: - US$ 69 MM telecom contract in Chile with VTR Banda Ancha in July - US$ 75 MM contract with Telefonica Chile in June (US$ in millions) Revenues EBITDA

9 Financial Performance Financial Performance 9

10 Consolidated Results (US$ in millions) 2,500 Consolidated Revenues (US$ in millions) 140 Consolidated Net Profit (US$ in millions) 2, , , ,573 2,051 2,134 2,345 1,103 1, Consolidated EBITDA (US$ in millions) Consolidated Margins % over Total Revenues % % 15% 10% 5% 15.9% 15.3% 14.9% 6.8% 13.6% 17.3% 16.8% 5.5% 5.4% 13.1% 13.6% 4.3% 13.6% 13.9% 4.4% 9.4% 9.3% 1.1% 0 0% Net Margin Gross Margin EBITDA Margin 10

11 Investments Investments (US$ in thousand) Investments by Business Area 2Q2015 As a percentage $352,293 $292,421 $385,477 Real Estate 2% Technical Services 10% Others 7% Engineering & Construction 24% $183,050 $82, Q2015 Infrastructure 57% (US$ in thousands) 2010 Engineering & Construction 22,879 68, ,503 73, ,245 23,637 19,778 Infrastructure 4,941 44, , ,198 75,879 25,855 47,096 Real Estate 44,184 27,281 50,298 27,075 39,961 37,294 1,634 Technical Services 47,151 40,334 15,593 13,403 40,441 23,199 8,572 Others 5,758 2,563 4,564 9,686 66,951 8,480 5, , , , , , ,466 82,387 11

12 Financial Debt Consolidated Gross Debt Maturity of Gross Debt 2Q2015 (US$ in thousand) Cash 244, , , , , , , , , , , , , , , , , , Q2015 Gross Debt Gross Debt/EBITDA Less than Between 1 Between 2 More than Total 1 year and 2 years and 5 years 5 years Other loans 1,364,256 49,721 56,521-1,470,498 Leasing 134, ,140 62,747 14, ,816 Ferrovías Bond Issue 28,914 21,078 42, , ,953 Total debt S/. 1,527, , , ,523 2,410,267 Total debt US$ 480,460 59,433 50, , ,184 Debt by Business Area 2Q2015 % Real Estate 8% Type of Debt 2Q2015 Currency 2Q2015 Others 7% Infrastructure 39% Engineering & Construction 46% Project Financing 44% Working Capital 45% US Dollars 35% Technical Services 6% Leasings 10% Nuevos Soles 58% 12

13 Backlog and Recurrent Businesses 5,000 4,500 4,000 Total Backlog + Recurrent Businesses in MM US$ 3,075 4,574 4,329 4,345 3, MM US$ 394 MM US$ 2.25x 580 MM US$ By segments Real Estate 3% Technical Services 16% Engineering & Construction 59% 3,500 3, x 356 MM US$ 2.03x 1.85x 503 MM US$ 1.51x 2.00 Infrastructure 22% 2, ,000 4,170 MM US$ 3,935 MM US$ 3,765 MM US$ By type of contract 1,500 1,000 2,719 MM US$ 3,163 MM US$ Unit Price 47% Cost plus Fee 39% Q Backlog Recurrent Businesses Backlog + Rec. Businesses/Revenues Ratio Lump Sum 11% EPC 3% 13

14 Backlog and Recurrent Businesses (June 2014 June 2015) By type of client By end-market 21% 15% 3% 7% 4% 4% 16% 80% 75% Private Public Consessions 7% 4% 16% 6% 4% 16% 2% 19% 9% 17% 27% 28% Mining Projects Mining Services Oil and Gas Electricity Water and Sewage Real Estate Transport Others 20% Construction/Non-Construction By country 1% 32% 35% 65% 68% Non-Construction Construction 15% 9% 2% 3% 3% 10% 2% Peru Chile Colombia Panama Brasil & Guyana 82% Bolivia & Ecuador 73% (*) Outer circle corresponds to June 2015 data, whilst inner circle corresponds to June 2014 data 14

15 Backlog and Recurrent Businesses (US$ in thousand) Company Initial Backlog Executed Backlog New Requests Backlog Total Annual Backlog TOTAL IQ IIQ GyM 975, , ,486 50, , , , , ,125 Stracon GyM 1,211, ,699 13,836 3,222 10,614 1,034, , , ,431 Vial y Vives 254, ,701 46,668 45, , ,932 83, Morelco 349,091 92,612 16,010-8,484 24, , ,855 70,882 91,751 CAM Perú 49,839 18,865 5,947 6, ,921 17,212 14,428 5,281 GMI 43,956 27,111 15,965 11,053 4,911 32,809 17,327 15,482 Engineering & Construction 2,885, , , , ,538 2,243, , , ,808 Survial 70,649 15,747 1, ,331 24,259 11,731 20,342 Canchaque 15,752 1,338 1, ,483 8,944 2,616 3,923 La Chira 15,157 5,400-1, ,108 5,403 1,082 1,623 Linea 1 Metro de Lima 210,086 32,018 29,018 12,221 16, ,086 31,592 68, ,884 Infrastructure 311,645 54,503 29,866 12,350 17, ,008 70,198 84, ,772 Viva GyM 81,362 15,026 37,476 29,495 7, ,812 43,671 29,696 30,445 Real Estate 81,362 15,026 37,476 29,495 7, ,812 43,671 29,696 30,445 GMD 91,830 36,222 51,165 19,520 31, ,772 27,647 38,689 40,436 Concar 153,782 46,800 31,981 26,663 5, ,963 47,610 38,509 52,844 CAM 400,674 86,150 51,356-35,565 86, ,879 81, , ,997 Technical Services 646, , ,501 10, , , , , ,277 Eliminations -109,158-32,146-6,371 4,452-10,823-83,383-21,505-25,472-36,406 Total Backlog 3,815,286 1,115, , , ,095 3,162,735 1,051,484 1,073,354 1,037,897 Recurrent Businesses GMP 496,655 57,419-22,655-53,997 31, ,581 70, , ,922 Norvial 110,727 34,642 34,848 13,244 21, ,933 17,290 36,021 57,622 Eliminations -27,379-23,942-21,437-8,619-12,819-24,875-2,101-9,110-13,665 Total Recurrent Businesses 580,003 68,119-9,245-49,372 40, ,639 85, , ,879 Total Backlog + Recurrent Businesses 4,395,289 1,184, , , ,222 3,665,374 1,137,259 1,238,338 1,289,776 15

16 What s Ahead? 16

17 Infrastructure Pipeline Infrastructure Investment Gap in Peru Proinversión Project Portfolio (*) Project Location Status Estimated Investment (US$ MM) Estimated award date Toll Roads Energy 37% Telecommunications 22% Mountain Range Longitudinal Road 4 Mountain Range Longitudinal Road 5 Junin, Apurimac, Huancavelica, Ayacucho, Ica Contested Q16 Cusco and Puno Not contested To be defined 2016 ~US$ 88 bn investment gap Rail Junin and Huancayo-Huancavelica Railway Huancavelica Contested Q16 Line 3 Lima Metro Lima Not contested To be defined 3Q16 Health and Education 1% Water treatment and sewage 6% Hidraulic Infrastructure 10% Transportation 24% Oil and Gas LPG Supply System for Lima and Callao Lima and Ica Contested Q15 Electricity Quillabamba Termical Station Cusco Contested Q15 Water treatment Source: Peruvian Association for the Promotion of National Infrastructure (AFIN), Proinversión (*) Table only reflects most relevant projects that we are evaluating Headworks and Water Supply Infrastructure for Lima Logistics Platforms Logistics zone and outer harbor for Callao Port Junin and Lima Contested Q15 Callao Contested Q16 17

18 Infrastructure Pipeline Private Initiatives presented in 2014 Infrastructure projects Water and Sewage 4 projects US$ 1.3 billion Flowchart of the process of approval Submitted and awaiting reply from Proinversión Proinversión Roads 2 projects US$ 1.7 billion Innovation & Technology 6 projects US$ 0.6 billion Services 2 projects TOTAL Private Initiatives presented in 2015 Water and Sewage 4 projects Infrastructure projects US$ 0.8 billion ~ US$ 4.4 billion US$ 1.0 billion Roads 3 projects US$ 2.8 billion 11 PIs presented in 2015 have been admitted 4 PIs presented in 2014 have been declared of relevance for ~US$ 1 billion Admissible Declaration of relevance and priority Development of preinvestment studies Declaration of viability under SNIP Proinversión MEF Proinversión/ MEF MEF Minimum Time Frame: 18 months Innovation & Technology 4 projects US$ 0.1 billion Declaration of interest Management of Investment Promotion Services & Installations 3 projects US$ 0.4 billion TOTAL ~ US$ 4.3 billion Selection Process and contract is signed 90 days for others to present propposals 18

19 Stock Performance GRAM- Sep 30, 2015 ADSs (million) Market Cap (US$ MM) VWAP (3M) (US$) week high (US$) week low (US$) 3.56 Average daily traded volume (3M) (US$ MM) 0.43 GRAMON Sep 30, 2015 Shares (million) Market Cap (S/. MM) 1,716.1 VWAP (3M) (S/.) week high (S/.) week low (S/.) 2.38 Average daily traded volume (3M) (S/. MM) 0.49 S/ S/ S/ S/ S/ S/ S/ S/ S/ Closing Price 30Sep15: GRAM: US$ 3.98 GRAMON: S/ $19.00 $17.00 $15.00 $13.00 $11.00 $9.00 $7.00 $5.00 S/ Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 GRAMONC1 GRAM US $

20 Unsaved Document / 12/11/2012 / 14:08 Appendix Appendix 15

21 Vision and strategic goals 1 Expand our Infrastructure businesses 2 Maintain and reinforce our position as the leading contractor for complex projects in Peru and other key markets 3 Continue growing by exporting our capabilities 4 Disciplined approach to capital 5 Continue fostering our corporate values throughout the organization To be recognized as the most reliable engineering services and infrastructure group in Latin America 21

22 Corporate Structure 98.23% 67.0% 98.1% (1) 88.7% Construction services Toll-road concession Real Estate development IT services Contract mining services 87.64% Toll-road concession 99.9% 99.9% Land parcels 50.4% 99.6% Operation and maintenance of infrastructure assets 80.4% Toll-road concession 75.0% Engineering and Construction services in Chile 89.4% Mass transit system concession 75.0% Electricity networks services Engineering services 70.0% Water plant concession 50.0% Engineering and Construction services for Oil&Gas industry in Colombia O&G production, gas processing & fuel storage 95.0% Highway concession 100.0% Operation and maintenance of gas pipelines 51.0% (1) 38.97% of the share capital in Viva GyM is held by our subsidiary GyM. 22

23 Consolidated Results (S/. in millions) 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 - Consolidated Revenues (S/. in millions) 7,009 5,968 5,232 4,241 3,764 3,085 Consolidated EBITDA (S/. in millions) 1,200 1, , % 20% 15% 10% 5% 0% Consolidated Net Profit (S/. in millions) Consolidated Margins % over Total Revenues % 15.3% 14.9% 6.8% 13.6% 17.3% 16.8% 5.5% 5.4% % 13.6% 4.3% % 13.9% 4.4% % 9.3% 1.1% Net Margin Gross Margin EBITDA Margin 23

24 Consolidated Results Income Statement (Thousands US$) Revenues 1,572,587 2,050,915 2,134,233 2,344,824 1,103,326 1,184,054 Gross Profit 234, , , , , ,770 Operating Profit 180, , , ,448 90,059 48,182 Financial expenses (2,977) (12,331) (15,451) (15,749) (6,214) (9,583) Participation in Associates Dividends Perceived ,004 17,881 5,243 4,909 Exchange rate difference 696 8,281 (25,185) (14,815) (4,248) (11,131) Profit before income tax 177, , , ,765 84,840 32,377 Income tax (52,446) (60,594) (65,247) (48,911) (26,218) (10,563) Minority Interests (17,472) (29,909) (32,980) 120,854 (10,525) (9,248) Net Profit 107, , , ,282 48,098 12,566 Depreciation & Amortization 66,090 95,846 92,682 86,999 45,300 45,289 EBITDA 250, , , , , ,349 Balance Sheet (Thousands of US$) Total Assets 1,369,568 1,957,125 2,257,824 2,586,116 2,439,308 2,588,657 Cash 244, , , , , ,598 Financial Debt 196, , , , , ,184 Total Equity 538, ,547 1,143,362 1,063,875 1,151, ,484 Financial Keys Gross Margin 14.9% 13.6% 16.8% 13.6% 13.9% 9.4% Net Margin 6.8% 5.5% 5.4% 4.3% 4.4% 1.1% EBITDA Margin 15.9% 15.3% 17.3% 13.1% 13.6% 9.3% Financial Debt /EBITDA Financial Debt /Equity ROE 23.1% 20.6% 12.9% 10.7% 12.0% 7.8% 24

25 Workforce Total number of employees Since 2011 Total workforce 13,770 15,841 16,689 Categories June 2015 (4) Engineers 4,313 Other professionals 2,095 11,399 Technical specialists 10,281 9,641 Total Employees 16,689 Manual laborers (1) 23,224 Joint operations employees (2) 3,283 Subtotal 43,196 Subcontracted employees (3) 5, Q2015 Total Collaborators 49,052 (1) The number of manual laborers, who form part of our network of approximately 40,000 manual laborers, varies in relation to the number and size of projects we have in process at any particular time. (2) Includes engineers, professionals, technical specialists and manual laborers employed by our joint operations. (3) Occasionally, we employ subcontractors for particular aspects of our projects, such as carpenters, specialists in elevator installation and specialists in glassworks. We are not dependent upon any particular subcontractor or group of subcontractors. (4) June 2015 includes Morelco 25

26 Corporate Governance Internal Directors External Directors Independent Directors Graña y Montero (GRAMONC1) is listed in the Lima Stock Exchange since 1997 and in the NYSE since July 2013 (GRAM) GRAMONC1 is included in the Corporate Governance Index of the Lima Stock Exchange Board of Directors The Corporate CEO is a Board Member The Board Committees are integrated mainly by External Directors Subsidiaries have at least one (1) External Board Member within their Boards Hernando Graña Acuña José Graña Miro Quesada Pedro Pablo Errazuriz Mario Alvarado Pflucker Carlos Montero Graña José Chlimper Ackerman Federico Cúneo de la Piedra Hugo Santa María Guzmán Mark Hoffmann Rosas Recognitions Member of the Companies Circle of the Latin American Corporate Governance Roundtable since October 2010 Winner of the Llave de la BVL in 2014, 2010 and 2009 Recognized by Euromoney as: Best managed Company in Latin America Overall Best managed Company in Peru Best Managed Company in the Construction & Cement Sector in Latin America Most transparent accounts 26

27 Disclaimer Forward-looking statements This presentation contains forward-looking statements. Forward-looking statements convey our current expectations or forecasts of future events. These statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to differ materially from the forward-looking statements that we make. Forward-looking statements typically are identified by words or phrases such as may, will, expect, anticipate, aim, estimate, intend, project, plan, believe, potential, continue, is/are likely to, or other similar expressions. Any or all of our forward-looking statements in this presentation may turn out to be inaccurate. Our actual results could differ materially from those contained in forward-looking statements due to a number of factors, including, among others: global macroeconomic conditions, including commodity prices, and economic, political and social conditions in the markets in which we operate, particularly in Peru; major changes in Peruvian government policies at the national, regional or municipal levels, including in connection with infrastructure concessions, investments in infrastructure and affordable housing subsidies; social conflicts in Peru that disrupt infrastructure projects, particularly in the mining sector; interest rate fluctuations, inflation and devaluation or appreciation of the nuevo sol in relation to the U.S. dollar (or other currencies in which we receive revenue); our ability to continue to grow our operations, both in Peru and internationally; the level of capital investments and financings available for infrastructure projects of the types that we perform, both in the private and public sectors; competition in our markets, both from local and international companies; our ability to complete acquisitions on favorable terms or at all and to integrate acquired businesses and manage them effectively post-acquisition; performance under contracts, where a failure to meet schedules, cost estimates or performance targets on a timely basis could result in reduced profit margins or losses and impact our reputation; developments, some of which may be beyond our control, that affect our reputation in our markets, including a deterioration in our safety record; industry-specific operational risks, such as operator errors, mechanical failures and other accidents; availability and costs of energy, raw materials, equipment and labor; our ability to obtain financing on favorable terms; our ability to attract and retain qualified personnel; our ability to enter into joint operations, and rules involved in operating under joint operation or similar arrangements; our exposure to potential liability claims and contract disputes, including as a result of environmental damage alleged to have been caused by our operations; our and our clients compliance with environmental, health and safety laws and regulations, and changes in government policies and regulations in the countries in which we operate; negotiations of claims with our clients of cost and schedule variances and change orders on major projects; volatility in global prices of oil and gas; the cyclical nature of some of our business segments; limitations on our ability to operate our concessions profitably, including changes in traffic patterns, and limitations on our ability to obtain new concessions; our ability to accurately estimate the costs of our projects; changes in real estate market prices, customer demand, preference and purchasing power, and financing availability and terms; our ability to obtain zoning and other license requirements for our real estate development; changes in tax laws; natural disasters, severe weather or other events that may adversely impact our business; and certain other factors disclosed in our registration statement on Form F-1 on file with the SEC. The forward-looking statements in this presentation represent our expectations and forecasts as of the date of this presentation. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this presentation. In light of the risks and uncertainties described above, the future events and circumstances discussed in this presentation might not occur and are not guarantees of future performance. 27

28 Contacts: Dennis Gray Febres Corporate Finance and Investor Relations Officer (511) Samantha Ratcliffe Leiva Deputy Investor Relations Officer (511)