MANAGEMENT REPORT AS OF THE FIRST QUARTER OF 2012

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2 MANAGEMENT REPORT AS OF THE FIRST QUARTER OF 212 2

3 Highlights > Turnover rose 11.6% to million > Group s international activity in excess of 55% > EBITDA increased 2.8% and EBIT 43% with margins of 12.9% and 7.4%, respectively > Group s net income grew 45% to 4.5 million > Order book remained stable at 3.7 billion (more than 7% in foreign markets) > Improvement of Total Net Debt / EBITDA to 3.6 (4.3 in the 1Q 211) Weight in Turnover Group Weight in EBITDA Group 1% 1% 8% 6% 55% 54% 45% 8% 6% 58% 57% 58% Abroad 4% 2% 45% 46% 55% 4% 2% 42% 43% 42% Domestic % % thousand euros 1Q12 % T 1Q11 % T Turnover 481, % 431,365 EBITDA 61, % 2.8% 51, % EBIT 35, % 43.% 24, % Net financial income (21,672) (4.5%) (22.2%) (17,736) (4.1%) Net income/losses from equity method 3,413.7% (27.3%) 4, % Income before taxes 17, % 46.3% 11, % Net income 14,243 3.% 47.3% 9, % Attributable to: Non-controlling interests 9,72 2.% 48.6% 6, % Group 4,523.9% 44.7% 3,126.7% Ebitda = Earnings before interest and taxes + depreciation + provisions and impairment losses Net Debt = Debt cash and equivalents Total Net Debt / EBITDA: EBITDA anualized with 2 nd quarter and 2 nd half of the previous year. Non-audited accounts. 3

4 MANAGEMENT REPORT AS OF THE FIRST QUARTER OF 212 Index Highlights 3 Consolidated Management Report 5 Financial analysis 7 Business areas analysis 11 Share price behaviour and dividends 14 4

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6 MANAGEMENT REPORT AS OF THE FIRST QUARTER OF 212 6

7 1. Financial analysis Turnover Group Turnover Geographic area 6 45 Portugal - E&C 27% Portugal - E&S 19% 3 Central Europe 9% America 11% Africa 34% Mota-Engil Group reached a net consolidated income of 14.2 million in the first quarter of 212 (211: 9.7 million), of which 4.5 million attributable to the Group (211: 3.1 million). By the beginning of 212, as a result of the implementation of its new organizational model, the Group changed its business matrix that is now structured by geographies as opposed to the previous one based on business areas. As a result, from January 212 onwards, the Group is organized in the following four main business areas: Portugal, Africa, Latin America and Central Europe. The aforementioned change aimed at promoting the operating efficiency and the value creation for the Mota-Engil Group. Group s turnover rose 11.6% to 481 million in the first quarter of 212 (211: 431 million). This performance was mainly achieved on the back of the good performance shown by the African market (up 46.8%). As a result of the internationalization strategy that the Group has been embracing in the last years, particularly since 28, the year where the five year strategic plan, Ambition 213, was set up the activity in foreign markets has increased markedly reaching in the first quarter of 212 a whopping 55% share (211: 46%). Ebitda Group EBITDA Geographic area Portugal - E&C 18% America 1% Portugal - E&S 25% Africa 47% As far as EBITDA is concerned, the growth recorded in the first quarter of 212, as compared to the same period of the previous year, 1.6 million, came mainly from Portugal ( 4.4 million growth) and Africa ( 6.8 million). Consolidated EBITDA margin reached 12.9% in the first quarter of 212, as compared to 11.9% in the first quarter of the previous year. Operating margins have improved in the last years, primarily because of, on one hand, the 7

8 MANAGEMENT REPORT AS OF THE FIRST QUARTER OF 212 dynamism of the internationalization process and the quality of the order book that has been gathered in the construction division and, on the other hand, the business diversification process. Capex Capex evolution Central Europe 13% America 2% Africa 8% Portugal - E&C 11% Portugal - E&S 48% Milhões Euros Portugal - E&C Foreign markets Portugal - E&S 1T1 1T11 1T12 In the first quarter of 212, net consolidated capital expenditure reached 31 million of which 13 million in foreign markets (211: 7 million) and 15 million in water & sewage and urban solid waste segments in Portugal (includes maintenance and growth capex in water & sewage concessions, namely in Indaqua Matosinhos, Vila do Conde e Feira). Maintenance capital expenditure was of 11 million, in line with budget. Growth capital expenditure reached approximately 19 million. 1,2 1, Net debt excluding non-recourse ,5 Net Debt evolution ,25 1, 2 1Q 2Q 3Q 4Q Q1 3Q1 1Q11 3Q11 1Q12 In the first quarter of 212, although the capital expenditure was moderate, total net debt rose by 89 million as compared to December 31st, 211 mainly due to the increase in working capital, essentially in foreign markets. This effect which is normal taking the seasonality effect in to account, was mainly felt in the Central European operation. Corporate debt (with recourse) ascended to 97 million (December 211: 883 million), of which approximately 575 million allocated to the Group s operating activity. The balance ( 395 million) is allocated to affiliated companies that do not contribute to EBITDA and to non-strategic assets. As of March 212, non-recourse net debt was of 124 million (December 211: 121 million). 8

9 Net Financial Income Group's Net Income Net financial expenses were of 21.7 million, up 22% year on year (211: 17.7 million) mainly as a result of an increase of approximately 4 million in net interest paid, due to higher spreads charged by financial institutions. As a result of the operating and financial performances, pre-tax income attained 17.2 million (211: 11.8 million) and consolidated net income 14.2 million (211: 9.7 million), of which 4.5 million attributable to the Group (211: 3.1 million) EBIT Financial Equity Method Tax MI Net income EBIT Financial Equity Method Tax MI Net income In the first quarter of 212, gains and losses in affiliated companies (equity consolidation in the chart) contributed positively to the bottom line with a 3.4 million net gain (211: 4.7 million). Ascendi, the subholding company for the road and railroad concessions had a contribution of 4.7 million (211: 4.5 million). 9

10 MANAGEMENT REPORT AS OF THE FIRST QUARTER OF 212 Order Book Order Book 5, 4, 3, 2, ME Central Europe 14% ME America 11% ME Portugal E&C 2% ME Portugal E&S 9% 1, 3,556 3,3 3,797 3, Q12 ME Africa 46% The order book as of the end of March was of 3.7 billion, 2.6 billion of which in foreign markets, more than 7% of the total figure. As usual, the order book, besides the construction contracts, only includes contracts in urban solid waste and maintenance segments. The Group does not include in the abovementioned figure expected revenues from concession contracts in water and sewage nor seaports. 1

11 2. Business areas analysis Portugal Turnover EBITDA E&S E&S 3 15 E&C T1 1T11 1T E&C T1 1T11 1T12 Turnover in Portugal reached 223 million in the first quarter of 212 (211: 237 million), less 6% as compared to the same period of 211. This evolution was mainly due to the unfavorable evolution of the Construction segment where revenues dropped approximately by 16.2 million, year on year. Despite the fact that turnover of the environment & services segments rose slightly ( 92 million in the first quarter of 212 as compared to 9 million in the first quarter of 211), it did not offset the negative performance of the construction segment. As far as the operating performance is concerned, it is worth mentioning the improvement of the EBITDA margin (212: 12%; 211: 9.4%), that, despite the lower turnover, allowed for a 2% increase in EBITDA (212: 26.8 million; 211: 22.4 million). Turnover Portugal EBITDA Portugal E&C E&S - Waste E&S - Logistic 1Q11 1Q12 E&S - Water E&C E&S - Waste E&S - Logistic Q11 1Q E&S - Water In spite of the lower activity in the construction division in Portugal, the EBITDA margin rose allowing for an improvement of the EBITDA (212: 11 million; 211: 7 million). The urban solid waste segment in Portugal had a turnover and EBITDA similar to the previous year (212: turnover of 2 million; 211: turnover of 21 million; 212: EBITDA of 4.3 million; 211: EBITDA of 5.1 million). 11

12 MANAGEMENT REPORT AS OF THE FIRST QUARTER OF 212 The logistics segment continues to represent the largest chunk of the environment & services activities in Portugal. Turnover rose by 3% year on year (turnover of 39.5 million in the first quarter of 212 as compared to 38.3 million in the previous year) and EBITDA remained roughly in line with the previous year ( 6.5 million in 212, as compared to 6.8 million in the first quarter of 211). This performance, despite the current environment, shows, among other aspects, the continuous growth of domestic exports with a direct impact on port, road and railroad activities. As far as the water & sewage segment in Portugal is concerned, the increase reported in the first quarter of 212 was primarily due to the booking of revenues related to the investment undertaken in the water networks in some concessions. Excluding this effect, revenues from Indaqua s main activity did not change materially. The residual segment of energy and facility management remained almost unchanged both in terms of turnover and EBITDA. Africa Turnover Ebitda Africa is a core market for Mota-Engil Group. It is present in the continent for several decades, particularly in Angola, where the Group operates for more than 65 years. The Group has operations in the following countries: Angola, Mozambique, Malawi, São Tomé and Príncipe and Cape Verde, that in total weighed 34% in Mota-Engil Group s activity (211: 26%). Turnover rose 47% to million in the first quarter of 212 (211: million). Despite a slightly worse operating margin, that dropped from 2.5% in the first quarter of 211 to 18% in the same quarter of the current year, EBITDA advanced to 29.8 million (211: 23 million). It is worth noting that the turnover of the waste and cleaning business in Angola had a contribution of 6.4 million in the first quarter of 212 (211: 5.1 million) and the EBITDA 3.2 million (211: 3.2 million). It is also worth stressing that the order book in Africa, the largest, attained 1.67 billion in March 212 (December 211: billion), allowing for a very high expectation in terms of future growth in this market. 12

13 Central Europe Turnover Ebitda In Central Europe, Mota-Engil, though present in five countries (Poland, the Czech Republic, Slovakia, Hungary and Romania), concentrates its activity mainly in Poland. The Group enjoys a strong order book in this market that comprises large road construction contracts and several mid-sized contracts in different business segments and in different regions in the country, worth 53 million. In the first quarter of 212, turnover in Central Europe was of 44.6 million, a 9% increase as compared to the same period of the previous year ( 4.8 million). The low activity and weak operating performance in Central Europe at the beginning of each year might be explained by the adverse weather conditions during winter time that usually take place in the area. Notwithstanding, the latter should not affect our expectation of activity for the current year. America Turnover Ebitda The Group s activity in Latin America is currently concentrated in Peru. In the first quarter of 212, turnover reached 55.2 million, a 28% increase as compared to the same period of the previous year ( 43 million). Excluding the contribution from Geovision (a solid waste company with operations in Brazil, sold by the end of 211) to turnover and EBITDA in 211 of, 14.1 million and 2.1 million, respectively, growth rates are even higher: 91% for turnover and 51% for EBITDA. 13

14 MANAGEMENT REPORT AS OF THE FIRST QUARTER OF Share price behaviour and dividends Evolution of liquidity of shares Performance of share price % 3 125% 115% 2 15% Million shares 1 1Q 2Q 3Q 4Q 95% 85% Dez/11 Jan/12 Fev/12 ME PSI2 EURONEXT 1 In a context still dominated by the European economic and financial crisis that has affected more severely peripheral countries in this economic region, Mota-Engil shares had a positive evolution, up 17.6% during the aforementioned period. As far as the shares turnover is concerned, as was the case for most stocks listed on NYSE Euronext, it dropped 47% as compared to the same period of the previous year to 8.43 million. The General Shareholders Meeting as of April 17th, 212 decided, according to the Board of Directors proposal, to pay 11 cents per share as dividend, paid on May 17 th. Porto, May 21 st, 212 Jorge Coelho Chief Executive Officer Gonçalo Moura Martins Chief Financial Officer 14

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16 MANAGEMENT REPORT AS OF THE FIRST QUARTER OF

17 Separate Consolidated Income Statement For The Periods Ended March 31, 212 & st Quarter 212 Euro 211 Euro (non audited) (non audited) Sales & services rendered 481,468,96 431,364,737 Other revenues 3,226,233 18,466,591 Cost of goods sold, mat. cons. & Subcontractors (27,569,654) (228,,716) Gross profit 241,125, ,83,612 Third-party supplies & services (84,173,249) (81,792,59) Wages and salaries (97,2,736) (89,85,115) Other operating income / (expenses) 2,1,576 1,68,159 61,951,76 51,31,147 Depreciation & Amortization (23,16,13) (23,317,348) Provisons and impairment losses (3,481,396) (3,187,5) Resultado operacional 35,453,667 24,796,794 Financial income & gains 28,733,486 2,691,731 Financial costs & losses (5,45,36) (38,427,953) Gains / (losses) on associated companies 3,413,168 4,695,998 Income Tax (2,951,918) (2,89,256) Consolidated net profit of the year 14,243,97 9,667,314 Attributable: to non-controlling interests 9,72,314 6,541,699 to the Group 4,522,783 3,125,615 Earnings per share: basic diluted

18 MANAGEMENT REPORT AS OF THE FIRST QUARTER OF 212 Statement of Consolidated Comprehensive Income For The Periods Ended March 31, 212 & Euro 1st Quarter 211 Euro (non audited) (non audited) Consolidated net profit for the period 14,243,97 9,667,314 Other comprehensive income Exchange differences stemming from transposition of financial statements (4,398,554) (7,861,815) expressed in foreign currencies Variation, net of tax, of the fair value of financial derivatives (1,18,76) 2,237,836 Other comprehensive income in investments in associates using the equity (13,387,335) 798,929 method and others Total comprehensive income for the period (4,56,868) 4,842,264 Attributable: to non-controlling interests 7,623,271 5,641,338 to the Group (12,184,139) (799,74) 18

19 Consolidated Statement of Financial Position as at March 31, 212 & December 31, Euro 211 Euro (non audited) (audited) Assets Non-current Goodwill 136,6, ,372,921 Intangible fixed assets 322,552,779 37,517,983 Tangible fixed assets 565,375,31 564,556,72 Financial investments under the equity method 221,378, ,573,611 Available for sale financial assets 7,117,227 5,448,764 Investment properties 63,44,784 62,947,53 Customers & other debtors 187,82, ,525,91 Deferred tax assets 55,16,44 5,631,819 Non-current Assets Held for Sale Current 1,558,113,863 1,499,573,944 85,859,557 86,34,429 Inventories 244,188,64 242,36,589 Customers 915,796, ,214,752 Other debtors 324,792,42 364,422,378 Other current assets 217,81, ,695,222 Derivative financial instruments 538, ,58 Cash & cash equivalents without recourse 16,469,71 9,35,697 Cash & cash equivalents with recourse 28,134, ,914,49 Total Assets Liabilities Non-current 1,927,1,918 1,938,382,555 3,57,975,338 3,524,296,928 Debt without recourse 138,689, ,719,799 Debt with recourse 561,48, ,231,584 Sundry Creditors 242,23, ,537,318 Provisions 94,535,126 88,151,934 Other non-current liabilities 24,893,496 26,186,42 Deferred tax liabilities 29,762,671 3,32,95 Current 1,91,564,659 1,54,129,627 Debt without recourse 2,21,52 1,988,542 Debt with recourse 616,475, ,4,296 Suppliers 468,174,96 478,149,258 Derivative financial instruments 28,796,9 27,7,288 Sundry Creditors 52,431,724 5,827,625 Other current liabilities 454,746, ,636,76 2,72,646,477 2,55,342,715 Total Liabilities 3,164,211,136 3,19,472,342 Shareholders' equity Equity capital 24,635,695 24,635,695 Reserves 91,482,327 74,923,859 Consolidated net profit for the year 4,522,783 33,432,54 Own funds attributable to the Group Non-controlling interests Total shareholders' equity Total shareholders' equity & liabilities 3,64,85 312,991,68 16,123,397 11,832,978 46,764,22 414,824,586 3,57,975,338 3,524,296,928 19

20 MANAGEMENT REPORT AS OF THE FIRST QUARTER OF 212 Statement of Consolidated During The Periods Ended Fair value reserves Equity capital Own Shares Issue premiums Available-for-sale investments Lands assigned to quarrying operations Derivatives Balance as at January 1, ,635,695 (22,626,52) 87,256,34 27,72,96 4,791,226 (5,527,456) Total comprehensive income for the period ,142,551 Transfers for other reserves Alterations to the consolidation perimeter Balance as at March 31, ,635,695 (22,626,52) 87,256,34 27,72,96 4,791,226 (4,384,95) Balance as at January 1, ,635,695 (22,749,225) 87,256,34 27,72,96 1,549,652 (1,37,5) Total comprehensive income for the period (592,48) Dividend distribution Other distributions of results Transfers for other reserves Balance as at March 31, ,635,695 (22,749,225) 87,256,34 27,72,96 1,549,652 (1,629,548) 2

21 Changes in Equity March 31, 212 & 211 Currency translation reserve Other reserves and results Net Profit Own funds attributable to shareholders Own funds attributable to noncontrolling interests Shareholders' equity (3,985,744) 19,511,336 36,95, ,77,342 69,22,557 48,729,899 (5,618,466) 551,226 3,125,615 (799,74) 5,641,338 4,842,264-36,95,674 (36,95,674) (468,59) - (468,59) 2,876,892 2,48,383 (36,64,21) 146,544,728 3,125,615 41,439,759 95,54,787 55,98,546 (28,523,967) 19,726,769 33,432,54 312,991,68 11,832, ,824,586 (2,566,854) (13,548,2) 4,522,783 (12,184,139) 7,623,271 (4,56,868) (3,222,493) (3,222,493) - (166,664) - (166,664) (11,359) (277,23) - 33,432,54 (33,432,54) (31,9,821) 39,444,139 4,522,783 3,64,85 16,123,397 46,764,22 21

22 MANAGEMENT REPORT AS OF THE FIRST QUARTER OF 212 Statement of Consolidated Cash-Flows For The Periods Ended March 31, 212 & 211 OPERATING ACTIVITY Cash receipts from customers 456,213, ,541,25 Cash paid to suppliers (394,34,53) (427,129,448) Cash paid to employees (88,556,661) (8,95,862) Cash generated from operating activities (26,647,546) 9,55,715 Income tax paid/received (2,543,667) (3,75,128) Other receipts/payments generated by operating activities (4,742,353) (41,52) Net cash from operating activities (1) (33,933,566) 5,759,535 INVESTING ACTIVITY Cash receipts from: Tangible fixed assets 692, ,429 Interest and similar incomes 3,378,215 4,277,45 Dividends 55,26 38,183 Others 612,797-4,739,221 4,782,17 Cash paid in respect of: Financial assets (1,351,773) (129,7) Intangible fixed assets (13,634,969) (9,722,873) Tangible fixed assets (16,312,19) (15,688,573) Others - (147,613) (31,298,762) (25,688,129) Net cash from investing activities (2) (26,559,541) (2,96,112) FINANCING ACTIVITY Cash receipts from: Loans obtained 87,245,889 72,613,19 87,245,889 72,613,19 Cash paid in respect of: Loans obtained (7,559,15) (6,81,994) Amortization of finance lease contracts (7,13,165) (1,945,943) Interest & similar expense (2,288,177) (18,956,238) Dividends - - Decrease of share capital, supplementary capital, share issuance premiums - - Acquisition of treasury shares - - Others (848,629) - (35,826,76) (36,713,175) 212 Euro 211 Euro Net cash from financing activities (3) 51,419,813 35,899,934 Variation of cash & cash equivalents (4)=(1)+(2)+(3) (9,73,294) 2,753,357 Variations caused by changes to the perimeter 1,42,47 1,398,942 Exchange rate effect (1,585,247) (7,23,32) Cash & cash equivalents at the beginning of the year 234,22,16 2,626,12 Cash & cash equivalents at the end of the year 224,64,35 215,755,81 22