Results Presentation Ezentis increases its EBITDA by 142,3% in the first nine months of the year up to 16,4 million Euros The revenue of the Company increased by 30% up to 228,5 million Euros thanks to the organic growth and despite the impact of the exchange rate The EBITDA increases by 7,2% vs. the 3,8% growth in the previous year The projects portfolio reached the 455 million Euros, 8% more compared to the same period last year Ezentis has agreed not to proceed to the acquisition of the Brazilian Company Ability. Madrid. 30 October 2015. Grupo Ezentis, a leading company at last-mile through Telecommunications, Electricity and Water services, has completed the first half of the year with a general improvement in its main economic indicators. The EBITDA reached 16,4 million Euros in the first nine months of the year vs. the 6,7 million Euros of the same period last year thanks to the implementation of efficiency and productivity measures, as well as the positive evolution of the business and despite the negative impact of the exchange rate. Also, the EBITDA margin increased and reached a 7,2% vs. 3,8% of the third trimester of 2014. Furthermore, the revenue reached 288,5 million Euros in the first nine months of the year, 30% more than same period last year, thanks to the increase in sales derivative from the organic growth and the recurrence of contracts won in 2014 and 2015, which represents the main reason of stability for the Company in terms of revenue. Also, sales in Spain increased by 59,5% thanks to the inorganic development achieved with the acquisition of the Group Networks Test last year. The projects portfolio valued at 455,7 million Euros at the end of the third trimester, 33,2 million Euros more than in the first nine months of 2014, which means a 8% growth. The Company expects that this quantity could be increased in the coming months by signing new contracts, according to the commercial plan of Ezentis. The net result of the Company increased by -2,26 million Euros, which represents an improvement of 70% vs. the same period of 2014. The net result was affected by the exchange rate, which had a negative impact of 3,1 million Euros. However, the Company has improved the value of financial costs over sales in the third trimester of the year in 0,5 percentile points compared to the same period last year. Ezentis has agreed not to proceed to the acquisition of Ability Ezentis has agreed with the shareholders of Ability Technology and Services S.A. not to proceed to the acquisition of the Brazilian Company.
This decision is framed in the compliance of the economic and financial guidelines established within the acquisitions policy in the Strategic Plan 2014-2017 and, in this frame, the company will keep combining both its organic and inorganic growth and will keep working on potential acquisitions within the target countries. About Ezentis Ezentis is a Spanish Industrial Services Group that contributes in Madrid and Bilbao stock markets; it has more than 9,000 employees and registers an annual billing of more than 250 million Euros. Grupo Ezentis business is based on late-mile, the one that gets to every home through Telecommunications, Electricity and Water services. Ezentis is a global company engaged with late-mile in more than 15 million homes and more than 95 million mobile users in Argentina, Chile, Peru, Brazil, Colombia, Panama, Jamaica and Haiti. For more information: Francisco Javier Romero fjromero@llorenteycuenca.com 91 563 77 22
1
O&M in the Last Mile Our customers: our main asset Ezentis manages, maintains and deploys infrastructure for telecommunications and utilities companies. Focus on Latin America where Ezentis activity represents 91,3% of total Group revenues. The company employs 8,500 professionals, 3,500 vehicles and has managed more than 119 workplaces. It aims to be the strategic partner for its customers with a key position in the "last mile" for energy and telecommunications infrastructures. Led by a committed management team which joined the Company in late 2011. 90% of Ezentis clients are leaders in their respective markets. 2
2014-2017 Strategic plan: Aggregates and pillars Aims of 2014-2017 Strategic Plan (1) Pillars for growth Focus on Latin America Sales Sales Latam 2013R 2014R 2017E Oct14-Sept15 12 months 149 257 656 310 132 236 575 283.9 Focus on telecommunications and electricity in strategic accounts Organic and inorganic growth geared towards profitability and diversification EBITDA EBITDA margin 4.4 15,3 67 3.3% 5.9% 10.1% 24.9 8.03% Technological capability as edge leveraging service innovation Long-term commitment and vision of the management team We maintain 2014-2017 SP objectives (1) We keep improving margins... Quality, efficiency and productivity (1) Currencies translated at a constant exchange rate (average exchange rate for December 2013 source: Oanda), except for Argentina (exchange rate forward curve at 01/02/14 source: Bloomberg) 3 3
Contents 1. Main aggregates 2. Conclusions and outlook for 2015 3. Relevant events 5 19 20 4
5
Growth, development of a solid backlog and balance sheet 1. Main aggregates: Summary Performance of main aggregates Sales EBITDA EBITDA / Sales (%) EZENTIS Group 175,8 6,8 228,5 EZENTIS 16,4 Group 230,1 17,4 EZENTIS Group 3,8% 7,2% 7,6% 3Q 2014R 3Q 2015R 3Q 2015 Constant (1) Backlog performance Balance sheet performance 422,5 272,6-228,5-10,9 455,7 Equity 36.4 25.4 Working Capital 3.2 25.1 2014 Year-end backlog Contracts (2) Production Currency Effect 3Q 2015 Total Backlog 2014R 3Q 2015R (1) Includes the changes in recurring business without taking into account the effect of exchange rate changes in each country (2) Impact of new fees and growth of installed base of existing contracts amounting to 138.5 million Euros 6
Performance in 3Q of 2015 1. Main aggregates: Summary Revenue of EUR 228,5 million (+30% on 3Q 2014) Increase in sales mainly due to organic growth Positive business performance despite currency developments in Latam Latin America continues being the main driver of growth with 91,5% of total sales EBITDA of EUR 16,4 million (+142,3% on 3Q 2014) Improved EBITDA margin: 7,2% vs. 3,8% 3Q 2014 Ebitda excellent performance despite the depreciation of currencies in Latam Rollout of efficiency and productivity measures Backlog of EUR 455.7 million at end of 3Q 2015 Outlook for contracts in the coming months in line with the company s commercial planning. Impact of new fees and growth of installed base of existing contracts amounting to 138.5 million Euros Net Result amounted to EUR -2.260 thousand (+70% vs 3Q 2014) Exchange differences had a negative impact of EUR 3.1 million on the financial result Better financial management that reduces weight on sales of Financial Costs in 3Q 2015 by 0.3 percentage points compared to 3Q 2014 Operating cash generation of 15 million euro. 7
Income Statement 1. Main aggregates: Income Statement Thousands of Euros SEPT 2015 SEPT 2014 VAR. % Sales 228,535 175,756 52,779 30% EBITDA 16,364 6,754 9,610 142.3% % EBITDA / Sales 7.2% 3.8% Variation in provisions -6,021-4,153-1,868-45% Intangibles assets Depreciation (PPA) -1,520-725 -795-109.6% EBIT 8,823 1,876 6,947 370.3% % EBIT / Sales 3.9% 1.1% Financial results -13,693-9,442-4,251-45% Finance Income/ finance costs -10,581-8,597-1,984-23.1% %Finance Income/ finance costs / Sales -4.6% -4.9% Exchange differences 1) -3,112-845 -2,267-268.3% Investment in associates and disinvestments 2,208-207 2,415 1166.8% Non-recurring profit (loss) 2) 1,660-645 2,305 n/a Profit before taxes -1,003-8,418 7,415 88.1% Minorities -41 278-319 -115% Discontinued operations -73-379 306 81% Taxes -1,143 799-1,942-243% Net Profit (Loss) -2,260-7,721 5,461 70.7% Note: H refers to Half-year or Semester (1) Exchange differences arising mainly due to the appreciation of the USD (2) Non-recurring profit (loss) explained mainly by tax planning in Brazil (EUR 3.3 million). 8
Growth in sales (+30%) in current terms 1. Main aggregates: Sales SEPT 2014R Group 175,8 SEPT 2015R 228,5 SEPT 2015 Constant (2) 230,1 Growth Constant Current Latam 159,1 209,2 210.7 30,9% 30,0% Spain 13,3 21,2 21,2 30,0% 29,4% Other (1) 3,4-1,8-1.8 59,4% 59,4% Analysis of impacts on sales 3Q 2015 MillIons of Euros 175.8 +30% 54.3-1,6 228.5 3Q 2014R Constant growth Currency effect-current (3) (1) Includes the activity in Morocco (until May 2014) Corporation, consolidation adjustments (2) Includes the changes in recurring business without taking into account the effect of exchange rate changes in each country (3) Includes the effect of exchange rate changes in each country 3Q 2015R 9
Geographical and industrial diversification 1. Main aggregates: Sales Sales performance by geographical area MillIons of Euros Breakdown of Sales 3Q 2015R by sector 228,5 Other (2) 7.9% 175,8 31,3% 28,1% 9,3% 7,6% 18,9% 17,7% 26,7% 24,1% 13,7% 13,3% 1,9% 0,5% 3,8% 1,6% 2,3% 3Q 2014 (1) 3Q 2015-0,8% Brasil Spain Chile Argentina Peru Caribbean Colombia Other 1) Electricity 21.4% 70.7.% Telecom. (1) Includes the activity in Morocco (until May 2014), Corporation, consolidated adjustments and US (2) Includes technology, gas, oil, mining, water management and other sectors 10
Major current sales growth (+30%) through geographical and industrial diversification 1. Main aggregates: Sales Major current (+30%) and constant (+30.9%) growth in sales as a result of the company's organic growth in 2014 and 2015 Recurrence of contracts awarded during 2014-2015 provides stability and visibility on our revenues. Activity in Latin America represents 91.5% of total group sales. The Activity in Chile, Peru and Colombia (Pacific Alliance countries) represents 33.8% of total Group and a sales growth of 37.6% vs. September 2014 Brazilian sales growth is 45% vs September 2014, noting the growth in electricity sector + 63% vs. September 2014, due to the good performance of contracts won in 2014 and 2015 Argentina represents 24% vs 26.7% of sales in 3Q 2014 Mention should be made of the 59.5% increase in sales in Spain, as a result of the inorganic growth achieved with the acquisition of the Networks Test Group We remain focused on increasing our customer base and business. 11
Growth in EBITDA in current terms(+142.3%) 1. Main aggregates: EBITDA SEPT 2014R SEPT 2015R JUN 2015 Constant (2) Constant Growth Current % EBITDA/Sales SEPT 2015R SEPT 2014R Group 6,8 16,4 17,4 156,8% 142,3% 7,2% 3,8% Latin America 12,5 18,1 19,2 53.6% 44,8% 8,7% 7,8% Spain 0,4 1,8 1,8 350% 350% 8,5% 3,0% Other (1) -6,2-3,5-3,5 Analysis of impacts on EBITDA SEPT 2015 Millones de Euros 142,3% -1,0 16,4 6,8 10,6 1H2014R Constant Growth Currency effect - current (3) 1H 2015R (1) Includes the activity in Morocco (until May 2014), Corporation, consolidation adjustments (2) Includes the changes in recurring business without taking into account the effect of exchange rate changes in each country (3) Includes the effect of exchange rate changes in each country 12
Profitability improvement of 3.4 percentage points due to focus on Quality, Efficiency and Productivity 1. Main aggregates: EBITDA Positive EBITDA performance (+142.3% VS Sept 2014) Excellent evolution of organic contracts awarded during Q3 2014 and H1 2015 Improved return on EBITDA (7.2% margin on sales vs 3.8% for 3Q 2014) Latam In Latam EBITDA growth is 44.8% vs Sept 2014 Latam margin stands at 8.7% vs 7.8% 3Q 2014 Spain In Spain EBITDA growth of 350% vs 3Q 2014 thanks to the network test integration Margin reaches 8.4% VS 3.0% 3Q 2014 We keep improving margins in our operations, Ebitda margin last 12 months reached 8.03%. 13
EBIT 1. Key figures: Operating Income EBIT EBIT Latam 13,3-0,7 12,6 8,8-0,7 8,1 EBIT Spain 3Q 2015 Currency effect 3Q 2015 Constant 0,8 3Q 2015 Currency effect 3Q 2015 Constant The impact of the currency effect on EBIT amounted to -0.7 million euros (from the evolution of exchange rates in Argentina, Peru and Chile) EBIT reached 8.8 million Euros, representing an improvement of 370% compared to 3Q 2014. EBIT Corporation and other Group companies and consolidation adjustments 3Q 2015-5,3 3Q 2015R 14
Revaluation of existing and new contracts Backlog evolution 272,6-228,5-10,9 422,5 455,7 2014 final backlog 2015 contracts 2015 production 2015 currency effect 30/09/2015 backlog * Impact of new tariffs and installed base of existing contracts growth amounting to 138.5 million euros 15
Focused on financial optimization Balance key indicators Operating indicators Equity 39,1 36,4 Days Average collection period 2014 36,2-28,2% 26,0 SEPT 2015 0,9% 2014 Working capital SEPT 2015 Average period of work in progress 42,8 43,2 2014 SEPT 2015 25,1 3,2 36,4 79,0-12,4% 69,2 2014 SEPT 2015 Cash transformation average period Positively evolution as a result of the financial transaction with Highbridge Principal Strategies, LLC in July 2015. 2014 SEPT 2015 16
Focus on balance sheet 1. Main aggregates: Balance sheet Thousands of Euros SEPT 15 R DIC-14 R SEPT 15 R DIC-14 R Assets Equity and liabilities Equity 25,357 36,444 Non-current assets 109,968 107,189 Property, plant and equipment 17,536 20,713 Non-current liabilities 109,693 73,994 Goodwill 34,531 35,857 Long term borrowings 65,843 23,425 Other intangible assets 11,173 14.990 Other financial liabilities 7,904 13,330 Non-current financial assets 42,947 32,595 Provisions 30,768 31,609 Investments in associates 196 185 Deferred tax liabilities 4,405 4,656 Deferred tax assets 3,573 2,849 Grants 773 974 Current liabilities 84,302 93,895 Current assets 119,385 97,144 Bank borrowings 13,039 12,782 Sales-related assets 1,185 1,231 Other financial liabilities 5,799 17,419 Inventories 4,273 5,018 Liabilities made available for sale 233 657 Trade and other receivables 75,324 70,802 Trade payables 50,729 47,579 Other current assets 10,776 6,272 Provisions 4,421 3,507 Cash and cash equivalents 17,827 13,821 Current tax liabilities 10,078 11,600 Other current liabilities 3 351 TOTAL 219,352 204,333 TOTAL 219,352 204,333 17
Reinvestment on business growth 1. Main aggregates: Balance sheet Cash flow statement Dec 2014 Sep 2015 ( 9 months ) 15,9 3,3-4,4 15,0 0,9-13,0 16,8-0,7 17,8 Cash 31/12/2014 Cash operating generation Investment in working capital Capital increase and equity instruments Investment in the business Other financial assets Variances in debt and financial and others Cash 30/09/2015 18
Conclusions and outlook CONCLUSIONS Solid growth in sales, backlog and business line profitability Balanced Balance-sheet Ezentis consolidation as a benchmark in the field of O & M of basic infrastructures OUTLOOK Our customers have confirmed investment for the coming years in Latam Continue with improvements in quality, efficiency and productivity O & M sector in continuous growth due to the large investment in basic infrastructures in Latin America. Ezentis keeps analyzing potential acquisitions in the Strategic Plan countries SUBSEQUENT EVENTS The company has agreed not to proceed with the purchase of Ability, and continues working on potential acquisitions within the acquisition policy set out in the strategic plan 2014-2017 19
20
Relevant events Posterior Relevant events 14-10-2015 Cease and appointments in the Board of Directors, setting up of the Executive Committee and termination of the agreement 2. Relevant events for 3Q 2015 23-09-2015 Contract adjudication Seicom 07-09-2015 Contract adjudication Ezentis Energía 02-09-2015 Price Sensitive Information new contract Ezentis Energia 07-08-2015 Registration of Capital Increase Seicom and Modification of SA 31-07-2015 First tranche of the financing contract with Highbridge 31-07-2015 Presentation of Results 1H 2015 24-07-2015 Company signed Senior Facilities Agreement with Highbridge Principal Strategi... 17-07-2015 Webcast Call Presentation of 1st Half-Year Results 2015 10-07-2015 Ordinary General Shareholders Meeting 21
22 3 6 This document has been prepared by EZENTIS solely for its use during the presentation of results for the third quarter of 2015. Accordingly, it may not be disclosed, published or used by any other natural or legal person for any purpose other than that described above without the express consent in writing of EZENTIS. EZENTIS does not accept any liability for the content of the document if it is used for any purpose other than that described above. The information and any opinions or statements contained in this document have not been verified by an independent third party and, accordingly, no express or implied guarantee is provided as to the impartiality, accuracy, completeness or correctness of the information or the opinions and statements expressed herein. Neither Ezentis nor its subsidiaries accept any liability whatsoever, regardless of whether or not negligence or any other circumstance were to exist, for any losses or damages that may arise from any use of this document or the content thereof. This document does not constitute a document of a contractual nature and it may not be used to construe or interpret any contract or any other type of commitment. This document does not constitute an offer or invitation to subscribe or acquire shares, pursuant to the provisions of Spanish Securities Market Law 24/1988, of 28 July, Royal Decree-Law 5/2005, of 11 March, and/or Royal Decree 1310/2005, of 4 November, and the implementing legislation thereof. This document contains information or statements including forecasts of Ezentis' future performance which are subject to risks and uncertainties that may cause actual results and developments to differ from those expressed or implied in such information or statements in relation to forecasts of future performance. The information or statements in relation to forecasts of future performance refer exclusively to the date on which they were expressed, do not constitute a guarantee of future results and have not been reviewed by EZENTIS' auditors. Any decisions based on information or statements in relation to forecasts of future performance are not recommended. All of the information and statements in relation forecasts of future performance included in the document issued by EZENTIS or any of its executives, directors, employees or representatives are expressly subject to the caveats provided. The information and statements in relation forecasts of future performance included in this document are based on the information available at the date of this publication.
Prim, 19 28004 Madrid, España T: +34 902 40 60 82 F: +34 913 605 994 E: info@ezentis.com www.ezentis.com 23