The world s leading infrastructure developer Presentation of the Group Key figures & Global Strategy July 2012
Grupo ACS The world s leading infrastructure & concessions developer Engineering contractor and greenfield developer with annual revenues over 35bn In the fields of civil and industrial engineering: developing civil works, energy, oil&gas, mining, environment and support services Construction Environment Industrial Services Active in 5 continents with a stable presence in 50 countries, employing 162,000 people Through a worldwide, decentralized and flexible structure of local leading companies Focused on generating sustained shareholders value 3
Group s history In less than three decades Grupo ACS has become one of the largest infrastructure developers of the world 35.000 28.472 Sales evolution 1987-2012e ( million) 183 196 510 755 955 911 792 731 792 976 2.166 2.460 2.700 3.410 3.921 4.420 8.429 10.354 11.582 13.507 14.892 15.276 15.387 15.380 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012e 4
Consolidated key figures 2011 Turnover 28,472 mn +98.7% Backlog (March 2012) 67,919 mn 22 months EBITDA 2,318 mn +61.9% Margin 8.1% EBIT 1,333 mn +28.3% Margin 4.7% Recurrent Net Profit 951 mn +8.8% Note: Hochtief fully consolidated since June 1 st, 2011 5
Revenues breakdown as of 2011 Turnover 2011 28,472 mn Construction 19,802 mn 25% Industrial Services 7,045 mn 69% 6% Environment 1,686 mn ROTW 179 mn Turnover by country, 2011 bn 7,82 7,29 4,92 1,39 1,10 0,60 0,49 0,43 0,31 0,31 0,29 Spain Australia USA Germany México Poland Brazil Portugal UAE Canada France Asia Pacific 9,306 mn 33% America 7,819 mn 1% 27% 27% 12% Spain 7,823 mn Rest of Europe 3,345 mn 6
Current backlog breakdown Backlog as of March 2012 67,919 mn Construction 51,654 mn Industrial Services 7,166 mn 11% ROTW 385 mn 0% 18% Spain 12,198 mn 76% 13% Environment 9,099 mn 43% 16% Rest of Europe 10,671 mn Asia Pacific 28,960 mn 23% America 15,705 mn 7
A global leader in infrastructure development Source: ENR Magazine, August2011. Data in US$ million Source: Public Works Finacing Magazine, October 2011. 8
Main areas of activity of Grupo ACS In the global infrastructure development industry Telecomm Contractor Energy projects Construction Concessions operator Electricity Oil & Gas Mining Environment PPPs Transportation Private clients Administrations 9
Macroeconomic long term growth trends Infrastructures are macro growth engines They are a key tool for the social and economical development of any country Increase productivity Multiply the effect of other investments Promote employment Advanced economies invest normally c. 5% of GDP Emerging markets surpass 10% on GDP, led by China Developing transportation networks Developing or improving energy & resources infrastructures In the maintenance of their existing assets There are factors that clearly promote an investment trend in infrastructures Demographic changes Increase of income per capita Regulatory, environmental or technological changes 10
Key markets in infrastructure development Asset renewal Energy & Resources Current situation: plenty of opportunities Maintenance Energy Convergence Energy & Resources, huge transportation infrastructures Electricity, Resources, transportation and social infrastructures Oil & Gas Energy & Resources Transportation Concessions 11
Advanced economies Opportunities Increasing demand Private financing opportunities Availability of capital intensive projects Challenges Strong competence Requires size and a strong local presence Less risk means less profitability Main characteristics Limited public spending Demanding governments High per capita rent users Stable regulatory frameworks Strong financial markets Sophistication: New PPP models Availability payment Shadow tolls Clean energy & Renewables Environmental assets Large investments in maintenance & renewal of assets 12
Emerging markets Opportunities Very strong demand Lack of qualified local competence Growing & dynamic economies Obsolete or inexistent assets Oil, gas, resources, transportation Brazil, Mexico, India Large energy and resources projects to be developed Private collaboration demand to provide: Technical capacity Financial resources Huge demographic changes Challenges Changing regulatory frameworks Underdeveloped financial markets Unstable Local currencies Inefficient subcontracting industry Ethics and professionalism Users payment capacity 13
How faces ACS this global industry? With a clear corporate strategy With strong values and competitive advantages With diversified, growing, sustainable and profitable activities and companies 14
ACS Corporate Strategy A long term industrial approach covering the main ACS s corporate targets Global Leadership Commercial coordination to achieve profitable activity growth Operating Efficiency Promote global best practices Financial Strength Value Orientation Take advantage of size and focus on keeping a solid balance sheet Corporate culture totally aligned with shareholder s profitability 15
Global & Local leadership ACS covers the most important markets of the world with profitable, competitive and reputed companies. Size matters to attract resources, financing, talent and new projects. Top 3 in the US Leader in Spain and Germany World leader in mining and concessions Leading Industrial player Leader in Australia 16
Commercial collaboration ACS local strength promotes cross selling and profitable commercial collaboration opportunities worldwide General contracting leader, allows cross selling of Civil Works, Concessions and Industrial Services Industrial Services in Germany Mining, Concessions, Civil Works and Industrial Services opportunities in Asia Environmental Services in UK and France Being an Industrial Services local leader allows for Mining opportunities Civil Works & Mining leader, focus on Industrial Services opportunities 17
Operating efficiency Promotion of best practices and corporate values amongst Group s companies Decentralized & lean structure Client focus Technical excellence Risk management 10,3% Convergence towards higher operating margins EBIT margin 2010 Source: Factset 7,8% 7,1% 5,9% 5,6% 4,3% 4,3% 3,5% 3,2% 2,6% Vinci Eiffage ACS FCC Bouygues Bilfinger Berger Skanska Hochtief Balfour Beatty Fluor Corp. 18
19 Financial strength Grupo ACS keeps a solid financial structure Net Debt / EBITDA 2012e < 3,0x Net Debt / Net Worth Mar-12 1.3x No significant refinancing needs until Nov 2014 Grupo ACS promotes a capital allocation policy to efficiently capture financial resources in a global market
Investment capacity Grupo ACS has invested in the last 5 years more than 12 bn in infrastructure development activities Euro million* Investments Disposals 2.007 238 1.795 1.122 2.224 2.340 3.650 2007 2008 2009 2010 2011 Grupo ACS invests alongside clients in a wide range of civil works, energy, oil&gas and environmental projects around the globe 80 516 1.853 * Investments and disposals from Grupo ACS s operating activities (excluding Corporation s investments) 20
Profitability focus ACS targets to maintain its leadership as one of the world s most profitable infrastructure developers 20,3% 2012e Return on Equity Source: Factset, 1 st June 2012 16,1% 15,9% 14,6% 10,6% 9,3% 8,7% 3,0% ACS Fluor Skanska VINCI Bouygues Eiffage FCC Ferrovial 21
How faces ACS this global industry? With a clear corporate strategy With strong values and competitive advantages With diversified, growing, sustainable and profitable activities and companies 22
23 Grupo ACS competitive advantages Civil engineering Specialization in civil works infrastructure development Large projects management capability Development, construction and management of concessions Industrial Engineering Value chain integration: engineering, development, procurement, construction and maintenance Specialized in large and complex turn key projects Investment capacity in: energy concessions, high voltage transmission lines and desalinization Technical capabilities Entrepreneurship Service culture Efficient management of resources Constant search of sustainable and growing profitability Rigorous investment in attractive business opportunities Commitment orientation Client Knowledge Flexibility and adaptability Local presence and global leadership for clients worldwide Ethics and professionalism
How faces ACS this global industry? With a clear corporate strategy With strong values and competitive advantages With diversified, growing, sustainable and profitable activities and companies 24
Grupo ACS areas of activity Technology-oriented Group with a decentralized operational structure Promotes Entrepreneurship Global Competitive Advantages Construction Environment Industrial Services 25
ACS Construction activity Largest construction company of the western world focused in the development of infrastructures worldwide Construction mn 2011 Var. 1Q12 Var. Turnover 19,802 +247% 6,791 +374% % Abroad 85.1% 88,9%. EBITDA 1,210 +183% 396 +242% margin 6.1% 5.8% EBIT 449 +30.8% 96 +4.1% margin 2.3% 1.4% Backlog 50.336 +354% 51.654 +370% % abroad 91.4% 92.7% Net Debt 2,442 +100% 3,772 +143% Includes the contribution of several companies of the Group: Dragados (leader in Spain) Hochtief (leader in Germany) Leighton (leader in Australia) Turner & Flatiron (Top 3 USA) PolAqua (Top 5 Poland) Iridium (World leader in concessions development) Develops highly sophisticated Civil Works, Mining and General contracting activities in 30 countries, with a technical team including 10,000+ engineers ACS is the leading greenfield concession developer in the world, with a current portfolio of over 48 projects 26
Construction activity: General contracting Specialized en large contracts, ACS companies develop complex projects for clients worldwide General Contracting Revenues 2011 16.3 billion Revenues In Spain 16% 84% Abroad Top ranked companies in the most important markets for construction. Specialized teams developing concessions, PPPs, tunneling Main areas of growth: Australia & SE Asia, large civil works projects US & Canada, PPPs and infrastructure refurbishing Central Europe: convergence needs in civil works 27
Construction activity: Contract mining Leighton: world leader in a fast growing activity in emerging markets, specially Asia. Huge potential in South America, where its not present. Mining Contracting Revenues 2011 3.5 billion 100 % Revenues Abroad Mining management and exploitation for third parties. Long term contracts with high visibility Capital intensive business Huge growth potential: Australia, Indonesia, Mongolia, India, Africa Leighton might lean on ACS s presence in South America to explore a new market 28
Construction activity: Greenfield Concessions ACS is the leading greenfield concessions developer in the world, with more than 70 projects under way and close to 50 offers in course Concessions ACS Equity Investment* 1.1 billion Number of projects US&Can Spain 5 43 24 Other Countries Long term investment activity synergic with general contracting Worldwide opportunities, specially in 1 st world Relies on ACS s financial strength Promotion Financing Construction Ramp-up Operation Greenfield development phase Brownfield * As of Dec 31 st, 2011 29
ACS Industrial Services Activity Industrial Services is a leading support services & EPC contractor with a decisive presence in emerging markets Industrial Services mn 2011 Var. 1Q12 Var. Turnover 7,045-1.6% 1,830-1% % Abroad 48% 53% EBITDA 907 +10.5% 220 +0.2% margin 12.9% 12% EBIT 828 +31.8% 207 +2.6% margin 11.7% 11.3% Backlog 6,875 +0.4% 7,165 +0.8% % abroad 61% 64% Cash position 835 +60.5% 889 +53.2% Very strong presence in Latin America and Middle East, growing in Asia Pacific With companies specialized in the development of energy infrastructures through turn key projects Very strong capabilities in industrial maintenance services Developing projects for oil, gas, electricity, renewables, power lines, industrial maintenance and high-speed rail High technical, financial and environmental sophistication, with a workforce that includes more than 2,000 engineers 30
ACS Industrial Services: Support Services ACS is a global player in the support services and industrial maintenance industry, as a supplier of utilities and energy companies Support Services Revenues 2011 4.4 billion Revenues In Spain 52% 48% Abroad Includes three segments of activity: Networks: Maintenance services for electricity, gas and water distribution assets Specialized products: Maintenance of power plants, high speed railroad and transmission lines Control Systems: Support services for municipalities like lightening and traffic lights management and road security 31
ACS Industrial Services: EPC Projects ACS is a world reference in the Engineering, procurement and construction activities for utilities and oil&gas companies EPC Projects Revenues 2011 2.3 billion Revenues In Spain 48% 52% Abroad Development of turn key projects Electricity generation projects: Power plants installment, CCGTs & renewable energy Oil & gas facility projects (off-shore platforms, refineries, etc) Growth potential in Central Europe, South America, Asia and Australia Joint ventures with Hochtief and Leighton 32
ACS Environment activity Waste management, treatment, recycling and urban services. A very visible, stable and profitable activity Environment mn 2011 Var. 1Q12 Var. Turnover 1,686 +11.6% 421 +0.4% % Abroad 24% 22.5% EBITDA 253 +6.7% 61-3.9% margin 15% 14.4% EBIT 112-10.3% 27-13.5% margin 6.6% 6.4% Backlog 8,941-7.5% 9.098-5% % abroad 37% 35.5% Net Debt 1,124-5.5% 1,053-14.8% World leader in design, construction and operation of waste treatment plants, a capital-intensive activity that requires a strong technological and financial capacity The Group currently operates over 300 facilities, including energy recovery plants, biogas production, composting, transfer, pre-treatment and landfills Mainly in Europe, where Urbaser is a leader in the provision of urban services, especially in France, United Kingdom and Spain Visibility and predictability of revenues due to long term contracts 33
Wrap up considerations (I) There are plenty of profitable opportunities Transportation concessions foster civil works activities Strong demand for natural resources make mining contracting a growing business Increasing demand for energy assets Long term visibility: infrastructures are always demanded In advanced economies to keep competitiveness Existing infrastructures insufficient to promote development in emerging markets because A coherent diversification generate business opportunities Technical excellence in a varied portfolio of activities facilitates serving client needs Strong local presence allows better knowledge of clients and quick reaction time 34
Wrap up considerations (II) With significant global financial muscle With local presence to serve clients Large investments require sizeable companies With global technical capabilities and resources availability With an efficient and balanced global risk management 35
Wrap up considerations (III) ACS size multiplies the Group s financial strength To raise globally and efficiently financial resources To allocate capital developing profitable opportunities To become the partner choice: to choose and to be chosen With public clients To compete for PPPs and large contracts that require bonding capacity With private clients To play the role as the equity partner in the project 36
Conclusions Grupo ACS is prepared to face the future global infrastructure industry from a privileged position ACS has become the leading infrastructure developer in the world: Through a wide array of operating activities developed by local leading companies Focused on client needs and sustainable profitability ACS long term strategy looks for global leadership, cultural & commercial integration with operating efficiency and financial strength ACS promotes cash flow generation and value enhancing activities to achieve sustainable & profitable growth 37
The world s leading infrastructure developer Disclaimer This document contains forward-looking statements on the intentions, expectations or forecasts of Grupo ACS or its management at the time the document was drawn up and in reference to various matters including, among others, its customer base, its performance, the foreseeable growth of its business lines and its overall turnover, its market share, the results of Grupo ACS and other matters relating to the Group s activities and current position. These forward-looking statements or forecasts can in some cases be identified by terms such as expectation, anticipation, proposal, belief or similar, or their corresponding negatives, or by the very nature of predictions regarding strategies, plans or intentions. Such forward-looking statements or forecasts in no way constitute, by their very nature, guarantees of future performance but are conditional on the risks, uncertainties and other pertinent factors that may result in the eventual consequences differing materially from those contained in said intentions, expectations or forecasts. ACS, Actividades de Construcción y Servicios, S.A. does not undertake to publicly report on the outcome of any revision it makes of these statements to adapt them to circumstances or facts occurring subsequent to this presentation including, among others, changes in the business of the company, in its strategy for developing this business or any other possible unforeseen occurrence. The points contained in this disclaimer must be taken fully into account by all persons or entities obliged to take decisions or to draw up or to publish opinions on securities issued by Grupo ACS and, in particular, by the analysts and investors reading this document. All the aforesaid persons are invited to consult the public documentation and information that Grupo ACS reports to or files with the bodies responsible for supervising the main securities markets and, in particular, with the National Securities Market Commission (CNMV in its Spanish initials). This document contains financial information drawn up in accordance with International Financial Reporting Standards (IRFS). The information has not been audited, with the consequence that it is not definitive information and is thus subject to possible changes in the future