10. Structured Finance Conference HOCHTIEF Non Rated Bonds 12 November 2014 MY TRANSPORTATION OUR ROUTE HOCHTIEF CZ Carl E. Hoestermann, Head of Corporate Finance plainpicture:ojo Turning Vision into Value. 1
Turning Vision into Value. 2
Table of contents 1. Company description & strategy p. 4 2. Non rated bonds details p. 8 3. Appendix p. 13 Gotthard ABN Amro, Base Chicago, Tunnel, USA Switzerland WestLink M7 Sydney, Australia Alpha ventus offshore wind park, Germany St Regis Hotel & Residences Abu Dhabi Ukhaa-Khudag Coal Mine, Mongolia Metro Prague, Czech Republic Manjung Power Station, Malaysia Kowloon Southern Link, Hong Kong Turning Vision into Value. 3
HOCHTIEF at a glance General information HOCHTIEF Group is one of the world's leading construction services groups and represented in all of the world's major markets 1 with approx. 71,337 employees (H1 2014) The Group is divided into three operating divisions: HOCHTIEF Americas, HOCHTIEF Asia Pacific and HOCHTIEF Europe Strong geographical diversification with a significant portion of HOCHTIEF Group s sales being generated in America, Australia, Asia and Germany HOCHTIEF is listed on XETRA and a member of the German mid-cap index MDAX Financial overview H1 2014 Sales: EUR 12.30 bn (FY 2013 restated EUR 27.02 bn) New orders: EUR 10.88 bn (FY 2013 EUR 26.49 bn) Order backlog: EUR 39.07 bn (FY 2013 EUR 39.94 bn) Offshore jack-up vessel, Germany Hydropower plant, Chile Yale University Health Center, USA 1 source: ENR Source Book, September 2013 and ENR Top 250 International Contractors, August 2013 Manjung Power Station, Malaysia Turning Vision into Value. 4
HOCHTIEF global presence with three divisions H1 2014 HOCHTIEF Corporate Headquarters Asia Pacific Americas Europe The Leighton Group has a strong market position in the Australian home market and in Asian core markets Sales ~EUR 7.34 bn (FY 2013* ~EUR 16.15 bn) Turner: #1 US general builder 1 Flatiron: Top 10 US transportation infrastructure contractor 1 Sales ~EUR 3.98 bn (FY 2013* ~EUR 7.94 bn) Present in Europe and selected high-growth regions in the world; e.g. Qatar Sales ~EUR 0.92 bn (FY 2013* ~EUR 2.4 bn 2 ) Construction Contract mining Services Development/Others Building Civil Infrastructure Building PPP Engineering Real Estate 1 source: McGraw-Hill, ENR Source book, September 2013; 2 adjusted for Services; * restated Turning Vision into Value. 5
HOCHTIEF shareholder structure as of October 2014 Free float; 27.90% Qatar Holding; 11.10% ACS (Actividades de Construcción y Servicios S.A., Madrid); 61.00% Relationship to ACS HOCHTIEF to remain an independently listed German company, run by Executive Board No domination / profit sharing agreement Open approach provides for cooperation opportunities Three ACS representatives on HOCHTIEF Supervisory Board out of 16 directors in total, chairman Pedro López Jiménez Turning Vision into Value. 6
Table of contents 1. Company description & strategy p. 4 2. Non rated bonds details p. 8 3. Appendix p. 13 Gotthard ABN Amro, Base Chicago, Tunnel, USA Switzerland WestLink M7 Sydney, Australia Alpha ventus offshore wind park, Germany St Regis Hotel & Residences Abu Dhabi Ukhaa-Khudag Coal Mine, Mongolia Metro Prague, Czech Republic Manjung Power Station, Malaysia Kowloon Southern Link, Hong Kong Turning Vision into Value. 7
Unrated bond details HT s finance structure is based on various instruments, most important financing tools are: Non rated bonds Syndicated Revolving Letter of Guarantee and Revolving Credit Facility Bilateral and syndicated promissory notes Bilateral credit lines Unrated bond details: Instrument ISIN Launch Maturity Notional in mn Allocation by investor types: Investor NRB I NRB II NRB III Banks / Private Banks 55.00% 60.00% 32.00% Funds 39.00% 30.00% 52.00% Insurers / Pension Funds 4.00% 2.00% 13.00% Corporates 1.00% 4.00% 2.00% Others 1.00% 4.00% 1.00% Total 100.00% 100.00% 100.00% * Spread above interpolated mid swap as of 23 October 2014 Coupon in % Reoffer spread in bps Current spread in bps* NRB I DE000A1MA9X1 19.03.2012 23.03.2017 500 5.5 389.8 148.0 NRB II DE000A1TM5X8 14.03.2013 20.03.2020 750 3.875 269.7 189.0 NRB III DE000A12TZ95 22.05.2014 28.05.2019 500 2.625 195.5 164.8 Turning Vision into Value. 8
Unrated bond details 400 350 300 HT s NRBs spread performances since launch 250 200 150 100 NRB I NRB II NRB III 50 Source: Blomberg Bonds merely placed at retail intermediaries/retail investors and asset managers/funds In terms of allocation by geography strong focus on Germany / Austria, Switzerland, France, UK and BeNeLux Relatively low secondary market liquidity Spread tightening due to continuous demand from fixed income investors Turning Vision into Value. 9
Summary non rated bonds / terms and conditions Issuer Rating Status Currency Size Coupon Maturities HOCHTIEF AG Unrated Unsecured, unsubordinated EUR Benchmark Fixed, annually 5 and 7 years Use of proceeds Repayment of existing debt and for general corporate purposes Structure Documentation Listing Denomination EUR 1,000 No deviations among three bond documentations; negative pledge, change of control, cross default, change of dividend policy, restrictions on transactions with significant shareholders and asset disposals Similar stand-alone documentation, investment grade style Luxembourg Stock Exchange, Regulated Market Governing law Passporting Joint Bookrunners German Austria, Germany and the Netherlands 3 to 4 addresses from HT s core banks Turning Vision into Value. 10
Key take aways Non rated bond transactions generated access to a broad spectrum of new investor types Oversubscription of orderbooks (NRB I ~8x, NRB II ~5.5x and NRB III ~4.5x) and secondary market performance underline HT s positive standing in debt capital markets Optimization of reoffer spreads and fees from transaction to transaction FAQ during roadshows and investor calls Why is HOCHTIEF not rated did investors not prevent from placing orders during bookbuildings Roadshows were an important marketing tool and helped to create positive momentum in the orderbooks As HOCHTIEF is not a frequent issuer the absence of an external rating did not negatively affect the executed bond transactions Strong name recognition, conservative financial policy and sustained profitable growth enabled HOCHTIEF to successfully tap debt capital markets within the last the three years Although rated corporates (especially investment grade segment) have access to a higher degree of liquidity, tighter pricing conditions and maturities at the longer end of the curve HOCHTIEF sees currently no need to start an external rating process Turning Vision into Value. 11
Table of contents 1. Company description & strategy p. 4 2. Non rated bonds details p. 8 3. Appendix p. 13 Gotthard ABN Amro, Base Chicago, Tunnel, USA Switzerland WestLink M7 Sydney, Australia Alpha ventus offshore wind park, Germany St Regis Hotel & Residences Abu Dhabi Ukhaa-Khudag Coal Mine, Mongolia Metro Prague, Czech Republic Manjung Power Station, Malaysia Kowloon Southern Link, Hong Kong Turning Vision into Value. 12
Ring-FencingHOCHTIEF Ring-Fencing constitutes a central part in every contract of HOCHTIEF s strategic and long term funding tools Inclusion of Ring-Fencing in the following documentations: - EUR 2 bn syndicated guarantee and credit facility, maturing April 2019 - Every existing promissory note, outstanding volume approx. EUR 89 mn, longest maturity December 2016 - Non Rated Bond I with a notional of EUR 500 mn (maturity March 2017), Non Rated Bond II with a notional of EUR 750 mn (maturity March 2020) and Non Rated Bond III with a notional of EUR 500 mn (maturity May 2019) Basic idea of this protection clause : Preservation and protection of HOCHTIEF s creditworthiness by prohibition of certain transactions with Significant Shareholders (e.g. provide any loans, enter into a merger and asset disposals) and certain limitations regarding the payment of dividends Consistent definition of Significant Shareholder: Significant Shareholder means each company of the ACS Group if companies of the ACS Group hold at least 30% of the voting rights in HOCHTIEF Aktiengesellschaft Legal consequences of a possible breach: - Each Holder has an exceptional right to terminate - Each Holder can demand immediate repayment of the amount of principal plus any accumulated interest Turning Vision into Value. 13
HOCHTIEF Group net debt HOCHTIEF Group period end (EUR million) H1.2014 H1.2013 Q1.2014 FY 2013 Q3.2013 Q2.2013 Q1.2013 FY2012 HT Group -1,299.6-1,701.6-574.5-39.6-829.6-1,701.6-2,018.7-817.9 HT Americas 249.1 302.4 267.5 369.5 329.0 302.4 395.2 468.5 HT Asia Pacific -872.8-940.7-815.2-276.6-967.6-940.7-1,565.4-616.4 HT Europe -392.7-795.9-385.5-486.5-697.0-795.8-713.7-541.7 Headquarter / Consolidation -283.2-267.4 358.7 354.0 506.0-267.4-134.8-128.3 Ongoing deleveraging Strong reduction of Net Debt; >EUR 400 m yoy Increase of Net Debt by EUR 725 m compared to Q1.2014: EUR 577 m investment in increased Leighton stake (shown at Headquarter) Ongoing measures to reduce net debt, in particular: Improving cash management: focus on reduction of underclaims/working capital Significant Capex reduction, especially at LEI (FleetCo) Further divestments planned, mainly at Leighton Above 2012 and 2013 figures are restated. Turning Vision into Value. 14
Disclaimer This presentation and the report contain forward-looking statements. These statements reflect the current views, expectations and assumptions of the Executive Board of HOCHTIEF Aktiengesellschaft and are based on information currently available to the Executive Board. Such statements involve risks and uncertainties and do not guarantee future results, performance or events. Actual results, performance or events relating to HOCHTIEF Aktiengesellschaft and the HOCHTIEF Group, including but not limited to possible future divestments, profit before tax, consolidated net profit and dividends, may differ materially fromthe expectations and assumptions described in such statements due to, among other things, changes in the general economic, sectoraland competitive environment, risks associated with capital markets, currency exchange rate fluctuations, changes in international and national laws and regulations, in particular with respect to tax laws and regulations, the conduct of other shareholders, and other factors. Statements on dividends are additionally subject to the recognition of a corresponding inappropriatednet profit in the published separate financial statements of HOCHTIEF Aktiengesellschaft for the fiscal year concerned and the adoption by the competent decision-making bodies of appropriate resolutions taking into account the prevailing situation of the Company. HOCHTIEF Aktiengesellschaft does not assume any obligations to update any forward-looking statements. This document is being presented solely for informational purposes and should not be treated as giving investment advice. It contains only summary information and does not purport to be comprehensive and is not intended to be (and should not be used as) the sole basis of any analysis or otherevaluation. This document does not constitute or contain an offer or invitation for the purchase of any securities ofhochtief AG and neither this document nor anything contained herein shall form the basis of, or be relied upon in connection with, any contract or commitment whatsoever.any investment decision to purchase or subscribe for any securities ofhochtief AG should be made solely on the basis of the information in theprospectus and no reliance is to be placed on any representations other than those that will be contained ina prospectus which, shouldhochtief pursue a public offer of securities, will be available fromhochtief AG and the underwriters of the transaction. Neither this document nor the information contained in it may be taken, transmitted, published or distributed directly or indirectly in the United States of America, Canada, Australia or Japan, or to any resident of Japan. Securities may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended. HOCHTIEF AG does not intend to register or conduct any public offering of securities in the United States. By attending the presentation to which this document relates or by accepting this document, you represent, warrant and undertakethat you have read and agree to comply with the contents of this Disclaimer. Turning Vision into Value. 15
Contact details For further information please contact: Corporate Finance HOCHTIEF Aktiengesellschaft Opernplatz 2 45128 Essen, Germany Carl E. Hoestermann Phone: +49 201 824-1832 Carl.Hoestermann@hochtief.de Stefan Zander Phone: +49 201 824-2160 Stefan.Zander@hochtief.de Turning Vision into Value. 16