ACS gains 233 million euros, 6% more, in the first quarter of 2017 Sales increased by 11.2% up to 8,357 million euros Backlog increases by 15.0% up to 68,092 million euros in March 2017 Net debt decreases by 55,9% in the last twelve months, down to 1.695 million euros (0,7 times EBITDA) Grupo ACS Key operating & financial figures Euro Million 3M16 3M17 Var. Turnover 7,518 8,357 +11.2% EBITDA 529 621 +17.4% EBIT 401 446 +11.1% Attributable Net Profit* 220 233 +6.0% Backlog 59,190 68,092 +15.0% Total Net Debt 3,840 1,695-55.9% * Not including Urbaser's contribution in 2016, growth would stand at 15.1% Consolidated Results ACS Group sales reached 8,357 million euros in the first quarter of 2017, an increase of 11.2%. The positive evolution of production in this quarter, especially in the construction activity, which grew by 14.8%, confirms the growth trend started in the second half of 2016. The geographical distribution of sales shows the broad diversification of the Group, in which accounts for 42% of sales, Europe 20%, Australia 20%, Asia 9%, South America 6% and Africa the remaining 2%. Domestic sales account for 13% of the total. 1
Sales breakdown 29% Africa 2% 13% Rest of Europe 7% South America 6% 42% Backlog at the end of the first quarter of 2017 amounted to 68,092 million euros, 15.0% higher than 2016 first quarter backlog, with an equivalent sales geographical breakdown. Backlog breakdown 38% Africa 1% 10% Rest of Europe 8% South America 7% 35% Total EBITDA in the first quarter of 2017 accounted for 621 million euros, a 17.4% increase due to the positive evolution of the construction activity. On the other hand, EBIT stood at 446 million euros after increasing by 11.1%, keeping with the increase in production. Margin over sales remained stable at 5.3%, with all activities showing productivity improvement. 2
The attributable net profit of the Group in the first quarter of 2017 increased 6% reaching 233 million euros. This growth would be 15.1% excluding the contribution of Urbaser in 2016. Grupo ACS Net Profit breakdown Euro Million 3M16 3M17 Var. Construction 72 91 +26.5% Industrial Services 113 119 +4.6% Services 5 12 +130.6% Net Profit from activities 191 222 +16.5% Discontinues Op. (Urbaser) 17 0 Corporation 11 10 TOTAL Net Profit 220 233 +6.0% It is worth noting that the Construction activity which grew by 26,5% as a result of the transformation processes implemented in HOCHTIEF, whose contribution to the consolidated profit of the Group increased by 39.4%. Net profit in Industrial Services grew by 4.6% due to the boost of international activity and the stabilization of the Spanish market. Net profit from Services area reached the 12 million euros, and includes the contribution of Clece and the capital gain from the sale of Sintax last February. Net profit of the Corporation amounts to 10 million euros and includes in both periods the positive impact of various financial operations. Financial Situation Net debt of Grupo ACS accounted for 1.695 million euro, decreasing by 55,9% since March 2016 and 72% in the last four years.the improvement in operating cash flows from the activities and the proactive divestment policy of the Group, standing out the sale of Urbaser in December 2016, are key to this positive evolution of the Group s net debt. 3
Net debt evolution 1Q 2013-17 5,989 854 4,579-72% 707 3,827 3,840 592 542-56% 0,7x EBITDA 1,695 203 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Project Finance Net debt stands at a ratio of at 0.7 times the annualized EBITDA, which enabled to obtain the BBB rating, with a stable outlook, by Standard & Poor's. Among the arguments pointed out by this agency, is that ACS is one of the world's largest engineering and construction companies with a wide international presence in, and Europe, developed economies where the legal, political and operational framework is more stable and predictable than in emerging markets. In their view, the group's large size, geographic and business diversity, and its ability to implement large and technically complex projects help to offset the typical high volatility and low entry barriers in the construction business. Furthermore, the agency considers that leverage indicators have improved significantly in recent years, through the sale of non-strategic assets and the execution of a rationalization process, focusing on the generation of operating cash flows. In fact, in the first quarter of 2017 cash flows from operations before working capital variations that have a seasonal effect in this quarter amounted to 507 million euros, improving by 21.6% due to the substantial Increase in operating results and a 13% decrease in net financial expenses. 4
The total volume of investments of ACS Group during the first quarter of 2017, including operating CAPEX, financial and concessionary projects, amounted to 191 million euros, mainly due to contract mining equipment in CIMIC and Cobra s energy assets. Grupo ACS Net investments breakdown Euro million Investm. Disposals TOTAL Construction 134 (49) 85 Industrial Services 50 (6) 43 Services 8 (56) (48) Corporation 0 (2) (2) TOTAL 191 (113) 78 Divestments totalled 113 million euros, highlighting Sintax sale, worth 55 million euro. Results per Area of Activity Construction Sales in Construction in the first quarter of 2017 accounted for 6,158 million euro, showing an increase of 14.8% due to a strong recovery of the activity in Australia and a steady growth in the n market. International sales of the Construction area of ACS Group amounted to 5,903 million euros which represents 95.9% of total sales in this area, being North America and Australia the most important markets. represents a 4.1% of total sales. Construction sales 35% 4% Rest of Europe 7% Construction backlog 43% 5% Rest of Europe 9% South America 2% 52% South America 4% 39% 5
Construction EBITDA accounted for 406 million euro, with a margin over sales of 6.6%, after growing a 26.7% thanks to a higher contribution of intensive capital businesses such as contract mining or large projects that require the use of own machinery. Net profit reached over 91 million euros, showing a growth of a 26.5%. Construction Backlog, at the end of the first quarter of 2017, accounted for 57,349 million euro, 16.6% more than 12 months ago. International backlog represents 95.4% of the total in Construction. Amongst the most important awards during this period, these are the most significant: - Enlargement of A10 highway and tunnelling through Amsterdam Zuid Station (Amsterdam, Holand). - Construction of the new bridge in NC12 road, connecting Pea Island National Wildlife Refuge and Rodanthe City (North Carolina, United States). - Design, construction, funding and maintenance of 10.6 Km long for the enlargement of the 427 highway in Ontario (Canada). - Design and construction of Northlink phase 3, which includes de construction of a two-lane road between Ellenbrook and Muchea (Perth, Australia). - Enlargement of the Pacific Motorway M1 (New South Wales, Australia). - Construction and development of different underground stations in Line 3, in Santiago de Chile (Chile). - Mining operation management contract in the coal mines of Satui and Bayan s Wahana (Indonesia). - Improvement of Myrtle Avenue railway line tunnels (New York, United States). - Design, construction, and maintenance of four different elementary schools in Auckland and Hamilton (New Zeland). - Building of Jackson Height s new school (New York, United States). - Construction of the apartment building Schwabinger Carre, in Munich (Germany). - Construction of the office complex Lister Dreieck, in Hannover (Germany). - Construction of the Policia Nacional del Perú new hospital, in Lima (Peru). - Construction of Al Garhoud Towers, in Dubai (United Arab Emirates). - Improvement and replacement project of water treatment plants equipment, in Woodleigh Waterworks (Singapur). - Enlargement of SH 199 highway in Tarrant County (Texas, United States). - Improvement works in the interchange that links 93 state highway (I-75) and 64 state highway, in Manatee County (Florida, United States). 6
Industrial Services Sales in Industrial Services reached 1,856 million euro, increasing by 3.9% due to a positive evolution of the international activity and the Spanish market stability. Particularly, 1,362 million euros, 73.3%, correspond to international sales, which have increased a 5.6%. Industrial Services sales Africa 9% 16% 27% Industrial Services backlog 17% Africa 8% 24% Rest of Europe 6% Rest of Europe 4% South America 22% 20% South America 27% 20% EBITDA accounted for 211 million euros, with an increase of 3.9%, with a sales margin standing at 11.4%, stable in relation to the compared period. Likewise, Net Profit stood at 119 million euro, 4.6% higher than in the same period of 2016. Industrial Services has increased its backlog by 3.8% up to 8,750 million euro at the end of the first quarter of 2017, equivalent to 17 months of production, being 76.4% from international contracts. The most important awards of the period are: - Design, construction, operation and maintenance of Gamboa s water treatment plant (Panama). - EPC project for the construction of the Hidromanta hydropower plant, with 19.80 MW of installed power capacity (Peru). - Outsourcing of sales points in Repsol s 6,000 gas stations (). - Licence for the electronic collection system for SITEUR (Urban Electronic Train System) in Guadalajara City (Jalisco, Mexico). - Contract for the maintenance works of Enel s power substations, in Chile. - Barcelona s Municipality street lighting maintenance (). 7
Services Services accounted for sales of 348 million euro, once excluded the activity of Urbaser, showing a decrease of 8.1% as a consequence of the sale of the logistics business (Sintax), at the beginning of 2017. Clece s sales increased by 0.7%. Enviroment sales Rest of Europe 5% Environment backlog Rest of Europe 4% 95% 96% EBITDA in Services accounted for 18 million euro with a margin over sales of 5.1%, 10 b.p higher than last year. Net Profit accounted for 12 million euro, and includes the capital gains after the sale of Sintax, which raises up to 5.7 million euro. Net Profit in Clece increased by 0.7% The current Backlog accounts for 1,994 million euro, equivalent to 16 months of activity. Madrid, May 11 th, 2017 7 8