RESULTS July 27 th, 2018
CONFERENCE CALL DETAILS LIVE EVENT: The Company will host a conference call for investors and analysts today at 12:30 (CEST). Please find below conference call telephone numbers: Spain: +34 911 140 101 France: +33 170 710 159 UK: +44 207 194 3759 US: +1 646 722 4916 Access code: 30584782# Access to the live event: http://event.onlineseminarsolutions.com/r.htm?e=1794996&s=1&k=3f66998b739a7329caf186615e3bf 6BE WEBCAST REPLAY: A recording of the conference call will be available for 30 days on the following telephone numbers: Replay dial number: Spain: +34 910387491 UK: +44 2033645147 US: +1 (646) 7224969 Access Code: 418776808# Access to the Webcast Replay: http://event.onlineseminarsolutions.com/r.htm?e=1794996&s=1&k=3f66998b739a7329caf186615e3bf 6BE 2
This presentation has been produced by Indra for the sole purpose expressed therein. Therefore, neither this presentation nor any of the information contained herein constitutes an offer sale or exchange of securities, invitation to purchase or sale shares of the Company or any advice or recommendation with respect to such securities. Its content is purely for information purposes and the statement it contains may reflect certain forward-looking statements, expectations and forecasts about the Company at the time of its elaboration. These expectations and forecasts are not in themselves guarantees of future performance as they are subject to risks, uncertainties and other important factors beyond the control of the Company that could result in final results materially differing from those contained in these statements. The Company does not assume any obligation or liability in connection with the accuracy of the mentioned estimations and is not obliged to update or revise them. This document contains information that has not been audited. In this sense, this information is subject to, and must be read in conjunction with, all other publicly available information. This disclaimer should be taken into consideration by all the individuals or entities to whom this document is targeted and by those who consider that they have to make decisions or issue opinions related to securities issued by Indra. 3
MAIN HEADLINES 1 Order Intake up +11% in local currency, with both T&D and IT posting growth. 2 Revenues increased by +9% in local currency, backed by the acquisitions, the Energy & Industry vertical and Air Traffic Management. 3 4 EBITDA amounted to 117m (+8% vs ). Ex Tecnocom restructuring costs, EBITDA would have increased +20%. EBIT reached 73m ( 86m excluding Tecnocom restructuring costs) vs 77m in. EBIT margin was 5.0% in vs 5.6% in. EBIT Margin, excluding Tecnocom restructuring costs, would have reached 5.9%. 5 FCF generation amounted to -61m in (vs -31m in ), affected by the seasonality of the second quarter and the difficult comparison vs 2Q17. 6 Net Debt/EBITDA LTM up to 2.4x. Ex-acquisitions, it would have stood at 1.5x. 7 Net Income totalled 37m vs 38m in. 8 Tecnocom restructuring process is over. Operating synergies are being delivered as expected. 2018 Guidance confirmed (Revenues, EBIT and FCF pre working capital) 4 4
REVENUES UP +6% IN REPORTED TERMS Sales Growth Reported +6% Local Currency +9% 2Q18 Sales Growth Reported +1% Local Currency +4% m m 5 5
REVENUES AND ORDER INTAKE BY REGION Order Intake ( m) Local Currency / Reported Revenues ( m) Local Currency / Reported 1.660 +11% / +8% 1.789 1.379 +9% / +6% 1.463 45% 743 +32% / +32% 979 55% Spain 48% 657 +16% / +16% 761 52% 23% 18% 14% 385 +5% / -7% 357 294-16% / -16% 246 238-9% / -13% 207 America 20% Europe 14% AMEA 12% 22% 18% 12% 304 +6% / -7% 284 253 +1% / +1% 256 165 +2% / -2% 162 20% 17% 11% 6 6
EBIT AND MARGIN EVOLUTION EBIT and Margin Evolution 2Q18 EBIT and Margin Evolution 5,6% -0,6pp 5,0% 6,0% 0,2pp 6,2% 77-6,2% 73 6,1% 44 47 EBIT ( m) EBIT ( m) 2Q17 EBIT ( m) 2Q18 EBIT ( m) EBIT and Margin Evolution ExTecnocom restructuring costs 2Q18 EBIT and Margin Evolution ExTecnocom restructuring costs 5,6% 0,3pp 5,9% Impact equivalent to 0.9pp 6,0% 1,2pp 7,1% Impact equivalent to 0.9pp 77 11,0% 86 44 21,3% 54 EBIT ( m) EBIT ( m) 2Q17 EBIT (m ) 2Q18 EBIT (m ) 7 7
WE HAVE STARTED TO DELIVER OUR EFFICIENCY PLAN FOCUSED ON THE IT DIVISION 1 Lean & Automation Apply full end-to-end Lean approach, fostering a culture of continuous improvement and placing automation at the core of our operations PLAN IT 2 Delayering 3 Pyramid Optimisation Reduce management layers to increase agility and accountability while maximising efficiency Reshape our production and delivery pyramid First step in order to improve our profitability in the IT division 4 Global Production Increase off-shoring by leveraging our existing capabilities in Latin America Costs Synergies 2018 2019 2020 21m 1m 0m 24m 41m 42m 7m 5m Plan IT helps us achieve Guidance 2020: EBIT >10% (p.a. growth) 8 8
T&D ORDER INTAKE AND REVENUES T&D Order Intake ( m) Local Currency / Reported 605 512 +20% / +18% 225 51% -13% / -14% 261 37% 51% Revenues ( m) Local Currency / Reported 553-5% / -6% 519 280-3% / -3% 272 273-7% / -10% 247 52% 49% 48% 49% 250 +55% / +52% 380 63% 286 2Q18 Revenues ( m) Local Currency / Reported -7% / -8% 262 53% 152-10% / -10% 136 52% Defence & Security Transport & Traffic 47% -3% / -6% 134 126 48% 2Q17 2Q18 9 9
T&D EBIT AND MARGIN EVOLUTION T&D EBIT ( m) 2Q18 EBIT ( m) 70-4,0% 67 37-5,5% 35 2Q17 2Q18 EBIT Margin (%) 2Q18 EBIT Margin (%) 12,6% +0,3pp 12,9% 12,9% +0,4pp 13,3% 2Q17 2Q18 10 10
IT ORDER INTAKE AND REVENUES IT Order Intake ( m) Local Currency / Reported Revenues ( m) Local Currency / Reported 944 +19% / +14% 826 27% 1.183 1.148 +7% / +3% 306 +34% / +29% 395 33% 27% 35% 225 291 +31% / +26% +17% / +13% 283 329 30% 35% 30% 32% 12% 344 +34% / +30% 447 366-43% / -45% 202 132 +14% / +5% 139 38% 17% 12% 24% 13% 200 +9% / +6% 212 110 +16% / +9% 120 455 123 2Q18 Revenues ( m) Local Currency / Reported +11% / +7% 487 +26% / +21% 148 22% 13% 30% Energy & Industry Financial Services PPAA & Healthcare Telecom & Media 27% 36% 24% 13% +8% / +4% 162 169 +1% / -2% 109 107 +10% / +4% 60 63 35% 22% 13% 2Q17 2Q18 11 11
IT EBIT AND MARGIN EVOLUTION IT EBIT and Margin Evolution 2Q18 EBIT and Margin Evolution 0,9% -0,3pp 2,5% 0,6% 1,6% +0,9pp 8 6 7 12 EBIT ( m) EBIT ( m) 2Q17 EBIT ( m) 2Q18 EBIT ( m) EBIT and Margin Evolution excluding the impacts of Tecnocom restructuring costs 2Q18 EBIT and Margin Evolution excluding the impacts of Tecnocom restructuring costs +1,1pp 2,0% Impact equivalent to 1.4pp +2,2pp 3,8% Impact equivalent to 1.3pp 0,9% 19 1,6% 19 8 7 EBIT ( m) EBIT ( m) 2Q17 EBIT ( m) 2Q18 EBIT ( m) 12 12
BRAZIL AND IT DIVISION OPERATING MARGIN IT BRAZIL IT DIVISION (local currency) Variation Order Intake 473.0 465.6-2% Operating Margin 2,3% 3,4% Revenues 373.5 394.8 +6% Other Operating Income & Expenses ( m) 1-11,1-26,1 EBIT -13.5 18.4 EBIT Margin 0,9% 0,6% EBIT Margin -3,6% 4,7% +8.3pp 1. Other Operating Income & Expenses includes: staff reorganization, integration and acquisition costs, amortization of intangible assets (PPA from acquisitions) and equity based compensation, among others. 13 13
FCF GENERATION Quarterly FCF ( m) FY15: -50m FY16: 184m FY17: 186m : -61m 137 140 142 75 47 2-23 -5-5 -26-6 -79-85 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18-55 Accumulated FCF LTM ( m) OPERATING FCF BEFORE WC ( m) 163 181 184 132 104 184 186 185 157 95,9 2% 97,4 76-114 -136-50 1H15 9M15 FY15 1Q16 1H16 9M16 FY16 1Q17 9M17 FY17 1Q18 14 14
NET DEBT BRIDGE Net Debt Bridge Cash Flow ( m) FCF = -61M 15 15
NET WORKING CAPITAL EVOLUTION Net Working Capital (DoS) -1 11 72-4 +27-1 25 38-81 94 10 42-11 -4-4 38 40 29 +11 40-32 -84-82 +1-81 -1-82 2017 1Q18 Accounts Receivable Accounts Payable Inventory 16 16
NET DEBT EVOLUTION Net Debt ( m) 837 (173) 745 (187) 700 659 (187) 656 Net Debt (187) (187) (Factoring) (1) 3Q15 4Q15 2Q16 2Q17 2Q18 6,6x Net Debt/EBITDA LTM (Times) 5,4x 3,1x 2,9x 2,4x ND/ EBITDA LTM 1,5x ND/ EBITDA LTM Ex Acquisitions (1) Non-recourse factoring 3Q15 4Q15 2Q16 2Q17 2Q18 17 17
DEBT STRUCTURE Total 2017 % total Total % total L/T Debt 1.326 83% 1.016 79% S/T Debt 276 17% 271 21% Gross Debt 1.602 100% 1.287 100% Cost of Gross Debt 2,1% 2,2% Cash & Others 946 n.m. 699 n.m. Net Debt 656 n.m. 588 n.m. Cost of Net Debt 3,8% 3,0% Corporate Bonds Convertible Bonds R+D Loans Bank Loans EIB 1 Loans Gross and Net Debt Structure 1,602m 351 399 109 663 80 Gross Debt 946m 759 187 Factoring Cash & Cash Equivalents 656m 656 Net Debt 174 Gross Debt Maturity Profile ( m) 136 157 Other available credit facilities: 200m 371 764 2 2018 2019 2020 2021 2022 and 3 above 1. European Investment Bank 2. Including 154m Convertible Bond 3. Including 245m Convertible Bond with 2023 maturity and 296m Corporate Bond with 2024 maturity 18
Investor Relations irindra@indra.es Avda. de Bruselas 35 28108 Alcobendas, Madrid Spain T +34 91 480 98 00 www.indracompany.com