PRESS RELEASE EBITDA increases 13% to 360 million SACYR EARNS A NET PROFIT OF 120 MILLION EUROS IN 2016 Madrid, 27th February 2017.- The Sacyr Group achieved a net profit of 120.2 million in 2016. EBITDA has increased by 13%, up to 359.6 million. These figures are confirmation that the group has implemented the right strategy, increasing its overall company profile while applying a strict system of risk management and cost control, with special attention to profitability and generating project cash flow. Total revenue was 2,860.5 million, slightly below 2015 level due to the impact of construction activity on some markets. International turnover exceeded 50%. The gross margin continues to improve, going from 10.8 % to 12.6% in 2016. EBIT totaled 208 million euros, representing an increase of 41%. The revenue backlog reached 25,956 million in December, comprising mostly recurring business: Sacyr Concesiones, with 12,926 million, makes up 50% of the total, and Valoriza, with 6,447 million, 25%. 52 % of the total backlog now comes from international activity, even though important contracts such as the Pedemontana-Veneta concession in Italy or the Mar 1 freeway in Colombia are not within the consolidation boundary. Within the construction business, this figure reached 84% as a result of the intense tendering activity outside Spain, while concessions represent 59%, services represent 29%, and industrial represents 19% of the backlog. 1
RELEVANT FACTS The most relevant facts for the company over recent months are: Completion of two derivatives operations on 50 million Repsol shares, eliminating the risk of variations in the market price of Repsol below 10.7 /share for 20 million shares and 11.9 /share for 30 million shares. Furthermore, this derivative structure allows us to benefit from prospective increases in Repsol share prices up to a given level. Over the course of the financial year, the debt associated to the oil company's shareholding has been reduced by 885 million euros, to reach the 769 million of the loan principal. Award of the 186 km Roma-Latina highway in Italy, with envisaged investment of 2,800 million and a concession period of 43 years. Successful conclusion of the Third Set of Locks of the Panama Canal: the largest engineering project of the 21 st century. Inauguration of La Pampilla refinery upgrade in Peru, carried out by Sacyr Industrial. BUSINESS PERFORMANCE Sacyr Construcción.- Revenue in this division was around 1,250 million, a drop of 25%. Ebitda was 58 million, an encouraging figure given the difficult economic environment in this sphere in Spain, Portugal and other markets, along with the effect of a different rate of progress of the works in the two Chilean concessions. To overcome this situation, the company has overseen a redundancy process (which includes the non-recurring negative impact of -25.5 million due to restructuring of personnel in Spain and Somague) and other business model transformation measures to improve efficiency and productivity. The backlog is around 4,131 million, of which 84% corresponds to international projects. In this regard, the backlog will be significantly increased and have even greater international emphasis thanks to the contracts awarded, such as the road between North Kabad and Al Salmi in Kuwait, the slab-on-grade foundation at Mexico airport and special installations in the Kinaxixi complex in Angola, among others. Through its Italian subsidiary SIS, it has 2
been awarded the construction and concession of the Roma-Latina Highway, with envisaged investment of 2.8 billion euros. Sacyr Concesiones.- Turnover for concessions operated by Sacyr Concesiones improved by 18% to 309.5 million, a highly positive figure which has come about thanks to the evolution of traffic in Spain (+5%). Construction revenue was 242.9 million, a 15% decrease due to the progress of the concessions in Chile. In total, comparable turnover reached 552.4 million, eliminating the effect of the disinvestments, representing an increase of 1 %. Ebitda amounted to 206.8 million (19% up on last year, in uniform terms) whilst margin was stable around 67%. Net profit was 22.7 million. The backlog is around 12,926 million, with 59% of future revenue from overseas. The group's future growth envisaged in the 2015-2020 strategic program is guaranteed with Sacyr Concesiones' current backlog. As part of its regular strategy of asset rotation, in the year Sacyr Concesiones closed disinvestment in three hospitals in Portugal for 113 million including debt, but maintains its minority shareholding which will allow it to continue to offer hospital management services. Moreover, the Aunor concessions were refinanced through a bond issue amounting to 54 million, and the Moncloa and Plaza Elíptica transport hubs in Madrid were also refinanced with 25-year debt of 190 million. Both these cases benefited from the best conditions now available on the financial markets. Valoriza.- The services subsidiary has consolidated its high level of turnover and contracts while maintaining suitable profitability. Valoriza amounted to 908 million (+19%), led by increases in the Environment (+10.9%), Multiservices (+28.5%) and water (+16.8%) businesses. The ebitda reached 76 million, which represents a margin of 8.1%. The breakdown of revenue by area was: Environment, 347.4 million; Multiservices, 390.9 million; and Water, 167.2 million. 3
Valoriza's revenue backlog increased to 6,447 million (+7%), of which 29% involves international projects. The following contract awards are notable during this financial year: - Valoriza Agua: Sohar desalination plant in Oman for $1,200 million; - Valoriza Servicios Medioambientales: street cleaning and refuse collection in Albacete for 164 million over 15 years; refuse collection and transport in eastern Madrid for 87 million; street cleaning and refuse collection in Ibiza for 68; among others. - Valoriza Servicios a la Dependencia: home-help services in the 5 Madrid districts for 154 million over 3 years, and in the Gracia and El Ensanche districts in Barcelona for 29 million over 2 years; - Valoriza Facilities: cleaning services for hospital and health center buildings and facilities in Elche, Alcoy and Requena for 15 million; cleaning of Madrid Metro rolling stock, lots 1 and 2, for 21 million over 4 years; cleaning of vehicles and facilities of ALSA transport company for 18 million, among others. Sacyr Industrial.- The youngest division in the group maintains its high rate of growth and meets all forecasts. Sacyr Industrial's turnover grew by 38% up to 400.6 million, most notably the Oil and Gas segment, where turnover has grown by 92%, up to 235.5 million, due to the progress of the projects currently under way and despite the fact the generation area (-21%) has been affected by the lower prices of the electricity pool. Ebitda was 30.1 million, with a significant increase of 43%. This means a business margin of 7.5%. The backlog has also recorded a positive evolution (+2%) up to 2,452 million, with the international component, which has grown by 37% up to 465 million, being particularly notable. In the year, Sacyr Industrial was awarded its first contract in Ecuador: the construction of a cement plant in Chimborazo for 150 million. It has also entered Chile thanks to maintenance contracts for electricity grids and the construction of substations, and has 4
extended the backlog of Sacyr Nervión in maintenance of installations, and that of EPC with Sacyr Fluor. At 31st December, the financial results ( -201 million) were down 15% from the previous financial year. The group's net financial debt following the derivatives operation amounts to 3,726 million. Of the total debt, 2,435 million are related to company activities, of which 2,187 million correspond to project financing (90% of it is very long-term financing), which is covered with the cash flows generated by the operations. A further 769 million correspond to the principal of the credit for the 8.2% shareholding in Repsol, the financial cost of which is covered with the dividend. Video of Carlos Mijangos, Sacyr CFO, discussing 2016 Sacyr results https://www.youtube.com/watch?v=rkrzxxm82ye. 5