Fomento de Construcciones y Contratas, S.A. · BME:FCC
Fomento de Construcciones y Contratas — FY2008 Earnings Presentation
46 slides from Fomento de Construcciones y Contratas's earnings presentation, February 2009
Slide 1: Sustainability Indexes
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Slide 2: Disclaimer
RESULTS Disclaimer ¾ This document has been drafted by Fomento de Construcciones y Contratas, S.A. (the “Company”) to be used solely in the presentation of 2008 earnings. ¾ Neither the Company nor its consultants and representatives accept any liability whatsoever, due to negligence or otherwise, fo
Slide 3: Mr Baldomero Falcones, Executive Chairman and CEO
RESULTS R E S U L T S Mr Baldomero Falcones Executive Chairman and CEO
Slide 4: Investing in the future
RESULTS Investing in the future 1. 2008 Results: Key figures 2. Strategic strength Businesses for the future Sound markets Leader in markets and businesses 3. Proprietary cash flow 4. Financial strength 5. Committed shareholding 6. Attractive valuation 7. Corporate responsibility 4
Slide 5: 2008 Results: Accounting methods
RESULTS 1. 2008 Results: Accounting methods ¾ In 2008, among the allowed alternative approaches under IAS 31 for the recognition of interests in joint ventures, FCC adopted the equity method of accounting for recognising jointly controlled entities, whereas it had used proportionate consolidation un
Slide 6: 2008 Results: Key figures
RESULTS 1. 2008 Results: Key figures Revenues International revenues 13.423 14.016 5.815 4.746 % .5.5%% ++44.4.4% 22 ++22 2007 2008 2007 2008 Backlog 32.707 30.215 % ++88.2.2% 2007 2008 6
Slide 7: 2008 Results: Key figures
RESULTS 1. 2008 Results: Key figures EBITDA EBIT 1.930 1.741 1.259 947 -9-9.8. % -2-244.8 8% .8%% 2007 2008 2007 2008 EPS Net debt 7.776 6.901 3,6 2,7 -1-11. 13.3%% -2-25. 53.3%% 2007* 2008 2007 2008 * Excludes gain on the sale of Realia 7
Slide 8: 2008 Results: Key figures
RESULTS 1. 2008 Results: Key figures 2008 2007 Change Revenues 14,016 13,423 +4.4% Growth EBITDA 1,741 1,930 -9.8% Net income 337 465 -27.5% Returns EBITDA margin 12,4% 14,4% Cash flow Operating cash flow 1,105 1,252 Solidity Total net debt 6,901 7,776 -11.3% Future Backlog 32,706 30,510 +8.2% 8
Slide 9: Strategic strength: Businesses for the future
2. Strategic strength: RESULTS Businesses for the future Global investment envisaged for Construction transport infrastructure of 53 trillion euro* Infrastructure Concessions Euroconstruct expects civil Cement engineering projects in Eastern Europe will expand over 30% in 09- 10 *Source: OECD, Globa
Slide 10: Sound markets – International Presence
2. Strategic strength: RESULTS Sound markets – International Presence ¾ Solid platforms for international growth REVENUES BY REGION (08) Western Europe: 1,194 B€ Central and Eastern Europe: 3,827 B€ Asia and RoW: 151 M€ Americas: 519 M€ Africa: 124 M€ 10
Slide 11: Sound markets: leading water and waste company
RESULTS 2. Strategic strength: Sound markets ¾ One of world's leading companies in water and waste management No. 1 in waste management in the UK No. 3 in water management in the Czech Republic No. 1 in waste No. 2 in industrial management in Austria No. 2 in water waste management in management in
Slide 12: Sound markets – International Expansion
2. Strategic strength: RESULTS Sound markets – International Expansion ¾ International revenues: • Up 23% • Close to 6 billion euro • Represents 42% of the Group's revenues + 41,5% +36,0% 5.815 4.746 +18,0% +10,3% + 9,9% 1.718 651 703 2004 2005 2006 2007 2008 9-fold increase 12
Slide 13: Leader in markets and businesses
2. Strategic strength: RESULTS Leader in markets and businesses Leader in Spain WASTE Leader in the UK MANAGEMENT 3rd in Europe WATER 2nd in Spain MANAGEMENT 5th in the world INDUSTRIAL WASTE Leader in Spain MANAGEMENT 2nd in the US 1st Spanish contractor CONSTRUCTION 2nd in Austria 3rd in Eastern E
Slide 14: Leader in markets and businesses
2. Strategic strength: RESULTS Leader in markets and businesses EBITDA (1,741M€) BY BUSINESS NET DEBT (6,901 M€) Other T.Picasso 2% 1% Other Construction Construc. Services 6% 2% 27% 35% Cement 26% Realia * Versia Versia 7% 4% 7% Cement Services 24% 59% * Equity-accounted from 2009 onwards BY MARKET
Slide 15: Proprietary Cash Flow
3. Proprietary Cash Flow RESULTS ¾ Full control of cash flow in key areas • Full control over management and cash flow in businesses where FCC has long experience and leadership • Qualified human resources with know-how and own technology • Co-managed businesses and affiliates equity-accounted Infra
Slide 16: Financial strength
RESULTS 4. Financial strength ¾ Solid balance sheet • Net debt/EBITDA = 3.68x* • Leverage = 62.4% ¾ 100% of the debt assigned to cash-generative activities ¾ Strong financial structure By type By term By recourse Long term Short term Fixed 43% 76% 24% Without Corporate Variable 77% recourse 23% 57%
Slide 17: Committed shareholding
RESULTS 5. Committed shareholding SHAREHOLDER STRUCTURE (Feb. 09) 53,9% Employees 0,7% T-Stock 2,9% Domestic Institutional 13,0% Foreign RBS Institutional 3,4% 9,2% Eurohypo Free Freefloat float 3,4% 46,1% 46,1% Retail Credit Agr. 10,0% 3,5% B 1998 is 83.92% controlled by E. Koplowitz and 16.07% by
Slide 18: Attractive valuation
RESULTS 6. Attractive valuation ¾ Share ratios*: ¾ Generous dividend policy • Price-to-book = 1.0 • High dividend yield: 7.8%* • P/E = 7.6 • Maintenance of payout on • EV/EBITDA = 5.4 ordinary net income EPS 5,0 4,5 4,0 3,5 3,0 2,5 Average 2,0 1,5 1,0 0,5 0,0 dic-91 dic-92 dic-93 dic-94 dic-95 dic-9
Slide 19: Corporate Responsibility
RESULTS 7. Corporate Responsibility NOTEWORTHY ACTIONS IN 2008 CORPORATE GOVERNANCE Approval of Code of Ethics INTEGRATED CSR SUSTAINABLE MANAGEMENT DEVELOPMENT Implementation of indicators in the Increase in the use of integrated CSR management tool alternative fuels in cement factories EXTERNAL SO
Slide 20: Mr Victor Pastor, Chief Financial Officer
RESULTS Mr Victor Pastor Chief Financial Officer
Slide 21: 2008 Results
RESULTS 2008 Results 1. 2008 Income Statement 2. Cash flow 3. Capital expenditure 4. Finance 5. Business areas 21
Slide 22: 2008 Income statement
RESULTS 1. 2008 Income statement 2008 2007 Change Net sales 14,016.3 13,423.2 +4.4% EBITDA 1,740.8 1,929.9 -9.8% Margin 12.4% 14.4% Depreciation and amortisation -724.0 -684.1 +5.8% Operating provisions -70.3 13.4 N/A EBIT 946.5 1,259.2 -24.8% Margin 6.8% 9.4% Financial income -484.6 -389.5 +24.4% E
Slide 23: Income statement: revenues by business area
RESULTS 1. 2008 Income statement REVENUES BY BUSINESS AREA 2008 2007 Change Construction 7,744.0 6,922.2 +11.9% Environmental services 3,633.3 3,464.7 +4.9% Versia 897.4 923.2 -2.8% Cement 1,425.1 1,790.8 -20.4% Realia 402.3 472.4 -14.8% Others* -85.8 -150.1 -42.8% Total 14,016.3 13,423.2 +4.4% Envi
Slide 24: Income statement: EBITDA by business area
RESULTS 1. 2008 Income statement EBITDA BY BUSINESS AREA 2008 2007 Change Construction 463.1 373.8 +23.9% Environmental services 606.0 660.8 -8.3% Versia 74.8 91.9 -18.7% Cement 417.3 581.7 -28.3% Realia 131.1 210.8 -37.8% Others* 48.5 10.9 N/A Total 1,740.8 1,929.9 -9.8% Other 3% Environ. Construc.
Slide 25: Cash flow: 2008 operating cash flow
RESULTS 2. Cash flow 2008 OPERATING CASH FLOW (M€) 1,849.4 459.4 1,105.3 284.7 -11.7% vs. 2007 Funds Change in Other items Operating from operations working capital (Taxes, cash flow dividends, etc.) 205.6 Environmental Services 191.5 Construction 62.3 Others 25
Slide 26: Cash flow: performance of working capital
RESULTS 2. Cash flow Change in 2008 PERFORMANCE OF WORKING CAPITAL (M€) working capital 918.9 Environmental Services 801.6 195.3 (+10.3 M€ in 4Q08) -459.5M€ 128.6 in 4Q08 Construction (-299.1 M€ in 4Q08) 459.4 Others (-170.7 M€ in 4Q08) 405.5 490.6 205.6 221.3 75.6 267.5 191.5 233.0 146.6 6
Slide 27: Cash flow from business activity
RESULTS 2. Cash flow 2008 CASH FLOW FROM BUSINESS ACTIVITY (M€) 1,105.3 628.4 873.4 - 396.5 Operating Maintenance Investment Cash flow cash flow capex capex from business activities Infrastructure* 27% Cement 19% Environmental Services 18% Energy 16% Other 20% * Includes infrastructure concessions 2
Slide 28: Capital expenditure by business area
RESULTS 3. Capital expenditure BY BUSINESS AREA 2008 2007 Construction 156.9 178.0 Environmental services 628.8 516.5 Versia 43.0 153.4 Cement 295.7 294.8 Others* 377.4 -51.5 Total 1,501.8 1,091.2 Construction 10% Environ. Services 42% Other 25% Cement Versia 20% 3% *Others includes the sale of Real
Slide 29: Finance: debt by business area
RESULTS 4. Finance BREAKDOWN OF DEBT BY BUSINESS AREA 2008 2007 Construction 119.8 272.0 Environmental services 4,076.4 3,792.8 Versia 509.4 521.6 Cement 1,762.2 1,520.5 Other 432.8 1.669.2 Total 6,900.6 7,776.1 Construction Other 2% 6% Corporate; 77% Without Cement recourse; 23% 26% Environ. Servic
Slide 30: Finance: breakdown of debt 2008
RESULTS 4. Finance BREAKDOWN OF DEBT 2008 (M€) 930.4 7,776.1 2,202.2 1,105.3 1,501.8 6,900.6 2007 Net Operating Investment Financing Change in 2008 Net debt cash flow cash flow cash flow consolidation debt scope etc. Net debt = 3.68* With recourse 77% EBITDA Without recourse 23% * With recourse. 30
Slide 31: Finance: structure and maturity
RESULTS 4. Finance STRUCTURE AND MATURITY (Dec. 08) By type By currency Sterling Dollar Czech koruna Fixed Variable 6% 14% 4% 43% 57% Euro 77% Maturities calendar Long-term 76% Short-term 24% 26% 21% 16% 7% 7% Dec. 09 Dec. 10 Dec. 11 Dec. 12 Dec. 13 > Dec. 13 31
Slide 32: Business areas: Construction
RESULTS 5. Business areas: Construction 2008 2007 Change Revenues 7,744.0 6,922.2 +11.9% EBITDA 463.1 373.8 +23.9% EBITDA margin 6,0% 5,4% EBIT 325.4 262.3 +24.1% EBIT margin 4,2% 3,8% Operating cash flow 178.4 -30.4 N/A Investment cash flow -156.9 -178.0 -11.9% Net debt -119.8 -272.0 -56.0% Busines
Slide 33: Business areas: Environmental Services
RESULTS 5. Business areas: Environmental Services 2008 2007 Change Revenues 3,633.3 3,464.7 +4.9% EBITDA 606.0 660.8 -8.3% EBITDA margin 16.7% 19.1% EBIT 298.6 342.0 -12.7% EBIT margin 8.2% 9.9% Operating cash flow 360.3 578.2 -37.7% Investment cash flow -628.8 -516.5 +21.7% Net debt -4,076.4 -3,792
Slide 34: Business areas: Versia
RESULTS 5. Business areas: Versia 2008 2007 Change Revenues 897.4 923.2 -2.8% EBITDA 74.8 91.9 -18.7% EBITDA margin 8.3% 10.0% EBIT -6.1 40.6 -114.9% EBIT margin -0.7% 4.4% Operating cash flow 83.5 172.4 -51.6% Investment cash flow -43.0 -153.4 -72.0% Net debt -509.4 -521.6 -2.3% Breakdown of revenu
Slide 35: Business areas: Cement
RESULTS 5. Business areas: Cement 2008 2007 Change Revenues 1,425.1 1,790.8 -20.4% EBITDA 417.3 581.7 -28.3% EBITDA margin 29.3% 32.5% EBIT 235.6 412.3 -42.9% EBIT margin 16.5% 23.0% Operating cash flow 359.7 454.5 -20.9% Investment cash flow -295.7 -294.8 +0.3% Net debt -1,762.2 -1,520.5 +15.8% Bre
Slide 36: Business areas: Renewable energy
RESULTS 5. Business areas: Renewable energy Capacity Investment Location (MW) % of Total (M€) Status 14 farms Spain 422 87% 760 Operational 2 farms Spain 45 9% 45 Under development Wind 467 66% 805 2 farms Spain 20 4% 140 Operational Photovoltaic 20 4% 140 Total 487 100% 945 Tariff scheme Wind
Slide 37: Business areas: Infrastructure concessions
RESULTS 5. Business areas: Infrastructure concessions ¾ Equity invested attributable to FCC in transport infrastructure concessions reached 546.7 million euro on 31st December 2008 CONCESSSION TYPE BREAKDOWN Buildings 1% Airports 2% Ports 3% Road Railways 80% 14% ¾ Backlog: 39 concessions • 23 highw
Slide 38: Mr Baldomero Falcones, Executive Chairman and CEO
RESULTS R E S U L T S Mr Baldomero Falcones Executive Chairman and CEO
Slide 39: Investing in the future
RESULTS Investing in the future 1. Capital investments 2. Operating efficiency 3. Human resources 4. 09 Objectives 5. Value Creation 39
Slide 40: Capital investments
RESULTS 1. Capital investments ¾ 1.28 B€ invested MOST IMPORTANT ACQUISITIONS (JAN. 08 - JAN. 09) Investment Date Company Location (M€) Area Business Mar. 08 H.R.S and I.P.C USA 123 Environment Industrial waste management Jun. 08 GVI Spain 146 Concessions Chilean toll roads Sept. 08 Sky Global So
Slide 41: Capital investments: Energy
RESULTS 1. Capital investments: Energy ¾ Comprehensive strategy to strengthen Alternative Energies Wind & Energy Waste Solar efficiency RENEWABLE ENERGY ASSETS Attributable capacity Attributable Location (MW) % of total investment (M€) Status FCC stake Zabalgarbi Spain 29 5% 49 Operational 30%
Slide 42: Operating efficiency
RESULTS 2. Operating efficiency PLAN 10 OBJECTIVE 100 M€ in savings in 2010 (5.5% of EBITDA 2007) Estimated 740 M€ increase in equity value PLAN ACTIONS Reduction in Process re- general costs: engineering: purchase control, Integra project, shared consumption services reduction ACTIONS EXECUTED IN 0
Slide 43: Human resources
RESULTS 3. Human resources PLAN 10 OBJECTIVE Talent management ¾ Attract and retain talent ¾ Boost productivity and international management profile ¾ Remuneration Plans linked to share evolution ACTIONS EXECUTED IN 08 Implementation of a remuneration plan based on multi-year objectives (08-10) Supp
Slide 44: 09 Objectives
RESULTS 4. 09 Objectives Change 09/08 REVENUES* >3% >3% EBITDA* >4% >4% * Like for like figures, Realia under equity method 44
Slide 45: 09 Objectives
RESULTS 4. 09 Objectives Consolidate business and margins Strengthen cash flow generation ¾ Implement cost-cutting programme ¾ Enhance growth pass-through into cash Preserve financial solidity ¾ Controlling investment and return on capex Generating shareholder value ¾ Maintaining pay-out ratio 45
Slide 46: Sustainability Indexes
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Fomento de Construcciones y Contratas, S.A. (FCC) — FY2008 Earnings Presentation on 6ix