Fomento de Construcciones y Contratas, S.A. · BME:FCC
Fomento de Construcciones y Contratas — FY2007 Earnings Presentation
36 slides from Fomento de Construcciones y Contratas's earnings presentation, February 2008
Slide 1: 2007 Results
2007 * Dac ce Snvesting in the future Since day one »» ere i ww
Slide 2: Index
Index 1. HIGHLIGHTS 2. 2007 RESULTS 3. 2008 ESTIMATES 2007 Results 2
Slide 3: D. Baldomero Falcones, Executive Vice-Chairman and CEO
D. Baldomero Falcones Executive Vice-Chairman and CEO 2007 Results 3
Slide 4: Key Facts
Key Facts 1. Solid growth in 2007 2. Diversification 3. Leadership 4. International Expansion 5. Execution of Strategic Plan 6. Non-cyclical business 7. Financial Strength 8. Stable shareholders´ structure 9. Attractive valuation 10. Corporate Responsibility 2007 Results 4
Slide 5: Solid growth in results
1. Solid growth in results Net Sales International Net Sales 13,881 4,996 9,481 1,718 % ++4466% 3 fofoldld xx3 2006 2007 2006 2007 EBITDA Net Profit 2,042 738 1,387 536 % % ++4477% ++3388% 2006 2007 2006 2007 2007 Results 5
Slide 6: Strong growth in results
1. Strong growth in results 2007 2006 Chg. Net Sales 13,881 9,481 46% Growth EBITDA 2,042 1,387 47% Net Profit 738 536 38% Profitability EBITDA Margin 14.7% 14.6% Operating cash flow 1,261 1,159 9% Cash Generation Investment cash flow 1,087 4,811 -77% Total Net Debt 7,967 5,204 53% Strength Net Debt
Slide 7: Diversification
2. Diversification IN MARKETS IN ACTIVITIES Real Estate International United 4% 36% Kingdom Cement 18% 13% Rest of Europe 10% U.S.A. Services Spain Central and 5% 64% Other markets 33% Construction Eastern Europe 55% 12% 50% 7,0% 29,0% 24,3% 36,0% 41,2% 36,4% IN MARKETS AND ACTIVITIES 58,8% 63,6% 71
Slide 8: Leadership
3. Leadership Leader in Spain WASTE Leader in the United Kingdom MANAGEMENT Third in Europe Second in Spain CONSTRUCTION Second in Austria Third in Eastern Europe WATER Second in Spain MANAGEMENT Fifth position in the world INDUSTRIAL WASTE Leader in Spain MANAGEMENT Second in the United States TOLL
Slide 9: International expansion
4. International expansion • International revenues: • Have increased three-fold • Attain 5 billion euro • Represent 36% of Group activity 4.996 36,0% 18,0% 1.718 10,3% 9,9% 651 703 2004 2005 2006 2007 x8 fold 2007 Results 9
Slide 10: International expansion
4. International expansion • Strong international growth platforms UNITED UNITED STATES KINGDOM CENTRAL AND EASTERN EUROPE Bosnia HIDROCARBON SERVICES 2007 Results 10
Slide 11: The 2005-07 Plan accomplished
5. The 2005 – 07 Plan accomplished • Strategic Plan 2005-2007: all targets beaten Net Sales International Net Sales 13,881 30% - 35% 36% 10,000- 12,000 6,349 x2.2 x3.6 9 10% 9 2004 2007 Target 2007 2004 2007 Target 2007 EBITDA Net Debt / EBITDA <3.00 2,042 2.71 1,200- 1,500 842 x2.4 9 0.30 9 2004 20
Slide 12: Non-cyclical business
6. Non-cyclical business Net Sales in million euro • FCC’s Civil engineering 4,422 Construction Non-residential building 1,721 non-cyclical Urban sanitation 1,446 revenues Services Water 828 reach 12.323 International 1,279 billion euro, Industrial Waste 200 Logistics 341 89% of the Handling 258 tot
Slide 13: Non-cyclical business
6. Non-cyclical business • One of the largest Waste and Water management companies in the world Leading Company in Waste in U.K. Third Water management company in the Czech Rep. Second Industrial Waste LEADING COMPANY IN WASTE AND WATER Leading company in management company in the U.S. Waste managem
Slide 14: Financial strength
7. Financial strength • Strong balance sheet • Net Debt / EBITDA = 2.71 times • Financial leverage = 52.9% • Financing closings in 2007 • Positive financial structure Fixed rate Long term Non-recourse Short Fixed Term; Non- Rate; 43% 25% recourse; 39% Variable Corporate; Rate; 57% Long 61% Term; 75%
Slide 15: Stable Shareholders
8. Stable Shareholders 15,1% Holding Spanish company Minorities 6,4% Foreign Institutional 52,5% 10,4% Spanish Institutional 10,8% Board members and Managers (ex B-98) Treasury stock 0,3% 4,6% Free float 32.8% 2007 Results 15
Slide 16: Attractive valuation
9. Attractive valuation • Market Ratios: • PER = 7.3 times • EV / EBITDA = 6.6 times* • Atractive dividend policy: • Payout ratio over 50% ordinary net profit. • Increase in 2007: +27% • High dividend yield: 5.2%* *Share price at 41.78€ (28/02/08) 2007 Results 16
Slide 17: Corporate Responsibility
10. Corporate Responsibility COMMITTED TO OUR RESPONSIBILITY Activities Employees Committments Recycling From 76,056 CSR Master Plan Water saving to 96,178 Group and Area Committees and reports Construct. & Managem. United Nations Global Compact Of infrastructures Initiatives: Green Centers, Volunte
Slide 18: D. Víctor Pastor, CFO
D. Víctor Pastor CFO 2007 Results 18
Slide 19: Income Statement
Income Statement 2007 2006 Chg. ) Net Sales 13,880.6 9,480.9 46.4% ) EBITDA 2,042.1 1,387.3 47.2% Margin 14.7% 14.6% Depreciation and amortisation -725.7 -474.5 52.9% Allocation/reversal of operating provisions -17.1 -31.5 -45.7% ) EBIT 1,299.4 881.3 47.4% Margin 9.4% 9.3% Financial income -407.3 -8
Slide 20: Net Sales by business areas
Net Sales by business areas 2007 2006 Chg. Construction 6,957.0 4,395.3 58.3% Environmental Services 3,752.7 2,835.6 32.3% Versia 960.8 867.1 10.8% Cement 1,888.7 1,466.6 28.8% Realia 472.4 N/A N/A Other -151.0 -83.7 80.4% Total 13,880.6 9,480.9 46.4% Construction Services 50% 27% Versia 7% Cement 1
Slide 21: EBITDA by business areas
EBITDA by business areas 2007 2006 Chg. Construction 357.7 268.6 33.2% Environmental Services 739.8 501.4 47.5% Versia 95.6 104.2 -8.2% Cement 620.8 485.3 27.9% Realia 210.8 N/A N/A Other 17.4 27.8 -37.4% Total 2,042.1 1,387.3 47.2% Construction Services 18% 36% Realia 10% Versia Cement 5% 31% 2007
Slide 22: Cash flow
Cash flow 2007 2006 Chg. ) Operating cash flow 1,261 1,159 9% Funds from operations 2,033 1,396 46% Increase/Decrease in working capital -397 14 N/A Other items (taxes, dividends,etc.) -375 -251 49% ) Investment cash flow -1,087 -4,811 -77% ) Cash flow from business operations 174 -3,652 N/A ) Finan
Slide 23: Investment cash flow by areas
Investment cash flow by areas 2007 2006 Chg. Construction -117.4 -640.6 -81.7% Environ. Services -588.8 -2,549.6 -76.9% Versia -140.3 -165.2 -15.1% Cement -297.4 -1,504.6 -80.2% Realia -130.4 N/A N/A Other 187.2 49.5 278.2% Total -1,087.1 -4,810.5 -77.4% Construction 9% Services 45% Realia 12% Cemen
Slide 24: Operating cash flow by areas
Operating cash flow by areas 2007 2006 Chg. Construction -44.1 310.5 N/A Environ. Services 609.1 456.1 33.5% Versia 158.5 41.6 281.0% Cement 449.4 322.0 39.6% Realia 167.7 N/A N/A Other -79.1 28.8 N/A Total 1,261.4 1,159.0 8.8% Services Realia 43% 15% Cement Versia 31% 11% 2007 Results 24
Slide 25: Debt by areas
Debt by areas 2007 2006 Chg. Construction -334.1 -169.2 97.5% Environ. Services -3,910.7 -3,655.7 7.0% Versia -517.9 -516.8 0.2% Cement -1,530.5 -1,474.4 3.8% Realia -1,930.3 N/A N/A Other 256.2 612.4 -58.2% Total -7,967.3 -5,203.7 53.1% Construction 4% Services Realia 48% 23% Cement 19% Versia 6% 2
Slide 26: Debt position
Debt position Interest rate Parent recourse Fix rate; 43% Non recourse; 39% Variable Corporate; rate; 57% 61% Currencies Maturity 36% US dollars Other 3% 1% Czech Crona 25% 3% 12% 9% 11% Sterling Pounds 7% 14% Euro 79% 2008 2009 2010 2011 2012 > 2012 2007 Results 26
Slide 27: Construction
Construction 2007 2006 Chg. Net Sales 6,957 4,395 58% EBITDA 358 269 33% Margin EBITDA 5.1% 6.1% EBIT 258 241 7% Margin EBIT 3.7% 5.5% Operating CF -44 311 N/A Investment CF -117 -641 -82% Net Debt -334 -169 97% Sales Sales Other 11,7% 9,5% Res. Building Rest of Europe 9% 21,0% 3% 24,7% Non-res. Bui
Slide 28: Environmental Services
Environmental Services 2007 2006 Chg. Net Sales 3,753 2,836 32% EBITDA 740 501 48% Margin EBITDA 19.7% 17.7% EBIT 377 251 50% Margin EBIT 10.0% 8.8% Operating CF 609 456 34% Investment CF -589 -2,550 -77% Net Debt -3,911 -3,656 7% Sales Sales Other 163 200 11% 828 Indus. Waste 712 Rest of Europe 9%
Slide 29: Long term Concessions
Long term Concessions Example of a 20- year concession 60 40 20 0 -20 -40 Result Cash Flow -60 -80 -100 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 • Cash flow is negative in the first three years due to strong investments and as from the fourt
Slide 30: Versia
Versia 2007 2006 Chg. Net Sales 961 867 11% EBITDA 96 104 -8% Margin EBITDA 10.0% 12.0% EBIT 40 58 -32% Margin EBIT 4.1% 6.7% Operating CF 159 42 281% Investment CF -140 -165 -15% Net Debt -518 -517 0% Sales Sales 122 Other 126 Other U.S.A 9% 72 75 3% 119 136 Parking 185 258 Urban Furn. Handling 334
Slide 31: Cement
Cement 2007 2006 Chg. Net Sales 1,889 1,467 29% EBITDA 621 485 28% Margin EBITDA 32.9% 33.1% EBIT 424 335 27% Margin EBIT 22.4% 22.8% Operating CF 449 322 40% Inversment CF -297 -1,505 -80% Net Debt -1,531 -1,474 4% Sales Sales Aggregate Other Uruguay Mortar4% 2% U.K. 4% 6% 9% Argentina Concrete 15%
Slide 32: Real Estate
Real Estate Realia Torre Picasso Net Sales 752 742 1% 21.8 19.5 11% EBITDA 366 289 27% 18.6 16.3 14% Margin EBITDA 48.7% 39.0% 85.5% 83.4% EBIT 327 267 23% 16.2 14.7 10% Margin EBIT 43.6% 35.9% 74.4% 75.3% Operating CF 213 Investment CF -155 Net Debt -1,930 -1,797 7% Sales Gross Asset Value Res. Res
Slide 33: 2008 Estimates
2008 Estimates D. Baldomero Falcones Executive Vice-Chairman and CEO 2007 Results 33
Slide 34: 2008 Estimates
2008 Estimates REVENUES REVENUES >5% >5% INTERNATIONAL INTERNATIONAL REVENUES REVENUES >10% >10% EBITDA EBITDA >10% >10% NET NET PROFIT PROFIT >10% >10% OPERATING OPERATING CASH CASH FLOW FLOW >15% >15% 2007 Results 34
Slide 35: 2008 Targets
2008 Targets 1. 2008 – 2010 Strategic Plan 2. Cash Flow Generation • Cost reduction program • WCR management 3. Investment in Services and Infrastructures • Profitability objective 4. International activity reinforcement • International subsidiaries integration 5. Generating Value for the shareholde
Slide 36: Value vs. Share price
Value vs. Share price • Strong business evolution • Management involvement in Investor Relations • Strong shareholders´profitability • Payout > 50% • Business visibility • “Investor Day” MAIN MAIN SHAREHOLDER SHAREHOLDER AND AND MANAGEMENT MANAGEMENT CONFIDENCE CONFIDENCE IN IN SHARE SHARE PRICE PRI
Fomento de Construcciones y Contratas, S.A. (FCC) — FY2007 Earnings Presentation on 6ix