investor presentation - mota-engil...7 key highlights record turnover €2,818 mn record backlog...
TRANSCRIPT
March 2019
Investor Presentation
A World of Inspiration
2 Index
01Snapshot
Page 3
04
Appendix
Page 30
02Results Overview
Page 7
03Regional Segments
Page 18
EuropeAfricaLatin America
Mota & Cia was founded in 1946 by Mr. Manuel António da Mota In Portugal but with operations only in Angola
The company won its first contract in Portugal in 1975
In 1987 Mota & Cia become listed in Portuguese stock exchange
In 2000, the Mota Family acquired Engil, merged Mota & Cia and Engil and became leader in Portugal not only in construction butalso in waste management
In the last 15 years Mota-Engil has grown more than nine times outside Portugal with Africa and Latam as the main focus on theinternationalisation strategy
Leader in Portugal | European Top 30
Market Cap: €533 mn (5th March 2019)
Main Shareholders: Mota Family (65%) / Norges Bank (3,6%) / Mutima Capital (3%) / Cobas (2,08%) / Az Valor (2,04%)
3
Snapshot
6 Index
02Results Overview
Page 7
7 Key Highlights
Record Turnover €2,818 mn
Record backlog€5.5 bn
Resilient EBITDA€409 mn (margin 15%)
Net profit €24 mn
Net debt€953 mn (gearing 2.3x)
Capex€287 mn
338
405 409
2016 2017 2018
2,210
2,5972,818
2016 2017 2018
4.4
5.15.5
Dec.16 Dec.17 Dec.18
Europe Africa Latin America
8
P&L (€ mn)
Turnover reached €2,818 mn with all regionspresenting a positive trend
Strong EBITDA margin of 15%, mainly drivenby Africa an Latin America
Net financial results reflect positive foreximpact
Effective tax rate of 31%
Net income improvement was mainly drivenby businesses without minorities
IAS 29 had a negative impact of €7 mn inEBITDA and €15 mn in net income
1The caption “Net monetary position” reflects partially the accounting of Angola as a hyperinflationary economy (IAS 29).
Net income up to €24 mn
2018 2017 YoY 2H18 YoY
Turnover 2,818 2,597 8% 1,567 12%
EBITDA 409 405 1% 246 11%
Margin 15% 16% (1 p.p.) 16% (0 p.p.)
EBIT 202 186 9% 112 22%
Margin 7% 7% 0 p.p. 7% 1 p.p.
Net financial results (57) (102) 44% (52) 6%
Associates 3 3 6% 1 (28%)
Net monetary position1 (14) 3 n.m. (14) n.m.
EBT 135 90 50% 62 (61%)
Net income 93 61 52% 52 (139%)
Attributable to:
Non-controlling interests 70 60 17% 35 38%
Group 24 2 n.m. 18 n.m.
8
9
EBITDA with continued growth reaching €409 mn
P&L breakdown (€ mn)
Europe turnover reflects stable activity,notwithstanding lower profitability
Africa 2H18 activity showed a strongacceleration, a trend that is expected tocontinue in 2019
Africa EBITDA margin increased to 21% (up2p.p. YoY) with a balanced contribution fromthe main markets
Turnover in Latin America benefited from goodproject execution pace which led to a doubledigit growth (13% YoY) with increase in EBITDAmargin
2018 2017 YoY 2H18 YoY
Turnover 2,818 2,597 8% 1,567 12%
Europe 856 828 3% 450 1%
Africa 908 860 5% 546 7%
Latin America 1,084 960 13% 597 22%
Other and intercompany (29) (51) 42% (27) 44%
EBITDA 409 405 1% 246 11%
Margin 15% 16% (1 p.p.) 16% (0 p.p.)
Europe 72 141 (49%) 25 (74%)
Margin 8% 17% (9 p.p.) 6% (16 p.p.)
Africa 194 164 18% 111 30%
Margin 21% 19% 2 p.p. 20% 3 p.p.
Latin America 140 109 28% 98 19%
Margin 13% 11% 2 p.p. 16% (0 p.p.)
Other and intercompany 3 (10) n.m. (2) 77%
9
10
Backlog by regionTotal backlog evolution (€ mn)
Backlog up €327 mn in 2018 to €5.5 bn, of which 87% relates to the construction activity
E&C backlog to sales1 ratio of 2.1x
Strong commercial perspectives for 2019.
1Ratio calculated as follows: E&C Backlog/E&C Turnover.
Record backlog of €5.5 bn
Africa50%
Europe23%
Latin America
27%4,422
5,1385,465
3,779
4,305
4,777
1,7682,046
2,299
2016 2017 2018
Total BacklogE&C BacklogE&C Turnover
E&C backlog by segment
Roads, infrastructures
and others58%
Civil Construction
21%
Oil&Gasand Power
6%
Mining15%
10
11
Major construction projects currently in backlog
1Selection of E&C projects above €100 mn.
Project 1 Range (€ mn) Country SegmentExp. Year of
Completion
Vale Mining Moatize > 250 Mozambique Mining 2022
Gran Canal highway > 250 Mexico Roads 2019
Classes: G1 Caribbean; G2 Eje Cafetero - Pacific; G3 Antioquia - Eje Cafetero - Pacific > 250 Colombia Civil Construction 2020
Las Bambas dam (phase 4 under execution) [200;250] Peru Power 2020
Cardel-Poza Rica highway [200;250] Mexico Roads 2019
Tuxpan-Tampico highway [200;250] Mexico Roads 2019
BR-381 highway dualisation (section 3.1 and section 7) [200;250] Brazil Roads 2020
Siguiri gold mine [150;200[ Guinea Conakry Mining 2022
General Hospital of Cabinda [100;150[ Angola Civil Construction 2020
Capacity Improvement Kampala Northern Bypass [100;150[ Uganda Roads 2021
Fourways Mall Extensions [100;150[ South Africa Civil Construction 2019
Bordo Poniente [100;150[ MexicoUrban
Infrastructures2020
Offshore platform - operational unit Rio Section B [100;150[ Brazil Oil&Gas 2022
11
Net debt1 and EBITDA evolution (€ Mn)
Total net debt EBITDA
12
Committed to decrease net debt/EBITDA
Net debt/EBITDA
1Excludes leasing and factoring. Sovereign Angolan bonds considered as “cash and cash equivalents”.
Despite the increase of activity, net debt and gearing showed a decreasing trend
Working capital/Turnover ratio at a very comfortable level (7%)
Focus on structuring the contracts with the aim of minimising the receivables payment period and credit risk exposure
Establishment of agreements and cooperation with multilaterals, ECAs and pre-payments (for large contracts) are key toreach that goal
Working capital evolution
1 455
1 159
877 953
367 338405 409
4.0x
3,4x
2,2x2,3x
,x
,5x
1,x
1,5x
2,x
2,5x
3,x
3,5x
4,x
4,5x
-200
300
800
1300
1800
2300
2015 2016 2017 2018
475
367
177 199
20%17%
7% 7%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
125
225
325
425
525
Dec.15 Dec.16 Dec.17 Dec.18
Working capital (€ mn) Working capital/Sales
Committed to decrease net debt
13
5740
13
101
21
45
9
Europe Africa Latin America Others
78
186
22
1
8250
101
47
104
50
287
147
2018 2017
Total capex of €287 mn
Net capex (€ mn) Capex in 2018 by region (€ mn)
Africa accounted for 65% of the total capex, including c.€101 mn of equipment related with long-term mining projects
E&S capex of €104 mn was mainly channelled to EGF, Vista Waste (Angola) and the waste activity in Ivory Coast
Relevant part of the capex was financed through leasing, which accounted for c.€140 mn
Maintenance capex stood at 4% of turnover
1E&S includes the energy business.
Maintenance GrowthE&C Capex E&S Capex1E&C Capex – long term
contracts E&C Capex – long term contracts
13
14
877953
409
22
4157
110
76
178
0
200
400
600
800
1000
1200
Net debt Dec.17 EBITDA Changes inworking capital
Corporate tax Net financials Maintenancecapex
Growth capex(excludes leasing)
Changes in m/lterm & perim.
Net debt Dec.18
Free cash flow (€ mn)
Solid CFFO of €346 mn
1Net debt considers Angola’s sovereign bonds denominated in US$ and US$ linked as “cash and cash equivalents” which amounted to €152 mn in December 2018 and €156 mn in December 2017 and Malawi’s sovereign bonds amounting to €14 mn in December 2018.
CFFO €346 mn Mainly non-cash forex items(included in net financials)
11
14
15
2.5x 2.5x2.4x
2.1x 2.3x
5.8% 5.6% 5.6%
5.1% 5.0%
Dec15 Dec16 Dec17 Jun18 Dec18
619
190
199
283186 169
112 60
190
373
Liquidityposition
1 year 2 years 3 years 4 years 5 years > 5 years
Already refinanced or to be refinanced shortly
Stable gearing at 2.3x
Net debt1 of €953 mn
Leasing amounted to €266 mn, up €101 mn in 2018, of which €97 mn related to long-term mining contracts
Cost of debt of 5.0%, down from 5.6% in December 2017
Average debt life of 2.3 years, impacted by the successful €110 mn bond issue in November 2018
The net debt increase amounted to c.40% of the capex not financed through leasing
Gross debt maturity2, December 2018 (€ mn) Cost of debt and gearing3
Non-revolving Revolving1Excluding leasing and factoring amounting to €266 mn and €120 mn, respectively, and including €152 mn of Angolan sovereign bonds and €14 mn of Malawi’s sovereign bonds; 2Excluding leasing andfactoring; 3Net debt/EBITDA.
809
Cash&
Cash equiv.
Undrawncreditlines
762
15
16
Guidance and strategic targets Achievements 2018
Top line growth
Resilient EBITDA margin
Working capital management focus
Backlog > €5 bn
Capital structure optimisation
Turnover up 8% YoY
EBITDA margin at 15%
Record backlog of €5.5 bn
Working capital/sales at 7%
Net debt/EBITDA of 2.3 x
Delivering our commitments
16
17 Index
03Regional Segments
Page 18
EuropeAfricaLatin America
Europe
Portugal
Spain
Poland
Czech Republic
Ireland
United Kingdom
Highlights 2018
06Countries
856M€
Turnover
1,226M€
Backlog
2016 2017 2018
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
2016 2017 2018
2016 2017 2018
Turnover (€ mn)
19
841
856
CAGR +1%
802
1,226CAGR +24%
Backlog1 (€ mn)
11172
CAGR -19%
13%
EBITDA (€ mn) and margin (%)
1Contracts already signed and financed. Excludes future revenues from concessions (highways and EGF).
Railway Plan 2020: Total €2.7 bn
European Funds Committed
Sines/Badajoz (Biggest contract)
To be completed in 2022
New Lisbon International Airport: Expansion of the existinginfrastructure and construction of a new airport in the south margin(completed in 2022)
CAPEX: €1.15 bn (excluding access roads)
Private Investment (ANA Aeroportos/Vinci)
New Lisbon Hospital: PPP (30 years) - c.€335 mn
New Madeira Hospital (€205 mn) and Évora (€150 mn)
Total Investments: €1Bn. Projects to be completed in 2023
Lisbon (c.€310 mn) and Oporto (c.€210 mn) metro expansion
Both to be completed in 2023
Positive Outlook por the upcoming years in Portugal
EGF Plan of Investment for 2019-2021: €195 mn
Regulated business (RAB: €319mn and ROA: 5,29%)
8%
Key-Figures and PerspectivesKey figures and Outlook
20
20
Flagship projects - Europe
Rockbuilding, Portugal Nysa bypass, PolandHighway S19, Poland
Vasco da Gama Bridge, Portugal Alto do Lindoso Dam, Portugal Section of expressway S17, Poland
Luz hospital expansion, Portugal EDP headquarters, Portugal Pinhal Interior highways, Portugal
Flagship projects
AfricaAngola
Mozambique
Malawi
South Africa
Cape Verde
São Tomé and Príncipe
Zambia
Zimbabwe
Uganda
Rwanda
Tanzania
Guinea Conakry
Cameroon
Ivory Coast
Nigeria
Highlights 2018
15Countries
908M€
Turnover
2,758M€
Backlog
22
Angola31%
Mozambique, Malawi and Ivory Coast
39%
Other30%
Record backlog and positive commercial perspetives
Backlog of €2.8 bn of which 90% in hard currency or hardcurrency linked
Pure private clients account for c.40% of total backlog
Angola’s strong backlog of c.€850 mn
Long-term mining (Mozambique and Guinea Conakry) contractsassure predictable activity and cash flow
2019 will be the first full year of activity of the waste contractoperation in Ivory Coast (seven year contract worth €320 mn)
Several projects in the pipeline with awards expected for 2019,namely in Mozambique and Angola
Backlog by country
1
1Namely Guinea Conakry and Uganda. 22
2016 2017 2018
2016 2017 2018
2016 2017 2018
Turnover (€ mn)
Key-Figures and Perspectives
23
708
908CAGR +13%
1,706
2,758CAGR +27%
182194
26%
21%
CAGR 3%
EBITDA (€ mn) and margin (%)
Backlog1 (€ mn)
1Contracts already signed and financed.
Good Perspectives supported in an All Time High Value of Backlog
All-Time High Value of Backlog: €2.8 Bn (2018)
Long-Term Contracts in Mining Segment: Mozambique (Vale) and Guinea (Ashanti Gold)
Ivory Coast: 7 years Contract (Waste Management) starting in Nov. 2018
Positive and regular margins in the Region (Ebitda: 20%)
Long presence in Africa (since 1946) and with fully vertically integrated business, supported by astrong installed asset base
Leadership in markets such as Angola, Mozambique and Malawi
Focus on large infrastructure projects
Recent expansion to new markets in sub-Saharan region and in Environment (Waste Management)
Opportunities for Public Clients (Government / Programmes financed by multilaterals or ECA Lines)
Private investments in perspective namely in Oil&Gas (LNG Project in Mozambique), Mining,Transport and Logistics)
Key figures and Outlook
Nacala Corridor Project, Malawi
Luanda Bay rehabilitation, Angola
Vale’s mining contract, Mozambique
24
Flagship projects - Africa
Siguiri’s gold mining works, Guinea Conakry
Golfe Camama road, Angola
Calueque dam, Angola Great East road, Zambia
Cabinda’s hospital, Angola
Ishaka-Katunguru road rehabilitation, Uganda
Flagship projects
Latin America
Mexico
Peru
Brazil
Colombia
Chile
Dominican Republic
Paraguay
Aruba
Highlights 2018
08Countries
1,084M€
Turnover
1.481M€
Backlog
26
Strong performance
Backlog of €1.5 bn spread among six countries withMexico and Brazil representing c.55%
Entry in 2018 in the Oil&Gas segment in Brazil withcontracts worth c.€150 mn with Petrobras
Expected higher contribution from Colombia relatedto a significant schools construction contract
Expected monetisation of assets in Mexico relatedwith the CERPI fund
The pipeline is attractive and awards are expected totake place in several countries such as, Brazil andColombia
Energy business expected to continue delivering withstrong profitability
Gran Canal road project, Mexico
26
27
2016 2017 2018
2016 2017 2018
2016 2017 2018
27
Turnover (€ mn)
727
1,084CAGR +22%
1,914
1,481
CAGR -12%
Backlog1 (€ mn)
EBITDA (€ mn) and margin (%)
140
44
CAGR +23%
13%
6%
1Contracts already signed and financed. Excludes future revenues from concessions (highways).
A Regional Player and a Recognized Brand in Latam
All-Time High Value of Turnover: €1.084 mn (2018)
Resilient margin of 13%
Comfortable level of Backlog: €1.5 Bn (1.5 years)
Regional Player (7th position in the Ranking: CLA 50)
Presence in the Region since 1998 (Peru)
Mexico: Biggest market with presence in E&C, E&S, concessions and Energy (1st private operator)
Partnerships with local companies (Ex: ME Mexico and ECB), including in the financial front (CERPI)
Concession investment as a promoter of construction, with an asset rotation policy focus
Public investment to be fueled by new Infrastructure Plans in the near future
Mota-Engil know-how of more than 20 years is a competitive advantage to leverage on PPP andAPP opportunities
Key-Figures and PerspectivesKey figures and Outlook
Perote-Xalapa Project, MexicoCerro Verde mining, Peru
Carajás railway, Brazil
28
Flagship projects - Latin America
Cardel-Poza Rica highway, MexicoTuxpan-Tampico highway, Mexico
Gran-Canal highway, Mexico
Rehabilitation center, Colombia
BR 381 road, Brazil
Guadalajara light rail, Mexico
Flagship projects
29 Index
04Appendix
Page 30
30
1946
Incorporation
of Mota &
Companhia in
Angola
1952
Completion
of the first
major project:
Luanda
International
Airport in
Angola
1974
Expansion
into Sub-
Saharan
countries
other than
Angola
1987
IPO of Mota &
Companhia on
the Lisbon
Stock Exchange
2000
Merger of
Mota &
Companhia
and Engil
2006
Enters the
logistics
sector
through the
acquisition
of the Tertir
Group in
Portugal
2012
Awarded two
sections of
the Nacala
Corridor
railway project
in Malawi
2013
Announced
intention to
spin-off and
list its African
business
1952
Incorporation of
Engil in
Portugal
1976
Mota &
Companhia
begins
operations in
Portugal
1994
Mota &
Companhia
diversifies its
service
offering
2005
Lists on
Euronext
Lisbon’s main
share index
Mota-Engil
SGPS
completes
€110 Mn ABB
2012
Restructures
organisational
model to
geographic
business
segments
2013
€175 Mn listed
medium-term
bonds issued
2014
Acquisition of EGF
Mota-Engil SGPS
completes €160
Mn ABB
2016
Ports & Logistics
businesses sale
Indaqua sale
Agreement to sell
Ascendi’s assets
2015
De-listing of
MEAFR and
ME SGPS
share capital
increase
Enters the
energy
production
sector
through Fenix
(Mexico)
2017
First closing
of Ascendi’s
assets sale
to Ardian
2018
Start of Operations in
Waste Management
in Ivory Coast
Enter in Oil&Gas
Maintenance in Brazil
€110 Mn listed
medium-term bonds
issued
Mota-Engil past main milestones
31
Gonçalo Moura Martins
CEO
31
Degree in Law
With Mota-Engil since 1990, holding several management positions
José Pedro Freitas
CFO
Degree in Economics
Since 2009 in senior positions in the Group
Carlos Mota Santos
Deputy CEO
Degree in Civil Engineering
With the Group since 2006 in senior positions
Manuel Mota
CEO Europe & Africa
Degree in Civil Engineering
More than 10 years of experience in the Group, namely in Central Europe and in Africa’s division
Ismael Gaspar
CEO ME Capital
Degree in Civil Engineering
With the Group for 30 years
João Parreira
CEO Latin America
Degree in Law
Working for Mota-Engil since 2008, being the CEO of LatAm region since 2012
Eduardo Pimentel
HR / IT and Resources
Degree in Civil Engineering
Working in the Group for 25 years
Luís Silva
Strategic Planning and Control
Degree in Economics
With the Group for 27 years
Executive Committee
32
Mota Family (FM - Sociedade de Controlo) has an equity stake of 65% and a long term commitment and fully supports strategy
Other shareholders with qualified positions: Norges Bank (3,6%), Mutima Capital (3%), Cobas (2,08%) and Az Valor (2,04%)
Treasury shares of 2.6% of share capital
Market capitalization: €533 Mn (5 March 2019)
Payout policy: 50%-75%
1Source: Bloomberg.
Ten year share price performance1 (€)
32
Ten year relative return1
-100%
-50%
0%
50%
100%
150%
Mar
/09
Aug
/09
Jan
/10
Jun
/10
No
v/10
Apr
/11
Sep
/11
Feb
/12
Jul/
12
De
c/12
May
/13
Oct
/13
Mar
/14
Aug
/14
Jan
/15
Jun
/15
No
v/15
Apr
/16
Sep
/16
Feb
/17
Jul/
17
De
c/17
May
/18
Oct
/18
Mar
/19
Mota Engil PSI20 Index SXOP Index
0
2
4
6
8
Mar
/09
Mar
/10
Mar
/11
Mar
/12
Mar
/13
Mar
/14
Mar
/15
Mar
-16
Mar
-17
Mar
/18
Mar
/19
Mota-Engil’s share
33
Balance sheet (€ mn)
1Net debt considers Angola’s and Malawi’s sovereign bonds as “cash and cash equivalents”.
Balance sheet
Dec.18 Jun.18 Dec.17Dec.18-
Dec.17
Fixed assets 1,298 1,251 1,263 35
Financial investments 294 270 233 61
Long term receivables 117 121 140 (23)
Non-current Assets held for sale (net) 100 92 91 9
Working capital 199 221 177 22
2,009 1,955 1,905 105
Equity 440 490 596 (155)
Provisions 108 95 96 12
Long term payables 508 369 335 172
Net debt 1 953 1,002 877 76
2,009 1,955 1,905 105
33
34
Europe performance breakdown
Key financials (€ mn)
2018 2017 YoY 2H18 YoY
Turnover 856 828 3% 450 1%
E&C 571 538 6% 341 15%
E&S 298 296 1% 145 14%
Other, elim. and interc. (13) (7) (81%) (11) (87%)
EBITDA 72 141 (49%) 25 (74%)
Margin 8% 17% (9 p.p.) 6% (16 p.p.)
E&C (10) 46 n.m. (11) n.m.
Margin (2%) 9% (11 p.p.) (3%) (21 p.p.)
E&S 84 97 (13%) 37 (19%)
Margin 28% 33% (5 p.p.) 26% (10 p.p.)
Other, elim. and interc. (2) (2) (2%) (1) (28%)
34
35
1995 - Start of operations (waste collection)
2008 - Beginning of internationalisation (to Angola)
2014 - Acquisition of EGF (waste management)
2018 - Start of operations of the waste collection (€320 mn)
and the waste management (€140 mn) contracts in Ivory Coast
Key figures (2018)
Turnover €343 mn
EBITDA €100 mn
18.5 million clients
Milestones
Waste business: relevant and stable contribution from all regions
0
50
100
150
200
250
300
350
400
2014 2015 2016 2017 2018
Turnover (€ mn) EBITDA (€ mn)
8 countries
AngolaBrazilCape VerdeIvory CoastMexicoMozambiqueOmanPortugal
35
36
Disclaimer
This presentation used sources deemed credible and reliable but is not guaranteed as to accuracy or completeness. It also contains
forward looking information that expresses management’s best assessments but might prove inaccurate. The information contained
in this presentation is subject to many factors and uncertainties and therefore subject to change without notice. The company
declines any responsibility to update, revise or correct any of the information hereby contained. This presentation does not constitute
an offer or invitation to purchase securities of Mota-Engil.
36
PEDRO ARRAIS
Director, Head of Investor Relations
MARIA ANUNCIAÇÃO BORREGA
Investor Relations Officer
Rua de Mário Dionísio, 2
2796-957 Linda-A-Velha Portugal
Tel. +351-21-415-8671
www.mota-engil.com
linkedin.com/company/mota-engil
www.youtube.com/motaengilsgps
www.facebook.com/motaengil