Grupo Argos S.a. · BVC:GRUPOARGOS
Grupo Argos — Investor Presentation (June 2018)
35 slides from Grupo Argos's investor presentation, June 2018
Slide 1: Investors Presentation June 2018
Investors Presentation june 2018
Slide 2: Important Note
IMPORTANT NOTE • This presentation contains certain forward-looking information and statements related to GRUPO ARGOS and its subsidiaries that are based on knowledge of current events, expectations and forecasts, circumstances, and assumptions of future events. Many factors could cause the future r
Slide 3: Who We Are: Grupo Argos at a Glance
WHO WE ARE GRUPO ARGOS AT A GLANCE 3 • Only liquid vehicle to invest in infrastructure in Colombia Regions • Strategic focus in Cement, Energy, Road and Airport Concessions 18 • Solid and articulated portfolio with ~ USD 16 billion in AUM Countries • Balanced in regions, currency, and sectors • One
Slide 4: Core Competency: Solid Track Record Building Regional Platforms
CORE COMPETENCY SOLID TRACK RECORD - BUILDING REGIONAL PLATFORMS “Grupo Argos transforms domestic companies into leading regional champions” Setting the stage... ...to expand... …and consolidate market leadership More than 15 structural and bolt-on acquisitions 4 Merger of 8 Colombian in the US alon
Slide 5: Our Portfolio: Balanced Portfolio Focused in Infrastructure
OUR PORTAFOLIO BALANCED PORTFOLIO FOCUSED IN INFRASTRUCTURE Mkt Cap1 Revenue2 EBITDA2 USD 5.9 bn USD 5.0 bn USD 1.4 bn STRATEGIC - In Infrastructure Revenue and Ebitda contribution from Strategic Portfolio Cement Energy Concessions Cement Energy 58.0%3 52.9% 99.8%8 Concessions Revenues: USD 2.9 bn R
Slide 6: Strategic Architect Principles
STRATEGY STRATEGIC ARCHITECT PRINCIPLES SUSTAINABLE GROWTH AND VALUE GENERATION Capital Allocation + High Standards of Corporate Governance + Social Responsibility + Human Talent Management Strategic Financial Corporate Management Asset and Talent Management ✓ Corporate strategy ✓ Mergers, acquisiti
Slide 7: Variable Remuneration Scheme Aligning Shareholders and Companies
STRATEGY VARIABLE REMUNERATION SCHEME OF GRUPO ARGOS MANAGEMENT SEEKS TO ALIGN SHAREHOLDERS AND COMPANIES OBJECTIVES Bonuses for organizational results = Compensation strategy of Grupo Argos that seeks: ▪ Align companies interests with those of shareholder, seeking for the long term sustainability o
Slide 8: Following a Methodology Focused on Profitability
STRATEGY FOLLOWING A METHODOLOGY FOCUSED ON PROFITABILITY Efficient capital allocation Profitability Growth High ✓ Improve performance A Attractiveness of the industry ✓ Invest to grow after skills ✓ Invest to grow ✓ Protect position ✓ Potential improved ✓ Grow selectively market growth ✓ Average pr
Slide 9: History: Growing Dividend Policy
HISTORY WITH A GROWING DIVIDEND POLICY THAT CONFIRMS PROFITABILITY GUIDELINE PORTFOLIO EVOLUTION (COP tn) 1 Power business 2 Split Cementos 3 Concession business Total cement + power + concessions consolidation Argos consolidation STRATEGIC PORTFOLIO 30 Evolution (%) USD 7.6 bn 25 21.1 22.1 100% 19.
Slide 10: Track Record: 2017 Strategy Implementation
TRACK RECORD AND PROVEN TRACK RECORD THAT RESPONDS TO A CLEAR GUIDELINE OF OUR STRATEGY 2017: MARKED BY THE DYNAMISM AND DISCIPLINE IN THE IMPLEMENTATION OF OUR STRATEGY MAXIMIZING PORTFOLIO VALUE ACTIVE MANAGER Profitable Growth Portfolio Profitability Strategic, selective, and profitable Capture S
Slide 11: Track Record: Odinsa Acquisition and Opain Control
TRACK RECORD 1 THAT BEGINS WITH THE CONSOLIDATION OF THE INFRASTRUCTURE PILLAR THROUGH THE ACQUISITION OF ODINSA AND THE CONTROL OF OPAIN El Dorado Airport Between April 2015 and December 2016 Grupo Argos acquired 98.6% of Odinsa through a series of transactions. ODINSA - 99% Of voting rights after
Slide 12: Track Record: Consolidation of Concessions Business
TRACK RECORD 1a FOLLOWED BY A SUCCESSFUL CONSOLIDATION IN THE CONCESSIONS BUSINESS: A CLEAR EXAMPLE OF OUR ROLE AS STRATEGIC ARCHITECTS In Operation Under Construction Santa Marta AKF Pacífico II AKF BTA ADN – Paraguachón Hatovial 60%60% Road Concessions 79% 79% 43% 43% 40% 22% FROM: Road Concession
Slide 13: Track Record: Divestments
TRACK RECORD 2 WITH DIVESTMENTS THAT REAFFIRM OUR COMMITMENT TO EFFICIENTLY MANAGE OUR INVESTMENT PORTFOLIO • Múltiplos Strategic Rational • Múltiplos Multiples • Múltiplos Contribution to the strategy ▪ Fulfillment of investment thesis Change in debt profile Amortization: ▪ Exercise role of active
Slide 14: Track Record: Celsia Transaction and Simplification
TRACK RECORD 3 CELSIA’S TRANSACTION IN LINE WITH OUR CORPORATE STRUCTURE SIMPLIFICATION STRATEGY AND ALLOWS EPSAS´S VALUE RECOGNITION Simplification of the strategic architecture of Grupo Argos CELSIA´S FOLLOW ON • Consolidation of the energy business in a single vehicle • Greater clarity of the hol
Slide 15: Financial Results
FINANCIAL RESULTS STRATEGY THAT HAS TRANSLATED INTO GROWING RESULTS GRUPO ARGOS CONSOLIDATED REVENUES GRUPO ARGOS CONSOLIDATED EBITDA (COP bn) USD 5.0 bn (COP bn) USD 1.4 bn 14,573 16,000 4,500 14,553 3,904 4,000 3,620 12,700 14,000 3,500 12,000 2,635 9,296 3,000 2,225 10,000 7,629 2,500 8,000 1,907
Slide 16: Individual Leverage Indicators
INDIVIDUAL LEVERAGE INDICATOR AT THE INDIVIDUAL LEVEL THAT PROVIDE FLEXIBILITY TO CONTINUE PORTFOLIO GROWTH DEBT LEVERAGE RATIOS COP bn USD 640 mm 7.0x +17% 1,847 mar-2017 mar-2018 Adjusted Ebitda** 6.0x 1,577 350 (COP bn): 5.0x • mar-2017: 504 30 Repo Repos Max: 4.0x • mar-2018: 1,041 -15% 4.0x Max
Slide 17: Corporate Governance
CORPORATIVO GOVERNANCE CORPORATE GOBIERNO SOLID COMMITMENT TO CORPORATE GOVERNANCE BOARD OF DIRECTORS SHAREHOLDERS ROSARIO CÓRDOBA (Chair of the Board) - Independent Grupo Grupo Sura Sura – 35.6% - 35.6% CLAUDIA BETANCOURT Fondos Colombia - 65.9% Non – Independent Retail Retail – 24.6% - 24.6% Colom
Slide 18: Value Generation
STRATEGY PROVEN TRACK RECORD, SOLID RESULTS, FLEXIBLE ACCESS TO CAPITAL MARKETS, AND SOUND CORPORATE GOVERNMET WILL CONTINUE TO LEAD THE GROWTH OF OUR ECONOMIC GROUP Proven track Record Cementos Argos VALUE GENERATION • Efficiency Strategy to lever future growth CLEAR STRATEGY • Argos as a regional
Slide 19: Annexes
Annexes
Slide 20: Concession Business
Concession Business
Slide 21: Odinsa: Active Transformation in the Concession Business
ODINSA ACTIVE TRANSFORMATION IN THE CONCESSION BUSINESS Key Figures (LTM Mar 2018) Revenue by business with equity Revenue by business EBITDA by business method adjusted* adjusted* Others, 6% Others, 3% Others, 3% Airports, 11% Roads, 34% Construction, Airports, 51% Airports, 44% Roads, 48% 4 Countr
Slide 22: Odinsa: Rationale Behind Road Concession Business
ODINSA RATIONAL BEHIND THE ROAD CONCESSION BUSINESS GEOGRAPHICAL ENVIORNMENT ODINSA´S STRATEGY Global competitiveness index – Quality of roads* ✓ Presence in ✓ Consolidate strategic corridors in Colombia and Country Position / 138 developing the region countries with a Ecuador 24 ✓ Experience and cr
Slide 23: Odinsa: Rationale Behind Airport Concession Business
ODINSA RATIONAL BEHIND THE AIRPORT CONCESSION BUSINESS GEOGRAPHICAL ENVIORNMENT ODINSA´S STRATEGY ✓ For the next 20 years the Trips per Capita* ✓ Busiest airports in Colombia and Ecuador 3.0 6% middle class will grow in about to take advantage of the regional traffic 2.5 5% 2 bn, leveraging the grow
Slide 24: Odinsa: Traffic, Revenues and EBITDA
2018 BEGINS WITH A 4% GROWTH IN AIRPORT CONCESSIONS AND STABILITY IN ROAD CONCESSION ODINSA TRAFFIC PASSENGERS TPD MM PAX Number of cars 2017 - thousands 40.0 75.4 75.1 35.0 5.0 5.0 3.9 4.7 Boulevard Turístico del 5.4 30.0 5.5 10.8 11.8 Atlántico 5.5 25.0 5.4 7.0 7.0 Autopistas del Nordeste 5.4 20.0
Slide 25: Cement Business
Iv | wa GRUPO ARGOS
Slide 26: Cementos Argos: Cement and Concrete Leader in the Americas
CEMENTOS ARGOS CEMENT AND CONCRETE LEADER IN THE AMERICAS Key Figures (2017) 33 Revenue by Geography Product Mix EBITDA by Geography Regions Colombia Colombia 14 14 26% RMC 39% USA 28% Countries USA Cement 42% 53% 61% CCA CCA 30% 21 9,166 9.850 Employees LTM Mar2018: USD 2.9 bn Cement Volume LTM Mar
Slide 27: Rationale Behind the Cement Business
CEMENTOS ARGOS RATIONAL BEHIND THE CEMENT BUSINESS GEOGRAPHICAL ENVIORNMENT CEMENTOS ARGOS STRATEGY Cement Consumption* ✓ Acquisition of a cement plant in Martinsburg to ✓ Residential sector main 150 600 115 become 4th largest cement producer in the USA driver for cement Kg / capita 100 400 ✓ Plants
Slide 28: Cementos Argos: Growing Operation Results
CEMENTOS ARGOS RESULTS THAT EVIDENCE A GROWING OPERATION BENEFITED BY GEOGRAPHICAL DIVERSIFICATION CEMENT VOLUME RMX VOLUME Mtpa Mcmpa 18 16.2 14 16 14.3 12 11.1 11.5 11.3 14.0 10.6 14 12.6 9.4 11.4 10 8.6 12 10.8 10 9.3 8 7.0 7.8 5.9 8 6 6 3.8 3.7 4 2.6 4 2.4 2 2 0 0 2010 2011 2012 2013 2014 2015 2
Slide 29: Energy Business
Energy Business
Slide 30: Celsia: Successful Transformation and Growth
CELSIA A PROCESS OF SUCCESSFUL TRANSFORMATION AND GROWTH WITH FOCUS Key Figures (LTM Mar2018) Revenue by Geography Revenue by type of generation EBITDA by Geography Solar Wind 0.6% CCA CCA 2.1% 23% 25% 3 Thermal Hydro Countries Colombia 47.6% 49.7% 77% Colombia 75% 1,600 Employees LTM Mar18: USD 1.1
Slide 31: Rationale Behind the Power Sector Business
CELSIA RATIONAL BEHIND THE POWER SECTOR BUSINESS GEOGRAPHICAL ENVIORNMENT CELSIA´S STRATEGY Colombia + Panama + Costa Rica ✓ Energy consumption growth potential (low per capita consumption). ✓ Leader in the countries where it operates ✓ Developing economies with attractive growth that will require ✓
Slide 32: Celsia: EBITDA Generation Supporting Renewables Strategy
CELSIA WITH EBITDA GENERATION THAT SUPPORTS GROWTH STARTEGY IN RENEWABLES GENERATION REGULATED AND NON REGULATED MARKET SALES GWh GWh 8,129 600 7,754 7,135 550 6,170 6,317 5,039 500 450 400 1,487 1,753 350 300 2012 2013 2014 2015 2016 2017 1T2017 1Q17 1T2018 1Q18 1T12 3T12 1T13 3T13 1T14 3T14 1T15 3
Slide 33: Real Estate Business
Real Estate Business
Slide 34: Real Estate: Land Bank with Cash Generation Potential
REAL ESTATE LAND BANK WITH CASH GENERATION POTENTIAL Situm 2000 2017 ~2,000 Ha (Barranquilla and Barú) 2002 2017 416 Ha developed up to 2017 Land use: 56% ✓ ~ 2.000 Ha to develop between Barranquilla and Barú residential ▪ Land development in Barranquilla: 833 Ha equivalent to 2.5x Central Park in N
Slide 35: Real Estate: Pactia Property Joint Venture
REAL ESTATE PROPERTY JOINT VENTURE WITH USD 1.2 BN OF ASSETS UNDER MANAGEMENT Pactia Key Figures 2017 3 Countries Distribution by asset GLA NOI Self Storage, 3% Self-storage, 4% Lots, Hotels, 2% 6% Others, Hotels, 5% Projects, 2% Offices, 15% To Offices, 16% Industry, 17% stabiliz 47% e, 40% Retail,