Grupo Argos S.a. · BVC:GRUPOARGOS

Grupo Argos — Q2 2019 Earnings Presentation

33 slides from Grupo Argos's earnings presentation, August 2019

  1. Slide 1: Quarterly Earnings Presentation 2Q2019

    QUARTERLY FINANCIAL Resultados RESULTS Primer Trimestre del 2019 QUARTERLY EARNINGS PRESENTATION 2Q2019 August 2019

  2. Slide 2: Important Note

    QUARTERLY FINANCIAL Resultados RESULTS Primer Trimestre del 2019 Quarterly Earnings Presentation IMPORTANT NOTE This presentation contains certain forward-looking information and statements related to GRUPO ARGOS and its subsidiaries that are based on current knowledge of events, expectations and fo

  3. Slide 3: Strengthening our role through fast and efficient access to the financial market

    QUARTERLY FINANCIAL RESULTS STRATEGY STRENGTHENING OF OUR ROLE THROUGH FAST AND EFFICIENT ACCES TO THE FINANCIAL MARKET CELSIA ODINSA COP 2.1 tn COP 2.7 tn EPSA bonds for COP 1.1 tn EPSA private equity raising of COP 206 bn Financial credits for COP 800 bn COP 5.3 bn Quiport bonds for COP 1.3 tn** O

  4. Slide 4: First AAA rating from Fitch: capital structure

    QUARTERLY FINANCIAL RESULTS CAPITAL STRUCTURE FOR FIRST TIME IN OUR HISTORY, WE RECEIVED AAA RATING FROM FICTH “ AAA < 15 % ~ 3.5x > COP 420 BN RATING Loan to Value - LTV Debt to Dividends Received Estimated Div. received in 2019 Allows aggressive Stable dividends 66% controlled July 2019 growth str

  5. Slide 5: Strategic discipline translated into a more profitable portfolio

    QUARTERLY FINANCIAL RESULTS STRATEGIC DISCIPLINE THAT IS TRANSLATED INTO A MORE PROFITABLE PORTFOLIO 1.1 287 133 405 ** COP COP COP COP tn bn bn bn CONSOLIDATED EBITDA 2Q EBITDA 2Q19 EBITDA 2Q19 EBITDA 2Q19 18% YoY* 7% YoY 5% YoY 23% YoY Grupo Argos consolidated EBITDA Tolima´s first month of operat

  6. Slide 6: Recent transactions allow to expect positive results in 2019

    QUARTERLY FINANCIAL RESULTS STRATEGY RECENT TRANSACTIONS ALLOW TO EXPECT POSITIVE RESULTS IN 2019 Successful asset Capital structure Divestment of non- allocation strategy optimization at asset level strategic assets and reduction of leverage ▪ Acquisition of Tolima assets for ▪ Issuance of Quiport

  7. Slide 7: Quarterly results consistent with executed strategy

    QUARTERLY FINANCIAL RESULTS CONSOLIDATED RESULTS GRUPO ARGOS 2Q2019 QUARTERLY RESULTS CONSISTENT WITH EXECUTED STRATEGY COP billion 2Q - 2019 2Q - 2018 Var (%) Jun-2019 Jun-2018 Var.(%) 1. Second quarter revenues grow 7% YoY: 1 Revenues1 3,860 3,617 7% 7,582 6,928 9% • Contribution from Cementos (+C

  8. Slide 8: Revenues increase 7% YoY at the consolidated level

    QUARTERLY FINANCIAL RESULTS CONSOLIDATED RESULTS GRUPO ARGOS 2Q2019 REVENUES INCREASE + 7% YoY AT THE CONSOLIDATED LEVEL CONTRIBUTION BY BUSINESS TO CONSOLIDATED REVENUE COP bn 7% Increase revenue YoY 7% 8% 1T2018 2Q2018 Cement Energy Real estate Portfolio Coal Concessions Other 1T2019 2Q2019 Growth

  9. Slide 9: Ex IFRS EBITDA grows 9% with positive contributions from all core segments

    QUARTERLY FINANCIAL RESULTS CONSOLIDATED RESULTS GRUPO ARGOS 2Q2019 EX IFRS 16 EBITDA GROWS 9% WITH POSITIVE CONTRIBUTIONS FROM ALL CORE SEGMENTS CONTRIBUTION BY BUSINESS TO CONSOLIDATED EBITDA COP bn 9% 18% Increase in EBITDA YoY* 1T2018 1T2018 2Q2018 Cement Energy Real estate Portfolio Coal Conces

  10. Slide 10: Results in line with our profitability strategy in our core businesses

    QUARTERLY FINANCIAL RESULTS INDIVIDUAL RESULTS GRUPO ARGOS 2Q2019 RESULTS IN LINE WITH OUR RPROFITABILITY STRATEGY IN OUR CORE BUSINESSES RELEVANT FIGURES Individual Income Statement COP bn 2Q - 2019 2Q - 2018 Var (%) Jun-2019 Jun-2018 Var.(%) Revenue 96 99 -2% 404 950 -57% Costs and other expenes 7

  11. Slide 11: Grupo Argos controllable expenses decrease by 8% in first half 2019

    QUARTERLY QUARTERLY FINANCIAL FINANCIAL RESULTS RESULTS INDIVIDUAL RESULTS GRUPO ARGOS 2Q2019 GRUPO ARGOS CONTROLLABLE EXPENSES DECREASE BY 8% IN FIRST HALF 2019 1. REVENUE DISTRIBUTION 2Q2019 COP bn 2. EQUITY METHOD DISTRIBUTION 2Q2019 COP bn 99 96 Act. Financiera Financial 69 65 65 MPP Equity Meth

  12. Slide 12: Grupo Argos leverage decreases by 16% YoY giving flexibility

    QUARTERLY QUARTERLY FINANCIAL FINANCIAL RESULTS RESULTS INDIVIDUAL RESULTS GRUPO ARGOS 2Q2019 GRUPO ARGOS LEVERAGE DECREASES BY 16% YoY GIVING FLEXIBILITY INDEBTEDNESS* COP bn LEVERAGE INDICATORS Max: 3.5x Adjusted EBIDTA** 1,772 -16% (COP billion): Max: 3.5x 94 1,494 44 • Jun-2018: 975 759 PC • Jun

  13. Slide 13: Closing cash, result of the search for efficiency in resource administration

    QUARTERLY QUARTERLY FINANCIAL FINANCIAL RESULTS RESULTS RESULTADOSRESULTS INDIVIDUAL SEPARADOS GRUPO GRUPO ARGOS ARGOS 2Q2019 1T2019 CLOSING CASH, RESULT OF THE SEARCH FOR EFFICIENCY IN THE ADMINISTRATION OF RESOURCES INDIVIDUAL FREE CASH FLOW COP bn NOTES 1 Dividendos netos Net dividends 131 1. Div

  14. Slide 14: Concessions Business

    QUARTERLY QUARTERLY FINANCIAL FINANCIAL RESULTS RESULTS CONCESSIONS BUSINESS ODINSA Y OPAIN QUARTERLY RESULTS 2Q2019 14 August 2019

  15. Slide 15: Advanced continuously in its growth plans and improvement of profitability

    QUARTERLY QUARTERLY FINANCIAL FINANCIAL RESULTS RESULTS CONCESSIONS BUSINESS 2Q2019 ADVANCED CONTINUOUSLY IN ITS GROWTH PLANS AND IMPROVEMENT OF PROFITABILITY NOTES REVENUES Debt restructuring progresses COP 200 billion in Opain for USD 415 mn -8% (YoY) In line with capital structure optimization st

  16. Slide 16: Road and air traffic grows 5% and 6% during the quarter

    QUARTERLY QUARTERLY FINANCIAL FINANCIAL RESULTS RESULTS NEGOCIO DE CONCESIONES CONCESSIONS BUSINESS 2Q2019 PRIMER TRIMESTRE DEL 2019 ROAD AND AIR TRAFFIC GROWS 5% AND 6% DURING THE QUARTER RESPECTIVELY AVERAGE DAILY VEHICLE TRAFFIC 2Q2019 Thousands of vehicles NOTES 72.2 76.1 • AKF: During 2Q19 traf

  17. Slide 17: EBITDA grows 5% YoY. EBITDA margins of 66%

    QUARTERLY QUARTERLY FINANCIAL FINANCIAL RESULTS RESULTS NEGOCIO DE CONCESIONES CONCESSIONS BUSINESS 2Q2019 PRIMER TRIMESTRE DEL 2019 EBITDA GROWS 5% YOY. EBITDA MARGINS OF 66% (+600 PBS) REVENUE COP bn EBITDA COP bn CONTROLLER NET PROFIT COP bn 31 29 -8% +5% -4% Jun-2018 2Q2018 1T2018 Jun-2019 2Q201

  18. Slide 18: Revenue per passenger in Opain grows 8% YoY

    QUARTERLY QUARTERLY FINANCIAL FINANCIAL RESULTS RESULTS CONCESSIONS BUSINESS 2Q2019 REVENUE PER PASSENGER IN OPAIN GROWS 8% YOY PASSENGERS Millions of passengers (PAX) REVENUES COP bn 11 8.63 8.48 →Var YoY: 8% 549 9 7.88 8.05 8.06 498 +4% 7 2.85 2.85 → Var YoY: 5% 2.705 2.82 2.87 286 5 274 3 5.177 5

  19. Slide 19: Cement Business

    QUARTERLY FINANCIAL PRESENTACIÓN RESULTS DE RESULTADOS TRIMESTRALES CEMENT BUSINESS CEMENTOS ARGOS QUARTERLY RESULTS 2Q2019 19 August 2019

  20. Slide 20: Efficiency, profitability of existing assets and divestment of non-strategic assets

    QUARTERLY FINANCIAL PRESENTACIÓN RESULTS DE RESULTADOS TRIMESTRALES CEMENT BUSINESS 2Q2019 EFFICIENCY, PROFITABILITY OF EXISTING ASSETS AND DIVESTMENT OF NON-STRATEGIC ASSETS NOTES REVENUES Divestment of non strategic 8% (YoY) assets to reduce leverage COP 2.3 tn Sale of Argos participation in Carto

  21. Slide 21: Rainfall in the USA and price increase in Colombia effect on volumes

    QUARTERLY FINANCIAL PRESENTACIÓN RESULTS DE RESULTADOS TRIMESTRALES CEMENT BUSINESS 2Q2019 RAINFALL IN THE USA AND INCREASE IN PRICES IN COLOMBIA WITH EFFECT OVER VOLUMES CEMENT VOLUMES (Tons, thousands) CEMENT SALES +2% YoY 32% -8% YoY 0% YoY 39% USA 4.1 COL -2% mm TM C y CA 2Q2018 2Q2019 29% READY

  22. Slide 22: Efficiencies in the USA and price recovery in Colombia

    QUARTERLY FINANCIAL PRESENTACIÓN RESULTS DE RESULTADOS TRIMESTRALES CEMENT BUSINESS 2Q2019 EFFICIENCIES IN THE USA AND PRICE RECOVERY IN COLOMBIA REVENUES COP bn EBITDA COP bn CONTROLLER NET PROFIT COP bn 475 500 18 24 72 404 42 450 70 12 400 76 55 350 300 250 +8% 45% 74 405 200 328 150 -24% 55 100

  23. Slide 23: Energy Business

    QUARTERLY FINANCIAL PRESENTACIÓN RESULTS DE RESULTADOS TRIMESTRALES ENERGY BUSINESS CELSIA QUARTERLY RESULTS 2Q2019 23 August 2019

  24. Slide 24: Sale of Zona Franca strengthens capital structure and provides financial flexibility

    QUARTERLY FINANCIAL PRESENTACIÓN RESULTS DE RESULTADOS TRIMESTRALES ENERGY BUSINESS 2Q2019 SALE OF ZONA FRANCA STRENGTHENS CAPITAL STRUCTURE AND PROVIDES FINANCIAL FLEXIBILITY NOTES REVENUES 11% (YoY) USD 420 mn from divestment 913 Mil COP of Zona Franca Celsia M i l l o n e s Resources that will be

  25. Slide 25: Increase in energy prices compensate lower generation levels

    QUARTERLY FINANCIAL PRESENTACIÓN RESULTS DE RESULTADOS TRIMESTRALES ENERGY BUSINESS 2Q2019 INCREASE IN 89% ENERGY PRICES COMPENSATE LOWER GENERATION LEVELS GENERATION* GWh BREAKDOWN OF GENERATION 0% 18% 12% Celsia Zona Franca 1,521 EPSA -8% GWh CA 2Q2018 2Q2019 70% CHANGE IN ELECTRICITY SALES GWh NO

  26. Slide 26: Revenue and EBITDA in Colombia grow 18% and 23% YoY

    QUARTERLY FINANCIAL PRESENTACIÓN RESULTS DE RESULTADOS TRIMESTRALES ENERGY BUSINESS 2Q2019 REVENUE AND EBITDA IN COLOMBIA GROW 18% YoY AND 23% YoY RESPECTIVELY REVENUES COP bn EBITDA COP bn CONTROLLER NET INCOME COP mil mn +18% YoY +23% YoY -13% YoY -51% YoY +11% +7% -76% 2Q2018 2Q2019 2Q2018 2Q2019

  27. Slide 27: Real Estate Business

    QUARTERLY FINANCIAL PRESENTACIÓN RESULTS DE RESULTADOS TRIMESTRALES REAL ESTATE BUSINESS URBAN DEVELOPMENT BUSINESS AND PACTIA QUARTERLY RESULTS 2Q2019 27 August 2019

  28. Slide 28: Advance in our master plan in Barú

    QUARTERLY FINANCIAL PRESENTACIÓN RESULTS DE RESULTADOS TRIMESTRALES ADVANCE IN OUR MASTER PLAN IN BARÚ Revenue of COP 33 bn (+ 10% YoY) Revenus of COP 74 bn (+ 10% YoY) Cash flow amounted to COP 20 bn (+ 23% YoY) GLA increased 7% in the last 12 months by: Barú advances in the master development plan

  29. Slide 29: Hilton Colferias hotel in Bogota starts operation

    QUARTERLY FINANCIAL PRESENTACIÓN RESULTS DE RESULTADOS TRIMESTRALES PACTIA HITLON COLFERIAS HOTEL IN BOGOTA STARTS OPERATION PARTICIPATION IN PACTIA % GLA m2 2.9% 3.5% 27.7% 27.9% Industry Industria 18.1% 40.3% Retail Comercio Conconcreto Grupo Argos 774,282 Offices Oficinas Protección m2 Hoteles Ho

  30. Slide 30: Sustainability Advances

    QUARTERLY FINANCIAL PRESENTACIÓN RESULTS DE RESULTADOS TRIMESTRALES SUSTAINABILITY ADVANCES SUSTAINABILITY 2Q2019 30 August 2019

  31. Slide 31: Conscious investment, vanguard practices and responsible operation

    QUARTERLY FINANCIAL PRESENTACIÓN RESULTS DE RESULTADOS TRIMESTRALES CONSCIOUS INVESTMENT, VANGUARD PRACTICES AND RESPONSIBLE OPERATION GOALS 2025 Shared Values ECONOMIC DIMENSION • 100% of our employees annually conduct ethics, conduct and transparency Conscious controls Investment • 4/7 independent

  32. Slide 32: Grupo Argos added to society 1.8x the benefit taken

    QUARTERLY QUARTERLY FINANCIAL PRESENTACIÓN RESULTS DE RESULTADOS FINANCIAL TRIMESTRALES RESULTS GRUPO ARGOS ADDED TO THE SOCIETY 1,8X THE BENEFIT TAKEN , EQUIVALENT TO USD 332 MM VALUE ADDED STATEMENT OF GRUPO ARGOS 2018 (USD bn) ECONOMIC SOCIAL ENVIORNMENT 120.5 5.25 5.247761994 332.4 332.3904542 1

  33. Slide 33: Contact

    QUARTERLY FINANCIAL RESULTS CEO Jorge Mario Velasquez CFO Alejandro Piedrahita IR Director Natalia Agudelo Tel: (574) 319-8712 E-mail: nagudelop@grupoargos.com IR Analyst Jaime Andres Palacio Tel: (574) 3198400 ext 22388 E-mail: jpalaciop@grupoargos.com www.grupoargos.com 33 August 2019

Grupo Argos — Q2 2019 Earnings Presentation on 6ix