Grupo Argos S.a. · BVC:GRUPOARGOS
Grupo Argos — Q2 2017 Earnings Presentation
31 slides from Grupo Argos's earnings presentation, 2017
Slide 1: Results Presentation 2Q2017
Results Presentation 2T2017
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: With a stable Ebitda margin of 25%, Grupo Argos endorses its portfolio strategy
With a stable Ebitda margin of 25%, Grupo Argos endorses its portfolio strategy Operating results for Grupo Argos reflect the benefits of an articulated and balanced portfolio with consolidated revenues growing 5% for the quarter YoY to COP 3.6 trillion and stability in Ebitda margin. Odinsa substan
Slide 4: Exercising its role as an active holding company, Grupo Argos materializes its investment in Compas
Exercising its role as an active holding company, Grupo Argos materializes its investment in Compas with an IRR of 26% From 3 cement terminals (Barranquilla, To an articulated and multipurpose logistics network with presence in the Tolú, and Buenaventura) Pacific and Atlantic oceans and first level
Slide 5: Sale of Compas reaffirms our commitment to manage efficiently our investment portfolio
Sale of Compas reaffirms our commitment to manage efficiently our investment portfolio Investment in Compas and transaction • Múltiplos multiples • Múltiplos Rational • Múltiplos Impacto Contable GA ▪ Since 2012 Grupo Argos has contributed to ▪ Fulfillment of investment thesis COP billions P&L P&L C
Slide 6: Financial markets and rating agencies continue to support our strategy
Financial markets and rating agencies continue to support our strategy and strengthen us as a Corporate Group Successful issuance of commercial paper and maintains debt ratings ▪ Commercial paper issuance, with a bid to cover of 2,7 times over the amount initially offered ▪ Amount placed = COP 350,0
Slide 7: Market confidence is evidenced by a valuation of more than 7% of the portfolio
Market confidence is evidenced by a valuation of more than 7% of the portfolio June 2016 June 2017 6% 6% 10% 10% Cement Cemento Cement Cement Cemento 6% COP 38% FinancialFinancieros Servicios Financial Services Services COP 36% Financial Servicios Services Financieros 10% 13% 19.7 RealEstate Real Es
Slide 8: Grupo Argos
rN cruroarco) GYUPO Argos rN - GRUPO ARGOS
Slide 9: Results reflect a successful capital allocation strategy with growing contribution from concessions
Results reflect a successful capital allocation strategy with growing contribution from the concessions business Consolidated 2Q2017 ▪ Revenues increase by 5% in 2Q17 YoY due to higher consolidated contributions from Concessions (consolidation of Opain starting February 2017) REVENUES COP 3.6 ▪ Stab
Slide 10: First half of 2017 ends with a stable EBITDA margin of 25%
First half of 2017 ends with a stable EBITDA margin of 25% Significant figures – Consolidated Income Statement Notes 1 ✓ Revenues increased by 5% in 2Q17 due to higher contributions from the COP billions 2Q2017 2Q2016 YoY 1H2017 1H2016 YoY concession business that began to consolidate Opain starting
Slide 11: Relevant contribution of the concession business in revenues and Ebitda
Relevant contribution of the concession business in revenues and Ebitda Business Contribution – Revenue (Billions of COP) 4,000 3,384 + 0.3 3,565 + 276 3,500 + 49 +5 +4 ✓ Lower contributions from the Energy business due 3,000 - 39 to lower market prices and lower thermal - 115 38% generation. 2,500
Slide 12: Articulated portfolio with assets that reach COP 48 trillions
Articulated portfolio with assets that reach COP 48 trillions June 2017 Assets– June 2017 COP Trillion PP&E 14% Activos Assets Other,LP Otros LT 24.0 39% Equity Patrimonio 20% COP 48tn 47.8 Long-term (LT) Inversiones Pasivo Liabilites Investments Permanentes 23.7 27% Short-term Corto Plazo(ST) Activ
Slide 13: Separate revenues grew 20% in 2Q17 due to higher contributions from concessions, energy and real estate
Separate revenues grew 20% in 2Q17 due to the higher contributions from concessions, energy and real estate businesses Significant figures – Individual Income Statement Notes COP billions 1 Revenues distribution 2Q 2017 2Q2017 2Q2016 YoY 1H2017 1H2016 YoY 75% 211 1 Revenue 211 120 75.0% 387 282 37.3
Slide 14: Individual Balance Sheet – June 2017
Individual Balance Sheet – June 2017 June 2017 Assets - June 2017 COP COP Trillion billones Short-term Corto Plazo(ST) 2.2 9% 3% 2% Long-term (LT) Activos Inversiones Investments Permanentes 17.5 Patrimonio COP17.5tn 15.2 PP&E Pasivo 86% Activos Pasivo&&Liabilites Patrimonio Other, LP Otros LT Asset
Slide 15: Leverage indicator at the individual level closes the first half at 2.7x
Leverage indicator at the individual level closes the first half at 2.7x with improvement in financial costs that decrease by ~ 350 bp Debt (COP trillions) Leverage ratios jun-2017 jun-2017 Adjusted EBITDA** +14% 1,762 (COP billions): 1,550 • jun-2016: 463 • jun-2017: 664 57%51% 65% REPO Max: 3.5x •
Slide 16: Concessions Business
Negocio Concessions de Concesiones Business
Slide 17: Emphasis in roads and airports accomplished with sale of generation assets
Emphasis in roads and airports accomplished with sale of generation assets and participation in Santa Marta Paraguachón COP Mil millones 2Q2017 ▪ Strategic portfolio management, consolidating a profitable business REVENUES COP 203 in infrastructure, which confirms the benefits of having an investmen
Slide 18: For 2Q2017 road traffic shows growth above 6%, while Quiport registers increase in passengers
For 2Q2017 road traffic shows growth above 6%, while Quiport registers increase in passengers. Traffic – Average Daily Traffic Number of vehicles (thousands) Revenues breakdown 69 72 +6.4% 4 Boulevard Turístico del 3 7 Atlántico 6 13% 10 10 Pacífico 2 16 18 Autopistas del Nordeste COP 203 35 Malla V
Slide 19: Double-digit growth in revenues, EBITDA and net income after consolidation of ADN and BTA
Double-digit growth in revenues, EBITDA and net income after consolidation of ADN and BTA Revenues (COP bn) EBITDA (COP bn) Margen EBITDA (%) 377 17% 269 321 46% 54 203 2016 184 134 132 54% 65% 61 81 189 -8% 174 31% 135 78 103 2017 66 2016 2017 2016 2017 ✓ Increase in revenues from consolidation of
Slide 20: Cement Business
Cement Negocio Business de Cemento
Slide 21: Argos demonstrates its ability to adapt to a challenging market environment in Colombia
Argos demonstrates its ability to adapt to a challenging market environment in Colombia with tangible results in Ebitda margin EBITDA MARGIN Efforts in efficiencies that materialize in results AVANCES DE PROGRAMA BEST 17% for 2Q17 showing signs of moderate recovery 1. Alternative fuels 21% consolida
Slide 22: Strong growth in cement volumes in 2Q17 due to better dynamics in the US and Colombia
Strong growth in cement volumes in 2Q17 due to better dynamics in the US and Colombian Cement (TMT) Cement Sales 2Q2017 +46% A/A + 488 4,169 +7% A/A +5% A/A 3,536 +85 +61 32% Colombia 37% Colombia 4,169 M TM Caribbean Caribe and CA y CA (incl. +18% Exportaciones) 31% USA – Southeast EEUU 2Q2016 2T20
Slide 23: Geographical diversification and BEST efficiency program show benefits with Ebitda margin recovery
Geographical diversification and efficiency program, BEST, starts to show benefits with a recovery of the Ebitda margin to 17% in 2T17 from 13% in 1T17 Revenue (COP Billions) EBITDA (COP Billions) EBITDA Margin (%) 4,402 -4% 4,231 861 -26% 19.2 641 2016 2,189 436 2,154 19.9 -2% -16% 367 13.2 -6% 2,2
Slide 24: Energy Business
Cement Negocio Business de Energía
Slide 25: Results that reflect a strengthened operation with improved leverage ratios
Results that reflect a strengthened operation with improved leverage ratios and greater efficiencies 2Q2017 ▪ Debt reduction in ~ COP 163 bn YoY to COP 4 trillion REVENUES COP 743 ▪ Payment of EPSA´s bonds by COP 86 bn. EBITDA COP 279 ▪ Net debt / EBITDA of 3.48x in EBITDA Margin 2Q17 vs. 4.3x in 2Q
Slide 26: Operational figures that reflect a lower thermal generation, higher water generation of EPSA
Operational figures that reflect a lower thermal generation. Higher water generation of EPSA Generation (GWh) Composition of Power Generation -28 -228 1,731 257 -113 1,618 Celsia 5% CA 18% -7% 1,618 Zona Franca 13% Gwh EPSA 64% Energy Generation Generación 2T16 Celsia Celsia Free ZonaTrade Zone Fran
Slide 27: Second highest Ebitda margin in last 7 years
Second highest Ebitda margin in last 7 years endorsed by good performance in Central America and a more efficient operation in Colombia Revenue (COP Billions) EBITDA (COP Billions) EBITDA Margin (%) 2,225 529 -2% 520 -33% 19.6 862 2016 1,485 263 30.5 +6% 279 -14% 743 32.5 1,363 -46% 267 -10% 2017 24
Slide 28: Real Estate Business
Real Estate Negocio Inmobiliario Business Desarrollo urbanístico, Barranquilla
Slide 29: Progress in land negotiation and consolidation of real estate portfolio through alliance with Protection
Progress in the negotiation of land consolidation of real estate portfolio through alliance with Protection Desarrollo Urbano ▪ Positive results in terms of value for Pactia real estate ▪ Progress in the negotiation of land. fund. Since the inception of Proteccion on January 20, ▪ For the quarter, 2
Slide 30: Operational figures – Real estate portfolio, Pactia
Operational figures– Real estate portfolio, Pactia Stake in Pactia (%) GLA 518,481 m2 9.6% 9.6% 4.5% 2.7% 40.0% 40.0% 40.1% 44.1% 39.8% 39.8% 12.7% Industria Proteccion 38.8% Comercio Grupo Argos Oficinas Conconcreto 60.0% 60.0% 59.9% 55.9% Autoalmacenamiento 50.6% 50.6% Hoteles 41.4% 1T2016 2T2016
Slide 31: Thanks
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