Grupo Argos S.a. · BVC:GRUPOARGOS
Grupo Argos — Q1 2017 Earnings Presentation
33 slides from Grupo Argos's earnings presentation, 2017
Slide 1: Results Presentation 1Q2017
Results Presentation 1Q2017
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: Consolidated results 1Q2017
Strategy focused on efficient capital allocation shows higher profitability at the consolidated level and growth in the net income of the parent company Operational results reflect the benefits of a diversified portfolio 1 focused in infrastructure EBITDA Margin Consolidated Consolidated Results 1Q2
Slide 4: Commitment to the country's competitiveness
As an Economic Group we reaffirm our commitment with the country’s competitiveness 1 2 3 Cementos Argos Odinsa Celsia • Main provider for cement and RMC for the construction of the 4G program in Colombia: 72% • The first functional unit of the 4G of Cement and 53% of RMC program was finished by Conc
Slide 5: Investments portfolio at market prices grows
Our investments portfolio at market prices grows more than 15% as a result of the consolidation of Odinsa and Opaín in the concessions business March 2016 March 2017 6% 5% 9% 10% Cement Cement Cemento Cemento 6% COP$ 37% Financial Services Financial Services 10% COP$ 37% FinancialFinancieros Servici
Slide 6: The year begins with good results in concessions and power
The year begins with good results in the concessions and power businesses that contribute to a growth of 200 bps in EBITDA margin and 14% in the net income of the parent company Significant figures – Income Statement Notes Billions of COP 1Q 2017 1Q 2016* Var Y/Y (%) 1 Positive variation in revenu
Slide 7: Portfolio diversification allows improvement in consolidated margins
Portfolio diversification strategy allows improvement in consolidated margins Revenue (Billions of COP$) EBITDA (Billions of COP$) EBITDA Margin (%) 4,043 949 855 3,357 2016 23.5 2017 25.5 2016 2017 2016 2017 1Q 1T Opaín’s consolidation and the positive results from Odinsa and the Power business a
Slide 8: Contribution of the concessions business to revenues and EBITDA
The contribution of the concessions business stands out in the revenues and the EBITDA of Grupo Argos Business Contribution – Revenue (Billions of COP$) 4500 4,043 4000 Lower contribution from the power business (-COP 3500 - 130 + 19 + 139 3,357 620 billion) due to lower spot prices and a lower 30
Slide 9: Articulated portfolio with COP 47 trillion in AUM
We consolidate an articulated portfolio with COP 47 trillion in AUM March 2017 Assets – March 2017 Trillions of COP$ PP&E PP&E 15% 24.2 Other, Otros LPLT Activos Assets 38% COP$ 47 47.1 Patrimonio Equity 19% Trillion Long-term (LT) Inversiones 22.9 Liabilities Pasivo Investments Permanentes 28% Asse
Slide 10: Individual results improved EBITDA margin to 71%
Individual results with a positive contribution from concessions and energy improved the EBITDA margin to 71% Significant figures – Income Statement Notes Billions of COP 1Q 2017 1Q 2016* Var Y/Y (%) 1 Revenue Distribution 1Q 2017 1 Revenue 176 162 9% 1% Actividad Financial Financiera Activity COP $
Slide 11: Individual Balance Sheet – March 2017
Individual Balance Sheet – March 2017 March 2017 Assets – March 2017 Trillions of COP$ 12% 4% Corto Plazo (ST) Short-term 2.3 0% Inversiones Long-term (LT) Investments Assets Activos COP$17 Permanentes 17.2 Equity Patrimonio Trillion PP&E PP&E 14.9 Liabilities Pasivo Other,LP Otros LT 84% Assets Act
Slide 12: Leverage ratios healthy; S&P ratifies AA+
Leverage ratios (separate) healthy and within the limits established by the rating agencies. S&P ratifies AA+ Debt (COP trillions) Leverage ratios 6% mar-2016 mar-2017 • Indicators within the 1.550 1.577 +2% limits established by 33% risk agencies 38% Max: 5.0x 57% 65% REPOS REPOS 6.0x Bonos BondsCO
Slide 13: Cement Business
ARGOS rN - GRUPO ARGOS
Slide 14: Infrastructure Projects: demand for cement and RMC for 4G begins
The demand for cement and RMC for the 4G infrastructure program begins Leader in awarded functional units of the Commitment to 4G program: accelerate the Infrastructure Projects 72% Cement implementation of BEST in Colombia: Flandes Bridge 53% RMC BEST Cost reduction in cash of Important USD 3/ MT
Slide 15: Recovery in cement market share in Colombia
Recovery in the market share of cement in Colombia between June 2016 and March 2017 from 39% to 44% Cement (TMT) Cement Sales 1Q2017 +43% Y/Y +406 3,842 +10% Y/Y Colombia Colombia 3,447 +126 35% 35% -138 3,842 -11% Y/Y Caribbean Caribe y CA and CA TMT +12% 30% USA- Sureste USA – Southeast 4Q2015 1T2
Slide 16: First quarter affected by competitive dynamics and seasonality
First quarter affected by competitive dynamics in Colombia and seasonality in the United States with an expected recovery in both markets as of 2Q Revenue (Billions of COP$) EBITDA (Billions of COP$) EBITDA Margin (%) 2,213 425 2,077 2016 19.2 274 2017 13.2 2016 2017 2016 2017 1Q 1T Lower income d
Slide 17: Power Business
Power Business
Slide 18: Operational results focused on profitability
Operational results focused on profitability 1Q2017 Reduction of the debt of ~COP400 billion since the last months of 2015 REVENUE COP$ 742 Net Debt / EBITDA of 3.34x in EBITDA COP$ 241 1Q17 vs 5.13x in 4Q15 Improvement in EBITDA Margin EBITDA Margin and Net Margin. EBITDA margin is near its h
Slide 19: Back to normal thermic generation after El Niño
Back to the normal volumes of thermic generation after El Niño phenomenon Variation in Energy Sales (GWh) Lower generation explained by high prices and 2,975 volumes in Colombia during El Niño phenomenon -521 -477 (2015/2016) when thermic generation operated at its maximum capacity -33 -15 1,929
Slide 20: Normalized operation confirmed by EBITDA margin improvement
The return of a normalized operation confirmed by the substantial improvement of EBITDA margin and the positive contribution of all businesses Revenue (Billions of COP$) EBITDA (Billions of COP$) EBITDA Margin (%) 267 +628 -12 241 -621 -1 --14 2016 19.6 1,363 -10% 742 2017 32.5 2016 2017 Lower rev
Slide 21: Concessions Business
fg | Concessions opinsA | Business rN - GRUPO ARGOS
Slide 22: Optimization of the concessions portfolio
Optimization of the portfolio positioning itself as one of the main companies in the infrastructure sector in Colombia 1Q2017 Pacífico II Strategic restructuring of the REVENUE COP$ 174 portfolio enabled the consolidation of a profitable EBITDA COP$ 135 infrastructure business, that demonstrates t
Slide 23: Opaín traffic grows 5%
For 1Q2017 Opaín traffic grows 5% and a stable behavior is registered on road traffic Traffic – Average Daily Traffic Number of vehicles (thousands) Revenues breakdown - 1% 87.1 86.2 Boulevard Turístico del 4 4 Atlántico 12% 11 11 Autopistas del Nordeste 7 7 9 10 Pacífico 2 20 18 Santa Marta 21% COP
Slide 24: Significant increase in EBITDA, historical margin of 78%
Significant increase in EBITDA based on a successful portfolio debugging strategy, reaching historical margins of 78% Revenue (Billions of COP$) EBITDA (Billions of COP$) EBITDA Margin (%) -8% +31% 2016 55 189 135 174 103 2017 78 2016 2017 2016 2017 Lower revenues mainly explained by the decrease
Slide 25: Real Estate Business
Real Estate Business Urban development, Barranquilla
Slide 26: Operation of Fondo de Capital Privado Pactia starts
The operation of Fondo de Capital Privado Pactia starts after the entry of Protección, giving the fund further flexibility to execute expansion projects Urban Devel. Negotiations to sale land continue Fondo de Capital Privado Pactia started operating. Delay on the transfer of the deeds that do
Slide 27: Operational figures – Real Estate Portfolio, Pactia
Operational figures – Real Estate Portfolio, Pactia Stake in Pactia (%) GLA 516,441 m2 9.6% 4.0% 2.7% 40.0% 40.0% 40.1% 44.1% Industry Industria 39.8% 12.5% Commerce Comercio Proteccion 38.7% Grupo Argos Offices Oficinas 60.0% 60.0% 59.9% Conconcreto Autoalmacenamiento Self-storage 55.9% 50.6% Hotel
Slide 28: Port Business
Port ws compas, Business rN - GRUPO ARGOS
Slide 29: Start of operations of the Aguadulce Port
Start of operations of the Aguadulce Port with a positive contribution in terms of cargo that grows 7% Mobilized Containers Import and Export Containers -5% +32% 17,180 7,299 13,574 12,892 5,528 3,380 1T2015 1T2016 1T2017 1T2015 1T2016 1T2017 Tons of Bulk and General Cargo Mobilized Motor Vessels 16
Slide 30: Financial results reflecting start of Aguadulce operations
Financial results that reflect the start of operations in Aguadulce Revenue (Billions of COP$) EBITDA (Billions of COP$) EBITDA Margin (%) +0.1% 2016 41.0 38 38 16 16 2017 42.3 2016 2017 2016 2017 1T The consolidated results of the company totalized COP 38 billions, while the EBITDA reached COP 16
Slide 31: Annexes
rN - GRUPO ARGOS
Slide 32: Grupo Argos – Contribution by business
Grupo Argos – Contribution by business Revenue from Ordinary Activities Gross Profit Gross Margin Profit from Operations Operating margin EBITDA EBITDA Margin Controlling Company Margin (1) Elimination using the equity method of the Holding Company, intercompany revenue, exclusion of Compas (2) Elim
Slide 33: Thank you
me pee , rN UPO AR Ss . 4 OR Oo GO