Fomento De Construcciones Y Contratas, S.a. · BME:FCC
Fomento De Construcciones Y Contratas — FCC Group — Non-Deal Roadshow (April 2003)
56 slides from Fomento De Construcciones Y Contratas's roadshow presentation, Apr 2, 2003
Slide 1: FCC Group Roadshow Presentation
FCC Group Roadshow Presentation April 2nd, 2003
Slide 2: Agenda
I. FCC Group “Today” II. Financial Highlights III. Positioning by Business Area IV. The “Future” V. Conclusions
Slide 3: I. FCC Group Today
I. FCC Group “Today” II. Financial Highlights III. Positioning by Business Area IV. The “Future” V. Conclusions
Slide 4: The FCC Group
The FCC Group The FCC Group is one of the largest construction and services groups in Spain • €2.9 Bn market cap • €5.5 Bn sales • Mainly domestic (86% of sales) • 55,000 employees 4
Slide 5: Strategic Vision
Strategic Vision Consolidate leadership position and fuel growth and profitability in three key Strategic Areas Public Construction Cement Services 5
Slide 6: Organisational Structure
Organisational Structure 100% 100% 100% 58.8% 80.4% Business Public Urban Construction Cement Real Estate Grucycsa Areas Services Services 80% 50% Torre Core Businesses Realia(1) Picasso 02 Revenues 28.7% 5.5% 46.7% 14.9% 0.3%(3) 3.9% Breakdown 02 EBITDA 32.7% 9.9% 16.9% 37.1% 2.0%(3) 1.4% Breakdown
Slide 7: Key Strengths
Key Strengths • Leadership position in – #1 services company in Spain key strategic areas – #2 cement company in Spain – #4 construction company in Spain • Highest exposure to – 34% of consolidated Revenues services among peers – 42% of consolidated EBITDA • Strong earnings visibility – ~55% of reve
Slide 8: Leadership Position in Key Strategic Areas
Leadership Position in Key Strategic Areas Services - 2002 Cement - 2001 Construction - 2002 Total Sales - € Bn Market Share in Spain Total Sales - € Bn 3.8 22.5% 1.9 17.2% 3.1 2.9 2.6 1.4 13.8% 2.2 9.7% 6.6% 0.5 0.5 0.3 l l na na S C os ia S C os ia nd ex m e C AC FC AC FC v v cio ad rg cio ad FC c
Slide 9: Highest Exposure to Services Amongst Peers
Highest Exposure to Services Amongst Peers Sales Breakdown - 2002 % of Services 9 High growth area 34% 9 Strong profitability 19% 9 Very stable cash flows 11% 6% 5% l na S C os ia AC FC v cio ad rro Reduces cyclicality g Ac Fe ra D in construction Source: Broker Reports 9
Slide 10: Strong Earnings Visibility
Strong Earnings Visibility Very secure and stable cash flows • Mainly concession-related business Public – Long term contracts Services – With public entities – Price revision mechanisms c. 80% of sales • Strong civil works component Construction • Mainly large infrastructure projects • Mainly domes
Slide 11: Strong Financial Position
Strong Financial Position Net Debt / EBITDA - Dec 2002 Net Debt/Capitalisation - Dec 2002 (x) (%) 71% 5.7 48% 38% 2.5 28% 25% 1.4 0.9 0.9 al a C S s on do AC FC vi al rro C S a s ci ga on do AC FC vi Ac Fe ra rro ci ga D Ac Fe ra D Source: CNMV Source: CNMV 11
Slide 12: Strong Cash Flow Generation
Strong Cash Flow Generation Funds From Operations(1) - 2002 EBITDA Margin - 2002 € MM (%) 524 13.5% 466 12.9% 9.3% 8.4% 270 262 255 7.1% al a C S s al a C S s on do AC FC vi on do AC FC vi rro ci ga rro ci ga Ac Fe ra Ac Fe ra D D Source: CNMV Source: CNMV Notes: (1) Funds from operations defined as
Slide 13: II. Financial Highlights
I. FCC Group “Today” II. Financial Highlights III. Positioning by Business Area IV. The “Future” V. Conclusions
Slide 14: Strong 2002 Results
Strong 2002 Results (€ MM) 2001 2002 % Change Revenues 5,173.2 5,497.2 +6.3% EBITDA 704.3 741.3 +5.3% % Margin 13.6% 13.5% Cash Flow(1) 505.6 577.6 +14.2% EBIT 475.8 498.1 +4.7% % Margin 9.2% 9.1% Net Income 241.0 273.0 +13.3% Note: (1) Defined as ordinary net income plus D&A minus results under equ
Slide 15: Growth Across All Key Strategic Areas
Growth Across All Key Strategic Areas 2002 2002 (€ MM) Revenues % Change EBITDA % Change Construction 2,613.1 +9.1% 123.6 +8.4% Public 1,605.9 +1.7% 239.9 +4.5% Services Urban Services 305.2 +21.8% 72.2 +16.5% Cement 831.4 +5.0% 272.1 +6.7% Grucycsa 218.7 +2.5% 10.0 (8.3%) Torre Picasso 15.9 +6.7% 1
Slide 16: Consistently Strong Track Record
Consistently Strong Track Record Revenue Growth / Internationalisation Diversification of Revenues % 13.6 5,497 - 02= 98 5,173 R C AG venue 4,468 Re Construction 47% 56% 3,829 3,303 Public 34% 30% Services Cement 15% 10% 4% Other 4% 1998 1999 2000 2001 2002 1998 2002 9.5% International Sales 13.8% 1
Slide 17: III. Positioning by Business Area
I. FCC Group “Today” II. Financial Highlights III. Positioning by Business Area IV. The “Future” V. Conclusions
Slide 18: Public Services
Public Services
Slide 19: Public Services
Public Services Breakdown by Type of Activity and Region 2002 Revenue Breakdown (€1,606 MM) Environmental Services (€904.0 MM) 15.4 – Solid urban waste collection, treatment and disposal International – Street cleaning – Maintenance of parks and gardens 56.3 Water Management (€383.9 MM) – Full manag
Slide 20: Public Services Key Financials
Public Services Key Financials (€ MM) Revenues EBITDA CAGR 99-02: 12.9% CAGR 99-02: 14.7% International 230 240 National 1,579 1,606 202 1,415 159 1,117 14.9% 1,226 1,358 14.3% 14.3% 14.5% 1,101 962 314 353 248 155 1999 2000 2001 2002 1999 2000 2001 2002 Record backlog of €11,573 MM as of December 2
Slide 21: Environmental Services
Environmental Services Positioning Revenues (€ MM) / EBITDA Margin • #1 company in Spain CAGR 99-02: 9.2% 904 823 (approx. 50% market share 694 766 of privatised market) 14.0% 14.4% 14.3% 13.6% – 21 MM equivalent population covered • Present in almost all Spanish 1999 2000 2001 2002 cities above 50,
Slide 22: Water Management
Water Management Positioning Revenues (€ MM) / EBITDA Margin • #2 company in Spain CAGR 99-02: 12.6% 384 349 (approx. 30% market share 298 of privatised market) 269 19.1% 19.6% 18.6% – Water treatment: 9MM 15.6% equivalent population covered – Water distribution: 6 MM 1999 2000 2001 2002 equivalent
Slide 23: Industrial Waste
Industrial Waste Positioning Revenues (€ MM) / EBITDA Margin • One of Spain’s leading CAGR 00-02: 37.5% companies in the fast growing 70 industrial waste segment 54 • Selective acquisition strategy in 37 a very fragmented market 15.6% 14.7% 14.3% – Ekonor (October 2001), specialised in treatment of
Slide 24: International Services
International Services Revenues (€ MM) / EBITDA Margin Positioning • Latam activities (68% of sales) 353 314 held through Proactiva, a 50/50 248 J/V with Vivendi Environment 154 – 02 sales decrease (30%) 11.6% mainly explained by loss of 12.0% 11.1% 10.0% Puerto Rico contract (June), 1999 2000 2001
Slide 25: Urban Services
Urban Services
Slide 26: Urban Services
Urban Services Breakdown by Type of Activity and Region 2002 Revenue Breakdown (€305 MM) Urban Fixture (€84.3 MM sales) – Design, manufacture, installation and maintenance of all types of street furniture 22.0 27.6 International Handling (€73.3 MM sales) – Ground assistance at airports including air
Slide 27: Urban Services Key Financials
Urban Services Key Financials (€ MM) Revenues EBITDA International CAGR 99-02: 18.1% CAGR 99-02: 17.0% National 305 72 250 62 214 56 185 45 240 210 24.4% 26.0% 24.8% 178 23.7% 159 36 40 65 26 1999 2000 2001 2002 1999 2000 2001 2002 Leading position in main segments within urban services 27
Slide 28: Urban Fixtures
Urban Fixtures Positioning Revenues (€ MM) / EBITDA Margin • #1 in Spain (approx. 40% CAGR 99-02: 23.1% 84 72 market share) 58 – Focused on the less 45 cyclical street furniture 36.6% 34.8% 34.4% 31.0% segment • Very strong international 1999 2000 2001 2002 presence in more than 100 cities in Europe
Slide 29: Handling
Handling Positioning Revenues (€ MM) / EBITDA Margin • #2 largest operator in Spain CAGR 99-02: 26.0% 74 • Presence in a total of 10 airports 50 43 − Domestic activities (9 airports) 37 currently managed through 27.3% 30.2% 25.3% 21.7% a 50/50 J/V with AirEuropa – In October 2002, FCC 1999 2000 2001
Slide 30: Urban Services – Other Activities
Urban Services – Other Activities Sewage Networks (€57 MM Sales) Car Parks (€40 MM Sales) – Historically first market player (provides – On-street parking in 35 cities (100,000 services in Madrid and Barcelona since spaces managed) 1942 and 1911 respectively) – 36 underground parkings, with – Manage
Slide 31: Construction
Construction
Slide 32: Strong Expected Growth in Domestic Construction
Strong Expected Growth in Domestic Construction... Construction Output Growth Forecasts Y-o-Y 2002E 2003E 2004E 2005E CAGR* growth Spain 4.7% 3.2% 3.5% 3.5% 3.4% UK 4.4% 3.8% 2.9% 2.1% 2.9% Finland -1.0% 0.5% 3.5% 4.0% 2.7% France 0.5% 0.0% 1.0% 1.6% 0.9% Germany -3.4% -1.1% 0.3% 1.3% 0.2% Italy 1.6
Slide 33: Fuelled by the Plan Nacional de Infraestructura
...fuelled by the “Plan Nacional de Infraestructura” Total Investment per Period Investment Breakdown (ex-Hydrological Plan) - € Bn (ex-Hydrological Plan) Other Seaports 4% 7% 43.0 42.6 Airports 11% Motorways 17.3 39% Railroads 2002-04 2005-06 2007-10 39% A €114 Bn Infrastructure Plan, to be funded
Slide 34: Construction
Construction Positioning 2002 Backlog Breakdown • Leading construction 10% company in Spain in terms of 26% revenues 44% – Mostly domestic business 5% 15% (93% of revenues) – Clear focus on the public 2002 Revenues Breakdown sector (58% of revenues) – Clear focus on civil works 15% (56% of revenues)
Slide 35: Construction Key Financials
Construction Key Financials (€ MM) Revenues EBITDA CAGR 99-02: 11.9% CAGR 99-02: 14.3% 124 International National 114 2,613 95 2,396 2,055 83 1,867 4.4% 4.6% 4.8% 4.7% 2,242 2,438 1,684 1,887 183 168 154 175 1999 2000 2001 2002 1999 2000 2001 2002 Record backlog of €3,409 MM as of Dec 2002 (+15.7%),
Slide 36: Portfolio of Infrastructure Concessions (I)
Portfolio of Infrastructure Concessions (I) Operating Operating FCC Equity % in Years of Beginning of Concessions Investment Concession Concession Operations Transportation M45 Norte 4.8 25.0 25 2002 Carretera de los Pantanos 3.0 25.0 25 2002 Tunel de Soller 8.7 56.5 28 1997 Tunel de Envalira 3.4 40
Slide 37: Portfolio of Infrastructure Concessions (II)
Portfolio of Infrastructure Concessions (II) Non-Operating Concessions FCC Equity % in Years of Beginning of Under Construction Investment Concession Concession Operations Transportation Radiales R3-R5 y M50 Oeste 22.3 15.8 50 2003 Autopista Central Gallega 3.8 13.3 75 2003 Tranvia Baix Llobregat 4.
Slide 38: Cement
Cement
Slide 39: Strong Expected Growth in Domestic Cement
Strong Expected Growth in Domestic Cement World Cement Consumption Expected Growth – CAGR 2002-2005 2001 – Tons MM 5.9 112.6 4.3 79.4 1.2 0.6 0.1 42.2 41.0 31.1 20.7 -0.7 8.3 1.6 nd y n ce ly pe an ai Ita a an ro Sp m nl Eu Fr Fi er G rn d SA y n n ia ce ly te an an pa ai Ita an an es U Sp m nl Ja c
Slide 40: Cement
Cement Cementos Portland Giant Cement – CDN USA • #2 Spanish cement company, with • 100% US subsidiary of Cementos 17% market share Portland since 2000 • Leadership in Northern and • #15 US cement company Central Spain • Leadership (#4) in East Coast • 6 fully owned plants, with 9.0 MM (Carolina, Vi
Slide 41: Cement Key Financials
Cement Key Financials (€ MM) Revenues EBITDA International CAGR 99-02: 24.1% CAGR 99-02: 16.1% 272 255 National 234 792 831 174 673 435 521 593 40.1% 478 34.7% 32.2% 32.7% 428 195 271 238 7 1999 2000 2001 2002 1999 2000 2001 2002 Strong activity in the domestic market expected to continue on the bac
Slide 42: Torre Picasso
Torre Picasso
Slide 43: Torre Picasso
Torre Picasso • 80% owned by FCC, Torre Picasso is one of the most emblematic office buildings in Madrid Key 2002 Figures • Surface(m2) – Office 70,195 – Local 7,962 – Garage 832 Spaces • Occupancy ratio (%) 94.25% • Revenues (€ MM) 15.9 • EBITDA (€ MM) 14.4 43
Slide 44: Non-Core Assets
Non-Core Assets
Slide 45: Non-Core Assets - Realia
Non-Core Assets - Realia • Result of the merger between FCC’s and Caja Madrid’s real estate activities: 4th largest real estate company in terms of assets (€1.3 Bn) Key Figures (€ MM) 2002 Rentals 21% – Offices 74% – Commercial 26% • Sales 410 • EBIT 94 • Net Income 55 Development 79% – Residential
Slide 46: Non-Core Assets - Grucycsa
Non-Core Assets - Grucycsa • FCC’s diversified investment holding • Revenues of €219 MM • Current key investments: % of Revenues – Logistics: Logística de Navarra 42% – Electrical systems: Espelsa 23% – Heating and air-conditioning: Tecair 14% – Industrial Equipment: SVAT 7% – Other 14% 46
Slide 47: IV. The Future
I. FCC Group “Today” II. Financial Highlights III. Positioning by Business Area IV. The “Future” V. Conclusions
Slide 48: Key Strategic Areas
Key Strategic Areas Perceived Growth and Profitability Potential Growth Profitability Drivers • New geographic Public Services +++ +++ markets • New business segments • Strength of Construction ++ + Medium domestic market • Strength of domestic market Cement ++ ++ • US restructuring plan 48
Slide 49: Public Services Growth and Profitability Drivers
Public Services Key Growth and Profitability Drivers • Renewal of existing concessions: – Provision of new services Environmental – Wider range of services supplied • Further privatisation of the market (70% privatised so far) • Further privatisation of the market (50% privatised so far) Water Manag
Slide 50: Urban Services Growth and Profitability Drivers
Urban Services Key Growth and Profitability Drivers Urban Fixtures • Further expansion internationally • 2003/2004 liberalisation process in Spain Handling • Avoid J/V structure in future auctions • Increase in occupancy rates Car Parks • Selective acquisitions in Spain • Improvement in the renewal
Slide 51: Construction Growth and Profitability Drivers
Construction Key Growth and Profitability Drivers • Domestic construction sector expected to continue growing at a strong pace, fuelled by the “Plan Nacional de Infraestructuras”, at least for the period up to 2010 • FCC likely to benefit significantly from the Plan, due to current strong positionin
Slide 52: Cement Growth and Profitability Drivers
Cement Key Growth and Profitability Drivers • Domestic cement market expected to continue growing on the back of the strength of the construction sector • FCC likely to benefit from market growth due to strategic location of its cement plants – Recent upgrade of the Hontoria (Palencia) and Alcalá de
Slide 53: EBITDA Breakdown Evolution by Activity
EBITDA Breakdown Evolution by Activity Non-construction activities to represent 86% of EBITDA by 2005 2002 2005 Others Construction Others Construction 4% 17% 4% 14% Cement 38% Cement 37% Services Services 44% 42% 53
Slide 54: Resulting Leverage Ratios
Resulting Leverage Ratios Gearing(1) 28.7% • Debt reduction is mainly 15.0 - 16.0% based on organic growth • Leverage ratios with enough room to allow for further 02 05 significant acquisitions Net Debt / EBITDA (x) 0.9 • In any case, FCC’s target would always be to maintain 0.4-0.5 an “investment g
Slide 55: V. Conclusions
I. FCC Group “Today” II. Financial Highlights III. Positioning by Business Area IV. The “Future” V. Conclusions
Slide 56: Key Highlights
Key Highlights Unique financial capability and know-how to continue growing in all key strategic areas • Leadership position in three key strategic areas: Services, Construction and Cement • High exposure to public services • Earnings visibility • Strong leverage capacity • Strong cash flow generati