Grupo Argos S.a. · BVC:GRUPOARGOS
Grupo Argos — Investor Presentation (March 2019)
24 slides from Grupo Argos's investor presentation, March 2019
Slide 1: Investors Presentation
Investors Presentation March 2019
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 • Only liquid vehicle to invest in infrastructure in Colombia 3 • Strategic focus in Cement, Energy, Road and Airport Regions Concessions 18 • Solid and articulated portfolio with ~ USD 16.3 billion in Countries consolidated assets • Balanced in regions, currency,
Slide 4: Balanced Portfolio Focused in Infrastructure
OUR PORTAFOLIO BALANCED PORTFOLIO FOCUSED IN INFRASTRUCTURE Mkt Cap1 Revenue2 EBITDA2 USD 4.9 bn USD 4.8 bn USD 1.3 bn STRATEGIC - In Infrastructure Revenue and Ebitda contribution from Strategic Portfolio Cement Energy Concessions 25% 13% 44% Cement 25% Energy 58.0%3 52.9% 99.8%8 62% Concessions Re
Slide 5: Strategy: Coherence and Profitability
STRATEGY COHERENCE, GROWING EBITDA WITH MARGIN IMPROVEMENT AND OPERATING EFFICIENCY, WILL CONTINUE TO SUPPORT OUR FOCUS IN PROFITABILITY Coherence Cementos Argos • Efficiency Strategy to lever future growth + • Argos as a regional platform • Focus on innovation and digital strategy as a source of EB
Slide 6: Cementos Argos – Efficiency Focus
STRATEGY ACTIVE MANAGER LEADING THE PROFITABLE GROWTH OF ITS BUSINESSES CEMENTOS ARGOS – EFFICIENCY FOCUS PROFITABLE GROWTH FOCO EN EFICIENCIA • Cost per ton reduction in Colombia (-USD 12 / ton). Efficiency project extends to USA in 2019 with estimated savings of USD 40 mm • Administration and sale
Slide 7: Celsia – Strategic Asset Allocation and Structure Simplification
STRATEGY ACTIVE MANAGER LEADING THE PROFITABLE GROWTH OF ITS BUSINESSES CELSIA – STRATEGIC ASSET ALLOCATION AND STRUCTURE SIMPLIFICATION PROFITABLE GROWTH FOCO EN EFICIENCIA Celsia´s Consolidated • Focus in renewable energy with positive impact in profitability Net Income 2018 indicators • Increase
Slide 8: Odinsa – Growth Focus
STRATEGY HOLDING MANAGER DIRECCIONANDO EL CRECIMIENTO RENTABLE DE SUS NEGOCIOS. ODINSA – GROWTH FOCUS PROFITABLE GROWTH FOCO EN EFICIENCIA ODINSA • AKF's contingency legal management allowed to maintain the concession until January 2027 Odinsa´s Consolidated OPAIN Net Income 2018* • Growth in unregu
Slide 9: Financial Results
FINANCIAL RESULTS CLEAR GUIDELINE IN THE STRATEGY THAT HAS TRANSLATED IN GROWING RESULTS GRUPO ARGOS CONSOLIDATED REVENUES GRUPO ARGOS CONSOLIDATED EBITDA (COP mn) (COP mn) CAGR (2012 – 2018) 16,1% CAGR (2012 – 2018) 13.5% *26,5% 27.7% 14,574 5500 24.2% 25.0% 23.9% 24.9% 28.0% 14,553 14,314 12,700 4
Slide 10: Strategic Architect Guidelines
STRATEGY STRATEGIC ARCHITECT GUIDELINES SUSTAINABLE GROWTH AND MAXIMIZE PROFITABILITY Efficient Capital Assigment + Corporate Governance High Standards + Social Responsibility + Human Talent Management Strategic Financial Institutional Asset and Talent Management ✓ Corporative strategy ✓ Merge & Acq
Slide 11: Variable Remuneration Scheme of Management
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 12: Sustainability: Most Sustainable Company in Construction Materials
SUSTAINABILITY GRUPO ARGOS IS THE WORLD’S MOST SUSTAINABLE COMPANY IN THE CONSTRUCTION MATERIALS INDUSTRY, ACCORDING TO THE DOW JONES SUSTAINABILITY INDEX Grupo Argos and Grupo Argos and Grupo Argos Cementos Argos Celsia Cementos Argos Cementos Argos 2nd 6th 5th IG consecutive year as consecutive ye
Slide 13: Concrete Advances in ESG Matters
SUSTAINABILITY CONCRETE ADVANCES IN ESG MATTERS Dimension Dimension Dimension ECONOMIC SOCIAL ENVIORNMENTAL • Independent Board President • Responsible Operation Goal: LABOR • Responsible Operation Goal - CLIMATE • 43% of women members on the Board CLIMATE: 95.3% in the Great Place to CHANGE: 33% re
Slide 14: Solid Commitment to Corporate Governance
CORPORATIVO GOVERNANCE CORPORATE GOBIERNO SOLID COMMITMENT TO CORPORATE GOVERNANCE BOARD OF DIRECTORS SHAREHOLDERS ROSARIO CÓRDOBA (Chair of the Board) - Independent Grupo Sura Grupo Sura 22,7% CLAUDIA BETANCOURT 25.7% 35.5% Grupo Nutresa Grupo Nutresa Colombian Funds Non – Independent Fondos Colomb
Slide 15: Nuestra Gestión Como Holding Frente a la Estructura de Capital
Nuestra Gestión Como Holding Frente a la Estructura de Capital
Slide 16: Reduction in Leverage Indicators (Individual)
INDIVIDUAL REDUCTION IN LEVERAGE INDICATORS THAT CLOSE IN 1.7x *** HISTORICALLY LOW INDEBTEDNESS* LEVERAGE INDICATORS COP billion +3% dic-2017 dic-2018 1,567 1,611 4.0x Max: 4.0x - 3.5x Adjusted EBIDTA** 350 Max: 3.5x (COP billion): 3.0x 759 2.5x • dic-2017: 679 Repos 0% PC • dic-2018: 944 2.0x 759
Slide 17: Leverage Ratios Evolution
INDICATORS LEVARAGE RATIOS EVOLUTIONS IN LINE WITH EFFICIENT CAPITAL ALLOCATION STRATEGY 3000 7.00x 2500 Ebitda adj. Adj EBITDA DeudaDebt Gross bruta Deuda bruta/ /EBITDA Gross Debt Ebitda 6.00x From 2015 to 2018 Grupo Argos 944 695 has: 679 5.00x 2000 558 ✓ Invested + COP 3,1 trillion Max 3.5x ✓ Di
Slide 18: Consolidated Debt Management
CONSOLIDATED CONSOLIDATED DEBT MANAGEMENT THROUGH DEBT REDUCTION STRATEGIES AND SOCIETARY REORGANIZATION DEBT* In 2018 consolidated debt 16,431 16,229 decreases in COP 202 billion to 1,453 -1% 1,389 COP 16,2 trillion with a greater 2,379 2,610 participation from local market Opain 36% International
Slide 19: Cash Flow as Leverage to Strengthen Strategic Business
INDIVIDUAL CASH FLOW AS LEVERAGE TO STRENGTHEN OUR STRATEGIC BUSINESS COP million NOTES 1 DividendosNetnetos dividends 314,271 1 Net Dividends: COP 314 billion 2 UrbanIngresos NDU development income 82,072 2 Urbanized land COP 31 billion, lots in gross COP 42 billion, rents and others 8 billion 3 Ve
Slide 20: Controllable Management Expenses Decreased 8.3%
INDIVIDUAL BETWEEN 2015 AND 2018, CONTROLLABLE MANAGEMENT EXPENSES OF GRUPO ARGOS HAVE DECREASED 8.3% IN REAL TERMS SG&A COP billion CAGR real: -4.0% Grupo Argos Controllable Management Cost 165 135 133 28 141 -8.3% 7 17 11 18 22 CAGR (2015 – 2018) 3 3 19 30 27 27 Real Estate Business Expenses 25 22
Slide 21: Financial Results 2018
FINANCIAL RESULTS 2018
Slide 22: Focus on Profitable Growth with EBITDA Improvement
STRATEGY FOCUS ON PROFITABLE GROWTH WITH IMPROVEMENT AT THE EBITDA LEVEL AND GROWTH OF THE MARGIN AT THE CONSOLIDATED LEVEL OF 91 bp Positive results as an active holding Consolidated Ebitda for 2018: COP 4 trillion Consolidated Ebitda margin of 28% for 2018 +91 bp YoY Consolidated net income 2018:
Slide 23: Consolidated: Net Income Grows 32%
CONSOLIDATED IN 2018 NET INCOME GROWS 32%, SUPPORTED ON STRENGTHENING OF THE HOLDING COMPANY INCREASING PROFITABILITY OF ITS INVESTMENTS IMPORTANT FIGURES NOTES Consolidated Statement of Income 1 ✓ Revenues increased 1% during 2018 deleting the compas effect: COP Billions Dic-2018 Dic-2017 Var.(%) ✓
Slide 24: Individual: Equity Method Increases 7x
INDIVIDUAL EQUITY METHOD INCREASES 7x REFLECTING THE STRENGTH OF THE BUSINESSES IMPORTANT FIGURES NOTES Separate Statement of Income COP billion Income Income Real Estate Bussines Equity Method 436 Dic-2018 Dic-2017 Var.(%) -26% +61% 3 Revenue 1.380 1.190 16% 260 79 281 417 -33% 115 192 270 Costs an