Grupo Argos S.a. · BVC:GRUPOARGOS
Grupo Argos — Investor Presentation (January 2019)
37 slides from Grupo Argos's investor presentation, January 2019
Slide 1: Investors Presentation January 2019
Investors Presentation January 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: Grupo Argos at a Glance
WHO WE ARE GRUPO ARGOS AT A GLANCE 3 • Only liquid vehicle to invest in infrastructure in Colombia Regions • Strategic focus in Cement, Energy, Road and Airport Concessions 18 • Solid and articulated portfolio with ~ USD 16 billion in AUM Countries • Balanced in regions, currency, and sectors • One
Slide 4: Core Competency: Building Regional Platforms
CORE COMPETENCY SOLID TRACK RECORD - BUILDING REGIONAL PLATFORMS “Grupo Argos transforms domestic companies into leading regional champions” Setting the stage... ...to expand... …and consolidate market leadership More than 15 structural and bolt-on acquisitions 4 Merger of 8 Colombian in the US alon
Slide 5: Balanced Portfolio Focused in Infrastructure
OUR PORTAFOLIO BALANCED PORTFOLIO FOCUSED IN INFRASTRUCTURE Mkt Cap1 Revenue2 EBITDA2 USD 4.5 bn USD 4.5 bn USD 1.2 bn STRATEGIC - In Infrastructure Revenue and Ebitda contribution from Strategic Portfolio Cement Energy Concessions 23% 14% 43% Cement 24% Energy 58.0%3 52.9% 99.8%8 62% Concessions Se
Slide 6: Value Generation
STRATEGY PROVEN TRACK RECORD, SOLID RESULTS, FLEXIBLE ACCESS TO CAPITAL MARKETS, AND SOUND CORPORATE GOVERNMET WILL CONTINUE TO LEAD THE GROWTH OF OUR ECONOMIC GROUP Proven track Record Cementos Argos VALUE GENERATION • Efficiency Strategy to lever future growth CLEAR STRATEGY • Argos as a regional
Slide 7: Strategic Architect Principles
STRATEGY STRATEGIC ARCHITECT PRINCIPLES SUSTAINABLE GROWTH AND VALUE GENERATION Capital Allocation + High Standards of Corporate Governance + Social Responsibility + Human Talent Management Strategic Financial Corporate Management Asset and Talent Management ✓ Corporate strategy ✓ Mergers, acquisiti
Slide 8: 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 9: Following a Methodology Focused on Profitability
STRATEGY FOLLOWING A METHODOLOGY FOCUSED ON PROFITABILITY Efficient capital allocation Profitability Growth High ✓ Improve performance A Attractiveness of the industry ✓ Invest to grow after skills ✓ Invest to grow ✓ Protect position ✓ Potential improved ✓ Grow selectively market growth ✓ Average pr
Slide 10: Financial Results
FINANCIAL RESULTS STRATEGY THAT HAS TRANSLATED INTO GROWING RESULTS GRUPO ARGOS CONSOLIDATED REVENUES GRUPO ARGOS CONSOLIDATED EBITDA (COP mn) (COP mn) USD 5.0 bn USD 1.4 bn 14,553 14,573 3,904 12,700 3,620 10,586 10,566 2,780 2,855 9,296 2,635 7,629 2,225 6,681 1,907 1,616 2012 2013 2014 2015 2016
Slide 11: History: Growing Dividend Policy
HISTORY WITH A GROWING DIVIDEND POLICY THAT CONFIRMS PROFITABILITY GUIDELINE PORTFOLIO EVOLUTION (COP tn) 1 Power business 2 Split Cementos 3 Concession business Total cement + power + concessions consolidation Argos consolidation STRATEGIC PORTFOLIO 30 Evolution (%) USD 7.6 bn 25 21.1 22.1 100% 19.
Slide 12: Individual: Leverage Indicators
INDIVIDUAL LEVERAGE INDICATOR AT THE INDIVIDUAL LEVEL THAT PROVIDE FLEXIBILITY TO CONTINUE PORTFOLIO GROWTH INDEBTEDNESS* LEVERAGE INDICATORS COP billion 4.5x +10% 1,732 sep-2017 sep-2018 1,567 4.0x Max: 4.0x 44 3.5x Adjusted EBIDTA** 350 Max: 3.5x (COP billion): Repos 759 3.0x 0% 2.5x • Sep-2017 76
Slide 13: Individual: Cash Flow
INDIVIDUAL CASH FLOW AS LEVERAGE TO STRENGTHEN OUR STRATEGIC BUSINESS COP million NOTES 1 Dividendos netos Net dividends 164,603 1 Dividends received: COP 371 billion, dividends paid: COP 207 billion 2 Ingresos Urban NDU income development 36,652 2 Sale of plots of land: COP 37 billion 3 Venta accio
Slide 14: Sustainability: Most Sustainable Company
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 15: 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 16: 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 20.9% CLAUDIA BETANCOURT 25.7% 35.5% Grupo Nutresa Grupo Nutresa Colombian Funds Non – Independent Fondos Colomb
Slide 17: Annexes Financial Results as of Sept 2018
Annexes Financial Results as of Sept 2018
Slide 18: Focused Strategy Translating into Results
STRATEGY FOCUSED STRATEGY THAT TRANSLATES INTO TANGIBLE RESULTS AS OF SEPTEMBER 2018 ON ALL FRONTS ▪ Net profit of controlling company up +19% Y/Y* GRUPO ARGOS ▪ Individual results with growth of +38% in the equity method Efficient Capital Allocation ▪ Administration expenses of Grupo Argos down -21
Slide 19: Consolidated
CONSOLIDATED NET PROFIT OF THE CONTROLLER GROWS 42%, EXCLUDING THE SALE OF COMPAS, SUPPORTED IN A STRATEGY THAT SEEKS TO STRENGTHEN THE HOLDING COMPANY AND MAKE MORE PROFITABLE ITS INVESTMENTS IMPORTANT FIGURES Consolidated Statement of Income NOTES COP billion Sep-2018 Sep-2017 Change (%) 1 Revenue
Slide 20: Individual
INDIVIDUAL GAINS FROM EQUITY METHOD INCREASED BY +38% AS OF SEPTEMBER, DRIVEN BY HIGHER PROFITS IN THE CEMENT AND ENERGY BUSINESS IMPORTANT FIGURES NOTES Separate Statement of Income COP billion 1 Sep-2018 Sep-2017 Change (%) Distribution of revenues in 2018 Urban Development Business Equity Method
Slide 21: Annexes Strategic Businesses
Annexes Strategic Businesses
Slide 22: Concessions Business
ie Concessions Business Al
Slide 23: Odinsa: Active Transformation in Concessions
ODINSA ACTIVE TRANSFORMATION IN THE CONCESSION BUSINESS Key Figures (LTM September 2018) Revenue by business with equity Revenue by business EBITDA by business method adjusted* adjusted* Others, 6% Others, 4% Others, 1% Airports, 11% Roads, 30% Construction, Airports, 58% Airports, 49% Roads, 42% 4
Slide 24: Rationale Behind the Road Concession Business
ODINSA RATIONAL BEHIND THE ROAD CONCESSION BUSINESS GEOGRAPHICAL ENVIORNMENT ODINSA´S STRATEGY Global competitiveness index – Quality of roads* ✓ Presence in ✓ Consolidate strategic corridors in Colombia and Country Position / 138 developing the region countries with a Ecuador 24 ✓ Experience and cr
Slide 25: Rationale Behind the Airport Concession Business
ODINSA RATIONAL BEHIND THE AIRPORT CONCESSION BUSINESS GEOGRAPHICAL ENVIORNMENT ODINSA´S STRATEGY ✓ For the next 20 years the Trips per Capita* ✓ Busiest airports in Colombia and Ecuador 3.0 6% middle class will grow in about to take advantage of the regional traffic 2.5 5% 2 bn, leveraging the grow
Slide 26: Operational Figures in Airport and Road Concessions
ODINSA OPPERATIONAL FIGURES REGISTER A GROWTH IN AIRPORT AND ROAD CONCESSIONS TRAFFIC PASSENGERS TPD MM PAX Number of cars 2017 - thousands 40.0 35.0 5.0 5.0 5.4 30.0 5.5 5.5 25.0 5.4 3.7 3.9 5.4 20.0 15.0 27.6 30.0 31.0 31.0 22.4 25.0 23.4 23.9 10.0 20.1 5.0 0.0 2011 2012 2013 2014 2015 2016 2017 S
Slide 27: Cement Business
Cement Business
Slide 28: Cementos Argos: Cement and Concrete Leader in the Americas
CEMENTOS ARGOS CEMENT AND CONCRETE LEADER IN THE AMERICAS Key Figures (LTM September 2018) 3 15 Revenue by Geography Product Mix EBITDA* by Geography Regions and Countries territories Colombia Colombia 14 26% RMC 39% USA 28% Countries USA Cement 42% 53% 61% CCA CCA 30% 21% 9,166 9.850 Employees LTM
Slide 29: Rationale Behind the Cement Business
CEMENTOS ARGOS RATIONAL BEHIND THE CEMENT BUSINESS GEOGRAPHICAL ENVIORNMENT CEMENTOS ARGOS STRATEGY Cement Consumption* ✓ Acquisition of a cement plant in Martinsburg to ✓ Residential sector main 150 600 115 become 4th largest cement producer in the USA driver for cement Kg / capita 100 400 ✓ Plants
Slide 30: Cementos Argos Results
CEMENTOS ARGOS RESULTS THAT EVIDENCE A GROWING OPERATION BENEFITED BY GEOGRAPHICAL DIVERSIFICATION CEMENT VOLUME RMX VOLUME Mtpa Mcmpa 18 16.2 14 16 14.3 11.1 11.5 11.3 14.0 12 10.6 14 12.6 12.0 12.0 11.4 10 9.4 12 10.8 8.6 8.0 7.9 10 9.3 8 7.0 7.8 5.9 8 6 6 4 4 2 2 0 0 2010 2011 2012 2013 2014 2015
Slide 31: Energy Business
Energy Business
Slide 32: Celsia: Successful Transformation and Growth
CELSIA A PROCESS OF SUCCESSFUL TRANSFORMATION AND GROWTH WITH FOCUS Key Figures (LTM September 2018) Revenue by Geography Revenue by type of generation EBITDA by Geography Solar Wind 0.6% CCA CCA 2.1% 23% 25% 3 Thermal Hydro Countries Colombia 47.6% 49.7% 77% Colombia 75% 1,586 Employees LTM Sept18:
Slide 33: Rationale Behind the Power Sector Business
CELSIA RATIONAL BEHIND THE POWER SECTOR BUSINESS GEOGRAPHICAL ENVIORNMENT CELSIA´S STRATEGY Colombia + Panama + Costa Rica ✓ Energy consumption growth potential (low per capita consumption). ✓ Leader in the countries where it operates ✓ Developing economies with attractive growth that will require ✓
Slide 34: Celsia EBITDA Supporting Renewables Strategy
CELSIA WITH EBITDA GENERATION THAT SUPPORTS GROWTH STARTEGY IN RENEWABLES GENERATION REGULATED AND NON REGULATED MARKET SALES GWh GWh 8,129 600 7,754 7,135 550 6,170 6,317 5,039 500 4,548 4,848 450 400 350 300 2012 2013 2014 2015 2016 2017 Sep-17 Sep-18 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 1Q15 3Q15 1Q16 3
Slide 35: Real Estate Business
Real Estate Business
Slide 36: Real Estate: Land Bank with Cash Generation Potential
REAL ESTATE LAND BANK WITH CASH GENERATION POTENTIAL Situm 2000 2017 ~2,000 Ha (Barranquilla and Barú) 2002 2017 416 Ha developed up to 2017 Land use: 56% ✓ ~ 2.000 Ha to develop between Barranquilla and Barú residential ▪ Land development in Barranquilla: 833 Ha equivalent to 2.5x Central Park in N
Slide 37: Pactia: Property Joint Venture
REAL ESTATE PROPERTY JOINT VENTURE WITH USD 1.2 BN OF ASSETS UNDER MANAGEMENT Pactia Key Figures September 2018 3 Countries Distribution by asset GLA Self-Storage NOI Self-Storage 3% 3% Hoteles Lots, Hotels 6% Others, 2% 5% Projects, 2% Offices To Offices 15% 17% 15% stabiliz Industry Retail e, 40%