Abengoa Sa · OTC:AGOAF
Abengoa Sa — Debt Investor Presentation (March 2016)
59 slides from Abengoa Sa's debt investor presentation, Mar 16, 2016
Slide 1: Business Plan & Financial Restructuring Proposal
Business Plan & Financial Restructuring Proposal Innovative Technology Solutions for Sustainability March 16, 2016 1
Slide 2: Agenda
Agenda Business Plan & Financial Restructuring Proposal – March 16, 2016 Registration Q&A Session 2
Slide 3: Disclaimer 1/2
March 16, 2016 Disclaimer 1 / 2 Many factors could cause the actual results, performance or achievements of Abengoa to be Abengoa Group's Financial Restructuring Agreement materially different from any future results, performance or achievements that may be expressed or implied by such forward-looki
Slide 4: Disclaimer 2/2
March 16, 2016 Disclaimer 2 / 2 Abengoa Group’s Financial Restructuring Agreement 4
Slide 5: Welcome & Overview of the Day
Welcome & Overview of the Day Antonio Fornieles Executive Chairman, Abengoa 5
Slide 6: Steps towards a New Abengoa
Steps towards a New Abengoa New Abengoa focused on maximized value creation 1 Business model 2 New business approach 3 New financial structure A strong New Abengoa focused on E&C and technology poised to generate cash 6
Slide 7: Industrial Viability Plan
Industrial Viability Plan Tony Alvarez III Alvarez & Marsal 7
Slide 8: New Abengoa: Focus on E&C and Hybrid E&C with cash discipline
New Abengoa Focus on E&C and New Concession-type (Hybrid E&C) business with cash discipline Business Industrial Financial Approach Viability Plan(1) Restructuring(2) (1) Abengoa has engaged Alvarez & Marsal to advise on the development of the Industrial Viability Plan. (2) Aben
Slide 9: Viability Plan - Key Principles
Viability Plan - Key Principles Focus on E&C activity for turnkey, balanced with selected Hybrid E&C projects Current Backlog New Concession- (E&C for Turnkey & Turnkey type Projects Concession-type Others projects) Projects (Hybrid E&C) 9
Slide 10: New Abengoa Enterprise Value estimated at €5,395M
New Abengoa Valuation New Abengoa Enterprise Value estimated at € 5,395M 1 Evolution of Current Backlog Value (Roll-forward NPV) Net asset Recovery Value (M€) 5.000.000 4.683.219 4.825.924 4.302.433 Current Backlog Value 2,581 4.000.000 3.518.753 € ‘000 Non-Core Disposals (excl. dividends) (1) 473 3
Slide 11: Viability Plan 5 Years Cash Flow
Viability Plan 5 Years Cash Flow 1. 2. 3. 4. 5. 11
Slide 12: Viability Plan New Business EBITDA
Viability Plan 5 years New Business EBITDA 2016 2017 2018 2019 2010 Assuming that current 5Bis Order Intake 2,000 3,450 3,800 4,100 4,600 situation will be swiftly 1,500 1,750 2,000 2,200 2,500 Turnkey Projects resolved and that the Concession_type Projects 500 1,700 1,800 1,900 2,100 required finan
Slide 13: Plan risks and value enhancing opportunities
Viability Plan The outlined plan entails possible risks and value enhancing opportunities 13
Slide 14: Historical Backlog 5-Year Cash Flow Breakdown
Viability Plan Historical Backlog 5-Year Cash Flow Breakdown 14
Slide 15: Sensitivity Analysis
Sensitivity Analysis Valuation Sensibility NPV (€ M)* 3,726 3,458 3,213 2,987 2,779 2,587 2,409 2,245 2,093 WACC -200bps -150bps -100bps -50bps -0bps -50bps -100bps -150bps -200bps WACC: Changes of 50bps 1,643 6.00x 6,069 5,801 5,556 5,330 5,122 4,930 4,752 4,588 4,436 in WACC used for project EPC a
Slide 16: Looking Ahead
Looking Ahead Joaquín Fernández de Piérola Chief Executive Officer, Abengoa 16
Slide 17: Agenda
Agenda Levers Getting What will Main take 1 for Success 2 the Business Back on Track 3 Abengoa be? 4 aways 17
Slide 18: Levers for Success
1 Levers for Success 18
Slide 19: Where are we coming from?
Where are we coming from? However, Abengoa has developed a commercially successful but capital intensive business model As a consequence, during the second half of 2015, Abengoa tried to strengthen its balance sheet and secure additional liquidity with a rights issue that didn’t eventually materiali
Slide 20: Strong set of capabilities to lever for the future
Levers for Success Abengoa has a strong set of capabilities on which to lever for the future viability of the company Operating in growing Leading player in Strong competitive sectors with positive niche markets with position due to outlook and attractive high specifications technological market dyn
Slide 21: Growth expected in installed power and water capacity
1 Significant growth expected in installed power and water capacity worldwide Global installed power capacity in 2014 and Global CSP installed capacity (GW)3 2040 by technology (GW)1 60 53,3 1% 6% 21 % 14% 45 36% 2012 2040 28,7 5% 30 2% 14% 5,584 GW 14,214 GW 6% 65 12,3 % 15 4% 26% 00 2020 2025 2030
Slide 22: Niche markets with high barriers to entry
2 Presence in niche markets with high barriers to entry Energy With a leading competitive position worldwide… 1 Player 2 Player 3 High Barriers to Entry 1 Player 2 Player 3 High Market Share Player 1 Water 2 Player 3 Lower Competition 1 Player 2 Player 3 Higher Profitability Player 1 2 Player 3 22
Slide 23: Continuous innovation and new technologies
3 Through our continuous innovations we have introduced new technologies in the market: 8 research centers and more than 300 patentes applied for 3rd generation trough Superheated Tower Molten Salt Tower 2 patents 16 patents 5 patents Introduced in Xina Project Introduced in Khi Project Introduced i
Slide 24: Excellent execution track-record
4 Excellent execution track-record for both turnkey and concession type projects 2,000 MW +1.5 million +10 GW + 26,000 km 740 MW 1.8 GW 270,000 Strong discipline at both bidding and execution phases… …and a solid customer base worldwide… ~3.8 B€ ~37 B€ ~164 B€ 24
Slide 25: Reliability in the execution phase
4 Abengoa has consistently proven its reliability in the execution phase 17% 16% Execution 3% 9% Diversification by Region 7% ~28,000 M€ 48% USA Europe Latin America Abengoa has experience in complex Over 90% of the projects were project execution in a wide range of completed with deviations in marg
Slide 26: Diversified business mix and Glo-cal presence
5 Diversified business mix and “Glo-cal” presence to capture opportunities in attractive sectors Diversification by Business E&C Diversification by Region 5,756M€ 3,339 M€ 58% 35% 7% Operational 54% 1,799 M€ E&C Industrial Prod. Concessions 22% 721 M€ 11% 352 M€ 8% 258 M€ 5% 183 M€ 1% 26M€
Slide 27: Revenue Visibility
6 Revenue Visibility Strong business prospects and healthy backlog provides revenue visibility Pipeline opportunities diversified by sector & 7.7 B€ of diversified & healthy backlog provides region strong visibility for future years 7% 8% 6% T&D Conventional 8,8 0,1 0,4 By 18% Solar & Renew. 7,5 8,0
Slide 28: Rebalancing business mix towards turnkey projects
7 Rebalancing our business mix towards turnkey projects Backlog Evolution Highlights Pipeline Revenues Turnkey 26% Projects 159 B€ 2.3 2.4 3.2 74% Dec'13 Dec.'15 - Proforma Third-party Concession-type Backlog Concessional Projects 42% 7,7 B€ 4.5 5.6 4.5 58% Dec'13 Dec.'15 - Proforma Thir
Slide 29: Key Concessional Projects: A3T and ACC 4TT
Key Concessional Projects under construction A3T ACC 4TT 265MW Cogeneration with one steam & one gas turbine 660MW Combine Cycle Plant Overview Overview ‣ ‣ ‣ ‣ ‣ ‣ ‣ ‣ ‣ ‣ ‣ ‣ ‣ ‣ ‣ ‣ ‣ ‣ ‣ ‣ ‣ ‣ ‣ WACC 10.75% Net Cash Needs (1) (421.6) M€ WACC 10.75% Net Cash Needs (1) (125.4) M€ 2016 2017 2018 20
Slide 30: Key Concessional Projects: Norte III and Zapotillo
Key Concessional Projects under construction Norte III Zapotillo 907 MW Combine Cycle in Ciudad Juarez 135km Aqueduct for 5,6m3/s Overview Financing Status Overview Financing Status ‣ ‣ ‣ ‣ ‣ ‣ ‣ ‣ ‣ ‣ ‣ ‣ ‣ ‣ ‣ ‣ ‣ ‣ ‣ WACC 8.25% Net Cash Needs (1) (41.8) M€ 2016 2017 2018 2019 2020 WACC 8.25% Net
Slide 31: Key Concessional Projects: Ashalim
Key Concessional Projects under construction Ashalim 110MW CSP Top 5 Projects – NPV Evolution(€ M) Overview Financing Status ‣ ‣ 3.500 ‣ ‣ 3.113 3.187 ‣ 2.977 ‣ 3.000 ‣ ‣ 2.438 2.500 ‣ 1.964 2.000 ‣ 1.500 2016 2017 2018 2019 2020 WACC 8.25% Net Cash Needs (1) (11.3) M€ 2016 2017 2018 2019 2020 NPV E
Slide 32: Getting the Business Back on Track
2 Getting the Business Back on Track 32
Slide 33: Re-start of E&C Activity – Business Development
Re-start of E&C Activity – Business Development Abengoa would require over 500 M€ of guarantees available in 2016 to re-start normal commercial activity Commercial activity during the 5bis period has been negatively impacted at three different levels: Abengoa's business During the same period, proje
Slide 34: Re-start of E&C Activity - Construction
Re-start of E&C Activity - Construction Construction activity has also been negatively affected with significant slow-down or complete halt in execution of different projects Shortage of financing and technical guarantees over the 5bis period has had a negative impact on the pace of execution that d
Slide 35: Rightsizing of Overheads
Rightsizing of Overheads New business focus must be supported by an adequately sized organisation with the adequate size. Target structure costs are set at ~250 M€ per year which implies a 45% reduction vs. 2015 Total Overhead Cost (M€) Initiatives for Rightsizing of Overheads 2015A 2016E 2018E Red
Slide 36: What will Abengoa be?
/ What will f < Abengoa be? é ra —_ V q . z |
Slide 37: Do's and Don'ts of New Abengoa
Do's and Don'ts of New Abengoa The new business approach sets clear lines of what the focus of Abengoa’s operations should be New Abengoa Viability Plan does not include New Abengoa Viability Plan includes 37
Slide 38: What kind of projects?
What kind of projects? Abengoa will focus on turnkey projects and concession-type projects with financial partners so that Abengoa’s investment is limited to 10% of project value Turnkey Concession-type What’s the value of projects concession-type projects? projects ‣ 100% third party equity ‣ 2/3 t
Slide 39: Corporate governance best practices
Corporate Governance & Risk Control Abengoa will adhere to international corporate governance best practices Investment Committee Financial Discipline & Risk Control 39
Slide 40: Main take aways
4 Main take aways 40
Slide 41: Main take-aways
Main take-aways A viable company with solid fundamentals The development of … and the size of our Abengoa has a commercially viable backlog and pipeline unique engineering cutting-edge technology provides us with revenue and construction has become Abengoa’s visibility business key competitive advan
Slide 42: Financial Restructuring Agreement
Financial Restructuring Agreement Pedro Pasquín Lazard 42
Slide 43: Background
1 Background
Slide 44: Background
Background ‣ Abengoa (the “Company” or “ABG”) has ‣ The group's diligence exercise is ‣ A subgroup of creditors comprising reached an in principle agreement (the nearing completion but subject to this Attestor Capital, Centerbridge, DE “Restructuring Agreement”) with the Bank exercise, documentation
Slide 45: Background (cont'd)
Background (cont’d) The aggregate exposure of Subject to contract and credit A subgroup of creditors The following slides the creditors involved in committee approval, each G6 will sign this week and summarise the main the Restructuring lender will commit to either roll- release to the Company a ele
Slide 46: Restructuring Agreement
Restructuring 2 Agreement
Slide 47: New Abengoa Cash Needs to Re-invigorate Activity
Restructuring Agreement New Abengoa Cash Needs to Re-invigorate Activity The Restructuring Agreement proposes new financing as detailed below Bondholder Company operations line roll-over and other New Money Facility (“NMF”) €1,500 (a) New Bonding Lines 800 M€ Roll-Over Money 231 M€ + c
Slide 48: New Money Main Terms Summary
Restructuring Agreement The Restructuring Agreement - New Money Main Terms Summary New Money providers and New Bonding providers will obtain 55% and 5% of post reorganisation equity respectively New Money New Money Facility Roll Over Facility New Bonding Roll Over Bonding(a) 231 Amount (€M) 1,500 –
Slide 49: Existing Financial Debt
Restructuring Agreement - Existing Financial Debt The Restructuring Agreement entails a debt reduction by Affected debt is Abengoa’s debt which does not have a the creditors of 70% of the affected debt specific collateral or structural priority as shown below: Existing Debt Post Restructuring Unaf
Slide 50: The Agreement - Existing Financial Debt
The Agreement - Existing Financial Debt The proposed debt reduction of Abengoa’s corporate debt of c.€5.6bn has been defined in order to establish a long term sustainable capital structure supported by (i) the cash flows defined in the Viability Plan, (ii) the value of assets to be divested in the
Slide 51: Old Money Main Terms Summary
Restructuring Agreement The Restructuring Agreement Old Money Main Terms Summary The Restructuring Agreement entails a debt reduction of 70% of affected debt in exchange for 35% of post reorganisation equity Old Money Restructured Old Debt Facility (a) Existing Bonding NRDP Local Debt Maintained Am
Slide 52: Pro Forma Capital Structure
Restructuring Agreement Pro Forma Capital Structure Abengoa will have €4,923m corporate debt post Restructuring Debt Instrument Total (€M) Interest Maturity Restructured Old Debt Facility 2,336.2 25bps Cash+ 1.25%PIYC 2019 - 2021 Local Corporate Financing 233.0 Current terms maintained Cebures 111.4
Slide 53: New Abengoa Equity
New Abengoa Equity ‣ Equity assigned to creditors: ‣ Listing to be maintained ‣ ‣ Dual share structure to be . Entitled to up to 5% collapsed into warrants once full amortisation of New Debt, Roll-Over Debt and Old ‣ Debt (all plus interest costs and fees) struck at par with a 5.5 year maturity 35%
Slide 54: Key Conclusions from the Creditors' Advisors
Key Conclusions from the Creditors’ Advisors Ángel Martín KPMG Manuel Martinez-Fidalgo Houlihan Lockey 54
Slide 55: Next steps, timeline and process
Next steps, timeline and process Jaime Cano Cortés Abogados 55
Slide 56: Actions for the execution of the standstill agreement
Restructuring Next Steps Actions for the execution of the standstill agreement 16-17 March 18 March 18-27 March 27 March 27 March 28 March 56
Slide 57: Main take-aways
Main take-aways Antonio Fornieles Executive Chairman, Abengoa 57
Slide 58: Re-focused business under new principles
Main take-aways Re-focused business under new principles Financial Aim to Growth on core Best in class Operational discipline; develop and competencies; technology our efficiency availability of retain talent business competitive and leaner financial development advantage organization resources will
Slide 59: Thank you
ABENGOA Thank you