Grupo Argos S.a. · BVC:GRUPOARGOS

Grupo Argos — Investor Presentation (September 2019)

31 slides from Grupo Argos's investor presentation, September 2019

  1. Slide 1: Corporate Presentation September 2019

    CORPORATE PRESENTATION September 2019

  2. Slide 2: Important Note

    CORPORATE PRESENTATION SEPTEMBER 2019 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. M

  3. Slide 3: Grupo Argos at a Glance

    CORPORATE PRESENTATION AUGUST 2019 WHO WE ARE GRUPO ARGOS AT A GLANCE Liquid vehicle1 to invest in infrastructure in Colombia Strategic focus in Cement, Energy, Road and Airport Concessions 3 REGIONS Solid and articulated portfolio with ~ USD 15.5 billion in consolidated assets Balanced in regions,

  4. Slide 4: Strategic Portfolio Focused in Infrastructure

    CORPORATE PRESENTATION SEPTEMBER 2019 PORTFOLIO STRATEGIC PORTFOLIO FOCUSED IN INFRASTRUCTURE USD 4.5 bn USD 4.4 bn USD 1.3 bn MARKET CAP *1 REVENUES *2 EBITDA *2 CEMENT ENERGY CONCESSIONS In Infrastructure STRATEGIC 58.0% 52.9% 99.9% *3 *8 *7 *7Revenues: USD 1.1 bn *7 Revenues: USD 2.8 bn Revenues:

  5. Slide 5: Well Balanced Sources of Revenue and EBITDA

    CORPORATE PRESENTATION SEPTEMBER 2019 PORTAFOLIO WITH WELL BALANCED SOURCES OF REVENUE AND EBITDA “ REVENUE CONTRIBUTION FROM STRATEGIC BUSINESS LTM JUNE 19 EBITDA CONTRIBUTION FROM STRATEGIC BUSINESS LTM JUNE 19 13% 24% 31% 11% 15% 45% USD 2.5 bn1 25% USD 4.3 bn1 46% USD 0.6 bn1 54% USD 1.1 bn1 Dec

  6. Slide 6: Discipline Translated into Positive Results, EBITDA CAGR of 16%

    CORPORATE PRESENTATION AUGUST 2019 FINANCIAL RESULTS DISCIPLINE THAT HAS TRANSLATED INTO POSITIVE RESULTS WITH EBITDA CAGR OF 16% IN LAST 5 YEARS GRUPO ARGOS CONSOLIDATED REVENUES (COP billions) GRUPO ARGOS CONSOLIDATED EBITDA (COP billions) CAGR (2013 – 2018) 13.4% CAGR (2013 – 2018) 15,8% 36% 37%

  7. Slide 7: How We Generate Value

    CORPORATE PRESENTATION AUGUST 2019 HOW WE GENERATE VALUE 7 August 2019

  8. Slide 8: Strategy Towards Value Generation and Sustainable Growth

    CORPORATE PRESENTATION SEPTEMBER 2019 HOW WE GENERATE VALUE GRUPO ARGOS STRATEGY TOWARDS VALUE GENERATION AND SUSTAINABLE GROWTH “ Definition and execution of the holding´s role Consistent strategy in all businesses with a focus on profitability Alignment of the administration's objectives with thos

  9. Slide 9: Guidelines as Strategic Architect

    CORPORATE PRESENTATION AUGUST 2019 HOW WE GENERATE VALUE GRUPO ARGOS GUIDELINES AS STRATEGIC ARCHITECT – HOW WE GENERATE VALUE “ Efficient Capital Allocation + High Corporate Governance Standards + Social Responsibility + Human Talent Management STRATEGIC FINANCIAL INSTITUTIONAL ASSET AND TALENT MAN

  10. Slide 10: Coherent Strategy in All Businesses with Focus in Profitability

    CORPORATE PRESENTATION SEPTEMBER 2019 HOW WE GENERATE VALUE COHERENT STRATEGY IN ALL BUSINESSES WITH FOCUS IN PROFITABILITY “ CEMENTOS ARGOS Focus on efficiency and strategic asset allocation • Potentialize assets in the US Coherence • Focus on decreasing leverage + PROFITABILITY CELSIA STRATEGY Fin

  11. Slide 11: Cementos Argos – Efficiency Focus and Strategic Asset Allocation

    CORPORATE PRESENTATION AUGUST 2019 HOW WE GENERATE VALUE CEMENTOS ARGOS – EFFICIENCY FOCUS AND STRATEGIC ASSET ALLOCATION USD 450 mn USD 537mn USD 284mn EBITDA 2018 Divesting non-core assets Free Cash Flow 2018 4.5% YoY (2016 to 2018) 72% YoY OPERATING EFFICIENCY CAPITAL ALLOCATION RETURN Production

  12. Slide 12: Celsia – Strengthening Distribution and Generation Business

    CORPORATE PRESENTATION AUGUST 2019 HOW WE GENERATE VALUE CELSIA – STRENGTHENING OF THE DISTRIBUTION AND GENERATION BUSINESS WITH FOCUS IN RETURNS USD 303 mn USD 515mn USD 125mn EBITDA 2018 Purchase Tolima´s assets 2019 Free Cash Flow 2018 4% CAGR (2016-2018) +491,000 users 23% YoY PROFITABLE GROWTH

  13. Slide 13: Odinsa – Simplification, Capital Structure and Growth Pipeline

    CORPORATE PRESENTATION AUGUST 2019 HOW WE GENERATE VALUE ODINSA - SIMPLIFICATION, CAPITAL STRUCTURE AND FOCUS ON BUILDING GROWTH PIPELINE USD 161 mn USD 4 bn USD 15 mn EBITDA 2018 Net Controller Income Project pipeline 20% CAGR (2015-2018) 12% CAGR (2015-2018) GROWTH - PROJECTS CAPITAL ALLOCATION CA

  14. Slide 14: Progress Made in 1H2019

    CORPORATE PRESENTATION SEPTEMBER 2019 HOW WE GENERATE VALUE PROGRESS MADE IN 1H2019 Successful asset Capital structure Divestment of non- allocation strategy optimization at asset level strategic assets and reduction of leverage ▪ Acquisition of Tolima assets for ▪ Issuance of Quiport bonds for ▪ Di

  15. Slide 15: Variable Remuneration Scheme Aligns Shareholders and Company Objectives

    CORPORATE PRESENTATION SEPTEMBER 2019 HOW WE GENERATE VALUE VARIABLE REMUNERATION SCHEME SEEKS TO ALIGN SHAREHOLDERS AND COMPANIES OBJECTIVES SHORT TERM LONG TERM SUSTAINABILITY OBJECTIVES OBJECTIVES • EBITDA • ROCE • Maintain high standards in • Net income for the • FCO / EBITDA ESG, measured by ex

  16. Slide 16: Controllable Management Expenses Decreased 8.3% in Real Terms

    CORPORATE PRESENTATION AUGUST 2019 HOW WE GENERATE VALUE BETWEEN 2015 -2018, CONTROLLABLE MANAGEMENT EXPENSES HAVE DECREASED 8.3% IN REAL TERMS SG&A COP billions GROSS CAGR: -4.0% GA NDU Impuestos Taxes D&A Proyectos GA ProjectsGA Grupo Argos Controllable Management Cost 165 135 133 28 141 -8.3% 7 C

  17. Slide 17: Strengthening Cash Flow Received with Dividend Spread

    CORPORATE PRESENTATION AUGUST 2019 HOW WE GENERATE VALUE STRENGTHENING OF THE CASH FLOW RECEIVED WITH DIVIDEND SPREAD +COP 200 BN HISTORIC DIVIDENDS COP bn Positive dividend spread (received - paid) 591 USD 158 mn 463 115 520 27 14 + 8.8x 6 25 between 2016 and 2019E 24 70 50 78 65 96 314 49 256 99 5

  18. Slide 18: In 2018 We Added to Society 1.8x the Benefit Taken

    CORPORATE PRESENTATION AUGUST 2019 HOW WE GENERATE VALUE IN 2018 WE ADDED TO THE SOCIETY 1.8X THE BENEFIT TAKEN VALUE ADDED STATEMENT OF GRUPO ARGOS 2018 (USD mn) ECONOMIC SOCIAL ENVIRONMENT 332.4 120.5 120.4569404 0.04 0.036919039 5.25 5.247761994 332.3904542 -0.001 -0.000898768 -0.01 -0.010132372

  19. Slide 19: Solid Commitment to Corporate Governance

    CORPORATE PRESENTATION AUGUST 2019 HOW WE GENERATE VALUE SOLID COMMITMENT TO CORPORATE GOVERNANCE BOARD OF DIRECTORS SHAREHOLDERS ROSARIO CÓRDOBA (Chair of the Board) - Independent GrupoSura Grupo Sura 25.6% 21.6% CLAUDIA BETANCOURT Colombian 35.5% Non – Independent Grupo GrupoNutresa Nutresa Fondos

  20. Slide 20: Key Messages That Support Our Value Generation Strategy

    CORPORATE PRESENTATION AUGUST 2019 HOW WE GENERATE VALUE KEY MESSAGES THAT SUPPORT OUR VALUE GENERATION STRATEGY Track record that demonstrates the ability of Grupo Argos to acquire, transform and generate value 1 successfully from the companies it controls 2 Focus on profitable growth and capital a

  21. Slide 21: Capital Structure

    CORPORATE PRESENTATION AUGUST 2019 CAPITAL STRUCTURE 21 August 2019

  22. Slide 22: Flexible Capital Structure That Supports the Group's Strategy

    CORPORATE PRESENTATION AUGUST 2019 CAPITAL STRUCTURE FLEXIBLE CAPITAL STRUCTURE THAT SUPPORTS THE GROUPS STRATEGY AAA 15% 3.5x COP < ~ > 420 bn LOCAL ISSUER RATING Debt / Portfolio Value Debt /Div. received Div flow Received 2019 FITCH1 july 2019 Aggressive growth strategy Stable dividend flow 66% c

  23. Slide 23: Leverage Decreases by 16% YoY Providing Flexibility

    CORPORATE PRESENTATION SEPTEMBER 2019 CAPITAL STRUCTURE GRUPO ARGOS LEVERAGE DECREASES BY 16% YoY PROVIDING FLEXIBILITY INDEBTEDNESS* COP bn LEVERAGE INDICATORS Max: 3.5x Adjusted EBIDTA** 1,772 -16% (COP billion): Max: 3.5x 94 1,494 44 • Jun-2018: 975 759 PC • Jun-2019: 717 --4% 733 Repos 3.9x Bono

  24. Slide 24: Leverage Ratios Evolution in Line with Capital Allocation Strategy

    CORPORATE PRESENTATION AUGUST 2019 CAPITAL STRUCTURE LEVARAGE RATIOS EVOLUTIONS IN LINE WITH EFFICIENT CAPITAL ALLOCATION STRATEGY 3000 7.00x Deuda bruta Gross Debt Ebitda adj. Adj EBITDA Deuda bruta Gross Debt / Ebitda / EBITDA 6.00x 2500 944 From 2015 to 2018 Grupo 695 5.00x Argos has: 2000 679 55

  25. Slide 25: Closing Cash, Seeking Efficiency in Administration of Resources

    CORPORATE PRESENTATION SEPTEMBER 2019 CAPITAL STRUCTURE CLOSING CASH, SEEKING EFFICIENCY IN THE ADMINISTRATION OF RESOURCES INDIVIDUAL FREE CASH FLOW COP bn NOTES 1 Dividendos netos Net dividends 131 1. Dividends received COP 276 bn, dividends paid COP 145 bn Ingresos Urban NDU income development 28

  26. Slide 26: Consolidated Debt Backed by Capital Markets

    CORPORATE PRESENTATION AUGUST 2019 CAPITAL STRUCTURE CONSOLIDATED DEBT BACKED IN GREAT MEASURE BY CAPIATL MARKETS DEBT* COP mn USD 5.4 mn Debt distribution as of 2Q2019 17,785 15,964 1,307 1,362 +11% 2,454 International Banks 33% (+12% A/A) 2,360 Opain Local Banks 20% (+7% A/A) 3,080 5,487 Odinsa Ce

  27. Slide 27: 2Q2019 Financial Results Annexes

    CORPORATE PRESENTATION SEPTEMBER 2019 2Q2019 FINANCIAL RESULTS ANNEXES 27 September 2019

  28. Slide 28: Strategic Discipline Translates into a More Profitable Portfolio

    CORPORATE PRESENTATION SEPTEMBER 2019 2Q2019 FINANCIAL RESULTS ANNEXES STRATEGIC DISCIPLINE THAT TRANSLATES INTO A MORE PROFITABLE PORTFOLIO 1.1 287 133 405 ** COP COP COP COP tn bn bn bn CONSOLIDATED EBITDA 2Q EBITDA 2Q19 EBITDA 2Q19 EBITDA 2Q19 18% YoY* 7% YoY 5% YoY 23% YoY Grupo Argos consolidat

  29. Slide 29: Quarterly Results Consistent with Executed Strategy

    CORPORATE PRESENTATION SEPTEMBER 2019 2Q2019 FINANCIAL RESULTS ANNEXES QUARTERLY RESULTS CONSISTENT WITH EXECUTED STRATEGY COP billion 2Q - 2019 2Q - 2018 Var (%) Jun-2019 Jun-2018 Var.(%) Revenues1 3,860 3,617 7% 7,582 6,928 9% Costs, expenses & other revenues Operating profit 3,250 610 3,072 545 6

  30. Slide 30: Results in Line with Profitable Growth Strategy in Core Businesses

    CORPORATE PRESENTATION SEPTEMBER 2019 2Q2019 FINANCIAL RESULTS ANNEXES RESULTS IN LINE WITH PROFITABLE GROWTH STRATEGY IN OUR CORE BUSINESSES RELEVANT FIGURES Individual Income Statement COP bn 2Q - 2019 2Q - 2018 Var (%) Jun-2019 Jun-2018 Var.(%) Revenue 96 99 -2% 404 950 -57% Costs and other expen

  31. Slide 31: Contact

    CORPORATE PRESENTATION AUGUST 2019 CEO Jorge Mario Velasquez CFO Alejandro Piedrahita Investor Relations Director Natalia Agudelo Tel: (574) 319-8712 E-mail: nagudelop@grupoargos.com Investor Relations Analyst Jaime Andres Palacio Tel: (574) 3198400 ext 22388 E-mail: jpalaciop@grupoargos.com www.gru

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