Slide 1: 2017 Financial Results
we build value 2017 Financial Results 15 March 2018 PowerPoint Presentation Guidelines Author Job Title Gabes-Sfax Motorway, Tunisia March 15, 2018
Slide 2: Agenda
Agenda 2017 key messages Pietro Salini Chief Executive Officer Financial Update Massimo Ferrari General Manager Finance & Corporate Group CFO Business update Pietro Salini Chief Executive Officer 2017 Financial Results 2 March 15, 2018
Slide 3: 2017 key messages
Agenda 2017 key messages Pietro Salini Chief Executive Officer 2017 Financial Results 3 March 15, 2018
Slide 4: FY17 Key Earnings Highlights
FY17 Key Earnings Highlights Strong order intake; Lane order backlog hit record €3 billion Solid underlying performance Significant improvement in net income A Sustainable gross debt and sound financial structure Strongly committed to growing the US business Dealing with legacy issues: V
Slide 5: Addressing Market Concerns
Addressing Market Concerns The business does NOT need any equity funding • Balance sheet well capitalized and equity reserves greater than €1.1 billion Potential M&A will only focus on growing US business and NOT participate in any bail out capital increases The Company is assessing changing t
Slide 6: Financial Update
Financial Update Massimo Ferrari General Manager Finance & Corporate Group CFO 2017 Financial Results 6 March 15, 2018
Slide 7: Adjustments data | disclaimer
Adjustments data | disclaimer The figures presented for FY16 and FY17 are represented adjusting the IFRS data: • to reflect on a proportional basis the financial results of the jv not controlled by Lane at revenues, EBITDA and EBIT level • exclude the effects arising from impairment of the financi
Slide 8: FY17 Earnings underlying performance
FY17 Earnings underlying performance Infrastructure market still healthy and growing A strong pipeline of commercial activity New orders: €6.7 billion, of which Lane €2.6 billion Lane: Backlog grew up by 19% in 2017, reaching its record high of €3 billion Consolidated revenues growth: +5.8
Slide 9: 2017 financial results
2017 financial results* 1 Adjusted Revenues Bridge (€/M) +5.8% 135 6,482 6,348 6,348 6,125 2016 2017 forex 2017 effect 2 EBITDA (€/M) 3 EBIT (€/M) 4 Group net profit (€/M) 9.4% 9.6% Margin % 5.1% 5.4% Margin % 577 625 314 347 211 70 2016 2017 2016 2017 2016 2017 *Adjusted pre-Venezuela and at consta
Slide 10: Overview of currency mix
Overview of currency mix 1 2017 Geographical Revenues Distribution 16% 26% 53% 5% 100% 74% 74% 53% 58% USD BIRR other total non EUR EUR total 2 2017 Cash and Cash Equivalent Distribution 13% 17% 16% 54% 100% 70% 83% 83% 54% USD BIRR other total non EUR EUR total FY17: more than 70% of Groups’ reve
Slide 11: Margins improvement evolution
1200 20.0% Margins improvement evolution 18.0% 1000 16.0% Profitability Evolution [€/M] Ebitda Ebit 14.0% 800 12.0% +110bp 600 9.6% 10.0% EBITDA margin 1200 9.4% 8.5% 8.0% 400 +40bp 1000 5.4% EBIT margin 6.0% 5.1% 4.6% 4.0% 200 352 Peers' Construction Ebit 800 281 314 2.0%around margin consistently
Slide 12: Strong improvements below EBIT line
Strong improvements below EBIT line Profit (loss) on exchange rates 2016 2017 Management View (€/M) Ethiopia 3.2 (44.4) 2016 2017 Change Venezuela (USD denominated) (1.8) (26.7) [€/million] adjusted adjusted Headquarter 1.6 (17.5) EBIT 314 347 11% 33 Tajikistan (2.1) (14.4) financial income 45 65 46
Slide 13: Net income
Net income Net income bridge (€/M) +200% +67% 93 211 117 117 70 224 -107 2016 2017 venezuela 2017 forex 2017 write-off ex-venezuela effect Underlying FY17 Group net income: 3x FY16 Group net income 2017 Financial Results 13 March 15, 2018
Slide 14: Financial structure improvements
Financial structure improvements Progressively Reduced Average Corporate Debt Cost Increasing Fix-rate M/LT Corporate Debt Portion 2.95 yrs 3.18 yrs 3.73 yrs Duration 3.8% 3.5% 3.2% 53% 70% 85% Fixed Dec 2015 Dec 2016 Dec 2017 Variable 47% €500 million 7-year bond issue a particularly competitive
Slide 15: Successful large refinancing operation
Successful large refinancing operation 1 2017 Net Financial Position [€/M] 2,304 Bank Loan Bond Leasing SPV Net debt 130 1,387 (1.603) 703 (57) 1.3 (190) 457 768 Total Total Cash Net Derivatives Net Financial Position Venezuela Forex Net Financial Position Gross debt & Other Financial "Normalized" A
Slide 16: A Sustainable gross debt de-leveraged
A Sustainable gross debt de-leveraged 2016 GROSS DEBT / EBITDA ratio 3.7x in 2017 Peers' average 14.0 ex-SAL 5.2x 8.3 5.5 5.7 3.5 4.2 4.3 1.2 1.7 2.4 Skanska Peer 1 Strabag Peer 2 Hochtief Peer 3 Vinci4 Peer Salini ACS5 Peer Astaldi Peer 6 FCC 7 Peer Ferrovial Peer 8 Sacyr Peer 9 Impregilo Not Not N
Slide 17: Cash flow generation
Cash flow generation Adjusted Operating Free Cash Flow Before Dividends and Investments (€/M) 625 (234) (97) DISPOSAL (116) CAPEX 156 €171m €75m (59) (51) 68 EBITDA adj* Change in NWC CAPEX (net Current taxes paid Net financial other 2017 2016-2017 of disposal) expenses OFCF OFCF Generated more th
Slide 18: Italian projects
Italian projects Italian Construction Backlog Italian Construction industry still challenged, but recent positive 31% of total Group developments support Salini Impregilo growth Challenged industry in Italy… …but recent positive developments Low infrastructure investment vs. COCIV received app
Slide 19: New IFRS: preliminary estimates
New IFRS: preliminary estimates Main changes introduced Implementation approach by IFRS 15 (revenues recognition) Preliminary analysis based on FY17 figures. IFRS 15 first adoption to determine a reduction in net assets and equity in the opening IFRS 15 does not balance sheet on 1 January 2018
Slide 20: Venezuela exposure
Venezuela exposure 1 Our projects in Venezuela Two railways and a hydroelectric projects executed with Italian partners Projects are considered to be priority infrastructures both in economic-industrial and social terms Financial receivables 2 Deterioration of Venezuela’s economic and financial
Slide 21: Addressing Venezuela's write-down
Addressing Venezuela’s write-down 3 Valuation Approach In light of the Venezuelan sharply worsened economic situation, the Group, assisted by one of the big four audit company, adopted a prudent approach for the assessment of the total exposure and recoverability related to the undergoing projects
Slide 22: Asset value optimization; Autopistas del Sol case
Asset value optimization; Autopistas del Sol case Autopistas Del Sol – Share price evolution (in ARS) 130 +80% 120 110 100 90 80 70 60 50 Autopistas del Sol is listed in Bolsas y Mercados Argentinos (BYMA) Current Market CAP Ca. €430m Salini Impregilo stake Ca. €85m Investment almost completely wr
Slide 23: Business update
Business update Pietro Salini Chief Executive Officer 2017 Financial Results 23 March 15, 2018
Slide 24: Positive outlook and drivers for the Construction market
Positive outlook and drivers for the Construction market 1 2 3 4 Aging infrastructure Convergence developed vs. Water availability and Urbanization particularly in developed developing markets management markets Developed markets closing Mass-urbanization driving the Urbanization putting strai
Slide 25: Construction market large and growing, ca. 450 B€ awarded in 2017
Construction market large and growing, ca. 450 B€ awarded in 2017 Addressable Market Development [€/Trillion] ca. 3.5 2.9 3.2 0.5 – 0.7 0.5 0.4 Awarded ca. 3 2.6 2.7 Post-poned / In-Planning 2016 2017 2018 forecast Ca. 70% projects awarded in 2017 with value >1 B€ (ca. 100 projects) 0.5-0.7 TN€
Slide 26: 2017 new orders
2017 new orders New Orders Distribution Northeast Boundary Tunnel [€/M] I-395 Express Lanes project Three Rivers Protection Salini Impregilo 3,547 Florida Turnpike project Eni’s Headquarters in Milan Lane Construction 2,563 Unionport Bridge Napoli – Bari HSR I 70 Reconstruction Fisia
Slide 27: A strong pipeline of commercial activity
A strong pipeline of commercial activity €6.4B €/bn €15.1B commercial activity €9.5B Europe Plants & Paving €8.3B €12.7B Railways & Metros Middle East USA €7.1B Roads Asia & Australia (€/B) Africa Acquired 6.7 Buildings Awaiting outcome/best offer 6.2 LatAm Private negotiations 13.4 Tenders to be pr
Slide 28: Risk profile improved
Risk profile improved 1 Top 10 Projects Concentration Top 10 projects revenues share decreased from 66% in 2014 to 47% in 2017 2 Geographical Revenue Distribution 2014 2017 33% 26% 26% 23% 13% 13% 14% 14% 10% 8% 8% 5% 4% 3% Africa Middle East Europe Asia & Australia USA LatAm Italy US confirmed
Slide 29: US infrastructure market outlook
US infrastructure market outlook 1 Cumulative US Infrastructure Needs 2016-25 ($TN)* 0.2 0.2 0.2 0.3 15,500 dams (17% of total) 0.9 identified as high-hazard 0.9 56,000 bridges (9% of total) 4.3 4.5 4.6 4.1 structurally deficient 3.8 2.9 2.0 2.0 Road congestion cost 160 B$ in wasted time and f
Slide 30: Lane track records and perspectives
Lane track records and perspectives In 2017 Lane achieved best-in-class book-to-bill of 1.46x Lane backlog grew up by 19% in 2017, reaching its record high of €3 billion Since SAL acquisition, the backlog of Lane has grown 36% Investing in Lane • Opening new commercial offices in New York, A
Slide 31: Strategic Guidelines and BP Targets
STRATEGIC GUIDELINES AND BP TARGETS 2017 Financial Results March 15, 2018
Slide 32: Group strategic guidelines
Group strategic guidelines Going forward the Group will focus on five strategic priorities Top Line Costs Cash Focus on Step change to Reduction of Optimization Improvement footprint Lane's growth direct costs of corporate of Cash generation costs Increase monitoring Maintain Water & Lane scale up
Slide 33: Cash flow generation drivers
Cash flow generation drivers Five key factors will allow Salini Impregilo to continue generating free cash flow Project Mix CAPEX NWC New orders Extraordinary efficiencies management items Project mix shifting CAPEX optimization NWC to be optimized Advance payments Expected cash-in of towards projec
Slide 34: Business Plan updated targets 2018 & 2019
Business Plan updated targets 2018 & 2019 2017 2018 2019 Original BP targets reviewed for: REVENUES € 6.5B € 6.8 – 7.0B € 7.6 – 8.0B Forex effect (headwinds of approx. €1B per year) Adoption of IFRS 15 EBIT margin 5.4% ≥5 % >5% Book to bill 1.037 x >1. 1 x >1.1 x €156M ca. €500M 2018-2019 FCFO O
Slide 35: Appendix
appendix 2017 Financial Results March 15, 2018
Slide 36: Income statement adjustments
Income statement adjustments 2017 Mgm. view 2017 Mgm. Var FY17 vs FY16 Impairment Venezuela - view 2016 Mgm. View normalized (€/M) 2017 Mgm. View Venezuela Normalized Forex Normalized Actual Revenue 6,348 - 6,348 (135) 6,482 6,125 358 5.8% EBITDA 584 - 584 (41) 625 577 48 8.3% EBITDA margin 9.2% 9.2
Slide 37: Income statement
Income statement December 31, 2016 December 31, 2017 values in thousands EUR (§) Revenue 5,760,358 5,939,976 Other income 123,451 167,265 Totale revenue 5,883,809 6,107,241 Total costs (5,330,972) (5,527,089) EBITDA 552,837 580,152 EBITDA % 9.4% 9.5% Amortisation, depreciation, impairment losses and
Slide 38: Statement of financial position
Statement of financial position values in thousands EUR December 31, 2016 December 31, 2017 Non-current assets 1,173,270 1,120,308 Goodwil 175,188 155,179 Non-current assets (liabilities) held for sale 6,032 5,683 Provisions for risks (105,765) (101,531) Post-employment benefits and employee benefit
Slide 39: Net financial position
Net financial position December 31, 2016 December 31, 2017 values in thousands EUR Non-current financial assets 62,458 188,468 Current financial assets 323,393 94,308 Cash and cash equivalents 1,602,721 1,320,192 Total cash and cash equivalents and other financial assets 1,988,572 1,602,968 Bank and
Slide 40: Disclaimer
Disclaimer This presentation may contain forward-looking objectives and statements about Salini Impregilo’s financial situation, operating results, business activities and expansion strategy. These objectives and statements are based on assumptions that are dependent upon significant risk and uncert
Slide 41: Thank you
_.G impaaitt Z we build value Thank you