Grupo Argos S.a. · BVC:GRUPOARGOS
Grupo Argos — Investor Presentation (January 2018)
32 slides from Grupo Argos's investor presentation, January 2018
Slide 1: Investors Presentation January 2018
Investors Presentation January 2018
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 res
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 • Holding company with a solid and articulated portfolio with USD 16 Countries billion in AUM • With a balanced portfolio in
Slide 4: Our Portfolio: Holding with a Balanced Portfolio Focused in Infrastructure
OUR PORTAFOLIO HOLDING WITH A BALANCED PORTFOLIO FOCUSED IN INFRASTRUCTURE Mkt Cap1 Revenue2 EBITDA2 USD 5.9 bn USD 4.9 bn USD 1.3 bn STRATEGIC - In Infrastructure Revenue and Ebitda contribution from Strategic Portfolio Cement Energy Concessions 17% 13% Cement 23% 48% Energy 65% Concessions 34% 55.
Slide 5: Strategy with Strategic Architect Principles
STRATEGY WITH STRATEGIC ARCHITECT PRINCIPLES Defining a Group Governance Model, as well Ensuring coherence in the corporate strategy and as a Control and Risks System that ensures alignment with the competitive strategy of the Institutional subsidiaries; empowering innovation Strategic the protectio
Slide 6: Strategy: Following a Methodology Focused on Profitability
STRATEGY FOLLOWING A METHODOLOGY FOCUSED ON PROFITABILITY Portfolio profitability Profitable growth Efficient capital allocation High Improve performance Invest to grow A Attractiveness of the industry Invest to grow Protect position then skills ✓ Potential Grow selectively improved market growth ✓
Slide 7: History: From Cement Conglomerate to Active Infrastructure Holding
REFLECTED IN THE TRANSFORMATION OF THE PORTFOLIO: FROM CEMENT CONGLOMERATE TO AN HISTORY ACTIVE INFRASTRUCTURE HOLDING COMPANY Growth & Internationalization Profitability 2003 - 2007 2008 - 2011 2012 - 2014 2015 - 2017 • Split of non-cement assets • Infrastructure business consolidation • Strategic
Slide 8: 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 (%) 25 21.1 21.5 19.8 20.3 25% 20% 1
Slide 9: Strategy and Track Record as Active Portfolio Manager
STRATEGY AND TRACK RECORD AS AN ACTIVE PORTFOLIO MANAGER IN THE LAST YEARS 1 Simplification and focus 2 Portfolio profitability 3 Profitable growth 4 Efficient capital allocation TYPE OF HOLDING: ACTIVE MANAGER 2014 2015 2016 ✓ 6.3 mm Sura PF ✓ Divestment of 300,000 ✓1 Completed acquisition of share
Slide 10: Track Record: Acquisition of Odinsa and Control of Opain
TRACK RECORD 1 CONSOLIDATION OF THE INFRASTRUCTURE PILLAR WITH THE ACQUISITION OF ODINSA AND THE CONTROL OF OPAIN El Dorado Airport Between April 2015 and December 2016 Grupo Argos acquired 98.6% of Odinsa through a series of transactions. ODINSA - 99% Of voting rights after total transactions = COP
Slide 11: Track Record: Consolidation in the Concessions Business
TRACK RECORD 1a FOLLOWED BY A SUCCESSFUL CONSOLIDATION IN THE CONCESSIONS BUSINESS: A CLEAR EXAMPLE OF OUR ROLE AS STRATEGIC ARCHITECTS In Operation Under Construction Santa Marta AKF Pacífico II AKF BTA ADN – Paraguachón Hatovial 60%60% Road Concessions 79% 79% 43% 43% 40% 22% FROM: Road Concession
Slide 12: Track Record: Sale of Compas
TRACK RECORD 2 SALE OF COMPAS REAFFIRMING OUR COMMITMENT TO EFFICIENTLY MANAGE THE INVESTMENT PORTFOLIO Contribution to the strategy as of Sept • Múltiplos Strategic Rational • Múltiplos Multiples • Múltiplos2017 ▪ Fulfillment of investment thesis Change in debt profile ▪ Exercise role of active hol
Slide 13: Track Record: Celsia's Announcement
TRACK RECORD 3 CELSIA’S ANNOUNCEMENT IS IN LINE WITH OUR SIMPLIFICATION AND EFFICIENT CAPITAL ALLOCATION STRATEGY Simplification of the strategic architecture of Grupo Argos • Consolidation of the energy business in a single vehicle • Greater clarity of the holding structure for the market Strengthe
Slide 14: Financial Results
FINANCIAL RESULTS THAT HAVE TRANSLATED INTO GROWING RESULTS GRUPO ARGOS CONSOLIDATED REVENUES GRUPO ARGOS CONSOLIDATED EBITDA (COP bn) (COP bn) USD 4.8 bn USD 1.2 bn 16,000 14,553 3,620 14,000 12,700 12,000 10,829 10,988 2,780 2,932 2,635 10,000 9,296 2,225 7,629 1,907 8,000 6,681 1,616 6,000 4,000
Slide 15: Leverage
LEVERAGE AND LEVERAGE INDICATOR AT THE INDIVIDUAL LEVEL AT A MINIMMUM OF 2.2x, WITH CASH POSITION CLOSING AT COP 267 BN FOR 3Q17 DEBT LEVERAGE RATIOS COP bn USD 522 mn Adjusted EBITDA** (COP bn) +9% 1,567 sep-2016 sep-2017 1,442 (12 months)** 22% • sep-2016: 376 Papeles Commercial Max: 3.5x • sep-20
Slide 16: Annexes
SS —S GRUPO ARGOS | Annexes
Slide 17: Concession Business
Concession Business
Slide 18: Odinsa: Active Transformation in the Concession Business
ODINSA ACTIVE TRANSFORMATION IN THE CONCESSION BUSINESS Key Figures (9M17) Revenue by business with equity Revenue by business EBITDA by business method 9M17 adjusted* adjusted* Construction, Construction, Airports, 12% 13% 17% Roads, Construction, Airports, 43% 4 23% Roads, Roads, 52% 64% 35% Airpo
Slide 19: Odinsa: 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 20: Odinsa: 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 21: Odinsa: Recent Performance
ODINSA RECENT PERFORMANCE PASSENGERS TPD MM PAX 9M2017 40.0 35.4 36.0 Autopistas del Café 33.1 5% 30.5 30.0 27.8 26.6 27.4 25.5 15% Malla Vial del Meta 20.0 TPD Pacífico 2 9% 46% 10.0 71,166 Autopistas del Nordeste 0.0 2011 2012 2013 2014 2015 2016 1H16 9M17 24% Boulevard Turistico del Atlántico Opa
Slide 22: Cement Business
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Slide 23: Cementos Argos: Cement and Concrete Leader in the Americas
CEMENTOS ARGOS CEMENT AND CONCRETE LEADER IN THE AMERICAS Key Figures (9M17) 33 Revenue by Geography Product Mix EBITDA by Geography Regions Colombia Colombia 14 14 27% RMC 40% USA 25% Countries USA Cement 42% 53% 60% CCA CCA 34% 20% 9,166 9.850 Employees 9M17: COP 6.4 tn / USD 2.1 bn Cement Volume
Slide 24: Cementos Argos: Rationale Behind the Cement Business
CEMENTOS ARGOS RATIONAL BEHIND THE CEMENT BUSINESS GEOGRAPHICAL ENVIORNMENT CEMENTOS ARGOS STRATEGY Cement Consumption* ✓ Residential sector main 150 600 ✓ Acquisition of a cement plant in Martinsburg to 115 driver for cement become 4th largest cement producer in the Kg / capita 100 400 MM Ton deman
Slide 25: Cementos Argos: Results of a Growing Operation
CEMENTOS ARGOS RESULTS THAT EVIDENCE A GROWING OPERATION BENEFITED BY GEOGRAPHICAL DIVERSIFICATION CEMENT VOLUME RMX VOLUME Mtpa Mcmpa 16.0 14.3 14.0 14.0 14.0 12.6 12.2 11.5 11.4 12.0 11.1 11.3 12.0 10.8 10.5 9.3 10.0 9.4 10.0 8.6 8.6 8.0 7.8 7.0 8.0 8.0 5.9 6.0 6.0 4.0 4.0 2.0 2.0 - - 2010 2011 20
Slide 26: Energy Business
Energy Business
Slide 27: Celsia: Successful Transformation and Growth
CELSIA A PROCESS OF SUCCESSFUL TRANSFORMATION AND GROWTH WITH FOCUS Key Figures (9M17) Revenue by Geography Revenue by type of generation EBITDA by Geography Wind 3% CCA Thermal 23% 3 CCA 43% Colombia 23% Countries 57% Hydro Colombia 75% 1,600 77% Employees 9M17: COP 2.2 tn / USD 757 mn 9M17: COP 62
Slide 28: Celsia: Rationale Behind the Power Sector Business
CELSIA RATIONAL BEHIND THE POWER SECTOR BUSINESS GEOGRAPHICAL ENVIORNMENT CELSIA ARGOS 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 requ
Slide 29: Celsia: Recent Performance
CELSIA RECENT PERFORMANCE GENERATION REGULATED AND NON REGULATED MARKET SALES GWh GWh 8,129 600 7,754 7,135 6,170 550 5,543 5,039 500 4,548 450 400 350 2012 2013 2014 2015 2016 9M16 9M17 300 Colombia CCA 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 1Q15 3Q15 1Q16 3Q16 1Q17 3Q17 REVENUES EBITDA – EBITDA MARGIN (%)
Slide 30: Real Estate Business
Real Estate Business
Slide 31: Land Bank with Cash Generation Potential
Land Bank with cash generation potential Situm ~2,000 Ha (Barranquilla and Barú) 416 Ha developed up to 2015 2002 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 NYC. 31% ▪ Land develo
Slide 32: Pactia: Property Joint Venture with USD 1bn of Assets
Property Joint Venture with USD 1bn of assets under management Pactia Key Figures 9M17 3 Countries Distribution by asset Self GLA NOI Storage, Self-storage, Lots, 2% 4.0% 6% Others, Hotels, Projects, 2% 4% Hotels, To Offices, 5.0% Offices, 12% 20% Industry, stabilize 17.0% , 42% 40% Stabiliz Industr