Grupo Argos S.a. · BVC:GRUPOARGOS
Grupo Argos — Investor Presentation (November 2019)
31 slides from Grupo Argos's investor presentation, November 2019
Slide 1: Corporate Presentation November 2019
CORPORATE PRESENTATION November 2019
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
Slide 3: Grupo Argos at a Glance
CORPORATE PRESENTATION SEPTEMBER 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 billion in consolidated assets Balanced in regions,
Slide 4: Strategic Portfolio Focused in Infrastructure
CORPORATE PRESENTATION SEPTEMBER 2019 PORTFOLIO STRATEGIC PORTFOLIO FOCUSED IN INFRASTRUCTURE USD 4.2 bn USD 4.8 bn USD 1.3 bn MARKET CAP *1 REVENUES *2 EBITDA *2 CEMENT ENERGY CONCESSIONS In Infrastructure STRATEGIC 58.0% *3 52.9% *8 99.9% Revenues: USD 2.6 bn Revenues: USD 1.1 bn Revenues: USD 0.6
Slide 5: Well Balanced Sources of Revenue and EBITDA from Core Business
CORPORATE PRESENTATION SEPTEMBER 2019 PORTAFOLIO WITH WELL BALANCED SOURCES OF REVENUE AND EBITDA FROM OUR CORE BUSINESS “ REVENUE CONTRIBUTION FROM STRATEGIC BUSINESS LTM SEPT 19 EBITDA CONTRIBUTION FROM STRATEGIC BUSINESS LTM SEPT 19 13% 22% 31% 11% 15% 42% USD 2.5 bn1 25% USD 4.3 bn1 46% USD 0.6
Slide 6: Discipline Translated into Positive Results with EBITDA CAGR of 16%
CORPORATE PRESENTATION SEPTEMBER 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% 3
Slide 7: How We Generate Value
CORPORATE PRESENTATION SEPTEMBER 2019 HOW WE GENERATE VALUE 7 November 2019
Slide 8: Grupo Argos 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
Slide 9: Grupo Argos Guidelines as Strategic Architect
CORPORATE PRESENTATION SEPTEMBER 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
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
Slide 11: Cementos Argos – Efficiency Focus and Strategic Asset Allocation
CORPORATE PRESENTATION SEPTEMBER 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 Product
Slide 12: Celsia – Strengthening of Distribution and Generation Business
CORPORATE PRESENTATION SEPTEMBER 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 GROW
Slide 13: Odinsa – Simplification, Capital Structure and Growth Pipeline
CORPORATE PRESENTATION SEPTEMBER 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
Slide 14: Progress Made as of September 2019
CORPORATE PRESENTATION SEPTEMBER 2019 HOW WE GENERATE VALUE PROGRESS MADE AS OF SEPTEMBER 2019 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 bon
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
Slide 16: Controllable Management Expenses Decreased 8.3% in Real Terms
CORPORATE PRESENTATION SEPTEMBER 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%
Slide 17: Strengthening of Cash Flow Received with Dividend Spread
CORPORATE PRESENTATION SEPTEMBER 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 9
Slide 18: In 2018 We Added to Society 1.8x the Benefit Taken
CORPORATE PRESENTATION SEPTEMBER 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 -0.0101323
Slide 19: Solid Commitment to Corporate Governance
CORPORATE PRESENTATION SEPTEMBER 2019 HOW WE GENERATE VALUE SOLID COMMITMENT TO CORPORATE GOVERNANCE BOARD OF DIRECTORS SHAREHOLDERS ROSARIO CÓRDOBA (Chair of the Board) - Independent GrupoSura Grupo Sura 25.2% 21..8% CLAUDIA BETANCOURT Colombian 35.5% Non – Independent Grupo GrupoNutresa Nutresa Fo
Slide 20: Key Messages That Support Our Value Generation Strategy
CORPORATE PRESENTATION SEPTEMBER 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 capita
Slide 21: Capital Structure
CORPORATE PRESENTATION SEPTEMBER 2019 CAPITAL STRUCTURE 21 November 2019
Slide 22: Flexible Capital Structure That Supports the Group's Strategy
CORPORATE PRESENTATION SEPTEMBER 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
Slide 23: Debt Decreases 9% YoY and Reaches Duration of 6.6 Years
PRESENTACIÓN CORPORATE DE RESULTADOS PRESENTATION TRIMESTRALES SEPTEMBER 2019 INDIVIDUAL RESULTS GRUPO ARGOS 3Q2019 DEBT DECREASES 9% YOY AND REACHES A DURATIONOF 6.6 YEARS WITH THE ISSUANCE OF BONDS INDEBTEDNESS* COP PROFILE OF MATURITIES (PRINCIPAL) COP bn 0% 0% 0% 19% 20% 16% 10% 0% 25% 0% 11% 8%
Slide 24: Leverage Ratios Evolution in Line with Capital Allocation Strategy
CORPORATE PRESENTATION SEPTEMBER 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
Slide 25: Debt Substitution with Bond Issuance; Cash at Minimum Levels
PRESENTACIÓN DE RESULTADOS TRIMESTRALES INDIVIDUAL RESULTS GRUPO ARGOS 3Q2019 DEBT SUBSTITUION WITH BOND ISSUANCE AS OF SEPTEMBER. CASH AT MINIMUM LEVELS INDIVIDUAL FREE CASH FLOW COP BN NOTES 1. Dividends received: COP 492 bn, dividends paid: COP 220 bn 1 Dividendos netos Net dividends 272 2. Sale
Slide 26: Consolidated Debt Backed in Great Measure by Capital Markets
CORPORATE PRESENTATION SEPTEMBER 2019 CAPITAL STRUCTURE CONSOLIDATED DEBT BACKED IN GREAT MEASURE BY CAPITAL 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
Slide 27: 3Q2019 Financial Results Annexes
CORPORATE PRESENTATION SEPTEMBER 2019 3Q2019 FINANCIAL RESULTS ANNEXES 27 November 2019
Slide 28: Consolidated Result to September with Double Digit Growth on All Lines
PRESENTACIÓN DE RESULTADOS TRIMESTRALES STRATEGY CONSOLIDATED RESULT TO SEPTEMBER WITH DOUBLE DIGIT GROWTHS ON ALL LINES COP 12,9 REVENUES tn COP 3,5 EBITDA tn COP 566 bn NET CONTROLLING INCOME 22% 21% 15% 28 Noviembre 2019
Slide 29: Quarterly Results Show Coherence with the Defined Strategy
QUATERLY FINANCIAL RESULTS CONSOLIDATED RESULTS GRUPO ARGOS 3Q2019 QUARTERLY RESULTS SHOW COHERENCE WITH THE DEFINED STRATEGY RELEVANT FIGURES COP billion 3Q - 2019 3Q - 2018 Var (%) Sep-2019 Sep-2018 Var.(%) 1 Revenues 5,228 3,634 44% 12,858 10,555 6 22% Costs, expenses & other revenues 4,248 2,961
Slide 30: Third Quarter EBITDA Grows 7% YoY
QUATERLY FINANCIAL RESULTS INDIVIDUAL RESULTS GRUPO ARGOS 3Q2019 THIRD QUARTER EBITDA GROWS 7% YOY, 257 PB MORE IN MARGIN RELEVANT FIGURES COP bn 3Q - 2019 3Q - 2018 Var (%) Sep-2019 Sep-2018 Var.(%) Revenue 256 246 4% 660 1,196 -45% Costs and other expenes -2 4 -162% 64 300 -79% GA expenses 24 20 2
Slide 31: Contact
CORPORATE PRESENTATION SEPTEMBER 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.