Grupo Argos S.a. · BVC:GRUPOARGOS
Grupo Argos — Investor Presentation (March 2018)
33 slides from Grupo Argos's investor presentation, March 2018
Slide 1: Investors Presentation March 2018
Investors Presentation march 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 r
Slide 3: Who We Are: Grupo Argos at a Glance
WHO WE ARE GRUPO ARGOS AT A GLANCE 3 • Only liquid vehicle to invest in infrastructure in Colombia Regions • Strategic focus in Cement, Energy, Road and Airport Concessions 18 • Solid and articulated portfolio with ~ USD 16 billion in AUM Countries • Balanced in regions, currency, and sectors • One
Slide 4: Our Portfolio: Holding 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 23% 13% Cement 43% 23% Energy 64% 55.3%3 52.9% 99.7%8
Slide 5: Strategy: Strategic Architect Principles
STRATEGY WITH STRATEGIC ARCHITECT PRINCIPLES SUSTAINABLE GROWTH AND VALUE GENERATION Capital Allocation + High Standards of Corporate Governance + Social Responsibility + Human Talent Management Strategic Financial Corporate Management Asset and Talent Management ✓ Corporate strategy ✓ Mergers, acqu
Slide 6: Strategy: Variable Remuneration Scheme
STRATEGY VARIABLE REMUNERATION SCHEME OF GRUPO ARGOS MANAGEMENT SEEKS TO ALIGN SHAREHOLDERS AND COMPANIES OBJECTIVES – PROFITABILITY MAIN GOAL Bonuses for organizational results = Compensation strategy of Grupo Argos that seeks: ▪ Align companies interests with those of shareholder, seeking for the
Slide 7: Strategy: Methodology Focused on Profitability
STRATEGY FOLLOWING A METHODOLOGY FOCUSED ON PROFITABILITY Efficient capital allocation Profitability Growth High ✓ Improve performance A Attractiveness of the industry ✓ Invest to grow after skills ✓ Invest to grow ✓ Protect position ✓ Potential improved ✓ Grow selectively market growth ✓ Average pr
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 22.1 100% 19.8 20.3 90%
Slide 9: Track Record: 2017 Strategy Implementation
TRACK RECORD AND PROVEN TRACK RECORD THAT RESPONDS TO A CLEAR GUIDELINE OF OUR STRATEGY 2017: MARKED BY THE DYNAMISM AND DISCIPLINE IN THE IMPLEMENTATION OF OUR STRATEGY MAXIMIZING PORTFOLIO VALUE ACTIVE MANAGER Profitable Growth Portfolio Profitability Strategic, selective, and profitable Capture S
Slide 10: Track Record: Odinsa Acquisition and Opain Control
TRACK RECORD 1 THAT BEGINS WITH THE CONSOLIDATION OF THE INFRASTRUCTURE PILLAR THROUGH 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
Slide 11: Track Record: Concessions Business Consolidation
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: Divestments
TRACK RECORD 2 WITH DIVESTMENTS THAT REAFFIRM OUR COMMITMENT TO EFFICIENTLY MANAGE OUR INVESTMENT PORTFOLIO • Múltiplos Strategic Rational • Múltiplos Multiples • Múltiplos Contribution to the strategy ▪ Fulfillment of investment thesis Change in debt profile Amortization: ▪ Exercise role of active
Slide 13: Track Record: Celsia Transaction and Simplification
TRACK RECORD 3 CELSIA’S TRANSACTION IN LINE WITH OUR CORPORATE STRUCTURE SIMPLIFICATION STRATEGY AND ALLOWS EPSAS´S VALUE RECOGNITION Simplification of the strategic architecture of Grupo Argos CELSIA´S FOLLOW ON • Consolidation of the energy business in a single vehicle • Greater clarity of the hol
Slide 14: Financial Results
FINANCIAL RESULTS STRATEGY THAT HAVE TRANSLATED INTO GROWING RESULTS GRUPO ARGOS CONSOLIDATED REVENUES GRUPO ARGOS CONSOLIDATED EBITDA (COP bn) (COP bn) USD 4.9 bn 16,000 4,500 USD 1.3 bn 14,553 14,573 3,904 14,000 4,000 3,620 12,700 12,000 3,500 9,296 3,000 2,635 10,000 7,629 2,500 2,225 8,000 6,68
Slide 15: Individual: Leverage Indicator
INDIVIDUAL WITH LEVERAGE INDICATOR AT THE INDIVIDUAL LEVEL IN MINIMUM OF 2.3X DEBT LEVERAGE RATIOS COP bn USD 528m Adjusted EBITDA (12 months)** 1,567 dic-2016 Dec 2016 dic-2017 Dec 2017 • dec-2016: 558 +9% 1,442 • dec-2017: 679 350 Max: 4.0x Papeles Max: 3.5x comerciales 892 759 Bonos COP 4.7x 4.9x
Slide 16: Corporate Governance
CORPORATIVO GOVERNANCE CORPORATE GOBIERNO RECOGNITION AND SOLID COMMITMENT TO CORPORATE GOVERNANCE BOARD OF DIRECTORS SHAREHOLDERS ROSARIO CÓRDOBA (Chair of the Board) - Independent Grupo Grupo Sura Sura – 35.6% - 35.6% MARIO SCARPETTA Fondos Colombia - 65.9% Independent Retail Retail – 24.6% - 24.6
Slide 17: Annexes
Annexes
Slide 18: Concession Business
Concession Business
Slide 19: Odinsa: Active Transformation in Concession Business
ODINSA ACTIVE TRANSFORMATION IN THE CONCESSION BUSINESS Key Figures (2017) Revenue by business with equity Revenue by business EBITDA by business method 2017 adjusted* adjusted* Other Other Other Airports, Construction, Direct, Direct, 7% Construction, Direct, 3% 10% 8% 9% 4% Construction, Roads, 25
Slide 20: Odinsa: Rationale Behind 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 21: Odinsa: Rationale Behind 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 22: Odinsa: Recent Performance
ODINSA RECENT PERFORMANCE PASSENGERS TPD MM PAX 40.0 Number of cars 2017 - thousands 35.0 5.4 5.0 5.0 Boulevard Turístico del 5.5 3 4 30.0 Atlántico 5.5 9 11 25.0 5.4 Pacífico 2 7 7 5.4 20.0 Quiport 19 Autopistas del Nordeste 19 15.0 30.0 31.0 31.0 Opain 25.0 27.6 Malla Vial 10.0 20.1 22.4 36 37 Aut
Slide 23: Cement Business
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Slide 24: Cementos Argos: Cement and Concrete Leader in the Americas
CEMENTOS ARGOS CEMENT AND CONCRETE LEADER IN THE AMERICAS Key Figures (2017) 33 Revenue by Geography Product Mix EBITDA by Geography Regions Colombia Colombia 14 14 27% RMC 40% USA 23% Countries USA Cement 45% 53% 60% CCA CCA 32% 20% 9,166 9.850 Employees 2017: COP 8.5 tn / USD 2.9 bn Cement Volume
Slide 25: Cementos Argos: Rationale Behind Cement Business
CEMENTOS ARGOS RATIONAL BEHIND THE CEMENT BUSINESS GEOGRAPHICAL ENVIORNMENT CEMENTOS ARGOS STRATEGY Cement Consumption* ✓ Acquisition of a cement plant in Martinsburg to ✓ Residential sector main 150 600 115 become 4th largest cement producer in the USA driver for cement Kg / capita 100 400 ✓ Plants
Slide 26: Cementos Argos: Growing Operation Results
CEMENTOS ARGOS RESULTS THAT EVIDENCE A GROWING OPERATION BENEFITED BY GEOGRAPHICAL DIVERSIFICATION CEMENT VOLUME RMX VOLUME Mtpa Mcmpa 18 16.2 14 16 14.3 11.1 11.5 11.3 14.0 12 10.6 14 12.6 9.4 10.8 11.4 10 8.6 12 10 9.3 8 7.0 7.8 5.9 8 6 6 4 4 2 2 0 0 2010 2011 2012 2013 2014 2015 2016 2017 2010 20
Slide 27: Energy Business
Energy Business
Slide 28: Celsia: Transformation and Growth
CELSIA A PROCESS OF SUCCESSFUL TRANSFORMATION AND GROWTH WITH FOCUS Key Figures (2017) Revenue by Geography Revenue by type of generation EBITDA by Geography Solar CCA Wind 0.6% 2.1% CCA 24% 23% 3 Thermal Hydro Countries Colombia 47.6% 49.7% 76% Colombia 1,600 77% Employees 2017: COP 3.1 tn / USD 1
Slide 29: Celsia: Rationale Behind Power Sector Business
CELSIA RATIONAL BEHIND THE POWER SECTOR BUSINESS GEOGRAPHICAL ENVIORNMENT CELSIA´S 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 require ✓
Slide 30: Celsia: Recent Performance
CELSIA RECENT PERFORMANCE GENERATION REGULATED AND NON REGULATED MARKET SALES GWh GWh 9,000 600 8,129 7,754 8,000 7,135 550 7,000 6,170 6,317 6,000 500 5,039 5,000 450 4,000 CCA 3,000 400 Colombia 2,000 350 1,000 - 300 2012 2013 2014 2015 2016 2017 1T12 3T12 1T13 3T13 1T14 3T14 1T15 3T15 1T16 3T16 1
Slide 31: Real Estate Business
Real Estate Business
Slide 32: Real Estate: Land Bank with Cash Generation Potential
REAL ESTATE 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% ▪ L
Slide 33: Real Estate: Property Joint Venture Pactia
REAL ESTATE PROPERTY JOINT VENTURE WITH USD 1BN OF ASSETS UNDER MANAGEMENT Pactia Key Figures 2017 3 Countries Distribution by asset Self GLA NOI Storage, Self-storage, Lots, 3% 3% 6% Others, Hotels, Projects, 2% 2% Hotels, To Offices, 5% Offices, 15% 16% Industry, stabiliz 20% 46% e, 40% Retail, St