Abengoa Sa · OTC:AGOAF
Abengoa Sa — Investor Day (April 2015)
34 slides from Abengoa Sa's investor day presentation, Apr 7, 2015
Slide 1: Abengoa 3.0, Completing the Transformation Process
Abengoa 3.0, Completing the Transformation Process ABENGOA Completing Transformation 9th Annual Analyst and Investor Day New York City & London, April 7 & 9, 2015 Manuel Sanchez Vice Chairman & CEO
Slide 2: Forward-looking Statement
2 Forward-looking Statement This presentation contains forward-looking statements (within the meaning of the U.S. Private Securities Litigation Reform Act of 1995) and information relating to Abengoa that are based on the beliefs of its management as well as assumptions made and information currentl
Slide 3: Speakers Bio (I)
Speakers Bio (I) Jose Dominguez Abascal, CTO Gonzalo Gomez, EVP E&C Infrast. Management Manuel Sanchez, Vice Chairman & CEO Ignacio Garcia-Alvear, Co-CFO for IR & CM Industrial engineer from ICAI School of Engineering in Madrid Executive Officers Management Program at IPADE Business School in Mexico
Slide 4: Speakers Bio (II)
Speakers Bio (II) Marcos Ramirez, Chairman Abengoa Mexico Ivan Araneda, General Manager Abengoa Chile Engineering and Finance degree from Universidad de Chile MBA in Corporate Finance and Investments from Brigham Young University, Utah Formerly CFO of Abengoa Chile He has been General Manager at Ele
Slide 5: Speakers Bio (III)
Speakers Bio (III) Santiago Seage, Abengoa Yield CEO Javier Garoz, CEO Abengoa Bioenergy Bachelor’s degree in Marketing and Business Administration from ESIC MBA from the IESE Business School in Spain. Strategy and Corporate Development Director of Abengoa and Chief Operating & Corporate Development
Slide 6: Agenda
6 Agenda Completing a 4 Years Transformation Plan Business Outlook Main Takeways Valuation Analysis
Slide 7: Completing the Company Transformation
7 Completing the Company Transformation
Slide 8: A fascinating growth story while executing a transition at full speed
A fascinating growth story while executing a transition at full speed 2011 2012 2013 2014 2015 Creation of B Shares Sale of Telvent 2 assets sold Restructuring E&C and Technology 2 assets sold Share Split Sale of Befesa Sale of Bargoa Equity Recycling Restructuring in Concessions ABENGOA YIELD ROFO
Slide 9: Moving from a holding company to fully integrated company
9 Moving from a holding company to fully integrated company From Abengoa 1.0 5 different businesses with limited synergies No across core competencies between units Higher cost of capital Financing equity investments with corporate debt Asset sales on an individual basis More than 20 Brands in the m
Slide 10: Integrating technology and business development in our value chain
10 New Product Development Technology support R&D and Technology E&C Basic & detailed engineering Vertical integration O&M Long-term concessional assets Biofuels Fully integrated value chain allowing to develop & maintain significant competitive advantages and premium returns: Best in Class Propriet
Slide 11: Building on unbreakable principles
11 Building on unbreakable principles The talent of our People The talent of our Organization Common Management Systems The Talent Not taking risks is the threshold of failure; But not managing them accordingly is too That is only possible with a Risk Management System robust and reliable And with t
Slide 12: 2014 achievements and progress
12 2014 Improve biofuels performance from lowest ever Solana in operation Additional Equity recycling for ~560 M€ 2013/2014 Capex Reduction 517 M€ US equity offering Sale of Befesa Resilient E&C business: >7 B€ Backlog, providing great Revenue and WC visibility Repay 200 M€ of syndicated loan 207 M€
Slide 13: Clear objectives for 2015 will benefit Abengoa in all fronts
Clear objectives for 2015 will benefit Abengoa in all fronts Transaction Value Significant Benefits H1’15 H1’15 H2’15 Sale of 13% stake in ABY 270 M€ ROFO 2 agreement 120 M€ Exch. bond for 9% of ABY 250 M€ APW-1 EIG Agreement 460 M€(1) Sale of 2% of ABY ~50 M€ ROFO 3 agreement 200 M€ Sale Concession
Slide 14: Agreement with EIG for investment in APW-1
Agreement with EIG for investment in APW-1 Atacama I (PV & STE) Atacama II (PV & STE) A3T A4T Brazilian T&D lines APW-1 Initial Highlights Total equity committed initially of 2.0 B$ (1.1 B$ from EIG) 55%(1) will be held by EIG and 45% by Abengoa Abengoa will deconsolidate APW-1 projects Initial paym
Slide 15: To bring into operation ~18 B$ assets; ~17 B$ of E&C works
15 To bring into operation ~18 B$ assets; representing ~17 B$ of E&C works 2.5 B$ Equity EV at COD of Initial + Other assets 9.2 B$ 6.7 B$ Non-recourse Debt 0.5 B$ of additional Equity in current under review projects Equity Investment (1) Estimated EV of future assets considering 55% stake of EIG i
Slide 16: APW-1 changes Abengoa credit profile completely
16 APW-1 changes Abengoa credit profile completely Reduce Abengoa's operating risk and equity contributions to projects 1 Total investment may translate into ~17 B$ of E&C works for Abengoa 3 Strengthening FCF generation from the E&C of concessional assets 6 Successful long-term partnership to secur
Slide 17: ~900 M$ of asset sales in 2015 through strategic equity recycling
~900 M$(1) of asset sales in 2015 through strategic equity recycling Assets Status Comments ROFO 2 142 M$ Shams (20%) Helioenergy 1&2 (30%) Honaine (26%) Skikda (37%) ATN2 Most of which collected in Q1 Significant Equity Recycling from Assets in ROFO 3 225 M$ Under negotiations Expected to happen at
Slide 18: Business Outlook
ABENGOA (2 | > Business Outlook
Slide 19: Our world is facing very important challenges
19 Our world is facing very important challenges Population Energy Demand Quality of Life CO2 Emissions Aging Infrastructure Water Scarcity Solid Waste Fossil Fuels Scarcity World is facing major challenges that impact on People, Businesses & Governments
Slide 20: Representing attractive opportunities for growth
20 Representing attractive opportunities for growth New Energy Sources (H2 y Energy Crops) Need for Renewables Needs for Biofuels Need for Recycling of MSW Needs for Long Term Water desalination & reuse A world full of growth opportunities that we will benefit from by applying our innovative solutio
Slide 21: Benefits from Macro Trends to Address Energy & Water Constraints
21 Benefits from Macro Trends to Address Energy & Water Constraints Shares of world primary energy Share ratio 2030 / 2010 Oil 0.8 Coal 0.9 Gas 1.1 Hydro 1.0 Nuclear 1.2 Renewables 3.3 Electric Power (GW) – 2.3% CAGR 2012-2040 Energy Mix is Changing Electric Power by 2x in 25 years 2014-2020E Invest
Slide 22: The challenge of infrastructure: the financing equation
22 The challenge of infrastructure: the financing equation Public Sector Private Sector More and Older People More Social Expenditure Less money for Infrastructure Lower Economic Development More and Older People More Savings Higher needs for long-term IRR’s Pursue of stable investments
Slide 23: Our response to the opportunity: Abengoa 3.0
23 Our response to the opportunity: Abengoa 3.0 New Infrastructures Renewal of aged infrastructures Limited Public Investment Budgets Excess of Institutional Liquidity Projects under Public Private Partnership Abengoa 3.0
Slide 24: A business model poised to generate positive free-cash-flow
24 SPV APW-1 Abengoa Yield LT Equity E&C margin Tech. Fees O&M margin Free Cash Flow and Assets Equity Invest. Equity < E&C Margin Capital Gains Dividends Bridge Debt Debt Recycling L/T N/R Debt Equity for ABY A business model poised to generate positive free-cash-flow ABENGOA E&C O&M R&D & Technolo
Slide 25: Illustrative example: 1,000 M€ investment project
Illustrative example 1,000 M€ investment project 830 M€ EPC contract 15% E&C margin O&M: 5 M€/yr fee — 20% margin Leverage: 25%/75% Equity/Debt Free Cash Flow +40 Assets +130 Asset sale at x1.3 BV Incremental dividends generated by ABY Assuming ABG maintains 40% stake in ABY Assuming a 7% cash yield
Slide 26: Solid free cash flow generation with a multiplying effect
26 Solid free cash flow generation with a multiplying effect Equity Recycling Construction Phase Operational Phase Equity sales at a multiple above BV Capital gains from the sale of equity in projects Cash multiplying effect from reinvestment of equity principal Generation of E&C margins from reinve
Slide 27: Strong business expectation for 2015
27 Coupled with Strong Deleverage & FCF Strong Business Expectation for 2015 Positive business performance and financial enhancement in 2015E Corporate transactions to benefit cash generation and deleverage Asset light business model Preserve liquidity while managing maturities efficiently Financial
Slide 28: Valuation Analysis
ABENGOA 3) > Valuation Analysis
Slide 29: Valuation analysis: Sum of the Parts Method
Valuation analysis Sum of the Parts Method Multiple Corporate Business Metrics ~8.0x Corporate EV Corp. Net Debt 2015e (1.2x Corp EBITDA) Corp. Minorities (Dec 2014) Corporate Business Equity Value ‘15e EBITDA ~925 M€ ~7,400 M€ ~(1,150) M€ ~(50) M€ 6,200 M€ Concessions Equity BV1 40% Market Cap of A
Slide 30: Valuation analysis: Subtractive Method
Valuation analysis Subtractive Method Current Market Cap Corporate Net Debt 2015E Concessions Equity BV(1) (excl. ABY, ROFO 2&3) 40% Market Cap Abengoa Yield J14 Corporate Minorities ~3,000 M€ ~1,150 M€ ~2,025 M€ ~975 M€ ~50 M€ Implied Corporate EV ~1,200 M€ ’15e EBITDA ~925 M€ Corporate Business Im
Slide 31: Valuation analysis: Sum of the Parts and Subtractive Methods
Valuation analysis Sum of the Parts Method Substractive Method Multiple Corporate Business Metrics ~8.0x Corporate EV Corp. Net Debt 2015e (1.2x Corp EBITDA) Corp. Minorities (Dec 2014) Corporate Business Equity Value ‘15e EBITDA ~925 M€ ~7,400 M€ ~(1,150) M€ ~(50) M€ 6,200 M€ Current Market Cap Cor
Slide 32: Main Takeaways
ABENGOA 4) » Main Takeaways
Slide 33: Main takeaways
33 Successful execution on the Company transformation; better positioned now Sustainable free cash flow generation from reinforced business model Abengoa 3.0 is a reality, our response to huge market opportunities Continued focus on technology to create key differentiation Continued focus on technol
Slide 34: Thank you
Thank you ABENGOA April 7 & 9, 2015