Grupo Argos S.a. · BVC:GRUPOARGOS
Grupo Argos — Q3 2019 Earnings Presentation
31 slides from Grupo Argos's earnings presentation, November 2019
Slide 1: Third Quarter Results Presentation 3Q2019
Resultados Primer Trimestre del 2019 THIRD QUARTER RESULTS PRESENTATION 3Q2019
Slide 2: Disclosure
Resultados QUATERLY PrimerFINANCIAL Trimestre RESULTS del 2019 Quarterly Earnings Presentation Disclosure This presentation contains certain forward-looking information and statements related to GRUPO ARGOS and its subsidiaries that are based on current knowledge of events, expectations and forecast
Slide 3: Consolidated result to September with double digit growths on all lines
QUATERLY FINANCIAL RESULTS 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% 3 November 2019
Slide 4: Celsia transformation responds to a clear strategy supported by Argos Group
QUATERLY FINANCIAL RESULTS STRATEGY CELSIA TRANSFORMATION RESPONDS TO A CLEAR STRATEGY SUPPORTED BY ARGOS GROUP 1 2 3 4 Corporate Simplification Capital Structure Optimization Balance in Revenue Source Increase in Participation in Distribution Business 2017 Energy business in a single vehicle Celsia
Slide 5: We strengthen the concession portfolio with the acquisition of Túnel de Oriente
QUATERLY FINANCIAL RESULTS STRATEGY WE STRENGTHEN THE CONCESSION PORTFOLIO WITH THE ACQUISITION OF TUNEL DE ORIENTE USD 400 mn USD 415 mn COP 335 bn QUIPORT BONDS OPAÍN PRIVATE DEBT ADQUISITION OF ISSUE ISSUE TÚNEL DE ORIENTE 5 November 2019
Slide 6: Grupo Argos: the most sustainable in the world in its sector
QUATERLY FINANCIAL RESULTS STRATEGY GRUPO ARGOS: THE MOST SUSTAINABLE IN THE WORLD IN ITS SECTOR 1 st 7 º 88 100 Consecutive year I n t h e P l a c e g l o b a l l y i n i t s i n d u s t r y W o r ld i n d ice 86 91 86 Third consecutive year Economic Enviornment Social 6 November 2019
Slide 7: 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 8: Growth of operational revenue with positive contribution of all businesses
QUATERLY FINANCIAL RESULTS CONSOLIDATED RESULTS GRUPO ARGOS 3Q2019 GROWTH OF OPERATIONAL REVENUE WITH POSITIVE CONTRIBUTION OF ALL BUSINESSES CONTRIBUTION BY BUSINESS TO CONSOLIDATED REVENUE COP bn +44% +14% 3Q2018 Cement Energy Real estate Portfolio Coal Concessions Other 3Q2019 Excludes divestment
Slide 9: Operational EBITDA grows 2% highlighting greater energy business contribution
QUATERLY FINANCIAL RESULTS CONSOLIDATED RESULTS GRUPO ARGOS 3Q2019 OPERATIONAL EBITDA GROWS 2% HIGHLIGHTING GREATER ENERGY BUSINESS CONTRIBUTION CONTRIBUTION BY BUSINESS TO CONSOLIDATED EBITDA COP bn 38% 1Q2018 Cement Energy Real estate Portfolio Coal Concessions Other 1Q2019 CONTRIBUTION BY BUSINES
Slide 10: Third quarter EBITDA grows 7% YoY, 257 pb more in margin
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 11: Controllable expenses of holding decrease 4% as of September
QUATERLY FINANCIAL RESULTS INDIVIDUAL RESULTS GRUPO ARGOS 3Q2019 CONTROLLABLE EXPENSES OF HOLDING DECREASE 4% AS OF SEPTEMBER 1. REVENUE DISTRIBUTION COP bn 2. EQUITY METHOD DISTRIBUTION 3Q2019 COP bn 248 256 216 213 1 8 Financial Act. Financiera 68 Otros 216 213 36 -1% 163 3% MPP Equity Method Ceme
Slide 12: Debt decreases 9% YoY and reaches a duration of 6.6 years
QUATERLY FINANCIAL RESULTS 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% Bonos 31% Bancos 31% COP 1,582 bn INDEXED 173 390
Slide 13: Debt substitution with bond issuance. Cash at minimum levels
QUATERLY FINANCIAL RESULTS INDIVIDUAL RESULTS GRUPO ARGOS 3Q2019 DEBT SUBSTITUION WITH BOND ISSUANCE. 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 of land: COP 32 bn, urbanized
Slide 14: Concessions Business
QUATERLY FINANCIAL RESULTS CONCESSIONS BUSINESS ODINSA AND OPAIN QUARTERLY RESULTS 3Q2019 14 November 2019
Slide 15: Odinsa strengthens its portfolio with Túnel de Oriente
QUATERLY FINANCIAL RESULTS CONCESSIONS BUSINESS 3Q2019 ODINSA STRENGTHENS ITS PORTFOLIO WITH TUNEL DE ORIENTE Agreement to purchase 53% of Tunel de Oriente • COP 335 billion investment • 60 km roads, tunnels and viaducts. TPD + 25 thousand vehicles • Financed through debt restructuring at the asset
Slide 16: Road and airport traffic grow 3% and 11% during the quarter
QUATERLY FINANCIAL RESULTS CONCESSIONS BUSINESS 3Q2019 ROAD AND AIRPORT TRAFFIC GROW 3% AND 11% DURING THE QUARTER AVERAGE DAILY VEHICLE TRAFFIC 3Q2019 Thousands of vehicles NOTES 74,4 76,7 • AKF: Vehicle traffic in 3Q19 varies -1% YoY, affected by Pacifico 3 works. Accumulated as of September 2019
Slide 17: Results in line with capital structure improvement
QUATERLY FINANCIAL RESULTS CONCESSIONS BUSINESS 3Q2019 RESULTS IN LINE WITH CAPITAL STRUCTURE IMPROVEMENT REVENUE COP bn EBITDA COP bn CONTROLLER NET PROFIT COP bn 75.000 70.000 69 65.000 60.000 55.000 50.000 45.000 43 -1% -15% -38% 40.000 35.000 30.000 25.000 3T2018 Sep-2018 3Q2018 3T2019 Sep-2019
Slide 18: Passenger traffic grows 14% YoY, 4x the growth of Colombia's GDP
QUATERLY FINANCIAL RESULTS CONCESSIONS BUSINESS 3Q2019 PASSENGER TRAFFIC GROWS 14% YOY, 4x THE GROWTH OF COLOMBIA'S GDP PASSENGERS Millions of passengers (PAX) REVENUES COP bn 864 11.00 8.48 →Var YoY: 14% 756 7.98 8.34 8.63 8.06 9.00 315 3.05 → Var YoY : 6% 258 22% 7.00 2.88 2.85 2.87 2.85 5.00 3Q 2
Slide 19: Cement Business
QUATERLY FINANCIAL RESULTS CEMENT BUSINESS CEMENTOS ARGOS QUARTERLY RESULTS 3Q2019 19 November 2019
Slide 20: Efficiency, profitability of existing assets and divestment of non-strategic assets
QUATERLY FINANCIAL RESULTS CEMENT BUSINESS 3Q2019 EFFICIENCY, PROFITABILITY OF EXISTING ASSETS AND DIVESTMENT OF NON-STRATEGIC ASSETS Cement and concrete dispatches to 4G projects show growth of 36% Cement and concrete volumes grow supported in better USA performance Start of alternative fuels proje
Slide 21: Growth in volumes promoted by USA
QUATERLY FINANCIAL RESULTS CEMENT BUSINESS 3Q2019 GROWTH IN VOLUMES PROMOTED BY USA CEMENT VOLUMES (Tons, thousands) CEMENT SALES +10% A/A 29% -2% A/A -6% A/A 40% USA 4,3 COL 1% mm TM C y CA 3Q2018 3Q2019 31% READY MIX VOLUMES (Thousands of m3) READY MIX SALES 4% A/A 3% -3% A/A -31 % A/A 26% USA -1%
Slide 22: Captured efficiencies in the USA and price recovery in Colombia
QUATERLY FINANCIAL RESULTS CEMENT BUSINESS 3Q2019 CAPTURED EFFICIENCIES IN THE USA AND PRICE RECOVERY IN COLOMBIA REVENUES COP bn EBITDA COP bn CONTROLLER NET PROFIT COP mil mn 500 19 10 2 442 74 426 450 -15 55 400 350 300 250 +13% 4% -77% 387 200 150 17 100 -9% 50 0 3Q2018 3Q2019 Sep-2018 3Q2018 US
Slide 23: Energy Business
QUATERLY FINANCIAL RESULTS ENERGY BUSINESS CELSIA QUARTERLY RESULTS 3Q2019 23 November 2019
Slide 24: Balanced portfolio between generation and distribution after sale of Zona Franca
QUATERLY FINANCIAL RESULTS ENERGY BUSINESS 3Q2019 BALANCED PORTFOLIO BETWEEN GENERATION AND DISTRIBUTION AFTER SALE OF ZONA FRANCA USD 420 mn divestment of Zona Franca • Funds that will be used in capitalization of EPSA and growth of Celsia 766 GWh/año granted in power auction to Celsia • Acacia and
Slide 25: Decrease in generation by divestment of Zona Franca
QUATERLY FINANCIAL RESULTS ENERGY BUSINESS 3Q2019 DECREASE IN GENERATION BY DIVESTMENT OF ZONA FRANCA GENERATION GWh BREAKDOWN OF GENERATION 1,438 22% 13% 1,263 Zona Franca -12% 1,263 EPSA GWh CA 3Q2018 3Q2019 65% CHANGE IN ELECTRICITY SALES GWh NOTES 1,890 1,790 Energy sales decrease 5% YoY, due to
Slide 26: Income and EBITDA grow 15% YoY and 24% YoY respectively
QUATERLY FINANCIAL RESULTS ENERGY BUSINESS 3Q2019 INCOME AND EBITDA GROW 15% YOY AND 24% YOY RESPECTIVELY REVENUES COP bn EBITDA COP bn CONTROLLER NET INCOME COP mil mn +4% A/A +18% A/A +42% A/A 308 -38% A/A +570% 250 +16% +24% 46 +27% 58 3Q2018 3Q2019 3Q2018 3Q2019 Sep-2018 3Q2018 Sep-2019 3Q2019 Z
Slide 27: Real Estate Business
QUATERLY FINANCIAL RESULTS REAL ESTATE BUSINESS URBAN DEVELOPMENT BUSINESS AND PACTIA QUARTERLY RESULTS 3Q2019 27 November 2019
Slide 28: Operating cash flow grows 2,8 times YoY
QUATERLY FINANCIAL RESULTS OPERATING CASH FLOW GROWS 2,8 TIMES YOY Revenue for COP 54 bn (+59% YoY) Capitalization of Pactia by Grupo Argos of COP 176 bn, Cash flow of COP 32 billion, growing 2,8 times on reaching 37,2% stake business signed in previous quarters Income of COP 80 bn (-2% YoY), on low
Slide 29: Assets under management amount to 3,9 tn
QUATERLY FINANCIAL RESULTS PACTIA ASSETS UNDER MANAGEMENT AMOUNT TO 3,9 TN PARTICIPATION PACTIA % GLA m2 3.0% 3.4% 25.6% 28.5% 37.2% 16.9% Industria Industry Conconcreto Comercio Retail Grupo Argos 773,940 Oficinas Offices Protección m2 Hoteles Hotels Autoalmacenamiento Self-Storage 37.2% 48.3% REVE
Slide 30: Grupo Argos expects to end 2019 with a projected EBITDA of COP 4.4 trillion
QUATERLY FINANCIAL RESULTS STRATEGY GRUPO ARGOS EXPECTS TO END 2019 WITH AN PROYECTED EBITDA OF COP 4.4 TRILLION CONSOLIDATED INDIVIDUAL 15.5 tn 4.4 tn 800 500 ~COP ~COP ~COP ~COP bn bn REVENUES EBITDA REVENUES EBITDA 2019E 2019E 2019E 2019E 30 November 2019
Slide 31: Investor Relations contacts
QUATERLY FINANCIAL RESULTS 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.grupoargos.