25 slides from Indra Sistemas, S.a. Class A's earnings presentation, Feb 27, 2015
Slide 1: Results 2014
RESULTS 2014 February 27th , 2015
Slide 2: Conference Call Details
CONFERENCE CALL DETAILS The Company will hold a conference call for investors and analysts today at 18:30 (CET). Please find below conference call telephone numbers: Spain: +34 91 789 2387 UK: +44 (0) 207 750 9908 USA: +1 866 305 9104 A recording of the conference call will be available for 15 days
Slide 3: Disclaimer
This presentation has been produced by Indra for the sole purpose expressed therein. Therefore, neither this presentation nor any of the information contained herein constitutes an offer sale or exchange of securities, invitation to purchase or sale shares of the Company or any advice or recommendat
Slide 4: Key Messages
FY14 PERFORMANCE KEY MESSAGES Revenues grew +5% in local currency, increasing in all verticals. Spanish revenues flat, after four years declining Backlog totaled €3,473m, with double digit growth rates in order intake in AMEA and Latam Recurrent operating margin reaches 6.9%, despite ongoing
Slide 5: Main Headlines
FY14 PERFORMANCE MAIN HEADLINES Variation FY14 Local currency FY13 / reported Order Intake (€M) 3,013 +4% / -1% 3,029 Revenues (€M) 2,938 +5% / +1% 2,914 EBIT margin 6.9% -0.9 pp 7.8% Recurrent (1) Net profit Recurrent (€M) 104 -24% 138 Net profit Reported -92 -179% 116 (€M) NWC (DoS) 106 / 81 (2) -
Slide 6: Non Recurring Items
FY14 PERFORMANCE NON RECURRING ITEMS Concept (€M) Provisions, impairments and over-runs -231 Impairment of Goodwill -21 Impairment of Tax credit -19 Impairment of Intangible assets -19 Efficiency improvement costs -17 Other -6 Total before provisions reversal -313 Provisions reversal 48 Total after
Slide 7: Both Services and Solutions Grew Mid Single Digit in Local Currency
FY14 PERFORMANCE BOTH SERVICES AND SOLUTIONS GREW MID SINGLE DIGIT IN LOCAL CURRENCY Revenues by Segment (€M) Book-to-Bill Local Currency / Reported 2,938 2,914 +5% / +1% 1.08x 35% 1,026 +7% / +2% 1,051 36% 1.05x 1.01x 0.94x 65% +4% / -0% 64% 1,888 1,887 2013 2014 2013 2014 Solutions Services 33 | 7
Slide 8: Solid Order Intake (+4%); Revenues Up in All Geographies
FY14 PERFORMANCE SOLID ORDER INTAKE (+4%); REVENUES UP IN ALL GEOGRAPHIES Order intake (€M) Revenues (€M) Local Currency / Reported Local Currency / Reported Book-to-Bill Book-to-Bill +4% / -1% +5% / +1% 1.0x 3,029 3,013 1.0x 2,938 2,914 Spain 0.9x +0% / +0% 0.9x +2% / +2% 1,036 1,037 39% 39% 1,125
Slide 9: After Four Years of Declining Revenues, Spain Was Flat in 2014
FY14 PERFORMANCE AFTER FOUR YEARS OF DECLINING REVENUES, SPAIN WAS FLAT IN 2014 Corporate clients 7% 6% 7% 3% 2% Spanish revenues -1% -1% -3% -3% -9% -10% -11% Public clients -18% -23% -26% 2008 2009 2010 2011 2012 2013 2014 2007 vs 2014 1,468 -22% 1,147 Public 864 -47% 461 40% 686 60% Corporates 60
Slide 10: Four Verticals Now Up in Spain; All Up Internationally
FY14 PERFORMANCE FOUR VERTICALS NOW UP IN SPAIN; ALL UP INTERNATIONALLY (IN LOCAL CURRENCY) Local Currency / Reported Spain Int. (LC) Revenues by Vertical (€M) 2,914 2,938 +5% / +1% Energy & Industry 17% 479 +3% / -1% 473 16% Financial Services 16% 470 +9% / +3% 485 17% Telecom & +2% / -9% 322 12% 3
Slide 11: Margin Pressure Remains in Both Services and Solutions
FY14 PERFORMANCE MARGIN PRESSURE REMAINS IN BOTH SERVICES AND SOLUTIONS, DRIVING RECURRENT EBIT MARGIN DOWN 2013 2014 2013 2014 2014 7.2% in 2013 2013 2014 7.4% 2014 16.6% 16.0% 15.0% 7.8% in 14.3% 2013 11.9% 11.2% 6.9% 6.9% Solutions Services Total Overheads Indra EBIT 2014 Margin Recurrent Contrib
Slide 12: Workforce Remains Almost Flat
FY14 PERFORMANCE WORKFORCE REMAINS ALMOST FLAT Latam 14,388 (-3%) Spain 21,461 (+4%) 37% 55% 4% 5% Asia, Middle East & Africa 1,493 (+19%) Europe & North America 1,788 (+6%) 39,130 professionals (+2%) + c.3,500 subcontractors | 12
Slide 13: Net Working Capital Compressed to 106 DoS
FY14 PERFORMANCE NET WORKING CAPITAL (BEFORE NON RECURRENT ITEMS) COMPRESSED TO 106 DoS Equivalent Days of Sales (DoS) 109 106 -6 46 52 128 +4 132 -71 -1 -72 2013 2014 Accounts Receivable Accounts Payable Inventory | 13
Slide 14: Receivables DoS Reduced in Spain, Mainly on Public Clients
FY14 PERFORMANCE RECEIVABLES(1) DoS REDUCED IN SPAIN, MAINLY ON PUBLIC CLIENTS Spain (2) STATE PPAA REGIONAL SPAIN PPAA LATAM PRIVATE EU/USA Latam (2) AMEA BRAZIL MEXICO 2014 2013 REST OF LATAM (1) Clients + Unearned revenues – Prepayments (2) DoS calculated according to the revenues of each categor
Slide 15: Free Cash Flow Bridge
FY14 PERFORMANCE FREE CASH FLOW BRIDGE 17 44 57 184 53 47 OPERATING Net Other Capex Taxes FREE CASH CASH FLOW Working Operating FLOW Capital Changes 15 | 15
Slide 16: FCF Guidance Not Achieved Mainly Due to NWC and Profitability
FY14 PERFORMANCE FCF GUIDANCE NOT ACHIEVED MAINLY DUE TO NWC AND PROFITABILITY 100 22 25 13 7 47 FCF Guidance Net Working EBIT Taxes Capex FCF 2014 Capital | 16
Slide 17: Net Debt Bridge
FY14 PERFORMANCE NET DEBT BRIDGE FCF = 47 M€ 12 56 20 184 53 57 17 44 663 622 Net Debt 2013 Operating Cash Net Working Other Operating Taxes Capex Financial Dividend Non-CF items Net Debt 2014 Flow Capital Changes Investments + Treasury Stocks | 17
Slide 18: Capital Structure
FY14 PERFORMANCE CAPITAL STRUCTURE December 2014 December 2013 (€M) Total % of total Total % of total L/T Debt 826 86% 790 80% S/T Debt 131 14% 196 20% Gross Debt 957 100% 986 100% Cash & Others 294 n.m. 363 n.m. Net Debt 663 n.m. 622 n.m. Cost of Net Debt 4.5% 4.8% Gross Debt Maturity Profile (dec-
Slide 19: Annex: P&L
FY14 PERFORMANCE ANNEX: P&L 2014 2013 Variation €M €M €M % Revenues 2,937.9 2,914.1 23.8 1 Other income 93.3 75.1 18.2 24 Materials consumed and other operating expenses (1,353.5) (1,333.0) (20.4) 2 Personnel expenses (1,405.5) (1,453.5) 48.0 (3) Other results (4.1) 75.5 (79.6) NA Gross Operating Pr
Slide 20: Annex: Balance Sheet
FY14 PERFORMANCE ANNEX: BALANCE SHEET 2014 2013 Variation €M €M €M Property, plant and equipment 127.3 144.1 (16.8) Intangible assets 289.8 285.9 3.9 Investments in associates and other investments 89.5 79.5 10.1 Goodwill 583.3 605.9 (22.7) Deferred tax assets 116.0 87.1 28.9 Non-current assets 1,20
Slide 21: Annex: Cash Flow
FY14 PERFORMANCE ANNEX: CASH FLOW 2014 2013 Variation €M €M €M Profit before taxes (97.0) 146.7 (243.7) Adjusted for: - Depreciations 64.2 51.9 12.3 - Provisions, capital grants and others 199.5 (9.6) 209.2 - Share of profit / (losses) of associates and other investees 3.3 (0.7) 4.0 - Net financial
Slide 22: Annex: Shareholders (February 2015)
FY14 PERFORMANCE ANNEX: SHAREHOLDERS (February 2015) % as of Estatal de Sociedad Share Capital Participaciones Industriales S.E.P.I. (*) 20.1% Others Corporación 53.5% 12.5% Financiera Alba (*) 10.7% 3.2% Fidelity Group Telefónica, S.A. (*) Board of Directors representation CNMV data. Identified sha
Slide 23: Annex: Revenues 2014 by Vertical
FY14 PERFORMANCE ANNEX: REVENUES 2014 BY VERTICAL Public Administrations Transport & Traffic Security & Defense Energy & Industry Financial Services Telecom & Media & Healthcare as % of 21% 17% 16% 18% 17% 11% Sales Air Traffic Air Defense Customer Taxes & Justice Core Banking Networks & Management
Slide 24: Annex: 2014 Diversification by Vertical
FY14 PERFORMANCE ANNEX: 2014 DIVERSIFICATION BY VERTICAL Spanish revenues break down by market 2014 Security & Transport & Defence Traffic 9% 12% Total 39% 61% Telecom & Media 15% Transport & 26% 22% 78% Financial Services Traffic 19% Energy & Industry Security & 21% 79% Defence 19% PPAA & PPAA & He
Slide 25: Investor Relations
Investor Relations irindra@indra.es Avda. de Bruselas 35 28108 Alcobendas, Madrid Spain T +34 91 480 98 00 www.indracompany.com