Abengoa Sa · OTC:AGOAF
Abengoa Sa — H1 2015 Earnings Presentation
60 slides from Abengoa Sa's earnings presentation, Jul 31, 2015
Slide 1: H1 2015 Earnings Presentation
Innovative Technology Solutions for Sustainability ABENGOA H1 2015 Earnings Presentation July 31, 2015
Slide 2: Forward-looking Statement
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: Agenda
Agenda Strategy Overview H1 2015 Financial Review Financial Appendix 3
Slide 4: Strategy Overview
ABENGOA 1 ~ Strategy Overview
Slide 5: Abengoa is today a stronger company
Abengoa Today Abengoa is today a stronger company Business Balance Sheet • Proprietary Technology • New Abengoa 3.0 structure allowing to share and rotate • In-house Development investments: Capabilities • ABY: 1.1 B€ market value of stake • Global Presence in ABY and 1.3 B€ of asset sales since IPO
Slide 6: A Robust Structure in Place
A Robust Structure in Place A business model poised to deliver a significant FCF generation A business model that secures equity from ABENGOA partners and provides a platform for R&D & Tech Business E&C O&M recurrent equity recycling… Dev Abengoa Yield • Demonstrated its ability to grow via 45% Targ
Slide 7: Our Strategic Plan
Our Strategic Plan Increase cash generation while continue growing Increase cash flow generation 1 Profitable Growth • Divest ~1.8-1.9 B€ in 2015 (vs initial • Focus on key markets in plan of ~1.6 B€) development and E&C • Develop the services & • Reduce ~50 M€ of G&A expenses technology business •
Slide 8: 2015 Divestiture Plan - Update
2015 Divestiture Plan - Update Disciplined delivery on divestiture plan to generate cash in 2015 2015 Follow-On Sale of ~2M Sale of ~1.8M shares of 13% at shares of of ABY ABY ABY ~45 M€ 270 M€ 56 M€ Equity Recycling ROFO 2 ROFO 3 ROFO 4 Solaben 1&6 equity unlock 110 M€ 301 M€ 277 M€ ~90 M€ APW-1 in
Slide 9: New Cost Reduction Plan
New Cost Reduction Plan ~50 M€ positive impact on 2016E EBITDA expected from this plan Expected Impact (M€) Several Initiatives 2015E 2016E • Reduce several staff functions • Streamline back-office functions in several regions ~15 M€ ~50 M€ • Promote synergies among different businesses • Maximize c
Slide 10: Optimize Bioenergy Business
Optimize Bioenergy Business Focus on optimizing 1G and demonstrating the 2G opportunity • No additional CAPEX • Cost reduction plan Maximize cash • Use 2G technology to: generation in 1G 1) Improve 1G production 2) Analyze moving volume to certain higher value-added products Demonstrate • Complete H
Slide 11: Two Pillars of Financial Management
Two Pillars of Financial Management Great growth opportunities subordinated to financial discipline Strong financial discipline… Liquidity Protection ...to manage highly profitable • Prudent management of cash and liquidity to selectively invest growth equity in attractive opportunities opportunitie
Slide 12: Capture Growth
Capture Growth Energy & Water infrastructure poised to grow significantly Current macro trends to address energy & water constraints Abengoa’s Competitive Advantages Electric Power (GW) – 2.3% CAGR 2012-2040 Sea Water STE PV 1 Technology: R&D as main source of Geothermal competitiveness & growth in
Slide 13: E&C Business Strategy
E&C Business Strategy Excellent position to capture significant wins in power & water Increase our presence in strategic markets and core sectors 164 B€ USA Chile Mexico Uruguay E&C pipeline Priority Brazil Spain Investing in Peru Markets delivery teams in B€ • Local E&C companies “next priorities”
Slide 14: Zoom in E&C Pipeline
Zoom in E&C Pipeline ~164 B€ of pipeline(1) opportunities diversified by technology Conventional Solar & Renewable T&D Water Ind. Plant Others Others In B€ • Railways, Electrification & Conventional Civil works 10% • Combined cycles and Industrials 7% cogeneration plants 39% (alliances) • Biofuels/C
Slide 15: Strategy by Sector
Strategy by Sector Excellent execution and technology differentiation to capture growth Transmission & Compete through focus and execution Distribution • Focus on large, higher value added projects and markets Conventional Power Generation • Execution with internal equipment, resources and teams • L
Slide 16: Probability Adjusted Pipeline
Probability Adjusted Pipeline ~23 B€ of opportunities expected to materialize in the mid-term Offers to be Rest of Identified Offers submitted Backlog submitted in next Opportunities already 12 months ~246 B€ 164 B€ Pipeline (<12 ~62 B€ months) + ~29 B€ 173 B€ Additional 8.8 B€ opportunities >12 mon
Slide 17: Value of Probability Adj. E&C Pipeline
Value of Probability Adj. E&C Pipeline Significant value derived from our E&C business model Activity Metric Value Key Drivers Business Value Prob. Adjusted Pipeline EBITDA Margin E&C Business (future Backlog) ~23 B€ (~17%) ~3.9 B€ EBITDA Estimated O&M for EBITDA Margin O&M Business Prob. Adj. Pipel
Slide 18: Atacama Project
Atacama Project Solar platform located in the Atacama Desert in Chile USD in millions ABENGOA Partner Total EPC margin and PPA already contracted technology fee + 404 0 Abengoa proprietary technology Equity contributions at COD (175) (214) FCF at COD +229 (214) Transfer of interest (conservative
Slide 19: Case Study – Norte III
Case Study – Norte III Norte III: Gas-Steam Combined Cycle Power Asset Location Project Description Capacity 906 MW Country Mexico Construction start 2015 PPA Term 25 years Currency Mostly USD, MxP Attractive Returns Off-taker CFE-México Maintenance 25 years Global IRR >15% Term Contractor Abengoa P
Slide 20: Case Study – ATE XXI
Case Study – ATE XXI ATE XXI: Transmission Line in Brazil Project Overview Project Description • 500 kV transmission line of 1,760 km Length 1,760 km Country Brazil • Financial close to be reached by in H1 2016 Construction start 2015 Concession agreement Term 30 years Asset Location Currency Brazil
Slide 21: Strong E&C Momentum
Strong E&C Momentum Large E&C contracts won in the July Project Name Country Sector Type T&D line California - Arizona USA Concession Announced Development, construction and O&M of a 114 mile Already transmission line between Delaney and Colorado River substations, reinforcing the electrical interco
Slide 22: Services & Technology Business
Services & Technology Business A significant “services & technology” business with high growth potential Services & Technology – H1 2015 M€ • High recurrence 453 Margin 150 32% • Highly profitable 303 activities 96 • Opportunity to Revenues InterCo Revs Consolidated Revenues EBITDA continue growing
Slide 23: Financial & Credit Profile
Financial & Credit Profile A key target: reduce our financial cost and improve credit profile • Prepayment of the HY bond due 2016 with funds already raised (375 M€) in Q4 2015 • Credit friendly actions to significantly improve cost of Short Term financing • Capture savings from recent rating upgrad
Slide 24: Abengoa's Business Value
Abengoa’s Business Value Unlocking the real value embedded in our different businesses June 2015 Debt ABENGOA • Corp. Net Debt: 2,555 M€ • NRDP: 2,189 M€ Concessions Concessions under E&C Abengoa Yield Bioenergy in Operation construction LTM EBITDA Equity BV EBV: 1,597 M€ 49% Stake Avge. EBITDA ~890
Slide 25: Valuation Analysis
Valuation Analysis Abengoa Sum of the Parts Method M€ ‘15E EBITDA Peers Trading Multiple Value Multiple Used E&C (excl. Tech.) ~660 ~8.0x ~6.5x 4,290 Services & Technology ~200 ~10.0x ~8.0x 1,600 Other Corp. (~50% Biofuels) ~70 ~5.5x ~5.0x 350 Corporate EV 6,240 49% Market Cap of ABY 1,130 Jun’15 EB
Slide 26: H1 2015 Financial Review
Agenda H1 2015 Financial Review 26
Slide 27: H1 2015 Financial Summary
H1 2015 Financial Summary Continued solid operating performance P&L Business KPI’s Balance Sheet & CF Revenues €3.4bn +3% E&C Bookings €3.0bn +3% Corp Leverage 2.5x -0.1x 3,295 3,390 2,942 3,035 1,753 1,831 1,442 1,333 2.5x 1,542 1,559 1,500 1,702 Jun.'14 Dec.'14 Mar.'15 Jun.'15 H1'14 H1'15 H1'14 H1
Slide 28: H1 2015 Executive Summary
H1 2015 Executive Summary Continued good business performance & strategic plan execution Solid business growth in revenues & EBITDA; Bioenergy recovering in Q2 • E&C: Strong bookings & backlog; growing business and maintaining high margins Business • Concessions: good operating performance, as expec
Slide 29: ROFO Highlights
ROFO 4 Highlights ROFO 4 signed: 277 M€ net proceeds before refinancing & sale to ABY ROFO 4 Assets Highlights Asset Stake Loc. Capacity Status • Contract signed: transaction approved by both Board of Directors Solaben 1&6 100% 100 MW Oper. • 277 M€ proceeds for Abengoa In operation since the end of
Slide 30: H1 2015 P&L Snapshot
H1 2015 P&L Snapshot Continued EBITDA growth and maintaining high margins H1 2015 Performance (€ millions) H1 2015 Y-o-Y Change H1 2015 revenue growth of 3% Revenues 3,390 +2.9% Raw Materials & Operating Cost /Income (2,738) +1% +9% growth in EBITDA in H1 2015 % of Sales 81% (110) Bp • Maintained st
Slide 31: Geographic Diversification
Geographic Diversification Revenue growth fueled by projects in the Americas Revenues by Region Weight (%) Y-o-Y Growth M€ Decrease in North 1,205 America due to South America 821 36% 25% +47% completion of Total Americas: large projects 952 +4% compensated with North America 1,263 28% 38% -25% soli
Slide 32: Business Highlights - E&C
Business Highlights - E&C Strong EBITDA, attractive margins & order intake Engineering & Construction (M€) Revenues EBITDA & Margin • Double-digit EBITDA growth due to strong execution on projects in Chile, +4% +23% 2,082 2,159 Mexico, South Africa,… 450 366 1,014 1,089 207 • High EBITDA margin in H
Slide 33: Business Highlights - Concessions
Business Highlights - Concessions Continued growth and high EBITDA margins in Concessions Abengoa Abengoa Concessions Concessions (M€) Revenues EBITDA & Margin +16% +28% 222 259 184 144 137 100 • Solid growth due to new projects in operation despite continue executing 156 Q2 112 71.0% asset sales in
Slide 34: Business Highlights - Bioenergy
Business Highlights - Bioenergy Significant improvement in market dynamics in Q2’15 vs Q1’15 Bioenergy (M€) Revenues EBITDA & Margin • Improved market dynamics in Q2 2015 (2)% (81)% but still weaker than 2014 991 84 972 45 • Higher crush spreads in EU in H1 2015; 585 Q2 605 8.5% 1.6% but lower in th
Slide 35: H1 2015 Corporate FCF
H1 2015 Corporate FCF +350 M€ Corporate FCF in H1 2015PF after recent transactions H1 2015 H1 2014 H1 2015 Post H1’15 events Adjusted ROFO 3 (partial) 2% ABY & ROFO 4 Sale Corporate EBITDA 416 463 463 Net Financial Income/(Expense) (240) (260) (260) Taxes (0) (9) (9) Dividends from Abengoa Yield - 2
Slide 36: Net Debt Overview
Net Debt Overview Net corporate leverage of 2.1x after recent transactions Dec. 2014 Jun. 2015 x Post H1’15 events Jun. 2015 Millions € Adjusted ROFO 3 (partial) 2% ABY Sale & ROFO 4 Corporate Debt 5,204 5,650 - - 5,650 Corporate Guaranteed by Corporate Corporate Cash, Equiv. & STFI (2,851) (3,095)
Slide 37: Corp. Net Debt Bridge
Corp. Net Debt Bridge Adjusted corporate net debt of ~2.1 B€ after recent transactions Amounts in M€ (103) (420) (90) (24) 217 (260) (9) 385 25 56 463 (2,353) (2,555) (2,114) Dec. Jun. Jun. 2014 2015 2015 PF 37
Slide 38: June 2015 Corporate Liquidity
June 2015 Corporate Liquidity 3.1 B€ of corp. liquidity as of June 2015 • Adequate availability of our liquidity: Cash & Cash Eq. • 689 M€ in the centralized system STFI 1,385 • 641 M€ placed in businesses available to June Treasury stock run operations 2015 115 Corp. • 240 M€ APW-1 payment in IFT e
Slide 39: Corporate Liquidity Analysis - H2 2015
Corporate Liquidity Analysis - H2 2015 Adequate liquidity buffer even under downside scenarios Liquidity Expectations Potential Downside Scenario Liquidity Impact of Management Plan vs. June 30, 2015 Aggravating effects under downside situation Management Assumptions H2’15 H2’15 Potential downside s
Slide 40: FY 2015E FCF Expectations (I)
FY 2015E FCF Expectations (I) Operating Cash Flow of ~500 M€ for FY 2015E H1 2015 H2 2015E FY 2015E Corporate EBITDA 463 ~467 ~930 Net Financial Income/(Expense) (260) ~(210) ~(470) Taxes (9) ~(1) ~(10) Dividends from Abengoa Yield 25 29 ~51 Funds from Operations 219 285 ~505 Change in Working Capit
Slide 41: FY 2015E FCF Expectations (II)
FY 2015E FCF Expectations (II) Asset sales (equity recycling): significant cash generation in 2015 H1 2015 H2 2015E FY 2015E Equity Recycling 573 476 – 576 ~1,050 – 1,150 13% Sale of ABY 270 270 2% Sale of ABY 56 56 ROFO 2 collection in H1 110 110 ROFO 3 collection in H1 193 193 Remaining ROFO 3, RO
Slide 42: FY 2015E FCF Expectations (III)
FY 2015E FCF Expectations (III) Equity & Corporate CAPEX to increase in 2015 H1 2015 H2 2015E FY 2015E Corp. & Equity CAPEX net of partners contributions (459) (475)-(405) (935)-(865) Higher CAPEX in 2015 due to several reasons: • Brazil: New financing conditions for T&D lines in Brazil impacting th
Slide 43: FY 2015E FCF Guidance
FY 2015E FCF Guidance FY 2015E Corporate FCF to range between 600-800 M€ FY 2015E Corp FY 2014 FCF Corporate EBITDA ~964 ~930 Net Financial Income/(Expense) (546) ~(470) Taxes 9 ~(10) Dividends from Abengoa Yield 11 ~54 Funds from Operations 438 ~505 Change in Working Capital & Others (532) (25) – 2
Slide 44: Corporate Debt Maturity Profile
Corporate Debt Maturity Profile Improving our debt maturity profile efficiently June 30, 2015 Pro-forma Recourse Maturity (€m) 1,122 1,046 250 410 818 6 633 581 500 571 62 583 284 550 273 779 125 500 162 349 313 207 162 136 39 81 Rest 2015E 2016E 2017E 2018E 2019E 2020E 2021E+ Other Corp. Debt Bond
Slide 45: FY2015 Guidance
FY2015 Guidance FY 2015 guidance and targets updated € Millions Previous Adjustment (including FY 2015 New Guidance ROFO 4 impact) € Millions YoY Growth Revenues 7,750-7,850 (450) - (150) 7,300-7,700 2-8% EBITDA 1,330-1,380 (20) 1,310-1,360 -7/-4% P&L Corporate EBITDA 920-935 unchanged -5/-3% Net In
Slide 46: Main Takeaways
Main Takeaways Attractive and highly profitable opportunities to continue grow profitably Significant value derived from our business model: cash generation while continue growing and reducing costs Delivery of strategic actions and optimize business Maintained reasonably low leverage A key target:
Slide 47: Financial Appendix
Agenda Financial Appendix 47
Slide 48: FY 2014 Results by Activity
FY 2014 Results by Activity € in Millions Revenues EBITDA EBITDA Margin H1’15 H1 ‘14 Var (%) H1 ’15 H1 ‘14 Var (%) H1 ’15 H1‘14 Engineering and Construction E&C 2,159 2,082 4% 450 366 23% 20.8% 17.6% Total E&C 2,159 2,082 4% 450 366 23% 20.8% 17.6% Abengoa Concessions Solar 123 158 (22)% 86 107 (20)
Slide 49: Update on Strategic Actions
Update on Strategic Actions Announced Early in 2015 Value @ Status Transaction Mar’15 Updated Value @ June 2015 Sale of 13% stake in ABY 270 M€ 270 M€ Collected in Q1’15 ROFO 2 agreement 120 M€ 110 M€ Collected in H1’15 194 M€ collected; EIG initial payment (APW-1) 460 M€ 434 M€ 240 M€ in escrow ROF
Slide 50: "12 month" E&C Pipeline - Details
“12 month” E&C Pipeline - Details ~164 B€ of Pipeline Opportunities Diversified by Sector & Region T&D Pipeline 163.9 B€ 10% 15% 9% Conventional (12 months) By Sector 14% Solar & Renew. Water Billion € 17% 51% Indust. Plants Others (0)% 163.9 163.9 11% North America 29% Europe Concessions By Region
Slide 51: June 2015 E&C Backlog
June 2015 E&C Backlog Maintained E&C backlog at 8.8 B€ with an additional 3.0 B€ of O&M Engineering & Construction Backlog Backlog Evolution Conversion to Revenues B€ B€ 3.0 38M€ 75M€ 2.9 +11% 8.8 3.0 8.0 3.3 ~34% 7.2 2.6 ~37% ~30% Mar'13 Dec.'14 E&C Jun.'15 O&M Backlog Rest 2015 2016 2017+ E&C Jun’
Slide 52: Additional O&M Backlog
Additional O&M Backlog +3.0 B€ of O&M revenues expected for the next ~25years Significant revenues from O&M services for Very well diversified by sector and external projects during the next 25 years by region 3.0 B€ ~2.9 B€ 5% 8% T&D 18% Renewable ~75 M€ Conventional 8% ~38M€ Water 62% O&M Mar'15 R
Slide 53: Consolidated Gross Debt at June 30, 2015
Consolidated Gross Debt at June 30, 2015 Gross Debt by Type Guarantees Amount (M€) Avge. Cost Corporate Debt 5,764 7.7% HY Bonds & Convertibles (ex-Greenbond) Corporate 3,306 Guaranteed by Corporate Syndicated Loan – Tranche A Corporate 683 Commercial Paper Corporate 340 Bilateral & multilateral loa
Slide 54: Zoom in Bridge Loans ("NRDP")
Zoom in Bridge Loans (“NRDP”) 2.2 B€ of Bridge Loans(1) as of June 30, 2015 Uses & Sources Bridge Loan Info Long-term N/R Debt Value Source Guarantee Maturity Expec. closing date Sources (€m) Uses (€m) A B EPC Sponsor Jul’15 – T&D Brazil 1,258 Jul’15 – Sep’17 C D & Corporate Sep’19 A Green Bond 537
Slide 55: Consolidated Cash-flow
Consolidated Cash-flow H1 2014 H1 2015 EBITDA 595 650 Working Capital (675) (135) Net Interest Paid (357) (442) Operating Taxes & Other Financial Cost (44) (86) Activities Non-monetary Adjust. (48) (55) Discontinued operations 49 119 A. Cash generated from operations (480) 51 Total CAPEX invested (9
Slide 56: Abengoa Concessions (I)
Abengoa Concessions (I) Concessions in Operation as of June 30, 2015 Sector Asset Country ABG ownership COD Current EBV Chennai India 25% 2010 Tenes Algeria 51% 2014 87.2 Ghana Ghana 56% 2015 M€ Inapreu Spain 50% 2010 20.6 Other concessions Spain Spain 50-100% 2008 M€ Concecutex Mexico 50% 2010 ATE
Slide 57: Abengoa Concessions (II)
Abengoa Concessions (II) Concessions under Construction/Development as of June 30, 2015 Sector Asset Country ABG ownership COD Current EBV Agadir Morocco 51% 2017 SAWS USA 45%* 2019 17.4 Zapotillo Mexico 100% 2017 M€ A3T Mexico 45% 2017 A4T Mexico 45% 2018 Nicefield Uruguay 45%* 2016 566.5 Hospital
Slide 58: Pending CAPEX by Project June 2015
Pending CAPEX by Project June 2015 Pending CAPEX Amounts based on the company´s best estimate as of jun. 30, 2015. Actual investments or timing thereof may change. Abengoa Entry in Total ABG Net Capacity Country Partners Debt (%) Operation Investment Equity Capex Consolidated Concessions Capex South
Slide 59: Asset Portfolio Capacity - Summary
Asset Portfolio Capacity - Summary Solid and well diversified asset portfolio Extensive concessional asset base once current capex plan completed Solid producing assets Solar (MW)(1) Transmissions (km) 2,293 Biofuels (Ml/year) 3,270 3,270 1,603 11,963 690 6,688 5,275 3,270 3,270 1,441 1,441 1,743 1,
Slide 60: Thank you
Innovative Technology Solutions for Sustainability ABENGOA Thank you July 31, 2015