why acs?...11 5. successful transformation process completed 5.872 3.880 2.751 1.587 2.293 457 964...

January 10th, 2017

WHY ACS?

Building the world of tomorrow

7th Spain Investors Day

2

Why ACS is an attractive investment?

1. A global leading contractor

2. Highly diversified in terms of activities and geographies

3. Resilient operating performance

4. Sustainable growth potential

5. Successful transformation process completed

6. Trading at reasonable prices

ACS18%

Fluor14%

Skanska9%

BECHTEL9%

Tutor Perini7%

Balfour Beatty6%

Bouygues5%

Jacobs4%

Lendlease 4%

Obayashi3%

Others21%

Shimizu17%

Taisei16%

Obayashi16%

ACS14%

Hyundai13%

BECHTEL13%

Bouygues3%

Vinci3%

Others5%

3

1. A global leading contractor…

1st

Source: ENR, bloomberg, companies’ reports, internal analysis

US & Canada market share(1)

ASIA PACIFIC* market share(1)

Chinese companies excluded

(1) Market share: from total revenues of top contractors in the region

US & CAN total construction output $ 891br → top contractors revenues represent 8%

TOP 1 INTERNATIONAL CONTRACTOR

4

46%14.6 €bn

38%

3%

5%

R 4%

13%

8%

R

North America

South America

6%1.8 €bn

1%

1%

22%6.8 €bn

Europe Asia Pacific

25%7.9 €bn

Africa

1%0.3 €bn

6%

2%

1%

1%

LTM sales as of Sep 16

15%

NOTE: Sales distribution excluding recent disposals of Urbaser & Sintax


5%

11%

9%5%

32%

38%

5


9M16 Sales.

Building

Contract mining

Civil Works

EPC

Facility management

Support Services

Construction 75%

Industrial Services 20%

Environment 5%

NOTE: Sales distribution excluding recent disposals of Urbaser & Sintax

6

3. Resilient operating performance

2,040 2,110

EBITDA* and margin evolution (€mn)

2014

EBIT* and margin evolution (€mn)

* Excluding the contribution of Urbaser and renewables assets

2,039

6.2%6.3%

6.5%

EBITDA

EBITDA margin

2015 2016LTM

1,3131,390

2014

1,429

EBIT

EBIT margin

2015 2016LTM

4.0%

4.2%

4.5%

Improved margins across activities…

…with a sustainable trend for the future

7

4. Sustainable growth potential…

56,975

62,138

9M15 9M16

+9.1%

+14.6%

+6.7%

Robust backlog growing across regions… …and activities

47,21751,801

+9.7%

8,151 +5.4%

+8.7% 1,748

8,590

9M15 9M16

9M15 9M16

USA30%

Australia21%

Spain 10%

Canadá 5%

Germany 4%

Mexico 3%

Others 27%

Backlog bycountry

Industrial Services

TOTAL BACKLOG

1,608

Facility management

83%

3% 14%

Construction

Asia Pacific

North America

Domestic

8

4. Sustainable growth potential

Leading position in the US market

100km of high speed railway, California

€ 811 mn

Backlog

18.3€bn

Sales*

12.0€bn

*LTM

Chesapeake Bay Bridge-Tunnel, Virginia

€ 678 mn

Harbor Bridge replacement project, Corpus Christi, Texas

€ 363 mn

Long Island Rail Road (LlRR) Grand Central Terminal, New York

€ 346 mn

Union Terminal Renov. & Rehabilitation, MuseumCenter, Cincinnati, Ohio

€ 136 mn

C-470 Tolled Highway, Express Lanes, Segment 1, Denver, Colorado

€ 128 mn

Naval Academy's Center for Cyber Security Studies, Maryland

€ 103 mn

Sand Lake Road (SR 482), Orlando, Florida

€ 68 mn

Prince George s Community College in Largo, Maryland

€ 62 mn

+9%

+23%

+7%

YoY Sales growth (%)

2014 2015 2016 LTM

+19%

+18%

YoY Backlog growth (%)

2014 2015 2016LTM

+21%

TOP US Construction

Group in terms of revenuesI-10 and SR 303L Estrella

Freeway, Arizona

€ 59 mn

University of Michigan Clinical Pathology, Michigan

€ 56 mn

UC Davis North Addition, office building, Sacramento, California

€ 54 mn

Throgs Neck Bridge, New York

€ 44 mn

9


CIMIC HOT America

HOT Europe

Risk management and system deployment

Structure rationalization

B/S quality improvement and sale of non core assets

Management and strategy changes

Overheads cuts

Business reorganization

Increased operating efficiencyCash generation focus

10


Cost overruns reduction

D&A reduction thanks to lesser

capital intensity

EBIT HOCHTIEF FCF HOCHTIEF

2012

(321)

2013 2014 2015 2016LTM

(316)

322

985 978

349496

6891.4%

1.9%

2.5%

3.3%

542

2012 2013 2014 2015 2016LTM

733

3.8%

Increased operating efficiency

WC capital management discipline

CAPEX reduction

Cash generation focus

11


5.872

3.880 2.751

1.587

2.293

457

964

222

sep.-14 sep.-15 sep.-16 sep.-16 PF

Deuda Neta Deuda ligada a Activos Mantenidos para la Venta

2,5x

1,6x

1,4x

0,8x

Deuda Neta / EBITDA

Swift de-gearing process backed by strong cash generation from…

Net Debt Assets Held For Sale Debt

AHS debt include €742mn from Urbaser

5.43%

4.53%

Implicit cost of debt

-24%

958

2014 2015

Urbaser

1,036

LTM 2016

776

699532

606

3.74%*

-44%

* Ex Urbaser, annualized

…allowing a reduction of the implicit cost of debt through restructuring and refinancing efforts

Total Group indebtedness evolution

Gross financial expenses evolution

Net Debt / EBITDA

Proforma Net Debt after Urbaserdeal closing

Operating activities

Rotational assets

Sale of non core assets

12


Capital intensity reduction as

part of transformation process…

Deseasonalized Operating Working Capital variation (€mn)

2013 2014 2015 2016LTM

(873)

(571)

625387*Urbaser

327

Disciplined Working Capital management as part of transformation process

CAPEX Evolution (€mn)

2013 2014 2015

941

611

229*336

*Ex Urbaser

2016LTM*Ex Urbaser

-76%-32%

…enhanced by Urbaser sale

Risk management control system across the group

34,5x

20,1x

17,3x

14,9x

12,8x

0,0x 10,0x 20,0x 30,0x 40,0x 50,0x 60,0x

CELLNEX TELECOM

ACERINOX

FERROVIAL SA

INDITEX

MELIA HOTELS INT

AMADEUS IT GROUP

GRIFOLS SA

INDRA SISTEMAS

MEDIASET ESPANA

GAMESA

ACCIONA SA

AENA SA

VISCOFAN

MERLIN PROPERTIE

ABERTIS

BANKINTER

TECNICAS REUNIDA

ENDESA

ARCELORMITTAL

RED ELECTRICA

IBERDROLA SA

CAIXABANK S.A

TELEFONICA

ENAGAS SA

GAS NATURAL SDG

ACS

BANKIA SA

REPSOL SA

DISTRIBUIDORA IN

MAPFRE SA

BANCO SANTANDER

BBVA

BANCO SABADELL

INTL CONS AIRLIN

PER 16E

13

6. Trading at reasonable pricesPrice to Earnings (16E) ratio IBEX 35

PER high (> 17x)

PER average (13 - 17x)

PER low (<13x)

Within the lowest percentile of IBEX 35

Lowest PE of Group peers

Source: Bloomberg

0x 2x 4x 6x 8x 10x 12x 14x

2016

2015

Price/FCF (LTM)

WW Peer group* ex ACS & China ACS

0,0x 0,2x 0,4x 0,6x 0,8x 1,0x

2016

2015

Price/sales (LTM)


0x 5x 10x 15x 20x 25x

2016

2015

LTM PE ratio


0x 5x 10x 15x 20x

2016

2015

EV/EBITDA (LTM)


14

Price & valuation ratios vs worldwide peer Group

*Balfour Beatty PLC, Bouygues SA, Eiffage SA , Ferrovial SA, Fluor Corp, FCC SA, HOCHTIEF AG, Hyundai Engineering & Construction Co Ltd, Jacobs Engineering Group Inc, Boskalis Westminster, OHL SA, Orascom Construction Industries, Sacyr SA, Salini Impregilo SpA, Skanska AB, SNC-Lavalin Group Inc, Strabag SE, Vinci SA, Metallurgical Corp

Source: Bloomberg (BI)


0x

5x

10x

15x

20x

25x

30x

35x

2009 2010 2011 2012 2013 2014 2015 2016

15

EV to EBITDA ratio (LHS) vs Gearing (RHS) evolution

ACS

WW peer Group* weighted index

6.9x

17.3x

*EIFFAGE, CHINA STATE CONST, BOUYGUES, FCC, VINCI, BOSKALI W, SACYR, SALINI IMPREGILO, HYUNDAI E&C, SKANSKA, FLUOR, SNC-LAVALIN, HOCHTIEF, BALFOUR BEATTY PLC, STRABAG, FERROVIAL, OHL, JACOBS ENGINEERING, METALLURGICAL CHINA


7,3x

5,6x

2,6x2,4x 2,4x

1,3x

0,8x

Total Net Debt / EBITDA

2x

4x

5x

6x

3x

1x

7x

0x

5x

10x

15x

20x

25x

2009 2010 2011 2012 2013 2014 2015 2016

16

Price to Earnings (Trail LTM) ratio evolution

ACS

12.8x

20.4x

WW peer Group* weighted index

*EIFFAGE, CHINA STATE CONST, BOUYGUES, FCC, VINCI, BOSKALI W, SACYR, SALINI IMPREGILO, HYUNDAI E&C, SKANSKA, FLUOR, SNC-LAVALIN, HOCHTIEF, BALFOUR BEATTY PLC, STRABAG, FERROVIAL, OHL, JACOBS ENGINEERING, METALLURGICAL CHINA

Source: Bloomberg (BI)


17

ACS market & target price evolution

Source: Bloomberg consensus

€ 30.0

€ 33.5

6. Trading at reasonable prices with attractive intrinsic value

12% Upside

10

15

20

25

30

35

40

45

Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16

PX_LAST BEST_TARGET_PRICE

Dec-16

18

Conclusions

1. Excellent competitive position worldwide

2. Solid financial fundamentals

3. Multiple growth opportunities

4. Attractive share price

4. ANÁLISIS COMPARATIVO SERVICIOS INDUSTRIALES

19

España 33%

México 24%Arabia Saudita 7%

Perú 6%

Brasil 3%Portugal 3%

Chile 2%Estados Unidos 2%

Rep. Dominicana 2%

Resto 18%

América del Norte26%

América del Sur21%

Europa40%

Asia Pacífico10%

África2%

VENTAS por países y regiones

CARTERA por regiones

VENTAS por actividades

Servicios Industriales Desglose por actividades

Millones de Euros 2014 2015 Var.

Mantenimiento Industrial 3.471 3.759 +8,3%

Redes 661 738 +11,7%

Instalaciones Especializadas 1.965 2.163 +10,0%

Sistemas de Control 845 859 +1,7%

Proyectos Integrados 2.923 2.691 -7,9%

Energía Renovable: Generación 406 113 -72,1%Eliminaciones de Consolidación (50) (63)

TOTAL 6.750 6.501 -3,7%

Total Internacional 4.284 4.335 +1,2%

% sobre el total de ventas 63,5% 66,7%

Servicios Industriales Cartera por Áreas Geográficas

Millones de Euros dic-14 dic.-15 Var.

España 1.937 2.026 +4,6%

Resto de Europa 370 350 -5,4%

América 3.626 3.551 -2,1%

Asia Pacífico 1.247 1.659 +33,1%

África 842 836 -0,8%

TOTAL 8.021 8.421 +5,0%

why acs?...11 5. successful transformation process completed 5.872 3.880 2.751 1.587 2.293 457 964...

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