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1 1H 2013 Results | August 14, 2013
2 1H 2013 Results | August 14, 2013
This document was prepared by Grupo Soares da Costa, SGPS, SA (Soares da Costa) to be used for its first half of 2013 results presentation. Nor Soares da Costa, nor any of its representatives, assume any type of responsibility regarding the eventual negative effects or losses caused by the use of the information contained in this document. This document does not constitute a public offer or an invitation to buy or sell shares, namely as defined in the Portuguese Securities Code, chapter III. This document does not constitute an offer/ request to buy, sell or exchange, and is not a voting request or the request for an approval in any jurisdiction. Neither the document, nor any part of its parts, constitute a contract, nor can it be used to integrate or interpret any contract or any type of commitment.
1. HIGHLIGHTS 3
2. FIRST HALF 2013 RESULTS 8
3. FINANCIAL STRUCTURE 14
ANNEX: MAIN WORKS AWARDED 16
CONTENTS
3 1H 2013 Results | August 14, 2013
OPERATIONAL PROFITABILITY WITH A RESILIENT PROFILE
ORDER BOOK EVOLUTION
CAPITALIZATION OPERATION
HIGHLIGHTS
4 1H 2013 Results | August 14, 2013
HIGHLIGHTS
CAPITALIZATION OPERATION
As announced yesterday, August 13, as material information, the Group reached an agreement regarding an operation of capitalization of its subsidiary Soares da Costa Construção, the sub holding that owns the Group’s participations in the construction business area
This capitalization will take place through a share capital increase to be subscribed by a new investor, amounting to 70 million Euros
In the final corporate structure, after recapitalisation operation, Soares da Costa will hold 33.33% of the capital of Soares da Costa Construção and will maintain the participations currently held in the remaining business areas and the construction activity in the US market
MORE INFORMATION ON THE CAPITALIZATION OPERATION AVAILABLE ON THE MATERIAL INFORMATION PRESS RELEASE OF AUGUST 13, THAT CAN BE DOWNLOAD FROM HTTP://WEB3.CMVM.PT/ENGLISH/SDI2004/EMITENTES/DOCS/FR46415.PDF OR HTTP://WWW.SOARESDACOSTA.PT/DOCUMENTS/COMUNICADO_20130813_EN.PDF
5 1H 2013 Results | August 14, 2013
THIS OPERATION HAS THE POTENTIAL OF CREATING VALUE FOR THE GROUP:
Creating value for the Group's participation in the construction area:
- Strengthening of the capital structure of Soares da Costa Construção
- Strengthening of working capital and creation of conditions for a
healthy financial balance of the construction business area
- Enhancing activity’s development in Angola, the main international
market
- Enhancing activity’s development in Mozambique and in other high
growth potential African countries
Dividend policy of 80% of the results of Soares da Costa Construção provided
that certain financial ratios reach the minimum levels defined
Reinforcement of confidence of the stakeholders: creditors, customers,
suppliers, employees
Improvement the Group's operational sustainability in the medium/ long term
EQUITY INJECTION
NEW INVESTOR
FINANCIAL RESTRUCTURING
HIGHLIGHTS
CAPITALIZATION OPERATION
6 1H 2013 Results | August 14, 2013
HIGHLIGHTS
OPERATIONAL PROFITABILITY WITH A RESILIENT PROFILE
In spite of the turnover reduction recorded in the last quarters, profitability has shown a resilient profile:
average recurrent EBITDA margin of the last five quarters is 12.7%,
exceeding 11% in each and every quarter
16%
-17%
-4%
-11% -6% -4%
28%
-9%
-24%
-14%
13%
-1%
2Q 2012 3Q 2012 4Q 2012 1Q 2013 2Q 2013 Average
Change in Turnover
Change in Recurrent EBITDA
8.9%
13.8%
3.6%
10.1% 11.2%
13.2%
14.4%
11.4% 11.1% 13.3%
2Q 2012 3Q 2012 4Q 2012 1Q 2013 2Q 2013
EBITDA margin Recurrent EBITDA margin
7 1H 2013 Results | August 14, 2013
455 426 415
504 525
112 119 120 153 156
44 47 47 51 44
30.06.2012 30.09.2012 31.12.2012 31.03.2013 30.06.2013
210 167 156
415 504 525
120 153 156
149 147 135
153 110 92
31.12.2012 31.03.2013 30.06.2013
Othercountries
U.S.
Mozambique
Angola
Portugal
HIGHLIGHTS
ORDER BOOK EVOLUTION
ORDER BOOK OF 1,064 MILLION EUROS AS OF 30.06.2013 reflecting the strong and growing internationalisation of the Group’s activity , with 85% of the backlog’s works in
the external market
1,048 1,064 1,082
AFRICA is the most dynamic region, representing circa 68% of total order book,
recording a very positive performance
Angola +15% YoY
Mozambique +39% YoY
O. African countries
8 1H 2013 Results | August 14, 2013
1H 2013 RESULTS | KEY PERFORMANCE INDICATORS
CONSOLIDATED TURNOVER OF 316 MILLION EUROS (-26% YOY)
EBITDA OF 34 MILLION EUROS, DECREASING 14% COMPARED WITH 1H 2012 (RESTATED) BUT REACHING A 10.6% MARGIN, ABOVE THE 9.1% MARGIN RECORDED IN THE PREVIOUS YEAR
RECURRENT EBITDA (EXCLUDING COSTS WITH LABOUR CONTRACTS’ TERMINATION BY MUTUAL AGREEMENT) OF 38 MILLION EUROS, CORRESPONDING TO A 12.2% MARGIN
NET EARNINGS OF -9 MILLION EUROS (VS. -14 MILLION EUROS IN 1H 2012 ON A COMPARABLE BASIS), REFLECTING THE DECREASE OF OPERATIONAL ACTIVITY, NON-RECURRENT COSTS AND HIGHER CORPORATE TAXES
FINANCIAL RESULTS OF -24 MILLION EUROS, IMPROVING ALMOST 6 MILLION EUROS VERSUS THE -30 MILLION RECORDED IN 1H 2012 (RESTATED)
Note: Although the results of the 1H 2012 were originally reported using the financial asset method in the accounting of Beira Interior motorway concession, from the second half of 2012 onwards the auditors recommended its replacement by the intangible assets model; therefore we present the 1H 2012 figures restated using this second criterion, which makes them comparable with the figures for the 1H 2013
9 1H 2013 Results | August 14, 2013 Figures in million Euros
Consolidated 1H 2012 restated
1H 2013 YoY 1Q 2013 2Q 2013 QoQ
Turnover 428.5 315.9 -26% 162.8 153.1 -6%
EBITDA 39.1 33.6 -14% 16.5 17.1 4%
EBITDA margin 9.1% 10.6% 1.5 pp 10.1% 11.2% 1.0 pp
Recurrent EBITDA 54.3 38.4 -29% 18.0 20.4 13%
Recurrent EBITDA margin 12.7% 12.2% -0.5 pp 11.1% 13.3% 2.3 pp
Operational Results (EBIT) 13.4 16.8 25% 7.8 9.0 16%
Operational margin 3.1% 5.3% 2.2 pp 4.8% 5.9% 1.1 pp
Financial Results -29.8 -24.1 -19% -10.5 -13.6 29%
Earnings before Taxes -16.3 -7.3 -56% -2.7 -4.5 64%
Income Tax 2.2 -2.0 -191% 0.9 -2.9 -433%
Minorities -0.2 0.0 -85% -0.1 0.1 -168%
Net Earnings attributable to the Group -14.0 -9.2 -34% -2.0 -7.3 268%
Order Book 1,181.6 1,063.6 -10% 1,081.7 1,063.6 -2%
Net Debt 916.3 1,058.5 16% 1,037.3 1,058.5 2%
1H 2013 RESULTS | KEY PERFORMANCE INDICATORS
10 1H 2013 Results | August 14, 2013
1H 2013 | TURNOVER EVOLUTION
316 MILLION EUROS OF TURNOVER,
-26% THAN BY 1H 2012 (RESTATED)
Figu
res
in m
illio
n E
uro
s
429 million 316 million
Turnover pressured by the negative evolution of
turnover of the construction and concessions
(Transmontana effect) business areas
Construction area reflect the (expected)
domestic decline and, as in 1Q, delays in the start/
execution of some works in Angola and US
219 210
244
199
230
191 183 163
153
2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13
140 79
176
129
68
55
35
35
9
17
1H 2012 restated 1H 2013
Other countries+87%
Mozambique +1%
U.S. -18%
Angola -27%
Portugal -44%
389
259
75
54
3
22
-56 -19
Other/ Adjust. -67%
Real Estate+670%
Concessions -28%
Construction-33%
11 1H 2013 Results | August 14, 2013
22.9
5.8
23.4
22.2
2.2
4.9
-9.3
0.7
1H 2012 restated 1H 2013
Other/ Adjust.+108%
Real estate +127%
Concessions -5%
Construction -75%
1H 2013 RESULTS | OPERATIONAL PROFITABILITY
33.6 MILLION EUROS EBITDA,
CORRESPONDING TO A 10.6% MARGIN
Figu
res
in m
illio
n E
uro
s
39.1 million
33.6 million
The EBITDA decrease is essentially explained by the
construction area, penalised by non recurrent costs of
the adjustment of the labour force size to market
conditions and by the fall in the domestic production
EBITDA margin (recurrent and non recurrent) had a
resilient performance in the first half, despite the 26%
decrease of turnover
9.1%
12.7%
10.6%
12.2%
EBITDA margin Recurrent EBITDA margin
1H 2012 restated
1H 2013
12 1H 2013 Results | August 14, 2013
1H 2013 RESULTS | PROFITABILITY
REDUCTION OF THE NET LOSSES IN 1H 2013 IN
ALMOST 5 MILLION EUROS TO -9.2 MILLION EUROS
Recovery of the net losses allowed by the
25% improvement in EBIT and by the net
financial costs decrease of 5.7 million Euros,
which more than offset the aggravation of the
tax function
(million Euros) 1H 2012 restated
1H 2013 Variation Variation
%
Net financing costs -23.5 -20.3 3.2 -14%
FX differences 1.7 0.4 -1.4 -78%
O. Financial gains and losses -8.0 -4.2 3.8 -48%
Financial results -29.8 -24.1 -5.7 -19%
39.1 33.6
13.4 16.8
-29.8 -24.1
2.2
-2.0
-14.0 -9.2
1H 2012 restated 1H 2013
EBITDA EBIT Financials Income tax Net earnings
13 1H 2013 Results | August 14, 2013
389.5 259.1
5.9%
2.2%
0%
1%
2%
3%
4%
5%
6%
7%
0.0
50.0
100.0
150.0
200.0
250.0
300.0
350.0
400.0
450.0
1H 2012 restated 1H 2013
Turnover EBITDA margin
92.6 54.1
25.3%
40.9%
0%2%4%6%8%10%12%14%16%18%20%22%24%26%28%30%32%34%36%38%40%42%44%46%48%50%52%54%
0.0
20.0
40.0
60.0
80.0
100.0
1H 2012 restated 1H 2013
Turnover EBITDA margin
2.8 21.6
77.8%
22.9%
0%2%4%6%8%10%12%14%16%18%20%22%24%26%28%30%32%34%36%38%40%42%44%46%48%50%52%54%56%58%60%62%64%66%68%70%72%74%76%78%80%82%84%86%88%90%92%94%96%98%100%
0.0
5.0
10.0
15.0
20.0
25.0
30.0
1H 2012 restated 1H 2013
Turnover EBITDA margin
1H 2013 RESULTS | EVOLUTION BY BUSINESS AREA
Figures in million Euros
• Turnover’s evolution reflect the lower recognition of revenues from Transmontana and Estradas do Zambeze’s construction (27 million vs. 66 million in 1H 2012)
• As expected, and as happened in the previous quarter, this effect had a very positive impact on margin, that improved 16 p.p.
• Turnover decreased 33% with a fall in the domestic market but also in the international activity ( Angola and US, due to specific factors in some works, gradually recoverable)
• EBITDA margin penalised by non recurrent costs of 4.4 million; recurrent margin of 3.9%
CONSTRUCTION CONCESSIONS REAL ESTATE
• 1H 2013’s turnover includes 19 million from the sale of the Talatona project in Angola, as announced in 1Q 2013
• Benefiting from this operation, EBITDA reached 4.9 million (vs. 2.2 million in 1H 2012), weighing 15% of the Group’s consolidated EBITDA in the first half
14 1H 2013 Results | August 14, 2013
FINANCIAL STRUCTURE | BALANCE SHEET AS OF JUNE 30, 2013
Figures in million Euros Variation to 31.12.2012
Balance sheet structure
remained relatively stable
compared with year-end 2012
Shareholders’ equity rose
6.6%, benefiting from a positive
net variation of the fair value of
the hedging derivatives
Variation of 8.5% on accounts
receivable (non current) related
with the construction phase of
the Transmontana and Estradas
do Zambeze concessions
Changes in the other current
assets and liabilities related with
multiannual construction
contracts
ASSETS 1,828 million +2.0% 1,828 million +2.0%
Other 196 million +9.0%Other 306 million +8.7%
Cash & Equiv. 101 million -0.6%
+7.2%
Accounts
Receivable400 million +1.6%
Accounts
Payable190 million -4.0%
Other 118 million -13.7%
Current
780 million
Stocks 84 million -6.1%
Current
748 million
Loans 252 million
+6.6%
Non Current
1,023 million
Loans 905 million +2.0%
Tangibles 240 million -3.8%
Accounts
Receivable366 million
SHAREHOLDERS' EQUITY +
LIABILITIES
Non Current
1,048 million
Intangibles 319 million -2.0%
Shareholders' Equity 57 million
+8.5%
Other 123 million +5.6%
15 1H 2013 Results | August 14, 2013
CONSOLIDATED NET DEBT REACHED
1,058 MILLION EUROS AS OF JUNE 30, 2013,
+2% compared with March 31, 2013
Figu
res
in m
illio
n E
uro
s
467
Non recourse debt associated with corporate
finance projects was the main reason behind this
evolution, increasing 3 million Euros (+3%)
453 460 426 417
FINANCIAL STRUCTURE | NET DEBT EVOLUTION
EVOLUTION OF CORPORATE NET DEBT AND RATIO EVOLUTION OF PROJECT FINANCE NET DEBT
Note: Ratio Corporate Net Debt / EBITDA calculated with the last twelve months EBITDA associated with the recurrent activity financed with corporate debt
142 147 141 123 113
62 66 66 66 66
184 184 225 236 259
29 28 28 29 29
Jun 12 Sept 12 Dec 12 Mar 13 Jun 13
CPE
AutoestradasXXI
Intevias
Scutvias
499 536 564 584 592
8.0x 8.0x 8.9x
9.2x 12.3x
Jun 12 Sept 12 Dec 12 Mar 13 Jun 13
916 961
1,024 1,037 1,058
499 536 564 584 592
417 426 460 453 467
Jun 12 Sept 12 Dec 12 Mar 13 Jun 13
Net debt Corporate net debt Net debt in project finance
16 1H 2013 Results | August 14, 2013
ANNEX | MAIN WORKS AWARDED
(*) Works not included in the order book as of 30.06.2013
UNITED STATES "Design-build E71I24 I-75 North of CR 54 Widening" : a design-build project including the construction of an additional 6.7 mile-way (10.8 km) on the Interstate I-75, renewing of 2 bridges, construction of 2 new bridges and reformulation of an interchange (*)
54 million
ANGOLA Head offices of Empresa Nacional de Electricidade (ENE), in Luanda 35.5 million
BRAZIL Construction of a set of residences and infrastructures in Fortaleza, Ceará (*) 29 million
MOZAMBIQUE Reabilitation works of the bridges included in “ Section 6 and 7” of Nacala’s railway corridor to CDN – Corredor de Desenvolvimento do Norte
22 million
ANGOLA Office, commerce and residential building in Luanda to a private promoter 19 million
UNITED STATES Construction of 2 miles (3.2 km) of the motorway US301 to FDOT 17 million
MOZAMBIQUE Construction works of fifty dwellings, in Songo village in Tete region, to HCB-Hidroeléctrica de Cahora Bassa
16 million
MOZAMBIQUE Design-build of an office building to the Ministry of Justice in Maputo 11 million
ANGOLA Movicel’s call centre building, in Luanda 9 million
PORTUGAL Design-build of Beja’s waste water treatment centre to Águas Públicas do Alentejo, SA
4 million
17 1H 2013 Results | August 14, 2013
FINANCIAL CALENDAR 2013 CONTACTS
Earnings Release: 3rd quarter of 2013 – November 25
GRUPO SOARES DA COSTA SGPS SA
www.soaresdacosta.pt Public Company Head office: Rua de Santos Pousada, 220 4000-478 Porto Share Capital 160,000,000 Euros Commercial Registry Office of Porto, corporate body and register number: 500 265 753 Representative for Market Relations António Frada T: +351 22 834 22 43 Investor Relations Rita Carles T: + 351 21 791 3236 | + 351 22 834 2217 [email protected]
