ACCIONA Q1 2014 Results

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ACCIONA results report 1Q 2014 v6

Q1 2014 Results (January March)

2

CONTENTS

1. EXECUTIVE SUMMARY

2. CONSOLIDATED INCOME STATEMENT

3. CONSOLIDATED BALANCE SHEET

4. RESULTS BY DIVISION

4.1. Energy

4.2. Infrastructure, Water, Service

4.3. Other activities

5. ANNEX 1: MATERIAL INFORMATION, DIVIDENDS AND

SHARE DATA

5.1. Significant communications to the stock market

5.2. Dividend

5.3. Share data and share price performance

6. ANNEX 2: CONCESSIONS

7. ANNEX 3: SUSTAINABILITY

7.1. Sustainability indexes

7.2. Sustainability events during the period

8. CONTACT

Q1 2014 Results (January March)

3

In accordance with Regulation 1606/2002 of the European Parliament and of the Council of 19th July 2002, for each financial year starting on or after 1st January 2005, companies governed by the law of a Member State must prepare their consolidated accounts in conformity with the International Financial Reporting Standards (IFRS) adopted by the European Union if their securities are admitted to trading on a regulated market.

The ACCIONA Group's consolidated financial statements are presented in accordance with the International Financial Reporting Standards (IFRS) approved by the European Parliament to date. The financial statements were based on the individual accounts of ACCIONA, S.A. and its Group companies and they include the necessary adjustments and reclassifications to adapt them to IFRS.

ACCIONA reports in accordance with its corporate structure, which comprises three divisions:

Energy comprises commercial and industrial activities that range from the manufacturing of turbines, construction of wind farms to the generation, distribution and marketing of its different energy sources.

Infrastructure, Water and Service:

Infrastructure includes construction and engineering activities as well as mainly transport and hospital concession activities.

Water includes the construction of desalination, water and wastewater treatment plants, as well as integral water services management from bulk water abstraction all the way to discharging treated wastewater to the environment. ACCIONA Agua also operates water concessions across the entire water cycle.

Services includes the activities of facility services, airport handling, waste management and logistic services, amongst others.

Other activities this division includes the businesses of Trasmediterranea, real estate, Bestinver, wineries and other businesses.

Q1 2014 Results (January March)

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1. EXECUTIVE SUMMARY

Income Statement Data

(Million euro) Jan-Mar 13 Jan-Mar 14 Chg. (%)

Revenues 1,537 1,402 -8.7%

EBITDA 279 226 -19.3%

EBIT 110 129 17.0%

EBT 41 41 0.5%

Net attributable profit 34 33 -3.5%

Balance Sheet Data

(Million euro) 31-Dec-13 31-Mar-14 Chg. (%)

Equity 3,396 3,435 1.1%

Net debt 6,040 5,902 -2.3%

(Million euro) Jan-Mar 13 Jan-Mar 14 Chg. (%)

Ordinary capital expenditure 84 84 -0.5%

Operating Data

31-Mar-13 31-Mar-14 Chg. (%)

Infrastructure backlog (Million euro) 7,007 5,528 -21.1%

Water backlog (Million euro) 10,011 9,831 -1.8%

Total wind installed capacity (MW) 7,135 6,997 -1.9%

Total installed capacity (MW) 8,476 8,359 -1.4%

Total production (GWh) (Jan-Mar) 6,172 6,106 -1.1%

Average workforce 31,866 31,625 -0.8%

Key highlights of Q1 2014

IFRS 11 implementation: IFRS 11 Joint Arrangements came to force on 1st January, replacing IAS 31 which had been effective until that date. IFRS 11 has implications on some ACCIONA Group companies which were formerly consolidated under the proportional method and are now consolidated by the equity method. This new accounting rule requires that the 2013 financial statements are re-expressed on a like-for-like basis in order for the information to be consistent between reporting periods. Therefore, all the references and figures of 2013 have been restated under the new methodology. The main implications as of 31st March 2013 are the following: revenues and EBITDA are 84 million and 47 million lower respectively; assets are 1,089 million lower and net financial debt decreases by 757 million.

Accounting useful life of wind assets extended: ACCIONA Group has extended the useful life of its wind assets from 20 to 25 years. The analysis has been based on both internal and external sources. As a result, the line Depreciation and amortization in the consolidated income statement reflects the impact of this change since January 1st 2014, resulting in 31 million lower depreciation charges in the quarter.

Q1 2014 Results (January March)

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This accounting change affects all wind assets whether national or international.

Sale of German assets completed: the sale of the German renewable portfolio to Swisspower Renewables, agreed in December 2013, was completed during the first quarter of 2014. The portfolio consisted of 18 wind parks with an attributable capacity of 150.3MW and weighted average life of 8 years. The transaction amounted to 157 million including net financial debt of 85 million. The capital gain amounts to 28 million. The debt associated to this asset was deconsolidated as of December 2013 (debt of assets held for sale).

First convertible bond issue: ACCIONA has issued on the 16th January 2014 a convertible bond for a total amount of 342 million, with a fixed annual coupon of 3%. The bond is convertible into existing or new shares and the conversion price was set at 63.02 per share.

Draft renewables Ministerial Order published: on 3rd of February 2014 the CNMC (Comisin Nacional de los Mercados y la Competencia) presented for public consultation the Draft Ministerial Order containing the new parameters for the remuneration of renewable energy. The RD-L 9/2013 is in force since 14th July 2013 and therefore the Q1 2013 results of the Energy division were not affected by this new regulation.

Q1 2014 Results (January March)

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2. CONSOLIDATED INCOME STATEMENT (Million Euro) Jan-Mar 13 Jan-Mar 14 Chg. Chg.

(m) (m) (m) (%)

Revenues 1,537 1,402 -134 -8.7%

Other revenues 62 73 11 18.1%

Changes in inventories of finished goods and work in progress 4 -12 -16 n.m.

Total Production Value 1,603 1,463 -140 -8.7%

Cost of goods sold -335 -364 -29 8.6%

Personnel expenses -329 -306 23 -7.0%

Other expenses -659 -568 92 -13.9%

EBITDA 279 226 -54 -19.3%

Depreciation and amortisation -170 -125 45 -26.5%

Provisions 0 0 -1 n.m.

Impairment of assets value 0 0 0 n.m.

Results on non current assets 0 29 29 n.m.

Other gains or losses 0 0 0 n.m.

EBIT 110 129 19 17.0%

Net financial result -100 -98 2 -2.4%

Exchange differences (net) 9 2 -6 -72.0%

Var. provisions financial investments 0 -1 -1 n.m.

Income from associated companies 22 8 -14 -63.2%

Variation in fair value of financial instruments 0 0 0 n.m.

EBT 41 41 0 0.5%

Income tax -11 -4 7 -66.4%

Profit from Continuing Activities 30 37 7 25.2%

Minority interest 4 -4 -9 n.m.

Attributable Net Profit 34 33 -1 -3.5%

Q1 2014 Results (January March)

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Revenues

Revenues (Million Euro) Jan-Mar 13 Jan-Mar 14 Chg.(m) Chg.(%)

Energy 564 487 -78 -13.8%

Infrastructure, Water, Service 874 789 -85 -9.7%

Infrastructure 628 524 -103 -16.4%

Water 114 105 -9 -7.6%

Service 132 159 27 20.5%

Other Activities 125 151 26 21.1%

Consolidation Adjustments -26 -25 2 -7.3%

TOTAL Revenues 1,537 1,402 -134 -8.7%

Consolidated revenues decreased by 8.7% to 1,402 million, mainly due to the combined effect of the following factors:

Lower revenues in the Energy division (-13.8%) as a result of the regulatory changes in Spain in force since the second half of 2013 (RD-L 9/2013).

Decreasing Infrastructure revenues (-16.4%) due to the lower levels of construction activity.

Growth in Services (+20.5%) and Other Activities (+21.1%).

EBITDA

EBITDA (Million Euro) Jan-Mar 13 % EBITDA Jan-Mar 14 % EBITDA Chg.(m) Chg.(%)

Energy 237 85% 187 83% -50 -21.2%

Infrastructure, Water, Service 35 13% 28 12% -7 -20.6%

Infrastructure 29 11% 22 10% -7 -24.6%

Water 5 2% 6 2% 0 2.2%

Service 1 0% 0 0% 0 -31.6%

Other Activities 7 2% 10 4% 3 44.1%

Consolidation Adjustments 0 n.m. 1 n.m. 1 n.m.

TOTAL EBITDA 279 100% 226 100% -54 -19.3%

Margin (%) 18.2% 16.1% -2.1pp

Note: EBITDA contributions calculated before consolidation adjustments.

Q1 2014 EBITDA fell by 19.3% to 226 million mainly due to the lower contribution of the Energy and the Infrastructure division.

It is worth stressing that the impact of the RD-L 9/2013 on EBITDA is of 62 million lower. Otherwise the EBITDA of the group would have increased 2.8%.

The EBITDA margin stood at 16.1%, slightly lower that in Q1 2013 (18.2%), mainly due to the lower margins in the Energy and Infrastructure divisions.

With respect to the relative EBITDA contribution of the divisions: Energy contributed the most (83%), followed by Infrastructure (10%) and Water (2%). Other Activities contributed 4% of EBITDA.

Q1 2014 Results (January March)

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EBIT

EBIT reached 129 million (vs. 110 million in Q1 2013).

This is mainly explained by:

The lower depreciation charges resulting from the combined effect of the change of criteria of the life of the wind assets - increased from 20 to 25 years - with a positive impact of 31 million, and to the lower asset base subject to depreciation due to the extraordinary provisions implemented as of December 2013.

The capital gain registered by the sale of the renewable assets in Germany (28 million).

EBT

EBT (Million Euro) Jan-Mar 13 Jan-Mar 14 Chg.(m) Chg.(%)

Energy 40 12 -28 -69.5%

Infrastructure, Water, Service 14 8 -6 -44.2%

Infrastructure 15 9 -6 -41.3%

Water 3 3 1 21.7%

Service -3 -4 -1 21.6%

Other Activities -14 -8 6 -42.2%

Consolidation Adjustments 1 1 1 122.4%

Ordinary EBT 41 13 -27 -67.6%

Extraordinaries 0 28 28 n.m

TOTAL EBT 41 41 0 0.5%

Margin (%) 2.6% 2.9% +0.3pp

EBT amounted to 41 million, in line with the same period last year.

Net financial result remained relatively flat at 98 million.

Attributable Net Profit

Attributable net profit amounted to 33 million vs. 34 million in Q1 2013.

Q1 2014 Results (January March)

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3. CONSOLIDATED BALANCE SHEET

(Million Euro) 31-Dec-13 31-Mar-14 Chg. Chg.

(m) (m) (m) (%)

Property, Plant & Equipment and Intangible assets 8,589 8,561 -29 -0.3%

Financial assets 713 702 -11 -1.6%

Goodwill 79 79 0 -0.2%

Other non-current assets 1,386 1,368 -18 -1.3%

NON-CURRENT ASSETS 10,768 10,710 -58 -0.5%

Inventories 1,020 1,051 31 3.0%

Accounts receivable 1,787 1,738 -48 -2.7%

Other current assets 265 291 25 9.5%

Current financial assets 334 368 34 10.1%

Cash and Cash equivalents 1,164 1,127 -37 -3.2%

Assets held for sale 353 202 -151 -42.9%

CURRENT ASSETS 4,922 4,776 -147 -3.0%

TOTAL ASSETS 15,690 15,486 -205 -1.3%

Capital 57 57 0 0.0%

Reserves 5,152 3,180 -1,971 -38.3%

Profit attributable to equitly holders of the parent -1,972 33 2,005 -101.7%

Own Securities -6 -5 2 -24.7%

Interim dividend 0 0 0 -99.6%

EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT 3,230 3,265 35 1.1%

MINORITY INTERESTS 166 169 3 1.9%

EQUITY 3,396 3,435 38 1.1%

Interest-bearing borrowings 5,572 5,580 9 0.2%

Other non-currrent liabilities 1,773 1,776 3 0.2%

NON-CURRENT LIABILITIES 7,345 7,357 12 0.2%

Interest-bearing borrowings 1,965 1,816 -150 -7.6%

Trade payables 2,156 2,183 27 1.2%

Other current liabilities 648 627 -20 -3.2%

Liabilities associated to assets held for sale 180 69 -111 -61.9%

CURRENT LIABILITIES 4,949 4,694 -255 -5.1%

TOTAL LIABILITIES AND EQUITY 15,690 15,486 -205 -1.3%

Q1 2014 Results (January March)

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Attributable Equity

ACCIONAs attributable equity as of 31st March 2014 amounted to 3,265 million, almost flat relative to December 2013.

Net Financial Debt

(Million Euro) Chg. Chg.

(m) % Total (m) % Total (m) (%)

Interest-bearing borrowings without recourse 4,763 63% 4,800 65% 37 0.8%

Interest-bearing borrowings with recourse 2,774 37% 2,596 35% -178 -6.4%

Total interest-bearing debt 7,537 100% 7,396 100% -141 -1.9%

Cash + Cash equivalents -1,497 -1,494 3 -0.2%

Net financial debt 6,040 5,902 -138 -2.3%

31-Mar-1431-Dec-13

Net financial debt fell from 6,040 million as of 31st December 2013 to 5,902 million as of 31st March 2014. Such decrease was mainly due to cash generation of 169 million from operating activities which have more than offset the net negative cash flow from capex and financing activities.

Financial gearing has evolved as follows:

(Million Euro) 31-Mar-13 31-Dec-13 31-Mar-14

Net Debt 6,792 6,040 5,902

Gearing (Net Debt / Equity) (%) 123% 178% 172%

During Q1 2014 ACCIONA announced its first convertible bond issue, amounting 342 million with a fixed annual coupon of 3%. The conversion price was set at 63.02 per share and the bonds are convertible into existing or newly issued shares.

Capital Expenditure

(Million Euro) Jan-Mar 13 Jan-Mar 14

(m) (m)

Energy 32 76

Infrastructure, Water, Service 54 8

Infrastructures 49 4

Water 4 2

Service 0 3

Other Activities -1 0

Ordinary Net Capex 84 84

Extraordinary divestments 0 -67

Total Net Capex 84 17

Net ordinary capital expenditure across ACCIONAs divisions amounted to 84 million during the period in line with the same period a year ago.

Q1 2014 Results (January March)

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4. RESULTS BY DIVISION

4.1. Energy

(Million Euro) Jan-Mar 13 Jan-Mar 14 Chg. (m) Chg. (%)

Generation 422 349 -72 -17.2%

Industrial, development and others 143 137 -5 -3.8%

Revenues 564 487 -78 -13.8%

Generation 280 207 -74 -26.3%

Industrial, development and others -43 -20 23 -54.1%

EBITDA 237 187 -50 -21.2%

Margin (%) 42.0% 38.4%

EBT 40 12 -28 -69.5%

Margin (%) 7.1% 2.5%

ACCIONA Energy revenues decreased by 13.8% to 487 million. The EBITDA margin decreased by 3.6 percentage points to 38.4% vs. 42.0% in Q1 2013. EBT amounted to 12 million, a 69.5% lower than in the same period last year.

The results are mainly driven by the following factors:

The severe impact of the successive regulatory changes in Spain. The RD-L 9/2013 in force since 14th July 2013 has impacted by -62 million the EBITDA of the division. Otherwise, EBITDA would have increased by 4.8%.

The net reduction of the wind installed capacity by 138MW due to the combined effect of:

The sale of 62MW in Korea in the last quarter of 2013 and, 150MW in Germany in Q1 2014.

The installation of 74MW of new wind capacity during the last twelve months (1...