Applus+ Group FY 2018 Results Presentation 26 February 2019 - PowerPoint PPT Presentation

Applus+ Group FY 2018 Results Presentation 26 February 2019

Disclaimer This document may contain statements that constitute forward looking statements about Applus Services, SA (“Applus+” or “the Company”). These statements are based on financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations, which refer to estimates regarding, among others, future growth in the different business lines and the global business, market share, financial results and other aspects of the activity and situation relating to the Company. Such forward looking statements, by its nature, are not guarantees of future performance and involve risks and uncertainties, and other important factors that could cause actual developments or results to differ from those expressed or implied in these forward looking statements. These risks and uncertainties include those discussed or identified in fuller disclosure documents filed by Applus+ with the relevant Securities Markets Regulators, and in particular, with the Spanish Market Regulator, the Comisión Nacional del Mercado de Valores. Applus+ does not undertake to publicly update or revise these forward-looking statements even if experience or future changes make it clear that the projected performance, conditions or events expressed or implied therein will not be realized. This document contains summarised information or information that has not been audited. In this sense this information is subject to, and must be read in conjunction with other publicly available information including if necessary any fuller disclosure document published by Applus+. Nothing in this presentation should be construed as a profit forecast. 2

Results Presentation FY 2018 HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW SUMMARY & OUTLOOK Fernando Basabe Chief Executive Officer

Highlights � Organic revenue growth accelerated through the year � All four divisions contributed to revenue growth and organic margin improvement � Margin increase of 116 bps � Four acquisitions with €16 million revenue p.a. and strongly margin accretive � Senior debt refinanced to extend maturities and diversify sources of financing � FY Results: Revenue of €1,675.9 million up 5.9% (organic 1 +4.9%) � Operating profit 2 of €170.8 million up 19.4% (organic 1 +6.2%) � Operating profit 2 margin of 10.2%, up 116 bps (organic 1 +11 bps) � � Operating cash flow of €139.9 million up 2.8% Earnings per Share 2 of €0.68, up 9.4% � � Board proposes a dividend of 0.15 € per share, 15.4% increase over previous year (1) Organic is at constant exchange rates (2) All adjusted for other results and amortisation of acquisition intangibles 4

Results Presentation FY 2018 HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW SUMMARY & OUTLOOK Joan Amigó Chief Financial Officer

FY 2018. Revenue Bridge EUR Million +5.9% Mid single digit organic revenue growth with strong end to year 6

FY 2018. Adjusted Operating Profit Bridge EUR Million 19.4% Significant margin improvement 7

FY 2018. Summary Income Statement EUR Million FY 2018 2017 Change 1,675.9 1,583.1 5.9% Revenue Adj. Operating Profit (1) 170.8 143.0 19.4% 10.2% 9.0% + 116 bps Adj.Op.Profit margin PPA Amortisation (59.2) (50.1) Other results (6.9) (10.8) Operating profit 104.8 82.2 27.5% Finance result (17.3) (21.5) Refinancing Costs (3.9) 0.0 Associates 0.0 0.6 Profit before tax 83.5 61.3 36.2% Income taxes (23.4) (15.7) Net Profit 60.2 45.6 32.0% Minorities (19.0) (10.0) Net Profit Group 41.2 35.6 15.8% Adjusted Net Profit Group 97.2 82.8 17.4% EPS in € 0.288 0.267 7.9% (2) Adjusted EPS in € 0.680 0.621 9.4% (1) Adjusted Op. Profit is stated before amortisation of acquisition intangibles, Historical Management Incentive Plan, restructuring, impairment and transaction & integration costs (2) EPS is adjusted for other results and amortisation of acquisitions intangibles with its related tax impact 8

FY 2018. Cash Flow EUR Million � Working Capital increase mainly due FY to outstanding E&I Q4 revenue 2018 2017 Change performance (1) Adjusted EBITDA 218.0 187.3 16.4% � (Increase) / decrease in working capital (27.7) (4.1) Total Capex to sales ratio is steady at Capex - operational (46.9) (49.9) 3.0% Capex - Net new vehicle stations (3.5) 2.7 � Taxes lower due to refunds from Adjusted Operating Cash Flow 139.9 136.0 2.8% previous years and Interest lower Cash Conversion rate 64.2% 72.6% Taxes Paid (24.0) (32.5) due to timing Interest Paid (7.5) (15.8) � Extraordinaries & Others includes the Adjusted Free Cash Flow 108.4 87.8 23.5% Extraordinaries & Others (8.0) (14.9) cost of refinancing of 4M€ Applus+ Dividend (18.6) (16.9) � Acquisitions includes 3C, Karco, Dividends to Minorities (14.3) (8.0) Operating Cash Generated 67.5 48.0 DatapointLabs, Talon and final Acquisitions (43.8) (95.9) payment on Inversiones Finisterre Cash b/Changes in Financing & FX 23.7 (47.9) (1) Adjusted EBITDA is stated as Operating Profit before depreciation, amortisation and Other results 9

FY 2018. Net Debt – as defined by bank covenant 1 EUR Million DEC 2018 DEC 2017 Net debt reduction (*) LTM EBITDA includes proforma annual results from acquisitions (1) Stated at annual average rates (2) Others includes Extraordinaries, Dividends paid to minorities and other items 10

FY 2018. Currency Exposure % Revenue by Actual Currency � Euro was stronger than most currencies in 2018 � Hyperinflation in Argentina. See Appendix 16% 16% 4% 4% Average FX Exchange rates vs 4% 4% 4% 4% (2) JAN - DEC JAN - DEC OTHER Change 2018 2017 25% AUD 26% USD 1.182 1.128 (4.6)% GBP CAD 1.529 1.464 (4.3)% CAD GBP 0.884 0.876 (0.9)% (1) USD AUD 1.579 1.471 (6.8)% 47% 46% Closing DEC EUR (3) ARS 32.547 18.640 (42.7)% 43.623 FY 2018 FY 2017 (1) Includes currencies pegged to USD (3) ARS Revenue at closing rates represents 1.1% of (2) None above 4% Group Revenue 11

Results Presentation FY 2018 HIGHLIGHTS FINANCIAL REVIEW BUSINESS REVIEW SUMMARY & OUTLOOK Fernando Basabe Chief Executive Officer

FY 2018. Revenue by Division, End Market and Geography By Division By End Market Others 13% *13% *39% Oil & Gas 36% Aerospace 3% IDIADA 13% Energy & *3% *12% Industry 60% *64% Opex 70% (*68%) Construction Capex 30% (*32%) 4% *4% Power 9% *9% Auto 22% *20% Statutory Vehicle Automotive OEM 13% Laboratories 5% *12% Inspection 22% *20% *4% By Geography Spain 22% Middle East & Africa 11% *20% *9% Asia Pacific 10% *11% LatAm 10% *11% Rest of Europe * FY 2017 North America 20% *21% 27% *28% 13

Energy & Industry Division (I) EUR Million 826 824 670 Revenue 610 610 404 400 383 363 321 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 Oil & Gas Opex Oil & Gas Capex Other End Markets E&I has a balanced exposure between O&G and other end markets � Opex revenues have remained resilient throughout the O&G spending cycle � Capex revenues have declined materially with the sustained lower Oil price over the � previous three years With our installed base and market leading position we expect to benefit from any � Capex recovery Figures @ actual rates. 2018 O&G growth @ constant rates +3.5% 14

Energy & Industry Division (II) 40% Adj.Op. Revenue Profit 60% EUR Million FY 2018 Revenue FY 2018 Adj. Op. Profit +0.4% +0.2% Mid single digit organic revenue growth which was on an improving trend through the � year Double digit organic revenue growth in Q4 driven by some significant projects in LatAm, � Middle East and Canada Oil & Gas recovery driving the improvement in the division � Slight organic margin improvement at constant rates � Acquired Talon Test (Aerospace NDT in USA) in Q4 with $4.5 million revenue � Disposed of manpower business in the UK in Q4 � 15

Energy & Industry Division (III) � North America (27% of division revenue) grew low single digit on better market conditions. Oil & Gas improvement from smaller capex projects, pipeline integrity services and facility turnarounds. Canada saw growth of NDT outside of Oil & Gas � LatAm (10%), double-digit growth with a significant performance improvement in most countries. All end markets, Oil & Gas, Power and Infrastructure performing well � Northern Europe (18%), down mid single digit mainly due to fewer large pipeline international projects managed out of the region. Local business, mainly downstream, remained stable � Southern Europe, Africa, Middle East, Asia-Pac (45%), strong growth led by Spain, Middle East and Oceania performing well in all end markets. Africa and South East Asia down due to lower Oil & Gas investment 16

Laboratories Division Adj.Op. Revenue Profit EUR Million 5% 5% FY 2018 Revenue FY 2018 Adj. Op. Profit +18.8% +44.7% Double-digit revenue and profit growth � Electromagnetic compatibility services for the Auto industry strongest growth � Construction, IT, Metrology growing double-digit � Five small acquisitions made in 2017 and 2018 at good multiples with high � growth and margins and total annual revenue of €12 million Further acquisition opportunities � 17