________ CORPORATE PRESENTATION SEPTEMBER 2020 _______
INDEX 1. Overview of Graña y Montero 2. Group Strategy 3. Financial Results 4. Backlog and Commercial Opportunities 5. Corporate Governance 6. Legal Situation 7. Appendix
1. Overview of Graña y Montero 3
Largest Engineering & Construction company in Peru measured by revenues Shareholders – July 2020 More than 86 years of recognized operational excellence and significant international experience 24.20% 32.33% Revenues of US$ 1,232 MM and EBITDA of US$ 193 MM as of 2019 Backlog and recurrent business of US$ 1,841 MM 19.14% 4.40% as of 2Q2020 – 1.64x revenues 9.94% 10% 2,119 engineers and over 16,000 employees as of 2Q2020 Pension Funds Original Family Pacifico Corp S.A. Megeve Aberdeen Others Only Engineering and Construction company in Latin America listed in NYSE (since July 2013) ADSs represent 22.89% of the total share capital 4
OUR BUSINESS SEGMENTS REAL ESTATE TRANSPORTATION DEVELOPMENT ENERGY ROADS WATER 5
ENGINEERING & CONSTRUCTION Revenues & EBITDA (MM US$) 1,300 Maincompanies: 13.0% • 364 GyM: Construction company, founded in 1933, comprised of three divisions: electromechanic construction, civil construction and building construction. 315 800 8.0% 5.8% • GMI: Engineering consulting firm since 1984 consisting in two different divisions: Supervision 843 580 874 & Engineering and Geomatics. 300 3.0% 718 1.8% 1.4% 2.0% 272 • Vial y Vives- DSD: E&C company formed from a merger between two Chilean companies, -0.5% Vial y Vives and DSD Construcciones y Montajes. 2016 2017 2018 2019 2Q 2020 -200 -2.0% Revenues from Sold Assets Revenues from Operation 100 • Morelco : Colombian company acquired in 2014, specialized in electromechanical EBITDA Margin from operation 80 assemblies, civil works, and services for the oil and gas industry as well as energy industry. 60 18 New contracts 2019 & 2020: 40 • Quellaveco (US$ 318 million y US$ 43 million) 19 20 42 1 13 • 15 Quebrada Blanca - Chile (US$ 250 million) 12 -1 0 • MAPA – Arauco Chile (US$ 112 million) 2016 2017 2018 2019 2Q 2020 -20 • GMI – Golds Fields (US$ 73 million) EBITDA from Operation EBITDA from Sold Assets • GyM – LAP (US$ 110 million) • On Jan17, we sold our 8.7% participation in Red Eagle and on Apr18, we sold our 87.59% interest in Stracon GyM. 6
INFRASTRUCTURE Maincompanies: Revenues & EBITDA (MM US$) • Transportation 600 60.0% Ferrovías: Concessionaire of Line 1 of the Lima Metro 121 55 400 75 40.0% 437 30.6% • 46 Energy 31.6% 29.9% 28.6% GMP: Oil production (Blocks I, III, IV, V), Gas Processing Plant and operation of ten fuel 28.5% 200 423 20.0% 371 304 terminals in Peru 153 0 0.0% • Roads 2016 2017 2018 2,019 2Q 2020 Norvial: Concessionaire of Red Vial 5 Highway Revenues from Operation Revenues from Construction EBITDA Margin from operation Survial: Concessionaire of Nazca Cuzco Highway Canchaque: Concessionaire of the Bs As-Canchaque Highway 12 16 3 2 • Water 130 125 La Chira: Concessionaire for the construction, operation and maintenance of a waste water 111 87 treatment plant forLima 48 2016 2017 2018 2019 2Q 2020 • Operation & Maintenance of Infrastructure Assets Concar: It operates Peruvian roads and highways, including three private concessions, in EBITDA from Operation EBITDA from Construction addition to the Lima Metro 7
REAL ESTATE Revenues & EBITDA (MM US$) 250 60.0% Viva: Real estate development company 200 40.5% 40.0% 50 25.6% 150 93 20.8% 20.0% 24.3% Affordable Housing Projects under execution: 14.5% 100 149 Parque Comas, Parque de Huancayo, Parque Piura 0.0% 122 50 94 80 9 - -20. 2016 2017 2018 2019 2Q 2020 Revenues from Operation Revenues from Sold Assets 2016 2017 2018 2019 2Q 2020 EBITDA Margin from operation Unitsdelivered 938 1,418 1,278 1,452 151 Unitssold 1,720 1,604 1,920 1,934 272 56 68 50 36 20 • 2 On Feb17 we sold our 50% stake in Cuartel San Martín project and 22.5% stake in 14 Prinsur. On May18 we sold 420 ha of Almonte lands. 2016 2017 2018 2019 2Q 2020 EBITDA from Operation EBITDA from Sold Assets 8
2. Group Strategy
COVID -19 PLAN Dec 2020 Dec 2021 Apr 2020 Mar 2020 Phase 1 Phase 3 Stabilization Phase 2 (reactive) Relaunch Survival and Transformation 10
PHASE 2: SURVIVAL AND TRANSFORMATION (May 20- Dec 20) 2Q2020 Status of the Plan : Minimize the impact on companies results on 2020 Buy time to face upcoming • E&C: Reduce costs, catch up w/claims and Retain and assure critical additional works pending approval. financial and non-financial resources and talent Discuss terms to relaunch projects. deadlines • Infrastructure: Continue operations w/ • Identify and retain talent and define our • Implementation of severe discipline to restrictions, but dealing w/ lower oil price, succession and contingency plans. control cash and secure liquidity in all reduction in traffic and fuel consumption projects. • and law that suspended toll collection. Loss of 14 members of our team Implementation of cost reduction because of the pandemic. 15% of • Refinancing efforts with financial and program. company population confirmed to have non-financial suppliers to extend the or had COVID-19. terms of all non-operating debts. • Real Estate: No deliveries of housing units • in 2Q20, but keep selling future units Taking necessary precautions and • Elaboration of a financial plan that through virtual sales. Cost reductions implementing safety protocols in all our contemplates scenarios on the timing of implemented. projects to prevent the expansion of the the signature, whether it is during 2020 situation. or later – in search of a bridge financing. • Holding: Reorganization and cost • reduction plan. New structure announced The company secured medical and • As alternate or complement, in June 2020. economical support for the workers in divestment of assets to secure liquidity the event of infection. to avoid a potential distress situation. • With the exception of one E&C project, all projects are in execution implementing new standards. In most of the cases new contractual terms agreed w/clients. 11
PHASE 2: SURVIVAL AND TRANSFORMATION (May 20- Dec 20) Forecast 2020: Assumptions • Revenues close to US$ 1 E&C only executing current backlog with all additional costs • Oil price at US$ 36 per barrel for the rest of the year 2020 billion • Traffic for road concessions estimate improve vs 1Q2020 estimate • 65% of the original budgeted Real Estate units delivered in 2020 EBITDA close to US$ 115 million Opportunities to improve Forecast Net loss close to 13 million • New E&C contracts for 2020 • Additional trips for Line 1 due to social distancing Financial debt close to • Recovery in oil prices • Increase in storage occupation in Terminales del Peru US$ 460 million 12
PHASE 2: SURVIVAL AND TRANSFORMATION (May 20- Dec 20) Critical Milestones for 3Q2020: • Secure a bridge loan of aprox. US$ 45 MM to face potential scenarios until the plea agreement is reached • Conclude negotiations to lock amounts and terms of payment to be included in the plea agreement • Incorporate at least US$ 75MM into E&C backlog • Define new mandatory investment plan for Blocks III and IV • Conclude understanding regarding VESUR concession with Lima Municipality 13
PHASE 3: RELAUNCH 2021 Definition of the renewed company Values of Truth, purpose and of each Transparency and Relaunch company of the three business Integrity guiding our identity before units actions, with 2021 renewed purpose Provide a soul to our and aspiration new strategic plan 14
3. Financial Results 15
FINANCIAL RESULTS (US$ MM) Revenues Net Income 614 822 46 173 2016 2017 2018 2019 2Q2020 -25 -20 -152 1,228 1,232 1,052 981 -265 385 2016 2017 2018 2019 2Q2020 Revenues from Operation Revenues from Sold Assets EBITDA EBITDA Margin 18.7% 16.0% 15.7% 17.3% 129 8.4% 11.5% 10.8% 68 5.3% 6.9% 2.4% 0.2% 202 160 171 147 47 2016 2017 2018 2019 2Q2020 -8 -5.1% -3 -2.1% 2016 2017 2018 2019 2Q2020 -8.2% -157 -21.6% EBITDA from Operation EBITDA from Sold Assets & GSP 16 (1) 2016 Revenues reflect US$ 290 MM from GSP project. Net Margin Gross Margin EBITDA Margin (2) 2016 EBITDA reflect impairment from GSP investment.
FINANCIAL RESULTS 2Q 2020 EBITDA REVENUES EBITDA Margin (US$ MM) (%) (US$ MM) 272 -1 -0.5% 153 48 31.6% 9 2 26.8% 385 44 11.5% 17
FINANCIAL STRUCTURE DEBT (US$ thousands) 2016 2017 2018 2019 2Q2020 Working Capital + Leasing 382,677 328,079 118,808 99,143 98,628 Project Finance 336,389 337,763 416,063 361,902 338,399 Financing associated to GSP 277,415 146,988 98,368 - - CS Peru Infrastructure Holdings - - - 34,023 28,164 Total financial debt 996,481 812,830 633,239 495,068 465,191 CHUBB Debt 52,500 15,640 - - - Leasings (IFRS 16) - - - 24,183 20,599 Total 1,048,981 828,470 633,239 519,251 485,790 Debt by Currency – 2Q2020 Debt by Business Area – 2Q2020 Holding Chilean peso Engineering & Norvial dividend 9% 3% Construction monetization 13% 9% US Dollars 28% Real Estate 7% Soles Infraestructure 69% 62% 18
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