New Gerald Desmond Bridge in Long Beach, California FY16 FINANCIAL RESULTS 16 March 2017
Financial Update Massimo Ferrari General Manager Finance & Corporate Group CFO 2 FY16 presentation
Consistent delivery story overtime 2014 2015 2016 Guidance Actual Guidance Actual Guidance Actual +11% +12% > € 6.1B € 6.125M REVENUES +10% >15% € 4.2B € 4.7B EBITDA margin >10% 10.4% ~ 10.5% 10.3% >9% 9.2% EBIT margin >5% 6.2% ~5.5% 5.8% In line In line Book to bill Book to bill € 5.9B € 5.4B Construction Orders with 2013 with 2014 >1.1x 1.2x cash In line (400) / (500) € (89)M € (27)M € (351)M Net Financial Position € M * neutral with 2014 Targets achieved for the 3 rd year in a row It is reminded that 2014 and 2015 data are represented as reported and not restated to reflect acquisitions made by the group 3 FY16 presentation
New orders: € 7.3 billion Consolidation Value GEOGRAPHICAL & SECTOR BREAKDOWN ( € mln) Project Country Koysha Ethiopia 2,483 Australia 11% Rogun HPP-Lot 2 Tajikistan 1,747 Africa Perth rail line Australia 790 Americas 34% South Al Mutlaa City Development Kuwait 467 23% Florianopolis Brazil 99 CSC various contracts Switzerland 82 Subtotal Salini Impregilo 5,668 Europe Purple Line USA 609 Middle 1% East 6% Lane P&P USA 518 Asia Mid South GAH USA 114 25% Charleston Port accesds USA 96 Other minor projects USA 237 Subtotal Lane 1,574 P&P Other 7% 9% Fisia&Alkatas Turkey 85 Roads & Highways Total Salini Impregilo Group 7,327 7% HPP 58% Book-to-bill at 1.2x; 2016 target of 1.1x book to bill exceeded Rails & Undergrounds 19% 4 FY16 presentation
Backlog evolution CONSTRUCTION BACKLOG INCREASE € /BN DECEMBER 2016 CONSTRUCTION BACKLOG: € 29.4 BN 39 LatAm Other HPP 10% 15% Africa 24% 24% 29.4 28.1 Roads & Italy Highways 29% 15% Middle East 13% 2019 Asia & 2015 2016 North Europe Rails & Australia target America 5% 11% Undergrounds 8% 46% Large and well diversified backlog provides visibility on future results 5 FY16 presentation
FY16 Group financial highlights MANAGEMENT VIEW € million 2016 2015 change Revenue 6,125 6,051 1.2% Ebitda 561 512 9.5% Ebitda margin 9.2% 8.5% Ebit 300 281 6.6% Ebit margin 4.9% 4.6% Minorities [ € /m] 2016 Financial Expenses (87) (104) Line 3 Riyadh (Saudi Arabia) 9 -16.6% Lane 11 Holdings (15) 0 Al bayt e Red Line (Qatar) 10 other minors 10 EBT 198 178 11.4% Total 40 Taxation (78) (94) tax rate 39.4% 52.6% Result from continuing 120 84 42.6% operations Discontinued operations [ € /m] 2016 Discontinued operations (21) (12) Todini (transaction reserve release) 13 Minorities (40) (28) III (Tax settlement) 7 Group Net Results 60 44 35.2% Fibe 1 Total 21 6 FY16 presentation
Financial expenses FINANCIAL EXPENSES [ € /MLN] Financial charges, which in FY16 included 1 € 25 million of amortized costs, increased 2015 2016 mainly due financing for Lane’s acquisition. Restated Restated Management Management €/m Profit & Loss on exchange rates reflects view view positive impact of euro appreciation against Financial Gains 35 45 2 foreign currencies. Net Financial charges (104) (121) Refinancing amortized cost (11) (22) Bond amortized cost (7) (4) Amortized costs (18) (25) Financial charges (122) (147) 1 Profit (loss) on exchange rates (17) 16 2 Net financial expenses (104) (87) Net of increase due to lane acquisition, financial expenses remained stable 7 FY16 presentation
Reducing gross debt and extending debt maturity DEBT MATURITY PROFILE NET FINANCIAL POSITION Dec-15 Bank debt bond Unaudited € million Dec-16 Jun-16 Proforma 600 Cash & Cash Equivalents 1,603 1,177 1,459 Other Financial Assets 386 433 380 283 Total Cash & Other Financial Assets 1,989 1,610 1,839 Bank Loan (1,265) (1,577) (1,676) Bond (887) (708) (406) Leasing (175) (156) (129) 346 SPV Net debt (5) 4 18 206 175 Total Gross Debt (2,332) (2,437) (2,194) 43 41 Net Derivatives (7) (8) (15) 2017 2018 2019 2020 2021 Net Financial Position (351) (836) (370) SIGNIFICANTLY REDUCED AVERAGE CORPORATE DEBT COST M/LT CORPORATE DEBT BREAKDOWN Duration 2.95 yrs 3.18 yrs 5.3% 3.8% 3.5% 53% 70% Fixed Dec 2014 Dec 2015 Dec 2016 Variable 47% 30% 2015 2016 8 FY16 presentation
Cash flow generation Free Cash Flow before dividends [ € /mln] 561 (136) (200) (76,0) (61,0) 88,0 EBITDA Change in NWC CAPEX (net of disposal) Current taxes paid Net financial expenses (not Free cash flow before including ammortized fees) dividends € 88 million of Free Cash Flow before dividends generated in 2016 9 FY16 presentation
Infrastructure market trends Pietro Salini Chief Executive Officer 10 FY16 presentation
Global construction market trends MACROECONOMICS TRENDS Construction investment growth is strongly correlated with GDP evolution in all analysed markets Strong development of mega cities and increased urbanization especially in Emerging. Countries would foster request for infrastructure Emerging markets will account for ~ 60% of construction volume in 2025 CONSTRUCTION SPECIFIC TRENDS Big wave of infrastructure renovation is forecast for the coming years, especially in USA but also in Europe U, S. President Trump announced an ambitious investment plan that would serve well the country’s infrastructure , which is in need of $3.6 trillion by 2020, according to the ASCE New potential business sector adjacent to our are core competences (partnership with large insurance companies for maintenance of large infrastructures) 11 FY16 presentation
US infrastructure renovation trends Average age of 84,000 dams in USA is 52 years: nearly 14,000 high- hazard dam in 2012 Dams Association of State Dam Safety estimates a 21 B$ investments to repair hazardous dam Average age of 607,380 bridges in USA is 42 years Federal Highway Administration estimates nearly 76 B$ to renovate Bridges deficient bridges across USA Local investments to upgrade roads currently amount to 91 B$ annually Road Federal Highway Administration estimates that the investment needed annually to improve conditions would be 170 B$ 12 FY16 presentation
Lane current US pipeline Significant upcoming opportunities for Lane WA ME MT ND MN OR ID WI MI SD NY WY Active Pursuit PA IA NV NE OH $3.7 billion IN CA IL UT CO WV KS VA MO KY NC TN OK Development NM AZ AR SC GA AL MS $6.3 billion TX LA FL AL 0 – 400 $bn Project size (Group share) € 850 mln new orders acquired by Lane already in 2017 >600 $bn representing 26% of its 2017 budget 13 FY16 presentation
Global construction market 2017-2019 GLOBAL CONSTRUCTION MARKET 2017-2019: € 21.4 TRILLION GEOGRAPHICAL AREA LatAm, Africa, 6% 1 9% Middle East, 13% North Total market built 2 America, Asia & bottom-up with all 23% Australia, projects explicitly Group’s core 9% identified construction 3 market - excluded 21,435 project in oil&gas, Europe, residential, power Countries Italy, 18% 22% 4 infrastructures analysis & and other Selection - SECTORS segments where excluded project The prioritization Group is not in countries not approach is Hydro, Other, 7% involved interesting to based on a Go 13% Management and (risk/return projects prospective) and 13% Rail, 46% < € 100mln 46% Get (Group’s # 614 Capability) Projects 5,803 specifically identified 34% Road, 1,914 34% 478 COUNTRY RISK Group’s Core Global Construction Long list Target List High, 14% Market Market 2017-2019 Infrastructure market represents an excellent source of Medium, 25% Low Risk, opportunity to support our ambitious BP targets 62% 14 FY16 presentation
2017 Orders intake As at today acquired more than € 1.7bn - approximately 17% of 2017 target of which more than 46% in USA FY2017 EXPECTED ACQUISITIONS • UAE - Al Makthoum Airport € 70mln breakdown by sector • USA - I70 Reconstruction € 110mln HEP 11% • USA - Turnpike widening Osceola € 167mln Rails 30% Roads • USA - I395 Express Lane € 373mln Other 31% Lane • USA - other minor € 90mln 7% 22% • ITA - TAV Napoli Bari € 240mln • Dubai - Meydan mall 400mln FY2017 EXPECTED ACQUISITIONS breakdown by geography • Middle East - € 275mln 3% Groups best offers amount approximate to € 0.3bn Italy 13% 2% Europe 31% Tenders submitted yet to be awarded approximate to € 8bn 12% Northam Latam Tenders in preparation approximate to € 10bn 9% Middle East Asia & Australia 29% Africa 15 FY16 presentation
2017 Backlog evolution TOTAL BACKLOG EVOLUTION BREAKDOWN BY SECTOR Dec 2016 Dec 2017 9% 11% 20% 23% 14% 13% HEP Rails 14% Roads 18% Other 39% 41% Lane TOTAL BACKLOG EVOLUTION BREAKDOWN BY GEOGRAPHY Dec 2016 Dec 2017 Italy 16% 19% Europe 29% 34% Northam 10% 8% Latam 8% Middle East 10% 14% Asia & Australia 9% 12% 11% 9% 11% Africa 16 FY16 presentation
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