ACS, Actividades de Construcción y Servicios, S.A.

Buenos dias a todos.

Good morning to everyone and thank you very much for joining us today and attending our 2024 financial results presentation for the ACS group. I'm here with Angel García de Lozano, who's our corporate general manager, and Mr. Emilio Grande, who's the CFO for the group. And as usual, following the presentation, there'll be time for a Q&A session so that we can clarify any points you'd like to raise. And if you're following us through streaming on the website, you can also send in your questions. through the usual channel. Let me start off with the first slide on the screen this morning. ACS had what we think was an excellent year 2024 with regard to the operational evolution of our businesses and cash generation. It was very satisfactory with regard to the relevant corporate transactions for the group's strategy. Ordinary net profit totalled 684 million euros. That's up 14%. comfortably outstripping the target, which was envisaged at between 8% and 12%. Now, these are the ordinary figures. They do not include non-recurring items, which are essentially the capital gain for the sale of 57% of the SH-288 in 2023 and the impact of the book capital gain in CIMIC and the termination of the SH-288. These are both net of provisions and non-recurring results in 2024. Net profit totalled €828 million and earnings per share was €3.23 per share. That's equivalent to an increase of 7.8%. In like-for-like terms, the before-tax profit increased by 23.6%. That was driven by Turner's growth because Turner saw growth in top profit by 37%. So this year we have recorded exceptional net operating cash flow generation. That was 2.1 billion euros. That's 1.1 billion more than in 2023 thanks to the excellent operations and strong growth in our BIT as well as solid cash conversion. But consequently, our net debt position at close of the financial year 2024 was just over 700 million euros. Even after the accounting impact of the consolidation of thesis, 1 billion euro debt, and after remunerating our shareholders with a payout of 862 million euros, we've also made strategic investment and net investment for a total of 1.15 billion euros. Our order backlog has reached a record figure, 888.2 billion euros, so that's an increase of 14.7 billion, or 20%. That's equivalent to almost 25 months of sales, thanks to the projects awarded to us for a value of 51.5 billion euros in the financial year. So today, our leadership in high-growth markets is is reflected more and more in a Nordabak blog that is focused on those sectors. 50% of the awards come from those sectors. This presence, this footprint, and our know-how in the sector of engineering is giving us these major opportunities for capital investment. Because of all those reasons, we're optimistic about the future of the group, and we're going to increase our ordinary net profit growth target for 2025 to a range of between 8% and 15%. So let's take a look at the group's consolidated results. Sales grew strongly. by 16.5% to a total of €41.6 billion, driven by strong production in strategic markets, particularly digital infrastructure, biopharma and health, which were up 21% in year-on-year terms. EBITDA totalling €2.45 billion, was up 28.7%, impacted by the full consolidation of these since the second quarter of the year and the termination of the SH-288. Ordinary EBITDA, like for like terms, totalled €2.64 billion. The ordinary comparable profit before tax adjusted because of non-recurring EBITDA impacts also showed solid growth, 23.6%. to above €1.2 billion, and 31 basis points, an improvement in the margin to 2.9%. Net attribute profit, €828 million, thanks to the solid operation performance and earning per share for the period, €3.23, up to 7.8%. So adjusting the figures for the extraordinary impacts in both periods, our ordinary net profit figure grew by 14%, higher than that target range for growth of 8% to 12%. Our sales for a value of more than 41.6 billion euros are concentrated in North America, which accounted for 61% of those sales, followed by Asia-Pacific with 24% and Europe with 14%. The next slide shows our ordinary net profit. That's attributable profit by segments. All of the figures show positive evolution. Turner, €327 million, and a year-on-year growth figure of 45.8%. Now, that is a segment that has recorded the highest growth in the group. Today, Turner is contributing 48% of the group's results. Engineering Construction earned €156 million. That's up 6.6%. Abertus, had an excellent operational performance last year, with higher revenue at 9.8% and higher BIT at 10.3%. Its contribution to the attributable net profit figure grew by 3.6%, even with the impact of the fiscal regulation for concessions in France. Cash generation was excellent in 2024, Net operating cash flow totaled 2.1 billion euros. That is 1.1 billion more almost than in 2023. So with that result, we have more than comfortably exceeded that annual average. average range which was the target that we communicated to you during the capital markets day in April 2024 for the years 2024 to 2026. That figure was approximately 1.2 billion. So this figure is due to our robust operational performance and cash conversion in all of our businesses. This is slide six and you can see our financial position in the group at the close of financial year 2024 with the barely €700 million in net debt. We've improved the figure from September by approximately €1.7 billion. Compared to the figure at the close of 2023, we can see an increase in net debt of €1.1 billion, even after incorporating the book effect of the consolidation of the net debt in Thies and remunerating our shareholders, €862 million was the figure. Net strategic investment, a total of €1.14 billion, included the capital contribution in Abertus, the acquisition of 10% of these, and the acquisition of the additional stake in Hochtief, and other complementary strategic acquisitions and capital investment in conclusion. This is a solid financial position to be able to address the investment opportunities that may come up for the group. Slide 7 now. Our order backlog totaled 8.2 billion euros, that's up 19.9% strategic expansion in new generation infrastructure is still a key component of our growth strategy. And in 2024, represented approximately 50% of all our new contract awards. The book to bill ratio, which is an advanced indicator of that growth, stands at 1.2 times. while the visibility of our backlog is still more than two years. In this next slide, you can see a selection of significant contracts awarded to us recently. I would highlight to you the energy sector, where we have been chosen to design and build the second phaser, of the 270-megawatt battery storage system Western Downs project in Queensland, Forneum, which is one of the top world producers of solar renewable energies data centres now. Turner has been selected as the key contractor for META's Data Center Campus in Louisiana, which will be the biggest one the company has to date. Now, this project includes several data center buildings that are optimized for artificial intelligence with a total capacity of more than two gigawatts. It's important to highlight to you that this project is still not included in the figures for our backlog or in the figures for the contract awards for the period. Turning to the semiconductor sector, we have been awarded a number of contracts, including the expansion of assembly and testing facility for chip lithography machines in the United States and the installation of a construction which is for semiconductors in Germany using clean technology. I can't give you more details at the moment because it's still confidential in biopharma and health. and social infrastructure. We've been selected for the expansion of the North District Hospital in Hong Kong and also for the modernization expansion of the West Term 3 in the San Francisco Airport. Thank you. Turning to sustainable mobility and climate resilient infrastructure, we have been awarded part of the water canal project in the Hoboken Terminal, New Jersey. In traditional infrastructure, although this project isn't included in those backlog figures either, I still think it's worth mentioning the project. It's the SR400 Express Lane in Atlanta, Georgia, with a construction value of more than $4.6 billion. Lastly, let me... Underscore another project, too, the Stobie Mine in Canada, which is for critical minerals such as nickel and copper, in response to the world demand growing for these essential resources. Turn to the next slide. This is the pollution by segments. Turner, first of all. Turner has recorded very strong growth in before-tax profit, 37% up to €570 million, thanks to annual growth of 19%, which has also accelerated in the fourth quarter, and continued significant margin expansion. So before-tax profit, margin was 3%, in line with the target that was communicated last year during our Capital Markets Day. Net operating cash flow also has grown significantly, totalling £712 million, £254 million more than in 2003, with the net cash figure at the end of the year standing at £3.1 billion. Last month, we completed the acquisition of Dornan, which will strengthen our expansion strategy there in turn in the European advanced technology market. Lastly, strong growth in contract awards, up 31%, driven by 6.2 billion in digital infrastructure awards, has given us a new record figure for the backlog, 31.9 billion euros. Simic? incorporating the consolidation fees since the second quarter of the year after acquiring a 10% which is additional of the 10% additional stake in the shareholding ordinary net profit up 7.2% adjusted because of the non-recurring contribution of NT in 2023 during the year. We have also made a number of strategic investments in order to incorporate technical capabilities that will be giving us access to new opportunities in energy, critical metals and digital infrastructure. Net debt, 1.7 billion euros, reflects the strategic investments and also the consolidation of thesis net debt around 1 billion euros. The The order backlog totaled 24 billion euros, up 2.8%, adjusted because of exchange rates. The awards, which were slightly lower in building, were more than offset by more contracts awarded in data centres and health. Let me move on to the next slide, engineering and construction. This is the slide. Consolidated sales in the engineering and construction segment totaled €9.5 billion, up 6.8% thanks to the good evolution of our production in data centres and high-speed transport. The EBITDA margin improved by 5.4%, while before-tax profit increased by 17.4% to €192 million, That was underpinned by less amortization and better financial efficiencies. Sound cash generation allowed us to close the year 2024 with almost 1.8 billion euros in net cash. The backlog increased by 10.2% thanks to the 29.3 billion euros, thanks to the high level of awards in Dragados, particularly in sustainable mobility and transport. The integration of Flatiron and Dragados North America was completed last month, and we're moving towards implementation of synergies, which we can tell you will, as we announced, be around 30 to 40 million annual awards. This is dollars annual figures. The next slide showing the evolution of Dragados. This is the engineering and construction sector. Sales grew by 4.9% to 5.9 billion euros, driven by an uptick in defence project production. EBITDA totaled 332 million. That was a significant improvement in our margin, up to 5.6%, thanks to the good performance business performance in North America. Before tax, the profit increased by 21.4% thanks to the improved financial efficiency and lower amortizations. Net operating cash flow grew by 387 million euros in the year with excellent cash conversion. The backlog grew by 15.1% as a result of a high level of contract awards, especially in Canada, which grew by 110% compared to the year before.

On slide 14, we can see how Hochtief engineering and construction increased its stake up to 10%, up to 3.6 billion. Sustainable mobility continues to be a key engine for growth in Vladivostok with several important projects. And whilst the growth of Hochtief Europe is significant, thanks to infrastructure, digital and energy projects, the pre-tax profit increased by the same proportion to sales, maintaining stable margins. The net cash flow position is at €1.175 billion by the end of the year. The portfolio of almost €11.6 billion grew by 3.9%, adjusted by the exchange rate, thanks to awards for €4.4 billion. Now, if we continue with the infrastructure segment on slide 15, we can point out that Abertis has had a very good operating performance with a growth in revenues and EBITDA of 9.8% and 10.3% respectively. The contribution of Abertis to the net attributable ordinary profit grew by 3.6%, including with the impact of the fiscal regulation and concessions in France. Iridium increased its sales by 77.5% thanks to the additional contribution of the A13 and Skyports. The contribution of Iridium to net profits is consistent with the stake of 44% in SH288 up to October 2024. And it's worth mentioning the award to Iridium this year of the project SR400 Express Lanes in Atlanta, Georgia. Through Iridium, Hochtief, PPP Solutions and Pacific Partnerships, we are an investment and development of greenfield assets platform with a sound international presence, which is diversified. And we have presence in the USA, thanks to Iridium, Europe, with Iridium and Hochtief PPP Solutions. and a leading position in Australia thanks to Pacific Partnerships. We are diversified in our backlog, mainly thanks to a reasonable value of €1.2 billion in motorways, trains, and social infrastructure. We're investing in digital infrastructure and data centers of a large scale, in edge data centers that are sustainable through OTIF, and through Hochtief, where we are contributing capital of 28 million. Later on, I'll refer again to our strategy for investments in data centres. And finally, we should underline our presence in sustainable mobility through our investments in skyports and glideways for a total of 149 million euros. Now continuing with slide 17 with the performance of Abertis. Abertis has shown a sound performance with a growth in revenues of 9.8% and EBITDA of 10.3%. Traffic has grown with the support of heavy vehicles and a good performance in Spain, Mexico and Brazil, the traffic of which has grown way over 3.5%. Throughout the year, there have been acquisitions such as the Autovía del Camino and 50% of Trados 45 in Spain, the extension to 12 years of Intervias in Brazil or the acquisition of Santiago Los Vilos in Chile. With these transactions, the Average life cycle of those concessions has grown, allowing for the replacement of cash flow. Again, the strategic section of the presentation will allow me to talk about the current situation of Abertis again within the context of its perpetual growth model. Abertis has improved its liquidity and financial soundness, reducing its net debt by 3.3 billion and issuing 1.8 billion in bonds since January 2024, including the emission of a hybrid bond for 750 million over 5.25 years. In slide 18, we show the breakdown of the key figures by country for the backlog of Abertis, where we can see significant growth in traffic in significant markets such as Spain, Brazil, Mexico, and Puerto Rico. Next, as happens every year, we dedicate a brief section to going over our strategic lines of business. Firstly, we've capitalized our leadership position globally in high growth segments with attractive margins such as digital infrastructure, energy, defense, mobility. the biopharma sector and health and critical metals at the same time as we're maintaining our position in the more traditional business line. Secondly, we are including capabilities that are specialised in engineering and systems, both organically and inorganically, to carry out complementary activities in the value chain. Thirdly, we are investing capital in traditional infrastructure projects and state-of-the-art infrastructure with digitalization and responding to the demand for energy and demographic changes, and at the same time generating value for our shareholders in the short and long term. There are great opportunities ahead of us thanks to our capability in engineering, our global presence and our access to our customers. And fourthly, we continue to promote operating efficiency through strategic integration, streamlining of resources and simplification. And finally, we continue to reduce the risk profile of our portfolio, increasing the weighting of our collaborative contractual frameworks. And on a financial level, our target continues to be to continue having a financial soundness in the group and generating value for our shareholders, both in the short, medium and long term. We can see on the next slide that our strategy to include specialized capabilities for engineering and systems in an organic and inorganic fashion is as follows. We have four fundamental pillars for this. On the one hand, technological innovation and the integration of systems and platforms in the group. Secondly, know-how and a key competitive edge. And the application of our know-how in global logistics to transform traditional processes is And finally, financial experience and experience in managing large scale projects. We have carried out several complementary acquisitions in key sectors. Turner has acquired the Irish engineering company Dorna, which is the third biggest electromechanical company in Europe. And it will strengthen our strategy for expansion in the European market with a pipeline of more than 20 billion million in identified opportunities. SEGMAN has also strengthened its position as a global service provider in mining and refining of essential minerals for the energy transition and with the incorporation of prudential engineering and mincel engineering. And TS has increased its capacity global portfolio for mining in complementary acquisitions in the sector of critical metals with Pybar and Mintrex. And later on, Asia has acquired Maverick, an engineering consultancy company for digital infrastructures, advanced technologies, and high-rise buildings. Next, in slide 22, we can see how we want to channel investments in traditional infrastructures and state-of-the-art infrastructures, taking advantage of our new know-how and engineering capabilities. The ACS Group has achieved a sound position on a global level, focusing on data centres and adopting a comprehensive approach and coordinating between companies. And it has adopted measures in 2024 to execute our investment strategy in countries data centres in the market and this market is growing very fast all over the world thanks to the expansion of cloud Thank you very much. Currently, we have an investment portfolio of 2.1 GW in projects already underway in 2025 in the US, Spain and Australia. In addition, we are evaluating more than 4 GW in our key regions, mainly the USA. And in addition to this, Hochdief is following a complementary strategy for edge data centers, deploying smaller scale facilities in urban areas to reduce latency, particularly in processing AI and cloud services within closed networks. Currently, we are building a sustainable data center jointly close to Essen in Germany to expand to 15 data centers worldwide. on a smaller scale. And as we mentioned beforehand, you will get more details about our strategy and data centers during the investor day that we are planning closer to the end of the year. In the field of managed lanes in the United States, we are opting for a pipeline and different tender concessions. And we have four key elements. The success of the SR project, which strengthens our position as a key player. Flateron Dragados is our preferred contractor in the US market. And our capability to optimize toll solutions and revenues through conceptos técnicos alternativos. And finally, our proven experience in managing key and big projects. infrastructure projects. On the next slide, we can see the strategy of the group in integration strategy and streamlining and simplification to improve our operating efficiency. The group is carrying out projects of different sizes in the world to do with supply chains to optimize synergies, optimize the supply chain, centralize functions to strengthen the climate of exchange of knowledge between companies. And an example of this is Flatiron Dragados, which we completed this strategy in 2025. It's a leading company in engineering and civil construction in the USA, strengthening our position in the sector, and we are already implementing and adopting important synergies. I'd like to mention the perpetual growth model in Abertis, which is mentioned in our strategic framework and capital market days last year. And I'm going to explain what is being achieved. Abertis is basing its strategy on the optimization and extension of the lifecycle of the current portfolio of assets through mutually beneficial partnerships. agreements with the awarding administrations and the inorganic growth is focused on brownfield assets in key countries. In addition, the sound Financial discipline is underlined to achieve an investment grade rating offering attractive returns. On the next slide, 25, we can see the performance of some important metrics as part of our strategy that's being achieved. Since 2018 until 2024, Albertis has managed to increase its EBITDA by approximately 900 billion euros at the same time as it's been able to extend its EBITDA that has expired over these years. And at the same time, the average duration of concessions has increased by two years and there has been a deliverage of 6.6 times up to 5.4 times. Finally, we can see that the relationship between EBITDA backlog and the sum of forecast EBITDA for all these assets at the end of its construction life cycle over the current net debt has been strengthened. And the growth model at the end of 2024 means that we find that the platform has grown and has replaced the EBITDA that had expired and has increased the average lifecycle of concessions and has deleveraged significantly. So... Let's go over these sound operating results, financial results for 2024. We can see we've made great progress in our strategy towards a proposal for growth and profitability for our shareholders. The sales of the group reached 41.6 billion euros, growing by 16.5%. We have had an excellent conversion of cash flow throughout the year, generating net operating cash flow of 2.1 billion, two times the figure of 2023. with a net debt at the end of the year of €700 million. And we have a sound financial position to invest in future growth. Our portfolio has reached the record figure of €88.2 billion. And in addition, we have sound forecasts for future growth, thanks to a global leadership position in strategic finance. sectors for growth. And this gives us access to important greenfield opportunities, such as the managed lanes project or tender process in the US and investment in digital infrastructures in our regions. So we have completed. significant corporate transactions that supports our strategic plans, such as the acquisition of Dorman on behalf of Turner to strengthen our capabilities in Europe, the integration of Flattiver and Dragas in USA, which will generate important synergies, and other strategic opportunities of mergers and acquisitions in the field of natural resources and critical metals. critical metals and the ordinary net profit of 684 million euros has increased by 14 percent exceeding the range it has grown from 8 to 12 so we have met our growth and financial objectives and we are diversifying our portfolio towards high growth segments and high margins and to expand our technical capabilities, invest in traditional infrastructures and look for operating efficiencies. And we trust in our capabilities to be able to continue growing with our proven strategy. And we are in a position to continue growing that net ordinary profit. And thank you very much for all your attendance. And we'll go on now to the Q&A session. Thank you.