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

Good afternoon, everyone, and thank you for joining us in the 2025 first half results call of ACS Group. This is Javier Crespo, Head of Investor Relations. As usual, the call will be led by our CEO, Juan Santamaria, who is joined here by our Corporate General Manager, Ángel García Tozano, our CFO, Emilio Grande, and the rest of the management team. After the presentation, we will hold the usual Q&A session and look forward to hearing your questions. Juan, the floor is yours. Thank you, Javier.

Good afternoon, all, and thank you for being with us today. The group has performed strongly in the first half of the year with solid growth in sales, backlog, and net profit, backed by a strong cash flow generation. Moreover, we're making solid progress in executing our strategy, increasingly leveraging our global footprint and engineering expertise to drive sustainable growth. We're actively capturing high-potential equity investment opportunities across both traditional and next-generation markets, consistently creating long-term value for all our stakeholders. Let me give you another view of a few key highlights for the period. Ordinary net profit of €392 million shows an increase of 17% or 19.4% effects adjusted On a reported basis, net profits stood at 450 million. Sales and EBITDA were up by 28.6% and 23.9% respectively, driven by robust momentum across segments. Operating margins evolved positively across the board. Net operating cash flow, adjusted for factoring variations, reached 1.8 billion euros in the last 12 months. €265 million year-on-year and represents a CAGR of 45.8% for the past four years. As a result of this strong cash flow generation, the Group's net debt position as of the end of June was €2.2 billion. This is after allocating €1.1 billion to strategic investments and shareholder remuneration in the first half. These strategic investments included €436 million acquisition of Dornan, and 476 million in net equity investments and other M&A, mostly including the investment of 315 million in data center projects. Meanwhile, shareholder remuneration amounted to 148 million. New orders during the first half reached 31.7 billion euros, up 18.1% if it's adjusted, translating into a healthy book-to-bill ratio of 1.2 times. The order backlog grew by 12% if I suggested, reaching 89.3 billion euros, equivalent to approximately two years of work, supported by sustained demand in data centers, by pharma, and defense. Looking ahead, we remain highly confident in the group's outlook and reiterate our ordinary net profit growth target of up to 17% for 2045, underpinning by strong fundamentals. Let's take a closer look at the group's consolidated performance for the period. Sales rose by 28.6%, reaching 24.1 billion euros, driven by the exceptional performance of Turner, which achieved 34.1% organic growth, 36.7% effects adjusted, and particularly driven by digital infrastructure in biopharma projects. This momentum was further supported by the integration of Dornan, in the full consolidation of this since Q2 2024. EBITDA increased by 23.9% to 1.4 billion euros with margin expansion across all segments stable on an overall basis due to businesses mixed effects. Profit before tax amounted to 708 million euros at 25.4% and was particularly fueled by Turner's outperformance and the solid contribution We deliver strong net profit growth of 17% year-on-year on a comparable basis to 392 million euros, in line with the top end of our full-year guidance for EMPATH growth. Turning now to the ordinary net profit split, I would like to underline the following. Turner delivered an outstanding performance, with its contribution rating 64% to 227 million euros. driven by strong growth in high-tech markets and biopharmacology. CIMIC delivered 101 million euros supported by strong growth in data centers and impacted by FX effects. Engineering and construction shows a very strong result, growing at 21.4% year-on-year, reflecting a higher contribution of flat-iron drogados and solid results in co-active Europe. Infrastructure had a resilient operational performance in the period, despite non-operational impacts and avertives and ramp-up effects at the readings. During the period, the group implemented efficiency measures that involved €16 million in restructuring costs aimed at streamlining operations and unlocking synergies that will enhance performance in the coming years. Slide five highlights the group's strong and consistent cash flow generation. Last 12 months, net operating cash flow after adjusting for factor variations amounted to 1.8 billion euros, up 265 million and supported by the strong momentum of Turner. Over the past four years, last 12 months net operating operational cash flow refactoring has grown consistently at a CAGR of 45.8% driven by EBITDA growth, sustained cash conversion and extra diversification into cash generative businesses. On a half year basis, cash flow reflects the typical first quarter seasonality. The group's cash generation remains solid and we anticipate a seasonal rebound as usual along the second half of the year driven by strong operational performance. Our net debt position as of June 2025 stood at 2.2 billion showing an increase of approximately 600 million since June 2024. This variation is primarily the result of extra capital allocation initiatives and foreign exchange effects, and benefits from the group's strong net operating cash flow, slightly impacted by the lower use of factories. The current position reflects the following key uses of capital in the last 12 months. 1.2 billion euros in net equity investments and M&A, including the acquisition of Dorna, an additional stake in Coctif, and targeted investments primarily in data centers. 652 million in shareholder remuneration, 317 million related to FX movements and other effects. Our disciplined approach to capital deployment supports our long-term growth strategy while maintaining solid financial position. Moving on to slide 7, our order backlog stands at 89.3 billion euros as of June 25, representing a year-on-year increase of around 12% if it's adjusted. This growth was underpinned by a very strong order intake of 31.7 billion euros, up 15.3% or 18.1% if it's adjusted, resulting in a healthy first half book-to-bill ratio of 1.2 times. This very positive performance reflects the group's continued success in securing high-quality projects across everyday growth markets, particularly in data centers, defense, and biopharma. Notably, digital infrastructure now accounts for 14% of our total backlog, driven by the exceptional momentum in data centers, which have grown at a CAGR of 98% over the past two years. We're also seeing a strong traction in Germany, where our positioning allows us to benefit from the country's increased focus on infrastructure investments. New awards in Germany grew by approximately 40% year-on-year in the first half, reinforcing our ability to capture opportunities in this key market. In the following slide, we can see a selection of recent awards. Some key projects to highlight would be in digital and advanced technology, as you know, We will be building a large data center for MetaLuciana as part of the largest campus to date from the company that will have a total value of $10 billion. We also will be building a high-density liquid cooling-ready data center in Malaysia. And very recently, we announced that we will lead the construction of a state-of-the-art data center in Pennsylvania for CoreWeave. The artificial intelligence hyperscaler as part of a $6 billion investment to support cutting-edge AI workloads. In the energy sector, we have been appointed for a Darwin LNG life extension ensuring continued gas processing and marine loading service in Northern Territory Australia. In Germany, we secure the planning contract for four advanced onshore convert stations, part of a high-voltage line that will carry wind power from the north to the Rio region. In Bio-Pharma Health and Social Infrastructure, we were awarded the new Dunedin Hospital in New Zealand, our largest hospital project to date. We also won two major building contracts in Germany, a research center for the University of Duisburg-Essen, and the conversion of a historic boiler house in Krefeld into a modern event venue. And as recent as today, we announced that Turner Joint Venture has been awarded a $700 million modernization project for Memphis International Airport. In transport infrastructure and sustainable mobility, we were awarded the Long Bridge North Rail Project in Washington, D.C. In Germany, we secured two major rail infrastructure contracts, one for refurbishing the 42-kilometer double track section for Deutsche Bahn, and are for building the second main line of Munich's S-Bahn network, connecting Osbandhof and Marienhof stations. In critical metals and natural resources, Setschmann is leading the design and construction of the Queensland Resources Common User Facility in Downsville, a government-backed initiative to accelerate vanadium and other critical minerals processing. We also received the award of a five-year extension at the Karla-Winda gold mine in Western Australia. In defense, in addition to the large Royal Harbour Dry Dock Replacement project in Hawaii we're working on, it is worth mentioning that we're leading the States to upgrade of maintenance, logistics, and airfield infrastructure at the RAAF-based downfield in Queensland, Australia. Let us now have a look at the performance-based segments. On slide 10, we begin with Dorna, which is delivering exceptional results, consolidating its leadership in its strategic sectors. Sales grew by 41.2%, reaching 12.2 billion euros, driven primarily by strong organic growth in digital infrastructure and biofarm projects. The solid performance was further supported by the contribution from Dorna, performing even better than anticipated. Profit before tax amounted to 392 million euros, representing an outstanding increase of almost 60%. This was accompanied by continued margin expansion of 36 basis points to 3.2%, reflecting Turner's successful strategy focus on advanced technology projects. Net operating cash flow increased in close to 400 million euros. Net cash as of June 2025 was 2.7 billion, up almost 300 million euros even after the acquisition of Turner. Turner's commercial strength is demonstrated by its new orders of 16 billion euros in the first half of the year, an increase of 22.7% year-on-year, or 25.1% if it's adjusted, driving order backlog to 33.1 billion euros. Moving on to operations in the Asia-Pacific region, we turn to CIMIC. Sales raised their strong growth in strategic areas such as advanced technology, healthcare, and defense, and were 26.3% higher, supported by the full consolidation of this with a stable underlying performance overall. EBITDA margins remained stable, underpinned by strong contributions from high-tech jobs across both UGL and Light and Asia. Ordinary profit before tax increased by 20.3% year-on-year to €232 million after adjusting the first half of 2024 for the one of non-cash gain net of provisions. On a comparable basis, adjusting for this consolidation, ordinary PVT grew by 4%. Achievable net profit grew by 7.2% effects adjusted year on year. Comparable net operating cash flow before factoring remains stable. While the reported figure was impacted by the global consolidation of this and lower factoring levels. Our order backlog was solid, reaching 23.2 billion euros, up 5% if it's adjusted, driven by solid growth across all segments, particularly in data centers in defense. Turning now to engineering and construction segment on slide 12, we can see solid growth with consolidated sales increasing 11.5% year-on-year to over 5.2 billion euros. driven by strong performance in North America and robust contributions from both Dragados and Hochtief Engineering and Construction. EBITDA margin increased by 53 basis points to 5.7%, supported by a significant contribution from Flatiron Dragados. Ordinary Profit Before Tax grew significantly by 45.6% to 136 million euros, supported by a positive financial performance. Net operating cash flow level was impacted by the lower use of factoring and a high comparison base due to strong collections recorded in the first half of 2024. The engineering construction backlog rose 8.2% effects adjusted to 30 billion euros, reflecting a strong order intake of 7.9 billion euros, with notable momentum in sustainable mobility and transportation infrastructure. Importantly, our book-to-bill ratio remains strong at about 1.2 times. Looking forward, the algorithm remains very positive, and it would highlight that we are particularly well positioned to benefit from the infrastructure investment plan in Germany. Continuing now with the infrastructure segment, on slide 13, Abertis has had a strong operating performance. The contribution to NPAT was impacted by the changes in the tax regulation of concessions in France and FX movements. Apertis distributed a dividend of approximately 600 million euros in the Q2 2025. It even, meanwhile, increased its sales by 26.9%, thanks to the additional contribution of the A13 and a general positive performance across operating entities. On the next slide, we'll take a more detailed look at the Apertis numbers. Traffic has grown at 2.6%, supported by strong performance of heavy vehicle traffic. We saw strong results, particularly in Spain, France, Brazil, and Chile. On a like-for-like basis, the company delivers strong revenues and EBITDA growth at 6%, underpinned by the geographical diversification of the portfolio and inflation-linked tariffs. Regarding Abertis's portfolio development, as you know, Abertis acquired a 51.2% stake in the A63 toll road in France, which is now fully consolidated since 1st of June. with full impact in balance sheet, but one month in P&L. In Chile, the Santiago de los Vilos concession has begun its operational management and full consolidation from the 1st of April, further strengthening our presence in Latin America. Avertis has improved its liquidity and financial strength with our net debt set at 23.4 billion euros, an ample group liquidity of 6.9 billion euros. On the slide 15, we saw the breakdown of key figures by country for advertises profile. To conclude our review of the first half results, let me highlight the key achievements of the group. We have delivered a strong operational performance with sales reaching 24.1 billion euros up 28.6% year-on-year and ordinary net profit of 392 million up 17% or 19.4% as suggested. aligned with the upper end of our guidance. Our cash generation remains robust, with last 12 months net trading cash flow adjusting for factoring variations was 1.8 billion euros, growing at a giga 45.8% over the past four years. Our order backlog stands at 89.3 billion euros, up circa 12% if it's adjusted, supported by 31.7 billion in new orders. Looking ahead, we remain focused on our strategic growth markets and disciplined capital allocation. We see significant greenfield investment opportunities, particularly in advanced technology infrastructure and managed lanes, and continue to pursue bold on acquisitions to strengthen our engineering capabilities. Through avertives, we're also advancing brownfield investments in core infrastructure assets. Our strategy is to build a diversified business model and a global footprint. which enable us to respond effectively to evolving market dynamics. We saw its fundamentals, strong momentum across key markets, and a clear focus on long-term value creation, where we're positioned to navigate the current macroeconomic environment and continue delivering sustainable growth and attractive shareholder returns. Thank you once again for joining us today. I now look forward to your questions.

Ladies and gentlemen, the Q&A session starts now. If you wish to ask a question, please press star 5 on your telephone keypad. Thank you. The first question comes from Luis Prieto from Kepler-Chevreux. Please go ahead with your question.