Hochtief Ag

Ladies and gentlemen, welcome to the publication Interim Report January to September 2026 Analyst and Investor Conference Call. I'm Sergen, the chorus call operator. I would like to remind you that all participants will be in listen-only mode and the conference being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, Please press down zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Mike Pinkney. Please go ahead.

Thanks, Operator, and good afternoon to everyone, and thank you for joining us for this HawkTeeth 9 Months 2026 Results Call. I'm Mike Pinkney, Head of Capital Market Strategy, and I'm here with our CEO, Juan Santamaria, and our CFO, Christa Andresky, as well as our head of IR, Tobias Loskamp, and other colleagues from the senior management team of HawkTeeth. We're looking forward to taking your questions shortly, but to kick off, our CEO is going to give us an overview of this strong set of HawkTeeth numbers and provide us with a brief update on the strategy. So, Juan, all yours.

Thank you, Mike and Vadim, and welcome to everyone joining us for this results call. Hochtief's strong growth trajectory has continued during the first nine months of 2026 with an acceleration in profits, cash flow, and new orders. This has been accompanied by further significant progress in our strategic positioning and delivery as we harness a global investment super cycle which we firmly believe is still in its early stages. Hochtief sales growth accelerated to 14% year on year, reaching over 32 billion in the period. Supported by further margin expansion, the group's operational net profit rose strongly by 40% to 752 million euros or 42% on an FX adjusted basis. This growth is at the top end of the group's full year 2026 guidance range, which was raised in July to an operational net profit of up to 1.1 billion euros, an increase of approximately 40% year on year. Operating cash flow during the first nine months of 2026 showed a very strong year on year increase of over 620 million euros prefactoring, highlighting an outstanding performance in cash generation. Over the last 12 months, operating cash flow prefactoring stands at 2.7 billion euros, almost 700 million higher. Net debt shows a strong improvement of €960 million year-on-year and is after a third-quarter dividend payment of €497 million and net investments of €540 million. Considering the last 12 months and adjusting for capital allocation, net cash would show a €2 billion year-on-year increase. Near the growth continue to accelerate, increasing by 33% year-on-year, with significant wins across our strategic growth verticals. This lifted our order book to a record high of almost 90 billion euros, up 29% year-on-year, providing a strong and diversified foundation for continued growth. The AI digital intake backlog increased more than 90% year-on-year, and our other strategic growth sectors that include defense, critical minerals, energy, and nuclear collectively grew at 65%. Let's take a brief look at our performance on the segment level. Turner delivered another outstanding performance. The business maintained its high level of sales growth with a 24% effects adjusted increase year-on-year to 22.4 billion euros, driven by data centers, semiconductors, defense, airports, and farmers. Operational PVT rose by an outstanding 47% effects adjusted to 891 million euros with a margin increase of plus 60 basis points to 4%. This is supported by Turner's end-to-end strategy, including supply chain, modularization, and increased self-performed capabilities. Turner's strong new order momentum continued with a striking 39% increase. resulting in a record order backlog of 48.9 billion euros, up 42% year-on-year. This strong increase was driven by several growth verticals, including semiconductors, where the order book more than doubled, data centers, up 84%, airports and commercial, both over 50% higher, and solid growth in defense, 14%, in healthcare, 15%. Next, we have CIMIC, would deliver steady performance with solid margins. Sales of 8.2 billion euros rose 9% with rising contributions from strategic growth markets, particularly data centers, energy, and defense, more than offsetting the winding down of large transport infrastructure projects. Operational PVT of 355 million euros was 12% higher year on year with operational net profit of 193 million euros, up 21% year-on-year, due mainly to this transaction impact. New orders increased 8% to 9.8 billion euros with a book-to-bill ratio of 1.1 times, helping to drive an increase in the euro backlog to 24 billion euros, up 13% year-on-year, adjusted for divestment of the UGL transport stake. Moving on, we see strong growth at our engineering and construction business. Sales are accelerating with 20% third quarter growth driven by a ramp up of larger projects. Engineering and construction is seeing very strong growth in operational PVT, which is up 35% to 83 million euros in line with the full year 2026 guidance and underpinned by rising margin. The outstanding 80% rise in the orders to 7.1 billion euros is driven by large-scale project wins in Europe, including the major Selafi Nuclear Award and rail projects in Sweden and the Czech Republic. The period end order backlog is up 38% to 16.8 billion euros. And turning now to Abertis, revenues and EBITDA were up 4% and 5% respectively. with the Abertis results contribution after PPA amounting to €52 million. The company's cash flow replacement strategy continues to advance. Earlier this year, Abertis acquired the remaining 48.8% it did not already own in the French motorway A63 and also managed to extend its largest concession in Mexico. These transactions further strengthened the business in its key markets and increase its average portfolio duration from 12 to 15 years. Let me briefly update everyone on the group strategy in long-term growth opportunities. We will of course be providing you all with a much more in-depth evaluation at next week's Capital Markets Day. We're strengthening Cocteau's position as an end-to-end infrastructure solutions provider. This is enabling us to deliver high quality growth while building a more resilient business for the long term. In the artificial intelligence, digital, and tech sector, the group continues to expand its presence in the rapidly growing data center market, where searching demand for compute capacity and exponential adoption of agentic AI are expected to underpin multi-year growth. Our ability to grow in this market is supported by an integrated operating model that combines scale, innovation, supply chain, This competitive advantage, together with our focus on talent development, enables us to expand capacity while maintaining execution certainty. Working closely with our clients, predominantly blue-chip hyperscalers, while helping advance increasingly standardized design and delivery models, enhancing our productivity and execution capacity. In the first nine months, we secured approximately 22 billion euros of new data center orders, up over 80% year-on-year. Recent awards include our participation in META's expanded 50 billion US dollars data center investment in Louisiana, a major data center win in Berlin through an integrated team comprising Co-Active Infrastructure and Turner's Donan, and project wins across Asia, including Thailand and India. Our strategy to develop a network of sustainable edge data center in Europe continues with the commercialization of our first facility well underway. The second German facility will be operational shortly with two more under construction. And in the UK, Blackpool Council announced its intention to award Hochtief a highly sustainable six megawatt data center project. Alongside data centers, investment across the broader digital infrastructure ecosystem is also experiencing significant structural growth. In Europe, the group secured new work in a semiconductor manufacturing facility, and in the U.S. we have approximately 1 billion U.S. dollars of semiconductor project wins here to date. Energy, including nuclear, is a key long-term growth market for Hochtief. Investment is rising across power generation, energy security, and the transition to lower We are responding by expanding our specialist engineering and self-performed capabilities across networks, generation, and storage. During the third quarter, the group won a series of major renewable energy and transmission infrastructure contracts in Australia. We also secured a major project for national grid in the UK, and in Germany we have further strengthened our engineering expertise in the sector. In Q4, we completed the acquisition of power transmission specialist Alpantec. which delivers end-to-end services across the overhead transmission line value chain, serving major networks operators. Their transactions strengthen Hochtier's position in Germany's transmission grid market where investment is accelerating to support electrification, renewables, and energy security. Nuclear infrastructure is a crucial long-term energy growth market where we have 70 years of experience and are currently working on several projects. These include a global delivery partner role on the Rolls-Royce SMR program as it scales across the UK, Czech Republic, and Sweden, where it has contracts to build a total of nine facilities. Following on from last year's 15-year award for nuclear and civil works at Sellafield, Hochtief has secured as well an additional major long-term nuclear framework contract worth up to 1.8 billion euros to support the decommissioning process and the UK's largest nuclear site. Furthermore, Hochtief is developing its presence in the European nuclear fusion market, including initial engineering, contracts at two sites in Germany, and its role position to capture significant future opportunities. The group is also capitalizing on the accelerating global requirement for critical minerals driven by clean energy technologies, digital infrastructure and defense. Hochtief, through the combined capabilities of Setsman and Thies, has built a global position in minerals and sustainable mining services. Searchman has won over 500 prize in critical and precious minerals since 2024 and secured several significant prize awards during the period across rare earth, copper and lithium. And the group is expanding its European presence where it is a key partner in the construction of an integrated lithium and geothermal energy project in Germany. where the group recently completed the acquisition of our remaining 40% minority stake, continues to execute on its commodity diversification strategy and has secured several gold and critical mineral projects in Australia during the period. Public investment in defense infrastructure is set to substantially increase globally. At the end of September 26th, the group had a defense order book of over 2.3 billion euros and we are leveraging our strong civil engineering capabilities proven private execution record, and longstanding presence across key defense markets. We have recently been selected as one of the contractors for a potential $900 million in defense contracts for the US Air Force, and early this year, Hochtief was awarded a major contract for the German Armed Forces. In biopharma health dedication, Turner was recently named the nation's top healthcare construction manager for the 25th time. And in transport and sustainable infrastructure, we were awarded several major projects, including a $1.9 billion dam modernization project in California, up to 900 million years of work for a 26-kilometer section rail link near Stockholm, the next phase of the Prague Metro Line D for around $1.2 billion, and a major rail infrastructure project for Melbourne Airport. In Germany, the group's order backlog has doubled over the last four years. Furthermore, The country's 500 billion euro infrastructure fund is starting to be deployed. Octiv is very well positioned to benefit due to scalability of its business model and its core expertise in bridges, tunnels, rail, and transmission lines. As part of our capital allocation strategy, we regularly assist Swatik M&A and Bolton acquisition opportunities. As I mentioned earlier, we acquired the remaining 40% interest in this and in Q4 we completed the automatic acquisition. An essential element for a capital allocation approach is to maintain a solid investment grade rating. During the third quarter, S&P upgraded Cocteau's grade rating to BBB with a stable outlook, acknowledging the successful implementation of its growth strategy. And on ESG, I would highlight that Cogtiv earned an A rating in the CDP's climate change assessment, while Engineering New York Records named Turner the top U.S. green builder for the 19th consecutive year. So let me leave you with a couple of key ideas. The group's strong growth trajectory is underlined by this strong set of results, which show an acceleration in the growth of profits, cash flow, and new orders. Combined with a strong balance sheet and back, by selective capital allocation decisions, we have created the necessary conditions to pursue further growth opportunities. I look forward to discussing them in greater depth at next week's Capital Markets Day.