01 ACS 08 Informe Econmico INGLES[1]
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Annual Report of ACS Group 2008 www.grupoacs.com Cover photo: Vespucio Norte Highway in Chile. Economic and Financial Report of ACS Group 2008 Economic and Financial Report of ACS Group Directors’ Report on the Consolidated Group 04 Consolidated Financial Statements 32 Auditors’ Report on Consolidated Financial Statements 156 Historical Perfomance 158 Directors’ Report on the Consolidated Group 1. Business performance of the ACS Group in 2008 1.1 Main events Key operating and financial indicators 2007 2008 Var. 08/07 Million of euros Turnover 15,345 16,010 +4.3% International 16.3% 21.7% EBITDA 1,380 1,480 +7.2% Margin 9.0% 9.2% EBIT 1,057 1,097 +3.8% Margin 6.9% 6.9% Ordinary Net Profit* 1,010 1,127 +11.6% Net Profit of Continued Operations** 897 1,019 +13.5% Attributable Net Profit 1,551 1,805 +16.4% Margin 10.1% 11.3% EPS 4.51 € 5.43 € +20.5% Cash Flow from Operations 585 1,060 +81.4% Net Investments 2,475 171 n.a. Investments 3,377 2,969 -12.1% Disposals 902 2,798 +210.2% Total Net Debt 16,575 9,355 -43.6% Net Debt with recourse 6,933 2,933 -57.7% Non recourse Financing 9,642 6,422 -33.4% * Profit after taxes not including exceptional results: Capital Gain on UNF, InvinSL, DCA, Continental Auto, net impact from equity swap assesment and others. ** Profit after taxes not including discontinued operations (GCA and UNF). Note: The figures included in this report are presented in accordance with the Group’s management criteria any may differ with respect to those presented in the financial statements due to certain reclassifications which have no effect on net profit. 2008 ended with good operating and financial results. The ACS Group’s turnover amounted to EUR 16,010 million, up 4.3% on 2007. Additionally, EBITDA rose by 7.2% and EBIT grew by 3.8%. Ordinary net profit, excluding the extraordinary results for the year, increased by 11.6% to EUR 1,127 million. Also, net profit from continuing operations, which does not include the profit from this year’s discontinued operations (Unión Fenosa) and those discontinued in 2007 (Continental Auto and Unión Fenosa) rose by 13.5% to EUR 1,019 million. As a result of this positive performance the net profit attributable to the Group amounted to EUR 1,805 million, 16.4% higher than in the previous year. The earnings per share adjusted by the average numbers of shares outstanding, stood at EUR 5.43 per share, up by 20.5%. This increase, which was higher than the growth in net profit, was a result of the retirement of almost 10% of the Group’s shares over 2008. In the past 12 months, the ACS Group’s cash generation capacity continued to be sound. The cash flow generated by operations increased by 81.4% to EUR 1,060 million, allowing for investments amounting to EUR 2,969 million in 2008. Divestments amounted to EUR 2,798 million, and included, inter alia, the sale of 10% of Unión Fenosa and of various concessions to Abertis. This cash generation capacity has enabled the ACS Group to reduce its debt, which amounted to EUR 9,355 million at 31 December, 2008. Of this amount, EUR 2,933 million related to net recourse debt and EUR 6.422 million related to limited recourse financing of projects and debts. Annual Report 2008 ACS Group 04 1.2 Consolidated income statement of the ACS Group Consolidated Income Statement 2007 % 2008 % Var. 08/07 Million of euros Net Sales 15,345 100.0% 16,010 100.0% +4.3% Other revenues 469 3.1% 534 3.3% +13.8% Total Income 15,814 103.1% 16,544 103.3% +4.6% Operating expenses (10.856) (70,8%) (11.169) (69,8%) +2.9% Personnel expenses (3.578) (23,3%) (3.895) (24,3%) +8.9% Operating Cash Flow (EBITDA) 1,380 9.0% 1,480 9.2% +7.2% Fixed assets depreciation (285) (1,9%) (340) (2.1%) +19.3% Current assets provisions (38) (0,2%) (43) (0.3%) +12.8% Ordinary Operating Profit (EBIT) 1,057 6.9% 1,097 6.9% +3.8% Fixed assets depreciation 6 0.0% 0 0.0% -97.7% Other operating results (74) (0,5%) 151 0.9% n.a. Operating Profit 989 6.4% 1,248 7.8% +26.1% Financial income 286 1.9% 407 2.5% +42.3% Financial expenses (555) (3,6%) (804) (5,0%) +44.9% Ordinary Financial Result (269) (1,8%) (397) (2,5%) +47.6% Foreign exchange results (17) (0,1%) 1 0.0% n.a. Impairment non current assets results 124 0.8% (651) (4,1%) n.a. Results on non current assets disposals 80 0.5% 704 4.4% n.a. Net Financial Result (82) (0,5%) (343) (2,1%) n.a. Results on equity method 172 1.1% 164 1.0% -4.6% Ordinary income of continued operations 1,079 7.0% 1,069 6.7% -1.0% Corporate income tax (160) (1,0%) (30) (0,2%) -81.5% Profit after taxes of the continued operations 919 6.0% 1,039 6.5% +13.0% Profit after taxes of the discontinued operations 654 4.3% 786 4.9% +20.3% Consolidated Result 1,573 10.3% 1,825 11.4% +16.0% Minority interest (22) (0,1%) (20) (0,1%) -7.3% Net Profit Attributable to the Parent Company 1,551 10.1% 1,805 11.3% +16.4% Economic and Financial Report 05 Directors’ Report on the Consolidated Group 1.2.1 Revenue Revenue amounted to EUR 16,010 million, up 4.3% on 2007. Sound performance was shown by both the Environment & Logistics area, which grew by 11.1% and the Industrial Services Area, which grew by 18.0%. Construction activity dropped by 9.9% as a result of the downward trend of this industry in Spain, especially in the fourth quarter of the year. This decline has been offset by the growing expansion of international sales exclusively in relation to civil engineering works, which have also enabled the Group to maintain stable operating margins. Turnover 2007 % 2008 % Var. 08/07 Million of euros Construction 7,353 47% 6,625 41% -9.9% Concessions 36 0% 66 0% n.s. Environment & Logistics 2,835 18% 3,148 19% +11.1% Industrial Services & Energy 5,489 35% 6,477 40% +18.0% Holding / Adjustments (368) (306) Total 15,345 16,010 +4.3% The Group’s total international sales rose by 39.0% to EUR 3,467 million and accounted for 21.7% of total revenue. Notable is the heavy growth in construction activity in the foreign market, which practically doubled, largely due to the US market, whereas the other activities grew by around 25%. Domestic Sales 2007 % 2008 % Var. 08/07 Million of euros Construction 6,920 94% 5,809 88% -16.1% Concessions 24 67% 57 86% +135.9% Environment & Logistics 2,495 88% 2,727 87% +9.3% Industrial Services & Energy 3,779 69% 4,257 66% +12.6% Holding / Adjustments (367) 100% (306) 100% -16.6% Total 12,851 84% 12,543 78% -2.4% International Sales 2007 % 2008 % Var. 08/07 Million of euros Construction 433 6% 816 12% +88.6% Concessions 12 33% 9 14% -19,7% Environment & Logistics 340 12% 421 13% +23,8% Industrial Services & Energy 1,709 31% 2,220 34% +29,8% Holding / Adjustments Total 2,494 16% 3,467 22% +39.0% Annual Report 2008 ACS Group 06 1.2.2 Gross profit from operations Gross profit from operations was 7.2% higher than in 2007 and amounted to EUR 1,480 million. The gross profit margin stood at 9.2%, up 20 basis points on 2007. EBITDA 2007 % 2008 % Var. 08/07 Million of euros Construction 549 39% 494 33% -10.0% Concessions 1 0% 23 1% n.s. Environment & Logistics 381 27% 412 27% +8.0% Industrial Services & Energy 488 34% 591 39% +21.1% Holding / Adjustments (39) (40) Total 1,380 1,480 +7.2% 1.2.3 Net profit from operations Net profit from operations amounted to EUR 1,097 million, up by 3.8% on the previous year, placing the net profit margin at 6.9%, which was the same as the previous year. EBIT 2007 % 2008 % Var. 08/07 Million of euros Construction 460 42% 411 36% -10.7% Concessions (5) (0%) 8 1% n.s. Environment & Logistics 233 21% 249 22% +7.1% Industrial Services & Energy 413 37% 472 41% +14.4% Holding / Adjustments (44) (43) Total 1,057 1,097 +3.8% Industrial Services, which showed good performance with growth of 14.4%, and Environment & Logistics (+7.1%) were the two areas which contributed to this improvement. The EBIT of the Construction area dropped by 10.7%, which was in line with the drop in activity. 1.2.4 Net financial profit/loss Finance costs stood at EUR 804 million, whereas financial income rose to EUR 407 million, and included the dividends received from Iberdrola amounting to EUR 111 million. Net finance costs amounted to EUR 397 million, and were 47.6% higher than in 2007 as a result in the increase in debt arising from investments performed in the year and the increase in their cost. Economic and Financial Report 07 Directors’ Report on the Consolidated Group 1.2.5 Profit before tax from continuing operations Profit before tax from continuing operations amounted to EUR 1,069 million, down by 10% on 2007, as a result of the effect of the change in the fair value of financial instruments, which amounted to a negative EUR 651 million, arising from the valuation of derivates on the shares of Iberdrola.