Microsoft Word - 2015 11 11 ASTALDI PRESS RELEASE 2015 Nine Months Results




Astaldi's BoD approves results at 30 September 2015


ASTALDI FIRST NINE MONTHS OF 2015: REVENUE, UP BY 11.6% TO EUR 2.1 BILLION, NET PROFIT, UP BY 25.7% TO EUR 76 MILLION


FILIPPO STINELLIS APPOINTED CO-CHIEF EXECUTIVE OFFICER FOR BUSINESS ACTIVITIES


  • Main consolidated results:

    • Total revenue of EUR 2,066.7 million

    • EBITDA margin of 11.7%, with EBITDA of EUR 242.8 million (+11.2%)

    • EBIT margin of 9%, with EBIT of EUR 185 million (+8.2%)

    • Net profit of EUR 76 million


  • Total order backlog of EUR 27 billion, of which:

    • Order backlog in execution totalling EUR 17.5 billion

    • EUR 9.3 billion of additional projects secured and being finalised


  • New orders of over EUR 5.6 billion (EUR 3 billion for the whole of FY2014)


  • Net financial debt of EUR 1,151.8 million (compared to EUR 1,104.7 million at 30 September 2014 and EUR 798.7 million at 31 December 2014)


  • Year-end target: 10% increase in revenue, EBIT margin of approx. 9%, 10% increase in net profit


Rome, 11 November 2015 - The Board of Directors of Astaldi S.p.A. met today, chaired by Paolo Astaldi, to approve the Interim Report s at 30 September 2015 and to appoint Mr. Filippo Stinellis Co-Chief Executive Officer, in charge of business activities. The appointment forms part of the project aimed at reinforcing the Group's organisational model with the aim of making it respond more to the Group's increasing size, including at an international level. In this way, the Chief Executive Officer, Mr. Stefano Cerri, will be able to focus more on the Group's economic and financial management, strengthening its financial structure and on the valorisation of concession assets. Indeed, the increase in size recorded in recent years has seen the Company become a consolidated business with a first-class integrated Construction-Concessions capacity that has prompted reinforcement of the organisational model in such a way as to accompany the Group's growth in the new planned


cycle. This will lead to the achievement of new and challenging goals, also as a result of valorisation of concession assets currently among the backlog.


Mr. Filippo Stinellis, appointed Member of the Board of Directors of Astaldi in January 2015 and Coordinator of the Group's business activities since last March, has been with the Group since 1992, working successfully in the area of managing major-size projects in Italy and abroad.


Stefano Cerri, Chief Executive Officer of Astaldi Group, reported the following: 'The results at 30 September 2015 confirm the economic growth t of Astaldi. The trend is in line with what was recorded in previous quarters and with the growth targets set down in the business plan. Therefore, we can confirm a 10% increase in revenue, an EBIT margin of approximately 9% and a 10% increase in net profit as the year-end targets.'


Main consolidated results at 30 September 2015


Main consolidated results


(EUR/000)

revenue

revenue

change (%)

Total revenue

2,066,747

100.0%

1,851,858

100.0%

+11.6%

EBITDA

242,813

11.7%

218,382

11.8%

+11.2%

EBIT

185,038

9.0%

171,011

9.2%

+8.2%

EBT

107,625

5.2%

98,520

5.3%

+9.2%

Group net profit

76,041

3.7%

60,513

3.3%

+25.7%

30.09.2015

% on total


30.09.2014

% on total

YOY


Total revenues increased by 11.6% to EUR 2,066.7 million (EUR 1,851.9 million at 30 September 2014) thanks to some of the most important contracts in progress. Specifically, production increased in America (Canada and Chile) and in Europe (with specific reference to Turkey, Russia and Poland) which was able to fully offset the trend in Italy, thus confirming effectiveness of the Group's geographical diversification strategy implemented in recent years. Operating revenue accounted for 95.6% of the totals for the period, showing an 11.5% increase to EUR 1,975 million (EUR 1,771.5 million at 30 September 2014). Other operating revenue accounted for the remaining 4.4%, totalling EUR 91.7 million (+14.1%, EUR 80.3 million at 30 September 2014).


Italy generated EUR 335 million (17% of operating revenue) in a scenario which still can't be defined favourable albeit showing signs of a turnaround and was affected by the virtual completion of some major contracts (Line 5 of Milan underground). The quarterly figure also reflected progress on underground lines in Milan (Lines 4 and 5) and Rome (Line C) and the New Hospital in Naples. Road works related to the «Quadrilatero» motorway project also went ahead as planned while works on the New Hospital in Naples (complition by the end of the year) and the New Hospital in Massa Carrara (start-up of management scheduled for mid-November 2015) are nearing completion. The Facility Management, Maintenance and Management of Complex Systems segment also made a significant contribution thanks to operations performed by NBI (Facility Management) and Ge.SAT (the service management company for the Tuscan Hospitals project). Europe (47.7% of operating revenue) generated EUR 942 million, showing a marked increase (17.2%) thanks to contributions from Turkey (Gebze-Orhangazi-Izmir motorway, Third Bosphorus Bridge), Russia (Western High- Speed Diameter in St. Petersburg) and Poland (John Paul II International Airport Krakow-Balice, Łodz railway project, S-8 National Road). Road and railway works went ahead in Romania (especially Lines 4 and 5 of the Bucharest underground). America (29.7% of operating revenue) recorded an increase of 49.4% thanks to


works in Canada on the Muskrat Falls Hydroelectric Project and operations performed by the Canadian subsidiary, TEQ Construction Enterprise, as well as to the good progress achieved in Peru (Cerro del Águila Hydroelectric Project) and Chile (progress on Chuquicamata Mining Project). As regards Canada, it should be noted that despite the extraordinary cold weather conditions recorded at the start of the year and the complexity of the start-up phase, works on the Muskrat Falls Project are in line with current schedules. The Maghreb (3.9% of operating revenue) contributed EUR 77 million thanks to progress on the Saida-Moulay Slissen and Saida-Tiaret railways in Algeria. While the Middle East (1.7% of operating revenue) benefitted from railway works in progress in Saudi Arabia (Jeddah and KAEC HS stations).


As regards business sectors, Construction accounted for 99% of operating revenue, showing an 11.5%, increase, thanks specifically to Transport Infrastructures (70% of operating revenue), but also Water and Energy Production Plants (17% of operating revenue thanks to the Muskrat Falls hydroelectric project in Canada and the Cerro del Águila hydroelectric project in Peru), Civil and Industrial Construction (6% of operating revenue) and Facility Management, Plant Engineering and Management of Complex Systems (6%).

Concessions generated approximately 1% of operating revenue, amounting to EUR 21 million (EUR 20 million at 30 September 2014), thanks to the contribution from Milas-Bodrum International Airport in Turkey (EUR

12.2 million, but which came to the end of its concession period in October 2015), as well as from San Luca Hospital in Lucca, San Jacopo Hospital in Pistoia and New Hospital in Prato in Italy (EUR 8.4 million in total). It must be recalled that all the other concession projects are consolidated as 'Effects of equity accounting' which totalled EUR 42.7 million for the period (EUR 17.9 million at 30 September 2014).


Costs showed a less than proportional increase compared to production, thanks to considerable streamlining of expenditure, above all at a corporate level, and centralised management of supplies and selection procedures for subcontractors. Production costs totalled EUR 1,394.3 million (EUR 1,328.2 million at 30 September 2014), while personnel costs amounted to EUR 405.7 million (EUR 290 million at 30 September 2014). The quarterly figures showed an increase in the average workforce (almost 11,000 units from approximately 9,500 in September 2014), as a result of the increased size of contracts in progress as well as greater use of direct production, especially in Canada where the complexity of works requires a more structured organisation.


EBITDA increased by 11.2% to EUR 242.8 million (EUR 218.4 million at 30 September 2014), with an EBITDA margin of 11.7%. EBIT totalled EUR 185 million, showing an 8.2% increase (EUR 171 million at 30 September 2014) with an EBIT margin of 9%. The quarterly figures benefitted from the structural increase in the quality of the order backlog as well as from the positive contribution of some contracts (specifically Line 5 of Milan underground) which achieved important milestones ahead of contractual timeframes.


Net financial charges amounted to EUR 119.6 million (EUR 90.4 million at 30 September 2014) and included, among others, charges from the fair value evaluation of the conversion option linked to the Group's convertible bond loan, as well as effects connected with exchange rate fluctuation.


EBT increased by 9.2% to EUR 107.6 million (EUR 98.5 million at 30 September 2014), also thanks to EUR

42.2 million of 'Effects of equity accounting' (EUR 17.9 million at 30 September 2014), largely attributable to the Concession sector. Net profit increased by 25.7% to EUR 76 million (EUR 60.5 million at 30 September 2014), with an estimated tax rate of approximately 30% and a net margin of 3.7%.


Main balance sheet items at 30 September 2015


Main balance sheet items

(EUR/000)

Total net fixed assets

917,942

790,197

755,197

Working capital

842,700

616,714

972,443

Total provisions

(22,477)

(23,002)

(27,008)

Net invested capital

1,738,165

1,383,910

1,700,632

Total financial payables/receivables *

(1,157,510)

(803,854)

(1,107,778)

Equity attributable to owners of the Parent

574,543

574,058

586,862

Total equity

580,656

580,056

592,854

30.09.2015 31.12.2014 30.09.2014


* Figure shown inclusive of treasury shares on hand totalling EUR 5.7 million at 30 September 2015, and EUR 3.1 million at 30 September 2014 and EUR 5.2 million at 31 December 2014.


At 30 September 2015, net fixed assets amounted to EUR 918 million (EUR 790.2 million at 31 December 2014), with the quarterly trend attributable mainly to: (i) additional investments in concession projects in Turkey (Gebze-Orhangazi-Izmir motorway), Chile (Arturo Merino Benítez International Airport in Santiago) and Italy (Line 4 of Milan underground), as well as conversion into capital of semi-equity paid into Etlik Integrated Health Campus in Ankara; (ii) progressive amortisation of intangible assets linked to the Milas-Bodrum International Airport in Turkey; (iii) technical investments made, especially in Russia, Chile, Canada, Poland and Italy; (iv) effects of equity accounting of investments, mainly attributable to the Concessions segment.


Working capital totalled EUR 842.7 million (EUR 616.7 million at 31 December 2014), showing a 3% decrease during Q3 (EUR 870 million at 30 June 2015) and a 13% decrease YOY (EUR 972.4 million at 30 September 2014). The increase during the first nine months of the year was mainly due to the major boost to production during the period, which resulted in favouring the operating effort of the supplier system, guaranteeing suitable financial support. This resulted in a situation of stability as regards trade payables despite the significant increase in production.


Net invested capital totalled EUR 1,738.2 million (EUR 1,383.9 million at 31 December 2014).


Equity totalled EUR 574.5 million (EUR 574.1 million at 31 December 2014), significantly affected by changes regarding hedging instruments, foreign currency conversion fluctuations (especially the Rouble and the Turkish Lira), as well as by the distribution of dividends amounting to EUR 19.5 million. However, the effects related to conversion fluctuations should not be taken as definitive since the Rouble and Turkish Lira have experienced revaluation as from October.


This resulted in total equity of EUR 580.6 million (EUR 580.1 million at 31 December 2014).
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