Mota Engil SGPS S A : Engil informs about the Earnings Release regarding FY2019

2019

Earnings Release

12 March 2020

Table

of Contents

Table of		2
Contents

01	04
Key Highlights		Final Remarks and Outlook
Page 04		Page 22
02	05
Results Overview		Appendix
Page 06		Page 25
03
Regional Segments
Page 16

1. Europe
2. Africa
3. Latin America

2019	1
Earnings
Release
	Key
	Highlights

Key Highlights		4

Key Highlights

Europe

Africa

Latin America

BACKLOG

€5.4 bn

5.55.4

Dec.18 Dec.19

NET INCOME

• 27mn(+13% YoY)

RECORD TURNOVER

€2,848mn(+2% YoY)

2,802 2,848

2018 2019

NET DEBT

€1,185 mn

EBITDA

• 420mn(margin 15%)

407420

2018 2019

CAPEX

€262 mn

(Net debt / EBITDA 2.8x)

2019	2
Earnings
Release
	Results
	Overview

Earnings Release FY 2019

6

Net income up 13% YoY to €27 mn

2019 2018YoY2H19 YoY

Turnover of €2,848 mn,

balanced between the

regions and with the Non

E&C businesses

accounting for 19% of

the total

Resilient EBITDA margin

at 15% with the Non-

E&C businesses

accounting for 24% of

the total

P&L (€ mn)	2,848
Turnover
EBITDA	420
Margin	15%
EBIT	176
Margin	6%
Net financial results	(55)
Associates	(1)
Net monetary position1	2
EBT	121
Net income	80
Attributable to:
Non-controlling interests	53
Group		27

2,802	2%	1,503	(3%)
407	3%	226	(2%)
15%	0 p.p.	15%	0 p.p.
200	(12%)	85	(23%)
7%	(1 p.p.)	6%	(1 p.p.)
(56)	2%	(3)	92%
3	n.m.	(2)	n.m.
(12)	n.m.	2	n.m.
135	(11%)	81	29%
93	(15%)	54	3%
			(24%)	36	3%
70
		13%	19	4%
24

	IFRS 16 impact in
	EBITDA was c.€18
	mn
	Effective tax rate of
	34%

Net financial results

positively impacted by

forex gains, whereas

interest costs remained

broadly stable

Decrease of non-

controlling interests

1The caption "Net monetary position" reflects the accounting, as hyperinflationary economies (IAS 29), of Angola and Zimbabwe in 2018 and 2019, respectively.

YoY

Earnings Release FY 2019

EBITDA margin of 15%

7

	2019		2018		YoY		2H19		YoY
P&L breakdown (€ mn)	2,848		2,802		2%		1,503		(3%)
Turnover
Europe	880		859		2%		473		4%
Africa	1,007		905		11%		559		3%
Latin America	950		1,069		(11%)		492		(15%)
Other and intercompany	11	1	(30)		n.m.		(22)		n.m.
EBITDA	420		407		3%		226		(2%)
			15%		0 p.p.		15%		0 p.p.
Margin	15%
Europe	87		71		23%		46		95%
Margin	10%		8%		2 p.p.		10%		5 p.p.
Africa	218		192		13%		126		15%
Margin	22%		21%		1 p.p.		23%		2 p.p.
Latin America	123		140		(12%)		64		(35%)
Margin	13%		13%		0 p.p.		13%		(4 p.p.)
Other and intercompany	(8)		4		n.m.		(10)		n.m.

• Turnover evolution in Europe reflected: (i) a stronger activity in the E&C business in Portugal in the 2H19 and (ii) a stable E&S activity
• Africa's turnover was up 11% YoY to €1 bn
• In Latin America, Brazil and Peru project execution showed a double digit growth

• EBITDA increased 23% YoY in Europe benefiting from improved profitability in the E&C
• EBITDA margin in Africa reached 22% with resilient contributions from the main markets
• EBITDA margin in Latin America was stable at 13%

1Of which €57 mn related to companies that in 2018 were accounted in Europe's region.

Earnings Release FY 2019		8

Significant growth in Mining, Oil & Gas and Power

TOTAL BACKLOG EVOLUTION (€ mn)

	Total Backlog
	E&C Backlog
		5,465	5,380
	5,138
4,422		4,777	4,598
	4,305
3,779
2016	2017	2018	2019

• The E&C activity represents 85% of the total backlog with a backlog to sales ratio of 2.3x
• Significant growth in segments withLong-Term Contracts: Mining, Oil&Gas and Energy (35% of the total vs. 21% in FY2018)
• Recent contract in Colombia (€270 mn) not included in backlog

E&C BACKLOG	BACKLOG
BY SEGMENT	BY REGION

Mining		Latin	Africa
		America
19%		27%	51%
16%	€4.6 bn		€5.4 bn

Oil &

Gas and Power

16%	49%	22%
Europe
Civil	Roads,
Construction	Infrastructures
	and Others

Earnings Release FY 2019		9

Major construction projects
Range			Exp. Year
in backlog at December 311		Segment	Completion
	(€ mn)	Country	of
Project
Vale Mining Moatize	> 250	Mozambique	Mining	2022
Gran Canal highway	> 250	Mexico	Roads	2020
Requalification of the Soyo Naval Base	> 250	Angola	Ports	2021
BR-381 highway dualisation (section 3.1 and section 7)	> 250	Brazil	Roads	2020
Las Bambas dam (phase 4 under execution)	> 250	Peru	Power	2020
Cardel-Poza Rica highway	[200;250]	Mexico	Roads	2020
Tuxpan-Tampico highway	[200;250]	Mexico	Roads	2020
Mandiana gold mine	[150;200[	Guinea Conakry	Mining	2027
Siguiri gold mine	[150;200[	Guinea Conakry	Mining	2022
El Tornillito hydroelectric facility	[150;200[	Honduras	Power	2023
Cuapiaxtla-Cuacnopalan road	[100;150[	Mexico	Roads	2022
Calueque Dam - lifting system, irrigated perimeter and hybrid generation plant	[100;150[	Angola	Power	2023
General Hospital of Cabinda	[100;150[	Angola	Civil Construction	2020
Capacity Improvement Kampala Northern Bypass	[100;150[	Uganda	Roads	2021
Offshore platform - operational unit Rio Section B	[100;150[	Brazil	Oil&Gas	2022
Bordo Poniente landfill	[100;150[	Mexico	Urban infrastruct.	2022
Fairmont Hotel	[100;150[	Mexico	Civil Construction	2022

1Selection of E&C projects above €100 mn.

Earnings Release FY 2019

Growth and long-term capex accounted for 54%

• Capex of €262 mn
• E&S capex of €129 mn was mainly channelled to EGF (€89 mn) in order to comply with the regulators' approved investment for the current regulatory period
• E&C CAPEX (€68mn) < 3% E&C Turnover
• Maintenance capex c.4% of turnover due to the optimization of planning, procurement and logistics

10

NET CAPEX	CAPEX BY REGION (2019)
(€ mn)	(€ mn)

287120

262

		104	49
					71	69
129
						22
		101						43
65	71	16
						33	10
68	82				2
					17
2019	2018	Europe	Africa	Latin America Others
	E&C Capex				Maintenance
	Capex - long term contracts1			Growth
	E&S Capex				Capex - Long term
					contracts1

1Includes mining contracts in Africa and the Energy business in Latin America.

Earnings Release FY 2019

Working capital to Turnover ratio of 4%

Working capital evolution

25%20%

20%17%

15%

475			7%	7%
10%			367			4%
						199
5%					177
								121
0%		Dec.15		Dec.16		Dec.17		Dec.18		Dec.19
				Working capital (€ mn)	Working capital/Turnover1

1Turnover of the last twelve months.

500

450

400

350

300

250

200

150

100

50

0

11

Working capital/Turnover	For 2020, focus on
ratio decreased to 4%	structuring the
	contracts with the aim
	of minimizing the
	receivables payment
	period and credit risk
	exposure

• Downward trend follows (i) reinforcement of cooperation with multilaterals, ECA´s, (ii) higher exposure to private clients, namely in mining and oil&gas sectors and to projects financed by the client and (iii) settlement of receivables mainly from Angola's Government

Earnings Release FY 2019		12

Solid CFFO of €456 mn

(+32% YoY: FY18 was €346 mn)

CFFO €456 mn

FREE CASH-FLOW (€ mn)

186

					118	Of which:
							€117 mn forex
				30	35		€37 mn revaluation of
		420			investment properties
			262			€14 mn impairments
						1
	1			55			1,185
	78
955		41

Net debt Dec.18	EBITDA	Changes in	Corporate tax	Net	Capex	Dividends	Financial Capex	Changes in	Others	Net debt Dec.19
		working capital		financials		paid		perimeter

1Net debt considers Angola's sovereign bonds denominated in US$, US$ linked and kwanzas as "cash and cash equivalents" which amounted to €210 mn (€224 mn nominal value) in December 2019 (€152 mn in December 2018) and Ivory Coast's sovereign bonds that amounted to €13 mn in December 2019.

Earnings Release FY 2019		13

Net debt1of €1,185 mn with

GROSS DEBT MATURITY2,DECEMBER 2019 (€ mn)

a Net debt / Ebitda at 2.8x

Leasing operations (IFRS 16 impact of €31 mn), amounted to

€266 mn

Average debt maturity of 2.5 years up from from 2.3 a year

ago, helped by the successful bond issue in October (€140 mn)

Average cost of debt of 5.2%

Liquidity position corresponds to 1,2x of non-revolving

Undrawn	234
credit	299
lines
Cash
&	658	419
Cash
equiv.
		145
	Liquidity	1 year
	position

Already refinanced

in 2020

254

249

227

2 years

3 years

4 years

Non-revolving Revolving

223	27
5 years	> 5 years

financing needs with maturity less than one year

COST OF DEBT AND NET DEBT / EBITDA

• Cash-inof c.€20 mn from the monetization of Africa's sovereign bonds

1Excluding leasing and factoring and including €210 mn (€224 mn nominal value) of Angolan sovereign bonds and €13 mn of Ivory Coast sovereign bonds;

2Excluding leasing and factoring;

5.8%	5.6%	5.6%
	5.1%		5.2%	5.2%
			5.0%
3.6x	3.4x
			2.5x		2.5x	2.8x
		2.2x	2.3x

Dec.15

Dec.16

Dec.17

Jun.18

Dec.18

Jun.19

Dec.19

2019	3
Earnings
Release
	Regional
	Segments

2019

Earnings

Release

Highlights 2019

05	€880mn	€1,206mn
Countries	Turnover	Backlog

Portugal

Spain

Poland

Ireland

United Kingdom

3.1

Europe

Earnings Release FY 2019

Positive trend in the E&C in Portugal

• Public tenders in Portugal up 50% YoY to €4 bn in 2019 opening new opportunities for larger projects awards in 2020
• Well positioned to benefit from large project awards in Portugal in the transport and healthcare (hospitals), segments with European Union funds committed
• E&S activity to benefit from the higher RAB driven by significant investments
• Guidance FY2020: Turnover up mid single digit with stable profitability

16

2019

Earnings

Release

Highlights 2019

11 €1,007mn€2,711mn

Countries TurnoverBacklog

Angola	Rwanda
Mozambique	Guinea Conakry
Malawi	Cameroon
South Africa	Ivory Coast
Zimbabwe	Kenya
Uganda

3.2

Africa

Earnings Release FY 2019		18

Africa with positive outlook for the long-term

• Mozambique expected to be the main driver of growth for the next years due to existing contracts (with Vale) and to potential new contract awards, while maintaining a strong operation in other main markets
• 2019 is the first full year of activity of the waste contract operation in Ivory Coast, which had a positive contribution for turnover and EBITDA
• Good perspectives to reinforce the relationship with ECA's and multilaterals (e.g.Afreximbank) to finance new projects, reinforcing the footprint inlong-term projects denominated in hard currency and with higher profitability
• Guidance FY2020: high single digit turnover growth with EBITDA margin of c.20%

2019

Earnings

Release

Highlights 2019

06	€950mn	€1,463mn
Countries	Turnover	Backlog

Mexico

Peru

Brazil

Colombia

Dominican Republic

Aruba

3.3

Latin America

Earnings Release FY 2019		20

Increased commercial dynamism

• Strengthening the presence in the E&S business in Brazil, together with the oil&gas maintenance activity in order to increasecash-flow stability and visibility
• Recent project award by CTG and CCCC in Colombia (Talasa dam) opens new partnership opportunities for the upcoming years
• Positive perspectives to revamp the commercial dynamism with a balanced contribution from the main markets
• Mexico positive outlook driven by the new infrastructure plan
  (2020-2024) amounting to US$44 bn (including PPP) and by the Train Maya project and with the initial phase of Costa Canuva
• Guidance FY2020: high single digit growth with stable margin

2019	4
Earnings
Release
	Final
	Remarks
	and Outlook

Final Remarks

• Healthy turnover with focus on profitability (EBITDA margin of 15%)
• Backlog's attractive projects in several markets with positive commercial perspectives for 2020
• Significant capex will contribute to stablecash-flow generation from long-term projects and with higher profitability (Mining, Environment, Energy and Concessions)
• Comfortable liquid position and debt with longer maturities (average 2.5 years)

Outlook

• Turnover expected to grow with the E&C in Europe, Africa and Latin America accelerating its pace
• EBITDA margin to remain in line with historical levels
• Backlog to stand above €5 bn
• Capex: €200mn-€250 mn (partially financed by pre-payments) focused in low cyclical businesses with resilient cash-flow generation (non-E&C)
• Focus on organiccash-flow generation

2019	5
Earnings
Release
	Appendix

Earnings Release FY 2019		25

Balance sheet

	Dec.	Jun.	Dec.	YoY
	19	19	18
Balance sheet (€ mn)
Fixed assets	1,338	1,300	1,296	43
Financial investments	353	300	290	63
Long term receivables	181	122	117	63
Non-current Assets held for sale (net)	145	85	90	55
Working capital	121	251	199	(78)
	2,138	2,057	1,992	146
Equity	343
418	447	-103
Provisions	107	98	104	3
Long term payables	502	474	486	16
Net debt	1,185	1,067	955	230
	2,138	2,057	1,992	146

Earnings Release FY 2019		26

Europe performance breakdown

2019 2018YoY2H19 YoY

P&L breakdown (€ mn)
Turnover	880
E&C	623
E&S	264
Other, elim. and interc.	(7)
EBITDA	87
Margin	10%
E&C	26
Margin	4%
E&S	61
Margin	23%
Other, elim. and interc.	-

859	2%	473	4%
																	340	11%
572	9%
300					(12%)										138	(11%)
(13)				41%									(4)	51%
71			23%								46	95%
8%						2 p.p.							10%	5 p.p.
(12)						n.m.						15	n.m.
(2%)						5 p.p.					5%	9 p.p.
84		(27%)				32	(15%)
28%						(5 p.p.)			23%	(1 p.p.)
(2)						n.m.		(1)	n.m.

Earnings		27
Release

Disclaimer

This presentation used sources deemed credible and reliable but is not guaranteed as to accuracy or completeness.

It also contains forward looking information that expresses management's best assessments but might prove inaccurate.

The information contained in this presentation is subject to many factors and uncertainties and therefore subject to change without notice.

The company declines any responsibility to update, revise or correct any of the information hereby contained.

This presentation does not constitute an offeror invitation to purchase securities of Mota-Engil nor any of its subsidiaries. The financialinformation presented in this document is non-audited.

TURNOVER: corresponds to the caption "Sales and services rendered".

EBITDA MARGIN: corresponds to the division between the algebraic sum of the following captions of the consolidated income statement "Sales and services rendered"; "Cost of goods sold, mat. cons., Changes in production and Subcontractors"; "Third-party supplies and services"; "Wages and salaries"; "Other operating income / (expenses)" and the TURNOVER.

CAPEX: acquisitions less disposals of tangible and intangible assets.

NET DEBT: corresponds to the algebraic sum of the following captions of the consolidated statement of financial position: "Cash and cash equivalents without recourse - demand deposits"; "Cash and cash equivalents with recourse - demand deposits"; "Cash and cash equivalents with recourse - term deposits" "Loans without recourse"; "Loans with recourse" and "Other financial investments recorded at amortised cost". Leasing and factoring operations established by the Group are not recorded in the captions aforementioned.

BACKLOG: turnover to be recognised in the future related to projects for which contracts have been signed or awarded.

PEDRO ARRAIS

Head of Investor [e-mail]

MARIA ANUNCIAÇÃO BORREGAInvestor Relations [e-mail]

[e-mail]

Rua de Mário Dionísio, 2

2796-957Linda-A-Velha Portugal Tel. [phone]

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