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Mota-Engil Earnings Release 2015

Apr 4, 2016

1905_iss_2016-04-04_5a5b4164-11bd-4d34-a290-61fc648d7905.pdf

Earnings Release

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Earnings ReleaseFY2015

4 April 2015

Resultsoverview

Regional segments

PAGE 16 PAGE 26

Europe

Africa

Latin America

Final remarks

Key hig g hli hts

  • Turnover up 3% YoY to €2,434 Mn, mainly driven by Latin America and Europe
  • EBITDA margin of 15%, with all regions showing resilient performance
  • Backlog in December 2015 of €4.1 Bn, reflecting a E&C backlog to sales ratio of 2.0 years
  • Newproject awards amounting to c.€400 Mn, which are not included in December s' backlog
  • Net debt of €1,455 Mn, down 6.5% QoQ benefiting from a decrease in working capital in 4Q15
  • Cash in of the ports and logistics business in February 2016 and agreement to sell Indaqua already established

Turnoverup 3% YoY

P&L(€ Mn)

2
0
1
5		 2
0
1
4		 Yo
Y		 4
Q
1
5		 Yo
Y		 l
i
i
i
%
E
B
I
T
D
A
1
5
t
t

m
a
r
g
n
r
e
s
e
n
a
Tu
rn
ov
er		 2,
4
3
4		 2,
3
6
8		 %
3		 6
4
0		 %
1
1
E
B
I
T
D
A		 3
6
7		 4
0
9		 (
%
)
1
0		 1
1
5		 %
2
0
in
Ma
rg		 %
1
5		 %
1
7		 (
)
2 p
.p.		 %
1
8		 0 p
.p.
I
E
B
T		 1
6
8		 2
7
3		 (
)
3
8
%		 5
6		 (
)
2
%
7
in
Ma
rg		 %
7		 1
2
%		 (
)
5 p
.p.		 9
%		 (
)
5 p
.p.
f
l
Ne
ina
ia
inc
t
nc
om
e		 (
)
1
3
5		 (
)
1
3
1		 (
%
)
3		 (
)
5
6		 (
%
)
2
0
As
iat
so
c
es		 6
7		 (
)
1
9		 n m
n.m		 3
2		 n m
n.m
E
B
T		 1
0
0		 1
2
3		 (
)
%
1
8		 3
2		 %
3
5		 d
h
d
f
i
M
t
n
a
n
e
r
e
c
o
r
n
g
o
p
r
o
v
inc
Ne
t
om
e		 5
4		 8
3		 (
)
%
3
5		 1
7		 %
6
2
i
bu
b
le
Att
ta
to
r
:		 f
€
3
2
M
t
a
s
s
e
s
o
c.
n
l
l
ing
int
No
tro
sts
n‐c
on
ere		 3
5		 3
3		 %
7		 1
4		 %
4
4
Gr
ou
p		 1
9		 5
1		 (
)
6
2
%		 3 2
7
2
%
  • Turnover of €2,434 Mn, from which 63% outside Europe
  • EBIT reflect higher non‐cash costs mainly driven by EGF consolidation with an impact of c.€25 (19) n m 32 n m Mn and the recording of provisions for African assets of c.€32 Mn
  • Net financial income mainly impacted by capital losses of €45 Mn related to disposals of real estate assets inCentral Europe
  • Associates include a €48 Mn gain following the Ardian deal established by Ascendi
  • Net income negatively impacted by higher marginal tax

EBITDAof €367 Mn

P&L breakdown(€ Mn)

2
0
1
5		 2
0
1
4		 Y
Y
o		 4
Q
1
5		 Y
Y
o
Tu
rn
ov
er		 2
2,
4
4
3
3
4
4		 2
2,
3
3
6
6
8
8		 3
%
Eu
rop
e		 9
9
4		 9
3
1		 7
%		 2
3
8		 (
)
1
6
%
fr
ica
A		 8
3
5		 1
0
6
2		 (
)
%
2
1		 2
4
2		 %
9
La
in
Am
ica
t
er		 7
0
0		 5
3
7		 3
0
%		 1
9
3		 1
9
%
he
d
O
int
t
a
r
n
erc		 (
)
9
5		 (
)
1
6
2		 4
1
%		 (
)
3
2		 6
3
%
E
B
I
T
D
A		 3
6
7		 4
0
9		 (
)
1
0
%		 1
1
5		 2
0
%
in
Ma
rg		 1
%
5		 1
%
7		 (
)
2 p
.p.		 1
8
%		 0 p
.p.
Eu
rop
e		 1
2
1		 9
7		 %
2
5		 3
8		 %
3
8
Ma
in
rg		 1
2
%		 1
0
%		 2 p
.p.		 1
6
%		 5 p
.p.
fr
ica
A		 6
1
7		 2
7
5		 (
)
3
6
%		 5
7		 (
)
%
1
Ma
in
rg		 %
2
1		 %
2
6		 (
)
5 p
.p.		 %
2
3		 (
)
2 p
.p.
La
in
Am
ica
t
er		 7
6		 3
7		 1
0
7
%		 2
8		 n.m
in
Ma
rg		 1
1
%		 %
7		 4 p
.p.		 1
4
%		 1
3 p
.p.
he
d
O
int
t
a
r
n
erc		 (
)
6		 1 n.m (
)
8		 1
9
8
%
  • Europe's activity in 4Q15 impacted by the d i f h E&C i i i P l b 640 11% reduction ofthe activity in Portugal, but with well supported margins in all segments
  • Despite the challenging environment in Africa, turnover was up 9% YoY in 4Q15 with margins in line withguidance
  • Latin America turnover up 19% YoY in 4Q15, i fl d b M i d EBITDA i influencedby Mexico andstrong margin across all countries

Total backlog of €4.1 Bn

  • Total backlog at 31 December 2015 reached €4.1 Bn
  • New awards in 2016 amounting to approximately €400 Mn, from which 50% in Europe, 35% in Africa and 15% in LatinAmerica
  • Backlog to sales1 ratio healthy at 2.0x

Major p j ro ects ong g oin

1
j
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c		 (
)
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Netcapex of €146 Mn

Net

  • Total net capex reached €146 Mn, down €74 Mn from 2014, reflecting a decrease in capex in all regions
  • Africa still accounts for the majority of capex with 65% of the total, while Latin America accounted for 16%
  • Net capex of €68 in 4Q15, mainly driven by Europe partially due to the EGF operations operations, and by Africa namely due to equipment acquisition required to execute works in Mozambique, Rwanda and Zambia and to major equipment repair works
  • Ongoing strategy of optimising existent fixed asset resources by re‐allocating equipment within regions/countries and managing equipment purchase on an centralized basis

capex (€ Mn) Capex in 2015 by region (€ Mn)

Working capital improvement in 4Q15

Cash‐flow(€ Mn)

2
0
1
5		 2
0
1
4
d
b
i
i
N
P
t
t
t
t
t
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)
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)
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r		 (
)
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F
i
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a
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c
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s		 2
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i
d
b
i
i
C
t
t
a
n
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p
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s
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n		 2
9
6		 1
8
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b
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n		 1,
4
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5		 1,
1
5
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1
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d
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N
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T
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e		 3
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6
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8
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2
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T
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t
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2
x		 ‐

debt/EBITDA 2 3.2x ‐

  • Efficient working capital management, which decreased €184 Mn in 4Q15
  • Africa contributed to a decrease in working capital of €56 Mn in 4Q15
  • M/L term & perimeter impacted by the acquisition of EGF and the reclassification of the assets and liabilities of Tertir
  • Asset disposals in Central Europe with a cash in (reduction of net debt) of c.€39 Mn in 2015
  • Net debt/EBITDA1 of 3.6x, or 3.2x including the cash in of the ports and logistics businesses (EBITDA adjusted), and committed to reach the 3.0x threshold

Net debt down€100 Mn in 4Q15

Ba a ce l nsheet (€ Mn)

D
1
5
e
c.		 S
1
5
e
p.		 D
1
4
e
c.		 D
D
e
c.‐
e
c.		 S
D
e
c.‐
e
p.
d
F
ixe
ets
a
ss		 1
1,
4
4
9
9
0
0		 1
1,
2
2
9
9
2
2		 1
1,
0
0
3
3
6
6		 4
5
4		 1
9
8		 ‐
ina
ia
l
inv
F
tm
ts
nc
es
en		 1
7
9		 3
4
1		 2
8
2		 (
)
1
0
3		 (
)
1
6
2
iva
b
les
Lo
te
ng
rm
rec
e		 9
9
1		 2
6
0		 2
2
8		 (
)
2
9		 (
)
6
0		 h
l
d
f
l
(
f
l
b
l
i
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r
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s
he
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fo
le
(
)
No
As
t
ts
t
n‐c
urr
en
se
r s
a
ne		 4
6
8		 2
1
6		 3
0		 4
3
8		 2
5
2
k
l
W
ing
ita
or
ca
p		 4
7
5		 6
5
9		 4
4
8		 2
8		 (
)
1
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3
2
2,
8
8
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1
2
2		 2
2,
7
7
6
6
8
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2,
0
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2
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4
4		 7
8
8		 4
4
Eq
ity
u		 6
9
2		 6
8
0		 5
7
8		 1
1
4		 1
3
Pro
is
ion
v
s		 1
2
2		 1
2
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5		 (
)
3		 (
)
6		 f
l
d
b
l
i
i
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Lo
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rm
p
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a		 3
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8
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Ne
t		 1,
4
5
5		 1,
5
5
5		 1,
1
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9		 2
9
6		 (
)
1
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6
8
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8
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4
d
l
Inv
Ca
ita
te
es
p		 2,
1
4
7		 2,
2
3
5		 1,
7
3
6		 4
1
0		 (
)
8
8

Tertir (at 3Q15), Indaqua and Ascendi (at 4Q15) reclassified as Non Current Assets held for sale (net of liabilities)

Working capital decrease in 4Q15 mainly reflects decrease in receivables

Long‐term payables mainly related to EGF, namely investment subsidies and regulatory liabilities

Recourse debt of €1.3Bn

Gross

  • Net debt, plus leasing and factoring, amounted to €1,670 Mn, down €119 Mn QoQ
  • Non‐recourse net debt of €141 Mn mainly related to EGF acquisition
  • Leasing and factoring of €215 Mn, of which €149 Mn is leasing
  • Currently, debt already payed or refinanced amounts to €377 Mn
  • Average cost of debt of 5.78% and average debt life extended to 2.48 years (6.5% in December 2014), or 5.63% if adjusted for the redemption of March 2016 retail bonds, which amounted to €154 Mn

debt maturity, December 2015 (€ Mn) Net debt, December 2015 (€ Mn)

Strong liq y uidit position

Liquidity position, December 2015 (€ Mn) Total liquidity position of €706 Mn

  • Improvement of receivables collection
  • Cash in of €245 Mn from the sale of Tertir accounted in February 2016 (not included)
  • Further asset sales namely Indaqua and sales, Ascendi in the pipeline that will further strengthen the Group's balance sheet
  • Asset sales in Central Europe already contributed to€39 Mn in 2015

Successful operations of new business p

EGF

  • Fully consolidated since 3Q15
  • Contribution of €89 Mn and €35 Mn to sales and EBITDA, respectively, in 2H15
  • Integration process already completed
  • New regul t a ory mod l e under negoti ti a on

Electricity business

  • Generation of electricity from existing hydro plants since 4Q15
  • CCGT Purchasing Power Agreement still under discussion with the Government
  • Mexico's electricity wholesale market already opened

Asset sales ongoing according to plan g gg

  • Sale transaction completed in February 2016
  • Cash in of €245 Mn in February
  • Accounted as "Non‐current Assets held for sale" in the Balance sheet as of 31 December 2015
  • Indaqua Agreement to sell Indaqua to Miya Group for €60 Mn (equity) Deal expected to close until end of 1H16, following relevant entities authorisations, namely financial institutions Accounted as "Non‐current Assets held for sale" in the Balance sheet as of 31December 2015

Ascendi

  • O t iti Disposal ongoing Opportunities p g g
  • Accounted as "Non‐current Assets held for sale" in the Balance sheet as of 31December 2015

Resultsoverview

PAGE 3

Regional segments

PAGE 16 PAGE 26

Europe

Africa

Latin America

Final remarks

EBITDAup 25% YoY

Key financials (€ Mn)

2
0
1
5		 2
0
1
4		 Y
Y
o		 Q
4
1
5		 Y
Y
o
Tu
rn
ov
er		 9
9
4		 9
3
1		 %
7		 2
3
8		 (
)
%
1
6
&
E
C		 6
0
2		 5
9
9		 1
%		 1
2
2		 (
)
3
5
%
E
&
S		 3
9
6		 3
3
8		 1
7
%		 1
1
8		 2
3
%
W
te
as		 1
7
3		 8
2		 1
1
1
%		 6
4		 1
7
4
%
is
ics
Lo
t
g		 2
0
5		 2
0
7		 (
)
%
1		 8
4		 (
)
6
%
1
&
En
Ma
in
te
erg
y
na
nc
e		 1
9		 4
8		 (
)
6
1
%		 5 (
)
6
5
%
he
he
l
l
d
O
O
im
im
in
in
t
t
te
te
r
r,
e
e
an
rc
rc.		 (
)
5		 (
)
5		 3
%		 (
)
1		 1
1
%
E
B
I
T
D
A		 2
1
1		 9
7		 2
%
5		 3
8		 3
8
%
in
M
ar
g		 1
2
%		 1
0
%		 2 p
.p.		 1
6
%		 5 p
.p.
&
E
C		 4
0		 3
8		 5
%		 1
0		 n.m
M
in
ar
g		 7
%		 6
%		 0 p
.p.		 8
%		 3 p
.p.
E
&
S		 8
1		 5
9		 3
8
%		 2
9		 4
2
%
in
M
ar
g		 2
0
%		 %
1
7		 3 p
.p.		 2
%
4		 3 p
.p.
W
te
as		 5
5		 2
1		 %
1
6
1		 2
2		 %
1
7
3
M
in
ar
g		 3
2
%		 2
6
%		 6 p
.p.		 3
5
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E&C turnover negatively impacted by the reduction of activity in Portugal, mainly in 4Q15

  • Central Europe accounted for c.43% of total E&C turnover, mainly driven by Poland
  • E&S turnover benefited from €89 Mnfrom EGF (fully consolidated since 3Q15)
  • E&C EBITDA margin reflected improved profitability in Central Europe
  • Increase in E&S EBITDA margin also helped by EGF operations

Profitability expected to continue sustained

  • E&S profitability expected to continue to be ili t d iti l i td b EGF resilientandpositively impactedby C tl E operations
  • Ports and logistics business will still be fully consolidated in the P&L until February 2016

Valorsul plant, EGF EDP new headquarters, Portugal

  • Backlog in E&C of €714 Mn, of which 50% in CentralEurope
  • New contract awards in 2016 amounting to c €200 c.€200Mn in Poland, Ireland and Portugal

Turnover in4Q15 up 9% YoY

Backlog by sub‐region

  • Turnover of €835 Mn, from which 53% and 41% in SADC and Angola, respectively
  • Mozambique activity up 53% YoY
  • EBITDA margin of 21% in 2015 and 23% in 4Q15, in line with guidance and reflecting strong profitability in main markets 55%
  • Backlog of €1.2 Bn, with Angola and total

21

Newp j ro ect awards in 2016 amounting to €150 Mn

Chimoio‐Espungabera road, Mozambique

  • Challenging environment, mainly in Angola, yet there are opportunities ahead
  • Major ongoing projects include Calueque dam and Sena II line rehabilitation
  • Management will continue to focus on working capital in the region, key to cash flow generation
  • Cost reduction plan ongoing, namely related to overheads and logistics
  • More narrow approach in terms of pipeline, i.e., more focused and selective in terms of cash flow generation

2015 was a year of project execution y p j

  • Turnover growth of 30% YoY to €700 Mn, although impacted by slower execution pace in Mexico in 4Q15 g g p yp
  • Mexico and Brazil showed the highest turnover growth of 53% and 35% to €281 Mn and €153 Mn, respectively
  • EBITDA more than doubled to €76 Mn, with margin improving 4 p.p. to 11%, benefiting from a strong profitability in 4Q15 due to margin improvement in Mexico and recently started works in Brazil
  • Mexico accounted to 61% of the total backlog, which amounted to €1.9 Bn in 31 December 2015
  • Project award in 2016 related to mining works in Peru will add c.€78 Mn to the region s' backlog
  • Financial closing of the concession Cardel‐Poza Rica achieved in 4Q15

Profitability expected to continue sustained

Guadalajara light rail works, Mexico Necaxa hydro plant, Mexico

  • Major projects ongoing include Guadalajara's light train project in Mexico and Vale's railway Ferro de C já j t i B il Carajás projectin Brazil
  • 2016in Mexico

Operations ongoing with hydro plants already operating in the wholesale market

will be a year of significant project execution CCGT Purchasing Power Agreement still under discussion with the Government

Resultsoverview

PAGE 3

Regional segments

PAGE 16 PAGE 26

Europe

Africa

Latin America

Final remarks

Outlook2016

  • Turnover expected to slightly increase [low single digit], with Latin America expected to show strong growth, while Europe and Africa should remain flat
  • EBITDA margin is expected to decrease on regional activity mix, as Latin America increases weight in total activity, despite the margin increase in Europe
  • Expected capex between €125 Mn to €150 Mn, from which c.€80 Mn related to EGF
  • Financial strategy will continue to be focused on de‐leveraging and diversification of funding sources
  • Continuous strong focus on working capital and free cash flow generation
  • C l ti ompletion of I dn aqua sale until end of 1H16

Final remarks

  • Notwithstanding a difficult context in 2015, the Company s' activity and profitability was reasonably sustained
  • Successful EGF integration process with very positive contribution to turnover and profitability in Europe
  • Despite commodity prices evolution, activity in Africa continued to progress with sustained profitability throughout the year
  • Latin America showed a significant backlog execution aligned with profitability improvement
  • Key focus on cash flow generation generation, namely working capital management
  • Planned asset sales ongoing will also support de‐leverage of the Company
  • Committed to continue extending debt maturities and diversifying funding sources

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 offer or invitation topurchase securities of Mota‐Engil nor any of its subsidiaries subsidiaries.

The financial information presented in this document is non‐audited.

João VermelhoDirector, Head of Investor Relations

Email: [email protected]

Maria Anunciação Borrega Investor RelationsOfficer

Email:maria.borrega@mota‐engil.pt

investor.relations@mota‐engil.pt

Rua de Mário Dionísio, 2 2796-957 Linda 957 Linda-A-Velha Portugal Velha Tel. +351-21-415-8671

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