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ACS gains 751 million euros in 2016, 3.5% more

Sales reached 31.97 billion euros, 2.7% less on a like for like basis

  • Backlog increases by 12.9% up to 66.53 billion euros
  • Net debt decreases by 53.7% down to 1.21 billion euros (0.6 times EBITDA)

Consolidated Results

Sales accounted for 31,975  million euro in 2016, representing a decrease of 2.7% on a like for like basis, this means excluding the effect of the exchange rate and the sale of renewable assets in 2015.

This decrease is mainly due to the Construction activity in Australia, affected by the termination in Australia of large liquefied natural gas (LNG) projects during the first part of 2015, as well as the drop in the production of Industrial Services in Mexico, affected by the volatility in the oil&gas prices.

Both markets showed signs of recovery in the last quarter, confirming the upward trend expected in 2017, with a significantly higher growth compared to the other markets.

The geographical distribution of sales shows the broad diversification of the Group, in which North America accounts for 46% of sales, Europe 21%, Australia 16%, Asia 10%, South America 6% and Africa the remaining 1%. Domestic sales account for 13% of the total.

Backlog at the end of December 2016 amounted to 66,526 million euros, 12.9% higher than in 2015 year-end and ensures future growth with an equivalent sales geographical breakdown. The larger proportion of the backlog in Asia Pacific is due to contract mining activity which has longer period contracts than in construction and engineering activity, as well as the recent acquisition of the Industrial Services company UGL.

Total EBITDA in 2016 accounted for 2,023 million euro, decreasing by 2.6%, on a like for like basis (adjusted by exchange rate impacts and the sale of renewable assets in Spain) Margin over sales in maintained at 6.3% , with a lower weight of the capital intensive activities like contract mining services, and productivity improvement in the remaining businesses.

Thus, EBIT increased by 6.0%, on a like for like basis, standing at 1,445 million euros, thanks to the good operating performance of the activities.

The operating improvements and the significant reduction in financial expenses contributed to an increase of 1.2% of the attributable net profit from activities, before corporate costs.

It is worth noting that the Construction activity which grew by 2.2% as a result of the transformation processes implemented in HOCHTIEF and its subsidiaries, and the increase in the stake thereof.

Net profit in Industrial Services decreased by 3.0%, not considering the sale of renewable assets in 2015, as consequence of the slowdown in the oil & gas projects in the Mexican market and the lower investments in energy assets in Spain.

Net profit from Services area increased by 14.9% and includes the operating contribution of Urbaser as discontinued operations until November 2016, whose sale agreement to a Chinese investment group was closed last December.

Net profit of the Corporation amounts to 52 million euros. The capital gains obtained from the sale of Urbaser amounting to € 357 million have offset the exceptional provisions made in 2016, calculated on the basis of most conservative assumptions. These provisions cover tax impacts related to the RDL 3/2016 approved last December 2nd, as well as probable impairments of the value of certain financial assets.

The net profit of Grupo ACS in 2016 amounted to 751 million euros, 3.5% higher than in the prior period. 

Financial Situation

Net debt of Grupo ACS accounted for 1,214 million euro, decreasing by 53.7% in the year and 75.4% since 2012. The improvement in operating cash flows from the activities and the proactive divestment policy of the Group, standing out the sale of Urbaser at year end, are key to this positive evolution of the Group’s net debt.

Net debt stands at a ratio of 0.6 times EBITDA (2016 reported) of which 202 correspond to project finance non recourse debt.

Consequently, financial expenses in 2016 were reduced by 25%, due to lower interest rates obtained after refinancing processes completed in the last years and the significant reduction in the Group's indebtedness. An additional improvement is also expected in 2017 for the same reasons.

Cash flows from operations before working capital variations amounted to 1,397 million euros in 2016, a 20.3% increase compared to 2015 thanks to the substantial improvement in financial expenses and the decrease in tax payments abroad.

On the other hand, the variation of the operating working capital has practically had a neutral effect, while net operating investments have increased by 90 million euros to reach 332 million euros, thus the net cash from operations have reached 1,045 million euros in 2016.

The total volume of investments during 2016 of ACS Group, including operating CAPEX, financial and concessionary projects, amounted to 1,545 million euros, while total divestments totaled 2,068 million euros, highlighing the Urbaser sale.

The investing activity breakdown by business is the following:

a)   Construction

Operating CAPEX in Construction business correspond mainly to the acquisition of machinery for mining contracts by CIMIC and investments in specialized equipment in North America from Dragados.
Total investment in concession projects and financial investments in Construction business reached € 942 million which practically corresponds to investments made by CIMIC for the takeover of UGL, Sedgman and Devine, as well as the treasury stock acquisition. Divestments mainly correspond to the sale of the holding stake in Nextgen.

b) Industrial Services

In Industrial Services area, financial divestments amounted to € 92 primarily corresponding to the sale of renewable assets while gross investments amounted to € 75 million.
Net operating investment in Industrial Services amounted to € 36 million.

c) Services

€ 18 million of net operating investment in Services correspond to Clece, exclusively, once the completion of the Urbaser sale on December 2016.
Therefore, financial divestments in Services correspond in their entirety to the sale of Urbaser for a value of € 1,144 million (€ 20 million difference with respect to the sale price corresponds to the dividend charged in mid year), of which a minimum of € 185 million are still pending collection.
The Group's sound financial position has allowed an attractive shareholder remuneration policy in 2016, with a dividend payment of 457 million euros and the acquisition of own shares by both ACS as part of its flexible dividend program and HOCHTIEF as part of its plan to buy treasury stock.

Results per Area of Activity


Sales in Construction accounted for 24,217 million euro, showing a decrease of 4.4% due to the termination of major LNG projects in Australia and lower domestic activity in civil works.

International sales of the Construction area amounted to 23,022 million euros which represents 95.1% of total sales in this area, being North America and Australia the most important markets.

Construction EBITDA accounted for 1,405   million euro, with a margin over sales of 5.8%, equivalent to the prior period.

Net profit reached over 311   million euros, showing a solid growth as a result of the profitability increase from HOCHTIEF and its subsidiaries after the transformation process carried out in the last years.

Construction Backlog, at the end of 2016, accounted for 55,769 million euro, 14.1% more than 12 months ago. International backlog represents 94.9% of the total in Construction.

Amongst the most important awards during this period, these are the most significant:

  • Project for the design and construction of Chesapeake Bay Bridge-Tunnel in Cape Charles (Virginia, United States)
  • Project for modernization and expansion of  Los Angeles International Airport (United Satates)
  • Project for the construction of the Tseung Kwan O - Lam Tin highway tunnel in Hong Kong (China)
  • Rehabilitation and improvement works in the Corpus Christi Harbor Bridge in the highway US-181 (Texas, United States)
  • Design and construction of the expansion of Aberdeen Harbour in Nigg Bay (United Kingdom)
  • Echowater project development that consists in an addition to the Sacramento Regional Wastewater Treatment Plant (California, United States)
  • Project for removing nine level crossings between Caulfield and Dandenong in Melbourne’s south‐eastern suburbs, as well as rebuild five railway stations (Melbourne, Australia)
  • Contract for mining services in oil sands in Athabasca region (Canada)
  • Construction of the Christchurch Hospital Acute Services Building (ASB) in New Zealand
  • Renovation and rehabilitation works for the Museum Center in Union Terminal in Cincinnati (Ohio, United States)
  • Construction of the stage 2 of the Gold Coast light rail between Southport and Helensvale (Queensland, Australia)
  • Development of Mercedes-Platz event building in Berlin (Germany)
  • Construction of the Wellsburg Bridge crossing the Ohio River in West Virginia (United States)
  • Design and construction of Naval Academy's Center for Cyber Security Studies in Annapolis (Maryland, United States)
  • Works for the renovation and enlargement of the Prince George´s Community College in Largo (Maryland, United States)
  • Design and construction of the Lohan Enhancement project to improve rail communication in Queensland (Australia)
  • Project for the construction of the segment 1 of the C-407 tolled highway (Denver, United States)
  • Construction of Tunnell Stellingen in the A7 motorwoy enlargement project (Hamburg, Germany)
  • Upgrade works in a section of Bruce Highway in Queensland (Australia)
  • Project for the construction of a new building, Tollman Hall , in the University of Berkeley (California, United States)
  • Construction of two interconnected underground combined sewage storage tunnels in Ottawa (Canada)
  • Construction of two segments of the Interstate 5 North Coast Corridor Phase 1 Project in San Diego (California, United States)
  • Reconstruction and improvements works in the Red Deer interchange in Alberta (Canada)
  • Works for the widening of two stretches of the SH-288 in Harris County (Houston, Texas, United States)
  • Construction of Amazon´s new logistic center in Barcelona (Spain)
  • Construction of the new Tennesse State Museum in Nashville (United States)
  • Construction of sections of both the N25 and N30 routes (Ireland).
  • Modernization works for the E-30 railway line (Poland)
  • Construction of the I-10 and the SR303L system traffic interchange project in Maricopa County within the City of Goodyear (Arizona, United States)
  • Development of works for the Belesar hydro-electric power plant enlargement (Lugo, Spain)
Industrial Services

Sales in Industrial Services reached 6,256 million euro, out of which 4,546  million euros (72.7%) correspond to international sales which have grown by 4.9%.

Total sales declined by 3.8% due to the sale of renewable assets during the first quarter of 2015. Not taking into consideration this effect, sales would have decreased by 3.0%, on a like for like basis as a result of a reduction in the industrial investment activity in Spain, the depreciation of the Mexican peso by 17% and the slowdown in the oil&gas projects in this country.

EBITDA accounted for 630 million euro, with a decrease of 3.0% excluding the sale of renewable assets in 2015. Net Profit stood at 305 million euro, 3.0% lower than in the prior year due to the lower activity in the period.

Industrial Services has increased its backlog by 4.0% up to 8,762 million euro at the end of 2016, equivalent to 17 months of production, being 77.7% from international contracts. The most important awards of the period are:
  • EPC project for various transmission lines 500kw with total length of 3,376km in Minas Gerais, Bahía, Ceará, Piauí y Maranhao (Brazil)
  • Contract for the development of engineering, supply of equipment and materials as well as the construction, including erection, commissioning and start-up for a new fertiliziers complex which includes a Sulphuric Acid Plant, and a DAP & TSP Plant (Egypt)
  • Manufacture, assembly, testing, load-out and seafastening of 74 modules for the ethylene cracking unit for Franklin new petrochemical complex (Pennsylvania, United States)
  • EPC project for the construction of Ras Al Khaimah desalinisation plant with a capacity of 100,000 m3/day (United Arab Emirates)
  • Maintenance of networks and distribution of medium voltage and low voltage  in several areas of Andalucia, as well as specific work in tension in Cataluña (Spain)
  • Fabrication of 4 substation jackets for the Hornsea offshore wind farm project (Denmark)
  • EPC project fot the construction of the geothermal energy plant of Las Pailas II with an installed capacity of 55MW (Costa Rica)
  • Works for electromechanical installations in the new tyre plant of Michelín in Guanajuato (Mexico)
  • Contract for the development of Pastorale windfarm with an installed capacity of 53MW (Uruguay)
  • EPC project for the construction of Tuas 3 desalinisation plant with a capacity of 136,000 m3/day (Singapore)
  • Contract for the gas services distribution for Gas Natural in Chile
  • Construction of a photovoltaic plant with an installed capacity of 33,4MW in Fukushima (Japan)
  • Works for traffic control systems installation in Al Muntazah Street (Qatar)
  • Construction of Hokota, Hayato and Kagoshima photovoltaic plants with a total installed capacity of 39 MW (Japan)
  • Works for traffic control systems installation, signalling and lighting of the I-95 phase 3 (United States)
  • Construction of container yard 6 south at Bayport terminal in the port of Houston (United States)
  • Maintenance services of potable water systems and sewerage systems in Lima (Peru)
  • Construction and equipment of the new hospital of the city of Manta (Ecuador)


Environment accounted for sales of 1,538 million euro, once excluded the activity of Urbaser, showing an increase of 2.2%.

EBITDA in Environment accounted for 78 million euro with a margin over sales of 5.0%, 10 b.p higher than last year.

Net Profit accounted for 84   million euro growing by 14.9% and includes the contribution from Urbaser of 57 million euros as discontinued operations

Backlog accounts for 1,995 million euro, equivalent to 16   months of activity. Amongst the most important awards of the period are:

  • Contracts for home care services in various towns
  • Contracts for the facility management of various residences for the elderly in various municipalities
  • Contracts for cleaning services in public buildings and facilities such as hospitals, health centers, police facilities, etc
  • Contract for cleaning airplains for the airways company Iberia
  • Cleaning service contract for high-speed trains of Alstom (Spain)
  • Freight service contract at the airport of Madrid (Spain)