ACS Group obtained a net profit of 668 million euros in 2022, up 66%

• Sales reached € 33,615 million, growing by 20.8% compared to the previous year
• EBITDA stood at € 1,747 million, up 9.4%
• Backlog reached record highs growing by 8.3% to 68,996 million
• Net cash stood at € 224 million, after allocating more than € 1,500 million for strategic investments (CIMIC’s takeover bid and HOCHTIEF’s 15% acquisition)

1.  Consolidated Results

ACS Group’s net attributable profit in 2022 amounted to € 668 million, 66.0% more than the previous year, after deducting in 2021 the contribution of the Industrial Services activity sold to Vinci.

All activities showed a good operating performance, supported by the increased stake in Hochtief and the recovery of traffic in Abertis. In detail:

• Construction’s Net Profit grew by 28.3%, to € 350 million.
• Concessions activity, which included Abertis and Iridium, obtained a Net Profit of € 194 million, up by 16.1%.
• The Services area, developed by Clece, obtained a Net Profit of € 27 million, down by 6.4% due to an increase in taxation. The profit before taxes grew by 5%.

The Corporation’s result in 2022 included a positive impact from the change in the fair value of hedging instruments linked to ACS shares amounting € 56 million net of taxes (25%) and provisions made in the period (€ 67 million) as well as the revaluation of the earn-out from the sale of Industrial Services (€ 65 million).

1.  Operating Results

EBITDA reached € 1,747 million, 9.4% higher than the previous year, driven by Abertis’ contribution, which amounted to € 167 million (15% higher).

EBIT stood at € 1,106 million, 2.0% higher than the previous year, affected by the lower contribution of energy assets and business mix variations in the Construction activity, with a greater contribution from construction management activities in North America, which has lower margins.

2.    International Diversification

ACS Group sales in 2022 amounted to € 33,615 million, up 20.8% compared to the previous year, with all activities showing a solid performance; adjusted by exchange rates, sales grew by 11.6%.

Backlog as of December 2022 stood at € 68,996 million, growing by 8.3% (+5.4% adjusted by exchange rates). 

3.    Results per Areas of Activity

3.1.  Construction

Sales in Construction amounted to € 31,433 million, an increase of 21.5% compared to the previous year, thanks to the good performance in both Dragados and Hochtief, as well as for the appreciation of the US dollar. Adjusted by exchange rate, sales grew by 11.7%.

Activity in North America, which represented 66% of total Construction sales, showed a solid recovery, with sales reaching € 20,716 million, up 26.4% compared to the previous year (+12.8% adjusted by exchange rate). Meanwhile, sales in Asia Pacific amounted to € 7,294 million, thanks to the dynamism of the Australian market, which grew by 18.5%. Europe also grew by 3.2% supported mainly by the Polish, Czech, Spanish and UK markets.

International sales reached € 30,015 million, representing 95% of the Construction activity’s total turnover, with North America and Australia being the most important markets. Sales in Spain represented 4% of the total.

Backlog as of December 2022 amounted to € 66,084 million, 95% international, with an 8.6% growth (5.6% adjusted by exchange rate).

Construction’s EBITDA accounted for € 1,389 million, with a 4.4% margin on sales.

The Construction business obtained a Net Profit of € 350 million, 28.3% more than the previous year.  

3.2.  Concessions

Concessions reported a Net Profit of € 194 million compared to € 167 million in the previous year, improving both Abertis’ and Iridium’s performance.  

Abertis

The traffic growth trend is consolidated, exceeding pre-pandemic levels in practically all the countries in which Abertis operates, with an annual increase in ADT of 8.2%. This recovery in average daily traffic, as well as the contribution of the new concessions acquired, rose revenues to € 5,102 million (+5.1%) and EBITDA to € 3,536 million (+5.5%), offsetting the perimeter exclusion of Acesa, Invicat and Sol. Abertis’ Net Profit before amortization of the PPA (“Price Purchase Allocation”) and the financial costs of the hybrid bonds amounted to € 668 million, and the dividends paid reached € 602 million.

In 2022, Abertis’ had a € 143 million contribution to ACS’s Net Profit, up € 26 million compared to the previous year.

Iridium

On its side, Iridium, the Group’s concession development company, obtained a Net Profit of € 51 million, with a higher contribution from recently initiated concession projects.

Iridium currently has a portfolio of 48 assets, including highway concessions, railways and other social facilities, with an invested capital by ACS higher than € 1,600 million.

Among these assets is the SH-288 highway, located within Harris County in Houston (Texas), with four new managed toll lanes extending 10.3 miles along its median. This concession was awarded in 2015 for a period of 52 years and it opened to traffic in November 2020, operating successfully since then.

Last January 17, 2023, Iridium closed the acquisition of 56.75% stake of Blueridge Transportation Group, concessionaire company of the SH-288 highway, for € 1,064 million. Iridium currently holds 78% of this company.

Among the main data recorded for SH-288 in 2022, it is worth highlighting revenues amounted to US$ 74 million, up 57% compared to the previous year, and EBITDA reached US$ 54 million. Net profit from the concession exceeded US$ 13 million, 77% higher than in December 2021. In January 2023, an average 16% rate increase was applied, with no significant traffic variations.

3.3.  Services (CLECE)

Services to citizens division’s sales amounted to € 1,819 million, up 10.7% over the same period of the previous year while maintaining operating margins against the comparable period, already normalized following the impact of the pandemic.

Net profit amounted to € 27 million, 6.4% lower than the previous year due to higher taxation as a result of the non-application of tax deductions. Profit before taxes grew by 5%.

Services’ current backlog reached € 2,912 million, equivalent to 19 months of activity, 1.0% more than in the previous period. It is worth highlighting the weight it is gaining in the UK, where the backlog at year-end grew by 34.7% to € 272 million, thanks to the integration of new subsidiaries.

4.  Financial Situation

The ACS Group held a net cash position of € 224 million at year-end 2022. This solid financial position was supported by the strong operating cash generation, which exceeded € 1,300 million. Net cash decreased by € 1,785 million, mainly after the investment in strategic transactions: the takeover bid for 21.4% of CIMIC by HOCHTIEF and the acquisition of an additional 15.1% in HOCHTIEF by ACS.

Total remuneration to the Group’s shareholders amounted to € 1,057 million, of which € 531 million corresponded to the scrip dividend paid by ACS to its shareholders, € 431 million to the acquisition of treasury stock, and € 95 million in dividends paid to minority shareholders, mainly to HOCHTIEF.

5.  Investments / divestments

During 2022, the ACS Group has allocated € 1,528 million to strategic investments, corresponding to:

(1)  The acquisition of 22% of Cimic through a takeover bid for a total amount of € 985 million, partially financed with a capital increase, of which € 61 million corresponded to Hochtief’s minority shareholders, resulting in a Net Value of € 924 million; and

(2)  The acquisition of 15.1% stake in Hochtief for € 604 million.

In addition, the Group invested € 208 million in equipment and machinery for the development of the Construction and Services businesses and allocated € 202 million to the payment of operating leases.

The rotation of concession assets and projects has led to a net divestment of € 23 million, broken down as follows:

• An investment of € 244 million in the Construction area, mainly in the in the development of joint ventures in America.
• Iridium net financial divestments reached € 86 million including the sale of 75% of its stake in Windsor Essex in Ontario, Canada.
• Clece invested € 29 million in the acquisition of services for citizens’ businesses in the United Kingdom.
• The SCE’s energy assets generated € 353 million from the sale of renewable assets, mainly the 25% of the photovoltaic plants in Spain, 75% of which and the associated pipeline were sold to Galp in 2020; additionally, € 143 million euros were invested in energy projects.