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ACS Net profit amounted to € 915 million in 2018, an increase of 14.1%

27-02-2019
  • Sales reached € 36,659  million, increasing by 5%
  • Backlog stood at € 72,223  million, +7.7% more
  • EBITDA rose by 6.9%, reaching € 2,437  million
  • ACS Group eliminated its Net debt

 Consolidated Results
ACS Group sales in 2018 accounted for € 36,659  million, representing an increase of 5.0% and 9.7% in comparable terms, that is, not taking into consideration the effect of the average exchange rate variations due to the revalorization of the euro against foreign currencies in the last twelve months. This positive trend in all activities is mainly backed by the growth of the North American, Australian and Spanish markets.
The geographical distribution of sales showed the broad diversification of the Group, with North America accounting for 45% of sales, Europe 21%, Australia 20%, Asia 7%, South America 5%, and Africa the remaining 1%. Sales in Spain accounted for 14% of total sales.
82% of total sales is mainly focused in six countries: United States accounting for 39% of total, Australia (20%), Spain (14%), Canada (4%), Mexico and Germany, both coming to 3%. The reaming European countries reached 4% of total sales.
Backlog at year-end amounted to € 72,223  million, growing by 7.7%, and by 8.6% in local currency when adjusted to the exchange rate. To mention, the good performance in the North American markets, both in the United States and Canada, with a year-on-year growth rate over 20% and 30%, respectively.
Backlog’s geographical distribution is similar to current sales.
By country allocation, just as sales, United States and Australia still remained as the countries which contributed the most. 
Total EBITDA accounted for € 2,437 million, increasing by 6.9%, slightly over sales increase, placing this margin in 6.6%, 12 b.p. higher than last year. In comparable terms, that is to say, adjusting by the exchange rate impact, EBITDA increased by 13.0%.
Likewise, EBIT reached € 1,791  million, after increasing 10.1%, 16.6% in a like to like basis. Sales margin rose up to 4.9%, 23 b.p. higher than 2017.
The Group’s attributable net profit stood at € 915 million, meaning 14.1% of nominal growth. This growth rose up to 18.8% if the exchange rate variation impact was to be excluded.
Construction Net profit grew by 6.1%, 10.5% in comparable terms, with a solid operating performance across activities. This profit does not include Abertis’ indirect contribution through HOCHTIEF’s 20% stake since June. When including this contribution, reported Net profit rose by up to € 469 million.
Industrial Services Net profit grew by 2.0%, 8.5% in a like to like basis, underpinned by the boost of renewable energies investment in the Spanish market.       
Likewise, Net profit in Services reached € 37 million just as in 2017 which included capital gains coming from Sintax’s sale. Clece’s Net profit grew by 10.1%.
ACS Group’s Net profit in 2018 included Abertis’ net contribution since June, which amounted to € 175 million (€ 116 million directly coming from ACS and included in Corporation, and € 59 million indirectly coming through HOCHTIEF, after deducting minority interests). In 2017 non-recurrent extraordinary results were included in a similar amount, mainly derived from Urbaser’s sale.  

Financial situation
At year-end ACS Group has completely eliminated its net debt, reporting € 3 million positive net cash balance. This figure implies an improvement of € 156 million since last year, despite its over € 1,500 million total net investment, including Abertis’ acquisition. Not considering project finance debt, without recourse to shareholders, the Group’s net cash position stood at € 120 million.
The solid generation of funds flow from operations has contributed to the Group’s positive net debt evolution, which grew 4.1%, reaching € 1,550 million.
Besides that, ACS Group’s equities have been reinforced by more than € 2,400 million owing to the sale of 16.85 million shares in HOCHTIEF to Atlantia, at a given price of € 143.04 per share, last October 29th. At the same time, ACS underwrote a capital increase of 6.35 million shares at same price to place its stake in HOCHTIEF at 50.4%. At 2018 year-end ACS Group Net worth reached over € 6,000 million, 16.9% compared to 2017 year-end.
 
Investment
ACS Group total investment volume in 2018  amounted to € 1,538 million, of which € 1,041 million correspond to financial investment and divestments, among which Abertis’ acquisition is grouped, and concession projects.  
Net Operating CAPEX reached € 497 million and largely corresponded to the acquisition of machinery for the Group’s several projects in mining, civil works, and industrial facilities.  
Financial investments are detailed as follows:
The Construction area includes Abertis’ 20% acquisition on behalf of HOCHTIEF, worth € 1.407 million, and € 125 million related to net investment in concession projects in Chile, Canada, United States, Germany, Australia and United Kingdom.
Industrial Services invested € 442 million in several renewable energy projects in Spain, United Kingdom, South Africa, Mexico, and Peru, as well as transmission lines in Brazil.  Divestments reached € 386 million, mainly due to the sale of its stake in SaetaYield (€ 241 million) and different wind plants in Latin America.
Clece invested € 13 million in the acquisition of several small services companies in Spain and United Kingdom.
Corporation invested € 2,081 million in the acquisition of 30% stake in Abertis, while divestments related mainly to the sale of a minority stake in HOCHTIEF to Atlantia, worth € 2,410 million, and to the partial sale of MásMóvil worth € 410 million. 

Results per Area of Activity
Construction
Sales in construction in 2018 accounted for € 28,785  million, showing an increase of 5.7%,  and which rose up to 10.7% when excluding the exchange rate variation impact.
ACS Group’s international sales in the Construction area amounted to € 27,332 million, which represented 95% of total sales in this area, being North America and Australia the most important markets. Domestic sales represented 5% of total.
Construction EBITDA accounted for € 1,773  million, with a sales margin of 6.2%, after growing 9.4% in line with sales increase, 15.4% in comparable terms.
Net profit reached over € 469  million, showing an increase of 21.4%, supported by a solid operating performance across companies and the indirect contribution from Abertis via HOCHTIEF. Excluding this contribution, Net profit grew by 6.1%.
Construction Backlog, by December 2018, rose up to € 59,350 million, growing 6.9%; 7.6% after being adjusted to the exchange rate. This growth is based on the good performance in the North American and Australian markets. International Backlog represented 96% of total volume in the Construction area.
Amongst the most important awards achieved during 2018, these are the most significant:

  • Project for the construction of the WestConnex M4-M5 Link Rozelle interchange  (Sydney, Australia)
  • Construction of the new international bridge Gordie Howe  between Windsor (Canada) and Detroit (United States), as well as the ports of entry in each country (PPP)
  • Construction of the new light railway line in Montreal, Canada. (PPP)
  • Project for the construction of the stage 1 of the Parramatta light rail project (New South Wales, Australia)
  • Construction  of 6.5 km of automated people mover at the Los Angeles International Airport (United States) (PPP)
  • Contract for the execution of hydro generating station and spillways civil works on the Peace River in northeast British Columbia (Canada)
  • PPP project for the Waikeria Corrections and Treatment Facility construction (New Zealand)
  • Building  of the new headquarters of the California Natural Resources Agency in Sacramento (United States)
  • Construction of a new 12 story hospital tower on the main campus of MetroHealth Medical Center in Cleveland, Ohio (United States)
  • Upgrade works in the Norther Road infrastructure between Luddenham and Glenmore Park in Sydney (Australia)
  • Rehabilitation and improvement works of the Coney Island Hospital in New York (United States)
  • Development of water and wastewater infrastructure in Tasmania (Australia)
  • Contract for mining services at  QCoal Northern Hub  in Bowen Basin (Queensland, Australia)
  • Construction of the new Finch West light railway line in Toronto, Canada
  • Extension of the contract for mining services in Arthur coal mine (Australia)
  • Extension of the contract for mining services in the El Encuentro open pit (Chile)
  • Works for Australia's National Broadband Network consisting of a construction of primarily fiber to the curb technology (FTTC) in different areas of Melbourne, Brisbane and Sydney (Australia)
  • Works for the construction of metropolitan railway infrastructure Metro Tunnel in Melbourne (Australia)
  • Works for the construction of the tunnel and infrastructure of the N103 highway within the North-South Transportation Corridor project in Singapore
  • Contract for extension of Copenhagen´s underground network to Sydhaven (Denmark)
  • Improvements WORKS along I-16 between I-95 and I-516  which includes widening from 4 lanes to 6 lanes, and reconstruction of the I-16 at I-95 interchange to increase operational efficiency (Georgia, United States)
  • Contract extension to provide mining services at Caval Ridge coal mine (Queensland, Australia)
  • Project for the design and construction of 22 km of  the S-6 bypass between Lebork-Trojmiasto in Poland
  • Project for the construction of the high-speed railway line between  Mondragón and Elorrio (Guipúzcoa, Spain)
  • Three-year contract extension to provide coal mining services in Wahana mine and Satui mine (Indonesia)
  • Contract for the construction of different mining infrastructures for the South Flank project in the Pilbara region (Australia)
  • Project for the construction of the new bridge to replace the old  North Washington Street Bridge (Washington, United States)
  • Contract for  mining services at the Rocky's Reward nickel mine (Australia)
  • Construction of A-1 express road in the section between Lodzkie border-Razasawa  (Poland)
  • Repair and  rehabilitation works in Catskill aqueduct in New York (United States)
  • Widening works for SR 821 (HEFT) from I-75 to south of Miramar Parkway, in Miami-Dade and Broward  Counties (Florida, United States)
  • Design and construction of a replacement Hospital at the James Haley Veterans Hospital in Tampa (Florida, United States)
  • Three-year contract extension to provide coal mining services in Dawson South mine (Australia)
  • Extension of the contract for mining services at Leinster Underground Mine in Western (Australia)
  • New 15-month contract to extend the scope of mining services at Mt Artur coal mine (Australia)
  • Asset management program agreement to support the Royal Australian Navy's Landing Helicopter Dock and Landing Craft vessels (New South Wales, Australia)
  • Construction of a 28km four-lane expresswayin the provinces of Cavite and Laguna in the Philippines
  • Contract for services to operate and maintain the Mount Pleasant and Byerwen coal handling and preparation plants (Australia)
  • Construction of the new underway station of the Munich urban rail (Germany)
  • Extension of the contract for mining services in the Curragh coal mine (Queensland, Australia)
  • Project for the construction of the West Park Institute including sports facilities, three-story main building, administration building and ancillary buildings in Roseville (California, United States)
  • Construction of a new emergency vent plant at Forsyth Street for the New York´s subway (United States)
  • Contract extension to provide project, engineering, and maintenance services to ATOM company ( industrial equipment supplier) in Australia
  • Modernization works at Terminal 2 of Fort Lauderdale-Hollywood International Airport (Florida, United States)
  • 30-month contract extension to provide coal mining services in Senakin mine (Indonesia)
  • Project for the design and construction of 17km of S61 road in Poland
  • Construction of a new  ambulatory care facility for Denver Health (Colorado , United States)
  • Contract to build three additional segments of the Winston-Salem Northern Beltway in North Carolina (United States)
  • Works for the construction of the A-67 highway in the section between Sierrapando-Barreda and improvement of the links of Sierrapando, Barreda and Torrelavega (Cantabria, Spain)
  • Design, construction, testing, and commissioning of a new Metrorail Station and ancillary facilities located at Potomac Yard in Alexandria City (United States)
  • Contract to operate and maintain the Lawn Hill processing plant, concentrate pipeline and Karumba Port facility in Queensland (Australia)
  • Extension of the contract for mining services in Prominent Hill (Australia)
  • Works for the construction of Palmas Altas´s mall in Sevilla (Spain)
  • EPC project of the coal handling and preparation plant  at the greenfield Olive Downs coal mine (Queensland, Australia)
  • Building of  Thomas Comprehensive Cancer Care Center in Cincinnati (Ohio, United States)
  • Construction of Quellón Hospital with a capacity of 57 beds in the Chiloé province (Chile)
  • Improvement and enlargement works at Isabela Lake dam (California, United States)
  • Maintenance contract for Western Australia road network (Australia)
  • Design and construction of the Gunyama Park Aquatic and Recreation Centre in Sydney (Australia)
  • Works for the Ancud´s Hospital construction with a surface of 18,876 sqm in Chile
  • Works for the execution of the A-21 highway between Sigüés and Tiermas (Zaragoza, Spain)
  • Construction of a  new seven story tower with capacity for  126 bed inpatient for the Baylor Scott & White Medical Center in Irving (Texas, United States)
  • Improvement works in SR93 and SR60 (Florida, United States)
  • Building of Zaragoza Tower with 285 apartments (Spain)
  • Construction of the Benito Menni healthcare complex in Ciempozuelos (Madrid, Spain)
  • Contract for improvement works on  the City of South San Francisco's  Water Quality Control Plant Wet Weather and Digester  in California (United States)
  • Enhancement works for a depot in Exeter (United Kingdom)
  • Project for the enlargement of the Mediterranean railway corridor between Martorell and Castellbisbal (Barcelona, Spain)
  • Works for the construction of the new ICL Cargo Terminal in the Port of Barcelona (Spain)
 Industrial Services
Sales in Industrial Services reached € 6,385 million, increasing by 2.0% and 6.7% when adjusted to the exchange rate. The solid recovery of the domestic market and the strong growth in Latin American countries were the main reasons for this positive change.
EBITDA accounted for € 645  million,  1.8% more than in the same period 2017, with a sales margin of  10.1%.
Equally, Net profit reached € 325 million, 2.0% higher compared to last year.
Industrial Services increased its Backlog by 6.0%  up to € 9,845  million in 2018 year-end, equivalent to 19  months of production, being 74% international contracts. Excluding exchange rate variations, Backlog grew by 12.2%. Amongst the most important awards achieved during 2018, it can be found:

  • Construction of a 300 MW Combined Cycle plant of natural gas, integrated with a seawater reverse osmosis desalination plant located in Duqm (Oman)
  • EPC contract for the construction of the project of Vale Azul II sa natural gas thermoelectric power plant  (Rio de Janeiro, Brazil)
  • Contract for two Jackets for the Tyra Future Development Project in the North Sea  (Denmark)
  • Project for the upgrade and rehabilitation of the Qairokkum hydropower plant  in Tajikistan
  • Development of the Kurayoshi photovoltaic park with an installed capacity of 42MW (Japan)
  • Works for the development of Mexsolar I and II photovoltaic plants with an installed capacity of 70.35MW (Mexico)
  • Works for the installation of the intelligent transport system and operation and maintenance of the control system for the M4-M5 project (main tunnel) within the WestConnex in Sydney (Australia)
  • EPC project for the construction of Kesennuma photovoltaic plant in Japan
  • Remedial works to the Changuinola hydroelectric plant (Panama)
  • Contract for the service of maintenance and execution of new work in the period 2019-2021 for Endesa substations in different regions of Spain
  • Contract for the implementation of the traffic systems of the Stockholm bypass: a beltway that includes 55 kilometers of tunnel  (Sweden)
  • Contract for the management of the electronic toll collection subject to performance standards in the highway network granted to Mexico’s National Infrastructure Fund (Fonadin)
  • Services for works and support for the maintenance of medium and low voltage networks in Argentina
  • Contract for the operation and maintenance of the sewerage network and complementary facilities in Madrid (Spain) 
Services
Sales in Services area accounted for € 1,505 million, which only corresponded to Clece, rising by 4.1%.
EBITDA accounted for € 80 million, growing by 8.5%. Margin over sales stood at 5.3%, 20 b.p. better than in 2017.
Net profit reached € 37 million.
Services Backlog reached € 3,028 million, equivalent to 24 months of activity.
Amongst the most important awards achieved during 2018, these are the most significant:
  • New award for the management of the retirement homes of Oleiros, Emilia Pardo Bazán and Plaza Donoso Cortés (A Coruña, Spain)
  • New contract for cleaning services in the east area of Spain for the railway company Renfe
  • New award of the cleaning service contract for local buildings and state agencies located in the Community of Madrid (Spain)
  • Contract for the integral management of the retirement home of San Cristóbal de la Laguna in Tenerife (Spain)
  • Extension of the contract for the cleaning service in different hospitals in the Valencian Community (Spain)
  • New contract for management and exploitation of the Areeiro retirement home (Lisboa, Portugal)
  • New contract for facility management of a retirement home in Huelva (Spain)
  • Renewal of the contract for cleaning services anddisinfection, disinsection and rodent control  in the facilities of the Ministry of the Interior (Spain)
  • Extension of the contract for the cleaning service in different hospitals in  Canarias (Spain)
  • Extension of the service contract for Home Help in the Diputación de Jaén (Spain)
  • New contract for the management of of a retirement home in Salamanca (Spain)
  • Contract for the management of the retirement home of the Avda Carondelet in Madrid(Spain)
  • Expansion of the cleaning service contract in facilities of the Ministry of Defense (Spain)
  • New contract for the home help service in Hampshire County Council (UK)
  • Renewal of the service contract for home help in Seville (Spain)
  • Contracto for the management of a retirement home in Cerdanyola(Spain)
  • Extension of the contract of the Home Help Service in Barcelona in Sant Andreu and Sant Marti (Spain)
  • New contract for the home help service in London Borough of Candem Care and Retablement (London, United Kingdom)
  • Extension of contract for  home help service for municipalities with less than 20,000 inhabitants in Almería (Spain)
  • Renewal of maintenance contract for green spaces and urban trees in Melilla (Spain)
Abertis
Abertis’ contribution to ACS Group profit has been accounted as Equity Method since June 2018, and it rose up to € 175 million, from which € 116 million corresponded to ACS direct stake, and the remaining € 59 million to the indirect stake through HOCHTIEF, once minority interests are deducted.
Abertis’ Net profit during 2018 stood at € 1,681 million, 87% higher compared to last year due to the positive impact of Cellnex Telecom sale (€ 605 million in capital gains, with no impact in ACS results). 2018 comparable Net profit grew by 15%.
Along the year, activity in Abertis’ highways was reported as positive due to the solid growth of traffic rates registered in Spain (+3.3%), Chile (+3%), France (+1.7%), and Italy (+1.2%). Revenues reached € 5,255 million, meaning 5.3% in comparable terms.
EBITDA during 2018 accounted for € 3,549 million (+3%), boosted by the implementation of efficiency improvement measures and the optimization of operating expenses, growing by 7% in comparable terms.
Abertis’ consolidated net financial debt, by December 2018, stood at € 12,538 million, equivalent to 3.5 times the year’s EBITDA. This figure does not include the almost € 9,800 million debt derived from the acquisition of 98.7% of the company.
Finally, Abertis’ Board of Directors suggested the Shareholders’ Annual Meeting a € 875 million dividend distribution charged to 2018 results, bound to credit rating evaluation.