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EXECUTIVE SUMMARY Integrated Report 2016
EXECUTIVE SUMMARY
Integrated Report
2016
How do you rate the results obtained in 2016?
ACCIONA’s results are very positive from a strategic viewpoint and demonstrate the strength of our business model and its capacity to generate value.
We believe that 2016 consolidated the change in the cycle, which began in 2015, towards a new stage of growth that, without relinquishing rigorous control over the balance sheet, will support greater levels of investment during the next few years.
From the economic and financial viewpoint, despite weak electricity prices in Spain and the deconsolidation of ACCIONA Windpower, EBITDA increased slightly compared to last year thanks to the growth experienced by the Infrastructure division. This was due to the improvement in the
international construction business and full consolidation of ATLL, as well as the good results from the company’s other businesses.
Financial leverage improved substantially compared to 2015, keeping us within the comfort range targeted by the company and consolidating the trend of continuous improvement in our balance sheet.
This improvement in debt ratios was accompanied by strong progress in transforming the company’s funding model. Transactions during the year to refinance project debt with corporate debt have given us greater flexibility in managing debt and cash flow and will significantly reduce capital costs, with sizeable savings as of 2017.
Intensive investment was one of the highlights of the year, as net investing cash flow amounted to around
720 million euros. This was led by the Energy division and the delivery of new installed capacity in Chile and the United States, as well as investment by the Infrastructure division in executing major projects in international markets.
So, to summarise, these results point to a very positive outlook for our business and enable us to offer our shareholders an attractive and durable dividend.
How will ACCIONA and its main businesses evolve in the short term?
We are looking forward to 2017 and beyond with prudent optimism in a favourable international context. This will feature moderate growth in EBITDA, driven by the Energy and Infrastructure businesses, which will continue to seek new long-term opportunities in strategic and profitable markets.
Capital expenditure will be kept stable
EBITDA (million euros) Revenues (million euros) 2015 2016 Chg. (%)
Energy 2,719 1,796 -33.9%
Infrastructure 3,306 3,611 +9.2%
Other businesses 613 668 +8.9%
Consolidation adjustments -95 -98 +3.3%
TOTAL REVENUES 6,544 5,977 -8.7%
2015 2016 Chg. (%)
Energy 897 740 -17.5%
Infrastructure 167 321 +91.8%
Other businesses 113 131 +16.2%
Consolidation adjustments -3 0 n.m.
TOTAL EBITDA 1,174 1,192 +1.5%
EBT (million euros) 2015 2016 Chg. (%)
Energy 198 107 -45.8%
Infrastructure 90 122 +35.9%
Other businesses 43 85 +99.1%
Consolidation adjustments -1 -3 130.1%
Ordinary EBT 330 312 -5.3%
Extraordinaries -11 95 n.m.
TOTAL EBT 319 408 +28%
2016 consolidated the change in the cycle, which began in 2015, towards a new stage of growth
that, without relinquishing rigorous control over the balance sheet, will
support greater levels of investment during the next few years.
KEY FIGURES
INTERVIEW WITH THE CHAIRMANJosé Manuel Entrecanales, Chairman of ACCIONA, discusses the way in which the company generates value in the medium and long term.
with respect to 2016 to take advantage of these new opportunities, maintaining proactive management of the balance sheet without compromising the bottom line.
Performance of the energy business in Spain will be determined by the evolution of electricity prices and the increase in regulatory revenues following the latest triennial review.
In the international arena, ACCIONA’s success in the auctions for new capacity and in the corporate PPA market guarantees significant profitable growth, with a total of almost 750 MW to be built in the next few years. This will require another round of investment focused strategically on technological innovation.
With respect to infrastructure, short-term forecasts also remain optimistic in line with the level of awards in recent years, which have expanded the division’s pipeline, as well as the promising start to 2017.
Our efforts will also focus on strengthening margins in the international business to consolidate the change of cycle begun in 2016.
How have Other Businesses evolved over time and what is the forecast for them?
We are often asked for data on the present and future contribution by the company’s Other Businesses. Historically, ACCIONA has supplemented its activity in the areas of renewable energy and infrastructure development with a significant presence in other sectors, such as shipping, real estate, finance and wine production, exploiting business opportunities and helping diversify our offer.
Although these businesses are not comparable in size or turnover with ACCIONA’s more strategic businesses, they represent a great opportunity to
generate value, through organic growth or their potential to for enhanced management, not to mention the scope for mergers and acquisitions. Managing and materialising this value is a priority for ACCIONA.
These businesses played an important role in the Group’s results in 2016, with double-digit growth, contributing over 10% of Group EBITDA with very limited investment and debt needs.
What value can the company contribute in the future?
We are a company with a long-term vision in activities that will continue to expand in the future.
Growing population and rising living standards will drive demand for new infrastructure, mainly energy-related, and create new needs associated with the growth of cities. Moreover, no one now doubts that renewable energies are the key to tackling climate change and containing the growth in greenhouse gas emissions.
In this context, ACCIONA is fully able to respond to global challenges through innovative renewable energy and infrastructure projects, leading the transition to a carbon-free energy model while contributing to better living standards for the communities in which operate.
This will be possible thanks to the more than 32,000 professionals who form part of the company and share our commitment to sustainable development.
Meanwhile, our long-term vision drives our constant focus on innovation as a synonym for sustainability, helping us build the immediate and longer-term future.
This across-the-board commitment to sustainable development is expressed in our Sustainability Master Plan 2020,
which crystallises our aspirations in the form of objectives for the whole organisation and each of the business lines. In this respect, I am delighted to be able to say that in 2016 we achieved our most ambitious goal: to become carbon-neutral.
Finally, our positioning as a sustainable company is recognised thanks to our active participation in international forums and debates, to which we turn constantly in the quest for joint solutions – public and private – to the challenges that arise in the course of our activities.
ACCIONA worldwideThe Company, present in over 40 countries and five continents, has pursued the internationalisation of its activities.
Key Indicators 2016 Spain Europe (excluding Spain)
USA, Canada & Mexico
Central & South America Africa Asia & Oceania
Revenues (€m) 3,087 705 740 673 182 590
Energy produced (GWh) 12,847 1,042 4,837 388 526 1,191
Water managed (hm3) 535.2 145.2 1.3 14.4 20.6 55.7
R&D&I figure (€m) 55.2 35.9 12.1 34.3 25.8 30.6
Average headcount at year end 19,908 4,223 2,468 5,141 266 480
Mexico
Peru
Panama
Costa Rica
Ecuador
Nicaragua Trinidad & Tobago
Canada
USA
Dominican Republic
Chile
Brazil
Colombia Philippines
Croacia
New Zealand
Australia
India
South Africa
Gabon
Egypt
UAE
Saudi Arabia
Oman
Qatar
Morocco
Algeria
Portugal Greece
Croatia
Italy Turkey
Romania Hungary Poland
Germany Austria UK
Denmark Sweden
The Netherlands
Norway
Spain
Energy
Construction
Concessions
Trasmediterranea
Real estate
Other businesses
Water
Services
Industrial
© ACCIONA S.A. All rights reserved.
Avda. de Europa, 18Parque Empresarial La Moraleja28108 Alcobendas(Madrid). Spain
Twitter: @ACCIONA _EN
facebook.com/acciona _en
linkedIn.com/company/accionawww.acciona.com
With over 20 years of experience throughout the value chain and a business model based on the long term, ACCIONA Energy is today one of the best positioned companies in the world to materialise the commitment signed under the Paris Agreement on climate change, ratified by more than 140 parties1 so far.
Positive balance in terms of installed capacity
ACCIONA Energy has consolidated its growth in terms of total installed capacity with 8,913 MW in operation in 2016.
During the last 12 months, the backlog has increased by 294 MW, 3.4% more compared to the capacity installed up to 2015. We incorporated 246 MW of photovoltaic in Chile, 93 MW of wind power in the US and another 3 MW in India2.
Future growth guaranteed
During 2016, ACCIONA Energy assured significant and profitable growth in its project pipeline for the years to come as a result of the success obtained in the electricity auctions it participated in, in Chile, Mexico and Australia, with a total of more than 650 MW to be built during the 2016-2019 period.
ACCIONA ENERGYContributing to a sustainable energy model.
1 http://unfccc.int/paris_agreement/items/9444.php
2 During the year, 48 MW was decommissioned in Greece.
Assets in operation and approved (MW)Operating 9 GW in 14 countries; almost 1 GW to build in 2017 (62% onshore wind, 38% solar photovoltaic)(As of April 2017)
South Africa 232Wind 138Solar PV 94
Portugal 165Wind 119CSP 46
India 164Wind 89Wind (75)
Australia 435Wind 303Wind (132)
Spain 5,950Wind 4,748Hydro 888CSP 250Biomass 61Solar PV 3
USA 785Wind 721CSP 64
Mexico 1,064Wind 557Wind (168)Solar PV (339)
Chile 474Wind 45Solar PV 246Wind (183)
Costa Rica 50
Poland 101
Croatia 30
Hungary 24 Canada 181
Italy 156
Where technology not stated, wind power. (Projects under construction/approved)
8,913 MWTOTAL INSTALLED
CAPACITY2015
8,619 MW
20,830 GWhTOTAL PRODUCTION
2015
20,875 GWh
€1,796MREVENUES
2015
€2,719M
€489MCAPEX
2015
€130M
14.8 MtCO2 EMISSIONS
AVOIDED
2016
The growth of big cities, water scarcity,
demand for sustainable energy and different
financing models, offer many opportunities for the
infrastructure sector.
ACCIONA INFRASTRUCTUREACCIONA Infrastructure offers innovative solutions, satisfying the growing global demand for infrastructure.
2016 was defined by the good performance of the division, with a general increase in revenues, significant EBITDA growth of 91.8%, and a 13.3% increase in the project backlog.
The annual performance and good outlook (assured by the excellent contracting figures for recent years) are reflected by the success of the strategy initiated with the integration of ACCIONA Infrastructure and the consolidation of sustained growth.
2015
73%
83%INTERNATIONAL BACKLOG *
2015
23
24OPERATIONAL CONCESSIONS
2015
50%
55%REVENUE FROM RECURRING OPERATIONS
2015
€427M
€613MBACKLOG
2015
€453M
€341MNEW CONTRACTS AWARDED
40%PUBLIC CLIENTS
60%PRIVATE CLIENTS
€358MCAPEX
2015
€79M
€120MINNOVATION
2015
€114M
€19,391MBACKLOG
2015
€17,111M
€3,611MREVENUES
2015
€3,306M
€321MEBITDA
2015
€167M
CONSTRUCTION CONCESSIONS WATER INDUSTRIAL SERVICES
2016
€10,469MBACKLOG
2015
€3,536M**
*Includes Industrial
**Excludes ATLL
€1,377MBOOK VALUE
2015
€1,332M
€7,527MBACKLOG
2015
€6,722M
€783MBACKLOG
2015
€759M
The priority of ACCIONA Construction at present is to carry out projects in regions with high development potential, consolidating its presence in North and Latin America, Australia and the Middle East, and achieving greater penetration in Central Europe, Scandinavia and Southeast Asia; as well as fostering the number of contracts with private clients in Spain.
In 2016, the backlog increased thanks to the increasing level of awards of new projects with high complexity and prospects of good returns, such as:
Dubai Underground (United Arab Emirates)
Construction of the Pacific Highway Bridge (Australia)
Extension of Puhoi Highway (New Zealand)
Roskilde Fjord Highway (Denmark).
ACCIONA Construction
The strategy of ACCIONA Concessions is to maximise the generated value from PPP contracts, guaranteeing synergies in the construction and operation phases, as well as the appropriate rotation of assets to assure profitability. Among objectives for growth, the decision to increase our presence in the USA stands out, market with
growth expectations, driven by projects with private involvement through PPPs.
At the end of 2016, we had a portfolio of 24 operational concessions (excluding Water) in Spain, Canada, Mexico, Brazil, Chile, Australia and New Zealand.
ACCIONA Concessions
ACCIONA Agua seeks to maintain its leadership in Spain, Italy and Portugal, consolidating growth in Latin America, the Middle East, North Africa and Southeast Asia, and boosting its presence in North America and Australia; as well as continuing to be the benchmark for desalination, and increasing the proportion of its operational services over the long term, with the aim of maintaining a balanced business model.
The main achievements in 2016 were the following, among others:
Consolidation as leader in desalination:
- Bigger contribution from Qatar plant contracts, being constructed apace.
Entry into new markets with big potential for the sector:
- Putatan water treatment plant in the Philippines.
ACCIONA Agua
ACCIONA Industrial’s priority is to increase projects related to renewable energies, develop transmission lines, and take advantage of opportunities in the Waste-to-Energy market. International growth looks bright in key countries such as Canada, Australia, South Africa, Mexico, the United Arab Emirates and Chile.
In 2016, we consolidated strategic business lines in the Industrial area by winning important contracts such as:
DEWA EPC in the United Arab Emirates, the biggest photovoltaic plant in the world.
The EPC contract for Escalona Hydro power station in Mexico.
Transmission line at El Cortijo in Mexico.
ACCIONA Industrial
The strategy of ACCIONA Service is focused on the growth of the international pipeline and boosting the operation and maintenance of transmission lines, handling services in international airports, hospital concessions and the activity of ACCIONA Producciones y Diseño (APD).
The Services area is a benchmark in Spain and its internationalisation is already a fact:
Cleaning services for Spanish train operator RENFE
Waste collection in Madrid
Auxiliary services at the Audi plant in Puebla State (Mexico)
Airport handling in Dusseldorf and Santiago de Chile.
ACCIONA Service
OTHER BUSINESSESACCIONA INMOBILIARIAMore than 9,000 homes promoted over 25 years.
The consolidation of the cycle of recovery in the real estate market – in both the residential and commercial segments – begun in 2015, has contributed to a positive outlook for the sector. This is borne out by the results obtained in 2016 by the company, whose EBITDA grew
122.1% due to the delivery of a development in Mexico. The sale of a hotel, shopping mall and adjacent office building for 67 million euros also contributed to an extraordinary result for the division.
€105M REVENUES
2015 €51.4M
236 HOUSING STOCK
2015
316
€14M EBITDA
2015
€6M
€1,110M GROSS ASSET VALUE
2015
€1,271M
BESTINVERLeading independent fund manager in Spain.
Bestinver achieved most of the targets it set out to at the start of 2016, strengthening its investment team and improving internal processes, and is now an organization that is closer to its clients.
The robustness of its investment strategy is reflected in the returns obtained, which sets Bestinver in a privileged place to benefit from the process of the financial disintermediation occurring in Spain.
€85M REVENUES
2015 €91M
€59M EBITDA
2015 €67M
€5,222MASSETS UNDER MANAGEMENT
2015 €5,106M
41,882 CLIENTS
2015 42,476
TRASMEDITERRANEACelebrates its centenary in 2017.
Over recent years, Trasmediterranea has undertaken a significant restructuring in favour of efficiency and operational excellence, with the aim of achieving a more efficient fleet management and keeping cost savings.
The modernisation and optimisation of the processes has translated into a progressive improvement in the results of Trasmediterranea, which in 2016 consolidated its EBITDA at 61 million euros, four times higher than the operating results obtained in 2013.
€431M REVENUES
2015 €424M
€61M EBITDA
2015
€41M
2,508,535PASSENGERS
2015 2,451,323
5,780,966 CARGO HANDLED (LANE METRES)
2015 5,651,087
GRUPO BODEGAS PALACIO 1894Over 120 years of production and ageing of quality wines.
Grupo Bodegas Palacio 1894 began a new phase with the aim of being recognised as a benchmark company in the quality wines market.
In 2016, the change of the business mix to premium, with double-digit growth in Denomination of Origin (D.O.) wines, contributed to a 2% increase in revenues and 12% increase in EBITDA compared to the previous year.
€41M REVENUES
2015 €40M
40%INTERNATIONAL SALES
2015
40%
€6M EBITDA
2015 €5M
16M BOTTLES SOLD
2015 16M
