Presentation to Investors - Grupo ACS · EBIT 3Q06 €-76.8 mn € 170.9 mn € -41.1 mn n.a. n.a. +93% Financial results Equity Method Taxes, minority interests and others Outstanding

1

November 2006

Presentation to Investors

Growth for the future

2

Grupo ACS Strategy Update

Levers of Operating Growth on Core Activities

Content

Levers of Value Creation on Core Stakes

Annexes

ACS Strategic Vision

Summary of 3Q/06 Results

A Track Record of Results Delivered

3

Income Statement Key Figures

Turnover

48%

33%

19%

EBIT

22%

43%

36%

Net Profit

33%

25%

15%

8%

4%

15%

Construction Industrial Services Services Concessions Urbis NOTE: The percentages have been calculated as the sum of the activities considered in each graph

Unión Fenosa

Breakdown of activity as of 3Q06

Euro Millions 3Q05 3Q06 Var

Turnover 8.891,3 10.476,2 +17,8 %

EBITDA 785,7 925,2 +17,8 %

EBIT 596,4 710,6 +19,1 %

Net Profit from Listed Affiliates 64,2 173,8 n.a.

Net Profit 440,3 607,5 +38,0 %

EPS 1,26 € 1,74 € +37,7 %

Total Backlog 25.549,2 27.987,2 +9,5 %

Net Investments 3.482,7 5.324,0 +52,9 %

4

• Solid performance of the domestic market

Income StatementAnalysis of the Evolution of the EBITDA

€ 785.7 mn

3Q05

€ 67.5 mn

€ 50.1 mn

€ 24.0 mn

€ 925.2 mn

+22.0%

+20.2%

+9.5%+17.8%

Construction Industrial Services Urban Services 3Q06

• Excellent evolution of Energy related activities

• International activity increased

• Sustainable growth in all activities

Like for like variations

+ € 139.6 mn

38%

31%

31% 40%

29%

31%

€ 3.4 mn

n.a.

• Start-up of a new concession

Holding Adjustments : € (5.5) mn

Concessions

January - September

5

Income Statement Analysis of the Evolution of the Net Profit

€ 440.3 mn

3Q05

€ 114.2 mn

€ 607.5 mn

+19.1%+38%

EBIT 3Q06

€-76.8 mn

€ 170.9 mn

€ -41.1 mn

n.a.

n.a.

+93%

Financial results

Equity Method Taxes, minority interests and others

Outstanding performance of operating businesses

Net impact of the LTM investments

ABE: € +15.9 mn

UNF: € +146.2 mn

URB: € +7.9 mn

Other: € +1.0 mn

Like for like variations

Corporate taxes and other results

+ € 167.2 mn

January - September

6

Stake

24,8%

24,8%

35,7%

Euro Millions 3Q05 3Q06

68,6 84,4

23,4 31,4

UNF 146,2

Total Equity Method 92,0 262,0

Financial Expenses (42,8) (135,7)

Corporate taxes 15,0 47,5

Net Profit 64,2 173,8

Results by activity 3Q/06

Industrial Services

Turnover 5,055 +21.1%

EBITDA 375 +22.0%

Margin 7.4%

EBIT 316 +20.9%

Margin 6.3%

PBT 335 +21.4%Margin 6.6%

Net Profit 215 +21.1%

Margin 4.3%

(Million Euros)

3,494 +16.1%

298 +20.2%

8.5%

257 +22.8%7.4%

239 +22.9%6.8%

163 +23.5%

4.7%

1,987 +11.8%

276 +9.5%

13.9%

166 +12.2%8.4%

135 +10.7%6.8%

95 +14.8%

4,8%

Construction Services

Backlog 10,389 +15.1% 4,860 +19.6% 12.739 +2.3%

=

=

=

=

+30bp

+40bp

+30bp

+30bp

-30bp

+10bp

-10bp

+20pb

Affiliated companies

7

Million Euro 3Q05 3Q06 Var. 06/05

Environmental 801,1 904,8 +12,9 %

Ports & Logistics Services 398,4 414,3 +4,0 %

Transportation Services 137,3 149,0 +8,5 %

Facility Management 440,9 519,4 +17,8 %

TOTAL 1.777,7 1.987,4 +11,8 %

International 163,7 196,7 +20,1 %

% 9% 10%


Networks 577,4 575,6 -0,3 %

Specialized Products 963,5 1.130,7 +17,3 %

Energy Projects 932,9 1.120,5 +20,1 %

Control Systems 536,7 667,0 +24,3 %

TOTAL 3.010,5 3.493,8 +16,1 %

International 961,7 1.179,8 +22,7 %

% 32% 34%

Summary of sales by activity

17%

32%32%

19%

21%

7%

26%46%


Civil Works 2.460,5 2.922,1 +18,8 %

Non residential Building 970,1 1.282,2 +32,2 %

Residential Building 744,1 850,4 +14,3 %

TOTAL 4.174,7 5.054,7 +21,1 %

International 415,5 310,1 -25,4 %

% 10% 6%

24%

18%

58%Sales 3Q06

8


Networks 848,0 800,0 -5,7 %

Specialized Products 1.279,3 1.622,5 +26,8 %

Energy Projects 1.157,2 1.477,1 +27,6 %

Control Systems 780,1 960,3 +23,1 %

TOTAL 4.064,6 4.859,9 +19,6 %

International 1.222,6 1.207,8 -1,2 %

% 30% 25%


Environmental 7.399,6 7.090,7 -4,2 %

Ports & Logistics Services 3.216,5 3.674,7 +14,2 %

Transportation Services 1.337,8 1.161,6 -13,2 %

Facility Management 502,8 811,7 +61,4 %

TOTAL 12.456,7 12.738,7 +2,3 %

International 1.979,0 1.850,0 -6,5 %

% 16% 15%


Civil Works 6.022,9 6.587,6 +9,4 %

Non residential Building 1.783,9 2.157,2 +20,9 %

Residential Building 1.221,2 1.643,7 +34,6 %

TOTAL 9.028,0 10.388,5 +15,1 %

International 658,1 482,3 -26,7 %

% 7% 5%

Summary of backlogs by activity

17%

33%30%

20%

29%

9%6%

56%

13%

20%

67%

Backlog 3Q06

9

Million Euro Var. 06/05

Fixed Assets 8.882 100% 14.829 100% +67 %

Working Capital (1.468) 17% (1.690) 11% +36 %

Total Equity 2.521 28% 3.152 21% +25 %

Net Debt 1.960 22% 6.062 41% +209 %

Non Recourse Financing 580 3.406 +488 %

Net Debt With Recourse 1.380 2.656 +92 %

Other liabilities 2.932 33% 3.925 26% -15 %

Payables due to UNF/IBE* 2.219 3.322

Other 713 603

sep-05 sep-06

Balance SheetKey Figures

* The increase in debt derived from Iberdrola’s 10% stake acquisition is not included as this investment has been paid on October 2nd, 2006

10

Consolidated Balance Sheet Pro-forma Net Debt

€ 1,380 mn

€ 580 mn

Net debt with recourse

Non recourse financing

Pro-forma net debt € 4,240 mn

€ 2,656 mn

€ 3,406 mn

€ 9,384 mn

+1,276

+2,826

+5,144

Market value of affiliates*

€ 11,600 mn€ 2,280 mn

Adjustment from UNF acquisition

€ 3,322 mnAdjustment

from IBE acquisition

Oct 2005 Oct 2006

* Includes Abertis, Unión Fenosa, Iberdrola and Urbis

11

Breakdown of Capital Expenditure

Euro MillionGross

InvestmentDivestments

Net Investment

Construction 307 33 274

Industrial Services 349 57 293

Services 245 25 221

Concessions 68 66 2

Subtotal 969 181 790

Iberdrola 3.322 3.322

Unión Fenosa 1.144 1.144

Others 91 22 68

TOTAL 5.526 203 5.324

12



Content


Annexes




13

Our strategic visionGrupo ACS is a world reference construction and services group,

which actively participates in the development of basic industries

Construction & Services

EnergyInfrastructures

Total capital invested: > € 10 bn

CONSTRUCTIONINDUSTRIAL SERVICES

URBAN SERVICES

14

Levers of Operating GrowthConstruction: Civil Works

CONSTRUCTION

Infrastructures plan (PEIT) to invest €250 bn between 2005 and 2020

Civil Works

Total Investments € 248.7 bn(60% Public. 40%: Private-Public)

Highways € 62.7 bnRailroads € 108.6 bn

Airports € 15.7 bnPorts € 23.5 bnUrban developments € 38.2 bn

45%

25%

6%

9%

15%

Commitment to continue investing from the public administrations in Spain on 2007

+60%

+9%

+15%

-9%

-4%

+20%

Var.

1.31.4Ports

4.23.5Roads

2.01.8Airports

5.65.8Railways

0.80.5Environmental and Others

3.53.2Hydraulic works

20072006Areas

All figures in € billion

Investment budget for the Central Government 16.2 17.4 +7.4%

2006 2007 %Δ

Source: Spanish Ministry of Economy – Budget for 2007

Main contractor in Spain59% of the ACS Construction activityInternational activity = 10%

15

Large developments for public and private clients

24% of the ACS Construction activity

Levers of Operating GrowthConstruction: Building

CONSTRUCTION

Building

Non Residential Homebuilding

Commercial building backed by GDP growthInstitutional building

• Development of new PPP projects as hospitals, jails or transfer stations

• Growing demand for public buildings: stadiums, museums,…

Large developments for the big realtors in Spain

17% of the ACS Construction activity

Increase of population in Spain: immigration and long term tourists

More than 550,000 units built per year

Refurbishment market growing in Spain

Focus on big projects and PPPs41% of the ACS Construction activityDomestic activity

16

Levers of Operating GrowthConstruction: Concessions

CONSTRUCTION

Concessions

Promotion Financing Construction Operation

Grupo ACS

Refinancing Extension -Renovation

Greenfield model Brownfield model

World Leader PFI developer

More than 30 projects under development

>€ 1 billion invested & committed

Increasing global demand, specially in developed economiesLimited public budgets -> opportunity for solid financial groupsMain target markets: United States, Western Europe, Chile

Attractive portfolio of concessions:

Highways, Airports, Railways, Hospitals, Transfer Stations, Courtyards, Police Stations…

Development of Greenfield projectsMain source of international expansion in construction15 international projects

17

150.289 154.928162.338

174.247186.448

197.525209.100

215.689230.348

240.759250.983

3%

7%7%

3%

5%4%

4%

5%

7%

6%6%

0

50.000

100.000

150.000

200.000

250.000

300.000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 20050%

1%

2%

3%

4%

5%

6%

7%

8%

Net usage of electrical energy (in millions of kwh) % of increase

Levers of Operating GrowthIndustrial Services: Energy related activities (1)

NetworksHigher maintenance services demand by utilities to improve networks efficiencyOutsourcing form large corporations in order to increase productivity

INDUSTRIAL SERVICESNetworks

Specialized Products

Increased demand of telecom systemsRailways & undergrounds investments planIndustrial facility maintenance growth

Specialized Products

14,275

18,87521,401

23,67726,018

2002 2010 2015 2020 2025

Bill

ion

Kilo

wat

t H

ours

World Net Electricity Consumption

Use

of

elec

tric

al e

nerg

y –

Spai

n –

95/0

5

Main supplier of utilities & large industrial corporationsGlobal player in the support services market

Source: U.S. Department of Energy, Energy Information Administration

CAGR (02/25e) = 2.5%CAGR (02/10e) = 3.5%

Source: REE

International activity = 35%

18

Levers of Operating GrowthIndustrial Services: Energy related activities (2)

17%

52%

12%

13%6%

CoalR.E.

Nuclear

Gas

Oil

12%

51%

18%

11%

8%CoalR.E.

Nuclear

Gas

Oil

8%

47%23%

10%

12%CoalR.E.

Nuclear

Gas

Oil

2002 2006e 2011e

R.E. stands for Renewable Energies

17%

52%

12%

13%6%

CoalR.E.

Nuclear

Gas

Oil

12%

51%

18%

11%

8%CoalR.E.

Nuclear

Gas

Oil

8%

47%23%

10%

12%CoalR.E.

Nuclear

Gas

Oil

2002 2006e 2011e

R.E. stands for Renewable Energies

78

95103

111 119

2002 2010 2015 2020 2025

Mill

ion

Bar

rels

per

Day

World Oil Consumption

INDUSTRIAL SERVICES

Energy Projects

World reference in the integrated projects industry

Very strong demand in the oil & gas industry• High oil prices• Increasing world energy demand

Electricity generation assets for utilities• CCGT development• Renewable energies

Energy Projects

20

30

40

50

60

70

80

90

Jan-0

4Fe

b-04

Apr-04

May-04

Jul-0

4Sep

-04Oct-

04Dec

-04Ja

n-05

Mar-05

May-05

Jun-0

5Aug

-05Oct-

05Nov

-05Ja

n-06

Feb-0

6Apr-

06May

-06Ju

l-06

Sep-06

Oct-06

Oil

pric

e pe

r ba

rrel

-Br

ent

In USD

In EUR

Electricity generation projects: CCGT & renewable energyOil & gas facility projects (off-shore platforms, refineries, etc)

Sour

ce:

U.S

. D

epar

tmen

t of

Ene

rgy,

En

ergy

Info

rmat

ion

Adm

inis

trat

ion

Evolution primary energy use – Spain – 2002-2011e

CAGR (02/25e) = 1.8%

Source: Ministry of Industry and Energy, Spain

Source: Reuters

50% of the activity internationalCAGR (02/10e) = 2.5%

19

Levers of Operating GrowthUrban Services (1)

URBAN SERVICES Solid Urban (SUW) and Special Waste management and treatment

EnvironmentalFacility

Management

Integrated building maintenance, gardening, reforestation and

landscape restoration, social health systems, airports’ services

EnvironmentalMunicipalities and central government to increase environmental investment to face demandInternational expansion based on in-house R&D: SUW treatment plants

Outsourcing trends in public servicesFlexibility and productivity targets in large corporationsNew added-value services

Facility Management

Sour

ce:

INE

(Spa

in's

Nat

iona

l St

atis

tics

Inst

itut

e)

Spanish Population Evolution and Tourists entries

Spanish Population

39.7 mn45 mn

1996 2006e

+ 13%

Tourist Entries

36,2 mn

60 mn

1996 2006e

+ 66%

461

537

682

510

400

450

500

550

600

650

700

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004Average EU (25 countries) Spain

Average Kilograms per Person per Year of Urban Waste Generated

Sour

ce:

Euro

stat

CAGR (95/04) = 3.3%

CAGR (95/04) = 2%


20

Levers of Operating GrowthUrban Services (2)

89.444

56.132

Jan-9

6

Jan-9

7

Jan-9

8

Jan-9

9

Jan-0

0

Jan-0

1

Jan-0

2

Jan-0

3

Jan-0

4

Jan-0

5

Jan-0

6

97.868 107.950 113.829 118.172

251.366 258.007 277.151 297.047

2002 2003 2004 2005

Tons Loaded (thousands) Tons Unloaded (Thousands)

URBAN SERVICES Integral logistics operator: Port handling, Specialized Logistics

Ports & LogisticsPassenger Transportation

Scheduled passenger service on a concession basis

Ports & LogisticsGlobalization vs local marketsTransport infrastructures improvementProductivity increases promote worldwide procurement

High oil prices boost public transportationNew routes through concession acquisitionsRailway transportation liberalization

Passenger Transportation

Sour

ce:

INE

(Spa

in's

Nat

iona

l St

atis

tics

Inst

itut

e)

Number of Intercity Coach Passengers per month (Spain)

Sour

ce:

INE

(Spa

in's

Nat

iona

l St

atis

tics

Inst

itut

e)

Spanish Ports Activity – Tons

CAGR (annual average) (96/06e) = 5.4%


CAGR Tons unloaded (02/05) = 5.73%CAGR Tons loaded (02/05) = 6.75%

21

Development of Transportation Concessions in countries with:

Infrastructure’s needsLocal economy able to support themPublic acceptance and political stabilityStable legal framework with the appropriate legislationDeveloped local financial market

Civil Works activities in highly specialized projects

Levers of Operating GrowthInternationalization

Grupo ACS will continue its effort to diversify its activity into other markets focusing on 3 areas:

Support of the energy industry development:

Providing support services to increase efficiency.Turn key projects for:

• Oil and Gas, both inshore and offshore

• Electricity assets such as Power Plants, CCGTS, Renewable energy

Export of Control Systems software and processes

Contribution to the outsourcing trend offering:

Environmental Services: Export of technology developed by ACS in

• Solid Urban Waste Treatment Plants,

• Recycling and • Waste-to-energy.

Ports and Logistic Services, specially in South America, US and China.

22

Levers of Value Creation on Core StakesUtilities: Union Fenosa and Iberdrola

Grupo ACS participates in the utilities industry, a growing market in Spain facing a price liberalization and in need of larger companies, through its stakes of:

35.7% of Unión Fenosa10% of Iberdrola

These are strategic investments to become the industrial reference shareholder of the 2nd and 3rd utilities in Spain.

In a Consolidating industry with growing perspectives.• Spain is the 4th electrical market in Europe

• It has the fastest growing gas market of the continent

• Presents clear indications of price liberalization

• In order to guarantee supply and environmental conditions, larger companies are needed

Our experience and know how in the energy industry will: • Support the expansion plans, both international and domestic,

in gas and electricity

• Take advantage of the new regulatory framework in Spain• Reinforce the industrial vision of the companies in the long

term.

The combined investments reinforce the Group’s commitment within the utilities sector.

Value creation

€ 3,322

Total Investment

Uni

ón F

enos

a an

d Ib

erdr

ola

Inve

stm

ents

30 S

epte

mbe

r 20

06

€ 4,350

Market Value

Figu

res

in E

uro

mill

ions

Capital gain

€ 850 mn

€ 3,429

€ 3,250

23

Grupo ACS maintains a strong industrial commitment for the longterm with Abertis, owning a 24.8% stake of the company

• European concessions leader by market cap and number of projects• Straight-forward strategic vision on the development and operation of infrastructures• Demonstrated growth capacity

Value creation

17.55%

2004

Stak

e in

Abe

rtis

24.8%

2005

€ 1,838

Book Value

Aber

tis

valu

eSe

ptem

ber

30th

, 2

006

€ 3.250

Market Value Fi

gure

s in

Eur

o m

illio

ns

Investment € 834 mn

Capital gain

€ 1,400 mn

•Increasing airport activity to 15% of turnover

•Entering to the European and North American market

•Duplicating its kilometers managed

•Increasing the final horizon of its concessions

•Increasing its financial gearing

•Increasing its kilometers managed to more than 7,000 km

•Increasing the expected turnover to more than € 6.2 bn

•Increasing its market cap to approximately € 25 bn

Acquiring TBI

Acquiring SANEF

Proposing the merger with Autostrade

Levers of Value Creation on Core StakesAbertis

24


Construction Industrial Services

Urban Services

Creation of sustained value for our Shareholders

Growth in Europe Growth in Europe and in Spainand in Spain

Infrastructures Infrastructures demanddemand

Sustained Sustained InvestmentInvestment

Strong infrastructures demand:

PEIT 2005 - 2020

Growing energy demand: production &

distribution

ExternalizationEnvironmental

awareness

45 mn habitants 60 mn tourists per yearSustained growth of the Spanish population:

Based on a macroeconomic environment with growth opportunities

25



Content


Annexes



Financial Targets

26

Detailed Financial Statements 3Q/06

Income StatementEuro Millions 3Q05 3Q06 Var

Turnover 8.891,3 10.476,2 +17,8 %

Other revenues 289,2 469,2

Total Income 9.180,5 10.945,4 +19,2 %

Operating Expenses (8.394,9) (10.020,3)

Operating Cash Flow (EBITDA) 785,7 925,2 +17,8 %

Fixed Assets depreciation (171,1) (201,0)

Current assets provisions (18,2) (13,6)

EBIT 596,4 710,6 +19,1 %

Net financial results (83,0) (159,7)

Foreign Exchange Results 12,5 (9,7)

Impairment non current assets results (1,4) (10,8)

Results on equity method 93,4 264,4

Results on non current assets disposals 9,2 68,7

Other profit / expenses (29,2) (79,3)

Ordinary income of cont. operations 598,0 784,2 +31,1 %

Corporate income tax (141,4) (164,8)

Consolidated Result 456,6 619,4 +35,6 %

Minority interest (16,4) (12,0)

Net Profit 440,3 607,5 +38,0 %

27


Balance SheetMillion Euro sep-05 sep-06 Var. 06/05

Tangible fixed assets 2.255,6 2.648,5 +17 %

Goodwill 1.039,1 1.096,0 +5 %

Intangible fixed assets 452,7 391,4 -14 %

LT financial investments 4.761,8 10.220,3 +115 %

Other non-current assets 372,4 472,7 +27 %

Fixed and Non-current Assets 8.881,7 14.828,9 +67 % Inventories 449,7 603,1 +34 %

Accounts receivables 4.997,8 5.986,6 +20 %

ST financial investments 1.712,3 1.115,9 -35 %

Cash and banks 679,3 684,2 +1 %

Other current assets 441,6 565,0 +28 %

CURRENT ASSETS 8.280,8 8.954,8 +8 %

TOTAL ASSETS 17.162,4 23.783,6 +39 %

Shareholders' Equity 2.382,6 3.023,5 +27 %

Minority Interests 138,7 128,9 -7 %

Net Worth 2.521,3 3.152,4 +25 % Capital Subsidies 222,3 75,5 -66 %

Loans from credit entities 2.645,1 3.224,5 +22 %

Non recourse financing 565,0 3.358,9 +494 %

Other financial liabilities 35,5 31,5 -11 %

Other non-current liabilities 490,6 527,2 +7 %

Non-current Liabilities 3.736,1 7.142,1 +91 % Amounts owing to credit entities 1.088,4 1.196,1 +10 %

Project Finance 14,5 47,1 +224 %

Trade accounts payables 5.972,4 7.298,9 +22 %

Other financial liabilities 3,2 3,6 +13 %

Other current payables 3.604,3 4.867,9 +35 %

Current Liabilities 10.682,7 13.413,6 +26 %

TOTAL EQUITY & LIABILITIES 17.162,4 23.783,6 +39 %

28


Cash Flow StatementMillion Euro 3Q05 3Q06 Var. 06/05

Cash Flow from Operations 561,3 632,4 +12,7 % Working Capital (Requirements) / Excess 163,4 (182,1) n.a.

Cash Flow from Operating Activities 724,7 450,3 -37,9 %

Fixed assets investments (371,0) (347,1)

Concessional projects investments (258,0) (422,6)

Financial assets investments (698,4) (290,4)

Unión Fenosa acquisition (2.219,3) (1.144,0)

Iberdrola acquisition (3.322,2)

Disposal of Assets 64,0 202,3

Capital Expenditure (3.482,7) (5.324,0) 52,9%

LT Bank credits 1.198,4 543,4

Non recourse financing (678,4) 119,2

ST Bank credits 117,2 1.050,8

Bank Financing 637,2 1.713,4 +168,9 % Dividends paid (137,6) (211,7)

Treasury stock movements 36,8 19,0

Equity Financing (100,8) (192,7) +91,2 %

Other Liabilities 2.322,7 3.269,4 +40,8 %

Cash Flow from Financing Activities 2.859,1 4.790,1 +67,5 %

Inc/(Dec) Cash & similar 101,1 (83,6)

Cash Position at the Begining of the Period 578,1 767,8 +32,8 %

Current Cash Position 679,2 684,2 +0,7 %

29

Shareholding Structure

High liquidity

Free float = 57%

Average daily volume > € 35 mn

Strong international presence

Long-Term commitment from Reference shareholders:

• CF Alba (March family) 21%

• CF Alcor 12%• Florentino Pérez (CEO) 10%

Shareholders Breakdown

43%

22%

14%

8%

13%

Reference ShareholdersInternational Institutional HoldingsDomestic Institutional HoldingsDomestic Retail HoldingsOther

30

1.608 1.755 1.963

4.5875.928

9.602

14.150

2000 2001 2002 2003 2004 2005 11/06

Evolution of Grupo ACS

Market Capitalization

TRS(00 – 06)= 35,3%

1: TRS (total return to shareholders) is calculated as IRR including shares performance and dividends payment

All figures in € mn

31

Grupo ACS History

2000

1999

2005

1997

1993

1989

1988 1996

1983

2002-2003

1999

ONYX2000

2002

2003

1986

1997

2006

Documents

Presentation to Investors - Grupo ACS · EBIT 3Q06 €-76.8 mn € 170.9 mn € -41.1 mn n.a. n.a. +93% Financial results Equity Method Taxes, minority interests and others Outstanding