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Good morning, everyone, and thank you for joining us for this ACS Third Quarter '19 Results Conference Call. I'm here with Ángel García Altozano, Corporate General Manager, and the rest of the team. We will briefly analyze the key aspects of our results and we then look forward to any questions you might have.9 months '19 key figures. ACS has delivered a robust performance during the first 3 quarters of '19. At operating level, sales rose by 6.3% to EUR 28.8 billion. EBITDA increased by 10.8% to EUR 2.4 billion and EBIT by 7% to over EUR 1.6 billion. These solid operating results drive a net profit growth of 11.2% to EUR 769 million. This figure includes EUR 193 million contribution from Abertis. Operating cash flow adjusted for factoring improved by over EUR 500 million compared to the 9 months '18 despite an operating CapEx increase and higher tax payments in the current period. Our net debt stood at EUR 1.2 billion. And the main driver here is over EUR 1 billion equity invested in the Abertis transaction. Lastly, on this slide, I want to underline our very strong backlog, which now stands at EUR 77.6 billion, over 10% higher year-on-year, while maintaining our bidding discipline.Slide #3, sales evolution across our activities and core markets. Let's take a closer look at revenues. Total sales of EUR 28.8 billion rose by 6.3% year-on-year, 4% adjusted for currency impact. This growth is mainly driven by an outperforming U.S. market, I would say, rising by 16.3% or 9.4% FX adjusted, up to EUR 12.1 billion; a stronger domestic market with sales growth of over 9.4%, up to EUR 4.2 billion and the clean renewable energy asset development; and the Australian market was also positive with growth of 3.3% FX adjusted to EUR 5.4 billion. By business area. Infrastructure grew by 7.1% to over EUR 22.3 billion. Industrial Services sales were 3.4% higher, EUR 5.3 billion. And Clece show a 5.3% rise with a good performance in both the domestic and the international markets.Slide 4, operating results. Sales growth was led by an increased contribution from construction management, mining and services-related activities, thus further improving the positive trend in the group's risk profile. Moving to the next slide, we have the EBITDA and EBIT. And the group achieved a 10.8% increase in EBITDA to EUR 2.4 billion. EBITDA margin, up to 8.4%. EBIT grew by 7% to EUR 1.7 billion, with a margin of 5.7%. Variations in the operating margins, excluding Abertis and JVs' contribution, are due to changes in the business mix. The breakdown by business area is as follows. In Infrastructure, EBITDA of EUR 1.8 billion grew by 12.9%. EBIT has stood at EUR 1.2 billion, rising by 8%. Industrial Services EBITDA rose by 3.4% to EUR 554 million, in line with the sales, while EBIT grew by 4% to EUR 487 million. And Clece's EBITDA registered an increase of 9% to over EUR 70 million while EBIT reached EUR 43 million.Let's look at Abertis overview. On the next slide, we have an overview of Abertis since the beginning of the year. Traffic was significantly higher year-on-year in Spain, Chile and Brazil and stable in France and Italy. 9-month revenue were up by 4.4% on a comparable basis. On a like-for-like basis, EBITDA was 7% higher at EUR 2.8 billion. And total net profit amounted to EUR 853 million, up by 9% comparable. ACS share of profits after holding costs, PPA and minorities from HOCHTIEF was EUR 193 million. Abertis represents 25% of our 9 months' net profit and of our last 12 months' free cash flow from operations, which includes the EUR 432 million dividend payment. On the strategic side, Abertis has recently announced the investments in RCO, Red de Carreteras de Occidente, one of the largest transport operators in Mexico. In joint venture with a sovereign wealth fund, GIC, we have reached an agreement to acquire 70% stake in the brownfield toll road company. RCO manages 876 kilometers of toll roads and Abertis will fully consolidate the company with a EUR 1.5 billion investment for a 50.1% stake. This is a high-quality asset with a good strategic fit and as such, a long-term cash flow generation for Abertis. And we are very pleased to have achieved this significant strategic investment. Following this transaction, Standard & Poor's reaffirmed its BBB rating for Abertis with a stable outlook.Additionally, during this Q3, Abertis has closed the sale of 89.7% stake in Hispasat announced in February 19 to Red Eléctrica Corporación. And the transaction amounted to EUR 933 million. Overall, our investment in Abertis is significantly increasing our level of profit and cash generation, and at the same time, enhancing our earnings visibility.Net profit by activities. The solid performance of the group's operating activities have led to an increase of 11.2% in ACS net profit to EUR 769 million. By activity, Infrastructure was 5.6% higher year-on-year at EUR 470 million, of which EUR 263 million comes from Construction activities, that is Dragados and HOCHTIEF. Excluding its stake in Abertis, in comparable terms assuming an unchanged holding in HOCHTIEF, this would be a 6.2% increase. Concessions generating EUR 206 million, which reflects Iridium and the EUR 193 million Abertis contribution. Industrial Services also increased its profit contribution to EUR 270 million, up 4%. And we have the EUR 29 million from Services.The last 12 months' cash flow generation. On a last 12 months' basis, net debt increased by EUR 1.4 billion, driven by last year's Abertis acquisition and a significant increase in renewable energy investments, which would imply a net investment of EUR 1.9 billion. Cash flow from operations before working capital and CapEx amounted to EUR 2.6 billion. This includes the EUR 432 million from the Abertis dividend we received in May. Operating working capital variation imply a cash outflow of EUR 290 million. Net operating CapEx amounted to EUR 552 million, EUR 130 million higher than the prior year due to growth in contract mining and high job cost at tunneling work. Net investments resulted in a cash outflow of EUR 2 billion, which includes, among others, the acquisition of Abertis for EUR 3.5 billion and the sale of almost 24% in HOCHTIEF for EUR 2.4 billion as well as the net investments in renewables for EUR 850 million. Our last 12-month shareholders remuneration was EUR 995 million, corresponding to ACS shareholders and the group's minorities, EUR 366 million higher than the prior period.Let's look at the net debt evolution during the 3 quarters of '19. At the end of '18, we had a net cash position of EUR 3 million. From January to September of '19, cash flow from operations before working capital and CapEx amounted to EUR 2.1 billion. And this includes the EUR 432 million Abertis dividend, which more than offsets high tax payments during the period. In the first 9 months, the operating working capital variation amounts to EUR 1.4 billion cash outflow, reflecting the characteristic seasonality of the period. And adjusted for factoring, this figure has improved by almost EUR 230 million year-on-year. Operating CapEx for EUR 427 million was EUR 50 million more than last year and in line with the growth shown by contract mining and job cost at tunneling work. Net investments imply a cash outflow of EUR 760 million, of which the vast majority correspond to renewable energy assets we are developing in Spain through Zero-E. I will highlight that by year-end, we will have approached 1.1 gigawatt already installed and connected to the grid. Backlog. We can see the positive long-term trend, which underpins a solid outlook for our group. The backlog compound annual growth rate stands at 6.6% since 2015. The book-to-bill ratio has been over 1x even in a period of rising revenues and currently stand at 1.14x. The total backlog at the end of September was EUR 77.6 billion, rising by over 10% year-on-year. Our diversification by activity and geography in developed markets, combined with a group-wide mindset of disciplined bidding, has allowed us to achieve further order book growth. Looking at the group's main strategic regions. The backlog in the U.S. stood at over EUR 29 billion, growing by 20% year-on-year. And the Australian order book of EUR 18 billion increased 13.7%. I wanted to highlight the evolution of breakdown of the group's backlog in line with our strategy with an increasing proportion of lower-risk projects coming from construction management, Alliance style and PPP contracts as well as high contribution from infra and mining services. These activities currently represent around 70% of the group's backlog, balancing and having visibility to the future cash flow generation. Looking further forward, we have a strong project pipeline, which our teams have identified for EUR 530 billion, of which EUR 230 billion are PPP infra projects and over 80.2 gigawatt in renewable assets, which give us a high level of visibility for the future. Order intake Q3 '19. Let's look at our major recent awards during the third quarter of '19, which include contract mining extension at the Curragh Mine in Queensland for over EUR 800 million; an Alliance style contract for the Cross River Rail project in Queensland for EUR 550 million; contract to the deliver stage 2 of the Monash Freeway in Victoria for EUR 472 million; project for I-405 widening in Washington for EUR 377 million; an engineering design, supply, construction and commissioning of the floating offshore wind farm Kincardine with a nominal capacity of 50 megawatts in Aberdeen for EUR 363 million, among others.And so to summarize, we have delivered a solid set of results with a positive operating performance across our activities and a significant increase in net profit, accompanied by solid cash flow generation and a greater level of visibility. Our robust backlog reinforces our leadership position in our strategic markets. Moreover, in line with our strategy and increasing proportion, currently around 70% of our work in hand comes from construction management, contract mining and services as well as low-risk infrastructure development. Together with the contribution from Abertis, this provides the group with an attractive risk profile and long-term visibility, thus enhancing the quality and sustainability of our profits and cash flow. Looking further forward, our project pipeline stands at EUR 530 billion for the remaining of '19 and beyond with a PPP pipeline of EUR 230 billion. In conclusion, we are confident to meet our 2019 full year targets we would remind you are: 5% top line growth and 10% net income growth, meaning over EUR 1 billion of net profit. And thank you very much. And obviously, we are now ready to answer any questions you might have.
[Operator Instructions] The first question comes from Guillermo Fernandez-Gao from Kepler.
First one would be if you could remind us on the reason for the seasonal pattern of the Dragados EBITDA margin. It looks like something ACS-specific as it doesn't happen in CIMIC or HOCHTIEF or actually in any other contractor. And if you are confident that the margin will improve in Q4. And second would be on working capital. It's more to test how confident you sound on the possibility of recovering, well, practically in full the EUR 765 million of working capital deterioration to date in ACS perimeter, excluding HOCHTIEF. And linked to the working capital question, if -- I mean every quarter, you disclose your factoring balance, but you don't do the reverse factoring. If you could give us some indication on how material it is the reverse factoring balance and how it has evolved through 2019 quarters.
Thank you, Guillermo. In regard of EBITDA margins, Dragados Q4 improvement, et cetera, hey, well, look, well, if we look at how it's performing and you look back to the, say 3, 4 years, you realize that more or less, depending on the work that Dragados flows and the areas that Dragados is working in and the type of the contracts and obviously taking into account the mix that I've been explaining in my speech and the variations that are ongoing, and you know that it's taking time, the EBITDA is flowing this way, which means that obviously we are expecting as in the previous years a recovery in the Dragados margins also for the Q4. Working capital recovery, that seasonality is something that is being shown and then you can have a look at the numbers. If you review the latter years, either 2 or 3 or 4 years, you realized that we've brought over EUR 1 billion in free cash flow, meaning that our expectation is obviously, let's say, to go to the same trend and then to recover as much as possible. And we are very positive on that way. And our expectations are good and in line with the previous quarter in the previous years. Factoring and reverse factoring, I'll say 2 things here. Say, December, the EUR 750 million is there -- sorry, because -- what is this? Sorry. Yes, then if you look at the numbers that we are reporting and we've been reporting in regard of this, as you call it reverse factoring, confirming, excluding CIMIC and excluding HOCHTIEF because -- including HOCHTIEF but excluding CIMIC because CIMIC didn't report this number in the previous -- in the period reported, we are about EUR 750 million. And this is more or less stable in the previous year. And in factoring, you realize that we are a little bit below, I would say, the last year, December number, around, I don't know, EUR 50 million, something like that, around EUR 50 million. And in line with this, what we are doing is just moving according, let's say, to the revenues profile and the revenues growth up and down. And this is what our expectations are for the future also.
Your next question comes from Bosco Ojeda from UBS.
I would like to ask about Zero-E. If you could give us an update on the potential disposal, if you still foresee some sort of partial disposal at some point and the timing for that. And also once you -- if you do dispose that, if you have anything in mind in terms of reinvestment, I have seen, if I'm not wrong, you have been buying back your own shares, whether that could continue or you might consider also to do something with HOCHTIEF or CIMIC in terms of buybacks.
Thank you, Bosco. So let me just answer the second part of your question and then I will pass to Ángel your first part about Zero-E. Well, you look what we are looking is to follow our capital allocation policy in order to always see what is more convenient for shareholder remuneration and value creation. And this policy will continue, meaning that regardless of divestment, investment, let's say, M&A, it's always looking how can we improve and create value for our shareholders. And this is -- keeping this in mind, this will come when we have the position that we can say follow through potential M&A opportunity or potential buybacks. And this will happen once we are in such a situation. And in regards to Zero-E, maybe Ángel can give to you more color.
Okay. One comment. Yes, just to finish on the shares buyback, as you know, ACS always offers the possibility of dividend in shares. And this is probably the reason why we keep on buying. Basically, we buy shares. We give the capital with new shares to the -- for the dividend in shares and cancel exactly the same amount of the shares that we've issued for dividends. This is the reason why we have to buy and to cancel then and remain with the same number of shares so that the dividends -- the true dividends, the capital of the company. In reference to Zero-E, as you recall, our objective was to maximize the value of the asset we have built in the renewable energy. Basically, we started the process a few months ago. It is progressing quite actively. And obviously, we are coming close to year-end. It might be at the very end of the year or at the beginning of the year, it's nothing sacred for year-end. But the progress is going fairly well. And we think in the next few months if we divest it. In terms of the new investments in renewables, obviously the present scenario is that we have a significant amount of projects to be built in the coming future. So in principal, we'll continue. And we're developing new energy assets in the renewable sector, which has a tremendous appetite for it, and we're doing it not only in Spain but over Latin America or even in Asia, where we just got a few contract for 4 months [ held part ]. So the idea is divestments are continuing in the process fairly well. Nothing sacred on year-end, it might be just at the end of the year or at the beginning of the coming year, and we'll continue investing in this field.
[Operator Instructions] Your next question comes from Marcin Wojtal from Bank of America.
So a couple of questions. First, on Page 13, you mentioned that there was some negative impact on free cash flow due to higher cash taxes. Can you clarify? Was it in Q3 or it was already in the first 6 months of the year? And also would you say that cash taxes right now are on a normalized level or it's an unusually high year for tax payments and that should normalize going forward? And question number two, it's a little bit detailed. And so I'm just looking at your disclosure on CapEx and you mentioned 149 investments from HOCHTIEF JV. Can you confirm? Does it relate to HOCHTIEF concessions or it has to do something with the joint venture in the Middle East?
Thank you, Marcin. Regarding now then the comment in regard to the high tax payments. The number is about -- the balance is about EUR 100 million, minus EUR 60 million the previous year plus EUR 40 million this year. And the influence is around EUR 100 million. In regard of the CapEx and the joint ventures mainly are coming from the America joint venture and other things. But the main amount of this EUR 149 million to EUR 150 million are coming from the America joint ventures.
Your next question comes from Nicolas Mora from JP -- from Morgan Stanley.
A quick one on Industrial Services. You mentioned Mexico is doing a bit better. Could you give us a little bit more depth on that and what we should expect especially from Pemex into next year? And then looking again on Industrial Services, you're finishing a big workload in Spain on solar PV. You also finished some big works in Brazil on high-voltage grids. Are you a little bit worried by the outlook on 2020 in terms of revenues and margins when these contracts finish and the revenue basically falls down?
The second question which is basically, we are finishing and obviously depleting the order book in renewals in Spain. But there is a tremendous appetite for this type of energy, not only in Spain but worldwide, and we have a strong focus there. So I think we will continue building. The fact that we finished some large contracts in one market or the other, the big contracts in Industrial Services do not come on a monthly basis. But we do not have any particular concern with the market, we said attractive opportunities. And the good thing about Industrial Services is that they have a wide array of products and services, and depending upon the market conditions increasing in one area or decreasing in the other. So in the balance, we are not concerned with the order book coming. You mentioned Mexico. Well, Mexico, obviously, is a situation where the new government is making himself comfortable with the situation. Obviously, the good thing is that in the last couple of years, our percentage of work with the private sector has increased. That has alleviated the burden on work coming mostly from Pemex, which is no longer the case. But also we think Pemex is beginning to consider they need to do some investment. Mexico is going to take a few months to recover. But we see some signs in the private sector and also in the permit side, they are beginning to get some action whilst the government has gotten themselves in command of the situation. So we don't have any concern going forward. Obviously, it's a bit early to tell what the growth there. But we see positive signs compared with the previous quarter.
Okay. And if I may, to follow up on Bosco's question on Zero-E, what's really up for sale now? Are you keeping the development pipeline and just selling the assets in operations or just about to turn into operations? And can you maybe just provide us the net debt attached to what you might be selling if you've got a precise number to give the market?
Okay. Basically, we have for sale the business that we have in Zero-E, which has the composition of both assets in operation, actually I think in December this year. The EUR 1.1 billion will be hooked up to the system, the ones which we're getting and which we haven't sold in the last auction. But besides those, we work further pipeline. We are selling the existing assets in Zero-E, which also include assets which have to be developed. So it depends very much on what the investors are pricing. If the price is good for a complete asset, existing assets and the ones which are to be built, also that can be considered. So we have -- basically, the objective is to maximize the value on the Zero-E asset. And obviously, this is the process in which we are now. It's not easy because some assets which are being developed, regardless whether we sell them or not, a construction to build, they will remain in cover as one of the guarantees that the investors want. So we have in the pipeline for construction is quite large there. It's about EUR 3 billion, sorry, 3,000 -- 3 megawatts -- 3,000 megawatts all over the place, so it's quite large. Basically, the idea is to sell, depending upon the price, either the whole portfolio or only the ones you build. And again, Spanish assets can be sold solely or the whole portfolio with the Latin America asset as well. It is basically in the process in which we are trying to maximize the value for the company.
Okay. And net debt, if you have a number to give by any chance?
No. We've got the full amount of debt which we have in our numbers. In assets held for sale, I think we've got EUR 1.4 billion. But this is not only [indiscernible] assets, they're also there, including some toll roads which are for sale and some assets which are not renewables which are also for sale. The EUR 1.4 billion is in total.
[Operator Instructions] Your next question comes from Joao Safara from Banco Santander.
Just a very quick question regarding the toll roads and concessions you have in Iridium. The question basically is if they're still on the table, the sale of the Spanish tolls? And what kind of expectations do you have for the price for this asset? And also if you expect to sell the whole portfolio that you currently have.
Thank you, Joao. You know that we are in the process of the selling process. And we are taking a look, let's say, to get this in accordance, say, to factoring the same concept how to maximize this asset. We are not in a rush, but we're aiming to do this as soon as practical. And taking into account that the process is really well advanced and we are aiming to get this as soon as practicable, I don't know if by the end of this year or next year. But this is not really important. What is important is like -- what is important is really the maximization of the value of the sales.
The next question comes from Guillermo Fernández-Gao from Kepler.
This one could be if you could comment on the late delays and news flow on gas storage facility. We have seen the CNMC resolution and a number of press articles indicating that you would have to inject back a figure in the region of EUR 250 million in the concessionaire. If we could have your view here, if this is a possibility?
Okay. Quite a lot of confusion in the press on the topic. So basically, the amount which has been mentioned, EUR 200-plus million, of the cost of operations for a period of time, which was provided with a full amount which the government was paying. What [indiscernible] said was basically that the process was not proper because it was not so urgent, so it could have gone through a regular process rather than through the urgent process. This does not have any effect on the fact that we have that amount to be recovered. As probably you will see in our balance sheet, if this amount, which is guaranteed by the Royal Decree and guaranteed by the government, has to be paid, right? We haven't received it. When we have the asset to be collected and the payment will be due from the company [indiscernible] from the company when distribution is clear. It's a flat and a minus, which we have not considered in the past. When we have the asset of the EUR 250 million, which you have to collect from the government, and the EUR 250 million, which we'll pay when collect it. Again, it's not ACS. It's Castor, which is a company we have 60%, but it's a company. So it would not have any effect on ACS numbers and ACS balance sheet.
[Operator Instructions] Ladies and gentlemen, there are no further questions in the conference call. I now give back the floor to the company. Thank you.
Okay. No more questions. Thank you, operator. And then thank you very much for attending to this conference call. And obviously, we will see in the next one, which will be, I think I assume in February, the end of February, more or less, and then we can give you more information about all these questions that you have raised. Thank you very much, and we'll see you in February.