PRESS RELEASE

Abertis reports 2016 results

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Wednesday, March 1, 2017

1 MAR 2017

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Abertis' net profit totalled €796Mn, up 13% in like-for-like terms.

  • Results exceeding forecasts: revenue totalled €4,936Mn (+13%) and EBITDA amounted to €3,240Mn (+20%).
  • Solid traffic growth in the main markets, such as Spain (+5.3%), France (+1.9%), Italy (+2.6%) and Chile (+6.4%).
  • Road Safety: Improvements across the Group, especially noteworthy in France, where the number of casualties on the road fell by 20%.
  • €2,000Mn bonds issued in 2016, at all-time-low interest rates (1.1% average coupon), over-10-year maturities.
  • The company has succeeded in increasing its portfolio duration (based on EBITDA backlog) by 9 years since 2011.
  • €1,612Mn invested in acquisitions (A4 Holding in Italy, Autopista Central in Chile and the purchase of minority shareholders in Arteris).
  • Over €1,000Mn expansion investments and expansion of existing assets (mainly in Brazil, France and Puerto Rico).
  • Abertis has reached an agreement with AXA for the acquisition of a 9.56% stake of HIT, company controlling 100% of Sanef, for €446 Mn.
  • Resolutions of the Abertis' Board of Directors:

    • Approval of the second payment of the dividend corresponding to 2016: €0.37/share. Shareholders to choose between receiving cash or shares from Treasury stock (with a 3% discount).
    • Appointment of Xavier Brossa as new independent director.
    • Ratification of appointment of Anna Bonet Olivart as Managing Director of Autopistas, Abertis' subsidiary in Spain.

Abertis improved all its key indicators in 2016 above the company's expectations: EBITDA rose to €3,240Mn (+20%) and revenue to €4,936Mn (+13%), thanks to the traffic growth and the incorporation of new assets into the consolidation scope. Net profit totalled €796Mn, up 13% in like-for-like terms, since comparison of net profit between 2015 and 2016 is shaped by the capital gains from the listing of Cellnex Telecom in May 2015.

Consolidated figures in this period were affected by the negative exchange rate trends in Latin America (Brazil, Chile and Argentina). However, the growth in other indicators mitigated these effects.

Income statement

Revenue in 2016 totalled €4,936Mn, up 13% year-on-year, thanks to the traffic increase and the inclusion in the consolidation scope of Autopista Central in Chile, of the A4 and A31 toll roads in Italy, and of Túnels in Spain.

EBITDA totalled €3,240Mn (+20%) thanks, among other factors, to the robust operating margins performance. Excluding the incorporation of new assets into the consolidation scope, EBITDA advanced 9%. Net profit increased to €796Mn (+13% like-for-like).

The consolidation of efficiency plans and the reduction in operating expenses in 2016 led to an improvement of the Group's EBITDA margin in 140 bps, up to 66.2%. Growth was registered in its three main markets: in Spain, the margin rose by 190 bps; in France, by 170 bps, and in Brazil, by 130 bps.

Traffic performance

Traffic continued to grow in 2016. The uptrend continued in Europe, with increases of 5.3% in Spain; 1.9% in France; and 2.6% in Italy. Also noteworthy was the performance in Chile, where Average Daily Traffic (ADT) advanced 6.4%. These increases offset the decline in traffic in Brazil, where the economic situation prompted a 2.8% decline.

In the sphere of road safety, the Group posted improvements in both its accident (-3%) and fatality (-5%) rates. Of particular note was the improvement in France -where the number of casualties on the road fell by 20%-, Brazil and Puerto Rico.

Efficient debt management

In 2016 the Group continued to pursue a debt management strategy aimed at extending the average debt maturities and reducing its cost, highlighting the efficiency of the company's active balance sheet management and reducing exposure to financial risks.

In 2016, Abertis carried out bond issues totalling around €2,000 million, with more that 10-years maturity with an average coupon of 1.1%. In November, Abertis completed a more than 10-year (February 2027) €500Mn bond issue with a coupon of 1%, the lowest in the company's history. This issue summed up to the 10-year €1,150Mn bond issue (maturing in May 2026) with a fixed annual coupon of 1.375% completed in May. In addition, in October the Group's French subsidiary Sanef completed a €300Mn bond issue with a 12-year maturity (October 2028) and a coupon of 0.95%.

Abertis' consolidated net debt at 31 December 2016 stood at €14,377Mn, up from €12,554Mn in 2015. This increase was the result of the new assets added to the consolidation scope. However, the net debt/EBITDA ratio decreased from 4.7x in 2015 to 4.4x in 2016. Two thirds of total debt are non-recourse, while 90% is fixed rate.

Investment in growth

The Group's investments in 2016 surpassed €2,600Mn, of which over €1,000Mn corresponded to organic expansion capex. The most relevant projects in the period relate to improvements and lane expansions on toll roads in Brazil and the extension of the concession in Puerto Rico.

Regarding growth transactions in 2016, €1,500Mn were invested in the acquisition of 51.4% of Italian group A4 Holding, closed in September, and in the purchase of 50% of Chilean Autopista Central, in January 2016.

In addition, in January 2017 Abertis increased its stake in its French subsidiary Sanef from 52.55% to 63.07% for a total amount of €491Mn. The deal shows the Group's ability to grow in its existing asset portfolio maintaining its financial discipline, reducing its operational risk profile and balancing its global presence, especially in the developed markets where the Group successfully operates since years.

The deal also increases the average Group's concessions duration and insures a higher dividend flow from France, which will contribute to compensate the end of some concessions in the next years.

Keeping up with this growth strategy, in February 2017 Abertis reached an agreement to increase its controlling stake in its Italian subsidiary A4 Holding by acquiring an additional 8.53% stake. As a result, Abertis controls almost 60%. The Group aims to increase its stake by acquiring minorities' shares.

Moreover, in January 2017 Sanef reached agreement with the French government to implement a new investment plan (Plan Relance II) for the upgrade of its network. The company will invest €147Mn in various projects in exchange for a toll increase from 2019 to 2021.

The agreements reached with public administrations and the company's ongoing investment in its asset portfolio enabled it to increase its portfolio duration (based on EBITDA backlog) by 9 years between 2011 and 2017.