Media and Financial Analysts
Conference
Dietlikon, 1 September 2011
Hp. Fässler / B. Fellmann / A. Henniger
© Implenia | Corporate Center | September 2011 | Page 2
Interim Financial Statements 2011
Swiss Construction and Real Estate Market
© Implenia | Corporate Center | September 2011 | Page 3
Swiss real estate market
Record low mortgage rates – home ownership makes sense
Historical mortgage interest Rates Ownership premium
in percent
Quotient < 1: The annual net cost of a condominium is less than the
cost of renting a comparable apartment
Source: Swiss National Bank, Datastream Source: Credit Suisse Economic Research
© Implenia | Corporate Center | September 2011 | Page 4
Swiss real estate market
Vacancies in the core regions remain low
Locational quality and vacancy rates 2010
Source: Credit Suisse Economic Research, Geostat
© Implenia | Corporate Center | September 2011 | Page 5
Swiss real estate market
Sustained demand
Source: Schweizer Baublatt, Credit Suisse Economic Research
Number of residential units
Breakdown of building permits by type of use
© Implenia | Corporate Center | September 2011 | Page 6
Swiss real estate market
No indications of overheating
Source: Wüest & Partner, UBS WMR
Real estate price indices (real terms)
0
50
100
150
200
250
300
350
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Q1 1
980 =
100
Rental apartments, total Condominiums Single-family homes
Office space Commercial permises Disposable income
© Implenia | Corporate Center | September 2011 | Page 7
Swiss construction market
Fundamentals are good – but still low prices/earnings expected
Market participants are confident about volumes ...
… but sceptical about selling prices and earnings
This is how sector players see the future of …
construction volumes selling prices earnings
higher
unchanged
lower
Source: UBS outlook Schweiz, 3. Quartal 2011
Max = 100 / Min = -100
Q4 10 Q1 11 Q2 11 Q3 11 Q4 10 Q1 11 Q2 11 Q3 11 Q4 10 Q1 11 Q2 11 Q3 11
11
2113
6
-7-7-13-15
-6-4-11
-7
© Implenia | Corporate Center | September 2011 | Page 8
Swiss construction market
No trend reversal expected
Civil works
▪ Constant investment activity in the public sector
▪ Infrastructure renewal
▪ Upside potential for investment in the energy sector (hydroelectric power
stations etc.)
Buildings
▪ Fundamentals still intact
▪ low interest
▪ very low vacancies
▪ strong demand
▪ Regional differentiation in terms of competition over prices/margins
© Implenia | Corporate Center | September 2011 | Page 9
Interim Financial Statements 2011
Highlights and key figures
© Implenia | Corporate Center | September 2011 | Page 10
Highlights
Business model proving its worth – major objectives achieved
Performance
▪ General Contracting: best interim results ever
▪ Project Development: good project pipeline
▪ Industrial Construction: solid progress made, with good performance on the
Gotthard
▪ Infrastructure Construction: well below expectations
Major objectives achieved
▪ Project Development: expanded portfolio
▪ Foundations laid for improved claims management
▪ Groupwide standardized salary system in introduction
Expansion
▪ Acquisition in Norway – second home market for tunnelling
▪ Order successes in the Middle East with micro tunnelling
▪ Real Estate: strengthened market presence in central Switzerland
▪ Roadmap to the first Implenia sustainability report
© Implenia | Corporate Center | September 2011 | Page 11
Key figures and operating income
Key figures for the Group
in CHF millions June 2011 June 2010 +/- in %
Consolidated revenue 1'084.7 1'062.9 2.1%
EBIT before special charges 13.0 16.8 -22.8%
Operating income 12.3 19.4 -36.3%
1.1% 1.8%
Consolidated profit 4.2 12.5 -66.1%
0.4% 1.2%
© Implenia | Corporate Center | September 2011 | Page 12
General Contracting / Services – revenue and EBIT
High revenue, record EBIT
501513519524555
HY1
2010
HY1
2011
HY1
2007
HY1
2008
HY1
2009
Revenue (IFRS)
6.1
9.1
6.6
3.6
9.4
1.7%
1.2%
1.8%
1.3%
0.7%
0
2
4
6
8
10
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
HY1
2011
HY1
2010
HY1
2009
HY1
2008
HY1
2007
EBIT before special charges
in CHF millions
© Implenia | Corporate Center | September 2011 | Page 13
General Contracting / Services – order books as at 30.06.2011
Still at a high level
Europaallee, Baufeld E, Zurich High-performance data centre at ETH Zurich, Lugano
Secured revenue
17.3%
66.3%
2012 2013 2011
95.7%
Secured revenue in %
in CHF millions
Order book June 2011 June 2010
West 662.2 587.0
Central 263.2 309.6
East 185.6 133.3
Zurich 483.0 742.1
Reuss 9.1 10.9
TOTAL order book 1'603.1 1'782.9
© Implenia | Corporate Center | September 2011 | Page 14
Real Estate (Project Development) – invested capital and EBIT
Portfolio expanded
149
181192
222211
HY1
2011
HY1
2010
HY1
2009
HY1
2008
HY1
2007
10.3
4.2
1.2
6.4
8.9
0
2
4
6
8
10
12
HY1
2010
HY1
2009
HY1
2008
HY1
2007
HY1
2011
Invested capital EBIT before special charges
in CHF millions
© Implenia | Corporate Center | September 2011 | Page 15
Real Estate (Project Development) – development projects
Promising second half-year
Project earnings realized in H1 2011
Project earnings forecasted for H2 2011
Property in the Implenia portfolio
Legend
Winterthur
The circle sizes reflect the project
earnings achieved or forecasted
© Implenia | Corporate Center | September 2011 | Page 16
Tunnelling – revenue and EBIT
Strong performance!
83
71
83
69
78
HY1
2011
HY1
2010
HY1
2009
HY1
2008
HY1
2007
11.513.2
17.1
12.0 11.5
14.7%13.8%
18.6%20.5%
17.5%
0
5
10
15
20
0%
5%
10%
15%
20%
25%
30%
35%
40%
HY1
2010
HY1
2009
HY1
2008
HY1
2007
HY1
2011
Revenue (IFRS) EBIT before special charges
in CHF millions
© Implenia | Corporate Center | September 2011 | Page 17
Tunnelling – order book as at 30.06.2011
Reduction in line with expectations
A8 tunnel bypass, Lungern Microtunnelling project, Al Ain (Abu Dhabi, UAE)
Secured revenue
28.1%
51.0%
2012 2013 2011
98.7%
Secured revenue in %
in CHF millions
Order book June 2011 June 2010
West 247.4 291.1
German-speaking Switzerland 40.2 100.0
Alps (incl. NEAT) 227.3 309.4
Abroad 10.7 0.7
TOTAL order book 525.6 701.2
© Implenia | Corporate Center | September 2011 | Page 18
Prime Buildings – revenue and EBIT
Further improvement
3.6
0.5
1.7
2.5
5.1
HY1
2011
HY1
2010
HY1
2009
HY1
2008
HY1
2007
-2.1
-3.0
-3.4
-0.9-1.1
-3.5
-3.0
-2.5
-2.0
-1.5
-1.0
-0.5
0.0
HY1
2011
HY1
2010
HY1
2009
HY1
2008
HY1
2007
Revenue (IFRS) EBIT before special charges
in CHF millions
© Implenia | Corporate Center | September 2011 | Page 19
Prime Buildings – order book as at 30.06.2011
Torre Turin
Central Olympia Stadium, Sochi (RUS) Torre Banca Intesa San Paolo, Turin (IT)
Secured revenue
60.9%
80.5%
2013 2012 2011
99.6%
in CHF millions
Order book June 2011 June 2010
Prime Buidlings 89.4 105.0
TOTAL order book 89.4 105.0
Secured revenue in %
© Implenia | Corporate Center | September 2011 | Page 20
Infrastructure Construction – revenue and EBIT
EBIT slumped in the first half-year
535505500
524 511
HY1
2011
HY1
2010
HY1
2009
HY1
2008
HY1
2007
-6.7-7.4
-6.0-6.4
-12.8
-2.5%
-1.3%-1.5%
-1.2%-1.2%
-15
-10
-5
0
-4.5%
-4.0%
-3.5%
-3.0%
-2.5%
-2.0%
-1.5%
-1.0%
-0.5%
0.0%
HY1
2011
HY1
2010
HY1
2009
HY1
2008
HY1
2007
Revenue (IFRS) EBIT before special charges
in CHF millions
© Implenia | Corporate Center | September 2011 | Page 21
Infrastructure Construction – analysis of EBIT decline
Price and margin pressure, and project management errors
Efficiency
improvements
Result
30.06.2011
-12.8
0.2
Works
-0.9
Forex
effects
-0.4
Margin pressure
in specialist fields
(competitors from
abroad)
-1.7
Project losses
Building Zurich
-2.1
Lack of CM as
a result of lower
volumes
(Zurich, Basel)
-1.2
Prior-year result
-6.7
in CHF millions
© Implenia | Corporate Center | September 2011 | Page 22
Infrastructure Construction - situation analysis
Positive and negative trends
Market
segment
Current environment Measures Trends
Civil works
Constant public-sector
investment
Fierce price competition in
certain regions
Opportunities in infrastructure
renewal
Further optimizations in
equipment
Exploit economies of scale
Buildings Healthy real estate market
Very low entry barriers result in
price and volume competition
Adjust capacities in the centres
Maintain services in the regions
(full service provider)
Foundation
engineering
More vigorous international
competition (forex problem)
Importance of equipment
capacity utilization
Make further improvements /
optimizations to equipment
utilization
Civil
engineering
Constant market volume
Opportunities in infrastructure
renewal (incl. energy sector)
Exploit economies of scale
Enhance expertise
© Implenia | Corporate Center | September 2011 | Page 23
Infrastructure Construction - situation analysis
Colossal pressure on the price front
0%
20%
40%
60%
80%
100%
difference most expensive to best offer2 difference Implenia to best offer calc. CM Implenia
Analysis of rejected tenders in the Bern, Solothurn region 1st half of 2011
Tender prices average 17.1 % below those of the same period in the previous year
© Implenia | Corporate Center | September 2011 | Page 24
Infrastructure Construction – list of measures
Numerous measures have been initiated
Measures initiated:
Transfer of capacities
Structural adjustments
Headcount adjustments
in sustainably unprofitable
markets
Flexibilization of
fixed costs (equipment)
Optimization of
purchasing
abroad
Transfer of
product mix
© Implenia | Corporate Center | September 2011 | Page 25
12%
6%
82%
reduction in temporary staff
reduction in permanent staff
remaining headcount
Infrastructure Construction – headcount
Headcount adjustments primarily in Buildings segments
Total, last 12 months
Basel Berne Zurich 13%
4%
5%
27%
10%
Headcount of Infrastructure
Construction, total
July
2011
4,870
temp
-168
perm
78
July
2010
4,960
+/- staff
© Implenia | Corporate Center | September 2011 | Page 26
Infrastructure Construction – order book as at 30.06.2011
Discipline is key to winning orders
NEAT lots 033 and 041, Erstfeld Electrolux Professional AG, Sursee
Secured revenue
2.3%
23.5%
2012 2013 2011
83.0%
Secured revenue in %
in CHF millions
Order book Juni 2011 Juni 2010
West 217.7 239.2
East / Zurich 145.0 233.5
Alps 115.0 143.2
Central 129.7 151.0
Civil engineering 182.8 183.9
TOTAL order book 790.2 950.8
© Implenia | Corporate Center | September 2011 | Page 27
Interim Financial Statements 2011
IFRS reporting
© Implenia | Corporate Center | September 2011 | Page 28
EBIT – Operating income – Consolidated earnings
Below the previous year
in CHF millions June 2011 June 2010 +/- in %
EBIT divisions 15.7 19.1 -17.6%
Holding costs and special charges -3.4 0.3
Operating income 12.3 19.4 -36.3%
1.1% 1.8%
Financial result (net) -5.6 -3.2
Profit before tax 6.8 16.1 -58.2%
0.6% 1.5%
Tax -2.5 -3.7
Consolidated profit 4.2 12.5 -66.1%
0.4% 1.2%
© Implenia | Corporate Center | September 2011 | Page 29
Income statement – Key figures
Heavily seasonal
0%
1%
2%
3%
4%
5%
6%60
50
40
30
20
10
0
2011
4.2
2010
52.5
12.5
40.0
2.2%
2009
47.1
6.2
40.9
2.1%
2008
40.0
5.5
11.3
23.2
1.7%
2007
25.5
3.5
22.0
1.1%
HY2
Sale of Privera
HY1
Margin
0%
1%
2%
3%
4%
5%
6%
7%
8%120
100
80
60
40
20
0
2011
29.4
2010
112.6
36.6
4.7%
2009
104.6
29.1
4.6%
2008
98.5
32.4
11.3
4.2%
2007
84.7
24.2
3.6%
HY2
Sale of Privera
HY1
Margin
Consolidated earnings EBITDA
60.5
75.5 76.0 54.8
in CHF millions
© Implenia | Corporate Center | September 2011 | Page 30
Balance sheet – Assets
High liquidity – NWC under control
in CHF millions June 2011 June 2010 +/- in %
Cash and cash equivalents, securities 246.9 250.1
Debtors / work in progress 712.5 767.3
Real estate operations 229.4 169.9
Other current assets 112.1 88.1
Total current assets 1'300.9 1'275.4 2.0%
Total non-current assets 368.8 352.6 4.6%
Total ASSETS 1'669.7 1'628.0 2.6%
© Implenia | Corporate Center | September 2011 | Page 31
Balance sheet – Liabilities
Equity ratio at a good 30%
in CHF millions June 2011 June 2010 +/- in %
Current financial liabilities 1.4 3.2
Creditors / work in progress 706.6 759.7
Other current liabilities 190.4 166.9
Total current liabilities 898.4 929.8 -3.4%
Non-current financial liabilities 198.4 198.1
Deffered taxes, provisions 76.7 42.2
Total non-current liabilities 275.1 240.3 14.5%
Equity and non-controlling interest 496.2 457.9 8.4%
Total LIABILITIES 1'669.7 1'628.0 2.6%
© Implenia | Corporate Center | September 2011 | Page 32
Cash flow statements
Reduction in advance payments
12.5
Free cash flow
-61.5
Cash flow
investments
-11.0
Non-monetary and
other transactions
3.8
Cash flow for real
estate transactions
0.6
Change in
advance payments
-3.0
Change in NWC
(excl. advance
payments and real
estate transactions)
-64.4
Result
2010:
4.2
-101.4
-7.3 -6.9 -12.6
-28.0
-50.8
2011:
in CHF millions
© Implenia | Corporate Center | September 2011 | Page 33
Currency situation
Very small exposure
6.6% 4.1%
89.4%
Assets
Currency translation effect (equity) CHF 2.6 mn1
Currency transaction effect (P/L) CHF 0.2 mn
1 incl. CHF 51 mn in intercompany loans
9.3%
3.4%
87.3%
share FX excl. NOK share FX NOK share CHF
Liabilities
2.9% 2.9%
94.2%
Revenue
© Implenia | Corporate Center | September 2011 | Page 34
Interim Financial Statements 2011
Acquisition of Betonmast Anlegg AS
© Implenia | Corporate Center | September 2011 | Page 35
2
3
5
2
1
1
4
Strong player with firm roots
Acquisition of Betonmast Anlegg AS
Concrete pole locations 1. Oslo head office
2. Bergen
3. Sandnes
4. Ålesund
5. Trondheim
Logistical locations 1. Sande i Vestfold
2. Hakadal 246 strong Vikings…
Employees No. Ø age
White collar 109 43.4 years
women 13 n/a
men 96 n/a
Blue collar 137 39.7 years
women 0 n/a
men 137 n/a
TOTAL 246 41.4 years
© Implenia | Corporate Center | September 2011 | Page 36
Activities
Acquisition of Betonmast Anlegg AS
41%
14%
39%
7% Tunnelling
Road building
Civil engineering
Other
Revenue breakdown by divisions1
Tunnelling
Road building
Civil engineering
1 Base: 2010 revenue
Volume in EUR mn
100122
10799
E 2011 2010 2009 2008
© Implenia | Corporate Center | September 2011 | Page 37
Norway – an attractive market with growth potential
Acquisition of Betonmast Anlegg AS
Constant growth in construction market volumes of approx. NOK 45 bn,
based on and supported by…
▪ a strong Norwegian economy
▪ public-sector economic initiatives during the financial crisis of 2010
▪ National Transport Plan 2010 - 2019
The Norwegian infrastructure construction is
picking up …
National Transport Plan 2010 – 2019:
an investment in the Norwegian future
Quelle: Prognosesenteret AB
Quelle: Norwegian Ministry of Transport an Communications, National
Transport Plan 2010-2019
-
5'000
10'000
15'000
20'000
25'000
2002-2005 2006-2009 2010-2013 2014-2019
ann
ual
ava
rag
e, i
n N
OK
m
illio
ns
Road
Railway
Roads (incl. bridges and tunnels) Power & energy Railways
© Implenia | Corporate Center | September 2011 | Page 38
The perfect WIN – WIN situation
Acquisition of Betonmast Anlegg AS
▪ Amalgamation with partner to finance its
growth strategy
▪ Lack of expertise on major projects
▪ Insufficient logistical capacities
▪ Compensation for revenue from expiring NEAT
lots
▪ Consistent implementation of international
strategy in the area of infrastructure and tunnel
construction
Major-project expertise
TBM technology
Logistics
Resources (manpower,
financing)
Market presence, contacts
Reputation
Market knowledge
Technical specialists
In Norway arises a new, powerful construction services provider with growth potential
Win-win
situation
© Implenia | Corporate Center | September 2011 | Page 39
Interim Financial Statements 2011
Outlook
© Implenia | Corporate Center | September 2011 | Page 40
Current order books
Still high with good visibility
Secured revenue
14.1%
49.6%
95.7%
2013 2011 2012
© Implenia | Corporate Center | September 2011 | Page 41
Outlook
Good reasons for confidence
The market in 2011
▪ Struggle for volumes in building production
▪ Infrastructure construction still at a high level
▪ Intact demand for investment properties, location is crucial
▪ Regional differences are sharpening
The outlook for business performance in 2011
▪ High order books provide security
▪ General Contracting on levels
▪ Good, expanded portfolio for Project Development
▪ Tunnelling Switzerland: discernible improvements on the Gotthard
▪ Overseas business picking up speed, first consolidation of Norway
▪ Infrastructure Construction: an appealing H2 2011 result despite strong
headwinds
© Implenia | Corporate Center | September 2011 | Page 42
Disclaimer
THESE MATERIALS DO NOT CONSTITUTE OR FORM PART OF ANY OFFER TO SELL OR ISSUE, OR ANY
SOLICITATION OR INVITATION OF ANY OFFER TO PURCHASE OR SUBSCRIBE FOR, ANY SECURITIES,
NOR SHALL PART, OR ALL, OF THESE MATERIALS OR THEIR DISTRIBUTION FORM THE BASIS OF, OR BE
RELIED ON IN CONNECTION WITH, ANY CONTRACT OR INVESTMENT DECISION IN RELATION TO ANY
SECURITIES.
THE MATERIALS MIGHT CONTAIN FORWARD-LOOKING STATEMENTS BASED ON THE CURRENTLY HELD
BELIEFS AND ASSUMPTIONS OF THE MANAGEMENT OF IMPLENIA AG (THE "COMPANY", AND
TOGETHER WITH ITS SUBSIDIARIES, THE "GROUP"), WHICH ARE EXPRESSED IN GOOD FAITH AND, IN
THE MANAGEMENT’S OWN OPINION, REASONABLE. FORWARD-LOOKING STATEMENTS INVOLVE
KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS, WHICH MAY CAUSE THE
ACTUAL RESULTS, FINANCIAL CONDITION, PERFORMANCE, OR ACHIEVEMENTS OF THE GROUP, OR
INDUSTRY RESULTS, TO DIFFER MATERIALLY FROM THE RESULTS, FINANCIAL CONDITION,
PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING
STATEMENTS. GIVEN THESE RISKS, UNCERTAINTIES AND OTHER FACTORS, RECIPIENTS OF THIS
DOCUMENT ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING
STATEMENTS. THE GROUP DISCLAIMS ANY OBLIGATION TO UPDATE THESE FORWARD-LOOKING
STATEMENTS TO REFLECT FUTURE EVENTS OR DEVELOPMENTS. OPINIONS AND FORWARD-LOOKING
INFORMATION PRESENTED HEREIN ARE BASED ON GENERAL INFORMATION GATHERED AT THE TIME
OF WRITING.