media and financial analysts conference · 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000...

Media and Financial Analysts

Conference

Dietlikon, 1 September 2011

Hp. Fässler / B. Fellmann / A. Henniger

© Implenia | Corporate Center | September 2011 |

Interim Financial Statements 2011

Swiss Construction and Real Estate Market


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



Vacancies in the core regions remain low

Locational quality and vacancy rates 2010

Source: Credit Suisse Economic Research, Geostat



Sustained demand

Source: Schweizer Baublatt, Credit Suisse Economic Research

Number of residential units

Breakdown of building permits by type of use



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


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


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



Highlights and key figures


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


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%


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


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


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


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


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


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%


in CHF millions


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


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


in CHF millions


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


Prime Buidlings 89.4 105.0




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


in CHF millions


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


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


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


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

http://www.safetymarking.ch/images/600/210586/warnschild-spannungszeichen-schwarzer-blitz.jpg




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


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%


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




IFRS reporting


EBIT – Operating income – Consolidated earnings

Below the previous year


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%


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


Balance sheet – Assets

High liquidity – NWC under control


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%


Balance sheet – Liabilities

Equity ratio at a good 30%


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%


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


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



Acquisition of Betonmast Anlegg AS


2

3

5

2

1

1

4

Strong player with firm roots


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


Activities


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


Norway – an attractive market with growth potential


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


The perfect WIN – WIN situation


▪ 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



Outlook


Current order books

Still high with good visibility

Secured revenue

14.1%

49.6%

95.7%

2013 2011 2012


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


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.

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