September 2014 A LEADING TECH COMPANY · 2015. 7. 6. · WITH STRONG GROWTH IN AMEA AS WELL WHO WE ARE 3% of total employees (~1,300) located in AMEA Figures in €M AMEA revenues

A LEADING TECH COMPANY September 2014

A LEADING TECH COMPANY | 2

This presentation has been produced by Indra for the sole purpose expressed therein. It should not in any event be constructed as an offer or invitation to purchase shares of the Company.

Its content is purely for information purposes and the statement it contains may reflect certain forward-looking statements, expectations and forecasts about the Company at the time of its elaboration. These expectations and forecasts are not in themselves guarantees of future performance as they are subject to risks, uncertainties and other important factors beyond the control of the Company that could result in final results materially differing from those contained in these statements. The Company does not assume any obligation or liability in connection with the accuracy if the mentioned estimations and is not obliged to update or revise them.

This disclaimer should be taken into consideration by all the individuals or entities to whom this documents is targeted and by those who consider that they have to make decisions or issue opinions related to securities issued by Indra.


INDEX

Who we are

2013 Performance

Outlook 2014

Brief look at 1H14


INDRA: GLOBAL FOOTPRINT

WHO WE ARE

A technology company providing real time, smart, efficient solutions and services to clients all around the world

38,000 employees

€2.9bn revenues in 2013

Local presence in

45

countries

78 Excellence Centers &

Software Labs

Projects in

138 countries

Services 35%

Solutions 65%


IN A BROAD RANGE OF VERTICALS

WHO WE ARE

as % of Sales

as % of Solutions

Transport & Traffic

Intelligent Traffic Systems &

Smart Mobility

Railways, Mass Rapid Transit &

Buses

21%

Energy & Industry

Network Management (Smart Grid)

17%

Public Administrations & Healthcare

Voting

Healthcare

17%

Financial Services

Core insurance

16%

ePayments

Telecom & Media

12%

Social Media

Digital Platforms Plant Management & Energy Markets

Security & Defense

Simulation

Border Control

17%

BPO Application Management

IT Outsourcing

Key Solutions

Services

Air Traffic Air Defense Customer Management

Taxes & Justice Core Banking Networks & Communications


AN INTERNATIONAL DIVERSIFIED COMPANY

WHO WE ARE

Asia, Middle East & Africa

Spain

Latam

>45% of workforce in 45 international subsidiaries

>40% of total revenues in

emerging markets

Figures as of 2013

Europe & USA

28%

13%

20%

39%


68% 66%

64% 61%

57%

43%

39%

32% 34%

36% 39%

43%

57%

61%

CONSOLIDATING GLOBAL PRESENCE

WHO WE ARE

Spanish revenues as % of total Indra

Revenues outside of Spain as % of total Indra

Revenues outside of Spain

17% CAGR since

beginning of the

crisis

2008 2009 2010 2011 2012 2013 2007


197

831

2007 2013

4.2x

Mexico

19%

Colombia

10%

Chile

6%

Peru

6%

Argentina

5%

Others

19%

Brazil

35%

WITH STRONG GROWTH IN LATAM

WHO WE ARE

39% of total employees (~15,000) located in Latam

Figures in €M

Latam revenues growth since 2007 % of total Latam

+22% growth in Latam (local currency) in 2013


WITH STRONG GROWTH IN AMEA AS WELL

WHO WE ARE

3% of total employees (~1,300) located in AMEA

Figures in €M

AMEA revenues growth since 2007 % of total AMEA

Revenue growth of 28% CAGR since 2007

86

381

2007 2013

4.4x

Africa

28%

Middle East

26%

Asia

46%


SPANISH REVENUES SUPPORTED BY THE CORPORATES THROUGH THE CRISIS

WHO WE ARE

7% 3%

-3% -3%

-18%

-11%

7%

-9% -1%

-10%

-26%

Corporate clients

Public clients

2008 2009 2010 2011 2012 2013

604 692

864

433

1,468

1,125

2007 2013

+15%

2013 vs 2007

Public

Corporates

Public Spain as % of Indra’s Total Revenues

40% 15%

-50%

-23%

38%

62%

Spanish market growth rate

-23%


39%

3%4%

54%

Nearshore

Factories

BUILDING NEARSHORE AND OFFSHORE PRODUCTION AND DELIVERY CAPABILITIES

WHO WE ARE

A significant part dedicated to

export business

Local presence in 14 countries

>38,000 professionals running

the business with overall utilization capacity of 94%

Asia, Middle East & Africa

Europe & North America

+ c.4,000 subcontractors

providing operational flexibility worldwide

Spain

Latam

Personnel breakdown


SOLUTIONS AND SERVICES CARRY OUT DIFFERENT CONTRIBUTION MARGINS

WHO WE ARE

Contribution Margin

16.6%

11.9%

15.0%

7.2%

7.8%

Solutions Services Total Overheads &

Others

Indra EBIT

Margin 2013

(recurrent)

2013 Figures


FOCUSED INVESTMENTS TO TAKE ADVANTAGE OF THE DEMAND FOR SOLUTIONS

WHO WE ARE

Main areas of investment

(1) Intangible Capex net of subsidies (€M)

Net Intangible (R&D) CAPEX evolution (1)

Smart Grid & Customer Management Solutions for Utilities

Core Banking & Insurance Systems

Surveillance Healthcare

Railway Solutions Airlines Revenue

Accounting

38

51 53

69

51 47

1.6%

2.0% 2.1% 2.6%

1.7% 1.6%

0,0%

1,0%

2,0%

3,0%

4,0%

5,0%

6,0%

7,0%

8,0%

9,0%

10,0%

0

10

20

30

40

50

60

70

80

2008 2009 2010 2011 2012 2013

Net Intangible Capex (€M)

Net Intangible Capex / Sales


0.43 € 0.50 €0.61 € 0.66 € 0.68 € 0.68 €

0.34 € 0.34 €

0.35 €

55% 55% 55% 55%59%

62%

42%48%

0%

10%

20%

30%

40%

50%

60%

0

0,2

0,4

0,6

0,8

1

1,2

2007 2008 2009 2010 2011 2012 2013 2014

Ordinary Dividend Extraordinary Dividend Pay-Out

2.3%2.7%

3.7% 4.0%

5.3%

6.9%

3.4%2.8%

WHO WE ARE

Dividend yield calculated on Dec 31st of previous year; Pay-out calculated on previous FY results

Dividend Yield

Dividends paid on

Dividend accommodated to free cash flow generation, setting a floor in 2013

DIVIDEND TRACK RECORD


SHAREHOLDERS (July 2014)

WHO WE ARE

(*) Board of Directors representation

CNMV data. Identified shareholders with a position in excess of 3%

% as of

Share Capital Sociedad Estatal de Participaciones Industriales S.E.P.I (*)

Fidelity Group

Invesco

Corporación Financiera Alba (*)

Others 20.1%

11.3%

11.3%

4.0%

53.3%


INDEX

Who we are

2013 Performance

Outlook 2014

Brief look at 1H14


2013 PERFORMANCE

Operating margin at 7.8%

Spain: Public clients down by 23%, but bottoming out

Positive revenue growth in local currency (+2% YoY)

2013 targets achieved

Positive FCF evolution

NWC and Capex stable

Strong performance in Latam (+22% in local currency)

2013: MAIN MESSAGES


MAIN 2013 FIGURES

2013 PERFORMANCE

2013 Variation

vs. 2012

Objectives

2013

Order Intake (€M) 3,029 B-t-B 1.04x Book-to-Bill >1x

Revenues (€M) 2,914 +2% (1) Slightly positive (3)

EBIT margin Recurrent 7.8% (2) -0.7pp Around 8%

Net profit (€M) 116 -9% ---

Net Capex (€M) 64 (3) -14% 65 - 75

NWC (DoS) 109 +5 100 – 110

Free Cash Flow 52 (3) +35% ---

Net Debt (€M) 622 -11 ---

(1) In local currency; -0.9% in reported terms (2) Before extraordinary costs of 28 M€ (3) Adjusted for the impact of the disposal of the business of advanced management of digital documentation in Spain and Mexico. Revenues in 2013 of this activity

reached 19 M€ and were 49 M€ in 2012. Order Intake totals 19 M€ in 2013 and 28 M€ in 2012. Includes positive impact (25 M€) in FCF from divestment


INDEX

Who we are

2013 Performance

Outlook 2014

Brief look at 1H14


GUIDANCE FOR 2014: FREE CASH FLOW

OUTLOOK 2014

Net debt reduction and adequate shareholders’ remuneration

Indra’s 2014 main and

priority target is to generate Free Cash Flow above

100 M€ Recurrent EBIT margin similar to 2013

NWC & Capex below 2013 levels

Main considerations and perspectives:

Positive revenue growth in local currency

• Low/mid single digit decline in Spain

• Double digit growth in local currency in Latam & AMEA

• Flat performance in Europe


INDEX

Who we are

2013 Performance

Outlook 2014

Brief look at 1H14


BRIEF LOOK AT 1H14

1H14 MAIN MESSAGES

Recurrent EBIT margin (7.7%) in line Restructuring of 12M€ represents bulk of 2014 plan

FY14 guidance of more than 100M€ reiterated

NWC up, as anticipated, to 112 DoS. Third quarter expected also high, to decrease in fourth quarter

Revenues +5% in local currency; Solutions +9%, Services -2%

Spain improving slightly Further improvement for 2H14 based on macro leading indicators

Latam decelerates but will maintain double digit local currency growth at year end. AMEA to reflect in 2H14 end of non-recurrent projects


1H14 RESULTS: MAIN HEADLINES

BRIEF LOOK AT 1H14

1H14 Variation

Local currency / reported

1H13

Order Intake (€M) 1,647 +6% / -1% 1,671

Revenues (€M) 1,476 +5% / -1% 1,490

EBIT margin Recurrent (1) 7.7% -0.2 pp 7.9%

Net profit Recurrent (1) (€M) 69 +9% 64

Net Capex (€M) 28 +14% 25

NWC (DoS) 112 +6 106

Free Cash Flow -3 --- 11(2)

Net Debt (€M) 652 +1% 649

(1) Before extraordinary costs of 12 M€

(2) Flat once adjusted for divestment of services business


Spain Int.

Energy & Industry 229 -3% -9%

Financial Services 255 +6% -1%

Telecom & Media 160 -13% -24%

PPAA & Healthcare 291 +25% +21%

Transport & Traffic 292 +10% +4%

Security & Defence 248 -0% -1%

Total 1,476 +5% -1%

1H14 (€M) Local Currency

35

% Variation

Reported

PPAA & HEALTHCARE AND TRANSPORT & TRAFFIC OUTPERFORM

BRIEF LOOK AT 1H14


BRIEF LOOK AT 1H14

Spain 575 633 -9% -9%

Latam 384 401 +14% -4%

EU/USA 308 280 +11% +10%

AMEA 209 176 +22% +18%

Total 1,476 1,490 +5% -1%

(€M)

1H14

(€M) Local Currency Reported

1H13 % Variation

SPAIN IMPROVES, LATAM AND AMEA SHOW SOLID PERFORMANCE


1H14 SOLUTIONS: ACCELERATING GROWTH

1H14

Order Intake (€M) 1,026 +9% / +2% 1,004

Revenues (€M) 953 +9% / +4% 919

Weight

(% total revenues) 65% +3 pp 62%

Book to Bill 1.08x -2% 1.09x

Backlog / LTM

Revenues 1.31x -2% 1.33x

Contribution Margin 16.8% -0.7 pp 17.5%

1H13

33

SOLUTIONS

BRIEF LOOK AT 1H14

Variation Local currency

/ reported


1H14 SERVICES: WEAK FIRST HALF; TO IMPROVE IN SECOND

Order Intake (€M) 621 +1% / -7% 667

Revenues (€M) 522 -2% / -9% 572

Weight

(% total revenues) 35% -3 pp 38%

Book to Bill 1.19x +2% 1.17x

Backlog / LTM

Revenues 1.06x +5% 1.01x

Contribution Margin 11.6% -0.6 pp 12.2%

1H14 1H13

34

SERVICES

BRIEF LOOK AT 1H14

Variation Local currency

/ reported

Investor Relations [email protected]

Avda. de Bruselas 35

28108 Alcobendas,

Madrid Spain

T +34 91 480 98 00

F +34 91 480 98 47

www.indracompany.com

Documents

September 2014 A LEADING TECH COMPANY · 2015. 7. 6. · WITH STRONG GROWTH IN AMEA AS WELL WHO WE ARE 3% of total employees (~1,300) located in AMEA Figures in €M AMEA revenues