Implenia Presentation for Analysts PC 10.3.2011

Financial Analysts' Conference

Zurich, 10 March 2011

A. Affentranger / Hp. Fässler / B. Fellmann

© Implenia | Corporate Center | March 2011 |

Annual Financial Statements December 2010Key points


Key points – Implenia in its 5th year

In year 5, a successful reality in the market based on:§ a motivating vision§ lived values§ a clear strategy

Steadily improving profitability and balance sheet § for the 5th time in succession EBITDA, operating income and

consolidated profit have increased§ balance sheet further strengthened

Sustainability embedded in the Group strategy§ key priorities defined§ consistent and transparent implementation

Systematically implemented strategy pays off


Numerous strategic and operational highlightsKey points – Implenia in its 5th year

Management strengthened§ Hanspeter Fässler CEO since 1 September 2010§ René Zahnd Head of Implenia Real Estate and member of Group

Management since 1 March 2010§ Significant strengthening of key management positions in all divisions

(internal and external appointments)

Acquisition of Sulzer Immobilien§ Significant strengthening of our project development portfolio§ Strategic investment in the future

Breakthrough on the Gotthard§ 15 October 2010§ Implenia is the leading company in 3 out of 5 projects§ Technical and logistical high performance


Annual Financial Statements December 2010Construction and real estate market in Switzerland


A 50 billion (a year) industryStable trend over the last few years

0

5

10

15

20

25

30

35

40

45

50

55

60

65

1951

1953

1955

1957

1959

1961

1963

1965

1967

1969

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

CHF

billio

ns

Total real construction spending in Switzerland in CHF billions(based on 2006 CPI)Source: BfS (data), SBV (graphic))

1973 First oilshock

1979/80 Second oil shock

Investment bonus and housing law(1990 bis

1995)

Work starts on NEAT(1996)


Prices develop slower than costsMargin pressure can only be compensated through improved productivity

Cost and price trends in civil works(main contract work)

Cost and price trends in building construction(main contract work)

Price and cost index in civil works (Q1 2002=100) Price and cost index in civil works (Q1 2002=100)

Price

and c

ost in

dex i

n civi

l wor

ks(Q

1 200

2=10

0)

Price

and c

ost in

dex i

n buil

ding w

orks

(Q1 2

002=

100)

Costs: construction cost index (Civil works, reinforced concrete)Prices: BfS construction price index (Civil works, main contract work)

Costs: construction cost index (building construction, main contract work, multi-family homes)Prices: BfS construction price index (Civil works, main contract work)


Healthy price level for Swiss real estateReal estate prices in Switzerland


Real change in the construction indexAt a high level, driven by civil works

Swiss Construction index (in real terms)Swiss Building index (in real terms)Swiss Civil works index (in real terms)


Regional breakdown of building expenditure 2010-2016

Source: BAKBASEL; ‘Hochbauprognose 2010 - 2016’

Growth 2010 in %Growth 2011 in %Growth 2012-2016 in %

Short and long term outlook

< -1-1 to 00 to 1

> 1

Growth construction in total 2010-2016 in % p.a.

Building constructionUneven trends across the country


Summary of construction and real estate market in Switzerland

European construction market§ Recovery is apparent

Swiss construction market § Remains at a high level§ Continuous public investment in civil works§ Healthy fundamentals of the real estate market

- Low interest rates- Immigration / housing needs- No real estate bubble- But trends vary in different parts of the country

Margin pressure§ Remains a characteristic of the construction industry§ Must be offset by improvements in productivity

Overall positive outlook


Annual Financial Statements 2010Key figures and operating income


Key figures and operating incomeHighlights

Operational§ Operating income (+ 14.8 %) and consolidated profit (+ 11.5%) § strict cost management§ Invested capital (excluding acquisition of Sulzer) once more reduced§ ROIC exceeds the 20 percent mark for the first time§ Order books remains high

Financial§ Free cash flow

- at record levels (due to effective NWC management, disciplined investments)- Acquisition of Sulzer Immobilien AG 100% financed with cash flow

§ Financing situation- Funding base significantly bolstered with the proceeds of the new bond (CHF 200

million)- Net cash position CHF 150 million


Key figures and operating income

in CHF million 2010 2009 +/- in %

Consolidated revenue 2'388.4 2'279.8 4.8%

EBIT before special charges 72.6 75.5 -3.8%

Operating income 77.7 67.6 14.8%

3.3% 3.0%

Consolidated profit 52.5 47.1 11.5%

2.2% 2.1%

Key group figures


General contracting / Services – revenues and EBITRecord EBIT in 2nd half of the year in CHF million

2010

1,137

501

636

2009

1,111

513

598

IFRS revenue

0

5

10

15

20

2.5%

2.0%

3.0%

1.5%

1.0%

0.5%

0.02010

15.4

1.4%

2009

17.4

1.6%

2008

15.5

1.4%

2007

10.2

0.9%

2006

12.1

1.0%

EBIT marginEBIT before special charges

EBIT before special charges

HY1HY2

6.1

2010

15.4

9.3

2009

17.4

9.1

8.3


HY1HY2


Secured revenue

Production output

GC / Services – Regional distribution and orders as of 28.2.2011in CHF million

9.1%

57.8%

201320122011

94.9%

2%

29%

12%

33%

24%

East (131.8m)Central (268.3m)West (379.8m)

Reuss (21.6m)Zurich (335.2m)

Maintower, Zurich

2011 volumes secured

Order book Feb. 2011 Feb. 2010

West 700.0 551.7 Central 292.1 315.8 East 159.3 165.9 Zurich 586.0 743.6 Reuss 11.1 13.0

TOTAL order book 1'748.5 1'790.0


Real estate (project development) – invested capital and EBITROIC 18.1% in CHF million

65

2010

200

134

2009

178

Invested capital

0

5

10

15

20

25 30.0%

25.0%

20.0%

15.0%

10.0%

5.0%

0.0.2010

20.9

18.1%

2009

21.4

15.9%

2008

10.3

5.2%

2007

15.4

7.7%

2006

6.03.6%

ROIC (like for like)EBIT before special charges

EBIT before special charges / ROIC (like for like)

Implenia ex. SIMMOSIMMO

2010

20.9

10.3

10.6

2009

21.4

4.2

17.2


HY1HY2


Winterthur

Good, regionally well distributed portfolioReal estate (project development) – development projects


Infrastructure – Revenue and EBITRecord result in CHF million

2010

1,201

535

666

2009

1,123

505

618

IFRS revenue

0

5

10

15

20

25

3025.1

2010

3.0%2.5%2.0%1.5%1.0%0.5%0.0

2.1%

2009

24.6

2.2%

2008

24.4

2.2%

2007

21.5

1.9%

2006

8.80.8%

4.0%3.5%



HY1HY2

2009 2010

-6.7

25.1

31.8

24.6

-7.4

32.0


HY1HY2


Production output

in CHF million

1.3%11.7%

2011

55.2%

20132012

7%

13%15%

14%

26%24%

Other (100.8m)Engineering (177.7m)Central (205.2m)Alps (194.2m)East/Zurich (344.8m)West (322.2m)

Infrastructure – Regional breakdown and order book as of 28.2.2011Excellent regional anchoring


West 188.5 215.4 East/Zurich 173.2 237.3 Alps 125.4 145.9 Central 90.5 107.8 Engineering 130.2 198.1 Miscellaneous 20.0 2.1

TOTAL order book 727.9 906.6

Pont de le Poya, Fribourg

Secured revenue


Tunnelling – Revenue and EBITHigh production output in CHF million

6669

2010

152

83

2009

137

71

IFRS revenue

0

5

10

15

20

25

30 30.0%

25.0%

20.0%

15.0%

10.0%

5.0%

0.52010

18.6

12.3%

2009

24.4

17.8%

2008

26.5

17.4%

2007

22.1

16.2%

2006

20.7

14.5%



HY1HY2

2010

18.6

11.5

7.1

2009

24.4

13.2

11.2


HY1HY2


Production output

Cross-City Link, Zurich

26.3%

51.4%

201320122011

93.3%

2%

50%

16%

32% Abroad (6.1m)Alps/NEAT (168.7m)

West (53.2m)D- Switzerland (107.6m)

in CHF million

Tunnelling – Regional distribution and orders as of 28.02.20112011 secured


West 260.8 248.3 German-speaking Switzerland 60.9 139.6 Alps (inc. NEAT) 285.1 365.4 Abroad 12.0 2.6

TOTAL order book 618.7 755.9

Secured revenue


Prime Buildings – Revenue and EBITFirst results take effect in CHF million

5

10

4

6

12009 2010

14

IFRS revenue

-8

-6

-4

-2

0

-3.1

20102007

-6.6

2008

-4.1

2006 2009

-7.9



HY1HY2

-3.0

-4.9

2009

-1.0

-7.9

-2.1

-3.1

2010


HY1HY2


Prime Buildings – Order book as of 28.02.2011in CHF million

31.3%

70.1%

201320122011

73.5%

Sochi Stadium, RussiaNew headquarters of Banca Intesa Sanpaolo, Turin

Turin: a highlight


Prime Buildings 91.1 4.6 TOTAL order book 91.1 4.6

Secured revenue


Key figures and operating incomeOperating income


Real estate 36.3 38.9 -6.5%

Infrastructure 25.1 24.6 1.9%

Industrial construction 15.6 16.5 -5.6%

Holding overhead costs and special charges 0.7 -12.4 105.4%

TOTAL operating income 77.7 67.6 14.8%

3.3% 3.0%


Annual Financial StatementsIFRS Reporting


Holding cost and special chargesNo more burden from special charges in CHF million

6615,0002,500

0-2,500-5,000-7,500

-10,000-12,500-15,000

Impact on operating income

Immat. depreciation

1.871

Special charges

0

IAS 19

6.880

Holding overhead

costs

-4.348

5,0002,500

0-2,500-5,000-7,500

-10,000-12,500-15,000

Impact on operating income

-12.328Immat.

depreciation

2.075Special charges

3.405

IAS 19

2.411

Holding overhead

costs

-4.437

2010 2009-

--

-


Operating income – Group earnings


Real estate 36.3 38.9 -6.5%Infrastructure 25.1 24.6 1.9%Industrial construction 15.6 16.5 -5.6%Holding overhead costs and special charges 0.7 -12.4 105.4%

TOTAL operating income 77.7 67.6 14.8%

3.3% 3.0%

Financial income (net) -9.6 -5.0 92.0%

Taxes -15.6 -15.6 0.0%


2.2% 2.1%

EBITDA 112.6 104.6 7.6%

4.7% 4.6%

CHF 50 million exceeded


Income statement – key figures

23.8 32.4 29.1 36.618.0

11.3

020406080

100120

0%1%2%3%4%5%6%

2010

112.6

4.7%

2009

104.6

4.6%

2008

98.5

4.2%

2007

84.7

3.6%

2006

54.4

2.3%

HY1Privera saleHY2EBITDA margin

EBITDA

-11.95.5 12.56.211.3

-20-10

0102030405060

-2%

-1%

0%

1%

2%

3%

4%

2006

6.10.3%

2010

52.5

2.2%

2009

47.12.1%

2008

40.01.7%

2007

25.5

3.5

Privera saleHY1

MarginHY2

Group earnings

in CHF million

1.1%

Continuation of positive earnings trends


Balance sheet – assetsHigh liquidity – working capital under control


Cash and cash equivalents, securities 349.6 129.8

Real estate operations 218.0 168.7

Other current assets 733.9 725.8

Total current assets 1'301.5 1'024.3 27.1%

Total non-current assets 375.5 357.5 5.0%

Total ASSETS 1'677.0 1'381.8 21.4%


Financing secured for the next five yearsBalance sheet – liabilities


Current financial liabilities 1.6 42.2

Other current liabilities 903.6 871.7

Total current liabilities 905.2 913.9 -0.9%

Non-current financial liabilities 198.2 0.7

Deferred taxes, provisions 78.2 40.9

Total non-current liabilities 276.3 41.6 564.3%

Equity and non-controlling interests 495.5 426.3 16.2%

Total LIABILITIES 1'677.0 1'381.8 21.4%


Cash flow statements



Depreciation / non-cash expenses 32.3 46.3

Movement in net current assets 57.6 31.0

Interest / taxes / miscellaneous -3.9 -5.2

Cash flow from operating activities 138.5 119.1 16.3%

Investment activities -31.5 -26.5

Acquisition of businesses (Sulzer Immob. AG) -67.1 -

Cash flow from investment activities -98.6 -26.5 272.3%

Free cash flow 39.9 92.7 -56.9%

Acquisition of businesses (Sulzer Immob. AG) 67.1 -

Free cash flow (like for like) 107.1 92.7 15.6%

Implenia as a cash machine in CHF million


Sustainable value creation!Return on invested capital (ROIC)

347.0340.4

386.6

522.1

358.0

050

100150200250300350400450500550

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

2010

9.3%

22.4%

2009

9.4%

19.9%

2008

9.4%

15.3%

2007

9.6%

7.4%

2006

9.5%

4.8%

ROIC (operating income/invested capital)Pre-tax WACC

Invested capital

in CHF million


Media and Financial Analysts' ConferenceAnalysis of annual results for 2010 and outlook


Implenia is well on track

Strong market position § High level of good quality orders

Operationally on the right track§ Good productivity trend of construction activities§ Project development underway at a level above CHF 20 million§ Situation for renovations corrected, solide 2nd half for GC§ Tunnelling highly profitable in Switzerland§ International business clearly better§ Holding cost and special charges well under control

Strong balance sheet§ Broader based financing with good capital base§ High net liquidity§ Excellent cash flow

Assessment of the 2010 annual results


in CHF million

Order intake since the end of July 2010Well diversified

At end-Feb 2011

3,1861,281

516

427

At end-July 2010

3,52522 projects

975 projects

Orde

r int

ake p

rojec

ts

> CH

F 10

milli

on

Orde

r int

ake p

rojec

ts

< CHF

10 m

illion

orde

r boo

k rev

ised

since

1.8.2

010

Project City DivisionVolume

in Mio. CHF

Wohnüberbauung Le Nouveau Prieuré Genève Real Estate 57.4 Bürogebäude Centre CSS Romandie Lausanne Real Estate 41.4 Wohn- und Gewerbeüberbaung Areal Brückenweg Visp Real Estate 38.6 Wohnüberbaung Birnbäumen St.Gallen Real Estate 26.4 UBS Branch Format ganze Schweiz Real Estate 24.3 Wohnüberbauung Wiesental Horgen Real Estate 22.5 Wohnüberbauung Centralpark Dietikon Real Estate 21.9 Wohn-/Geschäftshaus Liebefeld K5 Bern Real Estate 21.2 Fabrikumbau Usine 56, Philip Morris International Neuchâtel Real Estate 17.2 Fabrik- und Verwaltungsgebäude Electrolux Sursee Real Estate 16.0 Centre socio-cultures Ecublens Real Estate 13.3 Gewerbeüberbauung Murtenstrasse Bern INFRA 12.9 Geschütztes Wohnen Le Croset - Résidence du Bois Ecublens Real Estate 12.7 Wohnüberbauung Résidence des vignes La Neuveville Real Estate 12.3 Überbauung Brückenweg Visp INFRA 11.9 Al Ain Asset Enhancement Al Ain (Emirat Abu Dhabi) IIC 11.7 Bahngallerie Arge GEZIM, Zen Hohen Flühen Bitsch INFRA * 11.5 Aufstockung Technopark Zürich Zürich Real Estate 11.2 Wohnüberbauung Kolbenstrasse Emmen Real Estate 10.9 Wohnüberbauung Residenza Giardino Minusio Real Estate 10.6 Kindekrippe NEMO, Crèche Philip Morris Int. Boudry Real Estate 10.5 Wohnüberbauung Mürgelistrasse Zuchwil Real Estate 10.2

TOTAL 426.5

* execution in joint ventures


Orders assured – good quality

Secured revenue

8.0%

37.4%

201320122011

79.5%

in PK nur Jahreswerte!

Order book by customer category as %

40%

38%

22%

Public sector and agenciesExternal AAAExternal

3,500

3,000

2,500

2,000

1,500Feb 2011

3,186

Feb 2010

Feb 2009

Feb 2008

Feb 2007

Trend in orders

Order book as of 28.2.2011in CHF million


Real estate 1'748.5 1'790.0 Infrastructure 727.9 906.6 Industrial construction 709.9 760.5

TOTAL order book 3'186.2 3'457.1


OutlookConfidence for 2011

Market in 2011§ No significant changes of the economic condition of the construction

industry- Stable high-level demand in civil engineering and infrastructure works- Building construction/ residential construction stable thanks to continued high

demand§ Increased regional differences

2011 Outlook§ Optimism because of full order books (= our main indicator)§ We continue to pursue our strategy consistently§ Further improvements are possible in all divisions

- systematic risk, claim and cost management- Standardization of processes

§ Medium term target of CHF 100 million in operating income confirmed


Media and Financial Analysts' ConferenceOther topics


Background§ COMCO has been investigating the Implenia branch in Buchs (Aargau) since

10.6.2009 as well as numerous other road and civil engineering companies in the canton of Aargau to determine whether competition regulation has been violated

§ Implenia is cooperating with COMCO

Internal investigation and consequences§ Our internal investigation has been finalized § The concerned employees has been transferred internally or issued written

warnings § Internal control processes have been modified and strengthened

Our position§ We clearly advocate open competition and are against practices that

hinder competition

Investigation by the Competition Commission (COMCO)Internal investigation completed and conclusions drawn


New Board members § Strengthening the sustainability, industrial and financial expertise

of the Implenia Board of Directors§ Moritz Leuenberger§ Theophil Schlatter

Changes in Group Management§ Peter Bodmer (Co-Head of the Industrial Construction Division) is leaving

Implenia § New management responsibilities will be communicated in due course

OrganisationPersonnel changes


Compensation report§ Consultative ballot will be taken for the first time§ In accordance with recommendations from Ethos Foundation

Dividend§ Dividend increased from CHF 0.70 to CHF 0.90 per share§ Payment once again in the form of a par-value reduction

General Meeting of 19 April 2011Further proposals to the shareholders


SPI outperformed by 63%Performance of Implenia shares

Δ = 10%

Δ = 63%

TSR: 12.6%Dividend yield: 2.8% (4.2%)


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.

Implenia Presentation for Analysts PC 10.3.2011

Documents

Transcript of Implenia Presentation for Analysts PC 10.3.2011