Impn equity story e by Implenia AG

Daring to Shape our Future Equity Story September 2014

Implenia at a glance Implenia is…

… the leading construction company in Switzerland. … well diversified covering the whole range of construction and construction services. … growing and developing an international footprint in its neighbour countries and Scandinavia. … carrying sustainability out in practice. … providing value for its shareholders (ROIC). … providing healthy and strong numbers. … delivering a solid track record.

LEADER DIVERSIFIED GROWTH INTERNATIONAL SUSTAINABLE VALUE SAFETY SUCCESS © Implenia | Equity Story | September 2014 | Page 2

â&#x20AC;Ś the leading construction company in Switzerland

ÂŠ Implenia | Equity Story | September 2014 | Page 3

Strategic direction Our Vision

We develop and build the Switzerland of tomorrow. We establish ourselves as an expert for complex international infrastructure projects. Sustainability is our passion. We are the partner of choice for customers and employees alike.

ÂŠ Implenia | Equity Story | September 2014 | Page 4

Implenia plans and builds for life. With pleasure. A young company with over 150 years of experience 2006 1862 Hermann Preiswerk founded the future Batigroup AG

Merger of Zschokke and Batigroup to Implenia

1997 Merger of Preiswerk, Stuag and Schmalz to the #2 in the Swiss market

1872

Conradin Zschokke founded the future Zschokke AG

2013

Acquisition of Betonmast Anlegg AS, Norway

Implenia Salzburg established, Austria

2011

1977 1998 Zschokke evolves (i.a. Goehner Merkur) to the #1 in Switzerland

2011

1st Sustainability Report

2010 Acquisition of Sulzer Real Estate

2013 Implenia reached for the 1st time EBIT target of CHF 100 mn

2013 New mid term EBIT target of CHF 140-150 mn announced

ÂŠ Implenia | Equity Story | September 2014 | Page 5

Implenia market position Leader in the Swiss market 3'057



Market leader in  infrastructure construction, approx. 10% market share  general contracting, 15%-20% market share  one of the leaders in the Swiss real estate development sector



Transparent  only listed Swiss construction company (IFRS) 1'071

600

620

659

735

760

1'100

778

475

Development GC/TC Construction Source: Companies, Implenia estimates 2013, revenue in CHF mn © Implenia | Equity Story | September 2014 | Page 6

â&#x20AC;Ś well diversified covering the whole range of construction and construction services

ÂŠ Implenia | Equity Story | September 2014 | Page 7

Our segments Our segments reflect the clout of our organisation

Modernisation  Consulting  TC/GC  Engineering  Wooden Construction  Execution

Development  Real estate project development

Buildings  TC/GC  Complex building construction

Tunnelling & CE  Underground construction  Civil engineering  Foundation engineering

Construction Switzerland

Norge

 Civil works

 Underground construction

 Roads  Regional building construction

 Infrastructure  Niches

 Plants

 Refurbishment

“One company, one goal, one spirit”

A broad portfolio Breakdown key divisional figures 2013 Order Book

Revenue 14.3%

5.4%

9.3%

10.4%

3.8% 5.5%

25.2%

13.0%

47.8%

56.9% 8.4%

EBIT

Full Time Employees 9.0%

3.2%

8.6%

7.1% 0.9%

Modernisation 32.1%

21.7%

21.3%

Development Building Tunnelling &CE Construction Switzerland

17.9%

16.1%

Norge

46.5% 15.6%

ÂŠ Implenia | Equity Story | September 2014 | Page 9

Modernisation “Finger on the pulse of the market - for the Switzerland of tomorrow” Modernisation Order Book Revenue EBIT Margin Invested Capital Full Time Employees

Market 

Conversion of residential and commercial properties

Divisional Share

-2% 7%

Supra-regional institutional investors and large corporations (investors, operators and owners)

Activities 

Consulting, Planning, General and Total Contracting and Execution



Wooden construction and engineering

2012 26 93.4 -3.4 -3.7% -4.9 289

2013 173 133.2 3.7 2.7% -5.9 394

Change 555% 43% N/A 642 bp N/A 36%

Strategic direction 

Modernisation 

Target clients 

in % 5% 4% 3%

in CHF million





Focus on key regions Zurich, Basel, Aargau From 2015 roll out in the whole of Switzerland

Consulting  

Support in building up the Modernisation and Development pipeline Building up interdisciplinary know-how

Development “Finger on the pulse of the market - for the Switzerland of tomorrow” Development Order Book Revenue EBIT ROIC Invested Capital Full Time Employees

Market 

Institutional real estate and investment market

Target clients



Investors, operators and owners of real estate, institutional investors and large corporations

Divisional Share

in % 0% 6% 32% 64% 1%

2012 230.2 31.6 16.4% 192.2 53

2013 190.9 36.5 23.7% 153.8 50

in CHF million

Change N/A -17% 16% 730 bp -20% -6%

Strategic direction 

Focus on target markets



Cultivating growth markets like wooden & modular construction

Activities 

Project Development



Wooden & modular construction



Technical planning activities (including implementation) by Implenia Engineering

Buildings “We build the Switzerland of tomorrow” in CHF million

Buildings Order Book Revenue EBIT Margin Invested Capital Full Time Employees

Market 

Industrial building construction market in Switzerland and in Southern Germany

Target clients 

Supra-regional owners and operators of real estate



Institutional investors and major corporations

Divisional Share

in % 57% 48% 16% -45% 21%

2012 1'845 1'408.2 19.7 1.4% -124.6 1'006

2013 1'816 1'655.3 18.3 1.1% -107.7 1'180

Change -2% 18% -7% -29 bp N/A 17%

Strategic direction 

Aligning the organisation to an integrated model

 Joint calculation and risk management  Establishing regional competence centres  Increase market share of internal execution from 10% to 20%  Develop new verticals like health care

Activities 

General and total contracting



Industrial buildings



Construction in Southern Germany

Tunnelling & Civil Engineering “We are the experts for demanding infrastructure projects” in CHF million

Tunnelling & CE Order Book Revenue EBIT Margin Invested Capital Full Time Employees

Divisional Share

Market 

National infrastructure

-11% 16%

National operators and owners of infrastructure



State-owned, partially state-owned and major private corporations (e.g. energy providers)

Activities 

Bundling infrastructure competences: Underground, bridge and power station construction



Foundation engineering



Infrastructure refurbishment

2012 592 332.6 35.7 10.7% 41.1 1'100

2013 415 292.1 20.4 7.0% -27.3 862

Change -30% -12% -43% -374 bp -166% -22%

Strategic direction 

Tunnelling: Keep leadership in Switzerland and develop export business (tunnel boring machine market)



Bridge construction: Keep leadership in CH and target specific major European projects



Civil Engineering: Expand major project business



Foundation Engineering: Increase internal share to 20% and optimize costs and investments with European structure



Maintenance: Achieve market leadership

Target clients 

in % 13% 8% 18%

Construction Switzerland “Deep roots in the Swiss market. First-class implementation” in CHF million

Construction CH Order Book Revenue EBIT Margin Invested Capital Full Time Employees

Market 

Road construction, civil engineering and regional building construction

Divisional Share

88% 47%

Municipalities and cantons



Private individuals, SME (very locally/regionally oriented)

Services 

Road construction and civil engineering



Regional building construction

2012 386 865.5 22.3 2.6% 207.4 2'824

2013 331 872.2 24.8 2.8% 209.8 2'579

Change -14% 1% N/A 26 bp 1% -9%

Strategic direction 

Cost leadership  

Target clients



in % 10% 25% 22%

Lean Construction Improve risk management



White areas: Profitable geographical growth in regional civil engineering, road and building construction



Collaboration with sectors: Interaction in infrastructure construction

Norge “Leading provider of complex infrastructure projects” in CHF million

Norge Order Book Revenue EBIT Margin Invested Capital Full Time Employees

Market 

Tunnelling and infrastructure for Norway’s and Scandinavia’s water, energy and transportation industry

Divisional Share

7% 9%

National operators and owners of infrastructure



Large public, semi-public, and private companies

Services 

Complex infrastructure projects: tunnels, roads, dams, bridges



Niche markets

2012 251 218.5 3.0 1.4% -2.5 395

2013 456 320.9 10.3 3.2% 16.5 478

Change 82% 47% N/A 183 bp -760% 21%

Strategic direction 

Growth  

Target clients 

in % 14% 9% 9%



Horizontal expansion: northern and western Norway and Sweden Vertical expansion: integration of specialised know how in the value chain

Ongoing efficiency initiatives (continuous improvement of project management and processes)

Corporate Center & Technical Support “Our internal service provider” Corporate Center

Supporting the operative areas with central services:            

Accounting Business Development Controlling Financial Risk Management HR Investment Management Investor Relations Legal Services Marketing/Communications Procurement Reporting/Consolidation Treasury

Technical Support

Responsibilities 

Centralised procurement for the Group



Development of strategies, processes and standards for       

Health and Safety Innovation Insurance IT Lean Construction/IMS Sustainability Technical Risk Management

Business model “One Company” - Covering the entire life cycle

Idea / concept Modernisation

Funding

integrated business model comprehensive portfolio of products and services

Management

Development

Realisation

Planning, Engineering

â&#x20AC;Ś growing and developing an international footprint in its neighbour countries and Scandinavia

ÂŠ Implenia | Equity Story | September 2014 | Page 18

Implenia Group Locations in Switzerland and abroad Europe

Switzerland

Local operating presence

French German

Rumantsch

Italian

Revenue Split

West Africa

14%

2013

2009 Abroad

Domestic

Local operating presence ÂŠ Implenia | Equity Story | September 2014 | Page 19

Strategic direction Expansion of service portfolio and targeted growth Fields of growth    

Target Markets

Switzerland – Modernisation & White Spots Norway/Scandinavia – Tunnelling & CE Austria/Germany – Tunnelling & CE Germany – Buildings

Infrastructure

Building

Inorganic and organic growth   

2011: Acquisition of Betonmast Anlegg (Norway) 2012: Freiburg/Karlsruhe established (green field) 2013: Implenia Austria established (green field)

National expansion

International expansion Growth Areas

Business Unit Modernisation

Refurbishment

Expert & Premium Builder

White Spots Expert

Infrastructure Specialist

Development Buildings

Generalist

Tunnelling & CE Construction CH

Discounter

Premium

â&#x20AC;Śis carrying sustainability out in practice

ÂŠ Implenia | Equity Story | September 2014 | Page 21

Sustainability Implenia From vision to actual implementation

Anchored firmly in the vision

2009

Commitment redoubled

2010

Internal standard introduced: GeNaB

Basic and continuing training intensified

Network for Sustainable Construction in Switzerland (SNBS)

2011

First EcoDrive training

2012

1st report published

Participation certificate Winning performance / Winning the future for pilot phase of SNBS

Energy/ resource consumption

2013

Supplier requirements defined

Initation of coverage

2014

Code of Conduct amended

2015

2nd report published

ÂŠ Implenia | Equity Story | September 2014 | Page 22

Sustainability at Implenia Sustainability strategy built on five main themes

Sustainable products & services – Customer relations – Supplier relations – Sustainable constr.

Attractive working environment – Training / Education – Talent management – Health and safety

Respect for the environment – Reduction of energy use and resource consumption

Social Commitment & Compliance – Code of Conduct – Stakeholder dialogue – Communication

Financial Excellence – Create value – Sustainable profit improvement

Significance of the construction industry in Switzerland Environment – 30% of greenhouse gas emissions – 40% of national energy consumption – 75% of waste generated

Society – 50,000 accidents at work every year – 1.5 million buildings – 70,000/5,000 km of roads/railway tracks

Economy – CHF 62 billion investment a year – Investment reflects about 10% of GDP – 330,000 jobs

Potential in all areas Environment – Dwindling supplies of energy/resources – Loss of biodiversity – Environmental degradation

Society – Population growth – Urbanization / demographic change – Health and safety

Economy – Sustainable investors/shareholders – Competitive pressure – Shortage of expertise © Implenia | Equity Story | September 2014 | Page 23

â&#x20AC;Ś providing value for its shareholders

ÂŠ Implenia | Equity Story | September 2014 | Page 24

Return on invested capital (ROIC) Substantially above capital costs ROIC before tax

350

340

ROIC after tax

346

343

300

267

250

41,3% 46,0%

200 150 100

251

19,9%

22,4%

27,3%

50 0

9,4%

2009

9,3%

2010

9,5%

2011

9,5%

2012

20131

70%

350

60%

300

50%

250

40%

200

30%

150

20%

100

10%

340

346

343

70%

267

33,1%

15,3%

17,9%

251 36,0%

60% 50% 40% 30%

21,4%

20% 10%

7,6%

7,3%

2009

2010

2011

2012

20131

Invested capital (in CHF million)

ROIC (Operating income / Invested capital)

ROIC (NOPAT / Invested capital)

WACC before tax

WACC after tax

1 Restated

ÂŠ Implenia | Equity Story | September 2014 | Page 25

Economic Profit Further increase in value

in CHF million

51,5

52 (3,8)

3,3

7,9

48 46 44,1 0 Economic Profit 2012

Growth

Assessment



Norge and Buildings more than compensated volume decline in Swiss underground construction

Cost efficiency

Cost efficiency  

Omission of high margin underground construction Efficiency improvements in project development

Capital efficiency

Economic Profit 2013

Capital efficiency 



Lower rise in net working capital compared to volume growth Less investments into the own land bank but more sales of good law © Implenia | Equity Story | September 2014 | Page 26

Sector benchmark Clearly above average IFRS Operating Income Margin

ROIC 1)

50%

46.0%

45% 5%

40% 3.7%

3.0%

3.9%

3.8%

3.3%

35% 27.3%

30% 25%

2.5%

19.9%

20%

1.6%

2% 1%

41.3%

22.5%

15.3%

15% 10%

0.7%

4.7%

7.4%

5% 0%

0% 2006

2007

Implenia

2008 Median

2009

2010

2011

25-Percentile

2012

2013

75-Percentile

2006

2007

Implenia

2008 Median

2009

2010

2011

25-Percentile

2012

2013

75-Percentile

Peers: Skanska, ACS, Strabag, NCC, Veidekke, Hochtief, Balfour Beatty, Bilfinger, BAM, AF Gruppen, YIZ

Definition: ROIC = (EBIT / IC) whereas the year end IC is calculated without cash.

Source: Bloomberg, Implenia ÂŠ Implenia | Equity Story | September 2014 | Page 27

â&#x20AC;Ś providing healthy and strong numbers

ÂŠ Implenia | Equity Story | September 2014 | Page 28

Profit and loss statement Consolidated profit has increased significantly in CHF million

Dec 13

Dec 121

+/- in %

Consolidated production output

3,288.0

2,998.7

9.6%

Consolidated revenue

3,057.4

2,800.4

9.2%

EBIT Business Units

114.0

108.8

4.7%

1.6

1.5

7.2%

115.5

110.3

4.8%

3.8%

3.9%

-7.9

-11.5

-31.1%

Tax

-25.1

-21.9

14.9%

Consolidated profit

82.6

76.8

7.5%

2.7%

158.4

153.6

Miscellaneous / Holding Operating income Financial result

EBITDA

1 Restated

3.0%

/ Impact from IFRS 11: Revenue 104,7 CHF million, EBIT 4,8 CHF million ÂŠ Implenia | Equity Story | September 2014 | Page 29

Balance Sheet Good equity ratio of almost 30 per cent in CHF million

2.196 Cash and cash equivalents

2.196

26.5%

Current liabilities 58.1%

Current Assets

54.6% 13.3%

Non-Current Assets

18.8% Assets

28.6%

Non-Current liabilities Equity incl. Minorities

Liabilities

ÂŠ Implenia | Equity Story | September 2014 | Page 30

Cash Flow Statement Revenue growth ties up working capital in CHF million

134,5

(129,2)

142,8 33,3

(28,0)

(30,1) (44,4)

2012

78,9

Profit before changes in NWC

Receivables

Liabilities

Work in progress/joint ventures (equity method)

Real estate transactions

Interest and taxes

Investments and M&A

Free cash flow

138,3

72,4

(64,8)

48,9

(4,7)

(12,0)

(44,5)

133,6

ÂŠ Implenia | Equity Story | September 2014 | Page 31

Order book High visibility and quality thanks to well-filled order book Solvent order book

High order order book backlog High level

in CHF million

4,000

3,540 3,500

3,283

3,242

August 2014 3,249

31,9%

36,9% 36,9%

3,008 3,000

Third parties AAA Public sector

31,2%

2,500 Jun 2010 Jun 2011 Jun 2012 Jun 2013 Jun 2014

Secured revenue 2014/15

Diversified order book 1.752

3.236

1.573 62,5%

28,6%

2014 Actual year

22,4%

2015 Prior year

3.190

3.101

62,4%

2012

2925

Projects > 10 mn

Projects < 10 mn

processed projects 2013 Higher target margin

ÂŠ Implenia | Equity Story | September 2014 | Page 32

â&#x20AC;Ś delivering solid track record

ÂŠ Implenia | Equity Story | September 2014 | Page 33

Outlook Confident about the second half-year Group

Modernisation Development



Thanks to a continuing positive market environment, a leading market position and full order books, Implenia is confident about the second half of 2014 .



The operating earnings for 2014 as a whole will exceed CHF 100 million.



The group is sticking to the medium-term EBIT target of CHF 140-150 million.

Outlook remains positive

Buildings

Clear positive result expected in the second half of 2014

Tunnelling & CE

End of NEAT tunnelling work will lead to a fall in earnings in the second half of the year

Construction Switzerland

High order backlog allows optimism

Norge

On target according to plan © Implenia | Equity Story | September 2014 | Page 34

Outlook Our mid term target – since February 2013 in CHF million

Goal

2012

2013

Growth

+ 200 CHF million in Modernisation + 300 CHF million abroad

2.800

3.057

Profitability

EBIT 140-150 CHF million Margin +/- 4.5%

109

114

3.9%

3.7%

Mid term target Excellent track record in CHF million

116

110 94 78

59 39 17 54 2006

85 2007

99 2008

105 2009

113 2010

141 2011

154 2012

158 2013

2014

Operating Income

EBITDA

New Mid-Term Target (EBIT CHF 140-150 mn)

Merger Target (EBITDA CHF 100 mn)

2015

2016

Mid-Term Target (EBIT CHF 100 mn)

ÂŠ Implenia | Equity Story | September 2014 | Page 36

Financial Time Series 2009-2013 Appendix

ÂŠ Implenia | Equity Story | September 2014 | Page 37

Financial Time Series 2009-2013 Consolidated revenue and order book Consolidated revenue

Order book

3.500 3.000 2.500

2.280

2.388

2.523

2.800

3.057

3.500 3.000 2.500

2.000

1.500

1.000

500

0 2009

2010

2nd half-year

in CHF million

2011 1st half-year

2012

2013

3.445 695

3.070 419

3.154

3.101

329

213

799

905

875

808

1.875

1.843

1.920

2.089

2009

2010

2011

2012

3.190 78 957

2.155

2013

Revenue in third subsequent year et seq. Revenue in second subsequent year Revenue in first subsequent year

ÂŠ Implenia | Equity Story | September 2014 | Page 38

Financial Time Series 2009-2013 EBIT Business Units and Operating income EBIT Business Units

Operating income

120

108,8

80 60

114,0

93,5

100 80,0

120

100

77,0

4% 3,5%

3,2%

3,7%

3,9%

3,7%

3% 2%

2010

EBIT-margin (in %)

1 Restated

2011

2012 2nd half-year

20131 1st half-year

110,3

115,6

67,6

3,0%

7% 6%

93,7

77,7

2009

in CHF million

3,3%

3,7%

3,9%

3,8%

3% 2% 1% 0%

2009

2010 Margin (in %)

2011

2012

2nd half-year

20131 1st half-year

ÂŠ Implenia | Equity Story | September 2014 | Page 39

Financial Time Series 2009-2013 EBITDA and consolidated profit EBITDA

Consolidated profit

160

140,5

120

104,6

5,6% 4,6%

153,7

158,4

112,6

5,5%

4,7%

5,2%

40 0 2009

2010

EBITDA-margin (in %)

1 Restated

in CHF million

2011

2012

2nd half-year

10%

100

20131 1st half-year

6% 76,9

82,6

61,4

52,5

47,1

2,2%

2,1%

2,4%

2,7%

2012

20131

0% 2009

2010

Margin (in %)

2011

2nd half-year

1st half-year

ÂŠ Implenia | Equity Story | September 2014 | Page 40

Financial Time Series 2009-2013 Net cash position & balance sheet ratios Net cash position

Balance sheet ratios

600 500

300

583

537 402

400

350 249

200

247 150

100

441 370

371

321

2.400 2.000 1.600

1.888

2.026 2.074

2.197 2.196

1.628 1.677 1.670 60%

227 47

100%

80%

193 155

1.200

48% 44%

40%

39%

38%

38% 34%

0 -100

in CHF million

40%

800 -201 -200 -200 -209 -215 -216 -214 -212

-200 -300

28%

30%

400

29%

26% 22%

25%

29%

0 Jun Dec Jun Dec Jun Dec Jun Dec 2010 2010 2011 2011 2012 2012 20131 20131

Jun Dec Jun Dec Jun Dec Jun Dec 2010 2010 2011 2011 2012 2012 20131 20131

Cash and cash equivalents

Liabilities

Financial liabilities

Equity

Net cash position

Equity in % of assets

1 Restated

20%

Gearing in % (Financial liabilities/Equity)

ÂŠ Implenia | Equity Story | September 2014 | Page 41

Financial Time Series 2009-2013 Current assets and current liabilities Current assets

in CHF million

Current liabilities 1.782 1.659 1.470

1.301

1.024 129

349

169 68

218

409

86 395

537

583

403

247 93 473

252

217 143

142 476

513

249

253

254

252

326

2009

2010

2011

2012

20131

914 42

108

905 2

1.048 167 143

273

1.190 5 269

1.276 4 281

241

363

241

217

523

543

604

675

628

2009

2010

2011

2012

20131

Cash and cash equivalents

Financial liabilities

Real estate transactions

Other liabilities

Other accounts receivable

Trade payables

Trade receivables

Work in progress

Work in progress 1 Restated

ÂŠ Implenia | Equity Story | September 2014 | Page 42

Financial Time Series 2009-2013 Non-current assets, equity and non-current liabilities Non-current assets

Equity & non-current liabilities

840 772

205

884

211

199

358 8 52

376 14 60

in CHF million

418 26 57

415 8 61

414 6 55

244

254

262

223

229

2009

2010

2011

2012

468 41 1

426

208 83

124

495

544

549

2010

2011

2012

920

629

91 20131

2009

Other assets

Financial liabilities

Financial investments

Provisions & deferred tax liabilities

20131

Equity

Property, plant & equipment Intangible assets 1 Restated

ÂŠ Implenia | Equity Story | September 2014 | Page 43

Financial Time Series 2009-2013 Cash Flow analysis Net cash position

in CHF million

Free Cash Flow

321,4

371,1

133,6

78,9

2012

20131

92,7 67,3

149,5

193,5

39,9

85,9

2009

2010

2011

2012

20131

2009

2010

2011

Cash and cash equivalents

Cash flow from operating activities

Financial liabilities

Cash flow from investment activities

Net Cash Position

Free Cash Flow

1 Restated

ÂŠ Implenia | Equity Story | September 2014 | Page 44

Financial Time Series 2009-2013 Key figure share Earnings per share (in CHF)

2,56

2009

2,88

2010

3,31

2011

Equity per share (in CHF)

+0,3 (+8%) 3,82

2012

in CHF million

4,11

20131

24,8

26,8

29,1

2009

2010

2011

+4,1 (+14%) 28,9

2012

33,0

20131

+5,4 (+51%)

Price-earnings-ratio

15,80

11,30

11,10

10,44 7,20

2009 1 Restated

2010

2011

2012

20131 ÂŠ Implenia | Equity Story | September 2014 | Page 45

Financial Time Series 2009-2013 Key figure dividend +0,2 (+14%)

Gross dividend

1,40 0,70

2009

0,90

2010

Payout ratio

1,60 27,40%

1,10

2011

in CHF million

2012

2013

2009

+2,3%p.

31,30%

33,30%

2010

2011

36,60%

38,90%

2012

20131

Dividend yield 4,70% 2,40%

2009 1 Restated

3,50%

2,80%

2010

-1,0%p. 2,50%

2011

2012

20131 ÂŠ Implenia | Equity Story | September 2014 | Page 46

Agenda & IR Keep in touch

FY 2014: 24th February 2015 AGM 2015: 24th March 2015

Investor contacts

Beat Fellmann, CFO E-mail beat.fellmann@implenia.com

Serge Rotzer, Head of IR E-Mail serge.rotzer@implenia.com ÂŠ Implenia | Equity Story | September 2014 | Page 47