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Activities in 2016 and Change of Cycle

10/07/2017

Activities in 2016 and Change of Cycle

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Activities in 2016 and Change of Cycle

Various objectives were reached in 2016. These important achievements were the result of the work of a team of people that contributed to realising them, led by Engineer Slim, the Board of Directors and the senior management.

In financial terms, a new increase in share capital of €709 million was achieved, Cementos Portland Valderrivas was restructured and FCC Group’s debt was reduced by €1,883 million. Optimising the debt reduced the interest rates from more than 4.5% to 2.5%. Divestitures of more than €294 million were made and €171 million in payments for work already undertaken was recovered. FCC also participated in two increases of share capital in Realia. The levels of contract renewals reached historic highs of 99% in Aqualia and 93% in the environment division.

In addition, new projects have been achieved. For example, the environment division increased its global portfolio by four times its annual income, including starting the construction of an energy from waste plant in Edinburgh (Scotland) as well as commencing operations at a new materials recycling facility in Dallas (USA). Given that 85% of FCC’s income comes from the environment and water management areas, the company is gradually progressing towards being a predominantly services company. Another achievement, in a consortium with Grupo Carso and others, was securing the contract for the construction of the new Mexico City airport terminal for €3,900 million. FCC Aqualia also signed new international contracts, bringing its works portfolio to a historic maximum of €15,000 million. A broad working plan was undertaken in financial terms, incorporating financial restructuring and the guaranteeing of future income.

As well as restructuring the finances, it was also necessary to restructure various operational aspects of the business. In operational terms, new organisational structures were defined, the personnel in the construction division was adjusted to match the real demand level (with the laying off of 649 persons), purchases were institutionalised by centralising them, a deep control and reduction of costs was carried out and a “new culture” of working as a “single company” with synergies across divisions was established.

With these actions, the company is changing its path. The financial results have improved. Since April 2016, FCC achieved profits instead of persistent losses, meaning a new cycle for FCC. The Group reduced its cost structure considerably, compared to income and increased productivity. Many challenges still need to be overcome but a new and more positive route for FCC has been taken in various areas. This represents a new cycle for the company.