Sacyr, S.A. (SCYR) Earnings Call Transcript & Summary

[Presentation] Good morning. Good morning, ladies and gentlemen. I'm Manuel Manrique, Sacyr Chairman and CEO. I would like to welcome you all. We would like to extend our deepest appreciation for joining us today. So welcome to this Investor Day. The purpose of this presentation is to convey to all of you that we are certain that this is the right time to invest in Sacyr because the share price does not actually reflect the company's actual value. Through different presentations we will walk you through today, we would like to share with you the 2 cornerstones supporting our strategy. First off, we have a full commitment to reducing our corporate debt, our recourse debt drastically to reach a 0 level by 2025. And we will do so by keeping our investment at pace in the amount of EUR 150 million per year, to say, during the strategic plan, which is EUR 750 million, taking into account our business cash flows and our dividend distribution coming from concessions after, of course, honoring our investment obligations, including some asset rotation and divestments using mature and nonstrategic assets, depending on market conditions at each point in time. To this end, we will assess our Sacyr Concesiones asset in 2019. Perhaps you attended our show at that point, we were at EUR 2.8 billion. So due to the maturity of these assets and due to these new awards, we have reached this amount. So like in 2019, we believe that this is a sound valuation, a prudent valuation. It's safe. We are certain about it. And there's proof of it. In 2019, our asset valuation [indiscernible] was valued at EUR 200 million. And 4 months later, we divested in that company during the pandemic, and this should be highlighted. And we sold the company 10% higher than this valuation with very significant surplus gains. So throughout this Investor Day, we will provide you with some business model details. We will focus on concessions, and we will also talk about sustainability, which is integrated into our model. Our key assets, mainly the United States, in Chile, Colombia and Italy, by 2022, many of such assets will become operational. As a result, we will be driving our business further. This road map we'll walk you through today will be presented by each of my colleagues who are experts on the details of these projects. So the first speaker will be Carlos Mijangos, Sacyr CFO; followed by Rafael Gomez del Rio, Sacyr Concesiones CEO; next, Rodrigo Jimenez-Alfaro, Sacyr Concesiones CFO; Ms. Marta Gil, who is the General Manager of Strategy, Innovation and Sustainability; and finally, Maria Muñoz, the Head of M&A of the company. To close off this event, I will draw some conclusions about, well, the key messages of this presentation, and we will have a Q&A session to answer any questions you may have. So without any further ado, let me now give the floor to Mr. Carlos Mijangos, Sacyr CFO.

Good morning, everybody. Thank you, Mr. Chairman. First, some practical announcements. We have already sent the information about this event to the Spanish market's securities commission, and all the information has already been posted to our website. We will walk you through today's agenda very quickly. First of all, we're going to talk about our strategy and key financials. Next, the CEO of Sacyr Concesiones will speak about Sacyr Concesiones today. He will talk about its competitive advantage. We will also talk about ESG criteria being integrated into all of the group's activities. Next, we will analyze assets in Chile, Italy and Colombia. And we will talk about Sacyr Concesiones valuation. And the Chairman will draw some conclusions at the end before the Q&A session. Look, having said that, let us analyze what Sacyr is today. Sacyr is a global group that develops infrastructure that operates in many countries. Its core business is to create value through concessions. Concessions have an investment component for a 5-year period and then a 25-, 30-year operation term. This enables us to create steady cash flow with limited demand risk. So we're talking about cash flows that can be easily forecasted into the future. Today, 80% of the group's EBITDA comes from Concessions. Where are we present? Well, we operate, if you take a look at this map, we operate in Australia, in the United States, in Chile, Colombia, Spain, U.K., Italy and Canada. These are our top priority countries, even though we are also present in some others. In Europe, there are other target markets such as Portugal, Ireland and Nordic countries, and in Latin America, Peru and Brazil. The purpose of the company, at any rate, is to have 1/3 of our activities in Europe, 1/3 in Latin America and 1/3 in English-speaking countries by 2025. Let us talk about the pillars supporting Sacyr's strategy. First of all, we mean to reduce our net recourse debt. As the Chairman said, we want to make it come down to 0 at the end of the cycle, which will be necessary in order to manage the seasonality of other concessional business. We keep a strong focus on the concessional business that will already contribute EUR 1 billion during the 2021-2025 term. We also want to keep a stable shareholder remuneration. We started with this in 2018, and it's a key priority for us to give this 5% annual shareholder remuneration. We also want to simplify our balance sheet by reducing the group's stake in Repsol from 8% to 3% in 2021. And we have already embedded a sustainability concept and ESG criteria into the company's activities. One of the main rating firms has weighted us as the first company in this area in Spain and the fifth in the world. So there are 3 divisions in the group. First of all, Sacyr Concesiones is the driving engine of the group. Afterwards, we will provides some additional details about Sacyr Concesiones, but let me now summarize its core activity. First of all, it creates stable margins with 65% coming from infrastructure concessions and 16% coming from water, waste and energy. Therefore, we reached 16% to 20% IRR. Sacyr Concesiones has been also awarded many projects. About 2, 3 projects are awarded to the company every year and distribution amounts to EUR 200 million per year. So Sacyr Concesiones is engaged in infrastructure projects including motorways, hospitals or waste treatment plants or water treatment plants, desalination plants, among others. We have a new green business line in place that brings together water, waste and renewable energies. And its aim is to focus on English-speaking markets. The other 2 divisions include Ingenieriaia and Infrastructures. Here, we are talking about an EBITDA of 5% to 6%. This is due to 2 main reasons: more than 50%, nearly 60% of contracts are awarded to Sacyr Concesiones. That way we can optimize our construction processes. And on the other hand, we control risk throughout project management very thoroughly. So civil engineering projects are carried out by the company, for example, building motorways, dams, et cetera, buildings, football stadiums, sports stadiums, hospitals and any other manufacturing plants, waste treatment plants, oil and gas plants, et cetera. This company has a diversified presence in Europe, in English-speaking countries and in Latin America. The third group division is Sacyr Servicios or Services that also reports a stable EBITDA margin between 8% to 9%. This company continues to focus on profitability. They are involved in the maintenance of green areas, motorway maintenance, which is also important for Sacyr Concesiones and facility management. They also are operating hospitals. So the focus here is to expand further in those countries where Sacyr Concesiones is already operational. Let us take a look at the group's key financials. From a revenue perspective, the #1 contributing activity is engineering. That provides more than 50%. 28% comes from concessions and 20% comes from services. If we analyze EBITDA in detail, there are some concessional assets in all 3 divisions. Therefore, from -- in 2020, 80% of EUR 724 million comes from Sacyr Concesiones EUR 188 million comes from the Infrastructure division. This corresponds to the Pedemontana asset. This is recognized in the engineering division accounting records, but it's managed by Concessions, but next year will be integrated into the Concessions accounting records, something we have services. As for the backlog, as you can see, nearly 80% comes from Sacyr Concesiones, 14% comes from the engineering division and 7% comes from the Services division. If we now take a look at the group's key financials over the past years, taking into account the 2015-2020 plan and going forward, from a revenue growth perspective, we climbed from EUR 2.718 billion to EUR 4.548 billion in 2020. By 2025, we want to report EUR 5.5 billion. This is a slighter growth because we don't want to grow in terms of size, but rather we want to grow in terms of profitability as you can see in the next graph. As for EBITDA, we went from EUR 239 million in 2014, EUR 724 million in 2020. We want to reach EUR 1.2 billion in 2025. And this is connected to the concessional business. We reported 26% of EBITDA in 2014, 78% in 2020, and we mean to reach 85% in 2025. You can see that we went from EUR 43 million in 2014 to EUR 545 million in 2020. And by 2025, we are going to twofold our operating cash flow. This is proportional to our net debt reduction. We have EUR 5.1 billion in 2014. Last year, EUR 836 million, and we want to reach EUR 100 million by 2025 in order to manage seasonality. Okay. What about Concesiones? It contributes dividend distribution in the amount of EUR 1 billion in this 5-year term. But we have committed more than EUR 480 million in terms of equity in order to develop our projects, those that are already part of our backlog and which are pending implementation in the next 5 years. How does the group create or generate cash flow? Well, we obtain cash flow from 2 sources. On the one hand, the concessional business, once concession assets pay back any financing, what we are talking about EUR 1 billion in the past 5 years and EUR 480 million of committed equity. Therefore, we have a cash flow of more than EUR 500 million coming from concessions. On the other hand, we have recourse activities, mainly engineering and infrastructure services. They provide EUR 70 million in cash flows after investments are repaid, totaling EUR 350 million during a 5-year term. Debt interest, which will come down as the group's leverage comes down, will amount to EUR 150 million. Therefore, we'll be left with a cash flow in the amount of EUR 200 million. So all in all, the group will have an FCF in the amount of EUR 735 million for the next 5-year term. These funds will be allocated as follows: to reduce the company's recourse debt, but also in order to make Concesiones grow further. We intend to invest more than EUR 750 million, and it will also be used in order to provide a sound shareholder remuneration. In order to develop or fulfill all these 3 targets, we will have to do some asset rotation involving nonstrategic assets. Okay. So what about market capitalization? From the cash flow generation perspective, we're going to have more than EUR 1.2 billion before capital contributions, accounting for 95% of capitalization at September 2021. If we subtract committed equity, we obtained EUR 750 million, which is more than twice Sacyr's market capitalization at present. So today, Sacyr is a unique investment opportunity for different reasons. First of all, because it has a business model that is focused on a concession-driven value-creation approach. Concesiones already contributed 80% of Sacyr's EBITDA. And we expect to reach 85% in 2025. We have also proven to be a very resilient company during the pandemic. Our figures have continued to grow despite of the complex scenario. We have a low demand risk project portfolio. And therefore, we can generate stable cash flows. Sacyr Concesiones' main assets or key assets will become operational in 2022 in order to guarantee further cash flow generation once we are over with our investments. This way, we're going to reduce the group's debt dramatically. We're going to simplify our balance sheet by reducing our stake in Repsol from 8% to 3% in 2021. And then the sustainability and governance criteria, which are critical to the group, we will be able to access great financing and more competitive financing in the current context. And now let me give the floor to Mr. Rafael Gomez del Rio, who will talk about Sacyr Concesiones. Thank you.

Good morning. I would use the next minutes in order to tell you about Sacyr Concesiones, the goals that we have met as part of our 2015-2020 plan, the new targets for the 2021-2025 period. How are we going to obtain such goals? Where? And finally, I will talk about our competitive advantages with regards to our peers. Sacyr Concesiones is a company that develops infrastructure at Sacyr Group, and we specialize in greenfield projects. We are present throughout a concession project life cycle. We have more than 65 assets. We are present in 15 countries. We have an investment under management in excess of EUR 18 billion. We are the fourth greenfield developing company at a world level, the first one in Chile, the second one in Colombia, the second construction company in Latin America. And the closing of the 2020 financial period, we reported EUR 1.4 billion in revenue, up 20% year-on-year, EUR 365 million in EBITDA with a 5% increase. We have invested EUR 18.2 billion. We have a backlog of EUR 36 billion. Our asset life cycle stands at 25 years. We manage 2,700 hospital beds. We provide water services to 9.5 million people. And finally, in our airports and hubs, usually, we have 44 million passengers. So we are present throughout the life cycle of concession projects and contracts. So let me now talk about the company's strategy. First of all, we try to handpick the projects we intend to invest in. We have -- and we are very clear the kind of projects we want to develop, low demand risk or mitigated demand risk projects. We also identify our countries where we want to invest, the legal conditions. We're trying to seek countries with legal security. And after that analysis, we decide whether we want to actually carry on with the project or not. We set a minimum profitability return between 8% to 12%, depending on the country and risk involved. And we, therefore, get down to business. If we decide to move on, we develop the design engineering. We also take care of construction, the infrastructure construction. And then we have financial engineering. We decide how we're going to allocate capital, which structure is best for the market and risks at hand. And finally, we have the operations and maintenance. This is provided by Sacyr Services. Therefore, we provide proposal. And if we are awarded the project, we keep on working. And we, therefore, design the engineering project in order to spot risks before construction and before financing is formalized. For example, social-environmental risks, service-related risks. We identify and try to work them out in the design phase, and we approve what needs to be approved. Next, we reduce the company's risk level, and we optimize financing. So this is a strategy we have. We're trying to see competitiveness. And by reducing risk, we can reduce that between 200 and 300 basis points. Construction begins. We are absolutely efficient and thorough in fulfilling the committee terms for commissioning. And once the project is commissioned, we take a look at the financing approach. We took -- we once again reduced risk in construction. And if any refinancing is needed, we continue operating by reaping the value. So we are -- we always keep in mind that assets total or partial rotation. We spoke about an average asset life of 25 years. You can see a list of our key projects. This year's [ some common ] characteristics. They're all young assets that, however, provide visible cash flows that can be expected in the forthcoming months. These are our 8 key assets, 2 of them are similar. And let us see what that represents. First of all, we have the University of Idaho. This represents our entry into the U.S. market. As part of our latest strategy plan, we set ourselves the goal to enter into the U.S. market in 2025, but we already did it. For us, therefore, this is a project that we like because it's connected to sustainability, to the carbon footprint reduction and payment upon availability. Italy. Italy, this is our benchmark country. We have 3 contracts with the Pedemontana-Veneta, the A3 motorway project, the A5 and A25 motorway project. That was also awarded in July. Rumichaca-Pasto, Pamplona-Cucuta in Colombia. In Chile, we are present through the Americo Vespucio project and the Ferrocarril Central project in Uruguay. This is a project that runs along 300 kilometers and an investment in the amount of EUR 920 million in payment upon availability. These assets share some common characteristics. They account for 60% of the company's value. And second, they will become operational in the forthcoming months. In 2022, all of these assets will be commissioned. The Ferrocarril Central in Uruguay project will be commissioned in the spring of 2023. So this is what Sacyr Concesiones is about. So what about the targets we have already attained according to our 2015-2020 strategic plan? Our revenue was at EUR 700 million, EUR 420 million from ordinary activities, EBITDA in the amount of EUR 192 million. We closed in the amount of EUR 1.4 billion, EUR 675 million coming from recurrent income and a retained amount of EUR 365 million. So we were able to grow throughout all these key financials, surpassing 10% on average. But we have kept our EBITDA ratio at 65% in infrastructure, in water, waste and energy at 16%. Likewise, we have kept our success rate in the awarding of projects. We were awarding 20 projects, 3 projects a year. We commissioned half of those projects already, 2 projects per year, but we have also forayed into new countries, such as the United States, which is strategic to us, Uruguay, Brazil, Mexico, Paraguay, Colombia and Mexico, respectively. Now let me stop. Remember what we said in 2019? So let's take a look at what we announced at that time. We said that, as of 2021, Sacyr Concesiones was going to be a sustainable company, was going to use its own resources in order to honor all of its obligations. This year, we have invested more than EUR 130 million, and this is fully supported by the company's cash flow generation. So we have kept our success rate in concessions. We were awarded 6 projects in the past years. We commissioned also 6 projects. And I believe that we have proven to be pandemic-resilient. We were able to grow in terms of EBITDA and revenue 5% and 20%, respectively. We forayed into the U.S. market, as we already mentioned. We also proved our financial capabilities. We closed projects in the amount of EUR 70 million and also several financial transactions in the amount of EUR 4.8 billion. We have also kept a successful asset rotation strategy with 2 key transactions. Manuel Cecilia, the Chairman, said we divested in this company in June last year. We're talking about a successful transaction. The valuation that we had was surpassed by more than 10%, with capital gains amounting to EUR 80 million. At the same time, we also allowed a new financial investor in, in some of the assets we had in Chile at 49%. So now we can move on. Well, that's what we've done so far and what targets have we set within the framework of our new strategic plan. Well, I think the most important one is the average distribution on a recurrent basis of more than EUR 200 million, more than EUR 1 billion in this period. We've also maintained our profitability of between 16% and 20%. Our EBITDA ratio of 65% and 16% in terms of WWE. And where are you going to do this? And how are you going to do it? You may ask, "Well, how are we going to do this?" We'll continue tendering in complex infrastructures with a low level of demand risk. We'll invest an average of EUR 150 million per year. Simultaneously, last year, we also carried out a restructuring process within the group. And the Water division, the WWE division, came under the responsibility of [ Sacyr Facilities ] and solid urban waste did as well. So the green vector is going to provide us with impetus in search of growth in the area of sustainability. And the focus is clearly on the Anglo-Saxon market. All of our efforts will be channeled at achieving geographical distribution as follows: 1/3 in Europe, 1/3 in North America and 1/3 in Latin America. So it's true that concessions are moving forward rather slowly. So these will be targets for the year 2030, but we're still working on that to achieve those objectives. And finally, what are our priorities? Well, I would summarize 4 priorities: society with which we interact. We have to empower people, create jobs, build schools and provide training. In short, we want to leave an imprint via the improvements and enhancement in society through our operations. Sustainability, which is linked to the green growth sector. Well, we have to ensure that our infrastructures do not disrupt all the environment in which we operate. We have to seek improvement, enhancement whenever we carry out any infrastructure projects. Our teams, young, diverse, multicultural and tremendously talented. That's how we can describe our teams. And finally, but equally important, we will continually looking after our investors. EUR 1.2 billion in investment. Today, financial investment accompany us with an investment of EUR 600 million. So we want them to continue growing with us and to continue making money. We want them to be happy and to repeat the experience. Well, you may ask yourselves, how can you go from EUR 365 million to more than EUR 1 billion in EBITDA if in 2015, well, we managed to more or less double EBITDA, how are we going to achieve this goal? Well, we believe that we've already completed part of that work. We started with EUR 365 million. Carlos earlier explained that, following the commissioning next year of the Pedemontana-Veneta infrastructures, we will achieve that goal, that approximate figure. Then the A3 will be commissioned, and these are yellow field services, which will incorporate EUR 190 million approximately. They will be commissioned as well as the Rumichaca-Pasto, et cetera. And finally, the effective and efficient management of all of our assets will yield approximately EUR 70 million, a total of EUR 1 billion, equivalent to 85% of the group's total EBITDA. So we mentioned our objectives before and how we were going to achieve them and in which geographies we would like to do this. Here, we would like to show you the pipeline that we have identified. Of course, this is going to change. We're at the beginning of our strategic plan. And we've analyzed approximately EUR 70 billion here after applying our criteria that I described earlier. Criteria, which consists of a well-defined public-private partnership framework, a stable political and social environment, OCD countries, investment grade and risk-mitigating mechanisms, which will provide us with a yield that we can finance. Also, stable and sustainable financial markets and a predefined pipeline, which is where we are at now. And again, the focus will be on complex greenfield projects, coupled with demand risk mitigation mechanisms. So we refer to the analysis EUR 20 billion, EUR 10 billion we will offer. What I just mentioned, we hope to be awarded EUR 3 billion. That's the expected to be awarded. In the case of Italy, Spain, Portugal, we can also highlight Ireland, U.K. and the Anglo-Saxon world. In North America, we've identified approximately EUR 10 billion. We're currently in the preselection phase. We'll talk about that a bit later on. And then in Latin America, our markets in Colombia and Chile. We'll analyze opportunities in Brazil very calmly, of course. And other geographies where we're present, where we can identify opportunities. Chile, Brazil and Colombia, well, there's more than EUR 10 billion there in pipeline, which is already in tender. And how are we going to penetrate the North American market? Or what are we doing at the moment? Well, in contrast to traditional Sacyr markets, where there's a technical presentation followed by the award of a tender, which is either according to the most competitive bid or somewhere in the middle, depending on the country where the tender is carried out because the system is different in each place, in these markets, there's an important technical component, which we refer to or describe as a beauty contest. For us, it's a bit like a beauty contest. We like to create good consortia, pull together a good experience. And on that basis, we can either make the cut or not. We can either park the RFQ. And normally, we compete with 1, 2 or 3 competitors. In recent tenders in which we've been involved, more than 70% of occasions, we have passed through the RFQ phase. Here on the slide, you can see the processes which we're involved in and the prequalification processes for Europe, the U.S., Canada and Australia. And in the coming months, we hope to be successful in some of those projects. Okay. I'd like to pass on to the last point of my presentation, namely our competitive advantages with respect to our peers. We can highlight 5. I will mention the first 4, and then we'll be joined by Rodrigo Jiménez-Alfaro, who will give us more details about the final one, virtual integration, the way in which we operate. I've described part of that already, but we'll go into detail now. High success rate in awards, in the tenders in which we're involved. Commissioning capability in due time and form for the assets, which we've been awarded, the resilience of our backlog and also our financial strengths. So focusing specifically now on vertical integration, we define approach to a project in 3 parts: infrastructure, infrastructure design, financing design and also maintenance and operation design. Again, this is something that's repeated throughout the process. The bid is submitted. If we're awarded this, we will continue to work on the design of the infrastructure to overcome many challenges that we may face. And then we will conclude the financing. If we get to that stage, then we will construct commission in due time and form. And as from that point, as I mentioned before, we will revalue the type of strategic refinancing strategy that we have to pursue. So the conclusion we can draw from all of this is that since we are vertically integrated company, we are tremendously efficient, and we have a tremendous capacity to analyze projects far better than our competitors in these study costs. Well, we're also extremely competitive. And simultaneously, we also allocate risk in the part of the company that's best prepared to endure that risk in terms of engineering and design with the construction division, resources, capital and financing concessions and maintenance and operation to Servicios. Well, this vertical integration structure means that we are, therefore, able to successfully approach the second competitive window, which is a high level of success in tender processes. Since the year 2015, we've studied more than 120 opportunities and deploying market criteria as described before. We have managed to roll out half of those. Of the 60 projects in which we've participated, we've been awarded 1 out of every 3 projects. You have a list of those projects by geography, the averages as well, 3 a year, EUR 150 million investment per year on average, with a yield approximately 10, 20. At the same time, we've repeated this in the Italian market, and we've also penetrated the United States. In terms of our commissioning capability, well, I think that image is worth more than 1,000 words. So what we're going to do now is show you a video which explains all of our capabilities much more clearly. [Presentation]

So there's not much more for me to say about the third point. So we presented the latest commissioning projects on the one that's owned the pipeline. We always fulfill our word in due time, form and also quality. We've transformed our company into one that's tremendously predictable about what we're going to do and the way we do it. The fourth strength, the fourth strategic strength for Sacyr is the configuration of our backlog to mitigate risk from a decision-making standpoint in relation to low demand risk projects or those that incorporate a mitigation mechanism. Well, today, we can see that this represents 86% of our revenues, and those are accompanied by a certain degree of mitigation. There are 10%, which are classified as low demand risk, and we'll explain later why. And only 4% are associated with demand risk. In terms of demand risk mitigation mechanisms, there's a long list, I'd like to highlight the most important one. For example, support the guaranteed income and subsidies during the progress of the project or depending on the commencement of operations and commissioning with different annual installments. We also have variable term contracts. We tender the commissioning income. And once a certain discount rate is achieved, then the tender period will be concluded. If these installment period is not completed, then we can extend that period. We also have guaranteed income. Therefore, from year to year, a specific amount will be paid. Or this will be based on the level of traffic. And according to a given term, if the level of traffic is lower, the concession period can be shortened and then the spread of differential can be paid, as we see in the example of Colombia. And then payments upon availability, these are availability fees, which are associated with social infrastructures, but not only social infrastructures in Pedemontana-Veneta, which is the jewel in our crown. We have it in the A7 motorway in Paraguay and also the central railway line in Paraguay as well. So what do we consider a low demand risk? Well, these are contracts which have a sufficiently long historical record, where there's no physical toll system and where we can also predict exactly how they'll behave. In other words, where we start and where we will end up. And this provides a certain degree of comfort and peace of mind. And finally, I would like to talk about all of this compared with our competitors. Well, in terms of operations, in the last year, we've grown by 8% approximately. We've grown in EBITDA terms by 5%. What about our competitors? Well, their revenues have fallen on average by 26%, their EBITDA has dropped by 36% compared with Sacyr's. And all of this with a very similar demand trends, 23% in terms of the drop-off in our competitors. In our case, it's 20% because we have to accept that our mix sometimes doesn't include tolls and the level of traffic has recovered earlier. As I said before, we believe that the business model that we've chosen is the right one. It makes us tremendously predictable and also tremendously a company that you can trust in very strongly. And I would now like to hand over to Rodrigo Jiménez-Alfaro, who will talk to us about the financial strengths of the company.

Good morning. Thank you very much, Rafael. Well, now we're going to look at the financial strength of Sacyr Concesiones. For this purpose, we'll divide this into 3 blocks. Firstly, for this period, the amount that we will invest and also the way in which will cover our equity requirements. Secondly, we'll talk about what we've done so far and how we've got to where we are now. And thirdly, we'll look at the way in which we generate value for our clients through our financial strategy. In the previous Investor Day, we said that Sacyr Concesiones was going to become a self-sustainable company, which would generate cash. As you can see in the year 2021, we're generating EUR 140 million. We're going to invest EUR 131 million. Therefore, we will generate EUR 9 million in cash. For the period '21-'25, we'll average EUR 220 million in cash per year, which is equivalent to EUR 1 billion during that period. We will also be investing EUR 150 million on average each year. This is equivalent to EUR 151 million over the whole period -- EUR 750 million over the whole period. And so far, we've committed EUR 470 million of that EUR 750 million, which, as you can see here, will be invested over the next 3 years in print mainly. This will also provide room for maneuver over the subsequent years for future tenders. In that period, we'll generate EUR 1 billion, and we'll generate and invest EUR 250 million. Therefore, that will provide us with EUR 250 million without taking into account any type of complete or partial divestment. As regards to what we've done so far, well, over the last 2 years, we've closed financial years valued at over EUR 1.4 million -- EUR 4.8 billion with the trust of our financiers, commercial banks, multilateral banks and also institutional investors. In 2015, backlog -- well, 100% was Commercial Banking. This percentage is now only 30%. This shows how we've gained the trust of all of our financing -- funders or financing entities. We're continually analyzing the financial market in all of its spheres. For example, in Colombia, we spent more than 3 years analyzing the financial markets before we were awarded our first concession. We implemented innovative financial structures. For example, the 27 motorway in Paraguay, which we also issued a bond during the construction phase, but this is also supported by multilateral bank. We've also issued the most -- the largest construction bond in Pedemontana. We were also the first to have a financial closing year in Colombia with Rumichaca-Pasto. Sacyr Concesiones is the leading developer of infrastructures to have issued a social bond in the entire region of Latin America. And we did this with the refinancing of Montes de María, where we issued a bond that was linked in the amount of EUR 240 million. All of these things that I'm telling you about have been endorsed by financial markets. We've been awarded many, many prizes. For example, the Deal of the Year, Montes de Maria, for a local currency program. We were also awarded the prize for the best project in Pedemontana Europe. We were also deal for the year in Colombia for a highway project, and we also received an award for the most important financing of a railway project in the region for our central railroad in Uruguay, the Ferrocarril Central. So we've looked at the first 2 points, how much we'll invest and how we'll cover our needs and what have we done to get to where we are today. Now I'm going to focus on the way in which we generate value through our projects via our financial strategy. For this purpose, we'll give you an example of a standard Sacyr project without demand risk and an investment of approximately EUR 600 million. EUR 150 million would be injected in equity. And this will turn to the financial markets for that. The financial strategy begins in each phase, from the tender phase. During bidding, we analyze the characteristics of the project. We approach the market, and we design the best financing structure. Once we're awarded the bid, then we begin to compete with all financing entity and sources to obtain the most economical approach. But for this, we have to perform a couple of prerequisites, the design and prior approval of the project. And we also have to manage licensing, environmental or social licenses, et cetera. If we don't carry out all of these formalities and eliminate these risks from the projects, then nobody will wish to finance the project. So to close the financing of the project, we have to eliminate risks. Once we've managed to close the financing of the project, the value of our equity increases by approximately EUR 45 million. That increase is driven by the reduction in risk. As I said before, we've eliminated risk beforehand. We have also managed to generate greater cash flow in the project, thanks to optimization during the design phase. Once we've closed the financing and the design of the project and all the licenses, then we have to embark upon the commissioning of the project. And also, with construction risk, we feel fairly comfortable with this given its severity. Why is that? We belong to a group that has a very strong vertical structure. We have a wonderful construction arm that is accustomed to dealing with all of the challenges that arise in this phase of the project. And this demonstrates that we have managed to achieve 10 commissioning -- projects commissioned in the last 5 to 6 years, always complying with the deadlines and in due time and form and fulfilling with all of the customers' requirements. At the end of this phase, we move into the commissioning phase. And here, we have to determine whether it's the best time to carry out refinancing. When refinancing, there are 2 objectives. The first main objective is to capture part of the value of the project; and secondly, optimize our financial strategy, extending the debt period and also reducing costs, thus reducing risk. In this way, we're able to enhance the value of our project by EUR 45 million. It's not worth EUR 150 million anymore. It's worth much more, EUR 155 million or even more. We normally tend to invest in all of these different formalities that have to be carried out beforehand and approximately 3.5 -- 3 years on average to build the asset and to close the financials. So we've gone from an initial value of EUR 150 million in equity terms to EUR 350 million in terms of our return of value. Once we have assets with an optimized financing structure and a low level of risk, we can then turn to the market and then perform selective rotation of assets, achieving between 16% and 18% profitability. We've done this in the past. And this graph shows all of the divestment processes that we've carried out. We've achieved these levels of profitability above 20% in operation and 16% as you can see, the weighted average IIR. We analyze the projects during the tender or bidding phase to determine their viability. If they are viable, we will participate in the bid, then we will close all of the financing with all of the prerequisites. We construct the asset. We gently increase value. We generate cash flow. That's the way in which we generate value. Thank you very much for your attention. And now I'd like to leave you with Marta Gil, who will explain the sustainability policy of the company. [Presentation]

Good morning. At Sacyr, we focus on a responsible management model with sustainability at the very core of all of our activities. So we focus on sustainability using 3 key pillars. We're trying to cause a positive environmental impact, of positive social impact and also positive impact on our financials because we believe that, thanks to sustainability, we can make people's life better. We can also improve the environment, but we can also improve our company's finance. That way we can access increased financing conditions at better conditions as well, therefore, fulfilling one of our targets, and that is reducing our recourse debt. All this trying to attain the SDGs and with a solid environmental commitment. So we dedicate our efforts, talent and technical excellence to design, finance, build and operate the best infrastructures, for example, transport infrastructure in order to connect the territories where we operate. And we have some examples such as Pedemontana in Italy or transport hubs in Madrid, also social infrastructure in order to keep looking after our patients Antofagasta, Chile -- hospital in Chile is one example, and also water and sanitation facilities, such as the one in Melbourne in Australia. So we want to go one step further, and we want to build the best possible infrastructure. So now sustainability is at the very core of our strategy, supporting one of the pillars that will be with us in the next 5 years. That way we have developed our own sustainability plan, our plan that is called Sustainable. This is an ambitious road map with clear targets in order to direct our decision-making in the forthcoming years. So this is where we are all doing at Sacyr, and this is being recognized by some important firms. For example, as Juan Carlos said, we have been awarded as 1 of the top 5 companies in the world. Sustainalytics gave us that rate and the first one in Spain and the #1 in terms of market capitalization. We can also talk about the carbon disclosure project that provided us with a minus A rating due to environmental management, thanks to our positive evolutions since 2018 onwards. And we continue improving our positioning. So our strategy is supported by 3 key pillars. Let's start with the environmental pillar. So we are firmly committed to environmental development in the short and medium term. So one of our targets is to become carbon neutral before 2050. And to this end, we are taking steady steps in order to reduce our emissions by more than 25% by 2025. We also want to reduce our GHGs by 25%. And all this is supported by significant increase in environmental investment, EUR 34 million in 2020, this will continue to grow more than 50% until the end of our strategic cycle. All these is supported by endless initiatives that we have deployed across our projects. You can see some examples, but let me touch upon 2 of them, which are the most representative ones. For example, we have a special focus on reducing our water footprint. We know that in Chile there are some water-related problems. Americo Vespucio Oriente is an example of some of the water treatment plants we have put in place in order to treat as much water as possible in order to bring the water that we use in our processes back into the systems. And we, therefore, treat more than 118 cubic meters of water every day. We also focus on biodiversity. Rumichaca-Pasto is one example of that. We have planted more than 0.5 million trees. Local families have been involved in this project, and we have created good-quality jobs. Our second pillar, the social pillar. So we also focus on the communities where we are present. In 2020, thanks to different social initiatives, we have been able to help more than 100,000 people directly, 300,000 people indirectly. In addition, we had more than 100,000 people who volunteer in this process. In 2020, 2021, as a result of the pandemic, most of our operations were identified as essential activities. Therefore, we made a special effort in managing hospitals, in looking after people, managing waste and water in order to make our small contribution. So more than 50 social action initiatives that have enabled us to donate. For example, a hospital in Colombia, donating more than 13 tons of foods and many health kits in countries such as Mexico, Colombia, Peru or Chile, respectively. So the last pillar, our impact on the company's finance. So here, we have to mention that we focus on a strong governance system, promoting the best practices internally and externally. We have created a Special Committee that reports to the Board of Directors that specializes in governance. And Sustainability Committee that is composed of senior management. As a result, we have been able to review our code of conduct or create 20 new policies around the topic of sustainability. And finally, one major impact, and that is the impact on finance, now we are able to finance -- to obtain financing in better conditions. And that way, we can also reduce our corporate debt. We had 2 good examples of some green projects that were formalized in 2021. First of all, EUR 160 million for the 5-year term. This financing facility has enabled us to finance our environmental branch projects. We will also have some additional financing, thanks to the attainment of our environmental and social targets. And the second operation that Rodrigo mentioned, the social bond that was issued in Latin America. As a result of the infrastructure project, we have been able to refinance our Monte de María project with more than EUR 175 million. In this case, we were certified for the positive impact caused by the arrival of such funds on the communities. So at Sacyr, when we talk about sustainability, we also speak about innovation. These 2 concepts go hand in hand. Out of EUR 8 million that we invested in innovation in 2020, over 50% was allocated to sustainable innovation projects. To us, innovation provides a cutting edge because we can make better decisions. We can also reduce energy consumption, raw material consumption or water consumption. We can also improve users' life. And we can also generate new sources of income. Now let me share with you 3 action projects that show some innovation that now has become a source of income. We have one example of this very certain, thanks to innovative technologies such as the Internet of Things, AI or augmented reality, we have been able to create new experiences for visitors. Another initiative is Sacyr IOHNICIohnic. This is a new lighting system in order to improve energy efficiency in tunnels, saving more than 66% of energy consumption, increasing the life cycle of the lighting systems. We have more than 60 kilometers of tunnel throughout Spain, Italy, Colombia, Mexico and Chile. As a result, we have been able to create a portfolio in excess of EUR 5 million. And finally, RARx. This is a new material that can improve asphalt and uses recycled material. So by doing so, we can reduce the consumption of raw materials. We increase the life cycle of infrastructure. We'll reduce acoustic pollution. And we, therefore, recycle wires and tires. More than 100 kilometers running along Spain and Mexico, we are talking about recycling more than 300,000 tires and more than EUR 5 million in revenue. So throughout this presentation, I have tried to convey to all of you how relevant innovation and sustainability are to Sacyr. They cause a positive impact on the environment. They also cause a positive impact on our stakeholders. And no doubt, they also have a positive impact on our own finance. For that reason, innovation and sustainability are already embedded into this company's strategic decision-making process, and we'll continue doing so in the forthcoming years. Now let me give the floor once again to Rafael Gomez del Rio, who will talk further about our assets in Italy. [Presentation]

Italy is the key strategic market for Sacyr. More than 30% of our EBITDA has to do with assets in this area. 20 years ago, we made a strategic decision, and that was building a partnership with SIS and Fininc. We supplement our technical and financial capacities, and our partner helps us in the management process with authorities. Today, we had 3 concession projects in the area with more than EUR 4.6 billion in investment, 535 kilometers of highways and a backlog in the amount of EUR 12.6 billion. We should underscore that the Italian market is quite a complex one with stringent technical requirements so that entry barrier, thanks to our joint work and collaboration, we have been able to tender for new projects today. Highways in Italy, according to European regulations, cannot extend beyond the concession terms. Therefore, we have a significant pipeline for the renewal and extension of such contracts. We are already going through our preselection process. We are preferred bidder for several social projects such as hospitals. We are competing against 2 or 3 more companies and more than that. And we hope we will keep on being successful. The jewel in the crown for us is the Pedemontana-Veneta project. This is a corridor ring road between Venice and Austria. We're talking about 90 kilometers, 25,000 cars per day and investment in the amount of EUR 2.4 billion financed in the amount of EUR 1.6 billion. There were some subsidies at first. The concession period is 39 years. And we're talking about payments upon availability. In Italy, other mechanisms exist with regards to mitigated demand. There is an upside potential that is reference traffic set by authorities. Once that value is exceeded, we allocate 70% to authorities and right amount to the concessionaire. Another contract was recently executed, Naples, Pompei and Salerno. That's another contract for a 25-year term. I'm not talking about 39 years like in the case of Pedemontana. Here, we're talking about 25 years' revenue in the amount of EUR 2.7 billion. So what about the mechanisms have been put in place in order to reduce risk according to this contract? Yearly, this tariff is updated. And based on the traffic that has been tendered, whether we're above or below, we have to adjust it according to the bid in WACC. We have a 5 and 25. These are projects that have been recently awarded. The contract will be formalized in the upcoming weeks. In this case, we're talking about a 12-year concession term. Both assets have already been commissioned. We're talking about yellowfield assets. But in addition, there is a different kind of demand mitigation, risk mechanism, health crisis, price [ offers ], COVID, terrorism. These are all the different offsetting mechanisms that should be triggered should any of these situations arise. Now the concession could be extended, or else, we could be set according to the resulting amount. So the next time this is tendered, the new -- our deal will have to pay for such an amount. To us, the second most important country is Chile. Chile enabled us to step into the concession market 25 years ago with Los Vilos-La Serena. 3 years ago, we were awarded this bid again. We have 12 infrastructure projects, 2 hospitals up and running, 2 airports, some highways and 5 water-related projects. Investment is in the amount of EUR 4.4 billion with a backlog in the amount of EUR 7.6 billion. Our -- we have 3 million passengers going through our airports and 870 hospital beds. Vespucio shows where we are now focusing all of our attention. This is a complex infrastructure with some mitigation demand risk mechanisms that we also pay attention to. Now we're going to play a video so you can see how this asset has been performing. And then we will talk about [indiscernible] [Presentation]

So Americo Vespucio represents quite a challenge from the design standpoint and also due to the fact that building an urban highway running through the highest-income areas in Chile, Las Condes district, so we had to minimize any environmental impact in the area. So here, we are talking about 2 demand risk mitigation mechanisms. On the one hand, there is a subsidy mechanism that applies during the construction phase. This is related to the degree of progress when you reach 40% of completion, 80% of completion and so on and so forth. Then on an annual basis, there are some fixed installments or payments. On the other hand, the project term is variable. We have to bid for all of the concessional assets, then a discount rate is applied and the concession period is over, but it can also be extended. 45 years, that's the term for this asset. We mentioned before that we have a good commissioning capacity. This project will be commissioned in July, but we are not working in order to commission it in the spring in order to do it 6 months in advance. Colombia is our third market. We have several contracts with several investments, 524 kilometers of roads and an investment of EUR 2.3 billion. We would like to highlight the most important projects, Rumichaca-Pasto and Pamplona-Cucuta. Rumichaca-Pasto will be completed by spring. All of the functional units will be commissioned by then. According to how these units are commissioned, you can exit some irreversible payments. We're already collecting some deals. And then we have the Pamplona-Cucuta project that is expected to be commissioned during fiscal 2022. What's the common characteristic here? We -- there is a commissioning process and then a similar mechanism applies. There is apparent traffic system in place. The concession can be shortened. If you are below that period, you have to pay a difference every 5 years. So there is a financing facility obtained from a local bank. And this is one of the projects that we quite like. It's complex because the project is very highly complex because it's in quite a peculiar or natural setting. Colombia is spectacularly beautiful. So we believe that this project will be commissioned shortly in the next months. Now we would like to talk about the University of Idaho and what it represented for us. Now we are going to play another video so that you can see how we approached the U.S. market and the main characteristics of these contracts. [Presentation]

So this is the kind of projects we would like to continue performing, sustainable projects, green projects. We believe the universities represent a good market match. We have already identified a top line for the next months in more than 10 American universities. EUR 1.2 billion in revenue and plenary as a top partner. In the United States, you need to have the best references possible in order to keep on playing the match. Thank you very much. Now I would like to give the floor to María Muñoz, who will talk about the company valuation.

Good morning. Next, we would like to share with you Sacyr Concesiones valuation. This valuation is in the amount of EUR 2.811 billion. We understand this is quite robust, prudent and consistent with the valuation that we reported back in 2019 during the Investor Day, and it's also in line with the company's performance over the past years. So the company valuation, taking into account Sacyr Concesiones' valuation, totals EUR 2.811 billion, out of which EUR 2.614 billion comes from the current asset portfolio, as shown in the graph. EUR 196 million corresponds to future investments, as I'm going to explain next. This is shown in light blue in the graph. So this valuation goes up by 30%, reaching in 2025 EUR 3.691 billion, out of which EUR 3.083 billion corresponds to the current portfolio and the remaining amount corresponds to future investments. With regards to the main valuation hypothesis and methodology used for valuation purposes, this evaluation corresponds to December 31, 2021. We have applied the discount rate method, except for the water division that I'm going to elaborate on further. As for the discount rates applied, they correspond specifically to each country, taking into account the status of each project. Therefore, we have obtained average weighted rates of 10% to 11% in the case of construction assets and between 8% to 9% in the case of operation assets. In this valuation, we have also introduced some refinancing hypothesis for some specific assets such as, for example, for the Pamplona-Cucuta project in Colombia and for the AVO and Camino de la Fruta projects in Chile. As for future investment hypothesis and leveraging serves on the company's track record over the past years, we believe that until 2025 the company will continue to be awarded the same amount of projects, amounting therefore to EUR 150 million in investments. We have only taken into account growth and awarded projects until 2025, which means that, from 2025 onwards, the company will no longer participate in tenders. In this valuation, we have not considered any asset rotation. Therefore, we believe that there is quite some room for improvement. If we now take a look at the water business, please remember that the water business now is part of the Concessions division since 2020. For valuation of this division, we have applied a different methodology, taking into account the different contracts in place. We have the following classifications. First of all, we have one classification that corresponds to integrated water cycles and O&M contracts. We have valued them according to our EBITDA multiples. And on the other hand, we have long-term plan contracts that have been valued according to the distribution discount rates, applying discount rates that are specific to each country. And on the other hand, we have long-terms plant contracts that have been valued according to the distribution discount rates, applying discount rates that are specific to each country. That way, we have valued the Water business in EUR 209 million. Now we would like to show you how we started out at EUR 1.795 billion back in 2019, and now we reached this amount. For this purpose, we would like to focus on the portfolio we had in 2019, and we would like to show how we have been able to perform better since 2019 out today. First of all, if we take into account the valuation of EUR 1.795 billion, we have to discount impact due to our divestment in Guadalcesa; next, the rolling-forward effect due to the 2 years that have gone by since the previous Investor Day today, plus the derisking effect that has to do with the commissioning of assets. In the past 2 years, we have commissioned 5 assets, so both effects brought together improved the valuation by EUR 595 million. On the other hand, we have a negative foreign exchange rate impact. This has to do with an unfavorable macro context in which we did the valuation. We have EUR 73 million due to the optimization of our assets. That way, we come to EUR 2.142 billion to EUR 2 billion. So with the same portfolio that was EUR 1.792 billion in 2019, we see that it has grown by 20%, only due to the asset's maturity and even if we take into account our divestment in Guadalcesa. Based on this figure, we have to add some new awarded projects in the past 2 years in the amount of EUR 263 million associated to those projects that we were awarded in the past 2 years. We, therefore, counted EUR 2.405 billion. This is the current value of our portfolio without taking into account the Water division and future investments. Based on this EUR 2.405 billion figure we are going to talk later because -- but for the time being, we should remember this valuation amount without taking into account future investments on Water. Next, we have to add EUR 209 million in Water. This is due to the company's restructuring process and the Water business integration into Sacyr Concesiones, and now we come to EUR 2.614 billion. This is the company's current valuation if we take into account the current portfolio and the Water division. Next, we have to add the value that we are acquiring from future projects that I described at the beginning. If we take into account awarded projects until 2025, then we are talking about value being acquired in the amount of EUR 196 million. Now if we consider the increase in value due to awarded projects in the past 2 years, we understand that this is quite a prudent approach all in all. So if we add up the value of these future investments, we come to EUR 2.811 billion. That's the current valuation of the company. Now in 2019, we showed a valuation curve that you can see here. You can see how it has evolved over time. Now this valuation curve for 2021 showed EUR 2.4 billion in value. So back in 2019, we said that the concessions assets were going to be worth this amount. As I mentioned at the beginning, if we take into account the current portfolio without considering the Water division restructuring, we are already hitting this amount of EUR 2.4 billion, leaving aside that we have divested our stake in Guadalcesa and even in an unfavorable macroeconomic context. We, therefore, incorporated Water division afterwards -- and afterwards the new investments therefore coming to EUR 2.811 billion. Now let me explain how we have been able to reach this amount of EUR 2.4 billion. In 2019, we said that the company was going to be worth this amount. But now let us see how we have come to this amount, taking into account the 2 effects together and our divestment in Guadalcesa. This is due to the fact that we are -- we have been awarded several projects. So the dark blue area shows the value that comes from the new awarded projects. As a result, the new valuation curve shows an increase compared to 2019, and it has been growing over time. If we now take a look at the impact of this valuation on our key markets, as you can see, our key market, no doubt, is Italy with a weight of about 1/3 of the company's valuation, followed by Chile; Colombia, which account for another 1/3; and next, Spain. Italy valuations is EUR 958 million right now. And in 2025, it should reach to EUR 1.263 billion. 50% of our current portfolio's valuation is concentrated in Italy, Spain and the U.S., respectively. If we now take a look at the weight that each of these assets have, the key assets we have already described, account for about 60% of the total valuation. So these key assets show Pedemontana-Veneta on the one hand; AVO in Chile; Rumichaca-Pasto and Pamplona-Cucuta in Colombia; followed by A3 and A5 and A25 (sic) [ A21 ] in Italy; Ferrocarril Central in Uruguay; and then we have the other 8 remaining key assets, including the University of Idaho. If we now talk about the wage our valuation in the key markets where we operate, you can see the gray shaded area. That represents a valuation curve and its evolution over time. The vertical bars represent, on the one hand, distribution, negative and downward distribution and equity allocations and then positive distributions. As for the valuation, Italy accounts for EUR 958 million to date. So this is tantamount to EUR 1.52 per share. Italy's valuation will increase over time, reaching EUR 1.375 billion. With regards to distribution, the annual average is EUR 94 million. I would like to underscore that when the Pedemontana financing comes to an end, that is to say 2047, distribution will grow considerably. We will still have 14 years to go, which shows that we can still leverage ourselves further on this concession. I said that in this valuation, we took into account refinancing hypothesis for certain assets. In the case of it, however, we have not considered any refinancing hypothesis. Therefore, we believe that we still have a lot of room and improvement and that we are taking a prudent approach. As for the second market, Chile, we are talking about a valuation of EUR 523 million, which accounts for EUR 0.83 per share. As for this valuation, it keeps on growing, reaching EUR 1.071 billion. As for distribution, we should also mention AVO, the AVO refinancing impact and the Camino de la Fruta refinancing impact. All in all, we are talking about an average distribution of EUR 78 million per year. And finally, moving on to Colombia. Colombia's weighting is EUR 474 million, which is equivalent to EUR 0.75 per share. The maximum value achieved or reached by Colombia's valuation would be EUR 588 million. In terms of distributions, it's important to highlight that distributions have increased significantly at the end of the financing of each of these projects. And finally, to conclude, we would like to show you a great capacity generating cash, the enormous cash-generating capacity of our backlog, which is very robust and which is total portfolio distributions of EUR 11.5 billion in total. This is equivalent to EUR 3 billion more than the figure that we gave you in the 2019 Investors' Day. In terms of average distribution per year in the period 2022-2030, it's EUR 213 million. This figure will increase. And in the period 2031-2040, it will increase to EUR 275 million, on average, concluding in the final period between 2041 and 2050 at EUR 341 million on average. As regards, average cash yield, we start with 11.3%; increasing to 19%; and the final period, 27.9%. And the DCS (sic) [ DSC ] ratio coverages that measure the coverage weighting of the backlog begin at 1.3, increasing to 1.5 and increasing to 2.8x. This demonstrates that our backlog still has enormous releveraging capability and capacity. Therefore, with respect to revaluation, we consider there's still great room for maneuver. Well, this robust distribution underpins the valuation of EUR 2.811 billion which we're announcing today. And based on the foregoing, we believe that this is a robust valuation, a prudent valuation, which is consistent with the one that we presented in the 2019 Investors' Day and in line with the company's performance in recent years. Thank you very much for your attention, and I would now like to hand the floor to our President and CEO for the conclusion of the Investors' Day.

Well, as I announced at the beginning, I was going to be very, very brief in my conclusions. First and foremost, I would like to thank Carlos, Rafael, Rodrigo, Maria and Marta. I think that they've given a very clear and concise presentation. And I hope that through their explanations, they have provided information which has given you an idea of the present and future of our company. We are working with enormous enthusiasm and all our experience to ensure that, by the year 2025, our company has a net debt recourse virtually -- that's virtually nonexistent. And in terms of Sacyr Concesiones, I think that Maria has explained this very clearly. Based on our analysis, this is now valued more than EUR 2.8 billion. But by the year 2025, this will exceed EUR 3.5 billion very easily, almost EUR 3.7 billion, I said. And this means exactly the same as what I said back in 2019. Sacyr Concesiones would not be sold for EUR 2.8 billion because we believe it's worth much more than that. Therefore, I believe that Sacyr offers excellent investment opportunities today. Our business is focused on concessions and infrastructure with low risk, a young and resilient portfolio with a great cash-generation capability. To summarize some of the major magnitudes of variables, average dividend payout of EUR 250 million over the next 5 years and EUR 2.1 billion in terms of refinancing over the next coming years and EUR 1.5 billion in EBITDA for the year 2025. Asset rotation which is extremely significant and which also endorses our recent track record and will give us revenues profitability of between 16% and 18%. Furthermore, our key assets or the majority of them in Chile, Colombia and Italy will begin operation in coming years and the next year, in fact, 2022, which will make our company even more attractive and will also improve the financial sector, making it much more robust. Thirdly, we have placed sustainability at the heart of the company so that everyone is able to clearly see which environmental, social and corporate governance measures are being implemented, which are part of our DNA and which are reflected in all of our projects. And at the same time, this will also allow us to obtain much more advantageous financing formula for our projects. And I'd like to just highlight 2 aspects from the valuation. I believe that the contribution of the new projects to the valuation, EUR 196 million, have been invested in this for a period of 4 years from 2021 to '25. And this gives a clear sign of how prudent we have been when compared with the EUR 273 million that's been contributed from assets from 2019 to 2021. And I'll repeat, in 2 years, new projects have contributed EUR 273 million. In 4 years, this should really be according to those sums of EUR 550 million. But we believe that our valuation has been prudent, sustainable in time and extremely conservative. And to achieve this, we have the support of our -- all of our interest groups, stakeholders and the commitment of our management team and also the Board of Directors. And to wrap up, because I know that it's late, and I'm sure that you all are really looking forward to ask questions, I would like to start -- to end the same way as I started. In 2025, Sacyr will be a company with no recourse debt. Recourse debt will be nonexistent. And our assets, concession assets, in our opinion, and based on our valuations will exceed, by far, the EUR 3.5 billion by the year 2025. And with that, we hope to obtain your trust and confidence, and we hope to continue applying this strategy to generate ongoing and continual value. And without further ado, we can now move on to the Q&A session. I'd like to ask Carlos and Rafael to come up to the stage, please, but Marta and Maria are also here if there are any questions for them and also the Executive Committee in case any of them would have to intervene.

Well, good morning. First of all, I would like to thank everyone for attending the more -- 360 people that have connected via streaming. We're now going to move on to the -- explaining the dynamics of the Q&A session. First of all, we will hand the floor to people in the room, and the roving mic will be handed out if you would like to ask a question. And secondly, we'll move on to the questions that we've received in the course of the presentation this morning via the webcast. I'd like to remind you that the Investor Relations department will be available after this event if you have any doubts or more specific questions, and you can use the e-mail that you have at [ sacyr.com ]. And now I'd like to hand over to the audience and see if there are any questions from the floor.

Alejandro Vigil from Investor Securities. First of all, I would like to thank you for the presentation. It's been an excellent and very complete presentation. Just 2 questions, and I'm sure there will be more questions from my colleagues. The first question is about your preference in terms of asset rotation that you mentioned in the presentation to achieve that almost 0 recourse debt in the year 2025. What's your preference, divestment at holding level, country level or at Sacyr Concesiones Colombia, Italy or at specific asset level, whether it would be, for example, Pedemontana? That's the first question. And the second question, in that free cash flow of EUR 250 million that you mentioned in your presentation which you stated is very robust, can you explain the risks in currency terms, the -- because, of course, these Latin American currencies in '21 have displayed great volatility. And also the inflation factor, how could that also impact FC fee in that EUR 250 million that you mentioned?

Thank you very much, Alejandro. Well, perhaps we can start rolling things out. We said in the presentation, that we will continue with what we've always done in terms of asset rotation because, from our track record, you can see that things have always gone well. I understand your question, but we're not going to divest anything in Sacyr Concesiones, and we're not going to list it on the stock market because we don't believe that that's the way forward. It wouldn't really provide us with any value. Things are going well for us based on our asset rotation system. And if there was any change, we would probably announce this year. It may not be prudent, of course. But perhaps, like in Chile, we've always had minority stakes in projects or like in Guadalcesa where we are also participating in management, but the majority percent stake corresponds to sale. But what we've done over the last 5 years is the same as what we're going to do from today forward. And the second question is about cash flow, dividends and how they may be impacted by currency variations and inflation. Well, Rafael or Carlos can complement my response, but I think that inflation favors many of these concessions, long-live inflation in that respect. And why is that? Well, because income is mostly linked to inflation and costs which tend to be equivalent to 20%, 25%. If income is 100% and inflation is 5%, then that's 105% in costs. Equivalent to 20% of those 100%, that would be 21%. The surplus will be 84%. So inflation always favors that valuation, which we didn't take into account. We didn't take into account any seasonality or any structure -- whether the inflation is structural in nature, we didn't take the that into account in the valuations, but it does have a favorable impact. It's sure that -- well, we don't believe that there's going to be a significant impact, but it's important to bear one thing in mind when we invest in the event of depreciation, that is favorable. When we have dividends, it is unfavorable. But sometimes, these things offset one another, and that's very important. And I'm not sure if Carlos or Rafael would like to add anything more.

Well, I think the situation regarding inflation is very clear. It's a lever. It's a driver. We want those contracts which are indexed against inflation. The greater -- the higher inflation, the better things are for us. We've closed all the terms and the agreements and anything that will allow us to increase our income will be favorable. And on the other side, we also have to contribute from our side. Obviously, we have to contribute resources for projects, and that entails cost. It's true, though, that in recent quarters, the -- it's behaved much more positively, much more favorably. But in the case of the models that we've delivered, the -- it is also a capability to capture the sensitivity of all of these parameters, inflation being one of them.

Luis Prieto. I've got 3 questions. The -- well, you gave a clear explanation about the EUR 250 million and what you're going to use it in. Can you hear me now?

Yes. Thank you. Could you speak closer to the microphone?

My question is as follows. You clearly explained the EUR 735 million that is going to be used basically in reducing debt and new investments, but you also referred to an important variable, which is shareholder remuneration. I would like to know if there's going to be any change in approach on that side in the coming years. The second question is a little bit more technical about valuation aspects, and I would like to know what has been dollarized in Latin America in currency terms? And what assumption of perpetual devaluation you assume by contract per year? Whether these are indexed against the inflation differentials between countries, how do you take into account the FX impact? And finally, I think you referred to carbon neutral by the year 2050 for the entire company. And my question is, in that respect, isn't that a little ambitious? I'm ignorant in this respect. I understand that there were a series of companies in the cement and heavy industry segments that are -- produce a lot of emissions, and they're talking about zero neutral by the year 2050. Don't you think that you should be trying to achieve that goal much earlier than 2050?

Well, first of all, regarding your question about shareholder remuneration, it's possible there may be a change in strategy, but it will be probably closer to the end of that cycle, and we expect that the reduction of debt will probably happen much earlier than that. So if there was a change in approach towards shareholder remuneration, that will probably be towards the end of that cycle. As regards dollarization or currency substitution, well, in relation to investors, that's a very technical aspect. And we can provide you with the details, and they can give you full information, a full explanation about the whole issue of currency substitution. We would have to review models. But in general, 60% of our revenues were -- of our income is in euros or dollars. And Marta is going to answer the question about whether we could be more ambitious regarding achieving that zero-carbon milestone by the year 2050.

I thought we were already ambitious, anyway. But anyway, yes. Aim is to be zero -- is to carbon neutral before 2050. We are aware that our value chain is highly fragmented, so we're doing everything possible to try to drive everything in that value chain. And hence, we would like to achieve that goal before 2050. But as I mentioned, we have intermediary objectives of 50% less by the year 2035 and another reduction by the year 2025.

Thank you, Marta.

Victor from Societe Generale. I've got 2 questions. The first question is a request for clarification. When you mentioned this debt of EUR 100 million, and you have -- I think you also mentioned a difference...

I'm sorry, the gentleman, could you please take away your microphone because there's interference. Thank you. And speak closer to the microphone.

Yes. When you look at the aim of EUR 100 million of net debt for the year 2025, if I understood correctly, that includes EUR 250 million in the period of growth in CapEx, which is between the difference between equity committed and the EUR 150 million that you mentioned. I just want to confirm those figures. And secondly, apart from Manuel's confirmation of debt or recourse debt at the end of the year below EUR 750 million, I seem to remember from one slide, I think it was Slide 33, that the difference in the year 2022 of dividends to be received from concessions. In other words, equity committed is relatively low. So from the slides that you showed, the FC fee that year, the recurrent FC fee that year from concessions and contracting is low. Could it be -- would it be correct to say that asset rotation for debt to significantly be reduced by the year 2022 for it to be concentrated in that year? Would that -- would it be correct to say that?

Well, I'll answer the first question, yes, about the EUR 150 million. Yes. I'd just like to confirm that that's correct. The investment will be reduced or the spread of differential between the EUR 750 million, the concessions will be invested in the dividend amount. That amount will be used to reduce recourse debt. I can confirm that.

The second question, I think I said this before. Since we have 3 levers for a reduction of debt, 3 clear levers, there may be one more, but I can tell you that, by the year 2022, the debt reduction will be greater than 2023. And in 2023, there will be more reduction than in '24 and then in '25 inversely proportional to what was mentioned by the colleague before regarding the possibility of changing shareholder remuneration policy. A question here. Could you please remove your lapel mic? Thank you.

Joao Safara from Banco Santander. I have 3 questions. The first question, it's the inevitable question, but somebody has got to ask it in this type of events. At the end of the day, ending the year at 3%, what is the opportunity cost of not fully reducing exposure at Repsol, bearing in mind that this is something that still penalizes Sacyr enormously in the market? That's the first question. The second question. Well, I do believe that Carlos has already answered this question. But considering your pipeline, I understand that this is EUR 3 billion in new concessions. Is that right? I think that Rafael gave that figure. Would that entail an equity investment of EUR 600 million?

Well, you have to remember that that's over 5 years. Equity contributions are phased over time, so almost EUR 150 million per year.

So when would you do this because this is new. We're talking about 2023, '24, '25 or when?

Yes. It's cyclical. We currently have a commitment of EUR 480 million approximately. EUR 750 million is what we announced before for the whole period, depending on the awards that we received and also the needs of the contracts, and they will determine how equity is contributed. Normally, equity is contributed during the first 3 years. If we were awarded a project, then we would contribute equity next year, the following year and the third year. And that's the way it's phased out in the process.

The third question. It's a technical question, but it's related to the valuation you mentioned. I seem to remember that there were certain assets that would have to be refinanced in the previous valuation you gave. And if I remember correctly, that was in Rumichaca-Pasto. And in the case of the dividend date, so I think that Colombia would contribute more dividends in 2023 due to this refinancing. So what has changed there? Could you please explain that? I know it's a rather technical question, but I will be grateful for an answer.

Well, I'm not sure who would like to answer the question. I'll clarify the question about Repsol. With Repsol, we have managed something that we came across in 2011. I'll try to summarize what's happened. At the end of the day, when oil prices plummeted and Repsol share prices were affected, we gradually covered positions as the price increased, and coverage is carried out over various years to avoid having to perform a single lump sum investment. So I think that the deadline was the year 2021. That was the year of the disinvestment. Then that 3% is in 2023, 2024 and 2025. All we've done now is announce this in due time, sufficiently in time, and the Board of Directors will then decide yes or no. But we wanted to announce this with due time, and that's the reason why we gave and made this announcement 3 or 4 months in advance. It was simply to cover our backs, bearing in mind what we did in the past. And also, we don't want to have to pay out money prematurely. And the second question, I'm not sure if that's been answered by Rafael or not.

I'm sorry. We cannot hear the gentleman. Yes. In addition to equity committed, EUR 450 million already committed, and that EUR 3 billion is the differential spread.

But the EUR 3 billion includes debt. That's investment in debt.

That's right. Correct. And I think the final question is extremely technical, so perhaps what we can do is send you an answer after we've managed to discuss this.

Well, this was on the 31st of December of 2021, and the refinancing of Rumichaca-Pasto will be carried out in the coming months.

I'm sorry. We didn't hear the question because the gentleman wasn't using a microphone. Yes. I think the calculation hypothesis was presented in our presentation. Any further questions? Yes, one there at the back.

Luis Prieto again. You also set an investment threshold or ceiling for certain projects. What would happen given all of the stimulation packages that are being provided in the target markets? The pipeline actually increases tremendously. Or do you have a much higher success rate than in the past? Could you carry out a capital increase? Because it seemed that the figure was rather short for the next 3 or 4 years if things go much, much better, of course.

We always try to look at what we've done so far. We've gone from a position before 2015 that was rather complicated and gradually improved since 2015 as we've rolled out our strategic plan, but we've never missed a single opportunity if we really believe that, that opportunity was a good opportunity. And we've used many mechanisms, such as capital increases. If we look at what we've done with asset rotation, we've divested -- I'm referring from the previous period. If you look at the previous period, you'll always identify the use of many mechanisms, but we don't want to take -- to miss any of these opportunities. And if necessary, we'll find a partner to generate value. We'll do what's necessary, but we will do these things but careful with 0 debt.

Alejandro Vigil from Securities as well. Well, since we have people from the construction business here, a question we often receive from investors is about the impact that the increase in commodities and raw material prices are having on projects and also the construction margins that companies are obtaining. That's the first question. And the second is about the, let's say, claims, Panama, et cetera and...

Well, as regards to raw materials, it's true that raw material prices do occasionally increase and quite a lot at that, but it's important to clarify 4 points. Firstly, construction accounts for 10% of the group's GDP. That's EBITDA, sorry. Its impact, however, is limited. And within Sacyr Construccion, there are 4 points that you have to bear in mind. First of all, more than half of the projects are for concessions. You've also seen from the presentation that the large majority of our star projects are commissioned or will commission next year in 2022. So we -- the raw material prices will not influence because everything is being done. Sacyr and all major groups have centralized procurements come -- groups or units or divisions that come -- that procure in the long term. So again, if the impact will last 5 years, well, there will be an impact. But in the event of timely impacts, the impact is really, really insignificant. Thirdly, there are certain contracts, quite a few contracts in which prices are reviewed. And many administrations are currently studying a formula for a specific price review that will be carried out one moment in time to redress this type of impact. Fourthly, as explained in many occasions, in order to mitigate or limit the construction division's risks, given the problems of seasonality, we are moving more towards open-book-type contracts where there's 0 risk. The risk is assumed entirely by the developer or the owner in the private sector because, in this way, you can also include a fee for general expenses. But it's a bit like the pandemic. It affects everyone if we look at raw material prices, but the impact on us has been limited, and we've managed to control it. It's been absorbed by the company. But again, nobody knows what's going to happen in the future. But at present, it's not a serious problem for our company. I'm not sure if there are any more questions. Yes. And also, the question about Panama. Okay. Well, the forecast is until 2022, '23, there will be no final sentence regarding Panama. And if you -- just summarizing the situation in Panama, we're talking about EUR 30 million or EUR 40 million in the cost of -- in lawyers cost over the next couple of years. There are currently $350 million in claims, plus we've never mentioned this before, a new sentence which involves the state of Panama, not the Panama Canal, which, again, of course, it was the body which contracted that work. The Panama Canal project, this claim is related to the protection of that investment, so Sacyr has done this exclusively. And the amount may be significant. Approximately $1 billion that claim proceedings are already underway. Again, nobody knows what's going to happen. It's a slow process, but it looks as if things are evolving favorably. That's all I can really tell you regarding Panama. Any further questions? Fernando, I believe that you have a question, right?

Yes. I have 2 questions, as a matter of fact. As for debt reduction, I believe that you have placed more emphasis on this matter vis-a-vis the prior plan. Are you planning to do some additional refinancing or some kind of, for example, use of derivatives or monetization of derivatives as you did in the past? And question number two, regarding construction, you've mentioned that more focus should be placed on cost plus. What about construction margins this year, taking into account refinancing and taking into account the upside of the new mix of contracts? And I have another question about the sale of assets, and let me apologize for going back to that point, even though you were quite specific about it. I understand that you want to get management reducing some of your stake. Is that right?

In answering question number one, I didn't quite understand the question, Fernando. Could you please clarify it further?

Yes. Sure, Manuel. What I'm trying to say is whether as part of your debt reduction targets, you're planning to engage in similar refinancing transactions with regards to your recourse debt. I believe that you have EUR 25 million in Repsol stakes, which provides you with some price exposure. When are you going to monetize all that?

Well, I believe that in the previous financial results presentation, I talked about all of our world levers. Of course, Repsol is one lever that is already contributing some income that will be used to reduce debt. We will, of course, use all of the mechanisms available in order to continue doing that. And we would also have another derivative, should the opportunity arise. Should there be a significant fluctuation in terms of valuation prices, for example, we would use our residual amount coming from that stake. Sacyr Medioambiente did this successfully into stages for a total of EUR 160 million, and we continue doing so, of course, when possible and provided that the conditions allow so. As for construction, let me ask Pedro Siguenza, who is the CEO of that division, to answer that question. And afterwards, let's see if we're going to agree with his opinion. So he's responsible for Sacyr Infraestructura. So what do you think about the evolution of your division or construction margin performance?

Well, I believe that he knows the answer already to this question, yes. But what about the rest of the audience? So as I said already, we have tried to reach a balance in our portfolio. We are, right now, at 60% in the case of concessions and 40% for direct works. And as for the latter, we are controlling risks very thoroughly across countries. We left Africa. We sold our business in Angola and Mozambique or as we are reducing our presence in the Middle East. There are other countries where we feel far more comfortable, and that's where we are focusing, especially by engaging in collaborative agreements. These are -- and kind of typical contracts in English-speaking countries, these are contracts set at a fixed price. So you work collaboratively with the client, and you can benefit from some bonds due to the savings achieved.

So that's our strategy at this point, but these collaborator agreements is what we call a NEC or open book or NEC in Anglo-Saxon countries.

So I fully agree with him. We were just awarded a contract in Lima. This is a direct works contract for the airport of Lima for a private concessionaire. This is a contract where price will be reviewed. Raw materials will not have, therefore, an impact on that contract.

And we -- remember, never engaging in contracts that are not too complex. And as for whether we want to keep our management approach, what we like having a controlling interest. In Chile, for example, we have 2 partners for each asset. We also have another partner in the holding company. Therefore, we have management capacity. So we like having management decision-making capacity. That's why we're always trying to handpick our partners, so we are all on the same page. We do this with those assets that we consider that still have an upside.

I have 3 additional questions. This will be my last question.

Could you please take off your face mask? Because otherwise, I can hardly hear you. That's fine.

First question. I was rather surprised when you spoke about your concession valuations. It seems as if there was no negative impact coming from COVID. I'm asking about those -- I'm asking about concessions because, here, there is always some demand risk involved. Usually, volumes are negatively affected. Could you elaborate further on that matter? And the second question. Going back to Slide 31, you spoke about some percentages. I understand that those percentages are tied to the value of concessions and the number of projects. That is to say 85% of -- this -- an 85% demand risk on total value.

Sorry. I didn't quite understand the second question says the chairman. Did you? Okay. Did you understand the question? Okay. So please go on with the third question.

And as for -- but along the lines of this question and also with regards to Slide 31, since there is a mitigation risk evolved, how do you apply formula? Because perhaps by extending the maturity date of the project, as you did in Colombia, because it seems that, there, you can extend contractual terms for 5 years. So my question is what about fixed payments? Let's suppose that in 5 years' time, there is another COVID pandemic, I'm -- I hope it's not going to happen. But what about the fixed cash flows that concessions will be collecting without having to go through this process, without building out receivables in those concessions?

Okay. In answering the first question, we didn't include COVID-19 impact because, as Maria stated, we have a 4% exposure to demand risk. Therefore, actually, we were not significantly hit by COVID. The second question will be answered by Carlos.

Okay. So we showed a pie chart broken down by income.

Well, in -- I believe that you're talking specifically about Colombia and about these 5-year mechanisms in place. Well, we already have a financing line that has been designed, according to which, if you do not reach the difference, then the remaining amount is covered, and the authorities will have to pay for the spread. So all of our financial structure takes into account other situations like, for example, COVID, all that is reflected in our cash flows outlook.

Well, could you please elaborate further on cash flows that do not actually hinge upon volumes? Will that be possible?

Well, usually, you have -- contracts normally have different terms and conditions. We can't provide you with that information. But here, we are talking about a 0 value because if -- without risk mitigation clauses, we could not sign any contracts whatsoever. If we leave 10 contracts aside, it's because they do not set out any risk mitigation clauses. We have only 4% of those and in Spain. I mean, we can provide you with that information. But actually, I don't think that is going to be revealing at all. Again, unless our contracts contain specific risk mitigation clauses, we do not execute such contracts at all.

This is Victor again. Well, based on your presentation, you said that in 2024, Italy will account for the company's current market cap without debt. So in that context and in view of somebody trying to acquire the company, based on your presentation, given that the group might include another partner or bring another partner onboard in order to block such transaction.

Well, answering such a question is kind of far-fetched because we are talking about a decision that will have to be made by the Board of Directors. We have 38% of capital. That's a capital that is represented on the Board of Directors. That's not part of our outlook for the time being. If the situation arises at some point down the road, we will have to consider such a scenario.

If there are no additional questions in the room, let me now read aloud the questions that came in via webcast. The first question is about Chile. Do you think that the political context in the country could affect the company's future plans for the Sacyr Concesiones division?

Well, in Chile, apart from, well, all the social turmoil that was already controlled, there were 2 other developments that are worth mentioning. I hope or I'm almost certain about this. In order to enact a new national constitution, certain parliamentary results should be evidenced. There are -- there will be general elections in the country in 2 months' time. The 2 main parties are center-, right-wing parties, so both parties are center again and right-wing parties. So I believe that once order is reinstated in the country and given the country's context with a population of 14 million people, now Chile is a big country, life-wise mainly. And it's also one of the projects that has proven to have one of the most successful concession projects in the world. They have been able to organize the country without much budgetary allocation. And right now, they are doing -- well, they are developing some social and hospital infrastructure that is also quite solid. So right now, we already have a significant pipeline in Chile. So to be honest, in the short and medium term, I don't think we are going to face any major issues in the country.

Next question. As Carlos spoke about cash flow, there's a question about EUR 735 million. Are you including rotation in that amount? Second, are you including some upside coming from Panama or from Repsol derivatives? And the third question is the following: Once the net recourse debt amounts to EUR 100 million by 2025, where will the group allocate all of the cash flow that will be generated subsequently?

Well, those EUR 735 million do not include any asset rotation. That's what the group's cash flow generation, the business cash flow generation. So Panama or Repsol have not been included there. They will be used to reduce debt, but that amount has not been reflected in the EUR 735 million.

Let me answer the third question, which is tied to another question concerning shareholder remuneration and growth. With regards to Chile and Italy, how do we deal with noncontrolling interest or controlling interest in Chile and Italy?

Based on our EBITDA forecast, we are using partial or total consolidation for that purpose. As for accounting consolidation, this affects both our revenue and EBITDA. In the case of Chile, both projects are recognized under consolidation, except for AVO. We go on a project-by-project basis. AVO is not recognized in our revenue and EBITDA figures because we have a 50% balance here. So we go for a project-by-project approach. In the case of the Panama Canal, which is the most important infrastructure project in history and in the world, it's set at 0, and we were not able to comply because of the arguments we all know.

The next question is about refinancing. We have included some model refinancing. So the question is whether our portfolio can still be further refinanced.

During the presentation, I believe this was already mentioned. But actually, we should be a little bit more specific about the refinancing we have done. I believe that this was made quite clear during the presentation. Our company is leveraging capacity, except for the projects that will be refinanced, have not been considered. We saw some coverage ratios that Maria explained. So I believe that we still have some additional leeway here in order to do intelligent management. Maria, would you like to add anything in this respect?

Not on my end.

So I believe that other questions have already been answered. There are other more technical questions that will be answered later by the Investor Relations department. And now let me give the floor back to the Chairman.

Well, let me extend our heartfelt appreciation to all of you. Please do remain in touch with the Investors Relations department and the members of the Board of Directors for any additional questions you may have. Thank you very much for attending this Investor Day, and we look forward to meeting you all again at the next Investor Day. Thank you very much. [Statements in English on this transcript were spoken by an interpreter present on the live call.]