Integrated Sustainability report 2020

02 Business Model

Performance
of the Sacyr group

Tunnel boring machine in Fortaleza metro, Brazil

Positive performance
of the group as a whole,
despite COVID-19

Income statement
Balance sheet

CONSOLIDATED INCOME STATEMENT (Thousands of euros)	2019	2020	% Chg. 20/19
Revenue	4,169,467	4,547,878	9.1%
Other income	367,192	304,366	-17.1%
Total operating income	4,536,659	4,852,244	7.0%
External and operating expenses	-3,856,901	-4,128,639	7.0%
EBITDA	679,758	723,605	6.5%
Depreciation and amortisation	-254,126	-178,152	-29.9%
Provisions and other non-recurring expenses	15,350	-78,327	n.a.
EBIT	440,982	467,126	5.9%
Financial profit/loss	-315,920	-274,888	-13.0%
Gains/losses on exchange differences	5,798	-56,813	n.a.
Share of profit from equity-method companies	-259,841	-337,358	29.8%
Provisions for financial investments	11,317	-38,479	n.a.
Change in value of financial instruments at fair value through profit or loss	-112,682	380,813	n.a.
Gain/(loss) on disposal of non-current assets	46,486	95,847	n.a.
Profit/(loss) before tax	-183,860	236,248	n.a.
Income tax	-89,327	-125,361	40.3%
PROFIT/(LOSS) FROM CONTINUING OPERATIONS	-273,187	110,887	n.a.
PROFIT/(LOSS) FROM DISCONTINUED OPERATIONS	0	0	n.a.
CONSOLIDATED PROFIT/(LOSS) FOR THE YEAR	-273,187	110,887	n.a.
Attributable to non-controlling interests	-24,546	-75,190	n.a.
NET ATTRIBUTABLE PROFIT	-297,733	35,697	n.a.
Gross margin	16.3%	15.9%

CONSOLIDATED BALANCE SHEET (Thousands of euros)	DEC. 2019	DEC. 2020	Chg. 19/20
Non-current assets	9,309,908	9,954,680	644,771
Intangible assets	21,572	34,209	12.637
Concession projects	876,680	880,832	4,152
Property, plant and equipment	334,174	318,071	-16,103
Rights of use on leased assets	135,052	127,712	-7,340
Financial assets	3,174,683	2,872,117	-302,566
Receivables from concession assets	4,576,454	5,590,902	1,014,448
Other non-current assets	94,967	34,689	-60,278
Goodwill	96,327	96,148	-179
Current assets	4,597,115	4,436,977	-160,138
Non-current assets held for sale	347,254	0	-347,254
Inventories	241,321	230,887	-10,434
Receivables from concession assets	328,912	523,701	194,789
Receivables	1,990,911	1,950,807	-40,104
Financial assets	76,821	434,635	357,814
Cash	1,611,896	1,296,947	-314,949
TOTAL ASSETS/LIABILITIES	13,907,023	14,391,654	484.633
Equity	1,190,371	962.593	-227.778
Shareholders' equity	825.199	557.307	-267.892
Non-controlling interests	365,172	405,286	40,114
Non-current liabilities	8,178,417	8,891,429	713,012
Financial debt	5,070,098	5,814,174	744,076
Financial instruments at fair value	209,410	210,993	1,583
Lease obligations	90,296	85,573	-4,723
Provisions	214,396	191,853	-22,543
Other non-current liabilities	976,775	1,939,040	962,265
Other hedged debt	1,617,442	649,796	-967,646
Current liabilities	4,538,236	4,537,635	-601
Liabilities associated with assets classified as held for sale	227,543	0	-227,543
Financial debt	931,869	758,740	-173,129
Financial instruments at fair value	20,555	18,558	-1,997
Lease obligations	38,338	30,739	-7,599
Trade payables	2,466,050	1,597,553	-868,497
Operating provisions	204,108	220,973	16,865
Other current liabilities	649,773	943,426	293,653
Other hedged debt	0	967,646	967,646

2020 SIGNIFICANT EVENTS

Some of the most significant events that took place during the year, are as follows

SHAREHOLDER REMUNERATION

In January 2020, Sacyr implemented the Flexible Dividend (“Scrip Dividend”) program approved at the 2019 Annual General Shareholders’ Meeting. Shareholders were able to choose between receiving one new share for every 46 shares outstanding or selling their pre-emptive subscription rights to Sacyr at a guaranteed fixed price of €0.056 gross per right.

More than 94% of Sacyr’s shareholders elected to receive the Flexible Dividend in shares, for which a total of 11,980,391 new shares were issued. These shares began trading on February 19, 2020.

More than 92% of shareholders elected to receive the Flexible Dividend in shares, for which a total of 11,878,992 new shares were issued, giving Sacyr’s new share capital a total of 616,451,031 shares.

The new shares began trading on the Spanish stock exchanges on February 10, 2021.

DIVESTMENT AND ASSET TURNOVER

In June 2020, having fulfilled the conditions precedent of the sale agreement, Sacyr announced the divestment of 95% of the mature asset “Guadalmedina Highway” for a total amount of 455 million euros, including the associated debt. This transaction has been divided into two parts:

A first, corresponding to 47.5% of the assets, and whose purchase and sale agreement was announced in October 2019, with the sale materializing during the first quarter of 2020.
A second part, corresponding to the remaining 47.5% of the assets, was signed at the beginning of the year and formalized in June, once the suspensive conditions of the agreement had been fulfilled.

Following this transaction, Sacyr retains 5% of the concession assets, which it will continue to operate and manage in the future.

CORPORATE RESTRUCTURING

In April, Sacyr decided to restructure its business areas, integrating its two EPC areas into a single division: Sacyr Engineering and Infrastructures and Sacyr Industrial. In this way, the group’s operating divisions are reduced to three: Sacyr Concessions (P3), Sacyr Engineering and Infrastructures and Sacyr Services.

This organizational simplification will lead to significant synergies between the three areas mentioned above, and will also allow for a more effective vertical integration of the business for customers and, therefore, greater efficiency.

It is also perfectly aligned with Sacyr’s strategic program to become, increasingly, a group with a markedly concessionary profile.

As a result of this, Sacyr Concessions (P3) has decided that the management and development of the Water segment (integral cycle) will be led by Sacyr Concessions (P3), so that most of the concession business is grouped under the same division.

Valoriza Medioambiente

ACTIVE MANAGEMENT OF THE REPSOL SHAREHOLDING

During 2020, Sacyr continued to be a core shareholder of Repsol through a 7.83% stake in the oil company (7.93% after deducting treasury stock). This year, as a result of Repsol’s “Flexible Dividend” program, Sacyr, through its investees: Sacyr Securities S.A., Sacyr Investments S.A.U. and Sacyr Investments II S.A.U., received a total dividend of 112.4 million euros (52 million euros at the beginning of January, on account of the 2019 results, and 60.4 million euros at the beginning of July, complementary to the 2019 results). Sacyr has actively managed its stake in the oil company in order to maximize its investment, which is protected in its entirety through three derivative structures financial derivatives.

DERIVATIVE ON TREASURY STOCK

On July 10, Sacyr signed a derivative contract with a credit institution for a total of 10,000,000 Sacyr shares, divided in two tranches:

A tranche of 5,000,000 shares consisting of a buy option (call) in favour of Sacyr and a sales option (put) in favour of the credit institution, both with an initial exercise price of approximately €1.80 and an average maturity of one year.
Another tranche of 5,000,000 shares consisting of a buy option (call) in favour of Sacyr and a sales option (put) in favour of the credit institution, both with an initial exercise price of approximately €1.80 and an average maturity of two years.

Panama

During the month of September, the International Chamber of Commerce (ICC) has ruled the award on the basalt and concrete formula claims, laboratories and geological faults presented by the consortium Grupos Unidos Por el Canal (GUPC). This award determines that the consortium has to return part of the claims collected, around 240 million dollars, to the Panama Canal Authority (ACP). On the other hand, approximately $25 million was recognized in favor of GUPC for additional laboratory expenses and for the existence of undetected faults in the field.

EXIT OF NON-STRATEGIC MARKETS

During the month of October, Sacyr signed a sale and purchase agreement with the Angolan group Griner for the sale of three subsidiaries: Sacyr Somague Angola, Sacyr Somague Mozambique and CVC Sacyr Somague in Cape Verde. The amount of this transaction amounts to 33 million euros.

CONSOLIDATION IN STRATEGIC MARKETS

The Sacyr Group has been awarded its first concession in the US market, meeting one of the strategic milestones set. The project consists of the operation, maintenance and improvement of the power, water and steam generation and distribution systems on the University of Idaho campus.

Financial analysts

At the end of the 2020 financial year, twelve research firms were actively monitoring Sacyr shares. Of this group, 92% of the recommendations are buy recommendations and one is a sell recommendation, equivalent to 8% of the total.

TTC BY BUSINESS GRAPHIC

SECTOR AVERAGE

Sacyr

The Group’s main value creator

Revenue

+ 0 %

Millions of euros

Future
income backlog

- 0 %

Millions of euros

EBITDA

+ 0 %

Millions of euros

Leaders in infrastructure development...

Km of
motorway

hospital
beds

millions of travelers
a year
at hubs

millions of passengers
a year
at airports

km of train
track

countries

concessions (P3)

years
remaining

million of global
investment in
20 years

...with a highly diversified backlog

Millions of euros
[+8.1%]

Infrastructure

Millions of euros
[+7%]

Water

Millions of euros

Concession income

Millions of euros
[+42%]

Construction income

0 %

of the
international
market

International backlog

Spain, Italy, Ireland, Portugal, Chile, Brazil, Colombia, Mexico, Peru, Uruguay, Paraguay, Oman, Argelia, Australia, and United States

Leader in all types of civil works, industrial and building projects

Revenue

+ 0 %

Millions of euros

EBITDA

+ 0 %

Millions of euros

Order
book

- 0 %

Millions of euros

We make infrastructures that improve people’s lives

THE MAIN MILESTONES IN 2020 WERE (Millions of €):

Spain

Building of offices and various promotions 347
Construction of photovoltaic plant in Badajoz 59
Electrical installations for Adif 51
Building of the Spanish high-speed railway line (AVE) linking Vitoria-Bilbao-San Sebastián. Elorrio tranche 40
Work on Granadilla port in Tenerife 11

Peru

Rehabilitation and improvement of the “Mollepata-Santiago de Chuco” road in the region of La Libertad 84

USA

Construction of a detour for the US59 road in Texas 128

Chile

Extension Nogales-Puchuncavi road 94
Construction of Wind Farm 24

Portugal

Modernisation and improvement Beira Alta Railway 58
Construction school in Azores 13

Brazil

Tranche 3 of the railway line in Brazil, which is added to tranches 1 and 2 under way 24

Australia, Brazil, Canada, Qatar, Chile, Colombia, Spain, United States, Italy, Ireland, Mexico, Peru, Portugal, United Kingdom, Paraguay and Uruguay

Always focused on an end-to-end customer service

Revenue

- 0 %

Millions of euros

EBITDA

- 0 %

Millions of euros

Order
book

- 0 %

Millions of euros

We conduct a wide range of businesses

Environment: municipal services, waste treatment, environmental projects

Facilities: facilities management, social services

Infrastructure maintenance, mining

Cafestore: restaurant services

+ 0

New contracts

countries

Strategic markets

Australia, Chile, Colombia, Italy, Mexico, Paraguay, Peru, Spain, and Uruguay

Contribution to the 2030 Agenda

Click on the objectives to learn more

Donation of gifts to children hospitalized at the Infanta Cristina Hospital in Parla and the Henares Hospital in Coslada. Spain.
Donation of gifts to Juventudes Hospitalarias of Parla. Spain.
Donation of gifts to children in situations of exclusion at Asociación Nazaret, Madrid. Spain.
Collaboration with the Spanish Red Cross to promote programs against social exclusion. Spain.

CAFESTORE. Preparation of more than 2,000 daily menus for three months, which were donated to a soup kitchen. Spain.
Food Collection Campaign with the Food Bank. +8,000kg in 2020.Spain.
Donation of food kits in the most disadvantaged areas of Peru, Mexico and Colombia, through the NGO Ayuda en Acción.
EDUCO School Lunch Grants Funding. Spain.

Donation of medical supply to the Madrid City Council and to residences of Plena Inclusion Spain with intellectual disabilities people.
Donation to the AECC for cancer research. And dissemination of talks and awareness-raising days for the prevention of breast cancer. Spain.
Protocol Certification of Sacyr Facilities, S.A. (and subsidiaries) with regard to COVID-19 infections and to manage work centres included in this scenario. Spain.
Collaboration with AESRT to publish a children’s story to raise awareness of the disease and help raise funds for the association. Spain.

STEM education days for students aged 16-25 years old. Spain.
Collaboration with EXIT Foundation to promote mentoring with minors and prevent them from dropping out of school. Spain.
Collaboration with Aldeas Infantiles SOS Chile, in the “School in your Village” program, for post-pandemic school reintegration.
Organisation of training sessions on biosecurity protocols to support the economic reactivation of 60 restaurants in Pasto, Colombia.

Approval in July 2020 by the Board of Directors of the Diversity and Inclusion Corporate Policy, which sets our strategy at a global level.
Corporate Protocol for prevention and action in cases of harassment and discriminatory acts.
Specific committee for the prevention of harassment, with members trained in the management of procedures derived from the protocol.
We monitor the salary gap between men and women, which does not exceed 6% in any of our professional categories.
We have an equal presence of men and women in our workforce. 42% of our employees are women.

In 2020, the use of recycled or reused water accounted for 21.74% of total water supply for own consumption, 17% on the previous year.
In June 2020, Sacyr’s Board of Directors approved the Water Policy, which defines and establishes the principles and criteria that govern the procedures in use and management of water.
Sacyr Water. Social fees and procedures for non-payment.
We avoided the consumption of 1,029,770m³ of drinking water, prioritising the use of recycled water. 25% water reused over of total consumption.

In 2020, domestic energy consumption was 3,772,047.66 GJ, 65% less than in 2019.
Sacyr has renewed its greenhouse gas verification under the ISO 14064-1 standard for the Construction area in Spain, as well as for Valoriza Medioambiente’s national waste treatment plant services and operations.
Sacyr’s commitment to achieve carbon neutrality by 2050.
Renewal of the registration of its Carbon Footprint in the Registry of the Ministry for Ecological Transition and the Demographic Challenge, Spain.

Development of the “ONBOARDING DIGITAL KM 0 - EMPLOYEE SATISFACTION” programme.
During 2020, Sacyr's headcount comprised 44,623 workers (in 2019 there were 43,467 people in Sacyr). This represents an increase of 2.7% over the previous year. Of this total workforce, 24,331 are men (22,609 in 2019) and 20,292 are women (20,8558 in 2019)
90.08% of those interviewed for the Onboarding Digital Km 0 Programme are quite satisfied or very satisfied with their recruitment at Sacyr.
Workshops and employee training days have been organised, which have involved 328,294 hours of training.

Sacyr Innovation Awards
3rd Edition of Sacyr iChallenges, aimed at solving challenges and needs of the company’s businesses.
Number of employees participating in projects: 261
Number of projects under development: 44.
Group companies certified under UNE 166002:2014: 13 Investment in R&D+i:
+€8 Million
6.6% of Net Profit invested in innovation.
Campaign “You are part of the challenge. Sacyr for the Climate”: 130 employees, 10 countries, 241 proposals.

Training in equality and non-discrimination through the Week of People with Disabilities, on the occasion of the International Day of People with Disabilities (Dec. 3).
We promote the labor inclusion of people with different abilities, through collaboration with foundations and entities such as Capacis, Inserta, Incorpora, and A LA PAR. We have a presence at specialised employment trade fairs. In 2020, we hired 963 disabled employees.
We promote multicultural presence as a source of knowledge and talent. The company employs people of more than 86 nationalities and is present in more than 20 countries.
We have implemented specific programmes for each generation, according to their needs:
- Sacyr Generation Senior.
- Sacyr Builds Future.

SMART Guadalajara: application for the management of street cleaning and solid urban waste collection services in which the citizen plays a leading role.
Sacyr Engineering and Infraestructure has obtained the sustainable certification BREEAM in the promotion of Badalona H20 homes.
Kompas, the system developed by Dinami-K Ingeniería and implemented by Valoriza Medioambiente in the city of Huelva, enables oversight of city control teams and optimisation of traffic management.
Development of the Sigolis app by Valoriza Medioambiente, which enables trucks to collect industrial and urban solid waste (USW) in general, constantly geolocated, further automating the collection process.

Environmental and social impact assessment of 2,436 suppliers. 36% of our suppliers are local, promoting the growth of local economies.
Integration of the new lines of the Spanish Circular Economy Strategy.
Participation in the publication of “34 Green Economy Cases”, as part of the Spanish Green Growth Group (GECV).
Sacyr used 9,607,464.92 tonnes of recycled or reused materials in 2020, representing 55.84% of the total materials used.
Approval of Sacyr’s new Supply Chain Management Policy.

Launch of the “Sacyr for the Climate - You are part of the Challenge” campaign, with the aim of reducing the company’s climate footprint.
Launch of the environmental sustainability training programme, with a special focus on climate change.
Review and update of Sacyr’s Climate Change Policy. A- rating, through the Carbon Disclosure Project (CDP), for performance in the area of climate change.
We obtained the “CALCULO” and “REDUZCO” seal from the Ministry for Ecological Transition for the 7.34% reduction in CO₂ in the three-year period 2016-2018.
Offsetting of emissions associated with travel by Sacyr executives.

The company has just approved the Sacyr 2021-2025 Sustainable Plan, one of whose areas of action is the protection biodiversity, with a specific objective: to set biodiversity conservation objectives in all contracts.
Preparation of monitoring reports on the status of species.
Carrying out environmental education workshops, aimed at raising awareness and sensitization to preserve fauna and flora.

6,898.36 Km² of total surface area of areas protected by Operations Centres owned, leased or managed by the Group.

Protection of more than 1,200 species.
In 2020, the most significant effects were the alteration/destruction of habitats, effects on animals and plants, and loss of plant cover. Measures adopted included maintenance of wildlife crossings, reforestation of felled species and the circulation of vehicles at moderate speeds.
In 2020, a total of 3.05 hectares of the total area affected by the development of our projects has been restored.
Volunteering in Spain
- Asociación Reforesta: planting of trees and river cleaning.

Code of Conduct and its policies, Consulting and Whistleblower hotline and Regulatory Compliance and Crime Prevention Model.
Sacyr’s Board of Directors has 13 members at 31 December 2020: one executive director, five proprietary directors, six independent directors and one non-executive director.
Total compliance with Good Corporate Governance recommendations is 91.23%, up 20% year-on-year.
Certification in Corporate Social Responsibility according to SGE21.

Integrated Sustainability report 2020

Integrated Sustainability report 2020

02

Business Model

Performance
of the Sacyr group