Good morning, ladies and gentlemen, and welcome to Acciona's results presentation for the first half of 2021. José Manuel Entrecanales, Chairman and CEO, and José Ángel Tejero, Chief Financial and Sustainability Officer, will be presenting today. Previously, let me read a legal disclaimer. Access to this presentation and the information contained herein is limited to persons who are resident and physically present in Spain, and certain authorized persons who are resident and physically present in other jurisdictions outside the United States, Canada, Australia, South Africa, and Japan. If you are present in the United States, Canada, Australia, South Africa, and Japan, or you are present outside of those jurisdictions but are not authorized to access this information pursuant to applicable securities laws, we regret to inform you that due to regulatory restrictions, your access to this information is restricted.
Acciona assumes no responsibility for any violation of applicable law and regulations by any person who gains undue access to this presentation and the related information. Now, let me hand the floor to José Manuel Entrecanales.
Thank you, Pepa. Good morning, everyone. I'm José Manuel Entrecanales, Chairman and CEO, I will make a brief introduction and leave the floor to José Ángel Tejero, Chief Financial and Sustainability Officer. Let me start by saying that this first half has been possibly one of the most important moments in Acciona's history. As you all are aware, we have floated our energy business. The decarbonization secular trend is picking up. Now, according to the International Energy Agency, 70% of global GDP has pledged to become carbon neutral, mostly around the 50%s of this century. Obviously, the energy sector is the lowest hanging fruit. The electricity generation sector is particularly adequate to tackle decarbonization and mitigation of climate change. That's the rationale behind our IPO.
These new, much-enhanced circumstances of need to decarbonize, the need for new capital, as an independent company with the highest ESG ratings and the stronger balance sheet and the lower cost of capital, was a must to tackle this decarbonization trend that I mentioned. After approximately three decades of building up, we have created the first global pure renewable utility in the world, with presence in many countries, 16 countries with a fully integrated value chain where we develop our own pipeline, we build our own projects, we naturally operate and manage them, we sell our energy, and we help our customers decarbonize through our energy services. We have an enormous pipeline to double our installed capacity by 2025 and triple it by 2030. Above this, huge opportunities, huge positive optionalities in all other areas, energy-related, mostly in green energy and totally in this area.
Area green hydrogen, floating PV, offshore wind, both floating and fixed bottom, or battery storage. An extremely positive outlook for our energy business. The IPO has been successful. It has been done, as you all are aware, in a very challenging moment with not positive market conditions. Finally, I must say with a good work from the syndicate and of course the teams and the presentation teams and hard work from all of us, we have succeeded to come out at a reasonably acceptable level. Now the trend is the right one. We have, I think, given the market the confidence that this company will be able to finance itself and stand as a leader in the sector for the future. Having said all that, mitigation, adaptation, and resilience to climate change requires action in all types of infrastructures.
Despite energy sector being the lowest hanging fruit, all other types of infrastructure need action to adapt, mitigate, and to bring the resilience to society. This IPO also helps Acciona to develop our capabilities in tackling water, transport, urban waste, housing, or social infrastructure needs through a stronger balance sheet and lower cost of capital. That, together with our strong ESG credentials, our technical expertise, 100-year experience, stable shareholding, and global reach, put us in a privileged position to lead the global SMART. We call them SMART because it's sustainable, mitigating, adaptation, resilience, and transformation infrastructure of the world. The IPO is good for Acciona Energía, but it's an absolute must for the rest of Acciona infrastructures, as the opportunities there also build up in a very significant way.
Acciona is today a better company, ideally suited to tackle one of the fastest-growing sectors in the world, and an absolute necessity for social development, for economic growth, and environmental balance around the world. As for the first half results, it is worth noting that the recovery from the pandemic is slower than expected, and also worth noting the negative impact of two industrial EPC contracts with negative margins. Let me say that this activity has been discontinued, which should avoid further losses for the future. On the very positive side, following the successful integration of Lendlease, we expect the Australian business to consolidate as the main contributor to the construction business of the group. All other activities perform according or better than expected, naturally considering the non-linear nature of the first half results.
Let me hand on to José Ángel, just let me reiterate our guidance for the year. Judging from the very strong demand and the healthy backlog, I can also say that I'm confident in a very positive outlook for the short and medium term. Thank you very much.
Thank you, José Manuel. As we go on with the presentation, we see in slide four, we present the key financial highlights of the first half of the year. As you can see, we have obtained strong growth rates across the entire profit and loss account. Revenues grew by 17% to EUR 3,555 million, with a 23% growth in energy and a 19% increase in infrastructure. EBITDA grew by 29% to EUR 643 million, with infrastructures increasing by 76%, benefiting from the growth in revenues and the comparison with a weak first half in 2020, which was negatively affected by the pandemic, particularly in the second quarter. Energy EBITDA increased by 18% and other activities grew by 11.6%. Earnings before tax, before our share of Nordex results, amount to EUR 246 million, more than 2x higher than the figure reported in the first half of 2020.
Attributable net profit reaches EUR 148 million, more than 7x higher than the previous year. Net investment cash flow in the semester reached EUR 1,122 million, with most of the investment, therefore, in the energy business. This compares to EUR 504 million in the first half of 2020. Net financial debt stands at EUR 5.8 billion versus EUR 5.7 billion a year ago. Relative to the previous quarter, net debt has remained broadly unchanged. As we mentioned, this figure does not include the impact of Acciona Energía IPO proceeds, which would result in a pro forma net debt of EUR 4.3 billion. In slide five, you can find our ESG highlights and key environmental and social performance metrics. We have launched our new sustainability master plan for the period 2025. That adds regeneration to the responsibility and resilience dimensions of our two previous plans.
We have been the first Spanish electric utility to join the climate pledge, remaining committed to achieve carbon neutrality in 2040. I would also like to highlight the innovative double impact ESG structure incorporated in our EUR 3.3 billion indicated facilities, which is another milestone for us, and we think for the financial market as a whole. With regards to the key ESG indicators, I would like to highlight the increase of the number of women in executive and managerial positions, and also the increase of renewable energy generation, mainly in the U.S., Mexico, and Chile. Going to slide six, we provide detail on the investment by division, which reach a total amount of EUR 1,122 million, most of it in the energy division.
Acciona Energía presented yesterday its first set of results as a listed company, invested EUR 661 million during the first half of the year, which includes, amongst other things, EUR 404 million of ordinary CapEx and the payment of the acquisition of an 8.33% stake in its subsidiary, Acciona Energía Internacional from KKR, bringing the current stake up to 75%. The total cash outflow also includes payments that were deferred in 2020 to 2021 to protect the balance sheet in the pandemic year. In infrastructure, we have invested EUR 143 million. The most important cash outflow has been the payment of the second installment for the purchase of Lendlease Engineering of EUR 70 million.
Other activities, with a total investment of EUR 277 million, includes the acquisition of Silence, the electric motorbike manufacturer, for EUR 34 million, as a result of which we have strengthened our strategic position in the urban mobility business, becoming a vertically integrated player. For the investment in other activities, also includes a loan granted to Nordex for around EUR 200 million, and which has been capitalized as equity in July 2021 as part of the EUR 584 million capital increase carried out by Nordex.
As a result, our stake in Nordex remains unchanged at 33.63%. We have invested EUR 103 million in property development in the first half of 2021, including the acquisition of 51 of land in prime locations in Madrid and Barcelona. Lastly, we have collected from the sale of our portfolio of Spanish concessions agreed in Q4 2020, and which has been partially cashed in in 2021.
Going to slide seven, you can see the large cash flow items that explain the evolution of the net debt during the first six months of the year. The most important moving part has been the EUR 1,122 million net investment already mentioned. Working capital outflow of EUR 187 million in the first half of the year implies a positive evolution of EUR 32 million in the second quarter standalone. While financial results amounting to EUR 95 million have been 10% lower than the same period during the last year. Going to slide eight and nine, pro forma net debt. We present the detailed information about Acciona financial position. Firstly, in slide eight, we provide the reported net debt as of June 2021, EUR 5.8 billion, which includes EUR 2.2 billion of gross cash.
We have reduced the average cost of our debt from EUR 2.8 million in FY 2020 to EUR 2.6 million in the first six months of 2021. We expect to a further reduction of our cost of debt as a result of the independent access of Acciona Energía to the financing markets. In slide nine, we present the pro forma net debt with the net proceeds of the IPO cashed in in July. We have adjusted the maturity profile on a pro forma basis as well. The net cash proceeds from these transactions amount to almost EUR 1.5 billion, resulting in a pro forma group net debt, post IPO, of EUR 4.3 billion. In slide 10, we present the main operating and financial data of Acciona Energía. I will not elaborate much on Acciona Energía given that it has already published its first half results in full detail.
Revenues grew by 23.2% to EUR 1,041 million. EBITDA grew by 18.3% to EUR 501 million, driven by the very high prices achieved by the new capacity and operation in the U.S. market in the context of the Texas snowstorm, the slightly higher prices and generation volumes recorded in Spain. In terms of capacity addition, Energy has added 494 MW in the first six months of the year, which puts them on track for the close to 600 MW targeted for 2021 as a whole. 495 MW are under construction as of the end of June. 1.3 GW are scheduled to start construction during the second half of the year. Lastly, total output increased by 4.1% on a consolidated basis, thanks to the new capacity and operation. By geographies, production increased by 2.3% in Spain and 6.1% abroad. Going to slide 11.
The infrastructure business has had a good performance in the first half of the year, with a 19% increase in revenues and a 76% increase in EBITDA. Construction revenues grew by 25%, reflecting an important acceleration in the pace of execution in the second quarter versus the first one, and the significant normalization of the building environment, despite COVID not being fully out of the picture yet. Construction EBITDA reached EUR 57 million, compared to just EUR 1 million in the first half of 2020, which was very negatively affected by the pandemic. As we said in Q1, infrastructure activity is not yet 100% COVID-free, but business is gathering momentum as the year advances, particularly in our Australian business and as the Line 6 project in São Paulo builds up.
With EBITDA margins going into normalized numbers of between 4% to 5% in the second half of the year and the next year, based on the high quality of the backlog of the business. The concessions activities is a decline in EBITDA, driven by the exit of our perimeter of the Spanish concession portfolio we agreed to sell in December. The water business continues to see high levels of activity and stable margins. Its contribution increases by 5.9% at the revenue level and 6.4% in terms of EBITDA.
Our total infrastructure backlog reaches a new record high with EUR 17.4 billion, compared to EUR 14.9 billion six months ago. In this figure, the project backlog, which is construction and water, amounts to EUR 12.5 billion. Again, another record high. In slide 12, we see that this EUR 12.5 billion of project backlog provide a lot of support for future growth of our construction business.
Australia represents our largest market, with EUR 2.2 billion of order book, followed by Brazil with EUR 2 billion of backlog linked to the landmark Line 6 project, and Spain with EUR 1.9 billion. During the first six months of the year, we have obtained new awards worth EUR 2.4 billion. Among the most relevant projects awarded in the first half of the year, we would highlight the Jubail 3B desalination plant in Saudi Arabia, the Tren Maya in Mexico, the works to improve Frankston railway in Australia, and several projects in Poland for an amount of EUR 249 million.
In July, we have been awarded some significant new projects, such as the contract for the construction of a trunk in the Sydney Metro West in Australia for EUR 1.24 billion, or the Fargo concession in the U.S., which will imply not only works for the construction unit, around EUR 350 million, but also concession revenues for a period of 29 years. Going into slide 13. Sales and EBITDA of our property development business have shown a decline in the first half of 2021 versus the first half of 2020 due to the lower number of houses delivered, 156 now, versus 301 last year. However, we expect deliveries to accelerate in the second half of the year towards a total around of 400 units for the year as a whole.
However, it is important to highlight that we have 1,700 units under commercialization in Spain, Poland, Mexico, and Portugal, equivalent to EUR 486 million in prospective revenues. Out of this figure, our backlog of pre-sales reaches EUR 281 million, which implies 58% of the total stock under commercialization. These pre-sales provide a good degree of visibility to our delivery schedule and should convert into revenues during the next 24 months. In the first half of 2021, we have invested EUR 113 million in property development, EUR 51 of it corresponding to land in prime locations in Madrid and Barcelona. Additionally, in July 2021, we have acquired from ADIF a land plot in Méndez Álvaro, Madrid to develop 450 units, which will be devoted to build to rent for delivery in 2024. Also, our offices and logistics segment is showing an encouraging positive trend.
A proof of that is today's signing of a long-term lease with Webhelp of our 20,000 sq m property in the Barcelona business district 22@, in a JV with Tristan. The gross asset value of our property portfolio is estimated at EUR 1,165 million. This figure includes not only the housing development business, but also 90,000 sq m of offices and logistics, which are under construction in Madrid and Barcelona, and out of which 74% are already leased in pre-lease agreements with tenants. In slide 14, we see the performance of Bestinver. Bestinver has had a very good performance in the first half of the year, with almost 30% increase both in revenues and in EBITDA.
Total assets under management increased by almost EUR 1 billion in the first six months of the year to EUR 7.4 billion, where average funds under management increased by EUR 1.2 billion to EUR 6.9 billion, including the successful launching of Bestinver Infra Fund with EUR 127 million assets under management as of June 30th. EBITDA growth has also been driven by the higher contribution of Bestinver Securities. With this, I hand it over to Pepa for the Q&A.
Thank you very much. Now we are going to start reading the questions that you have kindly sent us. First, we have some questions from Óscar Nájar from Banco Santander. Óscar is firstly asking about construction. This question has also been asked by José Porta from Kepler. He's a little bit disappointed with the margin that we have reported in the first half, 3.5% EBITDA margin. He expected us a higher improvement, with the works that we had in the order book. He wants to know how do we see the rest of the year? How do we see 2022? When do we expect to have an EBITDA margin in the range of around 5% in this business?
Thank you, Pepa. We have to say that there is still some delays in the start of new projects due to the pandemic. In addition to that, as José Manuel said, there is a negative contribution of two negative industrial contracts that have, as I said, negative contributed to the results of the construction segment in this second quarter. We have commented during the presentation also, construction is gathering momentum, and we expect to have a much better H2 in 2021. With regards with normalized EBITDA margin, as also I have said in the presentation, based on the high-quality order book that we have, we have estimated that in 2022, we should also already be delivering normalized margins of between 4% and 5%.
I also would like to take this opportunity to highlight the good evolution of the working capital in the first half of 2021, in the infrastructure division, because out of the EUR 187 million working capital outflow, EUR 86 million correspond to the infrastructure division, which I think is a very good performance.
Okay, moving to the next question from Óscar. He wants to know a couple of things about Nordex. Firstly, he highlights that the company has had an improvement in results in the second quarter versus the first Q. He wants to know if we expect a further improvement in the rest of the year. Linked to Nordex, as I was saying, he says that we've invested money in the company for a few times and if we expect further investments from Acciona in Nordex.
We have a positive view on Nordex as a general, but the results on Nordex has to be described in the Nordex presentation. As I said, we have a positive view on Nordex outlook. To mention the mention of our support to Nordex, we see it more as an investment, not a support, an actual support. Nordex shows a fully capitalized balance sheet. It is very strong balance sheet, and it is ready to capture the future growth of the wind turbine manufacturer.
Let me add there that Nordex is a strategic investment for Acciona. This is part of our strategy. It's an essential tool for the energy activity, and it is a source of competitive advantage, which we obviously hold at a corporate level, at parent company level. For obvious reasons, because it's holding together an OEM and the energy business doesn't make sense or would be a distorting factor for the energy business. However, it is a key element of the energy strategy.
Excellent, thanks. Last question from Oscar. He wants to know two specific items of the P&L account. He wants to know what are we including in the results from asset disposals for an amount of EUR 55 million. He also wants to know the provisions for an amount of EUR 65 million.
Yeah, the EUR 55 million correspond to the capital gains obtained with the sale of the portfolio of the Spanish concessions that was agreed in Q4 2020, but has been executed now in 2021. The provisions of EUR 65 million, as I said, I've mentioned before, corresponds to some onerous contract, mainly in the industrial business.
Okay, moving to the next analyst, we have questions from Daniel Rodríguez from Bestinver. Talking about the property division, he highlights that we have invested EUR 51 million in land this quarter. He would like to know what are our plans for this activity in the medium term.
Yes. In relation to the real estate business, our cruise speed in terms of deliveries is around 1,000-200, and we expect to reach it by 2023.
Units.
Units. I'm sorry. Yeah. I'm being corrected. Correct. We expect to reach it by 2023 to 2024.
Next question from Daniel Rodríguez has also been asked by José Porta from Kepler. Both would like to ask if we can give them any update on the potential JV in services with Ferrovial that has been published in the press in recent days.
What we can say is that, in terms of this business, this is a business that requires scale. Always, we are looking into all possibilities for the purpose.
Okay. Thank you. José Porta from Kepler again. He wants to know about the energy business. He asks, can you please provide an update on the impact of the ongoing cost inflation and supplies on your CapEx plan?
Yeah. Energy, the short-term secure projects are highly protected from current inflationary environment. Energy has also looked to mitigate for any potential increase in equipment cost through balance of plant efficiencies. They have a very detailed program, and this is a process that is controlled internally. With these elements, we think that the Energy is quite protected for that kind of contingency.
Let me just add to that. The energy environment, the inflationary environment, sorry, is unavoidably associated with higher costs of commodities. In fact, the commodity costs is what's driving, in many cases, the inflation rates. Commodities are naturally associated, are a big part of conventional energy prices. Yes, there are inflation tensions, but much more relevant to our business, or of a higher impact to our business, is the higher electricity prices that also derive from this inflationary environment. Yes, some impact, but definitely a very significant impact on the sales side.
Next question from José about energy also. Can you discuss your bargaining power with both off-takers and suppliers? Do you feel comfortable you can pass through eventual price pressure from supplies? Very much related to the previous one.
As I was saying, the pass-through is almost automatic because the environment of the higher alternative energy cost environment sets a different, higher reference in prices. When you're negotiating PPAs, the alternative of your client, despite high competition, the alternative of your client is a less attractive alternative, is a higher price alternative, which of course is an automatic pass-through of the renewable energy sector. You can't forget that at the end of the day still, we only represent less than 20% of the global generation. The renewable generation sector only represents less than 20%. The overwhelming driver of energy prices in the world is conventional energy. Hence, if conventional energy generation is more expensive, there is a mathematical translation communication to our energy prices.
As for the transfer of costs, well, that I guess answers your questions, but there is also a bargaining position in anything that happens around the globe horizontally in all industries. All our competitors are experiencing the same effect. There is a tendency to convey a significant part of that, if not all of that, higher costs. The answer is definitely yes.
Okay. Last question from José about the property business. What sort of EBITDA should we expect once delivery is normalized, and when would that be? You've said something about the timeline previously, but he wants to know what kind of EBITDA could we be achieving?
As I said before, we estimate that we could reach a cruising speed of deliveries of 1,000- 1,200 units by the year 2023, 2024. With regards to margin, you know that the sector average should be around 50%, and we should be at similar levels.
Okay. We have a question from Fernando García from RBC. Can you clarify that the 2.1 TW h of energy forward contracted in Spain at EUR 50 per MW h is for the second half of 2021 and not for the whole 2021?
Yes, this is right. For the second half of the year, we have hedged 2.1 TWh , just north of EUR 50 a MWh .
Perfect. Then we have two last questions from Fernando Lafuente from Alantra. Once the energy division has a life of its own, what are the main strategic guidelines for the rest of the group? Is growing in concessions the focus? Are you planning to speed up the activity of the real estate division?
Okay. As I mentioned, the infrastructure development needs in the world are huge. We are in a privileged position, both by a healthier balance sheet, lower cost of capital. All that added to the previous strengths, global presence, 100-year experience, technological capacities, or ESG credentials. That puts us in a very privileged position in order to develop the remaining infrastructures. Let me remind you, this has always been a company focused on infrastructure. The only change that has taken place recently has been the separation of the energy infrastructures. The infrastructure focus remains unchanged. That will remain to be Acciona parent company strategic focus. As for your question for concessions, well, naturally, concessions, private PPPs, are an essential part of this industry. Despite the fact that we are not long-term holders of concessions, we are more de-riskers, so green to brownfield developers of concessions.
That's definitely a focus, which by the way, is growing in very attractive opportunities in our pipeline in a very significant way. The real estate activity, housing, all these are infrastructures that need to be adapted and that we are in a position to continue developing. As José Ángel has mentioned, that will enhance and will grow in the coming years to a cruising speed of about 1,000- 1,200 units a year. Increase in all our infrastructure activities with a stronger balance sheet and the independent listing of Acciona Energía.
Thank you. The last question. In this context, looking to your asset portfolio ex energy, what is core and what is not core? Could you consider additional asset sales?
I think I've answered that one in my former answer. Asset sales is not of any immediate likelihood. However, M&A transactions may occur with the objective of enhancing and improving our capacities in some of our areas of activity. Yes, everything at this stage is core. I guess we don't have any more questions. Thank you very much, everyone. Thank you for attending this call. We will be talking to you soon with the objective of maintaining a very close relationship with the market and our investors. Both from Acciona Energía and from Acciona parent, maintaining a full communication line that will contribute to highlighting the quality and the knowledge of the investor community of our business. Thank you very much. Speak to you soon. Thank you, Pepa.