Ladies and gentlemen, thank you for standing by. Welcome and thank you for joining the HOCHTIEF full year 2021 results conference call. Throughout today's recorded presentation, all participants will be in listen-only mode. The presentation will be followed by a Q&A session. If you'd like to ask a question, you may press star followed by one on your touch-tone telephone. Please press the star key followed by zero for operator assistance. I would now like to turn the conference over to Mike Pinkney. Please go ahead.
Thanks very much, operator. Good afternoon to everyone, and thank you for joining the HOCHTIEF 2021 results call. I'm Mike Pinkney, the Head of Corporate Strategy, and I'm here with our Chief Executive, Marcelino Fernández, our CFO, Peter Sassenfeld, and our Head of Capital Markets, Tobias Loskamp, along with other colleagues from the senior management team of HOCHTIEF. We're looking forward to taking your questions, but to kick off, our CEO is gonna run us through the key aspects of the 2021 performance as well, of course, as the proposed offer for CIMIC minorities that we announced earlier today. Marcelino, all yours.
Thank you, Mike and the team. Good afternoon to everyone, and thanks for joining us. As you are aware, in the last few hours, we have presented an unconditional offer worth up to EUR 940 million to the minority shareholders of CIMIC. We'll go through the key aspects of this offer in due course, but let me first, of all start by describing the main features of our 2021 results. Let's begin with the key highlights. HOCHTIEF nominal net profit of EUR 208 million reflects the EUR 195 million extraordinary one-off charge due to the outcome of a Chilean project arbitration and compared with EUR 312 million for 2020. Operational net profit of EUR 454 million rose year-on-year by 26% like for like.
This substantial underlying level of profit growth was driven by a significant increase in earnings at our Asia Pacific division and a strong rebound in the contribution from Abertis, as well as solid performances by Americas and Europe. Margins remained firm across our operating divisions with a group operational PBT margin of 3.3%, an increase of 40 basis points pre-Abertis. HOCHTIEF's cash generation improved with free cash flow from operations pre-factoring, increasing by 10% year-on-year to over EUR 700 million. The group ended the year with a net cash position of EUR 556 million, up EUR 92 million year-on-year pre-factoring. New orders were very strong, exceeding the EUR 30 billion level and showing a 36% year-on-year increase, reflecting our strong market position as well as the recovery from the impact related to COVID, particularly in Australia.
As a consequence, the group's order book of EUR 52 billion is up by 12% in the last 12 months. Moving on to slide five, we can evaluate the positive momentum in terms of cash flow. Net cash from operating activities of EUR 760 million was stable year-on-year pre-factoring, helped by a solid working capital performance. The seasonally strong Q4 inflow of EUR 680 million represents around 90% of the full-year 2021 figure. After accounting for net CapEx of EUR 56 million, free cash flow from operations pre-factoring of EUR 704 million is up by 10% year-on-year. The full-year figure includes a cash dividend received from Abertis in 2021 of EUR 119 million and compares with EUR 173 million in 2020.
If we adjust for the lower Abertis dividend, free cash flow from the group pre-Abertis would be 25% higher year-on-year. In terms of factoring, this was reduced by EUR 354 million during the year to EUR 758 million, and the strategic unwind at CIMIC is now complete. Let's take a look at the cash development on the balance sheet. HOCHTIEF ended 2021 with a solid net cash position of over EUR 150 million. Looking at the year-on-year variation, I would highlight that if we adjust for the change in factoring, the net cash position would be EUR 292 million higher than December 2020. The underlying increase in the group's net cash position is after EUR 311 million in total dividend payments by the group. On slide seven, you can see how the group's orders have developed very positively.
New orders have increased year-on-year by EUR 8 billion to over EUR 30 billion, an increase of 36% compared with last year, led by a strong growth in the Asia Pacific division and a solid level of project wins in Americas and Europe. As a result, our backlog now stands at EUR 52 billion, up by EUR 6 billion or 12% year-on-year. All our divisions show substantial increases compared with a year ago. Half of our order book has been generated in North America with a further 41% in the Asia-Pacific region and 8% in Europe. I would like to highlight that our order backlog has more than recovered from the impact of COVID, and now it stands 8% above the pre-pandemic December 2019 level. On slide eight, we show some of our major recent project wins, such as in our Americas division.
Turner sustained its strong position within the education sector and was awarded, amongst others, a contract to deliver the gateway project at the University of Langley. In addition, we completed the science and engineering complex at Harvard University. The building is shown on the cover of this year's annual report. Turner was recognized in 2021 as the top construction management company for healthcare projects in the U.S. for its delivery of well over $3 billion of work in the healthcare sector. This year's order intake includes a contract for the new Veteran Medical Center in Kentucky for $840 million as part of the joint venture. In transportation infrastructure, Flatiron was awarded a contract for the widening and rehabilitation of the I-95 highway in North Carolina, worth $430 million as part of a joint venture.
In Europe, we were recently awarded a power tunnel project in Wales. The contract is worth EUR 240 million and will reduce the visual impact of the existing overhead lines upon completion. The project is for a repeat client and builds upon work currently underway in London. CIMIC has seen very strong new orders in 2021, reflecting a strong multi-year fundamental demand environment, as well as a recovery from COVID delayed project awards, including several CIMIC group companies are involved in the North East Link Primary Package, PPP, where the freeway network around Melbourne will see its missing link closed with a three-lane twin tunnel. CIMIC's share of work is valued at AUD 3.8 billion.
In December, CPB Contractors was selected to deliver work worth AUD 1.35 billion for the expansion of the Sydney Metro at the new Western Sydney Airport. Likewise, in Sydney, CPB was awarded the southern tunneling works for the Western Harbour Tunnel in a joint venture. That is, the company UGL was awarded several multi-year operations and maintenance contracts for regional rail infrastructure, utility, and renewable energy clients, as well as the oil and gas industry. Now let's look in more detail at the Americas. HOCHTIEF Americas delivered a robust performance in 2021, notwithstanding COVID impact, with stable profits in local currency terms, accompanied by substantial order book growth. Sales of EUR 13.8 billion were 3% lower than the corresponding period of 2020 on an FX adjusted basis with work done stable.
Operational PBT of EUR 351 million was up slightly compared with 2020 and at the top end of our 2021 guidance range of EUR 320 million-EUR 350 million with a solid margin of 2.5% versus 2.3% the previous year. The cost-plus business model of the division's construction management activities, which account for the majority of the revenues at HOCHTIEF Americas, continues to deliver excellent results. The division generated net cash from operating activities pre-factoring of EUR 343 million in 2021. The year-on-year variation is a consequence of project timing effects and normalization of the strong cash inflows from working capital in previous years. The strong balance sheet at Americas showed a net cash position of over EUR 1.5 billion at the end of December, up by EUR 131 million year-on-year.
At the end of the period, the order backlog stood at EUR 26.1 billion, up 15% year-on-year or 6% FX adjusted with an absolute increase of EUR 3.1 billion since December 2020 to a record level. New orders secured during 2021 of EUR 15.3 billion were up 2% year-on-year in U.S. dollar terms, with work secured in the last twelve months representing 1.1 x work done. Looking forward, the market fundamentals for our key segments are moving in the right direction. The U.S. non-residential market is expected to grow in 2022, notwithstanding supply chain constraints and the labor shortages, with underlying economic growth expanding as COVID restrictions are lifted and more people return to the workplace. Demand will provide opportunities as corporate relocations are expected to continue.
Even as hybrid work models and remote work become common, commercial clients are remodeling and/or building new office space to include design elements, maximizing flexibility, safety, and comfort for tenants. These changes will require construction or modernization activity. Growth continues in the healthcare sector as the pandemic has highlighted hospital capacity limitations, accelerating investment to address emergency scenarios. The aging U.S. population will drive longer-term increases in healthcare construction. The data center market continues to thrive, with Turner well-positioned to benefit from its strong technology client base. The construction of data centers continues to grow at a substantial pace as leading data center services providers invest in new developments and expansions. Key drivers of this growth include 5G adoption, growing cloud computing, and big data, among others.
Elsewhere, significant investment is expected as companies move to ensure manufacturing capacity to address supply chain disruptions and the increased demand for clean energy solutions in areas such as renewable generation components, electric vehicles, battery production, and semiconductors. In November 2021, the U.S. administration signed the Infrastructure Investment and Jobs Act that provides nearly $1 trillion in manufacturing funding over five years, from 2022 through 2026, with over $450 billion in new funding. The bill includes funding in roads, bridges, broadband infrastructure, water treatment, renewable energy, and climate resiliency, presenting significant opportunities for both Flatiron and Turner. The North American infrastructure construction market is rapidly evolving in project delivery methods. Collaborative delivery models, where the contractor is hired based on qualifications at an early stage and construction costs are subsequently negotiated, are becoming more prominent.
This provides stable, low-risk project opportunities with a strong cash flow profile, such as the revitalization of the Los Angeles Union Station and the reconstruction of the Burnside Bridge in Portland. The water and wastewater treatment markets continue to be robust. Flatiron is well-positioned to take advantage of these opportunities, which additionally attract fewer specialized competitors. Climate change resiliency and sea level rise are also a major priority, with numerous seawall, levee, and flood protection projects planned across both coasts of the United States. The current administration has made mass transit links a priority, with significant local and federal funds flowing to reduce dependence on cars and reducing carbon emissions. These projects are largely located in markets where Flatiron has significant presence, such as California, Texas, and Washington. The outlook for our well-positioned Americas business is very positive.
Operational guidance for 2022 is a pre-tax profit of EUR 350 million -370 million, versus EUR 351 million in 2021. Moving to slide 10, we have the Asia-Pacific division with the CIMIC result published two weeks ago. 2021 saw revenues increased by 7.6% to AUD 9.7 billion, driven by growth in Australian construction and services. Underlying net profit after tax, NPAT, of AUD 405 million, compared with AUD 352 million in 2020. EBITDA, PBT, and NPAT margins were firm at 9.4%, 5.2%, and 4.2%, respectively. Operating cash flow pre-factoring for the twelve-month period improved by AUD 603 million year-on-year to AUD 560 million, supported by a strong fourth quarter performance.
The underlying cash flow was still impacted by a significant cash outflow at Leighton Asia, which is expected to improve in 2022. The factoring balance was reduced to AUD 432.4 million at the end of 2021, compared with AUD 976 million in December 2020. CIMIC ended the year with a net debt level of AUD 498 million, with the variation during 2021, including the unwinding of AUD 542 million of factoring and AUD 318 million of dividend payments. CIMIC continues to have solid investment-grade ratings from Moody's and S&P. New work of AUD 20.4 billion was secured during 2021 and is already well above pre-COVID-19 levels. The period end order book stands at AUD 33.2 billion, a 10% increase year-on-year.
The pipeline of relevant tenders to be bid and/or awarded for 2022 and beyond is approximately AUD 480 billion, including AUD 150 billion of PPP opportunities. CIMIC has announced NPAT guidance for 2022 of AUD 425 million-AUD 460 million subject to market conditions. A look at Europe. In 2021, sales were 3% higher at EUR 1.3 billion. Operational PBT stood at EUR 60 million. At the nominal level, a loss was recorded of EUR 150 million due to the one-off extraordinary impact of the EUR 195 million Chilean project arbitration decision. Net cash from operating activities of EUR 94 million reflects a strong cash conversion in the core business.
At the end of December 2021, the division's balance sheet maintained a solid net cash position of EUR 799 million. New orders in the period of EUR 1.9 billion were broadly stable year-on-year and equivalent to 1.1 x work done. The divisional order backlog ended December 2021 at EUR 4.6 billion, an increase year-on-year of 6%. For 2022, we expect operational PBT for Europe of EUR 45 million-EUR 65 million. Now let's summarize the performance of Abertis, which shows a strong improvement. Abertis average daily traffic in 2021 was 21% higher year-on-year, reflecting the easing of mobility restrictions introduced last year due to the COVID pandemic and benefiting from the resilience afforded by the group's diversified portfolio of toll roads.
During the second half of the year, traffic levels were consistently above those of 2019. Operating revenues rose 20% to EUR 4.9 billion, with EBITDA 28% higher year on year at EUR 3.35 billion. The 2021 figures include the full consolidation of the RCO concession company in Mexico and the Elizabeth River concession in the U.S. acquired during 2020, as well as the impact of the selling of the Spanish concessions, AP-7 and Invicat. Net profit in 2021 pre-PPA was EUR 691 million and 89% increase year on year. Abertis' profit contribution to HOCHTIEF after PPA amounts to EUR 58 million in 2021, with a continued strong recovery in earnings in Q4.
The toll road company made a dividend payment of EUR 6.01 million in April 2021, of which HOCHTIEF received its share of EUR 1.19 million. The proposed dividend for 2022 is EUR 600 million. Abertis announced in October 2021 that it has signed an agreement with the Chilean Ministry of Public Works for the development of a major CapEx project, more than EUR 300 million. As part of this agreement, the Chilean Autopista Central concession period will be extended. Looking forward, we expect our Abertis investments will continue to make a positive profit contribution to HOCHTIEF in 2022. Turning back to the group overall, I wanted to underline how in 2021, HOCHTIEF accelerated its focus on ESG priorities, environmental, social, and governance priorities.
As I highlighted to you previously, HOCHTIEF fully supports the goals of the Paris Agreement to stop global warming and to achieve climate neutrality by 2050. Our ambition is for the group to reach this objective well ahead of schedule. I am pleased to report that our Sustainability Plan 2025 has recently been launched. The plan contains over 60 E, S, and G commitments, including a target to be climate neutral in 2045. The executive board, which now includes the position of a dedicated Chief Sustainability Officer, is leading our twin transition, green and digital, with the help of our technology and innovation hub, Nexplore. This is a key element of our strategy. MSCI has recently confirmed our strong AA ESG rating and Sustainalytics ranks HOCHTIEF in the top 10% for ESG in our industry. Now, let's consider the group outlook.
HOCHTIEF's business performance and outlook is steadily improving following the varied impacts of the pandemic across our group over the last two years. With solid margins, positive cash flow trends, and an expanding order book driven by the strong increase in new orders during 2021 in our core markets, the group is very well positioned for the future. The risk of our order book is evolving in a positive manner as the nature and the structure of our project contracts steadily move towards more collaborative models. We are seeing a strong new orders growth and have positive long-term prospects based on our significant pipeline of opportunities and the stimulus packages in our core markets. Our guidance for 2022 is for an operational net profit in the range of EUR 475 million-EUR 520 million, an increase of between 5% and 15% year-on-year.
The proposed 2021 dividend of EUR 1.91 per share represents a 65% payout on our nominal net profit figure. Since 2012, HOCHTIEF has distributed EUR 2.1 billion in dividends to its shareholders, equivalent to EUR 29 per share. Looking forward, shareholder remuneration continues to be a management priority. As I have commented on previous occasions, we actively evaluate all our capital allocation opportunities with a view to creating sustainable long-term value for all our stakeholders. With this objective in mind, we have today announced our intention to make an unconditional and final off-market takeover offer to acquire the remaining approx 21% of minorities at HOCHTIEF. Key highlights of the offers.
At AUD 22 per share, the offer, which is made by our wholly owned subsidiary, HOCHTIEF Australia, is worth up to EUR 490 million.
940.
EUR 940 million and is aimed at the approximately 66.7 million shares of CIMIC, which HOCHTIEF does not already own. HOCHTIEF Australia's intention is to have CIMIC delisted. We intend to ensure that CIMIC maintains and strengthens its leading position in the markets in which it operates and can access opportunities both domestically and internationally. We will focus on how best to collaborate with CIMIC so that the skills and expertise of both companies are available for the benefit of both HOCHTIEF and CIMIC. We are committed to expanding the collaboration with HOCHTIEF Group to develop CIMIC's existing strategies in the areas of digitalization, innovation, and ESG. We will keep you informed on the progress of this offer, which, depending on the outcome, would result in a significant simplification for the HOCHTIEF Group structure.
Thank you very much then to everyone for listening. Now I welcome your questions.
We're ready for questions, operator. Thanks.
Ladies and gentlemen, at this time, we'll begin the Q&A session. Anyone who wishes to ask a question may press star followed by one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star followed by two. If you're using speaker equipment today, please lift the handset before making your selections. Anyone who has a question may press star followed by one at this time. One moment for the first question, please. The first question is from the line of Tobias Werner from Stifel. Please go ahead.
Yes, good afternoon, gentlemen. Faster than I would have thought. Just on the dividend, the payout ratio is the same, 65% you say, but it is quite a difference from what was expected. You didn't pay above the payout ratio in this year, i.e., to maintain, you know, the levels closer to the absolute levels last year. Maybe give us some views on that, why you decided to not increase the payout ratio, i.e., considering this as an exceptional year given all the one-offs. Then secondly, with regard to the buyout of the minorities in CIMIC, maybe give us the rationale and also where the historical book value of the existing 78.6% is.
Tobias, hi, it's Mike Pinkney. Thanks for your questions. Let me take that first one in terms of regarding the dividend. You know, as we've said before and as Marcelino commented there, you know, capital allocation is a strategic priority for us. In addition to the dividend proposal that we've announced today, we've also obviously announced our intention to make a significant offer for minorities of CIMIC, to the benefit of all shareholders concerned. You know, we've said that the strategy is always driven by the objective of creating sustainable long-term value for all our shareholders and indeed stakeholders. We have to find an equilibrium.
We have to balance all these things. This is the conclusion that we've arrived at.
Tobias, in regard of the rationale. You know, the Australian market is a really very exciting market, and it's a market that is having a lot of investors coming in the next years, including the next 10 years. For us, being very familiar with the market, we thought that was the moment I said to go to sort of simplification of our structure, which is very good to us. It's streamlining the company and then making it easier, and then obviously taking all the advantages possible from the market, from the relationship between the two companies from, let's say, saving leakages of dividends, et cetera. A lot of things that they are contributing clearly to this transaction. We thought that right now was the right moment to do it.
We are in the process of looking at the future with this future study. This simplification to us was essential, and we thought that, based on all these kind of things that I was telling you, we thought that was the right moment to do it.
Congratulations on this decision. If I may follow up, the book value of the existing holding, where does that sit at this point in time? Also, if I may just ask on the listing costs, how much will that remove for you as a business?
Tobias, yeah, on the book, it's significantly below the offer price that we've announced today. We'll get back to you with the exact figure.
The listing cost, as you know, let's say, well, the first thing that we need is to wait for the result of this. Now, you know, that there are different possibilities. We have announced the offer. The offer will start physically in, I think, around the ninth of March, something like that. When we'll give to the CIMIC shareholders all the documentation, there'll be the statement for them to analyze, and then we will have one month open period for them, let's say, to attend or not to the offer. Then later on, we will know the result. There are different possibilities, as you are aware, if you had chance to read the summary of our announcement and the bidder statement announcement.
Let's wait and then see, and let's evaluate carefully later exactly how the company is benefiting from this kind of simplification.
Thank you very much.
The next question is from the line of Nicolas Mora from Morgan Stanley. Please go ahead.
Hi, can you
Go ahead.
Hello?
Hello, Nicolas, can you hear me? Nicolas?
Yeah. Perfect.
Go ahead, please.
Thanks so much for the talk. I was just wondering if you could give a bit more outlook on the kind of North American construction landscape moving forward, I suppose just high level. Thank you.
Yeah. Nicholas, let me give you a little bit more color, perhaps. I mean, basically, you know, Marcelino was indicating there a few minutes ago that the expectation is for growth in general in the non-residential market. As you know, our company, Turner, which is 100% owned, is a leader in several of these segments, including, for example, healthcare. It's the No. 1 green builder in the U.S. and has held that position now for several years. Education is a key segment. There's also other areas with a lot of growth, such as data centers. Yeah.
Data centers now account for nearly 20% of our America's order book. There's a lot of opportunities there. Turner is very well-positioned because they've got a very strong client base of technology companies. In all those areas, in addition to other opportunities that they have, the outlook seems very positive.
Perfect. Thank you. Thank you very much.
The next question is from the line of Christine Wang from GIC. Please go ahead.
Hello. Hi. Thank you for the presentation. I just wanted to ask about how the transaction will be funded. From your conversation with S&P, is there going to be any impact on your BBB- rating? Thank you.
Okay. Thanks. Thanks for your question, Christine. I mean, obviously, we've got to wait to see what the outcome of the offer that we've presented today actually is in terms of what the final financing requirements are. At this stage, the offer price is fully covered by a transaction facility with a consortium of banks. You know, once we've got the outcome of the offer, we'll look at all the options in relation to the long-term financing. You know, we'll look at all the options, basically. Yeah. Our expectation, we don't expect it to have an impact on our credit rating of BBB-.
We refer to the options that are very well known. For instance, debt, hybrid, as I said, equity, et cetera. All the options that we can manage, and then we will see, depending on the final result, what is the option that is more convenient and efficient to us.
Sure. Thank you. Sorry, just one more. Is there going to be any changes of CIMIC's reporting?
No, I mean, at the moment, there's no changes in
You mean you are just in the D plus one, no? Meaning that let's go step by step. Let's follow the offer. Let's see finally we can delist the company, and obviously, the information will flow in the way that is more convenient for the market.
Okay. Thank you.
As a reminder, if you would like to ask a question, please press star followed by one on your telephone. The next question is from the line of Victor Acitores from Société Générale. Please go ahead.
Hi, Marcelino, and Mike and team. Only two questions on my side, if I may. The first one is to confirm that in the cash flows of this year, you didn't book any cash outflow from the one-off in Chile. This is the first one. The second is that on the guidance that you provide, this guidance is based on the current perimeter, no? This is not taking any assumption on the potential bid. Only to confirm.
Hi, Victor. Hi, it's Mike here again. You're absolutely right. There's no cash outflow in relation to Chile in the 2021 numbers.
Victor, according to your second question in regard to the guidance, of course, we need to wait until we know what is the final outcome. The guidance is not taking into account any outcome coming from this offer.
Okay. Thank you so much, Marcelino and Mike.
Thanks, Victor.
The next question is from the line of Augustin Cendre from Stifel. Please go ahead.
Hello. Thank you for taking my question. Only one question from me. Looking at Europe, it seems like the Europe operational profit before tax guidance is rather on the low side. Looking at the order book, it grew 6% this year, so could you give us some indication as to why the guidance is on that low side? Thank you.
Hi, Augustin . You know, obviously, Europe comprises our construction activities complemented by the PPP businesses, as well as real estate developments that we've largely wound down now over the last few years. The expectation is for a stable operational PBT margin. You know, we're extremely focused on a very disciplined approach to bidding for new projects. You know, the Europe business has been reduced in size to right size it so that it is competitive and profitable. You know, what I would highlight is that as you've seen in the numbers, the 2021 cash flow performance was extremely strong. We're focusing above all on the cash generation.
Okay, perfect. Thank you very much.
If you wish to ask a question, please press star followed by one.
Okay, operator. I think if we've not got any more questions, we can finish the meeting.
Ladies and gentlemen, there are no more questions at this time. I hand back to Mike Pinkney for closing comments.
Okay, thanks, everyone.
Yes, thank you everyone for attending to this conference call. I hope that we can see and continue speaking about these things in the day-to-day with the team and in the next occasion when we present our quarterly report. Okay? Thank you. Thank you very much.
Ladies and gentlemen, the conference is now concluded, and you may disconnect your telephone. Thank you for joining, and have a pleasant day. Goodbye.