Table of Contents
Table of Contents Chairman s Report 5 Abengoa Water s Profile 9 Mission, vision, and values Organizational structure International presence Financial Data 15 Activities 19 Activities carried out by Abengoa Water's business unit I. AW Concessions II. AW Services III. AW Processes & Systems IV. AW Technologies Important milestones by lines of business activity Corporate Social Responsability 33 Directory 37
Chairman s Report
Chairman s Report Abengoa Water is an international company dedicated to the promotion and development of water treatment plants for their future operation and maintenance. Abengoa Water develops technological solutions contributing to our growth strategy, ensuring consolidation in mid to long term frames within the water sector. In our quest to be the leader in the global water sector, we focus our activity in strategic business development in drinking water and wastewater reuse, industrial water, creating synergies, and providing services to other Abengoa companies with a strong commitment to innovation and technological development. With this aim, the overall assessment of our economic results in 2012 is positive, in large part due to our investment in R&D+i, which emphasizes sustainability, as well as the launch of the Honaine plant (Algeria). We achieved a growth in sales of 21.7 M, representing an increase of 46 % over the previous year and consolidated turnover of 69.1 M. Similarly, our consolidated EBITDA for last year was 27.6 M, an increase of 184 % from 2011. Thus, the profitability defined as the ratio of EBITDA over sales is 40 %, which, compared to the year 2011, is a spread of 20 points. These increases accurately reflect the robustness and stability of Abengoa Water s business model. The total production of desalinated water in 2012 was 70.23 Mm 3 /year, compared to 59.22 Mm 3 /year in 2011. Meanwhile, our maximum total desalination capacity reached during 2012 was 615,000 m 3 /day. The investment in R&D+i technologies in water treatment is an essential pillar in our growth strategy, as we invested a total of 4.9 M in 2012 (representing a 44 % increase from 2011). Today in Abengoa Water we have a strong portfolio of projects and initiatives for R&D+i. The Abengoa Water team brings an international perspective and is expanding rapidly. By the end of 2012, the team comprised of 369 people, a significant increase from the 335 employees at the conclusion of 2011. Chairman s Report 6
Among Abengoa Water s key accomplishments in 2012 is the desalination plant in Skikda (Algeria) remaining in full operation since 2009, and reaching a total accumulated production of 100 Mm 3 of desalinated water. The beginning of the operation period of the Honaine desalination plant in July 2012 is also of note. It has a capacity of 200,000 m 3 /day, making it Abengoa s largest desalination plant in operation. We also revived the construction of the desalination plant in Ténès, Algeria, which will enter into operation and maintenance during the summer of 2014. Additional notable accomplishments include the commissioning of the desalination plant in Qingdao (China), which boasts a capacity of 100,000 m 3 /day, and the start of the construction of the desalination plant in Nungua (Ghana), which will have a desalination capacity of 60,000 m 3 /day. The Ghana project will create about 400 jobs directly and indirectly throughout the 24 months of construction. Looking forward, Abengoa Water has established strategic objectives for 2013 that include new projects in Morocco, the United States, and Ghana. At an internal level, we aim to establish our AW Processes & Systems division into an independent and profitable business unit. In summation, 2012 has been a year of growth and success for Abengoa Water that will continue into 2013. This year we look forward to investing in new human and technological resources in order to continue to develop solutions and create value in the water sector. Carlos Cosín Fernández Chairman & CEO of Abengoa Water 7 Chairman s Report
/ Informe Anual 2012
Abengoa Water s Profile
Abengoa Water s Profile Abengoa Water has operated as an independent business group within Abengoa since January of 2012 and centers its activities in the promotion and development of projects and facilities, as well as R&D+i activities in the water sector. Five-year strategic plan: 1. Desalination; growing, consolidating and improving market position in desalination and in the geographical areas where we already operate. 2. Development in new markets, strengthening our position in new markets such as wastewater treatment and purification, reuse, as well as the outsourcing of industrial water. 3. Geographic diversification 4. Expansion of activity typology 5. Development of in-house technologies Mission, vision, and values Abengoa Water s mission is to promote, develop, and operate water treatment plants. Innovation and technology development are major vectors for growth. The vision of the company is based on achieving international leadership in the water market, managing property assets, and expanding current main activity of desalination to other segments such as wastewater reuse and water treatment in the industrial sector. Abengoa Water considers its commitment to honesty and respect, for all parties involved, to be of the utmost importance. Furthermore, protection and defense of the environment as well as participation in activities that mitigate climate change are at the core of its values. We conduct an inventory of emissions of greenhouse gases that allows us to measure the precise carbon footprint of our business and properly quantify the associated costs. The emissions inventory is a system that ensures that the company meets the requirements set by ISO 14064 and is audited systematically ensuring the reliability of the reported data. Abengoa Water s Profile 10
Abengoa Water has received numerous international awards for its rigor and quality within the industry, including recognition at the Global Water Awards, organized by Global Water Intelligence (GWI.) International Developer of Hydraulic Infrastructures; Desalination Deal of the Year 2006, Beni Saf (Algeria) Desalination Plant of the Year 2007, Cartagena phase I & II (Spain) Desalination Company of the Year 2009 Desalination Deal of the Year 2010, Qingdao (China) Honorable Mention, Water Company of the Year 2011 Desalination Company of the Year 2012 According to a report done by the International Desalination Association (IDA), Abengoa Water is among the top specialists in reverse osmosis technology in terms of total capacity for desalination. Organizational structure ABENGOA WATER Corporate services AW Concessions (AWC) AW Services (AWS) AW Processes and Systems (AWP&S) AW Technologies (AWT) Desalination Treatment & Reuse Municipal Industrial (Outsourcing) EPC Supervision Processes AW Systems / Products Desalination Membranes Water Treatment Sustainability Business Development EEUU China Rest of the World 11 Abengoa Water s Profile
International presence 13% 44% 26% Office Projects % Employee distribution Abengoa Water s Profile 12
11% 1% 5% 13 Abengoa Water s Profile
Financial Data
Desalination plant in Honaine, Algeria (200,000 m 3 /d) Planta desaladora de Honaine, Argelia (200.000 m 3 /d)
Financial Data Economic data (M ) 2012 2011 % variation Revenue EBITDA (*) Net profit after taxes Net cash flow Total assets Own resources Net financial debt Operative margin (% EBITDA / sales) Return on Equity (ROE) Return on Assets (ROA) EBITDA / employees (k ) Revenue / employees (k ) 69.1 27.6 7.9 42.1 643.3 53.5-455.0 39.90% 14.77% 1.23% 76 191 (*) EBITDA: earnings before interest, tax, depreciation and amortization. 47.4 9.7-3.3 29.5 568.9 50.3-410.0 20.50% -6.51% -0.58% 29 142 46 % 184 % 341 % 43 % 13 % 6 % 11 % 95 % 327 % 312 % 162 % 35 % Revenue by activity (M ) 2012 2011 Promotions of water treatment plants (AW Concessions) Operation and maintenance (AW Services) Development of new technologies R&D+ i (AW Technologies) Total 45.1 15.5 8.5 69.1 23.3 16.6 7.5 47.4 Revenue by geographical area (M ) 2012 2011 Spain EMEA (*) Rest of countries Total (*) Europe, Middle East and Africa, excluding Spain. 19.3 42.0 7.8 69.1 14.4 23.3 9.7 47.4 Human capital per professional category 2012 2011 Executives Managers Engineers and graduates Assistants and professionals Workers Intern workers Total 25 72 86 47 126 13 369 26 71 74 45 112 7 335 17 Financial Data
Activities
Activities Activities carried out by Abengoa Water s business unit The areas of activity of the company are: I. Concessions for water treatment plants (AW Concessions) II. Operation and maintenance of plants (AW Services) III. Water treatment solutions (AW Processes & Systems) IV. Development of new technologies through R&D+i (AW Technologies) I. Concessions of water treatment plants (AW Concessions) Our vision in this area is to be a global leader in desalination concession asset management, extending activity into concessions in the integrated water cycle using differentiating and sustainable technologies. Activities 20
Desalination plant in Skikda Client General description Capacity Status Period O & M Total investment Technology Other Algerian Energy Company (AEC) This desalination plant produces drinking water to supply the city of Skikda, a port on the Mediterranean coast, 80 km west of Annaba, Algeria. This is the company s first project developed under concession in Algeria. It serves a population of 500,000 people. 100,000 m 3 /day In operation since May 2009 (Abengoa Water) 25 years 110 M Employs reverse osmosis with coagulation-flocculation and sand filter pretreatment Project company: Aguas de Skikda EPC company: Abeinsa Infraestructuras del Medio Ambiente (Abengoa) - This year the plant produced an accumulated 100 Mm 3 /day of desalinated water. It is the first concession desalination plant built in Algeria. 21 Activities
Desalination plant in Honaine Client General description Capacity Status Period O & M Total investment Technology Other Algerian Energy Company (AEC) This desalination plant produces potable water to supply the city of Tlemcen Honaine, Algeria. It has the capacity to supply nearly one million people with water. 200,000 m 3 /day In operation since July 2012 (Abengoa Water) 25 years 208 M Employs reverse osmosis with coagulation-flocculation and sand filter pretreatment Project company: Miyah Bahr Honaine SPA EPC company: Abeinsa Infraestructuras del Medio Ambiente (Abengoa) - The plant is the largest Abengoa Water Project in operation to date. Activities 22
Desalination plant in Ténès Client General description Capacity Status Period O & M Total investment Technology Other Algerian Energy Company (AEC) This desalination plant produces potable water from sea water in order to meet the water needs in this area at the north-west of Algeria, as well as to ensure an independent supply free of potential climate risks. The plant will have a desalination capacity of 200,000 m³/day of water to supply one million inhabitants. 200,000 m 3 /day In construction (Abengoa) 25 years 198 M Employs reverse osmosis with coagulation-flocculation and Open Filters Cartridge pretreatment Project company: Ténès Lilmyah SPA EPC company: Abeinsa Infraestructuras del Medio Ambiente (Abengoa) - This plant is the first desalination plant to be 100 % constructed by Abengoa in Algeria. 23 Activities
Desalination plant in Chennai Client General description Capacity Status Period O & M Total investment Technology Chennai Metropolitan Water Supply and Sewerage Board (CMWSSB) A desalination plant that produces drinking water to supply the city of Chennai, located in the province of Tamil Nadul in India 100,000 m 3 /day In operation since July 2010 (Abengoa Water) 25 years 100 M Employs reverse osmosis through membranes with flocculation pretreatment lamellar decanters, filtration and chemical treatment. The post treatment process includes remineralization and an energy recovery system. The plant includes variable frequency devices installed in high pressure pumps in order to optimize the production and consumption of energy. This is the first plant in India developed through project finance. Other Project company: Chennai Water Desalination Ltd. EPC company: Abeinsa Infraestructuras del Medio Ambiente (Abengoa) Activities 24
Desalination plant in Qingdao Client General description Capacity Status Period O & M Total investment Technology Other Qingdao Municipal Engineering and Public Utily Bureau - Produced water is served to Qingdao Highren Water Supply Group, public company directly dependant to the Qingdao municipal government. A desalination plant that produces water from sea water for industrial use and human consumption in the city of Qingdao 100,000 m 3 /day In operation since January 2013 (Abengoa Water) 25 years 135 M Employs reverse osmosis technology with pretreatment consisting of ultrafiltration and DAF. The pretreated water passes through 12 reverse osmosis racks, each of which produces 7,295 m 3 /day. Project company: Qingdao BCTA Desalination Co., Ltd. EPC company: Abeinsa Infraestructuras del Medio Ambiente (Abengoa) - The project is the first desalination plant in China 100 % financed by Chinese banks. It is also the first plant in Asia to employ ultrafiltration with membranes in the pretreatment phase. 25 Activities
Desalination plant in Nungua Client General description Capacity Status Period O & M Total investment Technology Other Ghana Water Company Ltd. The purpose of the desalination plant is to produce drinking water to supply various locations around the metropolitan area of Accra, such as Teshie, Nungua and Tema. 60,000 m 3 /day In construction (Abengoa) 20 years 96 M - We expect that the construction will last about 24 months and will create approximately 400 jobs directly and indirectly. Employs four reverse osmosis racks with pretreatment consisting of hypochlorite disinfection, coagulation with CI3Fe, filters in the self-cleaning system, and UF I MF. The post treatment consists of calcite and SO4H2 with subsequent hypochlorite testing and brine output. Project company: Befesa Desalination Development Ghana Ltd. EPC company: Abeinsa Infraestructuras del Medio Ambiente (Abengoa) - It is the first desalination plant in Ghana and the project finance partner is Japanese company, Sojitz. Activities 26
II. Operation and maintenance (AW Services) Our vision is to be a business unit of water treatment services, capable of covering multiple market segments within the water market through new technologies and with a customer service focused on municipal and industrial ambits. Waste Water Treatment Plants (WWTP) Meco WWTP, Madrid (Spain) Client General description Capacity Status Canal de Isabel II WWTP operation and maintenance services 13,640 m 3 /day In operation since 2010 (Abengoa Water) Tablada WWTP, Seville (Spain) Client General description Capacity Status Emasesa WWTP operation and maintenance services 50,000 m 3 /day In operation since 2008 (Abengoa Water) 27 Activities
Desalination plants Desalination plant in Almería Client General description Capacity Status Period O & M Total investment Technology Almeria City Council Production of drinking water from seawater for Almería, Spain 50,000 m 3 /day In operation since January 2005 (Abengoa Water) 15 years Total budget of the EPC: 44 M Annual operating budget: 3 M The pump for this desalination plant is comprised of coagulation by ferric chloride technology, sand filters, and sulfuric acid supplements. In order to adjust the ph level, dispersion agents are added and prevent clogging. Microfiltration cartridges and sodium bisulfite supplements are also employed. Once the water has been pretreated it passes through seven reverse osmosis racks that have an output of 7,056 m 3 /day/rack of desalinated water. They produce water with a salinity of less than 500 mg/i. Other The plant only operates at night in order to take advantage of lower electricity prices. Activities 28
Desalination plant in Cartagena (Murcia) Client General description Capacity Status Period O & M Total investment Technology Environmental Ministry Production of drinking water from seawater for human consumption 65,000 m 3 /day In operation since January 2005 (Abengoa Water) 15 years Total budget of the EPC: 55.4 M Annual operating budget: 10.5 M The pump for this desalination plant is comprised of coagulation by ferric chloride technology, sand filters, and sulfuric acid supplements. In order to adjust the ph level, dispersion agents are added and prevent clogging. Microfiltration cartridges and sodium bisulfite supplements are also employed. Once the water has been pretreated it passes through nine reverse osmosis racks that have an output of 7,295 m 3 /day/rack of desalinated water. They produce water with a salinity of less than 500 mg/i. Other After changing out the membranes this plant is now operating at 110 % of its original capacity. 29 Activities
III. Water treatment solutions (AW Processes & Systems) Our vision is to be a global leader in desalination by maintaining current projects and amplifying activity in water and wastewater treatment, reuse and water for the industrial sector. We emphasize development of in-house, differentiating technologies to create a competitive advantage. IV. Development of new R&D+i technologies (AW Technologies) The R&D+i plays a key role in the water sector, from improving the efficiency of current production processes to the development of new technologies for treatment. The vision in this area is to maintain global leadership in reverse osmosis technology, pioneering the implementation of new technologies to ensure alternative sources of water quality in an efficient and sustainable way. Important milestones by lines of business activity Concessional water treatment plants (AW Concessions) The Skikda plant reached an accumulated 100 Mm 3 of desalinated water since opening in 2009. The Honaine desalination plant, which began commercial operations in 2011, completed its process of provisional acceptance by the builder in July 2012. This plant is the largest Abengoa Water currently operates. The construction of the Ténès desalination plant has been reactivated. The plant is the first plant that Abengoa built 100 % in Algeria. Desalination plant in Qingdao (China) completed construction at the end of 2012. Of particular interest is Abengoa Water s expansion into the West African market, building the first desalination plant that is located in Nungua, Ghana. The contract was signed with the public company Ghana Water Company Limited (GWCL) in 2011, and the financial contract closed in October 2012. Abengoa Water was the only company bidding for the design, construction, and operation and maintenance for 20 years for a desalination plant in Agadir (Morocco.) Activities 30
Operation and maintenance of plants (AW Services) Upon provisional acceptance of the Honaine plant, on July 12, 2012 the operating period began, and has remained in production ever since. This plant is the largest desalination plant under Abengoa s operation to date. Water treatment solutions (AW Processes & Systems) The commitment to diversification of activities of Abengoa Water has made the hiring of a Reuse Market Manager possible as well as the signing of the MoU in Qingdao (China.) Development of new technologies through its R&D+i department (AW Technologies) In 2012 the investment in R&D+i of the company stood at 4.9 M with a total of 25 projects in development, a significant increase from 2011. Abengoa Water owns rights to various relevant developments in the field, accumulating a total of four patents in 2012. The TEcoAgua project, which was co-financed by CDTI and had a budget of 18 M was successfully completed in 2012. Other relevant events in 2012 Completion of our new website (www.abengoawater.com) Participation in the groundbreaking ceremony of one of the largest industrial centers in the world, located in Xizhong, China Signed a Memorandum of Understanding with the government of Qingdao to develop a bilateral collaboration in projects of regeneration and reuse of wastewater Became members of the European Innovation Partnership, a project of the European Commission Awarded a feasibility study and pre-engineering nanofiltration plant for drinking water MUDs (USA) Signed an agreement to develop solutions to the treatment and reuse of water from the extraction process of shale gas (USA) Testimony before the Committee on Natural Resources Texas Congress (USA) Became the only multinational presence in desalination WaterReuse Association (USA) 31 Activities
Corporate Social Responsibility
/ Informe Anual 2012 Reverse President s osmosis report membranes racks in the desalination 34 plant in Almería, Spain. Bastidores de membranas de ósmosis inversa de la planta desaladora de Almería, España.
Corporate Social Responsibility Abengoa Water considers Corporate Social Responsibility (CSR) a strategic factor in the development of their business at all levels and stages. It is one of the pillars of its present and future strategy. CSR is in the process of full integration into the business strategy of Abengoa Water from the approach of policy, management model, behavior and management system of the company, considering each and every one of the dimensions and vectors of CSR: Legal dimension, fully respecting current legislation (in the country of corresponding actitivity) in each and every one of the actions of the company. Economic dimension, creating value and sustained growth. Human Dimension, protecting human rights. Social dimension, supporting the development of the communities where Abengoa Water is present. Environmental dimension, respecting and ensuring environmental protection. This year, Abengoa Water began developing its CSR action plan, using the CSR Master Plan of Abengoa as a model. The plan defines thematic areas of work and lines of work, objectives and expected results. It is one of the most important tools the company has, as it not only allows us to align the activities of the entire company with the strategy defined, but monitors progress of actions and objectives established in each of areas. 35 Corporate Social Responsibility
Directory
/ Informe Anual 2012 President s report Desalination plant in Qingdao, China (100,000 m 3 /d) Planta desaladora 38 de Qingdao, China (100.000 m 3 /d)
Directory ABENGOA WATER Division Chairman & CEO AW Concessions AW Processes & Systems AW Services AW Technologies Business Development, Rest of World AW China AW USA Strategy and Corporate Development Structured Finance Organization and Systems Legal Human Resources Administration Name and Surnames Carlos Cosín Fernández Santiago Martínez Mansilla Rodrigo Segovia Yuste Gonzalo Gómez-Rodulfo Francisco Javier Bernaola Echevarría Aránzazu Mencía Saeta Pedro Almagro Gavilán Francesca McCann Arturo Buenaventura Pouyfaucon Felipe Guinea Benjumea Fernando Fernández Iglesias Aída Pérez Alonso Maria Luz Hurtado González Julen del Corral Beraza Address: Campus Palmas Altas. C/ Energía Solar nº 1, Palmas Altas. 41014 Sevilla (España). Telephone: +34 95 493 71 11 Email: abengoawater@abengoa.com Website: www.abengoawater.com 39 Directory