ES


Ready to continue growing

Dear Shareholders,

I would like to thank all of you for your presence here and, on behalf of the Board of Directors and on my own behalf, welcome you to this meeting, especially those of you who with us for the first time. My name is Mario Abajo and I am the Chairman of the company’s Board of Directors. This year, before we begin, I would like to mention certain changes in the composition of the Board and to welcome Ms García Jáuregui, the new Board secretary. Lorea García Jáuregui has replaced Mr Alberto Fernández Ibarburu, who was our Board Secretary for almost 40 years and combined this task with the position of Chief Financial Officer for Spain and South Europe, which he held for the same period. I would like to thank him personally, on my own behalf, on behalf of the Board and the company in general, and also on behalf of all of you, for the all the wonderful work he has carried out for the company and shareholders throughout his career and his complete dedication to the company over all these years.

As I mentioned last year, we are continuing with our Digital Application Development and Investment Plan. In 2017, we began a strategic investment in new technologies (digitalization), providing our technical and sales personnel with state-of-the-art mobile devices and technologies, which allowed us to enhance our processes and improve the quality of our customer service.

We continue to bet on new markets and are reinforcing our position in the accessibility area. The successes achieved in the division of elevators and escalators for ships has enabled Zardoya Otis to be present in the most important shipyards in Germany, Finland and, of course, Spain. We are also investing to expand our product range for the residential sector and are able to install elevators in very small spaces where there is only room for an one-person elevator.

In addition, we continue to innovate in order to have a wide range of products that eliminate both architectural and sensorial barriers. An example of this is the inclusion of a system of communication from the car with the outside for people with hearing difficulties, all of which is integrated into our Multi-Purpose Display.



1. Key Data at November 30, 2017

• PROFIT AND LOSS

Consolidated profit attributable to shareholders (after taxes and non-controlling interests) was 152.7 million euros, 0.1%  up on 2016.

• SALES

Total consolidated sales for 2017 were 778.3 million euros, in comparison with the 746.0 million euros of 2016, representing an increase of 4.3%.

New Installation Sales

• Work completed. The amount was 48.8 million euros, 16.8% higher than the figure obtained in 2016, for new buildings alone.

• Orders received. These totalled 197.2 million euros, 17.3% up on the 2016 figure, including elevators in existing buildings.

• Backlog of unfilled orders. In the second half of 2017, the backlog of unfilled orders rose by 26.7% in comparison with the same period of 2016.

Service

• Sales. Total service billing was 545.4 million euros in the period, 2% higher than the 2016 figure.

• Units under maintenance. In 2017, the maintenance portfolio surpassed 285,000 units, 0.1% up on 2016. Our Service Excellence allowed us to retain our customers’ trust and improve the loyalty rate.

Exports

Net consolidated export sales were 184.2 million of euros, 8.4% higher than in 2016.

In 2017, exports represented 23.7% of the Group’s consolidated sales (22.8% in 2016).




2. Stock market data at November 30, 2017

PROFIT PER SHARE

The profit per share in 2017 was 0.325 euros.

DIVIDEND AND PARTIAL DISTRIBUTION OF THE SHARE PREMIUM

In line with our profits, we paid three quarterly dividends, which we supplemented with the partial distribution of the share premium. This meant the payment of €0.319 to each one of the 470,464,311 shares that form the share capital, making a total amount of 150.1 million euros, 1.6% higher than the sum paid in 2016 and representing a pay-out of 98.25%, the highest of recent years.

STOCK MARKET PRICE

At December 31, 2017, the ZARDOYA OTIS share was quoted at 9.12 euros, a rise of 13.6% on the preceding year’s price. In the same period, the IBEX rose by 7.4%.

TRADING FIGURES

The effective value traded on the stock exchange was 939 million euros, an increase of 14.7% on the 818 million euros of 2016.

STOCK MARKET RATIOS

PER
28.1
Pay-out
98.25%


 

3. Business evolution in the first quarter of 2018

• Sales

Total consolidated sales for the first quarter of 2018 were 188.0 million euros, showing a 0.4% decrease on those obtained in the first quarter of 2017.

Consolidated Service sales totalled 136.5 million euros in the first quarter, representing an increase of 0.8% on those obtained in the first quarter of 2017.

Net consolidated Export sales were 38.1 million euros, 10.6% lower than the figure for the first quarter of 2017.

• Profit and loss

EBITDA (operating profit plus depreciation plus amortization) in the first quarter of 2018 was 50.0 million euros, 5.9% down on the 2017 figure.

Profit after tax was 33.7 million euros, 4.7% lower than the 35.3 million euros obtained in the same period of 2017.

The comparison with the first quarter of 2017 is unfavourable due to a drop in the export activity and the expense incurred and investment made in the digitalization process.

In the second half of 2017, the Group began a digitalization plan. The figures for the first quarter of 2018 include expenses related to this process, which the CEO will explain subsequently.

• Orders received and backlog of unfilled orders

Orders received for Installations in the first quarter, including both new and existing buildings, were 42.1 million euros, representing an increase on 20.9% on the same period of 2017, thus consolidating the upward trend noted in 2017.

The backlog of unfilled orders in the first quarter of 2018 was 126.7 million euros, showing an increase of 13.3% on the same period of 2017.

• Units under maintenance

We ended the first quarter of 2018 with 285,981 units under maintenance, which represents growth of 0.6% in comparison with the units under maintenance at the end of the first quarter of 2017. In the second half of 2018, we hope that the growth in New Installations activity, which commenced in earlier years, will be reflected in the maintenance portfolio.                   

• DIVIDENDS

On March 20, 2018, Zardoya Otis, S.A. declared the first interim dividend charged to the profit for 2018, which was paid on April 10, 2018 for a gross amount of 0.080 euros per share. The resulting total amount was 37.6 million euros.

At this meeting, we will approve a payment of 0.080 euros per share to be paid on June 10, 2018.

 

4. Corporate Governance

Lastly, as you know, Zardoya Otis has made significant efforts over recent years to adapt its internal regulations to the best corporate governance practices.

Although there have been no significant changes in relation to corporate governance since the last General Shareholders’ Meeting and the National Securities Market Commission (CNMV) has not approved any new recommendations or amendments to those issued previously, Zardoya Otis will closely monitor any future changes there may be in this field.

And, on behalf of the Board of Directors and on my own behalf, I conclude by expressing our deepest gratitude to:

  • Our customers, without whom we would not exist.
  • All those who work for or with our Group, without whose effort and dedication we would not be what we are.
  • Our shareholders, assuring you that we will do everything possible to retain the trust you have placed in us


Kind regards

Mario Abajo García



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