Good morning, ladies and gentlemen. Thank you for attending our First Half Results Conference Call.

From an operational perspective, these first six months are consistent with the trends seen in the first quarter. Firstly, very low hydro output in Spain relative to last year, relative to an average year.

Secondly, lower volumes in the large international construction contracts as they mature and the effect of the ramp-up of the new water EPC projects. This is compensated by Sydney global settlement, and will be compensated in coming quarters, thanks to the growth in the backlog.

We would like to highlight that the year so far is very successful in terms of new infrastructure EPC awards with a total EPC backlog including Construction & Industrial and Water projects stands at €8 billion as of June relative to €7.1 billion as of December supporting future profits. The backlog has not been above €eight billion since the end of 2016 and early 2017.

The Energy division also enjoys high visibility in terms of growth. As during 2019, we will be constructing 1 gigawatt worth of new renewable generation projects that will be put into operation mostly in 2019 and 2020.

We continue as always to enhance our 7.5 gigawatt project pipeline to add future value-enhancing and predictable growth to our Energy business. With respect to profitability during the first semester, our underlying net profit, excluding last year's disposals, capital gains, it grows very strongly and net debt stays flat relative to Q1 2019.

When we look at the first six months of 2019, we also have two important developments for the company: firstly, the settlement reached with respect to the Sydney Light Rail project; and secondly, the monetization of the ATLL litigation rights. The Sydney global settlement is a good outcome for both the citizens of New South Wales and ACCIONA and will allow us to recover the incremental costs linked to the enlarged scope of the construction contract.

The recovery is structured via an instrument that entitles ACCIONA to a substantial proportion of the cash flows generated by Sydney Light Rail over the 17-year life of the concession. This concession in turn receives its income via fixed payments from the New South Wales government, which is AAA rated.

As part of this global settlement ACCIONA is completing the project during 2019. And that cost together with incremental costs incurred in early years and not previously recovered is rolled over into this instrument in which we have invested €281 million.

We cannot provide much more detail given the strong commercially confidential nature of the global settlement. With respect to ATLL, we have monetized the legal claim against the regional government for a fixed and unconditional amount of €170 million, plus the right to upside, which is contingent on the final court ruling.

In addition, we've retained the €54 million already awarded by the government and which we expect to cash in by year-end or early 2020. Sydney and ATLL have both been in complex situations.

Contractual disputes are a normal part of the EPC business, and what was unusual in Sydney was the economic size of the dispute with the client. The resolution of both matters eliminates two sources of risk and uncertainty for the company and we believe it demonstrates our ability to manage risk and structure effective and imaginative solutions.

Moving on to slide 4. We highlight the key financials for the period.

The comparability with last year remains affected by changes in the perimeter and the implications of IFRS 16. Revenues are up 1.3%, despite the asset disposals last year and the termination of ATLL and both Energy and Infrastructure are up relative to last year.

Reported EBITDA grows by 6.6% to €659 million and on a like-for-like basis by 16.6%, which is a good result driven by new energy investments and the resolution of Sydney Light Rail. You can find the reconciliation of the like-for-like EBITDA in Slide 16 in the appendix to this presentation.

You will see there that CSP Trasmediterránea the Rodovia and ATLL activities contributed €84 million of EBITDA in H1 2018. And following the disposals as well as the early termination of ATLL during the first half of this year only ATLL contributed for an amount of €10 million.

The implementation of IFRS 16 implies an increase in EBITDA of €25 million in H1 2019, which is also taken into account in our like-for-like calculation. Pre-tax profit and net profit both increased by more than 50% if we exclude the capital gains from last year's corporate transactions.

Moving on to total investment, it amounted to just over €701 million relative to €513 million the year before. Net debt stood at €4.7 billion flat relative to Q1 2019 and approximately €100 million higher than a year before.

Including the IFRS adjustment that we will use for year-end net debt-to-EBITDA ratio calculations, net debt stood at €4,951 million. In slide 5, you can find the breakdown of investment during the first six months of the year.

Investment in new renewable energy assets amounted to €196 million that are mainly related to wind projects in the U.S., Mexico, Chile and Australia as well as solar PV plants in Chile and Mexico. Total infrastructure investment reached €350 million, which includes the Sydney Light Rail instrument for €281 million.

On the net investment in property development inventories, as we mentioned at the Q1 results call, it includes the one-off acquisition of the landmark Mesena project in Madrid, which will be the group's future headquarters. We note that during the first six months of last year, there was significant investment in purchasing our own shares as part of the buyback program we had in place at that time.

Now moving to slide 6, here we explain the drivers behind the change in net debt between December 2018 and June 2019. Net debt increased from €4.3 billion to €4.7 billion, with positive operating cash flow of €359 million, including the monetization of the ATLL receivable for €170 million.

And with a negative sign, we have total investment of €701 million and €63 million for derivatives and ForEx adjustments. Net debt includes almost €600 million of work in progress, which does not generate cash flow yet.

In slide 6, we have the overview of our debt position. Detail of the maturity profile is included in the appendix to the presentation.

In this slide, you will see that the overall picture has not changed significantly since the previous quarter. Almost 80% of the total debt is corporate debt.

We continue to look for opportunities to refinance some of the residual project debt with corporate debt, in order to increase efficiency through the reduction of idle cash and obtaining more attractive terms. But this is increasingly on the margin given that most of the residual project debt in the group is related to less liquid currencies or assets where we have partners or structures that are expensive to buy back as you know well.

Fixed debt represents 64% consistent with the ranges that we target. The cost of debt, on average for the period was 3.41% with the cost of corporate debt at 2.46%, both lower relative to the financial year to December 2018.

Our aim continues to be to extend the average life of debt without increasing our cost. The average maturity increased from 4.65 years to -- 4.65 years -- sorry from 4.25 years as of December.

During the first part of the year, over and above the normal course of business renewal of bilateral credit lines and loans and the ECP program, we have closed €1.1 billion worth of refinancing transactions, including AUD 400 million syndicated facility to repurchase project debt; our €675 million ESG-linked syndicated loan; and €155 million Schuldschein product in the German market. These transactions have an average maturity of five years and an average spread of 1.4%.

We note that we have not drawn down yet €455 million out of the €675 million syndicated loan, which is earmarked towards approximately €520 million of EMTN maturities in the latter part of the year and early 2020. Turning to slide 8 and the review of the business operations, I would like to start with the Energy business.

Energy reported revenues up 1.2% to €1,035 million with higher levels of activity in international and a decline in Spain. In terms of EBITDA, it fell marginally year-on-year by 0.8% to €389 million.

On a like-for-like basis, excluding the contribution from the CSP assets sold last year and the impact of IFRS 16, EBITDA grew by 4.8%. This is good underlying growth, but it should have been better if hydro output in Spain had come at normal levels.

At a high level, the exit of CSP and the weaker result of the Spanish fleet is broadly compensated by the contribution of new assets; better EBITDA in the international fleet mostly due to FX; and better net result in other activities and structure costs. Starting with capacity consolidated capacity increased by 309 megawatts during the last 12 months with wind assets in Spain, USA, Chile as well as PV in Ukraine.

Equity-accounted capacity increased with our new PV asset in Egypt, and they are very large Puerto Libertad PV facility in Mexico in which we own 50%. Output fell by 4.8% year-on-year and is approximately 8.5% lower than we expected.

Output in international fleet is 9.9% higher thanks to higher load factors, but also with new capacity in operation. In Spain, the largest driver explaining the 14.4% decline in output is the very low hydro levels in Spain, which is close to 30% lower than our budget and 45% below last year's exceptionally good levels.

Achieved prices in Spain including regulated and non-regulated generation are up 12%. Wholesale prices in Spain average are at €51.8 per megawatt hour relative to €50.1 per megawatt hour during the first half of last year.

That is 3% higher. The delta in our achieved wholesale prices is higher than that given that our full hedging in 2018 did not allow us to capture the steep increase in power prices halfway through last year, which were driven by commodities and high carbon prices.

This has helped mitigate the impact of the lower generation output in the Spanish business. Expectations for the average pool price for the whole of 2019 have fallen a bit since the previous quarter and now stand at €53 per megawatt hour taking into account the actuals to date and the forwards for the rest of the year.

In terms of hedging, in Spain, we continue to move along our default hedge line strategy for the non-regulated portion of our output. The non-regulated assets would represent approximately 45% of our 10.2 terawatt hours consolidated output in a standard year, which is just over 4.5 terawatt hours for – again for the part of the assets that are not linked to regulation.

On average, we would like to hedge up to half of these 4.5 terawatt hours. And at the moment, we are 50% hedged for 2019 at prices that are just €1 above the expected pool prices in Spain for this year that is €54 per megawatt hour and we're 15% hedged for 2020 at around €56 per megawatt hour.

With respect to the international fleet its EBITDA increased by €27 million mostly due to new assets in operation which have €20 million and to a lesser extent by positive foreign exchange movement. Including some small investments in Spain namely the El Cabrito repowering in Tarifa and the buyback of our partners into small wind assets and the contribution from the large El Cortijo and Mt.

Gellibrand wind farms in Mexico and Chile and the smaller PV in Ukraine, new assets all together have contributed €23 million during the first half. In summary for the Energy division, during this first half the low hydro volumes in Spain are somewhat dampening what should be a positive underlying performance of the Energy business.

In slide 8, the Infrastructure division we provide a high-level overview. Both revenues EBITDA and average margin are up strongly with SLR or the Sydney Light Rail settlement as key driver and despite the early termination of the ATLL concession which implies a delta of €35 million in EBITDA year-on-year.

The growth in EPC backlog is a key highlight for the period and it puts us in a good position to maintain the high levels of activity. The total EPC backlog has increased in fact during the last six months from €7.1 billion to €8 billion with €2.8 billion of new awards partially offset by €1.9 billion of production during the period.

Largest awards include the Shuqaiq desalination plants in Saudi for almost €400 million a new rail project in Norway for close to €300 million the extension of another desalination plant in Qatar for €175 million and the Southern Program Alliance crossing removal project in Victoria in Australia from approximately €120 million. The Spanish EPC business represents just over 20% of backlog also of production and new awards.

In slide 9, you can see more detail on the individual business lines within Infrastructure. I would highlight once more the positive impact of Sydney settlement on the Construction & Industrial business amply compensated the lower volumes in the higher operating margin high capital-intensive international projects.

In concessions, the contribution is lower due to the sale of Rodovia do Aço in Brazil last year. Water is heavily impacted at EBITDA level but the early termination of ATLL and the low – slow start of new water projects where we expect a pickup towards the end of the year.

Finally Services grows thanks to higher EBITDA contribution in facility services. Turning now to the Property Development business, in slide 10, we present the operating results.

The business is still in net investment phase, so we should not read much into these figures. Revenues have increased very significantly in the period, with the delivery to clients of almost 280 residential units.

As we commented, at the Q1 results the margin for these deliveries was recorded in Q4, last year, as a result of the year-end appraisal valuation of these properties, which was increased to reflect the actual sale value. In Q1, we recorded the annual council tax, as a one-off expense.

And that impact is being diluted as the year progresses. Our objective is to post a positive EBITDA at year-end, although, that will depend on the exact timing of the delivery of certain projects that we target for year-end.

The longer view is that, we're aiming to create a unique property development company that leverages on ACCIONA's financial capacity, technical rigor, innovation and sustainability, to deliver a differential product to asset managers', property operators and retail customers. We're active in Spain, Mexico, Poland and Portugal, which helps to mitigate exposure to a single real estate cycle.

Our aspiration here is to minimize the risk and time to market with focus on build-to-rent and turnkey projects, as well as the rehabilitation of degraded urban areas, where a strong infrastructure group like ACCIONA has a competitive advantage. Now, in slide 11, to complete a review of the other businesses of the group, I would like to turn to Bestinver.

Bestinver contributed €31 million of EBITDA during the period that is €3 million lower than in the previous year, on margin and lower average funds under management of €6 billion relative to €6.3 billion last year. Total assets under management stood at €6 billion and customers are almost 52,000.

The most important recent development is the acquisition of Fidentiis, which is one of the most renowned capital market and stock broking specialist in Spain, active in asset management, equities, capital markets and M&A. Fidentiis will contribute to Bestinver a top team of more than 80 professionals.

And new business lines that operate in Portugal and Italy in addition to Spain. We believe we are combining the best of the buy side, with the best of the sell side at a time where consolidation makes sense.

We see positive synergies, in Fidentiis being backed by ACCIONA's stronger balance sheet and integration of our platform for attracting the best talent in the market. Bestinver will remain focused on asset management, with a philosophy that rests on fundamental, analysis of stocks, sound management of portfolios, a long-term view and stringent risk management.

With this acquisition, Bestinver reinforces its position, as leading independent financial services in Spain. Now to conclude the presentation, we would like to summarize the key operating drivers to know the growth in the Energy business, dampened by the low hydro generation in Spain, And the impact of the sale of the CSP business at the operating level.

We continue to enjoy good growth visibility, with around one gigawatt of assets that will be under construction at some stage this year. On the Infrastructure side, Sydney drives the operating result, compensating the lower revenues from the large projects, and the ramp-up of the new desalination contracts.

The EPC backlog grows strongly, following a very successful period of new awards. Again, we have managed to resolve Sydney and ATLL in a satisfactory way, eliminating two sources of uncertainty and risk.

With respect to our full year guidance, we are on track to meet what we indicated to the market. And with that, I would like to turn to the Q&A session.

[Operator Instructions] Thank you.

Hi. Good morning.

Thank you for taking my question. Oscar Nájar from Santander, I have two questions as you said Raimundo.

The first one is the full year target. You said that you confirmed the full year guidance.

This is in a like-for-like basis, high to single-digit EBITDA. Does it include this agreement on the Sydney Light Rail contract that I calculate is €100 million?

First is this €100 million, if that's correct. And if it's included in the guidance because that will imply that the rest of the assets will increase, just flattish versus last year, And why?

And the second question is regarding the cash flow generation quite interesting all the changes in the cash flow generation. And if you could give us more details of this €280 million included in the CapEx from the Sydney contract that is non-cash, if those have been canceled with other items.

We know that if my calculation of €100 million is correct, there will be another €100 million spread around the working capital or other things. So if you could give us more details there would be very helpful?

Thank you so much.

Okay. Let me try to answer Oscar.

On the full year targets the guidance included the impact of Sydney Light Rail. We see Sydney Light Rail as -- although the size is perhaps a bit unusual but it's a normal course of business settlement with a client and these kind of things happen all the time in the Infrastructure business.

We won't provide specific detail on particular contracts and about the contribution of Sydney to the targets. I wanted to mention that we know that Sydney was very likely to happen and that's why it was included in our budget and that we have to postpone the final settlement due to the elections in New South Wales.

We think that getting this long-term asset, which is a solution that we have contributed to structure it's a good solution for ACCIONA. And potentially if we wish to do so this is an asset that could be monetized from 2021 onwards when the concession starts fully operating.

With respect to the cash flow generation and SLR, we see this again as an investment. We are basically -- we have contributed cash over the last two years and the first half of this year to complete the works and that is rolled in into this instrument.

This is a claim that will give us the right to a substantial part of the underlying concession's cash flows in the future and therefore for us it's an investment. You have an increase in operating profit.

You have some impact through the working capital and then this outflow. The net impact for ACCIONA during the first half and we cannot be much more specific due to the settlement is that we are completing the works and we are incurring additional cash outflow during the first half.

But this piece of work is almost completed and it shouldn't have any further impact for the rest of the year.

Hello, good morning. Manuel Palomo from Exane, and thanks for taking my question.

I will stick to two for the time being, one on P&L, one on balance sheet. On the P&L in the first quarter if I'm not wrong, there were very strong results in the associates line.

You mentioned that you expected the associates to contribute like €15 million, €20 million per quarter. However, the figure was negative minus €10 million in the second quarter.

Why? And do you still expect around €80 million contribution from associates by full year 2019?

And then my second question, which is on balance sheet. I thought that there's a significant increase in the other current liabilities.

Could you explain the reason why these other current liabilities went up by €557 million year-to-date and €473 million if my numbers are correct in the second quarter? Thank you.

All right. Thank you, Manuel.

On the P&L on associates, I think there's this -- I mean this line includes significant assets in the Energy division, also some construction contracts water contracts and concessions that are not majority owned by ACCIONA. I think in the first quarter we -- versus the second quarter we have too many issues.

One is a particular contract that was settled this weekend, and which contributed in the first quarter of the year. We're talking about Mexico Airport is now -- everything is now public.

This resolution of this contract we were not certain over the second quarter exactly about the timing, so it hasn't contributed in the second quarter. And in any case for the rest of the year because of the way the settlement has taken place, the accounting treatment will change and it will contribute via EBITDA that settlement.

So I think when we have suggested or gave you in the first quarter the idea that this could be extrapolated. We expected that to come through the equity accounted line and I think going forward, it's going to come through the EBITDA line.

So that was one of the factors. The second factor is Nordics.

It's also a significant investment, equity accounting investment for the group. In Nordics, we trail the actual results of the company.

So, we always go on trailing plus our forecast of what the company has done because it hasn't reported yet. And we tend to take a conservative view about results and that also explains some of the delta in the equity-accounted figures.

With respect to the balance sheet, there's two key items there. One is the dividend, declared dividend at the time hadn't been paid and that you create a sort of a current liability with a dividend payable.

And second is the ATLL monetization of litigation rights which has been treated as basically as an account that we are going to recover and it has a corresponding credit on the balance sheet.

Hello. Sorry to bother you guys.

It's another two questions if I may. Number one question would be on the provisions that I also saw that there's a significant increase in this -- in the second quarter.

And then, well I've got some more questions, but I will stick to two. The other one is about the acquisition of Fidentiis.

When will we see it in the cash flow? I understand that you -- that acquisition should go through the cash flow and if possible a reference impact.

And what is the expected contribution at the EBITDA level? And if I may a follow-up on the previous one, you mentioned that one of the key reasons why associates were down was the Mexico Airport and that it's going to be accounted as EBITDA.

Could you give us a reference on what is the yearly or quarterly EBITDA coming from the Mexico Airport to have a better beat on what will be the move in associates? Thank you.

All right. I think the first question was on provisions in the quarter.

And these are the result of the reassessment of various contracts that are potentially -- well that we expect to be onerous and therefore we have provision there. And we cannot give you much more detail on that.

With respect to Fidentiis, it's -- we are waiting for the CNMV approval for the transaction. And this is the same answer also for Mexico Airport.

We won't be able to give you guidance at this stage on contribution. In Mexico in particular, the thing we can say is that we are recovering costs.

This was a project that had a low level of progress or production. And what we're doing is basically recovering the costs we have incurred.

Thank you.

Thank you. So if there are no further questions, thanks a lot for participating in this conference call and we look forward to seeing you after the summer.

Have a good time.