Annual Report of ACS Group - Grupo ACS

Directors’ report for the
Consolidated Group for 2010
6. Signifi cant events subsequent to year-end
Noteworthy is the completion of the takeover bid of Hochtief in February 2011 through the swapping of ACS treasury shares
for Hochtief shares, reaching a 33.49% holding at that time. At the date of preparation of these fi nancial statements, the
ACS Group had reached approximately a 37.6% holding in the share capital.
In addition, on 10 February 2011, the ACS Group signed a non-recourse fi nancing contract in which BBVA acts as an agent,
for the amount of EUR 2,059 million, which expands the fi nancing of Residencial Monte Carmelo, S.A. (a company that holds
6.58% of Iberdrola shares) by three years to 28 December 2014. With this transaction, the Group managed to refi nance the
most relevant fi nancing debt that would mature in 2011.
In relation to the legal proceedings that are being pursued at Commercial Court No. 1 of Bilbao, in a lawsuit for annulment
of the agreement of the General Shareholders’ Meeting of Iberdrola on 26 March 2010, whereby the Director chosen by
ACS resigned by exercising his right of proportional representation. On 26 January 2011, notifi cation was received of the
judgment dismissing the lawsuit, and not being in agreement with the content of said judgment, ACS decided to fi le the
appropriate appeal that shall be ruled upon by the Provincial Court of Biscay.
7. Outlook for 2011
Certain events in the recently ended year 2010 cause the ACS Group to undertake its activities in 2011 cautiously, but they
also enable it to have moderated optimism. Although the economic situation in Spain is diffi cult, the recent investments
and the commitment to internationalisation will allow the ACS Group to continue providing sustainable growth and value
to its shareholders.
The performance of Construction activity in 2011 will largely depend on the performance of the domestic market and the
development of the international markets where the Group has a presence:
• On the one hand, construction activity in Spain continues to be affected by the real estate crisis and the drop in public
resources for new infrastructure. Specifi cally, the civil works segment, where the Group has greater exposure, will
depend upon the trend in the public accounts and the economic recovery.
• On the other hand, internationally, the outlook for 2011 centres on investing in infrastructure in the United States
and Poland, where the Group has made major investment over the past years, in addition to the markets where it
traditionally has a presence such as Portugal and Chile, where ACS competes by developing concession and civil works
projects. This growth in internationalisation of construction activity will allow it to offset the anticipated drop in activity
in the Spanish market.
The Group will continue working to maintain its high operating effi ciency through cost containment and management of
working capital. These variables are crucial in a business that is so competitive as construction.
In line with the trend of the large civil works projects, the concession activity of the ACS Group shows signifi cant opportunities,
based upon the large projects awarded in the last years, mainly international ones, which over the coming years will require
investments similar to those made in 2010, which exceeded EUR 750 million.
In 2011, the ACS Group is prequalifi ed in several calls for tender for securing projects, and is also ready to continue bidding
on projects which are to be tendered by government bodies in Europe and North America in the near future.
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ANNUAL REPORT 2010
ACS GROUP