2005 - 2006 - Pinsent Masons Water Yearbook 2012

SPAIN PART 3 (i): COMPANY ANALYSIS: MAJOR PLAYERS
Aguas De Barcelona SA
Sociedad General de Aguas de Barcelona SA (Agbar) is under the indirect control of Suez. Suez
holds 25% of Agbar’s equity via Hisusa (51% Suez, 49% La Caxia), which in turn holds 47.1% of
Agbar’s equity. Suez also has a direct holding of 1.7% of Agbar’s equity. Agbar dates back to the
Compagnie des Eaux de Barcelone founded in 1867 and incorporated in Paris as La Societé
Générale des Eaux de Barcelone, in 1881, before being acquired by Catalan investors and
incorporated in its current form in Barcelona in 1919 for the provision of water and sewerage services
in Barcelona. Until 1985, Agbar along with FCC enjoyed an effective duopoly of Spanish private
sector water and sewerage contracts across Spain. Since then, several Spanish construction
companies and electricity utilities have entered the market, and in several cases have subsequently
sold these activities.
Agbar, profit and loss account
Y/E 31/12 (€million) 2000 2001 2002 2003 2004
Water 747.4 794.5 840.5 892.7 968.0
Turnover 2,248.6 2,641.2 2,555.7 2,676.5 2,499.3
Operating profits 175.1 230.8 155.8 183.0 194.3
Net profit 163.5 128.8 173.4 243.0 247.2
Minority interests -41.2 -28.1 -40.7 -48.7 -49.2
Group net profit 122.3 100.7 132.7 194.3 197.9
Earnings per share (€) 0.87 0.72 0.92 1.33 N/A
Agbar holds some 60% of the private sector’s share of the water provision market in Spain. Currently
municipalities hold 50% of the market, which is being steadily eroded by privatisations. Agbar serves
1,321,134 customers in Barcelona (1.4% more than in 2002), a total of 2.77 million people.
Agbar, unconsolidated water and sewerage revenues
Y/E 31/12 (€million) 2000 2001 2002 2003 2004
Spain 840 893 998 1,081 1,135
International 1,076 1,153 613 562 582
Global 1,916 2,046 1,611 1,643 1,717
Excepting Barcelona, Agbar’s water and sewerage contracts in Spain are typically due for renewal
every 20 years. Currently the company provides sewerage services for nearly 14 million people, of
whom 10.8 million have their sewage treated.
Agbar, water and sewerage activities (population served)
2000 2001 2002 2003 2004
Water provision
Contract retention rate 93% 93% 91% 96% N/A
New contracts
Sewerage
338,321 169,321 212,748 145,431 218,656
New contracts
Sewage Treatment
778,417 1,535,364 226,253 62,589 316,537
New contracts (PE) 778,417 1,535,364 2,033,261 417,406 498,582
Operating margins have consistently been higher than for the company’s other activities, with an
internal rate of return of 15% for most recent contracts. Agbar expects to devote 65% of its capital
expenditure on water and sewerage services in the medium term.
60 water contracts were retained and extended during 2004 (1,200,168 people), along with 87
sewage treatment contracts (PE 2,200,764) and 18 sewerage service contracts (181,904 people).
In Agbar’s words, “the Water and Wastewater sector has been characterised by apathy, due to the
scarce volume of privatisations in Spain, in line with previous years.” During the first half of 2005,
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Pinsent Masons Water Yearbook 2005 – 2006