Group
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MESSAGE FROM THE BOARD

Dear Shareholders,

In 2016, we continued to implement the Strategic Plan adopted in 2015, having implemented a series of crucial actions, among which we highlight the simplification of the corporate structure with the conclusion of the merger of several companies that were engaged in similar or complementary activities and of the liquidation of some companies that were inactive, the divestment of several non-core assets, namely real estate assets that contributed to the Group's debt reduction trend, and the sale of the financial stake in Martifer Solar, SA to the Voltalia group.

In what concerns the current activity, 2016 was a difficult year, due to the arduous conditions of the world economy, particularly in the construction sector, due to the negative evolution of commodity prices and due to the occurrence of facts that affected some of the countries with relevance to the Group’s activity, such as Saudi Arabia, the United Kingdom and Angola. However, we were able to withstand and generate the necessary liquidity to meet all financial commitments and still significantly reduce the gross and the net debt.

The net result was negative and EBITDA decreased significantly when compared to 2015, although it is important to mention that it is heavily penalized by non-recurring events with no cash flow impact in excess of 40 million euros, namely impairments on Client credit, unfavorable exchange rate differences (GBP and AOA), impairments on fixed assets and the conclusion of the sale process of Nutre, SGPS, which resulted in an adjustment to the sale price of 14.7 million euros.

In the Metallic Construction segment, the naval area performed very well and continues to consolidate the business, while the metal mechanic segment presented a weaker performance, due to the fall in turnover in important geographies such as the United Kingdom and Saudi Arabia.

In the Renewables segment, we would like to highlight the conclusion of the construction of the wind farms of the Âncora project, which Ventinveste (172 MW) participated in. This was the largest project that Martifer Renewables has participated in to date.

We are fully convinced that we are on the right track and, therefore, we will continue in 2017 to implement the Strategic Plan adopted in 2015, keeping focused on the main objectives defined in the Group's strategy:

- Strengthening of the international presence;

- Focus on the core business of metal constructions, shipbuilding and Renewables;

- Consolidation of the adopted organizational model, keeping focus on:

  • Restructuring and adaptation of the structure in line with the reinforcement of the international presence;
  • Improved business processes and operational efficiency;
  • Development and retention of human resources;
  • Optimization of the industrial footprint and adjustment of the productive layouts.

- Improvement of the Group's financial position and debt:

  • Divestment in non-core businesses and sale of real estate assets;
  • Reduction of cash costs, through a program of optimization of the cost structure and of the working capital;
  • Gradual reduction of the debt and of the debt/EBITDA ratio.

To our collaborators and colleagues who have been crucial in the Group's achievement of its goals and in its recovery, we are grateful for the commitment and dedication shown and to all our stakeholders, we appreciate the support and trust placed in us.



Relatório de Governo Societário 2016