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2.- Strategy

Once again the global economy and the Eurozone in particular had a difficult year in 2012. At Abengoa however, our innovative technology solutions for sustainable development have enabled us to maintain sustainable and recurrent growth. The protracted nature of the global crisis has had a negative impact on the global fight against climate change, but it continues to be a pressing issue for humanity, which is increasingly looking to advances in renewable energy. At the same time, the high risks associated with nuclear energy, the formidable costs of a foreign energy dependency and the environmental impacts of fossil energy have once again highlighted the importance of tackling the major challenges of sustainability and renewable energy development.

The 2012 report by the International Energy Agency predicts that around 31% of electricity will be generated from renewable sources by 2035 and that demand for biofuels, mainly second-generation bioethanol, will triple. Desalination and water reuse will be decisive factors in ensuring society’s access to this primary resource. All of this comes together in the vital role that renewable energy must fulfil and lays the foundations for Abengoa to become one of the leading players in global energy development and environmental improvements that will benefit future generations.

The ongoing creation of knowledge and a commitment to technological innovation form the basis of our competitive advantage in the energy and environment sectors. This has led Abengoa to become a major scientific and technological forum and a privileged space for training professionals in R&D+i.

Abengoa Research (AR), the research institute that we launched in 2011, is making highly significant progress in areas such as the production and storage of solar and marine energy; the development of energy vectors such as hydrogen and bioethanol; the creation of new technologies for recycling waste; desalination; and the reuse of water from industry and other sources.

We are carrying out the scheduled investments in our strategic plan and arranging financing for the corresponding projects. Abengoa’s projects map has grown in 2012 to encompass countries such as Oman, Turkey, Ghana and South Korea, and it has consolidated its leadership position in countries such as Brazil, USA and Germany.

Demand for Abengoa’s products and services continue to rise, since we are a global company that specializes in dynamic sectors. In 2012 we recorded a 10% rise in sales to €7,783 M compared to 2011, which is also reflected in our results with a 13% increase in EBITDA to €1,246 M.

The new Class B share issue and the conversion rights of Class A shares into Class B shares have been key elements in providing Class B shares with sufficient liquidity to be included in the IBEX 35 and for a potential listing on the NASDAQ. The support of the General Shareholders’ Meeting in September last year regarding the proposal to split Class A shares into Class B shares has encouraged us to continue working in the same direction.

Last year the company successfully refinanced €1,663 M of its long-term syndicated bank debt. Corporate net debt at the end of 2012 was 1.8 times corporate EBITDA, totaling €1,409 M, while total net debt, including non-recourse financing primarily associated with our concessions, was 6.6 times consolidated EBITDA, at €8,282 M. We ended the year with a cash position of €3,451 M, which will allow us to confidently meet our investment and debt commitments scheduled for 2013.

In 2013 we intend to continue to grow and strengthen our financial structure.

Engineering and construction

Sales in this area grew by 19% to €4,512 M. At the end of the year the order book totaled €6,679 M.

In the USA, Abengoa will carry out the engineering, development and start-up of one of the largest photovoltaic plants in the world, in California, while the works on the solar-thermal plants in Arizona and the Mojave Desert are progressing satisfactorily.

We have also been selected to construct the largest combined cycle plant in Poland, transmission lines in Latin America and Australia, and new desalination plants in the Middle East and North Africa.

Concession-type infrastructures

At the end of 2012 we had generated more than 4,324 GWh of energy in solar, hybrid and cogeneration plants, as well as startingup six new plants with an installed capacity of 300 MW. We have produced 97.435 billion liters of desalinated water, after new plants in Algeria and China came into operation.

The total capacity installed and under construction of our power plants in the USA, Abu Dhabi, South Africa, Algeria, Mexico, Brazil, Uruguay, Spain, India and Holland totals 2,432 MW. We are also currently developing new desalination plants in Algeria and Ghana, and various electricity transmission lines in Brazil, Peru and Chile.

Industrial production

The construction in Kansas (USA) of the first industrial plant to produce second-generation ethanol using Abengoa’s proprietary technology and the development of the first bio-refinery pilot plant in Salamanca (Spain) are examples of our research from recent years becoming reality, as well as demonstrating our technological leadership in this sector. Furthermore, in addition to biofuels, our industrial recycling activity also continues to grow, with sales of €2,798 M and EBITDA of €215 M.

Diversification and growth

Our growth model is based on the simultaneous management of businesses with different profiles and characteristics, which we refer to as our “three horizons”. We invest the cash flows from our traditional activities into growing our emerging businesses and we have numerous options for the future that will evolve through to maturity. Asset rotation is part of our business model.

Our options for the future are Abengoa Water, Abengoa Hydrogen, Abengoa Seapower and Abengoa Energy Crops, in addition to numerous technological opportunities that Abengoa Research and the business groups obtain from their research.

The company’s international activities account for 75% of total sales, with Latin America representing 27%, Asia 4%, Europe 15%, Africa 3% and the USA 26%.

Human capital, employment and innovation

At Abengoa we understand that the future depends on the creativity of the present, which in turn depends on the training and performance of all the people that form part of the company, which in 2012 totaled more than 26,000 people, an increase of 19% compared to the previous year. In 2012 we invested more than 1.7 million hours in training and we launched joint programs with acclaimed universities in every country where we are present.

Abengoa also increased its number of patent applications to 203 and was recognized as the leading Spanish company in the international patent applications ranking. These achievements are due to the efforts of the team comprising 747 company researchers, as well as investment in R&D+i projects totaling €91.3 M.


Once again this year, our internal control system underwent an independent evaluation process in accordance with the PCAOB auditing standards. Our Annual Report incorporates five independently verified reports covering the following areas: Financial Statements, the SOX-based (Sarbanes Oxley) internal control system, Corporate Social Responsibility, Corporate Governance, and the design and application of the company’s Risk Management System in compliance with ISO 31000 specifications.

Sustainable development

As companies we have an obligation to ensure that our actions contribute to economic development and social progress. The sustainable and responsible policies that we apply to these activities reduce the risks and the social and environmental impacts of man’s actions, and strengthen our corporate governance and relations with stakeholders, demonstrating that we are a reliable, profitable and secure company. They also contribute to developing the communities where we are present through the People, Education and Communities Program (PEyC).

Abengoa’s social actions, in which more than €10 M was invested this year, are channeled via the Focus-Abengoa Foundation.

We use the Corporate Social Responsibility Report, prepared in accordance with the principles of the Global Reporting Initiative (GRI) and the AA1000 sustainability assurance standard, to inform all our stakeholders of our social, environmental and financial performance during 2012, as well as the objectives, challenges and areas for improvement that we will work on during the coming year.

We provide the Corporate Social Responsibility e-mail address (, our website (, our twitter profile and our corporate blog ( to help us continue to improve through your contributions and to achieve our objectives in relation to sustainable development.