Acquisition of the Sufi Group

An important step forward for SyV’s services

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Contents

Description of the Sufi GroupBackground Activity

Financial HighlightsAcquisition structureRationality

Strategic goal Complementary operations

Financial suitability

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Description of the Sufi Group Background details: Incorporation

It was founded in 1982 by Rafael Naranjo who has kept control of the group up to now.The managers responsible for the various business areas are practically all from companies in the sector.Currently controlled by Naranjo family (64%) and Torreal (36%).

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Description of the Sufi GroupBackground: History

Its business began with sludge drying and treatment in the region of Madrid and by means of this business it achieved enough size and driving force to diversify in other business sectors all related to the Environment and Energy.Expansion at the end of the 1990s, beginning on the solid urban waste business (SUW), participating in a plant in Cadiz. From this time on it increased its participation in waste management.Customer portfolio focused on Local and Regional Authorities.Its business growth since 2000 has always been over the 2 digits.

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Description of the Sufi GroupCurrent situation

Sufi is the leading Spanish services group with critical mass not integrated in construction groups. It has a top rate professional team, with medium or long term management and operating contracts, a high quality income portfolio comprised of the highest ranking private and public customers and profitability higher than the average in the sector

Mll Euros 2004 Mg /N.Inc.Net Income 110Ebitda 13 12,2%Net Profit 5 4,3%Equity 49Net Debt 41Nº employees 2,100

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SOLID URBAN WASTE

(Street cleaning and SUW collection, construction and operation of SUW treatment plants)

WATER MANAGEMENT

(Sludge treatment, drying by cogeneration, water supply and treatment)

MULTI-SERVICES

(Gardening, Interior Cleaning, Parking meters)

OTHERS

(Consulting services, Engineering, Road maintenance, Wind Farms)

Description of the Sufi GroupBusinesses: Breakdown by area

4 business areas, identified with those of Valoriza/SyV

ORDER BOOK (1,706 Mn€)

743 Mn€

841 Mn€65 Mn€ 57 Mn€

Urban Solid Waste

Water Management

Multiservices

Others

2004 Sales (110 Mn€)

36 Mn€

49 Mn€

16 Mn€

8 Mn€Urban Solid Waste

Water Management

Multiservices

Others

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Description of the Sufi GroupBusiness areas: Organizational chart

The business is focused on the environmental sector with solid urban waste treatment and integral water cycle which accounts for 76% of its overall revenue forecast for 2005 (77.6% in 2004)

SUW Water Multi-services Others*

Business lines of the SUFI Group

The operating head of the business is Sufi, S.A., which earns more than 70% of the group sales, comprised of 24 companies. The most important companies in the Group are Sufi, Omicrom, Tramfangs and Boremer which achieved about 95% of the overall sales in 2004.

*Includes alternative energies

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Description of the Sufi GroupSUW: Solid urban waste treatment plants

Hornillos plant (Valencia)Miramundo plant (Cadiz)La Paloma plant (Madrid)Las Calandrias plant (Jerez)Guardamar plant (Alicante)Triaje de Molins de Rei plant (Barcelona)Arico plant (Tenerife)Gomecello plant (Salamanca)Packaging plant in Colmenar Viejo (Madrid)Los Alcores plant (Alcalá de Guadaira)Dumping degasification site Valdemingomez (Madrid)Phase II Salto Negro (Tenerife)

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Description of the Sufi GroupSUW: Cleaning and collection of solid urban waste

Road cleaning in Moratalaz (Madrid)Collection and cleaning in Majadahonda (Madrid)Collection and cleaning in Lalín (Pontevedra)Collection and cleaning in Boadilla del Monte (Madrid)Collection in Arcos de la Frontera (Cadiz)Collection and cleaning in Doñana (Huelva)Others

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Description of the Sufi GroupWater: Complete cycle and sludge treatment plants

Drying plant in Sant Adriá del Besós-Tranfang- (Barcelona)Water supply Alcalá de Henares (Madrid)EDAR Butarque (Madrid)EDAR Sur –Boremer- (Madrid)EDAR Martos (Jaén) ETAR in Gelfa (Portugal)ETAR in Borba (Portugal)EDAR Maintenance ButarqueMaintenance SAICA SurMaintenance SAICA DueroMaintenance SAICA GuadalquivirMaintenance and follow-up EDAR Sur (Madrid)A sludge compost plant in Cuesta in BurgosA biomass appraisal plant in Reocín (Cantabria)Others

(EDAR: Depuration water treatment plant)

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Description of the Sufi GroupMulti-services: Gardening, interior cleaning, parking meters

Restricted parking control in Zone I (Madrid)Infrastructure works in Boadilla del Monte (Madrid)Care of street trees in East/West areas (Madrid)Maintenance of green areas of Fuenlabrada (Madrid)Cleaning the University of OviedoHospital in Majadahonda (Madrid)

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Description of the Sufi GroupOthers: Wind energy

The Sotonera windpark (Huesca) 18MW

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Description of the Sufi GroupOthers: Construction, consulting services

Construction of several treatment plantsHospital in Majadahonda (Madrid)Joint Venture Guadalpín (Malaga)AENA Animal centreREE Blue projectRoad from Bembibre to S. Miguel

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Description of the Sufi GroupPotential portfolio in 2005 and upcoming years

2005Solid urban waste: New cleaning and collection contracts and new treatment plants.

Beyond 2005Integral water cycle: renewals and new contractsGardening and parking meters: renewals and new contractsDevelopment of wind farms, at present in the planning stage

Total turnover in 2005 (contracted + potential) = 181 million euros.

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Financial HighlightsHistory of growth

*(e) Including the potential portfolio

Growth in equity up to 49 Million in 2004 compared with 29 Million in 2002

Net Profit

0

2

4

6

8

2002 2003 2004 2005 e

Net Sales

0

50

100

150

200

2002 2003 2004 2005 e

CAGR: 36.3% CAGR: 34.2%

Mn € Mn €

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Financial HighlightsAccounting statements: Balance Sheet

3.36.3%51.754.9Current Liabilities13.240.2%32.946.2Other Liabilities4.39.6%44.749.0Equity

17.522.6%77.695.2Long Term FundsLIABILITIES

20.816.1%129.3150.1TOTAL ASSETS/LIABILITIES16.524.6%67.283.8Current Assets4.36.9%62.166.3Fixed Assets

ASSETSMn €Change 04/0320032004(Mn €)

SUFI GROUP BALANCE SHEET

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Financial HighlightsAccounting statements: Income Statement

Change Margin 04 onM € 2004 2003 04/03 Net IncomeNet Income 109,6 101,8 7,7%EBITDA 13,4 12,5 6,7% 12,2%Depreciation -5,7 -3,3 74,7%EBIT 7,6 9,3 -17,5% 7,0%PBT 6,8 6,1 11,4% 6,2%Tax -2,0 -1,9 1,9%Minorities -0,1 -0,1 -37,3%Attributable Profit 4,7 4,0 17,6% 4,3%

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Acquisition structure

Sufi Acquisition:SyV will acquire 100% of the capital of Sufi for an amount of €142 Million. SyV will obtain a commitment from the Chairman (Rafael Naranjo) that he will continue handling the management for a term of 3 years, which will ensure full development of the group’s expansion and growth plan during the transitional shareholding period.

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A need to increase operations in the service sector to complete the group’s strategy.Increase in the weight of the businesses with recurrent revenues in the profit and loss account.

Why Sufi?It is an excellent service growth platform for SyV as the largest independent company in the environmental sector outside of the construction groups. It has the technology, set up and capacity for growth: leader insludge treatment and a benchmark technician in SUW.Ensured continuity with long-term management and operating contracts: the average life of the portfolio is 23 years.High quality professional team.

Rationality:Strategic goal

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Rationality:Combination of complementary businesses

It will allow operating in businesses with a critical mass in sectors in which Valoriza does not operate (urban waste and environmental services)Reinforcement of Valoriza’s position in the water and energy sectors.

Road Cleaning MoratalazCollection and Cleaning MajadahondaCollection and Cleaning Boadilla del MonteTreatment Plant. ValenciaTreatment Plant. La Paloma (Madrid)Treatment Plant. Miramundo (Cadiz)Treatment Plant. Las Calandrias (Jerez)Degasification Plant Valdemingomez(Madrid)Plant in Arico (Tenerife)Plant in Salamanca

Water of Alcalá de HenaresSludge treatment in Reocín (Cantabria)WTP(water treatment plant) Besós (Barcelona)WTP Sur (Madrid)WTP Butarque (Madrid)

Hospital MajadahondaParking meters Zone I MadridInfrastructure BoadillaGardening FuenlabradaStreet trees (Madrid)Cleaning University of Oviedo

S.U.W Water Management

Multi-services

Windpark in La Sotonera (Huesca)

Wind Energy

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Rationality:Complementary operations

It will provide administrative classifications and technical benchmarks for public tenders.Its customers are local and regional authorities and synergies are generated with other divisions in the group.Geographic operations in most of Spain

Zone of operations

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Financial suitabilityFairness Opinion

Three external reports have been requested to appraise the Sufi group.

All have used the Discounted Cash Flow method (DCF), comparing the appraisal by means of applying multiples of other companies (comparable listed stock and market transactions).

The range of appraisal obtained is between 123 and 177 million euros (plus 30 million euros for the wind farms not taken into account).

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Valoriza: 2005 Forecasts

The acquisition implies:

Reaching Net Sales of €380 million (▲ on sales 05/04 > 300%)

Reaching an EBITDA margin > 10%

Double business in one year

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Conclusion

The acquisition of the Sufi Group represents an important step forward in SyV’s strategy of

diversifying its business structure