2012 Results and Strategy Review 2012 Results - Review Ken Hanna - PowerPoint PPT Presentation

2012 Results and Strategy Review

2012 Results - Review Ken Hanna Chairman 3

2012 Results - Review Angus Cockburn Chief Financial Officer 4

2012 Results Pre-Exceptional 2011 2012 Movement £m £m As reported Underlying Revenue 1,583 1,396 13% 14% Revenue excl. pass-through fuel 1,543 1,288 20% Trading profit 386 341 13% 6% Operating profit 390 345 13% Net interest expense (25) (18) (32)% Profit before tax 365 327 11% Taxation (95) (93) (2)% Profit after tax 270 234 15% Dividends per share (declared) 23.91p 20.79p 15% Diluted Earnings Per Share 101.66 87.72 16% (1) All numbers are pre-amortisation of intangible assets arising from business combinations and pre-exceptional items. Note: Post amortisation and exceptional items: 2012 PBT £367m, PAT £276m, D-EPS 103.86p; 2011 PBT £324m, PAT £260m, D-EPS 97.49p 5 5

2012 Results Post-Exceptional 2012 2011 Movement £m £m As reported Underlying Revenue 1,583 1,396 13% 14% Revenue excl. pass-through fuel 1,543 1,288 20% Trading profit 393 341 15% 8% Operating profit 397 345 15% Net interest expense (25) (18) (32)% Profit before tax 372 327 14% Taxation (92) (64) (50)% Profit after tax 280 263 5% Dividends per share (declared) 23.91p 20.79p 15% Diluted Earnings Per Share 105.14 98.83 5% (1) All numbers are pre-amortisation of intangible assets arising from business combinations Note: Post amortisation and exceptional items: 2012 PBT £367m, PAT £276m, D-EPS 103.86p; 2011 PBT £324m, PAT £260m, D- EPS 97.49p 6 6

2012 Results Revenue Trading Profit Bridge £m £m 2011 1,396 341 Currency translation impact (6) (1) 2011 pass-through fuel (108) (2) 2012 pass-through fuel 40 (1) Poit Energia acquisition 33 3 Underlying growth incl events 228 46 2012 1,583 386 Headline growth 13% 13% Constant Currency growth 14% 13% 2011 revenue from Asian Games & London Olympics £(6)m 2012 revenue from London Olympics £60m Underlying growth in constant currency excl events 14% 6% (1) All numbers are pre-amortisation of intangible assets arising from business combinations and pre-exceptional items. (2) The underlying growth percentages include the currency impact of pass-through fuel (revenue £1m, trading profit £nil ) 7 7

2012 Results Balance Sheet 2012 2011 £m £m Intangible assets/goodwill 169 81 Tangible fixed assets 1,278 1,087 Working capital 262 150 Provisions for liabilities & charges (6) - Retirement benefit obligation (4) (6) Derivative financial instruments (3) (14) Provisions for taxes (58) (52) Net borrowings (593) (365) NET ASSETS 1,045 881 8

2012 Results Financial Indicators 2012 2011 EBITDA (1) £626m £531m Capital investment £440m £418m Net borrowings £593m £365m Interest cover – EBITDA basis (1) 25 times 28 times Net debt to EBITDA (1) 0.9 times 0.7 times Effective tax rate (1) 26.0% 28.5% Gearing 57% 42% Dividend Cover (declared basis) (1) 4.2 times 4.2 times Return on average capital employed (2) 25% 29% (1) Before amortisation of intangible assets arising from business combinations and exceptional items. (2) Before amortisation and excluding the net book value of intangible assets arising from business combinations and pre-exceptional items . 9

2012 Results Cash Flow from Operating Activities (£m) 2012 2011 Operating profit pre exceptional items (1) 390 345 Exceptional items 7 - Depreciation & amortisation (1) 236 186 Changes in working capital (169) (38) Net movement in provisions for liabilities & 6 - charges Other non-cash movements 9 16 Net cash inflow from operating activities 479 509 (1) Before amortisation of intangible assets arising from business combinations 10

2012 Results 2012 2011 Cash Flow Statement (£m) Net cash inflow from operating activities 479 509 Net interest paid (23) (17) Taxation paid (83) (89) Acquisitions (1) (127) (14) Purchase of fixed assets (440) (418) Proceeds from disposal of fixed assets 13 13 Dividends paid (58) (52) Cash outflow in year (239) (68) Issue of shares 3 2 Purchase of own shares held under trust (11) (10) Return of capital to shareholders (2) (148) Exchange 21 (8) Movement in net debt in year (228) (232) (1) Total cash paid as at 31 Dec 2012 for Poit was £136m comprising £127m per acquisitions line, £6m within working capital movements and the add back of the £3m of cash acquired. 11

Another strong performance • Highlights • Both business grew revenues in difficult economic environment • Power Projects revenues +15%, Local +23%; 20% increase in average MW power on rent • Power Projects benefitting from key strategic moves • Gas continues to grow strongly: 750 MW on rent, + 77% more on rent y-o-y • 100 MW cross-border project in Mozambique operating as an Independent Power Producer • Local business growing fast • Strong performance in North America; 30%+ growth in emerging markets • Flawless execution of London Olympics • Poit Energia acquisition completed and integration progressing well • Successful implementation of new organisation structure • Lowlights • Power Projects margins and ROCE; on-going debtor challenge in Power Projects with £25m increase in bad debt provision • Continued low growth in European business in face of weak economic environment • Weak H2 Power Projects order intake – slowing growth rates in emerging markets 12

Underlying vs Reported Growth 2012 2011 Revenues as reported (excl pass 20% 11% through fuel) Revenues underlying (1) (2) 14% 22% Trading Profit as reported 14% 8% (excluding pass through fuel) Trading Profit underlying (1) (2) 6% 26% (1) Underlying adjustments in 2012 were Asian Games, the London Olympics, Poit Energia, pass-through fuel and currency. (2) Underlying adjustments in 2011 were the Vancouver Winter Olympics, FIFA World Cup, the Asian Games, the London Olympics, pass-through fuel and currency. (3) All numbers are stated pre-amortisation of intangible assets. 13

Segmental performance – as reported (1) REVENUE TRADING PROFIT 2012 2011 Constant 2012 2011 Constant £m £m Curr % £m £m Curr % Local Business 905 734 25% 175 124 41% Trading Margin: 19% 17% Rolling 12-month ROCE: 21% 19% Power Projects 638 554 15% 212 215 (1)% excl pass-through fuel Trading Margin: 33% 39% Rolling 12-month ROCE: 31% 40% Pass-through fuel 40 108 (63)% (1) 2 (133)% Total 1,583 1,396 14% 386 341 13% Trading Margin: 24% 24% Rolling 12-month ROCE: 25% 29% (1) Pre-amortisation and excluding the net book value of intangible assets arising from business combinations. 14

Segmental performance – underlying (1) REVENUE TRADING PROFIT 2012 2011 Underlying 2012 2011 Underlying £m £m % £m £m % Local Business 812 721 13% 144 120 20% Trading Margin: 18% 17% ROCE: 19% 19% Power Projects 638 554 15% 212 214 (1)% excl pass-through fuel Trading Margin: 33% 39% ROCE: 31% 40% Total 1,450 1,275 14% 356 334 6% Trading Margin: 25% 26% ROCE: 25% 28% (1) Pre-amortisation and excluding the net book value of intangible assets arising from business combinations. Also excluding revenue, trading profit and operating assets from 15 Asian Games, London Olympics, Poit acquisition, pass-through fuel and currency.

Revenue Mix (£m) REVENUE % OF REVENUE EXCL PASS- THROUGH FUEL 2012 2011 Underlying (1) 2012 2011 Change % pp Power 1,109 899 16% 72% 70% 2 Temperature Control 114 116 -% 7% 9% (2) Oil-Free Air 28 27 2% 2% 2% - Total Rental 1,251 1,042 14% 81% 81% - Service Revenue 292 246 13% 19% 19% - Revenue excl pass- 1,543 1,288 14% 100% 100% through fuel Pass-through fuel 40 108 N/A Total Revenue 1,583 1,396 14% (1) excluding revenue from Asian Games, London Olympics, Poit acquisition, pass – through fuel and currency. 16

Local Business – North America REVENUE TRADING PROFIT (1) 2012 2011 Underlying 2012 2011 Underlying $m $m Change $m $m Change % % Full year 482 415 16% 108 83 31% Trading Margin 23% 20% Second half 274 230 20% 75 55 34% Trading Margin 28% 24% • Strong performance across a number of sectors and geographies • Power revenue up 31%; volume and rates up; strong performance in oil & gas sector • TC down 1% mainly due to lower volumes in Cooling Towers business • Significant steps taken on emissions technology; by end of 2013 will be Tier 3/4 compliant on 50% of fleet (1) before amortisation of intangible assets arising from business combinations. Note: Underlying excludes currency 17