1 Full Year 2017 Results Presentation 8 March 2018 ]
2 2 Olivier Brousse Chief Executive Officer www.laing.com
3 2017 results highlights – strong growth 10.5% increase in NAV to Realisations of £289m £1,123.9m (13.5% including dividends paid) 12% increase in external assets NAV of 306p per share (277p under management to £1.6bn per share at 31 December 2016) (1) Investment commitments of 30% increase in total dividend (1) £383m well ahead of guidance Final base dividend of 3.82p per share (1) Pipeline at £2.15bn (2016 - Special dividend of 4.88p per £1.86bn) share (1) ___________________________ 1. Not adjusted for rights issue
4 £210m rights issue to fund further growth Group investments of £383m in 2017 - a significant step change Growing pipeline Growing pipeline of £2.15bn in both PPP and RE opportunities and of opportunities across our three geographic markets Continue to grow relationships with international partners Increase in investment opportunity leads to potential risk of realising Flexibility to assets earlier than optimally access more Equity raise will provide additional capital and enable the Group to and / or larger take advantage of more and larger opportunities opportunities Self-funding model and disciplined approach to investment to continue Strong track Continuing strategy to create value for shareholders through growth in record of NAV NAV and dividends. growth NAV CAGR of 15.5% (1) since IPO ___________________________ 1.Includes dividends paid
Growing and well diversified pipeline of equity opportunities 5 31 Dec 2017 31 Dec 2015 31 Dec 2016 North Asia Pacific America 27% 40% Asia PPP Pacific North £1,585m 28% America 40% Europe 33% £2,150m £1,859m £1,494m North Renewable Energy Asia Pacific America 31% 41% Europe £565m 32% Europe 28% • Other potential geographies: selected countries in Latin America & South East Asia
Strong partner relationships across all geographies 6 Amsterdam Toronto London New York Los Angeles Partner relationships straddle both geographies and sectors Late stage investment opportunities arise from partner relationships John Laing continues to grow Sydney Melbourne partner relationships Auckland John Laing’s offices
Shortlisted / exclusive investment opportunities 7 Europe: • National Broadband, Rol North America: • Silvertown Tunnel, UK • A16, Netherlands • Gordie Howe International Bridge, US/Canada • Hurontario LRT, Ontario • Los Angeles CONRAC, California • Hamilton Rail, Ontario • Pennsylvania Broadband, Pennsylvania • I-75 Road, Michigan John Laing offices Shortlisted PPP projects • Plus four exclusive renewable energy opportunities.
8 Projects under construction in 2017 Intercity Express New Perth Stadium Programme New Generation Sydney Light Rail Rollingstock
9 Investment commitments well ahead of guidance Project Region PPP (£m) RE (£m) Total (£m) Buckthorn Wind Farm North America --- 47.6 47.6 Rocksprings Wind Farm North America --- 62.9 62.9 I-66 Managed Lanes North America 118.0 --- 118.0 Solar House Europe --- 22.0 22.0 New Grafton Correctional Centre Asia Pacific 79.3 --- 79.3 Hornsdale 3 Wind Farm Asia Pacific --- 10.0 10.0 Melbourne Metro Asia Pacific 43.1 --- 43.1 Total 240.4 142.5 382.9
10 Realisations of assets ahead of guidance Holding JLEN JLIF Other Total Project sold (£m) (£m) (£m) (£m) M6 Hungary Road 30% --- --- 22.7 22.7 A1 Poland Road 29.69% --- --- 120.4 120.4 Croydon & Lewisham Street Lighting 50% --- 8.2 --- 8.2 Lambeth Social Housing 50% Coleshill Parkway 100% --- 104.6 --- 104.6 Aylesbury Vale Parkway 50% City Greenwich Lewisham (DLR) 5% IEP (Phase 1) 9% Llynfi Wind Farm 100% 43.0 --- --- 43.0 Total realisations agreed 43.0 112.8 143.1 298.9 Not completed in 2017: Lambeth Social Housing (9.9) Total realisations for 2017 289.0
11 11 Patrick O’D Bourke Group Finance Director www.laing.com
NAV growth of 10.5% 12 Net asset value movement – year ended 31 December 2017 1,200 6.4 (29.9) 160.7 (30.1) 1,100 1,000 (£m) 1,123.9 900 1,016.8 800 700 31 December 2016 Fair value movement Pension deficit Other P&L income Dividends paid 31 December 2017 on portfolio less costs
13 Summary Balance Sheet – re-presented 31 December 2017 31 December 2016 Key line items (£m) (£m) Portfolio value 1,193.8 1,175.9 Cash collateral 133.1 23.7 Non-portfolio assets 0.3 0.3 Assets Total investments 1,327.2 1,199.9 Other long term assets 2.1 3.7 Cash 14.6 53.1 Total Assets 1,343.9 1,256.7 Working capital and provisions (3.7) (5.6) Liabilities Cash borrowings (176.0) (165.0) Pension deficit (IAS 19) (32.3) (61.3) Other retirement benefit obligations (8.0) (8.0) Total Liabilities (220.0) (239.9) Net Assets 1,123.9 1,016.8
14 Balanced investment portfolio Weighted Average Discount Rates Investment portfolio at 31 December 2017 Value 31 December 31 December 2017 2016 Primary 11 PPP projects Investments 14 £580.3m 9.3% 9.1% 3 Renewable Energy (projects under projects construction) 11 PPP projects £603.2m 7.9% 8.4% Secondary 16 Renewable Energy Investments projects 27 Shareholding in JLEN (projects in £10.3m - - (at 31 December 2017 operation) share price) £1,193.8m 8.8% 8.9%
15 Diversified and balanced portfolio at 31 December 2017 Volume Environmental - NZ Shadow Toll (including waste and biomass JLEN dollar JLEN US RE dollar Transport investments) Social - other Sterling Australian dollar Environmental Transport - Euro - wind and Availability rolling stock solar By Currency By Revenue By Sector • At 31 December 2017, ± 5% movement in Sterling would decrease / increase portfolio valuation by c.£38m
16 Continuing value creation Year ended Year ended Components 31 December 2017 31 December 2016 (£m) (£m) Unwinding of discounting 80.0 77.1 Reduction of construction risk premia 53.6 52.7 Foreign exchange movements (11.0) 74.7 Macro economic impacts 4.1 (13.8) Change in power and gas price forecasts (54.8) (17.6) Change in operational benchmark discount rates 23.6 27.5 Uplift on financial closes 50.1 31.0 Value enhancements and other changes 15.1 (17.2) Fair value movement 160.7 214.4
17 Pension deficit under IAS19 • Net IAS19 deficit: £32.3 million at 31 December 2017 (£61.3 million at 31 December 2016) £million IAS19 (deficit)/ – £24.7 million scheduled cash contribution to JLPF surplus during the year John Laing Pension Fund (35.2) – Average contributions of £26m per annum to JLPF John Laing Pension Plan 2.9 agreed over seven year repayment period from 31 March 2016 Summary Balance Sheet (32.3)
Summary Cash Flow – re-presented 18 Year ended Year ended Key line items 31 December 2017 (£m) 31 December 2016 (£m) Cash yield 40.9 36.8 Operating cash flow (17.3) (10.9) Net FX impact (1.3) (18.2) Total operating cash flow 22.3 7.7 Cash investments in projects (209.9) (301.5) Proceeds from realisations 287.1 146.6 Cash received from acquisition of Manchester Waste 23.5 --- VL Co by the GMWDA Net investing cash flow 100.7 (154.9) Finance charges (8.3) (6.8) Cash contributions to JLPF (incl. PPF levy) (24.7) (18.4) Dividend payments (30.1) (26.2) (63.1) (51.4) Cash inflow / (outflow) 59.9 (198.6) Opening net (debt) / cash (88.2) 110.4 Closing net debt (28.3) (88.2) 1 include cash collateral balances and are net of cash borrowings
Financial resources available 19 31 December 2017 31 December 2016 (£m) (£m) Committed facilities 525.0 450.0 Letters of credit issued under corporate banking facilities (152.3) (112.6) Letters of credit issued under additional surety facilities (50.0) (50.0) Other guarantees / commitments (7.5) (6.5) Short term borrowings (176.0) (165.0) Utilisation of facilities (385.8) (334.1) Headroom on committed facilities 139.2 115.9 Cash and bank deposits 14.6 53.1 Unavailable cash (0.7) (0.9) Net available financial resources 153.1 168.1 Total letters of credit issued 202.3 162.6 Cash collateral 133.1 23.7 Future cash investment into projects 335.4 186.3
Income Statement – re-presented 20 Year ended Year ended Key line items 31 December 2017 31 December 2016 (£m) (£m) Movement in fair value – investment portfolio 160.7 214.4 Investment fees from projects 7.1 7.0 Revenue Investment Management Services (IMS) revenue 19.0 17.8 Project Management Services (PMS) revenue 6.1 14.9 Bid cost recoveries on financial close 3.7 7.5 Movement in fair value – other (2.1) (3.2) Total Income 194.5 258.4 Third party costs (11.3) (9.8) Costs Staff costs (33.9) (34.1) General overheads (12.7) (11.1) Other and exceptional charges 2.1 (0.7) EBIT 138.7 202.7 Finance charges (10.1) (7.7) Other Pension and other charges (2.6) (2.9) Profit before tax from continuing operations 126.0 192.1 Earnings per share (basic) 34.7p 51.9p
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