Kier Group Results for the year ended 30 June 2017 21 September - PowerPoint PPT Presentation

Kier Group Results for the year ended 30 June 2017 21 September 2017 Kier Group plc – Full Year results for the year ended 30 June 2017 1

Disclaimer No representation or warranty, expressed or implied, is made or given by or on behalf of Kier Group plc (the “Company” and, together with its subsidiaries and subsidiary undertakings, the “Group”) or any of its directors or any other person as to the accuracy, completeness or fairness of the information contained in this presentation and no responsibility or liability is accepted for any such information. This presentation does not constitute an offer of securities by the Company and no investment decision or transaction in the securities of the Company should be made on the basis of the information contained in this presentation. This presentation contains certain information which the Company’s management believes is required to understand the performance of the Group. However, not all of the information in this presentation has been audited. Further, this presentation includes or implies statements or information that are, or may be deemed to be, "forward-looking statements". These forward-looking statements may use forward-looking terminology, including the terms "believes", "estimates", "anticipates", "expects", "intends", "may", "will" or "should". By their nature, forward-looking statements involve risks and uncertainties and recipients are cautioned that any such forward- looking statements are not guarantees of future performance. The Company's or the Group’s actual results and performance may differ materially from the impression created by the forward-looking statements or any other information in this presentation. The Company undertakes no obligation to update or revise any information contained in this presentation, except as may be required by applicable law and regulation. Nothing in this presentation is intended to be, or intended to be construed as, a profit forecast or a guide as to the performance, financial or otherwise, of the Company or the Group whether in the current or any future financial year. This presentation and its contents should not be distributed, published or reproduced (in whole or in part) or disclosed by recipients to any other person. Certain information in this presentation has been extracted from the announcement of preliminary results made by the Company on 21 September 2017 and this presentation is not a substitute for reading that announcement in full. Kier Group plc – Full Year results for the year ended 30 June 2017 2

Haydn Mursell Chief Executive Kier Group plc – Full Year results for the year ended 30 June 2017 3 3

Agenda  Overview  Financials  Divisional update  Summary and outlook Kier Group plc – Full Year results for the year ended 30 June 2017 4

Good underlying performance  Strong contributions from all divisions - Property 23% ROCE - Residential 11% ROCE - Construction 2.0% margin - Services 5.2% margin  Two-year portfolio simplification substantially complete  Well managed net debt position - 113% operating cash conversion - Net debt £110m : <1x EBITDA  Robust order books and pipelines - Providing long-term visibility  Full year dividend per share increased to 67.5p up 5% Kier Group plc – Full Year results for the year ended 30 June 2017 5

Stronger, simplified and focused  Two-year portfolio simplification substantially completed - Geographical exits - Non-core disposals  No further charges in FY18  Group focused on 3 core verticals - Robust long-term fundamentals - Significant cross-sell opportunities Property & Investment  Represents 90% of Group revenue & profit Leading builder Leading provider of Leading UK mixed tenure housing infrastructure player  Invest, Build and Maintain all asset classes £1.8bn+ £1.5bn+ £800m+ Kier Group plc – Full Year results for the year ended 30 June 2017 6

Positive macro environment UK priorities  Regeneration of regional cities  Upgrading and investing in infrastructure  Provision of more affordable housing and its maintenance Our position  Regional builder with national coverage  Capex and maintenance infrastructure capabilities  End-to-end housing solutions Kier Group plc – Full Year results for the year ended 30 June 2017 7

Positive macro environment Building Infrastructure Housing Property and Property and Mixed Tenure and Invest Investment Investment Kier Living Build Regional Building Infrastructure Kier Living Maintain Workplace Services Highways, Utilities Housing Maintenance >£1bn revenue from clients working with 2 or more parts of the Group Kier Group plc – Full Year results for the year ended 30 June 2017 8

Vision 2020 targets remain on track  Profit on track for £200m target - Increased returns from Property and Residential  Dividend per share moving towards 2x covered  Net debt Net debt 2017 2020 - Strict disciplines  Year end <1x EBITDA Year end <1x EBITDA <1x EBITDA  Average net debt increasing in-line with Average £320m c.£400m investment in Property and Residential  Safety - Group AIR 130; less than half industry benchmark  Customer experience - 91% recommend us  Investment in systems provides a strong foundation Oracle – finance, HR, Procurement, etc - Kier Group plc – Full Year results for the year ended 30 June 2017 9

Well positioned for future growth  Leading market positions in robust and growing sectors - >90% of Group revenue and profit  Portfolio of businesses provides flexibility and resilience  Strong platform for future growth - Simplified and focused Group - Well managed balance sheet - Improved order book  Confident to deliver growth in 2018  On course to deliver Vision 2020 strategic targets Kier Group plc – Full Year results for the year ended 30 June 2017 10

Financial update Bev Dew, Finance Director Kier Group plc – Full Year results for the year ended 30 June 2017 11

Financial highlights  Good performance in line with management expectations  Operating profit 1 of £146m up 3%  Earnings per share 1 of 106.8p up 7%  Well controlled and sustainable net debt position  Order book 2 of c.£9.5bn with potential extensions of £2.5bn  Full year dividend of 67.5p up 5% 1 Arising on continuing operations, stated before non-underlying items. 2 Including £0.6bn from McNicholas acquired post year end. Kier Group plc – Full Year results for the year ended 30 June 2017 12

Revenue and underlying operating profit Revenue 1 Underlying operating profit 2 Property Residential Construction Services 4% 15% 9% 40% 13% £4,265m £175m 49% +5% +5% 47% 23% 1 Group and share of joint ventures from continuing operations. 2 Arising on continuing operations, stated before non-underlying items, excluding corporate costs. Kier Group plc – Full Year results for the year ended 30 June 2017 13

Income statement Strong EPS and dividend growth Year ended 30 June Change 2016 2 2017 % £m £m Underlying operating profit 1 Group 145.0 149.9 -3 Joint ventures (JVs) results post tax 175 25.0 14.2 +76 Profit on disposal of joint ventures 5.4 2.6 +108 Corporate costs (29.8) (25.6) +16 Total operating profit 1 145.6 141.1 +3 Net finance costs 1 (19.5) (24.7) Profit before tax 1 126.1 116.4 +8 Earnings per share (pence) 1 106.8 99.5 +7 Dividend per share (pence) 67.5 64.5 +5  Results of joint ventures presented after accounting for interest and tax of £7.2m (2016: £2.4m) – see Appendix 1 Arising on continuing operations, stated before non-underlying items. 2 Restated to present the results of Mouchel Consulting and Biogen as discontinued, following their sales in the year, and to restate the results of UK Mining into continuing operations Kier Group plc – Full Year results for the year ended 30 June 2017 14

Underlying business operating profit Year ended 30 June Change 2016 2 2017 % £m £m Performance by division Property 25.8 21.4 +21 Residential 22.8 20.3 +12 Construction 39.8 38.9 +2 Services 87.0 86.1 +1 (29.8) (25.6) Corporate +16 Total operating profit 1 145.6 141.1 +3 Net finance costs 1 (19.5) (24.7) -21 Profit before tax 1 126.1 116.4 +8  Transition to a central Finance Shared Service Centre providing improved control and a platform for growth led to £3m additional corporate costs  The transition will conclude in the second half of FY18 ‒ FY18 will only be impacted with six months of parallel running costs 1 Arising on continuing operations, stated before non-underlying items 2 Restated to present the results of Mouchel Consulting and Biogen as discontinued, following their sales in the year, and to restate the results of UK Mining into continuing operations. Kier Group plc – Full Year results for the year ended 30 June 2017 15