Results for the 6 months ended 30 June 2012 R l f h 6 h d d 30 J 2012 Capita plc Wednesday 25 July 2012 y y
Agenda 1. Summary – Paul Pindar, Chief Executive 2. Financial results – Gordon Hurst, Group Finance Director 3. Creating long term value: - Organic growth – Maggi Bell, Business Development Director - Acquisitions – Paul Pindar 4. Summary & outlook – Paul Pindar
H1 2012 – The 3 key essentials � Hit numbers Profits, earnings & dividends all up 10% � Return to Reverse -7% decline in 2011 organic growth On track for +3% in 2012 � Improve 2011 full year: 85% cash conversion 2012 half year: 93%
H1 2012 highlights � £1.3bn major contract wins vs £2bn in full year 2011 � £3bn+ has left the pipeline year to date – significant momentum p p y g � Pipeline replenished to £4.1bn � £271m fundraising - £129m spent on 10 acquisitions in first 7mths � £271m fundraising - £129m spent on 10 acquisitions in first 7mths � Significant additions to Senior Management talent
Financial results Gordon Hurst Group Finance Director
Financial results – revenue C Comparative growth 15% ti th 15% 5 year H1 compound growth 10% 1/2 Year 1/2 Year 985 985 2007 Full Year 2073 1182 2008 2441 1311 2009 2687 1361 2010 2744 2744 1400 2011 2930 1607 2012 2012 0 500 1,000 1,500 2,000 2,500 3,000 3,500 £m
Financial results – revenue by market Private sector 54% (full year 2011: 52%) Public sector 46% (full year 2011: 48%) Central government 11% (9%) Local government 18% (18%) Education 8% (11%) Health 6% (5%) Emergency services 3% (3%) Life & pensions 18% (19%) p ( ) Insurance 5% (6%) Financial services 6% (5%) Other private 25% (22%) 2012 half year (2011 year end)
Financial results – H1 revenue growth £m 6 months to £m 6 months to Growth £m 2008 £m 2007 £m 2008 Growth 30 June 2012 30 June 2011 1607 1400 Turnover 15% (32) - (2%) 2012 acquisitions (179) (13%) 2011 acquisitions - 2001 2003 2004 [ ] Disposals [ ] [ ]% Growth excl. acquisitions 0% 1396 1400 Key specific contract declines: National Strategies 25 Service Birmingham 8 Life and pensions projects Life and pensions projects 20 20 eircom 12 Total 65 (5%)
Financial results – underlying profit before tax* Comparative growth 10% C ti th 10% 5 year H1 compound growth 13% 1/2 Year 103.8 2007 2007 Full Year F ll Y 238.4 120.2 2008 277.2 141.7 141 2009 325.1 163.1 2010 364.2 174.0 2011 385.2 190.7 2012 0 50 100 150 200 250 300 350 400 £m * Excludes non-underlying items being: intangible amortisation, acquisition expenses and release of contingent consideration, non-cash impact of mark to market movement on financial instruments
Financial results – underlying operating profit* Comparative growth 12% C ti th 12% 5 year H1 compound growth 13% 1/2 Year 118.9 8 9 Full Year Full Year 2007 2007 271.3 140.6 2008 320.9 159.6 2009 357.7 178.4 2010 395.1 193.0 2011 427.4 216.6 2012 2012 0 100 200 300 400 500 £m * Excludes non-underlying items being: intangible amortisation, acquisition expenses and release of contingent consideration, non-cash impact of mark to market movement on financial instruments
Financial results Financial results – underlying H1 operating underlying H1 operating margin* 15 0 15.0 14.6 14.4 13.8 14.0 13.5 13.3 13.2 argin % 13.1 13.1 13.0 Operating ma 12.2 12.1 11.9 12.0 O Full Year Half Year 11.0 10.0 H1 2007 H1 2008 H1 2009 H1 2010 H1 2011 H1 2012 Year Year * Excludes non-underlying items being: intangible amortisation, acquisition expenses and release of contingent consideration, non-cash impact of mark to market movement on financial instruments
Financial results – underlying earnings per Financial results underlying earnings per share* Comparative growth 10% C ti th 10% 5 year H1 compound growth 15% 1/2 Year 12.13 2007 2007 Full Year Full Year 28.10 14.46 2008 33.26 16.92 2009 38.75 19.60 2010 44.98 21.95 2011 48.49 24.19 2012 2012 0 10 20 30 40 50 60 Pence * Excludes non-underlying items being: intangible amortisation, acquisition expenses and release of contingent consideration, non-cash impact of mark to market movement on financial instruments
Financial results – dividends Comparative growth 10% 1/2 Year 4.0 2007 2007 Full Year Full Year 12.0 4.8 2008 14.4 5.6 2009 16.8 6.6 2010 20.0 7.2 2011 21.4 7.9 2012 2012 0 5 10 15 20 25 Pence
Financial results – cash flow statement £m 6 months to £m 6 months to 30 June 2012 30 June 2011 201 Cash flow from operating activities 180 (23) (23) (18) (18) Net interest paid Net interest paid Taxation paid (29) (27) Capital expenditure (54) (38) 95 95 Free cash flow Free cash flow 97 97 (135) Acquisitions and disposals (148) (87) Equity dividends paid (81) 271 - Share issue net proceeds 3 3 Share option proceeds Net debt (repaid)/issued 101 (18) (2) Other financing 1 (14) Increase/(decrease) in cash in the period 114
Financial results - working capital Major movements: £m 30 June 2012 TV Licensing re ised pa ment terms TV Licensing revised payment terms 10 10 11 Prudential deferred income release 6 AXA WIP (reduces 2013) TV Licensing new contract WIP (reverses H1 2013) 5 6 RPP – new contract (reverses 2014/2015) 9 Other 47 Favourable historic payment terms reverting to the industry norm No adverse material reversals forecast after 2012
Financial results Financial results – half year capex as % of half year capex as % of turnover 7 6 6 5 % % 4 3 3.4 3.2 2.8 2.8 2.8 2 7 2.7 2 1 0 2007 2008 2009 2010 2011 2012
Financial results – % post tax return on capital (debt Financial results – % post tax return on capital (debt plus equity) – 12 months to 30 June 2012 24 Actual 20.2 20.2 20.0 WACC 18.8 18.6 20 16.3 n % return 16 16 12 8.2 8.1 7.9 7.8 7.8 7.2 8 4 2007 2008 2009 2010 2011 2012 2007 2007 2008 2008 2009 2009 2010 2010 2011 2011 2012 2012 PBIT (normalised) 245 293 340 377 410 451 Avg capital (£m) Avg capital (£m) 954 954 1067 1067 1230 1230 1377 1377 1671 1671 2187 2187 27.7 27.0 26.8 26.0 23.5 Tax (%) 21.0 Annual acquisition spend Annual acquisition spend 178 178 301 301 129 129* 114 114 147 147 341 341 * 2012 to date
Financial results Financial results – post tax economic profit post tax economic profit 12 months to 30 June 2012 Annual increase 9% % 5 year compound growth 15% 199 200 183 171 £m 152 1 0 150 126 Economic profit 100 100 50 2007 2008 2009 2010 2011 2012 2007 2007 2008 2008 2009 2009 2010 2010 2011 2011 2012 2012 245 293 340 377 410 451 PBIT (normalised) 1,377 1,671 2,187 954 1,067 1,230 Avg capital (£m) 27 7 27.7 27 0 27.0 26.8 26 8 26.0 26 0 23 5 23.5 T Tax (%) (%) 21 0 21.0 WACC (%) 8.1 8.2 7.9 7.8 7.8 7.2 Capital charge (£m) 77.2 87.5 97.2 107.4 130.4 157.5 Tax (£m) 67.8 79.1 91.1 97.9 96.3 94.7
Financial results – balance sheet gearing £m £m £m £m 2008 30 June 2007 (£m) £m 2007 Net debt 30 June 2012 30 June 2012 30 June 2011 Bonds † 1,151 934 Term debt 185 - Cash in bank (186) 75 Other 5 4 1,155 1,013 Interest cover 9x 11x Net debt to EBITDA Net debt to EBITDA 2 2 2.2 2 1 2.1 † Underlying bond debt net of the impact of currency and interest swaps
Financial results – debt profile 30 J 30 June 2012 debt profile 2012 d b fil � £1,151m of private placement bond debt with maturities from 2012 to 2021 with a 35%:65% fixed/floating rate mix � Only £99m matures between July 2012 and August 2015 � £185m 2 year term loan facility � £425m revolving credit facility maturing in Dec 2015 of which £nil � £425m revolving credit facility maturing in Dec 2015 of which £nil utilised at 30 June 2012
Creating long term value Maggi Bell, Business Development Director Paul Pindar, Chief Executive
Creating organic growth – 2012 major contracts Contract Value (£m) Duration Type Army Recruiting Partnering Project (RPP) 497 10 New contract contract Civil Service Learning contract 100 2 (+2) New 3 customer management private sector 161 3-5 New & contracts including Debenhams plc, a further t t i l di D b h l f th extended t d d leading retailer and Scottish Power West Sussex County Council 154 & 18 10 & 2 New 17 contracts £10m - £50m Aggregate Average 4 New & value: £325m years extensions Total value in H1 2012: £1.3bn (H1 2011: £1.1bn) 74% new contracts & 26% extensions H1 2012 H1 2012 win rate (by value) 1:2 i t (b l ) 1 2
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