Year end results Year ended 31 December 2014 Adrian Ringrose, Chief Executive Tim Haywood, Group Finance Director
Support Support Services Construction Construction Equipment Summary and Introduction Financials Services UK International UK International Services Outlook Delivering our strategy g gy Strategy YE2014 Highlights Strong organic growth (+9% Building strong core Revenue +33% operating profit) ) businesses businesses Headline EPS +23% Headline EPS +23% Enhanced operational Capturing related capabilities expansion opportunities £8.1bn future workload (+26% ) Positioned for further Expand internationally Dividend +7% growth
Tim Haywood
Support Support Services Construction Construction Equipment Summary and Introduction Financials Services UK International UK International Services Outlook Income statement Income statement £ million 2014 2013 +33% Revenue 2,913.0 2,192.6 +35% Total operating profit p g p 117.2 . 86.7 . Interest (11.0) (5.6) +31% Headline profit 106.2 81.1 Amortisation of intangible assets (24.5) (8.9) Exceptional items (19.8) (4.1) Profit before taxation P fit b f t ti 61 9 61.9 68 1 68.1 Taxation (12.0) (13.1) Profit after taxation Profit after taxation 49.9 49.9 55.0 55.0 +23% Headline EPS 58.8p 47.7p +7% Dividend per share 23.0p 21.5p Redefining the future for people and places | 4
Support Support Services Construction Construction Equipment Summary and Introduction Financials Services UK International UK International Services Outlook Segmental analysis g y £ million 2014 2013 Revenue Revenue TOP* TOP Margin Margin Revenue Revenue TOP* TOP Margin Margin %growth %growth in TOP S upport S ervices -UK UK 1,688.0 1 688 0 81 4 81.4 4 8% 4.8% 1,196.6 1 196 6 56 0 56.0 4.7% 4 7% +45% 45% -International 117.5 7.4 4.8% 57.5 4.1 4.4% +80% Construction -UK 970.7 15.4 1.6% 802.2 14.7 1.8% +5% -International - 10.8 4.7% - 13.1 5.1% -18% Equipment Equipment 195 5 195.5 26 6 26.6 13 6% 13.6% 169 6 169.6 20 1 20.1 11 9% 11.9% +32% +32% S ervices Investments - 0.8 - 0.8 Group S G S ervices i (58.7) (58 7) (25 2) (25.2) (33 3) (33.3) (22 1) (22.1) 2,913.0 117.2 4.0% 2,192.6 86.7 4.0% JVs and 392.3 389.3 associates 3,305.3 2,581.9 *Total operating profit
Support Support Services Construction Construction Equipment Summary and Introduction Financials Services UK International UK International Services Outlook Drivers of growth Drivers of growth £ million £ million Organic Organic Initial Initial Other Other 2014 2014 acqs* +10% +33% Revenue 2,412.1 440.4 60.5 2,913.0 +9% +35% Operating Profit 94.5 20.4 2.3 117.2 +14% +23% Headline EPS (p)** 54.4 3.0 1.4 58.8 * Other acq relates to the incremental full year impact of Adyard & Paragon (both acquired during 2013) & post acquisition impact of esg acquisition impact of esg. ** Headline EPS impact of Initial is net of the dilution on the pre-existing Group of the 9.99% equity issue Redefining the future for people and places| 6
Support Support Services Construction Construction Equipment Summary and Introduction Financials Services UK International UK International Services Outlook Exceptional items Exceptional items £ million £ illi 2014 2014 Transaction costs Transaction costs (8 2) (8.2) Initial integration costs (10.2) Paragon earnout charge (1.4) Exceptional charge (19.8) Redefining the future for people and places | 7
Support Support Services Construction Construction Equipment Summary and Introduction Financials Services UK International UK International Services Outlook Taxation Taxation £ million £ million 2014 2014 2013 2013 Profit Tax Rate Profit Tax Rate S ubsidiary companies 89.7 (18.7) 20.8% 63.9 (15.0) 23.5% Joint Ventures and associates 16.5 - - 17.2 - - Headline profit 106.2 (18.7) 17.6% 81.1 (15.0) 18.5% Amortisation of intangible assets (24.4) 4.5 18.4% (8.9) 1.5 16.9% Other exceptional items Other exceptional items (19 9) (19.9) 2 2 2.2 11 1% 11.1% (4 1) (4.1) 0 4 0.4 9 8% 9.8% Group companies’ effective rate p p 61.9 (12.0) ( ) 19.4% 68.1 (13.1) ( ) 19.2% Redefining the future for people and places | 8
Support Support Services Construction Construction Equipment Summary and Introduction Financials Services UK International UK International Services Outlook Balance sheet summary Balance sheet summary £ million £ million 31 Dec 31 Dec 30 June 30 June 31 Dec 31 Dec 2014 2014 2013 Goodwill and intangible assets 524.5 502.4 286.6 Property, plant and equipment 195.3 171.7 155.9 Joint Ventures and associates 119.9 95.9 94.5 Working capital (83.4) (100.3) (136.1) Taxation Taxation (4 0) (4.0) 2 3 2.3 13 9 13.9 Pension obligations (net of tax) (3.8) (0.4) (5.9) Cash / (net debt) Cash / (net debt) (268 9) (268.9) (243 1) (243.1) (38 6) (38.6) Net assets 479.6 428.5 370.3 Redefining the future for people and places | 9
Support Support Services Construction Construction Equipment Summary and Introduction Financials Services UK International UK International Services Outlook IAS 19 Pensions IAS 19 Pensions £ million £ million 2014 2014 2013 2013 D fi Defined benefit obligations d b fit bli ti (924 9) (924.9) (826.9) (826 9) Buy in asset 360.7 - Obligations net of buy in asset Obligations net of buy in asset (564.2) (564.2) (826.9) (826.9) Other assets 559.4 819.2 Total deficit (4.8) (7.7) Deferred tax thereon 1.0 1.8 Net deficit (3.8) (5.9) • August 2014 - Pension buy in, reducing volatility of the deficit. Liability would have been c£35m greater at year end without this*. • Next triennial valuation due in 2015 on the position as at 31/ 12/ 2014. Redefining the future for people and places| 10 * Benchmarked against performance of FTSE100
Support Support Services Construction Construction Equipment Summary and Introduction Financials Services UK International UK International Services Outlook Investing for growth Investing for growth Trading +£85.0m Growth -£251.7m Financing -£63.6m Redefining the future for people and places | 11
Support Support Services Construction Construction Equipment Summary and Introduction Financials Services UK International UK International Services Outlook Free cash flow £ million 2014 2013 Group JVs and Total Total A Associates i t Total operating profit 100.7 16.5 117.2 86.7 Depreciation & amortisation 39.3 39.3 33.8 Net capital expenditure (54.3) (54.3) (33.7) Dividends in excess / (deficit) of profits 1.3 1.3 (3.6) Other ( (8.9) ) (8.9) ( ) (7.9) ( ) Working capital movement (53.3) (53.3) (19.7) Gross operating cash flow 23.5 17.8 41.3 55.6 Pension deficit payments, tax, interest Pension deficit payments tax interest (38 9) (38.9) (38 9) (38.9) (29 5) (29.5) Free cash flow (15.4) 17.8 2.4 26.1 • Key cash outflows • Equipment services expansion £37m of combined capex & working capital • UK Construction market tightening £26m working capital • UK defence activities £11m working capital UK defence activities £11m working capital • Property development £5m working capital Redefining the future for people and places | 12
Support Support Services Construction Construction Equipment Summary and Introduction Financials Services UK International UK International Services Outlook Financing, a maturing balance Financing, a maturing balance sheet • I iti l Initial acquisition financed via a 9.99% i iti fi d i 9 99% h share placing (£75m raised, l i (£75 i d oversubscribed) and a £200m bridge facility • £200m bridge facility replaced in June by a $350m US $ Private Placement with a weighted average maturity of 10 years. Fully hedged into fixed rate sterling repayments. • £250m in other combined facilities expiring February 2019 Covenants as previously: • Net debt : EBITDA < 3.0x (December 2014: 1.8x) • Interest cover > 3.5x (December 2014: 11.3x) ( ) Redefining the future for people and places | 13
Support Support Services Construction Construction Equipment Summary and Introduction Financials Services UK International UK International Services Outlook S ustain Abilities – delivering business value What it means • Broader assessment of performance • • Creation of operational tools & partnerships Creation of operational tools & partnerships • Informed investment decisions • Wider conversations with clients Realising opportunities Realising opportunities • Build reputation & relationships • New business insights • Competitive edge, win more work Competitive edge, win more work • Reduce costs • Encourage knowledge sharing & engagement • E Employee attraction & retention l tt ti & t ti Addressing risks • Reputation/ license to operate p p • Long-term skillset to grow the business • Integration of new employees
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