HY2015 Attractive growth fundamentals & opportunities Disciplined performance management Redefining the future for people and places 1
Overview Resilient underlying performance HY2015 Headline EPS 31.3p (+1%) Stable 7.6bn order book Strong gross operating cash flow ( 128.3m) Net debt 275.6m (1.6x EBITDA) Managed exit of Energy from Waste activities Attractive growth fundamentals & opportunities Impact in line with May guidance Outlook Strategic review proceeding as planned Disciplined performance management Improved YE2016 net debt guidance 300m- 320m Outlook for current year remains unchanged Further increase in interim dividend Redefining the future for people and places 2
Tim Haywood Redefining the future for people and places 3
Headlines million H1 2016 H1 2015 Revenue 1,570.6 1,526.6 +3% Total operating profit 62.9 61.6 +2% Interest (9.1) (8.3) Headline profit 53.8 53.3 +1% Gross operating cash flow 128.3 19.9 Net debt 275.6 297.9 Headline EPS 31.3p 31.0p +1% Dividend per share 8.1p 7.9p +3% Excl exited business Redefining the future for people and places 4
Income statement million H1 2016 H1 2015 Revenue 1,632.9 1,595.1 +2% Total operating profit 62.9 61.6 +2% Interest (9.1) (8.3) Headline profit 53.8 53.3 +1% Exited business and exceptional items (72.0) (2.8) Amortisation (15.6) (15.4) Profit / (loss) before tax (33.8) 33.7 Taxation (1.9) (4.4) Profit / (loss) after tax (35.7) 29.3 Minority interest (1.4) (0.5) Redefining the future for people and places 5
Support Services UK - Solid work winning m H1 2016 Revenue impacted by 2015 delays in public sector procurement driven by the election Revenue 899.3-4% TOP 1 36.7 Strong work winning 2016 1.0bn work won Margin development as guided (National Living wage impact) -8% Margin 4.1% -0.2bps Workload 2 5.7bn +2% 1 Total operating profit 2 %age change vs Dec 2015 workload US visiting forces Redefining the future for people and places 6
Construction UK - A diversified business m H1 2016 Revenue 468.3 +8% Focus on smaller (< 10m) contracts & repeat business Strong in period working capital performance Operating margin slightly up on H2 2015 TOP 1 4.5-32% Margin 1.0% -0.5bps Workload 2 1.4bn +2% 1 Total operating profit 2 %age change vs Dec 2015 workload Southampton Solent University Redefining the future for people and places 7
Exited business guidance unchanged m H1 2016 H1 2015 YE 2015 Revenue 62.3 68.5 145.9 Post tax impact (70.0) (1.0) (8.5) Net cash flow impact (52.8) (1.3) (10.4) Exited that line of business where we take contractual responsibility for process risk on the construction of energy from waste facilities 6 contracts within this portfolio, procured between 2012-15 and with aggregate revenue of 430m. Significant milestones to be completed in 2016 & 2017. Aggregate P&L impact inline with May trading update Redefining the future for people and places 8
International Support Services - Strong year on year progress m H1 2016 Revenue 1 147.2 +44% TOP 2 6.5 Good volume and margin growth in period Currently reduced workload & reduced visibility beyond 2016 but significant work being bid Implementing plans to right-size operations +62% Margin 1 4.5% +0.3bps Workload 3 205m -33% 1 Incl JVA revenue, margin adjusted for underlying JVA margin 2 Total operating profit 3 %age change vs Dec 2015 workload Adyard Redefining the future for people and places 9
International Construction Good growth & cash conversion m H1 2016 Revenue 1 141.0 +8% TOP 2 6.0 Strong operational performance with excellent cash conversion Positive workload growth Good market outlooks, UAE market strong +23% Margin 1 3.9% +0.6bps Workload 3 344m +16% 1 Incl JVA revenue, margin adjusted for underlying JVA margin 2 Total operating profit 3 %age change vs Dec 2015 workload Dubai Mall of the Emirates Redefining the future for people and places 10
Equipment Services Strong growth m H1 2016 Revenue 109.9 +5% TOP 1 23.5 Strong volume and margin growth Global business, high operational gearing Continuing to drive innovation (3D modelling, Ground shoring products) +26% Margin 21.4% +3.5bps 1 Total operating profit Salford Canal Redefining the future for people and places 11
Taxation million H1 2016 H1 2015 Profit Tax Rate Profit Tax Rate Subsidiary companies 44.5 (6.8) 15.3% 42.8 (8.0) 18.7% Joint Ventures and associates 9.3 - - 10.5 - - Headline profit 53.8 (6.8) 12.6% 53.3 (8.0) 15.0% Amortisation of intangible assets (15.6) 2.9 18.6% (15.5) 2.7 17.4% Exited Business and exceptional items (72.0) 2.0 2.8% (4.1) 0.9 22.0% Group companies effective rate (33.8) (1.9) - 33.7 (4.4) 13.1% Redefining the future for people and places 12
IAS19 Pensions million 30 June 2016 30 June 2015 Gross liabilities (982.6) (910.1) Insurance buy-in asset 353.1 370.3 Obligations net of insurance buy-in (629.5) (539.8) Other assets 604.0 574.1 Gross asset / (deficit) (25.5) 34.3 Increased gross liabilities driven by falling discount rate as bond yields fall Liabilities c35% matched with insurance buy-in asset Cash payments remain unchanged, next triennial valuation begins H1 2018 Redefining the future for people and places 13
Strong gross operating cash flow million H1 2016 H1 2015 Group JVs and Associates Total Headline total operating profit 53.7 9.2 62.9 61.6 Total Land disposal Midlands office consolidation 7.0-7.0 (7.0) Capex in (excess) of depreciation (3.1) - (3.1) (0.5) Dividends in excess / (deficit) of JVA profits - 5.4 5.4 (6.0) Other (4.1) - (4.1) (7.8) Movement in working capital 60.2-60.2 (20.4) Gross operating cash flow 113.7 14.6 128.3 19.9 Closing net debt (275.6) (297.9) Redefining the future for people and places 14
Strong gross operating cash flow million H1 2016 H1 2015 Group JVs and Associates Total Headline total operating profit 53.7 9.2 62.9 61.6 Total Land disposal Midlands office consolidation 7.0-7.0 (7.0) Capex in (excess) of depreciation (3.1) - (3.1) (0.5) Dividends in excess / (deficit) of JVA profits - 5.4 5.4 (6.0) Other (4.1) - (4.1) (7.8) Movement in working capital 60.2-60.2 (20.4) Gross operating cash flow 113.7 14.6 128.3 19.9 Closing net debt (275.6) (297.9) Redefining the future for people and places 15
Strong gross operating cash flow million H1 2016 H1 2015 Group JVs and Associates Total Headline total operating profit 53.7 9.2 62.9 61.6 Total Land disposal Midlands office consolidation 7.0-7.0 (7.0) Capex in (excess) of depreciation (3.1) - (3.1) (0.5) Dividends in excess / (deficit) of JVA profits - 5.4 5.4 (6.0) Other (4.1) - (4.1) (7.8) Movement in working capital 60.2-60.2 (20.4) Gross operating cash flow 113.7 14.6 128.3 19.9 Closing net debt (275.6) (297.9) Redefining the future for people and places 16
Strong gross operating cash flow million H1 2016 H1 2015 Group JVs and Associates Total Headline total operating profit 53.7 9.2 62.9 61.6 Total Land disposal Midlands office consolidation 7.0-7.0 (7.0) Capex in (excess) of depreciation (3.1) - (3.1) (0.5) Dividends in excess / (deficit) of JVA profits - 5.4 5.4 (6.0) Other (4.1) - (4.1) (7.8) Movement in working capital 60.2-60.2 (20.4) Gross operating cash flow 113.7 14.6 128.3 19.9 Exited Business (52.8) - (52.8) (1.3) Gross operating cash flow incl Exited Business 60.9 14.6 75.5 18.6 Closing net debt (275.6) (297.9) Redefining the future for people and places 17
Net debt and dividend Reduced net debt Net debt 275.6m (Dec 2015 308.8m) Net debt : EBITDA 1.6x (1.8x Dec 2015) Improved YE2016 guidance 300m- 320m Secure and increasing dividend DPS 8.1p (+3%) 3.9x covered by Headline EPS, well covered by free cash flow Redefining the future for people and places 18
Adrian Ringrose Redefining the future for people and places 19
Key markets overview UK Outsourcing Market size & outlook Clients and capabilities Construction UK Focus on core competencies Existing workload Future outlook Middle East Strong operations Equipment Services A global player Redefining the future for people and places 20
Significant UK FM market 70bn UK FM market c60% outsourcing penetration Similar penetration private/public /regulated segments Expected market growth c4% p.a. Source: Credo Redefining the future for people and places 21
Strong UK FM pipeline +35% Figures excl Frontline Service operations and contract job works Bidding opportunities c35% up on H1 2015 Forward FM workload of 5.2bn (+3% vs Dec 2015) Redefining the future for people and places 22
Growing Frontline Services market Substantial government spend Continued outsourcing anticipated Integrated Interserve offering Increasingly important with the devolution agenda Source: Credo bn data represents government resource and capital expenditure. DWP excludes direct benefits costs Redefining the future for people and places 23
Support Services UK - Broad existing client base Diverse service offering Continuing to exploit new markets Deep customer knowledge Splits represent H1 revenues Redefining the future for people and places 24
Support Services UK - Our proposition What we offer Productivity gains Business process change Efficient resource allocation Our differentiators Breadth of provision (blue & white collar) Deep domain knowledge and experience Smart use of data Redefining the future for people and places 25
Construction UK - Focus on core competencies Diversified client base Focus on smaller, simpler projects c 2.6bn of tenders submitted or in preparation c50% of this Health / Education / Local government Splits represent H1 revenues Redefining the future for people and places 26
Construction UK Large portfolio of contracts 300-400 active contracts at a time Average contract size < 10m. Constitutes >40% of workload value c25% of work sourced via frameworks Redefining the future for people and places 27
Construction UK Strategic direction Energy from Waste business exited Lessons learned The future Risk appetite reduced Good spread of project size / complexity in existing order books Good outlook in core markets Redefining the future for people and places 28
Middle East Strong operations CAGR 23.2% History of delivery Strong H1 2016 performance Diversified exposure across Middle East Redefining the future for people and places 29
Equipment Services a global player CAGR 29.6% Leading global player Strong track record of growth Nimble in seizing market opportunity Well diversified Well invested, c 26m net capex invested in the last 12 months Driving innovation, driving margin Strategic review proceeding as planned Hong Kong - West Kowloon Redefining the future for people and places 30
Summary and outlook Expectations unchanged albeit near term uncertainty brings both risks and opportunities Long term growth drivers intact Demographic changes Infrastructure investment Increased public sector outsourcing Majority of the business performing well Headline EPS growth Exited business impacts isolated & controlled Continued dividend growth Redefining the future for people and places 31
Questions Redefining the future for people and places 32
Appendix 1 Supplementary financial disclosures Redefining the future for people and places 33
Segmental analysis million H1 2016 H1 2015 Support Services Revenue TOP* Margin Revenue TOP* Margin % growth in TOP -UK 899.3 36.7 4.1% 933.1 40.0 4.3% -8% -International 113.1 6.5 4.5% 74.2 4.0 4.2% +62% Construction -UK 468.3 4.5 1.0% 432.2 6.6 1.5% -32% -International - 6.0 3.9% - 4.9 3.3% +23% Equipment Services 109.9 23.5 21.4% 104.2 18.6 17.9% +26% Group Services (20.0) (14.3) (17.1) (12.5) Ongoing businesses 1,570.6 62.9 4.0% 1,526.6 61.6 3.8% +2% *Total operating profit Excl exited busineses Redefining the future for people and places 34
Balance Sheet million 30 June 2016 30 June 2015 Goodwill and intangible assets 514.2 525.9 Property, plant and equipment 232.6 206.9 Joint Ventures and associates 126.7 119.6 Working capital (123.4) (94.0) Pension asset / (deficit) (25.5) 34.3 Cash / (net debt) (275.6) (297.9) Net assets 449.0 494.8 Redefining the future for people and places 35
Investment Portfolio million 30 June 2016 Addiewell Prison Justice 2.9 Haymarket Property 23.6 Scottish National Blood Transfusion Services Health 1.6 Alder Hey Health 3.3 Invested 31.4 Committed 30.4 Committed and invested 61.8 Redefining the future for people and places 36
Appendix 2 Workload and revenue Redefining the future for people and places 37
Substantial future workload Redefining the future for people and places 38
Strong near-term revenue visibility Redefining the future for people and places 39
Diverse customers Group revenue mix by sector Redefining the future for people and places 40
Revenue mix by sector Support Services UK Construction UK Redefining the future for people and places 41
Revenue mix by sector International Equipment Services Redefining the future for people and places 42
Strong Platform for Growth Operating profit by activity Operating profit by geography Redefining the future for people and places 43