Annual results Year ended 31 st December 2010 Adrian Ringrose, Chief - - PowerPoint PPT Presentation
Annual results Year ended 31 st December 2010 Adrian Ringrose, Chief Executive Tim Haywood, Group Finance Director 9 March 2011 Overview Full year in-line, Strong second-half performance Strong financial position Confidence in Groups
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2010 2009 % growth £ million Revenue TOP*
Margin
Revenue TOP*
Margin
in TOP* Support Services 1,093.6 27.2
2.5%
1,010.2 22.1
2.2% +23%
Project Services – UK 740.0 22.4
3.0%
820.5 17.6
2.1% +27%
– International
10.7%
9.1% +13%
Equipment Services 139.9 14.4
10.3%
157.1 35.9
22.9%
Joint Ventures - PFI
Group Services (101.5) (20.0) (81.0) (17.7) 1,872.0 74.4
4.0%
1,906.8 85.7
4.5%
* Total Operating Profit
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£ million H1 2010 H2 2010 2010 2009 % growth Revenue 944.5 927.5 1,872.0 1,906.8
Total operating profit 31.8 42.6 74.4 85.7
Interest (1.8) (3.0) (4.8) (7.4) Headline profit 30.0 39.6 69.6 78.3
Operating margin 3.4% 4.6% 4.0% 4.5% Headline EPS 17.5p 25.3p 42.8p 49.7p
Dividend per share 18.0p 17.5p
+3%
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Sustainable medium-term margin c.5%
Operating margin
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1.8% 2.2% 1.7% 2.5% 2.9% 3.2%
0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% H1 2008 H2 2008 H1 2009 H2 2009 H1 2010 H2 2010
Sustainable medium-term margin c.2%
Operating margin
9 The Trusted Partner 6.5% 5.4% 6.6% 8.3% 8.9% 9.1% 10.7%
0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 2004 2005 2006 2007 2008 2009 2010
Sustainable medium-term margin c.7%
Operating margin
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Equipment Services - Revenue Mix
0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 120.0% H1 2007 H2 2007 H1 2008 H2 2008 H1 2009 H2 2009 H1 2010 H2 2010 Hire Sales/other
Sustainable medium-term margin c.15%
Equipment Services – Operating margin
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–––––––Investment –––––––
Sector Construction/ interim services Operating Made Remaining commitment Total Health Tunbridge Wells; Enniskillen UCLH; Carlisle; Newcastle
£9.2m £14.5m £23.7m
Education Derry; Down & Connor; Downpatrick; Sandwell; St Helens Holy Cross; Plymouth; Leeds BSF; Leeds 2; Leeds 3
£9.3m £8.6m £17.9m
Defence Corsham ATE
£7.0m
Custodial Peterborough; Ashford; Addiewell
£7.1m
Other Inland Revenue
£0.2m
Financially closed projects
£25.8m £30.1m £55.9m
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(25) (20) (15) (10) (5)
10 15 20 25 30
2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 2043 Year £ million
Return of cash Investments
50 100 150 200 250 4% 5% 6% 7% 8% 9% 10% 11% 12% Discount rate
£ million
Dec 2010 Dec 2009
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(£140m) (£120m) (£100m) (£80m) (£60m) (£40m) (£20m) £0m £20m
2 007 D e c 2 008 J u n 2 008 D e c 2 009 J u n 2 009 D e c 2 01 0 J u n 2 01 0 D e cNet debt Average
2007 Dec 2008 Jun 2008 Dec 2009 Jun 2009 Dec 2010 Jun 2010 Dec
H2 average: £30m Closing: £54m
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(£60.0m) (£40.0m) (£20.0m) £0.0m £20.0m £40.0m £60.0m £80.0m Opening net debt Operating profit Depreciation Net disposal proceeds Other operating Working capital JVs and associates Tax paid Extra pension contributions Dividends Acquisitions Closing net debt
Committed facilities available
Free cash flow generation of £43m
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£ million 2010 2009 Group JVs and Assocs
TOTAL
TOTAL Operating profit 43.4 30.5
73.9
85.7 Depreciation & amortisation 26.3
24.5 Net capital expenditure 9.5
(15.9) Less: associates and JVs profits
(30.5)
(29.1) Dividends from associates
32.1
17.6 Other non-cash (11.4)
(4.1) Working capital movement (21.5)
52.6
Operating cash flow 46.3 32.1 78.4 131.3
Pension deficit payments (26.7)
(15.5) Tax paid (6.3)
(15.7) Other (2.3)
0.8
Free cash flow 11.0 32.1 43.1 100.9
Dividends (24.8)
(24.5) Acquisition and investments (32.6)
68.6 Special pension contribution
Other non-recurring (2.2)
(11.6)
Movement in net debt (48.6) 32.1 (16.5) 71.9 Operating cash flow conversion % 107% 105% 106% 153.2%
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― Net debt : EBITDA < 3.0x
▪ 2010: 0.8x
― Interest cover > 3.5x
▪ 2010: 28.3x
Significant headroom/capacity to drive growth
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― US formwork and shoring £21.6m ― Indian construction £4.8m ― Oman services £0.5m
Geographic footprint expanded into large and growing markets
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45% reduction in IAS 19 retirement benefit obligation Driven by: Asset out-performance Cash contributions Change to CPI rather than RPI
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― Business responded well to internal restructuring ― Full year contribution from HSBC, Defra ― Grew existing relationships with BP, Sainsbury ― Won new business with William Hill
― Continue to expect c. £10m annualised benefit from 2010 actions ― MOU with central govt absorbed within current financial expectations
― Future workload of £4bn, £0.7bn re 2011 ― Opportunity pipeline c. £6bn ― UK public sector outsourcing opportunity ― Develop Middle East market
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Shell Pearl GTL facility, Ras Laffan Industrial City, Qatar
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St Charles Hospital, West London
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Wyaralong Dam, Queensland
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C A P A B I L I T Y T O D O U B L E E A R N I N G S P E R S H A R E O V E R 5 Y E A R S
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Approx. %
profit* Medium-term market growth rates
Outsourcing UK 30% 4% CAGR 2010-14 Outsourced Services (Source: MBD) Construction UK 25% 0% CAGR 2010-13 Addressable Market (Source: CFR) Construction International 30% 14% CAGR 2010-14 Weighted Average of Selected International Markets** (Source: BMI) Equipment Services 15% 10% - 14% Blend of International and UK Construction above
* Before Developments, Group Services ** Comprising: India, Qatar, Saudi Arabia, UAE, Oman, Australia
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2010 margin Sustainable medium-term margin trends Comment
Outsourcing UK 2.5%
Achieve level comparable to peer group Construction UK 3.0%
Return to historical trend Construction International 10.7%
Return to historical trend in Middle East (pre Dubai bubble) Equipment Services 10.3% c.15% Return to historical trend as global economy recovers
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200 300 400 500 600 700 800 900 1,000 1,100 1,200 1,300 1,400 1,500 1,600 1,700 End 2006 End 2007 End 2008 End 2009 End 2010 £ million 1 year forward future workload
81.6% 70.1% 79.2% 79.3% 73.5%
xx.x% - % of 1 year forward consensus revenue accounted for by 1 year forward future workload
2011 Contract Wins:
KPI of 70%
Note: Excludes our share of workload/revenues from international associates
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10 20 30 40 50 60 2005 2006 2007 2008 2009 2010
Pence per share
Headline EPS DPS 18% CAGR
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0% 20% 40% 60% 80% 100% 120% 2006 2007 2008 2009 2010 3 year rolling operating cash conversion
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Advise & Design Build & Replace Operate & Maintain Advise & Design Build & Replace Operate & Maintain Advise & Design Build & Replace Operate & Maintain Health
Defence
Infrastructure
Government
Commerce
Education
Key: S t rong Present Not e: Ticks denot e Int erserve management opinion
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