Objectives To provide a detailed insight into British Gas Services The unique capabilities of our business The extent of the opportunity in the UK Our strategy to exploit the opportunity
Chris Weston Managing Director, British Gas Services
Agenda Business B i overview i Market opportunity Our strategy Financial review Summaryy Q&A
Business overview
Business overview: Key facts Customers 4.5 million Products holdings 7.2 million Customer calls 14 million Call centres 5 Engineers 9,000 Jobs completed 9.6 million Parts P t used d 6 3 million 6.3 illi Turnover 2006 1.1…
Business overview: Products and brands Gas service, repair & Electrical service, repair & Plumbing & drains repair installation improvements Central Heating Care Plumbing & Drains Care Home Electrical Care Gas Appliance Care…
Business overview: Fulfilment model If the required parts are on the van: Customer Call Centre Engineer visits Completes Job Re-orders parts 24 x 7 x 365 customer using parts in van used on Laptop Breakdowns repaired on first…
Business overview: Fulfilment model If the required parts are not on the van: Customer Call Centre Engineer visits Orders parts from NDC processes 24 x 7 x 365 customer NDC order Overnight to 720 Engineer collects Engineer…
Market opportunity
Market opportunity: 6bn UK home services market Electrical Central Heating Ser ices Services 1 8bn 1.8bn Installation % 20 % 20 10 10 0 1.2bn 0 Other 6bn 0.6bn 0 6bn 0.6bn Plumbing & Drains Central Heating % 20 Service &…
holds Market opportunity: Gas central heating 7.9 million 25 Million househ No gas central heating 3.7m 20 Social housing 15 Private rental 1.7m 10 Owner occupier 5.9m 2.0m 5 Households with care contracts Households…
holds Market opportunity: Plumbing and drains 11.7 million 25 Shared / no drains Million househ Social housing 1.4m 20 3.7m P i t rental Private t l 15 3.4m 10 Owner occupier 8.3m 5 Households with care contracts…
holds Market opportunity: Home electrical 15 million 25 Million househ Social housing/other 1.0m 0.8m 20 3.6m P i t rental Private t l 15 11.4m 10 Owner occupier 5 Households with care contracts Households with…
Market opportunity: Central heating installation BGS volume share: 18% Young working indebted Affluent empty nesters housand installatiions 550 500 450 141k 400 176k 350 Th 300 Low affluence elderly Gilt edged lifestyles…
Market opportunity: Energy efficiency The average households annual carbon footprint is around 21 tonnes of CO2 25% of the footprint comes from energy emissions Public Services Cl th Clothes E Energy Food & Drink Leisure &…
Our strategy
Our strategy Best at basics Reinforce and grow Our people
Our strategy: Best at basics Competitive advantage from customer focus 0 20 40 60 80 100 Helpful and friendly staff 100 Can be trusted 73 Safetyy reassurance and technical expertise p 71 Easy to deal with 70 Straightforward…
Our strategy: Best at basics Our formula for success MILLIONS of lifelong valued customers
Our strategy: Best at basics Our formula for success: Great personalised contact In 2006 we answered 14.2 million customer calls Winter 2006/07 average speed to answer less than 15 seconds Improved sales conversion Investment…
Our strategy: Best at basics Our formula for success: Fast seamless deployment In the peak 2006/07 winter week we completed 190,000 jobs 97% of customer appointments for service and repair in winter were attended tt d d without…
Our strategy: Best at basics Our formula for success: Experts welcomed into customers homes 7 training centres with around 25 million invested in training each year In 2006 completed over 9.6 million jobs in peoples p p homes…
Our strategy: Best at basics Our formula for success: Safe solutions right first time F ll qualified Fully lifi d C Corgii engineers i Near miss reporting commenced in 2006 Lost time incidents in the first quarter fell by 6%…
Our strategy: Best at basics Performance for winter 2006/07 Improvement Winter 2006/07 Year on Year Calls answered 7 1 million 7.1 Over 15% Calls Abandoned 3.8% Over 80% Average Speed to answer Under 15 seconds Over 80% Breakdowns…
Our strategy: Best at basics Our top competitive advantages 1 British Gas brand 1. 2. National coverage 3. Unique business model with leading edge field technology 4. 9,000 engineers with award winning training 5. Customer…
Our strategy: Best at basics Measuring success: The net promoter score NPS has just been adopted by the business and is improving British Gas Services (March 07) 40% Sample of other companies scores in 2006 Top performers Others…
Our strategy Best at basics Reinforce and grow Our people
Our strategy: Reinforce and grow Route 3 New business development p Develop adjacent Energy efficiency products to maximise Central heating installations customer value 3 Route 2 Maximise cross Improved channel efficiency…
Our strategy: Reinforce and grow Route 1 - Broaden appeal Route 3 New business development p Develop adjacent Energy efficiency products to maximise Central heating installations customer value 3 Route 2 Maximise cross Improved…
Our strategy: Reinforce and grow Route 1 - Broaden appeal: Develop products for new / existing customers Pre 2006 2006 2007 Risk averse Tailored Peace of Mind 27.8 % Total Peace of British G B Mind H HomeCare C Gas Sha…
Our strategy: Reinforce and grow Route 2 - Maximise cross product holding Route 3 New business development p Develop adjacent Energy efficiency products to maximise Central heating installations customer value 3 Route 2 Maximise…
Our strategy: Reinforce and grow Route 2 - Maximise cross product holding From: ers custome New HomeCare H C 24.25 / month customer 400 New c HomeCare 300 20.75 / month 27 / month On- HomeCare demand 200 16 /…
Our strategy: Reinforce and grow Route 2 - Maximise cross product holding: Integrated offerings 16m 16 2m Residential 4m Energy British Gas accounts Services accounts that are 10m Non Owner potential i l energy Occupier…
Our strategy: Reinforce and grow Route 3 - Develop adjacent products Route 3 New business development p Develop adjacent Energy efficiency products to maximise Central heating installations customer value 3 Route 2 Maximise…
Our strategy: Reinforce and grow Route 3 - Develop adjacent products: Central Heating Installations Large market: 1.8 billion Completed 91k installs in 2006 Generated 264 million turnover in 2006 Has not had significant management…
Our strategy: Reinforce and grow Route 3 - Develop adjacent products: Central Heating Installations Gilt edged lifestyles Affluent empty nesters Budgeting families Young working indebted Low affluence elderly 32k 141k 102k 176k…
Our strategy: Reinforce and grow Route 3 - Develop adjacent products: Energy Efficiency B iti h G British Gas E Energy Savers S R Report t 1.8m customers completed the report in 2006 Now N h hold ld d data t on 6% off the…
Our strategy: Reinforce and grow Route 3 New business development p Develop adjacent Energy efficiency products to maximise Central heating installations customer value 3 Route 2 Maximise cross Improved channel efficiency…
British Gas Services Strategy Best at basics Reinforce and grow Our people
Our strategy: Our people People are our key asset: , Around 11,000 of our people p p visit customers in their homes each day y Our people answer 14 million calls a year We complete 9.6 9 6 million jobs in customers customers homes…
Our strategy: Our people Our path to becoming a world class people-centred organisation Clear vision & values The best players Motivation Spirit of Clear direction service Space to Clarity on talent definition and Individual grow…
Financial Overview Ch i Stern Chris St Finance Director, British Gas Services
Financial overview 2006 a year of transition Driving improved performance Future expectations
Financial overview: 2006 a year of transition 2006 2005 Turnover 1.1bn 1.0bn Operating Profit 102m 111m Operating Margin 9% 12% Operating Cashflow 83m 94m
Financial overview: 2006 a year of transition Results impacted by transition and challenging winter Separation from British Gas Residential Fixing our call centres Improving deployment St bili i our iinfrastructure Stabilising…
Financial overview 2006 a year of transition Driving improved performance Future expectations
Financial overview: Driving improved performance Maximise value of sales growth Improve margins through efficiency and cost control Investments to underpin growth g
Financial overview: Driving improved performance Maximise value of sales growth: Improving average product contribution L Leveraging i existing i ti iinfrastructure f t t reduces d unit it costt per product d t Higher…
Financial overview: Driving improved performance Maximise value of sales growth Improve margins through efficiency and cost control Investments to underpin growth g
Financial overview: Driving improved performance Improve margins: Engineer growth and flexibility 10 000 10,000 E i Engineer numbers b 9,000 8,000 7,000 6,000 5 000 5,000 4,000 2001 2002 2003 2004 2005 2006 2007 2008 2009…
Financial overview: Driving improved performance Improve margins: Engineer growth and flexibility Short term fluctuations balanced with Annual Safety Visit programme Servicing peaks are filled via internal flexibility and…
Financial overview: Driving improved performance Improve margins: Leverage our current infrastructure I Improve callll centre t and dddeployment l t efficiency ffi i General managers fully accountable for all activities…
Financial overview: Driving improved performance Improve margins: Cost efficiency programme I d Independent d t review i off operating ti model d l and dbbestt practice ti Cost reduction programme already announced Process…
Financial overview: Driving improved performance Maximise value of sales growth Improve margins through efficiency and cost control Investments to underpin growth g
Financial overview: Driving improved performance Key drivers of performance: Investments to underpin growth Marketing expenditure to stimulate growth Refresh and enhance our infrastructure Improve consistency of delivery Increase…
Financial overview 2006 a year of transition Driving improved performance Future expectations
Financial overview: Future expectations 2007 expected to produce strong growth Operating Profit 2004 - 2007 Actual Operating Profit Analyst consensus 150 m 100 50 0 2004 2005 2006 2007
Financial overview: Future expectations We have a sustainable platform for growth We will continue to grow our revenues through: Extending g the customer base Effective cross sell Product innovation We will also improve…
Summary
Exploiting opportunities and delivering our potential Significant future market potential Simple clear strategy Well positioned to exploit the opportunity
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