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Capital Markets Update – Interserve

Interserve · Apr 30, 2014 · 86 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Capital Markets Update – Interserve – slide 1
    Full-year results Twelve months ended 31st December 2012 Adrian Ringrose, Chief Executive Tim Haywood, Group Finance Director Capital Markets Update 27 th February 2013 30 April 2013
  2. Capital Markets Update – Interserve – slide 2
    Who you will be meeting Adrian Ringrose Tim Haywood Chief Executive Group Finance Director Phil Clark Ian Hayes Business Development Operations Director Director George Franks Lord Adonis Managing Director Interserve…
  3. Capital Markets Update – Interserve – slide 3
    Todays itinerary 2010-2015 development Adrian Ringrose . SustainAbilities Tim Haywood The healthcare market Phil Clark UK outsourcing and infrastructure Lord Adonis Support Services and Construction International George…
  4. Capital Markets Update – Interserve – slide 4
    Outlook: 2010 versus 2012 2010 2012 2010 2012 Sustainable Sustainable Medium-term Medium-term medium-term medium-term growth rate growth rate margin trends margin trends Actual Outlook Actual Outlook Support Services 4% 4%…
  5. Capital Markets Update – Interserve – slide 5
    Support Services UK: Development since 2010 Strategic developments: Revenue/contract Client/account growth development Organic expansion into criminal justice rehabilitation Inorganic expansion into welfare and health Support…
  6. Capital Markets Update – Interserve – slide 6
    Support Services International: Development since 2010 Strategic developments: Revenue/contract Organic diversification into FM in UAE, development Qatar and Oman Inorganic expansion of training business (OTI) Organic diversification…
  7. Capital Markets Update – Interserve – slide 7
    Construction UK: Development since 2010 Strategic developments: Revenue/contract Continued focus on regional businesses and development national frameworks Cost base focus Product and services development (BIM/Passivhaus/PodSolve)…
  8. Capital Markets Update – Interserve – slide 8
    Construction International: Development since 2010 Strategic developments: Revenue/contract Cost base focus development Strengthened leadership Organic and inorganic expansion of interiors Selective contract up-scaling via JV…
  9. Capital Markets Update – Interserve – slide 9
    Equipment Services: Development since 2010 Strategic developments: Global fleet management Capex restraint and increased transfers Flexible operating model Back-office off-shoring to high skill/low cost geographies Geographical…
  10. Capital Markets Update – Interserve – slide 10
    Financial position Strong cash conversion (117%, 3 year rolling average) Disposed of the majority of our PFI portfolio for 179.5m realising significant latent value Materially reduced actuarial pension deficit from 224m to 95m…
  11. Capital Markets Update – Interserve – slide 11
    Group-wide developments Developing the Interserve brand Driving greater sustainability Account management Talent management Learning and development Health and Safety
  12. Capital Markets Update – Interserve – slide 12
    Summary We are delivering our aspiration by: Client & account development Good execution of contracts Accessing further growth markets Strong balance sheet Selective, accretive acquisitions (welfare, oil/gas, healthcare at home…
  13. Capital Markets Update – Interserve – slide 13
    Tim Haywood
  14. Capital Markets Update – Interserve – slide 14
    Sustainable performance commercial value Understanding and managing risk - technical, reputational Stewardship, resource scarcity, supply chain complexity, human capital management Improved reporting, better articulation of…
  15. Capital Markets Update – Interserve – slide 15
    Strategic approach, fully integrated into the business Key differentiator in the way we do business going forward Ambitious commitment, take a leadership position Launched 21st March
  16. Capital Markets Update – Interserve – slide 16
    What does mean A clear vision: to redefine the future for people and places Do the right thing, manage risks, realise opportunities Measure our impact on society and the environment Embed positive behaviour, achieve culture…
  17. Capital Markets Update – Interserve – slide 17
    4 Capitals Measure our impact beyond traditional financial metrics: Natural resources, drinking water, breathable air, energy, raw materials Social connections, benefits, roles, networks, employment, trust, belonging, wellbeing,…
  18. Capital Markets Update – Interserve – slide 18
    5 Outcomes 15 Goals 48 Targets
  19. Capital Markets Update – Interserve – slide 19
    Phil Clark Healthcare market
  20. Capital Markets Update – Interserve – slide 20
    AGENDA Introduction The Healthcare Market Interserve Strategy Non-Clinical Services Leicester Project Clinical Services Advantage Healthcare
  21. Capital Markets Update – Interserve – slide 21
    The Healthcare Market
  22. Capital Markets Update – Interserve – slide 22
    Market Growth in healthcare Legislation Regulation Compliance Enhanced Health & Social Monitor CQC Competition and Care Act 2012 Market Growth c.5-10% p.a CCGs Any Qualified Inspect and CSGs Provider regulate Enhanced NHS…
  23. Capital Markets Update – Interserve – slide 23
    Market Segmentation- our areas of focus Established growing FM Market in non-clinical services Growing community market in clinical services Non Clinical Clinical 15bn Community 5bn FM Market 50bn 25bn 15bn Secondary…
  24. Capital Markets Update – Interserve – slide 24
    Available Market to Interserve 2010 - 2015 2010 2013 2015 Non-Clinical 4.5bn 5bn 5.5bn Clinical 14bn 15bn 17bn
  25. Capital Markets Update – Interserve – slide 25
    Market Share and Competitor Dynamics Clinical Community market growing opportunity for outsourcing Non-clinical market developing larger integrated packages Clinical Community Services Non-Clinical Services 2.3bn c.1b…
  26. Capital Markets Update – Interserve – slide 26
    Interserve Strategy
  27. Capital Markets Update – Interserve – slide 27
    Interserve Strategy Non Clinical Services 5bn Service Capability Relationship Synergies Health Market Understanding Infrastructure Community 20bn Services 15bn
  28. Capital Markets Update – Interserve – slide 28
    Non-Clinical Services Leicester Project
  29. Capital Markets Update – Interserve – slide 29
    Leicester Pathfinder Project The Client Primary & Community Secondary Community MENTAL AND CCG ACUTE COMMUNITY The Opportunity Leicester Health Collaborative Hard Services Estates Community Care Cleaning Management…
  30. Capital Markets Update – Interserve – slide 30
    Our Commitment to Leicester 2013 2020 2013 2020 2013 2020 2013 2020 500,000m2 60% clinical care + 10% + 10% 380,500m2 Benchmark standards 36% for direct - 20% - 20% clinical care Estate Usage and Standards Costs…
  31. Capital Markets Update – Interserve – slide 31
    Leicester Value Proposition 20% of Total Budget 1bn 20% of Property Man. Spend 250m Interserve Saving Total Spend 130m Property Non Clinical Transformation
  32. Capital Markets Update – Interserve – slide 32
    Key features to our approach Aligned Commercials Complement Clinical not Compete Understanding Partner Approach Track records Guaranteed of delivery Savings Integrated Local Service Company Capability
  33. Capital Markets Update – Interserve – slide 33
    Leicester Growth Opportunities Other local NHS NHS Property Services customers Nottingham NHS Trust Regional Government Leicester City Council customers Leicester County Council Southampton New NHS Frameworks Leeds across…
  34. Capital Markets Update – Interserve – slide 34
    Clinical Services -
  35. Capital Markets Update – Interserve – slide 35
    Clinical Market Major Competitors Community 15bn BUPA Home Health - 195m A24 Group - 56m Allied Healthcare Group - 166m Serco - 60m Secondary Primary
  36. Capital Markets Update – Interserve – slide 36
    Market Potential... 2.5 2.0 1.5 Billions Currently Outsourced 1.0 In-House 0.5 - Paediatrics Immunology Dementia Renal Haematology
  37. Capital Markets Update – Interserve – slide 37
    Paediatric Sector Market potential Advantage current capability Market Fragmentation 90% undertaken by NHS Over 30% revenue through paediatric cases Over 200 registered private suppliers Prime provider in London and South East No…
  38. Capital Markets Update – Interserve – slide 38
    Advantage Customers and Services Revenue By Funding Type Revenue By Service Type 9% 35% 18% Health Insurance 55% Complex Private Client Palliative 73% 10% NHS Personal
  39. Capital Markets Update – Interserve – slide 39
    Top 50 Packages by type of Care Spinal Cord Acquired Brian Injury Neurological Complex Care Cancer Dystrophy Sclerosis Tracheoctomy Cerebal Palsy Learning and Disability Epilepsy Autism Dysphasia Dementia Personal Care…
  40. Capital Markets Update – Interserve – slide 40
    Advantage SWOT Specialism Current Competitor Growth Ease of Entry Rank Capability Strength Potential Paediatrics PPPP O PPPP PPP 1 Immunology PPPP O PPPP PP 2 Dementia PPPP OOO PPP PPPP 3 Renal PPP OO PPPP PPPP 4 Haematology PPP OO…
  41. Capital Markets Update – Interserve – slide 41
    Geographical reach Head office Branches
  42. Capital Markets Update – Interserve – slide 42
    Leicester Market opportunity for Advantage Leicester Annual Integrated Care Objectives Community Budget Above average infant mortality rates 75m 75m Paediatric Care Immunology Below average life Geriatric Renal expectancy 5m…
  43. Capital Markets Update – Interserve – slide 43
    Summary Healthcare outsourcing is a growing market (5-10%) and has significant potential for more Community and estate management are fastest developing Advantage Healthcare well positioned to take advantage of the Community…
  44. Capital Markets Update – Interserve – slide 44
    Questions
  45. Capital Markets Update – Interserve – slide 45
    Lord Adonis UK Outsourcing and Infrastructure
  46. Capital Markets Update – Interserve – slide 46
    Questions
  47. Capital Markets Update – Interserve – slide 47
    Coffee Break
  48. Capital Markets Update – Interserve – slide 48
    Construction and Support Services International: George Franks
  49. Capital Markets Update – Interserve – slide 49
    Geographical Reach
  50. Capital Markets Update – Interserve – slide 50
    Macro Economic Issues in the Middle East Oil and Gas price Population growth (2-6% vs UK 0.5%) Rapid urbanisation Arab Spring: Has resulted in an opening of the purse strings. Spend on housing, infrastructure, education & social…
  51. Capital Markets Update – Interserve – slide 51
    Net profit by activity 2010 Actual 2012 Actual 2015 Support Services Support Services Support Services Construction Construction Construction
  52. Capital Markets Update – Interserve – slide 52
    Net profit by geography 2010 Actual 2012 Actual 2015 K SA Oman Oman Oman UAE Qatar Qatar Qatar UAE
  53. Capital Markets Update – Interserve – slide 53
    Middle East: West comparison More traditional procurement routes, but developing Power centralised and autocratic. Benign dictatorships. Company ownership and investment rules Low tax Labour drawn from most advantageous sources on…
  54. Capital Markets Update – Interserve – slide 54
    Middle East businesses Construction International Support Services International 1981 Khansaheb Civil Engineering 2000 How United Services LLC (UAE) WLL (Qatar) 1981 Douglas OHI LLC (Oman) 2007 Madina Group WLL (Qatar) 1995…
  55. Capital Markets Update – Interserve – slide 55
    Construction International Market still tight in all 3 countries of operation Strategy to hold our nerve, avoid diving in and taking low margin/high risk work, maintain capabilities and wait for the upturn. UAE looks set to recover…
  56. Capital Markets Update – Interserve – slide 56
    Strategy Outcomes Buildings (Jumeirah Beach Residences) Civils (Al Furjan) Support Services Specialist Divisions (Ritz Carlton Hotel)
  57. Capital Markets Update – Interserve – slide 57
    Strategy Outcomes Construction (Sohar Court) Construction (Al Sukri) Civils (Sur IPP) Specialist (HSBC Fit-Out)
  58. Capital Markets Update – Interserve – slide 58
    Strategy Outcomes Construction (Barzan) Spacemaker (Barzan) Bionest Specialist Div. (Commercial Law Court)
  59. Capital Markets Update – Interserve – slide 59
    Support Services International: 2012 Two principal areas of operation, engineering and facilities services Expanded our reach acquisition of TOCO Grown our offering Shutdowns and increased customer base Senior team seconded in to…
  60. Capital Markets Update – Interserve – slide 60
    Engineering - Oil Demand
  61. Capital Markets Update – Interserve – slide 61
    Support Services International: 2015 Substantial investment: Total awarded value of oil and gas projects between 2010-2012 was 75bn. Total expected project award value 2013-2015 is 241bn.
  62. Capital Markets Update – Interserve – slide 62
    Middle East oil and gas fields
  63. Capital Markets Update – Interserve – slide 63
    Oil and Gas market value chain Value Chain Seismic / Decommis- Drilling Field Development Operations Reservoir sioning Reservois Oil Companies Project Drilling Management and Operations Engineering Main Contractors…
  64. Capital Markets Update – Interserve – slide 64
    The Oman Construction Company (TOCO) acquisition Acquired for 40m: Interserve majority ownership, local partner with minority interest. Services: Onshore, engineering, procurement and Construction (EPC), Shutdowns and maintenance.…
  65. Capital Markets Update – Interserve – slide 65
    TOCO Operations in Oman Mukhaizna Birba 65
  66. Capital Markets Update – Interserve – slide 66
  67. Capital Markets Update – Interserve – slide 67
    New Oilfield Construction Services Contract On 02nd April 2013 The Oman Construction Co. LLC (TOCO) was awarded an Oilfield Construction Services Contract to provide Oilfield Construction Services in the North of Oman by one of the…
  68. Capital Markets Update – Interserve – slide 68
    Support Services International Facilities Services market: Hard and soft services currently delivered through Khansaheb Group and How United Services. T/O Circa 13m p.a. We are demonstrating margin of 10%, and above, deliverable at…
  69. Capital Markets Update – Interserve – slide 69
    Support Services Service Delivery Portfolio - Current/Future TFM Managing Hard FM Design + Estate Marine Catering Airport Reception, Educational Medical Discretio- LOCATIONS Agent (PPM + Call Consultancy Infrastruc- Services Systems…
  70. Capital Markets Update – Interserve – slide 70
    Next Steps Development of the international business in the ME Sector UK UAE Oman Qatar KSA Construction Key = Established businesses Support Services Acquisitive Engineering = Test viability and market appetite Facilities…
  71. Capital Markets Update – Interserve – slide 71
    Summary Recovery in construction is coming, maintain and position to take advantage. Construction will continue to be a major part of our business. Expansion of support services (engineering and facilities) a strategic priority to…
  72. Capital Markets Update – Interserve – slide 72
    Equipment Services: Ian Hayes
  73. Capital Markets Update – Interserve – slide 73
    Interserve Equipment Services Strategy RMD Kwikform H1 2012 Highlights Outcomes Disposal of PFI Assets Frontline public services (Justice, Welfare, Building Strong Core Health) businesses Future Workload Energy-from-waste…
  74. Capital Markets Update – Interserve – slide 74
    Vision and Strategy We aspire to be the Best Formwork and Shoring Company in the World To manage a de-centralised portfolio of companies with a Divisional overlay that binds them together to: Operate accident free Live our values Be…
  75. Capital Markets Update – Interserve – slide 75
    H1 2012 Note -Strategy Insert photo of ShroudHighlights / roof over Hotel in Abu Dhabi so i Outcomes can talk to how we add value as part of next slide Disposal of PFI Assets Frontline public services (Justice, Welfare, Building…
  76. Capital Markets Update – Interserve – slide 76
    Drivers of the Business RMDk Value add Utilisation Margin Markets / competitors
  77. Capital Markets Update – Interserve – slide 77
    Where we were in 2010 EBIT 14.4m Utilisation 33.5% Margin 10.3% European recession Costs / Equipment action End of large projects in UAE and before Arab spring Market contraction South Africa Growth expected Asia USA acquisition…
  78. Capital Markets Update – Interserve – slide 78
    Where are we at end 2012 Revenue +19.7% EBIT 16.1m (+11.8%) Utilisation 44.3% (+32%) Transferred 41m of equipment in 2012 Saudi Arabia growth Reduced costs Europe Reorganised South Africa H2 2012 USA price growth New Territories,…
  79. Capital Markets Update – Interserve – slide 79
    H1 2012 Insert Photo Strategy of ME /Highlights Saudi projectOutcomes Disposal of PFI Assets Frontline public services (Justice, Welfare, Building Strong Core Health) businesses Future Workload Energy-from-waste Growth…
  80. Capital Markets Update – Interserve – slide 80
    H1 2012 Strategy Highlights Outcomes Disposal of PFI Assets Frontline public services (Justice, Welfare, Building Strong Core Health) businesses Future Workload Energy-from-waste Growth (Westbury/Glasgow/ Expand Peterborough)…
  81. Capital Markets Update – Interserve – slide 81
    H1 2012 Insert Photo Strategy Australia project Highlights Outcomes Disposal of PFI Assets Frontline public services (Justice, Welfare, Building Strong Core Health) businesses Future Workload Energy-from-waste Growth…
  82. Capital Markets Update – Interserve – slide 82
    H1 2012 Strategy Highlights Outcomes Disposal of PFI Assets Frontline public services (Justice, Welfare, Building Strong Core Health) businesses Future Workload Energy-from-waste Growth (Westbury/Glasgow/ Expand Peterborough)…
  83. Capital Markets Update – Interserve – slide 83
    Outlook to end 2015 Margin range c.15% Utilisation range c.50% Growth in ME , Qatar and Saudi Arabia Australasia Far East growth offsets some reduction in Australia Modest recovery Europe USA pricing level growth Infrastructure sector…
  84. Capital Markets Update – Interserve – slide 84
    Summary Building on client relationships and investing in new opportunities Optimising deployment of hire fleet equipment Improved Utilisation to c50% Pricing strength Medium term margin trend of 15%
  85. Capital Markets Update – Interserve – slide 85
    Questions
  86. Capital Markets Update – Interserve – slide 86
    Investor relations contact: Matt Hickman, Investor Relations Manager 0118 960 2280 matt.hickmaninterserve.com

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