Full-year results & proposed acquisition of Initial Facilities Twelve T l months th ended d d 31 December 2013 Adrian Ringrose, Chief Executive Tim Haywood, Group Finance Director
Delivering our strategy Strategy FY 2013 results IF Acquisition Building Strong Core Increased service offering businesses Revenue +12% and capabilities Headline pre-tax profit +8% Capturing related expansion opportunities…
Tim Haywood
Income statement million 2013 2012 Revenue 2,192.6 1,958.4 +12% Total operating p gpprofit 86.7 . 78.4 . +11% Interest (5.6) (3.1) Headline profit 81.1 75.3 +8% Amortisation of intangible assets (8.9) (6.5) Exceptional items…
Segmental g analysis y million 2013 2012 Revenue TOP* TOP Margin Revenue TOP* TOP Margin % growth in TOP Support Services -UK UK 1 196 6 1,196.6 56 0 56.0 4 7% 4.7% 1 118 1 1,118.1 44 3 44.3 4 0% 4.0% +26% 26%…
Segmental analysis million 2013 2012 Revenue TOP* TOP Margin Revenue TOP* TOP Margin % growth in TOP Support Services -UK UK 1 196 5 1,196.5 56 0 56.0 4 7% 4.7% 1 118 1 1,118.1 44 3 44.3 4 0% 4.0% +26% 26% -International…
Segmental g analysis y million 2013 2012 Revenue TOP* TOP Margin Revenue TOP* TOP Margin % growth in TOP Support Services -UK UK 1 196 5 1,196.5 56 0 56.0 4 7% 4.7% 1 118 1 1,118.1 44 3 44.3 4 0% 4.0% +26% 26%…
Segmental g analysis y million 2013 2012 Revenue TOP* TOP Margin Revenue TOP* TOP Margin % growth in TOP Support Services -UK UK 1 196 5 1,196.5 56 0 56.0 4 7% 4.7% 1 118 1 1,118.1 44 3 44.3 4 0% 4.0% +26% 26%…
Segmental g analysis y million 2013 2012 Revenue TOP* TOP Margin Revenue TOP* TOP Margin % growth in TOP Support Services -UK UK 1 196 5 1,196.5 56 0 56.0 4 7% 4.7% 1 118 1 1,118.1 44 3 44.3 4 0% 4.0% +26% 26%…
Segmental g analysis y million 2013 2012 Revenue TOP* TOP Margin Revenue TOP* TOP Margin % growth in TOP Support Services -UK UK 1 196 6 1,196.6 56 0 56.0 4 7% 4.7% 1 118 1 1,118.1 44 3 44.3 4 0% 4.0% +26% 26%…
Group interest charge million illi 2013 2012 G Group nett iinterest t t payable bl (4 8) (4.8) (6 6) (6.6) Investments sub debt interest receivable 0.6 5.4 Pension finance charge (1.4) (1.9) Net interest charge (5.6)…
Exceptional items million illi 2013 Exit Indian construction associate (5 1) (5.1) Net profit on disposal of PFI assets 1.5 Paragon earnout charge (0.5) Net Exceptional charge (4.1) Redefining the future for people and…
Taxation million 2013 2012 Profit Tax Rate Profit Tax Rate Total per income statement 68.1 (13.1) 19.2% 179.8 (10.6) 5.9% Gross profit on disposal of PFI (3.6) - - (114.9) - - Disposal Interserve India 5.1 - - - - - Less : Joint…
Balance sheet summary million 31 Dec 30 June 31 Dec 2013 2013 2012 Goodwill and intangible assets 286.6 277.7 265.8 Property, plant and equipment 155.9 148.2 137.8 Joint Ventures and associates 94.5 84.7 84.2 Assets held for…
Movement in net cash / (debt) Free cashflow of 24.0m Redefining the future for people and places 15
Cash flow million 2013 2012 Group JVs and Total Total Associates Total operating profit 69.4 17.3 86.7 78.4 Depreciation & amortisation 33 8 33.8 - 33 8 33.8 29 3 29.3 Net capital expenditure (33.7) - (33.7) (14.9) Dividends in…
Banking facilities Previous 250m facility replaced with: 200 club 200m l b ffacility ilit until til F February b 2019 One 50m bilateral facility until February 2016 200m bridge facility until February 2016 Aggregate 450m of…
IAS 19 Pensions million illi 2013 2012 Defined benefit obligations (826.9) (799.3) Scheme assets 819.2 698.2 Total deficit (7.7) (101.1) Deferred tax thereon 1.8 23.3 Net deficit (5.9) (77.8) Redefining the future for people…
Acquisitions and disposals Cash Headline Pension EPS funding 2.7p Disposals p 119m 55m Acquisitions 94m 4.0p No change Net movement 25m 1 3p 1.3p 55m Redefining the future for people and places 19
Summary y Strong trading performance 11% growth in Group operating profit UK Support Services achieved their margin target with 5.1% 5 1% margin in the second half of 2013 Strong profit growth in Equipment services, stable margins…
Adrian Ringrose g
Support pp Services UK BBC, MediaCityUK, Salford Interserve Working Futures Advantage Healthcare University of Sussex
Support pp Services UK Good work winning and revenue growth Won 1.1bn of new work Divisions future workload stable at 5.1bn (FY 2012: 5.2bn) Revenues +7% at 1,196.6m (FY 2012: 1,118.1m) Patient Hotel, London 5% margin g…
Support Services UK work winning in FY 2013 New public sector clients & contracts: University of Sussex Department for Work & Pensions Leicester Partnership NHS Trust London Borough of Southwark Alder Hey Childrens NHS Foundation…
Support pp Services International TOCO, Oman - rig moving Habib Bank, Dubai - refit Adyard, UAE - fabrication Monte Carlo Beach Club, Abu Dhabi - FM
Support pp Services International Revenues* increased to 100.5m (FY 2012: 31.3m) Operating profit increased to 4.1m (FY 2012: 3.7m) Good strategic progress & integration of TOCO and Adyard acquisitions. p Madina and TOCO results…
Support Services International - work k winning i i iin FY 2013 New clients & contracts: Habib Bank Oasis Hospital Monte Carlo Beach Club Qatar Q t National N ti lB Bank k Doha Festival City ZADCO Movenpick Hotels Client…
Support Services - medium t term outlook tl k UK: Future workload kl d off 5 5.1bn 1b Maintain stable margins Organic growth through work-winning, extending relationships and market extension. Supporting S ti client li t…
Construction UK W t Yorkshire West Y k hi P Police li HQHQ, W Wakefield k fi ld Sil Silverstone U University i i T Technical h i lC College ll Haymarket, Edinburgh Jaguar Land Rover Engine Manufacturing Centre, West…
Construction UK Solid future workload of 1.0bn (FY 2012: 0.9bn) Stable margins g within expected p range. g Resilient performance against mixed market conditions The Sutton Academy, y, St Helens Strong repeatt b St…
Construction UK work winning FY 2013 New clients & contracts Allia Defence Infrastructure Organization South East & South West Water Affinity Water Cornwall Council Client development Jaguar Land Rover Viridor Highways Agency…
Construction International Jumeirah beach resort, Dubai Sur Independent Power Project, Oman Mall of the Emirates, UAE Hyatt Hotel, Dubai
Construction International Future workload: FY 2013 199m (FY 2012: 162m) UAE showing signs of recovery, recovery particularly commercial and leisure developments Steady performance in Oman Ongoing g g margin g pressures p…
Construction International - work k winning i i iin FY 2013 New clients & contracts: Dubai Festival City General Electric Arabtec Construction Oasis Hospital Hyatt Regency Hotels Qatar & Dubai National Banks Qatar Islamic Bank…
Construction - medium term outlook tl k UK Well-placed to take advantage of market improvements through 2014 Diversifying our service offering (Paragon (Paragon, Haymarket Haymarket, energy from waste) Managing strong client…
Equipment q p Services West Kowloon Terminus, Hong Kong Mecca Mosque, Saudi Arabia Jeddah Sewage works, Saudi Arabia Ljoen Bridge near Alsesund, Norway
Equipment Services High operational gearing helping to drive d ve st strong o g margin a g improvement, p ove e t, 2013 TOP 20.1m (FY 2012: 16.0m) Exploiting our engineering expertise & customer t service i iin existing i…
Equipment Services - medium d term outlook l k Further improvement in performance as business focuses on margin a g improvement p ove e t Benefitting from global economic upward trends Well-targeted geographic expansion and…
Summary Resilient performance across the Group in mixed market conditions Substantial gains in both revenue and headline profit Good operational and strategic progress Acquisitions extended our capabilities and integration…
Proposed P d acquisition i iti off IInitial iti l Facilities
Introduction to Initial Facilities 542.2m revenue and operating profit 25.6m (2013A), representing a margin of 4.7% c25,000 employees 22,000 based in UK and Ireland 3,000 based in Spain Broad customer base within the private…
Compelling p g strategic g rationale Increased scale and focus with a stronger, more visible market presence Significantly broader addressable market Greater breadth of services and capabilities Synergy opportunities…
Complementary p y capabilities p Combined Catering 9 999 999 Security 99 99 999 Cleaning 999 999 999 N G 99 99 999 C E O F F E R I N Reception Grounds Maintenance 99 99 999 Mechanical & Electrical 999 99 999 S…
Summary A complementary Facilities Business with operations principally in the UK Will drive future growth in large and attractive markets Builds on strong core business consistent with strategy Cash consideration of 250m (9.8x…
Questions
Appendix 1 Interserve revenue and workload
Substantial future workload Redefining the future for people and places 47
Strong near-term revenue visibility bl Redefining the future for people and places 48
Strong platform for growth Group revenue mix by sector Group revenue mix by type Segmental operating profit - by activity Segmental operating profit by geography Redefining the future for people and places 49
Divisional revenue analysis Revenue mix by sector Support Revenue mix by sector Services UK Construction UK Revenue mix by sector Equipment Revenue mix by sector International Services Redefining the future for people and places…
Appendix 2 Acquisition of Initial Facilities
Proposed Acquisition of Initial Facilities Adrian Ad i Ringrose, Ri Chi Chieff E Executive ti Tim Haywood, Group Finance Director Redefining R d fi i ththe ffuture t ffor people and places February 2014
Proposed acquisition of Initial Facilities Services Business A complementary Facilities Services Business with operations principally in the UK Enhanced growth platform in large and attractive markets Builds on strong core…
Compelling strategic rationale Increased scale and focus with a stronger, more visible market presence Creates a top three player by revenue Clear opportunity to apply focus to a business that has been non core pp y pp y…
Introduction to Initial Facilities 542.2m revenue and operating profit 25.6m (2013A), representing a margin of 4.7%1 c25,000 employees 22,000 based in UK and Ireland 3,000 based in Spain Broad customer base within the private…
70bn market for UK Facilities Management Total and outsourced UK FM market1 l t d2 Regulated R 5bn Regulated2 3bn Private Public Private Public 40bn 25bn 25bn 14bn Total FM spend Total outsourced 70bn 42bn…
Outsourced market breakdown Outsourced market... ...by offering1 ...by delivery2 ...by supplier3 TFM Top 10 6bn providers Technical/ 12bn Hard Hard Single Single Services Services c.17bn 28bn Bundled Services…
Initial Facilities income statement 1 million 31Dec11 31Dec12 31Dec13 Revenue 558.0 563.9 542.2 2 Underlying EBITA 26.7 29.5 25.6 M i Margin 4 8% 4.8% 5 2% 5.2% 4 7% 4.7% Reported Operating Profit 13.3 15.9 8.8 A number…
Complementary p y capabilities p Combined Catering 9 999 999 Security 99 99 999 Cleaning 999 999 999 N G 99 99 999 C E O F F E R I N Reception Grounds Maintenance 99 99 999 Mechanical & Electrical 999 99 999 S…
Key Terms and Financing Structure Acquisition conditional on approval from shareholders at General Meeting on 17 March A Transitional Services Agreement (TSA) for the provision of certain services relating to IT, payroll, g ( ) p g…
Synergies and integration plan Transaction expected to generate pre tax cost synergies of approx 5m per annum (FY15) Transaction expected to generate pretax cost synergies of approx 5m per annum (FY15) Cost savings to arise in the…
Summary and Outlook Strong set of results UK Support Services division performing well with improving margins and strong outlook Expect to deliver further progress in 2014 with revenue and margin growth Remain confident in medium…
Timetable A i iti Acquisition Announce acquisition: 7:00am 28 February Post shareholder circular: 28 February General Meeting 17 March General Meeting: 17 March Completion of acquisition: 18 March Cashbox Placing Cashbox…
Q&A Redefining the future for people and places 64
Positions Interserve as one of the largest providers of support services in the UK Leading FM suppliers 2 500 2,500m 2,000m ue (m) 1,500m Revenu 1,000m 500m 0m Source: Credo Redefining the future for…
Investor relations contacts: Ian Bell 0118 9602284 Robin OKelly 0118 9320123 b ll i Ian.bellinterserve.com Robin.okellyinterserve.com
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