Slide 1: A record year of delivery; entering new Facilities Transformation Three-Year Plan
A record year of delivery; entering new ‘Facilities Transformation’ Three-Year Plan with good momentum Results presentation for the year ended 31 March 2024 6 June 2024 THE EXCEPTIONAL, EVERY DAY
Slide 2: FY24 – Third consecutive year of record performance
FY24 – Third consecutive year of record performance1 Financial Growth Engagement Capital Performance Indicators Indicators Allocation +11% +44% +60 £66m Revenue: £4,511m Wins/renewals3: £6.2bn Customer NPS (up 18pts) M&A spend5 +30% +18% 63% £114m Op. profit2: £210m Order book: £11.4bn Employee enga
Slide 3: Financial update
Insert Picture Financial update Simon Kirkpatrick Chief Financial Officer THE EXCEPTIONAL, EVERY DAY
Slide 4: Headlines: Record revenue and profit drive strong free cash flow
Headlines: Record revenue and profit drive strong free cash flow Headlines (£m) FY24 FY23 % change • Revenue growth of 11.2% driven by strong organic growth of 7.1% Revenue1 4,511 4,055 +11.2 • Ongoing margin enhancement Operating profit before other items 210.2 162.1 +29.7 initiatives underpin oper
Slide 5: Revenue: Good revenue growth across all divisions
Revenue: Good revenue growth across all divisions, underpinned by projects and acquisitions Revenue1 (£m) FY24 FY23 % change • BS growth due to retail crime related work, pricing and Business Services (BS) 1,490 1,414 +5.4 acquisitions, partly offset by completion of short-term Technical Services (T
Slide 6: Revenue: Strong organic growth supplemented by acquisitions
Revenue: Strong organic growth supplemented by acquisitions £m 166 4,511 177 4.1% 194 4.3% 4,055 (81) 4.8% (2.0%) Organic growth 7.1% 11.2% 1 FY23 Completed Net wins, Pricing Acquisitions FY24 short-term public projects and sector contracts other trading 6 1 Includes Landmarc consolidation impact of
Slide 7: Operating profit: 29.7% profit improvement driven by all divisions
Operating profit: 29.7% profit improvement driven by all divisions Operating profit1 (£m) FY24 FY23 % change • BS profit increase from MEIs, retail crime work and acquisitions, more Business Services (BS) 97.0 92.3 +5.1 than offset headwinds from completed higher margin, short- Technical Services (T
Slide 8: Operating profit: Project work and margin enhancement initiatives
Operating profit: Project work and delivery of margin enhancement initiatives drive profit improvement £m 40.3 (6.2) 9.7 210.2 19.9 162.1 (15.6) +£27.9m Target Operating Model +£4.6m Interserve Synergies +£7.8m Digital Supplier Platform and Operational Excellence FY23 Completed Net wins, Margin Net
Slide 9: EPS: 29.5% improvement from higher profit, reduced financing costs, buybacks
EPS: 29.5% improvement from higher profit, reduced financing costs, and share buybacks £m FY24 FY23 % change • Benefit from lower cost debt facilities1, and greater returns from Operating profit 210.2 162.1 +29.7 cash pooling reduce net finance Net finance costs (9.4) (11.5) (18.3) costs by £2.1m Pr
Slide 10: Inflation: 97% of cost inflation passed through to customers
Inflation: 97% of cost inflation passed through to customers in FY24, estimated >90% pass through in FY25 FY24 cost inflation impact vs FY23¹ • Labour markets remain Total cost inflation £(183)m competitive, but applications per Revenue pricing £177m role are increasing, and attrition has FY24 net P
Slide 11: Cash flow: Free cash inflow of £158m
Cash flow: Free cash inflow of £158m boosted by higher profit, and working capital improvements • Strong profit generation in FY24 drives FCF Cash flow (£m) FY24 FY23 to more than double to £157.6m Operating profit before other items 210.2 162.1 • Cash other items of £37.6m from MEIs and Add back: d
Slide 12: Balance sheet: Strong and stable balance sheet
Balance sheet: Strong and stable balance sheet… £m FY24 FY23 • Increase in net debt due to capital allocation actions undertaken and leases increase Closing net (debt) (81) (44) • Covenant leverage remains at zero Average daily net (debt) (161) (84) • Debtor days consistent with FY23 Leverage ratio
Slide 13: Capital allocation: enabling investment in growth and shareholder returns
Capital allocation: …enabling investment in growth, and increasing shareholder returns FY24 FY25-27 4.0p dividend Payout ratio 1 Dividend policy 33% pay-out ratio 30-40% Market purchase of 20m 2 No share dilution shares for incentive c.15m shares p.a. schemes for £20m £66m of acquisitions c.£75m of
Slide 14: Summary: Good progress towards medium term targets
Summary: Good progress towards medium term targets expected to continue in FY25 FY27 Financial Targets FY24 Progress (2023 Capital Markets Event) Momentum from 11.2% revenue growth, driven by Projects 70 basis point margin improvement towards >5% target High single digit revenue growth (to c.£5.6bn)
Slide 15: Strategic update – Facilities Transformation (FY25 – FY27)
Strategic update – Facilities Transformation (FY25 – FY27) Phil Bentley Chief Executive THE EXCEPTIONAL, EVERY DAY
Slide 16: Our Facilities Transformation plan
Our ‘Facilities Transformation’ plan is based on satisfying our customers’ evolving needs; delivering our pillars of growth; and meeting our financial targets Evolving customer needs Key pillars of growth Financial targets Superior financial returns High single digit revenue growth Infill M&A Operat
Slide 17: Demand for Facilities Transformation is accelerating across service lines
Demand for Facilities Transformation is accelerating across our service lines Engineering Projects Security Cleaning & Hygiene Maintenance Regulatory Tighter building Energy independence, Martyn’s Law, Building HSE and chemical use changes codes, MEES1 carbon reporting and Fire Safety Acts regulatio
Slide 18: Entering new Three-Year Plan with good momentum
We are entering our new Three-Year Plan with good momentum, having made significant progress against all three pillars of growth in FY24… Key Account growth Projects upsell Infill M&A Linx International Security consulting RHI Industrials April 2023 Fire & Security May 2023 G2 Energy HV and battery
Slide 19: Accelerating growth through targeted initiatives
…and we are accelerating growth through targeted initiatives Infill M&A Engineering, Decarbonisation, Fire & Security c.£75m p.a. spend Spain - Engineering/Security expansion >£200m revenue p.a. InfillvM&A Projects upsell Build out consult & design capabilities Value chain/margin gains Enhance Proje
Slide 20: Leverage scale and market leadership for cost-to-serve advantage
We will continue to leverage our scale and market leadership to secure cost-to-serve advantage and build a clear path to >5% operating margin #1 UK FM market leader Management actions 13% market share >60,000 expert colleagues Engineering across the UK Maintenance Security In-contract cost optimis
Slide 21: Data-driven intelligence: Aggregating Workflow and Workforce data
Data-driven intelligence: Aggregating Workflow and Workforce data Intelligent Intelligent Engineering Cleaning & Maintenance Hygiene Intelligent Intelligent Projects Security 21
Slide 22: Intelligent Engineering Maintenance
Intelligent Engineering Maintenance: Optimising asset performance in critical environments Our technology-led solutions Our unique access to data Our Technology Hub Direct access to complete Forté operational platform asset histories with data on Remote monitoring (TSOC) individual assets and asset
Slide 23: Intelligent Projects: Transforming estates and path to Net Zero
Intelligent Projects: Transforming estates and accelerating the path to Net Zero Our technology-led solutions Our industry-leading ESG credentials Our Technology Hub New ‘Emissions Intelligence’ Low risk: 10.5 Score: A platform Scope 1, 2 and 3 Platinum Score: AA emissions reporting Customer benefit
Slide 24: Intelligent Security
Intelligent Security: Driving risk and demand-based protection of people, property and assets Our technology-led solutions Our unique access to data Our Technology Hub Access to real-time incident Merlin 24/7 Protect data and up-to-date retailer operational platform shrink data Remote monitoring (IS
Slide 25: Intelligent Cleaning & Hygiene
Intelligent Cleaning & Hygiene: Delivering demand-led and flexible cleaning services Our technology-led solutions Our unique access to data Our Technology Hub Access to detailed facility usage Merlin Connect data and accurate staff and robot operational platform productivity measures Robotic cleanin
Slide 26: Mitie: the recognised industry leader
Mitie: the recognised industry leader Best-in-class ESG ratings and Net Zero 2025 target ‘Social Value’ with local apprenticeship programmes and engineering graduate scheme In-house line management academy with focus on frontline incentives MyMitie app to increase employee engagement (63%) t
Slide 27: Summary: Facilities Transformation Three-Year Plan
Summary: Our Facilities Transformation Three-Year Plan will deliver superior financial returns 1 Accelerating Superior financial returns Facilities growth Transformation High single digit revenue growth Transforming Insights and Decision-Making Operating profit margin >5% 2 Cost to serve EPS growth
Slide 28: Appendices
Appendices
Slide 29: Business Services
Business Services Increase / £m FY24 FY23 % change (decrease) Security 823 782 41 +5 Cleaning 407 390 17 +4 Spain 114 102 12 +12 Waste 77 74 3 +4 Landscapes 69 66 3 +5 Total revenue 1,490 1,414 76 +5 Operating profit before other items 97.0 92.3 4.7 +5.1 Operating margin before other items, % 6.5% 6
Slide 30: Technical Services
Technical Services Increase / £m FY24 FY23 % change (decrease) Maintenance 795 770 25 +3 Projects¹ 531 384 147 +38 Total revenue 1,326 1,154 172 +15 Operating profit before other items 44.3 34.1 10.2 +29.9 Operating margin before other items, % 3.3% 3.0% +0.3ppt Total order book £1.5bn £1.6bn £(0.1)
Slide 31: Central Government & Defence
Central Government & Defence Increase / £m FY24 FY23 % change (decrease) Central Government 524 439 85 +19 Defence 414 389 25 +6 Total revenue 938 828 110 +13 Operating profit before other items 80.4 59.8 20.6 +34.4 Operating margin before other items, % 8.6% 7.2% +1.4ppt Total order book £3.2bn £2.
Slide 32: Communities
Communities Increase / £m FY24 FY23 % change (decrease) Local Government & Education 265 240 25 +10 Healthcare 275 250 25 +10 Care & Custody 217 169 48 +28 Total revenue 757 659 98 +15 Operating profit before other items 39.1 31.4 7.7 +24.5 Operating margin before other items, % 5.2% 4.8% +0.4ppt To
Slide 33: Return on invested capital (ROIC)
Return on invested capital (ROIC) £m FY24 FY23 % change Operating profit before Other Items 210.2 162.1 +30 Tax1 (39.7) (24.3) +63 Operating profit before other items after tax 170.5 137.8 +24 Invested capital2 645.0 543.1 +19 ROIC %3 26.4% 25.4% +1.0ppt 1Tax charge has been calculated at the effect
Slide 34: Invested capital (for ROIC)
Invested capital (for ROIC) Increase / £m FY24 FY23 % change (decrease) Net assets 473.7 421.7 52.0 +12 Add: Non-current liabilities 327.6 335.9 (8.3) (2) Current provisions 66.5 54.2 12.3 +23 Current private placement notes 30.0 - 30.0 nm Deduct: Non-current deferred tax assets (7.9) (20.4) 12.5 (6