Galliford Try Holdings Plc · LSE:GFRD
Galliford Try — Investor Day (May 2024)
84 slides from Galliford Try's investor day presentation, May 23, 2024
Slide 1: Capital Markets Event: Strategy to 2030
Capital Markets Event Strategy to 2030 23 May 2024
Slide 2: Strategy to 2030
Strategy to 2030 2024-2030 2016-2020 2020-2021 2021-2026 STRATEGY TO RETAIN, TRANSITIONAL SUSTAINABLE 2030 IMPROVE, YEAR GROWTH DELIVER STRATEGY Revenue: >£2.2bn Focus on culture and Establishing GT as a Controlled margin embedding best leading standalone and revenueDivisional operating practices. c
Slide 3: Agenda
Agenda Welcome and Affordable Environment Specialist Digital People Financial Summary, overview Homes Services overview Q&A and reception Bill Dr Angela Mark Bill David Vikki Andrew Hocking Brockbank Shadrick Hocking Lowery Skene Duxbury 3
Slide 4: People
Our High-quality engine for order book; good Sustainable pipeline visibility Growth Embedded culture of Consistent, discipline and risk awareness People predictable performance Strong balance sheet 4
Slide 5: Positive earnings momentum
Positive earnings momentum Consistent and profitable growth Revenue Profit before tax1 Earnings per share1 Dividend per share 1,542 27.8 21.9 11.2 1,394 10.5 23.4 18.9 1,237 1,125 19.1 16.0 8.0 £m £m p p 11.4 9.5 4.7 FY21 FY22 FY23 FY24 FY21 FY22 FY23 FY24 FY21 FY22 FY23 FY24 FY21 FY22 FY23 FY24 Key
Slide 6: What you'll hear from us today
What you’ll hear from us today Strategy to 2030 Grow revenue and margin in our three core businesses
Slide 7: What you'll hear from us today
What you’ll hear from us today Strategy to 2030 Grow revenue and margin in our Grow our specialist businesses three core businesses in higher margin, adjacent markets
Slide 8: What you'll hear from us today
What you’ll hear from us today Strategy to 2030 Grow our Grow revenue and margin in our specialist businesses Re-enter the Affordable three core businesses in higher margin, adjacent markets Homes market
Slide 9: What you'll hear from us today
What you’ll hear from us today Strategy to 2030 Grow our Leverage our Grow revenue and margin in our specialist businesses Re-enter the Affordable geographical and three core businesses in higher margin, adjacent markets Homes market client footprint across the UK
Slide 10: What you'll hear from us today
What you’ll hear from us today Strategy to 2030 Grow our Grow revenue and Leverage our Continue to specialist Re-enter the margin in our geographical and generate growing businesses Affordable three core client footprint shareholder in higher margin, Homes market businesses across the UK returns adj
Slide 11: Building, Specialist Services, Highways, Environment
Building Specialist Services Highways Environment (Water) Education Investments Roads Asset Creation Health Digital services Bridges Design services Defence Facilities Management Public realm Capital maintenance Custodial Façade remediation and Water Technologies Comm
Slide 12: Our clients
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Slide 13: What we do animation
What we do animation 13
Slide 14: Gallifordiry
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Slide 15: Drivers of revenue growth
Drivers of revenue growth Ageing social Growing Climate and economic population change infrastructure Leading position Expansion into in frameworks adjacent markets and sectors 15
Slide 16: High-quality, strong market opportunity
High-quality, strong market opportunity Examples of funding streams Order book procurement route Road Investment Strategy 3 AMP8 1.5% c£20bn City Regional Learning Estate Sustainable c£96bn Single-stage Investment 29.5% Transport Programme Network North Settlements Two-stage SR21 Funding £2bn £3.7bn
Slide 17: Frameworks provide opportunity
Frameworks provide opportunity Good forward visibility 2024 2025 2026 2027 2028 2029 2030 Highways Midlands Highways Alliance + Midlands Highways Alliance + YORcivil 3 National Highways RDP National Highways IDF National Highways Pavement Delivery Framework National Highways Scheme Delivery Framewor
Slide 18: Funding streams
Funding streams 18
Slide 19: GallifordTry
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Slide 20: Drivers of margin growth
Drivers of margin growth Increasing Robust risk Maturing client capabilities in management; High-quality procurement and higher-margin selective approach supply chain sector attitudes adjacent markets to contracts Digital tools and Quality right first- processes to drive Modern Methods time; reducin
Slide 21: Growth to 2030
Environment & Health & Saf “ md thatg 7 climate change Peg ye, _ hog y % 9 f i 4,2 Our people | peelen Sustainable % S Communities Growth to 2030 = Revenue >£2.2bn (FY23: £1.4bn) / oi ee . . wv / O . S S Divisional operating margin & / Simmel: Clients | QO. ae 4.0% ys: ar cS) oS (FY23: 2.4%) / £ & E
Slide 22: Affordable Homes
Affordable Homes Dr Angela Brockbank Affordable Homes Sector Director 22
Slide 23: Why we will succeed
Why we will succeed Urgent need for 300,000 new Mature and more contractors homes needed per collaborative to deliver annum supply chain Local Authority and Higher margin and Established player Housing Association increased revenue relationships 23
Slide 24: Affordable Homes
Affordable Homes 60,000 Affordable housing includes homes for sale or rent and is for people whose needs are not met 40,000 by the private market. Government definition 20,000 0 Source: gov.uk 24
Slide 25: Market challenge
Market challenge Significant housing deficit 1.6m Households on social 145,000 New affordable homes required housing waiting lists1 per annum1 63,605 Affordable homes delivered in England in 2022/232 1National Housing Federation estimates. 2Gov.uk. 25
Slide 26: 2030 objectives
2030 objectives 1,200+ Affordable homes delivered per annum by Galliford Try by 2030 £250m+ Anticipated turnover per annum by 2030 for Galliford Try 26
Slide 27: Delivery model
Delivery model CURRENT FUTURE Affordable partnership development models DIRECT CONTRACTING APPROACH Bid for land in partnership with a Housing Association. Land and build ‘Package Deal’ with a partner with a ‘back-to-back’ or ‘Golden Brick’ land transfer. Residential Contracting role Existing contra
Slide 28: Residential delivery
Residential delivery 7,000 1,222 6,292 6,000 1,969 5,000 Units 4,000 1,503 3,000 2,000 1,598 1,000 Completed On site Order book Tender Total Number of residential units constructed/in progress since demerger in 2020, stated as at April 2024. 28
Slide 29: Residential delivery since 2020
Residential delivery since 2020 Secklow Ashley Road Brent Dolphin Gate West Cross Square 29
Slide 30: Monk Bridge
Monk Bridge 30
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Slide 32: Delivery
Delivery Carbon Modern Methods Broader Galliford capabilities of Construction Try offering 32
Slide 33: Affordable Homes
Affordable Homes 33
Slide 34: GallifordTry
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Slide 35: Summary
Design TBC Summary A strong position Significant long-term demand for high-quality mid-rise affordable homes. Well positioned to benefit from re-entry in the Affordable Homes market. Well received by the sector as a new delivery partner. Proven expertise, strong balance sheet and mature supp
Slide 36: Environment
Environment Mark Shadrick Managing Director 36
Slide 37: Market opportunity
Market opportunity £96bn Total AMP8 spend in England £5.8bn SR21 spend in Scotland and Wales (AMP7: £51bn) (SR15: £3.2bn) £57bn Total addressable market opportunity (AMP7 & SR15 £23bn) 37 Galmpton Sewage Treatment Works
Slide 38: Growth strategy
Growth strategy Controlled revenue growth with accelerating profitability Manage supply chain capacity to increase margins in large asset creation frameworks. Accelerate growth in our Asset Management businesses, which offer higher margin. Resulting in controlled revenue growth with blended ma
Slide 39: Progress Environment
Progress Environment Growing higher margin capabilities Asset Creation Asset Management Delivery of our traditional large volume design Planned and reactive maintenance including the & build frameworks. replacement of mechanical and electrical assets that Reshaped our business and made strategic h
Slide 40: National presence
Key frameworks National presence We are now one of the biggest players in the sector. 59 frameworks covering 13 water and sewerage clients. We have developed and structured our business to support our clients' challenges, which underpins our margin growth: • Delivering the UK’s water needs. •
Slide 41: Market drivers
Market drivers Driver Solution Tightening The Environment Act: reduction in spills by 300%; phosphate reduction by 80%; 25% regulatory reduction in embedded carbon; real-time river water monitoring; consumer perception. Asset Creation environment Net positive gain bio-diversity. Last major Mec
Slide 42: Higher margin Asset Management
Higher margin Asset Management Engineering services Water Technologies Capital maintenance Asset optimisation Optimise delivery of high Use existing asset creation Organic growth from Development of Lintott margin consultancy and capital maintenance existing frameworks and products and servi
Slide 43: Digital Twins
Digital Twins 43
Slide 44: Digital scanning
Digital scanning 44
Slide 45: GallifordIry
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Slide 46: Summary
Summary Huge sector opportunity with £57bn addressable market spend. Significant challenges facing our clients. Galliford Try is part of the solution. We have a leading position with: • The right capabilities. • National footprint. • Excellent client and supply chain relationships. David Owen,
Slide 47: Specialist Services
Specialist Services 47
Slide 48: Overview: Specialist Services
Overview Specialist Services FM Digital Infrastructure Asset Intelligence Oak Specialist Services National coverage providing Property access and Technologically advanced Fire-protection and fire lifecycle and hard FM installation of telecoms security solutions for door survey and services, largely
Slide 49: Oak Specialist Services
Oak Specialist Services Passive fire protection, survey and remediation Current market is £3.1bn and estimated to grow. Highly fragmented regional players. Fire door inspections, maintenance, repair and replacement Current market £2.9bn and estimated to grow. Long term annuity-like activity.
Slide 50: Growth plan
Growth plan Oak is currently London centric with over 90% of revenues coming from London and the South East. Plan to grow our geographical presence utilising the current UK- wide Galliford Try office footprint. Expand workload with existing clients. Cross-sell services to broader customer ba
Slide 51: Fire protection
Fire protection 51
Slide 52: GallifordTry
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Slide 53: Market opportunity
Market opportunity Geographic growth using current GT office footprint and client base Cross-sell more services internally Digital Infrastructure 53
Slide 54: Strong client base
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Slide 55: New client base
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Slide 56: Digital
Digital David Lowery Divisional Managing Director, Infrastructure 56
Slide 57: Digital as driver of margin growth
Digital as driver of margin growth Improved Stronger safety during Drives Greater governance construction quality efficiency and risk control and in use Enabler of net Higher quality Supports remote zero carbon order book working 57
Slide 58: 4D digital rehearsals
4D digital rehearsals Grantham Southern Relief Road Phase 3 Digital rehearsal to enable detailed visual planning for the operation to launch a five span bridge deck over the River Witham and East Coast Mainline. Includes “driver’s eye view” for launch of span over railway line. 58
Slide 59: 4D digital rehearsals
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Slide 61: Reality
Reality 61
Slide 62: Augmented Reality
Augmented Reality A303 Sparkford to Ilchester Augmented Reality using Dalux – to overlay the 3D design model on top of the image viewed through a tablet camera while out on site; can also be used for walkthroughs and navigation around the 3D model in the office. Useful for clash detection, and task
Slide 63: Augmented Reality
Augmented Reality 63
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Slide 65: Quality management
Quality management Data capture 360°, 3D images taken weekly to track construction progress; available as an archive at the end of the project. Software enables us to split the screen to compare construction records at any two selected stages of construction. This example allows review of cons
Slide 66: Margin growth enabler
Margin growth enabler Enabler for 2030 strategy Improves safety Drives efficiency Enhances quality 66
Slide 67: People
People Vikki Skene HR Director 67
Slide 68: Our vision and values
Our vision To be a people-orientated, progressive business, driven by our values to deliver for our stakeholders and the communities we work in. Our values Excellence Passion Integrity Collaboration 68
Slide 69: A destination employer
A destination employer 4,200 86% Employees in our business of our employees would recommend a career with us (sector: 77%) No1 10.8% Construction & civil engineering employer Churn (sector: 20%) for Grads and No2 for Apprentices 69
Slide 70: Grow Together
Retain Gain Internal mobility Early Careers programme Explore Dedicated programme to build talent Supports upskilling, development, pipeline. succession planning, employee satisfaction Grow and retention. Mentoring the Next Generation Industry perception and providing routes into our business; pilot
Slide 71: Our Graduate Programme
Our Graduate Programme 71
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Slide 73: Summary
Summary The right team to deliver High-calibre, engaged Attracting quality new our strategy now and in the workforce talent future 73
Slide 74: Financial overview
Financial overview Andrew Duxbury, Group Finance Director 74
Slide 75: Consistent profitable growth
Revenue Pre-exceptional profit up 24% before tax1 up 105% Consistent 1,237 1,394 1,542 23.4 27.8 profitable growth 1,125 19.1 £m £m 11.4 FY21 FY22 FY23 FY24 FY21 FY22 FY23 FY24 Consistent revenue and margin progression, Pre-exceptional earnings Dividend per share delivered in line with our plan. p
Slide 76: How we allocate capital
How we allocate capital Prioritising a strong balance sheet Financial performance Strong balance sheet to support operations Competitive advantage. Reinvest in the business Ability to invest in technology and training to drive quality and efficiency. Based on a strong balance sheet Gives con
Slide 77: M&A provides further opportunity
M&A provides further October 2021 opportunity Track record of successful bolt-on acquisitions, bringing new July 2022 capabilities and accelerating growth. Capital allocation framework allows for investment in M&A. 2030 strategic targets do not assume any further November 2022 acquisitions.
Slide 78: Medium-term financial guidance
Medium-term financial guidance Targets to 2030 Revenue growing to >£2.2bn – double 2021’s revenue. Revenue >£2.2bn Divisional operating margin target 4.0% - double 2021’s Divisional operating margin1 4.0% margin. Cash Operating cash generation Increased operational leverage of central costs. D
Slide 79: Growth of higher margin businesses
Revenue mix1 Growth of higher 2,500 2,000 margin businesses 1,500 £m 1,000 500 All parts of the Group have growth potential. 0 2021 2023 2030 Strategy is focused on continued margin Building Infrastructure Specialist Services Affordable Homes improvement, including contract selectivity, 1 Illust
Slide 80: Positive earnings momentum
Positive earnings momentum Consistent and profitable growth Revenue Profit before tax1 Earnings per share1 Dividend per share 1,542 1,394 1,237 1,125 £m £m p p 21.9 27.8 18.9 10.5 11.2 23.4 16.0 19.1 8.0 11.4 9.5 4.7 FY21 FY22 FY23 FY24 FY30 FY21 FY22 FY23 FY24 FY30 FY21 FY22 FY23 FY24 FY30 FY21 FY2
Slide 81: Creating further shareholder value
A compelling investment case High-quality business operating in robust markets Creating further generating growing returns shareholder value Robust market Rigorous risk opportunity management Excellent position in chosen sectors. Embedded culture of assessing and Significant further profitable gro
Slide 82: Summary
Summary 82
Slide 83: People
Our High-quality engine for order book; good Sustainable pipeline visibility Growth Embedded culture of Consistent, discipline and risk awareness People predictable performance Strong balance sheet 83
Slide 84: Meet the team
Attendees E Ian Jubb E Kevin Corbett Meet the team Divisional Managing General Counsel Director, Building & CoSec Speakers Chris Vladar MD, Oak Specialist Phil Harris MD, Galliford Try Services Investments E Dr Angela Brockbank Phil Drewett Bill Hocking Affordable Homes Martin Cooper Chief Executive