Balfour Beatty Plc · LSE:BBY
Balfour Beatty — H1 2009 Earnings Presentation
43 slides from Balfour Beatty's earnings presentation, Aug 12, 2009
Slide 1: 2009 Half-Year Results
2009 Half-Year Results 12 August 2009
Slide 2: Duncan Magrath, Finance Director
Duncan Magrath Finance Director
Slide 3: Headline numbers
Headline numbers HY 2009 HY 2008 Revenue £5,072m £4,332m +17% Profit from operations* £114m £88m +30% Pre-tax profit* £108m £95m +14% Adjusted eps* 17.2p 16.2p +6% Interim dividend 5.5p 5.1p +8% Cash generated from operations £78m £84m Net cash (excluding 100% PPP) £394m £333m Order book £12.5bn £12
Slide 4: Building, Building Management and Services
Building, Building Management and Services FY 2008 HY 2009 HY 2008 £6.7bn Order book £5.5bn £6.4bn -14% £4,635m Revenue £2,575m £2,151m +20% £88m Profit £53m £38m +39% Very strong performance from BB Construction US, but reduced US order book Acquisition benefits from Barnhart (6 months) and RT
Slide 5: Building, Building Management and Services
Building, Building Management and Services Programme & Facilities Management (48% growth) £565m £1,747m Building Construction Building Services £263m (16% growth) (1% reduction) Revenue £2,575m (+20%) (June 2008: £2,151m) The creation and care of essential assets
Slide 6: Civil and Specialist Engineering and Services
Civil and Specialist Engineering and Services FY 2008 HY 2009 HY 2008 £4.9bn Order book £5.7bn £4.7bn +21% £3,243m Revenue £1,564m £1,563m - £104m Profit £45m £43m +5% Growth in UK civils orders offset by normal cyclical reduction in UK utilities Financial close on M25 widening and maintenance P
Slide 7: Civil and Specialist Engineering and Services
Civil and Specialist Engineering and Services UK Utilities & Services (9% reduction) UK Civil Engineering £477m £618m (1% reduction) £469m International (13% growth) Revenue £1,564m (June 2008: £1,563m) The creation and care of essential assets
Slide 8: Rail Engineering and Services
Rail Engineering and Services FY 2008 HY 2009 HY 2008 £1.2bn Order book £1.3bn £1.0bn +30% £1,055m Revenue £529m £398m +33% £41m Profit £7m £9m -22% Good order intake for Malaysia and London Underground Revenue growth from East London line and Chile CP4 Network Rail volume delayed to later yea
Slide 9: Rail Engineering and Services
Rail Engineering and Services International £253m UK £276m (42% growth) (25% growth) Revenue £529m (+33%) (June 2008: £398m) The creation and care of essential assets
Slide 10: Investments
Investments HY 2009 HY 2008 JVs & JVs & FY 08 £m Group assoc Total Group assoc Total 32 PPP concessions* 1 16 17 - 16 16 14 Infrastructure investments* (2) 11 9 - 8 8 12 BB Communities* 11 2 13 3 - 3 (27) Bidding costs & overheads (13) - (13) (13) - (13) 31 Investments operating profit* (3) 29 26 (1
Slide 11: Investments
Investments Financial close for Fife Hospital, Southwark Schools and M25 in first half and Carlisle NDR in July £20m equity investment in M25 PPP, with further £5m by year-end Full period contribution from BB Communities Strong performance from Barking Power The creation and care of essentia
Slide 12: Investment income & finance costs
Investment income & finance costs FY 08 £m HY 2009 HY 2008 12 PPP subord. debt interest receivable 6 6 7 PPP interest on financial assets 6 3 6 Income on net investment hedging 1 - 13 Other interest receivable 4 7 5 Net investment income – pensions - 3 43 Investment income 17 19 (6) PPP interest on
Slide 13: Performance by sector
Performance by sector FY 08 £m HY 2009 HY 2008 88 Building, Building Mgt and Services 53 38 104 Civil and Specialist Eng and Services 45 43 41 Rail Engineering and Services 7 9 31 Investments 26 14 (34) Corporate costs (17) (16) 230 Profit from operations* 114 88 19 Net (finance costs)/ investment i
Slide 14: Exceptional items and intangible asset amortisation
Exceptional items and intangible asset amortisation Profit £m before tax Tax Net Exceptional items: US dollar options revaluation (15) 4 (11) Acquisition, integration, reorganisation & other costs (3) 1 (2) Anticipated rail asset impairment charge (4) 1 (3) (22) 6 (16) Amortisation of intangible ass
Slide 15: Cash generated from operations
Cash generated from operations £m HY 2009 H2 2008 H1 2008 Group operating profit* 73 103 52 Depreciation 36 34 31 Exceptional cash items (3) (3) (3) Other items 2 7 - Pension deficit payments (13) (14) (24) Working capital (increase)/decrease (17) 86 28 Cash generated from operations 78 213 84 Net c
Slide 16: Pensions charge
Pensions charge FY 08 £m HY 2009 HY 2008 Defined benefit schemes: 45 P&L charge – current service cost 16 23 (141) Expected return on assets (57) (70) 136 Interest on scheme liabilities 65 67 (5) Net finance charge/(credit) 8 (3) 40 Net pension charge* 24 20 Defined contribution schemes: 28 P&L char
Slide 17: Group balance sheet
Group balance sheet £m June 09 Dec 08 June 08 Goodwill and intangible assets 1,118 1,198 989 Other non-current assets (excl. PPP & RBO tax) 899 962 869 Current assets (excluding cash) 1,775 1,703 1,627 Current liabilities (excluding borrowings) (2,794) (2,797) (2,537) Net cash (excluding PPP subsidi
Slide 18: Balance sheet cash movement
Balance sheet cash movement £m HY 2009 HY 2008 Opening net cash† 440 374 Cash generated from operations† 71 77 Dividends from JVs and associates 27 43 Capital expenditure and financial investment (47) (39) Acquisitions (26) (281) Share issue - proceeds from placing - 182 Dividends, interest and tax
Slide 19: Acquisitions
Acquisitions £m R T Dooley * 23 February 22 Deferred consideration 4 26 * after adjusting for cash balances on acquisition The creation and care of essential assets
Slide 20: Cash balances
Cash balances £ US $ € Other Monthly average cash balance £500m for half-year period £400m 312 £300m 249 254 223 224 £200m £100m £0m Jun 07 Dec 07 Jun 08 Dec 08 Jun 09 The creation and care of essential assets
Slide 21: Committed bank facilities
Committed bank facilities £500m £ US $ £400m £300m £200m £100m £0m Jun 09 2008 Dec 09 2009 Dec 10 2010 Dec 11 2011 Sep 12 2012 The creation and care of essential assets
Slide 22: Pensions – balance sheet movement
Pensions – balance sheet movement +£4m Pension deficits, net of tax Deferred tax assets £160m +£279m -£115m £128m +£16m +£56m £67m -£29m £427m £344m £194m December Current Company Actuarial Actuarial Other June Liability Post 2008 service contributions loss loss movements 2009 mitigation liability c
Slide 23: Summary of first half performance
Summary of first half performance Continuing growth in profits Solid order book Strong cash position The creation and care of essential assets
Slide 24: Ian Tyler, Chief Executive
Balfour Beatty lan Tyler Chief Executive
Slide 25: 2006 Strategic Priorities Progress
2006 Strategic Priorities Progress UK Regional Contracting PPP – Birse, Cowlin, Dean & Dyball Investments PP – ITE Singapore, UK Airports, BB Communities US PP – BB Infrastructure, BB Construction, Heery Professional Services P – Integration, Satisfactory growth The creation and care of esse
Slide 26: Order book and pipeline
Order book and pipeline Balfour Beatty
Slide 27: Highways
Highways Visibility through to 2012 Financial close on M25 £300m+ A46 proceeds Go-ahead on £127m Norwich ECI expected shortly Financial close on CNDR in July Existing projects progressing well The creation and care of essential assets
Slide 28: Education
Education Substantial investment in the sector Financial close on Southwark BSF Significant current and projected workload as concessionaire and contractor The creation and care of essential assets
Slide 29: UK Markets
UK Markets Roads High activity levels Rail CP4 Airports BAA investment programme Education BSF and Academies Healthcare Changing emphasis Utilities AMP 5. Long-term energy programmes Building Recovery and Green impact The creation and care of essential assets
Slide 30: US Markets
US Markets Building Gradual recovery Transport infrastructure ARRA and Highways Bill Investments New markets emerging The creation and care of essential assets
Slide 31: Rest of world markets
Rest of world markets South-East Asia Transport investment Middle East Dubai recovery. Abu Dhabi The creation and care of essential assets
Slide 32: Balfour Beatty Markets
Balfour Beatty Markets Medium-term Underlying resilience Investments RoW 7% Good market balance 12% Broadly-based geography 53% UK US 28% The creation and care of essential assets
Slide 33: Balfour Beatty Markets – UK Public Capital
Balfour Beatty Markets – UK Public Capital Medium-term Public Capital Uncertainty on where cuts UK may fall 24% Impact on capital expenditure uncertain Continuing investment in social and physical infrastructure The creation and care of essential assets
Slide 34: Balfour Beatty Markets – UK Public Opex
Balfour Beatty Markets – UK Public Opex Medium-term Further growth in Public Capital public sector outsourcing UK 24% Increasing opportunity for integrated outsourced service Public 8% Opex providers UK Long-term customers include Department for Work and Pensions, Royal Mail, Met Police and BB
Slide 35: Balfour Beatty Markets – UK Regulated
Balfour Beatty Markets – UK Regulated Medium-term Good visibility with expected Public Capital growth UK 24% Increasing requirement for innovation Public 8% Opex UK 15% Regulated UK The creation and care of essential assets
Slide 36: Balfour Beatty Markets – UK Private
Balfour Beatty Markets – UK Private Medium-term Some medium-term recovery Public Capital UK 24% Public 8% Opex UK 15% Regulated 6% UK Private UK The creation and care of essential assets
Slide 37: Balfour Beatty Markets – US Public
Balfour Beatty Markets – US Public Medium-term Diverse range of public sector Public Capital customers UK 24% Strong federal business Public Well-positioned to benefit from 8% Opex UK fiscal stimulus spending 21% 15% Public 6% US Regulated UK Private UK The creation and care of essential asset
Slide 38: Balfour Beatty Markets – US Private
Balfour Beatty Markets – US Private Medium-term Recovery in some markets Public Capital UK 24% Private 7% Public US 8% Opex UK 21% Public 15% US 6% Regulated UK Private UK The creation and care of essential assets
Slide 39: Balfour Beatty Markets – Rest of the World
Balfour Beatty Markets – Rest of the World Medium-term Growth expected RoW Public Capital UK Focus on infrastructure in 12% 24% Dubai and Abu Dhabi Private US 7% Public Positive outlook in 8% Opex UK Hong Kong and Singapore 21% Public 15% US 6% Regulated UK Private UK The creation and care of
Slide 40: Balfour Beatty Markets - Investments
Balfour Beatty Markets - Investments Medium-term Investments UK - private finance to Public Capital 7% have a continuing role RoW UK 12% 24% US – increasing use of Private 7% PPP including single- US Public 8% Opex soldier accommodation UK 21% Public 15% Opportunities in wider US 6% Regulated
Slide 41: Business model and emerging strategic themes
Business model and emerging strategic themes Construction Investment Services Professional Services The creation and care of essential assets
Slide 42: Long-term trends
Long-term trends Integrated services increasingly attractive Pressure growing on “more for less” Increasing premium on upstream services The creation and care of essential assets
Slide 43: The creation and care of essential assets
The creation and care of essential assets