Balfour Beatty Plc · LSE:BBY

Balfour Beatty — Corporate Update (January 2015)

9 slides from Balfour Beatty's corporate update, Jan 22, 2015

1. Slide 1: KPMG Review, Valuation of Investments Portfolio and Trading Update

   KPMG Review, Valuation of Investments Portfolio and Trading Update Leo Quinn, Group Chief Executive Duncan Magrath, Chief Financial Officer 22 January 2015

2. Slide 2: Agenda

   Agenda 1. Initial observations Leo Quinn 2. KPMG Review 3. Valuation of Investments Portfolio Duncan Magrath 4. Trading Update 5. Concluding remarks Leo Quinn • Qs & As 2

3. Slide 3: Initial observations

   Leo Quinn Initial observations  Review of UK Construction starts to draw a line under uncertainty  With backdrop of increased risk provisions - buyback cancelled, dividend policy to be reviewed  Group had become too large, complex & devolved – but has great strengths  Need to adopt culture of tr

4. Slide 4: KPMG Review (1)

   KPMG Review (1)  Review focused on bidding and tendering disciplines, commercial controls, contract value and cost forecasting, and project reporting  Sample: 127 projects, comprising c.36% of CSUK’s 2014 revenue Key findings Recommendations  Issues principally restricted to  More rigour in tend

5. Slide 5: KPMG Review (2)

   KPMG Review (2) Financial impact  Board expects to reduce 2014 UK construction profits by a further £70 million, comprising: − £20 million relating to the difference between the reported contract positions, as at August 2014, and KPMG’s assessment as at the same date; and − £50 million relating to

6. Slide 6: Valuation of Investments Portfolio

   Valuation of Investments Portfolio Summary  Directors’ Valuation (DV) of the Investments Portfolio increased to £1,300 million  Two additional sources of value for shareholders. − Pipeline of future bidding opportunities − Synergies from the Investments business being an integral part of the Group

7. Slide 7: Trading Update

   Trading Update  Excluding the impact of the KPMG findings in Construction Services UK, there has been no net material change in underlying trading across the Group as a whole, since the last trading update on 18 November 2014  However, within this the mechanical and engineering joint venture in th

8. Slide 8: Concluding remarks

   Leo Quinn Concluding remarks Balfour Beatty has great strengths  Depth of engineering capability, passionate people  Strong customer relationships  Substantial upside potential in UK Construction; material exposure to UK recovery  Outstanding Investments business at heart of business model The G

9. Slide 9: Questions & Answers

   QUESTIONS & ANSWERS Balfour Beatty

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