Slide 1: 2002 Interim Results
Balfour Beatty 2002 Interim Results 14 August 2002
Slide 2: Balfour Beatty
Balfour Bea~y
Slide 3: Balfour Beatty highlights
Balfour Beatty • Continuing forward profit momentum • Earnings supported by strong cash flow • Growing contribution from acquisitions • Good growth prospects in key markets
Slide 4: First half results summary
Balfour Beatty First Half First Half £m 2001 2002 Turnover £1,436m £1,685m +17% Operating profit* £59m £65m +10% Pre-tax profit* £41m £48m +17% Earnings per share* 5.5p 6.30p +15% Dividends per share 2.2p 2.35p +7% Net Cash £63m £41m Order Book £3.9bn £4.8bn +23% * Before exceptionals and goodwill a
Slide 5: Operating profit by segment
Balfour Beatty 2001 First Half First Half Full Year £m 2001 2002 Building, Building Management 44 and Services 22 21 -5% Civil and Specialist Engineering 22 and Services 6 7 +17% 24 Rail Engineering and Services 7 16 +128% 45 Investments and Developments 23 21 -9% Operating profit* - 135 continuing
Slide 6: Building, Building Management and Services
Balfour Beatty 2001 First Half First Half Full Year £m 2001 2002 18 Construction 9 9 9 Services 4 5 17 Systems 9 7 44 22 21 • Construction businesses continue to perform well • Services business improves • Systems businesses impacted by US market
Slide 7: Operating profit by segment
Balfour Beatty 2001 First Half First Half Full Year £m 2001 2002 Building, Building Management 44 and Services 22 21 -5% Civil and Specialist Engineering 22 and Services 6 7 +17% 24 Rail Engineering and Services 7 16 +128% 45 Investments and Developments 23 21 -9% Operating profit* - 135 continuing
Slide 8: Civil and Specialist Engineering and Services
Balfour Beatty 2001 First Half First Half Full Year £m 2001 2002 2 Utilities Contracting (1) 4 20* Other Engineering 7* 3 22* 6* 7 • New utilities business a UK leader • US write-offs depress profits • Market prospects good and improving * Excluding Results for Dubai Cable Company
Slide 9: Operating profit by segment
Balfour Beatty 2001 First Half First Half Full Year £m 2001 2002 Building, Building Management 44 and Services 22 21 -5% Civil and Specialist Engineering 22 and Services 6 7 +17% 24 Rail Engineering and Services 7 16 +128% 45 Investments and Developments 23 21 -9% Operating profit* - 135 continuing
Slide 10: Rail Engineering and Services
Balfour Beatty 2001 First Half First Half Full Year £m 2001 2002 (2) UK Maintenance (2) 4 11 Other UK Businesses 4 3 15 International 5 9 24 7 16 • Return to profit in UK Maintenance • Strong performances in Europe and US • Major contracts secured
Slide 11: Operating profit by segment
Balfour Beatty 2001 First Half First Half Full Year £m 2001 2002 Building, Building Management 44 and Services 22 21 -5% Civil and Specialist Engineering 22 and Services 6 7 +17% 24 Rail Engineering and Services 7 16 +128% 45 Investments and Developments 23 21 -9% Operating profit* - 135 continuing
Slide 12: Investments and Developments
Balfour Beatty 2001 First Half First Half Full Year £m 2001 2002 27 PFI/PPP 12 14 19 Barking Power 12 8 (1) Property (1) (1) 45 23 21 • Concession income increasing • Bid costs now capitalised • Barking maintenance restricts availability
Slide 13: Cash flow from operating activities
Balfour Beatty £m Net cash inflow from operating activities 46 Dividends from J/Vs and associates 6 Capex (9) 43
Slide 14: Net cash movement
Balfour Beatty £m Opening net cash 63 Operating cash flow 43 Acquisitions (34) Dividends and interest (21) Tax (9) Other items (1) Closing net cash 41
Slide 15: Net assets and net cash
Balfour Beatty First Half First Half £m 2002 2001 Goodwill* 276 180 Net cash 41 63 Other assets (124) (82) Shareholders’ funds 193 161 * Including share of joint ventures and associates
Slide 16: Financial summary
Balfour Beatty • Continuing growth in underlying earnings • Strong cash flow • Strong cash position to support future growth
Slide 17: Balfour Beatty
Balfour Bea~y
Slide 18: Strategy
Balfour Beatty • Sustainability - Better, more secure margins • Focus - Maintain competitive advantage • Growth - Organic and by acquisition • Process - Continuous improvement
Slide 19: Profit trend 1998-2002
Balfour Beatty £m 140 135 120 113 98 100 85 80 60 40 65 59 20 48 48 36 0 1998 1999 2000 2001 2002 1st Half Full year * From continuing businesses, before exceptional items and goodwill amortisation
Slide 20: Operating profit and cash 1997-2002
Balfour Beatty Operating Operating £m Profit Cash 1997 – 2002 (First Half) 401 400 Balfour Beatty Construction and Manufacturing businesses
Slide 21: Businesses acquired 2000-2002
Balfour Beatty Sales Operating Margin £m (£m) Profit (£m) (%) Businesses acquired in 2000, 2001 and 2002* 646 40 6.2 * Aggregated 2001 and first half 2002 performance before goodwill amortisation of Marta Metroplex, Integral Technologies, Koc Garanti, Balfour Beatty Rail Power Systems, Balfour Beatt
Slide 22: Businesses acquired in 2000, 2001 and 2002
Balfour Beatty Sales Operating Margin £m (£m) Profit (£m) (%) Businesses acquired in 2000, 2001 and 2002 269 16 5.9
Slide 23: Order book
Balfour Beatty £bn 5 4.8 4.3 3.9 4 3.3 3 2.8 2 1 0 Jun-00 Dec-00 Jun-01 Dec-01 Jun-02 Engineering Building Rail
Slide 24: Major contract wins: January-March
Balfour Beatty Balfour Beatty Share January £m • Waste Water Tunnel, Narragansett, Rhode Island • Alameda Rail Maintenance 150 • Texas Roads • North Yorkshire and Hampshire Road Maintenance 290 February • Thameslink 2000 Preferred Bidder 200 March • Order book of acquired Kenton Utilities 190
Slide 25: Major contract wins: April-May
Balfour Beatty Balfour Beatty Share April £m • Greenbush Commuter Rail Line, Boston 100 • San Diego Metro • Preferred Bidder, Consignia Facilities Management 630 May • East Hall Extension, Hong Kong Airport 38 • Preferred Bidder Heathrow Terminal 5 Rail 46 • Forth Bridge Refurbishment 60
Slide 26: Major contract wins: June-August
Balfour Beatty Balfour Beatty Share June £m • Yorkshire Water Pipeline Refurbishment 120 July • Texas Toll Road 330 August • Milan-Turin Rail Electrification 50
Slide 27: Utilities contracting and outsourced facilities management
Balfour Beatty Utilities Contracting Outsourced Facilities Maintenance/management London Underground PPP
Slide 28: Utilities businesses sales and order book
Balfour Beatty Approximate £m Annual Sales Order Book Balfour Beatty Power Networks 115 115 John Kennedy 95 200 Kentons 70 195 280 510
Slide 29: Utilities contract awards
Balfour Beatty £m • Mains rehabilitation – Yorkshire Water 120 • Strategic partnership – South West Water 74 • Integrated management framework – Transco 71 • Mains rehabilitation – West of Scotland Water 60 • Sewer rehabilitation – United Utilities 60 • Vale of York overhead line – NGC 32 • South Wa
Slide 30: Estimates 1999-2003
Balfour Beatty £m 300 250 200 150 100 204 280 177 127 141 50 0 1999 2000 2001 2002 Estimate 2003 Estimate
Slide 31: PFI/PPP projects
Balfour Beatty • Consignia Estates* • Edinburgh Royal Infirmary • North Durham Hospital • BT – Project Montarey • Stoke Schools • Benefits Agency • Royal Bank of Scotland * Preferred bidder
Slide 32: Balfour Beatty
Balfour Bea~y
Slide 33: London Underground PPP estimates
Balfour Beatty 1st 2003 2004 7½ year £m Estimate Estimate Period Estimate Stations 50 85 1,120 Civil Engineering 90 70 640 Trackwork 50 60 470 Total 190 215 2,230
Slide 34: Outlook
Balfour Beatty • Continued progress against key objectives • Order books strong • Acquisitions performing to plan • Short and medium term prospects encouraging • The Board and management structure strengthened
Slide 35: Group and JV operating profit analysis
Balfour Beatty Group JV & Assoc’s Total JV & Operating Operating Operating Assoc’s Pre tax £m Profit Profit Profit Interest Profit Investments & Developments PFI (3) 17 14 (11) 3 Barking - 8 8 (3) 5 Property (1) - (1) - (1) (4) 25 21 (14) 7 Other Segments DML - 2 2 - 2 Other 2 2 (1) 1 29 (15)