Slide 1: 2007 Interim Results
2007 Interim Results 15 August 2007
Slide 2: Sir David John
Sir David Jonn Balfour Beatty
Slide 3: Anthony Rabin
Anthony Rabin Balfour Beatty
Slide 4: Headline numbers
Headline numbers First half First half 2006 2007 Revenue £2,719m £3,505m +29% Pre-tax profit* £56m £76m +36% Adjusted eps* 11.4p 14.2p +25% Interim dividend 3.9p 4.6p +18% Cash generated from operations £133m £181m +36% Net cash (excluding 100% PFI) £353m £479m Order book £8.8bn £10.6bn +20% * Befor
Slide 5: Performance by sector
Performance by sector Full year First half First half 2006 £m 2006 2007 Building, Building Management 43 17 30 and Services
Slide 6: Building, Building Management and Services
Building, Building Management and Services Full year First half First half 2006 £m 2006 2007 Building, Building Management 43 17 30 and Services • Good progress in UK building construction • First contribution from Balfour Beatty Construction US at anticipated levels • E&M profits in line • Good pro
Slide 7: Building, Building Management and Services
Building, Building Management and Services Programme & Facilities Management £242m (17% growth) Building Services Building Construction £245m £1,076m (19% growth) (75% growth) Revenue £1,563 million (+54%) (June 2006: £1,012 million) Order book £5.1 billion (+42%) (Dec. 2006: £3.6 billion)
Slide 8: Performance by sector
Performance by sector Full year First half First half 2006 £m 2006 2007 Building, Building Management 43 17 30 and Services Civil and Specialist Engineering 47 20 26 and Services
Slide 9: Civil and Specialist Engineering and Services
Civil and Specialist Engineering and Services Full year First half First half 2006 £m 2006 2007 47 20 26 • Good progress in Gammon and the US • Balfour Beatty Management continues to grow • Profits from Devonport accounted for as discontinued business
Slide 10: Civil and Specialist Engineering and Services
Civil and Specialist Engineering and Services UK Utilities & Services £495m UK Civil Engineering (30% growth) £451m (38% growth) International £340m (15% decline) Revenue £1,286m (+26%) (June 2006: £1,024m) Order book £4.65n (+2%) (December 2006: £4.55bn)
Slide 11: Performance by sector
Performance by sector Full year First half First half 2006 £m 2006 2007 Building, Building Management 43 17 30 and Services Civil and Specialist Engineering 47 20 26 and Services 38 Rail Engineering and Services 11 13
Slide 12: Rail Engineering and Services
Rail Engineering and Services Full year First half First half 2006 £m 2006 2007 38 11 13 • Good progress on overground and underground renewals • T5 project nearing successful conclusion • Steady performances in Europe and North America • £10bn UK network capacity enhancement 2009-2014
Slide 13: Rail Engineering & Services
Rail Engineering & Services Other £162m (7% reduction) UK £182m (10% Reduction) Revenue £344m (-9%) (June 2006: £377m) Order book £0.85bn (-11%) (December 2006: £0.95bn)
Slide 14: Performance by sector
Performance by sector Full year First half First half 2006 £m 2006 2007 Building, Building Management 43 17 30 and Services Civil and Specialist Engineering 47 20 26 and Services 38 Rail Engineering and Services 11 13 32 Investments and Developments 15 17
Slide 15: Investments and Developments
Investments and Developments First half 2006 First half 2007 Full PFI PFI year JVs & JVs & 2006 £m Assocs Barking Total Assocs Barking Total Share of results of 51 17 6 23 15 12 27 JVs & associates* (19) Group operating loss* (8) (10) 32 I & D operating profit 15 17 8 Subordinated debt interest inco
Slide 16: Investments and Developments
Investments and Developments • Exeter Airport acquired • Financial close for Pinderfields and Derby projects • Preferred bidder for Fife Hospital and Islington Building Schools for the Future • Shortlisted for Oakland Connector, North Tarrant Expressway, ITE Singapore and Bremen Hospital • Metronet
Slide 17: Performance by sector
Performance by sector Full year First half First half 2006 £m 2006 2007 Building, Building Management 43 17 30 and Services Civil and Specialist Engineering 47 20 26 and Services 38 Rail Engineering and Services 11 13 32 Investments and Developments 15 17 (24) Corporate costs (11) (13) 136 Profit fr
Slide 18: Operating profit v operating cash flow
Operating profit v operating cash flow First half First half £m 2006 2007 Group operating profit* 25 39 Depreciation 21 21 Exceptional provisions 2 (37) Other items 1 - Working capital decrease 84 158 Cash generated from operations 133 181 * Before exceptional items and amortisation
Slide 19: Balance sheet cash movement
Balance sheet cash movement First half First half £m 2006 2007 Opening net cash† 315 305 Cash generated from operations 133 181 Dividends from JVs and associates 7 76 Capital expenditure and financial investment (40) (65) Acquisitions and disposals (21) (3) Buy-back of preference shares (17) (3) Div
Slide 20: Acquisitions and disposals
Acquisitions and disposals £m BB Construction (Centex)* 64 Exeter Airport (net)* 16 Devonport sale (84) Other acquisitions 6 Deferred consideration 1 3 * After adjusting for cash balances
Slide 21: Exceptional items
Exceptional items £m Profit from operations: Metronet – investment write-off (87) Metronet – contract balances written off (35) (122) Tax on items above 19 (103) US reorganisation costs (2) (105) Finance costs: Premium on buy-back of preference shares (1) (106) Recognition of US tax losses 50 (56) P
Slide 22: Pensions under IAS 19
Pensions under IAS 19 Full year First half First half 2006 £m 2006 2007 Defined benefit schemes: 39 P&L charge 19 19 36 Employer cash contributions 18 21 288 Balance sheet liability (gross) 237 160 Balance sheet liability (net of 212 171 126 deferred tax) Defined contribution schemes: 13 P&L charge
Slide 23: Group balance sheet
Group balance sheet Dec June £m 2006 2007 Goodwill and intangible assets 436 647 Net cash (excluding PFI) 305 479 Preference shares – liability (90) (88) PFI / PPP subsidiaries - 3 Non-current assets + working capital 21 30 Non-recourse net debt (21) (27) Other assets / liabilities (264) (528) Share
Slide 24: Summary
Summary • Continuing growth in profits • Strong cash flow • Strong cash position to support future growth
Slide 25: Ian Tyler
lan lyler Balfour Beatty
Slide 26: Balfour Beatty growth 2007 and beyond
Balfour Beatty growth 2007 and beyond • Short-term - Inherent in existing business mix • Medium and Longer-term - New infrastructure investment markets - Professional and technical services - UK regional business expansion - Expansion of non-UK domestic businesses
Slide 27: UK building
UK building 2007 £4bn £2bn £0bn Revenues Order Book Preferred Bidder
Slide 28: Affordable housing
Affordable housing • Decent homes programme extended to 2013 • 50,000 new homes per annum to 2010 Market trends play to our strengths • Market consolidation • Increasing use of PFI • Increasing emphasis on frameworks
Slide 29: Education
Education • £2.5bn per annum BSF programme • £10bn allocated for primary schools • Further Education College replacement • Student accommodation growth • Academies and independents
Slide 30: Airport Investment
Airport Investment
Slide 31: Civil engineering revenues (last 12 months)
Civil engineering revenues (last 12 months) £M 1 Balfour Beatty 1,897 2 Laing O’Rourke 1,244 3 Skanska 921 4 Galliford Try 870 5 Carillion 803 Source: NCE Contractors File
Slide 32: Utilities-sector long-term contract base
Utilities-sector long-term contract base National Grid Electricity £550m to 2012 Northern Gas Networks £420m to 2013 National Grid Gas £380m to 2013 United Utilities multi-service £300m to 2010 Central Networks Electricity £160m to 2010 Anglian Water £150m to 2010 South West Water £100m to 2010 Seve
Slide 33: UK rail investment
UK rail investment 2009 - 2013 £m Thameslink 5,500 Reading, Birmingham, other stations 700 Crossrail ?
Slide 34: Exeter International Airport passenger growth
Exeter International Airport passenger growth Passenger numbers 2.0m 1.5m 1.0m 0.5m 0.0m 2002 2004 2006 2010F 2015F
Slide 35: PPP bids outside the UK
PPP bids outside the UK Capital value £m ITE Singapore 90 Oakland Connector 175 -200 North Tarrant Expressway Up to 1,000 Bremen Hospital 140
Slide 36: Professional and technical services
Professional and technical services • Continued organic growth and niche acquisitions • Major role in long-term partnership contracts • Key element in major project business development
Slide 37: Civil Engineering market shares
Civil Engineering market shares £110m 14% £100m 14% £94m 8% £137m 5%
Slide 38: Building Construction market shares
Building Construction market shares £290m 10% £615m 3% £690m 2%
Slide 39: Balfour Beatty US revenues (pro forma)
Balfour Beatty US revenues (pro forma) 5% 13% Building Construction 15% Heery Civil Engineering 67% Rail c.$3.5bn US approximately 23% of total Group revenues going forward
Slide 40: Secured military housing contracts
Secured military housing contracts Project name Contract value % complete Ft. Stewart / HAAF 301,606,360 69.0% Ft. Detrick / WRAMC 72,689,317 85.8% Ft. Eustis / Story 116,297,149 52.5% Navy Northeast New Housing 260,000,000 58.9% Navy Northeast Renovations 115,386,643 55.9% Ft. Bliss / White Sands 3
Slide 41: Base Realignment and Closure Programme
Base Realignment and Closure Programme • 871 projects on 222 bases • $30bn+ programme • First contract secured