Kier Group Plc · LSE:KIE
Kier — Investor Day (May 2022)
114 slides from Kier's investor day presentation, May 25, 2022
Slide 1: Kier Group plc Capital Markets Day
Kier Group plc Capital Markets Day 25 May 2022
Slide 2: Disclaimer
Disclaimer No representation or warranty, express or implied, is made or given by or on behalf of Kier Group plc (the “Company” and, tog ether with its subsidiaries and subsidiary undertakings, the “Group”) or any of its directors or any other person as to the accuracy, completeness or fairnes s of
Slide 3: Introduction
Introduction Andrew Davies Chief Executive Officer Simon Kesterton Chief Financial Officer Capital Markets Day 25 May 2022 3
Slide 4: Today's Objectives
Today’s Objectives Outline our purpose – “ to sustainably deliver infrastructure which is vital to the UK” and demonstrate how we Strategy execute our Group strategy: • Focus on UK Government, regulated and blue-chip client base • Operate in B2B markets • Contracting through long-term frameworks Rem
Slide 5: Agenda
Agenda 14:00 Welcome and Opening Remarks 14:20 – 16:20 Infrastructure Services – Infrastructure Projects Andrew Davies Stand 3 Mark Pengelly Chief Executive Officer Managing Director, Infrastructure Projects Stuart Togwell Group Commercial Director Leveraging our Capabilities to Drive Growth 14:20 –
Slide 6: Current Trading
Current Trading Group is trading in-line with expectations for the period to 30 April 2022 ▪ Performed well in the four months to 30 April 2022 despite inflationary pressure ▪ Group trading in-line with expectations ▪ Order book of £8.5bn at 31st March 2022 ▪ Represents an increase of c.6% from 31 D
Slide 7: Short Term – Cost Inflation
Short Term – Cost Inflation Continue to trade in line with expectations despite cost inflation Cost Inflation Mitigations ▪ Cost inflation - steady increase through FY22 1. Customers – 55% of order book under target cost including materials, wages and other costs or cost reimbursable contracts ▪ Sup
Slide 8: UK Economic and Political Landscape
UK Economic and Political Landscape Key factors driving short-term and long-term landscape. Well positioned for long-term growth Macro economic factors driving short-term headwinds Short term Cost inflation Ukraine war and Fear of economic Global supply energy crisis slowdown shortage Long term Econ
Slide 9: Leveraging Capabilities to Drive Growth
Leveraging Capabilities to Drive Growth Andrew Davies Chief Executive Officer
Slide 10: Kier Group
Kier Group Infrastructure and construction services supplier with c.100 years experience FY21 KEY FINANCIALS ▪ Kier Group plc provides specialist design and build capabilities to manage and ▪ Revenue FY21: £3.3bn (HY22: £1.5bn) integrate all aspects of a project ▪ Adjusting operating profit FY21: £1
Slide 11: Our Businesses
Our Businesses Simple and focused operating units: Infrastructure Services, Construction and Property Infrastructure Services Construction Property 1 3 4 5 Property Infrastructure Highways Utilities Construction Urban Regeneration Projects and Property Development Delivery of high value Designs, con
Slide 12: Transformation Journey
Transformation Journey Rationalised and recapitalised. Focused on growth May 2021 April 2019 March 2020 Refinancing package agreed New CEO, New senior Andrew Davies management Sale of team in place housebuilding Strategic Review business, Kier Living June 2019 June 2020 June 2021 Cost savings of Por
Slide 13: Kier's Strategic Framework
Kier’s Strategic Framework Strategic priorities for FY22 onwards PURPOSE To sustainably deliver infrastructure which is vital to the UK VISION To be the UK’s leading infrastructure services and construction company GROUP STRATEGY Focus on government, regulated Operate in business to Contracting or b
Slide 14: Key Investment Proposition
Key Investment Proposition Creating value for the medium term Value accretive Attractive market Strong order book Experienced earnings-led business positions focused on underpinned by long- management team. model. Aligned to UK UK infrastructure and term contracts and Proven track record of Governme
Slide 15: Business Model
Business Model Aligned our businesses to take advantage of market opportunities Infrastructure Services and Construction Property 1 3 4 5 Property Infrastructure Highways Utilities Construction Urban Regeneration Projects and Property Development Disciplined investment of cash Free cash flow generat
Slide 16: Integrated Approach
Integrated Approach Integration unlocks synergies across our businesses Commercial synergies Project management synergies 1 ▪ Contracting through long-term frameworks ▪ Managing highly complex projects across business units ▪ Leveraging relationships in the public sector – ▪ Design, integration and
Slide 17: Regional Footprint
Regional Footprint National capability and local execution with UK regional presence ▪ Regional presence across the UK with network of offices ▪ Approx. 400 national and local projects ▪ Customer relationships with central government and local authorities ▪ Business supported by: ▪ Employees – c.10,
Slide 18: Market Drivers
Market Drivers Positive market environment underpinning UK Government spending commitments Population Economic Congested “Levelling up” Climate growth growth transport agenda change ▪ Population expansion ▪ UK economic ▪ Congested roads, ▪ Increased spending ▪ Energy supply with people living growth
Slide 19: UK Government Spending Commitments
UK Government Spending Commitments UK National Infrastructure Strategy – commitment to spend £650bn over next 10 years Infrastructure Highways Utilities Rail and infrastructure Net Zero infrastructure ▪ Road investment Strategy 2: ▪ Water England/Wales AMP7 ▪ £37- £53bn forecast cost ranges ▪ UK lea
Slide 20: UK Government Spending Commitments continued
UK Government Spending Commitments continued UK Government spending focused on schools, hospitals, prisons and defence Construction Property Education Health Justice Defence Urban Regeneration ▪ 500 DfE school replacement ▪ £1.5bn additional ▪ 20,000 new prison ▪ £3.2bn Defence Estate ▪ “Levelling u
Slide 21: Addressable Market
Addressable Market Significant addressable market opportunity in the Group’s core markets Infrastructure Services Construction £23bn £23bn ▪ Overall UK construction market (excluding Roads Repairs & Maintenance housing) was estimated to be worth £126bn in 3% 2021 Commercial Roads New 13% 26% ▪ Group
Slide 22: Attractive Market Positions
Attractive Market Positions Focused on attractive market positions in UK infrastructure and construction markets Utilities Infrastructure Services - £1.4bn Infrastructure Highways Utilities ▪ Delivers complex high value civil engineering ▪ A market leading position (top 3 Strategic ▪ Key contractor
Slide 23: Attractive Market Positions continued
Attractive Market Positions continued Focused on attractive market positions in UK infrastructure and construction markets Construction - £1.8bn Property - £134m Regional Build Kier Places Property ▪ #1 UK national builder Facilities Management ▪ Mixed sector property development focused on sustaina
Slide 24: Market and Competitive Position
Market and Competitive Position Focused on strengthening attractive market positions in chosen sectors Roads Nuclear Infrastructure Central Government Property Strong Rail Devolved Authorities Education Flood Protection Competitive position Housing Maintenance Justice Regulated Water Health Regulate
Slide 25: Strong Customer Relationships
Strong Customer Relationships Strong relationship with UK Government and regulated sector clients Central Government Clients ▪ “Strategic supplier” to UK Government and regulated bodies ▪ Commercial and engineering relationships developed over many years Wider Public Sector Clients ▪ Regional presen
Slide 26: Management Team
Management Team Experienced leadership team focused on execution Executive Board Members Corporate Functions Andrew Simon Alpna Amar Helen Redfern Stuart Togwell Sophie Timms Kesterton Corporate Chief People Group Commercial Corporate Affairs Davies Chief Executive Chief Financial Development Office
Slide 27: Summary
Summary Medium term plan supported by UK Government spending commitment 1 UK Government Spending - continued UK Government commitment to infrastructure spending - £650 billion over 10 years Frameworks – increasing use of framework agreements underpinned by ESG. Long term 2 engagement and visibility
Slide 28: Medium Term Value Creation Plan
Medium Term Value Creation Plan Simon Kesterton Chief Financial Officer
Slide 29: Medium Term Value Creation Plan
Medium Term Value Creation Plan Medium term targets provide visibility over Group direction 3 4 ▪ Annual revenue c. £4.0 bn - £4.5 bn ▪ Adjusted operating margin c.3.5% Infrastructure Highw ays Utilities Construction Property ▪ Cashflow conversion of operating profit c.90% Projects ▪ Balance sheet:
Slide 30: Disciplined Revenue Growth
Disciplined Revenue Growth Leveraging market opportunities in core markets to deliver revenue growth c. £4.0bn - £4.5bn Growth £3.3bn › Continue to deliver on existing order book Inf rastructure Highw ays Utilities Construction Property › UK Government National Infrastructure Projects spending commi
Slide 31: Order Book
Order Book Order book underpinned by long-term framework positions ▪ Order book at £8.5bn (HY22: £8.0bn) Secured revenue ▪ 95% of FY22 revenue secured ▪ De-risked contracts: 3,500 ▪ c.55% of order book is under target cost or cost reimbursable contracts 3,000 ▪ Construction - regional build and stra
Slide 32: Frameworks
Frameworks Frameworks can save significant time and money whilst providing visibility and certainty What is a framework? ▪ An “umbrella agreement” enabling public sector and regulated bodies to invite tenders or place orders for services with pre-selected suppliers. Possible to pre-agree terms, pric
Slide 33: Frameworks – Route to Market
Frameworks – Route to Market Maintaining and growing central and local framework positions ▪ Awarded places on long-term frameworks and contracts worth up to £101bn (total OJEU values) ▪ Driving long-term revenue streams, barriers to entry and strengthened customer relationships, underpinning strong
Slide 34: Adjusted Operating Profit Margin
Adjusted Operating Profit Margin Route to deliver adjusting operating profit margin c. 3.5% c.3.5% Management actions Property Volume/ price/ mix Medium term FY20 (pre management actions) › Annualised cost savings and › Deploying additional › Volume growth, mix and continued contract discipline capi
Slide 35: Income Statement – HY22
Income Statement – HY22 Medium-term plan margin target of 3.5% achieved despite volume declines £’m Δ HY22 % HY21 % FY21 % ▪ Anticipated revenue decline reflects Revenue 1,536 1,624 (5.4)% 3,329 procurement delays and project completions Adjusted Operating Profit 54.2 3.5 47.6 2.9 13.9% 100.3 3.0 pa
Slide 36: Financing and Liquidity – HY22
Financing and Liquidity – HY22 Significant reduction in net debt. Facilities maturing in January 2025 KPIs Dec 2021 Maturities Net debt (£m) 131 600 Average month-end net debt (£m) 191 500 £’m Average month-end net debt 400 ▪ Significant reduction from £436m to £191m due to capital raise, 300 sale o
Slide 37: Free Cash Flow – HY22
Free Cash Flow – HY22 Free cash outflow due to seasonal unwind of working capital and reduction in KEPS £’m HY22 FY21 HY21 HY20 ▪ Operating cash flow conversion in line with expectations Adjusted EBITDA 76.8 150.3 71.7 73.0 Working Capital (143.0) 63.5 1.1 (84.8) ▪ Working capital: Net capex (Includ
Slide 38: Capital Allocation
Capital Allocation Capital allocation priorities aligned with strategic objectives ▪ Sources and uses of cash Sources of Cash Uses of Cash ▪ Free cash flow generation over medium term ▪ Capex - investment to support business Cumulative Adjusted Free Cash Flow £’m ▪ Property - disciplined investment
Slide 39: Key Investment Proposition
Key Investment Proposition Creating value for the medium term Value accretive Attractive market Strong order book Experienced earnings-led business positions focused on underpinned by long- management team. model. Aligned to UK UK infrastructure and term contracts and Proven track record of Governme
Slide 40: Stand 1 - ESG
Stand 1 - ESG Helen Redfern Chief People Officer Sophie Timms Corporate Affairs Director
Slide 41: Sustainability
Sustainability ESG is fundamental to our ability to win work and secure positions on long-term frameworks 1 “Strategic Supplier” to UK Government – ESG is fundamental to our ability to win work and secure positions on long-term frameworks 2 Operations – ensuring we operate in a safe and sustainable
Slide 42: Sustainability – UK Government Contracts
Sustainability – UK Government Contracts UK Government contracts require net zero carbon and social value commitments Carbon – PPN 06/21 Social Value – PPN 06/20 Construction Playbook ▪ Requirement for bidding suppliers to ▪ Requirement by all public bodies to ▪ Standards - in setting standards and
Slide 43: Sustainability Framework
Sustainability Framework Building for a Sustainable World Reminder of key focus areas: Environment – pollution prevention, sustainable 1 procurement, net zero carbon, zero avoidable waste and biosphere protection Social – building for tomorrow, diversity and inclusion, our social value and purpose,
Slide 44: Environment - Carbon, Waste and Water
Environment - Carbon, Waste and Water Carbon, waste and water reduction commitments and progress made Carbon Waste Water ▪ Target: Net zero carbon across ▪ Target: Eliminate avoidable waste by ▪ Target: reducing water usage over the operations and supply chain by 2045 2035. Committed to being single
Slide 45: Environment – Our Projects
Environment – Our Projects Examples of projects to reduce carbon and waste HVO Fuel Electric JCB Excavator PPE Recycling Community Wood Recycling ▪ Twerton project - part of the ▪ Electric powered excavator trial. ▪ Staysafe Personal Protective ▪ During 10 year partnership, Equipment (“PPE”) recycli
Slide 46: Social – Measuring Social Value
Social – Measuring Social Value Committed to addressing social issues and creating £5bn of social value by 2030 4 Social Value Calculator – Thrive 3 ▪ Launched in 2022 ▪ 1,287 live projects as at 30 April 2022 Construction Property ▪ Social value output c.£570k. Tracking higher than £500k FY22 Highw
Slide 47: Social – Supply Chain Partners
Social – Supply Chain Partners Investing in supply chain partners with training and prompt payment Supply Chain Sustainability School 3 4 ▪ Total partner value of c.£490k including workshops, training and resources ▪ Additional ongoing value: additional facilities available Highw ays Utilities Const
Slide 48: Social - Fundraising
Social - Fundraising Kier Foundation – independent charity donated c. £2.4m to over 600 causes End Youth Homeless Cancer Support Heart Support Alzheimer’s Society ▪ Raised c.£280k ▪ Raised c.£500k ▪ Raised c.£290k ▪ Raised c.£430k ▪ Funded: ▪ Funded: ▪ Funded: ▪ Funded: ▪ c.380 safe nights’ sleep; a
Slide 49: Social - Platform to Attract and Retain Talent
Social - Platform to Attract and Retain Talent Timeline of social and environmental programmes launched at Kier since December 2020 Green car scheme November I’m Proud Digital health app Diversity & Inclusion February June KIN network Roadmap June People & HS&W Supporting refugees February into empl
Slide 50: Social – Employees
Social – Employees Examples of how Kier continues to support employees and the business Industry leading Glassdoor company 772 employees rating of 4.3/5 benefited from Diversity of Executive Committee introduction of the increased over the past 18 months with Real Living Wage 27% female representati
Slide 51: Social - Apprentices
Social - Apprentices Examples of how Kier continues to support employees and the business 556 apprentices “ I strongly believe that doing an apprenticeship - the combination of work and studying - is a great First Line Manager Apprenticeship The Kier Degree way of starting your professional Undergra
Slide 52: Sustainability – Summary
Sustainability – Summary ESG is fundamental to our ability to win work and secure positions on long-term frameworks 1 “Strategic Supplier” to UK Government – ESG is fundamental to our ability to win work and secure positions on long-term frameworks 2 Operations – ensuring we operate in a safe and su
Slide 53: Stand 2 – Construction: Regional Build and Kier Places
Stand 2 – Construction: Regional Build and Kier Places Liam Cummins Managing Director, Construction Mark Whittaker Managing Director, Kier Places
Slide 54: Regional Build - Overview
Regional Build - Overview National builder with 26 regional offices. Key relationships in education, health, justice and defence Education Health Justice Defence ▪ Delivered almost £5bn of ▪ Long standing collaborative ▪ 12 year relationship with the ▪ Key partner on national and primary, secondary
Slide 55: Regional Build - Market Opportunities
Regional Build - Market Opportunities UK Government spending weighted towards schools, hospitals, justice and defence Education Health Justice Defence Commercial ▪ 500 DfE school ▪ £1.5bn additional ▪ 20,000 new prison ▪ £3.2bn Defence Estate ▪ Increase in replacement project over funding for hospit
Slide 56: Regional Build – Market Positioning
Regional Build – Market Positioning Proven customer relationships and operational delivery 1 A leading UK builder with attractive market positions and regional footprint to take advantage of UK Government committed spend 2 Track record of successful delivery with design, operational and support capa
Slide 57: Regional Build - Locations
Regional Build - Locations 277 projects across the UK in our chosen sectors Heatherwood Hospital HMP Five Wells Prison Winterstoke Hundred Academy RAF Lakenheath Capital Markets Day 25 May 2022 57
Slide 58: Project 1: Winterstoke Hundred Academy – Education
Project 1: Winterstoke Hundred Academy – Education Appointed to a new net zero carbon school building in Weston-Super-Mare ▪ Appointed by North Somerset Council and Cabot Learning Federation to deliver a new net zero carbon building for Winterstoke Hundred Academy in Weston-Super-Mare for 7-11 year
Slide 59: Project 2: Heatherwood Hospital – Health
Project 2: Heatherwood Hospital – Health Completed £98m transformation of Heatherwood Hospital under Procure 21+ Health Framework ▪ Completed the a £98m transformation of Heatherwood Hospital in Ascot for Frimley Health NHS Foundation Trust ▪ The 11,500 sq m new building is for NHS and private patie
Slide 60: Project 3: HMP Five Wells Prison – Justice
Project 3: HMP Five Wells Prison – Justice New resettlement prison in Wellingborough built using Modern Methods of Construction ▪ Completed a £253m contract for the Ministry of Justice (“MoJ”) for a new build resettlement prison in Wellingborough ▪ Designed, procured, delivered and operated, through
Slide 61: Project 4: RAF Lakenheath – Defence
Project 4: RAF Lakenheath – Defence Construction project to deliver first permanent UK home for the US Air Force F-35 fighter jet ▪ Kier VolkerFitzpatrick joint venture was awarded a contract to deliver new infrastructure to ready RAF Lakenheath for the first permanent home in Europe of the US Air F
Slide 62: Kier Places - Overview
Kier Places - Overview Specialises in affordable housing maintenance and facilities management services Facilities Management Affordable Housing Maintenance ▪ Delivering integrated facilities management services ▪ Providing housing maintenance services to local authorities, housing associations and
Slide 63: Kier Places - Market Opportunities
Kier Places - Market Opportunities Net zero carbon agenda and building safety regulations driving housing maintenance opportunities Facilities Management Affordable Housing Maintenance ▪ Government Property Agency (“GPA”) ▪ £4.8bn cross department “levelling up” fund ▪ Strategic Alliance Agreement F
Slide 64: Kier Places – Market Positioning
Kier Places – Market Positioning Ability to tailor services and leverage longstanding public sector relationships 1 Specialist provider of facilities management and affordable housing maintenance services to the public sector 2 Longstanding relationships with central UK Government, Local Authorities
Slide 65: Project 1: Wiltshire Council – Facilities Management
Project 1: Wiltshire Council – Facilities Management Delivering facilities management services across the Wiltshire Council estate ▪ Kier Places has been working with Wiltshire Council since 2016 delivering mechanical and electrical services across their estate ▪ Delivering integrated facilities man
Slide 66: Project 2: Gosport Borough Council– Housing Maintenance
Project 2: Gosport Borough Council– Housing Maintenance Repair and maintenance, planned improvements and specialist work for Gosport Borough Council ▪ Kier Places has been working with Gosport Borough Council for 11 years to repair and maintain their housing stock and public buildings ▪ Kier current
Slide 67: Stand 3 – Infrastructure Services: Infrastructure Projects
Stand 3 –Infrastructure Services: Infrastructure Projects Mark Pengelly Managing Director, Infrastructure Projects Stuart Togwell Group Commercial Director
Slide 68: Governance - Risk Management
Governance - Risk Management Visibility and widened accountability through operating and risk management frameworks Operating Framework Risk Management Framework Capital Markets Day 25 May 2022 68
Slide 69: Infrastructure - Overview
Infrastructure - Overview Infrastructure delivers a number of high value and complex civil engineering projects Project management Procurement and cost Quality management Design management control ▪ 150 quality civil ▪ Dedicated team of 10 ▪ 75 structural and civil ▪ 100 qualified commercial and eng
Slide 70: Infrastructure Projects - Market Opportunities
Infrastructure Projects - Market Opportunities Growing opportunities in our key end markets Rail Nuclear Water Defence ▪ £37bn - £53bn forecast cost ▪ £20bn for new nuclear build ▪ AMP 7 Water commitment - ▪ Defence spending - £42bn in ranges for HS2 Phases 2a and £51bn FY21 ▪ White paper commitment
Slide 71: Infrastructure Projects - Market Positioning
Infrastructure Projects - Market Positioning Strongly positioned with high value and complex civil engineering project capabilities 1 Customer focused approach 2 Targets customers that offer repeat business through frameworks, and ownership of large asset bases 3 Acts as the major projects expertise
Slide 72: Infrastructure - Locations
Infrastructure - Locations 42 projects across the UK in rail, defence, nuclear infrastructure and energy Sofia Wind Farm Sellafield HS2 Environment Agency Framework Luton DART station Capital Markets Day 25 May 2022 72
Slide 73: Project 1: Sellafield – Nuclear Infrastructure
Project 1: Sellafield – Nuclear Infrastructure Delivering complex infrastructure at Sellafield, as part of nuclear power decommissioning programme ▪ Appointed to deliver a £59m reinforced concrete structure at Sellafield, as part of the nuclear power stations’ decommissioning programme ▪ Awarded the
Slide 74: Project 2: HS2 – Rail
Project 2: HS2 – Rail Delivering civil engineering works across a 80km section of the high speed rail link ▪ As part of the Eiffage, Kier, Ferrovial and BAM (“EKFB”) joint venture, Kier is delivering civil engineering works across an 80km section of the new high speed rail link between the Chiltern
Slide 75: Project 3: Luton Dart – Aviation
Project 3: Luton Dart – Aviation Construction of a new guided mass passenger transit system linking Luton Airport to the rail station ▪ Luton DART (Direct Air – Rail Transport) project is a joint venture project between Kier VolkerFitzpatrick ▪ Construction of the new state-of-the-art £225m, 2.1km g
Slide 76: Project 4: Sofia Wind Farm – Energy
Project 4: Sofia Wind Farm – Energy Civil engineering and building construction works on offshore wind farm convertor station ▪ Energy conglomerate General Electric selected Kier to deliver an onshore converter station for RWE’s £3bn Sofia Offshore Wind Farm in the UK ▪ The converter station will be
Slide 77: Project 5: Stolford – Flood Defence
Project 5: Stolford – Flood Defence Installation of a flood protection system in Somerset for the Environment Agency ▪ Kier are employed as the single choice contractor for flood defence and coastal protection measures under the Collaborative Delivery Framework operated by the Environment Agency (“E
Slide 78: Stand 4 – Infrastructure Services: Highways and Utilities
Stand 4 –Infrastructure Services: Highways and Utilities Joe Incutti Managing Director, Highways Andrew Bradshaw Managing Director, Utilities
Slide 79: Highways - Overview
Highways - Overview Designs, constructs and maintains roads for National Highways and Local Authorities Design Maintenance Integrator Major Projects ▪ Prepares designs and ▪ Managing, maintaining and ▪ Integrator with design, ▪ Analysing network needs undertakes supporting work for improving more th
Slide 80: Highways - Market Opportunities
Highways - Market Opportunities Highways market opportunity underpinned by the Road Investment Strategy National Highways Local Authorities Other Climate Change ▪ Road Investment Strategy 2 ▪ Requirement for investment in ▪ Project Speed and new (“RIS2”) spending of £27 billion local authority roads
Slide 81: Highways - Market Approach
Highways - Market Approach Focused on securing both maintenance programmes and major projects Highways Maintenance Major Projects ▪ Market leading position ▪ Successfully transitioned towards major projects ▪ Strong operational delivery in maintenance through ▪ Delivery of capital works on new and e
Slide 82: Highways - Market Positioning
Highways - Market Positioning Integrator capabilities, track record of delivery and long-term relationships 1 A market leading position (top 3 Strategic Highways and top 3 Local Highways) Integrator with unique in-house road design, construction and maintenance 2 capabilities. Long track record of s
Slide 83: Highways - Locations
Highways - Locations 22 projects delivered from locations across the UK covering maintenance and major projects A585 Windy Harbour A46 Warwick Bypass M6 J13-15 SMART Motorway Capital Markets Day 25 May 2022 83
Slide 84: Project 1: Windy Harbour – Highways
Project 1: Windy Harbour – Highways Appointed on £150m road scheme from Windy Harbour to Skippool in Lancashire ▪ Kier was appointed to the £150m A585 road scheme from Windy Harbour to Skippool, near Poulton-le-Fylde in Lancashire ▪ The new three-mile dual carriageway encompasses junction improvemen
Slide 85: Project 2: A46 Warwick Bypass– Highways
Project 2: A46 Warwick Bypass– Highways Reduced, reused and recycled 3.5 miles of dual carriageway for the A46 Bypass in Warwickshire ▪ Kier Highways working with National Highways reused 17,432 tonnes of old road materials to resurface the A46 Bypass in Warwickshire ▪ The scheme carbon footprint wa
Slide 86: Project 3: M6 Smart Motorways Scheme– Highways
Project 3: M6 Smart Motorways Scheme– Highways Upgraded M6 Junction 13 to J15 to into a SMART motorway for National Highways ▪ Upgraded Junction 13 to 15 of the M6 road into a SMART motorway for National Highways ▪ The section of the road runs from Crew to Knutsford ▪ Project team worked with restri
Slide 87: Utilities - Overview
Utilities - Overview Utilities provides repairs, maintenance and capital projects to water, energy and telecoms Water Electricity Gas Telecoms ▪ Enables the flow of clean ▪ Supports electricity ▪ Kier is the only gas ▪ Installs high-speed fibre water and disposal of waste connectivity for approx. 10
Slide 88: Utilities Market Opportunities
Utilities Market Opportunities Market opportunities in water, energy and acceleration of broadband and EV roll-out Water Energy Telecoms Other ▪ Water England & Wales Asset ▪ Energy Distribution - GB Ofgem ▪ Telecoms – roll out of fibre/ 5G ▪ Electric vehicle (“EV”) - plans to Pricing Framework ED1
Slide 89: Utilities - Market Positioning
Utilities - Market Positioning Well positioned with presence across water, energy and telecoms market 1 Key infrastructure provider of repairs, maintenance and capital projects to water, energy and telecoms sectors 2 Longstanding customers operating in regulated industries 3 Consistently delivering
Slide 90: Utilities - Locations
Utilities - Locations 28 projects delivered from locations across the UK covering maintenance and development work Firmus Energy Gas Distribution CityFibre – 5G installation South West Water Infrastructure Capital Markets Day 25 May 2022 90
Slide 91: Project 1: South West Water – Water
Project 1: South West Water – Water Working collaboratively with water customers to repair and maintain water infrastructure ▪ Long standing relationship with South West Water for over 25 years ▪ Provided a range of services each year to both South West Water and Bournemouth Water’s 1.9m customers ▪
Slide 92: Project 2: Firmus Energy – Energy
Project 2: Firmus Energy – Energy Partnership with Firmus Energy to distribute natural gas across Northern Ireland ▪ Strong partnership with Firmus Energy since 2005 to develop and distribute natural gas across 30 Northern Ireland cities and towns ▪ Over time, Kier have laid over 1,600km of gas pipe
Slide 93: Project 3: City Fibre – Telecoms
Project 3: City Fibre – Telecoms Appointed by CityFibre to the UK’s third largest digital infrastructure platform ▪ Appointed by CityFibre to construct and install 5G broadband across five cities in South West England: ▪ Cheltenham, ▪ Gloucester, ▪ Bath, ▪ Weston-Super-Mare; and ▪ Worcester ▪ New in
Slide 94: Stand 5 – Property: Urban Regeneration and Property Development
Stand 5 – Property: Urban Regeneration and Property Development Leigh Thomas Managing Director, Property Lee Howard Finance Director, Property
Slide 95: Property - Market Drivers
Property - Market Drivers Carbon reduction demands, housing shortages and changing consumer trends driving opportunities Climate Change Population Growth Changing Consumer Trends ▪ Legislation change – driving ▪ Population growth - 65+ age group is ▪ Demand - significant demand for high quality obso
Slide 96: Property – Overview
Property – Overview Mixed-use commercial and residential property development delivered through joint ventures Sector Focus Mixed-use Residential Sustainable Offices Industrial & Last Mile Logistics ▪ £133m of capital investment ▪ Access to £1.7bn of Gross Development Value (“GDV”) ▪ Looking to inve
Slide 97: Property – Value Creation Model
Property – Value Creation Model Unlocking UK Government land and investing through public and private partnerships Acquire/ control Obtain planning Build Secure occupier Sell investment land permission ▪ Source suitable ▪ Secure planning ▪ Secure occupier ▪ Build and ▪ Handover to land asset to brin
Slide 98: Property – Value Creation Model continued
Property – Value Creation Model continued Kier’s public sector JV model provides margin protection compared to a traditional model Traditional model Kier model Public sector JV model ▪ Traditional model – potential margin Upside Margin Land Margin upside and downside risk Base Case Downside Margin L
Slide 99: Property – Group Synergies
Property – Group Synergies Leveraging commercial and operational synergies with public sector partnerships Sectors ▪ National Highways ▪ Local Authorities Offices ▪ Pagabo Frameworks ▪ Life Science and Technology Leveraging ▪ Aviation – airport development Central Group ▪ Heathrow, Luton, Stansted a
Slide 100: Property - Key Partnerships
Property - Key Partnerships Competitive advantage achieved through close relationships Key Joint Venture Partners and Local Authority Relationships ▪ Established relationships with land owners and Local Authorities ▪ Key for sourcing projects ▪ Generate repeat business ▪ Collaboration and partnershi
Slide 101: Property - Market Opportunities
Property - Market Opportunities Market opportunities driven by “levelling up”, hub programme and high street re-purposing Urban Regeneration Levelling Up Agenda Hub Programme ▪ High street repurposing ▪ “Levelling up” agenda - ▪ National Infrastructure ▪ Supply shortage - one third of increased spen
Slide 102: Property - Market Positioning
Property - Market Positioning Established relationships, in-house capability, synergies and consistent returns over time 1 Well established relationships with land owners and local authorities providing access to a large land back 2 Proven track record of delivery in the urban regeneration and prope
Slide 103: Property - Locations
Property - Locations 34 projects across the UK with particular expertise in the South East of England Birmingham Arena Central Watford Riverwell Leatherhead Town Centre Capital Markets Day 25 May 2022 103
Slide 104: Project 1: Leatherhead – Urban Regeneration
Project 1: Leatherhead – Urban Regeneration Joint venture partner to Mole Valley District Council on urban regeneration of Leatherhead ▪ Mole Valley District Council has signed up Kier Property as its joint venture partner to lead the £350m regeneration of Leatherhead town centre in Surrey ▪ The par
Slide 105: Project 2: Watford Riverwell – Urban Regeneration
Project 2: Watford Riverwell – Urban Regeneration Joint venture partner to Watford Borough Council for regeneration of brownfield land ▪ Watford Riverwell urban regeneration project being delivered through a 50/50 joint venture with Watford Borough Council ▪ Allows both parties to develop the phases
Slide 106: Project 3: Birmingham City Council – Arena Central
Project 3: Birmingham City Council – Arena Central Regeneration of West Midlands through office and commercial redevelopment ▪ Secured purchase of Arena Central in March 2019 and partnered up with Birmingham City Council. Significant regeneration project ▪ Opportunity provides rights to develop thre
Slide 107: Conclusion
Conclusion Andrew Davies Chief Executive Officer
Slide 108: Conclusion
Conclusion Medium term plan supported by UK Government spending commitment 1 UK Government Spending - continued UK Government commitment to infrastructure spending - £650 billion over 10 years Frameworks – increasing use of framework agreements underpinned by ESG. Long term 2 engagement and visibili
Slide 109: Q&A
Q&A
Slide 110: Appendix
Appendix
Slide 111: Group Revenue Analysis - HY22
Group Revenue Analysis - HY22 23% 9% 5% 9% 4% 1% 10% 8% 21% 5% 1% Total 3% 45% 18% 9% 19% 7% 2% Infrastructure Services 23% 17% 48% 12% Construction 17% 25% 13% 45% Property Highways Rail Power Water Telecoms Other Education Health Government Private Alternatives Mixed Use Office Industrial Capital
Slide 112: Segmental Revenue Analysis - HY22
Segmental Revenue Analysis - HY22 Infrastructure Services 45% 18% 9% 19% 7% 2% Total 100% Highways 3% 8% 60% 5% 20% 7% Infrastructure 3% 28% 45% 24% Utilities Highways Rail Power Water Telecoms Other Construction 23% 17% 48% 12% Total 27% 20% 42% 11% Regional Build 4% 82% Kier Places 100% Internatio
Slide 113: Group Revenue Analysis - FY21
Group Revenue Analysis - FY21 22% 6% 5% 7% 2%1% 13% 5% 24% 11% 1% Total 3% 51% 13% 12% 17% 5% 2% Infrastructure Services 25% 10% 45% 20% Construction 22% 28% 33% 17% Property Highways Rail Power Water Telecoms Other Education Health Government Private Alternatives Mixed Use Office Industrial Capital
Slide 114: Segmental Revenue Analysis - FY21
Segmental Revenue Analysis - FY21 Infrastructure Services 51% 13% 12% 17% 5% 1% Total 100% Highways 3% 13% 51% 12% 19% 5% Infrastructure 6% 33% 45% 16% Utilities Highways Rail Power Water Telecoms Other Construction Total 25% 10% 45% 20% Regional Build 33% 11% 37% 19% Kier Places 5% 4% 76% 15% Strat