Kier Group Plc · LSE:KIE
Kier — Investor Day (July 2014)
138 slides from Kier's investor day presentation, Jul 3, 2014
Slide 1: Creating Platforms for Growth
Creating Platforms for Growth Kier Group Capital Markets Day 3 July 2014
Slide 2: Disclaimer
Disclaimer No representation or warranty, expressed or implied, is made or given by or on behalf of Kier Group plc (the “Company”) or any of its directors or any other person as to the accuracy, completeness or fairness of the information contained in this presentation and no responsibility or liabi
Slide 3: Haydn Mursell
Haydn Mursell Chief Executive Kier Group Capital Markets Day 3 July 2014
Slide 4: Today's agenda
Today’s agenda 2pm Welcome and Group Strategy Overview Haydn Mursell Operational Updates Property Nigel Turner Kier Residential John Anderson Construction Steve Bowcott Q&A 4.00pm BREAK 4.15pm Kier’s Integrated Offering Steve Bowcott Kier Services Our Markets John Wilkinson Operational Upd
Slide 5: Trading update
Trading update Financials in line with expectations Construction Margin c2% and cash closely managed Encouraging level of opportunities 90% secured for FY15 on increasing revenue Services Margin in excess of 4.5% High level of bidding 85% secured for FY15 Property 15% ROCE on tra
Slide 6: An experienced team
An experienced team Haydn Mursell CHIEF EXECUTIVE Steve Bowcott CHIEF OPERATING OFFICER tl David Benson ACTING FINANCE DIRECTOR .RRE Nigel Turner John Anderson John Wilkinson Nigel Brook PROPERTY RESIDENTIAL SERVICES BUILDING UK BUILDING UK INFRASTRUCTURE OVERSEAS Nigel Dyer Paul Fletcher HIGHWAYS U
Slide 7: Kier 2020
Kier 2020 Safety Profit growth stierehig uer rr G ra > 10% Progressive el CAGR dividend Property Residential Construction >15% >15% ~~ >2.5% ROCE ROCE gag eS EBITA 1 a TOP 3 INOUR BEST SECTOR LEADING SECTORS ” PERFORMANCE CUSTOMER EXPERIENCE Customers vg +90% wy satisfaction Services EBITA BEST PEOP
Slide 8: A strong portfolio of businesses
A strong portfolio of businesses
Slide 9: A strong portfolio of businesses
A strong portfolio of businesses Revenue* £0.3bn Revenue* £1.3bn Revenue* £1.1bn Ŷ Developments Ŷ Contracting & affordable/ Ŷ Regional building Ŷ Fence-to-fence capability Capability Ŷ JVs / LABVs mixed tenure 900 units p.a. Ŷ Major Projects for Local Authorities Ŷ PFI / Structured finance Ŷ Private
Slide 10: A strong portfolio of businesses
A strong portfolio of businesses Revenue* £0.3bn Revenue* £1.3bn Revenue* £1.1bn Opportunites Capital *FY2013 pro forma incl. May Gurney and restated to reflect restructure of residential business
Slide 11: Track record of growth
Track record of growth Revenue 7% CAGR 3,500 Profit 10% CAGR 120.0 3,000 100.0 2,500 Profitfromoperations(£m) 80.0 Revenue(£m) 2,000 60.0 1,500 40.0 1,000 20.0 500 0 0.0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014* 2015* Revenue(£m) Profitfromoperations(preͲexceptional) Profitrestated
Slide 12: Progressive dividend
Progressive dividend 15% CAGR 80 Resilience in challenging times 70 60 50 DPS(p) 40 30 20 10 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014* *2014basedonmarketconsensus
Slide 13: Translating to shareholder return
Translating to shareholder return 14% CAGR 450 40% higher than index average 400 Just coming out of recession Kier 350 300 Support Svcs 250 Construction 200 FTSE 350 150 100 50 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 KierGroupPLC FTSE350Index FTSE350Construction&MaterialsIndex
Slide 14: Positive market dynamics leading the way
Positive market dynamics leading the way UKeconomyreturningtogrowth European fragility still exists Unsettled geographies Bank stability UK general election in 2015 Uncertainty Source: ONS, OBR Publicsectorborrowingstartingtodecline Public sector hiatus around election Fiscal pressures
Slide 15: Opportunity for growth in core markets
Opportunity for growth in core markets UK Construction UK Services £'m £M 60,000 250,000 50,000 200,000 40,000 150,000 30,000 100,000 20,000 10,000 50,000 0 Ͳ 2011 2012 2013 2014 2015 2016 2017 13/14 14/15 15/16 16/17 17/18 18/19 BuildingNewWork InfrastructureNewWork CurrentServicesMarkets AdjacentS
Slide 16: Creating a focussed residential offer
Creating a focussed residential offer Combined approach Specialist contracting – low/mid rise Affordable mixed tenure Private housebuilding Why? Accelerated growth Government initiatives Supply demand imbalance Share best practice & complementary skills Risk management Design, proc
Slide 17: Our new reporting segments from 1 July 2014
Our new reporting segments from 1 July 2014 FY2013 FY2013 Revenue* Revenue* Property £0.1bn £0.2bn Property Residential £0.2bn Construction £1.4bn Construction £1.3bn £1.1bn Services Services £1.1bn Recycle capital released from private land bank into mixed tenure WIP Construction margin: relati
Slide 18: Vision 2020: what we want to be known for
Vision 2020: what we want to be known for Operate a safe business – always Excel at what we do and create an engaging and stimulating environment for our people Ensure robust, sustainable performance Top 3 in our chosen markets Optimise performance across our business through technology in
Slide 19: Capital allocation & dividend
Capital allocation & dividend Capital discipline Net debt/EBITA <1 by 2017 Working capital management Construction and Services Recycle Residential capital to service affordable housing growth Strict investment hurdles maintained Property, Residential and IT systems Progressive divid
Slide 20: Medium term profitability
Medium term profitability Profit growth Double digit CAGR to 2020 Construction Revenue growth, more particularly in Infrastructure and Overseas > 2.5% operating margin Services Revenue growth from combined Kier and MG, and selected acquisitions > 5% operating margin Residential R
Slide 21: Creating platforms for growth
Creating platforms for growth Strong portfolio of businesses with integrated service offering Accelerated growth to be Top 3 in our chosen markets Profit: Double digit CAGR Experienced team with ambition for Kier
Slide 22: Slide 22
Slide 23: Nigel Turner
Nigel Turner Executive Director, Property Division Property Division Capital Markets Day 3 July 2014
Slide 24: The integrated offering
The integrated offering
Slide 25: What we do
What we do GeoPost £9.6m UK Supreme Court Gloucester Fire Station £34m £10m Generate minimum of 15% ROCE on Group cash Predominantly non-speculative trader developers Urban regeneration specialists – we invest and renew
Slide 26: Our strategy
Our strategy Delivering a stable and predictable profit stream Increase our market share as a trusted development partner Maintaining a balanced, largely non-speculative portfolio Providing a stable 15% ROCE from Group investment Average investment to date £70m Revenue (£m)* Operating prof
Slide 27: Our markets
Our markets North North Kent Kent Police Police Catterick Average 20 schemes annually Average lot size £10 – 30m 725,000 sq ft commercial space 420 residential units 264 student beds 220 hotel keys Hammersmith Note: By percentage value
Slide 28: Integrated benefits
Integrated benefits Other contractors 20% ƒ £50m Kier Construction 80% ƒ £200m Services £2m pa for 25 years Construction revenues to Group circa 80% volume 2013 service contracts £2m pa for 25 years Further opportunities for greater cross selling
Slide 29: Occupier pre-lets
Occupier pre-lets Feltham - GeoPost Hayes - Costco Walsall – Leisure Destination
Slide 30: Land regeneration
Land regeneration Audit House – 58 VE Catterick – leisure and retail
Slide 31: Joint ventures
Joint ventures Walthamstow station - before Walthamstow station - after £90m revenue to date Solum (Kier & Network Rail JV) Strong pipeline Watford Health Campus 350 private/rented potential Test Valley Walworth Regeneration Area Further opportunities exist
Slide 32: Joint ventures
Joint ventures Watford, Health Campus
Slide 33: Local authorities
Local authorities Further potential to cross sell from key clients Trusted partner – we deliver and solve problems
Slide 34: Trade City
Trade City Bracknell
Slide 35: Trade City
Trade City 100% Kier 220k sq ft 190k sq ft let or sold (85% sold) Completed 2013-14 440,000 sq ft delivered in last 2 years across 7 locations 4 new schemes secured for 2015/16 pipeline £66m in JV’s with DTZIM and Investec JV’s and debt improve ROCE
Slide 36: Structure finance
Structure finance 22 schemes delivered 10 retained Currently bidding: student accommodation hospitals estates partnerships Gloucester Fire Station North Kent Police
Slide 37: Competitive advantage
Competitive advantage We have a secure pipeline Clients like the security of a large Group The Kier balance sheet sets us apart We are often the front door of Kier Our ability to leverage our investment Development sites secured (% against business plan) June 15 > 71% 15% 14% Identified Un
Slide 38: Future drivers
Future drivers Occupier demand is improving There is life outside the core south east Weight of money is driving valuations higher Prospects look stable with potential for selective growth Leverage cash potential to enhance returns
Slide 39: Summary
Summary Strong pipeline of short – medium term development stock Group cash available for investment in Property 22.0 £100m rising towards £200m in 20.5 the medium term 15.3 ROCE approaching 20% due to JVs, etc Competing for cash against other investments as is naturally a good thing Roo
Slide 40: Slide 40
Slide 41: John Anderson
John Anderson Executive Director, Kier Living Residential Division Capital Markets Day 3 July 2014
Slide 42: The integrated offering
The integrated offering
Slide 43: Residential market conditions
Residential market conditions Growing imbalance between supply & demand Improving economic conditions Increasing employment Fluid mortgage market Consumer confidence improving All political support for the need for more housing
Slide 44: Housing supply
Housing supply Current forecasts suggest 230,000 – 300,000 new homes required annually Over the past decade, 115,000 pa average built by the private sector Housing shortfall between 2004 and present: 1m Population since 2001 has risen by 5m
Slide 45: UK housing market - housing supply
UK housing market - housing supply Even on optimistic scenario, current plans won’t deliver enough homes *Source: DCLG
Slide 46: UK housing market - housing completions
UK housing market - housing completions (England) 400 350 300 250 000 200 150 100 50 0 1946 1950 1954 1958 1962 1966 1970 1974 1978 1982 1986 1990 1994 1998 2002 2006 2010 Public RSL Private *Source: DCLG
Slide 47: Kier Living: Consolidating residential skills
Kier Living: Consolidating residential skills Private homes Specialist contracting (c. 600 homes p.a.) (c. 500 homes p.a.) • Contain controlled radius • Measured growth • Continue transition from • Targeted product old land to new land complementing wider • Recycle cash release into ambitions afford
Slide 48: Financial performance: Today
Financial performance: Today
Slide 49: Financial performance: 2020
Financial performance: 2020
Slide 50: 2014
2014 500 1000 750 500 1000
Slide 51: Case study: Manor & Kingsway, Derby
Case study: Manor & Kingsway, Derby Surplus NHS land procured through the HCA Developer Partner Panel Competition. Kier were selected January 2012 for a residential led mixed-use development comprising: 700 new homes 21,600m² of B1 employment space 500 m² retail 7.5 hectares of public open s
Slide 52: Case study: Woking
Case study: Woking 28 year PFI contract with Kier in 50;50 Partnership with Thames Valley HA to build & maintain 373 new homes including 224 social rented for Woking Borough Council Homes designed to Lifetime Homes standards and Code for Sustainable Homes Level 4.
Slide 53: Summary
Summary Unprecedented housing supply/demand imbalance with an improving employment levels and a fluid mortgage market Kier uniquely placed & geographically well balanced Focussing on mixed tenure model building on third party land. No material increase in capital required over medium term
Slide 54: Kier Living
Kier Living
Slide 55: Steve Bowcott
Steve Bowcott Chief Operating Officer Construction Division Capital Markets Day 3 July 2014
Slide 56: Slide 56
Slide 57: What we do: Building
What we do BUILDING Revenue: £800m Health, education, defence, £9m Data £19.5m Gateway Centre,Student Slough Accommodation, Lincoln commercial, residential No. of frameworks: >40 Regional coverage Market leader 53% private sector £25m £11.5m Chester WaltonCultural Neuro Centre Centre
Slide 58: What we do: Major Projects
What we do MAJOR PROJECTS Revenue: £250m Projects over £50m RAF Lyneham J1 Arthouse Self delivery of M&E Broadmoor Hospital £115m RAF Lyneham £121m MoD National Capital Works Framework Kings Cross >£100m Camden Civic Broadmoor OfficesRedevelopment Hospital
Slide 59: What we do: Infrastructure
What we do INFRASTRUCTURE Revenue: £400m Highways and bridges, nuclear, rail, Chelsea River Bridge Crossrail water, energy Crossrail: total £1.2bn, Kier share £420m Thames Water: total £174m, Kier share £58m Hinkley: £100m+ earthworks in JV Rail: new frameworks £35m pa Oxford Plymouth
Slide 60: What we do: Overseas
What we do OVERSEAS Revenue: £150m Middle East: Abu Dhabi, Dubai, Dubai University Hong Kong Saudi Arabia Far East: Hong Kong Caribbean: Trinidad, Jamaica, St Kitts, Haiti Infrastructure, Utilities, Major building, regional building Marriott Hotel - Haiti
Slide 61: Resilient performance through down cycle
Resilient performance through down cycle 1,800 3.0% 1,600 1,400 Operatingmargin% 1,200 2.0% Revenue(£m) 1,000 800 600 1.0% 400 200 0 0.0% 2006 2007 2008 2009 2010 2011 2012 2013 Revenue(£m) Profitfromoperations%
Slide 62: Our key differentiators position us for growth
Our key differentiators position us for growth Market leader Geographical coverage Flexible project size Strength and flexibility in most sectors – good private/public split Stable frameworks Cost discipline programmes have delivered a substantially more efficient business – headcount re
Slide 63: Contract Awards
Contract Awards (12 months to May 2014) Contractor Deals Value £m 1. Kier 273 1,875 2. Balfour Beatty 135 1,740 3. Morgan Sindall 192 1,276 4. Royal Bam 111 1,081 5. Carillion 33 1,042 6. Costain 39 987 7. Skanska 18 935 8. Wates 132 934 9. Willmott Dixon 179 874 10. Galliford Try 85 822 Source: Con
Slide 64: Our key differentiators position us for growth
Our key differentiators position us for growth Market leader Geographical coverage Flexible project size Strength and flexibility in most sectors – good private/public split Stable frameworks Cost discipline programmes have delivered a substantially more efficient business – headcount re
Slide 65: Strong pipeline
Strong pipeline Forward workload % of FY15 Total revenue Construction 84% Infrastructure 98% 90 % Overseas 76% Very selective bid approach Only selected single stage processes Majority of bids 2-stage and negotiated tender Balance between cash and margin
Slide 66: Positive sentiment in our markets
Positive sentiment in our markets Construction PMI continuing its upward trend Construction PMI continuing its upward trend Balanced growth across all sectors Rapid growth driving cost pressures Local authority spend remains under pressure Source: Markit/CIPS
Slide 67: UK Construction: Growing our addressable market
UK Construction: Growing our addressable market Construction output excl. Residential (New Work, 2010 prices) New Infrastructure Output by sector 2013 £'m 60,000 50,000 40,000 30,000 Non-residential new Building output by sector 2013 20,000 10,000 0 2011 2012 2013 2014 2015 2016 2017 BuildingNewWork
Slide 68: Overseas: Substantial opportunity in our key territories
Overseas: Substantial opportunity in our key territories Significant organic opportunity Middle East support via ECC funding Skillset: blend of ex-pat/local Source: AECOM, Deloitte, Management estimates
Slide 69: Target sectors
Target sectors 5 fa) 2A G ii & = Education Custodial Warehouse Health & fence Industrial Shopping High Rise Aviation a & Logistics Blue light centres s 3 a’ £) -@' x ext 1 #B @ duh & he HE 3 “we a — 3 Nuclear Rail Energy Bridges Water Ports Aviation Industrial Oil & gas = and Highways & Waterways =
Slide 70: Summary
Summary Broad capability – strong regional presence Resilient performance Strong pipeline Exciting opportunities in Infrastructure and Overseas Well positioned for growth in fast improving markets
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Slide 72: Steve Bowcott
Steve Bowcott Chief Operating Officer Kier’s Integrated Offering Capital Markets Day 3 July 2014
Slide 73: Our integrated approach to sector leadership
Our integrated approach to sector leadership
Slide 74: Government spending with contractors
Government spending with contractors Contractor 2012 2013 Total £m £m £m Kier 788 603 1.39bn Balfour Beatty 576 371 948 Carillion 400 397 797 Willmott Dixon 385 302 686 Amey 340 314 654 Interserve 289 341 630 BAM 242 196 438 TOTAL £3.02bn £2.52bn £5.54bn Source: Institute for Government
Slide 75: Our integrated approach to sector leadership
Our integrated approach to sector leadership
Slide 76: Why an integrated approach?
Why an integrated approach? Market sector Property Residential Construction Services Transportation 9 9 9 Residential (incl. housing maintenance) 9 9 9 9 Utilities 9 9 Overseas 9 9 Commercial & Mixed use 9 9 9 Education 9 9 9 Energy 9 9 9 Health & Blue light 9 9 9 Defence 9 9 9 9 Retail & Leisure 9
Slide 77: The integrated offering: North Tyneside
The integrated offering: North Tyneside 2013: Kier builds first 2010 – 14: Kier: LA-owned housing for • Completes library 25 years refurbishment • Builds Wallsend Park 2014: Discussions re • Builds primary school building 300 homes 2013: Kier awarded 2009: Kier awarded 10 + £100m Swan Hunter 5 year
Slide 78: The integrated offering: Northamptonshire CC
The integrated offering: Northamptonshire CC 2012: Local transport 2008: MGWSP JV 2014: St Johns Hall interchange awarded 8 year contract Student Residence Construction of the new to manage and maintain 458 bedroom development £7m bus interchange in county highways which was completed in Northampton
Slide 79: The benefits of a Strategic Alliance
The benefits of a Strategic Alliance The County Council, through the Highway Service Contract, represents a valued key client for Kier and WSP and a strong relationship has been built on trust and understanding of each others key aims and aspirations. With the current level of financial uncertainty
Slide 80: The integrated offering: Rail
The integrated offering: Rail 2008: Solum Joint Crossrail: 2014: Increasing market Venture – Tendered mixed BAM Ferrovial Kier JV presence culminating in use J/V with Network Rail delivering £1.2bn works recent award on Western to optimise regeneration & Wales framework of rail land Kings Cross/Arge
Slide 81: May Gurney: Integration Update
May Gurney: Integration Update Integration on track People integration: similar cultures IT challenging but progressing Organisation aligned to sector focus Integration costs forecast at c. £28m as planned Cost synergies on track £5m in FY14 £15m in FY15 £20m in FY16 Operational
Slide 82: May Gurney: Revenue Synergies
May Gurney: Revenue Synergies 100% contract retention Key wins: Anglian Water, WPD, Network Rail, NCC Revenue synergies MG (pa) Future (pa) Network Rail Western & Wales £10m £35m Anglian Water £18m £48m Northamptonshire County Council £22m £25m+ Highways Agency 0 ? Construction into Hard Ser
Slide 83: Summary
Summary New and further investment in sector leadership Integrated offering extended to additional clients May Gurney integration on track Further revenue synergies expected
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Slide 85: John Wilkinson
John Wilkinson Executive Director, Kier Services Kier Services Capital Markets Day 3 July 2014
Slide 86: The integrated offering
The integrated offering
Slide 87: Kier Services ...
Kier Services … Combines the legacy Kier and May Gurney Services lines, creating a business with broad capability in core markets Has significant growth potential – currently we have <2% share of current addressable markets Is in sustainable markets with a £7bn qualified pipeline Is using th
Slide 88: Over £200bn of UK services market opportunity
Over £200bn of UK services market opportunity Services Market 250,000 Significant growth potential through: 200,000 Increasing share of current £m 150,000 markets from 1.4% today 100,000 Assessing and 50,000 entering adjacent Ͳ Services markets 13/14 14/15 15/16 16/17 17/18 18/19 CurrentServices
Slide 89: Sources of growth
Sources of growth Medium Term Current Revenue FacilitiesManagement FacilitiesManagement Utilities Utilities Highways Highways HousingMaintenance HousingMaintenance Fleet&PassengerServices Fleet&PassengerServices Environmental Environmental Significant organic growth in Utilities and Highways Acq
Slide 90: Strong competitive advantage
Strong competitive advantage Strong client relationships Trusted by clients to deliver A breadth of service capabilities, enabling us to tailor solutions A record of partnering with clients in strategic decision-making Investment in the customer (end user) experience of our services Fina
Slide 91: A breadth of services
A breadth of services 1. We have strong client relationships the public sector, especially local authorities housing associations regulated utilities corporates 2. A combined service portfolio that is enabling greater client penetration (eg. Northamptonshire)
Slide 92: Housing maintenance
Housing maintenance What we do Leading provider, maintaining > 300,000 homes for local authorities, housing associations and private landlords Moving from repair and maintenance to maintain and renew through asset management Differentiation Scale advantage Self-delivery providing control ove
Slide 93: Facilities Management
Facilities Management What we do Asset management, building services, soft FM and energy services for public sector and corporate clients Differentiation Ability to tailor services using the breadth of Kier capabilities Target growth areas Achieving critical mass Adjacent FM markets, includi
Slide 94: Growth strategy
Growth strategy To achieve margins of 5%+ over the medium term, we will: 1. Retain existing profitable business, through a focus on delivery and customer service 2. Leverage the enlarged portfolio to cross-sell services to meet changing client needs 3. Achieve year on year operational improvements,
Slide 95: Summary
Summary A new breadth of service capabilities, with strong and growing positions in core markets Over £200bn of Services market opportunity New market entry in all Services businesses Sustainable revenue streams with margin growth
Slide 96: Paul Fletcher
Paul Fletcher Managing Director, Utilities & Waterways Services Division Capital Markets Day 3 July 2014
Slide 97: The integrated offering
The integrated offering
Slide 98: Water capability
Water capability Meter installation Design & build M&E projects Design & build civils projects Burst repairs Mains replacement Repair and maintenance
Slide 99: Power and gas capability
Power and gas capability Mains Replacement Mains installation LV cable lay We repair and replace overhead pole for WPD in the south west Governor installation Connections and terminations Pole renewal and replacement
Slide 100: Telecoms capability
Telecoms capability Instrument testing Fabric repairs Electrical testing Structural inspection High mast access
Slide 101: Waterways capability
Waterways capability Flood prevention projects Weir maintenance Heritage maintenance services Lock maintenance Bridge replacement Reservoir works
Slide 102: Specialist and supporting services
Specialist and supporting services Under-pressure branch drilling M&E installation D&B MEICA In house civil, MEICA Design Service (including Panel Manufacture) Directional drilling Suction excavation MCC manufacturing
Slide 103: Geographical spread and key clients
Geographical spread and key clients England & South Wales England & Wales National Coverage inc. N.Ireland
Slide 104: The integrated offering
The integrated offering Service Provision Design & Build Dynamic Scheduling & Linking with Property, Linking with Call Centres Construction and Infrastructure Linking with Highways, FM Residential and Housing Maintenance Customer Services Repair & Maintain Linking with all areas of Linking with FM &
Slide 105: Market analysis
Market analysis Current market Potential market £19.7bn sub-sector split sub-sector split £20bn 2013/14 2018/19 £17.5bn 100% £0.4bn £0.5bn 90% £3.5bn £3.4bn £15bn 80% CAGR £13.8bn 13/14- Annual Expenditure (£bn) £2.7bn £2.3bn 18/19 Annual Expenditure (£bn) 70% 60% Waterways 5.1% £10bn £6.0bn Telco 5
Slide 106: Growth – Turnover by sector
Growth – Turnover by sector Current Revenue Medium Term (2013/14) Water Gas Power Telecoms Waterways
Slide 107: Our competitive advantage
Our competitive advantage Current Less than 10% competitively tendered Range of value adding services Exceptional client relationships – never lost an extension potential The Kier balance sheet Future Organic growth supported by bolt-on acquisition World class customer service, supported
Slide 108: The last 12 months bidding
The last 12 months bidding Sector Frameworks Secured/ Preferred Bidder Estimated Value Water • Anglian Water – IOS, IMDS £30m/pa • Bournemouth Water – R&M Energy • Western Power Distribution – Devon & Cornwall £47m/pa • Western Power Distribution – Avon & Somerset • Scotia Gas Networks – Dundee and
Slide 109: The future
The future Secure extensions Increase our Expansion into power service offering transmission market to existing clients Broaden flood protection Entry into fixed telecom capability into local market authority sector Greater Integration and move into adjacent markets
Slide 110: Slide 110
Slide 111: Nigel Dyer
Nigel Dyer Managing Director, Highways Services Division Capital Markets Day 3 July 2014
Slide 112: The integrated offering
The integrated offering
Slide 113: Highways - a £12bn problem
Highways - a £12bn problem £976m £168m £121bn
Slide 114: What we do
What we do 25,000 miles of highway maintained 150,000 jobs 16% in 24hrs Over 8517 sq m
Slide 115: What we do
What we do Keeping 5m people moving everyday 150,000 jobs 16% in 24hrs
Slide 116: How we do it
How we do it 9,000,000 m2 20,000 tonnes 500,000 m2 22,000 signs made and installed 500,000 street lights
Slide 117: Operating footprint
Operating footprint Suffolk Lincolnshire= (s2peeee County Council COUNTY COUNCIL YE Sa Hull yCumbrias SURREY [eed City Council ~— County ¢ BLACKBURN) COUNTY COUNCIL @) ouncil DarweN East Sussex County Council Torbay Council (Harraubounci.) aa NG a JON LONDON
Slide 118: The Future
The Future Innovation & Services Leadership Services Portfolio Proven Capabilities Utilisation (Kier & Sufficient Capacity Group) Outstanding Performance (Products & Services) Committed To Client Customer Benefits Realisation Aware & Responsive Best Trusted Value for Strategic Continuous Money Partn
Slide 119: Market drivers
Market drivers The 2013 Autumn Statement announced additional spend on highways maintenance of £976m pa from 2015/16 to 2020/21 National Infrastructure Plan (2013) highlights: Objective is to equip the UK with world class infrastructure which rivals all OECD counterparts TimeLost(DuetoCongesti
Slide 120: Our markets
Our markets Highways Maintenance Market Outsourced Market DfT LA Local Capital Authority In-House £1,000m LA £1,525m Services 23% Revenue 64% £1,931m £2,300m 45% 54% Outsourced DfT HA allocation Services Highways £1,000m £2,369m Agency 23% 55% £844m 36% KeyMarketDrivers Awareness & Investing In & St
Slide 121: Market share growth potential
Market share growth potential Proven vertically 8% integrated proposition and an established Kier 14% market position Balfour Beatty 42% Ringway Strong customer Amey references 13% Skanska Breadth and scale of EM Highways our integrated offer Internal DSO 11% 4% 8% Source: Company accounts
Slide 122: Future opportunities
Future opportunities Unitary County Authorities Councils Local Authorities District and Town City Councils Councils LocalEnterprise Overseas Partnerships Developers Markets &Developers Local Authorities Department for Highway Highways Transport Services Agency Current Markets Targeted, Adjacent Mark
Slide 123: Case study: customer partnership
Case study: customer partnership Regional growth Asset Highways maintenance exploitation Long term investments Project Horizon
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Slide 125: Lucy Robinson
Lucy Robinson Deputy Chief Executive, Suffolk County Council Kier Group Capital Markets Day 3 July 2014
Slide 126: London
LONDON
Slide 127: Slide 127
Slide 128: Suffolk's Competitive Advantages
Suffolk’s Competitive Advantages Greenest County
Slide 129: Invest in Suffolk
Invest in Suffolk SUFFOLK The bright choice for your business www.investinsuffolk.com “1 Suffolk County Council
Slide 130: Revenue Expenditure 2014-15 (£700m)
Revenue Expenditure 2014-15 (£700m) (excluding schools)
Slide 131: Capital Expenditure 2014-15 (£93m)
Capital Expenditure 2014-15 (£93m)
Slide 132: Eastern
Eastern Facilities Management Solutions. AE your Suffolk libraries .. expanding horizons [EIKIER SensingChange Together we create opportunities for people with sight and hearing loss core §& LeadingLives Your life / Our support Suffolk County Council
Slide 133: Suffolk Highways
Suffolk Highways “41 Suffolk WHY P => County Council [EIKIER MG County Council
Slide 134: Endeavour House
Endeavour House Suffolk County Council
Slide 135: Haydn Mursell
Haydn Mursell Chief Executive
Slide 136: Creating platforms for growth
Creating platforms for growth Strong portfolio of businesses with integrated service offering Accelerated growth to be Top 3 in our chosen markets Profit: Double digit CAGR Experienced team with ambition for Kier
Slide 137: Kier 2020
Kier 2020 Safety Profit growth stierehig uer rr G ra > 10% Progressive el CAGR dividend Property Residential Construction >15% >15% ~~ >2.5% ROCE ROCE gag eS EBITA 1 a TOP 3 INOUR BEST SECTOR LEADING SECTORS ” PERFORMANCE CUSTOMER EXPERIENCE Customers vg +90% wy satisfaction Services EBITA BEST PEOP
Slide 138: Kier
Fa KIER