Slide 1: 2006 Preliminary Results
2006 Preliminary Results 7 March 2007
Slide 2: Anthony Rabin
Anthony Rabin Balfour Beatty
Slide 3: Headline numbers
Headline numbers 2005 2006 Revenue £4,938m £5,852m +19% Pre-tax profit* £134m £152m +13% Adjusted eps* 24.1p 27.3p +13% Full-year proposed dividend 8.1p 9.1p +12% Net cash (excluding 100% PPP) £315m £305m Order book £7.6bn £9.1bn +20% * Before exceptional items and amortisation of intangible assets
Slide 4: Performance by sector
Performance by sector £m 2005 2006 Building, Building Management 35 43 +23% and Services
Slide 5: Building, Building Management and Services
Building, Building Management and Services £m 2005 2006 35 43 • Birmingham and Glasgow Hospital projects commence • Procurement changes in Metronet stations programme • Further strong growth in affordable housing • £750m of new facilities management orders • First contribution from Charter in the US
Slide 6: Building, Building Management and Services
Building, Building Management and Services Programme & Facilities Management £421m Building Construction £1,309m +32% +19% Building Services +12% £415m Revenue £2,145 million (+20%) (2005: £1,787 million) Order book £3.6 billion (+50%) (Dec. 2005: £2.4 billion)
Slide 7: Performance by sector
Performance by sector £m 2005 2006 Building, Building Management 35 43 +23% and Services Civil and Specialist Engineering 49 55 +12% and Services
Slide 8: Civil and Specialist Engineering and Services
Civil and Specialist Engineering and Services £m 2005 2006 Civil and specialist engineering 29 25 Services 20 30 49 55 • First contribution from Birse • Good progress in Hong Kong and Dubai • Further contract losses in US Central Division • Contract provisions in Trans4m • Northern Gas Networks and
Slide 9: Civil and Specialist Engineering and Services
Civil and Specialist Engineering and Services UK Civil Engineering £782m UK Utilities & Services £821m +28% +27% International +17% £779m Revenue £2,382 million (+24%) (2005: £1,920 million) Order book £4.5 billion (+12%) (Dec 2005: £4.0 billion)
Slide 10: Performance by sector
Performance by sector £m 2005 2006 Building, Building Management 35 43 +23% and Services Civil and Specialist Engineering 49 55 +12% and Services Rail Engineering and Services 32 38 +19%
Slide 11: Rail Engineering and Services
Rail Engineering and Services £m 2005 2006 UK businesses 37 23 Overseas businesses (5) 15 32 38 • UK profit level reflects last year’s one-off settlements • Good progress on UK projects • East London Line awarded • US losses significantly reduced • Good progress in continental Europe
Slide 12: Rail Engineering & Services
Rail Engineering & Services Other £363m -4% +5% UK £407m Revenue £770 million (2005: £766 million) Order book £1.0 billion (Dec 2005: £1.2 billion)
Slide 13: Performance by sector
Performance by sector £m 2005 2006 Building, Building Management 35 43 +23% and Services Civil and Specialist Engineering 49 55 +12% and Services Rail Engineering and Services 32 38 +19% Investments and Developments 20 32 +60%
Slide 14: Investments and Developments
Investments and Developments 2005 2006 £m PPP Barking Total PPP Barking Total Share of results of JVs & 22 8 30 36 15 51 associates Group operating loss* (10) (19) I & D operating profit 20 32 Group net finance income 17 - Subordinated debt interest income 5 8 I & D net result 42 40 * Including Prop
Slide 15: Investments and Developments
Investments and Developments • Financial close for Birmingham Hospital and Birmingham Schools • Preferred bidder for Knowsley Schools, Derby Street Lighting and Fife Hospital • Pre-qualification and bidding opportunities remain strong • Exeter International Airport acquired in Jan. 2007 • Internatio
Slide 16: Directors' Valuation £341m
PPP portfolio Directors' valuation: December 2006 Total equity committed: £304m Cash invested: £173m Other £18m Metronet £59m Connect £113m Directors' Transform £13m Valuation £341m Consort £138m
Slide 17: Performance by sector
Performance by sector £m 2005 2006 Building, Building Management 35 43 +23% and Services Civil and Specialist Engineering 49 55 +12% and Services Rail Engineering and Services 32 38 +19% Investments and Developments 20 32 +60% Corporate costs (21) (24) Profit from operations* 115 144 +25% Net financ
Slide 18: Operating profit v operating cash flow
Operating profit v operating cash flow £m 2005 2006 Group operating profit 58 61 Depreciation 41 43 Impairment and amortisation charges 12 17 Other items (5) 3 Working capital decrease 61 92 Cash generated from operations† 167 216 PPP subsidiaries – adjustment - 1 Cash generated from operations 167
Slide 19: Balance sheet cash movement
Balance sheet cash movement £m 2005 2006 Opening net cash 311 315 Cash generated from operations 167 216 Dividends from JVs and associates 19 24 Capital expenditure and financial investment (71) (78) Acquisitions and disposals (42) (80) Buy-back of preference shares (11) (19) Dividends, interest and
Slide 20: Acquisitions
Acquisitions £m Edgar Allen 12 Charter 9 Birse 57 Deferred consideration 2 80
Slide 21: Exceptional items
Exceptional items £m Profit from operations: National Engineering Construction – goodwill impairment (16) – reorganisation costs (2) (18) Birse integration costs (3) Hatfield fine reduction 2 (19) Finance costs: Premium on buy-back of preference shares (7) (26) Tax on exceptional items 1 Net excepti
Slide 22: Pensions under IAS 19
Pensions under IAS 19 £m 2005 2006 Defined benefit schemes: P&L charge 40 39 Employer cash contributions 33 36 Balance sheet liability (gross) 280 288 Balance sheet liability (net of deferred tax) 201 212 Defined contribution schemes: P&L charge & contributions 9 13
Slide 23: Group balance sheet
Group balance sheet Dec Dec £m 2005 2006 Goodwill and intangible assets 284 436 Net cash (excluding PPP) 315 305 Preference shares – liability (98) (90) PPP subsidiaries - - Non-current assets + working capital 14 21 Non-recourse net debt (14) (21) Other assets / liabilities (209) (264) Shareholders
Slide 24: Summary
Summary • Continuing growth in profits and earnings • Strong cash flow • Strong position to support future growth
Slide 25: Ian Tyler
lan Tyler Balfour Beatty
Slide 26: Balfour Beatty growth 2006 and beyond
Balfour Beatty growth 2006 and beyond • Medium-term - New infrastructure investment markets - Knowledge-based businesses - UK regional business expansion • Longer-term - Expansion of non-UK domestic businesses
Slide 27: Progress report
Progress report • Balfour Beatty Capital • Balfour Beatty Management • Birse • Centex
Slide 28: PPP project portfolio timeline
Mar 1996 May 1996 July 1996 Mar 1998 Aug 1998 Aug 1998 May 2000 Connect M1-A1 Connect A50 Connect A30-35 Consort Durham Powerlink/ Consort Aberdeen Env. PADco Edinburgh Services £290m £42m £127m £90m £184m £220m £92m Highway Highway Highway Hospital Power Systems Hospital Water July 2000 Oct 2000 Ap
Slide 29: Developing a project
Developing a project STAGE ONE STAGE TWO STAGE THREE STAGE FOUR STAGE FIVE Pre-bid Bidding Preferred bidder Construction Operations Marketing Marketing Project finance Design dev. Operational mgt Business dev. Business dev. Cost modelling Construction mgt. Community Bid submissions Bid submissions C
Slide 30: Exeter International Airport
Exeter International Airport • One of the fastest growing airports in the UK • Forecast growth in passengers to 2m by 2016 and 3m by 2029 • Significant growth in non- aeronautical revenues • Already operating at peak capacity – to develop further requires significant capex • Expansion of Flybe engin
Slide 31: International capital projects
International capital projects • US Short-listed for Oakland Airport Connector project, California • Germany Bid submitted for Bremen Hospital • Singapore Bid submitted for Further Education Facility
Slide 32: Professional and technical services
Professional and technical services • Alliances with United Utilities and National Grid • King’s Cross St Pancras Underground Station • BAA complex build integration • M25 PPP
Slide 33: UK infrastructure
UK infrastructure Mansell growth 2003-2006 +94% +59% +34% Revenues Order book Framework value
Slide 34: Birse Group plc
Birse Group plc 2005 revenues - £340m 3% 4% Regional Civils 11% Rail & Metro 35% 17% Building Water / Process 30% Services Plant
Slide 35: BBCEL and Birse combined
BBCEL and Birse combined Revenue and market share £110m 14% £100m 14% £94m 8% £137m 5%
Slide 36: Key criteria for overseas acquisition
Key criteria for overseas acquisition • Critical mass • Acceptable business environment • Sophisticated customers • Leadership
Slide 37: Centex Construction fit with strategic priorities
Centex Construction fit with strategic priorities • Leader in selected growth markets • Proven senior management team • Successful record of focused growth • Over 95% of its revenue negotiated • Logical extension of our Heery presence • Compatible culture and processes • Substantial growth potential
Slide 38: Centex Construction financial performance
Centex Construction financial performance Revenue Operating profit $1.7bn $1.6bn $1.6bn $1.6bn $26.8m $27.5m $23.5m $16.4m 2004 2005 2006 9 mths to 2004 2005 2006 9 mths to 31 Dec 31 Dec 2006 2006 Year to 31 March Year to 31 March
Slide 39: Navy South-East housing project
Navy South-East housing project • $525 million • 5 year programme • 2,116 new homes • 11 bases in 5 states
Slide 40: Centex Construction order book
Centex Construction order book $5.6bn $5.2bn $4.6bn $2.7bn $3.7bn $2.2bn $2.6bn $2.0bn $3.0bn $2.9bn $2.0bn $1.7bn Mar 04 Mar 05 Mar 06 Dec 06 Contracted backlog Awarded but not contracted work
Slide 41: Growth enhancement through Centex Construction
Growth enhancement through Centex Construction • Develop careful geographical market replication • Exploit potential for upstream/downstream offer with Heery • Create leadership in emerging procurement methods • Develop business in building-based PPP
Slide 42: Balfour Beatty
Baltour Beatty