Kier Group Plc · LSE:KIE
Kier — HY25 Earnings Presentation
42 slides from Kier's earnings presentation, Mar 11, 2025
Slide 1: Results for the six months ended 31 December 2024
Kier Group plc Results for the six months ended 31 December 2024 11 March 2025
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, together with its subsidiaries and subsidiary undertakings, the “Group”) or any of its directors or any other person as to the accuracy, completeness or fairness of th
Slide 3: Results Summary
Results Summary Andrew Davies Chief Executive
Slide 4: HY25 Highlights
HY25 Highlights - Significant operational and financial progress - Delivered revenue growth of 5% and adjusted operating profit growth of 3% - Adjusted operating margin maintained at c.3.4% - Strong balance sheet; net cash of £58m and month end average net debt materially reduced to £(38)m - Record
Slide 5: Long-term sustainable growth plan
Long-term sustainable growth plan Long-term targets to drive shareholder value - Revenue - GDP + through the cycle - Adjusted operating margin 3.5% + - Cashflow conversion of operating profit c.90% - Balance sheet: average net cash position with investment of surplus cash Natural Resources, - Sustai
Slide 6: HY25 Results
HY25 Results Simon Kesterton Chief Financial Officer
Slide 7: Financial highlights
Financial highlights Revenue & profit growth; material reduction in average month-end net debt £’m HY25 % HY24 % Δ FY24 % Revenue 1,979 1,883 5.1% 3,969 - 5% revenue growth Adjusted Operating Profit 66.6 3.4 64.7 3.4 2.9% 150.2 3.8 - Adjusted operating profit of £66.6m up 2.9% (3.4% margin consisten
Slide 8: Revenue performance
Revenue performance Continued growth in Infrastructure Services and Construction 5% - Revenue increase of 5% in HY25 - Infrastructure – growth of 9%, capital 17 works ramp up 1,979 88 (9) - Construction – growth of 2% and a strong order book converting to revenue - Property transactions expected to
Slide 9: Adjusting operating profit
Adjusting operating profit Operating profit increase driven by volume growth and management actions 3.5 - Adjusted operating profit of £66.6m, 5.2 66.6 up 2.9% 64.7 (3.7) - Consistent HY margin of 3.4% (3.1) - AOP benefits from: o Increased volumes o Management actions - Offset by: HY24 Volume/ Pric
Slide 10: Adjusting items (excl. amortisation)
Adjusting items (excl. amortisation) Largely relate to fire and cladding costs £’m HY25 HY24 FY24 Adjusting items Fire and cladding compliance costs 7.5 7.2 15.0 - Fire and cladding compliance costs net Legacy legal claims - 1.1 - of insurance receipts Property-related items 2.1 - 7.2 Recycle of for
Slide 11: High quality order book
High quality order book Order book of £11.0bn underpinned by £158 billion of framework positions - Order book at £11.0bn (FY24: £10.8bn) Secured revenue - Underpinned by long-term frameworks and contracts worth up to £158bn (total advertised values) - c.98% of FY25 revenue secured 6,000 - De-risked
Slide 12: Free cash flow
Free cash flow Free cash flow reflecting seasonal cycle £’m HY25 HY24 HY23 FY24 - Working capital outflow includes c.£20m of additional Adjusted EBITDA 100.5 92.2 90.9 208.1 investment into property (non-JV) Property investment (non-JV) (19.1) (1.7) (21.6) (2.2) o seasonal working capital inflow exp
Slide 13: Net cash movement
Net cash movement Half year net cash position of £58m (HY24: £17m) reflecting seasonal working capital & investments 167 (50) (15) (17) (4) (7) 58 (15) (1) FY24 Free Adjusting Net investment Pension Purchase Dividends paid Other HY25 cash Items in Joint Ventures deficit payment of own flow & fees sh
Slide 14: HY25 average month-end net debt
HY25 average month-end net debt Significant free cash generation has enabled material deleveraging £582m - FY21 to FY24 significant reduction in average month- end net debt - HY25 average month-end net debt materially reduced to £37.6m - FY25 –expected year-on year improvement with free Average debt
Slide 15: Financing and liquidity
Financing and liquidity Long-term debt facilities in place with debt capital markets open to the Group Financing update Maturities by calendar year - Refinancing completed in February 2024 300 - Committed debt facilities at 31 December 2024 of c.£548m 250 - January 2025 - paid down USPP and reduced
Slide 16: Capital allocation
Capital allocation Creating value with disciplined capital allocation approach Capital Allocation 1 Capex - Ongoing investment to support the business - Progressive policy increasing through earnings growth 2 Ordinary dividend - Targeting dividend cover of c.3x through the cycle - Disciplined invest
Slide 17: Operational Update
Operational Update Andrew Davies Chief Executive Officer
Slide 18: Infrastructure services
Infrastructure services Adjusted operating profit up 4.8% to £46.1m Commercial & Operational Update £’m HY25 HY24 Δ Revenue 1,032 944 9.3% - Order book of £6.7bn Adjusted Operating Profit 46.1 44.0 4.8% - Significant awards: Operating margin 4.5% 4.7% (20)bps o appointed by Yorkshire Water to their
Slide 19: Water operations
Water operations Significant opportunities presented through the AMP 8 investment cycle - Significantly increased AMP 8 investment determination of £104bn1 - Capital delivery programme driven by ageing asset base, environmental regulations and extending asset life - Water companies engaging with Tie
Slide 20: Construction
Construction Adjusted operating profit up 9.9% to £36.5m Commercial & Operational Update £’m HY25 HY24 Δ - Strong orderbook of £4.3bn Revenue 932 915 1.9% - Significant awards: Adjusted Operating Profit 36.5 33.2 9.9% o appointed by the Scottish Government to deliver HMP Glasgow, the replacement for
Slide 21: Property
Property Recapitalisation of Property in preparation for future growth Commercial & Operational Update £’m HY25 HY24 Δ - Limited number of transactions in the period Revenue 13 22 (40.9)% - Significant progress in deploying capital in projects which are Adjusted Operating Profit 0.9 4.6 (80.4)% expe
Slide 22: Sustainability
Sustainability Andrew Davies Chief Executive Officer
Slide 23: Sustainability
Sustainability Progressing “Building for a Sustainable World” Environment: Social: - On track to deliver against scope 1, 2 and 3 carbon - Became platinum members of the 5% club: targets - 12% of our workforce are in formal learning - Collaborated with the Supply Chain Sustainability programmes Scho
Slide 24: Summary and outlook
Summary and outlook |1 Group has continued to make significant operational and financial progress Disciplined approach to capital allocation; 20% increase in dividends; announced an initial share buy back |2 programme |3 Record order book of £11bn providing multi-year revenue visibility |4 The secon
Slide 25: Capital Markets Day June 2025
Capital Markets Day 3 June 2025
Slide 26: Q&A
Q&A
Slide 27: HY25 Results Appendix
HY25 Results March 2025 Appendix
Slide 28: Key investment proposition
Key investment proposition Aligned our businesses to take advantage of market opportunities Value accretive Attractive market Experienced earning-led Strong order book positions management team business model Focused on UK markets in Underpinned by long-term Proven track record of Aligned to the UK
Slide 29: Our businesses
Our businesses Simple and focused operating units, alongside our Group functions service: Natural Resources, Transportation Nuclear & Construction Property Networks Leading provider of Delivers long-term Delivers public and private Invests and develops sites sustainable transport contracts providing
Slide 30: Property - Overview
Property - Overview Mixed-use commercial and residential property development delivered through joint ventures Market Trends Mixed-use Industrial & Last Climate change & carbon Sector Focus Sustainable Offices Residential Mile Logistics reduction Population growth & affordable housing need South / S
Slide 31: Property – Value creation model
Property – Value creation model Unlocking UK Public land and investing through public and private partnerships Obtain planning Secure owner / Acquire / control land Build Sell investment permission occupier - Source suitable land - Secure planning and - Build and manage - Secure occupier - Handover
Slide 32: 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 – potential margin upside Traditional model Kier model and downside risk Public sector JV model Upside Margin Land Margin - Kier public sector JV mod
Slide 33: Property – Group synergies and key relationships
Property – Group synergies and key relationships Group synergies and established relationships provide a competitive advantage Group synergies Relationships - Established relationships with land owners and Local Authorities Group Business Model Model Group Business - Key for sourcing projects Commer
Slide 34: Kier’s journey
Kier’s journey Rationalised, recapitalised and growing business. Focused on accelerating growth and returns 2019 2020 2021 2022 2023 2024 2025 + through the cycle April 2019 March 2020 May 2021 2022 - 2023 March 2024 2025 + New CEO, New senior Refinancing package Delivering against medium-term value
Slide 35: Our strategy
Our strategy Our medium to long-term strategy focuses on leveraging our attractive market positions to sustainably deliver infrastructure which is vital to the UK We have four objectives to deliver on our strategic actions: Objective 1 Objective 2 Objective 3 Objective 4 Leverage our Maintain and Re
Slide 36: Market drivers
Market drivers Positive market environment underpinning UK Government spending commitments Addressing Population Economic Congested Climate geographic growth growth transport change imbalance - Population - UK economic - Congested roads, - Increased spending - Energy supply expansion with growth exp
Slide 37: UK Government spending commitments
UK Government spending commitments 10 year UK national infrastructure spending commitments Infrastructure Services Natural Resources, Nuclear & Transportation Net Zero infrastructure Networks - Road Investment Strategy 2: £27bn - Water England/Wales AMP8 £104bn by - UK leading net-zero pledge invest
Slide 38: UK Government spending commitments continued
UK Government spending commitments continued UK Government spending focused on schools, hospitals, prisons and defence Construction Property Education Healthcare Justice & Borders Defence Kier Places Urban Regeneration - 500 DfE school - Government has - 14,000 new prison - £5.1bn Defence Estate - R
Slide 39: 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 £158bn (total advertised values) - Driving long-term revenue streams, barriers to entry and strengthened customer relationships, underpinning
Slide 40: Pension
Pension Net pension scheme asset of £53m £’m Dec 24 Jun 24 Δ - As at 31 December 2024, Group’s net pension scheme Group Pension Schemes asset was £53m Market value of assets 1,157.4 1,218.6 (61.2) Present value of liabilities (1,104.6) (1,138.1) 33.5 - Decrease due to lower than assumed asset return
Slide 41: HY25 Group revenue analysis
HY25 Group revenue analysis Total 13% 21% 8% 4% 5% 1% 14% 7% 11% 2% 6% 6% 1% Infrastructure 26% 40% 14% 8% 9% 3% Services Construction 30% 15% 23% 5% 13% 14% Property 11% 21% 67% Highways Rail Water Nuclear & Energy Environment Other Education Healthcare Justice & Borders Defence Other Public Commer
Slide 42: HY25 Segmental revenue analysis
HY25 Segmental revenue analysis Infrastructure Services Total 26% 40% 14% 8% 9% 3% Transportation 39% 60% 1% Natural Resources, 43% 24% 26% 7% Nuclear & Networks Highways Rail Water Nuclear & Energy Environment Other Design Construction Total 30% 15% 23% 5% 13% 14% Regional Build 33% 17% 20% 6% 9% 1