Slide 1: Serco 2026 Half year results
Serco 2026 Half year results For 6 months ended 30 June 2026
Slide 2: Agenda
Agenda Overview Anthony Kirby, Group Chief Executive Financial review Mark Reid, Group Chief Financial Officer Strategy & markets overview Anthony Kirby, Group Chief Executive Q&A 2
Slide 3: Overview
Overview Anthony Kirby, Group Chief Executive
Slide 4: Key messages
Key messages Strong financial performance, further margin progression Supporting increased buyback from £75m to £150m for the year Further delivery across strategic priorities supports unchanged 2026 guidance Positive indicators across our pillars of Growth, Competitiveness & Operational Excellence
Slide 5: Strong first-half performance, further margin progression
Strong first-half performance, further margin progression Revenue Underlying operating profit Free cash flow Order intake £2.5bn £157m £65m £2.5bn 4% ↑ at constant currency Delivering 6.2% margin 74% cash conversion ~100% book -to-bill 5
Slide 6: HY overview: momentum across our execution priorities
HY overview: momentum across our execution priorities Growth Competitiveness Operational excellence Retention win rate Key contract mobilisations – Group -wide simplification 95% ↑ 3% pts incl. Royal Navy support, US programme – 5 to 3 sectors vs FY25 Air Force training, Solutions+ Excellent ASPAC C
Slide 7: Decisive actions are driving margin accretion
Decisive actions are driving margin accretion Underlying operating profit margin % 6.2 6.0 5.7 5.6 Target range 5-6% 5.2 5.2 5.1 3.7 2.7 FY16 FY19 FY21 FY22 FY23 FY24 FY25 HY26 FY26 Guidance On -contract Scaling complex Cost Portfolio Targeted growth contracts discipline management M&A expanding ser
Slide 8: Financial review
Financial review Mark Reid, Group Chief Financial Officer
Slide 9: Financial overview
Financial overview HY26 HY25 Growth Revenue Revenue £2,508m £2,419m 4% Organic 2% 3% Inorganic 2% 2% 4% Revenue growth FX —% (2%) Underlying Underlying operating profit £157m £146m 8% operating profit Organic 4% 1% Inorganic 5% 3% FX Margin (1%) 6.2% (2%) 6.0% 8% UOP growth EPS Underlying EPS (dilut
Slide 10: North America
North America Defence momentum, double-digit profit growth, expanded pipeline Six months ended 30 June 2026 (£m) • Revenue +8% reported, —% organic o Defence driving growth, including contribution from MT&S acquisition and additional infrastructure works for the US HY26 HY25 Total growth CFX growth
Slide 11: UK & Europe
UK & Europe Excellent Defence organic growth, strong contract retention Six months ended 30 June 2026 (£m) • Revenue +8% reported, +7% organic o Very strong Defence organic growth supported by commencement of Royal Navy vessel replacement contract HY26 HY25 Total growth CFX growth o UK immigration d
Slide 12: Asia Pacific
Asia Pacific Efficiency improvements, strong order intake, robust platform for growth Six months ended 30 June 2026 (£m) • Revenue (14)% reported, (13)% organic o Revenue reduced as expected from exit of onshore immigration services contract and Hong Kong divestment HY26 HY25 Total growth CFX growth
Slide 13: Middle East
Middle East Resilient during period of regional instability Six months ended 30 June 2026 (£m) • Revenue (25)% reported, (13)% organic o Transition of contracts into Mubadala partnership o Reduced activity amid regional conflict HY26 HY25 Total growth CFX growth Defence 12 15 (22)% (27)% • UOP (12)%
Slide 14: On track for full year trading cash conversion of at least 80%
On track for full year trading cash conversion of at least 80% Continued strong balance sheet supports increased buyback Six months ended 30 June 2026 (£m) HY26 HY25 Underlying operating profit 156.7 145.8 Building on track Capex and repayment of lease liabilities (102.3) (92.1) record of strong cas
Slide 15: Capital allocation
Capital allocation Strong financial positioning enables investment and shareholder returns Core Highly Capital -light Strong strengths: cash generative business model balance sheet Capital priorities Progress in 2026 Increased business development and government affairs activity, 1 Invest to support
Slide 16: Guidance for 2026
Guidance for 2026 2025 2026 Previous New Actual guidance guidance Revenue £4.9bn ~£5.0bn ~£5.0bn Organic sales growth 1% ~3% ~3% Underlying operating profit £272m ~£300m ~£300m Net finance costs £45m ~£52m ~£50m Underlying effective tax rate 23% ~25% ~25% Free cash flow £219m ~£160m ~£160m Adjusted
Slide 17: Strategy & markets overview
Strategy & markets overview Anthony Kirby, Group Chief Executive
Slide 18: The 'Four Forces' continue to drive demand
The ‘Four Forces’ continue to drive demand Structural drivers of demand continue to create need where we have expertise Voter Rising Balancing Growing intolerance expectations public costs of higher of citizens expenditure taxes Case study: Cabinet Office research reaffirms efficiency gains of priva
Slide 19: Efficiency, quality & capability: why governments partner with the private sector
Efficiency, quality & capability: why governments partner with the private sector Beyond efficiency: how the private sector strengthens public services Flexibility International Risk & agility best practice management Efficiency & Innovation & Lower cost, productivity technology better value Case st
Slide 20: A more agile Serco through simplifying how we operate
A more agile Serco through simplifying how we operate At FY25 we simplified our sectors… we will refine our operating structure, driving further focus & efficiency Five Sectors Four Divisions Defence Justice & Citizen Health Transport North UK & Middle Asia Immigration Services & FM America Europe E
Slide 21: North America: strong pipeline balances delayed adjudications
North America: strong pipeline balances delayed adjudications Market dynamics Serco’s platform Growth opportunity Largest gov. services market Embedded customer relationships Historic US defence budget Serco’s largest Division by profit including US Navy, Army, Air & ~$1trn US defence appropriations
Slide 22: North America: organic expansion of our technology-enabled platform
Growth North America: organic expansion of our technology-enabled platform Comprehensive Error Rate Oversees Testing (CERT) $1trn+ secured H1 2026 annual healthcare spending $109m seven -year contract Identification AI & of improper ~70m intelligent 2013 payments Americans served document Serco’s or
Slide 23: UK&E: fiscal pressures, efficiency & defence investment underpin demand
UK&E: fiscal pressures, efficiency & defence investment underpin demand Market dynamics Serco’s platform Growth opportunity Large & growing market Embedded delivery Growth momentum largest outside NA, robust & tested over 60yrs operating critical services revenues up 8% year -on -year procurement pr
Slide 24: UK&E: mobilising next generation maritime services
Operational excellence UK&E: mobilising next generation maritime services Mobilising the Demonstrates Includes Royal Navy’s Defence Marine our ability to 24 new Services Next mobilise, vessels Generation modernise programme & expand large complex defence operations Critical £1bn+ infrastructure In H
Slide 25: ASPAC & ME: renewed defence & justice demand, modernisation programmes drive investment
ASPAC & ME: renewed defence & justice demand, modernisation programmes drive investment Market dynamics Serco’s platform Growth opportunity Established markets in ASPAC Exposure to in -demand services Strong momentum in ASPAC justice with track -record of sustained demand strong defence & justice ca
Slide 26: ASPAC: leveraging our international justice expertise
Competitiveness ASPAC: leveraging our international justice expertise Secured a five -year Acacia Prison ~190% £400m extension ASPAC of awards book -to-bill in Justice sector Builds on ASPAC momentum in £320m Justice including: total contract value >£60m, five -year Adelaide Excellent Remand Centre
Slide 27: Government customers continue to seek efficiency & innovation from the private sector
Government customers continue to seek efficiency & innovation from the private sector • The fundamental drivers of demand persist, with economic and geopolitical factors intensifying them in many markets • We are in the most attractive and largest government services markets • We have simplified our
Slide 28: Key messages
Key messages Strong financial performance, further margin progression Supporting increased buyback from £75m to £150m for the year Further delivery across strategic priorities supports unchanged 2026 guidance Positive indicators across our pillars of Growth, Competitiveness & Operational Excellence
Slide 29: Serco
serco
Slide 30: Forward-looking statements
Forward-looking statements This announcement contains statements which are, or may be deemed to be, “forward looking statements” which are prospective in nature . All statements other than statements of historical fact are forward -looking statements . Generally, words such as expect”, “anticipate”,
Slide 31: Notes and definitions
Appendix 1 Notes and definitions Revenue is as defined under IFRS, which excludes Serco’s share of revenue of its joint ventures and associates. In prior peri ods where relevant, revenue including that from any discontinued operations has been shown for consistency with previous guidance and disclos
Slide 32: Revenue divisional analysis
Appendix 2 Revenue divisional analysis Revenue - growth composition HY26 vs HY25 HY25 HY26 Reported Acquisition/ Reported Constant £m Organic FX TOTAL Currency (Disposal) Currency Currency UK&E 1,253.5 7% —% 1% 8% 1,358.6 1,345.3 North America 720.8 —% 12% (4%) 8% 774.9 808.0 Asia Pacific 355.3 (13%
Slide 33: Underlying operating profit (UOP) divisional analysis
Appendix 3 Underlying operating profit (UOP) divisional analysis Underlying operating profit and margin HY26 HY25 Change FY25 Reported Constant Reported Reported Reported Constant Constant Reported Reported £m Currency Currency Margin Currency Margin Currency Currency Currency Margin UK&E 83.6 82.2
Slide 34: Income statement – EPS and DPS
Appendix 4 Income statement – EPS and DPS £m HY26 HY25 FY25 Underlying operating profit (UOP) 156.7 145.8 271.6 Net finance costs (NFC) (23.3) (19.4) (44.8) Underlying PBT 133.4 126.4 226.8 Tax on UOP and NFC (30.7) (27.5) (51.6) Underlying PAT 102.7 98.9 175.2 Profit on disposal of subsidiary - - 4
Slide 35: Exceptional items
Appendix 5 Exceptional items £m HY26 HY25 FY25 Exceptional items: Goodwill impairment - - - Exceptional items - - - Tax on exceptional items - - - Total exceptional items, net of tax - - - Memo: Cash flow on exceptional items - - - 35
Slide 36: Free cash flow and trading cash flow
Appendix 6 Free cash flow and trading cash flow £m HY26 HY25 FY25 Underlying operating profit (UOP) 156.7 145.8 271.6 Share of profit of joint ventures and associates (16.3) (11.7) (28.8) Depreciation, amortisation and impairment of owned assets 13.8 12.9 27.4 Depreciation, amortisation and impairme
Slide 37: Net debt and leverage
Appendix 7 Net debt and leverage £m HY26 HY25 FY25 Free cash flow 65.0 90.5 219.3 Net acquisition / (disposal) of subsidiaries and operations 1.0 (245.7) (250.7) Disposal related costs - - (2.3) Dividends paid to shareholders (30.3) (28.6) (43.3) Purchase of own shares (58.1) - (50.3) Capitalisation
Slide 38: Focus on three sectors across four regions
Appendix 8 Focus on three sectors across four regions HY26 revenue mix, including share of JV&As* UK & North Asia Middle Serco £m Sector Europe America Pacific East Total Defence 462 594 103 12 £1,171m 42% Justice & 709 - 75 - £784m 28% Immigration Citizen 456 181 129 81 £847m 30% Services Total £1,
Slide 39: Cash flow breakdown
Appendix 9 Cash flow breakdown 1 and breakdown 2 £m HY26 HY25 FY25 Breakdown 1 – depreciation, amortisation and impairment Depreciation (excluding lease assets) 8.9 8.8 18.5 Amortisation (non-acquisition) 4.9 4.1 8.8 Depreciation and amortisation 13.8 12.9 27.3 Impairment of PPE (excluding lease ass
Slide 40: Leverage covenant calculation
Appendix 10 Leverage covenant calculation £m HY26 HY25 FY25 Underlying operating profit (UOP) 282.5 276.9 271.6 Exclude: share of joint venture and associate post-tax profits (33.4) (23.4) (28.8) Exclude: foreign exchange credit on investing and financing arrangements (2.7) (0.5) (1.2) Add-back: Non
Slide 41: Interest cover covenant calculation
Appendix 11 Interest cover covenant calculation £m HY26 HY25 FY25 Net finance costs (48.7) (37.0) (44.8) Other covenant adjustments to net finance costs 22.2 22.1 22.8 Exclude: foreign exchange credit on investing and financing arrangements 2.7 0.5 1.2 Exclude: net interest receivable on retirement
Slide 42: Balance sheet summary
Appendix 12 Balance sheet summary £m HY26 HY25 FY25 Goodwill 940.8 915.5 929.3 Other intangible assets (excluding leased assets) 149.5 173.6 162.2 Property, plant and equipment (excluding leased assets) 59.0 59.5 56.2 Contract assets, trade and other receivables 759.3 708.2 669.3 Inventories 22.6 21
Slide 43: Return on invested capital (ROIC)
Appendix 13 Return on invested capital (ROIC) £m HY26 HY25 FY25 Invested capital assets 1,966.0 1,903.4 1,871.1 Invested capital liabilities (825.3) (746.2) (752.0) Invested Capital (IC) 1,140.7 1,157.2 1,119.1 Average IC (two-point) 1,149.0 1,153.8 1,047.9 Underlying Operating Profit for rolling 12
Slide 44: Pension assets mix and IAS 19 valuation
Appendix 14 Pension assets mix and IAS 19 valuation £m HY26 HY25 FY25 Fair value of scheme assets - SPLAS Short-dated credit 37.3 35.4 36.5 Asset backed securities 69.6 64.5 60.2 LDIs 177.4 187.7 188.4 Private debt 131.7 134.6 136.9 Amounts held by insurance companies 339.0 347.0 347.6 Cash and othe
Slide 45: Currency rates
Appendix 15 Currency rates Rate for FY26e Average rates Closing rates Assumed 30 Jun 31 Dec 30 Jun 31 Dec 30 Jun 31 Dec HY26 FY25 HY25 FY24 HY24 average 2026 2025 2025 2024 2024 2023 £:US$ 1.34 1.35 1.31 1.29 1.28 1.27 1.32 1.35 1.37 1.25 1.28 1.27 £:Aus$ 1.90 1.93 2.05 2.05 1.93 1.92 1.92 2.01 2.10
Slide 46: Tax
Appendix 16 Tax • HY26 underlying tax of £30.7m, on underlying profit before tax of £133.4m - effective tax rate (ETR) of 23.0% The rate is below the UK statutory rate principally due to the impact of post-tax profits of joint ventures being reported in Serco group pre-tax results. • Expect longer t
Slide 47: Net debt trend analysis
Appendix 17 Net debt trend analysis The trend of net debt in HY 2026 has followed a normal pattern compared to HY25, which was significantly impacted by the acquisition of MT&S. The range of daily net debt around the average of ~£240m for the half year was within a range of +/ - £100m, which is cons
Slide 48: American Depositary Receipt (ADR) program
Appendix 18 American Depositary Receipt (ADR) program Serco Group has a sponsored Level 1 ADR program, for which Deutsche Bank act as the depositary bank and custodian Ticker: SCGPY For assistance with converting Ordinary Shares into ADRs (or vice Exchange: OTC versa), please contact Deutsche Bank’s
Slide 49: Sector comparatives - 2024
Appendix 19 Sector comparatives - 2024 2024 Half Year Old Basis Six months to 30 June 2024 New Basis Six months to 30 June 2024 UK & Europe North America Asia Pacific Middle East Total UK & Europe North America Asia Pacific Middle East Total £m £m £m £m £m £m £m £m £m £m Key Sectors Key Sectors Defe
Slide 50: Sector comparatives - 2025
Appendix 20 Sector comparatives - 2025 2025 Half Year Old Basis Six months to 30 June 2025 New Basis Six months to 30 June 2025 UK & Europe North America Asia Pacific Middle East Total UK & Europe North America Asia Pacific Middle East Total £m £m £m £m £m £m £m £m £m £m Key Sectors Key Sectors Defe
Slide 51: Serco
serco