Slide 1: 2003 Interim Results
Balfour Bea~y 2003 Interim Results 13 August 2003
Slide 2: Anthony Rabin
Anthony Rabin Balfour Beatty
Slide 3: Headline numbers
Headline numbers First half First half 2002 2003 Turnover £1,685m £1,751m +4% Operating profit* £65m £66m +2% Pre-tax profit* £48m £51m +6% Earnings per share* 6.3p 8.1p +29% Dividends per share 2.35p 2.6p +11% Net cash £41m £104m Order book £4.8bn £6.4bn +33% * Before exceptionals exceptionals and
Slide 4: Performance by sector
Performance by sector Full year First half First half 2002 £m 2002 2003 Building, Building Management 46 21 19 -10% and Services Balfour Bea~y 2003 Interim Results
Slide 5: Building, Building Management and Services
Building, Building Management and Services Full year First half First half 2002 £m 2002 2003 20 Construction 9 8 26 Services and systems 12 11 46 21 19 • Construction businesses continue to perform well • Andover businesses impacted by US market • Improved profitability from facilities management Ba
Slide 6: Performance by sector
Performance by sector Full year First half First half 2002 £m 2002 2003 Building, Building Management 46 21 19 -10% and Services Civil and Specialist Engineering 17 7 7 - and Services Balfour Bea~y 2003 Interim Results
Slide 7: Civil and Specialist Engineering and Services
Civil and Specialist Engineering and Services Full year First half First half 2002 £m 2002 2003 12 Services 5 3 5 Civil and Specialist Engineering 2 4 17 7 7 • Reorganisation of utilities business • UK market prospects good and improving • US performance on improving trend with claims submitted Balf
Slide 8: Performance by sector
Performance by sector Full year First half First half 2002 £m 2002 2003 Building, Building Management 46 21 19 -10% and Services Civil and Specialist Engineering 17 7 7 - and Services 37 Rail Engineering and Services 16 16 - Balfour Bea~y 2003 Interim Results
Slide 9: Rail Engineering and Services
Rail Engineering and Services Full year First half First half 2002 £m 2002 2003 12 Infrastructure Services 7 7 25 Other 9 9 37 16 16 • UK infrastructure services continue to perform well • Strong performance in Europe • Major new contracts secured Balfour Bea~y 2003 Interim Results
Slide 10: Performance by sector
Performance by sector Full year First half First half 2002 £m 2002 2003 Building, Building Management 46 21 19 -10% and Services Civil and Specialist Engineering 17 7 7 - and Services 37 Rail Engineering and Services 16 16 - 49 Investments and Developments 21 24 +14% 149 Operating profit* 65 66 +2%
Slide 11: Investments and developments
Investments and developments Full year First half First half 2002 £m 2002 2003 34 PFI/PPP 13* 20 15 Barking Power 8 4 49 Profit before interest 21 24 23 Profit after interest 8 11 * Including property • Concession performance improving • First contribution from Metronet concessions • Barking Power a
Slide 12: Operating profit v operating cash flow
Operating profit v operating cash flow First half First half £m 2002 2003 Group operating profit 28 23 Add back: goodwill amortisation 8 8 Group operating profit* 36 31 Depreciation 19 19 Exceptional items – cash expenditure (2) (4) Other items 1 (1) Working capital decrease/(increase) (8) 71 Net ca
Slide 13: Balance sheet cash movement
Balance sheet cash movement First half First half £m 2002 2003 Opening net cash 63 67 Net cash inflow from operations 46 116 Dividends from J/Vs and associates 6 3 Capital expenditure and financial investment (9) (29) Acquisitions and disposals (34) (4) Buy-back of preference shares - (16) Dividends
Slide 14: Group balance sheet
Group balance sheet First half First half £m 2002 2003 Goodwill* 276 276 Net cash 41 104 Other assets (124) (186) Shareholders’ funds 193 194 * Includes share of joint ventures and associates Balfour Bea~y 2003 Interim Results
Slide 15: Summary
Summary Continuing growth in profits and earnings Strong cash flow Strong cash position to support future growth Balfour Bea~y 2003 Interim Results
Slide 16: Mike Welton
Mike Welton Balfour Bea~y
Slide 17: Key objectives
Key objectives Sustainability - Better, more secure margins Focus - Maintain competitive advantage Growth - Organic and by acquisition Process - Continuous improvement Balfour Bea~y 2003 Interim Results
Slide 18: Underlying sector performance
Underlying sector performance First half Increase First half 2003 in Underlying Operating profits (£m) 2002 reported pensions performance Building 21 19 2 21 - Engineering 7 7 1 8 +14% Rail 16 16 3 19 +19% Investments 21 24 - 24 +14% Operating profit 65 66 6 72 +11% Balfour Bea~y 2003 Interim Result
Slide 19: Order book
Order book £6.4bn £5.3bn £4.8bn £4.3bn £3.9bn Jun 01 Dec 01 Jun 02 Dec-02 Jun 03 Engineering Building Rail Balfour Bea~y 2003 Interim Results 4
Slide 20: 2003 successes
2003 successes Balfour Beatty share £m Metronet Station Refurbishment 540 Metronet Trackwork 500 Network Rail Renewals* 450 Metronet Civil Engineering 170 Terminal 5 Railway Station Construction Management 87 * Preferred bidder – estimated total value not yet in order book Balfour Bea~y 2003 Interim
Slide 21: 2003 successes
2003 successes Balfour Beatty share £m M25 Widening 148 M77 DBFO Road 132 Blackburn PFI Hospital 125 Rotherham Schools 100 Sunderland Street Lighting 100 Area 4 Highways Agency Maintenance 80 Balfour Bea~y 2003 Interim Results
Slide 22: Investment in Metronet
Investment in Metronet Projected Balfour Beatty share of profits* Total £m (BCV/SSL) 2003 2004 1st period Operating profit 14 22 190 Profit before tax 7 12 90 Projected IRR in the range 14-18% * Not including downstream contracting profits from orders to the the value of £1.2bn Balfour Bea~y 2003 In
Slide 23: Process
Process Group-wide IT development programme in hand Further improvements to Risk Management processes Significant improvements in Accident Frequency Rates Balfour Bea~y 2003 Interim Results
Slide 24: UK Building
UK Building Major player in complex UK building projects Large secured order book PPP/PFI health and education opportunities continue Management outsourcing market healthy and growing Balfour Bea~y 2003 Interim Results
Slide 25: Civil Engineering
Civil Engineering Leading player in UK and selected overseas markets Strong forward order book in strengthening UK roads sector Opportunities in rail and other transport developments US highways spend to continue at current volumes Balfour Bea~y 2003 Interim Results
Slide 26: Worldwide Rail
Worldwide Rail Essential works for UK rail proceeding Major changes in UK maintenance market Italian electrification programme continues to develop Increasing penetration of US industrial rail and maintenance markets Balfour Bea~y 2003 Interim Results
Slide 27: PPP/PFI
PPP/PFI 18 concessions now Successful and strong competitor in an attractive and growing market Clear focus on target markets and projects – strong bidding activity Increasingly profitable and cash-generative business for next 25-30 years Balfour Bea~y 2003 Interim Results
Slide 28: Summary
Summary Confident of further progress in 2003 and beyond Underpinned by secured order book and PPP/PFI portfolio Cash position gives flexibility for strategic development Market opportunity continues to be encouraging Balfour Bea~y 2003 Interim Results