Slide 1: Pan European Building & Infrastructure Conference
Bank of America Merrill Lynch Pan European Building & Infrastructure Conference 6 October 2010
Slide 2: Agenda
Agenda Overview of the Group Infrastructure markets Balfour Beatty infrastructure business model Opportunities across the Group Longer-term direction of the Group Creation and Care of Essential Assets 1
Slide 3: Integrated business model
Integrated business model 25% 30% International infrastructure business Professional Construction Strong and self-sufficient divisions services services Each separately world-class Together, offering infrastructure owners a uniquely integrated service Support Infrastructure Particularly re
Slide 4: Providing services across the infrastructure lifecycle
Providing services across the infrastructure lifecycle Strategic Programme Systems Finance Design Construct Operate Maintain Consultancy Mgt Integration Professional Construction Support Infrastructure services services services investments Creation and Care of Essential Assets 3
Slide 5: In diverse end-markets and geographies
In diverse end-markets and geographies Other Commerical 9% Road RoW building 19% 15% 8% Facilities management 5% Defence 6% Rail UK Social & 17% 55% USA military housing 30% 4% Aviation Healthcare 2% 7% Power Education Water 8% 12% 3% Notes: For half-year ended 26 June 2010, breakdown of revenue inc
Slide 6: Strong track record
Strong track record Order book Revenue incl. joint ventures & associates £14.1bn +10% £bn £10.3bn +9% £bn 14.1 10.3 10.3 12.8 9.5 11.4 7.5 9.1 7.6 5.5 4.6 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 Pre-tax profit Adjusted eps 34.5p Dividend growth 34.7p £267m +7% £m 34.7p 12.0p +8% 267 34.7p
Slide 7: Agenda
Overview of the Group Infrastructure markets Balfour Beatty infrastructure business model Opportunities across the Group Longer-term direction of the Group Creation and Care of Essential Assets 6
Slide 8: Infrastructure – an attractive, long-term market
Infrastructure – an attractive, long-term market Projected infrastructure spending 2009-2020 trillion $US Global growth in 6.5 2.4 infrastructure spend 4.7 forecast to exceed GDP 16.7 growth over next 11 years 2.7 Global spend CAGR 7.7% 3.3 The circles are illustrative of relative spend in 2009-2020
Slide 9: Agenda
Overview of the Group Infrastructure markets Balfour Beatty infrastructure business model Opportunities across the Group Longer-term direction of the Group Creation and Care of Essential Assets 8
Slide 10: Infrastructure business model
Infrastructure business model Creation and Care of Essential Assets 9
Slide 11: Professional services
Professional services Programme and project management Architectural services Project design Technical services Planning Consultancy US Revenue1 Share in Group 9% UK £829m revenue1 3% 16% RoW 4% Order book Profit2 £1.6bn £49m Notes: For Half-year ended 26 June 2010, 1 Revenue including S
Slide 12: Professional services - a knowledge business
Professional services - a knowledge business Strategic Programme Systems Design Consultancy Mgt Integration Business drivers Strategic themes • Track record and staff • Capability enhancement qualifications key factor in (power, water, mining, rail) winning work • Truly global footprint • Staff util
Slide 13: Construction services
Construction services Building Construction management Refurbishment and fit-out Mechanical and electrical services Civil engineering Ground engineering Rail engineering Revenue1 Share in Group £3,282m revenue1 UK 33% 63% Order book Profit2 £8.5bn £83m Notes: For Half-year ended 26 Jun
Slide 14: Construction services - a delivery business
Construction services - a delivery business Construct Business drivers Strategic themes • Integration of supply chain • Growth in established geographies • Local capability • US • Project and commercial • HongKong/South-East Asia management skills • Specific opportunities • Delivery focus: cost and
Slide 15: Support services
Support services Upgrade and maintenance of water, gas and electricity works Total facilities management and business services outsourcing (BSO) Highways network management, operation and maintenance Rail renewals Highway Revenue 1 Share in Group mgt & rail Water renewals 5% 1% Power £735m r
Slide 16: Support services – a service business
Support services – a service business Operate Maintain Business drivers Strategic themes • Continuous improvement: • Growth in Total Facilities quality enhancement and cost Management market share reduction • Capitalise on growth in UK • Contract renewal and scope outsourcing expansion • UK power op
Slide 17: Infrastructure investments
Infrastructure investments Operate a portfolio of long-term PPP concessions in the UK, primarily in the education, health and road/street lighting sectors Operate a portfolio of long-term military accommodation PPP concessions in the US Operate education PPP concessions in Singapore and the US
Slide 18: Infrastructure investments – an asset owner
Infrastructure investments – an asset owner Finance Business drivers Strategic themes • Capital intensive business; • Broaden US PPP ROE-based • Expand PPP internationally • Whole life cost optimisation • Develop investments in wider • PPP (availability risk) v asset class of infrastructure investme
Slide 19: Parsons Brinckerhoff – strategic rationale
Parsons Brinckerhoff – strategic rationale World-class transportation and power business Broad geographical footprint Access to US infrastructure market Access to developing markets Integration of group-wide activities Creation and Care of Essential Assets 18
Slide 20: Parsons Brinckerhoff – a game-changing move
Parsons Brinckerhoff – a game-changing move Acquisition rounded out capabilities across the infrastructure lifecycle 14,000 employees1, 80 countries Strong cultural and strategic alignment with Balfour Beatty Performance ahead of plan and growing order book Key role as integrator across th
Slide 21: Agenda
Overview of the Group Infrastructure markets Balfour Beatty infrastructure business model Opportunities across the Group Longer-term direction of the Group Creation and Care of Essential Assets 20
Slide 22: Opportunities in international infrastructure: Denver Rail
Opportunities in international infrastructure Denver Rail Preferred bidder on Eagle commuter rail project, Denver: – engineering, procurement and construction – rolling stock procurement – systems integration – operations and maintenance Good prospects for similar schemes across the US Creation
Slide 23: Opportunities in international infrastructure: Heathrow Airport
Opportunities in international infrastructure Heathrow Airport £460 million contract at Heathrow Terminal 2 – T2B Enhanced range of capabilities through PB’s US resource and expertise Creation and Care of Essential Assets 22
Slide 24: Opportunities in international infrastructure: India roads
Opportunities in international infrastructure India roads PB has operated in India for a number of years (Metros in Delhi and Mumbai; Delhi airport) Balfour Beatty joint venture with GVK to bid for road projects on a build/operate/transfer basis PB provides design and programme management capa
Slide 25: Opportunities in international infrastructure: UK power
Opportunities in international infrastructure UK power Well-positioned to support nuclear new-build programme Substantial opportunities in offshore generation and renewable energy Appointed preferred bidder to acquire and operate Thanet offshore transmission system (OFTO) Creation and Care of
Slide 26: Where we are today
Where we are today Capabilities across the infrastructure lifecycle and access to wide range of markets and geographies Continued growth in earnings Order book increased to £14.6 billion in H1 2010 H2 order book to include recent contracts such as Denver rail, Heathrow T2B and Darnall Army M
Slide 27: Growth opportunities
Growth opportunities Significant UK opportunities – New nuclear and renewables Plus, opportunities in: – US – South-East Asia – Emerging economies through PB Efficiency programme Confident in ability to deliver growth over the medium-term, reflected in dividend policy Creation and Care of Es
Slide 28: Agenda
Overview of the Group Infrastructure markets Balfour Beatty infrastructure business model Opportunities across the Group Longer-term direction of the Group Creation and Care of Essential Assets 27
Slide 29: Long-term direction of the Group
Long-term direction of the Group Significant growth in professional services Further growth in US construction Strong growth in support services Relative exposure to UK construction to fall Continued value creation from infrastructure investments Creation and Care of Essential Assets 28
Slide 30: In summary
In summary Creation of powerful position to deliver across the infrastructure lifecycle Strong, market-leading and mutually reinforcing businesses Uniquely strong collective capability Diversification, through markets and geographies, provides resilience and access to more opportunities Ba
Slide 31: Creation and Care of Essential Assets
Creation and Care of Essential Assets 30