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1 05 December 2014 DRAFT 22 Full-year trading update Support services Contract wins in the Defence and Justice sectors 10 December 2014.

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Presentation on theme: "1 05 December 2014 DRAFT 22 Full-year trading update Support services Contract wins in the Defence and Justice sectors 10 December 2014."— Presentation transcript:

1 1 05 December 2014 DRAFT 22 Full-year trading update Support services Contract wins in the Defence and Justice sectors 10 December 2014

2 2 Agenda Full year trading update 2014 Richard Howson Group Chief Executive Nigel Taylor MD Carillion Services Richard Lumby MD Defence Sector Daniel Easthope MD Next Generation Estates Contracts Colin Macpherson Work Winning Director, Carillion Services Richard Howson Group Chief Executive FM Services for Prisons Ministry of Defence Next Generation Estates Contracts Carillion Services Defence sector Summary

3 3 Full-year Trading Update Earnings in line with expectations Strong work winning performance – £4.6bn of new work won in the year to date Expect the Group’s order book plus probable orders at the year end to be over £18.5bn Pipeline of contract opportunities worth over £39bn Contract selectivity continues to underpin margin performance Net debt before acquisitions reducing as expected 85 per cent revenue visibility for 2015 HIGHLIGHTS

4 4 Outlook Overall our markets are still challenging But expect steady improvement in markets to continue, subject to a sustained macro-economic recovery Strong, high quality order book and a substantial pipeline of contract opportunities Maintaining selective approach to choosing the contracts for which we bid Overall, Group continues to be well positioned to make further progress over the medium term WELL POSITIONED TO MAKE FURTHER PROGRESS OVER THE MEDIUM TERM

5 5 Carillion Services Nigel Taylor MD Carillion Services

6 6 Carillion Services STRONG WORK WINNING PERFORMANCE

7 7 Defence sector Richard Lumby MD Carillion Defence and Security

8 8 Ministry of Defence Carillion Services MoD revenue over £400m per annum Principle customer –Defence Infrastructure Organisation: Strategic Business Partner Sept 2014 Public Private Partnership projects support services revenues –Allenby and Connaught Carillion’s share £4.2bn over concession period –Joint Permanent Headquarters, Northwood £500m over concession period –Royal School of Military Engineering Support services –Next Generation Estates Contracts −Carillion’s share of revenue £1.1bn over 5 years, potentially £2.5bn over 10 years Construction –National Framework Contractor – expect a share of £400m over 4 years –RNAS Yeovilton Helicopter Base – 4 contracts worth c£70m –RAF Waddington Runway Improvements worth c£25m –Faslane Living Accommodation worth c£30m What next –Army Basing Plan –Hestia: the proposed regional outsourcing of soft FM –Broader support services opportunities SUCCESSFUL PARTNERSHIP

9 9 Ministry of Defence Next Generation Estates Contracts Daniel Easthope MD Next Generation Estates Contracts

10 10 Next Generation Estates Contracts (NGEC) DEFENCE INFRASTRUCTURE ORGANISATION Carillion previously had 2 Prime contracts − National Housing (England & Wales) − Central Region Current Primes being replaced by NGEC Primes − Won 5 out of 5 NGEC Primes − National Housing (England, Wales, Scotland and Northern Ireland) − Central (old Central + old Eastern) − South West − South East − Scotland and Northern Ireland Captures 85% of hard FM for MoD estate 5-years, potential to extend to 10 years c£1.1bn of revenue for Carillion over 5 years and up to £2.5bn over 10 years Target margin 5%+ S&NI Central SW SE NEW NGEC Regional Primes Core Service Projects (not secure) JV Total %54% Regional Prime Contract Revenue - 5 years Carillion Share National HousingTotal £bn

11 11 Next Generation Estates Contracts Typically 4 bidders for each NGEC Carillion priced 5 NGECs separately for direct costs Built on our existing geographic footprint of 2 current Primes Confident that we could build on the efficiencies delivered though our existing Prime contracts Recognised the efficiency benefits from winning more than one contract Coherent and consistent approach across all contracts Win themes − Extensive knowledge of the MoD estate and its needs − Efficient delivery models that build on savings delivered through current Primes − Regional NGECs: 70% Small & Medium-sized Enterprise usage − Housing: blend of Small & Medium-sized Enterprises and some direct delivery to enable high occupant satisfaction − Efficient overhead structure with contracts run on Carillion’s IT platform − Utilising established Customer Contact Centre APPROACH TO BIDDING

12 12 Next Generation Estates Contracts START DATES AND STRUCTURES Service start dates − Scotland & Northern Ireland 1 Nov 2014 − National Housing 1 Dec 2014 − Central / South West / South East 1 Feb 2015 Rigorous and efficient mobilisation plans NEC 3 contracts for all NGECs − KPI’s for planned & reactive maintenance, call handling etc. Payment Structure − core service paid monthly Project work up to a value of £3.9m per project to be delivered through a mixture of − schedule of rates − fixed price after competitive tender process with supply chain

13 13 Next Generation Estates Contracts REGIONAL PRIMES Full range of hard FM for 435 establishments –over 23,000 buildings –Fabric maintenance –Mechanical, Electrical and Plumbing maintenance Rapid response air base at Lossiemouth Largest ammunitions storage in UK HQs for Army (Andover), Navy (Plymouth), RAF (High Wycombe) In addition to hard FM, soft FM will be provided to Abbey Wood Estate (Bristol) − home for Defence Equipment & Supply − 8,000 occupants − 98 acre estate − 200,000m 2 office space − cleaning − catering − waste management

14 14 Next Generation Estates Contracts NATIONAL HOUSING PRIME 48,000 Service Family Houses across England, Wales, Scotland and Northern Ireland Family Houses by region − Central 15,000 − South East 15,000 − South West 13,000 − Scotland & Northern Ireland 5,000 Full end-to-end accommodation management service − Planned and reactive maintenance − Plus new outsourced services −Housing allocations −Distribution of domestic furniture

15 15 Colin Macpherson Carillion Services Work Winning Director FM Services for Prisons

16 16 FM services in public sector prisons CONTRACT OVERVIEW Carillion bid all 4 Packages Won 2 of 4 Packages - G & H Winning 2 Packages was the maximum possible Carillion will provide services to 54 Establishments − Package G 32 − Package H 22 Average annual revenue for the combined packages c£37m Start date 1 June year contracts with potential 2 single-year extensions Package H Package E Package F Package G

17 17 FM services in public sector prisons CONTRACT STRUCTURE NEC 3 contracts Payment structure − Core service paid monthly − Variable and project work paid against schedule of rates Key Performance Indicators for services − KPIs encompassing compliance with service frequency and standards − Performance calculated per Establishment, significantly de-risks the contract Target margin 5%+

18 18 FM in public sector prisons SUMMARY OF SERVICES 146 service lines in total comprising − Hard FM: planned preventative maintenance, reactive maintenance, grounds & landscaping, additional works (ad hoc projects) − Soft FM: cleaning, waste/recycling, pest control, stores management, escorting contractors − Energy management − Additional works (minor projects) Mobilisation period − December 2014 to service commencement on 1 June 2015 Win themes − Understanding customer needs to support MoJ’s Prison Unit Costs Programme − Trusted collaborative partner − Changing lives through engagement, skills development and the creation of pathways to employment

19 19 Richard Howson Group Chief Executive Summary 19

20 20 Summary Work winning performance indicates improving outlook £4.6bn of new work to date in 2014 Major contract successes in key target sectors –Public sector −Defence, Justice, Health and Transport –Private sector −RBS, Heathrow, Arqiva 85% revenue visibility for 2015 Well positioned to make further progress over the medium term STRONG WORK WINNING YEAR

21 21 Full-year trading update Support services Contract wins in the Defence and Justice sectors 10 December 2014


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