Unlocking the Value Peter Johnson George Wimpey PLC 27 April 2001

George Wimpey has the potential to compete with and better the performance of its peers. My objective today is to show you how we are bringing this about. Unlocking the Value George Wimpey has earned lower margins than its main competitors - there is no good reason why it should continue to do so.

Agenda Wimpey today - where we start from The sources of value and how we will unlock them

Wimpey Today

Wimpey today 2000 Results - P&L Account Revenue £m Operating Profit £m Profit Before Tax £m Tax % Earnings per Share p Dividend per Share p % +43% +30% N/A +22% +14% % Change

Wimpey today 2000 Results - Balance Sheet Shareholders Funds £m Net Debt £m Capital Employed £m Shareholders Funds p Gearing % Interest Cover

Wimpey today 2000 Completions UK PD UK Social UK Total USA Total Group Total £112 £50 $227 £ % +6% +15% +16% Average Price % -19% -8% +2% -5% Completions £ % No.% Change£/$000’s% Change

Wimpey today Segmental Analysis UK USA Corp. Group % +29% +37% Operating Profit % +22% +10% Revenue (7) £m % Change £m % Change % +0.5% +2.0% Operating Margin % % Change

The sources of increased value Land: strengthening our land-bank Building: building high quality and reducing costs Product: widening our range, better pricing and options Overheads: getting the benefits from restructuring USA: the growth potential and lessons to learn Partners and people: working with the best

Land

Strengthening our land bank We were –competing internally –reacting to local demands of regions –trying to get 29 regions to critical mass –rationing on first come first served basis Result was –land in the wrong place –bought at poor margins We now have –prioritised land acquisitions based on our business strategy –all regions with critical mass –workable landbanks in all regions –raised our target returns Result is –we are buying land where we want it –at much better margins

Strengthening our land bank Completions Before and After –Regional Businesses now up to critical mass Scotland North Midlands South UK Total After Before 6520 No of BU’s Ave. PC’s per BU No of BU’s Ave. PC’s per BU

Short Term Land Short-term land bank: –24000 plots owned –9450 plots controlled –total equals 3.1 years supply 2000 UK land spend of £420 million increased owned plots by 1350 (6%)

Short Term Land Short Term Land Bank at end 2000 (Plots) 2,800 7,900 3,650 4,200 2,250 6,100 6,550 Total = 33,450 Plots

Short Term Land Short Term Land Bank at end 2000 (Years) Average = 3.1 Years

Short Term Land Cost of Short Term Land Bank at end 2000 (£millions) 65.3m 85.9m 125.7m 161.7m 50.3m 42.2m 158.6m Total = 689.7m

Strategic Land

We were –managing strategic land outside UK housing business –focusing on number of plots, not when they were available for use –and on adding plots not getting planning on existing plots –we had no geographical strategy –and had not amended approach in light of PPG3 We now have –fully integrated strategic land into the UK business –created a smaller, more focused resource working closely with our regions –prioritised action to bring existing sites through planning –focused our efforts on high value and brownfield sites

Strategic Land Capital Locked Up in Strategic Land Scotland & North East 5.4m North West & Yorkshire 1.6m West Midlands 2.3m East Midlands 3.5m East & South East 1.8m Total 35.8m South 21.2m

Stategic Land Where is our Strategic Land? Category 1 Sites (developable within 2-3 years) Total Number of Sites = 89 Average estimated plots per site = 150 Total estimated plots = 13350

Stategic Land Where is our Strategic Land? Category 2 Sites (developable within 5 years) Total Number of Sites = 108 Average estimated plots per site = 175 Total estimated plots = 18900

Stategic Land Key Sites

Stategic Land Key Sites Bradbury Estate - A Brownfield Site

Stategic Land Key Sites Eastanton Manor Farm - A Greenfield Site AndoverTown HampshireCounty 253 AcresGross Area 109 AcresNet Area 1350Expected Plots

Building

Building high quality and reducing costs We build well Our competitors say so The NHBC says so The facts confirm they’re right

Building high quality and reducing costs NHBC Quality Awards

Building high quality and reducing costs NHBC Top 100 Site Manager Awards

Building high quality and reducing costs Recommend without being asked I am pleased I bought this home Quality of construction is very good Overall I am very satisfied 29% 94% 46% 56% 20% 85% 36% 45% George Wimpey UK National Average Housing Forum Customer Satisfaction Survey Survey involved over 10,000 Home Buyers Nationally Overall I am fairly or very satisfied 93%87%

Building high quality and reducing costs Build Costs –McLean Build Costs more than 10% cheaper than Wimpey Build time –McLean 12 Weeks –Wimpey Weeks

Building high quality and reducing costs We were using –Wimpey central design: expensive design features not adapted to local markets costly to adapt to PPG3 We now have –local design (per McLean) savings identified adapted locally easier for PPG3 benchmark costs House Design

-Reduction of roof complexity - £1000-Reduction of special features - £600-Positioning - £500 Building high quality and reducing costs Before After FrontRight Redesign of Vaudeville House Type by Leicester Office

-Reduction of roof complexity - £1000-Reduction of special features - 600Total Saving = £2,100 Building high quality and reducing costs Before After FrontRight Redesign of Vaudeville House Type by Leicester Office

Building high quality and reducing costs We were using –Wimpey central buying: inflexible service not suited to local needs inhibited upgrades high prices Procurement

Building high quality and reducing costs Central Purchasing not working –Bricks Wimpey National deal cost £12 per thousand more than McLean –Sanitary Ware McLean co-ordinated approach bought sanitary ware sets £300 cheaper than Wimpey Procurement

Building high quality and reducing costs We were using –Wimpey central buying: inflexible service not suited to local needs inhibited upgrades high prices We now have –Product Consultation Groups national deals supported by regional management national scale with knowledge on the ground procurement co-ordinated with site/sub-contractor needs benchmarking of costs Procurement

Product

Product - Range Continued increase in product selling price Continued progression to larger house types Continued increase in Bespoke

Product - Range Movement of product range to higher selling prices

Product - Range Product Mix

Improved selling and marketing We wereWe now have –common price and market data –plans to exploit full product range where it is needed –established project teams to exploit experience on “options” –as well as on Bespoke developments –not sharing pricing information between Wimpey and McLean –not working together on mixed outlet developments –not transferring experience of successes on options –not sharing market, competitor or customer data

Product - Options Top 10 Options for 2000 Margin on Options between 20% and 30% Option Electrical Sockets/Pointing Coving Glazed Doors >40% 25%-40% Take up as % of PC’s Garden Landscaping Burglar Alarms Fire Surrounds Additional Lighting 20%-25% Downlights Kitchen Flooring - Ceramic Carpets

Product - Options Taking ideas from regions to form consistent approach Options Project Team e.g. –Double Garage Sales Centre - Yorkshire

Product - Options Taking ideas from regions to form consistent approach e.g. –Double Garage Sales Centre - Yorkshire Options Project Team –Car Style Specification Sheet - Bristol

Product - Options Taking ideas from regions to form consistent approach e.g. –Double Garage Sales Centre - Yorkshire –Car Style Specification Sheet - Bristol –Commissions from off-site Sales - West London Options Project Team

Product - Options Taking ideas from regions to form consistent approach e.g. –Double Garage Sales Centre - Yorkshire –Car Style Specification Sheet - Bristol –Commissions from off-site Sales - West London –Off-site Sales Centres - USA Options Project Team

Product - Options £3,100 £2,800 £3,500 £4,100 £2,600 £2,750 £2,950 Sales of Options per House in 2000 (£’s) National Average = £3,100

Product - Options 2.8% 3.1% 2.2% 2.9% 3.1% 2.6% Sales of Options as Percentage of House Price in 2000 National Average = 2.8%

Overheads

Getting the benefits from restructuring Reduced Overheads –Reduction in Staff –Completions per member of Office Staff increased by >40% – Overhead Savings - £20 million –Impact on Margin for %

Getting the benefits from restructuring WHH Top Management 10 Central & Duplicated Functions 35 9 Closed BU’s 235 New Staff Profile 100 Handover Staff (Apr/May) 55 Total 435 Summary of Redundancies

Closed Businesses McLean East Scotland Wimpey West Scotland Wimpey Yorkshire Rivermead McLean East Midlands Wimpey Northern Home Counties Wimpey South East Thameswey Wimpey South Wales (kept as satellite) New Business Central London Getting the benefits from restructuring

Distribution of Remaining Offices

Getting the benefits from restructuring Completions Before and After –Regional Businesses now up to critical mass Scotland North Midlands South UK Total After Before 6520 No of BU’s Ave. PC’s per BU No of BU’s Ave. PC’s per BU

USA

USA - a growth opportunity located in growing markets –5 of 6 States with greatest job creation –well positioned in higher value segments with a structure to support growth –mature businesses to generate cash –well established growing businesses –development businesses established for future growth potential to grow through satellites or small acquisitions

USA - a growth opportunity Sacramento East Bay Area San Joaquin Valley Current Morrison Markets Atlanta Jacksonville Orlando Tampa Sarasota Austin San Antonio Dallas/Ft Worth Houston Phoenix

USA - a growth opportunity Where the Jobs are. Sarasota, Florida 5.9% Austin, Texas 4.7% Tucson, Arizona 5.4% Tampa, Florida 4.9% Orlando, Florida 5.1% Job Growth Rates over the Last 4 Quarters Source: The Meyers Group, Inc. 2001

USA - a growth opportunity Where the jobs are. Even the most pessimistic forecasts for housing starts this year (~1.5 million) is higer than the previous peak years. Better still, economists agree that many areas of the country - notably the West, parts of the Northeast, Texas and Florida - will experience strong housing growth in Depending on where you build and, to a lesser degree, for whom, the slower gowing economy will be felt differently. -Taken from article in Professional Builder Magazine

USA - Regional Analysis Orlando Local economy satistics Population Total Employment Median Household Income Average population change = 3.2% Average employment change = 4.7% Average Income change = 3.7%

USA - Regional Analysis Orlando Largest Private Employers

USA - Regional Analysis Orlando Top 10 House Builders

USA - Regional Analysis Orlando Market Position

USA - Regional Analysis Orlando Market Segmentation

USA - Options Top 5 Options in Morrisons Category Flooring Carpet/Vinyl/Tile/Hardwood Structural Flexible Designs/Bonus Room/Elevation Cabinetry Cabinetry/Countertop Non-Standards Custom changes per buyer request Pool Option only in Tampa and Orlando Total Revenue $25m $9m $7m $3m

USA - Options Total revenue from options in $55m Options revenue per house - $20,850 Options revenue as percentage of house price - 9.2% Margins between 20% and 50%

Partners and people

Partners & People we are able to attract top quality partners –suppliers and subcontractors –partners in major development schemes –our own staff and management

Partners & People Years within George Wimpey

Partners & People Age of Regional Management

Partners & People Graduate Intake in 2000 –4 Oxbridge, Sheffield, Manchester, UCL, Newcastle –Two 1s and Five 2:1s Graduate Intake for 2001 –5 Oxbridge, Warwick, York, St Andrews –Chemistry, Engineering, History, Law, Biosciences etc 16 Women in Regional Boards or above 2 Women are Managing Directors Strengthening our Staff

What this means for our shareholders

Margins will increase –£20 million overhead cost reductions –land is being bought at better margins –benefits from improved design/procurement –prices will improve through better product and geographical mix –increased options/extras

George Wimpey has the potential to compete with and better the performance of its peers. We are putting in place the organisation and processes to ensure it does. What this means for our shareholders George Wimpey has earned lower margins than its main competitors - there is no good reason why it should continue to do so.