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2015 Preliminary Results3 MARCH 2016
Carillion is extending the main stand at Liverpool Football Club’s world famous
Anfield Stadium under a £75 million contract to increase the stand’s capacity
by around 8,500 and the total capacity of the stadium to some 54,000, while
keeping the main stand fully operational for all matches.
RICHARD HOWSONGROUP CHIEF EXECUTIVE
Introduction
Carillion is making good progress with the new Royal Liverpool Hospital, which is
being built at a capital cost of £335 million as a Public Private Partnership project,
in which Carillion is also an equity investor and for which Carillion will deliver
facilities management services over the life of the 35-year concession contract.
2
Agenda
Introduction
Financial results
Strategy and prospects
Richard HowsonGroup Chief Executive
Richard AdamGroup Finance Director
Richard HowsonGroup Chief Executive
3
Successful strategy driving performance
• 13% revenue growth - 10% organic growth; support services up 9% with margin
maintained at 5.8%
• Major contracts mobilised successfully
• Strong work winning run rate
• Profit fully cash-backed – strong cash flow
• Full-year dividend increased by 3% to 18.25p
• Now seeing benefits of consistent strategy and integrated business model
• Created platform to take business forward in 2016
WELL POSITIONED FOR FURTHER PROGRESS IN 2016
4
RICHARD ADAMGROUP FINANCE DIRECTOR
Financial results
Carillion’s Customer Experience Centre, which is based in
Sheffield and open 24/365, has been developed to provide
our support services customers with a seamless customer
experience and excellent service. 5
Financial highlights
• Strong revenue growth of 13% to £4.6bn (2014: £4.1bn)
− growth achieved across all business segments
• Underlying profit from operations(1)
up 8% to £234.4m (2014: £216.9m)
− increased contributions from support services and PPP projects
• Total Group underlying operating margin(2)
5.3% (2014: 5.6%) as expected
− support services margin maintained at 5.8% despite higher than normal
mobilisation costs
− reflects effect of construction services (excluding the Middle East) margin trending
down towards a more normal level
• Underlying pre-tax profit(3)
up 2% to £176.5m (2014: £172.9m) and underlying earnings
per share(4)
up 4% to 35.0p (2014: 33.7p)
− after higher non-cash interest costs
6
RETURNED TO REVENUE GROWTH WITH RESULTS IN LINE WITH EXPECTATIONS
(1) After Joint Ventures net financial expense and taxation charge of £7.1m and £2.9m (2014: £6.4m and £2.7m) respectively and before intangible amortisation of £20.0m (2014: £16.8m) and non-recurring operating items of £5.0m (2014:Nil)
(2) Before Joint Ventures net financial expense, Joint Ventures taxation charge, intangible amortisation and non-recurring operating items
(3) After Joint Ventures taxation charge and before intangible amortisation, non-recurring operating items, non-operating items of £2.5m (2015: £9.9m) and fair value movements in derivative financial instruments of £6.1m (2014: £3.6m charge)
(4) Before intangible amortisation, non-recurring operating items, non-operating items and fair value movements in derivative financial instruments
Financial highlights
• Reported pre-tax profit up 9% to £155.1m (2014: £142.6m) and reported earnings per
share up 10% to 30.9p (2014: 28.0p)
− after intangible amortisation and derivative movements amounting to £13.9m
(2014: £20.4m)
• Underlying operating cash conversion 104% (2014: 119%)
• Year end net borrowing reduced to £169.8m (2014: £177.3m)
− as anticipated, average net borrowing increased to £538.9m (2014: £450.7m) and
includes the timing of increases in non-operating cash outflows as we invest to grow
• £1.4bn of committed funding available
− renewed and extended main revolving bank facilities to £790m at reduced pricing
− maturity extended to November 2020
− reflects the confidence in the Group and strength of our credit rating in the market
• Proposed full-year dividend up 3% to 18.25p (2014: 17.75p) and covered 1.9 times
(2014: 1.9 times)
7
STRONG CASH GENERATION SUPPORTING SHAREHOLDER RETURNS AND INVESTMENT FOR GROWTH
Income StatementUNDERLYING PROFIT FROM OPERATIONS UP 8%
Underlying Group operating profit(1)
Share of results of Joint Ventures
Underlying profit from operations(2)
Group net interest
Underlying profit before taxation(3)
Intangible amortisation and derivative movements
Non-recurring operating and non-operating items
Profit before taxation
Group taxation
Profit for the year
Non-controlling interests
Profit attributable to Carillion shareholders
Total Group underlying operating margin(4)
208.4
26.0
234.4
(57.9)
176.5
(13.9)
(7.5)
155.1
(15.7)
139.4
(6.6)
132.8
5.3%
191.8
25.1
216.9
(44.0)
172.9
(20.4)
(9.9)
142.6
(15.1)
127.5
(6.8)
120.7
5.6%
+8%
+2%
8
(1) Before intangible amortisation of £20.0m (2014: £16.8m) and non-recurring operating items of £5.0m (2014: Nil)
(2) After Joint Ventures net financial expense and taxation charge of £7.1m and £2.9m (2014: £6.4m and £2.7m) respectively and before intangible amortisation and non-recurring operating items
(3) After Joint Ventures taxation charge and before intangible amortisation, non-recurring operating items, non-operating items of £2.5m (2014: £9.9m) and fair value movements in derivative financial instruments of £6.1m (2014: £3.6m charge)
(4) Before joint ventures net financial expense, joint ventures taxation charge, intangible amortisation and non-recurring operating items
£m 2015 2014
+9%
+10%
Underlying Group operating profit
Depreciation and other non-cash items
Working capital(1)
Dividends received from Joint Ventures
Underlying cash flow from operations
Pension deficit contributions
Rationalisation costs
Interest and taxation
Net capital expenditure
Other
Acquisitions and disposals
Dividends
Reduction in net borrowing
Net borrowing at 1 January
Net borrowing at 31 December
£m
191.8
26.6
31.1
9.1
258.6
(46.0)
(11.5)
(31.0)
(22.4)
1.4
149.1
(34.5)
(76.7)
37.9
(215.2)
(177.3)
Cash flow
• Underlying operating cash conversion of 104% (2014: 119%)
STRONG CASH FLOW GENERATED FROM OPERATIONS
208.4
10.7
9.0
16.8
244.9
(47.4)
(6.3)
(40.4)
(12.8)
(10.9)
127.1
(39.6)
(80.0)
7.5
(177.3)
(169.8)
2015 2014
(1) Including net proceeds from the sale of PPP investments
9
Working capital five-year summary
10
IMPROVING TRENDS
4.1
(66.4)
(215.2)
56
71
4.1
31.1
(177.3)
61
76
£m 2013 2014
Total revenue (£bn)
Working capital cash movement (£m)
Net borrowing (£m)
Debtor days outstanding (days)(1)
Creditor days outstanding (days)(2)
2011 2012 2015
5.1
5.1
(50.7)
43
67
4.4
(136.2)
(155.8)
49
69
4.6
9.0
(169.8)
51
67
2016-20 TREND
GROWING
NEUTRAL
REDUCING
REDUCING
REDUCING
(1) Debtor days are based on trade receivables plus construction contract receivables divided by Group revenue adjusted for VAT and acquisitions
(2) Creditor days are based on trade payables adjusted for VAT divided by cost of sales plus administrative expenses adjusted for non-trade creditor related expenses such as payroll
costs and depreciation and the effects of acquisitions during the year
11
Balance sheet
• £1.4bn of available funding to support delivery of strategic objectives, of which only £131m is
repayable in the next three years
INCREASED FINANCIAL STRENGTH WITH £1.4 BILLION OF FUNDING TO DELIVER STRATEGIC OBJECTIVES
140.8
1,633.9
166.1
1,940.8
(379.0)
(317.6)
(57.1)
1,187.1
(169.8)
1,017.3
(538.9)
141.9
1,614.1
139.9
1,895.9
(353.9)
(406.2)
(64.0)
1,071.8
(177.3)
894.5
(450.7)
2015 2014
Property, plant and equipment
Intangible assets
Investments
Inventories, receivables and payables
Net retirement benefit liability (net of taxation)
Other
Net operating assets
Net borrowing
Net assets
Average net borrowing
£m(1)
(1) Restated for the retrospective adjustment to provisional amounts recognised on the acquisition of the Rokstad Corporation in 2014.
Net retirement benefit liability
12
POTENTIAL TO MOVE TO SURPLUS WITHIN FIVE YEARS
2014deficit(1)
Deficit pensioncontributions
Other movementsled by 0.25%
increase in the discount rate
2015deficit(1)
Five years of deficit pensioncontributions
Other movementseg, a 0.5%
increase in the discount rate
2020 illustrative
deficit(1)
£406.2m £47.4m
£41.2m
£317.6m £237.0m(2)
£80.6m
NIL
(1) IAS 19 net of taxation
(2) Illustrative based on 5 years of contributions
2015 movements 2016-20 illustrative movements
13
REVENUE GROWTH ACROSS ALL BUSINESS SEGMENTS
Segment results
• Directors’ valuation of PPP investment portfolio at a 9% discount rate £46m (2014: £48m)
despite the sale of £54m of equity at an average discount rate of 7%
• Good opportunities to replenish PPP portfolio
Support services
Public Private Partnership (PPP) projects
Middle East construction services
Construction services (excluding Middle East)
Total
£m 2015 2014
2,534.2
192.8
601.6
1,258.3
4,586.9
2,323.9
162.5
500.7
1,084.8
4,071.9
+9%
+19%
+20%
+16%
+13%
REVENUE
Support services
Public Private Partnership (PPP) projects
Middle East construction services
Construction services (excluding Middle East)
Group costs and Joint Venture interest and tax
Underlying profit from operations
£m 2015
146.6
49.3
25.3
37.8
259.0
(24.6)
234.4
135.9
34.5
25.1
41.5
237.0
(20.1)
216.9
+8%
+43%
+1%
-9%
+9%
-22%
+8%
UNDERLYING OPERATING PROFIT(1)
2015 2014
5.8
25.6
4.2
3.0
5.3(2)
5.8
21.2
5.0
3.8
5.6(2)
UNDERLYING OPERATINGMARGIN %
2014
(1) Before intangible amortisation of £20.0m (2014: £16.8m) and non-recurring operating items of £5.0m (2014: Nil)
(2) After Group unallocated costs of £14.6m (2014: £11.0m)
• Returned to revenue growth with 13% increase to £4.6bn (2014: £4.1bn)
• Underlying profit from operations(1)
up 8% to £234.4m (2014: £216.9m)
• Underlying pre-tax profit(2)
up 2% to £176.5m (2014: £172.9m) and underlying earnings
per share(3)
up 4% to 35.0p (2014: 33.7p)
• Underlying operating cash conversion 104% (2014: 119%)
• Net borrowing in line with expectations as we invest for growth
Financial results summaryCONSISTENTLY DELIVERING TO EXPECTATIONS
(1) After Joint Ventures net financial expense and taxation charge of £7.1m and £2.9m (2014: £6.4m and £2.7m) respectively and before intangible amortisation of £20.0m (2014: £16.8m) and non-recurring operating items of £5.0m (2014:Nil)
(2) After Joint Ventures taxation charge and before intangible amortisation, non-recurring operating items, non-operating items of £2.5m (2014: Nil) and fair value movements in derivative financial instruments of £6.1m (2014: £3.6m charge)
(3) Before intangible amortisation, non-recurring operating items, non-operating items and fair value movements in derivative financial instruments
14
Strategy andprospectsRICHARD HOWSONGROUP CHIEF EXECUTIVE
A Carillion joint venture provides hard facilities management services for over 70,000
buildings, equivalent to around 85 per cent of the UK Defence Infrastructure
Organisation’s estate, under five contracts together worth around £1 billion over five-
years, which is extendable to 10 years and a total value of up to £2.5 billion.
15
Our integrated, scaleable business model
16
HOW WE ADD VALUE
Resources What we do
• Centralised operating
platform
• Strong risk
management
• First-class supply
chain management
• Embedding
sustainability into
everything we do
• Building long-term
partnerships with
customers, partners
and suppliers
• Living our Values
• High standards of
corporate governance
Key outputsHow we do it
• Growing a sustainable
business and creating
value for all our
stakeholders
• Financial strength
• Excellent people
• First-class expertise
• Leadership in Health &
Safety
• Leadership in
sustainability
Value created and shared with our stakeholders and also reinvested in our business
Our track record
Over the last 5 years we have
• Responded decisively to the economic downturn
• Rescaled and repositioned our businesses in growth markets
• Developed Middle East strategy to mitigate effects of low oil price
• Created a highly efficient supply chain management system
• Maintained financial strength to support strategy for growth
This has enabled us to
• Develop a robust, resilient business and a platform for growth
• Build a £17.4bn order book
• Deliver a greater than inflation 5-year dividend CAGR of 3.3%
• Return to revenue growth
• Deliver strong margins
• Position the business to make further progress in 2016
CONSISTENT AND SUCCESSFUL CORE STRATEGY AND BUSINESS MODEL
17
2015 revenue by geography TOTAL GROUP REVENUE £4.6BN, UP 13%
18
1,151 2,052
UK(1)
£3,357m - 73%(2014: £2,954m - 73%)
39
367
Canada(2)
£513m - 11%(2014: £543m - 13%)
107
115
Middle East and North Africa
£717m - 16%(2014: £576m - 14%)
602
61%
5%
34%
72%
8%
20%
16%
84%
154
Support services
Public Private Partnership
(PPP) projects
Construction services
Support services
Construction services
Support services
Public Private Partnership
(PPP) projects
Construction services
(1) Includes £22.0m (2014: £12.7m) of revenue generated outside the UK, Middle East and North Africa
and Canada
(2) Includes £9.8m (2014: £5.2m) of revenue generated in the Caribbean
Major contract mobilisations in 2015 PROGRESSING WELL AND IN LINE WITH EXPECTATIONS
19
• Mobilised from February 2015
• Worth £1.1bn over initial 5-year period
• FM for over 70,000 MoD buildings - 85% of MoD estate
• Leading skills/national delivery capability
• Leading IT/cyber security capability
• Sustainability a key differentiator
Next Generation Defence contracts
FM services for public sector prisons
• Mobilised from June 2015
• £200m, 5-year contracts
• Potentially extendable to 7 years, worth up to £280m
• Hard and soft FM for 54 public sector prisons
• Leading capability to provide integrated solutions
• Around 150 separate service lines
• Ability to deliver high quality, value for money
• Sustainability a key differentiator
Order book and probable orders
20
REVENUE VISIBILITY OF 84% FOR 2016
• 80% of orders plus probable orders in support
services and PPP projects (2014: 82%)
• Order book of £15.8bn, plus probable orders of
£1.6bn totalling £17.4bn (2014: £18.6bn)
• Strong revenue visibility(1)
for 2016 of 84%
(2014: 85% for 2015)
• In addition, we have been awarded framework
agreements with a total potential value of over
£2bn
Support services £12.7bn 73%(2014: £14.1bn: 76%)
Public Private Partnership(PPP) projects £1.2bn 7%(2014: £1.2bn: 6%)
Middle East construction services £0.8bn 5%(2014: £0.9bn: 5%)
Construction services (excludingthe Middle East) £2.7bn 15%(2014: £2.4bn: 13%)
£3.7bn(2014: £5.1bn)
Total orders plus probable orders
£17.4bn(2014: £18.6bn)
New orders and probable orders 15% 73%
7%
5%
(1) Based on expected revenue and secure and probable orders, which exclude variable work, frameworks and re-bids
Support services
21
SIGNIFICANT SUCCESSES IN 2015
Support services
• SCAPE framework for Local Authorities
– potential value up to £1.5bn over 6 years
• UK Central Government FM Agreement
– share of £1.3bn to £4.1bn over 4 years
• Smart Motorways
– £238m
• Network Rail
– contracts/frameworks £92m
• Support services for PPP projects
– UK and Canada £260m
• Canada support services
– Oil & Defence sectors £100m
Financial close on 4 projects
Midland Met Hospital
Midlands Priority Schools(1)
North Battleford Hospital, Canada
Stanton Hospital Canada
Preferred bidder
Irish Schools Bundle 5
Public Private Partnership projects SIGNIFICANT SUCCESSES IN 2015
22
(1) Classified as a probable order at 31 December 2014 and became a secure order in August 2015
Project
Equity
(£m)
Support services
and construction
revenue (£m)
13.3
5.6
3.5
3.9
437
187
65
100
Not disclosed
UK and Middle East construction
23
SIGNIFICANT SUCCESSES IN 2015
Middle East construction
• Triplets, Kings Cross, London £140m(1)
• Barts Square, London, £91m(1)
• A5-M1 Link, £85m(1)
• A14 upgrade, £146m
• Great Arundel Court, London, £100m
• Homes & Communities Agency Leeds, £80m
• La Mer, Dubai, £155m(1)
(Al Futtaim Carillion 50:50 JV)
• Dubai Trade Centre Phase 1A5, £125m (Al Futtaim Carillion 50:50 JV)
• BP Khazzan Gas project, Oman, £80m
UK construction
(1) Classified as a probable order at 31 December 2014 and became a secure order in H1 2015
Substantial high-quality pipeline SIGNIFICANT OPPORTUNITIES FOR FURTHER PROGRESS
24
Support services £12.1bn 29%(2014: £11.1bn: 29%)
Public Private Partnership
(PPP) projects £2.4bn 6%(2014: £2.5bn: 6%)
Middle East
construction services £16.0bn 39%(2014: £15.4bn: 39%)
Construction services (excluding
the Middle East) £10.9bn 26%(2014: £10.2bn: 26%)
41.4£bn
25.7
33.135.2
37.539.2
20122011 2013 2014 2015
Pipeline opportunities
£41.4bn(2014: £39.2bn)
2010
12.1
2.4
16.0
10.9
11.1
2.5
15.4
10.2
Growth market sectors
25
UK, CANADA, MIDDLE EAST
Support services Public Private Partnerships
£2.5bn2015 revenue
Constructionservices
£12.7bnOrder book
£12.1bnPipeline
£0.2bn2015 revenue
£1.2bnOrder book
£2.4bnPipeline
£1.9bn2015 revenue
£3.5bnOrder book
£26.9bnPipeline
Well positioned for growth
26
TARGETING FURTHER PROGRESS IN 2016
• Returned to revenue growth for the first time since 2010
• Strong operating profit and cash flow performance
• Robust, high-quality order book plus probable orders
• Entered 2016 with revenue visibility(1) of 84%
• Expanding pipeline of contracts in markets that have growth prospects
• Successful strategy and business model with robust balance sheet to support growth
• Well positioned to make further progress in 2016, including revenue and margin growth in support services
(1) Based on expected revenue and secure and probable orders, which exclude variable work, frameworks and re-bids
Appendices
27
Carillion is the leading provider of apprenticeship
training in our sector, with up to 2,000 apprentices
in training at any one time in our 19 dedicated
training centres across the UK.
Facts about Carillion
28
Support services
Public Private Partnership (PPP) projects
• Carillion has the skills and resources to provide all the services needed to manage and maintain property, road, rail and utility infrastructure networks
• We provide facilities management and other support services for thousands of public and private sector buildings
• We provide management and maintenance services for some 17,000 kilometres of road in the UK and Canada
• In the UK, we provide services for public utility networks, including the broadband network for Openreach for whom we are also a key delivery partner in the roll out of super-fast fibre access
• In Canada, we provide power transmission and distribution services and remote site accommodation services
• In the Middle East we provide facilities management services for property estates and highways maintenance services
• We have been a leader in PPP projects since the inception of the UK’s Private Finance Initiative in the early 1990’s
• Since then, we have financially closed 65 PPP contracts in the UK and Canada for hospitals, schools, prisons, military accommodation, roads and railways
• We have sold PPP equity investments generating proceeds of some £620 million and a pre-tax profit of around £241 million
• In the Middle East, we are developing opportunities for PPP projects to support customer investment programmes
Carillion is a leading integrated support services company employing some
46,000 people across the UK, in the Middle East and Canada
Facts about Carillion
29
Middle East construction services
Construction Services(excluding the Middle East)
• We have around 40 years experience of operating in the Middle East, where we have built an outstanding reputation for quality and reliability
• We operate in the UAE, Oman, Qatar, the Kingdom of Saudi Arabia and Egypt
• We have built many of the region’s iconic landmark projects, including Dubai Festival City, the Grand Mosque in Oman, the Yas Hotel, (centre piece of Abu Dhabi’s Formula 1 Grand Prix circuit) and the Royal Opera House in Oman
• Our history in construction spans almost two centuries, as Carillion brings together the heritage of Tarmac, Mowlem and Alfred McAlpine
• Carillion has continued to deliver outstanding projects, such as the new Government Communication Headquarters in Cheltenham, 17 major hospitals, some 160 new schools, several prisons and numerous motorway, trunk road and rail projects
• In Canada, where we have operated for around 50 years, we have also built a reputation for delivering high-quality projects, particularly Public Private Partnership projects, where we have financially closed, 9 major projects, notably in the healthcare sector.
Carillion is a leading integrated support services company employing some
46,000 people across the UK, in the Middle East and Canada
Revenue and profit summary
30
127.3
19.3
146.6
39.4
9.9
49.3
20.6
4.7
25.3
35.7
2.1
37.8
259.0
(14.6)
244.4
(7.1)
(2.9)
234.4
Support services
Group
Share of joint ventures
Total
Public Private Partnership projects
Group
Share of joint ventures
Total
Middle East construction services
Group
Share of joint ventures
Total
Construction services (excluding the Middle East)
Group
Share of joint ventures
Total
Total revenue and operating profit
Group eliminations and unallocated items
Operating profit (before Joint Ventures net financial expense and taxation)
Share of Joint Ventures net financial expense
Share of Joint Ventures taxation
Underlying profit from operations
£m 20142015
+8%
+43%
+1%
-9%
+8%
+8%
2014
2,342.4
191.8
2,534.2
1.3
191.5
192.8
358.9
242.7
601.6
1,248.1
10.2
1,258.3
4,586.9
2015
Underlying operating profit(1)Revenue
2,099.7
224.2
2,323.9
1.5
161.0
162.5
323.4
177.3
500.7
1,069.3
15.5
1,084.8
4,071.9
113.5
22.4
135.9
24.1
10.4
34.5
24.3
0.8
25.1
40.9
0.6
41.5
237.0
(11.0)
226.0
(6.4)
(2.7)
216.9
+9%
+19%
+20%
+16%
+13%
(1) Before intangible amortisation and non-recurring operating items
67 49
242
805
51
113
24
0
100
200
300
400
500
600
700
800
900
2016 2017 2018 2019 2020 2021 2022 2023 2024
£1.4bn of available fundingMATURITY PROFILE FOLLOWING RENEWAL OF UK BORROWING FACILITIES
31
£m
15
-
Total revenue by sector/geography
32
UK public sector
UK regulated sector
UK private sector
International
0.8 0.8
1.2
1.8
39%
27%
17%17%
Total revenue
2015: £4.6bn (2014: £4.1bn)
Risk management STRONG AND RESILIENT PROCESSES
33
Carillion plc Board
Board sub-committees
Business Integrity Committee
SustainabilityCommittee
Major Projects Committee
Audit Committee
Corporate Oversight and Direction
Group Chief Executive’s Leadership Team
OtherFunctional Heads
Group RiskManagement
Operations
Business UnitManaging Directors
Contract RiskManagers
Business UnitRisk Management
PeerReviews
Assurance
Internal Audit
External Audit
External Benchmarking
Market sectors
34
UK
Support services
Public Private Partnerships
£2.1bn2015 revenue
Constructionservices
£1.1bn2015 revenue
£0.2bn2015 revenue
• Defence
• Roads
• Rail
• Airports
• Private sector ‘relationship customers’
• High/mid rise residential
• Increased Government spending from 2015, especially on infrastructure
• Infrastructure services
– Rail and roads
– Power distribution
– Airports
• Property FM services
– Public sector
– Health
– Local Authorities
– Defence
– Ministry of Justice
– Private sector
• Integrated solutions
– Healthcare/hospitals
– Schools/academies
– Highways
• £54m of equity still to be invested in 4 financially closed projects
• Targeting further projects for 2016
Market sectors
35
CANADA
Support services
Public Private Partnerships (PPP)
£0.4bn2015 revenue
Construction services
£0.1bn2015 revenue
£39m2015 revenue
• PPP driven
• Key sectors
– Health
– Roads
– Rail
– Airports
– Power
• Major programmes with total capital value of some $60bn
– Ontario
– British Columbia
– Alberta
– Saskatchewan
• £7m of equity still to be invested in 2 financially closed projects
• Targeting further projects in 2016
• Highways maintenance
• Acquisition of Outland Group in 2015 broadens services offering to include remote site accommodation and associated services
• Power transmission & distribution
• FM
– Health (PPP projects)
– Defence
– Education
– Municipalities
• Oil & Gas/natural resource industries
• Medium-term growth from expansion into new Provinces
Market sectors
36
MIDDLE EAST
Construction services
Public Private Partnerships (PPP)
£0.6bn2015 revenue
Supportservices
£0.1bn2015 revenue
£nil2015 revenue
• Property FM
– Health
– Airports
– Commercial
• Infrastructure services
– roads and rail
• Energy services
• Oil & gas sector services
• Opportunities for growth in 2016 and over medium term
– Dubai
– Oman
– Qatar
• Medium term
– Abu Dhabi 2030 Plan
– Saudi Arabia
• UK Export Finance is a key differentiator for Carillion
• Increasing potential for PPP projects in Middle East and other international regions e.g.
– Oman
– Turkey
Directors’ valuation of equity in financially closed Public Private Partnership projects
37
VALUATION BROADLY LEVEL DESPITE £54m EQUITY SALES
Discount rate
0
30
60
90
120
150
5% 6% 7% 8% 9% 10% 11% 12%
Net
pre
sen
t valu
e (
£m
)
£68m(1)
£46m(2)
Net present value at 31 December 2015
£46m (2014: £48m)
• At 31 December 2015 £48m of gross(3)
equity invested, and £62m of further equity committed for investment, in 17 financially closed projects
• In 2015, financially closed two projects in the UK and two projects in Canada, in which we expect to invest over £26m of equity
• Currently preferred bidder on Irish Schools Bundle 5 - potential equity requirement not disclosed.
• Currently shortlisted for a further three projects with potential equity requirements of around £20m
• Strong pipeline of further opportunities in the UK and Canada
• Opportunities also emerging in the Middle East, particularly Oman and Egypt
(1) Average discount rate for disposals in 2015
(2) Directors’ valuation (3) Before repayments received
• Potential for approximately £90m of further equity
investments
38
Financially closed PPP projects
Roads
A13
Aberdeen Western Peripheral
Health
Royal Ottawa Hospital, Canada
New Oakville Hospital, Canada
Battleford Hospital, Canada
Stanton Hospital, Canada
Royal Liverpool Hospital
Midland Metropolitan Hospital
PPP projectFinancial
Close Date StatusConcession Period Years
EquityInvested
to date (£m)Equity
Share (%)
TotalCommittedEquity (£m)
Non-RecourseDebt (£m)
2000
2014
2004
2011
2015
2015
2013
2015
Operational
In Construction
Operational
Operational
In Construction
In Construction
In Construction
In Construction
30
33
20
34
33
33
35
33
7.5
-
0.7
21.6
-
-
-
-
7.5
20.2
0.7
21.6
3.5
3.9
15.2
13.3
25
33
50
40
50
50
50
50
Continued
45.5
74.3
-
106.0
43.2
30.3
74.8
25.0
At 31 December 2015
39
Financially closed PPP projects
PPP projectFinancial
Close Date StatusConcession Period Years
EquityInvested
to date (£m)Equity
Share (%)
TotalCommittedEquity (£m)
Non-RecourseDebt (£m)
1995
2015
2007
2008
2009
2009
2010
2010
2010
Operational
In Construction
Operational
Operational
Operational
Operational
Operational
Part operational,
construction
Operational
30
28
25
25
25
25
25
25
30
-
-
0.4
0.4
1.0
0.5
0.5
4.2
11.5
48.3
-
5.6
0.4
0.4
1.0
0.5
0.5
4.2
11.5
110.0
100
42.5
4
8
8
8
8
part 8; part 80
50
-
10.0
2.0
4.2
9.4
3.6
4.7
40.3
45.3
518.6
At 31 December 2015
Education
University of Greenwich
Priority Schools Midlands
South Tyneside and
Gateshead Schools BSF
Nottingham Schools BSF
Tameside Schools BSF
Durham Schools BSF
Rochdale Schools BSF
Wolverhampton Schools BSF
Other
Forensic Service and Coroners
Complex, Canada
TOTAL
Public Private Partnership Pipeline
40
At 31 December 2015
Preferred bidder
Irish Schools Bundles 5
Projects shortlisted
Mackenzie Vaughan Hospital
Enterprise Data Centre Borden
Calgary South West Ring Road
Facilities Management (£m)
Construction(£m)
Concession Period Years
Equity andSub Debt (£m)
Up to 50
Up to 45
Up to 55
Up to 90
Up to 45
Nil
Up to 5
Up to 5
Up to 10
Availability
Availability
Availability
Availability
34
28
33
PaymentBasis
Lifetime Concession Turnover (£m)
Up to 150
Up to 70
Up to 350
Not disclosed
Middle East construction servicesREVENUE BY COUNTRY
41
166
188
41
Dubai
Abu Dhabi
Oman
Egypt
Qatar & Saudi
34%
7%
31%
207
28%224
82
60
23%
12%
16%
115
204%
45%
2015 Revenue
£602m
2014 Revenue
£501m
Acquisitions and disposals
• Investments principally includes equity and sub-debt in PPP projects
• Acquisition of the Outland Group is the initial instalment of the consideration payable, net of £3.0m cash acquired
• Acquisition of the Rokstad Corporation is the second tranche of the consideration payable
• Transaction costs relate to the aborted merger discussions with Balfour Beatty and the acquisition of the Rokstad Corporation and the Outland Group
42
Investments
Acquisition of the Outland Group
Acquisition of the Rokstad Corporation
Acquisition of the Bouchier Group
Transaction costs
Other
£m 2015
(21.5)
(7.7)
(6.1)
-
(6.6)
2.3
(39.6)
7.0
-
(29.9)
(8.6)
-
(3.0)
(34.5)
2014
Cautionary Statement
This presentation may contain indications of likely future developments and other forward-
looking statements that are subject to risk factors associated with, among other things, the
economic and business circumstances occurring from time to time in the countries, sectors and
business segments in which the Group operates. These and other factors could adversely
affect the Group's results, strategy and prospects. Forward-looking statements involve risks,
uncertainties and assumptions. They relate to events and/or depend on circumstances in the
future which could cause actual results and outcomes to differ materially from those currently
anticipated. No obligation is assumed to update any forward-looking statements, whether as a
result of new information, future events or otherwise.
2015
Preliminary Results
44
‘Living’ our values shapes the way we do business – how we work
with each other, our customers, our suppliers, our partners and all
those with whom we interact when delivering our services.