2012 Results and Strategy Review 2012 Results - Review Ken Hanna - - PowerPoint PPT Presentation

2012 Results and Strategy Review

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2012 Results - Review

Ken Hanna Chairman

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2012 Results - Review

Angus Cockburn Chief Financial Officer

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2012 Results Pre-Exceptional

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2012 2011 Movement £m £m As reported Underlying Revenue 1,583 1,396 13% 14% Revenue excl. pass-through fuel 1,543 1,288 20% Trading profit 386 341 13% 6% Operating profit 390 345 13% Net interest expense (25) (18) (32)% Profit before tax 365 327 11% Taxation (95) (93) (2)% Profit after tax 270 234 15% Dividends per share (declared) 23.91p 20.79p 15% Diluted Earnings Per Share 101.66 87.72 16%

(1) All numbers are pre-amortisation of intangible assets arising from business combinations and pre-exceptional items. Note: Post amortisation and exceptional items: 2012 PBT £367m, PAT £276m, D-EPS 103.86p; 2011 PBT £324m, PAT £260m, D-EPS 97.49p

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2012 Results Post-Exceptional

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2012 2011 Movement £m £m As reported Underlying Revenue 1,583 1,396 13% 14% Revenue excl. pass-through fuel 1,543 1,288 20% Trading profit 393 341 15% 8% Operating profit 397 345 15% Net interest expense (25) (18) (32)% Profit before tax 372 327 14% Taxation (92) (64) (50)% Profit after tax 280 263 5% Dividends per share (declared) 23.91p 20.79p 15% Diluted Earnings Per Share 105.14 98.83 5%

(1) All numbers are pre-amortisation of intangible assets arising from business combinations Note: Post amortisation and exceptional items: 2012 PBT £367m, PAT £276m, D-EPS 103.86p; 2011 PBT £324m, PAT £260m, D- EPS 97.49p

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2012 Results

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Bridge

Revenue £m Trading Profit £m

2011 1,396 341 Currency translation impact (6) (1) 2011 pass-through fuel (108) (2) 2012 pass-through fuel 40 (1) Poit Energia acquisition 33 3 Underlying growth incl events 228 46 2012 1,583 386 Headline growth 13% 13% Constant Currency growth 14% 13% 2011 revenue from Asian Games & London Olympics £(6)m 2012 revenue from London Olympics £60m Underlying growth in constant currency excl events 14% 6%

(1) All numbers are pre-amortisation of intangible assets arising from business combinations and pre-exceptional items. (2) The underlying growth percentages include the currency impact of pass-through fuel (revenue £1m, trading profit £nil )

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2012 Results

Balance Sheet 2012 £m 2011 £m Intangible assets/goodwill 169 81 Tangible fixed assets 1,278 1,087 Working capital 262 150 Provisions for liabilities & charges (6)

• Retirement benefit obligation

(4) (6) Derivative financial instruments (3) (14) Provisions for taxes (58) (52) Net borrowings (593) (365) NET ASSETS 1,045 881

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2012 Results

Financial Indicators

2012 2011 EBITDA(1) £626m £531m Capital investment £440m £418m Net borrowings £593m £365m Interest cover – EBITDA basis(1) 25 times 28 times Net debt to EBITDA(1) 0.9 times 0.7 times Effective tax rate(1) 26.0% 28.5% Gearing 57% 42% Dividend Cover (declared basis)(1) 4.2 times 4.2 times Return on average capital employed(2) 25% 29%

(1) Before amortisation of intangible assets arising from business combinations and exceptional items. (2) Before amortisation and excluding the net book value of intangible assets arising from business combinations and pre-exceptional items .

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2012 Results

Cash Flow from Operating Activities (£m)

2012 2011 Operating profit pre exceptional items(1) 390 345 Exceptional items 7

• Depreciation & amortisation(1)

236 186 Changes in working capital (169) (38) Net movement in provisions for liabilities & charges 6

• Other non-cash movements

9 16 Net cash inflow from operating activities 479 509

(1) Before amortisation of intangible assets arising from business combinations

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2012 Results

Cash Flow Statement (£m)

2012 2011 Net cash inflow from operating activities 479 509 Net interest paid (23) (17) Taxation paid (83) (89) Acquisitions(1) (127) (14) Purchase of fixed assets (440) (418) Proceeds from disposal of fixed assets 13 13 Dividends paid (58) (52) Cash outflow in year (239) (68) Issue of shares 3 2 Purchase of own shares held under trust (11) (10) Return of capital to shareholders (2) (148) Exchange 21 (8) Movement in net debt in year (228) (232)

(1) Total cash paid as at 31 Dec 2012 for Poit was £136m comprising £127m per acquisitions line, £6m within working capital movements and the add back of the £3m of cash acquired.

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Another strong performance

• Highlights
• Both business grew revenues in difficult economic environment
• Power Projects revenues +15%, Local +23%; 20% increase in average MW power on rent
• Power Projects benefitting from key strategic moves
• Gas continues to grow strongly: 750 MW on rent, + 77% more on rent y-o-y
• 100 MW cross-border project in Mozambique operating as an Independent Power Producer
• Local business growing fast
• Strong performance in North America; 30%+ growth in emerging markets
• Flawless execution of London Olympics
• Poit Energia acquisition completed and integration progressing well
• Successful implementation of new organisation structure
• Lowlights
• Power Projects margins and ROCE; on-going debtor challenge in Power Projects with £25m

increase in bad debt provision

• Continued low growth in European business in face of weak economic environment
• Weak H2 Power Projects order intake – slowing growth rates in emerging markets

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Underlying vs Reported Growth

2012 2011 Revenues as reported (excl pass through fuel) 20% 11% Revenues underlying (1) (2) 14% 22% Trading Profit as reported (excluding pass through fuel) 14% 8% Trading Profit underlying (1) (2) 6% 26%

(1) Underlying adjustments in 2012 were Asian Games, the London Olympics, Poit Energia, pass-through fuel and currency. (2) Underlying adjustments in 2011 were the Vancouver Winter Olympics, FIFA World Cup, the Asian Games, the London Olympics, pass-through fuel and currency. (3) All numbers are stated pre-amortisation of intangible assets.

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Segmental performance – as reported(1)

REVENUE TRADING PROFIT 2012 £m 2011 £m Constant Curr % 2012 £m 2011 £m Constant Curr % Local Business 905 734 25% 175 124 41% Trading Margin: 19% 17% Rolling 12-month ROCE: 21% 19% Power Projects 638 554 15% 212 215 (1)% excl pass-through fuel Trading Margin: 33% 39% Rolling 12-month ROCE: 31% 40% Pass-through fuel 40 108 (63)% (1) 2 (133)% Total 1,583 1,396 14% 386 341 13% Trading Margin: 24% 24% Rolling 12-month ROCE: 25% 29%

(1) Pre-amortisation and excluding the net book value of intangible assets arising from business combinations.

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Segmental performance – underlying(1)

REVENUE TRADING PROFIT 2012 £m 2011 £m Underlying % 2012 £m 2011 £m Underlying % Local Business 812 721 13% 144 120 20% Trading Margin: 18% 17% ROCE: 19% 19% Power Projects 638 554 15% 212 214 (1)% excl pass-through fuel Trading Margin: 33% 39% ROCE: 31% 40% Total 1,450 1,275 14% 356 334 6% Trading Margin: 25% 26% ROCE: 25% 28%

(1) Pre-amortisation and excluding the net book value of intangible assets arising from business combinations. Also excluding revenue, trading profit and operating assets from Asian Games, London Olympics, Poit acquisition, pass-through fuel and currency.

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Revenue Mix (£m)

REVENUE % OF REVENUE EXCL PASS- THROUGH FUEL 2012 2011 Underlying(1) % 2012 2011 Change pp Power 1,109 899 16% 72% 70% 2 Temperature Control 114 116

• %

7% 9% (2) Oil-Free Air 28 27 2% 2% 2%

• Total Rental

1,251 1,042 14% 81% 81%

• Service Revenue

292 246 13% 19% 19%

• Revenue excl pass-

through fuel 1,543 1,288 14% 100% 100% Pass-through fuel 40 108 N/A Total Revenue 1,583 1,396 14%

(1) excluding revenue from Asian Games, London Olympics, Poit acquisition, pass–through fuel and currency.

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Local Business – North America

REVENUE TRADING PROFIT(1) 2012 $m 2011 $m Underlying Change % 2012 $m 2011 $m Underlying Change % Full year 482 415 16% 108 83 31% Trading Margin 23% 20% Second half 274 230 20% 75 55 34% Trading Margin 28% 24%

• Strong performance across a number of sectors and geographies
• Power revenue up 31%; volume and rates up; strong performance in oil & gas sector
• TC down 1% mainly due to lower volumes in Cooling Towers business
• Significant steps taken on emissions technology; by end of 2013 will be Tier 3/4 compliant on 50% of

fleet

(1) before amortisation of intangible assets arising from business combinations. Note: Underlying excludes currency

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Local Business – Europe & Middle East

REVENUE TRADING PROFIT(1) 2012 £m 2011 £m Underlying Change % 2012 £m 2011 £m Underlying Change % Full year 367 302 5% 68 42 4% Trading Margin 19% 14% Second half 202 170 2% 54 32 (1)% Trading Margin 27% 19%

• Strong year on reported basis with successful execution of £60m London Olympics contract
• Respectable year on an underlying basis: Europe revenues up 3% and Middle East & Developing Europe up 8%
• Mixed performance across geographies: UK, Spain, Italy and most of Middle East good; Germany, France and Qatar

more difficult

• Continued growth in Russia: over 160 MW on rent at Dec 12; and market looks promising in Iraq and Eastern Europe

(1) before amortisation of intangible assets arising from business combinations. Note: Underlying excludes currency & London Olympics

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Local Business – Aggreko International

REVENUE TRADING PROFIT(1) 2012 £m 2011 £m Underlying Change % 2012 £m 2011 £m Underlying Change % Full year 234 173 20% 38 31 22% Trading Margin 16% 18% Second half 127 95 13% 19 16 12% Trading Margin 15% 17%

• Strong growth in most areas: Australia Pacific +27%, Brazil (ex Poit) +34%, Mexico +34%, Argentina +49%
• Poit Energia acquisition completed and integration of two businesses progressing well
• 26 new locations opened or acquired

(1) before amortisation of intangible assets arising from business combinations. Note: Underlying excludes currency, Asian Games & Poit Energia acquisition.

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Power Projects

Excluding pass-through fuel REVENUE TRADING PROFIT(1) 2012 $m 2011 $m Underlying Change % 2012 $m 2011 $m Underlying Change % Full year 1,012 888 15% 335 344 (1)% Trading Margin 33% 39% Second half 522 469 14% 169 207 (10)% Trading Margin 32% 44%

• 23 new contracts / 1,029 MW of new work in 13 countries; 280 MW Asia, 606 MW Africa & Middle East, 143 MW Latin America
• Bad debt provision increased by $39m ; mainly in respect of 2 slower paying customers
• 12 months of revenue at current run rates
• Fleet size over 5,000 MW at 1/1/2013; over 1,000 MW gas
• Continued strong growth in gas, 77% increase in average MW on rent

(1) before amortisation of intangible assets arising from business combinations.

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Outlook

• Local business had very strong start

– ~20% more power on rent year-on-year; helped in part by Poit acquisition in April 2012

• Power Projects signs 140 MW of new orders year to date; including 56 MW

for our new HFO engine and 57 MW in Djibouti

• Power Projects trading remains subdued and is likely to remain so in the

first half; however some improvement in prospect pipeline in recent weeks

• Expectations for the year as a whole remain unchanged from previous

guidance