Full Year 2017 Results Presentation 8 March 2018 ] 2 2 Olivier - - PowerPoint PPT Presentation

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Full Year 2017 Results Presentation

8 March 2018

2

Olivier Brousse

Chief Executive Officer

2 www.laing.com

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2017 results highlights – strong growth

10.5% increase in NAV to £1,123.9m (13.5% including dividends paid) NAV of 306p per share (277p per share at 31 December 2016)(1) Investment commitments of £383m well ahead of guidance Pipeline at £2.15bn (2016 - £1.86bn) Realisations of £289m 12% increase in external assets under management to £1.6bn 30% increase in total dividend(1)

Final base dividend of 3.82p per share(1) Special dividend of 4.88p per share(1)

___________________________

• 1. Not adjusted for rights issue

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£210m rights issue to fund further growth

___________________________ 1.Includes dividends paid

Growing pipeline

• f opportunities

 Group investments of £383m in 2017 - a significant step change  Growing pipeline of £2.15bn in both PPP and RE opportunities and

across our three geographic markets

 Continue to grow relationships with international partners

Flexibility to access more and / or larger

• pportunities

 Increase in investment opportunity leads to potential risk of realising

assets earlier than optimally

 Equity raise will provide additional capital and enable the Group to

take advantage of more and larger opportunities

 Self-funding model and disciplined approach to investment to continue

Strong track record of NAV growth

 Continuing strategy to create value for shareholders through growth in

NAV and dividends.

 NAV CAGR of 15.5%(1) since IPO

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Growing and well diversified pipeline of equity opportunities

£1,494m

£2,150m

Renewable Energy

PPP

£1,585m

Asia Pacific 27% Europe 33% North America 40% Asia Pacific 31% Europe 28% North America 41%

£565m

£1,859m

31 Dec 2016 31 Dec 2015 31 Dec 2017 North America 40% Asia Pacific 28% Europe 32%

• Other potential geographies: selected countries in Latin America

& South East Asia

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Strong partner relationships across all geographies

Toronto New York London Melbourne Sydney Auckland Amsterdam John Laing’s offices

Partner relationships straddle both geographies and sectors



Late stage investment

• pportunities arise from partner

relationships  John Laing continues to grow partner relationships



Los Angeles

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Shortlisted / exclusive investment opportunities

John Laing offices Shortlisted PPP projects

Europe:

• National Broadband, Rol
• Silvertown Tunnel, UK
• A16, Netherlands
• Plus four exclusive renewable energy opportunities.

North America:

• Gordie Howe International Bridge, US/Canada
• Hurontario LRT, Ontario
• Los Angeles CONRAC, California
• Hamilton Rail, Ontario
• Pennsylvania Broadband, Pennsylvania
• I-75 Road, Michigan

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Projects under construction in 2017

Intercity Express Programme New Perth Stadium New Generation Rollingstock Sydney Light Rail

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Investment commitments well ahead of guidance

Project Region PPP (£m) RE (£m) Total (£m) Buckthorn Wind Farm North America

• 47.6

47.6 Rocksprings Wind Farm North America

• 62.9

62.9 I-66 Managed Lanes North America 118.0

• 118.0

Solar House Europe

• 22.0

22.0 New Grafton Correctional Centre Asia Pacific 79.3

• 79.3

Hornsdale 3 Wind Farm Asia Pacific

• 10.0

10.0 Melbourne Metro Asia Pacific 43.1

• 43.1

Total 240.4 142.5 382.9

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Realisations of assets ahead of guidance

Project Holding sold JLEN (£m) JLIF (£m) Other (£m) Total (£m) M6 Hungary Road 30%

• 22.7

22.7 A1 Poland Road 29.69%

• 120.4

120.4 Croydon & Lewisham Street Lighting 50%

• 8.2
• 8.2

Lambeth Social Housing 50%

• 104.6
• 104.6

Coleshill Parkway 100% Aylesbury Vale Parkway 50% City Greenwich Lewisham (DLR) 5% IEP (Phase 1) 9% Llynfi Wind Farm 100% 43.0

• 43.0

Total realisations agreed 43.0 112.8 143.1 298.9 Not completed in 2017: Lambeth Social Housing (9.9) Total realisations for 2017 289.0

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Patrick O’D Bourke

Group Finance Director

11 www.laing.com

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NAV growth of 10.5%

Net asset value movement – year ended 31 December 2017

1,016.8 1,123.9 160.7 6.4 (29.9) (30.1) 700 800 900 1,000 1,100 1,200

31 December 2016 Fair value movement

• n portfolio

Pension deficit Other P&L income less costs Dividends paid 31 December 2017

(£m)

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Summary Balance Sheet – re-presented

Key line items 31 December 2017 (£m) 31 December 2016 (£m) Portfolio value 1,193.8 1,175.9 Cash collateral 133.1 23.7 Non-portfolio assets 0.3 0.3 Total investments 1,327.2 1,199.9 Other long term assets 2.1 3.7 Cash 14.6 53.1 Total Assets 1,343.9 1,256.7 Working capital and provisions (3.7) (5.6) Cash borrowings (176.0) (165.0) Pension deficit (IAS 19) (32.3) (61.3) Other retirement benefit obligations (8.0) (8.0) Total Liabilities (220.0) (239.9)

Net Assets 1,123.9 1,016.8

Assets Liabilities

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Investment portfolio at 31 December 2017 Value Weighted Average Discount Rates

31 December 2017 31 December 2016

£580.3m 9.3% 9.1% £603.2m 7.9% 8.4% £10.3m

• £1,193.8m

8.8% 8.9% Primary Investments

(projects under construction)

Balanced investment portfolio

Secondary Investments

(projects in

• peration)

 11 PPP projects  3 Renewable Energy projects  11 PPP projects  16 Renewable Energy projects  Shareholding in JLEN (at 31 December 2017 share price)

14 27

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Diversified and balanced portfolio at 31 December 2017

Shadow Toll JLEN Availability Volume (including RE investments)

By Revenue

JLEN Transport

• other

Transport - rolling stock Environmental

• wind and

solar Social Environmental - waste and biomass

By Sector

NZ dollar Sterling Euro Australian dollar US dollar

By Currency

• At 31 December 2017, ± 5% movement in Sterling would decrease / increase portfolio

valuation by c.£38m

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Components Year ended 31 December 2017 (£m) Year ended 31 December 2016 (£m) Unwinding of discounting 80.0 77.1 Reduction of construction risk premia 53.6 52.7 Foreign exchange movements (11.0) 74.7 Macro economic impacts 4.1 (13.8) Change in power and gas price forecasts (54.8) (17.6) Change in operational benchmark discount rates 23.6 27.5 Uplift on financial closes 50.1 31.0 Value enhancements and other changes 15.1 (17.2) Fair value movement 160.7 214.4

Continuing value creation

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Pension deficit under IAS19

• Net IAS19 deficit: £32.3 million at 31 December 2017

(£61.3 million at 31 December 2016) – £24.7 million scheduled cash contribution to JLPF during the year – Average contributions of £26m per annum to JLPF agreed over seven year repayment period from 31 March 2016

£million IAS19 (deficit)/ surplus John Laing Pension Fund (35.2) John Laing Pension Plan 2.9 Summary Balance Sheet (32.3)

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Summary Cash Flow – re-presented

Key line items Year ended 31 December 2017 (£m) Year ended 31 December 2016 (£m)

Cash yield 40.9 36.8 Operating cash flow (17.3) (10.9) Net FX impact (1.3) (18.2) Total operating cash flow 22.3 7.7 Cash investments in projects (209.9) (301.5) Proceeds from realisations 287.1 146.6 Cash received from acquisition of Manchester Waste VL Co by the GMWDA 23.5

• Net investing cash flow

100.7 (154.9) Finance charges (8.3) (6.8) Cash contributions to JLPF (incl. PPF levy) (24.7) (18.4) Dividend payments (30.1) (26.2) (63.1) (51.4) Cash inflow / (outflow) 59.9 (198.6) Opening net (debt) / cash (88.2) 110.4 Closing net debt (28.3) (88.2)

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Financial resources available

31 December 2017 (£m) 31 December 2016 (£m) Committed facilities 525.0 450.0 Letters of credit issued under corporate banking facilities (152.3) (112.6) Letters of credit issued under additional surety facilities (50.0) (50.0) Other guarantees / commitments (7.5) (6.5) Short term borrowings (176.0) (165.0) Utilisation of facilities (385.8) (334.1) Headroom on committed facilities 139.2 115.9 Cash and bank deposits 14.6 53.1 Unavailable cash (0.7) (0.9) Net available financial resources 153.1 168.1 Total letters of credit issued 202.3 162.6 Cash collateral 133.1 23.7 Future cash investment into projects 335.4 186.3

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Income Statement – re-presented

Revenue Costs

Key line items Year ended 31 December 2017 (£m) Year ended 31 December 2016 (£m)

Movement in fair value – investment portfolio 160.7 214.4 Investment fees from projects 7.1 7.0 Investment Management Services (IMS) revenue 19.0 17.8 Project Management Services (PMS) revenue 6.1 14.9 Bid cost recoveries on financial close 3.7 7.5 Movement in fair value – other (2.1) (3.2) Total Income 194.5 258.4 Third party costs (11.3) (9.8) Staff costs (33.9) (34.1) General overheads (12.7) (11.1) Other and exceptional charges 2.1 (0.7) EBIT 138.7 202.7 Finance charges (10.1) (7.7) Pension and other charges (2.6) (2.9) Profit before tax from continuing operations 126.0 192.1 Earnings per share (basic) 34.7p 51.9p

Other

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£210m Rights Issue summary

Fully Underwritten Rights Issue Terms (1) Rights Issue Timetable ___________________________

• 1. New shares will be entitled to FY17 final base and special dividend. Based on closing share price of 274.2p on 7 March 2018

Net proceeds £210m Rights issue terms 1 for 3 Issue price 177p Theoretical ex-rights price (TERP) 250p Issue discount to TERP 29.2% New shares to be issued 122.3m John Laing results announced 8 March 2018 Rights issue announcement and prospectus published 8 March 2018 Nil-paid trading commences 9 March 2018 Latest date for acceptance and payment 23 March 2018 Announcement of rights issue results 26 March 2018 Ex dividend date 20 April 2018

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Dividends

 John Laing will continue with its existing dividend policy

 Progressive base dividend targeting growth at least in line with inflation  Special dividends of 5-10% of realisations, subject to specific investment requirements

 Rights Issue Shares issued pursuant to the Rights Issue will rank pari passu with the existing shares and

will be eligible for dividends declared and paid following the Rights Issue

 Special dividend calculated as 6.2% of realisations of £289m

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Outlook

From a UK PPP player to an international greenfield infrastructure investor Strong pipeline of future

• pportunities spread over three

regions £580m of projects under construction to generate further value From 2018: Regional organisation with strong oversight from HQ – able to scale up Strong discipline in investment analysis and decision making Confident outlook Guidance for 2018:

• investment commitments of

c.£250m

• realisations at broadly similar

level to investment commitments Potential to increase investment commitments guidance with benefit of rights issue

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Q & A

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Appendices

26 By remaining construction period - Primary

50 100 150 200 250 300 3+ years 2-3 years 1-2 years 0-1 year £million

Total: £580.3m By value of each investment

50 100 150 200 250 300 350 400

£million

Total £1,193.8m By discount rate – Primary * By discount rate – Secondary * *excluding assets not valued on a DCF basis: £3.1m in the Primary portfolio and £28.7m in the Secondary portfolio

Portfolio at 31 December 2017

50 100 150 200 250 300 350 400

6-7% 7-8% 8-9% 9-11%

£million

Total £584.8m* Discount rate

50 100 150 200 250 300 350 400

7-8% 8-9% 9-11% 11-13%

£million

Total £577.2* Discount rate

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7.9% 8.3% 7.5% 7.4% 7.9% 7.9% 8.5% 8.1% 8.2%

Listed PPP Infrastructure Funds Listed Environmental Funds

___________________________

Publicly reported discount rate at:

• 31 December 2017 for JLG’s secondary portfolio
• 30 September 2017 for HICL & JLEN
• 30 June 2017 for BBY, BBGI, INPP, JLIF, UKW & TRIG

Secondary discount rate benchmarks

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Year ended 31 December 2017

Primary Investment £m Secondary Investment £m Asset Management £m Central £m Total £m

Total income 183.6 (18.8) 25.1 4.6 194.5 Third party costs (7.5) (2.7) (1.0) (0.1) (11.3) Staff costs (10.2)

• (13.9)

(9.8) (33.9) General overheads (2.3)

• (4.3)

(6.1) (12.7) Intra-group reallocation1 (17.9) (8.2) 12.9 13.2

• Other and exceptional charges
• 2.1

2.1 Operating profit 145.7 (29.7) 18.8 3.9 138.7 Finance charges (8.4) (2.2)

• 0.5

(10.1) Pension and other charges

• (2.6)

(2.6) Profit before tax 137.3 (31.9) 18.8 1.8 126.0

Divisional contribution – re-presented

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Increasing internationalisation – portfolio values by region

Europe 19% UK 66% Asia Pacific 8% North America 7%

£772m

Europe 25% UK 52% Asia Pacific 13% North America 10%

£841m

Europe 29% UK 44% Asia Pacific 17% North America 10%

£1,176m

Europe 17% UK 35% Asia Pacific 24% North America 24%

£1,194m

___________________________ Note: UK includes the listed investment in JLEN