Presentation For the half year ending 30 June 2017 1 Results - - PowerPoint PPT Presentation

1 Results Presentation August 2017

For the half year ending 30 June 2017

Results Presentation

2 AUGUST 2017

2 Results Presentation August 2017

Chris Weston CEO

3 Results Presentation August 2017

1H17 Operating & Financial Review and Outlook Carole Cran, CFO Market Overview Chris Weston, CEO

Agenda

4 Results Presentation August 2017

 Delivering growth, Argentina aside  Business priorities are repositioning Aggreko, and making it more competitive  Markets mixed, opportunities in each business unit  Changes to the management team

− Stephen Beynon joins as MD of Power Solutions − Search for successor to Carole Cran underway

Changes to the business are delivering results

The first six months

5 Results Presentation August 2017

1H17 Operating & Financial Review

Carole Cran CFO

6 Results Presentation August 2017

Group summary

 Group revenues up 6%,

excluding Argentina

 Exceptional charge of

£10 million relating to completion of the business priorities

 Tax rate of 28%, in line

with prior year

PBT in line with market expectations

Movement £m pre-exceptional items 1H17 1H16 CHANGE CHANGE

excluding pass-through fuel and currency

Revenues 792 685 16% 0% Operating profit 79 82 (3)% (11)% Net interest expense (16) (11) (41)% Profit before tax 63 71 (10)% Taxation (18) (20) 10% Profit after tax 45 51 (10)% Diluted earnings per share 17.88 19.81 (10)% Operating margin 10% 12% (2)pp ROCE (rolling 12 months) 12% 14% (2)pp

7 Results Presentation August 2017

Movement

pre-exceptional items

1H17 1H16 CHANGE CHANGE

excluding currency

Revenue (£m) 319 280 14% 2% Operating profit (£m) 14 11 36% 14% Operating margin 5% 4% ROCE (rolling 12 months) 8% 14% Fleet capital expenditure (£m) 24 36

 Revenue excluding oil & gas up 7%

− Majority of sectors performing well

 Strong growth in temperature control  24 MW of next generation gas contracts won  Seasonal nature of business means majority of

profits are delivered in the second half

Business performance

RENTAL SOLUTIONS

42%

FLEET

at 30 June (MW) 1H17

DIESEL

2,287

GAS UTILISATION

52% 1H16

2,322

51%

REVENUE (% OF GROUP)

8 Results Presentation August 2017

 Eurasia, Middle East & Africa drive growth  Restructured business to improve

performance

− Redeployed fleet − Rationalised depot infrastructure − Reduced capital employed and costs

Business performance

POWER SOLUTIONS INDUSTRIAL

Movement

pre-exceptional items

1H17 1H16 CHANGE CHANGE

excluding currency

Revenue (£m) 167 117 43% 20% Operating profit (£m) 23 10 134% 76% Operating margin 14% 8% ROCE (rolling 12 months) 9% 9% Fleet capital expenditure (£m) 11 23

22%

1H17

DIESEL

2,633

GAS

67% 1H16

2,494

62%

FLEET

at 30 June (MW)

UTILISATION

REVENUE (% OF GROUP)

9 Results Presentation August 2017

 Ex Argentina, revenues and margins grow  Increase in debtor provision of $10 million  430 MW order intake year to date

− 28 MW of next generation gas engines − Initial HFO & solar-diesel contracts signed − KBT adds 200 MW

Business performance

Movement

pre-exceptional items & excluding pass-through fuel

1H17 1H16 CHANGE CHANGE

excluding pass- through fuel and currency

Revenue (£m) 264 264 0% (11)% Operating profit (£m) 44 61 (28)% (33)% Operating margin 17% 23% ROCE rolling 12 months) 16% 16% Fleet capital expenditure (£m) 80 32

POWER SOLUTIONS UTILITY

36%

1H17

DIESEL

4,822

GAS

FLEET

at 30 June (MW) 75% 1H16

4,828

76%

HFO UTILISATION

REVENUE (% OF GROUP)

10 Results Presentation August 2017

Cashflow

 Capital expenditure of £128 million

− 90% of spend on fleet capex

 Dividend maintained  Net debt to EBITDA of 1.3 times

£m 1H17 1H16 EBITDA 230 219 Working capital (38) (101) Cashflows relating to exceptional items (10) (15) Other 2 (3) Operating cash flow 184 100 Tax (33) (22) Net Interest (17) (11) Acquisitions (28)

• Purchase of fixed assets

(128) (98) Other fixed asset movements 4 14 Free Cash Flow (18) (17) Dividends (45) (45) Changes in Equity

• (8)

Net Cash Flow (63) (70) Exchange 29 (75) Movement in Net Debt (34) (145) Net Debt (683) (634)

11 Results Presentation August 2017

Working capital

Payables

 £65 million net inflow

− Consolidation of supply chain allows improvements in supplier terms

Inventory

 Analysis phase complete; plan in place and underway

Receivables

 Continues to be a challenge

− Utility provision increases $10 million − One of the main pillars of the improvement project − Reviewing processes, reducing time to invoice & improving

customer interactions

Improvement programme underway

12 Results Presentation August 2017

Outlook

 Guidance for profit before tax unchanged

− Third quarter is important

 Loss making nature of Younicos offset by KBT acquisition and slower off-hires

in Argentina

 Guidance implies growth across the business, excluding the impact of Argentina

Full year guidance unchanged

13 Results Presentation August 2017

Market Overview

Chris Weston CEO

14 Results Presentation August 2017

Rental Solutions

 Markets largely favourable  North American oil & gas

improved on Q4 2016

 Temperature control growing

well, bolt-on acquisitions increase capabilities

OBJECTIVE:

Improve the customer journey

 Increase sector expertise  Implement new systems

and applications

 Enhance our digital

platform

PROGRESS:

 New website  CRM rolling out across

geographies

 Operations system to

improve productivity and utilisation

14 Results Presentation August 2017

15 Results Presentation August 2017

Power Solutions Utility

 Emerging economies expected to

grow at 4.5% in 2017

 Power deficits persist and are

growing in many areas

− Prospect pipeline remains

healthy

 Strategy and actions will maintain

market leading position

15 Results Presentation August 2017

OBJECTIVE:

Reduce the total cost

• f energy

 Improve fuel efficiency

• f existing fleet

 Add new products to

the mix

 Enhance sales capability

PROGRESS:

 HFO, new gas and

solar/diesel contracts won

 Further upgrade to

diesel engine in scope

 Training & recruiting in

sales

16 Results Presentation August 2017

 Growing ahead of GDP  Middle East – largest part of the

Industrial business

− Strategies delivering growth

in a competitive region

 Eurasia – opportunities strong in

Russian Oil & Gas

− Our solutions preserve

balance sheets and perform well in challenging environments

− Revenues increased 71%

16 Results Presentation August 2017

OBJECTIVE:

Understand customer needs

 Increase sales presence  Restructure the

business

− Refine depot

infrastructure

− Remove cost

PROGRESS:

 Optimised footprint  Right sized infrastructure

and headcount

 Redeployed equipment  Focus on profitable work

Power Solutions Industrial

17 Results Presentation August 2017

Long term market trends

Global energy markets are changing

18 Results Presentation August 2017

The business priorities are repositioning Aggreko and improving competitiveness We continue to target returns in the medium term of around 20% Evolving energy markets provide exciting opportunities both now and in the future

Conclusion

18 Results Presentation August 2017

19 Results Presentation August 2017

Appendix

20 Results Presentation August 2017

Capital allocation discipline maintained

1H17 1H16

DIESEL

4,822 4,828 POWER SOLUTIONS (UTILITY) FLEET

at 30 June (MW)

GAS HFO

1H17 1H16 2,633 2,494

DIESEL GAS

POWER SOLUTIONS (INDUSTRIAL) FLEET

at 30 June (MW)

1H17 1H16 2,287 2,322

DIESEL GAS

RENTAL SOLUTIONS FLEET

at 30 June (MW) Power Solutions Industrial Power Solutions Utility Rental Solutions 1H17 1H16 1H17 1H16 1H17 1H16 Average utilisation 67% 62% 75% 76% 52% 51% Fleet Capex / Fleet Depreciation 33% 83% 124% 55% 57% 90% Fleet Capex £11m £23m £80m £32m £24m £36m

20 Results Presentation August 2017

21 Results Presentation August 2017

Business performance

39 39%

OIL & GAS

Revenue by sector 1H 2017

11 11%

MANUFACTURING

10 10%

CONSTRUCTION

7%

QUARRYING & MINING

7%

SERVICES

6%

EVENTS

6%

UTILITIES

4%

CONTRACTING

10 10%

OTHER

POWER SOLUTIONS INDUSTRIAL POWER SOLUTIONS UTILITY

82 82%

UTILITIES

7%

OIL & GAS

7%

QUARRYING & MINING

4%

OTHER

18 18%

PETROCHEMICAL & REFINING

11 11%

UTILITIES

10 10%

OIL & GAS

10 10%

EVENTS

8%

MANUFACTURING

8%

CONTRACTING

8%

SERVICES

7%

CONSTRUCTION

20 20%

OTHER

RENTAL SOLUTIONS

22 Results Presentation August 2017

FX impact on 2017 at July average rates

Note: UAE Dirhams included within US Dollar as it is pegged to the US dollar; Argentinian Peso includes Power Solutions Utility contracts which are pegged to the US Dollar but paid and reported in Argentinian Pesos.

FX RATES REVENUE (£m)

FY16 Average July 2017 FYF Average FY16 Average 2016 Restated at July 2017 FYF Average Rates Variance % Variance US Dollar 1.36 1.28 789 834 45 6% Euro 1.22 1.14 166 177 11 7% Australian Dollar 1.83 1.66 68 75 7 10% Argentinian Peso 20.00 21.31 130 122 (8) (6)% Brazilian Real 4.74 4.07 111 129 18 16% Canadian Dollar 1.80 1.66 24 26 2 8% Russian Rouble 91.04 75.38 39 47 8 21% Other 188 196 8 4% Total Revenue 1,515 1,606 91 6% Total Operating Profit 248 257 9 4%

23 Results Presentation August 2017

Disclaimer

The information contained in this presentation has largely been extracted from the Results Announcement for the six months ended 30 June 2017. This presentation may contain certain “forward-looking” statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Actual outcomes and results may differ materially from any outcomes or results expressed or implied by such forward-looking statements. Any forward-looking statements made by or on behalf of Aggreko speak only as of the date they are made and no representation or warranty is given in relation to them, including as to their completeness or accuracy or the basis

• n which they were prepared.

This presentation is published solely for information purposes. The distribution of this presentation in jurisdictions other than the UK may be restricted by law and therefore any persons who are subject to the laws of any jurisdiction other than the UK should inform themselves about, and

• bserve, any applicable requirements.

All opinions expressed in this presentation are subject to change without notice and may differ from opinions expressed elsewhere.