Mitie Group Plc · LSE:MTO
Mitie — Investor Day (December 2019)
170 slides from Mitie's investor day presentation, Dec 10, 2019
Slide 1: Capital Markets Day
Capital Markets Day Delivering ‘Accelerated Value Creation’ in a changing FM Industry Introduction & Industry overview Phil Bentley, CEO, 10 December 2019 1
Slide 2: Disclaimer
Disclaimer This presentation may contain certain forward-looking statements, beliefs or opinions, including statements with respect to Mitie business, financial condition and results of operations. These forward-looking statements can be identified by the use of words such as ’anticipate’, ’expect’,
Slide 3: Six key macro trends in today's Facilities Management Industry
Industry overview CEO introduction Six key macro trends in today’s Facilities Management Industry Corporate real estate As clients focus on their Outsourced FM market, £bn 90 15% UK office availability rates occupancy continues 10% core, outsourced FM 80 to grow 5% ‘indirect’ spend is growing 70 201
Slide 4: What do we do well?
Industry overview CEO introduction What do we do well? • An unrivalled list of customers who increasingly value what we do… Customer 4
Slide 5: What do we do well?
Industry overview CEO introduction What do we do well? • An unrivalled list of customers who increasingly value what we do… • … and 50,000 people who are now better trained, motivated and incentivised Customer People 5
Slide 6: What do we do well?
Industry overview CEO introduction What do we do well? Engineering providers by size and margin • An unrivalled list of customers who 10 R2 = 0.75 increasingly value what we do… 8 EBIT Margin (%) Largest in the UK 6 • … and 50,000 people who are and growing 4 now better trained, motivated 2 Previous
Slide 7: What do we do well?
Industry overview CEO introduction What do we do well? • An unrivalled list of customers who increasingly value what we do… • … and 50,000 people who are now better trained, motivated and incentivised • With leadership scale and lowest costs in our two largest divisions… • … underpinned by a growing
Slide 8: Mitie's positioning is aligned to customer requirements
Industry overview CEO introduction Mitie’s positioning is aligned to customer requirements 100% Factors most important when choosing FM vendors Customers expect: (response rate) 2018 2019 • Technical competence, 80% skills and experience +2% +5% +4% • Providers to be innovative 60% and technically a
Slide 9: Phase II is now focused on Accelerated Value Creation
Industry overview CEO introduction With Phase I of Transformation complete, Phase II is now focused on “Accelerated Value Creation” FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22 Phase 1: Build Foundations Phase 11: Accelerated Value Creation • Reversed revenue declines • Market leadership and SAM gro
Slide 10: A clear Investor Proposition to deliver Accelerated Value Creation
Industry overview CEO introduction We have a clear Investor Preposition to deliver Accelerated Value Creation GROWTH COSTS • Strategic Accounts have higher growth potential • Technology to control workforce and • Leadership in our core Technical Services and workflow → lowest cost to serve Business
Slide 11: Today's agenda: moving to Accelerated Value Creation
Industry overview CEO introduction Today’s agenda: moving to Accelerated Value Creation Time Section Time Section 08:45 – 09:15 Building a higher quality Paul Woolf, 11:50 – 12:45 Capability business Group CFO Development 09:15 – 10:15 Breakout session 1 “The Mitie Way” of David Cooper, Technical Se
Slide 12: Building a higher quality business
MITIE: DELIVERING THE EXCEPTIONAL, EVERY DAY Building a higher quality business Paul Woolf, CFO 10 December 2019 12
Slide 13: We have fixed a lot, making Mitie a stronger business
Overview CFO introduction We have fixed a lot, making Mitie a stronger business, better positioned to deliver for shareholders We needed to do a lot of fixing Which has consumed c.£195m of cash Now better positioned to deliver for shareholders • Customers, people, cost and • ~£55m one-off cash costs
Slide 14: Helix programme delivered £45m of run-rate savings
Overview CFO introduction Helix programme delivered £45m of run-rate savings and standardised and simplified group platforms Run-rate cost savings of £45m Supplier spend consolidated and tendered 1/3rd property footprint Transactional processing closed centralised and off-shored Immediate re
Slide 15: Reinvesting to fix historic underinvestment and drive growth
Overview CFO introduction … allowing us to reinvest to fix historic underinvestment and to drive medium and longer-term growth Areas of investment Outcomes • Strategic Account Management (SAM) Commercial programme and incentives capability • Salesforce database; bid library • Dedicated government op
Slide 16: Reinvestment has held back operating profit growth
Overview CFO introduction … but reinvestment has held back operating profit1 growth since start of transformation • Helix benefits have been reinvested Operating profit growth over 2.5 years into customers and capability • Investments have fixed historic Zero net impact 120 underinvestment and built
Slide 17: We have seen the benefits of transformation in our top line
Overview CFO introduction We have seen the benefits of transformation in our top line … with strategic accounts leading the way: • Single point of customer contact and strategic Previous trend Phase 1 Phase 2 management -1% +5% organic c.2-4% revenue CAGR1,4 revenue CAGR1,2 • Account-wide incentive
Slide 18: Path to the medium-term group margin target
Overview CFO introduction And we can see our way to the medium-term group margin target Medium-term group margin target of 4.5% - 5.5% 5.5% 5.5% Margin uplift components Project Forte 40bps - 70bps 5.0% SAM optimisation 5bps - 15bps 4.5% 4.5% Procurement 15bps - 30bps Technology penetration 5bps - 1
Slide 19: Margin improvement case study: Procurement
Overview CFO introduction Margin improvement case study: Procurement Example 1: Example 2: Electrical Wholesale Agency Labour Fewer, more capable suppliers % of spend covered by MFA1 90% 8 2 137 1 Specification and standardisation 80% Range of brands Varied control & compliance 70% Defined contracte
Slide 20: Free cash flow held back by restructuring
Overview CFO introduction Free cash flow has also been held back by restructuring over the last 2.5 years CASH GENERATION OVER 2.5 YEARS Looking forward Underlying Free Cash Flow ~£120m Negative headwinds are reducing… M&A proceeds net of cash disposed ~105 • Balance sheet is now stronger with signi
Slide 21: Our balance sheet is now stronger
Overview CFO introduction Our balance sheet is now stronger with plans to further reduce TFO1 Total Financial Obligations TFO / EBITDA TARGET £138m H1 19/20 3.1x decrease Free cash flow generation (0.8)x Dividends 0.2x EBITDA growth (0.5)x FY 21/22 target 2.0x • Improvement in TFO driven by reductio
Slide 22: Improved control environment will allow us to generate more cash
Overview CFO introduction Our improved control environment will allow us to generate more cash in future Bidding • Bid committee Improving our • Minimum financial hurdles processes and culture controls • Monthly account reviews • Bidding the right terms upfront • Improve timeliness of Balance • Blac
Slide 23: Next phase of transformation will see more upsides flowing through
Overview CFO introduction Next phase of transformation will see more upsides flowing through Looking back Looking forward • Savings and proceeds of growth ploughed back • Limited further P&L investments required to reset into P&L to establish a sustainable platform business, so more of upside should
Slide 24: Deep dive into our business: breakout sessions
MITIE: DELIVERING THE EXCEPTIONAL, EVERY DAY Deep dive into our business: breakout sessions 9:15 and 10:30 Presenters Carlo Alloni, MD, Technical Services Jason Towse, MD, Business Services 24
Slide 25: Split into streams
MITIE: DELIVERING THE EXCEPTIONAL, EVERY DAY Split into 2 streams Blue: Technical Services, Marketing Area Red: Business Services, G&G Area 10 December 2019 25
Slide 26: Technical Services: Roadmap for growth
MITIE: DELIVERING THE EXCEPTIONAL, EVERY DAY Breakout session 1: Technical Services: Roadmap for growth Carlo Alloni, MD, Technical Services 10 December 2019 26 26
Slide 27: Agenda
Technical Services Agenda Agenda Technical Services journey Next phase of transformation • Project Forte • Technology-led solutions • Increase share of wallet by focusing on TCO1 Case study 1 Total Cost of Ownership 27
Slide 28: Mitie Technical Services incorporates a range of key activities
Technical Services Overview Mitie Technical Services incorporates a range of key activities Maintenance & Repair Integrated Facilities Management Mechanical, Electrical and Strategic Account Management Building Fabric, Complex, Integrated, Service Ranges Deep Self-Delivery, Self-Delivery Teams, Plan
Slide 29: Two years ago we set a new strategy for Technical Services
Technical Services Overview Two years ago we set a new strategy: to transform Technical Services into a frictionless, insight-driven, customer & people-focused business Priorities Status Focus proactively on key sectors and strengths Gathered ‘Why Mitie’ insights from key stakeholders to refine valu
Slide 30: We built a best in class team
Technical Services Overview We built a best in class team Stable and experienced leadership team Carlo Kathleen Beverly Andrew Kerry Gordon Lee Daniel Martin Andrew Angela Antony Alloni Fontana Winrow Thompson Sheehan White Parker Guest Nilsson Smart Gallagher Collett “I am the “I am “I am “I lead a
Slide 31: We have been making steady progress
Technical Services Overview We have been making steady progress £1000m Revenue Operating profit £60m £950m £50m £900m £40m 16/17* 17/18 18/19 LTM 16/17* 17/18 18/19 LTM Excluding International, CAGR is 2% with 5.7% growth in strategic accounts Billed Debt Aging £75m Unbilled Debt Aging £30m <30 days
Slide 32: Our operational metrics are also improving
Technical Services Overview Our operational metrics are also improving in line with our plan Accelerate Operational Efficiencies Rolled out 100% engineer Build Technology-Based and PDA use & training Differentiated Value Proposition • 2% increase in productivity YoY vs FY 18/19 • We capture 4.3 bill
Slide 33: Clients are starting to recognise the positive outcomes
Technical Services Overview And clients are starting to recognise the positive outcomes of our journey Headlines • Retention of key client business with Lloyds Banking Group, Essex County Council and Co-op • Strong entry into the Pharmaceutical sector with GSK • Significant new business secured with
Slide 34: For every £1 of fixed work we deliver £1.30 of variable work
Technical Services Overview For every £1 of fixed work we now deliver £1.30 of variable work, this is a 17% increase YoY Engineering Projects division created delivering c.£175m in revenue and healthy margins 2,700 skilled engineers 202,000 lights changed The top 6 projects saved 35m KWh 300,000m2 r
Slide 35: The pipeline is strong and we are uniquely positioned to win
Technical Services Overview The pipeline is strong and we are uniquely positioned to win Headlines • Strong pipeline of £4.1bn • Biggest national mobile engineer workforce • Underpinned by the best technology in the market and process re-engineering (project Forte) • Only true e-2-e Technical Servic
Slide 36: Strong foundation, ready to accelerate value creation
Technical Services Overview We have built a strong foundation and now we are ready to accelerate value creation Mitie 1.0 Mitie 2.0 Achievements over the Next phase of Technical Services last two years transformation • Mapped and redesigned operational • Deliver FORTE processes • Accelerate Energy/P
Slide 37: Three strategic pillars to reach our ambition
Technical Services Overview We will reach our ambition through the delivery of three strategic pillars 1 2 3 Improving efficiency of Building a technology-led Targeting growth through a operating processes offering to bring proactive focus on through Project Forte data and analytics to our core TCO1
Slide 38: Technical Services initiatives will deliver operating margin improvement
Technical Services Overview Technical Services initiatives will deliver significant operating margin improvement by FY 22/23 Technical Services initiatives Medium-term group margin target of 4.5% - 5.5% • Project Forte targeting net c.£10-15m Margin uplift components profit generation through increa
Slide 39: Three strategic pillars to reach our ambition
Technical Services Project Forte We will reach our ambition through the delivery of three strategic pillars 1 2 3 Improving efficiency of Building a technology-led Targeting growth through operating processes offering to bring data and a proactive focus on TCO1 through Project Forte analytics to our
Slide 40: Project Forte will transform Technical Services
Technical Services Project Forte PROJECT FORTE will transform Technical Services by re-engineering the workflow processes Our Vision To make our Technical Services predictable, trackable, frictionless, user-friendly and technology-led. Our Mission To standardise, simplify and automate the Technical
Slide 41: Project Forte has concrete deliverables
Technical Services Project Forte It has 6 concrete deliverables Design, develop & deploy a common set of processes supported by Data & Technology. Adopt a single way of working across all geographic areas and contracts which allows the overlay of new Maximo CORE technology and systems. Remove the cu
Slide 42: Strengthening our Maximo CORE and its interfaces
Technical Services Project Forte Strengthening our Maximo CORE and its interfaces enables the best in class triage and e2e case management Maximo 7.5 to 7.6 & AI • Deploying best in class IBM Maximo 7.6 as our core operating platform • Leveraging cloud technology for increased performance, resilienc
Slide 43: Reshaping service desks to unlock AI-based planning
Technical Services Project Forte Reshaping our services desks with the right process and systems will unlock AI-based planning Click scheduler & automation • Utilising Click to provide intelligent, AI-driven scheduling and decision-making • Scheduling automation and optimisation will reduce our depe
Slide 44: Complete control of the supply chain
Technical Services Project Forte …and gives us complete control of the supply chain Supply Chain Management • A dynamic, responsive and integrated supply chain management system • Enhanced governance of our external spend by tracking rates, hours assigned vs. actuals and bills • Leveraging leading t
Slide 45: Putting insights into action via relevant MI and data
Technical Services Project Forte Putting insights into action via relevant MI and quality, cleansed data Transforming our data • Undertaking a business-wide data cleanse to Ensuring our core systems communicate ensure the data we hold are fit for purpose and ready and offer resilient performance for
Slide 46: Fully automated digital billing process
Technical Services Project Forte …enabling a fully automated digital billing process Maximo Billing and Oracle to SAP • Using Maximo as our single source of truth; to provide a centralised system from which customer bills are automatically calculated and submitted • Deliver significant reduction in
Slide 47: Forte will be delivered by Dec 2020
Technical Services Project Forte Forte will be delivered by Dec 2020 Go live Nov 2019 Dec 2020 Maximo 7.6 design, build Maximo CORE Technical Readiness implemented Maximo Maximo / SAP Interface design, build, test to SAP Oracle Process work completed to SAP (Accounting) SAP design, build, test Cloud
Slide 48: Monitoring the actions in detail, with strong governance
Technical Services Project Forte …and we will be monitoring the actions in detail, with strong governance APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN 2019 2019 2019 2019 2019 2019 2019 2019 2019 2020 2020 2020 2020 2020 2020 2020 2020 2
Slide 49: Tracking according to plan
Technical Services Project Forte …we are tracking according to plan In the first six months of the project we have: Scale of Project Forte: • Completed discovery and scoping exercises across • 700m data fields to be cleansed and reviewed to populate workstreams our new systems • Built and validated
Slide 50: Gross benefits of £25m through Project Forte
Technical Services Project Forte We anticipate overall gross benefits of £25m delivered through Project Forte £M 26 24 £2m 22 £3m 20 18 16 £7m 14 12 £25m £4m 10 £9m 8 6 Engineers 4 2 Management 0 Engineering Consolidation of Supply chain savings Fully comprehensive Streamlined Total pool savings pro
Slide 51: Defined measurable operational improvements
Technical Services Project Forte And enabled by defined measurable operational improvements 85% 6% 85% 100% 72 11% 71% 115% First time % of engineer time Utilisation Work time fix spent travelling vs. (April FY19) (April FY19) estimated time per job 10:1 1:18 7.5:1 1:10 Internal target Legend Actual
Slide 52: Three strategic pillars to reach our ambition
Technical Services Technology We will reach our ambition through the delivery of three strategic pillars 1 2 3 Improving efficiency of Building a technology-led Targeting growth through operating processes offering to bring data and a proactive focus on TCO through Project Forte analytics to our cor
Slide 53: Building a technology-led offering
Technical Services Technology We are building a technology-led offering to bring data and analytics to our core Improved outcomes for customers from technology-backed solutions Technical Services ARIA Service Operations MOZAIC Centre 3D asset Capture Connected Engineers Data-driven insights put into
Slide 54: Aria Video
Aria Video 54
Slide 55: A frictionless interface for our customers using AI
Technical Services Technology A frictionless interface for our customers using the latest artificial intelligence to support it • Single mobile App to interact seamlessly with all aspects of the Reques t workspace • Enables bi-directional communication to raise requests and send feedback as The Stre
Slide 56: Building Visual Asset detail to enable SOC
Technical Services Technology Building Visual Asset detail to enable SOC1 to support our engineer and the engineer to have details when needed • Mitie is maintaining over 5 million assets • The ability to remotely visualise these assets in their locations with all the maintenance history and live pe
Slide 57: SOC Video
mitie SOC Video
Slide 58: The SOC at the heart of our operation
Technical Services Technology The SOC1 at the heart of our operation supporting the field and remotely monitoring performance • All equipment alarms will be automated • We will be able to offer first level triage • Real-time monitoring and update the job ticket • Configurable rules engine • First ti
Slide 59: From reactive repair: 20+ hours
Technical Services Project Forte From reactive repair: 20 + hours Timeline from problem to resolution 59
Slide 60: To predictive repair: less than 11 hours
Technical Services Project Forte To predictive repair: Less than 11 hours Timeline from problem to resolution 60
Slide 61: Connected Engineer Video
hed Ale rey, Connected Engineer Video
Slide 62: Mozaic: transparency and insight for customers
Technical Services Technology Mozaic: we offer transparency for our customers and insight enabling key decisions to be made • Single interface to visualise all important aspects of our clients’ workspace • Intuitive and dynamic visualisation to quickly identify what matters to our clients • Ability
Slide 63: Mozaic Video
Mozaic Video 63
Slide 64: Harnessing rich data to drive client insights
Technical Services Technology Harnessing rich data to drive client insights Performance Analytics Unlocking Opportunity Trend Monitoring Informed Decision-Making 64
Slide 65: Financial Performance dashboard
Financial Performance Select Date Portfolio Business Unit 01/12/2019 22:25:40 01/12/2019 31/12/2019 All Vv All Daily Weekly & Monthly 1/4, 1/2 Yearly & Yearly Total Value v Closed £0.00 £9,355.88 £33,026.39 £649,832.80 Days before PPM SLA Breach - Jeopardy Management 15 to 21 days £10,058.07 8 to 14
Slide 66: Account level filters allowing quick access to key data points
Account level filters allowing quick access to key data points
Slide 67: Level 2 filters highlight ownership and responsibility
Level 2 filters highlight ownership and responsibility for performance across account
Slide 68: In month financial risk by frequency of task
In month financial risk highlighted and categorised by frequency of task
Slide 69: In month financial risk by type of task
In month financial risk highlighted and categorised by type of task
Slide 70: Jeopardy Management shows value of tasks at risk
Jeopardy Management allows teams to understand value of tasks at risk
Slide 71: Location tracking of properties and work at risk
Location tracking enables understanding of properties and amount of work at risk
Slide 72: Property by size of financial risk
Property by size of financial risk enables prioritisation of engineer resource.
Slide 73: Drill-through to the underlying data
Drill-through to the underlying data at any point on the page to access details of tasks at risk.
Slide 74: Outstanding tasks ordered by value and priority
Outstanding tasks ordered by value, priority, due date enabling teams to prioritise workload. All exportable to xls for offline working
Slide 75: Three strategic pillars to reach our ambition
Technical Services TCO We will reach our ambition through the delivery of three strategic pillars 1 2 3 Improving efficiency of Building a technology-led Targeting growth through operating processes offering to bring a proactive focus on TCO1 through Project Forte data and analytics to our core valu
Slide 76: Data into Action
Technical Services TCO Understanding the total building’s costs and owning the maintenance activities enables opportunity in projects, energy, sustainability and to further deepen our partnerships 3D Asset Data Capture Analytics Continuous Utility Monitoring Costs Remote Sustainability Monitoring Pr
Slide 77: Delivering exemplary projects: Tottenham Hotspur stadium
Technical Services Projects Delivering exemplary projects across the technical arena The new Tottenham Hotspur stadium is an iconic, Key Facts world-class, sports and entertainment destination that opened in 2019 following a four-year project. 1,600 lights installed Mitie provided a full self-delive
Slide 78: Vodafone: MTX and Data Centre Chiller Replacement Rollout
Technical Services Projects Vodafone: MTX and Data Centre Chiller Replacement Rollout • Mitie were engaged by Vodafone to reduce their energy Key Facts consumption and carbon footprint across their portfolio of buildings which included design, supply & install new • Feasibility studies replacement c
Slide 79: Expert real estate advice to Essex County Council
Technical Services Projects Providing expert real estate advice to Essex County Council The challenge: Key Facts To assist Essex County Council to commercialise a dated, under-used • Major Mitie client property portfolio over the next 10 years. This meant looking beyond the conventional current-stat
Slide 80: Supporting customers to optimise properties and save energy
Technical Services TCO A key component of the TCO is how we can support our customers to optimise their properties and save energy Energy as a service Plan Zero as a service Optimised Buildings Standalone solutions Procurement + Monitoring + Management Strategy + Reporting + Management Strategy + In
Slide 81: Our Energy business has a substantial track record
Technical Services Energy Our Energy business has a substantial track record in delivery £14m 200 3,000+ Total energy 140,000 Experts including chartered management savings Energy surveys Meters managed energy managers, engineers Over 12 months via utilities and analysts completed p/a optimisation a
Slide 82: Recognition and ISO accreditations
Technical Services Energy With recognition in both the innovative approach and the technical delivery, backed by ISO accreditations 82
Slide 83: Total Building Reviews bring all propositions together
Technical Services TBR Total Building Reviews (TBRs) bring all the propositions together TBR Background Mitie approach to TBR TBR delivers: Facility in Derby is over 15 years old. It is a critical facility. Customer Property When performing a Total Building Review there are a Strategy 2030 number of
Slide 84: Case study
MITIE: DELIVERING THE EXCEPTIONAL, EVERY DAY Case study Dan Guest, Technical Services Business Performance and Transformation 10 December 2019 84
Slide 85: Rolls-Royce – A need for Change
Technical Services Case study Rolls-Royce – “A need for Change” Rolls-Royce Group Property Integrated Facilities Management • Global in-house delivery team with circa • The Rolls-Royce contract is one of Mitie’s largest 80-100 employees accounts • Portfolio consists of 1,105 buildings across 354 • I
Slide 86: Rolls-Royce 2018, the year of change
Technical Services Case study Rolls-Royce 2018, the year of change Launched a unitary management Performance metrics designed way of working. Journey to Zero Harm in partnership with key Introduced an incentive scheme, stakeholders. designed to impact front-line Objectives aligned to Rolls- team mem
Slide 87: Rolls-Royce 2018, the year of change
Technical Services Case study Rolls-Royce 2018, the year of change Drive the five KPIs Journey to Zero Disruption Basic Customer Energy Zero Harm to Production Delivery First & Waste Result TRIs Small Works Fix & Response Annual Survey £1.9m 50% reduction from 85% - 100% 75% - 98% 65% - 75% savings
Slide 88: Rolls-Royce – What's next?
Technical Services Case study Rolls-Royce – What’s next? Technology Employee experience Sustainability Sensor Technology Concierge Services Increasing our Removal of single DSM capabilities use plastic by 2020 Introduction of AI Live well Enhancing our Connected Workspace capabilities to drive the r
Slide 89: Rolls-Royce: from reactive to predictive maintenance
Technical Services Case study Rolls-Royce: from reactive to predictive maintenance 180 Environmental sensors monitoring 14,000 m2 of space 450 Asset sensors monitoring 250 assets 70,000,000 Data points per month • Using the existing BMS supplemented with IOT environmental and asset sensors along wit
Slide 90: Rolls-Royce Renewable Heat Generation Projects
Technical Services Case study Rolls-Royce Projects – Renewable Heat Generation Projects This project was highly innovative and one of the first Summary to combine a number of energy technologies into a • An innovative renewable heat system serving a major industrial site; busy mixed-use industrial s
Slide 91: Business Services: Continued Growth
MITIE: DELIVERING THE EXCEPTIONAL, EVERY DAY Breakout session 2: Business Services: Continued Growth Jason Towse, MD, Business Services 10 December 2019 91
Slide 92: Agenda
Business Services Agenda Agenda Overview of Security strategy Future vision of Security Business Services and growth • Integrating Cleaning • Last 3 years’ performance • 6 key pillars for success • Market analysis against strategy • Clear differentiation • Financial performance • New technologies an
Slide 93: How we look at our business
Business Services Overview How we look at our business Business Services Security Cleaning Services Office Services 21,000 personnel 22,000 Employees 20m sq. ft. 35,000 retail space Systems cleaned every Document maintained day Vetting Front of House Management 93
Slide 94: Integrating Security and Cleaning
Business Services Overview Integrating Security and Cleaning to develop a combined business leveraging back-office efficiencies and cross-sell opportunities Responding to customer Restructured Security, and market demands for Cleaning and Office a more integrated Services under a single approach. le
Slide 95: Strong in Security, Cleaning strategically important
Business Services Cleaning We are strong in Security, while Cleaning is strategically important to strengthen Mitie’s “right to play” in IFM Mitie strengths Industry trends and insights • The largest Security player in the UK security • Security accounts for ~7% of all outsourced FM market with ~15%
Slide 96: Cleaning refocused through four strategic pillars
Business Services Cleaning Cleaning will be “refocused” through four strategic pillars to drive cost out and improve customer experience 1 2 3 4 Drastically Go to market Cross selling Changing the improving approach to approach margin mix cost-to-serve target strategic accounts Realising efficiencie
Slide 97: Security Overview Video
hed Ale rey, Security Overview Video
Slide 98: Security business provides industry-leading solutions
Business Services Security The Security business provides industry-leading solutions to its customers Intelligence Technology People GSOC & INTELLIGENCE PROPRIETARY SOFTWARE & MOBILE/VOIDS SERVICES TECHNOLOGY ENABLERS Largest mobile security business in Providing 24/7 intelligence on threats In hous
Slide 99: Sector leading end-to-end security solutions provider
Business Services Security Sector leading end-to-end security solutions provider Mobile Client Fire & Risk & Proactive Tailored Lone Alarm Manned Security Void Security Front of Security Assurance Intelligence Retail Worker Receiving Vetting Guarding & Key Property Operations House Systems Systems S
Slide 100: The security market is growing steadily
Business Services Security The security market is growing steadily Security market size by service excl. cash-in-transit and custodial services (£bn, 2013-22F) Electronic security Fire safety Manned guarding Source: Mintel Security report 2018. 100
Slide 101: Security Market Assessment
Business Services Security Security Market Assessment Revenue of top 8 players in Security market (£bn, % of addressable market, 2.50 excluding cash-in-transit and custodial service, 2015-18) 2.1 2.0 2.0 2.1 2.00 ISS 1.4% Interserve 2.2% 1.6% 2.0% 1.7% 1.6% OCS 3.3%** 3.2% 3.3% Chubb 5.2% 4.9% 4.6%
Slide 102: Strong revenue growth over the last three years
Business Services Security And is demonstrated by our strong revenue growth over the last three years Security, Document Management, Technology Services Front of House and Vetting Revenue, £m Revenue, £m 600 60 £m 400 40 200 20 0 0 13/14 14/15 15/16 16/17 17/18 18/19 13/14 14/15 15/16 16/17 17/18 18
Slide 103: Clear strategic focus for the last three years
Business Services Security Security has had a very clear strategic focus for the last three years to deliver this market-leading growth Risk-based Defined deployment Driving a reason proposition model toto targetand Strategies Market-leading expanded change use for high end technologies of analytics
Slide 104: Clear strategic focus for the last three years
Business Services Security Security has had a very clear strategic focus for the last three years to deliver this market-leading growth Risk-based deployment model and Strategies Relentless focus Driving Defined Market-leading expanded change a reason proposition use for high end & toto building tar
Slide 105: Clear strategic focus for the last three years
Business Services Security Security has had a very clear strategic focus for the last three years to deliver this market-leading growth Risk-based Defined deployment Driving a reason proposition model toto targetand Strategies Market-leading expanded change use for high end technologies of analytics
Slide 106: Relentless focus and building scale in targeted sectors
Business Services Security Relentless focus and building scale in specific targeted sectors Number 1 in Number 1 in Retail & Number 1 in Transport Number 1 in Critical Corporate and Iconic Public Sector fastest Logistics & Aviation Secure Environments Buildings growing sector 106
Slide 107: Clear strategic focus for the last three years
Business Services Security Security has had a very clear strategic focus for the last three years to deliver this market-leading growth Risk-based Defined deployment Driving a reason proposition model toto targetand Strategies Market-leading expanded change use for high end technologies of analytics
Slide 108: Clear strategic focus for the last three years
Business Services Security Security has had a very clear strategic focus for the last three years to deliver this market-leading growth Risk-based deployment Driving a reasonmodel to and Strategies Market-leading expanded technologies usecustomers change for of analytics Strategies Defined propositi
Slide 109: Clear strategic focus for the last three years
Business Services Security Security has had a very clear strategic focus for the last three years to deliver this market-leading growth Risk-based deployment Driving a reasonmodel to and Strategies expanded usecustomers change for of analytics Strategies Defined proposition to target Introduction We
Slide 110: Clear strategic focus for the last three years
Business Services Security Security has had a very clear strategic focus for the last three years to deliver this market-leading growth Driving a reason to change for customers Strategies We provide the latest training to our people to Defined proposition to target mitigate risk for our clients and
Slide 111: Revenue and gross profit mix FY 13/14
Business Services Security By investing in high growth security segments of technology and Fire & Security Systems we are moving towards higher margin segments Technology Manned Technology Manned Services guarding Services guarding 10% 90% 13% 87% Revenue Gross profit FY 13/14 111
Slide 112: Revenue and gross profit mix FY 18/19
Business Services Security By investing in high growth security segments of technology and Fire & Security Systems we are moving towards higher margin segments Technology Manned Technology Manned Services guarding Services guarding 16% 84% 27% 73% Revenue Gross profit FY 18/19 112
Slide 113: Strong YoY growth for Fire & Security systems
Business Services Security And this is reflected in strong YoY growth for Fire & Security systems over the last four years Current Position Growth Drivers YoY growth (past, present and future) 60 • Top 6 ranked provider in the • Leveraging of wider Mitie Revenue UK with number 1 status for Security
Slide 114: Mitie has developed new services across technology
Business Services Security Mitie has developed new services across technology and the broader business Smart/ Merlin • Evolution of our technological capabilities and proposition • Growth of existing security customers through adoption in technology The UK’s leading • Increased “Share of Wallet” and
Slide 115: Attracting and retaining the best people
Business Services Security By attracting and retaining the best people we have made Security a stronger business Stable and experienced leadership team Jason Towse Kevin Tyrrell Annabel Nash Darren Andrews Gary Culloden Stuart Bleazard Sarah Smith Chris Watts James Gilding Mike Clancy Managing Direc
Slide 116: Our future vision
Business Services Security Our future vision 116
Slide 117: Strategy going forward based on six key pillars
Business Services Security Our strategy going forward is based on six key pillars 1 2 3 4 5 6 Continuing Growing Embedding new Leveraging Targeting Pursuing scope historically technology- capabilities post sector-based cross-selling acquisitions to strong organic enabled sales acquisitions expertise
Slide 118: Continuing historically strong organic growth
Business Services Security 1. Continuing historically strong organic growth will enable us to maintain our position as the leading UK technology and intelligence led security business 1 1 in 3 bid win rate vs the industry average of 1 in 5 Continuing historically Win rate increases to 1 in 2 in spec
Slide 119: Technology enabled sales will win and retain clients
Business Services Security 2. Technology enabled sales will enable us to win and retain clients Core services Emerging technologies Future state 2 Growing technology- enabled sales Video Surveillance Analytics Fire Protection Artificial Intelligence Remote Monitoring Biometrics 119
Slide 120: Embedding new capabilities post acquisitions
Business Services Security 3. Embedding new capabilities post acquisitions will significantly increase breadth & depth of service offering 3 Gained industry- leading proprietary Embedding new software, capabilities post Merlin Protect 24/7, acquisitions enabling increased efficiency when developing
Slide 121: Leveraging sector-based expertise in retail and public space
Business Services Security 4a. With our prominent position in retail and public space, we have enhanced our capabilities and introduced new innovative processes 4a Crime Centres Security Operations Centres National Incident Communications Centres Leveraging sector-based expertise People Scale Techno
Slide 122: New partnership shows convergence of service lines
Business Services Security 4b. Our new partnership demonstrates the convergence of multiple service lines through the introduction of technologies 4b Leveraging sector-based expertise 122
Slide 123: Mitie and Sainsbury's Partnership
Business Services Security 5. The Mitie and Sainsbury’s Partnership demonstrates strategic account transformation and success in cross and upsell opportunities Logistics Contract Revenue YEAR 3 May 2019 Remote Holistic security monitoring Guarding for Commenced service colleague Elite Central redesi
Slide 124: A strong brand and clear identity
Business Services Security We have a strong brand and clear identity “We are an intelligence-led Key messages: security business. We know the best way to create safe and secure environments for our customers, is by combining the deep expertise 1. Our people have an 2. Our technology and unrivalled a
Slide 125: A clear vision for the future of Security
Business Services Security We have a clear vision for the future of Security Improved productivity through AI & machine learning Security a vital business enabler Workspaces of the future Ability to demonstrate tangible ROI Increased influence within Government & Public Services 125
Slide 126: Medium-term margin target: contribution from Business Services
Business Services Security Medium-term margin target: contribution from Business Services • Cross-selling opportunities Medium-term group margin target of 4.5% - 5.5% • Standardise way of working Margin uplift components • Back-office synergy savings Project Forte 40bps - 70bps SAM optimisation 5bps
Slide 127: Specialist Services
MITIE: DELIVERING THE EXCEPTIONAL, EVERY DAY Specialist Services Presenter Peter Dickinson, Chief of Staff and General Counsel 127
Slide 128: Strong position in Care & Custody, Landscapes and Waste
Specialist Services Overview Strong position in target market in Care & Custody, Top 5 in Landscapes and niche but differentiated position in the Waste segment • Niche markets and strong margins • Good top-line growth Care & Custody Landscapes Waste IRC/FME National footprint Consultancy services 12
Slide 129: Strong revenue growth and margins versus the rest of Mitie
Specialist Services Overview … but with strong revenue growth and margins versus the rest of Mitie business Care & Custody Waste Landscapes Revenue CAGR1=39% Revenue CAGR1=19% Revenue CAGR1=5% 60 45 Winter gritting effect 30 50 40 30 20 30 20 15 10 10 £m £m £m 0 0 0 H1 17/18 H2 17/18 H1 18/19 H2 18/
Slide 130: Care & Custody
Specialist Services Care & Custody Care & Custody • 3 market segments: Immigration, Justice and Health • Credibility and reference ‘ticket’ for Crown Commercial Services Frameworks • Exceptional customer relationships (NPS: +75) • Outstanding reputation for service delivery with core client base • M
Slide 131: Waste
Specialist Services Waste Waste • Unique service offering • 70 degree standard qualified Chemists • Targeting large scale existing Mitie customers for cross-sell opportunities • Growth potential given long-term corporate sustainability-focus trends • Plan Zero – a new Mitie Initiative Do Lead Delive
Slide 132: Landscapes
Specialist Services Overview Landscapes • Top 5 UK landscaping services provider with national delivery capability • Differentiated operating model enabling high asset utilisation and driving competitive cost structure and market-leading margins • Broad self-delivered service offering with underlyin
Slide 133: The Mitie Way of Managing Change
MITIE: DELIVERING THE EXCEPTIONAL, EVERY DAY Capability Development “The Mitie Way” of Managing Change David Cooper, Chief Transformation & Technology Officer 10 December 2019 133
Slide 134: Mitie IT Capability Transformation
Information Services Overview Mitie IT Capability Transformation • Recruited a new strong IS team • Standardising on a smaller set of technologies and platforms • Migrated to a strategic outsource partner,Wipro • Introduced a Service Management Regime and robust contract renegotiations • New governa
Slide 135: IS Transformation of Mitie's IS People and Systems
Information Services Overview IS Transformation of Mitie’s IS People and Systems Core systems moved to the Cloud to deliver scalability & resilience at 300 Azure Storage Usage (TB) a lower cost 200 • SAP ERP, Finance data warehouse, Waste, Cash, Genpact VDI, Hyperion, RPA … 100 Born in the Cloud • D
Slide 136: Business Applications Strategy & Capability
Information Services Overview Business Applications Strategy & Capability Principles SalesForce SAP API (Rationalised • Reduce the number of applications (8 to 1) finance systems) Management • Leverage the existing portfolio O365 Success Data • Introduce new technology to Apps Lake transform Factors
Slide 137: AI Chatbot for Customer Service (ESME)
Information Services Overview AI Chatbot for Customer Service (ESME) • People generally prefer to self serve • Available at times of greatest need (e.g. snowing) • Call Centres are a significant cost and variable quality • AI more reproducible and improved outcomes 137
Slide 138: Real-time dashboards – Waste
Information Services Overview Real-time dashboards – Waste 138
Slide 139: Real-time dashboards – Healthcare
Information Services Overview Real-time dashboards – Healthcare 139
Slide 140: Open API Approach for internal systems and customer integration
Information Services Overview Open API Approach for internal systems and customer integration • Standard, simple, secure connections of systems both within Mitie and to Customers • Uses Microsoft Azure API Management cloud functionality • Cheaper and faster to implement Old internal integration – be
Slide 141: Simplifying Mitie
Information Services Overview Simplifying Mitie Who Who Quality Improvement Council Steering Groups Where Property Payroll Operational QIC Modernising FORTE Working Excellence Finance Finance Capital How Process visibility and Culture of improvement System and data accountability and speaking up imp
Slide 142: Quality Improvement Council
Information Services Overview Quality Improvement Council • Mitie in the past has put in a number of systems but the process, data and people caused an under-delivery of benefits GIVE A MAN • Mobilise a fish people and you to drive feed him efficiency for a day. Teach improvements him how through to
Slide 143: Driving future efficiencies and leveraging past investments
Information Services Overview Driving future efficiencies and leveraging past investments • Further increase the levels of system use/automation associated with PTP, OTC and RTR processes will save significant amounts of cost and time • Streamline the HR and payroll processes • Moving from our Priva
Slide 144: The Mitie Way of winning in sales
MITIE: DELIVERING THE EXCEPTIONAL, EVERY DAY Capability Development “The Mitie Way” of winning in sales Simon Venn, Chief Government & Strategy Officer 10 December 2019 144
Slide 145: Strong foundations in sales and marketing
Commercial Overview We have built strong foundations in sales and marketing… Marketing Sales capability Campaign Based and pipeline Digital Infrastructure Capability building Awareness & Governance Credibility Lead MI & customer insights generation Government Strategic account Framework wins managem
Slide 146: From a siloed sales capability to a strategic one
Commercial Overview We have moved from a siloed, fragmented sales capability to a strategic, focused one… Fragmented Pre-FY 17/18 Simplified FY 19/20 Sales capability • “One Mitie” with single SaLT and upgrade in Siloed businesses commercial talent • Low levels of governance • High levels of governa
Slide 147: A tower of capability that binds our business as One Mitie
Commercial Overview …with a tower of capability that binds our business together as “One Mitie”… Technical . Sales Strategic Accounts Business Services Services MI Marketing & Business Insight SALT Government & Defence IFM Sales & Retention ELT Strategic Account Governance & BidCo Technology applica
Slide 148: Foundations for accelerated value creation
Commercial Overview This provides the foundations for accelerated value creation as well as defining “The Mitie Way”… Data Management Account Supply Chain Management Management Sales Foundations Finance and Knowledge Commercial Management • Accurate and growing pipeline Decision rights and • Strong
Slide 149: New Strategic Account Management approach
Commercial Overview Our new Strategic Account Management approach enables us to “fish where the fish are” whilst improving service delivery… Inputs Outcomes • Single point of accountability • Best in class customer relationships • Empowered • SAM NPS is improving FY 17/18 -21 to today’s + 43 • Build
Slide 150: Developing our Strategic Account Managers
Commercial Overview …investing in the development of our Strategic Account Managers ensures we remain “World Class”... Assessment Development • Framework built from Exec, HiPo and client view • Online academy interactive toolkit created of “World Class” SAM focusing on development of each competency
Slide 151: Driving growth in our pipeline
Commercial Overview All of which is driving growth in our pipeline… Pipeline growth, adjusted for disposals • Material increase in like-for-like pipeline growth • Increase driven by public sector and qualification as a supplier on frameworks • £0.9bn at BAFO of project work • Strong win rates at 50%
Slide 152: A strong strategic government relationship
Commercial Overview …we have built a really strong strategic government relationship… Post-Carillion, new era Cabinet Office view • New Outsourcing Playbook • Strategic supplier • Balanced transfer of risk • Strong UK FM reputation • Improved evaluation – value • Solid financial status Revenue, prof
Slide 153: Place on major CCS government frameworks
Commercial Overview …and, as a result, we have secured a place on major CCS government frameworks... FM framework (RM3830) – £12.0bn Covers all FM services including: M&E, cleaning, security Defence framework (RM6089) – £6.0bn Covers all FM services into DIO estate led by M&E Security framework (RM6
Slide 154: Underpinned by a world-class marketing capability
Commercial Overview … which is underpinned by a world-class marketing capability From minimal marketing infrastructure to a comprehensive digital approach • Digital infrastructure in place (Pardot, Salesforce, Website relaunch imminent) • Measurement systems in place (google and platform analytics,
Slide 155: The Mitie Way of Developing Talent
MITIE: DELIVERING THE EXCEPTIONAL, EVERY DAY Capability Development The Mitie Way of Developing Talent Jo Davis, Group HR Director 10 December 2019 155
Slide 156: Building core HR systems and capability programmes
Human Resources Social Value Building core underlying HR systems and capability enhancing programmes … Core to our talent strategy is ensuring we have the right people, in the right roles with the tools to do their job and the ability to learn and develop their career within Mitie. ‘One-stop-shop’ f
Slide 157: Material improvement in employee engagement
Human Resources Social Value … leading to material improvement in employee engagement Employee engagement Celebration Hub Our one-stop-shop for reward and recognition at Mitie: Employee engagement improved to 45% from • E-cards • Birthday Cards 33% last year • Long Service awards • Deals and discoun
Slide 158: Developing a Social Value ethos across the business
Human Resources Social Value Developing a Social Value ethos across the business Mission: To consider ways in which we can maximise social value in both our day-to-day business operations and every partnership that we create, to benefit individuals, communities, supply chains and the environment. 20
Slide 159: Developing a Social Value ethos across the business
Human Resources Social Value Developing a Social Value ethos across the business MITIE’S SOCIAL VALUE & CSR PILLARS 159
Slide 160: An environmental focus
Human Resources Social Value An environmental focus 3,700 Development 37.4% 62,304 tonnes of card Tonnes of carbon saved by eLearning platform reduction in carbon and paper recycled Mitie in the last two years • Social Value emissions (a year • Energy ahead of 2020 target) Contracted over • Waste 81
Slide 161: Creating a Mitie way for talent development
Human Resources Social Value Creating a ‘Mitie way’ to enable a consistent and best practice approach across the business The Mitie way of developing talent… Talent Onboard & People Recruit Training Mapping & Offboarding Induction Management Career Paths Exit Interview Licence to Operate Licence to
Slide 162: Cultural transformation nears completion
Human Resources Social Value There’s much to shout about as our cultural transformation nears completion… 5,753 2,604 people received a 2,226 64% People are part Mitie stars award People employed of an incentive above the current scheme UK retirement of our Managers have 15,218 people age of 65 comp
Slide 163: Capital Markets Day: Closing remarks
Capital Markets Day Delivering ‘Accelerated Value Creation’ in a changing FM Industry Closing remarks Phil Bentley, CEO, 10 December 2019 163
Slide 164: Where are we today?
Closing remarks CEO Where are we today? • Built strong foundations • Technology is delivering • Further cost saving opportunities • Growing capability momentum • Confidence in forward guidance • Moving into ‘Accelerated Value Creation’ 164
Slide 165: We now have a much healthier business
Closing remarks CEO We now have a much healthier business… From FY 16/17… … To FY 19/20 Revenue1 £1.8bn → £2.2bn3 Revenue1 growth (3-year CAGR) -1% → 6.8%3 EBIT1 before other items £76m → £83m4 EBIT1 margin before other items 4.2% → 3.7%4 Average daily net debt/EBITDA2 3.5x → 2.6x3 Net Promoter Scor
Slide 166: Market leadership at the heart of our vision
Closing remarks CEO … with market leadership at the heart of our vision “Building Foundations” FY 17/18 – H1 19/20 Phase 1 Revenue growth Operating profit margin Free cashflow Operating cash flow Customer satisfaction Employee engagement Pipeline Leverage Simplifying business 166
Slide 167: Medium-term guidance
Closing remarks CEO … with market leadership at the heart of our vision “Building Foundations” “Accelerated Value Creation” MEDIUM-TERM GUIDANCE FY 17/18 – H1 19/20 H2 19/20 – FY 21/22 Phase 1 Phase 2 Revenue growth 2%-4% organic growth Operating profit margin 4.5%-5.5% Free cashflow Operating cash
Slide 168: Longer-term vision
Closing remarks CEO … with market leadership at the heart of our vision “Building Foundations” “Accelerated Value Creation” LONGER-TERM VISION MEDIUM-TERM GUIDANCE 1-2-3 FY 17/18 – H1 19/20 H2 19/20 – FY 21/22 Phase 1 Phase 2 Revenue growth 2%-4% organic growth • Market leadership Operating profit m
Slide 169: Questions
Questions Mitie.com 169
Slide 170: mitie.com
mitie.com 10 December 2019 170