Babcock International Group PLC · LSE:BAB
Babcock International — Citigroup Business Services Conference 2011
42 slides from Babcock International's conference presentation, Mar 25, 2011
Slide 1: Delivering growth
Delivering growth Kevin Thomas – Chief Executive, Support Services Division Citigroup Business Services Conference Friday 25 March, 2011 1
Slide 2: Disclaimer
Disclaimer This document has been prepared by Babcock International Group PLC (the “Company”) solely for use at presentations in connection with the Company's participation in the Citigroup Business Services Conference on 25 March 2011. For the purposes of this notice, the presentation that follows
Slide 3: Agenda
Agenda • Group overview • What makes us different • Marine and Technology • Defence • Support Services Division • Questions
Slide 4: Group overview
Group overview 4
Slide 5: Babcock International Group PLC
Babcock International Group PLC Middle East Canada RoW 1% • The UK‟s leading engineering support 2% 2% services organisation South Africa 6% • Operating through four divisions US UK – c 27,000 employees 8% 81% Our divisions Geographic • Marine and Technology Revenue The UK‟s leading naval support bu
Slide 6: Our customers
Our customers • Our customers Other MoD – are government 23% 53% departments, public Customers bodies or private Network Rail 4% by companies operating in Local Revenue Authorities highly regulated 5% environments Nuclear 7% DoD – operate strategically 8% important assets which Pro forma FY 2009/10
Slide 7: Our strategy
Our strategy To retain our position as the UK‟s leading engineering support services company – with operations in the UK and selected overseas markets – delivering superior returns for our stakeholders Focus on • Top 3 market positions • Specific customer characteristics and long term contracts • Cu
Slide 8: VT Group plc acquisition summary
VT Group plc acquisition summary • £1.5bn VT acquisition completed 8 July 2010 – approximately 50% cash; 50% equity • Net debt to EBITDA at the time of acquisition c 2.9 x – reduced at 30 September 2010 to 2.8 x • Clear and compelling strategic rationale – creating the largest and most focused engin
Slide 9: Sustained track record of growth
Sustained track record of growth Revenue and operating profit • Sustained track record of growth – organic revenue averaging 11% growth each year for the last five years – profit before interest averaging 21% growth each year over the last five years Revenue Operating profit* 3000 300 2500 250 2000
Slide 10: Sustained track record of growth
Sustained track record of growth Operating return on revenue* Group Segmental 15.2 10.0 15.0 9.3 8.7 8.8 12.011.9 12.0 8.2 7.8 7.7 7.7 9.9 8.0 9.0 6.9 6.9 7.2 % 6.6 % 5.7 5.8 6.0 6.0 3.0 4.0 0.0 Marine Defence and Support International 2006/07 2007/08 2008/09 2009/10 2010/11 Security Services Half y
Slide 11: Excellent order book and growing bid pipeline
Excellent order book and growing bid pipeline • Current order book stable at £12bn since July 2010 Order book value £bn – underpinned by contract 12.0 extensions and scope 12 expansions – ongoing steady flow of 9 8.3 contracts from bid pipeline • Long term visibility and 6 5.2 5.7 6.0 security 3.0 3
Slide 12: Delivering value for shareholders eps and dividend growth
Delivering value for shareholders eps and dividend growth • Board‟s confidence in future prospects of the Group reflected in – 22% increase in full 20.00 60.00 year dividend for 18.00 16.00 50.00 2009/10 14.00 40.00 12.00 – 8% increase in 10.00 30.00 interim dividend for 8.00 6.00 20.00 2010/11 4.00
Slide 13: What makes us different
What makes us different 13
Slide 14: What makes us different 'trusted to deliver'
What makes us different Our strengths „trusted to deliver‟ A strong service ethos Ownership of significant assets, Clear customer skill sets and empathy know-how Operational excellence Leadership Complex positions in integrated selected markets output contracts A focus on engineering support 14
Slide 15: Marine and Technology
babcock ANOlOGY www.babcock.co.uk
Slide 16: Marine and Technology
Marine and Technology 12% • Trusted partner for the 16% Naval bases Royal Navy Submarines – the UK‟s leading naval 25% Warships support company 29% Intec • Own and operate Equipment support essential strategic 18% infrastructures Pro forma 2009/10 revenue £1,014.6m • Distinctive know-how, skills and
Slide 17: Marine and Technology Key activities and contracts
Marine and Technology Key activities and contracts 2009/10 Pro forma Group Joint Total Babcock VT £m Babcock VT Ventures £m £m Revenue 973.8 40.8 1,014.6 - - - 1,014.6 Operating profit 116.5 2.6 119.1 - - - 119.1 Key activities Future opportunities • Warships • Terms of Business Agreement (ToBA) sco
Slide 18: Defence
Defence 18
Slide 19: Defence and Security
Defence and Security • A major support provider 30% to all three armed forces Air • The largest provider of Training & Support military training 70% – Army, RAF and Royal Navy Pro forma 2009/10 revenue £615.6m • Delivering leading edge fleet and equipment management services • Key member of Future S
Slide 20: Defence and Security Key activities and contracts
Defence and Security Key activities and contracts 2009/10 Pro forma Group Joint Total Babcock VT £m Babcock VT Ventures* £m £m Revenue 74.1 431.7 505.8 13.8 96.0 109.8 615.6 Operating profit 9.1 59.2 68.3 0.7 17.6 18.3 86.6 Key activities Future opportunities • Future Strategic Tanker Air (FSTA) • D
Slide 21: Support Services Division
Support Services Division 21
Slide 22: Business Overview
Business Overview Support Services Division Kevin Thomas Critical Assets Education & Infrastructure Nuclear Rail Austin Lewis Training David Plester Roger Hardy Bob Whiley Alex Khan Airport Services School Improvement Services Defence Property Decommissioning Track renewals Communications Employabil
Slide 23: Business Overview
Business Overview Support Services Division Kevin Thomas Critical Assets Education & Infrastructure Nuclear Rail Austin Lewis Training David Plester Roger Hardy Bob Whiley Alex Khan Airport Services School Improvement Services Defence Property Decommissioning Track renewals Communications Employabil
Slide 24: Our Business
Our Business WHO? HOW? Customer/Market Characteristics Service Delivery Characteristics • Public sector or regulated • High quality management activity teams, locally based, • Emphasis on value for dedicated to customer money requirements • Complex range of activities • Responsibility devolved to cr
Slide 25: Mobile Asset Management Strategic growth area
Mobile Asset Management Strategic growth area Keeping our emergency services on the move • Metropolitan Police - Fleet management solutions for 3,700+ vehicles, travelling more than 63 million miles each year • Highway Agency - Supply and maintenance of the fleet • New Dimension – managing and track
Slide 26: Mobile Asset Management Strategic growth area
Mobile Asset Management Strategic growth area Addressable and potential market What we do: • Manage complex fleets of specialist vehicles and equipment – which are Emergency Services critical to customer £18.7 billion operations total spend 1 • Through efficiency and savings, we can reduce fleet Add
Slide 27: Energy - Strategic growth area
Energy- Strategic growth area Delivering power across the UK • UK Transmission and Distribution - meeting future power needs as part of the Electricity Alliance West servicing Western England and Wales • Refurbishing and Upgrading overhead power lines • Supporting 800km of pipeline for the Oil and P
Slide 28: Energy - Strategic growth area
Energy- Strategic growth area Addressable and potential market What we do: • An end to end design and engineering service for the construction and UK Power Infrastructure – refurbishment of high voltage, Capital Expenditure overhead power lines and £3.1 billion related infrastructure total spend 1 •
Slide 29: Education - Strategic growth area
Education- Strategic growth area Improving educational outcomes whilst driving down costs • Working in partnership with over 500 schools across 50 Local Authorities • Award winning service: – Education Supplier of the Year – Best use of ICT to create a Learning Community • Delivering Results: – redu
Slide 30: Education - Strategic growth area
Education- Strategic growth area Addressable and potential market What we do: • Provide a broad range of educational services • Work in partnership with Educational Market local authorities to improve £43 billion education standards and total spend 1 save money Addressable • Utilise our team of 500+
Slide 31: Training - Strategic growth area
Training- Strategic growth area The UK’s largest training provider • Working in partnership with over 6,000 employers • Managing the training of over 22,000 apprentices and learners • Operating specialist training centres for Fire & Rescue authorities • Ofsted Grade 1 „Outstanding‟ 31
Slide 32: Training - Strategic growth area
Training- Strategic growth area Addressable and potential market What we do: • Deliver apprenticeship and technical training to the private and public sectors Training Market • Offer business-led training: £3.9 billion 1 designing, developing and delivering training to meet organisations‟ individual
Slide 33: Infrastructure - Strategic growth area
Infrastructure- Strategic growth area Helping customers to get the best from their property portfolio • Market leading facilities management provider to the MoD • Managing over 15,000 properties across 100 sites in UK • Supporting sectors including emergency services, education and commercial custom
Slide 34: Infrastructure - Strategic growth area
Infrastructure- Strategic growth area Addressable and potential market What we do: • Provide whole life asset management services for a range of large and complex Infrastructure market sites throughout the UK and £38.7 billion Germany total spend 1 • Management includes Addressable buildings and ass
Slide 35: Nuclear - Strategic growth area
Nuclear- Strategic growth area The UK’s largest nuclear engineering and support services company • Site Licensee for 5 nuclear licensed sites including Dounreay • One of the UK‟s largest nuclear design houses • Capabilities span the full nuclear lifecycle: – design and build – operation and maintena
Slide 36: Nuclear - Strategic growth area
Nuclear- Strategic growth area Addressable and potential market What we do: • Provide the largest nuclear management, engineering and support services business in the UK UK Nuclear Market £4.8 billion • Work in partnership with key total spend 1 customers including the Nuclear Decommissioning Author
Slide 37: Rail
Rail Maintaining critical infrastructure to ensure trains run on time • The UK‟s largest conventional track renewals contractor with 50% market share • Building critical rail infrastructure - track, signalling, power and electrification • Delivering retail and operational telecommunications technolo
Slide 38: Airports
Airports Every bag with every passenger, every time • Baggage-handling systems at the world‟s busiest terminals • Handling baggage for 1/3rd of the UK‟s passengers Keeping BA flights on schedule • Providing critical 24/7 airside support for British Airways fleet • Managing and maintaining over 2,700
Slide 39: Communications
Communications Connecting broadcasters to listeners around the world • Strategic partner to the BBC: – delivering the World Service to 188M listeners world-wide – delivering over 1,000 hours of programming each day • Providing industry‟s only fully managed global broadcast network Keeping Britain ta
Slide 40: Cross-selling opportunities
Cross-selling opportunities SSD beginning to leverage its Growth markets combined capabilities to drive organic growth Local Emergency Training Mobile Property Govt. Services Assets Critical Assets Airport Services Broadcast & Communications Mobile Asset Management Power & Energy Education
Slide 41: Questions
41 www.babcock.co.uk
Slide 42: babcock
www.babcock.co.uk babcock trusted to deliver ™ 42
Babcock International Group — Citigroup Business Services Conference 2011 on 6ix