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05 December 2014 DRAFT 22

Full-year trading update Support servicesContract wins in the Defence and Justice sectors

10 December 2014

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Agenda

Full year trading update 2014 Richard HowsonGroup Chief Executive

Nigel TaylorMD Carillion Services

Richard LumbyMD Defence Sector

Daniel EasthopeMD Next Generation Estates Contracts

Colin MacphersonWork Winning Director, Carillion Services

Richard HowsonGroup Chief Executive

FM Services for Prisons

Ministry of Defence Next Generation Estates Contracts

Carillion Services

Defence sector

Summary

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Full-year Trading Update

• Earnings in line with expectations

• Strong work winning performance – £4.6bn of new work won in the year to date

• Expect the Group’s order book plus probable orders at the year end to be over £18.5bn

• Pipeline of contract opportunities worth over £39bn

• Contract selectivity continues to underpin margin performance

• Net debt before acquisitions reducing as expected

• 85 per cent revenue visibility for 2015

HIGHLIGHTS

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Outlook

• Overall our markets are still challenging

• But expect steady improvement in markets to continue, subject to a sustained macro-economic recovery

• Strong, high quality order book and a substantial pipeline of contract opportunities

• Maintaining selective approach to choosing the contracts for which we bid

• Overall, Group continues to be well positioned to make further progress over the medium term

WELL POSITIONED TO MAKE FURTHER PROGRESS OVER THE MEDIUM TERM

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Carillion Services

Nigel TaylorMD Carillion Services

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Carillion ServicesSTRONG WORK WINNING PERFORMANCE

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Defence sector

Richard LumbyMD Carillion Defence and Security

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Ministry of Defence

• Carillion Services MoD revenue over £400m per annum

• Principle customer – Defence Infrastructure Organisation: Strategic Business Partner Sept 2014

• Public Private Partnership projects support services revenues– Allenby and Connaught Carillion’s share £4.2bn over concession period– Joint Permanent Headquarters, Northwood £500m over concession period– Royal School of Military Engineering

• Support services– Next Generation Estates Contracts

− Carillion’s share of revenue £1.1bn over 5 years, potentially £2.5bn over 10 years

• Construction – National Framework Contractor – expect a share of £400m over 4 years – RNAS Yeovilton Helicopter Base – 4 contracts worth c£70m – RAF Waddington Runway Improvements worth c£25m – Faslane Living Accommodation worth c£30m

• What next– Army Basing Plan – Hestia: the proposed regional outsourcing of soft FM– Broader support services opportunities

SUCCESSFUL PARTNERSHIP

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Ministry of Defence Next Generation Estates Contracts

Daniel EasthopeMD Next Generation Estates Contracts

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Next Generation Estates Contracts (NGEC)DEFENCE INFRASTRUCTURE ORGANISATION

• Carillion previously had 2 Prime contracts − National Housing (England & Wales) − Central Region

• Current Primes being replaced by NGEC Primes− Won 5 out of 5 NGEC Primes

− National Housing (England, Wales, Scotland and Northern Ireland)

− Central (old Central + old Eastern) − South West− South East− Scotland and Northern Ireland

• Captures 85% of hard FM for MoD estate

• 5-years, potential to extend to 10 years

• c£1.1bn of revenue for Carillion over 5 years and up to £2.5bn over 10 years

• Target margin 5%+

S&NI

Central

SW SE

NEW NGEC

RegionalPrimes

Core Service 0.4 0.6 1.0

Projects (not secure) 0.3 0.6 0.9

JV Total 0.7 1.2 1.9

66% 54%0.4 0.7 1.1

Regional Prime

Contract Revenue - 5 years

Carillion Share

National Housing Total£bn

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Next Generation Estates Contracts

• Typically 4 bidders for each NGEC

• Carillion priced 5 NGECs separately for direct costs

• Built on our existing geographic footprint of 2 current Primes

• Confident that we could build on the efficiencies delivered though our existing Prime contracts

• Recognised the efficiency benefits from winning more than one contract

• Coherent and consistent approach across all contracts

• Win themes− Extensive knowledge of the MoD estate and its needs − Efficient delivery models that build on savings delivered through current Primes− Regional NGECs: 70% Small & Medium-sized Enterprise usage− Housing: blend of Small & Medium-sized Enterprises and some direct delivery to enable

high occupant satisfaction − Efficient overhead structure with contracts run on Carillion’s IT platform− Utilising established Customer Contact Centre

APPROACH TO BIDDING

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Next Generation Estates ContractsSTART DATES AND STRUCTURES

• Service start dates − Scotland & Northern Ireland 1 Nov 2014− National Housing 1 Dec 2014− Central / South West / South East

1 Feb 2015• Rigorous and efficient mobilisation plans

• NEC 3 contracts for all NGECs− KPI’s for planned & reactive maintenance,

call handling etc.

• Payment Structure− core service paid monthly

• Project work up to a value of £3.9m per project to be delivered through a mixture of

− schedule of rates− fixed price after competitive tender

process with supply chain

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Next Generation Estates ContractsREGIONAL PRIMES

• Full range of hard FM for 435 establishments – over 23,000 buildings– Fabric maintenance – Mechanical, Electrical and Plumbing

maintenance

• Rapid response air base at Lossiemouth

• Largest ammunitions storage in UK

• HQs for Army (Andover), Navy (Plymouth), RAF (High Wycombe)

• In addition to hard FM, soft FM will be provided to Abbey Wood Estate (Bristol)

− home for Defence Equipment & Supply− 8,000 occupants− 98 acre estate− 200,000m2 office space− cleaning− catering− waste management

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Next Generation Estates ContractsNATIONAL HOUSING PRIME

• 48,000 Service Family Houses across England, Wales, Scotland and Northern Ireland

• Family Houses by region − Central 15,000− South East 15,000− South West 13,000− Scotland & Northern Ireland 5,000

• Full end-to-end accommodation management service

− Planned and reactive maintenance − Plus new outsourced services

− Housing allocations− Distribution of domestic furniture

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Colin MacphersonCarillion Services Work Winning Director

FM Services for Prisons

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FM services in public sector prisons CONTRACT OVERVIEW

• Carillion bid all 4 Packages

• Won 2 of 4 Packages - G & H

• Winning 2 Packages was the maximum possible

• Carillion will provide services to 54 Establishments − Package G 32− Package H 22

• Average annual revenue for the combined packages c£37m

• Start date 1 June 2015

• 5-year contracts with potential 2 single-year extensions

Package

H

Package E

Package

F

Package G

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FM services in public sector prisonsCONTRACT STRUCTURE

• NEC 3 contracts

• Payment structure− Core service paid monthly − Variable and project work paid against

schedule of rates

• Key Performance Indicators for services− KPIs encompassing compliance with

service frequency and standards− Performance calculated per

Establishment, significantly de-risks the contract

• Target margin 5%+

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FM in public sector prisons SUMMARY OF SERVICES

• 146 service lines in total comprising − Hard FM: planned preventative maintenance,

reactive maintenance, grounds & landscaping, additional works (ad hoc projects)

− Soft FM: cleaning, waste/recycling, pest control, stores management, escorting contractors

− Energy management− Additional works (minor projects)

• Mobilisation period− December 2014 to service commencement

on 1 June 2015

• Win themes− Understanding customer needs to support

MoJ’s Prison Unit Costs Programme − Trusted collaborative partner − Changing lives through engagement, skills

development and the creation of pathways to employment

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Richard Howson

Group Chief Executive

Summary

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Summary

• Work winning performance indicates improving outlook

• £4.6bn of new work to date in 2014

• Major contract successes in key target sectors – Public sector

− Defence, Justice, Health and Transport– Private sector

− RBS, Heathrow, Arqiva

• 85% revenue visibility for 2015

• Well positioned to make further progress over the medium term

STRONG WORK WINNING YEAR

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Full-year trading update Support servicesContract wins in the Defence and Justice sectors

10 December 2014