Interserve Plc Group overview

1

• Interserve Plc Group overview

2
A leading services, maintenance and building group
Interserve has 3 distinct characteristics

• Leading U.K. outsourced
• service provider
• Sustainable growth
• Strong platform
• Visible order book

• Unique position in the
• Middle East
• Rapid, profitable growthacross the region
• Long-term partners
• Experience local knowledge

• Portfolio of high quality,
• complimentary PFI assets
• Long-term, visible returnsacross the asset life
  cycle
• Mature portfolio

3
Our business Competencies across the asset
lifecycle

• Integrator of services
• Multiple services at one point in time
• Sequential services across the asset lifecycle
• Long-term partner

4
Interserve At a glance
Revenue - by activity
Revenue - by geography
Operating profit - by geography
Operating profit - by activity
5
Some of our clients
Public Sector
Private Sector
6
Outsourcing servicesMaking businesses work more
efficiently

• Two divisions satisfying demand in one
  marketplace
• Facilities Management tailored, total solutions
  
• Large contracts requiring integration of wide
  range of services
• 90 client retention
• Specialist services single service solutions
• Security/technical/environmental services
• Specialist expertise with significant growth
  potential
• Strong sector credentials in business-critical
  environments
• Excellent track record and customer knowledge

7
Sustainability RENEWABLES
8
Outsourcing servicesMarket drivers and
opportunities

• Growth drivers

Strategy

• Supportive public policy
• Increased public sector outsourcing
• Legislation/regulation

• Exploit ongoing change in areas requiring our
  expertise e.g. health, education, defence
• Address new sectors
• Broaden service range

• Requirements across public and private sectors
  to
• Improve service delivery
• Reduce costs
• Manage sustainability

• Promote bundled services
• Strategic partnering
• Carbon management sustainability solutions
  RENEWABLES

Continued strong demand for outsourcing service
9
Project Services Planning and creating physical
assets

• True partnership approach ensures strong
  relationships
• 80 UK / 90 ME repeat business
• Long-term framework agreements with clients
  provide high revenue stability and visibility
• Key partner for UK social infrastructure (public
  private)
• HM prisons / utilities / schools / health
• Strong UK platform supports fast-growing position
  in Middle East
• Personnel and knowledge transfer from UK to ME
• ME contributed 53 divisional profit in H1 2008,
  from 21 in 2002

10
Project ServicesGrowth opportunities
Growth drivers
Strategy

• UK Public infrastructure
• Increased spend in education, health and prisons
• Refurbishment of existing estate assets

• Capitalise on strong client and partner
  relationships
• Continue developing specialist sector knowledge
  and construction techniques

• UK Private infrastructure
• Repair, refurbishment of existing estates
• Increased investment by utilities

• Position the business to take advantage of
  opportunities in emerging markets and sectors
• E.g. waste, sustainability

• Middle East
• Strong GDP growth forecast
• Socio-economic drive to invest in infrastructure
• Client expansion

• Geographic expansion
• Exploit client long-term relationships

Focus on vital elements of the built environment
11
Equipment ServicesDesign, hire and sell
specialist equipment

• Distinguish ourselves through
• Engineering excellence
• Product innovation
• Logistical expertise
• 3 main hubs
• ME unprecedented demand
• UK record performance
• Australia -Benefitting from increased mineral
  extraction
• Delivers vital benefits to clients
• Time saving
• Labour saving
• Safety
• Niche business with good margins (up to 20)
• Global direction, local service

12
Equipment ServicesGrowth opportunities
Growth drivers
Strategy

• Growing sophistication in construction practices
• Time labour increasingly valuable
• Design complexity increasing

• Ongoing programme of innovative product design
• Provide international rapid engineering design
  response to project requirements

• Geographic shifts in demand
• Demographic movement among client base

• Design transferability into products
• Manage logistics centrally
• Export/agency/depot options

• Regulation/legislation
• Complexity

• Focus on regions / work types where site safety
  is a significant issue

Global direction, local service targeting
growth markets
13
Middle EastLong-term growth story

• Over 25-year presence in the region
• Strong UK market position vital to success
• Operations in UAE, Qatar, Oman, Saudi, Bahrain
• Significant acceleration in growth in recent
  years
• Now accounts for 30 Group profits (CAGR of 45
  since 2000)
• High quality relationships/partnerships
• Excellent reputation
• Significant level of repeat business (90)
• Attractive, sustainable margins
• Current focus is Project and Equipment Services
• Opportunity to develop locally-based facilities
  management business

14
Middle East growth opportunities
Growth drivers
Strategy

• Strong GDP growth forecast
• UAE 6.5
• Qatar 7.5
• Oman 5.0
• Cash-rich societies with under-developed
  infrastructure
• Countries competing for their place in the future
• Business based on relationships proven delivery
• Trusted clients developing their businesses
  internationally

• Geographic expansion
• Saudi, Abu Dhabi, Qatar, Libya
• Leverage local knowledge between divisions
• Development of facilities management services
• Exploit client relationships as they enter new
  territories

Very significant potential for the foreseeable
future
Average annual growth to 2012. Source Business
Monitor International
15
PFI Embodiment of all our abilities

• Advising, sponsoring, delivering
• Attractive returns across the lifecycle
• Sponsor
• Invest
• Hold or harvest
• Long-term, visible cash flows
• Typically commit up to half of the equity
• Established secondary market for assets

16
PFI/PPP portfolio analysisat 30 Jun 2008
17
PFI portfolio valuation
18
Future workload 6.4 billion
19
Interserve future direction
New markets
New services
20
Summary

• Strong performance
• Leading U.K. outsourced service provider
• Sustainable growth
• Strong platform
• Visible order book
• Expanding opportunities in the Middle East
• Rapid, profitable growth across the region
• Portfolio of high quality, complimentary PFI
  assets
• Long-term, visible returns across the asset
  lifecycle
• Record future workload
• Exciting opportunities in new markets and services

21
Appendices
22
Income statement
23
Analysis of operating profit
PS margin is UK operations
24
Net debt 2007
114.8m
101.6m
25
Cash flow and net debt
26
Pensions

• Pre-tax funding position 110.5m (31 December
  2007 83.1m)
• Investment value down 7 per cent, on sharp fall
  in asset prices
• Present value of liabilities reduced by 1 per
  cent due principally to increased bond yields,
  partly offset by increased inflation assumptions
• Increase in income statement charge for period to
  7.3m(H1 2007 5.1m)
• Cash contributions in H1 12.5m (H1 2007 11.3m)
• Next triennial to reassess funding requirement to
  be based onend-2008 figures

27
Formwork and falsework