6 march 2013 - costain · results for the year ended 31 december 2012 financial summary >...
TRANSCRIPT
Results for the year ended 31 December 2012
6 March 2013
Results for the year ended 31 December 2012
Overview
gt Another strong performance
gt Driven by continued focus on delivering integrated services to meet the
complex requirements of major customers
gt High quality order book
gt Recommendation to increase the dividend for sixth consecutive year
1
Financial Review
Tony Bickerstaff Group Finance Director
Results for the year ended 31 December 2012
Financial summary
gt Revenues of pound9345 million (2011 pound9863 million)
gt Underlying operating profit1 up 4 to pound251 million (2011 pound241 million)
gt Adjusted profit before tax2 increased 16 to pound295 million (2011 pound255million)
gt Adjusted basic earnings per share2 up 33 to 414 pence (2011 311 pence)
reflecting increased profits and a non-recurring tax timing benefit
gt pound1057 million year-end net cash balance (2011 pound1404 million) and average
month-end cash balance of pound1034 million (2011 pound1304 million)
gt Recommended increase in total dividend for the year to 1075p up 75 on
previous year
1 Before amortisation of acquired intangible assets amp employment related acquisition consideration and excludes the one-off costs resulting from pension scheme liability actions 2 Before amortisation of acquired intangible assets amp employment related acquisition consideration and after pound105m profit arising from transfer of PFI assets into Group pension
scheme and pound28m one-off pension scheme liability costs
3
Results for the year ended 31 December 2012
Increased earnings
4
gt Profit growth reflecting successful implementation of strategy focused on major
customers
gt Transition to c 90 of order book value from target cost based contracts with better
risk profile and incentive mechanismshellipin line with major customer requirements
gt Support-service related activities accounting for 29 of 2012 revenues
gt Underlying operating margin increased to 27 (2011 24)
pound183m
pound208m
0
5
10
15
20
25
30
35
2008 2009 2010 2011 2012
Group adj profit
from operations
PFI Sales
pound112m
pound236m pound156m
pound94m
pound27m
pound237m
daggerpound77m
pound20m
pound188m pound182m
pound9863m pound9960m
Results stated before amortisation of acquired intangible assets and employment related acquisition consideration and after pound105m profit arising from transfer of PFI assets into Group pension scheme and pound27m one-off costs resulting from pension scheme liability actions
dagger Net of one-off costs resulting from pension scheme liability management actions
Results for the year ended 31 December 2012
Segmental income statement Year ended 31 December 2012
5
Revenue1
Underlying
operating
profit
JVsinvestment
sales
Profit(loss)
before other
items2
Revenue1
Operating
profit
JVsinvest
ment sales
Profit(loss)
before other
items2
poundm poundm poundm Margin poundm poundm poundm Margin
Infrastructure 5623 261 261 46 4660 102 102 22
Environment 2326 36 09 45 19 3754 161 14 175 47
Profit from PFI Transfer 105 105
Energy amp Process 1377 25 25 18 1434 46 01 47 33
Land Development 19 - (23) (23) 15 - (20) (20)
Central costs (71) (71) (68) (68)
Pension scheme liability
costs - (28) (28) - -
Adjusted profit from operations 9345 251 63 314 9863 241 (05) 236
Net interest (expense)income (19) 19
Adjusted profit before tax 295 255
Adjusted basic earnings per share 414p 311p
1 Including share of joint ventures amp associates
2 Other items - Amortisation of acquired intangibles amp employment related deferred consideration
2012 2011
Results for the year ended 31 December 2012
Net finance (expense)income
6
2012 2011
poundm poundm
Net bank depositloan interestfees (08) 01
IAS19 pension scheme interest
Expected return on scheme assets 263 323
Interest cost on present value of obligations (274) (305)
IAS19 pension scheme net interest (11) 18
Net finance (expense)income (19) 19
Results for the year ended 31 December 2012
Other items and tax
7
Other Items
gt Amortisation of acquired intangible assets - pound17 million (2011 pound09 million)
gt Employment related deferred consideration - pound17 million (2011 pound07 million) gt Accounting standard requires any consideration related to employment to be expensed over the
required service period
gt Promanex ndash 2 years from acquisition date (August 2011)
gt ClerkMaxwell ndash Annual earn-out basis for 201220132014
Tax
gt 2012 effective tax rate at 73 (2011 218) gt Profit on PFI equity transfer to pension scheme tax free
gt Added benefit of RampD tax credit and positive timing differences
gt Normalised effective tax rate expected to be 22 - 24
Results for the year ended 31 December 2012
Cash position
8
2012 2011
poundm poundm
Net cash at beginning of period 1401 1443
Cash from operating activities (231) 348
Cash used by investing activities (51) (348)
Dividends financing (62) (43)
Effect of foreign exchange rate changes 01
Reported net cash 1057 1401
Net cash reconciliation
Cash and cash equivalents at end of period 1074 1417
Less bank overdrafts (17) (16)
Reported net cash 1057 1401
Average month-end cash balance - pound1034m (2011 pound1304m)
Impact on net cash due tohellip
bull Changing profile of business
minus Increased level of support
services activities
minus c 90 of order book value
from target cost based
contracts
minus Reduction in advance
payments
bull Changing industry cash flow trends
bull Timing on one particular
project completion
Average net cash position to
trend lower but will remain
strong
Results for the year ended 31 December 2012
Actions to manage pension obligation
9
gt Actions announced in February 2012 gt Transfer of interest in two PFI investments into the Costain Pension Scheme (lsquoCPSrsquo) at agreed
value of pound203 million - completed on 22 February 2012
gt Resulted in accounting profit on the transfer of pound105 million
gt Implementation of Enhanced Transfer Value (lsquoETVrsquo) and Pension Increase Exchange (lsquoPIErsquo) offers
to the members of the CPS
gt ETV and PIE exercises have resulted in a reduction in the scheme liabilities and assets of
approximately pound35 million and have resulted in a one-off accounting cost of pound28 million expensed
in 2012
gt Another full actuarial valuation of the CPS will be carried out as at 31 March
2013
31 December
2012
31 December
2011
poundm poundm
Fair value of scheme assets 5588 5479
Present value of defined benefit obligations (6107) (6008)
Recognised liability for defined benefit obligations (519) (529)
Deferred tax 119 132
Net pension deficit (400) (397)
Results for the year ended 31 December 2012
Increased dividend
gt Recommended final dividend for sixth successive year
gt Taking total for the year to 1075p a 75 increase on the prior year
gt Payment on 24 May 2013 to shareholders on the register as at 19 April 2013
gt Option to take shares in lieu
10
250p 275p 300p 325p
500p 550p
625p
725p
0
2
4
6
8
10
12
2008 2009 2010 2011 2012
Final
Interim
35p
675p
750p 825p
925p 1000p
Pence
1075p
Business Review
Andrew Wyllie Chief Executive
Results for the year ended 31 December 2012
Costain today
12
Providing world class engineering services in design
delivery and maintenance to
meet national needs
Results for the year ended 31 December 2012 13
Costainrsquos business model
13
Range of
innovative
services
Skills and
experience
of team
Financial
strength
Track record
of reliable
safe service
delivery
Values and
brand reputation
Advisory amp
Design
Programme
Delivery Operations amp
Maintenance
Natural Resources
RESOURCE ALLOCATION
BUSINESS DEVELOPMENT
Our strategy is focused on
major customers
addressing national needs
Sector lsquouniquersquo
customer aligned
divisional structure
Delivered though longer-
term larger contracts and
extensions incorporating a
broader range of services
Costain Tier One
provider of
Engineering
Solutions
Essential capabilities
and attributes
Over 90 repeat orders
PERFORMANCE MANAGEMENT
Range of
innovative
services
Skills and
experience
of team
Financial
strength
Track record
of reliable
safe service
delivery
Values and
brand reputation
Infrastructure
Results for the year ended 31 December 2012
New divisional structure
14
Natural Resources Infrastructure
Advisory amp Design Programme Delivery Operations amp Maintenance
Water A leading provider of Capital Framework and Maintenance Framework Programmes
under the current AMP 5 arrangements
Waste Delivering major waste schemes across the UK the sector provides integrated and
complete support services
Hydrocarbons and chemicals Developing and implementing solutions for upstream and midstream oil and gas and
chemical sectors in the UK and Abu Dhabi
Nuclear Major frameworks delivered across key strategic assets
Highways Delivering major programmes for the Highways Agency maintenance under the
current MAC contracts and Early Contractor Involvement works
Rail A leading provider of multidisciplinary projects currently delivering major projects
principally focused on transportation hubs most recently at Farringdon Reading and
Paddington
Power Focusing on thermal generation new nuclear offshore wind transmission
distribution and biomass
Airports Delivering programmes of work across airport assets at Heathrow Gatwick and
Manchester
Pre-investment advisory Developing leading engineering solutions to
customersrsquo needs through the appropriate use of
service and technology To provide efficient and
effective advice to customersrsquo challenges
Complex programme advisory Building on the extensive capability across the
business Costain is often employed at pre-
development phase and development phase of
project solutions
Operational excellence advisory Provides customers with engineering consultancy
advice and support across the asset lifecycle
Sustainability and energy advisory Delivering investment with certainty and responsibility
Programme leadership Delivering operational excellence in complex
construction projects
Sustainable delivery Costainrsquos experience of delivering major schemes on
time to budget and to a high level of quality remains a
core capability
Partnering and Collaboration Costain continues to drive efficient delivery of these
projects focusing on its people process and partners
Infrastructure network management Operating assets to drive efficient and effective
utilisation Minimising whole-life cost and
maximising value
Asset management and maintenance The acquisition of Promanex during 2011 delivers
operations and maintenance activity across the
power water and nuclear sectors
Facilities management Supporting customersrsquo needs to focus on their core
business partnering with and developing these to a
successful conclusion
Safety first and compliance culture Delivering maintenance of major assets
Both divisions deliveringhellip
Results for the year ended 31 December 2012 15
ldquoCustomers are demanding increasingly innovative solutions
lsquoEngineering Tomorrowrsquo is the Costain commitment to identifying developing
and implementing innovative solutions to major national needsrdquo
lsquoEngineering Tomorrowrsquo
Results for the year ended 31 December 2012 16
Innovative technology lsquoMariorsquo asset management tool ndash developed as part of the Costain
Start-up initiative and now being sold commercially to customers
Delivering technology
solutions
First technology contract for Welsh Government for the maintenance
of Road Network Communications and Tunnel Systems across
Wales
Addressing the nuclear
legacy
Undertaking RampD into Plasma Vitrification and Graphite Gasification
technologies as potential solutions for addressing the treatment and
storage of intermediate level nuclear waste
Asset enhancement Complex design and management for Centrica for the delivery of its
gas plant at Easington to serve the York field in the North Sea
Managing a complex
live environment
Providing integrated services at London Bridge Station including
design construction logistical and environmental operations whilst
ensuring the station remains operational throughout
Strategic asset
management
Appointed by the Oil amp Pipelines Agency on a 3-year operations and
maintenance contract that now covers the whole of their estate
Consolidation of
services
Awarded the Magnox Framework contract for the delivery of
construction infrastructure and maintenance projects across all ten
of its sites
lsquoEngineering Tomorrowrsquo in action
Results for the year ended 31 December 2012
lsquoEngineering Tomorrowrsquo in action
17
Developing skills and
creating employment
Involvement with The Princersquos Trust now taking on more
apprentices working with young offenders offering a sought-after
graduate programme developing and running skills academies
Good citizenship
Corporate and Social Responsibility ndash lsquoCostain Caresrsquo ndash embodies
our core values recognised by our Business in the Community
Award
Repeat orders Recently secured seventh contract from Crossrail
Enhancing key
resources
Working on the AMP5 framework contracts with Northumbrian
Water Severn Trent Southern Water United Utilities and Welsh
Water
Creating a sustainable
environment
Undertaking RampD on behalf of the Energy Technology Institute to
develop a prototype process for carbon capture
Value for money Deliver of Junctions 10-13 of the M1 in Bedfordshire nearly four
months ahead of schedule
Results for the year ended 31 December 2012
hellipleading to high quality order book
gt Order book of pound24 billion (2011 pound25 billion)
gt pound900 million new contracts and extensions secured during the year
gt In excess of 90 from repeat orders
gt Target cost based contracts now circa 90 of order book value
gt In addition preferred bidder positions of over pound400 million
gt Major customers continuing to invest billions in capital operations and
maintenance contracts to meet essential national needs
gt Ability to focus Group wide resources where demand is highest
gt Bidding activity remains high
18
Results for the year ended 31 December 2012
Good visibility
19
0 200 400 600 800 1000 1200 1400
2015 onwards
2014
2013
Group order book 31 December 2012
0 200 400 600 800 1000 1200 1400
2014 onwards
2013
2012
Group order book 31 December 2011
Total pound24 billion
Total pound25 billion
poundm
poundm
Results for the year ended 31 December 2012
Summary
gt Another strong performance in 2012
gt Driven by continued focus on providing integrated services to meet the
complex requirements of customers
gt Major customers continuing to invest pound billions to meet essential national
needs
gt lsquoEngineering Tomorrowrsquo to enhance and broaden our range of innovative
services
gt Confidence is reflected in recommendation to increase the dividend for sixth
successive year
20
Results for the year ended 31 December 2012
6 March 2013
Appendix
Results for the year ended 31 December 2012
Balance sheet
23
31 December 2012 2011
poundm poundm
Assets
Non current assets 912 952
(excluding pension deficit deferred tax)
Trade and other receivables 1832 1903
Cash 1074 1417
Current assets 2906 3320
Total assets 3818 4272
Current liabilities (3031) (3483)
Total Assets less current liabilities 787 789
Non Current liabilities (69) (84)
(excluding net pension liability)
Pension liability net of deferred tax (400) (397)
Total Equity 318 308
Results for the year ended 31 December 2012 24
Status Invested
Capital
Committed
Capital
Directors
Valuation
Bridgend Sold
Kings Sold
Sirhowy Sold
Kent Schools Sold
Ealing Schools Sold
Shropshire Sold
Kent Elderly Sold
Kingston
3 Shires - Lincolnshire Trfd to
3 Shires - Leicester Pension
3 Shires - Derby Fund
Bradford BSF I 2010
Lewisham BSF I
Bradford BSF II Trfd to
Lewisham BSF II Pension Fund 2012
Aquatrine Operations 10 -
94
Lewisham BSF III Operations 13 -
22
Lewisham BSF IV Construction - 22
34
TOTALS 23 22
151
PFI equity portfolio ndash estimated valuation
75
100
125
150
175
200
100 95 90 85 80 75 70 65 60
Esti
mate
d V
alu
ati
on
(poundm
)
Discount Rates
Valuation of Current Portfolio
The value of the restructured business following the formation of Severn Trent Costain
Results for the year ended 31 December 2012
6 March 2013
Results for the year ended 31 December 2012
Overview
gt Another strong performance
gt Driven by continued focus on delivering integrated services to meet the
complex requirements of major customers
gt High quality order book
gt Recommendation to increase the dividend for sixth consecutive year
1
Financial Review
Tony Bickerstaff Group Finance Director
Results for the year ended 31 December 2012
Financial summary
gt Revenues of pound9345 million (2011 pound9863 million)
gt Underlying operating profit1 up 4 to pound251 million (2011 pound241 million)
gt Adjusted profit before tax2 increased 16 to pound295 million (2011 pound255million)
gt Adjusted basic earnings per share2 up 33 to 414 pence (2011 311 pence)
reflecting increased profits and a non-recurring tax timing benefit
gt pound1057 million year-end net cash balance (2011 pound1404 million) and average
month-end cash balance of pound1034 million (2011 pound1304 million)
gt Recommended increase in total dividend for the year to 1075p up 75 on
previous year
1 Before amortisation of acquired intangible assets amp employment related acquisition consideration and excludes the one-off costs resulting from pension scheme liability actions 2 Before amortisation of acquired intangible assets amp employment related acquisition consideration and after pound105m profit arising from transfer of PFI assets into Group pension
scheme and pound28m one-off pension scheme liability costs
3
Results for the year ended 31 December 2012
Increased earnings
4
gt Profit growth reflecting successful implementation of strategy focused on major
customers
gt Transition to c 90 of order book value from target cost based contracts with better
risk profile and incentive mechanismshellipin line with major customer requirements
gt Support-service related activities accounting for 29 of 2012 revenues
gt Underlying operating margin increased to 27 (2011 24)
pound183m
pound208m
0
5
10
15
20
25
30
35
2008 2009 2010 2011 2012
Group adj profit
from operations
PFI Sales
pound112m
pound236m pound156m
pound94m
pound27m
pound237m
daggerpound77m
pound20m
pound188m pound182m
pound9863m pound9960m
Results stated before amortisation of acquired intangible assets and employment related acquisition consideration and after pound105m profit arising from transfer of PFI assets into Group pension scheme and pound27m one-off costs resulting from pension scheme liability actions
dagger Net of one-off costs resulting from pension scheme liability management actions
Results for the year ended 31 December 2012
Segmental income statement Year ended 31 December 2012
5
Revenue1
Underlying
operating
profit
JVsinvestment
sales
Profit(loss)
before other
items2
Revenue1
Operating
profit
JVsinvest
ment sales
Profit(loss)
before other
items2
poundm poundm poundm Margin poundm poundm poundm Margin
Infrastructure 5623 261 261 46 4660 102 102 22
Environment 2326 36 09 45 19 3754 161 14 175 47
Profit from PFI Transfer 105 105
Energy amp Process 1377 25 25 18 1434 46 01 47 33
Land Development 19 - (23) (23) 15 - (20) (20)
Central costs (71) (71) (68) (68)
Pension scheme liability
costs - (28) (28) - -
Adjusted profit from operations 9345 251 63 314 9863 241 (05) 236
Net interest (expense)income (19) 19
Adjusted profit before tax 295 255
Adjusted basic earnings per share 414p 311p
1 Including share of joint ventures amp associates
2 Other items - Amortisation of acquired intangibles amp employment related deferred consideration
2012 2011
Results for the year ended 31 December 2012
Net finance (expense)income
6
2012 2011
poundm poundm
Net bank depositloan interestfees (08) 01
IAS19 pension scheme interest
Expected return on scheme assets 263 323
Interest cost on present value of obligations (274) (305)
IAS19 pension scheme net interest (11) 18
Net finance (expense)income (19) 19
Results for the year ended 31 December 2012
Other items and tax
7
Other Items
gt Amortisation of acquired intangible assets - pound17 million (2011 pound09 million)
gt Employment related deferred consideration - pound17 million (2011 pound07 million) gt Accounting standard requires any consideration related to employment to be expensed over the
required service period
gt Promanex ndash 2 years from acquisition date (August 2011)
gt ClerkMaxwell ndash Annual earn-out basis for 201220132014
Tax
gt 2012 effective tax rate at 73 (2011 218) gt Profit on PFI equity transfer to pension scheme tax free
gt Added benefit of RampD tax credit and positive timing differences
gt Normalised effective tax rate expected to be 22 - 24
Results for the year ended 31 December 2012
Cash position
8
2012 2011
poundm poundm
Net cash at beginning of period 1401 1443
Cash from operating activities (231) 348
Cash used by investing activities (51) (348)
Dividends financing (62) (43)
Effect of foreign exchange rate changes 01
Reported net cash 1057 1401
Net cash reconciliation
Cash and cash equivalents at end of period 1074 1417
Less bank overdrafts (17) (16)
Reported net cash 1057 1401
Average month-end cash balance - pound1034m (2011 pound1304m)
Impact on net cash due tohellip
bull Changing profile of business
minus Increased level of support
services activities
minus c 90 of order book value
from target cost based
contracts
minus Reduction in advance
payments
bull Changing industry cash flow trends
bull Timing on one particular
project completion
Average net cash position to
trend lower but will remain
strong
Results for the year ended 31 December 2012
Actions to manage pension obligation
9
gt Actions announced in February 2012 gt Transfer of interest in two PFI investments into the Costain Pension Scheme (lsquoCPSrsquo) at agreed
value of pound203 million - completed on 22 February 2012
gt Resulted in accounting profit on the transfer of pound105 million
gt Implementation of Enhanced Transfer Value (lsquoETVrsquo) and Pension Increase Exchange (lsquoPIErsquo) offers
to the members of the CPS
gt ETV and PIE exercises have resulted in a reduction in the scheme liabilities and assets of
approximately pound35 million and have resulted in a one-off accounting cost of pound28 million expensed
in 2012
gt Another full actuarial valuation of the CPS will be carried out as at 31 March
2013
31 December
2012
31 December
2011
poundm poundm
Fair value of scheme assets 5588 5479
Present value of defined benefit obligations (6107) (6008)
Recognised liability for defined benefit obligations (519) (529)
Deferred tax 119 132
Net pension deficit (400) (397)
Results for the year ended 31 December 2012
Increased dividend
gt Recommended final dividend for sixth successive year
gt Taking total for the year to 1075p a 75 increase on the prior year
gt Payment on 24 May 2013 to shareholders on the register as at 19 April 2013
gt Option to take shares in lieu
10
250p 275p 300p 325p
500p 550p
625p
725p
0
2
4
6
8
10
12
2008 2009 2010 2011 2012
Final
Interim
35p
675p
750p 825p
925p 1000p
Pence
1075p
Business Review
Andrew Wyllie Chief Executive
Results for the year ended 31 December 2012
Costain today
12
Providing world class engineering services in design
delivery and maintenance to
meet national needs
Results for the year ended 31 December 2012 13
Costainrsquos business model
13
Range of
innovative
services
Skills and
experience
of team
Financial
strength
Track record
of reliable
safe service
delivery
Values and
brand reputation
Advisory amp
Design
Programme
Delivery Operations amp
Maintenance
Natural Resources
RESOURCE ALLOCATION
BUSINESS DEVELOPMENT
Our strategy is focused on
major customers
addressing national needs
Sector lsquouniquersquo
customer aligned
divisional structure
Delivered though longer-
term larger contracts and
extensions incorporating a
broader range of services
Costain Tier One
provider of
Engineering
Solutions
Essential capabilities
and attributes
Over 90 repeat orders
PERFORMANCE MANAGEMENT
Range of
innovative
services
Skills and
experience
of team
Financial
strength
Track record
of reliable
safe service
delivery
Values and
brand reputation
Infrastructure
Results for the year ended 31 December 2012
New divisional structure
14
Natural Resources Infrastructure
Advisory amp Design Programme Delivery Operations amp Maintenance
Water A leading provider of Capital Framework and Maintenance Framework Programmes
under the current AMP 5 arrangements
Waste Delivering major waste schemes across the UK the sector provides integrated and
complete support services
Hydrocarbons and chemicals Developing and implementing solutions for upstream and midstream oil and gas and
chemical sectors in the UK and Abu Dhabi
Nuclear Major frameworks delivered across key strategic assets
Highways Delivering major programmes for the Highways Agency maintenance under the
current MAC contracts and Early Contractor Involvement works
Rail A leading provider of multidisciplinary projects currently delivering major projects
principally focused on transportation hubs most recently at Farringdon Reading and
Paddington
Power Focusing on thermal generation new nuclear offshore wind transmission
distribution and biomass
Airports Delivering programmes of work across airport assets at Heathrow Gatwick and
Manchester
Pre-investment advisory Developing leading engineering solutions to
customersrsquo needs through the appropriate use of
service and technology To provide efficient and
effective advice to customersrsquo challenges
Complex programme advisory Building on the extensive capability across the
business Costain is often employed at pre-
development phase and development phase of
project solutions
Operational excellence advisory Provides customers with engineering consultancy
advice and support across the asset lifecycle
Sustainability and energy advisory Delivering investment with certainty and responsibility
Programme leadership Delivering operational excellence in complex
construction projects
Sustainable delivery Costainrsquos experience of delivering major schemes on
time to budget and to a high level of quality remains a
core capability
Partnering and Collaboration Costain continues to drive efficient delivery of these
projects focusing on its people process and partners
Infrastructure network management Operating assets to drive efficient and effective
utilisation Minimising whole-life cost and
maximising value
Asset management and maintenance The acquisition of Promanex during 2011 delivers
operations and maintenance activity across the
power water and nuclear sectors
Facilities management Supporting customersrsquo needs to focus on their core
business partnering with and developing these to a
successful conclusion
Safety first and compliance culture Delivering maintenance of major assets
Both divisions deliveringhellip
Results for the year ended 31 December 2012 15
ldquoCustomers are demanding increasingly innovative solutions
lsquoEngineering Tomorrowrsquo is the Costain commitment to identifying developing
and implementing innovative solutions to major national needsrdquo
lsquoEngineering Tomorrowrsquo
Results for the year ended 31 December 2012 16
Innovative technology lsquoMariorsquo asset management tool ndash developed as part of the Costain
Start-up initiative and now being sold commercially to customers
Delivering technology
solutions
First technology contract for Welsh Government for the maintenance
of Road Network Communications and Tunnel Systems across
Wales
Addressing the nuclear
legacy
Undertaking RampD into Plasma Vitrification and Graphite Gasification
technologies as potential solutions for addressing the treatment and
storage of intermediate level nuclear waste
Asset enhancement Complex design and management for Centrica for the delivery of its
gas plant at Easington to serve the York field in the North Sea
Managing a complex
live environment
Providing integrated services at London Bridge Station including
design construction logistical and environmental operations whilst
ensuring the station remains operational throughout
Strategic asset
management
Appointed by the Oil amp Pipelines Agency on a 3-year operations and
maintenance contract that now covers the whole of their estate
Consolidation of
services
Awarded the Magnox Framework contract for the delivery of
construction infrastructure and maintenance projects across all ten
of its sites
lsquoEngineering Tomorrowrsquo in action
Results for the year ended 31 December 2012
lsquoEngineering Tomorrowrsquo in action
17
Developing skills and
creating employment
Involvement with The Princersquos Trust now taking on more
apprentices working with young offenders offering a sought-after
graduate programme developing and running skills academies
Good citizenship
Corporate and Social Responsibility ndash lsquoCostain Caresrsquo ndash embodies
our core values recognised by our Business in the Community
Award
Repeat orders Recently secured seventh contract from Crossrail
Enhancing key
resources
Working on the AMP5 framework contracts with Northumbrian
Water Severn Trent Southern Water United Utilities and Welsh
Water
Creating a sustainable
environment
Undertaking RampD on behalf of the Energy Technology Institute to
develop a prototype process for carbon capture
Value for money Deliver of Junctions 10-13 of the M1 in Bedfordshire nearly four
months ahead of schedule
Results for the year ended 31 December 2012
hellipleading to high quality order book
gt Order book of pound24 billion (2011 pound25 billion)
gt pound900 million new contracts and extensions secured during the year
gt In excess of 90 from repeat orders
gt Target cost based contracts now circa 90 of order book value
gt In addition preferred bidder positions of over pound400 million
gt Major customers continuing to invest billions in capital operations and
maintenance contracts to meet essential national needs
gt Ability to focus Group wide resources where demand is highest
gt Bidding activity remains high
18
Results for the year ended 31 December 2012
Good visibility
19
0 200 400 600 800 1000 1200 1400
2015 onwards
2014
2013
Group order book 31 December 2012
0 200 400 600 800 1000 1200 1400
2014 onwards
2013
2012
Group order book 31 December 2011
Total pound24 billion
Total pound25 billion
poundm
poundm
Results for the year ended 31 December 2012
Summary
gt Another strong performance in 2012
gt Driven by continued focus on providing integrated services to meet the
complex requirements of customers
gt Major customers continuing to invest pound billions to meet essential national
needs
gt lsquoEngineering Tomorrowrsquo to enhance and broaden our range of innovative
services
gt Confidence is reflected in recommendation to increase the dividend for sixth
successive year
20
Results for the year ended 31 December 2012
6 March 2013
Appendix
Results for the year ended 31 December 2012
Balance sheet
23
31 December 2012 2011
poundm poundm
Assets
Non current assets 912 952
(excluding pension deficit deferred tax)
Trade and other receivables 1832 1903
Cash 1074 1417
Current assets 2906 3320
Total assets 3818 4272
Current liabilities (3031) (3483)
Total Assets less current liabilities 787 789
Non Current liabilities (69) (84)
(excluding net pension liability)
Pension liability net of deferred tax (400) (397)
Total Equity 318 308
Results for the year ended 31 December 2012 24
Status Invested
Capital
Committed
Capital
Directors
Valuation
Bridgend Sold
Kings Sold
Sirhowy Sold
Kent Schools Sold
Ealing Schools Sold
Shropshire Sold
Kent Elderly Sold
Kingston
3 Shires - Lincolnshire Trfd to
3 Shires - Leicester Pension
3 Shires - Derby Fund
Bradford BSF I 2010
Lewisham BSF I
Bradford BSF II Trfd to
Lewisham BSF II Pension Fund 2012
Aquatrine Operations 10 -
94
Lewisham BSF III Operations 13 -
22
Lewisham BSF IV Construction - 22
34
TOTALS 23 22
151
PFI equity portfolio ndash estimated valuation
75
100
125
150
175
200
100 95 90 85 80 75 70 65 60
Esti
mate
d V
alu
ati
on
(poundm
)
Discount Rates
Valuation of Current Portfolio
The value of the restructured business following the formation of Severn Trent Costain
Results for the year ended 31 December 2012
6 March 2013
Financial Review
Tony Bickerstaff Group Finance Director
Results for the year ended 31 December 2012
Financial summary
gt Revenues of pound9345 million (2011 pound9863 million)
gt Underlying operating profit1 up 4 to pound251 million (2011 pound241 million)
gt Adjusted profit before tax2 increased 16 to pound295 million (2011 pound255million)
gt Adjusted basic earnings per share2 up 33 to 414 pence (2011 311 pence)
reflecting increased profits and a non-recurring tax timing benefit
gt pound1057 million year-end net cash balance (2011 pound1404 million) and average
month-end cash balance of pound1034 million (2011 pound1304 million)
gt Recommended increase in total dividend for the year to 1075p up 75 on
previous year
1 Before amortisation of acquired intangible assets amp employment related acquisition consideration and excludes the one-off costs resulting from pension scheme liability actions 2 Before amortisation of acquired intangible assets amp employment related acquisition consideration and after pound105m profit arising from transfer of PFI assets into Group pension
scheme and pound28m one-off pension scheme liability costs
3
Results for the year ended 31 December 2012
Increased earnings
4
gt Profit growth reflecting successful implementation of strategy focused on major
customers
gt Transition to c 90 of order book value from target cost based contracts with better
risk profile and incentive mechanismshellipin line with major customer requirements
gt Support-service related activities accounting for 29 of 2012 revenues
gt Underlying operating margin increased to 27 (2011 24)
pound183m
pound208m
0
5
10
15
20
25
30
35
2008 2009 2010 2011 2012
Group adj profit
from operations
PFI Sales
pound112m
pound236m pound156m
pound94m
pound27m
pound237m
daggerpound77m
pound20m
pound188m pound182m
pound9863m pound9960m
Results stated before amortisation of acquired intangible assets and employment related acquisition consideration and after pound105m profit arising from transfer of PFI assets into Group pension scheme and pound27m one-off costs resulting from pension scheme liability actions
dagger Net of one-off costs resulting from pension scheme liability management actions
Results for the year ended 31 December 2012
Segmental income statement Year ended 31 December 2012
5
Revenue1
Underlying
operating
profit
JVsinvestment
sales
Profit(loss)
before other
items2
Revenue1
Operating
profit
JVsinvest
ment sales
Profit(loss)
before other
items2
poundm poundm poundm Margin poundm poundm poundm Margin
Infrastructure 5623 261 261 46 4660 102 102 22
Environment 2326 36 09 45 19 3754 161 14 175 47
Profit from PFI Transfer 105 105
Energy amp Process 1377 25 25 18 1434 46 01 47 33
Land Development 19 - (23) (23) 15 - (20) (20)
Central costs (71) (71) (68) (68)
Pension scheme liability
costs - (28) (28) - -
Adjusted profit from operations 9345 251 63 314 9863 241 (05) 236
Net interest (expense)income (19) 19
Adjusted profit before tax 295 255
Adjusted basic earnings per share 414p 311p
1 Including share of joint ventures amp associates
2 Other items - Amortisation of acquired intangibles amp employment related deferred consideration
2012 2011
Results for the year ended 31 December 2012
Net finance (expense)income
6
2012 2011
poundm poundm
Net bank depositloan interestfees (08) 01
IAS19 pension scheme interest
Expected return on scheme assets 263 323
Interest cost on present value of obligations (274) (305)
IAS19 pension scheme net interest (11) 18
Net finance (expense)income (19) 19
Results for the year ended 31 December 2012
Other items and tax
7
Other Items
gt Amortisation of acquired intangible assets - pound17 million (2011 pound09 million)
gt Employment related deferred consideration - pound17 million (2011 pound07 million) gt Accounting standard requires any consideration related to employment to be expensed over the
required service period
gt Promanex ndash 2 years from acquisition date (August 2011)
gt ClerkMaxwell ndash Annual earn-out basis for 201220132014
Tax
gt 2012 effective tax rate at 73 (2011 218) gt Profit on PFI equity transfer to pension scheme tax free
gt Added benefit of RampD tax credit and positive timing differences
gt Normalised effective tax rate expected to be 22 - 24
Results for the year ended 31 December 2012
Cash position
8
2012 2011
poundm poundm
Net cash at beginning of period 1401 1443
Cash from operating activities (231) 348
Cash used by investing activities (51) (348)
Dividends financing (62) (43)
Effect of foreign exchange rate changes 01
Reported net cash 1057 1401
Net cash reconciliation
Cash and cash equivalents at end of period 1074 1417
Less bank overdrafts (17) (16)
Reported net cash 1057 1401
Average month-end cash balance - pound1034m (2011 pound1304m)
Impact on net cash due tohellip
bull Changing profile of business
minus Increased level of support
services activities
minus c 90 of order book value
from target cost based
contracts
minus Reduction in advance
payments
bull Changing industry cash flow trends
bull Timing on one particular
project completion
Average net cash position to
trend lower but will remain
strong
Results for the year ended 31 December 2012
Actions to manage pension obligation
9
gt Actions announced in February 2012 gt Transfer of interest in two PFI investments into the Costain Pension Scheme (lsquoCPSrsquo) at agreed
value of pound203 million - completed on 22 February 2012
gt Resulted in accounting profit on the transfer of pound105 million
gt Implementation of Enhanced Transfer Value (lsquoETVrsquo) and Pension Increase Exchange (lsquoPIErsquo) offers
to the members of the CPS
gt ETV and PIE exercises have resulted in a reduction in the scheme liabilities and assets of
approximately pound35 million and have resulted in a one-off accounting cost of pound28 million expensed
in 2012
gt Another full actuarial valuation of the CPS will be carried out as at 31 March
2013
31 December
2012
31 December
2011
poundm poundm
Fair value of scheme assets 5588 5479
Present value of defined benefit obligations (6107) (6008)
Recognised liability for defined benefit obligations (519) (529)
Deferred tax 119 132
Net pension deficit (400) (397)
Results for the year ended 31 December 2012
Increased dividend
gt Recommended final dividend for sixth successive year
gt Taking total for the year to 1075p a 75 increase on the prior year
gt Payment on 24 May 2013 to shareholders on the register as at 19 April 2013
gt Option to take shares in lieu
10
250p 275p 300p 325p
500p 550p
625p
725p
0
2
4
6
8
10
12
2008 2009 2010 2011 2012
Final
Interim
35p
675p
750p 825p
925p 1000p
Pence
1075p
Business Review
Andrew Wyllie Chief Executive
Results for the year ended 31 December 2012
Costain today
12
Providing world class engineering services in design
delivery and maintenance to
meet national needs
Results for the year ended 31 December 2012 13
Costainrsquos business model
13
Range of
innovative
services
Skills and
experience
of team
Financial
strength
Track record
of reliable
safe service
delivery
Values and
brand reputation
Advisory amp
Design
Programme
Delivery Operations amp
Maintenance
Natural Resources
RESOURCE ALLOCATION
BUSINESS DEVELOPMENT
Our strategy is focused on
major customers
addressing national needs
Sector lsquouniquersquo
customer aligned
divisional structure
Delivered though longer-
term larger contracts and
extensions incorporating a
broader range of services
Costain Tier One
provider of
Engineering
Solutions
Essential capabilities
and attributes
Over 90 repeat orders
PERFORMANCE MANAGEMENT
Range of
innovative
services
Skills and
experience
of team
Financial
strength
Track record
of reliable
safe service
delivery
Values and
brand reputation
Infrastructure
Results for the year ended 31 December 2012
New divisional structure
14
Natural Resources Infrastructure
Advisory amp Design Programme Delivery Operations amp Maintenance
Water A leading provider of Capital Framework and Maintenance Framework Programmes
under the current AMP 5 arrangements
Waste Delivering major waste schemes across the UK the sector provides integrated and
complete support services
Hydrocarbons and chemicals Developing and implementing solutions for upstream and midstream oil and gas and
chemical sectors in the UK and Abu Dhabi
Nuclear Major frameworks delivered across key strategic assets
Highways Delivering major programmes for the Highways Agency maintenance under the
current MAC contracts and Early Contractor Involvement works
Rail A leading provider of multidisciplinary projects currently delivering major projects
principally focused on transportation hubs most recently at Farringdon Reading and
Paddington
Power Focusing on thermal generation new nuclear offshore wind transmission
distribution and biomass
Airports Delivering programmes of work across airport assets at Heathrow Gatwick and
Manchester
Pre-investment advisory Developing leading engineering solutions to
customersrsquo needs through the appropriate use of
service and technology To provide efficient and
effective advice to customersrsquo challenges
Complex programme advisory Building on the extensive capability across the
business Costain is often employed at pre-
development phase and development phase of
project solutions
Operational excellence advisory Provides customers with engineering consultancy
advice and support across the asset lifecycle
Sustainability and energy advisory Delivering investment with certainty and responsibility
Programme leadership Delivering operational excellence in complex
construction projects
Sustainable delivery Costainrsquos experience of delivering major schemes on
time to budget and to a high level of quality remains a
core capability
Partnering and Collaboration Costain continues to drive efficient delivery of these
projects focusing on its people process and partners
Infrastructure network management Operating assets to drive efficient and effective
utilisation Minimising whole-life cost and
maximising value
Asset management and maintenance The acquisition of Promanex during 2011 delivers
operations and maintenance activity across the
power water and nuclear sectors
Facilities management Supporting customersrsquo needs to focus on their core
business partnering with and developing these to a
successful conclusion
Safety first and compliance culture Delivering maintenance of major assets
Both divisions deliveringhellip
Results for the year ended 31 December 2012 15
ldquoCustomers are demanding increasingly innovative solutions
lsquoEngineering Tomorrowrsquo is the Costain commitment to identifying developing
and implementing innovative solutions to major national needsrdquo
lsquoEngineering Tomorrowrsquo
Results for the year ended 31 December 2012 16
Innovative technology lsquoMariorsquo asset management tool ndash developed as part of the Costain
Start-up initiative and now being sold commercially to customers
Delivering technology
solutions
First technology contract for Welsh Government for the maintenance
of Road Network Communications and Tunnel Systems across
Wales
Addressing the nuclear
legacy
Undertaking RampD into Plasma Vitrification and Graphite Gasification
technologies as potential solutions for addressing the treatment and
storage of intermediate level nuclear waste
Asset enhancement Complex design and management for Centrica for the delivery of its
gas plant at Easington to serve the York field in the North Sea
Managing a complex
live environment
Providing integrated services at London Bridge Station including
design construction logistical and environmental operations whilst
ensuring the station remains operational throughout
Strategic asset
management
Appointed by the Oil amp Pipelines Agency on a 3-year operations and
maintenance contract that now covers the whole of their estate
Consolidation of
services
Awarded the Magnox Framework contract for the delivery of
construction infrastructure and maintenance projects across all ten
of its sites
lsquoEngineering Tomorrowrsquo in action
Results for the year ended 31 December 2012
lsquoEngineering Tomorrowrsquo in action
17
Developing skills and
creating employment
Involvement with The Princersquos Trust now taking on more
apprentices working with young offenders offering a sought-after
graduate programme developing and running skills academies
Good citizenship
Corporate and Social Responsibility ndash lsquoCostain Caresrsquo ndash embodies
our core values recognised by our Business in the Community
Award
Repeat orders Recently secured seventh contract from Crossrail
Enhancing key
resources
Working on the AMP5 framework contracts with Northumbrian
Water Severn Trent Southern Water United Utilities and Welsh
Water
Creating a sustainable
environment
Undertaking RampD on behalf of the Energy Technology Institute to
develop a prototype process for carbon capture
Value for money Deliver of Junctions 10-13 of the M1 in Bedfordshire nearly four
months ahead of schedule
Results for the year ended 31 December 2012
hellipleading to high quality order book
gt Order book of pound24 billion (2011 pound25 billion)
gt pound900 million new contracts and extensions secured during the year
gt In excess of 90 from repeat orders
gt Target cost based contracts now circa 90 of order book value
gt In addition preferred bidder positions of over pound400 million
gt Major customers continuing to invest billions in capital operations and
maintenance contracts to meet essential national needs
gt Ability to focus Group wide resources where demand is highest
gt Bidding activity remains high
18
Results for the year ended 31 December 2012
Good visibility
19
0 200 400 600 800 1000 1200 1400
2015 onwards
2014
2013
Group order book 31 December 2012
0 200 400 600 800 1000 1200 1400
2014 onwards
2013
2012
Group order book 31 December 2011
Total pound24 billion
Total pound25 billion
poundm
poundm
Results for the year ended 31 December 2012
Summary
gt Another strong performance in 2012
gt Driven by continued focus on providing integrated services to meet the
complex requirements of customers
gt Major customers continuing to invest pound billions to meet essential national
needs
gt lsquoEngineering Tomorrowrsquo to enhance and broaden our range of innovative
services
gt Confidence is reflected in recommendation to increase the dividend for sixth
successive year
20
Results for the year ended 31 December 2012
6 March 2013
Appendix
Results for the year ended 31 December 2012
Balance sheet
23
31 December 2012 2011
poundm poundm
Assets
Non current assets 912 952
(excluding pension deficit deferred tax)
Trade and other receivables 1832 1903
Cash 1074 1417
Current assets 2906 3320
Total assets 3818 4272
Current liabilities (3031) (3483)
Total Assets less current liabilities 787 789
Non Current liabilities (69) (84)
(excluding net pension liability)
Pension liability net of deferred tax (400) (397)
Total Equity 318 308
Results for the year ended 31 December 2012 24
Status Invested
Capital
Committed
Capital
Directors
Valuation
Bridgend Sold
Kings Sold
Sirhowy Sold
Kent Schools Sold
Ealing Schools Sold
Shropshire Sold
Kent Elderly Sold
Kingston
3 Shires - Lincolnshire Trfd to
3 Shires - Leicester Pension
3 Shires - Derby Fund
Bradford BSF I 2010
Lewisham BSF I
Bradford BSF II Trfd to
Lewisham BSF II Pension Fund 2012
Aquatrine Operations 10 -
94
Lewisham BSF III Operations 13 -
22
Lewisham BSF IV Construction - 22
34
TOTALS 23 22
151
PFI equity portfolio ndash estimated valuation
75
100
125
150
175
200
100 95 90 85 80 75 70 65 60
Esti
mate
d V
alu
ati
on
(poundm
)
Discount Rates
Valuation of Current Portfolio
The value of the restructured business following the formation of Severn Trent Costain
Results for the year ended 31 December 2012
6 March 2013
Results for the year ended 31 December 2012
Financial summary
gt Revenues of pound9345 million (2011 pound9863 million)
gt Underlying operating profit1 up 4 to pound251 million (2011 pound241 million)
gt Adjusted profit before tax2 increased 16 to pound295 million (2011 pound255million)
gt Adjusted basic earnings per share2 up 33 to 414 pence (2011 311 pence)
reflecting increased profits and a non-recurring tax timing benefit
gt pound1057 million year-end net cash balance (2011 pound1404 million) and average
month-end cash balance of pound1034 million (2011 pound1304 million)
gt Recommended increase in total dividend for the year to 1075p up 75 on
previous year
1 Before amortisation of acquired intangible assets amp employment related acquisition consideration and excludes the one-off costs resulting from pension scheme liability actions 2 Before amortisation of acquired intangible assets amp employment related acquisition consideration and after pound105m profit arising from transfer of PFI assets into Group pension
scheme and pound28m one-off pension scheme liability costs
3
Results for the year ended 31 December 2012
Increased earnings
4
gt Profit growth reflecting successful implementation of strategy focused on major
customers
gt Transition to c 90 of order book value from target cost based contracts with better
risk profile and incentive mechanismshellipin line with major customer requirements
gt Support-service related activities accounting for 29 of 2012 revenues
gt Underlying operating margin increased to 27 (2011 24)
pound183m
pound208m
0
5
10
15
20
25
30
35
2008 2009 2010 2011 2012
Group adj profit
from operations
PFI Sales
pound112m
pound236m pound156m
pound94m
pound27m
pound237m
daggerpound77m
pound20m
pound188m pound182m
pound9863m pound9960m
Results stated before amortisation of acquired intangible assets and employment related acquisition consideration and after pound105m profit arising from transfer of PFI assets into Group pension scheme and pound27m one-off costs resulting from pension scheme liability actions
dagger Net of one-off costs resulting from pension scheme liability management actions
Results for the year ended 31 December 2012
Segmental income statement Year ended 31 December 2012
5
Revenue1
Underlying
operating
profit
JVsinvestment
sales
Profit(loss)
before other
items2
Revenue1
Operating
profit
JVsinvest
ment sales
Profit(loss)
before other
items2
poundm poundm poundm Margin poundm poundm poundm Margin
Infrastructure 5623 261 261 46 4660 102 102 22
Environment 2326 36 09 45 19 3754 161 14 175 47
Profit from PFI Transfer 105 105
Energy amp Process 1377 25 25 18 1434 46 01 47 33
Land Development 19 - (23) (23) 15 - (20) (20)
Central costs (71) (71) (68) (68)
Pension scheme liability
costs - (28) (28) - -
Adjusted profit from operations 9345 251 63 314 9863 241 (05) 236
Net interest (expense)income (19) 19
Adjusted profit before tax 295 255
Adjusted basic earnings per share 414p 311p
1 Including share of joint ventures amp associates
2 Other items - Amortisation of acquired intangibles amp employment related deferred consideration
2012 2011
Results for the year ended 31 December 2012
Net finance (expense)income
6
2012 2011
poundm poundm
Net bank depositloan interestfees (08) 01
IAS19 pension scheme interest
Expected return on scheme assets 263 323
Interest cost on present value of obligations (274) (305)
IAS19 pension scheme net interest (11) 18
Net finance (expense)income (19) 19
Results for the year ended 31 December 2012
Other items and tax
7
Other Items
gt Amortisation of acquired intangible assets - pound17 million (2011 pound09 million)
gt Employment related deferred consideration - pound17 million (2011 pound07 million) gt Accounting standard requires any consideration related to employment to be expensed over the
required service period
gt Promanex ndash 2 years from acquisition date (August 2011)
gt ClerkMaxwell ndash Annual earn-out basis for 201220132014
Tax
gt 2012 effective tax rate at 73 (2011 218) gt Profit on PFI equity transfer to pension scheme tax free
gt Added benefit of RampD tax credit and positive timing differences
gt Normalised effective tax rate expected to be 22 - 24
Results for the year ended 31 December 2012
Cash position
8
2012 2011
poundm poundm
Net cash at beginning of period 1401 1443
Cash from operating activities (231) 348
Cash used by investing activities (51) (348)
Dividends financing (62) (43)
Effect of foreign exchange rate changes 01
Reported net cash 1057 1401
Net cash reconciliation
Cash and cash equivalents at end of period 1074 1417
Less bank overdrafts (17) (16)
Reported net cash 1057 1401
Average month-end cash balance - pound1034m (2011 pound1304m)
Impact on net cash due tohellip
bull Changing profile of business
minus Increased level of support
services activities
minus c 90 of order book value
from target cost based
contracts
minus Reduction in advance
payments
bull Changing industry cash flow trends
bull Timing on one particular
project completion
Average net cash position to
trend lower but will remain
strong
Results for the year ended 31 December 2012
Actions to manage pension obligation
9
gt Actions announced in February 2012 gt Transfer of interest in two PFI investments into the Costain Pension Scheme (lsquoCPSrsquo) at agreed
value of pound203 million - completed on 22 February 2012
gt Resulted in accounting profit on the transfer of pound105 million
gt Implementation of Enhanced Transfer Value (lsquoETVrsquo) and Pension Increase Exchange (lsquoPIErsquo) offers
to the members of the CPS
gt ETV and PIE exercises have resulted in a reduction in the scheme liabilities and assets of
approximately pound35 million and have resulted in a one-off accounting cost of pound28 million expensed
in 2012
gt Another full actuarial valuation of the CPS will be carried out as at 31 March
2013
31 December
2012
31 December
2011
poundm poundm
Fair value of scheme assets 5588 5479
Present value of defined benefit obligations (6107) (6008)
Recognised liability for defined benefit obligations (519) (529)
Deferred tax 119 132
Net pension deficit (400) (397)
Results for the year ended 31 December 2012
Increased dividend
gt Recommended final dividend for sixth successive year
gt Taking total for the year to 1075p a 75 increase on the prior year
gt Payment on 24 May 2013 to shareholders on the register as at 19 April 2013
gt Option to take shares in lieu
10
250p 275p 300p 325p
500p 550p
625p
725p
0
2
4
6
8
10
12
2008 2009 2010 2011 2012
Final
Interim
35p
675p
750p 825p
925p 1000p
Pence
1075p
Business Review
Andrew Wyllie Chief Executive
Results for the year ended 31 December 2012
Costain today
12
Providing world class engineering services in design
delivery and maintenance to
meet national needs
Results for the year ended 31 December 2012 13
Costainrsquos business model
13
Range of
innovative
services
Skills and
experience
of team
Financial
strength
Track record
of reliable
safe service
delivery
Values and
brand reputation
Advisory amp
Design
Programme
Delivery Operations amp
Maintenance
Natural Resources
RESOURCE ALLOCATION
BUSINESS DEVELOPMENT
Our strategy is focused on
major customers
addressing national needs
Sector lsquouniquersquo
customer aligned
divisional structure
Delivered though longer-
term larger contracts and
extensions incorporating a
broader range of services
Costain Tier One
provider of
Engineering
Solutions
Essential capabilities
and attributes
Over 90 repeat orders
PERFORMANCE MANAGEMENT
Range of
innovative
services
Skills and
experience
of team
Financial
strength
Track record
of reliable
safe service
delivery
Values and
brand reputation
Infrastructure
Results for the year ended 31 December 2012
New divisional structure
14
Natural Resources Infrastructure
Advisory amp Design Programme Delivery Operations amp Maintenance
Water A leading provider of Capital Framework and Maintenance Framework Programmes
under the current AMP 5 arrangements
Waste Delivering major waste schemes across the UK the sector provides integrated and
complete support services
Hydrocarbons and chemicals Developing and implementing solutions for upstream and midstream oil and gas and
chemical sectors in the UK and Abu Dhabi
Nuclear Major frameworks delivered across key strategic assets
Highways Delivering major programmes for the Highways Agency maintenance under the
current MAC contracts and Early Contractor Involvement works
Rail A leading provider of multidisciplinary projects currently delivering major projects
principally focused on transportation hubs most recently at Farringdon Reading and
Paddington
Power Focusing on thermal generation new nuclear offshore wind transmission
distribution and biomass
Airports Delivering programmes of work across airport assets at Heathrow Gatwick and
Manchester
Pre-investment advisory Developing leading engineering solutions to
customersrsquo needs through the appropriate use of
service and technology To provide efficient and
effective advice to customersrsquo challenges
Complex programme advisory Building on the extensive capability across the
business Costain is often employed at pre-
development phase and development phase of
project solutions
Operational excellence advisory Provides customers with engineering consultancy
advice and support across the asset lifecycle
Sustainability and energy advisory Delivering investment with certainty and responsibility
Programme leadership Delivering operational excellence in complex
construction projects
Sustainable delivery Costainrsquos experience of delivering major schemes on
time to budget and to a high level of quality remains a
core capability
Partnering and Collaboration Costain continues to drive efficient delivery of these
projects focusing on its people process and partners
Infrastructure network management Operating assets to drive efficient and effective
utilisation Minimising whole-life cost and
maximising value
Asset management and maintenance The acquisition of Promanex during 2011 delivers
operations and maintenance activity across the
power water and nuclear sectors
Facilities management Supporting customersrsquo needs to focus on their core
business partnering with and developing these to a
successful conclusion
Safety first and compliance culture Delivering maintenance of major assets
Both divisions deliveringhellip
Results for the year ended 31 December 2012 15
ldquoCustomers are demanding increasingly innovative solutions
lsquoEngineering Tomorrowrsquo is the Costain commitment to identifying developing
and implementing innovative solutions to major national needsrdquo
lsquoEngineering Tomorrowrsquo
Results for the year ended 31 December 2012 16
Innovative technology lsquoMariorsquo asset management tool ndash developed as part of the Costain
Start-up initiative and now being sold commercially to customers
Delivering technology
solutions
First technology contract for Welsh Government for the maintenance
of Road Network Communications and Tunnel Systems across
Wales
Addressing the nuclear
legacy
Undertaking RampD into Plasma Vitrification and Graphite Gasification
technologies as potential solutions for addressing the treatment and
storage of intermediate level nuclear waste
Asset enhancement Complex design and management for Centrica for the delivery of its
gas plant at Easington to serve the York field in the North Sea
Managing a complex
live environment
Providing integrated services at London Bridge Station including
design construction logistical and environmental operations whilst
ensuring the station remains operational throughout
Strategic asset
management
Appointed by the Oil amp Pipelines Agency on a 3-year operations and
maintenance contract that now covers the whole of their estate
Consolidation of
services
Awarded the Magnox Framework contract for the delivery of
construction infrastructure and maintenance projects across all ten
of its sites
lsquoEngineering Tomorrowrsquo in action
Results for the year ended 31 December 2012
lsquoEngineering Tomorrowrsquo in action
17
Developing skills and
creating employment
Involvement with The Princersquos Trust now taking on more
apprentices working with young offenders offering a sought-after
graduate programme developing and running skills academies
Good citizenship
Corporate and Social Responsibility ndash lsquoCostain Caresrsquo ndash embodies
our core values recognised by our Business in the Community
Award
Repeat orders Recently secured seventh contract from Crossrail
Enhancing key
resources
Working on the AMP5 framework contracts with Northumbrian
Water Severn Trent Southern Water United Utilities and Welsh
Water
Creating a sustainable
environment
Undertaking RampD on behalf of the Energy Technology Institute to
develop a prototype process for carbon capture
Value for money Deliver of Junctions 10-13 of the M1 in Bedfordshire nearly four
months ahead of schedule
Results for the year ended 31 December 2012
hellipleading to high quality order book
gt Order book of pound24 billion (2011 pound25 billion)
gt pound900 million new contracts and extensions secured during the year
gt In excess of 90 from repeat orders
gt Target cost based contracts now circa 90 of order book value
gt In addition preferred bidder positions of over pound400 million
gt Major customers continuing to invest billions in capital operations and
maintenance contracts to meet essential national needs
gt Ability to focus Group wide resources where demand is highest
gt Bidding activity remains high
18
Results for the year ended 31 December 2012
Good visibility
19
0 200 400 600 800 1000 1200 1400
2015 onwards
2014
2013
Group order book 31 December 2012
0 200 400 600 800 1000 1200 1400
2014 onwards
2013
2012
Group order book 31 December 2011
Total pound24 billion
Total pound25 billion
poundm
poundm
Results for the year ended 31 December 2012
Summary
gt Another strong performance in 2012
gt Driven by continued focus on providing integrated services to meet the
complex requirements of customers
gt Major customers continuing to invest pound billions to meet essential national
needs
gt lsquoEngineering Tomorrowrsquo to enhance and broaden our range of innovative
services
gt Confidence is reflected in recommendation to increase the dividend for sixth
successive year
20
Results for the year ended 31 December 2012
6 March 2013
Appendix
Results for the year ended 31 December 2012
Balance sheet
23
31 December 2012 2011
poundm poundm
Assets
Non current assets 912 952
(excluding pension deficit deferred tax)
Trade and other receivables 1832 1903
Cash 1074 1417
Current assets 2906 3320
Total assets 3818 4272
Current liabilities (3031) (3483)
Total Assets less current liabilities 787 789
Non Current liabilities (69) (84)
(excluding net pension liability)
Pension liability net of deferred tax (400) (397)
Total Equity 318 308
Results for the year ended 31 December 2012 24
Status Invested
Capital
Committed
Capital
Directors
Valuation
Bridgend Sold
Kings Sold
Sirhowy Sold
Kent Schools Sold
Ealing Schools Sold
Shropshire Sold
Kent Elderly Sold
Kingston
3 Shires - Lincolnshire Trfd to
3 Shires - Leicester Pension
3 Shires - Derby Fund
Bradford BSF I 2010
Lewisham BSF I
Bradford BSF II Trfd to
Lewisham BSF II Pension Fund 2012
Aquatrine Operations 10 -
94
Lewisham BSF III Operations 13 -
22
Lewisham BSF IV Construction - 22
34
TOTALS 23 22
151
PFI equity portfolio ndash estimated valuation
75
100
125
150
175
200
100 95 90 85 80 75 70 65 60
Esti
mate
d V
alu
ati
on
(poundm
)
Discount Rates
Valuation of Current Portfolio
The value of the restructured business following the formation of Severn Trent Costain
Results for the year ended 31 December 2012
6 March 2013
Results for the year ended 31 December 2012
Increased earnings
4
gt Profit growth reflecting successful implementation of strategy focused on major
customers
gt Transition to c 90 of order book value from target cost based contracts with better
risk profile and incentive mechanismshellipin line with major customer requirements
gt Support-service related activities accounting for 29 of 2012 revenues
gt Underlying operating margin increased to 27 (2011 24)
pound183m
pound208m
0
5
10
15
20
25
30
35
2008 2009 2010 2011 2012
Group adj profit
from operations
PFI Sales
pound112m
pound236m pound156m
pound94m
pound27m
pound237m
daggerpound77m
pound20m
pound188m pound182m
pound9863m pound9960m
Results stated before amortisation of acquired intangible assets and employment related acquisition consideration and after pound105m profit arising from transfer of PFI assets into Group pension scheme and pound27m one-off costs resulting from pension scheme liability actions
dagger Net of one-off costs resulting from pension scheme liability management actions
Results for the year ended 31 December 2012
Segmental income statement Year ended 31 December 2012
5
Revenue1
Underlying
operating
profit
JVsinvestment
sales
Profit(loss)
before other
items2
Revenue1
Operating
profit
JVsinvest
ment sales
Profit(loss)
before other
items2
poundm poundm poundm Margin poundm poundm poundm Margin
Infrastructure 5623 261 261 46 4660 102 102 22
Environment 2326 36 09 45 19 3754 161 14 175 47
Profit from PFI Transfer 105 105
Energy amp Process 1377 25 25 18 1434 46 01 47 33
Land Development 19 - (23) (23) 15 - (20) (20)
Central costs (71) (71) (68) (68)
Pension scheme liability
costs - (28) (28) - -
Adjusted profit from operations 9345 251 63 314 9863 241 (05) 236
Net interest (expense)income (19) 19
Adjusted profit before tax 295 255
Adjusted basic earnings per share 414p 311p
1 Including share of joint ventures amp associates
2 Other items - Amortisation of acquired intangibles amp employment related deferred consideration
2012 2011
Results for the year ended 31 December 2012
Net finance (expense)income
6
2012 2011
poundm poundm
Net bank depositloan interestfees (08) 01
IAS19 pension scheme interest
Expected return on scheme assets 263 323
Interest cost on present value of obligations (274) (305)
IAS19 pension scheme net interest (11) 18
Net finance (expense)income (19) 19
Results for the year ended 31 December 2012
Other items and tax
7
Other Items
gt Amortisation of acquired intangible assets - pound17 million (2011 pound09 million)
gt Employment related deferred consideration - pound17 million (2011 pound07 million) gt Accounting standard requires any consideration related to employment to be expensed over the
required service period
gt Promanex ndash 2 years from acquisition date (August 2011)
gt ClerkMaxwell ndash Annual earn-out basis for 201220132014
Tax
gt 2012 effective tax rate at 73 (2011 218) gt Profit on PFI equity transfer to pension scheme tax free
gt Added benefit of RampD tax credit and positive timing differences
gt Normalised effective tax rate expected to be 22 - 24
Results for the year ended 31 December 2012
Cash position
8
2012 2011
poundm poundm
Net cash at beginning of period 1401 1443
Cash from operating activities (231) 348
Cash used by investing activities (51) (348)
Dividends financing (62) (43)
Effect of foreign exchange rate changes 01
Reported net cash 1057 1401
Net cash reconciliation
Cash and cash equivalents at end of period 1074 1417
Less bank overdrafts (17) (16)
Reported net cash 1057 1401
Average month-end cash balance - pound1034m (2011 pound1304m)
Impact on net cash due tohellip
bull Changing profile of business
minus Increased level of support
services activities
minus c 90 of order book value
from target cost based
contracts
minus Reduction in advance
payments
bull Changing industry cash flow trends
bull Timing on one particular
project completion
Average net cash position to
trend lower but will remain
strong
Results for the year ended 31 December 2012
Actions to manage pension obligation
9
gt Actions announced in February 2012 gt Transfer of interest in two PFI investments into the Costain Pension Scheme (lsquoCPSrsquo) at agreed
value of pound203 million - completed on 22 February 2012
gt Resulted in accounting profit on the transfer of pound105 million
gt Implementation of Enhanced Transfer Value (lsquoETVrsquo) and Pension Increase Exchange (lsquoPIErsquo) offers
to the members of the CPS
gt ETV and PIE exercises have resulted in a reduction in the scheme liabilities and assets of
approximately pound35 million and have resulted in a one-off accounting cost of pound28 million expensed
in 2012
gt Another full actuarial valuation of the CPS will be carried out as at 31 March
2013
31 December
2012
31 December
2011
poundm poundm
Fair value of scheme assets 5588 5479
Present value of defined benefit obligations (6107) (6008)
Recognised liability for defined benefit obligations (519) (529)
Deferred tax 119 132
Net pension deficit (400) (397)
Results for the year ended 31 December 2012
Increased dividend
gt Recommended final dividend for sixth successive year
gt Taking total for the year to 1075p a 75 increase on the prior year
gt Payment on 24 May 2013 to shareholders on the register as at 19 April 2013
gt Option to take shares in lieu
10
250p 275p 300p 325p
500p 550p
625p
725p
0
2
4
6
8
10
12
2008 2009 2010 2011 2012
Final
Interim
35p
675p
750p 825p
925p 1000p
Pence
1075p
Business Review
Andrew Wyllie Chief Executive
Results for the year ended 31 December 2012
Costain today
12
Providing world class engineering services in design
delivery and maintenance to
meet national needs
Results for the year ended 31 December 2012 13
Costainrsquos business model
13
Range of
innovative
services
Skills and
experience
of team
Financial
strength
Track record
of reliable
safe service
delivery
Values and
brand reputation
Advisory amp
Design
Programme
Delivery Operations amp
Maintenance
Natural Resources
RESOURCE ALLOCATION
BUSINESS DEVELOPMENT
Our strategy is focused on
major customers
addressing national needs
Sector lsquouniquersquo
customer aligned
divisional structure
Delivered though longer-
term larger contracts and
extensions incorporating a
broader range of services
Costain Tier One
provider of
Engineering
Solutions
Essential capabilities
and attributes
Over 90 repeat orders
PERFORMANCE MANAGEMENT
Range of
innovative
services
Skills and
experience
of team
Financial
strength
Track record
of reliable
safe service
delivery
Values and
brand reputation
Infrastructure
Results for the year ended 31 December 2012
New divisional structure
14
Natural Resources Infrastructure
Advisory amp Design Programme Delivery Operations amp Maintenance
Water A leading provider of Capital Framework and Maintenance Framework Programmes
under the current AMP 5 arrangements
Waste Delivering major waste schemes across the UK the sector provides integrated and
complete support services
Hydrocarbons and chemicals Developing and implementing solutions for upstream and midstream oil and gas and
chemical sectors in the UK and Abu Dhabi
Nuclear Major frameworks delivered across key strategic assets
Highways Delivering major programmes for the Highways Agency maintenance under the
current MAC contracts and Early Contractor Involvement works
Rail A leading provider of multidisciplinary projects currently delivering major projects
principally focused on transportation hubs most recently at Farringdon Reading and
Paddington
Power Focusing on thermal generation new nuclear offshore wind transmission
distribution and biomass
Airports Delivering programmes of work across airport assets at Heathrow Gatwick and
Manchester
Pre-investment advisory Developing leading engineering solutions to
customersrsquo needs through the appropriate use of
service and technology To provide efficient and
effective advice to customersrsquo challenges
Complex programme advisory Building on the extensive capability across the
business Costain is often employed at pre-
development phase and development phase of
project solutions
Operational excellence advisory Provides customers with engineering consultancy
advice and support across the asset lifecycle
Sustainability and energy advisory Delivering investment with certainty and responsibility
Programme leadership Delivering operational excellence in complex
construction projects
Sustainable delivery Costainrsquos experience of delivering major schemes on
time to budget and to a high level of quality remains a
core capability
Partnering and Collaboration Costain continues to drive efficient delivery of these
projects focusing on its people process and partners
Infrastructure network management Operating assets to drive efficient and effective
utilisation Minimising whole-life cost and
maximising value
Asset management and maintenance The acquisition of Promanex during 2011 delivers
operations and maintenance activity across the
power water and nuclear sectors
Facilities management Supporting customersrsquo needs to focus on their core
business partnering with and developing these to a
successful conclusion
Safety first and compliance culture Delivering maintenance of major assets
Both divisions deliveringhellip
Results for the year ended 31 December 2012 15
ldquoCustomers are demanding increasingly innovative solutions
lsquoEngineering Tomorrowrsquo is the Costain commitment to identifying developing
and implementing innovative solutions to major national needsrdquo
lsquoEngineering Tomorrowrsquo
Results for the year ended 31 December 2012 16
Innovative technology lsquoMariorsquo asset management tool ndash developed as part of the Costain
Start-up initiative and now being sold commercially to customers
Delivering technology
solutions
First technology contract for Welsh Government for the maintenance
of Road Network Communications and Tunnel Systems across
Wales
Addressing the nuclear
legacy
Undertaking RampD into Plasma Vitrification and Graphite Gasification
technologies as potential solutions for addressing the treatment and
storage of intermediate level nuclear waste
Asset enhancement Complex design and management for Centrica for the delivery of its
gas plant at Easington to serve the York field in the North Sea
Managing a complex
live environment
Providing integrated services at London Bridge Station including
design construction logistical and environmental operations whilst
ensuring the station remains operational throughout
Strategic asset
management
Appointed by the Oil amp Pipelines Agency on a 3-year operations and
maintenance contract that now covers the whole of their estate
Consolidation of
services
Awarded the Magnox Framework contract for the delivery of
construction infrastructure and maintenance projects across all ten
of its sites
lsquoEngineering Tomorrowrsquo in action
Results for the year ended 31 December 2012
lsquoEngineering Tomorrowrsquo in action
17
Developing skills and
creating employment
Involvement with The Princersquos Trust now taking on more
apprentices working with young offenders offering a sought-after
graduate programme developing and running skills academies
Good citizenship
Corporate and Social Responsibility ndash lsquoCostain Caresrsquo ndash embodies
our core values recognised by our Business in the Community
Award
Repeat orders Recently secured seventh contract from Crossrail
Enhancing key
resources
Working on the AMP5 framework contracts with Northumbrian
Water Severn Trent Southern Water United Utilities and Welsh
Water
Creating a sustainable
environment
Undertaking RampD on behalf of the Energy Technology Institute to
develop a prototype process for carbon capture
Value for money Deliver of Junctions 10-13 of the M1 in Bedfordshire nearly four
months ahead of schedule
Results for the year ended 31 December 2012
hellipleading to high quality order book
gt Order book of pound24 billion (2011 pound25 billion)
gt pound900 million new contracts and extensions secured during the year
gt In excess of 90 from repeat orders
gt Target cost based contracts now circa 90 of order book value
gt In addition preferred bidder positions of over pound400 million
gt Major customers continuing to invest billions in capital operations and
maintenance contracts to meet essential national needs
gt Ability to focus Group wide resources where demand is highest
gt Bidding activity remains high
18
Results for the year ended 31 December 2012
Good visibility
19
0 200 400 600 800 1000 1200 1400
2015 onwards
2014
2013
Group order book 31 December 2012
0 200 400 600 800 1000 1200 1400
2014 onwards
2013
2012
Group order book 31 December 2011
Total pound24 billion
Total pound25 billion
poundm
poundm
Results for the year ended 31 December 2012
Summary
gt Another strong performance in 2012
gt Driven by continued focus on providing integrated services to meet the
complex requirements of customers
gt Major customers continuing to invest pound billions to meet essential national
needs
gt lsquoEngineering Tomorrowrsquo to enhance and broaden our range of innovative
services
gt Confidence is reflected in recommendation to increase the dividend for sixth
successive year
20
Results for the year ended 31 December 2012
6 March 2013
Appendix
Results for the year ended 31 December 2012
Balance sheet
23
31 December 2012 2011
poundm poundm
Assets
Non current assets 912 952
(excluding pension deficit deferred tax)
Trade and other receivables 1832 1903
Cash 1074 1417
Current assets 2906 3320
Total assets 3818 4272
Current liabilities (3031) (3483)
Total Assets less current liabilities 787 789
Non Current liabilities (69) (84)
(excluding net pension liability)
Pension liability net of deferred tax (400) (397)
Total Equity 318 308
Results for the year ended 31 December 2012 24
Status Invested
Capital
Committed
Capital
Directors
Valuation
Bridgend Sold
Kings Sold
Sirhowy Sold
Kent Schools Sold
Ealing Schools Sold
Shropshire Sold
Kent Elderly Sold
Kingston
3 Shires - Lincolnshire Trfd to
3 Shires - Leicester Pension
3 Shires - Derby Fund
Bradford BSF I 2010
Lewisham BSF I
Bradford BSF II Trfd to
Lewisham BSF II Pension Fund 2012
Aquatrine Operations 10 -
94
Lewisham BSF III Operations 13 -
22
Lewisham BSF IV Construction - 22
34
TOTALS 23 22
151
PFI equity portfolio ndash estimated valuation
75
100
125
150
175
200
100 95 90 85 80 75 70 65 60
Esti
mate
d V
alu
ati
on
(poundm
)
Discount Rates
Valuation of Current Portfolio
The value of the restructured business following the formation of Severn Trent Costain
Results for the year ended 31 December 2012
6 March 2013
Results for the year ended 31 December 2012
Segmental income statement Year ended 31 December 2012
5
Revenue1
Underlying
operating
profit
JVsinvestment
sales
Profit(loss)
before other
items2
Revenue1
Operating
profit
JVsinvest
ment sales
Profit(loss)
before other
items2
poundm poundm poundm Margin poundm poundm poundm Margin
Infrastructure 5623 261 261 46 4660 102 102 22
Environment 2326 36 09 45 19 3754 161 14 175 47
Profit from PFI Transfer 105 105
Energy amp Process 1377 25 25 18 1434 46 01 47 33
Land Development 19 - (23) (23) 15 - (20) (20)
Central costs (71) (71) (68) (68)
Pension scheme liability
costs - (28) (28) - -
Adjusted profit from operations 9345 251 63 314 9863 241 (05) 236
Net interest (expense)income (19) 19
Adjusted profit before tax 295 255
Adjusted basic earnings per share 414p 311p
1 Including share of joint ventures amp associates
2 Other items - Amortisation of acquired intangibles amp employment related deferred consideration
2012 2011
Results for the year ended 31 December 2012
Net finance (expense)income
6
2012 2011
poundm poundm
Net bank depositloan interestfees (08) 01
IAS19 pension scheme interest
Expected return on scheme assets 263 323
Interest cost on present value of obligations (274) (305)
IAS19 pension scheme net interest (11) 18
Net finance (expense)income (19) 19
Results for the year ended 31 December 2012
Other items and tax
7
Other Items
gt Amortisation of acquired intangible assets - pound17 million (2011 pound09 million)
gt Employment related deferred consideration - pound17 million (2011 pound07 million) gt Accounting standard requires any consideration related to employment to be expensed over the
required service period
gt Promanex ndash 2 years from acquisition date (August 2011)
gt ClerkMaxwell ndash Annual earn-out basis for 201220132014
Tax
gt 2012 effective tax rate at 73 (2011 218) gt Profit on PFI equity transfer to pension scheme tax free
gt Added benefit of RampD tax credit and positive timing differences
gt Normalised effective tax rate expected to be 22 - 24
Results for the year ended 31 December 2012
Cash position
8
2012 2011
poundm poundm
Net cash at beginning of period 1401 1443
Cash from operating activities (231) 348
Cash used by investing activities (51) (348)
Dividends financing (62) (43)
Effect of foreign exchange rate changes 01
Reported net cash 1057 1401
Net cash reconciliation
Cash and cash equivalents at end of period 1074 1417
Less bank overdrafts (17) (16)
Reported net cash 1057 1401
Average month-end cash balance - pound1034m (2011 pound1304m)
Impact on net cash due tohellip
bull Changing profile of business
minus Increased level of support
services activities
minus c 90 of order book value
from target cost based
contracts
minus Reduction in advance
payments
bull Changing industry cash flow trends
bull Timing on one particular
project completion
Average net cash position to
trend lower but will remain
strong
Results for the year ended 31 December 2012
Actions to manage pension obligation
9
gt Actions announced in February 2012 gt Transfer of interest in two PFI investments into the Costain Pension Scheme (lsquoCPSrsquo) at agreed
value of pound203 million - completed on 22 February 2012
gt Resulted in accounting profit on the transfer of pound105 million
gt Implementation of Enhanced Transfer Value (lsquoETVrsquo) and Pension Increase Exchange (lsquoPIErsquo) offers
to the members of the CPS
gt ETV and PIE exercises have resulted in a reduction in the scheme liabilities and assets of
approximately pound35 million and have resulted in a one-off accounting cost of pound28 million expensed
in 2012
gt Another full actuarial valuation of the CPS will be carried out as at 31 March
2013
31 December
2012
31 December
2011
poundm poundm
Fair value of scheme assets 5588 5479
Present value of defined benefit obligations (6107) (6008)
Recognised liability for defined benefit obligations (519) (529)
Deferred tax 119 132
Net pension deficit (400) (397)
Results for the year ended 31 December 2012
Increased dividend
gt Recommended final dividend for sixth successive year
gt Taking total for the year to 1075p a 75 increase on the prior year
gt Payment on 24 May 2013 to shareholders on the register as at 19 April 2013
gt Option to take shares in lieu
10
250p 275p 300p 325p
500p 550p
625p
725p
0
2
4
6
8
10
12
2008 2009 2010 2011 2012
Final
Interim
35p
675p
750p 825p
925p 1000p
Pence
1075p
Business Review
Andrew Wyllie Chief Executive
Results for the year ended 31 December 2012
Costain today
12
Providing world class engineering services in design
delivery and maintenance to
meet national needs
Results for the year ended 31 December 2012 13
Costainrsquos business model
13
Range of
innovative
services
Skills and
experience
of team
Financial
strength
Track record
of reliable
safe service
delivery
Values and
brand reputation
Advisory amp
Design
Programme
Delivery Operations amp
Maintenance
Natural Resources
RESOURCE ALLOCATION
BUSINESS DEVELOPMENT
Our strategy is focused on
major customers
addressing national needs
Sector lsquouniquersquo
customer aligned
divisional structure
Delivered though longer-
term larger contracts and
extensions incorporating a
broader range of services
Costain Tier One
provider of
Engineering
Solutions
Essential capabilities
and attributes
Over 90 repeat orders
PERFORMANCE MANAGEMENT
Range of
innovative
services
Skills and
experience
of team
Financial
strength
Track record
of reliable
safe service
delivery
Values and
brand reputation
Infrastructure
Results for the year ended 31 December 2012
New divisional structure
14
Natural Resources Infrastructure
Advisory amp Design Programme Delivery Operations amp Maintenance
Water A leading provider of Capital Framework and Maintenance Framework Programmes
under the current AMP 5 arrangements
Waste Delivering major waste schemes across the UK the sector provides integrated and
complete support services
Hydrocarbons and chemicals Developing and implementing solutions for upstream and midstream oil and gas and
chemical sectors in the UK and Abu Dhabi
Nuclear Major frameworks delivered across key strategic assets
Highways Delivering major programmes for the Highways Agency maintenance under the
current MAC contracts and Early Contractor Involvement works
Rail A leading provider of multidisciplinary projects currently delivering major projects
principally focused on transportation hubs most recently at Farringdon Reading and
Paddington
Power Focusing on thermal generation new nuclear offshore wind transmission
distribution and biomass
Airports Delivering programmes of work across airport assets at Heathrow Gatwick and
Manchester
Pre-investment advisory Developing leading engineering solutions to
customersrsquo needs through the appropriate use of
service and technology To provide efficient and
effective advice to customersrsquo challenges
Complex programme advisory Building on the extensive capability across the
business Costain is often employed at pre-
development phase and development phase of
project solutions
Operational excellence advisory Provides customers with engineering consultancy
advice and support across the asset lifecycle
Sustainability and energy advisory Delivering investment with certainty and responsibility
Programme leadership Delivering operational excellence in complex
construction projects
Sustainable delivery Costainrsquos experience of delivering major schemes on
time to budget and to a high level of quality remains a
core capability
Partnering and Collaboration Costain continues to drive efficient delivery of these
projects focusing on its people process and partners
Infrastructure network management Operating assets to drive efficient and effective
utilisation Minimising whole-life cost and
maximising value
Asset management and maintenance The acquisition of Promanex during 2011 delivers
operations and maintenance activity across the
power water and nuclear sectors
Facilities management Supporting customersrsquo needs to focus on their core
business partnering with and developing these to a
successful conclusion
Safety first and compliance culture Delivering maintenance of major assets
Both divisions deliveringhellip
Results for the year ended 31 December 2012 15
ldquoCustomers are demanding increasingly innovative solutions
lsquoEngineering Tomorrowrsquo is the Costain commitment to identifying developing
and implementing innovative solutions to major national needsrdquo
lsquoEngineering Tomorrowrsquo
Results for the year ended 31 December 2012 16
Innovative technology lsquoMariorsquo asset management tool ndash developed as part of the Costain
Start-up initiative and now being sold commercially to customers
Delivering technology
solutions
First technology contract for Welsh Government for the maintenance
of Road Network Communications and Tunnel Systems across
Wales
Addressing the nuclear
legacy
Undertaking RampD into Plasma Vitrification and Graphite Gasification
technologies as potential solutions for addressing the treatment and
storage of intermediate level nuclear waste
Asset enhancement Complex design and management for Centrica for the delivery of its
gas plant at Easington to serve the York field in the North Sea
Managing a complex
live environment
Providing integrated services at London Bridge Station including
design construction logistical and environmental operations whilst
ensuring the station remains operational throughout
Strategic asset
management
Appointed by the Oil amp Pipelines Agency on a 3-year operations and
maintenance contract that now covers the whole of their estate
Consolidation of
services
Awarded the Magnox Framework contract for the delivery of
construction infrastructure and maintenance projects across all ten
of its sites
lsquoEngineering Tomorrowrsquo in action
Results for the year ended 31 December 2012
lsquoEngineering Tomorrowrsquo in action
17
Developing skills and
creating employment
Involvement with The Princersquos Trust now taking on more
apprentices working with young offenders offering a sought-after
graduate programme developing and running skills academies
Good citizenship
Corporate and Social Responsibility ndash lsquoCostain Caresrsquo ndash embodies
our core values recognised by our Business in the Community
Award
Repeat orders Recently secured seventh contract from Crossrail
Enhancing key
resources
Working on the AMP5 framework contracts with Northumbrian
Water Severn Trent Southern Water United Utilities and Welsh
Water
Creating a sustainable
environment
Undertaking RampD on behalf of the Energy Technology Institute to
develop a prototype process for carbon capture
Value for money Deliver of Junctions 10-13 of the M1 in Bedfordshire nearly four
months ahead of schedule
Results for the year ended 31 December 2012
hellipleading to high quality order book
gt Order book of pound24 billion (2011 pound25 billion)
gt pound900 million new contracts and extensions secured during the year
gt In excess of 90 from repeat orders
gt Target cost based contracts now circa 90 of order book value
gt In addition preferred bidder positions of over pound400 million
gt Major customers continuing to invest billions in capital operations and
maintenance contracts to meet essential national needs
gt Ability to focus Group wide resources where demand is highest
gt Bidding activity remains high
18
Results for the year ended 31 December 2012
Good visibility
19
0 200 400 600 800 1000 1200 1400
2015 onwards
2014
2013
Group order book 31 December 2012
0 200 400 600 800 1000 1200 1400
2014 onwards
2013
2012
Group order book 31 December 2011
Total pound24 billion
Total pound25 billion
poundm
poundm
Results for the year ended 31 December 2012
Summary
gt Another strong performance in 2012
gt Driven by continued focus on providing integrated services to meet the
complex requirements of customers
gt Major customers continuing to invest pound billions to meet essential national
needs
gt lsquoEngineering Tomorrowrsquo to enhance and broaden our range of innovative
services
gt Confidence is reflected in recommendation to increase the dividend for sixth
successive year
20
Results for the year ended 31 December 2012
6 March 2013
Appendix
Results for the year ended 31 December 2012
Balance sheet
23
31 December 2012 2011
poundm poundm
Assets
Non current assets 912 952
(excluding pension deficit deferred tax)
Trade and other receivables 1832 1903
Cash 1074 1417
Current assets 2906 3320
Total assets 3818 4272
Current liabilities (3031) (3483)
Total Assets less current liabilities 787 789
Non Current liabilities (69) (84)
(excluding net pension liability)
Pension liability net of deferred tax (400) (397)
Total Equity 318 308
Results for the year ended 31 December 2012 24
Status Invested
Capital
Committed
Capital
Directors
Valuation
Bridgend Sold
Kings Sold
Sirhowy Sold
Kent Schools Sold
Ealing Schools Sold
Shropshire Sold
Kent Elderly Sold
Kingston
3 Shires - Lincolnshire Trfd to
3 Shires - Leicester Pension
3 Shires - Derby Fund
Bradford BSF I 2010
Lewisham BSF I
Bradford BSF II Trfd to
Lewisham BSF II Pension Fund 2012
Aquatrine Operations 10 -
94
Lewisham BSF III Operations 13 -
22
Lewisham BSF IV Construction - 22
34
TOTALS 23 22
151
PFI equity portfolio ndash estimated valuation
75
100
125
150
175
200
100 95 90 85 80 75 70 65 60
Esti
mate
d V
alu
ati
on
(poundm
)
Discount Rates
Valuation of Current Portfolio
The value of the restructured business following the formation of Severn Trent Costain
Results for the year ended 31 December 2012
6 March 2013
Results for the year ended 31 December 2012
Net finance (expense)income
6
2012 2011
poundm poundm
Net bank depositloan interestfees (08) 01
IAS19 pension scheme interest
Expected return on scheme assets 263 323
Interest cost on present value of obligations (274) (305)
IAS19 pension scheme net interest (11) 18
Net finance (expense)income (19) 19
Results for the year ended 31 December 2012
Other items and tax
7
Other Items
gt Amortisation of acquired intangible assets - pound17 million (2011 pound09 million)
gt Employment related deferred consideration - pound17 million (2011 pound07 million) gt Accounting standard requires any consideration related to employment to be expensed over the
required service period
gt Promanex ndash 2 years from acquisition date (August 2011)
gt ClerkMaxwell ndash Annual earn-out basis for 201220132014
Tax
gt 2012 effective tax rate at 73 (2011 218) gt Profit on PFI equity transfer to pension scheme tax free
gt Added benefit of RampD tax credit and positive timing differences
gt Normalised effective tax rate expected to be 22 - 24
Results for the year ended 31 December 2012
Cash position
8
2012 2011
poundm poundm
Net cash at beginning of period 1401 1443
Cash from operating activities (231) 348
Cash used by investing activities (51) (348)
Dividends financing (62) (43)
Effect of foreign exchange rate changes 01
Reported net cash 1057 1401
Net cash reconciliation
Cash and cash equivalents at end of period 1074 1417
Less bank overdrafts (17) (16)
Reported net cash 1057 1401
Average month-end cash balance - pound1034m (2011 pound1304m)
Impact on net cash due tohellip
bull Changing profile of business
minus Increased level of support
services activities
minus c 90 of order book value
from target cost based
contracts
minus Reduction in advance
payments
bull Changing industry cash flow trends
bull Timing on one particular
project completion
Average net cash position to
trend lower but will remain
strong
Results for the year ended 31 December 2012
Actions to manage pension obligation
9
gt Actions announced in February 2012 gt Transfer of interest in two PFI investments into the Costain Pension Scheme (lsquoCPSrsquo) at agreed
value of pound203 million - completed on 22 February 2012
gt Resulted in accounting profit on the transfer of pound105 million
gt Implementation of Enhanced Transfer Value (lsquoETVrsquo) and Pension Increase Exchange (lsquoPIErsquo) offers
to the members of the CPS
gt ETV and PIE exercises have resulted in a reduction in the scheme liabilities and assets of
approximately pound35 million and have resulted in a one-off accounting cost of pound28 million expensed
in 2012
gt Another full actuarial valuation of the CPS will be carried out as at 31 March
2013
31 December
2012
31 December
2011
poundm poundm
Fair value of scheme assets 5588 5479
Present value of defined benefit obligations (6107) (6008)
Recognised liability for defined benefit obligations (519) (529)
Deferred tax 119 132
Net pension deficit (400) (397)
Results for the year ended 31 December 2012
Increased dividend
gt Recommended final dividend for sixth successive year
gt Taking total for the year to 1075p a 75 increase on the prior year
gt Payment on 24 May 2013 to shareholders on the register as at 19 April 2013
gt Option to take shares in lieu
10
250p 275p 300p 325p
500p 550p
625p
725p
0
2
4
6
8
10
12
2008 2009 2010 2011 2012
Final
Interim
35p
675p
750p 825p
925p 1000p
Pence
1075p
Business Review
Andrew Wyllie Chief Executive
Results for the year ended 31 December 2012
Costain today
12
Providing world class engineering services in design
delivery and maintenance to
meet national needs
Results for the year ended 31 December 2012 13
Costainrsquos business model
13
Range of
innovative
services
Skills and
experience
of team
Financial
strength
Track record
of reliable
safe service
delivery
Values and
brand reputation
Advisory amp
Design
Programme
Delivery Operations amp
Maintenance
Natural Resources
RESOURCE ALLOCATION
BUSINESS DEVELOPMENT
Our strategy is focused on
major customers
addressing national needs
Sector lsquouniquersquo
customer aligned
divisional structure
Delivered though longer-
term larger contracts and
extensions incorporating a
broader range of services
Costain Tier One
provider of
Engineering
Solutions
Essential capabilities
and attributes
Over 90 repeat orders
PERFORMANCE MANAGEMENT
Range of
innovative
services
Skills and
experience
of team
Financial
strength
Track record
of reliable
safe service
delivery
Values and
brand reputation
Infrastructure
Results for the year ended 31 December 2012
New divisional structure
14
Natural Resources Infrastructure
Advisory amp Design Programme Delivery Operations amp Maintenance
Water A leading provider of Capital Framework and Maintenance Framework Programmes
under the current AMP 5 arrangements
Waste Delivering major waste schemes across the UK the sector provides integrated and
complete support services
Hydrocarbons and chemicals Developing and implementing solutions for upstream and midstream oil and gas and
chemical sectors in the UK and Abu Dhabi
Nuclear Major frameworks delivered across key strategic assets
Highways Delivering major programmes for the Highways Agency maintenance under the
current MAC contracts and Early Contractor Involvement works
Rail A leading provider of multidisciplinary projects currently delivering major projects
principally focused on transportation hubs most recently at Farringdon Reading and
Paddington
Power Focusing on thermal generation new nuclear offshore wind transmission
distribution and biomass
Airports Delivering programmes of work across airport assets at Heathrow Gatwick and
Manchester
Pre-investment advisory Developing leading engineering solutions to
customersrsquo needs through the appropriate use of
service and technology To provide efficient and
effective advice to customersrsquo challenges
Complex programme advisory Building on the extensive capability across the
business Costain is often employed at pre-
development phase and development phase of
project solutions
Operational excellence advisory Provides customers with engineering consultancy
advice and support across the asset lifecycle
Sustainability and energy advisory Delivering investment with certainty and responsibility
Programme leadership Delivering operational excellence in complex
construction projects
Sustainable delivery Costainrsquos experience of delivering major schemes on
time to budget and to a high level of quality remains a
core capability
Partnering and Collaboration Costain continues to drive efficient delivery of these
projects focusing on its people process and partners
Infrastructure network management Operating assets to drive efficient and effective
utilisation Minimising whole-life cost and
maximising value
Asset management and maintenance The acquisition of Promanex during 2011 delivers
operations and maintenance activity across the
power water and nuclear sectors
Facilities management Supporting customersrsquo needs to focus on their core
business partnering with and developing these to a
successful conclusion
Safety first and compliance culture Delivering maintenance of major assets
Both divisions deliveringhellip
Results for the year ended 31 December 2012 15
ldquoCustomers are demanding increasingly innovative solutions
lsquoEngineering Tomorrowrsquo is the Costain commitment to identifying developing
and implementing innovative solutions to major national needsrdquo
lsquoEngineering Tomorrowrsquo
Results for the year ended 31 December 2012 16
Innovative technology lsquoMariorsquo asset management tool ndash developed as part of the Costain
Start-up initiative and now being sold commercially to customers
Delivering technology
solutions
First technology contract for Welsh Government for the maintenance
of Road Network Communications and Tunnel Systems across
Wales
Addressing the nuclear
legacy
Undertaking RampD into Plasma Vitrification and Graphite Gasification
technologies as potential solutions for addressing the treatment and
storage of intermediate level nuclear waste
Asset enhancement Complex design and management for Centrica for the delivery of its
gas plant at Easington to serve the York field in the North Sea
Managing a complex
live environment
Providing integrated services at London Bridge Station including
design construction logistical and environmental operations whilst
ensuring the station remains operational throughout
Strategic asset
management
Appointed by the Oil amp Pipelines Agency on a 3-year operations and
maintenance contract that now covers the whole of their estate
Consolidation of
services
Awarded the Magnox Framework contract for the delivery of
construction infrastructure and maintenance projects across all ten
of its sites
lsquoEngineering Tomorrowrsquo in action
Results for the year ended 31 December 2012
lsquoEngineering Tomorrowrsquo in action
17
Developing skills and
creating employment
Involvement with The Princersquos Trust now taking on more
apprentices working with young offenders offering a sought-after
graduate programme developing and running skills academies
Good citizenship
Corporate and Social Responsibility ndash lsquoCostain Caresrsquo ndash embodies
our core values recognised by our Business in the Community
Award
Repeat orders Recently secured seventh contract from Crossrail
Enhancing key
resources
Working on the AMP5 framework contracts with Northumbrian
Water Severn Trent Southern Water United Utilities and Welsh
Water
Creating a sustainable
environment
Undertaking RampD on behalf of the Energy Technology Institute to
develop a prototype process for carbon capture
Value for money Deliver of Junctions 10-13 of the M1 in Bedfordshire nearly four
months ahead of schedule
Results for the year ended 31 December 2012
hellipleading to high quality order book
gt Order book of pound24 billion (2011 pound25 billion)
gt pound900 million new contracts and extensions secured during the year
gt In excess of 90 from repeat orders
gt Target cost based contracts now circa 90 of order book value
gt In addition preferred bidder positions of over pound400 million
gt Major customers continuing to invest billions in capital operations and
maintenance contracts to meet essential national needs
gt Ability to focus Group wide resources where demand is highest
gt Bidding activity remains high
18
Results for the year ended 31 December 2012
Good visibility
19
0 200 400 600 800 1000 1200 1400
2015 onwards
2014
2013
Group order book 31 December 2012
0 200 400 600 800 1000 1200 1400
2014 onwards
2013
2012
Group order book 31 December 2011
Total pound24 billion
Total pound25 billion
poundm
poundm
Results for the year ended 31 December 2012
Summary
gt Another strong performance in 2012
gt Driven by continued focus on providing integrated services to meet the
complex requirements of customers
gt Major customers continuing to invest pound billions to meet essential national
needs
gt lsquoEngineering Tomorrowrsquo to enhance and broaden our range of innovative
services
gt Confidence is reflected in recommendation to increase the dividend for sixth
successive year
20
Results for the year ended 31 December 2012
6 March 2013
Appendix
Results for the year ended 31 December 2012
Balance sheet
23
31 December 2012 2011
poundm poundm
Assets
Non current assets 912 952
(excluding pension deficit deferred tax)
Trade and other receivables 1832 1903
Cash 1074 1417
Current assets 2906 3320
Total assets 3818 4272
Current liabilities (3031) (3483)
Total Assets less current liabilities 787 789
Non Current liabilities (69) (84)
(excluding net pension liability)
Pension liability net of deferred tax (400) (397)
Total Equity 318 308
Results for the year ended 31 December 2012 24
Status Invested
Capital
Committed
Capital
Directors
Valuation
Bridgend Sold
Kings Sold
Sirhowy Sold
Kent Schools Sold
Ealing Schools Sold
Shropshire Sold
Kent Elderly Sold
Kingston
3 Shires - Lincolnshire Trfd to
3 Shires - Leicester Pension
3 Shires - Derby Fund
Bradford BSF I 2010
Lewisham BSF I
Bradford BSF II Trfd to
Lewisham BSF II Pension Fund 2012
Aquatrine Operations 10 -
94
Lewisham BSF III Operations 13 -
22
Lewisham BSF IV Construction - 22
34
TOTALS 23 22
151
PFI equity portfolio ndash estimated valuation
75
100
125
150
175
200
100 95 90 85 80 75 70 65 60
Esti
mate
d V
alu
ati
on
(poundm
)
Discount Rates
Valuation of Current Portfolio
The value of the restructured business following the formation of Severn Trent Costain
Results for the year ended 31 December 2012
6 March 2013
Results for the year ended 31 December 2012
Other items and tax
7
Other Items
gt Amortisation of acquired intangible assets - pound17 million (2011 pound09 million)
gt Employment related deferred consideration - pound17 million (2011 pound07 million) gt Accounting standard requires any consideration related to employment to be expensed over the
required service period
gt Promanex ndash 2 years from acquisition date (August 2011)
gt ClerkMaxwell ndash Annual earn-out basis for 201220132014
Tax
gt 2012 effective tax rate at 73 (2011 218) gt Profit on PFI equity transfer to pension scheme tax free
gt Added benefit of RampD tax credit and positive timing differences
gt Normalised effective tax rate expected to be 22 - 24
Results for the year ended 31 December 2012
Cash position
8
2012 2011
poundm poundm
Net cash at beginning of period 1401 1443
Cash from operating activities (231) 348
Cash used by investing activities (51) (348)
Dividends financing (62) (43)
Effect of foreign exchange rate changes 01
Reported net cash 1057 1401
Net cash reconciliation
Cash and cash equivalents at end of period 1074 1417
Less bank overdrafts (17) (16)
Reported net cash 1057 1401
Average month-end cash balance - pound1034m (2011 pound1304m)
Impact on net cash due tohellip
bull Changing profile of business
minus Increased level of support
services activities
minus c 90 of order book value
from target cost based
contracts
minus Reduction in advance
payments
bull Changing industry cash flow trends
bull Timing on one particular
project completion
Average net cash position to
trend lower but will remain
strong
Results for the year ended 31 December 2012
Actions to manage pension obligation
9
gt Actions announced in February 2012 gt Transfer of interest in two PFI investments into the Costain Pension Scheme (lsquoCPSrsquo) at agreed
value of pound203 million - completed on 22 February 2012
gt Resulted in accounting profit on the transfer of pound105 million
gt Implementation of Enhanced Transfer Value (lsquoETVrsquo) and Pension Increase Exchange (lsquoPIErsquo) offers
to the members of the CPS
gt ETV and PIE exercises have resulted in a reduction in the scheme liabilities and assets of
approximately pound35 million and have resulted in a one-off accounting cost of pound28 million expensed
in 2012
gt Another full actuarial valuation of the CPS will be carried out as at 31 March
2013
31 December
2012
31 December
2011
poundm poundm
Fair value of scheme assets 5588 5479
Present value of defined benefit obligations (6107) (6008)
Recognised liability for defined benefit obligations (519) (529)
Deferred tax 119 132
Net pension deficit (400) (397)
Results for the year ended 31 December 2012
Increased dividend
gt Recommended final dividend for sixth successive year
gt Taking total for the year to 1075p a 75 increase on the prior year
gt Payment on 24 May 2013 to shareholders on the register as at 19 April 2013
gt Option to take shares in lieu
10
250p 275p 300p 325p
500p 550p
625p
725p
0
2
4
6
8
10
12
2008 2009 2010 2011 2012
Final
Interim
35p
675p
750p 825p
925p 1000p
Pence
1075p
Business Review
Andrew Wyllie Chief Executive
Results for the year ended 31 December 2012
Costain today
12
Providing world class engineering services in design
delivery and maintenance to
meet national needs
Results for the year ended 31 December 2012 13
Costainrsquos business model
13
Range of
innovative
services
Skills and
experience
of team
Financial
strength
Track record
of reliable
safe service
delivery
Values and
brand reputation
Advisory amp
Design
Programme
Delivery Operations amp
Maintenance
Natural Resources
RESOURCE ALLOCATION
BUSINESS DEVELOPMENT
Our strategy is focused on
major customers
addressing national needs
Sector lsquouniquersquo
customer aligned
divisional structure
Delivered though longer-
term larger contracts and
extensions incorporating a
broader range of services
Costain Tier One
provider of
Engineering
Solutions
Essential capabilities
and attributes
Over 90 repeat orders
PERFORMANCE MANAGEMENT
Range of
innovative
services
Skills and
experience
of team
Financial
strength
Track record
of reliable
safe service
delivery
Values and
brand reputation
Infrastructure
Results for the year ended 31 December 2012
New divisional structure
14
Natural Resources Infrastructure
Advisory amp Design Programme Delivery Operations amp Maintenance
Water A leading provider of Capital Framework and Maintenance Framework Programmes
under the current AMP 5 arrangements
Waste Delivering major waste schemes across the UK the sector provides integrated and
complete support services
Hydrocarbons and chemicals Developing and implementing solutions for upstream and midstream oil and gas and
chemical sectors in the UK and Abu Dhabi
Nuclear Major frameworks delivered across key strategic assets
Highways Delivering major programmes for the Highways Agency maintenance under the
current MAC contracts and Early Contractor Involvement works
Rail A leading provider of multidisciplinary projects currently delivering major projects
principally focused on transportation hubs most recently at Farringdon Reading and
Paddington
Power Focusing on thermal generation new nuclear offshore wind transmission
distribution and biomass
Airports Delivering programmes of work across airport assets at Heathrow Gatwick and
Manchester
Pre-investment advisory Developing leading engineering solutions to
customersrsquo needs through the appropriate use of
service and technology To provide efficient and
effective advice to customersrsquo challenges
Complex programme advisory Building on the extensive capability across the
business Costain is often employed at pre-
development phase and development phase of
project solutions
Operational excellence advisory Provides customers with engineering consultancy
advice and support across the asset lifecycle
Sustainability and energy advisory Delivering investment with certainty and responsibility
Programme leadership Delivering operational excellence in complex
construction projects
Sustainable delivery Costainrsquos experience of delivering major schemes on
time to budget and to a high level of quality remains a
core capability
Partnering and Collaboration Costain continues to drive efficient delivery of these
projects focusing on its people process and partners
Infrastructure network management Operating assets to drive efficient and effective
utilisation Minimising whole-life cost and
maximising value
Asset management and maintenance The acquisition of Promanex during 2011 delivers
operations and maintenance activity across the
power water and nuclear sectors
Facilities management Supporting customersrsquo needs to focus on their core
business partnering with and developing these to a
successful conclusion
Safety first and compliance culture Delivering maintenance of major assets
Both divisions deliveringhellip
Results for the year ended 31 December 2012 15
ldquoCustomers are demanding increasingly innovative solutions
lsquoEngineering Tomorrowrsquo is the Costain commitment to identifying developing
and implementing innovative solutions to major national needsrdquo
lsquoEngineering Tomorrowrsquo
Results for the year ended 31 December 2012 16
Innovative technology lsquoMariorsquo asset management tool ndash developed as part of the Costain
Start-up initiative and now being sold commercially to customers
Delivering technology
solutions
First technology contract for Welsh Government for the maintenance
of Road Network Communications and Tunnel Systems across
Wales
Addressing the nuclear
legacy
Undertaking RampD into Plasma Vitrification and Graphite Gasification
technologies as potential solutions for addressing the treatment and
storage of intermediate level nuclear waste
Asset enhancement Complex design and management for Centrica for the delivery of its
gas plant at Easington to serve the York field in the North Sea
Managing a complex
live environment
Providing integrated services at London Bridge Station including
design construction logistical and environmental operations whilst
ensuring the station remains operational throughout
Strategic asset
management
Appointed by the Oil amp Pipelines Agency on a 3-year operations and
maintenance contract that now covers the whole of their estate
Consolidation of
services
Awarded the Magnox Framework contract for the delivery of
construction infrastructure and maintenance projects across all ten
of its sites
lsquoEngineering Tomorrowrsquo in action
Results for the year ended 31 December 2012
lsquoEngineering Tomorrowrsquo in action
17
Developing skills and
creating employment
Involvement with The Princersquos Trust now taking on more
apprentices working with young offenders offering a sought-after
graduate programme developing and running skills academies
Good citizenship
Corporate and Social Responsibility ndash lsquoCostain Caresrsquo ndash embodies
our core values recognised by our Business in the Community
Award
Repeat orders Recently secured seventh contract from Crossrail
Enhancing key
resources
Working on the AMP5 framework contracts with Northumbrian
Water Severn Trent Southern Water United Utilities and Welsh
Water
Creating a sustainable
environment
Undertaking RampD on behalf of the Energy Technology Institute to
develop a prototype process for carbon capture
Value for money Deliver of Junctions 10-13 of the M1 in Bedfordshire nearly four
months ahead of schedule
Results for the year ended 31 December 2012
hellipleading to high quality order book
gt Order book of pound24 billion (2011 pound25 billion)
gt pound900 million new contracts and extensions secured during the year
gt In excess of 90 from repeat orders
gt Target cost based contracts now circa 90 of order book value
gt In addition preferred bidder positions of over pound400 million
gt Major customers continuing to invest billions in capital operations and
maintenance contracts to meet essential national needs
gt Ability to focus Group wide resources where demand is highest
gt Bidding activity remains high
18
Results for the year ended 31 December 2012
Good visibility
19
0 200 400 600 800 1000 1200 1400
2015 onwards
2014
2013
Group order book 31 December 2012
0 200 400 600 800 1000 1200 1400
2014 onwards
2013
2012
Group order book 31 December 2011
Total pound24 billion
Total pound25 billion
poundm
poundm
Results for the year ended 31 December 2012
Summary
gt Another strong performance in 2012
gt Driven by continued focus on providing integrated services to meet the
complex requirements of customers
gt Major customers continuing to invest pound billions to meet essential national
needs
gt lsquoEngineering Tomorrowrsquo to enhance and broaden our range of innovative
services
gt Confidence is reflected in recommendation to increase the dividend for sixth
successive year
20
Results for the year ended 31 December 2012
6 March 2013
Appendix
Results for the year ended 31 December 2012
Balance sheet
23
31 December 2012 2011
poundm poundm
Assets
Non current assets 912 952
(excluding pension deficit deferred tax)
Trade and other receivables 1832 1903
Cash 1074 1417
Current assets 2906 3320
Total assets 3818 4272
Current liabilities (3031) (3483)
Total Assets less current liabilities 787 789
Non Current liabilities (69) (84)
(excluding net pension liability)
Pension liability net of deferred tax (400) (397)
Total Equity 318 308
Results for the year ended 31 December 2012 24
Status Invested
Capital
Committed
Capital
Directors
Valuation
Bridgend Sold
Kings Sold
Sirhowy Sold
Kent Schools Sold
Ealing Schools Sold
Shropshire Sold
Kent Elderly Sold
Kingston
3 Shires - Lincolnshire Trfd to
3 Shires - Leicester Pension
3 Shires - Derby Fund
Bradford BSF I 2010
Lewisham BSF I
Bradford BSF II Trfd to
Lewisham BSF II Pension Fund 2012
Aquatrine Operations 10 -
94
Lewisham BSF III Operations 13 -
22
Lewisham BSF IV Construction - 22
34
TOTALS 23 22
151
PFI equity portfolio ndash estimated valuation
75
100
125
150
175
200
100 95 90 85 80 75 70 65 60
Esti
mate
d V
alu
ati
on
(poundm
)
Discount Rates
Valuation of Current Portfolio
The value of the restructured business following the formation of Severn Trent Costain
Results for the year ended 31 December 2012
6 March 2013
Results for the year ended 31 December 2012
Cash position
8
2012 2011
poundm poundm
Net cash at beginning of period 1401 1443
Cash from operating activities (231) 348
Cash used by investing activities (51) (348)
Dividends financing (62) (43)
Effect of foreign exchange rate changes 01
Reported net cash 1057 1401
Net cash reconciliation
Cash and cash equivalents at end of period 1074 1417
Less bank overdrafts (17) (16)
Reported net cash 1057 1401
Average month-end cash balance - pound1034m (2011 pound1304m)
Impact on net cash due tohellip
bull Changing profile of business
minus Increased level of support
services activities
minus c 90 of order book value
from target cost based
contracts
minus Reduction in advance
payments
bull Changing industry cash flow trends
bull Timing on one particular
project completion
Average net cash position to
trend lower but will remain
strong
Results for the year ended 31 December 2012
Actions to manage pension obligation
9
gt Actions announced in February 2012 gt Transfer of interest in two PFI investments into the Costain Pension Scheme (lsquoCPSrsquo) at agreed
value of pound203 million - completed on 22 February 2012
gt Resulted in accounting profit on the transfer of pound105 million
gt Implementation of Enhanced Transfer Value (lsquoETVrsquo) and Pension Increase Exchange (lsquoPIErsquo) offers
to the members of the CPS
gt ETV and PIE exercises have resulted in a reduction in the scheme liabilities and assets of
approximately pound35 million and have resulted in a one-off accounting cost of pound28 million expensed
in 2012
gt Another full actuarial valuation of the CPS will be carried out as at 31 March
2013
31 December
2012
31 December
2011
poundm poundm
Fair value of scheme assets 5588 5479
Present value of defined benefit obligations (6107) (6008)
Recognised liability for defined benefit obligations (519) (529)
Deferred tax 119 132
Net pension deficit (400) (397)
Results for the year ended 31 December 2012
Increased dividend
gt Recommended final dividend for sixth successive year
gt Taking total for the year to 1075p a 75 increase on the prior year
gt Payment on 24 May 2013 to shareholders on the register as at 19 April 2013
gt Option to take shares in lieu
10
250p 275p 300p 325p
500p 550p
625p
725p
0
2
4
6
8
10
12
2008 2009 2010 2011 2012
Final
Interim
35p
675p
750p 825p
925p 1000p
Pence
1075p
Business Review
Andrew Wyllie Chief Executive
Results for the year ended 31 December 2012
Costain today
12
Providing world class engineering services in design
delivery and maintenance to
meet national needs
Results for the year ended 31 December 2012 13
Costainrsquos business model
13
Range of
innovative
services
Skills and
experience
of team
Financial
strength
Track record
of reliable
safe service
delivery
Values and
brand reputation
Advisory amp
Design
Programme
Delivery Operations amp
Maintenance
Natural Resources
RESOURCE ALLOCATION
BUSINESS DEVELOPMENT
Our strategy is focused on
major customers
addressing national needs
Sector lsquouniquersquo
customer aligned
divisional structure
Delivered though longer-
term larger contracts and
extensions incorporating a
broader range of services
Costain Tier One
provider of
Engineering
Solutions
Essential capabilities
and attributes
Over 90 repeat orders
PERFORMANCE MANAGEMENT
Range of
innovative
services
Skills and
experience
of team
Financial
strength
Track record
of reliable
safe service
delivery
Values and
brand reputation
Infrastructure
Results for the year ended 31 December 2012
New divisional structure
14
Natural Resources Infrastructure
Advisory amp Design Programme Delivery Operations amp Maintenance
Water A leading provider of Capital Framework and Maintenance Framework Programmes
under the current AMP 5 arrangements
Waste Delivering major waste schemes across the UK the sector provides integrated and
complete support services
Hydrocarbons and chemicals Developing and implementing solutions for upstream and midstream oil and gas and
chemical sectors in the UK and Abu Dhabi
Nuclear Major frameworks delivered across key strategic assets
Highways Delivering major programmes for the Highways Agency maintenance under the
current MAC contracts and Early Contractor Involvement works
Rail A leading provider of multidisciplinary projects currently delivering major projects
principally focused on transportation hubs most recently at Farringdon Reading and
Paddington
Power Focusing on thermal generation new nuclear offshore wind transmission
distribution and biomass
Airports Delivering programmes of work across airport assets at Heathrow Gatwick and
Manchester
Pre-investment advisory Developing leading engineering solutions to
customersrsquo needs through the appropriate use of
service and technology To provide efficient and
effective advice to customersrsquo challenges
Complex programme advisory Building on the extensive capability across the
business Costain is often employed at pre-
development phase and development phase of
project solutions
Operational excellence advisory Provides customers with engineering consultancy
advice and support across the asset lifecycle
Sustainability and energy advisory Delivering investment with certainty and responsibility
Programme leadership Delivering operational excellence in complex
construction projects
Sustainable delivery Costainrsquos experience of delivering major schemes on
time to budget and to a high level of quality remains a
core capability
Partnering and Collaboration Costain continues to drive efficient delivery of these
projects focusing on its people process and partners
Infrastructure network management Operating assets to drive efficient and effective
utilisation Minimising whole-life cost and
maximising value
Asset management and maintenance The acquisition of Promanex during 2011 delivers
operations and maintenance activity across the
power water and nuclear sectors
Facilities management Supporting customersrsquo needs to focus on their core
business partnering with and developing these to a
successful conclusion
Safety first and compliance culture Delivering maintenance of major assets
Both divisions deliveringhellip
Results for the year ended 31 December 2012 15
ldquoCustomers are demanding increasingly innovative solutions
lsquoEngineering Tomorrowrsquo is the Costain commitment to identifying developing
and implementing innovative solutions to major national needsrdquo
lsquoEngineering Tomorrowrsquo
Results for the year ended 31 December 2012 16
Innovative technology lsquoMariorsquo asset management tool ndash developed as part of the Costain
Start-up initiative and now being sold commercially to customers
Delivering technology
solutions
First technology contract for Welsh Government for the maintenance
of Road Network Communications and Tunnel Systems across
Wales
Addressing the nuclear
legacy
Undertaking RampD into Plasma Vitrification and Graphite Gasification
technologies as potential solutions for addressing the treatment and
storage of intermediate level nuclear waste
Asset enhancement Complex design and management for Centrica for the delivery of its
gas plant at Easington to serve the York field in the North Sea
Managing a complex
live environment
Providing integrated services at London Bridge Station including
design construction logistical and environmental operations whilst
ensuring the station remains operational throughout
Strategic asset
management
Appointed by the Oil amp Pipelines Agency on a 3-year operations and
maintenance contract that now covers the whole of their estate
Consolidation of
services
Awarded the Magnox Framework contract for the delivery of
construction infrastructure and maintenance projects across all ten
of its sites
lsquoEngineering Tomorrowrsquo in action
Results for the year ended 31 December 2012
lsquoEngineering Tomorrowrsquo in action
17
Developing skills and
creating employment
Involvement with The Princersquos Trust now taking on more
apprentices working with young offenders offering a sought-after
graduate programme developing and running skills academies
Good citizenship
Corporate and Social Responsibility ndash lsquoCostain Caresrsquo ndash embodies
our core values recognised by our Business in the Community
Award
Repeat orders Recently secured seventh contract from Crossrail
Enhancing key
resources
Working on the AMP5 framework contracts with Northumbrian
Water Severn Trent Southern Water United Utilities and Welsh
Water
Creating a sustainable
environment
Undertaking RampD on behalf of the Energy Technology Institute to
develop a prototype process for carbon capture
Value for money Deliver of Junctions 10-13 of the M1 in Bedfordshire nearly four
months ahead of schedule
Results for the year ended 31 December 2012
hellipleading to high quality order book
gt Order book of pound24 billion (2011 pound25 billion)
gt pound900 million new contracts and extensions secured during the year
gt In excess of 90 from repeat orders
gt Target cost based contracts now circa 90 of order book value
gt In addition preferred bidder positions of over pound400 million
gt Major customers continuing to invest billions in capital operations and
maintenance contracts to meet essential national needs
gt Ability to focus Group wide resources where demand is highest
gt Bidding activity remains high
18
Results for the year ended 31 December 2012
Good visibility
19
0 200 400 600 800 1000 1200 1400
2015 onwards
2014
2013
Group order book 31 December 2012
0 200 400 600 800 1000 1200 1400
2014 onwards
2013
2012
Group order book 31 December 2011
Total pound24 billion
Total pound25 billion
poundm
poundm
Results for the year ended 31 December 2012
Summary
gt Another strong performance in 2012
gt Driven by continued focus on providing integrated services to meet the
complex requirements of customers
gt Major customers continuing to invest pound billions to meet essential national
needs
gt lsquoEngineering Tomorrowrsquo to enhance and broaden our range of innovative
services
gt Confidence is reflected in recommendation to increase the dividend for sixth
successive year
20
Results for the year ended 31 December 2012
6 March 2013
Appendix
Results for the year ended 31 December 2012
Balance sheet
23
31 December 2012 2011
poundm poundm
Assets
Non current assets 912 952
(excluding pension deficit deferred tax)
Trade and other receivables 1832 1903
Cash 1074 1417
Current assets 2906 3320
Total assets 3818 4272
Current liabilities (3031) (3483)
Total Assets less current liabilities 787 789
Non Current liabilities (69) (84)
(excluding net pension liability)
Pension liability net of deferred tax (400) (397)
Total Equity 318 308
Results for the year ended 31 December 2012 24
Status Invested
Capital
Committed
Capital
Directors
Valuation
Bridgend Sold
Kings Sold
Sirhowy Sold
Kent Schools Sold
Ealing Schools Sold
Shropshire Sold
Kent Elderly Sold
Kingston
3 Shires - Lincolnshire Trfd to
3 Shires - Leicester Pension
3 Shires - Derby Fund
Bradford BSF I 2010
Lewisham BSF I
Bradford BSF II Trfd to
Lewisham BSF II Pension Fund 2012
Aquatrine Operations 10 -
94
Lewisham BSF III Operations 13 -
22
Lewisham BSF IV Construction - 22
34
TOTALS 23 22
151
PFI equity portfolio ndash estimated valuation
75
100
125
150
175
200
100 95 90 85 80 75 70 65 60
Esti
mate
d V
alu
ati
on
(poundm
)
Discount Rates
Valuation of Current Portfolio
The value of the restructured business following the formation of Severn Trent Costain
Results for the year ended 31 December 2012
6 March 2013
Results for the year ended 31 December 2012
Actions to manage pension obligation
9
gt Actions announced in February 2012 gt Transfer of interest in two PFI investments into the Costain Pension Scheme (lsquoCPSrsquo) at agreed
value of pound203 million - completed on 22 February 2012
gt Resulted in accounting profit on the transfer of pound105 million
gt Implementation of Enhanced Transfer Value (lsquoETVrsquo) and Pension Increase Exchange (lsquoPIErsquo) offers
to the members of the CPS
gt ETV and PIE exercises have resulted in a reduction in the scheme liabilities and assets of
approximately pound35 million and have resulted in a one-off accounting cost of pound28 million expensed
in 2012
gt Another full actuarial valuation of the CPS will be carried out as at 31 March
2013
31 December
2012
31 December
2011
poundm poundm
Fair value of scheme assets 5588 5479
Present value of defined benefit obligations (6107) (6008)
Recognised liability for defined benefit obligations (519) (529)
Deferred tax 119 132
Net pension deficit (400) (397)
Results for the year ended 31 December 2012
Increased dividend
gt Recommended final dividend for sixth successive year
gt Taking total for the year to 1075p a 75 increase on the prior year
gt Payment on 24 May 2013 to shareholders on the register as at 19 April 2013
gt Option to take shares in lieu
10
250p 275p 300p 325p
500p 550p
625p
725p
0
2
4
6
8
10
12
2008 2009 2010 2011 2012
Final
Interim
35p
675p
750p 825p
925p 1000p
Pence
1075p
Business Review
Andrew Wyllie Chief Executive
Results for the year ended 31 December 2012
Costain today
12
Providing world class engineering services in design
delivery and maintenance to
meet national needs
Results for the year ended 31 December 2012 13
Costainrsquos business model
13
Range of
innovative
services
Skills and
experience
of team
Financial
strength
Track record
of reliable
safe service
delivery
Values and
brand reputation
Advisory amp
Design
Programme
Delivery Operations amp
Maintenance
Natural Resources
RESOURCE ALLOCATION
BUSINESS DEVELOPMENT
Our strategy is focused on
major customers
addressing national needs
Sector lsquouniquersquo
customer aligned
divisional structure
Delivered though longer-
term larger contracts and
extensions incorporating a
broader range of services
Costain Tier One
provider of
Engineering
Solutions
Essential capabilities
and attributes
Over 90 repeat orders
PERFORMANCE MANAGEMENT
Range of
innovative
services
Skills and
experience
of team
Financial
strength
Track record
of reliable
safe service
delivery
Values and
brand reputation
Infrastructure
Results for the year ended 31 December 2012
New divisional structure
14
Natural Resources Infrastructure
Advisory amp Design Programme Delivery Operations amp Maintenance
Water A leading provider of Capital Framework and Maintenance Framework Programmes
under the current AMP 5 arrangements
Waste Delivering major waste schemes across the UK the sector provides integrated and
complete support services
Hydrocarbons and chemicals Developing and implementing solutions for upstream and midstream oil and gas and
chemical sectors in the UK and Abu Dhabi
Nuclear Major frameworks delivered across key strategic assets
Highways Delivering major programmes for the Highways Agency maintenance under the
current MAC contracts and Early Contractor Involvement works
Rail A leading provider of multidisciplinary projects currently delivering major projects
principally focused on transportation hubs most recently at Farringdon Reading and
Paddington
Power Focusing on thermal generation new nuclear offshore wind transmission
distribution and biomass
Airports Delivering programmes of work across airport assets at Heathrow Gatwick and
Manchester
Pre-investment advisory Developing leading engineering solutions to
customersrsquo needs through the appropriate use of
service and technology To provide efficient and
effective advice to customersrsquo challenges
Complex programme advisory Building on the extensive capability across the
business Costain is often employed at pre-
development phase and development phase of
project solutions
Operational excellence advisory Provides customers with engineering consultancy
advice and support across the asset lifecycle
Sustainability and energy advisory Delivering investment with certainty and responsibility
Programme leadership Delivering operational excellence in complex
construction projects
Sustainable delivery Costainrsquos experience of delivering major schemes on
time to budget and to a high level of quality remains a
core capability
Partnering and Collaboration Costain continues to drive efficient delivery of these
projects focusing on its people process and partners
Infrastructure network management Operating assets to drive efficient and effective
utilisation Minimising whole-life cost and
maximising value
Asset management and maintenance The acquisition of Promanex during 2011 delivers
operations and maintenance activity across the
power water and nuclear sectors
Facilities management Supporting customersrsquo needs to focus on their core
business partnering with and developing these to a
successful conclusion
Safety first and compliance culture Delivering maintenance of major assets
Both divisions deliveringhellip
Results for the year ended 31 December 2012 15
ldquoCustomers are demanding increasingly innovative solutions
lsquoEngineering Tomorrowrsquo is the Costain commitment to identifying developing
and implementing innovative solutions to major national needsrdquo
lsquoEngineering Tomorrowrsquo
Results for the year ended 31 December 2012 16
Innovative technology lsquoMariorsquo asset management tool ndash developed as part of the Costain
Start-up initiative and now being sold commercially to customers
Delivering technology
solutions
First technology contract for Welsh Government for the maintenance
of Road Network Communications and Tunnel Systems across
Wales
Addressing the nuclear
legacy
Undertaking RampD into Plasma Vitrification and Graphite Gasification
technologies as potential solutions for addressing the treatment and
storage of intermediate level nuclear waste
Asset enhancement Complex design and management for Centrica for the delivery of its
gas plant at Easington to serve the York field in the North Sea
Managing a complex
live environment
Providing integrated services at London Bridge Station including
design construction logistical and environmental operations whilst
ensuring the station remains operational throughout
Strategic asset
management
Appointed by the Oil amp Pipelines Agency on a 3-year operations and
maintenance contract that now covers the whole of their estate
Consolidation of
services
Awarded the Magnox Framework contract for the delivery of
construction infrastructure and maintenance projects across all ten
of its sites
lsquoEngineering Tomorrowrsquo in action
Results for the year ended 31 December 2012
lsquoEngineering Tomorrowrsquo in action
17
Developing skills and
creating employment
Involvement with The Princersquos Trust now taking on more
apprentices working with young offenders offering a sought-after
graduate programme developing and running skills academies
Good citizenship
Corporate and Social Responsibility ndash lsquoCostain Caresrsquo ndash embodies
our core values recognised by our Business in the Community
Award
Repeat orders Recently secured seventh contract from Crossrail
Enhancing key
resources
Working on the AMP5 framework contracts with Northumbrian
Water Severn Trent Southern Water United Utilities and Welsh
Water
Creating a sustainable
environment
Undertaking RampD on behalf of the Energy Technology Institute to
develop a prototype process for carbon capture
Value for money Deliver of Junctions 10-13 of the M1 in Bedfordshire nearly four
months ahead of schedule
Results for the year ended 31 December 2012
hellipleading to high quality order book
gt Order book of pound24 billion (2011 pound25 billion)
gt pound900 million new contracts and extensions secured during the year
gt In excess of 90 from repeat orders
gt Target cost based contracts now circa 90 of order book value
gt In addition preferred bidder positions of over pound400 million
gt Major customers continuing to invest billions in capital operations and
maintenance contracts to meet essential national needs
gt Ability to focus Group wide resources where demand is highest
gt Bidding activity remains high
18
Results for the year ended 31 December 2012
Good visibility
19
0 200 400 600 800 1000 1200 1400
2015 onwards
2014
2013
Group order book 31 December 2012
0 200 400 600 800 1000 1200 1400
2014 onwards
2013
2012
Group order book 31 December 2011
Total pound24 billion
Total pound25 billion
poundm
poundm
Results for the year ended 31 December 2012
Summary
gt Another strong performance in 2012
gt Driven by continued focus on providing integrated services to meet the
complex requirements of customers
gt Major customers continuing to invest pound billions to meet essential national
needs
gt lsquoEngineering Tomorrowrsquo to enhance and broaden our range of innovative
services
gt Confidence is reflected in recommendation to increase the dividend for sixth
successive year
20
Results for the year ended 31 December 2012
6 March 2013
Appendix
Results for the year ended 31 December 2012
Balance sheet
23
31 December 2012 2011
poundm poundm
Assets
Non current assets 912 952
(excluding pension deficit deferred tax)
Trade and other receivables 1832 1903
Cash 1074 1417
Current assets 2906 3320
Total assets 3818 4272
Current liabilities (3031) (3483)
Total Assets less current liabilities 787 789
Non Current liabilities (69) (84)
(excluding net pension liability)
Pension liability net of deferred tax (400) (397)
Total Equity 318 308
Results for the year ended 31 December 2012 24
Status Invested
Capital
Committed
Capital
Directors
Valuation
Bridgend Sold
Kings Sold
Sirhowy Sold
Kent Schools Sold
Ealing Schools Sold
Shropshire Sold
Kent Elderly Sold
Kingston
3 Shires - Lincolnshire Trfd to
3 Shires - Leicester Pension
3 Shires - Derby Fund
Bradford BSF I 2010
Lewisham BSF I
Bradford BSF II Trfd to
Lewisham BSF II Pension Fund 2012
Aquatrine Operations 10 -
94
Lewisham BSF III Operations 13 -
22
Lewisham BSF IV Construction - 22
34
TOTALS 23 22
151
PFI equity portfolio ndash estimated valuation
75
100
125
150
175
200
100 95 90 85 80 75 70 65 60
Esti
mate
d V
alu
ati
on
(poundm
)
Discount Rates
Valuation of Current Portfolio
The value of the restructured business following the formation of Severn Trent Costain
Results for the year ended 31 December 2012
6 March 2013
Results for the year ended 31 December 2012
Increased dividend
gt Recommended final dividend for sixth successive year
gt Taking total for the year to 1075p a 75 increase on the prior year
gt Payment on 24 May 2013 to shareholders on the register as at 19 April 2013
gt Option to take shares in lieu
10
250p 275p 300p 325p
500p 550p
625p
725p
0
2
4
6
8
10
12
2008 2009 2010 2011 2012
Final
Interim
35p
675p
750p 825p
925p 1000p
Pence
1075p
Business Review
Andrew Wyllie Chief Executive
Results for the year ended 31 December 2012
Costain today
12
Providing world class engineering services in design
delivery and maintenance to
meet national needs
Results for the year ended 31 December 2012 13
Costainrsquos business model
13
Range of
innovative
services
Skills and
experience
of team
Financial
strength
Track record
of reliable
safe service
delivery
Values and
brand reputation
Advisory amp
Design
Programme
Delivery Operations amp
Maintenance
Natural Resources
RESOURCE ALLOCATION
BUSINESS DEVELOPMENT
Our strategy is focused on
major customers
addressing national needs
Sector lsquouniquersquo
customer aligned
divisional structure
Delivered though longer-
term larger contracts and
extensions incorporating a
broader range of services
Costain Tier One
provider of
Engineering
Solutions
Essential capabilities
and attributes
Over 90 repeat orders
PERFORMANCE MANAGEMENT
Range of
innovative
services
Skills and
experience
of team
Financial
strength
Track record
of reliable
safe service
delivery
Values and
brand reputation
Infrastructure
Results for the year ended 31 December 2012
New divisional structure
14
Natural Resources Infrastructure
Advisory amp Design Programme Delivery Operations amp Maintenance
Water A leading provider of Capital Framework and Maintenance Framework Programmes
under the current AMP 5 arrangements
Waste Delivering major waste schemes across the UK the sector provides integrated and
complete support services
Hydrocarbons and chemicals Developing and implementing solutions for upstream and midstream oil and gas and
chemical sectors in the UK and Abu Dhabi
Nuclear Major frameworks delivered across key strategic assets
Highways Delivering major programmes for the Highways Agency maintenance under the
current MAC contracts and Early Contractor Involvement works
Rail A leading provider of multidisciplinary projects currently delivering major projects
principally focused on transportation hubs most recently at Farringdon Reading and
Paddington
Power Focusing on thermal generation new nuclear offshore wind transmission
distribution and biomass
Airports Delivering programmes of work across airport assets at Heathrow Gatwick and
Manchester
Pre-investment advisory Developing leading engineering solutions to
customersrsquo needs through the appropriate use of
service and technology To provide efficient and
effective advice to customersrsquo challenges
Complex programme advisory Building on the extensive capability across the
business Costain is often employed at pre-
development phase and development phase of
project solutions
Operational excellence advisory Provides customers with engineering consultancy
advice and support across the asset lifecycle
Sustainability and energy advisory Delivering investment with certainty and responsibility
Programme leadership Delivering operational excellence in complex
construction projects
Sustainable delivery Costainrsquos experience of delivering major schemes on
time to budget and to a high level of quality remains a
core capability
Partnering and Collaboration Costain continues to drive efficient delivery of these
projects focusing on its people process and partners
Infrastructure network management Operating assets to drive efficient and effective
utilisation Minimising whole-life cost and
maximising value
Asset management and maintenance The acquisition of Promanex during 2011 delivers
operations and maintenance activity across the
power water and nuclear sectors
Facilities management Supporting customersrsquo needs to focus on their core
business partnering with and developing these to a
successful conclusion
Safety first and compliance culture Delivering maintenance of major assets
Both divisions deliveringhellip
Results for the year ended 31 December 2012 15
ldquoCustomers are demanding increasingly innovative solutions
lsquoEngineering Tomorrowrsquo is the Costain commitment to identifying developing
and implementing innovative solutions to major national needsrdquo
lsquoEngineering Tomorrowrsquo
Results for the year ended 31 December 2012 16
Innovative technology lsquoMariorsquo asset management tool ndash developed as part of the Costain
Start-up initiative and now being sold commercially to customers
Delivering technology
solutions
First technology contract for Welsh Government for the maintenance
of Road Network Communications and Tunnel Systems across
Wales
Addressing the nuclear
legacy
Undertaking RampD into Plasma Vitrification and Graphite Gasification
technologies as potential solutions for addressing the treatment and
storage of intermediate level nuclear waste
Asset enhancement Complex design and management for Centrica for the delivery of its
gas plant at Easington to serve the York field in the North Sea
Managing a complex
live environment
Providing integrated services at London Bridge Station including
design construction logistical and environmental operations whilst
ensuring the station remains operational throughout
Strategic asset
management
Appointed by the Oil amp Pipelines Agency on a 3-year operations and
maintenance contract that now covers the whole of their estate
Consolidation of
services
Awarded the Magnox Framework contract for the delivery of
construction infrastructure and maintenance projects across all ten
of its sites
lsquoEngineering Tomorrowrsquo in action
Results for the year ended 31 December 2012
lsquoEngineering Tomorrowrsquo in action
17
Developing skills and
creating employment
Involvement with The Princersquos Trust now taking on more
apprentices working with young offenders offering a sought-after
graduate programme developing and running skills academies
Good citizenship
Corporate and Social Responsibility ndash lsquoCostain Caresrsquo ndash embodies
our core values recognised by our Business in the Community
Award
Repeat orders Recently secured seventh contract from Crossrail
Enhancing key
resources
Working on the AMP5 framework contracts with Northumbrian
Water Severn Trent Southern Water United Utilities and Welsh
Water
Creating a sustainable
environment
Undertaking RampD on behalf of the Energy Technology Institute to
develop a prototype process for carbon capture
Value for money Deliver of Junctions 10-13 of the M1 in Bedfordshire nearly four
months ahead of schedule
Results for the year ended 31 December 2012
hellipleading to high quality order book
gt Order book of pound24 billion (2011 pound25 billion)
gt pound900 million new contracts and extensions secured during the year
gt In excess of 90 from repeat orders
gt Target cost based contracts now circa 90 of order book value
gt In addition preferred bidder positions of over pound400 million
gt Major customers continuing to invest billions in capital operations and
maintenance contracts to meet essential national needs
gt Ability to focus Group wide resources where demand is highest
gt Bidding activity remains high
18
Results for the year ended 31 December 2012
Good visibility
19
0 200 400 600 800 1000 1200 1400
2015 onwards
2014
2013
Group order book 31 December 2012
0 200 400 600 800 1000 1200 1400
2014 onwards
2013
2012
Group order book 31 December 2011
Total pound24 billion
Total pound25 billion
poundm
poundm
Results for the year ended 31 December 2012
Summary
gt Another strong performance in 2012
gt Driven by continued focus on providing integrated services to meet the
complex requirements of customers
gt Major customers continuing to invest pound billions to meet essential national
needs
gt lsquoEngineering Tomorrowrsquo to enhance and broaden our range of innovative
services
gt Confidence is reflected in recommendation to increase the dividend for sixth
successive year
20
Results for the year ended 31 December 2012
6 March 2013
Appendix
Results for the year ended 31 December 2012
Balance sheet
23
31 December 2012 2011
poundm poundm
Assets
Non current assets 912 952
(excluding pension deficit deferred tax)
Trade and other receivables 1832 1903
Cash 1074 1417
Current assets 2906 3320
Total assets 3818 4272
Current liabilities (3031) (3483)
Total Assets less current liabilities 787 789
Non Current liabilities (69) (84)
(excluding net pension liability)
Pension liability net of deferred tax (400) (397)
Total Equity 318 308
Results for the year ended 31 December 2012 24
Status Invested
Capital
Committed
Capital
Directors
Valuation
Bridgend Sold
Kings Sold
Sirhowy Sold
Kent Schools Sold
Ealing Schools Sold
Shropshire Sold
Kent Elderly Sold
Kingston
3 Shires - Lincolnshire Trfd to
3 Shires - Leicester Pension
3 Shires - Derby Fund
Bradford BSF I 2010
Lewisham BSF I
Bradford BSF II Trfd to
Lewisham BSF II Pension Fund 2012
Aquatrine Operations 10 -
94
Lewisham BSF III Operations 13 -
22
Lewisham BSF IV Construction - 22
34
TOTALS 23 22
151
PFI equity portfolio ndash estimated valuation
75
100
125
150
175
200
100 95 90 85 80 75 70 65 60
Esti
mate
d V
alu
ati
on
(poundm
)
Discount Rates
Valuation of Current Portfolio
The value of the restructured business following the formation of Severn Trent Costain
Results for the year ended 31 December 2012
6 March 2013
Business Review
Andrew Wyllie Chief Executive
Results for the year ended 31 December 2012
Costain today
12
Providing world class engineering services in design
delivery and maintenance to
meet national needs
Results for the year ended 31 December 2012 13
Costainrsquos business model
13
Range of
innovative
services
Skills and
experience
of team
Financial
strength
Track record
of reliable
safe service
delivery
Values and
brand reputation
Advisory amp
Design
Programme
Delivery Operations amp
Maintenance
Natural Resources
RESOURCE ALLOCATION
BUSINESS DEVELOPMENT
Our strategy is focused on
major customers
addressing national needs
Sector lsquouniquersquo
customer aligned
divisional structure
Delivered though longer-
term larger contracts and
extensions incorporating a
broader range of services
Costain Tier One
provider of
Engineering
Solutions
Essential capabilities
and attributes
Over 90 repeat orders
PERFORMANCE MANAGEMENT
Range of
innovative
services
Skills and
experience
of team
Financial
strength
Track record
of reliable
safe service
delivery
Values and
brand reputation
Infrastructure
Results for the year ended 31 December 2012
New divisional structure
14
Natural Resources Infrastructure
Advisory amp Design Programme Delivery Operations amp Maintenance
Water A leading provider of Capital Framework and Maintenance Framework Programmes
under the current AMP 5 arrangements
Waste Delivering major waste schemes across the UK the sector provides integrated and
complete support services
Hydrocarbons and chemicals Developing and implementing solutions for upstream and midstream oil and gas and
chemical sectors in the UK and Abu Dhabi
Nuclear Major frameworks delivered across key strategic assets
Highways Delivering major programmes for the Highways Agency maintenance under the
current MAC contracts and Early Contractor Involvement works
Rail A leading provider of multidisciplinary projects currently delivering major projects
principally focused on transportation hubs most recently at Farringdon Reading and
Paddington
Power Focusing on thermal generation new nuclear offshore wind transmission
distribution and biomass
Airports Delivering programmes of work across airport assets at Heathrow Gatwick and
Manchester
Pre-investment advisory Developing leading engineering solutions to
customersrsquo needs through the appropriate use of
service and technology To provide efficient and
effective advice to customersrsquo challenges
Complex programme advisory Building on the extensive capability across the
business Costain is often employed at pre-
development phase and development phase of
project solutions
Operational excellence advisory Provides customers with engineering consultancy
advice and support across the asset lifecycle
Sustainability and energy advisory Delivering investment with certainty and responsibility
Programme leadership Delivering operational excellence in complex
construction projects
Sustainable delivery Costainrsquos experience of delivering major schemes on
time to budget and to a high level of quality remains a
core capability
Partnering and Collaboration Costain continues to drive efficient delivery of these
projects focusing on its people process and partners
Infrastructure network management Operating assets to drive efficient and effective
utilisation Minimising whole-life cost and
maximising value
Asset management and maintenance The acquisition of Promanex during 2011 delivers
operations and maintenance activity across the
power water and nuclear sectors
Facilities management Supporting customersrsquo needs to focus on their core
business partnering with and developing these to a
successful conclusion
Safety first and compliance culture Delivering maintenance of major assets
Both divisions deliveringhellip
Results for the year ended 31 December 2012 15
ldquoCustomers are demanding increasingly innovative solutions
lsquoEngineering Tomorrowrsquo is the Costain commitment to identifying developing
and implementing innovative solutions to major national needsrdquo
lsquoEngineering Tomorrowrsquo
Results for the year ended 31 December 2012 16
Innovative technology lsquoMariorsquo asset management tool ndash developed as part of the Costain
Start-up initiative and now being sold commercially to customers
Delivering technology
solutions
First technology contract for Welsh Government for the maintenance
of Road Network Communications and Tunnel Systems across
Wales
Addressing the nuclear
legacy
Undertaking RampD into Plasma Vitrification and Graphite Gasification
technologies as potential solutions for addressing the treatment and
storage of intermediate level nuclear waste
Asset enhancement Complex design and management for Centrica for the delivery of its
gas plant at Easington to serve the York field in the North Sea
Managing a complex
live environment
Providing integrated services at London Bridge Station including
design construction logistical and environmental operations whilst
ensuring the station remains operational throughout
Strategic asset
management
Appointed by the Oil amp Pipelines Agency on a 3-year operations and
maintenance contract that now covers the whole of their estate
Consolidation of
services
Awarded the Magnox Framework contract for the delivery of
construction infrastructure and maintenance projects across all ten
of its sites
lsquoEngineering Tomorrowrsquo in action
Results for the year ended 31 December 2012
lsquoEngineering Tomorrowrsquo in action
17
Developing skills and
creating employment
Involvement with The Princersquos Trust now taking on more
apprentices working with young offenders offering a sought-after
graduate programme developing and running skills academies
Good citizenship
Corporate and Social Responsibility ndash lsquoCostain Caresrsquo ndash embodies
our core values recognised by our Business in the Community
Award
Repeat orders Recently secured seventh contract from Crossrail
Enhancing key
resources
Working on the AMP5 framework contracts with Northumbrian
Water Severn Trent Southern Water United Utilities and Welsh
Water
Creating a sustainable
environment
Undertaking RampD on behalf of the Energy Technology Institute to
develop a prototype process for carbon capture
Value for money Deliver of Junctions 10-13 of the M1 in Bedfordshire nearly four
months ahead of schedule
Results for the year ended 31 December 2012
hellipleading to high quality order book
gt Order book of pound24 billion (2011 pound25 billion)
gt pound900 million new contracts and extensions secured during the year
gt In excess of 90 from repeat orders
gt Target cost based contracts now circa 90 of order book value
gt In addition preferred bidder positions of over pound400 million
gt Major customers continuing to invest billions in capital operations and
maintenance contracts to meet essential national needs
gt Ability to focus Group wide resources where demand is highest
gt Bidding activity remains high
18
Results for the year ended 31 December 2012
Good visibility
19
0 200 400 600 800 1000 1200 1400
2015 onwards
2014
2013
Group order book 31 December 2012
0 200 400 600 800 1000 1200 1400
2014 onwards
2013
2012
Group order book 31 December 2011
Total pound24 billion
Total pound25 billion
poundm
poundm
Results for the year ended 31 December 2012
Summary
gt Another strong performance in 2012
gt Driven by continued focus on providing integrated services to meet the
complex requirements of customers
gt Major customers continuing to invest pound billions to meet essential national
needs
gt lsquoEngineering Tomorrowrsquo to enhance and broaden our range of innovative
services
gt Confidence is reflected in recommendation to increase the dividend for sixth
successive year
20
Results for the year ended 31 December 2012
6 March 2013
Appendix
Results for the year ended 31 December 2012
Balance sheet
23
31 December 2012 2011
poundm poundm
Assets
Non current assets 912 952
(excluding pension deficit deferred tax)
Trade and other receivables 1832 1903
Cash 1074 1417
Current assets 2906 3320
Total assets 3818 4272
Current liabilities (3031) (3483)
Total Assets less current liabilities 787 789
Non Current liabilities (69) (84)
(excluding net pension liability)
Pension liability net of deferred tax (400) (397)
Total Equity 318 308
Results for the year ended 31 December 2012 24
Status Invested
Capital
Committed
Capital
Directors
Valuation
Bridgend Sold
Kings Sold
Sirhowy Sold
Kent Schools Sold
Ealing Schools Sold
Shropshire Sold
Kent Elderly Sold
Kingston
3 Shires - Lincolnshire Trfd to
3 Shires - Leicester Pension
3 Shires - Derby Fund
Bradford BSF I 2010
Lewisham BSF I
Bradford BSF II Trfd to
Lewisham BSF II Pension Fund 2012
Aquatrine Operations 10 -
94
Lewisham BSF III Operations 13 -
22
Lewisham BSF IV Construction - 22
34
TOTALS 23 22
151
PFI equity portfolio ndash estimated valuation
75
100
125
150
175
200
100 95 90 85 80 75 70 65 60
Esti
mate
d V
alu
ati
on
(poundm
)
Discount Rates
Valuation of Current Portfolio
The value of the restructured business following the formation of Severn Trent Costain
Results for the year ended 31 December 2012
6 March 2013
Results for the year ended 31 December 2012
Costain today
12
Providing world class engineering services in design
delivery and maintenance to
meet national needs
Results for the year ended 31 December 2012 13
Costainrsquos business model
13
Range of
innovative
services
Skills and
experience
of team
Financial
strength
Track record
of reliable
safe service
delivery
Values and
brand reputation
Advisory amp
Design
Programme
Delivery Operations amp
Maintenance
Natural Resources
RESOURCE ALLOCATION
BUSINESS DEVELOPMENT
Our strategy is focused on
major customers
addressing national needs
Sector lsquouniquersquo
customer aligned
divisional structure
Delivered though longer-
term larger contracts and
extensions incorporating a
broader range of services
Costain Tier One
provider of
Engineering
Solutions
Essential capabilities
and attributes
Over 90 repeat orders
PERFORMANCE MANAGEMENT
Range of
innovative
services
Skills and
experience
of team
Financial
strength
Track record
of reliable
safe service
delivery
Values and
brand reputation
Infrastructure
Results for the year ended 31 December 2012
New divisional structure
14
Natural Resources Infrastructure
Advisory amp Design Programme Delivery Operations amp Maintenance
Water A leading provider of Capital Framework and Maintenance Framework Programmes
under the current AMP 5 arrangements
Waste Delivering major waste schemes across the UK the sector provides integrated and
complete support services
Hydrocarbons and chemicals Developing and implementing solutions for upstream and midstream oil and gas and
chemical sectors in the UK and Abu Dhabi
Nuclear Major frameworks delivered across key strategic assets
Highways Delivering major programmes for the Highways Agency maintenance under the
current MAC contracts and Early Contractor Involvement works
Rail A leading provider of multidisciplinary projects currently delivering major projects
principally focused on transportation hubs most recently at Farringdon Reading and
Paddington
Power Focusing on thermal generation new nuclear offshore wind transmission
distribution and biomass
Airports Delivering programmes of work across airport assets at Heathrow Gatwick and
Manchester
Pre-investment advisory Developing leading engineering solutions to
customersrsquo needs through the appropriate use of
service and technology To provide efficient and
effective advice to customersrsquo challenges
Complex programme advisory Building on the extensive capability across the
business Costain is often employed at pre-
development phase and development phase of
project solutions
Operational excellence advisory Provides customers with engineering consultancy
advice and support across the asset lifecycle
Sustainability and energy advisory Delivering investment with certainty and responsibility
Programme leadership Delivering operational excellence in complex
construction projects
Sustainable delivery Costainrsquos experience of delivering major schemes on
time to budget and to a high level of quality remains a
core capability
Partnering and Collaboration Costain continues to drive efficient delivery of these
projects focusing on its people process and partners
Infrastructure network management Operating assets to drive efficient and effective
utilisation Minimising whole-life cost and
maximising value
Asset management and maintenance The acquisition of Promanex during 2011 delivers
operations and maintenance activity across the
power water and nuclear sectors
Facilities management Supporting customersrsquo needs to focus on their core
business partnering with and developing these to a
successful conclusion
Safety first and compliance culture Delivering maintenance of major assets
Both divisions deliveringhellip
Results for the year ended 31 December 2012 15
ldquoCustomers are demanding increasingly innovative solutions
lsquoEngineering Tomorrowrsquo is the Costain commitment to identifying developing
and implementing innovative solutions to major national needsrdquo
lsquoEngineering Tomorrowrsquo
Results for the year ended 31 December 2012 16
Innovative technology lsquoMariorsquo asset management tool ndash developed as part of the Costain
Start-up initiative and now being sold commercially to customers
Delivering technology
solutions
First technology contract for Welsh Government for the maintenance
of Road Network Communications and Tunnel Systems across
Wales
Addressing the nuclear
legacy
Undertaking RampD into Plasma Vitrification and Graphite Gasification
technologies as potential solutions for addressing the treatment and
storage of intermediate level nuclear waste
Asset enhancement Complex design and management for Centrica for the delivery of its
gas plant at Easington to serve the York field in the North Sea
Managing a complex
live environment
Providing integrated services at London Bridge Station including
design construction logistical and environmental operations whilst
ensuring the station remains operational throughout
Strategic asset
management
Appointed by the Oil amp Pipelines Agency on a 3-year operations and
maintenance contract that now covers the whole of their estate
Consolidation of
services
Awarded the Magnox Framework contract for the delivery of
construction infrastructure and maintenance projects across all ten
of its sites
lsquoEngineering Tomorrowrsquo in action
Results for the year ended 31 December 2012
lsquoEngineering Tomorrowrsquo in action
17
Developing skills and
creating employment
Involvement with The Princersquos Trust now taking on more
apprentices working with young offenders offering a sought-after
graduate programme developing and running skills academies
Good citizenship
Corporate and Social Responsibility ndash lsquoCostain Caresrsquo ndash embodies
our core values recognised by our Business in the Community
Award
Repeat orders Recently secured seventh contract from Crossrail
Enhancing key
resources
Working on the AMP5 framework contracts with Northumbrian
Water Severn Trent Southern Water United Utilities and Welsh
Water
Creating a sustainable
environment
Undertaking RampD on behalf of the Energy Technology Institute to
develop a prototype process for carbon capture
Value for money Deliver of Junctions 10-13 of the M1 in Bedfordshire nearly four
months ahead of schedule
Results for the year ended 31 December 2012
hellipleading to high quality order book
gt Order book of pound24 billion (2011 pound25 billion)
gt pound900 million new contracts and extensions secured during the year
gt In excess of 90 from repeat orders
gt Target cost based contracts now circa 90 of order book value
gt In addition preferred bidder positions of over pound400 million
gt Major customers continuing to invest billions in capital operations and
maintenance contracts to meet essential national needs
gt Ability to focus Group wide resources where demand is highest
gt Bidding activity remains high
18
Results for the year ended 31 December 2012
Good visibility
19
0 200 400 600 800 1000 1200 1400
2015 onwards
2014
2013
Group order book 31 December 2012
0 200 400 600 800 1000 1200 1400
2014 onwards
2013
2012
Group order book 31 December 2011
Total pound24 billion
Total pound25 billion
poundm
poundm
Results for the year ended 31 December 2012
Summary
gt Another strong performance in 2012
gt Driven by continued focus on providing integrated services to meet the
complex requirements of customers
gt Major customers continuing to invest pound billions to meet essential national
needs
gt lsquoEngineering Tomorrowrsquo to enhance and broaden our range of innovative
services
gt Confidence is reflected in recommendation to increase the dividend for sixth
successive year
20
Results for the year ended 31 December 2012
6 March 2013
Appendix
Results for the year ended 31 December 2012
Balance sheet
23
31 December 2012 2011
poundm poundm
Assets
Non current assets 912 952
(excluding pension deficit deferred tax)
Trade and other receivables 1832 1903
Cash 1074 1417
Current assets 2906 3320
Total assets 3818 4272
Current liabilities (3031) (3483)
Total Assets less current liabilities 787 789
Non Current liabilities (69) (84)
(excluding net pension liability)
Pension liability net of deferred tax (400) (397)
Total Equity 318 308
Results for the year ended 31 December 2012 24
Status Invested
Capital
Committed
Capital
Directors
Valuation
Bridgend Sold
Kings Sold
Sirhowy Sold
Kent Schools Sold
Ealing Schools Sold
Shropshire Sold
Kent Elderly Sold
Kingston
3 Shires - Lincolnshire Trfd to
3 Shires - Leicester Pension
3 Shires - Derby Fund
Bradford BSF I 2010
Lewisham BSF I
Bradford BSF II Trfd to
Lewisham BSF II Pension Fund 2012
Aquatrine Operations 10 -
94
Lewisham BSF III Operations 13 -
22
Lewisham BSF IV Construction - 22
34
TOTALS 23 22
151
PFI equity portfolio ndash estimated valuation
75
100
125
150
175
200
100 95 90 85 80 75 70 65 60
Esti
mate
d V
alu
ati
on
(poundm
)
Discount Rates
Valuation of Current Portfolio
The value of the restructured business following the formation of Severn Trent Costain
Results for the year ended 31 December 2012
6 March 2013
Results for the year ended 31 December 2012 13
Costainrsquos business model
13
Range of
innovative
services
Skills and
experience
of team
Financial
strength
Track record
of reliable
safe service
delivery
Values and
brand reputation
Advisory amp
Design
Programme
Delivery Operations amp
Maintenance
Natural Resources
RESOURCE ALLOCATION
BUSINESS DEVELOPMENT
Our strategy is focused on
major customers
addressing national needs
Sector lsquouniquersquo
customer aligned
divisional structure
Delivered though longer-
term larger contracts and
extensions incorporating a
broader range of services
Costain Tier One
provider of
Engineering
Solutions
Essential capabilities
and attributes
Over 90 repeat orders
PERFORMANCE MANAGEMENT
Range of
innovative
services
Skills and
experience
of team
Financial
strength
Track record
of reliable
safe service
delivery
Values and
brand reputation
Infrastructure
Results for the year ended 31 December 2012
New divisional structure
14
Natural Resources Infrastructure
Advisory amp Design Programme Delivery Operations amp Maintenance
Water A leading provider of Capital Framework and Maintenance Framework Programmes
under the current AMP 5 arrangements
Waste Delivering major waste schemes across the UK the sector provides integrated and
complete support services
Hydrocarbons and chemicals Developing and implementing solutions for upstream and midstream oil and gas and
chemical sectors in the UK and Abu Dhabi
Nuclear Major frameworks delivered across key strategic assets
Highways Delivering major programmes for the Highways Agency maintenance under the
current MAC contracts and Early Contractor Involvement works
Rail A leading provider of multidisciplinary projects currently delivering major projects
principally focused on transportation hubs most recently at Farringdon Reading and
Paddington
Power Focusing on thermal generation new nuclear offshore wind transmission
distribution and biomass
Airports Delivering programmes of work across airport assets at Heathrow Gatwick and
Manchester
Pre-investment advisory Developing leading engineering solutions to
customersrsquo needs through the appropriate use of
service and technology To provide efficient and
effective advice to customersrsquo challenges
Complex programme advisory Building on the extensive capability across the
business Costain is often employed at pre-
development phase and development phase of
project solutions
Operational excellence advisory Provides customers with engineering consultancy
advice and support across the asset lifecycle
Sustainability and energy advisory Delivering investment with certainty and responsibility
Programme leadership Delivering operational excellence in complex
construction projects
Sustainable delivery Costainrsquos experience of delivering major schemes on
time to budget and to a high level of quality remains a
core capability
Partnering and Collaboration Costain continues to drive efficient delivery of these
projects focusing on its people process and partners
Infrastructure network management Operating assets to drive efficient and effective
utilisation Minimising whole-life cost and
maximising value
Asset management and maintenance The acquisition of Promanex during 2011 delivers
operations and maintenance activity across the
power water and nuclear sectors
Facilities management Supporting customersrsquo needs to focus on their core
business partnering with and developing these to a
successful conclusion
Safety first and compliance culture Delivering maintenance of major assets
Both divisions deliveringhellip
Results for the year ended 31 December 2012 15
ldquoCustomers are demanding increasingly innovative solutions
lsquoEngineering Tomorrowrsquo is the Costain commitment to identifying developing
and implementing innovative solutions to major national needsrdquo
lsquoEngineering Tomorrowrsquo
Results for the year ended 31 December 2012 16
Innovative technology lsquoMariorsquo asset management tool ndash developed as part of the Costain
Start-up initiative and now being sold commercially to customers
Delivering technology
solutions
First technology contract for Welsh Government for the maintenance
of Road Network Communications and Tunnel Systems across
Wales
Addressing the nuclear
legacy
Undertaking RampD into Plasma Vitrification and Graphite Gasification
technologies as potential solutions for addressing the treatment and
storage of intermediate level nuclear waste
Asset enhancement Complex design and management for Centrica for the delivery of its
gas plant at Easington to serve the York field in the North Sea
Managing a complex
live environment
Providing integrated services at London Bridge Station including
design construction logistical and environmental operations whilst
ensuring the station remains operational throughout
Strategic asset
management
Appointed by the Oil amp Pipelines Agency on a 3-year operations and
maintenance contract that now covers the whole of their estate
Consolidation of
services
Awarded the Magnox Framework contract for the delivery of
construction infrastructure and maintenance projects across all ten
of its sites
lsquoEngineering Tomorrowrsquo in action
Results for the year ended 31 December 2012
lsquoEngineering Tomorrowrsquo in action
17
Developing skills and
creating employment
Involvement with The Princersquos Trust now taking on more
apprentices working with young offenders offering a sought-after
graduate programme developing and running skills academies
Good citizenship
Corporate and Social Responsibility ndash lsquoCostain Caresrsquo ndash embodies
our core values recognised by our Business in the Community
Award
Repeat orders Recently secured seventh contract from Crossrail
Enhancing key
resources
Working on the AMP5 framework contracts with Northumbrian
Water Severn Trent Southern Water United Utilities and Welsh
Water
Creating a sustainable
environment
Undertaking RampD on behalf of the Energy Technology Institute to
develop a prototype process for carbon capture
Value for money Deliver of Junctions 10-13 of the M1 in Bedfordshire nearly four
months ahead of schedule
Results for the year ended 31 December 2012
hellipleading to high quality order book
gt Order book of pound24 billion (2011 pound25 billion)
gt pound900 million new contracts and extensions secured during the year
gt In excess of 90 from repeat orders
gt Target cost based contracts now circa 90 of order book value
gt In addition preferred bidder positions of over pound400 million
gt Major customers continuing to invest billions in capital operations and
maintenance contracts to meet essential national needs
gt Ability to focus Group wide resources where demand is highest
gt Bidding activity remains high
18
Results for the year ended 31 December 2012
Good visibility
19
0 200 400 600 800 1000 1200 1400
2015 onwards
2014
2013
Group order book 31 December 2012
0 200 400 600 800 1000 1200 1400
2014 onwards
2013
2012
Group order book 31 December 2011
Total pound24 billion
Total pound25 billion
poundm
poundm
Results for the year ended 31 December 2012
Summary
gt Another strong performance in 2012
gt Driven by continued focus on providing integrated services to meet the
complex requirements of customers
gt Major customers continuing to invest pound billions to meet essential national
needs
gt lsquoEngineering Tomorrowrsquo to enhance and broaden our range of innovative
services
gt Confidence is reflected in recommendation to increase the dividend for sixth
successive year
20
Results for the year ended 31 December 2012
6 March 2013
Appendix
Results for the year ended 31 December 2012
Balance sheet
23
31 December 2012 2011
poundm poundm
Assets
Non current assets 912 952
(excluding pension deficit deferred tax)
Trade and other receivables 1832 1903
Cash 1074 1417
Current assets 2906 3320
Total assets 3818 4272
Current liabilities (3031) (3483)
Total Assets less current liabilities 787 789
Non Current liabilities (69) (84)
(excluding net pension liability)
Pension liability net of deferred tax (400) (397)
Total Equity 318 308
Results for the year ended 31 December 2012 24
Status Invested
Capital
Committed
Capital
Directors
Valuation
Bridgend Sold
Kings Sold
Sirhowy Sold
Kent Schools Sold
Ealing Schools Sold
Shropshire Sold
Kent Elderly Sold
Kingston
3 Shires - Lincolnshire Trfd to
3 Shires - Leicester Pension
3 Shires - Derby Fund
Bradford BSF I 2010
Lewisham BSF I
Bradford BSF II Trfd to
Lewisham BSF II Pension Fund 2012
Aquatrine Operations 10 -
94
Lewisham BSF III Operations 13 -
22
Lewisham BSF IV Construction - 22
34
TOTALS 23 22
151
PFI equity portfolio ndash estimated valuation
75
100
125
150
175
200
100 95 90 85 80 75 70 65 60
Esti
mate
d V
alu
ati
on
(poundm
)
Discount Rates
Valuation of Current Portfolio
The value of the restructured business following the formation of Severn Trent Costain
Results for the year ended 31 December 2012
6 March 2013
Results for the year ended 31 December 2012
New divisional structure
14
Natural Resources Infrastructure
Advisory amp Design Programme Delivery Operations amp Maintenance
Water A leading provider of Capital Framework and Maintenance Framework Programmes
under the current AMP 5 arrangements
Waste Delivering major waste schemes across the UK the sector provides integrated and
complete support services
Hydrocarbons and chemicals Developing and implementing solutions for upstream and midstream oil and gas and
chemical sectors in the UK and Abu Dhabi
Nuclear Major frameworks delivered across key strategic assets
Highways Delivering major programmes for the Highways Agency maintenance under the
current MAC contracts and Early Contractor Involvement works
Rail A leading provider of multidisciplinary projects currently delivering major projects
principally focused on transportation hubs most recently at Farringdon Reading and
Paddington
Power Focusing on thermal generation new nuclear offshore wind transmission
distribution and biomass
Airports Delivering programmes of work across airport assets at Heathrow Gatwick and
Manchester
Pre-investment advisory Developing leading engineering solutions to
customersrsquo needs through the appropriate use of
service and technology To provide efficient and
effective advice to customersrsquo challenges
Complex programme advisory Building on the extensive capability across the
business Costain is often employed at pre-
development phase and development phase of
project solutions
Operational excellence advisory Provides customers with engineering consultancy
advice and support across the asset lifecycle
Sustainability and energy advisory Delivering investment with certainty and responsibility
Programme leadership Delivering operational excellence in complex
construction projects
Sustainable delivery Costainrsquos experience of delivering major schemes on
time to budget and to a high level of quality remains a
core capability
Partnering and Collaboration Costain continues to drive efficient delivery of these
projects focusing on its people process and partners
Infrastructure network management Operating assets to drive efficient and effective
utilisation Minimising whole-life cost and
maximising value
Asset management and maintenance The acquisition of Promanex during 2011 delivers
operations and maintenance activity across the
power water and nuclear sectors
Facilities management Supporting customersrsquo needs to focus on their core
business partnering with and developing these to a
successful conclusion
Safety first and compliance culture Delivering maintenance of major assets
Both divisions deliveringhellip
Results for the year ended 31 December 2012 15
ldquoCustomers are demanding increasingly innovative solutions
lsquoEngineering Tomorrowrsquo is the Costain commitment to identifying developing
and implementing innovative solutions to major national needsrdquo
lsquoEngineering Tomorrowrsquo
Results for the year ended 31 December 2012 16
Innovative technology lsquoMariorsquo asset management tool ndash developed as part of the Costain
Start-up initiative and now being sold commercially to customers
Delivering technology
solutions
First technology contract for Welsh Government for the maintenance
of Road Network Communications and Tunnel Systems across
Wales
Addressing the nuclear
legacy
Undertaking RampD into Plasma Vitrification and Graphite Gasification
technologies as potential solutions for addressing the treatment and
storage of intermediate level nuclear waste
Asset enhancement Complex design and management for Centrica for the delivery of its
gas plant at Easington to serve the York field in the North Sea
Managing a complex
live environment
Providing integrated services at London Bridge Station including
design construction logistical and environmental operations whilst
ensuring the station remains operational throughout
Strategic asset
management
Appointed by the Oil amp Pipelines Agency on a 3-year operations and
maintenance contract that now covers the whole of their estate
Consolidation of
services
Awarded the Magnox Framework contract for the delivery of
construction infrastructure and maintenance projects across all ten
of its sites
lsquoEngineering Tomorrowrsquo in action
Results for the year ended 31 December 2012
lsquoEngineering Tomorrowrsquo in action
17
Developing skills and
creating employment
Involvement with The Princersquos Trust now taking on more
apprentices working with young offenders offering a sought-after
graduate programme developing and running skills academies
Good citizenship
Corporate and Social Responsibility ndash lsquoCostain Caresrsquo ndash embodies
our core values recognised by our Business in the Community
Award
Repeat orders Recently secured seventh contract from Crossrail
Enhancing key
resources
Working on the AMP5 framework contracts with Northumbrian
Water Severn Trent Southern Water United Utilities and Welsh
Water
Creating a sustainable
environment
Undertaking RampD on behalf of the Energy Technology Institute to
develop a prototype process for carbon capture
Value for money Deliver of Junctions 10-13 of the M1 in Bedfordshire nearly four
months ahead of schedule
Results for the year ended 31 December 2012
hellipleading to high quality order book
gt Order book of pound24 billion (2011 pound25 billion)
gt pound900 million new contracts and extensions secured during the year
gt In excess of 90 from repeat orders
gt Target cost based contracts now circa 90 of order book value
gt In addition preferred bidder positions of over pound400 million
gt Major customers continuing to invest billions in capital operations and
maintenance contracts to meet essential national needs
gt Ability to focus Group wide resources where demand is highest
gt Bidding activity remains high
18
Results for the year ended 31 December 2012
Good visibility
19
0 200 400 600 800 1000 1200 1400
2015 onwards
2014
2013
Group order book 31 December 2012
0 200 400 600 800 1000 1200 1400
2014 onwards
2013
2012
Group order book 31 December 2011
Total pound24 billion
Total pound25 billion
poundm
poundm
Results for the year ended 31 December 2012
Summary
gt Another strong performance in 2012
gt Driven by continued focus on providing integrated services to meet the
complex requirements of customers
gt Major customers continuing to invest pound billions to meet essential national
needs
gt lsquoEngineering Tomorrowrsquo to enhance and broaden our range of innovative
services
gt Confidence is reflected in recommendation to increase the dividend for sixth
successive year
20
Results for the year ended 31 December 2012
6 March 2013
Appendix
Results for the year ended 31 December 2012
Balance sheet
23
31 December 2012 2011
poundm poundm
Assets
Non current assets 912 952
(excluding pension deficit deferred tax)
Trade and other receivables 1832 1903
Cash 1074 1417
Current assets 2906 3320
Total assets 3818 4272
Current liabilities (3031) (3483)
Total Assets less current liabilities 787 789
Non Current liabilities (69) (84)
(excluding net pension liability)
Pension liability net of deferred tax (400) (397)
Total Equity 318 308
Results for the year ended 31 December 2012 24
Status Invested
Capital
Committed
Capital
Directors
Valuation
Bridgend Sold
Kings Sold
Sirhowy Sold
Kent Schools Sold
Ealing Schools Sold
Shropshire Sold
Kent Elderly Sold
Kingston
3 Shires - Lincolnshire Trfd to
3 Shires - Leicester Pension
3 Shires - Derby Fund
Bradford BSF I 2010
Lewisham BSF I
Bradford BSF II Trfd to
Lewisham BSF II Pension Fund 2012
Aquatrine Operations 10 -
94
Lewisham BSF III Operations 13 -
22
Lewisham BSF IV Construction - 22
34
TOTALS 23 22
151
PFI equity portfolio ndash estimated valuation
75
100
125
150
175
200
100 95 90 85 80 75 70 65 60
Esti
mate
d V
alu
ati
on
(poundm
)
Discount Rates
Valuation of Current Portfolio
The value of the restructured business following the formation of Severn Trent Costain
Results for the year ended 31 December 2012
6 March 2013
Results for the year ended 31 December 2012 15
ldquoCustomers are demanding increasingly innovative solutions
lsquoEngineering Tomorrowrsquo is the Costain commitment to identifying developing
and implementing innovative solutions to major national needsrdquo
lsquoEngineering Tomorrowrsquo
Results for the year ended 31 December 2012 16
Innovative technology lsquoMariorsquo asset management tool ndash developed as part of the Costain
Start-up initiative and now being sold commercially to customers
Delivering technology
solutions
First technology contract for Welsh Government for the maintenance
of Road Network Communications and Tunnel Systems across
Wales
Addressing the nuclear
legacy
Undertaking RampD into Plasma Vitrification and Graphite Gasification
technologies as potential solutions for addressing the treatment and
storage of intermediate level nuclear waste
Asset enhancement Complex design and management for Centrica for the delivery of its
gas plant at Easington to serve the York field in the North Sea
Managing a complex
live environment
Providing integrated services at London Bridge Station including
design construction logistical and environmental operations whilst
ensuring the station remains operational throughout
Strategic asset
management
Appointed by the Oil amp Pipelines Agency on a 3-year operations and
maintenance contract that now covers the whole of their estate
Consolidation of
services
Awarded the Magnox Framework contract for the delivery of
construction infrastructure and maintenance projects across all ten
of its sites
lsquoEngineering Tomorrowrsquo in action
Results for the year ended 31 December 2012
lsquoEngineering Tomorrowrsquo in action
17
Developing skills and
creating employment
Involvement with The Princersquos Trust now taking on more
apprentices working with young offenders offering a sought-after
graduate programme developing and running skills academies
Good citizenship
Corporate and Social Responsibility ndash lsquoCostain Caresrsquo ndash embodies
our core values recognised by our Business in the Community
Award
Repeat orders Recently secured seventh contract from Crossrail
Enhancing key
resources
Working on the AMP5 framework contracts with Northumbrian
Water Severn Trent Southern Water United Utilities and Welsh
Water
Creating a sustainable
environment
Undertaking RampD on behalf of the Energy Technology Institute to
develop a prototype process for carbon capture
Value for money Deliver of Junctions 10-13 of the M1 in Bedfordshire nearly four
months ahead of schedule
Results for the year ended 31 December 2012
hellipleading to high quality order book
gt Order book of pound24 billion (2011 pound25 billion)
gt pound900 million new contracts and extensions secured during the year
gt In excess of 90 from repeat orders
gt Target cost based contracts now circa 90 of order book value
gt In addition preferred bidder positions of over pound400 million
gt Major customers continuing to invest billions in capital operations and
maintenance contracts to meet essential national needs
gt Ability to focus Group wide resources where demand is highest
gt Bidding activity remains high
18
Results for the year ended 31 December 2012
Good visibility
19
0 200 400 600 800 1000 1200 1400
2015 onwards
2014
2013
Group order book 31 December 2012
0 200 400 600 800 1000 1200 1400
2014 onwards
2013
2012
Group order book 31 December 2011
Total pound24 billion
Total pound25 billion
poundm
poundm
Results for the year ended 31 December 2012
Summary
gt Another strong performance in 2012
gt Driven by continued focus on providing integrated services to meet the
complex requirements of customers
gt Major customers continuing to invest pound billions to meet essential national
needs
gt lsquoEngineering Tomorrowrsquo to enhance and broaden our range of innovative
services
gt Confidence is reflected in recommendation to increase the dividend for sixth
successive year
20
Results for the year ended 31 December 2012
6 March 2013
Appendix
Results for the year ended 31 December 2012
Balance sheet
23
31 December 2012 2011
poundm poundm
Assets
Non current assets 912 952
(excluding pension deficit deferred tax)
Trade and other receivables 1832 1903
Cash 1074 1417
Current assets 2906 3320
Total assets 3818 4272
Current liabilities (3031) (3483)
Total Assets less current liabilities 787 789
Non Current liabilities (69) (84)
(excluding net pension liability)
Pension liability net of deferred tax (400) (397)
Total Equity 318 308
Results for the year ended 31 December 2012 24
Status Invested
Capital
Committed
Capital
Directors
Valuation
Bridgend Sold
Kings Sold
Sirhowy Sold
Kent Schools Sold
Ealing Schools Sold
Shropshire Sold
Kent Elderly Sold
Kingston
3 Shires - Lincolnshire Trfd to
3 Shires - Leicester Pension
3 Shires - Derby Fund
Bradford BSF I 2010
Lewisham BSF I
Bradford BSF II Trfd to
Lewisham BSF II Pension Fund 2012
Aquatrine Operations 10 -
94
Lewisham BSF III Operations 13 -
22
Lewisham BSF IV Construction - 22
34
TOTALS 23 22
151
PFI equity portfolio ndash estimated valuation
75
100
125
150
175
200
100 95 90 85 80 75 70 65 60
Esti
mate
d V
alu
ati
on
(poundm
)
Discount Rates
Valuation of Current Portfolio
The value of the restructured business following the formation of Severn Trent Costain
Results for the year ended 31 December 2012
6 March 2013
Results for the year ended 31 December 2012 16
Innovative technology lsquoMariorsquo asset management tool ndash developed as part of the Costain
Start-up initiative and now being sold commercially to customers
Delivering technology
solutions
First technology contract for Welsh Government for the maintenance
of Road Network Communications and Tunnel Systems across
Wales
Addressing the nuclear
legacy
Undertaking RampD into Plasma Vitrification and Graphite Gasification
technologies as potential solutions for addressing the treatment and
storage of intermediate level nuclear waste
Asset enhancement Complex design and management for Centrica for the delivery of its
gas plant at Easington to serve the York field in the North Sea
Managing a complex
live environment
Providing integrated services at London Bridge Station including
design construction logistical and environmental operations whilst
ensuring the station remains operational throughout
Strategic asset
management
Appointed by the Oil amp Pipelines Agency on a 3-year operations and
maintenance contract that now covers the whole of their estate
Consolidation of
services
Awarded the Magnox Framework contract for the delivery of
construction infrastructure and maintenance projects across all ten
of its sites
lsquoEngineering Tomorrowrsquo in action
Results for the year ended 31 December 2012
lsquoEngineering Tomorrowrsquo in action
17
Developing skills and
creating employment
Involvement with The Princersquos Trust now taking on more
apprentices working with young offenders offering a sought-after
graduate programme developing and running skills academies
Good citizenship
Corporate and Social Responsibility ndash lsquoCostain Caresrsquo ndash embodies
our core values recognised by our Business in the Community
Award
Repeat orders Recently secured seventh contract from Crossrail
Enhancing key
resources
Working on the AMP5 framework contracts with Northumbrian
Water Severn Trent Southern Water United Utilities and Welsh
Water
Creating a sustainable
environment
Undertaking RampD on behalf of the Energy Technology Institute to
develop a prototype process for carbon capture
Value for money Deliver of Junctions 10-13 of the M1 in Bedfordshire nearly four
months ahead of schedule
Results for the year ended 31 December 2012
hellipleading to high quality order book
gt Order book of pound24 billion (2011 pound25 billion)
gt pound900 million new contracts and extensions secured during the year
gt In excess of 90 from repeat orders
gt Target cost based contracts now circa 90 of order book value
gt In addition preferred bidder positions of over pound400 million
gt Major customers continuing to invest billions in capital operations and
maintenance contracts to meet essential national needs
gt Ability to focus Group wide resources where demand is highest
gt Bidding activity remains high
18
Results for the year ended 31 December 2012
Good visibility
19
0 200 400 600 800 1000 1200 1400
2015 onwards
2014
2013
Group order book 31 December 2012
0 200 400 600 800 1000 1200 1400
2014 onwards
2013
2012
Group order book 31 December 2011
Total pound24 billion
Total pound25 billion
poundm
poundm
Results for the year ended 31 December 2012
Summary
gt Another strong performance in 2012
gt Driven by continued focus on providing integrated services to meet the
complex requirements of customers
gt Major customers continuing to invest pound billions to meet essential national
needs
gt lsquoEngineering Tomorrowrsquo to enhance and broaden our range of innovative
services
gt Confidence is reflected in recommendation to increase the dividend for sixth
successive year
20
Results for the year ended 31 December 2012
6 March 2013
Appendix
Results for the year ended 31 December 2012
Balance sheet
23
31 December 2012 2011
poundm poundm
Assets
Non current assets 912 952
(excluding pension deficit deferred tax)
Trade and other receivables 1832 1903
Cash 1074 1417
Current assets 2906 3320
Total assets 3818 4272
Current liabilities (3031) (3483)
Total Assets less current liabilities 787 789
Non Current liabilities (69) (84)
(excluding net pension liability)
Pension liability net of deferred tax (400) (397)
Total Equity 318 308
Results for the year ended 31 December 2012 24
Status Invested
Capital
Committed
Capital
Directors
Valuation
Bridgend Sold
Kings Sold
Sirhowy Sold
Kent Schools Sold
Ealing Schools Sold
Shropshire Sold
Kent Elderly Sold
Kingston
3 Shires - Lincolnshire Trfd to
3 Shires - Leicester Pension
3 Shires - Derby Fund
Bradford BSF I 2010
Lewisham BSF I
Bradford BSF II Trfd to
Lewisham BSF II Pension Fund 2012
Aquatrine Operations 10 -
94
Lewisham BSF III Operations 13 -
22
Lewisham BSF IV Construction - 22
34
TOTALS 23 22
151
PFI equity portfolio ndash estimated valuation
75
100
125
150
175
200
100 95 90 85 80 75 70 65 60
Esti
mate
d V
alu
ati
on
(poundm
)
Discount Rates
Valuation of Current Portfolio
The value of the restructured business following the formation of Severn Trent Costain
Results for the year ended 31 December 2012
6 March 2013
Results for the year ended 31 December 2012
lsquoEngineering Tomorrowrsquo in action
17
Developing skills and
creating employment
Involvement with The Princersquos Trust now taking on more
apprentices working with young offenders offering a sought-after
graduate programme developing and running skills academies
Good citizenship
Corporate and Social Responsibility ndash lsquoCostain Caresrsquo ndash embodies
our core values recognised by our Business in the Community
Award
Repeat orders Recently secured seventh contract from Crossrail
Enhancing key
resources
Working on the AMP5 framework contracts with Northumbrian
Water Severn Trent Southern Water United Utilities and Welsh
Water
Creating a sustainable
environment
Undertaking RampD on behalf of the Energy Technology Institute to
develop a prototype process for carbon capture
Value for money Deliver of Junctions 10-13 of the M1 in Bedfordshire nearly four
months ahead of schedule
Results for the year ended 31 December 2012
hellipleading to high quality order book
gt Order book of pound24 billion (2011 pound25 billion)
gt pound900 million new contracts and extensions secured during the year
gt In excess of 90 from repeat orders
gt Target cost based contracts now circa 90 of order book value
gt In addition preferred bidder positions of over pound400 million
gt Major customers continuing to invest billions in capital operations and
maintenance contracts to meet essential national needs
gt Ability to focus Group wide resources where demand is highest
gt Bidding activity remains high
18
Results for the year ended 31 December 2012
Good visibility
19
0 200 400 600 800 1000 1200 1400
2015 onwards
2014
2013
Group order book 31 December 2012
0 200 400 600 800 1000 1200 1400
2014 onwards
2013
2012
Group order book 31 December 2011
Total pound24 billion
Total pound25 billion
poundm
poundm
Results for the year ended 31 December 2012
Summary
gt Another strong performance in 2012
gt Driven by continued focus on providing integrated services to meet the
complex requirements of customers
gt Major customers continuing to invest pound billions to meet essential national
needs
gt lsquoEngineering Tomorrowrsquo to enhance and broaden our range of innovative
services
gt Confidence is reflected in recommendation to increase the dividend for sixth
successive year
20
Results for the year ended 31 December 2012
6 March 2013
Appendix
Results for the year ended 31 December 2012
Balance sheet
23
31 December 2012 2011
poundm poundm
Assets
Non current assets 912 952
(excluding pension deficit deferred tax)
Trade and other receivables 1832 1903
Cash 1074 1417
Current assets 2906 3320
Total assets 3818 4272
Current liabilities (3031) (3483)
Total Assets less current liabilities 787 789
Non Current liabilities (69) (84)
(excluding net pension liability)
Pension liability net of deferred tax (400) (397)
Total Equity 318 308
Results for the year ended 31 December 2012 24
Status Invested
Capital
Committed
Capital
Directors
Valuation
Bridgend Sold
Kings Sold
Sirhowy Sold
Kent Schools Sold
Ealing Schools Sold
Shropshire Sold
Kent Elderly Sold
Kingston
3 Shires - Lincolnshire Trfd to
3 Shires - Leicester Pension
3 Shires - Derby Fund
Bradford BSF I 2010
Lewisham BSF I
Bradford BSF II Trfd to
Lewisham BSF II Pension Fund 2012
Aquatrine Operations 10 -
94
Lewisham BSF III Operations 13 -
22
Lewisham BSF IV Construction - 22
34
TOTALS 23 22
151
PFI equity portfolio ndash estimated valuation
75
100
125
150
175
200
100 95 90 85 80 75 70 65 60
Esti
mate
d V
alu
ati
on
(poundm
)
Discount Rates
Valuation of Current Portfolio
The value of the restructured business following the formation of Severn Trent Costain
Results for the year ended 31 December 2012
6 March 2013
Results for the year ended 31 December 2012
hellipleading to high quality order book
gt Order book of pound24 billion (2011 pound25 billion)
gt pound900 million new contracts and extensions secured during the year
gt In excess of 90 from repeat orders
gt Target cost based contracts now circa 90 of order book value
gt In addition preferred bidder positions of over pound400 million
gt Major customers continuing to invest billions in capital operations and
maintenance contracts to meet essential national needs
gt Ability to focus Group wide resources where demand is highest
gt Bidding activity remains high
18
Results for the year ended 31 December 2012
Good visibility
19
0 200 400 600 800 1000 1200 1400
2015 onwards
2014
2013
Group order book 31 December 2012
0 200 400 600 800 1000 1200 1400
2014 onwards
2013
2012
Group order book 31 December 2011
Total pound24 billion
Total pound25 billion
poundm
poundm
Results for the year ended 31 December 2012
Summary
gt Another strong performance in 2012
gt Driven by continued focus on providing integrated services to meet the
complex requirements of customers
gt Major customers continuing to invest pound billions to meet essential national
needs
gt lsquoEngineering Tomorrowrsquo to enhance and broaden our range of innovative
services
gt Confidence is reflected in recommendation to increase the dividend for sixth
successive year
20
Results for the year ended 31 December 2012
6 March 2013
Appendix
Results for the year ended 31 December 2012
Balance sheet
23
31 December 2012 2011
poundm poundm
Assets
Non current assets 912 952
(excluding pension deficit deferred tax)
Trade and other receivables 1832 1903
Cash 1074 1417
Current assets 2906 3320
Total assets 3818 4272
Current liabilities (3031) (3483)
Total Assets less current liabilities 787 789
Non Current liabilities (69) (84)
(excluding net pension liability)
Pension liability net of deferred tax (400) (397)
Total Equity 318 308
Results for the year ended 31 December 2012 24
Status Invested
Capital
Committed
Capital
Directors
Valuation
Bridgend Sold
Kings Sold
Sirhowy Sold
Kent Schools Sold
Ealing Schools Sold
Shropshire Sold
Kent Elderly Sold
Kingston
3 Shires - Lincolnshire Trfd to
3 Shires - Leicester Pension
3 Shires - Derby Fund
Bradford BSF I 2010
Lewisham BSF I
Bradford BSF II Trfd to
Lewisham BSF II Pension Fund 2012
Aquatrine Operations 10 -
94
Lewisham BSF III Operations 13 -
22
Lewisham BSF IV Construction - 22
34
TOTALS 23 22
151
PFI equity portfolio ndash estimated valuation
75
100
125
150
175
200
100 95 90 85 80 75 70 65 60
Esti
mate
d V
alu
ati
on
(poundm
)
Discount Rates
Valuation of Current Portfolio
The value of the restructured business following the formation of Severn Trent Costain
Results for the year ended 31 December 2012
6 March 2013
Results for the year ended 31 December 2012
Good visibility
19
0 200 400 600 800 1000 1200 1400
2015 onwards
2014
2013
Group order book 31 December 2012
0 200 400 600 800 1000 1200 1400
2014 onwards
2013
2012
Group order book 31 December 2011
Total pound24 billion
Total pound25 billion
poundm
poundm
Results for the year ended 31 December 2012
Summary
gt Another strong performance in 2012
gt Driven by continued focus on providing integrated services to meet the
complex requirements of customers
gt Major customers continuing to invest pound billions to meet essential national
needs
gt lsquoEngineering Tomorrowrsquo to enhance and broaden our range of innovative
services
gt Confidence is reflected in recommendation to increase the dividend for sixth
successive year
20
Results for the year ended 31 December 2012
6 March 2013
Appendix
Results for the year ended 31 December 2012
Balance sheet
23
31 December 2012 2011
poundm poundm
Assets
Non current assets 912 952
(excluding pension deficit deferred tax)
Trade and other receivables 1832 1903
Cash 1074 1417
Current assets 2906 3320
Total assets 3818 4272
Current liabilities (3031) (3483)
Total Assets less current liabilities 787 789
Non Current liabilities (69) (84)
(excluding net pension liability)
Pension liability net of deferred tax (400) (397)
Total Equity 318 308
Results for the year ended 31 December 2012 24
Status Invested
Capital
Committed
Capital
Directors
Valuation
Bridgend Sold
Kings Sold
Sirhowy Sold
Kent Schools Sold
Ealing Schools Sold
Shropshire Sold
Kent Elderly Sold
Kingston
3 Shires - Lincolnshire Trfd to
3 Shires - Leicester Pension
3 Shires - Derby Fund
Bradford BSF I 2010
Lewisham BSF I
Bradford BSF II Trfd to
Lewisham BSF II Pension Fund 2012
Aquatrine Operations 10 -
94
Lewisham BSF III Operations 13 -
22
Lewisham BSF IV Construction - 22
34
TOTALS 23 22
151
PFI equity portfolio ndash estimated valuation
75
100
125
150
175
200
100 95 90 85 80 75 70 65 60
Esti
mate
d V
alu
ati
on
(poundm
)
Discount Rates
Valuation of Current Portfolio
The value of the restructured business following the formation of Severn Trent Costain
Results for the year ended 31 December 2012
6 March 2013
Results for the year ended 31 December 2012
Summary
gt Another strong performance in 2012
gt Driven by continued focus on providing integrated services to meet the
complex requirements of customers
gt Major customers continuing to invest pound billions to meet essential national
needs
gt lsquoEngineering Tomorrowrsquo to enhance and broaden our range of innovative
services
gt Confidence is reflected in recommendation to increase the dividend for sixth
successive year
20
Results for the year ended 31 December 2012
6 March 2013
Appendix
Results for the year ended 31 December 2012
Balance sheet
23
31 December 2012 2011
poundm poundm
Assets
Non current assets 912 952
(excluding pension deficit deferred tax)
Trade and other receivables 1832 1903
Cash 1074 1417
Current assets 2906 3320
Total assets 3818 4272
Current liabilities (3031) (3483)
Total Assets less current liabilities 787 789
Non Current liabilities (69) (84)
(excluding net pension liability)
Pension liability net of deferred tax (400) (397)
Total Equity 318 308
Results for the year ended 31 December 2012 24
Status Invested
Capital
Committed
Capital
Directors
Valuation
Bridgend Sold
Kings Sold
Sirhowy Sold
Kent Schools Sold
Ealing Schools Sold
Shropshire Sold
Kent Elderly Sold
Kingston
3 Shires - Lincolnshire Trfd to
3 Shires - Leicester Pension
3 Shires - Derby Fund
Bradford BSF I 2010
Lewisham BSF I
Bradford BSF II Trfd to
Lewisham BSF II Pension Fund 2012
Aquatrine Operations 10 -
94
Lewisham BSF III Operations 13 -
22
Lewisham BSF IV Construction - 22
34
TOTALS 23 22
151
PFI equity portfolio ndash estimated valuation
75
100
125
150
175
200
100 95 90 85 80 75 70 65 60
Esti
mate
d V
alu
ati
on
(poundm
)
Discount Rates
Valuation of Current Portfolio
The value of the restructured business following the formation of Severn Trent Costain
Results for the year ended 31 December 2012
6 March 2013
Results for the year ended 31 December 2012
6 March 2013
Appendix
Results for the year ended 31 December 2012
Balance sheet
23
31 December 2012 2011
poundm poundm
Assets
Non current assets 912 952
(excluding pension deficit deferred tax)
Trade and other receivables 1832 1903
Cash 1074 1417
Current assets 2906 3320
Total assets 3818 4272
Current liabilities (3031) (3483)
Total Assets less current liabilities 787 789
Non Current liabilities (69) (84)
(excluding net pension liability)
Pension liability net of deferred tax (400) (397)
Total Equity 318 308
Results for the year ended 31 December 2012 24
Status Invested
Capital
Committed
Capital
Directors
Valuation
Bridgend Sold
Kings Sold
Sirhowy Sold
Kent Schools Sold
Ealing Schools Sold
Shropshire Sold
Kent Elderly Sold
Kingston
3 Shires - Lincolnshire Trfd to
3 Shires - Leicester Pension
3 Shires - Derby Fund
Bradford BSF I 2010
Lewisham BSF I
Bradford BSF II Trfd to
Lewisham BSF II Pension Fund 2012
Aquatrine Operations 10 -
94
Lewisham BSF III Operations 13 -
22
Lewisham BSF IV Construction - 22
34
TOTALS 23 22
151
PFI equity portfolio ndash estimated valuation
75
100
125
150
175
200
100 95 90 85 80 75 70 65 60
Esti
mate
d V
alu
ati
on
(poundm
)
Discount Rates
Valuation of Current Portfolio
The value of the restructured business following the formation of Severn Trent Costain
Results for the year ended 31 December 2012
6 March 2013
Appendix
Results for the year ended 31 December 2012
Balance sheet
23
31 December 2012 2011
poundm poundm
Assets
Non current assets 912 952
(excluding pension deficit deferred tax)
Trade and other receivables 1832 1903
Cash 1074 1417
Current assets 2906 3320
Total assets 3818 4272
Current liabilities (3031) (3483)
Total Assets less current liabilities 787 789
Non Current liabilities (69) (84)
(excluding net pension liability)
Pension liability net of deferred tax (400) (397)
Total Equity 318 308
Results for the year ended 31 December 2012 24
Status Invested
Capital
Committed
Capital
Directors
Valuation
Bridgend Sold
Kings Sold
Sirhowy Sold
Kent Schools Sold
Ealing Schools Sold
Shropshire Sold
Kent Elderly Sold
Kingston
3 Shires - Lincolnshire Trfd to
3 Shires - Leicester Pension
3 Shires - Derby Fund
Bradford BSF I 2010
Lewisham BSF I
Bradford BSF II Trfd to
Lewisham BSF II Pension Fund 2012
Aquatrine Operations 10 -
94
Lewisham BSF III Operations 13 -
22
Lewisham BSF IV Construction - 22
34
TOTALS 23 22
151
PFI equity portfolio ndash estimated valuation
75
100
125
150
175
200
100 95 90 85 80 75 70 65 60
Esti
mate
d V
alu
ati
on
(poundm
)
Discount Rates
Valuation of Current Portfolio
The value of the restructured business following the formation of Severn Trent Costain
Results for the year ended 31 December 2012
6 March 2013
Results for the year ended 31 December 2012
Balance sheet
23
31 December 2012 2011
poundm poundm
Assets
Non current assets 912 952
(excluding pension deficit deferred tax)
Trade and other receivables 1832 1903
Cash 1074 1417
Current assets 2906 3320
Total assets 3818 4272
Current liabilities (3031) (3483)
Total Assets less current liabilities 787 789
Non Current liabilities (69) (84)
(excluding net pension liability)
Pension liability net of deferred tax (400) (397)
Total Equity 318 308
Results for the year ended 31 December 2012 24
Status Invested
Capital
Committed
Capital
Directors
Valuation
Bridgend Sold
Kings Sold
Sirhowy Sold
Kent Schools Sold
Ealing Schools Sold
Shropshire Sold
Kent Elderly Sold
Kingston
3 Shires - Lincolnshire Trfd to
3 Shires - Leicester Pension
3 Shires - Derby Fund
Bradford BSF I 2010
Lewisham BSF I
Bradford BSF II Trfd to
Lewisham BSF II Pension Fund 2012
Aquatrine Operations 10 -
94
Lewisham BSF III Operations 13 -
22
Lewisham BSF IV Construction - 22
34
TOTALS 23 22
151
PFI equity portfolio ndash estimated valuation
75
100
125
150
175
200
100 95 90 85 80 75 70 65 60
Esti
mate
d V
alu
ati
on
(poundm
)
Discount Rates
Valuation of Current Portfolio
The value of the restructured business following the formation of Severn Trent Costain
Results for the year ended 31 December 2012
6 March 2013
Results for the year ended 31 December 2012 24
Status Invested
Capital
Committed
Capital
Directors
Valuation
Bridgend Sold
Kings Sold
Sirhowy Sold
Kent Schools Sold
Ealing Schools Sold
Shropshire Sold
Kent Elderly Sold
Kingston
3 Shires - Lincolnshire Trfd to
3 Shires - Leicester Pension
3 Shires - Derby Fund
Bradford BSF I 2010
Lewisham BSF I
Bradford BSF II Trfd to
Lewisham BSF II Pension Fund 2012
Aquatrine Operations 10 -
94
Lewisham BSF III Operations 13 -
22
Lewisham BSF IV Construction - 22
34
TOTALS 23 22
151
PFI equity portfolio ndash estimated valuation
75
100
125
150
175
200
100 95 90 85 80 75 70 65 60
Esti
mate
d V
alu
ati
on
(poundm
)
Discount Rates
Valuation of Current Portfolio
The value of the restructured business following the formation of Severn Trent Costain
Results for the year ended 31 December 2012
6 March 2013
Results for the year ended 31 December 2012
6 March 2013