wsp investor day
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WSP INVESTOR DAY
November 4th 2010
Chris Cole, Chief ExecutivePeter Gill, Group Finance DirectorRikard Appelgren, European Managing Director Stuart McLachlan, Managing Director, Environment & EnergyPaul Dollin, UK Managing DirectorCrossrail Bond Street Station Presentation
AGENDA
Introduce our new strategy plan Meet our executive directors and hear about
their businesses: Rikard Appelgren, European Managing
Director Stuart McLachlan, Managing Director,
Environment & Energy Paul Dollin, UK Managing Director
Insight into a major project: Crossrail, Bond Street Station
Questions
WSP GROUP STRATEGY PLAN 2011-2015Chris Cole, Chief ExecutivePeter Gill, Group Finance Director
November 4th 2010
HIGHLIGHTS
£1bn of revenue by 2015
Deliver upper quartile margin performance
Maintain financial strength and reinforce operational efficiency
Diversify into new, and strengthen existing sectors, within our current regions
Progress our connectivity across regions to support global clients and projects
Proactively maintain focus on Clients and their changing needs
Grow and diversify through Joint Ventures and Alliances
Invest in appropriate support services to deliver strategy
OUR BUSINESS MODEL
Group Strategy
Create sustainable value for all our stakeholders through improving management and diversified growth
The 5 Pillars
Diversified Regional &
Sector Growth
Operational Efficiency
‘WSP WAY’
Client Care
& KAM
Integrated Regional Business Plans
JVs &
Alliances
Optimal Support
Services
WSP STRATEGY PLAN
Create sustainable value for all our stakeholders through improving management and diversified growth
Diversified Regional &
Sector Growth
Operational Efficiency
‘WSP WAY’
Integrated Regional Business Plans
TT
MM
FEFE
INDIND
UKUK EuropeEurope USAUSA AustraliaAustralia AfricaAfrica
INDIND
Middle East
Middle East
INFRAINFRA
TT TT TT
INFRAINFRA INFRAINFRA
TT
FEFE
AsiaAsia
PP
INFRAINFRA
MM
PP PP PP PP PPPP
INDIND
INFRAINFRA
TT
.. .. ..
INFRAINFRA
E&EE&E E&EE&E E&EE&E E&EE&E E&EE&E E&EE&E E&EE&E
Strengthen Existing Regions
• Northern Europe
• USA
• Australia
• South East Asia
Sector Reinforcement
• Future Energy
• Transportation & Infrastructure
• Rail
• Industry
DIVERSIFIED REGIONAL AND SECTOR GROWTH
THE WSP WAY -DRIVING EFFICIENCY AND IMPROVING MARGIN
Respond to changing landscape
Reach a new level of maturity as a group
Develop areas that can drive value
• Leverage technology• Optimise global resource models • Well scoped and commercially
robust project management• Facilitate single source
appointments regionally and globally
• Embed sustainability
“We aim to be commercially, technically and professionally best in class”
CLIENT CARE
Partner of choice 90%+ of revenue derived from local client relationships Client retention and repeat business = foundation of our success Continue to support the 90%+
“90%+ of clients local to our 5 regions”
GLOBAL CLIENTS AND PROJECTS
Key Account Management A select group of clients Progressively extended throughout the Strategy Plan period Identify and add four new global clients each year Grow to 10%+
“10%+ of clients to be truly global”
JOINT VENTURES AND ALLIANCES
Maximise growth where: acquisitions are inappropriate large international
opportunities best served by partnerships
we might be constrained by financial requirements
we might lack specific sector skills
Appropriate route to growth in certain regions.
Increased opportunity and managed risk
ENABLING THE STRATEGY
No strategy is achievable without strong enabling functions to underpin it
Our support functions act as the corporate glue that bind the Group together
We aim to optimise: One Brand Our Talent Management Plan Our Management Structure Cross-Group Integration Knowledge sharing and co-operation
STEPPING UP
We are setting this strategy whilst many of our markets remain challenging and offer poor visibility
We need to ride parallel tracks: Maintain an absolute focus on
operational performance Whilst leveraging the growth
opportunities of the strategic plan
It’s a measure of my confidence in our business and our leadership that I believe we will achieve our dual ambitions
WSP GROUP STRATEGY PLAN 2011-2015Peter Gill, Group Finance Director
November 4th 2010
TRADING RECORD
0
10
20
30
40
50
60
70
80
0
100
200
300
400
500
600
700
800
2005 2006 2007 2008 2009 2010 (marketconsensus)
Adj
uste
d O
pera
ting
Pro
fit £
m
Reve
nue
£m
Revenue ProfitOperating Margin 6.0% 6.6% 7.5% 7.5% 5.7% 5.5%
0
100
200
300
400
500
600
700
800
900
1000
2011 2012 2013 2014 2015
TRADING TARGETSO
perating P
rofit
2011 2012 2013 2014 2015
£1bn
Ope
rating Margin %
Rev
enue
Revenue (£m) Operating Margin (%)
0
KEY PERFORMANCE INDICATORS
Absolute
•Revenues / Profits to budget
•Cash performance to budget
•Debtors / WIP ageing metrics
Trending
•Revenue to £1bn target
•Margin to upper quartile target
•Rolling order intake by value
Efficiency
•% utilisation of technical staff
•£ Contribution per technical employee
•% Indirect costs (overhead) to revenue
•% Offshoring
Clients
•% Repeat business
•Number of Global Key Accounts
DEBT PROFILE N
et
de
bt
(£m
)N
et
cash
(£
m)
2010 2011 2012 2013 2014 2015
-70
30
0
0
100
200
300
400
500
600
700
800
900
1000
2011 2012 2013 2014 2015
REVENUE TARGETS
2011 2012 2013 2014 2015
£1bnR
even
ue
0
Organic Revenue Acquisition Revenue
November 4th 2010
EUROPEAN BUSINESS OVERVIEW
Rikard Appelgren, European Managing Director
Sweden Finland Norway Germany Poland
Population(millions)
9 5 5 82 38
GDP % Growth 2010*
4.4 2.4 0.6 3.3 3.4
GDP % Growth 2011*
2.6 2 1.8 2 3.7
WSP Headcount
2200 330 1200/ 300
350 50
REGION IN NUMBERS
* Source: IMF
B&M Architects Ltd.
OUR MARKET PRESENCE
Country Property Transport & Infrastructure
Environment Energy Industry Managem’t
Sweden
Norway
Finland
Germany
Poland
Major player
Medium player
Small player
WSP SWEDEN
Highly mature business operating since1936
Top 3 player in Sweden Operating in strong economy Well spread local presence will guarantee
local and long term client relations Diversified order book Full range of services delivered from 39
offices across Sweden
THE FIVE LARGEST CONSULTANTS – 40% OF THE SWEDISH MARKET
0
2000
4000
6000
8000
10000
12000
AF Sweco WSP Ramboll Grontmij
HE
AD
CO
UN
T
Sweden Rest of group
A WELL BALANCED BUSINESS- Swedish revenue by services and sectors
Public sector51%
Private Sector49%
SWEDISH ECONOMY – A SUCCESS STORY: WHY?
Sweden has been restructured after financial turmoil in the 90s, mainly due to regulations of the financial sector. Hence Sweden came into the last financial crisis in good shape.
A balanced political agenda for the Swedish economy for the last years has put Sweden in a favorable situation.
State debt now at 2.1% of GDP and still improving. Intention to have a positive net debt A well managed interest rate policy has pushed the investment levels especially in industry less
so in property Transition from manufacturing based economy to balance of manufacturing and service sector Economy now well balanced and well positioned
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
543210-1-2-3-4-5
SWEDEN: OPPORTUNITIES AND CHALLENGES
Stable economy and positive growth for years to come
Infrastructure investments into rail will continue for the next 5-10 years
Strong and healthy relationships with clients will secure long term stability
Well ahead in processes and systems to increase business and sector efficiency
Further consolidation expected within peer group
Increasingly competitive market Skills shortage
Continued investment in large –scale infrastructure projects Future stability in Sweden through growth in Industry and Energy
sectors Wider market penetration across Europe
LOOKING FORWARD
WSP ENVIRONMENT & ENERGY OVERVIEW
November 4th 2010
Stuart McLachlan, Managing Director, Environment & Energy
Launched 1996
Organic growth to 500 in the UK by 2001
Opportunity for global growth with little competition
Began global growth in 2000/2001
By 2007 achieved global footprint
Pause due to downturn
Kick start growth in 2011
Realise Global business aspiration
Cross-sell
Share best practice/ knowledge
Global clients
THE JOURNEY SO FAR
1. WHAT WE DO: CLEANING UP THE LEGACY OF THE PAST
Pasminco Smelter - Australia
Kodak - UK US Coast Guard - DCFederal Mogul - India
Valspar - Australia
ODA - London
2. WHAT WE DO: HELP COMPANIES DO THE RIGHT THING TODAY
Black & Decker – Global Audit ProgrammesChevron - AustraliaEIA Power Project – Riyadh, Saudi
EIA Mining Site - SA DD – Health & SafetyInvensys
3. WHAT WE DO: PREPARING CLIENTS FOR THE FUTURE
MASDAR VIDEO
Burcote Wind onshore wind farms, UK PV Developer Due Diligence, EuropeÄland offshore wind farm, Sweden
Beauly-Denny transmission line, UK Vattenfall onshore wind farms, Sweden Igelsta biofuel CHP plant, Sweden
WSP FUTURE ENERGY
Climate Change and Sustainability Strategy
Integrated Energy Management
Acoustics
EHS Strategyand Risk Man-agementLand
Restoration and Ground Engineering
Planning and Ecosystem Protec-tion
Online Solutions
MY BUSINESS IN PIE CHARTS
UK
Mainland Europe
Scandanavia
Australasia
USA
MEA
Clear Sighted
Global Structure
Delivery Capacity of WSP
Diversified Market Presence
Headroom for Growth
Entrepreneurial Endeavour
Staff and Track Record
MARKET POSITIONING
AN OVERVIEW OF THE UK BUSINESS
November 4th 2010
Paul Dollin, UK Managing Director
Private Sector 70%
Public Sector 20%International 10%
£30m £100m
Private Sector 50%
Public Sector 20%International 30%
£15m
Re
ven
ue
&
Ma
rket
Private Sector 30%Public Sector 30%
Regulated 25%International 15%
Pro
jects
UK BUSINESS OVERVIEW
Advisory Planning Design ConstructConstruct
Se
rvice
Public Sector(Highway JVs)Public Sector(Highway JVs)
£35m
business model
adap
tatio
n
design process
innovation
cost
cost
envi
ronm
ent
environment
j
Pub
lic
Regulated
Private
Skills transfer from road transportation to regulated infrastructure
Selective international work to support WSP regions or where UK skills are world class
Use client focused private sector culture to ‘entrepreneur’ solutions for public sector clients
Focus
MARKET DRIVERS AND OPPORTUNITIES
THE PLAN
FOCUS
• Approach to sectors and International work• On core businesses• Accountabilities on cash and project delivery • Overheads to be fit for 2011 on
Mar
gin
& C
ash
Impr
ovem
ent
Gro
wth
EMBED
• Talent management• Design process and off-shoring• Strategic project wins• Key client management
ENHANCE• Selective skills/markets• Financial/management
info.
AN OVERVIEW OF CROSSRAIL BOND STREET STATION
Tim Peet, Lead EngineerDave Darnell, Crossrail Framework Director
* note: all images throughout this presentation are work in progress
November 4th 2010
Crossrail – The ProjectWestern Overground Section (Existing Route)
Central Section NE Spur Overground (Existing Route)
SE Spur Overground (Existing Route)
• Largest infrastructure project in Europe• West – East 118km• 1500 passengers per train; 24 trains/hour peak (central)• North – South planned• Post-CSR available funding - £14.5bn
Central Section
(Developer funded)(Developer funded)
• Underground stations – 6 public, 2 private• Twin bore 21km running tunnels• Framework Agreement 2008/ Bond Street 2009• Multidisciplinary/ Experience/ Strong Cvs• WSP UK, Environment & Energy and Sweden
• Cityline – Stockholm’s Crossrail• TfL – Maximising Oversite Development (OSD) Value
Design Team – Delivery
• Co-located in Crossrail Offices [over 1750 people] • Led by senior people from across UK businesses• Utilise all WSP skill sets + 6 partners • Crossrail vision and values –
design/simplicity/affordability/maintainability/21st century• Proactive and ‘Can-do’ attitude and culture – challenge / openness• Value – Cost not Programme driven• Extensive VE - Project Assure (summer 2010)• Complex design / Stakeholder interfaces (internal and external)• Integrating public (Crossrail) and private (Commercial OSD’s)
WSP Team
160+ People
Team Structure
Tim Peet Design Management and Assurance
Project ControlsCommercialCDMC/Risk
Contract Estimating
WSP Board
Construction Planning
ArchitectureHuman Factors
Lighting
StakeholdersThird Parties
Interfaces
TransportationTown Planning
Drainage
Environmental Sustainability
MEP Rail
Systems
CivilStructuralGeotech
Fire
Strategic Review Group
Dave Darnell CRL Framework
Crossrail PDPBechtel
Station Location
Key Challenges (Urban Metro – Mayfair)
• Space constraints / Railway Functional Requirements• Sensitive residential area, particularly Davies Street • Significant U&As and Listed Buildings • Noise, Environment, Traffic Management, Constructability,
Damage Assessment (buildings/utilities) - Key issues • Concurrent major congestion upgrade project at LU Bond Street • Integration of 2 OSDs – Grosvenor/Great Portland Estates• 6m diameter TBM’s (Tunnel Boring Machine), before……..• Construct 5 no 5m diameter (min) compensation grout shafts,
300m x 50m grout curtain
Interfaces – Civils
Station BoxesSpaceproofing & Design – C132
SCL TunnelsSpaceproofing/Fit Out – C132Detailed Design – C121
Link to Bond StSpaceproofing – C132Tunnel – LU
Bored TunnelsSettlement – C122
“Lead” Design ConsultantWSP (C132)
Grosvenor Estates(WTH)
Westminster CC (Mayfair)
Great Portland Estates(ETH) WSPCS
Crossrail/LU/Network Rail
>300m length
Longitudinal Section
Separate WSP Clients
Jubilee LineRunning Tunnels
2nd longest escalator LU
1
35 - 40m deep station boxes
Marriage - Public/Private Sectors(‘knitted together’)
LOD
3D Co-ordinated Model
Western Ticket Hall Structure Eastern Ticket Hall Structure
Tunnel Cross Section - StationNWR LU
Overground Trains(OHE)
10 m
0.9m
Summary
• WSP enjoy constructive working relationship with Crossrail and PDP
• Finding buildable/affordable/safe constructable solutions
• ‘the Crossrail Expert Peer Panel Review Team is confident that most of the opportunity in finding value at Bond St has been driven out of the design’
• Complex – provides opportunity - ETH Masterplan• WSP on UK Rail map • Hard work and fun!
THANK YOU.ANY QUESTIONS?
WSP Group plc (the “Company”)Cautionary Statement
• Some statements contained in this presentation are or may be forward-looking statements. Such statements reflect the Company’s current views with respect to future events and are subject to risks, assumptions, uncertainties and other factors beyond the Company’s control that could cause actual results to differ from those expressed in such statements. Although the Company believes that such forward-looking statements, which speak only as of the date of this presentation, are reasonable, no assurance can be given that they will prove to be correct. Therefore, you should not place undue reliance on these statements.
• There can be no assurance that the results and events contemplated by the forward-looking statements contained in this presentation will, in fact, occur. The Company will not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect events, circumstances or unanticipated events occurring after the date of this presentation, except as required by law or by any appropriate regulatory authority. Nothing in this presentation should be considered as a profit forecast.
• Past performance of the Company or its shares cannot be relied on as a guide to future performance.
• This presentation does not constitute, or form part of or contain any invitation or offer to any person to underwrite, subscribe for, otherwise acquire, or dispose of any shares in the Company or advise persons to do so in any jurisdiction, nor shall it, or any part of it, form the basis of or be relied on in any connection with or act as an inducement to enter into any contract or commitment. In particular, this presentation and the information contained herein are not an offer of securities for sale in the United States.
• No reliance may be placed for any purpose whatsoever on the information or opinions contained in this presentation or on its completeness and no liability whatsoever is accepted for any loss howsoever arising from any use of this presentation or its contents or otherwise in connection therewith.
4 November 2010
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