26th August 2004 - Results first half year 2004

1

Results first half year 2004

Henk Bosma, CEO

Amsterdam, 26th August 2004

26th August 2004 - Results first half year 2004

2

Agenda

• Strategy

• Results first half year 2004

3 26th August 2004 - Results first half year 2004

Strategy

26th August 2004 - Results first half year 2004

4

Strategy

• Major full service provider in Dutch ICT-market

(“national champion”)

• Profitable services in infrastructure management in UK

ICT-market (“niche player”)

• No reasons for a change of strategy for the time being

26th August 2004 - Results first half year 2004

5

Consolidation

• Questions:

• Will the consolidation tendency go on?

• At which pace?

• Will it affect PinkRoccade?

• Answers:

• Yes, likely

• It will take another 3 to 5 years

• It will affect every full service provider so we will watch developments

carefully and take steps when necessary

• Conclusion: It is of the highest importance to improve

the results of the company shortly, not to spend a lot of

energy on other matters

26th August 2004 - Results first half year 2004

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Consequences

• PinkRoccade will strengthen its commercial ability and

at the same time reduce the costs further

• PinkRoccade will restructure its organisation from a

business unit model to a functional model with a strong

market orientation

• PinkRoccade is looking actively for a successor of the

present CEO who will retire by mid 2005

7 26th August 2004 - Results first half year 2004

Results first half year 2004

26th August 2004 - Results first half year 2004

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Highlights

• Net revenues euro 347.0 million (H1 2003 euro 372.1

million)

• Operating profit euro 5.1 million (H1 2003 euro 15.4

million)

• Net profit euro 1.9 million (H1 2003 euro 7.5 million)

• Net profit per share euro 0.08 (H1 2003 euro 0.31)

• As expected, the first indications for market recovery

became visible during Q2 2004

• Pent up demand is a driver of this recovery

• Improving utilisation rates in time and material business

9 26th August 2004 - Results first half year 2004

Financials

26th August 2004 - Results first half year 2004

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Revenue assessment H1 2004

Revenue decreased 6.7% compared to H1 2003

0

50

100

150

200

250

H1 01: 397 H1 02: 419 H1 03: 372 H1 04: 347

Q1

Q2

Q3

Q4

175172

26th August 2004 - Results first half year 2004

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1st half year 2004 (Euro 347 mln)

32%

15%15%

16%

7%

15% Central Government

Local Government

Finance

Industry

Healthcare

International

1st half year 2003 (Euro 372 mln)

34%

16%14%

16%

6%14%

Revenue in vertical markets

26th August 2004 - Results first half year 2004

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Analysis by vertical markets

H1 2004 H1 2003

Central Government 111,7 124,3 -10,1%Local Government 51,1 61,0 -16,2%Finance 52,3 52,5 -0,4%Industry 57,4 60,9 -5,7%Healthcare 22,5 21,1 6,6%International 52,0 52,3 -0,6%Total 347,0 372,1 -6,7%

26th August 2004 - Results first half year 2004

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Revenue developments

• Decrease in total revenue of 6.7%

• Decrease in second quarter 5.7%, in first quarter 7.7%

• Revenue per FTE increased with approx. 2% in

comparison with H1 2003

• Netherlands: continuous increase in Healthcare,

decrease in Central and Local Government

• UK: stabilisation of revenue

26th August 2004 - Results first half year 2004

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Recurring business > 65%

• Percentage of recurring business stable

• Movements in recurring contracts H1 2004

• Several new contracts in H1 2004, total annual income

approx. 30 mln (a.o. NBTC, Securicor, ProRail)

• In Q3 2004 YTD new contracts with a.o. VROM (total

annual income approx. 15 mln)

mln mln

Contracts to be renewed in 2004 110

Settled in H1 65

Lost contracts and loss of volume 11

Running 34

26th August 2004 - Results first half year 2004

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EBITA assessment 2004(prior years adjusted)

-5

0

5

10

15

20

H1 01: 31.8 H1 02: 12.0 H1 03: 17.3 H1 04: 7.3

Q1

Q2

Q3

Q4

4.33.0

26th August 2004 - Results first half year 2004

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EBITA – EBITAE reconciliation

EBITAE = Earnings before Interest, Taxes, Amortisation of goodwill and Exceptional Items

H1 04 H1 03NL UK Total NL UK Total

Revenue 295,8 51,2 347,0 321,3 50,8 372,1

EBITA 10,2 2,9- 7,3 16,8 0,5 17,3 3,4% -5,7% 2,1% 5,2% 1,0% 4,6%

Exceptionals Sale and lease back 3,5 3,5 3,4 3,4 Rightsizing 1,7- 1,1- 2,8- - Restructuring portfolio 4,4- 4,4- -

2,6- 1,1- 3,7- 3,4 - 3,4

EBITAE 12,8 1,8- 11,0 13,4 0,5 13,9 4,3% -3,5% 3,2% 4,2% 1,0% 3,7%

26th August 2004 - Results first half year 2004

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Net profit assessment 2004(prior years adjusted)

-4

-2

0

2

4

6

8

10

12

H1 01: 18.1 H1 02: 0.3 H1 03: 7.5 H1 04: 1.9

Q1

Q2

Q3

Q4

0.6

1.3

26th August 2004 - Results first half year 2004

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-2000

0

2000

4000

6000

8000

10000

Growth 1717 0 360 274

Per 01/01 7722 9439 8147 7436

Attrition -1056 -1292 -1071 -593

2001 2002 2003 2004

Number of employees

9439 74368147 7117

26th August 2004 - Results first half year 2004

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Profit & Loss Statement H1 2004 (mln euro) Q1 2004 Q2 2004 H1 2004 H1 2003Revenue 174,6 172,4 347,0 372,1Revenue per employee (FTE) 25,3 25,6 50,9 50,0

Operating profit (EBITDA) 8,2 10,7 18,9 31,0Operating profit (EBITDAE) 9,6 13,0 22,6 27,6Operating profit (EBITA) 3,0 4,3 7,3 17,3Operating profit (EBITAE) 4,4 6,6 11,0 13,8Operating profit (EBIT) 2,0 3,1 5,1 15,4EBITA margin 1,7% 2,5% 2,1% 4,6%EBITAE margin 2,5% 3,8% 3,2% 3,7%

Net profit (before amortisation) 1,6 2,5 4,1 9,5Net profit 0,6 1,3 1,9 7,5Earnings/share (before amortisation) 0,07 0,10 0,17 0,39Earnings/share 0,02 0,06 0,08 0,31Average # shares (mln) 24,4 24,5 24,4 24,2

Cashflow from operations 4,6 -6,7 -2,1 20,8

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Balance sheet(mln euro) 30-6-2004 31-12-2003Intangible Fixed Assets 67,6 69,8Fixed Assets 58,7 72,6Stock 5,5 2,9Debtors and amounts to be invoiced 139,3 129,6Current Assets 36,3 32,2Cash & Cash equivalents 10,6 9,0Total Assets 318,0 316,1

Equity 136,5 136,5Provisions 6,7 12,4Long term liabilities 5,6 6,1Current liabilities 169,2 161,1Total liabilities 318,0 316,1

Equity / total liabilities 42,9% 43,2%Equity/ total liabilities (classic) 27,5% 27,1%

26th August 2004 - Results first half year 2004

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Provisions

31-dec-03 Additions Disposals 30-jun-04

Pensions and related 2.335 728 1.607

Group structuring 8.793 1.900 6.054 4.639

Guarantees 1.259 450 1.259 450

12.387 2.350 8.041 6.696

26th August 2004 - Results first half year 2004

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Cashflow statement H1 2004

(mln euro) Q1 2004 Q2 2004 H1 2004 H1 2003Cashflow from operations 4,6 -6,7 -2,1 20,8Cashflow from investments -5,3 11,1 5,8 11,0Cashflow from financing 0,7 -2,8 -2,1 -27,8

Total cashflow 0,0 1,6 1,6 4,0

Banks start period 9,0 9,0 9,0 -28,4Banks end period 9,0 10,6 10,6 -24,4

23 26th August 2004 - Results first half year 2004

Developments

26th August 2004 - Results first half year 2004

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Developments (1)

Netherlands:

• First half year remained difficult, however first indication

of market recovery became visible

• In time and material business, tariffs and utilisation ratios

have increased, mainly in Infrastructure Management

• Developments in Central Government as expected,

reduction of sales because no large outsourcingdeals

26th August 2004 - Results first half year 2004

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Developments (2)

Netherlands:

• Local Government market suffering from spending cuts

and fewer changes in regulations

• In Finance and Industry market, not yet full benefit of

improving market due to fixed price contracts

• Healthcare market shows steady growth and stable

margins

26th August 2004 - Results first half year 2004

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Developments (3)

UK:

• Net revenue stable

• Large new contract with Securicor (euro 60 mln over 7

years) in Q1

• As from June on, operating profit (EBITAE) is positive

on a monthly basis

• Restructuring on schedule

27 26th August 2004 - Results first half year 2004

Outlook

26th August 2004 - Results first half year 2004

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Outlook

• First indications of market recovery; trend expected to

continue

• However, Q3 will be weak due to usual seasonal effects

• Market for outsourcing remains attractive

• Revenue decline will continue to slow off during H2

• No indication of profit level because of uncertainty about:

• Developments in local government market

• Moment of building the provision for the costs of the organisational

transformation

29 26th August 2004 - Results first half year 2004

Results Q3 2004 :

November 11, 2004