Acquisition of Dalkia Technical Facilities Management - Mitie

Acquisition of Dalkia
Technical Facilities
Management
1

Disclaimer
This presentation is the sole responsibility of and has been prepared by MITIE Group Plc (the “Company) solely for its use at the presentation to analysts to be
made in connection with its proposed acquisition of Dalkia Energy and Technical Services Limited and Parkersell Limited as announced by the Company on 12
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2

Disclaimer
-continued
This presentation and the information contained herein are not an offer of securities for sale in the United States. The securities of the
Company proposed to be offered pursuant to the Company’s cash box placing (the "Placing") may not be offered or sold in the United States
absent registration or in transactions exempt from, or not subject to, the registration requirements of the U.S. Securities Act of 1933, as
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future performance.
3

Agenda
• Overview of MITIE
• Overview of Dalkia Technical Facilities Management
• Enlarged group
• Financial analysis
• Summary
4

Strategic outsourcing
and asset management
• Strategy & consultancy
• Facilities & project management
• Service delivery
5

Organisational structure
Before
MITIE
Facilities
Management
Asset
Management
Property
Management
Engineering
Maintenance (MEM)
Infrastructure
Engineering Services
6

Strategy
Deliver stakeholder value through a focus on sustainable
profitable growth
Our seven strategy areas are:
1. Clients
2. People
3. Risk
4. Responsibility
5. Integration
6. Profitability
7. Acquisitions
7

Enhancing FM capability
8

Dalkia FM profile
• Top rated brand for hard FM services:
Technical Facilities Management
Energy Management
Specialist services:
- Controls and alarms
-Fire and Security Systems
- Lighting and Design
- Compliance
• 2,700 people
• UK only
• Order book £0.5bn
9

Dalkia FM enhances capability
Technical facilities management
• Market leading hard services brand with good reputation
• Experienced management team
• Long-term contracts
• Potentially significant cross selling opportunities
Energy management
• Client focus on energy and carbon reduction
• Strategic differentiator for MITIE
• Carboncare - energy strategies
10

Example contracts from Dalkia website
Government - National Assembly for
Wales
Retail – New Look
Transport – Manchester Airport
Finance – Bank of Ireland
11

Organisational structure
After
MITIE
Facilities
Management
Asset
Management
Property
Management
Technical FM
(MEM and Dalkia)
Infrastructure
Engineering Services
Energy management / CarbonCare
12

Client proposition
13

Public sector markets
Public sector
• Key sectors and the market size for MITIE:
Sector
Government
Social housing
Education
Healthcare
Market size pa*
£7bn
£10bn
£13bn
£11bn
MITIE Mar 09
market share %
3.9%
1.2%
1.0%
0.8%
MITIE and DTFM
combined %
4.5%
1.0%
1.4%
0.9%
* Annual report 2009
14

Private sector markets
Private sector
• Key sectors and the market size for MITIE:
Sector
Finance and professional
Manufacturing
Technology and
communications
Retail
Property management
Utilities
Transport and logistics
Leisure
* Annual report 2009
Market
size pa*
£5bn
£5bn
£4bn
£5bn
£6bn
£8bn
£11bn
£2bn
MITIE Mar 09
market share %
4.3%
2.7%
2.3%
2.1%
1.8%
1.0%
0.7%
2.3%
MITIE and DTFM
combined %
5.1%
2.8%
1.9%
4.5%
2.2%
1.1%
1.1%
2.6%
15

Sector split
Sector
Public sector
Government
Education
Social housing
Healthcare
TOTAL
Private sector
Finance and professional
Manufacturing
Retail
Property management
Technology and communications
Utilities
Transport and logistics
Leisure
Construction
TOTAL
% revenue
18
9
8
6
41
14
9
7
7
6
5
5
3
3
59
% proforma MITIE
and DTFM
18
8
7
5
38
14
8
10
6
6
5
7
3
3
62
% difference
-
-1
-1
-1
-3
-
-1
+3
-1
-
-
+2
-
-
+3
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Revenue
• +8.2%
£1,521.9m
MITIE Highlights – March 09
Order book
• +£0.5bn
£4.9bn
Operating profit before amortisation*
• +11.5% £80.5m
Earnings per share before other items **
• +15.4% 17.2p
Dividend per share
• +15.0% 6.9p
2009/10 budgeted revenue secured
• 74%
Underlying Group margins
• +0.2% 5.3%
Multi-service and FM as % of revenue
• +5% 33%
Net funds
• £10.9m
Cash conversion
• 97.5%
* Of acquisition related intangible assets
** Other items are non-cash acquisition related items, being amortisation of intangible assets and unwinding of discount on deferred contingent consideration
17

Dalkia FM Highlights
Actual - for year ended 31 December 2008
• Revenue - £263m
• Reported EBITA - £8.5m
• Adjusted EBITA - £10.1m 1
• Adjusted EBITA margin – 3.8%
• Adjusted EBITDA - £12.6m
Estimate for year ending 31 December 2009 2
• Revenue - £261m
• Adjusted EBITDA - £12.3m
1.Adjusted for management charges paid to Dalkia plc and overheads on a standalone basis
2. Estimate based on management expectation
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Combined pro forma
income statement
Revenue
Operating profit before
amortisation* (EBITA) – pre
synergies
Operating margin
Profit before tax and other items**
Order book
MITIE
Mar 2009
£1,521.9m
£80.5m
5.3%
£78.4m
£4.9bn
Dalkia FM
Dec 2008
£263.2m
£10.1m 1
3.8%
£10.1m
£0.5bn
Combined
£1,785.1m
£90.6m
5.1%
£88.5m
£5.4bn
Pro-forma
growth on Mar
2009
%
17.3%
12.5%
-0.2%
12.8%
10.2%
1 Adjusted for management charges paid to Dalkia plc and overheads on a standalone basis
* Of acquisition related intangible assets
** Other items are non-cash acquisition related items, being amortisation of intangible assets and unwinding of discount on deferred
contingent consideration
19

Deal structure
• Total consideration of up to £130m in cash on a cash free/debt free basis
dependant upon DTFM achieving profit target
• Initial consideration of £120m
• Customary adjustments to the price may be made following a completion
balance sheet process subject to deminimis levels
• Acquisition financed from existing facility of £230m (£265m including
overdraft facility) secured until 2012
• Integration costs are expected to be in the region of £7m
• Annualised synergies are expected to be in excess of an estimated £6m with
full run rate achieved by 31 March 2011
20

Share placing and capital
structure
• Expect to place approximately 6% of MITIE issued capital (19m shares)
• Expect to raise at least £40m
• Allotment of shares is by way of a cashbox and is being managed by UBS and
Investec
•The proceeds of the Placing will be used to partly refinance the debt drawn
down to satisfy the Transaction consideration
• Share numbers immediately following the transaction are expected to be
343m
21

Summary
• Enhances capability as a technical FM company
• Supports our integrated FM offering
• Expected to enhance earnings per share in the year ending March
2011
• Step change for MITIE
• MITIE continues to trade in line with management expectations
22