Vision 2015
Assured growth
Bank of America Merrill Lynch, London
4 December 2009
Important information
Certain statements in this presentation are forward looking statements.
By their nature, forward looking statements involve a number of risks,
uncertainties or assumptions that could cause actual results or events
to differ materially from those expressed or implied by the forward
looking statements. These risks, uncertainties or assumptions could
adversely affect the outcome and financial effects of the plans and
events described herein. Forward looking statements contained in this
presentation regarding past trends or activities should not be taken as
representation that such trends or activities will continue in the future.
You should not place undue reliance on forward looking statements,
which apply only as of the date of this presentation.
This presentation does not constitute or form part of any offer or
invitation to sell, or any solicitation of any offer to purchase any shares
in the Company, nor shall it or any part of it or the fact of its distribution
form the basis of, or be relied on in connection with, any contract or
commitment or investment decisions relating thereto, nor does it
constitute a recommendation regarding the shares of the Company.
Past performance cannot be relied upon as a guide to future
performance.
2
Vision 2015
Assured growth
Samir Brikho, Chief Executive
Draft 9 12December 2009Draft
Draft 11 November 2009Draft
Draft 10 30 December2009Draft 9
1 November 2009Draft
10 30December22009Draft 92 30
Today’s presentations
10:30 Vision 2015 overview Samir Brikho
10:50 Natural Resources Neil Bruce
11:10 Power and Process Neil Bruce
11:30 Earth and Environmental Roger Jinks
11:45 Financials Ian McHoul
11:55 Summary Samir Brikho
12:00 Q&A All
13:00 Lunch
14:00 Event ends
4
Agenda
What have we achieved so far?
What is our new goal?
How will we get there?
5
What have we achieved so far?
Culture UNIFIED
Employees FOCUSED
Customer relationships ENHANCED
Cost base REDUCED
Balance sheet STRONG
Financial performance STRENGTHENED
Competitive position ADVANCED
Platform for assured growth
6
Our track record of success
Revenues EBITA margin Diluted EPS*
2006-2009 (£m) 2006-2009 (%) 2006-2009 (p)
3000
10 50
2500 8 40
Approaching 8%
2000 6 30
1500
4 20
1000
500 2 10
0 0 0
2006 2007 2008 2009** 2006 2007 2008 2009 2006 2007 2008 2009**
8% cagr# Margin doubled 41% cagr#
Focus has been on margin improvement
Firmly on track to deliver 2010 margin target of 8.5%
* Diluted earnings per share from continuing operations before intangible amortisation and exceptional items; ** Market consensus as at 3 Dec 2009;
# Compound average growth rate 2006-2009
7
Our vision
To be the leading supplier of high-value
consultancy, engineering and project management
services to the world’s natural resources, nuclear,
clean energy, water and environmental sectors
8
Vision 2015 goal Assured growth
>100p
EPS*
Capital structure
More efficient capital
structure
Focus on growth Increased
Enhancing our acquisitions
capabilities Shareholder
Employees Enhancing our distributions
geographic footprint
Strengthening our
people
Integrated approach
Harmonising tools
and processes
Increased focus on growth with further margin improvement
* Diluted EPS 2015
9
Strengthening our people
Recruiting talented people
Investing in education and training
Providing career development
Harmonising tools and processes
Making the best even better
10
Enhancing our capabilities
Natural Resources Power and Process
Deepwater/complex upstream projects Nuclear
Asset support Transmission and
Duty holder distribution
Subsea engineering (SURF) Renewable energy
Pipeline engineering
Underground mining
Earth and Environmental
Environmental consultancy
Water
Improving and extending our services offering
Blue text denotes new area of focus
11
Enhancing our geographic footprint
Current locations
Investment focus
Up-sizing in selected regions
Australasia
Latin America
Middle East
Continued growth in Africa,
Europe and North America
Selective expansion in targeted regions
12
Integrated approach to growth
New capital projects increasingly large and complex
Growth in environmental and community issues
Changing customer requirements
AMEC has an unparalleled services offering: Earth and Environmental
Cross-divisional approach
Synergies
Strategic customer management
Unparalleled services offering
13
Managing assured growth
Operational leadership team
Samir Brikho
Chief Executive
New organisational structure for Vision
2015 reflects:
Changes in end market focus
Customer needs
Integrated approach
Neil Bruce Roger Jinks
Natural Resources Earth and Environmental
Power and Process
New organisation for integrated approach
14
Vision 2015
Natural Resources division
Neil Bruce, Executive Director,
Chief Operating Officer, Natural Resources
Natural Resources Overview
17% Oil and Gas
Services
Leading positions in long-term growth markets
54%
Oil Sands Customer focused organisation, with major
29% customers including
Minerals and
Metals Mining Shell, ExxonMobil, BP, Chevron, BG,
ConocoPhillips, Inpex, PotashCorp, Teck
Revenue split 2009e
High proportion of revenues from IOCs and
mining majors
c.10,000 employees
Broad geographic footprint
Balanced portfolio of Capex / Opex
Strong financial performance
Strong and growing business
16
Natural Resources Strong financial performance
Revenues (£m) EBITA (£m)
% EBITA margin
End market strength coupled with 1600
11.6%
160
internal initiatives have enhanced 1400 140
10.7%
performance 1200
9.4%
120
Margin increases in both Capex 1000
7.2%
100
and Opex 800 80
Strategic positioning on the 600 60
400 40
conceptual / front end of projects
200 20
0 0
2006** 2007 2008 2009*
Sector leading margins
* Market consensus as at 3 December 2009
** Excluding lump sum fabrication revenues of £103 million
17
Natural Resources Key market segments
Existing area of focus
Key area of market growth
(+) New area of focus
No AMEC position
Onshore Underground
Production Mineable Surface
Mining (+)
Oil Sands Mining
Floating Fixed
Insitu Oil GTL/LNG/ Insitu
Drilling Production Production Land Refineries Leaching
Seismic Systems Platform Rigs Sands
Rigs
SURF (+)
Well Services
Oil and Gas Oil Sands Mining
18
Natural Resources Customers
Earth and Environmental
Increasingly recognised as the supplier of choice
19
Natural Resources Positioned for growth
c.8-12% of TIC**
Estimate* of
AMEC wins
industry
significant
downturn
number of
awards in c.1% of TIC** Phase II:
40%
delayed 2008/9 Consulting
or part- Phase I: Detailed
delayed
Concept Design
Front-end Engineering
Construction
BP: Clair Ridge Management
60% to
start BP: Tubular Bells Procurement
BP: Kodiac
Exxon: Kizomba
Chevron: SMADS
Inpex: Ichthys
Shell: Malikai
Petrobras/QUIP: P63
2008 2009 2010 2011 2012
* Source AMEC
** TIC: Total Investment Cost
20
Natural Resources What do customers want?
High value front-end services reduce
High value front-end services: overall cost of project
135%
35
The best engineers and project managers 30
130%
Investment in people and processes
Variance from approved cost (%)
125%
25
Ability to handle large and increasingly
120%
20
complex projects
115%
15
Safe and sustainable track record of 110%
10
delivery
105%
5
Local delivery 100%
0
Financial strength 95%
-5
POOR FAIR
POOR WEAK FAIR BETTER BEST
-10
90%
-15
85%
Quality of front-end services
Source: AMEC; Independent Project Analysis Inc
Customers increasingly focused on high value
21
Natural Resources Market trends
Major deepwater/complex projects have suffered delays in 2008/9
but are expected to move into investment approval
Aging infrastructure
Maximising recovery from depleting reserves
Resources more difficult to extract
Deepwater, Arctic, Oil Sands, Underground Mining
Increasing environmental pressures
New projects increasingly large and complex
Differentiation versus commoditisation
22
Natural Resources Key growth opportunities
Deepwater / complex upstream developments
Africa, Brazil, SE Asia, Arctic, Caspian
Opex investment on aging assets
Brownfield services
Complex de-bottlenecking
Duty holder
SURF segment
Deepwater and tie-backs
Pipelines
Onshore and offshore engineering
Mining
Underground mining
Continued geographical expansion
AMEC to benefit from growth opportunities
23
Natural Resources Summary
Well positioned in the right markets
Strong relationships with the right customers
Focused investment in “hot” markets
Deepwater/complex projects
OPEX/Brownfield projects
Pipelines engineering
Subsea engineering
Continued geographic expansion
Strong and growing business
24
Vision 2015
Power and Process division
Neil Bruce, Executive Director,
Chief Operating Officer, Power and Process
Power and Process Overview
Nuclear
Nuclear
Conventional Power
Leading positions in long-term growth
23% Conventional Power
29%
T&D
Transmission && Distribution
Transmission Distribution
markets
14% Renewables
Renewables Major customers include EDF; National
24% Bio-Process
Bio-Process Grid; Southern Company; UK NDA
7%
3% Other
Industrial
c.7,000 employees
Revenue split 2009e
UK/North American focus of operations
Balanced portfolio of Capex/Opex
Strategic refocusing near complete
Well positioned for profitable growth
26
Power and Process Performance improvement
Revenues (£m) EBITA (£m)
Focus on higher value activities with 1200
% EBITA margin
90
lower risk
1000 75
2009 revenue decline partly reflects exit
800
6.5%
60
from non-strategic activities 5.8%
Legacy contracts progressing to
600
4.3%
45
400 30
completion as expected 2.9%
Financial performance improving but
200 15
yet to fully reflect change of focus 0 0
2006 2007 2008 2009*
Margin doubled since 2006
* Market consensus as at 3 December 2009
27
Power and Process Change of market focus
Analysis of revenue by end market
2008 2015 fcst
Nuclear
Nuclear
21% Conventional Power
Conventional Power 22% 26%
30%
T&D
Transmission & Distribution
Renewables
Renewables 11%
24%
Bio-Process
Bio-Process
21%
16% 20%
4% 5% Other
Industrial
Mainly organic growth with targeted bolt-on acquisitions
Increasing focus on new energy challenge
28
Power and Process Risk profile improving
Continued emphasis on higher value services
Consultancy, Engineering and Project / Programme Management
Some lump sum activities with lower risk
Selective approach
c.10% of revenues
No lump-sum turnkey
Growth in EPC activity
Disciplined approach
Significant growth in reimbursable activity
Continued focus on higher added value activities with lower risk
29
Power and Process Key market segments
Existing area of focus
Key area of market growth
(+) New area of focus
Biofuels
No AMEC position
Biomass
Onshore
Wind
Solar
Offshore
Wind
Smart Grids
Hydrogen (+)
Gas Processing
storage
Gas T&D
Nuclear
Electricity
Conventional T&D
Power
CCS (+)
30
Power and Process Market trends
Energy and Power
Increasing demand for energy
Changing mix
Nuclear renaissance
Climate change issues
Environmental targets and legislation driving
clean technologies
Large growth in investment in “clean energy”
Growing need for security of supply
Transmission & Distribution
Continued refurbishment due to historical
under-investment
Growth in renewable energy sources
requiring grid connection
Smart grids
Strong market drivers for low carbon technologies
31
Power and Process Customers
WALES&WEST
UTILITIES
Sellafield Ltd
Earth and Environmental
32
Power and Process What do customers want?
Best in class engineering and project management
Best people
Innovative and high value added solutions
Alliancing and partnering
Large and increasingly complex projects
Safe and sustainable track record of delivery
Cost competitive offering
Strong balance sheet
Creating stakeholder value
33
Power and Process Summary
Well positioned in the right markets
Strong relationships with the right customers
Strengthening the portfolio
Smart grids
CCS
Continued focus on higher added value activities with lower risk
Well positioned for profitable growth
34
Vision 2015
Earth and Environmental division
Roger Jinks,
Chief Operating Officer, Earth and Environmental
Earth and Environmental
Environmental
Consulting High value consultancy and program
26% Government management services
49%
Water and
Transportation
Strong growth record
25% Infrastructure
c.4,500 employees
Revenue split 2009e North American focus of operations
Well diversified portfolio of services
Major customers include CSX; Suncor;
ExxonMobil; US Army/Air Force/Navy
Cross-AMEC synergies
Significant growth opportunities
One of the world’s leading environmental and
engineering consulting organisations
36
Earth and Environmental
Financial performance
Revenues (£m) EBITA (£m)
% EBITA margin
Performance reflects quasi-organic 600 60
8.3%
growth business model 500 50
18% CAGR 2006-2009 400
8.4%
40
Industry predominantly North 300
7.4%
30
American
200 20
Increased efficiencies through 5.8%
100 10
internal initiatives
0 0
2006 2007 2008 2009*
Strong track record of growth
* Market consensus as at 3 December 2009
37
Earth and Environmental
Key market segments/services
2009e revenue by sector 2009e revenue by service
Municipal / Federal/ Infrastructure
Water State/Provincial
14% 15%
Environmental
27%
Energy 33%
12% Government
Program 19%
Management
16% 16%
Mining Industrial/ 9% 15%
15% Commercial Materials 9%
Geotechnical
Transportation/ Water
Infrastructure
Strong diversification and Consistent service offering
ability to be responsive to hot across all end markets
and cold markets
38
Earth and Environmental
Customers
Earth and Environmental
39
Earth and Environmental
What do our customers want?
High added value
Best people, smart solutions
Global expertise, delivered locally
Regulatory approvals/integrated approach
High percentage of repeat business
40
Earth and Environmental
Market trends
Growth and enforcement of environmental
legislation
Increasing corporate social responsibility
High growth for water resource management
and air pollution control
Increasing investment in aging infrastructure
Increasing use of brownfield sites and
exploration of environmentally sensitive
regions
Highly fragmented market provides continuing
opportunities for acquisitions
Increasing opportunities from
regulatory approvals/community relations
41
Earth and Environmental
Long-term growth market
Long-established North American market
8% long-term growth in US total market*
Higher growth European and other international markets
Highly fragmented industry
Strong track record of successful acquisitions
Significant future opportunities
Significant opportunities for growth
* Source: EFCG, 2009
42
Earth and Environmental
Key growth opportunities
Water
Water supply; water quality; ground
and surface water
Renewables
Climate change services; renewable
energy; energy management
Global growth
Europe
Australasia
South America
Africa
Continued focus on multinational clients
43
Earth and Environmental
Assured growth
Recruiting and retaining the right people
Continued development of seller-doer business model
Sourcing and integrating acquisitions
Scaling up of decentralised business model
44
Vision 2015
Financials
Ian McHoul, Chief Financial Officer
Draft 9 12December 2009Draft
Draft 11 November 2009Draft
Draft 10 30 December2009Draft 9
1 November 2009Draft
10 30December22009Draft 92 30
Balance sheet
£ million 30 Jun 2009
Intangible assets 400
Tangible fixed assets -
Working capital (net) -
Pension assets (net) 100
Provisions (200)
300
Cash 700
Shareholders’ funds 1,000
People business
Minimal tangible assets
Strong cash position
Asset light; strong balance sheet
46
Cash flow
Expect higher cash conversion from profit Profit* Cash**
Potential gap for investment in
£ million
160
expansionary working capital 140
120
Significant volatility over past 2.5 years 100
80
Expect the “gap” to reduce significantly 60
H2 cash flow typically stronger than H1
40
20
0
Significant improvement expected in 2009 FY2007 FY2008 H1 2009
H12009
cash conversion
Increased focus on cash conversion
* Before amortisation and exceptional items
** Before capital transactions
47
Cash conversion Surplus/shortfall to profit
£ million FY2007 FY2008 H12009
Client advances repaid (4) (20) (5)
Working capital 72 (63) (21)
Pension payments* (31) (32) (3)
Tax** (6) (10) (24)
Surplus/(shortfall) 31 (125) (53)
Client advances are now small (c.£15 million at 30 June 2009)
Working capital movements can be “lumpy”, and are typically
more favourable in the second half
Pension payments* are reducing significantly
Tax payments are first half biased
Expect the shortfall to reduce significantly
* In excess of amounts recognised in the income statement
** Excess of tax paid over tax charges
48
Reaching our 2015 goal
Margin
Revenue growth
improvement
>100p
EPS*
Cash Tax
investment efficiencies
* Diluted EPS 2015
49
Vision 2015 Planning assumptions
Projections assume “mid cycle” market
Gradual improvement to “neutral” market conditions
No return to buoyancy
Oil price stability
2010 market to remain challenging
Firmly on track to deliver 2010 margin target of 8.5%
Projections not dependent on a buoyant market
50
More efficient capital structure
Focus on cash flow remains strong
Intention to increase level of investment
Acquisitions most attractive
Shareholder distributions
Maximising shareholder returns
51
Acquisitions
Strong track record
“Bolt-on” transactions
ROIC > WACC in year one or two
Significant opportunities
“Bolt-on” targets
Larger targets
Expect to increase level of investment
52
Shareholder distributions
Half-yearly dividends
Progressive policy
Satisfied with existing cover
“Additional distributions” possible
Dependent on outlook for acquisitions – need to retain flexibility
No near-term plans
Do not expect “additional distributions” in 2010
53
Reaching our 2015 goal
Revenue Margin
growth improvement
Ahead of More gradual
historic levels1 than historic
levels2
>100p
EPS3
Focus on Proactive
acquisitions planning
Cash Tax
investment efficiencies
Assured growth
1 8% CAGR 2006 to 2009 (consensus)
2 2006 to 2009 (target)
3 Diluted EPS 2015 54
Vision 2015
Assured growth
Samir Brikho, Chief Executive
Draft 9 1 December 2009Draft 9
Draft 10 30 November 2009Draft
2
30 November 2009Draft 2
Vision 2015 goal Assured growth
>100p
EPS*
Capital structure
More efficient capital
structure
Focus on growth Increased
Enhancing our acquisitions
capabilities Shareholder
Employees Enhancing our distributions
geographic footprint
Strengthening our
people
Integrated approach
Harmonising tools
and processes
Increased focus on growth with further margin improvement
* Diluted EPS 2015
56
Vision 2015
Assured growth
Questions
AMEC plc
Vision 2015
Supplementary information
Cash conversion*
Profit** (£m) FY2007 FY2008 H12009
PBT 126 207 93
Tax (32) (63) (25)
Discontinued (4) 1 (1)
Profit 90 145 67
Cash*** (£m)
Cash generated from operations 140 69 60
Interest paid (4) (8) (1)
Interest received 23 32 4
Tax paid (38) (73) (49)
121 20 14
Difference 31 (125) (53)
* All numbers from published statutory accounts
** Before amortisation and exceptional items
*** Before capital transactions
59
Natural Resources The competitive landscape
Major Player
AMEC Schlumberger AkerKvaerner KBR Wood Group Petrofac
Capability
Exploration & Drilling
Facilities/Jacket
Offshore Eng.
Hulls/Mooring
Subsea
Upstream
Pipelines
Project Management
Onshore facilities engineering
Maintenance, mods, operations
Oil Sands - Upstream
Oil Sands - Downstream
Pipelines - Engineering
Downstream
Refineries - Engineering
Petrochemical plants - Eng.
Gas Processing
Maintenance, mods, operations
60
Power and Process The competitive landscape
Nuclear Transmission and Distribution
Reactor Support Waste Management New Build (UK and Europe) (Americas)
Acciona Balfour Beatty
Jacobs Serco Babcock Balfour Beatty Black and Veatch
AECL Bechtel AECL Babcock Networks Bechtel
Doosan Babcock CH2MHILL CH2MHILL Poyry Burns and McDonnell
PB Power Hawkeye
SNC Lavalin
Design Services (all power sectors) EPC Services (all power sectors)
Design Services (Europe) Design Services (Americas) EPC (Europe) EPC (Americas)
Burmeister and Vein Bechtel Acciona Black & Veatch
Fichtner Burns and McDonnell Babcock Group Day & Zimmerman
Mott McDonald Black & Veatch Balfour Beatty Kiewit
Poyry Sargent & Lundy Bilfinger Berger McDermott
PB Power Shaw Group Doosan Babcock Shaw
SNC Lavalin Suez Tractebel URS
61
Power and Process The competitive landscape
Bio-Process
(UK) (Americas)
Bilfinger Berger CH2MHill
Doosan Babcock Harris Group
Fabrikon ICM
Interserve POET
PRAJ
62
Earth and Environmental The competitive landscape
EBIT margin by Competitor*
n
ica
E
er
E&
an
Am
pe
EC
rth
ro
AM
Eu
No
14%
12%
10%
8%
Margin (%)
6%
4%
2%
0%
2%-
A
A
St
Te
Sh
C
TR
R
W
W
B
H
Ec
A
Ve
U
M
rc
H
PS
ak
yd
EC
R
an
YG
.S
tr
aw
o
rs
C
2M
S
EC
4%-
ad
a
er
er
.
te
&
O
ar
G
A
Te
is
H
M
c
ro
En
E&
tk
IL
6%-
ch
in
up
v
L*
E
s
*
*Competitor margins reported for total company.
* *As CH2MHILL is a private company, EBIT margin was identified per SEC Filings.
Source: EFCG April 2008, ENR July 2007, Thomson
63