WS Atkins Plc UK Growth Markets

WS Atkins plc UK growth markets

Analyst breakfast 28 March 2017

1 Nick Roberts

UK and Europe, chief executive officer

2 Overview

The market • UK Government has reaffirmed its commitment to key national projects in its recently announced industrial strategy • Large project pipeline includes High Speed 2, Crossrail 2, Hinkley Point C and Heathrow expansion • Well funded regulatory cycles in rail, roads and water with attractive growth opportunities Atkins • Multi disciplinary offering with differentiation through our technical excellence, increasing use of technology and our global design centres • Strong position and delivery track record in a market with good growth opportunities.

3 What we do

Transportation Infrastructure Aerospace, Defence, • Highways and intelligent • Urban development Security and Technology transport systems • Buildings • Rail and urban transport • Water and environment (ADS&T) • Aerospace • Aviation • Education • Defence and security • Technology solutions and Energy services • Nuclear • Business consulting • Power and renewables

4 Our markets and clients A well balanced portfolio (£944m revenue)

Revenue by sector Revenue by client type 3% 9% 4% 14%

6% 34% 31%

7% 27%

8% 14% 15% 28%

Rail (including mass transit) Defence and security Public sector:local government Highways Water and environment Public sector: national government Aeropsace and aviation Education Urban development Buildings Regulated Other Private sector

• UK segment includes F+G, our project and programme management business 5 Financial performance Operational excellence and portfolio optimisation success

UK and Europe revenue UK and Europe operating margin (%)

1,000 8.0 800 7.5 7.8 7.0 600 6.5 6.7 £m 6.0 6.4 6.3 400 5.5 5.7 5.0 200 4.5

0 4.0 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016

Continuing operations Disposals

• UK segment includes F+G, our project and programme management business • H1 2017 UK and Europe operating margin of 8.7%.

6 Our focus 2011 to 2016

Operational excellence • Organisational re-shaping and consolidation • Measures to improve productivity

Portfolio optimisation • Highways services • Poland • Portugal Sector growth • Terramar acquisition • Organic investment.

7 Our focus 2017 and beyond

Ongoing operational excellence initiatives

Digital opportunities • Digital asset management • Intelligent mobility • Cyber

Four key growth markets • Strategic highways • Water • Defence • High speed rail.

8 Growth through differentiation

Well-positioned to build on the strength and depth of our client Client relationships, develop strategic partnerships and relationships with relationships contractors and other supply chain partners, to deliver added value services and propositions

Our clients value our unique ability to bring experience and best Collaboration practice expertise from across the different market sectors in which Atkins operates and from our global design centres

Our investment in Intelligent Mobility, Digital Engineering and Technology Digital Asset Management increasingly recognised by our clients.

9 Strategic highways

Contains private information 10 Strategic highways Market overview

Total capital spend per annum across strategic highways of £3.4bn Strategic highways – 7,500 miles of strategic highways in UK, including 4,500 miles in England

Core design services • Strategic highways improvements – UK wide • Smart Motorways programme

Advisory and consultancy services • Author of Highways England’s strategic economic growth plan • Route strategy work to inform second Road Investment Strategy 2 (2020-2025) • Asset valuation services for all four UK Strategic Highway Authorities.

Atkins’ addressable spend in UK strategic highways estimated in excess of £400m per annum

11 Strategic highways Our clients

12 Strategic highways Opportunities for growth

Highways England capital spend expected to grow at 11% CAGR (2017 to 2020) • 4% CAGR expected on consultancy fees over the same funding period • Maintain 20% market share in design services and increase our share in consultancy services across specialist and operational areas • Growing spend with Transport Scotland and Welsh Government • New opportunities based on our ability to mesh technology with legacy infrastructure - intelligent mobility, digital asset management.

13 Strategic highways Current project - A14 Cambridge to Huntingdon

• An integrated, collaborative approach with our JV partner (CH2M) • Design will create £70m of construction efficiencies • Significant design delivery from our global design centres • Virtual reality modelling from BIM to allow ‘drive through’ of completed scheme • Commitment to deliver a full digital legacy for operation and maintenance.

14 Water

15 Water Market overview

• Water market is changing rapidly in response to market reforms and outcome-based regulation • Major frameworks with water utility companies in England and Wales through AMP6 and AMP7 spending cycles • AMP6 (2015-2020) totex of £44bn, work in preparation for AMP7 • Scotland and Northern Ireland capital spend of £4.5bn (2015-2021) • Environment Agency spend £2.3bn (2015-2021) • International engineering services market, downstream from Acuity.

Atkins’ addressable spend in UK water market estimated at £500m per annum

16 Water Our clients

17 Water Opportunities for growth

Market growth driven by increasing water scarcity, population growth/urbanisation, climate change/flooding and carbon reduction Development of new digital value propositions and innovative commercial models linked to delivery of client outcomes • Around 15% market share of £500m per annum addressable spend across the UK • Digital asset management and cyber capability with our key water clients Skills, knowledge and expertise export to drive our growth in the global water market • Atkins currently has less than 1% of our estimate of addressable spend of £500m+ per annum for our services offered out of the UK • Delivering engineering services downstream of Acuity.

18 Water Eight2O alliance

• An alliance delivering £2-3bn of essential works for Thames Water – the UK's largest water and wastewater services provider (15m customers) • Alliance members are incentivised on the basis of collective performance, with incentives aligned to Thames AMP6 outcomes • Partnership comprises Thames Water, Balfour Beatty, Skanska, MWH, Costain, Black & Veatch and IBM.

19 Water Thames Tideway Tunnel – West section

• New £4.3bn, 25km tunnel – biggest infrastructure project ever undertaken by the UK water industry • JV between Atkins and Arup appointed to provide design services into the delivery JV for the West section • £416m West section covers 7 sites on 6km stretch between Acton and Wandsworth • Connecting new super sewer into existing Thames Water network

• Completion is scheduled for 2022.

Carnwarth Road riverside worksite - main drive site for West Tunnel boring machine 20 Defence

21 Defence Market overview

Split of £750m of addressable Design, engineering and project spend management expertise to the UK Ministry of Defence: • Four front line commands • Defence Equipment & Support organisation • Defence Infrastructure organisation • Defence Science &Technology Laboratory Mechanical design and analysis of systems used on planes, ships, submarines and land vehicles Procurement of military equipment Advising on through-life management of Front line commands military equipment and infrastructure Defence equipment and support Defence Infrastructure Organisation Design of new facilities/infrastructure, Other particularly nuclear related facilities. Defence industry

22 Defence Our clients

23 Defence Opportunities for growth

“The threats to our country are growing ... the world is more dangerous and uncertain today than five years ago”*

• Increasing defence equipment spending by £12bn over the next decade (to £178bn) Atkins’ addressable • Additional £2.5bn counter-terrorism spending spend in the defence • Increase in spending on cyber security totalling £1.9bn by market estimated 2020 at £750m, increasing • The UK’s nuclear deterrent will be renewed to £1bn in 5 years. • Specific initiatives: − DE&S support with their new ‘balanced matrix’ model − Submarine enterprise support − Digital Asset Management as a Service − Cyber security and resilience − MOD ICT implementation support − Intelligent mobility in the military space.

*National Security Strategy & Strategic Defence and Security Review, November 2015 24 Defence Armoured Fighting Vehicles

• £4.5bn procurement of next generation Armoured Fighting Vehicles (currently known as Scout) for the Army • First ever digitally enabled platform with step change military capability • Atkins provide the specialist engineering expertise to support the MOD’s procurement.

Contains public sector information licensed under the Open Government Licence v3.0.

25 High speed rail

26 High speed rail Market overview

• In the UK high speed rail (HSR) means HS2, although this includes a wide range of associated transport and infrastructure opportunities • Agreed capital spend budget for HS2 of £55.7bn (phase 1 and 2 including rolling stock), we estimate our addressable market at £2.5bn • Major high speed schemes in Scandinavia (£35bn of projects between 2017 and 2035), the US and Asia, we will build on the expertise and experience gained on HS2.

27 Global high speed rail Opportunities for growth

£1.78 trillion in value of high speed projects planned including

Asia Pacific £718bn

Europe £579bn

Middle East & Africa £204bn

North America £253bn

Export opportunities where we can offer a clear differentiator for example in the delivery model, specialist skills or a compelling value proposition.

28 High speed rail HS2 Engineering Delivery Partner

• Valued at £250-350m over 10 years • Joint venture with CH2M and SENER; Atkins share = 40% • Scope (civils, stations, planning and environment, railway systems): • Preparation/evaluation of tenders for the main works contracts, enabling works start-up • Design management, assurance and integration • Technical approvals and BIM compliance • Programme, contract and construction management • Environmental management and planning consents • Support to stakeholder management and public consultation • Contract extendable through to commissioning and operation.

29 Key take-aways Opportunities for growth

Extending deep and sustained client relationships • Highways England New propositions, notably digital • digital asset management in the water and defence industries New revenue opportunities in growing markets • defence • strategic highways Market share opportunities Export opportunities for UK expertise • water • high speed rail.

30 Summary

31 Disclaimer

The information in this presentation pack, which does not purport to be comprehensive, has been provided by Atkins and has not been audited or otherwise independently verified. While this information has been prepared in good faith, no representation or warranty, express or implied, is or will be made and no responsibility or liability is or will be accepted by Atkins as to or in relation to the accuracy or completeness of this presentation pack or any other written or oral information made available as part of the presentation and any such liability is expressly disclaimed. Further, whilst Atkins may subsequently update the information made available in this presentation, we expressly disclaim any obligation to do so. The presentation contains indications of likely future developments and other forward-looking statements that are subject to risk factors associated with, among other things, the economic and business circumstances occurring from time to time in the countries, sectors and business segments in which the Group operates. These and other factors could adversely affect the Group’s results, strategy and prospects. Forward-looking statements involve risks, uncertainties and assumptions. They relate to events and/or depend on circumstances in the future which could cause actual results and outcomes to differ materially from those currently expected. No obligation is assumed to update any forward-looking statements, whether as a result of new information, future events or otherwise. Nothing in this presentation should be construed as a profit forecast.