A strengthened base for improving returns Aggreko plc Annual Report and Accounts 2018 Aggreko is well placed to benefi t from profound shifts in the energy market. The need for power continues to grow, only with added complexity from decarbonisation, decentralisation, digitalisation and demographic change – the four Ds. We are focused on the needs of our customers, tailoring solutions to improve their experience; we are investing in technology to reduce the cost of energy through innovation; we seek to optimise the deployment of our resources to deliver operational and capital effi ciency and we are cultivating a high-performance organisation focused on realising the full potential of our expert people.

OUR STRATEGIC APPROACH

The core strategic priorities remain unchanged since 2015, but we have evolved them and will continue to Customer Technology Capital Expert ensure that our objectives focus investment effi ciency people remain relevant as our markets change. → Being particular → Developing → Being mobile → Staying safe about the sectors competitive and modular and professional Read more on page 10 we target confi gurable at all times → Getting the very products → Offering specialist maximum out → Nurturing our solutions → Smarter use of our assets full potential of connected → Being simple to → Striving for the → Living Always systems and do business with most competitive Orange data analytics cost base → Integrated renewable and storage technology

OUR INVESTMENT CASE

With our leading positions Market leadership: Potential for growth: Group in diversifi ed markets, we Maintaining our leading position well positioned to return to believe we are well placed in our global markets sustainable growth to return to growth and Diversifi ed markets: Focusing Improving returns: Targeting deliver improved ROCE on key sectors where our Group ROCE in the mid-teens (return on capital employed) specialism differentiates us in 2020 while continuing to return value to shareholders Strategy for the change in Cash returns to shareholders: through dividend payments. energy markets: At the forefront An attractive, sustainable of renewables integration dividend Read more on page 06 Strategic report

We have worked hard since 2015 to strengthen the foundations of this business while dealing

with the very Shareholder information signifi cant Governance challenges and changes in our markets. We believe we are now better structured and positioned to begin to reap the rewards of

this work and improve Financial statements our returns. Chris Weston Chief Executive Offi cer

Learn more about us at www.plc.aggreko.com

PERFORMANCE HIGHLIGHTS CONTENTS

Revenue Profi t before tax Strategic report Financial statements 01 Performance highlights 86 Independent auditor’s report £1,760m £182m 02 Aggreko at a glance 90 Group income statement 2017: £1,698m1 2017: £190m1, 2 04 Chairman’s statement 90 Group statement of comprehensive income Diluted EPS Operating profi t 05 Interview with our CEO & CFO 91 Group balance sheet 06 Our business model 49.2p £219m 92 Group cash fl ow statement 2017: 52.4p1 2017: £224m1, 2 08 The opportunities in our markets 93 Reconciliation of net cash fl ow to movement in net debt Return on capital employed3 Dividend per share 10 Our strategic priorities 94 Group statement of 20 Group performance review changes in equity 10.3% 27.12p 27 Financial review 2017: 10.7%1 2017: 27.12p 96 Notes to the Group accounts 34 Stakeholders 135 Company balance sheet Read more on page 20 36 Sustainability 136 Company statement of 38 Risk comprehensive income 137 Company statement of Governance changes in equity 46 Introduction to governance 138 Notes to the Company accounts 48 Leadership 141 Defi nition and calculation 51 Leadership and effectiveness of non-GAAP measures 54 Accountability Shareholder information 62 Remuneration 143 Notice of Annual General 80 Statutory disclosures Meeting and notes 85 Statement of Directors’ ibc Shareholder information 1 2017 numbers are shown on a pre-exceptional basis and have been responsibilities restated for the implementation of IFRS 15. Refer to Note 1 of the Accounts on page 96. 2 2017 operating profi t and profi t before tax post-exceptional items were £183 million and £149 million respectively. 3 ROCE calculation is detailed on page 141.

Aggreko plc Annual Report and Accounts 2018 01 AGGREKO AT A GLANCE Aggreko is a world-leading provider of mobile modular power, temperature control and energy services.

We are working at the forefront of a rapidly changing energy market and are focused on solving our customers’ challenges to provide cost-effective, fl exible and greener solutions across the globe.

Our global reach Read more on page 06

Rental Solutions Power Solutions 80 195 6,000+ 6,659MW Countries Sales and Permanent Average MW on hire Sales and service centres employees excluding hybrids service centres Notable events managed in 2018

Ryder Cup Paris, France

Winter Olympics 2018 Pyeongchang, Super Bowl South Korea Minnesota, USA

Commonwealth Games 2018 Gold Coast, Australia

02 Aggreko plc Annual Report and Accounts 2018 Strategic report Rental Solutions Power Solutions We provide power, heating We provide power, heating and cooling to emerging markets and cooling in developed for customers with longer-term power needs. markets. Our customer requirements tend to revolve Industrial (PSI) Utility (PSU) around smaller, short-term Comprises medium-term projects Longer-term projects projects and key events. for industrial customers, as well providing power to national as shorter-term rental contracts. utility customers. oenneShareholder information Governance

Revenue Revenue Revenue £822m £424m £342m 52% of Group revenue 27% of Group revenue 21% of Group revenue Financial statements

Operating profi t Operating profi t Operating profi t £105m £71m £43m 48% of Group operating profi t 32% of Group operating profi t 20% of Group operating profi t

* PSU revenue excludes pass-through fuel.

Key sectors % of revenus Key sectors % of revenue

1. Building services and 1. Oil & gas 39% 100% of revenue is derived construction 18% 2. Mining 13% from national utility customers. 2. Petrochemical & refi ning 18% 3. Events 13% 3. Oil & gas 13% 4. Building services and 4. Utilities 12% construction 11% 5. Events 10% 5. Manufacturing 8% 6. Manufacturing 7% 6. Utilities 6% 7. Quarrying & mining 5% 7. Petrochemical & refi ning 2% 8. Other 17% 8. Other 8%

Read more on page 24 Read more on page 25

The longer-term opportunity for Aggreko: an energy market in transition

We are anticipating and responding We have developed specifi c applications to the megatrends of Decarbonisation, and tools to help our customers adapt Decentralisation, Digitalisation and to the energy transition. Demographic change in our markets. Our strategic priorities are designed to ensure We have identifi ed the opportunities these that we make the most of these changes, and trends present, playing to our established strength we are investing in our capabilities accordingly. in providing modular, temporary power and to the Read more about our strategy on page 10 new skills we are developing. We offer maximum and our marketplace on page 08 fuel fl exibility, using gas, diesel, renewable fuel sources and microgrid and storage solutions.

Aggreko plc Annual Report and Accounts 2018 03 CHAIRMAN’S STATEMENT Introduction from Ken Hanna

2018 has been a critical year for the Group And while the comprehensive review in which we have begun to see a return this year confi rmed that our strategy on the very signifi cant work that has is right, we have reduced our ROCE been done to strengthen Aggreko’s expectations to a more realistic level foundations and respond to its changing of mid-teens in 2020. A critical year for the markets. Over the past three years we I would like to thank everyone in Aggreko have undertaken a wide-ranging agenda Group in which we have who has embraced our values and of improvements across the business. begun to see a return helped to improve the business and, We have seen increased competition by delivering their local objectives, on the very signifi cant enter our markets, in particular in the has contributed to a good fi nancial utility market, which signifi cantly performance this year. I know that this work that has been impacted our contract rates and returns. does not happen without commitment done to strengthen The dramatic fall in the oil price also took and discipline, and I am very grateful for its toll on the business as a result of our their support. Aggreko’s foundations previous high concentration in the oil As you read through this year’s Annual and gas market, which we have taken and respond to its Report, I believe that you will see how steps to address over the past three years. much stronger Aggreko is and where its changing markets, with Finally, the liquidity constraints of some ambition lies, as well as the challenges we of our key customers in the emerging an additional focus on still face and the many self-help measures markets resulted in a signifi cant increase we have in place to deal with them. the operational disciplines in the level of working capital across our and cultural changes project portfolio. needed to compete. Our strategic priorities since 2015 have sought to address these challenges Ken Hanna by focusing on operating effi ciency Chairman improvements and increased investment Ken Hanna in new technology to develop a more Chairman cost-effi cient fl eet, a more diversifi ed sales strategy, and an increase in our focus on working capital management across the Group. As a result of these changes, with an additional focus on the operational disciplines and cultural changes needed to compete, I believe that Aggreko is now a much stronger business. With the appointment of a new CFO in January 2018, we took the opportunity to review our strategy with a particular focus on fi nancial returns. The original Return on Capital Employed (ROCE) target of around 20% that was set in 2015, before the full impact of the changes our markets were undergoing could be understood, proved to be over-optimistic.

04 Aggreko plc Annual Report and Accounts 2018 INTERVIEW WITH OUR CEO & CFO

Our markets are changing, Strategic report and so are we We are confi dent that we have a stronger base upon which our plans can take hold. At the Shareholder information same time, we Governance are excited about the opportunities for Aggreko both in our existing markets as well as in new opportunities created by the transition in the energy market. Financial statements Chris Weston Chief Executive Offi cer

Here is a selection of Q. Q. investors’ questions which With Power Solutions Utility You are heavily weighted to go to the heart of the issues now only 21% of Group diesel – does this mean there we are addressing. revenue, are you comfortable is a risk of ending up with a lot with your scale in this market? of stranded diesel assets with Q. regulatory change? When you changed your ROCE A. target, you gave yourselves Chris Weston As the Chairman notes, A. this market has changed considerably Chris Weston Our current fl eet is about just two and a half years to as competition has increased and we 78% diesel, refl ecting the fact that the get to the mid-teens target. have had to absorb the substantial vast majority of our customers do not Is it the right target and what decline in the profi tability of various have access to gas or simply want the makes you so confi dent that legacy contracts as they have re-priced immediacy and reliability that diesel or off-hired. We believe our actions, you can achieve it? brings. Emissions regulations have been in particular sales discipline focused tightening for a number of years and we on margin improvement and cost work with our suppliers on an ongoing A. management, will drive improvement basis to ensure we continue to comply Chris Weston Given the detailed plans in this business. with the changes. We do not see we have in place to improve the Group’s We are encouraged by the growth we stranded diesel assets as a signifi cant ROCE, we are confi dent that we can risk to the business. meet the mid-teens target in 2020 and have seen elsewhere, within both Rental felt it was important to give shareholders Solutions and Power Solutions Industrial, and are comfortable with the changing Q. a shorter-term target than previously. Do you really believe you have As we set out at the time of our Interim balance of the overall Group. Results in August 2018, delivery of the reached the low point and are target will require both growth in Q. now at a point of infl ection? operating profi t and a reduction in Are you over-exposed to the Group’s capital employed. We have oil & gas and is a potential A. spent considerable time explaining to downturn in the US market Heath Drewett The bottom-up projections we have for the Group all our people the importance of ROCE a threat? and how their actions can infl uence it. indicate that 2018 was indeed a point of A. infl ection in our fi nancial performance. That said, we know we have hard work A. Chris Weston We have very deliberately ahead to drive operating profi t growth Heath Drewett Improving our diversifi ed our business in North and a more effi cient capital base. operating profi t will be achieved America, where oil and gas now However, I believe that the platform through a combination of top-line accounts for only around 20% of we have built and the detail with which growth and cost effi ciency. We will take our revenue. That said, it remains we are addressing our challenges at various self-help measures to manage an important sector for us. With the every level in the business should enable down our capital employed, including a introduction of the sector-specifi c us to begin to improve returns this year continued focus on the utilisation of our dedication of our sales force and and beyond. fl eet, a disciplined approach to capital processes, we are doing more to ensure expenditure, tighter management of our we benefi t from the growth available inventory levels and working closely with in all the sectors in which we specialise. our customers to ensure that, over time, we reduce the level of outstanding debt on our balance sheet.

Aggreko plc Annual Report and Accounts 2018 05 OUR BUSINESS MODEL Aggreko creates value by providing mobile and modular temporary power and temperature control

Our value proposition

Working at the forefront of a We offer maximum fuel fl exibility, rapidly changing energy market, using diesel, gas, heavy fuel oil we are focused on solving our (HFO) and renewable fuel sources, customers’ energy problems by as well as microgrid and storage providing cost-effective, fl exible, solutions, and we also have tools and more effi cient power and to help our customers adapt to temperature control solutions. the energy transition the world is experiencing. Along with our mobile, modular equipment, we bring sector- The extensive technical specifi c expertise in any location, capability and experience of from the world’s busiest cities to our people, together with our its most remote places, for a wide values, continue to reinforce range of commercial industrial our reputation for appropriate, projects, events, emergencies reliable and, where necessary, and utilities. innovative solutions for every customer.

The sustainable competitive advantages that set us apart 1. 2. 3. 4. 5. 6. Brand strength Extensive global Investment in Highly trained High-quality Delivery and reputation network of sales solutions to build team of innovation of bespoke Our customers and service our digital specialists and execution solutions for value our fl exibility, centres capability Our sector Without our customers reliability, ethics We are truly Our Market specialisation, competent We excel in the and innovation in global. The map Intelligence which is now engineering, data most challenging offering options on page 2 shows Platform, CRM, well embedded analytics and conditions where for lower cost the geographies e-commerce in our sales teams, agility we could Group-wide and emissions. we cover and the portal and data differentiates not deliver the expertise is location of our analytics capability us from our reliability, fl exibility brought to bear 195 sales and give us the edge competitors. or innovation our to deliver specifi c service centres. in the digital fi eld. customers value. solutions to the most complex of situations.

Our customers and how we reach them

While we focus on seven key sectors → We engage with our customers via → Our customers can range from in which we have proven specialist our specialist, sector-specifi c sales a hospital in urgent need of knowledge and experience, this is team, backed up by a global network backup power, to a country with an not exclusive, and we are constantly of 195 sales and service centres. unreliable grid; from the organising looking to expand our relevance → We leverage our experience for the committee of a big event like the and broaden our customer base. benefi t of all customers through Olympics, to a mining company Our key sectors are shown on page 12 formal and informal sharing of setting up in a new location. Case with a discussion on our approach knowledge across the Group. studies on our website and on to customers. Our digital channels are playing pages 12 to 17 describe what we an increasingly important role are capable of delivering, the in the specifi cation, monitoring sophistication of our bespoke and analysing of operational solutions and of our provision of performance. For our more power in the most challenging immediate, transactional sales, of conditions. we are developing an e-commerce platform.

06 Aggreko plc Annual Report and Accounts 2018 Strategic report Our three inter-related but distinct businesses

Rental Solutions Power Solutions Power Solutions Industrial Utility

Key revenue streams Key revenue streams Key revenue streams oenneShareholder information Governance Focusing on high-value sectors in developed Focusing on natural resource and industrial Focusing on utilities in emerging markets, markets, we use our specialist expertise to sectors, we use our specialist expertise, overlapping with those in which Power deliver our customers’ requirements, which are: gained from similar industries to Rental Solutions Industrial operates, our customers’ → Immediate availability for short-term Solutions, but in different geographies requirements are driven by a lack of reliable contracts in the developing markets, to deliver our power supply from the grid or seasonal → Delivery of secure power supply customers’ requirements, which are: fl uctuations in demand/supply and are: and temperature control → Delivery of secure power supply → Temporary power provision, across one to → Ability to work in remote locations and temperature control three years generally → → Flexibility in our solutions Ability to work in remote locations → Ability to work in remote locations → → Environmentally friendly options Flexibility in our solutions → Flexibility in our solutions for large corporate customers → Environmentally friendly options Driving our returns

for large corporate customers Financial statements Driving our returns → Reducing our cost base to improve → Growing revenue and improving Driving our returns operating profi t operating margins → Growing revenue and lowering the cost → Cost reduction programme described → Improving profi tability from higher-value, of our operating model to increase in more detail on page 16 higher-margin work through specialist operating profi t → Reducing capital employed sales resources and processes → Improving profi tability from higher-value, → Focusing new diesel product build → New systems to support the customer higher-margin work through specialist programme on fl eet upgrades sales resources and processes journey, improve effi ciency and enable → Optimising fl eet allocation and transfers real-time pricing with improved → New systems to support the customer to improve utilisation governance journey, improve effi ciency, and enable real-time pricing with improved → E-commerce platform and telesales Our approach to improving our returns governance for the more transactional market is discussed in more detail on page 11. → → Deploying assets more effi ciently Offering hybrid solutions to provide to reduce capital employed new growth opportunities → Optimising fl eet allocation and achieving a more effi cient hub and spoke depot network to reduce capital employed

How we create value for our customers and shareholders

1 3 Refi ning the specifi cation 5 Demobilisation 6 2 and problem solving At the end of a contract, we move Our problem solving ability, technical equipment to new projects to keep costs capability and knowledge-sharing enable down for customers and improve our us to develop more sophisticated solutions utilisation based on: 5 3 and applications, particularly for highly → Increased longevity of our equipment complex or valuable installations, or where supported by more sophisticated remote 4 environmental concerns are paramount. data monitoring and condition-based These capabilities include: maintenance programmes → Our constant focus on improving → Optimisation of fl eet logistics and 1 Differentiation to effi ciency without compromising reliability project manning to manage transfers attract customers → Transparent pricing through our cost of of equipment more effi ciently Our reputation and brand are backed up energy calculator and other initiatives by our technical capability, experience and → Additions to our product portfolio over 6 Preparing for the next understanding of our industry based on: recent years, including hybrid, storage, customer → Flexibility through our mobile, modular system optimisation and HFO approach with multiple fuel types Both our customers’ and our own operational feedback from each contract → Scale and global reach with pooled 4 Deployment and are built into our data analytics so that experience operational support lessons can be learned and applied → Reliability Group-wide with: By deploying the appropriate equipment → Innovation and ability to deliver unique → Digitalisation and data analytics or bespoke solutions for each project, we ensure customer satisfaction and improved utilisation. supporting decisions on best allocation → Capability to deal with constraints and We focus on: of resources requirements on emissions, noise and cost → Deploying the right equipment and fuel type whether new, refurbished or bespoke 2 Understanding and → Digital applications covering data identifying customers’ needs monitoring of our equipment so we deliver higher service levels We are particularly well positioned to help → customers with the following needs: CRM to track customers’ needs and our own performance, feeding back → Low-cost energy experience and improving our knowledge → Reliable energy → Immediate or rapid response → Access to remote, less accessible locations → Cleaner energy → Temperature control

Aggreko plc Annual Report and Accounts 2018 07 THE OPPORTUNITIES IN OUR MARKETS We are helping our customers in their transition to the new realities of global energy markets

Globally, the energy sector is going through a major transition; the challenge today is to fi nd the optimal way to secure more energy, affordably and sustainably.

The challenges of the energy transition

→ Global population is expected to → There are also vast geographic areas increase by one billion during the where the population density does next decade with 94% of this in urban not, and may never, support grid populations of less developed regions. investment. Demographic change → In these regions, power supply is often means that grid investment is not unreliable. The World Bank reports keeping up with the growth in the that electricity supply in 26 such world’s urban population. countries has deteriorated since 2016 and there are currently 1.1 billion people, mainly in Africa, without 15% access to power. growth in urban population by 2025 and 25% by 2030

→ Demand for lower-cost generation → In emerging markets, off-grid or technologies, renewables, fl exibility ‘behind the meter’ power systems are and security of supply has led to an increasingly important self-supply rapid growth in the demand for solution and distributed energy could Decentralisation decentralised power generation, represent between 40% and 60% of all including distributed or off-grid the remaining investment required to leads to demand for fl exible power solutions. The 6GW of new microgrid provide universal access to electricity. solutions addressing more complex projects planned affect all segments → power systems. With $55 billion invested in distributed of the energy market – business, energy hardware (rooftop solar, smart residential and communities. metering, behind the meter storage, etc.) in 2017, decentralisation 1GW represents a rapidly growing and of microgrids in the past few years; sizeable market opportunity. we believe a further 6GW of capacity is planned

→ Decarbonisation imperative is causing storage capacity as these sources are pressure to improve the effi ciency expected to be cheaper than running of existing installations and to limit existing grid-scale coal and gas plants emissions. This comes at a time when on a levelised basis by the late 2020s. Decarbonisation population and economic growth are → Increasing renewable capacity will pushing up both energy demand require fl exible power units, including drives investment towards renewables and CO2 emissions. Decarbonisation batteries and small peaking gas and lower emission fuels. represents both risks and opportunities plants, and demand management for our activities in these key markets. to effectively balance the system. By the late → Higher energy effi ciency and → Hybrid systems, which include thermal investment in renewables are generation, provide a pathway to 2020s expected to be the main enablers of integrate more renewable energy CO2 emissions reductions. The falling renewable technologies are expected while reducing CO2 emissions. to be cheaper than conventional cost of renewable technologies will thermal technology drive investment in wind, solar and

→ Digitalisation improves electricity → Digitalisation may have its biggest systems by increasing connectivity, impact in renewable energy where visibility and performance of devices there is a growing need to integrate through digital communications, a diverse mix of energy systems, analytics and insight. Implementing including distributed generation and Digitalisation digitalisation at each stage of the energy storage. As the main renewable will help optimise operations, driving value chain of the energy system can energies are intermittent and power out cost and ensuring integration of enable increased effi ciency, stability systems more complex, digitalisation intermittent renewable power. and reliability through monitoring and will help to balance the system in the optimisation of a grid and associated most effi cient way. power assets.

08 Aggreko plc Annual Report and Accounts 2018 Strategic report oenneShareholder information Governance

The marketplace in which we operate

Increasing demand Commodities Competition for power Improved commodity prices in 2018 To maintain our competitive position Our markets have historically grown as resulted in a rise in industrial activity in this changing environment we have, a country’s economy grows, particularly in many of our markets. in line with our strategic priorities, in industrial sectors where fi nance is The cost of energy is a key concern for improved our technology offering, more available. Projected global GDP customers in these sectors and our customer focus and effi ciency. Financial statements growth of 3.5% for 2019 (IMF) is sector specifi c applications, such as the All markets expected to drive this demand. solar-diesel hybrid on mining sites and We compete with regional, national fl are gas-to-power solutions, will be an Globally there is a move for greater and local businesses, many of which important revenue driver for us. integration of networks with cross- are privately-owned specialist rental border transmission infrastructure Oil & gas businesses, divisions of large plant development. → Oil demand is supported by hire companies, or OEM (Original global GDP growth, particularly Equipment Manufacturer) dealerships. In the power sector, there is an in emerging markets. Very few provide our sector-specifi c estimated 2,390GW of capacity solutions or engineering expertise. currently under construction or → Positive oil and gas price forecasts planned in the next few years with underpin infrastructure projects Developed markets almost half of this in Asia (Platts). and support signifi cant capital The larger general rental companies do expenditure in production. operate in specialist sectors, including Investment in power supply is expected → The oilfi eld services sector has seen power, heating and cooling, with a focus to focus mainly on solar and wind (with recovery, particularly in the US, and on transactional equipment hiring. around 43% from fossil fuels) driven by current trends remain favourable. Our strategic priorities and individual declining costs, batteries and fl exible country and sector strategies address power solutions such as peaking gas. → Liquid petroleum gas (LPG) is available the competition in these markets. in over 130 countries, compared to An increase in distributed energy around 40 for natural gas, and is a Emerging markets resources will tend to decrease the very attractive solution in countries Several competitors cover wide average size of power plants and looking for cheaper, cleaner power. geographical areas across emerging increase the number of power markets. However, we believe we are → Liquefi ed natural gas (LNG) producers. Construction of those the only company with a truly global development, coupled with investment plants should be faster than large footprint, capable of high standards of in pipeline and infrastructure, will make utility-scale projects, but the innovation for bespoke solutions. In the gas available more widely. development, duration and funding utility market, demand has mainly been processes remain challenging. Petrochemicals and refi ning towards longer-term contracts while → The global market for petrochemicals The high potential for gas technology our modular, mobile and temporary is expected to grow at an annual along with batteries over the mid and equipment favours contracts of one average rate of 9% by 2023 (Energias long term will drive the shift towards to three years in length, in which we Market Research). The Asia-Pacifi c decentralised and decarbonised energy believe we have maintained a market region has been the main contributor systems. Gas is expected to remain at share above 50% of the addressable in the past and is expected to around 20% of the global power mix. market. continue leading the sector, with the Increasing demand for power, Middle East remaining the most construction of new power plants, the competitive place for production. move towards renewables and storage, Mining and increased focus on decentralised, → Positive developments in commodity decarbonised energy systems will prices have meant that this sector provide opportunities for Aggreko. has had access to more funding for new projects. → Gold production levels are expected to grow, particularly in Australia and Canada. → Demand for commodities of the future, such as copper, nickel, aluminium, lithium and cobalt, is 3.5% being driven by growth in electric Projected global growth driving demand vehicles and battery storage arising for power in 2019 (IMF) from pressure to decarbonise. 2,390GW 9% CAGR 5.5% Power sector capacity currently under Growth rate of global petrochemicals market Investment growth over the next fi ve years in construction or planned (Platts) by 2023 (Energias Market Research) emerging and developing economies (IMF)

Aggreko plc Annual Report and Accounts 2018 09 OUR STRATEGIC PRIORITIES Our strategic priorities will enable us to succeed in a changing world

Since we fi rst set out our strategy in 2015, it is clear that our markets have changed, and will continue to do so, and we have evolved our strategy in response to this. This year we reviewed our strategy, the markets in which we operate and the returns we can expect to make. We have confi rmed that our evolved 2015 strategy remains relevant, although we have reduced our medium term ROCE target.

Our four priorities to drive growth

Continued focus on key sectors → Real-time pricing governance → Focus on key sectors, using our technical capability to enable System investment to improve us to tackle higher value, more customer experience complex challenges → Deployment of end-to-end → Hybrid solutions using solar power customer journey systems Customer focus and battery storage to regulate Remote monitoring and and integrate power data analytics Tailoring solutions → Improved customer service Sales and marketing discipline to improve and product development customer and process enhancements → Segmentation and channel experience development, including telesales and e-commerce

Continued focus on reducing the Hybrid solutions and storage total cost of energy integration → Fuel effi ciency, hybrid solutions → Integrating renewables, and emissions storage and thermal assets Complex sector-specifi c applications → Deploy to existing sites to improve leveraging the technical capability effi ciency and reliability Technology investment of our people Reduce the → Creating specifi c applications through total cost of energy relevant experience through innovation Remote monitoring platform and data analytics capability

More centralised fl eet management Deploy Rental Solutions systems to drive utilisation into Power Solutions Industrial Remote monitoring → Back-offi ce and process effi ciencies and data analytics Cost reduction programme to deliver → Reduce maintenance costs £50m of savings Capital effi ciency → Improve utilisation Reduction in working capital Optimise deployment of resources

Living Always Orange Staying safe and professional → Our values underpin all we at all times do and how we behave → Safety is the top priority for → Extensive internal communication our people ensures that this is fully embraced → Professionalism remains core to our reputation and customer Expert people Nurturing our full potential relationships Cultivate a high → Valuing our people, incentivising them, monitoring their performance performance and enabling them to achieve organisation greater things

10 Aggreko plc Annual Report and Accounts 2018 Strategic report oenneShareholder information Governance

Plans to improve our returns

Improvements to ROCE will be driven in each of the three business segments As part of our 2018 strategy and markets review, we built detailed plans to enable us to meet our revised Group target for mid-teens ROCE in 2020. While there is considerable overlap, particularly between Rental Solutions and Power Solutions Industrial, which are subject to many of the same drivers, the detailed plans for improved ROCE are specifi c to each division, as set out below: Financial statements Rental Solutions Power Solutions Power Solutions Industrial Utility

Operating profi t → Sector focus and specialisation

→ Higher value, complex solutions

→ New real-time pricing governance systems

→ Remote asset monitoring to reduce unplanned downtime

→ Data analytics to reduce servicing costs

→ New customer journey systems

→ Introduction of e-commerce

→ Sales disciplines driving revenue growth and margin improvement

→ Cost disciplines to improve margins

→ Cost reduction programme

Capital employed → Global fl eet and inventory management

→ Capital expenditure discipline

→ Utilisation improvements

→ Billing and collections under spotlight and part of the sales process

Over the following pages we report on each of our strategic priorities in more detail...

Aggreko plc Annual Report and Accounts 2018 11 OUR STRATEGIC PRIORITIES CONTINUED

Customer focus Tailoring our solutions to improve our customer experience Being particular about the sectors we target Offering specialist solutions Being simple to do business with

Strongly diversifi ed but Our approach Customer-focused disciplines focused on seven key sectors → By being particular about the sectors and systems, making us What our customers have in common we serve, we can develop our simpler to do business with is the critical need for power and expertise, create specifi c applications, → We enhance our sales capability temperature control to solve and offer relevant experience and through a bespoke training complex problems and provide advice to ensure that customers get programme, supported by a new reliable operational delivery. a tailored solution. online tool which provides detailed Utilities → We are also widely geographically knowledge of our products, our Expertise in high voltage and grid diversifi ed. Rental Solutions operates sectors, delivery and logistics, connections, providing solutions in North America, Northern Europe, as well as ethics and safety. from emergency response to base Continental Europe and Australia → Our Market Intelligence Platform load power. Pacifi c. Power Solutions, both gives us an accessible, in-depth Industrial and Utility, operate in less Petrochemical & refining understanding of the market well developed markets in Latin Power and temperature control dynamics affecting customers in America, the Middle East, Asia, solutions to optimise processes each of our geographic markets, Africa and Eurasia. and improve production rates. helping us to focus on the greatest → Our customers’ requirements range opportunities for our business. It uses Events from short-term, simpler, transactional data from multiple sources to give our A valued and trusted partner, offering rental of equipment, to providing sales teams a detailed view of their high-profile event knowledge, cost- temporary power for three to six markets, factoring in economic and effi cient design capability combined months where the complexity political stability; ability of customers with fl exibility and reliability. depends on the sector and geography, to pay; the electricity supply and Building services & construction to longer-term projects where we may demand balance; and fuel availability Provision of reliable power, heating, be providing a solution for anything and pricing. cooling and dehumidification solutions up to three years, or even beyond. → Our enhanced CRM (customer to our customers in construction, → The majority of our revenue is derived relationship management) has services and contracting. through our ability to manage and been rolled out and gives us a Oil & gas deliver increasingly complex, higher- better understanding of customer Solutions where the grid is unavailable, value solutions. This may include the requirements by analysing our to eliminate bottlenecks and monetise provision of off-grid, low cost or green operating history and service provision gas by-products, from exploration power, a high level of reliability and is increasing internal collaboration to production. whatever the operating conditions, and the speed of our service delivery. immediate response during Mining → For more transactional sales, we are emergencies or sector-specifi c Fully flexible, cost-effective solutions evolving our e-commerce platform, problem solving, while the balance for every stage of the mining lifecycle. providing a more agile, cost-effective of revenue comprises shorter, more telesales channel and a better service Manufacturing transactional rental contracts. proposition. Alongside this, our new Solutions to enhance processes and system enables real-time pricing, overcome power and temperature building in much more disciplined control challenges, reducing pricing governance, which should costly downtime. improve rates.

12 Aggreko plc Annual Report and Accounts 2018 Challenge Strategic report Powering the The Winter Olympic and Paralympic Games captivate 985km millions of people around the world, and the 2018 length of cabling Winter Olympic event in South Korea was the biggest ever. An event of this scale demands a signifi cant amount of power. 95 and Paralympic Given the environment and conditions, we knew experts on site deploying equipment on site would be very diffi cult Games for all involved and that it would be challenging to 0 guarantee the reliable service Aggreko is renowned for. -4 C average temperature Solution

Our experts devised a turnkey solution that consisted Shareholder information Governance of 140MW; 232 of our containerised generators and 20 985km of cabling. We stationed 95 of our engineers on venues powered site; both before, and throughout the Games to ensure that power levels were optimised and constant and the equipment continued to operate in the face of extreme temperatures. Impact With the successful implementation of our power solution to supply the Games, we delivered on our customer’s requirements. This meant that thousands of competitors could entertain the worldwide Financial statements audience watching the action unfold.

→ Remote monitoring and data analytics are benefi ting customer Measuring our performance service by improving our management of downtime, servicing Customer loyalty Customer activity and the effi cient running of our equipment. This also enhances our Measure Measure understanding of our equipment and We use an industry standard known Group average power megawatts the sharing of knowledge across the as Net Promoter Score (NPS) to on hire. measure and benchmark our Group, which feeds back into the Relevance performance against competitors development of our products and Average megawatts on hire across the and other B2B organisations. bespoke solutions. year provides a good measure of the Relevance → A Voice of Customer programme activity of the business globally. It is important that we understand is transforming how we measure Target the extent to which we exceed our our performance through the eyes We will not increase average megawatts customers’ expectations. The statistical of our customer. This programme on hire at the expense of price and insight we now collect is driving our demonstrates that ‘Aggreko listens’ by this KPI should always be considered customer-focused change agenda delivering greater transparency and alongside our fi nancial metrics. clarity on what to tackle and improve to enable us to be simple to do across our business at both a local business with. Performance During the year we have seen a very and global level by tracking the Target slight improvement in the average customer experience throughout Sustainable improvements in the NPS megawatts on hire. However, the table the contract lifecycle rather than just over time. measuring the customer experience below also shows that over the past fi ve at the end of the project. Performance years this metric has been fairly steady. With the introduction of multiple This demonstrates the resilience of touch-point surveys this year, through our business and the strength of our the Voice of Customer programme, our products and brand. pure NPS performance is not comparable with the NPS scores previously reported which only measured performance post-transaction. We know that our performance is in the top 5% of B2B service organisations on a global basis, and we strive to improve the customer experience further.

Net Promoter Score Group average power on hire (MW)* 59% 6,659MW

2018* 59% 2018 6,659 2017 65% 2017 6,613 2016 63% 2016 6,571 2015 63% 2015 6,771 2014 58% 2014 6,621 * Refl ects a change in how we measure. * Excludes hybrids.

Aggreko plc Annual Report and Accounts 2018 13 OUR STRATEGIC PRIORITIES CONTINUED

Technology investment Reducing the total cost of energy through innovation

Developing competitive confi gurable products Smarter use of connected systems and data analytics Integrating renewable and storage technology

An innovative approach → We are encouraged by the We work closely with our strategic to reducing costs and/or opportunity to provide solutions suppliers and, using market leading into the developing market for but established technology, we design emissions renewables that require complex and assemble our fl eet in a modular, → We use our in-house technical control systems to integrate existing mobile format, typically using 20-foot expertise, understanding of local power sources with battery storage to shipping containers which facilitate emissions requirements on a effectively manage security of supply. transport logistics and lower costs. country by country basis, and → → ability to innovate to achieve savings We continue to integrate Younicos, We are increasing the longevity and/or reduced emissions for our which we acquired in July 2017. As part of our fl eet with the support of our customers. Our knowledge of the of this integration, we have merged remote data monitoring capability regulatory requirements and the our Manufacturing & Technology and and data analytics. Our supplier environments in which the fl eet Global Solutions teams, to create agreements cover the life of the operates has signifi cantly Global Products & Technology. This assets, but we have scope to reduce strengthened our capability to adapt will drive innovation with sales and the initial build cost as well as to the changing market conditions. delivery managed by our existing planned and unplanned maintenance. divisions, Rental Solutions and The performance data collected on → We have implemented a process to Power Solutions. our equipment provides valuable capture and manage our intellectual insight into the optimum operating property resulting from our design Flexibility and reliability of conditions to benefi t our customers. and operations. The in-house → design of our equipment and the our fl eet driving utilisation Part of our cost saving programme development of unique, tailored → Increasing utilisation is a key focus is reducing planned maintenance solutions for our customers, for improving our returns. Our fl eet by introducing a condition-based some of which are patented, is modular and mobile, so it can be maintenance regime. have considerable value and are confi gured to provide any number shared globally across Aggreko. of different solutions and moved to where it is needed around the world, which ensures a quick response as well as optimum utilisation.

Upgrading our existing fl eet to improve effi ciency and offer greater choice

Diesel Gas Hybrid/Renewables HFO Average MW on hire 5,296MW on hire 1,332MW on hire 8MW on hire 31MW on hire

Integration of new Refurbished 31% of Addition of 323MW Contract in Eritrea Addition of 181MW technology our 1MW fl eet to G3+ of Next Generation (solar and diesel) of HFO to our fl eet Gas since 2016 since 2016 Benefi ts • 5% improvement • 11% improvement • Emissions reduced by • 8% improvement in fuel effi ciency in fuel effi ciency 10-13% in effi ciency vs. G3 • 15% improvement • 33% improvement in • Provides a reduction • Modular and mobile in power output power output at lower in the overall total cost HFO offering using capital cost of energy proven engine

14 Aggreko plc Annual Report and Accounts 2018 Challenge Strategic report Providing clean, St Croix, part of the Virgin Islands, has a long-term energy 20MW plan, which includes revamping its current ageing and power uninterrupted ineffi cient power generation infrastructure. In 2017 one of its power generators suffered mechanical failure and $6m power to an island a new power plant was required to avoid power shortfalls. saving in the fi rst The Virgin Island’s Water and Power Authority required two years community a solution for the many businesses, homes and critical infrastructure that keep the island running. It also needed cleaner energy, to cut costs and to comply with Environmental Protection Agency (EPA) regulations. oenneShareholder information Governance Solution Aggreko is delivering 20MW of power to replace the defective plant from March 2019, using Liquefi ed Petroleum Gas (LPG) powered Next Generation Gas (NGG) generators. Our new power package comprises 1.2MW power modules to maximise fl exibility, so the island’s unique night and day demands can be met. Impact This solution will not only bring reliable power to the people of St Croix, but it also lowers emissions, providing cleaner power for this idyllic island and, most importantly, at a Financial statements lower total cost of energy to both our customer and its end users. The island itself will benefi t from savings of around $6 million in the fi rst two years.

Mitigating our environmental Measuring our performance impact → In 2018, 99% of our greenhouse gas Power fl eet composition emissions came from the operation Fleet size and composition of our fl eet and we see it as our Measure responsibility to mitigate the carbon Total power fleet size (in MW), split footprint of our products where we between generation type (diesel, 10,009MW can. Three main factors which drive diesel G3+, gas, NGG and HFO). our emissions are the fuel type our Relevance 4 5 1 customers use; the pattern of their Our strategy is to grow ahead of the usage; and the fuel effi ciency of market. To remain competitive we have 3 our fl eet. to offer our customers cheaper and → Our equipment and processes are cleaner sources of energy that can be designed to comply with applicable adapted to meet their needs. The best 2 laws, regulations and industry way to do this is through more fuel- standards wherever we operate in efficient engines and using cheaper the world. In addition, we constantly and cleaner fuels where appropriate. explore new ways of reducing Target 2018 2017 emissions from our fl eet and Increasing proportions of our market 1. Diesel 62% (64%) increasing fuel effi ciency, and we leading products in fuel effi ciency, 2. Diesel G3+ 16% (14%) regularly review product technologies the diesel G3+ and NGG engine, and that we can adopt into our product introducing clean energy sources such 3. Gas 17% (18%) portfolio including bio-fuels, fuel cells as solar and storage. 4. NGG 3% (2%) and waste heat recovery. Performance 5. HFO 2% (2%) → We also work to reduce the impact During the year we have refurbished 2017 total: 9.9GW of other environmental effects of more diesel engines to the G3+ and our operations, such as refrigerant introduced more NGG engines. We have emissions and noise pollution, in also begun to introduce solar, although which we have made signifi cant this remains immaterial in the context advances using custom-built of the overall fleet at this stage. acoustic enclosures, high performance isolation and attenuation systems to reduce noise.

Read more about our greenhouse gas emissions on page 83

Aggreko plc Annual Report and Accounts 2018 15 OUR STRATEGIC PRIORITIES CONTINUED

Capital effi ciency Optimise deployment of resources

Being mobile and modular Getting the very maximum out of our assets Striving for the most competitive cost base

Capital allocation strategy with high fi nancial gearing. Therefore, Improved operational we target gearing of around one times Effective capital allocation is critical effi ciency net debt to EBITDA, recognising from to delivering value given the capital time to time it may be higher as We have, over the past few years, intensive nature of our business. This investment opportunities present removed duplication by streamlining keeps the business focused on return themselves. At the end of 2018, back offi ce processes through on capital employed as a key metric for net debt to EBITDA* was 1.3 times signifi cant savings in procurement ensuring we deliver long-term value. (2017: 1.2 times). During the year, disciplines and improved productivity Our approach to allocating our capital cash fl ows from operations were in HR policies to align performance is disciplined both in terms of capex £423 million (2017: £450 million). and remuneration. However, there is and working capital, and we have a more to be done yet to improve ROCE hurdle rate for all new projects. Optimising the deployment operational effi ciency. A key objective is to improve our We are targeting improved operating performance in working capital of our assets to improve utilisation effi ciency in Rental Solutions and management. Power Solutions Industrial through Our capital allocation is focused on Our scale brings operational effi ciencies the sharing of best practice. This organic investment and we do not and minimises our capital costs, but we includes extending effective customer- expect to make acquisitions unless have further opportunity to improve journey and remote asset monitoring the rationale for scale or capability the utilisation of our assets. Measures systems from Rental Solutions to is compelling. are in place to improve utilisation Power Solutions Industrial and including more centralised fl eet introducing data analytics to We remain committed to a sustainable management, making it easier reduce costs of regular servicing and ordinary dividend and, where we have to deploy fl eet across the world, maintenance in both business units. excess capital will look to distribute particularly from Utility projects to it to our shareholders. Subject to the faster growing businesses – Our planned cost reduction shareholder approval, the proposed Rental Solutions and Power Solutions programme, which is focused on fi nal dividend of 17.74 pence (2017: Industrial. Power Solutions Utility, is expected 17.74 pence), combined with the interim to achieve net savings of £50 million dividend of 9.38 pence (2017: 9.38 Capital expenditure is allocated where in 2021. The programme includes pence), will result in a full year dividend it can deliver the best returns over the condition-based maintenance to reduce of 27.12 pence (2017: 27.12 pence) per long term. We reduced our investment servicing costs; procurement savings Ordinary Share. in new fl eet by £50 million, comparing through the extension of our spare 2018 with 2017, and we expect to parts supplier base; optimisation of fl eet Our aim is to maintain a balance sheet maintain fl eet capex at a similar level in logistics and project manning; a review structure that safeguards our fi nancial 2019. While there is the opportunity to of regional offi ce and support function position through economic cycles. improve the utilisation of our existing locations and the improvement of Given the proven ability of the business fl eet, particularly in Power Solutions sales productivity through training to fund organic growth from operating Utility, we expect capital expenditure to and development. cash fl ows, together with the nature remain below depreciation this year. of our business model, we believe it is appropriate to run the business with a Asset monitoring and condition-based modest amount of debt. However, given servicing reduce fl eet redundancies, our high operational gearing we do not helping to extend the working life of believe it is appropriate to couple this the assets.

*Net debt to EBITA calculation is on page 142

16 Aggreko plc Annual Report and Accounts 2018 Challenge Strategic report 32 remote The State of Amazonas is the largest in Brazil, it is isolated 20,000km and predominantly rain forest. While most of the area of river network used Amazonian is connected by the river Amazon, including the to carry the generators 60 municipalities overseen by the area’s capital city, communities Manaus, this is not an area that is easy to access. 8 barges Therefore the national grid struggles to provide the commissioned needed power power all the communities needs. Solution 65MW While the grid could not get there, we could – by fl oating of power provided

65 generators up the Amazon on eight barges that covered Shareholder information Governance about 20,000km of river network. 65MW of power is being delivered to 32 remote locations under a 15-year contract. This was one of the more challenging projects we have undertaken over the years, but it was also one of the most rewarding, clearly demonstrating our can-do attitude. Impact 32 isolated communities received the long-term security of supply they need to thrive. Among the communities that will be supported over the 15-year contract is Parintins, Amazonas’ second city; Maraã, a settlement located within a Sustainable Development Reserve; and Coari, which Financial statements needs to power its gas industry.

Focus on reducing Measuring our performance working capital Our Group-wide programme Capital effi ciency Power Solutions: to improve our working capital Industrial utilisation management has seen some Measure positive signs. Fleet utilisation by business unit. Receivables remain a key focus, we Relevance 71% still have some customers in Africa, We are a capital intensive business and 2018 71% Venezuela and Yemen in particular in order to generate strong returns on who are taking longer to pay owing our capital investment our fleet needs 2017 69% to issues of liquidity and access to to be well utilised. Across our businesses 2016 63% foreign currency. We believe that we use megawatt utilisation as the 2015 65% with the introduction of clear targets, metric (average MW on hire divided 2014 65% increased frequency and levels of by the total fleet size in MW). review, together with the addition of Target Power Solutions: further resources to focus on this area, In our Rental Solutions and Power Utility utilisation we are beginning to make progress. Solutions Industrial businesses we are We have begun to adopt best targeting utilisation of 60-70%, while in practice principles in our supply our Power Solutions Utility business we 66% target over 80%. chain management and our efforts 2018 66% on payables have delivered Performance 2017 73% improvements. In 2018 we saw utilisation in our Rental 2016 79% In 2018, we increased our focus on Solutions and Power Solutions Industrial 2015 77% inventory management with actions businesses improve as our business 2014 76% including the systematisation and priority initiatives helped grow our automation of inventory buying across businesses. We need to see further the Group and the centralisation of improvements to meet our targets, but Rental Solutions: inventory management to ensure the progress is encouraging. Lower order Rental Solutions utilisation we are utilising stock more effi ciently intake and a higher level of off-hires in across all our geographies. We are 2018 resulted in a fall in the utilisation also working closely with suppliers of our Power Solutions Utility fl eet. 62% to establish consignment stock 2018 62% arrangements where we can and 2017 56% proactively working on stock sales 2016 52% and buy-backs. 2015 55% 2014 57%

Aggreko plc Annual Report and Accounts 2018 17 OUR STRATEGIC PRIORITIES CONTINUED

Expert people Cultivating a high- performance organisation

Living Always Orange Nurturing our full potential Staying safe and professional at all times

At Aggreko we believe our Creating a high-performance Operating safely and culture is a strategic lever for culture – Living Always Orange responsibly at all times growth and Always Orange → Our people have a good → We continue to promote Standard was implemented in April 2017 understanding of our Always Orange Zero, setting the foundation for how to defi ne the culture we culture and the important part it plays we manage risks to ensure we stay in helping us to grow. 83% of our safe and professional at all times need. Our four values and people stated they agreed with this across the world. Thirteen specifi c their respective day-to-day statement in our 2018 employee HSE risk aspects directly related to our behaviours govern the way survey (Be Heard), up 3% on 2017. people and our business are being embedded to ensure we are staying in which we work, remain → We expect all our people to act like safe and responsible. safe and professional, develop owners and have increased our the expertise of our people, commercial acumen through → We have created a Security Incident infl uence our social interaction the virtual ROCE learning and Reporting app for our people, interactive quiz on our internal wherever they are, to effectively report across our markets and business strategy microsite. a security incident at any time. ultimately allow us to deliver → We focus on the importance of → In our Be Heard employee survey, our business objectives. managing our assets as well as the 97% of our people state that they more obvious area of improving would use their ‘stop-work authority’ operating profi t, thereby increasing if a colleague placed themselves in the understanding of the levers we immediate danger or they personally can exercise to infl uence ROCE. were tasked to do something that was unsafe. → Recognising the importance of the technical capability of our → We have introduced a ‘Being Expert people to serve our customers, with our Data’ policy to ensure we and the importance of our brand, comply with the new data protection we continually invest in ongoing regulation and that our people do training and development, and the right thing when they handle sharing of experience. personal data.

18 Aggreko plc Annual Report and Accounts 2018 Be Together Strategic report Asking the best of each other, Our Always Orange harnessing our scale and diverse culture is supported skills to grow stronger together. by our values and Be Expert their respective Using our blend of experience, behaviours expertise and planning to keep

us ahead of the game. Shareholder information Governance Be Dynamic Using our entrepreneurial passion to deliver and make great things happen. Be Innovative Learning from the world for

a better today and for great Financial statements leaps tomorrow.

Nurturing our full potential Measuring our performance → The 2018 Be Heard Employee Engagement Survey achieved a very high engagement score of 76% Safety Employee satisfaction (up 1% on last year) with 88% of staff Measure Measure (similar to last year) declaring an Lost Time Injury Frequency Rate (LTIFR). Employee turnover. overall pride in working at Aggreko. Lower scoring areas were on the topics Relevance Relevance of remuneration and work-life balance. Rigorous safety processes are absolutely It is the attitude, skill and motivation of The feedback helps us focus our efforts essential if we are to avoid accidents or our people which makes the difference to make Aggreko an even better place incidents which could cause injury to between mediocre and excellent to work and we are committed to people and damage to property and performance. We monitor permanent improving our scores across all areas. reputation. The main KPI we use to employee turnover as a proxy for how measure safety performance is LTIFR our employees feel. It is measured as → With the establishment of our Value which is calculated by dividing the the number of employees who leave the Difference team, we are continuing number of recorded LTI cases by the Group (other than through redundancy) our focus on diversity and inclusion. number of hours worked at the during the period as a proportion of the We are launching a new mobile Company multiplied by 200,000. A lost total average number of employees intranet which will include a time accident is a work related injury during the period. translation feature ensuring that our that results in an employee’s inability Target people can access information and to work the shift after the initial injury. discussions in their local language. We aim to keep permanent employee We also analyse the results of our Target turnover below historic levels in order employee engagement survey from Continued reduction in accident rates. to retain the skill base that we have developed. the perspective of gender to ensure Performance we are dealing with underlying Safety continues to be a key area of focus Performance gender-based perceptions. Our latest in 2018. At the beginning of the year This year employee turnover was in line Gender Pay Gap Report is available we introduced ‘stop work authority’, with last year as the measures taken on our corporate website. designed to empower people to act on to improve engagement take effect. → Through a globally consistent risks they witness and to ensure that Our employee engagement score approach to performance and they don’t put themselves or others at continues to rise with a score of 76% in development (‘Be Your Best’) we risk. We also introduced our ‘Leading 2018, up 1% compared with the prior year. are encouraging the strongest Safety’ programme for our frontline performance from our people by leaders, which focuses on engagement providing training and development and how to have meaningful and and through personal objectives and positive safety conversations. performance-based remuneration. We are now aligning any potential bonus payments to individual, as well as Company and strategic Lost time injury frequency rate Employee turnover business unit, performance. 0.20 8% 2018 0.20 2018 8% 2017 0.25 2017 8% 2016 0.45 2016 9% 2015 0.39 2015 11% 2014 0.40 2014 13%

Aggreko plc Annual Report and Accounts 2018 19 GROUP PERFORMANCE REVIEW A strong performance with good revenue and earnings growth

We are pleased to report results which continue the positive momentum demonstrated at the interims. We have delivered results in line with market expectations and ahead of our guidance at the start of the year, with 10% growth in the Group’s underlying profi ts. The overall result was supported by a strong performance in Rental Solutions, which represents 52% of the Group’s revenue. With the wide-ranging initiatives we are implementing to improve our operational and capital effi ciency, we are confi dent we can meet our mid-teens ROCE target in 2020. Chris Weston Chief Executive Offi cer

→ Good underlying1 Group revenue growth of 8% Measuring our performance – Rental Solutions underlying1 revenue up 22% (52% of Group revenue) Underlying revenue growth Pre-exceptional operating – Power Solutions Industrial Measure profi t margin 1 underlying revenue up 7% Revenue growth excluding the Measure (27% of Group revenue) impact of currency movements Pre-exceptional operating profit margin. 1 and pass-through fuel. – Power Solutions Utility underlying Relevance revenue down 14% (21% of Group Relevance Our business has a large fixed cost revenue), refl ecting known off-hires As a business that is exposed to different base, therefore strong operating profit → Profi t before tax of £182 million, cycles, we look at revenue growth over margins demonstrate disciplined up 10% on an underlying1 basis and time in order to deliver shareholder variable cost control and our ability in line with market expectations value. This is calculated as the adjusted to leverage the fixed asset base. This despite currency headwinds revenue growth over the previous year. is calculated as operating profit pre- exceptional items divided by revenue. → ROCE2 of 10.3% (2017: 10.7%), up Further detail including why we exclude 0.5 percentage points on an the impact of currency movements Target underlying1 basis and pass-through fuel is provided in Our medium-term target is for Group the reported fi nancial measures on operating profit margins to achieve → Operating cash fl ow of £423 million pages 21 and 22. levels that support mid-teens ROCE (2017: £450 million), impacted in 2020. by cash outfl ows relating to Target mobilisation activities on a Our medium-term target is to grow Performance number of new contracts ahead of our markets. The operating margin was down 0.7pp however after adjusting for currency → Working capital outfl ow of £56 million Performance Rental Solutions was up 22% driven by and pass-through fuel operating margin (2017: £53 million), including increased 0.2pp with improvements £60 million outfl ow on payables strong growth across most sectors in North America. We also achieved good in Rental Solutions and Power Solutions → Fleet capex of £196 million (2017: growth in Europe and Australia Pacifi c. Industrial partially offset by a reduction £246 million), refl ecting increased Power Solutions Industrial increased 7%, in Power Solutions Utility. discipline and focus on utilisation supported by strong growth in Latin → Full year dividend maintained at America and the South Korea Winter 27.1 pence Olympics. Power Solutions Utility was down 14% primarily due to known → Awarded the supply contract for off-hires, and lower volumes and pricing temporary electricity generation in Argentina. for the Olympic and Paralympic Games in Tokyo, worth an expected Underlying revenue growth Pre-exceptional operating profi t margin $200 million revenue in 2020 → Plans to improve ROCE are well under way, including the launch of our 8% 12.5% £50 million cost reduction programme 2018 8% 2018 12.5% 2017 4% 2017 13.2%* 2016 (10)% 2016 16.4% 2015 (3)% 2015 17.6% 1 Underlying excludes pass-through fuel, currency 2014 9% 2014 19.7% and 2017 exceptional items (no exceptional items reported in 2018). A reconciliation between reported * 2017 numbers are shown on a pre-exceptional basis and have been restated for the implementation of IFRS 15. and underlying performance is detailed on page 28. Refer to Note 1 of the Accounts page 96. 2 ROCE calculation is on page 141.

20 Aggreko plc Annual Report and Accounts 2018 Strategic report

Group trading performance Post exceptional items Underlying £m 2018 20172 Change change1 2017 Change Group revenue 1,760 1,698 4% 8% 1,698 4%

Operating profi t 219 224 (2)% Shareholder information 10% 183 20% Governance Operating profi t margin (%) 12.5 13.2 (0.7)pp 0.2pp 10.7 1.8pp Profi t before tax 182 190 (4)% 10% 149 23% Diluted EPS (p) 49.2 52.4 (6)% 7% 40.0 23% Operating cash infl ow 423 450 Dividend per share (p) 27.1 27.1 – ROCE (%)3 10.3 10.7 (0.4)pp 0.5pp

The Group has adopted IFRS 15 ‘Revenue from Contracts with Customers’ with effect from 1 January 2018. Note 1 to the Accounts explains these changes in detail. Comparative fi gures for 2017 have been restated to refl ect this change. 1 Underlying excludes pass-through fuel, currency and 2017 exceptional items (no exceptional items reported in 2018). A reconciliation between reported and underlying Financial statements performance is detailed on page 28. 2 Pre-exceptional items in 2017. 3 ROCE calculation is on page 141.

Group trading performance Underlying1 Group revenue rose 8%, driven primarily by a strong performance in Rental Solutions, offset Pre-exceptional diluted Pre-exceptional return on by a decline in Power Solutions Utility, earnings per share capital employed which now represents only 21% of Group revenue. Underlying1 profi t Measure Measure before tax was up 10% at £182 million. Pre-exceptional diluted EPS. Pre-exceptional return on capital The operating margin was 12.5% (2017: employed (ROCE). Relevance 13.2%), up 0.2 percentage points on an We believe that EPS, while not perfect, Relevance underlying1 basis, with improvements in is a good measure of the returns we In a business as capital intensive as Rental Solutions and Power Solutions are generating as a Group for our Aggreko’s, profitability alone is not an Industrial partially offset by a reduction shareholders, and reflects both revenue adequate measure of performance: in Power Solutions Utility. Diluted growth and trading margins. So, for the it is perfectly possible to be generating earnings per share (DEPS) were Group as a whole, the key measure of good margins, but poor value for 49.2 pence (2017: 52.4 pence, excluding short-term financial performance is Shareholders, if assets (and in particular, exceptional items), up 7% on an diluted EPS, pre-exceptional items. EPS fleet) are not managed effi ciently. underlying1 basis. is calculated based on profit attributable We calculate ROCE by dividing The Group’s return on capital employed to equity shareholders (adjusted to operating profit pre-exceptional items (ROCE) decreased to 10.3% (2017: 10.7%) exclude exceptional items) divided by in the period by the average of the primarily due to the impact of currency. the diluted weighted average number net operating assets as at 1 January, On an underlying1 basis ROCE rose of ordinary shares ranking for dividend 30 June and 31 December. 0.5 percentage points. during the relevant period. Target Reported fi nancial measures Target Our target is to achieve mid-teens Reported revenue and operating profi t While we are exposed to different ROCE in 2020. include the translational impact of cycles and EPS varies accordingly, Performance currency as Aggreko’s revenue and we target growing EPS in line with ROCE decreased 0.4pp mainly owning profi t are earned in different currencies our strategic aims. to the impact of currency. Excluding (most notably the US Dollar), which are Performance currency and pass-through fuel ROCE then translated and reported in Sterling. EPS was down 6% however after rose 0.5pp refl ecting the increase in The movement in exchange rates in the adjusting for currency and pass- underlying profi t. period had the translational impact of through fuel EPS was up 7% driven decreasing revenue by £112 million and by the growth in operating profi t. operating profi t by £24 million. In addition, the Group separately reports fuel revenue from certain contracts in the Power Solutions Utility business in Pre-exceptional diluted EPS Pre-exceptional return on Brazil and Sri Lanka, where we manage capital employed fuel on a pass-through basis on behalf ** of our customers. The reason for the 49.18p separate reporting is that fuel revenue 10.3% on these contracts is entirely dependent 2018 49.18p 2018 10.3% on fuel prices and the volumes of fuel 2017 52.44p* 2017 10.7% consumed, which can be volatile and 2016 61.95p 2016 12.8% may distort the view of the performance of the underlying business. In 2018, 2015 71.68p 2015 16.3% fuel revenue from these contracts was 2014 82.49p 2014 19.0% £172 million (2017: £139 million). * 2017 numbers are shown on a pre-exceptional basis and have been restated for the implementation of IFRS 15. Refer to Note 1 of the Accounts page 96. ** ROCE calculation is on page 141.

Aggreko plc Annual Report and Accounts 2018 21 GROUP PERFORMANCE REVIEW CONTINUED

Divisional headlines Underlying Revenue £m 2018 2017 Change change1 Rental Solutions 822 690 19% 22% Power Solutions Industrial 424 429 (1)% 7% Utility excl. pass-through fuel 342 440 (22)% (14)% Pass-through fuel 172 139 24% 47% Group 1,760 1,698 4% 8%

Post exceptional items Underlying Operating profi t £m 2018 20172 Change change1 2017 Change Rental Solutions 105 81 30% 34% 68 55% Power Solutions Industrial 71 73 (3)% 10% 62 15% Utility excl. pass-through fuel 46 73 (37)% (23)% 56 (17)% Pass-through fuel (3) (3) n/m n/m (3) n/m Group 219 224 (2)% 10% 183 20%

1 Underlying excludes pass-through fuel, currency and 2017 exceptional items (no exceptional items reported in 2018). A reconciliation between reported and underlying performance is detailed on page 28. 2 Pre-exceptional items in 2017.

Reported fi nancial measures Power Solutions Industrial underlying1 (continued) revenue (27% of Group revenue) Reported Group revenue was up 4% on increased 7%, supported by particularly the prior year, with Rental Solutions up strong growth in Latin America of 31%, 19%, Power Solutions Industrial down 1% Asia up 11% and the Winter Olympics and Utility (excluding pass-through fuel) in South Korea. Underlying1 revenue down 22%. was up 4% excluding the Winter Olympics. Operating margin rose by There were no exceptional items 0.4 percentage points to 16.6% on an reported in 2018. During 2017 the Group Proms in the park underlying1 basis representing good incurred exceptional costs of £41 million performance across key sectors in Latin relating to the implementation of our America partially offset by the Middle Business Priorities programme, split East with the impact of the ongoing as follows: Rental Solutions £13 million, Qatar blockade. Power Solutions Industrial £11 million and Power Solutions Utility £17 million. Power Solutions Utility underlying1 revenue (21% of Group revenue) was Divisional headlines down 14% primarily due to known As previously announced, as a result of off-hires in Zimbabwe, Bangladesh the Group’s increased sector focus, we and Japan, and lower volumes and have refi ned our segmental reporting pricing in Argentina. As a result, the and reassigned all non-utility sector Powering the Power Solutions Utility margin was customer contracts from within our Winter Olympics down 1.4 percentage points on an Power Solutions Utility business into underlying1 basis to 13.4%. Power Solutions Industrial. The details of the impact of this change are Cash fl ow and balance sheet contained in Note 4(a) to the Accounts. During the year cash generated from Comparative fi gures for 2017 have been operations was £423 million (2017: restated to refl ect this change. £450 million). The decrease in operating cash fl ow is mainly driven by cash Rental Solutions underlying1 revenue outfl ows relating to mobilisation was up 22% and represented 52% of (fulfi lments assets) and demobilisation Group revenue. North America had activities, with an outfl ow of £48 million a strong year with revenue up 25%, in 2018 compared to £22 million in including £27 million (2017: £22 million) 2017. The higher outfl ows in 2018 relate earned from hurricane related work (net primarily to mobilisation costs for new of base business lost due to hurricanes) contracts in Bangladesh, Brazil and and a strong performance across St Croix. several key sectors including oil & gas, petrochemical & refi ning, utilities and In 2018 we had a working capital outfl ow building services & construction. We also of £56 million compared to a £53 million achieved good revenue growth of 17% outfl ow in 2017. This year’s outfl ow and 16% in Europe and Australia Pacifi c consisted of a £10 million outfl ow from respectively. Operating margin on an trade and other receivables, and a underlying1 basis rose 1.2 percentage £60 million outfl ow from trade and points to 12.9%, driven by improved rates other payables, partially offset by a and operational effi ciency. £14 million infl ow from inventory.

22 Aggreko plc Annual Report and Accounts 2018 Strategic report

Additional performance metrics 2018 2017 Change Average megawatts on hire (MW) 6,659 6,613 n/m Rental Solutions average megawatts on hire 1,531 1,271 20% Power Solutions Industrial average megawatts on hire 2,445 2,244 9% Power Solutions Utility average megawatts on hire 2,683 3,098 (13)%

Total Power Solutions order intake (MW) Shareholder information 1,002 1,132 (11)% Governance Power Solutions Industrial (ex. Eurasia) 271 137 98% Power Solutions Industrial (Eurasia only) 333 333 Flat Power Solutions Utility 398 662 (40)% Utilisation Rental Solutions 62% 56% 6.0pp Power Solutions Industrial 71% 69% 2.0pp Power Solutions Utility 66% 73% (7.0)pp Financial Financial statements Effective tax rate 31% 29%* 2.0pp Fleet capex (£m) 196 246 (20)% Fleet depreciation (£m) 273 275 (1)% Average net operating assets (£m) 2,119 2,090 1% Net debt (£m) (686) (652) 5%

* Pre-exceptional items

The £14 million decrease in inventory Fleet capital expenditure was Outlook was driven by the initiatives we put in £196 million (2017: £246 million), We will continue to build on the work place during the year to improve our representing 0.7 times fl eet depreciation we have done over the past three years performance in this area, including (2017: 0.9 times). Within this overall fl eet to drive effi ciency and strengthen the reduced levels of manufacturing activity spend, £79 million was invested in our foundations of the business and the aligned with our more disciplined Rental Solutions business, primarily on improvements we have seen in 2018. approach to capital expenditure. new temperature control equipment and the renewal of our oil free air (OFA) Our outlook for the Group in 2019 is in The decrease in trade and other fl eet, and £117 million in Power Solutions, line with the market’s expectations, payables balances was primarily as a including £27 million upgrading our G3 despite currency headwinds and the result of the reduced manufacturing, diesel engine to the market leading G3+. impact of IFRS 16, although with a together with the release of deferred As we continue to drive increased greater weighting to the second revenue associated with the Winter utilisation, fl eet capital expenditure is half than in 2018. In addition, the Olympics in South Korea, and the expected to remain below £200 million performance initiatives we announced timing of some contract payments in in 2019. in August, to drive operational and our Power Solutions Utility business. capital effi ciency, are beginning to take Net debt was £686 million at effect and we expect to make progress The increase in trade and other 31 December 2018, £34 million higher this year towards our mid-teens ROCE receivables of £10 million comprised a than the prior year. This resulted in net target in 2020. £9 million increase in Rental Solutions debt to EBITDA on a rolling 12-month (2017: £47 million increase), a £2 million basis of 1.3* times compared to increase in Power Solutions Industrial 1.2 times at December 2017. We remain (2017: £30 million increase), and a committed to reducing our leverage decrease of £1 million in Power Solutions over time, despite the adverse impact Utility (2017: £86 million increase). of IFRS 16. The increase in Rental Solutions is driven by revenue growth, principally Dividends in North America. In Power Solutions The Group is proposing to maintain the Utility, the level of our bad debt provision fi nal dividend at 17.7 pence per share. is broadly unchanged at $83 million Subject to shareholder approval, this will and we remain focused on managing result in a full year dividend of 27.1 pence the trade receivables which have risen (2017: 27.1 pence) per Ordinary Share; this over recent years, primarily as a result equates to dividend cover of 1.8* times of our customers’ liquidity and limited (2017: 1.9 times, pre-exceptional items). access to foreign currency rather than Dividend cover is calculated as basic any dispute or otherwise over the earnings per share for the period amounts due. divided by the full year dividend per share. We remain committed to a sustainable dividend.

* Refer to pages 141 and 142 for calculations. Our experts and equipment

Aggreko plc Annual Report and Accounts 2018 23 GROUP PERFORMANCE REVIEW CONTINUED Rental Solutions

Rental Solutions

→ 52% of Group revenue excluding pass-through fuel → Operates in North America, Northern Europe, Continental Europe and Australia Pacifi c → Average length of contract I am pleased with the fi nancial performance 3 to 6 months of all the regions across Rental Solutions. → Utilisation 62% We have shown good revenue growth as a result → Key sectors: oil & gas, petrochemical of increased focus on key sectors where customers & refi ning, utilities and building services value our specialist knowledge and experience. & construction We are also beginning to achieve benefi ts from the hard work of implementing new systems and ways of working which make us easy to do business with, while enabling us to better leverage our cost base. Bruce Pool President, Rental Solutions

Underlying Revenue £m 2018 2017 Change change1 Rental Solutions 822 690 19% 22%

Post 2017 exceptional items Underlying Operating profi t £m 2018 2017 Change change1 2017 Change Rental Solutions 105 81 30% 34% 68 55% Operating margin % 12.9% 11.8% 1.1pp 1.2pp 9.9% 3.0pp ROCE 14.7% 12.2% 2.5pp 2.7pp

1 Underlying excludes pass-through fuel, currency and 2017 exceptional items (no exceptional items reported in 2018). A reconciliation between reported and underlying performance is detailed on page 28.

→ Our Rental Solutions business had a supported by good growth in the mining very good year, with improvements sector and a 100MW contract delivering across all key metrics emergency power to Melbourne over the → Underlying1 revenue and operating summer months. profi t up 22% and 34% respectively Our Continental European business grew 1 → Improved operating margin of 12.9%, underlying revenue 24%, with good up 1.2 percentage points on an growth in most countries, in particular underlying1 basis the Netherlands and Belgium, as well as benefi ting from the Ryder Cup in France Remote monitoring → ROCE of 14.7% refl ects an underlying1 of equipment in September. Key sectors included increase of 2.7 percentage points driven petrochemical & refi ning, where we have by profi t growth in North America leveraged our experience and expertise → Strong performance in key sectors, in North America to expand our market Rental Solutions notably oil & gas (representing 13% footprint, and in the utilities sector, where Average MW on hire of Rental Solutions revenue), we have supported renewable energy Petrochemicals & Refi ning and Utilities build out as well as responding to the 1,531MW → Successful execution of the power shortages in Belgium. Commonwealth Games in Australia, The Northern European business also 2017: 1,271MW with revenue of £7 million delivered good growth with underlying1 North American underlying1 revenue revenue increasing 8%, driven by our Utilisation rose 25% on the prior year. Our sector Next Generation Gas contracts in Ireland focus continued to drive growth, and and an increase in activity in the oil & 62% we saw good performance in most of gas sector. 2017: 56% our key sectors, in particular oil and gas, Operating profi t rose signifi cantly, driven petrochemical & refi ning, building by higher rates and our measures to services & construction and utilities. improve operational effi ciency. This is In our Australia Pacifi c business, refl ected in the 1.2 percentage point 1 underlying1 revenue increased 16% underlying increase in operating margin excluding the Commonwealth Games, to 12.9%. 24 Aggreko plc Annual Report and Accounts 2018 Power Solutions Strategic report

Power Solutions Industrial

→ 27% of Group revenue excluding pass-through fuel

→ Operates Shareholder information in Latin America, Asia Governance & Middle East, Eurasia and Africa → Average length of contract ~1 year → Utilisation 71% The 7% increase in Power Solutions Industrial → Key sectors: oil & gas, mining, building underlying1 revenue and the strong operating margin services & construction reinforces our market approach. We focus on sector specialisation and the delivery of more complex, higher

value solutions to drive revenue and improve our Power Solutions Financial statements margin. At the same time we are implementing cost Utility disciplines to further improve our profi tability. → 21% of Group revenue excluding Power Solutions Utility underlying1 revenue was down pass-through fuel 14%, primarily due to known off-hires. Our approach in → Operates in Latin America, Asia this market is to leverage our ability to deliver fl exible, & Middle East, Eurasia and Africa innovative solutions while reducing our cost base and → Average length of contract ~3 years improving utilisation. → Utilisation 66% Stephen Beynon → Utility sector only Managing Director, Power Solutions

Underlying Revenue £m 2018 2017 Change change1 Industrial 424 429 (1)% 7% Utility excl. pass-through fuel 342 440 (22)% (14)% Pass-through fuel 172 139 24% 47%

Post 2017 exceptionals Underlying Operating profi t £m 2018 2017 Change change1 2017 Change Industrial 71 73 (3)% 10% 62 15% Utility excl. pass-through fuel 46 73 (37)% (23)% 56 (17)% Pass-through fuel (3) (3) n/m n/m (3) n/m

Operating margin % Industrial 16.6 16.9 (0.3)pp 0.4pp 14.2 2.4pp Utility excl. pass-through fuel 13.4 16.4 (3.0)pp (1.4)pp 12.6 0.8pp

ROCE Industrial 10.7 11.3 (0.6)pp 0.1pp Utility excl. pass-through fuel 6.2 9.2 (3.0)pp (1.6)pp

1 Underlying excludes pass-through fuel, currency and 2017 exceptional items (no exceptional items reported in 2018). A reconciliation between reported and underlying performance is detailed on page 28.

Power Solutions Industrial Power Solutions Utility → Underlying1 revenue and profi t → Underlying1 revenue was down 14% increased 7% and 10% respectively, and operating profi t down 23% supported by the Winter Olympics → Overall performance refl ects the in South Korea and good growth in impact of known off-hires in Latin America and Asia Zimbabwe, Bangladesh and Japan → Underlying1 revenue excluding the and lower volumes and pricing Winter Olympics rose 4% in Argentina → Our solutions for customers → Operating margin at 16.6% is up ROCE down 1.6 percentage points to 6.2% on an underlying1 basis, comprise our modular equipment slightly on the prior year on an and our expert people underlying1 basis refl ecting our reduced profi tability → ROCE of 10.7% is broadly fl at

Aggreko plc Annual Report and Accounts 2018 25 GROUP PERFORMANCE REVIEW CONTINUED

Power Solutions continued

Power Solutions Industrial Power Solutions Utility Underlying1 revenue increased by 7%. Underlying1 revenue decreased 14%, due In Eurasia revenue grew 7%, with good primarily to lower rates and volume in growth in its key sector of oil & gas. Argentina and off-hires in Zimbabwe, Revenue in Latin America increased 31%, Bangladesh and Japan. Consequently, supported by an emergency contract in the operating margin on an underlying1 Argentina for a local utility distribution basis was down 1.4 percentage points to company. In the Middle East revenue 13.4%. During the year we initiated a cost decreased 8% with weakness in most reduction programme to deliver savings areas, notably in Qatar and the UAE, of £50 million in 2021, the majority of largely as a result of the ongoing Qatar which will be in our Power Solutions blockade. Revenue in Africa decreased Utility business. 4%, driven by East Africa and off-hire of Average megawatts on hire was 2,683 certain mining projects, while revenue (2017: 3,098), with the reduction in Asia excluding the Winter Olympics refl ecting an increased off-hire rate increased 11% with good performances of 42% (2017: 34%), driven by known from Japan and Singapore. off-hires in Japan, Zimbabwe and Operating margin on an underlying1 Bangladesh. Order intake in the year basis was up slightly on the prior year was 398MW (2017: 662MW), including at 16.6%, with a good performance in most notably a 50MW HFO contract Latin America partially offset by the in Burkina Faso and a 70MW diesel impact of the continued Qatar blockade contract in the Philippines. In addition, in the Middle East on competition and we have agreed contract extensions pricing in that region, particularly in the on a number of key contracts, including fi rst half. our 117MW contract in Yemen and our 100MW contract in Benin. Power Solutions Industrial order intake (excluding Eurasia) for the year was Managing the trade receivables in 271 MW (2017: 137 MW). Eurasia order our Power Solutions Utility business intake was in line with the prior year continues to be a major focus, with at 333 MW (2017: 333 MW). While revenue active ongoing engagement with our in Eurasia showed good growth in customers a key priority. The primary 2018, we are experiencing increased reason for delay in receiving payments competition in this market and expect to remains our customers’ liquidity position see a reduced level of growth in 2019. and their limited access to foreign currency, with the situation in parts of Reported revenue and operating profi t Africa, Venezuela and Yemen being the decreased by 1% and 3% respectively, most diffi cult. Resolving these situations while underlying revenue and operating remains a key part of our strategy to profi t increased 7% and 10% respectively improve returns in this business. with the difference due to exchange rate movements.

Average MW on hire Average MW on hire 2,445MW 2,683MW 2017: 2,244MW 2017: 3,098MW

Order intake Order intake

604MW 398MW Reliable solutions that 2017: 470MW 2017: 662MW deliver what our customers need Utilisation Utilisation 71% 66% 2017: 69% 2017: 73%

Now and in the future, our people help make a difference

26 Aggreko plc Annual Report and Accounts 2018 FINANCIAL REVIEW

Results which demonstrate Aggreko Strategic report is returning to growth

There is much in these results to demonstrate Shareholder information that Aggreko is Governance now arresting the decline of the recent years and returning to growth. As we increase our focus on capital and operational effi ciency, we remain confi dent that we can meet our 2020 mid-teens ROCE target. Heath Drewett Chief Financial Offi cer Financial statements

A summarised Income Statement for 2018 is set out below, together with the comparative results for 2017 (both excluding and including the effects of exceptional items).

Income statement Post exceptional items Underlying £m 2018 20172 Change change1 2017 Change Revenue 1,760 1,698 4% 8% 1,698 4% Operating profi t 219 224 (2)% 10% 183 20% Net interest expense (37) (34) (9)% (34) (9)% Profi t before tax 182 190 (4)% 10% 149 23% Taxation (57) (56) (2)% (47) (23)% Profi t after tax 125 134 (6)% 102 23% Diluted EPS (p) 49.2 52.4 (6)% 7% 40.0 23% Operating margin 12.5% 13.2% (0.7)pp 0.2pp 10.7% 1.8pp ROCE* 10.3% 10.7% (0.4)pp 0.5pp

* Calculation is on page 141. 1 Underlying excludes pass-through fuel, currency and 2017 exceptional items (no exceptional items reported in 2018). A reconciliation between reported and underlying performance is detailed on page 28.

Currency translation The movement in exchange rates in the period had the translational impact of decreasing revenue by £112 million and operating profi t by £24 million. This was driven by the strength against Sterling in the majority of the principal currencies impacting the Group. Currency translation also gave rise to a £24 million decrease in the value of the Group’s net assets. Set out in the table below are the principal exchange rates which affected the Group’s profi t and net assets.

Principal exchange rates 2018 2017 (Per £ sterling) Average Year end Average Year end United States Dollar 1.34 1.27 1.29 1.35 Euro 1.13 1.11 1.14 1.13 UAE Dirhams 4.91 4.66 4.74 4.96 Australian Dollar 1.79 1.80 1.68 1.73 Brazilian Reals 4.87 4.91 4.12 4.48 Argentinian Peso 37.48 48.62 21.36 25.92 Russian Rouble 83.70 88.02 75.19 78.15

(Source: Bloomberg)

Aggreko plc Annual Report and Accounts 2018 27 FINANCIAL REVIEW CONTINUED

Reconciliation of reported to underlying results The tables below reconcile the reported and underlying revenue and operating profi t movements: Rental Solutions Industrial Utility Group Revenue £m 2018 2017 Change 2018 2017 Change 2018 2017 Change 2018 2017 Change As reported 822 690 19% 424 429 (1)% 514 579 (11)% 1,760 1,698 4% Pass-through fuel – – – – (172) (139) (172) (139) Currency impact – (18) – (32) – (41) – (91) Underlying 822 672 22% 424 397 7% 342 399 (14)% 1,588 1,468 8%

Rental Solutions Industrial Utility Group Operating profi t £m 2018 2017 Change 2018 2017 Change 2018 2017 Change 2018 2017 Change As reported 105 68 55% 71 62 15% 43 53 (18)% 219 183 20% Pass-through fuel – – – – 3 3 3 3 Currency impact – (3) – (8) – (13) – (24) Exceptional items – 13 – 11 – 17 – 41 Underlying 105 78 34% 71 65 10% 46 60 (23)% 222 203 10%

1 The currency impact is calculated by taking the 2017 results in local currency and retranslating them at 2018 average rates. 2 The currency impact line included in the tables above excludes the currency impact on pass-through fuel in PSU, which in 2018 was £21 million on revenue and £nil million on operating profi t.

Interest From a capital allocation perspective Cash fl ow The net interest charge of £37 million our priority is to invest in organic growth. During the year cash generated from was £3 million higher than last year, As well as investing organically, there operations was £423 million (2017: refl ecting higher average net debt year are opportunities for growth through £450 million). The decrease in operating on year, an increase in the effective acquisition, both for scale and capability, cash fl ow is mainly driven by cash interest rate and the net interest cost including into product adjacencies such outfl ows relating to mobilisation relating to the Defi ned Benefi t Pension as temperature control and loadbanks. (fulfi lments assets) and demobilisation Scheme (previously reported within Acquisitions are subject to our activities, with an outfl ow of £48 million administrative expenses). Interest cover disciplined capital allocation process in 2018 compared to £22 million in 2017. measured against rolling 12-month and will have to meet appropriate The higher outfl ows in 2018 relate EBITDA (Earnings before Interest, hurdle rates of return. While our fi rst primarily to mobilisation costs for new Taxes, Depreciation and Amortisation) priority is investment to generate contracts in Bangladesh, Brazil and remained strong at 14* times (2017: growth, we recognise the importance St Croix. In 2018 we had a working capital 15 times) relative to the fi nancial of the dividend in providing value to outfl ow of £56 million compared to a covenant attached to our borrowing our shareholders. Finally, as and when £53 million outfl ow in 2017. The working facilities that EBITDA should be no the opportunity arises, we will look at capital movements in the period are less than 4 times interest. returning surplus capital to shareholders. explained in more detail on page 22. The retained earnings of the Company Capital expenditure in the year was Capital structure and dividends as at 31 December 2018 were £216 million (2017: £272 million), of The objective of our strategy is to deliver £374 million and the majority of which £196 million (2017: £246 million) long-term value to shareholders while these earnings are distributable. was spent on fl eet assets. maintaining a balance sheet structure that safeguards the Group’s fi nancial Subject to shareholder approval, the position through economic cycles. proposed fi nal dividend of 17.7 pence will Given the operational risk profi le of result in a full year dividend of 27.1 pence the Group we believe gearing of (2017: 27.1 pence) per Ordinary Share, around one times net debt to EBITDA giving dividend cover (basic EPS is appropriate, recognising that from dividend by full year declared dividend) time to time it may be higher for of 1.8* times (2017: 1.9 times, pre- a period of time as investment exceptional items). opportunities present themselves.

* Calculation is on pages 141 and 142.

28 Aggreko plc Annual Report and Accounts 2018 Strategic report

Taxation change, advisory and technical support of a £5 million provision in respect of Tax strategy is provided by large accounting fi rms Yemen and currency movements. We operate in an increasingly complex with which the Group has a long The provisions are principally held to

global environment, doing business association. The use of the Group’s manage Shareholder information the tax impact of various Governance in 80 countries, many of which have external auditor for tax work of any potential historic tax exposures, largely uncertain or volatile tax regimes. To kind is not permitted. in connection with our Power Solutions ensure that our tax affairs are correctly Utilities business in Africa and Latin Approach to tax risk and consistently managed, Aggreko’s America, and potential transfer pricing The Group’s appetite for risk, including tax strategy is applied to all taxes in all risks faced by the Group with respect to tax risk, is reviewed regularly by the countries where we operate. how we transact internationally within Group Risk Committee and ratifi ed our business. In order to ensure that all Our tax strategy is reviewed and annually by the Board. Given the risk potential risks are properly understood revalidated annually and is revised as profi le of many of the countries in which and mitigated, we try to ensure that our appropriate to refl ect any material we operate, we seek to structure our local tax fi lings are made on a timely changes in our business or tax tax affairs in a way that carries a low basis, appropriate advice is taken and legislation. Our strategy is to ensure degree of risk. Only the Director of Financial statements that we proactively work with local tax that we pay, in a timely manner, Tax is permitted to consider any tax authorities when issues arise. the appropriate amount of tax planning opportunities, with permission commensurate with the activities to implement any planning required The risk that the application of performed in each country in which we from the Board or Finance Committee management judgements and operate. In particular, we recognise the as appropriate. We will not implement estimates in our tax forecasting fails importance of the tax we pay to the any tax planning that is not driven by to represent a true and fair view of our economic development of the countries commercial aims or where the sole aim tax position is an area that receives in which we operate. We aim to be is to deliver tax benefi t. signifi cant focus from management, transparent in terms of the geographic tax advisers and the Group’s external Tax management and provisioning spread of where we pay tax, with a auditor. In order to mitigate this risk, our Given the complex, uncertain and often breakdown provided in fi gures 1-3 tax position is internally reviewed four volatile nature of the tax environment in overleaf. In applying the tax strategy, times per year by the Group tax team which we operate, local compliance and we undertake to comply with the and any unanticipated variances to the governance are key areas of focus. This is applicable tax legislation utilising, forecast are reconciled and explained. particularly so for our Power Solutions where appropriate, any available In addition to the work done by the business, where we may only be in a legislative reliefs. Group’s external auditor to confi rm the country on a temporary basis. While we appropriateness of our tax provisioning, Our approach towards dealing with will always seek to manage our tax affairs tax is a matter that is regularly tax authorities and agree our tax positions in a timely considered and discussed by the We seek to build good working manner, it can often take some time to Audit Committee. The Group’s Internal relationships with local tax authorities settle our tax position and uncertainties Audit team also periodically reviews based on trust, respect and may therefore exist for a period of time, management’s assessment on the professionalism. We proactively engage, particularly where the tax regime is effectiveness of our tax controls and will either directly or through local advisers, complex or legislation is changing. also consider any relevant tax risks as with the authorities to ensure that We may therefore need to create tax part of its core assurance programme. our business and tax positions are provisions for any potential uncertain understood and that our tax positions tax positions. These provisions are based Legislative change are confi rmed in a timely manner. on reasonable estimates of the range While we continue to monitor global of possible outcomes. Management legislative change, the pace of change Tax governance uses its best judgement to determine in our main operating countries slowed Our tax governance framework the appropriate level of provision, in 2018. The tax reform agenda in the is encompassed within a set of recognising that differences of US has now largely been enacted into documented policies and procedures interpretation may arise depending legislation and any impact of this covering the application of the strategy on the facts in each case. change is refl ected in our 2018 results. and operational aspects of tax. Ultimate responsibility for tax risk and As at 31 December 2018 we held tax As the Brexit deadline moves closer, we tax operations rests with our Chief provisions totalling £24 million, all in have continued to follow developments Financial Offi cer, with day to day respect of potential direct tax exposures and have assessed the potential tax responsibility delegated to the Director (2017: £29 million, £27 million for direct impacts for our business. We continue of Tax and the tax function. To ensure and £2 million for indirect taxes). The to believe that Brexit will have not have that we fully understand our tax movement in provisions between 2017 a material tax impact on the Group. obligations and the impact on our and 2018 is principally due to the release business of any legislative

Aggreko plc Annual Report and Accounts 2018 29 FINANCIAL REVIEW CONTINUED

Cash taxes paid In comparison to 2017, corporate taxes VAT and local sales taxes have increased In 2018, Aggreko’s worldwide operations paid decreased by £8 million to by £19 million due to a reduction in resulted in direct and indirect tax £61 million. The main reductions were UK VAT recovery and a slowdown of payments of £241 million (2017: in Europe, where we received a refund VAT refunds received in Mozambique. £228 million) to tax authorities in the in the UK relating to historic double tax Customs duty has reduced by £1 million various countries in which we operate. relief claims, and in Asia principally in due to fewer imports of equipment into This amount represents all corporate Bangladesh where we made a one-off countries including Angola and Iraq. taxes paid on operations, payroll taxes tax payment in 2017 to progress an A £4 million net increase in payroll paid and collected, import duties, sales ongoing matter to the High Court. and social security taxes was driven taxes and other local taxes. These reductions were partly offset by by increased headcount in the UK, an increase in tax paid in North America US and Germany, largely as a result due to increased profi t in the region of the Younicos acquisition in 2017. compared to prior years.

Fig.1 Total taxes paid by region £m Fig.2 Total corporate taxes paid by region £m Fig.3 Total indirect taxes paid and collected by region £m

80 80 80

70 70 70

60 60 60

50 50 50

40 40 40

30 30 30

20 20 20

10 10 10

0 0 0

Asia Asia Asia Africa Europe Africa Europe Africa Europe Middle East Middle East Middle East Australia Pacific Latin America North America Australia Pacific Latin America North America Australia Pacific Latin America North America

2017 2018 2017 2018 2017 2018

Tax charge Reconciliation of the Group’s income The Group’s effective corporation tax statement tax charge and cash taxes rate for the year was 31% (2017: 29%, The Group’s total cash taxes borne and pre-exceptionals) based on a tax charge collected were £241 million, refl ecting of £57 million (2017: £56 million) on a £180 million of non-corporate taxes and profi t before taxation of £182 million £61 million of corporate taxes. The latter (2017: £190 million). While the Group’s cash tax fi gure differs from the Group’s effective tax rate has risen in 2018 this tax charge of £57 million reported in the is largely due to the Group benefi ting income statement, with the difference from a one-off tax credit in 2017 analysed in the table below. following the revaluation of our deferred £m tax liabilities in respect of the US business as a result of US tax reform Cash taxes paid 241 and the geographic mix of profi ts. Non-corporate taxes (180) Further information, including a Corporate tax paid 61 reconciliation of the current year tax Movements in deferred tax and charge, is shown at Note 10 to the prior year adjustments (10) Accounts. Looking beyond 2018, our Differences relating to timing of effective tax rate will continue to be tax payments: driven principally by our geographic mix of profi ts, the resolution of open UK 8 issues and changes in tax legislation in North America (5) the Group’s most signifi cant countries Angola 2 of operation. Other 1 Corporate tax charge per the income statement 57

30 Aggreko plc Annual Report and Accounts 2018 Strategic report

Net operating assets The net operating assets of the Group (including goodwill) at 31 December 2018 totalled £2,159 million, £85 million higher than 31 December 2017, as detailed in the table below. oenneShareholder information Governance Movement excluding the impact £m 2018 2017 Movement of currency Goodwill/intangibles/investments 235 215 9% 10% Rental fl eet 1,057 1,104 (4)% (6)% Property & plant 112 110 2% 1% Working capital (excl. interest creditors) 646 588 10% 9% Fulfi lment asset & demobilisation provision 33 (2) n/a n/a

Cash (incl. overdrafts) 76 59 28% 29% Financial statements Total net operating assets 2,159 2,074 4% 2%

A key measure of our performance is Acquisitions Pensions the return generated from the Group’s The Group completed two acquisitions Pension arrangements for our average net operating assets (ROCE). during the year, details of which are employees vary depending on best We calculate ROCE by taking the contained in Note 28 to the Accounts. practice and regulation in each country. operating profi t (pre-exceptional items) The Group operates a defi ned benefi t On 15 February 2018 the Group acquired for the year and expressing it as a scheme for UK employees, which was the business and assets of A Contact percentage of the average net operating closed to new employees joining the Electric Rentals (A Contact) in North assets at 31 December, 30 June and the Group after 1 April 2002. Most of the America. A Contact specialises in the previous 31 December. In 2018 ROCE other schemes in operation around the rental of medium and high voltage decreased to 10.3%* compared with 10.7% world are defi ned contribution schemes. electrical distribution equipment across in 2017, primarily driven by a lower return North America and furthers Aggreko’s Under IAS 19: ‘Employee Benefi ts’, in our Power Solutions Utility business. leadership position in the speciality Aggreko has recognised a pre-tax Property, plant and equipment rental market in the region. The cost pension surplus of £1 million at Our rental fl eet accounts for of the acquisition was £21 million. 31 December 2018 (2017: £25 million £1,057 million, which is around 91% of defi cit) which is determined using On 31 May 2018 the Group acquired the net book value of property, plant actuarial assumptions. The improvement the business and assets of Generator and equipment used in our business. in pension funding is primarily driven Hire Service in Australia, for a total The majority of equipment in the rental by lower life expectancies (refl ecting consideration of £3 million. fl eet is depreciated on a straight-line the latest evidence), the impact of a basis to a residual value of zero over Shareholders’ equity higher discount rate, lower expectations eight years, with some classes of rental Shareholders’ equity increased for future salary increases, and the fl eet depreciated over 10 and 12 years. by £53 million to £1,367 million, additional contributions paid by the The annual fl eet depreciation charge of represented by the net assets of the Company during the year. These were £273 million (2017: £275 million) refl ects Group of £2,053 million less net debt partially offset by the lower than the estimated service lives allocated to of £686 million. The movements in expected returns on the scheme’s assets each class of fl eet asset. Asset lives are shareholders’ equity are analysed in and incorporating an allowance in the reviewed at the start of each year and the table below: liabilities for the impact of guaranteed changed, if necessary, to refl ect their minimum pension equalisation. remaining lives in light of technological Movements in shareholders’ equity change, prospective economic utilisation and the physical condition of the assets. £m £m No changes were made in 2018. As at 1 January 2018 1,314 Profi t for the period 125 Dividend1 (69) Retained earnings 56 Employee share awards 10 Purchase of Treasury shares (12) Re-measurement of retirement benefi ts 26 Currency translation (24) Other (3) As at 31 December 2018 1,367

1 Refl ects the fi nal dividend for 2017 of 17.7 pence per share (2016 17.7 pence) that was paid during the period.

* Calculation is on page 141.

Aggreko plc Annual Report and Accounts 2018 31 FINANCIAL REVIEW CONTINUED

The sensitivities regarding the main valuation assumptions are shown in the table below. Potential Defi cit impact Profi t impact change (Increase)/ (Increase)/ Increase/ decrease decrease Assumption (decrease) (£m) (£m) Rate of increase in salaries 0.5% (1) – Discount rate (0.5)% (13) (1) Infl ation (0.5% increases on pensions increases, deferred revaluation and salary increases) 0.5% (12) (1) Longevity 1 year (3) –

Treasury The Group expects to be able to arrange Credit risk The Group’s operations expose it to a suffi cient fi nance to meet its future Cash deposits and other fi nancial variety of fi nancial risks that include funding requirements. It has been instruments give rise to credit risk on liquidity, the effects of changes in the Group’s custom and practice to amounts due from counterparties. foreign currency exchange rates, interest refi nance its facilities in advance of their The Group manages this risk by limiting rates, and credit risk. The Group has a maturity dates, providing that there is the aggregate amounts and their centralised treasury operation whose an ongoing need for those facilities. duration depending on external credit primary role is to ensure that adequate ratings of the relevant counterparty. In Net debt amounted to £686 million at liquidity is available to meet the Group’s the case of fi nancial assets exposed to 31 December 2018 (2017: £652 million) funding requirements as they arise, credit risk, the carrying amount in the and, at that date, un-drawn committed and that fi nancial risk arising from balance sheet, net of any applicable facilities were £465 million. the Group’s underlying operations is provision for loss, represents the effectively identifi ed and managed. Further detail can be found in the Going amount exposed to credit risk. Concern disclosure within Note 1 to the The treasury operations are conducted Insurance Annual Report and Accounts. in accordance with policies and The Group operates a policy of buying procedures approved by the Board Interest rate risk cover against the material risks which and are reviewed annually. Financial The Group’s policy is to manage its the business faces, where it is possible instruments are only executed for exposure to interest rates by ensuring to purchase such cover on reasonable hedging purposes, and transactions that an appropriate balance of fi xed and terms. Where this is not possible, or are speculative in nature are expressly fl oating rate debt. At 31 December where the risks would not have a forbidden. Monthly reports are provided 2018, £591 million of the net debt of material impact on the Group as a to senior management and treasury £686 million was at fi xed rates of interest whole, we self-insure. operations are subject to periodic resulting in a fi xed to fl oating rate net Principal risks and uncertainties internal and external review. debt ratio of 86:14 (2017: 94:6). The In the day to day operations of the proportion of our debt with fi xed interest Liquidity and funding Group, we face various risks and rates was higher than usual at the 2018 The Group maintains suffi cient facilities uncertainties. We seek both to prevent and 2017 year ends due to some fi xed to meet its funding requirements over these risks from materialising and to rate debt maturities in the fi rst half of the medium term. At 31 December 2018, mitigate their impact if they do arise. 2018 and 2019. these facilities totalled £1,191 million in The Board has developed a risk the form of committed bank facilities Foreign exchange risk management framework to facilitate arranged on a bilateral basis with The Group is subject to currency this. The principal risks that we believe several international banks and private exposure on the translation into Sterling could potentially affect the Group are placement lenders. The fi nancial of its net investments in overseas summarised below: covenants attached to these facilities subsidiaries. In order to reduce the → Global macroeconomic uncertainty are that EBITDA should be no less than currency risk arising, the Group uses 4 times interest and net debt should direct borrowings in the same currency → Market dynamics be no more than 3 times EBITDA; at as those investments. Group borrowings → Disruptive technology 31 December 2018, these stood at are predominantly drawn down in the 14* times and 1.3* times respectively. The currencies used by the Group. → Talent management Group does not expect to breach these The Group manages its currency fl ows to → New technology market introduction covenants in the year from the date of minimise foreign exchange risk arising approval of these fi nancial statements. → Change management on transactions denominated in foreign currencies and uses forward contracts → Cyber security and forward currency options, where → Escalating sanctions appropriate, in order to hedge net currency fl ows. → Health and safety → Security → Failure to conduct business dealings with integrity and honesty → Failure to collect payments or to recover assets

* Calculation is on pages 141 and 142.

32 Aggreko plc Annual Report and Accounts 2018 Strategic report

This year three risks were promoted to UK withdrawal from the European the Group’s register of principal risks Union and two risks were relegated. At this point we do not know whether

the UK will leave the EU with a deal, Shareholder information Governance Risks promoted to the Group’s register without a deal or whether the decision this year: to leave will be revoked and we will → Global macroeconomic continue to monitor the situation closely. uncertainty: Geopolitical and global However, as a business with over 80% of macroeconomic uncertainty may revenues derived from territories outside result in lower than expected the UK and the European Union, we do GDP growth, reducing demand not expect the UK’s withdrawal from for our services. the European Union to have a material impact on the Group’s underlying → Change management: One of our trading performance. Notwithstanding strategic priorities is to update Rental this, a material change in the relative Solutions’ systems and processes Financial statements strength of Sterling could give rise to to better meet the needs of our signifi cant volatility in the Group’s customers. We are in a critical period reported results. of implementation during which the likelihood of disruption to operations For further detail on the principal risks is highest. and uncertainties of the Group, please see page 40 → Escalating sanctions: Sanctions have been extended in some countries in Shareholder information which we operate. Further extensions Our website can be accessed at to sanctions could restrict our ability www.plc.aggreko.com. This contains to service existing customers and win a large amount of information about new work. our business. The website also carries copies of recent investor presentations, Risks relegated from last year’s Group as well as London Stock Exchange register: announcements. → Equipment obsolescence: While we have been introducing new fl eet and technologies into our business we have focused on ensuring the continued utilisation of our older fl eet. We have successfully identifi ed applications which best utilise this fl eet and, as a result, the risk that Chris Weston this equipment becomes obsolete Chief Executive Offi cer before the end of its useful life has now reduced. → Funding our strategic plan: The risk that an unexpected funding requirement for working capital affects our ability to fund the strategic plan has fallen as a result of initiatives to improve the forecasting and Heath Drewett management of working capital. Chief Financial Offi cer

Aggreko plc Annual Report and Accounts 2018 33 STAKEHOLDERS

We actively engage with our stakeholders

We engage with all our stakeholders, which we believe is critical to our success and sustainability.

Investors Customers

The Board values the importance of Institutional investors Aggreko Listens building strong investor relations, Ongoing engagement Customers are at the heart of all that delivered through an active shareholder During the year, the investor we do. Our ‘Aggreko Listens’ tool feeds communication programme. We engagement programme involved into one of our management KPIs which actively seek dialogue with the market formal events, site visits, smaller group is constantly reviewed to understand to understand what analysts and and one-to-one investor meetings. customer perceptions. Over the past investors think about us and help The investor relations team and senior two years, significant customer them understand our business. management conducted 133 meetings engagement has led us to make The Board receives regular updates in 2018, engaging with 82 institutions. transformational changes to our through briefi ngs and reports from Remuneration consultation business. investor relations, the CEO, CFO and Following constructive consultation with Company advisers. The Voice of Customer programme shareholders we were pleased to receive has transformed how we measure our Annual Report and Accounts strong support for our remuneration performance by showing Aggreko Each year we assess how we can policy proposals at the 2018 AGM, with through the eyes of our customers, to improve understanding of our 98.6% of shareholders voting in favour. deliver greater transparency and clarity business and bring it to life through Investor perception study on what to tackle to drive improvements the annual report. To help inform our engagement for the benefi t of this key stakeholder. Annual General Meeting (AGM) with investors, we undertook an independent investor perception Simpler to do business with Our AGM provides an opportunity For more transactional sales, we are for engagement with shareholders. study in early 2018. This helped us understand investor views on the developing an e-commerce platform Webcasts and conference calls performance and management of to provide a more agile, cost-effective Our full year and half year results the business and the fi ndings were channel with a better service are webcast live on our website. reviewed by the Board. proposition. Investor website CRM system Debt investors Our investor relations website An enhanced customer relationship Ongoing engagement remains a central resource to view management system provides us with On an annual basis we offer our lenders our latest announcements and a better understanding of customer a formal briefing and the opportunity associated materials. requirements, improves internal to ask questions of senior management. collaboration across the Group, and increases the speed of service delivery. Private shareholders Ad hoc engagement We always respond to private shareholder enquiries and provide the same level of information as institutional shareholders should they ask for it.

We regularly communicate with the market, and we actively seek dialogue to understand what analysts Customers are at the core of and investors think about us all that we do and to help them understand our business better. Heath Drewett Chief Financial Offi cer

34 Aggreko plc Annual Report and Accounts 2018 Strategic report oenneShareholder information Governance Local communities Employees Suppliers

While we often provide essential With our employees at the heart In 2015, we introduced a Group services for our customers, it is of our customer proposition, we procurement function to improve important that we take our enthusiastically seek to engage with, relationships with suppliers and stakeholders with us when we and listen to our employees about generate savings across the Group. operate in their communities. what matters to them as we transform We work in partnership with our our business together. key suppliers, particularly relating Financial statements Local training and employment to our fleet, and share operational Wherever we operate in the world, Be Heard surveys data to improve performance and we seek to employ and train local The quarterly Be Heard Employee drive innovation. people; 79% of our global workforce Engagement Survey achieved a very are locally employed. high engagement score of 76% in 2018 Code of Conduct (up 1% on last year) and an overall pride Apprenticeships We expect our suppliers to share our in working at Aggreko score of 88%, We run apprenticeship schemes at commitment to conducting business in line with the prior year. our larger locations across the Group with integrity, honesty and in a socially and currently employ 49 apprentices Annual Plan on a Page responsible and sustainable way, in nine countries. We share an annual Plan on a Page and to work in partnership with us to help our teams align behind the key to achieve this goal. Orange Days of Difference actions to deliver our budget, updating We expect all our suppliers to sign As part of the ‘Making a Massive our progress on a quarterly basis. up to our Code of Conduct and ways Difference’ policy which defi nes our of doing business. We monitor approach to Corporate Community Senior Leadership Team compliance and have the ability Investment, we launched Orange Given the diverse and dispersed nature to terminate a relationship in the Days of Difference globally, with over of our teams, we regularly brief a core event of a breach. 1,300 individuals taking part. group of senior leaders through calls, emails and face to face meetings to help Development partnerships manage communications, priorities and Through sharing field data with our sentiment across the business. key suppliers, we are reducing the total cost of ownership of our fleet Acting like owners while continuously innovating to We are living and breathing Always drive performance improvements. Orange – our people are demonstrating our values and have a good understanding of the important part our culture plays in helping us to grow. 83% of our people stated they agree with this sentiment in our 2018 employee survey (Be Heard), up 3% on 2017.

I am very proud of the way As we work in partnership in which our people have with our suppliers, we embraced our values. Their expect them to share our An Orange Day of Difference commitment and dedication commitment to integrity attended by both Chris are making a difference to and honesty as part of Weston and Heath Drewett our business. conducting business in Ken Hanna a socially responsible Chairman and sustainable way. Chris Weston Chief Executive Offi cer

Aggreko plc Annual Report and Accounts 2018 35 SUSTAINABILITY

To be successful, we must be sustainable

The content on these two pages constitutes Aggreko’s To be a sustainable company Non-Financial Information Statement, covering means we have to manage our requirements in respect of the environment, people, impact on society by which we mean the environment, our people, social and community issues, human rights and the communities in which we anti-bribery and anti-corruption. The following operate, as well as our customers. information, found elsewhere in this Strategic Report, We do all this to the highest is incorporated into this statement by cross-reference: standards of integrity and honesty. Chris Weston Employee discussion page 18 Chief Executive Offi cer A description of our business model page 06 Principal risks and uncertainties page 38 Non-fi nancial key performance indicators pages 13, 15, 17 and 19

The Priorities Outcomes environment → Minimise our → Maintain our reputation environmental impact for responsible → Be accountable and management of transparent with environmental matters regards to our → Gain commercial environmental footprint benefi t through development of new solutions to environmental problems

Our people Priorities Outcomes → Ensure the health and → Attract and retain the safety of our people and best people others at work → Keep our people safe → Promote equal and reduce downtime opportunities Read more about our → Provide career and strategic objective of personal development Expert People on page 18 → Operate with due regard to human rights

Social and Priorities Outcomes community → Engage with local → Build business longevity issues communities and work → Gain new talent for in partnership the organisation → Recruit, train and develop local people → Participate in activities that make a difference

Ethics, human Priorities Outcomes rights, anti- → Ensure we operate with → Maintain our reputation bribery and integrity and honesty for integrity anti-corruption → Make sure that we are in → Benefi t operationally compliance with laws from good working and regulations practices

36 Aggreko plc Annual Report and Accounts 2018 Strategic report

Environment Social and community issues This gives us a robust framework for appointing and working with third- We take our responsibility for Aggreko works in a wide variety party representatives. reducing our impact on the of countries and our social Gifts, entertainment and hospitality, environment, including through contribution is an important above a nominal value, offered by, climate change, seriously. means of giving back to the or given to, Aggreko employees are

We acknowledge that this is communities in which we work. recorded Shareholder information centrally and monitored by Governance inextricably linked to remaining the Head of Compliance. We challenge The benefi ts of our presence through any proposed gifts or hospitality which a successful business. our operations could be perceived as potentially Affordable and Clean Energy Our local presence in communities, inappropriate. (Sustainable Development Goal 7) especially in developing markets, brings benefi ts including the support of We have an independent, multi-lingual is where we have most impact compliance Speaking Up hotline, The provision of electricity, heating industry and commerce; the provision of power for communities which need operated by an external agency, and cooling is essential in the global which is available to all employees economy; however, this comes with it; the creation of local employment; and enabling skills development. and allows concerns to be reported on challenges, particularly environmental. an anonymous basis. All reports are As a consequence of the fuel sources ‘Making a Massive Difference’: our followed up, and we regularly analyse Financial statements that we use in our products, it is community investment strategy the types of reports we receive and, inevitable that our activities will have We actively engage in supporting the where appropriate, our Group Internal an impact on the environment. In 2018, local communities in which we work: Audit team investigates. 99% of our greenhouse gas emissions → came from the operation of our fl eet. We are proactive in recruiting locally Human rights from the community, with over We apply high employment standards We are also aware of the other 100 nationalities across the Group. across our business, complying with environmental impacts of our → Our extensive on-the-job training for employment, health and safety and operations, such as refrigerant emissions human rights laws to ensure our and noise pollution. In each case, we new recruits gives us highly skilled staff, trained on our own equipment. employees are safe. We expect our continuously work to reduce the impact suppliers to adopt our Supplier Code of that we have on the environment; for → Relationships in the local communities Conduct, which sets out the minimum example, by using custom-built acoustic prove valuable when we are running a standards we require, including enclosures, high performance isolation contract for a number of years. workers’ fundamental rights covering and attenuation systems to reduce noise. → Our charitable donations include standards of pay, working hours and We expect the drive for affordable and the education of children through freedom of association. Our modern clean energy to increase the emphasis our partnership with BookAid and slavery statement is available to read at on reducing greenhouse gas emissions, through Shelterbox to support 700 www.plc.aggreko.com, and provides increasing the use of renewables, and families with emergency shelter in more detail on the approach we take stopping practices such as fl aring gas. the Philippines following Typhoon in relation to modern slavery. In developing countries, the priority Mangkhut. Data protection and cyber security remains providing power and → Orange Days of Difference enabled We have introduced our data policy accessing the associated social 1,300 of our people to volunteer their to ensure we comply with new data and economic benefi ts. time supporting the communities protection regulations and provide training for its application. We respond with our innovation and we serve. investment in technology with the We discuss cyber risks and mitigations aim of lowering the cost of energy Ethics, human rights, anti- on page 42. for our customers through improved bribery and anti-corruption fuel effi ciency, and reducing the environmental impact of our products. Aggreko conducts its business with integrity and honesty, and Mitigating our impact we are proud of our reputation Following the December 2018 index We use our technical know-how review FTSE Russell, the global index and innovation to mitigate our for being fair and professional. provider, confi rmed that Aggreko environmental impact. Ethics Policy has been independently assessed We discuss this in our strategy The standards and behaviours we expect according to the FTSE4Good criteria, section on page 15. from our employees, as defi ned by our and has satisfi ed the requirements Ethics Policy, allow us to challenge any to become a constituent of the We manage our greenhouse improper behaviours. The policy covers FTSE4Good Index Series. Created gas emissions due diligence, gifts and hospitality, by FTSE Russell, the FTSE4Good Please see our report on our carbon charitable donations, facilitation Index Series is designed to measure emissions on page 83. payments, confl icts of interest and the performance of companies speaking up. We provide training on demonstrating strong Environmental, these areas to all employees, regularly Social and Governance (ESG) monitor compliance, and seek assurance practices. The FTSE4Good indices that they are effective. are used by a wide variety of market participants to create and assess Anti-bribery and anti-corruption responsible investment funds and Our sales consultants are contractually other products. required to comply with our Ethics Policy and we provide ethics training to ensure they remain alert to potential third-party risks. We monitor their remuneration and all payments.

Aggreko plc Annual Report and Accounts 2018 37 RISK Risk factors that could affect business performance

The Group recognises the importance of identifying and actively managing the fi nancial and non-fi nancial risks facing the business. We want our people to feel empowered to take advantage of attractive opportunities, yet we want them to do so within the risk appetite set by the Board. It is important that we have in place a robust, repeatable risk management framework to facilitate this.

Risk management framework – roles and responsibilities

The Board has implemented a risk management framework that is summarised in the diagram below.

→ Ultimate responsibility for risk management and internal control → Approves the risk management framework → Approves risk appetite and monitors compliance Ultimate → Approves the Group Register of Principal Risks responsibility Board → Approves the viability statement → Responsible for reviewing the effectiveness of the Group’s systems for internal control and Oversight risk management Audit Committee → Reviews and challenges the risk management framework (makes recommendations to the Board) → Reviews the effectiveness of the control environment → Reviews the effectiveness of and approves the approach for the viability statement → Responsible for implementing and embedding risk management and internal controls → Defi nes the risk management process to be followed by the business (including risk appetite) Management and monitoring → Reviews and challenges the Group Register of Group Risk Committee Principal Risks ensuring controls identifi ed are (makes recommendations operating and tracks closure of items to the Audit Committee and Board) → Facilitates the Group’s risk process, collating risk registers and consolidating the Group Register of Principal Risks → Aligns assurance activity → Responsible for identifi cation, prioritisation, Ownership assessment and monitoring of risks which may arise in the business Business units, Senior Leadership Team → and central functions Risks and associated controls are owned and operated by management (supported by Group Risk) → Risk registers are maintained and form the basis of the Group Register of Principal Risks

38 Aggreko plc Annual Report and Accounts 2018 Strategic report

Approach to managing risk Focus during the year Risks promoted to the Our approach to risk management In 2018, we have continued to develop Group’s register this year: aims to deliver effective and effi cient our risk management framework. Our → Global macroeconomic uncertainty: management of risk, while also making Group Risk function has worked with Geopolitical and global a positive contribution to effective experts within our business to identify macroeconomic uncertainty may decision making and performance the causes and consequences of each result Shareholder information in lower than expected GDP Governance improvement. risk event in Aggreko’s universe as well growth, reducing demand for our as the effectiveness of our preventions The Group compiles a Register of services. and mitigations. We have developed a Principal Risks from risk registers yardstick to let us compare the likelihood → Escalating sanctions: Sanctions have held by our business units and central and impact of different kinds of risk. been extended in some countries in functions. We monitor the level of each This has allowed us to make the fi rst which we operate. Further extensions risk against our appetite for it using quantitative estimate of the aggregate to sanctions could restrict our ability quantitative and qualitative measures risk that the business faces. to service existing customers and win and identify any actions required new work. to manage the residual risk, after We have been aligning our assurance considering our existing controls. activities to our risk framework so → Change management: One of

that we can use the results to inform our strategic priorities is to update Financial statements Risk appetite estimates of the effectiveness of our Rental Solutions systems and preventions and mitigations and to processes to better meet the needs The Group is willing to take and manage identify opportunities to improve of our customers. We are in a critical considered risks within clear boundaries effi ciency. This, together with the period of implementation during set by the Executive Committee and opinions of our business experts and which the likelihood of disruption approved by the Board. We have defi ned monitoring the external environment, to operations is highest. our appetite for risks in each of the has helped us identify emerging risks categories below and use this to decide for the last two years, well ahead of the Risks relegated from last what mitigation is required for each risk. introduction of the new requirement year’s register: of the UK corporate governance code → from 2019. Equipment obsolescence: While Risk categories we have been introducing new fl eet and technologies into our business, We allocate risks into the fi ve Changes since 2017 we have focused on ensuring the categories below and use them Our Group Register of Principal Risks continued utilisation of our older to help defi ne our risk appetite. will change from time to time as we fl eet. We have successfully identifi ed Strategic take action to improve the management applications which best utilise this Risks related to the Group’s ability to of risks, improve the processes we use fl eet and as a result the risk that deliver on strategic priorities. to identify risks and as the business this equipment becomes obsolete environment in which we operate before the end of its useful life has Operational evolves. This year, we have seen three now reduced. Risks arising from people, processes additional risks promoted to the Group → Funding our strategic plan: The and systems impacting upon effi cient register and two risks relegated. and effective operations. risk that an unexpected funding requirement for working capital Hazard affects our ability to fund the strategic Risks related to the wellbeing of our plan has fallen as a result of initiatives people and the wider stakeholders to improve the forecasting and with whom we interact. management of working capital. Compliance Risks related to non-compliance with government and regulatory requirements in the jurisdictions in which we operate. Financial Risks which might impact upon our ability to meet our fi nancial expectations and obligations.

Aggreko plc Annual Report and Accounts 2018 39 RISK CONTINUED Principal risks and uncertainties

Strategic: Strategic: The Directors have carried out a robust assessment of the Global macroeconomic Market dynamics principal risks and uncertainties uncertainty Power Solutions facing Aggreko, including those Executive responsible that would threaten our future Executive responsible Chris Weston, Chief Executive Offi cer Stephen Beynon, Managing Director performance, business model, Power Solutions solvency and liquidity. The list Risk Lower than expected global GDP Risk over the following pages is not reduces demand Changes in utility power markets exhaustive; our operations reduce returns from our Power Solutions are large and geographically Primary KPI impacted Utility business → diverse and the list might Capital activity Primary KPI impacted change if something that seems → Customer activity → Capital activity immaterial today becomes → Earnings per share → Customer activity more important tomorrow. → Operating profi t margin → Customer loyalty The order in which our principal → Return on capital employed → Earnings per share risks are presented follows our → Revenue growth → Operating profi t margin risk categorisation model. Background and impact → Return on capital employed Several geopolitical factors have the potential to impact upon our ability to → Revenue growth meet our forecast performance for 2019 Background and impact and beyond. A change in utility power market Uncertainty with respect to Brexit; oil dynamics could have a material impact price volatility; Russian foreign policy on revenue and profi t. unpredictability; US trade policy shifts; The impact of commodity prices on and the potential for a global economic the economies of developing countries slowdown due to potentially lower has reduced their capacity to pay for growth in China each have the potential temporary power. to impact upon our forecasts. Customer buying power has increased Prevention and mitigation because of more competition for → Market analysis and monitoring power projects. → Market and product diversifi cation The power gap may reduce as permanent power solutions come → Mobile, modular, homogeneous online. equipment allows transfer between markets Prevention and mitigation → Improved sales and marketing → Further development of our Power capability, resourcing and Solutions Industrial business performance management → Mobile, modular, homogeneous → Technology improvements make equipment allows transfer between our offerings more competitive markets → Internal effi ciency improvements → Improved sales capability, resourcing will make us more competitive and performance management → Delivery of our strategic priorities → Market analysis to improve the ease with which → Technology improvements make customers can do business with us our offerings more competitive Changes during 2018 → Internal effi ciency improvements The factors noted above have escalated will make us more competitive over the course of the year, resulting in increased levels of uncertainty as Changes during 2018 to whether global GDP forecasts will We have had a challenging year in be met. our Power Solutions Utility business, primarily due to known off-hires in Read more about our perspectives Zimbabwe, Bangladesh and Japan and on Brexit on page 45 lower volumes and pricing in Argentina. A cost reduction programme is in progress to increase the effi ciency of our operations. We also continue to develop our Industrial business, this having seen good growth in 2018.

Read more about Power Solutions performance on page 25

40 Aggreko plc Annual Report and Accounts 2018 Strategic report

Strategic: Strategic: Strategic: Market dynamics Disruptive technology Talent management Rental Solutions oenneShareholder information Governance Executive responsible Executive responsible Executive responsible Bruce Pool, President Rental Solutions Dan Ibbetson, Managing Director Global Anna Filipopoulos, Group Human Products & Technology Resources Director Risk Challenging market dynamics reduce Risk Risk volume and profi tability in our Rental The introduction of new technology into Failure to attract, retain and develop Solutions business the power market reduces our ability to key personnel remain competitive Primary KPI impacted Primary KPI impacted → Capital activity Primary KPI impacted → Employee satisfaction → Capital activity

→ Customer activity → Return on capital employed Financial statements → Customer activity → Customer loyalty → Revenue growth → Earnings per share → Earnings per share Background and impact → Fleet size and composition Our people make the difference → Operating profi t margin between great performance and → Operating profi t margin → Return on capital employed mediocre performance. → Return on capital employed → Revenue growth The high quality technical capability → Revenue growth and exemplary attitude of our people Background and impact is a competitive advantage which we North America is the largest region Background and impact wish to retain. in Rental Solutions. Oil & gas and Alternative and more distributed energy petrochemical & refi ning have sources are becoming increasingly We are keenly aware of the need to traditionally been its largest market available and affordable. attract the right people, establish sectors. Any downturn in these sectors them in their roles and manage their New energy business models using could have a material impact on revenue development. technology to manage the on and and profi t. off-grid environment are emerging. Failure to do so could result in loss of Customer buying power has increased productivity and intellectual capital, These developments could affect our because of an increase in supply of increased recruitment costs and lower competitiveness as power providers. fl eet in the market and increased staff morale. competition. As we develop our battery technology Prevention and mitigation offering, we continue to monitor further Our ability to differentiate our services developments in this evolving area to → Recruitment policy from those of our competitors as ensure that we take advantage of specialist energy and temperature → Succession planning opportunities and manage associated control providers is critical to us risks as appropriate. → Talent management reviews maintaining market share and and development plans profi tability. Prevention and mitigation → Feedback from staff surveys → Diversifi ed product portfolio Prevention and mitigation incorporated into strategic priorities → Continued diversifi cation into other → Technology roadmap for existing → Benchmarking of remuneration market sectors and alternative technologies and benefi ts to attract and retain → Mobile, modular, homogeneous → Bolt-on acquisition of new the required talent equipment allows transfer between technologies and capabilities → Long-term incentive plans markets → Market requirements monitoring → Performance management → Improved sales capability, resourcing Changes during 2018 and performance management Changes during 2018 Following our acquisition of Younicos Attrition rates remained stable → Market analysis in 2017, we have refi ned our business compared to those in 2017. While several to introduce a new technology and → Delivery of our strategic priorities senior management positions were microgrid capability. We have also to improve the ease with which recruited externally, we continue to seek utilised our new capabilities to develop customers can do business with us to promote from within where possible. a new power storage product which We continue to advance our succession Changes during 2018 will be available for rental in 2019. planning programme to this end. Despite ongoing competitive pressures, our Rental Solutions business had a Read more about the technology Read more about People on page 18 strong year, primarily driven by our developments taking place as part North American business. We have seen of our strategic priorities on page 14 improvements in volumes, rates and fl eet utilisation across our business in addition to good growth in the majority of our key sectors.

Read more about Rental Solutions performance on page 24

Aggreko plc Annual Report and Accounts 2018 41 RISK CONTINUED

Strategic: Strategic: Operational: New technology Change management Cyber security market introduction

Executive responsible Executive responsible Executive responsible Stephen Beynon, Managing Director Bruce Pool, President Rental Solutions Grant Nairn, Group Chief Information Power Solutions and Dan Ibbetson, Offi cer Risk Managing Director Global Products & Failure to successfully transform the Risk Technology Rental Solutions business to match the A cyber security incident leads to a Risk needs of our customers loss of data, a loss of data integrity Ineffective new product development or disruption to operations Primary KPI impacted and market introduction hinders growth → Customer activity Primary KPI impacted Primary KPI impacted → → Customer loyalty → Customer loyalty Capital activity → → Earnings per share → Customer activity Earnings per share → Operating profi t margin → Earnings per share → Operating profi t margin → Return on capital employed → Fleet size and composition → Return on capital employed → Revenue growth → Operating profi t margin → Revenue growth Background and impact → Return on capital employed Background and impact A cyber security incident may be caused We continue to develop our systems → Revenue growth by an external attack, internal attack or and processes to make ourselves more user error. Background and impact effi cient and easier to do business with. New product development and Such an incident may lead to the loss of If we do not successfully execute these introduction is one of our priorities. commercially sensitive data, a loss of in a timely and sustainable manner it data integrity within our systems or the New products introduced recently could result in a material impact on loss of fi nancial assets through fraud. include: engines with greater fuel future revenue and profi t. effi ciency e.g. Next Generation Gas A successful cyberattack on our back- Prevention and mitigation (NGG); alternative fuel technology e.g. offi ce or operational control systems Heavy Fuel Oil (HFO); and renewable → Senior leadership focus and could also result in us not being able technology e.g. diesel/solar hybrid. sponsorship to deliver service to our customers. We continue to develop an enhanced → Project management disciplines in As a result we could suffer reputational power storage solution based on the place to provide challenge, assurance damage, revenue loss and fi nancial technology acquired with our Younicos and risk oversight penalties. acquisition. → Adequate resourcing in place to Prevention and mitigation Failure to develop and introduce deliver planned improvements → A cyber security forum monitors new products may lead to product risk threats and directs actions → Business user acceptance testing obsolescence and reduce revenue as appropriate and profi t. and training → We have a suite of security Changes during 2018 Prevention and mitigation technologies in place, including We are in a critical period of antivirus and malware software, → Market requirements monitoring implementation during which the fi rewalls, email scanning and internet → likelihood of disruption to operations New product introduction process monitoring identifi es and resolves product is highest. performance issues → Third-party expertise engaged to assist with incident response and → Standard operating procedures Read more about the effi ciency security penetration testing facilitate effective commissioning developments taking place as part and operation of our strategic priorities on page 16 → IT user awareness policy and training → Marketing strategies formulated for designed and rolled out across the new products organisation → Technical training on all new → Future system developments products delivered to our technicians incorporate encryption and security and engineers at the design stage → Training delivered to our sales teams Changes during 2018 on the products, market opportunities We have continued to implement and commercial risks associated with improvements to our defences by new technology upskilling our people and improving our security technologies. That said, → Regular monitoring of sales pipeline there has again been an increase in Changes during 2018 the number of fi rms suffering cyber We continue to see increased utilisation security breaches. of our NGG and HFO products, while As a result of the general increase in the our hybrid solutions are attracting level of threat, we believe that this risk considerable interest. score has increased since last year. We Read more about the technology are investing further in this area in 2019 developments taking place as part to keep pace with the external threat. of our strategic priorities on page 14

42 Aggreko plc Annual Report and Accounts 2018 Strategic report

Operational: Hazard: Hazard: Escalating sanctions Health and safety Security continued oenneShareholder information Governance Executive responsible Executive responsible Stephen Beynon, Managing Director Some of our people work in high Chris Weston, Chief Executive Offi cer Power Solutions risk locations. Besides the security Risk considerations, issues facing these Risk A security incident occurs which affects employees include: poor road Escalating sanctions impact upon our our people, assets, or our operations ability to service existing customers infrastructure, a lack of access to and win new work healthcare services and exposure to Primary KPI impacted contagious diseases. We also operate on → Earnings per share Primary KPI impacted high risk customer sites such as offshore → Earnings per share oil and wind platforms and mine sites. → Employee satisfaction Financial statements → Operating profi t margin Prevention and mitigation → Operating profi t margin → Return on capital employed → Senior leadership focus and → Return on capital employed engagement with regular HSE → Revenue growth → Revenue growth reporting → Safety Background and impact → Regular management safety walks We are comfortable that we have Background and impact → Group HSE policy communicated appropriate procedures in place A security incident may adversely affect globally in all relevant languages to manage our compliance with the wellbeing of our people, the security sanctions regulations. → Appropriate training is delivered of our assets, our reputation or our ability to generate revenue. There is the potential that any further → Staff are empowered to stop work sanctions might impede our ability when they feel safety may be Prevention and mitigation to service current customers or win compromised → Group security policy communicated new work. → HSE risk assessments are undertaken globally in all relevant languages Prevention and mitigation and comprehensive safety procedures → Group Security team under the → Monitoring the legal and regulatory support our standard practices direction of the Group Head of environment → HSE compliance audits are conducted Security provides guidance and → Mobile, modular, homogeneous regularly and all staff are encouraged direction on appropriate security equipment allows transfer between to report risks and incidents requirements markets if unutilised → Our equipment is subject to rigorous → Monitoring of security environments → External support from legal counsel testing prior to use and is maintained in countries where we operate as required to a high standard → Security compliance reviews Changes during 2018 → Where health matters are of concern, completed periodically by the Sanctions have been extended in some we implement stringent testing security team countries in which we operate. Further procedures and restrict site access → Group-wide Travel Management extensions to sanctions could restrict our → Comprehensive site induction System, provides pre-travel guidance ability to service existing customers and materials are provided to all visitors and allows monitoring of travellers win new work. and staff deployed into a new country → Head of Security provides monthly → Defensive driving training is provided briefi ngs to the Executive Committee Hazard: in high risk countries, with journey → In some cases, insurance against management part of our HSE system Health and safety losses has been procured Changes during 2018 Changes during 2018 Our lost time accident frequency rate No material changes during 2018. Executive responsible has continued to fall in 2018. We continue to face specifi c security Chris Weston, Chief Executive Offi cer Safety has continued to be a key area of challenges in Afghanistan, Iraq, Risk focus in 2018. Alongside the introduction Venezuela and Yemen. Our security A health and safety incident occurs of ‘Stop Work Authority’, work has policy and procedures have been which results in serious illness, injury continued to deliver relevant training to embedded during the year and we have or death all staff. In addition, we have launched launched an online incident reporting tool. Security audits will be completed Primary KPI impacted Standard Zero, a revised framework for HSE governance, planning and risk going forward. → Employee satisfaction management. This will provide clarity → Safety on the roles and responsibilities we each have to deliver our services safely. Background and impact We aim to embed this within the Our business involves transporting, business during 2019. installing and operating equipment which is heavy, produces lethal voltages Read more about Health or very high pressure air and involves and safety on page 18 the use of millions of litres of fuel. All of these could cause serious damage to our people and third parties if not handled with care.

Aggreko plc Annual Report and Accounts 2018 43 RISK CONTINUED

Compliance: Financial: Failure to conduct business dealings Failure to collect with integrity and honesty payments or to recover assets

Executive responsible → Board-level leadership through our Executive responsible Peter Kennerley, Group Legal Director Ethics & Corporate Responsibility Heath Drewett, Chief Financial Offi cer & Company Secretary Committee which oversees the Risk Risk compliance policies and procedures and aims to foster a culture of Signifi cant customer payment default We are prosecuted as a result of an or impounding of assets employee or person acting on our integrity and honesty in all of our behalf having made a payment business dealings Primary KPI impacted which is, or is perceived to be, a bribe → Ethics Policy in place with which → Earnings per share Primary KPI impacted employees, agents and sales → Operating profi t margin consultants are required to comply → Customer loyalty → Return on capital employed → Training of employees and third-party → Employee satisfaction sales consultants on anti-bribery and Background and impact → Revenue growth corruption policies and procedures The Group has some large contracts in emerging market countries → Background and impact Due diligence undertaken on sales where payment processes can be The scale and global nature of our consultants and agents. Once unpredictable, where liquidity has been business exposes us to risks of appointed we regularly monitor their adversely affected by a fall in commodity unethical behaviour. performance, audit payments and prices or our customers have competing refresh due diligence at least every demands on limited budgets. This risk is particularly relevant owing to two years the following factors: There is a risk that we do not obtain → Head of Compliance and Internal payment for a large project (or → We operate in several countries with Audit monitor compliance with perceived high levels of corruption combination of projects) and/or that a policy requirements in this area material value of assets are confi scated. → We participate in tenders for high → An independent whistle-blowing We take a rigorous approach to credit value contracts involving public system is in place which allows procurement risk management and to date have not employees to report concerns suffered a signifi cant loss. → Our business model involves the use confi dentially and anonymously. All of third-party sales consultants/agents reports received are fully investigated A customer’s non-payment would result in an increased bad debt provision or in some countries where we do not → All high risk suppliers are now required have a permanent presence write-off of the debt. Should our assets to acknowledge and comply with our be seized, we would also lose future We are aware of the potential supplier code of conduct revenue and profi t associated with that reputational and fi nancial impact of Changes during 2018 equipment while having to write off its such behaviour and we have in place During 2018, we have further improved residual value. a robust compliance programme to our compliance framework. We mitigate our exposure to this risk. Prevention and mitigation have implemented more stringent → Regular monitoring of the risk profi le Prevention and mitigation requirements of our higher risk suppliers and debtor position for large contracts and have refi ned our risk assessment → Anti-bribery and corruption process. We will continue to identify → Mitigation techniques will vary from framework designed in line with further opportunities for improvement. customer to customer, but include UK government guidance and obtaining advance payments, letters implemented across the Group Read more about our Ethics Policy of credit, and in some cases insurance and anti-bribery and corruption against losses framework on page 37 → Active customer relationship management, including escalation to senior management → The scale of our business and diversity of our customer portfolio make it less likely that any unprovided bad debt or equipment seizure would be material to the Group’s balance sheet Changes during 2018 While we have not suffered a signifi cant loss in 2018, we continue to closely monitor overdue debt in Power Solutions Utility. We continue to believe that the primary reason for delay in payments is liquidity and access to foreign currency, rather than customer disputes.

Read more about Power Solutions performance on page 25

44 Aggreko plc Annual Report and Accounts 2018 Strategic report

Brexit The depreciation of Sterling after the UK → We currently benefi t from reduced With the above as background, the

voted to leave the EU in June 2016 was withholding taxes on dividends Board Shareholder information approached the viability Governance the most signifi cant impact of the vote between EU companies under the assessment as follows: on the Group. In that year it increased EU Parent/Subsidiary directive. The → It carried out the viability assessment the Sterling value of our revenue, debt Directive would not apply after the over a three-year period to 2021. and borrowing facilities, the majority of UK’s exit from the EU and we would Although the Board considers which are denominated in US Dollars. fall back to the provisions of the UK’s prospects of the Group over a double tax treaties with EU member At this point, we do not know whether longer period, three years was states, although it is anticipated that the UK will leave the EU with deemed appropriate for the these treaties will all need to be a deal, without a deal or whether the viability assessment because: renegotiated. decision to leave will be revoked. We – The Group’s funding requirement have completed an impact analysis to try The Group earns approximately 6% of

can be forecast with suffi cient Financial statements to identify the aspects of our business its revenue from the UK and 10% from accuracy over this period that might be affected most by the EU markets. Demand for our services UK’s withdrawal from the EU. We do in these markets is, in part, GDP- – The Board expects to be able to not expect the impact on the Group’s dependent. A signifi cant change in the arrange suffi cient fi nance to meet business activities to be severe because GDP growth in these markets is likely to its funding requirement over a the large majority of them take place have a knock-on effect on our level of three-year period outside the UK and the EU. However, activity there. – Power Solutions Utility’s historical we have taken some actions and About 60 of our employees are likely to off-hire rate of 30% suggests an developed contingency plans to reduce be affected by Brexit. We will encourage average contract life of three years. the potential impact on the Group of the eligible employees to take advantage of Rental Solutions and Power UK leaving the EU without a deal at the the UK’s EU Settlement Scheme and the Solutions Industrial have shorter end of March 2019. anticipated reciprocal arrangements for average hire periods than Power Delays in our supply chain and in the UK nationals working in the EU. We will Solutions Utility export of fi nished products, changes to provide support to these employees → It stress-tested the Group’s strategic customs duties on the movement of as required. plan to 2021 by modelling scenarios equipment, changes to tax legislation We will continue to monitor the situation linked to each principal risk and the associated system changes have closely and refi ne our contingency plans the potential to affect our business the → It stress-tested the Group’s strategic as the situation develops. most, on top of the impact of changes plan to 2021 by modelling scenarios in the value of Sterling and GDP growth of combinations of principal risks, in our UK and EU markets. Assessment of prospects for example: → We expect that any delays in the and viability – We considered a scenario in which supply of products or services that The prospects for our Rental Solutions all risks occurred according to their we need for our business in the UK business are linked to growth in local expected frequencies during the or delays to freight out of the UK will economies and commodity cycles. viability period be manageable through production Our Power Solutions Industrial business – We considered a combination of all scheduling or by using alternative is driven by growth in developing risks crystallising at the same time material suppliers. We do not expect markets, which can be commodity delays to disrupt our ability to supply dependent, while Power Solutions Utility The results of this stress-testing showed our customers after withdrawal. is driven by shortfalls in permanent that the Group has suffi cient scale, diversity and balance sheet strength → We expect that there will be an impact capacity caused by economic growth, to withstand the impact of these on the import of materials for use in ageing power infrastructure, hydro- scenarios by making adjustments to our Manufacturing & Technology shortages and social pressures. its operating plans within the normal centre in Dumbarton and on the The Executive Committee and the course of business. export of fi nished products from Board regularly discuss factors that Dumbarton. The overall impact is might affect Aggreko’s prospects. Based on the results of this analysis, the likely to be negative but will not The 13 principal risks, which the Board Directors have a reasonable expectation materially affect our ability to serve concluded could affect business that the Group will be able to continue our customers. There is a possibility performance, are set out on the in operation and meet its liabilities as that new agreements between the previous pages. they fall due over the three-year period UK and non-EU countries could bring of their detailed assessment. some benefi t in due course. → The impact on customs duties will depend on the arrangements for withdrawal and any new trade agreements that the UK enters into, but the increase in our customs duties would not be material on its own should we revert to World Trade Organisation terms.

Aggreko plc Annual Report and Accounts 2018 45 INTRODUCTION TO GOVERNANCE Compliance with the UK Corporate Governance Code

Corporate governance developments The Financial Reporting Council published a revised UK Corporate Governance Code in July 2018 (“the 2018 Code”). The 2018 Code calls for companies to establish a corporate culture that is aligned with the company purpose and business strategy, promotes integrity and values diversity. In particular, the new 2018 Code: → Requires greater board engagement with the workforce to understand their views. → Emphasises that remuneration committees should take into account workforce remuneration and related policies when setting director remuneration. → Strengthens the role of the nomination committee on The governance framework put in succession planning and place by the Board to support the establishing a diverse board. delivery of our strategic priorities The 2018 Code sets out a number of Principles, and “comply or explain” continues to deliver results. Provisions and is supported by the Guidance on Board Effectiveness. The Ken Hanna 2018 Code will apply to Aggreko for the Chairman fi nancial year beginning 1 January 2019. Much of what Aggreko does already refl ects the best practice embodied in the 2018 Code. However, we have carefully reviewed the 2018 Code and The Board remains committed to the supporting guidance and agreed a principles of good corporate governance number of measures to refl ect the 2018 contained in the UK Corporate Governance Code. These new measures include: → The Ethics Committee will have Code (April 2016) (the “Code”), which formal responsibility for engagement is published by the Financial Reporting with the workforce, supported by Council and available on its website management, with a core team led by the Group HR Director and at www.frc.org.uk. members of the HR Team. To refl ect its broader remit, we have renamed The Company continues to follow the good the committee the “Ethics & Corporate practice which the Code recommends and Responsibility Committee”. Nicola Brewer will Chair the new Committee. the Board considers that the Company has → The Ethics & Corporate Responsibility applied the principles and complied with Committee will also assume the provisions set out therein throughout responsibility for our Speaking Up whistle-blowing process, including 2018, as detailed in this Statement and the oversight of its effectiveness, from associated Reports. The Board believes that the Audit Committee. the Annual Report and Accounts 2018 are, → We will ensure that the Remuneration Committee has clearer visibility of when taken as a whole, fair, balanced and workforce remuneration and related understandable, providing shareholders policies when setting policies for Executive Director remuneration, with the requisite information to assess the and to enable it to advise the Board Company’s performance, business model whether Company policies and and strategy. practices support culture and strategy. → We will ensure that the Nomination Committee has further visibility of the succession pipeline one level below the Executive Committee and will delegate formal monitoring of our diversity policy to the Committee.

46 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information 47 page 34 page page 62 page page 54page page 48page Read more about our on Remuneration Read more about our Effectiveness 51 on page Read more about our Shareholders and Stakeholder Relations on Read more about our on Leadership Read more about our on Accountability Effectiveness evaluates continuously The Board experience, of skills, the balance of and independence knowledge that all new It ensures the Directors. induction a tailored receive Directors scrutinises and the Board programme an annual through its performance review. effectiveness Relations with shareholders relationships Maintaining strong both private with our shareholders, and institutional, is crucial to hold events our aims. We achieving maintain to the year throughout an open dialogue with our investors. Remuneration and transparent a formal Having on policy developing for procedure Directors Executive for remuneration policy is crucial. Our remuneration and motivate retain attract, aims to performance. to reward linking by Leadership strategy, challenges The Board and responsibility performance, that ensure to accountability is of the make decision we every highest quality. Accountability discussed All of our decisions are of the risks within the context management risk Effective involved. our strategic achieving to is central objectives. Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko nancial will dent they and has settled professional nance Ken Hanna Ken Chairman Annual General MeetingAnnual General Meeting will be held Our Annual General 2019 at 25 April on Thursday at 11.00am Glasgow, Street, 200 SVS, 200 St Vincent of Annual General The Notice G2 5RQ. with the explanatory Meeting, together, be proposed, to of the resolutions notes 146 of this to is set out on pages 141 document. 2019 Looking to ahead on ensuring will be focusing The Board and the 2018 Code with compliance the ensuring to committed remains of corporate highest standards in all the Group across governance aspects of the delivery of our strategic of at the core Our people are priorities. this business. I am confi in implement our values to continue our goals and that, by achieve to order culture Orange on our Always focusing on those will deliver we values, and core thank to like I would Finally, priorities. their dedication and for our employees support 2018. during Board oversight and oversight Board monitoring has played Committee The Audit was that there ensuring in role a key and governance challenge appropriate of treatment the accounting around the year during the decisions taken management, risk robust and ensuring in place. were and assurance controls improvements in the business. His full in the business. His full improvements page 48. is set out on biography from retired Russell King at the Board nine Russell dedicated our 2018 AGM. time this during and Aggreko to years as Chair of our Remuneration he served Senior Independent and Committee succeeded Jeremiah Barbara Director. Committee Russell as Remuneration appointed was Krueger Chair and Uwe Further as Senior Independent Director. detail on both of these appointments on page 55. can be found programme to support the continued to programme continued We of the business. success with the Nomination closely work to a number of make to Committee 2018. in early Board our to changes left the Cran, Carole CFO, Our previous 14 years after 2017 business in December succeeded was Carole with Aggreko. in January 2018. Drewett Heath by as of experience a wealth brings Heath a fi with a rigorous well role the CFO into further fi delivering to approach roles. ect their new engagement with cally, www.plc.aggreko.com

We have reviewed and amended the reviewed have We of the of each of Reference Terms refl to Committees

The results of the 2017 Board evaluation evaluation 2017 Board of the The results upon had acted that the Board showed year’s of the previous the results the succession in reviewing evaluation and Committee the Executive plans for reports and further its direct recruiting high calibre a number of potential have to continued managers. In 2018, we the business ensure of this to oversight has an ongoing talent management Talent, development and development Talent, succession The Board believes that diversity, both diversity, that believes The Board the throughout and in the boardroom I am our success. to is key organisation, Board of our report that 33% to pleased women. be held by to continue roles a formalised adopted The Board adopting by diversity board to approach in December policy diversity a board about on more can read you which 2017, acknowledge however, do, page 55 . We the ensure do to to is more that there the across of diversity development and inclusion, Diversity organisation. gap in particular, are and the gender pay acknowledge as we of focus areas now the address to the need, and desire, support management in We imbalance. establishing this by address its efforts to on will look at diversity which a team what basis, determine a Group-wide with be made and work need to changes them over implement the business to Our full gender pay years. few the next the actions we including gap disclosure, in is published on our website taking, are guidelines. line with the UK government See Diversity → In this way, we believe that we will be that we believe we In this way, or meet the “comply in a position to of the 2018 Code Provisions explain” from 1 January report and will on 2019, 2019 in our operated have they how Annual Report and Accounts. in development A corresponding is contained reporting regulation (Miscellaneous in The Companies Reporting) Regulations 2018. will They statements include to Aggreko require in our Annual Report to relating duties and, statutory Directors’ specifi and other stakeholders. employees will reporting requirements These new our 2019 Annual Report,apply to and this Annual apply to so do not strictly already Aggreko Report. However, with stakeholders, engages extensively our approach described have as we Annual Reports, and we in previous a summary included of our have and engagement with employees 2018 on during other stakeholders page 34 of this Annual Report. LEADERSHIP Our Board

Ken Hanna Chris Weston Heath Drewett Chairman Chief Executive Offi cer Chief Financial Offi cer Appointed: Non-executive Director in Appointed: January 2015. Appointed: January 2018. October 2010 and Chairman in April 2012. Experience: Chris has experience at a senior Experience: Heath is an experienced CFO Experience: Ken brings international level in the energy industry, proven leadership and proven leader with experience in the fi nancial and leadership expertise to Aggreko. skills in a large international business and engineering, leisure, transportation and He possesses knowledge of many different has consistently succeeded in driving industrial sectors. He has 30 years of business sectors and is an experienced performance and growth in his career. experience within various fi nance, corporate senior executive and leader, promoting Prior to his appointment as CEO in January fi nance, business performance, fi nancial and robust debate and a culture of openness strategic planning roles. He has extensive in the boardroom. 2015, Chris was Managing Director, International Downstream at Centrica plc, international experience in both M&A and Ken is also currently Chairman of Arena where he was the Executive Director corporate development activities. Events Group Plc, an AIM-listed company, and responsible for the Group’s largest division. Prior to his appointment at Aggreko, Heath Chairman of Shooting Star CHASE Charity. In this role, Chris was operationally responsible was Group Finance Director for eight years Until 2009, Ken spent fi ve years as Chief for both British Gas in the UK and Direct at WS Atkins plc where, following the Financial Offi cer of Cadbury Plc. He has also Energy in the USA. He joined Centrica in acquisition of WS Atkins by SNC Lavalin, he held positions as Chairman of Inchcape Plc, 2001 after a successful career in the telecoms was appointed President, with responsibility Operating Partner for Compass Partners, industry, working for both Cable & Wireless for its global engineering, design, project Group Chief Executive at Dalgety Plc, Group and One.Tel. Before that, Chris served in and programme management business. Finance Director of United Distillers Plc and the Royal Artillery. He has a BSc in Applied Before that, Heath worked at British Group Finance Director of Avis Europe Plc. Science, as well as an MBA and PhD from Airways plc within corporate strategy, He is also a fellow of the Institute of Imperial College London. Chris was also business planning and fi nance. Heath is Chartered Accountants. appointed as a Non-executive Director of a chartered accountant, having trained at the Royal Navy in January 2017. PwC, with an MA in Mathematics from Cambridge University.

Dame Nicola Brewer Barbara Jeremiah Uwe Krueger Non-executive Director Non-executive Director Senior Independent Director Appointed: Non-executive Director in Appointed: Non-executive Director in Appointed: Non-executive Director in February 2016 and Chair of the Ethics & March 2017 and Chair of the Remuneration February 2015 and Senior Independent Corporate Responsibility Committee in Committee in April 2018. Director in April 2018. January 2019. Experience: Barbara brings extensive Experience: Uwe brings expertise of the Experience: Nicola Brewer brings extensive international non-executive experience, engineering, services and renewable energy geo-political and diplomatic experience to largely in the USA and Australia, together sectors. He is a physicist with a PhD and an Aggreko, having worked in many of the with an executive career in the mining, honorary professorship from the University developing regions in which we operate. exploration and energy industries. of Frankfurt and an honorary PhD from Heriot-Watt University. Most of his career Nicola is currently Vice Provost at University An experienced Non-executive Director, has been spent leading engineering and College London, responsible for international Barbara currently sits on the boards of the consulting organisations. strategy. She is also a Non-executive Director Weir Group, Russel Metals and Allegheny of Scottish Power and a trustee of Prince Technologies having recently retired as Uwe is currently Senior Managing Director, Harry’s southern African charity, Sentebale. Chairwoman of Boart Longyear, a US-based Head of Industrials/Business Services/Energy In her previous diplomatic career, she worked company in the minerals drilling sector. Until & Resources and Joint Head of Portfolio in Mexico, India and France, was a member her retirement in 2009, Barbara spent over Management Group for Temasek. He also sits of the Foreign and Commonwealth Offi ce 30 years in a number of roles in Alcoa Inc. on the boards of SUSI Partners AG and Ontex Board from 2004 to 2007, and was High (now demerged into Alcoa and Arconic Inc.), S.A. and lectures at the University of Frankfurt Commissioner to South Africa, Lesotho and the world leader in the production of on renewable energy. Before joining Temasek, Swaziland from 2009 to 2013. As a member of aluminium and related products. Her roles Uwe was Chief Executive Offi cer of WS Atkins the board of the Department for International in Alcoa included Assistant General Counsel, plc and his past roles include Chief Executive Development, she supervised all UK bilateral VP Corporate Development and Executive VP Offi cer of Oerlikon, Senior Advisor at Texas aid programmes in Africa, Asia, Eastern in charge of strategy and M&A. Barbara is an Pacifi c Group, President of Cleantech Europe, the Middle East and Latin America. American citizen with a BA in political science Switzerland, and various senior leadership and is a qualifi ed lawyer. positions at Hochtief AG.

48 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information 49 . % attended AB 2 2 100 Board Board meetings 1 Peter is our Group October 2008. eld 6 6 100 Audit Remuneration Nomination Responsibility & Corporate Ethics Committee Chair Maximum number of meetings Director could could Maximum number of meetings Director attended. have attended. Actual number of meetings Director 2018.April Peter Kennerley Peter Secretary Company (Until April(Until 2018) in 2018 attendance Board Name of Director HannaKen WestonChris DrewettHeath 6 BrewerNicola 6 6 Barbara 6 6Jeremiah 6 6Russell King 6 100 100 100 6 100 6A 100 B 1 from retired Russell King in the Board Key to committee committee to Key membership Appointed: Experience: Legal Director & Company Secretary. Further details appear 50 on page who Other Directors served during 2018 Russell King and Director Non-executive Senior Independent Director Uwe KruegerUwe Diana Layfi Ian Marchant 6Miles Roberts 6 6 6 6 100 6 100 100 Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko % 11 22 56 78 89 44 1 14 2 25 2 29 6 75 6 67 4 57 No. % No. % No. % nancial and regulatory Ian brings knowledge of the Non-executive Director in

calculation excludes the Chairman when the Chairman calculation excludes at the Independent Non-executive looking of the Board. composition B.1.2, this provision Code by As required Technology Geo-politics/diplomacy Operational Finance Energy Non-executive* 0-3 years 6-9 years of the Board experience Sector Customer Diversity metrics Diversity Executive/Independent composition Non-executive of Board Executive * Gender of Board Male Female Directors of Non-executive Tenure 3-6 years 3 33 issues. his Until in June retirement 2013, Ian spent 21 years at SSE Plc, most recently as Chief Executive, andprior that as to Finance Director. Ian is an experienced Non-executive Director, currently serving as Chairman of John Wood Plc andGroup Chairman of Thames Water Utilities. He is also a Member of the Prince’s Council of the Duchy of Cornwall, Honorary President of RZSS, of Chairman the advisory board of the of Centre Energy Policy at Strathclyde University and former Chairman of Scotland’s 2020 Group. Climate domestic and international energy markets, along with a substantial understanding of associated strategic, fi Ian Marchant Ian Marchant Director Non-executive Appointed: November 2013 and of Chair the Audit Committee in April 2016. Experience: cer cer cer of Finexia rm, and a consultant with nance, sales and strategy. Miles brings extensive Diana brings extensive eld March 2017. 2017. March May 2012. rm. Diana has a BA from the

Appointed: Appointed: Experience: of DS Smith Plc, a FTSE 100 international packaging with group operations in nearly 40 countries. Prior joining to DS Smith Plc in 2010, Miles was Chief Group Executive of McBride plc having previously been Group Finance Director. Prior this, to Miles worked for Costain plc Group and Vivendi UK. He also has non-executive experience, having served on the boards of Poundland plc Group as Senior Independent Director and Care UK plc as a Non-executive Director. Miles has a degree in Engineering and is also a chartered accountant. Miles Roberts Director Non-executive international business experience both as a Chief Executive and Finance Director. Miles is currently Chief Executive Offi Appointed: Appointed: Experience: Diana is Vice President, Next Billion Users at Google Inc, developing products and services for users in emerging markets, and in Fintech. Before joining Google, she was Chief Executive, Africa Region for Standard Chartered Plc and held a number of senior leadership roles over 11 years at Standard Chartered. Prior Standard to Chartered, Diana was Chief Executive Offi Ltd, a technology fi McKinsey & Co, an international strategy fi consulting University of Oxford and a Master’s degree in International Economics and Public Administration from Harvard University. Diana Layfi Director Non-executive international experience and detailed understanding of how operate to successfully across emerging markets, particularly in Asia and Africa. She also brings experience in technology, fi LEADERSHIP CONTINUED Our Executive Committee

The Executive Committee meets every month and operates under the direction and authority of the Chief Executive Offi cer; it is responsible for supporting him in all aspects of his role. Each of the principal risks and uncertainties outlined in the Strategic Report has been individually assigned to a member of the Executive Committee. At least twice a year, the Executive Committee members meet as the Group Risk Committee to review the Group’s risks; this helps to embed our risk management processes within our management teams.

4 1 5 8

7 6 3

2

1. Chris Weston 4. Bruce Pool 7. Grant Nairn Chief Executive Offi cer President, Rental Solutions Group Chief Information Offi cer Appointed: January 2015. Appointed: December 2015. Appointed: May 2017. Tenure with Aggreko: 4 years. Tenure with Aggreko: 20 years. Tenure with Aggreko: 5 years. Full biography appears Bruce has responsibility for the leadership Grant has responsibility for developing and on page 48 of the Rental Solutions business, overseeing implementing Aggreko’s digital platform with the delivery of our strategic priorities within the goal of improving customer service and Rental Solutions. effi ciency. He is also responsible for building 2. Heath Drewett our advanced analytics capability and for Chief Financial Offi cer cyber security. 5. Dan Ibbetson Appointed: January 2018. Managing Director, Global Products Tenure with Aggreko: 1 year. & Technology 8. Peter Kennerley Group Legal Director & Full biography appears Appointed: October 2016. on page 48 Company Secretary Tenure with Aggreko: 11 years. Appointed: October 2008. Dan has responsibility for the leadership of Tenure with Aggreko: 10 years. 3. Stephen Beynon our Global Products & Technology division. Managing Director, Power Solutions This includes ensuring we have the right Peter has overall responsibility for the portfolio of products to deliver solutions to our management of legal and ethical Appointed: May 2017. customers, engineering and manufacturing risk and for supporting the Board in Tenure with Aggreko: 1 year. excellence, future technology and having setting and maintaining standards responsibility for our global events business. of corporate governance. Stephen has responsibility for the leadership of the Power Solutions business and overseeing the delivery of our strategic 6. Anna Filipopoulos priorities within Power Solutions. Group Human Resources Director Appointed: April 2016. Tenure with Aggreko: 3 years. Anna has responsibility for human resources and internal communications, focusing on talent and leadership development, employee engagement and culture.

50 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information 51 nancial Group Risk Group Committee nal form form nal Committee report page 62 page Remuneration Committee Executive Executive Committee Committee report page 60page Committee report 60 page CEO Ethics & Ethics Corporate Responsibility Committee Ethics & Corporate Responsibility Responsibility & Corporate Ethics Committee with, and oversees compliance Monitors of our ethical policies the effectiveness that Aggreko ensure to and procedures and its business with integrity conducts law. with the in accordance and honesty engagement workforce Responsible for from January 2019. Committee Disclosure with Market compliance Oversees Abuse Regulation and supports the the fi in approving Board or statement announcement of any of the the performance to relating price other potentially or any Group, information. sensitive Committee Finance fi approving Responsible for Committees Non-Board Committee Executive and under the direction Operates of the CEO and is responsible authority supportingfor the CEO in all aspects of his role. Risk Committee Group the implementation Responsible for framework,of our risk and processes the reporting. Reports risk into for Committee. Executive facilities, bonds and guarantees. facilities, Allotment Committee the allotment of shares. Responsible for Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko Board Allotment Committee Non-Board Committee report page 56page Board Audit Committee Finance Finance Committee nancial performance performance nancial ect our risk appetite. It provides It provides appetite. ect our risk Committee report page 54page Committee report 62 page Committee report 54 page Committee report 56 page Disclosure Disclosure Committee the relationship nancial statements, Nomination Committee Audit Committee Audit of Aggreko’s the integrity Ensures fi auditor internal auditor, with the external for of our systems oversight and provides management. and risk control internal Committee Remuneration the for the remuneration Determines and the Directors Executive Chairman, members and Committee Executive remuneration overall Aggreko’s oversees and implementation. strategy policy, The Board is responsible for the the for is responsible The Board of the Group. success long-term its and oversees It sets our strategy decisions implementation, ensuring made refl and has and direction leadership governance corporate for responsibility fi and the overall is supported The Board of the Group. Committees, its principal by in this role in the and depicted outlined below table above. Committees Board Nomination Committee composition the and reviews Monitors and its of the Board and balance has Aggreko ensure to Committees experience and skills structure, the right management the effective for in place of the Group. Role of the Board and Role of the Board Committees Board and Committee structure and Committee Board Key to Committees: to Key cer, nancial risks risks nancial cer cer cer cer to and is available cer Terms of Reference Terms decisions, of key control retain To of matters has a schedule the Board with other the Board for reserved and authorities responsibilities matters, its Committees. to delegated reserved of matters our schedule Read www.plc.aggreko.com the Board: for Independence of Directors the independence reviews The Board as part Directors of its Non-executive review. effectiveness of its annual Board ensuring to is committed The Chairman of a majority comprises the Board Directors independent Non-executive management, challenge who objectively continuity against the need for balanced that considers The Board on the Board. bring Directors all of the Non-executive and independent oversight strong independence. demonstrate to continue Chairman its Board, the leading Responsible for Setting and governance. effectiveness of the full account take the agenda to of the Directors issues and concerns between the links and ensuring and management Board shareholders, strong. are Offi Chief Executive the day-to-day Responsible for management and leadership, for HSE activities of the Group, strategy Group recommending that the and ensuring the Board to the Board and decisions of strategy via the Executive implemented are Committee. Offi Chief Financial general and providing of the Group Offi Chief Executive the support to How we divide up our we How responsibilities Responsible for the day-to-day the day-to-day Responsible for management of the fi performance the operational including the Group of the business and chairing Risk Committee. Senior Independent Director the for a sounding board Provides for acts as an intermediary Chairman, when necessary and the other Directors meet with shareholders. to is available Directors Independent Non-executive the Executive challenge Constructively of the delivery and monitor Directors and within the risk strategy Group the Board. set by environment control Secretary Company Supports and Chief the Chairman Offi Executive LEADERSHIP AND EFFECTIVENESS LEADERSHIP and support. advice for all Directors and Committees the Board Informs and is matters on governance the development for responsible policies. governance of corporate LEADERSHIP AND EFFECTIVENESS CONTINUED

Board meetings in 2018 In 2018, the Board held six scheduled Key priorities in 2018 were: meetings. At each scheduled meeting → Track progress against the actions agreed the Board received reports from: on following the strategy review discussions in Q4 2017 and ensure good governance → The CEO on strategic, operational and around this. business developments, people and health and safety. This report is a particularly → Ensure a thorough induction programme to important tool, focusing on the key issues Aggreko for Heath Drewett, so that he is able affecting the business, so that the Board to perform effectively in his new role as CFO. really understands the current status. → Continue to closely monitor the integration → The CFO on the performance of the of Younicos into Aggreko. business, capital structure, fl eet, budget, → Plan a Board visit to Germany to learn treasury and investor relations. more about the recently acquired business → The Chair of each of the Board and engage with local employees. Jan Feb Mar Apr Committees on matters discussed → Carry out an externally facilitated at their respective meetings. Board evaluation. → Monitor the work of the team established May Jun Jul Aug to look at diversity on a Group-wide basis. → Continue to monitor developments in corporate governance reform, amending our processes and procedures Sep Oct Nov Dec where necessary.

In addition to the regular items, the key areas of focus were: Topic Activity/Discussion Actions arising/Progress Strategy Monitor progress → Approved the refi nancing of the Group’s committed bank facilities maturing against our strategic in 2018 and 2019. priorities of technology → Received an update presentation on Manufacturing & Technology, including investment, customer a refocus on growth areas, such as temperature control, renewables, hybrids, focus, capital effi ciency energy storage and software, and progress in driving effi ciency in HFO, gas, and expert people large diesel, and emissions compliance. → Reviewed and agreed the Group’s Five-Year Plan. → Instigated a strategic review of growth potential for Aggreko, focusing on two issues: whether the existing business and strategy deliver enough sustained, profi table growth to meet our aspirations; and what new growth opportunities are available to Aggreko. → Reviewed proposals for a potential supply chain fi nance framework. → Received a half year update on working capital and agreed improvement measures. → Approved the Group budget for 2019. → Reviewed the management of Aggreko’s Power Solutions project sales pipeline. Monitor opportunities → Reviewed proposals for investment in Origami Energy Limited, a business for acquisitions developing a software platform that optimises the revenue earning capability of grid connected assets. Read more about our Business Priorities page 10 Governance, Regulatory environment → Reviewed our best practice against the 2018 UK Corporate Governance Code risk and internal governance and agreed actions for 2019. management processes and internal Board evaluation → Assessed the outcome of the 2018 externally facilitated Board evaluation control and approved the action plan for 2019. Half year and annual → Received regular reports from the Group Risk Committee. review of Group risk → Reviewed the Group Risk Register, risk appetite and effectiveness of the risk profi le management process to ensure we have a robust risk management framework which delivers an effective and effi cient approach to risk management and positively contributes to effective decision making. → Approved the Group Risk Register. → Approved updates to the risk management methodology. Read more about our Risks page 38

52 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information 53 le Continue to monitor corporate corporate monitor to Continue amending our reform, governance particularly and procedure processes in line with the 2018 UK Corporate Code. Governance more learn Dubai to visit to Plan a Board business about the Asia & Middle East and and engage with local employees rescheduled (this was other stakeholders from visit to the Board 2018 due to the acquistion following Germany Berlin, of Younicos). Track progress against the actions progress Track the strategy/ upon following agreed 2018 and discussions in Q2 review good governance. ensure

of the Board. Agree approach to strategy strategy to approach Agree 2019. discussions for the competitor review to Continue and supplier landscape in strategy discussions. of Nomination scope Expand executive cover to Committee talent management and succession, the by pipeline as envisaged diversity Code. Governance 2018 UK Corporate to composition Board Review profi the international enhance the amount of contact Increase members and the Board between the below one level senior team, Committee. Executive discussions take succession Ensure at the main Board, a year twice place scope in tandem with the expanded of the Nomination Committee: followed in December annual review update. mid-year by of Non-executive visibility Increase in the organisation. Directors

Key Board priorities for 2019 priorities for Board Key → → → → → → → → → → Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko page 34 page ected feedback feedback ected The Chairman then prepared a list then prepared The Chairman and actions for of recommendations at its meeting the Board discussion by 2019. in February Completed induction programme for Heath Drewett. Heath for induction programme Completed contact. reports on all shareholder relations investor regular Received Discussed succession and talent development for CEO and CEO-1. for development and talent Discussed succession planning on succession work Committee on the Executive an update Received and CEO-3. at CEO-2 roles for Team. Leadership the Senior for talent movements Reviewed at look to group a working and established policy diversity Board Approved gaps. close and identify actions the Group to across and inclusion diversity of the refreshed updates the launch regular including Monitored culture, scores. engagement on employee offer. sharesave the all employee Approved biannual report, received in the CEO’s HSE updates regular In addition to 2018. for priorities HSE on HSE and approved updates acquired about the recently more learn in 2018 to Germany visit to Board and employees. the Board between interaction business and promote in April. event Team Senior Leadership at attendance Chairman

→ that the Board is functioning well. The is functioning well. that the Board with high is collegiate, boardroom a good to thanks of candour, levels and skills seniority, mix of experience, to contribute which types, personality members engaged discussions. Board incisive are report that contributions and that management and constructive has moved The Board is transparent. ciently and, on its agenda effi through is that it has been the whole, the view and engaged on active appropriately the last year. over topics the right members’ sense of their Board and shareholders to accountability and interface relationship the Board’s with other with them, relationships and governance stakeholders, risk focus, Board compliance, composition management, Board came out very and decision making did Equally feedback. in Board well members, Board induction of new resources. meetings and Board Board some was there where The areas included: improvement for desire in involvement Director Non-executive planning; parts of succession strategy; Board new for the selection process Directors members; and Non-executive time visiting locations spending more of their knowledge and improving the Group. a number Against this background, made were of recommendations to has resolved and the Board actions for the following prioritise year: the forthcoming Outcome, recommendations and recommendations Outcome, actionsproposed the report refl Overall, → → → → → → → → → → → Actions arising/Progress ngs and ngs Strong engagement Strong with stakeholders and investors Employee engagement engagement Employee and culture Safety Ongoing training, development and stakeholder engagement for members Board Succession planning Succession Activity/Discussion Lisa rst gave Read more about our Stakeholder and Shareholder Engagement Programme Lisa completed a report, she which Lisa completed with the Chairman, discussed in draft the to she then presented and which discussion at its meeting for Board in December. the Senior Independent Separately, a summary of received Director the on the Chairman; feedback on feedback received Chairman members and individual Board were Committee reports on each and discussed with the Chairman Chair. Committee each support materials. support materials. and the July Board Lisa attended meetings as Committee Audit an observer. member, Board each Lisa interviewed with members of senior together management and our audit partner from KPMG. The Chairman and the Company and the Company The Chairman Secretary fi briefi comprehensive

Shareholders → → → → → In line with the UK Corporate In line with the UK Corporate a undertake we Code, Governance annual evaluation and rigorous formal and that of our performance of our own and individual Directors. Committees of cycle a three-year operate We Secretary’s Company review, Chairman’s review. facilitated and externally review facilitated externally last Aggreko’s in 2015, and for place took evaluation Lisa Thomas at appointed 2018 we to Evaluation Independent Board our evaluation. facilitate Process the 2018 for In outline, the process as follows: was evaluation This year’s Board evaluation evaluation Board This year’s excercise Topic culturePeople, and values ACCOUNTABILITY Nomination Committee report

Introduction by Ken Hanna, Nomination Committee Chair Monitoring and reviewing the composition and balance of the Board and its Committees is key to the role of the Committee. By doing so we ensure that Aggreko has the right structure, skills and diversity for the effective management of the Group. The Nomination Committee is currently made up of all of the Non-executive Directors, each of whom is independent, in addition to myself as Chair. I have been Chair of the Committee since my appointment as Chairman of Aggreko in April 2012, although I would not chair the Committee when it is dealing with succession to the chairmanship of Aggreko. In 2018, we had two formal meetings to which we also invited The Nomination Committee’s role is to monitor the CEO. and review the composition and balance of the Board and its Committees to ensure Aggreko Role of the Nomination has the right structure, skills and diversity for Committee → Review the structure, size and the effective management of the Group. composition (including skills, knowledge, experience, diversity Ken Hanna and balance of Executive and Non- Nomination Committee Chair executive Directors) of the Board Meetings attended/No. of and its Committees and make Members in 2018 Position meetings eligible to attend recommendations to the Board. Ken Hanna Committee Chair 2/2 → Identify and nominate, for the Nicola Brewer Non-executive Director 2/2 approval of the Board, candidates to fi ll Board vacancies. Barbara Jeremiah Non-executive Director 2/2 → Russell King1 Former Senior Independent Keep under review the time Director 1/1 commitment expected from the Chairman and the Non-executive 2 Uwe Krueger Senior Independent Director 2/2 Directors. Diana Layfi eld Non-executive Director 2/2 Ian Marchant Non-executive Director 2/2 Main activities of the Miles Roberts Non-executive Director 2/2 Nomination Committee during the year 1 Russell King retired from the Board after the AGM in April 2018. Appointment of a new Chief 2 Uwe Kreuger was appointed Senior Independent Director following the AGM in April 2018. Financial Offi cer We reported last year that Heath Drewett had joined Aggreko as CFO Areas of activity in 2018 Areas of focus for 2019 in January 2018 and as such he stood → Oversaw the induction of Heath → Continued focus on succession for election at the 2018 AGM. Heath has Drewett as CFO. planning. successfully completed his fi rst year at Aggreko. In this time he has made → Reviewed succession plans. → Monitor the work of the team a great effort to get familiar with the established to look at diversity → Monitored the work of the team businesses around the Group and make across the Group. established to look at diversity across his presence known to our employees, the Group. shareholders and the wider stakeholders. → Approved the terms of reappointment Heath is an experienced CFO and of three Directors. proven leader with experience in the engineering, leisure, transportation → Recommended the appointment and industrial sectors. He has 30 years of two new Committee chairs. of experience within various fi nance, corporate fi nance, business performance, fi nancial and strategic planning roles. Heath also has extensive international experience in both M&A and corporate development activities. Heath’s biography is set out in full on page 48.

Nomination Committee terms of reference: www.plc.aggreko.com

54 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information 55 rm ect nancial and nancial to cally directed nding talented talented nding and the ts of diversity the diverse nature of the business nature the diverse Aggreko in which environment look for In particular, we operates. fi of technical, a range balance aim to expertise. We market memory with new long corporate the elds. For insights from other fi composition, of Board purposes but is not refer, to is taken diversity characteristics protected to, limited other UK legislation; by covered as business experience such factors be relevant. will also and geography but our net diversity monitor We or quotas: targets do not set formal is on fi our focus individuals from as wide a range as possible. of backgrounds a merit to is committed Aggreko composition Board for based system culture, and inclusive within a diverse perspectives solicits multiple which When assessing Board and views. or identifyingcomposition suitable appointment or for candidates will Aggreko the Board, re-election to against on merit candidates consider due regard having criteria, objective the benefi for fi search Any needs of the Board. or a assist the Board engaged to in identifying of the Board Committee the appointment to for candidates will be specifi Board of candidates range a diverse include ects this policy. that refl Board Diversity Policy Diversity Board prudent makes Board A diverse for business and sense makes governance. corporate better the inclusion promotes Diversity and ideas perspectives of different has the that Aggreko and ensures t from all benefi opportunity to talent. available maintain a Board to seeks Aggreko dynamic,comprising and expert individuals, who together innovative our and lead our values demonstrate mix a diverse through behaviours and skills experience, of expertise, that ensure aim to We backgrounds. collectively and backgrounds the skills refl on the Board represented Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko nancial ed that ed eld, as Non-executive in its effectiveness rm Nicola Brewer as Non-executive as Non-executive Brewer Nicola of three term second a for Director, 2022. 25 February to years, Diana Layfi expiring a further for year, Director, Diana had already Since 2019. on 1 May under the UK six years, served for any Code, Governance Corporate six beyond a term extend to proposal particularly should be subject to years into and should take review, rigorous progressive the need for account the refreshing However, of the Board. unanimously of the was Committee had not tenure that Diana’s view in her independence compromised important and that it was way, any and fi her market retain to of Aggreko, and knowledge experience particularly in light of the retirement 2018. in April of Russell King

→ → adequate succession planning is in succession adequate and will keep the Board for place planning under review. succession and diversity composition Board the importance acknowledges Aggreko the effective to and inclusion of diversity had we In 2017, functioning of the Board. to diversity to our approach reviewed below. extracted policy, adopt a formal assess in 2018 to reviewed was The policy and confi business. a diverse promoting that diversity also acknowledge We and the boardroom beyond extends supportsthe Board in management organisation. build a diverse its efforts to of the the work monitored In 2018, we look at diversity established to team basis, determining on a Group-wide be made and need to what changes implement with the business to working years. few the next them over reviewed have we on page 47, As noted Committees of the Board the roles in light of the 2018 UK Corporate This will include Code. Governance that the Nomination ensuring has further of the visibility Committee Executive pipeline below succession and delegating formal level Committee policy diversity of Aggreko’s monitoring the Committee. to Succession planning Succession met with the CEO and The Committee succession review to HR Director Group of these discussions plans. The focus plans for our succession review to was Committee. the CEO and Executive a also monitors The Committee of the on the length of tenure schedule Directors and Non-executive Chairman of the Directors. and the mix and skills is satisfi The Committee Krueger ed Uwe Ken Hanna, as Chairman, for a further for Hanna, as Chairman, Ken on the conclusion expiring years, three Meeting. of the 2021 Annual General

→ Senior Independent Director (SID)Senior Independent Director that recommended The Committee as SID be appointed Krueger Uwe of the previous the retirement following 2018. on 26 April Russell King, SID, 2015 February in joined the Board Uwe listed with other and his experience of Aggreko and knowledge companies the ed for qualifi is well that Uwe means the appointment, In making the role. the considered carefully Committee independence question of the continued the to It is clear Krueger. of Uwe be to that he continues Committee but the independent in character, particular thought gave Committee working whether his previous as to Heath with the CFO, relationship his independence affect could Drewett, we of judgement. Among other matters, on had served Krueger that Uwe noted some three for of Aggreko the Board of Heath the appointment before years considered that he was Drewett; independent on appointment; and that as part succession of our Board had identifi plan we as the potential successor as SID before as SID before successor as the potential Drewett. of Heath the recruitment involved not directly he was Moreover, the CFO. for in the selection process decided that the we In conclusion, colleague appointment of a former the not compromise would as CFO had Krueger that Uwe independence his time during demonstrated clearly our change us to or lead on the Board the right was Krueger that Uwe view SID. for choice changes Other Committee Jeremiah Barbara recommended We Russell as Remuneration succeed to is an Barbara Chair. Committee Director Non-executive experienced on the Remuneration and has served her appointment since Committee took Barbara In 2017, 2017. in March in the shareholder role an active on the remuneration process consultation equipped well considered and was policy this role. for the appointment also recommended We & Chair the Ethics to Brewer of Nicola Committee Responsibility Corporate from 1 January 2019. of Directors Reappointment last report, the Committee’s the Since of terms has extended Company appointment as follows: ACCOUNTABILITY CONTINUED Audit Committee report

Introduction by Ian Marchant, Audit Committee Chair Ensuring the integrity of the Group’s fi nancial statements and determining whether the judgements taken by management are appropriate are key to the workings of the Committee. This report provides an overview of the signifi cant issues we considered. This report also shares some insight into the work we have undertaken this year to assess the independence and effectiveness of the external auditor and oversee the Group’s systems for internal control and risk management. The Committee is currently made up of three Independent Non-executive Directors, including myself as Chair. I have been a member of the Committee since November 2013 and was appointed The role of the Audit Committee is to ensure the as Chair of the Committee in April 2016. integrity of the Group’s fi nancial reporting and I am a chartered accountant and, prior to my appointment as Chief Executive provide oversight of our systems for internal control of SSE (2002 to 2015), I served as Finance and risk management. Director of SSE for four years and of Southern Electric for two and a half Ian Marchant years. As a Committee, we bring an Audit Committee Chair appropriate balance of fi nancial and accounting experience, together with Meetings attended/No. of a deep understanding of Aggreko’s Members in 2018 Position meetings eligible to attend business and market sector. All the Ian Marchant Committee Chair 3/3 members of the Committee have Russell King1 Former Senior Independent recent and relevant fi nancial experience. Director 1/1 In 2018, we held three scheduled Diana Layfi eld Non-executive Director 3/3 meetings. The meetings are aligned Miles Roberts Non-executive Director 3/3 to the Group’s fi nancial reporting timetable, to allow suffi cient time for 1 Russell King retired from the Board after the AGM in April 2018. full discussion of key topics and enable early identifi cation and resolution of risks and issues. We invited the Areas of activity in 2018 Areas of focus for 2019 Chairman of the Board, the CEO and the CFO to attend our meetings in 2018, → Ensured proper application of new → Ensure proper application of new together with the Group Financial accounting standards impacting accounting standards impacting Controller, Director of Internal Audit and the Group in 2018 and 2019: IFRS 9, the Group in 2019: IFRS 16. the KPMG audit partner. 15 and 16. → Receive regular updates on the → Monitored the review of the Speaking status of the internal control Role of the Audit Committee Up whistle-blowing process and environment. improvements to associated → Monitor the integrity of the fi nancial → Monitor the closure of outstanding statements, including reviewing procedures which were planned internal audit fi ndings. for 2018. signifi cant fi nancial reporting issues → Monitor the position in relation and judgements alongside the → Close monitoring of contract to fl eet obsolescence. fi ndings of the external auditor. provisions and tax provisions throughout the year, receiving → Continue monitoring of contract → Review the effectiveness of the Group’s detailed updates in 2018 at the provisions and tax provisions systems for internal control, fi nancial July and December meetings. reporting and risk management. → Received regular updates on → Advise the Board on the effectiveness the status of the internal control of the fair, balanced and understandable environment. review of the Annual Report. → Received an update on the → Oversee the relationship with the implementation progress against external auditor, external audit the refreshed 2018 cyber security process, nature and scope of the strategy. external audit, including its appointment, effectiveness, → Monitored the closure of outstanding independence and fees. internal audit fi ndings. → Oversee the nature and scope of internal audit, ensuring coordination with the activities of the external auditor. Audit Committee terms of reference: www.plc.aggreko.com

56 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information 57 2019. 2019. c customers customers c wing items wing items ese in the le and mitigation ecting the differing We concluded that the concluded We judgement and approach and reasonable were at this time. appropriate We concluded that the concluded We and estimates judgements the Group’s to with respect were provisions contract and appropriate. reasonable the Group’s Overall, at provision contract 2018 was 31 December $83 million (2017: $82 million). Although was provision the overall year, in line with the prior refl customer, by circumstances the bad debt provision against specifi in Africa, and Yemen by increased Venezuela $6 million, while progress the year during elsewhere in the a reduction led to against other provision of $5 million. customers on our information More profi risk collect to failure for recover or to payment on assets can be found page 44. ed ect a ect c detail the ed. Historically, Historically, ed. Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko cient to cover the risks identifi the risks cover cient to cer, which included reference to to reference included which cer, been no developments have there rm ned as the gross debtor value plus accrued revenue, revenue, plus accrued value debtor ned as the gross (PSU) Solutions Utility in the Power cant debtors nancial instruments, addressing their classifi and recognition. cation, measurement their classifi nancial instruments, addressing 2019 meetings. 2018, at its July February 2018 and December cer, on either our case or other similar cases. in line with expectations, been no further developments, have As there but with the approach comfortable remains Committee the Audit further updates. regular cally requested specifi have 2018 meeting in the on this issue at the August reported KPMG 2019 meeting in the and at the February review of the half year context audit. of the year-end context updated legal opinions, at meetings in December 2018 and February legal opinions, at meetings in December updated legal opinions confi These 2019. The Committee addressed this matter by considering update papers update considering by this matter addressed The Committee Offi the Chief Financial tabled by Group’s net exposure (including the private placement notes with notes placement the private (including net exposure Group’s in million, respectively, million and $10 of $16 in Venezuela) PDVSA positions refl These net exposure of these countries. each security/guarantees and payment of bad debt provisions combination of in each value receivable and 59% of the gross 78% representing adjustment value fair with a 75% together and Yemen, Venezuela believe While we with PDVSA. notes placement against the private these net recover positioned to well relatively remain that we of the countries situation in each amounts when the current exposure of potential is a range that there also recognise stabilises, we (Net the net exposure. and below above both each, for outcomes is defi exposure and also whether it was in excess of the risks identifi of the risks in excess and also whether it was However, of bad debt write-offs. level a low has experienced the Group business Solutions Utility within our Power in countries operate do we and and volatile, unpredictable more are payments customer where ofa risk is that there mean conditions political and economic where not be indicative may bad debt history the Group’s Therefore, default. outcomes. future of potential provision of the Group’s on the appropriateness its view In forming the discussed Committee the Audit balances, against its receivables 15 most signifi PSU the total of 78%) 82% for (2017: accounted business, which account into taking 2018 (before at 31 December value debtor overdue 2018, At 31 December 81% security/guarantees). or payment provisions 15 top these to related provision PSU impairment of the 83%) (2017: above had a net exposure the Group these debtors, Among debtors. million $30-$40 between a net exposure one customer, $40 million to four million to $20-$30 between a net exposure customers, two to of the each of less than $20 million to and a net exposure customers discussed the Committee PSU debtors, these others. In addition to some includes which Venezuela, to exposure overall the Group’s business. Solutions Industrial within the Power outstanding balances and the ongoing in Venezuela political uncertainty the current Given in specifi considered the Committee in Yemen, civil war KPMG and bad debt provision.) security/guarantees payment less any and at both the July 2018 provisions on these contract also reported and year review of its half year 2019 meetings in the context February that the Executive is aware end audit. In addition, the Committee month and each exposures a report on contract receives Committee and regularly calculating for processes has assessed the Group’s provisions. risk contract monitoring The Committee addressed contract provisions by considering considering by provisions contract addressed The Committee the Chief Financial by papers, presented judgements accounting Offi (at outstanding of debtors position detailed the latest These papers cash received any including end respectively), and year the half year and post the reporting the year during against amounts invoiced of future likelihood an assessment of the end, and gave period and discussed management challenged The Committee receipts. and assessed the the period during in detail the main changes on key The discussion focused of all the provisions. adequacy continued we where in Africa, Venezuela, and customers Yemen the year. during in payments see delays to we provision, overall of the Group’s In assessing the adequacy both suffi whether it was considered nancial statements. nancial cant cant nancial reporting: nancial le with with le cant debtor debtor cant There is an ongoing dispute in relation a tax to assessment Bangladesh. in The matter is in court and is expected take to many years resolve. to have We strong legal opinion which supports our case; however, a is this that recognise we issue due judgemental the complexitiesto and uncertainties of local legislation. tax One of the most signifi risks facing the is Group that of non-payment by customers under some of the larger contracts in our Power Solutions Utility business. The Group policy is consider to each signifi individually, within its relevant context, taking accountinto a number of factors. These factors include, but not are limited to, the political conditions economic and in the relevant country, the duration and quality of our relationship with the customer, the age of the outstanding debt and the customer’s profi payment us, together with any communication relevant exchanges with the other (and customer relevant stakeholders) throughout the year.

→ → We also reviewed an initial impact assessment of IFRS 16, a new accounting standard that will apply to the Group from the Group that will apply to standard an initial impact accounting assessment of IFRS 16, 1 January a new also reviewed We use th to and our ability of tax losses in Brazil tax asset in respect of carrying a deferred the appropriateness considered We contracts. long term and secured forecasts current account into taking future, foreseeable Power in our exposure of historic particularly in respect uncertain tax matters, for of provisions level the overall also considered We Solutions business. We considered whether there was a risk of obsolescence in our fl eet due to changes in market conditions and advances in technology in technology and advances conditions in market changes due to eet in our fl of obsolescence a risk was whether there considered We no issues. were that there and concluded from the Group from applied to which standards 1 January revenue accounting impact the 2018. of new IFRS 15 applies to reviewed We fi and IFRS 9 applies to with customers contracts Further detail is provided in Note 1 to the fi 1 to in Note detail is provided Further IFRS 16 applies to leases and further detail is provided on page 100. and further detail is provided leases IFRS 16 applies to

→ → → → → Contract Contract provisions – Power Solutions Utility The primary areas of judgement considered by the Committee in relation to the to relation in the Committee by of judgementThe considered primary areas Annual Report2018 were: of Area judgement Reporting issue the judgement? address Committee did the Audit How and outcome Conclusion In addition to the primary areas of judgement outlined in the table above, the Committee also paid close attention to the follo to attention also paid close the Committee outlined in the table above, of judgement the primary areas In addition to fi its assessment of Aggreko’s during Direct and Direct tax Indirect positions- Bangladesh Following completion of the above steps, we agreed to recommend the approval of the 2018 Annual and Interim Reports to the Board. Reports to of the 2018 Annual and Interim the approval recommend to agreed we steps, of the above completion Following ACCOUNTABILITY CONTINUED Audit Committee report continued

Main activities of the Audit For the 2018 Annual Report, this KPMG carried out its work using an Committee during the year process included: overall materiality of £9 million, as stated in its report on page 87, and confi rmed → Financial reporting Review in December 2018, of a to the Committee that there were no During the course of the year, the summary paper on key messages material unadjusted misstatements. Committee met with the external and changes from 2017. We also agreed with the external auditor and management as part of the → Feedback provided by Committee auditor that it would inform us of any 2018 Annual and Interim Report approval members on a number of drafts unadjusted misstatements above process. We reviewed the draft fi nancial during January and February 2019. £0.45 million, as well as misstatements statements and considered a number below this amount that warranted of supporting papers, including: → Full draft provided to the Committee reporting for qualitative reasons. information presented by management and Board seven days prior to the Tenure on signifi cant accounting judgements February 2019 meetings to enable KPMG was appointed by shareholders to ensure all issues raised had been time for review and comment and to provide a fi nal opinion. as the Group’s Statutory Auditor in 2016 properly dealt with; key points of following a formal tender process. The disclosure and presentation to ensure → Comprehensive management and external audit contract will be put out to adequacy, clarity and completeness; statutory accounts processes, with tender at least every 10 years. The external audit reports; documentation written confi rmations provided by the Committee recommends the prepared to support the viability business unit senior management appointment of KPMG for 2019. We statement and going concern teams on the ‘health’ of the fi nancial believe the independence and statements given on pages 45 and 101 control environment. objectivity of the external auditor and and information presented by the effectiveness of the audit process are → management on the process Confi rmations provided by the safeguarded and strong. The Company underpinning the fair, balanced and business unit senior management has complied with the Statutory Audit understandable assessment and teams that the Performance Review Services Order for the fi nancial year confi rmation on page 85. text is a fair refl ection of their business under review. and performance in 2018. During the year, the Group received Effectiveness an enquiry letter from the FRC, relating → A verifi cation process, involving our The Committee met with KPMG to the 2017 Annual Report. Details of internal audit team, dealing with the on a number of occasions without the enquiry raised by the FRC and factual content of the Annual Report. management present and the the Group’s proposed response were → A key accounting judgements paper Committee Chair also maintained discussed with the Committee prior covering contract and tax provisions regular contact with the audit partner to issuing the response. The response for 2018. throughout the year. This enabled the included the commitment to make Committee to closely monitor its work, some limited modifi cations and Following its review, the Committee ensure independence was maintained enhancements to our Annual Report was of the opinion that the 2018 Annual and a successful external audit of the disclosures relating to the cash fl ow Report is representative of the year 2018 Annual Report was carried out. and presents a fair, balanced and statement, signifi cant judgements, We also used an internal questionnaire understandable overview, providing pensions, related parties and working sent to Committee members, the the necessary information for capital explanations. The FRC Business Unit Finance Directors and shareholders to assess the Group’s subsequently closed its enquiry with Group Functional Heads in December no further action. We have reviewed position, performance, business 2018; respondents were asked to rate the adoption of these modifi cations model and strategy. KPMG’s effectiveness in a number of and enhancements in the 2018 Annual areas, including quality of processes, Report. The FRC noted that its review External auditor audit team, audit scope and provides no assurance that the Report The Committee is responsible for communications. Results were collated and Accounts are correct in all material making recommendations to the Board and presented at the February 2019 respects, and that the FRC’s role is not in relation to the appointment of the meeting of the Committee for to verify the information provided, but external auditor. We also approve the discussion. Management concluded to consider compliance with reporting that both KPMG and its audit processes audit plan, terms of engagement and requirements. The FRC’s review is based are considered to be effective, and fees, and assess their effectiveness. on a review of the Annual Accounts that a good working relationship is and does not benefi t from detailed Audit plan complemented by a suffi ciently rigorous knowledge of the business. KPMG presented its audit plan at the and challenging audit approach. The July 2018 meeting and an update at Committee concurred with this view. Fair, balanced and the December 2018 meeting, setting understandable reporting Non-audit services out the scope and objectives of the Aggreko recognises its responsibility To safeguard the objectivity and audit, together with an overview of the to present a fair, balanced and independence of the external auditor planned approach, an assessment of understandable assessment in from becoming compromised, the the Group’s risks and controls, proposed all of our reporting obligations. Committee has a formal policy areas of audit focus and coverage. In This responsibility covers the Annual governing the engagement of the setting the audit plan, KPMG works with Report and extends to the Interim external auditor to provide non-audit internal audit and management at a Report and other regulatory services. Non-audit services are normally Group and business unit level to identify announcements. At the request limited to assignments that are closely risk areas for the audit to determine of the Board, the Committee has related to the annual audit or where the where audit effort should be focused. considered whether, in its opinion, work is of such a nature that a detailed understanding of the Group is necessary. the 2018 Annual Report is fair, balanced and understandable, and whether it provides the information necessary for shareholders to assess the Group’s position, performance, business model and strategy.

58 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information 59 ed cant nancial year year nancial ng on the ed from these reports and a detailed and receive nancial year fromc actions arising The Committee has completed its has completed The Committee of the Group’s the effectiveness of review including control, of internal system and management, the year risk during Annual Report of this in the date up to of the requirements with accordance Management, on Risk the Guidance Financial and related Control Internal and Business Reporting published by that no signifi rms the FRC. It confi fi the 2018 for in the review positive provide us to and allowed assist it in to the Board to assurance by required the statements making Code. Governance the UK Corporate were improvement for areas Where to in place are ed, processes identifi that the necessary action is ensure is monitored. and that progress taken incidents we level some low After strengthen management to encouraged and local procurement around controls underway. is well this work failings or weaknesses were identifi were or weaknesses failings investigations conducted in response in response conducted investigations the reports received. to Monitoring and review of the scope, of the scope, and review Monitoring of of the activity and effectiveness extent at each item audit is an agenda internal the approve We meeting. Committee the start of to annual audit plan prior each fi report from Audit Internal the Group on audit activities, audit results Director meeting. actions at each and remedial and includes The audit plan is risk-based based on an assessment themed reviews the Group by faced risks of the strategic of key coverage along with cyclical and locations. We business processes a up on followed cally also specifi audit actions where selection of areas the overall ensure outstanding to were still adequate. was environment control Up Speaking speak to all employees encourage We have We concerns. any have up if they independent hotline which an external report to all employees can be used by and anonymously concerns any are All reports received dentially. confi In December thoroughly. investigated a briefi received 2018, we the year during of reports received types of the investigations and the outcome trends reviewed We conducted. identifi specifi Internal audit Internal Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko ed. ed ed from ed nancial risk risk nancial nancial control control nancial nancial reporting nancial ed in 2018. understand to cer ndings identifi ndings ecting on the outstanding and nancial, operational c fi c and compliance nancial, operational these reviews alongside actions taken alongside actions taken these reviews these. address to Receiving a detailed presentation a detailed presentation Receiving on the management of fi on the focusing the Group, across of the fi performance 2018, during progress environment identifi further improve made to and a the year during weaknesses 2019. for strategy assurance revised of the volume an overview Receiving split of assurance and geographical the Group across activities undertaken of the effectiveness measure to fi a summary This included of controls. fi high priority Reviewing our cyber security security our cyber Reviewing with the Chief arrangements Offi Information threat the evolving global trends, on landscape, and the progress security the cyber delivering employee including programme, training. awareness

for in place were nancial controls The Group has in place an internal an internal has in place The Group the protect to environment control business from identifi risks material Management is responsible for for Management is responsible establishing and maintaining adequate fi over controls internal has responsibility and the Committee of those the effectiveness ensuring for In 2018, the Committee controls. that assurance receive to continued fi Risk Register. on the Group items regulatory areas of the business. areas regulatory the role to critical are These reviews us allow as they of the Committee, members of the meet key to and provide management team their to independent challenge in 2018 reviewed activities. Areas included: → → → Internal audit continues to play a key a key play to audit continues Internal and, the Committee in assisting role audit to internal asked we as last year, management’s over assurance provide of assessment of the effectiveness within the of controls the operation Risks. of Principal Register Group’s based upon the This assessment was the during of audits undertaken results year, by refl with audit issues and in cooperation No teams. the business unit controls impact our risk would which variances identifi were scores The Committee also maintains a The Committee into of in-depth review programme specifi nancial reporting. nancial In 2018, we worked closely with the closely worked In 2018, we regular receiving Risk Committee, Group review enabled us to reports which management the risk and challenge of framework, the effectiveness review and approve environment the control the viability the methodology for statement. The objective of our risk framework of our risk The objective is Committee Audit the Board, provide to with a useful Committee and Executive assess and capture, to management tool face. we manage the risks proactively also management process Our risk of our account take that we ensures ensure to business model and strategy appetite, alignment with our risk framework this In turn, and controls. with the fully comply enables us to Code Governance UK Corporate statement. a viability for requirement manage is designed to The process risk, and can than eliminate rather and not reasonable only provide against material assurance absolute or loss. misstatement assumes ultimate The Board the effective for responsibility the Group, across management of risk as well appetite our risk determining unit business that each as ensuring internal implements appropriate has delegated The Board controls. of risk oversight for responsibility Committee. the management to oversight provides The Committee of the the effectiveness reviewing by management, risk for systems Group’s and fi control internal Risk management control and internal Any proposal to use the external auditor auditor use the external to proposal Any prior requires non-audit work for and, depending of the CFO approval of the service and fee on the nature be also may authorisation involved, from Chair required Committee the our reviewed We or the Committee. and agreed non-audit services policy been last having relevant, that it was in 2017. updated the by monitored are Non-audit fees were we and this year Committee ed that all non-audit work satisfi in line with our policy was undertaken fromand did not detract the objectivity of the external and independence of the non-audit The majority auditor. the during KPMG out by carried work 2018 Interim the June to related year spent £1,361,000 In 2018, we on Review. and £46,000 £1,189,000) (2017: audit fees this £59,000), (2017: on non-audit fees of the overall 5%) (2017: 3% for accounted details Further the year. for audit fee auditor the external paid to of the fees the Accounts. 6 to set out in Note are is available The non-audit services policy www.plc.aggreko.com on our website: ACCOUNTABILITY CONTINUED Ethics & Corporate Responsibility Committee report

Introduction by Ken Hanna, Ethics & Corporate Responsibility Committee Chair Aggreko aims to conduct its business with integrity, honesty and transparency. We expect all Aggreko employees, consultants and those acting on behalf of Aggreko to adopt these standards. We are proud that we have a reputation for conducting business fairly and professionally and we are committed to maintaining these values in all of our business dealings. We recognise that our business is exposed to potential risks of unethical conduct because of the nature and value of many of our contracts and because standards of integrity are not consistent across all of the countries in which we operate. The role of the Ethics & Corporate Responsibility However, we believe we have a robust compliance programme in place which Committee is to ensure that Aggreko conducts allows us to manage these risks effectively. business with integrity and transparency and The effectiveness of the compliance programme is monitored by the Ethics in accordance with the law. In future it will also & Corporate Responsibility Committee. oversee workforce engagement. Until December 2018, the Ethics & Ken Hanna Corporate Responsibility Committee was Ethics & Corporate Responsibility Committee Chair made up of three Independent Non- executive Directors, with myself as Chair. Meetings attended/No. of Nicola Brewer was appointed as the Chair Members in 2018 Position meetings eligible to attend of the Committee from 1 January 2019. 1 Ken Hanna Committee Chair 3/3 I have been a member of the Committee Diana Layfi eld Non-executive Director 3/3 since its fi rst meeting in February 2011 Dame Nicola Brewer2 Non-executive Director 3/3 and became Chair of the Committee in April 2012. I continue to have an interest Barbara Jeremiah Non-executive Director 3/3 in the work of this Committee and look 1 Ken Hanna was Chair of the Ethics & Corporate Responsibility Committee until 31 December 2018. forward to working with Nicola in This Committee Report is therefore presented by Ken. Ken continues to be a member of the Committee. achieving the Committee’s objectives. 2 Dame Nicola Brewer was appointed as the Chair of the Ethics & Corporate Responsibility Committee You will receive a report from Nicola on from 1 January 2019. progress of the Committee in the 2019 Annual Report. Areas of activity in 2018 Areas of focus for 2019 In 2018, we held three meetings. We invited the Head of Compliance, the → Reviewed the outcome of the → Implement the plan for workforce Group Legal Director and the CEO to regional compliance risk engagement in line with the 2018 attend all meetings. assessments. UK Corporate Governance Code. → Oversaw the review, amendment and → Conduct a review of the policies Role of the Ethics & Corporate communication of the Third-Party which fall under the remit of the Sales Representative Policy. Committee. Responsibility Committee → Advise the Board on the development → → Oversaw the completion of internal Receive feedback on the of strategy and policy on ethical investigations. implementation of the policies. matters. → → Monitored the actions taken Monitor the completion of refresher → Advise the Board on steps to be taken to address sanctions risks. ethics training across the business. to establish a culture of integrity and → Oversaw the implementation of honesty in all of the Group’s business measures designed to address risks dealings. associated with the new corporate → Oversee the Group’s policies and criminal offence of the Failure to procedures for the identifi cation, Prevent the Facilitation of Tax Evasion. assessment, management and reporting of ethical risk. → Oversee the Group’s policies and procedures to prevent persons associated with the Group from engaging in unethical behaviour. → Monitor and review the operation of the Group’s ethics policies and procedures. Ethics & Corporate Responsibility Committee terms → Monitor and review all payments made of reference: www.plc.aggreko.com to third-party sales consultants.

60 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information 61 cally c anti-bribery c ed some areas for improvement improvement for ed some areas page 44page Read more about how we manage our anti-bribery and corruption risk on we instructed an independent review review an independent instructed we in order programme of our compliance the framework benchmark against to and leading guidance regulatory identify any industry to and practice, improvement. for areas gaps or potential our that rmed confi This review is well programme compliance the business and established across set fromtone, is a clear there the top, The review on our high ethical standards. identifi further compliance the enhance to risk targeted including programme assessments on specifi These assessments risks. and corruption reviewed in 2018 and we completed were of these assessments. the outcome an also instructed In 2018,we and of the policy independent review manage the risks to in place procedures with the use of third-party associated This review sales representatives. is well that the process rmed confi identify and effectively designed to risks. manage potential and charitable donations require donations require and charitable and are senior management approval by and monitored centrally recorded This policy of Compliance. the Head donations any challenge enables us to be could or sponsorships which inappropriate. as potentially perceived Up Speaking speak to all employees encourage We have We concerns. any have up if they hotline an independent compliance This agency. an external by operated all to hotline is available multi-lingual employee any and allows employees report them to concerns who has any basis. All reports are on an anonymous analyse regularly and we up, followed Where receive. of report we the types Audit Internal our Group appropriate, the issue investigate to is asked team and report on the outcome. Modern slavery standards apply high employment We with our business, complying across and safety health employment, relevant our ensure to laws and human rights our also expect We safe. are employees adopt a similar approach suppliers to of their the protection to in relation of Conduct Our Supplier Code workers. sets out the minimum standards from require we them. It specifi with comply our suppliers to requires including fundamental rights workers’ hours and working of pay, standards freedom of association. Our modern read to available statement, slavery , provides at www.plc.aggreko.com take we detail on the approach more slavery. modern to in relation Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko rm rm compliance compliance rm meeting this ngs at each Policy and we require our sales require and we Policy confi to consultants Any these standards. to adherence the to suppliers who do not agree standard or an equivalent standards Aggreko. will not be engaged by Gifts, entertainment and hospitality for process approval a clear have We and hospitality gifts, entertainment Aggreko to, or given by, offered and All gifts, entertainment employees. are a nominal value above hospitality by and monitored centrally recorded This policy of Compliance. the Head proposed any challenge enables us to be could which gifts or hospitality inappropriate. as potentially perceived Sponsorship and charitable donations for process approval a clear have We donations sponsorships and charitable All sponsorships Aggreko. made by with the policy annually. We also We annually. with the policy our sales to ethics training provide alert remain they ensure to consultants in controls have We risks. potential to the remuneration to in relation place all monitor and we of consultants ensure to sales consultants to payments does structure that the remuneration unethical behaviour. not incentivise framework us a robust This gives to understand who clearly enable us to are sales representatives our third-party undertaken have and the activities they also enables This policy on our behalf. parties engaging with third avoid us to who do not meet our ethical standards. of Conduct a Supplier Code have We expect we sets out the standards which from Aggreko all other suppliers to confi suppliers to require and we payments made to, third-party sales third-party made to, payments an overview This included consultants. introduced measures of the additional the use and control further monitor to We sales representatives. of third-party revised a and approved also reviewed the use of third-party governing policy pleased are We sales representatives. of the focus the continued observe to all activities business in monitoring in this area. Sanctions of and extension The introduction in sanctions of the countries in some attracts potentially operate we which the business. We for risk increased briefi received year on development in relation to to in relation on development year the impact to sanctions, the potential business and the actions being taken This included risks. manage potential to of the sanctions developments a review and Iran. Venezuela Russia, to in relation of the compliance Effectiveness programme that ensuring to committed are We remains programme our compliance practice. and is in line with best robust the effectiveness monitor continually We and of the policies and procedures further where areas recommend be made. In 2017 could improvements ng from the ed. It is supported and icts of interest cant risk to Aggreko. The number Aggreko. to cant risk speaking up. We provide training to to training provide We up. speaking on these policies and all employees with compliance monitor regularly we that assurance obtain these policies to effectively. work to the policies continue Training training, receives employee Every refreshed, is regularly which via our online ethics compliance multi-lingual This online programme. training additional by is supplemented training with senior ethics workshops us comfort management, gives which risks. alert remain to that our employees risks Third-party and agents All of our sales consultants before reviewed comprehensively are engaged and this exercise are they is refreshed years. two every at least contractually are Our sales consultants with our Ethics comply to required by a number of supplementaryby policies, cover and guidelines to procedures gifts and hospitality, due diligence, donations, facilitation charitable confl payments, An overview of our compliance programme: of our compliance An overview is programme Our compliance of Compliance our Head by coordinated Manager with supportand Compliance from the business units and the central functions. programme Our compliance has a number of elements designed to manage effectively that we ensure risks: compliance Policy Ethics of the a copy receives employee Every join Aggreko. when they Policy Ethics sets out the standards This policy from expect we and behaviours our to tool and is an effective employees improper any challenge us to allow identifi behaviours Third-party monitoring Third-party not just our that it is recognise We to be exposed who could employees sales but also our third-party ethics risks agents and joint venture consultants, (JV) partners. of our The conduct a remains sales consultants third-party signifi agents sales consultants, of third-party and JV partnersthe business used by but years the past few over has reduced sales in which circumstances are there to required be to continue consultants of the business. support areas some management measures risk have We all third-party require which in place agents and JV sales consultants, to partners Aggreko engaged by with business in compliance conduct Policy set out in our Ethics the standards compliance monitor us to and allow also We with these requirements. to in relation in place controls have sales of third-party the remuneration all monitor we and consultants them. to payments a briefi received In 2018, we Main activities the of Ethics Responsibility & Corporate during the year Committee Power Solutions MD on the outcome of Solutions MD on the outcome Power with, and of all arrangements his review REMUNERATION Annual remuneration statement

Introduction by Barbara Jeremiah, Remuneration Committee Chair Dear Shareholders On behalf of the Board and the Remuneration Committee, I am pleased to present to you our Remuneration Report for 2018. Last year we introduced a new remuneration policy. This followed extensive consultation with our largest shareholders and representative bodies. We appreciate the time they spent on this matter and we were pleased to receive strong support for this policy at the 2018 AGM, with 98.6% of shareholders voting in favour. No changes are proposed to that policy at this year’s AGM. This report includes both my annual statement and our annual report on remuneration. For ease The principal role of the Remuneration Committee of reference, we include a summary of the key elements of our Remuneration is to determine the remuneration for Executive Policy with the full policy available in Directors and Executive Committee members. last year’s report. The annual report on remuneration and this annual statement We also oversee Aggreko’s overall remuneration will be subject to an advisory vote at our policy and practice for the wider workforce. AGM on 25 April 2019. Barbara Jeremiah Annual remuneration statement page 62 Remuneration Committee Chair Annual report on remuneration page 67 Meetings attended/No. of 2018 remuneration policy summary Members in 2018 Position meetings eligible to attend page 77 Barbara Jeremiah1 Committee Chair 4/4 Ken Hanna Company Chairman 4/4 Our remuneration policy 2 Uwe Krueger Senior Independent Director 4/4 The aim of our remuneration policy Ian Marchant3 Non-executive Director 3/4 is to ensure that executive incentives Russell King4 Former Remuneration Committee are aligned with Group strategy and Chair 3/3 performance with, for example, a focus on the effi cient use of capital in investing 1 Barbara Jeremiah was appointed as Remuneration Committee Chair following the AGM in 2018. in our current fl eet and the effective 2 Uwe Krueger was appointed Senior Independent Director following the AGM in 2018. investment in and deployment of 3 Ian Marchant was unable to attend a meeting owing to a pre-existing arrangement. new/renewable technologies. This includes our recent investment in Next 4 Russell King retired from the Board after the AGM in 2018. Generation Gas generators and energy storage capabilities, with a greater emphasis on Return on Capital Areas of activity in 2018 Areas of focus for 2019 Employed (ROCE) being a key measure → Determined outcomes for the 2017 → Determine outcomes for the 2018 of long-term success. Our policy also Annual Bonus for fi nancial and Annual Bonus for fi nancial and ensures alignment with the shareholders personal/strategic objectives. personal/strategic objectives. of the Company with deferral of a portion of bonuses into shares. → Set targets for the 2018 Long-term → Set targets for the 2019 Annual Incentive Plan and Annual Bonus Bonus Plan, both fi nancial and Plan, both fi nancial and personal/ personal/strategic objectives. strategic objectives. → Review the fi nancial performance → Finalised the framework for measures for the Long-term Incentive new incentives. Plan to ensure they continue to be aligned with the Group’s strategy → Implemented new incentive for growth. arrangements following their approval by shareholders at the → Approve awards under the 2019 2018 Annual General Meeting. Long-term Incentive Plan. → Approved awards under the 2018 → Ensure compliance with the revised Long-term Incentive Plan. FRC UK Corporate Governance Code in respect of remuneration. → Received advice and training on the revised FRC UK Corporate Governance Code.

Remuneration Committee terms of reference: www.plc.aggreko.com

62 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information 63 The Committee has reviewed the has reviewed The Committee FRC UK new of the provisions and Code Governance Corporate within operating to is committed of the Code. and spirit the terms ensure we In line with the Code line has clear that the Committee of workforce of sight and oversight policies and related remuneration policies of Executive when setting enable it and to remuneration Director whether Company advise the Board to supportpolicies and practices culture HR Director The Group and strategy. support of Reward Director and Group this. in the Committee in the Corporate to As referred is the Board Code, Governance to relating what steps considering engagement (in addition employee & of the Ethics work the current to Committee Responsibility Corporate and appropriate – see page 60) are will build on this to the Committee views considers that it properly ensure from employees.

→ → → Committee changes Committee from down stepped Russell King the nine following at the 2018 AGM, Board as Chair of over I took of tenure. years following Committee the Remuneration served on the and have the 2018 AGM I would 2017. March since Committee of his leadership thank Russell for to like his considerable for and the Committee on the development of time investment Policy. Remuneration of the current In conclusion and feedback shareholder any I welcome be supportive to will continue hope you of the implementation of our policy. sincerely Yours Jeremiah Barbara Chair Committee Remuneration Corporate Governance Governance Corporate changes Code Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko cer cer cer, ected the ected nal year year nal is a key ciency Full details of the performance outcomes outcomes details of the performance Full set out on annual bonus are the for 68 andpages 69 Further details set are out 70 on page details can be found Further ciency. – measured nancial performance Chris Weston that his salary will remain Weston Chris 2019 (also unchanged for unchanged his appointment in 2015). Similarly, since the Chief for is proposed no increase (who Drewett Heath cer, Offi Financial Offi as Chief Financial joined Aggreko on page 65. will be made under the LTIP Awards year the previous as at the same level will again The awards – 250% of salary. EPS of 5-12%pa be subject 50% to basis) and measurement (aggregate (fi ROCE of 15-22% 50% to details basis). Further measurement on page 65. can be found has – the Committee Salary review Offi with the Chief Executive agreed in January of both 2018). The salaries again will be reviewed these Executives from effect take to 2019, in December January 2020. Implementation the of policy 2019 for the 2019 for The annual bonus for broadly will operate Directors Executive on the same basis as in 2018, with fi 80% for against D-EPS – accounting opportunity and the remaining of total against personal/strategic 20% measured effi Capital objectives. 2019 and beyond. in Aggreko for priority Executive the two 2019, for Therefore, personal/ a single will share Directors capital to relating objective strategic effi Long-term Incentive Plan (LTIP) awards awards (LTIP) Plan Incentive Long-term the 2016 did not meet May in granted so these awards targets, performance will lapse in full. refl All of these outcomes programme of our incentive operation of any without the exercise formulas and was the Committee by discretion recognition ect an appropriate refl to felt performance. the year’s for Twenty-fi the bonus is of percent ve Twenty-fi three for shares in Aggreko deferred years. t nancial ect our ect page 64page ts – is set at an adjustment t (after and nancial objectives – salary, element of pay xed people. and expert ciency to and 18.5% nancial objectives Full detailsFull set are out on The majority of executive of executive The majority Aggreko’s to is linked remuneration weighting with a heavier performance, than on performance on long-term and performance; short-term reward packages The remuneration portfolio of measures a balanced refl designed to are which sustainable profi goal of delivering plan We the long term. over growth on our focusing this by achieve to of customer business priorities four capital investment, technology focus, effi The fi pension and benefi the to reference by level appropriate operate; we in which talent markets

nancial performance. Chris Weston, Weston, Chris nancial performance. set measures nancial performance for currency movements and pass- movements currency for up 10%. fuel) was through Against Directors the Executive this backdrop the for pay-out an on-target achieved fi a total earned cer Offi Chief Executive 2018 of 86.8%annual bonus for of salary fi to related (70% objectives) personal/strategic 16.8% to Financial Chief Drewett, and Heath annual bonus a total earned cer Offi related of 88.5% 2018 of salaryfor (70% to fi both objectives), personal/strategic of salary. out of a maximum 175% bonus amounts, both these total Within met the stretching have and Heath Chris fi of 50% of with a payment the Board by the fi for the maximum available element as set out on page 68. met the personal/strategic Chris level. on-target at a broadly objectives progress is making In particular, Aggreko of frontson a range getting including Solutions and in Power growth to back in North performance strong continuing delivery alongside continued America of his people objective. made a strong has quickly Heath impact in the business. He also met set by objectives the personal/strategic level. on-target at a broadly the Board furtherHighlights include increasing on discipline and focus the Group’s Aggreko’s capital and recasting working case with the market. investment Summary of 2018 outcomes performance targets set stretching The Committee profi and underlying → → → Our reward package for Executive Executive for package Our reward that: such is structured Directors REMUNERATION CONTINUED Annual remuneration statement continued

Our remuneration at a glance

Summary of 2018 remuneration Our aim The aim of Aggreko’s remuneration policy is to reward executives for delivering long-term value to our shareholders. The following table summarises how the policy was applied in 2018 and the components making up the reported single fi gure on page 67. Total single fi gure (% change from 2017 for CEO) Element of How it was remuneration How it works implemented in 2018 CEO CFO Salary To pay at an appropriate level in the talent No increase in 2018 £750,000 (0%) £458,8201 market(s) relevant to each individual Cap of £900,000

Benefi ts To provide market normal benefi ts Market-competitive £26,324 (6.4%)2 £18,784 Not expected to exceed 20% of salary insured benefi ts and company car allowance

Pension Defi ned contribution and/or cash in lieu 30% of salary cash £225,000 (0%) £92,000 Between 20% and 30% of salary supplement for the CEO (with no more than 20% for new hires) and 20% for the CFO

Annual Reward for delivery of annual targets D-EPS 80% weighting 50% of 51% of bonus Cap of 175% for Executive Directors Personal objectives 20% maximum maximum 75% paid in cash, 25% deferred into shares weighting (see page 69) (see page 69) for three years £651,000 (-9.8%) £407,100

Long-term 2018 LTIP grant subject to pre-vest 2016 LTIP award: subject 0% of maximum n/a incentives performance conditions over three years to continued service, (see page 70) 3 50% subject to D-EPS due to vest in May 2019 £0 (0%) 50% subject to ROCE D-EPS 0% vesting Legacy awards continue on their terms ROCE 0% vesting

Sharesave All-employee scheme with monthly Savings capped at £500 £5,612 £5,612 savings over two to fi ve years and options per month over three granted at a discount years and options granted at 20% discount

Buy-out Replacement of unvested non- Subject to continued n/a £234,736 awards4 performance shares through a one-off service, due to vest in award to compensate for the value of August 2020 variable awards which were forfeited when Heath Drewett resigned from his previous employer

Buy-out Compensation for repayment of a Subject to clawback in n/a £429,681 payments retention award to be repaid to Heath full on resignation in the Drewett’s former employer fi rst 12 months of employment Paid in January 2018

Compensation for lost 2017 annual bonus Determined and paid in May 2018 £320,000

Total £1,657,936 £1,966,733 (-28.5%)

1 Pro-rata portion of Heath’s £460,000 salary earned from 3 January 2018. 2 Any change in reported value refl ects the cost of provisions rather than a change in the level of benefi ts. 3 The 2016 LTIP award which is due to vest in May 2019 is subject to performance conditions over three years, ending on 31 December 2018, with 75% of the award subject to D-EPS and 25% of the award subject to ROCE. These awards were granted under our previous remuneration policy. 4 In addition, Heath Drewett was granted an award of 89,311 shares subject to the same conditions as the normal 2018 LTIP award and due to vest in April 2021.

64 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information 65 35 35 % salary Max bonus Total: £982,316 Total: Total: £1,657,936 Total: Total: £2,126,324 Total: Total: £1,260,784 Total: nancial targets targets nancial 70 70 % salary £468,750 On-budget bonus £651,000 £656,250 Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko 140 140 D-EPS growth objectives Personal % salary Max bonus £287,500 £1,001,324 £1,006,936 175 175 % salary £575,216 £407,100 £570,784 £402,500 Total max bonus Total 0 500,000 1,000,000 1,500,0000 2,000,000 500,000 2,500,000 1,000,000 1,500,000 2,000,000 2,500,000 ciency, a single common personal objective has been set for both Executive Directors Directors both Executive has been set for personal objective a single common ciency, 2019 On target 2019 On target 2018 Actual 2018 Actual* LTIP ts in line with policy. ts will continue cer cer Bonus measurement). nal year Fixed pay pay Fixed annual report on remuneration. year’s in next nancial targets Awards are expected to be granted in April 2019. 2019. in April be granted to expected are Awards has amended the plan the Committee Code, Governance Corporate with the new As with the annual bonus, consistent that it is not appropriate if it concludes result formulaic any reduce to discretion that it has appropriate ensure rules to in all the circumstances. Long-term Incentive Plan Incentive Long-term of 250% of salary with value with a face Directors Executive to awards of 2019 LTIP the grant approved The Committee basis) and 50% measurement per annum (aggregate - 50% EPS of 5-12% as the 2018 awards targets the same performance (fi ROCE of 15-22% Given the strategic focus on capital effi focus the strategic Given based on this. that it has ensure has amended the plan rules to the Committee Code, Governance Corporate with the new Consistent in all the circumstances. that it is not appropriate concludes if it result formulaic any reduce to discretion appropriate or the fi Directors the Executive for objective full details of the single personal/strategic not disclosed have We these retrospectively disclose to our intention It is, however, sensitive. commercially be them to consider in this report, as we fi Chris Weston Chris Offi Chief Executive Drewett Heath Offi Chief Financial Heath Drewett Heath * Heath Drewett’s buy-out awards are excluded as they are not part remuneration. are of his regular as they excluded are awards buy-out Drewett’s * Heath Executive Director Executive Pensions and benefi Pensions Implementation of remuneration policy in 2019 policy Implementation of remuneration as follows: in 2019 policy implement the remuneration to intends The Committee Base salaries 2019 for 2018; his salary unchanged in December will remain the Committee by reviewed base salary was Weston’s Chris The Committee Drewett. Heath for is proposed no increase Similarly, his appointment in 2015). since (also unchanged from effect take to 2019, in December January 2020. Directors both these Executive of the salaries review next to intends and benefi Pensions Annual bonus as follows: Directors the Executive for set annual bonus targets The Committee Key: Executive Directors’ remuneration scenarios remuneration Directors’ Executive Chris Weston Weston Chris REMUNERATION CONTINUED Annual remuneration statement continued

Our Remuneration Committee Determining the remuneration for the Executive Directors and Executive Committee members is a key focus of the Committee. The Committee oversees Aggreko’s overall remuneration policy, strategy and implementation to ensure that the policy is aligned with the key objectives of growing earnings and delivering a strong return on capital employed. Environmental, social and governance (ESG) factors are considered when assessing the personal element of the Executive Directors’ performance and the Committee is satisfi ed that the design of the incentive plans does not pose undue ESG risks. The Remuneration Committee is currently made up of four Independent Non-executive Directors, including Barbara Jeremiah as Chair of the Committee. Peter Kennerley is Secretary to the Committee. We also invite the Chief Executive Offi cer, Group HR Director and Group Director of Reward to attend our meetings. The Chairman and the Executives are not present when their personal remuneration is discussed. In 2018, we held four meetings of the Committee. Ian Marchant was unable to attend one meeting owing to a pre-existing arrangement but was able to share his views with the Committee Chair. We also took a number of decisions based on papers circulated outside the context of a formal meeting. Our role is as follows: → Determine and agree with the Board the policy for remuneration for the Chairman, Executive Directors and Executive Committee. → Within the terms of the remuneration policy, determine the total individual remuneration package for the Chairman, each Executive Director and each member of the Executive Committee (including the Secretary), including base salary, pension, benefi ts, annual bonus and long-term incentives. → Determine, having taken appropriate advice, the level of any payment made to the Chairman (who is not present at such discussions), Executive Directors or members of the Executive Committee by way of compensation for, or otherwise in connection with, loss of offi ce or employment. → Approve the design of, and determine targets for, performance-related pay schemes operated by the Company and approve the total annual payments made under such schemes. → Review the design of all share incentive plans for approval by the Board and shareholders. For any plan, determine each year the overall amount of awards, along with the individual awards to Executive Directors and members of the Executive Committee. In the case of any retention or new joiner awards to employees below the Executive Committee, retrospectively approve awards. → Review the pay and other main terms of employment of employees more generally. → Determine the policy for and scope of pension arrangements for each Executive Director and members of the Executive Committee. → Oversee any major changes in employee benefi ts structures throughout the Group. → Agree the policy for authorising claims for expenses from the Directors. In the following section of our report, we explain how we have implemented Aggreko’s remuneration policy during 2018. The policy in place for the year was the one which was approved by shareholders at Aggreko’s 2018 Annual General Meeting, a summary of which is set out on pages 77 to 79. The full policy is available on the Company’s website: www.plc.aggreko.com

66 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information £ £ £ 67 Total Total Total Total 1,966,733 1 January 2018 2

1

£ 1 £ % 0 750,000 Other Other Increase £ rst 12 months of employment. his annual bonus from his previous he repayment of a retention award award of a retention he repayment £ Pension Pension £ r years and none are proposed for 2019. for proposed and none are r years 11,969 6,815 18,784 Car/fuel Car/fuel 12,000 14,324 26,324 £ 750,000 1 January 2019 Sharesave Sharesave Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko £ LTIP LTIP cant: ts below. ts £ table of remuneration gure bonus Annual cer cer 460,000 0 460,000 ts, life assurance cover, income protection, accident insurance and insurance accident protection, income cover, assurance ts, life £ ts Benefi £ Position Chief Financial Offi Chief Financial Chief Executive Offi Chief Executive 750,000 24,747 721,500 – – 225,000 598,865 2,320,112 Base salary 750,000 26,324 651,000 – 5,612 225,000 – 1,657,936 458,820 18,784 407,100 – 5,612 92,000 984,417 nal performance. nal signifi considers ts that the Committee gure for the total remuneration received by each Executive Director for the years ended ended the years for Director Executive each by received remuneration total the for gure Year 2018 2017 1 2

ts: the taxable value of benefi ts received in the year. See Benefi in the year. ts received of benefi value ts: the taxable ts follows: as been calculated have gures

employer he forfeited as a result of his resignation. Heath Drewett also received an amount of £429,681 to compensate him for t him for compensate to an amount of £429,681 also received Drewett Heath of his resignation. as a result he forfeited employer in the fi in full on resignation clawback subject to was The amount employer. his former to repaid amount was – all of the after-tax from shares non-performance his previous of unvested the forfeiture him for compensate 2018 to on 3 May shares of an award granted was Drewett Heath Also, of 2018 the last quarter over price share is based on the average value The face 2020. in August vest only and due to employment his continued subject to employer pence. of 788.5 Benefi 69. on pages 68 and Annual bonus scheme See the year. during on performance bonus earned Annual bonus: the total the 2018 fi to in relation vested No LTIPs multiplied of grant, less the option price, on the date share of an Aggreko price market is based on the the value Sharesave: the number of options. by both received Drewett and Heath Weston in lieu. Chris and cash pension contributions Company of any the amount Pension: in cash. entirely payment Base salary: amount earned for the year. See Base salary below. the year. Base salary: for amount earned

Heath Drewett Heath Chris Weston Chris 1 insurance. and accident protection income cover, assurance ts, life benefi healthcare Comprises Executive Director Executive Benefi Chris Weston Chris 1 fou for Directors Executive for 4.9%. been no salary 2018 was for increases have the Group There across increase The average benefi healthcare received Drewett and Heath Weston Chris Base salary at 1 January as as follows: 2019 and 1 January Directors 2018 were Executive for The base salaries Director Executive Additional disclosures in respect of the single total fi of the in respect singleAdditional disclosures total Heath Drewett Heath 2 on 3 January joined the Board 2018. Drewett Heath a car allowance. those benefi table shows The following 1 2018 is from for remuneration of appointment, 3 January date 2018. Drewett’s Heath 2 him for partially compensate to an amount of £320,000 received Drewett Heath As set out on page 80 of our Annual Report 2017, 31 December 2018 and 31 December 2017. 2018 and 31 December 31 December Chris Weston Weston Chris 2018 The table below sets out a single fi sets out The table below Director Executive Single total fi (audited) Directors – Executive remuneration of gure fi Single total Heath Drewett Heath → → → million in 2018. £4.34 were Directors and Non-executive Executive for emoluments aggregate Total → → → The fi Annual report on remuneration REMUNERATION CONTINUED Annual report on remuneration continued

Annual bonus scheme

Cash (75%) Financial Maximum Personal Base performance Annual bonus incentive objectives salary metrics outcome (% of salary) (20%) (80%) Deferred shares (25%)

The maximum bonus opportunity for 2018 for both Executive Directors was 175% of salary. Bonus payments are payable as to 75% in cash, and as to 25% deferred into shares for three years. The Committee has discretion to reduce the number of shares that can vest in the event of gross misconduct, material misstatement of the accounts or any other circumstances or events which arise which the Committee considers to be suffi ciently exceptional to justify the operation of malus/clawback. The targets under the 2018 annual bonus scheme were based as to 80% on fi nancial performance measures set against the annual budget at the start of the year and as to 20% against personal/strategic objectives.

Financial performance measures The fi nancial objectives for the Chief Executive Offi cer (Chris Weston) and Chief Financial Offi cer (Heath Drewett) were measured against D-EPS. For the fi nancial measure, they start to earn a bonus at threshold performance, calculated as a percentage below budget, increasing to half of the maximum that could be earned under that element at budget on a straight-line basis. The bonus would then increase on a straight-line basis to the maximum, calculated as a percentage above budget.

The table below shows the performance against budget of the fi nancial performance measure used for calculating the annual bonus for 2018: Measure Threshold Budget Maximum Outcome % maximum % budget % budget % budget of element D-EPS growth 51.7p 95 54.4p 59.8p 110 54.4p1 100 50

1 As provided for under the plan, the reported D-EPS has been adjusted to a constant currency basis.

68 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information 69 1.00 3.50 1 Actual bonus Actual bonus allocation (% of allocation (% of salary achieved) salary achieved) 7.00 7.007.00 7.00 88.5 407,100 86.8 651,000 10.50 9.45 10.50 2.10 14.00 5.25 14.00 7.00 35.00 16.80 35.00 18.50 % of salary) % of salary) (maximum (maximum Bonus allocation Bonus allocation 18.5 16.8 % salary % salary £ Outcome Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko 35 35 cant potential potential cant % salary Max bonus 70 70 % salary Outcome Outcome eet. 140 140 D-EPS growth objectives Personal payable Total % salary Max bonus Discipline around the management of the pipeline the management Discipline around enhanced been have sales force of the and capability of our table deployment with emphasis on the profi fl existing across talent has been hired calibre cant high Signifi set), including the target (exceeding the Group for candidates a number of people who are time. positions over senior level more for succession has induction in Aggreko and establishment Heath’s internally, regarded He is well been very successful. adding and he is the market and by shareholders by the business, particularly in the to cant value signifi capital discipline. and working of cost areas Performance assessed Performance We have identifi of opportunities ed a wide range for identifi have We assets into and storage of renewable the introduction in particular the macro by our business model, driven and decentralisation of decarbonisation trends market commercial extended The more market. in the energy these times for lead and contract development signifi that any mean technologies is likely to be realised over the mid to long-term, long-term, the mid to over be realised to is likely future. than in the immediate rather Performance assessed Performance Engagement with investors, enhanced transparency transparency enhanced Engagement with investors, and style the to reporting and changes of performance received. been well reporting have of external focus in support of decisions taken developed analysis Clear footprint, manufacturing use of existing future the over property options and operational make/buy including rationalisation. Further increased attention and focus on working on working and focus attention increased Further Process the Group. capital management across capital, working reduce to put in place improvements and receivables with a particular on trade focus inventory. Assessment underway and progressing. Assessment underway 175 175 % salary cantly Total max bonus Total c internal objectives are commercially sensitive and likely to remain so but the table shows the nature the nature but the table shows so remain to and likely sensitive commercially are objectives c internal Establish growth growth Establish Power for trajectory Solutions and a path signifi to ROCE. increased to Continue the strengthen talent general pipeline; oversee induction and establish successfully in CFO the new Aggreko. Establishment of Establishment streams revenue from (fossil hybrids fuel/renewables) and distributed generation. Objective Objective Recast investment Recast investment case with the market. with the Work establish business to footprint the required Manufacturing for & Technology. business to deliver a deliver business to in working reduction supportscapital which ROCE improvement. Complete a full review a full review Complete of the business programme. priorities Total Power Solutions/ Power focus sector and Talent succession Heath Drewett Heath The table below sets out the total bonus entitlement for 2018: bonus entitlement for sets out the total The table below Director Executive Investor Investor relations Manufacturing & Technology Subject capitalWorking with the Work Heath Drewett Heath Business priorities programme Subject market Energy transformation Chris Weston Total Chris Weston Chris 1 element. shares deferred the 25% bonus includes The total Personal/strategic performance measures performance Personal/strategic agreed included all of which personal objectives, set four was Drewett and Heath personal objectives three set was Weston Chris the achieve could they objectives of these personal Against each roles. their c to specifi objectives set strategic for outcomes of salary in total). (35% detailed in the table below maximum bonus entitlements and information and qualitative both quantitative considering against these measures performance reviewed The Committee salary. of as a percentage achieved objective personal/strategic assessment of each the Committee’s shows the table below A number of the specifi of each measure and the basis for the assessment. and the basis for measure of each REMUNERATION CONTINUED Annual report on remuneration continued

Long-term Incentive Plan (LTIP)

No. of D-EPS ROCE Share LTIP awards performance performance price on outcome granted (75%) (25%) vesting

The performance criteria for the LTIP awards granted in 2016 were as follows: → 75% of the award is based on three-year cumulative D-EPS as compared to three-year compound growth in real (RPI-adjusted) D-EPS. No performance shares will be awarded against this element if performance is below an equivalent of RPI+3% per annum growth. Awards will then start to vest above that level and will increase straight-line to a maximum at an equivalent of RPI+15% per annum growth; and → 25% of the award is based on average ROCE over the performance period in a range of 20% to 25%. No performance shares will be awarded against this element if performance is less than 20% and awards will increase on a straight-line basis to the maximum at 25% ROCE. The performance period for the 2016 LTIP awards ended on 31 December 2018. Over the period: → Aggreko’s aggregate D-EPS was 165.1 pence. Since the threshold of growth of RPI+3% was not achieved, no shares will vest under this performance measure; and → Aggreko’s actual average ROCE for the period was 11.3%. Since this was less than the threshold of 20%, no shares will vest under this performance measure. As a result, all 2016 LTIP awards lapsed in full.

Share awards granted in 2018 (audited)

Maximum Share No. of Base incentive price at awards salary (% of salary) grant granted

This simply determines the size of the grant. Whether the award ultimately delivers value will depend on the extent to which the performance targets are met over the following three years (and to which a further two year holding period is met).

In May 2018, Chris Weston and Heath Drewett were granted awards of shares under the 2015 Long-term Incentive Plan (the ‘LTIP’), with a value equivalent to 250% of salary. The three-year performance period over which D-EPS will be measured began on 1 January 2018 and will end on 31 December 2020. ROCE will be measured on a fi nal year basis – in 2020. None of the awards granted under the LTIP are eligible to vest until 3 May 2021. The performance criteria for the LTIP awards granted in 2018 are as follows: → 50% of the award is based on three-year cumulative EPS. No performance shares will be awarded against this element if performance is below an equivalent of 5% per annum growth. If performance is equivalent to 5% per annum growth, 25% of the award will vest. Vesting will increase straight-line to a maximum at an equivalent of 12% per annum growth; and → 50% of the award is based on fi nal year ROCE (2020) in a range of 15% to 22%. No performance shares will be awarded against this element if performance is less than 15%. If performance is equivalent to 15% ROCE, 25% of the award will vest and awards will increase on a straight-line basis to the maximum at 22% ROCE. Shares which vest will be subject to a further holding period of two years in accordance with the rules of the LTIP. In addition, 25% of the 2017 bonus payment for Chris Weston was deferred into shares under the Deferred Share Bonus Plan (DSBP). These shares will be released three years from date of grant. Also, as explained on page 80 of our Annual Report 2017, the Committee made awards to Heath Drewett on 3 May 2018 under restricted stock agreements to compensate him for the forfeiture of variable awards from his previous employment. The two awards were determined as follows: an award of 89,311 shares with a face value of £701,986 subject to the same conditions as the 2018 LTIP detailed above and due to vest on 1 April 2021; and an award of 29,770 shares with a face value of £233,995, subject to his continuing employment on vesting or otherwise if he leaves as a good leaver, and due to vest on 10 August 2020.

70 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information 7 4 71 47 109 100 Current Current % salary 25/100 minimum % vesting on % vesting performance shareholding shareholding 6 4 £ 935,981 180,369 Face value Face (A + B) towards towards 3 5 guidelines May 2018 and the 2018 May Shares counting counting Shares lines, Executive Directors have have Directors lines, Executive age market price of Aggreko shares shares of Aggreko price age market ss the option price of 660 pence multiplied multiplied of 660 pence ss the option price 250 29,770 250 111,204 % salary guidelines Shareholding Shareholding minimum 3 % vesting on % vesting performance Shares Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko 2 £ 2,727 Options conditions Face value Face to performance performance to held not subject 6 2 subject to subject to 246,629 conditions Shares held Shares performance performance 5 (B) minimum Shares Shares % vesting on % vesting performance Shares 1 £ to deferral to held subject LTIP Sharesave Other 1 Face value Face – 29,770 (A) Shares Shares owned owned outright 81,095 30,109 726,517 4,895 Shares 256,497 1,874,993 25 2,727 5,612 100 24,540 pence. being 731 awarded, the number of shares determine used to 2018, was which of 3 May of grant the date to prior business days ve t Trust (EBT) as potential benefi ciaries. The EBT is a trust established to distribute shares to employees of the Company of the Company employees to shares distribute is a trust established to The EBT ciaries. benefi as potential (EBT) t Trust a period of fi ve years to achieve the shareholding guideline of not less than 250% of base salary. guideline of not less than the shareholding achieve to years ve of fi a period LTIP award, both as set out on page 70. award, LTIP over the fi the over the number of options granted. by pence. being 735 awarded, the number of shares determine used to was which of grant the date to Heath Drewett Heath Chris Weston Chris 1 persons. connected held by shares This includes 2 shares. over awards LTIP comprise performance held subject to Shares 3 Plan. held under the Sharesave Options 4 guide ownership share 2018. as at 31 December Company’s Under the pence of 732.6 price using a share is calculated Percentage As at 31 December 2018, the shareholdings of the Executive Directors were as follows: were Directors of the Executive 2018,As at 31 December the shareholdings Director Executive Directors’ shareholdings (audited) shareholdings (audited) Directors’ Executive Executive Director Executive Weston Chris The table below shows details of interests awarded to Executive Directors during 2018: during Directors Executive to awarded details of interests shows The table below 5 2018 as set out on page 70. on 3 May awarded shares non-performance the 29,770 comprises deferral held subject to holding of shares Drewett’s Heath 6 on 3 awarded shares performance the 89,311 comprises conditions performance held subject to holding of shares Drewett’s Heath 1 the aver by met multiplied are targets if all performance vest that would of shares is the maximum number of LTIP value Face 3 under the DSBP. an award comprise Weston Chris to awarded Shares prior business days ve 4 the fi over shares of Aggreko price market the average by 2018 multiplied on 23 March awarded of DSBP is the number of shares value Face 5 as detailed above. shares non-performance and 29,770 shares performance 89,311 comprise Drewett Heath to awarded Shares 6 is as detailed above. awards Drewett’s of Heath value Face 7 conditions. no performance are there shares the 29,770 and for on minimum performance will vest of the award 25% shares, performance the 89,311 For 2 of grant, of 865.8 le 2018, pence, being the date on 5 October shares of Aggreko price is the market of Sharesave value Face Heath DrewettHeath 157,318 1,149,995 25 2,727 5,612 100 119,081 Departing executives, including Carole Cran, only receive deferred share awards at the normal time of maturity so are required required so are time of maturity at the normal awards share deferred only receive Cran, Carole including Departing executives, post-cessation. of ownership maintain some level to and 2018 31 December between in Ordinary Shares interests Directors’ in the Executive been no changes have There 2019. 6 March Employee in the holdings of the Aggreko an interest have of the Company, as employees Drewett, and Heath Weston Chris Benefi and its subsidiaries in satisfaction of awards granted under the Aggreko Long-term Incentive Plans and Sharesave Schemes. Schemes. and Sharesave Plans Incentive Long-term under the Aggreko granted of awards in satisfaction and its subsidiaries and the holding at the date plc Ordinary Shares Aggreko of 1,949,676 held a total of the EBT 2018,At 31 December the trustees the use through settled plans are share All Aggreko on these shares. of this report is 1,934,592. The dividend has been waived limits. dilution of its available has not utilised any so the Company shares purchase of market REMUNERATION CONTINUED Annual report on remuneration continued

Share awards and share options The table below shows details of share awards or options over Ordinary Shares in the Company pursuant to the Company’s share-based incentive plans for Executive Directors who were in offi ce for any part of the 2018 fi nancial year. Details of awards and options granted to Executive Directors in 2018 under these plans are also included on page 71. Options/ Market Market Options/ awards Options/ price at price at awards exercised/ awards date Exercise date As at granted Dividend vesting lapsing At awards price - awards Normal 1 January during equivalent during during 31 December granted options vested vesting date/ 2018 year shares3 year year 2018 (pence)4 (pence) (pence) exercise period Chris Weston LTIP1 2015 139,232 – – – 139,232 – 1,616 May 2018 2016 209,302 – – – – 209,302 1,075 May 2019 2017 260,718 – – – – 260,718 863 June 2020 2018 – 256,497 – – – 256,497 731 May 2021 DSBP2 2015 7,736 – 866 8,602 – – 1,562 7255 April 2018 2017 5,569 – – – – 5,569 909 March 2020 2018 – 24,540 – – – 24,540 735 March 2021 Sharesave 2015 2,168 – – – – 2,168 1,027 830 January – June 2019 2018 – 2,727 – – – 2,727 865.8 660 January – June 2022

Heath Drewett LTIP1 2018 – 157,318 – – – 157,318 731 May 2021 RSP 2018 – 29,770 – – – 29,770 724.6 August 2020 2018 – 89,311 – – – 89,311 724.6 April 2021 Sharesave 2018 – 2,727 – – – 2,727 865.8 660 January – June 2022

1 All LTIPs have performance periods of three fi nancial years commencing with the fi nancial year in which the award is granted. 2 Awards under the DSBP are not subject to any performance conditions other than continued employment on the vesting date. 3 Under the LTIP, DSBP and RSP on vesting participants are entitled to the equivalent of any dividends on the shares between grant and vesting, payable in shares. 4 Market price at date awards granted is the average market price of an Aggreko share over the fi ve business days prior to the date of grant for the LTIP and DSBP awards (which was used to determine the number of shares awarded). Market price for Sharesave is the market price on the date of grant. For the RSP awards market price is the share price on date of grant, being 3 May 2018. 5 25% of Chris Weston’s bonus forfeited from his previous employer was deferred into shares (7,736 shares) as set out on page 97 of our 2014 Report and Accounts. The shares were released on 3 April 2018. Chris Weston was entitled to a further 866 shares equivalent to the dividends on the shares between grant and vesting. The aggregate value of the shares on the date of vesting was £62,364.50.

Arrangements with past Directors (audited) Exit payments There were no exit payments during the year. Carole Cran resigned as a Director and ceased to be an employee on 31 December 2017. She received an award of 4,082 shares in March 2015 representing the deferral of 25% of her 2014 bonus which vested on its normal vesting date in March 2018 (when the shares were worth £32,772).

72 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information £ – 73 and 1 January 2018 – 61,000 – 61,000 – 32,631 – 61,000 – 81,000 – – 50,208 – 101,000 – 61,000 – 61,000 % ts £ £ Total 801 342,801 851 342,851 1,216 82,216 Increase Increase £ – 32,631 61,000 61,000 3,378 64,378 61,000 81,000 50,208 2,771 52,979 50,208 61,000 61,000 61,000 81,000 74,564 2,317 76,881 713,195 3,168 716,363 101,000 807,416 8,166 815,582 342,000 0 342,000 342,000 342,000 1 January 2019 Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko 2018 2017 2018 2017 2018 2018 2017 Year £ Fees Benefi 2018 2017 2018 2017 2017 2018 2018 2017 2017 2 1 3 1 eld eld ts: the taxable value of benefi ts received in the year. in the year. ts received of benefi value ts: the taxable as follows: been calculated have gures Fees: amount earned for the year. the year. for amount earned Fees: Benefi

Diana Layfi Ian Marchant Uwe Krueger Uwe Diana Layfi Total 2018 2017 Total Russell King (former) Russell King Russell King (former) Russell King Krueger Uwe The fi 1 2017 is from for and Miles Roberts’ Jeremiah remuneration 2017. of appointment, Barbara 7 March date 2 2018. 26 April as a Director, of retirement date 2018 is to for remuneration Russell King’s 3 2018. for fees any forego to opted Krueger Uwe Non-executive Director Non-executive Single total fi (audited) Directors – Non-executive of remuneration gure fi Single total Role fee Chairman Non-executive Director base fee Director Non-executive Chair additional feeCommittee additional feeSenior Independent Director 20,000 61,000 20,000 0 0 20,000 0 61,000 20,000 Non-executive Directors (including the Directors Chairman) Non-executive within the limits set out Directors, Non-executive the for of fees and level policy the remuneration determines The Board the for of fees and level policy the remuneration recommends Committee in the Articles The Remuneration of Association. his remuneration). part in the discussions concerning take does not of the Board the Chairman (although of the Board Chairman are Additional fees of the Company. Director or Non-executive acting as a Chairman for fee an annual comprises Remuneration and as Senior Committees and Remuneration of service of the Audit as Chair in respect Directors Non-executive paid to ts or to benefi bonuses, retirement eligible for not are Directors and Non-executive The Chairman Independent Director. 2015 and the fees April since increased has not fee The Chairman’s the Company. by operated scheme share in any participate as a Non-executive fees any forego to has opted Krueger July 2015. Uwe since not increased have Directors the Non-executive for charity) relief disaster international (an Shelterbox to donations will make as he did in 2018. The Company 2019, for Director African Parks (an organisation that supports rehabilitation and long-term management of national parks across Africa) across parks management of national African that supports and long-term (an organisation rehabilitation Parks foregone. the fees to in total, equivalent, as at 1 January as follows: 2019 and 1 JanuaryDirectors 2018 were and Non-executive the Chairman for The fees → → Ken Hanna Ken Miles Roberts Miles Roberts Ian Marchant Nicola Brewer Nicola Jeremiah Barbara Ken Hanna Ken Brewer Nicola Barbara Jeremiah Barbara REMUNERATION CONTINUED Annual report on remuneration continued

Non-executive Directors’ shareholdings (audited) As at 31 December 2018, the shareholdings of the Non-executive Directors were as follows: Shares owned Director outright1 Ken Hanna 19,303 Nicola Brewer 1,450 Barbara Jeremiah 1,000 Russell King2 3,688 Uwe Krueger 3,101 Diana Layfi eld 2,855 Ian Marchant 3,331 Miles Roberts –

1 This includes shares held by connected persons. 2 Russell King’s holding is at date of retirement as a Director, 26 April 2018.

There have been no changes in the Non-executive Directors’ interests in Ordinary Shares between 31 December 2018 and 6 March 2019.

Comparison of Company performance The graph below shows the value, at 31 December 2018, of £100 invested in Aggreko’s shares on 31 December 2008 compared with the current value of the same amount invested in the FTSE 350 Index. The FTSE 350 Index is chosen because Aggreko has been a constituent member of this group over the entire period. Company performance

500 £469

£409 £407 400 £342 £363

300 £260 £212 £225 £231 £236 £231 200 £208 £194 £196 £197 £100 £161 £197 £148 £144 100 £130 £100

0 Dec 2008 Dec 2009 Dec 2010 Dec 2011 Dec 2012 Dec 2013 Dec 2014 Dec 2015 Dec 2016 Dec 2017 Dec 2018 Aggreko FTSE350 Index Source: Thomson Reuters

For comparative purposes, the remuneration of the Director undertaking the role of Chief Executive Offi cer for the same fi nancial years is set out below: Long-term incentive Single fi gure Annual bonus payout vesting rates against of total remuneration against maximum maximum opportunity Year CEO £1 % % 2009 Rupert Soames 2,555,850 63.2 100 2010 Rupert Soames 5,839,209 100 100 2011 Rupert Soames 8,501,865 82.4 100 2012 Rupert Soames 2,685,840 6.4 100 2013 Rupert Soames 1,779,144 49.6 72.5 2014 Angus Cockburn 1,290,9062 42.4 5.8 2015 Chris Weston 1,485,5163 00 2016 Chris Weston 1,909,1553 15 0 2017 Chris Weston 2,320,1123 55 0 2018 Chris Weston 1,657,936 50 0

1 The data for this table was taken from the Remuneration Reports for the relevant years and adjusted to take account of the actual share price on date of vesting for the LTIP. 2 Angus Cockburn was Interim Chief Executive from 25 April to 30 September 2014, and his emoluments have been calculated on the assumption that he held the role for the full year at the rates of remuneration in place on 30 September 2014. 3 The 2015 fi gure for Chris Weston includes an amount of £483,392 to compensate him for his annual bonus from his previous employer he forfeited as a result of his resignation. The 2016 fi gure includes an amount of £706,620 and the 2017 fi gure includes an amount of £598,865 to compensate him for the forfeiture of long-term incentives from his previous employer.

74 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information – – 75 % of functions votes cast votes change for for change Percentage Percentage Group central central Group £422m £401m nancial 04.3 6.4 2.1 CEO -9.8 3.4 of votes Remuneration ReportRemuneration change for for change Percentage Percentage ciently large large ciently Total number Total Other services –– 190,488,902 1,770,432 % of resolution. votes cast votes 2017 2018 2018 Total employee pay £m pay employee Total 0 100 200 300 400 500 +5.2% Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko of votes Fees paid by the Company the Company paid by Fees the services for £45,196 N/A 20,902 cer in comparison to the average change in change the average to in comparison cer 80 100 Remuneration Policy Remuneration 2,606,948 1.37 12,441,192 6.59 Total number Total 187,861,052 98.63 176,277,278 93.41 190,488,902 nancial year ended 31 December 2018. The total employee employee 2018. ended 31 December The total nancial year 60 £69m £69m 40 20 nalisation of the 2018 Services provided to to Services provided the Committee and for Advice at all attendance meetings of the including Committee fi on and training policy Corporate the new Code Governance 2017 2018 2018 Dividend £m +/-0% 0 t after tax (pre-exceptional items), dividend, and total employee pay for the fi for pay employee dividend, and total items), tax (pre-exceptional t after £134m 112 140 £125m nal dividends paid in respect of the fi 2017 and the interim ended 31 December nancial year of the fi nal dividends paid in respect Appointed by Appointed A sub-committee of the A sub-committee comprising Committee Chair, the current and Jeremiah, Barbara Chair, the previous Russell King 84 of the fi in respect nal dividend recommended 56 1 28 ts 2017* 2018 2018 remuneration of employees within the Group central functions over that period. functions over central the Group within employees of remuneration Percentage change in remuneration of CEO change in remuneration Percentage Offi Executive of the Chief in remuneration change the shows The table below Salary/fees Benefi 1 and against a cast for in the calculation of the proportion of votes and is not counted in law is not a vote A withheld vote For The following table shows the results of the binding vote on the Remuneration Policy and advisory vote on the 2017 and advisory vote Policy on the Remuneration of the binding vote the results table shows The following ReportRemuneration at the 2018 AGM. Statement of shareholder voting of shareholder Statement Except as detailed above, FIT provided no other services to the Group. It is a member of the Remuneration Consultants Group Group Consultants It is a member of the Remuneration the Group. no other services to FIT provided as detailed above, Except is the Committee account, into these factors Taking terms. on its normal charges and of conduct its code to and signatory the impartiality of FIT’s and objectivity advice. ed as to satisfi Against withheld votes) cast (excluding votes Total withheld Votes 190,468,000 100 188,718,470 100 Adviser FIT Remuneration Consultants LLP Consideration by the Directors of matters relating to Directors’ remuneration Directors’ to relating of matters the Directors by Consideration 2018. for the Committee adviser to external LLP as the principal Consultants FIT Remuneration advised by was The Committee in the table below: shown in 2018 are the Committee assisted that materially of work FIT in respect paid to The fees * 2017 number has been restated due to the implementation of IFRS 15. Refer to Note 1 of the Accounts on page 96. 1 of the Accounts Note to 15. Refer the implementation of IFRS due to * 2017 number has been restated and fi the interim Dividends are dividend paid and the fi Profit after tax £m after Profit Relative importance of spendRelative on pay profi Aggreko’s shows The chart below years ended 31 December 2017 and 31 December 2018, and the percentage change. 2018, 2017 and 31 December the percentage and ended 31 December years 0 Total votes cast (including withheld votes) votes Total -6.7% Bonus employees. than all Group functionsthe UK, rather in central the Group within employees the to relates group The comparator a suffi that it provides believes because the Committee this group chosen have we year, As in the previous that would the distortion while reducing increases, understanding of underlying a reasonable give to group comparator conditions. economic with their different from operates, arise the Group in which countries all of the many including pay increase is mainly due to the higher bonus payments, due to bonus targets being achieved in some parts in of the business. being achieved bonus targets due to bonus payments, the higher is mainly due to increase pay REMUNERATION CONTINUED Annual report on remuneration continued

Directors’ service contracts Each of the Directors will be proposed for election or re-election at the Company’s Annual General Meeting to be held on 25 April 2019. The Executive Directors are employed under contracts of employment with Aggreko plc. The Remuneration Committee sets notice periods for the Executive Directors at 12 months or less. The principal terms of the Executive Directors’ service contracts (which have no fi xed term) are as follows: Notice period Executive Director Position Effective date of contract From Director From Company Heath Drewett Chief Financial Offi cer 3 January 2018 12 months 12 months Chris Weston Chief Executive Offi cer 2 January 2015 12 months 12 months

Non-executive Directors are appointed for a term of three years, subject to three months’ notice from either party. The dates of the Chairman’s and Non-executive Directors’ appointments are as follows: Non-executive Director Position Effective date of letter of appointment Unexpired term as at 31 December 2018 Nicola Brewer Non-executive Director 25 February 2016 2 months Ken Hanna Chairman 29 April 20181 2 years 4 months Barbara Jeremiah Non-executive Director 7 March 2017 1 year 2 months Uwe Krueger Non-executive Director 1 February 20181 2 years 1 month Diana Layfi eld Non-executive Director 1 May 20152 4 months Ian Marchant Non-executive Director 1 November 20161 10 months Miles Roberts Non-executive Director 7 March 2017 1 year 2 months

1 Replaces earlier letter of appointment. 2 Extended for a further term of one year with effect from 1 May 2018.

External appointments It is the Board’s policy to allow the Executive Directors to accept non-executive directorships of other quoted companies. Any such directorships must be formally approved by the Chairman of the Board. Directors are generally permitted to retain any earnings from these appointments. During the year, Chris Weston did not hold any external directorships of other quoted companies. He served as a Non-executive Director of the Royal Navy during the year. Fees for 2018 in relation to this appointment were £15,000. Heath Drewett did not hold any external directorships.

76 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information 77 ts, ts, life life ts, . t. In line nancial year). ts provided will exceed this level this level will exceed ts provided ts and local practice, role by ts vary and related travel ts (excluding the for introduced are ts which Benefi strategy Purpose and link to in the be competitive Designed to the individual is in which market and relocation Expatriate employed. a ensure designed to packages mobile management geographically business needs. to population related Operation benefi healthcare Includes car (or an a company cover, assurance appropriate, in lieu). Where allowance package, an expatriate provide would we local of any the cost bearing including benefi expatriate on any payable taxes and living allowances costs, relocation fees. school business related reasonable Any tax thereon) (including expenses if determined can be reimbursed benefi be a taxable to other eligible for are Directors Executive benefi similar on broadly wider workforce terms. Opportunity Benefi relative periodically reviewed and are market. to Benefi and tax equalisation payments taxes Executive to payable appropriate) where 20% of salary will not exceed Directors 10% of salary during (and did not exceed fi the most recent it is not anticipated practice, with market the cost circumstances that in normal of benefi years. three the next of 10% over the discretion retains The Committee in exceptional a higher cost approve to tax and/or relocation (e.g. circumstances where equalisation) or in circumstances control outside the Company’s factors increases (e.g. materially changed have costs provider premiums, in insurance or taxes). measures Performance None. Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko www.plc.aggreko.com ts can pension. They ned-contribution Pension strategy Purpose and link to benefi statutory relevant provide To in in the market and be competitive the individual is employed. which Operation a entitled to are Directors All Executive defi in lieu of all a cash payment take opt to or part of their pension. Opportunity 20% and 30% of between Contributions where of salary per annum except local practice. by limited the pension contribution hires, new For 20% of salary per annum. will be up to measures Performance None. ect ect the size

Purpose and link to strategy Purpose and link to talent and retain reward attract, To at an are base salaries ensuring by in the talent market(s) level appropriate individual. each to relevant Operation reviewed generally are Base salaries the appropriate In determining annually. into take of adjustment, we level performance; Company account: and responsibilities the individual’s the business; salary to contribution at relevant roles comparable for levels and salary increases comparators; the Group. across broadly more data is used benchmarking External with caution, but will refl Fixed pay Fixed Base salary Executive Directors: Directors: Executive in question. of the role and complexity equally important are relativities Internal level correct the when determining set base salaries. to at which Opportunity applied are base salaryAny increases of the annual in line with the outcome be to expected and generally review in line with those of the wider workforce, award may the Committee although in exceptional a higher increase refl as to (such circumstances in role). development £900,000. salaryAny will not exceed measures Performance good continued None, although considered is a factor performance salaries. when reviewing A summary of Aggreko’s remuneration policy approved by shareholders at the 2018 2018 the at shareholders by approved policy remuneration Aggreko’s of A summary Directors’ 2017 the to refer please policy, remuneration full the For below. out set is AGM website Company’s the on Report available Remuneration 2018 remuneration policy summary policy remuneration 2018 REMUNERATION CONTINUED 2018 remuneration policy summary continued

Variable pay Annual bonus scheme Long-term Incentive Plan Purpose and link to strategy Purpose and link to strategy Performance measures To focus Executive Directors on To align the interests of management The performance measures for the PSP achieving demanding annual targets with those of shareholders in growing will be based on Group performance relating to Group performance. the value of the business over the with at least 75% linked to Group long-term. fi nancial performance. Operation Performance measures and targets Vesting of awards is subject to The Committee has the discretion to are set at the start of the year and are performance conditions based on the reduce vesting levels if, exceptionally, weighted to refl ect the balance of long-term fi nancial performance of the they consider the strict application Group and, where appropriate, Group; the value of the awards is based of the performance conditions would business unit responsibilities for on both the proportion vesting and the produce a result inconsistent with our each Executive Director. movement in the share price over the remuneration principles, where the vesting period. formulaic outcome does not genuinely At the end of the year, the Committee refl ect the underlying performance of determines the extent to which these Operation the Group, or where necessary to avoid have been achieved. The Committee has The LTIP comprises a single Performance unintended consequences. the ability to exercise discretion to adjust Share Plan (PSP). for factors outside management control. The Committee also has the ability Awards are normally granted annually. to include additional or alternative Bonus payments are typically delivered Award levels and performance performance measures, weightings and/ as 75% in cash and 25% deferred into conditions are reviewed from time to or targets in future years to take account shares and released after three years. time to ensure they remain appropriate of the Group’s key strategic and Dividends will accrue on the deferred and aligned with shareholder interests. operational aims and targets, and share element. Awards normally vest after three years, business outlook at that time. Malus and/or clawback provisions apply subject to performance and continued Further details of the 2019 performance as described in the 2017 Directors’ offi ce or employment. Awards which measures proposed are set out on page 65 Remuneration Report. vest will be subject to a further holding period of two years. The holding period Opportunity will end early on a takeover, scheme The maximum annual bonus of arrangement or winding-up of Share ownership guidelines opportunity for Executive Directors the Company, upon the death is 175% of salary. The fi nancial element The Committee has a policy of of an individual or in exceptional of the bonuses start to be earned for encouraging Executive Directors to circumstances on such other date threshold performance (for which no acquire and retain a material number determined by the Committee. On bonus is paid). of shares in the Company, with the vesting, participants will be entitled objective of further aligning their Performance measures to the equivalent of any dividends on the long-term interests with those of Performance is assessed annually shares between grant and vesting or the other shareholders. The minimum with up to 30% (currently 20%) of the earlier of the date of exercise of an option requirement for Executive Directors maximum bonus potential based on and the expiry of any holding period. is 250% of salary. personal/strategic objectives aligned to Malus and/or clawback provisions apply the Group’s KPIs and the balance based to awards as described in the 2017 on appropriate Group and/or business Directors’ Remuneration Report. unit fi nancial performance. The current measure for fi nancial performance Opportunity is D-EPS, but may vary each year The PSP provides for a nil-cost depending on business context conditional award of shares worth up and strategy. to an aggregate limit of 250% of salary Further details of the performance per annum for Executive Directors. measures proposed for the 2019 annual bonus are set out in the Annual Remuneration Statement on page 65

78 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information 79 Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko ts example, (for ts in kind not ts are benefi ts. Overall, This Report was approved by the Board on 6 March 2019. on 6 March the Board by approved This Report was Jeremiah Barbara Chair Committee Remuneration for Non-executive Directors Directors Non-executive for and Chairman Incentives and benefi Incentives the and Directors Non-executive in do not participate Chairman receive or arrangements incentive in addition to other remuneration appropriate, where However, their fees. additional provide may the Company benefi and taxes costs of travel reimbursement receive may and the Chairman thereon), standard other market and/or healthcare benefi 20% of the annual exceed to expected year. in any fee t. Non-executive Directors’ Directors’ Non-executive fee and Chairman’s strategy Purpose and link to Non-executive and retain attract To with an and a Chairman Directors experience, of skills, degree appropriate of the knowledge and independence its business. and Group Operation Directors Non-executive for levels Fee the Board by reviewed generally are an comprises Remuneration annually. acting as a Non-executive for annual fee and serving of any as a member Director paid are Additional fees Committees. of a of service as Chairman in respect Senior Independent or as Committee Director. comprises remuneration The Chairman’s acting as Chairman, for an annual fee serving includes as Chairman which Committees. or as a member of any sets Committee The Remuneration subject remuneration, the Chairman’s when appropriate. review to is made reference fees, When reviewing of a similar in companies payable fees to information and complexity, size a number of remuneration by provided of the duties extent the surveys, time and the expected performed of the role. commitment business related reasonable Any can tax thereon) (including expenses be a to if determined be reimbursed benefi taxable Opportunity applied in line are increases fee Any of the annual review. with the outcome the maximum aggregate Currently all Non-executive for annual fee the Chairman, including Directors, Articles of in the Company’s provided Association is £900,000. metrics Performance None. Non-executive Directors and Chairman Directors Non-executive STATUTORY DISCLOSURES

Directors’ Report and Dividend payments and DRIP Rights and obligations Strategic Report The Dividend Reinvestment Plan (DRIP) attached to shares The Directors’ Report and Strategic allows shareholders to purchase Subject to applicable statutes (in this Report for the year ended 31 December additional shares in Aggreko with their section referred to as the Companies 2018 comprise pages 46 to 85 and pages dividend payments. Further information Acts) and to any rights conferred on the 1 to 45 of this report, together with the and a mandate can be obtained from holders of any other shares, any share sections incorporated by reference. We our Registrar, Link Asset Services, whose may be issued with or have attached have included some of the matters details are set out on page 149 and the to it such rights and restrictions as the normally included in the Directors’ shareholder information pages of our Company may by ordinary resolution Report which we consider to be of website at www.plc.aggreko.com. decide or, if no such resolution has been strategic importance in the Strategic passed or so far as the resolution does Report on pages 1 to 45. Specifi cally Share capital not make specifi c provision, as the Board these are: On 31 December 2018, the Company may decide. → Future business developments had in issue 256,128,201 Ordinary Shares 329 on page 10; and of 4 /395 pence each, 188,251,587 Voting 84 Deferred Shares of 9 /775 pence each, Subject to any special terms as to voting → Risk information on the use of 1 18,352,057,648 Deferred Shares of /775 fi nancial instruments on page 124. upon which any shares may be issued pence each, 182,700,915 Deferred Shares or may for the time being be held and 18 Disclosures in relation to Listing Rule of 6 /25 pence each and 573,643,383,325 to any other provisions of the Articles 1 LR 9.8.4R, where applicable, are included Deferred Shares of /306125 pence each of Association of the Company (‘the on pages 70 to 71 in relation to Long- comprising 29.43%, 40.77%, 0.56%, Articles’), on a show of hands every Term Incentive Plans and on page 82 29.20% and 0.04% respectively of the member who is present in person or in relation to the dividend waiver Company’s issued share capital. Details by proxy or represented by a corporate arrangements in place for our Employee of the changes in issued share capital representative at a general meeting Benefi t Trust. during the year are shown in Note 23 to of the Company has one vote. the Accounts on page 119. Both the Directors’ Report and Strategic On a poll, every member who is present Report have been presented in in person or by proxy or represented by accordance with applicable company Material share interests a corporate representative has one vote law, and the liabilities of the Directors As at 31 December 2018, the Company for every share of which he or she is the in connection with those reports are had received notifi cations of the holder. In the case of joint holders of a subject to the limitations and restrictions following major shareholdings, share the vote of the senior who tenders provided. Other information to be representing 3% or more of the voting a vote, whether in person or by proxy, disclosed in the Directors’ Report is given rights attached to the issued Ordinary is accepted to the exclusion of the votes in this section. Share capital of the Company: of the other joint holders and, for this purpose, seniority is determined by the Management report order in which the names stand in the register in respect of the joint holding. The Strategic Report and the Directors’ Report together include the ‘management report’ for the purposes of Disclosure and Transparency Number % of total Rule (DTR) 4.1.8R. Shareholder of shares voting rights The Capital Group Companies LLP 13,446,515 5.24 2019 Annual General Meeting AKO Capital LLP 12,781,545 4.99 The Company’s Annual General Meeting Standard Life Aberdeen plc 12,587,779 4.91 will be held at 11.00am on 25 April 2019 at 200 SVS, 200 St Vincent Street, Glasgow Baillie Gifford 12,584,169 4.91 G2 5RQ. The Notice of Meeting is set out Mackenzie Financial Corporation 11,216,580 4.37 on pages 141 to 146 of this document and Prudential Plc 9,351,326 3.65 is also avilable on the shareholder information pages of our website at Deutsche Bank AG 8,535,344 3.33 www.plc.aggreko.com. Between 31 December 2018 and 5 March 2019, the Company received the following notifi cations of major shareholdings: Dividends Number % of total The interim dividend of 9.38 pence per Shareholder Date of shares voting rights Ordinary Share was paid on 2 October Lion Investment Partners LLP 06/02/2019 13,307,481 5.20 2018. The Directors recommend a fi nal dividend of 17.74 pence per Ordinary The Directors are not aware of any other material interests amounting to 3% or Share in respect of the year, making more in the share capital of the Company. a total for the year of 27.12 pence per Ordinary Share (2017: 27.12 pence), payable on 24 May 2019 to shareholders on the register at the close of business on 23 April 2019.

80 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information 81 in the the contrary ed to Certain restrictions may from may restrictions Certain time and laws time be imposed by to insider example, (for regulations in particular operate we laws), trading requires which code dealing a share and certain of the Company Directors of obtain the approval to employees in the dealing before the Company and Ordinary Shares Company’s not are Shares The Deferred in accordance except transferable ‘Powers headed with the paragraph issuing or the Company to in relation below shares’ its own buying back of the consent or with the written Directors.

→ → Articles of Association on our website available Our Articles are . Unless at www.plc.aggreko.com specifi expressly Articles, be amended the Articles may of the Company’s a special resolution by shareholders. Appointment and replacement of Directors the appointment and The rules for contained are of Directors replacement include: Articles. They in the Company’s must not be the number of Directors than 15; the Board or more less than two be a Director; person to appoint any may the Board by so appointed Director any only until the next ce shall hold offi meeting and shall then be general must Director election; each eligible for Annual at the third ce fromretire offi the Annual Meeting after General was he/she Meeting at which General in line with the However, last elected. all Code, Governance 2016 UK Corporate annual election will stand for Directors at the 2019 AGM. Restrictions on transfer of Restrictions on transfer securities in the Company the transfer on no restrictions are There that: except in the Company, of securities of any is not aware The Company holders of between agreements in restrictions result that may securities of securities. on the transfer Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko ned to failure ned in the Articles) after Variation of rights Variation of the provisions the Subject to any to attached Acts, rights Companies either with be varied may of shares class of the holders of in writing the consent in nominal quarters not less than three of that class of the issued shares value held of that class shares any (excluding or with the sanction shares) as Treasury passed at a of a special resolution meeting of the holders general separate The necessary quorum of those shares. general separate such any applying to persons holding or meeting is two not less than one proxy by representing of the issued in nominal value third shares any (excluding of the class shares shares), held as Treasury of that class meeting one adjourned but at any proxy in person or by holder present held the number of shares (whatever a quorum; every him) will constitute by in present of the class holder of shares shares any (excluding proxy person or by is shares) held as Treasury of that class every for one vote entitled on a poll to him (subject to held by of the class share any to attached or restrictions rights any holder of shares and any of shares) class proxy in person or by present of the class poll. demand a may in the Articles) if such a person has been in the Articles) if such (as notice served with a restriction defi with information the Company provide in those shares interests concerning under the be provided to required Acts. Companies On a return of capital on a winding- On a return intra-Group any up (excluding basis), on a solvent reorganisation entitled are Shares holders of Deferred paid the nominal capital paid up be to Deferred as paid up on such or credited the holders of the to paying after Shares the nominal capital Ordinary Shares as paid up on paid up or credited them held by the Ordinary Shares with the sum of together respectively, Ordinary Share. on each £100,000,000 deduct from may The Board any to dividend or other monies payable on or in the Company a member by all sums of money shares of any respect him to by payable presently (if any) of calls or on account the Company of the otherwise of shares in respect also withhold may The Board Company. part of all or any of any payment in dividends or other monies payable from shares of the Company’s respect a (as defi interest person with a 0.25% xed xed nancial xed dividend xed ned in the ned in the Articles) the fi ed by nancial position of the acts in es its payment. If the Board on any other class of shares ranking ranking of shares other class on any those shares. passu with or after pari to no right confer Shares The Deferred ts of the Company. in the profi participate Subject to the provisions of the provisions the Subject to by may Acts, the Company Companies fromordinary resolution time time to with dividends in accordance declare of the members, rights the respective the amount but no dividend can exceed the Board. by recommended of the the provisions Subject to pay may Acts, the Board Companies the to dividends as appear interim such be justifi to Board Dividends and other distributions the Board by settled at intervals rate the fi whenever liability it shall not incur any good faith, loss any for shares the holders of any to of the in consequence suffer may they or fi of an interim payment Company, in the opinion of the Board, in the opinion of the Board, Company, justifi position of the Company and may and may position of the Company at a fi dividend payable any also pay No member is, unless the Board the Board No member is, unless otherwise entitled in respect decides, (either vote to them held by share of any a corporate by or proxy personally or by meeting general at any representative) separate or at any of the Company meeting of the holders of any general if any in the Company of shares class payable calls or other sums presently remain of that share them in respect by a person with a are unpaid or if they (as defi interest 0.25% Restrictions on voting a with been served have and they (as defi notice restriction The holders of the Deferred Shares are are Shares The holders of the Deferred of any notice receive not entitled to or Company meeting of the general such at any or vote speak attend, to meeting. Articles) after failure to provide the provide to failure Articles) after concerning with information Company be to required in those shares interests Acts. the Companies under provided of any is not aware The Company holders of between agreement in restrictions result that may securities rights. on voting STATUTORY DISCLOSURES CONTINUED

A Director may be removed by special Powers in relation to the Rights under the employee resolution of the Company. In addition, Company issuing or buying share scheme the offi ce of a Director must be vacated if: (i) they resign their offi ce by notice back its own shares Estera Trust (Jersey) Limited, as Trustee in writing delivered to the offi ce or The Directors were granted authority of the Aggreko Employees’ Benefi t Trust, tendered at a meeting of the Board; at the last Annual General Meeting holds 0.76% of the issued share capital or (ii) by notice in writing they offer to held in 2018 to allot relevant securities of the Company as at 5 March 2019 on resign and the Board resolves to accept up to a nominal amount of £4,126,149. trust for the benefi t of the employees such offer; or (iii) their resignation is That authority will apply until the earlier and former employees of the Group and requested by all of the other Directors of 30 June 2019 or at the conclusion of their dependants. The voting rights in and all of the other Directors are not less the Annual General Meeting for 2019. relation to these shares are exercised by than three in number; or (iv) a registered At this year’s Annual General Meeting, the Trustee and there are no restrictions medical practitioner who is treating that shareholders will be asked to grant an on the exercise of the voting of, or the Director gives a written opinion to the authority to allot relevant securities up acceptance of any offer relating to, the Company stating that that Director has to a nominal amount of £4,126,149, such shares. The Trustee is obliged to waive become physically or mentally incapable authority to apply until the end of next all dividends on the shares unless of acting as a Director and may remain year’s Annual General Meeting (or, if requested to do otherwise by the so for more than three months; or (v) earlier, until the close of business on Company in writing. by reason of a Director’s mental health, 30 June 2020). a court makes an order which wholly Special resolutions will also be proposed Going concern and viability or partly prevents that Director from to renew the Directors’ power to make statements personally exercising any powers non-pre-emptive issues for cash up to The going concern statement is included or rights which that Director would a nominal amount of £1,237,844. otherwise have; or (vi) they are absent on page 101 of the fi nancial statements. without the permission of the Board The Company was also authorised The viability statement is included from meetings of the Board (whether at the Annual General Meeting held on page 45 of the Strategic Report. or not an alternate Director appointed in 2018 to make market purchases of by him attends) for six consecutive up to 25,612,820 Ordinary Shares. This Change of control months and the Board resolves that authorisation will expire on the earlier his offi ce is vacated; or (vii) they become of the conclusion of the Annual General The Company has in place a number bankrupt or compound with their Meeting of the Company for 2019 or of agreements with advisers, fi nancial creditors generally; or (viii) they are 30 June 2019. institutions and customers which prohibited by law from being a Director; contain certain termination rights which A special resolution will also be proposed would have an effect on a change of or (ix) they cease to be a Director by at this year’s Annual General Meeting virtue of the Companies Acts or are control. The Directors believe these to renew the Directors’ authority to agreements to be commercially sensitive removed from offi ce pursuant to repurchase the Company’s Ordinary the Articles. and that their disclosure would be Shares in the market. The authority will seriously prejudicial to the Company; be limited to a maximum of 25,612,820 accordingly, they do not intend to Directors’ confl icts of interest Ordinary Shares and sets the minimum disclose specifi c details of these. The Company has procedures in place and maximum prices which may In addition, all of the Company’s share for monitoring and managing confl icts be paid. schemes contain provisions which, in of interest. Should a Director become The Company may at any time, without the event of a change of control, would aware that they, or their connected obtaining the sanction of the holders of result in outstanding options and awards parties, have an interest in an existing the Deferred Shares: becoming exercisable, subject to the or proposed transaction with Aggreko, rules of the relevant schemes. they should notify the Board in writing (a) Appoint any person to execute on or at the next Board meeting. Directors behalf of any holder of Deferred There are no agreements between the have a continuing duty to update any Shares a transfer of all or any of Company and its Directors or employees changes to these confl icts. the Deferred Shares (and/or an providing for compensation for loss agreement to transfer the same) of offi ce or employment that occurs to the Company or to such person because of a takeover bid. Powers of the Directors as the Directors may determine, Subject to the provisions of the in any case for not more than one Disclosure of information Companies Acts, the Articles and to any penny for all the Deferred Shares to the Company’s auditor directions given by the Company in then being purchased from him/her; general meeting by special resolution, and In accordance with Section 418 of the the business of the Company is Companies Act 2006, the Directors who managed by the Board, which may (b) Cancel all or any of the Deferred held offi ce at the date of approval of this exercise all the powers of the Company Shares so purchased by the Directors’ Report confi rm that, so far as whether relating to the management Company in accordance with they are each aware, there is no relevant of the business of the Company or not. the Companies Acts. audit information (as defi ned by Section 418(3) of the Companies Act 2006) of In particular, the Board may exercise all Securities carrying which the Company’s auditor is unaware; the powers of the Company to borrow special rights and each Director has taken all the steps money and to mortgage or charge all that they ought to have taken as a or any part of the undertaking, property No person holds securities in the Director to make themselves aware of and assets (present and future) and Company carrying special rights with any relevant audit information and to uncalled capital of the Company and regard to control of the Company. establish that the Company’s auditor to issue debentures and other securities, is aware of that information. whether outright or as collateral security for any debt, liability or obligation of the Company or any third party.

82 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information 83 2017 2017 eet. 21,414 135,652 2,954,104 17,692,195 17,692,195 14,716,676 17,556,543 eet emissions eet 2018 2018 eet emissions. eet 17,017 eet emissions eet of the fl ciency eet. However, However, eet. 126,277 6,259,024 6,999,628 13,149,392 13,275,669 13,275,669 the 2018 for cant change under eet) fuel consumption assumption conversions ciency eet eet/non-fl eet eet/non-fl e, a decrease of 25% over 2017. In line 2017. over of 25% e, a decrease e/year e/year 2 2 2 assumptions in the conversion ciency ndings from of the GHG analysis Total of tonnes 13,275,669 emitted In 2018, we CO with previous years, the results show that show the results years, with previous from99% of GHG emissions arise the eet when it is out on of our fl operation driving main factors three are There rent. our annual GHG emissions: the fuel type of their use; the pattern our customers usage; and the fuel effi is a there As can be seen above, in fl cant decrease signifi accurate the use of more This is due to effi fuel consumption of running hours to within Rental diesel generators for (litres) Solutions Solutions (RS) and Power (PSI). In 2018,Industrial as part of our launched we ongoing digital strategy calculate accurately more to a project the emissions from assets. our thermal Using the data from assets our 15,000 our central to connected are which and our advanced analytics platform able to were analytics we capability a provided a model which construct 17 of our for load factor accurate more used have we Previously node sizes. for load factor an assumed average was but our model node size each based on actual values provide able to data fromautomated our assets. These create used to were load factors accurate effi new the nodes, and also for the 17 tested for of nodes within RS and PSI remainder using a ‘nearest neighbour’ approach. in of this improvement The outcome in fl is a decrease accuracy PSI, as for RS and 36% for of 46% the 2017 assessment. to compared Another signifi is a shift in emissions fromresults Scope has Aggreko 3. Historically, Scope 1 to emissions from the direct reported (fl generator fl the entire 1 for Scope operating of Aggreko’s review recent the need to has prompted practices a portionre-assign of fl from 3, with effect as Scope 2018 the an takes Aggreko reporting period. tCO 1 Scope 2 Scope Total GHG emissions Total by fl tCO Fleet Non-fl Scope 3 Scope The tables below present the principal the principal present The tables below fi years: two previous GHG emissions Total scope GHG protocol by Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko t ned-benefi third-party eet by ning, transportation ning, eet (upstream emissions are emissions are eet (upstream etc.); other Scope 3 emissions include 3 emissions include etc.); other Scope transport of the fl and rail (air business travel vehicles; and water and waste etc); travel supply/treatment. pension fund are controlled by the by controlled pension fund are Scheme Pension of Aggreko Directors held separately are they Limited; Trustee from and the assets of the Company fund independent by invested funds managers. These segregated in the directly cannot be invested been have trustees Four Company. and, in the Company by appointed member-nominated addition, two This fund been appointed. have trustees joining employees new to closed was UK new 2002; 1 April after the Group membership offered now are employees Plan. Pension Personal of a Group gas emissions Greenhouse Act 2006, In line with the Company’s reporting on our greenhouse are we used the have gas (GHG) emissions. We method outlined in the GHG Protocol and Reporting Accounting Corporate edition), using the (revised Standard 2 calculation location-based Scope with the latest method, together fromemission factors public recognised the UK Department including sources and Industrial Business, Energy for US Energy (BEIS), the Strategy (EIA), the Administration Information Agency Protection US Environmental and the Intergovernmental (EPA) (IPCC). Change on Climate Panel from are 1 emissions Scope those by and operated activities owned fuel combusted and include Aggreko, the far eet (by fl generator in the Aggreko proportion of emissions); fuel greatest boilers; premises in Aggreko combusted owned in Aggreko fuel combusted refrigerantvehicles; gas lost from and A/C units or vehicles; Aggreko 1 emissions Scope emissions of SF6. which be those over to considered are has the most control. the Company from 2 emissions are Scope electricity premises. owned in Aggreko consumed of the consumption the Although premises, at Aggreko occurs electricity a by itself is generated the electricity station) and the power party (i.e. third actual emissions from the production without occur of the electricity this why hence control, Aggreko’s scope. is a separate everything else, 3 emissions are Scope of the upstream primarily and consist emissions from in the fuel combusted fl Aggreko from with the all activities associated so it is actuallycombusted, fuel before refi its extraction, Pensions defi The assets of the UK cers cers duciary duty duty duciary ed person. ed cers subject liability, against any cer cer, insurance against any liability. liability. against any insurance cer, and offi and the Directors cers As we continue to grow our business in grow to continue As we that recognise we countries, developing in many a concern are human rights have We operate. we in which regions all of our stakeholders to a responsibility with that all of our interactions ensure to of the standards them meet or exceed set out in our ethics policies, compliance equal opportunities, health to approach policies, environmental and safety mechanisms, policies and grievance in detail explained are all of which this report. In addition, throughout talent to in relation manage risks we and safety management and health management framework.within our risk a to linked, are While all these matters human rights, to or lesser extent, greater them as part address of our to prefer we than as a separate rather operations, all evaluate to continue issue. We and do not think that risks potential issues material present human rights our business. for Human rights Equal opportunities promoting to is committed Aggreko equal opportunities all, irrespective for gender or any ethnic origin, of disability, that do not affect other considerations their job. perform to ability a person’s training, recruitment, Our policies for of and promotion development career based on the suitability are employees those who are of the individual and give with the able disabled equal treatment Employees appropriate. bodied where are joining the Group disabled after alternative for suitable training given or elsewhere. with Aggreko employment of its subsidiaries. In addition, the Company may purchase purchase may In addition, the Company or other Director any and maintain for offi maintains appropriate The Company against legal action cover insurance and against its Directors brought offi Indemnity of offi Indemnity Under Article 154 of the Articles, the or Director indemnify may any Company other offi Acts. of the Companies the provisions to the to an indemnity The Articlesgrant the for liability against any Directors where of legal proceedings costs favour. in their judgement is given by conferred Under the authority has granted Article 154, the Company and offi Directors indemnities to of the Company and its subsidiaries. and its subsidiaries. of the Company any The indemnities do not apply to out of fraud, arises which claim default, of fi or breach negligence the indemnifi or trust by STATUTORY DISCLOSURES CONTINUED

operational control approach to its Important events since Revenue intensity ration tCO e/ Greenhouse Gas Assessment, as 2 31 December 2018 described in the GHG Protocol Corporate thousand £ GBP Accounting and Reporting Standard There have been no important events affecting the Company or any subsidiary (revised edition). Under the operational 2018 7.57 since 31 December 2018. control approach, assets (such as the 2017 10.42* generator fl eet) are considered to fall 2016 11.89 within Scope 1 if the reporting company Political donations 2015 11.76 “has the full authority to introduce and 2014 11.84 No political donations were made during implement its operating policies at the fi nancial year (2017: nil). the operation”. This is true for Power * Note the 2017 value has changed from 10.22 due Solutions Utility, where Aggreko sells to accounting changes. power to specifi ed clients, with Aggreko Approval of the Strategic personnel maintaining presence on the While normalising emissions by Revenue Report and Directors’ Report can be informative we feel that running project site to control the day-to-day The Strategic Report set out on pages hours (the number of hours our fl eet is running of the equipment to meet the 1 to 45 and Directors’ Report set out on operational for) is a more suitable power demand. Within Rental Solutions pages 46 to 85 were approved by the intensity metric to measure year-on-year (and Power Solutions Industrial) Aggreko Board on 6 March 2019 and have been performance. The chart below shows rents out fl eet equipment to customers signed by the Company Secretary on relative emissions using the running for short to medium-term hire. Under behalf of the Board. this contract the equipment is delivered hours intensity metric for reporting years to site by Aggreko at which point the 2014 to 2018. customer takes over operational control for the duration of the lease. As outlined Running hour intensity ration tCO2e/ in the GHG Protocol, the direct emissions running hour from the fl eet rented in this way would be considered Scope 1 for the lessee 2018 0.25 Peter Kennerley and Scope 3 for the lessor (Aggreko). 2017 0.34 Group Legal Director and The result is that fl eet emissions within 2016 0.34 Company Secretary Power Solutions Utility remain as Scope 1, 2015 0.34 and fl eet emissions within Power 6 March 2019 2014 0.33 Solutions Industrial and Rental Solutions are now categorised as Scope 3. In 2015, we undertook an Energy In line with best practice, our GHG Saving Opportunities Scheme (ESOS) accounting systems include an estimate assessment in line with the UK of the upstream GHG emissions Environment Agency requirements and associated with fuel supply chains; can confi rm that we are compliant with in 2018, this contributed 16% of fl eet the regulations. Our next assessment is combustion emissions, accounting scheduled for 2019. for 30% of Scope 3 emissions. In addition, Aggreko’s Northern Europe In terms of the non-fl eet activities, business achieved CEMARS (Carbon emissions from activities associated with and Energy Management Reduction) premises use (energy, waste, water and Certifi cation in 2017. CEMARS allows refrigerant gases), business travel and large organisations or high emissions company vehicles have all decreased industries to measure their greenhouse compared to 2017. The most signifi cant gas emissions, put in place plans to reduction is observed within premises reduce them and have both of these emissions (-38%) due to greatly reduced steps independently certifi ed. It is the loss of refrigerant gases. Conversely, fi rst global greenhouse gas certifi cation emissions from third-party logistics have scheme to be accredited to the increased by 68%, largely due to higher internationally recognised ISO 14065 volume of road and sea freight reported standard. Aggreko was the fi rst rental by Jebel Ali Operations. company to meet this standard. The intensity ratio expresses the GHG impact per unit of physical activity or Branches economic output, with a declining Subsidiaries of the Company have intensity ratio refl ecting a positive established branches in a number of performance improvement. In 2013, different countries in which they operate. we chose to report Revenue Intensity as a suitable metric to measure year on year performance. Auditor Resolutions re-appointing KPMG As can be seen from the fi rst chart, as the Company’s and Group’s relative emissions (expressed in tCO e/ 2 auditor and authorising the Audit k£) have decreased signifi cantly (27%) Committee to determine its from 2017 due to the aforementioned remuneration will be proposed at absolute reduction in fl eet emissions. the Annual General Meeting.

84 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information 85 cer t or loss of prepared nancial statements, and profi nancial position the Company and the undertakings the Company taken in the consolidation included as a whole and The fi with the applicable set in accordance a true give standards, of accounting the assets, liabilities, of view and fair fi Report a fair includes The Strategic and of the development review of the business and performance the position of the issuer and the in the undertakings included as a whole, taken consolidation of the with a description together and uncertainties risks principal face. that they

nancial report nancial → → We consider the Annual Report consider and We is fair, as a whole, taken Accounts, and understandable and balanced necessary the information provides assess the Group’s to shareholders for business position and performance, model and strategy. 2019. 6 March of the Board, By order Hanna Ken Chairman Chris Weston Offi Chief Executive Responsibility statement of the of statement Responsibility of the in respect annual Directors fi best of our the that to rm confi We knowledge: Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko nancial nancial information information nancial comply nancial statements nancial position of the parent Assess the Group and parent and parent Assess the Group as continue to ability Company’s as disclosing, a going concern, to related applicable, matters and going concern basis of Use the going concern intend either they unless accounting or the parent the Group liquidate to or operations, cease to or Company but to alternative no realistic have do so.

from differ may nancial statements → → Company and enable them to ensure ensure to and enable them Company that its fi Act 2006. They with the Companies internal such for responsible are is necessary determine as they control of fi enable the preparation to free that are statements from material fraud whether due to misstatement, or for responsibility general have and error, open reasonably as are steps such taking of the the assets safeguard them to to fraud and detect prevent and to Group and other irregularities. and regulations, Under applicable law for also responsible are the Directors Report, Directors’ a Strategic preparing Remuneration Report, Directors’ Governance Report and Corporate that law with that comply Statement and those regulations. the for responsible are The Directors of the and integrity maintenance and fi corporate website. on the Company’s included the in the UK governing Legislation and dissemination of preparation fi legislation in other jurisdictions. The Directors are responsible for keeping keeping for responsible are The Directors that are records accounting adequate the parent and explain show cient to suffi disclose and transactions Company’s time at any accuracy with reasonable the fi nancial nancial nancial nancial nancial statements statements nancial nancial statements statements nancial statements, nancial nancial statements, statements, nancial nancial statements statements nancial that period. t or loss for

statements, state whether applicable state statements, been have standards UK accounting material any subject to followed, and explained departures disclosed fi company in the parent statements state whether they have been have whether they state with IFRSs in accordance prepared the EU by as adopted fi Company the parent For Make judgements and estimates and estimates judgements Make reliable relevant, reasonable, that are and prudent fi the Group For Select suitable accounting policies Select suitable accounting and then apply them consistently

fi each for nancial statements in accordance with UK accounting with UK accounting in accordance FRS 101 Reduced including standards, Framework. Disclosure must the Directors law Under company the fi not approve a give ed that they satisfi are unless they of affairs of the state view true and fair and Company and parent of the Group of their profi and of the Group each In preparing fi Company parent to: required are the Directors year. Under that law they are required to to required are they Under that law year. fi Group the prepare with International in accordance Reporting as Financial Standards Union (IFRSs the European by adopted and applicable the EU) by as adopted the prepare to elected and have law fi Company parent → → → → statements in accordance with in accordance statements and regulations. applicable law to the Directors requires law Company Company and parent Group prepare fi The Directors are responsible for for responsible are The Directors the Annual Reportpreparing and the fi Company and parent Group responsibilities Statement of Directors’Statement INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF AGGREKO PLC

1 Our opinion is unmodifi ed We have audited the fi nancial statements of Aggreko Plc (“the Company”) for the year ended 31 December 2018 which comprise the Group income statement, Group statement of comprehensive income, Group balance sheet, Group cash fl ow statement, Group statement of changes in equity, and the related notes, including the accounting policies in Note 1 and the Company balance sheet, Company statement of comprehensive income, Company statement of changes in equity, and the related notes, including the accounting policies in Note 31. In our opinion: → the fi nancial statements give a true and fair view of the state of the Group’s and of the parent Company’s affairs as at 31 December 2018 and of the Group’s profi t for the year then ended; → the Group fi nancial statements have been properly prepared in accordance with International Financial Reporting Standards as adopted by the European Union; → the parent Company fi nancial statements have been properly prepared in accordance with UK accounting standards, including FRS 101 Reduced Disclosure Framework; and → the fi nancial statements have been prepared in accordance with the requirements of the Companies Act 2006 and, as regards the Group fi nancial statements, Article 4 of the IAS Regulation. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities are described below. We believe that the audit evidence we have obtained is a suffi cient and appropriate basis for our opinion. Our audit opinion is consistent with our report to the audit committee. We were fi rst appointed as auditor by the shareholders on 27 April 2016. The period of total uninterrupted engagement is for the three fi nancial years ended 31 December 2018. We have fulfi lled our ethical responsibilities under, and we remain independent of the Group in accordance with, UK ethical requirements including the FRC Ethical Standard as applied to listed public interest entities. No non-audit services prohibited by that standard were provided.

2 Key audit matters: our assessment of risks of material misstatement Key audit matters are those matters that, in our professional judgment, were of most signifi cance in the audit of the fi nancial statements and include the most signifi cant assessed risks of material misstatement (whether or not due to fraud) identifi ed by us, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. We summarise below the key audit matters, in decreasing order of audit signifi cance, in arriving at our audit opinion above, together with our key audit procedures to address those matters and, as required for public interest entities, our results from those procedures. These matters were addressed, and our results are based on procedures undertaken, in the context of, and solely for the purpose of, our audit of the fi nancial statements as a whole, and in forming our opinion thereon, and consequently are incidental to that opinion, and we do not provide a separate opinion on these matters.

The risk Our response Recoverability of Subjective judgement – certain customers of the Our procedures included: Power Solutions Power Solutions Utility business operate in territories → Our sector experience: using our sector experience, Utility overdue with volatile regimes and adverse macroeconomic assessing and challenging the Directors’ receivables and conditions where the risk of customer default (the judgement as to the likely recoverable amount of accrued income customer often being the government) is high. the receivables, which includes seeking evidence in respect of In these territories, cash receipts are volatile and of the status of receivables from the latest certain countries unpredictable due to factors such as regime communications with the relevant customer including Yemen, change and economic stress, resulting in signifi cant (including deposits and guarantees) where Venezuela, Brazil, judgement being applied in the Group’s assessment available, considering the Group’s previous Zimbabwe, Chad, of the recoverability of receivables (both trade experience of recovery, considering any non- Mozambique, receivables and accrued income) from customers corroborating evidence and our knowledge of Angola, Mali in these territories. in-country exposures; and Benin We note this risk is in relation to ‘certain’ PSU debtors → Tests of details: Assessing post year end debt Refer to page 57 such as Yemen, Venezuela, Brazil, Zimbabwe, Chad, collection by vouching receipts to supporting (Audit Committee Mozambique Angola, Mali and Benin those being the documentation and considering evidence of report), page 102 receivables that we consider give rise to our key audit planned payments; and (accounting policy) matter. We consider the risk to have increased during and page 114 the year given the £16 million increase in past due → Assessing transparency: Assessing the adequacy (fi nancial total PSU debtors highlighted in note 17. of the Group’s disclosures about the degree of disclosures) estimation involved. The effect of these matters is that, as part of our risk Risk vs 2017: µ assessment, we determined that the recoverability Our results of certain Power Solutions Utility overdue receivables → We found the carrying value of the trade and accrued income in respect of certain countries receivables and accrued income noted opposite outlined above has a high degree of estimation to be acceptable (2017: acceptable). uncertainty, with a potential range of reasonable outcomes greater than our materiality for the fi nancial statements as a whole, and possibly many times that amount.

86 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information 87 cant areas areas cant nancial 25% (2017: 7%) (2017: 25% 75% (2017: 93%) (2017: 75% Net Assets an audit for require cant enough to Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko nancially signifi nancially Our tax expertise: assessing, together with our with assessing, together Our tax expertise: and local tax specialists, the international own tax the ongoing to tax position in relation Group’s inspectingassessment in Bangladesh, relevant and legal with the tax authority correspondence the and challenging opinions and analysing used conclusion likely judgement about the based on our the tax provision determine to of the application and experience knowledge the by and local legislation of the international and courts; and authority relevant assessing the adequacy Assessing transparency: tax and of in respect disclosures of the Group’s uncertain tax positions. in the Group of tax provisioning the level found We acceptable). (2017: be acceptable to and Company

Our procedures included: Our procedures Our results → → → Our response Profi tax t before Profi 23% (2017: 5%) (2017: 23% 95%) 77% (2017: nancial within these. misstatement of material cant risks Revenue 77% (2017: 77%) 77% (2017: t before tax, of which it represents 4.9% (2017: 5%). Materiality for the parent company fi company the parent for Materiality 4.9% 5%). (2017: it represents tax, of which t before ed misstatements that warranted reporting on qualitative grounds. This level was selected and selected was This level grounds. reporting on qualitative that warranted ed misstatements as a whole, and possibly many nancial statements statements is that the eventual resolution of the of the resolution is that the eventual statements is at an amount with the tax authorities matter held. the provision to different materially is that, as part of our risk of this matter The effect in that the provision determined assessment, we the to in relation the ongoing dispute relation of degree Bangladesh tax assessment has a high of range with a potential estimation uncertainty, the for than our materiality greater outcomes fi times that amount. Subjective judgement – provision for tax for – provision judgement Subjective make to the Directors require contingencies in tax risks to in relation judgements and estimates in ongoing dispute the particular to in relation in Bangladesh. This is a tax assessment to relation and the complexities due to highly judgemental legislation. tax uncertainties and international of local take and may is in court proceedings The matter fi the to The risk resolve. to years many them. to c interest ³´ nancial Full audit Full Scoped out of our auditScoped 23%) (2017: 23% The remaining 23% of total group revenue, 23% of group profi t before tax and 25% of total group assets is represented by a by assets is represented group of total tax and 25% t before profi of group 23% revenue, group of total 23% The remaining group revenue, group of total any than 7% of more individually represented none of which number of reporting components, re-examine to level group at an aggregated analysis performed we these components assets. For group tax or total t before profi no signifi were our assessment that there 3 Our application of materiality and an overview of the scope of our audit of our audit of the scope and an overview 3 Our application of materiality with reference million), determined £9.8 million (2017: set at £9.0 as a whole was nancial statements fi the group for Materiality profi of group a benchmark to disclosures) 2017: Risk vs The risk and Consolidated company parent provisions taxation the to in relation ongoing dispute a tax to in relation assessment in Bangladesh 57 page to Refer Committee (Audit report), 103 page policy) (accounting and page 110 (fi statements as a whole was set at £6.5 million (2017: £7 million) based on component materiality. This is lower than we would would than we This is lower materiality. £7 component million) based on (2017: million set at £6.5 was as a whole statements of this 1.4%) (2017: 1.5% net assets, and represents of company a benchmark to with reference determined otherwise have benchmark. in £450,000, ed exceeding identifi misstatements or uncorrected corrected any Committee the Audit report to to agreed We other identifi any addition to completed team back. The group be reported to the information and above detailed risks the relevant including be covered, to the approved audit team The Group company. the parent in Dubai, the UK and US including on components audit work le of the Group profi and risk the mix of size to from regard ranged million, having which £6.5 materialities, component to £10,000 not individually fi were not included The components the components. across addressed. be that needed to c individual risks specifi and did not present reporting purposes, group in the planning meeting and assess the audit participate location in Dubai to the component visited audit team The Group Dubai and Russia. Brazil, Australia, in Argentina, auditors also held with the component calls were Telephone and strategy. risk were ndings from audit team the Group to the audit reported discussed, the fi were and strategy On these calls, the audit risks auditor the component by then performed was audit team the Group by required further detail, and any work discussed in more as relevant. below: illustrated the percentages for accounted of our work within the scope The components agreed with the Audit Committee as, given the nature and scale of operations, adjustments under this level were not deemed were this level adjustments under and scale of operations, the nature as, given Committee with the Audit agreed be of specifi to The Group audit team instructed component auditors in Argentina, Australia, Brazil, Dubai and Russia as to the signifi Dubai and Russia as to Brazil, Australia, in Argentina, auditors component instructed audit team The Group INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF AGGREKO PLC CONTINUED

4 We have nothing to report Based on this work, we are required to Disclosures of principal risks and on going concern report to you if: longer-term viability Based on the knowledge we acquired → we have anything material to add or The Directors have prepared the during our fi nancial statements audit, draw attention to in relation to the fi nancial statements on the going we have nothing material to add or draw Directors’ statement in Note 1 to the concern basis as they do not intend to attention to in relation to: liquidate the Company or the Group or Financial statements on the use of the to cease their operations, and as they going concern basis of accounting → the Directors’ confi rmation within have concluded that the Company’s and with no material uncertainties that page 45 that they have carried out a the Group’s fi nancial position means may cast signifi cant doubt over the robust assessment of the principal that this is realistic. They have also Group and Company’s use of that risks facing the Group, including concluded that there are no material basis for a period of at least twelve those that would threaten its business uncertainties that could have cast months from the date of approval model, future performance, solvency signifi cant doubt over their ability to of the fi nancial statements; or and liquidity; continue as a going concern for at least → the related statement under the → the principal risks and uncertainties a year from the date of approval of Listing Rules set out on page 32 is disclosures describing these risks the fi nancial statements (“the going materially inconsistent with our and explaining how they are being concern period”). audit knowledge. managed and mitigated; and Our responsibility is to conclude on We have nothing to report in these → the Directors’ explanation in the the appropriateness of the Directors’ respects, and we did not identify going assessment of prospects and viability conclusions and, had there been a concern as a key audit matter. statement of how they have assessed material uncertainty related to going the prospects of the Group, over what concern, to make reference to that in 5 We have nothing to report period they have done so and why this audit report. However, as we cannot they considered that period to be predict all future events or conditions on the other information in appropriate, and their statement as and as subsequent events may result in the Annual Report to whether they have a reasonable outcomes that are inconsistent with The Directors are responsible for the expectation that the Group will be judgements that were reasonable at the other information presented in the able to continue in operation and time they were made, the absence of Annual Report together with the meet its liabilities as they fall due reference to a material uncertainty in fi nancial statements. Our opinion on over the period of their assessment, this auditor's report is not a guarantee the fi nancial statements does not cover including any related disclosures that the Group and the Company will the other information and, accordingly, drawing attention to any necessary continue in operation. we do not express an audit opinion or, qualifi cations or assumptions. In our evaluation of the Directors’ except as explicitly stated below, any Under the Listing Rules we are required conclusions, we considered the inherent form of assurance conclusion thereon. to review the assessment of prospects risks to the Group’s and Company’s Our responsibility is to read the other and viability statement. We have nothing business model and analysed how information and, in doing so, consider to report in this respect. those risks might affect the Group’s whether, based on our fi nancial Our work is limited to assessing these and Company’s fi nancial resources or statements audit work, the information ability to continue operations over the matters in the context of only the therein is materially misstated or knowledge acquired during our fi nancial going concern period. The risks that we inconsistent with the fi nancial considered most likely to adversely affect statements audit. As we cannot predict statements or our audit knowledge. all future events or conditions and as the Group’s and Company’s available Based solely on that work we have not fi nancial resources over this period were: subsequent events may result in identifi ed material misstatements in the outcomes that are inconsistent with → Global macroeconomic uncertainty other information. judgments that were reasonable at the resulting in reduced demand; and Strategic Report and Directors’ Report time they were made, the absence of → Market dynamics in the Power Based solely on our work on the other anything to report on these statements Solutions Utility business impacting information: is not a guarantee as to the Group’s and Company’s longer-term viability. on returns. → we have not identifi ed material As these were risks that could potentially misstatements in the Strategic Report Corporate governance disclosures cast signifi cant doubt on the Company's and the Directors’ Report; We are required to report to you if: ability to continue as a going concern, → in our opinion the information given → we have identifi ed material we considered sensitivities over the level in those reports for the fi nancial year inconsistencies between the of available fi nancial resources indicated is consistent with the fi nancial knowledge we acquired during our by the Company’s fi nancial forecasts statements; and fi nancial statements audit and the taking account of reasonably possible directors’ statement that they consider → (but not unrealistic) adverse effects that in our opinion those reports have that the annual report and fi nancial could arise from these risks individually been prepared in accordance with statements taken as a whole is fair, and collectively and evaluated the the Companies Act 2006. balanced and understandable and achievability of the actions the Directors Directors’ Remuneration Report provides the information necessary consider they would take to improve In our opinion the part of the Directors’ for shareholders to assess the Group’s the position should the risks materialise. Remuneration Report to be audited has position and performance, business We also considered less predictable but been properly prepared in accordance model and strategy; or realistic second order impacts, such as with the Companies Act 2006. the impact of Brexit on customs delays → the section of the Annual Report impacting on the Group’s ability to meet describing the work of the Audit demand in certain areas. Committee does not appropriately address matters communicated by us to the Audit Committee.

88 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information 89 nancial the the less likely nancial statements, Owing to the inherent limitations of limitations the inherent Owing to risk is an unavoidable an audit, there some detected not have may that we in the fi misstatements material have though we even statements, our and performed planned properly with auditing audit in accordance the further example, For standards. and with laws non-compliance removed is from (irregularities) regulations the in the ected refl and transactions events fi required procedures limited inherently identify it. would standards auditing by audit, there In addition, as with any of non-detection a higher risk remained involve as these may of irregularities, omissions, intentional forgery, collusion, of override or the misrepresentations, not responsible are We controls. internal and non-compliance preventing for non- detect to cannot be expected and regulations. with all laws compliance This report is made solely to the This report is made solely to in members, as a body, Company’s 16 of 3 of Part with Chapter accordance Act 2006. Our audit work the Companies might so that we has been undertaken members those the Company’s to state them to state to required are we matters no other report and for in an auditor’s permitted the fullest extent To purpose. or assume do not accept we law, by other than anyone to responsibility and the Company’s the Company our audit work, for members, as a body, this report, the opinions we for or for formed. have Auditor) (Senior Statutory John Luke LLP, and on behalf of KPMG for Auditor Statutory Accountants Chartered Street 319 St Vincent G2 5AS Glasgow 2019 6 March 8 Theour audit purpose of owe whom we and to work our responsibilities Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko ed nancial ed anti- ed and ed laws nancial statements statements nancial nancial statements, statements, nancial the economic uence and of laws ed areas nancial statements. statements. nancial fromnancial statements our general fi including nancial statements bribery as the area most likely to have have to most likely bribery as the area the nature an effect, recognising such activities and the of the Group’s of the of many nature Governmental standards Auditing customers. Group's to audit procedures limit the required identify with these non-compliance enquiry of to and regulations laws and other management the Directors and legal and inspection of regulatory These limited if any. correspondence, did not identify actual or procedures non-compliance. suspected for instance through the imposition of through instance for identifi nes or litigation. We fi reporting legislation (including related related reporting legislation (including legislation), distributable companies ts legislation and taxation profi assessed the extent legislation and we and with these laws of compliance on as partregulations of our procedures items. nancial statement fi the related many is subject to the Group Secondly, the where and regulations other laws could of non-compliance consequences on amounts or effect a material have in the fi disclosures a high level of assurance, but does not but does not of assurance, a high level in that an audit conducted guarantee with ISAs (UK) will always accordance when misstatement a material detect from can arise Misstatements it exists. fraud, and or error other irregularities individually if, material considered are reasonably could they or in aggregate, infl to be expected responsibilities of our A fuller description at on the FRC’s website is provided . www.frc.org.uk/auditorsresponsibilities detect to – ability Irregularities identifi We decisions of users taken on the basis of on the decisions of users taken the fi be reasonably that could regulations on the effect a material have to expected fi and experience and sector commercial discussion with the directors through by and other management (as required with and discussed auditing standards), and other management the Directors regarding the policies and procedures and regulations. with laws compliance identifi communicated We regulations throughout our team and our team throughout regulations indications of any alertremained to the audit. throughout non-compliance from communication This included the of audit teams component to Group identifi and regulations laws relevant level. at group and of these laws effect The potential on the fi regulations varies considerably. varies laws is subject to Group the Firstly, the affect that directly and regulations fi ed nancial nancial nancial are law ed by nancial statements statements nancial we have not received all the not received have we we and explanations information our audit. for require the parent Company fi Company the parent and the part of the statements be Report Remuneration to Directors’ with the not in agreement are audited or and returns; records accounting of Directors’ certain disclosures specifi remuneration not made; or adequate accounting records have not have records accounting adequate or Company, the parent by been kept our audit have for adequate returns fromnot been received not branches us; or by visited

including being satisfi ed that they being satisfi including internal such view; a true and fair give is necessary determine as they control of fi enable the preparation to free are as a whole statements from whether due to misstatement, material fraud (see below), or other irregularities issue our opinion in an and to or error, is assurance report.auditor’s Reasonable Directors’ responsibilities responsibilities Directors’ fully in their more As explained set out on page 85, the statement the for: responsible are Directors of the fi preparation 7 Respective responsibilities responsibilities 7 Respective free that are statements from material fraud whether due to misstatement, or and parent assessing the Group error; as a continue to ability Company’s as applicable, disclosing, going concern, going concern; to related matters basis of and using the going concern either intend unless they accounting or the parent the Group liquidate to or have operations, cease or to Company do so. but to alternative no realistic responsibilities Auditor’s obtain reasonable to are Our objectives about whether the fi assurance → report in these nothing to have We respects. → → → Under the Companies Act 2006, we are Act are 2006, we Under the Companies in our if, you report to to required opinion: 6 We have nothing to report nothing to have 6 We on which on the other matters report by to required are we exception We are required to report to you if you report to to required are We Statement Governance the Corporate a departure disclose does not properly from of the UK provisions the eleven specifi Code Governance Corporate by the Listing Rules for our review. review. our the Listing Rules for by report in these nothing to have We respects. NOTESGROUP TO INCOME THE GROUP STATEMENT ACCOUNTS CONTINUED For the year ended 31 December 2018

Total before exceptional items Exceptional 2017 items 2017 Restated (Note 7) Restated 2018 (Note 1) 2017 (Note 1) Notes £ million £ million £ million £ million Revenue 4 1,760 1,698 – 1,698 Cost of sales (824) (778) (5) (783) Gross profi t 936 920 (5) 915 Distribution costs (476) (456) (12) (468) Administrative expenses (241) (219) (23) (242) Impairment loss on trade receivables 17 (7) (25) – (25) Other income 2 7 4 (1) 3 Operating profi t 4 219 224 (41) 183 Net fi nance costs 9 – Finance cost (41) (36) – (36) – Finance income 4 2–2 Profi t before taxation 5 182 190 (41) 149 Taxation 10 (57) (56) 9 (47) Profi t for the year 125 134 (32) 102

All profi t for the year is attributable to the owners of the Company. Basic earnings per share (pence) 12 49.22 40.04 Diluted earnings per share (pence) 12 49.18 40.01

GROUP STATEMENT OF COMPREHENSIVE INCOME For the year ended 31 December 2018

2017 Restated 2018 (Note 1) £ million £ million Profi t for the year 125 102 Other comprehensive income/(loss) Items that will not be reclassifi ed to profi t or loss Remeasurement of retirement benefi ts 26 5 Taxation on remeasurement of retirement benefi ts (5) (1) Items that may be reclassifi ed subsequently to profi t or loss Cash fl ow hedges 2 3 Taxation on cash fl ow hedges – (1) PDVSA private placement notes: net change in fair value – (4) Net exchange losses offset in reserves (24) (98) Other comprehensive loss for the year (net of tax) (1) (96) Total comprehensive income for the year 124 6

90 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information – – – 5 3 (1) (1) 13 31 (2) 91 71 (7) (9) (8) (1) 23 42 42 20 (22) (25) (27) (60) 2017 184 232 770 (139) 1,101 (410) (627) 1,314 1,314 1,214 (634) (584) 1,274 1,474 2,575 (1,261) (Note 1) (Note £ million Restated 1 1 1 – – 9 (1) 15 13 (2) (5) (6) 23 29 36 85 20 42 42 (51) (17) 781 (47) (34) 2018 2018 184 229 (371) (571) (144) (627) 1,134 1,169 (666) 1,359 1,367 1,367 1,470 2,604 (1,237) £ million 3 15 21 15 13 21 17 19 16 18 18 14 22 23 22 24 28 20 A5 . Notes 29.A5 29 29.A2 29.A4 29.A4 29.A4 Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko cer t surplus t t obligation t nancial instruments nancial nancial instruments nancial nancial instruments nancial

nancial statements on pages 90 to 134 were approved by the Board of Directors on 6 March 2019 and signed on its on 6 March of Directors the Board by approved 134 were on pages 90 to nancial statements

ement benefi lment asset lment lment asset lment Current liabilities Current Borrowings Current tax assets Current and other payables Trade tax liabilities Current Demobilisation provision Provisions Total assets Total fi Derivative Deferred tax liabilities Deferred Retir Derivative fi Derivative Non-current liabilities Borrowings Derivative fi Derivative Cash and cash equivalents Cash Fulfi Trade and other receivables Trade Current assets Current Inventories K Hanna H Drewett H Offi Hanna Financial K Chief Chairman behalf by: The fi Retirement benefi Retirement Fulfi Foreign exchange reserve exchange Foreign Total Shareholders’ equity Shareholders’ Total Deferred tax asset Deferred Treasury shares Treasury Retained earnings Hedging reserve (net of deferred tax) (net of deferred Hedging reserve Property, plant and equipment Property, Investment Share premium Share reserve redemption Capital Other intangible assets Demobilisation provision Shareholders’ equity Shareholders’ capital Share

Non-current assets Goodwill GROUP BALANCE SHEET (COMPANY NUMBER: SC177553) NUMBER: (COMPANY BALANCE SHEET GROUP 2018 31December Asat Total liabilities Total Net assets GROUP CASH FLOW STATEMENT For the year ended 31 December 2018

2017 Restated 2018 (Note 1) Notes £ million £ million Operating activities Profi t for the year 125 102 Adjustments for: Exceptional items 7 – 41 Tax 57 47 Depreciation 293 296 Amortisation of intangibles 5 4 Fulfi lment assets 15 9 20 Demobilisation provisions 21 4 9 Finance income (4) (2) Finance cost 41 36 Profi t on sale of property, plant and equipment (PPE)(i) 2 (7) (4) Share-based payments 10 8 Negative goodwill on acquisition – (2) Changes in working capital (excluding the effects of exchange differences on consolidation): Decrease/(increase) in inventories 14 (1) Increase in trade and other receivables (10) (163) (Decrease)/increase in trade and other payables (60) 111 Cash fl ows relating to fulfi lment assets 15 (44) (12) Cash fl ows relating to demobilisation provisions 21 (4) (10) Cash fl ows relating to prior year exceptional items (6) (30) Cash generated from operations 423 450 Tax paid (61) (69) Interest received 4 2 Interest paid (36) (36) Net cash generated from operating activities 330 347

Cash fl ows from investing activities Acquisitions (net of cash acquired) 28 (24) (55) Acquisitions: repayment of loans and fi nancing – (18) Purchases of PPE (216) (272) Purchase of other intangible assets (10) (5) Purchase of investments (9) – Proceeds from sale of PPE 2 15 14 Net cash used in investing activities (244) (336)

Cash fl ows from fi nancing activities Increase in long-term loans 726 905 Repayment of long-term loans (624) (826) Increase in short-term loans 5 21 Repayment of short-term loans (94) (6) Dividends paid to Shareholders (69) (69) Purchase of treasury shares (12) – Net cash (used in)/from fi nancing activities (68) 25

Net increase in cash and cash equivalents 18 36 Cash and cash equivalents at beginning of the year 59 25 Exchange loss on cash and cash equivalents (1) (2) Cash and cash equivalents at end of the year 3 76 59

Cash fl ows for the purchase and sale of rental fl eet assets are presented as arising from investing activities because the acquisition of new fl eet assets represents a key investment decision for the Group, the assets are expected to be owned and operated by the Group to the end of their useful economic lives, the disposal process (when the assets are largely depreciated) is not a major part of the Group’s business model and the assets in the rental fl eet are not specifi cally held for subsequent resale. (i) Loss on disposal of £1 million was included in exceptional items in 2017.

92 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information – At At (2) 93 76 2017 (20) 2018 (115) (713) (103) (481) (135) (135) (652) (134) (762) (627) (627) (493) (686) £ million £ million 31 December 31 December 31 December 31 December – – – 58 78 (584) 78 (584) 20 (78) (127) (78) (127) cations cations £ million £ million Reclassifi Reclassifi £ million £ million Exchange Exchange ow– ow– Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko £ million £ million Cash fl Cash fl acquisitions acquisitions ow ow £ million £ million Cash fl Cash Cash fl Cash excluding excluding excluding acquisitions acquisitions At At (5) 3 – – 25 36 – (2) – 59 59 18 – (1) – (41) (15) – 7 (41) (15) – 7 2017 2018 (713) 13 (24) (38) – (127) 89 – (4) (93) (633) (6) (73) 50 (633) (6) (73) 50 (652) 29 (24) (39) – (329) 265 (73) 14 (679) (18) (73) 57 (584) (78) (24) (34) 93 (649) 15 (73) 55 (304) (271) – 36 £ million £ million 1 January 1 January

nancing activities nancing nancing activities nancing Analysis of changes in netAnalysis debt Financing derivativesFinancing financingTotal liabilities 2017 As at 31 December (2) 2 – – – Private placement notes placement Private Non-current borrowings: Bank borrowings notes placement Private borrowingsNon-current (55) 55 (481) – (103) – (78) (2) borrowings: Current Bank borrowings (24) – notes placement Private (584) (18) (30) (4) (78) (24) 75 18 (34) 93 – (41) – (15) – – 4 3 (20) (58) (72) (55) Cash and cash equivalents Analysis of changes in netAnalysis debt Current borrowingsCurrent (127) 89 – (4) (93) Current borrowings: Current Bank borrowingsNet debt of changes in liabilities fromAnalysis fi (72) 34 – (2) (75) Cash and cash equivalents As at 31 December 2018 As at 31 December RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT TO MOVEMENT FLOW OF NET CASH RECONCILIATION 2018 31 December ended year the For Current borrowings Current Non-current borrowings: Bank borrowings of changes in liabilities fromAnalysis fi borrowings Non-current derivatives Financing Private placement notes placement Private Net debt Total financingTotal liabilities GROUP STATEMENT OF CHANGES IN EQUITY For the year ended 31 December 2018

As at 31 December 2018 Attributable to equity holders of the Company Foreign Ordinary Share Capital exchange share premium Treasury redemption Hedging reserve Retained Total capital account shares reserve reserve (translation) earnings equity Notes £ million £ million £ million £ million £ million £ million £ million £ million Balance at 1 January 2018 as previously reported 42 20 (7) 13 (1) (27) 1,277 1,317 Impact of change in accounting policy (Note 1) – – – – – – (3) (3) Restated balance at 1 January 2018 42 20 (7) 13 (1) (27) 1,274 1,314 Profi t for the year – – – – – – 125 125 Other comprehensive (loss)/income: Fair value gains on interest rate swaps (net of tax) – – – – 2 – – 2 Currency translation differences(i) –––––(24)–(24) Remeasurement of retirement benefi ts (net of tax) – – – – – – 21 21 Total comprehensive income for the year ended 31 December 2018 – – – – 2 (24) 146 124 Transactions with owners: Purchase of Treasury shares – – (12) – – – – (12) Employee share awards – – – – – – 10 10 Issue of Ordinary Shares to employees under share option schemes – – 2 – – – (2) – Dividends paid during 2018 11 – – – – – – (69) (69) – – (10) – – – (61) (71) Balance at 31 December 2018 42 20 (17) 13 1 (51) 1,359 1,367

(i) Included in currency translation differences of the Group are exchange losses of £46 million arising on borrowings denominated in foreign currencies designated as hedges of net investments overseas, and exchange gains of £22 million relating to the translation of overseas results and net assets. The currency translation difference is explained in the Financial Review on page 27.

94 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information 95 Total Total equity equity £ million £ million earnings earnings Retained reserve reserve Foreign Foreign £ million exchange exchange (translation) (translation) ed in foreign currencies designated as designated currencies ed in foreign reserve reserve £ million Hedging Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko Capital Capital reserve reserve £ million redemption redemption shares shares Attributable to equity holders of the Company holders equity to Attributable Treasury Treasury £ million Share Share account account £ million premium premium – –– – – – –– – – – (98) 2 7 – (98) – (98) 102 – 6 – (68) (61) 42 20 (7) 13 (1) (27) 1,274 1,314 share share capital £ million Ordinary Notes (i) ts (net of tax) – – – – – – 4 4 the yeart for – – – – – – 102 102 hedges of net investments overseas, and exchange losses of £153 million relating to the translation of overseas results and net assets. and net results of overseas the translation losses of £153 to million relating and exchange overseas, hedges of net investments (i) denominat on borrowings arising million gains of £55 exchange are of the Group differences translation in currency Included Other comprehensive Other comprehensive (loss)/income: rate gains on interest value Fair (net of tax)swaps placement private PDVSA value fair in net change notes: translation Currency differences – – – – – – – – – 2 – – (4) (4) – 2 Balance at 1 JanuaryBalance 2017 reportedas previously in accounting Impact of change 1) (Note policy at balance Restated 1 January 2017Profi 42 20 – (14) 42 13 – 20 (3) – (14) 71 13 – 1,239 (3) 1,368 – 71 – 1,240 1,369 1 1 As at 31 December 2017 As at 31 December Remeasurement of retirement of retirement Remeasurement benefi comprehensive Total ended theincome year for 2017 31 December with owners: Transactions awards share Employee to Issue of Ordinary Shares under share employees option schemes 2017Dividends paid during 2017 at 31 December Balance 11 – – – – – – – – – 7 – – – – – – – 8 (69) – 8 (69) (7) – NOTES TO THE GROUP ACCOUNTS For the year ended 31 December 2018

1 Accounting policies Going concern statements where IFRS 15 and Given the proven ability of the business IFRS 9 have been applied. Changes The Company is a public limited to fund organic growth from operating to signifi cant accounting policies company which is listed on the London cash fl ows, and the nature of our are described below. Stock Exchange and is incorporated and business model, we believe it is sensible domiciled in the UK. The address of the IFRS 15 to run the business with a modest registered offi ce is 120 Bothwell Street, IFRS 15 deals with revenue recognition amount of debt. We say ‘modest’ Glasgow G2 7JS, UK. The principal and establishes principles for reporting because we are strongly of the view accounting policies applied in the useful information to users of fi nancial that it is unwise to run a business which preparation of these consolidated statements about the nature, amount, has high levels of operational gearing fi nancial statements are set out below. timing and uncertainty of revenue and with high levels of debt. Given the These policies have been consistently cash fl ows arising from an entity’s above considerations, we believe that applied to all years presented, unless contracts with customers. Revenue a Net Debt to EBITDA ratio of around otherwise stated. is recognised in accordance with the one times is appropriate for the Group fi ve-step model included in IFRS 15 Basis of preparation over the longer term. which specifi es that revenue should The Group fi nancial statements have The Group maintains suffi cient facilities be recognised when (or as) an entity been prepared in accordance with to meet its normal funding requirements transfers control of goods or services International Financial Reporting over the medium term. At 31 December to a customer at an amount to which Standards as adopted by the European 2018, these facilities totalled £1,191 million the entity expects to be entitled. Union (EU IFRS), IFRIC interpretations in the form of committed bank facilities and the Companies Act 2006 applicable The Group has applied IFRS 15 arranged on a bilateral basis with to companies reporting under EU IFRS. retrospectively using the practical a number of international banks and The fi nancial statements have been expedient not to restate for contract private placement notes. The fi nancial prepared under the historical cost extensions before 1 January 2017. covenants attached to these facilities convention, as modifi ed by the Comparative numbers for the year are that EBITDA should be no less than revaluation of certain fi nancial assets ended 31 December 2017 have been four times interest and net debt should and fi nancial liabilities (including restated. The main changes from be no more than three times EBITDA; derivative instruments) at fair value. adopting IFRS 15 are detailed below. at 31 December 2018, these stood at The preparation of fi nancial statements 14* times and 1.3* times respectively. The Mobilisation and demobilisation in conformity with EU IFRS requires the Group does not expect to breach these Mobilisation costs are classifi ed as use of estimates and assumptions that covenants in the year from the date of fulfi lment costs where they are affect the reported amounts of assets approval of this report and the Group separately identifi able and specifi c to a and liabilities at the date of the fi nancial expects to continue to be able to arrange project and where the mobilisation does statements and the reported amounts suffi cient fi nance to meet its future not itself form a separate performance of the revenues and expenses during funding requirements. It has been obligation. In these circumstances, the reporting period. the Group’s custom and practice to mobilisation costs are capitalised as they refi nance its facilities in advance of their relate to future performance obligations, Although these estimates are based maturity dates, providing that there i.e. the provision of power is the future on management’s best knowledge of is an ongoing need for those facilities. performance obligation, which begins the amount, event or actions, actual Net debt amounted to £686 million when the power starts to be generated. results ultimately may differ from at 31 December 2018 and, at that date, During the phase of mobilisation this those estimates. undrawn committed facilities were service has not yet started and as such Adjusted measures £465 million. represents a future performance The Directors assess the performance obligation. The costs incurred during The Group balance sheet shows of the Group and its reportable mobilisation are directly related to the consolidated net assets of £1,367 million segments based on ‘adjusted measures’. contract and enable Aggreko to earn (2017: £1,314 million) of which These measures are used for internal revenue from the provision of power. £1,057 million ( 2017: £1,104 million) performance management and are They are expected to be recovered relates to fl eet assets. The defi ned believed to be most appropriate for because the contract is profi table benefi t pension surplus is £1 million explaining underlying performance although they will be reviewed carefully (2017: defi cit of £25 million). to users of the accounts including for any indication of impairment. shareholders of the Company and other More detail can be found within the With respect to demobilisation costs stakeholders. The adjusted measures Risks section on pages 38 to 45 and in the Group has a legal obligation to incur in relation to profi t exclude 2017 the assessment of prospects and viability demobilisation costs once the assets are exceptional items. These exceptional section on page 45. installed on site, as this is required by the items are explained on page 109. In Based on the above the Directors are contract. This creates a legal obligation comparing performance year on year confi dent that it is appropriate for the from a past event. The majority of these we also exclude the impact of currency going concern basis to be adopted costs can be measured reliably and and pass-through fuel. The Group in preparing the year end fi nancial therefore they meet the defi nition of a reports separately fuel revenue from statements. provision. These costs are capitalised as a contracts in our Power Solutions Utility fulfi lment cost asset as they are incurred business in Brazil and Sri Lanka where Changes in accounting policy in relation to a performance obligation we manage fuel on a pass-through basis and disclosures (delivering power) and are expected to on behalf of our customers. The reason (a) New and amended standards be recovered and generate or enhance for the separate reporting is that fuel adopted by the Group resources because they facilitate revenue on these contracts is entirely The Group adopted IFRS 15 ‘Revenue Aggreko’s delivery of the contract. dependent on fuel prices and volumes from Contracts with Customers’ and of fuel consumed, and these can be IFRS 9 ‘Financial Instruments’ from volatile and may distort the view of the 1 January 2018 therefore this is the performance of the underlying business. fi rst set of the Group’s annual fi nancial

* Calculation is on pages 141 and 142.

96 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information 97 £ million As restated £ million t. Adjustments 3–3 154 (5) 149 (34) – (34) 106 (4) 102 188 (5) 183 920 (5) 915 (242) – (242) (493) 25 (468) £ million reported Aggreko will sometimes hire will sometimes hire Aggreko equipment from use party to a third the IFRS 15 Before on a contract. with associated and cost revenue as separately for accounted this was Under the principal. was Aggreko is acting as an agent IFRS 15 Aggreko instance in this than principal rather not does mainly because Aggreko of the service provision the control that as the fact such factors due to for party is still responsible the third the equipment. Under to repairs is netted of the rehire IFRS 15 the cost against revenue. the year 3: The impact of this for Note to 2017 was ended 31 December of sales by and cost revenue reduce is no impact on million. There £34 profi operating As previously As previously

Year ended 31 December 2017 ended 31 December Year → → Rehire arrangements arrangements Rehire Agent) vs. (Principal 4(48)1(47) 1,3 1,730 (32) 1,698 Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko 2,3 (810) 27 (783) Notes Adjustment ecting revenue now being now ecting revenue for nancial impact of these items Note 5: A fulfi million lment asset of £8 5: A fulfi Note as at 31 December recognised was less than one year million with £5 2017, one year. than million greater and £3 provision 6: A demobilisation Note at as of £10 recognised million was million less with £9 2017, 31 December and £1 million greater than one year than one year. any 11: IFRS 9 requires Note receivables loss on trade impairment of on the face separately be shown to statement. the income Note 1: Revenue for the year ended the year for 1: Revenue Note million 2017 is £2 31 December higher refl the year of sales for 2: Cost Note 2017 is £7ended 31 December million ecting mobilisation and higher refl the amortiseddemobilisation costs to of period the over statement income the contract. recognised during the provision the provision during recognised in the revenue Deferred of power. by sheet also increases balance million. £2

→ → → → → The fi 2017 is ended 31 December the year refer references (Note detailed below tables below): to t nancial statements nancial t in the contract cally stipulated nance costs costs nance taxation t before the period t for Diluted earnings per share (pence) per share earnings Diluted Notes above narrative 1, 2, to 3, 11 – Refer Notes: impact of adjustments 1, 2 & 3 4 – Tax Note: 41.51 (1.50) 40.01 Profi Taxation Profi (pence) per share Basic earnings 41.54 (1.50) 40.04 Net fi Distribution costs Distribution expenses Administrative receivables loss on trade Impairment Other income profi Operating 11 – (25) (25) Cost of sales Cost profi Gross Revenue The fulfi (mobilisation and lment costs The fulfi amortised are to demobilisation costs) the period over statement the income The amortisationof the initial contract. and revenue earn startstarts to we when period when the initial contract stops the is a signed extension, ends. If there unamortised amount left in the balance is signed is sheet when the extension the remaining then amortised over and the of the initial contract period period. extension mobilisation and where In contracts timing is demobilisation income specifi of the timing match to in order is this income then costs, associated period during the recognised now of power. of provision 1 Accounting policies 1 Accounting continued Impactfi on Group income statement income Group NOTES TO THE GROUP ACCOUNTS CONTINUED

1 Accounting policies continued Group balance sheet 31 December 2017 As previously Adjustment reported Adjustments As restated notes £ million £ million £ million Non-current assets Other non-current assets 1,471 - 1,471 Fufi lment asset 5 -33 1,471 3 1,474 Current assets Other current assets 1,096 - 1,096 Fufi lment asset 5 -55 1,096 5 1,101

Total assets 2,567 8 2,575

Current liabilities Other current liabilities 1,4 (617) (1) (618) Demobilisation provision 6 - (9) (9) (617) (10) (627)

Non-current liabilities Other non-current liabilities (633) - (633) Demobilisation provision 6 - (1) (1) (633) (1) (634)

Total liabilities (1,250) (11) (1,261)

Net assets 1,317 (3) 1,314

Shareholders’ equity Other 40 - 40 Retained earnings 1,277 (3) 1,274 Total shareholders’ equity 1,317 (3) 1,314

Group cash fl ow statement Year ended 31 December 2017 As previously Adjustment reported Adjustments As restated notes £ million £ million £ million Profi t for the year 7 106 (4) 102 Adjustments for: Tax 848(1)47 Fulfi lment assets 9 - 20 20 Demobilisation provisions 10 - 9 9 Cash fl ows relating to fulfi lment assets 9 - (12) (12) Cash fl ows relating to demobilisation provisions 10 - (10) (10) Increase in trade and other payables 113 (2) 111 Other items 183 - 183 Cash generated from operations 450 - 450

Notes 5 & 6 – Refer to narrative on page 97 Notes 7 & 8 – Refer to income statement above Note 9 – Refer to Note 15 to the Accounts (Fulfi lment assets) Note 10 – Refer to Note 21 to the Accounts (Demobilisation provision)

98 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information 99 ect lment cation, nancial assets nancial of performance cation nancial assets and liabilities. The assets and demobilisation provisions provisions assets and demobilisation above. detailed are million of £44 the year During capitalised were lment assets fulfi costs mobilisation to mainly relating Bangladesh, Brazil in contracts new for and St Croix. judgements Key Identifi obligations in determining Judgement is required obligations the number of performance stream revenue each to in relation a number of services (including given mobilisation and demobilisation) that as part of the contract. can be provided will of cases Aggreko In the majority obligations. performance two only have In Rental Solutions and shorter-term Solutions within Power contracts rental rental provides the Group Industrial the supply of temporary for contracts oil-free control, temperature power, services. air and related compressed and medium- Solutions Utility In Power customers industrial for projects term power, supplies temporary the Group oil-free control, temperature services. air and related compressed performance these are believe We mobilise services to obligations as any not considered or demobilise assets are distinct from of power. the provision to considered services are The Group’s of servicesbe a service that are or series the substantially the same and have the customer. to of transfer same pattern arrangements Rehire Agent) vs (Principal on described are These arrangements in Judgement is required page 97. is a Principal/Agent if there determining contracts. in the relevant relationship IFRS 9 the classifi IFRS 9 addresses of and recognition measurement fi IFRS 9 using the has adopted Group method and therefore effect cumulative not been restated. have comparatives fromThe main changes implementing detailed below: IFRS 9 are of fi Impairment the ‘incurred loss’ model IFRS 9 replaces loss’ credit with an ‘expected in IAS39 losses (ECL) model. Under IFRS 9 credit than under earlier be recognised to tend accrued (including Receivables IAS 39. be considered to required are revenue) refl to impairment for immediately or default of future the possibility non-collectability. The accounting policy for fulfi for policy The accounting 8 Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko 10 139 2017 490 £ million l 11 44 169 2018 502 £ million 21 Notes revenue of the cant reversal the Where available. cation where lment assets lment 15 and assets) lment assets (contract Accrued incomeAccrued Fulfi 17 Demobilisation provisions Receivables 17 the relevant performance obligation. performance the relevant If our assessment of these penalties that that it is highly probable means a signifi netted are they will occur recognised against revenue. of revenue Disaggregation revenue the Accounts 4 to In Note from with customers contracts business unit, by is disaggregated and sector. geography balances Contract information table provides The following income, accrued about receivables, fulfi (contract demobilisation provisions liabilities) from with contracts customers. There are some contracts performed by by performed some contracts are There or control software develop to the Group storage energy and construct systems of a the outcome Where systems. reliably, can be measured contract the over is recognised revenue contract to reference by of the contract period done at the balance of work the value third-party to with reference sheet date certifi cannot be reliably of a contract outcome recognised are costs contract estimated, and when incurred as an expense the extent to is only recognised revenue that it is incurred costs of the contract In both will be recoverable. probable loss is contract expected cases, any immediately. recognised the by is recognised A receivable when the service is provided Group vary terms Payment the customer. to of the majority and the Group across paid are the Group across receivables terms. the payment to within or close the some of the contracts However, in developing undertakes Group Solutions Utility in our Power countries in and are large very business are practices payment where jurisdictions These are can be unpredictable. detail on page 102. in more explained consideration Variable on penalties is liable to The Group fulfi to fail if we certain contracts ed in a contract and charge rental xed on certain contracts charge xed Power Solutions Utility: This business Solutions Utility: Power projects longer-term provides national utility to power providing customers. Rental Solutions: This business and heating power, provides markets. in developed cooling requirements These customers smaller, around revolve to tend events. and key projects short-term This Solutions Industrial: Power medium-term business comprises as customers, industrial for projects contracts rental as shorter-term well

by providing agreed levels of power of power levels agreed providing by the customer to capacity generation when availability and this is recognised met. are in the contract criteria as the earned are charges Variable and or rental power provides Group with services in accordance associated and are arrangements contractual is produced as the power recognised is Revenue or the service is provided. sheet at the balance or deferred accrued covered the period depending on date issued and invoice the most recent by terms. the contractual a variable charge related to the usage to related charge a variable of assets or other services (including earns fuel). The Group pass-through a fi → of these operating A detailed description on page 7 of the units can be found Annual Report. performance has two The Group obligations. In Rental solutions and within contracts rental shorter-term the Group Solutions Industrial Power the supply for contracts rental provides temperature power, of temporary oil-freecontrol, air and compressed Solutions services. In Power related projects and medium-term Utility the Group customers industrial for temperature power, supplies temporary oil-freecontrol, air and compressed services. related obligations In both these performance time and over is recognised revenue a fi can comprise → with a customer and excludes amounts and excludes with a customer parties. behalf of third on collected when revenue recognises The Group a service to over control it transfers as detailed below. a customer on page 3 Aggreko As explained segments as operating has three detailed below: → Revenue recognition Revenue based on the is measured Revenue specifi consideration 1 Accounting policies 1 Accounting continued NOTES TO THE GROUP ACCOUNTS CONTINUED

1 Accounting policies continued The Group assesses the ECL as explained below: Power Solutions Industrial and Rental Solutions The Group has taken advantage of the practical expedient in IFRS 9 to use a provision matrix to simplify the calculation where accounts receivable are split into various risk categories (e.g. based on Credit Rating Agencies) and then a percentage is applied to each category to obtain the impairment allowances. An example of the provision matrix is detailed below: 0-30 31-60 Ageing Notes Current days days 61-90 days > 90 days Risk Low risk 1 Medium risk 1 High risk 1 Specifi c 2

Notes 1. Classifi cation based on assessment of customer credit risk 2. Specifi c provision for customers Each operating unit within the Power 2018 was £4 million (2017: £4 million). The Group plans to apply IFRS 16 initially Solution Industrial and Rental Solutions This fi nancial instrument was included in on 1 January 2019, using a modifi ed businesses has used this provision other receivables. Previously the change retrospective approach. Therefore, the matrix to calculate the provision and in fair value of these notes was refl ected cumulative effect of adopting IFRS 16 will each matrix is specifi c to the economic in the statement of changes in equity, be recognised as an adjustment to the and operating conditions of each however under IFRS 9 the changes in opening balance of retained earnings operating unit. In applying this matrix the fair value are now refl ected in the at 1 January 2019, with no restatement the operating units will also consider the income statement. There has been no of comparatives. following: signifi cant fi nancial diffi culties change to the fair value of these notes in IFRIC 23 ‘Uncertainty over income tax of the debtor, probability that the debtor year ended 31 December 2018. treatments” will enter bankruptcy or fi nancial (b) New standards, amendments and IFRIC 23 comes in to effect from 1 reorganisation and default, or large and interpretations issued but not January 2019. Management has assessed old outstanding balances, particularly effective for the fi nancial year the impact of this change and this is in countries where the legal system beginning 1 January 2018 and not expected to be immaterial. is not easily used to enforce recovery. early adopted When a trade receivable is uncollectable Basis of consolidation IFRS 16 ‘Leases’ it is written off against the provision The Group fi nancial statements IFRS 16 applies to annual periods for impairment of trade receivables. consolidate the fi nancial statements of beginning on or after 1 January 2019 and More detail is contained on page 102. Aggreko plc and all of its subsidiaries requires lessees to recognise all leases on for the year ended 31 December 2018. Power Solutions Utility (PSU) balance sheet with limited exemptions Subsidiaries are those entities over Within our PSU business when for short-term leases and low value which the Group has control. The Group considering the risk profi le of the leases (<$10,000). This will result in the controls an entity when the Group is debtors and the relevant impairment recognition of a right-to-use asset and exposed to, or has rights to, variable provision the Group considers each corresponding liability on the balance returns through its power over the entity. debtor and customer individually, within sheet, with the associated depreciation Subsidiaries are fully consolidated from the relevant environment to which it and interest expense being recorded in the date on which control is transferred relates, taking into account a number the income statement over the lease to the Group. They are deconsolidated of factors. These factors include the period. The Group has completed its from the date that control ceases. political and economic conditions in the impact assessment of this standard and relevant country, duration and quality of the expected impact of applying IFRS 16 The Group uses the acquisition method relationship with the customer, age of in its fi rst full year of application is of accounting for business combinations. debt, cash fl ows from the customer and detailed below. The consideration transferred for the any relevant communication throughout acquisition of a subsidiary is the fair → The total annual income statement the year. We then apply the matrix value of the assets transferred, the charge is expected to increase by circa approach detailed above to any debtors liabilities incurred and the equity £2 million. that do not have a specifi c provision. interests issued by the Group. The → EBITDA is expected to increase by consideration transferred includes the Based on this there is no material impact around £30 to £40 million as the fair value of any asset or liability resulting to the Group. expense is now depreciation and from a contingent consideration Classifi cation and measurement of interest. arrangement. Acquisition related costs fi nancial assets and fi nancial liabilities are expensed as incurred. Identifi able → The total income statement charge There are no material changes relating assets and liabilities and contingent over the life of the leases is unchanged to derivatives, however we will defer liabilities assumed in a business – the difference under IFRS 16 is a implementation until the macro combination are measured initially at ‘front-loading’ of the recognition of the hedging requirements are fi nalised. their fair values at the acquisition date. charge. In September 2016 the Group signed Inter-company transactions, balances → Recognition of a right-of-use asset and £14 million of private placement notes and unrealised gains on transactions lease liability in the range of £100-£110 with one customer in Venezuela (PDVSA) between Group companies are million with no impact on net assets. to progress clearing the overdue debt. eliminated. Unrealised losses are also This resulted in a fi nancial instrument In addition, the combined impact of eliminated. Accounting policies of which replaced the net trade receivable IFRS 16 on operating profi t and net subsidiaries have been changed where balance. The fi nancial instrument was operating assets is expected to reduce necessary to ensure consistency with booked at fair value which refl ected our the Group’s return on capital employed the policies adopted by the Group. estimation of the recoverability of these by circa 0.3pp. notes. This fair value at 31 December

100 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information 101 ts are are ts ows nancial ow statements are are statements ow able cash fl These are ows. presented are nancial statements viability of the product has been proven, proven, has been of the product viability can be measured cost the development benefi economic future reliably, (cash-generating units). currencies Foreign fi in the included Items of the Group’s each for statements the currency using measured entities are environment of the primary economic (functional operates the entity in which consolidated The Group’s currency). fi is the Group’s which in Sterling, currency. presentational transactions level, At individual company are currencies in foreign denominated on of exchange at the rate translated Assets occurs. the transaction the day in foreign and liabilities denominated at the exchange translated are currency sheet date. ruling at the balance rate Non-monetary translated assets are hedge to In order rate. at the historical exchange certain foreign to its exposure forward into enters the Group risks, options. currency and foreign contracts assets and liabilities On consolidation, of subsidiary translated undertakings are of exchange. rates at closing Sterling into and cash fl Income of exchange rates at average translated Gains and losses from the period. for the and gains and of transactions settlement of monetarylosses on the translation in assets and liabilities denominated in the included are other currencies statement. income probable and the Group intends, and intends, the Group and probable complete to cient resources, has suffi use or sell and to the development capitalised such the assets. Any is amortised expenditure development basis so that it is on a straight-line over statement the income to charged of the resulting useful life the expected is currently which technology, or product six years. to three be between deemed to plant and of property, Impairment equipment and other intangible goodwill) assets (excluding equipment and plant and Property, amortised/other intangible assets are for and reviewed depreciated or events whenever impairment indicate in circumstances changes not be that the carrying amount may loss is impairment An recoverable. which the amount by for recognised carrying amount exceeds the asset’s amount. The recoverable its recoverable fair amount is the higher of an asset’s in sell and value to less costs value using in use is calculated use. Value cash fl estimated using an appropriate discounted rate. pre-tax interest long-term assessing of the purposes For at grouped impairment, assets are are there which for levels the lowest identifi separately Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko the carrying reduce rst to eet 12 years 8 to are reviewed on an annual basis and the reviewed are as follows: used are periods principal Rental fl plant Vehicles, and equipment 15 years 4 to Intangibles as part of a Intangible assets acquired capitalised, are business combination from separately value fair goodwill, at if the asset of acquisition at the date from or arises is separable contractual can be value and its fair or legal rights Amortisation is reliably. measured method on a straight-line calculated at acquisition value the fair allocate to useful their estimated asset over of each relationships: customer as follows: lives agreements: non-compete years, 5-10 of the non-compete the life over intangible technology agreements, years. four assets acquired: of intangible assets The useful life on an annual basis. is reviewed Goodwill of a business, fair On the acquisition the net assets to attributed are values the fair where Goodwill arises acquired. a for given of the consideration value of such value fair the business exceeds is on acquisitions assets. Goodwill arising impairment capitalised and is subject to and when there both annually reviews, that the carrying value indicators are not be recoverable. may of the impairment the purpose For each to goodwill is allocated testing, cash-generating units of the Group’s t from the synergies benefi to expected of the combination. goodwill which units to Cash-generating for tested are has been allocated frequently or more annually, impairment is an indication that the unit when there If the recoverable be impaired. may amount of the cash-generating unit is less than the carrying amount of the unit, loss is then the impairment fi allocated amount of any goodwill allocated to the to goodwill allocated amount of any other assets of the the unit and then to on the basis of the carrying unit pro-rata asset in the unit. amount of each loss recognised An impairment in a goodwill is not reversed for impairment Any subsequent period. immediately of goodwill is recognised statement. in the income costs and development Research to is charged expenditure All research in in the period statement the income it is incurred. which is charged expenditure Development in the period statement the income to unless it relates it is incurred in which product of a new the development to after and it is incurred or technology and commercial feasibility the technical ed nancial t measure measure t ected by the Group’s divisional the Group’s by ected nancial reporting systems. be properly to are nancial statements nancial statements to determine more more determine to nancial statements Segmental reporting in reported are segments Operating with the internal a manner consistent operating the chief to reporting provided operating The chief decision maker. has been identifi decision maker 1 Accounting policies 1 Accounting continued as the Board of Directors. as the Board business units: has two Aggreko Solutions. Power Rental Solutions and serve we Solutions Power Within customers. and Industrial both Utility segments has three therefore Aggreko Rental Solutions, Power comprising: and Power Solutions – Industrial of these A description Solutions – Utility. on page 7. business units is contained This is refl management and organisational management and organisational internal and the Group’s structure fi and assets, The Global Solutions results costs, administrative as central as well segments based between allocated are on revenue. items Exceptional which items are items Exceptional in individually or if of a similar type, by be disclosed need to aggregate, if the virtue or incidence of their size fi our fi monitor To understood. performance we use a profi we performance that excludes exceptional items. exceptional that excludes because, if these items exclude We distort could these items included, for understanding of our performance between and comparability the year has been statement The income periods. which format, in a columnar presented items. highlights exceptional separately enable users of the to This is intended fi items the impact of exceptional readily of the Group. on the results plant and equipment Property, plant and equipment is carried Property, depreciation less accumulated at cost includes losses. Cost and impairment attributable and directly price, purchase the the asset into of bringing costs it is where location and condition are costs use. Borrowing capable for the assets are not capitalised since a short of time. period assembled over depreciated properties are Freehold 25 years. basis over on a straight-line propertiesShort are leasehold basis on a straight-line depreciated lease. of each terms the over plant and equipment Other property, basis on a straight-line depreciated are off the write to estimated at annual rates from its useful life asset over of each cost use. Assets in for it is available the date not are of construction the course of depreciation The periods depreciated. NOTES TO THE GROUP ACCOUNTS CONTINUED

1 Accounting policies price less cost to completion and selling As at 31 December 2018, provisions continued expenses. When the reasons for a totalled £2 million (2017: £8 million) write-down of the inventory have ceased Taxation and they relate to the Group Business to exist, the write-down is reversed. Priorities programme implementation. Deferred tax The provisions are generally in respect Deferred tax is provided in full, using Employee benefi ts of depot closure costs. the liability method, on temporary Wages, salaries, social security differences arising between the tax base contributions, paid annual leave and These provisions are detailed in Note 20. of assets and liabilities and their carrying sick leave, bonuses and non-monetary A contingent liability is disclosed where amounts in the fi nancial statements. benefi ts are accrued in the year in which the existence of the obligation will only In principle, deferred tax liabilities are the associated services are rendered by be confi rmed by future events, or where recognised for all taxable temporary the employees of the Group. Where the the amount of the obligation cannot be differences and deferred tax assets are Group provides long-term employee measured with reasonable reliability. recognised to the extent that it is benefi ts, the cost is accrued to match Contingent assets are not recognised, probable that taxable profi ts will be the rendering of the services by the but are disclosed where an infl ow of available against which deductible employees concerned. temporary differences can be utilised. economic benefi ts is probable. The Group operates a defi ned benefi t Such assets and liabilities are not Cash and cash equivalents pension scheme and a number of recognised if the temporary difference Cash and cash equivalents comprise defi ned contribution pension schemes. arises from goodwill, negative goodwill cash on hand, deposits with a maturity The cost for the year for the defi ned or from the acquisition of an asset, of three months or less and short-term benefi t scheme is determined using which does not affect either taxable overdrafts. the Projected unit method with actuarial or accounting income. Deferred tax is updates to the valuation being carried determined using tax rates (and laws) Borrowings out at each balance sheet date. that have been enacted or substantively Borrowings are recognised initially at fair value, net of transaction costs incurred. enacted by the balance sheet date and Remeasurements are recognised in Borrowings are subsequently stated at are expected to apply when the related full, directly in retained earnings, in amortised cost. Any difference between deferred tax asset is realised or the the period in which they occur and the proceeds, net of transaction costs, deferred tax liability is settled. Deferred are shown in the statement of and the redemption value is recognised tax is charged or credited in the income comprehensive income. The current in the income statement over the period statement, except when it relates to service cost of the pension charge of the borrowings using the effective items credited or charged directly to and administrative expenses are interest rate. equity, in which case the deferred tax included in arriving at operating profi t. is also dealt with in equity. Interest income on scheme assets and Key assumptions, estimations interest on pension scheme liabilities Deferred tax is provided on temporary and signifi cant judgements are included in net fi nance costs. differences arising on investments in The Group uses estimates and makes judgements in the preparation of subsidiaries, except where the timing of The retirement benefi t obligation its Accounts. The most sensitive the reversal of the temporary difference recognised in the balance sheet is areas affecting the Accounts are is controlled by the Group and it is the present value of the defi ned discussed below. probable that the temporary difference benefi t obligation at the balance sheet will not reverse in the foreseeable future. date less the fair value of the scheme Trade receivables assets. The present value of the defi ned Provision for income taxes, mainly The trade receivables accounting policy benefi t obligation is determined by withholding taxes, which could arise is noted above and the impact of IFRS 9 discounting the estimated future cash on the remittance of retained earnings, is on page 99. fl ows using interest rates of high-quality principally relating to subsidiaries, is only corporate bonds. The approach to exercising judgement made where there is a current intention in this area is to consider each signifi cant to remit such earnings. Contributions to defi ned contribution debtor and customer individually, within Current tax pension schemes are charged to the the relevant environment to which it income statement in the period in which The charge for current tax is based relates, taking into account a number they become payable. on the results for the year, as adjusted of factors. These factors include the for items which are non-assessable Trade receivables political and economic conditions in the relevant country, duration and quality or disallowed. It is calculated using Trade receivables are recognised initially of relationship with the customer, age taxation rates that have been enacted at fair value (which is the same as cost). of debt, cash fl ows from the customer or substantially enacted by the balance The trade receivables impairment policy and any relevant communication sheet date. is discussed above in the Impact of throughout the year. A review of the IFRS 9 section. Inventories provision for bad and doubtful debts Inventories are valued at the lower of Trade payables is performed at each month end and cost and net realisable value, using the Trade payables are recognised initially specifi cally at the end of each reporting weighted average cost basis. Cost of raw at fair value and subsequently measured period. It is an assessment of the materials, consumables and work in at amortised cost using the effective potential amount of trade receivables progress includes the cost of direct interest method. which will not be paid by the customer materials and, where applicable, direct after the balance sheet date. This is Provisions labour and those overheads that have calculated by reference to the factors Provisions are recognised where a legal been incurred in bringing the inventories above as well as the information or constructive obligation has been to their present location and condition. disclosed in Note 17, notably the incurred which will probably lead to ageing of past due but not impaired. Inventory is written down on a case an outfl ow of resources that can be by case basis if the anticipated net reasonably estimated. Provisions are The management of trade receivables is realisable value declines below the recorded for the estimated ultimate the responsibility of the operating units, carrying amount of the inventory or to liability that is expected to arise, taking although they report monthly to the take account of inventory losses. Net into account the time value of money Group on debtor days, debtor ageing realisable value is the estimated selling where material. and signifi cant outstanding debts.

102 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information 103 c asset c ts nancial nancial nal outcome outcome nal While a range cantly. eet required to provide provide to eet required exposure on this in the coming year. in the coming on this exposure tax other uncertain direct For as at Bangladesh, positions, excluding had tax provisions 2018,31 December we million) £31 million (2017: £24 totalling between in provisions The movement the due to 2017 and 2018 is principally of an in respect of a provision release in Yemen, (2006-2014) matter historic years many for has not moved which believe do not currently we and which provisions will crystallise. The remaining manage the tax held to principally are historic potential other impact of various with in connection largely tax exposures, in Solutions Utilities business our Power Africa and potential and Latin America, the Group by faced risks pricing transfer transact we how to with respect the business. within internationally with associated the uncertainty Due to tax positions, it is possible that at such of these on conclusion date, a future open tax positions, the fi signifi vary may possible, is reasonably of outcomes historic based on management’s believe of these issues, we experiences additional is of outcomes range a likely £12liabilities of up to million and in liabilities of around a reduction £10 of sensitivities million. The range of the cation depends upon quantifi and error of technical risk liability, tax by taken in approach difference jurisdictions. in different authorities of deferred In addition, the recognition tax assets is dependent upon an profi taxable estimation of future courts. We do not anticipate that this that this not anticipate do courts. We over conclusion to will progress matter fi of the coming the course be many that it may and believe year is resolved. the matter before years a strong by Our position is supported of the are we legal opinion and so in will be successful opinion that we that believe therefore the courts. We of further fi likelihood is no there deductible against which available can be utilised. differences temporary of judgement Other areas and consideration whether an IFRIC 4 ‘Determining a lease’ constitutes arrangement the considered have The Directors of IFRIC 4 ‘Determining requirements constitutes whether an arrangement a lease’. arrangement that any IFRIC 4 requires that is dependent on the use of a c asset or assets; and that conveys specifi for use the asset is accounted to a right concluded have The Directors, as a lease. are contracts that none of the Group’s dependent on the use of a specifi in and can swap or assets as the Group fl out the rental our customers. the services to Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko ect ned as the gross and the applicable the year t for debtor value plus accrued revenue, revenue, plus accrued value debtor security/guarantees payment less any and bad debt provision). on a case by reviewed are Contracts the customer determine case basis to of the and country risk. As a result management, risk to approach rigorous level has had a low the Group historically does The Group of bad debt write-offs. our especially in in countries, operate are payments PSU business, where political and where unpredictable, that there mean conditions economic can and that risk of default is a risk and has increased quickly, increase the therefore as set out above, this year not be may in this area history Group’s outcome. future of the likely indicative is uncollectable, receivable When a trade off against the provision it is written receivables. of trade impairment for for 2018,At 31 December the provision in the receivables of trade impairment million (2017: £85 was sheet balance million). £80 Taxation is based on the tax charge Aggreko’s profi sheet at the balance in force tax rates tax, Aggreko as corporation As well date. as such taxes indirect is subject to across taxes sales and employment the Group in which the tax jurisdictions and nature The varying operates. the requires of the tax laws complexity its tax positions and review to Group judgements at the appropriate make sheet date. balance of the tax the uncertain nature Due to in of the countries in many environment some time take it can operate, we which therefore our tax position. We settle to for tax provisions appropriate create or contentious cant potential signifi measured tax positions and these are method. outcome using the most likely on an considered are Provisions individual basis. an open tax issue in have to continue We in 2017 appealed Bangladesh. This was the by be heard to waiting and is now the Group’s net exposure (including the (including net exposure the Group’s in with PDVSA notes placement private million, million and $10 of $16 Venezuela) of these countries. in each respectively, positions refl These net exposure provisions of bad debt a combination security/guarantees and payment gross and 59% of the 78% representing of Venezuela in each value receivable fair with a 75% together and Yemen, adjustment against the private value While with PDVSA. notes placement well relatively remain that we believe we these net exposure recover positioned to situation amounts when the current stabilises, we of the countries in each is a range that there also recognise both each, for outcomes of potential the net exposure. and below above is defi (Net exposure le and le c detail c c ecting the differing in the PSU business, cant debtors Trade receivables continued receivables Trade a credit unit level At an operating each for established is normally rating from based on ratings customer external available, are no ratings agencies. Where are terms payment cash in advance customers. new established for often on a regular reviewed are limits Credit the of the contracts basis. The majority to small relative are into enters Group and, if a customer of the Group the size with in a debt, pay this is dealt to fails of business. However, course the normal the Group some of the contracts in countries in developing undertakes business are Solutions Utility our Power where in jurisdictions and are large, very be unpredictable. can practices payment see to continued we the year During from in payments delays a handful of Solutions Utility in our Power customers business in Africa, and Venezuela. Yemen this business for The bad debt provision $83 million 2018 was unit at 31 December the overall $82 million). Although (2017: in line with the broadly was provision refl year, prior the bad customer, by circumstances against specifi debt provision in Africa, and customers Yemen $6 million, by increased Venezuela the during elsewhere while progress in provision a reduction led to year of $5 million. against other customers profi the risk monitors The Group 1 Accounting policies 1 Accounting continued debtor position of all such contracts contracts position of all such debtor of a variety and deploys regularly, of the risks mitigate to techniques these include or non-payment; delayed and payments advance securing contracts, On the largest guarantees. approved are arrangements all such level. at Group on the its view In forming provision of the Group’s appropriateness the balances, against its receivables discussed the 15 most Committee Audit signifi 78%) 82% for (2017: accounted which value debtor PSU overdue of the total into taking 2018 (before at 31 December security/ or payment provisions account 2018, At 31 December 81% guarantees). of the PSU impairment 83%) (2017: 15 debtors. these top to related provision had a the Group Among these debtors, one $40 million to above net exposure between a net exposure customer, a net customers, two million to $30-$40 million to $20-$30 between exposure of and a net exposure customers four of the each less than $20 million to these PSU debtors, others. In addition to discussed the Group’s the Committee which Venezuela, to exposure overall some outstanding balances includes the within the PSI business. Given in Venezuela political uncertainty current the in Yemen, and the ongoing civil war in specifi considered Committee NOTES TO THE GROUP ACCOUNTS CONTINUED

1 Accounting policies The Group maintains suffi cient Group borrowings are predominantly continued facilities to meet its normal funding drawn down in the currencies affecting requirements over the medium term. the Group. The Group manages its Hyperinfl ationary environments At 31 December 2018, these facilities currency fl ows to minimise foreign The Group operates in Venezuela totalled £1,191 million in the form of exchange risk arising on transactions which is considered a hyperinfl ationary committed bank facilities arranged denominated in foreign currencies environment. The Group does not on a bilateral basis with a number and uses forward contracts where consider that the provisions of IAS 29 of international banks and private appropriate in order to hedge net ‘Financial Reporting in Hyperinfl ationary placement notes. currency fl ows. Economies’ apply to the Group’s operations in Venezuela as the The fi nancial covenants attached to The impact of currency decreased our functional currency of the Venezuelan these facilities are that EBITDA should revenues by £112 million (2017: increased operation is US Dollars. The Group be no less than four times interest and by £84 million) and operating profi t by operates in Argentina which is net debt should be no more than three £24 million (2017: increased by £9 million) considered a hyperinfl ationary times EBITDA; at 31 December 2018, for the year ended 31 December 2018. environment however the impact these stood at 14* times and 1.3* times The Group monitors the impact of is not material. respectively. The Group does not expect exchange closely and regularly carries to breach these covenants in the year Financial risk management out sensitivity analysis. For every 5% from the date of approval of these Financial risk factors movement in the US Dollar to GBP fi nancial statements. The Group’s operations expose it to a exchange rate there is an approximate variety of fi nancial risks that include The Group expects to be able to arrange impact of £4 million (2017: £4 million) in liquidity, the effects of changes in foreign suffi cient fi nance to meet its future operating profi t in terms of translation. currency exchange rates, interest funding requirements. It has been Currency translation also gave rise to rates and credit risk. The Group has a the Group’s custom and practice to a £24 million decrease in reserves as centralised treasury operation whose refi nance its facilities in advance of their a result of year on year movements primary role is to ensure that adequate maturity dates, providing that there in the exchange rates (2017: decrease liquidity is available to meet the Group’s is an ongoing need for those facilities. of £98 million). For every 5% movement funding requirements as they arise, Net debt amounted to £686 million in the US Dollar, there is an approximate and that fi nancial risk arising from at 31 December 2018 and, at that date, impact in equity of £30 million (2017: the Group’s underlying operations is undrawn committed facilities were £31 million) arising from the currency effectively identifi ed and managed. £465 million. The maturity profi le translation of external borrowings which of the borrowings is detailed in Note 18 The treasury operations are conducted in are being used as a net investment in the Annual Report and Accounts. accordance with policies and procedures hedge. However, this will be offset by a approved by the Board and are reviewed Interest rate risk corresponding movement in the equity annually. Financial instruments are The Group’s policy is to manage the of the net investment being hedged. only executed for hedging purposes exposure to interest rates by ensuring The principal exchange rates which and transactions that are speculative an appropriate balance of fi xed and impact the Group’s profi t and net assets in nature are expressly forbidden. fl oating rates. Monthly reports are provided to senior are set out in the Financial Review on At 31 December 2018, £591 million of management and treasury operations page 27. the net debt of £686 million was at fi xed are subject to periodic internal and Credit risk rates of interest resulting in a fi xed to external review. Cash deposits and other fi nancial fl oating rate net debt ratio of 86:14 instruments give rise to credit risk Liquidity, funding and capital (2017: 94:6). The proportion of our debt on amounts due from counterparties. management with fi xed interest rates was higher than The Group manages this risk by limiting The intention of Aggreko’s strategy usual at the 2018 and 2017 year ends due the aggregate amounts and their is to deliver long-term value to its to some fi xed rate debt maturities in the duration depending on external credit shareholders while maintaining a fi rst half of 2018 and 2019. balance sheet structure that safeguards ratings of the relevant counterparty. The Group monitors its interest rate the Group’s fi nancial position through In the case of fi nancial assets exposed exposure on a regular basis by applying economic cycles. Total capital is equity to credit risk, the carrying amount in forecast interest rates to the Group’s as shown in the Group balance sheet. the balance sheet, net of any applicable forecast net debt profi le after taking provisions for loss, represents the Given the proven ability of the business into account its existing hedges. amount exposed to credit risk. to fund organic growth from operating The Group also calculates the impact Management of trade receivables cash fl ows, and the nature of our on profi t and loss of a defi ned interest Refer to page 102. business model, we believe it is sensible rate shift for all currencies. Based on the to run the business with a modest Insurance simulations performed, the impact on amount of debt. We say ‘modest’ The Group operates a policy of buying profi t or loss of a +/– 100 basis-point because we are strongly of the view that cover against the material risks which shift, after taking into account existing it is unwise to run a business which has the business faces, where it is possible hedges, would be £1 million (2017: high levels of operational gearing with to purchase such cover on reasonable £1 million). The sensitivity analysis high levels of fi nancial gearing. Given the terms. Where this is not possible, is performed on a monthly basis above considerations, we believe that or where the risks would not have and is reported to the Board. a Net Debt to EBITDA ratio of around a material impact on the Group one times is appropriate for the Group Foreign exchange risk as a whole, we self-insure. over the longer term. This is well within The Group is subject to currency our covenants to lenders which stand exposure on the translation of its net at three times Net Debt to EBITDA. investments in overseas subsidiaries into Sterling. In order to reduce the At 31 December of 2018, Net Debt to currency risk arising, the Group uses EBITDA was 1.3* times (2017: 1.2 times). direct borrowings in the same currency as those investments.

* Calculation is on pages 141 and 142.

104 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information e 3 8 11 17 17 71 14 93 59 (12) 122 2017 2017 2017 2017 579 105 429 690 454 1,698 1,008 £ million £ million £ million £ million Restated (Notes 1, 4(a)) (Notes 7 8 15 (9) 76 85 514 2018 2018 2018 2018 2018 822 938 424 1,760 External revenue External £ million £ million £ million be available to unrelated third parties. third All unrelated to be available Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko all non-utility ned our segmental reporting and reassigned t ow statement, proceeds from proceeds statement, comprise: ow sale of PPE statement. the income in within other income is shown t on sale of PPE t on sale of PPE Utility Industrial inter-segment revenue was less than £1 was million. revenue inter-segment Profi Group Proceeds fromProceeds sale of PPE Rental Solutions Cash and cash equivalents Profi 18) (Note Bank overdrafts Operating profi Operating customer contracts from within our Power Solutions Utility business into Power Solutions Industrial. Accordingly the comparativ Accordingly Solutions Industrial. Power from contracts business into Solutions Utility customer within our Power Revenue 4 Segmental reporting refi have we focus sector increased of the Group’s (A) As a result Cash at bank and in hand Cash 3 Cash and cash equivalents and to and results balances Solutions Utility Power stated the previously reduce to The impact was been restated. have gures fi below. amounts shown the by and results balances Solutions Industrial the Power increase and amortisationDepreciation expenditure Capital Net book amount 2 Proceeds from2 Proceeds plant and equipment sale of property, In the cash fl Net operating assets Net operating Average number of employees Average for segmental information and restated segmental information reported previously between a reconciliation 30 contains Note 2017. ended 31 December the year segment by (B) Revenue Power Solutions Power (i) Inter-segment transfers or transactions are entered into under the normal commercial terms and conditions that would also would that and conditions terms commercial under the normal into entered are or transactions transfers (i) Inter-segment NOTES TO THE GROUP ACCOUNTS CONTINUED

4 Segmental reporting continued (B) Revenue by segment continued Disaggregation of revenue In the tables below revenue is disaggregated by geography and by sector. Revenue by geography 2017 Restated 2018 (Note 1) £ million £ million North America 460 369 UK 106 93 Continental Europe 179 136 Eurasia 77 85 Middle East 148 168 Africa 200 246 Asia 166 168 Australia Pacifi c 100 89 Latin America 324 344 1,760 1,698

Revenue by sector 31 December 2018 31 December 2017 PSI PSU RS Group PSI PSU RS Group £ million £ million £ million £ million £ million £ million £ million £ million Utilities 27 514 99 640 24 579 79 682 Oil & gas 163 – 110 273 166 - 63 229 Petrochemical & refi ning 9 – 147 156 8 - 114 122 Building services & construction 48 – 151 199 62 - 148 210 Events 53 – 80 133 37 - 66 103 Manufacturing 32 – 56 88 42 - 57 99 Quarrying & mining 53 – 43 96 55 - 35 90 Other 39 – 136 175 35 - 128 163 424 514 822 1,760 429 579 690 1,698

(C) Profi t by segment Operating profi t 2017 Restated 2018 (Notes 1, 4(a)) £ million £ million Power Solutions Industrial 71 73 Utility 43 70 114 143 Rental Solutions 105 81 Operating profi t pre-exceptional items 219 224 Exceptional items (Note 7) – (41) Operating profi t post-exceptional items 219 183 Finance costs – net (37) (34) Profi t before taxation 182 149 Taxation (57) (47) Profi t for the year 125 102

106 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information (3) 75 63 96 89 115 313 175 (25) (86) 2017 2017 2017 2017 (112) (711) 238 107 204 300 (100) (336) (224) (436) 2,515 1,629 1,834 (1,261) 5,978 3,463 Number £ million £ million £ million Restated Restated Restated Restated (Note 4(a)) (Note 4(a)) (Note (Notes 4(a)) (Notes (Notes 1, 4(a)) (Notes – (1) 55 76 90 131 Liabilities (76) 109 194 2018 2018 2018 2018 2018 2018 2018 (90) 104 (94) 104 298 240 (214) (762) 1,314 (308) (384) 1,954 2,759 3,268 6,027 (1,237) Number £ million £ million £ million – – – 65 2017 765 943 802 1,745 2,510 2,575 £ million Restated (Notes 1, 4(a)) (Notes 1 1 – Assets Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko 59 714 2018 2018 833 996 1,710 2,543 £ million t surplus/(obligation) t nancial instruments nancial nance assets/(liabilities) nance Utility Utility Utility Industrial Industrial Industrial Utility Industrial (E) Capital expenditure on property, plant and equipment segment and intangible assets by on property, (E) Capital expenditure Group Group Rental Solutions million), additions £272 (2017: million of £216 plant and equipment (PPE) additions of property, comprises expenditure Capital of million), and acquisitions £28 of £13 million (2017: of PPE acquisitions million), £5 of intangible assets of £10 million (2017: million). £8 intangible assets of £1 million (2017: segment (F) Assets/(liabilities) by Rental Solutions Group Power Solutions Power Power Solutions Power 4 Segmental reporting continued and(D) amortisationDepreciation segment by Retirement benefi Retirement Derivative fi Derivative Borrowings Power Solutions Power Group and fi Tax Rental Solutions Power Solutions Power Rental Solutions Total assets/(liabilities) per balance sheet assets/(liabilities) per balance Total 2,604 (G) Average number of employees by segment by number of employees (G) Average NOTES TO THE GROUP ACCOUNTS CONTINUED

4 Segmental reporting continued (H) Geographical information Non-current assets 2017 Restated 2018 (Note 4(a)) £ million £ million North America 288 253 UK 161 110 Continental Europe 137 119 Eurasia 59 70 Middle East 251 343 Africa 153 159 Asia 151 150 Australia Pacifi c 70 67 Latin America 164 161 1,434 1,432

Non-current assets exclude deferred tax. (I) Reconciliation of net operating assets to net assets 2017 Restated 2018 (Note 1) £ million £ million Net operating assets 2,159 2,074 Retirement benefi t surplus/(obligation) 1 (25) Net tax and fi nance payable (31) (21) 2,129 2,028 Borrowings and derivative fi nancial instruments (762) (714) Net assets 1,367 1,314

5 Profi t before taxation The following items have been included in arriving at profi t before taxation: 2018 2017 £ million £ million Staff costs (Note 8) 422 401 Depreciation of property, plant and equipment 293 296 Amortisation of intangibles (included in administrative expenses) 5 4 Net gain on disposal of property, plant and equipment (7) (3) Research costs 1 2 Net foreign exchange (gains)/losses (i) (1) 2 Operating lease rentals payable 38 39

(i) The translational impact of currency on the Group’s revenue and profi t is discussed in the Group Performance Review on page 27.

108 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information 1 – – 3 2 2 7 9 8 8 13 32 50 (36) (36) 941 2017 2017 2017 2017 401 345 109 248 £000 £ million £ million £ million Restated ect this. ect 1 3 2 2 3 4 12 10 10 14 (4) 33 43 (41) (37) 2018 2018 2018 2018 2018 2018 332 363 422 £000 1,029 £ million £ million £ million to changed nition was t pension scheme. ned benefi ned Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko ts for 2017 by £4 million and share-based payments payments million and share-based £4 2017 by ts for 29.A5) assets (Note t scheme 29.A5)t plans (Note ts ned benefi ned nancial statements nancial nance charge nance nition of exceptional items is contained within Note 1 of the 2018 Annual Report and Accounts. There were no exceptional no exceptional were There Report 1 of the 2018 Annual and Accounts. within Note is contained items nition of exceptional – tax compliance – other assurance related services related – other assurance – the audit of the Company’s subsidiaries – the audit of the Company’s In addition to the above services, the Group’s auditor acted as auditor to the Group’s defi the Group’s to as auditor acted auditor services, the Group’s the above In addition to other services are any of the audit and for paid in respect and the fees this pension scheme to The appointment of the auditor paid to who acts independently from fees of the scheme, The aggregate the Trustee by agreed the management of the Group. £8k). (2017: £8k were the year during the pension scheme services audit and non-audit to for auditor the Group’s Finance income on employee benefi on employee income Finance Pension costs – defi plans ned contribution – defi costs Pension – defi costs Pension 9 Net fi on bank loans and overdrafts cost Finance Social security costs Social security benefi employee Short-term In 2018 this defi Directors. and Non-executive Executive management comprised key year In the prior refl to been changed numbers have year Prior Directors. as Non-executive members as well Committee the Executive 29.A5) liabilities (Note t scheme benefi on employee cost Finance and deposits on bank balances income Finance Staff costs for the Group during the year: during the Group for Staff costs costs) severance (including and salaries Wages items in 2018. An exceptional charge of £41 million before tax was recorded in the year to 31 December 2017 in respect of the 2017 in respect 31 December to in the year recorded tax was million before of £41 charge in 2018. An exceptional items million of professional £8 costs, related million of employee £22 comprised The costs programme. Business Priorities Group’s of employees as the costs as well costs severance to related costs The employee costs. and £11fees related million of property Rental split into was charge This exceptional implementation. programme Priorities full time on the Business working who were £17 Solutions – Utility million. £11 Solutions – Industrial million and Power Solutions £13 million, Power and Directors 8 Employees The defi 7 Exceptional items 7 Exceptional Fees payable to the Company’s auditor and its associates for other services: for and its associates auditor the Company’s to payable Fees payments Share-based benefi employee short-term increase is to The impact of the restatement £1by million. Audit services Audit and annual accounts the audit of the Company’s for auditor the Company’s to payable Fees fi consolidated 6 Auditor’s remuneration 6 Auditor’s Key management personnel compensation Key management The key 79. Report set out in the Remuneration on pages 62 to are remuneration details of Directors’ Full Directors. as Non-executive as set out on page 50 as well Committee the Executive comprises the following: comprised management compensation Key Share-based payments Share-based NOTES TO THE GROUP ACCOUNTS CONTINUED

10 Taxation Total before exceptional Exceptional items 2017 items 2017 Restated (Note 7) Restated 2018 (Note 1) 2017 (Note 1) £ million £ million £ million £ million Analysis of charge in year Current tax expense: – UK corporation tax 6 11 (2) 9 – Overseas taxation 62 77 (7) 70 68 88 (9) 79 Adjustments in respect of prior years: – UK (2) (2) – (2) – Overseas (17) (3) – (3) 49 83 (9) 74 Deferred taxation (Note 22): – Temporary differences arising in current year 5 (27) – (27) – Movements in respect of prior years 3 ––– 57 56 (9) 47

(i) Prior year exceptional items are explained in Note 7 and comprised costs of £41 million relating to our Business Priorities programme. Of these costs, £41 million were tax deductible and resulted in an exceptional tax credit of £9 million. The tax charge relating to components of other comprehensive income is as follows: 2018 2017 £ million £ million Deferred tax on hedging reserve movements – (1) Deferred tax on retirement benefi ts (5) (1) (5) (2)

Variances between the current tax charge and the standard 19% (2017: 19%) UK corporate tax rate when applied to profi t on ordinary activities for the year are as follows: Total before exceptional Exceptional items 2017 items 2017 Restated (Note 7) Restated 2018 (Note 1) 2017 (Note 1) £ million £ million £ million £ million Profi t before taxation 182 190 (41) 149

Tax calculated at 19% standard UK corporate tax rate 35 37 (8) 29 Differences between UK and overseas tax rates 32 30 (1) 29 Expenses not tax effected 6 8–8 Income not subject to tax (1) (3) – (3) Impact of deferred tax rate changes in relation to US tax reform – (10) – (10) Impact of deferred tax rate changes – non US 1 (1) – (1) Tax on current year profi t 73 61 (9) 52 Prior year adjustments – current tax* (19) (5) – (5) Prior year adjustments – deferred tax 3 –– – Total tax on profi t5756 (9) 47

Effective tax rate 31% 29% 23% 31%

* The main components of the prior year credit are the release of a provision in respect of a historic matter in Yemen and other Power Solutions movements.

110 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information 111 0.2 2017 2017 2017 2017 31.7 o 133.7 102.0 102.0 102.0 40.01 254.7 254.7 254.9 52.48 52.44 (Note 1) (Note 1) (Note 1) (Note 40.04 £ million Restated Restated Restated per share (p) per share – 24 9.38 69 27.12 45 17.74 0.2 2017 2018 2018 2018 125.4 125.4 125.4 125.4 49.18 49.18 255.0 49.22 49.22 254.8 254.8 £ million £ million 2018 2018 per share (p) per share Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko 24 9.38 69 27.12 45 17.74 2018 2018 £ million nancial year ended 31 December 2018 of 17.74 pence pence 2018 of 17.74 ended 31 December nancial year of the fi in respect nal dividend below. is presented gure items pre-exceptional the year t for the year t for (£ million) the year t for (£ million) the year t for Diluted earnings per share (pence) per share earnings Diluted 33, with IAS in accordance calculated per share, adjusting earnings by of the Group plc assesses the performance Aggreko comparison a better provides items of such that the exclusion and believes be non-recurring to it considers items exclude to is based items exceptional excludes on a basis which per Ordinary Share The calculation of earnings of business performance. earnings. adjusted on the following For diluted earnings per share, the weighted average number of Ordinary Shares in issue is adjusted to assume conversion assume conversion to in issue is adjusted number of Ordinary Shares average the weighted per share, earnings diluted For is less price the exercise where employees to options granted share represent These Ordinary Shares. dilutive of all potentially as above calculated number of shares The the year. during Ordinary Shares of the Company’s price market than the average options. of the share been issued assuming the exercise have that would with the number of shares is compared in issue (million) of Ordinary number Shares average weighted Diluted Adjustment for share options share Adjustment for (pence) items pre-exceptional per share earnings Diluted Basic earnings per share (pence) per share Basic earnings Weighted average number of Ordinary Shares in issue (million) number of Ordinary Shares average Weighted items exceptional Exclude Profi fi per share earnings An adjusted (pence) items pre-exceptional per share Basic earnings Weighted average number of Ordinary Shares in issue (million) number of Ordinary Shares average Weighted Profi Profi Profi 12 Earnings per share the weighted by ordinary Shareholders to attributable the earnings dividing by been calculated have per share Basic earnings are which Ownership Trusts Share the Employee held by shares excluding the year, in issue during number of shares average as cancelled. treated Final paid Final 11 Dividends Interim paid Interim are on the register of members on 23 April 2019. of members on 23 April on the register are In addition, the Directors are proposing a fi proposing are In addition, the Directors wh shareholders 2019 to May funds. It will be paid on 24 million of Shareholders’ £45 an estimated will utilise which per share NOTES TO THE GROUP ACCOUNTS CONTINUED

13 Goodwill 2018 2017 £ million £ million Cost At 1 January 184 159 Acquisitions (Note 28) 3 35 Exchange adjustments (3) (10) At 31 December 184 184

Accumulated impairment losses – –

Net book value 184 184

Goodwill impairment tests Goodwill has been allocated to cash-generating units (CGUs) as follows: 2018 2017 £ million £ million Power Solutions Industrial 59 54 Utility 22 34 81 88 Rental Solutions 103 96 Group 184 184

Goodwill is tested for impairment annually or whenever there is an indication that the asset may be impaired. Goodwill is monitored by management at an operating segment level. The recoverable amounts of the CGUs are determined from value in use calculations which use cash fl ow projections based on the fi ve-year strategic plan approved by the Board. The key assumptions for value in use calculations are those relating to expected changes in revenue (utilisation and rates) and the cost base, discount rates and long-term growth rates, are as follows: 2018 2017 Post-tax Pre-tax Long-term Post-tax Pre-tax Long-term EBITDA discount discount growth EBITDA discount discount growth £ million rate rate rate £ million rate rate rate Power Solutions Industrial 161 8.4% 12.2% 3% 127 8.1% 11.4% 3% Power Solutions Utility 147 8.4% 12.2% 3% 225 8.1% 11.4% 3% Rental Solutions 209 8.4% 12.2% 3% 177 8.1% 11.4% 3%

Values in use were determined using current year cash fl ows, a prudent view of the medium-term business strategy and exclude any growth capital expenditure. A terminal cash fl ow was calculated using a long-term growth rate of 3%. On the basis that the business carried out by all CGUs is closely related and assets can be redeployed around the Group as required, a consistent Group discount rate has been used for all CGUs. As at 31 December 2018, based on internal valuations, management concluded that the values in use of the CGUs exceeded their net asset value with the highest headroom value being £1.4 billion and the lowest £236 million. Given these headroom numbers the Directors consider that there is no reasonably possible change in the key assumptions made in their impairment assessment that would give rise to an impairment.

112 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information 113 Total Total Total Total £ million £ million Vehicles, Vehicles, £ million £ million Vehicles, Vehicles, plant and plant and equipment equipment eet eet £ million £ million Rental fl Rental fl Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko £ million £ million properties properties Short leasehold Short leasehold Short leasehold 51 5 1,104 54 1,214 35 15 2,296 98 2,444 86 20 3,400 152 3,658 £ million Freehold Freehold £ million Freehold Freehold properties properties eet. Cost At 1 January 2017 adjustmentsExchange AdditionsAcquisitionsDisposals 2017 At 31 December depreciation Accumulated At 1 January 2017 adjustmentsExchange the year for Charge Disposals 2017 At 31 December Net book values: 2017 At 31 December 2016At 31 December within Rental fl included are of construction Assets in course (3) 91 (1) 22 1 – (2) (256) (3) 36 3,475 3 – 1 (7) – (2) 136 16 (2) 55 246 1 (267) 23 (172) 3,724 (88) 2,272 (2) 275 24 6 (5) 5 (6) 91 (79) 1,203 272 17 (179) (99) 2,415 28 (5) 45 296 1,309 (88) Cost At 1 January 2018 adjustmentsExchange Additions 28) (Note Acquisitions Disposals 2018At 31 December depreciation Accumulated At 1 January 2018 adjustmentsExchange the year for Charge Disposals 2018At 31 December Net book values: 2018At 31 December 2017At 31 December 2017 ended 31 December Year 4 86 – 92 1 20 2 – 2 3,400 – 35 23 102 3 2 40 13 3,612 152 – 15 – 52 2 196 – 51 1 16 3,658 168 2,296 77 – (99) 109 7 2,555 273 3,895 16 5 – 98 1,057 (2) 13 3 115 1,104 216 16 (91) 2,444 (101) 53 82 2,726 293 54 (2) 1,169 1,214 (93) 14 Property, plant and plant equipment 14 Property, 2018 ended 31 December Year NOTES TO THE GROUP ACCOUNTS CONTINUED

15 Fulfi lment asset 2018 2017 £ million £ million Balance at 1 January 8 16 Capitalised in period 44 12 Provision created for future demobilisation costs 3 2 Amortised to the income statement (12) (22) Exchange 1 - Balance at 31 December 44 8

Analaysis of fulfi lment assets Current 15 5 Non-current 29 3 Total 44 8

16 Inventories 2018 2017 £ million £ million Raw materials and consumables 226 221 Work in progress 3 11 229 232

The cost of inventories recognised as an expense within cost of sales amounted to £85 million (2017: £112 million). The write down of inventories to net realisable value amounted to £5 million (2017: £6 million).

17 Trade and other receivables 2018 2017 £ million £ million Trade receivables 587 570 Less: provision for impairment of receivables (85) (80) Trade receivables – net 502 490 Prepayments 45 57 Accrued income 169 139 Other receivables (Note (i)) 65 84 Total receivables 781 770

(i) In September 2016, the Group signed £14 million of private placement notes with one customer in Venezuela (PDVSA) to progress clearing the overdue debt. This resulted in a fi nancial instrument which replaced the net trade receivable balance. The fi nancial instrument is booked at fair value which refl ects our estimation of the recoverability of these notes. This fair value is estimated to be £4 million (2017: £4 million). This fi nancial instrument is included in other receivables. Other material amounts included in other receivables include indirect taxes receivable (such as sales taxes) of £21 million (2017: £24 million) and deposits of £15 million (2017: £11 million). (ii) The value of trade and other receivables quoted in the table above also represents the fair value of these items. The carrying amounts of the Group’s trade and other receivables are denominated in the following currencies: 2018 2017 £ million £ million Sterling 24 33 Euro 125 110 US Dollar 373 348 Other currencies 259 279 781 770

114 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information (3) (3) (6) 25 36 67 24 90 80 115 156 2017 2017 Total Total 306 Total Total £ million £ million £ million Restated £ million he 2 7 (2) (2) 72 38 85 50 80 162 2018 2018 2018 2018 322 £ million Restated Impaired Impaired £ million £ million £ million Impaired Impaired £ million Past due due Past Restated £ million Past due due Past 71 64 10 145 55 47 8 110 53 202 64 319 56 56 11 123 62 188 62 312 67 71 10 148 Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko 117 235 70 422 109 258 75 442 184 306 80 570 180 322 85 587 £ million Restated £ million Fully performing Fully Fully performing performing Fully established is normally rating a credit unit level cant outstanding debts. At an operating Utility Industrial Industrial Utility Credit quality of trade receivables of trade quality Credit past due and impaired. fully performing, segment into per operating balance receivables trade the total analyses The table below 2018 31 December Utilised At 31 December Receivables written off during the year as uncollectable the year off during written Receivables Exchange Net provision for receivables impairment receivables for Net provision Between 30 and 60 days Between than 90 days Greater Between 60 and 90 days Between below: as explained quality assesses credit The Group Solutions – Industrial Power of t the size to small relative in this business are of the contracts business and the majority intensive This is a transaction Group. There is no concentration of credit risk in this business and there is a large number of customers who are unrelated unrelated who are number of customers is a large there in this business and risk of credit is no concentration There Group. dispersed. and internationally on Group report to monthly they units, although of the operating is the responsibility receivables The management of trade ageing and signifi debtor days, debtor terms payment cash in advance available, are from ratings no based on ratings agencies. Where customer each for external process of this credit basis. The effectiveness on a regular reviewed limits are Credit customers. new established for often are the year off during written of bad debt in this business. Receivables level had a low has historically that the Group has meant nil%). 2% (2017: was debtors gross of total as a percentage as uncollectable At 1 January 17 Trade and other receivables continued and other receivables 17 Trade as follows: are receivables of trade impairment for provision on the Group’s Movements Power Solutions Power Rental Solutions Group Power from balances to of non-utility Solutions Utility transfer of the account Power take to been restated 2017 numbers have Solutions Industrial. receivables trade due but notAgeing impaired of past Power Solutions Power Rental Solutions Group 2017 31 December Less than 30 days Less NOTES TO THE GROUP ACCOUNTS CONTINUED

17 Trade and other receivables continued Power Solutions – Utility This business concentrates on medium to very large contracts. Customers are mainly state owned utilities in emerging markets. In many instances these contracts are in jurisdictions where payment practices can be unpredictable. The Group monitors the risk profi le and debtor position of all such contracts regularly, and deploys a variety of techniques to mitigate the risks of delayed or non-payment; including securing advance payments, bonds and guarantees. On the largest contracts, all such arrangements are approved at a Group level. Contracts are reviewed on a case by case basis to determine the customer and country risk. To date the Group has also had a low level of bad debt in the Power Solutions Utility business. The total trade receivables balance as at 31 December 2018 for our Power Solutions Utility business was £319 million (2017: £312 million). Within this balance, receivable balances totalling £32 million (2017: £41 million) had some form of payment cover attached to them. This payment cover guards against the risk of customer default rather than the risk associated with customer disputes. The risk associated with the remaining £287 million (2017: £271 million) is deemed to be either acceptable or payment cover is not obtainable in a cost-effective manner. Rental Solutions This business is similar to the Power Solutions Industrial business above and the management of trade receivables is similar. Again the Group has historically had a low level of bad debt in the Rental Solutions business. Receivables written off during the year as uncollectable as a percentage of total gross debtors was 1% (2017: 2%).

18 Borrowings 2018 2017 £ million £ million Non-current Bank borrowings 134 103 Private placement notes 493 481 627 584

Current Bank overdrafts 9 12 Bank borrowings 115 72 Private placement notes 20 55 144 139 Total borrowings 771 723 Cash at bank and in hand (85) (71) Net borrowings 686 652

Overdrafts and borrowings are unsecured. (i) Maturity of fi nancial liabilities The maturity profi le of the borrowings was as follows: 2018 2017 £ million £ million Within 1 year, or on demand 144 139 Between 1 and 2 years 104 79 Between 2 and 3 years 157 26 Between 3 and 4 years 11 146 Greater than 5 years 355 333 771 723

116 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information 1 – – – 2 2 2 9 9 8 11 16 10 10 29 77 78 50 50 (6) 64 (10) 117 127 160 2017 2017 2017 410 383 624 (Note 1) (Note £ million £ million £ million £ million Priorities Priorities Business Restated Programme Programme 1 – – 5 6 8 4 11 11 15 10 (4) 99 89 115 371 134 2018 2018 2018 2018 100 276 465 £ million £ million £ million Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko oating rate borrowing facilities available at 31 December 2018 in respect respect 2018 in at 31 December available facilities borrowing rate oating The value of trade and other payables quoted in the table above also represents the fair value of these items. value the fair also represents in the table above quoted payables and other of trade The value Expiring between 4 and 5 years between Expiring Deferred income Deferred Expiring between 3 and 4 years 3 and between Expiring Accruals Non-current Total Expiring between 2 and 3 years 2 and between Expiring Other payables Balance at 31 December Balance of demobilisation provision Analysis Current Other taxation and social security payable and social security Other taxation Expiring between 1 and 2 years 1 and between Expiring Utilised Exchange 20 Provisions Trade payables Trade 19 Trade and other payables 19 Trade Expiring within 1 year within Expiring 18 Borrowings continued 18 Borrowings facilities (ii) Borrowing fl committed undrawn has the following The Group of which all conditions precedent had been met at that date: had been met at that precedent all conditions of which Utilised adjustments Exchange At 1 January 2018 At 31 December 2018 At 31 December Total Analysis of total provisions of total Analysis Current Non-current costs. of depot closure in respect generally are programme the implementation of the Business Priorities for The provisions the end of 2019. be fully utilised by to is expected The provision Balance at 1 JanuaryBalance 21 Demobilisation provision New provisions New NOTES TO THE GROUP ACCOUNTS CONTINUED

22 Deferred tax 31 December 2018 Debit to Debit to other At income comprehensive Exchange At 1 January statement income differences 31 December 2018 2018 2018 2018 2018 £ million £ million £ million £ million £ million Fixed asset temporary differences (40) – – (4) (44) Retirement benefi t obligations 4–(5)1– Overseas tax on unremitted earnings – (1) – – (1) Tax losses 32 (2) – – 30 Other temporary differences 24 (5) – (2) 17 20 (8) (5) (5) 2

31 December 2017 Credit/(debit) Debit to other Deferred tax At to income comprehensive in relation to Exchange At 1 January statement income acquisition differences 31 December 2017 2017 2017 2017 2017 2017 £ million £ million £ million £ million £ million £ million Fixed asset temporary differences (71) 32 – (2) 1 (40) Retirement benefi t obligations 5 – (1) – – 4 Overseas tax on unremitted earnings (1) 1–––– Tax losses 40 (8) – – – 32 Derivative fi nancial instruments 1 – (1) – – – Other temporary differences 22 2–––24 (4) 27 (2) (2) 1 20

A deferred tax liability of £1 million (2017: £nil) has been recognised in respect of unremitted earnings. No other deferred tax liability has been recognised in respect of unremitted earnings of subsidiaries. It is likely that the majority of the overseas earnings will qualify for the UK dividend exemption and the Group can control the distribution of dividends by its subsidiaries. In some countries, local tax is payable on the remittance of a dividend. Were dividends to be remitted from these countries, the additional tax payable would be £15 million. The movements in deferred tax assets and liabilities (prior to offsetting of balances within the same jurisdiction as permitted by IAS 12) during the period are shown below. Deferred tax assets and liabilities are only offset where there is a legally enforceable right of offset and there is an intention to settle the balances net. Deferred tax assets are recognised to the extent that the realisation of the related deferred tax benefi t through future taxable profi ts is probable based on current forecasts. The Group did not recognise deferred tax assets of £31 million (2017: £23 million) of which £27 million (2017: £21 million) relates to carried forward tax losses and £4 million (2017: £2 million) relates to fi xed asset timing differences as our forecasts indicate that these assets will not reverse in the near future. Deferred tax assets of £23 million (2017: £32 million) have been recognised in respect of entities which have suffered a loss in either the current or preceding period. Deferred tax assets have been recognised on the basis it is probable there will be future taxable profi ts against which they can be utilised based on current forecasts and secured long term contracts. The majority of these assets can be carried forward indefi nitely. Deferred tax assets and liabilities 31 December 2018 31 December 2017 Assets Liabilities Net Assets Liabilities Net £ million £ million £ million £ million £ million £ million Fixed asset temporary differences 15 (59) (44) 12 (52) (40) Retirement benefi t obligations ––– 4–4 Overseas tax on unremitted earnings – (1) (1) ––– Tax losses 30 – 30 32 – 32 Other temporary differences 23 (6) 17 24 – 24 Total 68 (66) 2 72 (52) 20 Offset of deferred tax positions (32) 32 – (30) 30 – Net deferred tax 36 (34) 2 42 (22) 20

The net deferred tax asset due after more than one year is £2 million (2017: asset of £20 million).

118 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information – (7) 53 32 25 20 98 119 2017 2017 2017 2017 2017 £000 (1,698) Number £ million £ million £ million 42,059 of shares 527,373 (519,745) 1,048,816 2017 – 21 19 29 67 Number 117 (17) of shares pence). pence). 2018 2018 2018 2018 2018 395 / Number £ million £ million £ million 256,128,201 12,378 188,251,587 17,147 182,700,915 12,278 of shares 527,373 329 (178,992) 1,601,295 1,949,676 18,352,057,648 237 573,643,383,325 19 2018 2018 £000 42,059 2018 2018 Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko Number of shares 256,128,201 12,378 188,251,587 17,147 182,700,915 12,278 18,352,057,648 237 573,643,383,325 19 pence) pence) 775 ⁄ pence) 84 25 ⁄ pence) 306125 ⁄ 18 1 775 ⁄ 1 pence) 395 ⁄ 329 pence (2017: 9 (2017: pence pence (2017: (2017: pence pence (2017: 6 (2017: pence 775 pence (2017: (2017: pence ⁄ 25 ⁄ 84 775 18 ⁄ ve years ve 306125 1 ⁄ 1 pence (2017: 4 (2017: pence 395 ⁄ 329 ve years ve Long-term Incentive Plan maturity Incentive Long-term stock and restricted shares Deferred 0.2%). 2018 (2017: capital as at 31 December of issued share 0.8% represent These shares meet obligations under the plc to Aggreko by using funds provided in the open market a Trust by acquired were These shares the to charged are the scheme of funding and administering Plans. The costs Sharesave Plan and Aggreko Incentive Long-term 2018 was at 31 December of the shares value The market relate. they which to in the period of the Company statement income million). £4 £14 million (2017: 31 December Purchase of shares Purchase Later than one year and less than fi than one year Later After fi After Total (iii) Deferred Ordinary Shares of Ordinary Shares (iii) Deferred At 1 January 31 December and At 1 January and 31 December (iv) Deferred Ordinary Shares of 9 Ordinary Shares (iv) Deferred At 1 January and 31 December (v) Deferred Ordinary Shares of Ordinary Shares (v) Deferred Total 81. on pages 80 to is described shares to and obligations attached The rights At 1 January and 31 December Treasury shares Treasury 24 Treasury shares Treasury 24 Interests in own shares represents the cost of 1,949,676 of the Company’s Ordinary Shares (nominal value 4 (nominal value Ordinary Shares of the Company’s of 1,949,676 the cost represents shares in own Interests (i) Ordinary Shares of 4 of (i) Ordinary Shares 23 Share capital 23 Share 1 January Commitments under non-cancellable operating leases expiring: expiring: leases under non-cancellable operating Commitments one year Within Contracted but not provided for (property, plant and equipment) (property, for but not provided Contracted payments – minimum lease commitments lease 26 Operating 25 Capital commitments Movement during the year was as follows: as was the year during Movement At 1 January 31 December and of 6 Ordinary Shares (ii) Deferred NOTES TO THE GROUP ACCOUNTS CONTINUED

27 Investments in subsidiaries The subsidiary undertakings of Aggreko plc at 31 December 2018, and the main countries in which they operate, are shown below. All companies are wholly owned and, unless otherwise stated, incorporated in the UK or in the principal country of operation and are involved in the supply of modular, mobile power, heating, cooling and related services. All shareholdings are of Ordinary Shares or other equity capital. Country of Company incorporation Registered address Aggreko Algeria SPA* Algeria Extension La Zone Des Activities, N 01, Adrar, Algeria Aggreko Angola Lda Angola Rua 21 Jan, Qunintalao Escola de Enfermagem, Bairro Morro Bento III, District of Samba, Luanda, Angola Aggreko Argentina S.R.L. Argentina 465, 2D, Av. L.N. Alem, Buenos Aires, 1001, Argentina Aggreko Aruba VBA Aruba Weststraat 13, Aruba Aggreko Generators Rental Pty Limited Australia 101, Woodlands Drive, Braeside, VIC, 3195, Australia Aggreko Bangladesh Power Solutions Limited Bangladesh Concord Baksh Tower, Level-6, Plot-11A, Road-48, Block-CWN(A), Kamal Ataturk Avenue, Gulshan-2, Dhaka, Bangladesh Aggreko Belgium NV Belgium 7, Smallandlaan, Antwerpen, 2660, Belgium Aggreko Energia Locacao de Geradores Ltda Brazil 3500, Av. das Américas, – Ed Toronto 2000 – 6° Andar – Barra da Tijuca, Rio de Janeiro, 22640-102, Brazil Aggreko Cameroon S.R.L. Cameroon Centre des Affaires Flatters, Rue Flatters, BP 4999, Bonanjo, Doula, Cameroon Aggreko Canada Inc Canada 199, Bay Street, Suite 2800, Commerce Court West, Toronto, ON, M5L1A9, Canada Younicos Energy Services Ltd Canada 95 Foundry Street, Suite 300, Moncton NB, E1C 5H7, Canada Aggreko Financial Holdings Limited + Cayman 89, Nexus Way, Camana Bay, PO Box 31106, Grand Cayman, KY1-1205, Cayman Islands Islands Aggreko Chile Limitada Chile Galvarino 9450, Parque Industrial Buenaventura, Quilicura, Region Metropolitana, Santiago, Chile Aggreko (Shanghai) Energy Equipment Rental China Building 16, No 99 HuaJia Road, SongJiang District, Shanghai, 201611, China Company Limited Aggreko Colombia SAS Colombia Parque Industrial Gran Sabana Vereda Tibitoc Lote M Unidad 67-A, Tocancipa, Colombia Aggreko Power Solutions Colombia SA ESP Colombia Parque Industrial Gran Sabana, Carretera Snrto Zipaquira Lote 67, Tocancipa – Cundinamarca, Colombia Aggreko Costa Rica S.A. Costa Rica Centro Corporativo Forum I, Torre G, Piso 1, Santa Ana, San José, Costa Rica Aggreko Cote d’Ivoire S.A.R.L. Cote d’Ivoire Vridi Canal – Base Centrale thermique à gaz, Abidjan, Cote d’Ivoire Aggreko Curacao B.V. Curacao Hoogstraat 30, PO Box 3961, Curacao Aggreko (Middle East) Limited** Cyprus 3 Themistokli Dervi, Julia House, P.C. 1066, Nicosia, Cyprus Aggreko DRC S.P.R.L. Democratic 50, Avenue Goma-Commune de la Gombe, Kinshasa Republic of the Congo Aggreko Dominican Republic SRL Dominican Paseo de los Locutores No. 53, Santo Domingo, Dominican Republic Republic Aggreko Energy Ecuador CIA Ecuador E 2324, Rumipamba y Av. Amazonas, Quito, NA, Ecuador Aggreko Finland Oy Finland Hatanpaan Valtatie 13, Tampere, Finland Aggreko France SARL France 5, Rue Boole, Saint-Michel sur Orge, 91240, France Aggreko Gabon S.A.R.L. Gabon Residence Du Golf, Libreville, BP: 4568, Gabon Aggreko Deutschland GmbH Germany Barbarastraße 62, 46282 Dorsten, Germany Younicos GmbH Germany Am Studio 16, 12489 Berlin, Germany Aggreko Hong Kong Limited Hong Kong Lots 1845 and 1846 in DD125 Ho Tsuen, Yuen Long, N.T. Hong Kong, SAR, 00852, Hong Kong Aggreko Energy Rental India Private Limited +++ India “The Chambers”, Offi ce No 501, Plot No 4/12/13, Viman Nagar, Pune, 411014, India Aggreko Energy Services Indonesia PT Indonesia Talavera Tower Lantai 5 Talavera Offi ce Park, Jl. Letjend TB Simatupang Kav 22 – 26, Cilandak Barat Cilandak, Jakarta Selatan, DKI Jakarta 12430 PT Kertabumi Teknindo Indonesia Talavera Tower Lantai 5 Talavera Offi ce Park, Jl. Letjend TB Simatupang Kav 22 – 26, Cilandak Barat Cilandak, Jakarta Selatan, DKI Jakarta 12430

120 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information

121 oor, Roberto Roberto oor, Plaza Building, 8th fl in Capital ces Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko Petaling Jaya, 47301, Malaysia 47301, Jaya, Petaling Taguig City, 1634, Philippines City, Taguig Portugal Graciosa, Federation Maputo, Mozambique Maputo, Panama 507, PA, Panama, Avenue, del Este y Costa Motta Port 4, Building, Champion Parade, Mogoru Moto Ashurst PNG, Level c/- Guinea New District, Papua National Capital Moresby, Republic of Korea Spain 08210, District, Bangkok, Thailand District, Bangkok, Netherlands 1081 JK Amsterdam, 760, Amstelveenseweg The Mali 02 porte Immeuble Samassa, 1 Etage, 2000, abougou ACI Bamako-Lafi Italy A. Italy Assago (MI), 20090, Via 29, Einstein, Peru Peru Callao, 4800, Elmer Faucett Avenida Spain del Valles, Barbera Salvatella, Can Pol.Industrial Mateu, Torre Avinguda 35-37, Japan Japan Tokyo, Chiyoda-ku, Kudan-Minami, Building, 2-2-1 Kunda Ace 4F, Japan Japan Tokyo, Chiyoda-ku, Kudan-Minami, Building, 2-2-1 Kudan Ace 4F, Kenya Kenya Nairobi, 00100, 10729, Box House, Mombasa Road, P.O. Tulip Plot 12100, Russia Russian 625000, Tyumen, Trakt, Tobolsky Building 1, House 8, Stariy 2nd km Ireland Ireland Dublin 2, D02 X576, Quay, One, Sir John Rogerson’s Riverside MexicoMexico Mexico 55717, de Mexico, Estado Tultepec, Coacalco 8, Carretera Mexico 55717, de Mexico, Estado Tultepec, Coacalco 8, Carretera Mexico Mexico D.F., Mexico, 11400, C.P. Popotla Co. 20, No. Mar Cantabrico Poland Poland 05-152, Czosnow, 6 street, Ordona Fort Guinea Nigeria Island, Lagos, Nigeria Road, Victoria 27 Festival Nigeria Island, Lagos, Nigeria Road, Victoria 27 Festival Norway Norway 31, Oslo, Bygg 44, Dragonveien, Sweden 25, Sweden 103 16285, Stockholm, Box Senegal Senegal De Ngor 29912, Dakar, Route Rwanda Rwanda de los, Nyarugenge, Omega House, Boulevard 1st Floor, Panama offi Asvat & Moreno Patton, Malaysia 1A/46, Dana 1 Jalan PJU Pusat Dagangan Berhad House 8 Symphony Level Namibia Namibia Windhoek, Avenue, 344 Independence Thailand Sub-district, Pathumwan 29th Rama I Road, Pathumwan Floor, World, Central Portugal 9880 315 Santa Cruz da Ilha da Graciosa, Do Quitadouro, Velha Estrada Tanzania 158, Salaam, Tanzania Dar Es PO Box 2nd Floor, Ubungo Plaza Unit 209, Country of Country Romania Romania 077180, Ilfov, Tunari, 7A, de Centura Soseaua MauritiusMauritius A, 1 CyberCity, Tower 6th Floor, Services Ltd, Abax Corporate co/o Myanmar Myanmar Yangon, Township, Pazundaung 49th Street, Floor), 112 (First No. Singapore 627532 Singapore, Street, 8B Buroh Singapore 627532 Singapore, Street, 8B Buroh Philippines Global City, Bonifacio Street 27th Star Building, 4th Avenue, Unit 1101, Picadily Papua New New Papua incorporation address Registered South Korea Seoul, 2-gil, Yeongdeungpo-gu, Gukjegeumyung-ro 37 S-Trenue, Unit 3203 South Africa South AfricaRoad, Sunninghill, 2157, 2 Eglin Netherlands New ZealandNew Zealand New 1010, Auckland, 8, Street, 188 Quay Level Mozambique 1, Urbano Distrito Cimento, Polana Bairro No 7, de Julho, 24 Av. 7 Andar, Aggreko Italia S.R.L.Aggreko Company Ltd Ireland Aggreko 27 Investments in subsidiaries continued 27 Investments Aggreko Japan Limited Aggreko Rentals Limited Energy Kenya Aggreko BHD SDN Malaysia Aggreko Aggreko Events Services Japan Ltd Events Aggreko Aggreko Mali S.A.R.L.Aggreko AfricaAggreko Limited SA de CV Mexico Energy Aggreko SA de CV Services Mexico Aggreko ++++ SA de CV Aggreko Mocambique Limitada Aggreko Aggreko Polska Spolka Zorganiczana Spolka Polska Aggreko Lda Graciolica S.R.L. Europe South East Aggreko LLC Eurasia Aggreko Limited Rwanda Aggreko Senegal S.A.R.L.Aggreko Limited PTE (Singapore) Aggreko LTD PTE Milman International Rental South Africa Energy Aggreko (Proprietary) Limited Limited South Korea Aggreko Aggreko Myanmar Co Limited Co Myanmar Aggreko Ltd Rentals (Pty) Namibia Energy Aggreko (NZ) Limited Aggreko Limited Projects Aggreko ++++ Limited Generation Gas Power Aggreko AS Norway Aggreko SA Rentals Panama Energy Aggreko Limited Rentals (PNG) Generator Aggreko S.A.C. Peru Aggreko Rental Solutions Inc Energy Aggreko Aggreko Iberia SA Iberia Aggreko AB Sweden Aggreko Limited Rentals Tanzania Energy Aggreko Limited (Thailand) Aggreko Aggreko Americas Holdings B.V. + Holdings B.V. Americas Aggreko NOTES TO THE GROUP ACCOUNTS CONTINUED

27 Investments in subsidiaries continued Country of Company incorporation Registered address Aggreko Euro Holdings B.V. + The Amstelveenseweg 760, 1081 JK Amsterdam, Netherlands Netherlands Aggreko Rest of the World Holdings B.V. + The Amstelveenseweg 760, 1081 JK Amsterdam, Netherlands Netherlands Aggreko (Investments) B.V. ++ The 3, Fuutweg, Haven 461b, Klundert, 4791PB, Netherlands Netherlands Aggreko Nederland B.V. The 3, Fuutweg, Haven 461b, Klundert, 4791PB, Netherlands Netherlands Aggreko International Power Projects B.V. The Between Roundabouts 7 and 8, Opposite Red Sea Housing, PO Box 17576, Netherlands Jebel Ali, Dubai, United Arab Emirates Aggreko Trinidad Limited Republic of 5/7 Sweet Briar Road, St. Clair, Trinidad and Tobago Trinidad & Tobago Aggreko Enerji ve Isi Kontrol Ticaret Anonim Turkey EGS Business Park B2 Blok Kat:6 D:227 Yeşilköy, Bakırköy, Istanbul, Turkey Sirketi Aggreko Middle East Limited FZE UAE E-LOB Offi ce No E2-112F-40, PO Box 52462, Hamriyah Free Zone, Sharjah, United Arab Emirates Aggreko Events Services Limited UK 120 Bothwell Street, Glasgow, G2 7JS, Scotland, United Kingdom Aggreko Finance Limited + UK 120 Bothwell Street, Glasgow, G2 7JS, Scotland, United Kingdom Aggreko Holdings Limited + UK 120 Bothwell Street, Glasgow, G2 7JS, Scotland, United Kingdom Aggreko International Projects Holdings UK 120 Bothwell Street, Glasgow, G2 7JS, Scotland, United Kingdom Limited + Aggreko International Projects Limited*** UK 120 Bothwell Street, Glasgow, G2 7JS, Scotland, United Kingdom Aggreko Pension Scheme Trustee Limited UK 120 Bothwell Street, Glasgow, G2 7JS, Scotland, United Kingdom Aggreko Russia Finance Limited ++ UK 120 Bothwell Street, Glasgow, G2 7JS, Scotland, United Kingdom Aggreko UK Finance Limited ++ UK 120 Bothwell Street, Glasgow, G2 7JS, Scotland, United Kingdom Aggreko UK Limited UK Overburn Avenue, Dumbarton, G82 2RL, Scotland, United Kingdom Aggreko US Limited UK 120 Bothwell Street, Glasgow, G2 7JS, Scotland, United Kingdom Aggreko Generators Limited ++++ UK 120 Bothwell Street, Glasgow, G2 7JS, Scotland, United Kingdom Aggreko Luxembourg Holdings UK 120 Bothwell Street, Glasgow, G2 7JS, Scotland, United Kingdom Dunwilco (680) Limited ++++ UK 120 Bothwell Street, Glasgow, G2 7JS, Scotland, United Kingdom Golden Triangle Generators Limited UK Aggreko House Orbital 2, Voyager Drive, Cannock, Staffordshire, WS11 8XP, England, United Kingdom Aggreko Ukraine LLC Ukraine 77, 709, Sichovyh Strilstiv St, Kyiv, Ukraine, 04053 Aggreko Uruguay S.A. Uruguay 675, Of 20, Peatonal Sarandi, Montevideo, Uruguay Aggreko Holdings Inc + USA Wilmington Trust SP Services Inc, 1105 N. Market Street, Suite 1300, Wilmington DE, 19801, United States Aggreko USA LLC + USA The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, DE, 19801, United States Aggreko LLC USA The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, DE, 19801, United States Younicos Inc USA 3100 Alvin Devane Blvd, Building A, Suite 200, Austin, TX, 78741, United States Aggreko de Venezuela C.A. Venezuela Av. Venezuela Edif. Lamaletto, piso 5, ofi cina Unica, El Rosal, Caracas

* Joint venture: Aggreko ownership is 49%, remainder is held by RedMed. ** Registered in Cyprus. *** Administered from Dubai and registered in the UK. + Intermediate holding companies. ++ Finance company. +++ The fi nancial year end of Aggreko Energy Rental India Private Limited is 31 March due to local taxation requirements. ++++ Dormant company.

122 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information 123

Total £ million GHS £ million 1– 1 1– 1 213 6–6 11 2 13 21 3 24 19 2 21 £ million A Contact Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko our customers. ts to ed to date and the Directors have assessed the fair value of the value assessed the fair have and the Directors date ed to from statement income 2018 31 December in the consolidated 2018 to t included 31 May from statement income 2018 31 December in the consolidated 2018 to t included February 15 ow savings and a reduction in overheads, as well as the ability to leverage Aggreko systems and access to assets. to and access systems Aggreko leverage to ability as the as well in overheads, and a reduction savings in the table below: shown are acquisitions in the two of assets acquired value fair and the The details of the transactions Intangible assets Inventory and other receivables Trade Net assets acquired Goodwill per cash fl Consideration (Origami) Limited in Origami Energy Investment in 2013 founded was million. Origami of £9 a consideration for in Origami share a 14% acquired 2018 the Group On 21 March This investment assets. connected of grid capability earning that optimises the revenue software intelligent and has developed strategy. energy and supports our distributed markets energy in evolving capability Aggreko’s extends Property, plant and equipment Property, consideration as £3 million. as £3 consideration Service (GHS) Hire Generator of the business and assets of GHS in Australia. the acquisition completed Group 2018 the On 31 May sector. position in the events leadership Aggreko’s equipment and it strengthens rental GHS specialises in general profi and operating The revenue contributed by GHS was £0.9 million and £0.2 million respectively. Had GHS been consolidated from consolidated Had GHS been 1 January 2018,respectively. million the million and £0.2 £0.9 GHS was by contributed million t of £1,760 profi and operating revenue show 2018 would ended 31 December the year for statement income consolidated million respectively. and £219 has been capitalised. on the purchase and the goodwill arising has been adopted method of accounting The acquisition in expenses within administrative included and are in the period been expensed million have of £0.2 costs related Acquisition statement. the income cost direct include from arising business. Synergies of synergies the acquired of the value the integration Goodwill represents Included within this maximum consideration is £3 million which was deposited into an escrow account as contingent as contingent account an escrow into deposited was million which is £3 within this maximum consideration Included months from is eighteen period of The escrow date issues with the assets acquired. against any and security consideration months eighteen balance and the remaining date the acquisition months after twelve be released with 50% to acquisition, been identifi have No claims date. the acquisition after contributed by A Contact was £10 million and £4 million respectively. Had A Contact been consolidated from been consolidated Had A Contact 1 January 2018, the million respectively. £10 was million and £4 A Contact by contributed million t of £1,760 profi and operating revenue show 2018 would 31 December ended the year for statement income consolidated million respectively. and £219 has been capitalised. on the purchase and the goodwill arising has been adopted of accounting method The acquisition expenses within administrative included and are in the period been expensed million have of £0.3 costs related Acquisition statement. in the income combining include from arising business. Synergies of synergies the acquired of the value the integration Goodwill represents benefi extended offer to specialised equipment with Aggreko’s A contact’s 28 Acquisitions and investments 28 Acquisitions ElectricA Contact Contact) Rentals (A of the business and assets of A Contact. the acquisition completed 2018 the Group On 15 February excel to strategy growth and long-term market rental speciality position in the leadership furthersThe acquisition Aggreko’s distribution electrical and high voltage of medium in the rental specialises solutions. A Contact rental specialised through equipment in North America. profi and operating The revenue NOTES TO THE GROUP ACCOUNTS CONTINUED

29 Notes to the Group Cash fl ow hedges Share-based payments Accounts – appendices Changes in the fair value of derivative IFRS 2 ‘Share-based Payment’ has fi nancial instruments that are been applied to all grants of equity 29.A1 Accounting policies designated, and effective, as hedges of instruments. The Group issues equity- Derivative fi nancial instruments future cash fl ows are recognised directly settled share-based payments to certain The activities of the Group expose it in equity and any ineffective portion is employees under the terms of the directly to the fi nancial risks of changes recognised immediately in the income Group’s various employee-share and in forward foreign currency exchange statement. If the cash fl ow hedge is option schemes. Equity-settled share- rates and interest rates. The Group uses of a fi rm commitment or forecasted based payments are measured at fair forward foreign exchange contracts, and transaction that subsequently results in value at the date of the grant. The fair interest rate swap contracts to hedge the recognition of an asset or a liability value determined at the grant date of these exposures. The Group does not then, at the time the asset or liability equity-settled share-based payments use derivative fi nancial instruments is recognised, the associated gains is expensed on a straight-line basis over for speculative purposes. or losses on the derivative that had the vesting period, based on an estimate Derivatives are initially recorded and previously been recognised in equity of the shares that will ultimately vest. subsequently measured at fair value, are included in the initial measurement Fair value is measured using the which is calculated using standard of the asset or liability. For hedges of Black-Scholes option-pricing model. transactions that do not result in the industry valuation techniques in Own shares held under trust for the recognition of an asset or a liability, conjunction with observable market Group’s employee share schemes are amounts deferred in equity are data. The fair value of interest rate swaps classed as Treasury shares and deducted recognised in the income statement is calculated as the present value of in arriving at Shareholders’ equity. in the same period in which the hedged estimated future cash fl ows using No gain or loss is recognised on disposal item affects net profi t and loss. market interest rates and the fair value of Treasury shares. Purchases of own of forward foreign exchange contracts Changes in the fair value of derivative shares are disclosed as changes in is determined using forward foreign fi nancial instruments that do not qualify Shareholders’ equity. exchange market rates at the reporting for hedge accounting are recognised Leases date. The treatment of changes in fair in the income statement as they arise. value of derivatives depends on the Leases where substantially all of the derivative classifi cation. The Group Hedge accounting is discontinued risks and rewards of ownership are not designates derivatives as hedges of when the hedging instrument no longer transferred to the Group are classifi ed highly probable forecasted transactions qualifi es for hedge accounting. At that as operating leases. Rentals under or commitments (‘cash fl ow hedge’). time any cumulative gain or loss on operating leases are charged against the hedging instrument recognised operating profi t on a straight-line In order to qualify for hedge accounting, in equity is retained in equity until basis over the term of the lease. the Group is required to document in the forecasted transaction occurs. Dividend distribution advance the relationship between the If a hedged transaction is no longer Dividend distribution to the Company’s item being hedged and the hedging expected to occur, the net cumulative Shareholders is recognised as a liability instrument. The Group is also required gain or loss recognised in equity is in the Group’s fi nancial statements to document and demonstrate an transferred to the income statement. assessment of the relationship between in the period in which the dividends the hedged item and the hedging Overseas net investment hedges are approved by the Company’s instrument, which shows that the Certain foreign currency borrowings Shareholders. Interim dividends hedge will be highly effective on an are designated as hedges of the Group’s are recognised when paid. ongoing basis. This effectiveness overseas net investments, which are testing is re-performed at each period denominated in the functional currency end to ensure that the hedge remains of the reporting operation. highly effective. Exchange differences arising from the retranslation of the net investment in foreign entities and of borrowings are taken to equity on consolidation to the extent the hedges are deemed effective. All other exchange gains and losses are dealt with through the income statement.

124 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information 125 Total Total Total Total £ million £ million £ million £ million Technology Technology Technology Technology £ million £ million expenditure expenditure expenditure expenditure Development Development Development Development –10–10 –5–5 5–38 4– 15 4––4 18 10 3 31 37 – – 37 56 10 3 69 5656 5 10 – 3 61 69 Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko 38––38 38 – – 38 £ million compete compete and non- £ million compete compete and non- Customer Customer Customer Customer agreements agreements relationships relationships agreements relationships relationships Acquisitions (Note 28) (Note Acquisitions Additions adjustmentsExchange 2018At 31 December amortisation Accumulated At 1 January 2018 the year for Charge adjustmentsExchange 2018At 31 December Net book values 2018At 31 December 2017At 31 December amortisation from of assets arising mainly comprised been in the year Amortisation and have business combinations charges expenses. in administrative recorded 2017 ended 31 December Year 1 1 58 – 4 24 – 42 – 16 – 3 – 18 – 1 24 85 5 10 – 1 2 3 – 43 42 31 Cost At 1 January 2018 29 Notes to the Group Accounts – appendices continued – appendices Accounts theGroup to 29 Notes 29.A2 Other intangible assets 2018 ended 31 December Year Cost At 1 January 2017 Acquisitions Additions adjustmentsExchange 2017 At 31 December amortisation Accumulated At 1 January 2017 the year for Charge adjustmentsExchange 2017 At 31 December Net book values 2017 At 31 December 2016At 31 December amortisation from of assets arising mainly comprised been in the year Amortisation and have charges business combinations expenses. in administrative recorded (5) – (3) – – 19 (5) – 5 (3) – 24 NOTES TO THE GROUP ACCOUNTS CONTINUED

29 Notes to the Group Accounts – appendices continued 29.A3 Borrowings (i) Interest rate risk profi le of fi nancial liabilities The interest rate profi le of the Group’s fi nancial liabilities at 31 December 2018, after taking account of the interest rate swaps used to manage the interest profi le, was: Fixed rate debt Weighted average Weighted period for average which rate Floating rate Fixed rate Total interest rate is fi xed £ million £ million £ million % Years Currency: US Dollar 13 591 604 4.0 5.4 Euro 61–61–– Canadian Dollar 23 – 23 – – Mexican Pesos 18 – 18 – – Indonesian Rupiah 23 – 23 – – Other currencies 42 – 42 – – As at 31 December 2018 180 591 771

Fixed rate debt Weighted average Weighted period for average which rate Floating rate Fixed rate Total interest rate is fi xed £ million £ million £ million % Years Currency: US Dollar 7 610 617 4.0 5.9 Mexican Pesos 17 – 17 – – Russian Roubles 10 – 10 – – Brazil Reals 10 – 10 – – Indonesian Rupiah 17 – 17 – – Indian Rupees 10 – 10 – – Other currencies 42 – 42 – – As at 31 December 2017 113 610 723

The fl oating rate fi nancial liabilities principally comprise debt which carries interest based on different benchmark rates depending on the currency of the balance and are normally fi xed in advance for periods between one and three months. The weighted average interest rate on fi xed debt is derived from the fi xed leg of each interest rate swap and coupons applying to fi xed rate private placement notes. The effect of the Group’s interest rate swaps is to classify £79 million (2017: £74 million) of borrowings in the above table as fi xed rate. The notional principal amount of the outstanding interest rate swap contracts at 31 December 2018 was £79 million (2017: £74 million). (ii) Interest rate risk profi le of fi nancial assets Cash at bank and in hand £ million Currency: US Dollar 22 Russian Roubles 9 Other currencies 54 As at 31 December 2018 85

126 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information 71 26 45 127 £ million £ million Fair value value Fair and in hand Cash at bank at bank Cash nancial assets nancial 2017 44 (1) (1) (2) (2) 71 71 (139) (139) 490 490 of nancial risks (160) (160) (584) (584) £ million ows using market using market ows Book value Book value £ million Fair value value Fair Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko –– –– 2018 44 85 85 502 502 (134) (134) (144) (144) (627) (627) £ million Book value Book value oating rate and earn interest based on relevant LIBID (London Interbank Bid Interbank LIBID (London based on relevant interest and earn rate oating nance the nance nancial liabilities nancial assets and fi nancial nancial instruments held: fi to nancial instruments held or issued nancial liabilities at 31 December 2018. Fair value is the price that would be received to sell an asset or paid to transfer a a transfer sell an asset or paid to to be received that would is the price value 2018.nancial liabilities at 31 December Fair Group’s operations: Group’s and overdrafts borrowings Current borrowings Non-current at bank and in hand Cash contracts currency foreign Net forward receivables Trade notes placement private PDVSA payables Trade Interest rate swaps rate Interest Derivative fi Derivative (ii) Summary of methods and assumptions derivatives currency and foreign swaps rate Interest swaps rate with IFRS 13, interest In accordance sheet date. of these instruments at the balance price is based on market value Fair cash fl future of estimated value as the present being calculated value 2 with fair be Level to considered are prices market is based on quoted 1 as the valuation be Level to considered are contracts currency foreign Forward rates. interest 2. Level are notes placement Private at the end of the reporting period. deposits and overdrafts/short-term borrowings Current the carrying amount because of the to approximates and overdrafts borrowings current deposits and of short-term value The fair of these instruments. short maturity borrowings Non-current sheet. in the balance reported the carrying value to approximates value fair the borrowings, In the case of non-current All of the above cash and short-term deposits are fl deposits are cash and short-term All of the above concerned. the currency for rates or market equivalents Rate) 29.A4 instruments Financial the fi to it directly expose the activities of the Group on page 124 29.A1 Note policies in our accounting As stated and interest contracts exchange foreign uses forward The Group rates. and interest rates exchange currency in foreign changes Changes in of the Statement in is shown hedging reserve in the The movement these exposures. hedge to contracts swap rate Equity. of fi values (i) Fair fi of the Group’s values of the carrying category and the fair amounts by a comparison table provides The following and fi been used to have values Market date. participants at the measurement market between transaction in an orderly liability values. fair determine Primary fi Primary As at 31 December 2017 As at 31 December Currency: US Dollar 29 Notes to the Group Accounts – appendices continued – appendices Accounts theGroup to 29 Notes 29.A3 continued Borrowings Other currencies NOTES TO THE GROUP ACCOUNTS CONTINUED

29 Notes to the Group Accounts – appendices continued 29.A4 Financial instruments continued (iii) Derivative fi nancial instruments Hedge of net investment in foreign entity The Group has designated as a hedge of the net investment in its overseas subsidiaries foreign currency denominated borrowings as detailed in the table below. The fair value of these borrowings were as follows: 2018 2017 £ million £ million US Dollar 604 610 Euro 61 –

A foreign exchange loss of £46 million (2017: gain of £55 million) on translation of the borrowings into Sterling has been recognised in exchange reserves. (iv) The exposure of the Group to interest rate changes when borrowings reprice is as follows: As at 31 December 2018 <1 year 1-5 years >5 years Total £ million £ million £ million £ million Total borrowings 144 272 355 771 Effect of interest rate swaps and other fi xed rate debt (99) (137) (355) (591) 45 135 – 180

As at 31 December 2017 <1 year 1-5 years >5 years Total £ million £ million £ million £ million Total borrowings 139 251 333 723 Effect of interest rate swaps and other fi xed rate debt (55) (222) (333) (610) 84 29 – 113

As at 31 December 2018 and 31 December 2017, all of the Group’s fl oating debt was exposed to repricing within three months of the balance sheet date. The Group’s interest rate swap portfolio is reviewed on a regular basis to ensure it is consistent with the Group policy as described on page 104. The effective interest rates at the balance sheet date were as follows: 2018 2017 Bank overdrafts 9.4% 12.1% Bank borrowings 3.8% 4.9% Private placement 3.9% 3.9%

Maturity of fi nancial liabilities The table below analyses the Group’s fi nancial liabilities and net-settled derivative fi nancial liabilities into the relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash fl ows. As at 31 December 2018 <1 year 1-2 years 2-5 years >5 years £ million £ million £ million £ million Borrowings 145 104 179 454 Trade and other payables 134––– 279 104 179 454

As at 31 December 2017 <1 year 1-2 years 2-5 years >5 years £ million £ million £ million £ million Borrowings 140 80 192 444 Derivative fi nancial instruments 1 2 – – Trade and other payables 162––– 303 82 192 444

No trade payable balances have a contractual maturity greater than 90 days.

128 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information e. – (1) 114 140 129 (141) (114) <1 year <1 year £ million £ million 92% cover cient to Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko the year during scheme ned contribution of the in respect pension schemes ned contribution ows. ow hedges ow ow hedges ow from of held separately of the Directors Assets are t scheme. under the control those of the Group cit the Company has already made additional contributions of £1.25 made additional contributions million in 2015, 2016,2017 and 2018 has already cit the Company the defi to payable t is the amount of contributions ned benefi ned ts that had accrued to members, after making allowances for future increases in earnings. increases future for allowances making members, after to ts that had accrued ow ow ow ow As at 31 December 2017 As at 31 December Infl Outfl Forward foreign exchange contracts – cash fl contracts exchange foreign Forward 29 Notes to the Group Accounts – appendices continued – appendices Accounts theGroup to 29 Notes 29.A4 instruments Financial continued basis on a gross instruments settled nancial fi Derivative maturity relevant basis into on a gross will be settled which nancial instruments fi derivative Group’s the analyses The table below in disclosed The amounts date. maturity the contractual to sheet date at the balance period based on the remaining groupings cash fl undiscounted the contractual the table are As at 31 December 2018 As at 31 December Outfl Forward foreign exchange contracts – cash fl contracts exchange foreign Forward Infl All of the Group’s forward foreign currency exchange contracts are due to be settled within one year of the balance sheet date. sheet of the balance within one year be settled due to are contracts exchange currency foreign forward All of the Group’s 29.A5 Pensions Overseas particular country. in each and regulation ect best practice refl and schemes vary employees overseas for arrangements Pension against profi The charge accounting period. The pension cost attributable to overseas employees for 2018 was £12 million (2017: £11 £12 2018 was million). million (2017: for employees overseas to attributable The pension cost period. accounting Kingdom United (‘the is a funded, Scheme Scheme’) plc Pension The Aggreko UK employees. for pension schemes operates The Group defi contributory, an by years than three of not more at intervals valuations is subject to The Scheme Limited. Trustee Scheme Pension Aggreko independent actuary. closely but works of the Scheme strategy funding and investment operation, the over has control of the Scheme The Trustee strategy. and investment funding agree to with the Company of the level determine Age method to the Attained 2014 using out as at 31 December carried was of the Scheme A valuation dat the valuation at conditions market to basis linked a valuation adopted The actuaries the Group. be made by to contributions assumptions used were: The major actuarial value. at market taken Assets were on investments Return levels pay in average Growth in pensions Increase suffi was million which £92 was AVCs) assets (excluding of the Scheme’s value the market date, At the valuation 4.8% 3.6% of the benefi 3.2% 2018. at 31 December balances no outstanding or prepaid are There £2 million). (2017: As part of the valuation at 31 December 2014, the Company and the Trustee agreed upon a Schedule of Contributions and a of Contributions upon a Schedule agreed and the Trustee 2014, at 31 December As part the Company of the valuation 2016. from on 1 February To increased 41.0% ts building up in the future to 35.9% benefi for contributions Plan. Company Recovery defi the Scheme address and plans to make further additional contributions of £1.25 million each year until 2022. Employee contributions are 6% of 6% are contributions until 2022. Employee of £1.25 further year additional contributions make million each and plans to pensionable earnings. an has not recognised and as such at the end of the Scheme pension surplus of any a refund to has the right The Group with IFRIC 14. in accordance additional liability join a the option to given are employees 2002. 1 April New after joining the Group employees all new to closed The Scheme this defi paid to were million of £2 Contributions scheme. ned contribution defi NOTES TO THE GROUP ACCOUNTS CONTINUED

29 Notes to the Group Accounts – appendices continued 29.A5 Pensions continued An update of the Scheme was carried out by a qualifi ed independent actuary using the latest available information for the purposes of this statement. The major assumptions used in this update by the actuary were: 31 Dec 2018 31 Dec 2017 Rate of increase in salaries 3.7% 4.9% Rate of increase in pensions in payment 3.2% 3.1% Rate of increase in deferred pensions 3.4% 3.4% Discount rate 3.0% 2.6% Infl ation assumption 3.4% 3.4% Longevity at age 65 for current pensioners (years) Men 22.4 24.3 Women 24.5 26.9 Longevity at age 65 for future pensioners (years) Men 24.0 26.9 Women 26.6 29.7

The assets in the Scheme were: Value at Value at 31 Dec 2018 31 Dec 2017 Equities £ million £ million – UK equities 9 10 – Overseas equities 12 13 – Diversifi ed growth 8 8 – Absolute return 1 8 Index-linked bonds 43 49 Bonds 19 19 Cash 5 2 Total 97 109

The amounts included in the balance sheet arising from the Group’s obligations in respect of the Scheme are as follows: 2018 2017 £ million £ million Fair value of assets 97 109 Present value of funded obligations (96) (134) Asset/(liability) recognised in the balance sheet 1 (25)

130 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information – – – 3 3 5 3 3 2 (3) (2) (4) 131 (25) (30) 2017 t £ million c ts t surplus/(liability) t 1 – 3 3 5 3 13 15 (2) (3) (7) (4) 26 (25) 2018 2018 £ million ned benefi ned – – – – – 3 3 3 3 3 (5) (2) 105 109 2017 £ million – – – – – 3 3 3 (7) (7) (8) Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko (11) 97 109 2018 2018 £ million 2018 with a suitable insurer. ts at 31 December Fair value of Scheme assets of Scheme value Fair Net defi – – – – – 5 5 2 2 (2) (6) (4) 2017 (135) (134) £ million t obligation – – – 5 11 11 13 15 (2) (6) (4) 33 (96) 2018 2018 (134) ned benefi ned £ million Defi the year: during t liability nancial ludes £0.3 million in relation to the guaranteed minimum pension (GMP) requirements. minimum pension (GMP) the guaranteed to million in relation ludes £0.3 ned benefi ned ost inc vice c vice ts paid ts ow data from the last actuarial valuation to arrive at an appropriate single-equivalent rate. at an appropriate data fromow arrive to valuation the last actuarial (excluding interest income) interest (excluding assumptions Effect of changes in fi of changes Effect Effects of changes in demographic in demographic of changes Effects assumptions The ser Balance at 31 December Balance Benefi Other contributions Employer – Return on plan assets on plan assets Return – – Effect of experience adjustments of experience – Effect – Included of in the statement income comprehensive Remeasurements – Interest income Interest Included in the income statement Service cost Interest cost cost Interest The Projected Unit method has been used for the valuation of the liabilities. Under this method each participant’s benefi participant’s Under this method each of the liabilities. the valuation Unit method has been used for The Projected under the Scheme are attributed to years of service, taking into consideration future salary increases and the Scheme’s benefi and the Scheme’s salary future increases consideration into of service, taking years to attributed are under the Scheme entitled at retirement become to participant is expected each which pension to total Thus, the estimated allocation formula. t obligation is the total service. The benefi credited of past or future with a year associated units, each into down is broken at the purposes valuation ts for benefi attributed assumptions) of the individual’s (assessed using appropriate value present from specifi and based on Scheme bond yield curve derived was the AA corporate rate The discount date. measurement cash fl managers. investment the various issued by statements ‘bid value’ the underlying of the assets is based on value The fair pooled funds. basis of the units held in the underlying pricing ect the relevant refl The manager statements of buying out benefi cost is the estimated method of valuation An alternative than 2018 rather liabilities at 31 December Scheme the settle to be required the amount that would This amount represents to the amount required estimates The Company liabilities of the Scheme. fund the ongoing to continuing the Company basis shortfall on a buyout a Scheme £132 gives 2018 is around million which liabilities at 31 December the Scheme’s settle million. £35 of approximately Balance at 1 JanuaryBalance 29 Notes to the Group Accounts – appendices continued – appendices Accounts theGroup to 29 Notes 29.A5 continued Pensions in defi Movement NOTES TO THE GROUP ACCOUNTS CONTINUED

29 Notes to the Group Accounts – appendices continued 29.A5 Pensions continued Cumulative actuarial gains and losses recognised in equity 2018 2017 £ million £ million At 1 January 58 63 Actuarial gains recognised in the year (26) (5) At 31 December 32 58

The actual return on Scheme assets was a loss of £7 million (2017: gain of £3 million). Risks to which the Scheme exposes the Group There is a risk of asset volatility leading to a defi cit in the Scheme. Working with the Company, the Trustee has agreed investment derisking triggers which, when certain criteria are met, will decrease corporate bond holding and increase the holding of index linked bonds. Over time, this will result in an investment portfolio which better matches the liabilities of the Scheme thereby reducing the risk of asset volatility. However there remains a signifi cant level of investment mismatch in the Scheme. This is deliberate and is aimed at maximising the Scheme’s long term investment return while retaining control of the funding risks. Through the Scheme, the Group is exposed to a number of other risks: → Changes in bond yields – a decrease in corporate bond yields will increase Scheme liabilities. → Infl ation risk – pension obligations are linked to infl ation and higher infl ation will lead to higher liabilities. → Life expectancy – an increase in life expectancy will result in an increase in the Scheme liabilities. The measurement of the defi ned benefi t obligation is particularly sensitive to changes in key assumptions as described below: → The discount rate has been selected following actuarial advice and taking into account the duration of the liabilities. A decrease in the discount rate of 0.5% per annum would result in a £13 million increase in the present value of the defi ned benefi t obligation. The weighted average duration of the defi ned benefi t obligation liabilities is around 25 years. → The infl ation assumption adopted is consistent with the discount rate used. It is used to set the assumptions for pension increases, salary increases and deferred revaluations. An increase in the infl ation rate of 0.5% per annum would result in a £12 million increase in the present value of the defi ned benefi t obligation. → The longevity assumptions adopted are based on those recommended by the Scheme actuary advising the Trustee of the Scheme and refl ect the most recent mortality information available at the time of the Trustee actuarial valuation. The increase in the present value of the defi ned benefi t obligation due to members living one year longer would be £3 million. There is a risk that changes in the above assumptions could increase the defi cit in the Scheme. Other assumptions used to value the defi ned benefi t obligation are also uncertain, although their effect is less material. 2018 2017 £ million £ million Defi ned benefi t obligation by participant status Actives 31 59 Deferreds 34 47 Pensioners 31 28 96 134

The duration of the liabilities is approximately 25 years. Expected cash fl ows in future years Expected employer contributions for the year ending 31 December 2019 are £3 million. Expected total benefi t payments: approximately £2 million per year for the next 10 years.

132 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information 133 £ million £ million £ million £ million Restated Restated Restated Restated Rehire PSU/PSI PSU/PSI PSU/PSI £ million £ million £ million £ million Mob/demob IFRS 15 Impact 55 8 63 75 – 75 72 17 89 96 – 96 313 – 313 132 (17) 115 183 (8) 175 238 – 238 204 – 204 300 – 300 IFRS 15 Impact PSU/PSI PSU/PSI £ million £ million £ million £ million As reported As reported Mob/demob 81––81 55 17 1 73 93 (17) (6) 70 Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko 148 – (5) 143 229 – (5) 224 PSU/PSI PSU/PSI £ million £ million As reported 1,010 – 2 (4) 1,008 1,730 – 2 (34) 1,698 £ million As reported t Industrial Utility Industrial Industrial Utility Utility IndustrialUtility 340 670 93 (93) – 2 (4) – 429 579 Power Solutions Power Rental Solutions Group Power Solutions Power Power Solutions Power Rental Solutions Group and amortisationDepreciation Rental Solutions Group assets plant & equipment and intangible on property, expenditure Capital Rental SolutionsGroup profi Operating 720 – – (30) 690 Power Solutions Power 30 Segmental disclosures: Reconciliation of previously reported to restated results restated to reported of previously Reconciliation 30 Segmental disclosures: 2017 ended 31 December Year Revenue NOTES TO THE GROUP ACCOUNTS CONTINUED

30 Segmental disclosures: Reconciliation of previously reported to restated results continued Assets IFRS 15 Impact As reported PSU/PSI Mob/demob Restated £ million £ million £ million £ million Power Solutions Industrial 628 170 4 802 Utility 1,109 (170) 4 943 1,737 – 8 1,745 Rental Solutions 765 – – 765 Group 2,502 – 8 2,510

Liabilities IFRS 15 Impact As reported PSU/PSI Mob/demob Restated £ million £ million £ million £ million Power Solutions Industrial (61) (48) (3) (112) Utility (263) 48 (9) (224) (324) – (12) (336) Rental Solutions (100) – – (100) Group (424) – (12) (436)

Note: As well as a change in operating assets there is also a £1 million decrease in corporation tax payable. Average number of employees

As reported PSU/PSI Restated Power Solutions Industrial 1,380 454 1,834 Utility 2,083 (454) 1,629 3,463 – 3,463 Rental Solutions 2,515 – 2,515 Group 5,978 – 5,978

134 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information – 5 6 (1) (1) 13 (2) (2) 17 (7) 25 42 20 (25) (82) 135 2017 818 755 350 730 428 790 494 494 1,105 (584) (384) £ million 1 – – – – – 7 (1) 13 13 29 20 42 (17) 2018 752 374 277 726 432 782 432 (101) 706 (627) (347) 1,059 £ million 35 23 37 39 36 38 38 Notes 29.A5 29 A.5 Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko cer t obligation t t surplus t nancial instruments nancial nancial instruments nancial

nancial statements on pages 135 to 140 were approved by the Board of Directors on 6 March 2019 and signed on its on 6 March of Directors the Board by approved 140 were to on pages 135 nancial statements

K Hanna H Drewett H Hanna K Chairman Offi Chief Financial behalf by: The fi Total Shareholders’ equity Shareholders’ Total Treasury shares Treasury Hedging reserve Retained earnings Creditors: amounts falling due after one year amounts due after falling Creditors: Borrowings fi Derivative Share premium Share reserve redemption Capital Total assets less current liabilities assets less current Total benefi Retirement equity Shareholders’ capital Share Net assets Provisions assets Net current Creditors: amounts due within one falling year Creditors: Borrowings Other payables fi Derivative Deferred tax asset Deferred tax asset Current Cash and cash equivalents Cash Current assets Current Other receivables Retirement benefi Retirement Investments Fixed assets Fixed plant and equipment Property,

COMPANY BALANCE SHEET (COMPANY NUMBER: SC177553) NUMBER: SHEET (COMPANY BALANCE COMPANY As at 31 December 2018 31December Asat COMPANY STATEMENT OF COMPREHENSIVE INCOME For the year ended 31 December 2018

2018 2017 £ million £ million (Loss)/profi t for the year (14) 64 Other comprehensive income/(loss) Items that will not be reclassifi ed to profi t or loss – Remeasurement of retirement benefi ts 26 5 – Taxation on remeasurement of retirement benefi ts (5) (1) Items that may be reclassifi ed subsequently to profi t or loss – Cash fl ow hedges 2 2 – Taxation on cash fl ow hedges – (1) Other comprehensive income for the year (net of tax) 23 5

Total comprehensive income for the year 9 69

136 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information 137 Total Total Total Total equity equity £ million £ million £ million earnings Retained £ million earnings Retained reserve reserve £ million Hedging Hedging £ million Capital Capital reserve Capital reserve £ million £ million redemption redemption redemption redemption Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko shares shares shares shares Treasury Treasury £ million Treasury Treasury £ million Attributable to equity holders of the Company equity to Attributable Attributable to equity holders of the equity Company to Attributable Share Share Share Share account account £ million £ million premium premium premium premium – – – – – (69) (69) – – – – 1 68 69 – – – – – (69) (69) – – – – – 4 4 –– – – – – – – – 1 64 – 64 1 – –– – – (12) – – – 21 – 21 – (12) –– –– – – – 7 – 7 – – – – 8 – (7) (68) 8 – (61) –– – – –– –– – –– – – – – – 2 (14) 2 (10) – (14) – – – – 2 – 10 – (2) (61) 10 – (71) – – – – 2 7 9 42 20 (14) 13 (3) 428 486 42 20 (7) 13 (2) 428 494 42 20 (7) 13 (2) 428 494 42 20 (17) 13 – 374 432 Share Share Share Share capital capital £ million Ordinary £ million Ordinary

the year t for Other comprehensive income/(loss): Other comprehensive (net of tax) swaps rate gains on interest value Fair ts (net of tax) benefi of retirement Remeasurement Total comprehensive income for the year ended the year for income comprehensive Total 2017 31 December with owners: Transactions awards share Employee Issue of Ordinary Shares to employees under employees to Issue of Ordinary Shares option schemes share 2017 Dividends paid during 2017 at 31 December Balance Profi Balance at 1 JanuaryBalance 2017 Loss for the year for Loss ended the income year for comprehensive Total 2018 31 December with owners: Transactions shares of Treasury Purchase awards share Employee Balance at 1 JanuaryBalance 2018 As at 31 December 2018 As at 31 December Other comprehensive income Other comprehensive (net of tax) swaps rate gains on interest value Fair ts (net of tax) benefi of retirement Remeasurement under employees to Issue of Ordinary Shares option schemes share 2018 Dividends paid during 2018 at 31 December Balance 2017 As at 31 December COMPANY STATEMENT OF CHANGES IN EQUITY CHANGES OF STATEMENT COMPANY 2018 31 December ended year the For NOTES TO THE COMPANY ACCOUNTS For the year ended 31 December 2018

31 Company accounting → The following paragraphs of lAS 1, IFRIC 23 ‘Uncertainty over income tax policies ‘Presentation of fi nancial statements’: treatments” IFRIC 23 comes in to effect from – 10(d) (statement of cash fl ows); 31.1 Basis of preparation 1 January 2019. Management has These fi nancial statements have been – 10(f)(a) (statement of fi nancial assessed the impact of this change prepared in accordance with Financial position as at the beginning and this is expected to be immaterial. Reporting Standard 101, ‘Reduced of the preceding period); Disclosure Framework’ (FRS 101). Investments The fi nancial statements have been – 16 (statement of compliance with Investments in subsidiary undertakings prepared under the historical cost all IFRS); are stated in the balance sheet of the Company at cost, or nominal value convention, as modifi ed by the – 38A (requirement for minimum of of the shares issued as consideration revaluation of certain fi nancial assets two primary statements, including where applicable, less provision for and liabilities (including derivative cash fl ow statements); instruments) at fair values in accordance any impairment in value. Share-based with the Companies Act 2006. – 38B-D (additional comparative payments recharged to subsidiary information); undertakings are treated as capital The preparation of fi nancial statements contributions and are added to – 40A-D (requirements for a third in conformity with FRS 101 requires investments. the use of certain critical accounting statement of fi nancial position); Share-based payments estimates. It also requires management – 111 (cash fl ow statement The accounting policy is identical to that to exercise its judgement in the information); and process of applying the Company’s applied by the consolidated Group as set accounting policies. – 134-136 (capital management out on page 124 with the exception that disclosures). shares issued by the Company to The following exemptions from the employees of its subsidiaries for which → lAS 7, ‘Statement of cash fl ows’. requirements of IFRS have been applied no consideration is received are treated in the preparation of these fi nancial → Paragraph 30 and 31 of lAS 8, as an increase in the Company’s statements, in accordance with FRS 101: ‘Accounting policies, changes in investment in those subsidiaries. accounting estimates and errors’ → Paragraphs 45(b) and 46 to 52 of Dividend distribution (requirements for the disclosure of IFRS 2, ‘Share-based payment’ (details Dividend distribution to the Company’s information when an entity has not of the number and weighted-average Shareholders is recognised as a liability applied a new IFRS that has been exercise prices of share options, and in the Company’s fi nancial statements issued but is not yet effective). how the fair value of goods or services in the period in which the dividends received was determined). → Paragraph 17 of lAS 24, ‘Related party are approved by the Company’s → IFRS 7, ‘Financial Instruments: disclosures’ (key management Shareholders. compensation). Disclosures’. The following accounting policies are → Paragraphs 91 to 99 of IFRS 13, ‘Fair → The requirements in lAS 24, ‘Related identical to that applied by the Group value measurement’ (disclosure of party disclosures’ to disclose related Property, plant and equipment – refer valuation techniques and inputs used party transactions entered into to page 101 between two or more members for fair value measurement of assets Impairment of property, plant and of a group. and liabilities). equipment – refer to page 101 31.1.1 Going concern → Paragraph 38 of lAS 1, ‘Presentation Foreign currencies – refer to page 101 of fi nancial statements’ comparative Given the going concern disclosures in information requirements in respect the Group Accounts on page 96, the Derivative fi nancial instruments – of: Directors consider it appropriate to refer to page 124 adopt the going concern basis of Borrowings – refer to page 102 – Paragraph 79(a)(iv) of lAS 1; accounting in preparing these fi nancial – Paragraph 73(e) of lAS 16 ‘Property, statements. Taxation – refer to page 103 plant and equipment’; 31.1.2 Changes in accounting policy Leases – refer to page 124 and disclosures – Paragraph 188(e) of lAS 38 Employee benefi ts – refer to page 102 ‘Intangible assets’ (reconciliations New and amended standards adopted between the carrying amount at the by the Company beginning and end of the period). There are no new standards that are 32 Critical accounting effective for the fi rst time this year that estimates and assumptions have a material impact on the Company. Taxation This is explained in Note 1 to the Group Accounts on page 103.

33 Dividends Refer to Note 11 of the Group Accounts.

138 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information 7 6 11 ch 17 (2) 10 25 36 29 46 24 46 2017 2017 139 783 752 730 248 790 £000 Total Total £ million £ million £ million 7 32 2018 2018 2018 2018 332 699 706 £000 £ million Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko Fees payable to the Company’s auditor and its associates for other services: for and its associates auditor the Company’s to payable Fees services related – other assurance Other receivables Amounts due from subsidiary undertakings 37 Other receivables 37 36 Investments 35 Property, plant and plant equipment Property, 35 Fees payable to the Company’s auditor for the audit of the Company’s annual accounts Company’s the audit of the for auditor the Company’s to payable Fees 34 Auditor’s remuneration 34 Auditor’s Accumulated depreciation Accumulated At 1 January 2018 the year for Charge Cost of investments in subsidiary undertakings: investments of Cost At 1 January 2018 Additions 2018 At 31 December 2018 At 31 December Net book values: 2018 At 31 December Additions Ltd. de Geradores Locacas Energia in Aggreko then invested Cost At 1 January 2018 At 31 December 2017 At 31 December Net impact payments of share-based 2018 At 31 December that the believe The Directors Accounts. the Group 27 to subsidiary set out in Note undertakings are Details of the Company’s net assets. their underlying by is supported of the investments carrying value whi Holdings B.V. Rest of the World in Aggreko. invest it to allow to Holdings Limited in Aggreko was The additional investment The property, plant and equipment of the Company comprise vehicles, plant and equipment. vehicles, comprise of the Company plant and equipment The property, NOTES TO THE COMPANY ACCOUNTS CONTINUED

38 Borrowings 2018 2017 £ million £ million Non-current Bank borrowings 134 103 Private placement notes 493 481 627 584

Current Bank overdrafts 2 1 Bank borrowings 79 26 Private placement notes 20 55 101 82 Total borrowings 728 666

The bank overdrafts and borrowings are all unsecured. (i) Maturity of fi nancial liabilities The maturity profi le of the borrowings was as follows: 2018 2017 £ million £ million Within 1 year, or on demand 101 82 Between 1 and 2 years 104 79 Between 2 and 3 years 157 26 Between 3 and 4 years 11 146 Greater than 5 years 355 333 728 666

(ii) Borrowing facilities The Company has the following undrawn committed fl oating rate borrowing facilities available at 31 December 2018 in respect of which all conditions precedent had been met at that date: 2018 2017 £ million £ million Expiring within 1 year – 77 Expiring between 1 and 2 years 276 64 Expiring between 2 and 3 years 100 383 Expiring between 3 and 4 years 89 50 Expiring between 4 and 5 years – 50 465 624

39 Other payables 2018 2017 £ million £ million Amounts owed to subsidiary undertakings 324 367 Accruals and other income 23 17 347 384

40 Profi t and loss account As permitted by Section 408 of the Companies Act 2006, the Company has not presented its own income statement and related notes. The loss for the fi nancial year of the Company was £14 million (2017: profi t of £64 million).

140 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information 4 15 34 141 2017 2017 2017 524 524 224 224 296 (408) 2,124 2,071 2,071 2,479 2,074 10.7% 2,090 (Note 1) (Note (Note 1) (Note 1) (Note £ million £ million Restated Restated Restated Restated Restated 5 14 37 517 517 219 219 2018 2018 2018 2018 2018 293 2,119 (368) 2,123 2,123 2,159 2,491 2,074 10.3% £ million £ million Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko nance costs nance Income statement Income Per above Per Accounts reference Accounts Accounts reference Accounts reference Accounts Income statement Income items t pre-exceptional (£ million) cost nance nition: ROCE (operating profi assets) operating net average divided by items t pre-exceptional profi ROCE (operating Note (a): Note Accounts June 2018 Interim Per 4 (F) Note Assets Liabilities assets Net operating EBITDA 31 December 3) by of 1 Jan, 30 June and 31 Dec divided total (i.e. Average of 2018 and 2017 Accounts 4 Note Amortisation 5 Note Interest cover (times) cover Interest Net fi Operating profi items t pre-exceptional profi Operating Calculated by dividing operating profi t pre-exceptional items for a period by the average net operating assets at 1 January, assets at 1 January, net operating the average by a period for items t pre-exceptional profi dividing operating by Calculated 30 June and 31 December. Calculation: Adjusted return on average capital employed (ROCE) capital employed on average return Adjusted Defi DEFINITION AND CALCULATION OF NON GAAP MEASURES NON GAAP OF AND CALCULATION DEFINITION Average net assets operating Average 1 January and 2017 Accounts 4 of 2018 Note 30 June (a) below Note to Refer Operating profi Operating Calculation: and Taxation) Interest Before (Earnings statement Income Adjusted earnings before interest, taxes, depreciation and amortisation depreciation taxes, (EBITDA) interest, before earnings Adjusted Depreciation 5 Note Calculation: (£ million) EBITDA Adjusted interest cover: EBITDA divided by net fi divided by EBITDA cover: interest Adjusted DEFINITION AND CALCULATION OF NON GAAP MEASURES CONTINUED

Adjusted net debt to EBITDA Calculation: 2017 Restated Accounts reference 2018 (Note 1) Net debt (£ million) Cash fl ow statement 686 652 EBITDA (£ million) Per above 517 524 Net debt/EBITDA (times) 1.3 1.2

Adjusted dividend cover Defi nition: Basic earnings per share (EPS) pre-exceptional items divided by full year declared dividend. Calculation: 2017 Restated Accounts reference 2018 (Note 1) Basic EPS pre-exceptional items (pence) Note 12 49.22 52.48 Full year declared dividend Interim dividend (pence) Note 11 9.38 9.38 Final dividend (pence) Note 11 17.74 17.74 27.12 27.12 Dividend cover (times) 1.8 1.9

142 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information 143 the by xed otherwise than pursuant to otherwise than pursuant to up (a) above, sub-paragraph nominal amount an aggregate to of £618,922 in connection with or pursuant in connection other or issue, open offer a rights to holders of favour in offer pre-emptive (“Ordinary of Ordinary Shares of on the register Shareholders”) fi members on a date securities the equity where Board the to attributable respectively Ordinary of all such interests (as proportionate are Shareholders the to be practicable) as may nearly numbers of Ordinary respective them on that date held by Shares or other exclusions such (subject to may as the Board arrangements to deem necessary or expedient fractional shares, with Treasury deal entitlements or legal or practical under the laws arising problems or the territory overseas of any regulatory of any requirements virtue or by exchange body or stock by being represented of shares other or any depositary receipts and whatsoever); matter into, Ordinary Shares in the capital of the in the capital Ordinary Shares into, wholly for (“Ordinary Shares”)) Company the for authority any cash pursuant to under Section 551 time being in force a sale of treasury of way of the Act or by of Section (within the meaning shares 560(3) of the Act), as if Section 561(1) such any of the Act did not apply to that this allotment or sale, provided the allotment to shall be limited power the sale of and securities of equity cash: for shares Treasury (a) (b) shall (unless that this power provided expire or revoked) renewed previously of 30 June 2020 or at the on the earlier Annual General of the next conclusion the after Meeting of the Company that the save passing of this resolution, expiry make such before may Company an agreement into or enter an offer equity or might require would which such after be allotted to securities allot equity may expiry and the Board an offer of such in pursuance securities conferred as if the power or agreement had not expired. hereby not resident are nancial adviser if you Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko fromce the conclusion of the meeting until the conclusion meeting general of the next conclusion the laid before are accounts at which Company. Resolution 14 of the Committee the Audit authorise To of the remuneration determine to Board auditor. the Company’s Resolution 15 of the of Directors That the Board be and is hereby (the “Board”) Company authorised and unconditionally generally with and in accordance pursuant to Act 2006 section 551 of the Companies of all the powers exercise to (the “Act”) in the allot shares to the Company grant to and capital of the Company any convert or to for subscribe to rights in the Company shares into security nominal amount an aggregate up to expire to authority such of £4,126,149, of 30 June 2020 or at the on the earlier Annual General of the next conclusion the after Meeting of the Company that the save passing of this resolution, expiry make such before may Company an agreement into or enter an offer equity or might require would which such after be allotted to securities allot equity may expiry and the Board an of such in pursuance securities as if the authority or agreement offer had not expired. hereby conferred Resolution 11 as a Director re-elect Ian Marchant To of the Company. Resolution 12 re-elect Miles Robertsas a Director To of the Company. Resolution 13 of LLP as auditor KPMG re-appoint To hold offi to the Company Special resolutions Resolution 16 15 is passed, the Board That if resolution (the of the Company of Directors generally be and is hereby “Board”) Sections 570 pursuant to empowered, Act 2006 of the Companies and 573 securities allot equity to (the “Act”), of Section 560 of (within the meaning to of rights the grant the Act) (including securities any convert or to for, subscribe t, pass the eld as a Director nal dividend on If you are in any doubt as to any matter referred to in this report or as to the action you should take, you should you the should actionreport in this take, or as to you to referred matter any doubt as to in any are If you or other accountant nancial solicitor, from: advice manager, bank a stockbroker, (a) personal fi own seek your resident adviserindependent authorised are under Act professional the 2000 if you Services Financial and Markets authorised independent or (b) another Kingdom; fi appropriately in the United THE FOLLOWING INFORMATION IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. ATTENTION. IMMEDIATE YOUR AND REQUIRES IS IMPORTANT INFORMATION THE FOLLOWING in the United Kingdom. in the United report, this with pass together please plc in Aggreko shares all of your otherwise sold or transferred have If you the as soon as possible to of proxy), personalised form the accompanying documents (except the accompanying or other they so person who bank the arranged sale or transfer the stockbroker, or to or transferee, purchaser the holds these person who the documents now can pass shares. to Notice is hereby given that the Annual given is hereby Notice plc (the Meeting of Aggreko General will be held at 200 SVS, “Company”) G2 5RQ Glasgow Street, 200 St Vincent 2019 at 11.00am 25 April on Thursday fi and, if thought consider to Resolutions set out below. resolutions as will be proposed 19 (inclusive) 16 to All other resolutions special resolutions. as ordinary resolutions. will be proposed Ordinary resolutions Resolution 1 the reports of the Directors receive To adopt the and to and Auditors the year for accounts Company’s 2018.ended 31 December Resolution 2 the by the annual statement approve To Chair as set Committee Remuneration and the annual 66 out on pages 62 to the (excluding report on remuneration as set Policy) Remuneration Directors’ of the Annual 76 to out on pages 67 ended the year for Report and Accounts 2018.31 December Resolution 3 a fi declare To the Company’s Ordinary Shares Ordinary Shares the Company’s per share. pence of 17.74 Resolution 4 Hanna as a Director re-elect Ken To of the Company. Resolution 5 as a Director re-elect Weston Chris To of the Company. Resolution 6 as a Director Drewett re-elect Heath To of the Company. Resolution 7 re-elect Brewer Dame Nicola To of the Company. as a Director Resolution 8 Jeremiah re-elect Barbara To of the Company. as a Director Resolution 9 as a Director Krueger re-elect Uwe To of the Company. Resolution 10 re-elect Diana Layfi To of the Company. NOTICE OF ANNUAL GENERAL MEETING OF ANNUAL NOTICE NOTICE OF ANNUAL GENERAL MEETING CONTINUED

Resolution 17 Resolution 18 Resolution 19 That if resolution 15 is passed, in addition That the Company be and is hereby That a general meeting of the Company to any authority granted pursuant to generally and unconditionally authorised (other than an Annual General resolution 16 proposed at the Annual for the purposes of Section 701 of the Meeting) may be called on not less General Meeting, the Directors be and Companies Act 2006 (the “Act”) to make than 14 clear days’ notice, provided are hereby generally empowered one or more market purchases (within that this authority shall expire at the pursuant to Sections 570 and 573 of the the meaning of Section 693(4) of the Act) conclusion of the next Annual General Companies Act 2006 (the “Act”) to allot of ordinary shares in the capital of the Meeting of the Company. equity securities (within the meaning Company (“Ordinary Shares”) on such of Section 560(1) of the Act) (including terms and in such manner as the the grant of rights to subscribe for, or Directors of the Company may By order of the Board to convert any securities into, Ordinary determine, provided that: Shares in the capital of the Company (a) the maximum aggregate number (“Ordinary Shares”) for cash pursuant to of Ordinary Shares hereby authorised any authority for the time being in force to be purchased is 25,612,820; under Section 551 of the Act and/or by way of a sale of Treasury shares (within (b) the maximum price which may be Peter Kennerley the meaning of Section 560(3) of the paid for any Ordinary Share is an Company Secretary Act), as if Section 561(1) of the Act did amount equal to the higher of (i) 6 March 2019 not apply to any such allotment or 105% of the average of the middle Registered offi ce: sale, provided that this power shall: market quotations for an Ordinary Aggreko plc Share as derived from the London (a) be limited to the allotment of equity 8th Floor Stock Exchange Daily Offi cial List for securities and the sale of Treasury 120 Bothwell Street the fi ve business days immediately shares for cash up to an aggregate Glasgow G2 7JS preceding the day on which the nominal amount of £618,922; and Scotland share is contracted to be purchased; United Kingdom (b) be used only for the purposes of and (ii) the higher of the price of fi nancing (or refi nancing, if the the last independent trade and the authority is to be used within six highest current independent bid Registered in Scotland months after the original transaction) on the trading venue where the number: SC177553 a transaction which the Directors purchase is carried out, and the of the Company determine to be minimum price which may be paid an acquisition or other capital for any Ordinary Share is its nominal investment of a kind contemplated value (in each case exclusive of by the Statement of Principles on associated expenses), Disapplying Pre-Emption Rights provided that the authority hereby most recently published by the conferred shall expire on the earlier of Pre-Emption Group prior to the 30 June 2020 or at the conclusion of date of this notice the next Annual General Meeting of and shall expire on the earlier of the Company after the passing of this 30 June 2020 or at the conclusion resolution, save that a contract of of the next Annual General Meeting of purchase may be made before such the Company after the passing of this expiry which will or may be completed resolution, save that the Company may wholly or partly thereafter, and a before such expiry make an offer or purchase of Ordinary Shares may be enter into an agreement which would made in pursuance of any such contract. or might require equity securities to be allotted after such expiry and the Board may allot equity securities in pursuance of such an offer or agreement as if the power conferred hereby had not expired.

144 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information 145 5 Appointment of a proxy 5 Appointment of a proxy CREST through appoint members who wish to CREST the CREST through or proxies a proxy appointment service proxy electronic using the procedures do so by may Manual and in the CREST described website: the following logging on to by CREST www.euroclear.com/CREST. other CREST personal members or and those CREST members, sponsored (a) voting appointed members who have their to should refer service provider(s), service voting sponsor or CREST the take who will be able to provider(s) action on their behalf. appropriate appointment or a proxy for In order instruction made using the CREST the appropriate be valid, service to Proxy message (a “CREST CREST must be properly Instruction”) with in accordance authenticated Limited’s UK & Ireland Euroclear must contain cations, and specifi such for required the information in the CREST instruction, as described via www.euroclear. Manual (available of The message, regardless com/CREST). the appointment whether it constitutes the to or is an amendment of a proxy a previously to instruction given be to must, in order proxy, appointed be received so as to be transmitted valid, no later ID RA10) (CREST Registrar the by non-working than 48 hours (excluding the time of the Annual before days) of adjournment Meeting or any General the time this purpose, that meeting. For be the time to will be taken of receipt the timestamp by (as determined the CREST the message by applied to Application Host) from the which the message retrieve is able to Registrar in the manner CREST enquiry to by this time After CREST. by prescribed proxies of instructions to change any should be CREST through appointed the appointee to communicated other means. through applicable, members and, where CREST service sponsors or voting their CREST that Euroclear should note provider(s) does not make Limited UK & Ireland for in CREST special procedures available particular system any message. Normal timings and limitations will, therefore, the input of CREST to apply in relation Instructions. It is the responsibility Proxy to member concerned of the CREST member is a if the CREST (or, take or sponsored personal member, CREST (a) voting appointed or has member, that his/ procure to service provider(s), service or voting sponsor her CREST action as shall such take(s)) provider(s) Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko A person who is not a member of the A person who is not but who has been nominated Company information enjoy a member to by appoint to a right does not have rights set under the procedures proxies any and should read out in these Notes 9 below. Note 4 Appointment of a proxy 4 Appointment a proxy of proxy of using a form use in connection for of proxy A form Meeting is with the Annual General of proxy form any be valid, To enclosed. or other instrument appointing a proxy, or of attorney power with any together it is signed under which other authority must be thereof, ed copy or a certifi normal post or (during by received hand to business hours only) by Services,Link Asset The Registry, Road, Beckenham, 34 Beckenham than 48 hours no later by 4TU BR3 Kent the before days) non-working (excluding Meeting or time of the Annual General of that meeting. adjournment any of proxy a form do not have If you one, should have that you and believe of additional forms require or you on the Registrar contact please proxy, charged are Calls 664 0300. 0371 Tel: and rate geographic at the standard outside the Calls provider. by will vary at the applicable charged UK are open Lines are rate. international and 5.30pm, 9.00am between public excluding Friday to Monday in England and Wales. holidays 3 Appointment of a proxy 3 Appointment of a proxy online a proxy appointing to As an alternative or CREST, of proxy using the form online members can appoint a proxy . In order at http://shares.aggreko.com using this website, appoint a proxy to members will need their personal any If for Code. cation Investor identifi this a member does not have reason the should contact they information, are Calls 664 0300. 0371 on Tel: Registrar rate geographic at the standard charged outside Calls provider. by and will vary at the applicable charged the UK are open Lines are rate. international and 5.30pm, Monday 9.00am between in public holidays excluding Friday to England and Wales. using appoint a proxy Members may than 48 hours no later the website before days) non-working (excluding Meeting the time of the Annual General of that meeting. adjournment or any 2 Appointment proxies of appoint one entitled to Members are all or any exercise to proxies or more and vote speak attend, to of their rights Meeting. A proxy at the Annual General need not be a member of the Company the Annual General but must attend To a member. represent Meeting to must be a proxy appointed be validly set using the procedures appointed and in the notes out in these Notes of proxy. form the accompanying to on speak to If members wish their proxy their behalf at the meeting, members choice appoint their own will need to of the (not the Chairman of proxy Meeting) and give Annual General them. to their instructions directly than Members can only appoint more is appointed proxy each where one proxy different to attached rights exercise to Members cannot appoint more shares. the rights exercise to than one proxy If a the same share(s). to attached than appoint more member wishes to the should contact they one proxy, Link Asset Services, Registrar, Company’s charged are Calls 664 0300. 0371 on Tel: and rate geographic at the standard outside the Calls provider. by will vary at the applicable charged UK are open Lines are rate. international and 5.30pm, Monday 9.00am between in public holidays excluding Friday to England and Wales. instruct their proxy A member may abstain fromto of the on any voting at the be considered to resolutions the “Withheld” marking meeting by option when appointing their proxy. that an abstention It should be noted and will not be in law is not a vote in the calculation of the counted “For” or “Against” proportion of votes resolution. the relevant will not The appointment of a proxy a member from prevent attending Meeting and the Annual General in person if he or she wishes. voting If you wish to attend the Annual General the Annual General attend wish to If you arrive should Meeting in person, you General the Annual for at the venue your allow to Meeting in good time It is be registered. to attendance of some form have advisable to may as you cation with you identifi your of evidence provide to be asked Registrar the Company’s to identity Annual the to being admitted to prior Meeting. General 1 Attending the Annual 1 Attending MeetingGeneral in person NOTES TO THE NOTICE OF ANNUAL GENERAL MEETING GENERAL OF ANNUAL TO THE NOTICE NOTES NOTES TO THE NOTICE OF ANNUAL GENERAL MEETING CONTINUED

be necessary to ensure that a message 9 Nominated persons 12 Members resolution is transmitted by means of the CREST Any person to whom this notice is sent system by any particular time. In this Under Section 338 and Section 338A who is a person nominated under connection, CREST members and, where of the Companies Act 2006, members Section 146 of the Companies Act 2006 applicable, their CREST sponsors or meeting the threshold requirements in (the “Act”) to enjoy information rights voting system providers are referred, in those sections have the right to require (a “Nominated Person”) may, under particular, to those sections of the CREST the Company (a) to give to members of an agreement between him/her and Manual concerning practical limitations the Company entitled to receive notice the member by whom he/she was of the CREST system and timings. of meeting, notice of any resolution nominated, have a right to be appointed which may properly be moved and is The Company may treat as invalid (or to have someone else appointed) as intended to be moved at the meeting a CREST Proxy Instruction in the a proxy for the Annual General Meeting. and/or (b) to include in the business to circumstances set out in Regulation If a Nominated Person has no such proxy be dealt with at the meeting any matter 35(5)(a) of the Uncertifi cated Securities appointment right or does not wish (other than a proposed resolution) Regulations 2001. to exercise it, he/she may, under any which may be properly included in the such agreement, have a right to give business. A resolution may properly 6 Appointment of a proxy instructions to the member as to the be moved or a matter may properly by joint holders exercise of voting rights. be included in the business unless (a) (in the case of a resolution only) it would, In the case of joint holders, where more 10 Website giving information if passed, be ineffective (whether by than one of the joint holders purports regarding the Annual General reason of inconsistency with any to appoint one or more proxies, only the enactment or the Company’s purported appointment submitted by Meeting constitution or otherwise), (b) it is the most senior holder will be accepted. Information regarding the Annual defamatory of any person, or (c) it is Seniority is determined by the order in General Meeting, including information frivolous or vexatious. Such a request which the names of the joint holders required by Section 311A of the Act, may be in hard copy form or in appear in the Company’s register of and a copy of this notice of Annual electronic form, must identify the members in respect of the joint holding General Meeting is available at resolution of which notice is to be given (the fi rst named being the most senior). www.plc.aggreko.com. or the matter to be included in the business, must be authorised by the 7 Corporate representatives 11 Audit concerns person or person making it, must be Any corporation which is a member received by the Company not later Members should note that it is possible than 14 March 2019, being the date six can appoint one or more corporate that, pursuant to requests made by representatives. Members can only weeks before the meeting, and (in the members of the Company under case of a matter to be included in the appoint more than one corporate Section 527 of the Act, the Company representative where each corporate business only) must be accompanied may be required to publish on a by a statement setting out the grounds representative is appointed to exercise website a statement setting out any rights attached to different shares. matter relating to: (a) the audit of the for the request. Members cannot appoint more than Company’s accounts (including the 13 Voting rights one corporate representative to exercise auditor’s report and the conduct of the the rights attached to the same share(s). audit) that are to be laid before the As at 5 March 2019 (being the latest Annual General Meeting; or (b) any practicable date prior to the publication 8 Entitlement to attend circumstance connected with an auditor of this notice), the Company’s issued and vote of the Company ceasing to hold offi ce share capital consisted of 256,128,201 since the previous meeting at which Ordinary Shares of 4329⁄395 pence each, To be entitled to attend and vote at the annual accounts and reports were laid carrying one vote each; 188,251,587 Annual General Meeting (and for the in accordance with Section 437 of the Deferred Shares of 984⁄775 pence each, purpose of determining the votes they Act. The Company may not require the 18,352,057,648 Deferred Shares of 1⁄775 may cast), members must be registered members requesting any such website pence each, 182,700,915 Deferred Shares in the Company’s register of members publication to pay its expenses in of 618⁄25 pence each and 573,643,383,325 at close of business on Tuesday 23 April complying with Sections 527 or 528 of Deferred Shares of 1⁄306125 pence each. 2019 (or, if the Annual General Meeting the Act. Where the Company is required The deferred share classes do not carry is adjourned, at close of business on the to place a statement on a website under voting rights in any circumstances. In day, two days prior to the adjourned Section 527 of the Act, it must forward addition, the Company did not hold any meeting). Changes to the register of the statement to the Company’s auditor shares in treasury. Therefore, the total members after the relevant deadline not later than the time when it makes voting rights in the Company as at will be disregarded in determining the the statement available on the website. 5 March 2019 were 256,128,201 votes. rights of any person to attend and vote The business which may be dealt with at the Annual General Meeting. at the Annual General Meeting includes any statement that the Company has been required under Section 527 of the Act to publish on a website.

146 Aggreko plc Annual Report and Accounts 2018 Strategic report Governance Financial statements Shareholder information 147 External auditor auditor External (Resolutions 13 and 14) with the re- deal These resolutions LLP as auditors appointment of KPMG authorisation and the of the Company determine to Committee of the Audit their remuneration. allot shares to Authority (Resolution 15) this resolution In line with last year, allot to the Directors will authorise an aggregate to up Ordinary Shares (representing of £4,126,149 nominal value of 4329⁄395 Ordinary Shares 85,376,067 This amount represents each). pence of the issued one third approximately capital of the Company Ordinary Share being the latest 2019, as at 5 March the publication to prior date practicable the 2019, As at 5 March of this circular. shares held no Treasury Company over no warrants were and there Ordinary Shares. sought under this The authority of on the earlier will expire resolution which by date 30 June 2020 (the latest must hold an Annual the Company in 2020) or the Meeting General of the Annual General conclusion be held to Meeting of the Company in 2020. intention no present have The Directors other than in relation shares issue new to under the the issue of shares to and employee executive Company’s where in circumstances schemes share to it appropriate do not consider they using market vesting satisfy awards purchase. Re-election of Directors 12) to (Resolutions 4 Directors the to 12 refer Resolutions 4 to re-electionstanding for in line with the which Code, Governance UK Corporate 350 of FTSE that all directors states annual should be subject to companies shareholders. election by of the each details for Biographical set out re-election seeking are Directors and of this document 49 on pages 48 to online view to also available are . The Board at www.plc.aggreko.com a formal that,rms following also confi of the each evaluation, performance re-electionfor standing Directors effectively, perform to continues their to commitment demonstrates discharge to and has the capacity role, their given fully, their responsibilities other to time commitments existing the Board Therefore, organisations. the re- unanimously recommends proposed. election of the Directors Aggreko plc Annual Report and Accounts 2018 plc Annual Report and Accounts Aggreko nal nal dividend of 17.74 pence pence nal dividend of 17.74 ended 31 December nancial year Final dividend 3) (Resolution Final to being asked are Shareholders a fi approve ended the year for per Ordinary Share 2018.31 December If shareholders fi the recommended approve dividend, it will be paid on 24 May 2019 May dividend, it will be paid on 24 on who are all Ordinary Shareholders to 2019. of members on 23 April the register This resolution deals with the receipt with the receipt deals This resolution the for and adoption of the accounts fi reports of 2018 and the associated and Auditors. the Directors and Annual Annual Statement Report on Remuneration (Resolution 2) of the approval Resolution 2 seeks Remuneration the by annual statement Chair set out on pages 62 Committee 66 and the annual report on to set out on pages 67 Remuneration of this document. 76 to seek to law by required are We the Annual for approval shareholders’ and Annual Report on Statement on an annual basis. Remuneration Remuneration Directors’ The current at shareholders by approved was Policy Meeting, and the 2018 Annual General the Annual Report on remuneration applied policy sets out the Company’s in 2018. remuneration Directors’ to Policy Remuneration The full Directors’ . on www.plc.aggreko.com is available is advisory of the in respect This vote and the package remuneration overall remuneration entitlements to Directors’ upon this resolution not conditional are being passed. EXPLANATORY NOTES EXPLANATORY an explanation provide The following be considered to of the resolutions Meeting. at the Annual General as 15 will be proposed Resolutions 1 to that This means ordinary resolutions. be to of those resolutions each for than half of the votes passed, more of the resolution. cast must be in favour as 19 will be proposed Resolutions 16 to that for This means special resolutions. passed, be to of those resolutions each cast three-quarters of the votes at least of the resolution. must be in favour Annual Report and Accounts (Resolution 1) dential cation copies of the service contracts of the of the service contracts copies and Directors; Executive Company’s copies of the letters of appointment of the letters copies Non-executive of the Company’s Directors. (b) The following documents will be The following inspection at the registered for available normal during of the Company ce offi weekday business hours on any and public holidays Sundays (Saturdays, from notice of this excepted) the date of the Annual until the conclusion of Meeting and on the date General Meeting at 200 SVS, the Annual General G2 5RQ: Glasgow Street, 200 St Vincent (a) 16 Documents available 16 Documents available inspectionfor information, or the answer has already already has or the answer information, in the form on a website been given a question, or it is to of an answer of the in the interests undesirable of the or the good order Company meeting that the question be answered. about queries any Members who have Meeting should the Annual General Secretary by the Company contact plc, 120 Bothwell Aggreko to writing G2 7JS. Glasgow Street, electronic not use any Members may or in in this notice provided address documents (including related any of proxy) form the accompanying with the Company communicate to other than those purpose any for stated. expressly Under Section of the Act, 319A the be answered must cause to Company the business to question relating any the Annual General with at being dealt a member attending Meeting put by the the meeting unless answering unduly with interfere question would or the meeting for the preparation of confi the disclosure involve 15 Further questions and communication Any person holding 3% or more of or more person holding 3% Any of the Company rights voting the total other than who appoints a person Annual General of the the Chairman will need to Meeting as his/her proxy and his/her both he/she, that ensure with their respective comply proxy, under the UK obligations disclosure Rules. and Transparency Disclosure 14 Notifi of shareholdings NOTES TO THE NOTICE OF ANNUAL GENERAL MEETING CONTINUED

Disapplication of Statutory The Board does not intend to allot shares Notice of general meetings Pre-Emption Rights for cash on a non-pre-emptive basis (Resolution 19) above 7.5% of the total issued Ordinary (Resolutions 16 and 17) Share capital of the Company over Under the Companies Act 2006, all Resolution 16 will be proposed as a a rolling three-year period without general meetings of the Company must special resolution and will authorise consulting shareholders fi rst. This be held on 21 clear days’ notice unless the Directors to disapply the statutory complies with the PEG Principles. shareholders agree to a shorter notice period on an annual basis and certain pre-emption rights of shareholders on The authority under these resolutions allotment of equity securities for cash other conditions are met. The Company will expire at the conclusion of the is currently able to call general meetings up to an aggregate nominal value Annual General Meeting to be held in of £618,922 (representing 12,806,410 (other than Annual General Meetings) 2020 or on 30 June 2020, whichever is on 14 clear days’ notice. The Board is Ordinary Shares of 4329⁄395 pence each), the earlier. The Directors intend to seek being approximately 5% of the issued proposing this resolution as a special renewal of this power at subsequent resolution at the Annual General Ordinary Share capital of the Company Annual General Meetings. as at 5 March 2019, being the latest Meeting so that the Company can practicable date prior to the publication continue to be able to convene general of this circular. This resolution also Purchase of Own Shares meetings on 14 clear days’ notice. disapplies statutory pre-emption rights (Resolution 18) The Board intends that this shorter to the extent necessary to facilitate The Directors recommend that notice period would not be used as rights issues. shareholders renew the authority of the a matter of routine, but would only be Resolution 17 will also be proposed as Company to purchase its own Ordinary used where the fl exibility was justifi ed a special resolution and will authorise Shares. Accordingly, this resolution will by the business of the meeting and the Directors to allot a further 5% of be proposed as a special resolution it would be to the advantage of the issued Ordinary Share capital of the seeking authority to make such shareholders as a whole. Company otherwise than in connection purchases in the market. The Directors If this resolution is passed, the authority with a pre-emptive offer to existing will only use this authority when they to convene general meetings on 14 clear shareholders for the purpose of consider it to be in the best interests days’ notice will remain effective until fi nancing a transaction (or refi nancing of shareholders generally and an the Company’s next Annual General within six months of the transaction) improvement in earnings per share Meeting, when it is intended that a which the Directors determine to be an would result. Any Ordinary Shares similar resolution will be proposed. acquisition or other capital investment purchased under this authority will The notice period for Annual General contemplated by the Pre-Emption either be cancelled (and the number Meetings will remain 21 clear days. Group’s revised Statement of Principles, of Ordinary Shares in issue reduced) or be held in treasury. published on 12 March 2015 (the “PEG Recommendation Principles”), being the Statement of This resolution specifi es the maximum The Board considers that all the Principles on Disapplying Pre-Emption number of Ordinary Shares which resolutions to be considered at the Rights most recently published by the may be purchased (representing Annual General Meeting are in the Pre-Emption Group prior to the date of approximately 10% of the Company’s best interests of the Company and this notice. issued Ordinary Share capital as at its shareholders as a whole. Your Board 5 March 2019, being the latest This additional disapplication authority will be voting in favour of them and practicable date prior to the is in line with the PEG Principles, and unanimously recommends that you publication of this circular) and the provides the Company with greater do so as well. fl exibility by allowing the Company to minimum and maximum prices at allot shares with a nominal value of which they may be bought. £618,922 (representing 5% of the issued The Directors intend to seek renewal Ordinary Share capital of the Company of this power at subsequent Annual as at 5 March 2019) for cash pursuant General Meetings. to this authority where that allotment is in connection with an acquisition As at 5 March 2019, there were options or specifi ed capital investment (as over Ordinary Shares 5,918,821 in the described in the PEG Principles) which capital of the Company which is announced at the same time as the represented 2.3% of the Company’s allotment, or which has taken place in issued Ordinary Share capital at that the preceding six-month period and is date. If the authority to purchase the disclosed in the announcement of that Company’s Ordinary Shares were allotment. exercised in full, these options would represent 2.6% of the Company’s issued Ordinary Share capital.

148 Aggreko plc Annual Report and Accounts 2018 SHAREHOLDER INFORMATION

Financial calendar Payment of dividends Shareholder queries 18 April 2019 We encourage shareholders to have Our share register is maintained Ex-dividend date – Final dividend dividends paid directly into their bank by our Registrar, Link Asset Services. accounts as this has a number of Shareholders with queries relating to 23 April 2019 advantages, including ensuring effi cient their shareholding should contact Link Record date to be eligible for the payment to receive cleared funds on the Asset Services directly. For more general fi nal dividend payment date. queries, shareholders can look at our 25 April 2019 website at www.plc.aggreko.com If shareholders would like to receive their Annual General Meeting dividends directly to their bank account, 24 May 2019 they should contact our Registrar, Link Unsolicited mail and Final dividend payment for the year Asset Services. UK shareholders may shareholder fraud to 31 December 2018 also register using the share portal. Shareholders are advised to be wary 30 July 2019 Overseas shareholders may be able to of unsolicited mail or telephone calls Half year results announcement have the dividend converted to local offering free advice, to buy shares at for the year to 31 December 2019 currency before payment to their bank a discount or offering free company account using the international payment reports. To fi nd more detailed 6 September 2019 service. Please contact our Registrar, information on how shareholders can Ex-dividend date – Interim dividend Link Asset Services, for details. be protected from investment scams 7 September 2019 visit www.fca.org.uk/consumers/scams/ Record date to be eligible for the Dividend reinvestment plan investment-scams/share-fraud-and- boiler-room-scams interim dividend (DRIP) 4 October 2019 This allows eligible shareholders to Our Registrar Interim dividend payment for the year purchase additional shares in Aggreko to 31 December 2019 with their dividend payment. Further Link Asset Services information and a mandate can be The Registry, Our website obtained from our Registrar, Link Asset 34 Beckenham Road Services, or by using the share portal. Beckenham Provides access to share price and Kent dividend information as well as sections BR3 4TU on managing your shareholding online, Duplicate documents United Kingdom corporate governance and other investor Some shareholders fi nd that they receive Share portal: https://shares.aggreko.com relations information. duplicate documentation and split Website: www.linkassetservices.com To access the website, please visit dividend payments due to having more www.plc.aggreko.com than one account on the share register. Email: [email protected] If you think you fall into this group and Telephone: 0371 664 0300* Managing your shares online would like to combine your accounts, * Calls are charged at the standard geographic please contact our Registrar, Link rate and will vary by provider. Shareholders can manage their holding Asset Services. Calls outside the UK are charged at the online by registering to use our share applicable international rate. portal at https://shares.aggreko.com. Lines are open 9.00am – 5.30pm, Changes of address Monday to Friday excluding public holidays This service is provided by our Registrar, in England and Wales. Link Asset Services, giving quick and To avoid missing important easy access to your shareholding, correspondence relating to your Registered offi ce allowing you to manage all aspects shareholding, it is important that you of your shareholding online, with inform our Registrar, Link Asset Services, 8th Floor a useful FAQ section. of your new address as soon as possible. 120 Bothwell Street Glasgow G2 7JS Electronic communications Sharegift Scotland We encourage shareholders to consider If you have a very small shareholding United Kingdom receiving their communications that is uneconomical to sell, you may Telephone: +44 (0) 141 225 5900 electronically. Choosing to receive your want to consider donating it to Sharegift communications electronically means (Registered Charity no. 10526886), a Email: [email protected] you receive information quickly and charity that specialises in the donation Registered in Scotland No. SC177553 securely and allows us to communicate of small, unwanted shareholdings to in a more environmentally friendly and good causes. You can fi nd out more cost-effective way. You can register for by visiting www.sharegift.org or by this service online using our share portal. calling +44 (0) 207 930 3737.

Designed and produced by: Friend www friendstudio.com Paper This report is printed on Revive 100 Silk paper. Revive 100 Silk is made from 100 per cent de-inked post consumer waste and produced in mills which hold IS0 9001 and ISO 14001 accreditation. Printing This publication is produced by a CarbonNeutral company and Carbon Balanced with World Land Trust. Balancing is delivered by World Land Trust, an international conservation charity, who offset carbon emissions through the purchase and preservation of high conservation value land. Through protecting standing forests, under threat of clearance, carbon is locked in that would otherwise be released. These protected forests are then able to continue absorbing carbon from the atmosphere, referred to as REDD (Reduced Emissions from Deforestation CBP00019082504183028 and forest Degradation). This is now recognised as one of the most cost-effective and swiftest ways to arrest the rise in atmospheric CO2 and global warming effects. Additional to the carbon benefi ts is the fl ora and fauna this land preserves, including a number of species identifi ed at risk of extinction on the IUCN Red List of Threatened Species. www.aggreko.com