A World Leader in Technical Services and Project Management

1
A World Leader in Technical Services and Project
Management

• Sir Peter Mason KBEChief executive

2
Any forward looking statements made in this
presentation represent managements best
judgement as to what may occur in the future.
However, the groups actual results for the
current and future fiscal periods and corporate
developments will depend on a number of economic,
competitive and other factors including some of
which will be outside the control of the group.
Such factors could cause the groups actual
results for future periods to differ materially
from those expressed in any forward looking
statements made in this presentation. Unless
otherwise stated, amounts and percentage
movements throughout this presentation relating
to the profit and loss account are stated before
goodwill amortisation and exceptional items.
Amounts and percentage movements relating to
total operating profit and margin of the
Engineering and Technical Services, Oil and Gas
and Project Solutions activities are stated
before corporate costs, goodwill amortisation,
and exceptional items.
3
Todays presentation

• Introduction to AMEC
• Engineering and Technical Services
• Oil and Gas
• Project Solutions
• Financial overview
• Where we go from here
• QA

4
What we do - capabilities
DESIGN
DELIVER
SUPPORT
Decommission/ Clean-up
Maintenance
Construction
Operations
Project Equity
Procurement
Consultancy
Design
Total life-of-asset project management and
services capability
5
Who we do it for
We work globally and locally for clients in the
public and private sectors
6
Our main activities
2004 total operating profit 174 million
Project Solutions 1.4 billion total turnover
24 of total operating profit
Engineering and Technical Services 2.3 billion
total turnover 43 of total operating profit
24
43
33
Oil and Gas 1.2 billion total turnover 33 of
total operating profit
Before corporate costs, goodwill amortisation
and exceptional items
7
Engineering and Technical Services
8

Engineering and Technical Services

• 43 of 2004 group operating profit
• 2004 operating profit 75m up 8
• Multitechnical Services
• Environmental Services
• Design and Engineering Services
• Before corporate costs, goodwill amortisation
  and exceptional items

43 of operating profit
2004 Turnover 2.3bn Operating profit
75m Operating margin 3.3 Net assets
(liabs) (8.1)m
Predictable, local business model
9
Multitechnical Services
Engineering and Technical Services

• EADS
• Mechanical and electrical services
• Airbus A380 assembly facility, Toulouse

• Lighting the Eiffel Tower
• 78 kms of cables
• 40,000 connectors
• 20,000 bulbs

10
Environmental Services
Engineering and Technical Services

• US Department of Energy
• Geomelt treatment of low-level radioactive waste
  at Hanford, Washington
• Stabilised waste can be stored safely for over
  10,000 years

• National Guard Bureau
• Massachusetts Military Reserve, Cape Cod
• Firing range clean-up
• Impact area groundwater study
• Small arms range lead removal

11
Design and Engineering Services
Engineering and Technical Services

• British Nuclear Group
• Over 25 years continuous experience at
  Sellafield
• Asset support services

• UK Ministry of Defence
• 7 year Regional Prime Contract
• Asset management services covering the whole of
  the MoD's Scottish Estate
• Around 400 establishments

12
ETS competitors
Engineering and Technical Services
North America Environmental services CH2M
Hill URS Tetratech Design and engineering
services Aecom Fluor Jacobs SNC Lavalin
Continental Europe Multitechnical
services Cegelec Eiffage Forclum France
Telecom IBM Global Services Nextira One Suez
Tractebel Vinci -Energies
UK Design and engineering services
Mitie RPS Serco WS Atkins WSP
13
ETS - Outlook

• Continued volume and margin improvement in
  Multitechnical Services
• Strong growth in Environmental Services
• Design and Engineering Services
• Continued growth from long-term framework
  contracts
• Restructuring of nuclear industry expected to
  produce opportunities
• Scope for improvement upon recovery in US
  industrial markets
• Overall volume growth and margin improvement
  expected without any recovery in US industrial
  markets

Volume growth and margin improvement
14
Oil and Gas

15
Oil and Gas

• 2004 operating profit 57m
• 33 of 2004 group operating profit
• Total life of asset support
• Design and asset support services
• Pipelines
• Canadian oil sands
• Before corporate costs, goodwill amortisation
  and exceptional items

33 of operating profit
2004 Turnover 1.2bn Operating profit
57m Operating margin 4.7 Net assets 129m
Initial design through to long-term asset
support service
16
What we doSome jargon explained
Floating Production, Storage and Offtake vessel
FPSO
Topsides
Jackets
17
What we doSpecialist total life of asset services
Upstream
Pipelines
18
Deepwater FPSOsUpstream

• ExxonMobil Angola
• Kizomba AB
• Joint venture design, engineering and project
  management services contracts

• Woodside Energy Australia
• Joint venture front-end engineering and design on
  the Enfield FPSO
• Option to undertake full engineering procurement
  and construction management services

19
Canadian oil sandsUpstream

• Canadian Natural Resources Ltd
• Horizon projectGreen-field oil sands extraction
  plant
• Deer Creek
• Joslyn project
• Technical assistance
• Imperial Oil Canada
• Kearl oil sands
• Pre-feasibility study

• Shell Canada
• Muskeg River Mine expansion pre-feasibilty study
• Syncrude
• Aurora MineAdditional mining/materialhandling
  system
• North MineAdditional dry oil sand production
  system

20
What we doSpecialist total life of asset services
Upstream
Pipelines
Downstream
21
Asset support servicesDownstream
Oil and Gas

• BP Grangemouth, UK
• Supplier of engineering services for over 35
  years
• Maintenance and shutdown activity involving
  detailed engineering, planning, scheduling,
  resource and supply chain management

22
What we doSpecialist total life of asset services
Upstream
Pipelines
Downstream
23
Oil and Gas Improved market position

• Increased activities worldwide
• UK North Sea Gulf of Mexico
• West Africa Caspian
• Canada Asia Pacific

• More work from new clients
• KOC, Kuwait
• KNOC, South Korea
• Woodside, Australia
• Paragon acquisition

Improved range of services and tier one status in
Houston
24
Oil and Gas Changing business model

• Trend to fabrication in lower cost regions
• Accelerated change of focus in activities towards
  higher-value services

• Vast majority of upstream lump sum contracts
  completed in 2004
• One-off lump sum contracts being replaced by
  longer-term services
• Risk reduced
• Margin improved
• Order book up

Improving quality of earnings
25
Oil and Gas Recent contract awards
ConocoPhilips Bayu Undan Operations
maintenance support Timor Sea
KOC Project management 5 years initial
contract Kuwait
Woodside Enfield FPSO Engineering project
management Perth
A wide range of substantial new contracts
26
Competitors
Oil and Gas
Halliburton/KBR
Technip-Coflexip
Foster Wheeler
Aker Kvaerner
ABB Lummus
Wood Group
Hyundai
Bechtel
Chiyoda
AMEC
Fluor
Engineering and project management

Upstream

Oil sands

Operations maintenance services

Gas processing / LNG

Refining/Petrochemicals

Downstream
Pipelines

Operations maintenance services

27
Oil and Gas - Outlook

• Strong competitive position
• Long-term client relationships in markets with
  high barriers to entry
• Stable margins in upstream engineering services
• Base fee plus performance related bonus
• Strong portfolio of contracts including long-term
  reimbursable work

A market leading business
28
Project Solutions

29
Project Solutions

• 2004 operating profit 41m
• 24 of 2004 group operating profit
• Range of activities from project management to
  construction
• Construction Services
• PPP
• Developments
• Wind Energy
• Before corporate costs, goodwill amortisation
  and exceptional items

24 of operating profit
2004 Turnover 1.4bn Operating profit
41m Operating margin 3.0 Net assets 66m
Promise of growth
30
Construction Services
Project Solutions

• We do not pursue one-off projects where lowest
  price is key
• Strong client relationships in the public and
  private sector
• Transport
• Healthcare
• Defence
• Growth opportunities through continued strength
  in UK government spending
• Rail continues to offer opportunities in
  Continental Europe and UK

Continuing opportunities
31
Construction Services
Project Solutions

• UK Ministry of Defence
• New submarine berthing facility,
• Her Majesty's Naval Base Clyde
• Design, construct and commission
• New floating jetty
• Electrical and mechanical services
• Jetty support building
• Contract follows two years of initial concept and
  definition work

• Channel Tunnel Rail Link UK
• 70 kms Folkestone to London high speed line
• Design, procure, install track, catenary and
  mechanical and electrical systems

32
PPP
Project Solutions

• Portfolio of 9 PPP projects
• Net present value 77 million net book value 42
  million
• Average discount rate of 10.5 used
  (post-tax/pre-tax basis)
• Recent preferred bids gt600m value to AMEC
• Colchester Hospital
• DLR Woolwich Arsenal extension
• South Lanarkshire Schools
• PPP equity commitments approaching 60 million
• Substantial value to be generated in the future
• Growth opportunities anticipated

Including preferred bids
Real profit potential
Real profit potential
33
Project SolutionsPPP
Project Solutions

• AMEC PPP project
• State-of-the-art, 669-bed facility

• UK Highways Agency
• A1 upgrade
• AMEC PPP project
• Upgrade of 33 mile section of the
• A1 Darrington to Dishforth, Yorkshire
• Design, Build, Finance and Operate
• contract

University College London Hospital
34
Developments
Project Solutions

• Major joint ventures
• ISIS Waterside regeneration
• English Cities Fund
• More than a dozen UK schemes under development
• Major schemes include Reading and Durham
• Awarded major project to regenerate Lewisham
• Planning approval expected for 3 million square
  feet of developments during 2005
• Continuing significant annual profits expected

Activity levels set to increase
35
Wind Energy
Project Solutions

• Onshore portfolio under development around
  1,500MW
• Includes 3rd parties share of capacity of around
  400MW
• Offshore portfolio pre-sold
• Planning applications progressed
• Kyle
• Lewis

Portfolio maturing
36
Project Solutions - Outlook

• Significant opportunities in Construction
  Services from UK government commitment to
  sustained spending
• Maturing portfolio of investments is expected to
  generate substantial and growing annual profits

Substantial and growing annual profits
37
Financial overview

• Stuart Siddall
• Finance director

38
Total operating profitBy business million
Margin
2003
2004
Margin

• Engineering and Technical Services 75.3 3.3 69.8 3
  .6
• Oil and Gas 57.2 4.7 58.2 4.3
• Project Solutions 41.4 3.0 40.2 2.7
• 173.9 3.6 168.2 3.5
• Corporate costs (24.3) (0.5) (26.5) (0.5)
• 149.6 3.1 141.7 3.0
• Total operating profit increased by 5.6
• Corporate costs reflect reduced North American
  establishment
• Overall margin increased
• Return on capital employed was 16.8 in 2004
• Before goodwill amortisation and exceptional
  items

39
Margin progressionOperating margin (per cent)
4.0
3.0
2.0
1.0
0.0
95
96
97
98
99
00
01
02
03
04
Before goodwill amortisation and exceptional
items
40
Return on capital employed
Source Company accounts as at 8 Dec 2004
Before goodwill amortisation and exceptional
items Post-tax earnings(excluding goodwill
amortisation, exceptional items and interest)
divided by the sum of shareholders equity plus
net debt
41
Profit conversion million
250
200
150
100
50
0
1 Jan 1996 31 Dec 2004
1 Jan 1996 31 Dec 2003

• Cash has historically matched profit and will
  move back in line in 2005

Profit excludes goodwill write off and
amortisation Adjusted cash flow excludes
acquisitions, disposals and share transactions,
advanced cash, cash retained in SPIE prior to
March 2003, pensions debtor
42
Balance sheet analysis( million)
2004
2003

• Payments on account (177.7) (180.3)
• Trade creditors (1,277.0) (1,163.8)
• (1,454.7) (1,344.1)
• Stocks/trade debtors 1,741.5 1,542.9
• Net current operating assets 286.8 198.8
• Months of turnover in stocks/debtors 4.2 4.0
• Months of turnover in creditors 3.1 3.0
• Ratio of stock/debtors to creditors 1.4 1.3
• Restated for changes in stock/debtor/creditor
  offsets in SPIE balance sheet
• Based on previous six months turnover
  excluding joint ventures

43
Average weekly net debt in 2005 million
-200
-250
-300
-350
-400
-450
-500

• Average net debt in 2005 is expected to decline
  to around 350 million

44
Orders

• Engineering and Technical Services
• Relationship between order intake and sales is
  key
• 2004 order intake exceeded sales

• Oil and Gas
• As at 31 December 2004 1.3 billion (2003 1.2
  billion)

• Project Solutions
• As at 31 December 2004 1.1 billion (2003 1.2
  billion)

45
International Financial Reporting Standards
(IFRS)

• Implementation well advanced
• Key issues identified
• Expect to publish restated figures in June 2005
• No changes to contract accounting
• FRS 17 pre-tax pension surplus of 170 million
• Expected to be similar under IAS 19
• Remaining uncertainties looking forward
• IAS 39 Financial Instruments
• Concession accounting

46
Outlook for 2005
Movement relative to 2004 profit base

• Rail Maintenance/share options
• North American industrial markets
• Increased contribution from Iraq
• Impact of Placing
• Acquisition of Paragon (Houston Oil Gas)
• Growth across all business segments

Confident of further progress in 2005
47
Growth in dividendsDividends per share (pence)
12
10
8
6
4
2
0
2000
2001
2002
2003
2004

• Dividend cover 2.4 2.8x

48
Where we go from here

• Sir Peter Mason KBEChief executive

49
AMEC Design, Deliver, Support
DESIGN
DELIVER
SUPPORT
Decommission/ Clean-up
Maintenance
Construction
Operations
Project Equity
Procurement
Consultancy
Design
Total life-of-asset project management and
services capability
50
Increase share of existing client spendHeadroom
for growth North America
30
20
AMEC share of clients annual spend
Existing share
10
0
51
Growth opportunities

• Steady growth in earnings from Engineering and
  Technical Services
• Volume and margin improvement

• Stronger position in Oil and Gas
• Improving quality of earnings
• Long-term growth market

• Exciting prospects in Project Solutions
• Opportunities in Construction Services
• Maturing portfolio of investments

Further growth in 2005 and beyond
52

• Supplementary dataFinancials

53
Whats in where
Project Solutions
Oil and Gas
Engineering and Technical Services
Defence
Upstream
Multitechnical services
Healthcare
Downstream
Environmental services
Transport
Oil sands
Asset support services
Education
Pipelines
Design and Engineering
Industrial
Previous segmental analysis
Developments/PPP
Wind energy
54
Cash flow million
2004
2003
Opening net debt (218.1) (37.3) Cash flow from
trading activities Advance cash (2.6) 14.5
Other (19.2) 56.0 Net profit / (loss) retained
in joint ventures / associates 7.8 3.3 Acquisiti
ons / disposals/share issues 24.5 (177.0) Interest
, tax and dividends (74.9) (72.4) Currency and
other adjustments (1.2) (5.2) Closing net debt
(283.7) (218.1)
55
Financial ratios
2004
2003
EBITDA 189.4m 189.3m Operating profit
(excluding PPP) 138.8m 131.1m Interest
(excluding PPP) 22.6m 20.5m Interest cover
(excluding results of PPP concessions) 6.1x 6.4x W
eekly average net debt 450m 360m Weekly average
net debt to EBITDA 2.4x 1.9x Excluding goodwill
amortisation and exceptional items
56
Order book
Whats included

• Oil and Gas and Project Solutions activity
• Term/evergreen contracts to first contract break
  point only
• Projects at award values, adjusted for contract
  growth
• Engineering and Technical Services activity
  (2.0bn sales in 2003)
• Contracts with preferred bidder status
• Concession income streams of PFI projects
• Lifetime services value of PFI projects

And whats not included
57
Contract risk management

• Varied range of contract terms
• - Cost reimbursable
• - Target cost
• - Pain/gain share
• - Lump sum
• Broad spectrum of contract sizes ranging from
  less than 20K in Engineering and Technical
  Services to hundreds of millions of dollars in
  Oil and Gas
• Contract duration varies from weeks to framework
  agreements of up to 10 years
• Increasing emphasis on negotiated cost
  reimbursable/protected contracts and risk
  management

58
Contract risk management
Define business and project objectives
Define risk management plan
Identification
Assessment
Planning
Management
Feedback
59
International Financial Reporting Standards

• Main balance sheet restatements
• IAS 8 Dividends
• IAS 19 Pensions
• IAS 12 Deferred tax
• IAS 16 Plant and equipment
• IAS 17 Leases
• IAS 31 Joint ventures PPP
• IAS 39 Financial instruments

Effect on net assets
60
International Financial Reporting Standards
continued

• Main profit and loss account restatements
• IAS 31 Joint ventures - PPP
• IFRS 2 Share-based payments
• IFRS 3 Acquisitions (net)
• IAS 11 Construction contracts
• IAS 19 Pensions
• IAS 39 Financial instruments

Effect on EBIT
61

• Supplementary dataProject Equity Investments -
  PPP

62
Investments PPP portfolio financially sound and
profitable

• Share of non recourse debt in projects 544
  million
• Operational 296 million
• Under construction 247 million
• Five projects operational
• Operating profit of 11 million (2003 11
  million)
• Support limited to equity commitments of 57
  million
• Contingent equity arising from adverse events
• AMEC share 11 million
• As at 10 March 2005, including preferred bids

63
AMEC PPP projects Operational
Equity committed
Net equity invested
Date operational
Concession period
Equity stake
Fin. close
Transport
-
6.6m
1998
30 years
25
1996
A1(M) Peterborough to Alconbury
-
2.4m
1998
30 years
25
1996
A419/417 Swindon to Gloucester
Hospitals
-
2.9m
2000
45 years
50
1997
Cumberland Infirmary
Accommodation
-
0.5m
2000
30 years
50
1998
Inland Revenue Newcastle Estate
Water Treatment
-
1.9m
2002
30 years
25
2000
Ayrshire Wastewater Treatment
64
AMEC PPP projects Delivery
Equity committed
Net equity invested
Date operational
Concession period
Equity stake
Fin. close
Transport
-
5.9m
2005
30 years
25
2000
A13 Thames Gateway
4.7m
-
2006
33 years
25
2003
A1(M) Darrington to Dishforth
7.2m
-
2005
30 years
50
2003
Docklands Light Railway City Airport extension
Hospitals
0.9m
8.4m
2005
38 years
33
2000
University College London Hospital
65
AMEC PPP projects Preferred bidder status
Value to AMEC
Equity committed
Net equity invested
Date operational
Concession period
Equity stake
Fin. close
Transport
15m
14.9m
4.9m
2009
30 years
23
Q2 2005
Incheon Bridge, Korea
200m
11.5m
-
2008
30 years
50
Q2 2005
Docklands Light Railway Woolwich Arsenal extension
Hospitals
220m
9.5m
-
2009
30 years
50
Q4 2005
Colchester Hospital
Schools
290m
8.0m
-
2009
30 years
33
Q3 2005
South Lanarkshire Schools
Project management fee
66

• Supplementary dataProject Equity Investments -
  Wind Energy

67
Wind energy terminology explained Rated
output and quantity of electricity produced

• Rated output is expressed in watts
• A watt is the energy needed to heat up 1 cm3 of
  water by 1oC in 1 second
• We use megawatts (1 MW 1,000,000 watts) to keep
  the numbers manageable
• Quantity of electricity produced is expressed in
  watt.hours
• A watt.hour is the quantity of electricity
  produced in 1 hour by a device generating at a
  rate of 1 watt
• A unit of domestic electricity is 1000 watt.hours
  or 1 kilowatt.hour (1 kWh)
• We use megawatt.hours (1 MWh 1,000,000
  watt.hours) or gigawatt.hours (1 GWh
  1,000,000,000 watt.hours) to express the quantity
  of electricity generated over a year
• In wind, the output depends on rated output and
  availability of wind to drive the turbines (the
  typical wind farm produces about 30 of the
  quantity that it would do if the wind blew
  strongly all year round the capacity factor)
• Example
• For a typical 50 MW wind farm, the annual energy
  production would be 50 times 24 (hours in the
  day) times 365 (days in the year) times 30
  (capacity factor)
• That is 131,400 MWh or 131.4 GWh

68
AMEC Wind Energy

• Total portfolio under development is around 2,500
  MW, broken down as follows
• AMECs share of onshore developments 1,100 MW
• Third parties share of onshore developments
  managed by AMEC 400 MW
• Offshore developments where AMEC is providing
  consultancy/project management services to
  Centrica 1,000 MW
• Value fundamentals
• Recent transaction value for onshore wind
  projects of circa 390,000 per GWh p.a.
• Capital cost of onshore wind farms 650-800/kW
• Confirm pre-tax returns of 20 achievable

69
AMEC Wind EnergyOnshore portfolio
Name/Location Rating No of wind Tip Planning
(MW) turbines height (m) status 1.
Proposals being developed by AMEC Long-term
prospects, various 100 100 100 Pre-planning Kyle
Forest, Ayrshire 300 100 125 Planning
application submitted Q4 2004 Isle of Lewis
(AMECs 50) 351 117 140 Planning application
submitted Q4 2004 Clashindarroch,
Aberdeenshire 130 47 100 Planning application
submitted Q3 2003 Aultmore,
Moray 60 30 100 Planning application
submitted Q4 2003 Minch Moor,
Borders 20 14 100 Planning application
submitted Q2 2003 Edinbane, Isle of
Skye 50 27 100 Conditional consent Q4 2002,
awaiting planning notice Tees Wind North,
Teesside 25 9 140 Conditional consent (AMECs
50) Q2 2002, awaiting Corus decision on
land
70
AMEC Wind EnergyOnshore portfolio continued

• Name/Location Rating No of wind Tip Planning
  (MW) turbines height (m) status
• Clachan Flats, Argyll Bute 16 9 79 Planning
  notice received
• 2. Projects developed by AMEC in the past and
  sold to third parties
• High Volts, Co. Durham 8 3 100 Operational (2004)
• Hare Hill, Co. Durham 5 2 100 Operational (2004)
• Holmside Hall, Co. Durham 5 2 100 Operational
  (2004)
• High Hedley, Co. Durham 2 3 71 Operational (2001)
• Kirkheaton, Northumberland 2 3 67 Operational
  (2000)
• Great Eppleton, Northumberland 2 4 70 Operational
  (1997)
• Blyth Harbour, Northumberland 3 9 41 Operational
  (1993)

• Notes on the above
• Data based on planning submissions made or
  management estimates where proposals are at an
  earlier stage
• Developments are subject to environmental and
  planning risk until fully consented and to
  delays in the commissioning of the national grid
  infrastructure needed to support renewable energy
  expansion

71
AMEC Wind EnergyOffshore portfolio

• Name/Location Rating No of wind Tip Planning
  (MW) turbines height (m) status
• 1. Developments where AMEC is providing
  environmental consultancy/project management
  services to Centrica
• Race Bank, Greater Wash c500 c100 tba Pre-planning
  
• Docking Shoal, Greater Wash c500 c100 tba Pre-plan
  ning
• Lynn, Skegness 90 30 150 Construction
  pending
• 2. Projects developed by AMEC in the past and
  sold to third parties
• Blyth Offshore, Northumberland 4 2 91 Operational
  (2000)

• Notes on the above
• Data based on planning submissions made or
  management estimates where proposals are at an
  earlier stage

72
Wind EnergyOnshore portfolio development
potential
Project Solutions
Potential capacity (MW)
1000
800
Conditional consent
600
Construction
400
In operation
200
0
2005
07
09
06
08
2010

• Assumptions
• Reflects projects as set out in
  supplementary slides and includes AMECs share of
  joint venture developments
• Excludes any additional new developments
• Excludes projects developed by AMEC in the
  past and sold-on to third parties
• Based on planning submissions made or
  management estimates where proposals are at an
  earlier stage
• Developments are subject to environmental and
  planning risk until fully consented and to
  delays in the commissioning of the national
  grid infrastructure needed to support renewable
  energy expansion