wyg capital markets day presentation · wyg capital markets day presentation 8 october 2014. 1....
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WYG Capital Markets Day PresentationWYG Capital Markets Day Presentation8 October 2014
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Momentum in delivering our strategy
• Revenue growth opportunity:
• UK recovery and order book momentum•
• EU funding cycle underway
• Leveraging skills and relationships internationally
• Margin opportunity:
• Front end positioning; higher margin mix
£15m PBT by 2018
• Project selection from a bulging pipeline
• Improving bid win rate
• Legacy cost unwind
£9m PBT by 2016
• Cash on balance sheet for acquisition growth
2011 target 2014 target
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The team
Paul HamerChief Executive
Sean CumminsGroup Finance
Graham OlverChief Operating
Tim HoldenHead of Region – UKChief Executive
OfficerGroup Finance Director
Chief Operating Officer
Head of Region – UK
Andrzej DziurdzikHead of Region –Europe, Africa and
Keith CookManaging Director –Socio-economic
Gordon LamondManaging Director -International
Clive AndersonDirector & Global Head of Major Projects
Levent Erkan Head of Region –Turkey & Middle East Europe, Africa and
AsiaSocio-economic Services
International Technical Services Projects
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4
Who we are
Global Programme and
Government Management Consultant
Global Programme and Project Manager
Multidisciplinary Consultancy
Consultant
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Never waste a good crisis:the best from the bestthe best from the best
Key Clients
Design a Unique Consultancy
Key Clients
Key Partners
Leadership
Governance Governance
Technical Excellence
Professional Excellence
Commercial SavvyCommercial Savvy
Operational Excellence
Major Projects and PPM
AcquisitionsBuilt Economic Social Technical
Acquisitions
Capital Cash and Bonding
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A Consultancy that does Engineering…does Engineering…
…not an Engineering Consultancy…not an Engineering Consultancy
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Broaden the canvas: Atkins & WYGMOD – FCO - DFID
Defence Diplomacy Development
EvidenceGeo-politicsEngineering
EvidenceBased
Investment
Monitoring & Evaluation
Geo-politics
Quick
mobilisation,
responsive to Evaluation
Stabilisation
responsive to
change, duty
of care
Long-term
programmesRule of law
programmes
FrameworksRule of law
Making
government
work
Plan
work
Economic
Governance
Plan Design EnableWYG UK
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Competitive landscape: follow the investmentfollow the investment
Soft Infrastructure (Capacity and People) – Hard Infrastructure – Operational Infra – Value For Money
KPMG
PWCEY
ADAM ACCENTURE
PWC
CARILLION
ARCADIS
KPMG
DELOITTE
EY
EY
DAI/HTSPE
T&TGrant
OPM
IMC
ADAM
SMITH
COWI
CARDNOKPMG
AECOM
DELOITTE
ACCENTURESKANSKA
BALFOUR
BEATTYHYDER
IMCCrown Agents
T&TGrant
ThorntonOPM
OPM
CARDNO
ECORYS
MOTT MCDONALD
KPMGAECOM
MACESweett
ACE
KBR
AMEC British
Council
Private Sector Foundations Engineering Consultants
NGOs9
What we do: a unique proposition a unique proposition
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What we do:asset creationasset creation
• UK centric
• Stand alone business
• One stop shop• One stop shop
• Do well in a rising economy
• Exportable Foundation
• Clients
• Know-how
• People and expertise
• Core Exportable Clients
• MOD• MOD
• FCO
• DFID
• Peaks of Excellence Making the • Peaks of Excellence
• Planning – Top 3
• Complex laboratories
• No 1 Northern Ireland
• Ecology
Making the
complex
simplesimple
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What we do:International development
• Government Capacity Building• Economic Development
Core Clients• Economic Development• Training and Employment
Investment in the future
• Her Majesty’s Government• European Union• Donor Institutions, (and International
Financial Institutions)• AID is cheaper than War• Geo Politics – Big Budgets• New Markets for Trade (and WYG)
Financial Institutions)
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Asset creation & international development: combineddevelopment: combined
Higher MarginHigh End
Making it Possible
Front End of Value Chain
National Planning
Making it Happen
Programme Management
Project Management
Making a Monitoring Making a Difference
Impact and Outcome
Monitoring and
Evaluation
New Growth Engine
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Why we win
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Relationships & partnering
Intimacy of relationships –new and repeat business, trusted partnertrusted partner
International development market means co-operation: market means co-operation: competitor/partner relations
Quality of partners - validate Quality of partners - validate brand and uniqueness of WYG added-value
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Win factors: 70% technical & solution in ID market70% technical & solution in ID market
VFM (economy, efficiency, effectiveness)
Client know-how – depth and breadth of the way they workClient know-how – depth and breadth of the way they work
Relationships and local on-the-ground delivery
Critical references and expertise network
Risk management & duty of care
Technical solutions Technical solutions
Financially viable option creation
Quality partners
Portfolio optimisationPortfolio optimisation
Trusted advisor
creative minds safe hands16
Why we deliverWhy we deliver
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Doing it right: growth & results from scalegrowth & results from scale
Customer
Focus
Operational
ExcellenceMajor Projects
Margin
Optimisation
Winning
Strategy
Clear, Cost, quality, Agile, responsive, Pricing,Clear, differentiated,hard to copy
Cost, quality, time-to-marketefficient, effective
Agile, responsive,portfolio optimisation
Pricing,project, grossoperating net
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How we do it:governance & agilitygovernance & agility
- resilience, comfortable with ambiguity, leadership
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Prudent ambition
Investment Investment
Committee
RightRight Client Client –– Right Project Right Project –– Right TeamRight TeamRightRight Client Client –– Right Project Right Project –– Right TeamRight Team
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Case study: Foreign & Commonwealth Office (FCO) – strategic growth under the radar(FCO) – strategic growth under the radar
The Foreign & Commonwealth Office (FCO) is in 200 different locations –others couldn't go
Key people in embassies, high Key people in embassies, high commissions
Professional support services estate managementestate management
Life cycle: construction, redevelopment, upgrading and refurbishment of new and existing buildingsbuildings
FCO part of the Stabilisation Unit –key tripartite new target - MOD, FCO, DFID
• Tip of the spear
• Nurture growth DFID
Relationships, quality performance, programme management
Invitation by FCO to bid their
• Nurture growth
• Seize the opportunity
• Expand
• Add credibility
• Get invited in to bid Invitation by FCO to bid their Development Programmes
• Get invited in to bid
• Future market
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What this means:positioned for growthpositioned for growth
End Markets: Nationally Critical, Long term funding commitments, Geo political drivers
Soft Infrastructure: making it possibleSoft Infrastructure: making it possible
• Stabilisation - Rule of Law and Judiciary
• Ministries and Local Government Capacity Building
• Broad Based Economic Development and Economic GovernanceEconomic Governance
• Urbanisation Optimisation and Rural Development
• People Development and Training
Hard Infrastructure: making it happen
• Front-End Development - feasibility, viability, • Front-End Development - feasibility, viability, financeable
• Life Cycle Client Support – delivery of asset or output
Outcome Management: making a differenceOutcome Management: making a difference
• Development and Programmes have a purpose, an end game
• Do our job well as a team, we grow, we make money – and attract talent and niche businesses
make our Clients the heroes• Our job is to make our Clients the heroes of the story
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Growth potential:2015 - 20182015 - 2018
£15m PBT£15m PBT
£5m PBT
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UK: selective growthselective growth
� Front End Focus – creating value, reducing risk
� Niche Provider � Niche Provider
� Higher Margins
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UK operation: every stage of the project life cycleevery stage of the project life cycle
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Our clients:diversified opportunities for growthdiversified opportunities for growth
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UK:selective work winningselective work winning
Targeted Frameworks
• Historic constraints:
• Lack of balance sheet
• Wrong culture, lack of vision
• Lack of bidding discipline and • Lack of bidding discipline and focus
• Great results – and more to come:
• Portfolio wins 6 out of 7 • Portfolio wins 6 out of 7 awarded (2 pending) >£100m over 7 years secured
• Targeted operational • Targeted operational outperformance underpins growth
• Relationships and Partnering:
• Foundation for overseas success
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Pipeline & order book:underpin for growthunderpin for growth
• Long term business 70% annual revenue 70% annual revenue underpin
• Short term business 25% underpin25% underpin
• Growing committed underpin & increasing identified pipeline identified pipeline point to future revenue growth
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Case study:Bicester masterplanBicester masterplan
Our urban & landscape design experts have created a masterplan for Bicester, which promotes an enlarged and promotes an enlarged and vibrant town with a comprehensive range of new homes, employment opportunities and local opportunities and local facilities that will support its expanded future role in the region.
• Client: Cherwell DistrictThe masterplan was developed through an innovative, collaborative design process, channelling
• Client: Cherwell DistrictCouncil & Oxfordshire CountyCouncil
design process, channelling the aspirations of residents, businesses and local government.
• Won: Referral / repeat business
• Services Provided:
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Case study: North West Coast Connections ProjectNorth West Coast Connections Project
Local knowledge and presence is the key to certain projects, but when combined with but when combined with national strength and a particular sector expertise, the combination provides a powerful mechanism with powerful mechanism with which to resolve complex technical problems.
This is no more typified than This is no more typified than by our role on the North West Coast Connections Project, a nationally significant energy infrastructure project in the
• Client: Cumbria CountyCouncil
• Won: Mini competitionvia an existing
infrastructure project in the UK.
via an existing framework
• Services Provided:
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Case study: Swindon – largest privately funded urban expansion project in Europefunded urban expansion project in Europe
• Major retail centre, four primary schools, a secondary school, an Asda secondary school, an Asda superstore, a range of community and leisure facilities, and a high quality public realmpublic realm
• Crest Nicholson
• Taylor Wimpey
• Persimmon
• Bloor Homes• Bloor Homes
• Asda
• Part traditional low-density suburban development,
Housing market: 75% private sector£6 billion: new housing£6 billion: commercial • Focus: client's invest
suburban development, Priory Vale is a model for higher density, architectural-led urban design
• Focus: client's invest• Scaled up PPM• Order Book: strong• Future: scalable to reflect
pre/post election designpre/post election
• Services Provided:
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People:teamworkteamwork
� Attracting talent – growth
� Developing talent � Developing talent
• Leadership
• PM
• Apprentice and graduate• Apprentice and graduate
� Disciplined people, disciplined thought and disciplined action
� Governance
• CDOP - benefits – evidence insurance
• Risk and duty of care
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Conclusion: selective growthselective growth
• Front end focus
• Higher margins• Higher margins
• Growth opportunities, greater than tide
• Importance of frameworks, bidding & governance• Importance of frameworks, bidding & governance
• Order book growing
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International development market
• Size of the EU international development market
• EU is largest donor in international development
• EU’s approved budget is nearly €1 trillion over 7 years (2014-20) for development in EU member states and EuropeAid programmes (€82 bn in external aid)
• 70 spending programmes and the spending priorities are visible through the Multiannual • 70 spending programmes and the spending priorities are visible through the Multiannual Financial Framework (MFF) Regulation and Budget
• MFF 2014 – 2020 budget is about 3.5% lower than 2002-2013 period, but some budgets are increased in key areas of WYG operation
• Bond facility for use in advance payment guarantees – 20-40% of contract value
• Funding, budget focus and route to market on 3 elements:
Before joining EU – mainly the Western Balkans and Turkey (the IPA programme)• Before joining EU – mainly the Western Balkans and Turkey (the IPA programme)
• After joining EU – the post-accession support for European Integration
• EuropeAid – Rest of World support for Africa, Asia and Caribbean• EuropeAid – Rest of World support for Africa, Asia and Caribbean
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Market opportunities: EU budget 2014-2020EU budget 2014-2020
• Delivering over 43 EuropeAid30
35 30.51
EU Multiannual Financial Framework
EU Multiannual Financial
EU Multiannual Financial Framework
• Delivering over 43 EuropeAidcontracts (FY 13-15)
• Delivering a diverse range of projects
5
10
15
20
25
30
11.5 11.2
16.9
22.68
2.062
11.70 15.43
19.66
2.34
Bil
lio
n €
EU Multiannual Financial Framework (2007-2013) €bn
EU Multiannual Financial Framework (2014-2020) €bn
• Sierra Leone: Review and acquisition of integrated financial management treasury systems -€200,000
• Western Balkans Infrastructure
0
5
IPA ENI (ENPI) DCI EDF IfSP
2.062 2.34
Funding Mechanism
• Western Balkans Infrastructure Projects Facility I - IV €93 million
• No.1 UK Service Provider in Europe and No.1 Service
4.187 4.318 4.463 4.6224.796
4.988
4.5
5
5.5
Bil
lio
n €
European Development Fund 2014 - 2020European Development Fund 2014 – 2020 (11th EDF €30.5bn)
Europe and No.1 Service Provider in Europe
3.132
2
2.5
3
3.5
4
4.5
Bil
lio
n
2
2014 2015 2016 2017 2018 2019 2020Year
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Market opportunities: EU Instrument for Pre-Accession (IPA) 2014 - 2020Pre-Accession (IPA) 2014 - 2020
• IPA funding 2007 – 2013: €11.1 bn
• IPA II funding 2014 – 2020: €11.7 bn• IPA II funding 2014 – 2020: €11.7 bn
• 32% for SEE countries – €3.7 bn
• 38% for Turkey - €4.4 bn
25% for multi-beneficiary programme - €2.9bn• 25% for multi-beneficiary programme - €2.9bn
649.5
2958.7
Albania
The former Yugoslav Republic
of Macedonia
Kosovo*649.5
664.2
645.5
4453.9
Kosovo*
Montenegro
Serbia
270.51508
Serbia
Turkey
Multi-Beneficiary Programme
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Market opportunities: EU Instrument for Pre-Accession (IPA) 2014 – 2020: TurkeyPre-Accession (IPA) 2014 – 2020: Turkey
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Pre-Accession to EU Member State Budgets: Croatia 2005 - 2020Croatia 2005 - 2020
External donor assistance
National Government Programmes
Private Sector
PHARE, IPA ESI FUNDSISPA, ISPA, SAPARD
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Market Leader in EuropeAid
Top 10 EuropeAid Contractors (2012- onwards)
Pos. CompanyContracts
AwardedPos. Company
Awarded
1 WYG International (UK) 43
2 Eptisa (ES) 41
3 GOPA Consultants (DE) 39
4 Hulla and Co Human Dynamics KG (AT) 38
5 GFA Consulting Group (DE) 365 GFA Consulting Group (DE) 36
6 GIZ Deutsche Gesellschaft fur Internatio ... 30
7 ACE International Consultants (ES) 23 (now part of AECOM from 2014)
8 Ecorys Nederland BV (NL) 23
9 Eurecna (IT) 20
10 SOFRECO (FR) 1810 SOFRECO (FR) 18
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What we do
• The nature of Technical Assistance (TA) Services • Management advisory services• Programme and project management• Programme and project management• Institution building and training• Technical advisory services, mainly front end focus
• Two broad revenue streams• Two broad revenue streams• Socio-economic services (“Tip of the Spear”), typically• Human resource development• Public Finance Management• Governance, institution building, training• Governance, institution building, training• Regional and economic development• Rural development
• Infrastructure-related services, typically• Infrastructure-related services, typically
• Institutional capacity building of Ministries and government agencies
• Feasibility studies, planning and procurement advisory servicesservices
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How we win
� Pre-positioning
• Country, sector and project intelligence• Knowledge of client needs and preferences• Competitors/Partners• Competitors/Partners• Key experts and past track record (project references)
� Partnering
• Partnering required for pre-qualification in a reference and financial status-driven process• Partnering with major international companies and niche players• Partnering with major international companies and niche players• Opportunities for strategic alliances targeting portfolio of opportunities
� CVs
• Strict compliance with Terms of Reference criteria• Qualifications, Years’ experience, Country experience • CVs can account for 60% of the total Technical score • CVs can account for 60% of the total Technical score • Database of 16,000 experts • Key Experts tied in as WYG Associates and potentially fulltime staff
� Scoring
• Evaluation criteria specified in Invitation to Tender• Evaluation criteria specified in Invitation to Tender• Technical Proposal – Methodology, CVs, Timetable• Technical / Financial weightings
(usually 70% technical: 30% financial)� Transparency
• Published results• Published results• Rights of appeal
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Western Balkans case study Client: European Commission.
Services: Project management, monitoring and evaluation, policy advice and reforms, assisting and advising government, design management and delivery of state programmes, communication and visibility activities, Pre-feasibility studies, feasibility studies, financial affordability analysis, technical design, development of budget and financing plans, preparation of tender documents, design and of budget and financing plans, preparation of tender documents, design and delivery of training, monitoring and evaluation of civil and engineering works, social impact assessments, mapping of stakeholders.
Country: Multi – Albania, Bosnia and Herzegovina, Croatia, Kosovo, Macedonia, Montenegro, Serbia.
Gross Fee to Consortium: €92 million (contracted).
Project duration: each facility 3 years + time extensions, so up to 6 years contract period (IPF3 2012 – 2018 contracted).
Project Objectives: The second phase of a massive EU-funded programme to restore and upgrade transport, environment and energy infrastructures across
Previous experience with infrastructure projects –
where are the problems?restore and upgrade transport, environment and energy infrastructures across the Western Balkans. Project builds on foundations already successfully laid down by the first phase led by WYGI. Combined, these two projects represent largest ever single programme of work for WYGI.
Overall programme of work is geared towards the development of efficient
where are the problems?
• Inadequate strategic planning and programming
• Blockages and delays due to inadequate project
preparation (spatial planning and land ownership
issues)
• Poor quality of project documentation (Feasibility Studies,
CBA and EIA studies)
• Project ownership and participation of beneficiaries Overall programme of work is geared towards the development of efficient transport, energy and environmental infrastructures at both national and regional levels. The programme is helping identify and develop crucially needed projects, then provide documents, such as pre-feasibility and feasibility studies, preliminary and detailed design studies, required to unlock financial support of the International Funding Institutions.
• Project ownership and participation of beneficiaries
(municipalities)
• Insufficient administrative capacity at national and local
level (number, quality, continuity)
• Questionable sustainability of projects due to
inadequate financial planning
the International Funding Institutions.
Downstream potential: Consultancy opportunities for project development and implementation after financing secured through blend of loans/grants/national budgets.
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WYG’s focus: pre-positioning & localisation pre-positioning & localisation • Established EuropeAid player
• Established in key countries receiving EU funding
• WYG has a clear European market leadership position for the large and strategically significant EC market
• EC Western Balkans leadership position through the €93m IPF portfolio. This is being leveraged into WYG country firms in Croatia and then Serbia, with potential to develop “mini-UK businesses” - asset creation in local markets
• WYG Polska has a top 4 market position amongst all professional services consulting firms in the Polish • WYG Polska has a top 4 market position amongst all professional services consulting firms in the Polish market
• WYG Turkey has a clear leadership position in Turkey, the largest single country of operations for the EC
• Localisation Strategy to establish long-term footprint in pre-accession countries and recipients of IPA • Localisation Strategy to establish long-term footprint in pre-accession countries and recipients of IPA
• Linking best-in-class international credentials with local presence and know-how
• Established local companies to ensure transition to national programmes and procurement modalities (Poland > Romania and Bulgaria > Croatia) – additionality from the donor market(Poland > Romania and Bulgaria > Croatia) – additionality from the donor market
• Established market presence in key IPA countries (Turkey, Western Balkans)
• Regionalise the businesses in WB and SA, changing the ”portfolios of projects” into viable businesses
• Build long term local market presence in Poland, Bulgaria, Romania, Croatia with new private and public sector clients, positioning the businesses as ”management consultants”
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Conclusion
• No 1 in EU
• Recognised winner
• Reputation for delivery• Reputation for delivery
• In demand for partnering
• Growing market & ROW platform for diversification• Growing market & ROW platform for diversification
• Stability of budgets and visibility of opportunities
• Geographic diversification - based on track record
• Service line diversification - through knowledge of bidding process and positioning
• Donor diversification – geography and service line
• Next – A country specific example: Turkey
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WYG Turkey Leader of the EU Pre-Accession Projects
• Since 2007, Market Leader in delivering technical assistance to public sector in multi-discipline sectors at socio-economic and technical engineering consultancy projects
• WYG Turkey has been awarded 20 large scaled projects in Turkey in the last 5 years where as our top competitors such as GIZ (Germany), Ecorys (Netherland) and GOPA (Germany) have been awarded 5 projects each.
• Successful Quality Project Delivery appreciated• Successful Quality Project Delivery appreciated
• Accredited ‘Global’ Registered Education Provider of the Project Management Institute (PMI®) and Registered Consultant since 2004
• Selected National Champion at our Sector, by European Business Awards in 2013/2014• Selected National Champion at our Sector, by European Business Awards in 2013/2014
• Growing through the improving number of sector diversification
• Human Resources Development• Human Resources Development• Regional Development and Comp• Environment & Water• Health
48
Market: Turkey has 50% of Budget €900m
The European Union continues to supportAlbania, Bosnia and Herzegovina, the formerYugoslav Republic of Macedonia, Iceland,Yugoslav Republic of Macedonia, Iceland,Kosovo, Montenegro, Serbia and Turkey.
Pre-accession countries will have a budget ofdedicating €11.7 billion for the period 2014-dedicating €11.7 billion for the period 2014-2020.
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Why WYG leadsCurrent Competitive Advantages are:
� Local: Local Offices and Local Leaders� Local: Local Offices and Local Leaders
� Global: Global Company and International Experience, positive synergies
� Sector Diversification: Socio-economic and technical engineering consultancy coverage; with IT and Communication Management
� Partnership: Strong Local and Global Network Partnerships
� Bidding Know-How: Knowing the bidding cycle very well and positioning early in more than 10 years
�
very well and positioning early in more than 10 years
� Project Delivery Quality and Compliance: Accredited Global Education Provider and Registered Consultant of Project Management Institute (PMI). Consultant of Project Management Institute (PMI). Audited every 6 month by European Union through Projects, internal and external auditing processes
� Innovative: Usage of innovative business web based � Innovative: Usage of innovative business web based tools and proven processes with our partners, clients and teams
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EU AID project example in Turkey
Project Name: Support to the Solution of Economic and Social Integration Problems in İstanbul, İzmir, Ankara and Bursa as Major In-Migrant Destinations in Turkey
Project Budget: 8.125.800 EuroProject Budget: 8.125.800 Euro
Project Components:
� Socio-Economic Consultancy: Social Mapping, 4 Social Service Centers, Strategic � Socio-Economic Consultancy: Social Mapping, 4 Social Service Centers, Strategic Action Plans, Trainings, Study Visits
� Technical Engineering Consultancy: Environmental Impact Assessment and Feasibility Studies for Investment Packages at Infrastructure Works
� IT: Client Tracking Systems
� PR: Publicity Campaigns and Communication Management
451
Pre-Accession pipeline – €130m+Project value in
million EUR
Turkey
Project 1 5,08
Project 2 3,85
Project 3 2,98
Project 4 2,00Project 4 2,00
Project 5 1,90
Project 6 6,11
Other 52,38
Total 74,30Total 74,30
W.Balkans
Project 1 5,50
Project 2 4,00
Project 3 3,43Project 3 3,43
Project 4 2,80
Project 5 2,50
Other 38,23
Total 56,46Total 56,46
Grand total (Turkey + W.Balkans) 130,76
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Pre-accession order book increasing:
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Pre-accession future & summary
• “Sustainable Leader” of the sector• “Sustainable Leader” of the sector
• Order Book: Increasing Project Pipeline Volume compared to the last 2 years
•• Diversification:
• Adding and improving new capabilities and services to our offices through in-house capabilities (Water, European Union capabilities (Water, European Union Framework)
• Mixing the Europe Aid Experience with other Aids such as UK Aid in our strong regions like pre-accession countriesregions like pre-accession countries
• Financially Stronger:
• Bid as Leader again which will allow us to increase our revenue
• More Win Work with better margins through our improved model in the Europe Aid market by being mix of “local and global” and in-house billable experts
54
Capacity building numbers “just” in Turkey
Within the scope of different projects and programmes, we have conducted training programmes, studyvisits with both local and international consultants such as:
� trained more than 89.000 people in public & private institutions in 81 provinces within the last fiveyears
� organised 54 study visits in 19 different EU Member States
� delivered 11 internship programmes implemented in 8 EU Member States
� worked with consultants from 23 different countries in Turkey successfully
� managed to be supplier to 156 institutions such as municipalities, local governances, civil societyinstitutions, private companies and ministriesinstitutions, private companies and ministries
55
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Post-Accession:introductionintroduction
� In our post-accession (‘New Europe’) markets we have successfully implemented a very competitive business model based on a diversified offering to our clientscompetitive business model based on a diversified offering to our clients
� Local delivery of a global capability differentiates WYG from what is often global capability attempting local delivery
� This business model allows us to target operations at the level of the leading medium sized management and technical consultancy
� On these markets WYG is a top brand, and we compete with the full spectrum of � On these markets WYG is a top brand, and we compete with the full spectrum of international and local players, ranging from E&Y, Randstad, Mott, local consultancies, and all the way – in some segments – to Mr. Kowalski’s one man band
57
Post-accession:the regionthe region
58
Post-accession:the WYG business modelthe WYG business model
� In our post-accession markets our main client base switches to national public and private sector� In our post-accession markets our main client base switches to national public and private sector
� Our business model does NOT try to „export” a foreign experience or capability into these markets
� We develop local consultancy businesses, while at the same time maintaining the ability to win needle-� We develop local consultancy businesses, while at the same time maintaining the ability to win needle-
shifting large scale projects
� We operate service lines through a mix of multi-sector project management and specialised direct
delivery business units
� Hence no project is too small, and yet no challenge too large, as the management teams and
approaches are robust and flexible enough to deal with both types of businessapproaches are robust and flexible enough to deal with both types of business
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WYG is:
10% Strategic advisor
30% Management consultant and trainer to business
10% Strategic advisor and trainer to government
10% Policy and market research organisation
30% Human resource development
10% Project and programme developer, planner, and access to financing expert
30% Human resource development expert 10% Engineer, project manager
and construction supervisor
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WYG at all the stages of the financing cycle
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Management consultant
Client: Polish Agency for Enterprise Development
Need: To alleviate the negative impact of the economic slowdown on the financial condition of enterprises
Idea: To impact on enterprises BEFORE they become businesses in difficultyIdea: To impact on enterprises BEFORE they become businesses in difficulty
Tool: Rapid Response Instrument – an integrated financial monitoring, advisory and training programme in which WYG experts take enterprises through a series of diagnostic, planning, advisory, training, strategy implementation, and results diagnostic, planning, advisory, training, strategy implementation, and results monitoring activities
Leverage: With our support more than 200 enterprises have prepared and implemented business development plans within this 12.0 MEUR EU financed programme, business development plans within this 12.0 MEUR EU financed programme, currently extended by another 1.3 MEUR
62
Nuclear new build
Client: PGE EJ 1 (final client); partnership with Amec (direct client)
Need: Increased and diversified supply of energy in Poland (10% or 40% of total supply)
Idea: NNB in northern Poland, first phase 3000 MW, integrated proceedings for Idea: NNB in northern Poland, first phase 3000 MW, integrated proceedings for technology vendor, construction, fuel supply and disposal, operator, strategic partner.
Tool: Amec selected as owners engineer/technical adviser; WYG at over 40 MEURTool: Amec selected as owners engineer/technical adviser; WYG at over 40 MEUR(with expected minimum 8 MEUR)
Leverage: If process successful second phase 3000 MW initiated
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The driver of development
64
Potential & captured market
The potential market
� In the next 10 years EU structural and cohesion funding will continue to be the trigger for development � In the next 10 years EU structural and cohesion funding will continue to be the trigger for development projects in the region, and the EU budget allocations for our countries are at their highest levels ever
� Poland record holder with 82.5 billion euro for cohesion policy
� Bulgaria’s Partnership Agreement with EU developed with WYG support
The captured market
� Historical size of captured market for WYG has been roughly at 15 MEUR (low point in EU cycle) to 25 MEUR (high point in EU cycle) in annual revenue
� After growth (Croatia) and diversification (Poland) current year (low point in EU cycle) annual revenue � After growth (Croatia) and diversification (Poland) current year (low point in EU cycle) annual revenue targeted at around 21+ MEUR
� Next few years extremely exciting as with diversified base „cyclical” growth will add to and not replace current levels of activity, hence expected revenue levels growing through 30 MEUR to 35 MEUR by FY18
65
Comparative scale of the business
The “Big 5” are about 4-5 times our sizeWYG is about 2 times the size of international and 4-5 times local competitorsWYG is about 2 times the size of international and 4-5 times local competitors• Current scale of operations a reflection of:
• the overall size and dynamics of the economies
• however impacted heavily by the ability to utilise the massive development • however impacted heavily by the ability to utilise the massive development interventions made possible through the EU Structural and Cohesion funding
• Future growth for WYG will come from:
• continued pace with which these economies catch-up with ‘old Europe’• continued pace with which these economies catch-up with ‘old Europe’
• extending the packages of services delivered
• attaining intensive growth through the upgrading of the ability to cross-sell between the existing service linesthe existing service lines
66
WYG’s macro-economic rationale for growth
67
Short term priorities
Looking to 2015 and onwards, and in the contexts of both the economic and EU cycles we are currently:currently:
• finalising the implementation of a whole generation of 2007–2013 financial perspective projects
• but also winning and delivering in such varied sectors as nuclear new build; defence; railways; recruitment, selection and temporary work
• implementing the preparatory projects for the new 2014–2020 financial perspective, especially in transportespecially in transport
• awaiting the launching of large scale mainstream opportunities, the first of which will involve 50 MEUR in outsourced services for the regional labour market offices in Poland
68
WYG’s key competitive advantage
� The development programmes - in infrastructure, human resource development,
economic competitiveness, local and regional development - are clearly leaving a positive economic competitiveness, local and regional development - are clearly leaving a positive
mark on the post-accession countries
� WYG has participated in the implementation of these enormous development programmes� WYG has participated in the implementation of these enormous development programmes
at all stages of the financing cycle
� In WYG we bring together under one roof the advice and delivery support that is required � In WYG we bring together under one roof the advice and delivery support that is required
by our clients, as they invest in development
69
70
Overview
Growth in Africa: building a leading position based on our value proposition for growth
1
Market Assessment and Key Clients2
3 Success Stories: Regional growth and client 3
4
Success Stories: Regional growth and client diversification in Africa
Growth and diversification: how we do it
New Opportunities and Alliances5
71
Building a leading position in Africa
� We are No.1 in EuropeAid as well as in South Africa
� Initially we focused on business acquisition in Southern Africa and Northern Africa
� To date we’ve won business valued at €130M and have new signed contracts (work still to deliver) to the value of €44M - a record high for the region
� 37 signed contracts in SA either delivered or ongoing, in W & E Africa we’ve secured 30 contracts and North Africa and Middle East has 14
�� Currently we are implementing 31 projects in 20 countries
� Over the past 2 years we’ve focused on filling the “missing middle” - new operational hubs in five main “missing middle” - new operational hubs in five main sub-regions
� We aim to be No. 1 in Africa
Capital flows to Sub-Saharan Africa continued to rise, reaching an estimated 5.3% of regional GDP in 2013, significantly above the developing-country average of 3.9 %
72
WYG’s “value proposition” for further growth in Africa growth in Africa
Regions > Southern Africa Central (East) Africa East Africa West Africa North Africa & ME
WYG Office > Pretoria Kampala Nairobi Abuja Tripoli/Tunis
Industry beating project management systems and tools (our differentiator)
Global growth through localisation to create sustainable businesses and results
Tailored to development trends- delivering in Fragile and Conflict Affected States & focusing on Climate Change opportunitiesFragile and Conflict Affected States & focusing on Climate Change opportunities
A trusted partner for development - Client and beneficiary focused
One-third of Africa's countries have GDP growth rates of more than 6%. Growth was largely
Proven in-house expertise increasingly drawn from disciplines across Group – infrastructure, environment, defence and security…
One-third of Africa's countries have GDP growth rates of more than 6%. Growth was largely driven by the private sector, thanks to improved economic governance and a better business climate on the continent (AFDB 2013)
73
International – Rest of WorldInternational – Rest of World
Market Assessment & Key Clients
74
DFID spend - £3.6BN
3.0
4.0
Growth of DFID Spend in Focal Countries
Pakistan446
AfghanistanOPT
Tajikistan 9
Kyrgyzstan 5
Syria*75
0.0
1.0
2.0
3.0
2012-13 2014-15
2.93.6
£ B
illi
on
Financial Year
Yemen90
Sudan41
Ethiopia
Afghanistan178
OPT88
Nepal100
India280
Bangladesh300
Burma58
Libya*20
Financial Year
Sierra Leone
77
Sierra Leone
77
Nigeria 305
Kenya 150
Ghana100v
Ethiopia 390
DRC 258
Uganda 90
Rwanda90 Tanzania
Somalia 80
Zimbabwe 95
Zambia 63
Zimbabwe 95
Mozambique 85
Malawi 98
Tanzania 168
Amounts represented are in £ million from DFID annual budget allocation for the particular country
South Africa
19
country
• Active pre-positioning in core DFID markets:
• Currently partnering with market leaders:
• Climate Resilient Infrastructure Development Facility - partner ASI
75
• Climate Resilient Infrastructure Development Facility - partner ASI
• Libya Security, Justice and Defence – partners Cardno & KBR
• Syria Acquisitions – 15 partners including Crown Agents
• 85% Incumbent rule and Project Extensions a key long-term revenue driver
EuropeAid spend - £4.2BNEuropean Development Fund 2014 - 2020
3.132
4.187 4.318 4.463 4.622 4.796 4.988
3
3.5
4
4.5
5
5.5
Bil
lio
n €
Mali2078
2
2.5
3
2014 2015 2016 2017 2018 2019 2020Year
Nigeria 512
Ivory Coast 8.12 Ivory
Coast 8.12 Ivory
Ethiopia745
Djibouti 105
BeninCAR344
Chad328
Ghana 323
Eritrea 122
Liberia219
Côte
D’Ivoire
Burkina Faso708
Senegal298
South Sudan285
Sudan60
Gambia60.8
Niger 596
Sierra Leone 376
Guinea Bissau103
EU Multiannual Financial Framework 8.12 Ivory Coast 8.12
Kenya 435
Somalia 286
Benin380 Cameroon
250
344
Congo89 DRC
562
D’Ivoire
273
Rwanda382
Burundi206
Uganda460
Tanzania 62620
25
30
35
16.9
22.68
11.7015.43
19.66
30.51
Bil
lio
n €
EU Multiannual Financial Framework
EU Multiannual Financial Framework (2007-2013) €bn
EU Multiannual Financial
Angola 228
Malawi605
Namibia 104
Zambia490
Zimbabwe761
Mozambique6340
5
10
15
IPA ENI (ENPI) DCI EDF IfSP
11.5 11.2
2.062
11.7015.43
2.34
Bil
lio
n
EU Multiannual Financial Framework (2014-2020) €bn
Botswana 33
• Delivering over 43 EuropeAid contracts (FY 13-15)
• Delivering a diverse range of projects
• Sierra Leone: Review and acquisition of integrated financial management treasury systems -
South Africa 7.81
South Africa 7.81
Swaziland 62Lesotho
162South Africa980
Funding Mechanism
• Sierra Leone: Review and acquisition of integrated financial management treasury systems -€200,000
• Western Balkans Infrastructure Projects Facility I - IV €100 million
• No.1 UK Service Provider in Europe and No.1 Service Provider in Europe
76
Tunisia9.38
New donor markets: AfDB & WB
African Development Fund (ADF) AllocationsAlgeria5.91
Chad1.29
Mali3.21Mauritania
1.45
SenegalSudan1.54
9.38
Egypt1.54
6.00
8.00
10.00
5.4
8.99.5
(US
$ b
illi
on
)
African Development Fund (ADF) Allocations
Nigeria 18.74
Kenya
Uganda 7.9
Ghana 8.28
Ivory Coast 6.45
Ethiopia12.98
Benin1.83
Burkina Faso3.63
Cameroon3.65
CAR0.72
Djibouti0.25
E. Guinea0.72
Eritrea0.56
Guinea1.74
Guinea Bissau0.41
Niger2.41
Rwanda
Senegal4.07
Sierra Leone1.15
Liberia1.96
Somalia0.49
South Sudan1.21
1.54
Gambia0.04
Togo1.25
0.00
2.00
4.002.8
3.42 3.2 3.38 3.5
(US
$ b
illi
on
)
Tanzania10.86
Kenya 9.11
DRC 6.25
Angola1.10
Burundi1.84
Congo0.78
0.72
Gabon0.51
Malawi
Rwanda2.69
ZambiaDisbursements for IBRD and IDA for Africa
Map depicts combined AfDB and WB total fund allocation in $US billion
Mozambique5.52
Botswana0.91
Lesotho
Madagascar3.72
Malawi3.67
Namibia0.02
Swaziland0.25
Zambia4.29
Zimbabwe1.66
620.9 625.44
500
600
700
(US
$ m
illi
on
)
Disbursements for IBRD and IDA for Africaallocation in $US billion with lighter colour suggesting WB allocations only
South Africa 4.25
Lesotho0.76
320.57
374.8
300
400
500
2010 2011 2012 2013(U
S$
mil
lio
n)
AfDB:
• Group loans and grants approvals grew by 34% in East Africa, 32%in Southern Africa and 125% in West Africa between 2012 and 2013reaching $US 4.2 billion
• AfDB lending targets for 2014 – 2016 are $US 14.3 billion• AfDB lending targets for 2014 – 2016 are $US 14.3 billion
World Bank:
• IBRD and IDA disbursements for Africa reached $US 183 billion
• Total IDA (International Development Association) grants for Africareached $US 265 million in August 2014 77
Success story:
Regional growth & client diversification in Africadiversification in Africa
78
Success story 1: Regional Focus - Africa
16,000,000 €
18,000,000 €
20,000,000 €Africa - Turnover
Established East & Central African hubsEstablished East &
Central African hubs
6,000,000 €
8,000,000 €
10,000,000 €
12,000,000 €
14,000,000 €
16,000,000 € Central African hubsAcquisition of DELTACentral African hubsAcquisition of DELTAFirst Libyan
contract awarded PSD,
(Sep 2013)
First Libyan contract
awarded PSD,(Sep 2013)
WYG Targets Africa/FCAS
FY11 FY12 FY13 FY14 FY15* FY16** FY17** - €
2,000,000 €
4,000,000 €
6,000,000 €
Africa 5,330,711 € 5,950,692 € 4,199,350 € 8,066,558 € 13,591,447 € 16,309,736 € 18,756,197 €
Focus on expanded
JV established SJD Libya
W Africa Incorporation
W Africa Incorporation
West AfricanWest Africanexpanded regional
footprint in NW & E Africa
JV established in Libya
SJD Libya Won
(May 2014)
Incorporation(December
2014)
Incorporation(December
2014)
West Africanhub
established
West Africanhub
established
Record level of new contracts signed - €44m in FY15Record level of new contracts signed - €44m in FY15Record number of live contracts - 31 in FY 15Africa:
79
Global growth through localisation:WYG South AfricaWYG South Africa
� 2004: Landmark project won in South Africa – Local Economic Development in Kwazulu Natal – a 13.5m Euro DFID flagship programme
� 2004-09: KZN and Eastern Cape LED programmes gave opportunity to create national expert teams and project offices in Pretoria and regions
� 2010: WYG South Africa established as wholly owned subsidiary
� WYG South Africa provides the platform for our Southern African development
� Managing Director of WYG SA first worked as a national expert on our KZN programme
� WYG SA has 13 completed or active projects worth £22.7m for both international donors (Europe Aid and DFID) and national and international donors (Europe Aid and DFID) and national and provincial government clients
� WYG SA is a local business with a sustainable future (even after the donors leave)
Capital flows to Sub-Saharan Africa continued to rise, reaching an estimated 5.3 % of Capital flows to Sub-Saharan Africa continued to rise, reaching an estimated 5.3 % of regional GDP in 2013, significantly above the developing-country average of 3.9 % (World Bank 2013)
80
The story of CRIDF:an example of our successan example of our success
Southern Africa, Climate Resilient Infrastructure Development Facility (CRIDF), 2013-17, £18.2m, across 11 SADC countries:
Key points in process:Key points in process:
� Opportunity tracking and prepositioning through WYG’s SA office
� Alliance with market leader (ASI) - a winning partnership
� Provided the client’s preferred Team Leader from our own staff
� Investment of resources to have leading role in bid preparation
Success factorsSuccess factors
� WYG demonstrated technical excellence in delivery
� Gave DFID confidence to accelerate the programme to 2 years
� Won DFID support for CRIDF+ a £2.5m strategic foresight programme to take CRIDF forward
� Now in a position to expand CRIDF programme when DFID is ready
� WYG and ASI became trusted partners – based on evidence of our performances – mutual learning � WYG and ASI became trusted partners – based on evidence of our performances – mutual learning and benefits accrued
81
WYG’s growth trends:
by clientby client
EuropeAid
DFID
World Bank
AfDB
IF (EIB, EBRD,...)
Other
82
83
Content
• The Major Projects Unit
• Selecting opportunities to enhance success rate• Selecting opportunities to enhance success rate
• Recent success and pipeline of opportunities
• Approach to pre-positioning
• Growing with established client’s - FCO, MoD, DFID
• Increased scale of opportunity through partnering
• Duty of care for insecure locations• Duty of care for insecure locations
• Exemplar projects
84
Major Project Unit:governancegovernance
85
Frameworks:growing with our key clientsgrowing with our key clients
2013/14 Revenue £10.5m
Annual potential £24.0m
86
Increased scale: through partnersthrough partners
87
Case Study: supporting Poland’s nuclear programmesupporting Poland’s nuclear programme
88
Strategy:Fragile & Conflict Affected StatesFragile & Conflict Affected States
• Strategy developed over the last two years
Three key clients covering Defence, Diplomacy and Development• Three key clients covering Defence, Diplomacy and Development
• “Your company has been identified through engagement between the central government departments; Ministry of Defence, Department for International Development and the FCO.”
• FCO invitation to a Syrian Region Supplier Day 15th July 2014
89
Duty of care: approach to de-risking projects in insecure locationsprojects in insecure locations
90
Case study:Libya – security justice & defenceLibya – security justice & defence
91
UK Foreign Policy: Middle East securityMiddle East security
92
Conclusion: targeted growth targeted growth
• Follow the investment
• Grow with existing clients
• Scale up with partners
93
94
Key growth opportunities
UKUK
• Growing market share: framework successes and an improving pipeline
• New ‘Commercial Development & Operations Process’ (CDOP) underpins margin progression through improved project selection and delivery
Europe
progression through improved project selection and delivery
• Rising tide of the economy driving increased spend
Europe
• Approved EU budget increases spend in key areas of WYG operations
• Bid as leader with bond facility – greater revenue and margin opportunity
• Sector, capability, geography and client diversification
International
•• New client targeted 2 years ago – great success to date
• Client focus in Africa – responding appropriately
• Political will of UK government shaping our FCAS business
• New tools being developed in recognition of market needs
95
Group revenue
£200
£10m
£10m
£20m
£180
£190
£200
Mil
lio
ns
£15m
£10m
£160
£170
£180
£25m
£175m £140
£150
£135m £120
£130
9% op margin
£100
£110
Mar 15 UK growth 3 yrs @
10% p.a.
Growth with
DFID/FCAS
European funds
Pre/Post @ 7% p.a.
Strategic M&A Contingency &
market volatility
Mar 18International
growth
96
Group PBT
£20
£1.5m £2.5m£16
£18
£20
Mil
lio
ns
£2m
£2m
£2.5m
£12
£14
£16
£5m
£15m £8
£10
£12
£1.5m
£15m
£4
£6
£5.5m
£0
£2
Mar 15 Cost reduction UK DFID/FCAS Europe M&A Contingency Mar 18International
growth
97
growth
Summary
where we have or can achieve market leading positionsFocussed
front end, programme & project management and socio-economic consultancy capabilitiesDifferentiated
Strong partner to key clients focussed on experience-led value
strong win rates driving growth and quality in the order book
Strong
relationships
Momentum strong win rates driving growth and quality in the order book
approach to project selection, bidding and delivery underpins profitability improvementRigorous
Momentum
profitability improvement
Confident and excited about the futureConfident and excited about the future
98
99