Aggreko Europe and Middle East Bill Caplan Regional Director, EME

Outline • EME business structure and senior team • Power • Temperature Control • Case study: Nuclear Plant • Key business initiatives for 2010 • Orange Excellence 2

Europe & Middle East performance 2004 - 2009 £m

2004

2005

2006

2007

2008

2009

Revenues

122.6

139.0

172.7

218.3

256.6

249.6

Power Rental

85.2

112.8

122.4

134.7

TC Rental

26.6

31.0

39.0

34.6

OFA Rental

4.5

4.7

4.8

0.4

Services

56.4

69.8

90.4

79.9

Trading Profit

9.6

10.0

18.7

32.1

43.4

35.3

Margin %

7.8%

7.2%

10.8%

14.7%

17.0%

14.1%

ROCE %

7.5%

8.8%

13.7%

18.4%

22.1%

18.7%

5-year CAGR: Revenue: 15%, Trading Profit: 30% 3

EME is divided into 3 business units

Northern Europe Business Unit Continental Europe Business Unit

Middle East Business Unit 4

Business units are divided into areas

• 16 geographic areas serving over 25 countries • 56 service centres 5

What our business does • We rent two product families – Power • Generators 10 kVA – 2MW • Transformers, switchgear, distribution, fuel tanks • Loadbanks

– Temperature Control (TC) • Chillers, heaters, air handlers, heat exchangers, cooling towers, de-humidifiers

• Providing all types of contract from daily hire of small gensets up to major projects • Wide range of services that support the product families such as fuel, freight, rehire and labour • Supply engineering services and technical expertise • Extremely broad customer base 6

Europe & Middle East fleet – chillers & generators 2008

2009

Average MW in fleet

1,393

1,526

Utilisation

65%

63%

Average MW in fleet

407

416

Utilisation

53%

46%

Generators

Chillers

7

Revenue by geography 2009 EME: Revenue by BU 2009

36%

36%

Middle East & SEE Northern Europe Continental Europe

28%

8

Revenue by sector 2009 MESEE: Revenue by sector 2009 6%

3%

Europe: Revenue by sector 2009 Contracting

Construction

6%

11%

Oil & Gas

26%

7%

Utilities Events

6%

Utilities Government

15%

3% 14%

6%

Manufacturing Construction

Manufacturing

9%

Contracting 9%

20%

Events

Shipping 14%

Other

Services

7%

Petrochemical&Refining 13%

8%

Shipping

Oil & Gas 8%

9%

Food & Beverage Other

9

Plenty of local competition • OEM‟s and their dealers – Carrier – Caterpillar dealers created Energyst; still operates through dealers in Middle East

• National general rental companies – Speedy Hire, A-plant, Loxam, Byrne

• Regional and local specialty rental companies – Power Solutions, Power Electrics, RSS, Al Faris, Andrews Sykes, Locaclima, Milan Tractor

10

Power overview • Europe • • • •

high volume business with 45 service centres full range of sectors and products Strong TC business, winter & summer many established local players & aggressive pricing

• Middle East • high volume business with 11 service centres • transactional business + peak shaving projects + longer term oil and gas contracts • Numerous new entrants • Sharp down-turn in Dubai replaced by growth in other markets and sectors 11

Power products < 500kVA • Skid mounted generators enclosed in acoustic canopy • Fully bunded; fuel efficient; low noise • Output range 20kW to 500kW • Applications ranging from • power remote telecommunications masts and simple lighting system to • Powering downhole pumps in the desert and light and sound systems for major international events

12

Power products > 500kVA • Fully contained within standard 20ft ISO shipping container • Modular design working as single units or multiple units in parallel • Delivering power from 600kW to 200+MW. 1250kVA units identical to International Power Projects units

• Capable of operating from Siberia to Saudi Arabia • From short term emergency power in the event of natural disasters to long term base load power in the absence of an electricity grid

13

Power applications Eurovision Song Contest, Norway • 9 MW of temporary power to supply lighting, outside broadcast, temperature control and media centre • 33 km of electrical distribution cable and 145 distribution boards used in the installation for the TV event that will be watched by 120 million viewers

Loadbanks in Yakutia, Russia •Loadbanks to test a 35 MW power station that provides power for the pumps on a major oil pipeline • All commissioning and testing completed in extreme weather conditions of -40C 14

Power applications Glastonbury Festival, England • 27 MW of power required to supply the stages, 24 km of lighting and power for 750 traders for this annual event that attracts over 177,000 visitors • Aggreko provides over 230 generators with some running on bio-diesel Lisheen Mine, Ireland • 19 MW of temporary power used to keep Lisheen Mine operational while a new transformer was installed to connect a wind farm to the grid

• Aggreko managed the project with the customer and the network operator to provide a seamless connection „from and to‟ the grid 15

Power applications EDF France, storm response • Feb 2009 – severe storms hit South-West France • Initial 250 sets mobilised in less than 48h across a number of remote locations • In total 785 sets delivered to EDF in 10 days

Cirque du Soleil, Russia • 3 cities: Saint Petersburg, Kazan and Moscow • 11 trucks of Aggreko equipments • Aggreko provides both Power and HVAC solutions for temperature from -20C to +30C

16

Power applications Oman – Power and Water Authority • National grid support during peak demand months • 5 sites, 117 MW of power at 33 KV installed • Project duration 5 months • Project executed jointly with International Power Projects

Abu Dhabi – Motor racing • Race at YAS Marina Circuit • 24 MW @ 22 KV mains power package • 20 MW for the Lighting Towers (night Race) • 3 MW for TV broadcasting • 10 MW for merchandisers 17

Temperature control overview • Europe – successfully developed winter business (352 ice rinks in 2009) to complement traditional summer business

• Europe – developing APS business pioneered in North America and increasing focus on providing engineered solutions in petrochemical sector • Middle East – district cooling currently the key driver but with growth opportunities in other sectors (oil and gas, industrial, events)

18

Temperature control products – fluid chillers •

Air cooled chillers with the capability to directly cool fluids ranging from +45 to -45

•

Capacity ranging from 50kW up to 50MW in single or multiple units

•

Applications ranging from short term ice rink projects to long term industrial cooling

19

Temperature control products – air handling •

Air Handlers working in conjunction with fluid chillers to provide cooling to people in industrial applications and at major events

•

Air conditioners working in isolation in smaller, sensitive areas

•

Industrial cooling towers to provide large volume, low cost ambient cooling

20

Temperature control applications Wylfra Power station, Wales • Chillers provided 2.25 MW of cooling of sea water to 7C for the heat exchangers on Wylfra Power station • This new installation has less hose on the ground and employs a new 2000ltr buffer tank. Celsa Manufacturing, Wales • Celsa‟s 33 MW cooling tower caught fire during routine maintenance. Aggreko provided a temporary solution with all equipment installed and commissioned within 3 days • The equipment was delivered overnight from Aggreko in Belgium on 17 vehicles, demonstrating total flexibility of fleet

21

Temperature control applications Q-Chem, Qatar • 7MW of cooling and 3MW of power whist Qatar Chemicals shutdown their cooling plant for maintenance • The system installed allows the plant to remain in full production whilst the cooling plant is under maintenance • Installation took one week whilst hire period is a further 6 weeks Emirates District Cooling • Provide temporary district Cooling whilst permanent plant is built and commissioned • Provided chilled water to 3,000 local residents and businesses • 4,000 tons (15 MW) of air cooled chillers and 10 MVA power • Project duration 18 months 22

Engineered solutions: nuclear plant Business Issue •

Nuclear plant

•

The customer had to address high temperatures in the ball bearing mechanism of its 1 GW turbine

•

Customer‟s onsite cooling tower could not deliver enough cooling capacity with the resultant stoppage of the turbine

•

The customer required an efficient short term solution where the turbine could be kept running until the next forecasted maintenance stop

23

Engineered solutions: nuclear plant Aggreko Solution •

Aggreko Process Solution‟s Engineers worked with Customer to define the challenge and requirements

•

After in-depth discussion and engineering design work by Aggreko, solution using a 15 MW cooling package from Aggreko was installed

•

This included TowerPack Cooling Towers, 4x 750 KW chillers, heat exchangers and ancillaries.

•

Likely contract duration: 16 months

•

The solution meets nuclear safety standards

•

Customer benefits - on-going production avoiding a loss of €500k/day 24

Key growth initiative - Russia • Most of our work is in oil and gas – The potential is considerable – there are over 200,000 active producing wells in Russia1 – First “Add-Gas” Zimneye oil field, 3.8MVA – Tailakovskoye oil field, 9.6MVA gas generators now being commissioned – Healthy pipeline of prospects for diesel and gas – Plans in place for opening a storage facility in Nizhnevartovsk, Western Siberia next year

•

Evaluation of other sectors – Mining – Russia has some of the largest coal, PGE, diamond and gold reserves in the world • Replicate Aggreko‟s success in Australia

– Shipbuilding – opportunities for loadbanks, especially around St Petersburg 1 Source:

UKTI

25

Key growth initiative - Gas •

Utilising gas reserves in remote areas to generate electricity

•

Converting waste gases into valuable sources of energy

•

Utilising heat recovery systems to increase efficiency

26

ORANGE EXCELLENCE

27

Orange Excellence •

A structured programme designed to drive continuous improvement in: – Our people – Our processes – Our information

• •

•

•

Launched in Jan 2009 at the EME management conference Significant training delivered since then – 9 Black Belts, 20 Orange Belts and over 250 managers and staff trained 3 global projects launched across all 3 Regions, 6 key Orange Belt projects underway in EME and over 130 locally driven waste elimination projects in progress in all areas of the Region Improvements in efficiency/effectiveness will deliver a better customer experience, for example: – Quicker response – Increased levels of first time fix – Improvements in accurate and timely invoicing

28

Orange Excellence: Waste elimination •

Our Orange Excellence initiative drives out waste through – – –

Standardising business processes Developing capability throughout or business Continually striving to make today better than yesterday and tomorrow better than today

•

Making it easier for customers to do business with Aggreko

•

Making it easier for our employees to do their work

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Orange Excellence: Service mobility • • • • •

Pilot project complete Eliminate service paperwork Real-time data Updates ERP instantly Puts data in the hands of engineers

• • • • •

Increases revenue Reduces errors Records time Relieves inventory Provides service history

•

IMPROVES EFFICIENCY 30

Orange Excellence: Orange belt projects • Remote monitoring • Query process / cash collection • Paperless Accounts Payable • Reduction and simplification of contract modification process • Off-rent to ready process • Cable storage and testing 31

SUMMARY

32

Sources of future growth • Plenty of room for geographic expansion – Russia, East & South-East Europe, Middle East

• Differentiated product => market share – APS / engineered solutions – Gas – TC in Middle East

• Consolidation • Efficiency improvement – Orange excellence

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Summary and outlook • EME is a strong local business with considerable growth opportunities in front of it • The integration of Europe and the Middle East has created a business with much greater scale • 2009 was difficult, but new structure introduced in 03/04 meant that impact was far less bad than 02/03 – Business still made decent returns

• 2010 still cautious – Utilisation in power currently well ahead of 09 – Some signs of rates improving – European market demand still weak, Middle East growing 34