a world leader in technical services and project management

1: A World Leader in Technical Services and Project Management Sir Peter Mason KBEChief executive Good morning, ladies and gentlemen.Good morning, ladies and gentlemen.

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3: 3 Today’s presentation Introduction to AMEC Engineering and Technical Services Oil and Gas Project Solutions Financial overview Where we go from here Q&A On the assumption that many of you don’t know AMEC well, or may be not at all, I’m going to provide you with an introduction to the company, and the first thing to say, is that we are essentially engineers, who have created one of the world’s leading global organisations providing Technical Services and Project Management.   To complete the description of the company, I’m joined today by Stuart Siddall, our finance director, and, between us, we would like to introduce our company, explaining and illustrating our three business segments – we’ll provide a financial overview - and we’ll take a look at our future prospects.  On the assumption that many of you don’t know AMEC well, or may be not at all, I’m going to provide you with an introduction to the company, and the first thing to say, is that we are essentially engineers, who have created one of the world’s leading global organisations providing Technical Services and Project Management.   To complete the description of the company, I’m joined today by Stuart Siddall, our finance director, and, between us, we would like to introduce our company, explaining and illustrating our three business segments – we’ll provide a financial overview - and we’ll take a look at our future prospects.  

4: 4 What we do - capabilities This slide encapsulates AMEC’s skills and capabilities, which run right across the business and it’s the model for the way we work – from the first concept of an asset to its final shutdown.   All our services to customers can be plotted along this design, deliver and support value chain.This slide encapsulates AMEC’s skills and capabilities, which run right across the business and it’s the model for the way we work – from the first concept of an asset to its final shutdown.   All our services to customers can be plotted along this design, deliver and support value chain.

5: 5 Who we do it for As you can see, we have many excellent blue-chip names on our client list. We work across a broad industrial and manufacturing base - spanning both public and private sectors, providing support globally as well as on a local basis. As you can see, we have many excellent blue-chip names on our client list. We work across a broad industrial and manufacturing base - spanning both public and private sectors, providing support globally as well as on a local basis.

6: 6 Our main activities Let me now briefly describe our three principal areas of activity – and these are Engineering and Technical Services, or “ETS” for short, Oil and Gas and Project Solutions.   As the name suggests, ETS, provides specialist engineering and technical services.   The Oil and Gas business provides engineering design and asset support services across upstream and downstream markets.   And Project Solutions is involved in the delivery of capital assets from project management services to construction, often involving equity participation. Let me now briefly describe our three principal areas of activity – and these are Engineering and Technical Services, or “ETS” for short, Oil and Gas and Project Solutions.   As the name suggests, ETS, provides specialist engineering and technical services.   The Oil and Gas business provides engineering design and asset support services across upstream and downstream markets.   And Project Solutions is involved in the delivery of capital assets from project management services to construction, often involving equity participation.

Slide 7:I am now going to explain and illustrate the range of services we provide across each of these business segments, starting with ETS.  I am now going to explain and illustrate the range of services we provide across each of these business segments, starting with ETS.  

8: 8  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 ETS is the largest of our three business segments, it has annual sales of over £2 billion and contributes 43 per cent of operating profit.   ETS margin of 3.3 per cent in 2004 doesn’t mean very much - because of the lack of contribution from North America, and I’m going to talk about margin prospects later.   ETS consists of three specific divisions:  First, and by far the largest, is our multi-technical services business in Continental Europe, which provides a broad range of mechanical, electrical and communications services – I will give you some examples shortly.  Our second area of activity is Environmental Services – principally in North America. This business is important because it allows us to enter projects at the very beginning of the asset’s life.  And finally, our Design and Engineering business, which provides services from front-end design to maintenance support for UK and North American clients. We focus on the “nuts and bolts” of the capital asset itself and do not offer “soft” support services such as catering and cleaning.   And now, very briefly, I’m just going to run through a few slides that will give you a flavour of some of the work we do in this ETS business:   ETS is the largest of our three business segments, it has annual sales of over £2 billion and contributes 43 per cent of operating profit.   ETS margin of 3.3 per cent in 2004 doesn’t mean very much - because of the lack of contribution from North America, and I’m going to talk about margin prospects later.   ETS consists of three specific divisions:  First, and by far the largest, is our multi-technical services business in Continental Europe, which provides a broad range of mechanical, electrical and communications services – I will give you some examples shortly.  Our second area of activity is Environmental Services – principally in North America. This business is important because it allows us to enter projects at the very beginning of the asset’s life.  And finally, our Design and Engineering business, which provides services from front-end design to maintenance support for UK and North American clients. We focus on the “nuts and bolts” of the capital asset itself and do not offer “soft” support services such as catering and cleaning.   And now, very briefly, I’m just going to run through a few slides that will give you a flavour of some of the work we do in this ETS business:  

9: 9 Multitechnical 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 Multi-technical Services – which represents around half of ETS sales – has been contributing a margin approaching 4 per cent over the last few years.   It operates using a business model which fundamentally differs from other parts of AMEC and, I think, from any other service company model in the UK. The business is essentially local – operating from over 300 locations in Continental Europe and serves over 50,000 customers in many different markets. Customer relationships are characterised by a large number of small contracts – with a high percentage of repeat business.   Examples of activity include our work for Airbus, where we are working on the new assembly facility for the A380 super jumbo in Toulouse, providing electrical engineering, heating, ventilation and air conditioning systems.   For the Eiffel Tower in Paris, we provided and maintain the lighting. More than 20,000 specially designed bulbs, 40,000 connectors and 78 kilometers of cables were fitted to the tower in one of a number of major renovations completed by AMEC over the past ten yearsMulti-technical Services – which represents around half of ETS sales – has been contributing a margin approaching 4 per cent over the last few years.   It operates using a business model which fundamentally differs from other parts of AMEC and, I think, from any other service company model in the UK. The business is essentially local – operating from over 300 locations in Continental Europe and serves over 50,000 customers in many different markets. Customer relationships are characterised by a large number of small contracts – with a high percentage of repeat business.   Examples of activity include our work for Airbus, where we are working on the new assembly facility for the A380 super jumbo in Toulouse, providing electrical engineering, heating, ventilation and air conditioning systems.   For the Eiffel Tower in Paris, we provided and maintain the lighting. More than 20,000 specially designed bulbs, 40,000 connectors and 78 kilometers of cables were fitted to the tower in one of a number of major renovations completed by AMEC over the past ten years

10: 10 Environmental Services Our Environmental business is essentially a white-collar, consultancy business - growing strongly and delivering margins of around 6 per cent. Once again, it operates under a local service business model – from 100 locations across North America.   It includes some very specialist niches - for instance, our proprietary technology, Geomelt, which stabilises low level radioactive waste. We have a contract initially worth up to US$60 million for this process to be used to treat waste at Hanford, the largest nuclear site in the US.   We also have special expertise in cleaning up military bases like this 15,000 acre contaminated site in Massachusetts, where there was a lot of unexploded ordnance underground. Various techniques are used, including a soil-washing process to remove lead from the firing range area.Our Environmental business is essentially a white-collar, consultancy business - growing strongly and delivering margins of around 6 per cent. Once again, it operates under a local service business model – from 100 locations across North America.   It includes some very specialist niches - for instance, our proprietary technology, Geomelt, which stabilises low level radioactive waste. We have a contract initially worth up to US$60 million for this process to be used to treat waste at Hanford, the largest nuclear site in the US.   We also have special expertise in cleaning up military bases like this 15,000 acre contaminated site in Massachusetts, where there was a lot of unexploded ordnance underground. Various techniques are used, including a soil-washing process to remove lead from the firing range area.

11: 11 Design and Engineering Services And finally - our Design and Engineering business, which serves a wide range of clients in the public and private sectors in the UK and North America. This business also includes our activities in Iraq.   We have worked with BNG and its predecessor BNFL for over 25 years, helping to design, deliver and support many of their major assets. And we have a seven-year, £460 million contract to provide property management services for around 400 establishments belonging to the UK Ministry of Defence in Scotland, ranging from RAF Lossiemouth to small communications transmitters.   These are just some examples of the kind of work we do.  And finally - our Design and Engineering business, which serves a wide range of clients in the public and private sectors in the UK and North America. This business also includes our activities in Iraq.   We have worked with BNG and its predecessor BNFL for over 25 years, helping to design, deliver and support many of their major assets. And we have a seven-year, £460 million contract to provide property management services for around 400 establishments belonging to the UK Ministry of Defence in Scotland, ranging from RAF Lossiemouth to small communications transmitters.   These are just some examples of the kind of work we do.  

12: 12 ETS competitors Given the local delivery of the specialist services within ETS, our competitors vary according to geography.   And overall, the fragmented nature of ETS markets makes it difficult for us to determine our exact market position. However, we know we hold strong positions in segments of all these markets – for instance, we are in the top three companies offering multi-technical services in Europe and are one of the largest providers of international design and engineering services in the world.   Given the local delivery of the specialist services within ETS, our competitors vary according to geography.   And overall, the fragmented nature of ETS markets makes it difficult for us to determine our exact market position. However, we know we hold strong positions in segments of all these markets – for instance, we are in the top three companies offering multi-technical services in Europe and are one of the largest providers of international design and engineering services in the world.  

13: 13 ETS - Outlook Overall we remain confident about the outlook for our ETS business.   In Multi-technical Services, we expect to see sales growth and improved margins as we extend the network.    Our Environmental business enjoys an attractive margin and we expect this, and strong growth, to continue.   And in Design and Engineering, we expect to see continued growth from our long-term framework contracts, and believe opportunities - like the restructuring of the nuclear industry – will provide additional growth. We are beginning to make meaningful progress in Iraq and will be one of the first beneficiaries of any recovery in US industrial markets.   Overall, we expect to see top line growth and margin improvement in our ETS business – even without any recovery in the US.   Overall we remain confident about the outlook for our ETS business.   In Multi-technical Services, we expect to see sales growth and improved margins as we extend the network.    Our Environmental business enjoys an attractive margin and we expect this, and strong growth, to continue.   And in Design and Engineering, we expect to see continued growth from our long-term framework contracts, and believe opportunities - like the restructuring of the nuclear industry – will provide additional growth. We are beginning to make meaningful progress in Iraq and will be one of the first beneficiaries of any recovery in US industrial markets.   Overall, we expect to see top line growth and margin improvement in our ETS business – even without any recovery in the US.  

Slide 14:  Our second area of activity, which represents one third of operating profit, is Oil and Gas.   Our second area of activity, which represents one third of operating profit, is Oil and Gas.

15: 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 This business, with sales of £1.2 billion in markets with high barriers to entry, makes us very different from our peers in either construction or support services.   We have worked for over 30 years in the UK North Sea and are currently active across the world in regions like the Gulf of Mexico, the Caspian, West Africa, Russia and Australia.   We are a leader in our chosen fields and work across the upstream, downstream and pipeline sectors of the market.  This business, with sales of £1.2 billion in markets with high barriers to entry, makes us very different from our peers in either construction or support services.   We have worked for over 30 years in the UK North Sea and are currently active across the world in regions like the Gulf of Mexico, the Caspian, West Africa, Russia and Australia.   We are a leader in our chosen fields and work across the upstream, downstream and pipeline sectors of the market.  

16: 16 What we doSome jargon explained Before moving on, let me just explain some of the specialist terms we use. On the left of this slide you can see a picture of an oil rig. The processing equipment which sits on top of the rig, the topside, is our specialisation - we design it, project manage its delivery and support it when it is in place.   On the right hand side of the slide, you see what we call a floating production, storage and offtake vessel - or FPSO. These FPSOs are used instead of conventional rigs when you are working in deeper water. Again, it is the topside of these FPSOs which is our area of expertise.  Before moving on, let me just explain some of the specialist terms we use. On the left of this slide you can see a picture of an oil rig. The processing equipment which sits on top of the rig, the topside, is our specialisation - we design it, project manage its delivery and support it when it is in place.   On the right hand side of the slide, you see what we call a floating production, storage and offtake vessel - or FPSO. These FPSOs are used instead of conventional rigs when you are working in deeper water. Again, it is the topside of these FPSOs which is our area of expertise.  

17: 17 What we doSpecialist total life of asset services In the upstream sector, as you’ve seen, we have special expertise in offshore production facilities.   However, we also design, deliver and support onshore production facilities, for example in our oil sands extraction business in Canada.   Let’s have a look at some of the upstream activities we are currently involved with.  In the upstream sector, as you’ve seen, we have special expertise in offshore production facilities.   However, we also design, deliver and support onshore production facilities, for example in our oil sands extraction business in Canada.   Let’s have a look at some of the upstream activities we are currently involved with.  

18: 18 Deepwater FPSOsUpstream We are working in joint venture for ExxonMobil on the latest generation of deepwater FPSOs, including the Kizomba A and B projects offshore Angola, and for Woodside Energy on their Enfield FPSO offshore Australia.  We are working in joint venture for ExxonMobil on the latest generation of deepwater FPSOs, including the Kizomba A and B projects offshore Angola, and for Woodside Energy on their Enfield FPSO offshore Australia.  

19: 19 Canadian oil sandsUpstream And as I have already mentioned, in Canada, we have an important business servicing companies extracting oil from the oil sands.   This business is extremely busy at present, as more efficient extraction methods and a strong oil price have made it more attractive for our customers to invest.   As, possibly, the market leader in engineering in this market, we look set for steady growth in this area in the coming years.  And as I have already mentioned, in Canada, we have an important business servicing companies extracting oil from the oil sands.   This business is extremely busy at present, as more efficient extraction methods and a strong oil price have made it more attractive for our customers to invest.   As, possibly, the market leader in engineering in this market, we look set for steady growth in this area in the coming years.  

20: 20 What we doSpecialist total life of asset services Downstream, we provide a range of services to refineries, petrochemical facilities and, through our pipelines business, to pipeline operators.  Downstream, we provide a range of services to refineries, petrochemical facilities and, through our pipelines business, to pipeline operators.  

21: 21 Asset support servicesDownstream Examples of our work in this downstream area, include the project management and procurement services on BP SINOPEC’s SECCO ethylene production plant in China – one the largest of its kind in the world.   And back in the UK, we have been working for 35 years with BP at its large Grangemouth facility in Scotland.  Examples of our work in this downstream area, include the project management and procurement services on BP SINOPEC’s SECCO ethylene production plant in China – one the largest of its kind in the world.   And back in the UK, we have been working for 35 years with BP at its large Grangemouth facility in Scotland.  

22: 22 What we doSpecialist total life of asset services And ultimately, at the end of the oil and gas product cycle, we are involved in designing customer outlets like petrol stations, or providing services to domestic gas utilities, like Transco.  And ultimately, at the end of the oil and gas product cycle, we are involved in designing customer outlets like petrol stations, or providing services to domestic gas utilities, like Transco.  

23: 23 Oil and Gas – Improved market position Increased activities worldwide UK North Sea; Gulf of Mexico; West Africa; Caspian; Canada; Asia Pacific During 2004, we continued to improve our market position. We expanded further in the regions beyond our North Sea base – which now accounts for only around half of our activity.   We won more work from new clients across the world including the Kuwait Oil Company, the Korean National Oil Company and Woodside of Australia - all large oil companies with substantial investment plans.   Earlier this year, we acquired Paragon, a Houston-based engineering services company which gives us a tier one presence in what is increasingly the main decision making centre in the global Oil and Gas market. Paragon strengthens our relationships, with customers such as Chevron/Texaco, Marathon and Pemex, gives us more capacity, and enables us to provide a more complete service to customers in the region.  During 2004, we continued to improve our market position. We expanded further in the regions beyond our North Sea base – which now accounts for only around half of our activity.   We won more work from new clients across the world including the Kuwait Oil Company, the Korean National Oil Company and Woodside of Australia - all large oil companies with substantial investment plans.   Earlier this year, we acquired Paragon, a Houston-based engineering services company which gives us a tier one presence in what is increasingly the main decision making centre in the global Oil and Gas market. Paragon strengthens our relationships, with customers such as Chevron/Texaco, Marathon and Pemex, gives us more capacity, and enables us to provide a more complete service to customers in the region.  

24: 24 Oil and Gas – Changing business model Trend to fabrication in lower cost regions Accelerated change of focus in activities towards higher-value services We have seen significant change in the business model for capital assets.   The oil and gas industry’s changing procurement arrangements to lower-cost locations led us to accelerate our change of focus to more higher value engineering, design and support services.   We are essentially replacing one-off lump sum contracts with engineering design projects and longer-term service contracts. Although in this transition period we will have lower volumes, this has been offset by reduced risk and an improved margin - which we believe has further to run.    Despite this change in the balance of our business, our order book is also up - and we’ve had a really good start in 2005. So, overall, a transition to be welcomed.We have seen significant change in the business model for capital assets.   The oil and gas industry’s changing procurement arrangements to lower-cost locations led us to accelerate our change of focus to more higher value engineering, design and support services.   We are essentially replacing one-off lump sum contracts with engineering design projects and longer-term service contracts. Although in this transition period we will have lower volumes, this has been offset by reduced risk and an improved margin - which we believe has further to run.    Despite this change in the balance of our business, our order book is also up - and we’ve had a really good start in 2005. So, overall, a transition to be welcomed.

25: 25 Oil and Gas – Recent contract awards You can see here some of the important contracts recently won by this business – a wide range of clients, a wide range of international locations and a wide range of oilfield services.   Importantly, we won new business across all our areas of activity, with contracts ranging from brownfield projects, to new fields, in addition to long-term service contracts for new clients.  You can see here some of the important contracts recently won by this business – a wide range of clients, a wide range of international locations and a wide range of oilfield services.   Importantly, we won new business across all our areas of activity, with contracts ranging from brownfield projects, to new fields, in addition to long-term service contracts for new clients.  

26: 26 Competitors Barriers to entry are high, and, as you would expect, there is a less diverse range of competitors than with ETS. Here we are competing against essentially other global companies. Barriers to entry are high, and, as you would expect, there is a less diverse range of competitors than with ETS. Here we are competing against essentially other global companies.

27: 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 As we said about ETS, we also remain confident in the outlook for our Oil and Gas business:   First, we have a strong competitive position. Our proven track record and reputation mean we have a solid and established relationship with our customers.   Secondly, underlying margins in our upstream engineering services are stable – and there is some upside. Many contracts are now structured in two parts – there is a base fee, but we are also given an incentive to earn an additional performance-based fee.   Thirdly, we have a strong portfolio of contracts and customers. We have a number of long-term support services contracts with a broad geographical spread - and the three largest deepwater operators – BP, ExxonMobil, and Shell – are all long-term AMEC customers.   And so we believe the long-term prospects in this business to be really good.As we said about ETS, we also remain confident in the outlook for our Oil and Gas business:   First, we have a strong competitive position. Our proven track record and reputation mean we have a solid and established relationship with our customers.   Secondly, underlying margins in our upstream engineering services are stable – and there is some upside. Many contracts are now structured in two parts – there is a base fee, but we are also given an incentive to earn an additional performance-based fee.   Thirdly, we have a strong portfolio of contracts and customers. We have a number of long-term support services contracts with a broad geographical spread - and the three largest deepwater operators – BP, ExxonMobil, and Shell – are all long-term AMEC customers.   And so we believe the long-term prospects in this business to be really good.

Slide 28:I would now like to turn to the third segment of our business, Project Solutions. I would now like to turn to the third segment of our business, Project Solutions.

29: 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 This business has evolved out of our traditional construction activity. Today, it contributes 24 per cent of our operating profit, and as you will see, is an important generator of future value.   Essentially, this business delivers large landmark projects to selected public and private sector clients, in particular markets where we have expertise. Project solutions includes our Construction Services, PPP, Developments and Wind Energy businesses. In the past, we often simply built projects, whereas today, while construction may form part of the job, we typically get involved in design, maintenance or operations support and sometimes equity participation.   Rarely, now, will we do stand-alone construction. This business has evolved out of our traditional construction activity. Today, it contributes 24 per cent of our operating profit, and as you will see, is an important generator of future value.   Essentially, this business delivers large landmark projects to selected public and private sector clients, in particular markets where we have expertise. Project solutions includes our Construction Services, PPP, Developments and Wind Energy businesses. In the past, we often simply built projects, whereas today, while construction may form part of the job, we typically get involved in design, maintenance or operations support and sometimes equity participation.   Rarely, now, will we do stand-alone construction.

30: 30 Construction Services 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 The traditional construction market has historically been seen as risky business, and often with good reason. In 2004, we again avoided winning work on a low cost construction only basis, by continuing to be selectively involved in design or the provision of services.   We have strong customer relationships in both the public and private sectors and in markets such as Transport, Healthcare and Defence.   Looking forward, we expect UK government spending in these areas to remain strong, providing opportunities for growth.   In the rail sector, we are one of Europe’s leading service providers, and expect to see further opportunities in light rail, and in heavy rail infrastructure renewal. The traditional construction market has historically been seen as risky business, and often with good reason. In 2004, we again avoided winning work on a low cost construction only basis, by continuing to be selectively involved in design or the provision of services.   We have strong customer relationships in both the public and private sectors and in markets such as Transport, Healthcare and Defence.   Looking forward, we expect UK government spending in these areas to remain strong, providing opportunities for growth.   In the rail sector, we are one of Europe’s leading service providers, and expect to see further opportunities in light rail, and in heavy rail infrastructure renewal.

31: 31 Construction Services 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 One example of our work - in the defence sector – is the new submarine berthing facility at Her Majesty's Naval Base Clyde, which we are designing and building.   In the Rail sector – we recently completed the first section of the new high speed Channel Tunnel line between Folkestone and London, where we provided design, procurement, and delivery – on budget and ahead of time.  One example of our work - in the defence sector – is the new submarine berthing facility at Her Majesty's Naval Base Clyde, which we are designing and building.   In the Rail sector – we recently completed the first section of the new high speed Channel Tunnel line between Folkestone and London, where we provided design, procurement, and delivery – on budget and ahead of time.  

32: 32 PPP 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 >£600m 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 Moving on to PPP, we can see the investment we have made over recent years really beginning to translate into recurring earnings.   We have a portfolio of nine PPP projects which we have recently valued, conservatively, at £77 million – considerably more than book value.   Recently, we secured preferred bidder status for a further three projects with a value of over £600 million to AMEC.   With equity commitments to PPP currently approaching £60 million – and further growth opportunities expected – we see this area of the business generating substantial value in the future     Moving on to PPP, we can see the investment we have made over recent years really beginning to translate into recurring earnings.   We have a portfolio of nine PPP projects which we have recently valued, conservatively, at £77 million – considerably more than book value.   Recently, we secured preferred bidder status for a further three projects with a value of over £600 million to AMEC.   With equity commitments to PPP currently approaching £60 million – and further growth opportunities expected – we see this area of the business generating substantial value in the future    

33: 33 Project SolutionsPPP AMEC PPP project State-of-the-art, 669-bed facility A full listing of our PPP projects is available in your supplementary slides but this slide shows two examples - first, the University College London Hospital, where our joint venture is providing design, financing, construction and operational services.   Secondly, in the highways market, we are working on the A1 upgrade between Darrington and Dishforth, with completion in spring 2006.  A full listing of our PPP projects is available in your supplementary slides but this slide shows two examples - first, the University College London Hospital, where our joint venture is providing design, financing, construction and operational services.   Secondly, in the highways market, we are working on the A1 upgrade between Darrington and Dishforth, with completion in spring 2006.  

34: 34 Developments 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 In our Developments business, we have built strong relationships with the key players in urban regeneration in the UK.   We have two major joint ventures – with ISIS, developing British Waterways large portfolio of surplus land – and with English Cities Fund, to regenerate inner city locations.   In 2004 we worked on more than a dozen regeneration schemes right across the UK in locations including Reading and Durham – and have recently been awarded a major scheme to regenerate Lewisham town centre.   Overall, the total square footage on which we expect to secure planning approval in 2005, is of the order of 3 million square feet.   And as these schemes, or phase of schemes, reach completion and can be sold on, we will continue to realise significant, recurring and growing, annual profits.  In our Developments business, we have built strong relationships with the key players in urban regeneration in the UK.   We have two major joint ventures – with ISIS, developing British Waterways large portfolio of surplus land – and with English Cities Fund, to regenerate inner city locations.   In 2004 we worked on more than a dozen regeneration schemes right across the UK in locations including Reading and Durham – and have recently been awarded a major scheme to regenerate Lewisham town centre.   Overall, the total square footage on which we expect to secure planning approval in 2005, is of the order of 3 million square feet.   And as these schemes, or phase of schemes, reach completion and can be sold on, we will continue to realise significant, recurring and growing, annual profits.  

35: 35 Wind Energy 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 We have, as you may know, a portfolio of wind energy schemes included in Project Solutions.   During 2004, amongst others, we submitted planning applications for very major schemes at Kyle, and the Isle of Lewis in Scotland, potentially the world’s largest onshore windfarm.   The planning process is painfully slow, but there are considerable rewards – based on recent transactions in the UK.  We have, as you may know, a portfolio of wind energy schemes included in Project Solutions.   During 2004, amongst others, we submitted planning applications for very major schemes at Kyle, and the Isle of Lewis in Scotland, potentially the world’s largest onshore windfarm.   The planning process is painfully slow, but there are considerable rewards – based on recent transactions in the UK.  

36: 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   And so moving on to the outlook for Project Solutions - as I mentioned earlier, the government’s commitment to spending in health, education and transport gives us cause for optimism – and we are similarly positive about the opportunities in the private sector. Industry knowledge and client relationships are the key – and we have both of those.   It is early days in terms of realising value from our PPP, Developments and Wind portfolios - the post-tax earnings from these activities are quite modest today. As a result, our investment in these activities, about £115 million today, with around a further £80 million committed, is easily underestimated. But we are now at the point where investment income is starting to build and we can begin to trade our portfolio.   That concludes my review of our principal activities - I will now hand over to Stuart for the financial overview.   And so moving on to the outlook for Project Solutions - as I mentioned earlier, the government’s commitment to spending in health, education and transport gives us cause for optimism – and we are similarly positive about the opportunities in the private sector. Industry knowledge and client relationships are the key – and we have both of those.   It is early days in terms of realising value from our PPP, Developments and Wind portfolios - the post-tax earnings from these activities are quite modest today. As a result, our investment in these activities, about £115 million today, with around a further £80 million committed, is easily underestimated. But we are now at the point where investment income is starting to build and we can begin to trade our portfolio.   That concludes my review of our principal activities - I will now hand over to Stuart for the financial overview.

37: Financial overview Stuart Siddall Finance director Thank you Peter. Thank you Peter.

38: 38 Total operating profit*By business £ million This slide shows the progression of each of our business segments during 2004 as well as bringing the whole business together for you.   As you can see, total operating profit was up by nearly 6 per cent whilst we slightly increased our operating margin and produced a strong return on capital employed of about 17 per cent.  This slide shows the progression of each of our business segments during 2004 as well as bringing the whole business together for you.   As you can see, total operating profit was up by nearly 6 per cent whilst we slightly increased our operating margin and produced a strong return on capital employed of about 17 per cent.  

39: 39 Margin progressionOperating margin* (per cent) We have more than doubled operating margin over the past nine years.   This has been achieved through acquisition and growth of services activities and elimination of unattractive construction activities.   With the downturn of industrial investment in recent years – particularly in North America – margins have been held back. However, as you have heard from Peter, we do expect to improve sustainable margins.  We have more than doubled operating margin over the past nine years.   This has been achieved through acquisition and growth of services activities and elimination of unattractive construction activities.   With the downturn of industrial investment in recent years – particularly in North America – margins have been held back. However, as you have heard from Peter, we do expect to improve sustainable margins.  

40: 40 Return on capital employed This chart shows our return on capital employed and margin on sales relative to a broad range of our peers in UK, Europe and North America.   Clearly, our margin is affected by the high level of subcontracted work, but the chart shows that our return on capital employed is pretty good relative to other services companies. And we expect to see this improve in 2005.   This chart shows our return on capital employed and margin on sales relative to a broad range of our peers in UK, Europe and North America.   Clearly, our margin is affected by the high level of subcontracted work, but the chart shows that our return on capital employed is pretty good relative to other services companies. And we expect to see this improve in 2005.  

41: 41 Profit conversion£ million We have tracked cash generation relative to profit since 1996 - this is not a straightforward computation given the impact of acquisitions etc.   The comparison between profit and cash should also take into account payments received on account, cash retained in SPIE before it became a subsidiary and pension scheme accounting.   As you can see, over the eight years to 2003, adjusted cash and profit were broadly in line.   As was expected, retained profit was ahead of adjusted cash at the end of 2004 - this is largely explained by cash absorption on Iraq work and several Oil and Gas projects. We do expect the Oil and Gas position to improve in 2005 although capital employed on the Iraq contracts is likely to remain at similar levels.  We have tracked cash generation relative to profit since 1996 - this is not a straightforward computation given the impact of acquisitions etc.   The comparison between profit and cash should also take into account payments received on account, cash retained in SPIE before it became a subsidiary and pension scheme accounting.   As you can see, over the eight years to 2003, adjusted cash and profit were broadly in line.   As was expected, retained profit was ahead of adjusted cash at the end of 2004 - this is largely explained by cash absorption on Iraq work and several Oil and Gas projects. We do expect the Oil and Gas position to improve in 2005 although capital employed on the Iraq contracts is likely to remain at similar levels.  

42: 42 Balance sheet analysis(£ million) Given our heritage, the make up of the Balance Sheet is always of interest to investors.   Clearly we do monitor debtor days but because we use third parties to provide materials and services - and we do not, generally, pay third parties before we are paid - the relationship between debtors and creditors is the most useful measure.   As you can see, the ratio of debtors to creditors has increased, which is not surprising given my earlier comments on Iraq and the Oil and Gas contracts.   One significant and volatile part of our balance sheet, which is not included within trade creditors, is the cash we receive on account from our clients – advance payments. This has, as expected, been declining – excluding the impact of SPIE, acquired in 2003 – advance payments have declined by £70 million in the last 3 years.Given our heritage, the make up of the Balance Sheet is always of interest to investors.   Clearly we do monitor debtor days but because we use third parties to provide materials and services - and we do not, generally, pay third parties before we are paid - the relationship between debtors and creditors is the most useful measure.   As you can see, the ratio of debtors to creditors has increased, which is not surprising given my earlier comments on Iraq and the Oil and Gas contracts.   One significant and volatile part of our balance sheet, which is not included within trade creditors, is the cash we receive on account from our clients – advance payments. This has, as expected, been declining – excluding the impact of SPIE, acquired in 2003 – advance payments have declined by £70 million in the last 3 years.

43: 43 Average weekly net debt in 2005£ million Looking more closely at our debt levels, it is worth pointing out that as we progress through 2005, several factors will come into play. This chart shows the average effect the main changes should have on our average weekly net debt throughout 2005.    First we issued 30 million new shares three months ago raising nearly £90 million to fund acquisitions and increased PPP commitments.     Secondly, we have established a non-recourse debtor securitisation programme in Europe where debtor payment terms are much longer than elsewhere in the group. This programme is expected to generate about £80 million and will have no affect on our pre-tax figures - but will reduce interest charges by a couple of million pounds at the expense of the ETS margin.    We also expect debt to reduce as we release cash from several Oil and Gas projects.   These positive factors will be offset by the currently identified acquisitions and a reduction in advance cash. As a result, we expect average weekly net debt in 2005 to be about £350 million - giving us continued flexibility.   Analysts are forecasting between £150 and £200 million net debt at the end of 2005.  Looking more closely at our debt levels, it is worth pointing out that as we progress through 2005, several factors will come into play. This chart shows the average effect the main changes should have on our average weekly net debt throughout 2005.    First we issued 30 million new shares three months ago raising nearly £90 million to fund acquisitions and increased PPP commitments.     Secondly, we have established a non-recourse debtor securitisation programme in Europe where debtor payment terms are much longer than elsewhere in the group. This programme is expected to generate about £80 million and will have no affect on our pre-tax figures - but will reduce interest charges by a couple of million pounds at the expense of the ETS margin.    We also expect debt to reduce as we release cash from several Oil and Gas projects.   These positive factors will be offset by the currently identified acquisitions and a reduction in advance cash. As a result, we expect average weekly net debt in 2005 to be about £350 million - giving us continued flexibility.   Analysts are forecasting between £150 and £200 million net debt at the end of 2005.  

44: 44 Orders Engineering and Technical Services Relationship between order intake and sales is key 2004 order intake exceeded sales And now, turning to other indicators of performance - our order book continues to give us confidence about the future.   Generally within the AMEC businesses, you can look at the order book and get a sense of prospects - but this is not the case in ETS, where we have so many small contracts, continually turning over. For this reason, we find it more useful to look at order intake. Order intake in ETS for 2004 exceeded sales, which gives confidence for 2005.   Our Oil and Gas and Project Solutions businesses do operate traditional order books and here the position remains solid. Despite the run off of the fabrication work, the order book in Oil and Gas has increased. This is due to increased levels of engineering activity which is an encouraging sign for the future.   In Project Solutions, the order book is similar to this time last year: an increase in the UK offsetting a decline in North America. Just to note, we do not include projects in the order book until contracts are secured, so these figures exclude those PPP projects where we have been recently appointed preferred bidder –with a value in excess of £600 million.  And now, turning to other indicators of performance - our order book continues to give us confidence about the future.   Generally within the AMEC businesses, you can look at the order book and get a sense of prospects - but this is not the case in ETS, where we have so many small contracts, continually turning over. For this reason, we find it more useful to look at order intake. Order intake in ETS for 2004 exceeded sales, which gives confidence for 2005.   Our Oil and Gas and Project Solutions businesses do operate traditional order books and here the position remains solid. Despite the run off of the fabrication work, the order book in Oil and Gas has increased. This is due to increased levels of engineering activity which is an encouraging sign for the future.   In Project Solutions, the order book is similar to this time last year: an increase in the UK offsetting a decline in North America. Just to note, we do not include projects in the order book until contracts are secured, so these figures exclude those PPP projects where we have been recently appointed preferred bidder –with a value in excess of £600 million.  

45: 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 I would like to say a few words about IFRS.   Our balance sheet should benefit from the implementation of IFRS. We don’t expect to see a material impact on the income statement - but there will be an increase in volatility. Further details are available in your supplementary slides.   Our implementation is well advanced and we intend to publish restated figures for 2003 and 2004 later in June.    The impact of IFRS on AMEC’s accounts is set out in your supplementary slides - and we continue to see no changes to the way we account for long-term contracts.   We have a pension surplus of £120 million under FRS17 – and this is expected to be similar under IAS 19.   Looking forward it is fair to say that the main uncertainty remains the impact of IAS 39 and concession accounting – the long awaited exposure draft has just been published so there should be better clarity in the next month or so.  I would like to say a few words about IFRS.   Our balance sheet should benefit from the implementation of IFRS. We don’t expect to see a material impact on the income statement - but there will be an increase in volatility. Further details are available in your supplementary slides.   Our implementation is well advanced and we intend to publish restated figures for 2003 and 2004 later in June.    The impact of IFRS on AMEC’s accounts is set out in your supplementary slides - and we continue to see no changes to the way we account for long-term contracts.   We have a pension surplus of £120 million under FRS17 – and this is expected to be similar under IAS 19.   Looking forward it is fair to say that the main uncertainty remains the impact of IAS 39 and concession accounting – the long awaited exposure draft has just been published so there should be better clarity in the next month or so.  

46: 46 Outlook for 2005 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 So as we move through 2005, we are anticipating a number of factors that will impact on our progress and be reflected in our financial statements.   The transfer of rail maintenance back to Network Rail in 2004 and the changes to the accounting for share options will both have a negative impact.   In our North American engineering design business, we see a neutral position in 2005, however, we expect to see an increased contribution from Iraq.   The January Placing and the acquisition of Paragon will have a positive impact in 2005 but perhaps most importantly however, our ETS, Oil and Gas and Projects Solutions businesses should all advance in 2005.   Overall, we are confident of further progress in 2005.So as we move through 2005, we are anticipating a number of factors that will impact on our progress and be reflected in our financial statements.   The transfer of rail maintenance back to Network Rail in 2004 and the changes to the accounting for share options will both have a negative impact.   In our North American engineering design business, we see a neutral position in 2005, however, we expect to see an increased contribution from Iraq.   The January Placing and the acquisition of Paragon will have a positive impact in 2005 but perhaps most importantly however, our ETS, Oil and Gas and Projects Solutions businesses should all advance in 2005.   Overall, we are confident of further progress in 2005.

47: 47 Growth in dividendsDividends per share (pence) And finally, turning to our dividend progression.   As you can see in this chart, we have delivered a steady progression in our dividends in the last four years, whilst maintaining cover between about 2.4 and 2.8 times. As part of that continued progress and reflecting our confidence about the future growth prospects of AMEC, the dividend has been increased by almost 5 per cent for 2004 with cover remaining within historic bands.   Peter will now conclude our session today - outlining where we go from here.    Thank you.  And finally, turning to our dividend progression.   As you can see in this chart, we have delivered a steady progression in our dividends in the last four years, whilst maintaining cover between about 2.4 and 2.8 times. As part of that continued progress and reflecting our confidence about the future growth prospects of AMEC, the dividend has been increased by almost 5 per cent for 2004 with cover remaining within historic bands.   Peter will now conclude our session today - outlining where we go from here.    Thank you.  

48: Where we go from here Sir Peter Mason KBEChief executive Thank you, Stuart. Thank you, Stuart.

49: 49 AMEC: Design, Deliver, Support Just before we take your questions, I would like to take a few moments to summarise what we have said and draw out a few points for you to take away.   First, a reminder of what I said at the outset of this presentation.   AMEC works in many markets and for many clients – but the value chain is what holds our company together. It’s a chain showing our skills and capabilities, which runs right across the business – and it’s the model for the way we work – from the first concept of an asset to its final shutdown. Just before we take your questions, I would like to take a few moments to summarise what we have said and draw out a few points for you to take away.   First, a reminder of what I said at the outset of this presentation.   AMEC works in many markets and for many clients – but the value chain is what holds our company together. It’s a chain showing our skills and capabilities, which runs right across the business – and it’s the model for the way we work – from the first concept of an asset to its final shutdown.

50: 50 Increase share of existing client spendHeadroom for growth – North America It’s worth noting, also, that we do not design, deliver and support for all our customers. For many of them, we still only cover part of the value chain – and that gives us considerable scope to do more, to generate growth, as this slide – which relates to our North American client base - shows.   You could, of course, draw slides of this kind for our UK and European businesses, too. In the UK we are expanding “left” and “right” along the value chain from a strong delivery capability – and in Europe we are building on our great strength, the right hand side, support services.  It’s worth noting, also, that we do not design, deliver and support for all our customers. For many of them, we still only cover part of the value chain – and that gives us considerable scope to do more, to generate growth, as this slide – which relates to our North American client base - shows.   You could, of course, draw slides of this kind for our UK and European businesses, too. In the UK we are expanding “left” and “right” along the value chain from a strong delivery capability – and in Europe we are building on our great strength, the right hand side, support services.  

51: 51 Growth opportunities Steady growth in earnings from Engineering and Technical Services Volume and margin improvement And finally, I’d like to just summarise the growth opportunities for AMEC.  First, as I’ve said, ETS is a steadily growing business, where we expect to see margin and volume improvements in 2005. Growth will be driven by increasing our local services network and developing further economies of scale.   In Oil and Gas, we have considerably strengthened our market position - which has already translated into an improved quality of earnings. The order book is now more a reflection of long-term service contracts, away from lump sum activity. We have made a good start in 2005, and the Paragon acquisition has broadened our capabilities, giving us access to new customers, and moved us to tier one status in Houston. We believe we are well positioned to benefit from long-term growth in the oil and gas market.   In Project Solutions, there are what could be even more exciting prospects. We expect our core activities for clients such as the UK Government, in the areas of Health, Education and Transport, to grow, as public sector spending continues to be focused on these services. And in addition, following several years of sunk investment, we expect to see substantial payback begin from our PPP, urban regeneration and wind energy activities.     In summary, we believe we have shaped a business poised to benefit across all segments, and we look forward to delivering further growth in 2005 and beyond.   Thank you very much. And finally, I’d like to just summarise the growth opportunities for AMEC.  First, as I’ve said, ETS is a steadily growing business, where we expect to see margin and volume improvements in 2005. Growth will be driven by increasing our local services network and developing further economies of scale.   In Oil and Gas, we have considerably strengthened our market position - which has already translated into an improved quality of earnings. The order book is now more a reflection of long-term service contracts, away from lump sum activity. We have made a good start in 2005, and the Paragon acquisition has broadened our capabilities, giving us access to new customers, and moved us to tier one status in Houston. We believe we are well positioned to benefit from long-term growth in the oil and gas market.   In Project Solutions, there are what could be even more exciting prospects. We expect our core activities for clients such as the UK Government, in the areas of Health, Education and Transport, to grow, as public sector spending continues to be focused on these services. And in addition, following several years of sunk investment, we expect to see substantial payback begin from our PPP, urban regeneration and wind energy activities.     In summary, we believe we have shaped a business poised to benefit across all segments, and we look forward to delivering further growth in 2005 and beyond.   Thank you very much.

52: Supplementary dataFinancials

53: 53 What’s in where

54: 54 Cash flow £ million

55: 55 Financial ratios*

56: 56 Order book

57: 57 Contract risk management

58: 58 Contract risk management

59: 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

60: 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

61: Supplementary dataProject Equity Investments - PPP

62: 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: 63 AMEC PPP projects Operational

64: 64 AMEC PPP projects Delivery

65: 65 AMEC PPP projects Preferred bidder status

66:  Supplementary dataProject Equity Investments - Wind Energy

67: 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: 68 AMEC Wind Energy Total portfolio under development is around 2,500 MW, broken down as follows: AMEC’s 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: 69 AMEC Wind EnergyOnshore portfolio

70: 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)

71: 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-planning 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)

72: 72 Wind EnergyOnshore portfolio* development potential