John Laing : Detailed Presentation & Supplementary Information

DETAILED PRESENTATION & SUPPLEMENTARY INFORMATION

John Laing Group plc

Capital Markets &

Strategy Update

25 November 2020

Agenda

Section	1	Strategic Review	page 3
	2	The Opportunity	page 19
	3a	Areas for Growth - PPP & Greenfield Projects	page 27
	3b	North America - PPP & Greenfield Projects	page 33
	3c	Australia - PPP & Greenfield Projects	page 40
	4	Areas for Growth - Core-plus Economic Infrastructure	page 48
	5	Optimise and Enhance	page 56
	6	Vision and Conclusion	page 100
Appendix	1	Supplementary information	page 110

2 John Laing Group plc Capital Markets & Strategy Update November 2020

1

Strategic

Review

Positioning John Laing for sustainable growth

3 John Laing Group plc Capital Markets & Strategy Update November 2020

Value proposition

Strong and growing infrastructure market and investment opportunity Leading international greenfield PPP business

Proven investment track record

Resilient and valuable PPP portfolio

Strong balance sheet and liquidity

Opportunity to optimise business and enhance returns Responsible and sustainable focus

4 John Laing Group plc Capital Markets & Strategy Update November 2020

Our business model

Our Capabilities

• Experienced and local teams
• Access to permanent and flexible capital
• Extensive network of partnerships
• International footprint
• Strong reputation

Our Approach

• Strong corporate governance, culture and values
• Effective risk management and robust processes
• Responsible and sustainable focus

5 John Laing Group plc Capital Markets & Strategy Update November 2020

Value creation

We actively manage our portfolio and generate strong capital returns through realisations

Generating shareholder distributions and capital to re-invest in new opportunities

Realise

Realise	Invest
investments to
Selective and
maximise value for
disciplined approach
our shareholders

Manage and Grow

Manage actively and grow value of our portfolio

Our competitive strengths

Sourcing and

Project

International

Balance sheet

winning

Track record

management skills

footprint

capital

greenfield projects

•

Extensive network of

•

Experienced team

•

Good footprint in key

•

Strong investment

•

Strong balance sheet

partnerships with

managing complex

Infrastructure

track record of

and liquidity

industry leaders

construction

markets

successful PPP

•

Access to permanent

programmes

realisations, achieving

•

Strong credentials

•

Local teams and

and flexible capital

>3x our investment

and reputation with

•

Actively managing

resources on the

clients

stakeholder

ground

•

Invested in 150

•

Recognised

relationships to ensure

projects globally

successful delivery

structuring expertise

Strong and proven greenfield projects business

6 John Laing Group plc Capital Markets & Strategy Update November 2020

Our strong PPP investment track record

Realised money multiples1

10x

9x

8x

7x

6x

5x

4x

3x

2x

1x

0x

2015

Year of disposal

2020

Realised value 2

>£75m

£25m-75m <£25m

1. Post-IPOrealisations
2. Achieved value at disposal in GBP converted at the FX rate of the date of disposals.

Strong track record of value creation with weighted average money multiple of over 3x

7 John Laing Group plc Capital Markets & Strategy Update November 2020

Our partners: past successes create future opportunities

Examples of existing projects	Current opportunities

• I-66
• I-77
• Ruta del Cacao
• East Rockingham
• Sydney Light Rail
• Hurontario
• I-4Ultimate
• I-75

• I-495& I-270 Phase 1 (Maryland Managed Lanes)
• Georgia SR-400 Express Lanes
• North East Link
• Jefferson Parkway
• I-495& I-270 Phase 1 (Maryland Managed Lanes)

Extensive network of international and local partnerships

8 John Laing Group plc Capital Markets & Strategy Update November 2020

Delivering responsible infrastructure solutions

Responsible

investment and

asset management

Diverse and engaged talent

Delivering
sustainable	Good
growth	corporate citizenship

Growth underpinned by focus on sustainable investments,

responsible asset management, and diverse and engaged talent

9 John Laing Group plc Capital Markets & Strategy Update November 2020

A clear vision and strategy

A leading international investor and manager of balance sheet and third-party capital across a range of infrastructure sectors, delivering attractive and sustainable shareholder returns over the

longer term

Diversified		Efficient		Strong financial
& scalable		operating		& funding
platform		model		model
Over time, developing		Cost competitive		Investing our balance
scale through a broad		operating platform,		sheet alongside
range of investment		common to all		managing third-party
mandates across		investment businesses,		funds, generating a
complementary		with disciplined		combination of capital
infrastructure sectors with		investment, asset		upside as well as
different risk and return		management and risk		sustainable and growing
characteristics, which		processes underpinning		annual profits
together provide an		performance
attractive balance of
capital gains and income
yield for our shareholders

Integrated ESG

principles

Growth underpinned by a focus on sustainable investments, responsible asset management, and engaged and diverse talent

Positioning John Laing for sustainable growth

10 John Laing Group plc Capital Markets & Strategy Update November 2020

Vision: leading international infrastructure investment platform

Future shape of JLG - building out the platform

Investment mandate

Greenfield PPP Projects

Adjacent Greenfield Projects

Mid-marketCore-plus

Asset type

Client / counterparties

Example sectors

Value creation

Typical equity investment range

Growth opportunity

Project

Public sector, e.g. government, local authority

Transport: roads, rail, bridges

Social: hospitals, education

Construction of project through to operation, delivering value enhancements and return shift

Exit to secondary market or hold for yield

£25-75 million

Re-focus and optimise US,

Australia & Colombia

Project

'Public sector like', e.g. subsidies, guaranteed off-take

Waste-to-energy, Campus energy, Specialised accommodation, Decarbonisation of Transport, Water

Construction of project through to operation, delivering value enhancements and return shift

Exit to secondary market or hold for yield

£25-75 million

Further growth through adjacencies and leveraging existing platform

Growth business or platform

Private sector / businesses, e.g. utility, internet services provider

Economic infrastructure across a range of sectors, including Transport, Digital, and Energy Transition

Growth and de-risking of business over time into Core economic infrastructure

Exit to secondary market or hold for further growth and yield

£100-300 million

Significant opportunity to scale

Building a diversified and scalable platform

11 John Laing Group plc Capital Markets & Strategy Update November 2020

Strategy: developing a broader infrastructure investment platform

Building out JLG's platform:

Adjacent Greenfield Projects and Core-plus Economic Infrastructure

Strategic objectives:

• Build range of investment mandates in complementary infrastructure sectors across risk/return spectrum
• Develop scalable and replicable model, capable of adding new teams and investment mandates
• Achieve scale and cost competitive operating platform
• Generate platform value for shareholders

Adjacent

Greenfield

PPP Greenfield Core-plus

Projects

Platform benefits:

• Shared sector expertise and relationship networks
• Capitalise on international footprint
• Allocation of balance sheet across range of mandates, combined with third-party funds
• Attraction of broader talent
• ESG embedded across business and processes
• Common support infrastructure

Building a diversified and scalable platform

12 John Laing Group plc Capital Markets & Strategy Update November 2020

Market segmentation and investment focus

Greenfield projects and Core-plus businesses generate similar financial returns

Return

Core Economic

Infrastructure

Brownfield	"return shift"
PPP Projects

Traditional

Private Equity

Core-plus

Economic Infrastructure

Greenfield PPP

& Adjacent

"return shift"

Risk

Value creation:

• Projects: return shift between greenfield (development and construction risk) to brownfield (operational and yielding)
• Core-plusbusinesses: return shift between growth businesses or platforms (potentially with a greenfield element) to larger and lower risk Core assets

Large and growing pool of capital seeking secondary infrastructure assets with long-term stable yield

13 John Laing Group plc Capital Markets & Strategy Update November 2020

Vision: attractive balance of capital returns and income

Business line

Investment mandate

PPP & Projects

Greenfield PPP	Brownfield PPP
& Projects	& Projects

Economic Infrastructure

Mid-marketCore Core-plus

Primary return type

Value creation strategy

Illustrative funding model and capital allocation

Balance sheet: Third-party:

Capital return	Income yield
Development and	Maximise value:
Hold for yield, or
construction of project
Exit to secondary market
through to operation
	or managed funds

Capital return

Growth and de-risking of business over time to develop into Core economic infrastructure

Income yield

Maximise value:

Hold for yield, or

Exit to secondary market or managed funds

Financial model: return drivers for JLG

Capital return

Income yield Fee income

Capital return	Fee income
Fee income	Income yield

Providing an attractive financial model with a balance of capital return and income to shareholders

14 John Laing Group plc Capital Markets & Strategy Update November 2020

Context for the strategic review - my assessment

Growth and scale

Focus and centralisation

Add and develop capabilities and talent

Improve consistency of performance

Strengthen financial and funding model

15 John Laing Group plc Capital Markets & Strategy Update November 2020

Actions taken in first six months

Strategy  Strategy and future vision defined

Capabilities  Detailed capabilities and talent review completed

• Change of management structure implemented and new talent recruitment progressing well
• Material reduction in PPP team in UK & Europe as part of restructuring and re-allocation of costs to growth initiatives

Processes  Detailed review of processes completed across investment, asset management, divestment

• Improvement initiatives substantially implemented
• Strengthened Investment Committee composition and review process
• Implemented new monthly asset reviews and early warning monitoring
• Implemented new divestment asset-by-asset planning and portfolio management review

Focus is on execution

Seeing improvement in performance since first half

16 John Laing Group plc Capital Markets & Strategy Update November 2020

Actions taken in first six months (cont.)

Costs		Costs review completed and largely implemented by end of 2020
		Annualised run-rate cost savings of £6m - 13% of run-rate operating costs; to be re-allocated to
		growth initiatives

Capital management

• Strong realisation activity in H2 with £565m of total proceeds agreed at uplifts to book value
• Good reduction in Renewable Energy exposure to 25% during 2020
• Strong balance sheet; RCF re-stocked with over £500m of funds available for new investment opportunities
• Recent announcement of additional investment in I-77 project

Disclosure  Disclosure enhanced at interim results, more to come at year-end

• KPIs aligned with new strategy being introduced in 2021 to measure progress

Focus is on execution

Seeing improvement in performance since first half

17 John Laing Group plc Capital Markets & Strategy Update November 2020

Our strategic pillars and priorities

GROW		OPTIMISE		ENHANCE
Re-focus and optimise core		Portfolio and capital management		Organisation and capabilities
greenfield PPP business
Grow adjacent greenfield Projects		Operating costs and efficiencies		ESG strategy and integration
alongside PPP
Build Core-plus investment		Processes and operating model		Financial and funding model
capabilities

Assess opportunities to grow platform inorganically

18 John Laing Group plc Capital Markets & Strategy Update November 2020

2

The Opportunity

19 John Laing Group plc Capital Markets & Strategy Update November 2020

Positive market and investment outlook

Strong structural growth

in Infrastructure investment

Greater need

for private sector

Mega trends

driving future opportunities

Strong secondary market

• Fundamental drivers of new infrastructure investment remain as strong as ever
• Material investment needs in JLG's core markets
• Post-COVIDGovernment stimulus plans set to accelerate growth
• Need for private sector investment due to record government debt levels
• Supportive structural mega trends shaping future opportunities
• Acceleration of trends due to COVID-19
• Long-termcash yields from secondary assets continue to attract institutional investors in a low interest rate environment
• JLG has a valuable secondary portfolio

Significant requirement for new infrastructure investment in our core markets

Our strong balance sheet and differentiated greenfield capabilities mean we are well positioned

20 John Laing Group plc Capital Markets & Strategy Update November 2020

Positive market outlook for infrastructure spending

JLG	Comments
Regions
US	 Second largest infrastructure market in the world
		Significant investment gap: 2016-40 spend US$8.5 trillion; 45% more required to address under-investment
		Biden & 'Build Back Better' - US$2 trillion over 4 years: highways, bridges, energy grids, schools, universal broadband

Australia  2016-2040: total spend US$1.5 trillion underpinned by economic and demographic fundamentals

• Federal government committed to investing AUD110 billion in infrastructure over the next decade; state budgets are even larger - New South Wales alone has an infrastructure pipeline of AUD107 billion over the next four years

UK & Europe

Colombia & Peru

• UK: £640 billion of gross capital investment into infrastructure by end of current parliamentary term; National Infrastructure Strategy expected to focus on broadband, decarbonisation and transport
• EU: €750 billion Green Deal aimed at a greener, more inclusive, digital and sustainable Europe
• Germany: €130 billion stimulus programme including investment in sustainable mobility
• Colombia: 4G roads programme US$15 billion; 5G PPP programme US$9 billion
• Peru: updated US$5.4 billion PPP pipeline announced in January 2020

Significant future infrastructure investment expected in our key markets

Source: Oxford Economics, Inframation

21 John Laing Group plc Capital Markets & Strategy Update November 2020

Global infrastructure spend set for continued growth

Global infrastructure spend by region (US$ trillion)

4.0

North America

North America gap

3.5

LatAm

LatAm gap

Europe

Europe gap

Investment gap

3.0

APAC

APAC gap

Middle East & Africa

2.5

2.0

Investment

1.5

Baseline

need

forecast

1.0

0.5

0.0

2007

08

09

10

11

12

13

14

15

16

17

18

19

20F 21F 22F 23F 24F

Pre-COVID-19

Solid growth outlook

Forecast growth in global infrastructure investment 2019-24 prior to COVID-19 stimulus packages:

• 2% CAGR assuming investment at current levels
• 5% CAGR assuming a step up to address historical under-investment

Post-COVID-19

Growth in investment expected to accelerate:

• US: Biden's US$2tn programme
• Australia: AUD9.3bn of investment injected or accelerated since late 2019
• Europe: €750bn Green Deal

Global infrastructure spend forecast to continue to grow

Substantial investment gap remains in JLG's core markets

22 John Laing Group plc Capital Markets & Strategy Update November 2020	Sources: Global Infrastructure hub,
Oxford Economics, Press, Bain analysis

Mega trends shaping our business and future opportunities

Demographic Urbanisation change

Digital connectivity

Climate change and energy transition

Technology

Growing and ageing populations will drive significant demographic and social changes

One in three people, will live in cities of at least 500,000 habitants by 20301

Rapid urbanisation

Digitisation expected to continue to disrupt traditional businesses and how we live, work and communicate

De-carbonisation targets driving commitments towards green energy infrastructure

Existing supporting infrastructure, including infrastructure connecting

Rapidly changing technology and associated changes in consumer demands will require new supporting

Increased investment	driving the need to
expected in education,	expand existing
affordable housing and	infrastructure in cities
healthcare	including transport &
	social infrastructure
	1 Source: UN

Increasing digitisation and need for connectivity requiring significant investment in fibre networks and broadband capacity

renewable generation to end users will require significant new investment

Growing demand for scarce resources such as water and food will require new infrastructure solutions

infrastructure

Investment expected in electrification of transport

Mega trends will shape our future markets over the next 10+ years

These represent fundamental drivers for the development and building of new infrastructure

23 John Laing Group plc Capital Markets & Strategy Update November 2020

COVID-19 is also shaping infrastructure investment

	Critical role for private sector		Acceleration of mega trends		Adaptation and resilience
	Increase in near-term	Need for private		Accelerated	Low carbon		Adaptation	Domestic
	government spending	sector capital		digitisation	economy		of transport	resilience
	Infrastructure a key	With government		Home and flexible	In wake of		Certain transport	Governments
	economic stimulus	budgets facing		working has	pandemic, renewed		impacted (e.g.	expected to seek
	tool	fiscal stretch		accelerated need for	focus on sustainable		airports), while private	to strengthen key
				digital connectivity,	infrastructure and		vehicle usage	domestic supply
				including fibre-to-the-	tackling climate		increases as	chains resulting in
				home to less well-	change with many		substitute for public	further
				connected	countries re-		transport. Future	infrastructure
				communities	affirming net zero		opportunities as	investment
					targets and		transport
					announcing new		infrastructure (e.g.
					plans for		public transport)
					decarbonisation		required to adapt

24 John Laing Group plc Capital Markets & Strategy Update November 2020

Strong secondary market

• Secondary market continues to be very strong in a low interest rate environment
• Long-termstable cash yields from secondary infrastructure assets continue to attract institutional investors
• Significant dry powder to be deployed: US$98 billion1 raised in 2019 - a record

JLG has a valuable secondary portfolio

1 Source: Preqin

25 John Laing Group plc Capital Markets & Strategy Update November 2020

IEP East: a recent case study

• Availability-basedasset under long-term concession
• Sold to a large European pension fund
• >5.8x cash money multiple achieved

Conclusion: positioning JLG for sustainable growth

Capitalise on our strong balance sheet and build on our solid existing PPP portfolio with embedded value

Re-focus and grow core greenfield PPP business

Grow adjacent greenfield projects alongside PPP

Build Core-plus investment capabilities

Assess opportunities to grow platform inorganically

• Focus resources on core regions of US, Australia and Colombia where strong track record and good outlook for PPP
• Seek growth beyond publicly procured pipeline through selective acquisitions of equity stakes in projects where accretive
• Leverage existing team and network
• Mix of private initiatives and public procurement
• Sector examples include: waste-to-energy, specialised accommodation, water, decarbonisation of transport
• Focus on investing in business and platforms
• Opportunity to invest in larger equity tickets
• Higher velocity of investment given private nature of processes
• Consider platform acquisitions that bring investment talent and assets

Significant opportunity to grow our business

26 John Laing Group plc Capital Markets & Strategy Update November 2020

3a

Areas for Growth

1. & Greenfield Projects

27 John Laing Group plc Capital Markets & Strategy Update November 2020

Strong and resilient PPP business

Strong local

teams and

expertise

Resilient

portfolio and

good

performance

Embedded

portfolio value

• PPP business focused on US, Australia and Colombia where we have competitive advantage and see good opportunities
• • Strong local teams and partnerships
  • Good pipeline of future opportunities; government spending programmes supportive of PPP
• c.75% of total portfolio value invested in PPP; majority availability-based revenues
• Resilient PPP portfolio performance during COVID-19lock-downs
• • Minimal delays to construction and project delivery
  • Continued good project availability
• During first 9 months of 2020, PPP portfolio delivered 7% NAV growth
• Value creation as existing greenfield projects move towards operation and receive lower discount rates
• Valuation reflects cautious macro-economic assumptions
• Strong secondary market demand and valuations for PPPs

28 John Laing Group plc Capital Markets & Strategy Update November 2020

Strong project delivery and availability during 2020

IEP East		I-75		Melbourne Metro		New Generation
			Rollingstock

Availability-based rolling stock project in the UK

65th and final train accepted in September

Availability-based highway project in Detroit

Drilling started on the project's key 4 mile long storage and drainage tunnel in September

Major enhancement	Rolling stock project
of Melbourne's rail	in South East
network	Queensland
Tunnelling works on	Acceptance of 75th
the project's twin rail	and final train
tunnels passed the
halfway mark

29 John Laing Group plc Capital Markets & Strategy Update November 2020

Acquisition of additional stake in I-77

• New investment of £29 million to acquire additional 7.45% stake in I-77 Mobility Partners, taking total shareholding to 17.45%
• Asset with good opportunity for further value creation and growth, working in conjunction with our existing partners
• Modestly accretive to NAV, expected to complete by end of 2020

We can access investment opportunities over and above what is

reflected in our preferred bidder and short-listed positions

John Laing Group plc Capital Markets & Strategy Update November 2020

Adjacent greenfield projects opportunity

Strategic rationale

Characteristics

Sectors

• Significant infrastructure spending plans across our main regions, however not all greenfield projects will be PPPs
• • JLG has capabilities to capture 'PPP-like' - adjacent greenfield projects
• Plays to our competitive strengths
• • Extensive network of highly relevant partners and contractors, greenfield project investing and structuring experience, and asset management skills
• Mix of private initiatives and public procurement:
• • Public sector or significant public subsidies
  • Private sector with 'public-sector like' counter-party risk, e.g. highly rated institutions
• Range of sectors identified, including:
• • Waste-to-energy,campus energy, water, decarbonisation of transport, specialised accommodation, district heating and energy efficiency
• Existing team to be augmented with specific sector expertise

Value

creation

• Similar financial returns and risk profile to PPPs
• Development and construction of project through to operation, delivering value enhancements and return shift

Leveraging our expertise and partners network to access adjacent greenfield projects

31 John Laing Group plc Capital Markets & Strategy Update November 2020

Adjacent greenfield projects opportunity

Summary

				Specialised				Decarbonisation
Waste-to-Energy		Campus Energy			Water
		Accommodation			of Transport
Plants generating electricity		Projects related to		Greenfield housing projects		Including water treatment,		Electrification of transport
and/or heat from treatment		modernisation and		with a mix of private rents		water supply and		(e.g. public transport) and
of waste, with largely		operation of campus		and social or affordable		desalination		supporting infrastructure
contracted revenues		energy and utilities		housing				including vehicle charging
		facilities

Opportunities

JLG already active: East	JLG exploring	JLG short-listed for Redfern
Rockingham investment	opportunities in US	Communities in Australia,
Short-listed for Melbourne		and reviewing a number of

waste project	further opportunities
Opportunities in Australia
and North America

JLG exploring opportunities	JLG exploring
in range of geographies	opportunities in range of
including in Colombia	geographies

We are already actively pursuing a number of adjacent greenfield projects - and so are our partners

32 John Laing Group plc Capital Markets & Strategy Update November 2020

3b

North America

North America

PPP & Greenfield

Projects

Anthony Phillips

33 John Laing Group plc Capital Markets & Strategy Update November 2020

Market outlook: North America

Key statistics for US

Infrastructure investment1

• Current: c.1.5% of GDP (c.US$300 billion p.a.)
• c.2.2% of GDP required to address investment gap
• 2015-40spend at current levels: US$8.5 trillion
• 2015-40funding requirement: US$12.4 trillion

Role of PPPs in North America

• US: role of PPPs expanding
• Canada: mature, well-established and steady PPP market

1 Source: Oxford Economics

Estimated infrastructure funding gap from 2016 to 2025 (US$ trillion)

Surface transportation

Power

Funded

Airports

Funding gap

Water/ Wastewater

Source:

American Society of

Port and waterways

Civil Engineers

0.0

0.5

1.0

1.5

2.0

2.5

Significant US investment gap

• Federal infrastructure spend has halved since 1960's, population has doubled
• Investment needs to rise c.45% versus current levels to address the gap1
• Acute need to invest in transport
• Funding gap: state budget deficits compounded by COVID-related revenue loss
• Biden: 'Build Back Better' US$2 trillion over 4 years

US is one of the most exciting infrastructure markets in the world and JLG is well placed to capitalise

34 John Laing Group plc Capital Markets & Strategy Update November 2020

A market-leading business

Market leader in winning North American transport PPPs

North American PPP portfolio

Value: £346 million1

48%

52%

Primary

Secondary

1 Portfolio as at 30 September 2020, adjusted for increased stake in I-77

Current portfolio

Primary	1	4
Secondary	7	5
		3

Market-leading PPP business

• Short-listedfor every major US transport PPP since establishing US offices in 2014

I-75 (Michigan)

1 AVAILABILITY-BASED

Hurontario Light Rail (Ontario)

2 AVAILABILITY-BASED

I-4 Ultimate (Florida)

3 AVAILABILITY-BASED

MBTA (Massachusetts)

4 AVAILABILITY-BASED

Transform-66(Virginia)

5 VOLUME-BASED

I-77 (North Carolina)

6 VOLUME-BASED

Denver Eagle P3 (Colorado)

7 AVAILABILITY-BASED

35 John Laing Group plc Capital Markets & Strategy Update November 2020

Strong project delivery during 2020

I-4 Ultimate		Hurontario		Denver Eagle		I-75

Availability-based highway	Availability-based light rail		First transit PPP		Availability-based highway
project in Florida	project in Ontario		in the US		project in Michigan
•	Schedule extension	• Construction works		• Final Completion		• Start of tunnel boring on
	agreed in February 2020	started in March 2020		Certificate issued in		the project's key 4 mile
•	Key interchange opened			November 2020		long drainage and
				storage tunnel in
	ahead of schedule in May
					September
	2020
Active asset management
• CEO	• CTO		• CCO		• CEO		• CEO
• CCO	• Technical Manager		• CTO				• CFO
• COO			• Technical Manager				• CTO

36 John Laing Group plc Capital Markets & Strategy Update November 2020

I-75: active asset management in action

Project overview

• JLG stake: 40%
• Partners: AECOM, Ajax Paving Industries,
  Dan's Excavating, Jay Dee Constructors, CA Hull
• Concession: 25 years
• Location: Metro Detroit, Michigan
• Description: reconstruction of a 5.5 mile section of road, the addition of capacity and construction of a new 4 mile long drainage and storage tunnel

37 John Laing Group plc Capital Markets & Strategy Update November 2020

Active asset management

• Consortium formation and bid process
• Strong project delivery team at SPV level
• Governance: two JLG directors (including Chair)

Preserving and enhancing value

• Securing and closing committed financing
• Minimising long-term operational and maintenance costs

Responsible infrastructure

• Critical north-south corridor for local communities, commuters and tourists
• Large maintenance backlog, prone to flooding and congestion, compromised safety
• Recycled construction materials, community engagement, wildlife protection

Attractive secondary market asset

• Critical infrastructure with strong ESG credentials
• Availability-basedrevenue model; low risk, cash yielding asset

PPP: strong short-listed positions

Transport projects driving our short-listed positions

• Jefferson Parkway
• Georgia SR-400 Express Lanes
• I-495& I-270 P3 Program (Maryland Managed Lanes) Phase 1
• Sepulveda Transit Corridor
• Confidential social infrastructure project

Maryland Managed Lanes opportunity

• The largest PPP Managed Lanes project in North America, estimated capex of US$7.8bn over two phases
• JLG is part of the Capital Express Mobility Partners consortium (Ferrovial, Meridiam, Aecom)

38 John Laing Group plc Capital Markets & Strategy Update November 2020

Managed Lanes: an attractive class

• Significant barriers to entry
• Attractive risk-adjusted returns

Existing Managed Lanes projects

JLG & Ferrovial projects

Other Ferrovial projects

Other PPP Managed Lanes

Concluding remarks

Market-leading North American PPP business

US set for significant future infrastructure investment

Active asset management approach to create value

Extensive partner network is key to success

Responsible investment and asset management

39 John Laing Group plc Capital Markets & Strategy Update November 2020

3c

Australia

Australia

PPP & Greenfield

Projects

Justin Bailey

40 John Laing Group plc Capital Markets & Strategy Update November 2020

Market outlook: Australia

Key statistics for Australia

Infrastructure investment:

• Current spend: c.3.6% of GDP (c.US$50 billion p.a.)
• c.4% of GDP required to address investment gap
• 2016-40spend at current levels: US$1.5 trillion
• 2016-40funding requirement: US$1.7 trillion

Source: Oxford Economics

Role of infrastructure in post-COVID-19 stimulus

• Since November 2019, Australian authorities have brought forward or injected additional investment of almost AUD9.3 billion
• Targeting a 50% reduction in assessment and approval times for major projects (from an average of 3.5 years to 21 months)

41 John Laing Group plc Capital Markets & Strategy Update November 2020

Australian infrastructure market backdrop:

• Commonwealth Government committed to spend nearly AUD180 billion on economic infrastructure over the next decade
• Strong fundamentals: population expected to increase by 40% during 2016-40

The role of PPP in Australian greenfield infrastructure:

• Mature PPP framework with transport dominating recent deal flow
• Victoria and New South Wales historically the most active
• PPPs used to drive innovation, risk transfer and value for money
• Visible pipeline of PPP projects, particularly large transport bids

Emerging opportunities in adjacent greenfield projects:

• Waste-to-energy:Australian waste sector undergoing a transition from landfill to recycling and recovery

A well invested market and strong PPP framework with emerging opportunities in adjacent greenfield projects

Our market leading Australian PPP business

Since entering the market in 2011, John Laing has invested more into greenfield PPP projects in Australia than any other investor

Australian PPP & projectsCurrent portfolio portfolio

Value: £365 million 13%

			4
			6
		3	5
87%		2
1

Primary

Secondary

Divestments to date	Primary
Secondary

• Optus Stadium (2019)
• Auckland South Corrections Facility (2020)

East Rockingham (Perth)

1 VOLUME-BASED

Melbourne Metro

2 AVAILABILITY-BASED

New Royal Adelaide Hospital

3 AVAILABILITY-BASED

New Generation Rollingstock

4 AVAILABILITY-BASED

Sydney Light Rail

5 AVAILABILITY-BASED

Clarence Correctional Centre

6 AVAILABILITY-BASED

42 John Laing Group plc Capital Markets & Strategy Update November 2020

Strong project delivery during 2020

Clarence		Sydney Light Rail		Melbourne Metro
Correctional Centre

New Generation Rollingstock

Correctional facility focused on reducing re-offending in New South Wales

• Facility officially opened on 25 June 2020
• Operations commenced in early July 2020

Active asset management

• Board Chair
• Operations Director
• Development Director
• Design & Technical Manager

Light rail project with capacity for up to 13,500 commuters in peak hours

• Final stage opened to the public in April 2020
• Operational completion achieved in July 2020
• Board Chair

Major enhancement of Melbourne's rail network

• Tunneling works on the project's twin rail tunnels passed the halfway mark
• Board Chair

Rolling stock project for South East Queensland suburban rail network

• Acceptance of 75th and final train in September 2020
• Progressing towards Initial Fleet Acceptance
• Board Chair
• Finance Director
• Commercial Director

43 John Laing Group plc Capital Markets & Strategy Update November 2020

Clarence Correctional Centre: active and responsible investing

Project overview

• JLG stake: 80%
• Partners: Serco (10%), John Holland (10%)
• Sub-contractors: John Holland (D&C), Serco (O&M)
• Concession length: 20 years
• Location: Grafton, New South Wales
• Description: 1,700 bed correctional facility focused on rehabilitation

44 John Laing Group plc Capital Markets & Strategy Update November 2020

Active asset management

• Consortium formation
• Lead role in project delivery: all-JLG employee SPV team

Responsible infrastructure investment

• Focus on rehabilitation and reducing re-offending
• Modern facility
• Vocational training to facilitate reintegration and reduce re-offending
• Job creation: up to 600 permanent staff (>1,200 during construction)

Attractive secondary market asset

• Critical infrastructure with attractive ESG credentials
• Availability-based,yielding asset with a 20-year concession from a AAA-rate State Government

Australian PPP & greenfield short-listed positions

North East Link: availability-based road project in Melbourne

• Project to complete the outer metropolitan ring road around Melbourne, including the construction of twin 6km, 3-lane tunnels
• Part of the Spark consortium (with WeBuild, GS E&C, China State Construction, Capella, Broadspectrum); one of two short-listed
  South East Metro Waste-to-Energy: advanced waste processing project in Melbourne
• Project to develop an advanced waste processing solution and alternative to landfill for 16 councils in South East Melbourne
  Redfern Communities Plus: volume-based social infrastructure project in Sydney
• Development of 400-500 new inner-city homes with 30% ear-marked for social housing; part of the NSW government's build-to-rent programme
• Part of the Redfern Communities consortium (with Compass Housing); one of three short-listed

Australian pipeline driven by traditional PPPs and adjacent greenfield project opportunities

45 John Laing Group plc Capital Markets & Strategy Update November 2020

East Rockingham: example of adjacent greenfield project

Project overview

• JLG stake: 40%
• Partners: Masdar, Acciona, Hitachi Zosen
• Sub-contractors: Acciona & HZI (EPC), Suez (O&M)
• Operating life: 40 years+
• Location: 40km south of Perth, Australia
• Description: 300,000 tonnes per annum

waste-to-energy plant

46 John Laing Group plc Capital Markets & Strategy Update November 2020

Active asset management

• Active role in closing and mobilising the project
• Lead sponsor in project delivery through key roles held in the SPV

Responsible infrastructure investment: enabling a circular economy

• 300,000 tonnes per year of residual waste - would otherwise go to landfill
• c.29MW of baseload energy capacity
• By-productsto be recycled
• Community: 40-50 permanent jobs, c.300 during construction

Attractive secondary market asset

• Critical infrastructure with strong ESG credentials
• High degree of contracted waste volumes and energy off-take substantially contracted to provide stable cashflows

Concluding remarks

Market-leading Australian PPP business

Active asset management approach to create value

Good PPP pipeline and adjacent greenfield projects to drive growth

Extensive partner network

Responsible investment and asset management

47 John Laing Group plc Capital Markets & Strategy Update November 2020

4

Areas for

Growth

Core-plus Economic Infrastructure

48 John Laing Group plc Capital Markets & Strategy Update November 2020

Strategic rationale for Core-plus

While generating attractive returns, greenfield PPP investment alone will not deliver sufficient future growth and scale for John Laing

Opportunity to grow and scale

• Larger equity investment tickets
• Higher 'velocity of capital'
• Longer-termgrowth potential
• Flexibility to 'hold for value'

Commonalities with our existing

projects business

• Shared sector expertise and relationships network
• Leverage existing international footprint
• Similar risk-adjusted returns and 'return shift' opportunity
• Consistent with our ESG strategy

Sizeable and growing market in mid-marketCore-plus economic infrastructure

49 John Laing Group plc Capital Markets & Strategy Update November 2020

Core-plus is a sizeable and growing opportunity

Historical Core-plus deal value in key geographies

2008-2019 (US$ billion)

25,000															Attractive growth
	Australia
20,000													2008-19 CAGR:
Western Europe
												• Total: 21%
15,000	North America
						21% p.a							• Australia: 12%
10,000															• Western Europe: 20%
															• North America: 23%
5,000
0
2008	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019

Sources: Inframation; Infrastructure Journal; Bain analysis

50 John Laing Group plc Capital Markets & Strategy Update November 2020

Core-plus economic infrastructure opportunity

Characteristics:

Operational businesses or platforms with good growth potential

Attractive risk-adjusted returns

Asset intensive with strong market position

Provide essential or critical services

Long-term resilient cash flow

Acceptable level of demand or market risk

Opportunity to grow businesses and de-risk them over time

to become larger Core economic infrastructure, which

represent highly attractive assets in the secondary market

John Laing Group plc Capital Markets & Strategy Update November 2020

Characteristics of Core-plus economic infrastructure

Operational businesses or platforms with good growth potential

• Mid-marketfocus with typical equity investments of c.£100-300m
• Opportunities to add value and grow, organically and / or inorganically

Asset intensive with strong market position

• Owns assets in perpetuity or has exclusive access under long-term contract
• Assets that are difficult to replicate without significant time and capital

Long-term resilient cash flow

• Good visibility on future cash flows, including good contracted levels

52 John Laing Group plc Capital Markets & Strategy Update November 2020

Attractive risk-adjusted returns

• 10-14%returns per annum

Provide essential or critical services

• Services are critical to customer's business or operating requirements

Acceptable level of demand or market risk

• Less cyclical or correlated to the broader economy than traditional Private Equity

Why we can be successful

Mid-market economic infrastructure space is under served

Availability of flexible

balance sheet capital to invest

Leveraging our existing platform and capabilities

Visibility of investment pipeline

• Existing funds have become much larger through recent record fundraising
• Able to attract, retain and build talent as well as seed broader funds in the future
• Combination of Core-plus investment skills with existing Greenfield expertise is highly relevant for many opportunities in the Energy Transition and Digital Infrastructure sectors, for example
• Combining these skills and track records in an integrated way would create a differentiated proposition
• We are already seeing a flow of real opportunities in Core-plus

53 John Laing Group plc Capital Markets & Strategy Update November 2020

Significant mid-market opportunity

Transaction value and fund size	Global infrastructure deals, 2009 - 2019

Large deals	12%
(US$1bn+)

Mid-size deals

42%

(US$100-999m)

Small deals

46%

(<>

Infrastructure deals

completed

by transaction value

No. of	Aggregate deal
deals	value (US$bn)

		3,500								3,252 3,323		600
49%	Large funds	3,000						2,748 2,803			2,724	500
	(US$2bn or more)												2,520
		2,500
						2,323						400
					2,029 2,085
		2,000
			1,699
	Upper											300
23%
mid-market funds	1,500	1,332
	(US$1-1.9bn)												200
	Lower	1,000
16%
mid-market funds												100
	(US$500-999m)	500
12%	Small funds
(less than US$500m)
	0											0
Un-listed
		2009	10	11	12	13	14	15	16	17	18	2019
infrastructure dry
power by fund size			Number of deals		Aggregate deal value ($bn)
			Source: Preqin

54 John Laing Group plc Capital Markets & Strategy Update November 2020

5

Optimise and Enhance

51 John Laing Group plc Capital Markets & Strategy Update November 2020

Our strategic pillars and priorities

GROW

Re-focus and optimise core greenfield PPP business

Grow adjacent greenfield Projects alongside PPP

Build Core-plus investment capabilities

Assess opportunities to grow platform inorganically

Focus of this section

OPTIMISE		ENHANCE
Portfolio and capital management		Organisation and capabilities
Operating costs and efficiencies		ESG strategy and integration
Processes and operating model		Financial and funding model

56 John Laing Group plc Capital Markets & Strategy Update November 2020

OPTIMISE		ENHANCE

Portfolio and capital management

57 John Laing Group plc Capital Markets & Strategy Update November 2020

Focused and re-shaping the business

Re-focused and optimised PPP

• Projects business

Reduce exposure to Renewable Energy

• Single PPP & Projects business, integrated across regions, with common leadership
• Clear focus in US, Australia and Colombia where we have competitive advantage and see good flow of opportunities
• • Leverage platform to grow into Adjacent Greenfield Projects
  • Selective approach to other geographies
• Focus on larger equity investment ticket sizes
• • Improve resources/costs efficiency to enhance portfolio returns
  • Opportunistically enhance existing positions through accretive stake acquisitions
• Focus on more complex and differentiated projects
• • Play to our asset management expertise, where we can add value and enhance returns
• Realise over time, reducing exposure to merchant power prices and reducing volatility in returns
• Manage intensively existing assets and prepare for realisation over next 2 years
• Focus on realising at right time and under right conditions to maximise value
• Re-investcapital into more attractive areas

Clear priorities and investment focus

58 John Laing Group plc Capital Markets & Strategy Update November 2020

Clear investment focus

Region:	North America	APAC	Latin America	UK & Europe
Strategic			• Greenfield PPP and	• Greenfield PPP and	• Greenfield PPP and	•	Build Core-plus
focus			adjacent projects	adjacent projects	adjacent projects		capabilities
						•	Adjacent greenfield
							projects

Geographical focus

•	US	•	Australia	•	Colombia	• Western Europe
•	Canada	•	New Zealand	•	Peru

59 John Laing Group plc Capital Markets & Strategy Update November 2020

Renewable Energy portfolio

Renewable Energy portfolio value of:£297 million, representing 25% of total portfolio value

• Agreed sale of Australia wind portfolio marks material progress in reducing Renewable Energy exposure
• Largely operational portfolio, being prepared for realisation over next two years

Renewable Energy portfolio value breakdown

By Stage of Lifecycle

By Type

6%

40%

60%

94%

Primary	Solar asset
Secondary	Wind asset

Commitment to reduce exposure to Renewable Energy through realisations over next two years

Note: pro forma and based on the portfolio as at 30 September 2020, adjusted to exclude assets under agreed sales and to include the agreed purchase of an additional stake in the I-77; all valued at the transaction price

60 John Laing Group plc Capital Markets & Strategy Update November 2020

Actively managed portfolio

Actively manage secondary portfolio for value

Disciplined portfolio construction and segmentation approach

• Seek realisations where we can maximise value for shareholders
• • Assessing each asset; whether to hold for longer or realise for value
  • Detailed exit plans developed for each asset, ready to execute
  • Individual asset plans considered through lens of optimising portfolio value and efficient balance sheet management
• Rationalisation of low contribution assets
• • Rigorous assessment of value contribution of each asset to portfolio
  • Rationalise tail of 'low contribution' assets, e.g. low yield and/or sub-scale, to improve asset management efficiency and enhance returns
• Focus on portfolio construction to ensure an attractive and balanced portfolio
• New portfolio segmentation approach

Active portfolio management with focus on generating strong capital returns through realisations

61 John Laing Group plc Capital Markets & Strategy Update November 2020

Shape of our secondary portfolio

Total secondary assets portfolio value of £839 million

Secondary portfolio value breakdown

By Revenue type	By Region
12%	55%	19%	43%

33%	38%
PPP: availability-based	Australia
Renewable Energy	North America
PPP: volume-based	UK & Europe

Note: Analysis shows proforma portfolio value at 30 September 2020, adjusted for the disposal of our 30% interest in IEP East and the announced sale of the Australian wind portfolio. The analysis also excludes Buckthorn (earnout) and certain legacy assets (Hastings, DARA, Solar House, Tarraby Farm).

62 John Laing Group plc Capital Markets & Strategy Update November 2020

Approach to realisations

• Committed to maximising value from secondary assets through realisations
• • Divestment plans in place for each asset, to ensure ready for sale with good operational track record
• Disciplined approach
• • Sell assets only when ready
  • Focus on value optimisation, including yield
• Good progress in H2 2020 with realisations of IEP East and Australian wind farm portfolio
• • Realised at uplifts to book value
• Dividend policy: shareholders share directly in our realisation successes

Secondary portfolio capable of generating attractive realisation

results, at or above book value

63 John Laing Group plc Capital Markets & Strategy Update November 2020

Realisations to date in 2020

12 realisations including:10 Renewable Energy projects

							Money
Date announced	Realised projects	Sector	Country	Cash proceeds	vs Book value	multiple
16	March 2020	Buckthorn Wind Farm	Renewable Energy	US	£44m	-1%	0.9x
23	March 2020	Pasilly Wind Farm
		St Martin Wind Farm	Renewable Energy	France	£26m	+2%	1.0x
		Sommette Wind Farm
5 May 2020	Auckland South Corrections	Social Infrastructure	New Zealand	£18m	-1%	2.5x
Facility
18	September 2020	IEP East	Rail	UK	up to £422m	+22%	5.8x
19	October 2020	Australian wind farm portfolio	Renewable Energy	Australia	£158m	+3%	1.5x

Recent realisations at uplifts of book value underpin overall portfolio value

64 John Laing Group plc Capital Markets & Strategy Update November 2020

Active portfolio management approach

A number of assets are low contributors to the secondary portfolio yield

5-year average forward dividend yield1

12.0%
10.0%
8.0%	Low contributors
6.0%
	Average yield
4.0%
2.0%
0.0%

Wind generation	PPP: volume-based
Solar generation	PPP: availability-based

Focus on rationalising the secondary portfolio for value

1 Analysis shows 5-year forward looking average dividend yield (excluding equity injections) as at 30 September 2020. Excludes IEP East, the Australian wind portfolio and certain smaller legacy assets. Includes purchase of additional stake in I-77

65 John Laing Group plc Capital Markets & Strategy Update November 2020

Active portfolio management approach

A number of assets where economic interest is sub-scale

Value of asset (£m) as at 30 September 20201

140
120
100
80
Low contributors
60
40
Average value
20
0

Wind generation	PPP: volume-based
Solar generation	PPP: availability-based

Focus on rationalising the secondary portfolio for value

1 Analysis shows proforma portfolio value at 30 September 2020, adjusted for assets under agreed sales or acquisition and valued at transaction price (IEP East, Australian wind farm portfolio, I-77)

66 John Laing Group plc Capital Markets & Strategy Update November 2020

Portfolio segmentation approach

Key categories	Comments	Hold period

1. Primary assets
2. Maturing assets
3. Ready for sale
4. Hold for value
5. Manage intensively

• Greenfield projects
• Requires further operational track record or ramp-up period to be fully operational
• Divestment planning or process underway
• Strong yield assets; accretive to portfolio
• Turn-aroundsituations
• Significant remediation required

Until operational and ready for sale

Until optimised and ready for sale

Realise in short-term

Depending on funding needs and portfolio construction; provides optionality to realise

Depending on remediation plan, opportunistic approach to realisation

Focus on managing carefully portfolio construction

Introduction of portfolio segmentation approach

67 John Laing Group plc Capital Markets & Strategy Update November 2020

Portfolio segmentation approach (continued)

		Key categories	Selected examples	Portfolio Value (%)1
1	Primary assets	• Ruta del Cacao	c. 30%
• Transform 66
2	Maturing assets	• Clarence Correctional Centre	c. 30%
• Sydney Light Rail
3	Ready for sale	• Live Oak	c. 15%
4	Hold for value	• Denver Eagle P3	c. 10%
5	Manage intensively	• Alder Hey	c. 15%
• Sunraysia

Focus on managing carefully the portfolio

Introduction of portfolio segmentation approach

1 Pro forma: based on the portfolio valuation as at 30 September 2020, adjusted to exclude assets under agreed sales and to include the agreed purchase of an additional stake in the I-77; all valued at the transaction price. Also excludes certain legacy assets

68 John Laing Group plc Capital Markets & Strategy Update November 2020

OPTIMISE		ENHANCE

Operating costs and efficiencies

69 John Laing Group plc Capital Markets & Strategy Update November 2020

Simplified and more cost efficient organization

Re-focusing of Group's resources and capital in regions and sectors where we have demonstrable competitive advantage and see greatest opportunities

Organisational simplification and focus

Costs more aligned with investment strategy

• Simplification of organisational structure with PPP & Projects business now integrated across all regions, under common leadership
• Re-focusingof PPP & Projects business on core investment areas where we have competitive advantage
• Greater central control and consistency
• Implementation of cost reduction programme generating £6 million of annualised run-rate cost savings
• • Optimising resources with a tighter investment focus and greater centralisation
• Re-allocationof cost savings to growth initiatives, including building Core-plus team
• Further efficiencies expected over time as we realise non-core Renewable Energy assets

70 John Laing Group plc Capital Markets & Strategy Update November 2020

Cost savings to be re-allocated to growth initiatives

Cost

efficiency

areas

Operating

cost savings

Implementation

costs

• c.15% reduction in Group's total headcount
• Closure of Paris and Tel Aviv offices, downsizing of Schiphol office
• Reduction in indirect and other Group overhead costs
• Targeted annualised run-rate operating cost savings of £6 million
• Cost savings against baseline of estimated run-rate operating costs of £45 million1, representing a reduction of 13%
• Up to £4 million of one-off implementation costs (largely costs associated with redundancies) to be incurred during the financial year 2020 and 2021
• Majority of costs incurred in 2020

Targeting £6 million of run-rate cost savings

Re-allocation of cost savings into growth initiatives, including building Core-plus team

1 Reflects run-ratenon-PMS staff and overhead costs as at August 2020

71 John Laing Group plc Capital Markets & Strategy Update November 2020

Strategic objective: creating a cost competitive platform with scale

• Strategic objective to create a scale platform with a more efficient operating model
• Scale and cost efficiency will reduce dilution of returns:
• • Operating costs of c.2.9%1 of NAV currently
  • Industry benchmarks are 1.5% or better for larger platforms
  • Opportunity to enhance shareholder returns over time
• Focus on higher value business:
• • Larger equity investment tickets will increase cost efficiency and enhance portfolio returns
  • Objective for third-party capital fees and portfolio income to cover costs over time

1 Reflects run-rate operating costs of c.£45 million (non-PMS staff costs and overheads) at 31 August 2020 and the Q3 NAV value at 30 September 2020

72 John Laing Group plc Capital Markets & Strategy Update November 2020

OPTIMISE		ENHANCE

Processes and operating model

73 John Laing Group plc Capital Markets & Strategy Update November 2020

Strengthening of processes

Strengthening of our investment, asset management and divestment processes to ensure consistency and discipline

Review

Approach

• Detailed review of processes undertaken
• Supplemented by review by external consultants, including targeted deep-dive reviews of specific projects to assess processes
• Number of improvement initiatives defined with implementation substantially completed by end of 2020
• Increased centralisation of control
• More integrated approach across the business; no regional siloes
• Local teams and sector expertise, with discipline of group allocation of capital and oversight of portfolio management

Improvement initiatives substantially implemented

Expect to see benefits over time

74 John Laing Group plc Capital Markets & Strategy Update November 2020

Investment process: actions taken

Streamline processes

Greater oversight, integration and control

• Combining of the previously separate Investment and Divestment Committees
• Single Investment Committee involved in the full spectrum of key decisions from investment through to divestment
• • Aligned with managing the overall capital allocation of the Group and considering portfolio construction
• Investment Committee more involved in early stages of investment screening process
• • Ensuring more efficient allocation of resource and capital, and focus on ESG
• More systematic screening process of early stage opportunities
• More integrated approach across all regions of the business to ensure shared expertise
• Central monitoring of overall 'funnel' of investments and divestments to ensure overall portfolio position and liquidity is monitored more dynamically

Strengthened		Increased investment-led experience in membership
skills and		Addition of two Co-Heads of PPP & Greenfield Projects: Anthony Philips and Justin Bailey
capabilities of		Addition of Senior Adviser to IC: Susan Shehata

Investment

Committee

75 John Laing Group plc Capital Markets & Strategy Update November 2020

Strengthened Investment Committee

Ben Loomes Chief Executive Officer

Ben joined John Laing as Chief Executive Officer in May 2020. He has over 20 years of experience in the infrastructure sector across investing, fund management, fundraising and corporate finance. Previously, Ben was previously Managing Partner at InfraRed Capital Partners and 3i Infrastructure.

Mark Westbrook Chief Risk Officer

Mark was appointed Chief Risk Officer in 2018. He was previously a Managing Director in the Group's Primary Investment business. He has served on the Group's Investment Committee since 2015.

Anthony Phillips Co-Head of PPP and Greenfield Projects

Anthony has 20 years of experience in infrastructure investment in North America, Europe and Asia Pacific. Anthony joined John Laing in 2005 and successfully led John Laing's entry into the Australia PPP market. Anthony was previously Head of North America.

Justin Bailey Co-Head of PPP and Greenfield Projects

Justin joined John Laing in 2011 when the Group first established an investment team in APAC.

In 2014, he took over responsibility for the Group's primary investment activities. Justin was previously Head of Asia Pacific.

Derek Potts Senior Adviser

Derek joined John Laing in 2001 and was Group Managing Director of Primary Investments until his retirement in 2017.

He was responsible for leading JLG's bidding and investment activities both in the UK and internationally.

Susan Shehata Senior Adviser

Susan has more than 20 years of UK and international experience in transactions and financing across the infrastructure and utilities sectors. She was previously Global Co-Head of Infrastructure & Real Estate Finance at HSBC, having joined HSBC in London in 2004.

76 John Laing Group plc Capital Markets & Strategy Update November 2020

Pro-active approach to asset and portfolio management: actions taken

Asset and portfolio review

Early warning monitoring

Early warning monitoring

• Implemented monthly review:
• • Previously quarterly review process
  • More regular monitoring and reporting
  • Enhancement of asset dashboards with more measurable performance tracking from period to period
  • More integration with portfolio risk management process
• Implemented enhanced early warning monitoring process across portfolio:
• • More pro-active approach to emerging project issues facilitating quicker decision-making and actions being taken
• Asset and portfolio review process integrated into valuation process:
• • More centralised oversight of valuation process

77 John Laing Group plc Capital Markets & Strategy Update November 2020

Divestment process - actions taken

Asset-by-asset divestment strategies

Central oversight and integration

• Divestment strategies developed for each asset
• Detailed planning in place for divestment candidates for 2021 to ensure 'exit ready'
• Planning in place for further assets, giving us flexibility to be opportunistic and move quickly if conditions are right
• Individual asset plans combined with portfolio approach in terms of managing Group capital allocation and overall portfolio construction
• Dynamic process of reviewing and updating divestment planning as the investment pipeline evolves
• Group Divestment Director reporting to CEO, recruited this year
• Central leadership working in partnership with local teams to get the best result

Implemented new divestment framework and scorecards

• Introduced new framework for divestment planning which is integrated with investment and asset reviews, and the Group's treasury model and liquidity planning
• Divestment scorecards being implemented to track assets and ensure issues addressed to maximise value in due course
• Clear objective to maximise value for shareholders

78 John Laing Group plc Capital Markets & Strategy Update November 2020

OPTIMISE		ENHANCE

Organisation and capabilities

79 John Laing Group plc Capital Markets & Strategy Update November 2020

Our capabilities and talent agenda

Review		Detailed capabilities and talent review completed
	To determine the right resourcing and capabilities, including skill-set of investment team

Management

and leadership

changes

New investment and origination capabilities

• Management team and senior roles restructured and changes implemented
• • Co-Headof PPP & Greenfield Projects business - Anthony Phillips and Justin Bailey
  • Chief Operating Officer - Clare Underwood
  • Group HR Director recruited - Ariam Enraght-Moony
• Further recent recruitment:
• • Senior Adviser - Susan Shehata
  • Communications Director - Tashi Lassalle
• Further senior recruitment well progressed, including CFO
• Creation of a diverse and talented management team
• Expertise in adjacent sectors being added
• Capabilities to be built in Core-plus

80 John Laing Group plc Capital Markets & Strategy Update November 2020

Diverse senior team

Ben Loomes		Clare Underwood		Mark Westbrook		Anthony Phillips
Chief Executive Officer		Chief Operating Officer		Chief Risk Officer		Co-Head of PPP and
						Greenfield Projects

Justin Bailey		Alex Yew		Ariam Enraght-Moony
Co-Head of PPP and		Managing Director, Latin America		Group HR Director
Greenfield Projects

81 John Laing Group plc Capital Markets & Strategy Update November 2020

Recent additions to our team and Board

Ariam Enraght-Moony Group Human Resource Director and Executive Committee member

Ariam is responsible for leading our talent agenda, in particular our commitment to diversity and inclusion. Previously, Ariam served as Vice President of Global Leadership and Diversity at Goldman Sachs, Senior HR Business Partner at Google, and Director of Talent at Winton Capital.

Susan Shehata Senior Adviser to the Investment Committee

Susan has more than 20 years of UK and international experience in transactions and financing across the infrastructure and utilities sectors. She was previously Global Co-Head of Infrastructure & Real Estate Finance at HSBC, having joined HSBC in London in 2004.

Lisa Stone Non-Executive Director

Lisa has extensive investment experience in private equity across a broad range of sectors.

Lisa was a Founding Partner of HgCapital, between 1999 and 2017.

Leanne Bell Non-Executive Director

Leanne has extensive investment experience in global power infrastructure and utilities across the US, UK and Western Europe. Leanne was from 2013 to 2014 the Chief Financial Officer of Synergy Renewables LLC, from 2008 to 2013 Managing Director of Tiger Infrastructure Partners and from 1997 to 2008, Managing Director of GE Energy Financial Services.

Addition of diverse talent

82 John Laing Group plc Capital Markets & Strategy Update November 2020

Reward strategy review

• Group-widereview of remuneration to be launched in early 2021
• Remuneration is a key strategic tool to support our strategic pillars and to drive performance
• Remuneration review is driven by the following key principles:

Equitable and transparent

split of returns

• Between key stakeholders including between employees, shareholders and re-investment into the business

	Alignment with our			Focused on creating
	strategic pillars			stakeholder value
•	Clear link to driving		•	Clear line between
	performance to achieve			remuneration and
	growth			shareholder returns
•	Optimisation of our cost		•	Focus on financial and non-
	base			financial KPIs

• Attraction, retention and motivation of the right talent

Key principles and approach

83 John Laing Group plc Capital Markets & Strategy Update November 2020

Reward strategy review (cont.)

Overall timetable and key next steps

Early 2021		Mid-late 2021		Mid 2022
Full review of		Shareholder		Any formal
reward strategy		consultation on		shareholder
		proposed		approvals to be
		changes		sought at AGM
				in May 2022

Development of reward strategy

2022

Implementation or changes to remuneration arrangement

84 John Laing Group plc Capital Markets & Strategy Update November 2020

OPTIMISE		ENHANCE

ESG strategy and integration

85 John Laing Group plc Capital Markets & Strategy Update November 2020

Delivering responsible infrastructure solutions

Our Purpose

To create value for all our stakeholders by investing in, developing and actively managing infrastructure which responds to public needs, fosters sustainable growth and improves the lives of communities around the world

3 areas of focus:

Investment Strategy			People
Asset targeting and screening			Diverse and engaged talent

• Integral to purpose and strategy
• Increasing ESG integration
• Evolution of targets and reporting

Operations

Responsible asset management

Good corporate citizenship

Growth underpinned by focus on sustainable investments, responsible management and engaged talent

86 John Laing Group plc Capital Markets & Strategy Update November 2020

Value of a leading sustainability approach

• Social value
• Partner of choice
• Access to and cost of capital
• Talent attraction and retention
• Valuations on exit

Our Journey

continues with a higher level of ambition

2019: B	2020 Disclosure
	Full adoption by 2022

2021 Sustainability

Dedicated resource in place

Enhanced sustainability strategy

Priority KPIs and targets

Signatory to UN PRI

5 Priority	2020: AAA ESG rating	Progress on
UN SDGs		female talent

2021: focus on embedding a more systematic approach to ESG

87 John Laing Group plc Capital Markets & Strategy Update November 2020

Sustainable infrastructure: fundamental benefits to society

RAIL

• Provision of safe, affordable, accessible and sustainable transport
• Increasing connectivity and supporting economic development
• Enabling decarbonisation of transport networks

SOCIAL

• Positive social outcomes and job creation for communities
• Reducing reoffending rates through safe and thoughtful correctional facility design
• Investments in hospitals enable improved health outcomes

ROADS

• Investing in road projects focused on improved mobility, road safety and reduced environmental impact
• Innovative solutions such a managed lanes reduce urban congestion and pollution, with potential to halve journey times

WASTE TO ENERGY

• Carbon friendly and affordable solutions for electricity generation and waste management
• Provision of sustainable baseload electricity through circular economy

Core - Plus

DIGITAL INFRASTRUCTURE

• Investing in resource efficient infrastructure for the long-term
• Facilitating reliable connectivity for individuals and businesses

Core - Plus

ENERGY TRANSITION

• Electrification of energy use, the fundamental shift needed to reduce emissions
• Improving accessibility of sustainable power generation and efficiency of consumption

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OPTIMISE		ENHANCE

Financial and funding model

89 John Laing Group plc Capital Markets & Strategy Update November 2020

Strong balance sheet and liquidity

• Strong liquidity position, driven by recent realisation successes
• Well funded for new investments and shareholder distributions
• • Available financial resources of over £500 million
• £650m Revolving Credit Facility
• • £500m tranche maturing in July 2023
  • £150m tranche maturing in January 2022; currently being renewed to January 2023

Well funded with access to permanent and flexible capital

90 John Laing Group plc Capital Markets & Strategy Update November 2020

Our efficient capital management

Our approach

• Our aim is to manage our balance sheet efficiently
• Capital management strategy to provide financial flexibility to pursue new investment opportunities while minimising levels of unutilised cash balances
• Our RCF is used as a flexible way to provide funding for new investment opportunities
• • Realisation proceeds are then used to repay the RCF
• Active monitoring of cash balances held and generated from realisations, to ensure that we maintain a level of cash which covers our annual dividends and operating costs

We aim to hold a good level of liquidity for new investments while at the same time

minimising dilution to returns from holding excess cash

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Future enhancement of our financial and funding model

Challenges of current model

Strategic objective

Benefits of third-party capital

• Balance sheet capital only model constrains growth
• Sometimes limits flexibility to hold operational assets for longer to maximise value and manage portfolio construction effectively
• Can be challenging to manage balance sheet efficiently as investing and divesting are not always in lock-step
• Dilution of shareholder returns as portion of cash proceeds from realisations used to pay operating costs
• Stronger financial and funding model through investing our balance sheet alongside managing third-party funds
• Generating an attractive combination of capital upside as well as sustainable and growing annual profits
• Capable of attracting a premium valuation
• Third-partycapital would bring annual fee income, reducing return drag of operating costs and enhancing shareholder returns
• Enhances ability to scale the capital managed by the Group and get benefits of operating leverage (for example, reduction of costs as % of AUM)
• Flexibility to hold assets for longer to maximise value and manage portfolio construction more effectively, balancing capital return and yield
• Able to better manage balance sheet exposure to volume-based assets (e.g. large Managed Lanes projects) and developing market risk (e.g. Latin America)

92 John Laing Group plc Capital Markets & Strategy Update November 2020

Future enhancement of our financial and funding model

Strategic objectives:

• Stronger financial and funding model through investing our balance sheet alongside managing third-party funds
• Generating an attractive combination of capital upside as well as sustainable and growing annual profits
• Capable of attracting a premium valuation

Aim to develop third-party funds management activities over time

• scale within next 5 years

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Illustrative capital and returns bridge

Opportunity:

Good potential to reduce proportion of operating and financing costs as platform scales and third-party fees off-set costs, driving enhanced returns

Capital allocation

Returns bridge

Illustrative current position:

100%
15%	5%
Net	Debt	10%
operating	repayment	Shareholder	70%
costs1
and interest	distributions

Realisations	Funds to
and portfolio income	invest

Illustrative current position:

12%	3%
		1%	10%
	Net	Leverag
	operating	e
	costs (drag)	(benefit)

Illustrative	Implied net return
project return	to shareholders

Good potential to improve capital available for shareholder distributions and re-invested capital

1 Including disposal costs; Analysis excludes cash pension contributions

94 John Laing Group plc Capital Markets & Strategy Update November 2020

Opportunities for future enhancement

Number of future opportunities that we will be reviewing with the aim of enhancing returns

Review of

leverage and

liability

management

• Debt facilities and leverage review and policy
• FX hedging approach and policy
• Broader liabilities management
• Review to be undertaken in 2021, led by new CFO

Third-party

funding

opportunities

• Aim to develop third-party fund management business within next 5 years
• US Managed Lanes
• • Sizeable equity investment opportunities, e.g. Maryland bid
  • Managing volume risk exposure on balance sheet; opportunity to manage across combination of balance sheet and third-party funds
• Latin America
• • Healthy pipeline of future investments in Colombia
  • Managing developing market risk on balance sheet; opportunity to manage across combination of balance sheet and third-party funds

• Core-plus
• • Invest in business with balance sheet initially
  • Given larger equity investment ticket sizes and opportunity to scale, consider third-party funding in

future

95 John Laing Group plc Capital Markets & Strategy Update November 2020

Hybrid financial model: balance sheet combined with third-party capital

Creating shareholder value through leading with our balance sheet and managing third-party capital

John Laing Group

		Balance sheet investing		Fund Management activities
	Investing own balance sheet		Managing third-party capital
Types	+	Portfolio income	+	Fee income
of return:	Capital gains	Carried interest and
					performance fees
	-	Operating costs	-	Operating costs
		Funding costs
Key valuation
	P/NAV			P/E
metrics:

Proven and recognised model in the UK-listed market; capable of attracting a premium valuation over time

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6

Vision and Conclusion

97 John Laing Group plc Capital Markets & Strategy Update November 2020

A clear vision and strategy

A leading international investor and manager of balance sheet and third- party capital across a range of infrastructure sectors, delivering attractive and sustainable shareholder returns over the longer term

Diversified		Efficient		Strong financial
& scalable		operating		& funding
platform		model		model

Positioning John Laing for sustainable growth

Integrated ESG

principles

98 John Laing Group plc Capital Markets & Strategy Update November 2020

Strategic proposition: value creation

Our strategic objectives:

Win and develop greenfield projects and manage through to operational projects

Invest in Core-plus economic businesses and develop scalable platforms

Use our strong balance sheet and permanent capital

Align our operating costs to the market opportunity

Realise investments at good cash-on-cash multiples and uplifts to book value

Increase shareholder distributions

• Grow portfolio value and NAV
• Ability to generate return shift through our asset management skills
• Invest in further value-creating opportunities
• Over time, seed funds alongside third-party capital
• Optimise our cost base and, over time, cover this with fees and portfolio income
• Demonstrate the value of our investment portfolio
• Improve capital efficiency with a focus on maximising shareholder value

We manage our portfolio actively and generate strong capital returns through realisations

Generating shareholder distributions and capital to re-invest in new opportunities

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Portfolio returns

John Laing						Expected Portfolio
Portfolio						Returns per annum
PPP & Projects						9-11%
Availability-based
(North America & Australia)
PPP & Projects						11-13%
Availability-based
(Colombia)
PPP & projects						12-14%
Volume-based
(North America & Australia)
PPP & Projects						14-16%
Volume-based
(Colombia)
Core-Plus		10-14%

Leverage		Operating Costs		Return to
Assumption			Shareholders

Average net debt/				2.5-3.0%
gross portfolio value							9-12%
20-25%				of NAV
						per annum
				per annum

Sustainable return target of 9 -12% per annum to be achieved over the medium term

Note: Based on composition of target JLG portfolio at constant currency; excludes possible movements on the pension surplus through reserves

100 John Laing Group plc Capital Markets & Strategy Update November 2020