Slides
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Serco 2026 Half year results For 6 months ended 30 June 2026
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2 Agenda Overview Anthony Kirby, Group Chief Executive Financial review Mark Reid, Group Chief Financial Officer Strategy & markets overview Anthony Kirby, Group Chief Executive Q&A 2
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Overview Anthony Kirby, Group Chief Executive
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4 Strong financial performance, further margin progression Supporting increased buyback from £75m to £150m for the year Further delivery across strategic priorities supports unchanged 2026 guidance Positive indicators across our pillars of Growth, Competitiveness & Operational Excellence Continued simplification of operating structure To drive further efficiency, productivity & focus on higher - growth geographies Key messages © Crown Copyright
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5 Strong first-half performance, further margin progression 4% ↑ at constant currency Delivering 6.2% margin ~100% book - to - bill Revenue £2.5bn Underlying operating profit £157m Order intake £2.5bn 74% cash conversion Free cash flow £65m
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6 HY overview: momentum across our execution priorities Image © Crown Copyright Growth Competitiveness Cost discipline delivering a reduction in overheads Group - wide simplification programme – 5 to 3 sectors Operational excellence Key contract mobilisations – incl. Royal Navy support, US Air Force training, Solutions+ 15% Margin progress around the top - end of medium - term target Fewer safety incidents vs HY25 Retention win rate 95% ↑ 3% pts vs FY25 Largest pipeline in >10yrs £12.8bn ↑ 6% vs FY25 Excellent ASPAC book - to - bill 188% vs 45% at FY25 40 AI projects supporting frontline delivery
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7 2.7 3.7 5.2 5.2 5.1 5.7 5.6 6.26.2 6.0 FY16 FY19 FY21 FY22 FY23 FY24 FY25 HY26 FY26 Guidance Decisive actions are driving margin accretion Target range 5 - 6% Underlying operating profit margin % Targeted M&A increasing our exposure in US Defence & Europe Scaling complex contracts including CMS, USVs, & Armed Forces Recruitment Cost discipline focused management of overheads Portfolio management via renegotiations, disciplined bidding, & divestments On - contract growth expanding service lines & specialist projects
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Financial review Mark Reid, Group Chief Financial Officer
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9 Growth 4% £157m 5% (1%) —% 2% 2% Revenue Organic Inorganic FX Underlying EPS (diluted) Free cash flow Trading cash conversion Dividend per share Net debt to EBITDA Underlying operating profit Organic Inorganic FX Margin Revenue Underlying operating profit 6.2% Underlying ROIC HY25HY26 Dividend per share growth Revenue growth 4% 8% UOP growth 10% 10.17p 1.60p £65m 74% 0.75x 24.6% £2,508m 1% £146m 3% (2%) (2%) 2% 3% 6.0% 9.60p 1.45p £91m 84% 0.86x 24.0% £2,419m 4% 8% 6% 10% (29%) EPS Dividend Cash flow Financial leverage Return on invested capital Certain financial data has been rounded within this presentation. As a result of this rounding, the totals of data presented may vary slightly from the arithmetic totals of such data Financial overview
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10 HY26 HY25 Total growth CFX growth Defence 594 515 15% 21% Justice & Immigration - - - - Citizen Services 181 206 (12)% (9)% Total revenue 775 721 8% 12% UOP 84 76 10% 15% UOP margin 10.8% 10.6% 24bp 31% of Group Revenue £775m 47% of Group UOP* £84m Defence momentum, double-digit profit growth, expanded pipeline • Revenue +8% reported, —% organic o Defence driving growth, including contribution from MT&S acquisition and additional infrastructure works for the US Army and Space Force o Reduced case management volumes and end of aviation contract in Citizen Services • UOP +10% reported, +15% CFX o Revenue growth driving UOP increase, margin enhanced by mix and end of MT&S integration o Margin: increased by + 24bp to 10.8% • Order intake of £0.7bn, ~70% in Defence o Procurement delays continued into first half o 46% new business win rate • Pipeline / rebids / extensions: o Continued pipeline growth to £8.1bn , £3.1bn higher than 2025 (£5.0bn) o £3.2bn of bids submitted and awaiting adjudication o Strong Defence weighting of pipeline All numbers in table above are at reported currency. CFX growth shows growth at constant currency * Proportion of Group underlying operating profit before corporate costs North America Six months ended 30 June 2026 (£m)
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11 • Revenue +8% reported, +7% organic o Very strong Defence organic growth supported by commencement of Royal Navy vessel replacement contract o UK immigration decline s maller than expected, lower volumes in European immigration • UOP +7% reported, +5% CFX o Strong contribution from Defence & Justice o Absorbed UK National Insurance impact c.£5m o Mobilising costs from new contracts o Margin: decreased - 10bp to 6.2% • Order intake of £1.2bn o Maintained high retention rate, >95% o Awards from Ministry of Defence, UK Home Office and Ministry of Justice • Pipeline / rebids / extensions: o Pipeline of £3.8bn following adjudications o Further growth in pipeline expected in the second half o Defence largest sector in pipeline HY26 HY25 Total growth CFX growth Defence 253 195 30% 29% Justice & Immigration 709 692 2% 1% Citizen Services 397 367 8% 8% Total revenue 1,359 1,254 8% 7% UOP 84 78 7% 5% UOP margin 6.2% 6.3% (10)bp Excellent Defence organic growth, strong contract retention 54% of Group Revenue £1,359m 46% of Group UOP* £84m All numbers in table above are at reported currency. CFX growth shows growth at constant currency * Proportion of Group underlying operating profit before corporate costs UK & Europe Six months ended 30 June 2026 (£m)
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12 • Revenue (14)% reported, (13)% organic o Revenue reduced as expected from exit of onshore immigration services contract and Hong Kong divestment o Positive progress on several Defence contracts and commencement of Victoria Justice Transport Services • UOP (51)% reported, (55)% CFX o As expected, margin decline of - 169bp to 2.2% following the exit of the immigration contract o Co ntinued action to streamline the business and optimise workforce • Order intake of £0.6bn o Excellent book - to - bill of 188% o 5 - year justice extensions secured for Acacia P rison and Adelaide Remand Centre o Extension of the Australian Defence Force Health Services contract for an additional year • Pipeline / rebids / extensions: o Unchanged pipeline of £0.7bn o Robust Defence and Justice demand in pipeline HY26 HY25 Total growth CFX growth Defence 103 90 15% 7% Justice & Immigration 75 121 (38)% (41)% Citizen Services 129 145 (11)% (16)% Total revenue 307 355 (14)% (19)% UOP 7 14 (51)% (55)% UOP margin 2.2% 3.9% (169)bp Efficiency improvements, strong order intake, robust platform for growth 12% of Group Revenue £307m 4% of Group UOP* £7m All numbers in table above are at reported currency. CFX growth shows growth at constant currency * Proportion of Group underlying operating profit before corporate costs Asia Pacific Six months ended 30 June 2026 (£m)
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13 • Revenue (25)% reported, (13)% organic o Transition of contracts into Mubadala partnership o Reduced activity amid regional conflict • UOP (12)% reported, (15)% CFX o Margin: increased +122bp to 8.5% following program of operational efficiencies and impact of JV transition • Order intake of £11m o Increasing to £65m including awards through Mubadala partnership o Impacted by disruption in region • Pipeline / rebids / extensions: o Pipeline of £0.3bn o Mubadala partnership enhances access to a wider pipeline of opportunities o Preparing for potential future Defence opportunities through capability development and leveraging wider group expertise Six months ended 30 June 2026 (£m) HY26 HY25 Total growth CFX growth Defence 12 15 (22)% (27)% Justice & Immigration - - —% —% Citizen Services 55 74 (25)% (22)% Total revenue 67 89 (25)% (23)% UOP 6 7 (12)% (15)% UOP margin 8.5% 7.3% 122bp Resilient during period of regional instability 3% of Group Revenue £67m 3% of Group UOP* £6m All numbers in table above are at reported currency. CFX growth shows growth at constant currency * Proportion of Group underlying operating profit before corporate costs Middle East
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14 HY26 HY25 Underlying operating profit 156.7 145.8 Capex and repayment of lease liabilities (102.3) (92.1) Depreciation and amortisation 103.1 92.1 Working capital movement (41.3) (13.8) Other - (8.9) Trading cash flow 116.2 123.1 Trading cash conversion 74% 84% Free cash flow 65.0 90.5 Adjusted net debt 227.6 259.0 Net debt to EBITDA leverage 0.75x 0.86x Six months ended 30 June 2026 (£m) Continued strong balance sheet supports increased buyback £75m buyback completed post period end in July. New £75m buyback announced today Building on track record of strong cash generation Leverage of 0.75x, below 1 - 2x target range All numbers in table above are at reported currency On track for full year trading cash conversion of at least 80%
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15 Strong balance sheet Highly cash generative Capital - light business model 10% interim dividend per share increase Increased focus and resource, strengthened pipeline of opportunities aligned to our strategy £75m buyback completed by the end of July, with a further £75m announced today for the remainder of 2026 Core strengths: Capital priorities Progress in 2026 Increased business development and government affairs activity, expanded thought leadership and market shaping campaigns Invest to support organic growth Increase ordinary dividend payments Invest in acquisitions Return surplus cash to shareholders 1 2 3 4 Strong financial positioning enables investment and shareholder returns Target leverage range of 1-2x net debt to EBITDA Capital allocation
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16 2025 2026 Actual Previous guidance New guidance Revenue £4.9bn ~£5.0bn ~£5.0bn Organic sales growth 1% ~3% ~3% Underlying operating profit £272m ~£300m ~£300m Net finance costs £45m ~£52m ~£50m Underlying effective tax rate 23% ~25% ~25% Free cash flow £219m ~£160m ~£160m Adjusted Net Debt £206m ~£165m ~£240m Notes to guidance assumptions: • FY26 GBP:USD average rate of 1.34, GBP:AUD average rate of 1.90 and GBP:EUR average rate of 1.15 • Weighted average number of shares in 2026 of ~975m for basic EPS and ~995m for diluted EPS • Reflects a H1 £75m buyback which completed post period end in July and a H2 £75m buyback, expected to complete by the end of the year Guidance for 2026
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Strategy & markets overview Anthony Kirby, Group Chief Executive
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18 The ‘Four Forces’ continue to drive demand 1. OECD: Consumer Prices ; NCSR: Public turns against higher taxes and spending ; OECD: Global Debt Report ; Deloitte: enhancing CX 2. Cabinet Office – Opposition policy costings – 2024 Case study: Cabinet Office research reaffirms efficiency gains of private sector 2 • Cabinet Office research shows if 10% of contracts are insourced at end of term an extra ~£1.4bn needed over 5yrs • If increased to 50%, cost would be ~£2.3bn extra per year by fifth year • That is equivalent to >2x the capital budget savings announced to fund the Defence Investment Plan Years of above - target inflation Fierce pressure on governments to deliver more and better for less OECD debt levels at all time high 1 Balancing public expenditure Record support for spending reductions Voter intolerance of higher taxes Digital gov. services CSAT <21% vs private sector Rising expectations of citizens Growing costs Structural drivers of demand continue to create need where we have expertise
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19 Beyond efficiency: how the private sector strengthens public services Efficiency , quality & capability: why governments partner with the private sector 1. Capital Economics Case study: International research finds private sector prisons deliver better cost & quality 1 Flexibility & agility • In the UK, private prison places cost ~£16,000 less than the public sector. • Still more cost effective even after adjusting for prisoner mix. • In Victoria, Australia, research showed private prisons cost ~20% less than public comparables. • Cost advantage is achieved while delivering equal or better performance than public prisons. Efficiency & productivity Delivery of Social Value & ESG International best practice Innovation & technology Accountability, transparency, KPIs Risk management Lower cost, better value Focus on outcomes & citizens Public Services delivered by the private sector are 5 - 15% more efficient and deliver the same quality 1
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20 A more agile Serco through simplifying how we operate Defence Justice & Immigration Citizen Services Three Sectors Three Divisions Asia Pacific & ME UK & Europe North America Defence Transport Health & FM Justice & Immigration Citizen Services Four Divisions North America UK & Europe Middle East Asia Pacific At FY25 we simplified our sectors… we will refine our operating structure, driving further focus & efficiency International reach across >20 countries In geographies accounting for ~75% government spending on outsourcing * Total addressable market ~£900bn All Five Eyes & 5 highest spending NATO countries * Excluding Russia, China and Iran Five Sectors
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21 North America: strong pipeline balances delayed adjudications Largest gov. services market Serco’s largest Division by profit contribution Leading global - best practice across tech, commercial & operational capabilities Delayed decisions, not diminished demand strong visibility of future opportunities Market dynamics Embedded customer relationships including US Navy, Army, Air & Space, & Canadian Air Force Defence - weighted portfolio across acquisition support, training & asset modernization Increasingly tech - enabled in both civilian & military contracts Building capabilities via M&A four US acquisitions since 2018 Serco’s platform Growth opportunity Historic US defence budget ~$1trn US defence appropriations Record - high, £8bn NA pipeline accounting for 60% of Group Canada defence modernisation with focus on arctic & sovereign capabilities Sharing expertise across markets leveraging NA best - practice Key stats Addressable market ~£440bn Market growth rate ~3% HY26 revenue £0.8bn HY26 Order Intake £0.7bn HY26 Pipeline £8.1bn
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22 Growth North America: organic expansion of our technology-enabled platform Comprehensive Error Rate Testing (CERT) secured H1 2026 The award highlights Serco’s growing capability in large scale, technology - enabled citizen services Identification of improper payments to combat fraud, waste & abuse for Centre Medicare / Medicaid Services Oversees $1trn+ annual healthcare spending AI & intelligent document processing deployed alongside medical reviewers ~70m Americans served $109m seven - year contract 2013 Serco’s original support for CMS Customers
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23 UK&E: fiscal pressures, efficiency & defence investment underpin demand Large & growing market largest outside NA, robust & tested procurement processes Mature procurement regimes private sector procurement ~ 33% of UK Gov. budget Fiscal pressure remains acute public sector net debt >90% of GDP Modernising infrastructure & military public expectations & geopolitical threats driving investment Market dynamics Embedded delivery over 60yrs operating critical services Deep customer relationships spanning over 200+ contracts In - demand capabilities particularly in defence, justice, & immigration Strong track record of delivery c onsistent high - quality & efficiency Serco’s platform Growth opportunity Growth momentum revenues up 8% year - on - year Embedded efficiency requirements UK Gov . targeting 5% savings European expansion develop service lines in existing footprint & to other EU states Defence investment accelerating NATO commitments support long - term demand Key stats Addressable market ~£410bn Market growth rate ~4% HY26 revenue incl. JV £1.6bn HY26 Order Intake £1.2bn HY 26 Pipeline £3.8bn
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24 Operational excellence UK&E: mobilising next generation maritime services These programmes reinforce our embedded role in high - value, complex defence services UK MOD © Crown copyright 2025 Critical infrastructure that enables the Royal Navy in Portsmouth, Devonport & Clyde Mobilising the Royal Navy’s Defence Marine Services Next Generation programme £1bn+ total contract value Includes 24 new vessels In H1 2026, also secured a partnership to support 512 British Army vessels Demonstrates our ability to mobilise, modernise & expand large complex defence operations Customers
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25 ASP AC & ME: renewed defence & justice demand, modernisation programmes drive investment Established markets in ASPAC with track - record of sustained demand Significant Australian fiscal pressure $1trn debt creates efficiency demand Middle East modernisation initiatives create opportunity, but tempered by macroeconomic headwinds Continued geopolitical tension drives defence demand in Pacific & Gulf Market dynamics Exposure to in - demand services strong defence & justice capabilities Cost competitiveness following management changes & renewal programs in ASPAC Strong pedigree in delivery 35+ years of in - region operations Partnerships & JVs expand offering incl UAE Solutions+ JV with Mubadala Serco’s platform Growth opportunity Strong momentum in ASPAC justice exceptional H1 26 order intake New Zealand incremental growth expand using Group capabilities AUKUS & Five Eyes alliances using existing defence presence Increased defence focus in Middle East drives demand for new in - country services Key stats Addressable market ~£80bn Market growth rate ~4% HY26 revenue incl. JV £0.4bn HY26 Order Intake £0.7bn HY26 Pipeline £1.0bn
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26 Competitiveness ASP AC: leveraging our international justice expertise Secured a five - year Acacia Prison extension The se awards highlight our growing competitiveness in ASPAC and reinforces our position as a trusted partner to governments Builds on ASPAC momentum in Justice including: >£60m , five - year Adelaide Remand Centre extension Victoria Justice Transport secured H2 2025 ~190% ASPAC book - to - bill £400m of awards in Justice sector Excellent £0.6bn ASPAC order intake in H1 £320m total contract value Also awarded a £35m 320 - bed expansion programme Customers
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27 Government customers continue to seek efficiency & innovation from the private sector • The fundamental drivers of demand persist, with economic and geopolitical factors intensifying them in many markets • We are in the most attractive and largest government services markets • We have simplified our operating structure to further drive growth, competitiveness & operational excellence Our divisions UK & Europe North America ASPAC & ME Defence Justice & Immigration Citizen Services Our sectors
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28 Key messages © Crown Copyright Strong financial performance, further margin progression Supporting increased buyback from £75m to £150m for the year Further delivery across strategic priorities supports unchanged 2026 guidance Positive indicators across our pillars of Growth, Competitiveness & Operational Excellence Continued simplification of operating structure To drive further efficiency, productivity & focus on higher - growth geographies
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30 This announcement contains statements which are, or may be deemed to be, “forward looking statements” which are prospective in nature . All statements other than statements of historical fact are forward - looking statements . Generally, words such as expect”, “anticipate”, “believe”, “estimate”, “may”, “could”, “should”, “will”, “continue”, “aspire” “aim”, “plan”, “target”, “goal”, “ambition”, “intend” or, in each case, their negative or other variations or comparable terminology identify forward - looking statements . By their nature, these forward - looking statements are subject to a number of known and unknown risks, uncertainties and contingencies, and actual results and events may differ materially from those currently anticipated in such statements . Factors which may cause future outcomes to differ from those foreseen or implied in forward - looking statements include, but are not limited to : general economic conditions and business conditions in Serco’s markets ; contracts awarded to or lost by Serco ; customers’ acceptance of Serco’s products and services ; operational problems ; the actions of competitors, trading partners, creditors, rating agencies and others ; the success or otherwise of partnering ; changes in laws or governments or to governmental regulations ; regulatory or legal actions, including the nature of any enforcement action or remedies sought or imposed ; the receipt of relevant third party and/or regulatory approvals ; exchange rate fluctuations ; the development and use of new technology ; changes in public expectations or behaviour and other changes to business conditions ; wars and acts of terrorism ; cyber - attacks ; climate change and related regulatory developments ; and pandemics, epidemics or natural disasters . Many of these factors are beyond Serco’s control or influence . For a description of the principal risks and uncertainties that may affect Serco’s business, financial performance or results of operations, please refer to the Principal Risks and Uncertainties set out in this announcement . Forward - looking statements are not guarantees of future performance. These forward - looking statements are based on information a vailable, and assumptions made, as of the date of this announcement and have not been audited or otherwise independently verified. Past performance should not be taken as an indica tio n or guarantee of future results and no representation or warranty, express or implied, is made in relation to future performance or otherwise. Except as required by any applicable la w o r regulation (including under the UK Listing Rules and the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority), Serco expressly disclaims any obligation or u nde rtaking to release publicly any updates or revisions to any forward - looking statements contained in this announcement to reflect any change in Serco’s expectations or any change in events, conditions or circumstances on which any such statement is based after the date of this announcement, or to keep current any other information contained in this announcement. According ly, undue reliance should not be placed on the forward - looking statements. Any references in this publication to other reports or materials, including website addresses, are for the reader ’s interest only. Neither the content of Serco’s website nor any website accessible from hyperlinks from Serco’s website, including any materials contained or accessible thereon, are incorporated in or form part of this announcement. Serco is subject to the regulatory requirements of the Financial Conduct Authority of the United Kingdom. Forward-looking statements
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31 Appendix 1 Revenue is as defined under IFRS, which excludes Serco’s share of revenue of its joint ventures and associates. In prior peri ods where relevant, revenue including that from any discontinued operations has been shown for consistency with previous guidance and disclosures. Organic revenue growth is the change at constant currency after adjusting to exclude the impact of relevant acquisitions or d isp osals. Change at constant currency for revenue and underlying operating profit is calculated by translating non - sterling values for the period being reported into sterling at the average exchange rates for the comparable period. Free cash flow (FCF) is an alternative cash flow measure which is reconciled to net cash flow from operating activities. This IF RS measure is adjusted to remove the impact of non - underlying cash flows from operating activities and include dividends we receive from joint ventures and associates, net interest paid, the c api tal element of lease payments, cash flows on the purchase of own shares to satisfy share awards and net capital expenditure on tangible and intangible asset purchases. Trading cash flow is derived from FCF by excluding capitalised finance costs, interest, non - cash R&D expenditure and tax items. Trading cash conversion therefore provides a measure of the efficiency of the business in terms of converting profit into cash before taking account of the impact of capitalised finance co sts, interest, non - cash R&D expenditure, tax and non - underlying items. The order book reflects the estimated value of future revenue based on all existing signed contracts, excluding Serco’s share of joint ventures and associates. It excludes contracts at the preferred bidder stage and excludes the award of new multiple award contracts (MACs), indefinite delivery/indefinite quantity (I DIQ) contracts or framework vehicles, where Serco cannot estimate with sufficient certainty its expected future value of specific task orders that may be issued under the IDIQ or MAC ; i n these situations, the value of any task order is recognised within the order book when subsequently won. The definition is aligned with IFRS15 disclosures of the future revenue expected to be rec ognised from the remaining performance obligations on existing contractual arrangements and therefore excludes unsigned extension periods, and option periods in our US business. O rde r intake is the value of business which has been won during the year and typically includes Serco’s share of order intake from its joint ventures and option periods in our US business. The Pipeline of larger new bid opportunities reflects the estimated aggregate value at the end of the reporting period of new bi d opportunities with annual contract value (ACV) greater than £10m and which we expect to bid and be awarded within a rolling 24 - month timeframe. It does not include re - bids or extensions of existing business, and the total contract value (TCV) of individual opportunities is capped at £1bn; also excluded is the potential value of framework agreements, prevalent in the US in particular where there are numerous arrangements classed as ‘IDIQ’. In this case only the potential value of the any individual task order is included. Underlying earnings per share (EPS), diluted reflects the underlying operating profit measure after deducting underlying net fin ance costs and tax. It takes into account any non - controlling interests share of the result for the period and divides the remaining result that is attributable to the equity owners of th e C ompany by the weighted average number of ordinary shares outstanding, including the potential dilutive effect of share options, in accordance with IFRS. Underlying net finance costs and tax are used to calculate Underlying EPS to remove the impact of typical non - recurring or out of period items. Underlying operating profit (UOP) is defined as IFRS operating profit excluding amortisation of intangibles arising on acquis iti on as well as exceptional items. Consistent with IFRS, it includes Serco’s share of profit after interest and tax of its joint ventures and associates. Underlying return on invested capital (ROIC) is calculated as UOP for the period divided by the invested capital balance. Inv est ed capital represents the assets and liabilities considered to be deployed in delivering the trading performance of the business. Invested capital assets are: goodwill and other intangible assets; property, plant and equipment; interests in joint ventures and associates; contract assets, trade and other receivables; and inventories. Invested capital liabilities are contract liabilit ies , trade and other payables. Invested capital is calculated as a two - point average of the opening and closing balance sheet positions. Where relevant, prior year numbers in this presentation have been restated to reflect restated numbers within the Condensed C ons olidated Financial Statements, where explanations of the restated numbers have been provided. Notes and definitions
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32 Appendix 2 HY25 HY26 £m Reported Currency Organic Acquisition/ (Disposal) FX TOTAL Reported Currency Constant Currency UK&E 1,253.5 7% —% 1% 8% 1,358.6 1,345.3 North America 720.8 —% 12% (4%) 8% 774.9 808.0 Asia Pacific 355.3 (13%) (6%) 5% (14%) 307.2 289.0 Middle East 88.9 (13%) (10%) (2%) (25%) 66.8 68.5 Total 2,418.5 2% 2% —% 4% 2,507.5 2,510.8 HY26 v HY25 40.6 51.7 (3.3) 89.0 Revenue - growth composition HY26 vs HY25 Certain financial data has been rounded within this presentation. As a result of this rounding, the totals of data presented may vary slightly from the arithmetic totals of such data Revenue divisional analysis
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33 Appendix 3 HY26 HY25 Change FY25 £m Reported Currency Constant Currency Reported Margin Reported Currency Reported Margin Constant Currency Constant Currency Reported Currency Reported Margin UK&E 83.6 82.2 6.2% 78.4 6.3% 3.8 5% 148.9 5.8% North America 84.0 87.8 10.8% 76.4 10.6% 11.4 15% 143.5 9.8% Asia Pacific 6.9 6.3 2.2% 14.0 3.9% (7.7) (55%) 24.0 3.7% Middle East 5.7 5.5 8.5% 6.5 7.3% (1.0) (15%) 12.6 7.1% Divisions 180.2 181.8 7.2% 175.3 7.2% 6.5 4% 329.0 6.7% Corporate (23.5) (23.0) (1.0%) (29.5) (1.2%) 6.5 (22%) (57.4) (1.1%) Total 156.7 158.8 6.2% 145.8 6.0% 13.0 9% 271.6 5.6% Underlying operating profit and margin Certain financial data has been rounded within this presentation. As a result of this rounding, the totals of data presented may vary slightly from the arithmetic totals of such data Underlying operating profit (UOP) divisional analysis
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34 Appendix 4 £m HY26 HY25 FY25 Underlying operating profit (UOP) 156.7 145.8 271.6 Net finance costs (NFC) (23.3) (19.4) (44.8) Underlying PBT 133.4 126.4 226.8 Tax on UOP and NFC (30.7) (27.5) (51.6) Underlying PAT 102.7 98.9 175.2 Profit on disposal of subsidiary - - 4.7 Amortisation and impairment of intangibles arising on acquisition (11.9) (14.3) (30.0) Non underlying tax charge/(credit) 5.2 4.0 (4.3) Profit after tax 96.0 88.6 145.6 Attributable to equity owners 96.0 88.6 145.6 Weighted average share count for diluted EPS 1,010.0m 1,030.1m 1,034.7m Underlying EPS, diluted 10.17p 9.60p 16.93p Impact of non underlying items (0.67)p (1.00)p (2.86)p Statutory EPS, diluted 9.50p 8.60p 14.07p DPS 1.60p 1.45p 4.50p Income statement – EPS and DPS
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35 Appendix 5 £m HY26 HY25 FY25 Exceptional items: Goodwill impairment - - - Exceptional items - - - Tax on exceptional items - - - Total exceptional items, net of tax - - - Memo: Cash flow on exceptional items - - - Exceptional items
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36 £m HY26 HY25 FY25 Underlying operating profit (UOP) 156.7 145.8 271.6 Share of profit of joint ventures and associates (16.3) (11.7) (28.8) Depreciation, amortisation and impairment of owned assets 13.8 12.9 27.4 Depreciation, amortisation and impairment of leased assets 89.3 79.2 167.4 Working capital movement (41.3) (13.8) 43.2 OCP utilisation (3.1) (1.2) (3.3) Other movements in provisions net of reimbursement assets 1.8 (10.6) 2.6 Other non-cash movements 7.1 7.4 12.3 Disposal related costs - - (2.3) Tax paid (26.1) (13.4) (43.4) Net cash flow from operating activities 181.9 194.6 446.7 Dividends from joint ventures and associates 15.3 12.2 22.9 Net interest paid (25.1) (19.2) (42.5) Capital repayment of lease liabilities (87.9) (75.9) (158.9) Net capital expenditure (14.4) (16.2) (28.8) Purchase of own shares to satisfy share awards (5.8) (5.0) (26.3) Proceeds received from exercise of share options 1.0 - 3.9 Free cash flow (FCF) 65.0 90.5 219.3 Add-back: tax paid and net interest paid, as above 51.2 32.6 85.9 Add-back: non-cash R&D expenditure - - 0.1 Trading cash flow 116.2 123.1 305.3 Memo: UOP trading cash conversion 74% 84% 112% Appendix 6 Free cash flow and trading cash flow
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37 Appendix 7 £m HY26 HY25 FY25 Free cash flow 65.0 90.5 219.3 Net acquisition / (disposal) of subsidiaries and operations 1.0 (245.7) (250.7) Disposal related costs - - (2.3) Dividends paid to shareholders (30.3) (28.6) (43.3) Purchase of own shares (58.1) - (50.3) Capitalisation and amortisation of loan costs 1.7 1.5 0.9 Cash movements on hedging instruments 4.8 (13.4) (8.9) Foreign exchange movement on adjusted net debt (6.0) 36.5 29.4 Movement in adjusted net debt (21.9) (159.2) (105.9) Opening adjusted net debt (205.7) (99.8) (99.8) Closing adjusted net debt (227.6) (259.0) (205.7) Covenant adjustments (see Appendix 10) (7.3) (43.0) (23.5) Net borrowings per covenant (234.9) (302.0) (229.2) EBITDA underlying 314.2 352.3 316.6 Leverage ratio per covenant 0.75x 0.86x 0.72x Net debt and leverage
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38 Appendix 8 HY26 revenue mix, including share of JV&As* Total £1,627m 58% £775m 28% £307m 11% £93m 3% Justice & Immigration £784m £2,802m Defence £1,171m Citizen Services £847m Sector North America UK & Europe Asia Pacific Middle East 709 456 594 181 103 129 12 - 81 £m 75- 42% 28% 30% 462 * Reflects £2,508m reported revenue, adjusted to include Serco's share of joint ventures and associate's revenue of £294m. Certain financial data has been rounded within this presentation. As a result of this rounding, the totals of data presented may vary slightly from the arithmetic totals of such data Serco Total Focus on three sectors across four regions
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39 Appendix 9 £m HY26 HY25 FY25 Breakdown 1 – depreciation, amortisation and impairment Depreciation (excluding lease assets) 8.9 8.8 18.5 Amortisation (non-acquisition) 4.9 4.1 8.8 Depreciation and amortisation 13.8 12.9 27.3 Impairment of PPE (excluding lease assets) - - 0.1 D&A inc. impairment (excl. lease assets and acquisition intangibles) 13.8 12.9 27.4 Amortisation of intangibles arising on acquisition 11.9 14.3 30.0 Total depreciation, amortisation and impairment (excluding lease assets) 25.7 27.2 57.4 Breakdown 2 – other non-cash movements Share based payment expense 6.6 7.5 13.6 Profit/(loss) on disposal of PPE, intangible assets and leases (including termination) 0.7 (0.2) (1.2) Non-cash R&D expenditure - - (0.1) Other non-cash movements (0.2) 0.1 - Total other non-cash movements 7.1 7.4 12.3 Cash flow breakdown 1 and breakdown 2
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40 Appendix 10 £m HY26 HY25 FY25 Underlying operating profit (UOP) 282.5 276.9 271.6 Exclude: share of joint venture and associate post-tax profits (33.4) (23.4) (28.8) Exclude: foreign exchange credit on investing and financing arrangements (2.7) (0.5) (1.2) Add-back: Non-exceptional profit on disposal 4.7 - 4.7 Include: dividends from joint ventures and associates 26.0 37.3 22.9 Add-back: D&A inc. impairment (excl. lease ROU assets and acquisition intangibles) 28.9 26.4 28.5 Add-back: D&A inc. impairment of assets held under finance leases (IAS17) 3.7 4.2 3.9 Add-back: share-based payments charge 12.6 14.9 13.6 Add-back: non-exceptional net charge and utilisation on covenant OCPs 5.9 3.8 5.0 Covenant adjustment to reflect GAAP pre IFRS16 (14.0) (13.0) (15.3) Covenant adjustment to pro-forma for acquisitions - 25.7 11.7 EBITDA per covenant 314.2 352.3 316.6 Adjusted net debt (227.6) (259.0) (205.7) Add: finance leases (as covenant reflects GAAP pre IFRS16) (7.5) (11.2) (9.4) Exclude: disposal vendor loan note, encumbered cash and other adjustments (5.6) (5.3) (3.6) Covenant adjustment for average FX rates 5.8 (26.5) (10.5) Net borrowings, per covenant (234.9) (302.0) (229.2) Leverage ratio per covenant (not to exceed 3.5x) 0.75x 0.86x 0.72x Leverage covenant calculation
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41 Appendix 11 £m HY26 HY25 FY25 Net finance costs (48.7) (37.0) (44.8) Other covenant adjustments to net finance costs 22.2 22.1 22.8 Exclude: foreign exchange credit on investing and financing arrangements 2.7 0.5 1.2 Exclude: net interest receivable on retirement benefit obligations (0.7) (1.4) (0.8) Exclude: movement in discount on other debtors 0.1 0.9 0.2 Net finance costs for covenant calculation (24.4) (14.9) (21.4) EBITDA per covenant 314.2 352.3 316.6 Interest cover per covenant (to be at least 3.0x) 12.9x 23.6x 14.8x Interest cover covenant calculation
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42 Appendix 12 £m HY26 HY25 FY25 Goodwill 940.8 915.5 929.3 Other intangible assets (excluding leased assets) 149.5 173.6 162.2 Property, plant and equipment (excluding leased assets) 59.0 59.5 56.2 Contract assets, trade and other receivables 759.3 708.2 669.3 Inventories 22.6 21.9 20.0 Interest in joint ventures and associates 34.8 24.7 34.1 Invested capital assets 1,966.0 1,903.4 1,871.1 Cash and cash equivalents 182.2 173.6 199.3 Leased assets 473.4 507.0 482.8 Other assets (tax, derivative financial instruments, retirement benefit assets) 235.6 252.3 242.8 Total assets 2,857.2 2,836.3 2,796.0 Invested capital liabilities (contract liabilities, trade & other payables) (825.3) (746.2) (752.0) Loans (409.7) (433.5) (404.9) Obligations under leases (496.2) (523.5) (504.4) Provisions (192.7) (177.1) (188.8) Other liabilities (tax, derivative financial instruments, retirement benefit liabilities) (63.6) (84.7) (72.3) Total liabilities (1,987.5) (1,965.0) (1,922.4) Net assets 869.7 871.3 873.6 Balance sheet summary
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43 Appendix 13 £m HY26 HY25 FY25 Invested capital assets 1,966.0 1,903.4 1,871.1 Invested capital liabilities (825.3) (746.2) (752.0) Invested Capital (IC) 1,140.7 1,157.2 1,119.1 Average IC (two-point) 1,149.0 1,153.8 1,047.9 Underlying Operating Profit for rolling 12 months 282.5 276.9 271.6 Underlying ROIC: Underlying Operating Profit / Average IC 24.6% 24.0% 25.9% Return on invested capital (ROIC)
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44 Appendix 14 £m HY26 HY25 FY25 Fair value of scheme assets - SPLAS Short-dated credit 37.3 35.4 36.5 Asset backed securities 69.6 64.5 60.2 LDIs 177.4 187.7 188.4 Private debt 131.7 134.6 136.9 Amounts held by insurance companies 339.0 347.0 347.6 Cash and other 4.0 11.5 10.9 Total fair value of scheme assets - SPLAS 759.0 780.7 780.5 Pooled investment funds - RPS 55.5 57.1 57.1 Amounts held by insurance companies - ORS 95.6 85.7 91.4 Fair value of assets - Other schemes 1.4 1.1 1.2 Total fair value of scheme assets 911.5 924.6 930.2 Present value of scheme liabilities (913.4) (918.5) (928.7) Net amount recognised (1.9) 6.1 1.5 Pension assets mix and IAS 19 valuation
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45 Appendix 15 Rate for FY26e Average rates Closing rates Assumed average HY26 FY25 HY25 FY24 HY24 30 Jun 2026 31 Dec 2025 30 Jun 2025 31 Dec 2024 30 Jun 2024 31 Dec 2023 £:US$ 1.34 1.35 1.31 1.29 1.28 1.27 1.32 1.35 1.37 1.25 1.28 1.27 £:Aus$ 1.90 1.93 2.05 2.05 1.93 1.92 1.92 2.01 2.10 2.02 1.90 1.87 £:Eur 1.15 1.15 1.17 1.2 1.18 1.17 1.16 1.15 1.17 1.20 1.18 1.15 • HY26 bore immaterial FX impacts • No material impact estimated for FY26e currency: – Based on applying YTD average rates and recent spot rate for the rest of the year • Translational FX sensitivity: – FY26 GBP:USD av. rate of 1.34; 1c move = ~£13m revenue, ~£1.3m UOP (based on North America + Middle East) – FY26 GBP:AUD av. rate of 1.90; 1c move = ~£3m revenue, ~£0.1m UOP (based on Asia Pacific) – FY26 GBP:EUR av. rate of 1.15; 1c move = ~£5m revenue, ~£0.2m UOP (based on Europe) Currency rates
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46 Appendix 16 • HY26 underlying tax of £30.7m, on underlying profit before tax of £133.4m - effective tax rate (ETR) of 23.0% The rate is below the UK statutory rate principally due to the impact of post-tax profits of joint ventures being reported in Serco group pre-tax results. • Expect longer term ETR closer to ~25% UK statutory rate The ETR for future periods is expected to trend marginally below the UK statutory rate of 25% due to the ongoing effect of joint ventures, as noted above. Future ETR will be impacted to the extent that deferred tax assets are recognised/unrecognised, with increased recognition reducing ETR and vice versa. T ax
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47 The trend of net debt in HY 2026 has followed a normal pattern compared to HY25, which was significantly impacted by the acquisition of MT&S. The range of daily net debt around the average of ~£240m for the half year was within a range of +/ - £100m, which is considered typical for our business and evidenced by the trend over the past 5 years. The Group maintains strong access to committed liquidity at all times in order to fund these working capital movements, with the average available liquidity in HY26 being in excess of £500m. The opening and closing levels of net debt were slightly lower than the average for the half year, which is also typical for our business, as shown in the chart. Appendix 17 No adjustments have been made for the time period shown in the chart, with daily net debt movements presented as - is. Net debt trend analysis
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48 Appendix 18 For assistance with converting Ordinary Shares into ADRs (or vice versa), please contact Deutsche Bank’s ADR broker helpline: New York: +1 212 250 9100 London: +44 207 547 6500 adr@db.com www.adr.db.com Serco Group has a sponsored Level 1 ADR program, for which Deutsche Bank act as the depositary bank and custodian Ticker: SCGPY Exchange: OTC CUSIP: 81748L209 US ISIN: US81748L2097 Ratio: 1 ADR: 1 Ordinary Share ADR key benefits • Convenient means of trading/holding foreign shares • USD-denominated security – reducing custody costs • Trade, clear and settle like other US securities • Dividends (if declared by the Board) paid in USD • Purchased or sold through US brokers American Depositary Receipt (ADR) program
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49 UK & Europe £m North America £m Asia Pacific £m Middle East £m Total £m Key Sectors Defence 174.5 452.9 86.7 12.4 726.5 Justice & Immigration 710.9 - 156.1 - 867 Citizen Services 325.2 203.5 144.6 92.5 765.8 1,210.6 656.4 387.4 104.9 2,359.3 2024 Half Year Old Basis Six months to 30 June 2024 UK & Europe £m North America £m Asia Pacific £m Middle East £m Total £m Key Sectors Defence 174.5 452.9 86.7 12.4 726.5 Justice & Immigration 710.9 - 156.1 - 867 Citizen Services 155.8 159.6 57.2 12.3 384.9 Transport 62.8 43.9 4.5 41.3 152.5 Health 106.6 - 82.9 38.9 228.4 1,210.6 656.4 387.4 104.9 2,359.3 New Basis Six months to 30 June 2024 UK & Europe £m North America £m Asia Pacific £m Middle East £m Total £m Key Sectors Defence 358.2 932.5 181.4 26.3 1,498.4 Justice & Immigration 1,409.2 - 323.1 - 1,732.3 Citizen Services 678.5 393.6 294.9 189.6 1,556.6 2,445.9 1,326.1 799.4 215.9 4,787.3 Old Basis Year ended 31st December 2024 UK & Europe £m North America £m Asia Pacific £m Middle East £m Total £m Key Sectors Defence 358.2 932.5 181.4 26.3 1,498.4 Justice & Immigration 1,409.2 - 323.1 - 1,732.3 Citizen Services 330.7 308.3 118.1 23.5 780.6 Transport 130.7 85.3 16.6 82.4 315 Health 217.1 - 160.2 83.7 461 2,445.9 1,326.1 799.4 215.9 4,787.3 New Basis Year ended 31st December 2024 2024 Full Year Appendix 19 Sector comparatives - 2024
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50 UK & Europe £m North America £m Asia Pacific £m Middle East £m Total £m Key Sectors Defence 194.5 514.9 89.8 15.3 814.5 Justice & Immigration 692.1 - 120.6 - 812.7 Citizen Services 366.9 205.9 144.9 73.6 791.3 1,253.5 720.8 355.3 88.9 2,418.5 2025 Half Year Old Basis Six months to 30 June 2025 New Basis Six months to 30 June 2025 Old Basis Year ended 31st December 2025 UK & Europe £m North America £m Asia Pacific £m Middle East £m Total £m Key Sectors Defence 194.5 514.9 89.8 15.3 814.5 Justice & Immigration 692.1 - 120.6 - 812.7 Citizen Services 193.2 168.5 54.4 11.8 427.9 Transport 60.5 37.4 13.4 33.9 145.2 Health 113.2 - 77.1 27.9 218.2 1,253.5 720.8 355.3 88.9 2,418.5 New Basis Year ended 31st December 2025 2025 Full Year UK & Europe £m North America £m Asia Pacific £m Middle East £m Total £m Key Sectors Defence 426.9 1,084.4 183 31.9 1,726.2 Justice & Immigration 1,400.1 - 189.1 - 1,589.2 Citizen Services 755.1 378.8 282.5 145 1,561.4 2,582.1 1,463.2 654.6 176.9 4,876.8 UK & Europe £m North America £m Asia Pacific £m Middle East £m Total £m Key Sectors Defence 426.9 1,084.4 183 31.9 1,726.2 Justice & Immigration 1,400.1 - 189.1 - 1,589.2 Citizen Services 401.5 311.3 112.8 23.2 848.8 Transport 124.3 67.5 20 67.2 279 Health 229.3 - 149.7 54.6 433.6 2,582.1 1,463.2 654.6 176.9 4,876.8 Appendix 20 Sector comparatives - 2025