Insert textSecond level

Third levelTribal Group plc

Preliminary results for the yearended 31 December 2008

Peter Martin

Chief Executive

Simon Lawton

Group Finance Director

17 March 2009

Agenda

Summary

Financial performance

Business review

Outlook

Q & A

Financial Highlights

Year ended 31 December 2008 2007 Increase

Revenue £234.0m £209.2m +12%

Profit before tax* £18.6m £15.4m +21%

Earnings per share* 14.7p 12.2p +20%

Dividend per share 4.35p 3.93p† +11%

Operating cash flow £21.4m £22.4m

Operating cash conversion 136% 137%

* : Before amortisation of intangibles, goodwill impairment and financial instrument costs† : Pro rata annualised basis

3

Business Achievements

Improved operational performance

Strengthened senior management team

Internal reorganisation implemented

Acquisitions successfully integrated

International development progressed

Increased committed income and sales pipeline

4

Committed income at 1 January

Sales pipeline at 1 January

Outlook

5

2009

2008

2009

2008

£139m

£124m

£297m

£168m

Financial performance

Simon Lawton

Group Finance Director

6

Financial Performance

7

* Continuing operations only

† Before amortisation of intangibles, goodwill impairment and financial instrument costs

Revenue (£m) * Profit before tax (£m) * † Earnings per share (pence) * †

194

234

209

18.6

15.4

13.014.7

12.2

10.4

2006 200820072008200720062006 2007 2008

Income Statement

Twelve months ended 31 December

2008

£m

2007

£m

Growth

%

Continuing Operations

Turnover 294.2 256.5 +15%

Revenue 234.0 209.2 +12%

Operating profit* 19.8 17.3 +14%

Operating margin 8.5% 8.3%

Interest (1.2) (1.9)

Profit before tax* 18.6 15.4 +21%

Tax (5.0) (4.4)

Profit after tax* 13.6 11.0 +24%

Adjusted fully diluted EPS* (p) 14.7p 12.2p +20%

No of WA diluted shares (‘000) 86,459 84,795

Revenue increase of 12%

Operating profit* up 14% to £19.8m

Improved operating margin to 8.5%

Significant fall in interest and bank fees

Effective tax rate of 26.8%

Earnings per share up 20% to 14.7p

Final dividend 2.65p; total dividend of 4.35p

8* Before amortisation of intangibles, goodwill impairment and financial instrument costs

Committed Income

9

% of Total

£139m

£22m

£38m

£79m

2011 and beyond

£6m

2010

£29m2009£104m

16%Support Services

27%Consulting

57%Education £53m £21m £5m

£4m

£33m

£18m

£4m

At 1 January 2009

£1m

£4m

Sales Pipeline

10

Support Services

Consulting

Education£164m

£22m

£16m £6m

At 1 January 2009

£104m

£86m

£12m

£47m

£52m

Jan 08Jan 09

Total £297m £168m

Balance Sheet

December2008

£m

December2007

£m

Intangible assets 217.5 191.2

Other non-current assets 11.2 9.1

Net debt (19.7) (6.8)

Net working capital (13.6) (12.3)

Net assets 195.4 181.2

Share capital 83.1 79.0

Profit and loss reserves 45.9 36.6

Minority interest 1.8 1.1

Other reserves 64.6 64.5

Total equity and reserves 195.4 181.2

Intangible assets increased by £26.3m due to acquisitions

No goodwill impairment

Net debt increased by £12.9m following acquisitions

Strong working capital management

Gearing of 10.1% (December 2007 : 3.8%)

11

Group Cash Flow

Twelve months ended 31 December 2008

£m

2007

£m

Operating cash flow

- continuing operations 26.9 23.6

- (decrease) / increase in restricted cash (1.3) 1.6

- discontinued operations - 2.6

25.6 27.8

Interest (0.9) (2.1)

Tax (3.3) (0.7)

Net cash flow before investing & financing 21.4 25.0

Capital expenditure (5.1) (6.5)

Free cash flow 16.3 18.5

Acquisitions (19.0) -

Minorities and deferred consideration (5.6) (2.2)

Dividends paid (4.4) (3.4)

Disposal of Mercury Health - 36.3

Increase / (repayment) of loans 10.6 (53.2)

Net change in cash (2.1) (4.0)

Operating profit to cash flow conversion of 136% (2007 : 137%)

Free cash flow of £16.3m (2007 : £18.5m)

Capital expenditure of £5.1m (2007 : £6.5m) includes product development costs of £1.9m (2007 : £2.3m)

Five acquisitions completed for £19.0m

12

£40m bank facility until June 2012 with HBoS and HSBC

Actual Covenant

Interest cover x16.7 >x3.0

Debt to EBITA x0.9 <x3.5

13

Group Net Debt

December

2008

£m

December2007

£m

Group net debt 21.7 10.0

Less : restricted cash (2.0) (3.2)

Group debt 19.7 6.8

Bank revolver facilities (to 2012) 40.0 40.0

Working capital facility 6.0 3.0

Bank headroom 26.3 36.2 Interest rate swap in place over £25m of debt through to 2010 providing interest rate certainty at 4.99%

Current margin 75 bps

Business review

Peter Martin

Chief Executive

14

15

Market Analysis

2008 Revenue : £234m

Education 38%Central Government 20%Health 16%Housing and Regeneration 9%Local Government 9%

UK Public Sector 92%International 4%

4%Private Sector

Business Stream Analysis

16

2008 Revenue: £234m 2008 Operating Profit*: £27.4m

* Before central group costs

Support Services 23%

Education 41%

Consulting 36%

Education 52%

Consulting 30%

Support Services 18%

Education

17

Year ended 31 December 2008 2007

Revenue (£000) 96,408 91,581

Operating profit (£000) 14,303 14,928

Operating profit margin (%) 14.8% 16.3%

Financial performance

Revenue increased by 5% to £96.4m

Operating profit fell by 4% to £14.3m

Good performance in software, training and delivery contracts and inspections

Margin impacted by: - contract / business mix - investment in products and services - increase in bid costs / development capability

2009 margin anticipated to be at similar level

Business review

New chief executive appointed – November 2008

Reorganisation being implemented – six market facing business units

Restructuring / investment costs in H1 2009

Committed income of £79m at January 2009

Ofsted contract award (£75m over 6 years)

UK sales pipeline remains healthy

Good range of international opportunities

Consulting

18

Financial performance

Revenue increased by 24% to £85.2m

Operating profit increased by 68% to £8.3m

Contribution of £2.4m from acquisitions

Operating margins increased to 9.7%

Excellent performance in Central Government

Good results from Health - establishment of commissioning business - strategic acquisitions

Housing, Regeneration & Local Government - integration (local government) - acquisitions (regeneration, local government) - softer trading conditions in regeneration

Strong performance from Tribal HELM

Business review

Significant increase in committed income to £38m at January 2009

Continued importance of frameworks

Anticipate tightening in the spending environment but…

Public sector reform agenda will continue: - performance improvement - commissioning - value for money - resource allocation

Strong pipeline in UK and internationally

Year ended 31 December 2008 2007

Revenue (£000) 85,191 68,666

Operating profit (£000) 8,250 4,911

Operating margin (%) 9.7% 7.2%

Support Services

19

Financial performance

Revenue increased by 4% to £54.3m

Operating profit increased by 20% to £4.9m

Margin improved significantly

Architecture made good progress - health contracts / new frameworks

Excellent performance from Communications - acquisition / rebranding

Resourcing exceeded expectations despite difficult markets

Business review

Architecture - record order book in health - no significant dependence on PFI - uncertainty in FE / reducing cost base

Communications - acquisition provides distinctive, integrated offering - digital capability established - activity levels high

Resourcing - challenging conditions likely to continue - new business wins remain high

Committed income of £22m

Year ended 31 December 2008 2007

Revenue (£000) 54,277 51,997

Operating profit (£000) 4,861 4,041

Operating margin (%) 9.0% 7.8%

20

Outlook

Peter Martin Chief Executive

21

Macro Outlook

Tribal operates in the public services industry (PSI)

The Julius report (July 2008)* confirmed the importance of the UK PSI Worth £79bn in 07/08 – 6% of GDP Employs 1.2m people Fastest growing sectors: health, education and environment Competitive tendering reduces costs Significant export potential

OGC estimates UK public sector consultancy spend at £2.8bn

World Bank alone spends $1.5bn a year on public sector reform in the developing world

* The Public Services Industry review by Dr DeAnne Julius CBE published by the Department for Business, Enterprise and Regulatory Reform 

22

Macro Outlook

09/10. Headline spending plans to be maintained Tightening being seen ‘on the ground’, but… Pressure to reform, improve performance and achieve better value for money

10/11. Post-election retrenchment Public sector finances will have deteriorated, however “…maintaining the

government’s spending plans for the NHS, schools, defence and international development…” David Cameron, 5 January 2009

Tribal’s business driven by change, not by overall spending patterns

Current pipeline Top 30 opportunities (by value)

73% health or education 22% international ~4% capital-related ~1% PFI-related

23

2009 Priorities

Retain focus on existing sectors Increase market share

Develop international activities

Exploit competitive advantages: Domain expertise Breadth of capability Technology

Increase committed income: Larger, longer-term contracts Pipeline conversion

Control overheads / reduce costs / planned investment

24

Current Trading

Delivered plus committed revenue 49% of 2009 plan at end of February

H1 : restructuring costs £1.0m / investments of £0.7m

Restructuring Cost reductions will generate annualised cost savings of at least £4m

Investments New health and education initiatives International development Business development / bid costs

Strong pipeline / Ofsted contract secured

Further progress anticipated in 2009

Q & A

26

Client Feedback

“The success of the NCETM is in no small part due to Tribal’s expertise in portal development, project management and in many other areas. The blend of Tribal’s expertise and NCETM’s mathematics education experts has proved very successful in developing an innovative model for a national centre and thus establishing the NCETM ‘from scratch’. The Centre is now highly regarded across England and internationally.”

Celia Hoyles OBE, Director, National Centre for Excellence in the Teaching of Mathematics and Professor of Mathematics Education, Institute of Education, University of London

Education

Health

“Tribal have demonstrated their ability and skill in both influencing and challenging the organisation in relation to the key priority areas, and have done so by a process of engagement and support across the organisation.  Tribal are a valued and dynamic partner, who both share our core values and have helped us to aspire to realise our potential” Hilary Heywood - Programme Director, Ashton, Leigh & Wigan Primary Care Trust

“Tribal bring expertise and are transparently committed to achieving our goals. You have seamlessly become part of the organisation and that is a big benefit for us. Many of the stakeholders involved have commented about the value that you are adding. People are feeding back how different it all feels now, how fresh the approach is and that it embodies everything that the organisation should be.  You have created a real buzz about the work.”

Director of Projects and Programmes, Rural Payments Agency

Central Government

International “The project is creating a continuously growing, critical mass of senior officers who feel comfortable in handling change. At the same time, its development programme is letting the Government of Bangladesh see that improvements are possible if our officers have the right skills and proper support. It is also helping with key improvements in governance that will benefit important areas such as poverty reduction.” Secretary, Ministry of Establishment, Government of Bangladesh

Tribal Group plc

Preliminary results for the year ended 31 December 2008

END

This presentation is intended only as a summary of key points from Tribal Group plc’s announcement of its results for the year ended 31 December 2008 (“the Full Year Results 2008”). Accordingly, reference should be made to the Full Year Results 2008 and not to this presentation.