An introduction to HomeServe

Transcription

1 An introduction to HomeServe

2 Contents HomeServe at a glance Our business model HomeServe today Our Business Our International Businesses Financials Results 2016 our customer promises Before a customer joins We ll make it clear what they re buying and what it will do for them when a customer joins We ll tell them how much they re paying, what that buys them and how to claim when a customer becomes a member We ll make life easy for them when a customer makes a claim We ll solve their problem quickly and easily their emergency is our emergency If a customer s not happy We ll listen, say sorry and put things right wherever we can, as soon as we can The Home of Effortless Service 1 homeserveplc.com

3 HomeServe at a glance Our mission To provide home assistance membership, which frees our customers from the worry and inconvenience of emergencies, repairs and installations. Adjusted operating profit 1 FY m (2015: 87.8m) UK 58.0m (2015: 56.4m) USA 12.1m (2015: 6.4m) France 23.2m (2015: 23.4m) Spain 9.9m (2015: 7.5m) New Markets ( 5.9m) (2015: ( 5.9m)) Customers FY16 7.4m (2015: 6.3m) UK 2.2m (2015: 2.1m) USA 2.7m (2015: 2.0m) France 1.0m (2015: 0.9m) Spain 1.2m (2015: 1.1m) New Markets 0.3m (2015: 0.2m) Affinity partner households 103m (2015: 89m) UK 24m (2015: 29m) USA 43m (2015: 26m) France 15m (2015: 15m) Spain 15m (2015: 15m) New Markets 6m (2015: 6m) Retention 83% (2015: 83%) UK 82% (2015: 82%) USA 82% (2015: 82%) France 89% (2015: 89%) Spain 77% (2015: 79%) FTSE 250 listed company, based in the West Midlands Market cap. c. 1.7bn Operations in 5 countries UK, USA, France, Spain and Italy History 1993 Founded as a joint venture with South Staffordshire Water 1995 Signed first affinity partnership with Anglian Water 2001 Doméo launched - a JV with Veolia in France 2003 Entered USA 2004 De-merged from South Staffs Water, listed as HomeServe 2007 Acquired Reparalia business in Spain 2010 Acquired National Grid Energy Services business in USA 2011 Acquired full control of Doméo in France 2012 UK regulatory issues no contagion in other markets 2013 Continued new partner signings in USA and Spain 2014 Solid UK business with over 2m customers 2015 New partnership in France - Lyonnaise des Eaux 2015 Special Dividend of 99m 2016 Aquired Utility Service Partners (USP) in the USA 2016 Launch Leakbot in the UK 2016 Invest for further international expansion 1 All references to adjusted earnings before interest, tax, depreciation and amortisation (EBITDA), adjusted operating profit or loss, adjusted profit before tax and adjusted earnings per share throughout the report, exclude exceptional items and the amortisation of acquisition intangibles, as reconciled to their statutory equivalents in the Financial Review. 2 All USA KPIs stated after inclusion of USP, a business acquired in June homeserveplc.com

4 HomeServe today HomeServe PLC UK USA France Spain New Markets Total Started operations Italy, Innovation, Digital Customers (2016) 2.2m 2.7m 1.0m 1.2m 0.3m 7.4m Repair network Employed, Subcontract Franchised Employed, Subcontract Subcontract Franchised Subcontract Subcontract Employees (2016) 2, ,795 Revenues (2016) 292m 153m 77m 97m 20m 633m 1 Operating Profit (2016) 58m 12m 23m 10m ( 6m) 97m 1 Intersegment 6m. 2 All references to 2016 refer to reported results for the year ended 31 March homeserveplc.com

5 Business Model and how it works We have a unique and successful business model Value drivers Strong Affinity Partnerships Comprehensive Products Marketing Expertise Claims and Network Capability Customer Loyalty Delivering (at 31 March ) Marketable households* Customer demand Customers & Policies Customer Satisfaction Recurring Income 103m households* 7.4m customers 13.4m policies Strong ratings in Revoo and Trust Pilot and low level of customer complaints Policy Retention Rate: 83% Strengths Business to consumer (B to C model) High levels of recurring income Ability to cross-sell and broaden relationships Replicable internationally and proven Low capital intensity/high cash conversion * In addition, we also market under the HomeServe name via direct mail in the US and digitally in the UK and USA. 1 Adjusted for USP acquisition (June 2016) 4 homeserveplc.com

6 Value driver Build strong long-term Affinity Partnerships Strong Affinity Partnerships Delivering Marketable households & brands Strong affinity partnerships delivered through long-term agreements with utilities and manufacturers Over 100 affinity partnerships giving access to 103m households, Recent USP acquisition gives access to a further 335 new partners HomeServe owns the customer at the point of renewal Common goal in driving customer growth Generally partners get a risk-free % commission (based on the retail premium) Partners can make direct sales to Customers, particularly in France and Spain 5 homeserveplc.com

7 Value driver create products people want to buy Our products fill the gap between the homeowner s contents and buildings policy and the cause of the emergency Consumer need / Event Water Burst/leaky water supply line Leaky/burst pipes or taps Slow/no drainage Clogged drains, sinks and toilets HomeServe product Plumbing & Drainage Plus HomeServe Cover7 Leakbot - connecting the world s plumbers Electrics Broken/Faulty wiring Faulty lights, sockets or switches Fuse box issues Central Heating Gas leaks, problems, concerns No heat, no hot water Landlord products Electrical Emergency & Breakdown Cover Gas Central Heating Breakdown Cover HomeServe Cover8 Landlord Gas Safety Inspection (CP12) Landlords Heating Cover & Boiler Service Policies are underwritten by third party insurers 6 homeserveplc.com

8 Value driver Sales and marketing know-how 8.5 Plumbing & Drainage Cover Sold, arranged and administered by HomeServe and underwritten by Inter Partner Assistance SA Working with <<Mr. Sample A. Sample>> <<Address Line 1 (Mailing)>> <<Address Line 2 (Mailing)>> <<City, ST (Mailing)>> n n n n n Comprehensive Protection Why worry about the expense and inconvenience of emergency home repairs? Select the coverage level that s right for you from our range of affordable plans and rest easy knowing that if a home emergency happens to you you are covered. Please respond by <<Month Day, 20XX>>. fold Sincerely, Michael Halter Vice President South Jersey Energy Service Plus Available: Mon. Fri 8 a.m. 8 p.m. Sat. 10 a.m. 4 p.m. EST Please respond by <<Month Day, 20XX>> SJNJx-Sxx-811DA *HomeServe national average repair costs as of 4/11. No charge for covered repairs Perf KOs HomeServe USA Repair Management Corp. ( HomeServe ), South Jersey Energy Service Plus (SJESP) and South Jersey Gas are independent companies separate from each other. HomeServe and SJESP are not regulated by the New Jersey Board of Public Utilities. HomeServe provides this optional service under a delegated authority from AMT Warranty Corp., who is your contract issuer. Any decision regarding participation in this service plan will not affect the price, availability or terms of service from South Jersey Gas. For just 12 in the first year, you needn t worry Service Sentry 200SM We pride ourselves on being first for service and like to give our customers value with every drop, that s why we have teamed up with HomeServe to bring you Plumbing & Drainage Cover. So, whether your problem is big or small you can have peace of mind knowing that expert assistance is just one phone call away and you won t be left with an unexpected repair bill to pay. 10% Discount COVERAGE PLANS INCLUDE off regular price PROTECTION FOR Interior Gas Line Water Heater Repair Home Heating System Heating System Preventive Maintenance Service Sentry 100SM Plans SJNJ1-Sxx-811DA $8.98 per month Service Sentry 200SM Plans SJNJ2-Sxx-811DA $17.07 per month $24.27 per month Service Sentry 400SM Plans SJNJ4-Sxx-811DA BEST VALUE! 10% Discount off regular price 15% Discount off regular price $32.26 per month YES, please sign me up for the Service Sentry Protection Plan from HomeServe I have selected above and include the monthly charge on my South Jersey Gas bill. I confirm that I have read the enclosed Service Sentry Protection Plan General Product Details & Exclusions and meet the eligibility requirements. I understand that the selected Plan will continue to be billed on a monthly basis unless I discontinue my coverage by calling SJE-PLAN. Prices do not include sales tax. SIGNATURE (REQUIRED) SJNJx-Sxx-811DA.indd 1 BENEFITS OF COVER Collapsed drain Large, national network of plumbers Blocked sinks UK helpline available 24/7 Burst internal pipe Cover for up to 4,000 per claim 12 Service Sentry 400SM COVERAGE PLANS INCLUDE PROTECTION FOR BEST VALUE Interior Gas Line 15% DISCOUNT off regular price Water Heater Repair Home Heating System Heating System Preventive Maintenance Interior Dryer Interior Range No limit to the number of claims Repairs guaranteed for 1 year Leaking radiator valves No call out fees. Parts, labour and VAT are all included within the generous claims limit Leaky flexible hose pipe to washing machine for the first year Join us at homeserve.com or call quoting HSSGE1S Non flushing toilet Leaking overflow Seized tap No excess to pay Initial exclusion period, exclusions and terms & conditions apply. Please turn over for more information and details on how to take out cover for <address.line.1xxxxxxxxxxxxxxxxxxxxxx>. Yours sincerely HS06561 Gas Switchers Press insert Free Service A4 (6).indd 1 12/05/ :58 Barbara Julye, Head of Customer Engagement, South Staffs Water South Staffordshire Water Plc, Registered Office: Green Lane, Walsall WS2 7PD. Registered in England No South Staffordshire Water Plc is an appointed representative of HomeServe Membership Ltd, which is authorised and regulated by the Financial Conduct Authority. HomeServe reserves the right to withdraw this promotion at anytime. To pay by direct debit Prepared for SSSPE1BT BEFORE COMPLETING THIS FORM, PLEASE READ THE IMPORTANT INFORMATION SECTION OVERLEAF. <<Mr. Sample A. Sample>> <<Address Line 1 (Service)>> <<Address Line 2 (Service)>> <<City, ST (Service)>> If your details are incorrect, please tick and amend. folds and perf at 3.5 Service Sentry 300SM Plans SJNJ3-Sxx-811DA TYPICAL PROBLEMS When you take out boiler cover with us Only Here are just some of the things this comprehensive plumbing protection would cover you for <title.surnamexxxxxxxxxxxxxxxxxxxxxxx>, even if the problem is caused by wear and tear or accidental damage: SERVICE SENTRY ACCEPTANCE CARD Choose your Service Sentry Protection Plan: Please check the Plan that best meets your needs. Customer and policy growth It goes without saying that you rely on the plumbing and drains in your home in <town> to work day in and day out. But what do you do when they don t? If an internal pipe bursts or a drain blocks, it s not only a nuisance but it could be costly too. folds at 3.5 Complete the Acceptance Card, go to or call SJE-PLAN ( ) today. * Dear <title.surnamexxxxxxxxxxxxxxxxxxxxxxx> COVERAGE PLANS INCLUDE PROTECTION FOR Interior Gas Line Water Heater Repair Home Heating System Service Sentry 300SM From a leaky tap to a blocked drain, let the experts take care of it 14 long Delivering Avoid unexpected covered repair costs with unlimited coverage Prompt, professional service by local, licensed and insured technicians Unlimited service calls Satisfaction guaranteed all repairs guaranteed for one year Services provided by HomeServe, a premier home service and repair company 24-Hour Emergency Repair Hotline number available 365 days a year Service Sentry 100SM COVERAGE PLANS INCLUDE PROTECTION FOR Interior Gas Line Water Heater Repair r n Choose the plan that s right for you Bo 3 iler.7 Co 5 th a ve r e fir m fro st o ye nt m a h Benefits: <Month> 2014 in Get Protection You Can Afford Now, you can have peace of mind and be prepared with a Service Sentry Protection Plan from HomeServe. Coverage is optional and not required by your local utility or community. Each level of coverage gives you protection against the cost of qualifying emergency repairs with no bills to pay, and unlimited service calls annually. In addition, you ll receive access to a 24-Hour Emergency Repair Hotline number and a full one-year guarantee on all covered repairs. Free boiler service <Myriad Pro 9pt> Can you afford a high repair bill? folds in half 7 Dear <<Sample A. Sample>>, What will you do if a major system in your home fails? Making repairs to your heating, hot water, interior gas or electrical lines can cost hundreds of dollars for instance, replacing the blower motor in your heating system can cost more than $600* alone. Can you afford an expensive repair bill? fold <208x397mm> << X X X X X X X X X X X >> CUSTOMER REFERENCE NUMBER SJNJx-Sxx-811DA <Title. Initial. Surname.> <Address Line 1> <Address Line 2> <Address Line 3> <Address Line 4> <Address Line 5> <Address Line 6> <Address Line 7> Reference (for processing use only) Name of account holder(s) Name and full postal address of your Bank or Building Society Branch Sort Code Tel. No. (Mobile) PHONE # Tick to indicate frequency of first year Direct Debit payment and complete the instruction opposite. 1. Direct Debit Annual 7/28/11 3:24 PM Originator s identification number Please fill in this form using a BLACK pen and send it in the Freepost envelope provided or mail to: Customer Services, Freepost RLYC-LXAL-GEEH, Cable Drive, Walsall WS2 7BN. <CACI CUST> Tel. No. (Home) MAILCODE Instruction to your Bank or Building Society to pay by Direct Debit Bank/Building Society account no Direct Debit Quarterly Direct Debit Monthly 1.00 Signature(s) Instruction to your Bank or Building Society. Please pay HomeServe Membership Ltd. Direct Debits from the account detailed in this instruction subject to the safeguards assured by the Direct Debit Guarantee. I understand that this instruction may remain with them and, if so, details will be passed electronically to my Bank/Building Society. Please see overleaf for declaration and other payment methods... D D M M Y Y SSSPE1BT (12) Window 4.5 w x h Window placement.375 L x.3 B <Title.Intial. Surname> <Address Line 1> <Address Line 2> <Address Line 3> <Address Line 4> <Address Line 5> <Address Line 6> <Address Line 7> folds at 3.5 Sales and marketing expertise Flat size: 8.5 x 14 Finished Size:8.5 x 3.5 Fold: Double Parallel Fold (Folds at 7, then 3.5 ) Color Process:4/0 process Insurance minded consumers Significant investment in marketing with a multi-channel approach Optimise partner sales channels, particularly in France and Spain 7 homeserveplc.com

9 Increased marketing investment creates long-term value We use a similar marketing model in our businesses Investment in customer acquisition results in a negative Yr 1 P&L impact All marketing campaigns target at least a three year payback Typically USA campaigns payback in around 2 years or less A direct correlation between marketing investment and new customer wins Acquisition cost Yr 1 Income Yr 5 Income Yr 4 Income Yr 3 Income Yr 2 Maximum investment for 3 year payback Typical US marketing payback Income Yr 1 Cost Customer lifetime income Income is policy price less underwriting and taxes Average customer life of around 5 years, based on 83% retention rate Year 1 income can be negative reflecting introductory offers 8 homeserveplc.com

10 Value driver - Claims and network capability Claims and network capabilty Category Directly Employed Franchisee / Subcontract Delivering UK USA Plumbing & Heating (c.550 plumbers nationwide) (c.150 gas engineers midlands based) Heating & Cooling (c. 150 engineers in NE USA) Gas & Electrics, and other trades All trades via local networks Customer satisfaction and cost effectiveness Spain France All trades via national network including a franchise network All trades via national network Network provides high quality, scalable service delivery with low levels of capital investment Our approach to network management is influenced by volume density in each trade Strategy is to use subcontract engineers unless there is sufficient volume to justify employing engineers directly Local area network managers focus on contractor recruitment and performance Setting up a local network in the USA takes around 8 weeks 9 homeserveplc.com

11 Based on 2,328 real reviews, from customers like you. Value driver - Retain customers to drive recurring income Retention rate 2016 Customer loyalty Delivering 100% 89% 82% 82% 77% 94 % of customers would buy again. 50% by Recurring income 0% France UK USA Spain Increased product usage and positive customer experience drives retention High proportion of annual recurring revenues high levels of continuous and electronic payment minimal switching to competitors 10 homeserveplc.com

12 Typical customer Typical customer Insurance minded Home owner Over 50 years old Generally recruited with a single water, gas or electrical policy and then cross-sold other products Similar demographic across the geographies Digital marketing introducing a younger demographic 11 homeserveplc.com

13 UK HomeServe Background Affinity partners Market place sales channels Founded by current group CEO Richard Harpin in 1993 Originally a joint venture with South Staffordshire Water Company Offering Home Emergency Cover and repairs to Britain s homes 14 water utility partners 92% market coverage 4 Gas boiler manufacturer partners Develop successful marketing campaigns with our partners Main competitor is British Gas (part of Centrica) Integrated marketing channels including direct mail, digital and partner channels One third of policy sales generated through digital channels m Total revenue Operating profit Operating Margin 20% 20% Customers (m) Income per customer ( ) Policies (m) Retention rate 83% 82% Current focus Delivering effortless service to 2.2m customers Good sales and marketing momentum, acquired 0.4m customers in FY16 Strong customer retention rate (82%) Continuous improvements to customer experience with more self serve options Encourage customer feedback through Reevoo, TrustPilot and Rant & Rave Focus on innovation and leading in Connected Home - Leakbot connecting the world s plumbers A growing heating repair service and installation business Total no. of UK households (m) Total no. of affinity partner households (m) homeserveplc.com

14 UK acquisition enhances gas delivery capability A growing heating services business Acquired Home Energy Services Limited in October 2015 Directly employed network enhancing our service capability Selling Tado smart thermostat with boiler services Developing boiler installation business Franchise model 14 established franchisees National coverage during FY18 Smart thermostat at point of installation 13 homeserveplc.com

15 UK Leakbot: connecting the world s plumbing Smart water leak detector developed in house by HomeServe Labs Detects leaks anywhere in the home Solves high value problem for home insurance companies - 650m claims in the UK Global patent-pending 14 homeserveplc.com

16 USA A step change in growth following the acquisition of USP in June HomeServe USA is our most significant opportunity with 134m households Background Launched in the USA in 2003 Operates across North America and Canada During 2016 acquired Utility Service Partners (USP) for $75m bringing 10m partner households, 335 Affinity Partners and 0.4m Customers Strong prospects pipeline adding 2.8m households in 2016 Significant growth opportunity with over 1,400 target utilities m Total revenue Operating profit 6 12 Operating Margin 5% 8% Affinity partners Market place sales channels Over 70 utility affinity partners across North America USP brings over 335 new partners Mix of water, gas and electric utilities HomeServe USA is the market leader Around 40 utilities have their own small policy books We sell our policies principally through direct mail Market using both affinity partner brands and our own HomeServe USA brand Customers (m)* Income per customer ($) Policies (m)* Retention rate 82% 82% Total no. of USA households (m) Total no. of affinity* partner households (m) Current focus Effective integration of USP Accelerate new partner signings Strong pipeline of new partner opportunities Increasing the penetration of existing partners * Includes USP acquired in June homeserveplc.com

17 USA: USP acquisition accelerates US Growth USP gives us: 0.4m customers 335 affinity partners covering 9.9m households in the US & Canada Incremental $15m EBITDA in FY18 Proven cost effective model by which to manage municipal channels Exclusive arrangement with National League of Cities Access to 13m households in Canada CANADA USA USP USP HomeServe USA Utility Service Partners USP 16 homeserveplc.com

18 USA 11 new utility partners in FY16 and strong pipeline FY m households Households 22m FY m households 26m FY m households 29m FY m households 32m USP +9.9m households 43m 2.8m households added in the year Excellent new partner pipeline 17 homeserveplc.com

19 Significant growth opportunity 134m households and 1,445 utilities Energy utilities Water utilities 2,600 Serving < 50,000 households 145 Serving > 50,000 households 1,300 Serving > 20,000 households 52,700 Serving < 20,000 households Households 38m Households 90m Households 65m Households 63m Target Market 18 homeserveplc.com

20 USA - target is 80m households Total propects Live proposals Advanced negotiation Contract signed 50k+ 268m* m m m Prospects Households Prospects Households Prospects Households Partners Households * USA households 134m, serviced by water and energy service providers 19 homeserveplc.com

21 USA target 8m customers and 20% margin Today we could be a low-growth +20% margin business with 2.7m customers but tomorrow we would rather be a 20% margin business with 8m customers March 2016 July 2016 (incl. USP) US in the Future AP Households 32m 43m 80m Penetration 7% 6% 10% Customers 2.3m 2.7m 8.0m Income per Customer $91 - $100 Operating Margin 8% - 20% 20 homeserveplc.com

22 France a high quality business Background Affinity partners Market place sales channels Set-up as Joint venture with Veolia in % Veolia, 49% HomeServe December 2011 HomeServe bought Veolia s 51% for 83m Signed Lyonnaise des Eaux, 2nd largest water provider in 2015 Strong partnership with Veolia Use Veolia s brand to market to both Veolia and non-veolia customers across France During 2015 signed an agreement with Lyonnaise des Eaux (LDE), serving 5.3m households No direct competitors in France A few utilities have their own small policy books We sell our policies using a combination of Direct mail Outbound telephony Sales through Partner Call centres m Total revenue Operating profit Operating Margin 31% 30% Customers (m) Income per customer ( ) Policies (m) Retention rate 89% 89% Total no. of French households (m) Total no. of French partner households (m) Current focus Continued penetration of the Veolia territory Develop marketing activity with LDE Invest in new partners and innovation 21 homeserveplc.com

23 Spain - Reparalia a growing membership business Background Affinity partners Market place sales channels Acquired Reparalia repair network in 2007 Two parts to our Spanish business: Claims handling operation for a number of Spanish insurance companies Membership business selling home assistance policies Continue to work with Spain s largest energy provider, Endesa Prospecting new partnerships No competitors in the plumbing or electric sectors. A few utilities have gas policy books We sell using a combination of Sales through our Partners call centres Outbound telephony m Membership revenue Claims handling Total revenue ( m) Operating profit ( m) 8 10 Operating Margin 8% 10% Customers (m) Policies (m) Total no. of Spanish households (m) Current focus Continued customer growth acquired through our relationship with Endesa Investment in business, developing and bringing on new partners Total no. of Spanish partner households (m) homeserveplc.com

24 New Markets developing and extending into new territories Italy 0.3m customers and into profit Focus on long term agreement and new partnerships New territories Open via a utility joint venture, replicating success in UK and France Prospecting will cover 13 countries: Australia, Brazil, Chile, China, Czech Republic, India, Japan, Mexico, Netherlands, Poland, Turkey, South Korea, Taiwan 23 homeserveplc.com

25 Financials Year end 31 March homeserveplc.com

26 Divisional financial performance Revenue Adjusted operating profit million FY16 FY15 % FY16 FY15 % UK % % USA % % France % % Spain % % Established International % % New Markets % (5.9) (5.9) Inter-segment (6.2) (6.2) Group % % UK profits up 3% to 58.0m Increase in profit in the USA reflecting higher customer numbers with continued investment in marketing and business development Good performance in France, up 7% in local currency but impacted by adverse currency movement Profit progression in Spain reflects an increase in renewals Continued investment in New Markets 25 homeserveplc.com

27 Cash flow performance strong cash generation Total dividend 137m 17.3m 5.3m 3.8m 169.5m 37.6m Cash generated by operations 121.7m 99.4m 64.1m 122.7m 63.7m 5.1m 6.1m Net Debt 31 March 2015 Adjusted EBITDA Non-cash items Working capital Capital expenditure Special dividend Ordinary dividend Tax Acquisitions Interest/ other Net Debt 31 March 2016 Increased debt following payment of special dividend of 99.4m; total dividend 137m Capital investment of 63.7m in technology and partner payments Investment in working capital reflecting continued growth in the business Strong cash conversion at 125% of adjusted operating profit Acquisition of a gas services business in the UK Closing net debt at 169.5m, 1.4x Debt: EBITDA 26 homeserveplc.com

28 Capital investment driving customer service and efficiency FY16 capital expenditure Core customer IT system Partner payments in Spain and France Underlying technology Benefits from our new customer system Single view of the customer Improve marketing effectiveness Reduce cost to serve Capital investment ( m) 58m m m Plan 30m FY15 FY16 FY17 FY m FY19 Continued investment in FY17 and FY18 Complete implementation of core customer system Upgrade claims handling and deployment systems Digital and technology investment Continued partner payments Underlying/ Technology Partner payments Normalised underlying capex of 25m (including 10m partner payments) 27 homeserveplc.com

29 Appendices Divisional KPIs Divisional results local currency Group balance sheet Group cash flow Our financial business model 28 homeserveplc.com

30 Divisional KPIs UK Change Affinity partner households m Customers m % Income per customer % Policies m % Policies per customer % Retention rate % ppt France Change Affinity partner households m Customers m % Income per customer Policies m % Policies per customer % Retention rate % USA Change Affinity partner households* m % Customers* m % Income per customer $ % Policies m % Policies per customer Retention rate % Spain Change Affinity partner households m Customers m % Income per customer % Policies m % Policies per customer Retention rate % *Includes USP acquired in June homeserveplc.com

31 Divisional results local currency UK P&L Change Total revenue m % Operating costs m (233.8) (229.1) +2% Adjusted operating profit m % Adjusted operating margin % 20% 20% USA P&L Change Total revenue $m % Operating costs $m (210.9) (190.1) +11% Adjusted operating profit $m % Adjusted operating profit margin % 8% 5% +3ppts France P&L Change Total revenue m % Operating costs m (73.6) (66.6) +11% Adjusted operating profit m % Adjusted operating profit margin % 30% 31% -1ppts Spain P&L Change Total Revenue m % Operating costs m (118.9) (106.4) +12% Adjusted operating profit m % Adjusted operating profit margin % 10% 8% +2ppts 30 homeserveplc.com

32 Group balance sheet million Non-current assets Goodwill Other intangible assets Property, plant and equipment Investments Deferred tax assets Retirement benefit assets Current assets Inventories Trade and other receivables Cash and cash equivalents Total assets Current liabilities Trade and other payables (360.7) (308.2) Current tax liabilities (7.0) (7.1) Obligations under finance leases (0.9) (0.6) Bank and other loans (25.0) (393.6) (315.9) Net current assets Non-current liabilities Bank and other loans (196.5) (137.6) Other financial liabilities (5.6) (2.1) Deferred tax liabilities (20.5) (18.0) Obligations under finance leases (1.3) (0.6) (223.9) (158.3) Total liabilities (617.5) (474.2) Net assets homeserveplc.com

33 Group cash flow million Operating profit Depreciation, amortisation and other non cash items Decrease in exceptional provision (7.7) Increase in working capital (6.1) (13.2) Cash generated by operations Net interest (3.0) (4.1) Taxation (17.3) (22.8) Capital expenditure (63.7) (52.8) Repayment of finance leases (0.5) (0.3) Free cash flow Purchase of investment (0.5) (4.8) Acquisitions (5.3) (1.1) Equity dividends paid (137.0) (36.9) Issue of shares Net movement in cash and bank borrowings (103.8) (24.4) Impact of foreign exchange (0.7) 2.3 Movement on finance leases (0.9) 0.3 Opening net debt (64.1) (42.3) Closing net debt (169.5) (64.1) 32 homeserveplc.com

34 Our financial business model Our UK business model 2016 (graph not to scale) 82m 11m 293m 200m 58m Gross revenue IPT Underwriting Net revenue 3rd party claims handling and other income Repair network revenue Reported revenue AP comms Marketing costs Call centres Overheads Repair network costs Adjusted operating profit 33 homeserveplc.com

35 This presentation contains certain forward-looking statements, which have been made in good faith, with respect to the financial condition, results of operations, and businesses of HomeServe plc. These statements and forecasts involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors which could cause actual results or developments to differ materially from those expressed or implied by these forward looking statements and forecasts. The statements have been made with reference to forecast price changes, economic conditions, the current regulatory environment and the current interpretations of IFRS applicable to past, current and future periods. Nothing in this presentation should be construed as a profit forecast. 34 homeserveplc.com