Kier Group plc. Questions and Answers on the Rights Issue

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1 If you are in any doubt as to what action you should take, you are recommended to seek your own personal financial advice immediately from your stockbroker, bank, solicitor, accountant, fund manager or other appropriate independent financial adviser, who is authorised under the Financial Services and Markets Act 2000 if you are resident in the UK or, if not, from another appropriately authorised independent financial adviser. Kier Group plc Questions and Answers on the Rights Issue The questions and answers set out in this document are intended to be in general terms only and to provide guidance on the rights issue being undertaken by the Company (the Rights Issue ) and, as such, you should read Part III of the prospectus dated 30 November 2018 (the Prospectus ) for full details of what action you should take. Unless otherwise defined, capitalised terms used herein shall have the meaning given to them in the Prospectus. This note assumes that you hold your shares in certificated form and are not resident the United States or Excluded Territories. This note does not cover the actions that you may take in relation to the Rights Issue in respect of, or the effect of the Rights Issue on, your options under the Company s share option schemes and plans. If you hold options or awards, you will be separately contacted by the administrators of the relevant schemes and plans. In the Schedule to this note we have included worked examples of the effect of the Rights Issue on the Kier share price and have illustrated that the Rights Issue of itself should not reduce the value of your holding in the Company notwithstanding the reduction in the share price. If you have questions in relation to the Rights Issue or the Special Dealing Service that are not answered by this note please call Link Asset Services on Please note that Link Asset Services cannot provide advice on the merits of the Rights Issue nor give financial, tax, investment or legal advice. 1. Why is the Company undertaking a rights issue? As referred to in its pre-agm trading statement of 16 November 2018, the Group s net debt is increasingly a key focus for stakeholders in the industry and the Board recognises the importance of a strong balance sheet to take advantage of opportunities to underpin the Group s future performance. The Board believes that the risks associated with the Group s net debt position have recently increased for the following reasons: although the majority of the Group s banking facilities are committed until 2022, a number of lenders have indicated an intention to reduce their exposure to the construction and related sectors, causing potential contagion effects on other liquidity providers and affecting liquidity in the medium term, which may also have an impact on access to uncommitted facilities and/or future financings; potential clients and customers are increasingly focusing on service providers balance sheets, resulting in procurement processes becoming increasingly rigorous and automated; and

2 the increasing pressure from stakeholders to shorten supply chain payment terms. The Rights Issue is expected to mitigate these risks, whilst also allowing the Company to accelerate its debt reduction programme and increase the strength of its balance sheet. The Directors believe that it is important that the net proceeds of the Rights Issue are reported on the Group s balance sheet as at 31 December 2018, in order to enable the Group to be better positioned, in light of a tighter credit market and more stringent tender pre-qualification requirements, to win new business. 2. What is a rights issue? A rights issue is a way for companies to raise money. Companies do this by giving their existing shareholders a right to buy further shares in proportion to their existing shareholdings. The offer under this Rights Issue is at a price of 409 pence per new Kier share ( New Shares ). If you hold Kier shares on the Rights Issue Record Date (being 30 November 2018) and, subject to certain exceptions, do not have a registered address in the United States or Excluded Territories, you will be entitled to buy New Shares pursuant to the Rights Issue unless you have sold or otherwise transferred those shares (other than ex-rights) prior to 8.00 a.m. (London time) on the Ex-Rights Date (being 5 December 2018). If you hold shares in certificated form, your entitlement will be set out in your Provisional Allotment Letter. The Rights Issue is on the basis of 33 New Shares for every 50 Kier shares held on 30 November New Shares are being offered to Qualifying Shareholders at a discount to the share price on the last dealing day before the details of the Rights Issue were announced on 30 November The Issue Price of 409 pence per New Share represents a 34 per cent. discount to the theoretical ex-rights price ( TERP ). The TERP is the price at which the shares of the Company were expected to trade once the rights to acquire New Shares ( Rights or Nil Paid Rights ) are admitted to trading based on the middle-market price on 29 November 2018 (admission of the Rights took place on 5 December 2018 and from that date the Rights had a trading price that may go up or down). See the Schedule for further details on how the TERP is calculated and what this means for the value of your holding. As a result of the discount and while the market value of Kier shares exceeds the subscription price, the Right to buy the New Shares is potentially valuable. If you are a Qualifying Shareholders and you do not want to buy the New Shares to which you are entitled, you can instead sell or transfer your rights (called Nil Paid Rights) to those New Shares and receive the net proceeds, if any, of the sale or transfer in cash. This is referred to as dealing nil paid. 3. How do I know if I am able to acquire New Shares under the Rights Issue? How will I be informed of how many New Shares I am entitled to buy? If you receive a provisional allotment letter ( PAL ) and are a Qualifying Non-CREST Shareholder with a registered address outside the United States and Excluded Territories (subject to certain exceptions), then you should be eligible to acquire New Shares under the Rights Issue (as long as you have not sold all of your Existing Shares before 8.00 a.m. on the Ex-Rights Date, in which case you will need to follow the instructions on the front page of the Prospectus ).

3 4. I am a Qualifying Shareholder with a registered address in the United Kingdom and I hold my Existing Shares in certificated form. What are my choices and what should I do with the Provisional Allotment Letter? Set out below are four choices that you may make under the Rights Issue, corresponding to the four options on the first page of the PAL. Please note that there are other options available to you in relation to the Rights Issue and the guidance set out below should in no way be interpreted as a recommendation to take one of these actions - you should consult Parts II and III of the Prospectus for full details of the options available to you. Choice (A) - take up all of your Rights If you want to take up all of your Rights, all you need to do is to tick Box A and send the PAL, together with your cheque or banker s draft for the full amount, payable to Link Market Services Limited Re Kier Group plc Rights Issue A/C and crossed A/C Payee only, by post or by hand (during normal business hours only) to Link Asset Services, at Link Asset Services, Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU, to arrive by no later than a.m. on 19 December Within the United Kingdom only, you can use the reply-paid envelope which will be enclosed with the Provisional Allotment Letter. Please note third-party cheques may not be accepted other than building society cheques or banker s drafts. If payment is made by building society cheque (not being drawn on an account of the applicant) or a banker s draft, the building society or bank must endorse on the back of the cheque or draft the applicant s name and the number of an account held in the applicant s name at the building society or bank, such endorsement being validated by a stamp and an authorised signature. The account name should be the same as that shown on the application. A definitive share certificate will then be sent to you for the New Shares that you take up. Your definitive share certificate for New Shares is expected to be despatched to you by no later than 3 January You will need your Provisional Allotment Letter to be returned to you if you want to deal in your Fully Paid Rights. Your Provisional Allotment Letter will not be returned to you unless you tick the appropriate box on the Provisional Allotment Letter. Choice (B) take up some of your Rights If you want to take up some but not all of your Rights and wish to sell some or all of those you do not want to take up, you should first apply to have your Provisional Allotment Letter split by completing Form X on the Provisional Allotment Letter (unless you wish to use the Special Dealing Service), and returning it by post or by hand (during normal business hours only) to Link Asset Services, Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU, to be received by 3.00 p.m. on 17 December 2018, together with a covering letter stating the number of split Provisional Allotment Letters required and the number of Nil Paid Rights to be comprised in each split Provisional Allotment Letter. You should then deliver the split Provisional Allotment Letter representing the New Shares that you wish to accept together with your cheque or banker s draft to Link Asset Services at Link Asset Services, Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU to be received by a.m. on 19 December 2018.Please note that your ability to sell your Rights

4 is dependent on demand for such Rights and that the price for Nil Paid Rights may fluctuate. Please ensure that you allow enough time so as to enable the person acquiring your Rights to take all necessary steps in connection with taking up the entitlement prior to a.m. on 19 December Choice (C) sell all of your Rights If you want to sell all of your Rights other than through the Special Dealing Service, you should complete and sign Form X on the Provisional Allotment Letter (if it is not already marked Original Duly Renounced ) and pass the entire letter to your stockbroker, bank manager or other appropriate financial adviser or to the transferee (provided they are not in the United States or the Excluded Territories). Please note that your ability to sell your Rights is dependent on demand for such Rights and that the price for Nil Paid Rights may fluctuate. Please ensure that you allow enough time so as to enable the person acquiring your Rights to take all necessary steps in connection with taking up the entitlement prior to a.m. on 19 December Alternatively, if you are an individual certificated shareholder whose registered address is in the United Kingdom or any other EEA country, you can tick Box C and use the Special Dealing Service and Link Asset Services will sell your Rights on your behalf. If you wish to use the Special Dealing Service, please fully complete part 3 of the PAL and send the original signed PAL must be returned to Link Asset Services by no later than a.m. on 13 December You will incur dealing charges as a result of the underwriters or Link Asset Services selling your Rights (Link Asset Services will charge a commission of 0.50% of the gross proceeds of sale subject to a minimum of 20 per holding). If the amount due to you is less than 5.00 it will be aggregated and donated to charity. You should be aware that by returning your Provisional Allotment Letter and electing to use the Special Dealing Service, you will be deemed to be agreeing to the terms and conditions of the Special Dealing Service and make a legally binding agreement with Link Asset Services on those terms. The terms and conditions of the Special Dealing Service will be posted to you together with the Provisional Allotment Letter if you hold your Shares in certificated form. If you have any questions relating to the Special Dealing Service, please telephone Link Asset Services on Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. The helpline is open between 9.00 a.m. and 5.30 p.m., Monday to Friday excluding public holidays in England and Wales. Please note that Link Asset Services cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes. Choice (D) cashless take-up or tail-swallowing This is known as a cashless take-up or tail-swallowing. You should contact your stockbroker or financial adviser who may be able to help if you wish to do this. Alternatively, you can use the Special Dealing Service. If you want to effect a Cashless Take-up and you are an individual certificated shareholder whose registered address is in the United Kingdom or any other EEA country, you should tick Box D on the

5 front page of your PAL and fully complete part 3 of the PAL, sign and date it and return the Provisional Allotment Letter to Link Asset Services by no later than a.m. on 13 December Link Asset Services will charge a commission of 0.50 per cent. of the gross proceeds of any sale subject to a minimum of 20 per holding. You should be aware that by returning your Provisional Allotment Letter and electing to use the Special Dealing Service, you will be deemed to be agreeing to the terms and conditions of the Special Dealing Service and make a legally binding agreement with Link Asset Services on those terms. The terms and conditions of the Special Dealing Service will be posted to you together with the Provisional Allotment Letter if you hold your Shares in certificated form. If you have any questions relating to the Special Dealing Service, please telephone Link Asset Services on Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. The helpline is open between 9.00 a.m. and 5.30 p.m., Monday to Friday excluding public holidays in England and Wales. Please note that Link Asset Services cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes. 5. Do I need to seek clearance from the Company to participate in the Rights Issue or notify it once I have done so? You do not need to seek clearance from the Company to take up your Rights under the Rights Issue or to allow such Rights to lapse or to tail-swallow (see questions 4 and 7). You will only need to notify the Company of your participation in the Rights Issue if you are PDMR (a senior person with regular access to inside information). You will have been notified if you are a PDMR. 6. What happens if I do nothing? If you do nothing, the Company has made arrangements to try to find investors to take up your Rights and the Rights of others who have not taken them up. If investors agree to pay a premium above the issue price and related expenses, you will receive your share of the premium (after tax deductions). If investors are not willing to pay a premium, you will not receive any payment in respect of your Rights. 7. What is tail-swallowing? The term tail-swallow describes a process by which you can calculate how many Rights you need to sell in order to raise sufficient funds to take up the remainder of your Rights without having to provide your own funds. The number of Rights to be sold depends on the price at which the rights are trading, and this may fluctuate. For example, if you hold 100 Kier shares on the Record Date, you will be offered Rights in respect of 66 new shares (you will not receive fractional entitlements to buy Kier shares under the Rights Issue). The total cost of taking up all your Rights (at the 409 pence subscription price) would be If instead you were to sell 50 Rights then (for this example we have assumed a per Right value / price of 50 pence however, because the Rights are traded independently, the value / price will fluctuate) that would raise 25 (being 50 multiplied by 50 pence). In practice, expenses will be deducted from

6 the amount raised but we have assumed for the purposes of this example that no expenses are deducted. The proceeds of the sale of those Rights could then be used to take up your remaining Rights and acquire 6 new Kier shares at the 409 pence subscription price (which would cost 24.54). To do this you would need to instruct your broker to sell such number of Rights at the prevailing market price at the time of sale. Alternatively, if you are an individual certificated shareholder whose registered address is in the United Kingdom or any other country in the European Economic Area, you can use the Special Dealing Service offered by Link Asset Services to sell a sufficient number of Rights to raise money to take up the remainder. Further details are set out in Part III of the Prospectus and are included in the Provisional Allotment Letters. If you are in any doubt as to the consequences of your action you are recommended to seek your own tax and other advice as appropriate. 8. If I take up my Rights, when will I receive the certificate representing my New Shares? If you take up your rights under the Rights Issue, share certificates for the New Shares are expected to be posted by no later than 3 January What if the number of New Shares to which I am entitled is not a whole number? Am I entitled to fractions of New Shares? No - you will not be provisionally allotted a New Share in respect of the fraction of a New Share and your entitlement will be rounded down to the nearest whole number. The New Shares representing the aggregated fractions that would otherwise be allotted to Shareholders will be issued in the market nil paid for the benefit of the Company. 10. Will I be taxed if I take up or sell my Rights or if my Rights are sold on my behalf? If you are resident in the UK for tax purposes, it is not currently expected that you will have to pay UK tax when you take up your Rights, although the position is not entirely free from doubt, and the Rights Issue will affect the amount of UK tax you may pay when you subsequently sell your Kier shares. However, assuming that you hold your shares as an investment, rather than for the purposes of a trade, you may (subject to any available exemption or relief) be subject to tax on any proceeds that you receive from the sale of your Rights as a chargeable gain. Similarly, assuming that you hold your Kier shares as an investment, if you allow, or are deemed to allow, your rights to lapse and receive a cash payment in respect of them, you may (subject to any available exemption or relief) be subject to tax on any proceeds as a chargeable gain. However, if the proceeds are small as compared to the value of the existing shares in respect of which the Rights arose (broadly, the proceeds do not exceed 3,000 or 5 per cent. of the value of the existing shares), a tax charge should not generally arise at that time. Rather, the proceeds will be deducted from the base cost of the holding of the existing shares for the purposes of computing a chargeable gain or allowable loss on a subsequent disposal. This treatment will not apply if the proceeds are greater than the base cost of the holding of existing shares.

7 Further information for shareholders who are resident in the UK for tax purposes is contained in Part X of the Prospectus. This information is intended as a general guide to the current tax position in the United Kingdom and Qualifying Shareholders should consult their own tax advisers regarding the tax treatment of the Rights Issue in light of their own circumstances. Qualifying Shareholders who are in any doubt as to their tax position, or who are subject to tax in any other jurisdiction, should consult an appropriate professional adviser as soon as possible. Please note that the Shareholder Helpline will not be able to assist you with taxation issues. 11. Will the Rights Issue affect the future dividends the Company pays? Following completion of the Rights Issue, future dividend payments will be adjusted for the Rights Issue, taking into account the issued share capital of the Company as enlarged by the New Shares. FURTHER QUESTIONS You should contact Link Asset Services on if: You have questions about the Rights Issue that have not been answered by this note You have questions about the Special Dealing Service You do not receive a PAL but think that you should have received one You are concerned about the figure in the PAL or otherwise concerned that your holding of Kier shares is incorrect The helpline is open between 9.00 a.m. and 5.30 p.m., Monday to Friday excluding public holidays in England and Wales. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. Please note that Link Asset Services cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes. You will not receive a PAL if: Your name did not appear on the register of members of the Company at close of business on30 November 2018 if you hold shares through a broker or a nominee it is likely that the name of such person will appear on the register and you should speak to your broker or nominee as soon as possible if they have not yet contacted you You do not hold your shares in certificated form (for example, they are held in CREST)

8 SCHEDULE Market capitalisation of the Company as at 29 November 2018 As at the date of announcement of the Rights Issue there were 97,660,163 shares in the Company in issue and the closing middle-market price as at the last day of trading prior to the announcement was pence. The market capitalisation of the Company is calculated by multiplying the share price x the number of shares in issue, so on 29 November2018 the Company s market capitalisation was million. Amount to be raised pursuant to the Rights Issue Under the Rights Issue, the Company is issuing 64,455,707 new shares at a subscription price of 409 pence per share so the Rights Issue will raise million. Value of the Company ex-rights Adding the value of the Company as at 29 November 2018 ( million) to the amount to be raised pursuant to the Rights Issue ( million) gives the market theoretical value of the Company post the Rights Issue being million. Calculating the theoretical ex-rights price or TERP The value of the Company s shares following the start of the Rights Issue trading period can be calculated by taking the new value of the Company ( million) and dividing it by the new number of shares that will be in issue (162,115,870 (the 97,660,163 shares in issue on 29 November 2018 plus the 64,455,707 shares to be issued pursuant to the Rights Issue) which gives a new theoretical share price of pence. This is the theoretical new value of the Kier shares on the first day of the Rights Issue trading period but the actual value of the Kier shares from 5 December 2018 will be affected in the normal way that the Kier share price is affected. Why a shareholder does not lose value as a result of the drop in the share price To show that a shareholder does not lose value as a result of the Rights Issue we need to assume that Kier share price has stayed at pence since 28 November Movements in the share price since then will affect the value of a holding. Under the Rights Issue a shareholder receives 33 Rights to acquire new Kier shares for each 50 shares he or she holds on the record date. Taking the simple example of a shareholder holding 100 shares, those shares were worth at the pence share price. At the start of the Rights Issue trading period the value of Kier shares will be rebased to an amount equal to the TERP (subject to normal fluctuations). So the 100 shares held by the shareholder would now be worth (the pence TERP multiplied by 100). However, that shareholder also receives the Right to acquire 166 new Kier shares at the 409 pence subscription price. In theory, if the shareholder were to sell those Rights in the market they would raise an amount per Right equal to the market price of the shares less the subscription price.

9 Assuming the price of Kier share is the TERP then each Right would be worth pence (752.5 pence minus pence) so 100 Rights would be worth We have rounded some of the numbers above but adding the value of the Rights ( 136.5) to the new value of the 100 shares ( 615.9) gets you back to the value that the 100 shares were worth based on the pence share price. Obviously, what happens next depends on what that shareholder chooses to do i.e. subscribe for the rights, not subscribe, sell some or all of the nil paid rights, etc as set out in the prospectus. Actual ex-rights price The calculations above use the TERP which is the new share price at the start of the rights issue trading period based on the pence share price but absent any external factors. However, in reality the Kier share price will fluctuate from 29 November 2018 in the normal manner. The Kier mid-market share price for 4 December 2018 was pence which is lower than the TERP and reflects the decrease in the share price since 29 November 2018 when the TERP was calculated. The Rights now have a trading price and that, and the Kier share price, may go up or down. In broad terms, the value of your holding is equal to the value of the existing shares that you hold plus the value of the Rights that you have (and, again in broad terms, the value of your Rights is equal to the market price of the Kier shares minus the 409 pence subscription price).