Half Yearly Report

24 August 2012

Berendsen plc Interim Results 

Announcement for the Six Months Ended 30 June 2012

*before £nil (£5.9 million) exceptional items and £11.9 million (£12.1 million) amortisation of customer contracts

**Underlying (at constant exchange rates and excluding acquisitions)

Operational Highlights

·; Strategic Review initiatives largely embedded in the new business line divisions

·; Higher growth levels in Core Growth with particularly good performance in Facility

·; Increase in margin of Manage for Value with flat linen outside the UK making strong progress

·; 119% of adjusted profit after tax converted to free cash flow

·; Interim dividend up 8% in line with our progressive dividend policy

Iain Ferguson, Chairman of Berendsen, commented

"We are pleased to report a good set of results for the period with the new business line structure operating fully from the start of the year and continued momentum towards achieving our strategic objectives. The board expects first half trading trends to continue for the balance of 2012, resulting in good year on year progress in line with our expectations".

For further information contact

Analyst Meeting

The company will be presenting to a meeting of analysts at 9.00am today. A live audiocast of the presentation and questions will be available on the company's website on www.berendsen.com. Questions can only be taken at the meeting.

Results for the six months ended 30th June 2012

We are pleased to report a good set of results for the period, with continued momentum towards achieving our strategic objectives. Reported revenues from Core Growth businesses were virtually unchanged compared to the same period last year but at the underlying level (excluding acquisitions and currency impacts) grew by 3%. More significantly, adjusted operating profit in these businesses was up nearly 7% and excluding acquisitions and adverse currency impacts, increased by 9%. The adjusted operating margin for the Group increased 90 bps on the first half of last year to 13.3%. Adjusted earnings per share for the Group were up 7% to 22.3p from 20.8p last year. The Board is recommending an interim dividend of 8.0p (7.4p), an increase of 8%.

We continue to deliver strong free cash flow in line with our strategic objective of converting more than 100% of our profits to cash. Free cash flow increased 19% to £44.7 million as a result of our continued focus and the capital efficiency programme we are running, and net debt reduced from £513.6 million at the end of 2011 to £507.1 million at 30th June 2012.

We have made further good progress with the initiatives arising from the Strategic Review we set out in November 2010. The change to a new business lines management structure has been executed well, with the new management teams having been fully in place from the start of 2012. Our initiatives to increase revenue growth, deliver greater operational leverage and generate high levels of cash, as well as to increase our returns on invested capital are largely embedded within the business lines. These initiatives are discussed in the business line performance reviews below.

Results

Revenue at £488.2 million in the period was down 2% compared to last year (£495.9 million). Adjusted operating profit (before exceptional items and amortisation of customer contracts) was £65.0 million, up 6% from £61.6 million last year. Excluding the negative impact of currency translation, which reduced revenue and adjusted operating profit by £15.3 million and £2.6 million respectively compared to last year, and a small contribution from acquisitions, underlying revenue grew 2% and adjusted operating profit grew 8%. Since the end of the period we have seen a further weakening of the Euro against Sterling compared to the average rates for the first half.

Our net finance expense was £13.5 million, a small increase on the £13.2 million last year. We expect the interest charge to be similar in the second half. Adjusted profit before taxation was £51.5 million, 6% above last year (£48.4 million) and adjusted earnings per share were up 7% to 22.3 pence (20.8 pence). Our effective tax rate on adjusted profit before taxation was 26.5% and we expect the tax rate for the full year to be maintained at this level.

There were no exceptional items in the period as most of the change programmes identified in our Strategic Review have been completed. Last half year we incurred £5.9 million of exceptional costs, relating primarily to the restructuring of our Irish and German Healthcare businesses. Amortisation of acquired customer contracts was £11.9 million, similar to last year (£12.1 million). Operating profit after these items was £53.1 million (£43.6 million) and profit before taxation was £39.6 million (£30.4 million). Basic earnings per share were 17.1 pence compared with 12.9 pence in the first half of 2011.

Our net capital expenditure was similar to last year at £78.0 million (£79.4 million) and below depreciation of £83.1 million (£86.0 million). Plant investments amounted to £10.0 million, below the £16.3 million of last year with funding directed towards maintaining our well invested operations, which have an excellent footprint across the markets we serve. Investment in textiles increased to £68.4 million (£64.2 million) reflecting a good level of new contract activity. Overall, we expect net capital expenditure to be similar to depreciation in the second half of the year.

Free cash flow was strong at £44.7 million (£37.6 million), a conversion of 119% of the adjusted profit after tax of the Group. We have contributed £2.5 million to the UK pension fund in the period and intend to contribute a similar amount in the second half of the year. At 30th June 2012 the pension accounting deficit for the Group was £32.9 million (£28.2 million at the end of 2011). Acquisitions, including deferred consideration and financial liabilities assumed, amounted to £10.2 million in the period primarily related to the cleanroom acquisition we made in Germany. The impact of exchange rate movements decreased net borrowings by £5.5 million and, after dividends paid of £27.1 million, net borrowings at 30th June 2012 were £507.1 million (31st December 2011: £513.6 million). The total facilities available to the Group are £781.8 million with our new RCF and our private placement notes extending from 2014 to 2021.

The interim financial information for the six months ended 30th June 2012 has been reviewed by PricewaterhouseCoopers LLP.

Business Line Performance

In line with our Strategic Review, we reorganised the Group's structure into Business Lines with effect from 1st January 2012.

Below we report the results for the six months ended 30th June 2012 on the new business line segmentation.

*before exceptional items and amortisation of customer contracts

CORE GROWTH

Workwear

Revenue was flat in the period at £143.0 million (£143.0 million), with adjusted operating profit 2% ahead at £23.1 million (£22.6 million). Underlying constant currency growth was 3% for revenue and 4% for adjusted operating profit. The adjusted operating margin increased 40bps to 16.2%.

We made good progress in Sweden and Holland, countries where our workwear business model is well developed, with higher than average levels of revenue growth translating into margin improvements and a good operating profit performance. Denmark, where we also have a well established business, although slightly smaller, is feeling some economic headwinds. The level of new sales, in particular to virgin customers who have not had a full maintenance contract previously, is encouraging in all these territories reflecting the focus on growth within the business. We have seen improvements in the efficiency of our sales force having made some reductions at the end of last year.

We are focused on transferring the best practices from these markets into our German business, which has grown significantly in recent years primarily through acquisition, and into the UK, where the opportunities to innovate in our operations and our service offerings are significant. Our focus is on improving efficiency levels towards those we have in Holland and Denmark, through advanced process changes, improved sourcing and management of textiles and use of online customer service to improve customer experience and reduce costs. We have introduced new workwear collections into these markets and have been encouraged by the contract sales these have delivered so far. In Germany, we have gained a number of significant contracts, on which we will gradually commence service through 2012. The levels of growth and profitability in these two markets are currently lower than the average for the business line and we are encouraged by the initial strides we are making towards improving performance.

Facility

As we indicated at the time of our Strategic Review, the opportunities for revenue growth are highest in this business line and this, coupled with the high levels of operating leverage, and lower capital requirements, make it a very attractive segment of our business. Revenue was 2% ahead of last year at £106.1 million (£104.0 million) and adjusted operating profit at £25.7 million (£23.1 million) was up 11% at actual exchange rates. The adjusted operating profit margin improved to 24.2% from 22.2%. On an underlying constant currency basis, revenue grew 5% and adjusted operating profit was up 16%.

Our mat and washroom businesses in Scandinavia delivered good revenue and operating profit growth. The level of new contract sales is ahead of our expectations, driven by an increase in sales efficiency and we are clearly benefitting from the more focused business line organisation, which enables us to drive new initiatives and to benchmark performance much more effectively. We are also able to respond more quickly to the needs of individual territories and to direct resources accordingly. We have made operational progress in the washroom business following the acquisitions we made last year to become market leader. We see a good opportunity to grow margins closer to those of the more developed mat business. There was also good progress in Poland where we delivered double-digit revenue growth and further margin improvement.

Our cleanroom business performed very well, with double digit revenue and adjusted operating profit growth through a combination of service extensions and new customers. In April 2012, we acquired Decontam, a textile cleanroom business in Germany, which gives us a local operating presence in this segment for the first time and follows a number of key customer wins in Germany.

UK Flat Linen

Revenue was 1% below last year at £95.0 million (£96.4 million) but adjusted operating profit was 6% ahead at £10.7 million (£10.1 million). The adjusted operating margin increased 80bps to 11.3%.

Like for like volumes in the larger groups in Hotels was broadly flat year on year, but up 2% in Healthcare, and we have gained an encouraging level of new contract wins in both businesses. The reduction in revenue reflects a 26 week period in the current year as opposed to a 27 week period for the first half of last year. Adjusting for this underlying revenue was up 2%. We experienced some contract losses in the first half at the smaller end of our customer base in Hotels, which held back revenue growth, but we were pleased with the improvement in operating margin, which was driven in part by the operating efficiencies we achieved. We have directed more capacity to the Healthcare part of the business, where the market is currently stronger, and there has been a further focus on improved management of textiles within the business.

MANAGE FOR VALUE

Flat Linen Outside the UK

Our flat linen businesses outside the UK have responded well to the strategic challenges of improving operating margins and generating cash. Revenue was down 7% at £109.5 million (£117.2 million) but adjusted operating profit increased 11% to £9.4 million (£8.5 million). The adjusted operating margin increased 130 bps to 8.6% (7.3%).

Underlying revenue was broadly unchanged in the Scandinavian flat linen businesses but we saw reduced volumes in Ireland as a result of the difficult economic environment. Revenue in our German and Austrian Healthcare businesses was also down but this resulted primarily from the plant closure we made last year. We are benefiting from the restructuring we undertook last year, with our Scandinavian and Irish businesses constituting the bulk of the margin improvement this year. The adjusted operating margin was maintained in Germany and Austria.

Clinical Solutions and Decontamination

Revenue was largely unchanged at £34.6 million (£35.3 million) with adjusted operating profit of £0.9 million compared to £1.9 million last year.

As previously reported we encountered operational issues in our sterile consumables business last year which continued in the first half of 2012. We have appointed new management to the business, which is focused on improving the level of sales to existing contract relationships, pricing and commercial terms in contracts with low profitability and delivering operational efficiencies. Our reusable sterile textile business continues to perform well.

Losses on our decontamination contracts, for which we made provision at the end of 2010, were reduced to £1.5 million (£2.5 million). This was driven by good operational improvements and we are pleased with the progress that we have made in providing a robust and valuable service to our customers. Importantly, we have made a number of changes to the way we operate these contracts, identified in our turnaround plan, to move this business towards financial sustainability. In addition, we have signed a significant new third party contract that will provide additional volume to two of our plants. Overall we are on track with our turnaround plan.

Summary and Outlook for the Group

Implementation of the Strategic Review we announced in November 2010 has developed well and our medium and longer term ambitions for the Group remain clear, as the benefits of the various initiatives increasingly materialise. The Board expects first half trading trends to continue for the balance of 2012, resulting in good year on year progress in line with our expectations.

Principal Risks and Uncertainties

Details of our principal risks and uncertainties were previously disclosed on pages 32 to 39 of the 2011 Annual Report and Accounts. In that disclosure we referred to our mitigation procedures which remain relevant to the risks outlined below.

Taking into account our strategic objectives outlined on page 8 of the 2011 Annual Report and Accounts, some or all of the principal risks and uncertainties summarised below have the potential to impact our results or financial position during the remaining six months of the financial year:

Delivering sustainable organic growth

·; Our core growth business areas do not sustain revenue growth rates of GDP + 1% - 2%.

·; Further economic downturn (low or negative GDP growth in Europe).

Maintaining a sound financial position/improving capital efficiency

·; Movements in exchange rates adversely affect the translation of our group results into UK sterling.

·; Return on Invested Capital (ROIC) is not sufficiently greater than the group's cost of capital.

·; Failure to improve the performance of the Decontamination business during 2012.

Improving financial returns by leveraging operational efficiency

·; Unforeseen loss of capacity.

·; One of our major textile suppliers is unexpectedly unable to meet our textile requirements, or the pricing of cotton significantly destabilises buying patterns and increases input costs.

Maintaining a motivated workforce driven by an experienced management team

·; Inadequate talent management and inability to recruit and retain sufficiently qualified and experienced senior management.

Maintaining health and safety and other governance matters as a priority

·; Breach of health and safety regulations or lack of cleanliness of staff and/or facilities.

Reducing our impact on the environment

·; Non-compliance with Group Corporate (CR) policies including environmental policy.

·; Discovery of historic environmental issues at laundries.

The potential impact of these risks and the mitigation activities in place are detailed on pages 34 to 39 of our 2011 Annual Report and Accounts. There has been no significant change in the Group's principal risks and uncertainties since 23 February 2012.

Uncertainty in global economic and credit market conditions continues to be a major challenge to businesses globally. This is particularly true in Europe where there remain concerns over increasing government debt levels, the social impacts of fiscal austerity measures, and the possible implications of currency re-denomination. Although we currently have no material operating company, customer or supplier related exposures in what are regarded as the higher risk European countries, we remain aware of the potential risks associated with a continuation or worsening of the current unfavourable economic and credit conditions.

CONSOLIDATED INTERIM INCOME STATEMENTFor the six months ended 30th June 2012

CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOMEFor the six months ended 30th June 2012

CONSOLIDATED INTERIM BALANCE SHEETAs at 30th June 2012

CONSOLIDATED INTERIM CASH FLOW STATEMENTFor the six months ended 30th June 2012

CONSOLIDATED STATEMENT OF CHANGES IN TOTAL EQUITYAs at 30th June 2012

CONSOLIDATED STATEMENT OF CHANGES IN TOTAL EQUITY continued

As at 30th June 2012

At 30th June 2012 the company held nil (30th June 2011: 1,025,000) treasury shares as these shares were transferred to the Employee Benefit Trust in 2011.

The group has an Employee Benefit Trust to administer share plans and to acquire company shares, using funds contributed by the group, to meet commitments to group employees. At 30th June 2012, the Trust held 2,976,132 (30th June 2011: 1,890,297) shares.

NOTES TO THE INTERIM RESULTS

1 Basis of preparation

This condensed consolidated interim financial information does not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31st December 2011 were approved by the Board of directors on 23rd February 2012 and delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain a statement under Section 498 of the Companies Act 2006.

This condensed consolidated interim financial information has been reviewed, not audited.

This condensed consolidated interim financial information for the six months ended 30th June 2012 has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Services Authority and with IAS 34, 'Interim financial reporting' as adopted by the European Union. The condensed consolidated interim financial information should be read in conjunction with the annual financial statements for the year ended 31st December 2011, which have been prepared in accordance with IFRSs as adopted by the European Union.

1.1 Going - concern basis

The group meets its day-to-day working capital requirements through its bank facilities. The current economic conditions continue to create uncertainty particularly over (a) the level of demand for the group's products; and (b) the availability of bank finance for the foreseeable future. The group's forecasts and projections, taking account of reasonably possible changes in trading performance, show that the group should be able to operate within the level of its current facilities. After making enquiries, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. The group therefore continues to adopt the going concern basis in preparing its consolidated interim financial statements.

On 29th July 2011, the group concluded the renegotiation of its Revolving Credit Facilities (RCF) with a new Euro 535 million facility extending out to July 2016 replacing existing facilities which were due to expire in June 2012. The total facilities available to the group are £781.8 million with the new RCF and private placement notes extending from 2014 to 2021. 

2 Accounting policies

Except as described below, the accounting policies and key assumptions and sources of estimation uncertainty applied are consistent with those of the annual financial statements for the year ended 31st December 2011, as described in those annual financial statements.

Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual profit or loss.

The following new standards, amendments to standards and interpretations are mandatory for the first time for the financial year beginning 1st January 2012, but have no material impact on the group:

·; Amendment to IFRS 7 Financial instruments: Disclosures

·; Amendment to IFRS 1 'First time adoption' (subject to EU endorsement)

·; Amendment to IAS 12 'Income taxes' (subject to EU endorsement)

The following new standards, amendments to standards and interpretations have been issued, but are not effective for the financial year beginning 1 January 2012 and have not been early adopted. Their expected impact is still being assessed in detail by management:

·; Amendment to IAS 19, 'Employee benefits'

·; Amendment to IAS 1 "Financial statement presentation"

·; IFRS 9 "Financial instruments"

·; IFRS 10 'Consolidated financial statements'

·; IFRS 11 'Joint arrangements'

·; IFRS 12 'Disclosure of interests in other entities'

·; IFRS 13 'Fair value measurement' IFRS 1, 'First time adoption'

3 Segmental information

Following the strategic review of the business presented in November 2010, from 1st January 2012 the Berendsen plc executive board will manage the business under the business lines of Workwear, Facility, UK Flat Linen, Flat Linen outside UK and Clinical Solutions and Decontamination.

The results for the six months ended 30th June 2012 under the new business line segment are as follows:

Capital expenditure comprises additions to property, plant and equipment and intangible assets, including additions resulting from acquisitions through business combinations. The acquisitions in the period were across different business lines.

Sales between segments are carried out at arm's length. The company is domiciled in the UK.

Analysis of revenue by category:

Analysis of revenue by country:

3 Segmental information continued

The segment results for the six months ended 30th June 2011 were as follows:

The segment assets and liabilities at 30th June 2012 are as follows:

The segment assets and liabilities at 30th June 2011 were as follows:

The segment assets and liabilities at 31st December 2011 were as follows:

Unallocated assets include segment assets for corporate entities and derivative financial instruments.

Unallocated liabilities include segment liabilities for corporate entities and derivative financial instruments.

4 Exceptional items

Included within operating profit are the following items which the group considers to be exceptional:

In 2011, the restructuring costs related primarily to the closure of a German Healthcare plant and concluded the restructuring undertaken following the loss of a significant contract in 2010. The tax credit on this was £0.8 million.

In 2011, the group incurred costs of £7.9 million associated with the implementation of its strategic review announced in November 2010. This included £5.4 million of restructuring costs incurred in the Irish and Scandinavia flat linen businesses, which we are Managing for Value and in rationalising the salesforce in our Core Growth business. This also included £2.5 million of costs in managing the change programmes identified in our Strategic Review such as the capital efficiency and procurement review programmes. The tax credit on these costs was £0.7 million.

In 2011, we incurred net transaction costs of £1.2 million on acquisitions and similar initiatives. There was no tax charge on these items.

In 2011, the group recognised a £3.1 million credit for changes in the management and funding arrangements for long term employee benefits. This included a number of countries and included the impact of closing to future accrual the UK defined benefit pension scheme. The scheme was closed to new entrants in 2003 and by closing to future accrual; the scheme is in line with standard UK practice. There was a tax charge of £0.9 million.

During 2011, a net profit was realised on property disposals primarily in the UK. There was no tax charge on this.

All other exceptional items have been recorded in other income or other expenses respectively.

5 Seasonality

The hotels and restaurants markets are subject to some seasonal fluctuation. Higher revenues in the second and third quarters of the year are expected due to increased demand during the holiday season. Other than this, there is no significant seasonality or cyclicality affecting the interim result of the operations.

6 Taxation

The income tax expense is based on an effective annual tax rate estimated individually for each tax jurisdiction in which the group operates and applied to the pre-tax profit, excluding exceptional items, of the relevant entity. Tax on exceptional items is calculated separately and specifically on those items and is disclosed in note 4. The effective tax rate on adjusted profit before tax is 26.5% (30th June 2011: 26.5%).

7 Dividends

A final dividend relating to the year ended 31st December 2011 amounting to £27.1 million was paid in May 2012 (2010: £24.8 million), representing 16.0 pence per share (2011: 14.7 pence).

In addition, an interim dividend in respect of the financial year ending 31st December 2012 of 8.0 pence per ordinary share was proposed by the board of directors on 23rd August 2012. It is payable on 11th October 2012 to shareholders who are on the register at 14th September 2012. This interim dividend amounting to £13.5 million is not reflected in these financial statements as it does not represent a liability at 30th June 2012. It will be recognised in shareholders' equity in the year to 31 December 2012.

8 Earnings per ordinary share

Basic earnings per ordinary share are based on the profit for the period attributable to the equity holders and a weighted average of 168,787,580 (30th June 2011: 168,847,643) ordinary shares in issue during the period and exclude the treasury shares and shares in the Employee Benefit Trust.

Diluted earnings per share are based on the group profit for the period and a weighted average of ordinary shares in issue during the period calculated as follows:

An adjusted earnings per ordinary share figure has been presented to eliminate the effects of exceptional items and amortisation of customer contracts and intellectual property rights and non-recurring tax items.

This presentation shows the trend in earnings per ordinary share that is attributable to the underlying trading activities of the total group.

The reconciliation between the basic and adjusted figures for the total group is as follows:

9 Property, plant and equipment

During the six months ended 30th June 2012, the group acquired assets with a cost of £79.9 million (30th June 2011: £81.8 million), not including property, plant and equipment acquired through business combinations.

Assets with a net book value of £1.1 million were disposed of by the group during the six months ended 30th June 2012 (30th June 2011: £1.7 million) resulting in a net gain on disposal of £0.5 million (30th June 2011: £0.4 million).

The group's capital commitments at 30th June 2012 were £9.0 million (30th June 2011: £6.3 million).

10 Provisions

Vacant property provisions are made in respect of vacant and partly sub-let leasehold properties to the extent that the future rental payments are expected to exceed future rental income. It is further assumed, where reasonable, that the properties will be able to be sub-let beyond the present sub-let lease agreements.

Restructuring provisions comprise largely of employee termination payments. Provisions are not recognised for future operating losses.

The group has outstanding warranties, indemnities and guarantees given previously on a number of properties operated by businesses which have been disposed. The majority of these expire in 2017 with the remaining expiring by 2022.

A provision for £9.9 million was recognised for the two decontamination contracts which were considered to be onerous as at 31st December 2010. The provision is being utilised principally in the first two years, and the contracts are not expected to be loss-making after four years. The utilisation of the provision is shown in other operating expenses in the income statement. If this assumption is not achieved, further provisioning may be required.

11 Cash generated from operations

Reconciliation of profit for the period to cash generated from operations.

In the cash flow statement, proceeds from sale of property (including assets held for sale), plant and equipment comprise:

12 Reconciliation of net cash flow to movement in net debt

13 Acquisitions

During the six months ended 30th June 2012, the group acquired the trade and assets of seven textile maintenance businesses.

Details of the provisional fair values of the assets and liabilities are set out below:

Acquisition costs of £0.2 million are included in the income statement in operating profit.

Shown below are the revenues and profits for the year after tax as if the above acquisitions had been made at the beginning of the period.

The information may not be indicative of the results of operations that would have occurred had the purchase been made at the beginning of the period presented or the future results of the combined operations.

From the date of acquisition to 30th June 2012, the above acquisitions contributed £2.4 million to revenue and £0.3 million to the profit after tax for the year.

During the period the group paid deferred consideration on previous acquisitions. A reconciliation of the total net cash paid for acquisitions is provided:

14 Pension schemes

The amounts recognised in the balance sheet are determined as follows:

Analysis of the movement in the net balance sheet liability:

15 Related parties

The nature of related parties as disclosed in the consolidated financial statements for the group as at and for the year ended 31st December 2011 has not changed. Further, there have been no significant related party transactions in the six month period ended 30th June 2012.

16 Contingent liabilities

The group operates from 131 laundries across Europe. Some of the sites have operated as laundry sites for many years, and historic environmental liabilities may exist, although the group has indemnities from third parties in respect of a number of sites. The extent of these liabilities and the cover provided by the indemnities are reviewed where appropriate with the relevant third party. The company is currently defending a legal claim to the warranties received for any environmental damage that might have existed when it purchased laundry sites in Sweden and Holland. The company fully expects to have its warranties, which were contractually received in a clear and unequivocal manner, to be confirmed. The company does not expect to incur any significant loss in respect of these or any other sites.

17 Website policy

The directors are responsible for the maintenance and integrity of the company's website. Information published on the internet is accessible in many countries with different legal requirements. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Statement of directors' responsibilities

The directors confirm that this condensed set of consolidated interim financial information have been prepared in accordance with IAS 34 as adopted by the European Union and that the interim management report includes a fair review of the information required by DTR 4.2.7 and 4.2.8 namely:

·; an indication of important events that have occurred during the first six months and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and

·; material related-party transactions in the first six months and any material changes in the related party transactions described in the last annual report.

The directors of Berendsen plc are listed in the Berendsen plc Annual Report for the year ended 31st December 2011, with the exception of Lucy Dimes, who was appointed on 1st June 2012.

By order of the Board

Peter Ventress

23rd August 2012

Chief Executive

Kevin Quinn

23rd August 2012

Finance Director

Independent review report to Berendsen plc

Introduction

We have been engaged by the company to review the condensed consolidated interim financial information in the interim financial report for the six months ended 30 June 2012, which comprises the consolidated interim income statement, consolidated interim statement of comprehensive income, consolidated interim balance sheet, consolidated interim cash flow statement, consolidated statement of changes in total equity and related notes. We have read the other information contained in the interim financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed consolidated interim financial information.

Directors' responsibilities

The interim financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

As disclosed in note 1, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed consolidated interim financial information included in this interim financial report has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union.

The maintenance and integrity of the Berendsen plc website is the responsibility of the directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website.

Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Our responsibility

Our responsibility is to express to the company a conclusion on the condensed consolidated set of interim financial statements in the interim financial report based on our review. This report, including the conclusion, has been prepared for and only for the company for the purpose of the Disclosure and Transparency Rules of the Financial Services Authority and for no other purpose. We do not, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed consolidated interim financial information in the interim financial report for the six months ended 30 June 2012 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

PricewaterhouseCoopers LLP

Chartered Accountants

London

23rd August 2012