Half Yearly Report

29 August 2014

Berendsen plc Interim Results 

Announcement for the Six Months Ended 30 June 2014

* Before £11.1 million (£13.5 million) amortisation of customer contracts

** Growth at constant exchange rates and excluding acquisitions

Highlights

· Core Growth underlying revenue up 3% and underlying operating margin up 40bps

· Productivity improvements enable plant consolidation: £1.2 million of costs charged to operating profit

· Adjusted Group earnings per share up 5% despite strength of Sterling

· Free cash flow of £30.8m; expect to achieve c. 100% conversion for the full year

· Interim dividend up 8%

Iain Ferguson, Chairman of Berendsen, commented

"We are pleased to report a good set of results for the period, which reflect continued momentum towards achieving our strategic objectives. Whilst our reported results are likely to continue to be influenced by the impact of currency translation, the Board expects to achieve a year of good underlying progress in line with its previous expectations."

For further information contact

Analyst Meeting

The company will present to analysts at 8.30am today. A live audiocast of the presentation and questions will be available on the company's website on www.berendsen.com. Questions will only be taken at the meeting.

Results for the six months ended 30 June 2014

We are pleased to report a good underlying set of results for the period, which reflect continued momentum towards achieving our strategic objectives. Reported revenue for the Group was 1% lower compared to the same period last year after the negative impact of currency translation. On an underlying basis revenue was up 3%, excluding currency translation and acquisitions. Adjusted operating profit (before amortisation of customer contracts) for the Group was marginally ahead of last year but on an underlying basis increased 5%, with our underlying adjusted operating margin up 30bps. Adjusted earnings per share for the Group were up 5% to 27.5p from 26.2p last year. The Board is recommending an interim dividend of 9.5p (2013: 8.8p), an increase of 8%.

We made a number of investments in the first half. In line with our strategy, we continued to transfer operational best practice in all our business lines, capturing significant productivity improvements from the investments we have made in prior periods and, in the UK, allowing further consolidation of our plant network. This consolidation resulted in £1.2 million of costs relating to plant closures being charged against operating profit in the period. In our Flat Linen businesses outside UK, we commenced a number of significant new contracts, incurring start-up costs and investing in textiles in the period. Our free cash flow reflects these investments and as a consequence was lower than last year at £30.8 million (£50.3 million). We expect to deliver in line with our strategic objective by converting around 100% of our profits to cash for the year as a whole.

We made progress against all our strategic objectives, building further on the initiatives we have put in place. We recognise this is an ongoing process and there is much that we can still do to further improve performance.

Group Overview

Revenue at £517.3 million in the period was down 1% compared to last year (£521.5 million). Adjusted operating profit (before amortisation of customer contracts) was £72.1 million, marginally ahead of last year (£71.8 million). Excluding the negative impact of currency translation, which decreased revenue and adjusted operating profit by £18.3 million and £3.3 million, or 4% and 5%, respectively compared to last year, underlying revenue grew 3% and adjusted operating profit grew 5%. Since the end of the period, we have seen a further weakening in the average exchange rate of the European currencies in which we operate.

Our net finance expense was £10.4 million, a decrease from £11.6 million last year as a result of our lower average net debt. We expect the interest charge to be slightly higher in the second half. Adjusted profit before tax was £61.7 million, 3% above last year (£60.2 million) and adjusted earnings per share were up 5% to 27.5 pence (26.2 pence). Our effective tax rate on adjusted profit before taxation was 24.0%, down from 25.0% for the full year 2013 due to the reduction in country rates in Denmark and UK. We expect the tax rate for the full year 2014 to be maintained around this level.

Amortisation of acquired customer contracts was £11.1 million (£13.5 million). Operating profit after amortisation was £61.0 million (£58.3 million) and profit before tax was £50.6 million (£46.7 million). Basic earnings per share were 23.1 p compared with 21.0 p in the first half of 2013.

Our net capital expenditure was up on last year at £92.0 million (£77.1 million) and ahead of depreciation of £87.3 million (£86.0 million). Plant investments amounted to £16.2 million, an increase on the £12.6 million last year with further funding to upgrade our UK Workwear plants, capacity upgrades in our Flat Linen plants outside the UK to accommodate the significant contract gains and further investments in technology in our Cleanroom plants. We also commenced expansion of our plant in Czech Republic, where we have seen excellent growth. Investment in textiles was £79.7 million (£66.7 million) reflecting a good level of new contract activity and the start-up of a number of significant new contracts in our Flat Linen businesses. Overall, we expect net capital expenditure to be similar to depreciation for the year as a whole in line with previous guidance.

Free cash flow was £30.8 million (£50.3 million), after a working capital outflow of £14.5 million (outflow of £10.1 million), which we expect to reverse in large part in the second half. We 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 30 June 2014 the net pension accounting surplus for the Group was £17.1 million (£7.1 million at the end of 2013). The impact of exchange rate movements decreased net borrowings by £3.4 million and after dividends paid of £32.7 million, net borrowings at 30 June 2014 were £403.3 million (31 December 2013: £389.0 million). The total facilities available to the Group are £702.5 million with our Revolving Credit Facility and our private placement notes extending from 2016 to 2021. As expected we repaid private placement notes of $50 million (£33.5 million) in May 2014.

The interim financial information for the six months ended 30th June 2014 has been reviewed by PricewaterhouseCoopers LLP.

Business Line Performance

Below we report the results for the six months ended 30 June 2014 in our Business Line segmentation.

* before amortisation of customer contracts

CORE GROWTH

Workwear

Revenue was down 3% in the period at actual rates at £148.6 million (£152.4 million), but underlying constant currency growth was 2%. Adjusted operating profit was £27.0 million (£27.0 million), after the negative impact of currency and the cost of site closures in the UK, which are discussed below. Excluding these and on an underlying basis, operating profit was up 5% and the underlying operating margin increased 100bps.

We continued to make progress in delivering the benefits of best practice transfer and in implementing the key elements of our standard business model. In a number of areas we are using systems and technology to improve our processes for the implementation of these best practices. Our international collection, where we have taken the best design elements from different markets, has been downloaded to tablet devices, improving the selling process. The catalogue is being well received with the number of sales from this standard range increasing almost 50% compared with the same period last year. At the same time, we have further automated our customer feedback reporting with closed loop procedures to ensure that the feedback we receive is immediately available for action and the key lessons are captured. Our focus on textile management continues, based on the best practices and workflow optimisation, which we successfully defined and implemented last year. Coordination of our key account management across the Business Line has improved with a strong pipeline of cross border opportunities and an encouraging number of agreements signed since the start of the year.

A key element of our margin increase has been the improvement in Germany and the UK where the opportunities for best practice transfer are greatest. We delivered in aggregate a double-digit increase in operating profit, resulting in a strong margin improvement on a like for like basis. We have made good strides towards moving these countries towards the margin potential we see in our best practice reference countries. In Germany, our revenue growth was close to 5% following significant new contract wins and this was a key driver of our excellent profit improvement in the business, which achieved the highest level of growth for the Business Line.

In the UK we have captured significant productivity improvements by converting our plants in Rainhill and Wakefield to the CL2000 concept, which is based on the principles of lean production and self-managed teams. Both these developments have also allowed further consolidation of our plant network, with the announcement in the period that Ashton volumes will transfer to Rainhill and, since the period end, we announced that Leeds volumes will transfer to Wakefield. We expect to capture the full benefits of these transfers once the volumes are fully integrated following the closure of the respective plants. The costs of closing Ashton (£0.8 million) have been reported in the Business Line result in the period. We have also commenced conversion of a third plant at Fakenham to our CL2000 concept with a capital investment of £1.5m and expect this to be completed towards the end of September, with similar levels of productivity improvement.

Economic activity in our 'best practice countries' Denmark, Sweden and Holland slowed in the second quarter, with evidence of delays in contract decisions returning after a more positive first quarter. Overall, however, we are pleased with our level of sales, achieved despite the economic environment, which remains challenging, and reflects further improvement in efficiency. These countries also benefited from operational improvements, which enabled us to deliver improved margins.

Facility

Reported revenue was down 2% at £120.1 million (£123.0 million) but adjusted operating profit was slightly ahead at £30.6 million (£30.4 million). On an underlying constant currency basis excluding acquisitions, revenue grew 5% and adjusted operating profit was up 8%, with the adjusted operating profit margin 80bps higher than last year at 25.5%.

We are encouraged by the development of this business, where the opportunities for growth are strongest. A large proportion of our existing customers have yet to take a fully outsourced service in Mats and Washroom. Mats, which is over half of the revenue of the Business Line, has the greater scale and density necessary to deliver higher margins. In Mats we improved the mix of business with a higher level of sales of premium categories in all markets, replicating the previous success we have had with this strategy in Denmark. In Washroom, sales were ahead of plan and well ahead of last year with a particularly strong second quarter. The growth of our fixed billing package concepts has continued. Operationally we are extending our best practice concepts with a focus this year on distribution: in Sweden, for example, we have improved the efficiency of our mat deliveries by 6% through better route planning and more performance related incentives.

We expanded our contract base in each of our Mats and Washroom businesses, with the volume of mat placements increasing. Price pressure remains in Denmark but we made good progress in Sweden and Norway, converting revenue growth to good profit growth. We are starting to see momentum in washroom in Holland, following the integration of the acquisition we made there at the start of last year.

In our emerging Central European markets, we saw high single-digit revenue growth in aggregate, with the newer territories of the Baltics and Czech Republic growing strongly. There was a good level of growth in Poland, our larger and more established business, and with the operating margin above 20%, this converted well to profit. Our Baltic business is delivering improved operating margins, up strongly in the period. Our Czech business grew at close to 30% and we are investing £2 million to extend the plant to capture the further opportunities available to us.

Our Cleanroom business again delivered excellent organic growth with improved margins. The pipeline of contracts and add-on services to existing customers looks strong, with the level of new business in Germany, in particular, encouraging. The operational focus we have added is delivering increased margin in Germany and moving the country significantly closer to the average for this business activity.

UK Flat Linen

Revenue was 3% ahead of last year at £101.5 million (£98.3 million) and adjusted operating profit was slightly ahead at £10.8 million (£10.7 million) after the cost of site closures, which are discussed below. The adjusted operating margin was 10.6% and up 10bps before site closure costs.

We are pleased with the increase in revenue in the period, which has been driven by a combination of 4% higher underlying volumes in hotels, new contract wins and price increases. In the second quarter, the contract churn in hotels, which we indicated in February, started to impact. We have been pleased with the level of new sales in hotels, which are well ahead of last year and which we have achieved with some good wins. In Healthcare, we saw little change in underlying volumes and while we remain well placed to capture further outsourcing there was limited new outsourcing activity. We have, however, been successful in generating add-on sales from existing contracts with our innovations in product and services to the hospitals.

We continue to see opportunities for efficiency improvements, announcing in May the further integration of the hotel and healthcare businesses and consolidation of our plant in Chesterfield into Leicester and Wednesbury, at a cost of £0.4 million, which is reported in the Business Line result in the period.

MANAGE FOR VALUE

Flat Linen Outside UK

Reported revenue in our Flat Linen businesses outside UK was 1% lower at £112.0 million (£113.7 million) and adjusted operating profit was down to £6.3 million (£8.5 million). On an underlying constant currency basis, revenue grew 2% and adjusted operating profit was down £2 million. The adjusted operating margin decreased to 5.6%.

The businesses within this segment have demonstrated that they have opportunities within their markets, notwithstanding the pricing pressure in Swedish and German Healthcare, which impacted margins. Underlying revenues increased following the good new contract wins last year in Healthcare in Germany and Austria and in particular in Scandinavian hotels where we commenced service on a very significant new contract in the second quarter. We expect the margins on this new hotel business to begin to improve in the second half following the significant start-up costs we incurred in the period.

Clinical Solutions and Decontamination

Revenue increased 3% to £35.1 million (£34.1 million) and adjusted operating profit increased to £2.3 million compared to £1.7 million last year, an increase of 35%. Our adjusted operating margin increased 160bps to 6.6 %.

Sales of consumables and single use surgical drapes and gowns were slightly down, but there was steady growth in our re-usable textiles. We continue to improve the performance of our decontamination contracts and revenue was up 15% with new volume from the existing contracts and the start-up of a significant new contract. We are now operating at an underlying breakeven position, concluding our turnaround of the business.

Outlook for the Group

Whilst our reported results are likely to continue to be influenced by the impact of currency translation, the Board expects to achieve a year of good underlying progress in line with its previous expectations.

Principal Risks and Uncertainties

Details of our principal risks and uncertainties were previously disclosed on pages 36 to 43 of the 2013 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 12 of the 2013 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

· New sales model fails to deliver the necessary new contract wins, volume growth and price levels to drive targeted organic growth.

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.

· Further economic uncertainty (low or negative GDP growth in the Eurozone)

Improving financial returns by leveraging operational efficiency

· Significant change in political environment arising from government policies or expenditure levels.

· Unforeseen loss of operational/IT capacity.

· One of our major textile suppliers is unexpectedly unable to meet our textile requirements.

Maintaining health and safety and other governance matters as a priority

· Breach of health and safety regulations.

· Non-compliance with laws and regulations

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.

Reducing our impact on the environment

· Textile suppliers are found not to be adopting appropriate employment and human rights practices.

· Discovery of historic environmental issues at laundries.

CONSOLIDATED INTERIM INCOME STATEMENTFor the six months ended 30 June 2014

CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOMEFor the six months ended 30 June 2014

CONSOLIDATED INTERIM BALANCE SHEETAs at 30 June 2014

CONSOLIDATED INTERIM CASH FLOW STATEMENTFor the six months ended 30 June 2014

CONSOLIDATED STATEMENT OF CHANGES IN TOTAL EQUITYAs at 30 June 2014

CONSOLIDATED STATEMENT OF CHANGES IN TOTAL EQUITY

As at 30 June 2014

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 30 June 2014, the Trust held 2,180,392 (30 June 2013: 2,198,134; 31 December 2013: 2,798,134) 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 31 December 2013 were approved by the Board of directors on 27 February 2014 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 30 June 2014 has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct 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 31 December 2013, 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. The total facilities available to the group are £702.5 million with the RCF and private placement notes extending from 2016 to 2021. 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.

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 31 December 2013, 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 1 January 2014, but have no material impact on the group:

· IFRS 10, 'Consolidated financial statements'

· IFRS 11, 'Joint arrangements' on acquisition of an interest in a joint venture

· IFRS 12, 'Disclosures of interests in other entities'

· IAS 27 (revised 2011) 'Separate financial statements'

· Amendments to IFRS 10,11 and 12 on transition guidance

· Amendments to IAS 32 on Financial instruments asset and liability offsetting

· Amendment to IAS 36, 'Impairment of assets' on recoverable amount disclosures

· Amendment to IAS 39 'Financial instruments: Recognition and measurement', on novation of derivatives and hedge accounting

· IFRIC 21, 'Levies'

The following new standards, amendments to standards and interpretations have been issued, but are not effective for the financial year beginning 1 January 2014 and have not been early adopted. Their expected impact is still being assessed in detail by management:

· IFRS 15 - "Revenue from contracts with customers"

· IFRS 9 - "Classification and measurement of financial liabilities"

· IFRS 11 - 'Joint arrangements' on acquisition of an interest in a joint venture

· IAS 28 (Revised) - 'Associates and joint ventures'

· Amendments to IFRS 10, IFRS 12 and IAS 27 - Investment entities

3 Segmental information

The business line results for the six months ended 30 June 2014 are as follows:

Unallocated costs includes group marketing and communication functions.

Capital expenditure comprises additions to property, plant and equipment and intangible assets, including additions resulting from acquisitions through business combinations.

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:

The segment results for the six months ended 30 June 2013 were as follows:

The segment assets and liabilities at 30 June 2014 are as follows:

The segment assets and liabilities at 30 June 2013 were as follows:

The segment assets and liabilities at 31 December 2013 were as follows:

Business line operating assets consist primarily of goodwill, other intangible assets, property, plant and equipment, inventories and trade and other receivables.

Business line operating liabilities consist primarily of trade and other payables and provisions.

Unallocated assets include operating assets relating to corporate segments.

Unallocated liabilities include operating liabilities for corporate segments.

Analysis of non-current assets other than financial instruments, deferred tax assets and retirement benefit assets by country are:

4 Exceptional items

There were no exceptional items for the six month period ended 30 June 2014 (30 June 2013: £nil). Exceptional gains relating to the release of onerous contract provisions, for the year ended 31 December 2013, were £1.8 million.

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. The effective tax rate on adjusted profit before tax is 24% (30 June 2013: 25.5%) reflecting the reduction in country rates in Denmark and the UK.

7 Dividends

A final dividend relating to the year ended 31 December 2013 amounting to £32.7 million was paid in May 2014 (2013: £29.8 million), representing 19.2 pence per share (2012: 17.5 pence).

In addition, the directors recommend an interim dividend in respect of the financial year ending 31 December 2014 of 9.5p per ordinary share. It is payable on 10 October 2014 to shareholders who are on the register at 12 September 2014. This interim dividend amounting to £16.2 million is not reflected in these financial statements as it does not represent a liability at 30 June 2014. It will be recognised in shareholders' equity in the year to 31 December 2014.

8 Earnings per share

Basic earnings per ordinary share are based on the group profit for the period and a weighted average of 170,087,667 (2013: 170,001,149) ordinary shares in issue during the period.

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 30 June 2014, the group acquired assets with a cost of £95.9 million including new leases (30 June 2013: £79.7 million), not including property, plant and equipment acquired through business combinations.

Assets with a net book value of £2.6 million were disposed of by the group during the six months ended 30 June 2014 (30 June 2013: £1.8 million) resulting in a net gain on disposal of £0.9 million (30 June 2013: £0.6 million).

The group's capital commitments at 30 June 2014 were £21.9 million (30 June 2013: £16.2 million).

10 Provisions

Other

Other comprise of legal provisions arising through legislation £nil (2013: £0.6m)

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 group's exposure to these warranties, guarantees and indemnities is dependent on the ability of previously the disposed businesses to meet their contractual liabilities through counter indemnities in full. Following a recent review the group no longer anticipates any exposure under these contractual obligations and as a consequence the provision has been released within administrative expenses during the period.

A provision for £9.9 million was recognised for the two decontamination contracts which were considered to be onerous as at 31

December 2010. The provision was utilised principally in the first two years, and the contract provision was substantially released in December 2013 in line with the expectation that the two contracts would move to a breakeven position by the end of 2014. The utilisation of the provision is shown within administrative expenses within the income statement.

11 Cash flows from operating activities

Reconciliation of operating profit to net cash inflow from operating activities:

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

There were no acquisitions made during the six month period ending 30 June 2014. During the period the group paid nil in respect of previous acquisitions made.

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 Financial risk management and Financial instruments

15.1 Financial risk factors

The group's activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk.

The condensed interim financial statement do not include all financial risk management information and disclosures required in the annual financial statements they should be read in conjunction with the group's annual financial statements as at 31 December 2013. There have been no changes in the risk management department or in any risk management

Policies since the year end.

15.2 Liquidity Risk

Compared to year end, there was no material change in the contractual undiscounted cash out flows for financial liabilities.

15.3 Fair Value estimation

The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:

· Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1).

· Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (Level 2).

· Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3).

The following table presents the group's financial assets and liabilities that are measured at fair value at 30 June 2014:

The following table presents the group's financial assets and liabilities that are measured at fair value at 31 December 2013:

In accordance with IFRS 13, disclosure is required for financial instruments that are measured in the group balance sheet at fair value.

Valuation techniques and assumptions applied in determining fair values of each class of asset or liability are consistent with those used as at 31 December 2013 and reflect the current economic environment.

The fair value measurements of the derivatives are classified as Level 2 in the fair value hierarchy as defined by IFRS13.

The fair value by designated hedge type are as follows:

16 Related parties

The nature of related parties as disclosed in the consolidated financial statements for the group as at and for the year ended 31 December 2013 has not changed. Further, there have been no significant related party transactions in the six month period ended 30 June 2014.

17 Contingent liabilities

The group operates from a number of 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.

18 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 31 December 2013.

On behalf of the Board

Peter Ventress

29 August 2014

Chief Executive Officer

Kevin Quinn

29 August 2014

Chief Financial Officer

Independent review report to Berendsen Plc

Report on the condensed consolidated interim financial statements

Our conclusion

We have reviewed the condensed consolidated interim financial statements, defined below, in the interim financial report of Berendsen Plc for the six months ended 30 June 2014. Based on our review, nothing has come to our attention that causes us to believe that the condensed consolidated interim financial statements are 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 Conduct Authority.

This conclusion is to be read in the context of what we say in the remainder of this report.

What we have reviewed

The condensed consolidated interim financial statements, which are prepared by Berendsen plc, comprise:

the consolidated interim Balance Sheet as at 30 June 2014;

the consolidated interim income statement and consolidated interim statement of comprehensive income for the period then ended;

the consolidated interim cash flow statement for the period then ended;

the consolidated statement of changes in equity for the period then ended; and

the explanatory notes to the interim results

As disclosed in note 1, the financial reporting framework that has been applied in the preparation of the full annual financial statements of the group is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.

The condensed consolidated interim financial statements included in the interim financial report have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

What a review of condensed consolidated financial statements involves

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.

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 statements.

Responsibilities for the condensed consolidated interim financial statements and the review

Our responsibilities and those of the directors

The interim financial report, including the condensed consolidated interim financial statements, 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 Conduct Authority.

Our responsibility is to express to the company a conclusion on the condensed consolidated 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 complying with the Disclosure and Transparency Rules of the Financial Conduct Authority and for no other purpose. We do not, in giving this conclusion, 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.

PricewaterhouseCoopers LLP

Chartered Accountants

29 August 2014

London