Interim Results and Business Review Conclusions

6 August 2015

RESULTS FOR THE SIX MONTHS TO 30 JUNE 2015 AND BUSINESS REVIEW CONCLUSIONS

TRADING RESULTS

· Local business revenue increased by 3%, aided by successful delivery of the inaugural European Games;

· Power Projects revenue down 9%, driven by Bangladesh pricing and lower utilisation on Panama contract;

· Solid year to date order intake of 451MW and strong order book reflecting extensions in Argentina, Ivory Coast, Bangladesh and the first 115MW in Mozambique;

· Strong balance sheet with 0.8 times net debt to EBITDA; net debt down £70 million on prior year;

· Maintained interim dividend of 9.38p;

· Full year fleet capex flexed from £300 million to £270 million reflecting current trading conditions;

· As reported on 24 July, results are impacted by the slowdown in the North American oil and gas sector, lower than expected pricing on the Bangladesh contract extension and lower production levels in Yemen due to ongoing security challenges;

· Continue to expect full year profit before tax to be between £250 million and £270 million at current exchange rates.

BUSINESS PRIORITIES

At the full year results in March CEO Chris Weston announced a comprehensive business review to identify priorities for the next phase of growth.

Key Conclusions

· Aggreko is a strong and resilient business in growing markets serving a critical need;

· The market environment has changed;

· A new organisational structure (announced 22 June) is required to better address those markets and improve operational efficiency:

− Created two separate business units, Power Solutions and Rental Solutions, effective from 1 August;

· We will focus the business on three areas: Customer; Technology; and Efficiency

− In Customer we will develop our approach to global and national key account management; further develop our approach to key sectors; increase our skills to deliver more complex projects; continue to pursue market adjacencies; and evaluate bolt-on M&A opportunities;

− In Technology we will continue to work towards reducing the overall cost of power for our customers by working with our strategic partners to develop market leading products;

− In Efficiency we will improve our processes and systems; optimise the deployment of resources; and streamline our cost base;

· Cost savings of £80 million by 2017 will be balanced between reinvestment for growth and support to margins and returns; one off costs will be circa £30 million;

· We expect to grow ahead of our markets whilst delivering margins and returns of around 20% in the medium term;

· 2016 will be a year of change in the business with markets remaining difficult; margins and returns are likely to be lower in the short term.

CHRIS WESTON, CHIEF EXECUTIVE, COMMENTED ON THE RESULTS AND THE BUSINESS REVIEW:

"The performance of the Group in the first half was impacted by difficult trading conditions in a number of our markets, notably Bangladesh, and external factors, including the impact of a lower oil price and ongoing security concerns in Yemen. Whilst we initially expected our financial performance this year to be broadly in line with last year, these challenges mean that, as announced on 24 July, we now expect profit before tax to be between £250 million and £270 million for the full year4.

Our new organisational structure, which incorporates Rental Solutions, comprising our Local business in developed markets, and Power Solutions, comprising our Power Projects business and Local business in developing markets, better focuses the business on our markets and our customers, providing a more effective platform for growth.

Aggreko is the market leader in the provision of fast, mobile, modular power, fulfilling a critical need. It is clear that although the market environment has changed, that our business model is sound and that we have good growth opportunities in each of our markets. Through focusing on three business priorities: our customers; our technology; and our efficiency, we are positioning the business for its next phase of growth. I am impressed by the commitment of our people and our culture and I am confident that our new focus and structure will see the business return to growth."

Regional performance metrics:

Enquiries

Interviews with Management

Interviews with Chris Weston and Carole Cran discussing the business review and the interim results are available on our website at www.aggreko.com/investors/reports-results-and-presentations/financial-results-centre.aspx.

Historical financials under new structure

The last 5 years of financials under the new organisation structure are available on our website at www.aggreko.com/investors/reports-results-and-presentations.aspx.

Analyst Presentation

A presentation of our interim results and business review will be held for investors and analysts today at 10am (BST) at King Edward Hall, Bank of America Merrill Lynch, 2 King Edward St, London EC1A 1HQ. A live web-cast and a copy of the slides will be available on our website from 9.45am at www.aggreko.com/investors/reports-results-and-presentations.aspx.

Future Reporting

The Group will report a trading update in November 2015.

INTERIM MANAGEMENT REPORT

Group Trading Performance

Underlying5 revenue was down 2% over the same period last year. The Local business grew 3% on the same basis, with a strong performance from EMEA, aided by £13 million of revenue from the European Games; this was partially offset by a 2% decrease in the Americas due to a slowdown in the oil and gas sector driven by the lower oil price and the prior year comparatives including revenue from the World Cup in Brazil. APAC Local business revenue was in line with the same period last year. In Power Projects, underlying revenue was down 9%, driven by our contract in Panama where the plant has not been running as hard as last year, as hydro levels are higher. In addition, in Indonesia we have seen a decline in volumes over the last year and whilst we are pleased to be in the final stages of approval for an extension to our contract in Bangladesh, the pricing is lower than our expectations. In EMEA Power Projects trading was good, reflecting the strong order intake in Africa through 2014.

Overall, the Group reported margin was 15% (2014: 18%). In the Local business the pricing and volume pressure we experienced in the oil and gas sector in North America had an adverse impact on margins and whilst we have taken actions to mitigate this, we have been unable to offset the impact completely. In Power Projects, as outlined above, we have seen pricing pressure in Bangladesh and this, combined with increased mobilisation costs from higher levels of new work in our EMEA Power Projects business, resulted in a lower margin. The decline in margin impacted reported return on capital employed6, which fell 4 percentage points to 17%.

Looking across the regions, EMEA delivered a good performance, with underlying revenue up 10% and trading profit in line with the same period last year, with the higher revenues offset by higher mobilisation costs. The Americas had a challenging first half, with underlying revenue down 7% and trading profit down 29%. APAC also had a poor first half with underlying revenue down 17% and trading profit down 49%.

On a reported basis, the movement in exchange rates in the period increased revenue by £26 million and trading profit by £6 million. This was driven by the strength of the US dollar against Sterling compared to the average rates in 2014.

Earnings and Dividends

The Group delivered a profit before tax of £102 million (2014: £130 million). The diluted earnings per share was 29.63 pence, a 19% decline on the prior year. The Board has proposed an interim dividend of 9.38 pence per ordinary share (2014: 9.38 pence), which is in line with the prior year.

Cashflow and Balance Sheet

During the first six months, we generated an operating cash inflow of £255 million (2014: £213 million). Fleet capital expenditure was £138 million (2014: £107 million), of which 55% was spent in the Power Projects business, as we further invested in our gas fleet and continued to refurbish our diesel fleet to the more fuel efficient, higher output G3+ engine.

Net debt was £467 million at 30 June 2015, £70 million lower than the prior year. This resulted in net debt to EBITDA on a rolling 12-month basis of 0.8 times compared to 0.9 times at June 2014.

Outlook

At a Group level we expect the second half underlying revenue trend to be similar to the first half reflecting current trading conditions. Given this we have flexed our capital expenditure and now anticipate spending around £270 million on fleet for the full year. Overall, as indicated in our trading update of 24 July, profit before tax for the full year is now expected to be between £250 million and £270 million at current exchange rates7.

REGIONAL TRADING PERFORMANCE REVIEW

The performance of our three regions is detailed below, along with an analysis of the group wide performance of our Power Projects and Local businesses.

Regional Trading Performance as reported in £ million

The performance of each of these regions is described below:

Americas

1. Underlying excludes currency.

Americas underlying revenue decreased by 7% and trading profit by 29%. Reported trading margin decreased from 19% to 15%, with the decrease driven by the impact of the slowdown in the oil and gas sector and an increase in the provision for doubtful debts in Power Projects.

Revenue in our Americas Local business decreased 2% with rental revenue down 1% and services revenue down 5%. Within rental revenue power was down by 2% and temperature control was up 6%. Oil free air was down 8%. The prior year comparatives included revenue from the World Cup in Brazil, excluding this the year on year increase in revenue was 1%. Since the end of the first quarter we have experienced pricing and volume pressure in the North America oil and gas sector, where revenue was down 10% in the first half. In diesel, volumes and pricing were down, and in gas, although pricing was also under pressure, we have seen higher volumes as we balance market share gains with price. In contrast we are seeing growth in other sectors, particularly in petrochemical and refining, our second biggest sector in North America, where revenue was up 10%, and where the lower oil price is acting as a stimulus. In Brazil, the economic environment remains challenging, however the actions that we have taken to reorganise the business are having a positive impact, with margins up two percentage points. Elsewhere in Americas Local, the mining sector slowdown has impacted our business in Chile, although we are seeing good growth in Canada driven by the petrochemical and refining sector.

Power Projects revenue, on an underlying basis, was down 15% on last year with a £5 million ($7 million) decrease in Military and reduced running of our Panama plant, as hydro levels were higher. Since the beginning of the year, we have won over 200MW of new work in the region, including the previously announced 150MW contract in Argentina, as well as the extension of our existing 300MW of contracts in the country.

Asia, Pacific & Australia (APAC)

1. Underlying excludes currency.

Underlying revenue and trading profit in our APAC business declined by 17% and 49% respectively in the first half. The reported trading margin fell from 19% to 12% largely driven by the Power Projects business.

Local business revenue was in line with the same period last year. Rental revenue increased by 2% and services revenue was down 6%. Within rental revenue power increased by 2% and temperature control increased by 6%.

Around 70% of APAC local revenue is generated by the Australia Pacific business which continues to face difficult market conditions driven by the slowdown in the mining sector. However, the rate of decline has slowed, with revenue down 5% in the first half, but whilst iron ore and coal prices remain where they are, it is unlikely that we will see a significant pick up in this market, albeit we would expect that the situation continues to stabilise. We have responded by redeploying fleet and reviewing our cost base more generally, as well as looking for new market opportunities, which do exist. Our business in New Zealand benefited from emergency response work to the cyclones which hit the country and the ICC World Cup and our new business in South Korea continues to perform well. However, trading conditions remain difficult in India despite the initial optimism following last year's election.

Power Projects in APAC had a difficult six months with revenue decreasing 28%, largely driven by pricing pressure on our contract extension in Bangladesh and a reduction in volumes in Indonesia. Despite the reduced rate we are pleased to be in the final stages of approval to extend our contract in Bangladesh, with our expectation being that 180MW will be secured for a further year and 145MW for a further three years; the trading terms secured for these extensions retrospectively apply from the second quarter 2015 and we are looking at ways to reduce our operating costs to partly mitigate the impact of the lower rate. In Indonesia, the environment continues to be challenging; to make us more competitive, we have taken the decision to address this market with a local presence and will open a depot in Jakarta later this/early next year. During the period we were also awarded new contracts in Myanmar and the Philippines as well as the extension of our existing contract in Japan through to early 2016.

Europe, Middle East & Africa (EMEA)

1. Underlying excludes currency and pass-through fuel.

In our EMEA business first half underlying revenue increased by 10% and trading profit was in line with the same period last year. Reported trading margin decreased from 19% to 17% mainly driven by a higher level of mobilisation costs from higher levels of new work partially offset by a reduction in the Power Projects provision for doubtful debts due to a better payment profile.

Revenue in our EMEA Local business, on an underlying basis, increased 12% on last year driven by revenues from the European Games in Baku (Azerbaijan). Rental revenue increased by 11% with services revenue up 15%. Within rental revenue, power increased by 12% and temperature control increased by 2%. On a geographical basis we saw good growth in Africa where mining remains strong, and particularly in South Africa where the business is growing rapidly on the back of the worsening power outages and regular load shedding. Belgium also performed well as we provided blackout support to industrial customers over the winter months. Elsewhere performance was mixed and we started to see an impact on our oil and gas business across the region, particularly in Scotland. The integration of Golden Triangle Generators Limited (acquired in November 2014) was completed during the period and this small acquisition is performing in line with our expectations. We were pleased to have successfully supplied power for the first European Games in Baku. In total, we provided 35MW of temporary power across the Games' fifteen venues and the International Broadcast Centre.

Revenue in our Power Projects business, excluding fuel, was up 8% reflecting the strong order intake in Africa through 2014. We have extended 115MW of our 260MW of gas contracts in Mozambique until the end of the year and are making progress on the rest; since the beginning of the year we have secured new work in Tanzania, Kenya and Ghana.

BUSINESS LINE PERFORMANCE REVIEW

Whilst we report on a regional basis, we have also outlined the performance of our two business lines below, to provide further clarity on performance.

Power Projects Business

1. Underlying excludes currency and pass-through fuel.

Our Power Projects business saw underlying revenue decreasing by 9% and trading profit decreasing by 27% in the first six months of the year. Reported trading margin decreased to 22% (2014: 27%). The main reasons for the margin decline were higher mobilisation costs driven by higher levels of new work in EMEA and pricing pressure in Bangladesh, as well as reduced volumes in Indonesia.

Order intake for the first half was a solid 422MW (30 June 2014: 488MW) with year to date order intake of 451MW; last year's comparative includes 170MW of lower rate, summer peak shaving work in Saudi Arabia and Oman, which didn't repeat in 2015. New contracts in 2015 include 150MW in Argentina and 95MW in Myanmar. With regards to our key contract extensions, we are pleased to have extended our contracts in Bangladesh, Argentina and the Ivory Coast. We have also extended 115MW of our 260MW of gas contracts in Mozambique until the end of the year and are making progress on the rest; we have assumed that this fully extends until the end of 2015 in our guidance. At the end of the period, our order book was over 38,000MW months, the equivalent of 13 months' revenue (30 June 2014: 9 months) at the current run-rate and the highest level of recent times. The off-hire rate in the first half was 8% (2014: 10%).

Local Business

1. Underlying excludes currency.

Our Local business, in revenue terms, had a solid first half with underlying revenue increasing by 3% with good performances from Africa, the Middle East, South Korea and Canada partially offset by a decline in North America, Australia Pacific and Brazil. Rental revenue increased by 4% and services revenue by 2%. Within rental, power increased 4% whilst temperature control increased by 5% and oil-free air decreased 8%. This increase in revenue included £13 million of revenue from the European Games. Trading profit decreased by 14% and trading margin reduced from 13% to 11% mainly driven by the decline in the mining and oil and gas sectors in our Americas Local business.

BUSINESS PRIORITIES

Since the beginning of the year, we have undertaken a comprehensive review of our business, with a view to determining the actions that we need to take in order to deliver sustainable growth.

First, it is clear that Aggreko is an exceptional business, with a unique business model. It operates in markets and sectors that provide underlying growth over the economic cycle and it has a number of distinct competitive advantages. These include: our people and unique culture that delivers consistently for our customers; expertise in sales, engineering and operations, enabling rapid deployment globally; scale and global reach, providing a capital cost and utilisation advantage; and technology, providing packaged modular and mobile products, working closely with our OEM partners. These strengths are complemented by a strong balance sheet, providing great flexibility for the future.

Secondly, our markets are changing: emerging market growth rates have slowed, as has growth in the associated power shortfall. The competitive environment has intensified and geopolitical events have made the operating environment more challenging. In addition, there has been a marked slowdown in the commodities cycle, impacting the oil & gas and mining sectors in particular. This has had an impact on our business, but Aggreko is the market leader in the provision of modular, mobile power and is well positioned to respond to the changes in the market environment.

In reviewing the business, it was clear that Aggreko has two mutually beneficial businesses, each operating in a different market environment and each focused on customers with specific needs. In order to better address these needs, we announced on 22 June 2015, that we will change our organisation structure, creating the Rental Solutions and Power Solutions business units, effective from 1 August 2015. Aggreko Rental Solutions incorporates our Local businesses in developed markets8. Aggreko Power Solutions includes our existing Power Projects business and our Local businesses in developing markets9.

Within these business units we have identified specific actions that will drive growth and enhance our existing competitive advantages. In order to realise these opportunities, whilst ensuring the business continues to deliver good margins and returns, we are focusing on three key areas: our customer; our technology; and our efficiency which require specific actions in each of our business units as follows.

Aggreko Rental Solutions

Aggreko Rental Solutions will focus on how it identifies and provides service to its customers and the efficiency of its operations in the field and in both the front and back office.

Our customer priority will include:

· Improving the account management service we provide to our customers, something we are uniquely positioned to offer on a global basis, covering both International and National Accounts;

· Enhanced sector focus, covering oil & gas, petrochemical & refining, mining and events, both in terms of expertise and product solutions;

· Developing our temperature control business and other adjacencies (loadbanks, etc). These are products that are used extensively in our target sectors and benefit our core business, requiring associated power, around 80% of the time in the case of temperature control; and

· Developing a digital offering for our more transactional customers. This will cover sales and service, including pricing, the ability for customers to manage their accounts and make payments.

Efficiency will include the assessment and re-design, as appropriate, of our existing processes and systems. It will cover fleet and field management, streamlining back office processes, as well as our CRM capability. It will lead to greater efficiency and an improved customer service as well as improved utilisation and return on capital.

We expect GDP in our Rental Solutions markets to grow at around 2% per annum.  

Aggreko Power Solutions

Aggreko Power Solutions will focus on efficiency, particularly reducing the cost base; technology; and customers.

Historic high growth rates combined with the regional structure led to cost inflation, whether through duplication of resource or limited investment in Group capability in areas such as procurement. The first priority is to reduce our cost base. There are further areas for efficiency improvements, including:

· Optimising the depot infrastructure that has been deployed over the last few years and moving to a regional hub and spoke model, such as that deployed in Southern Africa. This will reduce the capital employed and improve returns. There may be some countries, such as Indonesia, where we have to invest in appropriate local infrastructure to capture market share; and in

· Mobilisation/demobilisation of our projects; the standards and equipment deployed, without compromising on safety or reliability; and the operations of each site, addressing inefficiencies and variability in site operations across the globe.

It is clear that our customers value our reliability, quality and flexibility, particularly our speed of response. They are also keen to reduce the total cost of electricity produced. Technology plays a key role in enabling this, either through the fuel type used; or the efficiency of the equipment, the engine deployed; or through site operations. Aggreko will further invest in fleet technology and fleet, covering each of these areas. This will particularly require investment in new gas technology; to provide other fuels; and, on a lesser scale, in the areas of renewables and storage.

Lastly, like Rental Solutions, Power Solutions will improve its customer capability. This includes how we approach the market; the training and deployment of sales resource; partnering, including OEMs, IPPs, and global bodies: in many instances complementing their core capability in providing permanent power with our fast, bridging capability. Global account management and a sector focus are equally important in Power Solutions, which operates in similar sectors, oil & gas and mining, in particular. The customers in many instances are the same, global companies like BHP, BP, Shell, LaFarge, etc and we will execute this on a Group basis.

GDP growth in the markets in which we operate is expected to be around 5% per annum going forward. The power shortfall in these markets is forecast to grow at around 6% per annum, albeit more slowly in 2015 and 2016.

Execution

At the Group level, our reorganisation will remove duplication, which combined with an improvement in procurement practices and improved project site efficiency, we expect will generate savings of £80 million by 2017. These savings provide optionality to balance reinvestment in the business for growth and with support to margins and returns. There will be a one-off cost of circa £30 million, which will largely be incurred in the current year, to enable the delivery of these savings.

The majority of this work will be completed over the next two years. To minimise the risk associated with delivery a Programme Management Office will oversee the whole programme, providing assurance and risk management, thereby allowing the rest of the business to focus on our customers and day to day operational requirements.

Capital allocation

From a capital allocation perspective our priority will be to invest in organic growth, investing in our fleet. We are evaluating new products that drive efficiency improvements and, as a result, will underpin our growth agenda. We expect that our capital investment will be higher in the short term compared with historic years with utilisation and returns likely to be lower for a period. We expect to have annual maintenance capital of around £200 million.

As well as investing organically, there are opportunities for growth through acquisition, both for scale and capability, or adjacencies such as temperature control and loadbanks. Acquisitions are most likely in Rental Solutions and each acquisition will be subject to our disciplined capital allocation process and will have to meet appropriate hurdle rates of return.

As we anticipate being a more capital intensive business in the short term, dividend cover will remain at around three times in order to ensure that we maintain the strength of our balance sheet. As and when the opportunity arises, we will continue to look at returning surplus capital to shareholders. This is less likely in the short term.

We continue to maintain a strong balance sheet and want to retain the flexibility that it provides. Having reassessed the business model and the market environment, we are reaffirming our belief in operating with leverage at around one times net debt to EBITDA in the normal course of trading. Where opportunities exist it is likely that the leverage will be above this, but we would then expect to bring it back down to around this level.

Summary

The market environment has changed, but Aggreko has a unique business model. There are good opportunities for growth in each of our markets. To capture these, management is focusing on three business priorities: Customer; Technology and Efficiency. As a result, we expect to grow faster than our markets whilst delivering margins and returns of around 20% in the medium term. There will be significant change in the business in 2016 and the market environment remains difficult, so we anticipate that margins and returns will be lower in the short term.

FINANCIAL REVIEW

A summarised income statement for the six months ended 30 June 2015 as well as related ratios are set out below.

Currency Translation

The movement in exchange rates during the period increased revenue by £26 million and trading profit by £6 million. This was driven by the strength of the US dollar against Sterling compared to the average rates in 2014 partially offset by the weakness of the euro, Russian rouble, Brazilian real and Australian dollar. Currency translation also gave rise to a £49 million decrease in net assets from December 2014 to June 2015. Set out in the table below are the principal exchange rates affecting the Group's overseas profits and net assets.

Reconciliation of underlying growth to reported growth

The table below reconciles the reported and underlying revenue and trading profit growth rates:

Interest

The net interest charge for the first half of 2015 was £13 million, an increase of £3 million on 2014, reflecting higher average net debt period on period, and arrangement fees included in the 2015 interest number for debt refinanced during the period. Interest cover, measured against rolling 12-month EBITDA, remains strong at 23 times (June 2014: 28 times) relative to the financial covenant attached to our borrowing facilities that EBITDA should be no less than 4 times interest.

Effective Tax Rate

The current forecast of the effective tax rate for the full year, which has been used in the interim accounts is 26% which is in line with the same period last year.

Dividends

The Board has decided to pay an interim dividend of 9.38 pence per ordinary share which is in line with the same period in 2014; dividend cover is 3.2 times (30 June 2014: 3.9 times) and is consistent with our strategy of full year dividend cover of around 3 times (31 December 2014: 3.0 times). This interim dividend will be paid on 2 October 2015 to shareholders on the register at 4 September 2015, with an ex-dividend date of 3 September 2015.

Cashflow

The net cash inflow from operations during the period totalled £255 million (2014: £213 million). This funded capital expenditure of £147 million which was up £26 million on the same period in 2014. Of the £147 million, £138 million was spent on fleet with 55% going to the Power Projects business, as we further invested in our gas fleet and continued to refurbish our diesel fleet to the more fuel efficient, higher output G3+ engine . Net debt of £467 million at 30 June 2015 was £70 million lower than the same period last year.

Power Projects debtor days have decreased by 13 days to 97 days since December 2014 (30 June 2014: 100 days). The Group monitors the risk profile and debtor position of all contracts regularly, and particularly those in Power Projects, and deploys a variety of techniques to mitigate the risk of delayed or non-payment; these include securing advance payments, bonds and guarantees. The decrease in debtor days reflects a better payment profile by a small number of customers. We have forms of payment protection in place for these customers and therefore this decrease had little impact on the overall level of provision. Overall, the Power Projects bad debt provision at 30 June 2015 was £1 million higher than the provision at 31 December 2014 (£9 million lower than 30 June 2014). The Local business debtor days were in line with December 2014.

Financial Resources

The Group maintains sufficient facilities to meet its normal funding requirements over the medium term. At 30 June 2015, these facilities totalled £850 million in the form of committed bank facilities arranged on a bilateral basis with a number of international banks and private placement notes. Since the start of 2015, we have refinanced £477 million of facilities The financial covenants attached to these facilities are that EBITDA should be no less than 4 times interest and net debt should be no more than 3 times EBITDA; at 30 June 2015, these stood at 23 times and 0.8 times respectively. The Group does not consider that these covenants are restrictive to its operations. The maturity profile of the borrowings is detailed in Note 11 in the Accounts.

Net debt amounted to £467 million at 30 June 2015 and, at that date, un-drawn committed facilities were £385 million.

Net Operating Assets

The net operating assets of the Group at 30 June 2015 totalled £1,650 million, up £34 million on the same period in 2014. The main components of net operating assets are:

A key measure of Aggreko's performance is Return on Capital Employed (ROCE) (expressed as operating profit as a percentage of average net operating assets). For each first half, we calculate ROCE by taking the operating profit on a rolling 12-month basis and expressing it as a percentage of the average net operating assets at 30 June, 31 December and the previous 30 June. For the full year, we state the year's operating profit as a percentage of the average net operating assets as at 31 December, 30 June and the previous 31 December. The average net operating assets for the 12 months to 30 June 2015 were £1,652 million, down 1% on the same period in 2014; operating profit for the same period was £285 million.

In the first half of 2015 the ROCE decreased to 17% compared with 21% for the same period in 2014. This decrease was mainly driven by lower trading margins in our Power Projects business.

Shareholders' Equity

Shareholders' equity decreased by £19 million to £1,059 million in the six months ended 30 June 2015, represented by the net assets of the Group of £1,526 million before net debt of £467 million. The movements in shareholders' equity are analysed in the table below:

 Principal Risks and Uncertainties

In the day to day operations of the Group, we face risks and uncertainties. Our job is to mitigate and manage these risks and to aid this Board has a risk management process which is described on page 28 of the 2014 Annual Report and Accounts. Also set out on pages 28 to 33 of that report are the principal risks and uncertainties which we believe could potentially impact the Group, and these are summarised below:

· Economic activity

· Oil price volatility

· Exchange rate fluctuations;

· Political environment;

· Failure to collect payments or to recover assets;

· Competition;

· Product technology and emissions regulation

· Failure to conduct business dealings with integrity and honesty;

· Safety and security; and

· People retention.

We do not believe that the principal risks and uncertainties facing the business have changed materially since the publication of the Annual Report and we believe these will continue to be the same in the second half of the year.

Shareholder information

Our website can be accessed at www.aggreko.com. This contains a large amount of information about our business, including a range of charts and data, which can be downloaded for easy analysis. The website also carries copies of recent investor presentations, as well as Stock Exchange announcements.

GROUP INCOME STATEMENT

For the six months ended 30 June 2015 (unaudited)

GROUP STATEMENT OF COMPREHENSIVE INCOME

For the six months ended 30 June 2015 (unaudited)

GROUP BALANCE SHEET(COMPANY NUMBER: SC177553)

As at 30 June 2015 (unaudited)

GROUP CASH FLOW STATEMENT

For the six months ended 30 June 2015 (unaudited)

RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT

For the six months ended 30 June 2015 (unaudited)

GROUP STATEMENT OF CHANGES IN EQUITY

For the six months ended 30 June 2015 (unaudited)

As at 30 June 2015

GROUP STATEMENT OF CHANGES IN EQUITY

For the six months ended 30 June 2015 (unaudited)

As at 30 June 2014

NOTES TO THE INTERIM ACCOUNTS

For the six months ended 30 June 2015 (unaudited)

1 General information

The Company is a public limited company which is listed on the London Stock Exchange and is incorporated and domiciled in the UK. The address of the registered office is 120 Bothwell Street, Glasgow, G2 7JS, UK.

This condensed interim financial information was approved for issue on 6 August 2015.

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 2014 were approved by the Board on 5 March 2015 and delivered to the Registrar of Companies. The report of the auditors on those Accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under Section 498 of the Companies Act 2006.

The condensed consolidated interim financial information is unaudited but has been reviewed by the Group's auditors, whose report is on page 31.

2 Basis of preparation

This condensed consolidated interim financial information for the six months ended 30 June 2015 has been prepared in accordance with the Disclosure and Transparency Rules (DTR) of the Financial Conduct Authority (previously the Financial Services Authority) and 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 2014, which have been prepared in accordance with IFRSs as adopted by the European Union.

Going concern basis 

The Group's banking facilities are primarily in the form of committed bank facilities arranged on a bilateral basis with a number of international banks and private placement notes; facilities totalled £850 million at 30 June 2015. The financial covenants attached to these facilities are that EBITDA should be no less than 4 times interest (30 June 2015: 23 times) and net debt should be no more than 3 times EBITDA (30 June 2015: 0.8 times). The Group does not consider that these covenants are restrictive to its operations. The maturity profile of the borrowings is detailed in Note 11 to the Accounts. Having reassessed the principal risks and the Group's forecasts and projections, the directors considered it appropriate to adopt the going concern basis of accounting in preparing the interim financial information.

3 Accounting policies

Except as described below, the accounting policies are consistent with those of the annual financial statements for the year ended 31 December 2014, 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 earnings.

New and amended standards and interpretations need to be adopted in the first interim financial statements issued after their effective date (or date of early adoption). There are no new IFRSs or IFRICs that are effective for the first time for this interim period that would be expected to have a material impact on the Group.

4 Cashflow from operating activities

5 Segmental reporting

(a) Revenue by segment

(b) Profit by segment