Trading Update

19 November 2015

Berendsen plc

Trading Update

The Board of Berendsen plc ("the Group'') today issues a Trading Update for the period from 1 July 2015, based on the management accounts for the four month period up to 31 October 2015 ("the period").

Trading

Trading in the period was in line with management's expectations with higher underlying (at constant exchange rates and before acquisitions) revenue and operating profit growth since the half year, as expected. Compared with the equivalent period last year, underlying Group revenue was up 3% with underlying Group operating profit well ahead. In addition, we have sold a site in UK Workwear in the period and the gain on this largely offsets the £2.1 million closure costs of the Croydon plant announced at the half year. For the 10 months to 31 October, our underlying revenue growth was 2.4% and our underlying operating margin increased by 30 bps compared with the equivalent period last year. Reported revenue for the Group, after the negative effect of currency translation, was down 4% year to date.

Workwear made good progress, with Germany in particular growing revenue strongly and increasing its market share. Facility saw good underlying development, particularly in our Cleanroom business which delivered excellent organic growth through a good pipeline of contracts and add-on services to existing markets. Revenue in the period in our UK Flat Linen business was similar to last year. In our Manage for Value businesses, our underlying revenue grew at a similar pace to the first half.

We delivered a good level of free cash flow in the period, resulting in lower net debt than at the half year and we continue to target converting around 100% of our profit after tax into free cash flow for the year as a whole. We are pleased to announce that our post-tax return on invested capital (ROIC) is now in excess of 10% on a rolling 12-month basis to the end of October.

At the end of September 2015, we acquired the assets and customer contracts of White Knight Laundry Services in UK Hotels. The laundry, based in Reading, provides new capacity and the opportunity to develop a superior operating model based on sophisticated lean linen processing technology. This will increase Berendsen's capability to deliver more customised services to our customers. In addition, we have made a number of smaller bolt-on acquisitions, primarily in Scandinavia, in Workwear and Facility. Total acquisition consideration for the year to date is £10 million.

Summary and Outlook

The Group delivered good underlying progress in the period, which reflects continued momentum in line with management's expectations. Our reported results continue to be adversely impacted by currency translation and we see little sign of this diminishing. However, as previously guided, the Board expects the Group to achieve a further year of good underlying progress.

Strategy update

As previously announced, Berendsen is today hosting an Analyst and Investor event to present the findings and implementation proposals of its strategy update. The essence of the strategic update is evolutionary, building on strong market positions and a proven business model to accelerate the pace of delivery.

To facilitate the Group's belief in customer service as the core of strategic development, the Group is completing its Business Line model by creating two new Business Lines in the form of Hospitality and Healthcare, alongside the established business lines of Workwear and Facility where we will also establish separate management teams for our Mat and Washroom businesses in addition to Cleanroom.

Senior management presentations will present four categories of strategic actions to be implemented at both Group and Business Line level. These include Customer/Market Focus, Operational Excellence, Organisation Capability and Effective Use of Capital. Particular emphasis will be placed on enhancing operational excellence across the Group and on increasing business development capability to support both organic and bolt-on acquisition growth opportunities. There is scope for continued growth through bolt-on acquisitions.

The Group believes that through this increased focus, the Group is well placed to sustain revenue growth of at least 2% above GDP per annum before currency effects and expects further margin progress to achieve underlying EPS growth ahead of this.

The Group has delivered high levels of cash generation and capital allocation remains a key discipline. This discipline will continue to be applied to prioritise investment opportunities across the Business Lines as the Group increases its level of investment in good near term opportunities particularly in Workwear and Cleanroom whilst expecting to maintain double-digit ROIC.

We have a detailed plan to manage the implementation of these changes and actions through 2016 and expect to be reporting fully under the new business line structure from the beginning of 2017.

In his first investor event since becoming Chief Executive Officer in August this year, James Drummond stated:

"I am delighted to be updating the investment community on the next stage of our strategic development. The strategy continues to build on the Group's well invested base and strong market positions and the Board re-confirms that significant growth opportunities remain in the Group's chosen markets."

The presentation slides will be on the company's website (www.berendsen.com/investors) at 14.00 GMT today in conjunction with the commencement of the event and an audio webcast of the Group presentation will also be available on the website on Friday 20 November.

For further information contact:

Note:

1. Berendsen plc is a focused European textile maintenance business with leading positions in most of the countries in which it operates. As a focused business we are able to mobilise our resources to drive our strategies in our core area of expertise.

2. All financial information sourced from management accounts; operating profit and earnings per share stated before exceptional items and amortisation of customer contracts and intellectual property rights.

3. Statements made in this announcement that look forward in time or that express management's beliefs, expectations or estimates regarding future occurrences are "forward-looking statements" within the meaning of the United States federal securities laws. These forward-looking statements reflect the Group's current expectations concerning future events and actual results may differ materially from current expectations or historical results.