AEA Annual Results 31 March 2007 Andrew McCree and Alice Cummings 14 th June, 2007 Linklaters, One Silk Street, London

Group highlights Financial performance Turnover up 35% Adjusted Operating Profit up 121% Good operating cash performance Net debt has reduced by £7.9m to £21.4m Good market Energy & climate change Orders up 26% to £91m Growth strategy Organic and acquisition Successful disposal of non-core businesses to Vision Capital Management Significant strengthening of the management team

Financial review Alice Cummings, CFO 14 th June 2007

Financial summary £m Turnover Adjusted Operating Profit PBT Cash flow used in operations (4.8)(12.2) Net Debt

Adjusted Operating Profit £m Environment Central costs (3.8)(7.2) Adjusted Operating Profit Central costs reduction programme achieved Annualised run rate of £3.0m 48 staff have left

PBT £m Adjusted Operating Profit Non-recurring items Pension gain Re-financing costs(0.4)(3.0) Redundancy costs -(1.6) Operating profit Net finance costs (1.4) (3.1) PBT

Cash flow £m Cash flow from operations (4.8)(12.2) Net interest / tax (2.8)(6.2) Capital expenditure (1.7)(5.7) Disposal proceeds (net) Share issue Other (0.2) 1.3 Movement in Net Debt Opening Net Debt(29.3)(59.0) Closing Net Debt(21.4)(29.3)

Cash flow from operations £m Cash flow from operations (4.8)(12.2) Disposed business outflow Legacy outflow Cash from continuing operations

Legacy provisions £m Provisions Current element

Pension benefit liability £m Liabilities (366.9) (546.2) Assets (92.2) (116.2) Assets Funding Equity Corporate Bonds Government Bonds Infrastructure Other assets

Summary Financial Performance Adjusted Operating Profit up Profit to cash conversion 94% Central cost reduction achieved Balance Sheet Good headroom on facilities Legacy provisions down to £26.0m Going Forward Continued cost control Increasing investment for growth

Business review Andrew McCree, CEO 14 th June 2007

Performance highlights Sales Sales up 35% from £55.8m to £75.2m Orders Orders up 26% from £72.5m to £91.0m Secured sales for the new year 57% (2006: 52%) Pipeline ~ £220m Utilisation 83% Half year 78%

AEA – Markets and customers Markets Energy Air quality Resource efficiency – waste policy Transport Knowledge management Customer base 76% Government 5% Devolved Administrations 13% Private sector 6% International

Contract life cycle Commoditised programme management Technical committees Policy Policy implementation Programme management Contract Life Cycle

UK highlights Policy support Defra: Market transformation programme DfT: Transport environmental impacts TFL: London low emission zone scientific framework Policy implementation Carbon Trust:Applied research portfolio management Defra:Envirowise England Defra: National air emissions inventory Defra:Construction waste platform DfT: SAFED for vans DTI: Emerging energy technologies programme DTI: Knowledge transfer partnerships programme Scottish Executive:Air quality archive Scottish Executive:Envirowise Scotland Private sector Big Lottery Fund:Research grant programme

EC and international highlights Policy support Sales to the EC rose by 34% from £3.5m to £4.7m Major energy security project Ten new environmental policy support contracts Policy implementation Energy and Environment Programme for Chinese Government UK-Russia Closed Cities Partnership Impacts of Climate Change on Chinese agriculture

Growth update

A growing market EU Enlargement - Romania Global drivers Climate change Energy security

Growth - organic & acquisitions Organic – White Paper Energy efficiency & carbon management Carbon trading and reduction Government estate Resource efficiency Low carbon transport Organic – other Scotland & Wales EU expansion and aid Acquisitions Energy, environment, buildings & transport consultancies Policy, programme management & technical services Quality of earnings/clients – integration risk Good funnel – strong prospects in US, UK

Strategic goals Double revenues Aggressive organic growth Focused acquisition programme Sustain mid-teen margins Increase utilisation Maintain cost control Enhance management Focus on commercial & marketing skills

Summary Good market Focus on organic & acquisition growth Management team strengthened Performance is getting stronger

AEA Annual Results 31 March 2007 Andrew McCree and Alice Cummings 14 th June, 2007 Linklaters, One Silk Street, London