Slide 1: Full Year Results 2019
For personal use only Full Year Results 2019 Andrew Wood, CEO Full year results 2019
Slide 2: Disclaimer
Disclaimer For personal use only The information in this presentation about WorleyParsons Limited and its activities is current as at 21 August 2019 and should be read in conjunction with the Company’s Appendix 4E and Annual Report for the full year ended 30 June 2019. It is in summary form and is n
Slide 3: FY2019 summary
FY2019 summary Our strategy is delivering Improved financial performance For personal use only Underlying revenue growth of 17% plus ECR contribution Improved NPATA margins $6,439.1m $259.8m Aggregated revenue Underlying NPATA Balance sheet strengthened +36% growth from FY18 +43% growth from FY1
Slide 4: Overview: FY2019 achievements
Overview FY2019 achievements For personal use only Underlying revenue growth, in addition to contribution from ECR acquisition EBITA and NPATA growth, with higher NPATA margin Strengthened balance sheet and refinanced core debt facilities Financial results Transition cost synergies and reven
Slide 5: Health Safety and Environment
Health Safety and Environment For personal use only Our safety performance Employee Total Recordable Case Frequency Rate (TRCFR*) for FY19 was 0.11 (FY18: 0.12) Employee, Contractor & Subcontractor and Partner TRCFR for FY19 was 0.14 (FY18: 0.15) The Group’s HSE Committee focus areas H1 FY20 I
Slide 6: Responsible business at Worley
Responsible business at Worley We have always taken a responsible and For personal use only sustainable approach to our business This year we have: 50+ 26% 40% responsible business assessment requirements Active Senior executives Board members embedded into standard work processes Worley are women
Slide 7: Aggregated revenue and underlying EBITA
Aggregated revenue and underlying EBITA Revenue and EBITA growth For personal use only Half on half revenue Half on half underlying EBITA AUD’m H1 H2 AUD’m H1 H2 5,000.0 300.0 250 3,873 250.0 4,000.0 3,107 200.0 163 172 163 3,000.0 2,619 2,566 159 2,310 2,439 147 141 2,166 2,211 150.0 128 2,000.0 10
Slide 8: Backlog growth
Backlog growth For personal use only Backlog (AUD’b)* 20.0 18.0 Backlog continues to grow with increasing 17.6 17.4 18.0 16.4 contributions from both ECR and 16.0 WorleyParsons. 14.0 MPIS and MMM Services driving growth 12.0 10.8 10.6 9.9 Backlog growth across all sectors AUD’b 10.0 8.0 Refe
Slide 9: Earnings diversification – growth in opex and chemicals
Earnings diversification – growth in opex and chemicals For personal use only Business mix 100% 10% 10% 11% 9% Deliberate strategy over last three years 80% to increase earnings diversity and 55% 43% resilience with growth in opex based 60% 75% 81% contracts 40% 20% 48% Sector mix diversifying w
Slide 10: Long term asset contract wins in FY19
Long term asset contract wins in FY19 EMEA For personal use only CNOOC International, Buzzard Phase 2 - EPC EnQuest, E&C Term Contract Shell, SNS E&C Framework Agreement Perenco, SNS - General Engineering Services Opex based contract wins Americas Shell, San Joaquin Valley Engineering Services GSP O
Slide 11: Sector update
For personal use only Sector update Full year results 2019 11
Slide 12: Energy: upstream & midstream
Energy: upstream & midstream Upstream investment For personal use only Conventional oil and gas investment Pick-up in approvals of new upstream projects Billion boe Offshore Onshore required to match demand 25 25 Crude oil Gas Upstream investment to 2022 is estimated at 20 20 11% CAGR for gas an
Slide 13: Energy: power and new energy
Energy: power and new energy Renewables & electrification For personal use only Investment trend towards low carbon power generation and delivery: Global investment in power by technology solar and wind Coal power nuclear 2018 Gas power Oil power hydro Nuclear power networks and storage An
Slide 14: Chemicals: Market opportunity & focus
Chemicals Market opportunity & focus For personal use only Global chemicals industry capex mix (2019 to 2023) Accessing key growth markets China FDI market in China: Regulatory Europe changes on foreign ownership stimulating investment into China Leveraging core capability 10% Extensive delivery
Slide 15: Resources: mining, minerals & metals
Resources: mining, minerals & metals Market focus For personal use only Capex continues with strong market Mining, minerals and metals annual global capex fundamentals across key commodities Focus is on life of mine extension and increased investment in underground mining 2009 2010 2011 2012 2013
Slide 16: Australia's largest energy & resource service provider
Australia’s largest energy & resource service provider For personal use only Currently involved in over $100 billion of energy & resource investment in Australia Australian company of global significance Rio Tinto Newmont Largest exporter of high value services Koodaideri iron ore Tanami gold mi
Slide 17: Leader in the United States of America
Leader in the United States of America For personal use only Worley employs over 14,500 people in over 20 offices nationwide Engineer of Record for more than 15% of USA’s nuclear fleet 80 construction & fabrication sites nationwide #1 in the United States, we are… totalling 17,000 MW Largest Austr
Slide 18: Full Year Results 2019 – Tom Honan, CFO
For personal use only Full Year Results 2019 Tom Honan, CFO Full year results 2019 18
Slide 19: Statutory statement of financial performance
Statutory statement of financial performance For personal use only 30 June 2019 30 June 2018 ($m) ($m) REVENUE AND OTHER INCOME Professional services revenue 4,531.1 3,837.3 Procurement revenue 1,020.4 432.3 Construction and fabrication revenue 1,328.6 552.5 Interest income 36.5 5.5 Other income 7.7
Slide 20: Reconciliation of statutory to underlying NPATA results
Reconciliation of statutory to underlying NPATA results Adjusted for non-trading items For personal use only FY2019($m) FY2018($m) Note 1: Acquisition & Related Transition Costs FY2019($m) FY2018($m) Statutory result (NPAT) 151.9 62.2 Acquisition costs 50.6 5.9 Acquisition & related transition costs
Slide 21: FY2019 key financials
FY2019 key financials For personal use only Statutory result FY2019 FY2018 vs. FY2018 Statutory and aggregated revenue increased Total revenue ($m) 6,924.3 4,835.8 43.2% due to the acquisition of ECR during the year EBITA ($m) 308.1 278.0 10.8% and underlying performance. NPATA ($m) 172.3 72.8 136
Slide 22: Segment result by line of business
Segment result By line of business For personal use only FY 2019 FY 2018 vs. FY 2018 ECR driving growth in MPIS and MMM Services Aggregated Revenue ($m) 6,439.1 4,749.2 35.6% Energy & Chemicals Services 2,854.2 2,218.7 28.6% Margin improvement in MMM Services due to Mining, Minerals & Metals Ser
Slide 23: Headcount growing: staff utilization on target
Headcount growing: staff utilization on target Worley Global Headcount ECR For personal use only Headcount Change to Prior Month Acquisition Staff Utilization ECR Acquisition 90% UKIS Acquisition 88% 86% Utilisation % 84% 82% Target Monthly rate 80% 78% Apr-17 Apr-18 Apr-19 Oct-16 Jan-17 Oct-17 Jan-
Slide 24: Key operating indicators: margin growth
Key operating indicators Margin growth For personal use only Trend of margin growth continues with strong EBITA Margin % focus on cost control 7.0% Increased volumes of lower margin construction 6.0% work in North America, as per acquisition business model 5.0% 4.0% FY16 HY17 FY17 HY18 FY18 HY19
Slide 25: Key operating indicators: operating leverage
Key operating indicators Operating leverage For personal use only WorleyParsons – Operating Leverage ECR – Operating Leverage Overheads ($) Overheads ($) Revenue ($) Revenue ($) Revenue Overhead Revenue Overhead HY18 FY18 HY19 FY19 HY18 FY18 HY19 FY19 Cost control is embedded in the cultures of bo
Slide 26: Capital management
For personal use only Full Year Results 2019 Capital management Full year results 2019 26
Slide 27: Cash flow, net debt and balance sheet
Cash flow, net debt and balance sheet Continuing focus For personal use only m$ Operating Cash Flow Gearing Ratio* % 300 35% UKIS Acquisition ECR 30% Acquisition 200 25% 100 20% Gearing ratio = net debt/net debt + equity 0 15% FY16 HY17 FY17 HY18 FY18 HY19 FY19 FY16 HY17 FY17 HY18 FY18 HY19 FY19 -10
Slide 28: Gearing metrics
Gearing metrics Balance sheet metrics For personal use only FY2019 HY2019 Gearing below target band of 25-35% Gearing ratio1 20.9% 25.7% Average maturity of debt increased to 3.3 years Facility utilization2 72.7% 27.6% with new debt facility established in February Average cost of debt 4.5% 4.5%
Slide 29: Liquidity
Liquidity Core facility refinanced For personal use only Balance sheet further 1,800 strengthened Core debt facility refinanced 1,600 1,400 during FY19. New facility consists 1,200 of USD500 million multi-currency 1,000 revolving facility and USD800 A$m 800 million term loans 600 400 Maintains
Slide 30: ECR – Acquisition update
For personal use only ECR – Acquisition update Chris Ashton, COO Full year results 2019 30
Slide 31: Transition progress summary – on track
FY2019 summary Transition progress summary – on track For personal use only Activities Progress Achievements Completion achieved on time Completion Activities Day 1 successful and objectives met Transition underway and meeting expectations Transition Action plans developed and being aggressi
Slide 32: Synergy realization – cost synergies
Synergy realization – cost synergies For personal use only Cost synergy target increased from initial $130m to $150m, expected to progressively deliver benefits over the next two years Cost synergies AUD’m Estimated $150m p.a. Cost synergies within two years Migration of systems and data underway
Slide 33: Increasing GID uptake to generate incremental margin synergies
Increasing GID uptake is expected to generate incremental margin synergies within the next three years For personal use only Case study - location Source: Company financials GID % Gross Margin (GM) Net Operating Profit (NOP) GID as % of Billable Hrs $35 30% $30 25% How does $25 20% increasing GID $2
Slide 34: Synergy realization – margin synergies: shared services
Synergy realization – margin synergies: shared services For personal use only Shared services blueprint Horizon 1 Plan to extract additional value from shared Activities Progress services over three horizons (in the next three years): Transition end-to-end Project Accounting Horizon 1 – retire T
Slide 35: Revenue synergies: MPIS – Alaska EPCm to EPC
Synergy realization – revenue synergies: MPIS Alaska EPCm to EPC For personal use only Contract Existing EPC contract from BP for their Cat B & C projects on the North Slope WorleyParsons brings... ECR brings… NANA WorleyParsons a joint venture with a native corporation in Anchorage and on the North
Slide 36: Revenue synergies: MPIS – Gulf of Mexico BP Mad Dog 2
Synergy realization – revenue synergies: MPIS Gulf of Mexico BP Mad Dog 2 For personal use only Hook-up and commissioning integration services for BP’s Mad Dog 2 project and the Argos deep- water platform in the Gulf of Mexico. Under the contract, Worley will prepare for arrival of the FPU in Contra
Slide 37: Revenue synergies: IntecSea – Netherlands refinery
Synergy realization – revenue synergies: IntecSea Netherlands asset advisory consultancy for refinery For personal use only The technical experts within the Advisian asset advisory team are supporting refinery client via the Contract E&C Services in the Hague for a number of customers where material
Slide 38: Revenue synergies: IntecSea – Europe master services agreement
Synergy realization – revenue synergies: IntecSea Europe confidential customer - master services agreement For personal use only Using existing Advisian relationship to facilitate a refinery audit by the legacy ECR consultancy team Contract for an asset Advisian had assisted with the technical due d
Slide 39: Revenue synergies: Energy & Chemicals – Spain Dynasol
Synergy realization – revenue synergies: Energy & Chemicals Services Spain Dynasol, chemicals plant debottlenecking revamp For personal use only Pre-FEED + FEED for the debottlenecking revamp to increase capacity of an existing elastomers plant Contract in Spain. Scope includes pre-award of equipmen
Slide 40: Revenue synergies: Energy & Chemicals – Canada East
Synergy realization – revenue synergies: Energy & Chemicals Services Canada East main duct redesign – confidential customer For personal use only Leveraging the Sarnia office chemicals expertize to complete FEL 1 /2 for the main duct redesign Contract project WorleyParsons brings... ECR brings… Trac
Slide 41: Transformation
Transformation Drive benefits from our new scale and For personal use only market leadership position Transformation Focus on mutually beneficial long term outcomes with our energy, chemicals and resources customers Capitalise on key macro trends – energy transition, automation and data analyt
Slide 42: Outlook
For personal use only Outlook Andrew Wood, CEO Full year results 2019 42
Slide 43: Progress in FY19
Progress in FY19 For personal use only Revenue* up 36%, EBITA* up 32%, NPATA* up 43% Acquisition complete Integration of ECR acquisition meeting expectations with more synergies developed in addition to those identified pre-acquisition Operating leverage continues Proforma backlog increase
Slide 44: Group outlook
Group outlook For personal use only The energy, chemicals and resources market indicators and growth in backlog provide evidence of continued improvement in market conditions. However, our markets are being tempered by macroeconomic global uncertainty. As a result of the ECR acquisition, we have enh
Slide 45: Q&A
For personal use only Full Year Results 2019 Q&A Full year results 2019 45
Slide 46: Supplementary information
For personal use only Full Year Results 2019 Supplementary information Full year results 2019 46
Slide 47: Segment result by region
Segment result By region By region For personal use only FY 2019 FY 2018 vs. FY 2018 ECR drives growth in all regions, and Aggregated Revenue ($m) North America in particular 6,439.1 4,749.2 35.6% APAC 1,347.0 1,080.9 24.6% Strong performance in Norway and EMEA 2,656.6 2,121.7 25.2% Middle East
Slide 48: Segment result by sector
Segment result By sector For personal use only FY 2019 FY 2018 vs. FY 2018 ECR brings growth in all sectors, and Aggregated Revenue ($m) 6,439.1 4,749.2 35.6% construction & fabrication Energy 4,480.1 3,720.1 20.4% Professional Services ¹ 3,418.6 3,167.6 7.9% Strong growth in Canada, Oman and Co
Slide 49: Global operations and employee numbers
Global operations and employee numbers For personal use only 58,100 people 51 countries 49 Full year results 2019
Slide 50: Backlog increased
Backlog increased For personal use only Backlog by region AUD’b Backlog by sector AUD’b as at 30 June 2019 as at 30 June 2019 2.2 2.3 Americas (AM) Chemicals 4.7 Europe, Middle East, 7.8 Energy Africa (EMEA) Australia, Pacific, 7.9 Resources Asia, China (APAC) 11.1 50 Full year results 2019
Slide 51: Backlog increased
Backlog increased For personal use only Backlog* by region Backlog* by sector as at 30 June 2019 as at 30 June 2019 20.0 20.0 0.3 1.6 0.1 (0.1) 0.5 18.0 18.0 0.8 16.0 16.0 14.0 14.0 12.0 12.0 AUD’b AUD’b 10.0 10.0 16.4 18.0 16.4 18.0 8.0 8.0 6.0 6.0 4.0 4.0 2.0 2.0 - - *Backlog for 30 June 2018 incl
Slide 52: Underlying earnings profile
Underlying earnings profile For personal use only Group underlying EBITA AUD’m H2 H1 439.8 412.8 321.9 313.0 248.0 274.6 250.2 162.6 171.7 146.9 191.8 159.3 141.3 162.6 127.7 FY2015 FY2016 FY2017 FY2018 FY2019 Group underlying NPATA AUD’m H2 258.4 259.8 H1 166.6 182.0 146.3 135.0 156.4 86.3 97.5 71.
Slide 53: Margin profile
Margin profile Underlying EBITA % For personal use only H1 7.0% 6.9% 6.6% 6.3% 6.6% 6.3% 6.5% 6.4% H2 6.1% 6.2% 5.6% 5.9% 6.1% 5.3% 5.1% Total FY2015 FY2016 (Restated) FY2017 FY2018 FY2019 Underlying NPATA % H1 4.0% 4.0% H2 4.0% 3.8% 4.0% 4.0% 3.6% 3.7% 3.1% 3.3% 3.2% 3.1% Total 2.9% 3.0% 2.6% FY201
Slide 54: Revenue split
Revenue split Region aggregated revenue (%) Sector aggregated revenue (%) For personal use only 8% 15% 10% ANZ Asia 20% 6% Energy 20% Canada Chemicals Europe 18% Resources USA & LAM 70% Middle East & Africa 33% Region aggregated revenue (%) (proforma) Sector aggregated revenue (%) (proforma) 7% 10%
Slide 55: Revenue reconciliation
Revenue reconciliation For personal use only FY2019 ($m) FY2018($m) vs FY2018 Revenue and other income 6,924.3 4,835.8 43.2% Less: Procurement revenue at nil margin (608.0) (94.4) 544.1% Less: Pass through revenue at nil margin (32.4) (157.3) (79.4%) Plus: Share of revenue from associates 183.0 170.
Slide 56: EBITA reconciliation
EBITA reconciliation For personal use only FY2019 ($m) FY2018 ($m) EBITA 308.1 278.0 Add: impact of acquisitions, comprised of: Acquisition costs 50.6 5.9 Transition costs 35.0 - Onerous lease contracts 8.9 - Bridging facility fee 4.2 - Foreign exchange gain on term deposits (3.4) - Add: impact of t
Slide 57: Cash flow
Cash flow For personal use only FY2019 ($m) FY2018 ($m) EBITA 308.1 278.0 Add: Depreciation, amortization 93.2 68.0 Less: Interest and tax paid (42.0) (81.5) Less: Working capital/other (123.0) (4.8) Net cash inflow from operating activities 236.3 259.7 Cash restructuring costs paid 18.8 34.0 Underl
Slide 58: Cash flow: bridge to cash balance
Cash flow Bridge to cash balance For personal use only Underlying operating Underlying op. cash flow $255.1m cash flow – 255.1 Cash one off costs paid – 18.8 273 (34) $18.8m for one off (11) (99) 492 non-trading items (946) (29) including $31m of 278 (18) (1) 31 (31) 16 1062 interest received Fu
Slide 59: Liquidity and debt maturity
Liquidity and debt maturity For personal use only Liquidity Summary AUD’m FY2019 HY2019 Change Liquidity Loan, finance lease & overdraft facilities1 2,962 2,373 24.8% Less: facilities utilized2 (2,153) (1,178) 82.8% Available facilities 809 1,195 (32.3%) Plus: cash 494 343 44.0% Total liquidity 1,30
Slide 60: Foreign exchange translation impact
Foreign exchange translation impact For personal use only Movement in major currencies against AUD (indexed) Average exchange Spot exchange rate Currency rate movement movement 106 104 BRL 7.7% (5.8%) 102 100 CAD (3.8%) (5.8%) 98 CNY (3.3%) (1.1%) 96 EUR (3.6%) (3.1%) 94 92 GBP (4.0%) (1.7%) 90 NOK
Slide 61: Foreign exchange
Foreign exchange 6.0 Impact total EBITA For personal use only 4.0 4.4 2.0 A $m 0.7 0.7 0.6 0.4 0.1 0.4 1.2 0.2 1.4 0.1 0.5 0.3 0.3 0.5 - (1.3) (2.4) (2.9) -2.0 -4.0 CAD CLP CNY EUR GBP KWD KZT NOK NZD OTHER QAR US USD ZAR BND INR NGN BGN Pegged 15 Group EBITA FX translation 10 11 12 5 A $m 0.1 5.2 0
Slide 62: Acronyms
Acronyms For personal use only APAC – Australia, Pacific, Asia, China HSE – Health Safety and Environment AM – Americas LNG – Liquefied Natural Gas ASX - Australian Securities Exchange MENA – Middle East & North Africa CAGR – Compound Annual Growth Rate MP&IS – Major Projects and Integrated Solution
Slide 63: Worley
Worley energy | chemicals | resources