Worley Limited · ASX:WOR
Worley — WorleyParsons — H1 FY2007 Earnings Presentation
42 slides from Worley's earnings presentation, Feb 8, 2007
Slide 1: Half Year Results / Acquisition of Colt
WorleyParsons resources & energy Half Year Results Acquisition of Colt John Grill, Chief Executive Officer, WorleyParsons David Housego, Chief Financial Officer, WorleyParsons Larry Benke, President, Colt Companies 8 February 2007 when experience counts
Slide 2: Disclaimer
WorleyParsons Disclaimer resources & energy This prosentation has been solely prapared by WorleyParsons Limited (“WorlayParsons”} and contains information regarding the proposed offar by WorleyParsons of fully paid ordinary shares (“Shares”) as part of a proposed renounceable pro-tata entitlement of
Slide 3: Agenda
WorleyParsons Agenda resources energy « Half Year Results = Acquisition of Colt « Entitlement Offer 3 when experience counts
Slide 4: Half Year Results December 2006
resources & eneigy SECTION 1 Half Year Results 31 December 2006
Slide 5: Highlights
WorleyParsons Highlights resources & energy " Half year net profit of $94.5 million up 53.0% on the first half FYO6 " Half year net profit up 22.3% on the second half of FY06 " EBIT growth of 23.1% to $131.2 million on the previous half «International operations contribute approx 70% " Basic EPS up
Slide 6: Material announcements
WorleyParsons Material announcements’ resources & energy " Acquisition of 100% of SEA Engineering Inc =» Awarded EPCM contract for Mobil Producing Nigeria " Awarded Project Management Services contract by Sipchem » Awarded 2nd Phase of Belene Project " Award of Umm Shaif engineering services contrac
Slide 7: Financial Performance
WorleyParsons Financial Performance resources & energy Growth $M 1H FYO? 2H FY06 on 2HFY06 Aggregated Revenue 1,459.8 1,326.6 10.0% EBIT 131.2 106.6 23.1% EBIT margin 8.0% 8.0% Profit before tax 127.4 105.2 21.1% Net Profit Net Margin 6.5% 5.8% Basic EPS (cents per share) 46.2 37.8 22.2% Operating C
Slide 8: Change in Net Profit v 2H FY06
WorleyParsons Change in Net Profit v 2H FY06 resources & energy 130.0 110.0 90.0 $M Infrastructure 70.0 Esperence share sale || Income Tax Minerals & Metals 50.0 Hydrocarbons 30.0 " Growth in Hydrocarbons, Minerals & Metals and Infrastructure « Esperance share sale $2.3m in 1H FY07 = Power affected
Slide 9: Segment results
WorleyParsons Segment results resources & energy Minerals & By Sector $M Hydrocarbons Power Metals Infrastructure Aggregated revenue 1,033.0 188.1 129.3 115.8 EBIT 103.1 19.6 19.5 10.9 Margin 10.0% 10.4% 15.1% 9.4% Aggregated revenue by segment Aggregated revenue by region 8% 34% 27% 17% mHydrocarbo
Slide 10: Growth
WorleyParsons Growth resources & energy Aggregated revenue $M EBIT $M 2464.4 199.5 131.2 102.3 32.1 40.4 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007 H1 @H2 Ht M@H2 Cashflow $M Dec 05 Dec 06 Dividend Dec 05 Dec 06 Operating cash flow 65.7 73.6 Interim (cents per share) 18.5 28.0 Investing cash
Slide 11: Outlook
WorleyParsons Outlook resources & energy = We expect the markets for WorleyParsons’ services will continue to be strong. Our key markets and sectors are experiencing positive conditions and we are well positioned to respond to these opportunities. Subject to conditions remaining favourable in these
Slide 12: Acquisition of Colt
WorleyParsons resources energy SECTION 2 Acquisition of Colt 42 when experience counts
Slide 13: Table of contents
WorleyParsons Table of contents resources energy « Transaction overview =» Overview of Colt = Colt financial profile « Funding structure 3 when experience counts
Slide 14: Transaction overview
Y CST Transaction overview " WorleyParsons has agreed to acquire the Colt Companies, a leading Canadian project services partnership which employs approximately 4,600 staff " Purchase price of C$1,035 million (approximately A$1,133 million) - multiple of 9.7 times pro forma EBITDA (12 months ended 3
Slide 15: Colt
C451 Colt = Colt is a leading provider of engineering, procurement, project management, construction and construction management services to the Canadian and Alaskan hydrocarbons and power sectors = €$106.3 million pro forma EBITDA for year ended 31 January 2007! = 47% compound annual growth rate si
Slide 16: Strategic rationale
1 C4ET Strategic rationale = Combination of Colt and WorleyParsons MEG gives WorleyParsons a leading presence in rapidly growing Canadian hydrocarbons industry ~ management teams with longstanding relationships with the key industry operators = Extends WorleyParsons’ tier 1 position in hydrocarbons
Slide 17: Financial impact
Y CST Financial impact = Purchase price of C$1,035 million represents a multiple of 9.7 times pro forma EBITDA (12 months ended 31 January 20071) = The Acquisition would have been 16.0% EPS accretive? (before amortisation and additional corporate costs) for the twelve months ended 31 December 2006 =
Slide 18: Integration strategy
1 C&T Integration strategy = Colt’s President Larry Benke will be responsible for WorleyParsons’ expanded Canadian operations, reporting to CEO John Grill ~ will include Colt, WorleyParsons MEG, Komex and HGE ~ Larry Benke will be alternate director for Bill Hall on the WorleyParsons Board ~ managem
Slide 19: Key transaction features
1 C&T Key transaction features = Purchase Agreement signed on Thursday 8 February, 2007 =" Due diligence involvement of key WorleyParsons executives, legal, accounting and tax advisers =" The acquisition is subject to regulatory approvals and customary conditions precedent = The transaction is expec
Slide 20: Transaction overview
« Transaction overview * Overview of Colt = Colt financial profile * Funding structure 20 when experience counts
Slide 21: Colt Overview
CST Colt Overview = Colt, founded in 1973, is a leading provider of design and project services to the oil & gas, refinery, pipeline, petrochemicals and power sectors =" CORD, founded in 1978, provides fabrication, modularisation and construction services to the hydrocarbons industry in Western Cana
Slide 22: Geographic locations
Geographic locations Toronto = Colt has offices located in Calgary, Edmonton, Sarnia and Toronto in Canada and in Anchorage, Alaska = These offices are close to major hydrocarbons and resources projects, in particular the Alberta oil sands =" The NANA/Colt joint venture provides EPCM services to oil
Slide 23: Why WorleyParsons? Colt's Objectives
1 C4ET Why WorleyParsons? ... Colt’s Objectives = Private ownership has dictated organic growth to-date = Vision is for aggressive, sustainable growth based on: ~ being the design and project services supplier of choice for clients and staff ~ optimising opportunities driven from the oil sands ~- ge
Slide 24: Market Overview
Market Overview 24
Slide 25: Canadian hydrocarbons industry
1 C&T Canadian hydrocarbons industry =" Canada estimated to have the second highest volume of proven oil reserves in the world = Of 179 billion barrels of proven reserves, 174 billion located in the oil sands = In 2005 oil production was over 2.5 million barrels per day' = Canada is currently the 8"
Slide 26: Canadian hydrocarbons industry
1 C&T Canadian hydrocarbons industry Thousand barrels per day «Canada attractive to International Oil Companies seeking reserves and politically stable investment climate * ©$125 billion in capital expenditures announced for the period 2006 to 2015 «New oil sands projects are economic at oil prices
Slide 27: Projects
Projects 27
Slide 28: Projects
Projects Colt operates at all stages of the project life cycle Enbridge Gateway Pipeline Project Enbridge Southern Lights, Alberta Clipper and Southem Access pipeline projects Mackenzie Gas Pipeline Project Conoco Phillips Parsons Lake Project Syncrude Bitumin Capacity Increase Projects r IDENTIFY 1
Slide 29: EPCOR / TransAlta Keephills Power Plant
EPCOR / TransAlta Keephills 3 Power Plant » 500 Megawatt, super-critical coal fired power plant » Project located near Edmonton, Alberta " Colt has completed all of the front-end development, including preliminary engineering, project planning, CAPEX and OPEX estimating and construction strategy dev
Slide 30: Imperial Oil MacKenzie Gas Pipeline Project
Imperial Oil MacKenzie Gas Pipeline Project « 30” OD, 1,250 km natural gas pipeline from the Beaufort Sea to Alberta and 10” OD 467 km NGL pipeline = Includes gas processing and ' ar Steere Pe compression facilities ae * Imperial Oil led consortium : (Aboriginal Pipeline Group, Shell, ConocoPhillips
Slide 31: Suncor Voyageur Hydrotreater Project
Suncor Voyageur Hydrotreater Project " § Hydrotreaters for Suncor Voyageur Oilsands project ~ 2diesel, 2 gas-oil and 1 Naptha hydrotreater " Sole source award under Supplier of Choice agreement " Also working mineable upstream projects = EDS underway, detail Engineering to start in June 2007 341 whe
Slide 32: Devon Jackfish SAGD Project
Devon Jackfish SAGD Project " 35,000 barrels per day Steam Assisted Gravity Drainage (SAGD) heavy oil production and associated facilities " Colt provided engineering, procurement and construction management of the module yard as well as field construction support = Due to remote site location, the
Slide 33: Syncrude - CoSyn Alliance
Syncrude - CoSyn Alliance " Alliance relationship with Syncrude since 1991 « Syncrude is the world’s largest oil sands producer " CoSyn relationship formed to carry out work exclusively for Syncrude’s mine and facilities operations — 490 Colt personnel " Scope of services include engineering and pro
Slide 34: Transaction overview
« Transaction overview * Overview of Colt = Colt financial profile * Funding structure 34 when experience counts
Slide 35: Colt financial performance
1 C&T Colt financial performance Colt has consistently delivered strong earnings growth " Pro forma EBITDA for year ended 31 January 2007 of C$106.3 million EBIT! Revenue by project type? 120 14% ‘Compound average growth rate = 47% 100 60 = 6 60 40 20 Alliances and Supptiers of Choice 20044 2C05A 20
Slide 36: Pro forma financial profile of combined business
WorleyParsons resources & energy Pro forma financial profile of combined business A$m; year ended 31 Dec 2006 WorleyParsons‘ Colt + WP Combined? Revenue 2,803.6 3,600.1 EBITDA 259.7 383.5 EBITDA margin 9.3% 10.7% EBIT 237.9 324.7 Net profit 172.0 219.3 Net profit pre goodwill amortisation? 173.2 239
Slide 37: Transaction overview
WorleyParsons resources energy « Transaction overview * Overview of Colt = Colt financial profile « Funding structure 37 when experience counts
Slide 38: Funding
WorleyParsons Funding resources & energy Funding structure = The purchase price of C$1,035 million (A$1,133 million) will be funded by a combination of debt and equity Funding Sources A$Sm Entitlement Offer 480 Exchangeable Shares 342 Debt funding 333 Total 1,155 ~ Assuming $22m transaction costs an
Slide 39: Funding: Exchangeable Shares
WorleyParsons Funding resources & energy Exchangeable Shares = Equity consideration to be received by Colt partners will be in the form of Exchangeable Shares - common structure in Canada ~ price set at Institutional Bookbuild Price = Exchangeable Shares will be economically equivalent to an ordinar
Slide 40: Funding: Debt financing
WorleyParsons Funding resources & energy Debt financing = Committed $550m bridge facility in place with lending banks " Sufficient to finance: ~ acquisition debt ($333m) ~ retail component of entitlement offer ($80m) ~ ongoing WorleyParsons working capital requirements and additional headroom ($137m
Slide 41: Entitlement Offer
WorleyParsons Entitlement Offer resources & energy Pro-rata Renounceabie Entitlement Offer = $480 million Pro-rata Renounceable Entitlement Offer " Eligible shareholders entitled to apply for 1 new share for every 9 shares held on 14 February 2007 (Record Date) at an offer price of $21.00 per share
Slide 42: Entitlement Offer timetable
WorleyParsons resources & energy Entitlement Offer Commencement of Trading Halt Institutional Entitlement Offer Bookbuild for Renounced Institutional Entitiements Record Date for Determination of Entitlements Prospectus Lodged Trading re-commences Setilemeni of Institutional Entitlement Offer Tradin