Worley Limited · ASX:WOR
Worley — WorleyParsons — H1 2013 Earnings Presentation
45 slides from Worley's earnings presentation, Feb 13, 2013
Slide 1: Half year results 2013
For personal use only Half year results 2013 Andrew Wood
Slide 2: Overview
Overview First half earnings in line with guidance For personal use only ► Aggregated revenue of $3,879m, up 14%* ► Hydrocarbons professional services revenue and margin up* ► Strong contribution from lower margin reimbursable EPC activity, particularly from our fabrication and construction business
Slide 3: Financial highlights
Financial highlights For personal use only HY13 HY13 vs. HY12 Aggregated revenue $3,879 m 14% EBIT $252 m 2% Net profit after tax $155 m 2% Operating cash flow $125 m 95% Basic earnings per share 63.0 c/s 2% Interim dividend 41.5 c/s 4% The IFRS financial information contained within this presentati
Slide 4: Zero Harm
For personal use only Zero Harm is our goal and to get there we strive for year on year improvement Performance remains good but we are further increasing our effort to ensure continued improvement Commenced a number of programs across the Group including: • Board and Executive Committee struc
Slide 5: Snapshot
Snapshot For personal use only Increased market volatility primarily Growth in unconventional oil and gas driven by fluctuating commodity prices developments and escalating project costs Aging assets and greater regulatory South Africa impacted by decline in requirements driving increased de
Slide 6: Snapshot
Snapshot For personal use only Diversified operations enabled Increased project awards from tier growth in volatile markets 2 customers Canada, and in particular Local global model implemented WorleyParsonsCord, contributed to with outcome of customer focus growth in Hydrocarbons and deliver
Slide 7: Local delivery, global support
Local delivery, global support For personal use only 2.9 million workshare hours (HY2012: 2.1 million) 40,400 people 165 offices 41 countries 7
Slide 8: Significant awards for HY2013
Significant awards for HY2013 For personal use only 61 significant and long term contracts / projects 8
Slide 9: Improve contracts
Improve contracts For personal use only ► Improve remains a key differentiator ► Demand for our Improve services continues to increase ► Randy Karren appointed to the Executive Committee as Group Managing Director – Improve ► Total of 19 new Improve contracts awarded ► 6 contracts renewed ► Currentl
Slide 10: Financial results
For personal use only Financial results Simon Holt
Slide 11: Financial profile
Financial profile For personal use only $m HY09 HY10 HY11* HY12 HY13 vs. HY12 Aggregated Revenue 3,256 2,548 2,905 3,399 3,879 14% EBIT 315 210 193 248 252 2% EBIT Margin 9.7% 8.2% 6.6% 7.3% 6.5% (0.8%) Net profit 198 138 119 152 155 2% Net profit margin 6.1% 5.4% 4.1% 4.5% 4.0% (0.5%) Basic EPS (cp
Slide 12: Financial profile
Financial profile For personal use only Robust aggregated revenue Hydrocarbons primary contributor to EBIT growth Minimal foreign exchange impact Global support costs remain flat at approximately 4.5% of aggregated revenue Robust aggregated revenue growth 12 * The underlying result for FY11
Slide 13: Margin profile
Margin profile For personal use only Hydrocarbons professional services revenue and margin have increased Increased contribution from reimbursable EPC, including WorleyParsonsCord, has impacted Hydrocarbons margin Power impacted by uncertainty in North America and cancellation of key governmen
Slide 14: Hydrocarbons
Hydrocarbons For personal use only Record aggregated revenue 12% EBIT growth from HY2012 Australia grew in challenging market conditions Reduced activity in Europe, the Middle East and Sub Saharan Africa Increased activity in the US Strong performance and growth in Canada 14 * Regions in con
Slide 15: Power
Power For personal use only Europe impacted by cancellation of key government project Latin America experienced increased material costs on a lump sum project The US grew despite market uncertainty The Australian power generation asset management business was consolidated into Transfield Wor
Slide 16: Minerals, Metals & Chemicals
Minerals, Metals & Chemicals For personal use only Aggregated revenue up 21% on HY12 5% EBIT growth in challenging market conditions Australia market conditions deteriorated in the half Geographical diversification with Australia now 43% of aggregated revenue versus 63% in prior year Chemi
Slide 17: Infrastructure & Environment
Infrastructure & Environment For personal use only Increased environmental work for the Hydrocarbons sector Softening in the Australian resources sector had a flow-on impact for Western Australia Reduced activity in Canada, the Middle East, Sub Saharan Africa and the US Demand for resource i
Slide 18: Cash Flow
Cash Flow For personal use only $m HY09 HY10 HY11* HY12 HY13 EBIT 315 210 203 248 252 Depreciation and amortization 40 43 47 50 51 Interest and tax paid (103) (132) (56) (64) (89) Working capital / other (17) 27 (69) (170) (89) Net cash inflow from operating activities 235 148 125 64 125 Net cash ou
Slide 19: Gearing and key metrics
Gearing and key metrics For personal use only Key Metrics FY10 FY11* FY12* HY13 Gearing ratio 26% 22% 20% 20% Facility utilization 61% 53% 51% 55% Average cost of debt 5.2% 5.7% 5.7% 5.5% Average maturity (years) 3.8 4.6 3.8 4.2 Interest cover ** 13.3x 12.0x 12.4x 12.0x Net Debt/EBITDA ** 1.2x 0.9x
Slide 20: Liquidity
Liquidity For personal use only Liquidity Summary $m FY10 FY11 FY12 HY13 Loan & OD facilities 1,286 1,277 1,445 1,705 Less: facilities utilized* (782) (680) (740) (946) Available facilities 504 597 705 759 Plus: cash 141 171 247 434 Total liquidity 645 768 952 1,193 Bonding facilities 669 682 787 77
Slide 21: Sector outlook
For personal use only Sector outlook Andrew Wood
Slide 22: Hydrocarbons
Hydrocarbons For personal use only HY13 vs. HY12 Aggregated revenue $2,672 m 14.0% % of Group aggregated revenue 69% EBIT $301 m 11.9% Margin 11.3% 0.2% High level of unconventional oil and Low cost of natural gas in US gas development activity driving downstream Remain well positioned in oil
Slide 23: Hydrocarbons Key project awards
Hydrocarbons Key project awards Chevron North Sea Limited – For personal use only Rosebank front end engineering design (FEED), United Kingdom BP Iraq NV, PetroChina and State Oil Marketing Organisation of the Republic of Iraq – Rumaila oil field engineering, procurement and management services,
Slide 24: Hydrocarbons Key Improve awards and renewals
Hydrocarbons Key Improve awards and For personal use only renewals CNOOC and Shell Petrochemicals Company Limited – site Improve engineering service contract, China Canadian Natural Resources Limited – engineering services, Canada Inpex – integrity and maintenance contract, Australia Talisma
Slide 25: Hydrocarbons Sector outlook
Hydrocarbons For personal use only Sector outlook International majors have announced increased capital expenditure commitments for CY2013 Favourable economics driving gas utilization and oil production projects in the US High number of greenfield and brownfield opportunities Improve market
Slide 26: Power
Power For personal use only HY13 vs. HY12 Aggregated revenue $303 m 16.5% % of Group aggregated revenue 8% EBIT $31 m* 11.7% Margin 10.3% 0.5% ► Continued uncertainty in North America ► Key resource related power projects have not been impacted by mining ► Focus on developing long term Improve inves
Slide 27: Power Key project awards
Power For personal use only Key project awards Polska Grupa Energetyczna – site characterisation and licensing / permitting services for the nuclear power plan development program, Poland Tennessee Valley Authority (TVA) – plant outage and support at various fossil plants, US Akkuyu NGS Elektr
Slide 28: Power Key Improve awards and renewals
Power For personal use only Key Improve awards and renewals Bruce Power – sustaining capital projects at nuclear facilities, Canada US Government, Department of Energy, National Nuclear Security Administration – technical engineering and programmatic support, US Kozloduy Nuclear Power Plant –
Slide 29: Power Sector outlook
Power Sector outlook For personal use only Medium to long term outlook remains strong outside of US Expect growth to continue in fossil Improve business in the US, Canada and Australia New build opportunities in Latin America, South East Asia, Sub Saharan Africa and the Middle East Focus on
Slide 30: Minerals, Metals & Chemicals
Minerals, Metals & Chemicals For personal use only HY13 vs. HY12 Aggregated revenue $484 m 21.0% % of Group aggregated revenue 12% EBIT $70 m 5.1% Margin 14.5% 2.3% ► Diversified operations have delivered ► Volatility in iron ore prices has continued growth in the developing impacted activity world
Slide 31: Minerals, Metals & Chemicals Key project awards
Minerals, Metals & Chemicals Key project awards For personal use only AngloGold Ashanti – Gramalote gold project, Colombia Pacific Aluminium – Katherine to Gove gas project, Australia Elwady Company – phosphoric fertilizers pre-feasibility study, Egypt Votorantim Metais – Rondon alumina proj
Slide 32: Minerals, Metals & Chemicals Key Improve awards and renewals
Minerals, Metals & Chemicals For personal use only Key Improve awards and renewals Minera Escondida (BHPB) – Escondida Improve contract, Chile Tasnee – waste heat boiler solution, Saudi Arabia Xstrata Nickel – MSA, Canada Stepan Company – chemicals plant sustaining capital EPCM, US 32 OneSte
Slide 33: Minerals, Metals & Chemicals Sector outlook
Minerals, Metals & Sector outlook Chemicals Improving near term outlook for iron For personal use only ore and metallurgical coal Medium to long term outlook remains strong Customers’ capital programs focused on productivity improvements New developments are increasingly in developing countr
Slide 34: Infrastructure & Environment
Infrastructure & Environment For personal use only HY13 vs. HY12 Aggregated revenue $420 m 6.4% % of Group aggregated revenue 11% EBIT $45 m 18.4% Margin 10.8% 3.3% ► Hydrocarbons customers seeking to ► Regulation changes in Brazil have procure enabling front end environmental opened opportunities i
Slide 35: Infrastructure & Environment Key project awards
Infrastructure & Environment For personal use only Key project awards Alderon Mining – rail and terminal expansion pre-feasibility, Canada Consórcio Complexo Tapajós – environmental impact assessment for Sao Luiz do Tapajos dam, Brazil Caltex – Kurnell port and berthing project, Australia Ec
Slide 36: Infrastructure & Environment Key Improve awards and renewals
Infrastructure & Environment Key Improve awards and renewals For personal use only Enbridge – remediation program, Canada BP – oil spill response planning framework contract, US and Canada BP – lighthouse restoration MSA, Global Woodside Petroleum – environmental services panel contract, Aus
Slide 37: Infrastructure & Environment Sector outlook
Infrastructure & Environment Sector outlook For personal use only Growth in unconventional oil and gas driving demand for environment and water services Demand for resource infrastructure continues to grow in Sub Saharan Africa and Latin America Increased demand for remediation, decommissionin
Slide 38: Summary
Summary ► Robust aggregated revenue growth ► Expansion in key growth markets of For personal use only across the sector groups despite the China and Brazil continues volatile markets ► Demand for our Improve offering ► Fluctuating commodity prices and remained strong escalating project costs impacte
Slide 39: Group outlook
Group outlook For personal use only Commenting on the outlook for the WorleyParsons Group, Mr Andrew Wood said: “Volatility in commodity prices impacted the market for our services and our growth in the first half. The markets for our services improved towards the end of the period and we continue t
Slide 40: Half year results 2013
For personal use only Half year results 2013
Slide 41: Supplementary information to half year results 2013
For personal use only Supplementary information to half year results 2013
Slide 42: Segment Margins
For personal use only 42 Segment Margins
Slide 43: FX translation impact
FX translation impact Movement in major currencies Group EBIT FX Impact Since FY09 For personal use only 105.0 FY09 FY10 FY11 FY12 HY13 30 20 100.0 29 10 0 95.0 A$m -10 -18 -20 -32 90.0 -30 -41 -40 85.0 -50 Jul-12 Jan-12 Mar-12 Apr-12 Oct-12 Feb-12 May-12 Jun-12 Aug-12 Sep-12 Nov-12 Dec-12 USD GBP C
Slide 44: Dividends, amortization and tax
Dividends, amortization and tax For personal use only Dividend History HY09 HY10 HY11 HY12 HY13 Interim dividend (cps) 38.0 35.5 36.0 40.0 41.5 Franked 76% 100% 100% 79% 100% $m total 92.2 87.0 88.6 98.3 102.3 Based on asset values as at 31 December 2012 44
Slide 45: Contractual acronyms
Contractual acronyms For personal use only CY – Calendar year EDS – Engineering and Design Services E&P – Engineering and Procurement EPC – Engineering, Procurement and Construction EPCM – Engineering, Procurement and Construction Management ESA – Engineering Services Agreement ESP – Engineering Ser