Petrofac Limited · OTC:POFCY
Petrofac — FY2009 Earnings Presentation
29 slides from Petrofac's earnings presentation, Mar 8, 2010
Slide 1: 2009 Final Results
2009 Final Results 8 March 2010
Slide 2: Important Notice
Important Notice • This document has been prepared by Petrofac Limited (the Company) solely for use at presentations held in connection with the announcement of its results for the year ended 31 December 2009. The information in this document has not been independently verified and no representation
Slide 3: Headlines
Headlines • Strong financial performance in 2009 • Backlog increased to US$8.1bn following record order intake of US$7.3bn; gives excellent revenue visibility • Delivering on Energy Developments strategy with demerger of Don assets • Continuing focus on project execution • Well positioned to deliver
Slide 4: Energy Developments – leveraging service capabilities
Energy Developments – leveraging service capabilities • Energy Developments remains core part of business model and integral to strategy • Recent senior appointments in business development and energy infrastructure • Continue to review a number of upstream and energy infrastructure opportunities, i
Slide 5: Energy Developments – demerger of UKCS assets
Energy Developments – demerger of UKCS assets • First major demonstration of harvest strategy with 62°N 211/1a, 2a & 3a distribution to our shareholders 0 km 100 W. Don & Don SW • EnQuest assets geographically and operationally Deveron Thistle complementary and synergistic Heather & Broom • Strong b
Slide 6: Energy Developments – value creation on Don
Energy Developments – value creation on Don Overview of assets Don Assets development highlights Don Southwest discovered by Britoil in 1976; West Don discovered in 1975 by Burmah Oil Achieved agreement from partners to develop the fields together Both assets lay fallow following period of inactivit
Slide 7: Energy Developments – demerger of UKCS assets
Energy Developments – demerger of UKCS assets Circular posted to Petrofac shareholders 4 March EnQuest PLC price range prospectus published 18 March EGM of Petrofac 29 March London Admission of EnQuest Shares 6 April Stockholm Admission of EnQuest Shares 19 April Despatch of definitive share certifi
Slide 8: Energy Developments – 2009 operational update
Energy Developments – 2009 operational update • Cendor, Malaysia: – produced average of 14,400 bpd (2008: 14,700 bpd), with uptime of over 99 per cent – FEED study for second phase commissioned; FDP submission expected 2H 2010 • Chergui, Tunisia: – produced average of 26.5 million standard cubic fee
Slide 9: Engineering & Construction – building capability
Engineering & Construction – building capability • Building capability and capacity to maintain our focus on strong operational performance as we grow • Business infrastructure and risk management procedures are developing to reflect increasing scale and complexity of business • Strong position to r
Slide 10: Engineering & Construction – addressable market
Engineering & Construction – addressable market • Long-term drivers remain robust • Market opportunity sufficiently large to fulfil our growth aspirations • Good visibility of prospects in key markets over next three years • Complemented by opportunities in new countries and regions, including Turkm
Slide 11: Offshore Engineering & Operations
Offshore Engineering & Operations • Customers’ focused on more effective management of supply-chain • Bidding levels increased as year progressed and continues to be active • Success in securing new awards and extensions with major IOCs – Apache (£75m over 3-years) – BP (£100m over 5 years) OEO back
Slide 12: Engineering, Training, Production Solutions
Engineering, Training, Production Solutions Engineering Services • Reduction in man-hours sold as customers rescheduled early-stage work; Indian offices continue to grow to support E&C • New business opportunities increasing, particularly internationally Training Services • Fewer delegate days as di
Slide 13: Income Statement
Income Statement 2009 2008 US$m US$m Revenue 3,655.4 3,329.5 10% Operating profit 441.2 355.6 24% Profit before tax 447.5 358.4 25% Income tax expense (84.5) (93.4) Profit for the year 363.0 265.0 Profit for the year attributable to Petrofac 353.6 265.0 33% Limited shareholders EBITDA 559.0 419.0 33
Slide 14: Cash flow and gross cash balances
Cash flow and gross cash balances Strong cash generation continues… • Gross cash balances grown to US$1.4bn, despite significant investing activities • Growth in 2009 due primarily to profits generated from operations, including customer cash advances on new contract awards Gross cash position and c
Slide 15: Backlog
Backlog Backlog more than doubled since December 2008… • Engineering & Construction backlog increased to US$6.2bn (2008: US$2.4bn) due to record order intake during year • Offshore Engineering & Operations backlog increased to US$1.6bn (2008: US$1.1bn) - contract wins with Apache and BP • Engineerin
Slide 16: Engineering & Construction
Engineering & Construction Engineering & Construction continues to perform strongly… • Revenue 26% - high activity levels in Middle East and North Africa • Net profit 28% • Net profit margin maintained at 10.6% Revenue (US$m) EBITDA (US$m) and margin Net profit (US$m) and margin 2,509 346.5 265.1 1,
Slide 17: Offshore Engineering & Operations
Offshore Engineering & Operations OEO activity levels lower but reported results impacted by £/US$ fx rate… • On constant currency basis net revenue 7%, net profit 5% • Net margin on net revenue broadly unchanged at 2.9% • Average £/US$ fx rates: 2007 – 2.01; 2008 – 1.85; 2009 – 1.56 Revenue (US$m)
Slide 18: Engineering, Training, Production Solutions
Engineering, Training, Production Solutions Significantly lower activity levels in Engineering Services and Training Services… • Revenue 31% due to fewer engineering manhours and training delegates • Net margins on net revenue higher at 10.4% due to: – good operational performance on Dubai Petroleum
Slide 19: Energy Developments
Energy Developments Growth in revenue and EBITDA … • Revenue 62% and EBITDA 81% – commenced production from Don assets (2009 gross production: 3.1m barrels) – full year of exports from the Chergui gas plant in Tunisia (2008: < 5 months) – (Brent) oil price averaged US$62 per barrel (2008: US$97) • U
Slide 20: Summary and outlook
Summary and outlook • Exceptional 2009 performance, with earnings growth of 33% • Record order intake of US$7.3bn demonstrates strong position in core markets • Backlog of US$8.1bn gives high level of revenue visibility for 2010 and beyond • Core markets have strong growth prospects • Engineering &
Slide 21: Appendices
Petrofac P Appendices
Slide 22: Appendix 1: largest current EPC contracts
Appendix 1: 10 largest current EPC contracts Original contract value to Petrofac Harweel EOR Customer key: US$983m plant, Oman NOC/NOC led company/consortium Joint NOC/IOC company/consortium In Salah gas IOC compression, Algeria US$600m Jihar gas plant, Syria US$454m Ebla gas plant, Syria US$477m Mi
Slide 23: Appendix 2: Effective tax rate
Appendix 2: Effective tax rate Tax charge by segment 2009 2008 reported reported Engineering & Construction 18% 21% Offshore Engineering & Operations 27% 26% Engineering, Training and Production Solutions 2% 27% Energy Developments 31% 50% • Engineering & Construction lower due to confirmation of ap
Slide 24: Appendix 3: Segmental performance
Appendix 3: Segmental performance • Engineering & Construction earned 67% of revenue and 74% of net profit • Middle East and Africa: a key geographic market for Engineering & Construction • Europe: activity principally in UK North Sea, where majority of Offshore Engineering & Operations revenues are
Slide 25: Appendix 4: Employee numbers
Appendix 4: Employee numbers Headcount analysis: 3,650 4,150 2,350 750 550 250 Aberdeen Woking Sharjah Mumbai Chennai Sites and other E&C OEO ETSPS ED Operating centre Country office 11,700 people in 5 key operating centres and 19 offices 25
Slide 26: Appendix 5: Energy Developments' 2P reserves
Appendix 5: Energy Developments’ 2P reserves PROVED PLUS PROBABLE RESERVES 40 33.9 29.6 30 Oil Equivalent (mmboe) 20 9.6 W Don 10 Don SW Chergui 0 Cendor Ohanet (4.0) -10 (9.9) -20 1-Jan-09 Production 31-Dec-09 Revisions Additions Acquisitions Reserves Review Board 18 February 2010 26
Slide 27: Appendix 6: Organisational structure
Appendix 6: Organisational structure Segments Reporting Offshore Engineering, Training Services and Energy Engineering & Construction Engineering & Production Solutions Developments Operations Business Units Engineering & Engineering & Offshore Engineering Production Energy Construction Construction
Slide 28: Appendix 7: EPC risk management
progress acceptance certificate Final Warranty phase acceptance Provisional certificate 100% completion Mechanical Manage local construction contractors (typically 2-4 years) Appendix 7: EPC risk management Execution phase Integrated procurement team manage buying, inspection and s expediting easure
Slide 29: Notes
Notes • EBITDA means earnings before interest, tax, depreciation and amortisation and is calculated as profit from operations before tax and finance costs adjusted to add back charges for depreciation, amortisation and impairment. • Net profit (for the group) means profit for the period from operati