Worley Limited · ASX:WOR
Worley — WorleyParsons — FY2010 Earnings Presentation
41 slides from Worley's earnings presentation, Aug 25, 2010
Slide 1: Full Year Results 2010
For personal use only 1 Full Year Results 2010
Slide 2: Overview
Overview For personal use only X Continuation of challenging global economic environment ● Full year result in line with guidance ● Mega g pprojects j and long g term contracts secured ● Well positioned for growth in 2011 ● Increased headcount in 2011 ● Increased role in developing world today and i
Slide 3: Financial Highlights
Financial Highlights For personal use only X Net profit after tax $291.1M Down 25.5% X Aggregated revenue $4,967.1M Down 20.1% X EBITDA $519.3M Down 25.1% X Operating cash flow $279.6M X E i per share Earning h 118 5 / 118.5c/s D Down 26 26.4% 4% X Final dividend 40.0 c/s (FX impact $41 million)
Slide 4: Snapshot
Snapshot For personal use only X Disappointed by the level of downturn in some markets X United States hydrocarbons and power were impacted X Canadian oil sands market in 2nd half not as strong as anticipated X Expanded operations in the developing world • CNEC acquisition strategic position • Joint
Slide 5: Snapshot
Snapshot For personal use only X Significant new mega-projects • Currently executing 57 mega-projects, mega projects, from study to execution • Systems and workshare proven • Significant utilisation of remote and harsh (desert, arctic) climate experience X Secured 48 long-term g Improve p contracts
Slide 6: Global Reach, Local Operations
Global Reach, Local Operations For personal use only 3 million workshare hours completed 30,000 personnel 40 countries
Slide 7: Safety Performance
Safety Performance For personal use only X Our safety performance was in line with previous year y X Increased EPCM delivery in 2010 saw field execution hours of 163.7 million, a significant increase X Improved safety performance by contractors on projects X Launched Serious about Zero Program (SAZ)
Slide 8: Mega-Projects & Material Awards
Mega-Projects & Material Awards For personal use only Canada Saudi Arabia Australia • EPCOR Keephills Unit 3 • Ma’aden Phosphate plant • Woodside Pluto LNG • Shell Albian Sands • Ma’aden Alumina refinery and mine • ExxonMobil PNG PLNG • Total’s Joslyn North Mine oil sands plant UK • WICET Terminal d
Slide 9: Long Term Contracts
Long Term Contracts For personal use only X WorleyParsons performance underpinned byy extensive long-term g contracting g base • Five global/ multi-regional agreements • 28 new contracts awarded • 20 contracts renewed • 200 contracts serviced on this basis X Selection based upon: • Recognition of ou
Slide 10: Emergence of Developing World
Emergence of Developing World For personal use only Control of Global Oil and Gas Reserves 2009 X The developing (Non OECD) world: F ll IOC access Full New Russian 6% • Own the majority of the oil and gas Companies reserves 6% + Investing I ti ini downstream d t markets k t NOCs (equity access) + Th
Slide 11: WorleyParsons Response
WorleyParsons Response For personal use only X Developing a significant footprint in Latin America • Brazil, Chile, Peru, Argentina, Colombia X Developing a significant footprint in the F Former Soviet S i t Union U i • Kazakhstan, Russia, Bulgaria X Developing a significant footprint in Africa • So
Slide 12: Financial Results
For personal use only Financial Results 12 David Housego
Slide 13: Financial Profile
Financial Profile For personal use only $m FY06 FY07 FY08 FY09 FY10 vs.FY09 Aggregated Revenue 2,459.1 3,525.4 4,882.4 6,219.4 4,967.1 (20.1%) EBITDA 219.9 353.4 587.0 693.2 519.3 (25.1%) EBITDA Margin 8.9% 10.0% 12.0% 11.1% 10.5% (0.6%) Net profit 139.1 224.8 343.9 390.5 291.1 (25.5%) Net profit ma
Slide 14: Financial Profile
Financial Profile For personal use only Aggregated Revenue $m EBIT Margin % 6,219.4 10.7 4,882.4 , 4,967.1 9.7 9.1 8.6 3,525.4 8.1 3,256.1 2,459.1 2,548.1 2,354.1 1,455.8 1,134.9 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 Net profit $m 390.5 343.9 X Margin improved on 1H 291 1 291.1 X Earning
Slide 15: Change in Net Profit FY10 v FY09
Change g in Net Profit FY10 v FY09 For personal use only 390.5 (117.9) 71.5 (3.5) (40.9) 291.1 (23 5) (23.5) 21 0 21.0 (10 6) (10.6) 5.3 (0.8) $m FY09 NPAT Hydrocarbons Power Minerals & Infrastructure & Corporate Net Interest Income Tax Minority Interest FX Impact FY10 NPAT Metals Environment overhe
Slide 16: Hydrocarbons
Hydrocarbons y For personal use only X EBIT margin maintained X AME and ANZ solid result X North America impacted by downstream hydrocarbons market X Europe and Africa f delays on major/mega / projects X Canada 2H result improved again on 1H (not at rate expected)
Slide 17: Power
Power For personal use only X US performance improved in 2H X Europe & Africa weaker in 2H but overall positive year on year X ANZ / AME / Canada steady
Slide 18: Minerals & Metals
Minerals & Metals For personal use only X ANZ and AME contribute 86% of segment revenue X Improvement in 2H margin and EBIT v 1H X Year on year performance reasonable in volatile market
Slide 19: Infrastructure & Environment
Infrastructure & Environment For personal use only X Overall strong performance X Improved EBIT margin X ANZ result benefited from 6 months of Evans & Peck contribution; remains biggest market
Slide 20: Cash Flow
Cash Flow For personal use only $m FY07 FY08 FY09 FY10 EBITDA 353.4 587.0 693.2 519.3 Interest and tax paid (65.9) (137.4) (215.8) (185.6) Working capital / other (91.6) (250.8) 69.0 (54.1) Net cash inflow from operating activities 195.9 198.8 546.4 279.6 Net cash outflow from investing activities (
Slide 21: Liquidity & Gearing
Liquidityy & Gearing g For personal use only Key Metrics Jun-08 Jun-09 Jun-10 Liquidity Summary $m Jun-08 Jun-09 Jun-10 Gearing ratio 31.4% 25.5% 25.8% Loan & OD facilities 1,094.0 1,376.1 1,286.1 Facility utilization 67.3% 54.2% 60.8% Less: facilities utilized (735.9) (745.2) (781.5) Average cost o
Slide 22: Hydrocarbons
Hydrocarbons For personal use only X Key project awards include: Revenue $3,425.4M -38.4% • Total - Joslyn Creek North project, Canada • ConocoPhillips - Jasmine Development, North EBIT $375.6M -29.4% Sea Margin 11% -0.2% • ExxonMobil - Sakhalin 1 Arkutun Dagi offshore platform contract extension, R
Slide 23: Hydrocarbons
Hydrocarbons For personal use only X Key Improve contract awards include: • BP - Global agreement g EPMS services Onshore facilities • Chevron - Global terminals alliance • Woodside - Offshore gas and onshore LNG, LNG Australia • ExxonMobil - LNG project services contract, PNG • ConocoPhillips - Eng
Slide 24: BP Gulf of Mexico
BP Gulf of Mexico For personal use only X BP incident anticipated to create a range off changes h iin offshore ff h permitting itti in all United States waters X Potential for higher g activity y in Brazil,, West Africa and Asia X Scope of services for our BP Gulf of Mexico contracts unaffected X Wo
Slide 25: Hydrocarbons Segment Outlook
Hydrocarbons For personal use only SEGMENT OUTLOOK: X Recovery in the upstream segment segment, both onshore and offshore, while the downstream market remains challenging with some opportunities expected in developing markets X Emergence of unconventional gas provides a p p potential new market oppo
Slide 26: Power
Power For personal use only X Continuation of trend in Canada, Western Europe, United States and Australia toward Revenue $509.5M -7.2% less energy demand EBIT $39.3M -41.1% X Developing world demand Margin 7.7% -4.5% X Key project awards include: • ADGAS - Additional power generation facility at Da
Slide 27: Conventional Power
Conventional Power For personal use only X Key Improve contract awards include: • Tennessee Valley Authority - Combined fossil and nuclear energy contract, United States • Arizona Public Service - Fleet wide support ser ices contract, services contract United States • Pacific Gas & Electric - Diablo
Slide 28: Nuclear Power
Nuclear Power For personal use only X High level of nuclear activity in 2010 • Program management for new build units - Bulgaria, Armenia, Jordan and Egypt • Operating plant support services - Canada, United States, Slovenia, Sweden and Bulgaria • Feasibility studies in - Slovenia, Slovakia, Czech R
Slide 29: Power Segment Outlook
Power For personal use only SEGMENT OUTLOOK: X Improved operational performance in the United States X Regional development in Eastern Europe and the Former Soviet Union, Latin America and the Middle East X Expansion p of nuclear services across our markets X Further development of Improve services
Slide 30: Minerals & Metals
Minerals & Metals For personal use only X Key project awards include: Revenue $562.4M -3.6% • Vale - S11D project, project Brazil EBIT $77.0M -6.8% • BHP Billiton - Cerro Motoso FC01 rebuild EPCM, Colombia Margin 13.7% -0.5% • Ma’aden - Alcoa’s joint ba bauxite ite mine and alumina refinery, Saudi A
Slide 31: Minerals & Metals
Minerals & Metals For personal use only X Key Improve contract awards include: • Rio Tinto Bauxite and Alumina - global agreement • Dupont - Global EPCM services agreement • Alcoa refineries in Bunbury B nb r and Wagerup Wager p - Services agreement, Australia • US Steel - Capital projects alliance,
Slide 32: Minerals & Metals Segment Outlook
Minerals & Metals For personal use only SEGMENT OUTLOOK: X Conditions continue to improve • Early signs of recovery in the non-Chinese demand for commodities X Trend towards global services agreements with major tier 1 customers X Strengthening of activities in Latin America and Africa X Investing i
Slide 33: Infrastructure & Environment
Infrastructure & Environment For personal use only Key markets in I&E X Integrated pit pit-to-port to port market in mining Revenue $469.8M +34.2% • Oakajee Port and Rail for bulk commodity EBIT $47.7M +57.9% supply chain, Australia Margin 10.2% +1.6% • Wiggins Wi i IIsland l dC Coall E Exportt Term
Slide 34: Infrastructure & Environment
Infrastructure & Environment For personal use only X Management of water solutions for resource developments • Woodside – wave and hydrodynamic modeling, for site selection • Support for water management for coal seam methane market , Australia • Water recovery & efficiency strategies for the oil sa
Slide 35: Infrastructure & Environment Segment Outlook
Infrastructure & Environment For personal use only SEGMENT OUTLOOK: X Continued C ti dddevelopment l t across allll key sectors and regions X Emphasis on growth of pit-to-port capability throughout Asia, Africa and Latin America X Focus on environmental capability p y assisting major developments X
Slide 36: Summary 2010
Summary 2010 For personal use only X 2010 demonstrated importance of mega g projects j and long-term g contracts to our performance X Markets remain competitive, United States downstream remains challenging X Operations stabilised through 2nd half, headcount increasing X Diversification continuing •
Slide 37: Group Outlook
Group Outlook For personal use only Commenting on the outlook for the WorleyParsons Group Group, Mr John Grill said: “We expect the markets for our services to show improvement through 2011, and on this b i we expectt tto achieve basis hi iincreased d earnings i iin 2011 2011. “The company continues
Slide 38: Full Year Results 2010
For personal use only 38 Full Year Results 2010
Slide 39: Contractual Acronyms
Contractual Acronyms For personal use only D4 – Deactivation, Decontamination, Decommissioning, Demolition EDS – Engineering and Design Services E&P – Engineering and Procurement EPC – E i Engineering, i P Procurementt and dCConstruction t ti EPCM – Engineering, Procurement and Construction Manageme
Slide 40: FX Translation Impact
FX Translation Impact For personal use only Revenue by region* % Movement in major currencies 130.0 125 0 125.0 120.0 115.0 110 0 110.0 105.0 100.0 95 0 95.0 90.0 Feb-10 Mar-10 May-10 Apr-10 Aug-09 Sep-09 Nov-09 Dec-09 Jan-10 Jun-10 Jul-09 Jul-09 Jul-10 Oct-09 * Per segment note USD GBP CAD Currency
Slide 41: Other: Dividend History and Amortisation Profile
Other For personal use only DIVIDEND HISTORY AMORTISATION A Amortisation ti ti Profile P fil ($m ($ AUD) 90.0 80.0 70 0 70.0 60.0 50.0 40.0 30.0 X 40 cps final dividend declared 20.0 X Full year earnings payout ratio of 63 63.6% 6% 10.0 0.0 FY10 FY11 FY12 FY13 FY14 Acquired q intangibles g Other int