Worley Limited · ASX:WOR
Worley — WorleyParsons — FY2009 Earnings Presentation
43 slides from Worley's earnings presentation, Aug 24, 2009
Slide 1: Full Year Results 2009
For personal use only 1 Full Year Results 2009
Slide 2: Overview
Overview For personal use only Good performance for the 2009 Financial Year Challenging markets for oil sands in Canada and minerals & metals in Australia US, Europe, Middle East, and other markets in Canada and Australia experienced strong operating conditions Kashagan Full Field Development, Kazak
Slide 3: Financial Highlights
Financial Highlights For personal use only Net profit after tax $390.5M Up 13.6% Aggregated revenue $6,225M Up 27.0% EBITDA $693.2M Up 18.1% Operating cash flow $564.4M Up 175% Earning per share 161.1c/s Up 13.0% Dividend 55 c/s fully franked Strong financial capacity 3
Slide 4: Snapshot
Snapshot For personal use only Consolidated position in mega-project execution and management Performance underpinned by extensive long term contracting base Sustainability offering continues to be well received by customers, leading to projects and opportunities with a significant EcoNomicsTM compo
Slide 5: Safety Performance
Safety Performance For personal use only CATEGORY 2008 2009 Total recordable Case Frequency Rate* 0.14 0.11 Lost Workday Case Frequency Rate* 0.02 0.02 Some outstanding LTI Free milestones: • 20,000,000 Manhours - Mega EPCM project Saudi Arabia • 10,000,000 Manhours - Mega EPCM project Canada • 9,00
Slide 6: People
People For personal use only 4 million workshare hours completed 28,800 personnel 37 countries 6
Slide 7: Mega-Projects
Mega-Projects For personal use only Currently involved in 57 “mega- projects” • Across the full development spectrum- from study to execution Systems established Harsh and remote climate experience Woodside Pluto LNG, Australia 7
Slide 8: Mega-Projects
Mega-Projects For personal use only Kashagan full field development SAMREF’s clean fuels project Taccamol integrated chemical complex ExxonMobil PNG LNG development Integrated Gas Development program management Egypt’s first nuclear power plant SAMREF Refinery, Saudi Arabia 8
Slide 9: Long Term Contracts
Long Term Contracts For personal use only Secured 23 new long term contracts Renewed 9 contracts Currently servicing over 150 customers around the world through these long term collaborative contracts Projects focussed on energy reduction and efficiency increases Continue to invest in our systems an
Slide 10: Long Term Contracts
Long Term Contracts For personal use only BP global offshore operations Chevron strategic contractor relationships ExxonMobil Malaysia ESA ConocoPhillips Indonesia ESA ConocoPhillips Australia ESA AGIP KCO O&M technical services in Kazakhstan CNOOC, CNPC frame agreements in China Bayu Undan Offshore
Slide 11: Embedding sustainability into core business
For personal use only First in our peer group to fully embed and integrate sustainability into our core business and project management processes Carbon Optimisation Biological Renewables Advanced Coal Advanced Gas CCS Management and Recovery Solutions 11
Slide 12: Responding to the GFC
Responding to the GFC For personal use only Revisited our cost base and margins, identified innovative solutions and refocused our teams across all markets Reduction in personnel in Canada and Australia Reviewed all internal costs and initiatives, funding those we determined to be essential Three Ex
Slide 13: Financial Results
Financial Results For personal use only David Housego 13 Full Year Results 2009
Slide 14: Financial Profile
Financial Profile For personal use only AUD $m FY05 FY06 FY07 FY08 FY09 vs. FY08 Revenue 1 1,379.5 2,464.4 3,534.6 4,900.7 6,225.1 27.0% EBITDA 117.0 219.9 353.4 587.0 693.2 18.1% EBITDA margin 8.5% 8.9% 10.0% 12.0% 11.1% (0.9%) Net profit 66.5 139.1 224.8 343.9 390.5 13.6% Net profit margin 4.8% 5.
Slide 15: Financial Ratios
Financial Ratios For personal use only Revenue 1 $m EBITDA Margin % 6,225.1 12.0 11.1 4,900.7 10.0 H2 8.9 3,534.6 8.5 2,464.4 3,259.6 1,379.5 H1 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 Net profit $m Return on Equity % 390.5 343.9 32.1 31.3 24.5 25.4 H2 24.5 224.8 Target ROE: 20% 139.1 197.
Slide 16: Change In Net Profit
Change In Net Profit FY09 vs. FY08 For personal use only 500.0 116.6 1.1 0.3 (14.4) 2.6 (20.9) 450.0 (11.9) (19.8) (7.0) 400.0 390.5 $m 343.9 350.0 300.0 250.0 200.0 FY08 Hydrocarbons Power Minerals & Infrastructure Corporate Depreciation & Net Interest Income Tax Minority FY09 Metals & Environment
Slide 17: Segment Results
Segment Results For personal use only FY08 FY09 Change Hydrocarbons Revenue 3,612.5 4,749.1 31.5% EBITDA 438.5 555.1 26.6% EBITDA Margin 12.1% 11.7% (0.4%) Power Revenue 469.2 547.7 16.7% EBITDA 65.4 66.5 1.7% EBITDA / Revenue 13.9% 12.1% (1.8%) Minerals & Metals Revenue 471.1 589.2 25.1% EBITDA 85.
Slide 18: Cash Flow
Cash Flow For personal use only $m FY05 FY06 FY07 FY08 FY09 EBITDA 117.0 219.9 353.4 587.0 693.2 Interest and tax paid (34.4) (54.7) (65.9) (137.4) (215.8) Working capital / Other 8.5 (49.5) (91.6) (250.8) 69.0 Cash flow from operations 91.1 115.7 195.9 198.8 546.4 Key metrics: Net working capital /
Slide 19: Cash Flow
Cash Flow For personal use only Cash flow from operations Cash flow from investing activities 600 - (100.0) 500 (200.0) (300.0) 400 (400.0) AUD $M AUD $M 300 (500.0) (600.0) 200 (700.0) (800.0) 100 (900.0) 0 (1,000.0) FY05 FY06 FY07 FY08 FY09 FY05 FY06 FY07 FY08 FY09 Cash flow from financing activit
Slide 20: Liquidity & Gearing
Liquidity & Gearing For personal use only Key Metrics Jun-07 Jun-08 Jun-09 Liquidity Summary $M Jun-07 Jun-08 Jun-09 Gearing ratio 22.3% 31.4% 25.5% Loan & OD facilities 761.9 1,094.0 1,376.1 Facility utilization 68.0% 67.3% 54.2% Less: facilities utilized (518.3) (735.9) (745.2) Average cost of deb
Slide 21: Other
Other For personal use only Final dividend declared of 55 cps; 100% franked • To be paid on 28th September 2009; record date 3rd September 2009 AGM: 27th October 2009 Investor Day: late November 2009 (Date to be confirmed) EPS hurdle for 2010 award. Compound growth of CPI + 8% EPS growth for 3 years
Slide 22: Sector Review & Outlook
Sector Review & Outlook For personal use only John Grill 22 Full Year Results 2009
Slide 23: Hydrocarbons
Hydrocarbons For personal use only Major projects executed in 2009 Revenue $4,749.1M +31% • Shell’s Albian Sands - Canada EBITDA $555.1M +27% • Woodside’s Pluto LNG - Australia • Petrobras’ Comperj complex - Brazil Margin 11.7% -0.4% • SAMREF’s refinery - Saudi Arabia • Saudi Aramco’s Ras Tanura - S
Slide 24: Hydrocarbons Outlook
Hydrocarbons For personal use only OUTLOOK: Expect similar result as FY09 • Growth in Middle East, US • Offset by - FX on higher Australian dollar - Decline in earnings in Australia - Rebuilding of demand in Canada BP Assets, Gulf of Mexico 24
Slide 25: Power
Power For personal use only Economic crisis affecting demand and Revenue $547.7M +17% capital availability, however we are seeing EBITDA $66.5M +2.0% opportunities for growth Margin 12.1% -1.8% Power plant upgrades and infrastructure projects in US, Saudi Arabia, Singapore, Canada, Peru PMC and engi
Slide 26: Nuclear
Nuclear For personal use only Experiencing significant work in operating and new build plants • Bulgaria • Egypt • Armenia 10 year development schedule STARS Licence Renewal in US • Providing plant life extension submissions Extension of Fossil Plants long term contracts to include nuclear fleet Bru
Slide 27: Power Outlook
Power Outlook For personal use only OUTLOOK: Key drivers include • Continued performance in the US • Regional development in Europe • Nuclear and renewable developments We would expect growth in earnings in the Power sector in 2010 Solar Power 27
Slide 28: Minerals and Metals
Minerals and Metals For personal use only Experienced rapid slowdown in second Revenue $589.2M +25% half EBITDA $85.6M 0% Continued role on EMAL, Abu Dhabi Margin 14.5% -3.6% Ma’aden Phosphate success has led to phosphate projects in: • Egypt • Australia • South Africa Key Awards • Tia Maria Copper
Slide 29: Minerals and Metals Outlook
Minerals and Metals For personal use only OUTLOOK: As confidence grows we see renewed interest in progressing projects Likelihood of new project development to remain subdued Encouraged by the continuing spend in Improve Expect earnings to be materially below FY09 EMAL, Abu Dhabi 29
Slide 30: Infrastructure and Environment
Infrastructure and Environment For personal use only Sector impacted by contraction of Revenue $367.6M +7% resources sector EBITDA $35.0M -29% Successfully completed our role on FMG Margin 9.5% -4.9% “Pit to Port” Program Management • FMG • Karara Iron ore • Oakajee Port and Rail Rail recognised glo
Slide 31: Infrastructure & Environment Outlook
Infrastructure & Environment For personal use only OUTLOOK: Outlook is improving in 2010 Solid demand in • Water • Waste water • Desalination • Remediation services • Carbon advisory services Nascent recovery in resource sector projects We currently expect an improvement in earnings in this segment
Slide 32: Awards - Select
Awards - Select For personal use only AGRP Feed – Kuwait Colorado Governor’s Energy Office Environmental Studies - USA Yolla Platform expansion – Australia Alberta Oil Sands Water Use Strategy Clio Upstream study – Australia Study - Canada AS2 Conceptual Study - Canada Climate Change Engineering Ris
Slide 33: Awards - Deliver
Awards - Deliver For personal use only Fertil 2 EPC Phase – Abu Dhabi Doha Port expansion – UAE Belene NPP – Bulgaria Siemens T-Power – USA Taylorville OE – USA LER project – China Voyageur Pipeline – Canada MCE C485 Project – Singapore Refinery expansion – Canada Sakhalin II offshore processing – R
Slide 34: Awards - Improve
Awards - Improve For personal use only Shell ESA – Canada ENMAX MSA - Canada Shell Martinez – USA Allegheny GSA – USA BP EPCM agreement – Global Contra Costa Electric EPC MSA – USA Chevron Pipelines and terminals – Con-Edison GSA - USA Global Chevron Nigeria ESA Phase II – Nigeria Imperial Oil ESA –
Slide 35: Summary 2010
Summary 2010 For personal use only Mega-project capability has resulted in significant awards across all the project phases Long term contracts will underpin regional performance Sustainability and Renewables capability seeing increased demand Significant effort to “share the pain” with customers St
Slide 36: Sector Outlook
Sector Outlook For personal use only Hydrocarbons: Growth in Middle East and US offset by other factors. Result expected to be in line with FY09 Power: Regional development in Europe and Renewables Minerals and Metals: Expected result materially below FY09, awaiting market investment. Improve contra
Slide 37: Group Outlook
Group Outlook For personal use only “Many of our key markets remain robust and we are encouraged by the evidence of some improvement in a number of the markets most affected in 2009 and by the continued award of significant contracts. “However, the effects of extensive project deferrals and delays e
Slide 38: Full Year Results 2009
For personal use only 38 Full Year Results 2009
Slide 39: Contractual Acronyms
Contractual Acronyms For personal use only 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 Services Provider FEED
Slide 40: FX Translation Impact
FX Translation Impact Movement in Major Currencies For personal use only Aggregated Revenue FY09 125.0 120.0 115.0 110.0 Australia & 105.0 Asia & New Middle East 100.0 Zealand 95.0 17% 24% 90.0 85.0 80.0 Europe & Africa 75.0 14% 70.0 65.0 Canada Nov-07 Nov-08 Jan-08 Jan-09 May-08 May-09 Mar-08 Mar-0
Slide 41: Gearing Ratio Reconciliation
Gearing Ratio Reconciliation For personal use only Gearing Ratio Total Gearing $M Net Debt Equity Ratio June 2008 649.9 1,416.5 31.4% FX impact 113.3 32.5 Underlying debt repaid (99.8) - Underlying increase in cash (96.5) - Profit - 390.5 Dividend paid - (207.0) Other - 22.6 June 2009 566.9 1,655.1
Slide 42: Key Metric Definitions / Calculations
Key Metric Definitions / Calculations For personal use only Aggregated revenue • Aggregated revenue = statutory revenue + share of revenue from associates – procurement services revenue at nil margin Net working capital / revenue1 • Net working capital = trade & other receivables + WIP2 – trade & ot
Slide 43: Sector Outlooks
Sector Outlooks For personal use only Hydrocarbons Our expectation for Hydrocarbons in 2010 is a result similar to that reported in 2009, with expected growth in the Middle East and United States, offset by the anticipated foreign exchange impact of a higher Australian dollar, a decline in earnings