Worley Limited · ASX:WOR
Worley — H1 FY24 Earnings Presentation
52 slides from Worley's earnings presentation, Feb 28, 2024
Slide 1: Delivering a more sustainable world
Delivering a more sustainable world Half year results 2024 28 February 2024
Slide 2: Disclaimer
Disclaimer The information in this presentation about Worley global markets and persistent disruption in supply Limited, the entities it controls (Group) and its activities chains. is current as at 28 February 2024 and is in summary form and is not necessarily complete. It should be read While the G
Slide 3: Agenda
Agenda Business performance 1 and strategic progress Chris Ashton 2 Half year results 2024 Tiernan O’Rourke Stronger together Market trends and Worley acknowledges and pays respect to the 3 outlook past, present and future Traditional Custodians of Country throughout Australia and extends this ackno
Slide 4: Key messages
Key messages We are committed to delivering strong environmental, social and We’ve delivered consistently with strong 1 growth in revenue, earnings and margins governance performance and operating in a way that is Our disciplined strategy execution consistent with our purpose. 2 resulted in a strong
Slide 5: Business performance and strategic progress
Business performance and strategic progress Chris Ashton, Chief Executive Officer Worley - Half year results 2024 5
Slide 6: We support healthy lives, respect and well-being
We support healthy lives, respect and well-being We energize, empower and develop We value inclusion, diversity and our people respect Investing in our people Safety and respect at work Be heard! Global listening survey Code of conduct • 67% response rate • Our Code of Conduct is core to the values
Slide 7: H1 FY24 result
H1 FY24 result Delivering on our ESG business commitments On track Third paper DJSI Dow Jones Sustainability Index recognized as a global leader Environmental 2023 (Australia) Released From Ambition to Reality paper 7% reduction in Scope 1 and Scope 2 with Princeton University Andlinger Center GHG e
Slide 8: H1 FY24 result
25c per H1 FY24 result share H1 FY24 results delivered indicative of increased momentum Interim dividend declared Total business Sustainability-related work Aggregated revenue $5.6b ↑22% $2.9b ↑61% vs $4.6b at H1 FY23 PF vs $1.8b at H1 FY23 PF Total business Underlying margin excl procurement Underl
Slide 9: We continuously improve our governance processes, controls and monitoring over time
We continuously improve our governance processes, controls and monitoring over time • Continuation of service processes – requires CFO approval to accrue more than two months unbilled WIP • Responsible Business Assessment – assesses a range of financial and non-financial risks • Co-sourced Internal
Slide 10: We've evolved our sustainability definition
We’ve evolved our sustainability definition Aggregated revenue 49% 56% 61% 62% Simplify the building blocks More closely align with Retain our Ambition of 75% 62% 15% 18% to classify sustainability- international sustainable sustainability-related 14% 38% 29% 33% related work investment taxonomies r
Slide 11: Our leading indicators show continued growth
Our leading indicators show continued growth We continue to see margin growth We have a good conversion rate to backlog which These leading indicators support 1 in our factored sales pipeline 2 is converting into improved backlog margin 3 margin improvement over time Factored sales pipeline1 Rolling
Slide 12: Strategic wins
Strategic wins 10 7 4 1 5 9 8 ~$6.2b ~$3.1b 3 2 Wins in H1 FY24 Sustainability-related wins in H1 FY24 6 Strategic wins in sustainability Building on long term relationships 1 EPCM contract for Umicore’s battery materials plant 7 BHP awards contracts for Stage 1 of the Jansen Potash project 2 Iluka
Slide 13: Case studies
Case studies bp awards a new global framework agreement bp | Global We’ve been awarded a new five-year global framework agreement with bp. We’ll provide engineering, procurement, and construction management (EPCM) services covering bp’s global refinery assets and new energy portfolio including strat
Slide 14: Project update
Supporting Venture Project update Global on its CP2 LNG facility Venture Global | US We’ve signed the reimbursable EPC agreement for Venture Global’s CP2 LNG export facility in Louisiana, USA. We continue to provide engineering, procurement and construction support services required to prepare the p
Slide 15: Our $100m strategic investment is delivering accretive returns
Our $100m strategic investment is delivering accretive returns Factored sales pipeline2 for our featured growth areas $18m investment1 in H1 FY24 $15m forecast in H2 FY24 • 25% on scaling up growth areas, • The investment focus will market assessments and planning continue to shift from market • 40%
Slide 16: Half Year Results 2024
Half Year Results 2024 Tiernan O’Rourke, Chief Financial Officer Worley - Half year results 2024 16
Slide 17: Key financials
Key financials Continued momentum in $5,610m $4,601m delivering our strategy Aggregated revenue Aggregated revenue excl. Procurement • Professional services revenue has increased 26% $4,599m in H1 FY23 PF $4,053m in H1 FY23 PF on pcp due to changing project mix +22% growth +14% growth • Underlying N
Slide 18: Drivers of EBITA margin improvement
Drivers of EBITA margin improvement • Professional services mix excluding procurement increased H1 FY23 (proforma1 basis) to H1 FY24 4pp, driving increased margin. This is as a result of our deliberate strategy to increase professional services revenue. • Rate improvements are expected to be maintai
Slide 19: Our actions are creating a runway for continued margin upside
Our actions are creating a runway for continued margin upside Building blocks to Strong progress to date FY24 and beyond higher margin 19% EBITA CAGR Worley (H1 FY24 vs H1 FY21) Sustaining double-digit H1 FY21 $345m medium-term EBITA CAGR1 EBITA margin (excl. 7.5-8% procurement) / 7.5% (FY24) ambiti
Slide 20: Capital management plan
Capital management plan 70 100% Our capital management position supports our growth plans Target range with good liquidity, the maintenance of strong credit ratings 95% 65 Down from and access to well-priced debt capital 60 63.6 on pcp Target range 90% H1 55 1 H1 Operating productivity Capital produ
Slide 21: We have a strong customer base
We have a strong We believe our competitive customer base advantage is: Greater diversity across end markets than our global peers, with strong margins in backlog and pipeline We’re partnering with our long term customers High proportion of professionals (88%) with transferable and building relation
Slide 22: Market trends and outlook
Market trends and outlook Chris Ashton, Chief Executive Officer Worley - Half year results 2024 22
Slide 23: Emerging thematics and our strategic response to global trends
Emerging thematics and our strategic response to global trends Geopolitical tensions Attracting and and government retaining talent changes Emerging thematics Emerging thematics • To deliver at pace and scale, attracting • Escalation of conflict could impact and retaining the right people is key glo
Slide 24: Group outlook
Group outlook1 The outlook presented at the time of our FY23 results2 remains consistent with what we’re expecting for FY24, subject to no deterioration in current market conditions: We expect FY24 aggregated revenue excluding procurement to grow (on FY23 proforma) as new and emerging customers gene
Slide 25: Key messages
Key messages We are committed to delivering strong environmental, social and We’ve delivered consistently with strong 1 growth in revenue, earnings and margins governance performance and operating in a way that is Our disciplined strategy execution consistent with our purpose. 2 resulted in a strong
Slide 26: Worley - Half year results 2024
& Worley - Half year results 2024 26
Slide 27: Supplementary information
Supplementary information Worley - Half year results 2024 27
Slide 28: Delivering our ambition
Delivering our ambition Our ambition H1 FY24 achievements demonstrating we are on track • Our peer-to-peer recognition program, Appreciate, had over 42,594 recognition moments across 33% of our workforce Our people We energize and empower • 325 leaders with access to MasterClass@Work platform to ext
Slide 29: Delivering our ambition
Delivering our ambition Operational priorities H1 FY24 achievements demonstrating we are on track • Utilization above target (88%+) Operational excellence Quality of earnings, utilization • 24% growth in GID hours; GID headcount up 12% from FY23 targets, resource & working • 55.5 days DSO, decreased
Slide 30: How we define our sustainability-related work
How we define our sustainability-related work We categorize our overall sustainability-related as the sum of Sustainable work and Transitional work. The combination of market segment and solution is used to determine how we categorize the work. We refer to all work falling outside of sustainability-
Slide 31: Our diversified business
Our diversified business Sustainability-related1 work A global leader delivering Sector aggregated revenue (%) aggregated revenue (%) knowledge-based project and asset services 5% 19% Traditional • Leading position in energy, Energy 14% Chemicals Transitional 33% 4% chemicals and resources Chemicals
Slide 32: Key financials
H1 FY24 H1 FY23 PF vs. H1 FY23 PF Key financials Aggregated revenue $5,610m $4,599m 22% Aggregated revenue excl. procurement $4,601m $4,053m 14% • Professional services revenue has increased 26% on pcp due to changing Underlying EBITA $345m $269m 28% project mix Underlying EBITA margin % excl. procu
Slide 33: Low-carbon hydrogen
Number of wins in different project phases for sustainability-related1 work in FY24 as at 31-Dec-23 Sustainability- related1 project The fan depicts the work we do across all phases within our sustainability-related sub- sectors. As projects progress through later phases, the project size increases
Slide 34: Reconciliation of statutory to underlying results
Reconciliation of statutory results to underlying results H1 FY24 ($m) H1 FY23 ($m) Reconciliation of Statutory result (NPAT for the Group) 109 (96) statutory to Add: Net finance costs 57 48 underlying results Add: Amortization of acquired intangible assets 43 49 adjusted for non- Add: Income Tax Ex
Slide 35: Segment EBITA results
Segment H1 FY24 H1 FY23 PF vs. H1 FY23 PF EBITA results Aggregated revenue ($m) 5,610 4,599 22.0% By region Americas 2,258 1,789 26.2% EMEA 2,218 1,846 20.2% • Americas EBITA increase driven by APAC 1,134 964 17.6% project mix with increase in professional Segment EBITA ($m) 470 377 24.7% services •
Slide 36: Segment results
H1 FY24 H2 FY23 PF vs. H2 FY23 PF Segment results H1 FY24 vs H2 FY23 PF Aggregated revenue ($m) 5,610 5,260 6.7% Americas 2,258 1,988 13.6% EMEA 2,218 2,177 1.9% By region APAC 1,134 1,095 3.6% • Americas decrease in margin in the half Segment EBITA ($m) 470 441 6.6% was driven by project mix with a
Slide 37: Segment results
Segment results By region Americas EMEA APAC TOTAL H1 FY23 vs. H1 H1 FY23 vs. H1 H1 FY23 vs. H1 H1 FY23 vs. H1 FY23 H1 FY24 H1 FY24 H1 FY24 H1 FY24 PF FY23 PF PF FY23 PF PF FY23 PF PF PF Aggregated revenue ($m) 2,258 1,789 26.2% 2,218 1,846 20.2% 1,134 964 17.6% 5,610 4,599 22.0% Professional servic
Slide 38: Regional highlights
Regional highlights Americas EMEA / APAC Aggregated revenue1 Factored sales Backlog1,3,4 Aggregated revenue Factored sales Backlog3,4 pipeline1,2,4 Pipeline2,4 3 4 19% 6 10 26% 2 32% 36% 42% 38% 8.2% 3 19% 2 11.4% 73% 5 12% 9% Segment margin 89% 8% Segment margin 1 excl. procurement excl. procuremen
Slide 39: Segment EBITA
H1 FY24 H1 FY23 PF vs. H1 FY23 PF Segment EBITA Aggregated revenue ($m) 5,610 4,599 22.0% By sector Energy 2,587 2,299 12.5% • Energy sector has grown, benefiting C hemicals 1,820 1,380 31.9% from continued global investment in Resources 1,203 920 30.8% sustainability and traditional projects. Segme
Slide 40: Margin profile
Margin profile Underlying EBITA % H1 Underlying EBITA $m 6.8% 6.5% 6.4% 6.1% 635 6.1% 5.8% H2 606 Total 547 516 Proforma 5.7% 6.3% 6.0% 6.1% 5.8% 6.1% 5.4% 352 337 296 283 H2 FY22 FY23 FY24 H1 345 251 283 269 Underlying EBITA % (excl procurement) 233 H1 7.3% 6.9% 7.3% 7.0% 6.5% 6.6% H2 FY22 FY22 Pro
Slide 41: Calculation of EBITA% excluding procurement
Calculation of H1 FY23 PF H2 FY23 PF H1 FY24 EBITA% Aggregated revenue ($m) 4,599 5,260 5,610 excluding Growth rate on pcp 22.0% procurement EBITA ($m) 269 337 345 Underlying EBITA Underlying EBITA Growth rate on pcp 28.3% margin excluding = aggregated revenue procurement – procurement EBITA% 5.8% 6
Slide 42: Foreign exchange
Foreign exchange Constant currency FX impact Group EBITA FX Translation Impact A $m 7 5 3 FY22 FY23 H1 FY24 Impact Total EBITA (A$m) 2 2 2 2 4 4 1 1 1 A $m (16) ARS USD US Pegged EUR GBP BGN HKD MAD CAD Other Worley - Half year results 2024 42
Slide 43: Cash collection
Cash collection H1 FY24 ($m) FY23 ($m) EBITA 287 585 Normalized cash conversion was 95.7%1, adjusted to exclude the prepayment of Add: Depreciation, amortization and significant 174 219 software costs previously included ($6m) non-cash items and certain timing adjustments as we Less: Interest and ta
Slide 44: Balance sheet and liquidity metrics
as at 31-Dec-23 as at 30-Jun-23 Balance sheet Weighted average cost of debt1 4.5% 3.9% and liquidity metrics Average maturity (years) 3.3 3.7 Interest cover (times) 7.2x 7.2x Net debt, $m (statutory definition) 2 1,563 1,830 • Improved liquidity position resulting from strong operating cashflows Net
Slide 45: Capital management: Debt maturity profile
Capital management: Debt maturity profile as at 31 Dec 2023 Debt Term Loan Syndicate Revolving Facility AMTN Overdraft • Maintained a well-diverse debt portfolio EMTN Bilateral • Weighted average debt maturity at 3.3 1,400 years • Investment grade credit ratings, 1,200 provides access to well-priced
Slide 46: Staff utilization
• Utilization remains above target. • Professional services staff headcount is Worley global headcount 43,100 at 31 December 23, up 3% on 50,000 FY23. 40,000 • Global Integrated Delivery (GID) Staff 30,000 36,000 33,800 34,500 36,200 38,200 headcount is 5,500 at 31 December 23, 41,700 43,100 Craft 2
Slide 47: Backlog increasing
Backlog increasing 14.8 14.1 13.3 3.6 4.2 2.8 7.2 7.0 7.4 3.0 2.8 3.4 1.3 2.0 1.4 7.5 7.7 7.2 4.9 5.4 5.6 at Dec-22 at Jun-23 at Dec-23 at Dec-22 at Jun-23 at Dec-23 Energy Chemicals Resources Traditional Transitional Sustainable 1.5 Americas Energy 4.2 5.4 EMEA Chemicals 7.2 APAC Resources 7.9 3.4
Slide 48: Glossary
Glossary $, $m, $b – Australian dollars unless otherwise stated, Australian GID - Global Integrated Delivery millions of dollars, Australian billions of dollars gm – Gross margin APAC - Australia, Pacific, Asia & China GST - Goods and Services Tax CAPEX - Capital expenditure IFRS - International Fin
Slide 49: Backlog definition
Backlog definition Backlog is the total dollar value of the amount of revenues expected to be recorded as a result of work performed under contracts or purchase/work orders already awarded to the Group. Backlog is not in constant currency and is reported using the year end exchange rates. With respe
Slide 50: Rules for items excluded from underlying results
Rules for items excluded from underlying results Worley has guidelines for determining items to be excluded from non IFRS profit measures, such as underlying NPATA and underlying EBITA. These guidelines are for determining underlying profit for internal management reporting and external reporting pu
Slide 51: Fixed price vs reimbursable contract types
Fixed price vs reimbursable contract types • Reimbursable Contracts (~80% of our revenue): • Contracts based on reimbursement of reasonable and allowable actual costs plus agreed profits including incentives, partial/fixed fee in accordance with the contract terms and conditions. • Fixed Price Contr
Slide 52: Registered office
Registered office: Level 17, 141 Walker Street North Sydney NSW 2060 Australia T: +61 2 8923 6866 E: investor.relations@worley.com E: media.relations@worley.com Worley Limited ABN 17 096 090 158 worley.com Worley - Half year results 2024 52