Petrofac Limited · OTC:POFCY
Petrofac — H1 2024 Earnings Presentation
25 slides from Petrofac's earnings presentation, Sep 30, 2024
Slide 1: Half Year Results 2024
Half Year Results 2024 30 September 2024 Tinrhert gas development, Algeria
Slide 2: Important notice
Important notice This document has been prepared by Petrofac Limited (the Company) solely for Certain statements in this presentation are forward looking statements. Words use at presentations held in connection with its Half Year Results 2024 on 30 such as "expect", "believe", "plan", "will", "coul
Slide 3: Contents
Contents • H1 2024 overview • Financial performance • Strategic and financial update • Summary – key messages • Appendices Petrofac Half Year Results 2024 3
Slide 4: H1 2024 Overview
H1 2024 Overview Good progress on new Strong order intake in Progress in concluding Significant progress on contracts awarded in Asset Solutions legacy contracts the financial restructure 2023 Petrofac Half Year Results 2024 4
Slide 5: Strategic & financial update
Strategic & financial update Petrofac Half Year Results 2024 5
Slide 6: Strategic and financial update
Strategic and financial update In-principle agreement with stakeholders on a comprehensive Financial Restructure framework Objectives Materially strengthen the balance sheet Improve liquidity Secure bank guarantees In-principle agreement Process Target The in-principle agreement is » New funding in
Slide 7: Financial performance
Financial performance Petrofac Half Year Results 2024 7
Slide 8: H1 2024 results summary
H1 2024 results summary Revenue EBIT 1 Net debt 3 Backlog Pipeline 4 US$1,240m US$(106)m US$622m US$8.0bn US$53bn 2023 2 : US$1,231m 2023 2 : US$(72)m Dec 2023: US$583m Dec 2023: US$8.1bn Dec 2023: US$60bn • Transition in contract • Impact of legacy • Free cash outflow of • Strong order intake in •
Slide 9: Outlook & summary
Outlook & summary Turkstream Petrofac Half Year Results 2024 9
Slide 10: Strong backlog and an attractive pipeline
Strong backlog and an attractive pipeline Backlog 18-month Group Pipeline1 of US$53 billion H1 2024 update: Pipeline breakdown US$8.1bn US$8.0bn 1% ▪ Progress made in delivering the new portfolio of projects awarded 16% 11% $2.0bn $2.3bn in 2023 23% ▪ Strong new order intake in Asset Solutions ~US$0
Slide 11: Strategic priorities
Strategic priorities 1. Financial restructure: strengthen balance sheet, improve liquidity, secure guarantees 2. Consistent delivery 3. Maintain strength in our core 4. Improved margins » Extend and embed Group assurance » Build on strengths in our core MENA » Access to guarantees for EPC contracts
Slide 12: Summary – key messages
Summary – key messages Financial Restructure is critical for financial strength Strong backlog provides a platform for the business Continued focus on conclusion of legacy contracts, with good progress on new contracts awarded in 2023 Backlog growth targeted, from strong pipeline in core markets Imp
Slide 13: Appendices
Appendices Turkstream Petrofac Half Year Results 2024 13
Slide 14: H1 2024 ESG highlights
H1 2024 ESG highlights Committed to improving our ESG performance Petrofac is a constituent of the Petrofac MSCI rating upgraded to ‘AAA’ FTSE4Good Index Petrofac Half Year Results 2024 14
Slide 15: HSE – Leading sustainable practices
HSE – Leading sustainable practices Driving a culture of health and safety across the organisation Our 01 02 03 04 05 strategic pillars: Leadership Employee Contractor Training Compliance engagement Management ▪ Launched the ‘STOP LOOK THINK’ initiative ▪ Aimed at reducing accidents and incidents ▪
Slide 16: Business performance results
Business performance results 1 US$m H1 2024 H1 2023 Change (restated) 4 Revenue 1,240 1,231 1% EBITDA 2 (66) (30) (120)% EBITDA margin (5.3)% (2.4)% (2.9)ppts EBIT 3 (106) (72) (47)% EBIT margin (8.5)% (5.8)% (2.7)ppts Net finance expense (50) (59) (15)% Income tax expense (10) (12) (17)% 1. Busines
Slide 17: Segmental performance
Segmental performance H1 2024 revenue by business unit H1 2024 revenue by geography 4% 45% Engineering & Construction 26% United Kingdom 18% 51% Asset Solutions 26% 13% United Arab Emirates 4% Integrated Energy Services 9% United States of America 6% 8% Thailand US$1.2bn US$1.2bn 45% 8% Netherlands
Slide 18: Engineering & Construction
Engineering & Construction Initial phases of the new contracts secured in 2023 are progressing well • Revenue increased by 13% US$m – Initial phases of new contracts secured (except as otherwise stated) H1 2024 H1 2023 (restated)2 EBIT margin1,2 in 2023 Revenue 556 493 • EBIT margin loss of 18.5% EB
Slide 19: Asset Solutions
Asset Solutions Strong order intake with a book-to-bill of 1.4x • Revenue down 6% US$m (except as H1 2024 H1 2023 EBIT Margin1 – Completion of certain material contracts otherwise stated) during 2023 Revenue 637 679 • EBIT margin loss of 1.3% EBITDA1 (2) 19 Overheads EBIT1 (8) 14 – Change in contrac
Slide 20: Integrated Energy Services
Integrated Energy Services In line with expectations • Revenue down 22% year-on-year US$m (except as H1 2024 H1 2023 EBITDA – Lower net production in line with otherwise stated) US$m expectations Revenue 49 63 • EBITDA decreased by 35% EBITDA1 31 48 EBIT1 6 19 48 – Lower revenue (9) Production (net)
Slide 21: Liquidity update
Liquidity update The Company continues to manage its payment obligations to preserve liquidity Gross liquidity 1 • H1 2024 free cash outflow of US$36 million (2023: US$ million US$225 million) – Reduced operating cash outflows 253 – Lower interest payments 201 – Working capital management 164 • Liqu
Slide 22: Working capital
Working capital Working capital balances (US$m) June Dec Cash 2024 2023 flow Contract assets and inventories 984 843 (145) Trade and other receivables 811 977 163 Restricted cash 264 223 (41) Trade and other payables (978) (930) 53 Accrued contract expenses (651) (691) (37) Contract liabilities (425
Slide 23: Working capital
Working capital Progress in resolving open contractual discussions Cash conversion cycle1 Days 229 237 186 185 165 36 16 16 (13) (33) (170) (201) (198) (198) (213) 2 2020 2021 2022 2023 H1 2024 DPO DSO Net working capital days 1. Cash Conversion Cycle = DSO – DPO 2. DPO excludes the US$104m SFO rela
Slide 24: Working capital – DSO analysis
Working capital – DSO analysis Progress in collecting payments from clients DSO analysis Days 3 H1 2024 DSO Analysis days 7 29 165 85 days 43 1 Trade receivables WIP billing cycle Non-Billable Billable / Billed Non-billable WIP 3 AVOs 2 1 2 Retentions Accrued income 1. Assessed variation orders 2. N
Slide 25: Working capital – DPO analysis
Working capital – DPO analysis DPO analysis Days H1 2024 DPO analysis Days 27 14 198 88 35 days 34 Trade payables Other payables Billable ACE1 Accrued expenses 1 1 Non-billable ACE1 1. ACE is accrued contract expenses Petrofac Half Year Results 2024 25