Worley Limited · ASX:WOR
Worley — WorleyParsons — H1 2012 Earnings Presentation
44 slides from Worley's earnings presentation, Feb 29, 2012
Slide 1: Half year results 2012
For personal use only Half year results 2012 John Grill
Slide 2: Overview
Overview For personal use only ► Strong first half paves the way for good full year result • Reported revenue of $3,300 million. Record aggregated revenue of $3,399 million; up 17% • EBIT increase of 29% on HY11 underlying result • Reported NPAT of $152 million up 18% (up 27% on HY11 underlying NPAT
Slide 3: Financial highlights
Financial highlights For personal use only HY12 vs HY11 HY12 Underlying Results* Net profit after tax $152m 27% Aggregated revenue $3,399m 17% EBIT $248m 29% Operating cash flow $64m 49% Basic earnings per share 61.8 c/s 27% Interim dividend 40.0 c/s * The underlying results for HY2011 excludes the
Slide 4: Safety performance
Safety performance For personal use only Our safety performance remains solid Areas of focus • Project and site activity initiation and implementation for safety success • Road safety. Pledged to the UN Global Road Safety Commitment program Highlights • WorleyParsons Singapore awarded 2011 Ris
Slide 5: Snapshot
Snapshot For personal use only Capital spending in resource markets continue to increase, led by global majors in Hydrocarbons and Minerals & Metals Solid growth in Australia, Canada, USA and China Economic uncertainty in light of the Eurozone debt concerns impacting smaller resource clients.
Slide 6: Snapshot
Snapshot For personal use only Our focus on the developing world has led to key project awards in: • Brazil • Costa Rica • Ecuador • Indonesia • South Africa Board composition • The Board has been strengthened − Ms Wang Xiao Bin; and − Dr Christopher Haynes 6
Slide 7: Local delivery, Global support
Local delivery, Global support For personal use only 2.1 million workshare hours 37,800 people 148 offices 44 countries 7
Slide 8: Improve contracts
Improve contracts For personal use only ► WorleyParsons’ performance continues to be underpinned by our extensive long-term contract base ● Total of 18 new Improve contracts awarded ● 11 contracts renewed ● 240 Improve contracts ► Our selection was based upon: ● Recognition of our leadership positio
Slide 9: Sector reporting change
Sector reporting change Group wide organisation restructure For personal use only Outstanding location based delivery – effective global support Five Regions into Nine groups of locations 1. Australia East and New Zealand (AENZ) 1. Australia and New Zealand (ANZ) 2. Australia West (AUW) 3. Asia
Slide 10: Financial results
For personal use only Financial results Andrew Wood
Slide 11: Financial profile
Financial profile vs. For personal use only $m HY08 HY09 HY10 HY11* HY12 HY11 Aggregated Revenue 2,362 3,256 2,548 2,905 3,399 17% EBIT 232 315 210 193 248 29% EBIT Margin 9.8% 9.7% 8.2% 6.6% 7.3% 0.7% Net profit 153 198 138 119 152 27% Net profit margin 6.5% 6.1% 5.4% 4.1% 4.5% 0.4% Basic EPS (cps)
Slide 12: Five year financial profile
5 year financial profile Aggregated Revenue $m EBIT Margin % For personal use only 6,219.4 5,903.5 4,882.4 4,967.1 10.7 9.7 8.6 8.0 11.4 9.8 9.0 9.4 3,256.1 2,905.1 3,399.0 2,354.1 2,548.1 9.8 9.7 8.2 6.6 7.3 FY08 FY09 FY10 FY11 FY12 FY08 FY09 FY10 FY11 FY12 Net profit $m 390.5 343.9 Record aggreg
Slide 13: Change in net profit after tax
Change in net profit after tax HY2011 v HY2012 For personal use only 14.2 (11.5) 31.3 (4.4) (19.5) (3.9) (10.1) 4.8 31.8 151.9 $m 119.2 HY11 * Hydrocarbons Power Minerals & Infrastructure & Corporate Net Interest Income Tax Minority FX Impact HY12 Metals Environment overhead Interest * The underlyin
Slide 14: Hydrocarbons
Hydrocarbons Aggregated revenue $M For personal use only HY12 aggregated revenue % by region ASCH 10% USAC 22% MENAI 11% 2,366.4 2,069.8 LAM 1% 1,844.5 1,556.3 SSA 3% AENZ 7% 2,373.7 1,974.1 2,344.9 1,760.3 1,869.1 EUR 13% AUW 9% FY08 FY09 FY10 FY11 HY12 Overall strong performance CAN 24% Strong
Slide 15: Power
Power HY12 aggregated revenue % by region Aggregated revenue $M For personal use only ASCH 5% MENAI 2% AENZ 9% 257.0 USAC 37% 262.1 235.5 248.2 AUW 12% 289.3 278.2 259.8 217.7 247.3 CAN 7% FY08 FY09 FY10 FY11 HY12 LAM 6% EUR 21% SSA 1% Increased activity in the European nuclear EBIT by Region HY12
Slide 16: Minerals & Metals
Minerals & Metals HY12 aggregated revenue % by region Aggregated revenue $M For personal use only USAC 4% LAM 4% ASCH 14% SSA 1% EUR 2% CAN 8% MENAI 4% 211.2 332.3 322.7 255.2 371.8 400.0 311.5 214.1 239.8 AENZ 33% FY08 FY09 FY10 FY11 HY12 AUW 30% EBIT by Region HY12 vs HY11 1 $M Record first half
Slide 17: Infrastructure & Environment
Infrastructure & Environment HY12 aggregated revenue % by region Aggregated revenue $M For personal use only USAC 5% ASCH 6% LAM 9% MENAI 8% 360.8 SSA 10% 277.9 128.7 180.4 AENZ 22% EUR 4% 341.3 394.3 221.3 191.9 162.0 FY08 FY09 FY10 FY11 HY12 CAN 14% AUW 22% First half FY12 reports record aggrega
Slide 18: Cash Flow
Cash Flow For personal use only $m HY08 HY09 HY10 HY11 HY12 EBIT 232 315 210 203 248 Depreciation and amortisation 31 40 43 47 50 Interest and tax paid (75) (103) (132) (56) (64) Working capital / other (76) (17) 27 (69) (170) Net cash inflow from operating activities 112 235 148 125 64 Net cash out
Slide 19: Gearing and key metrics
Gearing and key metrics For personal use only Key Metrics FY09 FY10 FY11 HY12 Gearing ratio 26% 26% 22% 26% Facility utilization 54% 61% 53% 60% Average cost of debt 5.5% 5.2% 5.7% 5.3% Average maturity (years) 4.1 3.8 4.6 4.1 Interest cover * 14.1x 13.3x 12.0x 13.4x Net Debt/EBITDA * 0.8x 1.2x 0.9x
Slide 20: Liquidity
Liquidity Liquidity Summary $m FY09 FY10 FY11 HY12 For personal use only Loan & OD facilities 1,376 1,286 1,277 1,341 Less: facilities utilized (745) (782) (680) (809) Available facilities 631 504 597 532 Plus: cash 178 141 171 165 Total liquidity 809 645 768 697 Bonding facilities 453 669 682 683 B
Slide 21: Sector Outlook 2012
For personal use only Sector Outlook 2012 John Grill
Slide 22: Hydrocarbons
Hydrocarbons For personal use only Hydrocarbons market remains buoyant HY12 vs HY11 fuelled by sustained high oil prices Aggregated $2,345 m 19% Capital spend by the international majors Revenue increased by 19% in CY11 EBIT $263 m 6.9% Unconventional oil and gas sectors continue to expand in
Slide 23: Hydrocarbons: Key project awards
Hydrocarbons For personal use only Key project awards ExxonMobil - Point Thompson initial production system, Alaska SORESCO - Moin refinery expansion project, Costa Rica PetroEcuador - Refineria del Pacifico Refining and Petrochemical Complex project, Ecuador Chinese National Offshore Oil Co
Slide 24: Hydrocarbons: Key Improve awards and renewals
Hydrocarbons For personal use only Key Improve awards and renewals Imperial Oil - Nanticoke refinery (renewal), Canada Chevron - Duri oil field, Indonesia Shell - downstream, North America Esso Production Malaysia - EPCM umbrella agreement (renewal), Malaysia Suncor - gas facility supplier
Slide 25: Hydrocarbons: Segment outlook
Hydrocarbons Segment outlook For personal use only Growth and strengthening in global ► Improved outlook for the downstream greenfield and Improve markets hydrocarbons, particularly in the USA Increase in Select opportunities and Latin America resulting from increased capital spend ► Global cust
Slide 26: Power
Power For personal use only Developed world - optimisation of existing HY12 vs HY11 generation and networks assets Aggregated $260 m 6.6% Developing world - new generation capacity Revenue and networks to meet rising demand EBIT $27 m 15% Nuclear performance remains solid with new build projec
Slide 27: Power: Key project awards
Power For personal use only Key project awards Akkuyu NGS Elektrik Uretim Anonim Sirketi - nuclear power plant project, Turkey King Abdullah City for Atomic and Renewable Energy - nuclear power plant siting services project, Saudi Arabia Inter RAO UES - Baltic nuclear power plant bankable feas
Slide 28: Power: Key Improve awards and renewals
Power For personal use only Key Improve awards and renewals Kozloduy - stress-tests for nuclear power facilities, Bulgaria Bruce Power - sustaining projects, Canada Ontario Power Generation - Nuclear Division, Canada Arizona Public Services - Palo Verde nuclear power plant task level plannin
Slide 29: Power: Segment outlook
Power For personal use only Segment outlook Expect continued growth in the nuclear sector Developments in the US provide opportunity for near term growth Pipeline of works in developing markets for major new generation projects Recent Improve awards in the US, Canada and Australia underpin e
Slide 30: Minerals & Metals
Minerals & Metals For personal use only Strong commodity prices for coal, iron ore HY12 vs HY11 and copper supporting increased investment Aggregated $400 m 28% in the sector. Contraction in the aluminium Revenue sector EBIT $66 m 88% Global majors driving market growth although seeing some caut
Slide 31: Minerals & Metals: Key project awards
Minerals & Metals For personal use only Key project awards Sasol – Shondoni coal mine development EPCM, South Africa MMX Mineracao e Metalicos – Serra Azul iron ore facilities expansion, Brazil Anglo American – Chagres copper smelter engineering, Chile Evonik Degussa – Marco Polo integrated
Slide 32: Minerals & Metals: Key Improve awards and renewals
Minerals & Metals For personal use only Key Improve awards and renewals BHP Billiton Mitsubishi Alliance - engineering and construction management services for Bowen Basin coal facilities, Australia BHP Billiton - iron ore sustaining capital EPCM services, Australia Fortescue Metals Group - ir
Slide 33: Minerals & Metals: Segment outlook
Minerals & Metals For personal use only Demand shift for Commodities Segment outlook Outlook remains positive Expect continued growth in developing world – in particular, Latin America, Africa and China Growth in bulk materials and chemicals markets is expected to continue Pit to port opport
Slide 34: Infrastructure & Environment
Infrastructure & Environment For personal use only Resource sector demand for HY12 vs HY11 infrastructure and environmental services growing strongly Aggregated $394 m 16% Revenue Public infrastructure demand flat in the developed world but demand continuing EBIT $54 m 27% to grow in the develop
Slide 35: Infrastructure & Environment: Key project awards
Infrastructure & Environment For personal use only Key project awards Water Corporation of Western Australia - Southern Seawater Desalination plant expansion stage 2, Australia Chemtura - multi-purpose manufacturing facility project, China National Grid Property Holdings - remediation contract
Slide 36: Infrastructure & Environment: Key Improve awards and renewals
Infrastructure & Environment For personal use only Key Improve awards and renewals BP - remediation management North American framework contract (engineering and consulting), USA and Canada Port of Los Angeles - restoration services framework agreement, USA 36
Slide 37: Infrastructure & Environment: Segment outlook
Infrastructure & Environment For personal use only Segment outlook Strengthening of resource markets ► Remediation, decommissioning, globally provide opportunities for response and recovery activities growth increasing South African business to provide ► Strong relationships with Hydrocarbons ca
Slide 38: Summary
Summary For personal use only ► Strong growth compared to HY11, with ► Expanded and awarded new framework earnings growth reported in all sectors agreements with key customers for project and Improve activity providing a ► Capital spend in resource markets solid platform for future growth continues
Slide 39: Group outlook
Group outlook For personal use only “The group experienced strong growth in the first half compared to the previous corresponding period and, subject to the markets for our services remaining strong, we expect to achieve good growth in FY2012 compared to FY2011 underlying earnings. “This positive ou
Slide 40: Half year results 2012
For personal use only Half year results 2012
Slide 41: Contractual acronyms
Contractual acronyms For personal use only EPCM – Engineering, Procurement and Construction Management FEED – Front End Engineering and Design MSA – Master Service Agreement PMC – Project Management Consultancy 41
Slide 42: Segment margins
Segment margins H1 FY12 For personal use only Hydrocarbons Power Minerals & Infrastructure & TOTAL Metals Environment Sales to external customers 2,192.9 233.4 399.6 378.1 3,204.0 Procurement services revenue at margin 151.4 24.9 0.3 15.3 191.9 Other Income 0.6 1.5 0.1 0.9 3.1 Total 2,344.9 259.8 40
Slide 43: FX translation impact
FX translation impact For personal use only Movement in Major Currencies FX Impact FY08 FY09 FY10 FY11 HY12 30.0 29.0 20.0 10.0 - -10.1 A$m -10.0 -20.0 -20.0 -31.5 -41.0 -30.0 -40.0 -50.0 Currency Annualized AUD $m NPAT Currency FY11 HY12 HY ∆ translation impact of 1c ∆ AUD:USD 0.8 AUD:USD 98.8 103.
Slide 44: Dividends, amortisation and tax
Dividends, amortisation and tax For personal use only Dividend History Amortisation Profile (A$m) HY07 HY08 HY09 HY10 HY11 HY12 90.0 80.0 Interim dividend (cps) 28.0 38.0 38.0 35.5 36.0 40.0 70.0 60.0 Franked % 19% 30% 76% 100% 100% 79% 50.0 A$m 40.0 $m total 57.5 91.9 92.2 87.0 88.6 98.3 30.0 20.0