Worley Limited · ASX:WOR
Worley — WorleyParsons — Investor Day (September 2014)
88 slides from Worley's investor day presentation, Sep 10, 2014
Slide 1: North America Investor Day
For personal use only WorleyParsons Delivering What we promise North America Investor Day
Slide 2: Agenda
Agenda North America Investor Day For personal use only Item Time Housekeeping and OneWay Moment 8:00 to 8:15 Welcome and importance of the North American business 8:15 to 8:30 Major Projects 8:30 to 9:00 Improve 9:00 to 9:45 Panel Discussion 9:45 to 10:00 Tea break 10:00 to 10:15 Services in North
Slide 3: Total Recordable Case Frequency Rate by geography – FY14
WorleyParsons Total Recordable Case OGP 2013 benchmarking Frequency Rate by geography – FY14 For personal use only Former Soviet North America Europe Union WP OGP WP FY14 OGP < 0.52 2013 FY14 0.39 < 0.52 2013 WP FY14 OGP < 0.15 2013 0.28 0.05 Africa Asia excl. South Africa WP OGP WP FY14 < 0.21 OGP
Slide 4: Welcome
For personal use only Welcome Delivering What we promise Simon Holt
Slide 5: Overview
Overview FY2014 Strong operating cash flow For personal use only ► Earnings in line with guidance ► Business reorganization completed ► Further reduction of 1,200 overhead roles ► Strong operating cash flow result ► Final dividend of 51.0 cents per share ► Total dividend of 85.0 cents per share 5
Slide 6: Financial snapshot
Financial snapshot For personal use only ► Aggregated revenue1 of $7,364m, down 3%2 ► Underlying NPAT 3 of $263m, down 18%2 ► Improvement in Group EBIT margin in second half ► Operating cash flow up 24% to $550m ► Costs associated with restructuring amounted to $35.4m ► Gearing ratio remains strong
Slide 7: Diversification in earnings
Diversification in earnings For personal use only ► Top 10 customers deliver 33% of the gross margin ► Top 10 projects deliver 15% of the gross margin ► Top 10 locations deliver 71% of the operating EBIT 7
Slide 8: Global operations
Global operations FY2014 total revenue $9,583m For personal use only 46 Countries 157 Offices 35,600 Employees
Slide 9: North America snapshot
North America snapshot For personal use only FY2014 revenue SSA 3% ASCHI 5% MENA ANZ 15% 12% LAM 3% EUR 12% 48 Offices CAN 12,900+ Employees 33% USAC 17% 9
Slide 10: How did we get here
How did we get here For personal use only Cegertec INTEC Westmar Unifield Polestar Applied SEA The Colt Engineering Technology Engineering Companies HG Engineering GCT Komex Worley becomes Parsons E&C MacDonald Engineering First office Worley North lists on America ASX 91 92 93 94 95 96 97 98 99 00
Slide 11: Aggregated revenue by region
Aggregated revenue by region For personal use only 29% 29% 23% 17% 15% 15% 15% 2,158 2,088 10% 1,737 7% 7% 7% 8% 1,248 1,123 1,149 1,096 5% 5% 806 4% 4% 564 502 531 591 394 325 288 391 FY2013 ($m) FY2014 ($m) % of total aggregated revenue ► EUR grows through increased contribution from Rosenberg and
Slide 12: Underlying Operating EBIT
Underlying Operating EBIT For personal use only 14.6% 8.9% 9.0% 12.6% 13.7% 13.0% 11.9% 15.7% 254 19.5% 22.1% 193 188 157 11.5% 146 137 150 110 111 126 7.3% 3.8% 0.9% 6.0% 61 2.8% 15 3 43 8 24 FY2013 ($m) FY2014 ($m) % EBIT margin ► Significant decline in EBIT from ANZ due to lower project activity
Slide 13: Our Group strategy
Our Group strategy For personal use only To enhance and leverage our broad and deep technical capabilities and our diverse geographic presence 13
Slide 14: Horizon: Getting better at what we do
Horizon 1 Getting better at what we do For personal use only Current performance = Future work 14
Slide 15: Horizon: Growth from the core
Horizon 2 Growth from the core For personal use only 15
Slide 16: Horizon: Our new ventures - Digital Enterprise and Advisian
Horizon 3 Our new ventures - Digital Enterprise and Advisian For personal use only 16
Slide 17: Group outlook
Group outlook For personal use only “We have taken decisive action to improve margins and ensure the business is responding to market conditions and our customers’ needs. We are focused on realizing our objective of providing our shareholders a satisfactory return on their investments. We are confid
Slide 18: Why WorleyParsons
Why WorleyParsons Delivering what we promise for customers and shareholders For personal use only ► Differentiated from our peers Deep and broad technical expertise Diverse geographic presence Services across the asset life cycle from concept to decommissioning Realigned the business and ref
Slide 19: Major Projects
For personal use only Major Projects Delivering What we promise Brian Evans
Slide 20: Major Projects
Major Projects For personal use only ► Why Meet customer capital efficiency challenge 16+ Aligns with the way our customers are organized Major Projects Enables optimization of project execution contracts ► Scope Large and complex projects ~12% Full project delivery FY2014 aggregated ► How
Slide 21: North America Major Projects
North America Major Projects For personal use only 13 out of our 16 Major projects are being executed in North America 13+ Major Projects For developments all over the world contracts Mainly EPCM but some early phase ~21% North America FY2014 Spanning our full project capability including: a
Slide 22: Major Projects 2014 Awards
Major Projects 2014 Awards For personal use only ► Hydrocarbons North West Redwater Partnership, Sturgeon Refinery Upgrader Piperacks/Flare - EPCM Canada North West Redwater Partnership, Construction Management Canada Williams Companies Redwater Debottlenecking Modules Canada Sasol Lake Char
Slide 23: Horizon – Major Projects: Getting better at what we do
Horizon 1 – Major Projects Getting better at what we do For personal use only The WorleyParsons Academy Creating the right environment for success Training, education and knowledge sharing ► Three distinct schools: Leading People | Winning Work | Project Delivery ► Project Delivery Project Exc
Slide 24: Horizon – Major Projects: Growth from the core
Horizon 2 – Major Projects Growth from the core For personal use only ► Growing with our customers Focusing and strengthening relationships with strategic customers ► North America ~ $1B Major Project opportunities identified for award in FY15 ► Largest opportunities Major Pipelines LNG sector
Slide 25: Major Projects - Hydrocarbons
Major Projects - Hydrocarbons Horizon 2 - Growth from the core For personal use only > Major upstream developments feeding LNG plants Onshore Alaska & Western Canada Offshore East Africa > Field development planning Deep, difficult, remote Including Arctic > Geographic expansion Mexico E
Slide 26: North American LNG
North American LNG For personal use only ~400 MTPA new LNG capacity proposed in the US Lower-48 and Western Canada since 2010 26 Source IHS LNG Value Chain and Markets Service
Slide 27: Deepwater CAPEX
Deepwater CAPEX Strong competitive position For personal use only Subsea Tree Capex (US$M) by Subsea Tree Capex (%) Water Depth (meters) by Water Depth (meters) • 2014-2018 Deepwater installation Capex US$115 billion, doubling from 2009-2013 • Deepwater trees account for 84% of Capex of all subsea t
Slide 28: Potential in Arctic reserves
Potential in Arctic reserves For personal use only 174 discovered fields in Arctic, 83% of discovered resources are Russian Image source: Infield Systems, “Global Offshore Oil and Gas Outlook” February 2013 Estimated spend • Alaska US$30-50B in next decade • Canadian Arctic minimal in next few years
Slide 29: Major Projects: Offshore Newfoundland & Labrador
Major Projects Offshore Newfoundland & Labrador For personal use only ► Current activity ExxonMobil Hebron topsides Small studies ► Market potential ~US$5B over next 5 years ► Accessible spend for WorleyParsons over next 5 years Offshore ~US$200M Onshore – negligible 29
Slide 30: Major Projects: Arctic, British Columbia Gas and LNG
Major Projects Arctic, British Columbia Gas and LNG For personal use only ► Services to every aspect of LNG value chain ► Market potential Canadian Arctic – not a lot of activity Russia ~ US$500B over next 30 years ► Accessible spend for WorleyParsons Alaska ~ US$3-5B over next 5-7 years Can
Slide 31: Major Projects – MM&C
Major Projects – MM&C Horizon 2 - Growth from the core For personal use only > Minerals and Metals improving outlook for study activity > Chemicals investment in US driven by low cost shale gas > Global fertilizer opportunities Potash and Phosphates > Iron ore Labrador Trough > Grow mining busines
Slide 32: Major Projects – Infrastructure
Major Projects – Infrastructure Horizon 2 - Growth from the core For personal use only > Growth opportunities in unconventional gas, LNG and pipeline infrastructure Water Environment and Geosciences Ports > Power is being disrupted Environmental requirements driving closure or upgrades of fo
Slide 33: Global Major Projects Outlook
Global Major Projects Outlook For personal use only Major Projects ► Key projects with significant procurement spend winding down in FY2015 ► FY2015 margin improvement focus Creation of Major Projects business line WorleyParsons Academy ► Expect key projects to move forward in the medium term
Slide 34: Improve
For personal use only Improve Delivering What we promise Randy Karren
Slide 35: Improve
Improve For personal use only ► Definition The provision of value-added services via a long-term contract to support our customers business or operation. The services include: − Brownfield project delivery − Customer-defined portfolio delivery − Asset management − Business improvement − Operations
Slide 36: Improve Business Line
Improve Business Line For personal use only ► Why Support customers to attain capital effectiveness and capital efficiency for their assets Aligned with our customers organizations Cost-effective delivery model ► Scope Nominated strategic customer relationships Supports growth and performa
Slide 37: Horizon: Existing relationships
Horizon 1 Existing relationships For personal use only • Enhanced HSE performance • Operational excellence • Predictable project outcomes • Cost efficiency & effectiveness • Customer service focus • Global best practices 37
Slide 38: Horizon: Enduring long-term relationships
Horizon 1 Enduring long-term relationships For personal use only • Retain current base • Simplify and secure our workflow • Longer-term commitments • Strategic partner • Return on capital employed • Horizon 3 business opportunities 38
Slide 39: Improve - Horizon: Growth from the core
Improve - Horizon 2 Growth from the core For personal use only • Full service project delivery • Asset management and business improvement • Operations support • Turnaround management • New customers / new geographies 39
Slide 40: Improve - Horizon: North America Opportunities
Improve - Horizon 2 North America Opportunities For personal use only ► Strong pipeline of opportunities ► Currently tracking opportunities amounting to over $1B in revenue across 80+ long term relationships ► Opportunities span across Hydrocarbons and Power 40
Slide 41: Improve - Hydrocarbons
Improve - Hydrocarbons Improve business strategies – North America For personal use only > Growth Services Full service EPC/EPCM delivery Asset Management > Growth Geographies USA South Offshore > Growth Subsectors LNG Petrochemical Heavy Oil Gas Processing 41
Slide 42: Improve – MM&C
Improve – MM&C Improve business strategies – North America For personal use only > Growth Services Asset optimization Petrochemical asset development and support > Growth Geographies Northern Canada USA Gulf Coast > Growth Subsectors Alumina Chemicals 42
Slide 43: Improve – Infrastructure
Improve – Infrastructure Improve business strategies – North America For personal use only > Growth Services Water management Advisory Regulatory support > Growth Geographies Ft. McMurray USA Gulf Coast > Growth Subsectors Water Environmental Power 43
Slide 44: Improve North America
For personal use only Improve North America Delivering What we promise Andy Mackintosh
Slide 45: Improve North America
Improve North America For personal use only ► Alliances and long-term relationships provide a deep understanding of customer drivers 150+ ► Improve services include Improve Delivery of expansion and infill projects Contracts Upgrades De-bottlenecking Maintenance and small capital projects ~2
Slide 46: Improve – Brownfield execution
Improve – Brownfield execution For personal use only Asset Management (Brownfield Execution) Asset Shutdowns, Operations & Sustaining Subcontractor Integrity Turnarounds Maintenance Capital Management Management & Outages Asset Management is defined as: “the set of coordinated activities that an org
Slide 47: General industry trends: Brownfield services
General industry trends Brownfield services For personal use only ► Customers are seeking Improved HSE performance Better alignment to their business drivers Long term commitment and relationships (Tier 1s) Improved cost, quality and schedule certainty Asset integrity and assurance Globa
Slide 48: Improve – Brownfield execution
Improve – Brownfield execution For personal use only Asset Management Procurement Brownfield Extended Consulting Engineering Services support & Contracts Execution Services RBI, Rapid Response, Inspection, Asset Corrosion Mgt, Restoration & Rapid Response Verification, Failure Integrity Scope, Mater
Slide 49: Panel Discussion
For personal use only Panel Discussion Delivering What we promise North America Investor Day
Slide 50: Services
For personal use only Services Delivering What we promise Greg Conlon
Slide 51: Services
Services For personal use only ► Overview of 6 locations ► Restructure discussion Merging of CAN and USAC Benefits of restructure Business Unit overview ► Interface with Improve and Major Projects ► INTECSEA 51
Slide 52: North America Services
North America Services For personal use only The merged North America is the bedrock from which we maintain, enhance and leverage our broad and deep technical capabilities and 40+ Offices our diverse geographic presence 39% Total Revenue 52
Slide 53: New Organisation
New Organisation For personal use only Business Lines Major Projects Services Improve Europe Sub Saharan Australia Pacific Regions (6) Middle East North America Latin America INTECSEA Africa Asia China North Africa Locations (6) North America North America North America North America Unconventional
Slide 54: Benefits of the restructure
Benefits of the restructure For personal use only ► The Services business line provides the foundation for the way we deliver projects for the resources and energy sectors in North America (and internationally) (and with the other business lines) – it is based on deep collaboration between locations
Slide 55: Organisational Concept
Organisational Concept For personal use only 55
Slide 56: Location & BU Concept
Location & BU Concept Central For personal use only Pipelines CORD East Upstream M&M Sulphur, Arctic Power & Nuclear West I&E Downstream & Chemicals UCOG Offshore Gulf INTECSEA Coast 56
Slide 57: Unconventional Oil & Gas
Unconventional Oil & Gas For personal use only Contrado provides full integration of field development, synchronizing surface infrastructure with hydrocarbons production. Through collaboration with our customers, we specifically aim to integrate water, power and hydrocarbons infrastructure through w
Slide 58: Upstream
Upstream For personal use only Strong heritage market Active in Gas field & midstream developments, front end LNG work and facilities associated with pipeline network expansions Repositioning for Oil Sands recovery under capital cost efficiency pressure Globalizing heavy oil capability 58
Slide 59: Pipelines
Pipelines For personal use only Full range of engineering, procurement and construction management (EPCM) services covering all facets of on-shore pipelines, from large-diameter, long-distance transmission pipelines to small-inch gathering and distribution systems, with the associated pipeline-relat
Slide 60: LNG – a snapshot
LNG – a snapshot For personal use only Upstream sub-sector Enabling works, program Mgmt & OSBL Growth in Western Canada Local Approvals Marine consulting PMC/OE LNG, Regas & FLNG core Western Canada emerging 60
Slide 61: Offshore
Offshore For personal use only Engineering services to all major offshore developments in the Gulf of Mexico, Middle East, North Sea, Australia, Sub-Saharan Africa, Southeast Asia, Russia and South America. These services include SURF, floating production, pipelines and topsides for all project phas
Slide 62: Downstream & Chemicals
Downstream & Chemicals For personal use only Expertise in the design of petrochemical units covering 600+ projects in more than 30 countries to date. HVPD centres in China and India further expand both our capability and capacity to work with diverse technologies. 62
Slide 63: Power
Power For personal use only Potential office location Expertise in all types of power generation and delivery projects including coal, gas, nuclear, renewable and power network projects. Providing operations and maintenance services for operating power plants 63
Slide 64: Minerals & Metals
Minerals & Metals For personal use only Processing expertise covering base metals, Potential precious metals, uranium, aluminum, alumina, office location rare earths, graphite and fertilizers, with a particularly strong capability in potash. Specialized services in pyrometallurgy, hydrometallurgy, a
Slide 65: Infrastructure & Environment
Infrastructure & Environment For personal use only Enabling capability for Resource customers Expertise in ports, marine, terminals, rail, water, environment and restoration. Technical support from pre-feasibility approvals and permitting through to execution, working in close collaboration with
Slide 66: North America Services
North America Services For personal use only 6 Locations 7 Business Units delivering performance 40+ offices A cornerstone of our broad and deep technical capabilities and our diverse 66 geographic presence
Slide 67: Strategic Outlook
Strategic Outlook For personal use only 8.9% 9.0% 13.7% 11.9% Good market fundamentals 193 UCOG / Contrado – continental demand 188 151 Oil Sands – capital efficiency 137 Gas monetization – driving downstream and chemicals Offshore – balanced portfolio M&M – consolidate / asset focus Emerging Nuclea
Slide 68: Interface with Major Projects
Interface with Major Projects For personal use only ► Customer coordination – one WorleyParsons Global consistency – Major Projects Local engagement – Services Dedicated Asset / Alliance engagement – Improve ► Key delivery partnership Resource & facilities Simplified transfer process ► Maj
Slide 69: Interface with Improve
Interface with Improve For personal use only ► Customer coordination – Local consistency Where practical 100% Improve locations ► Key operational partnership Improve workload typically predictable Specific Project Resources Overhead resource optimisation 69
Slide 70: WorleyParsonsCord
For personal use only WorleyParsonsCord Delivering What we promise Brad Van de Veen
Slide 71: Capacity and Capability
Capacity and Capability For personal use only Core business – fabrication & construction Selective EPC / EPCM delivery 120 acres High-load corridor access Up to 35,000 diameter-inches of piping fabricated / week 2700 direct-hire and subcontracted workforce Emerging trend – global sourc
Slide 72: Current Market Outlook
Current Market Outlook For personal use only Focus on growing our business in 4 areas: Pipeline terminals Pump stations Compressor stations Gas liquids projects Slow recovery of oil sands market Significant capital cost efficiency pressures driving the Alberta WorleyParsonsCord Module
Slide 73: Business Model
Business Model For personal use only ► Balanced portfolio between module yards and field construction ► MSA multi year contracts ► Collaboration with EPCM locations to deliver EPC solutions ► Manage commercial risk with mix of commercial models Reimbursable 10% Unit Rate 40% Reimbursable / Fixed Fee
Slide 74: Evolving Global Supply Chain
Evolving Global Supply Chain For personal use only Ft. McMurray Fort McMurray - Module installation at site Edmonton Calgary Beijing - Design/drafting Vancouver Beijing Qingdao 350 containers shipped Edmonton - Unpacking and module fabrication Qingdao - Prefabrication WorleyParsonsCord Module Yard,
Slide 75: UCOG
For personal use only UCOG Delivering What we promise Phil Searl
Slide 76: Unconventional Oil & Gas
Unconventional Oil & Gas For personal use only Contrado provides full integration of field development, synchronizing surface infrastructure with hydrocarbons production. Through collaboration with our customers, we specifically aim to integrate water, power and hydrocarbons infrastructure throu
Slide 77: North America Resources
North America Resources For personal use only 77
Slide 78: Pipeline Infrastructure
For personal use only Pipeline Infrastructure Delivering What we promise Phil Searl
Slide 79: Active Pipeline Projects
Active Pipeline Projects Global Execution Team For personal use only WorleyParsons is currently delivering: Over 5,000km of LNG-related pipelines projects 3,500km of liquid pipelines projects Over 5M barrels of liquid storage projects Over 3M horsepower of pumping and compression facilities
Slide 80: North America Gulf Coast
For personal use only North America Gulf Coast Delivering What we promise Brian Evans
Slide 81: Offshore
For personal use only Offshore Engineering services to all major offshore developments in the Gulf of Mexico, Middle East, North Sea, Australia, Sub- Saharan Africa, Southeast Global Markets Asia, Russia and South America. These services West Africa include SURF, floating Mexico production, pipe
Slide 82: Downstream and Chemicals
For personal use only Downstream and Chemicals Expertise in the design of petrochemical units covering 600+ projects in more than 30 countries to date. HVPD centres in China and India Global Markets further expand both our capability and Central and South capacity to work with America diverse tech
Slide 83: Announced US Refining Capacity
Announced US Refining Capacity For personal use only 83 Source: IHS Energy April 2014
Slide 84: LAM support Opportunities
LAM support Opportunities For personal use only ► Opportunities identified to support LAM from Colombia Gulf Coast to start in Peru FY2015 Mexico Revenue ~ US$600M Ecuador Columbia largest opportunity Most Downstream Downstream Offshore Pipelines Heavy Oil UCOG 16
Slide 85: LAM Opportunities
LAM Opportunities Horizon 2 - Growth from the core For personal use only ► Colombia Favorable oil policies and encouraging private investment Production expected to increase New E&P blocks Pacific Ecopetrol modernizing refineries Cartagena Challenges – infrastructure and political ► Mexico
Slide 86: FY15 Outlook for Gulf Coast
FY15 Outlook for Gulf Coast For personal use only ► Flat to weaker than FY14 ► Improved delivery and resultant profitability Increased use of HVE More Work share across North America ► Secured work is solid Customers are cautious ► Medium term A new three year contract in negotiation US re
Slide 87: Q&A
For personal use only Q&A Delivering What we promise
Slide 88: Close
For personal use only Close Delivering What we promise