Slide 1: Half Year Results 2018
For personal use only Half Year Results Half year results 2018 2018 Andrew Wood, CEO
Slide 2: Disclaimer
Disclaimer For personal use only The information in this presentation about the WorleyParsons Group and its activities is current as at 21 February 2018 and should be read in conjunction with the Company’s Appendix 4D and Interim Financial Report for the half year ended 31 December 2017. It is in su
Slide 3: HY2018 summary: Our strategy is delivering results
HY2018 summary Our strategy is delivering results For personal use only Improved financial metrics $2,310.1m $78.2m ▪ Revenue growth from UK acquisition Aggregated revenue Underlying NPAT ▪ Cost reductions proven sustainable +6.7% growth from PCP +37.0% growth from PCP ▪ Improved EBIT and NPAT margi
Slide 4: Overview: HY2018 achievements
Overview HY2018 achievements For personal use only ▪ Aggregated revenue grew by 7% from PCP ▪ EBIT and NPAT growth ▪ Cash flow improved Financial results ▪ Strengthened balance sheet metrics ▪ New USD700m multi currency debt facility in place ▪ UK Integrated Solutions (IS) acquisition exceeding targ
Slide 5: Headcount stabilizing – above staff utilization target
Headcount stabilizing – above staff utilization target For personal use only Growth in global headcount Growth in global headcount Staff Utilization Headcount Change to Prior Month 87% Headcount 85% Utilisation % 83% Target Monthly rate 81% 79% 77% July Jan July Jan July Jan Jan-15 Apr-15 Jul-15 Oct
Slide 6: Backlog has increased
Backlog has increased For personal use only 36 month backlog ($b) Approximate timing of backlog ($b) Backlog as at 31 December 2017 6.5 6.0 6 0.7 FY18 2.0 5.5 5 FY19 2.4 4.5 5.1 5.3 4 4.7 FY20 1.3 3.5 4.2 3 Jun 16 Dec 16 Jun 17 Dec 17 FY21 0.3 WorleyParsons UK Integrated Solutions 6 Half year result
Slide 7: Aggregated revenue and underlying EBIT
Aggregated revenue and underlying EBIT Return to growth For personal use only Half on half revenue Half on half underlying EBIT AUD'M H1 H2 H1 H2 AUD'M 4,000.0 3,614 3,614 300.0 3,107 250.0 237 3,000.0 2,619 2,310 200.0 181 2,166 2,211 150 153 2,000.0 140 133 150.0 118 100.0 1,000.0 50.0 0.0 0.0 FY2
Slide 8: UK Integrated Solutions: Acquisition update
For personal use only UK Integrated Solutions Acquisition update 8 Half year results 2018
Slide 9: UK Integrated Solutions Integration
UK Integrated Solutions Integration For personal use only Workstream Progress Achievements Organization, Systems & Processes Systems implementation on schedule Cost Assumed cost synergies delivered. More expected Synergy Realization Customer feedback positive, Revenue market strategy being implement
Slide 10: Contract wins in the business since acquisition
UK Integrated Solutions For personal use only Contract wins in the business since acquisition ▪ Shell ONEgas EP&F (engineering, procurement and fabrication) contract extension ▪ Cygnus Alpha Compression Module for Engie ▪ Claire Ridge digital twin for BP ▪ Vorlich development subsea tie-back FEED fo
Slide 11: Offshore operational expenditure market
Offshore operational expenditure market Offshore MMO market opportunity For personal use only Global Offshore Opex – YoY growth (%) ▪ Customer opex continues to grow 15% ▪ Global Maintenance, Modifications and 10% 8% Operations (MMO) market fundamentals are 5% 5% 5% positive 2% Source: WorleyParsons
Slide 12: Strengthening customer capex budgets: Energy
Strengthening customer capex budgets Energy For personal use only Select Oil & Gas majors – global capex YoY growth (%) ▪ Trend continues to indicate increases in global 10% 4% 6% 4% hydrocarbons capex 0% ▪ Recent increase oil price yet to flow through (10%) to expenditure plans ▪ 2018 capex still >
Slide 13: Strengthening customer capex budgets: Resources
Strengthening customer capex budgets Resources For personal use only Select Minerals & Metals companies – global capex YoY growth (%) ▪ Mining customers are indicating a return to 20% 14% 3% spending 0% ▪ Growth focused on studies and brownfield (20%) (1%) projects (29%) ▪ 2018 capex still >60% belo
Slide 14: Energy and Resources: Markets at low point of cycle
Energy and Resources Markets at low point of cycle For personal use only Hydrocarbons annual global capex Minerals & Metals annual global capex $0 $0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2018 capex >40% below 2013 pea
Slide 15: Strategic priorities gaining traction
Strategic priorities gaining traction First Half highlights For personal use only ▪ Offshore / MMO – UK IS acquisition provides global position Horizon 3 ▪ Heavy Oil and Oil sands – return to growth in Emerging markets Canada Horizon 2 & products Growth Potential ▪ Chemicals Europe – Ludwigshafen of
Slide 16: Health Safety and Environment
Health Safety and Environment For personal use only Our safety performance ▪ Employee Total Recordable Case Frequency Rate (TRCFR) at Dec 2017 was 0.12 (June 2017: 0.08) ▪ Employee, Contractor & Subcontractor and Partner TRCFR at Dec 2017 was 0.16 (June 2017: 0.14) ▪ Increase in TRCFR due to higher
Slide 17: Economic and Social Progress
Economic and Social Progress For personal use only Bringing renewable power to more than one million Kenyan households Lake Turkana Wind Power project, Africa’s largest wind farm Local employment with skills development and philanthropic community projects have been part of the sustained social impa
Slide 18: Half Year Results 2018 – Tom Honan, CFO
For personal use only Half Year Results 2018 Tom Honan Group Managing Director Finance, CFO 18
Slide 19: Statutory statement of financial performance
Statutory statement of financial performance 31 December 2017 31 December 2016 For personal use only ($m) ($m) REVENUE AND OTHER INCOME ▪ Decrease in statutory revenue due to Professional services revenue 1,913.4 1,774.2 completion of Hebron project Procurement revenue 204.2 723.1 Construction and f
Slide 20: Reconciliation of statutory to underlying NPAT result
Reconciliation of statutory to underlying NPAT result Adjusted for non-trading items For personal use only HY2018($m) HY2017 ($m) Statutory result 1.4 (2.4) Additions (pre-tax) Other restructuring costs 5.5 23.4 Acquisition costs 5.9 - Staff restructuring costs - 32.8 Onerous lease contracts 12.2 22
Slide 21: HY2018 key financials
HY2018 key financials For personal use only Statutory Results HY2018 HY2017 vs. HY2017 ▪ Statutory revenue decrease due to completion of Total revenue ($m) 2,409.4 2,722.1 (11.5%) Hebron project and associated procurement EBIT ($m) 109.3 36.4 200.3% revenue at nil margin Net profit after tax ($m) 1.
Slide 22: Segment result by business line
Segment result By business line For personal use only HY 2018 HY 2017 vs. HY 2017 ▪ Services result impacted by reduction in US Aggregated Revenue ($m) 2,310.1 2,165.7 6.7% and reallocations to Major Projects in Saudi Services 1,215.8 1,358.7 (10.5%) Arabia Major Projects and Integrated Solutions (M
Slide 23: Key indicators: Trending in right direction
Key indicators Trending in right direction For personal use only Overhead Cost Index Gearing Ratio % HY2015 FY2015 HY2016 FY2016 HY2017 FY2017 HY2018 35.0% 30.0% -10 25.0% -20 20.0% -30 Gearing ratio = net debt/net debt + equity 15.0% -40 10.0% -50 HY15 FY15 HY16 FY16 HY17 FY17 HY18 Gross Margin (%)
Slide 24: Capital management
For personal use only Half Year Results 2018 Capital management 24
Slide 25: Gearing metrics
Gearing metrics Current balance sheet metrics For personal use only HY2018 FY2017 Gearing ratio1 % 26.1% 29.1% ▪ Gearing at low point of target band of 25-35% Facility utilization2 % 59.7% 60.0% ▪ More than $900m liquidity Average cost of debt % 4.9% 4.8% ▪ Average maturity almost three years Total
Slide 26: Liquidity: Core debt facility refinanced
Liquidity Core debt facility refinanced For personal use only 1,200 Debt facility utilization and maturity profile $m 1,000 800 A$m 600 400 200 - FY18 FY19 FY20 FY21 FY22 FY23 Utilized Not utilized ▪ New facility consists of a USD700 million multi-currency facility maturing in December 2020 ▪ Debt s
Slide 27: Outlook
For personal use only Half Year Results 2018 Outlook 27
Slide 28: Concluding remarks
Concluding remarks Progress in last six months For personal use only ▪ Revenue increased ▪ Costs maintained ▪ Margin improved ▪ Cash improved on PCP ▪ Backlog increased ▪ Refinanced core debt facility ▪ Acquired global leader in offshore MMO market ▪ Successful capital raise ▪ Integration of UK IS a
Slide 29: Group outlook
Group outlook For personal use only Market conditions have improved leading to stronger financial positions for energy and resources companies. We anticipate this will flow through to an increase in our activity levels in the medium term. Our focus on costs continues, while ensuring the sustainabili
Slide 30: Q&A
We help our customers meet the world’s Q&A Half Year Results 2018 For personal use only changing resources and energy needs 30
Slide 31: Supplementary information
For personal use only Half Year Results 2018 Supplementary information 31
Slide 32: Segment result by region
Segment result By region By region For personal use only HY 2018 HY 2017 vs. HY 2017 ▪ Revenue growth supported by UK IS and Aggregated Revenue ($m) 2,310.1 2,165.7 6.7% WorleyParsonsCord, offset by reductions in the APAC 558.7 528.8 5.7% US and South Africa EMEA 938.4 770.8 21.7% AM 813.0 866.1 (6.
Slide 33: Segment result by sector
Segment result By sector For personal use only HY 2018 HY 2017 vs. HY 2017 ▪ Hydrocarbons revenue increase from UK IS, Aggregated Revenue ($m) 2,310.1 2,165.7 6.7% Kazakhstan and Cord, partially offset by lower Hydrocarbons 1,725.7 1,482.9 16.4% revenues in the US, parts of the Middle East and a Pro
Slide 34: Global operations and employee numbers
Global operations and employee numbers For personal use only 25,300 people 110 42 offices countries 34 Half year results 2018
Slide 35: Backlog has increased
Backlog has increased For personal use only Backlog by region Backlog by sector as at 31 December 2017 as at 31 December 2017 0.7 0.3 0.7 Australia, Pacific, 0.8 1.2 Hydrocarbons Asia, China (APAC) Minerals & Metals, Americas (AM) Chemicals 1.6 Europe, Middle East, Infrastructure Africa (EMEA) 2.5 4
Slide 36: Backlog has increased
Backlog has increased For personal use only Backlog by region Backlog by sector as at 31 December 2017 as at 31 December 2017 7.0 7.0 6.0 0.1 0.0 6.0 - 0.7 (0.1) (0.1) 0.7 5.0 5.0 0.1 0.4 4.0 4.0 A#039;B A#039;B 3.0 6.0 3.0 6.0 5.1 5.1 2.0 2.0 1.0 1.0 - - WorleyParsons UK Integrated Solutions 36 Half year
Slide 37: Underlying earnings profile
Underlying earnings profile For personal use only Group Underlying EBIT $m 452.2 418.0 H2 302.7 H1 274.0 237.2 257.8 152.5 139.9 178.2 180.8 150.2 117.9 132.9 FY2014 FY2015 FY2016 FY2017 HY2018 Group Underlying NPAT $m 263.4 243.1 H2 H1 162.7 153.1 138.8 123.2 79.2 66.1 100.7 104.3 73.9 57.1 78.2 FY
Slide 38: Margin profile
Margin profile Operational Underlying EBIT % For personal use only H1 7.6% 6.5% H2 5.8% 5.8% 5.4% 6.3% 5.9% 5.8% 6.1% 5.0% 4.8% 5.3% Total 4.7% FY2014 FY2015 FY2016 (Restated) FY2017 FY2018 Operational Underlying NPAT % 4.5% H1 3.6% 3.8% H2 3.4% 3.4% 2.7% 2.9% 3.0% 2.7% 3.0% 2.8% 2.4% 2.6% Total * F
Slide 39: Revenue split
Revenue split For personal use only Contribution to aggregated revenue (%) Sector aggregated revenue (%) 9% USA, 16% ANZ, 18% 16% Hydrocarbons Middle East & Africa, 11% Asia, 6% Minerals, Metals & Chemicals Infrastructure Canada, 19% 75% Europe, 30% ▪ Contribution from Hydrocarbons and Europe increa
Slide 40: Revenue reconciliation
Revenue reconciliation For personal use only HY2018 ($m) HY2017($m) vs. HY2017 Revenue and other income 2,409.4 2,722.1 (11.5%) Less: Procurement revenue at nil margin (43.7) (572.2) (92.4%) Less: Pass through revenue at nil margin (138.8) (100.3) 38.4% Plus: Share of revenue from associates 86.0 11
Slide 41: EBIT reconciliation
EBIT reconciliation For personal use only HY2018 HY2017 ($m) ($m) EBIT 109.3 36.4 Add: other restructuring costs 5.5 23.4 Add: acquisition costs 5.9 - Add: staff restructuring costs - 32.8 Add: onerous lease contracts 12.2 22.6 Add: impairment of associate intangibles - 2.3 Add: net loss on sale of
Slide 42: Cash flow
Cash flow For personal use only HY2018 ($m) HY2017 ($m) EBIT 109.3 36.4 ▪ Cash flow improved on better Add: Depreciation, amortization 36.6 40.3 operating performance and Less: Interest and tax paid (40.2) (30.8) lower restructuring costs Less: Working capital/other (61.4) (130.7) Net cash inflow fr
Slide 43: Cash flow: Bridge to cash balance
Cash flow Bridge to cash balance For personal use only 700.0 ▪ Underlying operational cash 600.0 flow $70.0m 316 500.0 ▪ $25.7m of cash out for one off non-trading items Underlying operating cash flow – 70.0 400.0 Cash one off costs paid – 25.7 300.0 122 (38) (336) (6) 200.0 244 (16) (14) (20) (4) (
Slide 44: Liquidity and debt maturity
Liquidity and debt maturity For personal use only Liquidity Summary $m HY2018 FY2017 change ▪ Sufficient liquidity, bonding Loan, finance lease & overdraft facilities 1,805 1,835 (1.7%) and debt facilities Less: facilities utilized (1, 078) (1,106) (2.6%) Available facilities 727 729 (0.3%) Plus: ca
Slide 45: US Tax Changes
US Tax Changes For personal use only ▪ The charge to tax expense arose due to the reduction in the US Corporate tax rate from 35% to 21% ▪ This decrease in tax rate required a restatement of the value of all of WorleyParsons’ deferred tax assets to the lower amount which lead to the charge to tax ex
Slide 46: FX translation impact
FX translation impact For personal use only 115 Average exchange rate Spot exchange rate Movement in major currencies against AUD (indexed) Currency movement movement 110 BRL 1.3% 1.7% 105 CAD (1.1%) (1.9%) CNY 1.7% (2.3%) 100 EUR (3.5%) (2.8%) 95 GBP 0.2% (1.8%) 90 NOK (0.4%) (0.2%) AUDUSD AUDCAD A
Slide 47: Foreign exchange
Foreign exchange Impact total EBIT For personal use only 0.6 0.4 0.2 0.5 0.2 0.1 Millions - 0.1 (0.1) (0.1) (0.2) (0.1) (0.3) (0.2) (0.3) (0.3) -0.2 (0.4) -0.4 (0.8) -0.6 -0.8 -1.0 AED CAD EUR GBP KWD KZT NGN NZD OMR Other SAR TRY USD UZS Group EBIT FX Translation impact 50 40 30 41.0 A $m 20 10 11.
Slide 48: Acronyms
Acronyms For personal use only APAC – Australia Pacific Asia China IS – Integrated Solutions AM – Americas IT – Information Technology CPS – Cents Per Share MP&IS – Major Projects and Integrated Solutions EBIT – Earnings Before Interest and Tax MMO – Maintenance, Modifications and Operations EBITDA
Slide 49: WorleyParsons resources & energy
WorleyParsons resources & energy