Half Year Results 2010 1
Overview A reasonable result in challenging market Variable conditions in a number of markets Power operations (particularly US) US Hydrocarbons (Downstream) Canada region and Minerals & Metals result materially down on prior period Expected this shortfall Encouraging signs in both markets for second half Middle East continues to perform strongly Market entry into Brazil through acquisition of CNEC Australian Infrastructure capability strengthened with acquisition of Evans & Peck
Financial Overview Aggregate revenue $2,548.1m down 21.7% Net profit after tax $138.0m down 30.1% Operating cash flow $147.5m down 37.1% Earnings per share 56.8c/s down 30.4% Dividend 35.5c/s fully franked Negative FX translation impact of $10.9m Strong financial capacity
Snapshot Strategic push into LNG Increased number of Improve relationships Increased exposure on new LNG trains 100% renewal on all expiring major long-term contracts 4 material contract renewals Breadth and scope of long-term contracts Sustainability solutions remain a focus Good cost management and reduced capital expenditure in the period Improved second half result anticipated
Safety Performance CATEGORY FY09 1H10 Total Recordable Case Frequency 0.11 0.15 Rate* Lost Workday Case Frequency 0.02 0.02 Rate* (* WorleyParsons applies the US OSHA reporting requirements) MAJOR SAFETY ACHIEVEMENTS IN THE PERIOD CURRENT CHALLENGES 40 Million hours LTI free on Shell’s AOSP project Sustained industry growth which is translating into an expanded skills demand 35 Million hours LTI free on Ma’aden’s Phosphate project An aging workforce 10 Million hours LTI free on ADGAS’s OAG 1 project More construction activity and use of contractors with British Safety Council “Sword of Honour” no industry experience Safety Awards from Sunoco and One Steel Projects are bigger, more complex and delivery times Houston Business Roundtable Safety Excellence Award shorter Nigeria DeltaAfrik HIV/AIDS Program launched Young people are invincible!
Operations 29,100 personnel* 40 countries *Which includes 700 personnel with CNEC acquisition
Impact of Middle East Projects CANADA GaSCO CO2 Recovery & Injection /Nitrogen Gen Plant PMC GASCO Project Management Contract Nexen Petroleum EPCM Services Shah and Habshan Railway FEED UNITED KINGDOM Chemaweyaat/ Tacaamol UNITED STATES KNPC Acid Gas Removal Plant ChevronPhillips NCP Project Gasco Integrated Gas Dev PMC CHINA CANADA SAMREF Clean Fuels, Offshore Topside Facilities Ras Tanura Refinery Tank Farm Kuwait Oil Company Projects EUROPE SAMREF Clean Fuels RasTanura Refinery Expansion UNITED AMAL Project SABIC Methyl Methacrylate/Acrylonitrile Project STATES CNOOC LNG Sipchem Ethylene Vinyl Acetate Project Shah Gas Development MIDDLE ASIA EAST LNG Offshore Platforms and Facilities Qatar Petroleum Power Supply FEED Qatar Petroleum Halul Submarine Power Cable AUSTRALIA / NEW ZEALAND Al Khafji General Services Halul Integrated Pipeline Project Saudi Aramco Arabiyha Field Development Qatar Aluminium Ma’aden Phosphate Khazzan Makaren EWT NEW ZEALAND Ma’aden Alumina Egyphos Phosphatic Fertilizer London Mining Wadi Sawawin Iron Ore EMAL Aluminium Smelter Dubai Aluminium Oman DUQM Project Sohar Aluminium PDO Amal Steam Surface Facility Non Hydrocarbons projects Qatar Petroleum Power Study (Regions executing work)
LNG Projects Major strategic push to support customers in their LNG developments Currently we have Improve contracts covering 23 LNG trains with 8 different clients We are executing, in our own capacity or in joint venture, projects at all stages for 17 new greenfield LNG trains Woodside Pluto LNG – World’s First Pre-assembled LNG Plant
Improve Contract Renewals SYNCRUDE • 5 year renewal 19 year relationship IMPERIAL OIL • 5 year renewal 19 year relationship TENNESSEE VALLEY AUTHORITY • 5 year renewal 19 year relationship WOODSIDE PETROLEUM • 4 year renewal 15 year relationship
Long Term Contracts EUROPE / AFRICA CANADA 12 Contracts 52 Contracts Esso Exploration Angola (New) Syncrude CoSyn (Renewal) SASOL Shared Services (New) Imperial Oil (Renewal) Sembcorp Ultilities (New) BP Canada (Renewal) Sellafield Multi Discipline Design House Services (New) RUSSIA ASIA / MIDDLE EAST CANADA 36 Contracts EUROPE UNITED Shell Malampaya (New) STATES Brunei LNG (Renewal) Optimal Engineering and Construction Supervision ASIA Alliance (Renewal) MIDDLE EAST USA / LATIN AMERICA / CARRIBEAN 43 Contracts SOUTH AMERICA US Steel (New) AFRICA Cogentrix Cedar Bay (New) AUSTRALIA Chevron Global Terminals (New) AUST / NEW ZEALAND Tennessee Valley Authority (Renewal) 46 Contracts Alcoa Bunbury/Wagerup (New) CS Energy Asset Management (New) NEW ZEALAND Woodside North West Shelf (Renewal) Horizon Power (New) Vale Coal (New)
Sustainability Solutions
CNEC Overview CNEC was part of the engineering & construction division of the Brazilian conglomerate Camargo Corrêa Around 700 people across Brazil, with offices in Argentina and Peru Customer base includes Petrobras, Vale and Electrobras Established leader in hydropower within Brazil, with world class capability Aim to become a hub for Brazil’s hydrocarbons deepwater market Completion expected February 2010 Acquisition Price BRL 170 million (approximately $A110.0 million)
Evans & Peck overview Evans & Peck provides high level business advisory services Around 350 employees across Australia, with offices also in Hong Kong and Shanghai Established leader offering strategic, commercial and contractual advice to governments and industry Water and waste water Rail services Mining and Resources Acquisition Price total consideration of $88.5 million (cash $37.5 million and issue of new shares $51.0 million)
Half Year Results 2010 Financial Results David Housego 14
Financial Profile $m HY09 HY10 vs. HY09 vs. 2H09 Aggregated Revenue 3,256.1 2,548.1 (21.7%) (14.1%) EBIT 314.6 209.8 (33.3%) (27.8%) EBIT margin 9.7% 8.2% (1.5%) (1.6%) Net profit 197.5 138.0 (30.1%) (28.5%) Net profit margin 6.1% 5.4% (0.7%) (1.1%) Normalized EPS (cps) 1 87.8 62.8 (28.5%) (26.1%) Cash flow from operating activities 234.5 147.5 (37.1%) (52.7%) USD:AUD rate 0.788 0.869 (10.3%) (22.5%) 1 Before amortization of intangibles including tax effect of amortization expense HY10 refers to the six months ended 31 Dec 2009; HY09 refers to the six months ended 31 Dec 2008; 2H09 refers to the six months ended 30 Jun 2009
Financial Profile 1 $m Revenue EBIT Margin % 6,219.4 10.6 9.7 4,882.4 9.0 8.2 8.1 3,525.4 3,256.1 2,548.1 2,459.1 2,354.1 1,455.8 1,134.9 2006 2007 2008 2009 HY10 2006 2007 2008 2009 2010 Net profit $m 390.5 343.9 Margin impacted by current market conditions 224.8 Effective tax rate down 5.9% to 25.2% 197.5 due to change in earnings mix 152.7 138.0 139.1 NPAT FX translation impact $10.9m 94.5 61.8 Dividend payout ratio maintained 2006 2007 2008 2009 2010 1 Aggregated revenue
Change In Net Profit HY10 vs. HY09 197.5 (70.7) (10.9) 39.9 138.0 $m (9.7) (23.2) 1.0 15.4 (1.3) HY09 Hydrocarbons Power Minerals & Metals Infrastructure & Corporate Net Interest Income Tax FX Impact HY10 Environment overhead
Hydrocarbons HY10 Revenue 1 % by Region Revenue 1 $m 4,740.1 USLAC 18% AME 20% 3,604.8 2,579.1 2,373.7 1,869.1 1,768.9 1,760.3 E&A 17% 1,026.0 817.3 ANZ 21% 2006 2007 2008 2009 2010 Canada Revenue % of Group 71.9% 73.2% 73.8% 76.2% 73.4% 24% EBIT Margin 8.9% 9.3% 10.8% 11.2% 10.4% EBIT by Region HY10 vs 2H09 2 $m 9.2 273.9 (16.8) 6.3 '(0.1) (39.1) 258.2 Distribution of revenue even across (23.3) regions 194.4 Significant drop in performance in the US FX impact in line with previous guidance Canadian result was well below previous HY09 2H09 AME ANZ Canada E&A USLAC FX Impact HY10 corresponding period 1 Aggregated revenue 2 Regions in constant currency
Power HY10 Revenue 1 % by Region Revenue 1 $m 546.3 AME 7% 465.9 437.4 367.8 ANZ 18% 289.3 247.3 217.7 USLAC 45% 188.1 173.2 Canada 6% 2006 2007 2008 2009 2010 Revenue % of Group 15.0% 12.4% 9.5% 8.8% 9.7% E&A 24% EBIT Margin 13.0% 13.2% 13.0% 12.2% 7.6% EBIT by Region HY10 vs 2H09 2 $m US remains biggest market 37.0 4.7 (14.7) US remains challenging due to legislative 1.3 (0.9) 29.7 0.0 uncertainty concerning carbon (1.2) 18.8 Refocus of US operation well underway. Charge of $5 million in half year Growth in Europe driven by key nuclear HY09 2H09 AME ANZ Canada E&A USLAC FX Impact HY10 contracts 1 Aggregated revenue 2 Regions in constant currency
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