Half year results 2013 Andrew Wood
Overview First half earnings in line with guidance ► Aggregated revenue of $3,879m, up 14%* ► Hydrocarbons professional services revenue and margin up* ► Strong contribution from lower margin reimbursable EPC activity, particularly from our fabrication and construction business, WorleyParsonsCord ► Good cashflow performance ► Number of people employed 40,400 ► 61 significant project and long term contract awards ► Expansion in key growth markets of China and Brazil continued ► Strong performance and growth in Canada ► Zero harm remains our ultimate goal ► Interim dividend of 41.5 cents per share 2 * versus previous corresponding period
Financial highlights HY13 HY13 vs. HY12 Aggregated revenue $3,879 m 14% EBIT $252 m 2% Net profit after tax $155 m 2% Operating cash flow $125 m 95% Basic earnings per share 63.0 c/s 2% Interim dividend 41.5 c/s 4% The IFRS financial information contained within this presentation has been derived from the 31 December 2012 Interim Financial Report which has been reviewed by Ernst & Young. This presentation however has not been reviewed or audited. 3
Zero Harm is our goal and to get there we strive for year on year improvement Performance remains good but we are further increasing our effort to ensure continued improvement Commenced a number of programs across the Group including: • Board and Executive Committee structured HSE site visit program • Road safety program • Optimising our approach to safety in construction and contractor management • Updating our incident investigations processes 4
Snapshot Increased market volatility primarily Growth in unconventional oil and gas driven by fluctuating commodity prices developments and escalating project costs Aging assets and greater regulatory South Africa impacted by decline in requirements driving increased demand for market conditions Improve Low cost of natural gas in the US Major customers seeking common global continues to drive downstream delivery platforms developments Recovery of the US power market has not yet eventuated 5
Snapshot Diversified operations enabled Increased project awards from tier growth in volatile markets 2 customers Canada, and in particular Local global model implemented WorleyParsonsCord, contributed to with outcome of customer focus growth in Hydrocarbons and delivery efficiency Strong performance from the Infrastructure & Environment Chinese and Brazilian businesses operations in the US and South Africa restructured due to reduced Material growth in the chemicals activity sector 6 6
Local delivery, global support 2.9 million workshare hours (HY2012: 2.1 million) 40,400 people 165 offices 41 countries 7
Significant awards for HY2013 61 significant and long term contracts / projects 8
Improve contracts ► Improve remains a key differentiator ► Demand for our Improve services continues to increase ► Randy Karren appointed to the Executive Committee as Group Managing Director – Improve ► Total of 19 new Improve contracts awarded ► 6 contracts renewed ► Currently have more than 275 Improve contracts Improve services continue to diversify 9
Financial results Simon Holt
Financial profile $m HY09 HY10 HY11* HY12 HY13 vs. HY12 Aggregated Revenue 3,256 2,548 2,905 3,399 3,879 14% EBIT 315 210 193 248 252 2% (0.8%) EBIT Margin 9.7% 8.2% 6.6% 7.3% 6.5% Net profit 198 138 119 152 155 2% (0.5%) Net profit margin 6.1% 5.4% 4.1% 4.5% 4.0% Basic EPS (cps) 81.6 56.8 48.5 61.8 63.0 2% Cash flow from operating activities 235 148 125 64 125 95% ROE 23.7% 18.9% 15.6% 18.8% 18.8% 0% First half earnings in line with guidance 11 * The underlying result for HY11 includes the fair value gain on acquisition of associates of $9.4m
Financial profile Robust aggregated revenue Hydrocarbons primary contributor to EBIT growth Minimal foreign exchange impact Global support costs remain flat at approximately 4.5% of aggregated revenue Robust aggregated revenue growth 12 * The underlying result for FY11 and FY12 excludes the fair value gain on acquisition of associates of $65.7m and $7.6m respectively
Margin profile Hydrocarbons professional services revenue and margin have increased Increased contribution from reimbursable EPC, including WorleyParsonsCord, has impacted Hydrocarbons margin Power impacted by uncertainty in North America and cancellation of key government contract in Europe Power margin includes a pre tax profit of $10.7 million from the sale of contracts into the TWPS Minerals, Metals & Chemicals margins have held up Infrastructure & Environment impacted by deteriorating markets in South Africa and the US Hydrocarbons professional services margin has increased 13
Hydrocarbons Record aggregated revenue 12% EBIT growth from HY2012 Australia grew in challenging market conditions Reduced activity in Europe, the Middle East and Sub Saharan Africa Increased activity in the US Strong performance and growth in Canada 14 * Regions in constant currency
Power Europe impacted by cancellation of key government project Latin America experienced increased material costs on a lump sum project The US grew despite market uncertainty The Australian power generation asset management business was consolidated into Transfield Worley Power Services Diversification outside of the US 15 * Regions in constant currency
Minerals, Metals & Chemicals Aggregated revenue up 21% on HY12 5% EBIT growth in challenging market conditions Australia market conditions deteriorated in the half Geographical diversification with Australia now 43% of aggregated revenue versus 63% in prior year Chemicals performing well in Asia, Latin America and the US Latin America improved EBIT due to key chemicals projects Earnings growth through geographical & sector diversification 16 * Regions in constant currency
Infrastructure & Environment Increased environmental work for the Hydrocarbons sector Softening in the Australian resources sector had a flow-on impact for Western Australia Reduced activity in Canada, the Middle East, Sub Saharan Africa and the US Demand for resource infrastructure providing growth in Latin America Impacted by reduced government spending 17 * Regions in constant currency
Cash Flow $m HY09 HY10 HY11* HY12 HY13 EBIT 315 210 203 248 252 Depreciation and amortization 40 43 47 50 51 Interest and tax paid (103) (132) (56) (64) (89) Working capital / other (17) 27 (69) (170) (89) Net cash inflow from operating activities 235 148 125 64 125 Net cash outflow from investing activities (82) (51) (24) (34) (37) Net cash (outflow) / inflow from financing activities (111) (111) (48) (55) 102 Good cash flow performance 18 * The underlying result for HY11 includes the fair value gain on acquisition of associates of $9.4m
Gearing and key metrics Key Metrics FY10 FY11* FY12* HY13 Gearing ratio 26% 22% 20% 20% Facility utilization 61% 53% 51% 55% Average cost of debt 5.2% 5.7% 5.7% 5.5% Average maturity (years) 3.8 4.6 3.8 4.2 Interest cover ** 13.3x 12.0x 12.4x 12.0x Net Debt/EBITDA ** 1.2x 0.9x 0.8x 0.8x Strong balance sheet metrics 19 * The underlying result for FY11 and FY12 excludes the fair value gain on acquisition of associates of $65.7m and $7.6m respectively ** Rolling 12 month calculation
Liquidity Liquidity Summary $m FY10 FY11 FY12 HY13 Loan & OD facilities 1,286 1,277 1,445 1,705 Less: facilities utilized* (782) (680) (740) (946) Available facilities 504 597 705 759 Plus: cash 141 171 247 434 Total liquidity 645 768 952 1,193 Bonding facilities 669 682 787 777 Bonding facility utilization 50% 61% 66% 68% ► Financial capacity to support growth with gearing at 20% ► US$ 300m of unsecured note payable issued in the US Private Placement market September 2012 maturing in 5 to 10 years with fixed annual coupon Well positioned to support growth 20 *Excludes capitalized borrowing costs
Sector outlook Andrew Wood
Hydrocarbons HY13 vs. HY12 Aggregated revenue $2,672 m 14.0% % of Group aggregated revenue 69% EBIT $301 m 11.9% Margin 11.3% 0.2% High level of unconventional oil and Low cost of natural gas in US gas development activity driving downstream developments Remain well positioned in oil sands market in Canada Continue to secure global services contracts Significant growth in our fabrication and construction business, Increased activity in Improve WorleyParsonsCord North American gas renaissance spurring increased levels of activity 22
Hydrocarbons Key project awards Chevron North Sea Limited – Rosebank front end engineering design (FEED), United Kingdom BP Iraq NV, PetroChina and State Oil Marketing Organisation of the Republic of Iraq – Rumaila oil field engineering, procurement and management services, Iraq Saudi Arabian Oil Company – general engineering and project management service contract, Saudi Arabia LukOil Mid-East Limited – West Qurna-2 oil field project management, technical and construction management personnel, Iraq Singapore LNG Corporation – LNG regasification expansion FEED, Singapore 23 23 Modular transit, Alaska
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