Half year results 2014 Andrew Wood Overview Earnings in line with - PowerPoint PPT Presentation

Half year results 2014 Andrew Wood

Overview ► Earnings in line with guidance, strong cash flow ► Decline in earnings due to Australian market and WorleyParsonsCord ► Hydrocarbons revenue flat, EBIT down ► Growth in chemicals partially offset minerals and metals weakness ► Infrastructure revenue and EBIT down ► 40 significant contract awards ► Interim dividend of 34.0 cents per share ► Reiterate full year guidance 2

Financial snapshot ► Underlying NPAT 1 of $100.7m, down 35% 2 ► Aggregated revenue 3 of $3,793m, down 2% 2 , down 10% 2 on constant currency basis ► Operating cash flow up 84% to $230m ► Gearing ratio remains strong at 25%, lower end of target range 1 The underlying result for HY14 excludes the net fair value gain on acquisition of associates of $11.4m 2 Versus previous corresponding period 3 Refer to slide 31 in the Supplementary slides for the definition of Aggregated Revenue 3

Performance remains good ► Total Recordable Case Frequency Rate (TRCFR) for HY14 was 0.12 (FY13: 0.13) We continue 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 4

Significant awards Hydrocarbons awards Minerals, Metals & Chemicals awards • Shell – Unconventional Oil 10 13 and Gas Global Enterprise • Invista – EPCM services for 40 Framework Agreement, global hexamethylene diamine (HMD) project in the Shanghai • Kuwait Oil Company – 5 year Chemical Industrial Park in contract for supply of program China, China management services, Kuwait • Andes Iron SpA – feasibility study for Dominga project, Chile 17 Infrastructure awards • Consumers Energy – Karn units 1 and 2 SDA and O&M services, US • Arriyadh Development Authority – Consultancy services to execute Metro Development Strategy 5 for Arriyadh (MEDSTAR), Saudi Arabia

Improve contracts WorleyParsons’ performance continues to be underpinned by our growing long term contract base  19 New Improve contracts awarded  More than 290 Improve contracts globally  16 global/multi-region contracts 6

Strength in diversification 166 43 37,500 2.9m people offices countries workshare hours 7

Half year results 2014 Simon Holt

Financial Profile Strong operating cash flow HY14 HY13 vs. HY13 Aggregated revenue 1 ($m) 3,793 3,879 (2)% Underlying EBIT ($m) 178 252 (29)% Underlying EBIT margin 4.7% 6.5% (1.8)% Underlying Net Profit After Tax ($m) 101 155 (35)% Underlying NPAT margin 2.7% 4.0% (1.3)% Basic EPS (cps) 40.8 63.0 (35)% Operating cash flow 230 125 84% Interim dividend (cps) 34.0 41.5 (18.1%) 1 Refer to slide 31 of the Supplementary slides for the definition of Aggregated revenue 9

Aggregated revenue by type Professional services down, construction revenue grows $m HY14 HY13 vs. HY13 Aggregated revenue 3,793 3,879 (2)% Professional services 3,167 3,267 (3)% Construction and fabrication 482 444 9% Procurement revenue at margin 139 154 (10)% Other income 4 14 (68)% 10

Aggregated revenue by region HY2013 ($m) HY2014 ($m) % of total aggregated 25% revenue 20% 18% 17% 16% 15% 14% 11% 962 9% 8% 8% 7% 8% 688 644 7% 613 5% 557 5% 513 444 4% 3% 767 329 322 317 290 297 257 206 204 163 100 11

Diversification in earnings ► Top 10 customers deliver 34% of the gross margin ► Top 10 projects deliver 15% of the gross margin ► Top 10 locations deliver 65% of the operating EBIT 12

Underlying Operating EBIT 15.7% HY2013 ($m) HY2014 ($m) % EBIT margin 12.7% 151 8.9% 11.9% 9.7% 11.9% 9.0% 15.8% 18.4% 11.5% 14.2% 87 10.6% 68 66 61 59 7.7% 58 51 51 47 4.3% 41 1.7% 5.7% 0.6% 31 9 25 5 (3.3)% 1 12 -3 13

CSG segment EBIT HY2013 ($m) HY2014 ($m) 448 373 258 251 37 77 69 62 16 51 Hydrocarbons Construction & Minerals, Metals & Infrastructure Total (ex construction & fabrication Chemicals fabrication) 14

Underlying NPAT ($m) (48.5) 12.8 (46.2) 4.1 28.4 12.4 (13.6) 155.1 2.4 (6.2) 100.7 15

EBIT result by segment ($m) (29.3) (35.2) (11.2) (27.7) 28.3 448.1 373.0 HY13 Hydrocarbons Construction & Minerals, Infrastructure FX impact HY14 (excl. fabrication Metals & construction & Chemicals fabrication) 16

Margin profile EBIT % ► EBIT margin drop of 1.8% 8.6% 8.0% 7.2% 6.9% 9.0% 9.4% ► Primarily due to Australia, Cord, 7.1% 7.3% restructuring costs and one off TWPS benefit from prior year 8.2% 7.3% 6.6% 6.5% 4.7% FY10 FY11 FY12 FY13 FY14 ► Hydrocarbons margins flat EBIT margin by CSG % excluding the impact of 12.6% 13.0% construction and fabrication 10.4% 12.9% 8.1% 14.0% 9.2% 4.3% ► Construction and fabrication 13.2% 12.1% margin impacted by Cord 11.2% 11.2% 11.5% 11.4% 7.5% 3.4% Minerals, Hydrocarbons Infrastructure Construction & Metals & (ex construction fabrication Chemicals & fabrication) 17

Hydrocarbons ► Revenue flat HY14 HY13 Aggregated revenue $m 2,731.1 2,750.0 ► Segment margin down 1.4 % Professional services $m 2,151.0 2,181.3 overall Construction and fabrication $m 482.3 444.4 ► EBIT flat net of impact of Cord Procurement revenue with margin $m 96.8 123.3 Segment result $m 267.0 309.0 ► Rosenberg WorleyParsons Segment margin % 9.8% 11.2% increased Europe EBIT Operational EBIT by sector HY14 vs HY13 $m (14.7) (8.7) (8.4) (46.4) 22.5 (0.9) (7.2) (0.1) 19.6 2.3 309.0 267.0 HY13 ANZ ASCH CAN Cord EUR LAM MENAI SSA USAC FX HY14 (excl. impact Cord) 18

Minerals, Metals & Chemicals ► Downturn in ANZ due to project HY14 HY13 cancellations and completions Aggregated revenue $m 571.1 583.2 ► SSA EBIT growth driven by Professional services $m 556.4 580.4 TWP acquisition Procurement revenue with margin $m 14.6 2.7 ► Canada EBIT growth driven by Segment result $m 69.2 76.8 Iron Ore and Fertilizers Segment margin % 12.1% 13.2% ► Weakness in demand in LAM Operational EBIT by sector HY14 vs HY13 $m (24.5) 3.6 (1.4) 9.5 9.9 0.9 (5.9) (2.2) 2.5 76.8 69.2 HY13 ANZ ASCH CAN EUR LAM MENAI SSA USAC FX HY14 impact 19

Infrastructure ► General decline in ANZ HY14 HY13 Aggregated revenue $m 490.4 545.5 ► $10.7M TWPS one off in HY13 Professional services $m 459.6 505.3 Procurement revenue with margin $m 27.5 27.7 ► Downturn in Bulgaria Nuclear project Other income $m 3.3 12.5 Segment result $m 36.8 62.3 ► CAN private sector demand Segment margin % 7.5% 11.4% increasing Operational EBIT by sector HY14 vs HY13 $m (25.2) (4.5) (3.1) 3.7 2.2 2.5 (0.2) (1.3) 0.4 62.3 36.8 HY13 ANZ ASCH CAN EUR LAM MENAI SSA USAC FX HY14 impact 20

Cash flow Strong cash flow generation $m HY14 HY13 vs. HY13 EBIT 178 252 (74) Depreciation and amortization 54 51 3 Interest and tax paid (54) (89) 35 Working capital/other 52 (89) 141 Net cash inflow from operating activities 230 125 105 21

Gearing metrics Gearing at lower end of target range HY14 FY13 Gearing ratio % 25% 25% Facility utilisation % 54% 55% Average cost of debt % 5.5% 5.5% Average maturity (years) 4.2 3.8 Interest cover 1 (times) 8.6x 10.6x Net debt $m 741 742 Net Debt/EBITDA 1 (times) 1.3x 1.2x 1 Rolling 12 month calculation 22

Liquidity Financial capacity to support growth ► US$520m US Bank Liquidity summary $m HY14 FY13 vs. FY13 Syndication refinance Loan & OD facilities 2,069 1,912 8% completed during the Less: facilities utilized (1,116) (1,062) 5% period Available facilities 953 850 12% ► Increase in average Plus: cash 375 320 17% maturity from 3.8 years Total liquidity 1,328 1,170 14% as at 30 June 2013 to 4.2 years Bonding facilities 940 862 9% Bonding facility utilization 69% 71% (2%) Debt facility utilization profile $m 600 400 200 0 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 Utilized Not utilized 23

Segment performance Andrew Wood

Hydrocarbons ► Australian market continued to contract  Canada impacted by Cord and softening activity in oil sands  Improved EBIT for US business  Timing of major project starts is difficult to predict  Opportunities in offshore - deepwater in US, Africa and in Norwegian North Sea  UCOG opportunities in US, Canada, China and Australia  LNG opportunities in Canada, Australia and Africa ► Market outlook for Improve is robust, matching our strategic focus on this business line 25

Minerals, Metals & Chemicals  Increased geographic diversification  Minerals and metals short term market remains flat  Growth in Canada and the US largely through chemicals  Strengthened position in Africa  LAM impacted by reduction in copper related projects.  Minerals and metals customers currently focused on brownfields and sustaining capital work  Chemicals expenditure increasing in US 26 Ma’aden First Ore Feed to Mill