Full year results 2012 John Grill Overview Good earnings growth - - PowerPoint PPT Presentation

Full year results 2012

John Grill

Good earnings growth delivered in FY2012. Sound platform for further growth in FY2013.

► Strong growth in revenue and cash from operations ► 77 significant new major projects and long term contract

awards

► Increasing demand for Improve services ► Majority of revenue generated from key global customers ► Increasing footprint in the developing world continues to

create significant opportunities

► Growth in staffing to over 40,800 people ► Successful organisation restructure and CEO succession ► Continued commitment to driving improvement in safety

Overview

2

Statutory results Underlying results FY12 vs. FY11 Underlying results* Net profit after tax $353 m $346 m 16% Aggregated revenue $7,408 m $7,363 m 25% EBIT $538 m $530 m 12% Operating cash flow $438 m $438 m 49% Basic earnings per share 143.7 c/s 140.6 c/s 16% Final dividend 51.0 c/s Full year dividend 91.0 c/s

Financial highlights

The IFRS financial information contained within this presentation has been derived from the 30 June 2012 Financial Report which has been audited by Ernst & Young. This presentation however has not been audited.

3

* The underlying result for FY2012 and FY2011 excludes the fair value gain on acquisition of associates of $7.6m and $65.7m respectively.

Safety performance

► We incurred three work related fatalities

during the year, two from road accidents and one from a bacterial infection

► Safety remains a major focus in our

business

► We strive for year on year improvement but

this was not achieved in FY2012

• Total Recordable Case Frequency Rate

(TRCFR) was 0.12 (FY2011: 0.11)

• Lost Workday Case Frequency Rate (LWCFR)

was 0.03 (FY2011: 0.03)

► We are renewing our efforts for continued

improvement with company wide focus on

• Road safety
• Field and construction HSE activities
• Project start up activities
• Active engagement of our leadership teams in

HSE programs

4

 Continued growth in Hydrocarbons

and Minerals, Metals & Chemicals particularly in Canada, Australia and the USA

 Hydrocarbons and Minerals, Metals

& Chemicals increasingly dominated by top tier companies

Snapshot

 Game changing developments and ever

growing demand for energy globally is driving unconventional oil and gas

 Lower gas prices have sparked a

resurgence in petrochemical projects in the USA

 Uplift in asset enhancement and

restoration projects

5

 Strong focus on major global

customers

 Developing markets continue to be

a significant driver of growth – Latin America, Africa and China

 Infrastructure & Environment

focusing on resource infrastructure

Snapshot

 Continuing to globalise our

Minerals, Metals & Chemicals and Infrastructure & Environment services

 Actively pursuing further Improve

• pportunities

6

Local delivery, global support

40,800 people 163 offices 41 countries

4.9 million workshare hours (FY2011: 3.4 million)

7

Significant awards for FY2012

8

77 long term contracts / projects

► WorleyParsons’ performance continues

to be underpinned by our extensive long term contract base

• Total of 46 new Improve contracts awarded
• 18 contracts renewed
• Currently have over 260 Improve contracts

► Our selection was based upon

• Recognition of our leadership position in

long term contracts

• Proven safety performance
• Global footprint

Improve contracts

4 new global or multi-site agreements

9

Local / global model

Model has been well received by our clients and our people

10

► On 6 July this year we

announced changes to the company’s leadership

► Andrew Wood will succeed

me as Chief Executive Officer after the AGM in October

► Supported by an

exceptional leadership team

► I will be taking on the role

• f non-executive Chairman

early next year

Succession

11

Corporate responsibility

► We are on a journey to

become a Corporate Responsibility leader by focusing on

• Governance, ethics and

transparency

• Our people
• Human rights
• Community
• Fair operating practices and the

supply chain

• The environment

12

Kenya Project: Calgary graduates and senior management commissioning clean water and solar power in the Village of Hope Kenya

Financial results 2012

Andrew Wood

Financial profile

$m FY08 FY09 FY10 FY11* FY12* Aggregated revenue 4,882.4 6,219.4 4,967.1 5,903.5 7,362.6 EBIT 520.0 605.3 427.4 474.2 530.3 EBIT Margin 10.7% 9.7% 8.6% 8.0% 7.2% Net profit 343.9 390.5 291.1 298.5 345.6 Net profit margin 7.0% 6.3% 5.9% 5.1% 4.7% Basic EPS (cps) 142.5 161.1 118.5 121.5 140.6 Cash flow from operating activities 198.8 546.4 279.6 293.8 437.5 ROE 24.5% 25.4% 16.7% 16.3% 18.9%

14

Good growth compared to prior year and 1HFY2012

* The underlying result for FY2012 and FY2011 excludes the fair value gain on acquisition of associates of $7.6m and $65.7m respectively.

5 year financial profile

15



Record aggregated revenue



Good NPAT growth from FY2011 of 16%



Margins impacted by a small number of underperforming projects and low margin procurement activity



Effective tax rate down 3% from FY2011 to 24.1% due to earnings mix and tax refund



Cumulative unfavourable FX impact on EBIT over the

last three years of approximately $91m



Dividend payout of 51.0 cents per share, 61% franked

Strong revenue growth, good earnings growth

* The underlying result for FY2012 and FY2011 excludes the fair value gain on acquisition of associates of $7.6m and $65.7m respectively.

Half on half analysis

16

$m H1 FY2012 H2 FY2012 Total Growth% Group EBIT 248.3 282.0 530.3 14% EBIT margin 7.3% 7.1% 7.2% Group NPAT 151.9 193.7 345.6 28%

119.2 151.9 179.3 193.7

• 50.0

100.0 150.0 200.0 250.0 FY11 FY12

Half on half NPAT*

H1 H2 * The underlying result for FY2012 and FY2011 excludes the fair value gain on acquisition of associates of $7.6m and $65.7m respectively.

Change in net profit after tax FY2011 v FY2012

17

Good growth in Hydrocarbons, MM&C and I&E

* The underlying result for FY2012 and FY2011 excludes the fair value gain on acquisition of associates of $7.6m and $65.7m respectively.



Overall strong performance with record aggregated revenue



Australia West impacted by underperformance on a few projects that have now been finalised or provided for



Canadian construction business awarded a number of significant module construction and construction services contracts



Significant increase in activity in the USA, particularly upstream

Hydrocarbons

18

1 Regions in constant currency

Growth in USA and Canada

Power

19



Record aggregated revenue



Fall in earnings contrary to guidance



Resource sector in Australia provided growth



Increased activity in the European nuclear market



Latin America impacted by low margin procurement activity



USA contributes 35% of sector revenue and impacted by the continuing softness and competition in the USA market

1 Regions in constant currency

Impacted by low margin procurement and USA market

Minerals, Metals & Chemicals

20



Record aggregated revenue



28% EBIT growth year on year



Continuing to grow our relationships with major global companies



Strong commodity prices driving demand for services



Softness in the Australian market towards the end of the period

1 Regions in constant currency

Record revenue and EBIT

Infrastructure & Environment

21



Record aggregated revenue



Increased investment in resource projects is driving an increased demand for services



Major projects in the Middle East completed in FY2011



Pit to port projects executed with the Minerals, Metals & Chemicals sector providing growth

1 Regions in constant currency

Record revenue and EBIT

Cash flow

Strong cash flow

$m FY2008 FY2009 FY2010 FY2011* FY2012* EBIT 520 605 427 474 530 Depreciation and amortization 67 88 92 96 103 Interest and tax paid (137) (216) (186) (125) (152) Working capital / other (251) 69 (54) (151) (43) Net cash inflow from operating activities 199 546 280 294 438 Net cash outflow from investing activities (326) (133) (145) (106) (106) Net cash (outflow) / inflow from financing activities 101 (317) (175) (136) (252)

22

* The underlying result for FY2012 and FY2011 excludes the fair value gain on acquisition of associates of $7.6m and $65.7m respectively.

Gearing and key metrics

23

Key Metrics FY2009 FY2010 FY2011* FY2012* Gearing ratio 26% 26% 22% 20% Facility utilisation 54% 61% 53% 51% Average cost of debt 5.5% 5.2% 5.7% 5.7% Average maturity (years) 4.1 3.8 4.6 3.8 Interest cover * 14.1x 13.3x 12.0x 12.4x Net Debt/EBITDA * 0.8x 1.2x 0.9x 0.8x

* The underlying result for FY2012 and FY2011 excludes the fair value gain on acquisition of associates of $7.6m and $65.7m respectively.

Gearing reduced, strong metrics

► Liquidity available to support growth

Liquidity

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Liquidity Summary $m FY2009 FY2010 FY2011 FY2012 Loan & OD facilities 1,376 1,286 1,277 1,445 Less: facilities utilized* (745) (782) (680) (740) Available facilities 631 504 597 705 Plus: cash 178 141 171 247 Total liquidity 809 645 768 952 Bonding facilities 453 669 682 787 Bonding facility utilization 53% 50% 61% 66%

* Excludes capitalized borrowing costs



Gearing at 20%; retain significant financial capacity to support growth



Refinanced Syndicated bank debt facility tranche of US$150m to FY2015



Offered unsecured notes payable in the US private debt market July 2012

 We have introduced a microsite for

presentation of our FY2012 Annual Report

 The site provides the financial results

and documents in one place, making it easier for shareholders and potential investors to access our financial information

 Users can read the annual report

• nline, print the entire report or just

the sections that are of interest

 Online Q&A functionality is provided  Aiming to reduce our carbon footprint  Visit us after midday today at -

annualreport.worleyparsons.com

Financial reporting microsite

FY2012 results available online

25

Sector outlook 2012

John Grill

 Capital spend by international majors

increased in FY2012 over FY2011

 Unconventional oil and gas sectors

continue to expand in Australia, Canada, the USA and Middle East

Hydrocarbons

Demand in developed and developing world remains strong

 Increase in gas monetisation and

petrochemical projects in the USA as a result of lower natural gas prices

 High LNG prices in Asia creating

focus on natural gas activity within the region

 Demand in the developing world

remains strong in both Deliver and Improve service offerings

 Recovery of the downstream

markets in USA and Latin America

► Development of global and multi-

regional relationships with major oil and gas companies

► Underperforming projects impact on

margins

27

FY2012

• vs. FY2011

Aggregated revenue $5,015.1 m 24.0%

% of Group aggregated revenue

68.0%

• EBIT

$586.5 m 5.8% Margin 11.7% 2.0%

Hydrocarbons

28

Image courtesy of Woodside

Key project awards



SORESCO – Moin refinery expansion project, Costa Rica



PetroEcuador – Refineria del Pacifico refining and petrochemical complex project, Ecuador



ExxonMobil – Point Thomson initial production system, Alaska



ExxonMobil – Hebron topsides engineering, procurement and construction (EPC) services, Canada



TransCanada Pipelines – Hardisty Terminal A and B, Canada



Hess – Equus front end engineering design (FEED), Australia



Arrow Energy – Surat coal bed methane upstream development pre-FEED project, Australia



Chevron – Wheatstone LNG integrated project management team, Australia



Oman Oil Company – gas plant detailed design and procurement services, Oman



Tengizchevroil – wellhead pressure management, Kazakhstan



MEG Energy – Christina Lake module construction, Canada

Hydrocarbons

29

Key Improve awards and renewals



Esso Production Malaysia – engineering, procurement and construction management (EPCM) umbrella agreement (renewal), Malaysia



PT Chevron Pacific – overall program management, engineering and construction management services, Indonesia



Imperial Oil – Nanticoke refinery (renewal), Canada



TransCanada – project management, engineering, procurement, technical and field services, Canada



Shell – EPCM services for refining and chemical facilities, USA and Canada



Joint Operations (Kuwait Gulf Oil, Saudi Arabian Chevron Inc) – engineering, project and construction management services, Kuwait and Saudi Arabia

Hydrocarbons

30

Sector outlook

 Continued high level of spending in

• nshore unconventional markets

 Continued growth in global

greenfield upstream and downstream markets

 Ongoing growth of global Improve

markets

 Large number of Select

• pportunities on new field

developments

 Global customer relationships

underpin growth

 While the rate of revenue growth is

expected to diminish, with the completion of the small number of underperforming projects in FY2012 margins are expected to improve We expect improved earnings in the Hydrocarbons sector in FY2013

► Developing world – supporting our

customers with new generation and networks capacity

► Developed world – supporting our

customers in managing their existing facilities

Power

FY2012

• vs. FY2011

Aggregated revenue $581.3 m 13.2%

% of Group aggregated revenue

8.0% 1.0% EBIT $59.9 m 8.3% Margin 10.3% 2.4%

► Continued growth in the nuclear

Improve market

► Expanding opportunities in power for

resource projects in a number of regions

► Long term service agreements to

deliver a range of support services in the USA, Australia and Canada

► Retirement of old coal and transition to

gas fired power generation in the USA

► Margins impacted by continuing

softness and competition in the US market and low margin procurement activity in Brazil

31

Continued growth in the nuclear Improve market

Power

Key project awards

 Akkuyu NGS Elektrik Uretim Anonim

Sirketi – nuclear power plant, Turkey

 InterRAO UES – Baltic nuclear power

plant bankable feasibility study phase 2, Russia

 King Abdullah City for Atomic and

Renewable Energy – nuclear power plant siting services, Saudi Arabia

 Saudi Electricity Company – Power Plant

10 engineering and owner’s engineer support, Saudi Arabia

 LS Cable & System – power supply

upgrade, Qatar

 American Electric Power – air quality

study and upgrade, USA

 Odebrecht – Chaglla hydropower plant,

Peru

 Skanska – Baixada Fluminense power

plant, Brazil

 BHP Billiton – Yarnima gas fired power

station phase 1 & 2, Western Australia

 Tuas Power – Tembusu Stage 2A+2B,

Singapore

32

Power

Key Improve awards and renewals

 Kozloduy – stress tests for nuclear

power facilities, Bulgaria

 Bruce Power – sustaining projects,

Canada

 Ontario Power Generation –

Darlington nuclear refurbishment, Canada

 Arizona Public Services – Palo

Verde nuclear power plant task level planning, USA

 Pacific Gas & Electric – master

services agreement (MSA) power network services, USA

 Entergy – fossil fuel engineering

services, USA

 Verve Energy – Muja / Kwinana

maintenance alliance, Australia

33

Power

34

Sector outlook

 Developing markets continue to

provide opportunities in new build power generation projects

 Expect growth in nuclear Improve

market as a result continuing safety upgrades

 Further growth in resource power in

Latin America, Sub Saharan Africa and the Middle East

 Capitalise on momentum in the

Improve market in the USA, Canada and Australia

 Continue to broaden our integrated

service offerings to our customers including operating and maintaining assets

 TW Power Services to become a

leading operations, maintenance and support services provider We expect improved earnings in the Power sector in FY2013

Minerals, Metals & Chemicals

FY2012

• vs. FY2011

Aggregated revenue $895.4 m 39.1%

% of Group aggregated revenue

12.2% 1.3% EBIT $131.4 m 27.9% Margin 14.7% 1.3%

► Active in bulk commodities (iron ore,

coal, copper and fertilizers)

► Renamed the division to reflect our

increased focus on the global chemicals industry

► Experiencing an increase in major

project study work leading to major project opportunities

► Continuing focus on growth through

strategic acquisitions/partnerships

• Cegertec WorleyParsons joint

venture provides Eastern Canada capability and footprint

• ARA WorleyParsons acquisition

strongly aligned with Latin America growth strategy

35

► Continue to strengthen our

relationships with strategic customers

► Geographic expansion continues in

developed and developing worlds

► Secured several strategic long term

Improve contracts

Continue to strengthen our relationships with strategic customers

Minerals, Metals & Chemicals

Key project awards



Anglo American – Chagres smelter development, Chile



Areva – JEB mill upgrade, Canada



BASF – Acai / Nanjing super absorbent polymer projects, Brazil and China



BHP Billiton iron ore – EPCM master framework agreement, Australia



Black iron – Shymanivske iron ore project feasibility study, Ukraine



EBX Group – MMX Serra Azul iron ore EPCM, Brazil



First Quantum Minerals – Kansanshi copper smelter, Zambia



Mongolyn Alt (MAK) Group – Tsagaan Suvarga copper-molybdenum concentrator, Mongolia



Sasol – Shondoni coal mine, South Africa



WICET – Wiggins island coal export terminal stage 1 PMC, Australia



Xstrata – Askaf iron ore design feasibility study, Mauritania



Orica – Trident feasibility studies and design, Australia

36

Minerals, Metals & Chemicals

Key Improve awards and renewals

 BASF – North American engineering

partner contract, USA and Canada

 BHP Billiton iron ore – sustaining

capital, Australia

 BHP Billiton Mitsubishi Alliance –

coal sustaining capital, Australia

 Fortescue Metals Group – iron ore

sustaining capital services, Australia

 Rio Tinto Alcan – Weipa bauxite

mine engineering services, Australia

37

Minerals, Metals & Chemicals

38

Sector outlook

 Current market uncertainty resulting

in near term caution

 Uncertainty resulting in project

delays and review of capital programs, particularly in Australia

 Medium to long term outlook

remains strong

 Continue to focus on building long

term relationships with strategic customers to further globalize the business, particularly in the developing world

 Production growth in bulk

commodities and chemicals is expected to continue

 Pit to port opportunities remain a

key focus in developing countries We expect improved earnings in the Minerals, Metals & Chemicals sector in FY2013

FY2012

• vs. FY2011

Aggregated revenue $870.8 m 24.0%

% of Group aggregated revenue

11.8%

• EBIT

$115.3 m 14.2% Margin 13.2% 1.2%

 Leveraged our Australian resource

infrastructure capability into Latin America and Africa

 Won major pit to port projects in Latin

America and Sub Saharan Africa and well positioned for delivery and Improve pull through

Infrastructure & Environment

 Further developed the restoration

sector and secured several global restoration framework agreements with global customers

 Redirected urban water sector to the

resource sector

 Extended capability across the globe

creating global centres of excellence in water, environment, ports and transport

 Continuing to service unconventional

• il and gas global strategic customers

with an integrated environment and water service offering

39

Leveraged our Australian resource infrastructure capability into Latin America and Africa

Infrastructure & Environment

Key project awards

 MPX – Guajira coal port and rail

infrastructure, Colombia

 Norte Energia – Belo Monte

hydroelectric plant environment and social compliance, Brazil

 Queensland Curtis LNG – water

treatment environment and social licence, Australia

 Anglo American – Peace River coal

water treatment, Canada

 Qatar Government – Doha Port

development, Qatar

 Huta Marine Works – King Abdullah

Port project, Saudi Arabia

40

Infrastructure & Environment

Key Select and Improve awards and renewals

 Port of Los Angeles/Long Beach –

restoration services framework agreement, USA

 BP – remediation management North

American framework agreement, USA

 ExxonMobil – Port Stanvac refinery

program management contract for decommissioning services, Australia

 Woodside – Browse downstream

geotechnical investigations, Australia

 Rio Tinto – MSA, risk advisory and

catastrophic event management, Americas

 Chevron – environment services

panel contract, Australia

 National Grid Property Holdings –

remediation contract, United Kingdom

41

42

Infrastructure & Environment

Sector outlook

 Increasing engagement with global

customers

 Demand for resource infrastructure

continues to grow in Australia, Sub Saharan Africa and Latin America

 Strong demand for remediation,

decommissioning, response and recovery services

 New unconventional oil and gas

discoveries and developments are driving growth in environment and water services

 Ability to manage social and

environment licenses continues to be a key driver in project development We expect improved earnings in the Infrastructure & Environment sector in FY2013

Summary

43

► Delivered good underlying earnings

growth despite the volatile and challenging market conditions

► Growth continues in the unconventional

• il and gas market

► Global customer agreements,

significant new major and new Improve relationships provide solid platform for the future

► Continue to focus on building capability

in the developing world

► Well positioned to meet the growing

demands of our customers and the market

► Benefits of the local/global

• rganisational restructure starting to be

seen

Commenting on the outlook for the WorleyParsons Group, Mr John Grill said: “Subject to the markets for our services remaining strong, we expect to achieve good growth in FY2013 compared to FY2012 underlying earnings. “We have a clear growth strategy in place focused on improving margins and developing our skill set and geographic footprint across our four customer

• sectors. This will be achieved through organic growth as well as by taking

advantage of acquisition opportunities that provide value for shareholders. “We are confident that our medium term and long term prospects remain positive based on our competitive position, our diversified operations and strong financial capacity.”

Group outlook

August 2012 44

Full year results 2012

EDS – Engineering and Design Services E&P – Engineering and Procurement EPC – Engineering, Procurement and Construction EPCM – Engineering, Procurement and Construction Management ESA – Engineering Services Agreement ESP – Engineering Services Provider FEED – Front End Engineering Design FEL – Front End Loading GSA – General Services Agreement MSA – Master Service Agreement OE – Owners Engineer O&M – Operations and Maintenance PCM – Procurement and Construction Management PMC – Project Management Consultancy SAGD – Steam Assisted Gravity Drainage

Contractual acronyms

46

Segment margins

47 FY2012

Hydrocarbons Power Minerals, Metals & Chemicals Infrastructure & Environment TOTAL Sales to external customers 4,728.7 524.1 892.5 840.3 6,985.6 Procurement services revenue at margin 285.8 55.2 1.2 30.5 372.7 Other Income 0.6 2.0 1.7 0.0 4.3 Total 5,015.1 581.3 895.4 870.8 7,362.6 Segment result 586.5 59.9 131.4 115.3 893.1 Segment margin 11.7% 10.3% 14.7% 13.2% 12.1%

FY2011*

Hydrocarbons Power Minerals, Metals & Chemicals Infrastructure & Environment TOTAL Sales to external customers 3,784.1 483.3 606.2 679.5 5,553.1 Procurement services revenue at margin 258.3 27.8 37.0 21.0 344.1 Other Income 1.5 2.6 0.6 1.6 6.3 Total 4,043.9 513.7 643.8 702.1 5,903.5 Segment result 554.3 65.3 102.7 101.0 823.3 Segment margin 13.7% 12.7% 16.0% 14.4% 13.9%

H1 FY2012

Hydrocarbons Power Minerals, Metals & Chemicals Infrastructure & Environment TOTAL Sales to external customers 2,192.9 233.4 399.6 378.1 3,204.0 Procurement services revenue at margin 151.4 24.9 0.3 15.3 191.9 Other Income 0.6 1.5 0.1 0.9 3.1 Total 2,344.9 259.8 400.0 394.3 3,399.0 Segment result 263.0 27.2 65.7 54.1 410.0 Segment margin 11.2% 10.5% 16.4% 13.7% 12.1%

* Restated segment results taking into consideration the change in allocation of global overhead costs

FX translation impact

48

Movement in Major Currencies

Currency Annualized AUD $m NPAT translation impact of 1c ∆ AUD:USD 0.7 AUD:GBP 0.6 AUD:CAD 0.3 Currency FY11 FY12 FY∆ AUD:USD 98.8 103.5 4.7 AUD:GBP 62.1 65.1 3.0 AUD:CAD 98.8 103.2 4.4

85.0 90.0 95.0 100.0 105.0

Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12

USD GBP CAD

• 20

29

• 41
• 32
• 18
• 50
• 40
• 30
• 20
• 10

10 20 30 FY08 FY09 FY10 FY11 FY12 A$m

Group EBIT FX Impact Since FY2008

Dividends, amortisation and tax

Dividend History FY08 FY09 FY10 FY11 FY12 Interim dividend (cps)

38.0 38.0 35.5 36.0 40.0

Franked

30% 76% 100% 100% 79%

$m total

91.9 92.2 87.0 88.6 98.3

Final dividend (cps)

47.5 55.0 40.0 50.0 51.0

Franked %

71% 100% 47% 26% 61%

$m total

114.8 133.5 98.0 122.8 125.3

Total cps

85.5 93.0 75.5 86.0 91.0

Total $m

206.7 225.7 185.0 211.4 223.6

% NPAT

60.1% 57.8% 63.6% 70.8% 64.7%



Based on asset values as at 30 June 2012



FY2013 peak is due to acquired intangibles being fully amortised and also the amortisation profile of the global business system

22.0% 27.0% 32.0% FY08 FY09 FY10 FY11 FY12

Effective tax rate

Statutory earnings Underlying earnings Underlying earnings excluding associates