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
Andrew Wood
► 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
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► Underlying NPAT 1 of $100.7m, down 35%2 ► Aggregated revenue3 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
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1 The underlying result for HY14 excludes the net fair value gain on acquisition of associates of $11.4m 2 Versus previous corresponding period 3 Refer to slide 31 in the Supplementary slides for the definition of Aggregated Revenue
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Performance remains good
► Total Recordable Case
Frequency Rate (TRCFR) for HY14 was 0.12 (FY13: 0.13)
We continue a number of programs across the Group including:
Board and Executive
Committee structured HSE site visit program
Road safety program Optimising our approach to
safety in construction and contractor management
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Hydrocarbons awards
and Gas Global Enterprise Framework Agreement, global
contract for supply of program management services, Kuwait Minerals, Metals & Chemicals awards
hexamethylene diamine (HMD) project in the Shanghai Chemical Industrial Park in China, China
study for Dominga project, Chile Infrastructure awards
and O&M services, US
services to execute Metro Development Strategy for Arriyadh (MEDSTAR), Saudi Arabia
WorleyParsons’ performance continues to be underpinned by our growing long term contract base
19 New Improve contracts awarded More than 290 Improve contracts globally 16 global/multi-region contracts
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7
people
countries
workshare hours
Simon Holt
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HY14 HY13
Aggregated revenue1 ($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
Strong operating cash flow
Professional services down, construction revenue grows
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$m HY14 HY13
Aggregated revenue 3,793 3,879 (2)%
Professional services 3,167 3,267 (3)% Construction and fabrication 482 444 9% Procurement revenue at margin 139 154 (10)% Other income 4 14 (68)%
11 962 322 613 444 290 206 297 100 644 688 257 767 317 513 163 329 204 557
HY2013 ($m) HY2014 ($m)
25% 18% 8% 7% 7% 14% 5% 4% 8% 9% 3% 5% 17% 15%
% of total aggregated revenue
16% 20% 8% 11%
► Top 10 customers deliver 34% of the gross margin ► Top 10 projects deliver 15% of the gross margin ► Top 10 locations deliver 65% of the operating EBIT
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13 151 51 59 51 41 9 31
58 87 47 68 5 61 1 25 12 66
HY2013 ($m) HY2014 ($m) % EBIT margin
15.7% 12.7% 15.8% 18.4% 9.7% 8.9% 11.5% 1.7% 14.2% 11.9% 4.3% 0.6% 10.6% 7.7% (3.3)% 5.7% 9.0% 11.9%
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258 51 77 62 448 251 16 69 37 373 Hydrocarbons (ex construction & fabrication) Construction & fabrication Minerals, Metals & Chemicals Infrastructure Total HY2013 ($m) HY2014 ($m)
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155.1 100.7 (48.5) (46.2) (13.6) (6.2) 2.4 12.4 28.4 4.1 12.8
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448.1 373.0 (29.3) (35.2) (11.2) (27.7) 28.3
HY13 Hydrocarbons (excl. construction & fabrication) Construction & fabrication Minerals, Metals & Chemicals Infrastructure FX impact HY14
17 8.2% 6.6% 7.3% 6.5% 4.7% 9.0% 9.4% 7.1% 7.3% 8.6% 8.0% 7.2% 6.9% FY10 FY11 FY12 FY13 FY14
EBIT %
► EBIT margin drop of 1.8% ► Primarily due to Australia, Cord,
restructuring costs and one off TWPS benefit from prior year
► Hydrocarbons margins flat
excluding the impact of construction and fabrication
► Construction and fabrication
margin impacted by Cord
11.2% 11.2% 11.5% 3.4% 13.2% 12.1% 11.4% 7.5% 14.0% 4.3% 12.9% 9.2%
EBIT margin by CSG %
Construction & fabrication Minerals, Metals & Chemicals Infrastructure
12.6% 8.1% 13.0% 10.4%
Hydrocarbons (ex construction & fabrication)
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HY14 HY13
Aggregated revenue $m 2,731.1 2,750.0 Professional services $m 2,151.0 2,181.3 Construction and fabrication $m 482.3 444.4 Procurement revenue with margin $m 96.8 123.3 Segment result $m 267.0 309.0 Segment margin % 9.8% 11.2%
► Revenue flat ► Segment margin down 1.4 %
► EBIT flat net of impact of Cord ► Rosenberg WorleyParsons
increased Europe EBIT
309.0 267.0 (14.7) (8.7) (8.4) (46.4) (0.9) (7.2) (0.1) 19.6 2.3 22.5
HY13 ANZ ASCH CAN (excl. Cord) Cord EUR LAM MENAI SSA USAC FX impact HY14
Operational EBIT by sector HY14 vs HY13 $m
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HY14 HY13
Aggregated revenue $m 571.1 583.2 Professional services $m 556.4 580.4 Procurement revenue with margin $m 14.6 2.7 Segment result $m 69.2 76.8 Segment margin % 12.1% 13.2%
► Downturn in ANZ due to project
cancellations and completions
► SSA EBIT growth driven by
TWP acquisition
► Canada EBIT growth driven by
Iron Ore and Fertilizers
► Weakness in demand in LAM 76.8 69.2 (24.5) (1.4) (5.9) (2.2) 2.5 9.5 9.9 0.9 3.6
HY13 ANZ ASCH CAN EUR LAM MENAI SSA USAC FX impact HY14
Operational EBIT by sector HY14 vs HY13 $m
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HY14 HY13
Aggregated revenue $m 490.4 545.5 Professional services $m 459.6 505.3 Procurement revenue with margin $m 27.5 27.7 Other income $m 3.3 12.5 Segment result $m 36.8 62.3 Segment margin % 7.5% 11.4%
► General decline in ANZ ► $10.7M TWPS one off in HY13 ► Downturn in Bulgaria Nuclear
project
► CAN private sector demand
increasing
62.3 36.8 (25.2) (3.1) (4.5) (1.3) (0.2) 3.7 0.4 2.5 2.2
HY13 ANZ ASCH CAN EUR LAM MENAI SSA USAC FX impact HY14
Operational EBIT by sector HY14 vs HY13 $m
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$m
HY14 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
Strong cash flow generation
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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 cover1 (times) 8.6x 10.6x Net debt $m 741 742 Net Debt/EBITDA1 (times) 1.3x 1.2x
1 Rolling 12 month calculation
Gearing at lower end of target range
Financial capacity to support growth
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Liquidity summary $m HY14 FY13
Loan & OD facilities 2,069 1,912 8% Less: facilities utilized (1,116) (1,062) 5% Available facilities 953 850 12% Plus: cash 375 320 17% Total liquidity 1,328 1,170 14% Bonding facilities 940 862 9% Bonding facility utilization 69% 71% (2%) 200 400 600 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23
Debt facility utilization profile $m
Utilized Not utilized ► US$520m US Bank
Syndication refinance completed during the period
► Increase in average
maturity from 3.8 years as at 30 June 2013 to 4.2 years
Andrew Wood
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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
Ma’aden First Ore Feed to Mill 26
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
capital work
Chemicals expenditure
increasing in US
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Infrastructure
Merged Infrastructure &
Environment and Power sectors
► Cancellation of a nuclear
project in Bulgaria
► Positive outlook in North
America for Unconventional Oil & Gas related infrastructure
► Resource related
developments in Western Canada and East Africa
► New build opportunities in
emerging markets for power generation
► First half earnings in line with guidance ► Improved earnings anticipated in second half to deliver
full year
► Overhead reduction program implemented ► Business performance solid in most regions ► Balance sheet fundamentals remain strong ► In-depth review of business underway
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Commenting on the outlook for the WorleyParsons Group, Mr Andrew Wood said: “On current indications the Company expects to report underlying NPAT for FY2014 in line with guidance given in November 2013. Notwithstanding the impacts weaker than expected market conditions are having on our performance, the cost reduction program we implemented together with the momentum from recent contract awards should position us for medium term growth. The diversity of our business in terms of its geography, industry and service offering remains a fundamental strength.”
Confirming guidance for FY14
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Half year results 2014
Aggregated revenue*
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$m HY14 HY13
Revenue and other income 4,822.9 4,413.4 Procurement services at nil margin (1,306.4) (814.4) Share of revenue from associates 289.5 283.9 Net gain on revaluation of investments (11.4)
(2.0) (4.2) Aggregated revenue* 3,792.6 3,878.7
*Aggregated revenue is defined as statutory revenue and other income plus share of revenue from associates, less procurement revenue at nil margin, interest income and net gain on revaluation of investments previously accounted for as equity accounted associates. The Directors of WorleyParsons Limited believe the disclosure of the share of revenue from associates provides additional information in relation to the financial performance of WorleyParsons Limited Group.
Underlying* EBIT and NPAT
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$m HY14 HY13
EBIT 189.6 251.9 Net gain on revaluation of investments previously accounted for as equity accounted associates (11.4)
178.2 251.9 NPAT 119.8 165.9 Non-controlling interests (7.7) (10.8) Net gain on revaluation of investments previously accounted for as equity accounted associates (11.4)
100.7 155.1
* The underlying result for HY14 excludes the net fair value gain on acquisition of associates of $11.4m
Interim dividend of 34.0 cents per share (HY13: 41.5 cps)
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FY10 FY11 FY12 FY13 HY14
Interim dividend (cps) 35.5 36.0 40.0 41.5 34.0 Franked % 100% 100% 79% 100% 25% $m total 87.0 88.6 98.3 102.4 83.8 Final dividend (cps) 40.0 50.0 51.0 51.0 Franked % 47% 26% 61% 0% $m total 98.0 122.8 125.3 125.7 Total (cps) 75.5 86.0 91.0 92.5 $m total 185.0 211.4 223.6 228.1 Payout ratio % 63.6% 70.8% 64.7% 70.8% 83.2%
34 Currency Annualized AUD $m NPAT translation impact of 1c ∆ AUD:USD 0.3 AUD:GBP 0.4 AUD:CAD 0.2 Currency HY14 FY13 HY∆ AUD:USD 92.3 102.7
AUD:GBP 58.3 65.5
AUD:CAD 96.3 103.1
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10 20 30 FY10 FY11 FY12 FY13 HY14 A$m
Group EBIT FX impact since FY10
80.0 85.0 90.0 95.0 100.0 105.0 110.0
Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13
Movement in major currencies
USD GBP CAD
Key project awards
VNIPIgazdobycha - engineering
contractor for Vladivostok LNG, Russia
MacKay Operating Corporation -
EPC for MacKay River commercial project field facility phase 1, Canada
Sasol - IPMT for integrated GTL and
ethane cracker complex, US
BP - Select engineering services for
Sullom Voe gas sweetening project and ESP pipeline project, UK
GE Oil & Gas - supply of subsea
templates for carbon dioxide injection project, Norway
Improve Awards
► Kuwait Oil Company - program
management contract, Kuwait
► EP PetroEcuador - inspection and
management of Esmeraldas refinery rehabilitation project, Ecuador
► Oil Search - Master Services
Agreement 2 year extension, PNG
► Shell Refining Australia - project
management and engineering services for Geelong Refinery, Australia
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Key project awards
Andes Iron SpA - feasibility
study for Dominga project, Chile
Invista - EPCM services for
hexamethylene diamine (HMD) project in the Shanghai Chemical Industrial Park in China, China
Morobe Mining JV - owner’s
engineer for Wafi-Golpu pre- feasibility study, PNG
Improve Awards
► Codelco - asset management
services, Chile
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Key project awards
Corredor Do Desenvolvimento
Do Norte S.A. - project management and engineering services for Nacala rail corridor project, Mozambique
National Grid Property Holdings
regeneration of former gas works, UK
Arriyadh Development Authority
execute Metro Development Strategy for Arriyadh (MEDSTAR), Saudi Arabia
Improve Awards
► Consumers Energy - Karn units
1 and 2 O&M services, US
► Tennessee Valley Authority -
installation of 3MW Diesel Generator at Sequoyah and Browns Ferry, US
► HOLTEC - installation of dry
cask used fuel storage system, US
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CY – Calendar year 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 GTL – Gas to Liquids I&E – Infrastructure & Environment IPMT – Integrated Project Management Team LNG – Liquefied Natural Gas MM&C – Minerals, Metals & Chemicals MSA – Master Service Agreement O&M – Operations and Maintenance PCM – Procurement and Construction Management PMC – Project Management Consultancy
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