For personal use only - ASX · 2013. 2. 12. · Company Limited – site . Improve. engineering...
Transcript of For personal use only - ASX · 2013. 2. 12. · Company Limited – site . Improve. engineering...
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
Overview
2 * versus previous corresponding period
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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%
Financial highlights
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.
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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
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Increased market volatility primarily driven by fluctuating commodity prices and escalating project costs
South Africa impacted by decline in market conditions
Low cost of natural gas in the US continues to drive downstream developments
Snapshot Growth in unconventional oil and gas
developments Aging assets and greater regulatory
requirements driving increased demand for Improve
Major customers seeking common global delivery platforms
Recovery of the US power market has not yet eventuated
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Diversified operations enabled growth in volatile markets
Canada, and in particular WorleyParsonsCord, contributed to growth in Hydrocarbons
Strong performance from the Chinese and Brazilian businesses
Material growth in the chemicals sector
Snapshot Increased project awards from tier
2 customers Local global model implemented
with outcome of customer focus and delivery efficiency
Infrastructure & Environment operations in the US and South Africa restructured due to reduced activity
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Local delivery, global support
40,400 people 165 offices 41 countries
2.9 million workshare hours (HY2012: 2.1 million)
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Significant awards for HY2013
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61 significant and long term contracts / projects
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► 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 contracts
Improve services continue to diversify 9
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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%
EBIT Margin 9.7% 8.2% 6.6% 7.3% 6.5% (0.8%)
Net profit
198
138
119
152
155 2%
Net profit margin 6.1% 5.4% 4.1% 4.5% 4.0% (0.5%)
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%
11 First half earnings in line with guidance
* The underlying result for HY11 includes the fair value gain on acquisition of associates of $9.4m
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Financial profile
Robust aggregated revenue growth
* The underlying result for FY11 and FY12 excludes the fair value gain on acquisition of associates of $65.7m and $7.6m respectively
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
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Margin profile
Hydrocarbons professional services margin has increased
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
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Strong performance and growth in Canada
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
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Diversification outside of the US
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
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Earnings growth through geographical & sector diversification
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
Minerals, Metals & Chemicals
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Impacted by reduced government spending
Infrastructure & Environment
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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
* Regions in constant currency
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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
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Gearing and key metrics
Strong balance sheet metrics 19
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
* The underlying result for FY11 and FY12 excludes the fair value gain on acquisition of associates of $65.7m and $7.6m respectively ** Rolling 12 month calculation
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Liquidity
► Financial capacity to support growth with gearing at 20%
► US$ 300m of unsecured note payable issued in the US Private Placement market September 2012 maturing in 5 to 10 years with fixed annual coupon
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%
*Excludes capitalized borrowing costs 20
Well positioned to support growth
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Hydrocarbons
North American gas renaissance spurring increased levels of activity
High level of unconventional oil and gas development activity
Remain well positioned in oil sands market in Canada
Significant growth in our fabrication and construction business, WorleyParsonsCord
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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%
Low cost of natural gas in US driving downstream developments
Continue to secure global services contracts
Increased activity in Improve
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Hydrocarbons
23 Modular transit, Alaska
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
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Hydrocarbons
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Key Improve awards and renewals CNOOC and Shell Petrochemicals
Company Limited – site Improve engineering service contract, China
Canadian Natural Resources Limited – engineering services, Canada
Inpex – integrity and maintenance contract, Australia
Talisman – engineering and project delivery alliance, US
Husky – engineering and procurement for midstream operations, Canada
Suncor – sustaining capital projects for upstream and downstream facilities, Canada
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Hydrocarbons
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Sector outlook International majors have
announced increased capital expenditure commitments for CY2013
Favourable economics driving gas utilization and oil production projects in the US
High number of greenfield and brownfield opportunities
Improve market growth as a result of aging assets and increased regulatory requirements
We continue to expect improved earnings in the Hydrocarbons sector in FY2013
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Power HY13 vs. HY12
Aggregated revenue $303 m 16.5%
% of Group aggregated revenue 8%
EBIT $31 m* 11.7%
Margin 10.3% 0.5%
► Continued uncertainty in North America
► Focus on developing long term Improve relationships
► Nuclear performance impacted by termination of large government funded project in Europe
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► Key resource related power projects have not been impacted by mining investment slowdown
► TWPS provides a strong platform for growth in the Australasian operations and maintenance market
* Includes $10.7m from sale of contracts into TWPS
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TVA, Lagoon Creek
Power
Key project awards Polska Grupa Energetyczna – site
characterisation and licensing / permitting services for the nuclear power plan development program, Poland
Tennessee Valley Authority (TVA) – plant outage and support at various fossil plants, US
Akkuyu NGS Elektrik Üretim Anonim Şirketi – consultancy services for the Akkuyu nuclear power plant, Turkey
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Power
Key Improve awards and renewals Bruce Power – sustaining capital
projects at nuclear facilities, Canada US Government, Department of
Energy, National Nuclear Security Administration – technical engineering and programmatic support, US
Kozloduy Nuclear Power Plant – assessment process to review the operational safety of the power plant, Bulgaria
Calpine – sustaining capital projects, US
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Sector outlook Medium to long term outlook
remains strong outside of US Expect growth to continue in fossil
Improve business in the US, Canada and Australia
New build opportunities in Latin America, South East Asia, Sub Saharan Africa and the Middle East
Focus on nuclear new build in emerging markets
Safety upgrades continue to drive demand for nuclear Improve
Continue to strengthen our relationships with strategic customers
We continue to expect improved earnings in the Power sector in FY2013
Power F
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Minerals, Metals & Chemicals
HY13 vs. HY12
Aggregated revenue $484 m 21.0%
% of Group aggregated revenue 12%
EBIT $70 m 5.1%
Margin 14.5% 2.3%
► Diversified operations have delivered continued growth in the developing world
► Significant chemicals growth in China, the US and LAM
30 Global chemicals market continues to provide growth opportunities
► Volatility in iron ore prices has impacted activity
► Softening in coal market, particularly in high cost countries
► Studies leading to major projects
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Minerals, Metals & Chemicals
Pilbara Iron Ore and Infrastructure, Australia West
Key project awards AngloGold Ashanti – Gramalote gold
project, Colombia Pacific Aluminium – Katherine to
Gove gas project, Australia Elwady Company – phosphoric
fertilizers pre-feasibility study, Egypt Votorantim Metais – Rondon
alumina project FEL3, Brazil Nyrstar – Port Pirie transformation
pre-feasibility study, Australia Ressources d’Arianne – feasibility
study for the Lac à Paul phosphorus mining project, Canada
Dynasol – SSBR EPCM, China Potash Corporation of
Saskatchewan – underground expansion construction management, Canada
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Minerals, Metals & Chemicals
OneSteel WorleyParsons Alliance, Australia East
Key Improve awards and renewals Minera Escondida (BHPB) –
Escondida Improve contract, Chile Tasnee – waste heat boiler solution,
Saudi Arabia Xstrata Nickel – MSA, Canada Stepan Company – chemicals plant
sustaining capital EPCM, US
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Minerals, Metals & Chemicals
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Sector outlook Improving near term outlook for iron
ore and metallurgical coal Medium to long term outlook
remains strong Customers’ capital programs
focused on productivity improvements
New developments are increasingly in developing countries
Strong focus on Improve opportunities in developed markets
Outlook for chemicals remains strong, particularly in the US and China
Completion of TWP acquisition will provide growth opportunities in Africa and underground mining
We continue to expect improved earnings in the Minerals, Metals & Chemicals sector in FY2013
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HY13 vs. HY12
Aggregated revenue $420 m 6.4%
% of Group aggregated revenue 11%
EBIT $45 m 18.4%
Margin 10.8% 3.3%
Infrastructure & Environment
► Hydrocarbons customers seeking to procure enabling front end environmental services on global basis
► Growth in unconventional gas increasing infrastructure opportunities
► Continued growth in the demand for restoration services
34 Integrated enabling capabilities that differentiate our business
► Regulation changes in Brazil have opened opportunities in the port sector
► Resource related rail activity trending towards safety and productivity
► Increased competition for water resources is increasing demand for our services
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Infrastructure & Environment
Jump Creek Dam, Canada
Key project awards Alderon Mining – rail and terminal
expansion pre-feasibility, Canada Consórcio Complexo Tapajós –
environmental impact assessment for Sao Luiz do Tapajos dam, Brazil
Caltex – Kurnell port and berthing project, Australia
Ecopetrol – Refineria del Pacifico port and marine Pre-FEED, Ecuador
Wafra Joint Operations – integrated master plan, Kuwait
Rio Tinto – Koodaiderie hydrology studies, Australia
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Infrastructure & Environment Key Improve awards and
renewals Enbridge – remediation program,
Canada BP – oil spill response planning
framework contract, US and Canada BP – lighthouse restoration MSA,
Global Woodside Petroleum –
environmental services panel contract, Australia
Chevron – environmental services panel contract, Australia
Tullow Oil – global framework agreement for environmental and social impact assessments, Global
Water Corporation – infrastructure design branch panel contract, Australia
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Infrastructure & Environment Sector outlook
Growth in unconventional oil and gas driving demand for environment and water services
Demand for resource infrastructure continues to grow in Sub Saharan Africa and Latin America
Increased demand for remediation, decommissioning, risk planning, response and recovery services across oil and gas and mining markets
Management of social and environment licenses continues to be a key success factor in project development
We expect earnings in the Infrastructure & Environment sector in FY2013 to be in line with FY2012
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Summary
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► Robust aggregated revenue growth across the sector groups despite the volatile markets
► Fluctuating commodity prices and escalating project costs impacted the market for our services
► Diversified operations enabled us to take advantage of opportunities for growth
► Expansion in key growth markets of China and Brazil continues
► Demand for our Improve offering remained strong
► Strong performance and growth in Canada with increasing contribution from WorleyParsonsCord
► Strong balance sheet provides a sound platform for strategic acquisitions
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Commenting on the outlook for the WorleyParsons Group, Mr Andrew Wood said: “Volatility in commodity prices impacted the market for our services and our growth in the first half. The markets for our services improved towards the end of the period and we continue to expect growth for FY2013 on FY2012 underlying earnings*. “This positive outlook is subject to sustained business confidence and commodity prices remaining reasonably strong. “The Group continues to evaluate opportunities for new business growth that will add to its existing capabilities and provide value for our shareholders. “The Group is confident that its medium term and long term prospects remain positive based on its competitive position, its diversified operations and strong financial capacity.”
Group outlook
February 2013
39 * Underlying earnings excludes the fair value gains on acquisitions of associates
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