Worley Limited · ASX:WOR
Worley — WorleyParsons — FY2011 Earnings Presentation
45 slides from Worley's earnings presentation, August 2011
Slide 1: Full Year Results 2011
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Slide 2: Overview
Overview Good result in FY2011 made up of underlying performance in accordance with guidance and fair value gains on acquisitions of associates ● Strong underlying second half result (NPAT up 50% half on half) ● Well positioned for good growth in FY2012 ● 68 significant new major projects and long
Slide 3: Financial Highlights
Financial Highlights * The Underlying Results for FY2011 excludes the fair value gains on acquisitions of $65.7M 3
Slide 4: Snapshot
Snapshot Experiencing recovery in all locations and sectors particularly evident in second half Currency movements and market uncertainties still exist Withstood Middle East instability and natural disasters in the second half Pleasing wins in a recovering Canadian oil sands market Growth
Slide 5: Snapshot
Snapshot Continued expansion of operations in the developing world ● Kwezi V3 Engineers acquisition in South Africa ● Increased share in Saudi Arabia to 75% ● Increased share in China to approximately 80% Secured 37 long-term Improve contracts in 9 countries ● Increased demand in all sectors ● S
Slide 6: Global Reach, Local Operations
Global Reach, Local Operations 3.4 million workshare hours completed 35,100 people 143 offices 43 countries 6
Slide 7: Growing Engagement with Developing World
Growing Engagement with Developing World Significant footprint in: ● China, Latin America, Former Soviet Union, Africa, Asia, Middle East New country entries ● Mongolia, Ghana, Namibia, Peru, Columbia Acquired 100% of South African based KV3 ● Now have about 2,000 staff across Africa Acquire
Slide 8: Significant New Awards in FY
WorleyParsons Significant New Awards in FY 11 resources & energy 1G ie | > 1 Minerals & Metals long term . ; ‘ contracts / projects 8 Infrastructure & Environment long term contracts / projects 3 Hydrocarbons long term contracts / projects 68 long term contracts / projects 8 EcoNomics
Slide 9: Long Term Contracts
Long Term Contracts WorleyParsons’ performance continues to be underpinned by our extensive long- term contract base ● Seven new global / multi-site agreements ● Total of 37 new Improve contracts awarded ● 20 contracts renewed ● 230 Improve contracts serviced on this basis Our selection was base
Slide 10: Organisational Structure
Organisational Structure Announced new management structure in March 2011 Outstanding location-based delivery with effective group wide support 10
Slide 11: Safety Performance
Safety Performance Our safety performance continues to improve Areas of focus ● Road safety ● Field and construction HSE activities ● Broader emphasis and engagement in Zero Harm message across the business Highlights ● WorleyParsons Europe awarded the Royal Society for the Prevention of Accid
Slide 12: Financial Results
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Slide 13: Financial Profile
Financial Profile $m FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 1 vs. FY2010 Aggregated Revenue 3,525 4,882 6,219 4,967 5,904 19% EBIT 319 520 605 427 474 11% EBIT Margin 9.0% 10.7% 9.7% 8.6% 8.0% (0.6%) Net profit 224.8 343.9 390.5 291.1 298.5 2.5% Net profit margin 6.4% 7.0% 6.3% 5.9% 5.1% (0.8%) 5 Y
Slide 14: 5 Year Financial Profile
5 Year Financial Profile Net profit $m Aggregated Revenue $m 390.5 6,219.4 343.9 5,903.5 291.1 298.5 4,882.4 4,967.1 224.8 3,525.4 197.5 3,256.1 2,916.4 2,548.1 152.7 138.0 2,354.1 119.2 1,455.8 94.5 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 Effective tax rate of 23.3% - Earnings mix EBIT
Slide 15: Half on Half analysis
Half on Half analysis $M FY 2011 1st Half 2nd Half Total Growth % Group EBIT 193 281 474 46% EBIT Margin 6.6 9.4 8.0 Group NPAT 119 180 299 50% Half on Half NPAT 200 180 153 138 150 119 $M 100 50 0 2010 2011 1st Half 2nd Half 15
Slide 16: Change in Net Profit after Tax FY 2011 v FY 2010
Change in Net Profit after Tax FY 2011 v FY 2010 19.2 (8.7) (10.3) 9.2 (3.4) (29.5) 65.7 70.8 (8.3) (31.5) $m 291.1 298.5 364.2 FY10 NPAT Hydrocarbons Power Minerals & Metals Infrastructure & Corporate Net Interest Income Tax Minority Interest FX Impact FY11 NPAT Fair Value Gains FY11 NPAT Environme
Slide 17: Hydrocarbons
Hydrocarbons Aggregated Revenue $m FY11 Aggregated Revenue % by Region 4,740.1 USLAC 4,020.1 19% AME 20% 3,604.8 3,425.4 2,579.1 2,373.7 1,869.1 1,950.3 1,760.3 1,026.0 E&A 18% ANZ 17% 2007 2008 2009 2010 2011 Revenue % of Group 74% 73% 76% 70% 68% Canada EBIT Margin 9% 11% 11% 11% 10% 26% Overall
Slide 18: Power
Power FY11 Aggregated Revenue % by Region Aggregated Revenue $m AME 8% 546.3 537.5 509.4 465.9 437.4 ANZ 21% 289.3 303.3 247.3 USLAC 45% 217.7 188.1 Canada 7% 2007 2008 2009 2010 2011 E&A 19% Revenue % of Group 12% 10% 9% 10% 9% EBIT Margin 13% 13% 12% 8% 8% Power EBIT Movement by Region FY11 vs FY1
Slide 19: Minerals & Metals
Minerals & Metals FY11 Aggregated Revenue % by Region Aggregated Revenue $m USLAC 643.8 12% 583.0 562.5 AME 22% E&A 3% 469.3 371.8 Canada 9% 318.1 291.4 239.8 214.1 129.3 2007 2008 2009 2010 2011 Revenue % of Group 8% 10% 9% 11% 11% ANZ 54% EBIT Margin 15% 17% 14% 14% 11% Minerals & Metals EBIT Move
Slide 20: Infrastructure & Environment
Infrastructure & Environment FY11 Aggregated Revenue % by Region Aggregated Revenue $m 702.1 USLAC 10% AME 15% 469.8 E&A 12% 342.4 350.0 344.7 214.9 221.3 191.9 162.0 112.4 Canada 16% ANZ 47% 2007 2008 2009 2010 2011 Revenue % of Group 6% 7% 6% 9% 12% EBIT Margin 9% 12% 9% 10% 9% Infrastructure & En
Slide 21: Cash Flow
Cash Flow $m FY07 FY08 FY09 FY10 FY11 EBIT 319 520 605 427 474 Depreciation and amortization 34 67 88 92 96 Interest and tax paid (66) (137) (216) (186) (125) Working capital / other (91) (251) 69 (53) (151) Net cash inflow from operating activities 196 199 546 280 294 Net cash outflow from investin
Slide 22: Liquidity & Gearing
Liquidity & Gearing Key Metrics Jun-08 Jun-09 Jun-10 Jun-11 Liquidity Summary $m Jun-08 Jun-09 Jun-10 Jun-11 Gearing ratio 31% 26% 26% 22% Loan & OD facilities 1,094 1,376 1,286 1,277 Facility utilisation 67% 54% 61% 53% Less: facilities utilized (736) (745) (781) (680) Average cost of debt 6% 6% 5%
Slide 23: Sector Performance and Outlook
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Slide 24: Hydrocarbons
Hydrocarbons Performance Highlights ● Demand for oil and gas in the Aggregated $4,020M Up 17% developing world continues to Revenue increase driving new developments EBIT $414M Up 10% ● Strengthening performance in Margin 10.3% Down 1% upstream offshore markets in Asia, Russia, Canada, Africa and
Slide 25: Hydrocarbons: Key Project Awards
Hydrocarbons Key Project Awards ● MEG Energy – Christina Lake steam assisted gravity drainage Engineering & Procurement(E&P,) Canada ● BP – Rumaila oil field expansion Front End Engineering Design (FEED), Iraq ● ConocoPhillips – Jasmine detailed E&P, North Sea ● Woodside Petroleum – North Rankin h
Slide 26: Hydrocarbons: Key Improve Awards and Renewals
Hydrocarbons Key Improve Awards and Renewals Shell – national engineering services agreement for North American terminals and distribution, Canada Suncor – supplier of choice agreement, Canada Shell – Brunei Petroleum major project master contract, Brunei Chevron – general services agreeme
Slide 27: Hydrocarbons: Segment Outlook
Hydrocarbons Segment Outlook ● Growth and strengthening in global greenfield and Improve markets ● Increased focus on natural gas projects, particularly unconventional gas ● Crude oil opportunities will remain good ● Continued high level of activity in offshore upstream market ● Relationships with
Slide 28: Minerals & Metals
Minerals & Metals Performance Highlights ● Long term relationships developing with Aggregated 644M Up 14% Tier One customers Revenue ● Services and presence expanded across EBIT 71M Down 8% Latin America – Brazil, Chile, Colombia, Margin 11% Down 3% Peru ● Growth in Delivery and Improve services e
Slide 29: Minerals & Metals: Key Project Awards
Minerals & Metals Key Project Awards ● Vale – Kronau potash fertilizer project front end engineering, Canada ● Anglo American – Chagres smelter expansion pre-feasibility study, Chile ● Canteras Del Hallazgo – Chucapaca mine, Peru ● Hancock Coal – Alpha Coal pit to port development, Australia Forte
Slide 30: Minerals & Metals: Key Improve Awards and Renewals
Minerals & Metals Key Improve Awards and Renewals ● Vale - global framework agreement ● Anglo American – framework agreement ● Fortescue Metals – group sustaining capital alliance, Australia ● BASF – engineering partnership umbrella contracts, Asia and the Americas ● Invista – global engineering s
Slide 31: Minerals & Metals: Segment Outlook
Minerals & Metals Segment outlook ● Growth opportunities expected through implementation of global agreements with Tier One customers ● Growth also expected in developing regions, including Latin America and Africa ● Pit-to-port opportunities in coal and iron ore are strong across the globe ● Chem
Slide 32: Power
Power Performance Highlights Developed markets – investment focus on: Aggregated 538M Up 6% ● Asset maintenance and optimisation Revenue ● Efficiency improvements EBIT 45M Up 13% ● Smart grid and intelligent networks Margin 8% No change ● New build in gas and renewable energy ● Environmental compl
Slide 33: Power – New Build in Developing World
Power – New Build in Developing World Key Project Awards ● China CAMC Engineering – El Vigia combined cycle gas turbine, design and engineering services, Venezuela ● PetroVietnam – Thai Binh No.2 coal power plant, detailed design, Vietnam ● Akkuyu NGS Elektrik Uretim Anonim Sirketi – Akkuyu nuclea
Slide 34: Power - Improve in Developed World
Power - Improve in Developed Key Improve Awards and Renewals World ● Loy Yang Power – asset management services, Australia ● Verve Energy – Collie Power Station, operations and maintenance, renewed for another 6 years, Australia ● Delta Electricity – Vales Point power station, outage management, 4
Slide 35: Nuclear Power
Nuclear Power Continues to offer strong growth prospect in new build and nuclear Improve in response to Fukushima ● Program management for new build units – Bulgaria, Armenia, Jordan and Egypt ● Feasibility studies – Slovenia, Slovakia, Czech Republic and Russia ● Positioning for emerging opportun
Slide 36: Power: Segment Outlook
Power Segment Outlook ● Solid improvement in power generation and networks opportunities across Asia, Middle East, Latin America and Africa ● North America markets continue to improve supported by opportunities in asset optimisation, energy efficiency, and integrated networks solutions ● Opportuni
Slide 37: Infrastructure & Environment
Infrastructure & Environment Performance Highlights ● Expanding global reach building on a Aggregated 702M Up 49% foundation of expertise in the resources Revenue industry in Australia EBIT 65M Up 36% ● Pit to port projects are being pursued Margin 9% Down 1% and executed with the Minerals & Metal
Slide 38: Infrastructure & Environment: Key Project Awards
Infrastructure & Environment Key Project Awards ● Port Authority of New York & New Jersey – rail yard, float bridges, rail barge and barge refurbishment, USA ● Port Metro Vancouver – container capacity improvement, USA ● MPX – La Guajira pit to port Development, Columbia ● Fortescue Metals – Ander
Slide 39: Infrastructure & Environment: Segment Outlook
Infrastructure & Environment Segment Outlook ● Global infrastructure and environment opportunities expected to flow into 2012, particularly in Hydrocarbons and Mining sectors ● Focus on creating global leadership in Coastal and Marine, Transport, Water and Waste Water, and Environment ● Expect con
Slide 40: Summary 2011
Summary 2011 Strong 2nd half performance delivered full year result in accordance with guidance Well positioned for growth with increasing number of people expected to continue All sectors seeing markets improving Global customer agreements, significant new major and new Improve relationship
Slide 41: Group Outlook
Group Outlook Commenting on the outlook for the WorleyParsons Group, Mr John Grill said: “The group result improved through the second half of 2011 and, subject to the markets for our services remaining strong, we expect to achieve good growth in 2012 compared to 2011 underlying earnings. The group
Slide 42: Full Year Results 2011
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Slide 43: Contractual Acronyms
Contractual Acronyms D4 – Deactivation, Decontamination, Decommissioning, Demolition EDS – Engineering and Design Services E&P – Engineering and Procurement EPC – Engineering, Procurement and Construction EPCM – Engineering, Procurement and Construction Management ESA – Engineering Services Agreemen
Slide 44: FX Translation Impact
FX Translation Impact % Movement in major currencies Movement in Major Currencies 130.0 125.0 120.0 115.0 110.0 105.0 100.0 95.0 Apr-11 Aug-10 Jun-10 Feb-11 Jun-11 Dec-10 Oct-10 USD GBP CAD Currency Annualized AUD $m NPAT Currency FY10 FY11 FY∆ translation impact of 1c ∆ * AUD:USD 1.1 AUD:USD 88.1 9
Slide 45: Dividend History
Dividend History FY07 FY08 FY09 FY10 FY11 Interim dividend (cps) 28.0 38.0 38.0 35.5 36.0 Franked % 19% 30% 76% 100% 100% $m total 57.5 91.9 92.2 87.0 88.6 Final dividend (cps) 32.5 47.5 55.0 40.0 50.0 Franked % 29% 71% 100% 47% 26% $m total 78.2 114.8 133.5 98.0 122.8 Total (cps) 60.5 85.5 93.0 75.