Petrofac Limited · OTC:POFCY
Petrofac — FY2023 Earnings Presentation
29 slides from Petrofac's earnings presentation, May 31, 2024
Slide 1: Full Year Results 2023
Full Year Results 2023 31 May 2024 Tinrhert gas development, Algeria
Slide 2: Important notice
Important notice This document has been prepared by Petrofac Limited (the Company) solely for Certain statements in this presentation are forward looking statements. Words use at presentations held in connection with its Full Year Results 2023 on 31 May such as "expect", "believe", "plan", "will", "
Slide 3: Agenda
Agenda • 2023 overview • 2023 financial performance • Update on strategic and financial review • Outlook • Q&A Petrofac Full Year Results 2023 3
Slide 4: 2023 overview
2023 overview Financials Operations Backlog growth Strategic Initiatives ◘ Challenges in securing ◘ Good progress in ◘ US$8 billion (+138%) ◘ Strategic and financial guarantees review is ongoing to: completing legacy ◘ Additional losses and contracts ◘ Returned to UAE - Strengthen the balance sheet
Slide 5: 2023 Financial Performance
2023 Financial Performance Afonso Reis e Sousa CFO Petrofac Full Year Results 2023 5
Slide 6: 2023 results summary
2023 results summary Revenue EBIT 1 Net debt 3 Backlog Pipeline 4 US$2,496m US$(393)m US$583m US$8.1bn US$60bn 2022 2 : US$2,567m 2022 2 : US$(229)m 2022: US$349m 2022: US$3.4bn 2022: US$64bn • Lower levels of activity • Additional losses and • Free cash outflow of • >2x increase in Group • Majority
Slide 7: Strategic & Financial update
Strategic & Financial update Afonso Reis e Sousa CFO Petrofac Full Year Results 2023 7
Slide 8: Update on the strategic and financial review
Update on the strategic and financial review Discussions continue in support of a comprehensive financial restructure Objectives Materially strengthen the balance sheet Improve liquidity Secure bank guarantees Challenges in Indicative Proposal Progress Target securing bank guarantees and liquidity »
Slide 9: Outlook & Summary
Outlook & Summary Tareq Kawash CEO Turkstream Petrofac Full Year Results 2023 9
Slide 10: Strong backlog and an attractive pipeline
Strong backlog and an attractive pipeline Backlog has more than doubled in the last year 18-month Group Pipeline1 of US$60 billion Backlog contains: Pipeline breakdown US$8.1bn 1% 2x ADNOC contracts >US$1.3bn 5% ~$2.0bn 21% Petrochemical project in Algeria 19% >2x >US$1bn 22% Two of the six of
Slide 11: Strategic priorities
Strategic priorities 1. Financial restructure: strengthen balance sheet, improve liquidity, secure guarantees 2. Consistent delivery 3. Maintain strength in our core 4. Improved returns » Extend and embed Group assurance » Build on strengths in our core MENA » Access to guarantees for EPC contracts
Slide 12: Summary – key messages
Summary – key messages Financial Restructure is critical for financial strength Major backlog growth in 2023 provides a platform for the business Legacy projects completion a continued focus Operational changes for consistency and predictability Pipeline in core markets remains strong Petrofac Full
Slide 13: Appendices
Appendices Turkstream Petrofac Full Year Results 2023 13
Slide 14: Appendix: Operational performance
Appendix 1 Operational performance Petrofac Full Year Results 2023 14
Slide 15: 2023 ESG highlights
2023 ESG highlights Carbon footprint reduction Training 12% 98% Reduced our Scope 1 and 2 footprint Employees with line management by 12% responsibility completed mandatory Code of Conduct e-learning Leadership Targets 30.5% Net Zero Women in senior management roles Committed to reaching Net Zero in
Slide 16: 2023 health & safety performance
2023 health & safety performance Focus on instilling a strong delivery and safety culture Safety record and incident review Petrofac LTIR 1 and TRIR 2 below industry average 3 • Petrofac has a strong safety record LTIs per 200k work hours • However, a sub-contractor fatality occurred at our 0.25 Tha
Slide 17: E&C: 2023 operational performance
E&C: 2023 operational performance Significant progress on the key priorities, strongest period for new awards Backlog Growth Assuring delivery Legacy contracts More than tripled backlog in 2023 Ramping up for execution Continued progress • Energy transition: six-contract • Guarantees: secured guaran
Slide 18: Asset Solutions: 2023 operational performance
Asset Solutions: 2023 operational performance Strong performance, book-to-bill of 1.1x, growing revenue Protecting Geographic Integrated the core expansion services • Maintain 40% market share in UK • Leveraging UK centre of excellence • Increase differentiation • 80% renewal rate on O&M contracts •
Slide 19: Appendix: Financial performance – supplementary details
Appendix 2 Financial performance – supplementary details Petrofac Full Year Results 2023 19
Slide 20: Business performance results
Business performance results 1 US$m 2023 2022 Change (restated) 4 Revenue 2,496 2,567 (3)% EBITDA 2 (310) (150) (107)% EBITDA margin (12.4)% (5.8)% (6.6)ppts EBIT 3 (393) (229) (72)% EBIT margin (15.7)% (8.9)% (6.8)ppts Net finance expense (113) (93) (22)% Income tax (credit)/expense (3) 1 >(100)% 1
Slide 21: Segmental performance
Segmental performance 2023 revenue by business unit 2023 revenue by geography 5% 37% Engineering & Construction 32% United Kingdom 19% 58% Asset Solutions 10% Algeria 5% Integrated Energy Services 32% 9% Lithuania 37% 5% 7% Malaysia US$2.5bn 5% US$2.5bn 7% United States of America 5% Oman 5% 5% Thai
Slide 22: Engineering & Construction
Engineering & Construction Strong order intake and backlog; Reduced activity levels and operating losses • Significant awards in core markets US$m – Backlog more than tripled (except as otherwise stated) 2023 2022 (restated)2 EBIT margin1,2 • Revenue down 27% Revenue 936 1,287 – Lower activity from
Slide 23: Asset Solutions
Asset Solutions Strong order intake with a book-to-bill of 1.1x and revenue growth • Revenue up by 25% US$m (except as 2023 2022 EBIT Margin1 – Strong order intake, current & prior year otherwise stated) Contract portfolio Revenue 1,446 1,158 • EBIT margin of 0.1% EBITDA1 13 70 – EPCC contract loss
Slide 24: Integrated Energy Services
Integrated Energy Services Continued strong performance, above guidance • Revenue down 12% year-on-year US$m (except as 2023 2022 EBITDA – Lower realised oil price otherwise stated) US$m Revenue 121 137 • EBITDA decreased by 17% EBITDA1 90 109 109 – EBITDA higher than guidance (24) 7 EBIT1 34 58 (1)
Slide 25: Liquidity update
Liquidity update The Company continues to manage its payment obligations to preserve liquidity Gross liquidity 1 • Full year free cash outflow: US$ million – Positive free cash flow in the second half of 2023, 506 excluding placing of collateral 81 – US$180 million collection settlements 253 – >US$1
Slide 26: Working capital
Working capital Working capital balances (US$m) Dec Dec Cash 2023 20221 flow Contract assets and inventories 843 1,341 501 Trade and other receivables 977 739 (252) Restricted cash 223 111 (112) Trade and other payables (930) (865) 59 Accrued contract expenses (691) (759) (67) Contract liabilities (
Slide 27: Working capital
Working capital Progress in resolving open contractual discussions Working capital US$ million • Progress in completing legacy contracts and resolving open contractual discussions Proactive working capital management • Unwinding of US$180 million of historical working 412 capital 130 • Increase in r
Slide 28: Working capital – DSO analysis
Working capital – DSO analysis Progress in collecting payments from clients DSO analysis Days 3 2023 DSO Analysis days 7 16 51 185 days 106 23 Trade receivables WIP billing cycle Non-Billable Billable / Billed Non-billable WIP 3 AVOs 2 1 2 Retentions Accrued income 1. Assessed variation orders 2. No
Slide 29: Working capital – DPO analysis
Working capital – DPO analysis DPO analysis Days 2023 DPO analysis Days 29 13 198 82 38 days 36 Trade payables Other payables Billable ACE1 Accrued expenses 1 1 Non-billable ACE1 1. ACE is accrued contract expenses Petrofac Full Year Results 2023 29