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H1 2014 RESULTS AND UPDATE ON OFFER FOR FOSTER WHEELER – Amec Plc

Amec Plc · Aug 7, 2014 · 46 slides

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Slides

  1. H1 2014 RESULTS AND UPDATE ON OFFER FOR FOSTER WHEELER – Amec Plc – slide 1
    AMEC plc Half-year results 2014 and update on offer for Foster Wheeler 7 August 2014
  2. H1 2014 RESULTS AND UPDATE ON OFFER FOR FOSTER WHEELER – Amec Plc – slide 2
    2014 H1 summary Underlying revenue (1) up 4% underlying EBITA margin (1) flat Some markets challenging recent slow down in some IOC led projects Stronger Sterling adversely impacted revenue by 160m in H1 eg. 17% up v Cdn and 10%…
  3. H1 2014 RESULTS AND UPDATE ON OFFER FOR FOSTER WHEELER – Amec Plc – slide 3
    Summary Versus 2013 million 2014 20131 Headline Underlying5 Revenue 1,858 1,991 -7% +4% EBITA2 152 159 -4% +5% EBITA margin 8.2% 8.0% +20bps Flat Operating cash flow3 39 59 -34% -28% Earnings per share4 39.1p 40.6p -4% +6%…
  4. H1 2014 RESULTS AND UPDATE ON OFFER FOR FOSTER WHEELER – Amec Plc – slide 4
    Revenue by geography million 2014 Headline Underlying 1 Americas 1,060 -8% +7% Europe 545 -7% -7% Growth Regions 279 +5% +17% Investment Services 3 Intercompany eliminations (29) 1,858 -7% +4% American Clean Energy and…
  5. H1 2014 RESULTS AND UPDATE ON OFFER FOR FOSTER WHEELER – Amec Plc – slide 5
    Revenue by market million 2014 Headline Underlying 1 Oil & Gas 867 -13% -5% Mining 205 -18% +7% Clean Energy 542 +16% +22% Environment & Infrastructure2 270 - +3% Investment Services 3 Intercompany eliminations (29) 1,858 -7%…
  6. H1 2014 RESULTS AND UPDATE ON OFFER FOR FOSTER WHEELER – Amec Plc – slide 6
    EBITA margin1 2014 2013 Excl. Excl. million Headline procurement2 Headline procurement2 Americas 9.7% 10.1% 9.8% 10.7% Europe 8.2% 8.2% 6.7% 6.7% Growth Regions 6.0% 6.0% 6.1% 6.1% Total 3 8.2% 8.4% 8.0% 8.4% Underlying…
  7. H1 2014 RESULTS AND UPDATE ON OFFER FOR FOSTER WHEELER – Amec Plc – slide 7
    Americas Versus 2013 million 2014 2013 Headline Underlying Revenue - Oil & Gas 304 428 -29% -15% - Mining 164 219 -25% 0% - Clean Energy 378 293 +29% +40% - Environment & Infrastructure 214 214 0% +13% Total 1,060 1,154 -8%…
  8. H1 2014 RESULTS AND UPDATE ON OFFER FOR FOSTER WHEELER – Amec Plc – slide 8
    Americas Revenue growth (%) EBITA development (m) +1% -12% -4% +7% +1 - 14 +8 -6 1,218m 1,154m 113m 1,154m 1,060m 102m 2013 (H1) Net acquisitions Forex (2) Incremental Organic 2014 (H2) 2013 (H1) Net Forex (2)…
  9. H1 2014 RESULTS AND UPDATE ON OFFER FOR FOSTER WHEELER – Amec Plc – slide 9
    Europe Versus 2013 million 2014 2013 Headline Underlying Revenue - Oil & Gas 356 398 -11% -10% - Mining - - - Clean Energy 162 165 -2% -2% - Environment & Infrastructure 27 26 +4% +4% Total 545 589 -7% -7% EBITA 45 40 +13%…
  10. H1 2014 RESULTS AND UPDATE ON OFFER FOR FOSTER WHEELER – Amec Plc – slide 10
    Europe Revenue growth (%) EBITA development (m) - 7% -3 +8 589m 45m 40m 545m 2013 (H1) Net Forex(2) Organic 2014 (H1) 2013 (H1) Net Forex(2) Organic Margin 2014 (H1) acquisitions(1) acquisitions(1) revenue Margin…
  11. H1 2014 RESULTS AND UPDATE ON OFFER FOR FOSTER WHEELER – Amec Plc – slide 11
    Growth Regions Versus 2013 million 2014 2013 Headline Underlying Revenue - Oil & Gas 207 175 +18% +31% - Mining 41 30 +37% +52% - Clean Energy 2 9 -78% -75% - Environment & Infrastructure 29 51 -43% -37% Total 279 265 +5% +17%…
  12. H1 2014 RESULTS AND UPDATE ON OFFER FOR FOSTER WHEELER – Amec Plc – slide 12
    Growth Regions Revenue growth (%) EBITA development (m) -10% +15% -1.5 +3 -0.4 279m 17m 265m 16m 2013 (H1) Net Forex(2) Organic 2014 (H2) 2013 (H1) Net Forex(2) Organic Margin 2014 (H1) acquisitions(1) acquisitions(1)…
  13. H1 2014 RESULTS AND UPDATE ON OFFER FOR FOSTER WHEELER – Amec Plc – slide 13
    Amortisation and exceptional items million 2014 2013 Continuing operations Amortisation1 (21) (22) Transaction costs (26) (1) Exceptional items (pre-tax)2 (18) (13) (65) (36) Tax on amortisation and exceptional charges 7 11 (58)…
  14. H1 2014 RESULTS AND UPDATE ON OFFER FOR FOSTER WHEELER – Amec Plc – slide 14
    Operating cash flow million 2014 20131 EBITA 152 159 JV EBITA (11) (5) JV dividends received 6 5 Non-cash items2 7 13 Working capital (115) (113) Operating cashflow3 39 59 Cash conversion 26% 37% Cash flow expected to be…
  15. H1 2014 RESULTS AND UPDATE ON OFFER FOR FOSTER WHEELER – Amec Plc – slide 15
    Cash conversion million 400 Half year comparables 350 300 250 200 150 100 50 0 09 FY 10 FY 11 FY 12 FY 13 FY 09 H1 10 H1 11 H1 12 H1 13 H1 14 H1 EBITA* Operating cash flow** FY cash conversion expected to be good *…
  16. H1 2014 RESULTS AND UPDATE ON OFFER FOR FOSTER WHEELER – Amec Plc – slide 16
    Cash flow million 2014 20131 Operating cash flow 39 59 Acquisitions and disposals2 (42) (16) Interest and tax (27) (31) Dividends (40) (36) Share purchases (net) 5 (42) Exceptional items (17) (8) Other3 (10) (8) Net cash flow…
  17. H1 2014 RESULTS AND UPDATE ON OFFER FOR FOSTER WHEELER – Amec Plc – slide 17
    Outlook Long term fundamentals are positive Near term challenges weakness in upstream IOC oil and gas Mining weak, but stabilising 2014 revenue modest underlying growth margin lower due to mix stronger Sterling will adversely…
  18. H1 2014 RESULTS AND UPDATE ON OFFER FOR FOSTER WHEELER – Amec Plc – slide 18
    AMEC + Foster Wheeler: a compelling combination Multi Better business development Better market business development More Broad collaboration skill base More More growth growth markets Asset markets light 19 19
  19. H1 2014 RESULTS AND UPDATE ON OFFER FOR FOSTER WHEELER – Amec Plc – slide 19
    Strong financials 2013 Scope revenue Profit Margin Order Book pro forma 5.5bn 521m 9.5% 6.3bn Scope Revenue Order book Revenue by Market 6% 8% 9% 9% 36% 19% 47% 28% 8% 56% 19% 25% 30% Americas AMEA & S. Europe Oil &…
  20. H1 2014 RESULTS AND UPDATE ON OFFER FOR FOSTER WHEELER – Amec Plc – slide 20
    Stronger O&G competitive position AMEC FW Com- bined Serve the whole O&G value chain More exposure to NOCs Offshore top side facilities Onshore facilities engineering Upstream Main. Mods & Ops Oil sands More exposure to…
  21. H1 2014 RESULTS AND UPDATE ON OFFER FOR FOSTER WHEELER – Amec Plc – slide 21
    Across the asset life cycle Consulting & Execution / Hook-Up & Decommissioning Asset Management Front End Design & Construction Commissioning & Reclamation Front End Consultancy Greenfield/grassroots Projects…
  22. H1 2014 RESULTS AND UPDATE ON OFFER FOR FOSTER WHEELER – Amec Plc – slide 22
    Low risk cost-plus model New AMEC will remain predominantly a reimbursable model, across: actual costs plus a fee cost + + (cost plus fee plus variable margin for performance) a multiplier or a schedule of daily or hourly rates…
  23. H1 2014 RESULTS AND UPDATE ON OFFER FOR FOSTER WHEELER – Amec Plc – slide 23
    Global E&C platform Northern Europe & CIS Strategy & Global centre of excellence for greenfield, Business Development gas monetisation, asset support and brownfield O&G Identifying and prioritising prospects Global centre of…
  24. H1 2014 RESULTS AND UPDATE ON OFFER FOR FOSTER WHEELER – Amec Plc – slide 24
    56% Oil & Gas market Business overview Strong customer relationships Leading engineer and project manager across the oil and gas value chain World class track record of delivery of delivery: Upstream: FEED and project management…
  25. H1 2014 RESULTS AND UPDATE ON OFFER FOR FOSTER WHEELER – Amec Plc – slide 25
    19% Clean Energy market Business overview Strong customer relationships Engineering, design, project delivery and asset support in chosen sectors Nuclear support the full lifecycle of nuclear energy, with strong positions in the UK…
  26. H1 2014 RESULTS AND UPDATE ON OFFER FOR FOSTER WHEELER – Amec Plc – slide 26
    8% Mining market Business overview Strong customer relationships Consultancy, design, project and construction management services and handling systems Expertise across broad spectrum of commodities: including iron ore, copper,…
  27. H1 2014 RESULTS AND UPDATE ON OFFER FOR FOSTER WHEELER – Amec Plc – slide 27
    9% Environment & Infrastructure market Business overview Strong customer relationships Leading consulting, engineering and project management firm Currently focused in North America + UK, growth opportunities in ME/Asia E&I…
  28. H1 2014 RESULTS AND UPDATE ON OFFER FOR FOSTER WHEELER – Amec Plc – slide 28
    8% Global Power Group Business overview 3 year revenues1 m EBITDA 17.9% 21.1% 18.5% margin2 Leader in design, fabrication and supply of CFB 700 boilers for industry and utilities 600 500 400 Circulating fluidised-bed (CFB)…
  29. H1 2014 RESULTS AND UPDATE ON OFFER FOR FOSTER WHEELER – Amec Plc – slide 29
    AMEC + Foster Wheeler: a compelling combination Multi market Broad skill base Asset More light growth markets 30 30
  30. H1 2014 RESULTS AND UPDATE ON OFFER FOR FOSTER WHEELER – Amec Plc – slide 30
    Pro forma financials Headline numbers Information prepared for illustrative purposes only 2013 average exchange rate :US of 1.57 Scope Revenue(1) (m) Trading Profit(2) (m) & Margin (%) 6000 5,511 600 12% 521 / 9.5% 5000 500…
  31. H1 2014 RESULTS AND UPDATE ON OFFER FOR FOSTER WHEELER – Amec Plc – slide 31
    Pro forma financials Order book1 Significant number of long term service contracts Pro forma order book typical duration 3-5 years 7 represent over 1/3rd of the pro forma backlog 6 23% framework contracts are often renewed 5…
  32. H1 2014 RESULTS AND UPDATE ON OFFER FOR FOSTER WHEELER – Amec Plc – slide 32
    Pro forma financials Significant synergies identified Significant revenue synergies including product cross sell opportunities Identified cost synergies of at least US75 million per annum actions completed by end of year 2…
  33. H1 2014 RESULTS AND UPDATE ON OFFER FOR FOSTER WHEELER – Amec Plc – slide 33
    Pro forma financials Capital structure guidance Cash generation Dividend Leverage Trading Progressive Profit dividend Up to 2x Cover 2-2.5x EBITDA growth Revenue growth Surplus cash Investment Additional returns to…
  34. H1 2014 RESULTS AND UPDATE ON OFFER FOR FOSTER WHEELER – Amec Plc – slide 34
    Pro forma financials Treatment of asbestos liabilities Intention to fully capture Foster Wheeler liability up front based on actuarial valuation. Indicative calculation: US m Gross Liability 800 Insurance (100) 700 Discount…
  35. H1 2014 RESULTS AND UPDATE ON OFFER FOR FOSTER WHEELER – Amec Plc – slide 35
    Pro forma financials Transaction guidance Expected to be double digit earnings1 accretive in first 12 months Expected to exceed cost of capital within 24 months of completion AMEC costs of deal estimated c60 million 26 million…
  36. H1 2014 RESULTS AND UPDATE ON OFFER FOR FOSTER WHEELER – Amec Plc – slide 36
    Pro forma financials Other guidance Recent progress Next steps All necessary anti trust approvals Finalise shareholder documentation Foster Wheeler EGM to amend Commence tender offer voting restrictions in Articles of Association…
  37. H1 2014 RESULTS AND UPDATE ON OFFER FOR FOSTER WHEELER – Amec Plc – slide 37
    Summary Positive long-term fundamentals Some challenging markets near-term Strength of Sterling AMEC performing solidly Combination with Foster Wheeler will be transformational 38 38
  38. H1 2014 RESULTS AND UPDATE ON OFFER FOR FOSTER WHEELER – Amec Plc – slide 38
    AMEC plc Supplementary information
  39. H1 2014 RESULTS AND UPDATE ON OFFER FOR FOSTER WHEELER – Amec Plc – slide 39
    Appendix versus North American currencies 2014F 2014 2013 2013 14/13 H1 14/ H1 FY HY H1 13 Income statement Cdn 1.83 1.83 1.62 1.57 +13% +17% US 1.70 1.68 1.57 1.53 +8% +10% Balance sheet Cdn 1.82 1.76 1.60 +14% US 1.71 1.66…
  40. H1 2014 RESULTS AND UPDATE ON OFFER FOR FOSTER WHEELER – Amec Plc – slide 40
    Appendix Profit reconciliation Per consol income Joint Per million statement ventures2 presentation Americas 102 Europe 45 Growth Regions 17 Investments Services 4 Corporate costs (16) Profit before net financing expense 141…
  41. H1 2014 RESULTS AND UPDATE ON OFFER FOR FOSTER WHEELER – Amec Plc – slide 41
    Appendix Order book 2014/13 billion Jun 14 Dec 13 Jun 13 Underlying1 Americas 1.35 1.45 1.55 -1% Europe 1.94 1.73 1.62 +20% Growth Regions 0.94 0.92 0.72 +41% 4.23 4.10 3.89 +16% 1. Excluding the impacts of currency…
  42. H1 2014 RESULTS AND UPDATE ON OFFER FOR FOSTER WHEELER – Amec Plc – slide 42
    Appendix Interest million 2014 2013 Pensions Return on assets 41 36 Interest on liabilities (40) (36) 1 - Bank interest (net) - - Other - (1) Income statement 1 (1) Joint ventures (3) (3) (2) (4) 43 43
  43. H1 2014 RESULTS AND UPDATE ON OFFER FOR FOSTER WHEELER – Amec Plc – slide 43
    Appendix Tax million 2014 FY 2013 FY Estimate Actual Underlying rate1 28% 30% P&L charge2 22% 22% Cash paid 50m 52m Sustainable rate in the low mid-20s 1 Weighted average geographic rate 2 For continuing businesses before…
  44. H1 2014 RESULTS AND UPDATE ON OFFER FOR FOSTER WHEELER – Amec Plc – slide 44
    Appendix Tax rate1 Group million companies JVs Total EBITA per presentation 141 11 152 Net financing income/(expense) 1 (3) (2) 142 8 150 Tax (31) (2) (33) PAT per consolidated 111 6 117 Tax rate 21.8% 26.3% 22.0% 1…
  45. H1 2014 RESULTS AND UPDATE ON OFFER FOR FOSTER WHEELER – Amec Plc – slide 45
    Appendix Pension schemes funding1 million Jun 2014 Jun 2014 Dec 2013 Gross Surplus/(deficit) Surplus /(deficit) assets UK schemes 1,742 102 102 Other schemes 109 (63) (62) 1,851 39 40 A well funded pension position 1…
  46. H1 2014 RESULTS AND UPDATE ON OFFER FOR FOSTER WHEELER – Amec Plc – slide 46
    Appendix Combined Oil & Gas market position Upstream Midstream Downstream Gas pipelines Power/ Heating Offshore LNG production Offshore Gas Pipelines (mainly) (Onshore) Liquefaction Gas LNG Regasification Receiving Oil &…

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