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August 2015 Investor Presentation – WorleyParsons Limited

WorleyParsons Limited · Aug 26, 2015 · 49 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. August 2015 Investor Presentation – WorleyParsons Limited – slide 1
    Full year results 2015 Andrew Wood, CEO WorleyParsons
  2. August 2015 Investor Presentation – WorleyParsons Limited – slide 2
    Overview FY2015 Positioning for the future Positioning for the future Cost reduction charges taken in FY2015 Taking action to ensure sustainable business 105 significant awards Sound financial position Deploying strategy for growth in…
  3. August 2015 Investor Presentation – WorleyParsons Limited – slide 3
    Total headcount and monthly movements Continually making the necessary adjustments Global headcount Headcount Change to Prior Month * Economic downturn Mining Crude price during GFC downturn decline Jul-08 Jan-09 Jul-09…
  4. August 2015 Investor Presentation – WorleyParsons Limited – slide 4
    Financial snapshot Result impacted by non-recurring charges Statutory result Total revenue of 8,757.5m Statutory loss after tax of 54.9m Recognized 198.6 million non-cash write down of goodwill Underlying result Aggregated revenue1…
  5. August 2015 Investor Presentation – WorleyParsons Limited – slide 5
    OneWay to Zero Harm We aim for Zero Harm Our safety performance is among the best in the industry Employee Total Recordable Case Frequency Rate (TRCFR) for FY2015 was 0.12 (FY2014: 0.10) Achieved a 25% reduction in frequency rate for…
  6. August 2015 Investor Presentation – WorleyParsons Limited – slide 6
    Full year results 2015 Simon Holt, CFO 7
  7. August 2015 Investor Presentation – WorleyParsons Limited – slide 7
    Group financial profile Redundancy and onerous lease charges lower 2H result FY2015 FY2014 vs. FY2014 1H2015 2H2015 Aggregated revenue1 (m) 7,227.5 7,363.7 (2)% 3,613.7 3,613.8 Underlying EBIT2 (m) 355.7 452.2 (21)% 180.8 174.9…
  8. August 2015 Investor Presentation – WorleyParsons Limited – slide 8
    Fourth quarter performance Revenue up, margins impacted by charges 4Q unaudited result 4Q2015 4Q2014 vs. 4Q2014 Aggregated revenue1 (m) 1,906.5 1,759.7 8.3% Underlying EBIT2 (m) 104.4 188.6 (44.6%) Underlying EBIT margin 5.5% 10.7%…
  9. August 2015 Investor Presentation – WorleyParsons Limited – slide 9
    Non-trading items YOY result comparison adjusting for non-trading items FY2015 (m) FY2014 (m) Additions Fair value gain - 11.4 Sub-total additions - 11.4 Subtractions Impairment of goodwill (198.6) - Redundancies, post tax (27.3)…
  10. August 2015 Investor Presentation – WorleyParsons Limited – slide 10
    Underlying NPAT (m) By business line Reflects changes in contribution to EBIT at constant currency (75.0) (17.2) 32.5 (11.3) 11.2 (48.7) 33.5 6.4 3.6 0.2 263.4 198.6 Benefits of cost reductions partially offset the decline…
  11. August 2015 Investor Presentation – WorleyParsons Limited – slide 11
    Underlying NPAT (m) By sector Reflects changes in contribution to EBIT at constant currency (19.1) (57.1) (16.1) 32.5 (48.7) 33.5 6.4 3.6 0.2 263.4 198.6 Hydrocarbons sector performance holding up well. Benefits of cost…
  12. August 2015 Investor Presentation – WorleyParsons Limited – slide 12
    Margin profile EBIT and NPAT margins under pressure Group underlying EBIT margin % 8.0% 7.2% 6.9% 6.1% 9.4% 4.9% 7.1% 7.3% 7.6% 4.8% 6.6% 7.3% 6.5% 5.0% 4.7% FY2011 FY2012 FY2013 FY2014 FY2015 1H prior years Group underlying…
  13. August 2015 Investor Presentation – WorleyParsons Limited – slide 13
    Full year results 2015 Segment results 14
  14. August 2015 Investor Presentation – WorleyParsons Limited – slide 14
    Operational EBIT margin Advisian margin growth supports strategic direction Operational EBIT margin by business line % 9.7% 9.0% 8.0% 7.8% 9.1% 7.4% 11.5% 6.1% 10.6% 7.9% 8.2% 5.7% 1H FY2014 5.0% 7.2% 3.3% 2H FY2014 6.4%…
  15. August 2015 Investor Presentation – WorleyParsons Limited – slide 15
    Services Redundancy and onerous lease charges impact margin FY2015 FY2014 vs. FY2014 1H2015 2H2015 Aggregated revenue m 5,501.4 5,618.2 (2%) 2,808.0 2,693.4 Professional services m 4,322.2 4,471.5 (3%) 2,209.7 2,112.5 Construction and…
  16. August 2015 Investor Presentation – WorleyParsons Limited – slide 16
    Major Projects Revenue mix compressing margins FY2015 FY2014 vs. FY2014 1H2015 2H2015 Aggregated revenue m 922.7 862.9 7% 377.6 545.1 Professional services m 881.5 827.1 7% 360.4 521.1 Procurement revenue with margin m 41.2 35.8…
  17. August 2015 Investor Presentation – WorleyParsons Limited – slide 17
    Improve Challenging conditions in North America FY2015 FY2014 vs. FY2014 1H2015 2H2015 Aggregated revenue m 649.0 785.6 (17%) 363.4 285.6 Professional services m 645.7 777.0 (17%) 361.6 284.1 Procurement revenue with margin m 3.3…
  18. August 2015 Investor Presentation – WorleyParsons Limited – slide 18
    Development Advisian grows through MTG acquisition FY2015 FY2014 vs. FY2014 1H2015 2H2015 Aggregated revenue m 154.4 97.0 59% 64.7 89.7 Professional services m 142.9 91.2 57% 59.4 83.5 Procurement revenue with margin m 11.5 5.8 98%…
  19. August 2015 Investor Presentation – WorleyParsons Limited – slide 19
    Operational EBIT margin by sector Hydrocarbons margin supported by construction Operational EBIT margin by CSG % 10.3% 10.3% 10.1% 9.0% 8.7% 7.4% 10.5% 12.0% 6.5% 7.5% 15.1% 1H FY2014 10.6% 7.2% 2H FY2014 4.9% 4.2% 1H…
  20. August 2015 Investor Presentation – WorleyParsons Limited – slide 20
    Hydrocarbons Includes 44.6m of cost reduction charges FY2015 FY2014 vs. FY2014 1H2015 2H2015 Aggregated revenue m 5,332.1 5,371.5 (1%) 2,696.9 2,635.2 Professional services m 4,196.2 4,255.1 (1%) 2,118.8 2,077.4 Construction and…
  21. August 2015 Investor Presentation – WorleyParsons Limited – slide 21
    Minerals, Metals & Chemicals Result impacted by project cancellations FY2015 FY2014 vs. FY2014 1H2015 2H2015 Aggregated revenue m 903.7 1,065.9 (15%) 447.4 456.3 Professional services m 894.3 1,042.4 (14%) 441.5 452.8 Procurement…
  22. August 2015 Investor Presentation – WorleyParsons Limited – slide 22
    Infrastructure Moving to the right cost structure FY2015 FY2014 vs. FY2014 1H2015 2H2015 Aggregated revenue m 991.7 926.3 7% 469.4 522.3 Professional services m 901.8 869.3 4% 430.8 471.0 Procurement revenue with margin m 86.0 52.4…
  23. August 2015 Investor Presentation – WorleyParsons Limited – slide 23
    Group revenue by region Geographic diversity supports modest revenue decline Aggregated revenue by region 43.2% 39.3% 1,539 1,413 26.3% 22.5% 23.3% 1H FY2014 21.2% 2H FY2014 1,019 759 874 711 1H FY2015 1,645 1,431 2H…
  24. August 2015 Investor Presentation – WorleyParsons Limited – slide 24
    Operational EBIT and margin by region EURMENA region comes to the fore Operational EBIT by region 8.4% 13.5% 158.8 10.3% 8.6% 5.7% 111.3 9.1% 1H FY2014 61.7 63.9 92.4 2H FY2014 93.3 1H FY2015 111.5 107.2 2H FY2015 96.1…
  25. August 2015 Investor Presentation – WorleyParsons Limited – slide 25
    Full year results 2015 Capital management 26
  26. August 2015 Investor Presentation – WorleyParsons Limited – slide 26
    Cash flow Strong cash flow generation m FY2015 FY2014 Underlying EBIT 355.7 452.2 Add: Depreciation and amortization 110.0 109.5 (Less): Interest and tax paid (208.1) (140.2) (Less)/Add: Working capital/other (6.3) 128.6 Net…
  27. August 2015 Investor Presentation – WorleyParsons Limited – slide 27
    Gearing metrics Gearing in middle of target range FY2015 FY2014 Gearing ratio1 % 28.0% 18.7% Facility utilization2 % 59.4% 50.0% Average cost of debt % 4.7% 5.4% Average maturity (years) 3.5 4.2 Interest cover2 (times) 6.4x…
  28. August 2015 Investor Presentation – WorleyParsons Limited – slide 28
    Liquidity Financial capacity remains strong Liquidity summary m FY2015 FY2014 vs. FY2014 Total liquidity largely Loan, finance lease & 2,087 1,783 17% unchanged from FY2014 Bonding facilities value up due overdraft facilities…
  29. August 2015 Investor Presentation – WorleyParsons Limited – slide 29
    Full year results 2015 Strategy update and outlook 30
  30. August 2015 Investor Presentation – WorleyParsons Limited – slide 30
    Strategy update Realize our future 5 strategic themes, 5 projects Technical Capability & Local Presence Early success building Advisian Positioning to be PMC provider of choice and expanding Improve capabilities Rolling out…
  31. August 2015 Investor Presentation – WorleyParsons Limited – slide 31
    Business line outlook Services local delivery of global expertise Subdued trading conditions expected to remain across APAC Activity levels expected to be variable in North America Flat outlook for EURMENA, Middle East offsetting…
  32. August 2015 Investor Presentation – WorleyParsons Limited – slide 32
    Business line outlook Major Projects, Improve and Advisian Major Projects Global delivery of complex projects Secured backlog activity shifting to the construction phase Customer rate concessions expected to impact margins Improve…
  33. August 2015 Investor Presentation – WorleyParsons Limited – slide 33
    Sector outlook Mixed outlook Hydrocarbons Customers maintain cautious position with regard to investment plans Difficult to predict activity levels Benefits of actions taken and further overhead reductions expected to temper effect on…
  34. August 2015 Investor Presentation – WorleyParsons Limited – slide 34
    Group outlook Aggregated revenue has proven to be resilient through the Companys strategy of sector and geographic diversification and its broad range of services. The Company remains focused on continuing to improve the delivery of…
  35. August 2015 Investor Presentation – WorleyParsons Limited – slide 35
    Full year results 2015 Q&A 36
  36. August 2015 Investor Presentation – WorleyParsons Limited – slide 36
    Full year results 2015 Supplementary information 37
  37. August 2015 Investor Presentation – WorleyParsons Limited – slide 37
    Reconciliation Decline in procurement services at nil margin m FY2015 FY2014 Revenue and other income 8,757.5 9,582.5 Procurement services at nil margin (2,038.0) (2,726.1) Share of revenue from associates 514.6 524.0 Net gain on…
  38. August 2015 Investor Presentation – WorleyParsons Limited – slide 38
    Aggregated revenue by type Relatively stable revenue mix m FY2015 FY2014 vs. FY2014 Aggregated revenue 7,227.5 7,363.7 (2%) Professional services 5,992.3 6,166.8 (3%) Construction and fabrication 857.9 888.7 (3%) Procurement…
  39. August 2015 Investor Presentation – WorleyParsons Limited – slide 39
    Reconciliation FY2015 impacted by impairment and project settlement m FY2015 FY2014 EBIT 87.1 428.2 Add: impairment of goodwill 198.6 - Add: Arkutun-Dagi project settlement costs 70.0 - Less: net gain on revaluation of investments…
  40. August 2015 Investor Presentation – WorleyParsons Limited – slide 40
    Strategy funding requirements Payout ratio at top of range Dividend history 200 90.0% 180 79.6% 80.0% 160 70.8% 70.8% 69.7% Cents per share 70.0% 140 64.7% Payout ratio % 63.6% 120 57.8% 60.0% 100 50.0% 80 55.0 51.0…
  41. August 2015 Investor Presentation – WorleyParsons Limited – slide 41
    Dividend history Final dividend of 22.0 cps (FY2014: final dividend 51.0 cps) FY2011 FY2012 FY2013 FY2014 FY2015 Interim dividend (cps) 36.0 40.0 41.5 34.0 34.0 Franked % 100% 79% 100% 25% 8% m total 88.6 98.3 102.4 83.9 84.1 Final…
  42. August 2015 Investor Presentation – WorleyParsons Limited – slide 42
    Foreign Exchange Effects of different currencies offset each other Total EBIT Currency Average exchange rate movement Spot exchange rate movement USD BRL 6.09% 16.93% Pegged CAD (0.57%) (5.23%) AUD CNY (8.15%) (18.06%) USD…
  43. August 2015 Investor Presentation – WorleyParsons Limited – slide 43
    FX translation impact Limited FX benefit due to currency mix Movement in major currencies Group EBIT FX impact since FY2011 110.0 FY2011 FY2012 FY2013 FY2014 FY2015 105.0 50 100.0 25 41 95.0 4 Am 90.0 11 0 -18 85.0…
  44. August 2015 Investor Presentation – WorleyParsons Limited – slide 44
    Diverse geographic presence Consolidating offices 31,400people 148 offices 46 countries 45
  45. August 2015 Investor Presentation – WorleyParsons Limited – slide 45
    FY2015 contract revenue contribution Majority of earnings come from smaller contracts 8.6% 10.4% 100 Mil 7.7% 50-100 Mil 20-50 mil Rest 73.3% 46
  46. August 2015 Investor Presentation – WorleyParsons Limited – slide 46
    FY2015 significant awards 16 awards announced to the ASX 21 61 105 23 47
  47. August 2015 Investor Presentation – WorleyParsons Limited – slide 47
    Diversification in earnings Click to add text Top 10 customers deliver 31% of the gross margin Top 10 projects deliver 15% of the gross margin Top 10 locations deliver 66% of the operating EBIT 48
  48. August 2015 Investor Presentation – WorleyParsons Limited – slide 48
    Contractual acronyms Click to add text 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…
  49. August 2015 Investor Presentation – WorleyParsons Limited – slide 49
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