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FY 2016 Results – WorleyParsons Limited

WorleyParsons Limited · Aug 23, 2016 · 43 slides

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Slides

  1. FY 2016 Results – WorleyParsons Limited – slide 1
    Full year results 2016 Andrew Wood, CEO WorleyParsons
  2. FY 2016 Results – WorleyParsons Limited – slide 2
    Overview FY2016 Delivering what we promised, despite declining revenue Progress on cost reduction is driving performance improvement Financial Focus on cash is improving debt metrics results Realize our future transformation…
  3. FY 2016 Results – WorleyParsons Limited – slide 3
    Our priorities FY2016 achievements FY2017 priority areas Reduce Delivered 200m annualized savings Targeting a further 150 million in vs 120m target annualized savings internal costs Utilization 83.4% up 0.4pp Utilization 85%…
  4. FY 2016 Results – WorleyParsons Limited – slide 4
    Key financials Cost reduction initiatives supporting underlying margin Statutory result FY2016 FY2015 vs. FY2015 Aggregated revenue Total revenue (m) 7,790.1 8,757.5 (11.0%) down 19%, 23% on EBIT (m) 128.9 87.1 48.0% Net Profit After Tax…
  5. FY 2016 Results – 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 FY2016 was 0.07 (FY2015: 0.12) Achieved an 8% reduction in frequency rate for…
  6. FY 2016 Results – WorleyParsons Limited – slide 6
    Reducing internal costs Actions taken to reduce overhead costs Local presence, global delivery Closed 30 offices, 73,000 sqm Staff levels reduced by 6900 or 22% Improving trend in utilization Maintained presence in 42 countries…
  7. FY 2016 Results – WorleyParsons Limited – slide 7
    Significant awards1 Continuing to win work FY2016 Significant awards FY2015 Significant awards Revenue 535+ Revenue 1.9+ Revenue 2.5+ million billion billion Revenue 310+ 16 41 21 61 61 85 105 million 28 23 Revenue 370+…
  8. FY 2016 Results – WorleyParsons Limited – slide 8
    Significant awards Award highlights ASX announcements Cutback Ridge awards for WorleyParsonsCord Canadian E&P Master Services Agreement Johan Sverdrup award for Rosenberg WorleyParsons Tengizchevroil project passed FID (early July)…
  9. FY 2016 Results – WorleyParsons Limited – slide 9
    Full year results 2016 Tom Honan, GMD Finance, CFO 10
  10. FY 2016 Results – WorleyParsons Limited – slide 10
    Statutory Statement of Financial Performance 30 Jun 2016 (m) 30 Jun 2015 (m) REVENUE AND OTHER INCOME Professional services revenue 4,641.8 5,517.9 Procurement revenue 2,571.7 2,370.9 Construction and fabrication revenue 561.6 857.9…
  11. FY 2016 Results – WorleyParsons Limited – slide 11
    Reconciliation of Statutory to Underlying NPAT result Adjusted for non-trading items FY2016 (m) FY2015 (m) Statutory result 23.5 (54.9) Additions (pre-tax) Staff restructuring costs 76.8 38.3 Onerous lease contracts 86.4 20.2…
  12. FY 2016 Results – WorleyParsons Limited – slide 12
    Underlying Group EBIT evolution Overhead savings benefit commenced more to come (334.3) 170.0 418.0 49.0 302.7 13
  13. FY 2016 Results – WorleyParsons Limited – slide 13
    Segment result By business line FY2016 FY2015 Restated vs. FY2015 Overhead reductions mitigating Aggregated revenue (m) 5,892.9 7,227.5 (18.5%) the impact of declining revenue Services 3,436.5 4,336.2 (20.7%) Major Project 1,281.4…
  14. FY 2016 Results – WorleyParsons Limited – slide 14
    Segment By region FY2016 FY2015 Restated vs. FY2015 APAC margins held due to Aggregated revenue (m) 5,892.9 7,227.5 (18.5%) Services APAC overhead APAC 1,366.7 1,599.0 (14.5%) reductions and turnaround in Americas 2,466.8 3,273.3…
  15. FY 2016 Results – WorleyParsons Limited – slide 15
    Segment result By sector FY2016 FY2015 Restated vs. FY2015 Hydrocarbons sector impacted by Aggregated revenue (m) 5,892.9 7,227.5 (18.5%) reduced capital and operating Hydrocarbons 4,266.9 5,332.1 (20.0%) expenditure by customers in…
  16. FY 2016 Results – WorleyParsons Limited – slide 16
    Full year results 2016 Realize our future 17
  17. FY 2016 Results – WorleyParsons Limited – slide 17
    Overhead cost reduction Delivered 200m in annualized savings Overhead reductions 2016 actual in year savings annualized savings Eliminated overhead roles 63m 115m Property savings 38m 60m Engineering software licenses savings 5m…
  18. FY 2016 Results – WorleyParsons Limited – slide 18
    Overhead cost reduction Increased target to 350m annualized savings 120 80 150 1,450 1,330 1,250 1,100 Targeting a further 150m in annualized savings with 100m expected in FY2017 result Now targeting total of 350m in…
  19. FY 2016 Results – WorleyParsons Limited – slide 19
    Strengthening the balance sheet Setting up for success DELIVERED Improved balance sheet metrics Cash conservation measures delivered 255m Lowered capital expenditure Reduced dividend payments Reduced M&A spend Additional cash…
  20. FY 2016 Results – WorleyParsons Limited – slide 20
    Working capital focus WorleyParsons DSO Leaderboard 15 of 26 improved DSO at December 2015 Best in class Average Locations performers 0 50 100+ 21
  21. FY 2016 Results – WorleyParsons Limited – slide 21
    Strengthening the balance sheet Making progress still more to do TARGETS DSO in line with industry average of 65 days Aiming for 300m improvement in cash Sell selected non-core assets Net debt/EBITDA range of 1.5 2.0 times…
  22. FY 2016 Results – WorleyParsons Limited – slide 22
    Realize our future Key indicators Overhead cost index 40% Gearing ratio (%) 35% HY2014 FY2014 HY2015 FY2015 HY2016 FY2016 30% 0 -5 25% -10 20% -15 15% -20 10% -25 -30 5% Gearing ratio = net debt/net debt + equity -35 0% -40 HY2014…
  23. FY 2016 Results – WorleyParsons Limited – slide 23
    Full year results 2016 Capital management 24
  24. FY 2016 Results – WorleyParsons Limited – slide 24
    Cash flow Positive cash flow m FY2016 FY2015 Underlying EBIT 302.7 418.0 Add: Depreciation, amortization 90.1 110.0 Less: Interest and tax paid (118.4) (208.1) Less: Working capital/other (82.4) (68.6) Net cash inflow from…
  25. FY 2016 Results – WorleyParsons Limited – slide 25
    Gearing metrics Current balance sheet metrics FY2016 HY2016 Actions to strengthen balance sheet Gearing ratio1 % 29.2% 32.4% starting to deliver Facility utilization2% 57.0% 63.4% 115m improvement in net debt position Average cost…
  26. FY 2016 Results – WorleyParsons Limited – slide 26
    Liquidity Liquidity and debt maturity profile Liquidity summary m FY2016 FY2015 vs. Gross debt flat, includes FY2016 27 million impact of Loan, finance lease & overdraft foreign exchange 2,182 2,087 4.6% facilities Less:…
  27. FY 2016 Results – WorleyParsons Limited – slide 27
    Full year results 2016 Backlog 28
  28. FY 2016 Results – WorleyParsons Limited – slide 28
    Backlog1 as at 30 June 2016 36 months backlog (B) Approximate timing of backlog (m) Backlog Soft backlog Total 4.6 4.5 4.2 0.5 0.6 0.3 4.1 3.9 3.9 2.7 0.5 1.0 31-Dec-15 31-Mar-16 30-Jun-16 FY2017 FY2018 FY2019 Current…
  29. FY 2016 Results – WorleyParsons Limited – slide 29
    Full year results 2016 Outlook 30
  30. FY 2016 Results – WorleyParsons Limited – slide 30
    Group outlook The Company expects trading conditions to remain challenging, leading to continued pressure on aggregated revenue. The Company is focused on protecting revenue and gross margin, achieving further overhead reductions and…
  31. FY 2016 Results – WorleyParsons Limited – slide 31
    Full year results 2016 Q&A 32
  32. FY 2016 Results – WorleyParsons Limited – slide 32
    Full year results 2016 Supplementary information 33
  33. FY 2016 Results – WorleyParsons Limited – slide 33
    Underlying NPAT (m) By business line (restated) Reflects changes in contribution to EBIT at constant currency (11.5) (109.4) 42.1 (4.7) (10.8) 7.0 (2.7) 243.1 153.1 34
  34. FY 2016 Results – WorleyParsons Limited – slide 34
    Underlying NPAT (m) By sector (restated) Reflects changes in contribution to EBIT at constant currency (162.4) 42.1 7.0 (2.7) 243.1 35.5 (9.5) 153.1 35
  35. FY 2016 Results – WorleyParsons Limited – slide 35
    Underlying earnings profile Group underlying EBIT m 530.3 527.0 452.2 418.0 282.0 275.1 302.7 274.0 237.2 152.5 1H prior years 248.3 251.9 178.2 180.8 150.2 2H prior years 1H current year FY2012 FY2013 FY2014 FY2015…
  36. FY 2016 Results – WorleyParsons Limited – slide 36
    Underlying earnings profile Margin profile Operational Underlying EBIT % 7.3% 7.1% 7.2% 7.3% 7.6% 6.5% 6.9% 6.5% 6.1% 5.8% 5.6% 4.7% 5.0% 4.7% 5.1% 1H FY2012 FY2013 FY2014 FY2015 FY2016 2H Operational Underlying NPAT %…
  37. FY 2016 Results – WorleyParsons Limited – slide 37
    Regional revenue split Understanding the business Contribution to aggregated revenue (%) FY2013 FY2016 29% 22% 21% 16% 15% 16% 15% 15% 8% 7% 8% 10% 9% 9% ANZ Asia Canada USA Middle East Europe Other Australia impacted by…
  38. FY 2016 Results – WorleyParsons Limited – slide 38
    Revenue reconciliation m FY2016 FY2015 vs FY2015 Revenue and other income 7,790.1 8,757.5 (11.0%) Less: Procurement revenue at nil margin (2,226.4) (2,038.0) 9.2% Plus: Share of revenue from associates 342.5 514.6 (33.4%) Less:…
  39. FY 2016 Results – WorleyParsons Limited – slide 39
    Reconciliation m FY2016 FY2015 EBIT 128.9 87.1 Add: impairment of goodwill - 198.6 Add: Arkutun-Dagi project settlement costs - 70.0 Less: net gain on revaluation of investments previously accounted for as joint (4.5) - operations…
  40. FY 2016 Results – WorleyParsons Limited – slide 40
    Foreign Exchange Effects of different currencies offset each other Currency Average exchange Spot exchange rate movement rate movement BRL 20.63% (1.09%) CAD (1.24%) 1.10% CNY (9.44%) 3.25% EUR (5.65%) (2.83%) GBP (7.41%) 13.85%…
  41. FY 2016 Results – WorleyParsons Limited – slide 41
    FX translation impact Movement in major currencies against AUD Group EBIT FX Translation impact FY2012 FY2013 FY2014 FY2015 FY2016 50 25 41 Am 4 11 12 0 -18 -25 Currency AUD m NPAT translation Currency FY16 FY15 FY…
  42. FY 2016 Results – WorleyParsons Limited – slide 42
    Backlog definition from 30 June 2016 Represents 3 years/36 months view Includes total dollar value of the amount of revenues we expect to record in the future as a result of work performed under contracts or purchase/work orders…
  43. FY 2016 Results – WorleyParsons Limited – slide 43
    Acronyms DSO Day Sales Outstanding EDS Engineering and Design Services E&P Engineering and Procurement EPC Engineering, Procurement and Construction EPCM Engineering, Procurement and Construction Management ESA Engineering Services…

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