Full year results 2012 John Grill

Transcription

1 Full year results 2012 John Grill

2 Overview Good earnings growth delivered in FY2012. Sound platform for further growth in FY2013. Strong growth in revenue and cash from operations 77 significant new major projects and long term contract awards Increasing demand for Improve services Majority of revenue generated from key global customers Increasing footprint in the developing world continues to create significant opportunities Growth in staffing to over 40,800 people Successful organisation restructure and CEO succession Continued commitment to driving improvement in safety 2

3 Financial highlights Statutory results Underlying results FY12 vs. FY11 Underlying results* Net profit after tax $353 m $346 m 16% Aggregated revenue $7,408 m $7,363 m 25% EBIT $538 m $530 m 12% Operating cash flow $438 m $438 m 49% Basic earnings per share c/s c/s 16% Final dividend Full year dividend 51.0 c/s 91.0 c/s 3 The IFRS financial information contained within this presentation has been derived from the 30 June 2012 Financial Report which has been audited by Ernst & Young. This presentation however has not been audited. * The underlying result for FY2012 and FY2011 excludes the fair value gain on acquisition of associates of $7.6m and $65.7m respectively.

4 Safety performance We incurred three work related fatalities during the year, two from road accidents and one from a bacterial infection Safety remains a major focus in our business We strive for year on year improvement but this was not achieved in FY2012 Total Recordable Case Frequency Rate (TRCFR) was 0.12 (FY2011: 0.11) Lost Workday Case Frequency Rate (LWCFR) was 0.03 (FY2011: 0.03) We are renewing our efforts for continued improvement with company wide focus on 4 Road safety Field and construction HSE activities Project start up activities Active engagement of our leadership teams in HSE programs

5 Snapshot Continued growth in Hydrocarbons and Minerals, Metals & Chemicals particularly in Canada, Australia and the USA Hydrocarbons and Minerals, Metals & Chemicals increasingly dominated by top tier companies Game changing developments and ever growing demand for energy globally is driving unconventional oil and gas Lower gas prices have sparked a resurgence in petrochemical projects in the USA Uplift in asset enhancement and restoration projects 5

6 Snapshot Strong focus on major global customers Developing markets continue to be a significant driver of growth Latin America, Africa and China Infrastructure & Environment focusing on resource infrastructure Continuing to globalise our Minerals, Metals & Chemicals and Infrastructure & Environment services Actively pursuing further Improve opportunities 6

7 Local delivery, global support 4.9 million workshare hours (FY2011: 3.4 million) 7 40,800 people 163 offices 41 countries

8 Significant awards for FY long term contracts / projects

9 Improve contracts WorleyParsons performance continues to be underpinned by our extensive long term contract base Total of 46 new Improve contracts awarded 18 contracts renewed Currently have over 260 Improve contracts Our selection was based upon Recognition of our leadership position in long term contracts Proven safety performance Global footprint 9 4 new global or multi-site agreements

10 Local / global model 10 Model has been well received by our clients and our people

11 Succession On 6 July this year we announced changes to the company s leadership Andrew Wood will succeed me as Chief Executive Officer after the AGM in October Supported by an exceptional leadership team I will be taking on the role of non-executive Chairman early next year 11

12 Corporate responsibility We are on a journey to become a Corporate Responsibility leader by focusing on Governance, ethics and transparency Our people Human rights Community Fair operating practices and the supply chain The environment 12 Kenya Project: Calgary graduates and senior management commissioning clean water and solar power in the Village of Hope Kenya

13 Financial results 2012 Andrew Wood

14 Financial profile $m FY08 FY09 FY10 FY11* FY12* Aggregated revenue 4, , , , ,362.6 EBIT EBIT Margin 10.7% 9.7% 8.6% 8.0% 7.2% Net profit Net profit margin 7.0% 6.3% 5.9% 5.1% 4.7% Basic EPS (cps) Cash flow from operating activities ROE 24.5% 25.4% 16.7% 16.3% 18.9% 14 Good growth compared to prior year and 1HFY2012 * The underlying result for FY2012 and FY2011 excludes the fair value gain on acquisition of associates of $7.6m and $65.7m respectively.

15 5 year financial profile Record aggregated revenue Good NPAT growth from FY2011 of 16% Margins impacted by a small number of underperforming projects and low margin procurement activity Effective tax rate down 3% from FY2011 to 24.1% due to earnings mix and tax refund Cumulative unfavourable FX impact on EBIT over the last three years of approximately $91m Dividend payout of 51.0 cents per share, 61% franked Strong revenue growth, good earnings growth 15 * The underlying result for FY2012 and FY2011 excludes the fair value gain on acquisition of associates of $7.6m and $65.7m respectively.

16 Half on half analysis $m H1 FY2012 H2 FY2012 Total Growth% Group EBIT % EBIT margin 7.3% 7.1% 7.2% Group NPAT % Half on half NPAT* H1 H FY11 FY12 16 * The underlying result for FY2012 and FY2011 excludes the fair value gain on acquisition of associates of $7.6m and $65.7m respectively.

17 Change in net profit after tax FY2011 v FY Good growth in Hydrocarbons, MM&C and I&E * The underlying result for FY2012 and FY2011 excludes the fair value gain on acquisition of associates of $7.6m and $65.7m respectively.

18 Hydrocarbons 18 1 Regions in constant currency Growth in USA and Canada Overall strong performance with record aggregated revenue Australia West impacted by underperformance on a few projects that have now been finalised or provided for Canadian construction business awarded a number of significant module construction and construction services contracts Significant increase in activity in the USA, particularly upstream

19 Power Record aggregated revenue Fall in earnings contrary to guidance Resource sector in Australia provided growth Increased activity in the European nuclear market Latin America impacted by low margin procurement activity USA contributes 35% of sector revenue and impacted by the continuing softness and competition in the USA market 19 1 Regions in constant currency Impacted by low margin procurement and USA market

20 Minerals, Metals & Chemicals Record aggregated revenue 28% EBIT growth year on year Continuing to grow our relationships with major global companies Strong commodity prices driving demand for services Softness in the Australian market towards the end of the period Record revenue and EBIT 20 1 Regions in constant currency

21 Infrastructure & Environment Record aggregated revenue Increased investment in resource projects is driving an increased demand for services Major projects in the Middle East completed in FY2011 Pit to port projects executed with the Minerals, Metals & Chemicals sector providing growth Record revenue and EBIT 21 1 Regions in constant currency

22 Cash flow $m FY2008 FY2009 FY2010 FY2011* FY2012* EBIT Depreciation and amortization Interest and tax paid (137) (216) (186) (125) (152) Working capital / other (251) 69 (54) (151) (43) Net cash inflow from operating activities Net cash outflow from investing activities (326) (133) (145) (106) (106) Net cash (outflow) / inflow from financing activities 101 (317) (175) (136) (252) 22 Strong cash flow * The underlying result for FY2012 and FY2011 excludes the fair value gain on acquisition of associates of $7.6m and $65.7m respectively.

23 Gearing and key metrics Key Metrics FY2009 FY2010 FY2011* FY2012* Gearing ratio 26% 26% 22% 20% Facility utilisation 54% 61% 53% 51% Average cost of debt 5.5% 5.2% 5.7% 5.7% Average maturity (years) Interest cover * 14.1x 13.3x 12.0x 12.4x Net Debt/EBITDA * 0.8x 1.2x 0.9x 0.8x 23 Gearing reduced, strong metrics * The underlying result for FY2012 and FY2011 excludes the fair value gain on acquisition of associates of $7.6m and $65.7m respectively.

24 Liquidity Liquidity Liquidity Summary available $m to support growth FY2009 FY2010 FY2011 FY2012 Loan & OD facilities 1,376 1,286 1,277 1,445 Less: facilities utilized* (745) (782) (680) (740) Available facilities Plus: cash Total liquidity Bonding facilities Bonding facility utilization 53% 50% 61% 66% * Excludes capitalized borrowing costs Gearing at 20%; retain significant financial capacity to support growth Refinanced Syndicated bank debt facility tranche of US$150m to FY2015 Offered unsecured notes payable in the US private debt market July

25 Financial reporting microsite We have introduced a microsite for presentation of our FY2012 Annual Report The site provides the financial results and documents in one place, making it easier for shareholders and potential investors to access our financial information Users can read the annual report online, print the entire report or just the sections that are of interest Online Q&A functionality is provided Aiming to reduce our carbon footprint Visit us after midday today at - annualreport.worleyparsons.com 25 FY2012 results available online

26 Sector outlook 2012 John Grill

27 Hydrocarbons Aggregated revenue FY2012 vs. FY2011 $5,015.1 m 24.0% % of Group aggregated revenue 68.0% - EBIT $586.5 m 5.8% Margin 11.7% 2.0% Capital spend by international majors increased in FY2012 over FY2011 Unconventional oil and gas sectors continue to expand in Australia, Canada, the USA and Middle East Increase in gas monetisation and petrochemical projects in the USA as a result of lower natural gas prices High LNG prices in Asia creating focus on natural gas activity within the region Demand in the developing world remains strong in both Deliver and Improve service offerings Recovery of the downstream markets in USA and Latin America Development of global and multiregional relationships with major oil and gas companies Underperforming projects impact on margins 27 Demand in developed and developing world remains strong

28 Hydrocarbons 28 Key project awards SORESCO Moin refinery expansion project, Costa Rica PetroEcuador Refineria del Pacifico refining and petrochemical complex project, Ecuador ExxonMobil Point Thomson initial production system, Alaska ExxonMobil Hebron topsides engineering, procurement and construction (EPC) services, Canada TransCanada Pipelines Hardisty Terminal A and B, Canada Hess Equus front end engineering design (FEED), Australia Arrow Energy Surat coal bed methane upstream development pre-feed project, Australia Chevron Wheatstone LNG integrated project management team, Australia Oman Oil Company gas plant detailed design and procurement services, Oman Tengizchevroil wellhead pressure management, Kazakhstan MEG Energy Christina Lake module construction, Canada Image courtesy of Woodside

29 Hydrocarbons Key Improve awards and renewals Esso Production Malaysia engineering, procurement and construction management (EPCM) umbrella agreement (renewal), Malaysia PT Chevron Pacific overall program management, engineering and construction management services, Indonesia Imperial Oil Nanticoke refinery (renewal), Canada TransCanada project management, engineering, procurement, technical and field services, Canada Shell EPCM services for refining and chemical facilities, USA and Canada Joint Operations (Kuwait Gulf Oil, Saudi Arabian Chevron Inc) engineering, project and construction management services, Kuwait and Saudi Arabia 29

30 Hydrocarbons Sector outlook Continued high level of spending in onshore unconventional markets Continued growth in global greenfield upstream and downstream markets Ongoing growth of global Improve markets Large number of Select opportunities on new field developments Global customer relationships underpin growth While the rate of revenue growth is expected to diminish, with the completion of the small number of underperforming projects in FY2012 margins are expected to improve We expect improved earnings in the Hydrocarbons sector in FY

31 Power Aggregated revenue FY2012 vs. FY2011 $581.3 m 13.2% % of Group aggregated revenue 8.0% 1.0% EBIT $59.9 m 8.3% Margin 10.3% 2.4% Developing world supporting our customers with new generation and networks capacity Developed world supporting our customers in managing their existing facilities Continued growth in the nuclear Improve market Expanding opportunities in power for resource projects in a number of regions Long term service agreements to deliver a range of support services in the USA, Australia and Canada Retirement of old coal and transition to gas fired power generation in the USA Margins impacted by continuing softness and competition in the US market and low margin procurement activity in Brazil 31 Continued growth in the nuclear Improve market

32 Power 32 Key project awards Akkuyu NGS Elektrik Uretim Anonim Sirketi nuclear power plant, Turkey InterRAO UES Baltic nuclear power plant bankable feasibility study phase 2, Russia King Abdullah City for Atomic and Renewable Energy nuclear power plant siting services, Saudi Arabia Saudi Electricity Company Power Plant 10 engineering and owner s engineer support, Saudi Arabia LS Cable & System power supply upgrade, Qatar American Electric Power air quality study and upgrade, USA Odebrecht Chaglla hydropower plant, Peru Skanska Baixada Fluminense power plant, Brazil BHP Billiton Yarnima gas fired power station phase 1 & 2, Western Australia Tuas Power Tembusu Stage 2A+2B, Singapore

33 Power Key Improve awards and renewals Kozloduy stress tests for nuclear power facilities, Bulgaria Bruce Power sustaining projects, Canada Ontario Power Generation Darlington nuclear refurbishment, Canada Arizona Public Services Palo Verde nuclear power plant task level planning, USA Pacific Gas & Electric master services agreement (MSA) power network services, USA Entergy fossil fuel engineering services, USA Verve Energy Muja / Kwinana maintenance alliance, Australia 33

34 Power 34 Sector outlook Developing markets continue to provide opportunities in new build power generation projects Expect growth in nuclear Improve market as a result continuing safety upgrades Further growth in resource power in Latin America, Sub Saharan Africa and the Middle East Capitalise on momentum in the Improve market in the USA, Canada and Australia Continue to broaden our integrated service offerings to our customers including operating and maintaining assets TW Power Services to become a leading operations, maintenance and support services provider We expect improved earnings in the Power sector in FY2013

35 Minerals, Metals & Chemicals Aggregated revenue FY2012 vs. FY2011 $895.4 m 39.1% % of Group aggregated revenue 12.2% 1.3% EBIT $131.4 m 27.9% Margin 14.7% 1.3% Continue to strengthen our relationships with strategic customers Geographic expansion continues in developed and developing worlds Secured several strategic long term Improve contracts Active in bulk commodities (iron ore, coal, copper and fertilizers) Renamed the division to reflect our increased focus on the global chemicals industry Experiencing an increase in major project study work leading to major project opportunities Continuing focus on growth through strategic acquisitions/partnerships Cegertec WorleyParsons joint venture provides Eastern Canada capability and footprint ARA WorleyParsons acquisition strongly aligned with Latin America growth strategy 35 Continue to strengthen our relationships with strategic customers

36 Minerals, Metals & Chemicals Key project awards Anglo American Chagres smelter development, Chile Areva JEB mill upgrade, Canada BASF Acai / Nanjing super absorbent polymer projects, Brazil and China BHP Billiton iron ore EPCM master framework agreement, Australia Black iron Shymanivske iron ore project feasibility study, Ukraine EBX Group MMX Serra Azul iron ore EPCM, Brazil First Quantum Minerals Kansanshi copper smelter, Zambia Mongolyn Alt (MAK) Group Tsagaan Suvarga copper-molybdenum concentrator, Mongolia Sasol Shondoni coal mine, South Africa WICET Wiggins island coal export terminal stage 1 PMC, Australia Xstrata Askaf iron ore design feasibility study, Mauritania Orica Trident feasibility studies and design, Australia 36

37 Minerals, Metals & Chemicals Key Improve awards and renewals BASF North American engineering partner contract, USA and Canada BHP Billiton iron ore sustaining capital, Australia BHP Billiton Mitsubishi Alliance coal sustaining capital, Australia Fortescue Metals Group iron ore sustaining capital services, Australia Rio Tinto Alcan Weipa bauxite mine engineering services, Australia 37

38 Minerals, Metals & Chemicals Sector outlook Current market uncertainty resulting in near term caution Uncertainty resulting in project delays and review of capital programs, particularly in Australia Medium to long term outlook remains strong Continue to focus on building long term relationships with strategic customers to further globalize the business, particularly in the developing world Production growth in bulk commodities and chemicals is expected to continue Pit to port opportunities remain a key focus in developing countries We expect improved earnings in the Minerals, Metals & Chemicals sector in FY

39 Infrastructure & Environment Aggregated revenue FY2012 vs. FY2011 $870.8 m 24.0% % of Group aggregated revenue 11.8% - EBIT $115.3 m 14.2% Margin 13.2% 1.2% Leveraged our Australian resource infrastructure capability into Latin America and Africa Won major pit to port projects in Latin America and Sub Saharan Africa and well positioned for delivery and Improve pull through Further developed the restoration sector and secured several global restoration framework agreements with global customers Redirected urban water sector to the resource sector Extended capability across the globe creating global centres of excellence in water, environment, ports and transport Continuing to service unconventional oil and gas global strategic customers with an integrated environment and water service offering Leveraged our Australian resource infrastructure capability into Latin America and Africa 39

40 Infrastructure & Environment Key project awards MPX Guajira coal port and rail infrastructure, Colombia Norte Energia Belo Monte hydroelectric plant environment and social compliance, Brazil Queensland Curtis LNG water treatment environment and social licence, Australia Anglo American Peace River coal water treatment, Canada Qatar Government Doha Port development, Qatar Huta Marine Works King Abdullah Port project, Saudi Arabia 40

41 Infrastructure & Environment Key Select and Improve awards and renewals Port of Los Angeles/Long Beach restoration services framework agreement, USA BP remediation management North American framework agreement, USA ExxonMobil Port Stanvac refinery program management contract for decommissioning services, Australia Woodside Browse downstream geotechnical investigations, Australia Rio Tinto MSA, risk advisory and catastrophic event management, Americas Chevron environment services panel contract, Australia National Grid Property Holdings remediation contract, United Kingdom 41

42 Infrastructure & Environment Sector outlook Increasing engagement with global customers Demand for resource infrastructure continues to grow in Australia, Sub Saharan Africa and Latin America Strong demand for remediation, decommissioning, response and recovery services New unconventional oil and gas discoveries and developments are driving growth in environment and water services Ability to manage social and environment licenses continues to be a key driver in project development We expect improved earnings in the Infrastructure & Environment sector in FY

43 Summary Delivered good underlying earnings growth despite the volatile and challenging market conditions Growth continues in the unconventional oil and gas market Global customer agreements, significant new major and new Improve relationships provide solid platform for the future Continue to focus on building capability in the developing world Well positioned to meet the growing demands of our customers and the market Benefits of the local/global organisational restructure starting to be seen 43

44 Group outlook Commenting on the outlook for the WorleyParsons Group, Mr John Grill said: Subject to the markets for our services remaining strong, we expect to achieve good growth in FY2013 compared to FY2012 underlying earnings. We have a clear growth strategy in place focused on improving margins and developing our skill set and geographic footprint across our four customer sectors. This will be achieved through organic growth as well as by taking advantage of acquisition opportunities that provide value for shareholders. We are confident that our medium term and long term prospects remain positive based on our competitive position, our diversified operations and strong financial capacity. August

45 Full year results 2012

46 Contractual acronyms EDS Engineering and Design Services E&P Engineering and Procurement EPC Engineering, Procurement and Construction EPCM Engineering, Procurement and Construction Management ESA Engineering Services Agreement ESP Engineering Services Provider FEED Front End Engineering Design FEL Front End Loading GSA General Services Agreement MSA Master Service Agreement OE Owners Engineer O&M Operations and Maintenance PCM Procurement and Construction Management PMC Project Management Consultancy SAGD Steam Assisted Gravity Drainage 46

47 Segment margins 47 FY2012 Hydrocarbons Power Minerals, Metals & Chemicals Infrastructure & Environment TOTAL Sales to external customers 4, ,985.6 Procurement services revenue at margin Other Income Total 5, ,362.6 Segment result Segment margin 11.7% 10.3% 14.7% 13.2% 12.1% H1 FY2012 Hydrocarbons Power Minerals, Metals & Chemicals FY2011* Hydrocarbons Power Minerals, Metals & Chemicals Infrastructure & Environment Infrastructure & Environment TOTAL Sales to external customers 2, ,204.0 Procurement services revenue at margin Other Income Total 2, ,399.0 Segment result Segment margin 11.2% 10.5% 16.4% 13.7% 12.1% TOTAL Sales to external customers 3, ,553.1 Procurement services revenue at margin Other Income Total 4, ,903.5 Segment result Segment margin 13.7% 12.7% 16.0% 14.4% 13.9% * Restated segment results taking into consideration the change in allocation of global overhead costs

48 FX translation impact Movement in Major Currencies Group EBIT FX Impact Since FY2008 FY08 FY09 FY10 FY11 FY A$m Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 USD GBP CAD Currency Annualized AUD $m NPAT translation impact of 1c Currency FY11 FY12 FY AUD:USD 0.7 AUD:GBP 0.6 AUD:CAD 0.3 AUD:USD AUD:GBP AUD:CAD

49 Dividends, amortisation and tax Dividend History FY08 FY09 FY10 FY11 FY12 Interim dividend (cps) Franked 30% 76% 100% 100% 79% $m total Final dividend (cps) Franked % 71% 100% 47% 26% 61% $m total Total cps Total $m % NPAT 60.1% 57.8% 63.6% 70.8% 64.7% 32.0% 27.0% Effective tax rate Based on asset values as at 30 June 2012 FY2013 peak is due to acquired intangibles being fully amortised and also the amortisation profile of the global business system 22.0% FY08 FY09 FY10 FY11 FY12 Statutory earnings Underlying earnings excluding associates Underlying earnings