for personal use only - asx2012/08/29 · hess – equus front end engineering design (feed),...

Full year results 2012 John Grill

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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

Overview

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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 143.7 c/s 140.6 c/s 16%

Final dividend 51.0 c/s

Full year dividend 91.0 c/s

Financial highlights

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.

3 * The underlying result for FY2012 and FY2011 excludes the fair value gain on acquisition of associates of $7.6m and $65.7m respectively.

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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

• Road safety • Field and construction HSE activities • Project start up activities • Active engagement of our leadership teams in

HSE programs

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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

Snapshot

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

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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

Snapshot

Continuing to globalise our Minerals, Metals & Chemicals and Infrastructure & Environment services

Actively pursuing further Improve opportunities

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Local delivery, global support

40,800 people 163 offices 41 countries

4.9 million workshare hours (FY2011: 3.4 million)

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Significant awards for FY2012

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77 long term contracts / projects

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► 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

Improve contracts

4 new global or multi-site agreements 9

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Local / global model

Model has been well received by our clients and our people 10

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► 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

Succession

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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

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Kenya Project: Calgary graduates and senior management commissioning clean water and solar power in the Village of Hope Kenya

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Financial results 2012 Andrew Wood

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Financial profile

$m FY08 FY09 FY10 FY11* FY12*

Aggregated revenue 4,882.4 6,219.4 4,967.1 5,903.5 7,362.6

EBIT 520.0 605.3 427.4 474.2 530.3

EBIT Margin 10.7% 9.7% 8.6% 8.0% 7.2%

Net profit 343.9 390.5 291.1 298.5 345.6

Net profit margin 7.0% 6.3% 5.9% 5.1% 4.7%

Basic EPS (cps) 142.5 161.1 118.5 121.5 140.6

Cash flow from operating activities 198.8 546.4 279.6 293.8 437.5

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.

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5 year financial profile

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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


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Half on half analysis

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$m H1 FY2012 H2 FY2012 Total Growth%

Group EBIT 248.3 282.0 530.3 14%

EBIT margin 7.3% 7.1% 7.2%

Group NPAT 151.9 193.7 345.6 28%

119.2 151.9

179.3 193.7

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150.0

200.0

250.0

FY11 FY12

Half on half NPAT*

H1

H2


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Change in net profit after tax FY2011 v FY2012

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Good growth in Hydrocarbons, MM&C and I&E


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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

Hydrocarbons

18 1 Regions in constant currency

Growth in USA and Canada

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Power

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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

1 Regions in constant currency

Impacted by low margin procurement and USA market

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Minerals, Metals & Chemicals

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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

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Infrastructure & Environment

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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

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Cash flow

Strong cash flow

$m FY2008 FY2009 FY2010 FY2011* FY2012*

EBIT 520 605 427 474 530

Depreciation and amortization 67 88 92 96 103

Interest and tax paid (137) (216) (186) (125) (152)

Working capital / other (251) 69 (54) (151) (43)

Net cash inflow from operating activities 199 546 280 294 438

Net cash outflow from investing activities (326) (133) (145) (106) (106)

Net cash (outflow) / inflow from financing activities 101 (317) (175) (136) (252)

22 * The underlying result for FY2012 and FY2011 excludes the fair value gain on acquisition of associates of $7.6m and $65.7m respectively.

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Gearing and key metrics

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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) 4.1 3.8 4.6 3.8

Interest cover * 14.1x 13.3x 12.0x 12.4x

Net Debt/EBITDA * 0.8x 1.2x 0.9x 0.8x


Gearing reduced, strong metrics

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► Liquidity available to support growth

Liquidity

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Liquidity Summary $m FY2009 FY2010 FY2011 FY2012

Loan & OD facilities 1,376 1,286 1,277 1,445

Less: facilities utilized* (745) (782) (680) (740)

Available facilities 631 504 597 705

Plus: cash 178 141 171 247

Total liquidity 809 645 768 952

Bonding facilities 453 669 682 787

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 2012

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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

Financial reporting microsite

FY2012 results available online 25

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Sector outlook 2012 John Grill

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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

Hydrocarbons

Demand in developed and developing world remains strong

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 multi-regional relationships with major oil and gas companies

► Underperforming projects impact on margins

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FY2012 vs. FY2011

Aggregated revenue $5,015.1 m 24.0%

% of Group aggregated revenue 68.0% -

EBIT $586.5 m 5.8%

Margin 11.7% 2.0%

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Hydrocarbons

28 Image courtesy of Woodside

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

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Hydrocarbons

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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 F

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Hydrocarbons

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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 FY2013

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► Developing world – supporting our customers with new generation and networks capacity

► Developed world – supporting our customers in managing their existing facilities

Power

FY2012 vs. FY2011

Aggregated revenue $581.3 m 13.2%

% of Group aggregated revenue 8.0% 1.0%

EBIT $59.9 m 8.3%

Margin 10.3% 2.4%

► 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

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Power 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

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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

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Power

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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

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FY2012 vs. FY2011


% of Group aggregated revenue 12.2% 1.3%

EBIT $131.4 m 27.9%

Margin 14.7% 1.3%

► 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

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► Continue to strengthen our relationships with strategic customers

► Geographic expansion continues in developed and developing worlds

► Secured several strategic long term Improve contracts

Continue to strengthen our relationships with strategic customers

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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

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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

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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 FY2013

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FY2012 vs. FY2011


% 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

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Leveraged our Australian resource infrastructure capability into Latin America and Africa

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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

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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

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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 FY2013

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Summary

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► 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

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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.”

Group outlook

August 2012

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Full year results 2012

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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

Contractual acronyms

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Segment margins

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FY2012 Hydrocarbons Power Minerals, Metals & Chemicals


TOTAL

Sales to external customers 4,728.7 524.1 892.5 840.3 6,985.6

Procurement services revenue at margin 285.8 55.2 1.2 30.5 372.7

Other Income 0.6 2.0 1.7 0.0 4.3

Total 5,015.1 581.3 895.4 870.8 7,362.6 Segment result 586.5 59.9 131.4 115.3 893.1 Segment margin 11.7% 10.3% 14.7% 13.2% 12.1%

FY2011* Hydrocarbons Power Minerals, Metals & Chemicals


TOTAL



Other Income 1.5 2.6 0.6 1.6 6.3


H1 FY2012 Hydrocarbons Power Minerals, Metals & Chemicals


TOTAL



Other Income 0.6 1.5 0.1 0.9 3.1


* Restated segment results taking into consideration the change in allocation of global overhead costs

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FX translation impact

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Movement in Major Currencies

Currency Annualized AUD $m NPAT translation impact of 1c ∆

AUD:USD 0.7

AUD:GBP 0.6

AUD:CAD 0.3

Currency FY11 FY12 FY∆

AUD:USD 98.8 103.5 4.7

AUD:GBP 62.1 65.1 3.0

AUD:CAD 98.8 103.2 4.4

85.0

90.0

95.0

100.0

105.0

Jul-1

1

Aug-

11

Sep-

11

Oct-1

1

Nov-

11

Dec-

11

Jan-

12

Feb-

12

Mar-1

2

Apr-1

2

May-

12

Jun-

12USD GBP CAD

-20

29

-41

-32 -18

-50

-40

-30

-20

-10

0

10

20

30FY08 FY09 FY10 FY11 FY12

A$m

Group EBIT FX Impact Since FY2008

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Dividends, amortisation and tax Dividend History

FY08 FY09 FY10 FY11 FY12 Interim dividend (cps) 38.0 38.0 35.5 36.0 40.0

Franked 30% 76% 100% 100% 79%

$m total 91.9 92.2 87.0 88.6 98.3

Final dividend (cps) 47.5 55.0 40.0 50.0 51.0

Franked % 71% 100% 47% 26% 61%

$m total 114.8 133.5 98.0 122.8 125.3

Total cps 85.5 93.0 75.5 86.0 91.0

Total $m 206.7 225.7 185.0 211.4 223.6

% NPAT 60.1% 57.8% 63.6% 70.8% 64.7%

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%

27.0%

32.0%

FY08 FY09 FY10 FY11 FY12

Effective tax rate

Statutory earnings Underlying earnings

Underlying earnings excluding associates

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