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Half year results 2014 Andrew Wood

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► Earnings in line with guidance, strong cash flow ► Decline in earnings due to Australian market and

WorleyParsonsCord ► Hydrocarbons revenue flat, EBIT down ► Growth in chemicals partially offset minerals and metals

weakness ► Infrastructure revenue and EBIT down ► 40 significant contract awards ► Interim dividend of 34.0 cents per share ► Reiterate full year guidance

Overview

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► Underlying NPAT 1 of $100.7m, down 35%2

► Aggregated revenue3 of $3,793m, down 2%2, down 10%2 on constant currency basis

► Operating cash flow up 84% to $230m

► Gearing ratio remains strong at 25%, lower end of target range

Financial snapshot

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1 The underlying result for HY14 excludes the net fair value gain on acquisition of associates of $11.4m 2 Versus previous corresponding period 3 Refer to slide 31 in the Supplementary slides for the definition of Aggregated Revenue

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Performance remains good ► Total Recordable Case

Frequency Rate (TRCFR) for HY14 was 0.12 (FY13: 0.13)

We continue a number of programs across the Group including: Board and Executive

Committee structured HSE site visit program

Road safety program Optimising our approach to

safety in construction and contractor management

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Significant awards

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Hydrocarbons awards • Shell – Unconventional Oil

and Gas Global Enterprise Framework Agreement, global

• Kuwait Oil Company– 5 year contract for supply of program management services, Kuwait

Minerals, Metals & Chemicals awards • Invista – EPCM services for

hexamethylene diamine (HMD) project in the Shanghai Chemical Industrial Park in China, China

• Andes Iron SpA – feasibility study for Dominga project, Chile

Infrastructure awards • Consumers Energy – Karn units 1 and 2 SDA

and O&M services, US • Arriyadh Development Authority– Consultancy

services to execute Metro Development Strategy for Arriyadh (MEDSTAR), Saudi Arabia

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WorleyParsons’ performance continues to be underpinned by our growing long term contract base 19 New Improve contracts awarded

More than 290 Improve contracts globally

16 global/multi-region contracts

Improve contracts

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Strength in diversification

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37,500 people

166 offices

43 countries

2.9m workshare hours

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Half year results 2014 Simon Holt

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Financial Profile

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HY14 HY13 vs. HY13

Aggregated revenue1 ($m) 3,793 3,879 (2)%

Underlying EBIT ($m) 178 252 (29)%

Underlying EBIT margin 4.7% 6.5% (1.8)%

Underlying Net Profit After Tax ($m) 101 155 (35)%

Underlying NPAT margin 2.7% 4.0% (1.3)%

Basic EPS (cps) 40.8 63.0 (35)%

Operating cash flow 230 125 84%

Interim dividend (cps) 34.0 41.5 (18.1%)

1 Refer to slide 31 of the Supplementary slides for the definition of Aggregated revenue

Strong operating cash flow

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Aggregated revenue by type Professional services down, construction revenue grows

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$m HY14 HY13 vs. HY13

Aggregated revenue 3,793 3,879 (2)%

Professional services 3,167 3,267 (3)%

Construction and fabrication 482 444 9%

Procurement revenue at margin 139 154 (10)%

Other income 4 14 (68)%

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Aggregated revenue by region

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962

322

613 444

290 206

297 100

644 688

257 767 317

513

163 329

204

557

HY2013 ($m)

HY2014 ($m)

25%

18%

8% 7%

7%

14%

5% 4%

8% 9%

3% 5%

17% 15%

% of total aggregated revenue

16%

20%

8%

11%

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Diversification in earnings

► Top 10 customers deliver 34% of the gross margin

► Top 10 projects deliver 15% of the gross margin

► Top 10 locations deliver 65% of the operating EBIT

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Underlying Operating EBIT

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151

51 59 51 41

9 31

-3

58

87

47 68

5

61

1 25

12

66

HY2013 ($m)

HY2014 ($m)

% EBIT margin

15.7%

12.7%

15.8% 18.4%

9.7% 8.9%

11.5%

1.7%

14.2%

11.9%

4.3% 0.6%

10.6% 7.7%

(3.3)% 5.7%

9.0% 11.9%

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CSG segment EBIT

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258

51 77 62

448

251

16 69 37

373

Hydrocarbons(ex construction &

fabrication)

Construction &fabrication

Minerals, Metals &Chemicals

Infrastructure Total

HY2013 ($m)HY2014 ($m)

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Underlying NPAT ($m)

15

155.1

100.7

(48.5)

(46.2)

(13.6) (6.2) 2.4

12.4 28.4 4.1

12.8

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EBIT result by segment ($m)

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448.1 373.0

(29.3) (35.2)

(11.2) (27.7) 28.3

HY13 Hydrocarbons(excl.

construction &fabrication)

Construction &fabrication

Minerals,Metals &

Chemicals

Infrastructure FX impact HY14

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Margin profile

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8.2% 6.6% 7.3% 6.5% 4.7%

9.0% 9.4% 7.1% 7.3%

8.6% 8.0%

7.2% 6.9%

FY10 FY11 FY12 FY13 FY14

EBIT % ► EBIT margin drop of 1.8%

► Primarily due to Australia, Cord, restructuring costs and one off TWPS benefit from prior year

► Hydrocarbons margins flat excluding the impact of construction and fabrication

► Construction and fabrication margin impacted by Cord

11.2% 11.2% 11.5%

3.4%

13.2% 12.1% 11.4% 7.5%

14.0%

4.3%

12.9% 9.2%

EBIT margin by CSG %

Construction & fabrication

Minerals, Metals & Chemicals

Infrastructure

12.6%

8.1%

13.0% 10.4%

Hydrocarbons (ex construction

& fabrication)

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Hydrocarbons

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HY14 HY13 Aggregated revenue $m 2,731.1 2,750.0

Professional services $m 2,151.0 2,181.3

Construction and fabrication $m 482.3 444.4

Procurement revenue with margin $m 96.8 123.3

Segment result $m 267.0 309.0

Segment margin % 9.8% 11.2%

► Revenue flat

► Segment margin down 1.4 % overall

► EBIT flat net of impact of Cord

► Rosenberg WorleyParsons increased Europe EBIT

309.0 267.0

(14.7) (8.7) (8.4) (46.4) (0.9) (7.2) (0.1) 19.6 2.3

22.5

HY13 ANZ ASCH CAN(excl.Cord)

Cord EUR LAM MENAI SSA USAC FXimpact

HY14

Operational EBIT by sector HY14 vs HY13 $m

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HY14 HY13 Aggregated revenue $m 571.1 583.2

Professional services $m 556.4 580.4




► Downturn in ANZ due to project cancellations and completions

► SSA EBIT growth driven by TWP acquisition

► Canada EBIT growth driven by Iron Ore and Fertilizers

► Weakness in demand in LAM

76.8 69.2

(24.5) (1.4) (5.9) (2.2) 2.5

9.5 9.9 0.9 3.6

HY13 ANZ ASCH CAN EUR LAM MENAI SSA USAC FXimpact

HY14


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Infrastructure

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HY14 HY13 Aggregated revenue $m 490.4 545.5

Professional services $m 459.6 505.3


Other income $m 3.3 12.5



► General decline in ANZ

► $10.7M TWPS one off in HY13

► Downturn in Bulgaria Nuclear project

► CAN private sector demand increasing

62.3

36.8

(25.2)

(3.1) (4.5) (1.3) (0.2) 3.7 0.4 2.5 2.2

HY13 ANZ ASCH CAN EUR LAM MENAI SSA USAC FXimpact

HY14


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Cash flow

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$m HY14 HY13 vs. HY13

EBIT 178 252 (74)

Depreciation and amortization 54 51 3

Interest and tax paid (54) (89) 35

Working capital/other 52 (89) 141

Net cash inflow from operating activities 230 125 105

Strong cash flow generation

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Gearing metrics

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HY14 FY13

Gearing ratio % 25% 25%

Facility utilisation % 54% 55%

Average cost of debt % 5.5% 5.5%

Average maturity (years) 4.2 3.8

Interest cover1 (times) 8.6x 10.6x

Net debt $m 741 742

Net Debt/EBITDA1 (times) 1.3x 1.2x

1 Rolling 12 month calculation

Gearing at lower end of target range

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Liquidity Financial capacity to support growth

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Liquidity summary $m HY14 FY13 vs. FY13

Loan & OD facilities 2,069 1,912 8%

Less: facilities utilized (1,116) (1,062) 5%

Available facilities 953 850 12%

Plus: cash 375 320 17%

Total liquidity 1,328 1,170 14%

Bonding facilities 940 862 9%

Bonding facility utilization 69% 71% (2%)

0

200

400

600

FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23

Debt facility utilization profile $m

Utilized Not utilized

► US$520m US Bank Syndication refinance completed during the period

► Increase in average maturity from 3.8 years as at 30 June 2013 to 4.2 years

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Segment performance Andrew Wood

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Hydrocarbons ► Australian market continued to

contract Canada impacted by Cord and

softening activity in oil sands Improved EBIT for US business Timing of major project starts is

difficult to predict Opportunities in offshore -

deepwater in US, Africa and in Norwegian North Sea

UCOG opportunities in US, Canada, China and Australia

LNG opportunities in Canada, Australia and Africa

► Market outlook for Improve is robust, matching our strategic focus on this business line

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Ma’aden First Ore Feed to Mill

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Minerals, Metals & Chemicals Increased geographic

diversification Minerals and metals short

term market remains flat Growth in Canada and the

US largely through chemicals Strengthened position in

Africa LAM impacted by reduction in

copper related projects. Minerals and metals

customers currently focused on brownfields and sustaining capital work

Chemicals expenditure increasing in US

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Santiago Metro

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Infrastructure Merged Infrastructure &

Environment and Power sectors

► Cancellation of a nuclear project in Bulgaria

► Positive outlook in North America for Unconventional Oil & Gas related infrastructure

► Resource related developments in Western Canada and East Africa

► New build opportunities in emerging markets for power generation

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Summary

► First half earnings in line with guidance

► Improved earnings anticipated in second half to deliver full year

► Overhead reduction program implemented

► Business performance solid in most regions

► Balance sheet fundamentals remain strong

► In-depth review of business underway

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Commenting on the outlook for the WorleyParsons Group, Mr Andrew Wood said: “On current indications the Company expects to report underlying NPAT for FY2014 in line with guidance given in November 2013. Notwithstanding the impacts weaker than expected market conditions are having on our performance, the cost reduction program we implemented together with the momentum from recent contract awards should position us for medium term growth. The diversity of our business in terms of its geography, industry and service offering remains a fundamental strength.”

Group outlook Confirming guidance for FY14

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Supplementary information Half year results 2014

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Reconciliation Aggregated revenue*

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$m HY14 HY13

Revenue and other income 4,822.9 4,413.4

Procurement services at nil margin (1,306.4) (814.4)

Share of revenue from associates 289.5 283.9

Net gain on revaluation of investments (11.4) -

Interest income (2.0) (4.2)

Aggregated revenue* 3,792.6 3,878.7

*Aggregated revenue is defined as statutory revenue and other income plus share of revenue from associates, less procurement revenue at nil margin, interest income and net gain on revaluation of investments previously accounted for as equity accounted associates. The Directors of WorleyParsons Limited believe the disclosure of the share of revenue from associates provides additional information in relation to the financial performance of WorleyParsons Limited Group.

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Reconciliation Underlying* EBIT and NPAT

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$m HY14 HY13

EBIT 189.6 251.9

Net gain on revaluation of investments previously accounted for as equity accounted associates

(11.4) -

Underlying EBIT 178.2 251.9

NPAT 119.8 165.9

Non-controlling interests (7.7) (10.8)

Net gain on revaluation of investments previously accounted for as equity accounted associates

(11.4) -

Underlying NPAT 100.7 155.1

* The underlying result for HY14 excludes the net fair value gain on acquisition of associates of $11.4m

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Dividend history Interim dividend of 34.0 cents per share (HY13: 41.5 cps)

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FY10 FY11 FY12 FY13 HY14

Interim dividend (cps) 35.5 36.0 40.0 41.5 34.0

Franked % 100% 100% 79% 100% 25%

$m total 87.0 88.6 98.3 102.4 83.8

Final dividend (cps) 40.0 50.0 51.0 51.0

Franked % 47% 26% 61% 0%

$m total 98.0 122.8 125.3 125.7

Total (cps) 75.5 86.0 91.0 92.5

$m total 185.0 211.4 223.6 228.1

Payout ratio % 63.6% 70.8% 64.7% 70.8% 83.2% For

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FX translation impact

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

AUD:USD 0.3AUD:GBP 0.4AUD:CAD 0.2

Currency HY14 FY13 HY∆

AUD:USD 92.3 102.7 -10.1%AUD:GBP 58.3 65.5 -11.0%AUD:CAD 96.3 103.1 -6.6%

-41 -32

-18

4 20

-50

-40

-30

-20

-10

0

10

20

30FY10 FY11 FY12 FY13 HY14

A$m

Group EBIT FX impact since FY10

80.0

85.0

90.0

95.0

100.0

105.0

110.0

Jan-

13

Feb-

13

Mar-1

3

Apr-1

3

May-

13

Jun-

13

Jul-1

3

Aug-

13

Sep-

13

Oct-1

3

Nov-

13

Dec-

13

Movement in major currencies

USD GBP CAD

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Key project awards VNIPIgazdobycha - engineering

contractor for Vladivostok LNG, Russia

MacKay Operating Corporation - EPC for MacKay River commercial project field facility phase 1, Canada

Sasol - IPMT for integrated GTL and ethane cracker complex, US

BP - Select engineering services for Sullom Voe gas sweetening project and ESP pipeline project, UK

GE Oil & Gas - supply of subsea templates for carbon dioxide injection project, Norway

Improve Awards ► Kuwait Oil Company - program

management contract, Kuwait ► EP PetroEcuador - inspection and

management of Esmeraldas refinery rehabilitation project, Ecuador

► Oil Search - Master Services Agreement 2 year extension, PNG

► Shell Refining Australia - project management and engineering services for Geelong Refinery, Australia

Hydrocarbons

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Hydrocarbons

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Key project awards Andes Iron SpA - feasibility

study for Dominga project, Chile

Invista - EPCM services for hexamethylene diamine (HMD) project in the Shanghai Chemical Industrial Park in China, China

Morobe Mining JV - owner’s engineer for Wafi-Golpu pre-feasibility study, PNG

Improve Awards ► Codelco - asset management

services, Chile

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Key project awards Corredor Do Desenvolvimento

Do Norte S.A. - project management and engineering services for Nacala rail corridor project, Mozambique

National Grid Property Holdings - management services for regeneration of former gas works, UK

Arriyadh Development Authority - consultancy services to execute Metro Development Strategy for Arriyadh (MEDSTAR), Saudi Arabia

Improve Awards ► Consumers Energy - Karn units

1 and 2 O&M services, US ► Tennessee Valley Authority -

installation of 3MW Diesel Generator at Sequoyah and Browns Ferry, US

► HOLTEC - installation of dry cask used fuel storage system, US

Infrastructure

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Contractual acronyms 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 – Engineering Services Agreement ESP – Engineering Services Provider FEED – Front End Engineering Design FEL – Front End Loading GSA – General Services Agreement GTL – Gas to Liquids I&E – Infrastructure & Environment IPMT – Integrated Project Management Team LNG – Liquefied Natural Gas MM&C – Minerals, Metals & Chemicals MSA – Master Service Agreement O&M – Operations and Maintenance PCM – Procurement and Construction Management PMC – Project Management Consultancy

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for personal use only - asx · financial snapshot . 3 . 1 . the underlying result for hy14 excludes...

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