Worley energy - Half Year Results 2019/media/Files/W/WorleyParsons-V2/... · 2020. 12. 23. · Half...

Half year results 2019

Andrew Wood, CEO

Half Year Results 2019


DisclaimerThe information in this presentation about the WorleyParsons Group and its activities is current as at 20 February 2019 and should be read in conjunction with the Company’s Appendix 4D and Interim Financial Report for the half year ended 31 December 2018. It is in summary form and is not necessarily complete. The financial information contained in the Interim Report for the half year ended 31 December 2018 has been reviewed, but not audited, by the Group's external auditors.

This presentation contains forward looking statements. These forward looking statements should not be relied upon as a representation or warranty, express or implied, as to future matters. Prospective financial information has been based on current expectations about future events and is, however, subject to risks, uncertainties, contingencies and assumptions that could cause actual results to differ materially from the expectations described in such prospective financial information. The WorleyParsons Group undertakes no obligation to update any forward looking statement to reflect events or circumstances after the date of the release of this presentation, subject to disclosure requirements applicable to the Group.

Nothing in this presentation should be construed as either an offer to sell or solicitation of an offer to buy or sell WorleyParsons Limited securities in any jurisdiction. The information in this presentation is not intended to be relied upon as advice to investors or potential investors and does not take into account your financial objectives, situation or needs. Investors should consult with their own legal, tax, business and/or financial advisors in connection with any investment decision.

No representation or warranty is made as to the accuracy, adequacy or reliability of any statements, estimates, opinions or other information contained in this presentation. To the maximum extent permitted by law, all liability and responsibility (including without limitation any liability arising from fault or negligence) for any direct or indirect loss or damage which may be suffered through use or reliance on anything contained in or omitted from this presentation is disclaimed.

This presentation may include non-IFRS financial information. The non-IFRS financial information is unaudited and has not been reviewed by the Group’s external auditors. Non-IFRS financial information should not be considered as an indication of or alternative to an IFRS measure of profitability, financial performance or liquidity.


$2,566.2mAggregated revenue +11.1% growth from PCP

$98.4mUnderlying NPAT+25.8% growth from PCP

2.1xLeverage *June 2018: 1.9x

$6.6b36 Month Backlog10% growth in 12 months

Jacobs ECR acquisitionon track

Improved financial performance▪ Double digit revenue growth▪ Improved EBIT and NPAT margins

Balance sheet de-risked▪ New USD1.3b syndicated facility agreement▪ Gearing 25.7%*, leverage 2.1x*

Backlog increased▪ 2nd consecutive year of 10% increase▪ Pace of ASX announced awards increased

Jacobs ECR acquisition on track▪ Progress towards completion in late March/April ▪ Operational performance positive

$21.0mOperating cash flowvs $44.3 in PCP

Interim dividend 12.5 cents per share

HY2019 summary

Our strategy is delivering.

* Excluding proceeds from capital raisingRefer to pages 16 & 17 for the Statutory Statement of Financial Performance and Reconciliation of statutory to underlying NPAT result


Overview

Financial results

HY2019 achievements

Operating parameters

Operational highlights

▪ Aggregated revenue growth, driven by construction services and UK IS acquisition▪ EBIT and NPAT growth, with higher margins ▪ Completed $2.9b acquisition capital raising for Jacobs ECR acquisition▪ New USD1.3b Syndicated Facility Agreement in place

▪ Staff utilization remains on target ▪ Cost out program proving sustainable▪ Delivered operating leverage▪ Increased backlog

▪ H1 ASX announced awards highest in ten years▪ UK IS acquisition integration complete. Revenue synergies flowing▪ Preparation for day one of Jacobs ECR acquisition at an advanced stage


Aggregated revenue and underlying EBITRevenue and EBIT growth

▪ Revenue and EBIT growth from construction services and full period of UK Integrated Solutions business

Half on half underlying EBIT Half on half revenue

3,107

2,166 2,3102,5662,619

2,2112,439

0.0

1,000.0

2,000.0

3,000.0

4,000.0

FY2016 FY2017 FY2018 FY2019

AUD'M H1 H2

150

118133

156153140

166

0.0

50.0

100.0

150.0

200.0

FY2016 FY2017 FY2018 FY2019

AUD'M H1 H2


Backlog growth

36 month backlog ($b)Backlog as at 31 December 2018

Approximate timing of backlog ($b)

4.75.1

6.06.4 6.6

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0

Dec-16 Dec-17 Dec-18Jun-180.3

1.6

2.4

2.3FY19

FY22

FY20

FY21

Jun-17

▪ Second consecutive year of +10% backlog growth (in addition to the contribution from UK IS)


Drag these highlighting blocks underneath key

title words/phrases Change highlighted

words to white.

7

Hydrocarbons

Power

Minerals and metals

Chemicals

▪ Increase in recent ASX announced wins providing early positions in next wave of investment

▪ Broad geographic, sector and project phase representation

2

11

83 14

161

5

9

6

10

7

15

4 12

ASX announced contract awards in FY19

Pace of awards has increased

18

1 Assiut Hydrocracking Complex Egypt 5 Lundin EPCI Norway 9 Collie Power Station O&M 14 Encana EPCM

2 SABIC EPCM Europe 6 ConocoPhillips E&C and EPC 10 BP Terminals NZ MMO 15 Newmont EPCM

3 Tidewater Pipestone EPC 7 KA-CARE Nuclear PMO 11 INEOS Styrolution EPCM 16 Chevron Chemicals Oronite EPC, China

4 Borouge 4 Complex FEED 8 NOVA Chemicals Corunna Cracker Expansion Project (Phase 3) 12 Noor Energy 1 solar power installation 17 Nexen Buzzard Phase 2 development project

13 Woodside Brownfields EPCM Extension 18 Pertamina Balikpapan Refinery

13

17


UK Integrated Solutions

Acquisition update

8


Joint venture with BP for the management & operations of seven fuel storage, handling and distribution centres, plus an associated projects & engineering management contractContract scope

Long term global relationship with BPRelationship Track record of delivering services locally in New Zealand

Provision of all management, operations and maintenance services with full responsibility for sites regulatory compliance

Work Scope Engineering, project delivery and maintenance services delivered locally

Dutyholder experienceExpertise / DifferentiatorTrack record delivering projects and O&M support services locally

UK Integrated Solutions brings... WorleyParsons NZ brings…

New Zealand – BP WorleyParsons Joint Venture

UK Integrated Solutions – example revenue synergy


Full construction services including field engineering, procurement, construction & logistics management for offshore facilities Contract Scope

Significant facilities rejuvenation capability with many IOCs Relationship

Existing relationship with major IOCs & NOCs

Project services and construction management expertise to be delivered locallyWork Scope

Construction, procurement and offshore field accommodation and logistics services

A leader in brownfield modifications with strong construction and integrated delivery systems

Expertise / Differentiator

Recognised as significant contractor in Nigeria and fully locally owned company

UK Integrated Solutions brings… WorleyParsons Nigeria JV (DeltaTek) brings …

Nigeria - Confidential IOC Client



Bringing the best of local country knowledge and experience, with the required expertise, tools and systems of a leading brownfield execution provider (UKIS) for a large offshore upgradeContract Scope

Long standing relationship in the North Sea delivering complex projects and hook-upsRelationship

Asset knowledge and connectivity to the local BP asset teams, including optimising local content

FEED for the CGLP project with the aim of de-risking the project executionWork Scope

Project services, customer interface management and preparation for execution phase

Significant brownfield and highly complex projects capability, coupled with advanced engineering systems

Expertise / Differentiator

Competent deliverer of brownfield Services working alongside the customer and assets in Baku

UK Integrated Solutions brings… AGT Local Operations brings…

AGT BP Chirag Gas Lift Project FEED (Azerbaijan, Georgia, Turkey)



Our safety performance▪ Employee Total Recordable Case Frequency Rate

(TRCFR) at December 2018 was 0.10) (June 2018: 0.12)

▪ Employee, Contractor & Subcontractor and Partner TRCFR at December 2018 was 0.14 (June 2018: 0.15)

The Group’s HSE Committee focus areas for FY2019▪ Situational awareness in the field▪ Automation of HSE systems▪ Use of predictive analytics (eg SaltGrid)▪ Climate related risks and opportunities

12

Health Safety and Environment




words to white.

Responsible business at WorleyParsonsWe have always taken a responsible and sustainable approach to our business. This year we have:▪ delivered community social impact with a network of

champions and the WorleyParsons Foundation

▪ continued our ethics program with enhanced Code of Conduct training

▪ EcoNomics™ has delivered profitable sustainability since 2007

▪ progressed our climate change program and climate change position to reduce emissions across our industry

▪ Implemented responsible business assessments for customer due diligence

▪ established our LGBTIQ+ network Pride@WorleyParsons

Active WorleyParsons Foundation projects

30+

Corporate responsibility themed activities, tracked and reported

2,500+

Carbon emissions reductions (tonnes C02-e) since 2012

48%

Volunteer hours

115,000Community contributions by operations, our people and fundraising

Senior Executives are Women

26%Board members are Women

40%

$22 Million

Ethics helpline available to all our people in 42 countries

42Code of Conduct training delivered to contractors, employees and partners

25,000+

13




words to white.

14

Chief Executive OfficerAndrew Wood

Chief Financial OfficerTom Honan

Chief Operating OfficerChris Ashton

Jacobs ECR AcquisitionNew Operating Structure

Advisian

PresidentAdrian Smith

Energy & Chemicals ServicesGroup PresidentVinayak Pai

Major Projects and Integrated SolutionsGroup PresidentKaren Sobel

Mining, Minerals & Metals ServicesPresidentAndrew Berryman

* New operating structure is DRAFT, pending authority approvals and completion of the Jacobs ECR acquisition



Tom Honan, CFO

15


Statutory statement of financial performance31 December 2018

($m)31 December 2017

($m)REVENUE AND OTHER INCOME

Professional services revenue 1,943.4 1,913.4Procurement revenue 318.6 204.2Construction and fabrication revenue 371.0 286.6Interest income 10.5 2.8Other income 2.2 2.4

Total revenue and other income 2,645.7 2,409.4EXPENSES

Professional services costs (1,787.7) (1,769.4)Procurement costs (309.9) (201.1)Construction and fabrication costs (334.2) (263.3)Global support costs (57.5) (58.0)Acquisition costs (12.2) (5.9)Other costs (4.9) (5.5)Borrowing costs (27.7) (32.3)

Total expenses (2,534.1) (2,335.5)Share of net profit of associates accounted for using the equity method 5.1 5.9

Income tax expense (29.3) (70.6)Profit after income tax expense 87.4 9.2

PROFIT AFTER INCOME TAX ATTRIBUTABLE TO MEMBERS OF WORLEYPARSONS LTD 82.4 1.4

EARNINGS BEFORE INTEREST AND TAX 133.9 109.3


1. Reduction in revenue following lower than expected arbitration award in relation to a dispute with a state owned enterprise.2. Relates to a revaluation of the value of WorleyParsons’ deferred tax assets and liabilities arising from the reduction in the US corporate tax rate from 35% to 21%. 3. The underlying NPAT result excludes the impact of acquisitions (acquisition costs, bridging facility fee, interest income and foreign exchange gain on term deposits), impact of the arbitration award, restructuring

costs, onerous lease contracts, and the related tax effect, as well as the impact of changes in US tax legislation on tax expense.

17

Reconciliation of statutory to underlying NPAT resultAdjusted for non-trading items

HY2019($m) HY2018($m)Statutory result 82.4 1.4

Add: impact of acquisitions, comprised of:Acquisition costs 12.2 5.9

Bridging facility fee 4.2 -Interest on term deposits (7.5) -FX gain on term deposits (3.4) -

Add: Impact of the arbitration award 1 8.7 -Add: Restructuring costs 0.7 5.5 Add: Onerous lease contracts - 12.2

Sub-total additions and subtractions 14.9 23.6Tax effect of Additions and Subtractions 1.1 (5.0)Additions (post-tax)

Tax from changes in US tax legislation2 - 58.2Underlying Net Profit After Tax 3 98.4 78.2


▪ Statutory and aggregated revenue increased due to professional services revenue in UKIS and construction revenue

▪ Improved underlying EBIT and NPAT and associated margins

▪ Cash flow down $23.3m

18

HY2019 key financials

1. Basic earnings per share for all presented periods were adjusted for equity raised in accordance with the accounting standards.

2. Refer to slide 56 of the Supplementary slides for the definition of Aggregated revenue.3. The underlying EBIT result excludes impact of acquisitions (acquisition costs, bridging facility costs, foreign

exchange gain on term deposits), impact of the arbitration award, restructuring costs and onerous lease contracts. The underlying NPAT result excludes these items and the related tax effect, and also interest income on term deposits and the impact on tax expense from changes in US tax legislation.

Statutory result HY2019 HY2018 vs. HY2018

Total revenue ($m) 2,645.7 2,409.4 9.8%

EBIT ($m) 133.9 109.3 22.5%

Net Profit After Tax ($m) 82.4 1.4 n/m

Basic EPS (cps)1 23.8 0.5 n/m

Interim dividend (cps) 12.5 10.0 25.0%

Operating cash flow 21.0 44.3 (52.6%)Underlying result HY2019 HY2018 vs. HY2018

Aggregated revenue2 ($m) 2,566.2 2,310.1 11.1%

Underlying EBIT3 ($m) 156.3 132.9 17.6%

Underlying EBIT margin % 6.1% 5.8% 0.3pp

Underlying Net Profit After Tax3 ($m) 98.4 78.2 25.8%

Underlying NPAT margin % 3.8% 3.4% 0.4pp

Underlying basic EPS (cps)1 28.5 27.8 2.5%

Underlying operating cash flow 24.5 70.0 (65.0%)


▪ Growth in Major Projects and Integrated Solutions (MP&IS) due to a strong performance in Norway and a full period of UK IS

▪ Increase in Services revenue driven by Canada, UAE / Qatar, and South East Asia offset by decreases in Australia West, US East, and UK

▪ Increase in Advisian result due to improvement in margins in IntecSea

1. Segment result is underlying EBIT pre Group corporate costs

19

Segment result

By business lineH1 2019 H1 2018 vs. H1 2018

Aggregated Revenue ($m) 2,566.2 2,310.1 11.1%Services 1,273.2 1,215.8 4.7%

Major Projects and Integrated Solutions (MP&IS) 1,026.9 828.0 24.0%Advisian 266.1 266.3 (0.1%)

Segment results ($m) 226.3 201.1 12.5%

Services 112.6 114.4 (1.6%)

Major Projects and Integrated Solutions (MP&IS) 97.8 75.0 30.4%Advisian 15.9 11.7 35.9%

Segment results (%) 8.8% 8.7% 0.1 ppServices 8.8% 9.4% (0.6 pp)

Major Projects and Integrated Solutions (MP&IS) 9.5% 9.1% 0.4 ppAdvisian 6.0% 4.4% 1.6 pp


Headcount growing: staff utilization on target

▪ Headcount up 3.2% to 26,910 in the period to Jan 2019

▪ Broad global growth in Services, partially offset by seasonal declines in North Sea projects

▪ Staff utilization remains on target▪ Maintained presence in 42 countries

20

Headcount

July 14

Jan 15

July 15

Jan 16

July 16

Jan 17

Growth in global headcount

78%

80%

82%

84%

86%

88%

90%

Apr-15 Jul-15 Oct-15Jan-16Apr-16 Jul-16 Oct-16Jan-17Apr-17 Jul-17 Oct-17Jan-18Apr-18 Jul-18 Oct-18Jan-19

Utilis

ation

%

Staff Utilization

Target Monthly rate

Apr-15 Sep-15 Feb-16 Jul-16 Dec-16 May-17 Oct-17 Mar-18 Aug-18 Jan-19

Growth in global headcount Total Headcount Change from Prior Month


Key operating indicatorsOperating Leverage

Operating Leverage

Reve

nue (

$)

Over

head

s ($)

HY17 FY17 HY18 FY18 HY19

Revenue Overhead

▪ Cost out program is proving sustainable with revenue growth

▪ Margins increasing (vs PCP)

▪ Business continues to be focused on achieving operating leverage with programs institutionalised:▪ Realize our future program continuing, to address revenue growth,

gross margin and cost control

▪ Sustaining Performance management embedded at the performance unit level

4.0%

4.5%

5.0%

5.5%

6.0%

6.5%

7.0%

FY15 HY16 FY16 HY17 FY17 HY18 FY18 HY19

EBIT Margin %

2.0%

3.0%

4.0%

FY15 HY16 FY16 HY17 FY17 HY18 FY18 HY19

NPAT Margin %



Capital management

22


Cash flow, net debt and balance sheetContinuing focus

400

600

800

1,000

HY16 FY16 HY17 FY17 HY18 FY18 HY19

m$ Net Debt*

*Net debt, gearing ratio and covenant leverage ratio are calculated on the debt covenant definition and exclude the impact of proceeds from capital raising.

10%

15%

20%

25%

30%

35%


Gearing Ratio* %

Gearing ratio = net debt/net debt + equity

0.5

1.0

1.5

2.0

2.5

3.0

3.5


*

-100

0

100

200

300


Free Cash Flow


Gearing metricsBalance sheet metrics

▪ Gearing at low end of target band of 25-35%▪ Statutory balance sheet impacted by proceeds of

capital raising to fund completion of Jacobs ECR transaction

▪ Average maturity of debt increased to 4.2 years with new debt facility established in February 2019

▪ One SOE moved to non-current receivables following trigger of formal dispute resolution mechanism

1. Net debt to net debt + equity (statutury definition)2. Net debt to net debt + equity (excluding the impact of equity raise)3. Loans, finance lease and overdrafts4. Available facilities plus cash5. As defined for debt covenant calculations

HY2019 FY2018

Gearing ratio1 % (71.0%) 23.0%Gearing ratio2 % 25.7% 23.0%Facility utilization3 % 27.6% 60.1%Average cost of debt % 4.5% 4.5%

Total liquidity4 4,422 951

Total liquidity, excluding impact of proceeds from capital raising 4 2,060 951 Average maturity (years) 2.2 2.6Interest cover (times)5 % 6.2x 5.8x Statutory net debt, $m (2,122) 663 Net debt excluding the impact of proceeds from capital raising, $m 784 663 Net Debt/EBITDA (times)5 Net cash 1.9xNet Debt/EBITDA (times), excluding the impact of proceeds from capital raising 2.1x 1.9x


LiquidityCore facility refinanced

▪ The refinance has been completed with improved terms compared to the previous facility agreement

▪ The Syndicated Facility Agreement (“SFA”) provides a foundation to deliver strategy through▪ Refinancing the syndicated bank debt facility which was due to mature in December 2020▪ Replacing the bridge facility and completing the funding package to purchase Jacobs ECR ▪ Improving and resetting financial covenant headroom▪ Extending debt maturity to 2024

▪ The new facility enables WorleyParsons to comfortably meet funding requirements over the 5 year period and includes a covenant package which compares favourably with previous arrangements

▪ Wells Fargo Bank, HSBC Bank and Standard Chartered Bank acted as Joint Lead Arrangers for the transaction


LiquidityCore facility refinanced

▪ Core debt facility refinanced during FY19. New facility consists of USD500 million multi-currency revolving facility and USD800 million term loans maturing in February 2024

▪ The refinance was over subscribed and includes a mix of existing and new banks

▪ Replaces the bridge loan announced in October 2018

▪ Maintained strong liquidity position and weighted average tenor increases from 2.2 years to 4.2 years -

200

400

600

800

1,000

1,200

1,400

1,600

1,800

FY19 FY20 FY21 FY22 FY23 FY24

USPP Overdraft SFA RCF SFA TLA Bilateral


Jacobs ECR – Acquisition Update

Chris Ashton, COO

27


The acquisition of Jacobs ECR drives our growth planacross all three horizons▪ Our clear focus is to merge the operations of the

two companies, deliver our strategy and achieve the cost, margin and revenue synergies


Delivering significant benefits to WorleyParsons’ shareholders

Generates material EPS accretion and returns for shareholders1

Creates a pre-eminent global provider of professional project and asset services in resources and energy2

Provides global sector leadership across Hydrocarbons, Chemicals and Minerals & Metals3

Delivers enhanced earnings diversification and resilience4

Brings significant value upside through cost and revenue synergies5

29

In combining two complementary organisations, the transaction:


Global sector leadership across Hydrocarbons, Chemicals and Minerals & Metals

Jacobs ECR

#9

#8

#7

#6

#5

#4

WorleyParsons

#2

MergeCo

#10

WorleyParsons

#8

#7

#6

#5

#4

Jacobs ECR

#2

MergeCo

30

ENR Hydrocarbons global design rankings1(upstream only)

ENR Chemicals global design rankings1(includes Petrochemicals & Refining)

ENR Metals & Mining sector global design rankings1

#10

WorleyParsons

Jacobs ECR

#7

#6

#5

#4

#3

MergeCo

#1

Notes:1. ENR Global Sourcebook 2018. Design firms (excluding construction) ranked by revenue estimate (international and domestic); adjustments applied to consider Global revenue by sector

where only International revenue was provided; Hydrocarbons excludes downstream petrochemicals & refining revenue; Chemicals includes chemicals (non petroleum), petrochemicals & refining revenue.


Jacobs ECR acquisition progress - Summary

Synergy Realization

Regulatory approvals

Separation readiness

Transition planning

Activities Progress Achievements• US, Canada, EU received• Pending RSA competition approvals and CFIUS

• Jacobs working towards meeting their commitments for separation readiness prior to closing

• Joint transition team - all tools and processes fully operational

• key deliverables ahead of day 1 close all on track

• Cost synergies validated• Implementation planning underway and on track

Culture & People • New operating model and selection of key leadership well advanced

Cost

Margin and revenue

• Margin and revenue synergies validated• Implementation planning underway and on track

ECR performance • Jacobs ECR has delivered solid Q4CY18 operating performance including increased earnings and sales




words to white.

Transformation

Transition

Separation

The transition journey to a new company

32

2018 2019 2020Day 1


IT▪ License scale discount, management and support rationalization,

infrastructure rationalization, vendor support rationalization▪ Consolidation of functional overhead

Property ▪ Relocate employees to underutilised offices and higher density greenfield offices, and sub-lease excess space

G&A ▪ Functional overhead consolidation – management, admin and support functions

Indirect Procurement ▪ Leverage scale on 3

rd party support services

Cost synergy Implementation

costs▪ One-off implementation costs of approximately A$160m▪ Primarily incurred within the first 12 months following completion

33

$130m cost synergies expected to deliver benefits within 2 years

IT Property G&A Indirectprocurement

Total costsynergies

Estimated A$130m p.a. cost synergies

within 2 yearsCost synergies

Significant value upside through cost synergies


Example Revenue Synergy opportunities

34

Complete offshore offering in the Gulf

of Mexico

Onshore upstream in

Alaska

Untapping the UCOG market in

the Permian

Full delivery and operations service offering in Oman

+

Bringing together Jacobs ECR specialist offerings including floating topsides and construction capability with WorleyParsons capabilities in subsea and hook-up and commissioning

capability to bring a complete offshore delivery offering in the Gulf of Mexico

Connecting Jacobs ECR comprehensive operations EPC and modularisation delivery capability with WorleyParsons local EPCM capability and Arctic project experience to

deliver a service offering capable of delivering projects to the Alaskan market

Utilising both companies long term in country presence and joining the in-country EPCM large project delivery capability of Jacobs ECR with WorleyParsons Engineering &

maintenance, modifications and operations track record to provide a full service offering to upstream, midstream and downstream customers in Oman

Combining the world class industrial water capability of Jacobs ECR with WorleyParsons heritage in delivering large diameter pipelines and deep resource infrastructure capabilities

to provide a unique delivery solution to the shale gas market in the Permian basin

Hydrocarbons (upstream and midstream)

Revenue Synergies


Downstream and Chemicals

Full project delivery offering in

Asia and Middle East

China + India execution

powerhouse

Full brownfield service offering

World scale Advisory solutions

+

Combining the extensive front-end and FEED capability of Jacobs ECR with WorleyParsons world class PMC capability to service proposed large scale integrated refining and petrochemicals projects in Asia and the Middle East from project conception to delivery

Joining Jacobs ECR market leading downstream capability in India with WorleyParsons China Specialty Chemicals Global Centre of Excellence to create an unrivalled execution solution scale and capability across the entire downstream market

Combining Jacobs ECR comprehensive technical consulting service offering with WorleyParsons Advisian diverse advisory offering as well as both organisations digital capabilities to provide a market leading front end concept and advisory service

Leveraging Jacobs ECR direct hire EPC project delivery capability and WorleyParsons strong track record in servicing the brownfields market to provide an flexible delivery solution on site. Immediate focus areas include the United States Gulf Coast

Revenue Synergies



Mining, Minerals and Metals

Revenue Synergies

Complete deep underground

mining offering

Full brownfields and sustaining capital service

offering

Downstream Smelting and refining in the

Americas

Delivery across the entire lithium

value chain

+

Combining Jacobs ECR’s strong capability in underground material handling and mineral processing with WorleyParsons comprehensive experience in mine planning and mine development as well as specialist shaft sinking capability to form a complete global mine life extension offering (key markets include gold and copper)

Building on Jacobs ECR’s strong relationships with global miners across multiple commodities and combining that with WorleyParsons MMO and brownfield processes and capability to target key sustaining capital markets

Leveraging Jacobs ECR strong mining presence in the Americas and their significant minerals processing expertise with WorleyParsons global smelting and refining capability and strong local front-end capability to service operations across both North and South America

Joining Jacobs ECR’s world class downstream capability including the Chemetics offering with WorleyParsons extensive track record in delivering front-end Lithium studies and modelling capabilityto service the entire value chain in a growing lithium market (key regional focus will be the Americas)



Sector Update

37


Global Energy TransitionElectrification to accelerate

-600

-300

0

300

600

900

1200

1500

Advanced economies

Developing economies

Advanced economies


Advanced economies


Renewables & nuclear Gas OilRe

new

able

s

Nuclear

Other

Power

Industry Cars

Petro-chemical

Other

Mtoe

Source: IEA, World Energy Outlook 2018

▪ Energy mix transformation continues to accelerate towards electrification

▪ Global power demand to rise 60%

▪ Renewables (primarily solar and wind) and gas the growth energy sources

▪ Oil consumption continues to increase

Change in global energy demand, 2017-2040


Despite the volatility in the market due to geopolitical uncertainties, customer earnings and spending continue to grow▪ Upstream: Investments are predicted to grow ~10%

in FY20 on the back of emerging supply gap

▪ Natural Gas: Economic & environmental drivers boost transition to gas, 2019 a record year for LNG

▪ IMO 2020: requires a shift in refining industry

▪ Shale Revolution: Growth in Permian, continued production growth

▪ Digital Transformation: Improved operational efficiency for a more sustainable market

39

HydrocarbonsImproving Market Outlook

Number of project approvals by year

Source: Rystad Energy, Upstream Trends Report, Dec 2018

(23%)

4% 8% 4% 5%

(30%)

(20%)

(10%)

0%

10%

2016 2017 2018 2019 2020

Select Oil & Gas majors – global capex YoY growth (%)

Source: FactSet as at 1 February 2019. - Broker consensus capex estimates for Anadarko Petroleum, BP, Canadian Natural Resources, Chevron, China Petroleum & Chemical, CNOOC, ConocoPhillips, Devon Energy, Eni, EOG Resources, ExxonMobil, Gazprom, OccidentalPetroleum, Oil & Natural Gas Corp, PetroChina, Repsol, Rosneft, Royal Dutch Shell, Statoil, Suncor Energy, Surgutneftegas and Total.

0

50

100

150

200

250

300

350

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Offshore Onshore (ex shale)


Chemicals & Downstream - earnings diversification and resilience

40

Global chemicals capital expenditure

Source: Oxford Economics (2018)

A step change in exposure to the stable and expanding chemicals and downstream markets

▪ Chemicals capital expenditure displays limited cyclicality: The industry is underpinned by continued demand growth for manufactured end-user products

▪ Supported by global unstoppable trends:▪ population growth ▪ increasing urbanization ▪ globalization▪ food security

39%

20%

23%

7%11%

62%13%

6%4%

15%

MergeCo pro formaWorleyParsons pre-acquisition

FY18 revenueUpstream Downstream Chemicals M&M Infrastructure

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Source: IHS (July 2018)

Global refining capital expenditure

$-$-


▪ Recent increase in large project FIDs▪ Iron ore: new Australian mines to replace declining

production from existing facilities▪ Copper: structural supply deficit emerging from

2020▪ Phosphates: MENA focus▪ Gold: increased activity and market consolidation

Source: Platts; Worldsteel; BHP Analysis.(Emerging Asia includes India, ASEAN and other south Asian countries.), WorleyParsons

Minerals & MetalsReturn to investment

Global copper market balance (Kt)

Global steel demand growth

Surplus

Deficit

Source: Newmont, Investor Presentation, May 2018

41

$-

$10

$20

$30

$40

$50

$60

2017 2018 2019

Billio

ns ($

AUD)

Global Mining capital expendituretop 15 global miners (by market capitalization)


Outlook

Andrew Wood, CEO

42


▪ Revenue* up 11.1%, EBIT* up 17.6%, NPAT* up 25.8%▪ Operating leverage continues▪ Backlog increased▪ Increase in pace of ASX announced awards has continued into FY2019▪ Integration of UK IS acquisition exceeding expectations ▪ On track for expected completion of Jacobs ECR acquisition in late

March/April▪ Completed $2.9b capital raising▪ Refinanced core debt facility▪ Business well positioned to capture future market upside as industry

leader in Hydrocarbons, Chemicals and Minerals & Metals* Underlying results 43

Concluding remarksProgress in HY2019


✓ 2019 Chemicals capex continuing long term growth trend

✓ 2019 Hydrocarbons capex >35% below 2013 peaks … and below longer term market low point

✓ 2019 Minerals & Metals capex >50% below 2013 peaks … and below longer term market low point

44Notes:1. Average broker consensus capex estimates for Anadarko Petroleum, BP, Canadian Natural Resources, Chevron, China Petroleum & Chemical, CNOOC, ConocoPhillips, Devon Energy, Eni,

EOG Resources, ExxonMobil, Gazprom, Occidental Petroleum, Oil & Natural Gas Corp, PetroChina, Repsol, Rosneft, Royal Dutch Shell, Statoil, Suncor Energy, Surgutneftegas and Total2. Average broker consensus capex estimates for ALROSA, Anglo American, BHP Billiton, Fortescue Metals, Freeport-McMoRan, Fresnillo, Glencore, Norilsk Nickel, Norsk Hydro, Rio Tinto,

South32, Southern Copper Corporation and Vale

Chemicals annual global capex

Minerals & Metals annual global capex2

Highlights

Hydrocarbons annual global capex1

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Source: Factset (2019) Source: Factset (2019)

Source: Oxford Economics (2018)

Jacobs ECR delivers enhanced earnings diversification and resilience… with all sectors indicating medium term growth

$- $-

$-

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020


Driven by continued improvement in market conditions, our resources and energy customers are increasing early phase activity for the next cycle of investment. This is reflected in the recent level of contract awards and our growing backlog. By maintaining our focus and growing our position in the resources and energy markets we expect to deliver improved earnings in FY2019, before including the contribution of the Jacobs ECR acquisition.Our focus on costs will continue so that operating leverage is delivered as the business grows. We expect to continue to improve our balance sheet metrics in FY2019 (excluding the impact of the capital raising).We expect earnings to be weighted to the second half, before including the contribution of the Jacobs ECR acquisition. Completion of the acquisition is currently planned for late March/April this year.

45

Group outlook



Q&A

46



Supplementary information

47


▪ Revenue growth in APAC supported by NZ, SEA and China, offset by Australia West. The Operational EBIT decrease is driven by Australia West offset with improvements in South East Asia.

▪ Increase in EMEA due to growth in Norway, a full period of UK IS, and strong performances in the UAE & Qatar, Saudi Arabia, Bulgaria and Central Asia offset by decreases in UK, Oman and Kuwait.

▪ AM decreases due to Cord project completions FY18 and US East, offset by increases in Canada West, US West and Latin America.

48

Segment resultBy regionBy region

H1 2019 H1 2018 vs. H1 2018

Aggregated Revenue ($m) 2,566.2 2,310.1 11.1%APAC 584.3 558.7 4.6%EMEA 1,192.9 938.4 27.1%AM 789.0 813.0 (3.0%)Operational EBIT ($m) 226.3 201.1 12.5%APAC 47.6 49.6 (4.0%)EMEA 117.7 78.9 49.2%AM 61.0 72.6 (16.0%)Operational EBIT (%) 8.8% 8.7% 0.1 ppAPAC 8.1% 8.9% (0.8 pp)EMEA 9.9% 8.4% 1.5 ppAM 7.7% 8.9% (1.2 pp)


▪ Hydrocarbons revenue increase from UK IS, Norway, and Canada West partially offset by lower revenues in the US, Cord and parts of the Middle East

▪ M&M revenue growth from Major Projects in Australia

▪ Chemicals growth due to EPC projects in China and growth from the recently acquired business in Germany

▪ Infrastructure revenue and EBIT lower due to a reduction in power revenues in the US and Saudi Arabia

¹ Professional Services includes procurement revenue at margin and other income 49

Segment result

By sectorH1 2019 H1 2018 vs. H1 2018

Aggregated Revenue ($m) 2,566.2 2,310.1 11.1%Hydrocarbons 1,949.7 1,725.7 13.0%

Professional Services ¹ 1,578.7 1,439.1 9.7%Construction & Fabrication 371.0 286.6 29.4%

Minerals, Metals & Chemicals 265.3 214.1 23.9%Infrastructure 351.2 370.3 (5.2%)

Operational EBIT ($m) 226.3 201.1 12.5%Hydrocarbons 183.6 158.0 16.2%

Professional Services 146.8 132.7 10.6%Construction & Fabrication 36.8 25.3 45.5%

Minerals, Metals & Chemicals 18.9 16.3 16.0%Infrastructure 23.8 26.8 (11.2%)

Operational EBIT (%) 8.8% 8.7% 0.1 ppHydrocarbons 9.4% 9.2% 0.2 pp

Professional Services 9.3% 9.2% 0.1 ppConstruction & Fabrication 9.9% 8.8% 1.1 pp

Minerals, Metals & Chemicals 7.1% 7.6% (0.5 pp)Infrastructure 6.8% 7.2% (0.4 pp)


Global operations and employee numbers

115offices 42

countries

26,910people


1.3

2.4

2.9

51

Backlog increased

0.6

1.1

4.9

Backlog by regionas at 31 December 2018

Backlog by sectoras at 31 December 2018

Australia, Pacific, Asia, China (APAC)

Americas (AM)

Europe, Middle East, Africa (EMEA)

Minerals, Metals & Chemicals

Infrastructure

Hydrocarbons


Backlog increased

6.4 6.6

0.40.10.7

-

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

A$'B

6.4 6.6

0.10.2 0.1

-

1.0

2.0

3.0

4.0

5.0

6.0

7.0

A$'B

Backlog by regionas at 31 December 2018

Backlog by sectoras at 31 December 2018


Underlying earnings profile

180.8 150.2 117.9 132.9 156.3

237.2152.5 139.9 165.9

418.0

302.7257.8 298.8

FY2015 FY2016 FY2017 FY2018 FY2019

Group Underlying EBIT $mH2

H1

104.3 73.9 57.1 78.2 98.4

138.8 79.2 66.1

93.2

243.1

153.1 123.2

171.4

FY2015 FY2016 FY2017 FY2018 FY2019

Group Underlying NPAT $m

H2

H1


Margin profile

5.0% 4.8% 5.4%5.8% 6.1%6.5%

5.8% 6.3%6.8%

5.8% 5.3% 5.9%6.3%

FY2015 FY2016 (Restated) FY2017 FY2018 FY2019

Operational Underlying EBIT %

H1

H2

Total

2.9%2.4% 2.6%

3.4%3.8%3.8%

3.0% 3.0%3.8%

3.4%2.7% 2.8%

3.6%

FY2015 FY2016 (Restated) FY2017 FY2018 FY2019

Operational Underlying NPAT %

H1

H2

Total


Revenue split

ANZ, 17%

Asia, 6%

USA & LAM, 15%

Canada, 16%

Europe, 29%

Middle East & Africa, 16%

Contribution to aggregated revenue (%)

76%

10%

14%

Sector aggregated revenue (%)

Hydrocarbons

Minerals, Metals &Chemicals

Infrastructure


1- Reduction in revenue following lower than expected arbitration award in relation to a dispute with a state owned enterprise.

*Aggregated revenue is defined as statutory revenue and other income plus share of revenue from associates, less procurement revenue at nil margin, pass-through revenue at nil-margin and interest income and the impact of the arbitration award. 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.

56

Revenue reconciliation

HY2019 ($m) HY2018($m) vs HY2018Revenue and other income 2,645.7 2,409.4 9.8%

Plus: Impact of the arbitration award1 8.7 - n/mLess: Procurement revenue at nil margin (136.9) (43.7) 213.3%Less: Pass through revenue at nil margin (36.9) (138.8) (73.4%)Plus: Share of revenue from associates 96.1 86.0 11.7%Less: Interest income (10.5) (2.8) 275.0%Less: Net gain on revaluation of investments previously accounted for as joint operations - - #DIV/0!

Aggregated revenue* 2,566.2 2,310.1 11.1%Professional services 2,011.3 1,860.6 8.1%Construction and fabrication 371.0 286.6 29.4%Procurement revenue at margin 181.7 160.5 13.2%Other income 2.2 2.4 (8.3%)


1- Reduction in revenue following lower than expected arbitration award in relation to a dispute with a state owned enterprise.

* The underlying EBIT result excludes the impact of acquisitions (acquisition costs, bridging facility costs and FX on term deposits), impact of the arbitration award, restructuring costs and onerous lease contracts.

57

EBIT reconciliation

HY2019 ($m) HY2018 ($m)

EBIT 133.9 109.3

Add: impact of acquisitions, comprised of:

Acquisition costs 12.2 5.9

Bridging facility fee 4.2 -

FX gain on term deposit (3.4) -

Add: impact of the arbitration award1 8.7

Add: restructuring costs 0.7 5.5

Add: onerous lease contracts - 12.2

Underlying EBIT* 156.3 132.9


Cash flow

HY2019 ($m) HY2018 ($m)

EBIT 133.9 109.3

Add: Depreciation, amortization 31.8 36.6

Less: Interest and tax paid (23.9) (40.2)

Less: Working capital/other (120.8) (61.4)

Net cash inflow from operating activities 21.0 44.3

Non-recurring costs paid less interest income received 3.5 25.7

Underlying operating cash flow 24.5 70.0

Net procurement cash outflow (3.5) 14.4

Underlying operating cash flow net of procurement cash flows 21.0 84.4

▪ Excludes impact of proceeds from capital raising


Liquidity and debt maturity

Notes:1 – Loan, finance lease and overdraft facilities (inclusive of the bridge facility) as at 31 December 2018.*2 – Facilities utilized assume to exclude the impact of funds received from equity raise.3 – Cash as at 31 December 2018 excluding cash funds from equity raise.4 - Loan, finance lease and overdraft facilities include the limits for the new Syndicated facility completed in February 2019 that replaces the Bridging facility that was in place as at 31 December 2018. The balance is a looking forward estimate is based on the exchange rates as at 31 December 2018.5 – Facilities utilized assume the proforma debt after completion of Jacobs ECR. The amount is a looking forward estimate and is based on the exchange rates as at 31 December 2018.

Liquidity Summary $m HY2019 FY2018 Change

Liquidity (excluding impact of equity raise in HY2019)Loan, finance lease & overdraft facilities1 2,373 1,677 41.5%Less: facilities utilized2 (1,178) (1,008) 16.9% Available facilities 1,195 669 78.6%Plus: cash3 343 282 21.6%Total liquidity 1,538 951 61.7%

Proforma liquidity after the Jacobs ECR deal completionLoan, finance lease & overdraft facilities4 2,596 1,677 54.8%Less: facilities utilized5 (1,788) (1,008) 77.4% Available facilities 808 669 20.8%

Plus: cash3 343 282 21.6%Total liquidity 1,151 951 21.0%

BondingBonding facilities 1,202 1,221 (1.6%)Bonding facility utilization, % 42% 43% (1pp)


Foreign exchange translation impact

Currency AUD $m NPAT translation impact of 1c ∆

AUD:USD (0.61)

AUD:GBP 0.18

AUD:CAD 0.32

Currency Average exchangerate movementSpot exchange rate

movement

BRL 12.7% (4.3%) CAD (3.4%) (1.8%)CNY (4.1%) (1.1%)EUR (5.2%) (3.6%)GBP (5.6%) (1.3%)NOK (3.8%) 2.4%SGD (6.1%) 4.3%USD (7.1%) (4.5%) KZT 1.1% 5.7%

Currency HY2019 HY2018 change

AUD:USD 72.4 77.9 (7.1%)

AUD:GBP 55.9 59.2 (5.6%)

AUD:CAD 95.1 98.4 (3.4%)

Movement in major currencies against AUD (indexed)

80

85

90

95

100

105

110

115

AUDUSD AUDGBP AUDCAD


Foreign exchange

11 12

(8.3)

0.1

(0.8)

-10

-5

0

5

10

15

FY15 FY16 FY17 FY18 FY19

Group EBIT FX translation

0.9 0.2 0.2 0.3 0.6

(0.4)

0.7 0.10.2 0.7

(2.2)

(0.1)

0.3

(3.2)

0.9

-3.5

-3.0

-2.5

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

CAD CNY EUR GBP KWD KZT NOK NZD QAR US Pegged USD ZAR BGN TRY OTHER

A $

m

Impact total EBIT


AcronymsADNOC - Abu Dhabi National Oil CompanyAPAC – Australia, Pacific, Asia, ChinaAM – AmericasASX - Australian Securities ExchangeCPS – Cents Per Share C02e - Carbon dioxide equivalent DSO – Day Sales OutstandingEBIT – Earnings Before Interest and TaxEBITDA – Earnings Before Interest and Tax, Depreciation and Amortization EMEA – Europe, Middle East and Africa EPC - Engineering, Procurement & Construction EPCIC – Engineering, Procurement, Construction, Installation & CommissioningEPFC - Engineering, Procurement, Fabrication & Construction EPS – Earnings Per Share FEED – Front end engineering and design FID – Final Investment DecisionFX – Foreign Exchange

FY – Financial Year HSE – Health Safety and Environment HY – Half YearIFRS - International Financial Reporting Standards IS – Integrated Solutions LNG – Liquefied Natural Gas MENA – Middle East & North Africa MP&IS – Major Projects and Integrated SolutionsMMO – Maintenance, Modifications and Operations NPAT – Net Profit After Tax PMC - Project Management Consultant/Consultancy QGC – Queensland Gas Company TCFD - Task Force on Climate-related Financial Disclosures TRCFR - Total Recordable Case Frequency Rate UK IS – UK Integrated Solutions (formerly AFW UK)YASREF - Yanbu Aramco Sinopec Refining Company YoY – Year on Year

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