London, UK,
21
August
2018
|
08:01
Europe/London

Half year results for the six months ended 30 June 2018

21 August 2018

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“Performance in the first half is at the upper end of our guidance range, reflecting continued momentum in trading and delivery of cost and revenue synergies. Integration is ahead of schedule and we are increasing our three year cost synergy target from at least $170m to at least $210m. Wood is delivering strong operational cashflows which underpin our deleveraging plan. We have good revenue visibility and remain confident of delivering a stronger second half. Our full year outlook is unchanged; we are seeing recovery in our core oil & gas market and good contract awards in broader industrial sectors. We remain on track to deliver growth in 2018 in line with previous guidance and market expectations.”

Robin Watson, Chief Executive

Financial Summary

Interim
Jun

2018
$m

Interim
Jun
2017
$m

Proforma
Interim
Jun 2017
$m1

%
Movement
vs. proforma

Total Revenue2

5,382

2,277

4,744

13.4%

Total EBITA2

260

127

264

(1.5)%

Total EBITA Margin

4.8%

5.6%

5.6%

(0.8)%

Revenue (statutory revenue which excludes joint ventures)

4,916

1,944

 

 

Operating Profit before exceptional items

125

72

 

 

(Loss)/profit for the period

(52)

6

 

 

 

Basic EPS

(7.9)c

1.1c

 

 

Adjusted diluted EPS

23.2c

22.9c

 

 

Interim Dividend

11.3c

11.1c

 

 

Net debt (excluding JV’s)

1,600

481

 

 

Order book3

10,607

 

 

 

Note: Total Revenue, Total EBITA & Total EBITA margin are presented on proportionally consolidated basis. Total EBITA & Total EBITA margin are stated before exceptional items.

Financial performance:

  • Strong organic growth. Total Revenue up 13%.
  • H1 Total EBITA at upper end of $250m-$260m guidance range; reflecting continued momentum in trading and delivery of cost and revenue synergies.
  • Loss for the period impacted by non cash amortisation charges of $125m and exceptional costs of $101m including anticipated costs to deliver synergies and a non cash impairment charge relating to EthosEnergy.
  • Net debt of $1.6bn reflects strong operational cash generation and working capital management. Cash conversion of 127% (proforma H1 2017 (2)%).
  • Deleveraging plan underpinned by strong cash conversion, growth outlook, synergies delivery and planned disposal of non core assets of at least $200m.
  • Progressive dividend maintained. Interim dividend of 11.3c up 2%.

Integration & synergy delivery:

  • Integration programme ahead of schedule:
    • Excellent progress on cost synergy delivery. c$20m delivered in H1 2018, expect to deliver >$50m for the full year.
    • Upgraded 3 year annualised costs synergy target from at least $170m to at least $210m. No change to costs to realise synergies of c$200m.
    • Secured revenue synergies worth >$400m, up c30% since May and strong pipeline of opportunities.

Outlook:

  • Confident of stronger H2 due to visibility on revenues, cost synergies and phasing of projects and market recovery.
  • Strong order book currently stands at c $10.6bn3, comprising secured work and estimates of activity under long term agreements. c85% of FY2018 revenue delivered or secured.
  • Full year outlook unchanged. On track to deliver growth in 2018 in line with previous guidance and market expectations4.

Notes:

  1. Proforma results as presented include 6 months of AFW’s results for the period ended 30 June 2017 (prepared in accordance with Wood’s accounting policies) but exclude the results of businesses disposed; principally the AFW North Sea upstream business, the AFW North American nuclear operations and the disposed elements of GPG. It also excludes the results of other, less material disposed interests including the Aquenta consultancy, an interest in Incheon Bridge and interests in two Italian windfarms.
  2. See detailed footnotes following the Financial Review. Total Revenue and Total EBITA are presented based on proportionally consolidated numbers, which is the basis used by management to run the business and includes the contribution from joint ventures. Total EBITA is stated before exceptional items. A reconciliation to statutory numbers is provided in note 4 to the Interim Financial Statements.
  3. Order book comprises revenue that is supported by a signed contract or written purchase order for work secured under a single contract award or frame agreements. Work under multi-year agreements is recognised in order book according to anticipated activity supported by purchase orders, customer plans or management estimates. Where contracts have optional extension periods, only the confirmed term is included. Order book includes Wood’s proportional share of joint venture order book.
  4. As at 8 August 2018 company compiled publicly available consensus 2018 Total EBITA on a proportionally consolidated basis is $632m and the range is $611m to $644m. Consensus AEPS is 60.0c and the range is 53.8c to 65.4c. Consensus comprises 15 sell side analyst estimates published since Wood’s full year results announcement on 20 March 2018, further details are available here:

(https://www.woodplc.com/investors/analyst-consensus-and-coverage)

Wood is a global leader in the delivery of project, engineering and technical services to energy and industrial markets. We operate in more than 60 countries, employing around 60,000 people, with revenues of over $10 billion. We provide performance-driven solutions throughout the asset life-cycle, from concept to decommissioning across a broad range of industrial markets including the upstream, midstream and downstream oil & gas, power & process, environment and infrastructure, clean energy, mining, nuclear and general industrial sectors. www.woodplc.com

For further information contact:

Wood

Andrew Rose – Group Head of Investor Relations 01224 532 716

Ellie Dixon – Investor Relations Senior Manager 01224 851 369

Citigate Dewe Rogerson

Kevin Smith 020 7638 9571

Chris Barrie

There will be an analyst and investor presentation at the Lincoln Centre, 18 Lincoln’s Inn Fields, WC2A 3ED at 09.00. Early registration is advised from 08.30.

A live webcast of the presentation will be available from https://www.woodplc.com/investors/financial-events-calendar

Replay facilities will be available later in the day.

Click here to download the full PDF