2017 was a year of transformational strategic development. The acquisition of Amec Foster Wheeler in October brought together two businesses and three brands to create Wood, a global leader in project, engineering and technical services delivery. We are a broader business with multi-sector, full service capability across energy and industrial markets and a stronger, more balanced offering in oil & gas. Integration is progressing ahead of schedule with initial cost synergies achieved earlier than plan. Financial performance for 2017 is in line with guidance. I am confident we have a unique platform to unlock revenue synergies and generate good longer term growth.
|Year ended 31 Dec 2017||Reported 2017 $m||Reported 2016 $m||% Movement||Proforma 2017 $m1||Proforma 2016 $m1||% Movement|
|Revenue from continuing operations on an equity accounting basis||5,394||4,121||30.9%|
|Operating Profit before exceptional items||212||244|
|(Loss)/profit for the period||(30.0)||34.4||(187)%|
|Adjusted diluted EPS3||53.3c||64.1c||(16.8)%|
|Net debt (excluding JVs)||1,646.1||322.6|
- Financial results for 2017 ahead of guidance on a reported basis and in line on a proforma basis
- Relatively resilient performance despite continued challenging conditions in core oil & gas markets
- Integration progressing at pace. Annualised cost synergies delivery of greater than $40m to date, earlier than plan. Remain confident of delivering at least $170m in three years
- Net debt of $1.65bn and 12 month proforma Net debt : EBITDA of 2.4x
- Deleveraging plan underpinned by confidence in earnings quality, synergies delivery and planned disposal of non core assets of at least $200m
- Progressive dividend retained. Proposed final dividend of 23.2c up 3%
- Proforma results in 2017 establish the base for Wood going forward and benefit from a dispute settlement in legacy AFW, partially offset by cost overruns on certain fixed price, non-oil and gas contracts
- Operating profit before exceptional items is stated after non cash amortisation charges of $141m, including $32m of amortisation of intangibles arising on the acquisition of AFW
- Loss for the period is stated after exceptional costs of $165m, including $67m in respect of the acquisition of Amec Foster Wheeler and restructuring & integration costs of $51m
- Anticipate modest EBITA growth in 2018 reflecting early stage recovery in certain oil & gas markets, good momentum in broader energy and industrial contract awards and delivery of cost synergies
- Proforma results are unaudited. They include 12 months of AFW’s results 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.
- 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. A reconciliation to statutory numbers is provided in note 1 to the accounts.
- Company compiled publicly available consensus 2017 Reported EBITA on a proportionally consolidated basis is $345mm and AEPS is 50.5c. Consensus 2017 EBITA on a Profroma basis is $597m. (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 55,000 people, with revenues of around $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