REG - Wood Group (John)PLC - Full year results for the year ended 31 Dec 2023
26/03/2024 07:15
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RNS Number : 2392I Wood Group (John) PLC 26 March 2024
Full year results for the year ended 31 December 2023
26 March 2024
This announcement contains inside information
Strong growth in first year of new strategy; upgrading outlook
Notes FY23 FY22 Movement At constant currency %
(unaudited) $m* %
$m
HEADLINE RESULTS 1,2,3
Revenue Continuing 5,901 5,469 7.9% 8.7%
Adjusted EBITDA Continuing 4 423 388 8.8% 10.9%
Adjusted EBITDA margin Continuing 5 7.2% 7.1% 0.1ppts 0.1ppts
Adjusted EBIT Continuing 6 185 177 4.4%
Adjusted EBIT margin Continuing 7 3.1% 3.2% (0.1)ppts
Adjusted diluted EPS Continuing 8 2.3c (3.1)c n/a
Adjusted operating cash flow Total group 9 194 (66) n/a
Free cash flow Total group 10 (265) (704) n/a
Net debt including leases Total group 1,094 736 49%
Net debt excluding leases Total group 694 393 77%
Net debt / adjusted EBITDA Continuing 11 2.1x 1.3x n/a
Order book Continuing 12 6,269 6,017 4.2% 4.8%
Headcount Continuing 13 35,335 35,573 (0.1)%
STATUTORY RESULTS
Operating profit / (loss) Continuing 38 (565) n/a
Loss for the period Total group (105) (352) n/a
Basic EPS Total group (16.1)c (52.4)c n/a
Cash flow from operating activities Total group 48 (361) n/a
*FY22 results have been re-presented to include Built Environment Saudi
Arabia. Built Environment Consulting (sold in 2022) is treated as a
discontinued operation and its results are included within the "Total group"
measures. Continuing results exclude its results. See notes on page 4.
Ken Gilmartin, CEO, said:
"We made significant progress in this first year of our three-year growth
strategy. We delivered strong revenue and adjusted EBITDA growth, and we
significantly improved operating cash flow.
"We continue to see clear business momentum, with a higher order book,
double-digit growth in our pipeline and positive pricing trends in both
pipeline and order book. It is encouraging that the fastest growing parts of
Wood are the higher-margin Consulting business, and our sustainable solutions
across all areas.
"To build on this early success and further enhance our strategic delivery, we
have launched a simplification programme to drive efficiency and support
further margin expansion. We are therefore upgrading our outlook, with 2024
guidance now towards the top end of our medium-term targets and 2025 expected
to exceed those targets. Ultimately, our priority remains sustainable cash
generation and we expect to deliver significant free cash flow from 2025."
Strategic progress and strong growth in the first year of our strategy
· Delivered results in line with expectations
o Revenue growth across all business units
o Strong adjusted EBITDA growth, in line with guidance
· Continued momentum
o Fastest growth in Consulting and across sustainable solutions
o Order book up 4% to $6.3 billion, up 7% like-for-like(14)
o Double-digit growth in our factored sales pipeline
o Improving pricing trends across pipeline, order book and in margin
performance in 2023
o Adjusted operating cash flow improved to $194 million, up $260 million on
last year
· Growing our sustainable solutions business to $1.3 billion(15)
o Sustainable solutions revenue up 15% and represented 22% of Group revenue
o 43% of factored sales pipeline now in sustainable solutions
Simplification to enhance strategic delivery
· Focus on driving higher margins through continued growth,
evolving our business mix with faster growth in Consulting, improved pricing
and taking action on cost
· Simplification programme to drive efficiency
o Targeting annualised savings of around $60 million from 2025
o Initial focus on central costs, with benefit within FY24 expected to be
around $10 million
o Will improve both EBITDA and EBIT margins, and future cash generation
o Cash costs to complete of c.$70 million over next 12 months, exceptional
P&L charge in FY24
· Aligning our portfolio with our strategy
o Sale process for EthosEnergy progressing well, smaller disposals expected
to follow
Upgraded 2024 outlook
· Adjusted EBITDA growth towards the top end of mid to high single
digit target (before disposals)
o Margin expansion driven by topline growth, evolving business mix and
improved pricing, plus the c.$10 million in-year benefits of our
simplification programme
o Performance will be weighted to the second half, reflecting the typical
seasonality of our business and the phasing of the in-year benefit of the
simplification programme
· Cash performance to continue to improve
o Operating cash growing at a faster rate than adjusted EBITDA will help
deliver positive free cash flow before exceptional cash flows
o Exceptional cash flows are expected to be around $120 million and will be
weighted to the first half. They now include c.$50 million related to the
delivery of the simplification programme
o Net debt at December 2024 expected to be lower than December 2023 after
the expected proceeds from planned disposals
Upgraded medium-term outlook
· The simplification programme is expected to add to our growth
potential, leading to EBITDA growth in 2025 above our medium-term target
· We will continue to expand our EBITDA margin and that benefit
will translate into our EBIT margins and support a significant increase in our
earnings per share over the medium term
· We are on-track to deliver significant free cash flow in 2025, as
previously guided
· From 2025, our sustainable free cash flow generation, combined
with proceeds from disposals, will provide increased flexibility in our
capital allocation policy
FY23 financial highlights
· Revenue of $5.9 billion was up 8% (+9% at constant currency) with
growth in all business units, including a c.$200 million increase in
pass-through revenue
· Adjusted EBITDA of $423 million was up 9% on last year (+11% at
constant currency) with good growth across all business units
· Adjusted EBITDA margin of 7.2%, up 0.1ppts on last year,
reflecting business mix and improved pricing partly offset by the increased
pass-through revenue and opex investments
· Adjusted EBIT up 4% to $185 million with EBITDA growth partly
offset by higher lease depreciation and software amortisation
· Adjusted diluted EPS of 2.3c was an improvement on last year's
(3.1)c, reflecting the higher adjusted EBIT and lower finance costs
· Adjusted operating cash flow of $194 million was significantly
improved on last year, up $260 million
· Free cash flow of $(265) million reflects the improved operating
cash flow offset by capex, interest and tax paid, plus cash exceptionals
broadly in line with our guidance at $145 million
· Net debt (excluding leases) at 31 December 2023 was $694 million,
higher than at 31 December 2022 ($393 million) given the free cash outflow and
the payment of $65 million of tax on the sale of Built Environment Consulting
FY23 statutory results
· Operating profit of $38 million compares to an operating loss in
the prior year
· Exceptional items of $77 million include a $45 million charge
relating to a receivables write-down and an arbitration claim in the now
closed Power and Industrials EPC business. Also includes $29 million of
charges related to our asbestos liability. Full details on pages 16-17
· Loss for the period of $105 million reflects operating profit
more than offset by finance costs and tax
· Basic EPS of (16.1)c reflects the loss for the period
· Cash flow from operating activities of $48 million, a significant
improvement on the outflow in 2022
CFO succession
Arvind Balan will join Wood as Chief Financial Officer (CFO) on 15 April 2024,
replacing David Kemp who will retire from the Board on 14 April 2024. David
will remain with Wood for a period of time to ensure a smooth transition.
Presentation
A presentation with Ken Gilmartin (CEO) and David Kemp (CFO) will be held at
9:00am today in London, UK. This event will also be webcast at
https://edge.media-server.com/mmc/p/ngex5be8
(https://edge.media-server.com/mmc/p/ngex5be8) .
The webcast and transcript will be available after the event at
www.woodplc.com/investors (http://www.woodplc.com/investors) .
For further information:
Simon McGough, President, Investor Relations +44 (0)7850 978 741
Vikas Gujadhur, Senior Manager, Investor Relations +44 (0)7855 987 399
Alex Le May / Ariadna Peretz, FTI Consulting +44 (0)20 3727 1340
The person responsible for arranging the release of this announcement on
behalf of Wood is Martin McIntyre, Company Secretary.
Future events
· 9 May 2024 - Q1 trading update and Annual General Meeting
· 11 July 2024 - HY24 trading update
· 20 August 2024 - HY24 results
· 7 November 2024 - Q3 trading update
NOTES
Adjustments between statutory and underlying information
The Group uses various alternative performance measures (APMs) to enable users
to better understand the performance of the Group. The Directors believe the
APMs provide a consistent measure of business performance year-to-year and
they are used by management to measure operating performance and for
forecasting and decision-making. The Group believes they are used by investors
in analysing business performance. These APMs are not defined by IFRS and
there is a level of judgement involved in identifying the adjustments required
to calculate them. As the APMs used are not defined under IFRS, they may not
be comparable to similar measures used by other companies. They are not a
substitute for measures defined under IFRS.
Note 1: FY22 results are re-presented to include the results of Built
Environment Consulting Saudi Arabia, which was previously classified as held
for sale. For FY22, this business contributed $27 million of revenue and $3
million of adjusted EBITDA.
Note 2: Percentage growth rates are calculated on actuals and not the rounded
figures shown throughout this statement. Growth rates shown at constant
currency are calculated by comparing unaudited FY23 to FY22 restated at FY23
currency rates.
Note 3: Built Environment Consulting (sold in September 2022) is treated as a
discontinued operation and its results are included within the "Total group"
measures. Continuing results exclude its results.
Note 4: A reconciliation of adjusted EBITDA to operating profit is shown in
note 1 to the financial statements.
Note 5: Adjusted EBITDA margin is adjusted EBITDA shown as a percentage of
revenue. This measure is used by management to measure the performance of
business, and is one of our medium-term targets.
Note 6: Adjusted EBIT shows the Group's adjusted EBITDA after depreciation and
amortisation. This measure excludes amortisation of acquired intangibles and
is therefore aligned with our measure of adjusted EPS. A reconciliation of
adjusted EBIT to operating profit/loss is shown in the Financial Review on
page 13.
Note 7: Adjusted EBIT margin is adjusted EBIT shown as a percentage of
revenue. This measure is used by management to measure the performance of
business.
Note 8: A reconciliation of adjusted diluted EPS to basic EPS is shown in note
9 of the financial statements.
Note 9: Adjusted operating cash flow refers to adjusted cash generated from
operations excluding leases, as shown on page 20 of the Financial Review. This
is a metric used by management to monitor business performance throughout the
year.
Note 10: Free cash flow is defined as all cash flows before acquisitions,
disposals and dividends. It includes all mandatory payments the Group makes
such as interest and tax, and all exceptional cash flows. It excludes the
impacts of IFRS 16 (Leases) accounting and FX. A reconciliation of free cash
flow to our statutory cash flow statement is shown on page 26. Free cash flow
is a key measure of delivering value to our shareholders.
Note 11: Net debt / adjusted EBITDA ratio (covenant basis) is calculated on
the existing basis prior to the adoption of IFRS 16 in 2019 and is based on
net debt excluding leases. It includes a series of covenant adjustments to
both net debt and EBITDA. The calculation is shown in the Financial Review on
page 24. This measure is a key metric used in our debt covenants.
Note 12: 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. Multi-year agreements are recognised 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 disclosure is aligned with the IFRS
definition of revenue and does not include Wood's proportional share of joint
venture order book. Order book is presented as an indicator of the visibility
of future revenue.
Note 13: Headcount is a measure of total employees working for Wood, including
Wood employees and contractors. This measure excludes employees in our joint
ventures.
Note 14: Excluding the Gulf of Mexico labour operations business sold in March
2023. Order book at constant currency.
Note 15: Sustainable solutions consist of activities related to: renewable
energy, hydrogen, carbon capture & storage, electrification and
electricity transmission & distribution, LNG, waste to energy, sustainable
fuels & feedstocks and recycling, processing of energy transition
minerals, life sciences, and decarbonisation in oil & gas, refining &
chemicals, minerals processing and other industrial processes. In the case of
mixed scopes that include a decarbonisation element, for our pipeline
disclosure we include the proportion of the opportunity that is related to
those decarbonisation elements. For our revenue disclosure, we only include
revenue if directly within sustainable solutions, with mixed scopes only
included if 75% or more of the scope relates to decarbonisation.
CEO STATEMENT
We made significant progress in the first year of our three-year profitable
growth strategy. The focus in year one was to return to growth and deliver
results in line with our guidance. We achieved strong growth in adjusted
EBITDA and improved our margin, both of which exceeded our expectations at the
start of the year.
Strong growth in the first year of our growth strategy
Revenue growth across all businesses
Group revenue of $5.9 billion was broadly in line with our guidance, up 8% on
last year (up 9% at constant currency) with growth across all of our business
units, led by Consulting. This growth shows the demand that is in our markets
for the consulting and engineering services we provide. Around a third of our
revenue growth reflected increased pass-through activity, for which we earn
little or no margin.
Strong adjusted EBITDA growth
Our adjusted EBITDA of $423 million was up 9% on last year, and up 11% at
constant currency, reflecting the strong revenue growth combined with an
improved margin of 7.2%. This margin performance reflects an improved business
mix, as we shift our business model more and more towards consulting and
engineering services, and improved pricing across our business. The margin
performance included the increased opex investments we made to drive future
growth, and the dilutive impact of the increased pass-through revenue.
Our adjusted EBIT was up 4% on last year at $185 million, reflecting the
growth in EBITDA offset by higher lease depreciation and software
amortisation. Our adjusted diluted EPS was 2.3 cents, an improvement on (3.1)c
in 2022, reflecting the higher adjusted EBIT and lower finance costs. Despite
an improvement in the year, our adjusted tax rate remains high and this is
covered in detail in the Financial Review on page 19.
Statutory results
Operating profit in the year was $38 million compared to an operating loss of
$565 million in 2022, which was impacted by goodwill and intangible
impairments of $542 million.
Operating profit included $77 million of exceptional items. These included $5
million of costs related to the unsolicited bids from Apollo Global
Management, which were booked in the first half of the year, and the movement
in our asbestos liability. Also included is a $45 million charge in relation
to the Power and Industrials EPC business which we closed in 2022. The charge
includes a receivable write down booked in the first half as well as a
provision taken in the second half of the year relating to an arbitration
claim against Wood. Further details are included in the Financial Review on
pages 16-17.
The loss for the period was $105 million, mainly reflecting the low level of
statutory operating profit offset by finance costs and tax. Our basic earnings
per share was (16.1) cents (FY22: (52.4) cents).
Cash performance reflects our turnaround journey
As expected, we saw a significant improvement in our adjusted operating cash
flow to $194 million. This year-on-year improvement of $260 million was driven
by higher adjusted EBITDA and a much-improved working capital performance.
Our free cash outflow of $265 million includes $145 million of outflows
related to exceptional cash items.
Looking ahead, we continue to expect to grow operating cash at a rate above
the growth in EBITDA while also reducing the exceptional cash outflows.
Operating cash generation will be further strengthened by the actions we are
taking on cost and portfolio, and we expect to generate significant free cash
flow from 2025.
Business momentum
We continue to see good momentum across our business. Our order book of $6.3
billion was up 7% on a like-for-like basis while we saw double-digit growth in
our factored sales pipeline. Our headcount grew by 1% excluding the Gulf of
Mexico business.
Encouragingly, we continue to see improvements in pricing. The price of work
in both our pipeline and order book improved throughout 2023 and better
pricing was a key driver of margin expansion in the year.
Delivering on our profitable growth strategy in 2023
We set out our profitable growth strategy in November 2022 and we are
delivering on each of the three pillars: inspired culture, performance
excellence, and profitable growth.
1) Delivering an inspired culture
An inspired culture is about creating a great place to work. During 2023 we
put a real focus on culture and improving employee engagement. We were pleased
to see a vastly improved employee net promoter score in our mid-year survey
and a lower level of employee turnover in professional roles across the Group.
Improving leadership diversity is a key part of our inspired culture pillar,
with a target of 40% female representation amongst our senior leaders by 2030.
We have now reached 35%, an improvement on 32% at December 2022.
2) Delivering performance excellence
Performance excellence is about being results-focused and delivering across
all of the business. Our order book growth highlights the work done across all
business units to win new work while maintaining the bidding discipline
crucial to our strategy. Encouragingly, we have also delivered improvements in
pricing across the business. We are pleased to have grown our sustainable
solutions business again, now to around $1.3 billion of revenue, and
representing 43% of our pipeline. Our Global Execution Centre is a critical
part of delivering performance excellence for our clients and we now have over
2,000 employees working in our centre in India.
3) Delivering profitable growth
Delivering profitable growth is about building a higher-grade business. We
grew adjusted EBITDA by 9% in the year despite higher pass-through activity
and the opex investments we made for growth. This shows the pricing benefits
starting to come through along with improved operational delivery. Delivering
profitable growth will lead to significant cash flow generation over time. In
2023 we delivered a substantial improvement in our operating cash flow as we
continued our cash recovery journey.
We have the right business model in place
We are now a services-led business with the majority of our contracts cost
reimbursable (c.80% of revenue) and the remainder mostly fixed price services
(c.20% of revenue). This contract mix represents our risk-appetite following
our strategic move away from LSTK activity.
Our markets are attractive
The energy and materials markets offer significant growth opportunities for
Wood. We are focused on:
· Large markets with solid growth - Oil & Gas and Chemicals
· Small markets today with substantial growth potential - Hydrogen
and Carbon Capture
· Large markets where we can significantly grow our share -
Minerals and Life Sciences
Together, these six focus markets offer an addressable market of c.$240
billion in 2026. We expect to outperform market growth through continued
market leadership, winning share and a shift in our business mix over time.
Winning work across our markets
During 2023, we continued to win work across all of our markets, helped by
client demands for solutions that address energy security, energy transition
and sustainable materials.
Significant contract wins across Energy in the year included:
· New global framework agreement with Shell
· Detailed engineering design for Woodside's Trion project in the
Gulf of Mexico
· New strategic partnership with Harbour Energy, with contracts
worth around $330 million
· c.$250 million contract extension in Southeast Asia for
operations and brownfield engineering services
Significant contract wins in the year in Materials included:
· Collaboration agreement with OMV for the licensing of its ReOil®
plastic recycling technology
· $50 million capital project delivery partner contract from GSK in
the USA
· FEED and EPCm for Europe's largest high purity manganese
processing facility
Our pipeline continues to grow across both energy and materials, and shows the
diversification of the future Group, with 34% of the pipeline in materials and
64% in energy.
Growing our Consulting business
Our higher-margin Consulting business saw the strongest growth across the
business in 2023, following a reorganisation at the start of the year and
increased opex investments to drive growth. Consulting operates across all of
our end markets, addressing client challenges across energy, materials and
industrial digitalisation and decarbonisation. In 2023, Consulting had
sustainable solutions revenue of c.$225 million, helped by our solutions
across hydrogen and carbon capture which together saw nearly 1,000 pieces of
work awarded in 2023.
Growing our sustainable business
Wood is an enabler of net zero, providing solutions across decarbonisation,
energy transition and materials for a net zero world. We generated around $1.3
billion of sustainable solutions revenue in 2023, up 15% on last year.
Sustainable solutions now represent 22% of revenue and 43% of our factored
sales pipeline.
In addition to the excellent progress we are making on growing our sustainable
solutions business, we continue to deliver against our ESG strategy. We
reduced our scope 1 & 2 carbon emissions by 71%, ahead of our 2030 target
of a 40% reduction from our 2019 baseline, and we continued to progress
leadership diversity. Our progress across ESG was once again reflected in our
MSCI AA rating, awarded for the ninth consecutive year, and the maintenance of
our top quartile ranking against peers.
Simplification to enhance our strategic delivery
To build on the progress made in the first year of our three-year strategy, we
have launched a simplification programme to enhance our strategic delivery and
support margin expansion.
Driving margin expansion
We will drive higher margins, both EBITDA and EBIT, through:
· Continued growth - continuing to deliver scale benefits as we
grow
· Evolution of our business mix - continued shift to services-led
model and higher growth in Consulting
· Improved pricing - reflecting the selectivity of work and the
significant demand for our expertise
· Taking action on cost - simplification programme to create a
leaner and more efficient Wood
Simplification programme
We have set out a simplification programme to help us deliver higher margins
while remaining focused on business growth. This programme will:
· Right-size our central functions - by putting greater ownership
and accountability for functional activities into the business units, and
reducing the number of central function roles
· Simplify the way we work - by reducing complexity in our
functional structure, processes and procedures, and expanding our shared
services model
· Deliver IT savings - building on the cost savings announced
previously
· Reduce property costs - cost savings announced previously that
will reduce our property portfolio
This programme is expected to generate annualised savings of around $60
million from 2025, with a benefit in FY24 of around $10 million. The costs to
achieve this programme are expected to be around $70 million with an
exceptional item to be recognised in our first half results. The cash impact
is expected to be around $50 million in FY24, weighted to the first half, and
around $20 million in FY25.
Aligning our portfolio with our strategy
We continue to evaluate our portfolio and identified certain businesses deemed
non-core to our strategic growth and priorities. The largest of which is
EthosEnergy, a joint venture within Investment Services. We announced in
January 2024 that we had started the sales process for EthosEnergy and have
made good progress to date. We are also actively exploring options for a
number of other small businesses in our portfolio.
Upgraded 2024 outlook
Adjusted EBITDA is expected to grow towards the top end of our mid to high
single digit medium term target, before the impact of disposals. Our adjusted
EBITDA margin is expected to expand in 2024, driven by topline growth, an
evolving business mix and improved pricing, plus the c.$10 million in-year
benefits of our simplification programme.
Performance in 2024 will be weighted to the second half, reflecting the
typical seasonality of our business and the phasing of the in-year benefit of
the simplification programme.
Our cash performance is expected to continue to improve with operating cash
growing at a faster rate than adjusted EBITDA. This will help deliver positive
free cash flow before exceptional cash flows. These exceptional cash flows are
expected to be around $120 million and will be weighted to the first half.
They now include c.$50 million related to the delivery of the simplification
programme.
Net debt at December 2024 is expected to be lower than December 2023 after the
expected proceeds from planned disposals.
Upgraded medium-term outlook
The simplification programme is expected to add to our growth potential,
leading to adjusted EBITDA growth in 2025 above our medium-term target. We
will continue to expand our adjusted EBITDA margin and that benefit will
translate into our EBIT margins and support a significant increase in our
earnings per share over the medium term.
We are on-track to deliver significant free cash flow in 2025, as previously
guided. Our sustainable free cash flow generation from 2025, combined with
proceeds from disposals, will provide increased flexibility in our capital
allocation policy.
Executive Management Team changes
Marla Storm joined Wood in January 2024 as Chief Human Resources Officer
(CHRO), replacing Lesley Birse who has retired. Michael Rasmuson joined Wood
in January 2024 as Group General Counsel, replacing Martin McIntyre, who will
remain as Company Secretary until a successor for this role is appointed.
Arvind Balan will join as CFO in April 2024, replacing David Kemp who will
retire. Marla and Michael are based in Texas, USA, and Arvind will be based in
London, UK.
BUSINESS REVIEWS
CONSULTING
Our Consulting business provides technical consulting, digital consulting, and
energy asset development. It also provides decarbonisation and digital
solutions that open opportunities across our other business units.
Financial review
FY23 FY22(1) Movement At constant currency %
$m
(unaudited) %
$m
Revenue 739 652 13.3% 13.5%
Adjusted EBITDA(2) 80 76 4.4% 5.9%
Adjusted EBITDA margin 10.8% 11.7% (0.9)ppts (0.8)ppts
Adjusted EBIT 59 50 20.1%
Adjusted EBIT margin 8.0% 7.6% 0.4ppts
Order book 529 476 11.1% 11.2%
Headcount 4,055 3,941 2.9%
1. Re-presented to include the Built Environment Consulting Saudi Arabia
business, see note on page 4.
2. Adjusted EBITDA includes $nil from JVs (FY22: $nil). Revenue does not
include any contribution from JVs.
Revenue of $739 million was 13% higher than last year, with strong growth
across both technical consulting and digital consulting in both our energy and
materials markets.
Adjusted EBITDA of $80 million was 4% higher than last year and 6% higher on a
constant currency basis, reflecting the revenue growth offset by a lower
margin. The lower adjusted EBITDA margin of 10.8% partly reflects the exit of
high-margin work in Russia in 2022, as well as the opex investments we made to
secure future growth.
The order book at 31 December 2023 was $529 million, up 11% on last year.
Operational review
Consulting completed an internal restructure at the start of 2023 and made
significant opex investments to better align with the growth trends across
technical consulting, digital consulting and decarbonisation.
Across our markets, Consulting saw double-digit growth across both energy and
materials and 47% growth in sustainable solutions, helped by demand for our
renewables and decarbonisation consulting solutions.
Key awards in the period across Consulting included:
· Feasibility study in Europe looking at converting natural gas
pipelines for hydrogen transportation
· Supporting Chevron Renewable Energy Group's Biorefinery
· Pre-FEED work on SGN's high pressure hydrogen pipelines
Sustainable solutions revenue was c.$225 million, up 47% and represented
around 30% of Consulting revenue.
Outlook for 2024
Following the opex investments made in 2023, we expect Consulting to have the
strongest EBITDA growth in the Group, supported by good revenue growth and an
expansion in margin, weighted to the second half as performance and pricing
benefits ramp up.
PROJECTS
Our Projects business mainly provides complex engineering design and project
management across energy and materials markets including oil and gas,
chemicals, metals and minerals and life sciences.
Financial review
FY23 FY22 Movement At constant currency %
$m
(unaudited) %
$m
Revenue(1) 2,424 2,211 9.6% 10.2%
Adjusted EBITDA(2) 177 169 5.0% 5.0%
Adjusted EBITDA margin 7.3% 7.6% (0.3)ppts (0.4)ppts
Adjusted EBIT 87 80 8.0%
Adjusted EBIT margin 3.6% 3.6% -ppts
Order book 2,026 2,081 (2.6)% (2.6)%
Headcount 13,549 13,918 (2.7)%
1. Pass-through revenue, which generates only a small or nil margin, was
around $460 million (FY22: c.$290 million).
2. Adjusted EBITDA includes $3.4 million from JVs (FY22: $3.9 million).
Revenue does not include any contribution from JVs.
Revenue of $2,424 million was 10% higher than last year. The business saw
strong growth across oil and gas and chemicals offsetting the run-down of our
LSTK and large-scale EPC activities and lower revenue in minerals. Over half
of the revenue growth came from the increase in pass-through revenue.
Adjusted EBITDA of $177 million was 5% higher than last year. This reflected
the revenue increase combined with a lower margin of 7.3%. The lower margin
includes the impact of higher pass-through revenue, for which we receive nil
or a small margin, and increased opex investments made in the year.
The order book at 31 December 2023 was $2,026 million, down 3% on last year
reflecting our shift away from LSTK and largescale EPC, and lower orders in
our minerals business.
Operational review
The strategic move away from LSTK and largescale EPC is now complete and is
reflected in the lower headcount. We continue to grow our services-led
business model across energy and materials.
Business growth was balanced across both energy and materials market. Key
awards in the period included:
· Collaboration agreement with OMV for the licensing of its ReOil®
plastic recycling technology
· FEEDs for ADNOC's and QatarEnergy's gas facilities in the Middle
East
· Detailed engineering design for Woodside's Trion project in the
Gulf of Mexico
· Significant life sciences engineering contract in the USA with
GSK worth c.$50 million
· Brownfield engineering contract to help produce active
pharmaceutical ingredients in Europe
· Supporting one of the world's largest offshore clean power
projects in Germany
Sustainable solutions revenue was c.$730 million, up 10% and represented c.30%
of Projects revenue despite a reduction in loss-making LSTK activity in
renewables.
Outlook for 2024
We expect moderate revenue and EBITDA growth, weighted to the second half
given the phasing of new orders and our continued shift away from LSTK and
largescale EPC work. Our adjusted EBITDA margin is expected to expand as the
year progresses.
OPERATIONS
Our Operations business manages and optimises our customers' assets including
decarbonisation, maintenance, modifications, brownfield engineering, and asset
management through to decommissioning.
Financial review
FY23 FY22 Movement At constant currency %
$m
(unaudited) %
$m
Revenue(1,2) 2,482 2,407 3.1% 4.4%
Adjusted EBITDA(3) 165 148 11.9% 16.1%
Adjusted EBITDA margin 6.7% 6.1% 0.6ppts 0.7ppts
Adjusted EBIT 108 100 8.2%
Adjusted EBIT margin 4.3% 4.1% 0.2ppts
Order book 3,605 3,295 9.4% 10.6%
Headcount 15,561 15,787 (1.4)%
1. Pass-through revenue, which generates only a small or nil margin, was
around $550 million (FY22: c.$500 million)
2. Includes the results of the Gulf of Mexico labour operations business that
was sold in March 2023. In FY23, this business contributed
$21 million of revenue (FY22: $99 million) and $1 million of adjusted EBITDA
(FY22: $5 million).
3. Adjusted EBITDA includes $13.0 million from JVs (FY22: $15.2 million).
Revenue does not include any contribution from JVs.
Revenue of $2,482 million was 3% higher than last year, and 4% higher at
constant currency. This reflects continued increases in activity levels in oil
and gas across Europe, the Middle East and Asia-Pacific. Revenue growth also
includes an increased level of pass-through revenue and the impact of the sale
of the Gulf of Mexico labour operations business in the period.
Adjusted EBITDA of $165 million was 12% higher than last year, and 16% higher
at constant currency, reflecting the revenue growth and an increased margin of
6.7%. This margin increase, despite higher pass-through revenue, mainly
reflects improved overall contract performance and some improved pricing.
The order book at 31 December 2023 was $3,605 million, 9% higher than last
year and reflects the expected strong final quarter for bookings. Excluding
the Gulf of Mexico offshore labour operations business, the order book was up
15% at constant currency.
Operational review
Operations continued to benefit from higher activity levels across
geographies. Key awards in 2023 included:
· New strategic partnership with Harbour Energy for its UK North
Sea operations, with associated contracts for five years (with five one-year
extensions) worth around $330 million
· c.$250 million contract extension in SE Asia for operations and
brownfield engineering services
· Brownfield modifications for bp's Murlach development in the
North Sea
· Brownfield EPCm contract with Woodside in Australia
· Two-year operations contract extension with Equinor in the
Mariner field in the North Sea
Sustainable solutions revenue was c.$260 million, up 15% and representing
around 11% of Operations revenue.
Outlook for 2024
We expect moderate revenue and EBITDA growth throughout the year.
INVESTMENT SERVICES
Our Investment Services business unit manages a number of legacy activities
and includes our Turbines joint ventures. The most notable areas are
activities in industrial power and heavy civil engineering.
Financial review
FY23 FY22 Movement At constant currency %
$m
(unaudited) %
$m
Revenue 255 199 28.4% 27.8%
Adjusted EBITDA(1) 77 69 11.2% 11.5%
Adjusted EBITDA margin 30.2% 34.9% (4.7)ppts (4.4)ppts
Adjusted EBIT 48 47 1.7%
Adjusted EBIT margin 18.6% 23.5% (4.9)ppts
Order book 109 164 (33.6)% (34.0)%
Headcount 518 426 21.6%
1. Includes results from our two Turbines joint ventures. Adjusted EBITDA from
these JVs was $65 million in FY23 and $48 million in FY22. Revenue does not
include any contribution from JVs.
Revenue of $255 million was 28% higher than last year. This growth primarily
reflects strong activity growth in our heavy civils business and the transfer
of a facilities business into Investment Services in 2023 from Projects.
Adjusted EBITDA of $77 million mostly represents the share of results from our
Turbines joint ventures of
$65 million, up significantly on last year with a strong performance across
both EthosEnergy and RWG. Excluding these Turbine JVs, adjusted EBITDA was
down significantly.
The order book at 31 December 2023 was $109 million, down 34% on last year.
Outlook for 2024
We expect the contribution from Investment Services to be broadly flat in
2024, with the performance of our Turbine JVs weighted to the second half as
is typical in these businesses.
CENTRAL COSTS
FY23 FY22 Movement At constant currency %
$m
(unaudited) %
$m
Adjusted EBITDA (76) (74) (3.7)% (2.8)%
Adjusted EBIT (117) (99) (17.7)%
Central costs, not allocated to business units, increased slightly to $76
million, with cost reductions mostly offsetting inflationary pressures.
Outlook for 2024
We expect to see a reduction in central costs of around $10 million from the
benefits of our simplification programme.
FINANCIAL REVIEW
Trading performance
Trading performance is presented on the basis used by management to run the
business with adjusted EBITDA and adjusted EBIT including the contribution
from joint ventures. Revenue does not include any contribution from joint
ventures. A reconciliation of adjusted EBITDA and adjusted EBIT to operating
profit is included below. A calculation of adjusted diluted EPS is shown on
page 19.
2023 2022
(unaudited) (re-presented)
$m $m
Continuing operations
Revenue 5,900.7 5,469.3
Adjusted EBITDA(1) 422.7 388.2
Adjusted EBITDA margin % 7.2% 7.1%
Depreciation (PPE) (26.2) (29.3)
Depreciation on right of use asset (IFRS 16) (103.1) (90.5)
Impairment of joint venture investments and property, plant and equipment (1.8) (2.4)
Amortisation - software and system development (106.6) (89.0)
Adjusted EBIT 185.0 177.0
Adjusted EBIT margin % 3.1% 3.2%
Amortisation - intangible assets from acquisitions (54.5) (64.4)
Tax and interest charges on joint ventures (16.3) (14.3)
Exceptional items (76.7) (121.2)
Impairment of goodwill and intangible assets - (542.3)
Operating profit/(loss) 37.5 (565.2)
Net finance expense (81.5) (109.8)
Interest charge on lease liability (18.7) (16.4)
Loss before taxation from continuing operations (62.7) (691.4)
Tax charge on continuing operations (65.0) (10.9)
Loss for the period from continuing operations (127.7) (702.3)
Profit from discontinued operations, net of tax 22.5 350.6
Loss for the period (105.2) (351.7)
Non-controlling interest (5.5) (4.6)
Loss attributable to owners of parent (110.7) (356.3)
Number of shares (basic) 685.9 680.4
Basic loss per share (16.1) (52.4)
(cents)
In the table above depreciation and amortisation include the contribution from
joint ventures.
Built Environment Consulting (sold in September 2022) is classified as a
discontinued operation and its results are included within "Total Group"
measures. Continuing operations excludes its results. The comparative
information has been re-presented due to the reclassification of Built
Environment Consulting Saudi Arabia from discontinued into continuing
operations. This relates to the sale of a subsidiary, previously classified as
held for sale, which did not complete during 2023 and will now be retained by
the Group. The revenue of this business for the year ended 31 December 2022
was $27.1 million and Adjusted EBITDA was $3.1 million.
Revenue was up 8% on 2022 to $5,900.7 million with good growth across all
business units. Adjusted EBITDA increased by $34.5 million to $422.7 million
primarily due to the higher revenue and helped by a slightly higher margin of
7.2% as operational performance and improved pricing offset investments in
operating costs.
Adjusted EBIT increased by $8.0 million with higher adjusted EBITDA partly
offset by higher depreciation of right of use assets and a higher software
amortisation charge reflecting the increased software spend across the Group
in recent years.
Operating profit of $37.5 million (2022: loss $565.2 million) has improved
mainly due to lower exceptional items of $76.7 million (2022: $121.2 million)
and no impairment charge (2022: $542.3 million) being recognised on goodwill
and intangible assets. The $22.5 million profit from discontinued operations,
net of tax includes the final proceeds from the Built Environment Consulting
business following agreement of the completion balance sheet between the Group
and WSP. The increase in the tax charge to $65.0 million (2022: $10.9 million)
is primarily driven by actuarial movements in the UK pension scheme.
The review of our trading performance is contained within the Chief Executive
Review on pages 5 to 12.
Reconciliation of Adjusted EBIT to Adjusted diluted EPS
2023 2022
(unaudited) (re-presented)
$m $m
Adjusted EBIT 185.0 177.0
Tax and interest charges on joint ventures (16.3) (14.3)
Adjusted net finance expense (70.4) (103.9)
Interest charge on lease liability (18.7) (16.4)
Adjusted profit before tax 79.6 42.4
Adjusted tax charge (58.3) (59.2)
Adjusted (loss)/profit from discontinued operations, net of tax (10.2) 60.2
Adjusted profit for the period 11.1 43.4
Non-controlling interest (5.5) (4.6)
Adjusted earnings 5.6 38.8
Number of shares (m) - diluted 685.9 680.4
Adjusted diluted EPS (cents)(2) 0.8 5.7
Adjusted diluted EPS (cents) continuing operations(2) 2.3 (3.1)
See notes on page 24
Reconciliation to GAAP measures
2023 2022
(unaudited) (re-presented)
$m $m
Loss before tax from continuing operations (62.7) (691.4)
Impairment of goodwill and intangible assets - 542.3
Exceptional items 76.7 121.2
Exceptional items - net finance expense 11.1 5.9
Amortisation - intangible assets from acquisitions 54.5 64.4
Adjusted profit before tax 79.6 42.4
Tax charge 65.0 10.9
Tax in relation to acquisition amortisation 3.7 11.9
Tax on exceptional items (10.4) 36.4
Adjusted tax charge 58.3 59.2
Profit from discontinued operations, net of tax 22.5 350.6
Discontinued operations, gain on disposal (37.7) (297.1)
Discontinued items, exceptional items 5.0 6.7
Adjusted (loss)/profit from discontinued operations, net of tax (10.2) 60.2
The reconciliation from adjusted EBIT of $185.0 million (2022: $177.0 million)
to adjusted earnings of $5.6 million (2022: $38.8 million) has been provided
to show a clear reconciliation to adjusted diluted EPS, which is a key
performance measure of the Group. The reconciliation to GAAP measures
highlights that the adjusted measures remove exceptional items, the
exceptional items on discontinued operations and the associated tax charges on
the basis that these are disclosed separately due to their size and nature to
enable a full understanding of the Group's performance. Please refer to
commentary on exceptional items and associated tax charges on pages 16 to 18.
Amortisation on intangible assets from acquisitions and the associated tax
credit has been excluded to allow a more useful comparison to Wood's peer
group.
Amortisation, depreciation and other impairments for continuing operations
Total amortisation for 2023 was $161.1 million (2022: $153.4 million), all of
which relates to the continuing Group. The total amortisation charge includes
$54.5 million of amortisation of intangibles recognised on the acquisition of
Amec Foster Wheeler ("AFW") (2022: $63.5 million). Amortisation in respect of
software and development costs was $106.6 million (2022: $89.0 million) and
this largely relates to engineering software and ERP system development.
Included in the amortisation charge for the year is $1.4 million (2022: $1.5
million) in respect of joint ventures.
The total depreciation charge in 2023 amounted to $129.3 million (2022: $119.8
million) and includes depreciation on right of use assets of $103.1 million
(2022: $90.5 million). Included in the depreciation charge for the year is
$13.1 million (2022: $12.3 million) in respect of joint ventures.
Net finance expense and debt
2023
(unaudited) 2022
$m $m
Interest on bank borrowings 59.4 47.2
Interest on US Private Placement debt 16.6 40.3
Discounting relating to asbestos, deferred consideration and other liabilities 12.3 6.8
Other interest, fees and charges 12.6 22.4
Total finance expense excluding joint ventures and interest charge on lease 100.9 116.7
liability
Finance income relating to defined benefit pension schemes (18.3) (2.4)
Other finance income (1.1) (4.5)
Net finance expense 81.5 109.8
Interest charge on lease liability 18.7 16.4
Net finance charges in respect of joint ventures 6.5 4.4
Net finance expense including joint ventures, continuing Group 106.7 130.6
Interest on bank borrowings of $59.4 million (2022: $47.2 million) primarily
relates to interest charged on borrowings under the $1.2 billion Revolving
Credit Facility ('RCF') which matures in October 2026 and the United Kingdom
Export Facility ('UKEF') term loan which was repaid in December 2023 and
replaced with a $200.0 million term loan facility maturing in October 2026.
Despite the reduction in average net debt during the period, there was a $12.2
million increase in interest on bank borrowings. The increase in the interest
expense is primarily driven by higher interest rates in 2023 compared with
2022. The higher interest rate is primarily driven by higher base rates
throughout 2023 partially offset by the impact of a lower margin in 2023,
caused by the reduction in the net debt to adjusted EBITDA covenant from
December 2022.
The interest charge on US Private Placement debt decreased by $23.7 million to
$16.6 million primarily due to the total repayment of around $450 million to
the USPP noteholders during the second half of 2022, being the early
settlement of notes following the disposal of the Built Environment Consulting
business. The Group had $352.5 million (2022: $352.0 million) of unsecured
loan notes outstanding at 31 December 2023, maturing between 2024 and 2031
with around 75% due in 2025 or later.
Other interest, fees and charges amount to $12.6 million (2022: $22.4 million)
and principally relates to the interest on other facilities of $8.4 million,
including the receivables factoring facilities and amortisation of bank
facility costs of $4.2 million (2022: $10.5 million). The reduction of $9.8
million in other interest, fees and charges is primarily due to lower bank
facility costs due to one off, non-cash charges incurred in 2022 as a result
of the partial early repayments of the UKEF and USPP facilities.
In total, the Group had undrawn facilities of $902.1 million as at 31 December
2023, of which $843.1 million related to the revolving credit facility.
The Group recognised interest costs in relation to lease liabilities of $18.7
million (2022: $16.4 million) which relates to the unwinding of discount on
the lease liability.
Included within the discounting balance of $12.3 million (2022: $6.8 million)
is the unwinding of discount on the asbestos provision of $11.1 million (2022:
$5.9 million).
Net debt excluding leases to adjusted EBITDA (excluding the impact of IFRS 16)
at 31 December was 2.08 times on a covenant basis (2022: 1.3 times) against
our covenants of 3.5 times. This is calculated pre IFRS 16 as our covenants
are calculated on a frozen GAAP basis, see note 4 on page 24.
Interest cover (see note 5 on page 25) was 4.0 times on a covenant basis
(2022: 4.2 times) against our covenant of 3.5 times.
Exceptional items
2023 2022
(unaudited) $m
$m
Exceptional items included in continuing operations
Power and Industrial EPC losses 45.1 25.0
Impairment of goodwill and intangible assets - 542.3
Apollo related costs 4.8 -
Redundancy, restructuring and integration costs - 30.1
Investigation support costs and provisions (2.6) (4.2)
Enterprise settlement - 35.6
Asbestos yield curve and costs 29.4 21.5
Russia exit costs and charges - 13.2
Exceptional items included in continuing operations, before interest and tax 76.7 663.5
Unwinding of discount on asbestos provision 11.1 5.9
Tax (credit)/charge in relation to exceptional items (0.2) 5.2
Release of uncertain tax provision (7.4) -
Derecognition/(recognition) of deferred tax assets due to UK pension actuarial 18.0 (41.6)
movements
Exceptional items included in continuing operations, net of interest and tax 98.2 633.0
Exceptional items are those significant items which are separately disclosed
by virtue of their size or incidence to enable a full understanding of the
Group's financial performance.
Power and Industrial EPC losses
The Group made a strategic decision in 2021 to exit certain business segments
within the Power and Industrials sub business group. Following that decision,
we ceased to operate in the large-scale EPC or lump sum turnkey business
segment.
The costs of exiting that business and any subsequent costs related to the
wind down of contracts in that business, to the extent they are material in
size, have been treated as exceptional on the basis that they relate to a
segment in which the Group no longer operates.
In the first half of 2023 the Group recorded a non-cash exceptional charge of
$20.4 million relating to a write down of receivable balances arising from
activity in the Power and Industrial EPC business. The Group had expected to
recover these balances, but these have since been disputed.
In the second half of 2023, a former client raised an arbitration claim
against the Group in respect of alleged damages and costs arising from a
legacy Power and Industrial contract. Following evaluation of the claim, the
Group has recognised a provision of $23.0 million with a charge to exceptional
items, representing our assessment of probable outflows arising from the
matter.
During the year additional costs relating to the discontinued business of $1.7
million were recorded as an exceptional charge. This follows previous write
downs made during 2022 of $25.0 million, including a revenue reversal of $8.0
million which represents the impact of a reduction in total value of the
contract and is in relation to revenue recognised in prior years.
Apollo related costs
The Group incurred $4.8 million in relation to legal and advisor costs arising
from Apollo's preliminary approach to potentially acquire the ordinary share
capital of the Group, which did not ultimately lead to an offer.
Investigation support costs and provisions
The regulatory investigations were all closed out during 2021 and the agreed
settlements were materially in line with the provision made in 2020. The
$2.6m credit relates to the release of provisions made for additional legal
and other costs which were ultimately not needed.
Asbestos
All asbestos costs have been treated as exceptional on the basis that
movements in the provision are non-trading and can be large and driven by
market conditions which are out with the Group's control. Excluding these
charges from the trading results improves the understandability of the
underlying trading performance of the Group.
The charge before interest and tax of $29.4 million (2022: $21.5 million) in
2023 comprises a $34.2 million charge (2022: $52.8 million) based on an
updated actuarial review reflecting the best estimate for recent claims
experience and $5.4 million (2022: $4.3 million) of costs in relation to
managing the claims. These are offset by a credit of $10.0m which relates to
the collection of insurance proceeds from an insolvent insurer and a yield
curve credit of $0.2 million (2022: $35.6 million). The lower yield curve
credit recognised in 2023 is principally due to the 27 year blended curve rate
of 3.64% not being materially different to the 30 year flat rate of 3.97% in
2022.
Interest costs of $11.1 million which relate to the unwinding of discount on
the asbestos provision over time are shown as exceptional (2022: $5.9
million).
Redundancy, restructuring and integration costs
No costs were incurred in 2023. In the prior year, $30.1m was incurred in
relation to redundancy and restructuring activities.
Enterprise settlement
In the prior year, the Enterprise claim was concluded, with the amount settled
being in excess of the amount provided for. The charge in the prior year was
classed as an exceptional both by its nature (historic litigation settlement)
and by size.
Tax
An exceptional tax charge of $10.4 million (2022: $36.4 million credit) has
been recorded during the period. It consists of a $0.2 million tax credit on
exceptional items (2022: $5.2 million charge), a $7.4 million credit in
relation to the release of an uncertain tax provision created through
exceptional items on the disposal of the Well Support business in 2011, offset
by an exceptional charge of $18.0 million (2022: $41.6 million credit)
recognised due to the actuarial loss in relation to the UK defined benefit
pension scheme. As deferred tax liabilities support the recognition of
deferred tax assets, the reduction of $18.0 million of deferred tax assets has
been charged through exceptional items based on its size.
Taxation
The effective tax rate on profit before tax, exceptional items and
amortisation and including Wood's share of joint venture profit on a
proportionally consolidated basis is set out below, together with a
reconciliation to the tax charge in the income statement.
2023 2022
(unaudited) (re-presented)
$m $m
Loss from continuing operations before tax (62.7) (691.4)
(Loss)/profit from discontinued operations, net of tax and before exceptional (10.2) 60.2
items
Tax charge in relation to joint ventures 9.8 9.9
Amortisation (note 10) 159.7 151.9
Exceptional items (continuing operations) 87.8 669.4
Tax charge in relation to discontinued operations - 7.9
Profit before tax, exceptional items and amortisation 184.4 207.9
Effective tax rate on continuing operations (excluding tax on exceptional 35.63% 36.84%
items and amortisation)
Tax charge (excluding tax on exceptional items and amortisation) 65.7 76.6
Tax charge in relation to joint ventures (9.8) (9.9)
Tax (credit)/charge in relation to exceptional items (continuing operations) (7.6) 5.2
Derecognition/(recognition) of deferred tax assets due to UK pension actuarial 18.0 (41.6)
movements
Tax credit in relation to amortisation (1.3) (11.5)
Tax charge on discontinued operations - (7.9)
Tax charge from continuing operations per the income statement 65.0 10.9
The effective tax rate reflects the rate of tax applicable in the
jurisdictions in which the Group operates and is adjusted for permanent
differences between accounting and taxable profit and the recognition of
deferred tax assets. Key adjustments impacting on the rate in 2023 are
withholding taxes suffered on which full double tax relief is not available,
deferred tax not recognised primarily in relation to interest expenses not
deductible in the current year, less the release of uncertain tax provisions
reflecting the positive outcomes in relation to specific risks.
In addition to the effective tax rate, the total tax charge in the income
statement reflects the impact of exceptional items and amortisation which by
their nature tend to be expenses that are more likely to be not deductible
than those incurred in ongoing trading profits. The income statement tax
charge excludes tax in relation to joint ventures. The increase in the tax
charge in 2023 is largely a result of the exceptional tax charge of $18.0
million (2022: $41.6 million credit) on deferred tax assets as a result of
actuarial movements on the UK pension scheme.
Adjusted tax charge
As noted on page 14 our adjusted tax charge was $58.3 million (2022: $59.2
million), representing an adjusted effective tax rate of 73%. This was lower
than the adjusted rate of 140% in 2022, principally due to the significant
reduction in net finance costs in the year. Our adjusted tax rate remained
relatively high however, representing a range of factors including the
geographical mix of profits and losses across the Group, restrictions on the
deductibility of interest, withholding taxes on income in certain
jurisdictions and limits on the recognition of deferred tax assets in the UK
and US due to losses in these countries.
Earnings per share
The calculation of basic earnings per share is based on the earnings
attributable to owners of the parent divided by the weighted average number of
ordinary shares in issue during the year excluding shares held by the Group's
employee share trusts. For the calculation of adjusted diluted earnings per
share, the weighted average number of ordinary shares in issue is adjusted to
assume conversion of dilutive potential ordinary shares, only when there is a
profit per share. Adjusted diluted earnings per share is disclosed to show the
results excluding the impact of exceptional items and amortisation related to
acquisitions, net of tax.
For the year ended 31 December 2023, the Group reported a basic loss (2022:
loss) per ordinary share, therefore the effect of dilutive ordinary shares are
excluded (2022: excluded) in the calculation of diluted earnings per share.
Where profits have been made when disaggregating discontinued and continuing
operations, the calculation of diluted earnings per share was performed on the
same basis as the whole Group.
2023 (unaudited) 2022
Discontinued operations Total Continuing operations Discontinued operations Total
Continuing $m $m (re-presented) (re-presented) (re-presented)
operations $m $m $m
$m
(Losses)/earnings attributable to equity (35.0) (10.2) (45.2) (73.9) 60.2 (13.7)
shareholders (basic pre-exceptional)
Exceptional items, net of tax (98.2) 32.7 (65.5) (633.0) 290.4 (342.6)
(Losses)/earnings attributable (133.2) 22.5 (110.7) (706.9) 350.6 (356.3)
to equity shareholders (basic)
Number of shares (basic) 685.9 685.9 685.9 680.4 680.4 680.4
Number of shares (diluted) 685.9 685.9 685.9 680.4 680.4 680.4
Basic (losses)/earnings per share (cents) (19.4) 3.3 (16.1) (103.9) 51.5 (52.4)
Diluted (losses)/earnings per share (cents) (19.4) 3.3 (16.1) (103.9) 51.5 (52.4)
(133.2) 22.5 (110.7) (706.9) 350.6 (356.3)
(Losses)/earnings attributable
to equity shareholders (diluted)
Exceptional items, net of tax 98.2 (32.7) 65.5 633.0 (290.4) 342.6
Amortisation of intangibles on acquisition, 50.8 - 50.8 52.5 - 52.5
net of tax
Earnings/(losses) attributable 15.8 (10.2) 5.6 (21.4) 60.2 38.8
to equity shareholders (adjusted diluted)
Earnings/(losses) attributable 15.8 (10.2) 5.6 (21.4) 60.2 38.8
to equity shareholders (adjusted basic)
Number of shares (diluted) 685.9 685.9 685.9 680.4 680.4 680.4
Number of shares (basic) 685.9 685.9 685.9 680.4 680.4 680.4
Adjusted diluted (cents) 2.3 (1.5) 0.8 (3.1) 8.8 5.7
Adjusted basic (cents) 2.3 (1.5) 0.8 (3.1) 8.8 5.7
Basic loss per share for the year was 16.1 cents (2022: 52.4 cents). The
reduction in loss per share is driven by lower exceptional items, net of tax
in the continuing Group. The adjusted earnings per share was 0.8 cents (2022:
5.7 cents). The decline in the year mainly reflects the absence of Built
Environment Consulting. This measure excludes exceptional items, amortisation
of acquired intangibles and all related tax charges and credits. A
reconciliation of adjusted EBIT to adjusted EPS is shown on page 14.
Capital allocation
We look to manage our target leverage over the medium term within a range of
around 0.5 to 1.5 times net debt (excluding leases) to adjusted EBITDA
(pre-IFRS 16). Beyond this, we consider how best to create value for our
shareholders from dividends, share buybacks or attractive acquisitions.
Cash flow and net debt
The cash flow for the year is set out below and includes both continuing and
discontinued operations:
Excluding leases Impact of Leases Total Excluding leases Impact of Leases Total
2023 2023 2023 2022 2022 2022
(unaudited) (unaudited)
(unaudited)
$m $m $m
$m $m $m
Adjusted EBITDA 301.4 111.1 412.5 337.0 121.0 458.0
Less JV EBITDA (66.4) (7.2) (73.6) (50.8) (7.7) (58.5)
JV Dividends 15.6 - 15.6 30.1 - 30.1
Adjusted decrease in provisions (note 6) (22.1) - (22.1) (43.7) - (43.7)
Other 18.7 (1.7) 17.0 28.1 - 28.1
Cash flow generated from operations pre working capital
247.2 102.2 349.4 300.7 113.3 414.0
Adjusted increase in receivables (note 6) (67.7) - (67.7) (97.5) - (97.5)
Adjusted increase/(decrease) in payables (note 6) 12.7 - 12.7 (267.6) - (267.6)
Decrease/(increase) in inventory 1.5 - 1.5 (1.6) - (1.6)
Adjusted working capital movements (53.5) - (53.5) (366.7) - (366.7)
Adjusted cash generated /(outflow) from operations (note 6) 193.7 102.2 295.9 (66.0) 113.3 47.3
Purchase of property, plant and equipment (18.8) - (18.8) (27.6) - (27.6)
Proceeds from sale of property, plant and equipment 8.2 - 8.2 7.1 - 7.1
Purchase of intangible assets (126.4) - (126.4) (109.2) - (109.2)
Interest received 1.1 - 1.1 4.5 - 4.5
Interest paid (81.7) - (81.7) (98.1) - (98.1)
Tax paid (97.7) - (97.7) (81.9) - (81.9)
Non-cash movement in leases - (160.9) (160.9) - (41.7) (41.7)
Other 1.4 - 1.4 (14.2) (6.3) (20.5)
Free cash flow (excluding exceptionals) (120.2) (58.7) (178.9) (385.4) 65.3 (320.1)
Cash exceptionals (145.0) 11.1 (133.9) (318.8) 14.6 (304.2)
Free cash flow (265.2) (47.6) (312.8) (704.2) 79.9 (624.3)
FX movements on cash and debt facilities
(12.6) (10.3) (22.9) (25.4) 27.0 1.6
Divestments (22.5) - (22.5) 1,729.4 - 1,729.4
(Increase)/decrease in net debt (300.3) (57.9) (358.2) 999.8 106.9 1,106.7
Opening net debt (393.2) (342.9) (736.1) (1,393.0) (449.8) (1,842.8)
Closing net debt (693.5) (400.8) (1,094.3) (393.2) (342.9) (736.1)
Closing net debt at 31 December 2023 including leases was $1,094.3 million
(2022: $736.1 million). Included within closing net debt is the IFRS 16 lease
liability which is the net present value of the lease payments that are not
paid at the commencement date of the lease and subsequently increased by the
interest cost and reduced by the lease payment made. The lease liability as at
31 December 2023 was $400.8 million (2022: $342.9 million), with the increase
primarily relating to a new office campus in Reading, UK that replaced a
previous location. All covenants on the debt facilities are measured on a
pre-IFRS 16 basis.
Closing net debt excluding leases as at 31 December 2023 was $693.5 million
(2022: $393.2 million). The monthly average net debt excluding leases in 2023
was $846.4 million (2022: $1,489.1 million). The cash balance and undrawn
portion of the Group's committed banking facilities can fluctuate throughout
the year. Around the covenant remeasurement dates of 30 June and 31 December
the Group's net debt excluding leases is typically lower than the monthly
averages due mainly to a strong focus on collection of receipts from
customers.
Cash generated from operations pre-working capital reduced by $64.6 million to
$349.4 million from $414.0 million in the year to December 2023 reflecting
increased EBITDA from continuing operations more than offset by EBITDA from
the business sold in 2022. It includes a decrease in provisions of $22.1
million which is mainly explained by utilisations of the provision in the
year. New provisions created through EBITDA were largely offset by releases to
EBITDA. The releases in 2023 are driven by the Group concluding on a number of
historic project related and insurance provisions which are no longer
considered necessary following resolution of the disputes or the underlying
risk. New provisions primarily relate to insurance and various individually
immaterial project provisions. The other movement of $17.0 million (2022:
$28.1 million) is principally comprised of non-cash movements through EBITDA
including share-based charges of $19.6 million (2022: $20.7 million), FX
movements of $3.1 million (2022: $8.1 million) and non-cash gains on disposal
of the Gulf of Mexico assets, right of use assets and property, plant and
equipment of $2.0 million, $1.7 million and $2.6 million respectively.
There was a working capital outflow of $53.5 million (2022: $366.7 million).
The outflow in receivables of $67.7 million was driven by an increase to
revenue in 2023 and higher closing days sales outstanding ("DSO") leading to
higher trade receivables and gross amounts due from customers. The trade and
other payables balance is broadly consistent with 2022, resulting in a working
capital inflow in the year due to payables of $12.7 million.
The Group has receivables financing facilities totalling $200.0 million. The
amount utilised at 31 December 2023 was $198.2 million (2022: $200.0 million).
The facilities are non-recourse to the Group and are not included in our net
debt.
Cash exceptionals including lease movements reduced by $170.3 million to
$133.9 million as the Group continues to reduce its exposure to legacy
contracts. Payments made during 2023 mainly relate to the settlement of known
legal claims and asbestos payments. These include the historic SFO
investigation payments of $38 million which were provided for in 2020 and net
asbestos payments of around $40 million. The remaining cash exceptionals
mainly relates to the legacy Aegis contract of $27 million and other legacy
contracts of $12 million.
The other reduction in net debt of $1.4 million (2022: increase of $20.5
million) is principally comprised of the movements in accrued bank interest
and prepaid debt facility costs which are included within net debt.
The free cash outflow of $312.8 million (2022: $624.3 million) was lower than
in 2022, largely due to the $170.3 million improvement in cash exceptionals
and improved working capital performance of $313.2 million. This was offset
mainly by an increase in the non-cash movement in leases totalling $160.9
million (2022: $41.7 million) driven by significant lease renewals in the
year, an increase of $17.2 million related to the purchase of intangible
assets, including software and investment in ERP improvements throughout the
Group and an increase in tax paid of $15.8 million following conclusion of a
number of uncertain tax provisions.
A net cash outflow from divestments of $22.5 million includes final proceeds
from the disposal of the Built Environment Consulting ($27.1 million) and
proceeds from the sale of the Gulf of Mexico business ($17.5 million). These
are offset by taxes paid on the Built Environment Consulting disposal of $65.0
million and professional costs incurred on the disposal of Built Environment
Consulting of $2.1 million.
Operating cash conversion, before capital expenditure, calculated as cash
generated from operations as a percentage of adjusted EBITDA (less JV EBITDA)
increased to 87.3% (2022: 11.8%) primarily due improved working capital
performance.
Summary balance sheet
2023 2022
(unaudited)
$m $m
Goodwill and intangible assets 4,319.0 4,309.1
Right of use assets 355.9 276.0
Other non-current assets 913.9 918.0
Trade and other receivables 1,554.4 1,545.0
Net held for sale assets and liabilities (excluding cash) - 0.4
Trade and other payables (1,706.7) (1,687.6)
Net debt excluding leases (693.5) (393.2)
Lease liabilities (400.8) (342.9)
Asbestos related litigation (306.5) (311.4)
Provisions (135.3) (148.3)
Other net liabilities (258.5) (435.6)
Net assets 3,641.9 3,729.5
Net current liabilities (207.0) (235.0)
At 31 December 2023, the Group had net current liabilities of $207.0 million
(2022: $235.0 million).
Goodwill and intangible assets amount to $4,319.0 million (2022: $4,309.1
million) and principally comprises of goodwill and intangibles relating to
acquisitions. The increase of $9.9 million comprises of software additions of
$131.0 million and FX movements of $53.6 million offset by amortisation
charges of $159.7 million and $15.0 million of goodwill disposed following
sale of Gulf of Mexico assets.
Right of use assets and lease liabilities amount to $355.9 million (2022:
$276.0 million) and $400.8 million (2022: $342.9 million) respectively. The
increase in both the right of use asset and lease liability primarily relates
to a new office campus in Reading, UK contributing to around $68 million and
$64 million respectively.
Trade and other receivables increased to $1,554.4 million reflecting the
increased revenues compared with 2022 and a higher DSO. Trade and other
payables increased to $1,706.7 million also reflecting the increasing activity
levels and follows the normalisation of the balance as at December 2022.
Largely as a result of the acquisition of AFW, the Group is subject to claims
by individuals who allege that they have suffered personal injury from
exposure to asbestos primarily in connection with equipment allegedly
manufactured by certain subsidiaries during the 1970s or earlier. The
overwhelming majority of claims that have been made and are expected to be
made are in the USA. The asbestos related litigation provision amounts to
$306.5 million (2022: $311.4 million).
The net asbestos liability at 31 December 2023 amounted to $328.1 million
(2022: $335.4 million) and comprised $306.5 million in provisions (2022:
$311.4 million) and $50.4 million in trade and other payables (2022: $59.5
million) less $23.2 million in long term receivables (2022: $24.4 million) and
$5.6 million in trade and other receivables (2022: $11.1 million).
The Group expects to have net cash outflows of approximately $35 million as a
result of asbestos liability indemnity and defence payments in excess of
insurance proceeds during 2024. The Group has worked with its independent
asbestos valuation experts to estimate the amount of asbestos related
indemnity and defence costs at each year end based on a forecast to 2050.
Other provisions as at December 2023 were $135.3 million (2022: $148.3
million) and comprise project related provisions of $42.2 million (2022: $63.3
million), insurance provisions of $40.7 million (2022: $46.2 million),
property provisions of $27.4 million (2022: $26.0 million) and litigation
related provisions of $25.0 million (2022: $12.8 million).
Full details of provisions are provided in notes 21 and 22 to the condensed
financial statements.
Pensions
The Group operates a number of defined benefit pension schemes in the UK and
US, alongside a number of defined contribution plans. At 31 December 2023, the
UK defined benefit pension plan had a surplus of $391.9 million (2022: $432.4
million) and other schemes had deficits totalling $80.1 million (2022: $73.2
million).
The Group's largest pension scheme, the UK Pension Plan, has total scheme
assets of $2,822.5 million (2022: $2,690.1 million) and pension scheme
obligations of $2,430.6 million (2022: $2,257.7 million) and is therefore 116%
(2022: 119%) funded on an IAS 19 basis. There was an increase in scheme
liabilities arising from a lower discount rate used in the actuarial
assumptions, which is partially offset by an increase in scheme assets.
In assessing the potential liabilities, judgement is required to determine the
assumptions for inflation, discount rate and member longevity. The assumptions
at 31 December 2023 showed a small reduction in the discount rate which
results in higher scheme liabilities resulting in an overall decrease to the
surplus compared to December 2022. Full details of pension assets and
liabilities are provided in note 33 to the condensed financial statements.
The UK defined benefit pension plan was estimated to have a surplus on a
Technical Provisions basis at the last triennial valuation date which was 31
March 2023 subject to finalisation of the valuation during 2024. The Group is
currently working closely with the Trustee to agree on a preferred direction
regarding the future of the plan. Options being assessed include moving to a
buy-in insured basis and eventual buy-out with a third party as soon as is
reasonably practical, or to continue to run the WPP for a limited number of
years to potentially generate further surplus. Any surplus could benefit both
the Group and pension members, ensuring that appropriate safeguards for both
the funding position and members' interests are taken into account at all
times.
Contingent liabilities
Details of the Group's contingent liabilities are set out in note 34 to the
condensed financial statements.
Divestments
The final proceeds from the disposal of the Built Environmental Consulting
business were agreed during 2023 upon agreement of the completion balance
sheet between the Group and WSP. This has resulted in an additional gain of
$31.0 million, comprising largely of $27.1 million of cash proceeds and the
release of completion accruals being recognised in discontinued operations.
Notes
1. A reconciliation of operating profit/(loss) to adjusted EBITDA is
presented in table below and is a key unit of measurement used by the Group in
the management of its business.
2023 2022
(unaudited) (re-presented)
$m $m
Operating profit/(loss) per income statement 37.5 (565.2)
Share of joint venture finance expense and tax (note 13) 16.3 14.3
Exceptional items (note 5) 76.7 663.5
Amortisation (including joint ventures) 161.1 153.4
Depreciation (including joint ventures) 26.2 29.3
Depreciation of right of use assets 103.1 90.5
Impairment of joint venture investments and PP&E 1.8 2.4
Adjusted EBITDA (continuing operations) 422.7 388.2
Discontinued operation
Operating (loss)/profit (discontinued) (15.2) 63.1
Exceptional items (note 7) 5.0 6.7
Adjusted EBITDA (discontinued operation) (10.2) 69.8
Total Group Adjusted EBITDA 412.5 458.0
2. Adjusted diluted earnings per share (AEPS) is calculated by dividing
earnings attributable to owners before exceptional items and amortisation
relating to acquisitions, net of tax, by the weighted average number of
ordinary shares in issue during the period, excluding shares held by the
Group's employee share ownership trusts and is adjusted to assume conversion
of all potentially dilutive ordinary shares. AEPS on continuing operations
excludes the adjusted loss from discontinued operations, net of tax of $10.2
million (2022: profit of $60.2 million). In 2023, AEPS was not adjusted to
assume conversion of all potentially dilutive ordinary shares because the
unadjusted result is a loss.
3. Number of people includes both employees and contractors at 31
December 2023.
4. Net debt to adjusted EBITDA cover on a covenant basis is presented in
the table below:
2023 2022
(unaudited)
$m $m
Net debt excluding lease liabilities (reported basis) (note 31) 693.5 393.2
Covenant adjustments 17.7 16.2
Net debt (covenant basis) 711.2 409.4
Adjusted EBITDA (covenant basis) 341.2 315.1
Net debt to Adjusted EBITDA (covenant basis) - times 2.08 1.3
Adjusted EBITDA (covenant basis) is on a rolling 12 month period and excludes
adjusted EBITDA from the discontinued operation and the impact of applying
IFRS 16. The funding agreements require that covenants are calculated by
applying IAS 17 rather than IFRS 16. The covenant adjustment to net debt
relates to finance leases which would be on the balance sheet if applying IAS
17. Note: the covenant basis shown above refers to the measure as calculated
for our RCF. The measure used for our USPP senior loan notes is not materially
different from the covenant measure shown above.
5. Interest cover on a covenant basis is presented in the table below:
2023 2022
(unaudited)
$m $m
Net finance expense 81.5 109.8
Covenant adjustments (1.2) (4.8)
Non-recurring net finance expense (1.9) (37.5)
Net finance expense (covenant basis) 78.4 67.5
Adjusted EBITA (covenant basis) 315.0 285.9
Interest cover (covenant basis) - times 4.0 4.2
The difference between adjusted EBITDA (covenant basis) and adjusted EBITA
(covenant basis) is $26.2 million (2022: $29.2 million) and is mainly
explained by 12-month rolling pre-IFRS 16 depreciation charges of $26.2
million (2022: $29.3 million).
6. Reconciliation to GAAP measures between consolidated cash flow
statement and cash flow and net debt reconciliation
2023 2022
(unaudited)
$m $m
Decrease in provisions (91.0) (123.1)
Prior year cash exceptionals 68.9 79.4
Adjusted movement in provisions (22.1) (43.7)
Increase in receivables (77.5) (97.5)
Carrying value of business disposed (operating activity) 9.8 -
Adjusted increase in receivables (67.7) (97.5)
Decrease in payables (54.4) (398.9)
Prior year cash exceptionals 67.1 131.3
Adjusted increase/(decrease) in payables 12.7 (267.6)
Tax paid (97.7) (103.9)
Tax paid on disposal of business - 22.0
Adjusted tax paid (97.7) (81.9)
Disposal of businesses (net of cash disposed and tax paid) (22.5) 1,751.4
Tax paid on disposal of business - (22.0)
Divestments (22.5) 1,729.4
Proceeds from disposal of investment in joint ventures 15.9 -
Proceeds on disposal of business (operating activity) (15.9) -
Adjusted disposal of investment in joint ventures - -
Adjusted cash generated from operations 295.9 47.3
Cash exceptionals (133.9) (304.2)
Proceeds on disposal of business (operating activity) (15.9) -
Cash generated from/(used in) operations 146.1 (256.9)
Proceeds on disposal of business (operating activity) 15.9 -
Purchase of property, plant and equipment (18.8) (27.6)
Proceeds from sale of property, plant and equipment 8.2 7.1
Purchase of intangible assets (126.4) (109.2)
Interest received 1.1 4.5
Interest paid (81.7) (98.1)
Tax paid (97.7) (81.9)
Non-cash movement in leases (160.9) (41.7)
Other 1.4 (20.5)
Free cash flow (312.8) (624.3)
Decreases in provisions, receivables and payables, cash generated from
operations and tax paid have been adjusted to show exceptional items
separately to present significant items separately from the rest of the cash
flow either by virtue of size or nature and reflects how the Group evaluates
cash performance of the business.
Prior year cash exceptionals is defined as cash payments made in the current
period in respect of amounts provided for in prior periods.
The proceeds on disposal of business represents the sale of a joint venture
contained within Investment Services. Management consider this as part of
Investment Services trading activity and therefore is included within adjusted
cash generated from operations.
Consolidated income statement
for the year to 31 December 2023
2023 (unaudited) 2022 (re-presented*)
Note Pre-exceptional items Exceptional items Total Pre-exceptional Exceptional Total
items
items
$m $m $m
$m
$m $m
Continuing operations
Revenue 1,2,5 5,900.7 - 5,900.7 5,469.3 (8.0) 5,461.3
Cost of sales 5 (5,191.1) (24.7) (5,215.8) (4,800.6) (17.0) (4,817.6)
Gross profit 709.6 (24.7) 684.9 668.7 (25.0) 643.7
Administrative expenses 5 (614.4) (31.6) (646.0) (600.8) (96.2) (697.0)
Impairment loss on trade receivables and contract assets (23.8) (20.4) (44.2) - - -
Impairment of goodwill and intangible assets 5 - - - - (542.3) (542.3)
Share of post-tax profit from joint ventures 13 42.8 - 42.8 30.4 - 30.4
Operating profit/(loss) 114.2 (76.7) 37.5 98.3 (663.5) (565.2)
Finance income 3 19.4 - 19.4 6.9 - 6.9
Finance expense 3,5 (108.5) (11.1) (119.6) (127.2) (5.9) (133.1)
Profit/(loss) before taxation from continuing operations 4,5 25.1 (87.8) (62.7) (22.0) (669.4) (691.4)
Taxation 5,6 (54.6) (10.4) (65.0) (47.3) 36.4 (10.9)
Loss for the year from continuing operations (29.5) (98.2) (127.7) (69.3) (633.0) (702.3)
Discontinued operation
(Loss)/profit from discontinued operations, net of tax 7 (10.2) 32.7 22.5 60.2 290.4 350.6
Loss for the year (39.7) (65.5) (105.2) (9.1) (342.6) (351.7)
(Loss)/profit attributable to:
Owners of the parent (45.2) (65.5) (110.7) (13.7) (342.6) (356.3)
Non-controlling interests 30 5.5 - 5.5 4.6 - 4.6
(39.7) (65.5) (105.2) (9.1) (342.6) (351.7)
Earnings per share (expressed in cents per share)
Basic 9 (16.1) (52.4)
Diluted 9 (16.1) (52.4)
Earnings per share - continuing operations (expressed in cents per share)
Basic 9 (19.4) (103.9)
Diluted 9 (19.4) (103.9)
* The comparative information has been re-presented in line with the
requirements of IFRS 5, paragraph 36, due to the reclassification of Built
Environment Consulting Saudi Arabia from discontinued into continuing
operations following a decision not to dispose of that business (note 7).
Consolidated statement of comprehensive income/expense
for the year to 31 December 2023
Note 2023 2022
(unaudited) *restated
$m $m
Loss for the year (105.2) (351.7)
Other comprehensive (expense)/income from continuing operations
Items that will not be reclassified to profit or loss
Re-measurement (losses)/gains on retirement benefit obligations 33 (82.2) 168.0
Movement in deferred tax relating to retirement benefit obligations 6 18.0 (41.6)
Total items that will not be reclassified to profit or loss (64.2) 126.4
Items that may be reclassified subsequently to profit or loss
Cash flow hedges 29 3.8 5.1
Tax on derivative financial instruments 6 (0.4) (1.7)
Exchange movements on retranslation of foreign operations 29 58.2 (165.1)
Total items that may be reclassified subsequently to profit or loss 61.6 (161.7)
Other comprehensive expense from continuing operations for the year, net of (2.6) (35.3)
tax
Other comprehensive (expense)/income from discontinued operations
Re-measurement gains on retirement benefit schemes 33 - 2.9
Net exchange movements on disposal of foreign currency operations* - 54.5
Exchange movements on retranslation of foreign operations 29 - (57.9)
Other comprehensive expense from discontinued operations for the year, net of - (0.5)
tax
Total comprehensive expense for the year (107.8) (387.5)
Total comprehensive expense for the year is attributable to:
Owners of the parent (113.3) (392.1)
Non-controlling interests 5.5 4.6
(107.8) (387.5)
Exchange movements on the retranslation of foreign operations could be
subsequently reclassified to profit or loss in the event of the disposal of a
business.
* Based on the requirements of IAS 1 Presentation of Financial Statements, the
net exchange movements on disposal of foreign currency operations of $54.5m
should have been deducted from the statement of comprehensive income and
expense for the year ending 31 December 2022, and the prior year comparative
has been adjusted to reflect this. This matter came to the attention of
the directors following the Financial Reporting Council's Corporate Reporting
Review Team ("FRC") enquiry. The reclassification adjustment had no impact
on loss for the year, cash flows or any of the balance sheet captions in the
current or prior period.
Consolidated balance sheet
as at 31 December 2023
Note 2022
2023 $m
(unaudited)
$m
Assets
Non-current assets
Goodwill and other intangible assets 10 4,319.0 4,309.1
Property plant and equipment 11 65.3 82.4
Right of use assets 12 355.9 276.0
Investment in joint ventures 13 178.1 156.5
Other investments 13 51.3 56.0
Long term receivables 15 184.2 129.5
Retirement benefit scheme surplus 33 391.9 432.4
Deferred tax assets 23 43.1 61.2
5,588.8 5,503.1
Current assets
Inventories 14 16.3 11.1
Trade and other receivables 15 1,554.4 1,545.0
Financial assets 15 9.2 10.8
Income tax receivable 57.9 40.7
Assets held for sale - 21.0
Cash and cash equivalents 16 434.0 536.7
2,071.8 2,165.3
Total assets 7,660.6 7,668.4
Liabilities
Current liabilities
Borrowings 18 315.3 345.9
Trade and other payables 17 1,706.7 1,687.6
Income tax liabilities 115.8 218.1
Lease liabilities 12 83.4 83.2
Provisions 22 57.6 44.9
Liabilities held for sale - 20.6
2,278.8 2,400.3
Net current liabilities (207.0) (235.0)
Non-current liabilities
Borrowings 18 812.2 584.0
Deferred tax liabilities 23 76.6 100.1
Retirement benefit scheme deficit 33 80.1 73.2
Lease liabilities 12 317.4 259.7
Other non-current liabilities 19 69.4 106.8
Asbestos related litigation 21 306.5 311.4
Provisions 22 77.7 103.4
1,739.9 1,538.6
Total liabilities 4,018.7 3,938.9
Net assets 3,641.9 3,729.5
Equity attributable to owners of the parent
Share capital 25 41.3 41.3
Share premium 26 63.9 63.9
Retained earnings 27 1,312.9 1,224.4
Merger reserve 28 2,298.8 2,540.8
Other reserves 29 (80.4) (142.4)
Total equity attributable to owners of the parent 3,636.5 3,728.0
Non-controlling interests 30 5.4 1.5
Total equity 3,641.9 3,729.5
Consolidated statement of changes in equity
for the year to 31 December 2023
Equity attributable to owners of the parent
$m Non-
Share Share Retained Merger reserve Other controlling Total
*restated capital premium earnings $m reserves interests equity
Note $m $m $m $m $m $m
At 1 January 2022 41.3 63.9 1,415.0 2,540.8 21.0 4,082.0 3.3 4,085.3
(Loss)/Profit for the year - - (356.3) - - (356.3) 4.6 (351.7)
Other comprehensive income/(expense):
Re-measurement gains on retirement benefit schemes 33 - - 168.0 - - 168.0 - 168.0
Re-measurement gains on retirement benefit schemes (discontinued) 33
- - 2.9 - - 2.9 - 2.9
Movement in deferred tax relating to retirement benefit schemes 6
- - (41.6) - - (41.6) - (41.6)
Cash flow hedges 29 - - - - 5.1 5.1 - 5.1
Tax on derivative financial instruments 6 - - (1.7) - - (1.7) - (1.7)
Net exchange movements on retranslation of foreign operations 29
- - - - (165.1) (165.1) - (165.1)
Net exchange movements on disposal of foreign currency operations* 29 - - - - 54.5 54.5 - 54.5
Net exchange movements on retranslation of foreign operations (discontinued) 29
- - - - (57.9) (57.9) - (57.9)
Total comprehensive (expense)/income for the year* - - (228.7) - (163.4) (392.1) 4.6 (387.5)
Transactions with owners:
Dividends paid 8,30 - - - - - - (1.1) (1.1)
Credit relating to share based charges 24 - - 20.7 - - 20.7 - 20.7
Deferred tax impact of rate change in equity 6 - - (0.8) - - (0.8) - (0.8)
Other tax movements in equity 6 - - (1.3) - - (1.3) - (1.3)
Exchange movements in respect of shares held by employee share trusts 27
- - 12.5 - - 12.5 - 12.5
Purchase of company shares by Employee Share Trust for the Share Incentive 27
Plan (SIP)
- - 1.7 - - 1.7 - 1.7
Transactions with non-controlling interests 30 - - 5.3 - - 5.3 (5.3) -
At 31 December 2022 41.3 63.9 1,224.4 2,540.8 (142.4) 3,728.0 1.5 3,729.5
* Based on the requirements of IAS 1 Presentation of Financial Statements, the
net exchange movements on disposal of foreign currency operations of $54.5m
should have been deducted from the statement of comprehensive income and
expense for the year ending 31 December 2022. Within the Consolidated
statement of changes in equity, the $54.5m was previously presented as a
transaction with owners and so has been reclassified to total comprehensive
income and expense. This matter came to the attention of the directors
following the Financial Reporting Council's Corporate Reporting Review Team
("FRC") enquiry. The reclassification adjustment had no impact on loss for
the year, cash flows or any of the balance sheet captions in the current or
prior period.
Equity attributable to owners of the parent
$m Non-
Share Share Retained Merger reserve Other controlling Total
(unaudited) capital premium earnings $m reserves interests equity
Note $m $m $m $m $m $m
At 1 January 2023 41.3 63.9 1,224.4 2,540.8 (142.4) 3,728.0 1.5 3,729.5
(Loss)/Profit for the year - - (110.7) - - (110.7) 5.5 (105.2)
Other comprehensive income/(expense):
Re-measurement losses on retirement benefit schemes 33
- - (82.2) - - (82.2) - (82.2)
Movement in deferred tax relating to retirement benefit schemes 6
- - 18.0 - - 18.0 - 18.0
Cash flow hedges 29 - - - - 3.8 3.8 - 3.8
Tax on derivative financial instruments 6 - - (0.4) - - (0.4) - (0.4)
Net exchange movements on retranslation of foreign operations 29
- - - - 58.2 58.2 - 58.2
Total comprehensive (expense)/income for the year - - (175.3) - 62.0 (113.3) 5.5 (107.8)
Transactions with owners:
Dividends paid 8,30 - - - - - - (1.6) (1.6)
Credit relating to share based charges 24 - - 19.6 - - 19.6 - 19.6
Deferred tax impact of rate change in equity 6 - - 0.7 - - 0.7 - 0.7
Other tax movements in equity 6 - - (0.1) - - (0.1) - (0.1)
Purchase of company shares by Employee Share Trust for the Share Incentive
Plan (SIP)
27 - - 1.6 - - 1.6 - 1.6
Transfer from merger reserve to retained earnings 28 - - 242.0 (242.0) - - - -
At 31 December 2023 41.3 63.9 1,312.9 2,298.8 (80.4) 3,636.5 5.4 3,641.9
During 2023, John Wood Group Holdings Limited paid $242.0m to John Wood Group
PLC in a partial settlement of the promissory note, which was put in place
during 2019. The repayment represented qualifying consideration and as a
result the Company transferred an equivalent portion of the merger reserve to
retained
earnings.
Other reserves include the capital redemption reserve, capital reduction
reserve, currency translation reserve and the hedging reserve.
Consolidated cash flow statement
for the year to 31 December 2023
Note 2023 2022
(unaudited) $m
$m
Reconciliation of loss to cash generated from operations:
Loss for the period (105.2) (351.7)
Adjustments:
Depreciation 11 21.0 25.2
Depreciation on right of use assets 12 95.2 82.3
Gain on disposal of leases (1.7) -
Gain on disposal of property plant and equipment 4 (2.6) (1.6)
Impairment of goodwill and intangible assets 10 - 542.3
Impairment of property, plant and equipment 11 1.8 0.4
Impairment of joint ventures 13 - 2.0
Gain on disposal of investment in joint ventures 13 (6.2) -
Amortisation of intangible assets 10 159.7 151.9
Share of post-tax profit from joint ventures 13 (42.8) (30.4)
Gain on disposal of business (33.0) (514.5)
Net finance costs 3 100.2 127.9
Share based charges 24 19.6 20.7
Decrease in provisions and employee benefits (91.0) (123.1)
Dividends from joint ventures 13 15.6 30.1
Other exceptional items - non-cash impact 1 84.5 35.3
Tax charge 6 58.3 236.2
Changes in working capital (excluding effect of acquisition and divestment of
subsidiaries)
Decrease/(increase)in inventories 1.5 (1.6)
Increase in receivables (77.5) (97.5)
Decrease in payables (54.4) (398.9)
Exchange movements 3.1 8.1
Cash generated from / (used in) operations 146.1 (256.9)
Tax paid (97.7) (103.9)
Net cash generated from / (used in) operating activities 48.4 (360.8)
Cash flows from investing activities
Disposal of businesses (net of cash disposed and tax paid) (22.5) 1,751.4
Proceeds from disposal of investment in joint ventures 13 15.9 -
Purchase of property plant and equipment 11 (18.8) (27.6)
Proceeds from sale of property plant and equipment 8.2 7.1
Purchase of intangible assets 10 (126.4) (109.2)
Interest received 3 1.1 4.5
Net cash (used in) / generated from investing activities (142.5) 1,626.2
Cash flows from financing activities
Repayment of short-term borrowings 31 (133.5) (35.0)
Proceeds from short-term borrowings 31 - 88.0
Proceeds from long term borrowings 31 515.0 -
Repayment of long-term borrowings 31 (200.0) (1,039.1)
Payment of lease liabilities 31 (113.3) (121.6)
Proceeds from SIP shares 27 1.6 1.7
Interest paid (81.7) (98.1)
Dividends paid to non-controlling interests 30 (1.6) (1.1)
Net cash used in financing activities (13.5) (1,205.2)
Net (decrease) / increase in cash and cash equivalents 31 (107.6) 60.2
Effect of exchange rate changes on cash and cash equivalents 31 4.9 (26.5)
Opening cash and cash equivalents 536.7 503.0
Closing cash and cash equivalents 16 434.0 536.7
Cash at bank and in hand at 31 December 2023 includes $127.7m (2022: $328.4m)
that is part of the Group's cash pooling arrangements. For internal reporting
and for the purposes of the calculation of interest by the bank, this amount
is netted with short-term overdrafts. However, in preparing these financial
statements, the Group is required to gross up both its cash and short-term
borrowings figures by this amount. Movement in short-term overdrafts are
presented as part of the cash flows from financing activities as the overdraft
facilities form part of the Group's financing.
The proceeds from long-term borrowings of $515.0m reflects the increased
utilisation of the long-term revolving credit facility and the new $200.0m
term loan which was issued in December 2023. The new term loan of $200.0m
led to the early repayment of the UKEF loan.
Payment of lease liabilities includes the cash payments for the principal
portion of lease payments of $94.6m (2022: $103.7m) and for the interest
portion of $18.7m (2022: $17.9m). The classification of interest paid within
financing activities is in line with the Group accounting policy.
The Group has elected to present a cash flow statement that includes an
analysis of all cash flows in total, including both continuing and
discontinued operations. Amounts related to the discontinued operation by
operating, investing and financing activities are disclosed in note 7.
Included in the disposal of businesses are proceeds received of $27.1m
relating to the sale of Built Environment Consulting and $17.5m on the Gulf of
Mexico asset sale, offset by $65.0m of tax paid and $2.1m professional fees.
General information
John Wood Group PLC, its subsidiaries and joint ventures, ('the Group')
delivers comprehensive services to support its customers across the complete
lifecycle of their assets, from concept to decommissioning, across a range of
energy and materials markets. Details of the Group's activities during the
year are provided in the Strategic Report. John Wood Group PLC is a public
limited company, incorporated and domiciled in the United Kingdom and listed
on the London Stock Exchange. Copies of the Group financial statements are
available from the Company's registered office at Sir Ian Wood House, Hareness
Road, Altens Industrial Estate, Aberdeen AB12 3LE.
The financial information in this announcement does not constitute the
Company's statutory accounts for the years ended 31 December 2023 or 2022 but
is derived from those accounts. Statutory accounts for 2022 have been
delivered to the registrar of companies, and those for 2023 will be delivered
in due course.
The auditor had reported on the Company's statutory accounts for the year
ended 31 December 2022 accounts; their reports were (i) unqualified, (ii) did
not include a reference to any matters to which the auditor drew attention by
way of emphasis without qualifying their report and (iii) did not contain a
statement under section 498 (2) or (3) of the Companies Act 2006.
The Company's statutory accounts for the year ended 31 December 2023 will be
finalised on the basis of the financial information provided by the directors
in this preliminary announcement and will be delivered to the registrar of
companies in due course.
Accounting Policies
Basis of preparation
These financial statements have been prepared in accordance with UK-adopted
international accounting standards. The condensed financial statements have
been prepared on a going concern basis under the historical cost convention as
modified by the revaluation of financial assets and liabilities at fair value
through the income statement. The financial statements are presented in US
dollars and all values are rounded to the nearest $0.1m, unless otherwise
stated.
Going concern
The directors have undertaken a rigorous assessment of going concern and
liquidity over a period of at least 12 months from the date of approval of
these financial statements (the going concern period), which includes
financial forecasts up to the end of 2025 to reflect severe, but plausible
scenarios. The directors have considered as part of this assessment the
impact of the events that happened post balance sheet date and up to the date
of issue of these financial statements.
To satisfy themselves that the Group has adequate resources for the going
concern assessment period, the directors have reviewed the Group's existing
debt levels, the forecast compliance with debt covenants, and the Group's
ability to generate cash from trading activities. As of 31 December 2023, the
Group's principal debt facilities comprise a $1,200.0m revolving credit
facility maturing in October 2026; a $200.0m term loan which matures in
October 2026 and $352.5m of US private placement debt repayable in various
tranches between July 2024 and July 2031, with around 75% due after the end of
2025. The weighted average maturity of the Group's debt profile has been
extended as a result of a new term loan being put in place which replaced an
existing facility of the same value and that was due to mature in September
2024. At 31 December 2023, the Group had headroom of $843.1m under its
principal debt facilities and a further $59.8m of other undrawn borrowing
facilities. The Group also expects to have sufficient levels of headroom in
the severe but plausible downside scenarios modelled.
At 31 December 2023, the Group had net current liabilities of $207.0m (2022:
$235.0m).
The directors have considered a range of scenarios on the Group's future
financial performance and cash flows. These scenarios reflect our outlook for
the energy and materials end markets. Energy includes oil and gas and the
Group forecast growth in this area is underpinned by increased focus on energy
security and decarbonisation of operations. During 2023, for example, the
Group secured a new long-term strategic partnership around the management of
UK North Sea Operations and deployed the Group's expertise in decarbonisation,
digitalisation and asset life extension to enhance an international energy
company's global portfolio of assets. Materials includes minerals, chemicals
and life sciences which are underpinned by growing populations and global net
zero ambitions. The order book gives significant coverage over 2024 and 2025
revenues. Further, the order book is 86% reimbursable which reflects the
lower risk profile of the Group's forecast cash flows over the going concern
period.
The directors have also considered severe, but plausible, downside scenarios
which reflect material reductions in 2024 and 2025 revenue of 7% and 5%
respectively and reductions of 1% in gross margin percentage from the base,
board approved, scenario. The directors believe that the additional
reductions represent a severe, but plausible, downside case. This could
result from a worsening economic climate which could lead to unexpected
deferrals or cancellations of contracts by our clients. In each of the
scenarios modelled, the financial covenants were passed with significant
facility headroom remaining available. The interest cover covenant has
increased levels of headroom after adjusting for the non-recurring interest
related to facilities repaid and cancelled within the 12-month period up to 31
December 2023. The directors included the impact of the removal of the
receivables financing facilities (which are not committed) of $200m in the
base scenario and the impact of additional adverse movements in working
capital as additional, more severe, downside scenarios. The Group still
had sufficient headroom to meet its liabilities as they fall due with these
additional sensitivities.
Consequently, the directors are confident that the Group and company will have
sufficient funds to continue to meet its liabilities as they fall due for at
least 12 months from the date of approval of the financial statements and
therefore have prepared the financial statements on a going concern basis.
Significant accounting policies
The Group's significant accounting policies adopted in the preparation of
these financial statements are set out below. These policies have been
consistently applied to all the years presented.
Critical accounting judgements and estimates
The preparation of the financial statements requires the use of estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of revenue and
expenses during the year. These estimates and judgements are based on
management's best knowledge of the amount, event or actions and actual results
ultimately may differ from those estimates. Group management believe that the
estimates and assumptions listed below have a significant risk of resulting in
a material adjustment to the carrying amounts of assets and liabilities.
(a) Revenue recognition on
fixed price and long-term contracts (estimate)
The Group has a large number of fixed price long-term contracts which are
accounted for in accordance with IFRS 15 and require estimates to be made for
contract revenue. Fixed price contracts revenue from continuing operations
amounted to $1,195.3m in 2023 (2022: $1,179.8m), and is comprised of several
hundred individually immaterial contracts which are ongoing at any one point
in time and these often span reporting periods and include small short
duration consultancy contracts. They are all at varying stages of completion
and carry their own unique risks. Hence, with the exception of the Aegis
contract, which is described further in note 2, it is impracticable to provide
any meaningful disclosure on the key sensitivities that would impact on
revenue recognition, such as those outlined below.
Uncertainties include the estimation of:
Forecast costs to complete the contract
At the end of the reporting period the Group is required to estimate costs to
complete on fixed price contracts based on the work to be performed after the
reporting date, which may span more than one reporting period. This involves
an objective evaluation of project progress against the delivery schedule,
evaluation of the work to be performed and the associated costs to fully
deliver the contract to the customer and contingencies. These factors are
affected by a variety of uncertainties that depend on the outcome of future
events, and so often need to be revised as events unfold, and therefore it is
not practically possible to present these sensitivities which will be
different across a large number of individually immaterial contracts. The
estimates from these contracts, in aggregate, could nevertheless have a
possible material impact on revenue, cost of sales, gross amounts due to
customers and gross amounts due from customers.
Recognition of revenue from variation orders ("VOs")
As contracts progress management may deem that the company is entitled to VOs
increasing the contract price under the existing contracts (variable
considerations). In some instances, changes to the scope or requirements of
a project equate to changing the contract in a way that entitles the Company
to additional consideration (contract modifications).
Where VOs are linked to variable consideration management estimate the value
of revenue to be recognised such that it is considered highly probable that a
significant reversal in the amount of cumulative revenue recognised to date
will not occur when the uncertainty associated with the VO is subsequently
resolved. This assessment is reconsidered at each reporting date. The
assessment is based on discussions with the customer and a range of factors,
including contractual entitlement, prior experience of the customer and of
similar contracts with other customers.
Where VOs are linked to contract modifications, management recognise
associated revenue when such modifications are approved and when the company
has an enforceable right to payment. In cases where the price has not been
agreed, management estimate the value of revenue to be recognised such that it
is considered highly probable that a significant reversal in the amount of
cumulative revenue recognised to date will not occur when the final price for
the contract modification has been agreed. The Group has governance
processes in place, whereby unapproved variation orders in excess of $5m
require approval by senior management. As at the year end, there were two
unapproved variation orders totalling $17m which were approved under this
process. Revenue recognised in 2023 and 2022 associated with unapproved
variation orders was immaterial.
On the Aegis contract, management deem that the Company is entitled to
variable consideration under the existing contractual arrangements. Only the
proportion of this deemed entitlement that is assessed as highly probable is
recognised as part of the revenue calculation. The assessment of the
proportion of the deemed entitlement to VOs that is considered to be highly
probable is a judgement made by management in consultation with internal and
external experts. The amount of the accumulated recognised VOs in relation
to the Aegis contract is material.
Liquidated damages ("LDs")
LDs are designated damages (negative variable considerations) that are paid by
the defaulting party in the event that certain contractual requirements are
not met. Management make an assessment of the value of LDs to be provided at
the reporting date such that it is considered highly probable that a
significant reversal in the amount of cumulative revenue recognised will not
occur when the uncertainty associated with the LDs is subsequently resolved.
This initial assessment is reconsidered at each reporting date. The
assessment is based on a best estimate of the monetary amount of LDs payable
which involves a number of management assumptions and judgements including
discussions with the customer, contractual entitlement, prior experience of
the customer, prior experience of similar contracts with other customers and
other forms of documentary evidence. Other than the Aegis contract, there
were no other individually material contractual liquidated damages as at the
year ended 31 December 2023. On Aegis, given the delay in achieving
completion, there is potential under the contract for LDs to be material,
although we believe that we have strong arguments for extension of time and
dispute how the damages are being applied. As at 31 December 2023 management
has assessed the extent to which LDs are likely to apply and these have been
deducted from cumulative revenue recognised. Refer to note 2 for further
details of this contract.
Estimates are updated regularly, and significant changes are highlighted
through established internal review procedures. The contract reviews focus on
the timing and recognition of revenue including income from incentive
payments, scope variations and claims.
See note 2 for further details.
(b) Impairment of goodwill (estimate)
The Group carries out impairment reviews whenever events or changes in
circumstance indicate that the carrying value of goodwill may not be
recoverable. In addition, the Group carries out an annual impairment review.
Management expectations are formed in line with performance to date and
experience, as well as available external market data.
An impairment loss is recognised when the recoverable amount of goodwill is
less than the carrying amount. The impairment tests are carried out by CGU
('Cash Generating Unit') and reflect the latest Group budgets and forecasts as
approved by the Board. The budgets and forecasts are based on various
assumptions relating to the Group's businesses including assumptions relating
to market outlook, resource utilisation, contract awards and contract
margins. The outlook for the Group is discussed in the Chief Executive's
Review. The discount rate, revenue CAGR and long term growth rates are
critical assumptions. Pre-tax discount rates of between 10.8% and 12.3% have
been used to discount the CGU cash flows and a terminal value is applied using
long term growth rates of 2.4%. The revenue CAGR assumption ranges from 8.3%
to 13.4%. A sensitivity analysis has been performed allowing for possible
changes to the key assumptions used in the impairment model.
See note 10 for further details.
(c) Provisions and
contingent liabilities (judgement and estimate)
The Group records provisions where it has a present obligation (legal or
constructive) as a result of a past event, it is probable that an outflow of
resources will be required to settle the obligation and a reliable estimate of
the obligation can be made. Where the outcome is less than probable, but
more than remote, or a reliable estimate cannot be made, no provision is
recorded but a contingent liability is disclosed in the financial statements,
if material. The recording of provisions is an area which requires the
exercise of management judgement relating to the nature, timing and
probability of the liability and typically the Group's balance sheet includes
contract provisions and provisions for pending legal issues.
As a result of the acquisition of Amec Foster Wheeler ("AFW") in 2017, the
Group has acquired a significant asbestos related liability. Some of AFW's
legacy US and UK subsidiaries are defendants in asbestos related lawsuits and
there are out of court informal claims pending in both jurisdictions.
Plaintiffs claim damages for personal injury alleged to have arisen from
exposure to the use of asbestos in connection with work allegedly performed by
subsidiary companies in the 1970s and earlier. The provision for asbestos
liabilities is the Group's best estimate of the obligation required to settle
claims up until 2050. Group policy is to record annual changes to the
underlying gross estimates where they move by more than 5%.
The critical assumptions applied in determining the asbestos provision
include: indemnity settlement amount, forecasted number of new claims,
estimated defence costs and the discount rate. The Group uses a blended
yield curve rate to discount its asbestos liabilities. This rate is matched to
the expected duration of the liabilities and the rate used at the end of
December 2023 is 3.64%.
The Group's subsidiaries have been effective in managing the asbestos
litigation, in part, because the Group has access to historical project
documents and other business records going back more than 50 years, allowing
it to defend itself by determining if the claimants were present at the
location of the alleged asbestos exposure and, if so, the timing and extent of
their presence.
The Group has recorded a $29.4m exceptional charge with respect to the
asbestos liability in the period and is principally as a result of an updated
actuarial review which updated the best estimate for recent claims experience
and latest projections. Further details of the asbestos liabilities are
provided in note 21 including a sensitivity analysis showing the impact of
changes to the key assumptions.
(d) Retirement benefit
schemes (estimate)
The value of the Group's retirement benefit schemes' surplus/deficit is
determined on an actuarial basis using several assumptions. Changes in these
assumptions will impact the carrying value of the surplus/deficit. A
sensitivity analysis showing the impact of changes to these assumptions is
provided in note 33. The principal assumptions that impact the carrying value
are the discount rate, the inflation rate and life expectancy. The Group
determines the appropriate assumptions to be used in the actuarial valuations
at the end of each financial year following consultation with the retirement
benefit schemes' actuaries. In determining the discount rate, consideration
is given to the interest rates of high-quality corporate bonds in the currency
in which the benefits will be paid and that have terms to maturity similar to
those of the related retirement benefit obligation. The inflation rate is
derived from the yield curve used in deriving the discount rate and adjusted
by an agreed risk premium. Assumptions regarding future mortality are based on
published statistics and the latest available mortality tables. The Group, in
conjunction with the schemes' actuaries, continues to monitor the impact of
the Covid-19 pandemic on mortality data. The tax rate applied to the surplus
of the UK scheme is 25%, on the basis that there is no expectation that the
manner of any future recovery would be in the form of a refund, which would be
taxed at 35%. Following the Authorised Surplus Payments Charge (Variation of
Rate) Order 2024, the tax rate of 35% will be reduced to 25% from 6 April
2024. As at the balance sheet date, there are no plans to request a refund
and other avenues are being explored to use the surplus. The technical
surplus is not as large as the IAS 19 surplus and so there is a lower limit to
what could be accessed in any event.
The majority of pension scheme assets have quoted prices in active markets.
Scheme assets are revalued at least once per annum to reflect their fair
value. Fair value is based on market price information. If this is not
available, the most recent transaction price, revenue or earnings-based
valuations using unobservable inputs may be used for level 3 investments in
the fair value hierarchy.
Further details of the assumptions and measurements outlined can be seen in
note 33.
Basis of consolidation
The condensed financial statements are the result of the consolidation of the
financial statements of the Group's subsidiary undertakings from the date of
acquisition or up until the date of divestment as appropriate. Subsidiaries
are entities controlled by the Group. The Group 'controls' an entity when it
is exposed to, or has rights to, variable returns from its involvement with
the entity and has the ability to affect those returns through its power over
the entity. All Group companies apply the Group's accounting policies and
prepare financial statements to 31 December. Intra-group balances and
transactions, and any unrealised income and expenses arising from intra-group
transactions, are eliminated.
Joint ventures and joint operations
A joint venture is a type of joint arrangement where the parties to the
arrangement share rights to its net assets. A joint arrangement is an
arrangement of which two or more parties have joint control. Joint control
is the contractually agreed arrangement which exists only when decisions about
the relevant activities require unanimous consent of the parties sharing
control. The considerations made in determining joint control are similar to
those necessary to determine control over subsidiaries.
The Group's interests in joint ventures are accounted for using equity
accounting. Under the equity method, the investment in a joint venture is
initially recognised at cost. The carrying amount of the investment is
adjusted to recognise changes in the Group's share of net assets of the joint
venture from the acquisition date. The results of the joint ventures are
included in the consolidated financial statements from the date the joint
control commences until the date that it ceases. The Group includes its share
of joint venture profit on the line 'Share of post-tax profit from joint
ventures' in the Group income statement and its share of joint venture net
assets in the 'investment in joint ventures' line in the Group balance
sheet.
A joint operation is a joint arrangement whereby the parties that have joint
control of the arrangement have rights to the assets and obligations for the
liabilities relating to the arrangement. The Group accounts for joint
operations by recognising the appropriate proportional share of revenue,
expenses, assets and liabilities.
Presentational currency
The Group's earnings stream is primarily US dollars and the Group therefore
uses the US dollar as its presentational currency.
The following exchange rates have been used in the preparation of these
financial statements:
2023 2022
Average rate £1 = $ 1.2425 1.2324
Closing rate £1 = $ 1.2749 1.2029
Foreign currencies
In each individual entity, transactions in foreign currencies are translated
into the relevant functional currency at the exchange rates ruling at the date
of the transaction. Monetary assets and liabilities denominated in foreign
currencies are retranslated at the exchange rates ruling at the balance sheet
date. Any exchange differences are taken to the income statement.
Income statements of entities whose functional currency is not the US dollar
are translated into US dollars at average rates of exchange for the period and
assets and liabilities are translated into US dollars at the rates of exchange
ruling at the balance sheet date. Exchange differences arising on translation
of net assets in such entities held at the beginning of the year, together
with those differences resulting from the restatement of profits and losses
from average to year end rates, are taken to the currency translation
reserve.
The assets and liabilities of foreign operations, including goodwill and fair
value adjustments arising on the acquisition of a foreign entity are treated
as assets and liabilities of the foreign entity and translated at the exchange
rate ruling at the balance sheet date with any exchange differences taken to
the currency translation reserve.
Foreign currency differences are recognised in Other Comprehensive Income
("OCI") and accumulated in the translation reserve, except to the extent that
the translation difference is allocated to Non-Controlling Interests ("NCI").
When a foreign operation is disposed of in its entirety or partially such that
control, significant influence or joint control is lost, the cumulative amount
in the translation reserve related to the foreign operation is reclassified to
profit or loss as part of the gain or loss on disposal. If the Group
disposes of part of its interest in a subsidiary but retains control, then the
relevant proportion of the cumulative amount is reattributed to NCI. When
the Group disposes of only part of an associate or joint venture while
retaining significant influence or joint control, the relevant proportion of
the cumulative amount is reclassified to profit or loss. The directors
consider it appropriate to record sterling denominated equity share capital in
the financial statements of John Wood Group PLC at the exchange rate ruling on
the date it was raised.
Revenue recognition
Revenue comprises the fair value of the consideration specified in a contract
with a customer and is stated net of sales taxes (such as VAT) and discounts.
The Group recognises revenue when it transfers control over a good or service
to a customer.
With regard to cost reimbursable projects and fixed price contracts, further
detail is provided below about the nature and timing of the satisfaction of
performance obligations in contracts with customers, including payment terms
and the related revenue recognition policies.
Cost reimbursable projects
Revenue is recognised over time as the services are provided based on
contractual rates per man hour in respect of multi-year service contracts. The
amount of variable revenue related to the achievement of key performance
indicators (KPIs) is estimated at the start of the contract, but any revenue
recognised is constrained to the extent that it is highly probable there will
not be a significant reversal in future periods.
Fixed price contacts
Revenue on fixed price contracts for services, construction contracts and
fixed price long-term service agreements is recognised over time according to
the stage of completion reached in the contract by measuring the proportion of
costs incurred for work performed to total estimated costs. Margin is only
recognised when the outcome of the contract can be measured reliably.
Contract modifications are generally not distinct from those in the original
contract due to the significant integration service provided in the context of
the contract and are priced according to the same standalone selling prices of
the original contract. Therefore, modifications are accounted for as a
modification of the existing contract and performance obligations with a
cumulative catch-up adjustment recognised within revenue.
Management assess the value of revenue to be recognised in respect of
variation orders based on the considerations described in the critical
accounting judgements and estimates section above in the paragraph regarding
recognition of revenue from variation orders ("VOs").
A claim is an amount that the contractor seeks to collect from the customer as
reimbursement for costs whose inclusion in the contract price is disputed, and
may arise from, for example, delays caused by the customer, errors in
specification or design and disputed variations in contract work. Claims are
also usually variable considerations and are included in contract revenue only
to the extent that it is highly probable that a significant reversal of
revenue will not occur. Appropriate legal advice is taken in advance of any
material revenue being recognised in respect of claims.
The related contract costs are recognised in the income statement when
incurred. When it is probable that total contract costs will exceed total
contract revenue, the expected loss is recognised immediately.
The Group's payment terms state that all invoices are generally payable within
30 days.
Details of the services provided by the Group are provided under the
'Segmental Reporting' heading.
Contract balances
A contract asset includes gross amounts due from customers, which reflects
work completed for the client which has not yet been billed at the reporting
date. Gross amounts due from customers reflects revenue recognised on the
contract according to the stage of completion, less any progress payments
received, and amounts are transferred to trade receivables when the right to
consideration becomes unconditional. Contract assets are adjusted for any
expected credit loss allowance considering the probability of default by the
counterparty.
Contract liabilities include gross amounts due to customers and primarily
relate to advance consideration received from customers, for which revenue is
recognised over time.
Exceptional items
Exceptional items are those significant items which are separately disclosed
by virtue of their size or incidence to enable a full understanding of the
Group's financial performance. Transactions which may give rise to material
exceptional items include gains and losses on divestment of businesses; write
downs or impairments of assets including goodwill; restructuring and
redundancy costs or provisions; litigation or regulatory settlements; asbestos
related income or charges; tax provisions or payments; provisions for onerous
contracts and acquisition and divestment costs. The tax impact on these
transactions is shown separately in the exceptional items note to the
financial statements (note 5).
Restructuring and redundancy costs or provisions will include those costs
associated with major Board approved programmes which will deliver longer term
benefits to the Group. If this involves closure of a material office, discrete
operating unit or service line the exceptional cost will include redundancy
and severance of impacted employees, onerous contract provisions, the write
off any unrecoverable net assets and any reversals in future periods.
Provisions for restructuring will be recognised in line with the policy on
Provisions below.
Finance expense/income
Interest income and expense is recorded in the income statement in the period
to which it relates. Arrangement fees and expenses in respect of the Group's
debt facilities are amortised over the period which the Group expects the
facility to be in place. Interest relating to the unwinding of discount on
deferred and contingent consideration, IFRS 16 lease liabilities and asbestos
liabilities is included in finance expense. Interest expense and interest
income on scheme assets relating to the Group's retirement benefit schemes are
also included in finance income/expense. See note 3 for further details.
Interest income or expense is recognised using the effective interest
method. The 'effective interest rate' is the rate that exactly discounts
estimated future cash payments or receipts through the expected life of the
financial instrument to:
- The gross carrying amount of the financial asset; or
- The amortised cost of the financial liability.
Dividends payable
Dividends to the Group's shareholders are recognised as a liability in the
period in which the dividends are approved by shareholders. Interim
dividends are recognised when paid. See note 8 for further details.
Business combinations
The Group accounts for business combinations using the acquisition method of
accounting when control is transferred to the Group. The consideration
transferred is measured at fair value, as are the identifiable net assets
acquired. Any goodwill that arises is tested annually for impairment.
Intangible assets arising on business combinations are tested for impairment
when indicators of impairment exist. Acquisition costs are expensed and
included in administrative expenses in the income statement.
Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair
value of the net assets acquired. Goodwill is carried at cost less accumulated
impairment losses. Goodwill is not amortised.
Intangible assets
Intangible assets are carried at cost less accumulated amortisation.
Intangible assets are recognised if it is probable that there will be future
economic benefits attributable to the asset, the cost of the asset can be
measured reliably, the asset is separately identifiable and there is control
over the use of the asset. Where the Group acquires a business, intangible
assets on acquisition are identified and evaluated to determine the carrying
value on the acquisition balance sheet. Intangible assets are amortised over
their estimated useful lives on a straight-line basis, as follows:
Software 3-5 years
Development costs and licenses 3-5 years
Intangible assets on acquisition
- Customer contracts and relationships 5-13 years
- Order backlog 2-5 years
- Brands 16 years
Property plant and equipment
Property plant and equipment (PP&E) is stated at cost less accumulated
depreciation and impairment. No depreciation is charged with respect to
freehold land and assets in the course of construction.
Depreciation is calculated using the straight-line method over the following
estimated useful lives of the assets:
Freehold buildings 25‑50 years
Leasehold improvements period of lease
Plant and equipment 3‑10 years
When estimating the useful life of an asset group, the principal factors the
Group takes into account are the durability of the assets, the intensity at
which the assets are expected to be used and the expected rate of
technological developments. Asset lives and residual values are assessed at
each balance sheet date.
Refer to the Leases policy for the Group's policy with respect to the right of
use assets.
Impairment
The Group performs impairment reviews in respect of PP&E, investment in
joint ventures and intangible assets whenever events or changes in
circumstance indicate that the carrying amount may not be recoverable. In
addition, the Group carries out impairment reviews in respect of goodwill, at
least annually. An impairment loss is recognised when the recoverable amount
of an asset, which is the higher of the asset's fair value less costs to sell
and its value in use, is less than its carrying amount.
Impairment losses are recognised in profit or loss. They are allocated to
first reduce the carrying amount of any goodwill allocated to the CGU, and
then to reduce the carrying amounts of the other assets in the CGU on a
pro-rata basis.
For the purposes of impairment testing, assets are grouped together into the
smallest group of assets that generates cash inflows from continuing use that
are largely independent of the cash inflows of other assets or cash generating
units ("CGUs"). Goodwill arising from a business combination is allocated
to the appropriate CGU or groups of CGUs that are expected to benefit from the
synergies of the combination. The CGUs are aligned to the structure the
Group uses to manage its business. Cash flows are discounted in determining
the value in use.
See note 10 for further details of goodwill impairment testing and note 13 for
details of impairment of investment in joint ventures.
Cash and cash equivalents
Cash and cash equivalents include cash in hand and other short-term bank
deposits with original maturities of three months or less. Bank overdrafts
are included within borrowings in current liabilities. The Group presents
balances that are part of a pooling arrangement with no right of offset on a
gross basis in both cash and short-term borrowings.
Trade receivables
Trade receivables are recognised initially at fair value and subsequently
measured at amortised cost using the effective interest method, less provision
for impairment. Trade receivables are typically classified as Held to Collect.
The Group recognises loss allowances for Expected Credit Losses ('ECLs') on
trade receivables and gross amounts due from customers, measured at an amount
equal to lifetime ECLs. ECLs are a probability-weighted estimate of credit
losses. Credit losses are measured as the present value of all cash shortfalls
(i.e. the difference between the cash flows due to the entity in accordance
with the contract and the cash flows that the Group expects to receive).
ECLs are discounted at the effective interest rate of the financial asset.
At each reporting date, the Group assesses whether financial assets carried at
amortised cost are credit-impaired. A financial asset is 'credit-impaired'
when one or more events that have a detrimental impact on the estimated future
cash flows of the financial asset have occurred. Evidence that a financial
asset is credit-impaired includes a customer being in significant financial
difficulty or a breach of contract such as a default. The gross carrying
amount of a financial asset is written off when the Group has no reasonable
expectation of
recovering a financial asset in its entirety or a portion thereof. For
individual customers, the Group individually makes an assessment with respect
to the timing and amount of write-off based on whether there is a reasonable
expectation of recovery.
The Group has non-recourse financing arrangements in which funds are received
in relation to trade receivable balances before the due date for payment.
Trade receivables are derecognised on receipt of the payment from the bank.
See note 15 for further details.
Asbestos related receivables
Asbestos related receivables represents management's best estimate of
insurance recoveries relating to liabilities for pending and estimated future
asbestos claims. They are only recognised when it is virtually certain that
the claim will be paid. Asbestos related assets under executed settlement
agreements with insurers due in the next 12 months are recorded within Trade
and other receivables and beyond 12 months are recorded within Long term
receivables. The Group's asbestos related assets have been discounted using
an appropriate rate of interest.
Trade payables
Trade payables are recognised initially at fair value and subsequently
measured at amortised cost.
Borrowings
Borrowings are recognised initially at fair value, net of transaction costs
incurred. Borrowings are subsequently stated at amortised cost using the
effective interest method.
Taxation
Tax provisions are based on management's interpretation of country specific
tax law and the likelihood of settlement. This involves a significant amount
of judgement as tax legislation can be complex and open to different
interpretation. Management uses in-house tax experts, professional firms and
previous experience when assessing tax risks. When actual liabilities differ
from the provisions, adjustments are made which can have a material impact on
the Group's tax charge for the year.
Deferred tax asset recognition is based on two factors. Firstly, deferred tax
liabilities in the same jurisdiction as assets that are legally capable of
being offset and the timing of the reversal of the asset and liability would
enable the deduction from the asset to be utilised against the taxable income
from the liability. Secondly, forecast profits support the recognition of
deferred tax assets not otherwise supported by deferred tax liabilities.
Management uses in-house tax experts to determine the forecast period to
support recognition, this is considered by jurisdiction or entity dependent on
the tax laws of the jurisdiction. If actual results differ from the forecasts
the impact of not being able to utilise the expected amount of deferred tax
assets can have a material impact on the Group's tax charge for the year.
See note 6 and 23 for details.
The tax charge represents the sum of tax currently payable and deferred tax.
Tax currently payable is based on the taxable profit for the year. Taxable
profit differs from the profit reported in the income statement due to items
that are not taxable or deductible in any period
and also due to items that are taxable or deductible in a different period.
The Group's liability for current tax is calculated using tax rates enacted or
substantively enacted at the balance sheet date.
Tax is recognised in the income statement except to the extent that it relates
to items recognised in other comprehensive income or equity, in which case it
is recognised in other comprehensive income or equity as appropriate.
A current tax provision is recognised when the Group has a present obligation
as a result of a past event, it is probable that the Group will be required to
settle that obligation and a reliable estimate can be made of the amount of
the obligation. In line with IFRIC 23, depending on the circumstances, the
provision is either the single most likely outcome, or a probability weighted
average of all potential outcomes. The provision incorporates tax and
penalties where appropriate. Separate provisions for interest are also
recorded. Interest in respect of the tax provisions is not included in the
tax charge, but disclosed within profit before tax.
Deferred tax is provided, using the full liability method, on temporary
differences arising between the tax bases of assets and liabilities and their
carrying amounts in the consolidated financial statements. The principal
temporary differences arise from depreciation on PP&E, tax
losses carried forward and, in relation to acquisitions, the difference
between the fair values of the net assets acquired and their tax base. Tax
rates enacted, or substantively enacted, at the balance sheet date are used to
determine deferred tax.
Deferred tax liabilities are recognised for taxable temporary differences
arising on investments in subsidiaries and joint ventures, except where the
Group is able to control the reversal of the temporary difference and it is
probable that the temporary difference will not reverse in the foreseeable
future.
Tax assets and liabilities are offset when they relate to income taxes levied
by the same taxation authority and it is intended that they will be settled on
a net basis.
The Group has applied the exception in the Amendments to IAS 12 issued in May
2023 and has neither recognised nor disclosed information about deferred tax
assets or liabilities relating to Pillar Two income taxes.
Accounting for derivative financial instruments and hedging activities
Derivatives are initially recognised at fair value on the date the contract is
entered into and are subsequently re-measured at fair value. Where hedging
is to be undertaken, the Group documents the relationship between the hedging
instrument and the hedged item at the inception of the transaction, as well as
the risk management objective and strategy for undertaking the hedge
transaction. The Group also documents its assessment, both at hedge inception
and on an ongoing basis, of whether the derivatives that are used in hedging
transactions are highly effective in offsetting changes in fair values or cash
flows of the hedged items.
Fair value measurement
'Fair value' is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at
the measurement date in the principal or, in its absence, the most
advantageous market to which the Group has access at that date. The fair value
of a liability reflects its non-performance risk. A number of the Group's
accounting policies and disclosures require the measurement of fair values,
for both financial and non-financial assets and liabilities.
When one is available, the Group measures the fair value of an instrument
using the quoted price in an active market for that instrument. If there is no
quoted price in an active market, then the Group uses valuation techniques
that maximise the use of relevant observable outputs and minimise the use of
unobservable outputs. The chosen valuation technique incorporates all of the
factors that market participants would take into account in pricing a
transaction.
The fair value of interest rate swaps is calculated as the present value of
their estimated future cash flows. The fair value of forward foreign exchange
contracts is determined using forward foreign exchange market rates at the
balance sheet date. The fair values of all derivative financial instruments
are verified by comparison to valuations provided by financial institutions.
The carrying values of trade receivables and payables approximate to their
fair values.
The fair value of financial liabilities is estimated by discounting the future
contractual cash flows at the current market interest rate that is available
to the Group for similar financial instruments.
Leases
At inception of a contract, the Group assesses whether a contract is, or
contains, a lease. A contract is, or contains, a lease if the contract
conveys the right to control or use an identified asset for a period of time
in exchange for consideration. To assess whether a contract conveys the right
to control the use of an asset, the Group uses the definition of a lease in
IFRS 16.
The Group recognises a right of use asset and a lease liability at the lease
commencement date. The right of use asset is initially measured at cost, and
subsequently at cost less any accumulated depreciation and impairment losses
and adjusted for certain remeasurements of the lease liability.
The Group leases real estate, including land, buildings and warehouses,
machinery/equipment, vehicles and IT equipment. The right of use assets
generate cash flows as part of the cash generating units disclosed in note 10.
The majority of the lease liability relates to real estate with leases
generally entered into for fixed periods of up to five years, unless of
strategic importance to the Group. Some leases have extension options as
described below. Lease terms are negotiated on an individual basis and contain
a wide range of terms and conditions. The lease agreements do not impose any
covenants other than the security interests in the leased assets that are held
by the lessor. Leased assets are not used as security for borrowing
purposes.
The right of use asset is subsequently depreciated using the straight-line
method from the commencement date to the end of the lease term. The right of
use asset is periodically reduced by impairment losses, if any, and adjusted
for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease
payments that are not paid at the commencement date, discounted using the
Group's incremental borrowing rate ("IBR") and is subsequently increased by
the interest cost on the lease liability and reduced by repayments. It is
remeasured when there is a change in future lease payments arising from a
change in an index or rate, a change in the assessment of whether an extension
option is reasonably certain to be exercised or a termination option is
reasonably certain not to be exercised.
The lease payments are discounted using the interest rate implicit in the
lease. If that rate cannot be readily determined, which is generally the case
for leases in the Group, the Group's IBR is used. The IBR is the rate that the
individual lessee would have to pay to borrow the funds necessary to obtain an
asset of similar value to the right of use asset in a similar economic
environment with similar terms, security and conditions.
The Group has applied judgement to determine the lease term for some lease
contracts in which it is a lessee that includes renewal options. The
assessment of whether the Group is reasonably certain to exercise such options
impacts the lease term, which may affect the amount of lease liabilities and
right of use assets recognised.
The Group applies the practical expedient for short-term leases in which a
lessee is permitted to make an accounting policy election not to recognise
lease assets and lease liabilities for leases with a term of 12 months or less
and do not include an option to purchase the underlying asset. Lease costs of
short-term leases are recognised on a straight-line basis over the term of the
lease term and disclosed within the consolidated financial statements. The
Group believes short-term lease commitments are not materially different than
the short-term lease cost for the period.
Retirement benefit scheme surplus/deficit
The Group operates a number of defined benefit and defined contribution
pension schemes. The surplus or deficit recognised in respect of the defined
benefit schemes represents the difference between the present value of the
defined benefit obligations and the fair value of the scheme assets. The
assets of these schemes are held in separate trustee administered funds. The
schemes are largely closed to future accrual.
The defined benefit schemes' assets are measured using fair values. Pension
scheme liabilities are measured annually by an independent actuary using the
projected unit method and discounted at the current rate of return on a
high-quality corporate bond of equivalent term and currency to the liability.
The increase in the present value of the liabilities of the Group's defined
benefit schemes expected to arise from employee service in the period is
charged to operating profit. The interest income on scheme assets and the
increase during the period in the present value of the scheme's liabilities
arising from the passage of time are netted and included in finance
income/expense. Re-measurement gains and losses are recognised in the
statement of comprehensive income in full in the period in which they occur.
The defined benefit schemes surplus or deficit is recognised in full and
presented on the face of the Group balance sheet.
Group management consider it appropriate to recognise the IAS 19 surplus in
the Wood Pension Plan as the rules governing the scheme provide an
unconditional right to a refund assuming the gradual settlement of the
scheme's liabilities over time until there are no members left, as per IFRIC
14.11 (b). On a winding up scenario, any surplus would be returned to the
Group.
The Group's contributions to defined contribution schemes are charged to the
income statement in the period to which the contributions relate.
The Group operates a Supplemental Executive Retirement Plan (SERP) pension
arrangement in the US for certain employees. Contributions are paid into a
separate investment vehicle and invested in a portfolio of US funds that are
recognised by the Group in other investments with a corresponding liability in
other non-current liabilities. Investments are carried at fair value. The
fair value of listed equity investments
and mutual funds is based on quoted market prices and so the fair value
measurement can be categorised in Level 1 of the fair value hierarchy.
Provisions
Provisions are recognised where the Group is deemed to have a legal or
constructive obligation, it is probable that a transfer of economic benefits
will be required to settle the obligation, and a reliable estimate of the
obligation can be made. Where amounts provided are payable after more than
one year the estimated liability is discounted using an appropriate rate of
interest.
The Group has taken internal and external advice in considering known and
reasonably likely legal claims made by or against the Group. It carefully
assesses the likelihood of success of a claim or action. Appropriate
provisions are made for legal claims or actions against the Group on the basis
of likely outcome, but no provisions are made for those which, in the view of
the directors, are less than probable or for which no amount can be reliably
measured.
See note 22 for further details.
Where the outcome is less than probable, but more than remote or a reliable
estimate cannot be made, no provision is recorded but a contingent liability
is disclosed in the financial statements, if material.
Share based charges relating to employee share schemes
The Group has recorded share based charges in relation to a number of employee
share schemes.
Charges are recorded in the income statement as an employee benefit expense
for the fair value of share options (as at the grant date) expected to be
exercised under the Executive Share Option Schemes ('ESOS'). Amounts are
accrued over the vesting period with the corresponding credit recorded in
retained earnings.
Awards are allocated under the Group's Long Term Plan ('LTP') or the new
Discretionary Share Plan ("DSP") which are the incentive plans in place for
executive directors and certain senior executives. The charge for awards
granted under the LTP/DSP are based on the fair value of those awards at the
grant date, spread over the vesting period. The corresponding credit is
recorded in retained earnings. For awards that have a market related
performance measure, the fair value of the market related element is
calculated using a Monte Carlo simulation model.
Employees may also be granted non-performance awards either in the form of
conditional share awards or share options. These awards typically have a three
year vesting period.
The Group has an Employee Share Plan ("ESP") under which employees contribute
regular monthly amounts of up to a maximum of 10% of their gross salary which
are used to purchase shares over a one year period. At the end of the year the
participating employees are awarded one free share for every two shares
purchased providing they remain in employment for a further year. A charge is
calculated for the award of free shares and accrued over the vesting period
with the corresponding credit taken to retained earnings.
Under the plan the Group also has a UK Share Incentive Plan ("SIP"), which is
recognised by HM Revenue and Customs, employees contribute regular monthly
amounts of up to £150 per month to purchase shares. The participating
employees are awarded one free share for every two purchased, provided that
they hold the purchased shares for 3 years and remain in employment.
Share capital
John Wood Group PLC has one class of ordinary shares and these are classified
as equity. Dividends on ordinary shares are not recognised as a liability or
charged to equity until they have been approved by shareholders.
The Group is deemed to have control of the assets, liabilities, income and
costs of its employee share trusts, therefore they have been consolidated in
the financial statements of the Group. Shares acquired by and disposed of by
the employee share trusts are recorded at cost. The cost of shares held by the
employee share trusts is deducted from equity.
Merger reserve
Where an acquisition qualifies for merger relief under Section 612 of the
Companies Act 2006, the premium arising on the issue of shares to fund the
acquisition is credited to a merger reserve. See note 28 for further
information.
Discontinued operations
The Group classified its Built Environment Consulting business as a
discontinued operation for the reporting period ending 31 December 2022. A
discontinued operation is a component of the Group's business, the operations
and cash flows of which can be clearly distinguished from the rest of the
Group and which:
- represents a separate major line of business or geographic area
of operations;
- is part of a single co-ordinated plan to dispose of a separate
major line of business or geographic area of operations; or
- is a subsidiary acquired exclusively with a view to resale.
Classification as a discontinued operation occurs at the earlier of disposal
or when the operation meets criteria to be classified as held for sale. When
an operation is classified as a discontinued operation, the comparative income
statement and statement of comprehensive income are presented as if the
operation had been discontinued from the start of the comparative period.
Classification as held for sale was from 1 January 2022 and in September 2022,
the sale of this business was completed. Details are outlined in note 7.
Segmental reporting
The Group has determined that its operating segments are based on management
reports reviewed by the Chief Operating Decision Maker ('CODM'), the Group's
Chief Executive. Our financial reporting segments reflect our current
operating model which consists of Projects, Operations, Consulting and
Investment Services ("IVS"). Projects is focused on providing front-end
engineering services, procurement and project management. Our Operations
segment focuses on improving operational efficiency by providing maintenance,
modification and operation services. Consulting is a multi-sector specialist
technical consultancy division providing innovative thinking needed to
maximise value at every stage of the asset life cycle. Investment Services
manages a range of legacy or non-core businesses and investments with a view
to generating value via remediation and restructuring.
The comparative information has been re-presented due to the reclassification
of Built Environment Consulting Saudi Arabia from discontinued into continuing
operations. This relates to the sale of a subsidiary, previously classified as
held for sale, which did not complete during 2023 and will now be retained by
the Group.
The Chief Executive measures the operating performance of these segments using
'Adjusted EBITDA' (Earnings before interest, tax, depreciation and
amortisation). Operating segments are reported in a manner consistent with
the internal management reports provided to the Chief Executive who is
responsible for allocating resources and assessing performance of the
operating segments.
Assets and liabilities held for sale
Disposal groups are classified as assets and liabilities held for sale if it
is highly probable that they will be recovered primarily through sale rather
than continuing use. Disposal groups are measured at the lower of carrying
value and fair value less costs to sell and their assets and liabilities are
presented separately from other assets and liabilities on the balance sheet.
Research and development government credits
The Group claims research and development government credits predominantly in
the UK, US, Canada and Australia. These credits are similar in nature to
grants and are offset against the related expenditure category in the income
statement. The credits are recognised when there is reasonable assurance that
they will be received, which in some cases can be some time after the original
expense is incurred.
Government grants
The Group recognises a government grant when it has reasonable assurance that
it will comply with the relevant conditions and that the grant will be
received. This may be a judgemental matter, particularly when governments
are introducing new programmes that may require new legislation, or for which
there is little established practice for assessing whether the conditions to
receive a grant are met. If the conditions are met, then the Group
recognises government grants as a credit in profit or loss in line with its
recognition of the expenses that the grants are intended to compensate.
The disclosure of impact of new and future accounting standards
Standards issued but not yet effective
The Group is required to comply with the requirements of IFRS 17 Insurance
Contracts for reporting periods beginning on or after 1 January 2023. The new
accounting standard sets out the requirements that the Group should apply in
reporting information about insurance contracts it issues and reinsurance
contracts it holds. The Group has undertaken an assessment of its insurance
contracts including those held under its captive insurance company, Garlan
Insurance Limited. The impact of the accounting standard does not have any
material impact on the condensed financial statements.
The Group has early adopted the amendments to IAS 1 - Classification of
Liabilities as Current or Non-current and Non-current Liabilities with
Covenants which are required to be effective from 1 January 2024. The impact
of the amendments does not have any material impact on the condensed financial
statements.
Amendments to other existing standards do not have a material impact on the
financial statements.
1 Segmental reporting
During the year, the Group monitored activity and performance through four
operating segments; Projects, Operations, Consulting and Investment Services
('IVS') plus the legacy Built Environment Consulting segment (divested in
September 2022).
Under IFRS 11 'Joint arrangements', the Group is required to account for joint
ventures using equity accounting. Adjusted EBITDA as shown in the table below
includes our share of joint venture profits and excludes exceptional items,
which is consistent with the way management review the performance of the
business units. Joint venture results are reported on an equity accounting
basis and therefore revenue figures exclude joint venture revenue.
The segment information provided to the Group's Chief Executive for the
reportable operating segments for the year ended 31 December 2023 includes the
following:
Reportable operating segments Revenue ((3)) Adjusted EBITDA((1)) Operating profit/(loss)
2023 2022 2023 2022 2023 2022
$m
$m
$m
(unaudited) (unaudited) (unaudited)
$m
$m
$m
Projects 2,424.2 2,211.2 177.2 168.7 11.2 (125.3)
Operations 2,482.2 2,406.9 165.2 147.6 88.0 (344.3)
Consulting (re-presented) ((4)) 739.1 652.4 79.5 76.2 50.4 (3.1)
Built Environment Consulting (discontinued) ((4)) - 854.0 (10.2) 69.8 (15.2) 63.1
Investment Services 255.2 198.8 77.1 69.3 23.0 46.2
Central costs ((2)) - - (76.3) (73.6) (135.1) (138.7)
Total Group 5,900.7 6,323.3 412.5 458.0 22.3 (502.1)
Elimination of discontinued operation ((4)) - (854.0) 10.2 (69.8) 15.2 (63.1)
Total (continuing operations) 5,900.7 5,469.3 422.7 388.2 37.5 (565.2)
Finance income 19.4 6.9
Finance expense (119.6) (133.1)
Loss before taxation from continuing operations (62.7) (691.4)
Taxation (65.0) (10.9)
Loss for the year from continuing operations (127.7) (702.3)
Profit from discontinued operation, net of tax 22.5 350.6
Loss for the year (105.2) (351.7)
Notes
1. A reconciliation of operating profit/(loss) to Adjusted EBITDA is provided
in the table below. Adjusted EBITDA is provided as it is a unit of measurement
used by the Group in the management of its business. Adjusted EBITDA is
stated before exceptional items (see note 5).
2. Central includes the costs of certain Group management personnel,
along with an element of Group infrastructure costs.
3. Revenue arising from sales between segments is not material, and
does not include the impact of the exceptional item disclosed on the face of
the income statement of $nil (2022: $8.0m) which is in respect of the Projects
operating segment.
4. The comparative periods have been re-presented due to a
reclassification of a business operation from discontinued into continuing
operations for the year ended 31 December 2023 (see note 7). The revenue of
this business for the period to 31 December 2022 was $27.1m and Adjusted
EBITDA was $3.1m.
Reconciliation of Alternative Performance Measures
2023 2022
(unaudited) (re-presented)
$m $m
Operating profit/(loss) per income statement 37.5 (565.2)
Share of joint venture finance expense and tax (note 13) 16.3 14.3
Exceptional items (note 5) 76.7 663.5
Amortisation (including joint ventures) 161.1 153.4
Depreciation (including joint ventures) 26.2 29.3
Depreciation of right of use assets (including joint ventures) 103.1 90.5
Impairment of joint venture investments and PP&E 1.8 2.4
Adjusted EBITDA (continuing operations) 422.7 388.2
Discontinued operation
Operating (loss)/profit (discontinued) (15.2) 63.1
Exceptional items 5.0 6.7
Adjusted EBITDA (discontinued operation) (10.2) 69.8
Total Group Adjusted EBITDA 412.5 458.0
Upon classification as a discontinued operation and held for sale on 1 January
2022, the Built Environment Consulting disposal group was not depreciated or
amortised in line with IFRS 5 Non-current Assets Held for Sale and
Discontinued Operations.
Analysis of joint venture profits by segment Adjusted EBITDA Operating profit
2023 2022 2023 2022
$m
$m
(unaudited) (unaudited)
$m
$m
Projects 3.4 3.9 3.1 3.5
Operations 13.0 15.2 11.3 13.0
Investment Services 57.2 39.4 44.7 28.2
Total 73.6 58.5 59.1 44.7
The main joint ventures contributing to Adjusted EBITDA and Operating Profit
within the Investment Services segment are EthosEnergy and RWG. The results
of these joint ventures are disclosed further in note 13.
Other segment items
At 31 December 2023 (unaudited) Projects Operations Consulting Built Environment Consulting Investment Unallocated Total
$m
$m $m $m Services $m $m
$m
Capital expenditure
PP&E 6.5 6.0 2.5 - 4.3 1.2 20.5
Intangible assets 47.2 55.6 20.4 - 1.9 5.9 131.0
Non-cash expense
Depreciation 6.9 6.0 1.3 - 2.4 4.4 21.0
Depreciation of right of use assets 33.3 25.0 8.6 - 15.2 13.1 95.2
Amortisation 81.7 41.1 19.2 - - 17.7 159.7
Exceptional items (non-cash element) 43.4 - - 5.0 - 36.1 84.5
At 31 December 2022 Projects Operations Consulting Built Environment Consulting Investment Unallocated Total
$m
$m $m $m Services $m $m
$m
Capital expenditure
PP&E 7.3 11.6 1.3 3.1 3.2 1.1 27.6
Intangible assets 43.3 49.5 18.2 0.2 - 4.7 115.9
Non-cash expense
Depreciation 8.7 10.3 1.0 - 1.1 4.1 25.2
Depreciation of right of use assets 34.4 17.5 8.3 - 10.6 11.5 82.3
Amortisation 77.7 36.7 27.5 - - 10.0 151.9
Impairment of intangible assets 113.3 396.3 32.7 - - - 542.3
Exceptional items (non-cash element) 14.3 - 1.8 - - 19.2 35.3
The figures in the tables above exclude the share of joint ventures.
Depreciation in respect of joint ventures totals $5.2m (2022: $4.1m),
depreciation in respect of joint venture right of use assets totals $7.9m
(2022: $8.2m) and joint venture amortisation amounts to $1.4m (2022: $1.5m).
Non-cash exceptionals of $84.5m (2022: $35.3m) primarily comprises $43.4m
relating to the Power and Industrial EPC charges, $38.4m of asbestos charges
and the disposal of the built environment business has led to a R&D tax
credit being determined to be unrecoverable in the foreseeable future, and a
non-cash charge of $5.0m has been recognised in addition to the charge
previously recognised in 2022, following the filing of the relevant 2022 tax
returns. Further detail of these charges is outlined in notes 5 and 7.
Non-current assets Revenue
(Continuing operations)
Geographical segments 2023 2022 2023 2022
$m
(unaudited) (unaudited) $m
$m
$m
United States of America 2,037.7 2,082.2 1,402.1 1,423.5
United Kingdom 949.4 803.4 792.7 731.5
Canada 439.6 436.8 379.6 383.2
Australia 147.9 150.3 330.1 331.9
Singapore 93.6 96.6 301.1 109.0
Norway 103.0 103.2 283.2 342.3
Brunei 8.8 10.2 255.6 232.9
Saudi Arabia 101.7 102.6 245.7 214.6
Iraq 0.8 0.4 235.1 197.5
South Africa 4.1 2.0 151.7 102.8
Papua New Guinea - - 153.2 125.9
Rest of the world 1,083.0 1,092.3 1,370.6 1,274.2
Total 4,969.6 4,880.0 5,900.7 5,469.3
Non-current assets includes goodwill and other intangible assets, property
plant and equipment, right of use assets, investment in joint ventures and
other investments. Revenue in the table above analyses total revenue and in
2022 does not reflect the $8.0m exceptional item as disclosed on the Income
Statement.
2 Revenue
Revenue by geographical segment is based on the location of the ultimate
project. Revenue is attributable to the provision of services.
In the following table, revenue is disaggregated by primary geographical
market and major service line. The tables provided below analyses total
revenue excluding our share of joint venture revenue.
Primary geographical market Projects Projects Operations Consulting Consulting IVS IVS
2023 2022 2022 2023 2022 2023 2022
(unaudited) (re-presented) $m (unaudited) (re-presented) (unaudited) $m
$m $m $m $m $m Total
Operations Total 2022
2023 2023 (re-presented) $m
(unaudited) (unaudited)
$m $m
USA 535.5 593.7 387.9 457.5 274.0 233.3 204.7 139.0 1,402.1 1,423.5
Europe 407.4 379.1 843.2 820.4 202.0 188.2 8.0 27.5 1,460.6 1,415.2
Rest of the world 1,481.3 1,238.4 1,251.1 1,129.0 263.1 230.9 42.5 32.3 3,038.0 2,630.6
Revenue 2,424.2 2,211.2 2,482.2 2,406.9 739.1 652.4 255.2 198.8 5,900.7 5,469.3
Major service lines
Energy
Oil & Gas 902.9 694.7 2,095.2 1,989.7 357.1 316.6 18.3 18.7 3,373.5 3,019.7
Power, Renewables, Hydrogen and Carbon Capture 144.2 157.5 112.6 122.1 151.3 85.5 55.5 44.0 463.6 409.1
Materials
Refining & Chemicals 881.9 801.3 237.4 224.9 96.8 62.5 - - 1,216.1 1,088.7
Minerals Processing and Life Sciences 357.0 417.4 18.6 19.5 28.5 43.9 - - 404.1 480.8
Other
Built Environment 9.7 5.4 14.2 44.2 2.1 37.3 166.2 136.1 192.2 223.0
Industrial Processes and other 128.5 134.9 4.2 6.5 103.3 106.6 15.2 - 251.2 248.0
Revenue 2,424.2 2,211.2 2,482.2 2,406.9 739.1 652.4 255.2 198.8 5,900.7 5,469.3
Sustainable solutions 727.8 664.2 263.6 228.7 226.9 154.8 55.6 62.7 1,273.9 1,110.4
The comparative periods have been re-presented due to a reclassification of a
business operation from discontinued into continuing operations for the year
ended 31 December 2023 (see note 7). The revenue of this business for the
period to 31 December 2022 was $27.1m.
The Group's revenue is largely derived from the provision of services over
time.
Sustainable solutions consist of activities related to renewable energy,
hydrogen, carbon capture & storage, electrification and electricity
transmission & distribution, LNG, waste to energy, sustainable fuels &
feedstocks and recycling, processing of energy transition minerals, life
sciences, decarbonisation in oil & gas, refining & chemicals, minerals
processing and other industrial processes. In the case of mixed scopes
including a decarbonisation element, these are only included in sustainable
solutions if 75% or more of the scope relates to that element, in which case
the total revenue is recorded in sustainable solutions. Sustainable
solutions with respect to the discontinued operation have not been captured.
Revenue from continuing operations in 2023 included $4,705.4m (80%) (2022:
$4,289.5m, 78%) from reimbursable contracts and $1,195.3m (20%) (2022:
$1,179.8m, 22%) from fixed price contracts. The calculation of revenue from
lump sum contracts is based on estimates and the amount recognised could
increase or decrease.
Continuing operations Discontinued operations Total
2023 2022 2023 2022 2023 2022
(Unaudited) (re-presented) (Unaudited) (re-presented) (Unaudited) $m
$m $m $m $m $m
Total revenue 5,900.7 5,469.3 - 854.0 5,900.7 6,323.3
Total revenue in 2022 does not reflect the $8.0m exceptional item as disclosed
on the Income Statement. This exceptional item related to the Projects
business unit.
Contract balances
The following table provides a summary of receivables, contract assets and
liabilities arising from the Group's contracts with customers.
2023 2022
$m
(unaudited)
$m
Trade receivables 729.5 679.6
Non-current contract assets 153.7 97.0
Gross amounts due from customers 522.9 556.9
Gross amounts due to customers (99.0) (113.0)
1,307.1 1,220.5
The contract balances include amounts the Group has invoiced to customers
(trade receivables) as well as amounts where the Group has the right to
receive consideration for work completed which has not been billed at the
reporting date (gross amounts due from customers). Gross amounts due from
customers are transferred to trade receivables when the rights become
unconditional which usually occurs when the customer is invoiced. Gross
amounts due to customers primarily relates to advance consideration received
from customers, for which revenue is recognised over time.
Non-current contract assets of $153.7m (2022: $97.0m) includes $81.2m (2022:
$72.9m) of gross amounts due from customers and $15.5m (2022: $1.4m) of trade
receivables in relation to the Aegis contract as at 31 December 2023. See
further details on this contract below. The increase in the non-current
contract assets is mainly as a result of reclassifications from current to
non-current and the Aegis contract completion in the year. The Group has
classified certain receivable balances, including Aegis as non-current due to
the element of uncertainty surrounding the timing of the receipt of these
balances. Provisions held in relation to the Aegis contract are not material.
Trade receivables and gross amounts due from customers are included within the
'Trade and other receivables' heading in the Group balance sheet. Gross
amounts due to customers are included within the 'Trade and other payables'
heading in the Group balance sheet.
Revenue recognised in 2023 which was included in gross amounts due to
customers at the beginning of the year of $127.0m represents amounts included
within contract liabilities, including $20.6m previously disclosed within held
for sale liabilities at 1 January 2023. Revenue recognised from performance
obligations satisfied in previous periods of $6.6m represents revenue
recognised in 2023 for performance obligations which were considered
operationally complete at 31 December 2022.
Aegis Poland
This legacy AFW project involved the construction of various buildings to
house the Aegis Ashore anti-missile defence facility for the United States
Army Corps of Engineers ("USACE"). Wood's construction scope is
now complete and the facilities were formally handed over to USACE in
July 2023. The corresponding warranty period for facilities will end at
various points through July 2024. There has been no change in
management's assessment of the loss at completion which remains at $222m. The
full amount of this loss has been recognised to date. The Group's
assessment of the ultimate loss includes change orders which have not been
approved by the customer. As at 31 December 2023, $186m of certified
claims had been submitted to our client, and we continue to progress further
claims which could be material. The revenue recognised is estimated
based on the amount that is deemed to be highly probable to be recovered. That
estimation is made considering the risks and likelihood of recovery of change
orders. The Group's assessment of liquidated damages also involves an
expectation of relief from possible obligations linked to delays on the
contract. These liquidated damages and relief assumptions are estimates
prepared in conjunction with the change orders estimates noted
above. Disclosure of the value of liquidated damages included in the loss
at completion is not disclosed as the directors believe that this would be
seriously prejudicial while commercial settlement negotiations are
ongoing. The range of possible outcomes in respect to the change orders
that are highly likely to be recoverable and the liquidated damages for which
a relief will be obtained is material. The Group has classified the receivable
balances as non-current, due to the element of uncertainty surrounding the
timing of the receipt of these balances. The ultimate loss also includes the
Group's assessment of the total legal costs necessary to achieve recovery of
the amounts believed to be recoverable and defend our position on liquidated
damages. At this point in time this is an estimate based on a weighted average
of several possible outcomes and the actual costs could be materially higher
or lower depending on actual route to settlement. If the amounts agreed are
different to the assumptions made, then the ultimate loss could be materially
different. In reaching its assessment of this loss, management have made
certain estimates and assumptions relating to the date of completion and
recovery of costs from USACE. If the actual outcome differs from these
estimates and assumptions, the ultimate loss will be different.
Transaction price allocated to the remaining performance obligations
The transaction price allocated to the remaining performance obligations
(unsatisfied or partially unsatisfied) as at 31 December 2023 was as follows:
$m (unaudited) Year 1 Year 2 Total
Revenue 3,497.3 2,140.2 5,637.5
The Group has not adopted the practical expedients permitted by IFRS 15,
therefore all contracts which have an original expected duration of one year
or less have been included in the table above. The estimate of the transaction
price represents contractually agreed backlog and does not include any amounts
of variable consideration which are constrained. The Group continues to move
into a reimbursable contract model, moving away from turnkey lump sum
contracts which are inherently riskier. 86% of future performance obligations
relate to reimbursable contracts and the remainder to fixed price.
3 Finance expense/(income)
2023 2022
(unaudited) $m
$m
Interest payable on senior loan notes 16.6 40.3
Interest payable on borrowings 59.4 47.2
Amortisation of bank facility fees 4.2 10.5
Unwinding of discount on other liabilities 1.2 0.9
Lease interest (note 12) 18.7 16.4
Other interest expense 8.4 11.9
Finance expense - continuing operations (pre-exceptional items) 108.5 127.2
Unwinding of discount on asbestos provision (note 5) 11.1 5.9
Finance expense - total 119.6 133.1
Interest receivable (1.1) (4.5)
Interest income - retirement benefit obligations (note 33) (18.3) (2.4)
Finance income (19.4) (6.9)
Finance expense - total - net 100.2 126.2
Net interest expense of $6.5m (2022: $4.4m) has been deducted in arriving at
the share of post-tax profit from joint ventures.
The unwinding of discount on the asbestos provision is $11.1m (2022: $5.9m)
and includes the unwinding of discount on long-term asbestos receivables (note
21). This is presented within exceptional items in line with the Group's
accounting policies.
4 Profit before taxation
2023 2022
(unaudited) $m
$m
The following items have been charged/(credited) in arriving at profit before
taxation:
Employee benefits expense (note 32) 2,714.8 3,130.0
Amortisation of intangible assets (note 10) 159.7 151.9
Depreciation of property plant and equipment (note 11) 21.0 25.2
Depreciation of right of use assets (note 12) 95.2 82.3
Gain on disposal of property plant and equipment (2.6) (1.6)
Impairment of intangible assets - 542.3
Foreign exchange losses 1.0 4.2
Depreciation of property plant and equipment is included in cost of sales or
administrative expenses in the income statement. Amortisation of intangible
assets is included in administrative expenses in the income statement.
An impairment charge of $542.3m was recorded in the prior year against
intangible assets and related to goodwill, brands and customer relationships.
Services provided by the Group's auditors and associate firms
During the year the Group obtained the following services from its auditors,
KPMG and associate firms at costs as detailed below:
2023
(unaudited) 2022
$m $m
Fees payable to the Group's auditors and its associate firms for
Audit of parent company and consolidated financial statements 7.5 8.7
Audit of financial statements of subsidiaries of the Company 2.7 2.4
Total statutory audit fees 10.2 11.1
Fees payable to the Group's auditor for the audit of non-statutory financial - 0.6
statements
Audit related assurance services 0.5 0.5
Other assurance services - 1.4
Tax and other services - -
10.7 13.6
The fees of $8.7m disclosed for 'Audit of parent company and consolidated
financial statements' in 2022 include $1.8m relating to audit work performed
in respect of the 2021 consolidated financial statements.
Fees payable to the Group's auditor for the audit of non-statutory financial
statements in 2022 relate to the audit of carve-out financial statements of
Built Environment Consulting.
Other assurance services in 2022 are Reporting Accountant services performed
by KPMG in relation to the Built Environment Consulting disposal.
5 Exceptional items
2023
(unaudited) 2022
$m $m
Exceptional items included in continuing operations
Power and Industrial EPC losses 45.1 25.0
Impairment of goodwill and intangible assets (note 10) - 542.3
Apollo related costs 4.8 -
Redundancy, restructuring and integration costs - 30.1
Investigation support costs and provisions (2.6) (4.2)
Enterprise settlement - 35.6
Asbestos yield curve, costs and charges 29.4 21.5
Russia exit costs and charges - 13.2
Exceptional items included in continuing operations, before interest and tax 76.7 663.5
Unwinding of discount on asbestos provision 11.1 5.9
Tax (credit)/charge in relation to exceptional items (0.2) 5.2
Release of uncertain tax provision (7.4) -
Derecognition/(recognition) of deferred tax assets due to UK pension actuarial 18.0 (41.6)
movements
Exceptional items included in continuing operations, net of interest and tax 98.2 633.0
Exceptional items are those significant items which are separately disclosed
by virtue of their size or incidence to enable a full understanding of the
Group's financial performance.
Power and Industrial EPC losses
The Group made a strategic decision in 2021 to exit certain business segments
within the Power and Industrials sub business group. Following that
decision, we ceased to operate in the large-scale EPC or lump sum turnkey
business segment.
The costs of exiting that business and any subsequent costs related to the
wind down of contracts in that business, to the extent they are material in
size, have been treated as exceptional on the basis that they relate to a
segment in which the Group no longer operates.
In the first half of 2023 the Group recorded a non-cash exceptional charge of
$20.4m relating to a write down of receivable balances arising from activity
in the Power and Industrial EPC business. The Group had expected to
recover these balances, but these have since been disputed.
In the second half of 2023, a former client raised an arbitration claim
against the Group in respect of alleged damages and costs arising from a
legacy Power and Industrial contract. Following evaluation of the claim, the
Group has recognised a provision of $23.0m with a charge to exceptional items,
representing our assessment of probable outflows arising from the matter.
During the year additional costs relating to the discontinued business of
$1.7m were recorded as an exceptional charge. This follows previous write
downs made during 2022 of $25.0m, including a revenue reversal of $8.0m which
represents the impact of a reduction in total value of the contract and is in
relation to revenue recognised in prior years.
Apollo related costs
The Group incurred $4.8m in relation to legal and advisor costs arising from
Apollo's preliminary approach to potentially acquire the ordinary share
capital of the Group, which did not ultimately lead to an offer.
Investigation support costs and provisions
The regulatory investigations were all closed out during 2021 and the agreed
settlements were materially in line with the provision made in 2020. The
$2.6m credit relates to the release of provisions made for additional legal
and other costs which were ultimately not needed.
Asbestos
All asbestos costs have been treated as exceptional on the basis that
movements in the provision are non-trading and can be large and driven by
market conditions which are out with the Group's control. Excluding these
amounts from the trading results improves the understandability of the
underlying trading performance of the Group.
The $29.4m charge (2022: $21.5m) principally comprises a $34.2m charge (2022:
$52.8m) in the period that was a result of an updated actuarial review which
updated the best estimate for recent claims experience and $5.4m (2022: $4.3m)
of costs in relation to managing the claims. These are offset by a credit of
$10.0m which relates to the collection of insurance proceeds from an insolvent
insurer and a yield curve credit of $0.2m (2022: $35.6m). The lower yield
curve credit recognised in 2023 is principally due to the 27 year blended
yield curve rate of 3.64% not being materially different to the 30 year flat
rate of 3.97% in 2022.
$11.1m of interest costs which relate to the unwinding of discount on the
asbestos provision are also shown as exceptional (2022: $5.9m).
Redundancy, restructuring and integration costs
No costs were incurred in 2023. In the prior year, $30.1m was incurred in
relation to redundancy and restructuring activities.
Enterprise settlement
In the prior year, the Enterprise claim was concluded, with the amount settled
being in excess of the amount provided for. The charge in the prior year was
classed as an exceptional both by its nature (historic litigation settlement)
and by size.
Tax
An exceptional tax charge of $10.4m (2022: $36.4m credit) has been recorded
during the period. It consists of a tax credit of $0.2m on exceptional items
(2022: $5.2m charge), a $7.4m credit in relation to the release of an
uncertain tax provision created through exceptional items on the disposal of
the Well Support business in 2011, offset by an exceptional charge of $18.0m
(2022: $41.6m credit) recognised due to the actuarial loss in relation to the
UK defined benefit pension scheme. As deferred tax liabilities support the
recognition of deferred tax assets, the reduction of $18.0m of deferred tax
assets have been recognised through exceptional items based on its size.
6 Taxation
2023 2022
(unaudited) $m
$m
Current tax
Current year 86.1 188.5
Adjustment in respect of prior years (38.3) (14.8)
47.8 173.7
Deferred tax
Origination and reversal of temporary differences 17.0 62.7
Adjustment in respect of prior years (6.5) (0.2)
10.5 62.5
Total tax charge 58.3 236.2
Comprising
Tax on continuing operations before exceptional items 54.6 47.3
Tax (credit)/charge in relation to exceptional items (note 5) (7.6) 5.2
Derecognition/(recognition) of deferred tax assets due to UK pension actuarial 18.0 (41.6)
movements (note 5)
Tax on discontinued operations (6.7) 225.3
Total tax charge 58.3 236.2
Tax (credited)/charged to other comprehensive income/expense 2023
(unaudited) 2022
$m
$m
Deferred tax movement on retirement benefit liabilities (18.0) 41.6
Tax on derivative financial instruments 0.4 1.7
Total (credited)/charged to other comprehensive income/expense (17.6) 43.3
Tax (credited)/charged to equity 2023 2022
$m
$m
Deferred tax impact of rate change (0.7) 0.8
Other 0.1 1.3
Total (credited)/charged to equity (0.6) 2.1
Tax payments differ from the current tax charge primarily due to the time lag
between tax charge and payments in most jurisdictions and movements in
uncertain tax provisions differing from the timing of any related payments.
Reconciliation of applicable tax charge at statutory rates to tax charge 2023 2022 (re-presented)
$m
(unaudited)
$m
Loss before taxation from continuing operations (62.7) (691.4)
Loss/(profit) before taxation from discontinued operations (note 7) (15.2) 61.4
Gain on sale of discontinued operation (note 7) 31.0 514.5
Less: Share of post-tax profit from joint ventures (note 13) (42.8) (30.4)
Loss before taxation from total operations (excluding profits from joint (89.7) (145.9)
ventures)
Applicable tax charge at statutory rates (1.4) 36.5
Effects of:
Non-deductible expenses 18.7 8.2
Non-taxable income - (1.0)
Non-deductible expenses - exceptional 4.1 332.8
Non-taxable income - exceptional (9.9) (0.3)
Deferred tax recognition:
Recognition of deferred tax assets not previously recognised (5.5) (4.3)
Utilisation of tax assets not previously recognised (3.4) (12.4)
Current year deferred tax assets not recognised 62.0 37.7
Write off of previously recognised deferred tax assets 2.2 5.2
Derecognition/(recognition) due to UK pension actuarial movements 18.0 (41.6)
Utilisation of unrecognised deferred tax assets due to the Built - (145.5)
Environment Consulting disposal
Irrecoverable withholding tax 14.3 20.4
US Base Erosion and Anti-abuse Tax - 6.7
CFC charges 5.7 2.3
Uncertain tax provisions (0.4) 7.5
Uncertain tax provisions - exceptional 0.6 -
Uncertain tax provisions prior year adjustments (10.6) (26.7)
Uncertain tax provisions prior year adjustments - Exceptional (7.4) 1.5
Prior year adjustments (14.4) 7.7
Prior year adjustments - exceptional (11.2) 2.5
Impact of change in rates on deferred tax (3.1) (1.0)
Total tax charge 58.3 236.2
Comprising
Tax charge on continuing operations 65.0 10.9
Tax (credit)/charge on discontinued operations (6.7) 225.3
Total tax charge 58.3 236.2
The weighted average of statutory tax rates is 1.5% in 2023 (2022: (25.0%)).
The low tax rate reflects an overall loss, however profits in jurisdictions
with higher tax rates outweigh those at lower tax rates such that there is a
small net tax amount at the Group weighted average tax level.
The adjustments in respect of prior years largely relate to the release of
uncertain tax positions as the final outcome on certain issues was agreed with
tax authorities during the year or the statute of limitations for audit by the
tax authorities expiring without challenge, and amendments in respect of the
US following more detailed analysis as part of the tax return work. The most
significant uncertain tax position release elements relate to the release of
legacy Well Support business related provisions of $7.4m within exceptional
items and final assessments received without a penalty which had previously
been provided for of $7.0m. US related prior year adjustments are a credit of
$15.9m and relate to technical areas of the tax return around the availability
of losses due to change of ownership rules, the apportionment of profits
between states factoring in the Built Environment disposal and a full analysis
of the level of Base Erosion and Anti-Abuse tax payable.
During the year, the UK defined benefit pension fund asset on the Wood Pension
Plan decreased due to actuarial losses of $82.8m, resulting in the associated
deferred tax liability decreasing, with a credit shown in Other Comprehensive
Income. The deferred tax liability supports the recognition of deferred tax
assets, and as a result $18.0m (2022: $41.6m additional recognition) has been
recognised and a corresponding debit recognised in the profit and loss
account. Consistent with the prior year, this has been recognised as an
exceptional item.
Net income tax liabilities in the Group balance sheet include $87.1m (2022:
$108.0m) relating to uncertain tax positions where management has had to
exercise judgement in determining the most likely outcome in respect of the
relevant issue. The larger amounts relate to recoverability of withholding
taxes ($38.0m, 2022: $36.4m), group financing ($25.7m, 2022: $25.2m) and
transfer pricing and tax residence ($9.4m, 2022: $9.6m). Where the final
outcome on these issues differs to the amounts provided, the Group's tax
charge will be impacted.
Of the uncertain tax positions, $80.4m are currently under audit by tax
authorities and the provision reflects the maximum potential liability
reflecting the outcome of the audits being either no liability or the full
risk being challenged. The outcome of the audits will determine if there is a
credit to taxation in 2024. The remaining $6.7m comprises uncertain tax
positions not yet under audit, none of which are individually material. Of the
$6.7m, $0.9m will become statute barred for tax authority audit during 2024 if
the tax authorities do not commence an audit.
Factors affecting the tax charge in future years
There are a number of factors that may affect the Group's future tax charge
including the resolution of open issues with the tax authorities, corporate
acquisitions and disposals, the use of brought forward losses and changes in
tax legislation and rates. The following outlines key factors that may impact
on future tax charges.
On 8 October 2021, 136 countries signed up to the OECDs Inclusive Framework
(Pillar II). This includes an agreement for a minimum level of tax of 15%
which applies to the Group from 1 January 2024. Based on the 2023 results and
an analysis of the jurisdictions to which a Pillar II charge may apply, the
anticipated range of the additional charge is between $1m and $4m depending on
the outcome of technical uncertainties on which guidance has yet to be
provided by the OECD. The Jurisdictions Pillar II will have the greatest
impact in relation to are the UAE and the captive insurance company
incorporated in Guernsey but UK tax resident.
During 2022, the actuarial loss in relation to the UK pension fund has
resulted in a derecognition of deferred tax assets as less can now be
supported by the deferred tax liability related to the pensions asset. Whilst
the movement in the deferred tax liability is taken to Other Comprehensive
Income, the additional recognition of assets is taken to the Income Statement.
The future tax charge will therefore be impacted by movements in the pension
asset valuation with actuarial gains increasing deferred tax asset recognition
and actuarial losses decreasing recognition. The deferred tax liability in
relation to the UK pension fund at 31 December 2023 is $100.8m.
The UK Government announced in its budget on 3 March 2021, a rise in the rate
of Corporation Tax from 19% to 25% from 1 April 2023. The increase is
reflected in deferred tax in the accounts, however there is no impact as
deferred tax assets are only recognised to the extent there are deferred tax
liabilities in the UK. We anticipate the tax charge and cash tax payable is
likely to increase from the 2024 year end onwards as a result of the rate rise
to full calendar years from then on.
Tax Policy
The Group is committed to complying with all relevant tax laws, rules,
regulations and reporting and disclosure requirements wherever it operates.
All tax planning undertaken is consistent with the Group's overall strategy
and approach to risk. The Group aims to use incentives and reliefs to minimise
the tax cost of conducting business but will not use them for purposes which
are knowingly contradictory to the intent of the legislation. A full copy of
the Group's tax strategy can be found on the Group's website at
www.woodplc.com (http://www.woodplc.com)
7 Discontinued operation
In September 2022, the Group announced it had completed an agreement to sell
the Built Environment Consulting business, which is included within the Built
Environment Consulting operating segment. The Built Environment Consulting
business was classified as a discontinued operation from 1 January 2022, at
which point the conditions under IFRS 5 were met. The Group income statement
and statement of comprehensive income were re-presented to show the
discontinued operation separately from continuing operations.
As per the terms of the agreement, the Group had a residual element of the
transaction classified as held for sale in the 2022 Annual Report. The sale of
the remaining underlying subsidiary, residing in Saudi Arabia, did not
complete during 2023 and will now be retained by the Group. The results in the
comparative periods arising from discontinued operations have been
re-presented in the table below, with the performance of this subsidiary now
showing within the Group income statement as part of continuing operations.
This restatement is in accordance with the requirements of IFRS 5 paragraph
36. The revenue and profit before tax associated with this subsidiary in 2022
was $27.1m and $3.1m respectively.
(i) Results of discontinued operation
2023 2022
Note (unaudited) (re-presented)
$m $m
External revenue - 854.0
Cost of sales (10.2) (735.8)
Gross (loss)/profit (10.2) 118.2
Administrative expenses - (48.4)
Exceptional items - administrative expenses (5.0) (6.7)
Operating (loss)/profit (15.2) 63.1
Finance expense - (1.7)
(Loss)/profit before tax (15.2) 61.4
Taxation - (7.9)
Results from operating activities, net of tax (15.2) 53.5
Gain on sale of discontinued operation 31.0 514.5
Income tax on gain on sale of discontinued operation (exceptional) 6.7 (217.4)
Profit from discontinued operation, net of tax 22.5 350.6
Earnings per share (cents)
Basic 9 3.3 51.5
Diluted 9 3.3 51.5
The profit from the discontinued operation, net of tax of $22.5m (2022:
$350.6m) is attributable entirely to the owners of the Company. Cost of sales
of $10.2m relates to contract costs incurred in respect of the Built
Environment Consulting business prior to its sale that were not known at the
time of the disposal and should have been accrued in that business in the
prior year. As the adjustment is not material the prior year comparatives have
not been restated and the charge included in 2023.
The final proceeds from the disposal of the Built Environmental Consulting
business were agreed during 2023 upon agreement of the completion balance
sheet between the Group and WSP. This has resulted in an additional gain of
$31.0m, comprising $27.1m of cash proceeds and the release of completion
accruals, being recognised in discontinued operations.
The disposal of the built environment business has led to a R&D tax credit
being determined to be unrecoverable in the foreseeable future, and a charge
of $5.0m has been recognised in addition to the charge previously recognised
in 2022, following the filing of the relevant 2022 tax returns.
(ii) Cash flows from / (used in) discontinued operation
2023
Note (unaudited) 2022
$m $m
Net cash used in operating activities - (6.0)
Net cash (used in)/ generated from investing activities (40.0) 1,748.4
Net cash flows for the period (40.0) 1,742.4
8 Dividends
No decision has been taken to resume the dividend and this will be kept under
review by the directors. Any decision to resume payment of a dividend will
consider the Group's future profitability and cash requirements.
9 Earnings per share
2023 (unaudited) 2022
(Losses)/earnings attributable to Number of shares Earnings/(losses) per share (Losses)/earnings attributable to owners of the parent Number of shares Earnings/(losses) per share
owners of the m Cents $m m cents
parent
$m
Basic pre-exceptional (45.2) 685.9 (6.6) (13.7) 680.4 (2.0)
Exceptional items, net of tax (65.5) - (9.5) (342.6) - (50.4)
Basic (110.7) 685.9 (16.1) (356.3) 680.4 (52.4)
Effect of dilutive ordinary shares - - - - - -
Diluted (110.7) 685.9 (16.1) (356.3) 680.4 (52.4)
Adjusted diluted earnings per share calculation
Basic (110.7) 685.9 (16.1) (356.3) 680.4 (52.4)
Exceptional items, net of tax 65.5 - 9.5 342.6 - 50.4
Amortisation related to acquisitions, net of tax 50.8 - 7.4 52.5 - 7.7
Adjusted diluted 5.6 685.9 0.8 38.8 680.4 5.7
Adjusted basic 5.6 685.9 0.8 38.8 680.4 5.7
i) (Losses)/earnings attributable to equity
shareholders
2023 (unaudited) 2022
Continuing operations Discontinued operations
Continuing Discontinued operations (re-presented) (re-presented) Total
operations $m Total $m $m (re-presented)
$m $m
$m
(Losses)/earnings attributable to equity (35.0) (10.2) (45.2) (73.9) 60.2 (13.7)
shareholders (basic pre-exceptional)
Exceptional items, net of tax (98.2) 32.7 (65.5) (633.0) 290.4 (342.6)
(Losses)/earnings attributable (133.2) 22.5 (110.7) (706.9) 350.6 (356.3)
to equity shareholders
Number of shares (basic) 685.9 685.9 685.9 680.4 680.4 680.4
Number of shares (diluted) 685.9 685.9 685.9 680.4 680.4 680.4
Basic earnings per share (cents) (19.4) 3.3 (16.1) (103.9) 51.5 (52.4)
Diluted earnings per share (cents) (19.4) 3.3 (16.1) (103.9) 51.5 (52.4)
2023 (unaudited) 2022
Continuing operations Discontinued operations
Continuing Discontinued operations (re-presented) (re-presented) Total
operations $m Total $m $m (re-presented)
$m $m $m
(Losses)/earnings attributable to equity shareholders (133.2) 22.5 (110.7) (706.9) 350.6 (356.3)
Exceptional items, net of tax 98.2 (32.7) 65.5 633.0 (290.4) 342.6
Amortisation of intangibles on acquisition, 50.8 - 50.8 52.5 - 52.5
net of tax
(Losses)/earnings attributable 15.8 (10.2) 5.6 (21.4) 60.2 38.8
to equity shareholders (adjusted diluted)
(Losses)/earnings attributable 15.8 (10.2) 5.6 (21.4) 60.2 38.8
to equity shareholders (adjusted basic)
Number of shares (diluted) 685.9 685.9 685.9 680.4 680.4 680.4
Number of shares (basic) 685.9 685.9 685.9 680.4 680.4 680.4
Adjusted diluted (cents) 2.3 (1.5) 0.8 (3.1) 8.8 5.7
Adjusted basic (cents) 2.3 (1.5) 0.8 (3.1) 8.8 5.7
The calculation of basic earnings per share is based on the earnings
attributable to owners of the parent divided by the weighted average number of
ordinary shares in issue during the year excluding shares held by the Group's
employee share trusts. For the calculation of diluted earnings per share, the
weighted average number of ordinary shares in issue is adjusted to assume
conversion of dilutive potential ordinary shares, only when there is a profit
per share. The Group's dilutive ordinary shares comprise share options granted
to employees under Executive Share Option Schemes, shares and share options
awarded under the Group's Long-Term Plan and shares awarded under the Group's
Employee Share Plan and Share Incentive Plan. Adjusted basic and adjusted
diluted earnings per share are disclosed to show the results excluding the
impact of exceptional items and amortisation related to acquisitions, net of
tax.
For the year ended 31 December 2023, the Group reported a basic loss (2022:
loss) per ordinary share, therefore the effect of dilutive ordinary shares are
excluded (2022: excluded) in the calculation of diluted earnings per share.
Where profits have been made when disaggregating discontinued and continuing
operations, the calculation of diluted earnings per share was performed on the
same basis as the whole Group. Had the result been a profit, an additional
22.0m of dilutive potential shares would have been used in the calculation of
diluted EPS metrics, which would have reduced the adjusted diluted EPS by 0.01
cents
10 Goodwill and other intangible assets
Software and development Customer contracts and relationships Order backlog Brands Total
costs
Goodwill
$m $m $m $m
$m $m
(unaudited)
Cost
At 1 January 2023 4,277.4 343.2 656.1 157.0 479.4 5,913.1
Exchange movements 49.4 24.1 4.8 1.2 5.4 84.9
Additions - 131.0 - - - 131.0
Disposals - (2.1) - - - (2.1)
Businesses divested (15.0) - - - - (15.0)
At 31 December 2023 4,311.8 496.2 660.9 158.2 484.8 6,111.9
Amortisation and impairment
At 1 January 2023 488.8 239.4 547.7 157.0 171.1 1,604.0
Exchange movements 6.5 19.0 2.8 1.2 1.8 31.3
Amortisation charge - 105.2 26.3 - 28.2 159.7
Disposals - (2.1) - - - (2.1)
At 31 December 2023 495.3 361.5 576.8 158.2 201.1 1,792.9
Net book value at 31 December 2023 3,816.5 134.7 84.1 - 283.7 4,319.0
Cost
At 1 January 2022 5,226.2 288.8 815.7 183.9 661.0 7,175.6
Exchange movements (173.2) (40.3) (21.8) (2.8) (13.3) (251.4)
Additions - 115.9 - - - 115.9
Disposals - (3.4) - - - (3.4)
Businesses divested (775.6) (17.8) (137.8) (24.1) (168.3) (1,123.6)
At 31 December 2022 4,277.4 343.2 656.1 157.0 479.4 5,913.1
Amortisation and impairment
At 1 January 2022 0.8 205.7 581.2 171.7 140.9 1,100.3
Exchange movements (5.2) (33.4) (15.8) (2.5) (3.0) (59.9)
Amortisation charge - 87.5 28.4 11.9 24.1 151.9
Impairment 493.2 - 4.2 - 44.9 542.3
Disposals - (3.4) - - - (3.4)
Businesses divested - (17.0) (50.3) (24.1) (35.8) (127.2)
At 31 December 2022 488.8 239.4 547.7 157.0 171.1 1,604.0
Net book value at 31 December 2022 3,788.6 103.8 108.4 - 308.3 4,309.1
General
In accordance with IAS 36 'Impairment of assets', goodwill was tested for
impairment during the year. The impairment tests were carried out by Cash
Generating Unit ('CGU') as at 31 December 2023 (the "test date"). The Group
has five CGUs and Goodwill is monitored by management at CGU level. The
allocation of Goodwill by CGU as at the test date is shown in the table below.
The carrying value of the goodwill for each CGU as at the test date is shown
in the table below.
Cash Generating Unit Goodwill carrying value Goodwill carrying value
2023 Test date 2022 Test date
(unaudited)
$m $m
Projects 2,195.7 2,280.8
Operations 1,231.2 1,594.8
Consulting 356.4 372.4
Kelchner 16.9 16.9
Swaggart 16.3 16.3
Basis for determining recoverable amount
The recoverable amount was determined by preparing value-in-use calculations
prepared for each CGU using the cash flow projections included in the
financial forecasts prepared by management and approved by the Board for the
period 2024 through to 2028. Management have updated the forecasts which
were underpinned by the new strategy announced in November 2022 based on an
updated assessment of market outlook; growth in market share; resource
utilisation; contract backlog; contract margins; assumed contract awards based
on the current pipeline; and actual performance in 2023. The key market
drivers, within energy, include energy security driven by the ongoing conflict
in Ukraine and supporting energy transition in our focus markets. Our
materials growth drivers are also underpinned by transition to net zero, as
well as increased consumer demand driven by population growth and higher
standards of living.
The projected growth in the CGUs is underpinned by the Group's strategy to
fully capitalise on the engineering capabilities of each of the CGUs to help
our clients move to net zero through energy transition and
decarbonisation. In addition to applying decarbonization capabilities within
each CGU across each of the growth markets, digitization is another key driver
which is expected to draw demand for the digital tools, products and
capabilities offered by the Consulting CGU. During 2023 each of the CGUs
have had significant contract wins in energy transition and decarbonisation
and are therefore well placed to benefit from significant levels of investment
required by our clients to achieve net zero. The Group have also considered
that there are risks associated with energy transition, including energy
transition and industrial decarbonisation markets not generating sufficient
revenues to meet targets, which may also impact the Group's ability to attract
or retain the appropriately skilled workforce which could prevent the Group
from competing for work in this space. However, offsetting this risk is the
large near-term addressable market focused on energy security within oil and
gas along with the desire of those clients to pursue net-zero and
decarbonization efforts. These projects are supporting the energy security
agenda as major economies aim to reduce their dependency on Russian oil and
gas, whilst also ensuring affordable energy for consumers.
Critical assumptions
The revenue CAGR for each of the CGUs ranges from 8.3% to 13.4% (2022: 4.8% to
14.2%). The Projects revenue CAGR includes growth from its Middle East region,
process and chemicals sector and minerals and processing sectors. Projects is
expected to leverage from its existing engineering capabilities and client
relationships to grow its market share in the minerals sectors, whilst
population growth is expected to underpin growth in the process and chemicals
sector. The Projects Middle East business is underpinned by the Group's deep
history in that region. If this growth does not materialise, there is a risk
of an impairment in the Projects CGU.
The Operations revenue CAGR includes growth from the oil and gas sector in
Europe and the Middle East and is underpinned by a global focus on energy
security and supporting the energy transition. Operations have secured a
number of contract awards with large, multinational energy companies during
2023, and this is reflected in a higher orderbook as at 31 December 2023
compared with 31 December 2022. Reasonably possible changes in the critical
assumptions used in the Operations impairment test did not result in an
impairment.
The terminal growth rates assumed from 2028 do not exceed the long-term
average historical growth rates for the regions and sectors in which the CGUs
operate. The Group is well placed to benefit from the significant long term
growth opportunities from Energy Transition, which has been considered in
determining long term growth rates. Management reviewed independent
forecasts which set out the long-term investment required in order to achieve
net zero. This long-term annual growth was then applied to each of the CGUs
based on current activity levels. Accordingly, the long-term growth rates
assumed in the model are 2.4% for Operations (2022: 2.4%); 2.4% for Projects
(2022: 2.4%); and 2.4% (2022: 2.4%) for Consulting.
The cash flows have been discounted using discount rates appropriate for each
CGU, and these rates are reviewed for each impairment review performed. The
discount rate is a critical assumption in the impairment test and the
significant volatility in financial markets has led to an increase in the
discount rate. The Group have considered the additional specific risks related
to each business such as country risk and forecasting risk. The Group have
considered the ongoing conflict in Israel on its operations in the Middle East
as part of its assessment of country risk premium. The pre-tax rates used
for the 2023 review are tabulated as follows and were derived from the Group
WACC calculation with specific adjustments for CGU specific risks including
country risk premiums.
The discount rates tabulated below reflect the view that the cash flows have
been risk adjusted in 2023, whereas risk adjustments were reflected in the
discount rate in 2022. The 2023 pre-tax discount rates, with risk reflected
in the discount rate would have been 13.1% for Projects, 13.7% for Operations,
12.3% for Consulting, 12.9% for Kelchner and 13.1% for Swaggart.
Cash Generating Unit Pre-tax discount rate Pre-tax discount rate Post-tax discount rate Post-tax discount rate
2023 2022 2023 2022
(unaudited) (unaudited)
% % % %
Projects 12.0 13.2 10.3 11.0
Operations 12.3 12.9 10.5 10.5
Consulting 12.0 12.2 10.3 9.9
Kelchner 10.8 12.4 9.4 10.4
Swaggart 11.0 12.8 9.4 10.4
Sensitivity analysis
In order to reduce headroom to $nil in 2023, the post-tax discount rate would
need to increase to:
Cash Generating Unit (unaudited) %
Projects 10.7
Operations 13.0
Consulting 16.8
Kelchner 20.0
Swaggart 17.4
The headroom for Projects was $112m based on the assumptions described above.
The key assumptions used in the impairment model for the CGU include
discount rate, long term growth rate and revenue growth. There are
reasonably possible changes in assumptions that would result in an impairment
for Projects. If the post-tax discount rate was 1.0% higher for Projects,
the impairment would be $171m. A 1.2% reduction in revenue CAGR over the
forecast period would reduce headroom to $nil and a 0.5% reduction in the
long-term growth rate would also reduce headroom to $nil.
Reasonably possible changes in the assumptions used in the impairment tests in
the other CGUs did not result in an impairment.
Group test
The carrying values of the corporate assets that were not allocated to the
above cash generating units above were $111.8m (2022: $73.2m) and were tested
for impairment at the group level, taking into account the estimates and
assumptions discussed above in respect of the Group's cash generating units.
The Group post tax discount rate was 9.6% (pre-tax 11.2%) and a terminal
growth rate of 2.4% was applied to the forecast consolidated cash flows of the
Group, including the unallocated central costs. The recoverable amount of
the Group at the test date was $4,767m. The Group post-tax discount rate
would need to be 0.5% higher to reduce the headroom to $nil.
Intangibles
Customer relationships relate mainly to the acquisition of Amec Foster Wheeler
in 2017 and are being amortised over periods of 5 to 13 years. Order backlog
relates entirely to the acquisition of AFW and was being amortised over
periods of 2 to 5 years and has fully amortised. Brands recognised relate
entirely to the acquisition of AFW and the remaining carrying value is being
amortised over a period of 11 years.
Software and development costs includes internally generated assets with a net
book value of $47.5m at 31 December 2023 (2022: $36.9m). $18.7m (2022: $19.9m)
of internally generated intangibles is included in additions in the year.
The software disposals relate to the write off of fully depreciated assets
that are no longer in use.
11 Property plant and equipment
(unaudited) Land and Buildings Plant and equipment Total
$m
$m
$m
Cost
At 1 January 2023 51.6 79.3 130.9
Exchange movements 1.9 4.1 6.0
Additions 2.7 17.8 20.5
Disposals (17.4) (25.7) (43.1)
Reclassifications - (14.8) (14.8)
At 31 December 2023 38.8 60.7 99.5
Accumulated depreciation and impairment
At 1 January 2023 28.5 20.0 48.5
Exchange movements 0.9 3.3 4.2
Charge for the year 5.1 15.9 21.0
Disposals (12.1) (25.4) (37.5)
Impairment 1.1 0.7 1.8
Reclassifications - (3.8) (3.8)
At 31 December 2023 23.5 10.7 34.2
Net book value at 31 December 2023 15.3 50.0 65.3
Cost
At 1 January 2022 86.7 115.7 202.4
Exchange movements (5.3) (10.9) (16.2)
Additions 1.5 26.1 27.6
Disposals (11.0) (21.7) (32.7)
Businesses divested (note 7) (22.1) (28.1) (50.2)
Reclassifications 1.8 (1.8) -
At 31 December 2022 51.6 79.3 130.9
Accumulated depreciation and impairment
At 1 January 2022 50.5 49.7 100.2
Exchange movements (3.5) (11.4) (14.9)
Charge for the year 5.5 19.7 25.2
Disposals (7.5) (19.4) (26.9)
Businesses divested (note 7) (18.3) (17.2) (35.5)
Reclassifications 1.8 (1.8) -
Impairment - 0.4 0.4
At 31 December 2022 28.5 20.0 48.5
Net book value at 31 December 2022 23.1 59.3 82.4
The net book value of Land and Buildings includes $7.9m (2022: $14.0m) of Long
Leasehold and Freehold property and $7.4m (2022: $9.1m) of Short Leasehold
property. There were no material amounts in assets under construction at 31
December 2023.
During the year there were finance lease assets with a net book value of
$11.5m transferred from Plant and Equipment to Right of Use Assets.
12 Leases
Right of use assets (unaudited) Land and Buildings Plant and equipment Total
$m
$m
$m
Net book value
At 1 January 2023 249.5 26.5 276.0
Exchange movements 10.3 0.8 11.1
Additions 121.2 35.0 156.2
Disposals (2.8) (0.9) (3.7)
Reclassifications - 11.5 11.5
Depreciation of right of use assets (61.4) (33.8) (95.2)
At 31 December 2023 316.8 39.1 355.9
Lease liabilities (unaudited)
At 1 January 2023 342.9
Exchange movements 10.3
Additions 147.6
Disposals (5.4)
Interest expense related to lease liabilities 18.7
Repayment of lease liabilities (113.3)
At 31 December 2023 400.8
Right of use assets
Net book value
At 1 January 2022 316.6 39.5 356.1
Exchange movements (17.5) (2.1) (19.6)
Additions 67.8 27.0 94.8
Disposals (1.5) - (1.5)
Businesses divested (note 7) (53.7) (17.8) (71.5)
Depreciation of right of use assets (62.2) (20.1) (82.3)
At 31 December 2022 249.5 26.5 276.0
Lease liabilities
At 1 January 2022 449.8
Exchange movements (27.0)
Additions 91.9
Disposals (5.4)
Businesses divested (note 7) (62.7)
Interest expense related to lease liabilities 17.9
Repayment of lease liabilities (121.6)
At 31 December 2022 342.9
Included in the above, the Group has finance leases liabilities totalling
$17.7m (2022: $16.2m) in addition to the IFRS 16 lease liabilities in respect
of leases previously classified as operating leases under IAS 17.
A maturity analysis of the Group's total lease liability is shown below:
2023
(unaudited) 2022
$m $m
Current lease liability 83.4 83.2
Non-current lease liability 317.4 259.7
Total lease liability 400.8 342.9
The following table shows the breakdown of lease expense between amounts
charged to operating profit and amounts charged to finance costs.
$m $m
Depreciation charge for right of use assets
Property 61.4 62.2
Plant and equipment 33.8 20.1
Charged to operating profit 95.2 82.3
Interest expense related to lease liabilities 18.7 17.9
Charge to profit/(loss) before taxation for leases 113.9 100.2
13 Investment in joint ventures and other investments
The Group operates a number of joint ventures companies, the most significant
of which are its turbine JV's, EthosEnergy Group Limited and RWG (Repair &
Overhauls) Limited. The Group considers these to be joint arrangements on
the basis that two or more parties have joint control, which is defined as the
contractually agreed sharing of control and exists only when decisions about
the relevant activities of the joint arrangement require the unanimous consent
of the parties sharing control. The Group has a 51% shareholding in
EthosEnergy, a provider of rotating equipment services and solutions to the
power, oil and gas and industrial markets. EthosEnergy is domiciled and
headquartered in Aberdeen, Scotland. The Group has a 50% shareholding in RWG,
a provider of repair and overhaul services to the oil and gas, power
generation and marine propulsion industries. RWG is based in Aberdeen,
Scotland.
The assets, liabilities, income and expenses of the EthosEnergy and RWG are
shown below. The financial information below has been extracted from the
management accounts for these entities.
EthosEnergy (100%) RWG (100%)
2023 2022 2023
2022
(unaudited) $m (unaudited)
$m
$m $m
Non-current assets 145.7 137.9 58.7 57.9
Current assets 534.7 520.7 160.8 141.4
Current liabilities (353.8) (347.7) (78.5) (74.6)
Non-current liabilities (65.7) (78.7) (2.7) (7.7)
Net assets 260.9 232.2 138.3 117.0
Wood Group share 133.1 118.4 69.2 58.5
Accumulated impairments and other adjustments (65.9) (65.9) - -
Wood Group investment 67.2 52.5 69.2 58.5
Revenue 861.0 824.8 253.4 234.3
Cost of sales (726.2) (721.5) (181.6) (169.8)
Administrative expenses (86.9) (80.5) (31.1) (31.2)
Exceptional items - - - -
Operating profit 47.9 22.8 40.7 33.3
Finance expense (11.7) (7.5) (1.0) (0.8)
Profit before tax 36.2 15.3 39.7 32.5
Tax (5.9) (6.4) (7.1) (6.5)
Post-tax profit from joint ventures 30.3 8.9 32.6 26.0
Wood Group share 15.5 4.5 16.3 13.0
Cash and cash equivalents amounted to $30.8m (2022: $48.2m) and $3.2m (2022:
$13.9m) for EthosEnergy and RWG respectively.
Depreciation amounted to $17.0m (2022: $29.0m) and $4.6m (2022: $9.2m) for
EthosEnergy and RWG respectively.
Amortisation amounted to $1.0m (2022: $0.9m) and $1.9m (2022: $2.1m) for
EthosEnergy and RWG respectively.
EthosEnergy's net debt at 31 December 2023 amounted to $75.9m (2022: $85.7m).
RWG had net debt at 31 December 2023 of $0.5m (2022: net cash $5.1m).
The aggregate carrying amount of the Group's other equity accounted joint
ventures, which individually are not material, amounted to $41.7m at 31
December 2023 (2022: $45.5m).
The Group's share of its joint venture income and expenses is shown below.
2023 2022
(unaudited) $m
$m
Revenue 733.5 754.7
Cost of sales (602.5) (641.8)
Administrative expenses (71.9) (68.2)
Operating profit 59.1 44.7
Net finance expense (6.5) (4.4)
Profit before tax 52.6 40.3
Tax (9.8) (9.9)
Share of post-tax profit from joint ventures 42.8 30.4
The movement in investment in joint ventures is shown below:
2023
(unaudited) 2022
$m $m
At 1 January 156.5 169.7
Exchange movements on retranslation of net assets 3.9 (11.9)
Share of profit after tax 42.8 30.4
Dividends received (15.6) (30.1)
Impairment of joint ventures - (2.0)
Additions 0.2 0.4
Disposals (9.7) -
At 31 December 178.1 156.5
The joint ventures have no significant contingent liabilities to which the
Group is exposed, nor has the Group any significant contingent liabilities in
relation to its interest in the joint ventures other than those described in
note 34
A full list of subsidiary and joint venture entities is included in note 38.
Other investments
Other investments of $51.3m (2022: $56.0m) relates to the US SERP defined
contribution scheme referred to in note 33. The SERP invests in a mixture of
equities, bonds and money market funds as part of a pension arrangement for US
based employees. The liabilities of the SERP are included in non-current
liabilities (see note 19).
14 Inventories
2023 2022
(unaudited) $m
$m
Materials 7.8 3.1
Finished goods and goods for resale 8.5 8.0
16.3 11.1
15 Trade and other receivables
2023 2022
(unaudited) $m
$m
Trade receivables 805.4 744.6
Less: provision for impairment of trade receivables (75.9) (65.0)
Trade receivables - net 729.5 679.6
Gross amounts due from customers 522.9 556.9
Prepayments 76.3 84.6
Amounts due from joint ventures 9.8 8.9
Asbestos related insurance recoveries 5.6 11.1
Research and development credits 26.9 24.7
Other receivables 183.4 179.2
Trade and other receivables - current 1,554.4 1,545.0
Long term receivables - asbestos related insurance recoveries 23.2 24.4
Long term receivables - other 161.0 105.1
Total receivables 1,738.6 1,674.5
As at 31 December 2023, the Group had received $198.2m (2022: $200.0m) of cash
relating to non-recourse financing arrangements. An equivalent amount of trade
receivables was derecognised on receipt of the cash. At 31 December 2023,
$111.7m (2022: $113.6m) had been received from customers in the normal course
of business in relation to the same amounts received from the factors. This
$111.7m (2022: $113.6m) is due to be paid over to the factors and is included
in trade payables. The impact of both the cash received from the facility and
the cash received from customers is included within cash generated from
operations.
Included within other long-term receivables of $161.0m (2022: $105.1m) are
contract assets of $96.7m (2022: $74.3m) in relation to the Aegis contract.
Financial assets
2023 2022
(unaudited) $m
$m
Derivative financial instruments (note 20) 9.2 10.8
9.2 10.8
The Group's trade receivables balance is shown in the table below.
31 December 2023 (unaudited) Trade Provision for impairment Trade Receivable
receivables -
$m
receivables -
days
Gross
Net
$m
$m
Projects 420.5 (40.4) 380.1 93
Operations 218.7 (4.7) 214.0 49
Consulting 96.2 (5.2) 91.0 51
Investment Services 70.0 (25.6) 44.4 131
Total Group 805.4 (75.9) 729.5 75
31 December 2022 Trade Provision for impairment Trade Receivable
receivables -
$m
receivables -
days
Gross
Net
$m
$m
Projects 371.1 (40.4) 330.7 76
Operations 197.4 (5.3) 192.1 42
Consulting 105.1 (3.8) 101.3 75
Investment Services 71.0 (15.5) 55.5 73
Total Group 744.6 (65.0) 679.6 67
Receivable days are calculated by allocating the closing trade receivables and
gross amounts due from customers balances to current revenue. A receivable
days calculation of 75 indicates that closing trade receivables represent on
average the most recent 75 days of revenue.
Receivable days for Investment Services has been adjusted to exclude the
impact of the Aegis project for both 2023 and 2022. The Total Group Receivable
days reflects all Group activity including Aegis.
The ageing of the provision for impairment of trade receivables is as follows:
2023 2022
(unaudited) $m
$m
Up to 3 months 0.2 2.6
Over 3 months 75.7 62.4
75.9 65.0
The movement on the provision for impairment of trade receivables is as
follows:
2023 (unaudited) Projects Operations Consulting Built Environment Consulting Investment Services
$m
$m
$m
$m
$m Total
$m
At 1 January 40.4 5.3 3.8 - 15.5 65.0
Exchange movements 1.0 (0.1) 0.2 - 0.1 1.2
Reclassed during year (20.7) - 1.7 - - (19.0)
Provided during year 20.0 1.5 0.4 - 18.2 40.1
Utilised during year (0.3) (0.6) - - (6.8) (7.7)
Released during year - (1.4) (0.9) - (1.4) (3.7)
At 31 December 40.4 4.7 5.2 - 25.6 75.9
2022
At 1 January 43.7 8.2 3.7 5.1 15.2 75.9
Exchange movements (2.7) (0.1) 0.1 - (0.6) (3.3)
Disposed during year - - - (4.1) - (4.1)
Reclassed during year (0.1) 0.2 (0.9) - 0.1 (0.7)
Provided during year 4.2 0.7 1.6 (0.2) 1.5 7.8
Utilised during year (3.5) (3.3) (0.2) - - (7.0)
Released during year (1.2) (0.4) (0.5) (0.8) (0.7) (3.6)
At 31 December 40.4 5.3 3.8 - 15.5 65.0
Other receivables of $183.4m includes an impairment charge of $2.3m against an
impaired VAT receivable. The other classes within trade and other
receivables do not contain impaired assets. Of the $40.1m provided during the
year, $23.8m remains subject to enforcement activity.
The total expected credit loss was $44.2m in 2023 and includes a $20.4m
exceptional charge in relation to a receivable balance within the Power and
industrial EPC business, see note 5 for further details. The remaining balance
of $23.8m principally arose within the Projects business unit.
Included within gross trade receivables of $805.4m above (2022: $744.6m) and
gross amounts due from customers of $522.9m (2022: $556.9m) are contract
assets of $299.2m (2022: $244.6m) which were past due. These relate to
customers for whom there is no recent history or expectation of default. The
ageing analysis of these contract assets is as follows:
2023 2022
(unaudited) $m
$m
Up to 3 months overdue 149.0 117.9
Over 3 months overdue 150.2 126.7
299.2 244.6
The above analysis excludes retentions relating to contracts in progress of
$64.5m (2022: $67.2m).
16 Cash and cash equivalents
2023 2022
(unaudited) $m
$m
Cash at bank and in hand 356.2 521.7
Short-term bank deposits 28.4 -
Restricted cash 49.4 15.0
434.0 536.7
Cash at bank and in hand at 31 December 2023 includes $127.7m (2022: $328.4m)
that is part of the Group's cash pooling arrangements and both cash and
borrowings are grossed up by this amount in the financial statements.
The effective interest rate on short-term deposits at 31 December 2023 was
6.65% (2022: nil%) and these deposits have no maturity date.
The restricted cash balance comprises $38.1m (2022: not considered
restricted) of cash held in Equatorial Guinea where the Group are seeking
Central Bank approval in order to repatriate cash from a subsidiary via
dividends or intercompany loans. A further $9.3m (2022: $10.0m) of cash is
held in jurisdictions where there is insufficient liquidity in the local
market to allow for immediate repatriation. The remaining $2.0m (2022: $5.0m)
relates to balances held within Russia that are impacted by the sanctions
associated with Russia's invasion of Ukraine. Management considers it
appropriate to include the restricted cash balance in the Group's net debt
figure on the basis that it meets the definition of cash, albeit is not
readily available to the Group.
17 Trade and other payables
2023 2022
(unaudited) $m
$m
Trade payables 639.2 550.6
Gross amounts due to customers 99.0 113.0
Other tax and social security payable 57.2 58.2
Accruals 570.2 637.0
Derivative financial instruments 3.4 10.8
Amounts due to joint ventures 12.1 0.3
Asbestos related payables 50.4 59.5
Other payables 275.2 258.2
1,706.7 1,687.6
Trade payables includes $111.7m (2022: $113.6m) relating to cash received from
customers which is due to be paid over to the bank.
Gross amounts due to customers included above represent payments on account
received in excess of amounts due from customers on fixed price contracts.
Accruals includes amounts due to suppliers and sub-contractors that have not
yet been invoiced, unpaid wages, salaries and bonuses.
Other payables includes project related and other liabilities which include
the amounts due under the investigation which was concluded in 2021. At 31
December 2023 there is one remaining payment in relation to the investigation
of $35.6m which was paid in January 2024.
18 Borrowings
2023 2022
(unaudited) $m
$m
Bank loans and overdrafts due within one year or on demand
Unsecured 225.7 345.9
Senior loan notes
Unsecured 89.6 -
Total current borrowings 315.3 345.9
Non-current bank loans
Unsecured 549.3 232.0
Senior loan notes
Unsecured 262.9 352.0
Total non-current borrowings 812.2 584.0
Borrowings of $127.7m (2022: $328.4m) that are part of the Group's cash
pooling arrangements, and are netted against cash for internal reporting
purposes, are grossed up in the short-term borrowings figure above.
Bank overdrafts are denominated in a number of currencies and bear interest
based on the Bank of England base rate or the relevant foreign currency
equivalent.
Following the disposal of the Built Environment Consulting business in
September 2022, the Group repaid $400.0m of the $600.0m term loan and agreed
the early repayment of the US Private Placement loan notes totalling $416.3m.
The Group had total facilities of $1,901.9m as at 31 December 2023, which
comprises of a $200.0m term loan maturing in October 2026, $1,200.0m of
Revolving Credit Facility maturing in October 2026, $352.5m of senior loan
notes in the US private placement market with varying maturities and $149.4m
of other banking facilities.
Of the non-current borrowings of $812.2m, $366.5m is denominated in sterling
and the balance in US dollars.
As noted in the Basis of Preparation, based on the latest forecasts approved
by the directors, the Group expect to pass the covenant requirements during
the forecast period, including in the severe but plausible downside scenario.
Given that the June and December 2023 covenants were passed, all debts under
the RCF facility were disclosed as non-current.
The Group's principal borrowing facilities at 31 December 2023 are set out in
the table below.
Drawn at 31 December 2023 Undrawn at 31 December 2023
Facility (unaudited) Total available $m $m
$m Repayable
Term loan 200.0 200.0 - October 2026
Revolving credit facility 1,200.0 356.9 843.1 October 2026
Senior loan notes 352.5 352.5 - Various dates
Other facilities 149.4 89.6 59.8 Various dates
Accrued interest - 8.4 (8.4) N/A
Unamortised fees - (7.6) 7.6 N/A
1,901.9 999.8 902.1
The above table excludes borrowings of $127.7m that are part of the Group's
cash pooling arrangements and are offset by equivalent cash balances.
The Group has $352.5m (2022: $352.0m) of unsecured senior loan notes issued in
the US private placement market. The notes mature at varying dates between
2024 and 2031 as shown in the table below. Interest is payable at an average
rate of 4.58% (2022: 4.58%).
2023 2022
Repayable (unaudited) $m
$m
July 2024 11.5 11.5
August 2024 55.1 55.1
November 2024 23.0 23.0
July 2026 57.9 57.4
August 2026 58.8 58.8
February 2027 18.4 18.4
February 2029 46.0 46.0
July 2029 59.5 59.5
July 2031 22.3 22.3
352.5 352.0
The effective interest rates on the Group's bank loans and overdrafts at the
balance sheet date were as follows:
2023 2022
(unaudited) %
%
US dollar 7.07 4.79
Sterling 6.67 5.09
Euro 4.95 3.02
The carrying amounts of the Group's borrowings, including those held within
pooling arrangements, are denominated in the following currencies:
2023 2022
(unaudited) $m
$m
US Dollar 658.7 611.6
Sterling 371.8 176.7
Euro 67.0 120.0
Other 30.0 21.6
1,127.5 929.9
The Group is required to issue tender bonds, performance bonds, retention
bonds, advance payment bonds and standby letters of credit to certain
customers. Management have assessed that the possibility of these being
triggered is remote. At 31 December 2023, the Group's bank facilities
relating to the issue of bonds, guarantees and letters of credit amounted to
$1,230.9m (2022: $1,244.2m). At 31 December 2023, these facilities were 58%
utilised (2022: 61%).
Borrowing facilities
The Group has the following undrawn borrowing facilities available at 31
December:
2023 2022
(unaudited) $m
$m
Expiring within one year 59.8 109.7
Expiring between one and two years - -
Expiring between two and five years 842.3 1,155.7
902.1 1,265.4
All undrawn borrowing facilities are floating rate facilities. The
facilities expiring within one year are annual facilities subject to review at
various dates during 2024. The Group was in compliance with its bank
covenants throughout the year.
A reconciliation of movements of borrowings and lease liabilities to cash
flows arising from financing activities is presented in the table below.
Short term borrowings Long term borrowings Lease liabilities
(unaudited) $m $m $m Total
$m
Balance 1 January 2023 345.9 584.0 342.9 1,272.8
Changes from financing cash flows
Repayments of long-term borrowings - (200.0) - (200.0)
Repayments of short-term borrowings (133.5) - - (133.5)
Proceeds from long-term borrowings - 515.0 - 515.0
Payment of lease liabilities (note 12) - - (113.3) (113.3)
Total changes from financing activities (133.5) 315.0 (113.3) 68.2
Effects of changes in foreign exchange rates (note 31) 17.1 0.4 10.3 27.8
Other changes
New leases (note 12) - - 142.2 142.2
Reclassification of senior loan notes 89.6 (89.6) - -
Interest expense - 81.7 18.7 100.4
Interest paid - (81.7) - (81.7)
Other movements (3.8) 2.4 - (1.4)
Total liability other changes 85.8 (87.2) 160.9 159.5
Balance at 31 December 2023 315.3 812.2 400.8 1,528.3
Short term borrowings Long term borrowings Lease liabilities
$m $m $m Total
$m
Balance 1 January 2022 281.9 1,614.1 449.8 2,345.8
Changes from financing cash flows
Repayment of long-term borrowings - (1,039.1) - (1,039.1)
Repayment of short-term borrowings (35.0) - - (35.0)
Proceeds from short-term borrowings 88.0 - - 88.0
Payment of lease liabilities (note 12) - - (121.6) (121.6)
Total changes from financing activities 53.0 (1,039.1) (121.6) (1,107.7)
Effects of changes in foreign exchange rates (note 31) (1.2) 0.1 (27.0) (28.1)
Other changes
New leases (note 12) - - 23.8 23.8
Interest expense - 98.1 17.9 116.0
Interest paid - (98.1) - (98.1)
Other movements 12.2 8.9 - 21.1
Total liability other changes 12.2 8.9 41.7 62.8
Balance at 31 December 2022 345.9 584.0 342.9 1,272.8
19 Other non-current liabilities
2023 2022
(unaudited) $m
$m
Other payables 69.4 106.8
69.4 106.8
Other payables include $51.3m (2022: $55.6m) relating to the US SERP pension
arrangement referred to in note 33 and unfavourable leases of $nil (2022:
$3.3m). The SERP payables are offset by investments of $51.3m which are
included in note 13. Unfavourable lease liabilities represent non-lease
components, such as facilities costs which are not included within the IFRS 16
lease liability.
20 Financial instruments
The Group's activities give rise to a variety of financial risks: market risk
(including foreign exchange risk and cash flow interest rate risk), credit
risk and liquidity risk. The Group's overall risk management strategy is to
hedge exposures wherever practicable in order to minimise any potential
adverse impact on the Group's financial performance.
Risk management is carried out by the Group Treasury department in line with
the Group's Treasury policies. Group Treasury, together with the Group's
business units identify, evaluate and where appropriate, hedge financial
risks. The Group's Treasury policies cover specific areas, such as foreign
exchange risk, interest rate risk, use of derivative financial instruments and
investment of excess cash.
Where the Board considers that a material element of the Group's profits and
net assets are exposed to a country in which there is significant
geo-political uncertainty a strategy is agreed to ensure that the risk is
minimised.
(a) Market risk
(i) Foreign exchange risk
The Group is exposed to foreign exchange risk arising from various
currencies. The Group has subsidiary companies whose revenue and expenses
are denominated in currencies other than the US dollar. Where possible, the
Group's policy is to eliminate all significant currency exposures at the time
of the transaction by using financial instruments such as forward currency
contracts. Changes in the forward contract fair values are booked through
the income statement, except where hedge accounting is used in which case the
change in fair value is recorded in equity.
Hedging of foreign currency exchange risk - cash flow hedges
The notional contract amount, carrying amount and fair values of forward
contracts and currency swaps designated as cash flow hedges at the balance
sheet date are shown in the table below.
2023 2022 2023 2022
(unaudited) Notional (unaudited) Carrying
Notional contract Carrying amount and
contract amount amount and fair value
amount $m fair value $m
$m
$m
Current assets 136.1 144.9 2.1 2.1
Current liabilities (42.1) (180.7) (0.9) (4.8)
A net foreign exchange gain of $3.8m (2022: loss $3.0m) was recognised in the
hedging reserve as a result of fair value movements on forward contracts and
currency swaps designated as cash flow hedges.
Hedging of foreign currency exchange risk - fair value through income
statement
The notional contract amount, carrying amount and fair value of all other
forward contracts and currency swaps at the balance sheet date are shown in
the table below.
2023 2022 2023 2022
(unaudited) Notional (unaudited) Carrying
Notional contract Carrying amount and
contract amount amount and fair value
amount $m fair value $m
$m $m
Current assets 930.1 990.4 7.1 8.7
Current liabilities (443.4) (337.8) (2.5) (6.0)
The Group's largest foreign exchange risk relates to movements in the
sterling/US dollar exchange rate. Movements in the sterling/US dollar rate can
impact the translation of sterling profit earned in the UK and the translation
of sterling denominated net assets. A weakening of the pound has a negative
impact on translation of UK companies' profits and net assets. Sterling
denominated trading profits in the UK are offset by the Group's corporate
overhead and a 10% change in the sterling/dollar rate would result in a change
to Adjusted EBITDA of less than 1%. A 10% change in the sterling/dollar rate
would impact net assets by less than 1%. 10% has been used in these
calculations as it represents a reasonable possible change in the sterling/US
dollar exchange rate. The Group also has foreign exchange risk in relation a
number of other currencies, such as the Australian dollar, the Canadian dollar
and the Euro.
(ii) Interest rate risk
The Group finances its operations through a mixture of retained profits and
debt. The Group borrows in the desired currencies at a mixture of fixed and
floating rates of interest to manage the Group's exposure to interest rate
fluctuations. At 31 December 2023, 30% (2022: 53%) of the Group's borrowings
were at fixed rates. The Group is also exposed to interest rate risk on cash
held on deposit. The Group's policy is to maximise the return on cash
deposits and where possible and deposit cash with a financial institution with
a credit rating of BBB+ or better.
If average interest rates had been 2% higher or lower during 2023 (2022: 2%),
post-tax profit for the year would have been $10.3m lower or higher
respectively (2022: $5.8m). 2% has been used in this calculation as it
represents a reasonable possible change in interest rates.
(iii) Price risk
The Group is not exposed to any significant price risk in relation to its
financial instruments.
(b) Credit risk
The Group's credit risk primarily relates to its trade receivables. The Group
assumes that the credit risk on a financial asset has increased significantly
if it is more than 6 months past due and considers a financial asset to be in
default when the financial asset is more than 12 months past due.
Responsibility for managing credit risk lies within the businesses with
support being provided by Group and divisional management where appropriate.
The credit risk associated with customers is considered as part of each tender
review process and is addressed initially through contract payment terms.
Trade finance instruments such as letters of credit, bonds, guarantees and
credit insurance are used to manage credit risk where appropriate. Credit
control practices are applied thereafter during the project execution phase. A
right to interest and suspension is normally sought in all contracts. There is
significant management focus on customers that are classified as high risk in
the current challenging market although the Group had no material write offs
in the year.
The Group's major customers are typically large companies which have strong
credit ratings assigned by international credit rating agencies. Where a
customer does not have sufficiently strong credit ratings, alternative forms
of security such as the trade finance instruments referred to above may be
obtained.
The Group uses the simplified provision matrix when calculating expected
credit losses on financial assets. The provision matrix is based on historical
default rates and is adjusted for forward looking estimates. The historical
default rate is determined by comparing actual contract write offs against
revenue recognised over each of the prior five years. The average write off
over the historical period can be applied to current year revenue. The
forward-looking assessment also considers post-year end cash collection,
country risk scoring, customer disputes and specific financial uncertainties.
Management review trade receivables based on receivable days calculations to
assess performance. A table showing trade receivables and receivable
days is provided in note 15. Receivable days calculations are not provided
on non-trade receivables as management do not believe that this information is
a relevant metric.
The maximum credit risk exposure on cash and cash equivalents and bank
deposits (more than three months) at 31 December 2023 was $434.0m (2022:
$536.7m). The Group treasury department monitors counterparty exposure on a
global basis to avoid any over exposure to any one counterparty. The Group's
policy is to deposit cash at institutions with a credit rating of at least
BBB+. 100% of cash held on deposit at 31 December 2023 was held with such
institutions.
(c) Liquidity risk
The Group's policy is to ensure the availability of an appropriate amount of
funding to meet both current and future forecast requirements consistent with
the Group's budget and strategic plans. The Group will finance operations and
growth from its existing cash resources and the $902.1m undrawn portion of the
Group's committed banking facilities. The 2023 average net debt (excluding
leases) was $846.4m (2022: $1,489.1m). The cash balance and undrawn portion of
the Group's committed banking facilities can fluctuate throughout the year.
Around the covenant remeasurement dates of 30 June and 31 December the Group's
net debt is typically lower than these averages due to a combination of
factors including a strong focus on collection of receipts from
customers. Although revenue is typically weighted towards the second half
of the year it is usually higher in June than in December, which means the
level of working capital required is typically higher at the end of June and
net debt is typically lower by the end of December.
At 31 December 2023, 100% (2022: 100%) of the Group's principal borrowing
facilities (including senior loan notes) were due to mature in more than one
year. Based on the Group's latest forecasts the Group has sufficient funding
in place to meet its future obligations.
The Group's total bank facilities comprise of a $200.0m term loan maturing in
October 2026 and a $1,200.0m revolving credit facility which matures in
October 2026. The revolving credit facility includes KPIs linked to growing
revenues related to energy transition and sustainable infrastructure and
reducing scope 1 and 2 carbon emissions.
The Group has $352.5m of unsecured senior loan notes issued in the US private
placement market. The notes mature in various tranches between July 2024 and
2031.
(d) Capital risk
The Group seeks to maintain an optimal capital structure by monitoring its
ratio of net debt to EBITDA, its interest cover and its gearing ratio.
The ratio of net debt to Adjusted EBITDA at 31 December 2023 was 2.08 times
(2022: 1.3 times). This ratio is calculated by dividing net debt before leases
by Adjusted EBITDA on a frozen GAAP basis which excludes the impact of IFRS
16.
Interest cover is calculated by dividing Adjusted EBITA, excluding the impact
of IFRS 16, by net recurring finance expense and was 4.0 times for the year
ended 31 December 2023 (2022: 4.2 times).
Gearing is calculated by dividing net debt, before leases, by equity
attributable to owners of the parent. Gearing at 31 December 2023 was 19.1%
(2022: 10.5%).
Financial liabilities
The table below analyses the Group's financial liabilities into relevant
maturity groupings based on the remaining period from the balance sheet date
to the contractual maturity date. The amounts disclosed in the table are the
contractual undiscounted cash flows which are not usually closed out before
contractual maturity.
Less than Between Between Over 5
1 year
1 and 2 years
2 and 5 years
years
$m
$m
$m $m
At 31 December 2023 (unaudited)
Borrowings 365.2 55.6 855.9 24.0
Trade and other payables 1,706.7 - - -
Lease liabilities 104.1 74.4 138.9 228.3
Other non-current liabilities - 17.7 51.7 -
At 31 December 2022
Borrowings 361.2 116.2 431.2 132.7
Trade and other payables 1,628.7 - - -
Lease liabilities 107.0 80.5 123.6 145.2
Other non-current liabilities - 51.2 55.6 -
Fair value of non-derivative financial assets and financial liabilities
The fair value of short-term borrowings, trade and other payables, trade and
other receivables, financial assets, short-term deposits and cash at bank and
in hand approximates to the carrying amount because of the short maturity of
interest rates in respect of these instruments.
The fair value of non-current bank borrowings as at 31 December 2023 was
$256.0m (book value $242.9m) (2022: $231.1m, book value $244.3m). The fair
value of the US Private Placement debt at 31 December 2023 was $360.3m (book
value $352.5m) (2022: $358.1m, book value $352.0m).
Fair values (excluding the fair value of assets and liabilities classified as
held for sale) are determined using observable market prices (level 2 as
defined by IFRS 13 'Fair Value Measurement') as follows:
· The fair value of forward foreign exchange contracts is estimated
by discounting the difference between the contractual forward price and the
current forward price for the residual maturity of the contract using a
risk-free interest rate.
· The fair value of interest rate swaps is estimated by discounting
estimated future cash flows based on the terms and maturity of each contract
and using market rates.
All derivative fair values are verified by comparison to valuations provided
by the derivative counterparty banks.
The Group determines whether transfers have occurred between levels in the
hierarchy by reassessing categorisation (based on the lowest level input that
is significant to the fair value measurement as a whole) at the end of each
reporting period. During the year ended 31 December 2023 and 31 December 2022,
there were no transfers into or out of level 2 fair value measurements.
21 Asbestos related litigation
$m
2023 (unaudited)
At 1 January 2023 311.4
Reclassifications 9.5
Utilised (58.4)
Charge to income statement 45.1
Release of provisions (2.6)
Exchange movements 1.5
At 31 December 2023 306.5
Presented as
Current -
Non-current 306.5
2022
At 1 January 2022 342.1
Reclassifications (5.6)
Utilised (44.1)
Charge to income statement 59.6
Release of provisions (37.0)
Exchange movements (3.6)
At 31 December 2022 311.4
Presented as
Current -
Non-current 311.4
The Group assumed the majority of its asbestos-related liabilities when it
acquired Amec Foster Wheeler in October 2017. Whilst some of the asbestos
claims have been and are expected to be made in the United Kingdom, the
overwhelming majority have been and are expected to be made in the United
States.
Some of Amec Foster Wheeler's US subsidiaries are defendants in numerous
asbestos-related lawsuits and out-of-court informal claims pending. Plaintiffs
claim damages for personal injury alleged to have arisen from exposure to, or
use of, asbestos in connection with work allegedly performed during the 1970s
and earlier. The estimates and averages presented have been calculated on the
basis of the historical US asbestos claims since the initiation of claims
filed against these entities.
The number and cost of current and future asbestos claims in the US could be
substantially higher than estimated and the timing of payment of claims could
be sooner than estimated, which could adversely affect the Group's financial
position, its results and its cash flows.
The Group expects these subsidiaries to be named as defendants in similar
suits and that new claims will be filed in the future. For purposes of these
financial statements, management have estimated the indemnity and defence
costs to be incurred in resolving pending and forecasted claims through to
2050. Although we believe that these estimates are reasonable, the actual
number of future claims brought against these subsidiaries and the cost of
resolving these claims could be higher.
Some of the factors that may result in the costs of asbestos claims being
higher than the current estimates include:
· an increase in the rate at which new claims are filed and an
increase in the number of new claimants
· increases in legal fees or other defence costs associated with
asbestos claims
· increases in indemnity payments, decreases in the proportion of
claims dismissed with zero payment and payments being required to be made
sooner than expected
The Group has worked with its advisors with respect to projecting asbestos
liabilities and to estimate the amount of asbestos-related indemnity and
defence costs at each year-end through to 2050. Each year the Group records
its estimated asbestos liability at a level consistent with the advisors'
reasonable best estimate. The Group's advisors perform a quarterly and
annual review of asbestos indemnity payments, defence costs and claims
activity and compare them to the forecast prepared at the previous year-end.
Based on its review, they may recommend that the assumptions used to estimate
future asbestos liabilities are updated, as appropriate.
The total liability recorded in the Group's balance sheet at 31 December 2023
is based on estimated indemnity and defence costs expected to be incurred to
2050. Management believe that any new claims filed after 2050 will be
minimal.
Asbestos related liabilities and assets recognised on the Group's balance
sheet are as follows:
2023 (unaudited) 2022
US UK Total US UK Total
$m $m $m $m $m $m
Asbestos related provision
Gross provision 409.5 31.1 440.6 425.4 32.5 457.9
Effect of discounting (83.8) - (83.8) (87.0) - (87.0)
Net provision 325.7 31.1 356.8 338.4 32.5 370.9
Insurance recoveries
Gross recoveries - (28.7) (28.7) (6.0) (29.5) (35.5)
Effect of discounting - - - - - -
Net recoveries - (28.7) (28.7) (6.0) (29.5) (35.5)
Net asbestos related liabilities 325.7 2.4 328.1 332.4 3.0 335.4
Presented in financial statements as follows
Provisions - non-current 306.5 311.4
Trade and other payables 50.4 59.5
Trade and other receivables (5.6) (11.1)
Long term receivables (23.2) (24.4)
328.1 335.4
The gross US asbestos related provision of $409.5m (2022: $425.4m) includes
$23.3m (2022: $35.4m) relating to agreed settlements which have not been paid
at 31 December 2023. The remaining $386.2m (2022: $390.0m) represents the
gross US asbestos related provision which is discounted to a net present value
of $302.4m (2022: $303.0m).
A net interest charge of $11.1m (2022: $5.9m) representing the unwinding of
the discount over time and a yield curve credit of $0.2m (2022: $35.6m) are
included within exceptional items since the movements in the provision are
non-trading, can be large and are driven by market conditions which are out
with the Group's control.
An additional $34.2m has been charged to the income statement in the year,
reflecting future actuarial adjustments in the overall plan estimates. The
increase to the estimates are driven by a higher number of filings compared to
the underlying actuarial model, an increased number of settlements at higher
settlement values and updated future inflation rates. A further credit or
income of $10.0m has been recorded to the income statement in the year as a
result of collecting insurance proceeds from an insolvent insurer, not
previously recognised.
A summary of the Group's US asbestos claim activity is shown in the table
below:
2023
(unaudited) 2022
Number of open claims Number Number
At 1 January 57,200 57,490
New claims 2,410 2,330
Claims resolved (5,640) (2,620)
At 31 December 53,970 57,200
Claims not valued in liability (38,900) (42,170)
Open claims valued in liability at 31 December 15,070 15,030
Claims not valued in the liability include claims on certain inactive court
dockets, claims over six years old that are considered abandoned and certain
other items.
Based on 2023 activity, the Group's current forecast liabilities have been
adjusted for payments made in 2023 of $58.4m and to reflect the impact of
discounting.
In 2023, the liability for asbestos indemnity and defence costs to 2050 was
calculated at a gross nominal amount of $440.6m (present value $356.8m), which
brought the liability to a level consistent with our advisor's reasonable best
estimate. The total asbestos-related liabilities are comprised of estimates
for liabilities relating to open (outstanding) claims being valued and the
liability for future unasserted claims to 2050.
The estimate takes account of the following information and/or assumptions:
· number of open claims
· forecasted number of future claims
· estimated average cost per claim by disease type - mesothelioma,
lung cancer and non-malignancies
The total estimated liability, which has been discounted for the time value of
money, includes both the estimate of forecasted indemnity amounts and
forecasted defence costs. Total defence costs and indemnity liability
payments are estimated to be incurred through to 2050. The Group believes
that it is likely that there will be some claims filed after 2050, however
these are projected to be minimal.
In the last 5 years from 2019 to 2023, the US average combined indemnity and
defence cost per resolved claim has been approximately $10k. The average
cost per resolved claim is increasing and management believe it will continue
to increase in the future as the Group continues to resolve the current and
estimated future claims inventory. A sensitivity analysis on average
indemnity settlement and defence costs is included in the table below.
Asbestos related receivables represents management's best estimate of
insurance recoveries relating to liabilities for pending and estimated future
asbestos claims through to 2050. The receivables are only recognised when it
is virtually certain that the claim will be paid.
The following table sets out the sensitivities associated with a change in
certain estimates used in relation to the US asbestos-related liabilities:
Assumption (unaudited) Impact on asbestos liabilities (range)
$m
25% change in average indemnity settlement amount 50-60
25% change in forecasted number of new claims 50-60
25% change in estimated defence costs 40-50
In addition to the above, the impact on the income statement in the year is
sensitive to changes in the blended yield curve rate used to calculate the
time value of money.
The Group has used a 27-year blended yield curve rate, based on US Treasury
strip rates, to discount its asbestos liabilities. The rate as at 31 December
2023 is 3.64% (2022: 3.97% using a 30-year US Treasury Bond rate). A change of
0.1% in the 27-year blended yield curve rate would give rise to a change to
the income statement charge/credit of approximately $1.7m.
The Group's subsidiaries have been effective in managing the asbestos
litigation, in part, because the Group has access to historical project
documents and other business records going back more than 50 years, allowing
it to defend itself by determining if the claimants were present at the
location of the alleged asbestos exposure and, if so, the timing and extent of
their presence. In addition, the Group has identified and validated insurance
policies issued since 1952 and has consistently and vigorously defended claims
that are without merit and settled meritorious claims for reasonable amounts.
The table below summarises the asbestos-related net cash impact for indemnity
and defence costs and collection of insurance proceeds:
2023
(unaudited) 2022
$m $m
Asbestos litigation, defence and case resolution payments 58.4 44.1
Insurance proceeds (16.4) (7.7)
Net asbestos related payments 42.0 36.4
The Group expects to have a net cash outflow of approximately $35m as a result
of asbestos liability indemnity and defence payments in excess of insurance
proceeds during 2024. This estimate assumes no elections by the Group to
fund additional payments. The Group has discounted the expected future cash
flows with respect to the asbestos related liabilities using the blended yield
curve rates.
22 Provisions
2023 (unaudited) Insurance Litigation Project related provisions Total
$m related provisions $m $m
Property $m
$m
At 1 January 2023 46.2 26.0 12.8 63.3 148.3
Reclassifications 1.3 - - - 1.3
Utilised - (0.4) (11.2) (17.0) (28.6)
Charge to income statement 12.4 2.9 23.0 13.0 51.3
Release of provisions (19.2) (1.7) - (18.4) (39.3)
Exchange movements - 0.6 0.4 1.3 2.3
At 31 December 2023 40.7 27.4 25.0 42.2 135.3
Presented as
Current - 7.4 23.0 27.2 57.6
Non-current 40.7 20.0 2.0 15.0 77.7
2022 Insurance Litigation Project related provisions Total
$m related provisions $m $m
Property $m
$m
At 1 January 2022 55.2 32.4 93.3 112.2 293.1
Reclassifications 1.3 - 1.1 4.5 6.9
Utilised - (3.2) (88.5) (45.5) (137.2)
Divestments - - - (0.7) (0.7)
Charge to income statement 17.4 0.4 10.0 15.3 43.1
Release of provisions (27.7) (2.3) (2.5) (18.1) (50.6)
Exchange movements - (1.3) (0.6) (4.4) (6.3)
At 31 December 2022 46.2 26.0 12.8 63.3 148.3
Presented as
Current - 3.3 11.0 30.6 44.9
Non-current 46.2 22.7 1.8 32.7 103.4
Insurance provisions
The Group has liabilities in relation to its captive insurance companies of
$40.7m (2022: $46.2m).
The Group currently has one captive insurance company, Garlan Insurance
Limited, which is active and is registered in Guernsey with tax domicile in
the UK. The company provides insurance solely to other Group companies and
does not provide any insurance to third parties. The provisions recorded
represent amounts payable to external parties in respect of claims, the value
of which is based on actuarial reports which assess the likelihood and value
of these claims. These are reassessed annually, with movements in claim
reserves being recorded in the income statement.
Property provisions
Property provisions total $27.4m (2022: $26.0m). Property provisions mainly
comprise of dilapidations relating to the cost of restoring leased property
back into its original, pre-let condition. The estimate of costs is the
greatest area of uncertainty and the timing of future cash outflows is linked
to the term dates of numerous individual leases.
Litigation related provisions
The Group is party to litigation involving clients and sub-contractors arising
from its contracting activities. Management has taken internal and external
legal advice in considering known or reasonably likely legal claims and
actions by and against the Group. Where a known or likely claim or action is
identified, management carefully assesses the likelihood of success of the
claim or action. A provision is recognised only in respect of those claims
or actions where management consider it is probable that a cash outflow will
be required.
Provision is made for management's best estimate of the likely settlement
costs and/or damages to be awarded for those claims and actions that
management considers are likely to be successful. Due to the inherent
commercial, legal and technical uncertainties in estimating project claims,
the amounts ultimately paid or realised by the Group could differ from the
amounts that are recognised in the financial statements.
In the second half of 2023, and as noted in note 5, a third party raised an
arbitration claim against the Group in respect of alleged damages and costs
arising from a fixed price contract in the discontinued Power and Industrial
EPC business. Management have recognised a provision of $23.0m as an
exceptional charge, representing their assessment of probable outflows arising
from the matter.
Investigations
At 31 December 2023, the Group continues to recognise the final instalment of
outstanding penalties of $35.6m (2022: $37.3m) within Trade and other
payables. The final instalment was paid in January 2024.
Project related provisions
The Group has numerous provisions relating to the projects it undertakes for
its customers. The value of these provisions relies on specific judgements in
areas such as the estimate of future costs or the outcome of disputes and
litigation. Whether or not each of these provisions will be required, the
exact amount that will require to be paid and the timing of any payment will
depend on the actual outcomes. The balance is made up of a large number of
provisions, which are not individually material or significant.
Certain of the jurisdictions in which the Group operates, in particular the US
and the EU, have environmental laws under which current and past owners or
operators of property may be jointly and severally liable for the costs of
removal or remediation of toxic or hazardous substances on or under their
property, regardless of whether such materials were released in violation of
law and whether the operator or owner knew of, or was responsible for, the
presence of such substances. Largely as a consequence of the acquisition of
Amec Foster Wheeler, the Group currently owns and operates, or owned and
operated, industrial facilities. It is likely that, as a result of the Group's
current or former operations, hazardous substances have affected the property
on which those facilities are or were situated.
As described in note 34, the Group agreed to indemnify certain third parties
relating to businesses and/or assets that were previously owned by the Group
and were sold to them. These principally relate to businesses that were sold
by Amec Foster Wheeler prior to its acquisition by the Group.
23 Deferred tax
Deferred tax is calculated in full on temporary differences under the
liability method using the tax rate applicable to the territory in which the
asset or liability has arisen. The Group has provided deferred tax in relation
to UK companies at 25% (2022: 25%). The movement on the deferred tax account
is shown below:
(Asset)/liability
(unaudited) Re-presented Income OCI Other As at 31 December 2023
statement
$m
$m
As at 1 January 2023
$m $m
$m
Accelerated capital allowances (31.5) (2.6) (1.8) - (35.9)
Intangibles 179.8 (4.7) 3.1 - 178.2
Pension 106.8 4.1 (11.8) - 99.1
Share based charges (1.4) (0.3) - - (1.7)
Other temporary differences 8.4 (2.4) (3.3) (0.6) 2.1
Provisions (47.7) 13.7 (1.0) - (35.0)
Unremitted earnings 23.5 2.7 0.4 - 26.6
Deferred interest deduction - (3.8) (0.2) - (4.0)
Tax credits - (0.2) - 0.2 -
Losses (199.0) 4.0 0.7 (1.6) (195.9)
Total 38.9 10.5 (13.9) (2.0) 33.5
As at 1 January 2022 Income OCI Other Disposals Re-presented
$m
statement
$m
$m
$m
$m As at 31 December 2022
$m
Accelerated capital allowances (26.8) (7.1) 2.4 - - (31.5)
Intangibles 240.3 1.2 (4.5) - (57.2) 179.8
Pension 63.6 10.0 33.2 - - 106.8
Share based charges (2.3) 0.9 - - - (1.4)
Other temporary differences (3.3) 7.5 4.6 (0.4) - 8.4
Provisions (50.7) 0.8 1.8 - 0.4 (47.7)
Unremitted earnings 21.7 3.1 (1.3) - - 23.5
Deferred interest deduction (54.2) 54.2 - - - -
Tax credits - 1.5 - (1.5) - -
Losses (191.5) (9.6) 1.9 (0.1) 0.3 (199.0)
Total (3.2) 62.5 38.1 (2.0) (56.5) 38.9
Deferred tax is presented in the financial statements as follows:
2023
(unaudited) 2022
$m $m
Deferred tax assets (43.1) (61.2)
Deferred tax liabilities 76.6 100.1
Net deferred tax (asset)/liability 33.5 38.9
No deferred tax liability has been recognised in respect of $20,776.0m (2022:
$21,722.0m) of unremitted reserves of subsidiaries because the Group is in a
position to control the timing of the reversal of the temporary difference and
it is not probable that such differences will reverse in the foreseeable
future. The amount of unrecognised deferred tax liabilities in respect of
these unremitted reserves is estimated to be $49.4m (2022: $61.8m).
The deferred tax balances are analysed below.
31 December 2023
Accelerated capital allowances Intangibles $m Pension $m Share based charges $m Other temporary differences Provisions $m Unremitted earnings Deferred interest deduction Losses $m Netting $m Total $m
$m $m $m $m
(unaudited)
Deferred tax assets (49.6) - (1.8) (1.7) (1.5) (35.0) - (4.0) (195.9) 246.4 (43.1)
Deferred tax liabilities 13.7 178.2 100.9 - 3.6 - 26.6 - - (246.4) 76.6
Net (35.9) 178.2 99.1 (1.7) 2.1 (35.0) 26.6 (4.0) (195.9) - 33.5
The prior year allocation of deferred tax has been reviewed and items
previously classified as other temporary differences have been reallocated
into categories that provide improved disclosure of what they relate to. Other
temporary differences primarily relate to differences between IFRS and local
GAAP accounts and temporary differences related to leases.
Included in the $195.9m (2022: $199.0m) of deferred tax assets in respect of
losses is an amount of $104.5m (2022: $97.4m) relating to the UK tax group
which has sufficient deferred tax liabilities to offset, and $84.4m (2022:
$91.3m) relating to the US tax group of which no asset (2022: no asset) is
recognised based on forecast profits of the US business, the balance is
supported by deferred tax liabilities.
31 December 2022
Accelerated capital allowances Intangibles $m Pension $m Share based charges $m Other temporary differences Provisions $m Unremitted earnings Deferred interest deduction Losses $m Netting $m Total $m
$m $m $m $m
Deferred tax assets (61.7) - (1.3) (1.4) (4.0) (47.7) - - (199.0) 253.9 (61.2)
Deferred tax liabilities 30.2 179.8 108.1 - 12.4 - 23.5 - - (253.9) 100.1
Net (31.5) 179.8 106.8 (1.4) 8.4 (47.7) 23.5 - (199.0) - 38.9
The expiry dates of unrecognised gross deferred tax assets carried forward are
as follows:
31 December 2023 (unaudited) Tax losses Deductible temporary differences Total
$m $m $m
Expiring within 5 years 711.0 123.1 834.1
Expiring within 6-10 years 19.6 - 19.6
Expiring within 11-20 170.1 - 170.1
years
Unlimited 7,047.3 1,511.7 8,559.0
7,948.0 1,634.8 9,582.8
31 December 2022 Tax losses Deductible temporary differences Total
$m $m $m
Expiring within 5 years 695.3 131.9 827.2
Expiring within 6-10 years 32.0 7.5 39.5
Expiring within 11-20 years 137.7 - 137.7
Unlimited 7,046.9 1,177.8 8,224.7
7,911.9 1,317.2 9,229.1
The expiry dates of unrecognised net deferred tax assets carried forward are
as follows:
31 December 2023 (unaudited) Tax losses Deductible temporary differences Total
$m $m $m
Expiring within 5 years 147.8 123.1 270.9
Expiring within 6-10 years 5.9 - 5.9
Expiring within 11-20 42.4 - 42.4
years
Unlimited 1,761.1 382.9 2,144.0
1,957.2 506.0 2,463.2
31 December 2022 Tax losses Deductible temporary differences Total
$m $m $m
Expiring within 5 years 86.9 131.9 218.8
Expiring within 6-10 years 9.6 7.5 17.1
Expiring within 11-20 years 34.3 - 34.3
Unlimited 1,732.8 299.6 2,032.4
1,863.6 439.0 2,302.6
24 Share based charges
The Group currently has a number of share plans that give rise to equity
settled share based charges. These are the Executive Share Option Scheme
('ESOS'), the Long Term Plan ('LTP'), the Employee Share Plan ('ESP') and the
Share Incentive Plan ('SIP'). The charge to operating profit for these plans
for the year amounted to $19.6m (2022: $20.7m) and is included in
administrative expenses with the corresponding credit included in retained
earnings.
Long Term Plan and Discretionary Share Plan
The Group's Long-Term Plan ('LTP') was introduced in 2013. The plan was
replaced at the Group's Annual General Meeting in 2023 with the new
Discretionary Share Plan ("DSP"). There are two distinct awards made under the
DSP, performance-based awards to the executive leadership team made based on
achievement of performance measures and non-performance awards to senior
management either in the form of conditional share awards or nil cost share
options.
The performance measures relevant to active cycles are total shareholder
return, EBITDA margin, revenue growth, EBITDA and ESG targets including
reducing carbon emissions and leadership gender diversity. Participants may
be granted conditional share awards or nil cost options at the start of the
cycle. Where performance applies, this is measured over a three year period
and up to 80% of an award may vest based on the performance over that period.
The vesting of at least 20% of any award is normally deferred for a further
period of at least two years.
Employees may also be granted non-performance awards either in the form of
conditional share awards or share options. These awards typically have a
three-year vesting period. From 2022, a large portion of senior management who
were previously eligible for the performance-based element of the LTP were
instead awarded these non-performance awards.
Performance based awards
Details of the LTP awards are set out in the table below. The charge for
market related performance targets has been calculated using a Monte Carlo
simulation model taking account of share price volatility against peer group
companies, risk free rate of return, dividend yield and the expected lifetime
of the award. Further details of the LTP are provided in the Directors'
Remuneration Report.
Cycle Performance period Fair value of award Awards outstanding 31 December 2023 Awards outstanding 31 December 2022
(unaudited)
11 2018-20 £6.67 130,233 405,899
12 2019-21 £5.69 227,146 257,082
13 2020-22 £3.64 - 6,987,812
14 2021-23 £3.17 7,048,776 7,634,392
15 2022-24 £1.88 1,354,999 1,647,844
16 2023-25 £1.32 3,567,754 -
12,328,908 16,933,029
3,567,754 awards were made during the year, 299,928 awards were exercised
during the year and 7,871,947 awards lapsed or were cancelled due to
performance targets not being achieved.
The awards outstanding under cycle 11 and 12 represent 100% of the deferred
award for directors and 20% of the award for all other participants at vesting
which is deferred for two years. Zero awards remain outstanding under cycle 13
as performance measures were missed. Awards under cycle 15 and 16 were granted
to directors and the executive leadership team only, with other senior
management receiving non-performance LTP awards.
Further details on the LTP are provided in the Directors' Remuneration Report.
ESOS
For the purposes of calculating the fair value of the share options, a
Black-Scholes option pricing model has been used. Based on past experience, it
has been assumed that options will be exercised, on average, six months after
the earliest exercise date, which is four years after grant date, and a lapse
rate of 25% has been assumed. The share price volatility used in the
calculation of 40% is based on the actual volatility of the Group's shares as
well as that of comparable companies. The risk-free rate of return is based on
the implied yield available on zero coupon gilts with a term remaining equal
to the expected lifetime of the options at the date of grant.
Share awards
A summary of the basis for the charge for ESOS and LTP options is set out
below together with the number of awards granted, exercised and lapsed during
the year.
ESOS LTP and deferred bonus
2023 2022 2023 2022
(unaudited) (unaudited)
Number of participants 156 218 261 349
Lapse rate 25% 25% 10% 10%
Risk free rate of return on grants during year N/A N/A 3.69% 1.43%
Share price volatility 40% 40% 40% 40%
Dividend yield on grants during year N/A N/A 0% 0%
Fair value of options granted during year N/A N/A £1.41-£2.25 £1.91-£2.39
Weighted average remaining contractual life 0.3 years 0.7 years 1.8 years 2.2 years
Options outstanding 1 January 995,000 1,540,288 8,254,534 3,284,268
Options granted during the year - - 7,942,031 7,673,780
Options exercised during the year - - (1,406,735) (1,456,502)
Options lapsed during the year (545,500) (545,288) (1,189,312) (1,247,012)
Dividends accrued on options - - - -
Options outstanding 31 December 449,500 995,000 13,600,518 8,254,534
No. of options exercisable at 31 December 449,500 995,000 597,733 296,531
Weighted average share price of options exercised during year £1.85 £1.58
N/A N/A
Executive Share Option Schemes
The following options to subscribe for new or existing shares were outstanding
at 31 December:
Number of ordinary Exercise price Exercise period
shares under option
(per share)
Year of Grant
2023 2022
(unaudited)
2012 - - 680½p 2016-2022
2013 - 518,500 845⅓p 2017-2023
2014 449,500 476,500 767⅔p 2018-2024
449,500 995,000
Share options are granted at an exercise price equal to the average mid-market
price of the shares on the three days prior to the date of grant.
Nil value share awards
The following awards granted under the Group's LTP/DSP were outstanding at 31
December:
Number of ordinary Exercise price
shares under award
(per share) Exercise
period
Year of Grant 2023 2022
(unaudited)
2018 - 79,348 0.00p 2022-2023
2020 - 227,183 0.00p 2022-2023
2020 5,000 5,000 0.00p 2023-2024
2021 627,000 1,544,000 0.00p 2025-2026
2022 83,222 101,337 0.00p 2024-2025
2022 880,000 900,000 0.00p 2025-2026
2022 4,606,367 5,397,666 0.00p 2025
2023 465,634 - 0.00p 2025-2026
2023 6,933,295 - 0.00p 2026
13,600,518 8,254,534
Awards are granted under the Group's LTP/DSP at nil value. There are no
performance criteria relating to the exercise of the options. Further
details on the LTP/DSP are provided in the Directors' Remuneration Report.
Employee share plan
The Group introduced the ESP in 2016. Under the plan employees contribute
regular monthly amounts which are used to purchase shares over a one-year
period. At the end of the year, the participating employees are awarded one
free share for every two shares purchased, providing they remain in employment
for a further year. During 2023, 2,192,616 shares were awarded in relation to
the ESP, of which 599,218 and 1,593,398 shares related to the 2022/23 and
2023/24 schemes respectively.
Share incentive plan
The Group introduced the SIP in 2021 for UK employees. Under the plan, which
is recognised by HM Revenue and Customs, employees contribute regular monthly
amounts of up to £150 per month to purchase shares. The participating
employees are awarded one free share for every two purchased, provided that
they hold the purchased shares for 3 years and remain in employment. During
2023, 845,381 partnership shares and 422,563 matching shares were awarded
25 Share capital
Ordinary shares of 4(2)/(7) pence each (2021: 4(2)/(7) pence) shares 2023 shares 2022
$m
Authorised, issued and fully paid (unaudited)
$m
At 1 January and 31 December 691,839,369 41.3 691,839,369 41.3
Holders of ordinary shares are entitled to receive any dividends declared by
the Company and are entitled to vote at general meetings of the Company.
26 Share premium
2023 2022
$m
(unaudited)
$m
At 1 January and 31 December 63.9 63.9
The shares allocated to the trust during the year were issued at 4(2)/(7)
pence (2021: 4(2)/(7) pence).
27 Retained earnings
2023 2022
(unaudited) $m
$m
At 1 January 1,224.4 1,415.0
Loss for the year attributable to owners of the parent (110.7) (356.3)
Credit relating to share based charges (note 24) 19.6 20.7
Re-measurement (losses)/gains on retirement benefit liabilities (note 33) (82.2) 170.9
Movement in deferred tax relating to retirement benefit liabilities 18.0 (41.6)
Deferred tax impact of rate change in equity 0.7 (0.8)
Tax on derivative financial instruments (0.4) (1.7)
Other tax movements in equity (0.1) (1.3)
Exchange movements in respect of shares held by employee share trusts - 12.5
Purchase of shares by employee share trusts for the Share Incentive Plan (SIP) 1.6 1.7
Transfer from merger reserve 242.0 -
Transactions with non-controlling interests - 5.3
At 31 December 1,312.9 1,224.4
Retained earnings are stated after deducting the investment in own shares held
by employee share trusts. No options have been granted over shares held by
the employee share trusts (2022: nil).
Shares held by employee share trusts
2023
(unaudited) 2022
Shares $m Shares $m
Balance 1 January 8,442,031 99.4 14,358,014 111.9
Shares issued to satisfy option exercises (1,406,735) - (1,456,502) -
Shares issued to satisfy awards under Long Term Incentive Plan (299,928) - (1,438,398) -
Shares issued to satisfy awards under Employee Share Plan (1,114,466) - (1,984,772) -
Shares issued to satisfy awards under Share Incentive Plan (1,267,944) - (1,036,311) -
Exchange movement - - - (12.5)
Balance 31 December 4,352,958 99.4 8,442,031 99.4
Shares acquired by the employee share trusts are purchased in the open market
using funds provided by John Wood Group PLC to meet obligations under the
Employee Share Option Schemes and LTP. Shares are allocated to the employee
share trusts in order to satisfy future option exercises at various prices.
The costs of funding and administering the trusts are charged to the income
statement in the period to which they relate. The market value of the shares
at 31 December 2023 was $9.5m (2022: $13.7m) based on the closing share price
of £1.72 (2022: £1.35) and closing exchange rate of 1.2749 (2022: 1.2029).
The employee share trusts have waived their rights to receipt of dividends on
ordinary shares.
28 Merger reserve
2023 2022
(unaudited) $m
$m
At 1 January 2,540.8 2,540.8
Transfer to retained earnings (242.0) -
At 31 December 2,298.8 2,540.8
On 6 October 2017, 294,510,217 new shares were issued in relation to the
acquisition of Amec Foster Wheeler Group. As the acquisition resulted in the
Group securing 90% of Amec Foster Wheeler's share capital, the acquisition
qualified for merger relief under section 612 of the Companies Act 2006 and
the premium arising on the issue of the shares was credited to a merger
reserve rather than the share premium account.
In November 2019, John Wood Group PLC (the Company) sold its investment in
Amec Foster Wheeler Limited and other subsidiaries to another subsidiary
company, John Wood Group Holdings Limited for $2,815.2m in exchange for a
promissory note. To the extent that the promissory note is settled by
qualifying consideration, the related portion of the merger reserve is
considered realised and becomes available for distribution.
In 2023, John Wood Group Holdings Limited paid $242.0m to John Wood Group PLC
in a partial settlement of the promissory note. The repayment represented
qualifying consideration and as a result the Company transferred an equivalent
portion of the merger reserve to retained earnings.
29 Other reserves
Capital reduction reserve Capital redemption reserve Currency translation reserve
$m
$m
$m
Hedging reserve
$m
Total
$m
At 1 January 2022 88.1 439.7 (497.0) (9.8) 21.0
Cash flow hedges - - - 5.1 5.1
Exchange movement on retranslation of foreign operations - - (223.0) - (223.0)
Exchange movement on disposal of foreign operations - - 54.5 - 54.5
At 31 December 2022 88.1 439.7 (665.5) (4.7) (142.4)
Cash flow hedges (unaudited) - - - 3.8 3.8
Exchange movement on retranslation of foreign operations (unaudited) - - 58.2 - 58.2
At 31 December 2023 (unaudited) 88.1 439.7 (607.3) (0.9) (80.4)
The capital reduction reserve was created subsequent to the Group's IPO in
2002 and is a distributable reserve.
The capital redemption reserve was created following a share issue that formed
part of a return of cash to shareholders in 2011. This is not a distributable
reserve.
The currency translation reserve relates to the retranslation of foreign
currency net assets on consolidation. This was reset to zero on transition to
IFRS at 1 January 2004. The movement during the year relates to the
retranslation of foreign operations, including goodwill and intangible assets
recognised on acquisition.
The hedging reserve relates to the accounting for derivative financial
instruments under IFRS 9. Fair value gains and losses in respect of effective
cash flow hedges are recognised in the hedging reserve.
30 Non-controlling interests
2023 2022
(unaudited) $m
$m
At 1 January 1.5 3.3
Share of profit for the year 5.5 4.6
Dividends paid to non-controlling interests (1.6) (1.1)
Transactions with non-controlling interests - (5.3)
At 31 December 5.4 1.5
31 Analysis of net debt
At 1 January 2023 Cash Other Exchange movements At 31 December
flow 2023
2023 (unaudited) $m $m $m $m $m
Short term borrowings (345.9) 133.5 (85.8) (17.1) (315.3)
Long term borrowings (584.0) (315.0) 87.2 (0.4) (812.2)
(929.9) (181.5) 1.4 (17.5) (1,127.5)
Cash and cash equivalents 536.7 (107.6) - 4.9 434.0
Net debt excluding leases (393.2) (289.1) 1.4 (12.6) (693.5)
Leases (342.9) 113.3 (160.9) (10.3) (400.8)
Net debt including leases (736.1) (175.8) (159.5) (22.9) (1,094.3)
At 1 January 2022 Cash Other Exchange movements At 31 December
flow 2022
2022 $m $m $m $m $m
Short term borrowings (281.9) (53.0) (12.2) 1.2 (345.9)
Long term borrowings (1,614.1) 1,039.1 (8.9) (0.1) (584.0)
(1,896.0) 986.1 (21.1) 1.1 (929.9)
Cash and cash equivalents 503.0 60.2 - (26.5) 536.7
Net debt excluding leases (1,393.0) 1,046.3 (21.1) (25.4) (393.2)
Leases (449.8) 121.6 (41.7) 27.0 (342.9)
Net debt including leases (1,842.8) 1,167.9 (62.8) 1.6 (736.1)
Cash at bank and in hand at 31 December 2023 includes $127.7m (2022: $328.4m)
that is part of the Group's cash pooling arrangements. For internal reporting
and the calculation of interest, this amount is netted with short-term
overdrafts and is presented as a net figure on the Group's balance sheet. In
preparing these financial statements, the Group is required to gross up both
its cash and short-term borrowings figures by this amount.
Cash and cash equivalents of $434.0m (2022: $536.7m) includes restricted cash
of $49.4m (2022: $15.0m). The restricted cash balance comprises $38.1m (2022:
not considered restricted) of cash held in Equatorial Guinea where the Group
are seeking Central Bank approval in order to repatriate cash from a
subsidiary via dividends or intercompany loans. A further $9.3m (2022:
$10.0m) of cash is held in jurisdictions where there is insufficient liquidity
in the local market to allow for immediate repatriation. The remaining $2.0m
(2022: $5.0m) relates to balances held within Russia that are impacted by the
sanctions associated with Russia's invasion of Ukraine. Management considers
it appropriate to include the restricted cash balance in the Group's net debt
figure on the basis that it meets the definition of cash, albeit is not
readily available to the Group.
The lease liability at 31 December 2023 is made up of non-current leases of
$317.4m (2022: $259.7m) and current leases of $83.4m (2022: $83.2m).
The other movements of $159.5m (2022: $62.8m) in the above table represents
new leases entered into of $142.2m (2022: $23.8m), interest expense of $18.7m
(2022: $17.9m), amortisation of bank facility fees of $2.4m (2022: $8.9m) and
accrued interest on loan notes of $3.8m (2022: $12.2m). In addition,
senior loan notes amounting to $89.6m were reclassified from long term
borrowings to short term as they fall due within the next 12 months.
As at 31 December 2023, the Group had received $198.2m (2022: $200.0m) of cash
relating to non-recourse financing arrangements. An equivalent amount of
trade receivables was derecognised on receipt of the cash. At 31 December
2023, $111.7m (2022: $113.6m) had been received from customers in the normal
course of business in relation to the same amounts received from the
factors. This $111.7m (2022: $113.6m) is due to be paid over to the factors
and is included in trade payables. The impact of both the cash received from
the facility and the cash received from customers is included within cash
generated from operations.
32 Employees and directors
Employee benefits expense 2023 2022
(unaudited) $m
$m
Wages and salaries 2,414.3 2,808.0
Social security costs 180.6 196.1
Pension costs - defined benefit schemes (note 33) 2.9 1.7
Pension costs - defined contribution schemes (note 33) 97.4 103.5
Share based charges (note 24) 19.6 20.7
2,714.8 3,130.0
Average monthly number of employees (including executive directors) 2023 2022
No.
No.
By geographical area:
UK 4,928 5,601
US 6,443 9,128
Rest of the World 20,701 20,721
32,072 35,450
The average number of employees excludes contractors and employees of joint
venture companies.
Key management compensation 2023 2022
(unaudited) $m
$m
Salaries and short-term employee benefits 9.0 13.9
Amounts receivable under long-term incentive schemes 0.8 0.7
Social security costs 0.8 1.0
Post-employment benefits 0.2 0.3
Share based charges 2.5 3.6
Termination benefits - 0.9
13.3 20.4
Key management compensation represents the charge to the income statement in
respect of the remuneration of the Group board and Group Executive Leadership
Team ('ELT') members. At 31 December 2023, key management held 0.2% of the
voting rights of the company.
Directors 2023 2022
(unaudited) $m
$m
Aggregate emoluments 3.6 3.8
Aggregate amounts receivable under long-term incentive schemes 0.3 0.3
Aggregate gains made on the exercise of share options 0.1 0.3
Share based charges 1.1 1.6
5.1 6.0
At 31 December 2023, two directors (2022: one) had retirement benefits
accruing under a defined contribution pension plan and no directors (2022:
none) had benefits accruing under a defined benefit pension scheme. Further
details of directors' emoluments are provided in the Directors' Remuneration
Report.
33 Retirement benefit schemes
The Group operates a number of defined benefit pension schemes which are
largely closed to future accrual. The assets of the defined benefits schemes
are held separately from those of the Group, being invested with independent
investment companies in trustee administered funds. The trustees of the
pension schemes are required by law to act in the best interests of the scheme
participants and are responsible for setting certain policies (such as
investment, contribution and indexation policies) for the schemes.
At 31 December 2023, the largest schemes by gross obligation are the Wood
Pension Plan ('WPP') in the UK, the Foster Wheeler Inc Salaried Employees
Pension Plan ('FW Inc SEPP') in the US and the Foster Wheeler Inc Pension Plan
for Certain Employees ('FW Inc PPCE') in the US. These pension plans provide
certain former employees with leaving service benefits that are generally
based on service and salary.
The scheme valuations are based on the membership data contained within the
triennial valuation of Wood Pension Plan as at 31 March 2023, and the
valuation of the Foster Wheeler Inc SEPP/PPCE as at 1 January 2023. The scheme
valuations have been updated by the schemes' actuaries for the requirement to
assess the present value of the liabilities of the schemes as at 31 December
2023. The assets of the schemes are stated at their aggregate market value as
at 31 December 2023. It is expected that the Group will make funding and
expense contributions to these pension plans totalling $6.9m in the calendar
year 2024 (nil in 2023) in line with the funding requirements agreed for the
plans.
The actuarial valuation method is prescribed by the IAS 19 accounting standard
and uses discount rates determined by the yields on high quality, AA rated,
bonds at the measurement date. Conversely, each pension scheme is subject to a
separate technical provisions or funding basis valuation which is considered
to be more prudent than the IAS 19 methodology. Under IAS 19, the Wood Pension
Plan is 116% funded on 31 December 2023 compared to 109% funded on the
technical provisions basis.
Management have considered the requirements of IFRIC 14, 'The Limit on a
Defined Benefit Asset, Minimum Funding Requirements and their Interaction' and
consider it is appropriate to recognise the IAS 19 surplus in the Wood Pension
Plan. The rules governing these schemes provide an unconditional right to a
refund assuming the gradual settlement of the scheme's liabilities over time
until all members have left the schemes. The requirements of IFRIC 14 also
mean there is no requirement to recognise any additional liabilities in
relation to deficit funding requirements. At the balance sheet date, there
are no plans to exercise the unconditional right to a refund and other assets
are being explored to use the surplus, and therefore the tax rate applied to
the surplus of the UK scheme is 25%.
Scheme membership at the date of the most recent scheme census was as follows:
2023 (unaudited) 2022
Wood Pension FW FW Wood FW FW
Plan Inc Inc Pension Inc Inc
SEPP PPCE Plan SEPP PPCE
Active members 303 30 22 494 44 28
Deferred members 7,190 734 266 8,313 622 437
Pensioner members 10,178 2,245 833 10,149 2,233 871
Active members includes deferred members still employed but not actively
contributing to the scheme.
The principal assumptions made by the actuaries at the balance sheet date
were:
2023 (unaudited) 2022
Wood FW FW Wood Pension FW FW
Pension Inc Inc Plan Inc Inc
Plan SEPP PPCE % SEPP PPCE
% % % % %
Discount rate 4.8 4.9 4.9 5.0 5.2 5.2
Rate of increase in pensions in payment and deferred pensions 2.8 N/A N/A 2.8 N/A N/A
Rate of retail price index inflation 3.0 N/A N/A 3.1 N/A N/A
Rate of consumer price index inflation 2.6 N/A N/A 2.6 N/A N/A
The assumptions on the FW Inc SEPP and FW Inc PPCE in the above table are not
applicable since there are no post-retirement increases or cost of living
adjustments provided in these plans. With no cost of living adjustments, there
are no underlying retail price index or consumer price index assumptions to
consider.
The mortality assumptions used to determine pension liabilities in the main
schemes at 31 December 2023 were as follows:
Scheme Mortality assumption
Wood Pension Plan Base table
Non-pensioners: Males: 102% of S3PMA Females: 104% of S3PFA_M Pensioners:
Males: 97% of S3PMA Females: 99% of S3PFA_M
Future improvements
Scheme specific table with CMI 2022 (Sk =7.0) projections and a long-term rate
of improvement of 1.25% pa, initial addition ("A" parameter) of 0.3, 25%
weight on 2022 data and no weight on 2020 and 2021 data
FW Inc SEPP and FW Inc PPCE Pri-2012 Employee and Annuitant tables for males and females with generational
projection using Scale MP-2021 with no collar adjustments and Pri-2012
Contingent Annuitant mortality for spouses and beneficiaries with generational
projection using Scale MP-2021 with no collar adjustments
The mortality assumption uses data appropriate to each of the Group's schemes
adjusted to allow for expected future improvements in mortality using the
latest projections. Assumptions regarding future mortality are based on
published statistics and the latest available mortality tables. In relation to
the Wood Pension Plan, the Group has reflected the latest available data on
the mortality characteristics of plan members following a mortality study
undertaken since the prior year-end. The Group has also adopted the CMI_2022
model for projecting future improvements in life expectancy with the following
parameters: s-kappa of 7.0, no weight to 2020 and 2021 death data and 25%
weight to 2022 death data and an initial addition parameter of 0.3. The impact
of adopting this revised mortality assumption, compared to the assumption
adopted for the prior year, is around a 3% reduction in the value of the
defined benefit obligation. In setting the assumptions, the Group has also
reflected the results of a separate demographic study which assessed the
proportion of plan members who are expected to have an eligible dependant and
the likely age difference of any dependant. The impact of adopting these
revised assumptions is around 2.3% increase in the value of the defined
benefit obligation compared to the prior year.
For the schemes referred to above the assumed life expectancies are shown in
the following table:
2023 (unaudited) 2022
Wood FW FW Wood FW FW
Pension Inc Inc Pension Inc Inc
Plan SEPP PPCE Plan SEPP PPCE
Life expectancy at age 65 of male aged 45 22.9 22.2 22.2 23.8 22.1 22.1
Life expectancy at age 65 of male aged 65 22.0 20.7 20.7 22.5 20.6 20.6
Life expectancy at age 65 of female aged 45 24.8 24.1 24.1 25.5 24.0 24.0
Life expectancy at age 65 of female aged 65 23.7 22.6 22.6 24.0 22.6 22.6
The amounts recognised in the income statement are as follows:
2023 2022
(unaudited) $m
$m
Current service cost 2.9 1.7
Past service credit - -
Total expense included within operating profit 2.9 1.7
Interest cost 126.7 78.0
Interest income on scheme assets (145.0) (80.4)
Total included within finance income (18.3) (2.4)
The amounts recognised in the balance sheet are determined as follows:
2023 2022
(unaudited) $m
$m
Present value of funded obligations (2,707.3) (2,533.0)
Fair value of scheme assets 3,019.1 2,892.2
Net surplus 311.8 359.2
Changes in the present value of the defined benefit liability are as follows:
2023 2022
(unaudited) $m
$m
Present value of funded obligations at 1 January 2,533.0 4,626.6
Current service cost 2.9 1.7
Interest cost 126.7 78.0
Re-measurements:
- actuarial losses/(gains) arising from changes in financial assumptions 48.1 (1,544.5)
- actuarial gains arising from changes in demographic assumptions (16.9) (31.4)
- actuarial losses arising from changes in experience 41.6 72.0
Benefits paid (164.4) (177.3)
Decrease due to divestments - (58.7)
Exchange movements 136.3 (433.4)
Present value of funded obligations at 31 December 2,707.3 2,533.0
Changes in the fair value of scheme assets are as follows:
2023 2022
(unaudited) $m
$m
Fair value of scheme assets at 1 January 2,892.2 4,811.5
Interest income on scheme assets 145.0 80.4
Contributions 3.1 42.5
Benefits paid (164.4) (177.3)
Re-measurement losses on scheme assets (9.4) (1,333.0)
Expenses paid (7.6) (7.4)
Decrease due to divestments - (55.9)
Exchange movements 160.2 (468.6)
Fair value of scheme assets at 31 December 3,019.1 2,892.2
Analysis of the movement in the balance sheet surplus:
2023 2022
(unaudited) $m
$m
Surplus at 1 January 359.2 184.9
Current service cost (2.9) (1.7)
Finance income 18.3 2.4
Contributions 3.1 42.5
Re-measurement (losses)/gains recognised in the year (82.2) 170.9
Expenses paid (7.6) (7.4)
Increase due to divestments (note 7) - 2.8
Exchange movements 23.9 (35.2)
Surplus at 31 December 311.8 359.2
The increased surplus due to divestments of $2.8m in 2022 relates to sale of a
net pension liability on a small US scheme. This forms part of the disposal of
the Built Environment Consulting business outlined in note 7.
The net surplus at 31 December is presented in the Group balance sheet as
follows:
2023 2022
(unaudited) $m
$m
Wood Pension Plan 391.9 432.4
Retirement benefit scheme surplus 391.9 432.4
Foster Wheeler Inc SEPP/PPCE (52.5) (49.4)
All other schemes (27.6) (23.8)
Retirement benefit scheme deficit (80.1) (73.2)
Net surplus 311.8 359.2
For the principal schemes the defined benefit obligation can be allocated to
the plan participants as follows:
2023 (unaudited) 2022
Wood FW
Pension Inc FW Wood FW FW
Plan SEPP Inc Pension Inc Inc
% % PPCE Plan SEPP PPCE
% % % %
Active members 3.9 2.4 1.6 5.6 3.5 1.7
Deferred members 32.9 24.6 12.8 38.5 23.1 12.9
Pensioner members 63.2 73.0 85.6 55.9 73.4 85.4
The weighted average duration of the defined benefit obligation is as follows:
2023 (unaudited) 2022
Wood FW
Pension Inc FW Wood FW FW
Plan SEPP Inc Pension Inc Inc
years years PPCE Plan SEPP PPCE
years years years years
Duration of defined benefit obligation 13.0 8.1 7.3 13.0 8.1 7.3
The major categories of total scheme assets are as follows:
2023 (unaudited) 2022 2023 2022
Wood FW
Pension Inc (unaudited)
Plan SEPP FW Wood FW FW Quoted Quoted
$m $m Inc Pension Inc Inc on active on active
PPCE Plan SEPP PPCE market market
$m $m $m $m % %
Equities 5.2 26.2 53.1 10.6 31.1 62.4 89.8 93.8
Property a 34.0 - - 75.7 - - - -
Bonds (including gilts) 1,398.2 39.8 48.5 1,254.7 37.2 44.3 100.0 100.0
Liability-Driven Investments (LDIs) 1,554.5 - - 1,456.3 - - 100.0 100.0
Cash 101.9 0.9 1.7 124.3 0.8 1.7 100.0 100.0
Liquidity funds 14.8 - - 248.6 - - 100.0 100.0
Derivatives b (286.0) - - (480.1) - - - -
Investment funds - 3.7 7.6 - 3.3 6.8 100.0 100.0
2,822.6 70.6 110.9 2,690.1 72.4 115.2 n/a n/a
a. Property assets are valued based on an analysis of recent
market transactions supported by market knowledge derived from third-party,
independent valuation experts
b. Derivatives are mainly related to repurchase agreements
used to fund liability driven investments
As at 31 December 2023, 108.2% (2022: 113.7%) of total scheme assets in the
principal schemes have quoted prices in active markets.
The Plan has a target allocation of 50% of investments held in
cashflow-matching assets, with the remaining 50% allocated to
liability-matching assets, designed to partially offset the movements in the
Plan's liabilities caused by movements in interest rates and inflation. This
asset split reflects the Trustee's current view of the most appropriate
investments balancing risk/reward characteristics of the funds the Plan is
invested in. During the accounting period the Plan has continued the process
of selling down the growth assets in the portfolio.
As a result, the value of the property portfolio has declined over the
reporting period. This was partly due to two properties being sold during
2023, totalling £23.9 million disposal proceeds alongside valuation
reductions across the property portfolio driven by a combination of wider
property market valuations weakening as well as property specific factors in
the portfolio.
The reduction in the cash allocation over the 12 months to 31 December 2023 is
predominantly down to the cash and cash equivalents balance within the
BlackRock LDI mandate. In Q4 2022 the LDI mandate was recapitalised following
the UK governments "mini budget" and the gilts crisis that followed and this
resulted in a higher than usual cash balance in the LDI mandate at 31 December
2022. This cash balance has been invested into gilts and other hedging
instruments during 2023 reducing the allocation. The majority of the change
in the value of the derivatives allocation can be attributed to a change in
the allocation to gilt repos in the LDI mandate. The remainder of the change
is the result of derivatives exposure at the buy and maintain credit managers
who use derivatives to hedge currency risk. As currency pairs fluctuate, the
market value of derivatives within these mandates will also fluctuate.
The Trustee's policy and beliefs in relation to ESG factors for the Plan are
set out in the Statement of Investment Principles. The Trustee also undertake
TCFD reporting annually, which assesses the climate impact of the Plan's
portfolio as well as the potential risks that differing climate change
scenarios may pose to the Plan over differing time horizons. Individual
investment manager ESG ratings are reviewed in detail annually and the Trustee
discuss ESG related issues when meeting with the Plan's investment managers.
The Group seeks to fund its pension plans to ensure that all benefits can be
paid as and when they fall due. The Group is in the process of finalising the
31 March 2023 valuation, but due to the significant surplus, no contribution
will be likely.
The US plans are funded to ensure that statutory obligations are met and
contributions are generally payable to at least minimum funding requirements.
Scheme risks
The retirement benefit schemes are exposed to a number of risks, the most
significant of which are -
Volatility
The defined benefit obligation is measured with reference to corporate bond
yields and if scheme assets underperform relative to this yield, this will
create a deficit, all other things being equal. The scheme investments are
well diversified such that the failure of a single investment would not have a
material impact on the overall level of assets.
The schemes hold various liability driven investments comprising physical
gilts, swap and leveraged gilt exposures to provide asset protection against
interest and inflation factors inherent in their liability valuations.
Collateral buffers have been further strengthened by de-risking steps taken to
disinvest from equities and it is believed the WPP has sufficient collateral
to withstand a sizable level of movement in interest rates. Of the scheme's
liabilities 105.2% are currently hedged against interest rates and 103.7%
against inflation rate risk.
Changes in bond yields
A decrease in corporate bond yields will increase the defined benefit
obligation. This would however be offset to some extent by a corresponding
increase in the value of the scheme's bond asset holdings.
Inflation risk
The majority of benefits in deferment and in payment are linked to price
inflation so higher actual inflation and higher assumed inflation will
increase the defined benefit obligation.
Life expectancy
The defined benefit obligation is generally made up of benefits payable for
life and so increases to members' life expectancies will increase the defined
benefit obligation, all other things being equal.
Sensitivity of the retirement benefit obligation
The impact of changes to the key assumptions on the retirement benefit
obligation is shown below. The sensitivity is based on a change in an
assumption whilst holding all other assumptions constant. In practice, this
is unlikely to occur, and changes in some of the assumptions may be
correlated. When calculating the sensitivity of the defined benefit
obligation to significant actuarial assumptions the same method has been
applied as when calculating the pension obligation recognised in the Group
balance sheet.
Wood Wood FW FW FW FW
Approximate increase/(decrease) on scheme liabilities
Pension Pension Inc Inc Inc Inc
Plan Plan SEPP SEPP PPCE PPCE
2023 2022 2023 2022 2023 2022
(unaudited) (unaudited) (unaudited)
$m $m $m $m $m $m
Discount rate
Plus 0.5% (146.6) (134.0) (3.2) (3.2) (5.2) (5.4)
Minus 0.5% 163.0 151.5 3.5 3.5 5.6 5.7
Inflation
Plus 0.1% 15.0 13.3 N/A N/A N/A N/A
Minus 0.1% (14.9) (13.2) N/A N/A N/A N/A
Life expectancy
Plus 1 year 86.5 75.5 3.0 2.9 6.2 6.1
Minus 1 year (87.0) (73.6) (3.0) (2.9) (6.1) (6.0)
The sensitivity analysis covering the impact of reasonably plausible movements
in pension assumptions are included in the above table. The 0.5% sensitivity
applied is considered to be sufficient on the basis of minimal movements
between 2023 and 2022 on the interest rates of high-quality corporate bonds in
the currency in which the benefits will be paid and that have terms to
maturity similar to those of the related retirement benefit obligation. The
discount rate sensitivities can be extrapolated downwards and upwards to
broadly calculate the impact of a 0.25% and 1% discount rate movement
respectively.
Defined contribution plans
Pension costs for defined contribution plans were as follows:
2023
(unaudited) 2022
$m $m
Defined contribution plans 97.4 103.5
There were no material contributions outstanding at 31 December 2023 in
respect of defined contribution plans.
The Group operates a Supplemental Executive Retirement Plan (SERP) pension
arrangement in the US for certain employees. During the year, the Group made
contributions of $0.1m (2022: $0.1m) to the arrangement. Contributions are
invested in a portfolio of US funds and the fair value of the funds at the
balance sheet date are recognised by the Group in other investments.
Investments held by the Group at 31 December amounted to $51.7m (2022: $55.6m)
and will be used to pay benefits when employees retire. The corresponding
liability is recorded in other non-current liabilities.
34 Contingent liabilities
General
A contingent liability is a potentially material present obligation that
arises from past events but is not recognised because it is not probable that
an outflow of resources will be required to settle the obligation or the
amount of the obligation cannot be measured with sufficient reliability.
Cross guarantees
At the balance sheet date, the Group had cross guarantees extended to its
principal bankers and surety providers in respect of sums advanced to
subsidiaries and certain joint ventures. A liability will only occur in the
event of a default by a subsidiary or certain joint ventures on its
obligations.
Legal Claims
From time to time, the Group is notified of claims in respect of work carried
out on customer projects or as a subcontractor to others. For a number of
these claims the potential exposure is material. Where management believes
we are in a strong position to defend these claims no provision is made, such
that no economic outflow is probable. This includes a civil administrative
determination, made by the Contraloría General de la República de Colombia
against two Amec Foster Wheeler subsidiaries, along with 22 others, in
relation to work carried out for Refineria de Cartagena, S.A ("Reficar")
between 2009 and 2016. We are continuing to vigorously challenge this
determination and we are confident in our ability to prevail. This also
includes commercial disputes which arise predominantly within our Projects
business, some of which may evolve within the next 12 months and these will be
reassessed in future periods as the Group engages in defences to the claims.
At any point in time there are a number of claims where it is too early to
assess the merit of the claim, and hence it is not possible to make a reliable
estimate of the potential financial impact. In performing this assessment, the
directors considered the nature of existing litigations or claims, the
progress of matters, existing law and precedent, the opinions and views of
legal counsel and other advisors, the Group's experience in similar cases
(where applicable) and other facts available to the Group at the time of
assessment. The director's assessment of these factors may change over time as
individual litigations or claims progress.
The group carries insurance coverage and in the event of future economic
outflow arising with respect to any of these contingencies, an element of
reimbursement may occur, subject to any excess or other policy restrictions
and limits.
Investigations
Following the settlement of the various regulatory investigations in 2021, it
remains possible that there may be other adverse consequences for the Group's
business including actions by authorities in other jurisdictions. At this
time, these consequences appear unlikely and therefore no provision has made
in respect of them in the financial statements.
Employment claims
The Group received assessments from HMRC into the historical application of
employer's National Insurance Contributions to workers on the UK Continental
Shelf. The assessments have been appealed and our case is stayed for a fixed
period. We believe it is more likely than not that we will be able to defend
this challenge and therefore as a result do not expect that it is probable a
liability will arise. The maximum potential exposure to the Group in relation
to tax and interest should we be unsuccessful in our position is approximately
$32.5m.
Indemnities and retained obligations
The Group has agreed to indemnify certain third parties relating to businesses
and/or assets that were previously owned by the Group and were sold to them.
Such indemnifications relate primarily to breach of covenants, breach of
representations and warranties, as well as potential exposure for retained
liabilities, environmental matters and third party claims for activities
conducted by the Group prior to the sale of such businesses and/or assets. We
have established provisions for those indemnities in respect of which we
consider it probable that there will be a successful claim, to the extent such
claim is quantifiable. The Group sold its Built Environment Consulting
business to WSP in late 2022 and the share purchase agreement provided an
indemnity for losses on three specified contracts. No provisions were
considered necessary for these contracts as at 31 December 2023.
Tax planning
HMRC have challenged the deductibility of certain interest expenses in
relation to loans from Irish resident finance companies to the UK. The tax
treatment of the Irish finance companies under the UK controlled foreign
company regime was previously considered as part of the EU State Aid, but no
state aid was found to apply. A significant amount of contemporaneous
documentation has been provided to HMRC regarding the transition from a
previous finance company structure in the Netherlands, and subsequent funding
of acquisitions via the Irish companies. HMRC continue with their enquiries.
We believe that the interest deductions have been appropriately taken in line
with tax legislation and guidance and therefore do not expect any outflow as a
result, however we continue to monitor case law in the area and will consider
the challenges of HMRC when raised. The maximum potential exposure to the
Group including interest in relation to the interest deductions is
approximately $39.5m and in the event of any amount ultimately being payable
there is no prospect of any reimbursement.
35 Capital and other financial commitments
2023
(unaudited) 2022
$m $m
Contracts placed for future capital expenditure not provided in the financial 102.3 74.8
statements
The capital expenditure above relates to software costs which will be included
within intangible asset additions when incurred.
36 Related party transactions
The following transactions were carried out with the Group's joint ventures.
These transactions comprise sales and purchases of goods and services and
funding provided in the ordinary course of business. The receivables include
loans to joint venture companies.
2023
(unaudited) 2022
$m $m
Sale of goods and services to joint ventures 3.6 12.2
Purchase of goods and services from joint ventures 0.6 4.3
Receivables from joint ventures 9.8 8.9
Payables to joint ventures 12.1 0.3
Compensation of key management personnel includes salaries, non-cash benefits
and contributions to post retirement benefits schemes disclosed in note 32.
The Group operates a number of defined benefit pension arrangements and seeks
to fund these arrangements to ensure that all benefits can be paid as and when
they fall due. The Group has an agreed schedule of contributions with the UK
plan's trustees where amounts payable by the Group are dependent on the
funding level of the respective scheme. The US plans are funded to ensure that
statutory obligations are met and contributions are generally payable to at
least minimum funding requirements. Note 33 sets out details of the Group's
pension obligations under these arrangements.
37 Post balance sheet events
The directors have reviewed the position of the Group, up to the date
authorised for issue of these financial statements and have not identified any
events arising after the reporting period which require disclosure.
38 Subsidiaries, joint ventures and other related undertakings
The Group's subsidiary and joint venture undertakings at 31 December 2023 are
listed below. All subsidiaries are fully consolidated in the financial
statements. Ownership interests noted in the table reflect holdings of
ordinary shares.
Subsidiaries
Company Name Registered Address Ownership Interest %
Algeria
SARL Wood Group Algeria Regus Algeria, Tour Nord,, Centre Commercial et Administratif de Bab Ezzouar,, 100
Quartier d'affaires de Bab Ezzouar, Algeria Properties
Wood Group Somias SPA PO Box 67, Elmalaha Road (Route des Salines), Elbouni, Annaba, Algeria 55
Angola
Production Services Network Angola Limitada RuaKima Kienda, Edificio SGEP, 2nd Floor, Apartment 16, Boavista District, 49*
Ingombota, Luanda, Angola
Wood Group Kianda Limitada No 201, Rua Engenheiro Armindo de Andrade,Bairro Miramar, Simbizanga, Luanda, 41*
Angola
Argentina
Foster Wheeler E&C Argentina S.A. Paraguay 1866, Buenos Aires, Argentina 100
ISI Mustang (Argentina) S.A. Pedro Molina 714, Provincia de Mendoza, Ciudad de Mendoza, Argentina 100
Wood Solar Argentina S.A.U. Tucuman 1 Floor 4, Buenos Aires, Argentina 100
Wood Wind Argentina S.A.U. Tucuman 1 Floor 4, Buenos Aires, Argentina 100
Australia
Amec Foster Wheeler Australia Pty Ltd Level 1, 240 St Georges Terrace, Perth, WA 6000, Australia 100
Aus-Ops Pty Ltd Level 1, 240 St Georges Terrace, Perth, WA 6000, Australia 100
Innofield Services Pty Ltd Level 1, 240 St Georges Terrace, Perth, WA 6000, Australia 100
RIDER HUNT INTERNATIONAL (AUSTRALIA) PTY LTD Level 3, 171 Collins Street, Melbourne, VIC 3000, Australia 100
SVT Holdings Pty Ltd Level 1, 240 St Georges Terrace, Perth, WA 6000, Australia 100
Wood Australia Architecture Pty Ltd Level 1, 240 St Georges Terrace, Perth, WA 6000, Australia 100
Wood Australia Pty Ltd Level 3, 171 Collins Street ,Melbourne, VIC, 3000, Australia 100
Wood Field Services Pty Ltd Level 3, 171 Collins Street ,Melbourne, VIC, 3000, Australia 100
Wood Group Australia PTY Ltd Level 1, 240 St Georges Terrace, Perth, WA 6000, Australia 100
Wood Group Kenny Australia Pty Ltd Level 1, 240 St Georges Terrace, Perth, WA 6000, Australia 100
Azerbaijan
AMEC Limited Liability Company 37 Khojali Street, Baku, AZ1025, Azerbaijan 100
Wood Group PSN Azerbaijan LLC Khojali Avenue,Building 37, Khatal District, Baku, AZ1025, Azerbaijan 100
Bermuda
Foster Wheeler Ltd. Clarendon House, 2 Church Street, Hamilton, HM-11, Bermuda 100
FW Management Operations, Ltd. Clarendon House, 2 Church Street, Hamilton HM CX, Bermuda 100
Brazil
Amec Foster Wheeler America Latina, Ltda. Rua Evaristo da Veiga No. 65, Salas 1101, 1201 e 1202 do Sector 1, Edificio 100
Passeio Corporate, Centro, Rio de Janeiro, CEP 20.031-040, Brazil
Amec Foster Wheeler Brasil S.A. Avenida das Americas, n 3.434, Bloco 2, salas 307 e 308, Centro Empresarial 100
Mario Henrique Simonsen, Barra da Tijuca, CEP 22.640-102, Brazil
AMEC Petroleo e Gas Ltda. Avenida das Americas, n 3.434, Bloco 2, salas 307 e 308, Centro Empresarial 100
Mario Henrique Simonsen, Barra da Tijuca, CEP 22.640-102, Brazil
AMEC Projetos e Consultoria Ltda Rua Professor Moraes No. 476, Loja 5, Sobreloja, Bairro Funcionarios, Belo 100
Horizonte, Minas Gerais, 30150-370, Brazil
FW Industrial Power Brazil Ltda Alameda Santos, 1293, Room 63, Cerqueira César, Sao Paulo, 01419-002, Brazil 100
Santos Barbosa Tecnica Comercio e Servicos Ltda. Estrada Sao Jose do Mutum, 301 - Imboassica, Cidade de Macae, Rio de Janeiro, 100
CEP 27973-030, Brazil
Wood Group Engineering and Production Facilities Brasil Ltda. Rua Ministro Salgado Filho,119, Cavaleiros, Cidade de Macae,CEP 27920-210, 100
Estado do Rio de Janeiro
Wood Group Kenny do Brasil Servicos de Engenharia Ltda. Rua Sete de Setembro, 54 - 4 andares, Centro, Rio de Janeiro - RJ, CEP 100
20050-009, Brazil
Brunei Darussalam
Amec Foster Wheeler (B) SDN BHD Unit No.s 406A-410A, Wisma Jaya, Jalan Pemancha, Bandar Seri Begawan BS8811, 100
Brunei Darussalam
Bulgaria
AMEC Minproc Bulgaria EOOD 7th Floor, 9-11 Maria Louisa Blvd, Vazrazhdane District, Sofia 1301, Bulgaria 100
Cameroon
Amec Foster Wheeler Cameroun SARL Cap Limboh, Limbe, BP1280, Cameroon 100
Canada
2292127 Alberta Ltd. 1900, 520 - 3rd Ave. S.W., Calgary, AB, T2P 0R3, Canada 100
Amec Foster Wheeler Canada Ltd. Borden Ladner Gervais LLP, Centennial Place, East Tower, 1900, 520 - 3rd Ave. 100
S.W., Calgary, AB, T2P 0R3, Canada
Rider Hunt International (Alberta) Inc. 900 AMEC Place, 801-6th Avenue S.W., Calgary, AB, T2P 3W3, Canada 100
Wood Canada Limited 1900, 520 - 3rd Avenue SW, Calgary, AB, T2P 0R3, Canada 100
Wood Group Asset Integrity Solutions, Inc. 1900, 520 - 3rd Avenue SW, Calgary, AB, T2P 0R3, Canada 100
Wood Group Canada, Inc. Borden Ladner Gervais LLP, Centennial Place, East Tower, 1900, 520 - 3rd Ave. 100
S.W., Calgary, AB, T2P 0R3, Canada
Wood Solar Canada Ltd. 1900, 520 - 3rd Ave. S.W., Calgary, AB, T2P 0R3, Canada 100
Wood Wind Canada Ltd. 1900, 520 - 3rd Ave. S.W., Calgary, AB, T2P 0R3, Canada 100
Cayman Islands
FW Chile Holdings Ltd. Codan Trust Company (Cayman) Limited, Cricket Square, Hutchins Drive, PO Box 100
2681, George Town, KY1-1111
Wood Group O&M International, Ltd. Sterling Trust (Cayman) Limited, Whitehall House, 238 North Church Street, 100
George Town, KY1-1102, Cayman Islands
Chile
Amec Foster Wheeler Talcahuano, Operaciónes y Mantenciones Limitada Camino A Ramuntcho 3230, Sector 4 Esquinas, Talcahuano, Chile 100
ISI Mustang Chile SpA Calle Providencia 337, off. 7, Comuna de Providencia, Santiago, Chile 100
Wood Chile Limitada Avenida Presidente Riesco 5335, piso 8, Las Condes, Chile 100
Wood Ingenieria y Consultoria Chile Limitada Avenida Larrain 5862, Piso 11, La Reina, Santiago, 7870154, Chile 100
China
Liaoning Province Pharmaceutical Planning and Designing Institution Co. Ltd. 3rd Floor, Gate 4, 153-10 Chuangxin Road, Hunnan District, Shenyang, Liaoning 100
Province, China
Shenyang Dongyu Youan Pharmaceutical Technology Co. Ltd. Gate 2, 8# Wulihe Street, Heping District, Shenyang, Liaoning Province, China 76
Colombia
Wood Engineering & Consultancy Colombia S.A.S. Carrera 11 A No. 96-51 5th floor, Bogota D.C., Colombia 100
Cyprus
WGPS International Limited Elenion Building, 2nd Floor, 5 Themistocles Street, CY-1066 Nicosia,CY-1310 100
Nicosia, PO Box 25549, Cyprus
Wood Group Angola Limited Elenion Building, 2nd Floor, 5 Themistocles Street, CY-1066 Nicosia,CY-1310 100
Nicosia, PO Box 25549, Cyprus
Wood Group Equatorial Guinea Limited Elenion Building, 2nd Floor, 5 Themistocles Street, CY-1066 Nicosia,CY-1310 100
Nicosia, PO Box 25549, Cyprus
Democratic Republic of Congo
MDM Engineering SPRL 32 Avenue 3Z, Commune de Kasuku, Ville de Kindu, Democratic Republic of Congo 100
Egypt
Foster Wheeler Petroleum Services S.A.E. Al-Amerya General Free Zone, Alexandria, Egypt 100
Equatorial Guinea
Baker Energy International Equatorial Guinea S.A. Bioko, Island Region, Malabo 65
Hexagon Sociedad Anonima con Consejo de Administracion c/o Solege, Calle Kenia S/N, Malabo, Equatorial Guinea 65
France
Amec Foster Wheeler France S.A. 14, Place de la Coupole, Charenton-le-Pont, France, 94220 100
Wood Group Engineering Services (France) SAS 6Pl de la Madeleine, 75008, Paris, France 100
Wood Group France SAS 108 rue de Longchamp 75116 Paris 100
Gabon
Production Services Network Gabon SARL 1.149, Republic Boulevard, CEDAM Building, 6th Floor, Bali - Douala, Douala, 100
PO Box 3586, Cameroon
Germany
Bauunternehmung Kittelberger GmbH i.L. Liebigstr. 1-3, Kaiserslautern, 67661, Germany 100
KIG Immobilien Beteiligungsgesellschaft mbH Hammstrasse 6, 04129 Leipzig, Germany 100
KIG Immobiliengesellschaft mbH & Co. KG Hammstrasse 6, 04129 Leipzig, Germany 100
Wood E&IS (Renewables) GmbH Zippelhaus 4, 20457 Hamburg, Germany 100
Ghana
Amec Foster Wheeler Operations Ghana Limited House Number 4, Momotse Avenue, Behind All Saints Anglican Church, Adabraka, 100
PO Box GP 1632, Accra, Greater Accra, Ghana
Wood & BBS Ghana Ltd No 4 Momotsa Avenue, Behind All Saints Anglican Church, Adabraka, Accra, Ghana 80
Wood Group Ghana Limited 20 Jones Nelson Road, Adabraka, Accra, Ghana 49*
Greece
Amec Foster Wheeler Hellas Engineering and Construction Societe Anonyme 15 Meandrou Street, Athens, 115 28, Greece 100
Guatemala
AMEC Guatemala Engineering and Consulting, Sociedad Anonima Ciudad Guatemala, Guatemala 100
Guernsey
AMEC Operations Limited 22 Havilland Street, St Peter Port, GY1 2QB, Guernsey 100
Garlan Insurance Limited PO Box 33, Maison Trinity, Trinity Square, St Peter Port, GY1 4AT, Guernsey 100
Wood Group Offshore Services Limited PO Box 119 Martello Court, Admiral Park, St Peter Port, Guernsey, GY1 3HB, 100
Guernsey
Wood USA Holdings Limited 22 Havilland Street, St Peter Port, GY1 2QB, Guernsey 100
Hong Kong
AMEC Asia Pacific Limited 3806, Central Plaza, 18 Harbour Road, Wanchai, Hong Kong 99
India
Ingenious Process Solutions Private Limited 307, Atlanta Estate, 3rd Floor, Hanuman Tekdil Road Vitbhatti, Off. W.E. 100
Highway, Goregaon (East) Mumbai MH 400063
Mustang Engineering India Private Limited 6th Floor, Zenith Building, Ascendas IT Park, CSIR Road, Taramani, Chennai 600 100
113, India
Wood India Engineering & Projects Private Limited 6th Floor, Zenith Building, Ascendas IT Park, CSIR Road, Taramani, Chennai 600 100
113, India
Wood Group Kenny India Private Limited 15th Floor Tower-B, Building No. 5, DLF Cyber City, ,HR, Phase III Gurgaon 100
Gurgaon, 122002, India
Wood Group PSN India Private Limited 5th Floor, Zenith Building, Ascendas IT Park, CSIR Road, Taramani, Chennai, 100
600113, India
Indonesia
PT AGRA Monenco c/o 2020 Winston Park Drive, Suite 700, Oakville, ON, L6H 6X7, Canada 100
PT Amec Foster Wheeler Indonesia Perkantoran Pulo mas Blok VII No. 2, Jl Perintis Kemerdekaan, Pulo Gadung, 55
Jakarta, Timur, Indonesia
PT Australian Skills Training Green Town Warehouse No. 2, Bengkong-Batam-Indonesia, Indonesia 95
PT Foster Wheeler O&G Indonesia Perkantoran Pulo mas Blok VII No.2, Jl. Perintis Kemerdekaan, Pulo Gadung, 90
Jakarta Timur 13260, Indonesia
PT Harding Lawson Indonesia c/o 2020 Winston Park Drive, Suite 700, Oakville, ON, L6H 6X7, Canada 95
PT Simons International Indonesia c/o 2020 Winston Park Drive, Suite 7000, Oakville, Ontario, Canada 100
PT Wood Group Indonesia Gedung Perkantoran Prudential Centre, Kota Kasablanka, Lantai 22, Unit A, J1, 90
Cassablanca Kav, 88 Kel. Menteng Dalam, Kec.Tebet, Kota Adm, Jarkarta
Selantan, DKI Jarkarta, Malaysia
Iran
Foster Wheeler Adibi Engineering 9th Floor Aluminumm Building, Avenue Shah, Tehran 45
Wood Group Iran - Qeshm Company (pjs) No 2564, Hafez Street, Toola Industrial Park,Qeshm Island, Annaba, Iran 97
Iraq
Ghabet El Iraq for General Contracting and Engineering Services, Engineering Suite 24, Building 106,St 19, Sec 213, Al-Kindi St, Al-Haritheeya Qts, 100
Consultancy (LLC) Baghdad, Iraq
Touchstone General Contracting, Engineering Consultancy and Project Management Flat no. 23A, 3rd Floor, near Kahramana Square Anbar Building, District no. 100
LLC 903, Hay Al Karada, Baghdad, Iraq
Ireland
Wood Group Kenny Ireland Limited Second Floor, Blocks 4 and 5, Galway Technology Park, Parkmore, Galway, 100
Ireland
Italy
Concetto Green S.r.l Via S. Caboto 15, Corsico, Milan, 20094, Italy 100
Concettorinnovabile s.r.l. Via S. Caboto 15, Corsico, Milan, 20094, Italy 100
ForEarth S.r.l Via S. Caboto 15, Corsico, Milan, 20094, Italy 100
Geo Rinnovabile S.r.l. Via S. Caboto 15, Corsico, Milan, 20094, Italy 100
Green2dream s.r.l. Via S. Caboto 15, Corsico, Milan, 20094, Italy 100
Green2grid S.r.l Via S. Caboto 15, Corsico, Milan, 20094, Italy 100
Greendream1 S.r.l. Via S. Caboto 15, Corsico, Milan, 20094, Italy 100
Greendream2 S.r.l. Via S. Caboto 15, Corsico, Milan, 20094, Italy 100
HWF S.r.l. Via S. Caboto 15, Corsico, Milan, 20094, Italy 100
Hybrid Energy S.r.l. Via S. Caboto 15, Corsico, Milan, 20094, Italy 100
Newagro s.r.l. Via S. Caboto 15, Corsico, Milan, 20094, Italy 100
Oro Rinnovabile s.r.l. Via S. Caboto 15, Corsico, Milan, 20094, Italy 100
Orosolare s.r.l. Via S. Caboto 15, Corsico, Milan, 20094, Italy 100
Res4green s.r.l. Via S. Caboto 15, Corsico, Milan, 20094, Italy 100
Res4planet S.r.l Via S. Caboto 15, Corsico, Milan, 20094, Italy 100
Res4power s.r.l. Via S. Caboto 15, Corsico, Milan, 20094, Italy 100
Resergy S.r.l Via S. Caboto 15, Corsico, Milan, 20094, Italy 100
Transizione s.r.l. Via S. Caboto 15, Corsico, Milan, 20094, Italy 100
Transizioneverde s.r.l. Via S. Caboto 15, Corsico, Milan, 20094, Italy 100
Tre Rinnovabili S.r.l. Via S. Caboto 15, Corsico, Milan, 20094, Italy 100
Versogreen s.r.l. Via S. Caboto 15, Corsico, Milan, 20094, Italy 100
Wood Italiana S.r.l. Via S. Caboto 15, Corsico, 20094, Italy 100
Wood Solare Italia S.r.l. Via S. Caboto 15, Corsico, Milan, 20094, Italy 100
Jamaica
Monenco Jamaica Limited c/o 2020 Winston Park Drive, Suite 700, Oakville, ON, L6H 6X7, Canada 100
Jersey
RHI Talent UK Limited 28 Esplanade, St Helier, JE2 3QA, Jersey 100
Wood Group Engineering Services (Middle East) Limited 28 Esplanade, St Helier, JE2 3QA, Jersey 100
Wood Group Production Facilities Limited 28 Esplanade, St Helier, JE2 3QA, Jersey 100
Kazakhstan
AMEC Limited Liability Partnership 46 Satpayev St., Atyrau City, Atyrau Oblast, 060011, Kazakhstan 100
Foster Wheeler Kazakhstan LLP app. 27, h. 64, Bostandykskiy district, Abaya Ave., Almaty City, Kazakhstan 100
QED International (Kazakhstan) Limited Liability Partnership 46 Satpayev St., Atyrau City, Atyrau Oblast, 060011, Kazakhstan 100
Wood Group Kazakhstan LLP Satpayev str. 46, Atyrau, 060011, Kazakhstan 100
Kuwait
AMEC Kuwait Project Management and Contracting Company W.L.L. 2nd Floor, Al Mutawa Building, Ahmed Al Jaber Street, Sharq, Kuwait City 49*
Luxembourg
Financial Services S.à r.l. 15, Boulevard Friedrich Wilhelm Raiffeisen, L-2411, Luxembourg 100
FW Investment Holdings S.à r.l. 15, Boulevard Friedrich Wilhelm Raiffeisen, L-2411, Luxembourg 100
Malaysia
Amec Foster Wheeler OPE Sdn. Bhd. Suite 1005, 10th Floor, Wisma Hamzah-Kwong Hing, No. 1, Leboh Ampang, Kuala 100
Lumpur, 50100, Malaysia
BMA Engineering SDN. BHD. Unit C-12-4, Level 12, Block C, Megan Avenue II, Wilayah Persekutuan,Wilayah 100
Persekutuan, Kuala Lumpur, 50450, Malaysia
Foster Wheeler (Malaysia) Sdn. Bhd. Suite 1005, 10th Floor, Wisma Hamzah-Kwong Hing, No. 1, Leboh Ampang, Kuala 100
Lumpur, 50100, Malaysia
Foster Wheeler E&C (Malaysia) Sdn. Bhd. Suite 1005, 10th Floor, Wisma Hamzah-Kwong Hing, No. 1, Leboh Ampang, Kuala 70
Lumpur, 50100, Malaysia
Rider Hunt International (Malaysia) Sdn Bhd Level 7, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, Damansara 100
Heights, Kuala Lumpur, 50490, Malaysia
Wood Group Kenny Sdn Bhd c/o Securities Services (Holdings) Sdn Bhd, level 7, Menara Milenium, Jalan 25*
Damanlela, Pusat Bandar Damansara, Damansara Heights, ,Kuala Lumpur, Damansara
Town Centre, Damansa, 50490, Malaysia
Wood Group Mustang (M) Sdn. Bhd. Level 7, Menara Milenium,Jalan Damanlela, Pusat Bandar Damansara, Damansara 100
Heights,Wilayah Persekutuan,Wilayah Persekutuan, Kuala Lumpur, 50490, Malaysia
Mauritius
MDM Engineering Investments Ltd 1st Floor, Felix House, 24 Dr Joseph Street, Port Louis, Mauritius 100
MDM Engineering Projects Ltd 1st Floor, Felix House, 24 Dr Joseph Street, Port Louis, Mauritius 100
P.E. Consultants, Inc. c/o First Island Trust Company Ltd, Suite 308, St. James Court, St. Denis 100
Street, Port Louis, Mauritius
QED International Ltd c/o Ocorian Corporate Services (Mauritius) Limited, 6th Floor, Tower A, 1 100
CyberCity, Ebene, 72201, Mauritius
Mexico
AGRA Ambiental S.A. de C.V. c/o 2020 Winston Park Drive, Suite 700, Oakville, ON, L6H 6X7, Canada 100
Amec Foster Wheeler Energia Mexico S. de R.L. de C.V. Av. Vasconcelos 453, Colonia del Valle 66220 Nuevo Leon, Monterrey (Estados 100
Unidos de México), Mexico
Amec Foster Wheeler Mexico, S.A. de C.V. David Alfaro Siqueiros No.104, Piso 2, Colonia Valle Oriente, San Pedro Garza 100
Garcia, Nuevo Leon, C.P. 66269, Mexico
CEC Controls Automatizacion S. de R.L. de C.V. Libramiento Carr. Silao-León #201, Esq. Prolongación Bailleres, Col. 100
Progreso Silao, Guanajuato, CP. 36135, Mexico
Foster Wheeler Constructors de Mexico S. de R.L. de C.V. 699 15th Street, 6th Avenue, Agua Prieta, Sonora, Mexico 80
Global Mining Projects and Engineering, S.A. de C.V. Calle Coronado 124, Zona Centro, Chihuahau, Chihuahau, 31000, Mexico 100
Harding Lawson de Mexico S.A. de C.V. Edificio Omega, Campos Eliseos 345, floors 2, 3 & 11, Chapultepec Polanco 100
11560 Mexico, D.F.
ISI Mustang Servicios de Ingenieria de Mexico, S de R.L. De C.V. HOMERO 1804 PISO 11,COL. LOS MORALES - DELEGACION MIGUEL HIDALGO, Distrito 100
Federal, Mexico City, C.P. 11540, Mexico
Wood Group de Mexico S.A. de C.V. Insurgentes Sur #619 piso 10, Colonia Napoles, Municipio Benito Juarez, 100
between Calle Vermont and Calle Yosemite, Mexico City, 03810, Mexico
Wood Group Management Services de Mexico, S.A. de C.V. Blvd. Manuel Avila Camacho 40 - 1801, Lomas de Cahpultepec, Delgacion Miguel 100
Hidalgo, Mexico, D.F. 11000
Mongolia
AMEC LLC Mongol TV Tower-1005, Chinggis Avenue, Sukhbaatar District, 1st khoroo, 100
Ulaanbaatar, Mongolia
Mozambique
Amec Foster Wheeler Mozambique Limitada Mocambique, Maputo Cidade, Distrito Urbano 1, Bairro Sommerschield II, Av. 100
Julius Nyerere, nº 3412, Maputo, Mozambique
Wood Group Mozambique, Limitada 73 Rua Jose Sidumo, Bairro da Polana, Maputo, Mozambique 100
Netherlands
AMEC GRD SA B.V. Meander 251, Arnhem, 6825 MC, Netherlands 100
AMEC Holland B.V. EDGE Amsterdam West, Basisweg 10, 1043 AP, Amsterdam, Netherlands 100
AMEC Investments B.V. EDGE Amsterdam West, Basisweg 10, 1043 AP, Amsterdam, Netherlands 100
Foster Wheeler Continental B.V. Naritaweg 165, 1043 BW Amsterdam, Netherlands 100
Foster Wheeler Europe B.V. Naritaweg 165, 1043 BW Amsterdam, Netherlands 100
John Wood Group B.V. C/O Centralis Netherlands BV, Zuidplein 126, WTC, Toren H 15e, Amsterdam, 100
1077XV, Netherlands
John Wood Group Holdings BV C/O Centralis Netherlands BV, Zuidplein 126, WTC, Toren H 15e, Amsterdam, 100
1077XV, Netherlands
New Zealand
M&O Pacific Limited 26 Manadon Street, Spotswood, New Plymouth, 4310, New Zealand 100
Nigeria
AMEC Contractors (W/A) Limited 13A AJ Marinho Drive, Victoria Island, Lagos, Nigeria 100
AMEC King Wilkinson (Nigeria) Limited No 3, Hospital Road, PO Box 9289, Lagos, Nigeria 100
AMEC Offshore (Nigeria) Limited 18th Floor, Western House, 8/10 Broad street, Lagos, Nigeria 75
Foster Wheeler (Nigeria) Limited 1 Murtala Muhammed Drive, (Formerly Bank Road), Ikoyi, Lagos, Nigeria 100
Foster Wheeler Environmental Company Nigeria Limited c/o Nwokedi & Co., 21 Ajasa Street, Onikan, Nigeria 87
JWG Nigeria Limited 13 Sumbo Jibowu Street, Ikoyi, Lagos, Nigeria 100
Overseas Technical Services Nigeria Limited No 13 Sumbo Jibowu Street, Ikoyi, Lagos, Nigeria 93
Norway
Wood Group Norway AS Fokserodveien 12, Sandefjord, 3241, Norway 100
Oman
Wood Engineering Consultancy LLC PO Box 1469, Postal Code 133, Al-Khuwair, Sultanate of Oman 60
Wood LLC Bldg No. 89, Way No. 6605, Al Oman Street, Ghala Industrial Area, P.O. Box 70
293, Al Khuwair, PC 133, Oman
Papua New Guinea
Wood Engineering PNG Ltd Deloitte Touche Tohmatsu, Level 9, Deloitte Haus, Macgregor Street, Section 8, 100
Allotment 19, Port Moresby, National Capital District, Papua New Guinea
Wood Group PNG Limited Dentons PNG, Level 5, Bsp Haus, Harbour City, Port Moreseby,Papau New Guinea, 100
National Capital District, Papua New Guinea
Peru
Wood Group Peru S.A.C. Av. de la Floresta 407, 5th Floor, San Borja, Lima, Peru 100
Philippines
Foster Wheeler (Philippines) Corporation U-7A, 7/F PDCP Bank Centre,V.A. Rufino St. Corner L.P. Leviste St., Salcedo 100
Village, Makati City, PH, 1227
Production Services Network Holdings Corp. 585 ME National Road HW, Barangay Alangilan, Batangas City, Batangas, 100
Philippines
PSN Production Services Network Philippines Corp 12th Floor, Net One Center,26th Street Corner, 3rd Avenue, Crescent Park 100
West,Taguig, Metro Manilla, Bonifacio Global City, 1634, Philippines
Poland
Amec Foster Wheeler Consulting Poland Sp. z o.o. ul. Chmielna 132/134, Warsaw, 00-805, Poland 100
Portugal
Amec Foster Wheeler (Portugal) Lda Avenida Barbosa du Bocage 113-4, Lisboa, 1050-031, Portugal 100
Qatar
Production Services Network Qatar LLC PO Box 2515, Doha, Qatar 49*
Romania
AMEC Operations S.R.L Rooms 1 and 2, 2nd Floor, No. 59 Strada Grigore Alexandrescu, Sector 1, 100
Bucharest 010623, Romania
Russia
OOO Amec Foster Wheeler Office E-100, Park Place, 113/1, Leninsky Prospekt, 117198, Moscow, Russian 100
Federation 113/1, Leninsky Prospekt, 117198, Moscow, Russian Federation
Production Services Network Eurasia LLC 2-6 Floors,88 Amurskaya, Yuzhno-Sakhalinsk, 693020, Russian Federation 100
Production Services Network Sakhalin LLC 2-6 Floors,88 Amurskaya, Yuzhno-Sakhalinsk, 693020, Russian Federation 99
Saudi Arabia
Amec Foster Wheeler Energy and Partners Engineering Company Majd Business Center, Tower B, P.O. Box 30920, King Faisal Road, Al-Khobar, 75
31952, Saudi Arabia
Mustang and Faisal Jamil Al-Hejailan Consulting Engineering Company PO Box 9175, Almalaz, Salahuddin Alayoubi Street, Riyadh, 11413, Saudi Arabia 70
Mustang Saudi Arabia Co. Ltd. King Fahad Road, Rakah, Po Box 8145, Al-Khobar, 34225, Saudi Arabia 100
Wood Group ESP Saudi Arabia Limited PO Box 1280, Al-Khobar 51
Singapore
Amec Foster Wheeler Asia Pacific Pte. Ltd. One Marina Boulevard #28-00, Singapore, 018989, Singapore 100
AMEC Global Resources Pte Limited 991E Alexandra Road, #01 - 25, 119973, Singapore 100
Foster Wheeler Eastern Private Limited 1 Marina Boulevard, #28-00, Singapore 018989 100
OPE O&G Asia Pacific Pte. Ltd. 1 Marina Boulevard, #28-00, One Marina Boulevard, 018989, Singapore 100
Rider Hunt International (Singapore) Pte Limited 24 Raffles Place, #24-03 Clifford Centre, Singapore, 048621 100
Simons Pacific Services Pte Ltd. 8 Marina Boulevard #05-02, Marina Bay Financial Centre, Singapore, 018981, 100
Singapore
Wood Group International Services Pte. Ltd. 991E Alexandra Road, #01 - 25, 119973, Singapore 100
Slovakia
The Automated Technology Group (Slovakia) s.r.o. c/o, Kinstellar s.r.o., Hviezdoslavovo nám 13, Bratislava, 811 02, Slovakia 100
South Africa
Amec Foster Wheeler Properties (Pty) Limited Waterfall Corporate Campus, Building 6, 74 Waterfall Drive Waterval City, 100
Gauteng, 2090, South Africa
AMEC Minproc (Proprietary) Limited 2 Eglin Road, Sunninghill, 2157, South Africa 100
Wood Minerals and Metals Africa (Pty) Ltd Building Number 2 - Silverstream Business Park, 10 Muswell Road South, 100
Bryanston, Gauteng, 2021
Rider Hunt International South Africa (Pty) Ltd Building No. 2, Silver Stream Business Park, No. 10 Muswell Road South, 83
Bryanston, South Africa
Wood BEE Holdings (Proprietary) Ltd Waterfall Corporate Campus, Building 6, 74 Waterfall Drive Waterval City, 58
Gauteng, 2090, South Africa
Wood Mining South Africa (Pty) Ltd Building No. 2, Silver Stream Business Park, 10 Muswell Road South, Bryanston, 100
Gauteng, 2021, South Africa
Wood South Africa (PTY) Ltd Waterfall Corporate Campus, Building 6, 74 Waterfall Drive Waterval City, 70
Gauteng, 2090, South Africa
South Korea
AMEC Korea Limited KG Tower 5F, 92 Tongil-ro, Jung-gu, Seoul 04517, Korea 100
Spain
Amec Foster Wheeler Energia, S.L.U. Calle Gabriel Garcia Marquez, no 2, Parque Empresarial Madrid, Las Rozas, 100
28232 Las Rozas, Madrid, Spain
Wood Iberia S.L.U. Calle Gabriel Garcia Marquez, no 2, Parque Empresarial Madrid - Las Rozas, 100
28230 Las Rozas, Madrid, Spain
Switzerland
A-FW International Investments GmbH c/o Intertrust Services (Schweiz) AG, Alpenstrasse 15, 6300, Zug, Zug, 100
Switzerland
Wood Engineering AG Lohweg 6, 4054 Basel, Switzerland 100
Tanzania
MDM Projects-Tanzania Limited Plot No. 483, Garden Road, Mikocheni Ward, Kinondoni District, Dar es Salaam, 100
14112, Tanzania, the United Republic of
Thailand
Amec Foster Wheeler Holding (Thailand) Limited 1st Floor Talaythong Tower, 53 Moo 9, Sukhumvit Road, Thungsukla, Sriracha, 100
Chonburi, 20230, Thailand
Foster Wheeler (Thailand) Limited 53 Talaythong Tower, 1st Floor, Moo 9, Sukhumvit Road, Tambol Tungsukhla, 100
Amphur Sriracha, Chonburi, 20230, Thailand
Trinidad and Tobago
Wood Group Trinidad & Tobago Limited 18 Scott Bushe Street, Port of Spain, Trinidad and Tobago 100
Turkey
Amec Foster Wheeler Bimas Birlesik Insaat ve Muhendislik A.S. Kucukbakkalkoy Mah, Çardak Sok, No.1A Plaza, 34750 Atasehir, Istanbul, Turkey 100
Uganda
Wood Group PSN Uganda Limited KAA House, Plot 41,Nakasero Road, PO Box 9566, Kampala, Uganda 100
Ukraine
Wood Ukraine LLC Room 398, Building 26, Obolonskyi Avenue, Kyiv City, 04205, Ukraine 100
United Arab Emirates
Production Services Network Emirates LLC Unit 1301-CI Tower, Level 13, Al Bateen Street, Khalidiya, Abu Dhabi, PO Box 49*
105828
PSN Overseas Holding Company Limited The MAZE Tower, 15th Floor, Sheikh Zayed Road, PO Box 9275, Dubai, United Arab 100
Emirates
United Kingdom
AFW Finance 2 Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
AMEC (F.C.G.) Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
AMEC (MH1992) Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
AMEC (MHL) Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
AMEC (WSL) Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
AMEC BKW Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
AMEC Bravo Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
AMEC Building Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
AMEC Capital Projects Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
AMEC Civil Engineering Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
Amec Foster Wheeler (Holdings) Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
Amec Foster Wheeler Earth and Environmental (UK) Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
Amec Foster Wheeler Energy Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
Amec Foster Wheeler Finance Asia Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
Amec Foster Wheeler Finance Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
Amec Foster Wheeler Group Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
Amec Foster Wheeler International Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
Amec Foster Wheeler Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
AMEC Investments Europe Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
AMEC Offshore Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
AMEC Process and Energy Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
AMEC Project Investments Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
AMEC Services Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
AMEC Trustees Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
AMEC USA Holdings Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
AMEC Wind Developments Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
Automated Technology Group Holdings Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
East Mediterranean Energy Services Limited c/o Ledingham Chalmers LLP, 3rd Floor, 68-70 George Street, Edinburgh, EH2 100
2LR, United Kingdom
Foster Wheeler (G.B.) Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
Foster Wheeler (London) Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
Foster Wheeler (Process Plants) Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
Foster Wheeler E&C Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
Foster Wheeler Environmental (UK) Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
Foster Wheeler Europe Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
Foster Wheeler UK Investments Limited Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 100
3LE, Scotland, United Kingdom
Foster Wheeler World Services Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
FW Investments Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
HFA Limited Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 100
3LE, Scotland, United Kingdom
Integrated Maintenance Services Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
James Scott Limited Ground Floor, 15 Justice Mill Lane, Aberdeen, AB11 6EQ, Scotland 100
John Wood Group Holdings Limited Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 100
3LE, Scotland, United Kingdom
JWG Investments Limited Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 100
3LE, Scotland, United Kingdom
JWGUSA Holdings Limited Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 100
3LE, Scotland, United Kingdom
Kelwat Investments Limited Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 100
3LE, Scotland, United Kingdom
Metal and Pipeline Endurance Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
Mustang Engineering Limited Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 100
3LE, Scotland, United Kingdom
Press Construction Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
Process Plants Suppliers Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
Production Services Network (UK) Limited Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 100
3LE, Scotland, United Kingdom
Production Services Network Bangladesh Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
PSJ Fabrications Ltd Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
PSN (Angola) Limited Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 100
3LE, Scotland, United Kingdom
PSN (Philippines) Limited Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 100
3LE, Scotland, United Kingdom
PSN Asia Limited Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 100
3LE, Scotland, United Kingdom
PSN Overseas Limited Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 100
3LE, Scotland, United Kingdom
QED International (UK) Limited Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 100
3LE, Scotland, United Kingdom
Rider Hunt International Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
Sandiway Solutions (No 3) Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
SgurrEnergy Limited St Vincent Plaza, 319 St Vincent Street, Glasgow, G2 5LP, Scotland, United 100
Kingdom
The Automated Technology Group Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
WGPSN (Holdings) Limited Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 100
3LE, Scotland, United Kingdom
WGPSN Eurasia Limited Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 100
3LE, Scotland, United Kingdom
Wood (Indonesia) Limited Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 100
3LE, Scotland, United Kingdom
Wood and Company Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
Wood Finance UK Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
Wood Group Algeria Limited Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 100
3LE, Scotland, United Kingdom
Wood Group Algiers Limited Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 100
3LE, Scotland, United Kingdom
Wood Group Annaba Limited Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 100
3LE, Scotland, United Kingdom
Wood Group Arzew Limited Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 100
3LE, Scotland, United Kingdom
Wood Group Engineering & Operations Support Limited Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 100
3LE, Scotland, United Kingdom
Wood Group Engineering (North Sea) Limited Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 100
3LE, Scotland, United Kingdom
Wood Group Hassi Messaoud Limited Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 100
3LE, Scotland, United Kingdom
Wood Group Holdings (International) Limited Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 100
3LE, Scotland, United Kingdom
Wood Group Investments Limited Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 100
3LE, Scotland, United Kingdom
Wood Group Kenny Corporate Limited Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 100
3LE, Scotland, United KingdomSir Ian Wood House, Hareness Road, Altens
Industrial Estate, Aberdeen, AB12 3LE, Scotland, United Kingdom
Wood Group Kenny Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
Wood Group Kenny UK Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
Wood Group Limited Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 100
3LE, Scotland, United Kingdom
Wood Group Power Investments Limited Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 100
3LE, Scotland, United Kingdom
Wood Group Production Services UK Limited Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 100
3LE, Scotland, United Kingdom
Wood Group UK Limited Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 100
3LE, Scotland, United Kingdom
Wood Group/OTS Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
Wood International Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
Wood Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
Wood Pensions Trustee Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
Wood Transmission and Distribution Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
Wood UK Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England 100
United States
4900 Singleton, L.P. 400 North St. Paul, Dallas, TX, 75201 100
AMEC Construction Management, Inc. United Agent Group Inc., 3411 Silverside Road Tatnall Building #104, 100
Wilmington, New Castle County, DE, 19810, United States
Amec Foster Wheeler Arabia Ltd. 3411 Silverside Road Tatnall Building #104, Wilmington, New Castle County, DE, 100
19810, United States
Amec Foster Wheeler Environmental Equipment Company, Inc. 3411 Silverside Road Tatnall Building #104, Wilmington, New Castle County, DE, 100
19810, United States
Amec Foster Wheeler Industrial Power Company, Inc. 3411 Silverside Road Tatnall Building #104, Wilmington, New Castle County, DE, 100
19810, United States
Amec Foster Wheeler Martinez, Inc. United Agent Group Inc., 3411 Silverside Road Tatnall Building #104, 100
Wilmington, New Castle County, DE, 19810, United States
Amec Foster Wheeler North America Corp. United Agent Group Inc., 3411 Silverside Road, Tatnall Bldg. #104, Wilmington, 100
DE, 19810, United States
Amec Foster Wheeler Power Systems, Inc. c/o The Corporation Trust Company, Corporation Trust Center, 1209 Orange 100
Street, Wilmington, DE, 19801
Amec Foster Wheeler USA Corporation United Agent Group Inc., 3411 Silverside Road, Tatnall Bldg. #104, Wilmington, 100
DE, 19810, United States
AMEC Holdings, Inc. United Agent Group Inc., 3411 Silverside Road Tatnall Building #104, 100
Wilmington, New Castle County, DE, 19810, United States
AMEC North Carolina, Inc. 225, Hillsborough Street, Raleigh, NC, 27603, United States 100
AMEC Oil & Gas World Services, Inc. United Agent Group Inc., 3411 Silverside Road Tatnall Building #104, 100
Wilmington, New Castle County, DE, 19810, United States
Barsotti's Inc. Perryville Corporate Park, 53 Frontage Road, PO Box 9000, Hampton, NJ, 100
08827-90000
BMA Solutions Inc. United Agent Group Inc., 3411 Silverside Road, Tatnall Bldg. #104, Wilmington, 100
DE, 19810, United States
C E C Controls Company, Inc. United Agent Group Inc., 28175 Haggerty RoadD, Novi, MI, 48377, United States 100
Cape Software, Inc. United Agent Group, 2425 W Loop South #200, Houston, TX, 77027, United States 100
Ceres Solar 1, LLC 8275 South Eastern Avenue #200, Las Vegas, Clark County, NV, 89123, United 100
States
Ceres Solar 2, LLC 8275 South Eastern Avenue #200, Las Vegas, Clark County, NV, 89123, United 100
States
Ceres Solar 3, LLC 8275 South Eastern Avenue #200, Las Vegas, Clark County, NV, 89123, United 100
States
Equipment Consultants, Inc. Corporation Trust Company, 1209 Orange Street, Wilmington, DE, 19801 100
Energy Transition Developments LLC 5444 Westheimer #1000, Houston, Harris County, TX, 77056, United States 100
Energy Transition Ventures 1 LLC 5444 Westheimer #1000, Houston, Harris County, TX, 77056, United States 100
Energy Transition Ventures 2 LLC 5444 Westheimer #1000, Houston, Harris County, TX, 77056, United States 100
Energy Transition Ventures 3 LLC 5444 Westheimer #1000, Houston, Harris County, TX, 77056, United States 100
Energy Transition Ventures 4 LLC 5444 Westheimer #1000, Houston, Harris County, TX, 77056, United States 100
Energy Transition Ventures 5 LLC 5444 Westheimer #1000, Houston, Harris County, TX, 77056, United States 100
Wood Contract Services LLC 17325 Park Row, Suite 500, Houston, TX, 77084, United States 100
Foster Wheeler Energy Corporation 5444 Westheimer #1000, Houston, Harris County, TX, 77056, United States 100
Foster Wheeler Environmental Corporation 5444 Westheimer #1000, Houston, Harris County, TX, 77056, United States 100
Foster Wheeler Inc. United Agent Group Inc., 3411 Silverside Road, Tatnall Bldg. #104, Wilmington, 100
DE, 19810, United States
Foster Wheeler Intercontinental Corporation c/o The Corporation Trust Company, Corporation Trust Center, 1209 Orange 100
Street, Wilmington, DE, 19801
Foster Wheeler International LLC United Agent Group Inc., 3411 Silverside Road Tatnall Building #104, 100
Wilmington, New Castle County, DE, 19810, United States
Foster Wheeler LLC United Agent Group Inc., 3411 Silverside Road, Tatnall Bldg. #104, Wilmington, 100
DE, 19810, United States
Foster Wheeler Realty Services, Inc. c/o The Corporation Trust Company, Corporation Trust Center, 1209 Orange 100
Street, Wilmington, DE, 19801
Ingenious Inc. United Agent Group, 2425 W Loop South #200, Houston, TX, 77027, United States 100
ISI Group, L.L.C. United Agent Group, 2425 W Loop South #200, Houston, TX, 77027, United States 100
JWGUSA Holdings, Inc. United Agent Group Inc., 3411 Silverside Road, Tatnall Bldg. #104, Wilmington, 100
DE, 19810, United States
Kelchner, Inc. United Agent Group Inc., 119 E. Court Street, Cincinnati, OH, 45202, United 100
States
MACTEC E&C International, Inc. United Agent Group Inc., 3411 Silverside Road Tatnall Building #104, 100
Wilmington, New Castle County, DE, 19810, United States
Martinez Cogen Limited Partnership United Agent Group Inc., 3411 Silverside Road Tatnall Building #104, 99
Wilmington, New Castle County, DE, 19810, United States
Mustang International, Inc. 5444 Westheimer #1000, Houston, Harris County, TX, 77056, United States 100
Process Consultants, Inc. United Agent Group Inc., 3411 Silverside Road Tatnall Building #104, 100
Wilmington, New Castle County, DE, 19810, United States
RHI Talent USA Inc. United Agent Group Inc., 8275 South Eastern Av., #200, Las Vegas, NV, 89123, 100
United States
Rider Hunt International (USA) Inc. United Agent Group, 2425 W Loop South #200, Houston, TX, 77027, United States 100
Swaggart Brothers, Inc. United Agent Group Inc., 5708 S.E. 136th Avenue, #2, Portland, OR, 97236, 100
United States
Swaggart Logging & Excavation LLC United Agent Group Inc., 5708 S.E. 136th Avenue, #2, Portland, OR, 97236, 100
United States
Thelco Co. c/o The Corporation Trust Company, Corporation Trust Center, 1209 Orange 100
Street, Wilmington, DE, 19801
Wood Group Alaska, LLC United Agent Group Inc., 3411 Silverside Road, Tatnall Bldg. #104, Wilmington, 100
DE, 19810, United States
Wood Group PSN, Inc. United Agent Group Inc., 8275 South Eastern Av., #200, Las Vegas, NV, 89123, 100
United States
Wood Group Support Services, Inc. United Agent Group Inc., 8275 South Eastern Av., #200, Las Vegas, NV, 89123, 100
United States
Wood Group US Holdings, Inc. 3411 Silverside Road Tatnall Building #104, Wilmington, New Castle County, DE, 100
19810, United States
Wood Group USA, Inc. 5444 Westheimer #1000, Houston, Harris County, TX, 77056, United States 100
Wood Programs, Inc. 2475 Northwinds Parkway, #200-260, Alpharetta, GA, 30009, United States 100
Uzbekistan
Wood Energy Solutions LLC Sulton Darvoza Business Center, 38/1 Shakhrisabz Street, Tashkent, 100060, 100
Uzbekistan
Vanuatu
O.T.S. Finance and Management Limited Law Partners House, Rue Pasteur, Port Vila, Vanuatu 100
Overseas Technical Service International Limited Law Partners House, Rue Pasteur, Port Vila, Vanuatu 100
Venezuela
Amec Foster Wheeler Venezuela, C.A. Avenida Francisco de Miranda, Torre Cavendes, Piso 9, Ofic 903, Caracas, 100
Venezuela
*Companies consolidated for accounting purposes as subsidiaries on the basis
of control. There is no material impact on the financial statements of the
judgements applied in assessing the basis of control for these entities.
** The Group does not have a direct shareholding in these entities but
considers them to be under group control.
Joint Ventures
Company Name Registered Address Ownership Interest %
Australia
Clough Wood Pty Ltd(1) Level 6, QV1 Building, 250 St Georges Terrace, Perth, WA, 6000, Australia 50
Azerbaijan
Socar-Foster Wheeler Engineering LLC 88A Zardaby Avenue,Baku, Azerbaijan 35
Brunei Darussalam
TendrillWood Sdn Bhd Lot 29 & 30, Tapak Perindustrian Sungai Bera, Kampong Sungai Bera, Seria, 75
Belait, KB1933, Brunei Darussalam
Canada
ABV Consultants Ltd(1) Suite 2300, Bentall 5, 550 Burrard Street, Vancouver, BC, V6C 2B5, Canada 50
AMEC Black & McDonald Limited(1) 60 Cutler Avenue, Dartmouth, NS, B3B 0J6, Canada 50
ODL Canada Limited 689 Water Street, Newfoundland, St. John's, NL, A1E 1B5, Canada 50
Teshmont Consultants Inc. 1190 Waverley Street, Winnipeg, MB, R3T 0P4, Canada 50
Vista Mustang JV Suite B12, 6020 2nd Street S. E., Calgary, AB, T2H 2L8, Canada 50
Chile
Consorcio AMEC CADE / PSI Consultores Limitada Av. Jose Domingo, Canas No 2640, Nunoa, Santiago, 7750164, Chile 50
Consorcio Consultor Cade Zañartu Limitada Seminario 714, Ñuñoa, Santiago de Chile 50
Consorcio Consultor Systra / Cade Idepe / Geoconsult Limitada Av. Jose Domingo, Canas No 2640, Nunoa, Santiago, 7750164, Chile 40
Consorcio de Ingenieria Geoconsult Cade Idepe Limitada Av. Jose Domingo, Canas No 2640, Nunoa, Santiago, 7750164, Chile 50
Consorcio de Ingeniería Systra Cade Limitada Av. Jose Domingo, Canas No 2640, Nunoa, Santiago, 7750164, Chile 50
Consorcio de Ingenieria Transporte Systra Cade Idepe Consultores Limitada Jose Domingo Cañas 2640, Ñuñoa, Santiago Chile 50
Construcciòn e Ingenierìa Chile FI Limitada Avenida Andrés Bello 2711, Piso 22 - Comuna Las Condens, Santiago, Chile 50
China
Wood Zone Co., Ltd No. 143 Jinyi Road, Jinshan District, Shanghai, 200540, China 50
Cyprus
Wood Group - CCC Limited Elenion Building, 2nd Floor, 5 Themistocles Street, CY-1066 Nicosia,CY-1310 50
Nicosia, PO Box 25549, Cyprus
Kazakhstan
WOOD KSS JSC Satpayev str. 46, Atyrau, 060011, Kazakhstan 50
Mexico
AFWA DUBA Salina Cruz, S. de R.L. de C.V. Carlos Salazar, #2333, Colonia Obrera, Monterrey, Nuevo Leon, Mexico 50
Grupo Industrial de Ingenieria Ecologica III HLA & Iconsa S.A. de C.V. Edificio Omega, Campos Eliseos 345, floors 2, 3 & 11, Chapultepec Polanco 51
11560 Mexico, D.F.
Mustang Diavaz, S.A.P.I. de C.V. Av. Revolucion 468, Col. San Pedro de los Pinos Mexico, D.F., 03800, Mexico 50
Northam Conip Consorcio, S.A. de C.V. David Alfaro Siqueiros 104 piso 2, Col. Valle Oriente, San Pedro Garza Garcia, 50
Nuevo Leon, CP. 66269, Mexico
Malaysia
ICE Wood Sdn. Bhd. Level 7, Menara Milenium,Jalan Damanlela, Pusat Bandar Damansara, Damansara 49
Heights,Wilayah Persekutuan,Wilayah Persekutuan, Kuala Lumpur, 50490, Malaysia
Netherlands
Wood Group Azerbaijan B.V. C/O Centralis Netherlands BV, Zuidplein 126, WTC, Toren H 15e, Amsterdam, 51
1077XV, Netherlands
New Zealand
Wood Beca Limited Ground Floor, Beca House, 21 Pitt Street, Auckland, 1010, New Zealand 50
Oman
AMEC Al Turki LLC c/o Al Alawi, Mansoor Jamal & Co., Barristers & Legal Consultants, 35
Muscat International Centre, Mezzanine Floor, Muttrah Business District, P.O.
Box 686 Ruwi, Oman
Qatar
Wood Black Cat LLC 5th Floor Al Aqaria Tower, Building No. 34, Museum Street, Old Salata Area, 49
Street 970, Zone 18, P.O Box No. 24523 Doha, Qatar
Saudi Arabia
AMEC BKW Arabia Limited(1) Al Rushaid Petroleum Investment Co. Building, Prince Hamoud Street, PO Box 50
31685 - Al Khobar 31952, Saudi Arabia
Spain
Insolux Monenco Medio Ambiente S.A. Calle Juan Bravo, 3-C, Madrid, 28006, Spain 49
Trinidad and Tobago
Massy Wood Group Ltd. 4th Floor, 6A Queens Park West, Victoria Avenue, Port of Spain, Trinidad and 50
Tobago
United Kingdom
ACM Health Solutions Limited Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England, United 33
Kingdom
Ethos Energy Group Limited Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 51
3LE, Scotland, United Kingdom
RWG (Repair & Overhauls) Limited Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 50
3LE, Scotland, United Kingdom
South Kensington Developments Limited Ground Floor T3 Trinity Park, Bickenhill Lane, Birmingham, B37 7ES, United 50
Kingdom
( )
(1)Entities are consolidated as joint operations on the basis of control.
In addition to the subsidiaries listed above, the Group has a number of
overseas branches.
Details of the direct subsidiaries of John Wood Group PLC are provided in note
1 to the parent company financial statements.
The Group will be exempting the following companies from an audit in 2023
under Section 479A of the Companies Act 2006. All of these companies are fully
consolidated in the condensed financial statements.
AFW Finance 2 Limited (Registered number 09861575)
AME Building Limited (Registered number 165287)
AMEC (F.C.G) Limited (Registered number 148585)
AMEC (MH1992) Limited (Registered number 222870)
AMEC (MHL) Limited (Registered number 713103)
AMEC (WSL) Limited Registered number 514311)
AMEC BKW Limited (Registered number 169831)
AMEC Bravo Limited (Registered number 6206015)
AMEC Capital Projects Limited (Registered number 2804109)
AMEC Civil Engineering Limited (Registered number 1265199)
Amec Foster Wheeler (Holdings) Limited (Registered number 00163609)
Amec Foster Wheeler Earth and Environmental (UK) Limited (Registered number
4987981)
Amec Foster Wheeler Energy Limited (Registered number 1361134)
Amec Foster Wheeler Finance Asia Limited (Registered number 6205760)
Amec Foster Wheeler Finance Limited (Registered number 1332332)
Amec Foster Wheeler Group Limited (Registered number 4612748)
Amec Foster Wheeler International Limited (Registered number 3203966)
AMEC Investments Europe Limited (Registered number 3704533)
AMEC Offshore Limited (Registered number 1054207)
AMEC Process and Energy Limited Registered number 2028340)
AMEC Project Investments Limited (Registered number 2619408)
AMEC Services Limited (Registered number 2804093)
AMEC Trustees Limited (Registered number 2830098)
Amec USA Holdings Limited (Registered number 4041261)
Amec Wind Developments Limited (Registered number 8781332)
Automated Technology Group Holdings Limited (Registered number 07871655)
East Mediterranean Energy Services Limited (Registered number SC505318)
Foster Wheeler (G.B.) Limited (Registered number 745470)
Foster Wheeler (London) Limited (Registered number 887857)
Foster Wheeler (Process Plants) Limited (Registered number 1184855)
Foster Wheeler E&C Limited (Registered number 2247293)
Foster Wheeler Environmental (UK) Limited (Registered number 1657494)
Foster Wheeler Europe (Registered number 04127813)
Foster Wheeler UK Investments Limited Registered number SC649888)
Foster Wheeler World Services Limited (Registered number 1439353)
FW Investments Limited (Registered number 6933416)
HFA Limited (Registered number SC129298)
Integrated Maintenance Services Limited (Registered number 3665766)
James Scott Limited (Registered number SC35281)
John Wood Group Holdings Limited (Registered number SC642609)
JWG Investments Limited (Registered number SC484872)
JWGUSA Holdings Limited (Registered number SC178512)
Kelwat Investments Limited (Registered number SC203212)
Metal and Pipeline Endurance Limited (Registered number 534109)
Mustang Engineering Limited (Registered number SC273548)
Press Construction Limited (Registered number 471400)
Process Plants Suppliers Limited (Registered number 957881)
Production Services Network (UK) Limited (Registered number SC293004)
Production Services Network Bangladesh Limited (Registered number 02214332)
PSJ Fabrications Ltd (Registered number 01205595)
PSN (Angola) Limited (Register number SC311500)
PSN (Philippines) Limited (Registered number SC345547)
PSN Asia Limited (Registered number SC317111)
PSN Overseas Limited (Registered number SC319469)
QED International (UK) Limited (Registered number SC106477)
Rider Hunt International Limited (Register number 02305615)
Sandiway Solutions (No 3) Limited (Registered number 5318249)
SgurrEnergy Limited (Registered number SC245814)
The Automated Technology Group Limited (Registered number 03109235)
WGPSN (Holdings) Limited (Registered number SC288570)
WGPSN Eurasia Limited (Registered number SC470501)
Wood (Indonesia) Limited (Registered number SC693591)
Wood and Company Limited (Registered number 01580678)
Wood Group Algeria Limited (Registered number SC299843)
Wood Group Algiers Limited (Registered number SC299845)
Wood Group Annaba Limited (Registered number SC299848)
Wood Group Arzew Limited (Registered number SC299850)
Wood Group Engineering (North Sea) Limited (Registered number SC030715)
Wood Group Engineering & Operations Support Limited (Registered number
SC159149)
Wood Group Hassi Messaoud Limited (Registered number SC299851)
Wood Group Holdings (International) Limited Register number SC169712)
Wood Group Investments Limited (Registered number SC301983)
Wood Group Kenny Corporate Limited (Registered number SC147353)
Wood Group Kenny Limited (Registered number 1398385)
Wood Group Kenny UK Limited (Registered number 2331383)
Wood Group Power Investments Limited (Registered number SC454342)
Wood Group Production Services UK Limited (Registered number SC278252)
Wood Group/OTS Limited (Registered number 1579234)
Wood International Limited (Registered number 10517856)
Wood Limited (Registered number 9861563)
Wood Finance UK Limited (Registered number 03725076)
Wood Pensions Trustee Limited (Registered number 1889899)
Wood Transmission and Distribution Limited (Registered number 11829648)
Wood UK Limited (Registered number 3863449)
Shareholder information
Officers and advisers
Secretary and Registered Office Registrars
M McIntyre Equiniti Limited
John Wood Group PLC Aspect House
Sir Ian Wood House Spencer Road
Hareness Road Lancing
Altens Industrial Estate West Sussex
Aberdeen BN99 6DA
AB12 3LE
Stockbrokers Independent Auditor
JPMorgan Cazenove Limited KPMG LLP
Morgan Stanley Chartered Accountants and Statutory Auditors
1 Marischal Square
Broad Street
Aberdeen
AB10 1DD
Company Solicitors
Slaughter and May
Financial calendar
Results announced 26 March 2024
Annual General Meeting 9 May 2024
The Group's Investor Relations website can be accessed at www.woodplc.com
(http://www.woodplc.com)
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