REG - Wood Group (John)PLC - FY23 trading update

John WoodAnnouncement

12/01/2024 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240112:nRSL4625Za&default-theme=true

RNS Number : 4625Z  Wood Group (John) PLC  12 January 2024

FY23 trading update

12 January 2024

 

Full year trading in line with expectations

 

John Wood Group PLC ('Wood' or 'the Group') announces a trading update for the
year ended

31 December 2023 ('FY23').

 

Ken Gilmartin, CEO, said:

"We are now one year into our strategic growth journey and our results
continue to show clear progress. We have delivered strong revenue and EBITDA
growth, improved our underlying cash generation, grown our order book, and
continue to see an acceleration in the proportion of sustainable solutions
within our pipeline.

 

"We are confident that our actions, business model and strategy are delivering
and look forward to giving a further update in March."

 

Highlights

·      Trading in line with expectations

o  FY23 revenue around $6 billion, up 9% with good growth across all business
units

o  FY23 adjusted EBITDA slightly ahead of guidance at $420 million to $425
million, up 9%

o  Adjusted EBITDA margin slightly above 7% including opex investments in the
year

·      Further momentum in strategic delivery

o  Significant contract wins across energy and materials

o  Order book of around $6.1 billion was up 4% on a comparable basis(1) and
supports our growth expectations for 2024

o  Over 40% of bidding pipeline now from sustainable solutions(2)

o  Started the sales process for our stake in the EthosEnergy joint
venture(3)

·      Continued improvement in underlying cash flows

o  Operating cash flow of c.$210 million, a significant improvement on FY22
($66 million outflow), with around $175 million operating cash flow generated
in the second half

o  Net debt excluding leases at 31 December 2023 was c.$680 million,
including exceptional cash outflows in line with our guidance of c.$140
million and an FX impact of c.$15 million

o  Net debt was slightly above our expectations due to FX and the timing of
customer receipts in December, as flagged in our Q3 trading update

o  On track to deliver positive free cash flow in 2024, as previously guided

 

FY23 trading across businesses

Consulting saw strong revenue growth of c.13% to c.$0.7 billion with continued
growth in our solutions across energy security, energy transition and digital
consulting.

 

Adjusted EBITDA was c.4% higher at c.$80 million, with revenue growth partly
offset by a lower margin of c.11% compared to 11.7% last year, reflecting opex
investments to support future growth.

 

Projects saw strong revenue growth of c.10% to c.$2.5 billion, with very
strong growth across oil, gas and chemicals.

 

Adjusted EBITDA was c.8% higher at c.$185 million with a margin around 7.5%
(FY22: 7.6%), partly reflecting the impact of pass-through revenue.

 

Operations saw like-for-like revenue growth(4) of around 7% to c.$2.5 billion.
This growth reflects higher activity levels across the business, particularly
in Europe and the Middle East.

 

Adjusted EBITDA was around 11% higher at c.$165 million, with an improved
margin of around 6.5% (FY22: 6.1%) helped by good operational performance.

 

Investment Services revenue was up around 35% to c.$0.3 billion, reflecting
higher activity in our heavy civils business, and the facilities business
transferred from Projects at the start of the year.

 

Adjusted EBITDA was c.$70 million (FY22: $69 million), including a
contribution of around $65 million from the two Turbines joint ventures (FY22:
$48 million).

 

Central costs were around $75 million (FY22: $74 million) with cost savings
mitigating inflationary pressures.

 

Significant contract wins

Significant contract wins in the fourth quarter included:

·      Detailed engineering design for Woodside's Trion project, the
deepest semi-submersible facility in the Gulf of Mexico

·      Brownfield engineering contract in Europe, helping to produce
active pharmaceutical ingredients for medicines

·      Supporting one of the world's largest offshore clean power
projects in Germany

·      Appointed owners' engineer for world-leading green hydrogen
project in Spain

·      Delivering engineering, procurement, construction and
commissioning services on a cost reimbursable basis for brownfield
modifications for bp's Murlach development in the North Sea

·      Two-year operations contract extension with Equinor in the
Mariner field in the North Sea

 

FURTHER DETAILS

 

Conference call

A webcast and conference call will be held today at 8:00am (UK time) with Ken
Gilmartin (CEO) and David Kemp (CFO). The webcast will be live at
https://edge.media-server.com/mmc/p/xv29crc6
(https://edge.media-server.com/mmc/p/xv29crc6) .

 

To join the conference call, and ask any questions, please register via:

https://register.vevent.com/register/BIe00865c7243640928f313b3a839cdb9e
(https://register.vevent.com/register/BIe00865c7243640928f313b3a839cdb9e) .

 

The webcast and transcript will be available after the event at
www.woodplc.com/investors (http://www.woodplc.com/investors) .

 

Full year results

We will publish our full year results in full on 26 March 2024.

 

 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

Notes

1.    Excluding the Gulf of Mexico labour operations business that was sold
in March 2023. It had an order book of $117 million at December 2022.

2.    Estimated share of pipeline related to sustainable solutions:
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 sustainable solutions element, we include the
proportion of the contract that is related to those sustainable elements.

3.    Wood owns a 51% share in EthosEnergy, a turbines services business
that serves gas turbines, steam turbines, generators, compressors and
transformers. In FY23, our share of adjusted EBITDA was around $30 million.

4.     Excluding the Gulf of Mexico labour operations business that was
sold in March 2023. It contributed $21 million of revenue and $1 million of
adjusted EBITDA in FY23 up to its disposal. It contributed $99 million of
revenue and $5 million of adjusted EBITDA in FY22.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  TSTEANFFFLNLEFA