2014 Engineering Captial Markets Day
2014 Engineering Captial Markets Day
2014 Engineering Captial Markets Day
October 2012
This document does not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to purchase any
shares in the Company, nor shall it or any part of it or the fact of its distribution form the basis of, or be relied on in connection
with, any contract or commitment or investment decisions relating thereto, nor does it constitute a recommendation regarding the
shares of the Company.
Certain statements in this presentation are forward looking statements. By their nature, forward looking statements involve a
number of risks, uncertainties or assumptions that could cause actual results or events to differ materially from those expressed
or implied by the forward looking statements. These risks, uncertainties or assumptions could adversely affect the outcome and
financial effects of the plans and events described herein. Forward looking statements contained in this presentation regarding
past trends or activities should not be taken as representation that such trends or activities will continue in the future. You
should not place undue reliance on forward looking statements, which speak only as of the date of this presentation.
The Company is under no obligation to update or keep current the information contained in this presentation, including any
forward looking statements, or to correct any inaccuracies which may become apparent and any opinions expressed in it are
subject to change without notice.
Overview
Alan Semple – Chief Financial Officer, John Wood Group PLC
Introductions
Q&A
3
Timetable
Start time Time Section Presenter
15.00 00.10 Welcome Alan Semple
15.10 00.20 Introduction to Mike
Engineering division Straughen
15.30 00.50 Wood Group Mustang Steve
Knowles
16.20 00.20 Break
16.40 00.50 Wood Group Kenny Steve
Wayman
17.30 00.10 Recap and Q&A All
17.40 Drinks reception All
4
Wood Group organisation
(from 1 November 2012)
Wood Group
Allister Langlands Chairman
Bob Keiller Chief Executive Officer
Alan Semple Chief Financial Officer
UK
Wood Group Mustang Americas Maintenance
Wood Group Kenny International Power Solutions
5
Our business1
Wood Group
Revenue Over $6bn
People Over 41,000
World leader in the delivery of World’s largest production facilities World’s leading independent industrial
engineering services to the upstream, support provider gas turbine aftermarket provider
subsea & pipeline and downstream
energy sectors 28,000 employees 3,700 employees
c25% of Group revenue Historic EBITA margin range Historic EBITA margin range
of 4.0% to 6.2% of 4.7% to 8.0%
Historic EBITA margin range
of 9.8% to 14.2% Typical project 3-5 years Typical project 1-5 years
Typical project 3-24 months Predominantly opex driven Opex and capex driven
1 Employee numbers and revenue splits as per interim results to 30 June 2012. Divisional EBITA ranges based on reported high and low %s since 2006.
Core Values
7
Key objectives for today
8
Engineering division
Mike Straughen – Chief Executive, Engineering
1,400 200
8,000
1,200 10
150
1,000 6,000
800
100
600 5 4,000
400 50 2,000
200
0 0 0 0
2006 2007 2008 2009 2010 2011 2006 2007 2008 2009 2010 2011 2006 2007 2008 2009 2010 2011 2006 2007 2008 2009 2010 2011 1H
2012
1 Taken from management information and published annual and interim report data
Upstream c40% of Offshore & onshore upstream facilities – deepwater Worley Parsons
revenue topsides, shallow water jackets and topsides, KBR
onshore production plant, heavy oil SAGD AMEC
production, shale facilities, arctic technology Technip
Jacobs
Bantrel (Bechtel)
Subsea & c40% of Subsea, pipelines & integrity management – offshore IntecSea (Worley Parsons),
revenue and onshore pipelines, subsea systems, flow Genesis (Technip)
pipeline
assurance, riser design, integrity analysis, joint Germanischer Lloyd
industry projects management, renewables (wind and Gulf Interstate
CO2 sequestration)
Downstream, c20% of Downstream, process & industrial – refineries, LNG & Fluor
revenue regasification, petrochemical plants, automotive, Jacobs
process &
industrial & manufacturing plants CB&I inc. Shaw
industrial
Foster Wheeler
1 “Upstream” and “Downstream process & industrial” work is conducted by Wood Group Mustang. “Subsea & pipeline” work is conducted by Wood Group Kenny, apart from
onshore pipeline work in the Americas which is conducted by Wood Group Mustang.
Subsea & Subsea market has strong sustainable underlying drivers and sector
pipeline spending remains robust
13
Market leading positions
Deepwater topsides Subsea solutions
Control Engineering ranked us as no 1 One of the leaders in the design and engineering of
system integrator giants of the year in 2012 grassroots and revamped fluid catalytic crackers in
North America
14
Strong long term customer relationships
IOC
22%
NOC
35%
38% 5%
Independents
IOC
NOC
Independents
Others
Others (Including Pipeline Operators, EPC Contractors)
1 Based on contracting arrangement with immediate customers; source
management information to 30 June 2012
15
Engineering – key areas of focus
Markets
Customers
People
Capability
16
Engineering – a global footprint
Europe
1,500 People
North America
6,000 People
Asia
300 People
Middle East &
Africa
700 People
South America
1,100 People
Australia
Major hub 500 People
Local office
17
Key messages for today
High quality & motivated people – confident in our ability to continue to attract future
talent
Virtuous circle - best people > best projects > best people
Offshore Onshore Thermal Heavy Oil Pipeline Process Plants & Industrial Automation
PROJECT MANAGEMENT
20
History
1987 - Mustang Engineering founded in Houston, TX
1990 – First “deepwater” project; deck and facilities design for BP in 314 meters of water
2000 – Mustang Engineering and Alliance acquired by Wood Group (1,400 people in US)
22
Global footprint
• MAJOR WORK ARENAS
• Permanent office
Select project locations
Norway
UK
•
•
Spain
NORTH SEA
Kazakhstan Russia
Alaska
Libya
Iraq
UAE China
Japan
•
• • • •
CANADA
••
•
Nigeria
Egypt •
• MIDDLE EAST
•
South Korea
•
Vietnam SE ASIA
USA
•• GoM •
E. Guinea
Angola Mozambique
India • Malaysia
Singapore
•
•
COLOMBIA
• •
WEST AFRICA
Indonesia
• AUSTRALIA
Peru •
•
Brazil
Chile Argentina
New Zealand ••
Latin America
EAMIR 1,000 people
North America
Asia Pacific
1,000 people Mexico City, Bogota, 5,400 people
200 people
Woking, Al Khobar, Mendoza, Buenos Aires, Houston, Calgary,
Kuala Lumpur
Luanda, Mumbai Santiago, Lima Greenville, Denver
23
Global reach, local touch
Market drivers and characteristics
Offshore
Large global projects
Expanding project development in deepwater arenas
Increasing complexity of projects requiring more engineering
Onshore
Impact of shale regions – unprecedented activity level in North America
IOCs moving into gas gathering, processing, and compression
Emerging global shale developments
24
Market drivers and characteristics
Pipeline
North America shale and Canadian oil sands driving infrastructure
enhancements
Economics driving general shift to liquids in North America
Infrastructure developments continue in Latin America
Automation
Significant global market growth
Clients focused on efficiency, systems integration, and security
Market growth in both greenfield and brownfield projects
25
Wood Group Mustang position
Pipeline
Process Plants & Industrial Automation & Control
Ranked #1 in ENR’s Top
Recognised Leader in Ranked #1 by Control Engineering in their
Engineers in Pipelines
FCC projects list of 100 System Integrator Giants
26
World class project portfolio – excellence in offshore
27
Our competitive advantage
People Oriented…Project Driven®
Responsive to client needs
28
Key clients
Process
Thermal
Client Offshore Onshore Pipeline Plants & Automation
Heavy Oil
Industrial
Anadarko X X X
Aramco X X X X
Cenovus X X
Chevron X X X X X X
Conoco Phillips X X X X X
DSME X X
Eastman X X
Ecopetrol X X X X
ExxonMobil X X X X X
Hess X X X
Noble Energy X X
Occidental X X X X
Samsung X
Shell X X X X X X
Statoil X X
29
Customer analysis1
Business unit split
Top clients by revenue
Automation
Second 5 7% Offshore
PP&I 30%
20% 21%
Other
Top 5 55% Onshore
25% Pipeline 7%
22% Heavy Oil
13%
Service split
Other FEED
EPCM 10% 30%
15%
Detailed Engineering
45%
30 1 Based on management information for the six months to June 2012, mix subject to change over time
Key areas of focus
Maintain customer focus to retain our market leading positions
Continued focus on safety in design and integrity management
Excellence in execution and project delivery
Geographic expansion in response to customer mix shifting towards NOCs, which
means further local staff growth and training
Enhancing work share capabilities
Maintaining a low risk, largely reimbursable business model
Resource recruiting, training and retention
31
Key takeaways
Strong position across long-term growth markets
We Deliver!
32
Wood Group Kenny
Steve Wayman – Chief Executive, Wood Group Kenny
Drilling Risers
Production
Risers
Moorings
Subsea (SURF) & SURF &
Systems Flow Pipelines Pipelines Project
Management
Assurance &
Modelling
2012 - Awarded Shell Enterprise Frame Agreement (EFA) for subsea EPCM services
35
Structure & range of services
World’s largest independent engineer/manager of subsea & pipeline systems.
Full suite of specialist skills all in‐house: flow assurance, risers, materials
N SEA/WoS
• ••
• • ••
• Barents
Sea
• • At. Canada
E. Med. •
•
CASPIAN Korea •
Algeria
•
Israel •UAE
Oman
••
India •
Philippines
•
•GoM Trinidad
Ghana •
Nigeria
•
Uganda • •SARAWAK/SABAH
ANGOLA •
•
Mozambique •• Brazil
NWS•
TIMOR SEA
S. Africa • •
Queensland •
•
Australia
Africa/M. East Americas
400-500 people
100-200 people India 400-500 people
Perth, Melbourne,
Abu Dhabi, Lagos, Luanda, 100-200 people Houston, Vancouver,
Brisbane
Baku Delhi, Pune, Chennai Maine, Rio
Emerging opportunities –
Chinese operators & contractors expanding internationally
needing high end design & project management technical skills
(example Sinopec for Ghana)
E Africa: Mozambique, Uganda (Onshore), Kenya/Tanzania (Offshore)
E Mediterranean: Israel & Cyprus big gas finds = Export pipelines
European Offshore Wind – Oil & Gas skills knowledge transfer
39 Experience that Delivers
Wood Group Kenny position
Largest subsea engineering specialist by both
headcount & global footprint
Know-How
State of the Art HP/HT & PiPiP (cryogenic) design
World renowned experts on flexible pipe, cyclonic pipeline stabilisation
Unique on-line Subsea & Pipeline Technical Training Academy
Software
Subsea & pipeline FEEDs mainly bid/awarded separately from topside/host FEED (or with options to
combine or separate)
Market now mainly focused on multiple offshore contracts which need managing/interfacing
Stick closely to our niche but fill it beyond pure design. Target
increased revenue from non design-based activities
Restricted market access to large/long term work scopes for aspiring entrants
Virtuous circle - best people > best projects > best people
52
Case studies
Client: ExxonMobil Client: CCRL
Location: Singapore Location: Saskatchewan,
Largest ExxonMobil Canada
chemical plant in the world.
Main automation contractor, FEED and Detail Design for
upgrade of existing facility, the grass roots of a $1.9
process control and billion refinery expansion
information systems for new project. Expansion includes
facility. Greater than (FCC) complex to increase
450,000 man hours. capacity to 130,000 barrels
per day of crude processing.
53
Customer commendations & endorsements
“We have enjoyed a long relationship with J P Kenny and they have been an important participant in our
project teams. JPK has carried out this work effectively, professionally and with technical excellence.”–
Anadarko
“WGIM performance was of a high quality standard, specifically the quality of report writing, and support from
Jakarta office which was exceptional.” - Origin Energy
“Many thanks for your excellent support which has been a major contributor to us reaching a stage whereby
we can commence manufacture with confidence. WGIM personnel go that extra mile.”– Shell
“Excellent work on Galapagos & NaKika 3. JPK brings in the necessary resources despite a difficult market,
executing in a high quality manner & continually finding improvement opportunities.“ - BP
“We successfully completed the last remaining task at Lomond last night and the platform has recommenced
production after >2 months downtime. This was a very complex workscope, developed at short notice, with
many challenges along the way. Many thanks to you all at WGIM for making this a safe and successful
operation. A fantastic team effort.” - BG Group
“The increases in the size, competence/dedication of the JPK teams is particularly appreciated. As are your
efforts to provide additional teams to cope with our concurrent vessel/platform requirements.” - BP
“May I take the opportunity to thank you all at JPK for your 4 1/2 yr major contribution, which was always
grounded, highly professional and fully engaged.”– Shtokman project