Worley Limited

Good morning and thank you for standing by. Welcome to the Worldly Full Year 2026 Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. And I'd like to hand the conference over to your first speaker today, Chief Executive Officer, Chris Ashton.

Thank you and welcome everyone for joining Worley's full year results presentation for the 2026 financial year. As usual, I draw your attention to the disclaimer on slide two. I'd first like to acknowledge the Gadigal people of the Eora Nation, the traditional custodians of the land from which I'm calling today. And I pay my respects to their elders past and present and to the emerging leaders. Turning to slide three. I'll begin with business performance. Justine will then take you through the financial results and I'll return to cover our strategy and outlook. It's fair to say FY26 was a story of two halves, with resilient results and strong momentum in the first half, followed by a more challenging second half. The main factor impacting our growth this financial year was the conflict in the Middle East. Together with foreign currency transaction impact, we weren't able to achieve our FY26 outlook expectations. We've also navigated softer conditions in some markets, but elsewhere activity remained strong, particularly in the Americas, and we stayed close to our customers, secured significant contract wins and maintained a healthy pipeline supported by strong demand drivers. During the year, we repositioned resources toward areas of stronger demand and reset the cost base to support future growth. and at our investor day in May we outlined our growth strategy focusing on winning more full project delivery work and leveraging our expertise in complex critical infrastructure to expand into adjacent markets and we're already seeing good traction. This year saw significant progress in delivering venture global CP2 LNG project in the US and both phase one and phase two reached full and final investment decision. and more recently we were named as the preferred bidder on Uniper's Connor Key low carbon power project in the UK. There is strong evidence of momentum in major EPC and EPCM contract wins reinforcing our competence in medium term growth. Turning to slide four. I'm now going to take you through the headline numbers. where aggregated revenue was $12 billion, broadly in line with FY25 and on a constant currency basis revenue of $12.3 billion showing a growth of 2.3%. Growth was 5.4% in the first half and soft activities within segments of chemicals market and the Middle East conflict impacted the second half. Underlying EBITDA was $734 million reflecting these factors along with the impact of FX translation. on a constant currency basis underlying EBITDA was $773 million. We made margin resilience and cash generation remain strong with normalized cash conversion at 93.6% well within our target range reflecting continued operating discipline. Supporting future performance cost initiatives and business restructuring set our cost base and we expect improved earnings momentum into FY27. Our outlook expectation for FY27 is mid to high single digit growth in revenue and underlying EBITDA. And I'll talk more about this, how we get to this through the group outlook. Looking further ahead, the opportunity remains compelling. Worley is positioned at the center of the long-term need for secure and affordable energy, chemicals, and resources. With the customer relationships, we scale and the expertise to deliver more full project delivery work and expand into higher growth markets. And that is how we deliver our FY30 ambition. Turning to slide five. Our highest priority has always been on keeping our people safe, and we had another year of strong safety performance, notable given the nature of some of the environments in which we operate, including in particular the conflict in the Middle East this year. Our total recordable frequency rate has improved to 0.07, and our serious case frequency rate improved to 0.006. That performance matters. It reflects the discipline and care of our teams around the world. I cannot overstate how deeply proud the Board, my leadership team and I are of our people in the Middle East. Their professionalism and dedication to supporting our customers while continuing to deliver through periods of intense military activity and heightened security risk has been nothing short of extraordinary. Our leaders and our three teams have worked tirelessly to support our people and our customers throughout this period. and I'm pleased that our workforce of more than 4,000 people along with their families within the region remains safe and will continue to focus on keeping our people safe and supporting our customers. On ESG performance, we've strengthened modern slavery reporting and have reduced emissions by 76% from our 2020 base. We've published our Australian Mandatory Sustainability Reporting Disclosures in our annual report in line with the new reporting and disclosure requirements. Turning to slide six. As I mentioned, FY26 was challenging, but the drivers of growth remained firmly in place. Strong demand fundamentals continue to support activity across the broader portfolio, particularly in the Americas, offsetting software operating conditions in some markets. In the second half of the year, the Middle East conflict led to project delays and resulted in lower volumes impacting growth. and we provided them with updates on the impact to our business as it became known. The conflict has continued for longer than anyone anticipated and the timing of recovery remains uncertain. Throughout this period, we stayed close to our customers and supported them where we can. This has strengthened those relationships and positions as well as the deferred work begins to return, which is what we're seeing. As noted, FX Translation also weighed on the reported results. Turning to slide seven. What differentiates Worley is the breadth of capabilities and global scale we bring to customers around the world. We have a capital-like business model, long-standing customer relationships, and diversified earnings across geographic regions and across energy, chemicals, and resources. Our capability and expertise across the full project lifecycle continue to underpin our growth strategy. Professional services remain at our core. with construction, fabrication, and procurement growing as customers engage us across more of their capital programs. And that shift is deliberate and supports our FY30 growth ambition. Turning to slide eight, our leading indicators continue to show strong demand and support confidence in our FY30 ambition. The fact that sales pipeline increased 24% with the greatest momentum coming from the Americas and EMEA. The pipeline of opportunities has grown as Worley builds its portfolio in reimbursable EPC and EPCM work scopes and future-facing growth markets. We're strengthening early-stage consulting positions to capture opportunities in full project delivery. Bookings for the year were $15.5 billion, supported by wins predominantly across energy and resources. 44% of these wins have been sole source, reinforcing the confidence customers have in Worley. As I've said, both Phase 1 and Phase 2 of CP2 were booked during the course of the financial year. Note that we'd already provided enduring procurement and construction services planning under a reimbursable contract, so only the remaining scope of work moved into backlog. Backlog increased 9% over the 12 months to $13.8 billion, with over 62% of that expected to be delivered in the next 12 months. This is down on $16.7 billion reported in the half year due to major project work being delivered in the second half and timing of new awards. As we noted in investor day in May, we removed Exxon Mobil's Baytown Blue project, which remains on pause. FX Translation also had a bearing on backlog, which would have been $15 billion on a constant currency basis. The focus on FY27 is clear. continue to deliver backlog, driving revenue growth and converting near-term pipeline opportunities into wins. Moving on to slide nine. Our strategy to win more full project delivery scope is supporting our competence in achieving our FY30 growth ambition. We're focused on identifying opportunities in reimbursable EPC, EPCM work scopes within our pipeline and more than 45% of our current backlog consists of active EPC, EPCM projects. Our strategy is showing early success. You'll have seen the strategic project wins we've announced to the market over the course of the year. These wins span both our existing core markets and targeted future facing growth markets and reflect both established relationships and new customer relationships. We're working closely with leading global customers in high demand growth markets. In FY26, we booked more than 10 billion of wins in our identified growth markets. Since year end, we've continued that momentum, securing contract wins across power, copper, integrated gas, and other energy projects. And we've highlighted those project wins, which form part of our major projects and programs on this slide. Energy remains our largest sector with strong underlying demand drivers. Aggregated revenue increased 8% to $6.4 billion, supported by major EPC projects moving into execution. Integrated gas and LNG in particular remains a key driver of growth, and project timing is influenced by regulatory approval. The Middle East remains an important market for Worli. Our long-standing customer relationships across the region have led customers to engage us on damage assessments, reconstruction planning, and advice to support resilient rebuilding when conditions allow. Power infrastructure is becoming increasingly important, supported by rising electricity demand from data centers and investment across gas-fired generation, renewables, and nuclear, representing a strong growth opportunity for Worli. Moving on to slide 12. Unibus, Connor's key project in the UK, reflects a major opportunity for us in the power infrastructure. The planned development of the project combines growing electricity demand, energy security, and emissions reduction, and is representative of the growth and opportunities we're seeing in our pipeline. Moving on to chemicals and slide 13. Chemicals remains an important long-term market, although conditions were challenging in 26 and are likely to remain so in 27. Aggregated revenue declined 22% to $2.4 billion, reflecting project cancellations such as Shell's Red to Green project and lower activity in some regions, particularly where the market is still working through oversupply. and at the same time we continue to see investment in refining and asset optimization including de-bottlenecking, product slate changes, decarbonization and life extension projects. Petrochemical rationalization and low carbon fuels represent opportunities with project progression to final investment decision the important indicator over the next 12 months. Moving to slide 14. Heidelberg's Pads Wood project highlights the continued investment we're seeing in industrial scale decarbonization. This project demonstrates how our EPCM capability helps customers reduce emissions from existing operations while developing critical carbon capture infrastructure. Moving on to resources. Resources have been our fastest growing sector over the last four years. In FY26, aggregated revenue increased 6% to $3.3 billion. Growth this year was driven by increased activity across mine fertilizers, copper, and battery materials while with continued investment in iron ore. We're also seeing an uplift in demand across the aluminium value chain. Copper is critical. Electrification, data centers, and grid investment continue to support long-term demand growth. Both brownfield expansions and greenfield development will be needed to close the supply gap. We've won contracts with 16 customers for copper projects this financial year alone. Fertilizers and fertilizer projects are supported by population growth and food security, although the Middle East conflict is affecting sulfur supply and phosphate projects in North Africa, while potash projects continue to progress at pace. Battery materials are showing signs of renewed activity. We're seeing a stronger pipeline and broader value chain exposure from mineral extraction through to active materials and recycling. BHP's Janssen Podash project reflects the attractive long-term fundamentals supporting fertilizer demand and global food security. The project demonstrates how we bring together fabrication, modularization, and construction services to support delivery of one of the world's largest potash developments. I'm now going to hand over to Justine to talk you through the financial results in more detail.

Thanks Chris and good morning everyone. Before I take you through the details, I want to highlight three key points that provide context for our FY26 performance and how we're positioned moving forward. Activity levels across much of the business remain strong during the year. And while earnings were impacted by disruption in the Middle East and softer activity in parts of the chemicals market, we continue to secure significant contract wins, supporting booking and backlog growth, which provides line of sight to future earnings. Second, we've taken targeted actions to simplify the business, reduce structural costs and improve efficiency. These actions help strengthen the business today while also creating capacity to selectively reinvest in priority growth opportunities. And third, we've maintained a strong financial position throughout the year. Our balance sheet and cash generation provide the flexibility to invest in our ambition, navigate near-term uncertainty and continue returning capital to shareholders. With that context, let me take you through the results in more detail and turning to slide 18. Aggregated revenue for the 2026 financial year was $12 billion, broadly in line with FY25. On a constant currency basis, aggregated revenue was $12.3 billion. Underlying EBITDA was $734 million. The adverse impact of the Middle East conflict on earnings was $58 million in line with what we had communicated in our 25th of June update. And as Chris noted, the foreign exchange translation impact had a bearing on the result. EBITDA margin on an ex-procurement basis was 9% and on a constant currency basis in line with FY25 and remained within our outlook range. One-off costs related to restructuring activities for the full year were $120 million. Consistent with the half year, these have been excluded from underlying EBITDA. You can see the impact of these costs on our statutory NPAT-A. Savings from our cost management program launched this time last year have exceeded our initial target. These initiatives result in a leaner cost base to support growth, AI and digital deployment, and future earnings performance, as well as partially offsetting inflationary pressures. and normalized cash conversion remains strong at 93.6%, well within our target range of 85 to 95% and it reflects our continued focus on cash and operating discipline. We remain in a strong financial position to support growth and return capital to shareholders. The Worley Board has determined to pay a final dividend of 25 cents per share on Frank We returned $359 million to our shareholders as we completed the $500 million on market share buyback in the full year 2026 and in May we commenced a new $300 million buyback program. Turning to slide 19. I'd now like to just talk through a number of some of the key drivers. While the aggregated revenue was $12 billion, if we look at this on a constant currency basis, the result was stronger at $12.3 billion, reflecting growth of 2.3%. The growth was less than what we had anticipated at the beginning of the year and highlights the headwinds we've faced as our results have been translated to Australian dollars for presentation reporting. Underlying EBITDA declined from 823 million to 734 million. On a constant currency basis, the result was 773 million. Headwinds impacting the result were the extended conflict in the Middle East, which resulted in disruption to existing projects, although the greater impact was the delayed commencement of new awards. We also continued to experience a slower chemicals market. As we expand the scope of our work along the project value chain, there is a mix of margins within that expanded service offering. Major project activity phasing moved towards greater construction and fabrication and procurement. This supported revenue growth and attracted a different margin profile. Our EBITDA margin excluding procurement was within our target range. and our underlying EBITDA margin including procurement was 6.3% on a constant currency basis. Turning to slide 20 and the translation impact. Approximately 93% of Woolies revenue is generated outside Australia and as you can see in the chart, movements in foreign exchange with a larger translation headwind in FY26 than we have seen in recent years. During the year, the Australian dollar strengthened against multiple currencies, particularly in the second half, and this has had a direct translation impact on our Australian dollar presentation of results. If FY25 average rates had applied, at FY26 EBITDA would have been $39 million higher. Relative to the FX rates assumed in our FY26 outlook, the translation impact was greater and reduced our FY26 EBITDA by approximately 50 million against our outlook expectation. We've provided our results on a constant currency basis where relevant to provide a comparative view of underlying business performance. Worley is exploring a change to its reporting currency from Australian dollars to US dollars The group currently has a substantial economic presence outside Australia and the current and expected foreign currency earnings mix is an important consideration to evaluate a change in reporting currency which would reduce translation volatility. Consolidated financial results for the year ending 30 June 2027 will continue to be reported in Australian dollars. following which results for the half and the full year to 30 June 2028 would potentially be reported in US dollars. We will continue to keep the market updated on this potential change. If I turn now to slide 21, during the year we continued our efforts towards reshaping the business to strengthen future performance. We incurred 120 million of one-off costs relating to transformation and Business Restructuring. These costs predominantly relate to restructuring in Western Europe where local labour protections resulted in higher severance and related costs. We incurred 82 million of these costs in the first half and 38 million in the second half. This was in line with our earlier guidance that we expected further costs to be incurred in the second half but these would be lower than those already incurred in half one. The Cost Out program exceeded the initial target of $100 million and we've achieved $132 million of savings. These actions are focused on resetting the cost base, aligning resources to areas of higher demand, reducing complexity and improving scalability. The efforts of the team to take these important steps to strengthen our cost discipline and improve our earnings quality benefit shareholders in this financial year as we see this come through in lower global support costs and in addition these savings in FY27 will partially offset inflationary pressures and be used to reinvest in strategic hires, differentiated delivery platforms and investment in digital tools. As we set out at our Investi Day in May, we are targeting approximately $70 million of investment over two years. These actions support a more efficient and scalable operating model and they support stronger future earnings performance. If I turn now to slide 22, I'd finally like to take you through our capital management position. Our capital framework remains disciplined and it's designed to support both growth and returns to shareholders. We continue to invest in the business while prudently managing debt and maintaining balance sheet flexibility. Our balance sheet position is supported by an investment grade credit rating of BBB with a stable outlook. Normalised cash conversion was 93.6%. well within our target range and our day sales outstanding improved to 44.3 days and remains well controlled and comfortably within our target. Our balance sheet remains strong with leverage at 1.8 times and remains below our target of two times. Total liquidity was 2.1 billion at 30 June 2026. The Board's decision to commence a further $300 million buyback program reflects confidence in our business. In May, we refinanced the Euro medium-term note with a new five-year Australian dollar medium-term note for $375 million, and together with a new 364-day liquidity facility and part utilization of the syndicated facility Revolver, We continue to maintain a diversified debt portfolio with a balance between loan markets and global debt capital markets. The weighted average cost of debt was 4.4% at 30 June 26 and although this will increase following the refinancing of the Euro medium term note at current market interest rates. Overall, our disciplined approach to capital management remains a key differentiator and support long-term value creation. In summary, a challenging earnings performance for the full year, but activity levels across much of the business remain strong. We have delivered on the cost management program and created the platform to deliver our ambition and we have continued as strong focus on cash conversion and balance sheet strength, which positions us well to support growth and returns to our shareholders. I'll hand back to Chris to take you through our strategy and outlook ahead.

Thanks Justine. I'll take you through the strategy and outlook, including our priorities to achieve the FY30 growth ambition. But first I want to remind you of the growth trend over time. The charts on slide 24 are a reminder that growth is rarely linear. The growth of the long-term trajectory remains positive and while FY26 reflected a more challenging operating environment, it doesn't change the solid fundamentals of the business. Over several years, Wallier's delivered growth in revenue, EBITDA, EPS, and backlog supported by a diversified portfolio across sectors, geographies, and services. And that diversification is important. It gives us resilience through cycles and allows us to shift capacity toward areas of greater customer demand as markets shift. Moving on to slide 25. IFY 30 growth ambition is underpinned by four drivers of earnings growth. First, the current market growth. We continue to benefit from tailwinds in our core end markets while also responding to the broader demand for energy, chemicals and resources as affordability and security come into greater global focus. Second, AI-enabled full project delivery. We're increasing the scale of the project we deliver by working with customers across the full project lifecycle and are using technology to improve execution, productivity and scalability. Third, Future-facing growth markets. We're scaling in growth markets like power and data centers with structural demand from electrification, energy transition, resource demand, AI and digital infrastructure, and energy security. And finally, scale benefits. AI, GID, and cost discipline support margin resilience as we grow. Our ambition is to deliver medium-term, double-digit, underlying EBITDA carga by FY30. Moving on to slide 26. In our current markets, we're focused on converting pipeline into backlog, growing revenue and winning a greater share of customer investment. Framework agreements and deep relationships with our customers will support that growth. In AI-enabled full project delivery, our major projects and programs model is operating effectively. We're expanding reimbursable EPC and EPCM work, increasing GID utilization, and embedding AI and digital tools to create a more scalable delivery model. In the future-facing growth markets, we're building on significant wins in gas and LNG, energy transition materials, power, and data centers while maintaining discipline in the market and the contracts we select. On scale benefits will maintain cost discipline, reinvest selectively and increase the use of GID where it improves efficiency. Moving to slide 27. Demand across our core market is underpinned by favourable medium and long term fundamentals, including the need for secure and affordable energy, critical resources, as well as investment in export supply chain and critical infrastructure. This year we expect to deliver mid to high single digit growth in the underlying EBITDA and this will be more heavily weighted to half two than historical norms. We also expect mid to high single digit growth in aggregated revenue with revenue phasing across the half year periods broadly even. Disruption and uncertainty in the Middle East persists and we're seeing second order supply chain impacts particularly as it relates to the supply of sulfur for fertilizer projects within North Africa. Our customers in the Middle East are turning to us for damage assessments, reconstruction planning and early stage new projects, designed to help them navigate export constraints and rebuild resilience. And while the timing and scale of associated opportunities remains difficult to predict, our outlook anticipates work volumes in the Middle East to lift in half too. Activity across the broader business continues to benefit from strong demand in key markets and we're seeing tailwinds in our largest market, North America. A growing portfolio of major projects within the pipeline supports our growth outlook. These are projects where Worli already has an established position through earlier phases of work. As those projects progress, we expect more of that work to move into execution. Just moving on to slide 28, that concludes the formal part of the presentation. We appreciate your time and Justine and I are now happy to take your questions.

Thank you. To ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please limit yourself to one question and one follow-up at a time. If you have further questions, kindly rejoin the queue. Once again, that's star 11 for questions. A moment for our first question. And our first question comes from the line of Neeraj Shah from Goldman Sachs. Please go ahead, Neeraj. Your line is open.

Hi, good morning. Just a couple from me. Firstly, in terms of the guidance, the mid to high single-digit EBITDA growth, is there a currency headwind embedded in that, or is that a constant currency expectation?

Hi, Neeraj. Look, the way we've looked at the outlook is we've used a weighted average forward currencies to determine the exchange rate across our portfolio and currency mix. As we move through the year, of course, we will look at our performance and we'll provide a view of that on a like-for-like basis to the prior year. But as you could appreciate, we operate across around 30 different currencies. and they will have a different mix around the earnings and that will change from period to period but is based on an assumption looking at that forward rate at a point in time.

Understood, thank you. And in terms of the second half, stronger than normal second half weighting of that guidance, should we expect earnings or EBITDA in the first half to grow given that skew?

You can expect the earnings, when we talk about the first, second half, you would have traditionally seen a trend for Worley that probably put out earnings at around probably 45 to 55% type of weighting between the first and second half if we looked over the last number of years. We can certainly expect that earnings skew to be greater than that into the second half for FY27.

Yeah, sorry, I'll just add to that. So, you know, if you look at like the first half of the financial year, you know, it's always impacted by the Northern Hemisphere summer period. So, you know, you've always got that. So if you're looking at the first six months of the calendar year against the second, so the second half of FY26 against the first half of FY27, you'll all see a difference because the first half of FY27, The finance years just impacted by Northern Hemisphere summer vacations, people taking time off. It's always different.

Understood. And then last one for me, just how are you thinking about potential restructuring costs into fiscal 27 or below the line items in general?

Neeraj, we don't have a plan for further restructuring as we move into FY27. You can appreciate that we will continue to take a very disciplined approach to how we allocate resources and how we manage our cost base. But certainly at this point in time, we don't have a plan for restructuring into FY27. In terms of how we treat those costs, we have been consistent with that over a number of periods and our view around that has not changed.

Thank you.

Thank you. We will now take our next question. And our next question comes from the line of Ramon Loza of Jefferies. Please go ahead, Ramon, your line is open.

Good morning Kristen, Justine, just a couple from me. Just wondering if you could maybe take us through the backlog, particularly that June quarter period. It seems like a pretty material step down from the March period that you provided, the investor day, through to June. Just what's driving that and anything you can provide us into the first couple of months of this year would be helpful.

Yeah look you have seen a step down in that backlog if we looked at it from the half and the real key drivers around that is obviously we've executed the work that was in the backlog and that's shown that that come down from what we had in at the half year we'd also which we'd advise certainly in May is we removed the Baytown Blue from that backlog number as well coming through and then of course you do see a currency translation impact sitting in that backlog as well but really the main impact is the burn profile into that second half as Chris really talked about you know we've seen a number of Strategic wins coming through in FY26 and certainly based on the conversations that we are having with customers today have some optimism around our backlog moving forward particularly if you see the pipeline and the bookings growth that we're showing.

Right and have you seen that? In the first couple of months of 27, any of that move into the backlog or is there still delays in realising some of those project wins?

We've shown, and we can point to one of the sets of material in the presentation, where we have highlighted a number of the strategic wins so far. A number of those, and Chris talked to Connors Key for Uniper, that of course is not yet reflected in the backlog that we are showing. We have been, we are the preferred A contractor for that scope of work. There's a number of these that we have highlighted that you are not seeing in that backlog number because of course it represents a point in time, which is 30 June 2026.

Yeah, I mean, if you look at the EPC, Peconis Key, TC Energy, you know, these are material awards. that once they get FID will make a significant contribution to the backlog, a material contribution to backlog. So it's just a timing thing rather than any fundamental shift. And as you can imagine, the awards as they move from studies or entering into full delivery, it's never linear. You know, we can't, you know, we can, we're the, I guess the whim of the customer, but The project, the very large project that we're working on, yeah, show great prospect for coming in the backlog within this financial year.

Okay, got it. I've just got one very quick one. Maybe just, are you making any assumptions around further Middle East impacts within your guidance?

So, if we look at the Middle East and the way I think about it is you think of a band Above the upper part of the band would be All Out War. Below the lower part of the band, you've got Peace and we're operating in this kind of this band, this space in the middle where it's neither All Out War nor Complete Peace. And what we've found is our customers are kind of normalizing things and starting to get back to normal as normal can be. We're seeing deferred projects. that were to further begin the war start to come back on the table and we're in discussions with them. So we're actually seeing the 27 growth in the Middle East. But like anything, you pick up the newspaper and the leader of the US is saying one thing one day and then a few days later something else. But currently what we're seeing with the customers is a normalization of operations and investment and again the key indicator for me is those projects that were deferred at the beginning of the war at the end of February and now back on the table and we're in discussion with them. So it gives me confidence all things remaining as it is now that we'll see the growth that we're expecting, we'll deliver the growth that we're expecting and projecting to have in 27.

I think the one thing I would add Chris is we certainly through The work that we've done, we see that coming through in the second half of the year. We do recognize, as Chris said, the continued uncertainty in the Middle East that we've seen this year. So our assumption is that we see that come through in the second half.

Thank you. We will now take our next question from the line of John Patel from Macquarie. Please ask your question. John, your line is open.

Good morning, Chris and Justine. Just in terms of your 27 earnings growth drivers there, if you wouldn't mind just providing some further sort of colour detail around what you see as the key growth drivers. Obviously, Justine, you've talked to the cost out, so presumably expecting some tangible benefit there. CP2 is obviously moving into full-face construction there. and then North America, you mentioned Chris, you're seeing sort of growth there. So if you wouldn't mind just fleshing some of that out, that'd be great. Thank you.

Hi, John. Look, you've absolutely pointed to a number of the key ones there and maybe starting with, as Chris said, the work and the conversations that we're having with the customers around the place, one from the deferral of work from FY26, into FY27 and then some additional scope which I'm sure Chris will talk to. As you noted and we've talked to the market previously with Venture Global, certainly as part of CP2, the team is in that construction phase of that project and there is very significant momentum there and scope of work that is due to be delivered through the course of FY27. and then also into FY28. You might have seen in the material and Chris mentioned very briefly within our backlog, we do see about 62% of that backlog being delivered through the course of FY27. But Chris, maybe you want to mention a couple of things.

Yeah, look, if you look at, obviously, you know, we can talk about VG, but I think that's pretty well understood. You know, we've got phase one and two, and then there's the phase two expansion, which we expect that we'll get FID in 27. We've got the Connors Key, which we are well into in terms of the early phase work. That will get FID in 27. We've got Heidelberg, we've talked about. We do have, look, we, you know, we do have... A recovery in the Middle East, John? Now, the recovery in the Middle East, and like I said, we're projecting growth overall year on year. The growth in the Middle East has been offset by a slowdown and deferral of investment in North Africa. That's just because the customer base can't get sulphur through the Humus Straits. They can't get sulphur at the volumes they need to produce the fertilizers, to sell the fertilizers, generate the free cash to So there's been a significant slowdown in that space, offset by what we think is solid growth in the Middle East. There's growth in each of the regions, it's just some of it isn't necessarily obvious because of So the North Africa offset in the Middle East growth. America's going to show growth. I mean, the Americas is showing sort of a rebound, really strong activity, especially on the power side and the data side. And we'll look forward to making some announcements shortly. That will reflect some significant progress in the data center space. So I suggest that people watch out for that.

Thank you.

Thank you. And our next question comes from the line of Rowan Sundrum of MST Financial. Please ask your question, Rowan. Your line is open.

Hi, Kristen, Justine. Questions have been answered, so I'll just ask a question on the CP2 project given it's still such a massive contributor. I was just curious, how much of a driver can it be towards that revenue guidance you've given?

and how are the margins performing versus expectations? Thanks.

I'll answer the second part first and that is the margin expectations have been met on that project. We had in fact the project director for the customer present to the board yesterday morning. The project is going exceptionally well. The project director on the customer side spoke very highly about the team's performance and commercially it's delivering in line with the contractual expectations. And now, Justine, answer the other part, yeah.

Thanks, Chris. Rowan, I mean, we don't comment on individual projects within our profiles, but we know that certainly through conversations we've had at Venture Global, it does have an impact it is a strong deliverer of revenue through the course of FY27 given the phase of that project but it does sit within the broader portfolio as Chris said of other major projects and global operation portfolio work that we do but yes it has a contribution to FY27 which certainly gives us confidence as we look at that backlog and what is due to be delivered through the course of this year.

Thank you.

Thank you. We will now take our next question from the line of Nicole Penny from Remo Equity Research. Please go ahead, Nicole. Your line is open.

Good morning and thank you for taking my questions. Just a quick to follow up on backlog. It was spoken about but just to confirm again that backlog has fallen in the second half relative to the first half and you spoke to that and of course we would expect A declining revenue profile in the following period. Just could you reconcile that again, that positive revenue growth outlook for FY27 and perhaps on the back of that, given backlog declined in this period, even with strong pipeline and bookings, is backlog still the number we should be monitoring for a read through on future revenue or should we really be focused more on bookings and Pipeline Conversion instead. And just a second one, a follow-up on the Middle East that was spoken about. We are six months into the disruption there and you've mentioned it's impacting business activity, but you point that customers are seeing normalization. Could you just give us clarity again on any impact and flow through to medium-term energy projects outside of the Middle East, please?

Let me take the first question and what I would say is and you're right to look to pipeline and bookings as a really strong and key indicator of where we see that growth profile not just in the next 12 months but over longer term when we think out over the next two to three years. The backlog, what we have to be really conscious of is when we represent this, we represent it at a point in time. It reflects the 30 June position that we take a cut off. And so it doesn't necessarily reflect, as we said earlier, those strategic wins that we see coming through the portfolio. So I think you are right to look at bookings, to look at the momentum and strength of the bookings and the pipeline growth that we see as they look through to that aggregated revenue growth that we expect over the near and medium term. Chris, I'll let you comment on the Middle East.

Yeah, just want to just repeat again your question just to make sure I understand it.

The Middle East. I'm just asking, since you're saying that some of the customers are pointing to normalisation, however, could you give us any clarity on the impact through to the medium term on energy projects outside of the Middle East? Since I suppose the Middle East has occurred, is there any change that's moved more outside of the Middle East on the back of that?

I think if we reflect on conversation with customers, while you're still seeing the Middle East operators, so the natural oil companies, the natural energy companies continue to invest, what you've got with the natural energy companies is they're looking at where else the capital investment opportunities sit with not necessarily the risk premium that they would need or that would put on to invest in the Middle East. But if we look at The investment driver in the region, it's really coming from the natural energy companies more than the international energy companies. So continue to see the NOCs invest and the IOCs, if they were willing to invest, they may still, but they're certainly looking at investing in different jurisdictions, different basins.

Thank you very much. Thank you. We will now move to our next question. And our next question comes from the line of Nathan Riley from UBS. Please go ahead, Nathan. Your line is open.

Thank you and good morning. A quick question just in relation to the $58 million Middle East impact, which you've quantified as a drag on 26 earnings. Can I just get an update just in terms of What that actually represents in terms of the impact of other project deferrals and also incremental costs that might have been incurred because of the issues over there?

So it's a result of deferrals, Nathan. In the Middle East, you don't necessarily see costs associated with managing workflow levels. the reality is that what we didn't see was the growth to deliver the growth in headcount to deliver the incremental 58 million rather than any of that 58 million associated with the cost of letting people go and that's because across all the Middle East countries every month someone works they get what they call long service accrual and so if you do have to let them go, the costs have already been recognised so you don't get the restructuring costs in the Middle East like you do in other parts of the world but that $58 million is really around revenue and margin deferral, project deferral, not to do with their restructuring.

Okay, that's helpful, thank you. and picking up I guess the implied margin guidance with your FY27 guidance basically implies a flattish type margin. Can you just give me and I would have thought that with CP2 moving into that more significant construction phase that would have been a little dilutive to the margin so can you just give us an idea of whether that's a sound assumption but also whether there's any potential offsets in relation to that particularly around cost outs?

Yeah, so Nathan, if we look at the EBITDA percentage margin, you're right, we would likely expect that to be relatively flat on what we saw in FY26. And of course, it is driven by the composition and the phasing of projects at any point in time. And you point to Venture Global as an example of that in terms of the construction phase. One of the things that we're able to do as we look at the resilience of our margin over time is really look at our GID utilization. We, of course, maintain that cost discipline. And so there is a couple of very deliberate levers that we look at to try and ensure that we're maintaining that margin resilience. I think it's important to note we don't see any margin erosion in the work that we are bidding or selling into the market. That has maintained and is strong. We do see as we go and expand across the value chain with the different scopes of work that we will undertake, we do see there is a mix of margins within those scopes of work. Yeah, I mean, that's right.

So the work, the margin we're winning work at is not changing. We're winning work at good margin. The thing that, you know, like anything, the mix will vary. But the margin we're winning across all of our work, energy, chemicals, resources, is in line with that which we've been winning. So it's a mixed impact. And then work in the future facing markets, especially in power and data centres, we're getting better margin. So any any margin shift is associated with mix rather than the margin we're actually bidding and winning work at.

That's helpful. Thank you.

I'll just add one more thing as well, Nathan. For some of these large delivery projects, whether it's reimbursable EPC or reimbursable EPCM, they're often incorporated into those performance milestone payments. So, you know, That's just something to bear in mind as well. Not every project, but a number of the larger projects put performance milestone incentives into the contract.

Thank you. We will now take our next question. And our next question comes from the line of Gordie Ramsey of RBC Capital Markets. Please go ahead, Gordie, your line is open.

Okay, thank you very much. Chris, you mentioned customers are turning to Worli for help in the Middle East and that work volumes will lift in the second half. Can you confirm if you've been awarded any projects to repair damaged facilities?

Yeah, it's fair to say we're working on a good number of the facilities that have been damaged in the countries where we're operating. Yes, we've already got that work. In the Middle East, a lot of the work when it goes into EPC will be lump sum turnkey, which we won't do. But then what we do is the customers who get awarded that will often do the engineering for them or will be the program manager for the customers over them. But we're working on a significant number of damage assessment of facilities that have been damaged. across the countries, Saudi Arabia, UAE in particular, which took the brunt of the damage. We're not doing anything in Bahrain. There was some damage in Bahrain, but the predominant work that we're doing on the damage assessment and rebuild support is in Saudi Arabia and UAE.

Would it be fair to say that that work is... Are you seeing any changes to the composition of workflow between professional services, fabrication, construction, and procurement going forward. In the Middle East? Everywhere.

We're going to be doing more large full project delivery, which in the future will include more E, more P and more C or CM. I mean, how grand are you looking for an answer, yeah?

Well, I mean, I'm not, just like, let's say on a percentage basis, Are you seeing, you know, for instance, as CP2 has matured, your work there has moved more into the construction phase from, you know, initially a lot of professional services work. I'm just wondering if you're seeing that with other projects overall or that that mix is being held relatively constant.

Maybe I can help, Gordon, just address that. You know, certainly for FY26 we saw procurement was probably around 30% of our revenue composition and construction and fabrication was probably sitting around 17% or so and our professional services revenue still set at you know greater than 50% of what we were delivering. As Chris said you know as we go forward and we do more full project delivery and we look at the actually essentially getting a bigger piece of a bigger pie, we would expect to see all of those incremental elements actually increase. I'm not expecting to see a really big shift in the relative proportion within that mass.

But the general directories And just lastly on your currency translation risk, this might sound like a dumb question, but have you ever thought about quoting all your projects in US dollars?

I mean, going forward, we will and are looking at our presentation currency. So today, Woolley has always looked at our and have presented our results in Aussie dollars. Given the increasing proportion of revenue that we see coming from outside of Australia, we are certainly exploring moving to a US dollar presentation currency. We do not expect to make that move in FY27, but for the FY28 year, we would look at making that shift to reporting currency in US dollars.

Yeah, I think it's a very, I think it's a good question. And, you know, we've talked about it internally. We're looking at what it means. From a systems point of view, what is it we need to do? From an operational point of view, what does it mean? That work is underway. For FY28, we'll be looking to come back and inform everyone that will move to US dollar reporting currency. The amount of revenue that's coming through the Aussie dollar is... Thank you.

We will now take our next question from the lineup, Nikolai Dale from Baron Joey. Please ask your question Nikolai, your line is open.

Yeah, good day Chris and Justine. Just my first question, FY27 EBITDA growth obviously at this stage is going to be a bit lower than that double digit growth target to FY30 that you gave at the recent investor day. I mean how should we think about the recovery to that double digit target over the following three years? Do you have confidence or line of sight to return to that double digit growth in FY28?

Yeah, we do. If we looked at some of the challenges we had in FY26, were they not there? And they are there. We've got to own it. I think we could have demonstrated that we were on track to deliver the kind of growth that we've been delivering historically. And I say that because our pipeline is strengthened, bookings are strong, backlog substantial. If we look at some of those projects that we have won, been awarded in the early phase of that, we'll get delivery traction in later part of 27 into 28. If we look at some of the The future-facing markets, power and data centers, that will be full project delivery. That gives me confidence that we can get back and get into that double-digit growth in the FY30. Some of these future-facing markets, especially in power and the data centers, the driver for those customers is speed to market and they are less cost-sensitive than the markets that historically we've worked in. So I am confident we can get to that level of growth going to 2030.

Thanks, that's helpful. And the second one on labour, obviously you sort of right-sized the headcount a bit in recent years. Just wondering how, you know, rates of employee attrition and sort of access to labour has evolved over the past 12 months? and then what you think are sort of right headcounts going forward for the business into next year.

Maybe I can help pick that up and Chris can add to it and I guess you're really asking around that headcount and what maybe is the right number in terms of that sort of resource base. Our workforce numbers will fluctuate as our project volumes and the phases change and as we move through. What we're really conscious of and as we did the restructuring work in FY26 is to ensure that we've got the right people and the right resources in the areas where we see the greatest demand and growth and where the customers essentially need those people to be. So I don't think it's right to say, you know, are we at a set number and is that the right number of headcount? I absolutely think it will fluctuate depending on the project volumes and the phasing of the work and the nature of the work that we are doing over a period of time.

Yeah, I think that's right. Look, and if you look at the headcount that's been impacted, I said, you know, there's been project deferrals in the North Africa business because they can't get sulphur. and and obviously that you know that is that is impacting headcount but we've always fluctuated in the in the headcount but you know I'm not concerned about if I look at the work that's ahead of us we look at the the bookings we've made we look at the where we are in some of the early phase of some significant project I mean Collis T is a is a substantial project and that will get traction in the second half moving into 28. So I'm not too worried about where we are at the moment. Again, it's a bit like backlog. It's a headcount at a point in time. It's a data point in the mix, but you can't look at it as a single data point. Fair enough.

Thank you.

Thank you. We will now take our next question from the line of Nicholas Rawlinson from Morgans. Please go ahead Nicholas, your line is open.

Hi Chris and Justine, thanks for taking my questions and thanks for the additional colour on those debt portfolio metrics. Could I just ask how come we should still expect leverage to rise to two times when earnings are expected to grow in FY27 please?

Really the leverage that we outline is an indication, it's a target to say we think it's reasonable to have a leverage at around two times as we saw for the FY26 year that was sitting at 1.8 times is where we landed. But we certainly do put an indication out there around what is the level at which we feel comfortable from a leverage perspective. And we will manage that through the course of the year ensuring that we maintain a good liquidity for the business that allows us to ensure that we've got the flexibility as we move through and deliver on our ambition to FY30.

Right, that's helpful. Thank you. And then, and sort of just following on from Ramon's question earlier, I know you mentioned Connor's Key, but can you sort of talk to the EPCM I find a bit more generally. Yeah, I guess just feels like the backlog decline might be a bit hard to arrest with the pure APCN wins. Yeah, I came to understand the APC pipeline.

Yeah, look, we've got obviously that we've got the Coniskey, we've got TC Energy. You know, we've got some work that we'll announce around data centres and power generation. We've got a number of larger EPC. I think we've got 20 larger projects that we're working on in various phases. So for me, I would look at the fact that we've got a really healthy and growing pipeline and then look at the bookings that we're getting. But we are seeing an increasing number of larger what we in our major projects and programs sort of part of our business we're seeing a large number of of those in fact you know what's interesting a customer came out last week or even though it might be earlier this week and talked about their concerns about there only being a few uh companies who can support large project delivery of the kind that we're talking about and that is important to them for their capital investment plan to get access to it so we see that market presenting growing opportunity to us and if we look at the number that large projects and programs that we're working on they're going to come through they'll come through in the backlog but we just you know we just can't control the timing of it so Justine says the backlog is a point in time but if you look at the future factors pipeline that's very healthy and it's a good portion of that is in the larger projects EPC, EPCM. and just to re-emphasize, I've said all the time, we won't take on any lump sum turnkey EPC. This is when we're talking about EPC or PCM, it's all reimbursable.

Great, that's it from me. Thank you.

Thank you. That was our final question for today. I'd now like to turn the conference back to Chris for his closing comments.

I'd just like to thank everyone for joining the call and the questions and obviously we'll be in Sydney for Thursday and Friday, Melbourne Monday and Tuesday where I'll meet the number of you at either the group lunches or one-on-one meetings so look forward to seeing you and if you have any further questions certainly get in touch with Kylie and we'll make sure that we get responses to you.

Thank you for your participation in today's conference this does conclude the program you may now disconnect your lines.