John Wood Group PLC

Good morning everyone and thank you for joining our 2020 results presentation. I hope you and your families are well in what continues to be a difficult, challenging period for us all and we look forward to meeting you again in person when circumstances allow. As always, our CFO David Kemp will take you through our financial performance and I'll bookend David's presentation by focusing on two primary areas. Firstly, looking back in 2020, in the year just gone by, recognising the resilience our business has demonstrated through our people, in our client delivery and financially, how we've responded robustly in the face of significant challenge, and why our strategy has put us in a better position for the future than many of our competitors. Secondly, I'll cover our Future Fit programme, designed to accelerate our strategy and strengthen our position as a sustainable investment proposition. I'll also cover what we're seeing in terms of our market evolution, the work we're winning, and the practical steps we're taking to remain ahead. This includes significant advancement in our sustainability programme, not only in how we are operating as a business, but also how we're supporting clients as we all transition to a cleaner, more sustainable future. I think we can all agree 2020 has been a year like no other. I take great pride in the way our people responded and are still responding to the challenge, focusing on delivering for our clients, supporting our communities and looking out for each other's wellbeing. Our strategy has enabled us to come through an exceptionally challenging year in good shape. Benefiting from the breadth of our end market exposure, we've seen relative resilience in around 65% of our end markets. Our ability to leverage our asset-light model has been key, and we took early and decisive action to protect the balance sheet, margins, and cash flow. By improving utilization and reducing overheads, we've successfully protected margins to deliver EBITDA of $630 million at a margin of 8.3%, down just 0.3% on 2019. We also made excellent progress on portfolio optimisation and reduced net debt by $410 million. We're very pleased to be approaching global resolution on the legacy investigations, which predominantly are related to the use of agents in Foster Wheeler. This will enable us to draw a line under one of the final legacy challenges of the AMIC Foster Wheeler transactions. Looking ahead, short-term headwinds in some markets are expected to endure in 2021, but I'm really encouraged by the evolution of our order book, in line with our strategic positioning, with an increasing proportion from lower-risk, higher-margin consultancy work. As we look to the future, we all recognise the changes affecting our world. We're acutely aware of the impact of COVID-19, a changing energy landscape, a cleaner global agenda and the speed of digitisation. Our common purpose is to unlock solutions to the world's most critical challenges by providing consulting and engineering solutions across energy and the built environment. Today, I'll talk to you about Future Fit, our tactical programme aligned with the purpose and design to accelerate the delivery of our strategic objective to be a premium, differentiated, high margin business that delivers exceptional returns for our stakeholders. Our values of care, commitment and courage continue to guide everything we do, the decisions we make, the results we achieve, and the way people experience working at Wood. In 2020, we demonstrated the benefits of our strategic end market broadening, but there's much more potential for us. Future fit is fundamental to our future prosperity and a key part of our growth story, and I'll be sharing a bit more about it later in the presentation. The fundamental drivers of our strategy and focus across the Future Fit programme have been well trailed, but perhaps worth restating. We started by considering the megatrends of energy transition, sustainable infrastructure and technology and digitisation and its impact on future skills. We then identified the critical challenges facing the world across our own broad energy and built environment markets. To bring all of this together, we illustrate here the interrelationships between the trends, the markets and the solutions we offer. And we've worked diligently to gain an early leadership position in our delivery, where we engineer solutions for a net zero future, including decarbonisation in conventional energy, renewables and low carbon fuel systems. We enable more sustainable and resilient living through our work in remediation and restoration, mobility and transportation. And we create future-ready operating models as we work with customers to optimise asset performance and digital innovation. We've refined our organisational design to deliver these critical solutions by pivoting to an operating model of three service-defined global business units of consulting, projects and operations. Our capabilities span the entire lifecycle from planning through design, build, operate, and repurpose. This new model reinforces our ability in responding to clients' needs by removing internal barriers and complexities, enabling us to grow in markets where we're differentiated by our solutions and capabilities. The clarity and simplicity of our more efficient model underpins our strategic delivery and the next steps of our future FIT programs. I'll cover this more later in the presentation, but now we'll hand over to David to take you through our 2020 financial performance.

Thank you, Robin, and good morning, everyone. Overall, our results reflect the benefits of our successful end market broadening, together with our focus on reducing cost, protecting the balance sheet, and generating strong cash flow. Revenue of $7.6 billion was down 20%. over two-thirds of the reduction was in conventional energy markets, which were very challenging. This was partly offset by strength in the built environment, growth in renewables revenue, which doubled to $520 million, and relatively robust revenue in process and chemicals. We delivered EBITDA of $630 million and operating profit of $214 million. Strong operational delivery in most of our business, together with our ability to leverage our asset-light model, has been key to protecting margins in a difficult environment. We took early and decisive action on cost, improving operational utilisation and reducing overheads by over 230 million in response to lower activity. EBITDA margin was down only 0.3% on 2019. Looking at performance on a like-for-like basis, we delivered very strong margin improvement in two of our three business units. In the Americas, lower revenues largely reflected market conditions in conventional energy, especially in U.S. shale. This was partially offset by relative strength in capital projects in processing chemicals and higher renewables activity in solar and wind. EBITDA margin was significantly down on 2019, due to operational challenges and delayed delivery on a small portfolio of energy projects in our process and energy business. Results in process and energy are 50 million lower than 2019. The delayed projects are expected to complete in the first half of 2021. In EAAA, revenues largely reflected lower activity in conventional energy and in process and chemicals. Despite this, EBITDA was broadly in line with 2019 due to excellent operational execution, good performance from our... The leader has disconnected.

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