Worley Ltd

Good morning, and thank you for standing by. Welcome to the Whirly Full Year 2025 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. I would now like to hand the conference over to your first speaker today, Chief Executive Officer Chris Ashton.

Welcome, everyone, and thanks for joining Worley's full year results for the financial year ending 30 June 2025. I'm really pleased to be presenting these today with Justine Travis, her first results as Worley's CFO. So today I'll share an overview of the business performance over the period and Justine will provide details on our financial results before I conclude with an update on our strategy and our outlook. And then, of course, as usual, we'll be open for questions. Moving on to slide two, just remind you of the disclaimer shown here. And before I begin, I just want to acknowledge the Gadigal people of the Eora Nation as the traditional custodians of the land on which I'm calling from today. We value the strength, determination and resilience of all First Nations peoples and communities around the world and we're committed to the ongoing journey of listening and learning. And I extend that respect to any First Nations people joining us on the webcast today. Moving to slide three, I want to take you through our business performance for the financial year. And so now we'll move on to slide four. Let me start with a few remarks on the environment in which we're operating. There's no doubt that this year has been challenging across all markets and geographies. And I'm super proud of how the Worley team has responded and the support they've provided to our customers through the uncertainty they themselves have faced. We've delivered another strong result. growing revenue, growing earnings, and growing margins in line with our long-term strategy. This is the fourth consecutive year of growth, which is a significant achievement and speaks to the resilience of our business model and the disciplined execution of our strategy. Our competitive strengths, including our diversification, lower risk profile, and strong balance sheet sets us apart from our peers. We're well positioned for growth, And while near-term operating environment remains challenging, the long-term fundamentals of our customers and markets remain positive. And we're ready to capitalize on the growth opportunities that lie ahead. Turning to our performance highlights on slide five. In FY25, our aggregated revenue increased 4% on the prior year. Our underlying EBITDA grew 10%, and our underlying EBITDA margin excluding procurement is 9.2%, which is above our outlook expectations of 8% to 8.5%. Our earnings growth is outpacing revenue, and our cash result is at the top end of our target range, with high cash conversion a consistent feature of our results in recent years. And as you know, we commenced a non-market share buyback in March this year. And this initiative reflects the confidence we have in the company's financial position and growth outlook. The Worley board is determined to pay a final dividend of 25 cents per share, which is unfranked. In FY25, 60% of our revenue was derived from sustainability-related work, an increase from 52% in 24%. And while we've seen a more recent shift in sentiment and investment spend, the strategy we set five years ago has positioned us well to capture this great opportunity. And this capability is now very much embedded into the DNA of our business. I'm pleased with the progress we've made toward our own ESG commitments, and we've maintained leading ESG rating amongst our peers. Our scope one and two emissions have reduced by 73% from our 2020 base, and we will remain on track to meet our own net zero commitments for 2030. Moving on to slide six. Our highest priority is to keep our people safe, feeling included and respected. Our total recordable case frequency rate was 0.13 across the group, reflecting a strong physical health and safety record. And we're supporting our leaders within an operating model which drives performance and growth, and we're preparing them with the development support as we increase AI adoption across the business. I'll come back to our AI readiness when I talk to our strategic priorities later in this presentation. Moving on to slide seven. We continue to see structural shifts globally. Geopolitical tensions, trade and tariff volatility, and other macroeconomic pressures are adding complexity and creating near-term investment uncertainty. However, we have confidence that global demand persists in our end markets with security and affordability and sustainability continue to shape our customer decisions. In this environment, our business model has demonstrated our resilience, building our agility, diversification, improved risk management, and strengthened by our global footprint and scale. Our deep customer relationships result in trusted, long-term partnerships, and our respected industry expertise and quality delivery underpins our success. Financial discipline, one of Wall-E's many strengths, differentiates us from our peers, with a strong balance sheet, good cash generation, and excellent liquidity to fund growth, giving our customers confidence in our ability to deliver. And finally, we're embedding advanced digital initiatives, including AI, into our organization and ensuring we have the right foundations to leverage the opportunities ahead. Moving to slide eight. This slide highlights our diversification, which in the shifting market demonstrates our ability to be agile and adapt to the market, as well as our customers' changing priorities. We've brought in market exposure in many of our peers, and we maintain early move positions in high growth markets. We remain closely aligned with our customers and can support them across their entire portfolio and along the value chain with the agility to do so wherever they're investing their capital. And finally, let me reiterate our focus on risk-adjusted returns and low risk appetite. Over 80% of our work is through reimbursable contracts, and over half of the fixed price work relates to professional services. Importantly, unlike many of our peers, we do not do, and we will not do, material, competitively bid, lump sum, turnkey projects, which bring with it far higher business risk. Moving on to slide nine. We recorded another year of solid bookings. In July, we received full notice received for the first phase of the Global CP2 project. CP2 is a major LNG facility in the US state of Louisiana, and one of the world's largest LNG assets. We're providing engineering, procurement and construction planning services to that project. Including CP2, the total value of bookings has increased 32% since June 30, 2024, to $17.1 billion. The strength of our bookings across energy, chemicals and resources, together with 45% of the work awarded on a sole source basis, demonstrates our strong customer relationships and trusted partnerships, as well as the cost competence customers place in our capability, experience, and expertise, the end-to-end delivery of complex projects. Turning to slide 10. With the final investment decision for CP2 achieved on July 28th, the remaining scope of work for CP2 phase one has now moved from pipeline to backlog. Including CP2, backlog is now 16.9 billion, representing an increase of 22% since June 30, 2024. On a pro forma basis, excluding the cancellation of the $1.6 billion North Pole Sweden battery materials project, which was a buy to the modern earlier in the financial year, backlog has grown 4% in the year from June 30, 2025. Despite the softer market environment, we've not seen project cancellations nor material scope reductions in the second half of the year, and we're maintaining a healthy backlog of work. Moving to slide 11. Our customers continue to take a disciplined approach to investment decisions. Even so, there are pockets of strength and we maintain good visibility of opportunities ahead, with 49% of our work in the pipeline expected to be awarded in the next 12 months. We also see a continuing trend towards investment in traditional and traditional opportunities over the short to medium term. And we remain vigilant in monitoring our customers' decisions, whether this is the potential for any project delays or for opportunities presented by the changing landscape. As we move to slide 12, we'll look at our performance across each of the sectors in which we operate. Our energy sector, which includes oil, gas, power generation, networks, and storage through this year. We saw high levels of activity as projects moved through to execution phase, and we drove margin expansion through productivity gains, improved performance on some of our framework agreements, and benefited from higher margin work flowing through from backlog. In the near term, we expect integrated gas and oil to continue to be areas of significant demand and ongoing activity for us. We also see power for data centers as a key driver for energy. This supports demand across several areas of our capability and expertise, including transmission grids, battery and energy storage, nuclear, conventional, and renewable power generation. Moving to slide 13. Our work within the chemical sector was impacted by lower levels of activity consistent with our expectations given a more subdued market. Petrochemicals will, however, continue to be a driver of oil demand into the future. We see opportunities to offer our expertise in low-carbon fuels, such as sustainable aviation fuel mandates, because sustainable aviation fuel mandates continue to support demand. Chemicals will remain an important market for us, and we're confident about customers' long-term investments in this sector, despite the current challenges. Turning to slide 14. Work in the resource sectors contributed significantly to our result this year, continuing its multi-year growth trajectory. Since 2022, resources revenue has grown an impressive 36% year on year. This year's result was driven by an increase in activity across fertilizers and energy transition material projects, and we expect these subsectors to continue to drive growth in the near term. We've seen strong growth in Latin America and sustained activity across the Middle East, North America, and Europe. Moving to slide 15. I'd like to share some case studies which illustrate the types of work we're delivering. In energy, we're serving the major LNG terminal in Brunsbüttel, Germany. It's a strategically important project reducing Europe's reliance on Russian gas and builds on our phase one work where we delivered a floating storage re-gasification unit in under nine months. The new facility will import LNG from the U.S., highlighting our ability to support the full value chain. In chemicals, we're working with SAVIC Netherlands on a mass recycling unit. and this enables production of certified circular polymers as part of SAVIC's TrueCircle portfolio and reflects the strengths of our long-term relationship. And in resources, we've been appointed lead integration delivery partner to reattend those $2.5 billion lithium carbonate plant in Argentina. And this facility will produce 60,000 tons of battery-grade lithium annually, and our role is to oversee all subcontractors and technology providers. I'm now going to hand over to Justine for further details on our financial results.

Thanks Chris and good morning everyone. After more than a year in the role of Deputy CFO, I'm now very pleased to have started my tenure as Worley CFO, delivering another great result for our shareholders. Four consecutive years of growth in revenue, earnings and margins is a good achievement. While we knew we were facing into a more challenging environment at the beginning of the financial year, the geopolitical environment and unexpected changes in US policy since have created a more uncertain market than anyone could have predicted. Despite this, our business continues to grow and we have delivered in line with our outlook. Our financial performance demonstrates three things. First, we can deliver consistent earnings growth. Second, our long-term focus on margin expansion continues to deliver improved earnings, even in a challenging environment. And third, our capital management is a differentiator and key enabler, and we've maintained this strong position to support growth. Turning to slide 17, our aggregated revenue of $12 billion is up 4% on the prior corresponding period. Over the year we saw an increase in construction and fabrication activity as well as a significant increase in procurement revenue. These were key contributors to this top line growth. This was in line with our expectations and reflects our current mix of projects. We expect this current mix to continue into this financial year with several large in-flight projects in execution phase. This is consistent with our long-term strategy to do more end-to-end project delivery. Bringing this all together and looking at group profit, we've delivered an underlying EBITDA of $823 million, representing 10% growth on the prior corresponding period. Importantly, we have continued our trend of growing earnings at a higher rate than growth in revenue as our focus on margin expansion continues to deliver results Underlying EBITDA margin including procurement increased to 6.8% from 6.5% as at 30 June 2025. Underlying EBITDA margin excluding procurement was 9.2%, up from 7.9% and above our guidance range of 8% to 8.5%. We've made a deliberate shift to higher value solutions leading to an improved rate and margin across all service types. Our underlying MPAT-A for the year is $475 million. This is up 14% on the prior corresponding period and importantly there are no one-off item adjustments in this result. Turning to the next slide, as Chris highlighted Key contributions to our earnings growth in FY25 came from our energy and resources segments and from our work in the Americas and EMEA region. We also saw increased volumes driven by a stronger focus on end-to-end project delivery. As is typical of our half-on-half seasonality, we saw a stronger second half in both revenue and earnings, and we expect similar phasing looking ahead to FY26. The EBITDA margin walks on the right show the main drivers of margin expansion over the financial year. Our progress towards high single-digit margins has been consistently driven by rate improvements over the period. Professional services, construction and fabrication and development have all delivered higher margins. While Project MIX has had a small impact, our strategy remains focused on margin expansion And winning work at higher margins is flowing through from backlog to revenue, and it's supported by a disciplined bidding approach. Strong project assurance through the project lifecycle has also delivered productivity gains and improved performance on framework agreements. This ensures we capture the margins we sell, and of course our result is strengthened by our agility and diversification across markets and geographies. Turning to slide 19, as Chris highlighted, following receipt of the full notice to proceed on Venture Global CP2 Phase 1 project, a backlog now sits at $16.9 billion. Approximately 50% of the $16.9 billion backlog is expected to be delivered in the next 12 months. This is a similar volume to last year. The backlog walk that you can see on the slide shows that despite the challenging market, we've seen no major cancellations over the last six months following the North Vault cancellation that we noted earlier in the financial year. The work in our backlog is well diversified across traditional, transitional and sustainable work and as the charts show, we have a greater proportion of backlog in the Americas and the energy sectors. As Chris has talked to, we remain well positioned to continue to support our customers across sectors, geographies and traditional transitional and sustainable work, which is particularly important in the current environment. Turning to slide 20. Finally, I'd like to take you through our capital management position. You've seen this framework at many of our previous presentations. and it's an important framework which supports the decisions by which we manage capital effectively. It is tightly aligned to our overarching growth strategy, including how we manage risk, and it helps us communicate the decisions we make on how we're allocating capital. The reported cash conversion for the full year was 112.5% of underlying EBITDA, compared with 118% in the prior year. Our normalised cash conversion ratio which accounts for the movements in advance billings between periods was 94.9% compared with 99% from the last year. This result is at the top end of our target range and continues to reflect our strong underlying cash flows over multiple periods as well as our disciplined approach to collecting cash in the business. Our day sales outstanding was 52 days down from 59.3 days at the same time last year, which continues to be below our target range. As Chris mentioned, we commenced our share buyback program in March, reflecting the confidence in our business. We have now purchased over 13 million shares for a total consideration of 168 million. We expect this program to be largely complete by the end of December and this is just one component of a wider strategy to drive value for our shareholders. During the 2025 financial year, we invested $62 million as part of our investment program. This was a mix of capitalised expenditure and OPEX, which is included in our EBIT-A. Further investment will be directed towards activities aligned with our strategic priorities particularly our ongoing investment in digital enablement and AI. Finally, we have been consistently delivering returns to our investors through dividends and we continue to prudently manage our net debt. We are committed to ensuring we deploy capital where it matters most, where it aligns with our strategy and will deliver accretive returns and drive long-term shareholder value. We also remain deliberate in our consideration of these options and we are careful to maintain a strong liquidity position, a key differentiator from some of our competitors. Our balance sheet strength is supported by leverage at 1.4 times, which is reduced from 1.5 times at 30 June 2024. We continue to demonstrate our prudent use of free cash flow to reduce debt, reduce risk and manage liquidity. We balance this with our interest in continuing to provide capacity to invest in business growth. During the year, we received a strong response from global credit investors, raising $400 million through a new seven-year bond, which will mature in 2032. More recently, we completed a private debt placement with one of the UK's largest savings and retirement businesses with a 15-year term. We are committed to maintaining a diversified funding base and we take a proactive approach to managing our debt maturity profile. At the end of the financial year, our weighted average cost of debt was 4.3%. This was down from 4.7% in June last year and we expect this to continue to be in the range of 4.3% to 4.6% for FY26. Our underlying effective tax rate on profit before tax and amortisation of acquired intangibles was 33.4% for FY25, slightly lower than the 33.6% for the prior year. In FY26, we expect this to be in a similar range to prior years, that is 30% to 35%. We are confident that our financial discipline and prudent approach to capital management sets us apart from our peers. and together with that expertise and capability remains an attractive and business-critical attribute for our customers. I'd like to finish by making a further comment about our cost management. Chris highlighted this as a priority at our investor day in May, and we'll talk shortly about an even greater commitment to resetting the cost base. While we have always been focused on cost, our operational restructure has provided an opportunity to take a fresh look at our business, and streamline the work that we do. We are reviewing our overheads and looking to the future with a more efficient, technology-enabled and resilient cost base to support growth over the longer term. I'll now hand back to Chris to take us through outlook for FY26.

Great. Thanks, Justine. Look, just before I take you through the outlook for FY26, I'd like to briefly remind everyone of our strategy and highlight our current priorities. Our strategy is built on three pillars. to strengthen leadership in our core markets, expand into growth markets and along the value chain, and innovate to unlock opportunities and drive, importantly, efficiency into our business. And of course, it's supported by prudent capital management and a focus on excellence in operational performance. And we've maintained our growth momentum through the disciplined execution of our strategy. And I want to take you through our current priorities aligned with our strategy, which will continue to focus our efforts to drive growth. So moving on to slide 23. Our five priorities are focused on driving revenue growth while protecting and improving the quality of our earnings. And of that, our first priority is to increase our full project delivery service offering. As announced in May, our new operation structure positions us to win and deliver our customers' largest and most complex projects while sustaining growth across the base business. And the focus is to build scale and drive greater revenue and earnings growth without changing our risk profile. Our second priority is cost management and Justine outlined just now that we've taken a disciplined approach to managing costs and are committed to resetting the cost base of the organization. We're sharpening controlled overheads, ensuring we have a leaner, streamlined, and importantly, a tech-enabled cost base, preparing us and supporting for our long-term growth. Our third priority is margin growth. This is a continuation of our work to date on margin expansion, targeting higher value work, delivery excellence, and business productivity. The fourth priority is further scaling GID through our centers in India and Bogota, Colombia. GID is now 14.7% of our total hours, and our goal is, over time, to see more than 20% of hours worth delivered through these centers. And finally, we're deploying digital. Wall-E is investing in and using technologies such as generative and energetic AI to reduce manual effort, improving consistency, delivering efficiency, as well as a digitally enabled full project delivery capability. Moving on to slide 24. As we deliver the five priorities I've just talked about, we're transforming the way we work. We're removing legacy complexity, simplifying our organizational structure, and streamlining business processes to improve efficiency and drive consistency. By enhancing our cost discipline and productivity, we'll create a leaner, more efficient, and effective organization. This work prepares us to harness the full potential of AI and digital tools, enabling faster, more agile decision-making. And the outcome is clear. We're building the right foundations for future growth in an environment which demands agility, pace, and a digital focus. Moving on to slide 25. The group outlook. We and our customers continue to navigate current geopolitical uncertainty and shifting market dynamics. Executing our strategy and clearly defined priorities will underpin continued growth. We're focused on continuing to grow our base business while driving more revenue through winning and delivering more large complex projects. Managing costs for a more resilient cost base and transforming the way we work to ensure we have the right foundations for future growth. We remain well positioned with a diversified business model, commercial and financial discipline, a strong balance sheet, and structural macro trends driving demand in our customers' end markets. For FY26, we expect a year of moderate growth and are targeting higher growth in revenue than 25, growth in underlying EBITDA, and expect underlying EBITDA margin, excluding procurement, to be within the range of 9% to 9.5%. Beyond FY26, importantly, I am absolutely encouraged by a stronger growth trajectory emerging supported by the quality of our backlog and pipeline and favorable long-term market trends. Moving on to slide 26. And before we open the call for questions, I'd like to reiterate the significant achievement by our people to deliver another strong result for our shareholders. The resilience of our earnings is underpinned by deliberate actions in the execution of our strategy. And while it's in the context of some near-term complexity, we see the shifting landscape as an opportunity. A robust and resilient business model and strong long-term fundamentals in end markets positions us for well for future growth. So that concludes our formal or the formal part of our presentation. And Justine and I will now answer questions that you may have. So over now to Q&A.

As a reminder, 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. In the interest of time, we ask that you please leave yourself to one question and one follow-up. For any additional questions, you may rejoin the queue. Please stand by while we compile the Q&A roster.

Our first question comes from

Charia Veesan with Bank of America. Your line is open.

Morning, Chris. Morning, Justine. Thanks for taking my question, and congrats on the results. Chris, just diving a bit into your guidance, right? So if I sort of look at the revenue outlook, you call out revenue growth higher than prior, which I'm assuming, you know, you sort of say higher than 4%. So could you just – I'm not trying to get a precise number, but could you just help us think through the quantum of that, you know, which of your end markets you are most positive about and, you know, where you would be a bit cautious? And, again, just on the margin, you know, obviously great numbers this year and also on the guide. So as we think through the margin guide of 9% to 9.5%, What are you bidding in terms of volume, mix and rate if you take the starting point as this year?

Let me answer your first question. So look, if we look at the growth opportunity going forward, one is if we look at our strategy to strengthen, expand and innovate, clearly we're going to focus on the core markets that we've operated in and we've always operated in. But the expansion opportunity also comes as a result of some of our larger projects moving in the delivery phase, but also the fact that we've restructured the business and created a major project and programs business line to capture more of an expanded addressable market. So what we're facing into going forward with the structure we have and the focus on major projects and programs is an ability to get a larger slice of a larger pie. And that's where we see opportunity. Of course, we have our global operators, our base business, and that will continue to focus very much on the work that is traditionally done with our customers. But it's a combination of both that will allow us to drive growth and And I think we've got headroom for that. And clearly, 26 is still uncertain in 26. But, you know, even going into 26, we see growth opportunity. And 27 and beyond, we see the market certainly recovering as sustained demand for our customer approach remains in place. In terms of, you know, the mix, the margin, et cetera, I'm going to hand that one to Justine.

Sure. Thanks, Chris. Look, on the margin, you know, we've certainly guided to being able to maintain a margin between 9% to 9.5%. So this is the EVA margin percentage excluding procurement. You know, we have pleasingly seen increased margins across professional services revenue, across construction, fabrication and procurement. So across all of our service sectors, we've seen that growth. And that's really where we've been focused on pulling that through from our pipeline through to backlog and you've seen that come through the FY25 results. We've also, as Chris outlined, there's a number of growth levers that we've talked about. And they really, a number of those are in service of being able to maintain that margin position. So if we look at the GID utilisation that we've got, we've looked at margin expansion, and we've looked at the cost management, it helps us look at a space that allows us to sustain that sort of 9% to 9.5% range. I think I encourage you certainly to look at the margin growth back over the last not just 12 months, but 24 months, and we've had a lot of success there in the focus that we've taken on that.

That's helpful. Just quickly on that, to think about, say, for next year, would it be fair to say that a story would be quite similar to this year in terms of rates being the major driver, or am I missing something?

Look, I think it will certainly be a combination. We've seen FY25, the rates are the driver of that margin growth that we've seen. I think in FY26, we will see it as a combination of rates and the work that we do on those operational sort of excellence levers that we've outlined. It is a combination that allows us to actually be able to maintain at that level.

Thanks, Chris. Thanks, Christina. I'll cue back in. Thank you.

Thank you. Our next question comes from Ramoon Lazar with Jeffries. Your line is open.

Yeah, good morning, guys. Just a follow-up on Sharia's question. Your overall revenues were up 4%, but non-procurement revenues were down year-on-year. I guess you're guiding for revenue growth to surpass 25. Are you able to give us a bit of an idea of how that looks procurement versus non-procurement revenue growth and you've obviously given the guidance for non-procurement so be handy to get a bit of a guide on procurement versus non-procurement revenue growth.

Yeah, no problem. Look, we certainly have put in the outlook we expect that growth in revenue to be higher in FY26 than we saw in FY25 so the You know, the total pie is greater. I think you can – certainly the professional services revenue will be a similar proportion of that bigger pie to what you've seen in FY25, and you can expect to see a little bit of an uptick in the procurement revenue that we see come through in FY26. And really that – you know, we see that growth overall coming – you know, there's growth coming through the Americas and also Latin America as well.

Yeah, look, I think, Bill, just building on what Justina said, I think we should miss the opportunity to talk about the headroom potential, the growth headroom potential on the major projects and programs. You know, we see an opportunity to grow the business across the major projects and programs market, different than that which we were looking at pursuing in the past. And the reason we've structured on a global basis, because that's what customers want. Customers want us to be able to deliver consistently across a global portfolio of their projects. And we believe that's going to give us a headroom for growth. And it's a combination of that, as well as the levers, the other levers that Justine has talked about, that gives me confidence that we can still grow in 26. And I think it's important to recognize we're still saying we're going to grow in 2026. And in 2027 beyond, we see continued growth opportunity in the business. I think we've grown for four years, 17% CAGR. Phenomenal outcome, I think, driven by the great work that the teams have done around the world. Still projecting to grow in 26 and projecting to grow in 27 and beyond, given the long-term trends of our customers and markets.

Okay, thank you. And just to follow up, maybe Justin can take this one. The global support costs, Phil, sharply in the second half. I think they were down 23% year-on-year. Maybe if you could talk around that and then should we annualise that into 26 as a starting point for those support costs just there?

Look, we certainly, and I think we flagged at the half year that we did expect the second half, those costs to come down in the second half. So that's really delivering on what we said we would do I think it would be fair to say as we look at these programs of work as we go into FY26 that we could, you know, take a similar position in FY26 around that global support cost.

Okay, great. Thank you.

Thank you. Our next question is from John Pertell with Macquarie. Your line is open.

Good morning, Chris and Justine. Hope you're well. Just had two questions, please. Chris, if you can provide a favour of your latest conversations with customers. I mean, I suppose we're pleasantly surprised that you're not seeing material cancellations or scope reductions despite the impact of tariffs.

Yeah, look, so it varies by sector. Chemicals, you know, I would say the chemical CEOs I'm talking to are struggling with the markets they're in, John.

Yeah.

But on the resource and energy side, they're making long-term decisions through cycle decisions. And, yeah, look, they're a little bit maybe unnerved by the tariffs and they're working their way through that. But most of them believe that the tariff uncertainty will come to an end by the end of the year with the major global trading partners. And so they're still – what I'm seeing is from the low – Earlier in the calendar year, the low in confidence was coming out of that and seeing confidence begin to shift in the positive around investment. That's both on the resource side and on the energy side.

Thank you. And the second question. Chris, if you can provide some further colour in terms of the outlook by key regions. I mean, back at Invest Today, you were quite positive on LATAM, you know, the Middle East and North America. You know, how has that sort of maybe progressed?

Latin America's still strong. Canada's strong. Middle East's strong. North Africa, good. Europe, you know, Europe is a struggle for our customers. just the environment within Europe, the regulatory environment within Europe. But the markets that we talked about in the investor day in half Europe, Canada, Latin America, Middle East, North Africa, continue to see significant investment. For example, in Saudi, pushing for investment in gas, as an example. In Latin America, it tends to be the lithium and the some of the battery materials, battery-related materials investment, but seeing strong sentiment in the region still. And, you know, and I'll say under the current administration in the US, I think the way I've described it earlier in the year was a net positive. I still think that it's a net positive. Yeah, look, the trade, the tariffs and some of the policy decisions or policy directions or policy statements being made give people the gist, but I continue to see that the US position is a net positive for Wall-E. If you look, I'll give you one example. An RNG project got further approval earlier this week or late last week. And the pace at which that got approval vis-à-vis CP2, I think is an indication of where the administration is going in terms of stimulating getting energy investment momentum building. So I'll say he's in a positive drum.

Thank you.

Thank you. Our next question comes from Rohan Sundaram with MSC Financial. Your line is open.

Thank you. Hi, Chris, Justine and team. Just one from me. Curious as to the Exxon decision to FID the Baytown project, can you please just remind us what's Worley's involvement there and how does that impact backlog or what's the status of that project from a Worley perspective? Thank you.

Yes, so we're the EPC on that project. Project's full steam ahead. We continue to live the end dream. We still continue to work on the procurement activities. And, you know, I know there was an article recently or earlier in the – maybe a month or six weeks ago on Baytown Blue. But, look, the project status from our perspective hasn't changed. We've still got a team on it. We're still progressing it in line with plan. We're still progressing not just engineering but also other activities related to the project going ahead. We're not seeing any slowdown.

Thanks, Chris. That's all good. Is it in backlog currently or still in – it sounds like it's in the backlog.

There is certainly some in the backlog.

In the backlog, yes.

Thank you. Thank you. Our next question comes from Gord Ramsey with RBC Capital Markets. Your line is open.

Thank you very much. Great EBITDA margin above guidance, and I just want to kind of come back to this. your professional service revenue declined 9% in FY25 due to project mix, but you were able to increase margins across all services. Traditionally, professional services has the highest margins. I'm just really keen to get some more detail about how you're preserving that margin through the other parts of your business.

Yeah, we've seen, I mean, we've seen margin growth, you're right, in construction and fabrication and and procurement margin really given work the team has done over the last 24 months and that pulling through. We've been able to, with professional services, we saw some lower volumes come through in the second half and that was driven, really there was some coming through in APAC specifically, but it was offset by activity elsewhere, so where we had increased activity in the Middle East and growth there as well. So overall we've really seen a strength that's now pulled through for the full year from a margin position and it really is driven by the rate improvement. You have a small impact of course. We talked about the global costs just before and we noted that they had decreased in the second half as we'd expected and so you'll see some impact from that cost coming through the margin but really rate driven.

Okay, and my other question is financial one relates to cash conversion ratio. Congratulations, you know, being at the top end of your guided range again in FY25 and you exceeded it in FY24. Your target range for 26 is 85% to 95%. Can we expect that to be towards the top end of that range again in FY26?

It will be between 85% and 95%. Thanks, Chris. Good try, 85% and 95%.

Thanks. Okay, thank you.

Thank you. Our next question comes from Nathan Riley with UBS. Your line is open.

Hi, Chris and Justine. I had a question just around CP2 LNG, specifically around phases two and three. Can you just update us on your involvement in the engineering of those two phases of the project? And I was also curious just to understand how you positioned to support delivery on those phases, if and when they did FIDM.

So, Phase 2 engineering is underway. And, you know, look, I expect with Phase 1, as with Phase 1, we'll roll into Phase 2 EPCs. But, you know, it's a different set of financiers for Phase 2. And so the timing of that is the only thing that's in question. I think in VG's release earlier this month, they talked about the January FID for Phase 2. But we'll continue to support them the way that we have on Phase 1, Nathan. Thank you. Sorry, Nathan, then on Phase 3, no, we've not started anything on Phase 3 for them.

Okay, understood. And then maybe taking a step back away from CP2 LNG, just maybe give us an idea of how you think prospects for additional LNG projects have kind of firmed up in your thinking in terms of pipeline

So we're working on different phases, early phases of about another five LNG facilities, one of which got FERC approval. Again, I can't remember if it's early this week or late last week, but the Alaska LNG project got FERC approval. And so that, I mean, you know, FERC approval is, you know, kind of game on. the LNG market for us continues to present pretty good opportunity, but they're in different phases. But I'm very excited about Glen Fawn's Alaska LNG project.

I think, Nathan, certainly it is one of the growth areas that Chris talked about where we think about that revenue growth and how we've been able to increase the aperture of the market available. You know, there's certainly some earlier stage work that we're doing for other LNG projects as well, and as Chris noted, they're at various phases at this point, so we are doing work on, you know, feed on a number of other projects as well.

Look, I think... Thank you. What I would just say more broadly about LNG demand, there's no doubt that gas is going to be prevalent in the... more prevalent in the energy mix going forward And if you look at security of supply, the US as a source of that supply is going to be there. And we're working on, I think, another five LNG opportunities at different phases. And I just think that LNG, integrated gas, is one of those areas that provide us opportunity for growth under the new structure. is an incredible project for Venture Global and I think the way they are delivering that project, it's going to be a pacesetter and we're their partner on that pacesetter project and that positions us well for future opportunities in the integrated gas space.

Thanks, Matt. And finally, just an update on, you know, the outlook for the DAC. Direct Air Capture Project POT1 that you're partnering with Oxyon?

Yeah, it's gone great. So, you know, we're over West Texas. The project there, you know, I'm going to call it Phase 1 and Phase 2. So we're into Phase 2. That's going well. If you look at Trump's big, beautiful bill, if you look at what CF2 – for sequestration or for use in downstream production. Prior to the Big Beautiful Bill Act, I think for sequestration, CO2 was getting like $30 a ton under the Big Beautiful Bill Act, I think up to $180. So, you know, the validity or the financial sort of attractiveness and continue to invest in that in the CO2 space is there. And obviously, Oxy is the leader. So we're well into just finished phase one, well into phase two. And I think Oxy's results are when they went to the market. maybe a few weeks ago, they talked about the South Texas DAC Hub still having a commitment from their side. So we're well positioned on that. And that's something that we would put under and is under the major projects and programs because obviously you want global consistency or delivery consistency in the learnings transferred from one project to the second to the third. So, yeah, all good on DAC.

Thanks very much.

Thank you. Our next question comes from Megan Kirby-Lewis with Baron Joey. Your line is open.

Thank you. Morning, guys. My first question, just on the focus of the full project delivery and your comment, Chris, without taking on any additional risk, Just came to get a comment, I guess, on the competitive landscape that gives you confidence in that strategy. And I guess just the willingness of your customers to use you as a competitor who are perhaps willing to take on more risk. Thanks.

Yeah. Well, it varies by sector. It varies by customer. It varies by geography. But if you look at our big customers in the resource sector, so the classics of the BHPs or the Rios or on the energy side, BP, Shell, Chevron, ExxonMobil, They don't do competitive middle and some term QPC typically. And if you look at why are we attractive and why do I think we can beat our competitors out? Well, first of all, you look at our financial strength and our balance sheet and therefore their confidence in being able to see a project through. I think that's not an item or an aspect to be underestimated. But also, you know, we've got deep relationships with our major customers. And, you know, we have done, you know, 46% of our work is sourced. That's an incredible amount of opportunities that we get without competitively bid. And also, you know, we've got our consulting group getting in with our customers and working early positions just for the follow-through and the EPC. And, look, the reality is, Megan, you know, and we've talked about this before, the competitive intensity in our space is not that high. It is very different to what it was five years ago, ten years ago. And if you look at even the competitors today in name, we've got two of them who have been suspended from trading for a number of months. We have one in the US that went into Chapter 11 and came out of Chapter 11. And so, you know, the competitive intensity in the markets we face into is lends itself to an opportunity where if you've got strong balance sheets, you've got competency in terms of your offering, that presents opportunity. And from a risk profile point of view, the reason a number of our competitors are challenged is because they've taken on lump sum turnkey PC risk. and, you know, have been challenged or suffered because of that. We have not done lump sum turnkey EPC. We do not do lump sum turnkey EPC, and we will not do lump sum turnkey EPC.

Very clear. Thank you. Then just a couple of quick ones for Justine. Just noting the absence of the FX chart, this results despite some pretty big swings. So just if there's anything to call out on the EBITDA impact from FX in the second half?

Not specifically, Megan. I think, you know, we certainly, you know, as a multi-jurisdictional company, we really just look to manage that FX exposure across the portfolio. We look pretty carefully around, you know, and work with our treasury team around project delivery, where we need to hedge FX and make those decisions. So I didn't have anything specifically to call out really on the FX performance. for just really something that we're managing across our portfolio.

Yeah. Great. And then just on your comment earlier, Justine, just read the little uptick in procurement revenue. Just to be clear, did you mean as a proportion of total revenue or were you talking on an absolute basis?

I think we'll see it both as a... I think on an absolute basis, you'll see an uptick in procurement revenue in FY26. And you'll see that percentage increase slightly as a proportion of total aggregated revenue as we go into FY26. And that's certainly driven just really by the mix of some of the projects that we're pursuing at this point in time.

Great. Thank you.

Thank you. Our next question comes from Neeraj Shah with Goldman Sachs. Your line is open.

Good morning. I just had a question, I guess, on the medium-term margin profile for the business. I mean, nine to nine and a half at a challenging point in this cycle with, you know, competitive intensity being benign, overhead review, and I guess more upside in GID as well. How should we be thinking about sort of medium-term margins for the business?

Well, you know, we've said that, you know, we thought we would get to to low double-digit in the medium longer term. And beyond that, clearly, it would be seen as a profit margin that could possibly attract a different level of competition. But we've said we think we can get back to the low double-digit, which we were a number of years, many years ago, but we did get to that point then. The difference being is This would be a risk-adjusted return that we'd be delivering in the past. It were, I would call it a raw return. And then a number of years later, the risk associate with the project that we're delivering that level of profit came back and hit the business. And, you know, the way we identify risk, mitigate risk, you know, sort of, quantify the risk from a financial point of view and maybe providing contingency, et cetera. Very, very different today. So, you know, we believe we can get to high single digit, low double digit in the medium term. And I think, you know, hitting 9.2 today and look at the mix of procurement and professional services, guiding the 9.5. I think it's a great sort of guidance range. in 26. And beyond 27, beyond what the leaders were pulling and our strategy of strength and expand and innovate, I think beyond that, I think there's further opportunity and further headroom. Understood. Thank you.

Thank you. Our next question comes from Nicole Penny with Remore Equity Research. Your line is open.

Good morning, and thank you for taking my question. And apologies if these questions have been asked. On slide 19, you note $3 billion of next scope increases helping replenish backlogs. Could you please give us some more color on which sectors and customers that's related to and perhaps what types of scope increases these were, please? And then further on slide 19, you noted no major cancellations over the last six months. While perhaps immaterial to Woolley, would you expand on any customers or areas you are seeing some cancellations? and whether you've noted any change in the statement up to this point. Thank you.

I'm going to answer the second one, let Justine answer the first one. Like I said, I'm not aware of any major cancellations. Yeah, I mean, is the minor changes have slipped to the right on small stuff? Yeah, there always is, you know, but there's none that have been brought to my attention as CEOs being material, yeah? But look, on the smaller side, look, customers are always, you know, changing a scope, expanding it, reducing it, starting it early. So that's the normal course of business. But I'm not aware of any material defros or cancellations.

And on the net scope increases, I mean, certainly, you know, given our customer base and where we've got a number of long-term relationships, you know, we're seeing some of these projects as they move through that there is expansion in scope there that comes through the backlogs. that we've got, so we've had very strong scope of work in the Middle East, as Chris pointed to, certainly in our joint venture partnership with Jessa in Morocco is where we also see really strong project scope coming through. So that's probably, I'm not going to point to specific customer base, but that's where you're seeing that uptick in the net scope increases. Thank you.

Okay, look, we've got time maybe for one more question, and then we'll leave to bring it up.

I won't be able to get my follow-up down.

Thank you. Ramun Lazar? Ah, yeah. Gerard Weiner?

Yeah. Yeah, thank you. Just a very quick one. On the first half, second half, if you could maybe touch on that, given the phasing of CP2 in the fourth quarter.

I mean, the phasing we're saying is typical of that we've seen in the past. We've always got a first half, second half difference with the second half having a heavier weighting. That's just a function of northern hemisphere. Summer, vacations, taking time down. So we're not seeing a material shift in phasing or a shift in phasing materially different to that in 2025.

Okay, great. Thank you.

All right, well, look, thanks, everyone, for joining the call today and your engaging Q&A and obviously the continued support. I believe it's a great result for the organization. We're in a great position to build on the foundation that's in place and grow business going forward. And just, look, thanks again for your continued support. And I'll meet with many of you in the next sort of few days, this week in Sydney, Monday, Tuesday in Melbourne. and any questions outside of those means you have, certainly feel free to contact Kylie Ramsden, Investor Relations, and we'll support you as best we can. But thanks again, everyone. Appreciate your time. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect.