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Vision 2015 Assured growth. Bank of America Merrill Lynch, London 4 December 2009. Important information.

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slide1

Vision 2015Assured growth

Bank of America Merrill Lynch, London

4 December 2009

important information
Important information

Certain statements in this presentation are forward looking statements. By their nature, forward looking statements involve a number of risks, uncertainties or assumptions that could cause actual results or events to differ materially from those expressed or implied by the forward looking statements. These risks, uncertainties or assumptions could adversely affect the outcome and financial effects of the plans and events described herein. Forward looking statements contained in this presentation regarding past trends or activities should not be taken as representation that such trends or activities will continue in the future. You should not place undue reliance on forward looking statements, which apply only as of the date of this presentation.

This presentation does not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to purchase any shares in the Company, nor shall it or any part of it or the fact of its distribution form the basis of, or be relied on in connection with, any contract or commitment or investment decisions relating thereto, nor does it constitute a recommendation regarding the shares of the Company.

Past performance cannot be relied upon as a guide to future performance.

samir brikho chief executive
Draft 11 2 December 2009Draft 10 1 December 2009Draft 9 30 November 2009Draft 2

Samir Brikho, Chief Executive

Vision 2015Assured growth

Draft 10 1 December 2009Draft 9 30 November 2009Draft 2

Draft 9 30 November 2009Draft 2

slide4

Today’s presentations

10:30 Vision 2015 overview Samir Brikho

10:50 Natural Resources Neil Bruce

11:10 Power and Process Neil Bruce

11:30 Earth and Environmental Roger Jinks

11:45 Financials Ian McHoul

11:55 Summary Samir Brikho

12:00 Q&A All

13:00 Lunch

14:00 Event ends

agenda
Agenda
  • What have we achieved so far?
  • What is our new goal?
  • How will we get there?
what have we achieved so far
What have we achieved so far?

Platform for assured growth

  • CultureUNIFIED
  • Employees FOCUSED
  • Customer relationships ENHANCED
  • Cost baseREDUCED
  • Balance sheet STRONG
  • Financial performanceSTRENGTHENED
  • Competitive position ADVANCED
our track record of success

Firmly on track to deliver 2010 margin target of 8.5%

Our track record of success

EBITA margin

2006-2009 (%)

Revenues

2006-2009 (£m)

Diluted EPS*

2006-2009 (p)

Margin doubled

8% cagr#

41% cagr#

  • Focus has been on margin improvement

* Diluted earnings per share from continuing operations before intangible amortisation and exceptional items; ** Market consensus as at 3 Dec 2009;

# Compound average growth rate 2006-2009

our vision
Our vision

To be the leading supplier of high-valueconsultancy, engineering and project management services to the world’s natural resources, nuclear, clean energy, waterand environmental sectors

vision 2015 goal assured growth
Vision 2015 goal Assured growth

Increased focus on growth with further margin improvement

>100p

EPS*

  • More efficient capital structure
  • Increased acquisitions
  • Shareholder distributions

Capital structure

  • Enhancing our capabilities
  • Enhancing our geographic footprint
  • Integrated approach

Focus on growth

  • Strengthening our people
  • Harmonising tools and processes

Employees

  • * Diluted EPS 2015
strengthening our people

Making the best even better

Strengthening our people
  • Recruitingtalented people
  • Investing in education and training
  • Providing career development
  • Harmonisingtools and processes
enhancing our capabilities

Improving and extending our services offering

Enhancing our capabilities

Natural Resources

Power and Process

  • Deepwater/complex upstream projects
  • Asset support
  • Duty holder
  • Subsea engineering (SURF)
  • Pipeline engineering
  • Underground mining
  • Nuclear
  • Transmission and distribution
  • Renewable energy

Earth and Environmental

  • Environmental consultancy
  • Water

Blue text denotes new area of focus

enhancing our geographic footprint
Enhancing our geographic footprint

Current locations

Investment focus

Selective expansion in targeted regions

  • Up-sizing in selected regions
    • Australasia
    • Latin America
    • Middle East
  • Continued growth in Africa, Europe and North America
integrated approach to growth

Unparalleled services offering

Integrated approach to growth
  • New capital projects increasingly large and complex
  • Growth in environmental and community issues
  • AMEC has an unparalleled services offering:
    • Cross-divisional approach
    • Synergies
    • Strategic customer management

Power and Process

Natural Resources

Changing customer requirements

Earth and Environmental

managing assured growth

New organisation for integrated approach

Managing assured growth

Operational leadership team

Samir Brikho

Chief Executive

  • New organisational structure for Vision 2015 reflects:
    • Changes in end market focus
    • Customer needs
    • Integrated approach

Neil Bruce

Roger Jinks

  • Natural Resources
  • Power and Process
  • Earth and Environmental
vision 2015 natural resources division

Vision 2015Natural Resources division

Neil Bruce, Executive Director,

Chief Operating Officer, Natural Resources

natural resources overview
Natural Resources Overview

Strong and growing business

  • Leading positions in long-term growth markets
  • Customer focused organisation, with major customers including
    • Shell, ExxonMobil, BP, Chevron, BG, ConocoPhillips, Inpex, PotashCorp, Teck
  • High proportion of revenues from IOCsand mining majors
  • c.10,000 employees
  • Broad geographic footprint
  • Balanced portfolio of Capex / Opex
  • Strong financial performance

Revenue split 2009e

natural resources strong financial performance
Natural Resources Strong financial performance

Sector leading margins

  • End market strength coupled with internal initiatives have enhanced performance
  • Margin increases in both Capex and Opex
  • Strategic positioning on the conceptual / front end of projects

* Market consensus as at 3 December 2009

** Excluding lump sum fabrication revenues of £103 million

natural resources key market segments

Existing area of focus

Key area of market growth

New area of focus

(+)

û

No AMEC position

Natural Resources Key market segments

Underground Mining (+)

Onshore Production

Surface Mining

Mineable Oil Sands

û

û

Floating Production Systems

Fixed Production Platform

û

GTL/LNG/ Refineries

Insitu Leaching

Insitu Oil Sands

Land Rigs

DrillingRigs

Seismic

SURF (+)

û

Well Services

Oil and Gas

Oil Sands

Mining

natural resources customers

Power and Process

Natural Resources

Earth and Environmental

Natural ResourcesCustomers

Increasingly recognised as the supplier of choice

natural resources positioned for growth
Natural Resources Positioned for growth

c.8-12% of TIC**

Estimate* of industry downturn

AMEC wins significant number of awards in 2008/9

Phase II:

  • Consulting
  • Detailed Design
  • Engineering
  • Construction Management
  • Procurement

c.1% of TIC**

40% delayed or part-delayed

Phase I:

  • Concept
  • Front-end
  • BP: Clair Ridge
  • BP: Tubular Bells
  • BP: Kodiac
  • Exxon: Kizomba
  • Chevron: SMADS
  • Inpex: Ichthys
  • Shell: Malikai
  • Petrobras/QUIP: P63

60% to start

2012

2008

2009

2010

2011

* Source AMEC

** TIC: Total Investment Cost

natural resources what do customers want
Natural Resources What do customers want?
  • The best engineers and project managers
    • Investment in people and processes
  • Ability to handle large and increasingly complex projects
  • Safe and sustainable track record of delivery
  • Local delivery
  • Financial strength

High value front-end services:

Customers increasingly focused on high value

natural resources market trends
Natural Resources Market trends
  • Major deepwater/complex projects have suffered delays in 2008/9 but are expected to move into investment approval
  • Aging infrastructure
    • Maximising recovery from depleting reserves
  • Resources more difficult to extract
    • Deepwater, Arctic, Oil Sands, Underground Mining
  • Increasing environmental pressures
  • New projects increasingly large and complex

Differentiation versus commoditisation

natural resources key growth opportunities

AMEC to benefit from growth opportunities

Natural ResourcesKey growth opportunities
  • Deepwater / complex upstream developments
    • Africa, Brazil, SE Asia, Arctic, Caspian
  • Opex investment on aging assets
    • Brownfield services
    • Complex de-bottlenecking
    • Duty holder
  • SURF segment
    • Deepwater and tie-backs
  • Pipelines
    • Onshore and offshore engineering
  • Mining
    • Underground mining
    • Continued geographical expansion
natural resources summary
Natural Resources Summary

Well positioned in the right markets

Strong relationships with the right customers

Focused investment in “hot” markets

Deepwater/complex projects

OPEX/Brownfield projects

Pipelines engineering

Subsea engineering

Continued geographic expansion

Strong and growing business

vision 2015 power and process division

Vision 2015Power and Process division

Neil Bruce, Executive Director,

Chief Operating Officer, Power and Process

power and process overview
Power and Process Overview

Well positioned for profitable growth

  • Leading positions in long-term growth markets
  • Major customers include EDF; National Grid; Southern Company; UK NDA
  • c.7,000 employees
  • UK/North American focus of operations
  • Balanced portfolio of Capex/Opex
  • Strategic refocusing near complete
power and process performance improvement
Power and Process Performance improvement

Focus on higher value activities with lower risk

2009 revenue decline partly reflects exit from non-strategic activities

Legacy contracts progressing to completion as expected

Financial performance improving but yet to fully reflect change of focus

Margin doubled since 2006

* Market consensus as at 3 December 2009

power and process change of market focus
Power and Process Change of market focus

Increasing focus on new energy challenge

power and process risk profile improving
Power and Process Risk profile improving

Continued focus on higher added value activities with lower risk

  • Continued emphasis on higher value services
    • Consultancy, Engineering and Project / Programme Management
  • Some lump sum activities with lower risk
    • Selective approach
    • c.10% of revenues
    • No lump-sum turnkey
  • Growth in EPC activity
    • Disciplined approach
    • Significant growth in reimbursable activity
power and process key market segments
Power and ProcessKey market segments

Existing area of focus

Key area of market growth

New area of focus

(+)

û

No AMEC position

Biofuels

Biomass

OnshoreWind

Solar

OffshoreWind

û

Smart Grids (+)

Hydrogen Processing

Gas storage

Gas T&D

Nuclear

ElectricityT&D

Conventional Power

CCS (+)

power and process market trends
Power and Process Market trends

Energy and Power

Increasing demand for energy

Changing mix

Nuclear renaissance

Climate change issues

Environmental targets and legislation driving clean technologies

Large growth in investment in “clean energy”

Growing need for security of supply

Transmission & Distribution

Continued refurbishment due to historical under-investment

Growth in renewable energy sources requiring grid connection

Smart grids

Strong market drivers for low carbon technologies

power and process customers
Power and Process Customers

Power and Process

Natural Resources

Sellafield Ltd

Earth and Environmental

power and process what do customers want
Power and Process What do customers want?
  • Best in class engineering and project management
    • Best people
    • Innovative and high value added solutions
  • Alliancing and partnering
    • Large and increasingly complex projects
  • Safe and sustainable track record of delivery
  • Cost competitive offering
  • Strong balance sheet

Creating stakeholder value

power and process summary
Power and Process Summary
  • Well positioned in the right markets
  • Strong relationships with the right customers
  • Strengthening the portfolio
    • Smart grids
    • CCS
  • Continued focus on higher added value activities with lower risk

Well positioned for profitable growth

vision 2015 earth and environmental division

Vision 2015Earth and Environmental division

Roger Jinks,

Chief Operating Officer, Earth and Environmental

earth and environmental
Earth and Environmental
  • High value consultancy and program management services
  • Strong growth record
  • c.4,500 employees
  • North American focus of operations
  • Well diversified portfolio of services
  • Major customers include CSX; Suncor; ExxonMobil; US Army/Air Force/Navy
  • Cross-AMEC synergies
  • Significant growth opportunities

One of the world’s leading environmental and engineering consulting organisations

earth and environmental financial performance
Earth and EnvironmentalFinancial performance

Strong track record of growth

  • Performance reflects quasi-organic growth business model
    • 18% CAGR 2006-2009
  • Industry predominantly North American
  • Increased efficiencies through internal initiatives

* Market consensus as at 3 December 2009

slide38

Earth and Environmental

Key market segments/services

earth and environmental customers
Earth and EnvironmentalCustomers

Power and Process

Natural Resources

Earth and Environmental

earth and environmental what do our customers want
Earth and EnvironmentalWhat do our customers want?
  • High added value
  • Best people, smart solutions
  • Global expertise, delivered locally
  • Regulatory approvals/integrated approach

High percentage of repeat business

earth and environmental market trends
Earth and EnvironmentalMarket trends

Growth and enforcement of environmental legislation

Increasing corporate social responsibility

High growth for water resource management and air pollution control

Increasing investment in aging infrastructure

Increasing use of brownfield sites and exploration of environmentally sensitive regions

Highly fragmented market provides continuing opportunities for acquisitions

Increasing opportunities from

regulatory approvals/community relations

earth and environmental long term growth market
Earth and Environmental Long-term growth market

Significant opportunities for growth

  • Long-established North American market
    • 8% long-term growth in US total market*
  • Higher growth European and other international markets
  • Highly fragmented industry
    • Strong track record of successful acquisitions
    • Significant future opportunities

* Source: EFCG, 2009

earth and environmental key growth opportunities
Earth and Environmental Key growth opportunities

Water

Water supply; water quality; ground and surface water

Renewables

Climate change services; renewable energy; energy management

Global growth

Europe

Australasia

South America

Africa

Continued focus on multinational clients

earth and environmental assured growth
Earth and Environmental Assured growth

Recruiting and retaining the right people

Continued development of seller-doer business model

Sourcing and integrating acquisitions

Scaling up of decentralised business model

ian mchoul chief financial officer
Draft 11 2 December 2009Draft 10 1 December 2009Draft 9 30 November 2009Draft 2

Ian McHoul, Chief Financial Officer

Vision 2015Financials

Draft 10 1 December 2009Draft 9 30 November 2009Draft 2

Draft 9 30 November 2009Draft 2

balance sheet
Balance sheet

£ million

30 Jun 2009

Intangible assets 400

  • Tangible fixed assets -

Working capital (net) -

Pension assets (net) 100

Provisions (200)

300

  • Cash 700

Shareholders’ funds 1,000

  • People business
  • Minimal tangible assets
  • Strong cash position

Asset light; strong balance sheet

cash flow
Cash flow
  • Expect higher cash conversion from profit
    • Potential gap for investment in expansionary working capital
  • Significant volatility over past 2.5 years
    • Expect the “gap” to reduce significantly
  • H2 cash flow typically stronger than H1
  • Significant improvement expected in 2009 cash conversion

Increased focus on cash conversion

  • * Before amortisation and exceptional items
  • ** Before capital transactions
cash conversion surplus shortfall to profit
Cash conversion Surplus/shortfall to profit

£ million

FY2008

FY2007

H12009

Client advances repaid (4) (20) (5)

Working capital 72 (63) (21)

Pension payments* (31) (32) (3)

  • Tax** (6) (10) (24)

Surplus/(shortfall)31 (125) (53)

  • Client advances are now small (c.£15 million at 30 June 2009)
  • Working capital movements can be “lumpy”, and are typically more favourable in the second half
  • Pension payments* are reducing significantly
  • Tax payments are first half biased

Expect the shortfall to reduce significantly

* In excess of amounts recognised in the income statement

** Excess of tax paid over tax charges

reaching our 2015 goal
Reaching our 2015 goal

Margin

improvement

Revenue growth

>100p

EPS*

Cash

investment

Tax

efficiencies

* Diluted EPS 2015

vision 2015 planning assumptions

Projections not dependent on a buoyant market

Vision 2015 Planning assumptions
  • Projections assume “mid cycle” market
    • Gradual improvement to “neutral” market conditions
    • No return to buoyancy
  • Oil price stability
  • 2010 market to remain challenging
    • Firmly on track to deliver 2010 margin target of 8.5%
more efficient capital structure

Maximising shareholder returns

More efficient capital structure
  • Focus on cash flow remains strong
  • Intention to increase level of investment
  • Acquisitions most attractive
  • Shareholder distributions
acquisitions

Expect to increase level of investment

Acquisitions
  • Strong track record
    • “Bolt-on” transactions
  • ROIC > WACC in year one or two
  • Significant opportunities
    • “Bolt-on” targets
    • Larger targets
shareholder distributions

Do not expect “additional distributions” in 2010

Shareholder distributions
  • Half-yearly dividends
    • Progressive policy
    • Satisfied with existing cover
  • “Additional distributions” possible
    • Dependent on outlook for acquisitions – need to retain flexibility
    • No near-term plans
reaching our 2015 goal54
Reaching our 2015 goal

More gradual than historic levels2

Assured growth

Margin

improvement

Revenue growth

Ahead of historic levels1

>100p

EPS3

Focus on acquisitions

Proactive planning

Cash

investment

Tax

efficiencies

1 8% CAGR 2006 to 2009 (consensus)

2 2006 to 2009 (target)

3 Diluted EPS 2015

samir brikho chief executive55
Draft 10 1 December 2009Draft 9 30 November 2009Draft 2

Samir Brikho, Chief Executive

Vision 2015Assured growth

Draft 9 30 November 2009Draft 2

vision 2015 goal assured growth56
Vision 2015 goal Assured growth

Increased focus on growth with further margin improvement

>100p

EPS*

  • More efficient capital structure
  • Increased acquisitions
  • Shareholder distributions

Capital structure

  • Enhancing our capabilities
  • Enhancing our geographic footprint
  • Integrated approach

Focus on growth

  • Strengthening our people
  • Harmonising tools and processes

Employees

  • * Diluted EPS 2015
amec plc vision 2015

AMEC plcVision 2015

Supplementary information

cash conversion
Cash conversion*

Profit** (£m)

FY2008

FY2007

H12009

PBT 126 207 93

  • Tax (32) (63) (25)

Discontinued (4) 1 (1)

Profit90 145 67

Cash generated from operations 140 69 60

  • Interest paid (4) (8) (1)
  • Interest received 23 32 4
  • Tax paid (38) (73) (49)

121 20 14

Difference 31 (125) (53)

Cash*** (£m)

* All numbers from published statutory accounts

** Before amortisation and exceptional items

*** Before capital transactions

natural resources the competitive landscape
Natural Resources The competitive landscape

Major Player

AMEC

AMEC

Schlumberger

Schlumberger

AkerKvaerner

AkerKvaerner

Wood Group

Wood Group

Petrofac

Petrofac

KBR

Capability

Exploration & Drilling

Exploration & Drilling

Facilities/Jacket

Facilities/Jacket

Hulls/Mooring

Hulls/Mooring

Offshore Eng.

Subsea

Subsea

Pipelines

Pipelines

Upstream

Project Management

Project Management

Onshore facilities engineering

Onshore facilities engineering

Maintenance,

Maintenance,

mods

mods

, operations

, operations

Oil Sands

Oil Sands

-

-

Upstream

Upstream

Oil Sands

Oil Sands

-

-

Downstream

Downstream

Pipelines

Pipelines

-

-

Engineering

Engineering

Refineries

Refineries

-

-

Engineering

Engineering

Downstream

Petrochemical plants

Petrochemical plants

-

-

Eng.

Eng.

Gas Processing

Gas Processing

Maintenance,

Maintenance,

mods

mods

, operations

, operations

power and process the competitive landscape
Power and Process The competitive landscape

Transmission and Distribution

Nuclear

Reactor Support

  • Jacobs
  • AECL
  • Doosan Babcock

Waste Management

  • Serco
  • Bechtel
  • CH2MHILL

New Build

  • Babcock
  • AECL
  • CH2MHILL

(UK and Europe)

  • Acciona
  • Balfour Beatty
  • Babcock Networks
  • Poyry
  • PB Power

(Americas)

  • Balfour Beatty
  • Black and Veatch
  • Bechtel
  • Burns and McDonnell
  • Hawkeye
  • SNC Lavalin

EPC Services (all power sectors)

Design Services (all power sectors)

Design Services (Europe)

  • Burmeister and Vein
  • Fichtner
  • Mott McDonald
  • Poyry
  • PB Power

Design Services (Americas)

  • Bechtel
  • Burns and McDonnell
  • Black & Veatch
  • Sargent & Lundy
  • Shaw Group
  • SNC Lavalin

EPC (Europe)

  • Acciona
  • Babcock Group
  • Balfour Beatty
  • Bilfinger Berger
  • Doosan Babcock
  • Suez Tractebel

EPC (Americas)

  • Black & Veatch
  • Day & Zimmerman
  • Kiewit
  • McDermott
  • Shaw
  • URS
power and process the competitive landscape62
Power and Process The competitive landscape

Bio-Process

(UK)

  • Bilfinger Berger
  • Doosan Babcock
  • Fabrikon
  • Interserve

(Americas)

  • CH2MHill
  • Harris Group
  • ICM
  • POET
  • PRAJ
earth and environmental the competitive landscape
Earth and Environmental The competitive landscape

Source: EFCG April 2008, ENR July 2007, Thomson

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