TIDMWG.
RNS Number : 8608S
Wood Group (John) PLC
09 November 2023
Q3 trading update
9 November 2023
Continued growth in Q3, full year outlook confirmed
John Wood Group PLC ('Wood' or 'the Group') announces a trading
update for the quarter ended
30 September 2023 ('Q3').
Ken Gilmartin, CEO, said:
"We have delivered another quarter of strong growth in revenue
and EBITDA as we continue to execute against the growth strategy we
set out a year ago. I am particularly pleased to see continued
progress across sustainable solutions, now making up 35% of our
pipeline, and some excellent contract wins in the period.
"Reflecting the momentum that we are building in the business,
we remain confident that our actions, business model and strategy
are delivering."
Continued growth in Q3
Group Q3 revenue was $1,477 million, representing growth of 8%
(10% at constant currency) compared to $1,365 million in Q3 2022,
with all of our business units seeing growth.
Group revenue for the first nine months of the year (YTD) was
$4,463 million, representing growth of 13% (15% at constant
currency) and in line with our expectations of around $6 billion
for the full year.
Group adjusted EBITDA for Q3 and YTD was in line with our
expectations, with growth across all of our business units in the
third quarter.
Consulting Q3 revenue was up 22% to $190 million with YTD
revenue up 17% to $546 million. Growth was led by a strong
performance across digital consulting in the quarter, supported by
continued growth in technical consulting across energy.
Consulting YTD EBITDA was broadly flat compared to last year,
reflecting strong underlying trading and the timing of sales in our
energy asset development business, with a strong performance
expected in Q4.
Projects Q3 revenue was up 6% to $604 million, with YTD revenue
up 19% to $1,849 million, with very strong growth continuing across
energy, and some benefit from higher pass-through revenue. As
expected, growth was lower in Q3 than the first half of the year,
reflecting both a stronger 2022 comparator and lower volumes in our
minerals and chemicals businesses.
Projects YTD EBITDA was higher than last year, reflecting the
revenue growth and an improved contract performance overall.
Operations Q3 revenue was up 4% to $613 million, with growth of
9% excluding the sale of Gulf of Mexico(1) . YTD revenue was up 5%
to $1,857 million (9% excl. Gulf of Mexico(1) ). The revenue growth
reflects higher activity levels, particularly in Europe and the
Middle East, and higher pass-through revenue compared to last
year.
Operations YTD EBITDA was higher than last year, helped by good
operational performance.
Investment Services Q3 revenue was up 31% to $71 million, with
YTD revenue up 45% to $212 million. This growth reflects higher
activity in our heavy civils business, and the facilities business
transferred from Projects at the start of the year.
Continued business momentum
We continue to grow and develop our pipeline, particularly
across sustainable solutions which now represent around 35% of our
pipeline compared to 33% at June 2023(2) . We had around $900
million of sustainable revenue in the first nine months of the
year, on course for well over $1 billion for the full year.
Significant contract wins in the period were aligned to our
strategic delivery and included:
-- New strategic partnership with Harbour Energy for its UK
North Sea operations, with associated contracts for five years
(with five one-year extensions) worth around $330 million
-- Global framework agreement with Shell for Wood to deploy our expertise in decarbonisation, digitalisation and asset life extension to enhance Shell's assets worldwide
-- c.$250 million contract extension in SE Asia for operations
and brownfield engineering services
-- Collaboration agreement with OMV for the licensing of its
ReOil(R) plastic recycling technology
-- Five-year framework agreement with National Gas in the UK to
apply our digital solutions to transform and modernise their
infrastructure
-- Contract extension with Woodside Energy for brownfield
engineering services for the North West Shelf Project in
Australia
-- Detailed design engineering for the Gulf of Mexico's deepest floating production unit
Our order book at 30 September 2023 was around $5.9 billion,
flat on a comparable basis to September 2022(3) and slightly lower
than the position at June 2023 ($6 billion). This order book
position supports our expectations for 2024, and reflects continued
growth across Consulting and the phasing of awards in Projects and
Operations, with a stronger Q4 for bookings expected in both these
businesses.
Full year outlook confirmed
Our expectations for 2023 remain unchanged:
-- Revenue is expected to continue to grow in the second half,
albeit at a lower rate than the first half, which included the
benefits of higher pass-through activity and a weak 2022
comparator. Overall, revenue for FY23 is expected to be around $6
billion
-- Our adjusted EBITDA margin is expected to be flat in the
nearer term at around 7%, partly reflecting investments being made
in the business and the level of low margin pass-through revenue
activity
-- As such, adjusted EBITDA for FY23 is expected to be within
our medium-term target of mid to high single digit growth
-- We continue to expect a significant improvement in operating
cash flow in FY23 and our guidance on exceptional cash outflows
remains unchanged. As always, we are subject to the timing of
customer collections in the final month of the year and we expect
modest positive free cash flow in the second half
Presentation
A conference call will be held today at 2:00pm (UK time) with
Ken Gilmartin (CEO) and David Kemp (CFO). The webcast will be live
at https://edge.media-server.com/mmc/p/dehgsrrk .
To join the conference call, and ask any questions, please
register via:
https://register.vevent.com/register/BIba52f0f24b0a4b158f8218eb8d93342e
.
The webcast and transcript will be available after the event at
www.woodplc.com/investors .
For further information:
Simon McGough, President, Investor
Relations +44 (0)7850 978 741
Vikas Gujadhur, Senior Manager, Investor
Relations +44 (0)7855 987 399
Alex Le May / Ariadna Peretz, FTI
Consulting +44 (0)20 3727 1340
Notes
1. Gulf of Mexico labour operations was sold in March 2023. It
contributed $25 million of revenue in Q3 2022 ($74 million in the
first nine months of 2022 and $99 million in FY22). It contributed
$22 million of revenue in FY23 up to its disposal.
2. Estimated share of pipeline related to sustainable solutions:
renewable energy, hydrogen, carbon capture & storage,
electrification and electricity transmission & distribution,
LNG, waste to energy, sustainable fuels & feedstocks and
recycling, processing of energy transition minerals, life sciences,
and decarbonisation in oil & gas, refining & chemicals,
minerals processing and other industrial processes. In the case of
mixed scopes including a decarbonisation element, these are only
included in decarbonisation if 75% or more of the scope relates to
that element.
3. At constant currency and excluding the Gulf of Mexico labour operations business.
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END
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November 09, 2023 02:00 ET (07:00 GMT)
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