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RNS Number : 4598Y
Wood Group (John) PLC
13 May 2021
13 May 2021
John Wood Group PLC ('Company')
LEI: 549300PLYY6I10B6S323
Annual General Meeting Statement
"In Q1 we are seeing continued momentum in order book, which is
up 9% year-to-date. While the year has started slower than
anticipated, margins have remained relatively robust, benefitting
from efficiency initiatives and improved project execution largely
offsetting the impact of lower activity. Our outlook for 2021 is
unchanged: increased Consulting activity and strength in
Operations, supported by an improving order book, are expected to
partly offset lower Projects activity. The successful delivery of
our Future Fit programme and an increased proportion of higher
margin Consulting revenues will deliver a full year margin
improvement. "-Robin Watson, Chief Executive
Q1 Highlights
-- Order book of $7.1bn, up c9% on 31 December 2020 with good
growth in Consultancy and Operations
-- Q1 2021 slower than anticipated but with improving momentum:
relatively robust activity in Consulting and lower activity
in Projects and Operations
-- Q1 EBITDA down on same period last year but margins relatively
robust: high utilisation, successful delivery of Future
Fit programme efficiencies and improving project execution
largely offsetting lower activity
-- 2021 Outlook unchanged. Lower activity anticipated driven
by Projects, offset in part by strength in Consulting and
Operations activity. EBITDA margin to grow modestly
-- Strong progress on ESG targets: 8% reduction in carbon emissions
and over 30% female representation in senior leadership
roles
Trading performance and outlook: margin improvement initiatives
offsetting lower activity
In a challenging market affected by Covid-19, the first quarter
was slower than anticipated but with improving momentum, and was
down on Q1 2020 which was largely unaffected by the pandemic.
Compared to Q1 2020 relatively robust activity in Consulting,
driven by strength in the built environment, was partly offset by
lower activity in Projects as large EPC contracts roll off, and
lower activity in Operations , particularly in conventional energy
due to the impacts of Covid-19 and oil price volatility.
On a like for like basis, excluding the impact of disposals
completed in Q1 2020, EBITDA margins have remained relatively
robust. Our focus on maintaining high utilisation, the successful
delivery of efficiencies from the optimisation of our operating
model under our Future Fit programme and improving project
execution are largely offsetting the impact of lower activity.
Our overall outlook for 2021 of lower activity remains
unchanged. We expect increased activity in Consulting driven by
continued strength in built environment activity. Lower activity in
Projects will be driven by larger contracts in process &
chemicals rolling off and new awards in process & chemicals and
conventional energy being limited to smaller, early stage scopes,
offset in part by resilience in renewables. Strength in Operations
will be driven by a recovery in demand in conventional energy and
growth in process & chemicals, which is supported by improving
momentum in order book.
EBITDA margin is expected to grow modestly with the improvement
driven by maintaining high utilisation, improved project execution,
operational and efficiency improvements including $40m of
efficiency savings from our Future Fit programme, and our business
mix orientating more towards higher margin Consulting.
Order book progression: continued momentum and breadth in new
awards
Improving momentum in order book has continued in Q1 2021. Order
book of $7.1bn is up c9% on December 2020 with good growth in both
Consulting and Operations.
The breadth of recent awards reflect our strategic positioning
for the energy transition and drive for sustainable infrastructure.
These include a contract for engineering, procurement and
construction (EPC) solutions for a hydrothermal recycling facility,
an owner's engineer scope for Europe's largest single-site onshore
windfarm and a global framework agreement to support the delivery
of large-scale green hydrogen production plants. We also continue
to build on our strong customer relationships in conventional
energy and we were recently awarded a five-year integrated
facilities services agreement with TAQA in the North Sea.
Delivering on our ESG targets
At the start of 2021 we established a set of measurable targets
to ensure our accountability for environmental, social and
governance matters and maintain our position as leaders in our
field.
We are already making good progress towards these targets, in
particular:
-- In 2020, we delivered an 8% reduction in our scope 1 and
2 carbon emissions, towards our goal of a 40% reduction
by 2030. We are also focusing on the adoption of a target
for a reduction in scope 3 emissions which we expect to
roll out in the second half of 2021
-- We currently have over 30% of female representation in senior
leadership roles compared to our target of 40% by 2030.
The Board is also representative of our focus on ensuring
diversity of thought with 40% represented by females and
with a wide range of experience and backgrounds
Board changes
As previously announced, Mary Shafer-Malicki will resign as
non-executive director following today's AGM. Mary has been a
non-executive director of Wood since 1 June 2012 and her
resignation is in line with the 2018 UK Corporate Governance Code
requirements on independent director tenure.
Brenda Reichelderfer and Susan Steele joined the Board as
non-executive directors with effect from 31 March 2021. Brenda is a
skilled engineer and business leader and brings considerable global
engineering and operational experience from a range of industries.
Susan has extensive engineering and construction industry,
programme management and supply chain performance experience with
global expertise across a range of end markets.
Next update
Our next update, on 24 June 2021 will be a pre-close trading
update for the six months ended 30 June 2021.
Notes:
1. Company compiled, publicly available consensus comprises
8 analysts who have published estimates since our Full Year
Results for the year ended 31 December 2020 issued on 16
March 2021. Consensus includes: Barclays, Bank of America
Merrill Lynch, Berenberg, UBS, Citigroup, Kepler Cheuvreux,
HSBC and Jefferies.
Consensus 2021 revenue is $7.1bn (range: $6.4bn to $7.4bn),
consensus adjusted EBITDA is $610m (range: $554m-$634m),
consensus operating profit (pre-exceptional items) is $207m
(Range: $141m-$233m) and consensus AEPS is 24.1c (Range:
11.1c-31.9c).
(www.woodplc.com/investors/analyst-consensus-and-coverage)
Notification authorised by:
Martin J McIntyre
Group General Counsel and Company Secretary
Note to Editors:
Wood is a global leader in consulting and engineering across
energy and the built environment, helping to unlock solutions to
some of the world's most critical challenges. We provide
consulting, projects and operations solutions in more than 60
countries, employing around 40,000 people.
www.woodplc.com
Wood
Ellie Dixon - Acting President Investor
Relations 01224 851 369
Citigate Dewe Rogerson
Kevin Smith 020 7638 9571
Chris Barrie
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